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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 September 30, 2020
or
    ☐ 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 001-37680

ELVT-20200930_G1.JPG
 ELEVATE CREDIT, INC.
(Exact name of registrant as specified in its charter)
 
Delaware 46-4714474
State or Other Jurisdiction of
Incorporation or Organization 		I.R.S. Employer Identification Number
4150 International Plaza, Suite 300
Fort Worth, TX 76109
Address of Principal Executive Offices Zip Code
(817) 928-1500
Registrant’s Telephone Number, Including Area Code
Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report

Securities registered pursuant to Section 12(b) of the Act.
Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Shares, $0.0004 par value ELVT New York Stock Exchange

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 preceding 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 ☒ No ☐
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 ☒ No ☐





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 ☐ Non-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 ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:
Class
Outstanding at November 5, 2020
Common Shares, $0.0004 par value 38,070,426






TABLE OF CONTENTS
 
4
Part I - Financial Information
Item 1. Financial Statements
6
7
8
9
10
12
Item 2.
44
Item 3.
87
Item 4.
88
Part II - Other Information
Item 1.
89
Item 1A.
90
Item 2.
123
Item 6.
124
125






NOTE ABOUT FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act") that are based on our management’s beliefs and assumptions and on information currently available to our management. The forward-looking statements are contained throughout this Quarterly Report on Form 10-Q, including in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and "Risk Factors." Forward-looking statements include information concerning our strategy, future operations, future financial position, future revenues, projected expenses, margins, prospects and plans and objectives of management. Forward-looking statements include all statements that are not historical facts and can be identified by terms such as “anticipate,” “believe,” “could,” “seek,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “would” or similar expressions and the negatives of those terms. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements about:
•our future financial performance, including our expectations regarding our revenue, cost of revenue, growth rate of revenue, cost of borrowing, credit losses, marketing costs, net charge-offs, gross profit or gross margin, operating expenses, operating margins, loans outstanding, credit quality, ability to generate cash flow and ability to achieve and maintain future profitability;
•the effects of the outbreak and continuation of the novel coronavirus ("COVID-19") on demand for our products, our business, our financial condition and results of operations, including as a result of the expansion of our payment flexibility program to provide temporary relief to certain customers, underwriting changes we and the bank originators we support are implementing to address credit risk associated with originations during the economic crisis created by the COVID-19 pandemic, and new legislation or other governmental responses to the pandemic;
•the availability of debt financing, funding sources and disruptions in credit markets;
•our ability to meet anticipated cash operating expenses and capital expenditure requirements, including our plans with respect to assessing minimum cash and liquidity requirements and implementing measures to ensure that our cash and liquidity position is maintained through the current economic cycle;
•anticipated trends, growth rates, seasonal fluctuations and challenges in our business and in the markets in which we operate;
•our ability to anticipate market needs and develop new and enhanced or differentiated products, services and mobile apps to meet those needs, and our ability to successfully monetize them;
•our expectations with respect to trends in our average portfolio effective annual percentage rate;
•our anticipated growth and growth strategies and our ability to effectively manage that growth;
•our anticipated expansion of relationships with strategic partners, including banks;
•customer demand for our product and our ability to respond to fluctuations in demand;
•our ability to attract potential customers and retain existing customers and our cost of customer acquisition;
•the ability of customers to repay loans;
•interest rates and origination fees on loans;
•the impact of competition in our industry and innovation by our competitors;
•our ability to attract and retain necessary qualified directors, officers and employees to expand our operations;
•our reliance on third-party service providers;
•our access to the automated clearing house system;
•the efficacy of our marketing efforts and relationships with marketing affiliates;
•our anticipated direct marketing costs and spending;
•the evolution of technology affecting our products, services and markets;
•continued innovation of our analytics platform, including releases of new credit models;
•our ability to prevent security breaches, disruption in service and comparable events that could compromise the personal and confidential information held in our data systems, reduce the attractiveness of the platform or adversely impact our ability to service loans;
4

•our ability to detect and filter fraudulent or incorrect information provided to us by our customers or by third parties;
•our ability to adequately protect our intellectual property;
•our compliance with applicable local, state, federal and foreign laws;
•our compliance with, and the effects on our business and results of operations from, current or future applicable regulatory developments and regulations, including developments or changes from the Consumer Financial Protection Bureau ("CFPB") and developments or changes in state law;
•regulatory developments or scrutiny by agencies regulating our business or the businesses of our third-party partners;
•public perception of our business and industry;
•the anticipated effect on our business of litigation or regulatory proceedings to which we or our officers are a party;
•the anticipated effect on our business of natural or man-made catastrophes;
•the increased expenses and administrative workload associated with being a public company;
•failure to maintain an effective system of internal controls necessary to accurately report our financial results and prevent fraud;
•our liquidity and working capital requirements;
•the estimates and estimate methodologies used in preparing our consolidated financial statements;
•the utility of non-GAAP financial measures;
•the future trading prices of our common stock and the impact of securities analysts’ reports on these prices;
•our anticipated development and release of certain products and applications and changes to certain products;
•our anticipated investing activity;
•trends anticipated to continue as our portfolio of loans matures; and
•any future repurchases under our share repurchase program, including the timing and amount of repurchases thereunder.
We caution you that the foregoing list may not contain all of the forward-looking statements made in this Quarterly Report on Form 10-Q.
Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. We discuss these risks in greater detail in "Risk Factors" and elsewhere in this Quarterly Report on Form 10-Q. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Also, forward-looking statements represent our management’s beliefs and assumptions only as of the date of this Quarterly Report on Form 10-Q. Except as required by law, we assume no obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.
5
Elevate Credit, Inc. and Subsidiaries
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements

CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands except share amounts) September 30,
2020 		December 31,
2019

(unaudited)
ASSETS
Cash and cash equivalents*
$ 224,259  $ 71,215 
Restricted cash
3,135  2,235 
 Loans receivable, net of allowance for loan losses of $49,909 and $79,912, respectively*
341,942  542,073 
Prepaid expenses and other assets*
9,576  6,737 
Operating lease right of use assets
8,811  10,191 
Receivable from CSO lenders
5,260  8,696 
Receivable from payment processors*
5,210  8,681 
Deferred tax assets, net
22,742  8,784 
Property and equipment, net
35,488  35,944 
Goodwill, net
6,776  6,776 
Intangible assets, net
1,163  1,253 
Assets from discontinued operations (see Note 13)
—  81,002 
Total assets
$ 664,362  $ 783,587 

LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable and accrued liabilities (See Note 14)*
$ 35,457  $ 38,679 
Operating lease liabilities
12,593  14,352 
Income taxes payable
691  — 
Deferred revenue*
5,911  12,087 
Notes payable, net (See Note 14)*
438,200  525,439 
Liabilities from discontinued operations (see Note 13)
—  36,541 
Total liabilities
492,852  627,098 
COMMITMENTS, CONTINGENCIES AND GUARANTEES (Note 12)
STOCKHOLDERS’ EQUITY
Preferred stock; $0.0004 par value; 24,500,000 authorized shares; none issued and outstanding at September 30, 2020 and December 31, 2019.
—  — 
Common stock; 0.0004 par value; 300,000,000 authorized shares; 44,960,438 and 44,445,736 issued; 39,082,894 and 43,676,826 outstanding, respectively
18  18 
Additional paid-in capital
199,194  193,061 
Treasury stock; at cost; 5,877,544 and 768,910 shares of common stock, respectively
(13,775) (3,344)
Accumulated deficit
(13,927) (34,342)
Accumulated other comprehensive income, net of tax benefit of $0 and $1,353, respectively
—  1,096 
Total stockholders’ equity
171,510  156,489 
Total liabilities and stockholders’ equity
$ 664,362  $ 783,587 

* These balances include certain assets and liabilities of variable interest entities (“VIEs”) that can only be used to settle the liabilities of that respective VIE. All assets of the Company are pledged as security for the Company’s outstanding debt, including debt held by the VIEs. For further information regarding the assets and liabilities included in the Company's consolidated accounts, see Note 4—Variable Interest Entities.
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
6

Elevate Credit, Inc. and Subsidiaries
CONDENSED CONSOLIDATED INCOME STATEMENTS (UNAUDITED)
Three Months Ended September 30, Nine Months Ended September 30,
(Dollars in thousands, except share and per share amounts) 2020 2019 2020 2019
Revenues
$ 94,164  $ 164,296  $ 374,622  $ 474,736 
Cost of sales:
Provision for loan losses
13,164  91,702  133,216  235,339 
     Direct marketing costs
2,585  10,927  13,898  29,198 
     Other cost of sales
1,672  2,447  5,949  7,233 
Total cost of sales
17,421  105,076  153,063  271,770 
Gross profit
76,743  59,220  221,559  202,966 
Operating expenses:
Compensation and benefits
23,921  23,289  64,239  67,428 
Professional services
8,236  7,552  24,633  23,416 
Selling and marketing
610  1,117  2,468  3,669 
Occupancy and equipment
4,717  3,887  14,196  11,722 
Depreciation and amortization
4,588  4,013  13,413  11,824 
Other
590  1,045  2,568  3,667 
Total operating expenses
42,662  40,903  121,517  121,726 
Operating income
34,081  18,317  100,042  81,240 
Other expense:
Net interest expense (See Note 14)
(11,575) (13,629) (37,408) (48,565)
Non-operating loss
(1,007) (695) (6,692) (695)
Total other expense
(12,582) (14,324) (44,100) (49,260)
Income from continuing operations before taxes
21,499  3,993  55,942  31,980 
Income tax expense
4,883  1,345  15,311  9,994 
Net income from continuing operations
16,616  2,648  40,631  21,986 
Net income (loss) from discontinued operations
4,465  2,116  (15,908) 1,908 
Net income
$ 21,081  $ 4,764  $ 24,723  $ 23,894 

Basic income per share
Continuing operations
$ 0.41  $ 0.06  $ 0.97  $ 0.50 
Discontinued operations
0.11  0.05  (0.38) 0.05 
Basic earnings per share
$ 0.52  $ 0.11  $ 0.59  $ 0.55 

Diluted income per share
Continuing operations
$ 0.41  $ 0.06  $ 0.95  $ 0.50 
Discontinued operations
0.11  0.05  (0.37) 0.04 
Diluted earnings per share
$ 0.52  $ 0.11  $ 0.58  $ 0.54 

Basic weighted average shares outstanding
40,230,256  44,169,964  41,856,894  43,736,458 
Diluted weighted average shares outstanding
40,762,330  44,743,944  42,624,808  44,320,427 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
7
Elevate Credit, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
(Dollars in thousands) Three Months Ended September 30, Nine Months Ended September 30,
2020 2019 2020 2019
Net income
$ 21,081  $ 4,764  $ 24,723  $ 23,894 
Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustment, net of tax of $0 and $1 for the three months ended 2020 and 2019, respectively, and $(14) and $(1) for the nine months ended 2020 and 2019, respectively
—  (821) (2,061) (880)
Reclassification to Net loss from discontinued operations, net of tax of $0 and $1,369 for the three and nine months ended 2020, respectively, and $0 for the three and nine months ended 2019, respectively
—  —  965  — 
Change in derivative valuation, net of tax of $0 for the three and nine months ended September 30, 2020, and $0 and $(95) for the three and nine months ended September 30, 2019, respectively
—  —  —  (208)
Total other comprehensive (loss) income, net of tax
—  (821) (1,096) (1,088)
Total comprehensive income
$ 21,081  $ 3,943  $ 23,627  $ 22,806 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
8
Elevate Credit, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED)
For the periods ended September 30, 2020 and 2019
(Dollars in thousands except share amounts) Preferred Stock
Common Stock
Additional
paid-in
capital 		Treasury Stock Accumulated
deficit 		Accumulated
other
comprehensive
income (loss) 		Total
Shares Amount Shares Amount Shares Amount
Balances at December 31, 2018
—  —  43,329,262  $ 18  $ 183,244  —  $ —  $ (66,525) $ 54  $ 116,791 
Share-based compensation -US
—  —  —  —  7,286  —  —  —  —  7,286 
Share-based compensation -UK
—  —  —  —  (14) —  —  —  —  (14)
Exercise of stock options, net
—  —  37,500  —  121  —  —  —  —  121 
Vesting of restricted stock units, net
—  —  733,447  —  (1,350) —  —  —  —  (1,350)
ESPP shares issued
—  —  142,267  —  498  —  —  —  —  498 
Tax benefit of equity issuance costs
—  —  —  —  (2) —  —  —  —  (2)
Comprehensive loss:
Foreign currency translation adjustment net of tax of $(1)
—  —  —  —  —  —  —  —  (880) (880)
Change in derivative valuation net of tax of $(95)
—  —  —  —  —  —  —  —  (208) (208)
Treasury stock acquired
—  —  (91,370) —  —  91,370  (434) —  —  (434)
Net income from continuing operations
—  —  —  —  —  —  —  21,986  —  21,986 
Net income from discontinued operations
—  —  —  —  —  —  —  1,908  —  1,908 
Balances at September 30, 2019

—  —  44,151,106  $ 18  $ 189,783  91,370  $ (434) $ (42,631) $ (1,034) $ 145,702 

Balances at December 31, 2019
—  —  43,676,826  18  193,061  768,910  (3,344) (34,342) 1,096  156,489 
Share-based compensation -US
—  —  —  —  6,513  —  —  —  —  6,513 
Share-based compensation -UK
—  —  —  —  45  —  —  —  —  45 
Exercise of stock options, net
—  —  34,185  —  (51) —  —  —  —  (51)
Vesting of restricted stock units, net
—  —  199,933  —  (727) —  —  —  —  (727)
ESPP shares issued
—  —  280,584  —  353  —  —  —  —  353 
Comprehensive loss:
Foreign currency translation adjustment net of tax of $(14)
—  —  —  —  —  —  —  —  (2,061) (2,061)
Reclassification to Net income (loss) from discontinued operations net of tax of $1,369
—  —  —  —  —  —  —  —  965  965 
Treasury stock reissued for RSUs vesting
—  —  983,625  —  —  (983,625) 4,308  (4,308) —  — 
Treasury stock acquired
—  —  (6,092,259) —  —  6,092,259  (14,739) —  —  (14,739)
Net income from continuing operations
—  —  —  —  —  —  —  40,631  —  40,631 
Net loss from discontinued operations
—  —  —  —  —  —  —  (15,908) —  (15,908)
Balances at September 30, 2020

—  —  39,082,894  $ 18  $ 199,194  5,877,544  $ (13,775) $ (13,927) $ —  $ 171,510 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
9
Elevate Credit, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(Dollars in thousands) Nine Months Ended September 30,
2020 2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income
$ 24,723  $ 23,894 
Less: Net (income) loss from discontinued operations, net of tax
15,908  (1,908)
Net income from continuing operations
40,631  21,986 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
13,413  11,824 
Provision for loan losses
133,216  235,339 
Share-based compensation
6,513  7,272 
Amortization of debt issuance costs
515  449 
Amortization of loan premium
3,734  4,454 
Amortization of derivative assets
—  108 
Amortization of operating leases
(378) 113 
Deferred income tax expense, net
14,178  9,418 
Non-operating loss
6,692  695 
Changes in operating assets and liabilities:
Prepaid expenses and other assets
(3,305) (486)
Income taxes payable
1,156  — 
Receivables from payment processors
3,470  2,022 
Receivables from CSO lenders
3,436  6,489 
Interest receivable
(30,417) (53,803)
State and other taxes payable
(91) 68 
Deferred revenue
(5,558) (10,670)
Accounts payable and accrued liabilities
(9,500) 4,565 
Net cash provided by continuing operating activities
177,705  239,843 
Net cash provided by discontinued operating activities
1,286  29,261 
Net cash provided by operating activities
178,991  269,104 
CASH FLOWS FROM INVESTING ACTIVITIES:
Loans receivable originated or participations purchased
(419,472) (771,835)
Principal collections and recoveries on loans receivable
514,316  580,002 
Participation premium paid
(2,823) (4,530)
Purchases of property and equipment
(12,867) (14,881)
Net cash provided by (used in) continuing investing activities
79,154  (211,244)
Net cash provided by (used in) discontinued investing activities
9,457  (23,006)
Net cash provided by (used in) investing activities
88,611  (234,250)
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
10
Elevate Credit, Inc. and Subsidiaries
  Nine Months Ended September 30,
(Dollars in thousands) 2020 2019
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from notes payable
$ 6,500  $ 49,000 
Payments of notes payable
(94,000) (60,000)
Debt issuance costs paid
(253) (2,593)
Debt prepayment costs paid
—  (850)
ESPP shares issued
354  498 
Common stock repurchased
(14,739) (434)
Proceeds from stock option exercises
27  121 
Taxes paid related to net share settlement of equity awards
(804) (1,349)
Net cash used in continuing financing activities
(102,915) (15,607)
Net cash used in discontinued financing activities
(16,310) (4)
Net cash used in financing activities
(119,225) (15,611)
Net increase in cash, cash equivalents and restricted cash
148,377  19,243 
Change in cash, cash equivalents and restricted cash from discontinued operations
5,567  (6,251)
Change in cash, cash equivalents and restricted cash from continuing operations
153,944  12,992 
Cash and cash equivalents, beginning of period
71,215  48,349 
Restricted cash, beginning of period
2,235  2,535 
Cash, cash equivalents and restricted cash, beginning of period
73,450  50,884 
Cash and cash equivalents, end of period
224,259  61,641 
Restricted cash, end of period
3,135  2,235 
Cash, cash equivalents and restricted cash, end of period
$ 227,394  $ 63,876 
Supplemental cash flow information:
Interest paid
$ 36,979  $ 49,877 
Taxes paid
$ 397  $ 565 
Non-cash activities:
CSO fees charged-off included in Deferred revenues and Loans receivable
$ 684  $ 4,174 
CSO fees on loans paid-off prior to maturity included in Receivable from CSO lenders and Deferred revenue
$ 42  $ 159 
Annual membership fee included in Deferred revenues and Loans receivable
$ 108  $ 72 
Reissuances of Treasury stock
$ 4,308  $ — 
Changes in fair value of interest rate caps
$ —  $ 304 
Tax benefit of equity issuance costs included in Additional paid-in capital
$ —  $ 2 
Impact of deferred tax asset included in Other comprehensive income
$ 1,354  36 
Leasehold improvements allowance included in Property and equipment, net
$ —  $ 439 
Lease incentive allowance included in Accounts payable and accrued expenses
$ —  $ 3,720 
Operating lease right of use assets recognized
$ —  $ 11,809 
Operating lease liabilities recognized
$ —  $ 15,966 


The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
11
Elevate Credit, Inc. and Subsidiaries
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
For the three and nine months ended September 30, 2020 and 2019

NOTE 1 - BASIS OF PRESENTATION AND ACCOUNTING CHANGES

Business Operations
Elevate Credit, Inc. (the “Company”) is a Delaware corporation. The Company provides technology-driven, progressive online credit solutions to non-prime consumers. The Company uses advanced technology and proprietary risk analytics to provide more convenient and more responsible financial options to its customers, who are not well-served by either banks or legacy non-prime lenders. The Company currently offers unsecured online installment loans, lines of credit and credit cards in the United States (the “US”). The Company’s products, Rise, Elastic and Today Card, reflect its mission of “Good Today, Better Tomorrow” and provide customers with access to competitively priced credit and services while helping them build a brighter financial future with credit building and financial wellness features. In the United Kingdom ("UK"), the Company previously offered unsecured installment loans via the internet through its wholly owned subsidiary, Elevate Credit International Limited, (“ECIL”) under the brand name of Sunny. On June 29, 2020, ECIL entered into administration in accordance with the provisions of the UK Insolvency Act 1986 and pursuant to a resolution of the board of directors of ECIL. The onset of Coronavirus Disease 2019 ("COVID-19") coupled with the lack of clarity within the UK regulatory environment led to the decision to place ECIL into administration. The management, business, affairs and property of ECIL have been placed into the direct control of the appointed administrators, KPMG LLP. Accordingly, the Company deconsolidated ECIL as of June 29, 2020 and presents ECIL's results as discontinued operations for all periods presented. See Note 13—Discontinued Operations for more information regarding the presentation of ECIL.
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements as of September 30, 2020 and for the three and nine month periods ended September 30, 2020 and 2019 include the accounts of the Company, its wholly owned subsidiaries and variable interest entities ("VIEs") where the Company is the primary beneficiary. All significant intercompany transactions and accounts have been eliminated.
The unaudited condensed consolidated financial information included in this report has been prepared in accordance with accounting principles generally accepted in the US (“US GAAP”) for interim financial information and Article 10 of Regulation S-X and conform, as applicable, to general practices within the finance company industry. The principles for interim financial information do not require the inclusion of all the information and footnotes required by US GAAP for complete financial statements. Therefore, these unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements for the year ended December 31, 2019 in the Company's Annual Report on Form 10-K, filed with the U.S. Securities and Exchange Commission ("SEC") on February 14, 2020. In the opinion of the Company’s management, the unaudited condensed consolidated financial statements include all adjustments, all of which are of a normal recurring nature, necessary for a fair presentation of the results for the interim periods. The Company's business is seasonal in nature so the results of operations for the three and nine months ended September 30, 2020 are not necessarily indicative of the results to be expected for the full year.
Reclassifications
Certain amounts in the prior periods presented herein have been reclassified to conform to the current period financial statement presentation. The Company does not believe that these reclassifications have a material impact on the consolidated financial statements. The Company reclassified $605 thousand to Accounts payable and accrued liabilities with an offset to Income taxes payable related to December 31, 2019 state and other taxes payable.



12
Elevate Credit, Inc. and Subsidiaries
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — (Continued)
For the three and nine months ended September 30, 2020 and 2019

Correction of Immaterial Errors in Previously-Issued Financial Statements
The Company has corrected immaterial errors in its presentation of total comprehensive income for the three months ended September 30, 2019. The Company determined that the historical presentation was in error because it presented the quarter-to-date foreign currency translation adjustment, net of tax as increasing total comprehensive income when it was decreasing total comprehensive income. The presentation of the year-to-date total comprehensive income was not impacted. The Company corrected the foreign currency translation adjustment, net of tax to be ($821) thousand, a correction which lowered total comprehensive income by $1.6 million. The Company concluded the error was immaterial to the unaudited Condensed Consolidated Financial Statements included in the Company's Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2019 and has revised its Condensed Consolidated Financial Statements for the three months ended September 30, 2019 presented in this Form 10-Q. A summary of the correction is below.
(Dollars in thousands) Three Months Ended September 30, 2019
As reported:
Foreign currency translation adjustment, net of tax of $(1)
$ 821 
Total other comprehensive income, net of tax 821 
Total comprehensive income $ 5,585 
As corrected:
Foreign currency translation adjustment, net of tax of $1
$ (821)
Total other comprehensive income, net of tax (821)
Total comprehensive income $ 3,943 
Reclassification of Accumulated Other Comprehensive Income to Net Income
For the nine months ended September 30, 2020, the Company reclassified a $2.3 million net loss from cumulative translation adjustments within Accumulated other comprehensive income to Net loss from discontinued operations as part of the Company's loss on disposal related to the placement of ECIL into administration. In addition, a $1.4 million deferred tax benefit was reclassified to remove the associated deferred tax asset as part of this transaction.
For the nine months ended September 30, 2019, the Company and ESPV utilized interest rate caps to offset interest rate fluctuations in the Company's and ESPV's future interest payments on certain of their Notes payable. Effective gains or losses related to these cash flow hedges were reported in Accumulated other comprehensive income and reclassified into earnings, through interest expense, in the period or periods in which the hedged transactions affected earnings. The Company recorded a $0.3 million gain related to the maturation of the interest rate caps in the nine months ended September 30, 2019. See Note 9—Fair Value for additional information on these cash flow hedges.
Use of Estimates
The preparation of the unaudited condensed consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.
Significant items subject to such estimates and assumptions include the valuation of the allowance for loan losses, goodwill, long-lived and intangible assets, deferred revenues, contingencies, the fair value of derivatives, the income tax provision, valuation of share-based compensation, operating lease right of use assets, operating lease liabilities and the valuation allowance against deferred tax assets. The Company bases its estimates on historical experience, current data and assumptions that are believed to be reasonable. Actual results in future periods could differ from those estimates.



13
Elevate Credit, Inc. and Subsidiaries
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — (Continued)
For the three and nine months ended September 30, 2020 and 2019

Revenue Recognition
The Company recognizes consumer loan fees as revenues for each of the loan products it offers. Revenues on the Condensed Consolidated Income Statements include: finance charges, lines of credit fees, fees for services provided through CSO programs (“CSO fees”), and interest, as well as any other fees or charges permitted by applicable laws and pursuant to the agreement with the borrower. The Company also records revenues related to the sale of customer applications to unrelated third parties. These applications are sold with the customer’s consent in the event that the Company or its CSO lenders are unable to offer the customer a loan. Revenue is recognized at the time of the sale. Other revenues also include marketing and licensing fees received from the originating lender related to the Elastic product and Rise bank-originated loans and from CSO fees related to the Rise product. Revenues related to these fees are recognized when the service is performed.
The Company accrues finance charges on installment loans on a constant yield basis over their terms. The Company accrues and defers fixed charges such as CSO fees and lines of credit fees when they are assessed and recognizes them to earnings as they are earned over the life of the loan. The Company accrues interest on credit cards based on the amount of the outstanding credit card balance and the related contractual interest rate. Credit card membership fees are amortized to revenue over the card membership period. Other credit card fees, such as late payment fees and returned payment fees, are accrued when assessed. The Company does not accrue finance charges and other fees on installment loans or lines of credit for which payment is greater than 60 days past due. Credit card interest charges are recognized based on the contractual provisions of the underlying arrangements and are not accrued when payment is past due by more than 90 days. Installment loans and lines of credit are considered past due if a grace period has not been requested and a scheduled payment is not paid on its due date. Credit cards have a grace period of 25 days and are considered delinquent after the grace period. Payments received on past due loans are applied against the loan and accrued interest balance to bring the loan current. Payments are generally first applied to accrued fees and interest and then to the principal loan balance.
In March 2020, the outbreak of the novel coronavirus (“COVID-19”) was recognized as a pandemic by the World Health Organization, and the spread of COVID-19 has created a global public health crisis that has resulted in unprecedented disruption to businesses and economies. In response to the pandemic's effects, and in accordance with federal and state guidelines, the Company expanded its payment flexibility programs for its customers, including payment deferrals. This program allows for a deferral of payments for an initial period of 30 to 60 days, and up to a maximum of 180 days on a cumulative basis. A customer will return to the normal payment schedule after the end of the deferral period with the extension of the maturity date equivalent to the deferral period, which is not to exceed an additional 180 days. The finance charges will continue to accrue at a lower effective interest rate over the expected term of the loan as adjusted for the deferral period provided (not to exceed an amount greater than the amount at which the borrower could settle the loan) or placed on non-accrual status.
The Company’s business is affected by seasonality, which can cause significant changes in portfolio size and profit margins from quarter to quarter. Although this seasonality does not impact the Company’s policies for revenue recognition, it does generally impact the Company’s results of operations by potentially causing an increase in its profit margins in the first quarter of the year and decreased margins in the second through fourth quarters.
Installment Loans, Lines of Credit and Credit Cards
Installment loans, lines of credit and credit cards, including receivables for finance charges, fees and interest, are unsecured and reported as Loans receivable, net of allowance for loan losses on the Condensed Consolidated Balance Sheets. Installment loans are multi-payment loans that require the pay-down of portions of the outstanding principal balance in multiple installments through the Rise brand. Line of credit accounts include customer cash advances made through the Rise brand in two states, through September 2020, and the Elastic brand. Credit cards represent credit card balances, uncollected billed interest and fees through the Today Card brand. All outstanding balances, allowance for loan losses, and revenues for the Today Card were immaterial in 2019 and for the nine months ended September 30, 2020.
The Company offers Rise installment and line of credit products directly to customers. Rise ceased offering line of credit products in September 2020. Elastic lines of credit, Rise bank-originated installment loans and Today credit card receivables represent participation interests acquired from third-party lenders through a wholly owned subsidiary or by a VIE. Based on agreements with the third-party lenders, the VIEs pay a loan premium on the participation interests. The loan premium is amortized over the expected life of the outstanding loan amount. See Note 4—Variable Interest Entities for more information regarding these participation interests in Rise and Elastic receivables.



14
Elevate Credit, Inc. and Subsidiaries
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — (Continued)
For the three and nine months ended September 30, 2020 and 2019

The Company considers impaired loans as accounts over 60 days past due (for installment loans and lines of credit) or 120 days past due (for credit cards), or loans which become uncollectible based on information that the Company becomes aware of (e.g., receipt of customer bankruptcy notice). The impaired loans are charged-off at the time that they are deemed to be uncollectible.
A modification of finance receivable terms is considered a troubled debt restructuring ("TDR") if the borrower is experiencing financial difficulty and the Company grants a concession it would not otherwise have considered to a borrower. The Company typically considers TDRs to include all installment and line of credit loans that were modified by granting principal and interest forgiveness or by extension of the maturity date for more than 60 days as a part of a loss mitigation strategy.
On March 22, 2020, federal and state banking regulators issued a joint statement on working with customers affected by COVID-19 (the "Interagency Statement"). The Interagency Statement includes guidance on accounting for loan modifications. In accordance with the Interagency Statement, the Company has elected to not recognize modified loans as TDRs if the borrower was both not more than 30 days past due as of March 1, 2020 and the modification stems from the effects of the COVID-19 outbreak. The minor modifications offered by the Company to borrowers that meet both qualifications may include payment deferrals less than six months, interest or fee waivers, extensions of payment terms or delays in payment. If the borrower was not current at March 1, 2020, the Company offers similar modifications that are considered TDRs. This election is applicable from March 1, 2020 until the earlier of 60 days following the date the COVID-19 national emergency comes to an end or December 31, 2020.
Operating Segments
The Company determines operating segments based on how its chief operating decision-maker manages the business, including making operating decisions, deciding how to allocate resources and evaluating operating performance. The Company's chief operating decision-maker is its Chief Executive Officer, who reviews the Company's operating results monthly on a consolidated basis.
The Company has one reportable segment, which provides online financial services for non-prime consumers. The Company has aggregated all components of its business into a single reportable segment based on the similarities of the economic characteristics, the nature of the products and services, the distribution methods, the type of customers and the nature of the regulatory environments. With the disposal of ECIL, all of the Company's assets and revenue are in one geographic location, therefore, segment reporting based on geography has been discontinued.
Property and Equipment, net
Property and equipment are stated at cost, net of accumulated depreciation and amortization. The following table summarizes the components of net property and equipment.
(Dollars in thousands) September 30, 2020 December 31, 2019
Property and equipment, gross $ 113,547  $ 100,766 
Accumulated depreciation and amortization (78,059) (64,822)
Property and equipment, net $ 35,488  $ 35,944 





15
Elevate Credit, Inc. and Subsidiaries
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — (Continued)
For the three and nine months ended September 30, 2020 and 2019

Goodwill and Indefinite Lived Intangible Assets
Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in each business combination. In accordance with Accounting Standards Codification ("ASC") 350-20-35, Goodwill— Subsequent Measurement, the Company performs a quantitative approach method impairment review of goodwill and intangible assets with an indefinite life annually at October 1 and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. Prior to 2019, the Company performed this test at October 31. The Company completed its annual test as of October 1, 2019 and determined that there was no evidence of impairment of goodwill or indefinite lived intangible assets. As a result of the recent global economic impact and uncertainty due to COVID-19, the Company concluded a triggering event had occurred as of March 31, 2020, and accordingly, performed interim impairment testing on the goodwill balances of its reporting units. The Company performed a detailed qualitative and quantitative assessment of each reporting unit and concluded that the goodwill associated with the previously consolidated UK reporting unit was impaired as the fair value of the UK reporting unit was less than its carrying amount. The impairment loss of $9.3 million is included in Loss from discontinued operations due to the deconsolidation of ECIL. While there was a decline in the fair value of the Elastic reporting unit, there was no impairment identified during the quantitative assessment. The Company has $6.8 million of goodwill (all related to the Elastic reporting unit) remaining on the Condensed Consolidated Balance Sheets as of September 30, 2020.
Prior to the adoption of ASU No. 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment ("ASU 2017-04"), the Company’s impairment evaluation of goodwill was already based on comparing the fair value of the Company’s reporting units to their carrying value. The adoption of ASU 2017-04 as of January 1, 2020 had no impact on the Company's evaluation procedures. The fair value of the reporting units is determined based on a weighted average of the income and market approaches. The income approach establishes fair value based on estimated future cash flows of the reporting units, discounted by an estimated weighted-average cost of capital developed using the capital asset pricing model, which reflects the overall level of inherent risk of the reporting units. The income approach uses the Company’s projections of financial performance for a six- to nine-year period and includes assumptions about future revenues growth rates, operating margins and terminal values. The market approach establishes fair value by applying cash flow multiples to the reporting units’ operating performance. The multiples are derived from other publicly traded companies that are similar but not identical to the Company from an operational and economic standpoint.

Leases
The Company determines if an arrangement is a lease at inception. Operating leases are included in Operating lease right of use (“ROU”) assets and Operating lease liabilities on its Condensed Consolidated Balance Sheets. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. As most of its leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of future payments. The operating lease ROU asset may also include initial direct costs incurred and excludes any lease payments made and lease incentives. The Company's lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components. The lease and non-lease components are accounted for as a single lease component.

Treasury Stock
The Company evaluates each stock repurchase transaction in the period in which it is completed. If the repurchase transaction is significantly in excess of the current market price at purchase, the Company will identify whether the price paid included payment for other agreements, rights, and privileges. Repurchase transactions that do not contain these elements or are not significantly in excess of the current market price at purchase are accounted for using the cost method. The Company anticipates using its treasury stock to fulfill certain employee stock compensation grants and settlements. The Company has elected to use a first in, first out ("FIFO") method for assigning share cost at reissuance. Any gain or loss in the stock value will be credited or charged to paid in capital upon subsequent reissuance of the shares, with losses in excess of previously recognized gains charged to retained earnings. The Company is not obligated to purchase or reissue any shares at any time in accordance with its previously disclosed share repurchase plan.



16
Elevate Credit, Inc. and Subsidiaries
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — (Continued)
For the three and nine months ended September 30, 2020 and 2019

Recently Adopted Accounting Standards
In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) ("ASU 2016-02"). ASU 2016-02 is intended to improve the reporting of leasing transactions to provide users of financial statements with more decision-useful information. ASU 2016-02 will require organizations that lease assets to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. In July 2018, the FASB issued ASU No. 2018-10, Codification Improvements to Topic 842, Leases (“ASU 2018-10”), which clarifies certain matters in the codification with the intention to correct unintended application of the guidance. Also in July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842): Targeted Improvements (“ASU 2018-11”), which provides entities with an additional (and optional) transition method whereby the entity applies the new lease standard at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. Additionally, under the new transition method, an entity’s reporting for the comparative periods presented in the financial statements in which it adopts the new lease standard will continue to be in accordance with current US GAAP (Topic 840, Leases).
ASU 2016-02, as amended, is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. The Company elected to adopt the transition method in ASU 2018-11 by applying the practical expedient prospectively at January 1, 2019. The Company also elected to apply the optional practical expedient package to not reassess existing or expired contracts for lease components, lease classification or initial direct costs.
The adoption of ASU 2016-02, as amended, resulted in the recognition of approximately $11.5 million right of use assets and $15.4 million liabilities for operating leases, of which $10.3 million and $14.2 million related to continuing operations, respectively. ASU 2016-02 did not have a material impact on the Company's Condensed Consolidated Income Statements.
In July 2019, the FASB issued Accounting Standards Update ("ASU") No. 2019-07, Codification Updates to SEC Sections ("ASU 2019-07"). The purpose of ASU 2019-07 is to amend various SEC paragraphs pursuant to the issuance of SEC Final Rule Releases No. 33-10532, Disclosure Update and Simplification, and Nos. 33-10231 and 33-10442, Investment Company Reporting Modernization. Among other revisions, the amendments reduce duplication and clarify the inclusion of comprehensive income. The Company has adopted all of the amendments of ASU 2019-07 as of July 2019 with no impact to the Company's condensed consolidated financial statements.
In August 2018, the FASB issued ASU No. 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract ("ASU 2018-15"). The purpose of ASU 2018-15 is to provide additional guidance on the accounting for costs of implementation activities performed in a cloud computing arrangement that is a service contract. This guidance is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. The Company elected to adopt this ASU prospectively as of January 1, 2020 and has implemented a control structure to identify cloud computing arrangements for appropriate accounting treatment similar to its procedures for right of use assets. ASU 2018-15 did not have a material impact on the Company's condensed consolidated financial statements.
In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement ("ASU 2018-13"). The purpose of ASU 2018-13 is to modify the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement. This guidance is effective for public companies for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years and requires both a prospective and retrospective approach to adoption based on amendment specifications. Early adoption of any removed or modified disclosures is permitted. Additional disclosures may be delayed until their effective date. The adoption of ASU 2018-13 at January 1, 2020 did not have a material impact on the Company's condensed consolidated financial statements.




17
Elevate Credit, Inc. and Subsidiaries
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — (Continued)
For the three and nine months ended September 30, 2020 and 2019

In January 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment ("ASU 2017-04"). The purpose of ASU 2017-04 is to simplify the subsequent measurement of goodwill. The amendments modify the concept of impairment from the condition that exists when the carrying amount of goodwill exceeds its implied fair value to the condition that exists when the carrying amount of a reporting unit exceeds its fair value. An entity no longer will determine goodwill impairment by calculating the implied fair value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination. This guidance is effective for public companies for goodwill impairment tests in fiscal years beginning after December 15, 2019. The Company has adopted all of the amendments of ASU 2017-04 as of January 2020 with no impact to the Company's condensed consolidated financial statements. The Company used the simplified subsequent measurement requirements per ASU 2017-04 in its impairment analysis.
In March 2020, the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") was enacted in response to COVID-19. Among other things, the CARES Act provides income tax relief inclusive of permitting NOL carryovers and carrybacks to offset 100% of taxable income for taxable years beginning before 2021. In addition, the CARES Act allows NOLs incurred in 2018, 2019, and 2020 to be carried back to each of the five preceding taxable years to generate a refund of previously paid income taxes. The Company has reviewed the tax relief provisions of the CARES Act regarding its eligibility and determined that the impact is likely to be insignificant with regard to its effective tax rate. The Company continues to monitor and evaluate its eligibility for the CARES Act tax relief provisions to identify any that may become applicable in the future.
Accounting Standards to be Adopted in Future Periods
In March 2020, the FASB issued Accounting Standards Update ("ASU") No. 2020-03, Codification Improvements to Financial Instruments ("ASU 2020-03"). The purpose of ASU 2020-03 is to clarify, correct errors in or make minor improvements to the codification. Among other revisions, the amendments clarify that an entity should record an allowance for credit losses when an entity regains control of financial assets sold in accordance with Topic 326. ASU 2020-03 also clarifies disclosure requirements for debt securities under Topic 942 and affirms that all entities are required to provide the fair value option disclosures within paragraphs 825-10-50-24 through 50-32 of the codification. The amendments in this update are effective on the latter of the issuance of ASU 2020-03 or the effective date of their related topic. The Company does not anticipate the adoption of ASU 2020-03 to have a material impact on the Company's condensed consolidated financial statements.
In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting ("ASU 2020-04"). The purpose of ASU 2020-04 is to provide optional guidance for a period of time related to accounting for reference rate reform on financial reporting. It is intended to reduce the potential burden of reviewing contract modifications related to discontinued rates. The amendments and expedients in this update are effective as of March 12, 2020 through December 31, 2022 and may be elected by topic. The Company is assessing the potential impact of electing all or portions of ASU 2020-04 on the Company's condensed consolidated financial statements.
In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes ("ASU 2019-12"). The purpose of ASU 2019-12 is to reduce complexity in the accounting standards for income taxes by removing certain exceptions as well as clarifying certain allocations. This update also addresses the split recognition of franchise taxes that are partially based on income between income-based tax and non-income-based tax. This guidance is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. Early adoption is permitted. The Company is still assessing the potential impact of ASU 2019-12 on the Company's condensed consolidated financial statements.




18
Elevate Credit, Inc. and Subsidiaries
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — (Continued)
For the three and nine months ended September 30, 2020 and 2019

In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"). ASU 2016-13 is intended to replace the incurred loss impairment methodology in current US GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates to improve the quality of information available to financial statement users about expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. In April 2019, the FASB issued ASU No. 2019-04, Codification Improvements to Topic 326, Financial Instruments ("ASU 2019-04"). This amendment clarifies the guidance in ASU 2016-13. The guidance in ASU 2016-13 was further clarified by ASU No. 2019-11, Codification Improvements to Topic 326, Financial Instruments ("ASU 2019-11") issued in November 2019. ASU 2019-11 provides transition relief such as permitting entities an accounting policy election regarding existing TDRs, among other things. In May 2019, the FASB issued ASU No. 2019-05, Financial Instruments-Credit Losses (Topic 326): Targeted Transition Relief ("ASU 2019-05"). The purpose of this amendment is to provide entities that have certain instruments within the scope of Subtopic 326-20, Financial Instruments-Credit Losses-Measured at Amortized Cost, with an option to irrevocably elect the fair value option in Subtopic 825-10, Financial Instruments-Overall, on an instrument-by-instrument basis. Election of this option is intended to increase comparability of financial statement information and reduce costs for certain entities to comply with ASU 2016-13. For public entities, ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. In November 2019, the FASB issued ASU No. 2019-10, Financial Instruments - Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates ("ASU 2019-10"). The purpose of this amendment is to create a two-tier rollout of major updates, staggering the effective dates between larger public companies and all other entities. This granted certain classes of companies, including Smaller Reporting Companies ("SRCs"), additional time to implement major FASB standards, including ASU 2016-13. Larger public companies will still have an effective date for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. All other entities are permitted to defer adoption of ASU 2016-13, and its related amendments, until the earlier of fiscal periods beginning after December 15, 2022. In February 2020, the FASB issued ASU No. 2020-02, Financial Instruments - Credit Losses (Topic 326), and Leases (Topic 842): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 119 and Update to SEC Section on Effective Date Related to Accounting Standards Update No. 2016-12 ("ASU 2020-02"). ASU 2020-02 updates the SEC staff guidance related to ASU 2016-13 and all contingent amendments. Under the current SEC definitions, the Company meets the definition of an SRC as of the ASU 2019-10 issuance date and is adopting the deferral period for ASU 2016-13.




19
Elevate Credit, Inc. and Subsidiaries
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — (Continued)
For the three and nine months ended September 30, 2020 and 2019

NOTE 2 - EARNINGS PER SHARE
Basic earnings per share ("EPS") is computed by dividing net income by the weighted average number of common shares outstanding ("WASO") during each period. Also, basic EPS includes any fully vested stock and unit awards that have not yet been issued as common stock. There are no unissued fully vested stock and unit awards at September 30, 2020 and 2019.

Diluted EPS is computed by dividing net income by the WASO during each period plus any unvested stock option awards granted, vested unexercised stock options and unvested restricted stock units ("RSUs") using the treasury stock method but only to the extent that these instruments dilute earnings per share.
The computation of earnings per share was as follows for three and nine months ended September 30, 2020 and 2019: 
Three Months Ended September 30, Nine Months Ended September 30,
(Dollars in thousands, except share and per share amounts) 2020 2019 2020 2019
Numerator (basic and diluted):
Net income from continuing operations
$ 16,616  $ 2,648  $ 40,631  $ 21,986 
Net income (loss) from discontinued operations 4,465  2,116  (15,908) 1,908 
Net income
$ 21,081  $ 4,764  $ 24,723  $ 23,894 
Denominator (basic):
Basic weighted average number of shares outstanding
40,230,256  44,169,964  41,856,894  43,736,458 
Denominator (diluted):
Basic weighted average number of shares outstanding
40,230,256  44,169,964  41,856,894  43,736,458 
Effect of potentially dilutive securities:
Employee share plans (options, RSUs and ESPP)
532,074  573,980  767,914  583,969 
Diluted weighted average number of shares outstanding
40,762,330  44,743,944  42,624,808  44,320,427 
Basic and diluted earnings per share:
Continuing operations
$ 0.41  $ 0.06  $ 0.97  $ 0.50 
Discontinued operations
0.11  0.05  (0.38) 0.05 
Basic earnings per share
$ 0.52  $ 0.11  $ 0.59  $ 0.55 
Continuing operations
$ 0.41  $ 0.06  $ 0.95  $ 0.50 
Discontinued operations
0.11  0.05  (0.37) 0.04 
Diluted earnings per share
$ 0.52  $ 0.11  $ 0.58  $ 0.54 

For the three months ended September 30, 2020 and 2019, the Company excluded the following potential common shares from its diluted earnings per share calculation because including these shares would be anti-dilutive:
•2,136,079 and 1,428,046 common shares issuable upon exercise of the Company's stock options; and
•2,300,612 and 2,268,439 common shares issuable upon vesting of the Company's RSUs.

For the nine months ended September 30, 2020 and 2019, the Company excluded the following potential common shares from its diluted earnings per share calculation because including these shares would be anti-dilutive:
•1,499,488 and 1,441,952 common shares issuable upon exercise of the Company's stock options; and
•2,713,045 and 3,393,374 common shares issuable upon vesting of the Company's RSUs.




20
Elevate Credit, Inc. and Subsidiaries
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — (Continued)
For the three and nine months ended September 30, 2020 and 2019

NOTE 3 - LOANS RECEIVABLE AND REVENUE
Revenues generated from the Company’s consumer loans for the three and nine months ended September 30, 2020 and 2019 were as follows:
Three Months Ended September 30, Nine Months Ended September 30,
(Dollars in thousands) 2020 2019 2020 2019
Finance charges
$ 54,348  $ 92,464  $ 222,078  $ 253,932 
CSO fees
2,822  8,939  14,129  32,739 
Lines of credit fees
36,758  62,174  137,603  186,223 
Other
236  719  812  1,842 
Total revenues
$ 94,164  $ 164,296  $ 374,622  $ 474,736 
The Company's portfolio consists of both installment loans and lines of credit, which are considered the portfolio segments for all periods presented. The Rise product is primarily installment loans with lines of credit offered in two states, which ceased lines of credit origination activity in September 2020. The Elastic product is a line of credit product. In November of 2018, the Company expanded a test launch of the Today Card, a credit card product. Balances and activity for the Today Card as of and for the nine months ended September 30, 2020 and 2019 were not material.
The following reflects the credit quality of the Company’s loans receivable as of September 30, 2020 and December 31, 2019 as delinquency status has been identified as the primary credit quality indicator. The Company classifies its loans as either current or past due. A customer in good standing may request up to a 16-day grace period when or before a payment becomes due and, if granted, the loan is considered current during the grace period. In response to the COVID-19 pandemic, the Company, along with the banks it supports, has also expanded existing payment flexibility programs to provide temporary payment relief to certain customers who meet the program’s qualifications. These programs allow for a deferral of payments for an initial period of 30 to 60 days, which the Company may extend for an additional 30 days, for a maximum of 180 days on a cumulative basis. A customer will return to the normal payment schedule after the end of the deferral period, with the extension of the maturity date equivalent to the deferral period, which is not to exceed an additional 180 days. Customers that were 30 days past due or less as of March 1, 2020 or the date the customer requested the deferral are considered current. Customers more than 30 days past due as of March 1, 2020 or the date the customer requested the deferral are considered delinquent. As of September 30, 2020, 10.4% of customers have been provided relief through a COVID-19 payment deferral program for a total of $38.7 million in loans with deferred payments. The Company believes that the allowance for loan losses is adequate to absorb the losses inherent in the portfolio as of September 30, 2020.
Installment loans, lines of credit and credit cards not impacted by COVID are considered past due if a grace period has not been requested and a scheduled payment is not paid on its due date. All impaired loans that were not accounted for as a TDR as of September 30, 2020 and December 31, 2019 have been charged off.
September 30, 2020
(Dollars in thousands) Rise Elastic(1) Total
Current loans
$ 205,650  $ 159,341  $ 364,991 
Past due loans
18,401  7,257  25,658 
Total loans receivable
224,051  166,598  390,649 
Net unamortized loan premium
104  1,098  1,202 
Less: Allowance for loan losses
(32,896) (17,013) (49,909)
Loans receivable, net
$ 191,259  $ 150,683  $ 341,942 



21
Elevate Credit, Inc. and Subsidiaries
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — (Continued)
For the three and nine months ended September 30, 2020 and 2019

December 31, 2019
(Dollars in thousands) Rise Elastic(1) Total
Current loans
$ 307,406  $ 243,380  $ 550,786 
Past due loans
46,386  22,395  68,781 
Total loans receivable
353,792  265,775  619,567 
Net unamortized loan premium
290  2,128  2,418 
Less: Allowance for loan losses
(50,019) (29,893) (79,912)
Loans receivable, net
$ 304,063  $ 238,010  $ 542,073 
(1) Includes immaterial balances related to the Today Card.
Total loans receivable includes approximately $20.0 million and $6.1 million of loans in a non-accrual status at September 30, 2020 and December 31, 2019, respectively.
Additionally, total loans receivable includes approximately $24.1 million and $33.0 million of interest receivable at September 30, 2020 and December 31, 2019, respectively. The carrying value for Loans receivable, net of the allowance for loan losses approximates the fair value due to the short-term nature of the loans receivable.
The changes in the allowance for loan losses for the three and nine months ended September 30, 2020 and 2019 are as follows:
Three Months Ended September 30, 2020
(Dollars in thousands) Rise Elastic(1) Total
Balance beginning of period
$ 40,614  $ 19,980  $ 60,594 
Provision for loan losses
9,039  4,125  13,164 
Charge-offs
(18,059) (7,859) (25,918)
Recoveries of prior charge-offs
2,723  767  3,490 
Total
34,317  17,013  51,330 
Accrual for CSO lender owned loans
(1,421) —  (1,421)
Balance end of period
$ 32,896  $ 17,013  $ 49,909 
Three Months Ended September 30, 2019
(Dollars in thousands) Rise Elastic(1) Total
Balance beginning of period
$ 41,393  $ 26,479  $ 67,872 
Provision for loan losses
58,290  33,412  91,702 
Charge-offs
(54,148) (30,162) (84,310)
Recoveries of prior charge-offs
4,969  2,276  7,245 
Total
50,504  32,005  82,509 
Accrual for CSO lender owned loans
(1,972) —  (1,972)
Balance end of period
$ 48,532  $ 32,005  $ 80,537 
Nine Months Ended September 30, 2020
(Dollars in thousands) Rise Elastic(1) Total
Balance beginning of period
$ 52,099  $ 29,893  $ 81,992 
Provision for loan losses
90,615  42,601  133,216 
Charge-offs
(120,189) (60,528) (180,717)
Recoveries of prior charge-offs
11,792  5,047  16,839 
Total
34,317  17,013  51,330 
Accrual for CSO lender owned loans
(1,421) —  (1,421)
Balance end of period
$ 32,896  $ 17,013  $ 49,909 



22
Elevate Credit, Inc. and Subsidiaries
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — (Continued)
For the three and nine months ended September 30, 2020 and 2019

Nine Months Ended September 30, 2019
(Dollars in thousands) Rise Elastic(1) Total
Balance beginning of period
$ 50,597  $ 36,050  $ 86,647 
Provision for loan losses
147,097  88,242  235,339 
Charge-offs
(162,046) (100,173) (262,219)
Recoveries of prior charge-offs
14,856  7,886  22,742 
Total
50,504  32,005  82,509 
Accrual for CSO lender owned loans
(1,972) —  (1,972)
Balance end of period
$ 48,532  $ 32,005  $ 80,537 
(1) Includes immaterial balances related to the Today Card.

As of September 30, 2020 and December 31, 2019, estimated losses of approximately $1.4 million and $2.1 million for the CSO owned loans receivable guaranteed by the Company of approximately $10.1 million and $19.6 million, respectively, are initially recorded at fair value and are included in Accounts payable and accrued liabilities in the Condensed Consolidated Balance Sheets.

Troubled Debt Restructurings
In certain circumstances, the Company modifies the terms of its finance receivables for borrowers experiencing financial difficulties. Modifications may include principal and/or interest forgiveness. A modification of finance receivable terms is considered a TDR if the Company grants a concession to a borrower for economic or legal reasons related to the borrower’s financial difficulties that would not otherwise have been considered. Management considers TDRs to include all installment and line of credit loans that were granted principal and interest forgiveness as a part of a loss mitigation strategy for Rise and Elastic, unless excluded by policy. Once a loan has been classified as a TDR, it is assessed for impairment based on the present value of expected future cash flows discounted at the loan's original effective interest rate considering all available evidence.

The following table summarizes the financial effects, excluding impacts related to credit loss allowance and impairment, of TDRs for the three and nine months ended September 30, 2020 and 2019:
Three Months Ended September 30, Nine Months Ended September 30,
(Dollars in thousands) 2020 2019 2020 2019
Outstanding recorded investment before TDR
$ 467  $ 9,041  $ 7,619  $ 22,537 
Outstanding recorded investment after TDR
461  8,594  7,255  20,657 
Total principal and interest forgiveness included in charge-offs within the Allowance for loan losses
$ 6  $ 447  $ 364  $ 1,880 

A loan that has been classified as a TDR remains classified as a TDR until it is liquidated through payoff or charge-off. The table below presents the Company's average outstanding recorded investment and interest income recognized on TDR loans for the three and nine months ended September 30, 2020 and 2019:
Three Months Ended September 30, Nine Months Ended September 30,
(Dollars in thousands) 2020 2019 2020 2019
Average outstanding recorded investment(1) $ 10,382  $ 12,743  $ 13,330  $ 13,839 
Interest income recognized $ 1,503  $ 2,589  $ 7,755  $ 7,438 
1. Simple average as of September 30, 2020 and 2019, respectively.





23
Elevate Credit, Inc. and Subsidiaries
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — (Continued)
For the three and nine months ended September 30, 2020 and 2019

The table below presents the Company's loans modified as TDRs as of September 30, 2020 and December 31, 2019:
(Dollars in thousands) 2020 2019
Current outstanding investment
$ 8,209  $ 11,313 
Delinquent outstanding investment
1,589  5,549 
Outstanding recorded investment
9,798  16,862 
Less: Impairment included in Allowance for loan losses
(1,518) (4,414)
Outstanding recorded investment, net of impairment
$ 8,280  $ 12,448 

A TDR is considered to have defaulted upon charge-off when it is over 60 days past due or earlier if deemed uncollectible. There were loan restructurings accounted for as TDRs that subsequently defaulted of approximately $0.9 million and $3.6 million for the three months ended September 30, 2020 and 2019, respectively, and $10.1 million and $10.5 million for the nine months ended September 30, 2020 and 2019, respectively. The Company had commitments to lend additional funds of approximately $2.6 million to customers with available and unfunded lines of credit as of September 30, 2020.

NOTE 4—VARIABLE INTEREST ENTITIES

The Company is involved with six entities that are deemed to be a VIE: Elastic SPV, Ltd., EF SPV, Ltd., EC SPV, Ltd. and three Credit Services Organization ("CSO") lenders. Under ASC 810-10-15, Variable Interest Entities, a VIE is an entity that: (1) has an insufficient amount of equity investment at risk to permit the entity to finance its activities without additional subordinated financial support by other parties; (2) the equity investors are unable to make significant decisions about the entity’s activities through voting rights or similar rights; or (3) the equity investors do not have the obligation to absorb expected losses or the right to receive residual returns of the entity. The Company is required to consolidate a VIE if it is determined to be the primary beneficiary, that is, the enterprise has both (1) the power to direct the activities of a VIE that most significantly impact the entity’s economic performance and (2) the obligation to absorb losses of the entity that could potentially be significant to the VIE. The Company evaluates its relationships with VIEs to determine whether it is the primary beneficiary of a VIE at the time it becomes involved with the entity and it re-evaluates that conclusion each reporting period.
Elastic SPV, Ltd.
On July 1, 2015, the Company entered into several agreements with a third-party lender and Elastic SPV, Ltd. (“ESPV”), an entity formed by third-party investors for the purpose of purchasing loan participations from the third-party lender. Per the terms of the agreements, the Company provides customer acquisition services to generate loan applications submitted to the third-party lender. In addition, the Company licenses loan underwriting software and provides services to the third-party lender to evaluate the credit quality of those loan applications in accordance with the third-party lender’s credit policies. ESPV accounts for the loan participations acquired in accordance with ASC 860-10-40, Transfers and Services, Derecognition, as the lines of credit acquired meet the criteria of a participation interest.
Once the third-party lender originates the loan, ESPV has the right, but not the obligation, to purchase a 90% interest in each Elastic line of credit. Victory Park Management, LLC (“VPC”) entered into an agreement (the "ESPV Facility") under which it loans ESPV all funds necessary up to a maximum borrowing amount to purchase such participation interests in exchange for a fixed return (see Note 5—Notes Payable—ESPV Facility). The Company entered into a separate credit default protection agreement with ESPV whereby the Company agreed to provide credit protection to the investors in ESPV against Elastic loan losses in return for a credit premium. The Company does not hold a direct ownership interest in ESPV, however, as a result of the credit default protection agreement, ESPV was determined to be a VIE and the Company qualifies as the primary beneficiary.




24
Elevate Credit, Inc. and Subsidiaries
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — (Continued)
For the three and nine months ended September 30, 2020 and 2019

The following table summarizes the assets and liabilities of the VIE that are included within the Company’s Condensed Consolidated Balance Sheets at September 30, 2020 and December 31, 2019:
(Dollars in thousands) September 30,
2020 		December 31,
2019
ASSETS
Cash and cash equivalents $ 107,602  $ 26,245 
Loans receivable, net of allowance for loan losses of $15,415 and $28,852, respectively
143,102  234,504 
Prepaid expenses and other assets 52  — 
Receivable from payment processors 3,253  6,363 
Total assets $ 254,009  $ 267,112 
LIABILITIES AND SHAREHOLDER’S EQUITY
Accounts payable and accrued liabilities ($26,194 and $7,690, respectively, eliminates upon consolidation)
$ 30,912  $ 15,902 
Deferred revenue 2,251  4,280 
Reserve deposit liability ($23,150 and $23,150, respectively, eliminates upon consolidation)
23,150  23,150 
Notes payable, net 197,696  223,780 
Total liabilities and shareholder’s equity $ 254,009  $ 267,112 

EF SPV, Ltd.
On October 15, 2018, the Company entered into several agreements with a third-party lender and EF SPV, Ltd. (“EF SPV”), an entity formed by third-party investors for the purpose of purchasing loan participations from the third-party lender. Per the terms of the agreements, the Company provides customer acquisition services to generate loan applications submitted to the third-party lender. In addition, the Company licenses loan underwriting software and provides services to the third-party lender to evaluate the credit quality of those loan applications in accordance with the third-party lender’s credit policies. EF SPV accounts for the loan participations acquired in accordance with ASC 860-10-40, Transfers and Services, Derecognition, as the installment loans acquired meet the criteria of a participation interest.
Once the third-party lender originates the loan, EF SPV has the right, but not the obligation, to purchase an interest in each Rise bank originated installment loan. Prior to August 1, 2019, FinWise Bank retained 5% of the balances and sold a 95% participation to EF SPV. On August 1, 2019, EF SPV purchased an additional 1% participation in the outstanding portfolio with the participation percentage revised going forward to 96%. VPC lends EF SPV all funds necessary up to a maximum borrowing amount to purchase such participation interests in exchange for a fixed return (see Note 5—Notes Payable—EF SPV Facility). The Company entered into a separate credit default protection agreement with EF SPV whereby the Company agreed to provide credit protection to the investors in EF SPV against Rise bank originated loan losses in return for a credit premium. The Company does not hold a direct ownership interest in EF SPV, however, as a result of the credit default protection agreement, EF SPV was determined to be a VIE and the Company qualifies as the primary beneficiary.



25
Elevate Credit, Inc. and Subsidiaries
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — (Continued)
For the three and nine months ended September 30, 2020 and 2019

The following table summarizes the assets and liabilities of the VIE that are included within the Company’s Condensed Consolidated Balance Sheets at September 30, 2020 and December 31, 2019:
(Dollars in thousands) September 30,
2020 		December 31,
2019
ASSETS
Cash and cash equivalents $ 35,279  $ 7,541 
Loans receivable, net of allowance for loan losses of $15,491 and $17,436, respectively
78,298  111,281 
Receivable from payment processors ($207 and $0 eliminates upon consolidation)
647  681 
Total assets $ 114,224  $ 119,503 
LIABILITIES AND SHAREHOLDER’S EQUITY
Accounts payable and accrued liabilities ($10,716 and $7,114, respectively, eliminates upon consolidation)
$ 11,792  $ 8,576 
Reserve deposit liability ($8,950 and $8,950, respectively, eliminates upon consolidation)
8,950  8,950 
Notes payable, net 93,482  101,977 
Total liabilities and shareholder’s equity $ 114,224  $ 119,503 

EC SPV, Ltd.
In July 2020, the Company entered into several agreements with a third-party lender and EC SPV, Ltd. (“EC SPV”), an entity formed by third-party investors for the purpose of purchasing loan participations from the third-party lender. Per the terms of the agreements, the Company provides customer acquisition services to generate loan applications submitted to the third-party lender. In addition, the Company licenses loan underwriting software and provides services to the third-party lender to evaluate the credit quality of those loan applications in accordance with the third-party lender’s credit policies. EC SPV accounts for the loan participations acquired in accordance with ASC 860-10-40, Transfers and Services, Derecognition, as the installment loans acquired meet the criteria of a participation interest.
Once the third-party lender originates the loan, EC SPV has the right to purchase an interest in each Rise bank originated installment loan. The third-party lender retains 5% of the balances of all the loans originated and sells the remaining 95% participation to EC SPV. VPC will lend EC SPV all funds necessary up to a maximum borrowing amount to purchase such participation interests in exchange for a fixed return (see Note 5—Notes Payable—EC SPV Facility). The Company entered into a separate credit default protection agreement with EC SPV whereby the Company agreed to provide credit protection to the investors in EC SPV against Rise bank originated loan losses in return for a credit premium. The Company does not hold a direct ownership interest in EC SPV, however, as a result of the credit default protection agreement, EC SPV was determined to be a VIE and the Company qualifies as the primary beneficiary.




26
Elevate Credit, Inc. and Subsidiaries
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — (Continued)
For the three and nine months ended September 30, 2020 and 2019

The following table summarizes the assets and liabilities of the VIE that are included within the Company’s Condensed Consolidated Balance Sheets at September 30, 2020 and December 31, 2019:
(Dollars in thousands) September 30,
2020
ASSETS
Cash and cash equivalents $ 956 
Restricted cash 1,000 
Loans receivable, net of allowance for loan losses of $3
56 
Prepaid expenses and other assets ($36 eliminates upon consolidation)
36 
Receivable from payment processors 3 
Total assets $ 2,051 
LIABILITIES AND SHAREHOLDER’S EQUITY
Accounts payable and accrued liabilities ($15 eliminates upon consolidation)
$ 51 
Reserve deposit liability ($2,000 eliminates upon consolidation)
2,000 
Total liabilities and shareholder’s equity $ 2,051 
CSO Lenders
The three CSO lenders are considered VIE's of the Company; however, the Company does not have any ownership interest in the CSO lenders, does not exercise control over them, and is not the primary beneficiary, and therefore, does not consolidate the CSO lenders’ results with its results.

NOTE 5—NOTES PAYABLE, NET
The Company has four debt facilities with VPC. The Rise SPV, LLC credit facility (the "VPC Facility"), the EF SPV Facility, the ESPV Facility and effective July 31, 2020, the EC SPV Facility. The facilities had the following terms as of September 30, 2020.
VPC Facility
The VPC Facility is primarily used to fund the Rise loan portfolio with a subordinated debt component used for general corporate purposes. It provides the following term notes:
•A maximum borrowing amount of $200 million (amended as of July 31, 2020) used to fund the Rise loan portfolio (“US Term Note”). Prior to the February 1, 2019 amendment, the interest rate paid on this facility was a base rate (defined as the 3-month LIBOR, with a 1% floor) plus 11%. Upon the February 1, 2019 amendment date, the interest rate on the debt outstanding as of the amendment date was fixed through the January 1, 2024 maturity date at 10.23% (base rate of 2.73% plus 7.5%, which was reduced to 7.25% on January 1, 2020 as part of the amendment). At December 31, 2019, the weighted average base rate on the outstanding balance was 2.73% and the overall interest rate was 10.23%. At September 30, 2020, the weighted average base rate on the outstanding balance was 2.73% and the overall interest rate was 9.98%. All future borrowings under this facility will bear an interest rate at a base rate (defined as the greater of 3-month LIBOR, the five-year LIBOR swap rate or 1%) plus 7.25% at the borrowing date.
•A maximum borrowing amount of $18 million used to fund working capital, and prior to February 1, 2019, at a base rate (defined as the 3-month LIBOR, with a 1% floor) plus 13% (“4th Tranche Term Note”). Upon the February 1, 2019 amendment date, the interest rate was fixed through the February 1, 2021 maturity date at a base rate of 2.73% plus 13%. The interest rate at both September 30, 2020 and December 31, 2019 was 15.73%. There was no change in the interest rate spread on this facility upon the February 1, 2019 amendment.
•Revolving feature providing the option to pay down up to 20% of the outstanding balance, excluding the 4th Tranche Term Note, once per year during the first quarter. Amounts paid down may be drawn again at a later date prior to maturity.



27
Elevate Credit, Inc. and Subsidiaries
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — (Continued)
For the three and nine months ended September 30, 2020 and 2019

The 4th Tranche Term Note matures on February 1, 2021. The US Term Note matures on January 1, 2024. There are no principal payments due or scheduled until the respective maturity dates. All assets of the Company are pledged as collateral to secure the VPC Facility. The VPC Facility contains certain covenants for the Company such as minimum cash requirements and a minimum book value of equity requirement. There are also certain covenants for the product portfolio underlying the facility including, among other things, excess spread requirements, maximum roll rate and charge-off rate levels, and maximum loan-to-value ratios. The Company was in compliance with all covenants related to the VPC Facility as of September 30, 2020 and December 31, 2019.
Prior to ECIL entering administration and being classified a discontinued operation by the Company on June 29, 2020, the VPC Facility included a note used to fund the UK Sunny loan portfolio (“UK Term Note”). Upon deconsolidation of ECIL, this note was removed from the Company's Condensed Consolidated Balance Sheets and is presented within Liabilities from discontinued operations in all prior periods presented. Under the terms of the VPC Facility, Elevate Credit, Inc. (the "Parent") had provided a guarantee to VPC for the repayment of the debt of any subsidiary, which included the outstanding debt of ECIL. Upon deconsolidation of ECIL, the Company evaluated and recognized a $566 thousand liability at the Parent level related to the guarantee of ECIL's outstanding debt balance at June 30, 2020. The liability was recognized at the fair value of the guarantee obligation based on ECIL's cash flows and ability to repay the outstanding debt balance. ECIL completed repayment of the UK Term Note in the third quarter of 2020 and the liability has been released.

EC SPV Facility

VPC entered into a new debt facility with EC SPV on July 31, 2020. The EC SPV Facility has a maximum borrowing amount of $100 million used to purchase loan participations from a third-party lender. As of September 30, 2020, there were no draws upon this facility. All future borrowings under this facility will bear an interest rate at a base rate (defined as the greater of 3-month LIBOR, the five-year LIBOR swap rate or 1%) plus 7.25% at the borrowing date. The EC SPV Term Note has a revolving feature providing the option to pay down up to 20% of the outstanding balance once per year during the first quarter. Amounts paid down may be drawn again at a later date prior to maturity.

The EC SPV Term Note matures on January 1, 2024. There are no principal payments due or scheduled until the maturity date. All assets of the Company and EC SPV are pledged as collateral to secure the EC SPV Facility. The EC SPV Facility contains certain covenants for the Company such as minimum cash requirements and a minimum book value of equity requirement. There are also certain covenants for the product portfolio underlying the facility including, among other things, excess spread requirements, maximum roll rate and charge-off rate levels, and maximum loan-to-value ratios.

EF SPV Facility

The EF SPV Facility has a maximum borrowing amount of $250 million (amended as of July 31, 2020) used to purchase loan participations from a third-party lender. Prior to execution of the agreement with VPC effective February 1, 2019, EF SPV was a borrower on the US Term Note under the VPC Facility and the interest rate paid on this facility was a base rate (defined as 3-month LIBOR, with a 1% floor) plus 11%. Upon the February 1, 2019 amendment date, $43 million was re-allocated into the EF SPV Facility and the interest rate on the debt outstanding as of the amendment date was fixed through the January 1, 2024 maturity date at 10.23% (base rate of 2.73% plus 7.5%, which was reduced to 7.25% on January 1, 2020 as part of the amendment). The weighted average base rate on the outstanding balance at December 31, 2019 was 2.49% and the overall interest rate was 9.99%. The weighted average base rate on the outstanding balance at September 30, 2020 was 2.45% and the overall interest rate was 9.70%. All future borrowings under this facility will bear an interest rate at a base rate (defined as the greater of 3-month LIBOR, the five-year LIBOR swap rate or 1%) plus 7.25% at the borrowing date. The EF SPV Term Note has a revolving feature providing the option to pay down up to 20% of the outstanding balance once per year during the first quarter. Amounts paid down may be drawn again at a later date prior to maturity.

The EF SPV Term Note matures on January 1, 2024. There are no principal payments due or scheduled until the maturity date. All assets of the Company and EF SPV are pledged as collateral to secure the EF SPV Facility. The EF SPV Facility contains certain covenants for the Company such as minimum cash requirements and a minimum book value of equity requirement. There are also certain covenants for the product portfolio underlying the facility including, among other things, excess spread requirements, maximum roll rate and charge-off rate levels, and maximum loan-to-value ratios. The Company was in compliance with all covenants related to the EF SPV Facility as of September 30, 2020 and December 31, 2019.



28
Elevate Credit, Inc. and Subsidiaries
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — (Continued)
For the three and nine months ended September 30, 2020 and 2019


ESPV Facility

The ESPV Facility has a maximum borrowing amount of $350 million used to purchase loan participations from a third-party lender. Prior to the February 1, 2019 amendment, the interest rate paid on this facility was a base rate (defined as the greater of the 3-month LIBOR rate or 1% per annum) plus 13% for the outstanding balance up to $50 million, plus 12% for the outstanding balance greater than $50 million up to $100 million, plus 13.5% for any amounts greater than $100 million up to $150 million, and plus 12.75% for borrowing amounts greater than $150 million. Upon the February 1, 2019 amendment date, the interest rate on the debt outstanding as of the amendment date was fixed at 15.48% (base rate of 2.73% plus 12.75%). Effective July 1, 2019, the interest rate on the debt outstanding as of the amendment date was set at 10.23% (base rate of 2.73% plus 7.5%, which was reduced to 7.25% on January 1, 2020 as part of the amendment). At December 31, 2019 the weighted average base rate on the outstanding balance was 2.72% and the overall interest rate was 10.22%. At September 30, 2020, the weighted average base rate on the outstanding balance was 2.72% and the overall interest rate was 9.97%. All future borrowings under this facility will bear an interest rate at a base rate (defined as the greater of 3-month LIBOR, the five-year LIBOR swap rate or 1%) plus 7.25% at the borrowing date. The ESPV Term Note has a revolving feature providing the option to pay down up to 20% of the outstanding balance once per year during the first quarter. Amounts paid down may be drawn again at a later date prior to maturity.
There are no principal payments due or scheduled until the maturity date. All assets of the Company and ESPV are pledged as collateral to secure the ESPV Facility. The ESPV Facility contains certain covenants for the Company such as minimum cash requirements and a minimum book value of equity requirement. There are also certain covenants for the product portfolio underlying the facility including, among other things, excess spread requirements, maximum roll rate and charge-off rate levels, and maximum loan-to-value ratios. The Company was in compliance with all covenants related to the ESPV Facility as of September 30, 2020 and December 31, 2019.
VPC, EF SPV and ESPV Facilities:
The outstanding balances of Notes payable, net of debt issuance costs, are as follows:
(Dollars in thousands) September 30,
2020 		December 31,
2019
US Term Note bearing interest at the base rate + 7.25% (2020) or + 7.5% (2019)
$ 129,500  $ 182,000 
4th Tranche Term Note bearing interest at the base rate + 13%
18,050  18,050 
EF SPV Term Note bearing interest at the base rate + 7.25% (2020) or + 7.5% (2019)
93,500  102,000 
ESPV Term Note bearing interest at the base rate + 7.25% (2020) or + 7.5% (2019)
199,500  226,000 
Debt issuance costs
(2,350) (2,611)
Total
$ 438,200  $ 525,439 

The change in the facility balances includes the following:
•US Term Note - Paydowns of $27.5 million and $25 million in the first and second quarter of 2020, respectively;
•EF SPV Term note - Draw of $6.5 million in the first quarter of 2020 and a paydown of $15 million in the second quarter of 2020; and
•ESPV Term Note - Paydowns of $6.5 million and $20 million in the first and second quarter of 2020, respectively.

The Company paid a $2.4 million amendment fee on the ESPV Facility during the first quarter of 2019 that is included in deferred debt issuance costs and will be amortized into interest expense over the remaining life of the facility (through January 1, 2024).

Per the terms of the February 2019 amendments, the Company qualified for a 25 bps rate reduction on the VPC, EF SPV and ESPV facilities effective January 1, 2020. All four facilities may qualify for an additional 25 bps rate reduction on January 1, 2021 subject to meeting certain performance metrics. The Company has evaluated the interest rates for its debt and believes they represent market rates based on the Company’s size, industry, operations and recent amendments. As a result, the carrying value for the debt approximates the fair value.



29
Elevate Credit, Inc. and Subsidiaries
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — (Continued)
For the three and nine months ended September 30, 2020 and 2019

Future debt maturities as of September 30, 2020 are as follows:
Year (dollars in thousands) September 30, 2020
Remainder of 2020 $ — 
2021 18,050 
2022 — 
2023 — 
2024 422,500 
Thereafter — 
Total $ 440,550 


NOTE 6—GOODWILL AND INTANGIBLE ASSETS
The Company’s goodwill represents the excess purchase price over the estimated fair market value of the net assets acquired by the predecessor parent company, Think Finance, Inc. (“Think Finance”) related to the Elastic and previously consolidated UK reporting units. As a result of the recent global economic impact and uncertainty due to the COVID-19 pandemic, the Company concluded a triggering event had occurred as of March 31, 2020, and accordingly, performed interim impairment testing on the goodwill balances of its reporting units. The Company performed a detailed qualitative and quantitative assessment of each reporting unit and concluded that the goodwill associated with the previously consolidated UK reporting unit was impaired as the fair value of the UK reporting unit was less than its carrying amount. The impairment loss of $9.3 million is included in Loss from discontinued operations due to the deconsolidation of ECIL. While there was a decline in the fair value of the Elastic reporting unit, there was no impairment identified during the quantitative assessment. As of September 30, 2020, the Company performed another interim detailed qualitative and quantitative assessment of the Elastic reporting unit due to the continued negative economic impact of the COVID-19 pandemic. For the period from March 31, 2020 to September 30, 2020, the fair value of the Elastic reporting unit remained steady and there was no impairment identified. The Company has $6.8 million of goodwill (all related to the Elastic reporting unit) on the Condensed Consolidated Balance Sheets as of September 30, 2020 and December 31, 2019, respectively. Of the total goodwill balance, approximately $300 thousand is deductible for tax purposes.
As quoted market prices are not available for these reporting units, the Company used the income approach to estimate the fair value of its reporting units. In prior valuations, the Company weighted the results of the income method most heavily in the overall determination of fair value. The income approach estimates the fair value by discounting each unit’s estimated future cash flows using the Company’s estimate of the discount rate, or expected return, that a market participant would have required as of the valuation date. Some of the more significant assumptions inherent in the income approach include the estimated future net annual cash flows for each reporting unit and the discount rate. The Company selected the assumptions used in the discounted cash flow projections using historical data supplemented by current and anticipated market conditions. The Company’s estimates are based upon assumptions believed to be reasonable. However, given the inherent uncertainty in determining the assumptions underlying a discounted cash flow analysis, particularly in the current volatile market, actual results may differ from those used in these valuations which could result in additional impairment charges in the future. The discount rates in the interim assessments used to value the Company’s reporting units were between 16% and 19.0%. Assuming all other assumptions and inputs used in each of the respective discounted cash flow analysis were held constant, a 50-basis point increase or decrease in the discount rate assumptions would have changed the fair value of the two reporting units, on average, by less than 3%.




30
Elevate Credit, Inc. and Subsidiaries
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — (Continued)
For the three and nine months ended September 30, 2020 and 2019

The carrying value of acquired intangible assets as of September 30, 2020 is presented in the table below:
(Dollars in thousands) Cost Accumulated
Amortization 		Net
Assets subject to amortization:
Acquired technology
$ 211  $ (211) $ — 
Non-compete
2,461  (1,829) 632 
Customers
126  (126) — 
Assets not subject to amortization:
Domain names
531  —  531 
Total
$ 3,329  $ (2,166) $ 1,163 
The carrying value of acquired intangible assets as of December 31, 2019 is presented in the table below:
(Dollars in thousands) Cost Accumulated
Amortization 		Net
Assets subject to amortization:
Acquired technology
$ 211  $ (211) $ — 
Non-compete
2,461  (1,739) 722 
Customers
126  (126) — 
Assets not subject to amortization:
Domain names
531  —  531 
Total
$ 3,329  $ (2,076) $ 1,253 
Total amortization expense recognized for both the three months ended September 30, 2020 and 2019 was approximately $30 thousand respectively. Total amortization expense recognized for the nine months ended September 30, 2020 and 2019 was approximately $90 thousand and $280 thousand, respectively. The weighted average remaining amortization period for the intangible assets was 5.3 years at September 30, 2020. Due to the deconsolidation of the UK entity, the related domain name was determined to be fully impaired and the resulting impairment expense of $149 thousand is included in Net loss from discontinued operations in the Condensed Consolidated Income Statements.
Estimated amortization expense relating to intangible assets subject to amortization for each of the five succeeding fiscal years is as follows:
Year (dollars in thousands) Amount
2021 $ 120 
2022 120 
2023 120 
2024 120 
2025 120 

NOTE 7—LEASES
The Company has non-cancelable operating leases for facility space and equipment with varying terms. All of the leases for facility space qualified for capitalization under FASB ASC 842, Leases. These leases have remaining lease terms of three years to six years, and some may include options to extend the leases for up to ten years. The extension terms are not recognized as part of the right-of-use assets. The Company has elected not to capitalize leases with terms equal to or less than one year. As of September 30, 2020 and December 31, 2019, net assets recorded under operating leases totaled $8.8 million and $10.2 million, respectively, and net lease liabilities totaled $12.6 million and $14.4 million, respectively.



31
Elevate Credit, Inc. and Subsidiaries
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — (Continued)
For the three and nine months ended September 30, 2020 and 2019

The Company analyzes contracts above certain thresholds to identify leases and lease components. Lease and non-lease components are not separated for facility space leases. The Company uses its contractual borrowing rate to determine lease discount rates when an implicit rate is not available.
Total lease cost for the three and nine months ended September 30, 2020, included in Occupancy and equipment in the Condensed Consolidated Income Statements, is detailed in the table below:
Three Months Ended September 30,
Lease cost (dollars in thousands) 2020 2019
Operating lease cost
$ 808  $ 808 
Short-term lease cost —  5 
Total lease cost $ 808  $ 813 
Nine Months Ended September 30,
Lease cost (dollars in thousands) 2020 2019
Operating lease cost
$ 2,423  $ 2,331 
Short-term lease cost —  22 
Total lease cost $ 2,423  $ 2,353 
Further information related to leases is as follows:
Three Months Ended September 30,
Supplemental cash flows information (dollars in thousands) 2020 2019
Cash paid for amounts included in the measurement of lease liabilities
$ 946  $ 840 
Right-of-use assets obtained in exchange for lease obligations
$ —  $ — 
Weighted average remaining lease term
3.8 years 4.7 years
Weighted average discount rate
10.23  % 10.23  %
Nine Months Ended September 30,
Supplemental cash flows information (dollars in thousands) 2020 2019
Cash paid for amounts included in the measurement of lease liabilities
$ 2,801  $ 2,218 
Right-of-use assets obtained in exchange for lease obligations
$ —  $ 1,110 
Weighted average remaining lease term
3.8 years 4.7 years
Weighted average discount rate
10.23  % 10.23  %
Future minimum lease payments as of September 30, 2020 are as follows:
Year (dollars in thousands) Operating Leases
2020 $ 958 
2021 3,876 
2022 3,984 
2023 3,486 
2024 1,438 
Thereafter
1,893 
Total future minimum lease payments
$ 15,635 
Less: Imputed interest
(3,042)
Operating lease liabilities
$ 12,593 




32
Elevate Credit, Inc. and Subsidiaries
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — (Continued)
For the three and nine months ended September 30, 2020 and 2019

NOTE 8—SHARE-BASED COMPENSATION
Share-based compensation expense recognized for the three months ended September 30, 2020 and 2019 totaled approximately $1.2 million and $2.4 million, respectively. Share-based compensation expense recognized for the nine months ended September 30, 2020 and 2019 totaled approximately $6.5 million and $7.3 million, respectively.
2016 Omnibus Incentive Plan
The 2016 Omnibus Incentive Plan ("2016 Plan") was adopted by the Company’s Board of Directors on January 5, 2016 and approved by the Company’s stockholders thereafter. The 2016 Plan became effective on June 23, 2016. The 2016 Plan provides for the grant of incentive stock options to the Company’s employees, and for the grant of non-qualified stock options, stock appreciation rights, restricted stock, RSUs, dividend equivalent rights, cash-based awards (including annual cash incentives and long-term cash incentives), and any combination thereof to the Company’s employees, directors and consultants. In connection with the 2016 Plan, the Company has reserved but not issued 7,871,519 shares of common stock, which includes shares that would otherwise return to the 2014 Equity Incentive Plan (the "2014 Plan") as a result of forfeiture, termination, or expiration of awards previously granted under the 2014 Plan and outstanding when the 2016 Plan became effective.
The 2016 Plan will automatically terminate 10 years following the date it became effective, unless the Company terminates it sooner. In addition, the Company’s Board of Directors has the authority to amend, suspend or terminate the 2016 Plan provided such action does not impair the rights under any outstanding award.
As of September 30, 2020, the total number of shares available for future grants under the 2016 Plan was 2,712,661 shares.
The Company has in the past and may in the future make grants of share-based compensation as inducement awards to new employees who are outside the 2016 Plan. The Company's board may rely on the employment inducement exception under NYSE Rule 303A.08 in order to approve the grants.
2014 Equity Incentive Plan
The Company adopted the 2014 Plan on May 1, 2014. The 2014 Plan permitted the grant of incentive stock options, nonstatutory stock options, and restricted stock. On April 27, 2017, the Company's Board of Directors terminated the 2014 Plan as to future awards and confirmed that underlying shares corresponding to awards under the 2014 Plan that were outstanding at the time the 2016 Plan became effective, that are forfeited, terminated or expired, will become available for issuance under the 2016 Plan.
For the nine months ended September 30, 2020, the Company had the following activity related to outstanding share-based awards:
Stock Options
Stock options are awarded to encourage ownership of the Company's common stock by employees and to provide increased incentive for employees to render services and to exert maximum effort for the success of the Company. The Company's stock options generally permit net-share settlement upon exercise. The option exercise price, vesting schedule and exercise period are determined for each grant by the administrator of the applicable plan. The Company's stock options generally have a 10-year contractual term and vest over a 4-year period.



33
Elevate Credit, Inc. and Subsidiaries
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — (Continued)
For the three and nine months ended September 30, 2020 and 2019

A summary of stock option activity as of and for the nine months ended September 30, 2020 is presented below:
Stock Options
Shares
Weighted Average
Exercise Price 		Weighted Average Remaining Contractual Life (in years)
Outstanding at December 31, 2019
2,269,178  $ 4.58 
Granted
55,161  3.39 
Exercised
(87,500) 2.13 
Expired
(25,000) 2.13 
Forfeited
(145,142) 3.88 
Outstanding at September 30, 2020
2,066,697  4.73  3.10
Options exercisable at September 30, 2020
2,066,697  $ 4.73  3.10
At September 30, 2020, there were no unrecognized compensation costs related to unvested stock options to be recognized. The total intrinsic value of options exercised for the nine months ended September 30, 2020 was $216 thousand.
Restricted Stock Units
RSUs are awarded to serve as a key retention tool for the Company to retain its executives and key employees. RSUs will transfer value to the holder even if the Company’s stock price falls below the price on the date of grant, provided that the recipient provides the requisite service during the period required for the award to “vest.”
The weighted-average grant-date fair value for RSUs granted under the 2016 Plan during the nine months ended September 30, 2020 was $1.64. These RSUs primarily vest 25% on the first anniversary of the effective date, and 25% each year thereafter, until full vesting on the fourth anniversary of the effective date.
A summary of RSU activity as of and for the nine months ended September 30, 2020 is presented below:
RSUs
Shares
Weighted Average
Grant-Date Fair Value
Unvested at December 31, 2019 4,161,862  $ 6.10 
Granted 1,246,948  1.64 
Vested
(1,477,869) 6.52 
Forfeited (838,783) 5.73 
Unvested at September 30, 2020
3,092,158  4.20 
Expected to vest at September 30, 2020
2,405,932  $ 4.32 
At September 30, 2020, there was approximately $8.1 million of unrecognized compensation cost related to unvested RSUs which is expected to be recognized over a weighted average period of 2.2 years. During the nine months ended September 30, 2020, the total intrinsic value of RSUs that vested during the period was approximately $3.4 million. As of September 30, 2020, the aggregate intrinsic value of the vested and expected to vest RSUs was approximately $6.2 million.
Employee Stock Purchase Plan
The Company offers an Employee Stock Purchase Plan ("ESPP") to eligible US employees. There are currently 1,816,716 shares authorized and 952,598 reserved for the ESPP. There were 280,584 shares purchased under the ESPP for the nine months ended September 30, 2020. Within share-based compensation expense for the nine months ended September 30, 2020 and 2019, $460 thousand and $531 thousand, respectively, relates to the ESPP. For the three months ended September 30, 2020 and 2019, $177 thousand and $145 thousand, respectively, relates to the ESPP within share-based compensation expense.



34
Elevate Credit, Inc. and Subsidiaries
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — (Continued)
For the three and nine months ended September 30, 2020 and 2019

NOTE 9—FAIR VALUE MEASUREMENTS
The accounting guidance on fair value measurements establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements).

The Company groups its assets and liabilities measured at fair value in three levels of the fair value hierarchy, based on the fair value measurement technique, as described below:
Level 1—Valuation is based upon quoted prices (unadjusted) for identical assets and liabilities in active exchange markets that the Company has the ability to access at the measurement date.
Level 2—Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques with significant assumptions and inputs that are observable in the market or can be derived principally from or corroborated by observable market data.
Level 3—Valuation is derived from model-based techniques that use inputs and significant assumptions that are supported by little or no observable market data. These unobservable assumptions reflect estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include the use of pricing models, discounted cash flow models and similar techniques.

The Company monitors the market conditions and evaluates the fair value hierarchy levels at least quarterly. For any transfers in and out of the levels of the fair value hierarchy, the Company discloses the fair value measurement at the beginning of the reporting period during which the transfer occurred. For the nine month periods ended September 30, 2020 and 2019, there were no significant transfers between levels.

The level of fair value hierarchy within which a fair value measurement in its entirety falls is based on the lowest-level input that is most significant to the fair value measurement in its entirety. In the determination of the classification of assets and liabilities in Level 2 or Level 3 of the fair value hierarchy, the Company considers all available information, including observable market data, indications of market conditions, and its understanding of the valuation techniques and significant inputs used. Based upon the specific facts and circumstances, judgments are made regarding the significance of the Level 3 inputs to the fair value measurements of the respective assets and liabilities in their entirety. If the valuation techniques that are most significant to the fair value measurements are principally derived from assumptions and inputs that are corroborated by little or no observable market data, the asset or liability is classified as Level 3.
Financial Assets and Liabilities Not Measured at Fair Value
The Company has evaluated Loans receivable, net of allowance for loan losses, Receivable from CSO lenders, Receivable from payment processors and Accounts payable and accrued expenses, and believes the carrying value approximates the fair value due to the short-term nature of these balances. The Company has also evaluated the interest rates for Notes payable, net and believes they represent market rates based on the Company’s size, industry, operations and recent amendments. As a result, the carrying value for Notes payable, net approximates the fair value. The Company classifies its fair value measurement techniques for the fair value disclosures associated with Loans receivable, net of allowance for loan losses, Receivable from CSO lenders, Receivable from payment processors, Accounts payable and accrued liabilities and Notes payable, net as Level 3 in accordance with ASC 820-10, Fair Value Measurements and Disclosures (“ASC 820-10”).




35
Elevate Credit, Inc. and Subsidiaries
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — (Continued)
For the three and nine months ended September 30, 2020 and 2019

Fair Value Measurements on a Recurring Basis

On January 11, 2018, the Company and ESPV each entered into one interest rate cap transaction with a counterparty to mitigate the floating rate interest risk on a portion of the debt under the VPC Facility and the ESPV Facility, respectively. On January 16, 2018, the Company and ESPV paid fixed premiums of $719 thousand and $648 thousand for the interest rate caps on the US Term Note (under the VPC Facility) and the ESPV Facility, respectively. The interest rate caps matured on February 1, 2019. The interest rate caps qualified for hedge accounting as cash flow hedges. Gains and losses on the interest rate caps were recognized in Accumulated other comprehensive income in the period incurred and subsequently reclassified to Interest expense when the hedged expenses were recorded. There were no gains or losses recognized in Accumulated other comprehensive income for the nine months ended September 30, 2020 and 2019.

The Company used model-derived valuations that discounted the future expected cash receipts that would occur if variable interest rates rose above the strike price of the caps. The variable interest rates used in the calculation of projected receipts on the caps were based on an expectation of future interest rates derived from observable market interest rate curves and volatilities in active markets (Level 2). The following table summarizes these interest rate caps for the nine months ended September 30, 2020 and 2019 (dollars in thousands):
        
Three Months Ended September 30, Nine Months Ended September 30,
Gains recognized in Interest expense 2020 2019 2020 2019
US Term Note interest rate cap $ —  $ —  $ —  $ 159 
ESPV Facility interest rate cap —  —  —  144 
$ —  $ —  $ —  $ 303 

On June 29, 2020, ECIL entered administration and was therefore deconsolidated by the Company and its results presented as discontinued operations. The Company had guaranteed ECIL's repayment of its outstanding debt to VPC. See Note 5—Notes Payable for more information regarding the guarantee of the UK Term Note. The fair value of the guarantee obligation was $566 thousand and was recognized at June 30, 2020 within Net loss from discontinued operations in the Condensed Consolidated Income Statements and as Liabilities from discontinued operations on the Condensed Consolidated Balance Sheets.

The fair value of the guarantee obligation was determined by using estimated cash flow scenarios that discounted ECIL's debt repayment schedules by the current interest rate on the UK Term Note which approximated a market value rate. The Company probability-weighted each scenario to calculate the weighted average fair value of the guarantee obligation. ECIL repaid its debt in full as of September 30, 2020 and the guarantee obligation was released.

NOTE 10—DERIVATIVES
The Company and ESPV have periodically used hedging programs to manage interest rate risk associated with future interest payments. The Company and ESPV entered into two interest rate cap instruments on January 11, 2018, which matured on February 1, 2019. The Company had no outstanding derivative instruments as of September 30, 2020 and 2019 and December 31, 2019.
Cash Flow Hedges
The Company and ESPV utilized interest rate caps to offset interest rate fluctuations in the Company's and ESPV's future interest payments on certain of their Notes payable. The financial instruments were designated and accounted for as cash flow hedges, and the Company and ESPV measured the effectiveness of the hedges at least quarterly. Effective gains or losses related to these cash flow hedges were reported in Accumulated other comprehensive income and reclassified into earnings, through interest expense, in the period or periods in which the hedged transactions affected earnings. See Note 9—Fair Value for additional information on these cash flow hedges.



36
Elevate Credit, Inc. and Subsidiaries
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — (Continued)
For the three and nine months ended September 30, 2020 and 2019

The following table summarizes the activity that was recorded in Accumulated other comprehensive income in addition to reclassifications from Accumulated other comprehensive income into earnings related to each of the Company's and ESPV's interest rate caps during the nine months ended September 30, 2020 and 2019. There was no activity during the three months ended September 30, 2020 and 2019.
Nine Months Ended September 30, 2020 Nine Months Ended September 30, 2019
(Dollars in thousands) US Term Note ESPV Facility US Term Note ESPV Facility
Beginning unrealized gains in Accumulated other comprehensive income $ —  $ —  $ 159  $ 144 
Gross gains recognized in Accumulated other comprehensive income —  —  —  — 
Gains reclassified to income through Interest expense —  —  (159) (144)
Ending unrealized gains in Accumulated other comprehensive income $ —  $ —  $ —  $ — 

NOTE 11—INCOME TAXES
Income tax expense for the three and nine months ended September 30, 2020 and 2019 consists of the following:
Three Months Ended September 30, Nine Months Ended September 30,
(Dollars in thousands) 2020 2019 2020 2019
Current income tax expense (benefit):
Federal
$ —  $ —  $ —  $ — 
State
803  44  1,133  576 
Total current income tax expense (benefit)
803  44  1,133  576 
Deferred income tax expense:
Federal
6,301  1,152  12,658  7,599 
State
(2,221) 149  1,520  1,819 
Total deferred income tax expense
4,080  1,301  14,178  9,418 
Total income tax expense
$ 4,883  $ 1,345  $ 15,311  $ 9,994 

No material penalties or interest related to taxes were recognized for the three and nine months ended September 30, 2020 and 2019.
The Company’s effective tax rates for continuing operations for the nine months ended September 30, 2020 and 2019, including discrete items, were 27.4% and 31.3%, respectively. For the nine months ended September 30, 2020 and 2019, the Company’s effective tax rate differed from the standard corporate federal income tax rate of 21% due to permanent non-deductible items, corporate state tax obligations in the states where it has lending activities and the impact of the Global Intangible Low-Taxed Income ("GILTI") provision of the Tax Cuts and Jobs Act of 2017. The Company's cash effective tax rate was approximately 2.08%.
On March 27, 2020 the CARES Act was signed into law.  The Company has reviewed the tax relief provisions of the CARES Act, including the Company's eligibility for such provisions, and determined that the impact is likely to be insignificant with regard to the Company's effective tax rate. The Company is continuing to monitor and evaluate its eligibility of the CARES Act tax relief provisions to identify any portions that may become applicable in the future.



37
Elevate Credit, Inc. and Subsidiaries
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — (Continued)
For the three and nine months ended September 30, 2020 and 2019

The Company's tax provision for interim periods is determined using an estimate of its annual effective tax rate, adjusted for discrete items arising in that quarter. In each quarter, the Company updates its estimate of the annual effective tax rate, and if the estimated annual effective tax rate changes, the Company would make a cumulative adjustment in that quarter.
For purposes of evaluating the need for a deferred tax valuation allowance, significant weight is given to evidence that can be objectively verified. The following provides an overview of the assessment that was performed for the deferred tax assets, net.

Deferred tax assets, net
At September 30, 2020 and December 31, 2019, the Company did not establish a valuation allowance for its deferred tax assets (“DTA”) based on management’s expectation of generating sufficient taxable income in a look forward period over the next one to four years. The Federal net operating loss ("NOL") carryforward from operations at December 31, 2019 was approximately $47.0 million. The results from operations in 2019 utilized 89% of this NOL carryforward. Any research and development credits recognized as a deferred tax asset expire beginning in 2036. The ultimate realization of the resulting deferred tax asset is dependent upon generating sufficient taxable income prior to the expiration of this carryforward. The Company considered the following factors when making its assessment regarding the ultimate realizability of the deferred tax assets.
Significant positive factors included the following:
•In 2019, the Company continued to grow its operating income from continuing operations (from $61 million in 2017 to $88 million in 2018 to $102 million in 2019). Pre-tax earnings improved from pre-tax income of $14.1 million in 2018 to pre-tax income of $38.4 million in 2019, a 172% improvement from prior year. The primary driver for the increase in operating income was related to the Company's continued margin expansion and lower interest expense.
•The Company is in a three-year cumulative pre-tax income position at the end of 2019. Additionally, the Company utilized 89% of its NOL carryforward in the 2019 federal return.
•Due to the short-term nature of the loan portfolio and the other material items that comprise the deferred tax assets, net, the Company estimates that the majority of these deferred tax items will reverse within one year and the remainder to reverse within three to seven years.
The Company has given due consideration to all the factors and has concluded that the deferred tax asset, which includes the $27 million deferred tax asset related to the disposition of ECIL, is expected to be realized based on management’s expectation of generating sufficient taxable income and the reversal of tax timing differences in a look-forward period over the next one to four years. Although realization is not assured, management believes it is more likely than not that all of the recorded deferred tax assets will be realized. The amount of the deferred tax assets considered realizable, however, could be adjusted in the future if estimates of future taxable income change. As a result, as of September 30, 2020 and December 31, 2019, the Company did not establish a valuation allowance for the DTA.

NOTE 12—COMMITMENTS, CONTINGENCIES AND GUARANTEES
Contingencies
Currently and from time to time, the Company may become a defendant in various legal and regulatory actions that arise in the ordinary course of business. The Company generally cannot predict the eventual outcome, the timing of the resolution or the potential losses, fines or penalties of such legal and regulatory actions. Actual outcomes or losses may differ materially from the Company's current assessments and estimates, which could have a material adverse effect on the Company's business, prospects, results of operations, financial condition or cash flows.
In accordance with applicable accounting guidance, the Company establishes an accrued liability for litigation, regulatory matters and other legal proceedings when those matters present material loss contingencies that are both probable and reasonably estimable. Even when an accrual is recorded, the Company may be exposed to loss in excess of any amounts accrued.




38
Elevate Credit, Inc. and Subsidiaries
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — (Continued)
For the three and nine months ended September 30, 2020 and 2019

Other Matters:
In December 2019, the Think Finance, Inc. ("TFI") bankruptcy plan was confirmed, and any potential future claims from the TFI Creditors' Committee were assigned to the Think Finance Litigation Trust (“TFLT”). On August 14, 2020, the TFLT filed an adversary proceeding against Elevate Credit, Inc. in the United States Bankruptcy Court for the Northern District of Texas, alleging certain avoidance claims related to Elevate's spin-off from TFI under the Bankruptcy Code and the Texas Uniform Fraudulent Transfer Act ("TUFTA"). If it were determined that the spin-off constituted a fraudulent conveyance or that there were other avoidance actions associated with the spin-off, then the spin-off could be deemed void and there could be a number of different remedies imposed against Elevate, including without limitation, the requirement that Elevate has to pay money damages in an amount equal to the difference between the consideration received by TFI in the spin-off and the fair market value of Elevate's net assets at the time of the spin-off. While the TFLT values this claim at $246 million, the Company believes that it has valid defenses to the claim and intends to vigorously defend itself against this claim. For these reasons, Elevate has not recognized a contingent loss reserve as of September 30, 2020 as the Company does not think that it is probable that it will incur a loss based on the nature of these claims.
Additionally, a class action lawsuit against Elevate was filed on August 17, 2020 in the Eastern District of Virginia alleging violations of usurious interest and aiding and abetting various racketeering activities related to the operations of TFI prior to and immediately after the 2014 spin-off. Elevate views this lawsuit as without merit and intends to vigorously defend its position.
On June 5, 2020, the District of Columbia (the "District") sued Elevate in the Superior Court of the District of Columbia alleging that Elevate may have violated the District's Consumer Protection Procedures Act and the District of Columbia's Municipal Regulations in connection with loans issued by banks in the District of Columbia.  This action has been removed to federal court, but the District has filed a motion to remand to the Superior Court on August 3, 2020. Elevate disagrees that it has violated the above referenced laws and regulations and it intends to vigorously defend its position.
In addition, on January 27, 2020, an Elevate wholly-owned subsidiary and other non-affiliated service providers to banks were sued in a class action lawsuit in Washington state.  The Plaintiff in the case claims that Elevate and the other non-affiliated service providers to banks have violated Washington’s Consumer Protection Act by engaging in unfair or deceptive practices. The lawsuit was removed to federal court and on May 11, 2020, Elevate filed a motion to dismiss and awaits a ruling on that motion. Elevate disagrees that it has violated the above referenced law and it intends to vigorously defend its position.
In California, two separate actions have been filed seeking damages and public injunctive relief and alleging unconscionable interest rates on Rise loans - one lawsuit in the Superior Court of California, and one demand for arbitration. The Plaintiffs in these actions assert claims under the “unlawful,” “unfair,” and “fraudulent” prongs of the California Unfair Competition Law (“UCL”) and for breach of contract and civil conspiracy. The “unlawful” UCL claims are premised upon alleged violations of (a) the California Financing Law’s prohibition on unconscionable loans and (b) the California False Advertising Law. The arbitration claimant further alleges violations of the Electronic Fund Transfer Act and the Rosenthal Fair Debt Collection Practices Act. Plaintiff dismissed the state court actions. Elevate disagrees that it has violated the above referenced laws and it intends to vigorously defend its position.
Commitments
The Elastic product, which offers lines of credit to consumers, had approximately $287.7 million and $251.2 million in available and unfunded credit lines at September 30, 2020 and December 31, 2019, respectively. In May 2017, the Rise product began offering lines of credit to consumers in certain states and had approximately zero and $8.3 million in available and unfunded credit lines at September 30, 2020 and December 31, 2019, respectively. The Today Card product had approximately $3.6 million and $0.6 million in available and unfunded credit lines as of September 30, 2020 and December 31, 2019, respectively. While these amounts represented the total available unused credit lines, the Company has not experienced and does not anticipate that all line of credit customers will access their entire available credit lines at any given point in time. The Company has not recorded a loan loss reserve for unfunded credit lines as the Company has the ability to cancel commitments within a relatively short timeframe.




39
Elevate Credit, Inc. and Subsidiaries
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — (Continued)
For the three and nine months ended September 30, 2020 and 2019

Effective June 2017, the Company entered into a seven-year lease agreement for office space in California. Upon the commencement of the lease, the Company was required to provide the lessor with an irrevocable and unconditional $500 thousand letter of credit. Provided the Company is not in default of any terms of the lease agreement, the outstanding required balance of the letter of credit will be reduced by $100 thousand per year beginning on the second anniversary of the lease commencement and ending on the fifth anniversary of the lease agreement. The minimum balance of the letter of credit will be at least $100 thousand throughout the duration of the lease. At September 30, 2020 and December 31, 2019, the Company had $300 thousand and $400 thousand, respectively, of cash balances securing the letter of credit which is included in Restricted cash within the Condensed Consolidated Balance Sheets.
Guarantees
CSO Program:
In connection with its CSO programs, the Company guarantees consumer loan payment obligations to CSO lenders and is required to purchase any defaulted loans it has guaranteed. The guarantee represents an obligation to purchase specific loans that go into default.
UK Debt Guarantee:
As a result of ECIL’s entry into administration and deconsolidation, the Company had recognized a guarantee obligation related to the repayment of the UK Term Note by ECIL. The fair value of the guarantee obligation was $566 thousand and was recognized at June 30, 2020 within Net loss from discontinued operations in the Condensed Consolidated Income Statements and as Liabilities from discontinued operations on the Condensed Consolidated Balance Sheets. See Note 5—Notes Payable for more information regarding the guarantee of the UK Term Note. ECIL has fully repaid the UK Term Note and the guarantee obligation has been released as of September 30, 2020.
Indemnifications and contingent loss accrual
In the ordinary course of business, the Company may indemnify customers, vendors, lessors, investors, and other parties for certain matters subject to various terms and scopes. For example, the Company may indemnify certain parties for losses due to the Company's breach of certain agreements or due to certain services it provides. As the Company has previously disclosed, the Company has also entered into separate indemnification agreements with the Company’s directors and executive officers, in addition to the indemnification provided for in the Company’s amended and restated bylaws. These agreements, among other things, provide that the Company will indemnify its directors and executive officers for certain expenses, including attorneys’ fees, judgments, penalties, fines and settlement amounts incurred by a director or executive officer in any action or proceeding arising out of their services as one of the Company’s or, where applicable, TFI’s directors or executive officers, or any of the Company’s subsidiaries or any other company or enterprise to which the person provides services at the Company’s request. The indemnification agreements also set forth certain procedures that will apply in the event of a claim for indemnification thereunder.
At September 30, 2020, the Company had accrued a contingent loss related to a legal matter in the amount of $6.7 million. The accrual is recognized as Non-operating loss in the Condensed Consolidated Income Statements and as Accounts payable and accrued liabilities on the Condensed Consolidated Balance Sheets. This contingent loss is based on a probable settlement composed of both cash and certain amounts that are subject to valuation adjustments until the final settlement. The table below presents a rollforward of the amounts accrued for the three and nine months ended September 30, 2020.
(Dollars in thousands) Nine Months Ended September 30, 2020
Beginning balance at December 31, 2019
$ — 
Expected loss accrual
4,263 
Net contingent loss related to a legal matter at March 31, 2020
$ 4,263 
Expected loss accrual
1,407 
Net contingent loss related to a legal matter at June 30, 2020 $ 5,670 
Expected loss accrual
1,007 
Net contingent loss related to a legal matter at September 30, 2020 $ 6,677 



40
Elevate Credit, Inc. and Subsidiaries
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — (Continued)
For the three and nine months ended September 30, 2020 and 2019


NOTE 13—DISCONTINUED OPERATIONS
On June 29, 2020, ECIL entered into administration in accordance with the provisions of the UK Insolvency Act 1986 and pursuant to a resolution of the board of directors of ECIL. The management, business, affairs and property of ECIL have been placed into the direct control of the appointed administrators, KPMG LLP. Accordingly, the Company deconsolidated ECIL as of June 29, 2020 and presents ECIL's results as Discontinued operations for all periods presented.
The table below presents the financial results of ECIL, which are considered Discontinued operations and are excluded from the Company's results of continuing operations:
Three Months Ended September 30, Nine Months Ended September 30,
(Dollars in thousands) 2020 2019
2020 (1)
2019
Revenues
$ —  $ 28,482  $ 24,012  $ 85,306 
Cost of sales:
      Provision for loan losses
—  9,345  4,785  31,164 
      Direct marketing costs
—  2,894  1,372  11,971 
      Other cost of sales
—  5,012  10,790  13,848 
Total cost of sales
—  17,251  16,947  56,983 
Gross profit
—  11,231  7,065  28,323 
Operating expenses:
Compensation and benefits
—  3,664  4,785  10,873 
Professional services
—  1,163  2,879  3,858 
Selling and marketing
—  677  605  2,176 
Occupancy and equipment
—  1,167  2,141  3,563 
Depreciation and amortization
—  337  1,427  1,116 
Other
—  207  288  602 
Total operating expenses
—  7,215  12,125  22,188 
Operating (loss) income
—  4,016  (5,060) 6,135 
Other expense:
Net interest expense
—  (1,031) (896) (3,261)
Foreign currency transaction loss
—  (870) (854) (967)
Impairment loss
—  —  (9,251) — 
Total other expense
—  (1,901) (11,001) (4,228)
Gain (loss) from operations of discontinued operations
—  2,115  (16,061) 1,907 
Gain (loss) on disposal of discontinued operations
529  —  (27,983) — 
Gain (loss) from discontinued operations before taxes
529  2,115  (44,044) 1,907 
Income tax benefit
3,936  1  28,136  1 
Net income (loss) from discontinued operations
$ 4,465  $ 2,116  $ (15,908) $ 1,908 
(1) Includes ECIL financial results for the period through June 28, 2020.




41
Elevate Credit, Inc. and Subsidiaries
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — (Continued)
For the three and nine months ended September 30, 2020 and 2019

The table below presents the aggregate carrying amounts of the assets and liabilities of ECIL and those carried by the Company as discontinued operations related to ECIL:
(Dollars in thousands except share amounts) September 30,
2020 		December 31,
2019
(unaudited)
ASSETS
Cash and cash equivalents
$ —  $ 17,698 
Restricted cash
—  59 
Loans receivable, net of allowance for loan losses of $0 and $7,083, respectively
—  31,604 
Prepaid expenses and other assets
—  4,871 
Receivable from payment processors
—  1,970 
Deferred tax assets, net
—  1,355 
Property and equipment, net
—  14,045 
Goodwill, net
—  9,251 
Intangible assets, net
—  149 
Total assets classified as discontinued operations in the Condensed Consolidated Balance Sheets
$ —  $ 81,002 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable and accrued liabilities
$ —  $ 6,917 
Notes payable, net
—  29,624 
Total liabilities classified as discontinued operations in the Condensed Consolidated Balance Sheets
$ —  $ 36,541 

The Company had continuing involvement with ECIL as the guarantor of ECIL's debt of approximately £10.2 million as of June 29, 2020 and a guarantee obligation of $566 thousand was recognized at fair value within Liabilities from discontinued operations on the Condensed Consolidated Balance Sheets and within Net loss from discontinued operations on the Condensed Consolidated Income Statements. This guarantee expired upon ECIL's repayment of the UK Term Note and the guarantee obligation of $566 thousand was reversed and a benefit was recognized within Net income (loss) from discontinued operations on the Condensed Consolidated Income Statement for the three- and nine-month period ended September 30, 2020. See Note 5—Notes Payable for more information regarding the guarantee of the UK Term Note.

The Company also had obligations related to severance pay due to certain employees of ECIL which has been settled and paid in July 2020.

In connection with the disposition of ECIL, the Company recognized a loss on its investment. This loss resulted in an estimated US federal and state income tax benefit of $24.2 million and was recognized in the three- and six-month period ended June 30, 2020. During the three months ended September 30, 2020, the Company revised the estimated tax basis in ECIL resulting in an additional $3.9 million income tax benefit for a total tax benefit of $28.1 million at September 30, 2020, which will be available to offset future income tax obligations.




42
Elevate Credit, Inc. and Subsidiaries
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — (Continued)
For the three and nine months ended September 30, 2020 and 2019



NOTE 14—RELATED PARTIES
Expenses related to the Company's board of directors, including board fees, travel reimbursements, share-based compensation and a consulting arrangement with a related party for the three and nine months ended September 30, 2020 and 2019 are included in Professional services within the Condensed Consolidated Income Statements and were as follows:
Three Months Ended September 30,
(Dollars in thousands) 2020 2019
Fees and travel expenses
$ 110  $ 129 
Stock compensation (1)
(189) 703 
Consulting
—  75 
Total board related expenses
$ (79) $ 907 
Nine Months Ended September 30,
(Dollars in thousands) 2020 2019
Fees and travel expenses
$ 365  $ 394 
Stock compensation (1)
1,598  1,423 
Consulting
150  225 
Total board related expenses
$ 2,113  $ 2,042 
(1) Includes Elevate's former CEO from August 1, 2019 through July 17, 2020.
During the year ended December 31, 2017, a member of the board of directors entered into a direct investment of $800 thousand in the VPC Facility. For the three months ended September 30, 2020 and 2019, the interest payments on this loan were $20 thousand and $21 thousand, respectively. The interest payments were $61 thousand and $64 thousand for the nine months ended September 30, 2020 and 2019, respectively.
At September 30, 2020 and December 31, 2019, the Company had approximately $110 thousand and $123 thousand, respectively, due to board members related to the above expenses, which is included in Accounts payable and accrued liabilities within the Condensed Consolidated Balance Sheets.

NOTE 15—SUBSEQUENT EVENTS
The Company evaluated subsequent events as of the date these financial statements are made available and determined there has been no material subsequent events that required recognition or additional disclosure in these condensed consolidated financial statements, except as follows:
For the period from October 1, 2020 to November 6, 2020, the Company repurchased 1,069,440 shares of its common stock on the open market for a total purchase price of $3.1 million, including any fees or commissions.



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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited condensed consolidated financial statements and the related notes and other financial information included elsewhere in this Quarterly Report on Form 10-Q. Some of the information contained in this discussion and analysis, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. You should review the "Note About Forward-Looking Statements" section of this Quarterly Report on Form 10-Q for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. We generally refer to loans, customers and other information and data associated with each of our brands (Rise, Elastic and Today Card) as Elevate’s loans, customers, information and data, irrespective of whether Elevate directly originates the credit to the customer or whether such credit is originated by a third party.
OVERVIEW
We provide online credit solutions to consumers in the US who are not well-served by traditional bank products and who are looking for better options than payday loans, title loans, pawn and storefront installment loans. Non-prime consumers now represent a larger market than prime consumers but are risky to underwrite and serve with traditional approaches. We’re succeeding at it - and doing it responsibly - with best-in-class advanced technology and proprietary risk analytics honed by serving more than 2.5 million customers with $8.6 billion in credit. Our current online credit products, Rise, Elastic and Today Card, reflect our mission to provide customers with access to competitively priced credit and services while helping them build a brighter financial future with credit building and financial wellness features. We call this mission "Good Today, Better Tomorrow."
Prior to June 29, 2020, we provided services in the United Kingdom ("UK") through our wholly-owned subsidiary, Elevate Credit International Limited (“ECIL”) under the brand name ‘Sunny.’ During the year ended December 31, 2018, ECIL began to receive an increased number of customer complaints initiated by claims management companies ("CMCs") related to the affordability assessment of certain loans. The CMCs' campaign against the high cost lending industry increased significantly during the third and fourth quarters of 2018 and continued through 2019 and into the first half of 2020, resulting in a significant increase in affordability claims against all companies in the industry over this period. The Financial Conduct Authority ("FCA"), a regulator in the UK financial services industry, began regulating the CMCs in April 2019 in order to ensure that the methods used by the CMCs are in the best interests of the consumer and the industry. Separately, the FCA asked all industry participants to review their lending practices to ensure that such companies are using an appropriate affordability and creditworthiness analysis. However, there continued to be a lack of clarity within the regulatory environment in the UK. This lack of clarity, coupled with the ongoing impact of the Coronavirus Disease 2019 ("COVID-19") on the UK market for Sunny, led the ECIL board of directors to place ECIL into administration under the UK Insolvency Act 1986 and appoint insolvency practitioners from KPMG LLP to take control and management of the UK business. As a result, we have deconsolidated ECIL and are presenting its results as discontinued operations.
We earn revenues on the Rise installment loans, on the Rise and Elastic lines of credit and on the Today Card credit card product. Our revenue primarily consists of finance charges and line of credit fees. Finance charges are driven by our average loan balances outstanding and by the average annual percentage rate (“APR”) associated with those outstanding loan balances. We calculate our average loan balances by taking a simple daily average of the ending loan balances outstanding for each period. Line of credit fees are recognized when they are assessed and recorded to revenue over the life of the loan. We present certain key metrics and other information on a “combined” basis to reflect information related to loans originated by us and by our bank partners that license our brands, Republic Bank, FinWise Bank and Capital Community Bank ("CCB"), as well as loans originated by third-party lenders pursuant to CSO programs, which loans originated through CSO programs are not recorded on our balance sheet in accordance with US GAAP. See “—Key Financial and Operating Metrics” and “—Non-GAAP Financial Measures.”



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We use our working capital, funds provided by third-party lenders pursuant to CSO programs and our credit facility with Victory Park Management, LLC ("VPC” and the "VPC Facility") to fund the loans we directly make to our Rise customers and provide working capital. The VPC Facility has a maximum total borrowing amount available of $218 million at September 30, 2020. See “—Liquidity and Capital Resources—Debt facilities.”
The Company also licenses its Rise installment loan brand to two banks. Beginning in the fourth quarter of 2018, we started licensing our Rise installment loan brand to a third-party lender, FinWise Bank, which originates Rise installment loans in 18 states. FinWise Bank initially provides all of the funding, retains a percentage of the balances of all of the loans originated and sells the remaining loan participation in those Rise installment loans to a third-party SPV, EF SPV, Ltd. ("EF SPV"). Prior to August 1, 2019, FinWise Bank retained 5% of the balances and sold a 95% participation to EF SPV. On August 1, 2019, EF SPV purchased an additional 1% participation in the outstanding portfolio with the participation percentage revised going forward to 96%. These loan participation purchases are funded through a separate financing facility (the "EF SPV Facility"), effective February 1, 2019, and through cash flows from operations generated by EF SPV. The EF SPV Facility has a maximum total borrowing amount available of $250 million. We do not own EF SPV, but we have a credit default protection agreement with EF SPV whereby we provide credit protection to the investors in EF SPV against Rise loan losses in return for a credit premium. Elevate is required to consolidate EF SPV as a variable interest entity under US GAAP and the condensed consolidated financial statements include revenue, losses and loans receivable related to the 96% of the Rise installment loans originated by FinWise Bank and sold to EF SPV.
Beginning in the third quarter of 2020, we also license our Rise installment loan brand to an additional bank, CCB, which originates Rise installment loans in two different states than FinWise Bank. Similar to the relationship with FinWise Bank, CCB initially provides all of the funding, retains 5% of the balances of all of the loans originated and sells the remaining 95% loan participation in those Rise installment loans to a third-party SPV, EC SPV, Ltd. ("EC SPV"). These loan participation purchases are funded through a separate financing facility (the "EC SPV Facility"), and through cash flows from operations generated by EC SPV. The EC SPV Facility has a maximum total borrowing amount available of $100 million. We do not own EC SPV, but we have a credit default protection agreement with EC SPV whereby we provide credit protection to the investors in EC SPV against Rise loan losses in return for a credit premium. Elevate is required to consolidate EC SPV as a variable interest entity under US GAAP and the condensed consolidated financial statements include revenue, losses and loans receivable related to the 95% of the Rise installment loans originated by CCB and sold to EC SPV.
The Elastic line of credit product is originated by a third-party lender, Republic Bank, which initially provides all of the funding for that product. Republic Bank retains 10% of the balances of all loans originated and sells a 90% loan participation in the Elastic lines of credit. An SPV structure was implemented such that the loan participations are sold by Republic Bank to Elastic SPV, Ltd. (“Elastic SPV”) and Elastic SPV receives its funding from VPC in a separate financing facility (the “ESPV Facility”), which was finalized on July 13, 2015. We do not own Elastic SPV, but we have a credit default protection agreement with Elastic SPV whereby we provide credit protection to the investors in Elastic SPV against Elastic loan losses in return for a credit premium. Per the terms of this agreement, under US GAAP, we are the primary beneficiary of Elastic SPV and are required to consolidate the financial results of Elastic SPV as a VIE in our consolidated financial results. The ESPV Facility has a maximum total borrowing amount available of $350 million at September 30, 2020. See “—Liquidity and Capital Resources—Debt facilities.”

Our management assesses our financial performance and future strategic goals through key metrics based primarily on the following three themes:
•Revenue growth.   Key metrics related to revenue growth that we monitor by product include the ending and average combined loan balances outstanding, the effective APR of our product loan portfolios, the total dollar value of loans originated, the number of new customer loans made, the ending number of customer loans outstanding and the related customer acquisition costs (“CAC”) associated with each new customer loan made. We include CAC as a key metric when analyzing revenue growth (rather than as a key metric within margin expansion).



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•Stable credit quality.    Since the time they were managing our legacy products, our management team has maintained stable credit quality across the loan portfolio they were managing. Additionally, in the periods covered in this Management's Discussion and Analysis of Financial Condition and Results of Operations, we have improved our credit quality. The credit quality metrics we monitor include net charge-offs as a percentage of revenues, the combined loan loss reserve as a percentage of outstanding combined loans, total provision for loan losses as a percentage of revenues and the percentage of past due combined loans receivable – principal.
•Margin expansion.    We expect that our operating margins will continue to expand over the long term as we lower our direct marketing costs and efficiently manage our operating expenses while continuing to improve our credit quality. We aim to manage our business to achieve a long-term operating margin of 20%, and do not expect our operating margin to increase beyond that level over the long-term, as we intend to pass on any improvements over our targeted margins to our customers in the form of lower APRs. We believe this is a critical component of our responsible lending platform and over time will also help us continue to attract new customers and retain existing customers.
Impact of COVID-19
In March 2020, the outbreak of COVID-19 was recognized as a pandemic by the World Health Organization. The spread of COVID-19 has created a global public health crisis that has resulted in unprecedented uncertainty, volatility and disruption in financial markets and in governmental, commercial and consumer activity in the United States and globally, including the markets that we serve. Governmental responses to the pandemic have included orders closing businesses not deemed essential and directing individuals to restrict their movements, observe social distancing and shelter in place. These actions, together with responses to the pandemic by businesses and individuals, have resulted in rapid decreases in commercial and consumer activity, temporary closures of many businesses that have led to a loss of revenues and a rapid increase in unemployment, material decreases in oil and gas prices and in business valuations, disrupted global supply chains, market downturns and volatility, changes in consumer behavior related to pandemic fears, related emergency response legislation and an expectation that Federal Reserve policy will maintain a low interest rate environment for the foreseeable future. During the third quarter, some restrictions have been lifted, but personal and business activities have not returned to their previous normal levels as the virus continues to impact the population.
As COVID-19 has continued to impact our office locations, our employee base is currently working in a hybrid remote working environment in which employees may continue to work remotely or return to the office on a limited basis. We have sought to ensure our employees feel secure in their jobs, have flexibility in their work location and have the resources they need to stay safe and healthy. As an 100% online lending solutions provider, our technology and underwriting platform has continued to serve our customers and the bank originators that we support.
In response to the COVID-19 pandemic, we, along with the banks we support, have also expanded our payment flexibility programs to provide temporary payment relief to certain customers who meet the program’s qualifications. This program allows for a deferral of payments for an initial period of 30 to 60 days, which we may extend for an additional 30 days, for a maximum of 180 days on a cumulative basis. The customer will return to their normal payment schedule after the end of the deferral period with the extension of their maturity date equivalent to their deferral period not to exceed an additional 180 days. For Rise installment loans, finance charges continue to accrue at a lower effective APR over the expected extended term of the loan considering the deferral periods provided. For Elastic lines of credit, no fees accrue during the payment deferral period. As a result, we expect the average APR of our products to decrease due to the impact of the COVID-19 pandemic and the payment flexibility programs that have been implemented. As of September 30, 2020, 10.4% of customers have been provided relief through a COVID-19 payment deferral program for a total of $38.7 million in loans with deferred payments. This compares to $50.7 million in loans with deferred payments, or 12.5% of customers, as of June 30, 2020. We believe that our customers are currently managing through the current crisis and returning to repayment status by meeting their next scheduled payment due while in the programs and continuing to meet their scheduled payments once they exit the programs.





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Both we and the bank originators are closely monitoring the performance of the payment deferral program and key credit quality indicators such as payment defaults, continued payment deferrals, and line of credit utilization. While we initially anticipated that the COVID-19 pandemic would have a negative impact on our credit quality, instead the large quantity of monetary stimulus provided by the US government to our customer base has generally allowed customers to continue making payments on their loans. At the beginning of the pandemic, we expected an increase in net charge-offs as compared to prior periods. However, net charge-offs as a percentage of revenue during the third quarter of 2020 was at a historical low. Further, we believe that the allowance for loan losses is adequate to absorb the losses inherent in the portfolio as of September 30, 2020, including loans that are part of the payment deferral program. Both we, and the bank originators we support, have also implemented underwriting changes to address credit risk associated with loan originations during the economic crisis created by the COVID-19 pandemic and have reduced loan origination applications and loan origination volume since the beginning of the COVID-19 pandemic in March 2020.

The portfolio of loan products we and the bank originators provide has experienced significantly decreased demand for both new and former customers since the COVID-19 pandemic began, including the effects of underwriting changes that limited the volume of new customer loan originations and monetary stimulus provided by the US government reducing demand for loan products. These events are resulting in materially lower new customer loans and a corresponding decrease in revenues compared to a year ago. While we slightly increased our marketing spend to acquire new customer loans during the third quarter of 2020 as compared to the prior quarter, our overall loan origination volumes during the third quarter of 2020 are still below our historical origination volumes due to continued reduction in loan demand for our products and increased underwriting criteria. Given the uncertainty surrounding the COVID-19 pandemic, we are currently unable to determine if demand for our loan products will increase during the fourth quarter of 2020. Until demand increases, our loan balances and revenue will continue to be materially lower than the prior year periods.

Significant uncertainties as to future economic conditions exist, and we have taken deliberate actions in response, including assessing our minimum cash and liquidity requirement, monitoring our debt covenant compliance and implementing measures to ensure that our cash and liquidity position is maintained through the current economic cycle such as our recently implemented operating expense reduction plan. We continue to monitor the impact of COVID-19 closely, as well as any effects that may result from the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act and any further economic relief, stimulus payments or legislation by the federal government; however, the extent to which the COVID-19 pandemic will continue to impact our operations and financial results during the remainder of 2020 is highly uncertain.
KEY FINANCIAL AND OPERATING METRICS
As discussed above, we regularly monitor a number of metrics in order to measure our current performance and project our future performance. These metrics aid us in developing and refining our growth strategies and in making strategic decisions.
Certain of our metrics are non-GAAP financial measures. We believe that such metrics are useful in period-to-period comparisons of our core business. However, non-GAAP financial measures are not an alternative to any measure of financial performance calculated and presented in accordance with US GAAP. See “—Non-GAAP Financial Measures” for a reconciliation of our non-GAAP measures to US GAAP.




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Revenue Growth
 
  As of and for the three months ended September 30, As of and for the nine months ended September 30,
Revenue metrics (dollars in thousands, except as noted) 2020 2019 2020 2019
Revenues $ 94,164  $ 164,296  $ 374,622  $ 474,736 
Period-over-period change in revenue (43) % (3) % (21) % (3) %
Ending combined loans receivable – principal(1) 377,177  586,121  377,177  586,121 
Average combined loans receivable – principal(1)(2) 389,701  576,574  479,526  554,925 
Total combined loans originated – principal 132,516  299,861  442,552  807,138 
Average customer loan balance (in dollars)(3) 1,797  1,948  1,797  1,948 
Number of new customer loans 8,489  53,356  47,054  119,562 
Ending number of combined loans outstanding 209,887  300,898  209,887  300,898 
Customer acquisition costs (in dollars) 305  205  295  244 
Effective APR of combined loan portfolio 96  % 113  % 104  % 114  %
_________
(1)Combined loans receivable is defined as loans owned by us and consolidated VIEs plus loans originated and owned by third-party lenders pursuant to our CSO programs. See “—Non-GAAP Financial Measures” for more information and for a reconciliation of Combined loans receivable to Loans receivable, net, the most directly comparable financial measure calculated in accordance with US GAAP.
(2)Average combined loans receivable – principal is calculated using an average of daily Combined loans receivable – principal balances.
(3)Average customer loan balance is an average of all three products and is calculated for each product by dividing the ending Combined loans receivable – principal by the number of loans outstanding at period end.
Revenues.    Our revenues are composed of Rise finance charges, Rise CSO fees (which are fees we receive from customers who obtain a loan through the CSO program for the credit services, including the loan guaranty, we provide), and revenues earned on the Rise and Elastic lines of credit. Finance charge and fee revenues from the Today Card credit card product were immaterial. See “—Components of our Results of Operations—Revenues.”

Ending and average combined loans receivable – principal.    We calculate the average combined loans receivable – principal by taking a simple daily average of the ending combined loans receivable – principal for each period. Key metrics that drive the ending and average combined loans receivable – principal include the amount of loans originated in a period and the average customer loan balance. All loan balance metrics include only the 90% participation in the related Elastic line of credit advances (we exclude the 10% held by Republic Bank), the 96% participation in FinWise Bank originated Rise installment loans and the 95% participation in CCB originated Rise installment loans, but include the full loan balances on CSO loans, which are not presented on our Condensed Consolidated Balance Sheet.
Total combined loans originated – principal.    The amount of loans originated in a period is driven primarily by loans to new customers as well as new loans to prior customers, including refinancings of existing loans to customers in good standing.
Average customer loan balance and effective APR of combined loan portfolio.    The average loan amount and its related APR are based on the product and the underlying credit quality of the customer. Generally, better credit quality customers are offered higher loan amounts at lower APRs. Additionally, new customers have more potential risk of loss than prior or existing customers due to lack of payment history and the potential for fraud. As a result, newer customers typically will have lower loan amounts and higher APRs to compensate for that additional risk of loss. The effective APR is calculated based on the actual amount of finance charges generated from a customer loan divided by the average outstanding balance for the loan and can be lower than the stated APR on the loan due to waived finance charges and other reasons. For example, a Rise customer may receive a $2,000 installment loan with a term of 24 months and a stated rate of 180%. In this example, the customer’s monthly installment loan payment would be $310.86. As the customer can prepay the loan balance at any time with no additional fees or early payment penalty, the customer pays the loan in full in month eight. The customer’s loan earns interest of $2,337.81 over the eight-month period and has an average outstanding balance of $1,948.17. The effective APR for this loan is 180% over the eight-month period calculated as follows:



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($2,337.81 interest earned / $1,948.17 average balance outstanding) x 12 months per year = 180%
                8 months
In addition, as an example for Elastic, if a customer makes a $2,500 draw on the customer’s line of credit and this draw required bi-weekly minimum payments of 5% (equivalent to 20 bi-weekly payments), and if all minimum payments are made, the draw would earn finance charges of $1,148. The effective APR for the line of credit in this example is 109% over the payment period and is calculated as follows:

($1,148.00 fees earned / $1,369.05 average balance outstanding) x 26 bi-weekly periods per year = 109%
                20 payments
The actual amount of revenue we realize on a loan portfolio is also impacted by the amount of prepayments and charged-off customer loans in the portfolio. For a single loan, on average, we typically expect to realize approximately 60% of the revenues that we would otherwise realize if the loan were to fully amortize at the stated APR. From the Rise example above, if we waived $400 of interest for this customer, the effective APR for this loan would decrease to 149%.
Number of new customer loans.    We define a new customer loan as the first loan made to a customer for each of our products (so a customer receiving a Rise installment loan and then at a later date taking their first cash advance on an Elastic line of credit would be counted twice). The number of new customer loans is subject to seasonal fluctuations. New customer acquisition is typically slowest during the first six months of each calendar year, primarily in the first quarter, compared to the latter half of the year, as our existing and prospective customers usually receive tax refunds during this period and, thus, have less of a need for loans from us. Further, many customers will use their tax refunds to prepay all or a portion of their loan balance during this period, so our overall loan portfolio typically decreases during the first quarter of the calendar year. Overall loan portfolio growth and the number of new customer loans tends to accelerate during the summer months (typically June and July), at the beginning of the school year (typically late August to early September) and during the winter holidays (typically late November to early December).
Customer acquisition costs.    A key expense metric we monitor related to loan growth is our CAC. This metric is the amount of direct marketing costs incurred during a period divided by the number of new customer loans originated during that same period. New loans to former customers are not included in our calculation of CAC (except to the extent they receive a loan through a different product) as we believe we incur no material direct marketing costs to make additional loans to a prior customer through the same product.
The following tables summarize the changes in customer loans by product for the three and nine months ended September 30, 2020 and 2019.
Three Months Ended September 30, 2020
Rise Elastic (1) Total
Beginning number of combined loans outstanding 107,125  115,119  222,244 
New customer loans originated 6,794  1,695  8,489 
Former customer loans originated 14,466  72  14,538 
Attrition (28,426) (6,958) (35,384)
Ending number of combined loans outstanding 99,959  109,928  209,887 
Customer acquisition cost $ 317  $ 253  $ 305 
Average customer loan balance $ 2,157  $ 1,470  $ 1,797 



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Three Months Ended September 30, 2019
Rise Elastic (1) Total
Beginning number of combined loans outstanding 135,771  142,561  278,332 
New customer loans originated 33,108  20,248  53,356 
Former customer loans originated 19,168  21  19,189 
Attrition (39,796) (10,183) (49,979)
Ending number of combined loans outstanding 148,251  152,647  300,898 
Customer acquisition cost $ 215  $ 188  $ 205 
Average customer loan balance $ 2,208  $ 1,695  $ 1,948 
Nine Months Ended September 30, 2020
Rise Elastic (1) Total
Beginning number of combined loans outstanding 152,435  149,524  301,959 
New customer loans originated 31,834  15,220  47,054 
Former customer loans originated 38,615  212  38,827 
Attrition (122,925) (55,028) (177,953)
Ending number of combined loans outstanding 99,959  109,928  209,887 
Customer acquisition cost $ 311  $ 264  $ 295 
Nine Months Ended September 30, 2019
Rise Elastic (1) Total
Beginning number of combined loans outstanding 142,758  166,397  309,155 
New customer loans originated 80,650  38,912  119,562 
Former customer loans originated 55,809  48  55,857 
Attrition (130,966) (52,710) (183,676)
Ending number of combined loans outstanding 148,251  152,647  300,898 
Customer acquisition cost $ 251  $ 230  $ 244 
(1) Includes immaterial balances related to the Today Card.
Recent trends.    Our revenues for the three months ended September 30, 2020 totaled $94.2 million, a decrease of 43% versus the three months ended September 30, 2019. A similar trend occurred for the nine months ended September 30, 2020, as revenues totaled $374.6 million, down 21% versus the prior year. Both the Rise and Elastic products experienced a year-over-year decline in revenues attributable to reductions in loan origination volume and lower effective APRs for the loan portfolio due to the economic crisis created by the COVID-19 pandemic beginning in March 2020.
In response to the COVID-19 pandemic, we expanded our payment flexibility program to provide temporary payment relief to certain customers who meet the program’s qualifications. This program allows for a deferral of payments for an initial period of 30 to 60 days, for a maximum of 180 days on a cumulative basis. The customer will return to their normal payment schedule after the end of the deferral period with the extension of their maturity date equivalent to their deferral period not to exceed an additional 180 days. For Rise installment loans, finance charges continue to accrue at a lower effective APR over the expected extended term of the loan considering the deferral periods provided. For Elastic lines of credit, no fees accrue during the payment deferral period. As a result, the average APR of our products has decreased due to the impact of the COVID pandemic and the payment flexibility program that has been implemented.




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Additionally, the portfolio of loan products we and the bank originators provide has experienced significantly decreased loan demand for both new and former customers since the COVID-19 pandemic began, including the effects of underwriting changes that limited the volume of new customer loan originations and monetary stimulus provided by the US government reducing demand for loan products. These events are resulting in materially lower new customer loans and a corresponding decrease in revenues compared to a year ago. While we slightly increased our marketing spend to acquire new customer loans during the third quarter of 2020 as compared to the 2020 second quarter, our overall loan origination volumes during the third quarter of 2020 are still below our historical origination volumes due to continued reduction in loan demand for our products and increased underwriting criteria. As a result of the COVID-19 pandemic, Rise and Elastic principal loan balances at September 30, 2020 totaled $215.6 million and $152.7 million, respectively, down roughly $111.7 million and $101.4 million, respectively, from a year ago.
Given the uncertainty surrounding the COVID-19 pandemic, we are currently unable to determine if demand for our loan products will increase during the fourth quarter of 2020. Until demand increases, our loan balances and revenue will continue to be materially lower than the prior year periods.
Credit quality
 
  As of and for the three months ended September 30, As of and for the nine months ended September 30,
Credit quality metrics (dollars in thousands) 2020 2019 2020 2019
Net charge-offs(1) $ 22,428  $ 77,065  $ 163,878  $ 239,477 
Additional provision for loan losses(1) (9,264) 14,637  (30,662) (4,138)
Provision for loan losses $ 13,164  $ 91,702  $ 133,216  $ 235,339 
Past due combined loans receivable – principal as a percentage of combined loans receivable – principal(2) 6  % 10  % 6  % 10  %
Net charge-offs as a percentage of revenues(1) 24  % 47  % 44  % 50  %
Total provision for loan losses as a percentage of revenues 14  % 56  % 36  % 50  %
Combined loan loss reserve(3) $ 51,330  $ 82,509  $ 51,330  $ 82,509 
Combined loan loss reserve as a percentage of combined loans receivable(3)(4) 13  % 13  % 13  % 13  %
_________ 
(1)Net charge-offs and additional provision for loan losses are not financial measures prepared in accordance with US GAAP. Net charge-offs include the amount of principal and accrued interest on loans that are more than 60 days past due, or sooner if we receive notice that the loan will not be collected, such as a bankruptcy notice or identified fraud, offset by any recoveries. Additional provision for loan losses is the amount of provision for loan losses needed for a particular period to adjust the combined loan loss reserve to the appropriate level in accordance with our underlying loan loss reserve methodology. See “—Non-GAAP Financial Measures” for more information and for a reconciliation to Provision for loan losses, the most directly comparable financial measure calculated in accordance with US GAAP.
(2)Combined loans receivable is defined as loans owned by us and consolidated VIEs plus loans originated and owned by third-party lenders pursuant to our CSO programs. See “—Non-GAAP Financial Measures” for more information and for a reconciliation of Combined loans receivable to Loans receivable, net, the most directly comparable financial measure calculated in accordance with US GAAP.
(3)Combined loan loss reserve is defined as the loan loss reserve for loans originated and owned by the Company plus the loan loss reserve for loans owned by third-party lenders and guaranteed by us. See “—Non-GAAP Financial Measures” for more information and for a reconciliation of Combined loan loss reserve to Allowance for loan losses, the most directly comparable financial measure calculated in accordance with US GAAP.
(4)Combined loan loss reserve as a percentage of combined loans receivable is determined using period-end balances.



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Net principal charge-offs as a percentage of average combined loans receivable - principal (1) (2) (3) First
Quarter 		Second
Quarter 		Third
Quarter 		Fourth
Quarter
2020 11% 9% 3% N/A
2019 13% 10% 11% 13%
2018 13% 12% 13% 15%
_________ 
(1)Net principal charge-offs is comprised of gross principal charge-offs less recoveries.
(2)Average combined loans receivable - principal is calculated using an average of daily Combined loans receivable - principal balances during each quarter.
(3)Combined loans receivable is defined as loans owned by us and consolidated VIEs plus loans originated and owned by third-party lenders pursuant to our CSO programs. See “—Non-GAAP Financial Measures” for more information and for a reconciliation of Combined loans receivable to Loans receivable, net, the most directly comparable financial measure calculated in accordance with US GAAP.
In reviewing the credit quality of our loan portfolio, we break out our total provision for loan losses that is presented on our income statement under US GAAP into two separate items—net charge-offs and additional provision for loan losses. Net charge-offs are indicative of the credit quality of our underlying portfolio, while additional provision for loan losses is subject to more fluctuation based on loan portfolio growth, recent credit quality trends and the effect of normal seasonality on our business. The additional provision for loan losses is the amount needed to adjust the combined loan loss reserve to the appropriate amount at the end of each month based on our loan loss reserve methodology.
 
Net charge-offs.    Net charge-offs comprise gross charge-offs offset by recoveries on prior charge-offs. Gross charge-offs include the amount of principal and accrued interest on loans that are more than 60 days past due, or sooner if we receive notice that the loan will not be collected, such as a bankruptcy notice or identified fraud. Any payments received on loans that have been charged off are recorded as recoveries and reduce the total amount of gross charge-offs. Recoveries are typically less than 10% of the amount charged off, and thus, we do not view recoveries as a key credit quality metric.
Net charge-offs as a percentage of revenues can vary based on several factors, such as whether or not we experience significant growth or lower the APR of our products. Additionally, although a more seasoned portfolio will typically result in lower net charge-offs as a percentage of revenues, we do not intend to drive down this ratio significantly below our historical ratios and would instead seek to offer our existing products to a broader new customer base to drive additional revenues.
Net charge-offs as a percentage of average combined loans receivable-principal allow us to determine credit quality and evaluate loss experience trends across our loan portfolio.
Additional provision for loan losses.    Additional provision for loan losses is the amount of provision for loan losses needed for a particular period to adjust the combined loan loss reserve to the appropriate level in accordance with our underlying loan loss reserve methodology.

Additional provision for loan losses relates to an increase in future inherent losses in the loan portfolio as determined by our loan loss reserve methodology. This increase could be due to a combination of factors such as an increase in the size of the loan portfolio or a worsening of credit quality or increase in past due loans. It is also possible for the additional provision for loan losses for a period to be a negative amount, which would reduce the amount of the combined loan loss reserve needed (due to a decrease in the loan portfolio or improvement in credit quality). The amount of additional provision for loan losses is seasonal in nature, mirroring the seasonality of our new customer acquisition and overall loan portfolio growth, as discussed above. The combined loan loss reserve typically decreases during the first quarter or first half of the calendar year due to a decrease in the loan portfolio from year end. Then, as the rate of growth for the loan portfolio starts to increase during the second half of the year, additional provision for loan losses is typically needed to increase the reserve for future losses associated with the loan growth. Because of this, our provision for loan losses can vary significantly throughout the year without a significant change in the credit quality of our portfolio.




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The following provides an example of the application of our loan loss reserve methodology and the break-out of the provision for loan losses between the portion associated with replenishing the reserve due to net charge-offs and the amount related to the additional provision for loan losses. If the beginning combined loan loss reserve were $25 million, and we incurred $10 million of net charge-offs during the period and the ending combined loan loss reserve needed to be $30 million according to our loan loss reserve methodology, our total provision for loan losses would be $15 million, comprising $10 million in net charge-offs (provision needed to replenish the combined loan loss reserve) plus $5 million of additional provision related to an increase in future inherent losses in the loan portfolio identified by our loan loss reserve methodology.
 
Example (dollars in thousands)      
Beginning combined loan loss reserve $ 25,000 
Less: Net charge-offs (10,000)
Provision for loan losses:
Provision for net charge-offs 10,000 
Additional provision for loan losses 5,000 
Total provision for loan losses 15,000 
Ending combined loan loss reserve balance $ 30,000 
 
Loan loss reserve methodology.    Our loan loss reserve methodology is calculated separately for each product and, in the case of Rise loans originated under the state lending model (including CSO program loans), is calculated separately based on the state in which each customer resides to account for varying state license requirements that affect the amount of the loan offered, repayment terms and other factors. For each product, loss factors are calculated based on the delinquency status of customer loan balances: current, 1 to 30 days past due or 31 to 60 days past due. These loss factors for loans in each delinquency status are based on average historical loss rates by product (or state) associated with each of these three delinquency categories. Hence, another key credit quality metric we monitor is the percentage of past due combined loans receivable – principal, as an increase in past due loans will cause an increase in our combined loan loss reserve and related additional provision for loan losses to increase the reserve. For customers that are not past due, we further stratify these loans into loss rates by payment number, as a new customer that is about to make a first loan payment has a significantly higher risk of loss than a customer who has successfully made ten payments on an existing loan with us. Based on this methodology, during the past three years we have seen our combined loan loss reserve as a percentage of combined loans receivable fluctuate between approximately 12% and 17% depending on the overall mix of new, former and past due customer loans.

Recent trends.    Total loan loss provision for the three and nine months ended September 30, 2020 was 14% and 36% of revenues, respectively, which was below our targeted range of 45% to 55%, and below the 56% and 50% for the three and nine months ended September 30, 2019, respectively. Net Charge-offs as a percentage of revenues for the three and nine months ended September 30, 2020 were 24% and 44%, respectively, compared to 47% and 50% in the respective prior year periods. While we initially anticipated that the COVID-19 pandemic would have a negative impact on our credit quality, instead the large quantity of monetary stimulus provided by the US government to our customer base has generally allowed customers to continue making payments on their loans. However, this has also caused weaker customer demand for additional loans resulting in lower overall loan balances and revenues. We continue to monitor the portfolio during this economic crisis resulting from COVID-19 and continue to adjust our underwriting and credit policies to mitigate any potential negative impacts. In the near-term we expect that net charge-offs as a percentage of revenues will continue to trend lower than our targeted range of 45% to 55% of revenue. In the long-term (post-COVID-19), we expect to continue to manage our total loan loss provision as a percentage of revenues to continue to remain within our targeted range of approximately 45% to 55% of revenue.

The combined loan loss reserve as a percentage of combined loans receivable totaled 13% as of September 30, 2020, which is consistent with 13% as of September 30, 2019. The loan loss reserve percentage remains steady due to an increase in loans outstanding with a payment deferral under the payment flexibility program offered in response to the COVID-19 pandemic. While we have seen positive payment performance once loans complete their payment deferral status, the loans in this population have a higher inherent risk of loss which is reflected in our loan loss reserve calculations. Past due loan balances at September 30, 2020 were 6% of total combined loans receivable - principal, down significantly from 10% from a year ago, which is attributable to the COVID-19 loan payment deferral program.




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We also look at principal loan charge-offs (including both credit and fraud losses) by vintage as a percentage of combined loans originated - principal. As the below table shows, our cumulative principal loan charge-offs through September 30, 2020 for each annual vintage since the 2013 vintage are generally under 30% and continue to trend at or slightly below our 25% to 30% long-term targeted range. During 2019, we implemented new fraud tools that have helped lower fraud losses for the 2019 vintage and rolled out our next generation of credit models during the second quarter of 2019 and continued refining the models during the third and fourth quarters of 2019. Our payment deferral programs have assisted in reducing losses in our 2019 and 2020 vintages coupled with a lower volume of new loan originations in our 2020 vintage. The preliminary data on the 2019 and 2020 vintages is that they are both performing better than the 2017 and 2018 vintages. However, it is possible that the cumulative loss rates on all vintages will increase and may exceed our recent historical cumulative loss experience due to the impact of a prolonged economic crisis resulting from the COVID-19 pandemic.

ELVT-20200930_G2.JPG
1) The 2019 and 2020 vintages are not yet fully mature from a loss perspective.
2) UK included in the 2013 to 2017 vintages only.



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Margins
  Three Months Ended September 30, Nine Months Ended September 30,
Margin metrics (dollars in thousands) 2020 2019 2020 2019
 
Revenues $ 94,164  $ 164,296  $ 374,622  $ 474,736 
Net charge-offs(1) (22,428) (77,065) (163,878) (239,477)
Additional provision for loan losses(1) 9,264  (14,637) 30,662  4,138 
Direct marketing costs (2,585) (10,927) (13,898) (29,198)
Other cost of sales (1,672) (2,447) (5,949) (7,233)
Gross profit 76,743  59,220  221,559  202,966 
Operating expenses (42,662) (40,903) (121,517) (121,726)
Operating income $ 34,081  $ 18,317  $ 100,042  $ 81,240 
As a percentage of revenues:
Net charge-offs 24  % 47  % 44  % 50  %
Additional provision for loan losses (10) 9  (8) (1)
Direct marketing costs 3  7  4  6 
Other cost of sales 2  1  2  2 
Gross margin 81  36  59  43 
Operating expenses 45  25  32  26 
Operating margin 36  % 11  % 27  % 17  %
_________ 
(1)Non-GAAP measure. See “—Non-GAAP Financial Measures—Net charge-offs and additional provision for loan losses.”
Gross margin is calculated as revenues minus cost of sales, or gross profit, expressed as a percentage of revenues, and operating margin is calculated as operating income expressed as a percentage of revenues. Due to the negative impact of COVID-19 on our loan balances and revenue, we are monitoring our profit margins closely. Long-term, we intend to continue to manage the business to a targeted 20% operating margin.
Recent operating margin trends.    For the three months ended September 30, 2020, our operating margin was 36%, which was an increase from 11% in the prior year period. Our operating margin increased from 17% for the nine months ended September 30, 2019 to 27% for the nine months ended September 30, 2020. These margin increases were primarily driven by lower net charge-offs due to improved credit quality and by lower additional provisions for loan losses due to the decrease in loan balances resulting from the COVID-19 pandemic.

While gross margins are currently above our targeted 40%, operating expenses as a percentage of revenue continue to increase due to the negative impact of the COVID-19 pandemic on loan balances and revenue. As a result, we recently implemented an operating expense reduction plan. We have completed the following actions under our operating expense reduction plan:

•Reduction of our U.S. workforce by approximately 17% effective July 8, 2020;
•Reduction of executive salaries and board compensation beginning July 2020; and
•Elimination of discretionary operating expense items and renegotiated terms with key vendors.




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NON-GAAP FINANCIAL MEASURES
We believe that the inclusion of the following non-GAAP financial measures in this Quarterly Report on Form 10-Q can provide a useful measure for period-to-period comparisons of our core business, provide transparency and useful information to investors and others in understanding and evaluating our operating results, and enable investors to better compare our operating performance with the operating performance of our competitors. Management uses these non-GAAP financial measures frequently in its decision-making because they provide supplemental information that facilitates internal comparisons to the historical operating performance of prior periods and give an additional indication of our core operating performance. However, non-GAAP financial measures are not a measure calculated in accordance with US generally accepted accounting principles, or US GAAP, and should not be considered an alternative to any measures of financial performance calculated and presented in accordance with US GAAP. Other companies may calculate these non-GAAP financial measures differently than we do.
Adjusted Earnings
Adjusted earnings represents our net income from continuing operations, adjusted to exclude:
•Contingent loss related to a legal matter
•Cumulative tax effect of adjustments

Adjusted diluted earnings per share is Adjusted earnings divided by Diluted weighted average shares outstanding.
The following table presents a reconciliation of net income from continuing operations and diluted earnings per share to Adjusted earnings and Adjusted diluted earnings per share, which excludes the impact of the contingent loss for each of the periods indicated:
  Three Months Ended September 30, Nine Months Ended September 30,
(Dollars in thousands except per share amounts) 2020 2019 2020 2019
Net income from continuing operations $ 16,616  $ 2,648  $ 40,631  $ 21,986 
Impact of contingent loss related to a legal matter 1,007  —  6,692  — 
Cumulative tax effect of adjustments (239) —  (1,590) — 
Adjusted earnings $ 17,384  $ 2,648  $ 45,733  $ 21,986 
Diluted earnings per share $ 0.41  $ 0.06  $ 0.95  $ 0.50 
Impact of contingent loss related to a legal matter 0.02  —  0.16  — 
Cumulative tax effect of adjustments (0.01) —  (0.04) — 
Adjusted diluted earnings per share $ 0.42  $ 0.06  $ 1.07  $ 0.50 
Adjusted EBITDA and Adjusted EBITDA Margin
Adjusted EBITDA represents our net income from continuing operations, adjusted to exclude:
•Net interest expense, primarily associated with notes payable under the VPC Facility, EF SPV Facility, EC SPV Facility and ESPV Facility used to fund the loan portfolios;
•Share-based compensation;



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•Depreciation and amortization expense on fixed assets and intangible assets;
•Gains and losses from fair value adjustments, dispositions or contingent losses related to legal matters included in non-operating losses; and
•Income taxes.
Adjusted EBITDA margin is Adjusted EBITDA divided by revenue.
Management believes that Adjusted EBITDA and Adjusted EBITDA margin are useful supplemental measures to assist management and investors in analyzing the operating performance of the business and provide greater transparency into the results of operations of our core business.
Adjusted EBITDA and Adjusted EBITDA margin should not be considered as alternatives to net income from continuing operations or any other performance measure derived in accordance with US GAAP. Our use of Adjusted EBITDA and Adjusted EBITDA margin has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under US GAAP. Some of these limitations are:
•Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect expected cash capital expenditure requirements for such replacements or for new capital assets;
•Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs; and
•Adjusted EBITDA does not reflect interest associated with notes payable used for funding the loan portfolios, for other corporate purposes or tax payments that may represent a reduction in cash available to us.
The following table presents a reconciliation of net income from continuing operations to Adjusted EBITDA and Adjusted EBITDA margin for each of the periods indicated: 
  Three Months Ended September 30, Nine Months Ended September 30,
(Dollars in thousands) 2020 2019 2020 2019
Net income from continuing operations $ 16,616  $ 2,648  $ 40,631  $ 21,986 
Adjustments:
Net interest expense 11,575  13,629  37,408  48,565 
Share-based compensation 1,166  2,364  6,513  7,286 
Depreciation and amortization 4,588  4,013  13,413  11,824 
Non-operating loss 1,007  695  6,692  695 
Income tax expense 4,883  1,345  15,311  9,994 
Adjusted EBITDA $ 39,835  $ 24,694  $ 119,968  $ 100,350 
Adjusted EBITDA margin 42  % 15  % 32  % 21  %
Free cash flow
Free cash flow (“FCF”) represents our net cash provided by operating activities, adjusted to include:
•Net charge-offs – combined principal loans; and
•Capital expenditures.



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The following table presents a reconciliation of net cash provided by operating activities to FCF for each of the periods indicated: 
  Nine Months Ended September 30,
(Dollars in thousands) 2020 2019
Net cash provided by continuing operating activities(1) $ 177,705  $ 239,843 
Adjustments:
Net charge-offs – combined principal loans (125,232) (187,866)
Capital expenditures (12,867) (14,881)
FCF $ 39,606  $ 37,096 
 _________ 
(1)Net cash provided by operating activities includes net charge-offs – combined finance charges.
Net charge-offs and additional provision for loan losses
We break out our total provision for loan losses into two separate items—first, the amount related to net charge-offs, and second, the additional provision for loan losses needed to adjust the combined loan loss reserve to the appropriate amount at the end of each month based on our loan loss provision methodology. We believe this presentation provides more detail related to the components of our total provision for loan losses when analyzing the gross margin of our business.
 
Net charge-offs.    Net charge-offs comprise gross charge-offs offset by recoveries on prior charge-offs. Gross charge-offs include the amount of principal and accrued interest on loans that are more than 60 days past due, or sooner if we receive notice that the loan will not be collected, such as a bankruptcy notice or identified fraud. Any payments received on loans that have been charged off are recorded as recoveries and reduce the total amount of gross charge-offs.
Additional provision for loan losses.    Additional provision for loan losses is the amount of provision for loan losses needed for a particular period to adjust the combined loan loss reserve to the appropriate level in accordance with our underlying loan loss reserve methodology.
  Three Months Ended September 30, Nine Months Ended September 30,
(Dollars in thousands) 2020 2019 2020 2019
Net charge-offs $ 22,428  $ 77,065  $ 163,878  $ 239,477 
Additional provision for loan losses (9,264) 14,637  (30,662) (4,138)
Provision for loan losses $ 13,164  $ 91,702  $ 133,216  $ 235,339 
Combined loan information
The Elastic line of credit product is originated by a third-party lender, Republic Bank, which initially provides all of the funding for that product. Republic Bank retains 10% of the balances of all of the loans originated and sells a 90% loan participation in the Elastic lines of credit to a third-party SPV, Elastic SPV, Ltd. Elevate is required to consolidate Elastic SPV, Ltd. as a VIE under US GAAP and the condensed consolidated financial statements include revenue, losses and loans receivable related to the 90% of Elastic lines of credit originated by Republic Bank and sold to Elastic SPV.



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Beginning in the fourth quarter of 2018, we started licensing our Rise installment loan brand to a third-party lender, FinWise Bank, which originates Rise installment loans in 18 states. Prior to August 1, 2019, FinWise Bank retained 5% of the balances of all originated loans and sold a 95% loan participation in those Rise installment loans to a third-party SPV, EF SPV. On August 1, 2019, EF SPV purchased an additional 1% participation in the outstanding portfolio with the participation percentage revised going forward to 96%. We do not own EF SPV, but we are required to consolidate EF SPV as a VIE under US GAAP and the condensed consolidated financial statements include revenue, losses and loans receivable related to the 96% of Rise installment loans originated by FinWise Bank and sold to EF SPV.
Beginning in the third quarter of 2020, we also license our Rise installment loan brand to an additional bank, CCB, which originates Rise installment loans in two different states than FinWise Bank. Similar to the relationship with FinWise Bank, CCB retains 5% of the balances of all of the loans originated and sells the remaining 95% loan participation in those Rise installment loans to EC SPV. We do not own EC SPV, but we are required to consolidate EC SPV as a variable interest entity under US GAAP and the condensed consolidated financial statements include revenue, losses and loans receivable related to the 95% of the Rise installment loans originated by CCB and sold to EC SPV.
The information presented in the tables below on a combined basis are non-GAAP measures based on a combined portfolio of loans, which includes the total amount of outstanding loans receivable that we own and that are on our balance sheet plus outstanding loans receivable originated and owned by third parties that we guarantee pursuant to CSO programs in which we participate. See “—Basis of Presentation and Critical Accounting Policies—Allowance and liability for estimated losses on consumer loans” and “—Basis of Presentation and Critical Accounting Policies—Liability for estimated losses on credit service organization loans.”
We believe these non-GAAP measures provide investors with important information needed to evaluate the magnitude of potential loan losses and the opportunity for revenue performance of the combined loan portfolio on an aggregate basis. We also believe that the comparison of the combined amounts from period to period is more meaningful than comparing only the amounts reflected on our balance sheet since both revenues and cost of sales as reflected in our financial statements are impacted by the aggregate amount of loans we own and those CSO loans we guarantee.
Our use of total combined loans and fees receivable has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under US GAAP. Some of these limitations are:
•Rise CSO loans are originated and owned by a third-party lender and
•Rise CSO loans are funded by a third-party lender and are not part of the VPC Facility.
As of each of the period ends indicated, the following table presents a reconciliation of:
•Loans receivable, net, Company owned (which reconciles to our Condensed Consolidated Balance Sheets included elsewhere in this Quarterly Report on Form 10-Q);
•Loans receivable, net, guaranteed by the Company (as disclosed in Note 3 of our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q);
•Combined loans receivable (which we use as a non-GAAP measure); and
•Combined loan loss reserve (which we use as a non-GAAP measure).
 



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  2019 2020
(Dollars in thousands) September 30 December 31 March 31 June 30 September 30
 
Company Owned Loans:
Loans receivable – principal, current, company owned $ 507,551  $ 530,463  $ 486,396  $ 387,939  $ 346,380 
Loans receivable – principal, past due, company owned 59,240  58,489  53,923  18,917  21,354 
Loans receivable – principal, total, company owned 566,791  588,952  540,319  406,856  367,734 
Loans receivable – finance charges, company owned 31,698  33,033  31,621  25,606  24,117 
Loans receivable – company owned 598,489  621,985  571,940  432,462  391,851 
Allowance for loan losses on loans receivable, company owned (80,537) (79,912) (76,188) (59,438) (49,909)
Loans receivable, net, company owned $ 517,952  $ 542,073  $ 495,752  $ 373,024  $ 341,942 
Third Party Loans Guaranteed by the Company:
Loans receivable – principal, current, guaranteed by company $ 18,633  $ 17,474  $ 12,606  $ 6,755  $ 9,129 
Loans receivable – principal, past due, guaranteed by company 697  723  564  117  314 
Loans receivable – principal, total, guaranteed by company(1) 19,330  18,197  13,170  6,872  9,443 
Loans receivable – finance charges, guaranteed by company(2) 1,553  1,395  1,150  550  679 
Loans receivable – guaranteed by company 20,883  19,592  14,320  7,422  10,122 
Liability for losses on loans receivable, guaranteed by company (1,972) (2,080) (1,571) (1,156) (1,421)
Loans receivable, net, guaranteed by company(2) $ 18,911  $ 17,512  $ 12,749  $ 6,266  $ 8,701 
Combined Loans Receivable(3):
Combined loans receivable – principal, current $ 526,184  $ 547,937  $ 499,002  $ 394,694  $ 355,509 
Combined loans receivable – principal, past due 59,937  59,212  54,487  19,034  21,668 
Combined loans receivable – principal 586,121  607,149  553,489  413,728  377,177 
Combined loans receivable – finance charges 33,251  34,428  32,771  26,156  24,796 
Combined loans receivable $ 619,372  $ 641,577  $ 586,260  $ 439,884  $ 401,973 
Combined Loan Loss Reserve(3):
Allowance for loan losses on loans receivable, company owned $ (80,537) $ (79,912) $ (76,188) $ (59,438) $ (49,909)
Liability for losses on loans receivable, guaranteed by company (1,972) (2,080) (1,571) (1,156) (1,421)
Combined loan loss reserve $ (82,509) $ (81,992) $ (77,759) $ (60,594) $ (51,330)
Combined loans receivable – principal, past due(3) $ 59,937  $ 59,212  $ 54,487  $ 19,034  $ 21,668 
Combined loans receivable – principal(3) $ 586,121  $ 607,149  $ 553,489  $ 413,728  $ 377,177 
Percentage past due(1) 10  % 10  % 10  % 5  % 6  %
Combined loan loss reserve as a percentage of combined loans receivable(3)(4) 13  % 13  % 13  % 14  % 13  %
Allowance for loan losses as a percentage of loans receivable – company owned 13  % 13  % 13  % 14  % 13  %
_________ 
(1)Represents loans originated by third-party lenders through the CSO programs, which are not included in our condensed consolidated financial statements.
(2)Represents finance charges earned by third-party lenders through the CSO programs, which are not included in our condensed consolidated financial statements.
(3)Non-GAAP measure.
(4)Combined loan loss reserve as a percentage of combined loans receivable is determined using period-end balances.

 



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COMPONENTS OF OUR RESULTS OF OPERATIONS
Revenues
Our revenues are composed of Rise finance charges and CSO fees (inclusive of finance charges attributable to the participation in Rise installment loans originated by FinWise Bank and CCB), cash advance fees attributable to the participation in Elastic lines of credit that we consolidate and marketing and licensing fees received from third-party lenders related to the Rise, Rise CSO and Elastic products. See “—Overview” above for further information on the structure of Elastic. Finance charge and fee revenues related to the Today Card credit card product were immaterial.
Cost of sales
Provision for loan losses.    Provision for loan losses consists of amounts charged against income during the period related to net charge-offs and the additional provision for loan losses needed to adjust the loan loss reserve to the appropriate amount at the end of each month based on our loan loss methodology.
Direct marketing costs.    Direct marketing costs consist of online marketing costs such as sponsored search and advertising on social networking sites, and other marketing costs such as purchased television and radio and direct mail print advertising. In addition, direct marketing cost includes affiliate costs paid to marketers in exchange for referrals of potential customers. All direct marketing costs are expensed as incurred.
Other cost of sales.    Other cost of sales includes data verification costs associated with the underwriting of potential customers and automated clearing house (“ACH”) transaction costs associated with customer loan funding and payments.
Operating expenses
Operating expenses consist of compensation and benefits, professional services, selling and marketing, occupancy and equipment, depreciation and amortization as well as other miscellaneous expenses.
Compensation and benefits.    Salaries and personnel-related costs, including benefits, bonuses and share-based compensation expense, comprise a majority of our operating expenses and these costs are driven by our number of employees.
Professional services.    These operating expenses include costs associated with legal, accounting and auditing, recruiting and outsourced customer support and collections.
Selling and marketing.    Selling and marketing costs include costs associated with the use of agencies that perform creative services and monitor and measure the performance of the various marketing channels. Selling and marketing costs also include the production costs associated with media advertisements that are expensed as incurred over the licensing or production period. These expenses do not include direct marketing costs incurred to acquire customers, which comprises CAC.
Occupancy and equipment.    Occupancy and equipment include rent expense on our leased facilities, as well as telephony and web hosting expenses.
Depreciation and amortization.    We capitalize all acquisitions of property and equipment of $500 or greater as well as certain software development costs. Costs incurred in the preliminary stages of software development are expensed. Costs incurred thereafter, including external direct costs of materials and services as well as payroll and payroll-related costs, are capitalized. Post-development costs are expensed. Depreciation is computed using the straight-line method over the estimated useful lives of the depreciable assets.




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Other expense
Net interest expense.    Net interest expense primarily includes the interest expense associated with the VPC Facility that funds the Rise installment loans, the EF SPV and EC SPV Facilities that fund Rise installment loans originated by FinWise Bank and CCB, respectively, and the ESPV Facility related to the Elastic lines of credit and related Elastic SPV entity. For the nine months ended September 30, 2019, amortization of the costs of and realized gains from the interest rate caps on the VPC and ESPV Facility are included within Net interest expense.
Non-operating loss.    Non-operating loss for the three and nine months ended September 30, 2020 included a contingent loss related to a legal matter.

INCOME STATEMENTS
The following table sets forth our condensed consolidated income statements data for each of the periods indicated:
  Three Months Ended September 30, Nine Months Ended September 30,
Condensed consolidated income statements data (dollars in thousands) 2020 2019 2020 2019
 
Revenues $ 94,164  $ 164,296  $ 374,622  $ 474,736 
Cost of sales:
Provision for loan losses 13,164  91,702  133,216  235,339 
Direct marketing costs 2,585  10,927  13,898  29,198 
Other cost of sales 1,672  2,447  5,949  7,233 
Total cost of sales 17,421  105,076  153,063  271,770 
Gross profit 76,743  59,220  221,559  202,966 
Operating expenses:
Compensation and benefits 23,921  23,289  64,239  67,428 
Professional services 8,236  7,552  24,633  23,416 
Selling and marketing 610  1,117  2,468  3,669 
Occupancy and equipment 4,717  3,887  14,196  11,722 
Depreciation and amortization 4,588  4,013  13,413  11,824 
Other 590  1,045  2,568  3,667 
Total operating expenses 42,662  40,903  121,517  121,726 
Operating income 34,081  18,317  100,042  81,240 
Other expense:
Net interest expense (11,575) (13,629) (37,408) (48,565)
Non-operating loss (1,007) (695) (6,692) (695)
Total other expense (12,582) (14,324) (44,100) (49,260)
Income from continuing operations before taxes 21,499  3,993  55,942  31,980 
Income tax expense 4,883  1,345  15,311  9,994 
Net income from continuing operations 16,616  2,648  40,631  21,986 
Net income (loss) from discontinued operations 4,465  2,116  (15,908) 1,908 
Net income $ 21,081  $ 4,764  $ 24,723  $ 23,894 



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  Three Months Ended September 30, Nine Months Ended September 30,
As a percentage of revenues 2020 2019 2020 2019
 
Cost of sales:
Provision for loan losses 14  % 56  % 36  % 50  %
Direct marketing costs 3  7  4  6 
Other cost of sales 2  1  2  2 
Total cost of sales 19  64  41  57 
Gross profit 81  36  59  43 
Operating expenses:
Compensation and benefits 25  14  17  14 
Professional services 9  5  7  5 
Selling and marketing 1  1  1  1 
Occupancy and equipment 5  2  4  2 
Depreciation and amortization 5  2  4  2 
Other 1  1  1  1 
Total operating expenses 45  25  32  26 
Operating income 36  11  27  17 
Other expense:
Net interest expense (12) (8) (10) (10)
Non-operating loss (1) —  (2) — 
Total other expense (13) (9) (12) (10)
Income from continuing operations before taxes 23  2  15  7 
Income tax expense 5  1  4  3 
Net income from continuing operations 18  2  11  5 
Net income (loss) from discontinued operations 5  1  (4) — 
Net income 22  % 3  % 7  % 5  %



63

Comparison of the three months ended September 30, 2020 and 2019
Revenues
 
  Three Months Ended September 30,  
  2020 2019 Period-to-period change
(Dollars in thousands) Amount Percentage of
revenues 		Amount Percentage of
revenues 		Amount Percentage
 
Finance charges $ 93,928  100  % $ 163,577  100  % $ (69,649) (43) %
Other 236  —  719  —  (483) (67)
Revenues $ 94,164  100  % $ 164,296  100  % $ (70,132) (43) %
Revenues decreased by $70.1 million, or 43%, from $164.3 million for the three months ended September 30, 2019 to $94.2 million for the three months ended September 30, 2020.
The tables below break out this change in revenue (including CSO fees and cash advance fees) by product:
 
  Three Months Ended September 30, 2020
(Dollars in thousands) Rise (1) Elastic (2) Total
Average combined loans receivable – principal(3) $ 225,041  $ 164,660  $ 389,701 
Effective APR 101  % 89  % 96  %
Finance charges $ 57,169  $ 36,759  $ 93,928 
Other 6  230  236 
Total revenue $ 57,175  $ 36,989  $ 94,164 
  Three Months Ended September 30, 2019
(Dollars in thousands) Rise (1) Elastic (2) Total
Average combined loans receivable – principal(3) $ 320,104  $ 256,470  $ 576,574 
Effective APR 126  % 96  % 113  %
Finance charges $ 101,403  $ 62,174  $ 163,577 
Other 294  425  719 
Total revenue $ 101,697  $ 62,599  $ 164,296 

 _________
(1) Includes loans originated by third-party lenders through the CSO programs, which are not included in our condensed consolidated financial statements.
(2) Includes immaterial balances related to the Today Card.
(3) Average combined loans receivable - principal is calculated using daily Combined loans receivable – principal balances. Not a financial measure prepared in accordance with US GAAP. See reconciliation table accompanying this release for a reconciliation of non-GAAP financial measures to the most directly comparable financial measure calculated in accordance with US GAAP.





64

Our average combined loans receivable - principal decreased $187 million for the three months ended September 30, 2020 as compared to the three months ended September 30, 2019. This decrease in average balance is due to reductions in loan origination volume during the quarter attributable to the impacts of the COVID-19 pandemic and accounted for approximately $45 million of the $70 million reduction in revenue for the period. Approximately $24 million of the reduction in revenue was due to a decrease in the effective APR driven by the lower effective interest rates earned on loans in a deferral status under the payment flexibility programs. For the three months ended September 30, 2020 and 2019, the average effective APR for the portfolio was 96% and 113%, respectively.

Cost of sales
 
  Three Months Ended September 30, Period-to-period
change
  2020 2019
(Dollars in thousands) Amount Percentage of
revenues 		Amount Percentage of
revenues 		Amount Percentage
Cost of sales:
Provision for loan losses $ 13,164  14  % $ 91,702  56  % $ (78,538) (86) %
Direct marketing costs 2,585  3  10,927  7  (8,342) (76)
Other cost of sales 1,672  2  2,447  1  (775) (32)
Total cost of sales $ 17,421  19  % $ 105,076  64  % $ (87,655) (83) %
Provision for loan losses.    Provision for loan losses decreased by $78.5 million, or 86%, from $91.7 million for the three months ended September 30, 2019 to $13.2 million for the three months ended September 30, 2020.
The tables below break out these changes by loan product:
  Three Months Ended September 30, 2020
(Dollars in thousands) Rise Elastic (1) Total
Combined loan loss reserve(2):
Beginning balance $ 40,614  $ 19,980  $ 60,594 
Net charge-offs (15,336) (7,092) (22,428)
Provision for loan losses 9,039  4,125  13,164 
Ending balance $ 34,317  $ 17,013  $ 51,330 
Combined loans receivable(2)(3) $ 234,277  $ 167,696  $ 401,973 
Combined loan loss reserve as a percentage of ending combined loans receivable 15  % 10  % 13  %
Net charge-offs as a percentage of revenues 27  % 19  % 24  %
Provision for loan losses as a percentage of revenues 16  % 11  % 14  %



65

Three Months Ended September 30, 2019
(Dollars in thousands) Rise Elastic (1) Total
Combined loan loss reserve(2):
Beginning balance $ 41,393  $ 26,479  $ 67,872 
Net charge-offs (49,179) (27,886) (77,065)
Provision for loan losses 58,290  33,412  91,702 
Ending balance $ 50,504  $ 32,005  $ 82,509 
Combined loans receivable(2)(3) $ 349,264  $ 270,108  $ 619,372 
Combined loan loss reserve as a percentage of ending combined loans receivable 14  % 12  % 13  %
Net charge-offs as a percentage of revenues 48  % 45  % 47  %
Provision for loan losses as a percentage of revenues 57  % 53  % 56  %

 _________

(1) Includes immaterial balances related to the Today Card.
(2) Not a financial measure prepared in accordance with US GAAP. See “—Non-GAAP Financial Measures” for more information and for a reconciliation to the most directly comparable financial measure calculated in accordance with US GAAP.
(3) Includes loans originated by third-party lenders through the CSO programs, which are not included in our condensed consolidated financial statements.
Total loan loss provision for the three months ended September 30, 2020 was 14% of revenues, which was below our targeted range of 45% to 55%, and lower than the 56% for the three months ended September 30, 2019. For the three months ended September 30, 2020, net charge-offs as a percentage of revenues decreased to 24% compared to 47% in the prior year period. We continue to monitor the loan portfolio during this economic crisis resulting from COVID-19 and continue to adjust our underwriting and credit policies to mitigate any potential negative impacts. In the near-term, we expect that net charge-offs as a percentage of revenues will continue to trend lower than our targeted range of 45% to 55% of revenue. In the long-term (post-COVID-19), we expect to continue to manage our total loan loss provision as a percentage of revenues to continue to remain within our targeted range.

The combined loan loss reserve as a percentage of combined loans receivable totaled 13% and 13% as of September 30, 2020 and September 30, 2019, respectively. The loan loss reserve percentage remains steady due to an increase at September 30, 2020 in loans outstanding with a payment deferral under the payment flexibility program offered in response to the COVID-19 pandemic. While we have seen positive payment performance once loans complete their payment deferral status, the loans in this population have a higher inherent risk of loss which is reflected in our loan loss reserve calculation. Past due loan balances at September 30, 2020 were 6% of total combined loans receivable - principal, down significantly from 10% from a year ago, also attributable to the COVID-19 loan deferral programs and reduced new loan origination volume.
Direct marketing costs.    Direct marketing costs decreased by $8.3 million, or 76%, from $10.9 million for the three months ended September 30, 2019 to $2.6 million for the three months ended September 30, 2020. Collectively, all products were impacted by the COVID-19 pandemic as we experienced reduced loan demand for new customers in addition to the effects of underwriting changes implemented in response to COVID-19 risks that limited the volume of new customer loan originations in the third quarter of 2020. For the three months ended September 30, 2020, the number of new customers acquired decreased to 8,489 from 53,356 during the three months ended September 30, 2019.

Other cost of sales.    Other cost of sales decreased by $0.8 million, or 32%, from $2.4 million for the three months ended September 30, 2019 to $1.7 million for the three months ended September 30, 2020 due to decreased data verification costs resulting from reduced loan origination volume.




66


Operating expenses
  Three Months Ended September 30, Period-to-period
change
  2020 2019
(Dollars in thousands) Amount Percentage of
revenues 		Amount Percentage of
revenues 		Amount Percentage
Operating expenses:
Compensation and benefits $ 23,921  25  % $ 23,289  14  % $ 632  3  %
Professional services 8,236  9  7,552  5  684  9 
Selling and marketing 610  1  1,117  1  (507) (45)
Occupancy and equipment 4,717  5  3,887  2  830  21 
Depreciation and amortization 4,588  5  4,013  2  575  14 
Other 590  1  1,045  1  (455) (44)
Total operating expenses $ 42,662  45  % $ 40,903  25  % $ 1,759  4  %

Compensation and benefits.    Compensation and benefits increased by $0.6 million, or 3%, from $23.3 million for the three months ended September 30, 2019 to $23.9 million for the three months ended September 30, 2020 primarily due to an increase from severance expense and incentive compensation expense incurred during the quarter partially offset by a reduction in staff implemented in July 2020.
Professional services.     Professional services increased by $0.7 million, or 9%, from $7.6 million for the three months ended September 30, 2019 to $8.2 million for the three months ended September 30, 2020 primarily due to increased legal expenses.
Selling and marketing.    Selling and marketing decreased by $0.5 million, or 45%, from $1.1 million for the three months ended September 30, 2019 to $0.6 million for the three months ended September 30, 2020 primarily due to decreased marketing agency fees.
Occupancy and equipment.    Occupancy and equipment increased by $0.8 million, or 21%, from $3.9 million for the three months ended September 30, 2019 to $4.7 million for the three months ended September 30, 2020 primarily due to increased web hosting and additional licenses expense.
Depreciation and amortization.     Depreciation and amortization increased by $0.6 million, or 14%, from $4.0 million for the three months ended September 30, 2019 to $4.6 million for the three months ended September 30, 2020 primarily due to increased purchases of property and equipment, including depreciation on internally developed software.
Other.    Other operating expenses decreased by $0.5 million, or 44%, from $1.0 million for the three months ended September 30, 2019 to $0.6 million for the three months ended September 30, 2020 primarily due to decreased travel, meals and entertainment expenses.





67

Net interest expense
  Three Months Ended September 30, Period-to-period
change
  2020 2019
(Dollars in thousands) Amount Percentage of
revenues 		Amount Percentage of
revenues 		Amount Percentage
Net interest expense $ 11,575  12  % $ 13,629  8  % $ (2,054) (15) %

Net interest expense decreased 15% during the three months ended September 30, 2020 as compared to the prior year period. Our average effective interest rate on notes payable outstanding has decreased from 10.7% for the three months ended September 30, 2019 to 10.4% for the three months ended September 30, 2020, resulting in a decrease in interest expense of approximately $0.3 million. In addition, the average balance of notes payable outstanding under the debt facilities in the third quarter of 2020 decreased $64.1 million from the third quarter of 2019 due to debt paydowns associated with a decrease in the loan portfolio due to COVID-19, resulting in a decrease in interest expense of approximately $1.7 million.
The following table shows the effective cost of funds of each debt facility for the period:
Three Months Ended September 30,
(Dollars in thousands) 2020 2019
VPC Facility
Average facility balance during the period
$ 147,550  $ 200,050 
Net interest expense
4,034  5,550 
Effective cost of funds
10.9  % 11.0  %
EF SPV Facility
Average facility balance during the period
$ 93,500  81,717 
Net interest expense
2,319  2,113 
Effective cost of funds
9.9  % 10.3  %
ESPV Facility
Average facility balance during the period
$ 199,500  $ 222,957 
Net interest expense
5,222  5,966 
Effective cost of funds
10.4  % 10.6  %
In January 2018, we entered into interest rate caps, which capped 3-month LIBOR at 1.75%, to mitigate the floating interest rate risk on $240 million of the US Term Notes included in the VPC Facility and on $216 million of the ESPV Facility. The interest rate caps matured on February 1, 2019. Additionally, effective February 1, 2019, the VPC Facility and ESPV Facility were amended and a new facility, the EF SPV Facility, was created. The amended facilities included reductions to the interest rates paid on our debt in addition to other changes. The reduction in interest rates was effective February 1, 2019 for the VPC Facility and the EF SPV Facility. The reduction in interest rates for the ESPV Facility was effective July 1, 2019. Per the terms of the February 1, 2019 amendments, we qualified for an additional 25 bps rate reduction on all three facilities effective January 1, 2020. This reduction does not apply to the 4th Tranche Term Note. In July 2020, we entered into a new facility, the EC SPV Facility. As of September 30, 2020, there have been no draws on the EC SPV Facility. See "—Liquidity and Capital Resources—Debt facilities" for more information.




68

Non-operating loss
In March 2020, we accrued a contingent loss related to a legal matter. For the three months ended September 30, 2020, we accrued an additional $1.0 million.

Income tax expense
  Three Months Ended September 30, Period-to-period
change
  2020 2019
(Dollars in thousands) Amount Percentage of
revenues 		Amount Percentage of
revenues 		Amount Percentage
Income tax expense $ 4,883  5  % $ 1,345  1  % $ 3,538  263  %

Our income tax expense increased $3.5 million, from $1.3 million for the three months ended September 30, 2019 to $4.9 million for the three months ended September 30, 2020. Our effective tax rates for continuing operations for the three months ended September 30, 2020 and 2019 were 22.7% and 33.7%, respectively. Our effective tax rates are different from the standard corporate federal income tax rate of 21% due to permanent non-deductible items, corporate state tax obligations in the states where we have lending activities and the impact of the Global Intangible Low-Taxed Income ("GILTI") provision of the Tax Cuts and Jobs Act of 2017 (the "Act"). Our cash effective tax rate was approximately 2.1% for the third quarter of 2020.
On March 27, 2020 the Coronavirus Aid, Relief, and Economic Security ("CARES Act") was signed into law. We have reviewed the tax relief provisions of the CARES Act regarding our eligibility and determined that the impact is likely to be insignificant with regard to our effective tax rate.  We are continuing to monitor and evaluate our eligibility of the CARES Act tax relief provisions to identify any portions that may become applicable in the future.
Net income from discontinued operations
Our net income from discontinued operations consists of a gain of $0.6 million due to the release of the parent guarantee accrual as ECIL repaid its outstanding debt to VPC during the quarter. Additionally, we revised our estimated tax basis in ECIL resulting in an additional $3.9 million income tax benefit recognized during the three months ended September 30, 2020.
Net income
  Three Months Ended September 30, Period-to-period
change
  2020 2019
(Dollars in thousands) Amount Percentage of
revenues 		Amount Percentage of
revenues 		Amount Percentage
Net income $ 21,081  22  % $ 4,764  3  % $ 16,317  343  %
We generated $21.1 million in net income for the three months ended September 30, 2020 due to improved operating income resulting in higher net income from continuing operations as compared to the three months ended September 30, 2019. Our net income from continuing operations of $16.6 million and our net income from discontinued operations of $4.5 million resulted in net income of $21.1 million, an increase of $16.3 million over our net income from the corresponding prior year period.



69

Comparison of the nine months ended September 30, 2020 and 2019
Revenues
 
  Nine Months Ended September 30,  
  2020 2019 Period-to-period change
(Dollars in thousands) Amount Percentage of
revenues 		Amount Percentage of
revenues 		Amount Percentage
 
Finance charges $ 373,810  100  % $ 472,894  100  % $ (99,084) (21) %
Other 812  —  1,842  —  (1,030) (56)
Revenues $ 374,622  100  % $ 474,736  100  % $ (100,114) (21) %
Revenues decreased by $100.1 million, or 21%, from $474.7 million for the nine months ended September 30, 2019 to $374.6 million for the nine months ended September 30, 2020. Both Rise and Elastic products had decreased total revenue in the first nine months of 2020 compared to the first nine months of 2019. The decrease in Other revenues is due to a decrease in marketing and licensing fees related to the Rise CSO programs as our CSO partners stopped originating Rise CSO loans in Ohio in April 2019 due to a state law change.
The tables below break out this change in revenue (including CSO fees and cash advance fees) by product:
 
  Nine Months Ended September 30, 2020
(Dollars in thousands) Rise (1) Elastic (2) Total
Average combined loans receivable – principal(3) $ 279,202  $ 200,324  $ 479,526 
Effective APR 113  % 92  % 104  %
Finance charges $ 236,207  $ 137,603  $ 373,810 
Other 114  698  812 
Total revenue $ 236,321  $ 138,301  $ 374,622 
  Nine Months Ended September 30, 2019
(Dollars in thousands) Rise (1) Elastic (2) Total
Average combined loans receivable – principal(3) $ 299,443  $ 255,482  $ 554,925 
Effective APR 128  % 97  % 114  %
Finance charges $ 286,670  $ 186,224  $ 472,894 
Other 1,034  808  1,842 
Total revenue $ 287,704  $ 187,032  $ 474,736 

 _________
(1) Includes loans originated by third-party lenders through the CSO programs, which are not included in our condensed consolidated financial statements.
(2) Includes immaterial balances related to the Today Card.
(3) Average combined loans receivable - principal is calculated using daily Combined loans receivable – principal balances. Not a financial measure prepared in accordance with US GAAP. See reconciliation table accompanying this release for a reconciliation of non-GAAP financial measures to the most directly comparable financial measure calculated in accordance with US GAAP.





70

Our average combined loans receivable principal decreased $75 million for the nine months ended September 30, 2020 as compared to the nine months ended September 30, 2019. This decrease in average balance is due to reductions in loan origination volume during the quarters attributable to the impacts of the COVID-19 pandemic and accounted for approximately $58 million of the reduction in revenue for the period. For the nine months ended September 30, 2020 and 2019, the average effective APR for the portfolio was 104% and 114%, respectively. This reduction in the effective APR is due to the lower effective interest rates earned on loans in a deferral status under the payment flexibility programs that were implemented in response to the COVID-19 pandemic coupled with reduced new customer loan originations which generally have a higher effective APR and accounted for approximately $42 million of the reduction in revenue for the period. We expect the APRs to increase as we begin to originate more loans to new customers in future periods.

Cost of sales
 
  Nine Months Ended September 30, Period-to-period
change
  2020 2019
(Dollars in thousands) Amount Percentage of
revenues 		Amount Percentage of
revenues 		Amount Percentage
Cost of sales:
Provision for loan losses $ 133,216  36  % $ 235,339  50  % $ (102,123) (43) %
Direct marketing costs 13,898  4  29,198  6  (15,300) (52)
Other cost of sales 5,949  2  7,233  2  (1,284) (18)
Total cost of sales $ 153,063  41  % $ 271,770  57  % $ (118,707) (44) %
Provision for loan losses.    Provision for loan losses decreased by $102.1 million, or 43%, from $235.3 million for the nine months ended September 30, 2019 to $133.2 million for the nine months ended September 30, 2020.
The tables below break out these changes by loan product:
  Nine Months Ended September 30, 2020
(Dollars in thousands) Rise Elastic (1) Total
Combined loan loss reserve(2):
Beginning balance $ 52,099  $ 29,893  $ 81,992 
Net charge-offs (108,397) (55,481) (163,878)
Provision for loan losses 90,615  42,601  133,216 
Ending balance $ 34,317  $ 17,013  $ 51,330 
Combined loans receivable(2)(3) $ 234,277  $ 167,696  $ 401,973 
Combined loan loss reserve as a percentage of ending combined loans receivable 15  % 10  % 13  %
Net charge-offs as a percentage of revenues 46  % 40  % 44  %
Provision for loan losses as a percentage of revenues 38  % 31  % 36  %



71

Nine Months Ended September 30, 2019
(Dollars in thousands) Rise Elastic (1) Total
Combined loan loss reserve(2):
Beginning balance $ 50,597  $ 36,050  $ 86,647 
Net charge-offs (147,190) (92,287) (239,477)
Provision for loan losses 147,097  88,242  235,339 
Ending balance $ 50,504  $ 32,005  $ 82,509 
Combined loans receivable(2)(3) $ 349,264  $ 270,108  $ 619,372 
Combined loan loss reserve as a percentage of ending combined loans receivable 14  % 12  % 13  %
Net charge-offs as a percentage of revenues 51  % 49  % 50  %
Provision for loan losses as a percentage of revenues 51  % 47  % 50  %

 _________

(1) Includes immaterial balances related to the Today Card.
(2) Not a financial measure prepared in accordance with US GAAP. See “—Non-GAAP Financial Measures” for more information and for a reconciliation to the most directly comparable financial measure calculated in accordance with US GAAP.
(3) Includes loans originated by third-party lenders through the CSO programs, which are not included in our condensed consolidated financial statements.
Total loan loss provision for the nine months ended September 30, 2020 was 36% of revenues, which was below our targeted range of 45% to 55%, and lower than the 50% for the nine months ended September 30, 2019. For the nine months ended September 30, 2020, net charge-offs as a percentage of revenues decreased to 44% compared to 50% in the prior year period. We continue to monitor the portfolio during this economic crisis resulting from COVID-19 and continue to adjust our underwriting and credit policies to mitigate any potential negative impacts. In the near-term, we expect that net charge-offs as a percentage of revenues will continue to trend lower than our targeted range of 45% to 55% of revenue. In the long-term (post-COVID-19), we expect to manage our total loan loss provision as a percentage of revenues to continue to remain within our targeted range.
The combined loan loss reserve as a percentage of combined loans receivable totaled 13% as of both September 30, 2020 and September 30, 2019, respectively. The loan loss reserve percentage remains steady due to an increase at September 30, 2020 in loans outstanding with a payment deferral under the payment flexibility program offered in response to the COVID-19 pandemic. While we have seen positive payment performance once loans complete their payment deferral status, the loans in this population have a higher inherent risk of loss which is reflected in our loan loss reserve calculation. Past due loan balances at September 30, 2020 were 6% of total combined loans receivable - principal, down significantly from 10% from a year ago, also attributable to the COVID-19 loan deferral programs and reduced new loan origination volume.
Direct marketing costs.    Direct marketing costs decreased by $15.3 million, or 52%, from $29.2 million for the nine months ended September 30, 2019 to $13.9 million for the nine months ended September 30, 2020. Collectively, all products were impacted by the COVID-19 pandemic as we experienced reduced new customer loan demand starting in March 2020. In addition, we implemented underwriting changes that limited the volume of new customer loan originations in response to COVID-19. For the nine months ended September 30, 2020, the number of new customers acquired decreased to 47,054 compared to 119,562 during the nine months ended September 30, 2019.

Other cost of sales.    Other cost of sales decreased by $1.3 million, or 18%, from $7.2 million for the nine months ended September 30, 2019 to $5.9 million for the nine months ended September 30, 2020 due to decreased data verification costs resulting from reduced loan origination volume.






72


Operating expenses
  Nine Months Ended September 30, Period-to-period
change
  2020 2019
(Dollars in thousands) Amount Percentage of
revenues 		Amount Percentage of
revenues 		Amount Percentage
Operating expenses:
Compensation and benefits $ 64,239  17  % $ 67,428  14  % $ (3,189) (5) %
Professional services 24,633  7  23,416  5  1,217  5 
Selling and marketing 2,468  1  3,669  1  (1,201) (33)
Occupancy and equipment 14,196  4  11,722  2  2,474  21 
Depreciation and amortization 13,413  4  11,824  2  1,589  13 
Other 2,568  1  3,667  1  (1,099) (30)
Total operating expenses $ 121,517  32  % $ 121,726  26  % $ (209) —  %
Compensation and benefits.    Compensation and benefits decreased by $3.2 million, or 5%, from $67.4 million for the nine months ended September 30, 2019 to $64.2 million for the nine months ended September 30, 2020 primarily due to a reduction in staff implemented in July 2020.
Professional services.     Professional services increased by $1.2 million, or 5%, from $23.4 million for the nine months ended September 30, 2019 to $24.6 million for the nine months ended September 30, 2020 primarily due to increased legal expenses.
Selling and marketing.    Selling and marketing decreased by $1.2 million, or 33%, from $3.7 million for the nine months ended September 30, 2019 to $2.5 million for the nine months ended September 30, 2020 primarily due to decreased marketing agency fees.
Occupancy and equipment.    Occupancy and equipment increased by $2.5 million, or 21%, from $11.7 million for the nine months ended September 30, 2019 to $14.2 million for the nine months ended September 30, 2020 primarily due to increased web hosting and additional licenses expense.
Depreciation and amortization.     Depreciation and amortization increased by $1.6 million, or 13%, from $11.8 million for the nine months ended September 30, 2019 to $13.4 million for the nine months ended September 30, 2020 primarily due to increased purchases of property and equipment, including depreciation on internally developed software.
Other.    Other operating expenses decreased by $1.1 million, or 30%, from $3.7 million for the nine months ended September 30, 2019 to $2.6 million for the nine months ended September 30, 2020 primarily due to decreased travel, meals and entertainment expenses.

Net interest expense
  Nine Months Ended September 30, Period-to-period
change
  2020 2019
(Dollars in thousands) Amount Percentage of
revenues 		Amount Percentage of
revenues 		Amount Percentage
Net interest expense $ 37,408  10  % $ 48,565  10  % $ (11,157) (23) %



73


Net interest expense decreased 23% during the nine months ended September 30, 2020 as compared to the prior year period. Our average effective interest rate on notes payable outstanding has decreased from 12.8% for the nine months ended September 30, 2019 to 10.5% for the nine months ended September 30, 2020, resulting in a decrease in interest expense of approximately $8.7 million. In addition, the average balance of notes payable outstanding under the debt facilities in the first nine months of 2020 decreased $32.2 million from the first nine months of 2019 due to debt paydowns associated with a decrease in the loan portfolio due to COVID-19 resulting in a decrease in interest expense of approximately $2.5 million.
The following table shows the effective cost of funds of each debt facility for the period:
Nine Months Ended September 30,
(Dollars in thousands) 2020 2019
VPC Facility
Average facility balance during the period
$ 167,043  $ 219,200 
Net interest expense
13,522  19,718 
Less: prepayment penalty associated with the early repayment on the 4th Tranche Term Note
—  (850)
Net interest expense, as adjusted
$ 13,522  $ 18,868 
Effective cost of funds
10.8  % 12.0  %
Effective cost of funds, as adjusted
10.8  % 11.5  %
EF SPV Facility
Average facility balance during the period
$ 100,863  62,436 
Net interest expense
7,619  4,926 
Effective cost of funds
10.1  % 10.6  %
ESPV Facility
Average facility balance during the period
$ 208,894  $ 227,395 
Net interest expense
16,267  23,920 
Effective cost of funds
10.4  % 14.1  %
In January 2018, we entered into interest rate caps, which capped 3-month LIBOR at 1.75%, to mitigate the floating interest rate risk on $240 million of the US Term Notes included in the VPC Facility and on $216 million of the ESPV Facility. The interest rate caps matured on February 1, 2019. Additionally, effective February 1, 2019, the VPC Facility and ESPV Facility were amended and a new facility, the EF SPV Facility, was created. The amended facilities included reductions to the interest rates paid on our debt in addition to other changes. The reduction in interest rates was effective February 1, 2019 for the VPC Facility and the EF SPV Facility. The reduction in interest rates for the ESPV Facility was effective July 1, 2019. Per the terms of the February 1, 2019 amendments, we qualified for an additional 25 bps rate reduction on all three facilities effective January 1, 2020. This reduction does not apply to the 4th Tranche Term Note. In July 2020, we entered into a new facility, the EC SPV Facility. As of September 30, 2020, there have been no draws on the EC SPV Facility. See "—Liquidity and Capital Resources—Debt facilities" for more information.




74

Non-operating loss
As of September 30, 2020, we had accrued a $6.7 million contingent loss related to a legal matter.

Income tax expense
  Nine Months Ended September 30, Period-to-period
change
  2020 2019
(Dollars in thousands) Amount Percentage of
revenues 		Amount Percentage of
revenues 		Amount Percentage
Income tax expense $ 15,311  4  % $ 9,994  3  % $ 5,317  53  %

Our income tax expense increased $5.3 million, from $10.0 million for the nine months ended September 30, 2019 to $15.3 million for the nine months ended September 30, 2020. Our effective tax rates from continuing operations for the nine months ended September 30, 2020 and 2019 were 27.4% and 31.3%, respectively. Our effective tax rates are different from the standard corporate federal income tax rate of 21% due to permanent non-deductible items, corporate state tax obligations in the states where we have lending activities and the impact of the GILTI provision of the Act. Our cash effective tax rate was approximately 2.1% for the first nine months of 2020.
On March 27, 2020 the CARES Act was signed into law.  We have reviewed the tax relief provisions of the CARES Act regarding our eligibility and determined that the impact is likely to be insignificant with regard to our effective tax rate.  We are continuing to monitor and evaluate our eligibility of the CARES Act tax relief provisions to identify any portions that may become applicable in the future.
Net loss from discontinued operations
Our loss from discontinued operations on our UK entity (ECIL) consists of an investment loss of $28.0 million, operating losses of $6.8 million for the first nine months of 2020, and a goodwill impairment loss of $9.3 million, partially offset by an income tax benefit of $28.1 million.
Net income
  Nine Months Ended September 30, Period-to-period
change
  2020 2019
(Dollars in thousands) Amount Percentage of
revenues 		Amount Percentage of
revenues 		Amount Percentage
Net income $ 24,723  7  % $ 23,894  5  % $ 829  3  %
Our net income of $24.7 million for the nine months ended September 30, 2020 was up $0.8 million from the nine months ended September 30, 2019 due to improved operating income. Net income from continuing operations for the nine months ended September 30, 2019 increased $18.6 million from the prior year period due to both increased operating income and lower interest expense, offset by the loss on the UK discontinued operations.



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LIQUIDITY AND CAPITAL RESOURCES
Despite the COVID-19 pandemic, we have a large cash position due to recent results and low loan demand. Cash balances approximated $225 million as of September 30, 2020. We intend to utilize our cash to pay down debt and repurchase common stock.
Stock Repurchase Program

On July 25, 2019, our Board of Directors authorized a share repurchase program providing for the repurchase of up to $10 million of our common stock through July 31, 2024. In January 2020, our Board of Directors authorized a $20 million increase to our existing common stock repurchase program providing for the repurchase of up to $30 million of our common stock through July 31, 2024. We repurchased $3.3 million of common shares under our $10 million authorization during the second half of 2019 and during the nine months ended September 30, 2020, an additional 6,092,259 shares were repurchased at a total cost of $14.7 million, inclusive of any transactional fees or commissions. The amended share repurchase program provides that up to a maximum aggregate amount of $25 million shares may be repurchased in any given fiscal year. Repurchases will be made in accordance with applicable securities laws from time-to-time in the open market and/or in privately negotiated transactions at our discretion, subject to market conditions and other factors. The share repurchase program does not require the purchase of any minimum number of shares and may be implemented, modified, suspended or discontinued in whole or in part at any time without further notice. Any repurchased shares will be available for use in connection with equity plans and for other corporate purposes.

Debt Facilities

VPC Facility
VPC Facility Term Notes
On January 30, 2014, we entered into the VPC Facility in order to fund our Rise product and provide working capital. The VPC Facility has been amended several times, with the most recent amendment effective July 31, 2020, to decrease the maximum total borrowing amount available and other terms of the VPC Facility.
The VPC Facility provided the following term notes as of September 30, 2020:
•A maximum borrowing amount of $200 million (amended as of July 31, 2020) used to fund the Rise loan portfolio (“US Term Note”). Prior to the February 1, 2019 amendment, the interest rate paid on this facility was a base rate (defined as the 3-month LIBOR, with a 1% floor) plus 11%. Upon the February 1, 2019 amendment date, the interest rate on the debt outstanding as of the amendment date was fixed through the January 1, 2024 maturity date at 10.23% (base rate of 2.73% plus 7.5%, which was reduced to 7.25% on January 1, 2020 as part of the amendment). At December 31, 2019, the weighted average base rate on the outstanding balance was 2.73% and the overall interest rate was 10.23%. At September 30, 2020, the weighted average base rate on the outstanding balance was 2.73% and the overall interest rate was 9.98%. All future borrowings under this facility will bear an interest rate at a base rate (defined as the greater of 3-month LIBOR, the five-year LIBOR swap rate or 1%) plus 7.25% at the borrowing date.



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•A maximum borrowing amount of $18 million used to fund working capital, and prior to February 1, 2019, at a base rate (defined as the 3-month LIBOR, with a 1% floor) plus 13% (“4th Tranche Term Note”). Upon the February 1, 2019 amendment date, the interest rate was fixed through the February 1, 2021 maturity date at a base rate of 2.73% plus 13%. The interest rate at both September 30, 2020 and December 31, 2019 was 15.73%. There was no change in the interest rate spread on this facility upon the February 1, 2019 amendment.
•Revolving feature providing the option to pay down up to 20% of the outstanding balance, excluding the 4th Tranche Term Note, once per year during the first quarter. Amounts paid down may be drawn again at a later date prior to maturity.
There are no principal payments due or scheduled under the VPC Facility until the respective maturity dates of the US Term Note and the 4th Tranche Term Note. The 4th Tranche Term Note matures on February 1, 2021 and we currently plan on paying off this $18 million note out of our existing cash balance on hand (we have approximately $225 million in cash as of September 30, 2020) prior to maturity in January 2021. Additionally, we plan on paying down approximately $25 million, or 20%, of the current outstanding debt on the VPC Facility under the revolving feature noted above during the first quarter of 2021. The remaining outstanding debt on the US Term Note matures on January 1, 2024.
All of our assets are pledged as collateral to secure the VPC Facility. The agreement contains customary financial covenants, including minimum cash and excess spread requirements, maximum roll rate and charge-off rate levels, maximum loan-to-value ratios and a minimum book value of equity requirement. We were in compliance with all covenants as of September 30, 2020.
Prior to our UK operations (ECIL) entering administration and being classified as a discontinued operation on June 29, 2020, the VPC Facility included a note used to fund the UK Sunny loan portfolio (“UK Term Note”). Upon deconsolidation of ECIL, this note was removed from the Company's Condensed Consolidated Balance Sheets and is presented within Liabilities from discontinued operations in all prior periods presented. Under the terms of the VPC Facility, Elevate Credit, Inc. (the "Parent") had provided a guarantee to VPC for the repayment of the debt of any subsidiary, which included the outstanding debt of ECIL. Upon deconsolidation of ECIL, we evaluated and recognized a $566 thousand liability at the Parent level related to the guarantee of ECIL's outstanding debt balance at June 30, 2020. The liability was recognized at the fair value of the guarantee obligation based on ECIL's cash flows and ability to repay the outstanding debt balance. ECIL completed repayment of the UK Term Note in the third quarter of 2020 and the liability has been released as of September 30, 2020.
EC SPV Facility

EC SPV Term Note

VPC entered into a new debt facility with EC SPV on July 31, 2020. The EC SPV Facility has a maximum borrowing amount of $100 million used to purchase Rise installment loan participations from a third-party bank, Capital Community Bank. As of September 30, 2020, there were no draws upon this facility. All future borrowings under this facility will bear an interest rate at a base rate (defined as the greater of 3-month LIBOR, the five-year LIBOR swap rate or 1%) plus 7.25% at the borrowing date. The EC SPV Term Note has a revolving feature providing the option to pay down up to 20% of the outstanding balance once per year during the first quarter. Amounts paid down may be drawn again at a later date prior to maturity.

The EC SPV Term Note matures on January 1, 2024. There are no principal payments due or scheduled until the maturity date. All of our assets and EC SPV are pledged as collateral to secure the EC SPV Facility. The EC SPV Facility contains certain covenants for us such as minimum cash requirements and a minimum book value of equity requirement. There are also certain covenants for the product portfolio underlying the facility including, among other things, excess spread requirements, maximum roll rate and charge-off rate levels, and maximum loan-to-value ratios.





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EF SPV Facility
EF SPV Term Note

The EF SPV Facility has a maximum borrowing amount of $250 million (amended as of July 31, 2020) to be used to purchase Rise installment loan participations from a third-party bank, FinWise Bank. Prior to execution of the agreement with VPC effective February 1, 2019, EF SPV was a borrower on the US Term Note under the VPC Facility and the interest rate paid on this facility was a base rate (defined as 3-month LIBOR, with a 1% floor) plus 11%. Upon the February 1, 2019 amendment date, $43 million was re-allocated into the EF SPV Facility and the interest rate on the debt outstanding as of the amendment date was fixed through the January 1, 2024 maturity date at 10.23% (base rate of 2.73% plus 7.5%, which was reduced to 7.25% on January 1, 2020 as part of the amendment). The weighted average base rate on the outstanding balance at December 31, 2019 was 2.49% and the overall interest rate was 9.99%. The weighted average base rate on the outstanding balance at September 30, 2020 was 2.45% and the overall interest rate was 9.70%. All future borrowings under this facility will bear an interest rate at a base rate (defined as the greater of 3-month LIBOR, the five-year LIBOR swap rate or 1%) plus 7.25% at the borrowing date. The EF SPV Term Note has a revolving feature providing the option to pay down up to 20% of the outstanding balance once per year during the first quarter. Amounts paid down may be drawn again at a later date prior to maturity. We plan on paying down approximately $19 million, or 20%, of the current outstanding debt balance on the EF SPV Facility under the revolving feature during the first quarter of 2021. The remaining outstanding debt on the EF SPV Term Note matures on January 1, 2024.

All of our assets are pledged as collateral to secure the EF SPV Term Note. The agreement contains customary financial covenants, including minimum cash and excess spread requirements, maximum roll rate and charge-off rate levels, maximum loan-to-value ratios and a minimum book value of equity requirement. We were in compliance with all covenants as of September 30, 2020.
ESPV Facility

ESPV Term Note

The ESPV Facility has a maximum borrowing amount of $350 million, to be used to purchase loan participations from a third-party lender. Prior to the February 1, 2019 amendment, the interest rate paid on this facility was a base rate (defined as the greater of the 3-month LIBOR rate or 1% per annum) plus 13% for the outstanding balance up to $50 million, plus 12% for the outstanding balance greater than $50 million up to $100 million, plus 13.5% for any amounts greater than $100 million up to $150 million, and plus 12.75% for borrowing amounts greater than $150 million. Upon the February 1, 2019 amendment date, the interest rate on the debt outstanding as of the amendment date was fixed at 15.48% (base rate of 2.73% plus 12.75%). Effective July 1, 2019, the interest rate on the debt outstanding as of the amendment date was set at 10.23% (base rate of 2.73% plus 7.50%, which was reduced to 7.25% on January 1, 2020 as part of the amendment). At December 31, 2019 the weighted average base rate on the outstanding balance was 2.72% and the overall interest rate was 10.22%. At September 30, 2020, the weighted average base rate on the outstanding balance was 2.72% and the overall interest rate was 9.97%. All future borrowings under this facility will bear an interest rate at a base rate (defined as the greater of 3-month LIBOR, the five-year LIBOR swap rate or 1%) plus 7.25% at the borrowing date. The ESPV Term Note has a revolving feature providing the option to pay down up to 20% of the outstanding balance once per year during the first quarter. Amounts paid down may be drawn again at a later date prior to maturity. We plan on paying down approximately $40 million, or 20%, of the current outstanding debt balance on the ESPV Facility under the revolving feature during the first quarter of 2021. The remaining outstanding debt on the ESPV Term Note matures on January 1, 2024.
All of our assets are pledged as collateral to secure the ESPV Facility. The agreement contains customary financial covenants, including minimum cash and excess spread requirements, maximum roll rate and charge-off rate levels, maximum loan-to-value ratios and a minimum book value of equity requirement. We were in compliance with all covenants as of September 30, 2020.



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Outstanding Notes Payable
The outstanding balances of notes payable as of September 30, 2020 and December 31, 2019 are as follows:
(Dollars in thousands) September 30,
2020 		December 31,
2019
US Term Note bearing interest at the base rate + 7.25% (2020) or + 7.5% (2019) $ 129,500  $ 182,000 
4th Tranche Term Note bearing interest at the base rate + 13% 18,050  18,050 
EF SPV Term Note bearing interest at the base rate + 7.25% (2020) or + 7.5% (2019) 93,500  102,000 
ESPV Term Note bearing interest at the base rate + 7.25% (2020) or + 7.5% (2019) 199,500  226,000 
Total
$ 440,550  $ 528,050 

The change in the facility balances includes the following:
•US Term Note - Paydowns of $27.5 million and $25 million in the first and second quarter of 2020, respectively;
•EF SPV Term note - Draw of $6.5 million in the first quarter of 2020 and a paydown of $15 million in the second quarter of 2020; and
•ESPV Term Note - Paydowns of $6.5 million and $20 million in the first and second quarter of 2020, respectively.

The following table presents the future debt maturities as of September 30, 2020:
Year (dollars in thousands) September 30, 2020
Remainder of 2020 $ — 
2021 18,050 
2022 — 
2023 — 
2024 422,500 
Thereafter
— 
Total
$ 440,550 




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Cash and cash equivalents, restricted cash, loans (net of allowance for loan losses), and cash flows

The following table summarizes our cash and cash equivalents, restricted cash, loans receivable, net and cash flows for the periods indicated:
  As of and for the nine months ended September 30,
(Dollars in thousands) 2020 2019
Cash and cash equivalents $ 224,259  $ 61,641 
Restricted cash 3,135  2,235 
Loans receivable, net 341,942  517,952 
Cash provided by (used in):
Operating activities - continuing operations 177,705  239,843 
Investing activities - continuing operations 79,154  (211,244)
Financing activities - continuing operations (102,915) (15,607)
Our cash and cash equivalents at September 30, 2020 were held primarily for working capital purposes. We may, from time to time, use excess cash and cash equivalents to fund our lending activities, paydown debt or repurchase stock. We do not enter into investments for trading or speculative purposes. Our policy is to invest any cash in excess of our immediate working capital requirements in investments designed to preserve the principal balance and provide liquidity. Accordingly, our excess cash is invested primarily in demand deposit accounts that are currently providing only a minimal return.
Net cash provided by operating activities
We generated $177.7 million in cash from our operating activities for the nine months ended September 30, 2020, primarily from revenues derived from our loan portfolio. This was down $62.1 million from the $239.8 million of cash provided by operating activities during the nine months ended September 30, 2019. Cash from operating activities was also impacted by a change in our short-term incentive compensation programs during 2019 which moved from a semi-annual bonus payment to an annual bonus payment which occurred in March 2020. We do not believe that there will be a significant impact to operating cash flows as a result of the deconsolidation of ECIL.
 
Net cash provided by (used in) investing activities
For the nine months ended September 30, 2020 and 2019, cash provided by (used in) investing activities was $79.2 million and $(211.2) million, respectively. The increase was primarily due to a decrease in net loans issued to customers related to reduced origination volume attributed to the COVID-19 pandemic. The following table summarizes cash used in investing activities for the periods indicated:
 
  Nine Months Ended September 30,
(Dollars in thousands) 2020 2019
Cash provided by (used in) investing activities - continuing operations
Net loans issued to consumers, less repayments $ 94,844  $ (191,833)
Participation premium paid (2,823) (4,530)
Purchases of property and equipment (12,867) (14,881)
$ 79,154  $ (211,244)



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Net cash used in financing activities
Cash flows from financing activities primarily include cash received from issuing notes payable, payments on notes payable, and activity related to repurchases of common stock (treasury stock). For the nine months ended September 30, 2020 and 2019, cash used in financing activities was $102.9 million and $15.6 million, respectively. The following table summarizes cash used in financing activities for the periods indicated:
 
  Nine Months Ended September 30,
(Dollars in thousands) 2020 2019
 
Cash used in financing activities - continuing operations
Proceeds from issuance of Notes payable, net $ 6,500  $ 49,000 
Payments on Notes payable (94,000) (60,000)
Debt issuance costs paid (253) (2,593)
Debt prepayment costs paid —  (850)
Purchases of treasury stock (14,739) (434)
Proceeds from issuance of stock, net 381  619 
Taxes paid related to net share settlement (804) (1,349)
$ (102,915) $ (15,607)
The increase in cash used in financing activities for the nine months ended September 30, 2020 versus the comparable period of 2019 was primarily due to increased payments made on notes payable during the first nine months of 2020 versus the first nine months of 2019, and the purchases of treasury stock which commenced in the third quarter of 2019.

Free Cash Flow
In addition to the above, we also review FCF when analyzing our cash flows from operations. We calculate FCF as cash flows from operating activities, adjusted for the principal loan net charge-offs and capital expenditures incurred during the period. While this is a non-GAAP measure, we believe it provides a useful presentation of cash flows derived from our core operating activities.
 
  Nine Months Ended September 30,
(Dollars in thousands) 2020 2019
Net cash provided by continuing operating activities $ 177,705  $ 239,843 
Adjustments:
Net charge-offs – combined principal loans (125,232) (187,866)
Capital expenditures (12,867) (14,881)
FCF $ 39,606  $ 37,096 

Our FCF was $39.6 million for the first nine months of 2020 compared to $37.1 million for the comparable prior year period. The increase in our FCF was the result of the decrease in net charge-offs - combined principal loans during the first nine months of 2020, partially offset by a decrease in net cash provided by operating activities.




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Operating and capital expenditure requirements
We are continuing to assess our minimum cash and liquidity requirements and implementing measures to ensure that our cash and liquidity position is maintained through the current economic cycle created by the COVID-19 pandemic. We believe that our existing cash balances, together with the available borrowing capacity under the VPC Facility, EC SPV Facility, EF SPV Facility and ESPV Facility, will be sufficient to meet our anticipated cash operating expense and capital expenditure requirements through at least the next 12 months. If our loan growth exceeds our expectations, our available cash balances may be insufficient to satisfy our liquidity requirements, and we may seek additional equity or debt financing. This additional capital may not be available on reasonable terms, or at all.
 
CONTRACTUAL OBLIGATIONS
Our principal commitments consist of obligations under our debt facilities and operating lease obligations. There have been no material changes to our contractual obligations since December 31, 2019.
OFF-BALANCE SHEET ARRANGEMENTS
We provide services in connection with installment loans originated by independent third-party lenders (“CSO lenders”) whereby we act as a credit service organization/credit access business on behalf of consumers in accordance with applicable state laws through our “CSO program.” The CSO program includes arranging loans with CSO lenders, assisting in the loan application, documentation and servicing processes. Under the CSO program, we guarantee the repayment of a customer’s loan to the CSO lenders as part of the credit services we provide to the customer. A customer who obtains a loan through the CSO program pays us a fee for the credit services, including the guaranty, and enters into a contract with the CSO lenders governing the credit services arrangement. We estimate a liability for losses associated with the guaranty provided to the CSO lenders using assumptions and methodologies similar to the allowance for loan losses, which we recognize for our consumer loans.
Prior to ECIL entering administration and being classified a discontinued operation by us on June 29, 2020, the VPC Facility included the UK Term Note. Upon deconsolidation of ECIL, this note was removed from our Condensed Consolidated Balance Sheets and is presented within Liabilities from discontinued operations in all prior periods presented. Under the terms of the VPC Facility, we had provided a guarantee to VPC for the repayment of the debt of any subsidiary, which included the outstanding debt of ECIL. We estimated a liability for losses of $566 thousand associated with the debt guarantee based on the fair value of the obligation at June 30, 2020. ECIL completed repayment of the UK Term Note in the third quarter of 2020 and the liability has been released as of September 30, 2020.

RECENT REGULATORY DEVELOPMENTS
On October 30, 2020, the Consumer Financial Protection Bureau (the "CFPB") announced its final debt collection rule (Regulation F) and corresponding Official Commentary. It is effective one year from the date that it is published in the Federal Register. The final Regulation F will apply to persons who are "debt collectors" as defined by the federal Fair Debt Collection Practices Act (the "FDCPA"). It will not apply to creditors collecting their own debts in their own names, like Elevate. Key provisions of Regulation F include: (i) a model safe harbor debt notice that is projected to be released in December 2020, (ii) a telephone contact frequency rule establishing that if the debt collector makes fewer than seven attempts in seven consecutive days there is a rebuttable presumption that the debt collector was not calling with such frequency as to harass the person being called and a position that the telephone contact frequency only applies to phone calls, not to all "communications" including permitted text messages and emails, (iii) rules around electronic communications, specifically text messages and emails, ensuring that the debt collector is not revealing the existence of the debt to a third-party, establishing a clear and conspicuous opt-out notice for consumers and ensuring that debt collectors comply with the federal ESIGN Act for required disclosures of electronic communications, (iv) prohibitions on communications via a work email or social media, unless the debt collector follows certain of the safe harbor provisions for electronic communications, (v) a "limited content message" rule establishing that communications and voicemails are allowed if they include (1) a business name for the debt collector (that does not indicate that the debt collector is in the debt collection business); (2) a request that the consumer reply to the message; (3) the name (or names) of one or more person(s) whom the consumer can contact to reply to the debt collector; and (4) a phone number (or numbers) that the consumer can use to reply to the debt collector (a limited-content message also may include: (1) a salutation; (2) the date and time of the message; (3) suggested dates and times for the consumer to reply to the message; and (4)



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a statement that if the consumer replies, the consumer may speak to any of the company's representatives or associates), (vi) a rule establishing limits on debt transfers, prohibiting transfers if the debt collector knows or should know that the debt has been paid or settled, or discharged in bankruptcy, and detailed requirements for handling consumer disputes and requests for original creditor information, and (vii) a requirement for retention of records and recorded telephone calls for three years following the debt collector's last collection activity on the debt, and that allows debt collectors to sell, transfer, or place for collection a debt that was discharged in bankruptcy if all that remains is a security interest, and as long as the debt collector notifies the transferee that the consumer's personal liability for the debt was discharged. Both time-barred debt rules and passive debt collection will be published in December 2020. We will take the necessary steps to ensure that the third-party debt collectors we work with are compliant with the final rule.
On October 10, 2019, AB 539 was signed by the Governor of California and chaptered by the California Secretary of State. The new law imposes an interest rate cap on all consumer loans made by Consumer Finance Lenders licensees between $2,500 and $10,000 of 36% plus the Federal Funds Rate. Effective January 1, 2020, Rise suspended making state licensed loans under the California Consumer Finance Lenders Law.
California Attorney General Xavier Becerra has submitted final proposed regulations to guide covered businesses' implementation of the California Consumer Privacy Act ("CCPA") which became operative on January 1, 2020 and began being enforced July 1, 2020. The CCPA imposes obligations on the handling of consumers' personal information by businesses, including required disclosures to consumers; consumer access, deletion, and opt-out rights; and an individual private right of action relating to a failure to maintain reasonable security procedures and practices leading to a security breach, as defined by the CCPA. The CCPA applies to Elevate with respect to information that is not collected for GLBA purposes (i.e., not in the context of the provision of financial services primarily used for personal, family, or household purposes) and is not related to personal information subject to California's Financial Information Privacy Act and personal consumer report information under the Fair Credit Reporting Act. Most recently, the California Privacy Rights Act ("CPRA") had received enough valid signatures to appear on the November 2020 ballot in California. If voters approve the initiative, the CPRA would significantly expand the CCPA, establish the California Privacy Protection Agency, remove the CCPA's thirty-day cure period, and impose a number of GDPR-styled obligations on businesses, among other requirements. If the CPRA becomes law, most of the substantive provisions of the CPRA would take effect January 1, 2023, with certain provisions going into effect as soon as late in 2020. Ongoing implementation of and changes to the CCPA and its related requirements could increase costs or otherwise adversely affect our business in the California market.
BASIS OF PRESENTATION AND CRITICAL ACCOUNTING POLICIES
Revenue recognition
We recognize consumer loan fees as revenues for each of the loan products we offer. Revenues on the Condensed Consolidated Income Statements include: finance charges, lines of credit fees, fees for services provided through CSO programs (“CSO fees”), and interest, as well as any other fees or charges permitted by applicable laws and pursuant to the agreement with the borrower. We also record revenues related to the sale of customer applications to unrelated third parties. These applications are sold with the customer’s consent in the event that we or our CSO lenders are unable to offer the customer a loan. Revenue is recognized at the time of the sale. Other revenues also include marketing and licensing fees received from the originating lender related to the Elastic product and Rise bank-originated loans and from CSO fees related to the Rise product. Revenues related to these fees are recognized when the service is performed.
We accrue finance charges on installment loans on a constant yield basis over their terms. We accrue and defer fixed charges such as CSO fees and lines of credit fees when they are assessed and recognize them to earnings as they are earned over the life of the loan. We accrue interest on credit cards based on the amount of the loan outstanding and their contractual interest rate. Credit card membership fees are amortized to revenue over the card membership period. Other credit card fees, such as late payment fees and returned payment fees, are accrued when assessed. We do not accrue finance charges and other fees on installment loans or lines of credit for which payment is greater than 60 days past due. Credit card interest charges are recognized based on the contractual provisions of the underlying arrangements and are not accrued for which payment is greater than 90 days past due. Installment loans and lines of credit are considered past due if a grace period has not been requested and a scheduled payment is not paid on its due date. Credit cards have a grace period of 25 days. Payments received on past due loans are applied against the loan and accrued interest balance to bring the loan current. Payments are generally first applied to accrued fees and interest, and then to the principal loan balance.



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In March 2020, the outbreak of the novel coronavirus (“COVID-19”) was recognized as a pandemic impacting businesses and economies. In accordance with federal and state guidelines, we expanded our payment flexibility programs for our customers, including payment deferrals. This program allows for a deferral of payments for an initial period of 60 days, up to a maximum of 180 days on a cumulative basis. The customer will return to their normal payment schedule after the end of the deferral period with the extension of their maturity date equivalent to the deferral period, not to exceed an additional 180 days. Per FASB guidance, the finance charges will continue to accrue at a lower effective interest rate over the expected term of the loan considering the deferral period provided (not to exceed an amount greater than the amount at which the borrower could settle the loan) or placed on non-accrual status.
Our business is affected by seasonality, which can cause significant changes in portfolio size and profit margins from quarter to quarter. Although this seasonality does not impact our policies for revenue recognition, it does generally impact our results of operations by potentially causing an increase in profit margins in the first quarter of the year and decreased margins in the second through fourth quarters.
Allowance and liability for estimated losses on consumer loans
We have adopted Financial Accounting Standards Board (“FASB”) guidance for disclosures about the credit quality of financing receivables and the allowance for loan losses (“allowance”). We maintain an allowance for loan losses for loans and interest receivable for loans not classified as TDRs at a level estimated to be adequate to absorb credit losses inherent in the outstanding loans receivable. We primarily utilize historical loss rates by product, stratified by delinquency ranges, to determine the allowance, but we also consider recent collection and delinquency trends, as well as macro-economic conditions that may affect portfolio losses. Additionally, due to the uncertainty of economic conditions and cash flow resources of our customers, the estimate of the allowance for loan losses is subject to change in the near-term and could significantly impact the condensed consolidated financial statements. If a loan is deemed to be uncollectible before it is fully reserved, it is charged-off at that time. For loans classified as TDRs, impairment is typically measured based on the present value of the expected future cash flows discounted at the original effective interest rate. As permitted by the SEC, we have elected to not adopt the Current Expected Credit Losses ("CECL") model which would require a broader range of reasonable and supportable information to inform credit loss estimates. See "- Recently Issued Accounting Pronouncements And JOBS Act Election" for more information.
We classify loans as either current or past due. An installment loan or line of credit customer in good standing may request a 16-day grace period when or before a payment becomes due and, if granted, the loan is considered current during the grace period. Credit card customers have a 25-day grace period for each payment. Installment loans and lines of credit are considered past due if a grace period has not been requested and a scheduled payment is not paid on its due date. Credit cards are considered past due if the grace period has passed and the scheduled payment has not been made. Increases in the allowance are created by recording a Provision for loan losses in the Condensed Consolidated Income Statements. Installment loans and lines of credit are charged off, which reduces the allowance, when they are over 60 days past due or earlier if deemed uncollectible. Credit cards are charged off, which reduces the allowance, when they are over 120 days past due or earlier if deemed uncollectible. Recoveries on losses previously charged to the allowance are credited to the allowance when collected.
Liability for estimated losses on credit service organization loans
Under the CSO program, we guarantee the repayment of a customer’s loan to the CSO lenders as part of the credit services we provide to the customer. A customer who obtains a loan through the CSO program pays us a fee for the credit services, including the guaranty, and enters into a contract with the CSO lenders governing the credit services arrangement. We estimate a liability for losses associated with the guaranty provided to the CSO lenders using assumptions and methodologies similar to the allowance for loan losses, which we recognize for our consumer loans.





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Goodwill
Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in each business combination. In accordance with Accounting Standards Codification ("ASC") 350-20-35, Goodwill—Subsequent Measurement, we perform a quantitative approach method impairment review of goodwill and intangible assets with an indefinite life annually at October 1 and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. Prior to 2019, we performed this test at October 31. We completed our annual test as of October 1, 2019 and determined that there was no evidence of impairment of goodwill or indefinite lived intangible assets.
As a result of the recent global economic impact and uncertainty due to COVID-19, we concluded a triggering event had occurred as of March 31, 2020, and accordingly, performed interim impairment testing on the goodwill balances of the previously consolidated UK reporting unit and the Elastic reporting unit. We performed a detailed qualitative and quantitative assessment of each reporting unit and concluded that the goodwill associated with the previously consolidated UK reporting unit was impaired as the fair value of the UK reporting unit was less than its carrying amount. While there was a decline in the fair value of the Elastic reporting unit, there was no impairment identified during the first quarter quantitative assessment. As of September 30, 2020, we performed another interim detailed qualitative and quantitative assessment of the Elastic reporting unit due to the continued negative economic impact of the COVID-19 pandemic. For the period from March 31, 2020 to September 30, 2020, the fair value of the Elastic reporting unit remained steady and there was no impairment identified.
Prior to the adoption of ASU No. 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment ("ASU 2017-04"), our impairment evaluation of goodwill was already based on comparing the fair value of our reporting units to their carrying value. The adoption of ASU 2017-04 as of January 1, 2020 had no impact on our evaluation procedures. The fair value of the reporting units is determined based on a weighted average of the income and market approaches. The income approach establishes fair value based on estimated future cash flows of the reporting units, discounted by an estimated weighted-average cost of capital developed using the capital asset pricing model, which reflects the overall level of inherent risk of the reporting units. The income approach uses our projections of financial performance for a six to nine-year period and includes assumptions about future revenues growth rates, operating margins and terminal values. The market approach establishes fair value by applying cash flow multiples to the reporting units’ operating performance. The multiples are derived from other publicly traded companies that are similar but not identical from an operational and economic standpoint.
Internal-use software development costs
We capitalize certain costs related to software developed for internal use, primarily associated with the ongoing development and enhancement of our technology platform. Costs incurred in the preliminary development and post-development stages are expensed. These costs are amortized on a straight-line basis over the estimated useful life of the related asset, generally three years.
Income taxes
Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences and benefits attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts that are more likely than not to be realized.
Relative to uncertain tax positions, we accrue for losses we believe are probable and can be reasonably estimated. The amount recognized is subject to estimate and management judgment with respect to the likely outcome of each uncertain tax position. The amount that is ultimately sustained for an individual uncertain tax position or for all uncertain tax positions in the aggregate could differ from the amount recognized. If the amounts recorded are not realized or if penalties and interest are incurred, we have elected to record all amounts within income tax expense.



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We have no recorded liabilities for US uncertain tax positions at September 30, 2020 and December 31, 2019. Tax periods from fiscal years 2014 to 2018 remain open and subject to examination for US federal and state tax purposes. As we had no operations nor had filed US federal tax returns prior to May 1, 2014, there are no other US federal or state tax years subject to examination.
On December 22, 2017, the Tax Cuts and Jobs Act (the "Act", or "Tax Reform") was enacted into law. The Act contains several changes to the US federal tax law including a reduction to the US federal corporate tax rate from 35% to 21%, an acceleration of the expensing of certain business assets, a reduction to the amount of executive pay that could qualify as a tax deduction, and the addition of a repatriation tax on any accumulated offshore earnings and profit.
On March 27, 2020 the Coronavirus Aid, Relief, and Economic Security ("CARES Act") was signed into law. We have reviewed the tax relief provisions of the CARES Act regarding our eligibility and determined that the impact is likely to be insignificant with regard to our effective tax rate.  We are continuing to monitor and evaluate our eligibility of the CARES Act tax relief provisions to identify any that may become applicable in the future.
Share-Based Compensation
In accordance with applicable accounting standards, all share-based compensation, consisting of stock options and restricted stock units (“RSUs") issued to employees is measured based on the grant-date fair value of the awards and recognized as compensation expense on a straight-line basis over the period during which the recipient is required to perform services in exchange for the award (the requisite service period). Starting July 2017, we also have an employee stock purchase plan (“ESPP”). The determination of fair value of share-based payment awards and ESPP purchase rights on the date of grant using option-pricing models is affected by our stock price as well as assumptions regarding a number of highly complex and subjective variables. These variables include, but are not limited to, the expected stock price volatility over the term of the awards, actual and projected employee stock option exercise activity, risk-free interest rate, expected dividends and expected term. We use the Black-Scholes-Merton Option Pricing Model to estimate the grant-date fair value of stock options. We also use an equity valuation model to estimate the grant-date fair value of RSUs. Additionally, the recognition of share-based compensation expense requires an estimation of the number of awards that will ultimately vest and the number of awards that will ultimately be forfeited.
Derivative Financial Instruments
On January 11, 2018, we and ESPV each entered into one interest rate cap transaction with a counterparty to mitigate the floating rate interest risk on a portion of the debt underlying the Rise and Elastic portfolios, respectively, which matured on February 1, 2019. The interest rate caps were designated as cash flow hedges against expected future cash flows attributable to future interest payments on debt facilities held by each entity. We initially reported the gains or losses related to the hedges as a component of Accumulated other comprehensive income in the Condensed Consolidated Balance Sheets in the period incurred and subsequently reclassified the interest rate caps’ gains or losses to interest expense when the hedged expenses were recorded. We excluded the change in the time value of the interest rate caps in our assessment of our hedge effectiveness. We present the cash flows from cash flow hedges in the same category in the Condensed Consolidated Statements of Cash Flows as the category for the cash flows from the hedged items. The interest rate caps do not contain any credit risk related contingent features. Our hedging program is not designed for trading or speculative purposes.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS AND JOBS ACT ELECTION
Under the Jumpstart Our Business Startups Act (the “JOBS Act”), we meet the definition of an emerging growth company. We have irrevocably elected to opt out of the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the JOBS Act.

Recently Adopted Accounting Standards
See Note 1 in the Notes to the Consolidated Condensed Financial Statements included in this report for a discussion of recent accounting pronouncements.



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Item 3. Quantitative and Qualitative Disclosures About Market Risk
Market risk is the risk of loss to future earnings, values or future cash flows that may result from changes in the price of a financial instrument. The value of a financial instrument may change as a result of changes in interest rates, exchange rates, commodity prices, equity prices and other market changes. We are exposed to market risk related to changes in interest rates. We do not use derivative financial instruments for speculative or trading purposes, although in the future we may continue to enter into interest rate hedging arrangements to manage the risks described below.
Interest rate sensitivity
Our cash and cash equivalents as of September 30, 2020 consisted of demand deposit accounts. Our primary exposure to market risk for our cash and cash equivalents is interest income sensitivity, which is affected by changes in the general level of interest rates. Given the currently low interest rates, we generate only a de minimis amount of interest income from these deposits.
All of our customer loan portfolios are fixed APR loans and not variable in nature. Additionally, given the high APRs associated with these loans, we do not believe there is any interest rate sensitivity associated with our customer loan portfolio.
Prior to February 1, 2019, our VPC Facility and ESPV Facility were variable rate in nature and tied to the 3-month LIBOR rate. In January 2018, we and ESPV each entered into interest rate caps, which cap 3-month LIBOR at 1.75%, to mitigate the floating interest rate risk on $240 million of the US Term Notes included in the VPC Facility and on $216 million of the ESPV Facility, respectively. These interest rate caps matured on February 1, 2019. On February 1, 2019, the VPC and ESPV Facilities were amended and a new EF SPV Facility was added. As part of these amendments, the base interest rate on existing debt outstanding on February 1, 2019 was locked to the 3-month LIBOR as of February 1, 2019 of 2.73% until note maturity. Any additional borrowings on the facilities (excluding the 4th Tranche Term Note) after February 1, 2019 bear a base interest rate (defined as the greater of 3-month LIBOR, the five-year LIBOR swap rate or 1%) plus the applicable spread at the borrowing date.
Any increase in the base interest rate on future borrowings will result in an increase in our net interest expense. The outstanding balance of our VPC Facility at September 30, 2020 was $147.6 million and the balance at December 31, 2019 was $200.1 million. The outstanding balance of our EF SPV Facility was $93.5 million at September 30, 2020 and the balance at December 31, 2019 was $102 million. The outstanding balance of our ESPV Facility was $199.5 million and $226.0 million at September 30, 2020 and December 31, 2019, respectively. Based on the average outstanding indebtedness through the nine months ended September 30, 2020, a 1% (100 basis points) increase in interest rates would have increased our interest expense by approximately $2.3 million for the period.





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Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a- 15(e) and 15d- 15(e) under the Exchange Act), as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of such date, our disclosure controls and procedures were effective.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting identified in management’s evaluation pursuant to Rules 13a-15(d) or 15d-15(d) of the Exchange Act during the period covered by this Quarterly Report on Form 10-Q that 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
In addition to the matters discussed below, in the ordinary course of business, from time to time, we have been and may be named as a defendant in various legal proceedings arising in connection with our business activities, including affordability claims related to the Sunny product, which business we operated through June 29, 2020. We may also be involved, from time to time, in reviews, investigations and proceedings (both formal and informal) by governmental agencies regarding our business (collectively, “regulatory matters”). We contest liability and/or the amount of damages as appropriate in each such pending matter. We do not anticipate that the ultimate liability, if any, arising out of any such pending matter will have a material effect on our financial condition, results of operations or cash flows.
In December 2019, the TFI bankruptcy plan was confirmed, and any potential future claims from the TFI Creditors' Committee were assigned to the Think Finance Litigation Trust (“TFLT”). On August 14, 2020, the TFLT filed an adversary proceeding against Elevate in the United States Bankruptcy Court for the Northern District of Texas, alleging certain avoidance claims related to Elevate’s spin-off from TFI under the Bankruptcy Code and TUFTA. If it were determined that the spin-off constituted a fraudulent conveyance or that there were other avoidance actions associated with the spin-off, then the spin-off could be deemed void and there could be a number of different remedies imposed against Elevate, including without limitation, the requirement that Elevate has to pay money damages in an amount equal to the difference between the consideration received by TFI in the spin-off and the fair market value of Elevate's net assets at the time of the spin-off. While the TFLT values this claim at $246 million, the Company believes that it has valid defenses to the claim and intends to vigorously defend itself against this claim. For these reasons, Elevate has not recognized a contingent loss reserve as of September 30, 2020, as the Company does not think that it is probable that it will incur a loss based on the nature of these claims. While Elevate can provide no assurances as to the duration or potential outcome of such proceeding, in the event that there is a settlement and Elevate is unable to pay any amount resulting from such settlement, it could have a material adverse effect on Elevate’s financial condition, or, if there is no settlement and Elevate is deemed to ultimately be liable in this matter, Elevate could be obligated to file for bankruptcy. See Item 1A. "Risk Factors—Risks Related to Our Association with TFI—The Think Finance Litigation Trust in the TFI Bankruptcy, as well as third parties, may seek to hold us responsible for liabilities of TFI due to the Spin-Off" of this Quarterly Report on Form 10-Q.
Additionally, a class action lawsuit against Elevate was filed on August 17, 2020 in the Eastern District of Virginia alleging violations of usurious interest and aiding and abetting various racketeering activities related to the operations of TFI prior to and immediately after the 2014 spin-off. Elevate views this lawsuit as without merit and intends to vigorously defend its position.
On June 5, 2020, the District of Columbia (the "District"), sued Elevate in the Superior Court of the District of Columbia alleging that Elevate may have violated the District's Consumer Protection Procedures Act and the District of Columbia's Municipal Regulations in connection with loans issued by banks in the District of Columbia. This action has been removed to federal court, but the District filed a motion to remand to the Superior Court on August 3, 2020. Elevate disagrees that it has violated the above referenced laws and regulations and it intends to vigorously defend its position.
In addition, on January 27, 2020, Sopheary Sanh filed a class action complaint in the Western District Court in the state of Washington against Rise Credit Service of Texas, LLC d/b/a Rise, Opportunity Financial, LLC and Applied Data Finance, LLC d/b/a Personify Financial. The Plaintiff in the case claims that Rise and Personify Financial have violated Washington’s Consumer Protection Act by engaging in unfair or deceptive practices, and seeks class certification, injunctive relief to prevent solicitation of consumers to apply for loans, monetary damages and other appropriate relief, including an award of costs, pre- and post-judgment interest, and attorneys' fees. The lawsuit was removed to federal court and on May 11, 2020, Elevate filed a motion to dismiss and awaits a ruling on that motion. Elevate disagrees that it has violated the above referenced law and it intends to vigorously defend its position.




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On March 3, 2020, Heather Crawford filed a lawsuit in the Superior Court of the state of California, county of Los Angeles, against Elevate Credit, Inc., Elevate Credit Service, LLC and Rise Credit of California, LLC alleging unconscionable interest rates on Rise loans and seeking damages and public injunctive relief. Elevate filed a motion to compel arbitration, and Ms. Crawford dismissed the lawsuit without prejudice to refile in arbitration. Ms. Crawford has not filed any arbitration demand as of the date of this Quarterly Report on Form 10-Q. In addition, on April 6, 2020, Danh Le made a demand for arbitration against Elevate Credit, Inc., Elevate Credit Service, LLC and Rise Credit of California, LLC similarly alleging unconscionable interest rates on Rise loans and seeking damages and public injunctive relief. Mr. Le later filed an amended demand, dropping his request for public injunctive relief but adding alleged violations of the Electronic Fund Transfer Act and the Rosenthal Fair Debt Collection Practices Act. The Plaintiffs in these actions assert claims under the “unlawful,” “unfair,” and “fraudulent” prongs of the California Unfair Competition Law (“UCL”) and for breach of contract and civil conspiracy. The “unlawful” UCL claims are premised upon alleged violations of (a) the California Financing Law’s prohibition on unconscionable loans and (b) the California False Advertising Law. Elevate disagrees that it has violated the above referenced laws and it intends to vigorously defend its position.



Item 1A. Risk Factors

There have been no material changes from the Risk Factors described in Item 1A. “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, except as described in our Quarterly Reports on Form 10-Q for the periods ended March 31, 2020 and June 30, 2020, respectively, and as set forth below.

RISKS RELATED TO OUR BUSINESS AND INDUSTRY
The ongoing COVID-19 pandemic and various policies being implemented to prevent its spread could have a material adverse effect on our business, financial condition and results of operations.
In March 2020, the outbreak of the novel Coronavirus Disease 2019 ("COVID-19") was recognized as a pandemic by the World Health Organization. The spread of COVID-19 has created a global public health crisis that has resulted in unprecedented uncertainty, volatility and disruption in financial markets and in governmental, commercial and consumer activity in the US and globally, including the markets that we serve. Governmental responses to the pandemic have included orders closing businesses not deemed essential and directing individuals to restrict their movements, observe social distancing and shelter in place. These actions, together with responses to the pandemic by businesses and individuals, have resulted in rapid decreases in commercial and consumer activity, temporary closures of many businesses that have led to a loss of revenues and a rapid increase in unemployment, material decreases in oil and gas prices and in business valuations, disrupted global supply chains, market downturns and volatility, changes in consumer behavior related to pandemic fears, related emergency response legislation and an expectation that Federal Reserve policy will maintain a low interest rate environment for the foreseeable future.
The pandemic and measures implemented by government authorities to try to contain the virus can affect our business directly as well as affect our employees, customers and business partners. While we have successfully transitioned our employee base to a remote working environment, normal operations may be difficult to maintain, and our resources may be constrained. Similarly, the operations of our business partners and third-party service providers may be constrained, reducing the effectiveness of collections, credit bureau reporting, marketing or other aspects of our operations. The effects of the outbreak on us could be exacerbated given that the outbreak, and preventative measures taken to contain or mitigate the outbreak, may increasingly have significant negative effects on consumer discretionary spending and demand for and repayment of our products. Further, many of our customers are experiencing layoffs, slowdowns, work stoppages and other changes in work and financial circumstances, diminishing their demand for loans, eligibility for loans and ability to repay loans. In addition, efforts we take in response to the pandemic, such as expanding our payment flexibility programs, or to mitigate the effects of the pandemic, such as implementing underwriting changes to address credit risk associated with originations during the economic crisis created by the COVID-19 pandemic, may not be successful or may have other effects on our business and results of operations such as, for example, decreasing the average APR of our products or reducing loan origination applications and loan origination volume.



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While we are closely monitoring the impacts of the COVID-19 pandemic across our business, including the resulting uncertainties around customer demand, credit quality, levels of liquidity and our ongoing compliance with debt covenants, there can be no assurance that the COVID-19 outbreak and its effects will not materially adversely affect our financial position, and our access to capital, to the extent we need additional liquidity, may be constrained due to disruptions in the capital markets and financial markets.
Government efforts to mitigate the economic effects of the pandemic, including new legislation, may affect our business and operations. On March 27, 2020, Congress passed, and the President signed into law, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), which provides wide-ranging financial and regulatory relief related to the ongoing COVID-19 public health crisis. In addition to other regulatory relief measures, the CARES Act requires lenders that furnish credit information to report to credit bureaus that consumers are current on their loans if consumers have sought relief from their lenders due to the pandemic. The pandemic has also sparked a litany of new orders, rules, laws, guidance related to creditor collections and third-party debt collection activities. These rules generally prohibit certain collections activities for a specified time. It is anticipated that these restrictions, as well as certain options for borrowers to defer payments offered by us and the banks we work with, will impact collections for the at least the next several months.
The effects of the pandemic may also cause various government authorities to slow or suspend enacting new legislation or rulemaking and may hinder the ability of such authorities to provide regulatory guidance in a timely manner. For example, the California legislature, like most other states, has had their session cut short due to the coronavirus pandemic and, as a result, it is unclear when and whether California will continue with its pursuit of proposed revisions to the California Department of Business Oversight to, among other things, rename the Department of Business Oversight to be the Department of Financial Protection and Innovation and also empower the Department to extend state oversight to financial services providers not currently subject to state supervision but also facilitate innovation.
Given the dynamic nature of the COVID-19 outbreak, the extent to which it will impact our business will depend on future developments that are highly uncertain and cannot be predicted at this time, including, but not limited to, the duration and spread of the pandemic, its severity, the actions taken and restrictions imposed by state and federal governments to contain the virus, treat its impact or provide stimulus to the economy and when and to what extent normal economic and operating activities can resume. Due to the speed with which the situation is developing, we are not able at this time to estimate the effect of these factors on our business, but any adverse impact on our business, results of operations, financial condition and cash flows could be material.
We operate in an industry that is rapidly evolving, and we may be unsuccessful in response to these changes.
Although our management team has many years of experience in the non-prime lending industry, we operate in an evolving industry that may not develop as expected. Assessing the future prospects of our business is challenging in light of both known and unknown risks and difficulties we may encounter. Growth prospects in non-prime lending can be affected by a wide variety of factors including:
•Competition from other online and traditional lenders and credit card providers;
•Regulatory limitations that impact the non-prime lending products we can offer and the markets we can serve;
•An evolving regulatory and legislative landscape;
•Access to important marketing channels such as:
◦Direct mail and electronic offers;
◦TV and mass media;
◦Direct marketing, including search engine marketing; and
◦Strategic partnerships with affiliates;
•Changes in consumer behavior;
•Access to adequate financing;
•Increasingly sophisticated fraudulent borrowing and online theft;



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•Challenges with new products and new markets;
•Dependence on our proprietary technology infrastructure and security systems;
•Dependence on our personnel and certain third parties with whom we do business;
•Risk to our business if our systems are hacked or otherwise compromised;
•Evolving industry standards;
•Recruiting and retention of qualified personnel necessary to operate our business and
•Fluctuations in the credit markets and demand for credit.
We may not be able to successfully address these factors, which could negatively impact our growth, harm our business and cause our operating results to be worse than expected.
Our most recent annual revenue declined from the prior year and we may not be able to grow in the future.
Our revenue growth rate has fluctuated over the past few years and it is possible that, in the future, even if our revenues continue to increase, our rate of revenue growth could decline, either because of external factors affecting the growth of our business or because we are not able to scale effectively as we grow. If we cannot manage our growth effectively, it could have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.
We have a history of losses and may not maintain or achieve consistent profitability in the future.
We incurred net income (losses) of $32.2 million, $12.5 million and $(6.9) million for the years ended December 31, 2019, 2018 and 2017, respectively. As of December 31, 2019, we had an accumulated deficit of $34.3 million. We will need to generate and sustain increased revenues in future periods in order to become and remain profitable, and, even if we do, we may not be able to maintain or increase our level of profitability.
The consumer lending industry continues to be subject to new laws and regulations in many jurisdictions that could restrict the consumer lending products and services we offer, impose additional compliance costs on us, render our current operations unprofitable or even prohibit our current operations.
State and federal governments regulatory bodies may seek to impose new laws, direct contractual arrangements with us, regulatory restrictions or licensing requirements that affect the products or services we offer, the terms on which we may offer them, and the disclosure, compliance and reporting obligations we must fulfill in connection with our lending business. They may also interpret or enforce existing requirements in new ways that could restrict our ability to continue our current methods of operation or to expand operations, impose significant additional compliance costs and may have a negative effect on our business, prospects, results of operations, financial condition or cash flows. In some cases, these measures could even directly prohibit some or all of our current business activities in certain jurisdictions or render them unprofitable or impractical to continue.
In recent years, consumer loans, and in particular the category commonly referred to as “payday loans,” have come under increased regulatory scrutiny that has resulted in increasingly restrictive regulations and legislation that makes offering consumer loans in certain states in the US less profitable or unattractive. On July 7, 2020, the CFPB issued a final rule concerning small dollar lending in order to maintain consumer access to credit and competition in the marketplace. The final rule rescinds the mandatory underwriting provisions of the previously proposed 2017 rule after re-evaluating the legal and evidentiary bases for these provisions and finding them to be insufficient. The final rule does not rescind or alter the payments provisions of the 2017 rule. See "—The CFPB issued a final ruling on July 7, 2020 affecting the consumer lending industry, and this or subsequent new rules and regulations, if they are finalized, may impact our consumer lending business" for more information.




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In order to serve our non-prime customers profitably we need to sufficiently price the risk of the transaction into the annual percentage rate (“APR”) of our loans. If individual states or the federal government impose rate caps lower than those at which we can operate our current business profitably or otherwise impose stricter limits on non-prime lending, we would need to exit such states or dramatically reduce our rate of growth by limiting our products to customers with higher creditworthiness. On April 30, 2019, Senator Dick Durbin reintroduced a bill that would create a national interest rate cap of 36% on consumer loans. S. 1230 "Protecting Consumers from Unreasonable Credit Rates Act of 2019" is co-sponsored by Senators Jeff Merkley, Sheldon Whitehouse, and Richard Blumenthal. Previous versions have been proposed in 2009, 2013, 2015 and 2017, but the bill has never made it to the House or Senate floor. The current bill is still pending in the Senate. In November 2019, Rep. Jesús "Chuy" García, Rep. Glenn Grothman and ten others introduced H.R. 5050, the Veterans and Consumers Fair Credit Act (VCFCA). This bill would create a national rate cap of 36% on all consumer loans from all lenders. Senators Jeff Merkley, Jack Reed, Sherrod Brown, Chris Van Hollen and others introduced S. 2833, a companion bill to H.R. 5050, in the Senate at the same time. The House Financial Services Committee held hearings on H.R. 5050 in February 2020 and it is possible that the bill will get more attention later this year. Most recently, on July 10, 2020, Rep. Jesús "Chuy" García attempted unsuccessfully to amend the Truth-in-Lending Act ("TILA") by expanding the 36% national rate cap on loans to active duty service members and their families. On January 1, 2020, California lending law changed to impose a rate cap of 36% plus the Federal Funds Rate set by the Federal Reserve Board for all consumer-purpose installment loans, including personal loans, car loans, and auto title loans, as well as open-end lines of credit made under its California Financing Law where the amount of credit is $2,500 or more but less than $10,000. Rise loans originated by Elevate were impacted by this law and as a result, on January 1, 2020, no new Rise loans have been originated in California.
Furthermore, legislative or regulatory actions may be influenced by negative perceptions of us and our industry, even if such negative perceptions are inaccurate, attributable to conduct by third parties not affiliated with us (such as other industry members) or attributable to matters not specific to our industry.
Any of these or other legislative or regulatory actions that affect our consumer loan business at the national, state and local level could, if enacted or interpreted differently, have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows and prohibit or directly or indirectly impair our ability to continue current operations.
Regulators and payment processors are scrutinizing certain online lenders’ access to the Automated Clearing House system to disburse and collect loan proceeds and repayments, and any interruption or limitation on our ability to access this critical system would materially adversely affect our business.
When making loans in the US, we typically use the Automated Clearing House (“ACH”) system to deposit loan proceeds into our customers’ bank accounts. This includes loans that we originate as well as Elastic loans originated by Republic Bank & Trust Company (“Republic Bank”), Rise loans made through the credit services organization (“CSO”) programs and Rise loans originated by FinWise Bank ("FinWise") or CCB. These products also depend on the ACH system to collect amounts due by withdrawing funds from customers’ bank accounts when the customer has provided authorization to do so. ACH transactions are processed by banks, and if these banks cease to provide ACH processing services or are not allowed to do so, we would have to materially alter, or possibly discontinue, some or all of our business if alternative ACH processors or other payment mechanisms are not available.
It has been reported that actions, referred to as Operation Choke Point, by the US Department of Justice (the “Justice Department”) the Federal Deposit Insurance Corporation (the “FDIC”) and certain state regulators appear to be intended to discourage banks and ACH payment processors from providing access to the ACH system for certain lenders that they believe are operating illegally, cutting off their access to the ACH system to either debit or credit customer accounts (or both).




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In the past, this heightened regulatory scrutiny by the Justice Department, the FDIC and other regulators has caused some banks and ACH payment processors to cease doing business with consumer lenders who are operating legally, without regard to whether those lenders are complying with applicable laws, simply to avoid the risk of heightened scrutiny or even litigation. These actions have reduced the number of banks and payment processors who provide ACH payment processing services and could conceivably make it increasingly difficult to find banking partners and payment processors in the future and/or lead to significantly increased costs for these services. If we are unable to maintain access to needed services on favorable terms, we would have to materially alter, or possibly discontinue, some or all of our business if alternative processors are not available. In response to Operation Choke Point, H.R. 2706 was introduced in the House to halt future similar actions. The bill passed out of the House on December 11, 2017 but did not progress. H.R. 189 was introduced in the House on January 3, 2019 to address Operation Choke Point. It is unknown if this newly reintroduced legislation will progress further. On May 22, 2019, the FDIC issued a letter in connection with litigation acknowledging that certain of its "employees acted in a manner inconsistent with FDIC policies with respect to payday lenders" in what has been generically described as "Operation Choke Point," and that this conduct created misperceptions about the FDIC's policies.
If we lost access to the ACH system because our payment processor was unable or unwilling to access the ACH system on our behalf, we would experience a significant reduction in customer loan payments. Although we would notify consumers that they would need to make their loan payments via physical check, debit card or other method of payment a large number of customers would likely go into default because they are expecting automated payment processing. Similarly, if regulatory changes limited our access to the ACH system or reduced the number of times ACH transactions could be re-presented, we would experience higher losses.
If the information provided by customers or other third parties to us is incomplete, incorrect, or fraudulent, we may misjudge a customer’s qualification to receive a loan, and any inability to effectively identify, manage, monitor and mitigate fraud risk on a large scale could cause us to incur substantial losses, and our operating results, brand and reputation could be harmed.
For the loans we originate through Rise, our growth is largely predicated on effective loan underwriting resulting in acceptable customer profitability. This is equally important for the Rise loans in Texas and the Rise loans and Elastic lines of credit originated by unaffiliated third parties. See “Management’s discussion and analysis of financial condition and results of operations—Components of Our Results of Operations—Revenues.” Lending decisions by such originating lenders are made using our proprietary credit and fraud scoring models, which we license to them. Lending decisions are based partly on information provided by loan applicants and partly on information provided by consumer reporting agencies, such as TransUnion, Experian or Equifax and other third-party data providers. Data provided by third-party sources is a significant component of the decision methodology, and this data may contain inaccuracies. To the extent that applicants provide inaccurate or unverifiable information or data from third-party providers is incomplete or inaccurate, the credit score delivered by our proprietary scoring methodology may not accurately reflect the associated risk. Additionally, a credit score assigned to a borrower may not reflect that borrower's actual creditworthiness because the credit score may be based on outdated, incomplete or inaccurate consumer reporting data, and we do not verify the information obtained from the borrower's credit report. Additionally, there is a risk that, following the date of the credit report that we obtain and review, a borrower may have:
•become past due in the payment of an outstanding obligation;
•defaulted on a pre-existing debt obligation;
•taken on additional debt; or
•sustained other adverse financial events.
Our resources, technologies and fraud prevention tools, which are used to originate or facilitate the origination of loans or lines of credit, as applicable, under Rise, Elastic and Today Card, may be insufficient to accurately detect and prevent fraud. Inaccurate analysis of credit data that could result from false loan application information could harm our reputation, business and operating results.



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In addition, our proprietary credit and fraud scoring models use identity and fraud checks analyzing data provided by external databases to authenticate each customer’s identity. The level of our fraud charge-offs and results of operations could be materially adversely affected if fraudulent activity were to significantly increase. Online lenders are particularly subject to fraud because of the lack of face-to-face interactions and document review. If applicants assume false identities to defraud the Company or consumers simply have no intent to repay the money they have borrowed, the related portfolio of loans will exhibit higher loan losses. We have in the past and may in the future incur substantial losses and our business operations could be disrupted if we or the originating lenders are unable to effectively identify, manage, monitor and mitigate fraud risk using our proprietary credit and fraud scoring models.
Since fraud is often perpetrated by increasingly sophisticated individuals and “rings” of criminals, it is important for us to continue to update and improve the fraud detection and prevention capabilities of our proprietary credit and fraud scoring models. If these efforts are unsuccessful then credit quality and customer profitability will erode. If credit and/or fraud losses increased significantly due to inadequacies in underwriting or new fraud trends, new customer originations may need to be reduced until credit and fraud losses returned to target levels, and business could contract.
It may be difficult or impossible to recoup funds underlying loans made in connection with inaccurate statements, omissions of fact or fraud. Loan losses are currently the largest cost as a percentage of revenues across each of Rise, Elastic, and Today Card. If credit or fraud losses were to rise, this would significantly reduce our profitability. High profile fraudulent activity could also lead to regulatory intervention, negatively impact our operating results, brand and reputation and require us, and the originating lenders, to take steps to reduce fraud risk, which could increase our costs.
Any of the above risks could have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.
Because of the non-prime nature of our customers, we have historically experienced a high rate of net charge-offs as a percentage of revenues, and our ability to price appropriately in response to this and other factors is essential. We rely on our proprietary credit and fraud scoring models in the forecasting of loss rates. If we are unable to effectively forecast loss rates, it may negatively impact our operating results.
Our net charge-offs as a percentage of revenues for the years ended December 31, 2019 and 2018 were 52% and 54%, respectively. Because of the non-prime nature of our customers, it is essential that our products are appropriately priced, taking this and all other relevant factors into account. In making a decision whether to extend credit to prospective customers, and the terms on which we or the originating lenders are willing to provide credit, including the price, we and the originating lenders rely heavily on our proprietary credit and fraud scoring models, which comprise an empirically derived suite of statistical models built using third-party data, data from customers and our credit experience gained through monitoring the performance of customers over time. Our proprietary credit and fraud scoring models are based on previous historical experience. Typically, however, our models will become less effective over time and need to be rebuilt regularly to perform optimally. This is particularly true in the context of our preapproved direct mail campaigns. If we are unable to rebuild our proprietary credit and fraud scoring models, or if they do not perform up to target standards the products will experience increasing defaults or higher customer acquisition costs. In addition, any upgrades or planned improvements to our technology and credit models may not be implemented on the timeline that we expect or may not drive improvements in credit quality for our products as anticipated, which may have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.
If our proprietary credit and fraud scoring models fail to adequately predict the creditworthiness of customers, or if they fail to assess prospective customers’ financial ability to repay their loans, or any or all of the other components of the credit decision process described herein fails, higher than forecasted losses may result. Furthermore, if we are unable to access the third-party data used in our proprietary credit and fraud scoring models, or access to such data is limited, the ability to accurately evaluate potential customers using our proprietary credit and fraud scoring models will be compromised. As a result, we may be unable to effectively predict probable credit losses inherent in the resulting loan portfolio, and we, and the originating lender, may consequently experience higher defaults or customer acquisition costs, which could have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.




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Additionally, if we make errors in the development and validation of any of the models or tools used to underwrite loans, such loans may result in higher delinquencies and losses. Moreover, if future performance of customer loans differs from past experience, which experience has informed the development of our proprietary credit and fraud scoring models, delinquency rates and losses could increase.
If our proprietary credit and fraud scoring models were unable to effectively price credit to the risk of the customer, lower margins would result. Either our losses would be higher than anticipated due to “underpricing” products or customers may refuse to accept the loan if products are perceived as “overpriced.” Additionally, an inability to effectively forecast loss rates could also inhibit our ability to borrow from our debt facilities, which could further hinder our growth and have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.
We depend in part on debt financing to finance most of the loans we originate. Our business could be adversely affected by a lack of sufficient debt financing at acceptable prices or disruptions in the credit markets, which could reduce our access to credit.
We depend in part on debt financing to support the growth of Rise. However, we cannot guarantee that financing will continue to be available beyond the current maturity date of our debt facilities, on reasonable terms or at all. Presently our debt financing for Rise primarily comes from a single source, Victory Park Management, LLC (“VPC”), an affiliate of Victory Park Capital. If VPC became unwilling or unable to provide debt financing to us at prices acceptable to us, we would need to secure additional debt financing or potentially reduce loan originations. The availability of these financing sources depends on many factors, some of which are outside of our control.
We may also experience the occurrence of events of default or breaches of financial or performance covenants under our debt agreements, which are currently secured by all our assets. Any such occurrence or breach could result in the reduction or termination of our access to institutional funding or increase our cost of funding. Certain of these covenants are tied to our customer default rates, which may be significantly affected by factors, such as economic downturns or general economic conditions beyond our control and beyond the control of individual customers. In particular, loss rates on customer loans may increase due to factors such as prevailing interest rates, the rate of unemployment, the level of consumer and business confidence, commercial real estate values, energy prices, changes in consumer and business spending, the number of personal bankruptcies, disruptions in the credit markets and other factors. Increases in the cost of capital would reduce our net profit margins.
The loan portfolio for Elastic, which is originated by a third-party lender, gets funding as a result of the purchase of a participation interest in the loans it originates from Elastic SPV, Ltd. (“Elastic SPV”), a Cayman Islands entity that purchases such participations. Elastic SPV has a loan facility with VPC for its funding, for which we provide credit support, and we have entered into a credit default protection agreement with Elastic SPV that provides protection for loan losses. Similarly, the loan portfolios for the Rise loans originated by FinWise and CCB get funding as a result of the purchase of a participation interest in the loans they originate from EF SPV, Ltd. (“EF SPV”) and EC SPV, Ltd. ("EC SPV"), both Cayman Islands entities that purchase such participations. Both EF SPV and EC SPV have a loan facility with VPC for their funding, for which we provide credit support, and we have entered into credit default protection agreements with both EF SPV and EC SPV that provide protection for loan losses. Any voluntary or involuntary halt to this existing program could result in the originating lender halting further loan originations until an additional financing partner could be identified.
In the event of a sudden or unexpected shortage of funds in the banking system, we cannot be sure that we will be able to maintain necessary levels of funding without incurring high funding costs, a reduction in the term of funding instruments or the liquidation of certain assets. If our cost of borrowing goes up, our net interest expense could increase, and if we were to be unable to arrange new or alternative methods of financing on favorable terms, we may have to curtail our origination of loans or recommend that the originating lenders curtail their origination of credit, all of which could have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.



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The interest rates we charge to our customers and pay to our lenders could each be affected by a variety of factors, including access to capital based on our business performance and the volume of loans we make to our customers. These interest rates may also be affected by a change over time in the mix of the types of products we sell to our customers and a shift among our channels of customer acquisition. Our VPC funding facilities are variable rate in nature and tied to a base rate of the greater of the 3-month LIBOR rate, the five-year LIBOR swap rate or 1% at the borrowing date. Thus, any increase in the 3-month LIBOR rate could result in an increase in our net interest expense. Effective February 1, 2019, certain of the funding facilities were amended. The amended facilities included reductions to the interest rates paid on our debt in addition to other changes. Interest rate changes may also adversely affect our business forecasts and expectations and are highly sensitive to many macroeconomic factors beyond our control, such as inflation, recession, the state of the credit markets, changes in market interest rates, global economic disruptions, unemployment and the fiscal and monetary policies of the federal government and its agencies. Regulatory or legislative changes may reduce our ability to charge our current rates in all states and products. Also, competitive threats may cause us to reduce our rates. This would reduce profit margins unless there was a commensurate reduction in losses. Any material reduction in our interest rate spread could have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows. In the event that the spread between the rate at which we lend to our customers and the rate at which we borrow from our lenders decreases, our financial results and operating performance will be harmed.
In the future, we may seek to access the debt capital markets to obtain capital to finance growth. However, our future access to the debt capital markets could be restricted due to a variety of factors, including a deterioration of our earnings, cash flows, balance sheet quality, or overall business or industry prospects, adverse regulatory changes, a disruption to or deterioration in the state of the capital markets or a negative bias toward our industry by market participants. Disruptions and volatility in the capital markets could also cause banks and other credit providers to restrict availability of new credit. Due to the negative bias toward our industry, commercial banks and other lenders have restricted access to available credit to participants in our industry, and we may have more limited access to commercial bank lending than other businesses. Our ability to obtain additional financing in the future will depend in part upon prevailing capital market conditions, and a potential disruption in the capital markets may adversely affect our efforts to arrange additional financing on terms that are satisfactory to us, if at all. If adequate funds are not available, or are not available on acceptable terms, we may not have sufficient liquidity to fund our operations, make future investments, take advantage of acquisitions or other opportunities, or respond to competitive challenges and this, in turn, could adversely affect our ability to advance our strategic plans. Additionally, if the capital and credit markets experience volatility, and the availability of funds is limited, third parties with whom we do business may incur increased costs or business disruption and this could adversely affect our business relationships with such third parties, which could have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.
Any decrease in our access to preapproved marketing lists from credit bureaus or other developments impacting our use of direct mail marketing could adversely affect our ability to grow our business.
We market Rise and provide marketing services to the originating lender in connection with Elastic, Today Card, and Rise bank-originated loans. Direct mailings and electronic offers of preapproved loans and Today Cards to potential loan customers comprise significant marketing channels for both the loans we originate and credit card product we offer, as well as those loans originated by third-party lenders. We estimate that approximately 65% and 92% of new Rise and Elastic loan customers, respectively, in the year ended December 31, 2019 obtained loans as a result of receiving such preapproved offers. The Today Card is expected to expand its direct mailing activities in the future. Our marketing techniques identify candidates for preapproved loan or credit card mailings in part through the use of preapproved marketing lists purchased from credit bureaus. If access to such preapproved marketing lists were lost or limited due to regulatory changes prohibiting credit bureaus from sharing such information or for other reasons, our growth could be significantly adversely affected. If the cost of obtaining such lists increases significantly, it could substantially increase customer acquisition costs and decrease profitability.
Similarly, federal or state regulators or legislators could limit access to these preapproved marketing lists with the same effect.
In addition, preapproved direct mailings may become a less effective marketing tool due to over-penetration of direct mailing-lists. Any of these developments could have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.



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We rely in part on relationships with marketing affiliates to identify potential customers for our loans. These relationships are generally non-exclusive and subject to termination, and the growth of our customer base could be adversely affected if any of our marketing affiliate relationships are terminated or the number of referrals we receive from marketing affiliates is reduced.
We rely on strategic marketing affiliate relationships with certain companies for referrals of some of the customers to whom we issue loans, and our growth depends in part on the growth of these referrals. In the year ended December 31, 2019, loans issued to Rise and Elastic customers referred to us by our strategic partners constituted 17% and 7% of total respective new customer loans. Many of our marketing affiliate relationships do not contain exclusivity provisions that would prevent such marketing affiliates from providing customer referrals to competing companies. In addition, the agreements governing these partnerships, generally, contain termination provisions, including provisions that in certain circumstances would allow our partners to terminate if convenient, that, if exercised, would terminate our relationship with these partners. These agreements also contain no requirement that a marketing affiliate refer us any minimum number of customers. There can be no assurance that these marketing affiliates will not terminate our relationship with them or continue referring business to us in the future, and a termination of any of these relationships or reduction in customer referrals to us could have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.
Our success and future growth depend significantly on our successful marketing efforts, and if such efforts are not successful, our business and financial results may be harmed.
We intend to continue to dedicate significant resources to marketing efforts. Our ability to attract qualified borrowers depends in large part on the success of these marketing efforts and the success of the marketing channels we use to promote our products. Our marketing channels include social media and the press, online affiliations, search engine optimization, search engine marketing, offline partnerships, preapproved direct mailings and television advertising. If any of our current marketing channels become less effective, if we are unable to continue to use any of these channels, if the cost of using these channels were to significantly increase or if we are not successful in generating new channels, we may not be able to attract new borrowers in a cost-effective manner or convert potential borrowers into active borrowers. If we are unable to recover our marketing costs through increases in website traffic and in the number of loans made by visitors to product websites, or if we discontinue our broad marketing campaigns, it could have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.
We are dependent on third parties to support several key aspects of our business, and the failure of such parties to continue to provide services to us in the current manner and at the current rates would adversely affect our revenues and results of operations.
The Elastic line of credit product, which is originated by a third-party lender and contributed approximately 39% of our revenues for the year ended December 31, 2019, and the portions of the Rise installment loan product that we offer through CSO programs, which contributed approximately 6% of our revenues for the year ended December 31, 2019, and the Rise loans originated by a third-party lender, which contributed approximately 16% of our revenues for the year ended December 31, 2019, depend in part on the willingness and ability of unaffiliated third-party lenders to make loans to customers. Additionally, as described above, our business, including our Elastic loans and Rise loans made through the CSO programs and Rise loans originated by a third-party lender, depends on the ACH system, and ACH transactions are processed by third-party banks. See “—Regulators and payment processors are scrutinizing certain online lenders’ access to the Automated Clearing House system to disburse and collect loan proceeds and repayments, and any interruption or limitation on our ability to access this critical system would materially adversely affect our business.” We also utilize many other third parties to provide services to facilitate lending, loan underwriting, payment processing, customer service, collections and recoveries, as well as to support and maintain certain of our communication systems and information systems, and we may need to expand our relationships with third parties, or develop relationships with new third parties, to support any new product offerings that we may pursue.
The loss of the relationship with any of these third-party lenders and service providers, an inability to replace them or develop new relationships, or the failure of any of these third parties to provide its products or services, to maintain its quality and consistency or to have the ability to provide its products and services, could disrupt our operations, cause us to terminate product offerings or delay or discontinue new product offerings, result in lost customers and substantially decrease the revenues and earnings of our business. Our revenues and earnings could also be adversely affected if any of those third-party providers make material changes to the products or services that we rely on or increase the price of their products or services.



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Elevate uses third parties for the majority of its collections and recovery activities. If those parties were unable or unwilling to provide those services for Elevate products, we would experience higher defaults until those functions could be outsourced to an alternative service provider or until we could bring those functions in-house and adequately staff and train internally.
Any of these events could result in a loss of revenues and could have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.
The profitability of our bank-originated products could be adversely affected by policy or pricing decisions made by the originating lenders.
We do not originate and do not ultimately control the pricing or functionality of Elastic lines of credit originated by Republic Bank, Rise loans originated by FinWise Bank and CCB, and the Today Card originated by CCB (collectively the "Bank-Originated Products" and the "Bank Partners" or the "Banks"). Generally, a "Bank" is an entity that is chartered under federal or state law to accept deposits and/or make loans. Each Bank Partner has licensed our technology and underwriting services and makes all key decisions regarding the marketing, underwriting, product features and pricing. We generate revenues from these products through marketing and technology licensing fees paid by the Bank Partners, and through credit default protection agreements with certain Bank Partners. If the Bank Partners were to change their pricing, underwriting or marketing of the Bank-Originated Products in a way that decreases revenues or increases losses, then the profitability of each loan, line of credit or credit card issued could be reduced. Although this would not reduce the revenues that we receive for marketing and technology licensing services, it would reduce the revenues that we receive from our credit default protection agreements with the Bank Partners.
Any of the above changes could have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.
Our ability to continue to provide Bank-Originated Products could be adversely affected by a degradation in our relationships with our Bank Partners.
The structure of the Bank-Originated Products exposes us to risks associated with being reliant on the Bank Partners as the originating lenders and credit card issuers. If our relationships with the Banks were to degrade, or if any of the Banks were to terminate the various agreements associated with the Bank Products, we may not be able to find another suitable originating lender or credit card issuer and new arrangements, if any, may result in significantly increased costs to us. Any inability to find another originating lender or credit card issuer would adversely affect our ability to continue to provide the Bank-Originated Products which in turn could have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.
Decreased demand for non-prime loans as a result of increased savings or income could result in a loss of revenues or decline in profitability if we are unable to successfully adapt to such changes.
The demand for non-prime loan products in the markets we serve could decline due to a variety of factors, such as regulatory restrictions that reduce customer access to particular products, the availability of competing or alternative products or changes in customers’ financial conditions, particularly increases in income or savings. For instance, an increase in state or federal minimum wage requirements, or a decrease in individual income tax rates, could decrease demand for non-prime loans. Additionally, a change in focus from borrowing to saving (such as has happened in some countries) would reduce demand. Should we fail to adapt to a significant change in our customers’ demand for, or access to, our products, our revenues could decrease significantly. Even if we make adaptations or introduce new products to fulfill customer demand, customers may resist or may reject products whose adaptations make them less attractive or less available. Such decreased demand could have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.




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A decline in economic conditions could result in decreased demand for our loans or cause our customers’ default rates to increase, harming our operating results.
Uncertainty and negative trends in general economic conditions in the US and abroad, including significant tightening of credit markets and a general decline in the value of real property, historically have created a difficult environment for companies in the lending industry. Many factors, including factors that are beyond our control, may impact our consolidated results of operations or financial condition or affect our borrowers’ willingness or capacity to make payments on their loans. These factors include: unemployment levels, housing markets, rising living expenses, energy costs and interest rates, as well as major medical expenses, divorce or death that affect our borrowers. If the US economy experiences a downturn, or if we become affected by other events beyond our control, we may experience a significant reduction in revenues, earnings and cash flows, difficulties accessing capital and a deterioration in the value of our investments.
Credit quality is driven by the ability and willingness of customers to make their loan payments. If customers face rising unemployment or reduced wages, defaults may increase. Similarly, if customers experience rising living expenses (for instance due to rising gas, energy, or food costs) they may be unable to make loan payments. An economic slowdown could also result in a decreased number of loans being made to customers due to higher unemployment or an increase in loan defaults in our loan products. The underwriting standards used for our products may need to be tightened in response to such conditions, which could reduce loan balances, and collecting defaulted loans could become more difficult, which could lead to an increase in loan losses. If a customer defaults on a loan, the loan enters a collections process where, including as a result of contractual agreements with the originating lenders, our systems and collections teams initiate contact with the customer for payments owed. If a loan is subsequently charged off, the loan is generally sold to a third-party collection agency and the resulting proceeds from such sales comprise only a small fraction of the remaining amount payable on the loan.
There can be no assurance that economic conditions will remain favorable for our business or that demand for loans or default rates by customers will remain at current levels. Reduced demand for loans would negatively impact our growth and revenues, while increased default rates by customers may inhibit our access to capital, hinder the growth of the loan portfolio attributable to our products and negatively impact our profitability. Either such result could have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.
We are operating in a highly competitive environment and face increasing competition from a variety of traditional and new lending institutions, including other online lending companies. This competition could adversely affect our business, prospects, results of operations, financial condition or cash flows.
We have many competitors. Our principal competitors are consumer loan companies, CSOs, online lenders, credit card companies, consumer finance companies, pawnshops and other financial institutions that offer similar financial services. Other financial institutions or other businesses that do not now offer products or services directed toward our traditional customer base could begin doing so. Significant increases in the number and size of competitors for our business could result in a decrease in the number of loans that we fund, resulting in lower levels of revenues and earnings in these categories. Many of these competitors are larger than us, have significantly more resources and greater brand recognition than we do, and may be able to attract customers more effectively than we do.
Competitors of our business may operate, or begin to operate, under business models less focused on legal and regulatory compliance, which could put us at a competitive disadvantage. Additionally, negative perceptions about these models could cause legislators or regulators to pursue additional industry restrictions that could affect the business model under which we operate. To the extent that these models gain acceptance among consumers, small businesses and investors or face less onerous regulatory restrictions than we do, we may be unable to replicate their business practices or otherwise compete with them effectively, which could cause demand for the products we currently offer to decline substantially.
When new competitors seek to enter one of our markets, or when existing market participants seek to increase their market share, they sometimes undercut the pricing and/or credit terms prevalent in that market, which could adversely affect our market share or ability to exploit new market opportunities. Elevate products compete at least partly based on rate comparison with other credit products used by non-prime consumers. However, non-prime consumers by definition have a higher propensity for default and as a result need to be charged higher rates of interest to generate adequate profit margins. If existing competitors significantly reduced their rates or lower-priced competitors enter the market and offer credit to customers at lower rates, the pricing and credit terms we or the originating lenders offer could deteriorate if we or the originating lenders act to meet these competitive challenges. Any such action may result in lower customer acquisition volumes and higher costs per new customer.



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We may be unable to compete successfully against any or all of our current or future competitors. As a result, our products could lose market share and our revenues could decline, thereby affecting our ability to generate sufficient cash flow to service our indebtedness and fund our operations. Any such changes in our competition could have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.
Customer complaints or negative public perception of our business could result in a decline in our customer growth and our business could suffer.
Our reputation is very important to attracting new customers to our platform as well as securing repeat lending to existing customers. While we believe that we have a good reputation and that we provide customers with a superior experience, there can be no assurance that we will be able to continue to maintain a good relationship with customers or avoid negative publicity.
In recent years, consumer advocacy groups and some media reports have advocated governmental action to prohibit or place severe restrictions on non-bank consumer loans and bank originated loans for the nonprime consumer. Such consumer advocacy groups and media reports generally focus on the annual percentage rate for this type of consumer loan, which is compared unfavorably to the interest typically charged by banks to consumers with top-tier credit histories. The finance charges assessed by us, the originating lenders and others in the industry can attract media publicity about the industry and be perceived as controversial. If the negative characterization of the types of loans we offer, including those originated through third-party lenders, becomes increasingly accepted by consumers, demand for any or all of our consumer loan products could significantly decrease, which could materially affect our business, prospects, results of operations, financial condition or cash flows. Additionally, if the negative characterization of these types of loans is accepted by legislators and regulators, we could become subject to more restrictive laws and regulations applicable to consumer loan products that could have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.
Our business depends on the uninterrupted operation of our systems and business functions, including our information technology and other business systems, as well as the ability of such systems to support compliance with applicable legal and regulatory requirements.
Our business is highly dependent upon customers’ ability to access our website and the ability of our employees and those of the originating lenders, as well as third-party service providers, to perform, in an efficient and uninterrupted fashion, necessary business functions, such as internet support, call center activities and processing and servicing of loans. Problems with the technology platform running our systems, or a shut-down of or inability to access the facilities in which our internet operations and other technology infrastructure are based, such as a power outage, a failure of one or more of our information technology, telecommunications or other systems, cyber-attacks on, or sustained or repeated disruptions of, such systems could significantly impair our ability to perform such functions on a timely basis and could result in a deterioration of our ability to underwrite, approve and process loans, provide customer service, perform collections activities, or perform other necessary business functions. Any such interruption could reduce new customer acquisition and negatively impact growth, which would have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.
In addition, our systems and those of third parties on whom we rely must consistently be capable of compliance with applicable legal and regulatory requirements and timely modification to comply with new or amended requirements. Any systems problems going forward could have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.




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We are subject to cybersecurity risks and security breaches and may incur increasing costs in an effort to minimize those risks and to respond to cyber incidents, and we may experience harm to our reputation and liability exposure from security breaches.
Our business involves the storage and transmission of consumers’ proprietary information, and security breaches could expose us to a risk of loss or misuse of this information, litigation and potential liability. We are entirely dependent on the secure operation of our websites and systems as well as the operation of the internet generally. While we have incurred no material cyber-attacks or security breaches to date, a number of other companies have disclosed cyber-attacks and security breaches, some of which have involved intentional attacks. Attacks may be targeted at us, our customers, or both. Although we devote significant resources to maintain and regularly upgrade our systems and processes that are designed to protect the security of our computer systems, software, networks and other technology assets and the confidentiality, integrity and availability of information belonging to us and our customers, our security measures may not provide absolute security.
Despite our efforts to ensure the integrity of our systems, it is possible that we may not be able to anticipate or to implement effective preventive measures against all security breaches of these types, especially because the techniques used change frequently or are not recognized until launched, and because cyber-attacks can originate from a wide variety of sources, including third parties outside the Company such as persons who are involved with organized crime or associated with external service providers or who may be linked to terrorist organizations or hostile foreign governments. These risks may increase in the future as we continue to increase our mobile and other internet-based product offerings and expand our internal usage of web-based products and applications or expand into new countries. If an actual or perceived breach of security occurs, customer and/or supplier perception of the effectiveness of our security measures could be harmed and could result in the loss of customers, suppliers or both. Actual or anticipated attacks and risks may cause us to incur increasing costs, including costs to deploy additional personnel and protection technologies, train employees, and engage third-party experts and consultants.
A successful penetration or circumvention of the security of our systems could cause serious negative consequences, including significant disruption of our operations, misappropriation of our confidential information or that of our customers, or damage to our computers or systems or those of our customers and counterparties, and could result in violations of applicable privacy and other laws, financial loss to us or to our customers, loss of confidence in our security measures, customer dissatisfaction, significant litigation exposure, and harm to our reputation, all of which could have a material adverse effect on us. In addition, our applicants provide personal information, including bank account information when applying for loans. We rely on encryption and authentication technology licensed from third parties to provide the security and authentication to effectively secure transmission of confidential information, including customer bank account and other personal information. Advances in computer capabilities, new discoveries in the field of cryptography or other developments may result in the technology used by us to protect transaction data being breached or compromised. Data breaches can also occur as a result of non-technical issues.
Our servers are also vulnerable to computer viruses, physical or electronic break-ins, and similar disruptions, including “denial-of-service” type attacks. We may need to expend significant resources to protect against security breaches or to address problems caused by breaches. Security breaches, including any breach of our systems or by persons with whom we have commercial relationships that result in the unauthorized release of consumers’ personal information, could damage our reputation and expose us to a risk of loss or litigation and possible liability. In addition, many of the third parties who provide products, services or support to us could also experience any of the above cyber risks or security breaches, which could impact our customers and our business and could result in a loss of customers, suppliers or revenues.
In addition, federal and some state regulators are considering promulgating rules and standards to address cybersecurity risks and many US states have already enacted laws requiring companies to notify individuals of data security breaches involving their personal data. These mandatory disclosures regarding a security breach are costly to implement and may lead to widespread negative publicity, which may cause customers to lose confidence in the effectiveness of our data security measures.
Any of these events could have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.




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Our ability to collect payment on loans and maintain accurate accounts may be adversely affected by computer viruses, physical or electronic break-ins, technical errors and similar disruptions.
The automated nature of our platform may make it an attractive target for hacking and potentially vulnerable to computer viruses, physical or electronic break-ins and similar disruptions. Despite efforts to ensure the integrity of our platform, it is possible that we may not be able to anticipate or to implement effective preventive measures against all security breaches of these types, in which case there would be an increased risk of fraud or identity theft, and we may experience losses on, or delays in the collection of amounts owed on, a fraudulently induced loan. In addition, the software that we have developed to use in our daily operations is highly complex and may contain undetected technical errors that could cause our computer systems to fail. Because each loan made involves our proprietary credit and fraud scoring models, and over 94% of loan applications are fully automated with no manual review required, any failure of our computer systems involving our proprietary credit and fraud scoring models and any technical or other errors contained in the software pertaining to our proprietary credit and fraud scoring models could compromise the ability to accurately evaluate potential customers, which would negatively impact our results of operations. Furthermore, any failure of our computer systems could cause an interruption in operations and result in disruptions in, or reductions in the amount of, collections from the loans we made to customers. If any of these risks were to materialize, it could have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.
 
Our platform and internal systems rely on software that is highly technical, and if it contains undetected errors, our business could be adversely affected.
Our platform and internal systems rely on software that is highly technical and complex. In addition, our platform and internal systems depend on the ability of such software to store, retrieve, process and manage immense amounts of data. The software on which we rely has contained, and may now or in the future contain, undetected errors or bugs. Some errors may only be discovered after the code has been released for external or internal use. Errors or other design defects within the software on which we rely may result in a negative experience for borrowers, delay introductions of new features or enhancements, result in errors or compromise our ability to protect borrower data or our intellectual property. Any errors, bugs or defects discovered in the software on which we rely could result in harm to our reputation, loss of borrowers, loss of revenues or liability for damages, any of which could have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.
To date, we have derived our revenues from a limited number of products and markets. Our efforts to expand our market reach and product portfolio may not succeed or may put pressure on our margins.
We frequently explore paths to expand our market reach and product portfolio. For example, we have launched or are in the process of launching other non-prime products like bank-originated installment loans and credit cards through FinWise and CCB and the Today Card, a bank-originated credit card. In the future, we may elect to pursue new products, channels, or markets. However, there is always risk that these new products, channels, or markets will be unprofitable, will increase costs, decrease margins, or take longer to generate target margins than anticipated. Additional costs could include those related to the need to hire more staff, invest in technology, develop and support new third-party partnerships or other costs which would increase operating expenses. In particular, growth may require additional technology staff, analysts in risk management, compliance personnel and customer support and collections staff. Although the Company outsources most of its customer support and collections staff, additional volumes would lead to increased costs in these areas.
When new customers are acquired, from an accounting point of view, we must recognize marketing costs and loan origination and data costs, and we incur a provision for loan losses. We use the same accounting treatment for new customers acquired through the Bank-Originated Products, such as loan participations that are purchased from the originating lender by a third party, which we protect from loan losses pursuant to a credit default protection arrangement. Due to these marketing costs, loan origination and data costs, and provision for loan losses, new customer acquisition does not typically yield positive margins for at least six months. As a result, rapid growth tends to compress margins in the near-term until growth rates slow down.




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In the states in which we originate Rise under a state-license, the rates and terms vary based on specific state laws. In states with lower maximum rates, we have more stringent credit criteria and generally lower initial customer profitability due to higher customer acquisition costs and higher losses as a percentage of revenues. While these states can have significant growth potential, they typically deliver lower profit margins. In states in which FinWise or CCB originate Rise installment loans, loan participations are purchased from FinWise or CCB by a third party, which we protect from loan losses pursuant to a credit default protection arrangement. As a result, Rise loans originated through our third-party partnerships have the same pattern of variable profit margins depending on state laws and which states are offering the most growth potential.
We may elect to pursue aggressive growth over margin expansion in order to increase market share and long-term revenue opportunities.
There also can be no guarantee that we will be successful with respect to any new product initiatives or any further expansion beyond the US if we decide to attempt such expansion, which may inhibit the growth of our business and have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.
Our allowance for loan losses is determined based upon both objective and subjective factors and may not be adequate to absorb loan losses. If we experience rising credit or fraud losses, our results of operations would be adversely affected.
We face the risk that customers will fail to repay their loans in full. We reserve for such losses by establishing an allowance for loan losses, the increase of which results in a charge to our earnings as a provision for loan losses. We have established a methodology designed to determine the adequacy of our allowance for loan losses. While this evaluation process uses historical and other objective information, the classification of loans and the forecasts and establishment of loan losses are also dependent on our subjective assessment based upon our experience and judgment. Actual losses are difficult to forecast, especially if such losses stem from factors beyond our historical experience. As a result, there can be no assurance that our allowance for loan losses will be sufficient to absorb losses or prevent a material adverse effect on our business, financial condition and results of operations. Losses are the largest cost as a percentage of revenues across all of our products.
Fraud and customers not being able to repay their loans are both significant drivers of loss rates. If we experienced rising credit or fraud losses this would significantly reduce our earnings and profit margins and could have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.
In June 2016, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"). ASU 2016-13 is intended to replace the incurred loss impairment methodology in current US GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates to improve the quality of information available to financial statement users about expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. For public entities, ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. In November 2019, the FASB issued ASU No. 2019-10, Financial Instruments - Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates ("ASU 2019-10"). The purpose of this amendment is to create a two-tier rollout of major updates, staggering the effective dates between larger public companies and all other entities. This granted certain classes of companies, including Smaller Reporting Companies ("SRCs"), additional time to implement major FASB standards, including ASU 2016-13. Larger public companies will still have an effective date for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. All other entities are permitted to defer adoption of ASU 2016-13, and its related amendments, until fiscal periods beginning after December 15, 2022. Under the current SEC definitions, the Company meets the definition of an SRC as of the ASU 2019-10 issuance date and is adopting the deferral period for ASU 2016-13.




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The new methodology for determining the allowance for loan losses, once adopted by the Company, will extend the time frame covered by the estimate of credit losses by including forward-looking information, such as "reasonable and supportable" forecasts in the assessment of the collectability of loans. As a result, rather than just looking at historical performances of loans to determine allowance for loan losses, we will have to consider future losses as well. Further, the new standard will drive a change in the accounting treatment in that the new expected lifetime losses of loans will be recognized at the time a loan is made rather than over the lifetime of the loans. We anticipate that adoption of this new methodology may have a material impact on our financial statements due to the timing differences caused by the change. We also expect that the internal financial controls processes in place for the Company's loan loss reserve process will be impacted. In addition, if we fail to accurately forecast the collectability of our loans under this new methodology and we reserve inadequate allowance amounts, we could be required to absorb such additional losses, which could have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.
Increased customer acquisition costs and/or data costs would reduce our margins.
Although losses are our largest cost, if customer acquisition costs or other servicing costs increased this would reduce our profit margins. Marketing costs would be negatively affected by increased competition or stricter credit standards that would reduce customer fund rates. We could also experience increased marketing costs due to higher fees from credit bureaus for preapproved direct mail lists, search engines for search engine marketing, or fees for affiliates, and these increased costs would reduce our profit margins. Other costs, such as legal costs, may increase as we pursue various company strategic initiatives, which could further reduce our profit margins.
We purchase significant amounts of data to facilitate our proprietary credit and fraud scoring models. If there was an increase in the cost of data, or if the Company elected to purchase from new data providers, there would be a reduction in our profit margins.
Any such reduction in our profit margins could result in a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.
Our success is dependent, in part, upon our officers and key employees, and if we are not able to attract and retain qualified officers and key employees, or if one of our officers or key employees is temporarily unable to fully contribute to our operations, our business could be materially adversely affected.
Our success depends, in part, on our officers, which comprise a relatively small group of individuals. Many members of the senior management team have significant industry experience, and we believe that our senior management would be difficult to replace, if necessary. Because the market for qualified individuals is highly competitive, we may not be able to attract and retain qualified officers or candidates. In addition, increasing regulations on, and negative publicity about, the consumer financial services industry could affect our ability to attract and retain qualified officers.
Our future success also depends on our continuing ability to attract, develop, motivate and retain highly qualified and skilled employees. Qualified individuals are in high demand, and we may incur significant costs to attract and retain them. The loss of any of our senior management or key employees could materially adversely affect our ability to execute our business plan and strategy, and we may not be able to find adequate replacements on a timely basis, or at all. We cannot ensure that we will be able retain the services of any members of our senior management or other key employees. Our officers and key employees may terminate their employment relationship with us at any time, and their knowledge of our business and industry would be extremely difficult to replace. While all key employees have signed non-disclosure, non-solicitation and non-compete agreements, they may still elect to leave the Company or even retire any time. Loss of key employees could result in delays to critical initiatives and the loss of certain capabilities and poorly documented intellectual property.
If we do not succeed in attracting and retaining our officers and key employees, our business could be materially and adversely affected.




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Our US loan business is seasonal in nature, which causes our revenues and earnings to fluctuate.
Our US loan business is affected by fluctuating demand for the products and services we offer and fluctuating collection rates throughout the year. Demand for our consumer loan products in the US has historically been highest in the third and fourth quarters of each year, corresponding to the holiday season, and lowest in the first quarter of each year, corresponding to our customers’ receipt of income tax refunds. This results in significant increases and decreases in portfolio size and profit margins from quarter to quarter. In particular, we typically experience a reduction in our credit portfolios and an increase in profit margins in the first quarter of the year. When we experience higher growth in the second quarter through fourth quarters, portfolio balances tend to grow and profit margins are compressed. Our cost of sales for the non-prime loan products we offer in the US, which represents our provision for loan losses, is lowest as a percentage of revenues in the first quarter of each year, corresponding to our customers’ receipt of income tax refunds, and increases as a percentage of revenues for the remainder of each year. This seasonality requires us to manage our cash flows over the course of the year. If our revenues or collections were to fall substantially below what we would normally expect during certain periods, our ability to service debt and meet our other liquidity requirements may be adversely affected, which could have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows. Any unexpected change to the growth in the second half of the year or delay of our customers' receipt of income tax refunds could change our typical seasonal product demand pattern and impact our profit margins and our annual cash flow management plans, which could have a material adverse effect on our financial condition and results of operations.
If internet search engine providers change their methodologies for organic rankings or paid search results, or our organic rankings or paid search results decline for other reasons, our new customer growth or volume from returning customers could decline.
Our new customer acquisition marketing and our returning customer relationship management is partly dependent on search engines such as Google, Bing and Yahoo! to direct a significant amount of traffic to our desktop and mobile websites via organic ranking and paid search advertising. We bid on certain keywords from search engines as well as use their algorithms to place our listings ahead of other lenders.
Our paid search activities may not continue to produce the desired results. Internet search engines often revise their methodologies. The volume of customers we receive through organic ranking and paid search could be adversely affected by any such changes in methodologies or policies by search engine providers, by:
•decreasing our organic rankings or paid search results;
•creating difficulty for our customers in using our web and mobile sites;
•producing more successful organic rankings, paid search results or tactical execution efforts for our competitors than for us; and
•resulting in higher costs for acquiring new or returning customers.
In addition, search engines could implement policies that restrict the ability of companies such as us to advertise their services and products, which could prevent us from appearing in a favorable location or any location in the organic rankings or paid search results when certain search terms are used by the consumer. Our online marketing efforts are also susceptible to actions by third parties that negatively impact our search results such as spam link attacks, which are often referred to as “black hat” tactics. Our sites have experienced meaningful fluctuations in organic rankings and paid search results in the past, and we anticipate similar fluctuations in the future. Any reduction in the number of consumers directed to our web and mobile sites could harm our business and operating results.
Finally, our competitors’ paid search, pay per click or search engine marketing activities may result in their sites receiving higher paid search results than ours and significantly increasing the cost of such advertising for us. We have little to no control over these potential changes in policy and methodologies relating to search engine results, and any of the changes described above could have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.
 




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Failure to keep up with the rapid technological changes in financial services and e-commerce, or changes in the uses and regulation of the internet could harm our business.
The financial services industry is undergoing rapid technological changes, with frequent introductions of new technology-driven products and services. The effective use of technology increases efficiency and enables financial and lending institutions to better serve customers and reduce costs. Our future success will depend, in part, upon our ability to address the needs of our customers by using technology to provide products and services that will satisfy customer demands for convenience, as well as to create additional efficiencies in our operations. We may not be able to effectively implement new technology-driven products and services as quickly as some of our competitors or be successful in marketing these products and services to our customers. Failure to successfully keep pace with technological change affecting the financial services industry could harm our ability to compete with our competitors.
Additionally, the business of providing products and services such as ours over the internet is dynamic and relatively new. We must keep pace with rapid technological change, consumer use habits, internet security risks, risks of system failure or inadequacy, and governmental regulation and taxation, and each of these factors could adversely impact our business. In addition, concerns about fraud, computer security and privacy and/or other problems may discourage additional consumers from adopting or continuing to use the internet as a medium of commerce. Also, to expand our customer base, we may elect to appeal to and acquire consumers who prove to be less profitable than our previous customers, and as a result we may be unable to gain efficiencies in our operating costs, including our cost of acquiring new customers, and our business could be adversely impacted. Any such failure to adapt to changes could have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.
Our ability to conduct our business and demand for our loans could be disrupted by natural or man-made catastrophes.
Catastrophes, such as fires, hurricanes and tornadoes, floods, earthquakes, or other natural disasters, terrorist attacks, computer viruses and telecommunications failures, could adversely affect our ability to market, originate or service loans. Natural disasters and acts of terrorism, war, civil unrest, violence or human error could also cause disruptions to our business or the economy as a whole, which could negatively affect customers’ demand for our loans. Despite any precautions we may take, system interruptions and delays could occur if there is a natural disaster that affects our offices or one of the data center facilities we lease. As we rely heavily on our servers, computer and communications systems and the internet to conduct our business and provide high-quality customer service, such disruptions could harm our ability to market our products, accept and underwrite applications, provide customer service and undertake collections activities and cause lengthy delays which could harm our business, results of operations and financial condition. We have implemented a disaster recovery program that allows us to move production to a backup data center in the event of a catastrophe. Although this program is functional, we do not currently serve network traffic equally from each backup data center and are not able to switch instantly to our backup center in the event of failure of the main server site. If our primary data center shuts down, there will be a period of time that our loan products or services, or certain of such loan products or services, will remain inaccessible to our users or our users may experience severe issues accessing such loan products and services. Our business interruption insurance may not be sufficient to compensate us for losses that may result from interruptions in our service as a result of system failures.
Any of these events could also cause consumer confidence to decrease in one or more of the markets we serve, which could result in a decreased number of loans being made to customers. As a result of these issues, any of these occurrences could have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.




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We may be unable to protect our proprietary technology and analytics or keep up with that of our competitors.
The success of our business depends to a significant degree upon the protection of our proprietary technology, including our proprietary credit and fraud scoring models, which we use for pricing loans. We seek to protect our intellectual property with non-disclosure agreements and through standard measures to protect trade secrets. However, we may be unable to deter misappropriation of our proprietary information, detect unauthorized use or take appropriate steps to enforce our intellectual property rights. If competitors learn our trade secrets (especially with regard to marketing and risk management capabilities) it could be difficult to successfully prosecute to recover damages. A third party may attempt to reverse engineer or otherwise obtain and use our proprietary technology without our consent. The pursuit of a claim against a third party for infringement of our intellectual property could be costly, and there can be no guarantee that any such efforts would be successful. Our failure to protect our software and other proprietary intellectual property rights or to develop technologies that are as good as our competitors could put us at a disadvantage relative to our competitors. Any such failures could have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.
We are subject to intellectual property disputes from time to time, and such disputes may be costly to defend and could harm our business and operating results.
We have faced and may continue to face allegations that we have infringed the trademarks, copyrights, patents or other intellectual property rights of third parties, including from our competitors or non-practicing entities. Patent and other intellectual property litigation may be protracted and expensive, and the results are difficult to predict and may require us to stop offering certain products or product features, acquire licenses, which may not be available at a commercially reasonable price or at all, or modify such products, product features, processes or websites while we develop non-infringing substitutes.
In addition, we use open source software in our technology platform and plan to use open source software in the future. From time to time, we may face claims from parties claiming ownership of, or demanding release of, the source code, potentially including our valuable proprietary code, or derivative works that were developed using such software, or otherwise seeking to enforce the terms of the applicable open source license. These claims could also result in litigation, require us to purchase a costly license or require us to devote additional research and development resources to change our platform, any of which could have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.
Current and future litigation or settlements or regulatory proceedings could cause management distraction, harm our reputation and have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.
We, our officers and certain of our subsidiaries have been and may become subject to lawsuits that could cause us to incur substantial expenditures, generate adverse publicity and could significantly impair our business, force us to cease doing business in one or more jurisdictions or cause us to cease offering or alter one or more products. We are currently the subject of several pending lawsuits and class action claims with respect to the services we provide to the banks we work with and our lending practices under relevant state law. For more information please see Note 12—Commitments, Contingencies and Guarantees in the Notes to the Consolidated Condensed Financial Statements included in this report. Further, while we disagree that we have violated any state laws and regulations and intend to vigorously defend our position, there can be no assurance that we will be successful or that any relief granted will not be material. A future adverse ruling in or a settlement of any such litigation against us, our executive officers or another lender, could result in significant legal fees that could become material, could harm our reputation, create obligations, forego collection of the principal amount of loans, pay treble or other multiple damages, pay monetary penalties and/or modify or terminate our operations in particular jurisdictions. In accordance with applicable accounting guidance, we establish an accrued liability for litigation, regulatory matters and other legal proceedings when those matters present material loss contingencies that are both probable and reasonably estimable. Even when an accrual is recorded, however, we may be exposed to loss in excess of any amounts accrued.




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In December 2019, the TFI bankruptcy plan was confirmed, and any potential future claims from the TFI Creditors' Committee were assigned to the Think Finance Litigation Trust (“TFLT”). On August 14, 2020, the TFLT filed an adversary proceeding against Elevate Credit, Inc. in the United States Bankruptcy Court for the Northern District of Texas, alleging certain avoidance claims related to Elevate's spin-off from TFI under the Bankruptcy Code and the Texas Uniform Fraudulent Transfer Act ("TUFTA"). If it were determined that the spin-off constituted a fraudulent conveyance or that there were other avoidance actions associated with the spin-off, then the spin-off could be deemed void and there could be a number of different remedies imposed against us, including without limitation, the requirement that we pay money damages in an amount equal to the difference between the consideration received by TFI in the spin-off and the fair market value of Elevate's net assets at the time of the spin-off. For more information please see “—The Think Finance Litigation Trust in the TFI bankruptcy, as well as third parties, may seek to hold us responsible for liabilities of TFI due to the Spin-Off.” While the TFLT values this claim at $246 million, the Company believes that it has valid defenses to the claim and intends to vigorously defend itself against this claim. For these reasons, we have not recognized a contingent loss reserve as of September 30, 2020 as we do not think that it is probable that we will incur a loss based on the nature of these claims. The lawsuit with the TFLT could, however, cause investors to sell our stock based on concerns about potential adverse outcomes, whether unfounded or not, which could negatively impact our share price.
Defense of any lawsuit, even if successful, could require substantial time and attention of our management and could require the expenditure of significant amounts for legal fees, expenditures related to indemnification agreements and other related costs. We and others are also subject to regulatory proceedings, and we could suffer losses as a result of interpretations of applicable laws, rules and regulations in those regulatory proceedings, even if we are not a party to those proceedings. Any of these events could have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.

We may be unable to use some or all of our net operating loss carryforward, which could materially and adversely affect our reported financial condition and results of operations.
At December 31, 2019, the US NOL was approximantely $47 million and the results from operations in 2019 utilized 89% of this carryforward. We expect that our results from operations in 2020 will fully utilize the NOL carryforward. If not utilized, the US NOL will begin to expire in 2034. If we do not generate sufficient taxable income, we may not be able to utilize a material portion of our NOLs, even if we achieve profitability. If we are limited in our ability to use our NOLs in future years in which we have taxable income, we will pay more taxes than if we were able to fully utilize our NOLs. This could materially and adversely affect our results of operations.
Under Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”), our ability to utilize the NOL or other tax attributes, such as research tax credits, in any taxable year may be limited if we experience an “ownership change.” A Section 382 “ownership change” generally occurs if one or more stockholders or groups of stockholders, who own at least 5% of our stock, increase their ownership by more than 50 percentage points over their lowest ownership percentage within a rolling three-year period. Similar rules may apply under state tax laws. We have not completed a Section 382 analysis through December 31, 2019. If we have previously had, or have in the future, one or more Section 382 “ownership changes,” including in connection with our IPO, we may not be able to utilize a material portion of our NOL.
Given the level of affordability claims against the subsidiary conducting our UK business and lack of regulatory clarity in the UK market, we made the decision to exit the UK market, thereby decreasing the size of our total addressable market and curtailing growth plans in the UK.
During the year ended December 31, 2018, our UK business began to receive an increased number of customer complaints initiated by claims management companies ("CMCs") related to the affordability assessment of certain loans. The CMCs' campaign against the high cost lending industry increased significantly during the third and fourth quarters of 2018 and continued through 2019 and the first half of 2020, resulting in a significant increase in affordability claims against all companies in the industry over this period. We believe that many of the increased claims are without merit and reflect the use of abusive and deceptive tactics by the CMCs. The Financial Conduct Authority ("FCA"), a regulator in the UK financial services industry, began regulating the CMCs in April 2019 in order to ensure that the methods used by the CMCs are in the best interests of the consumer and the industry.



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Our additional discussion with the FCA resulted in increasing uncertainty in the UK market and, as a result of such uncertainty, further complicated by the onset of COVID-19, we ultimately decided to place ECIL, our UK subsidiary, into administration and exit the UK market. Effective June 29, 2020, in accordance with the provisions of the UK Insolvency Act 1986 and pursuant to approval by the boards of directors of ECIL, insolvency practitioners from KPMG LLP were appointed to take control and management of our Sunny business. ECIL’s entry into administration placed its business under the direct control of the administrator. Accordingly, we deconsolidated ECIL as of June 29, 2020 and are presenting ECIL as discontinued operations starting in the second quarter of 2020.
These actions decrease the size of our total addressable market and cease our growth plans in the UK. In addition, in conjunction with the administration, claims related to the management and financial support of ECIL prior to the administration could be asserted, which could result in additional expense to us. We also may be required to provide certain administrative, technical and other services, and incur other exit costs and expenses related to ECIL during its administration. While we do not believe claims or costs related to ECIL during its administration are likely to have a material adverse impact on our results of operations or financial condition, we cannot provide complete assurance we will not experience significant additional claims or costs related to the administration of ECIL and its prior business conducted in the UK.


RISKS RELATED TO OUR ASSOCIATION WITH TFI
The Think Finance Litigation Trust in the TFI bankruptcy, as well as third parties, may seek to hold us responsible for liabilities of TFI due to the Spin-Off or for violations of certain federal laws.
In connection with our separation from TFI, TFI has generally agreed to retain all liabilities that did not historically arise from our business. Third parties may seek to hold us responsible for TFI’s retained liabilities, including third-party claims arising from TFI’s business and retained assets. Under the separation and distribution agreement, we are responsible for the debts, liabilities and other obligations related to the business or businesses that we own and operate. Under our agreements with TFI, TFI has agreed to indemnify us for claims and losses relating to its retained liabilities. However, if any of those liabilities are significant and we are ultimately held liable for such liabilities, we cannot assure you that we will be able to recover the full amount of our losses from TFI. Although we do not anticipate liability for any obligations not expressly assumed by us pursuant to the separation and distribution agreement, it is possible that we could be required to assume responsibility for certain obligations retained by TFI should TFI fail to pay or perform its retained obligations.
In December 2019, the Think Finance, Inc. ("TFI") bankruptcy plan was confirmed, and any potential future claims from the TFI Creditors' Committee were assigned to the Think Finance Litigation Trust (“TFLT”). On August 14, 2020, the TFLT filed an adversary proceeding against Elevate in the United States Bankruptcy Court for the Northern District of Texas, alleging certain avoidance claims related to the spin-off under the Bankruptcy Code and TUFTA. If it were determined that the spin-off constituted an avoidance or that there were other avoidance actions associated with the spin-off, then the spin-off could be deemed void and there could be a number of different remedies imposed against Elevate, including without limitation, the requirement that Elevate has to pay money damages in an amount equal to the difference between the consideration received by TFI in the spin-off and the fair market value of Elevate at the time of the spin-off. While the TFLT values this claim at $246 million, the Company believes that it has valid defenses to the claim and intends to vigorously defend itself against this claim. For these reasons, Elevate has not recognized a contingent loss reserve as of September 30, 2020 as the Company does not think that it is probable that it will incur a loss based on the nature of these claims. In the future, however, in negotiations with the TFLT in the TFI bankruptcy, Elevate may be obligated to book a reserve for potential settlement amounts that it considers as an estimate of possible loss. Any such reserve could have a material adverse impact on Elevate’s financial condition. Additionally, a class action lawsuit against Elevate was filed on August 17, 2020 in the Eastern District of Virginia alleging violations of usurious interest and aiding and abetting various racketeering activities related to the operations of TFI prior to and immediately after the 2014 spin-off. Elevate views this lawsuit as without merit and intends to vigorously defend its position. While Elevate can provide no assurances as to whether there will be a settlement, or a judgment against Elevate, or what the terms of any such settlement or judgment could be, in the event that Elevate is unable to pay any amount resulting from such settlement or judgment, it could have a material adverse effect on the Company’s financial condition, and Elevate could be obligated to file for bankruptcy.





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OTHER RISKS RELATED TO COMPLIANCE AND REGULATION

We, our marketing affiliates, our third-party service providers and our Bank Partners are subject to complex federal, state and local lending and consumer protection laws, and if we fail to comply with applicable laws, regulations, rules and guidance, our business could be adversely affected.

We, our marketing affiliates, our third-party service providers and our Bank Partners must comply with US federal, state and local regulatory regimes, including those applicable to consumer credit transactions. Certain US federal and state laws generally regulate interest rates and other charges and require certain disclosures. In particular, we may be subject to laws such as:
•local regulations and ordinances that impose requirements or restrictions related to certain loan product offerings and collection practices;
•state laws and regulations that impose requirements related to loan or credit service disclosures and terms, credit discrimination, credit reporting, debt servicing and collection;
•the Truth in Lending Act and Regulation Z promulgated thereunder, and similar state laws, which require certain disclosures to borrowers regarding the terms and conditions of their loans and credit transactions and other substantive consumer protections with respect to credit cards, such as an assessment of a borrower's ability to repay obligations and penalty fee limitations;
•Section 5 of the Federal Trade Commission Act, which prohibits unfair and deceptive acts or practices in or affecting commerce, Section 1031 of the Dodd-Frank Act, which prohibits unfair, deceptive or abusive acts or practices in connection with any consumer financial product or service, and similar state laws that prohibit unfair and deceptive acts or practices;
•the Equal Credit Opportunity Act and Regulation B promulgated thereunder and state non-discrimination laws, which generally prohibit creditors from discriminating against credit applicants on the basis of race, color, sex, age, religion, national origin, marital status, the fact that all or part of the applicant’s income derives from any public assistance program or the fact that the applicant has in good faith exercised any right under the federal Consumer Credit Protection Act;
•the Fair Credit Reporting Act (the “FCRA”) as amended by the Fair and Accurate Credit Transactions Act, and similar state laws, which promote the accuracy, fairness and privacy of information in the files of consumer reporting agencies;
•the Fair Debt Collection Practices Act (the “FDCPA”) and similar state and local debt collection laws, which provide guidelines and limitations on the conduct of third-party debt collectors and creditors in connection with the collection of consumer debts;
•the Gramm-Leach-Bliley Act and Regulation P promulgated thereunder and similar state privacy laws, which include limitations on financial institutions’ disclosure of nonpublic personal information about a consumer to nonaffiliated third parties, in certain circumstances require financial institutions to limit the use and further disclosure of nonpublic personal information by nonaffiliated third parties to whom they disclose such information and require financial institutions to disclose certain privacy policies and practices with respect to information sharing with affiliated and nonaffiliated entities as well as to safeguard personal customer information, and other privacy laws and regulations;
•the Bankruptcy Code and similar state insolvency laws, which limit the extent to which creditors may seek to enforce debts against parties who have filed for bankruptcy protection;
•the Servicemembers Civil Relief Act and similar state laws, which allow military members and certain dependents to suspend or postpone certain civil obligations, as well as limit applicable rates, so that the military member can devote his or her full attention to military duties;
•the Military Lending Act and Department of Defense rules, which limit the interest rate and fees that may be charged to military members and their dependents, requires certain disclosures and prohibits certain mandatory clauses among other restrictions;




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•the Electronic Fund Transfer Act and Regulation E promulgated thereunder, which provide disclosure requirements, guidelines and restrictions on the electronic transfer of funds from consumers’ asset accounts;
•the Electronic Signatures in Global and National Commerce Act and similar state laws, particularly the Uniform Electronic Transactions Act, which authorize the creation of legally binding and enforceable agreements utilizing electronic records and signatures and, with consumer consent, permits required disclosures to be provided electronically;
•the Bank Secrecy Act, which relates to compliance with anti-money laundering, customer due diligence and record-keeping policies and procedures; and
•the Telephone Consumer Protection Act (the "TCPA") and the regulations of the Federal Communications Commission (the "FCC"), which regulations include limitations on telemarketing calls, auto-dialed calls, prerecorded calls, text messages and unsolicited faxes.
While it is our intention to always be in compliance with these laws, it is possible that we may currently be, or at some time have been, inadvertently out of compliance with some or any such laws. Further, all applicable laws are subject to evolving regulatory and judicial interpretations, which further complicate real-time compliance. Lastly, compliance with these laws is costly, time-consuming and limits our operational flexibility.
Failure to comply with these laws and regulatory requirements applicable to our business may, among other things, limit our or a collection agency’s ability to collect all or part of the principal of or interest on loans. As a result, we may not be able to collect on unpaid principal or interest. In addition, non-compliance could subject us to damages, revocation of required licenses, class action lawsuits, administrative enforcement actions, rescission rights held by investors in securities offerings and civil and criminal liability, which may harm our business and may result in borrowers rescinding their loans.
Where applicable, we seek to comply with state installment, CSO, servicing and similar statutes. In all jurisdictions with licensing or other requirements that we believe may be applicable to us, we comply with the relevant requirements by acquiring the necessary licenses or authorization and submitting appropriate registrations in connection therewith. Nevertheless, if we are found to not have complied with applicable laws, we could lose one or more of our licenses or authorizations or face other sanctions or penalties or be required to obtain other licenses or authorizations in such jurisdiction, which may have an adverse effect on our ability to perform our servicing obligations or make products or services available to borrowers in particular states, which may harm our business.
Our products currently have usage caps and limitations on lending based on internally developed “responsible lending guidelines.” If those policies become more restrictive due to legislative or regulatory changes at the local, state, or federal regulatory level these products would experience declining revenues per customer. In some cases, legislative or regulatory changes at the local, state or federal regulatory level may require us to discontinue offering certain of our products in certain jurisdictions.
The CFPB may have examination authority over our consumer lending business that could have a significant impact on our business.
In July 2010, Congress passed the Dodd-Frank Act. Title X of the Dodd-Frank Act created the CFPB, which regulates US consumer financial products and services, and gave it regulatory, supervisory and enforcement powers over certain providers of consumer financial products and services, including authority to examine such providers.
The CFPB is currently considering rules to define larger participants in markets for consumer installment loans for purposes of supervision. Once this rule and corresponding examination rules are established, we anticipate the CFPB will examine us. The CFPB’s examination authority permits CFPB examiners to inspect the books and records of providers and ask questions about their business practices. The examination procedures include specific modules for examining marketing activities, loan application and origination activities, payment processing activities and sustained use by consumers, collections, accounts in default, consumer reporting activities and third-party relationships. As a result of these examinations, we could be required to change our products, our services or our practices, whether as a result of another party being examined or as a result of an examination of us, or we could be subject to monetary penalties, which could reduce profit margins for the company or otherwise materially adversely affect us.




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Furthermore, the CFPB’s practices and procedures regarding civil investigations, examination, enforcement and other matters relevant to us and other CFPB-regulated entities are subject to further development and change. Where the CFPB holds powers previously assigned to other regulators or may interpret laws previously interpreted by other regulators, the CFPB may not continue to apply such powers or interpret relevant concepts consistent with previous regulators’ practice. This may adversely affect our ability to anticipate the CFPB’s expectations or interpretations in our interaction with the CFPB.
The CFPB also has broad authority to prohibit unfair, deceptive and abusive acts and practices and to investigate and penalize financial institutions that violate this prohibition. In addition to having the authority to obtain monetary penalties for violations of applicable federal consumer financial laws (including the CFPB’s own rules), the CFPB can require remediation of practices, pursue administrative proceedings or litigation and obtain cease and desist orders (which can include orders for restitution or rescission of contracts, as well as other kinds of affirmative relief). Also, where a company is believed to have violated Title X of the Dodd-Frank Act or CFPB regulations implemented thereunder, the Dodd-Frank Act empowers state attorneys general and state regulators to bring civil actions to remedy such violations after consulting with the CFPB. If the CFPB or one or more state attorneys general or state regulators believe that we have violated any of the applicable laws or regulations, they could exercise their enforcement powers in ways that could have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.
Many states, including California, Massachusetts, Maryland and New York, have taken steps to actively enforce consumer protection laws, including through the creation of so-called “mini-CFPBs.”
The CFPB issued a final ruling on July 7, 2020 affecting the consumer lending industry, and this or subsequent new rules and regulations, if they are finalized, may impact our consumer lending business.
The CFPB released its final “Payday, Vehicle Title, and Certain High-Cost Lending Rule” (the "2017 Rule") on October 5, 2017, covering certain short-term and longer-term loans with an APR of 36% or higher and have a “leveraged payment mechanism” such as an ACH payment plan. On February 6, 2019, the CFPB issued proposed revisions to the 2017 Rule (the “2019 Proposed Revisions”). The 2019 Proposed Revisions leave in place requirements and limitations on attempts to withdraw payments from consumers’ checking, savings or prepaid accounts. Among other requirements, the payment provisions prohibit lenders that have had two consecutive attempts to collect money from a consumers’ account returned for insufficient funds from making any further attempts to collect from the account unless the consumers have provided new authorizations for additional payment transfers. Additionally, the payment provisions require us to give consumers at least three business days' advance notice before attempting payment withdrawals. The mandatory compliance deadline for the payment provisions of the 2017 Rule was August 19, 2019. There are also recordkeeping requirements and compliance plan requirements in the 2019 Proposed Rule that will apply to us. On June 7, 2019, the CFPB announced a 15-month delay in the rule's August 19, 2019 compliance date to November 19, 2020 that applies only to the proposed rescission of the ability-to-pay provisions. Relatedly, the Community Financial Services Association of America (“CFSA”) sued the CFPB in April 2018 over the 2017 Rule. As a result, the court suspended the CFPB’s August 19, 2019 implementation of the 2019 Proposed Revisions pending further order of the court. On August 6, 2019, the court issued an order that leaves the compliance date stay in effect. On July 7, 2020, the CFPB issued its final rule concerning small dollar lending. The final rule rescinds the mandatory underwriting provisions of the 2017 Rule after re-evaluating the legal and evidentiary bases for these provisions and finding them to be insufficient. The final rule does not rescind or alter the payments provisions of the 2017 Rule. It is unknown at this time to what extent this finalized rule, or any subsequent new rules and regulations proposed by the CFPB will have an adverse effect on the results of operations of our US consumer lending business.
The FDIC has issued examination guidance affecting our unaffiliated third-party lenders and these or subsequent new rules and regulations could have a significant impact on our products originated by unaffiliated third-party lenders.
The Bank-Originated Products are offered by Elevate's unaffiliated third-party lenders using technology, underwriting and marketing services provided by Elevate. The unaffiliated third-party lenders are supervised and examined by both the states that charter them and the FDIC. If the FDIC or a state supervisory body considers any aspect of the products originated by unaffiliated third-party lenders to be inconsistent with its guidance, the unaffiliated third-party lenders may be required to alter the product.




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On July 29, 2016, the board of directors of the FDIC released examination guidance relating to third-party lending as part of a package of materials designed to “improve the transparency and clarity of the FDIC’s supervisory policies and practices” and consumer compliance measures that FDIC-supervised institutions should follow when lending through a business relationship with a third party. The proposed guidance, if finalized, would apply to all FDIC-supervised institutions that engage in third-party lending programs, including certain Bank Products.
The proposed guidance elaborates on previously issued agency guidance on managing third-party risks and specifically addresses third-party lending arrangements where an FDIC-supervised institution relies on a third party to perform a significant aspect of the lending process. The types of relationships that would be covered by the guidance include (but are not limited to) relationships for originating loans on behalf of, through or jointly with third parties, or using platforms developed by third parties. If adopted as proposed, the guidance would result in increased supervisory attention of institutions that engage in significant lending activities through third parties, including at least one examination every 12 months, as well as supervisory expectations for a third-party lending risk management program and third-party lending policies that contain certain minimum requirements, such as self-imposed limits as a percentage of total capital for each third-party lending relationship and for the overall loan program, relative to origination volumes, credit exposures (including pipeline risk), growth, loan types, and acceptable credit quality. Comments on the guidance were due October 27, 2016. While the guidance has never formally been adopted, it is our understanding that the FDIC has relied upon it in its examination of third-party lending arrangements.
On July 20, 2020, the FDIC announced that it is seeking the public's input on the potential for a public/private standard-setting partnership and voluntary certification program to promote the effective adoption of innovative technologies at FDIC-supervised financial institutions. Released as part of the FDiTech initiative, the request asks whether the proposed program might reduce the regulatory and operational uncertainty that may prevent financial institutions from deploying new technology or entering into partnerships with technology firms, including "fintechs." For financial institutions that choose to use the system, a voluntary certification program could help standardize due diligence practices and reduce associated costs. At this time, it is unclear what impact this request and potential proposal will have on Elevate's operations.
The regulatory landscape in which we operate is continually changing due to new CFPB rules, regulations and interpretations, as well as various legal actions that have been brought against others in marketplace lending, including several lawsuits that have sought to re-characterize certain loans made by federally insured banks as loans made by third parties. If litigation on similar theories were brought against us when we work with a federally insured bank that makes loans, rather than making loans ourselves and were such an action to be successful, we could be subject to state usury limits and/or state licensing requirements, in addition to the state consumer protection laws to which we are already subject, in a greater number of states, loans in such states could be deemed void and unenforceable, and we could be subject to substantial penalties in connection with such loans.
The case law involving whether an originating lender, on the one hand, or third parties, on the other hand, are the “true lenders” of a loan is still developing and courts have come to different conclusions and applied different analyses. The determination of whether a third-party service provider is the “true lender” is significant because third-parties risk having the loans they service becoming subject to a consumer’s state usury limits. A number of federal courts that have opined on the “true lender” issue have looked to who is the lender identified on the borrower’s loan documents. A number of state courts and at least one federal district court have considered a number of other factors when analyzing whether the originating lender or a third party is the “true lender,” including looking at the economics of the transaction to determine, among other things, who has the predominant economic interest in the loan being made. If we were re-characterized as a “true lender” with respect to Elastic, or Rise of Texas or FinWise or CCB states, loans could be deemed to be void and unenforceable in some states, the right to collect finance charges could be affected, and we could be subject to fines and penalties from state and federal regulatory agencies as well as claims by borrowers, including class actions by private plaintiffs. Even if we were not required to change our business practices to comply with applicable state laws and regulations or cease doing business in some states, we could be required to register or obtain lending licenses or other regulatory approvals that could impose a substantial cost on us. If Republic Bank, FinWise Bank, CCB or the CSO lenders in Texas were subject to such a lawsuit, they may elect to terminate their relationship with us voluntarily or at the direction of their regulators, and if they lost the lawsuit, they could be forced to modify or terminate the programs.




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On August 13, 2018, the California Supreme Court in Eduardo De La Torre, et al. v. CashCall, Inc., held that interest rates on consumer loans of $2,500 or more could be found unconscionable under section 22302 of the California Financial Code, despite not being subject to certain statutory interest rate caps and that such a finding requires a full unconscionability analysis, which is fact-intensive.  The California Supreme Court did not hold that any particular loan or loans were unconscionable. In its opinion, the California Supreme Court noted that the unconscionability determination is not an easy one, that high interest rates may indeed be justified for higher risk borrowers. As a result of the California Supreme Court’s ruling, the case was remanded to the Northern District of California. The Judge for the Northern District of California dismissed the case, on the basis that the unconscionability analysis and class action determination are matters of state law for evaluation by a state court. 
On August 31, 2016, the United States District Court for the Central District of California ruled in CFPB v. CashCall, Inc. et. al. that CashCall was the “true lender” and consequently was engaged in deceptive practices by servicing and collecting on payday loans in certain states where the interest rate on the loans exceeded the state usury limit and/or where CashCall was not a licensed lender. The CashCall case is related to a tribally related lending program. In reaching its decision, the court adopted a “totality of the circumstances” test to determine which party to the transaction had the “predominant economic interest” in the transaction. Given the fact-intensive nature of a “totality of the circumstances” assessment, the particular and varied details of marketplace lending and other bank partner programs may lead to different outcomes to those reached in CashCall, even in those jurisdictions where courts adopt the “totality of the circumstances” approach. Notably, CashCall did not address the federal preemption of state law under the National Bank Act or any other federal statute. Although CashCall is appealing the decision in the Ninth Circuit, on January 26, 2018, the District Court ordered CashCall to pay approximately $10.2 million in civil money penalties, but no consumer restitution.  In issuing the judgment, which was significantly less than the $280 million the CFPB sought in penalties and consumer restitution, the Court found that CashCall had not knowingly or recklessly violated consumer protection laws, and that the CFPB had not demonstrated that consumer restitution was an appropriate remedy.
On September 20, 2016, in Beechum v. Navient Solutions, Inc., the United States District Court for the Central District of California dismissed a class action suit alleging usurious interest rates on private student loans in violation of California law. In doing so, the court rejected the plaintiff’s arguments that the defendants were the de facto “true lenders” of loans made by a national bank under a bank partnership arrangement with a non-bank partner. Consistent with the controlling judicial authority for challenges to the applicability of statutory or constitutional exemptions to California’s usury prohibition, the court determined that “it must look solely to the face of the transaction” in determining whether an exemption applies and did not apply the “totality of the circumstances” test.
In addition to true lender challenges, a question regarding the applicability of state usury rates may arise when a loan is sold from a bank to a non-bank entity. In Madden v. Midland Funding, LLC, the Court of Appeals for the Second Circuit held that the federal preemption of state usury laws did not extend to the purchaser of a loan issued by a national bank. In its brief urging the US Supreme Court to deny certiorari, the US Solicitor General, joined by the Office of the Comptroller of the Currency (“OCC”), noted that the Second Circuit (Connecticut, New York and Vermont) analysis was incorrect. On remand, the United States District Court for the Southern District of New York concluded on February 27, 2017 that New York’s state usury law, not Delaware's state usury law, was applicable and that the plaintiff’s claims under the FDCPA and state unfair and deceptive acts and practices could proceed. To that end, the court granted Madden’s motion for class certification. It is unknown whether Madden will be applied outside of the defaulted debt context in which it arose; however, recently two class actions, Cohen v Capital One Funding, LLC, et al and Chase Card Funding, LLC, et al, have relied on Madden to challenge the interest rate charged once debt was sold to securitization trusts. The facts in CashCall, Navient and Madden are not directly applicable to our business, as we do not engage in practices similar to those at issue in CashCall, Navient or Madden, and we do not purchase whole loans or engage in business in states within the Second Circuit. However, to the extent that either the holdings in CashCall or Madden were broadened to cover circumstances applicable to our business, or if other litigation on related theories were brought against us and were successful, or we were otherwise found to be the "true lender," we could become subject to state usury limits and state licensing laws, in addition to the state consumer protection laws to which we are already subject, in a greater number of states, loans in such states could be deemed void and unenforceable, and we could be subject to substantial penalties in connection with such loans.




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In response to the uncertainty Madden created as to the validity of interest rates of bank-originated loans, both the OCC and FDIC issued final rules to clarify that when a bank sells, assigns or otherwise transfers a loan, the interest permissible prior to the transfer continues to be permissible following the transfer. The OCC final rule was effective on August 3, 2020. The FDIC final rule will be effective on August 21, 2020. On July 29, 2020, the attorneys general from California, Illinois and New York filed a lawsuit against the OCC challenging the rule. Then in August, attorneys general from California, Illinois, Massachusetts, Minnesota, New Jersey, New York, North Carolina and D.C. sued the FDIC alleging the core of the rulemaking "is beyond the FDIC's power to issue, is contrary to statute, and would facilitate predatory lending through sham 'rent-a-bank' partnerships designed to evade state law."
Relatedly, both agencies have signaled they are working on a rule to remove uncertainty surrounding the “true lender” theory-which involves a claim by a borrower or regulator that the supposed “true lender” of a loan funded by a bank is a non-bank service provider of the bank, rather than the bank itself. This controversial theory poses a growing threat to banks’ ability to enter into contractual partnerships with non-bank service providers to extend responsible credit products that are far superior to payday loans. Such a theory threatens to undermine the long-established lending powers of national and state-chartered banks and the validity of their originated loans and could cause substantial disruption to the financial system upon which all Americans rely. On July 20, 2020, the OCC proposed a rule that would determine when a national bank or federal savings association makes a loan and is the "true lender" in the context of a partnership between a bank and a third party. The proposed rule would resolve this uncertainty by specifying that a bank makes a loan and is the "true lender" if, as of the date of origination, it (1) is named as the lender in the loan agreement or (2) funds the loan. On October 27, 2020, the OCC issued its final rule as proposed. In addition to the bright line test as to who is the "true lender", the rule also clarifies that as the "true lender" of a loan, the bank retains the compliance obligations associated with the origination of that loan, thus negating concern regarding harmful rent-a-charter arrangements. The rule becomes effective 60 days after it is published in the Federal Register.
On July 20, 2020, the FDIC announced that is seeking the public's input on the potential for a public/private standard-setting partnership and voluntary certification program to promote the efficient and effective adoption of innovative technologies at FDIC-supervised financial institutions. The Request for Information asks whether the proposed program might reduce the regulatory and operational uncertainty that may prevent financial institutions from deploying new technology or entering into partnerships with technology firms, including "fintechs." The deadline for comments was September 22, 2020. We are awaiting further developments from the FDIC.
Lastly, the OCC and FDIC are also working on a proposed “Small Dollar Rule” which will facilitate greater financial inclusion and give guidance for banks that make “small dollar” loans to non-prime consumers. The guidance could impact the products or interest rates that unaffiliated third-party banks originate utilizing the Elevate’s lending platforms.
Effective January 1, 2021, the California Consumer Financial Protection Law ("CCFPL"), will expand the enforcement powers of the California Department of Financial Protection and Innovation (previously known as the California Department of Business Oversight). The new law extends state oversight of financial services providers not currently subject to state supervision.
In 2017, the Colorado Attorney General filed complaints in state court against marketplace lenders Marlette Funding LLC and Avant of Colorado LLC on behalf of the administrator of Colorado’s Uniform Consumer Credit Code (“UCCC”), alleging violations of the UCCC based on “true lender” and loan assignment (Madden) cases with respect to lending programs sponsored by WebBank and Cross River Bank, respectively. After years of litigation, on August 7, 2020, all parties entered into a settlement of all claims comprising of a civil money penalty of $1,050,000 and a $500,000 contribution to a Colorado financial literacy program. The settlement provides a safe harbor for the marketplace lending programs at issue in the suits, as well as certain of the banks’ other marketplace lending programs if certain criteria related to oversight, disclosure, funding, licensing, consumer terms, and structure are followed. Only the parties to the litigation are bound by this settlement and further, it only applies to closed-end loans offered by banks in conjunction with non-bank partners or fintechs partnering with banks that involve origination of loans through an online platform. Another marketplace lender, Kabbage, Inc. and its bank, Celtic Bank, were sued in Massachusetts federal court in 2017, with the defendant alleging that Kabbage, not Celtic Bank, is the “true lender.” Kabbage, Inc. was successful in compelling arbitration in that case. In October 2019, Kabbage was sued in the Southern District of New York by several small businesses alleging violations of state usury laws (California, Massachusetts, Colorado, New York) and racketeering and conspiracy under federal RICO statutes. It also includes claims for violations of various state laws other than usury laws, including the California Financing Law Code ("CFLC"). This case was settled and dismissed in August 2020.



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In the last few months, we have seen increased activity by some state regulatory authorities seeking to understand the services we provide to our Bank Partners. We cannot predict the final outcome of these inquiries or to what extent any obligations arising out of such final outcome will be applicable to our Company, business or officers, if at all. It is possible that some state regulators could conclude that we are subject to state laws, including licensing or registration in connection with services we provide to our Bank Partners. The recent and anticipated further clarifications of federal interest rate preemption by the OCC and FDIC should provide clarification to such conclusions.
We use third-party collection agencies to assist us with debt collection. Their failure to comply with applicable debt collection regulations could subject us to fines and other liabilities, which could harm our reputation and business.
The FDCPA regulates persons who regularly collect or attempt to collect, directly or indirectly, consumer debts owed or asserted to be owed to another person. Many states impose additional requirements on debt collection communications, and some of those requirements may be more stringent than the federal requirements. Moreover, regulations governing debt collection are subject to changing interpretations that differ from jurisdiction to jurisdiction. We use third-party collections agencies to collect on debts incurred by consumers of our credit products. Regulatory changes could make it more difficult for collections agencies to effectively collect on the loans we originate.
Our business is subject to complex and evolving laws and regulations regarding privacy, data protection, and other matters. Many of these laws and regulations are subject to change and uncertain interpretation, and could result in claims, changes to our business practices, monetary penalties, increased cost of operations, or declines in user growth or engagement, or otherwise harm our business.
We receive, transmit and store a large volume of personally identifiable information and other sensitive data from customers and potential customers. Our business is subject to a variety of laws and regulations in the US that involve user privacy issues, data protection, advertising, marketing, disclosures, distribution, electronic contracts and other communications, consumer protection and online payment services. The introduction of new products or expansion of our activities in certain jurisdictions may subject us to additional laws and regulations. US federal and state laws and regulations, which can be enforced by private parties or government entities, are constantly evolving and can be subject to significant change.
A number of proposals have recently been implemented or are pending before federal and state legislative and regulatory bodies that could impose obligations in areas such as privacy. For example, the California Consumer Privacy Act (the “CCPA”) came into effect on January 1, 2020. The CCPA broadly defines personal information and provides California consumers increased privacy rights and protections. California Attorney General ("AG") Xavier Becerra submitted final proposed regulations on June 2, 2020 to guide covered businesses' implementation of the CCPA. The regulations address several CCPA provisions that explicitly call for the AG's input, as well as others that have been the subject of confusion, criticism, or discussion. With the passage of the California Privacy Rights Act (the “CPRA”) on November 3, 2020, we expect privacy rights of Californians will expand significantly and become more restrictive for companies that do business in California.
Additionally, on October 22, 2020, the CFPB issued an advance notice of proposed rulemaking (“ANPR”) soliciting feedback on how the CFPB should develop regulations to implement Section 1033 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”). Subject to rules prescribed by the CFPB, Section 1033 requires “covered persons” to make available to a consumer, upon request, information in the control or possession of the covered person concerning the consumer financial product or service that the consumer obtained from such covered person, including information related to any transaction, series of transactions or to the account, including costs, charges and usage data. Once the ANPR is published in the Federal Register, it will be open for comment for 90 days. It is difficult to assess the likelihood of the impact that this and any future legislation or rules and regulations implementing legislation could have on our business.




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The use of personal data in credit underwriting is highly regulated.
In the US, the FCRA regulates the collection, dissemination and use of consumer information, including consumer credit information. Compliance with the FCRA and related laws and regulations concerning consumer reports has recently been under regulatory scrutiny. The FCRA requires us to provide a Notice of Adverse Action to a loan applicant when we deny an application for credit, which, among other things, informs the applicant of the action taken regarding the credit application and the specific reasons for the denial of credit. The FCRA also requires us to promptly update any credit information reported to a consumer reporting agency about a consumer and to allow a process by which consumers may inquire about credit information furnished by us to a consumer reporting agency. Historically, the FTC has played a key role in the implementation, oversight, enforcement and interpretation of the FCRA. Pursuant to the Dodd-Frank Act, the CFPB has primary supervisory, regulatory and enforcement authority of FCRA issues. Although the FTC also retains its enforcement role regarding the FCRA, it shares that role in many respects with the CFPB. The CFPB has taken a more active approach than the FTC, including with respect to regulation, enforcement and supervision of the FCRA. Changes in the regulation, enforcement or supervision of the FCRA may materially affect our business if new regulations or interpretations by the CFPB or the FTC require us to materially alter the manner in which we use personal data in our credit underwriting.
In January 2020, any California business became subject to the CCPA and if the November ballot initiative passes, will become subject to the CPRA. As described above in "-Our business is subject to complex and evolving laws and regulations regarding privacy, data protection, and other matters. Many of these laws and regulations are subject to change and uncertain interpretation, and could result in claims, changes to our business practices, monetary penalties, increased cost of operations, or declines in user growth or engagement, or otherwise harm our business," the CCPA broadly defines personal information and provides California consumers increased privacy rights and protections.
Compliance with any new or developing privacy laws in the US, including the CCPA or other state or federal laws that may be enacted in the future, may require significant resources and could have a material adverse impact on our business and results of operations.
The oversight of the FCRA by both the CFPB and the FTC and any related investigation or enforcement activities or our failure to comply with the Data Protection Act ("DPA"), and any supplementary data protection legislation may have a material adverse impact on our business, including our operations, our mode and manner of conducting business and our financial results.
Judicial decisions or amendments to the Federal Arbitration Act could render the arbitration agreements we use illegal or unenforceable.
We include arbitration provisions in our consumer loan agreements. These provisions are designed to allow us to resolve any customer disputes through individual arbitration rather than in court and explicitly provide that all arbitrations will be conducted on an individual and not on a class basis. Thus, our arbitration agreements, if enforced, have the effect of shielding us from class action liability. Our arbitration agreements do not generally have any impact on regulatory enforcement proceedings. We take the position that the arbitration provisions in our consumer loan agreements, including class action waivers, are valid and enforceable; however, the enforceability of arbitration provisions is often challenged in court. If those challenges are successful, our arbitration and class action waiver provisions could be unenforceable, which could subject us to additional litigation, including additional class action litigation.
Any judicial decisions, legislation or other rules or regulations that impair our ability to enter into and enforce consumer arbitration agreements and class action waivers could significantly increase our exposure to class action litigation as well as litigation in plaintiff-friendly jurisdictions, which would be costly and could have a material adverse effect on our business, prospects, results of operations, financial condition or cash flows.




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We use marketing affiliates to assist us and the originating lender in obtaining new customers, and if such marketing affiliates do not comply with an increasing number of applicable laws and regulations, or if our ability to use such marketing affiliates is otherwise impaired, it could adversely affect our business.
We depend in part on marketing affiliates as a source of new customers for us and, with respect to the Bank Products, for the originating lender and credit card issuer. Our marketing affiliates place our advertisements on their websites that direct potential customers to our websites. As a result, the success of our business depends in part on the willingness and ability of marketing affiliates to provide us customer referrals at acceptable prices.
If regulatory oversight of marketing affiliates relationships is increased, through the implementation of new laws or regulations or the interpretation of existing laws or regulations, our ability to use marketing affiliates could be restricted or eliminated.
Marketing affiliates’ failure to comply with applicable laws or regulations, or any changes in laws or regulations applicable to marketing affiliates relationships or changes in the interpretation or implementation of such laws or regulations, could have an adverse effect on our business and could increase negative perceptions of our business and industry. Additionally, the use of marketing affiliates could subject us to additional regulatory cost and expense. If our ability to use marketing affiliates were to be impaired, our business, prospects, results of operations, financial condition or cash flows could be materially adversely affected.
 
RISKS RELATED TO THE SECURITIES MARKETS AND OWNERSHIP OF OUR COMMON STOCK
The price of our common stock may be volatile, and the value of your investment could decline.
Technology stocks have historically experienced high levels of volatility. The trading price of our common stock may fluctuate substantially depending on many factors, some of which are beyond our control and may not be related to our operating performance. These fluctuations could cause you to lose all or part of your investment in our common stock. Factors that could cause fluctuations in the trading price of our common stock include the following:
•announcements of new products, services or technologies, relationships with strategic partners or acquisitions or changes in the timing of such anticipated events; of the termination of, or material changes to, material agreements; or of other events by us or our competitors;
•changes in economic conditions;
•changes in prevailing interest rates;
•price and volume fluctuations in the overall stock market from time to time;
•significant volatility in the market price and trading volume of technology companies in general and of companies in the financial services industry;
•fluctuations in the trading volume of our shares or the size of our public float;
•actual or anticipated changes in our operating results or fluctuations in our operating results;
•quarterly fluctuations in demand for our loans;
•whether our operating results meet the expectations of securities analysts or investors;
•actual or anticipated changes in the expectations of investors or securities analysts;
•regulatory developments in the US, foreign countries or both and our ability to comply with applicable regulations;
•material litigation, including class action lawsuits;
•major catastrophic events;
•sales of large blocks of our stock;
•entry into, modification of or termination of a material agreement; or
•departures of key personnel or directors.




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In addition, if the market for technology and financial services stocks or the stock market in general experiences loss of investor confidence, the trading price of our common stock could decline for reasons unrelated to our business, operating results or financial condition. The trading price of our common stock might also decline in reaction to events that affect other companies in our industry even if these events do not directly affect us. In the past, following periods of volatility in the market price of a company’s securities, securities class action litigation has often been brought against that company. If our stock price is volatile, we may become the target of securities litigation. Securities litigation could result in substantial costs and divert our management’s attention and resources from our business. This could have a material adverse effect on our business, operating results and financial condition. 
Sales of substantial amounts of our common stock in the public markets, or the perception that they might occur, could reduce the price that our common stock might otherwise attain and may dilute your voting power and your ownership interest in us.
Sales of a substantial number of shares of our common stock in the public market, or the perception that these sales could occur, could adversely affect the market price of our common stock and may make it more difficult for you to sell your common stock at a time and price that you deem appropriate.
We may issue our shares of common stock or securities convertible into our common stock from time to time in connection with a financing, acquisition, investments or otherwise. Any such issuance could result in substantial dilution to our existing stockholders and cause the trading price of our common stock to decline.
The requirements of being a public company may strain our resources, divert management’s attention and affect our ability to attract and retain qualified board members.
As a public company, we are subject to the reporting requirements of the Exchange Act, the NYSE listing standards and other applicable securities rules and regulations. Compliance with these rules and regulations increases our legal and financial compliance costs, makes some activities more difficult, time-consuming or costly, and increases demand on our systems and resources, particularly after we are no longer an “emerging growth company” as defined in the Jumpstart Our Business Startups Act (the “JOBS Act”). Among other things, the Exchange Act requires that we file annual, quarterly and current reports with respect to our business and operating results and maintain effective disclosure controls and procedures and internal control over financial reporting. In order to maintain and, if required, improve our disclosure controls and procedures and internal control over financial reporting to meet this standard, significant resources and management oversight may be required. As a result, management’s attention may be diverted from other business concerns, which could harm our business and operating results.
In addition, changing laws, regulations and standards relating to corporate governance and public disclosure are creating uncertainty for public companies, increasing legal and financial compliance costs and making some activities more time consuming. These laws, regulations and standards are subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We intend to invest resources to comply with evolving laws, regulations and standards, and this investment may result in increased general and administrative expense and a diversion of management’s time and attention from revenues-generating activities to compliance activities. If our efforts to comply with new laws, regulations and standards differ from the activities intended by regulatory or governing bodies, regulatory authorities may initiate legal proceedings against us and our business may be harmed.
However, for so long as we remain an “emerging growth company” as defined in the JOBS Act, we may take advantage of certain exemptions from various requirements that are applicable to public companies that are not “emerging growth companies,” including not being required to comply with the independent auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. We may take advantage of these exemptions until we are no longer an “emerging growth company.” As a result, our stockholders may not have access to certain information they deem important.



120

We will cease to be an “emerging growth company” upon the earliest of: (i) the first fiscal year following the fifth anniversary of the completion of our IPO, (ii) the first fiscal year after our annual gross revenues are $1.07 billion or more, (iii) the date on which we have, during the previous three-year period, issued more than $1 billion in non-convertible debt securities, and (iv) as of the end of any fiscal year in which the market value of our common stock held by non-affiliates exceeded $700 million as of the end of the second quarter of that fiscal year.
We cannot predict if investors will find our securities less attractive because we will rely on these exemptions. If some investors find our securities less attractive as a result, there may be a less active trading market for securities and our stock price may be more volatile.
If securities or industry analysts do not publish research or reports about our business or publish inaccurate or unfavorable research reports about our business, our share price and trading volume could decline.
The trading market for our common stock, to some extent, depends on the research and reports that securities or industry analysts publish about us or our business. We do not have any control over these analysts. If one or more of the analysts who cover us should downgrade our shares or change their opinion of our shares, our share price would likely decline. If one or more of these analysts should cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause our share price or trading volume to decline.
We do not intend to pay dividends for the foreseeable future.
We have never declared or paid any dividends on our common stock. We intend to retain any earnings to finance the operation and expansion of our business, and we do not anticipate paying any cash dividends in the future. In addition, pursuant to our financing agreement, we are prohibited from paying cash dividends without the prior consent of VPC, and we may be further restricted in the future by debt or other agreements we enter into. As a result, you may only receive a return on your investment in our common stock if the market price of our common stock increases.
 
Anti-takeover provisions in our charter documents and Delaware law may delay or prevent an acquisition of our company.
Our amended and restated certificate of incorporation and amended and restated bylaws contain provisions that may have the effect of delaying or preventing a change in control of us or changes in our management. The provisions, among other things:
•establish a classified Board of Directors so that not all members of our Board of Directors are elected at one time;
•permit only our Board of Directors to establish the number of directors and fill vacancies on the Board;
•provide that directors may only be removed “for cause” and only with the approval of two-thirds of our stockholders;
•require two-thirds approval to amend some provisions in our restated certificate of incorporation and restated bylaws;
•authorize the issuance of “blank check” preferred stock that our Board of Directors could use to implement a stockholder rights plan, or a “poison pill;”
•eliminate the ability of our stockholders to call special meetings of stockholders;
•prohibit stockholder action by written consent, which will require that all stockholder actions must be taken at a stockholder meeting;
•do not provide for cumulative voting; and
•establish advance notice requirements for nominations for election to our Board of Directors or for proposing matters that can be acted upon by stockholders at annual stockholder meetings.
These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in our management.
In addition, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law (the “DGCL”) which limits the ability of stockholders owning in excess of 15% of our outstanding voting stock to merge or combine with us in certain circumstances.



121

Any provision of our amended and restated certificate of incorporation or amended and restated bylaws or Delaware law that has the effect of delaying or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our common stock and could also affect the price that some investors are willing to pay for our common stock.
Our amended and restated certificate of incorporation designates the Court of Chancery of the State of Delaware as the exclusive forum for certain litigation that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us.
Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware is the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed to us or our stockholders by any of our directors, officers, employees or agents, (iii) any action asserting a claim against us arising under the DGCL or (iv) any action asserting a claim against us that is governed by the internal affairs doctrine. This choice of forum provision does not preclude or contract the scope of exclusive federal or concurrent jurisdiction for any actions brought under the Securities Act or the Exchange Act. Accordingly, our exclusive forum provision will not relieve us of our duties to comply with the federal securities laws and the rules and regulations thereunder, and our stockholders will not be deemed to have waived our compliance with these laws, rules and regulations. The choice of forum provision in our amended and restated certificate of incorporation may limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us.
If we fail to maintain an effective system of disclosure controls and procedures and internal control over financial reporting, we may not be able to accurately report our financial results or prevent fraud.
Ensuring that we have adequate disclosure controls and procedures, including internal controls over financial reporting, in place so that we can produce accurate financial statements on a timely basis is costly and time-consuming and needs to be reevaluated frequently. We are required to comply with Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) and related rules and regulations. Pursuant to Section 404, our management is required to report on, and, if we cease to be an emerging growth company, our independent registered public accounting firm will have to attest to the effectiveness of, our internal control over financial reporting. Our management may conclude that our internal controls over financial reporting are not effective if we fail to cure any identified material weakness or otherwise.
Moreover, even if our management concludes that our internal controls over financial reporting are effective, our independent registered public accounting firm may conclude that our internal controls over financial reporting are not effective. In the future, our independent registered public accounting firm may not be satisfied with our internal controls over financial reporting or the level at which our controls are documented, designed, operated or reviewed, or it may interpret the relevant requirements differently from us. In addition, during the course of the evaluation, documentation and testing of our internal controls over financial reporting, we may identify deficiencies that we may not be able to remediate in time to meet the deadline imposed by the SEC for compliance with the requirements of Section 404 of the Sarbanes-Oxley Act. Any such deficiencies may also subject us to adverse regulatory consequences. If we fail to achieve and maintain the adequacy of our internal controls over financial reporting, as these standards may be modified, supplemented or amended from time to time, we may be unable to report our financial information on a timely basis, may not be able to conclude on an ongoing basis that we have effective internal control over financial reporting in accordance with the Sarbanes-Oxley Act, and may suffer adverse regulatory consequences or violations of listing standards. Any of the above could also result in a negative reaction in the financial markets due to a loss of investor confidence in the reliability of our financial statements.



122

 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Repurchases of Equity Securities

On July 25, 2019, the Company's Board of Directors authorized a share repurchase program providing for the repurchase of up to $10 million of our common stock through July 31, 2024. In January 2020, the Company's Board of Directors authorized a $20 million increase to the Company's existing common stock repurchase program providing for the repurchase of up to $30 million of the Company's common stock through July 31, 2024. The Company purchased $3.3 million of common shares under its $10 million authorization during the second half of 2019 and during the first nine months of 2020, an additional 6,092,259 shares were repurchased at a total cost of $14.7 million, inclusive of any transactional fees or commissions. The share repurchase program, as amended, provides that up to a maximum aggregate amount of $25 million shares may be repurchased in any given fiscal year. Repurchases will be made in accordance with applicable securities laws from time-to-time in the open market and/or in privately negotiated transactions at our discretion, subject to market conditions and other factors. The share repurchase plan does not require the purchase of any minimum number of shares and may be implemented, modified, suspended or discontinued in whole or in part at any time without further notice. All repurchased shares may potentially be withheld for the vesting of RSUs.

The following table provides information about our common stock repurchases during the quarter ended September 30, 2020.
Period Total number of shares purchased Average price paid per share (1) Total number of shares purchased as part of the publicly announced program Approximate dollar value of shares that may yet be purchased under the program (1)
July 1, 2020 to July 31, 2020 1,282,573  $ 1.71  1,282,573  $ 16,426,859 
August 1, 2020 to August 31, 2020 891,072  $ 2.59  891,072  $ 14,116,883 
September 1, 2020 to September 30, 2020 949,035  $ 2.32  949,035  $ 11,916,911 
Total 3,122,680  $ 2.15  3,122,680 

(1) Includes fees and commissions associated with the shares repurchased.





123

Item 6. Exhibits

Exhibit
number 		Description
10.1+#
10.2∞
10.3
10.4
10.5
31.1
31.2
32.1&
32.2&
101.INS XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH Inline XBRL Taxonomy Extension Schema Document.
101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB Inline XBRL Taxonomy Extension Labels Linkbase Document.
101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104 XBRL for cover page of the Company's Quarterly Report on Form 10-Q, included in the Exhibit 101 Inline XBRL Document Set.

# Previously filed.
∞ Confidential treatment has been requested as to certain portions of this exhibit, which portions have been omitted and submitted separately to the Securities and Exchange Commission.
+ Indicates a management contract or compensatory plan.
& This certification is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, as amended (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.


(1) Filed as an exhibit to our Quarterly Report on Form 10-Q filed on August 7, 2020.




124

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Quarterly Report on Form 10-Q to be signed on its behalf by the undersigned, thereunto duly authorized.
 
Elevate Credit, Inc.
Date: November 9, 2020 By: /s/ Jason Harvison
Jason Harvison
  Chief Executive Officer
(Principal Executive Officer)
 
Date: November 9, 2020 By: /s/ Christopher Lutes
Christopher Lutes
  Chief Financial Officer
(Principal Financial Officer)




125
CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. SUCH PORTIONS ARE MARKED AS INDICATED WITH BRACKETS (“[****]”) BELOW

Execution Version
FIRST AMENDMENT TO FIFTH AMENDED AND RESTATED FINANCING AGREEMENT
    This FIRST AMENDMENT TO FIFTH AMENDED AND RESTATED FINANCING AGREEMENT (this “Amendment”) is made and entered into as of July 31, 2020 by and among Rise SPV, LLC, a Delaware limited liability company ( “Rise SPV”), and Today Card, LLC, a Delaware limited liability company (“Today Card”; together with Rise SPV, the “US Term Note Borrowers”), Elevate Credit International Ltd., a company incorporated under the laws of England with number 05041905 (the “UK Borrower”), as the UK Borrower, Elevate Credit Service, LLC, a Delaware limited liability company, as the US Last Out Term Note Borrower (“Elevate Credit” or the “US Last Out Term Note Borrower”; the US Term Note Borrowers, the UK Borrower and the US Last Out Term Note Borrower, each a “Borrower” and collectively, the “Borrowers”), the Guarantors (as defined in the Financing Agreement described below) party hereto (such Guarantors, collectively with the Borrowers, the “Credit Parties”), and Victory Park Management, LLC, as administrative agent and collateral agent for the Lenders and the Holders (in such capacity, the “Agent”). Capitalized terms used and not otherwise defined herein shall have the respective meanings ascribed to them in the Financing Agreement described below.
WHEREAS, the Credit Parties, the Lenders (as defined therein) and the Agent are parties to that certain Fifth Amended and Restated Financing Agreement dated as of February 7, 2019 (as amended, restated, supplemented or otherwise modified from time to time, the “Financing Agreement”); and
WHEREAS, the Credit Parties and the Agent desire to amend certain provisions of the Financing Agreement on the terms set forth herein.
NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt, adequacy and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
1.Amendments to Financing Agreement. Effective as of the date hereof, (a) the Financing Agreement is hereby amended as set forth in Exhibit A hereto, with text marked in underline indicating additions and text marked in strikethrough indicating deletions thereto and Schedules 7.14 and 8.3(d) delivered to Agent on or prior to the date hereof are added as new Schedules 7.14 and 8.3(d) to the Financing Agreement, respectively.
2.Conditions Precedent. This Amendment shall become effective upon the satisfaction in full of each of the following conditions:
(a)the execution and delivery of this Amendment by the Credit Parties and Agent;


(b)Agent’s receipt of (i) corresponding amendments to the FinWise Financing Agreement and the Elastic Financing Agreement in form and substance reasonably acceptable to Agent and (ii) the other documents set forth on the closing checklist attached as Schedule I hereto in form and substance reasonably acceptable to Agent;

(c)the Borrowers shall have executed and delivered, or caused to be delivered, to the Agent evidence satisfactory to the Agent that the Borrowers shall pay to the Agent on the date hereof all fees and other amounts due and owing thereon under this Amendment and the other Transaction Documents;

(d)the representations and warranties of the Credit Parties contained herein and in the Financing Agreement shall be true and correct except to the extent such representations and warranties expressly relate to an earlier date, in which case such representations and warranties shall be true and correct as of such earlier date; and

(e)no Event of Default shall have occurred and be continuing or would result from the transaction contemplated hereby.

3.General Release. In consideration of the Agent’s agreements contained in this Amendment, each Credit Party hereby irrevocably releases and forever discharge the Lenders, the Holders and the Agent and their respective affiliates, subsidiaries, successors, assigns, directors, officers, employees, agents, consultants, attorneys, managers, investment managers, partners, participants, members, principals and portfolio companies (each, a “Released Person”) of and from any and all claims, suits, actions, investigations, proceedings or demands, whether based in contract, tort, implied or express warranty, strict liability, criminal or civil statute or common law of any kind or character, known or unknown, which such Credit Party ever had or now has against Agent, any Lender, any Holder or any other Released Person which relates, directly or indirectly, to any acts or omissions of Agent, any Lender, any Holder or any other Released Person relating to the Financing Agreement or any other Transaction Document on or prior to the date hereof.
4.Representations and Warranties of the Credit Parties. To induce the Agent to execute and deliver this Amendment, each Credit Party represents, warrants and covenants that:
(a)The execution, delivery and performance by each Credit Party of this Amendment and all documents and instruments delivered in connection herewith have been duly authorized by all necessary action required on its part, and this Amendment and all documents and instruments delivered in connection herewith are legal, valid and binding obligations of such Credit Party enforceable against such Credit Party in accordance with its terms except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies.
(b)Each of the representations and warranties set forth in the Transaction Documents is true and correct on and as of the date hereof as if made on the date hereof, except
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to the extent such representations and warranties expressly relate to an earlier date, in which case such representations and warranties shall be true and correct as of such earlier date, and each of the agreements and covenants in the Transaction Documents is hereby reaffirmed with the same force and effect as if each were separately stated herein and made as of the date hereof.

(c)Neither the execution, delivery and performance of this Amendment nor the consummation of the transactions contemplated hereby or thereby does or shall (i) result in a violation of any Credit Party’s certificate of incorporation, certificate of formation, bylaws, limited liability company agreement or other governing documents, or the terms of any Capital Stock or other Equity Interests of any Credit Party; (ii) conflict with, or constitute a breach or default (or an event which, with notice or lapse of time or both, would become a breach or default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which any Credit Party is a party; (iii) result in any “price reset” or other material change in or other modification to the terms of any Indebtedness, Equity Interests or other securities of any Credit Party; or (iv) result in a violation of any law, rule, regulation, order, judgment or decree.

(d)No Event of Default has occurred or is continuing under this Amendment or any other Transaction Document.

5.Ratification of Liability. Each Credit Party, as debtor, grantor, pledgor, guarantor, assignor, or in other similar capacity in which such party grants liens or security interests in its properties or otherwise acts as an accommodation party or guarantor, as the case may be, under the Transaction Documents, hereby ratifies and reaffirms all of its payment and performance obligations and obligations to indemnify, contingent or otherwise, under each Transaction Document to which such party is a party, and each such party hereby ratifies and reaffirms its grant of liens on or security interests in its properties pursuant to such Transaction Documents to which it is a party as security for the obligations under or with respect to the Financing Agreement, the Notes and the other Transaction Documents, and confirms and agrees that such liens and security interests hereafter secure all of the obligations under the Transaction Documents, including, without limitation, all additional obligations hereafter arising or incurred pursuant to or in connection with this Amendment or any Transaction Document. Each Credit Party further agrees and reaffirms that the Transaction Documents to which it is a party now apply to all obligations as modified hereby (including, without limitation, all additional obligations hereafter arising or incurred pursuant to or in connection with this Amendment or any Transaction Document). Each such party (a) further acknowledges receipt of a copy of this Amendment and all other agreements, documents, and instruments executed or delivered in connection herewith, (b) consents to the terms and conditions of same, and (c) agrees and acknowledges that each of the Transaction Documents, as modified hereby, remains in full force and effect and is hereby ratified and confirmed. Except as expressly provided herein, the execution of this Amendment shall not operate as a waiver of any right, power or remedy of any Lender, any Holder or the Agent, nor constitute a waiver of any provision of any of the Transaction Documents nor constitute a novation of any of the obligations under the Transaction Documents.
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6.Reference to and Effect Upon the Transaction Documents.
(a)Except as specifically amended hereby, all terms, conditions, covenants, representations and warranties contained in the Transaction Documents, and all rights of the Lenders, the Holders and the Agent and all of the obligations under the Transaction Documents, shall remain in full force and effect, including, but not limited to, the right of first refusal in favor of Agent and its designees set forth in Section 8.19 of the Financing Agreement. Each Credit Party hereby confirms that the Transaction Documents are in full force and effect, and that no Credit Party has any right of setoff, recoupment or other offset or any defense, claim or counterclaim with respect to any Transaction Document or the Credit Parties’ obligations thereunder.
(b)Except as expressly set forth herein, the execution, delivery and effectiveness of this Amendment and any consents or waivers set forth herein shall not directly or indirectly: (i) create any obligation to make any further loans or to defer any enforcement action after the occurrence of any Event of Default; (ii) constitute a consent or waiver of any past, present or future violations of any Transaction Document; (iii) amend, modify or operate as a waiver of any provision of any Transaction Document or any right, power or remedy of any Lender, any Holder or the Agent or (iv) constitute a course of dealing or other basis for altering any obligations under the Transaction Documents or any other contract or instrument. Except as expressly set forth herein, each Lender, each Holder and the Agent reserve all of their rights, powers, and remedies under the Transaction Documents and applicable law. All of the provisions of the Transaction Documents, including, without limitation, the time of the essence provisions, are hereby reiterated, and if ever waived previously, are hereby reinstated.

(c)From and after the date hereof, (i) the term “Agreement” in the Financing Agreement, and all references to the Financing Agreement in any Transaction Document shall mean the Financing Agreement, as amended by this Amendment, and (ii) the term “Transaction Documents” defined in the Financing Agreement shall include, without limitation, this Amendment and any agreements, instruments and other documents executed or delivered in connection herewith.

7.Costs and Expenses. In addition to, and not in lieu of, the terms of the Transaction Documents relating to the reimbursement of the Lenders’, the Holders’ and the Agent’s fees and expenses, the Credit Parties shall reimburse each Lender, each Holder and the Agent, as the case may be, promptly on demand for all fees, costs, charges and expenses, including the fees, costs and expenses of counsel and other expenses incurred in connection with this Amendment.
8.Governing Law; Jurisdiction; Jury Trial. All questions concerning the construction, validity, enforcement and interpretation of this Amendment shall be governed by the internal laws of the State of Delaware, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Delaware or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of Delaware. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts
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sitting in Wilmington, Delaware, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Amendment and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AMENDMENT OR ANY TRANSACTIONS CONTEMPLATED HEREBY.
9.No Strict Construction. The language used in this Amendment will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party.
10.Counterparts. This Amendment may be executed in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. Signatures of the parties hereto transmitted by facsimile or by electronic media or similar means shall be deemed to be their original signature for all purposes.
11.Severability. The invalidity, illegality, or unenforceability of any provision in or obligation under this Amendment in any jurisdiction shall not affect or impair the validity, legality, or enforceability of the remaining provisions or obligations under this Amendment or of such provision or obligation in any other jurisdiction. If feasible, any such offending provision shall be deemed modified to be within the limits of enforceability or validity; provided that if the offending provision cannot be so modified, it shall be stricken and all other provisions of this Amendment in all other respects shall remain valid and enforceable.
12.Further Assurances. The parties hereto shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as any other party may reasonably request in order to carry out the intent and accomplish the purposes of this Amendment and the consummation of the transactions contemplated hereby.
13.Headings. The headings of this Amendment are for convenience of reference and shall not form part of, or affect the interpretation of, this Amendment.
14.Other Agreement. The parties hereto hereby acknowledge and agree that to the extent any Financing Agreement requires the signature of the UK Borrower in order to amend or waive any provision of such Financing Agreement or any other Transaction Document, including pursuant to this Amendment, no party hereto shall make, raise, or otherwise assert any claim (or support the making, raising or other assertion of any such claim) that this Amendment is not
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legal, valid and binding upon any of the parties hereto and/or that the terms hereof do not modify the applicable provisions of the applicable Transaction Documents or otherwise are not enforceable against any of the parties hereto, in each case, solely as a result of the UK Borrower not being a signatory hereto. It is agreed that the acknowledgements and agreements of the respective parties hereto under this Section 15 are unique and that no adequate remedy exists at law if any such party shall breach its obligations under this Section 15, that it would be difficult to determine the amount of damages resulting therefrom, and that such breach would cause irreparable injury to each of the other parties hereto. Therefore, each party hereto shall be entitled to injunctive relief to prevent or restrain any breach of this Section 15 by any of the other parties hereto.
[Remainder of Page Intentionally Left Blank; Signature Pages Follow]


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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed on the date first above written.
US TERM NOTE BORROWERS:

RISE SPV, LLC, a Delaware limited liability company, as a US Term Note Borrower

By: Elevate Credit, Inc., a Delaware
Corporation, its Sole Member

By:    /s/ Jason Harvison                
Name:    Jason Harvison
Title:    Chief Executive Officer

TODAY CARD, LLC, a Delaware limited liability company, as a US Term Note Borrower

By: Elevate Credit, Inc., a Delaware
Corporation, its Sole Member

By:    /s/ Jason Harvison                
Name:    Jason Harvison
Title:    Chief Executive Officer


US LAST OUT TERM NOTE BORROWER:

ELEVATE CREDIT SERVICE, LLC, a Delaware limited liability company, as the US Last Out Term Note Borrower

By:    Elevate Credit, Inc., as Sole Member

By:    /s/ Jason Harvison                
Name:    Jason Harvison
Title:    Chief Executive Officer                

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0 = 1 US_143161607v2


IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed on the date first above written.
GUARANTORS:

ELEVATE CREDIT, INC.

By:    /s/ Jason Harvison                
Name:    Jason Harvison
Title:    Chief Executive Officer

Elastic Financial, LLC
Elevate Decision Sciences, LLC
RISE Credit, LLC
Financial Education, LLC
EF Financial, LLC

By: Elevate Credit, Inc., as Sole Member of each of the above-named entities

By:    /s/ Jason Harvison                
Name:    Jason Harvison
Title:    Chief Executive Officer

RISE Credit Service of Ohio, LLC
RISE Credit Service of Texas, LLC

By: RISE Credit, LLC, as Sole Member of each of the above-named entities

By: Elevate Credit, Inc., as its Sole Member

By:    /s/ Jason Harvison                
Name:    Jason Harvison
Title:    Chief Executive Officer




IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed on the date first above written.
GUARANTORS (CONT.), EACH AS AN “ELEVATE CREDIT SUBSIDIARY”:


RISE Financial, LLC
RISE Credit of Alabama, LLC
RISE Credit of Arizona, LLC
RISE Credit of California, LLC
RISE Credit of Colorado, LLC
RISE Credit of Delaware, LLC
RISE Credit of Florida, LLC
RISE Credit of Georgia, LLC
RISE Credit of Idaho, LLC
RISE Credit of Illinois, LLC
RISE Credit of Kansas, LLC
RISE Credit of Louisiana, LLC
RISE Credit of Mississippi, LLC
RISE Credit of Missouri, LLC
RISE Credit of Nebraska, LLC
RISE Credit of Nevada, LLC
RISE Credit of North Dakota, LLC
RISE Credit of Oklahoma, LLC
RISE Credit of South Carolina, LLC
RISE Credit of South Dakota, LLC
RISE Credit of Tennessee, LLC
RISE Credit of TEXAS, LLC
RISE Credit of Utah, LLC
RISE Credit of Virginia, LLC
By: RISE SPV, LLC, as Sole Member of each of the above-named entities

By: Elevate Credit, Inc., as its Sole Member


By:    /s/ Jason Harvison                
Name:    Jason Harvison
Title:    Chief Executive Officer



    IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed on the date first above written.
AGENT:
VICTORY PARK MANAGEMENT, LLC

By:    /s/ Scott R. Zemnick                
Name: Scott R. Zemnick
Title: Manager


Schedule I

CLOSING CHECKLIST


Exhibit A
AMENDMENT TO THE FINANCING AGREEMENT
(see attached)


FIFTH AMENDED AND RESTATED FINANCING AGREEMENT
Dated as of February 7, 2019

by and among

RISE SPV, LLC, a Delaware limited liability company, and TODAY CARD, LLC, a Delaware limited liability company, as the US Term Note Borrowers (together, the “US Term Note Borrowers”),

ELEVATE CREDIT INTERNATIONAL LTD., a company incorporated under the laws of England with number 05041905 (the “UK Borrower”),

ELEVATE CREDIT SERVICE, LLC, a Delaware limited liability company, as the US Last Out Term Note Borrower (“Elevate Credit” or the “US Last Out Term Note Borrower”),

THE GUARANTORS FROM TIME TO TIME PARTY HERETO,

THE LENDERS PARTY HERETO

and

VICTORY PARK MANAGEMENT, LLC
as Agent




TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS; CERTAIN TERMS 2
Section 1.1 Definitions 2
Section 1.2 Terms Generally 39
Section 1.3 Accounting and Other Terms
3940
Section 1.4 Borrower Representative
3940
Section 1.5 Payments in Foreign Currencies 40
Section 1.6 Exchange Rates
4041
Section 1.7 Judgment Currency 41
ARTICLE 2 BORROWERS’ AUTHORIZATION OF ISSUE 41
Section 2.1 Senior Secured Term Notes; Senior Secured UK Term Notes; Senior Secured Fourth Tranche US Last Out Term Notes 41
Section 2.2 Interest 48
Section 2.3 Redemptions and Payments. 49
Section 2.4 Payments 54
Section 2.5 Dispute Resolution
5455
Section 2.6 Taxes. 55
Section 2.7 Reissuance. 57
Section 2.8 Register 58
Section 2.9 Maintenance of Register 58
Section 2.10 Monthly Maintenance Fee 58
ARTICLE 3 FIFTH RESTATEMENT CLOSING
5859
Section 3.1 Fifth Restatement Closing
5859
ARTICLE 4 INTENTIONALLY OMITTED 60
ARTICLE 5 CONDITIONS TO FIFTH RESTATEMENT CLOSING AND EACH lENDER’S OBLIGATION TO PURCHASE 60
Section 5.1 Fifth Restatement Closing 60
Section 5.2 Subsequent Draws
6263
ARTICLE 6 RESERVED 64
ARTICLE 7 CREDIT PARTIES’ REPRESENTATIONS AND WARRANTIES 64
Section 7.1 Organization and Qualification 64
Section 7.2 Authorization; Enforcement; Validity 64
Section 7.3 Issuance of Securities 65
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Section 7.4 No Conflicts 65
Section 7.5 Consents 65
Section 7.6 Subsidiary Rights
6566
Section 7.7 Equity Capitalization 66
Section 7.8 Indebtedness and Other Contracts 67
Section 7.9 Off Balance Sheet Arrangements 67
Section 7.10 Ranking of Notes 67
Section 7.11 Title 67
Section 7.12 Intellectual Property Rights 67
Section 7.13 Creation, Perfection, and Priority of Liens 68
Section 7.14 Absence of Certain Changes; Insolvency 68
Section 7.15 Absence of Proceedings 69
Section 7.16 No Undisclosed Events, Liabilities, Developments or Circumstances 69
Section 7.17 No Disagreements with Accountants and Lawyers 69
Section 7.18 No General Solicitation; Placement Agent’s Fees. 69
Section 7.19 Reserved. 69
Section 7.20 Tax Status
6970
Section 7.21 Transfer Taxes 70
Section 7.22 Conduct of Business; Compliance with Laws; Regulatory Permits 70
Section 7.23 Foreign Corrupt Practices 71
Section 7.24 Reserved 71
Section 7.25 Environmental Laws
7172
Section 7.26 Margin Stock 72
Section 7.27 ERISA; Pension Schemes 72
Section 7.28 Investment Company
7273
Section 7.29 U.S. Real Property Holding Corporation 73
Section 7.30 Internal Accounting and Disclosure Controls 73
Section 7.31 Accounting Reference Date 73
Section 7.32 Transactions With Affiliates 73
Section 7.33 Acknowledgment Regarding Holders’ Purchase of Securities 73
Section 7.34 Reserved. 74
Section 7.35 Insurance 74
Section 7.36 Full Disclosure 74
Section 7.37 Employee Relations 74
Section 7.38 Certain Other Representations and Warranties
7475
Section 7.39 Patriot Act 75
Section 7.40 Material Contracts 75
ARTICLE 8 COVENANTS 75
Section 8.1 Financial Covenants 75
Section 8.2 Deliveries 77
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Section 8.3 Notices
7879
Section 8.4 Rank
8182
Section 8.5 Incurrence of Indebtedness
8182
Section 8.6 Existence of Liens 82
Section 8.7 Restricted Payments 82
Section 8.8 Mergers; Acquisitions; Asset Sales 83
Section 8.9 No Further Negative Pledges
8384
Section 8.10 Affiliate Transactions 84
Section 8.11 Insurance. 84
Section 8.12 Corporate Existence and Maintenance of Properties 85
Section 8.13 Non-circumvention 85
Section 8.14 Change in Business; Change in Accounting; Centre of Main Interest; Elevate Credit Parent
8586
Section 8.15 U.S. Real Property Holding Corporation 86
Section 8.16 Compliance with Laws 86
Section 8.17 Additional Collateral
8687
Section 8.18 Audit Rights; Field Exams; Appraisals; Meetings; Books and Records. 87
Section 8.19 Additional Issuances of Debt Securities; Right of First Refusal on New Indebtedness
8788
Section 8.20 Post-Closing Obligations. 88
Section 8.21 Use of Proceeds 89
Section 8.22 Fees, Costs and Expenses 90
Section 8.23 Modification of Organizational Documents and Certain Documents 90
Section 8.24 Joinder
9091
Section 8.25 Investments 91
Section 8.26 Further Assurances. 92
Section 8.27 Pensions Schemes 92
Section 8.28 Backup Servicer 93
Section 8.29 Claims Escrow Account 93
ARTICLE 9 CROSS GUARANTY 94
Section 9.1 Cross-Guaranty 94
Section 9.2 Waivers by Guarantors 94
Section 9.3 Benefit of Guaranty
9495
Section 9.4 Waiver of Subrogation, Etc 95
Section 9.5 Election of Remedies 95
Section 9.6 Limitation 95
Section 9.7 Contribution with Respect to Guaranty Obligations. 96
Section 9.8 Liability Cumulative
9697
Section 9.9 Stay of Acceleration 97
Section 9.10 Benefit to Credit Parties 97
Section 9.11 Indemnity 97
Section 9.12 Reinstatement 97
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Section 9.13 Guarantor Intent 97
Section 9.14 General 98
ARTICLE 10 RIGHTS UPON EVENT OF DEFAULT 98
Section 10.1 Event of Default 98
Section 10.2 Termination of Commitments and Acceleration Right. 101
Section 10.3 Consultation Rights 102
Section 10.4 Other Remedies 102
Section 10.5 Application of Proceeds. 103
ARTICLE 11 BANKRUPTCY MATTERS 103
ARTICLE 12 AGENCY PROVISIONS 105
Section 12.1 Appointment 105
Section 12.2 Binding Effect 107
Section 12.3 Use of Discretion 107
Section 12.4 Delegation of Duties
107108
Section 12.5 Exculpatory Provisions 108
Section 12.6 Reliance by Agent 108
Section 12.7 Notices of Default 109
Section 12.8 Non Reliance on the Agent and Other Holders 109
Section 12.9 Indemnification 110
Section 12.10 The Agent in Its Individual Capacity 110
Section 12.11 Resignation or Removal of the Agent; Successor Agent 110
Section 12.12 Reimbursement by Holders and Lenders 111
Section 12.13 Withholding 111
Section 12.14 Release of Collateral or Guarantors 112
ARTICLE 13 MISCELLANEOUS 112
Section 13.1 Payment of Expenses 112
Section 13.2 Governing Law; Jurisdiction; Jury Trial 113
Section 13.3 Counterparts 114
Section 13.4 Headings 114
Section 13.5 Severability 114
Section 13.6 Entire Agreement; Amendments 114
Section 13.7 Notices 115
Section 13.8 Successors and Assigns; Participants 117
Section 13.9 No Third Party Beneficiaries 119
Section 13.10 Survival 119
Section 13.11 Further Assurances 120
Section 13.12 Indemnification 120
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Section 13.13 No Strict Construction 121
Section 13.14 Waiver 121
Section 13.15 Payment Set Aside 121
Section 13.16 Independent Nature of the Lenders’ and the Holders’ Obligations and Rights 121
Section 13.17 Set-off; Sharing of Payments 122
Section 13.18 Reserved
122123
Section 13.19 Reaffirmation
122123
Section 13.20 Release of Agent and Lenders 124
Section 13.21 Buy-Out Option 124
Section 13.22 Replacement of Lenders and Holders 126
Section 13.23 Creditor Debtor Relationship 127

EXHIBITS
Exhibit A-1    Form of Senior Secured US Term Note
Exhibit A-2(a) Form of Senior Secured UK Term Note (USD)
Exhibit A-2(b) Form of Senior Secured UK Term Note (GBP)
Exhibit A-3    [Reserved]
Exhibit A-4    Form of Senior Secured Fourth Tranche US Last Out Term Note
Exhibit B    Reserved
Exhibit C    Form of Secretary’s Certificate
Exhibit D    Form of Officer’s Certificate
Exhibit E    Form of Compliance Certificate
Exhibit F    Form of Notice of Borrowing
Exhibit G    Form of Joinder Agreement
Exhibit H    Index of Fifth Restatement Closing Documents


SCHEDULES
Schedule 1.1(a)    Credit Card Guidelines
Schedule 7.1        Subsidiaries
Schedule 7.5        Consents
Schedule 7.7        Equity Capitalization
Schedule 7.8        Indebtedness and Other Contracts
Schedule 7.12        Intellectual Property Rights
Schedule 7.14        Absence of Certain Changes; Insolvency
Schedule 7.22        Conduct of Business; Regulatory Permits
Schedule 7.27        ERISA and UK Pension Schemes
Schedule 7.32        Transactions with Affiliates
Schedule 7.40        Material Contracts
Schedule 8.3(d)    Notice of Certain Proceedings as of First Amendment Effective Date
Schedule 8.25        Existing Investments

5

FIFTH AMENDED AND RESTATED FINANCING AGREEMENT
This FIFTH AMENDED AND RESTATED FINANCING AGREEMENT (as modified, amended, extended, restated, amended and restated and/or supplemented from time to time, this “Agreement”), dated as of February 7, 2019 is being entered into by and among Rise SPV, LLC, a Delaware limited liability company ( “Rise SPV”), and Today Card, LLC, a Delaware limited liability company (“Today Card”; together with Rise SPV, the “US Term Note Borrowers”), Elevate Credit International Ltd., a company incorporated under the laws of England with number 05041905 (the “UK Borrower”), as the UK Borrower, Elevate Credit Service, LLC, a Delaware limited liability company, as the US Last Out Term Note Borrower (“Elevate Credit” or the “US Last Out Term Note Borrower”; the US Term Note Borrowers, the UK Borrower and the US Last Out Term Note Borrower, each a “Borrower” and collectively, the “Borrowers”), Elevate Credit, Inc., a Delaware corporation (“Elevate Credit Parent”), as a Guarantor (as defined herein), the other Guarantors (as defined herein) from time to time party hereto (such Guarantors, collectively with the Borrowers, the “Credit Parties”), Victory Park Management, LLC, as administrative agent and collateral agent (in such capacity, the “Agent”) for the Lenders and the Holders (each as defined herein), and such Lenders and Holders from time to time party hereto.

RECITALS
WHEREAS, the Borrowers, the other Credit Parties, Agent and Lenders are parties to that certain Fourth Amended and Restated Financing Agreement dated as of October 15, 2018 by and among the Borrowers party thereto, the other Credit Parties party thereto, Agent and the Lenders and Holders party thereto (as amended, supplemented or otherwise modified from time to time and in effect immediately prior to the effectiveness of this Agreement, the “Fourth Amended and Restated Financing Agreement”) which amended and restated in its entirety, without constituting a novation, that certain Third Amended and Restated Financing Agreement dated as of February 1, 2017 by and among the Borrowers party thereto, the other Credit Parties party thereto, Agent and the Lenders and Holders party thereto (as amended, supplemented or otherwise modified from time to time and in effect immediately prior to the effectiveness of this Agreement, the “Third Amended and Restated Financing Agreement”) which previously amended and restated in its entirety, without constituting a novation, that certain Second Amended and Restated Financing Agreement dated as of June 30, 2016 (as the same was amended, supplemented or otherwise modified from time to time and in effect immediately prior to the effectiveness of the Third Amended and Restated Financing Agreement (the “Original Financing Agreement” or the “Second Amended and Restated Financing Agreement”) by and among the Borrowers party thereto, the other Credit Parties party thereto, Agent and the Lenders and Holders party thereto;
WHEREAS, the parties hereto desire to enter into this Agreement to, among other things, amend and restate in its entirety the Fourth Amended and Restated Financing Agreement, without constituting a novation of the obligations, liabilities and indebtedness of the Borrowers and Guarantors thereunder, on the terms and subject to the conditions contained herein; and


WHEREAS, contemporaneously with the execution and delivery of this Agreement, the Borrowers shall pay and reimburse the Agent for itself and on behalf of the Holders and Lenders for all expenses incurred in connection with the transactions contemplated hereunder.
NOW, THEREFORE, in consideration of the premises and the covenants and agreements contained herein, the Borrowers, the Guarantors, the Agent and each Lender hereby amend and restate the Fourth Amended and Restated Financing Agreement in its entirety without effecting a novation of the Obligations existing thereunder, and otherwise agree as follows:
Article 1
DEFINITIONS; CERTAIN TERMS

Section 1.1Definitions. As used in this Agreement, the following terms have the respective meanings indicated below, such meanings to be applicable equally to both the singular and plural forms of such terms:
“956 Impact” has the meaning set forth in Section 8.24.
“956 Limitations” means, collectively, that notwithstanding any other provisions of this Agreement, (a) no Obligation of any US Term Note Borrower or the US Last Out Term Note Borrower (including any guaranty of any Obligation of the US Term Note Borrower or the US Last Out Term Note Borrower) shall constitute an “Obligation” with respect to any UK Credit Party, (b) no UK Credit Party shall guaranty or otherwise be liable for any other Credit Party’s guaranty of any Obligation of any US Term Note Borrower or the US Last Out Term Note Borrower and (c) no assets of any UK Credit Party shall serve as collateral security for any Obligations of any US Term Note Borrower or the US Last Out Term Note Borrower (including any guaranty of any Obligations of any US Term Note Borrower or the US Last Out Term Note Borrower), it being understood and acknowledged that the preceding provisions are intended to ensure that no UK Credit Party shall be treated as holding any obligations of a United States person pursuant to Section 956 of the Internal Revenue Code and shall be interpreted consistent with this intention.
“1933 Act” means the Securities Act of 1933, as amended.
“Acceptable Bank” means (a) a bank or financial institution which has a rating for its long-term unsecured and non-credit-enhanced debt obligations of A-1 or higher by Standard & Poor’s Rating Services or Fitch Ratings Ltd. or P-1 or higher by Moody’s Investors Service Limited or a comparable rating from an internationally recognized credit rating agency; or (b) any other bank or financial institution approved by the Agent.
“Accounting Reference Date” means December 31st of each year.
“Acquisition” means any transaction or series of related transactions for the purpose of or resulting, directly or indirectly, in (a) the acquisition of all or substantially all of the assets of a Person, or of all or substantially all of any business line, unit or division of a Person, (b) the
2

acquisition of in excess of 50% of the Equity Interests of any Person, or otherwise causing any Person to become a Subsidiary, or (c) a merger or consolidation or any other combination with another Person.
“Additional Amount” has the meaning set forth in Section 2.6(b).
“Affiliate” means, with respect to a specified Person, another Person that (i) is a director or officer of such specified Person, or (ii) directly or indirectly through one or more intermediaries, Controls, is Controlled by or is under common Control with the Person specified.
“Agent” has the meaning set forth in the introductory paragraph hereto.
“Agreement” has the meaning set forth in the introductory paragraph hereto.
“Agreement Currency” has the meaning set forth in Section 1.7.
“Asset Sale” means the sale, lease, license, conveyance or other disposition of any assets or rights of any Credit Party or any Credit Party’s Subsidiaries.
“Backup Servicer” means a Person, reasonably satisfactory to Agent, that the Borrowers have appointed and that is providing backup servicing and its permitted successors and assigns reasonably satisfactory to Agent.
“Backup Servicing Agreement” means the Backup Servicing Agreement among the Credit Parties, the Backup Servicer and the Agent as amended, restated, supplemented or otherwise modified from time to time in accordance with the terms thereof.
“Bank” means a Federal Deposit Insurance Corporation insured state or federally chartered bank.
“Bank Transaction Documents” means, collectively, those certain program agreements, loan sale agreements or participation sale agreements, as applicable, or any other similar agreements by and between any Bank and a Credit Party pursuant to which such Bank may sell to such Credit Party from time to time Consumer Loans originated by such Bank or participation interests therein, in each case, in form and substance reasonably acceptable to Agent and as amended, restated, supplemented or otherwise modified from time to time in accordance with the terms of this Agreement.
“Bankruptcy Code” has the meaning set forth in Section 10.1(c).
“Bankruptcy Law” has the meaning set forth in Section 10.1(c).
“Base Rate” means
(a)    at any time on or after February 1, 2019 but prior to the first Issuance Date after February 1, 2019, a rate equal to the greatest of (i) the LIBOR Rate as of February 1, 2019, (ii) the Swap Rate as of February 1, 2019, and (iii) one percent per annum (1%); and
3

(b)    at any time after the first Issuance Date after February 1, 2019 and as of each Issuance Date, a rate equal to the weighted average of (i) the then-current Base Rate immediately preceding such Issuance Date and (ii) the greatest of (A) the LIBOR Rate as of such Issuance Date, (B) the Swap Rate as of such Issuance Date and (C) one percent per annum (1%). For the avoidance of doubt, the resulting weighted average calculated in clause (b) shall be used as the then-current Base Rate in clause (b)(i) when calculating the Base Rate on the next succeeding Issuance Date.
“Blocked Account” means each “Controlled Account” (as defined in the US Security Agreement) that is subject to the full dominion and control of the Agent and each “Blocked Account” (as defined in the UK Security Documents).
“Book Value of Equity” means, as of any date of determination, total assets less intangible assets less total liabilities, in each case, of the Credit Parties and their Subsidiaries.
“Borrower” and “Borrowers” have the meanings set forth in the introductory paragraph hereto.
“Borrower Representative” has the meaning set forth in Section 1.4.
“Borrowing Base (UK)” means, on any date of determination, the sum of:
    (a)    (i) the aggregate principal balance of the Eligible UK Consumer Loans on such date less any Excess Concentration Amounts multiplied by (ii) eighty-five percent (85%), plus
    (b)    one hundred percent (100%) of the balance of the unrestricted (it being agreed and acknowledged that cash collateral securing surety bonds and letters of credit posted or maintained by the UK Borrower shall, in each case, be deemed to be “restricted”) Pounds Sterling denominated cash and Cash Equivalent Investments of the UK Borrower in a Funding Account or Collection Account on such date for which the Agent shall have a first-priority perfected Lien. For purposes of clarification, unrestricted cash includes all cash of the UK Borrower that is being held by an ACH provider prior to remittance to the UK Borrower.
“Borrowing Base (US)” means, on any date of determination, the sum of:
    (a)    (i) the sum of the aggregate principal balance on such date of (x) the Eligible US Consumer Loans on such date, less any Excess Concentration Amounts and (y) the portion of the Eligible Credit Card Receivables in which Today Card owns a participation interest pursuant to the CCB Participation Agreement on such date (for the avoidance of doubt, any portion of an Eligible Credit Card Receivable with respect to which an interest is retained by CCB is excluded hereunder), less any Excess Concentration Amounts multiplied by (ii) eighty-five percent (85%), plus
    (b)    one hundred percent (100%) of the balance of the unrestricted (it being agreed and acknowledged that cash collateral securing surety bonds and letters of credit posted
4

or maintained by the US Term Note Borrowers shall, in each case, be deemed to be “restricted”) Dollar denominated cash and Cash Equivalent Investments of the US Term Note Borrowers in a Funding Account or Collection Account on such date for which the Agent shall have a first-priority perfected Lien. For purposes of clarification, unrestricted cash includes all cash of the US Term Note Borrowers that is being held by an ACH provider prior to remittance to a US Term Note Borrower.
“Borrowing Base Certificate” means a borrowing base certificate signed by the chief financial officer of the Borrower Representative (or other authorized executive officer performing a similar function), in substantially the form included in the Form of Notice of Borrowing attached hereto as Exhibit F.
“Business Day” means any day other than Saturday or Sunday or any day that banks in Chicago, Illinois are required or permitted to close.
“Capital Stock” means (1) in the case of a corporation, corporate stock; (2) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock; (3) in the case of a partnership or limited liability company, partnership interests (whether general or limited) or membership interests; and (4) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person, but excluding from all of the foregoing any debt securities convertible into, or exchangeable for, Capital Stock, whether or not such debt securities include any right of participation with Capital Stock.
“Cash Equivalent Investment” means, at any time, (a) any evidence of debt, maturing not more than one year after such time, issued or guaranteed by the United States Government, the government of the United Kingdom or any respective agency thereof, (b) commercial paper, maturing not more than one year from the date of issue, or corporate demand notes, in each case rated at least A-l by Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc. or P-l by Moody’s Investors Service, Inc., (c) any certificate of deposit, time deposit or banker’s acceptance, maturing not more than one year after such time, or any overnight Federal Funds transaction that is issued or sold by 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 an Acceptable Bank, (d) any repurchase agreement entered into with any commercial banking institution of the nature referred to in clause (c) which (i) is secured by a fully perfected security interest in any obligation of the type described in any of clauses (a) through (c) 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 such commercial banking institution or Acceptable Bank thereunder, (e) money market accounts or mutual funds which invest exclusively in assets satisfying the foregoing requirements, and (f) other short term liquid investments approved in writing by Agent.
“CC Financing Agreement” means that certain Financing Agreement dated as of July 31, 2020 by and among CC SPV, as borrower, Elevate Credit, as a guarantor, the other “Guarantors” from time to time party thereto, the “Lenders” from time to time party thereto and Victory Park Management, LLC, as administrative agent and collateral agent, and each Person
5

who becomes a party thereto pursuant to the joinder provisions thereof, as amended, restated, supplemented or otherwise modified from time to time to the extent permitted by the Intercreditor Agreement.
“CC SPV” means EC SPV, Ltd., an exempted company incorporated with limited liability under the laws of the Cayman Islands.
“CCB” means Capital Community Bank, a Utah chartered bank, and its successors and assigns.
“CCB Participation Agreement” means that certain Participation Agreement dated as of November 14, 2018 by and between Today Card and CCB in form and substance acceptable to Agent.
“Change of Control” means, (a) with respect to any Credit Party or any Subsidiary of any Credit Party, that such Person shall, directly or indirectly, in one or more related transactions, (i) consolidate or merge with or into (whether or not such Person is the surviving corporation) another Person or (ii) sell, assign, transfer, lease, license, convey or otherwise dispose of all or substantially all of the properties or assets of such Person to another Person; provided, the foregoing notwithstanding, any of the Elevate Credit Subsidiaries (other than the Borrowers) may suspend its operations in any jurisdiction in which it operates and dissolve as a result of a decision by the Credit Parties to exit one or more markets from time to time; (b) the accumulation after October 15, 2018, whether directly, indirectly, beneficially or of record, by any individual, entity or group (within the meaning of Sections 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended) of 50% or more of the shares of the outstanding Capital Stock of the Elevate Credit Parent, or, in any event, that number of shares of outstanding Capital Stock of Elevate Credit Parent representing voting control of Elevate Credit Parent, whether by merger, consolidation, sale or other transfer of shares of Capital Stock (other than a merger or consolidation where the stockholders of Elevate Credit Parent prior to the merger or consolidation are the holders of a majority of the voting securities of the entity that survives such merger or consolidation); (c) Elevate Credit Parent shall cease to own, beneficially and of record, for any reason at any time 100% of the Capital Stock of the US Term Note Borrowers, the UK Borrower or any of the Elevate Credit Subsidiaries, free and clear of all Liens (other than Liens in favor of the Agent) or (d) a Flotation has occurred.
“Charge Off” means, with respect to Consumer Loans or Credit Card Receivables, as applicable, an amount equal to the sum of the outstanding principal balance of Consumer Loans or Credit Card Receivables, as applicable, that (i) have a principal payment that became greater than sixty (60) days past due the scheduled payment date with respect to Consumer Loans or one hundred twenty (120) days past the scheduled payment date with respect to Credit Card Receivables, in each case, which such scheduled payment date shall not be fourteen (14) days (or, in the case of Modified and Re-Aged Consumer Loans or Modified and Re-Aged Credit Card Receivables that have been modified in accordance with a modification policy approved in writing by Agent, such other period of days agreed to by Agent) past the original payment date, (ii) are identified as fraudulent or where the underlying borrowers are in bankruptcy proceedings or (iii) is otherwise charged off in accordance with the Program Guidelines, in each case, in the
6

calendar month that includes such date of determination. “Charged Off” shall a meaning correlative thereto.
“Claims Escrow Account” has the meaning set forth in Section 8.28(a).
“Claims Escrow Account Funding Condition” means a condition that is satisfied if the principal balance of the Claims Escrow Account is Five Million Dollars ($5,000,000).
“Code” means the Internal Revenue Code of 1986, as amended.
“Collateral” means the “Collateral” as defined in each of the US Security Agreement and the relevant UK Security Documents.
“Collection Account” means, with respect to a Borrower, a deposit account of such Borrower approved in writing by the Agent, in which (a) all funds on deposit therein shall be solely amounts collected or received in respect of Consumer Loans and Credit Card Receivables and (b) no other party shall have a Lien or shall have perfected a Lien, other than any Lien of the Agent and customary common law or statutory rights of setoff of banks arising in connection with their depository relationship with such Borrower.
“Committed First Out Note Holder” has the meaning set forth in Section 13.21(a).
“Commitments” means, collectively, each of the US Term Note Commitments, the UK Term Note Commitments (USD), the UK Term Note Commitments (GBP) and the Fourth Tranche US Last Out Term Note Commitments.
“Compliance Certificate” means a compliance certificate signed by the chief financial officer of the Borrower Representative (or other authorized executive officer performing a similar function), in substantially the form attached hereto as Exhibit E.
“Consumer Credit” is defined in 12 C.F.R §202.2(h).
“Consumer Loan Agreement” means a consumer loan agreement (together with all related agreements, documents and instruments executed and/or delivered in connection therewith) or similar contract, pursuant to which (a) a Credit Party (i) agrees to make Consumer Loans from time to time or (ii) otherwise possesses the authority (as assignee or holder) to enforce the terms of a Consumer Loan or (b) the applicable Bank party to the applicable Bank Transaction Documents with a Credit Party that agrees to make Consumer Loans from time to time.
“Consumer Loan Guidelines” means those guidelines established by the Credit Parties for the administration of the Program described in clause (a) of the definition thereof, as amended, modified or supplemented from time to time by the Credit Parties with the prior written consent of the Agent.
“Consumer Loans” means unsecured consumer loans made (a) by the Credit Parties to individual residents of the United States of America and the United Kingdom in the ordinary
7

course of business or (b) by a Bank to individual residents of the United States of America in the ordinary course of business and either (i) purchased from such Bank by a Credit Party or (ii) participated by a Bank to a Credit Party, in the case of each of the foregoing clauses (i) and (ii), pursuant to the applicable Bank Transaction Documents.
“Contingent Obligation” means, as to any Person, any direct or indirect liability, contingent or otherwise, of that Person with respect to any indebtedness, lease, dividend or other obligation of another Person if the primary purpose or intent of the Person incurring such liability, or the primary effect thereof, is to provide assurance to the obligee of such liability that such liability will be paid or discharged, or that any agreements relating thereto will be complied with, or that the holders of such liability will be protected (in whole or in part) against loss with respect thereto.
“Control” means the possession, directly or indirectly, of the power (i) to vote 10% or more of the Capital Stock having ordinary voting power for the election of directors of a Person or (ii) to direct or cause the direction of management and policies of a Person, whether through the ownership of voting securities, by contract, proxy, agency or otherwise. “Controlling” and “Controlled” have meanings correlative thereto.
“Conversion Shares” means those shares of Capital Stock of Elevate Credit Parent into which the outstanding principal amount of the US Convertible Term Notes (as defined in the Third Amended and Restated Financing Agreement), and any accrued and unpaid interest thereon, were converted prior to the Fifth Restatement Closing Date pursuant to the terms of the US Convertible Term Notes (as defined in the Third Amended and Restated Financing Agreement).
“Corporate Cash” means, as of any date of determination, the sum of unrestricted cash and Cash Equivalent Investments of Elevate Credit Parent and all other Credit Parties (other than the US Term Note Borrowers, the UK Borrower and the US Last Out Term Note Borrower) with respect to which Agent has a perfected Lien as of such date of determination.
“Credit Card Account” means a consumer account established by CCB upon the issuance of one or more credit cards and which provides for the extension of credit on a revolving basis by CCB to the Credit Card Obligor under the related Credit Card Agreement to finance the purchase of products and services from Persons that accept credit cards for payment.
“Credit Card Agreement” means with respect to a Credit Card Account, the agreement or agreements between CCB and the Credit Card Obligor governing the terms and conditions of such account, as any such agreement or agreements may be amended, modified or otherwise changed from time to time.
“Credit Card Guidelines” means those guidelines established by CCB, attached as Schedule 1.1(a) hereto, for the administration of the Program, as amended, modified or supplemented from time to time by CCB with the prior written consent of Today Card to the extent such consent is required pursuant to the CCB Participation Agreement; provided, Today Card will not provide such consent without the prior written consent of the Agent.
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“Credit Card Obligor” means consumers who use the MasterCard or other successor network-branded credit card accounts for personal use and as either primary cardholders or co-applicant cardholders that are jointly and severally liable for amounts due under the MasterCard accounts.
“Credit Card Receivable” means the MasterCard or other successor network-branded credit card receivables, including the full cost of the goods or services purchased by a Credit Card Obligor and any accrued interest, and in which a 95.0% participation interest is sold to Today Card.
“Credit Exposure” means any period of time during which any Note or other Obligation remains unpaid or outstanding; provided, that no Credit Exposure shall be deemed to exist solely due to the existence of either or both of the following (a) any contingent indemnification liability, absent the assertion of a claim, or the known existence of a claim reasonably likely to be asserted, with respect thereto or (b) any potential reinstatement of Obligations in connection with an event set forth in Sections 10.1(c) or 10.1(d), absent the existence of such an event under Sections 10.1(c) or 10.1(d) and/or the actual reinstatement of Obligations in connection therewith.
“Credit Party” means each Borrower and each Guarantor.
“CSO Loans” means installment loans originated by independent third party lenders, whereby (a) the applicable Borrower acts as a credit services organization on behalf of consumers in accordance with applicable state laws and (b) in order to assist the customer in obtaining a loan under such program, the applicable Borrower guarantees, on behalf of the customer, the customer’s payment obligations to the third party lender under the loan.
“Current Fourth Tranche US Last Out Term Note Interest Rate” means (x) on or prior to January 30, 2018, a rate equal to the greater of (a) eighteen percent (18%) per annum and (b) the sum of (i) the Base Rate (but not less than one percent (1%) per annum) plus (ii) seventeen percent (17%) per annum and (y) after January 30, 2018, a rate equal to the sum of (a) the Base Rate (but not less than one percent (1%) per annum) plus (b) thirteen percent (13%) per annum.
“Current Interest Rate” means the sum of (i) the Base Rate and (ii) the Interest Rate Spread; provided, that the Current Interest Rate shall not exceed the highest lawful rate and may be reduced in accordance with Section 2.2(e).
“Current UK Exchange Rate” means, as of any date of determination, (i) in the case of a conversion of UK Term Notes (USD) to UK Term Notes (GBP), the then prevailing exchange rate in effect on such date of determination to convert any amount denominated in Dollars into an amount denominated in Pounds Sterling, as determined by Agent in accordance with Section 1.6 hereof and (ii) in the case of a conversion of UK Term Notes (GBP) to UK Term Notes (USD), the then prevailing exchange rate in effect on such date of determination to convert any amount denominated in Pounds Sterling into an amount denominated in Dollars, as determined by Agent in accordance with Section 1.6 hereof.
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“Custodian” has the meaning set forth in Section 10.1(c).
“Customer Information” means nonpublic information relating to borrowers or applicants of Consumer Loans and/or Credit Card Receivables, including without limitation, names, addresses, telephone numbers, e-mail addresses, credit information, account numbers, social security numbers, loan balances or other loan information, and lists derived therefrom and any other information required to be kept confidential by the Requirements.
“Debenture” that certain Debenture dated on or about the Original Restatement Closing Date made by and between the UK Borrower, the other UK Credit Parties and the Agent, on behalf of the Holders and Lenders, as the same may be amended, restated, supplemented or otherwise modified from time to time.
“Debt-to-Equity Ratio” means, (a) with respect to Elevate Credit, at any time, the ratio between (i) the aggregate amount of Indebtedness, liabilities and other obligations of Elevate Credit and its Subsidiaries (including the Obligations), determined in accordance with GAAP, at such time, and (ii) the sum of (A) the aggregate amount of capital contributions made to Elevate Credit by its stockholders as of such time reduced by (B) the aggregate amount of cash distributions made by Elevate Credit to any of its stockholders, as of such time, and (b) with respect to a Borrower, at any time, the ratio between (i) the aggregate amount of Indebtedness, liabilities and other obligations of such Borrower (including the Obligations), determined in accordance with GAAP, at such time, and (ii) the sum of (A) the aggregate amount of capital contributions made to such Borrower by Elevate Credit Parent as of such time reduced by (B) the aggregate amount of cash distributions made by such Borrower to any of its members (including, without limitation, Elevate Credit Parent) as of such time.
“Default Rate” means a rate equal to the Current Interest Rate and/or the Current Fourth Tranche US Last Out Term Note Interest Rate, as applicable, plus five percent (5.0%) per annum.
“Defaulting US Term Note Lender” means any Lender with a US Term Note Commitment that has:
(a)    failed to fund any amounts required to be made by it under Section 2.1(a) by the time such payment is due,
(b)    given written notice (and Agent has not received a revocation in writing), to a Borrower, Agent or any Lender or Holder or has otherwise publicly announced (and Agent has not received notice of a public retraction) that such Lender believes it will fail to fund amounts required to be funded by it under Section 2.1(a), or
(c)    (i) become subject to a voluntary or involuntary case under the Bankruptcy Code or any similar bankruptcy laws, (ii) had a custodian, conservator, receiver or similar official appointed for it or any substantial part of such Person’s assets, or (iii) made a general assignment for the benefit of creditors, been liquidated, or otherwise been adjudicated as, or determined by any Governmental Authority having
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regulatory authority over such Person or its assets to be, insolvent or bankrupt, and for this clause (c), Agent has determined that such Lender is reasonably likely to fail to fund any payments required to be made by it under Section 2.1(a).
“Destruction” means any and all damage to, or loss or destruction of, or loss of title to, all or any portion of the Collateral (i) in excess of $100,000 in the aggregate for any Fiscal Year or (ii) that results, individually or in the aggregate, in a Material Adverse Effect.
“Diligence Date” has the meaning set forth in Section 7.14.
“DIP Financing” has the meaning set forth in Section 11.2(a).
“Division/Series Transaction” means, with respect to any Credit Party and/or any of its Subsidiaries that is a limited liability company organized under the laws of the State of Delaware, that any such Person (a) divides into two or more Persons (whether or not the original Credit Party or Subsidiary thereof survives such division) or (b) creates, or reorganizes into, one or more series, in each case, as contemplated under the laws of the State of Delaware.
“Dollar” and “$” mean lawful money of the United States.
“Dollar Equivalent” means, with respect to any amount denominated in Dollars, such amount of Dollars, and with respect to any amount denominated in a currency other than Dollars, the amount of Dollars, as of any date of determination, into which such other currency can be converted in accordance with prevailing exchange rates, as determined by Agent in accordance with Section 1.6 hereof.
“Domestic Credit Party” means a Credit Party that is incorporated or otherwise organized under the laws of a state of the United States.
“EF SPV” means EF SPV, Ltd., an exempted company incorporated with limited liability under the laws of the Cayman Islands.
“Eight Month Charge Off Rate (UK)” means, as of any date of determination and with respect to any Vintage Pool of Consumer Loans marked as “Sunny” on the monthly financial statements provided to Agent pursuant to Section 8.2(a), the ratio of (i) the aggregate Charge Off amount in such Vintage Pool during the period beginning on the applicable date of origination through the end of the month of such origination and ending on the eighth consecutive calendar month after such month of origination to (ii) the aggregate principal balance of such Vintage Pool at the time of origination.
“Elastic Financing Agreement” means that certain Amended and Restated Financing Agreement dated as of February 7, 2019 by and among Elastic SPV, Ltd., an exempted company incorporated with limited liability under the laws of the Cayman Islands, as borrower, Elevate Credit Parent, as a guarantor, the other guarantors party thereto, Victory Park Management, LLC, as administrative agent and collateral agent, the lenders party thereto and each Person who becomes a party thereto pursuant to the joinder provisions thereof, as amended, restated,
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supplemented or otherwise modified from time to time to the extent permitted by the Intercreditor Agreement.
“Elevate Credit” has the meaning set forth in the introductory paragraph hereto.
“Elevate Credit Parent” has the meaning set forth in the introductory paragraph hereto.
“Elevate Credit Subsidiaries means each of (a) the Subsidiaries of Elevate Credit Parent (other than the Borrowers) listed on the signature pages hereto as an “Elevate Credit Subsidiary;” and (b) each other Subsidiary (other than the Borrowers) formed or acquired by Elevate Credit from time to time after the Original Closing Date.
“Eligible Credit Card Receivable” means, as of any date of determination, a Credit Card Receivable that is subject to a first priority Lien in favor of Agent and which are not any of the following:
(a)    Credit Card Receivable with a principal payment that is greater than sixty (60) days past due on any contractual payment due or is otherwise a Charged Off Credit Card Receivable, or is charged off in accordance with the Program Guidelines;
(b)    Credit Card Receivable to employees of any Credit Party;
(c)    Credit Card Receivable not originated to a person domiciled in the United States;
(d)    Credit Card Receivable not denominated in U.S. Dollars;
(e)    Credit Card Receivable involved in litigation or subject to legal, bankruptcy or insolvency proceedings or with underlying borrowers subject to bankruptcy or insolvency proceedings;
(f)    Credit Card Receivable with a balloon payment and/or Consumer Loan that is a non-amortizing account;
(g)    Credit Card Receivable with original term in excess of twenty (20) months;
(h)    Credit Card Receivable originated, acquired or participated in a manner that is not in compliance with the Program Guidelines;
(i)    Credit Card Receivable that violates applicable consumer protection, state or usury laws in any material respect;
(j)    Credit Card Receivable that is subject to assignment or confidentiality restrictions applicable to the applicable Bank (if any) or the underlying borrower;
(k)    Credit Card Receivable originated to residents in states where the applicable Bank (if any) or Credit Party was not licensed or registered as required by applicable state law when such Consumer Loan was originated or purchased;
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(l)    Credit Card Receivable with an original principal amount greater than $5,000;
(m)    Credit Card Receivable with an annual percentage rate of less than twenty-nine percent (29%); and
(n)    Credit Card Receivable that has been modified outside of the Program Guidelines or Credit Card Receivable that is a Modified and Re-Aged Credit Card Receivable that has been modified outside of the modification policy approved in writing by Agent, in each case, unless approved by Agent in its sole discretion.
“Eligible UK Consumer Loan” means, as of any date of determination, a Consumer Loan marked as “Sunny” on the monthly financial statements provided to Agent pursuant to Section 8.2(a) that is subject to a first priority Lien in favor of Agent and which are not any of the following:
(a)    Consumer Loan with a principal payment that is greater than sixty (60) days past due on any contractual payment due or is otherwise a Charged Off Consumer Loan, or is charged off in accordance with the Program Guidelines;
(b)    Consumer Loan to employees of any Credit Party;
(c)    Consumer Loan not originated to a person domiciled in the United Kingdom;
(d)    Consumer Loan not denominated in Pounds Sterling;
(e)    Consumer Loan involved in litigation or subject to legal, bankruptcy or insolvency proceedings or with underlying borrowers subject to bankruptcy or insolvency proceedings;
(f)    Consumer Loan with a balloon payment and/or Consumer Loan that is a non-amortizing account;
(g)    Consumer Loan with original term in excess of twenty-four (24) months;
(h)    Consumer Loan originated, acquired or participated in a manner that is not in compliance with the Program Guidelines;
(i)    Consumer Loan that violates applicable UK consumer protection or usury laws in any material respect;
(j)    Consumer Loan with an original principal amount greater than £5,000;
(k)    Consumer Loan with an annual percentage rate of less than forty-one percent (41%); and
(l)    Consumer Loan that has been modified outside of the Program Guidelines or Consumer Loan that is a Modified and Re-Aged Consumer Loan that has been modified outside
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of the modification policy approved in writing by Agent, in each case, unless approved by Agent in its sole discretion.
“Eligible US Consumer Loan” means, as of any date of determination, a Consumer Loan marked as “Rise” on the monthly financial statements provided to Agent pursuant to Section 8.2(a) that is subject to a first priority Lien in favor of Agent and which are not any of the following:
(a)    Consumer Loan with a principal payment that is greater than sixty (60) days past due on any contractual payment due or is otherwise a Charged Off Consumer Loan, or is charged off in accordance with the Program Guidelines;
(b)    Consumer Loan to employees of any Credit Party;
(c)    Consumer Loan not originated to a person domiciled in the United States;
(d)    Consumer Loan not denominated in U.S. Dollars;
(e)    Consumer Loan involved in litigation or subject to legal, bankruptcy or insolvency proceedings or with underlying borrowers subject to bankruptcy or insolvency proceedings;
(f)    Consumer Loan with a balloon payment and/or Consumer Loan that is a non-amortizing account;
(g)    Consumer Loan with original term in excess of thirty-six (36) months;
(h)    Consumer Loan originated, acquired or participated in a manner that is not in compliance with the Program Guidelines or state lending laws within each respective state where such Consumer Loan is originated;
(i)    Consumer Loan that violates applicable consumer protection, state or usury laws in any material respect;
(j)    Consumer Loan that is subject to assignment or confidentiality restrictions applicable to the applicable Bank (if any) or the underlying borrower;
(k)    Consumer Loan originated to residents in states where the applicable Bank (if any) or Credit Party was not licensed or registered as required by applicable state law when such Consumer Loan was originated or purchased;
(l)    Consumer Loan with an original principal amount greater than $10,000;
(m)    Consumer Loan with an annual percentage rate of less than thirty percent (30%); and
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(n)    Consumer Loans that has been modified outside of the Program Guidelines or Consumer Loan that is a Modified and Re-Aged Consumer Loan that has been modified outside of the modification policy approved in writing by Agent, in each case, unless approved by Agent in its sole discretion;
provided, for the avoidance of doubt, any reference in this definition to the Program Guidelines shall be the Program Guidelines in effect before any amendment, modification or supplement unless such amendment, modification or supplement has been approved by the Agent in writing in accordance with the definition of “Program Guidelines”.
“Employee Benefit Plan” means any “employee benefit plan” as defined in Section 3(3) of ERISA (a) which is or was sponsored, maintained or contributed to by, or required to be contributed to by, any Credit Party, any Subsidiary of any Credit Party or any of their ERISA Affiliates, or (b) with respect to which, any Credit Party or any Subsidiary of any Credit Party may have liability (contingent or otherwise).
“Environmental Laws” means all applicable federal, state, local or foreign laws relating to pollution or protection of human health or the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata), including, without limitation, laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous Materials”) into the environment, the exposure of humans thereto, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well as all regulatory authorizations, codes, decrees, demands or demand letters, injunctions, judgments, licenses, notices of violation or similar notice letters, orders, permits, plans or regulations issued, entered, promulgated or approved thereunder.
“Equity Interests” means Capital Stock and all warrants, options and other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock, whether or not such debt security includes the right of participation with Capital Stock).
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time.
“ERISA Affiliate” means, as to any Credit Party, any trade or business (whether or not incorporated) that is a member of a group which includes such Credit Party and which is treated as a single employer under Section 414 of the Code.
“ERISA Event” means (a) the occurrence of a “reportable event” within the meaning of Section 4043 of ERISA and the regulations issued thereunder with respect to any Pension Plan (excluding those for which the provision for 30 day notice to the PBGC has been waived by regulation) with respect to an ERISA Affiliate; (b) the failure to meet the minimum funding standards of Sections 412 and 430 of the Code with respect to any Pension Plan (whether or not waived in accordance with Section 412(c) of the Code) or the failure to make by its due date a required installment under Section 430(j) of the Code with respect to any Pension Plan or the
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failure to make any required contribution to a Multiemployer Plan; (c) the provision by the administrator of any Pension Plan pursuant to Section 4041(a)(2) of ERISA of a notice of intent to terminate such plan in a distress termination described in Section 4041(c) of ERISA; (d) the withdrawal by any of the Credit Parties, any of their respective Subsidiaries or any of their respective ERISA Affiliates from any Pension Plan with two or more contributing sponsors or the termination of any such Pension Plan resulting in liability to any of the Credit Parties, any of their respective Subsidiaries or any of their respective ERISA Affiliates pursuant to Section 4063 or 4064 of ERISA; (e) the institution by the PBGC of proceedings to terminate any Pension Plan, or the occurrence of any event or condition which reasonably might be expected to constitute grounds under ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan; (f) the imposition of liability on any of the Credit Parties, any of their respective Subsidiaries or any of their respective ERISA Affiliates pursuant to Section 4062(e) or 4069 of ERISA or by reason of the application of Section 4212(c) of ERISA; (g) the withdrawal of any of the Credit Parties, any of their respective Subsidiaries or any of their respective ERISA Affiliates in a complete or partial withdrawal (within the meaning of Sections 4203 and 4205 of ERISA) from any Multiemployer Plan if there is any potential liability therefor, or the receipt by any of the Credit Parties, any of their respective Subsidiaries or any of their respective ERISA Affiliates of notice from any Multiemployer Plan that it is in reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA, or that it intends to terminate or has terminated under Section 4041A or 4042 of ERISA; (h) the occurrence of an act or omission which reasonably might be expected to give rise to the imposition on any of the Credit Parties, any of their respective Subsidiaries or any of their respective ERISA Affiliates of fines, penalties, taxes or related charges under Sections 4975 or 4971 of the Code or under Section 409, Section 502(c), (i) or (l), or Section 4071 of ERISA in respect of any Employee Benefit Plan; (i) the assertion of a material claim (other than routine claims for benefits) against any Employee Benefit Plan other than a Multiemployer Plan or the assets thereof, or against any of the Credit Parties, any of their respective Subsidiaries or any of their respective ERISA Affiliates in connection with any Employee Benefit Plan; (j) receipt from the Internal Revenue Service of notice of the failure of any Pension Plan (or any other Employee Benefit Plan intended to be qualified under Section 401(a) of the Code) to qualify under Section 401(a) of the Code, or the failure of any trust forming part of any Pension Plan to qualify for exemption from taxation under Section 501(a) of the Code; or (k) the imposition of a Lien pursuant to Section 401(a)(29) or 430(k) of the Code or pursuant to ERISA with respect to any Pension Plan.
“Event of Default” has the meaning set forth in Section 10.1.
“Event of Default Commitment Suspension or Termination Notice” has the meaning set forth in Section 10.2(a).
“Event of Default Notice” has the meaning set forth in Section 10.2(a).
“Event of Default Redemption” has the meaning set forth in Section 10.2(a).
“Event of Default Redemption Notice” has the meaning set forth in Section 10.2(a).
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“Event of Loss” means any Destruction to, or any Taking of, any asset or property of any Credit Party or any of their Subsidiaries.
“Excess Concentration Amounts” means,
(a)with respect to Eligible Credit Card Receivables, as of any date of determination an amount equal to the principal balance of Eligible Credit Card Receivables in excess of $11,765,000, if any;
(b)with respect to Eligible US Consumer Loans marked as “Rise” on the monthly financial statements provided to Agent pursuant to Section 8.2(a):
(i)the aggregate principal balance of all such Eligible US Consumer Loans, as of any date of determination, that have principal payments that are greater than or equal to one (1) day past due and less than or equal to thirty (30) days past due on such date in excess of 10.00% of the aggregate principal balance of all of such Eligible US Consumer Loans;
(ii)the aggregate principal balance of all such Eligible US Consumer Loans, as of any date of determination, that have principal payments that are greater than thirty (30) days and less than or equal to sixty (60) days past due on such date in excess of 5.50% of the aggregate principal balance of all of such Eligible US Consumer Loans; or
(iii)the aggregate principal balance of all such Eligible US Consumer Loans that are Modified and Re-Aged Consumer Loans in excess of 5.00% of the aggregate principal balance of all of such Eligible US Consumer Loans; and
(c)with respect to Eligible UK Consumer Loans marked as “Sunny” on the monthly financial statements provided to Agent pursuant to Section 8.2(a):
(i)(x) the aggregate amount equal to the average of (1) the aggregate principal balance of all such Eligible UK Consumer Loans, as of the applicable date of determination, that have principal payments that are greater than or equal to one (1) day past due and less than or equal to thirty (30) days past due on such date and (2) the aggregate principal balance of all such Eligible UK Consumer Loans, as of the last day of the calendar month immediately prior to the calendar month that includes such date of determination, that have principal payments that are greater than or equal to one (1) day past due and less than or equal to thirty (30) days past due on such date in excess of (y) 11.00% of the aggregate amount equal to the average of (1) the aggregate principal balance of all of such Eligible UK Consumer Loans, as of the applicable date of determination and (2) the aggregate principal balance of all of such Eligible UK Consumer Loans, as of the last day of the calendar month immediately prior to the calendar month that includes such date of determination;
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(ii)(x) the aggregate amount equal to the average of (1) the aggregate principal balance of all such Eligible UK Consumer Loans, as of the applicable date of determination, that have principal payments that are greater than thirty (30) days and less than or equal to sixty (60) days past due on such date and (2) the aggregate principal balance of all such Eligible UK Consumer Loans, as of the last day of the calendar month immediately prior to the calendar month that includes such date of determination, that have principal payments that are greater than thirty (30) days and less than or equal to sixty (60) days past due on such date in excess of (y) 9.00% of the aggregate amount equal to the average of (1) the aggregate principal balance of all of such Eligible UK Consumer Loans, as of the applicable date of determination and (2) the aggregate principal balance of all of such Eligible UK Consumer Loans, as of the last day of the calendar month immediately prior to the calendar month that includes such date of determination; or
(iii)the aggregate principal balance of all such Eligible UK Consumer Loans that are Modified and Re-Aged Consumer Loans in excess of 5.00% of the aggregate principal balance of all of such Eligible UK Consumer Loans.
“Excess Spread (UK)” means, as of any date of determination, with respect to any Consumer Loans marked as “Sunny” on the monthly financial statements provided to Agent pursuant to Section 8.2(a), the ratio expressed as a percentage of (a) the aggregate amount of interest collections from such Consumer Loans less any Charge Offs of such Consumer Loans, in each case, in the calendar month immediately prior to the calendar month that includes such date of determination over (b) the aggregate principal balance of such Consumer Loans as of the first day of the calendar month immediately prior to the calendar month that includes such date of determination; provided, if the date of determination is the last day of the calendar month, “Excess Spread” means the ratio expressed as a percentage of (a) the aggregate amount of interest collections from such Consumer Loans less any Charge Offs of such Consumer Loans, in each case, in the calendar month that includes such date of determination over (b) the aggregate principal balance of such Consumer Loans as of the first day of the calendar month that includes such date of determination.
“Excess Spread (US)” means, as of any date of determination, with respect to any Consumer Loans marked as “Rise” on the monthly financial statements provided to Agent pursuant to Section 8.2(a), the ratio expressed as a percentage of (a) the aggregate amount of interest collections from such Consumer Loans less any Charge Offs of such Consumer Loans, in each case, in the calendar month immediately prior to the calendar month that includes such date of determination over (b) the aggregate principal balance of such Consumer Loans as of the first day of the calendar month immediately prior to the calendar month that includes such date of determination; provided, if the date of determination is the last day of the calendar month, “Excess Spread” means the ratio expressed as a percentage of (a) the aggregate amount of interest collections from such Consumer Loans less any Charge Offs of such Consumer Loans, in each case, in the calendar month that includes such date of determination over (b) the aggregate principal balance of such Consumer Loans as of the first day of the calendar month that includes such date of determination.
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“Excluded Taxes” means, in respect of the Agent or any Holder or Lender, as applicable, (a) income taxes imposed on the net income of such Person, (b) franchise taxes imposed on the net income of such Person, in each case by the jurisdiction under the laws of which such Person is organized or qualified to do business or a jurisdiction or any political subdivision thereof in which such Person engages in business activity, other than activity or connection arising from such Person having executed, delivered, become a party to, enjoyed or exercised its rights under, performed its obligations under, received payments under, received or perfected a security interest under, or engaged in any other transaction contemplated under this Agreement or any Transaction Document, or sold or assigned any interest in any Note or any of the other Transaction Documents.
“Extraordinary Receipts” means any cash received by any Credit Party or any of their Subsidiaries outside the ordinary course of business (and not consisting of proceeds described in Sections 2.3(b)(i), (b)(ii), (b)(iii), (b)(iv) or (b)(vi)), including, without limitation, (a) foreign, United States, state or local tax refunds outside the ordinary course of business, (b) pension plan reversions outside the ordinary course of business, (c) judgments, proceeds of settlements or other consideration of any kind in excess of $500,000 in the aggregate in connection with any cause of action (but excluding any amounts received in connection with the collection, sale, or disposition in the ordinary course of business of the Credit Parties of Consumer Loans that are not Eligible UK Consumer Loans or Eligible US Consumer Loans and that have been settled or charged off) and (d) any purchase price adjustment received in connection with any Acquisition.
“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with) and any current or future regulations or official interpretations thereof, and any agreements entered into pursuant to Section 1471(b)(1) of the Code, or any U.S. or non-U.S. fiscal or regulatory legislation, rules, guidance notes or practices adopted pursuant to any intergovernmental agreement entered into in connection with the implementation of such sections of the Code or analogous provisions of non-U.S. law.
“FCA” means the Financial Conduct Authority acting in accordance with Part 6 of the Financial Services and Markets Act 2000.
“Federal or Multi-State Force Majeure Affected Amount” means, as of any date of determination, an amount equal to the aggregate outstanding principal amount of the US Term Notes on such date multiplied by a fraction, the numerator of which shall be equal to the portion of such aggregate outstanding principal amount for which the proceeds thereof were used to originate Consumer Loans and/or Credit Card Receivables (or purchase participation interests therein) that remain outstanding on such date to borrowers residing in state(s) directly affected by a Federal or Multi-State Force Majeure Event (which amount with respect to each such Consumer Loan or Credit Card Receivable or participation interest in a Consumer Loan or Credit Card Receivable shall not exceed the outstanding principal amount of such Consumer Loan or Credit Card Receivable (or participation interest therein, as the case may be) on such date) and the denominator of which shall be equal to the aggregate outstanding principal amount of the US Term Notes on such date.
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“Federal or Multi-State Force Majeure Event” means any regulatory event or regulatory change at the federal level or in any group of states acting in concert in which the Credit Parties originate Consumer Loans and/or Credit Card Receivables or in which the Credit Parties purchase participation interests in Consumer Loans from the applicable Banks which originate such Consumer Loans or in Credit Card Receivables from the applicable Banks which originated such Credit Card Receivables, in each case, that would prohibit or make it illegal for the Credit Parties to continue to originate or collect Consumer Loans and/or Credit Card Receivables (or purchase participation interests therein and collect thereon, as the case may be) in such affected jurisdictions pursuant to the Program or another program of a type similar to the Program, resulting in a Federal or Multi-State Force Majeure Affected Amount equal to two-thirds or more of the aggregate principal amount then outstanding under the US Term Notes as of the applicable date of determination.
“Fifth Restatement Closing” has the meaning set forth in Section 3.1.
“Fifth Restatement Closing Date” has the meaning set forth in Section 3.1.
“FinWise Financing Agreement” means that certain Financing Agreement dated as of February 7, 2019 by and among EF SPV, as borrower, Elevate Credit Parent, as a guarantor, the other guarantors party thereto, Victory Park Management, LLC, as administrative agent and collateral agent, the lenders party thereto and each Person who becomes a party thereto pursuant to the joinder provisions thereof, as amended, restated, supplemented or otherwise modified from time to time to the extent permitted by the Intercreditor Agreement.
“First Amendment Effective Date” means July 31, 2020.
“First Out Committed Buy-Out Notice” has the meaning set forth in Section 13.21(a).
“First Out Note Holder” means any Holder holding any portion of the First Out Notes, solely in such capacity.
“First Out Notes” means collectively, the UK Term Notes and the US Term Notes.
“First Out Purchase Price” has the meaning set forth in Section 13.21(b).
“First Tier Foreign Subsidiary” means a Foreign Subsidiary more than fifty percent (50%) of the voting Equity Interests of which are held directly by a Credit Party or indirectly by a Credit Party through one or more Subsidiaries that are incorporated or otherwise organized under the laws of a state of the United States of America.
“Fiscal Year” means a fiscal year of the Credit Parties.
“Flotation” means (a) a successful application being made for the admission of any part of the share capital of Elevate Credit Parent or any of its Subsidiaries (or any Holding Company of Elevate Credit Parent or any of its Subsidiaries) to the “Official List” maintained by the FCA or any equivalent list maintained by any other recognized authority and the admission of any part of the share capital of Elevate Credit Parent or any of its Subsidiaries (or Holding Company of
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Elevate Credit Parent or any of its Subsidiaries) to trading on the London Stock Exchange plc or any other recognized exchange; or (b) the grant of permission to deal in any part of the issued share capital of Elevate Credit Parent or any of its Subsidiaries (or Holding Company of Elevate Credit Parent or any of its Subsidiaries) on the Alternative Investment Market or the Main Board or the Growth Market of the ICAP Securities & Derivatives Exchange (ISDX) or on any recognized investment exchange (as that term is used in the Financial Services and Markets Act 2000) or in or on any exchange or market replacing the same or any other exchange or market in any country.
“Foreign Lender” means in the case of the US Term Note Borrowers and the US Last Out Term Note Borrower, a Lender or a Holder that is not a US Person.
“Foreign Subsidiary” means, with respect to any Person, a Subsidiary of such Person, which Subsidiary is not incorporated or otherwise organized under the laws of a state of the United States of America.
“Four Month Charge Off Rate (UK)” means, as of any date of determination and with respect to any Vintage Pool of Consumer Loans marked as “Sunny” on the monthly financial statements provided to Agent pursuant to Section 8.2(a), the ratio of (i) the aggregate Charge Off amount in such Vintage Pool during the period beginning on the applicable date of origination through the end of the month of such origination and ending on the fourth consecutive calendar month after such month of origination to (ii) the aggregate principal balance of such Vintage Pool at the time of origination.
“Four Month Charge Off Rate (US)” means, as of any date of determination and with respect to any Vintage Pool of Consumer Loans marked as “Rise” on the monthly financial statements provided to Agent pursuant to Section 8.2(a), the ratio of (i) the aggregate Charge Off amount in such Vintage Pool during the period beginning on the applicable date of origination through the end of the month of such origination and ending on the fourth consecutive calendar month, beginning with such month of origination to (ii) the aggregate principal balance of such Vintage Pool at the time of origination.
“Fourth Restatement Closing Date” means October 15, 2018.
“Fourth Tranche US Last Out Term Note Commitment” has the meaning set forth in Section 2.1(d).
“Fourth Tranche US Last Out Term Note Maturity Extension” has the meaning set forth in Section 2.11.
“Fourth Tranche US Last Out Term Notes” has the meaning set forth in Section 2.1(d).
“Funding Account” means, with respect to a Borrower, a deposit account of such Borrower approved in writing by the Agent, in which (a) all funds on deposit therein shall be solely used to fund Consumer Loans and for no other purpose and (b) no other party shall have a
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Lien or shall have perfected a Lien, other than any Lien of the Agent and customary common law or statutory rights of setoff of banks arising in connection with their depository relationship with such Borrower.
“GAAP” means United States generally accepted accounting principles, consistently applied; provided, that solely for the purposes of the consolidating financial statements of the United Kingdom operations required to be delivered pursuant to Sections 8.2(a) and (b) of this Agreement, “GAAP” shall mean the International Financial Reporting Standards, as adopted by the European Union generally from time to time, consistently applied.
“Governmental Authority” means the government of the United States of America, any other nation or any political subdivision of any of the foregoing, whether federal, state or local, and any agency, authority, commission, 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.
“Guarantor” means (i) Elevate Credit Parent (including in respect of the Obligations of the UK Borrower, the US Term Note Borrowers and the US Last Out Term Note Borrower)), (ii) each of the Elevate Credit Subsidiaries, (iii) the US Term Note Borrowers in respect of the Obligations of the UK Borrower, (iv) each US Term Note Borrower in respect of the Obligations of the other US Term Note Borrower and (iv) each other Person that guarantees in writing all or any part of the Obligations.
“Guarantor Payment” has the meaning set forth in Section 9.7(a).
“Hedging Obligations” means, with respect to any specified Person, the obligations of such Person under: (i) interest rate swap agreements (whether from fixed to floating or from floating to fixed), interest rate cap agreements and interest rate collar agreements; (ii) other agreements or arrangements designed to manage interest rates or interest rate risk; and (iii) other agreements or arrangements designed to protect such Person against fluctuations in currency exchange rates or commodity prices.
“Holder” means a holder of a Note.
“Holding Company” means, in relation to a Person, any other Person in respect of which it is a Subsidiary.
“Holdout Buy-Out” has the meaning set forth in Section 13.21(a).
“Holdout Last Out Note Holder” has the meaning set forth in Section 13.21(a).
“Indebtedness” of any Person means, without duplication (i) all indebtedness for borrowed money, (ii) all obligations issued, undertaken or assumed as the deferred purchase price of property or services (including, without limitation, “financing leases” in accordance with GAAP) (other than trade payables entered into in the ordinary course of business), (iii) all reimbursement or payment obligations with respect to letters of credit, surety bonds and other
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similar instruments, (iv) all obligations evidenced by notes, bonds, notes or similar instruments whether convertible or not, including obligations so evidenced incurred in connection with the acquisition of property, assets or businesses, (v) all indebtedness created or arising under any conditional sale or other title retention agreement, or incurred as financing, in either case with respect to any property or assets acquired with the proceeds of such indebtedness (even though the rights and remedies of the seller or bank under such agreement in the event of default are limited to repossession or sale of such property), (vi) all indebtedness referred to in clauses (i) through (v) above secured by (or for which the holder of such indebtedness has an existing right, contingent or otherwise, to be secured by) any mortgage, lien, pledge, charge, security interest or other encumbrance upon or in any property or assets (including accounts and contract rights) owned by any Person, even though the Person which owns such assets or property has not assumed or become liable for the payment of such indebtedness, (vii) all Contingent Obligations in respect of indebtedness or obligations of others of the kinds referred to in clauses (i) through (vi) above; (viii) banker’s acceptances; (ix) the balance deferred and unpaid of the purchase price of any property or services due more than three months after such property is acquired or such services are completed; (x) Hedging Obligations; and (xi) obligations under convertible securities of any Credit Party or any of their Subsidiaries. In addition, the term “Indebtedness” of any Credit Party or any of their Subsidiaries, as applicable, includes (a) all Indebtedness of others secured by a Lien on any assets of any Credit Party or any of their Subsidiaries (whether or not such Indebtedness is assumed by any Credit Party or any of such Subsidiaries), (b) to the extent not otherwise included, the guarantee by any Credit Party or any of their Subsidiaries of any Indebtedness of any other Person and (c) the absolute value of any negative amounts in any accounts owned by any Credit Party.
“Indemnified Liabilities” has the meaning set forth in Section 13.12.
“Indemnitees” has the meaning set forth in Section 13.12.
“Insolvency Proceeding” means any corporate action, legal proceeding or other procedure or formal step taken in relation to (a) the suspension of payments, a moratorium of any indebtedness, winding-up, dissolution, administration or reorganization (by way of voluntary arrangement, scheme of arrangement or otherwise (other than for the purpose of a reconstruction or amalgamation the terms of which have been approved by the Agent)) of Elevate Credit Parent or any of its Subsidiaries; (b) a composition, compromise, assignment or arrangement with any creditor of Elevate Credit Parent or any of its Subsidiaries; (c) the appointment of a liquidator, receiver, administrative receiver, administrator, compulsory manager or other similar officer in respect of Elevate Credit Parent or any of its Subsidiaries or any of their respective assets; or (d) enforcement of any security over any assets of Elevate Credit Parent or any of its Subsidiaries, in each case, or any analogous procedure or formal step taken in any jurisdiction.
“Insolvent” means, with respect to any Person, (a) the present fair saleable value in a non-liquidation context of such Person’s assets is less than the amount required to pay such Person’s total Indebtedness as applicable, or the fair value of the assets of such Person is less than its total liabilities (taking into account contingent and prospective liabilities), (b) such Person is unable to pay its debts and liabilities, subordinated, contingent or otherwise, as such
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debts and liabilities fall due or become absolute and matured, (c) such Person incurs debts that would be beyond its ability to pay as such debts mature, (d) such Person has unreasonably small capital with which to conduct the business in which it is engaged as such business is now conducted and is proposed to be conducted, (e) such Person is deemed to, or is declared to, be unable to pay its debts under applicable law, (f) such Person suspends or threatens in writing to suspend making payments on any of its debts, (g) a moratorium is declared in respect of any Indebtedness of such Person or (h) as of such date of determination, to the extent such Person is a Borrower, based on information derived from the Borrower’s internal analysis of the assets held by the Borrower and contemplated to be held by the Borrower following such issuance and purchase of Notes and the Borrower’s reasonable forecasts in good faith (which forecasts shall be mutually acceptable to the Borrower and Agent (in each case, which acceptance shall not be unreasonably conditioned, withheld or delayed)), that it is expected that any Obligations under the Notes will not be fully and timely paid when due. The amount of contingent liabilities (such as litigation, guaranties and pension plan liabilities) at any time shall be computed as the amount that, in light of all the facts and circumstances existing at the time, represents the amount that would reasonably be expected to become an actual or matured liability. If a moratorium occurs, the ending of the moratorium will not remedy any Event of Default caused by that moratorium.
“Intellectual Property Rights” has the meaning provided in Section 7.12.
“Intellectual Property Security Agreements” means each trademark security agreement, each patent security agreement and each copyright security agreement, each in form and substance reasonably acceptable to the Agent, entered into from time to time by and among the applicable Credit Party or the applicable Guarantor and the Agent.
“Interagency Guidelines” means the Interagency Guidelines Establishing Information Security Guidelines, as set forth in Appendix B to 12 C.F.R. Part 30.
“Intercompany Subordination Agreement” means that certain Subordination Agreement dated on or about the Original Restatement Closing Date by and among Agent, the “Subordinated Creditors” (as defined therein) and the “Subordinated Debtors” (as defined therein), as the same may be amended, restated, supplemented or otherwise modified from time to time.
“Intercreditor Agreement” means that certain Amended and Restated Intercreditor Agreement dated on or about the Fifth Restatement Closing Date and among Agent, the “Borrowers” (as defined therein), the “Collateral Agents” (as defined therein) and the “Grantors” (as defined therein), as amended, restated, amended and restated, supplemented or otherwise modified from time to time in accordance with the terms thereof.
“Interest Date” has the meaning provided in Section 2.2(a).
“Interest Rate Spread” means seven and one-half percent (7.5%) per annum.
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“Interest Rate Spread Reduction Conditions” means the satisfaction of each of the following conditions:
(a)All of the Credit Parties have been in compliance with all of their obligations and covenants under this Agreement for the six (6) months prior to any date of determination and all of the Credit Parties’ representations and warranties are true, accurate and correct for the six (6) months prior to any date of determination; and
(b)The Borrowers shall have satisfied the then applicable Performance Hurdle.
“Inventory” has the meaning provided in the UCC.
“Investment” means, with respect to any Person, any investment in another Person, whether by acquisition of any debt security or Equity Interest, by making any loan or advance, by becoming contingently liable in respect of obligations of such other Person or by making an Acquisition.
“IRS” means the Internal Revenue Service of the United States and any successor thereto.
“Issuance Date” has the meaning provided in Section 2.2(a).
“Judgment Currency” has the meaning set forth in Section 1.7.
“Last Out Note Holder” means any Holder holding any portion of the Fourth Tranche US Last Out Term Notes, solely in such capacity.
“Late Charge” has the meaning provided in Section 2.4.
“Legal Reservations” means:
(a)    the principle that equitable remedies may be granted or refused at the discretion of a court and the limitation of enforcement by laws relating to insolvency, reorganisation and other laws generally affecting the rights of creditors;
(b)    the time barring of claims under the Limitation Acts, the possibility that an undertaking to assume liability for or indemnify a person against non-payment of United Kingdom stamp duty may be void and defences of set-off or counterclaim;
(c)    the limitation of the enforcement of the terms of leases of real property by laws of general application to those leases;
(d)    similar principles, rights and remedies under the laws of any Relevant Jurisdiction; and
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(e)    any other matters which are set out as qualifications or reservations as to matters of law of general application in any legal opinions supplied to the Agent or Lenders under this Agreement.
Notwithstanding the foregoing and for purposes of clarification, the fact that charges which are designated as fixed charges in a security document may be construed by a court as floating charges only.
“Lender” and “Lenders” has the meaning set forth in the introductory paragraph hereto.
“LIBOR Rate” means the London Interbank Offered Rate last quoted by Bloomberg for deposits of U.S. Dollars for a period of three months. If no such London Interbank Offered Rate exists, such rate will be the rate of interest per annum, as determined by the Agent at which deposits of U.S. Dollars in immediately available funds are offered on the last Business Day of each calendar month by major financial institutions reasonably satisfactory to the Agent in the London interbank market for a period of three months for the applicable principal amount on such date of determination.
“Lien” means any mortgage, lien, pledge, security interest, conditional sale or other title retention agreement, charge or other security interest or encumbrance of any kind, whether or not filed, recorded or otherwise perfected under applicable law, including any conditional sale or other title retention agreement or any lease or license in the nature thereof, any option or other agreement to sell or give a security interest in, or any agreement or arrangement having similar effect.
“Limitation Acts” means the Limitation Act 1980 and the Foreign Limitation Periods Act 1984.
“Loan to Value Ratio (UK)” means, as of any date of determination, the ratio of (a) the outstanding principal balance of the UK Term Notes to (b) the Borrowing Base (UK), in each case, as of such date of determination.
“Loan to Value Ratio (US)” means, as of any date of determination, the ratio of (a) the outstanding principal balance of the US Term Notes to (b) the Borrowing Base (US), in each case, as of such date of determination.
“LTV Covenant Cure Amount” has the meaning provided in Section 8.1(a).
“LTV Covenant Cure Obligation” has the meaning provided in Section 8.1(a).
“LTV Covenant Default” has the meaning provided in Section 8.1(a).
“M&A Event” means a Change of Control of Elevate Credit Parent.
“Material Adverse Effect” means any material adverse effect on the business, properties, assets, operations, the Collateral, results of operations, or condition (financial or otherwise) or prospects of the Credit Parties and their Subsidiaries, taken as whole, or on the
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transactions contemplated hereby or by the other Transaction Documents or by the Bank Transaction Documents, or on the authority or ability of any Credit Party or any of their respective Subsidiaries to fully and timely perform its obligations under any Transaction Document or any Bank Transaction Document, in each case, as determined by the Agent in its sole but reasonable discretion.
“Material Contract” means (a) each Consumer Loan Agreement and each Bank Transaction Document and (b) any contract or other arrangement to which any Credit Party or any of its Subsidiaries is a party (other than the Transaction Documents) for which breach, nonperformance, cancellation, termination or failure to renew could reasonably be expected to have a Material Adverse Effect.
“Maturity Date” means the earlier of (a) (i) solely with respect to the US Term Notes and UK Term Notes, January 1, 2024 and (ii) solely with respect to the Fourth Tranche US Last Out Term Notes, February 1, 2021; and (b) such earlier date as the unpaid principal balance of all outstanding Notes becomes due and payable pursuant to the terms of this Agreement and the Notes.
“Maximum Commitment” means the sum of (a) a “Maximum UK Commitment” of £100,000,000,50,000,000, (b) a “Maximum US Term Note Commitment” of $350,000,000,200,000,000, and (c) a “Maximum Fourth Tranche US Last Out Term Note Commitment” of $35,050,000.
“Maximum First Out Note Balance” means, from time to time, the lesser of (a) the sum of the Borrowing Base (UK) and Borrowing Base (US) (each as calculated pursuant to the most recent Borrowing Base Certificate) then in effect or (b) the sum of $350,000,000200,000,000 and £100,000,000.50,000,000.
“Maximum UK Term Note Balance” means, from time to time, the lesser of (a) the sum of the Borrowing Base (UK) (as calculated pursuant to the most recent Borrowing Base Certificate) then in effect or (b) the Maximum UK Commitment.
“Maximum US Term Note Balance” means, from time to time, the lesser of (a) the sum of the Borrowing Base (US) (as calculated pursuant to the most recent Borrowing Base Certificate) then in effect or (b) the Maximum US Term Note Commitment.
“Modified and Re-Aged Consumer Loans” means Consumer Loans that were modified at any time after origination and meet the definition of a trouble debt restructuring under GAAP.
“Modified and Re-Aged Credit Card Receivable” means Credit Card Receivables that were modified at any time after origination and meet the definition of a trouble debt restructuring under GAAP.
“Monthly Maintenance Fees” has the meaning set forth in Section 2.10.
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“Mortgage” means a mortgage or deed of trust, in form and substance reasonably satisfactory to the Agent, as it may be amended, supplemented or otherwise modified from time to time.
“Multiemployer Plan” means any Employee Benefit Plan which is a “multiemployer plan” as defined in Section 3(37) of ERISA.
“New Guarantor” has the meaning set forth in Section 8.24.

“New Indebtedness Opportunity” has the meaning set forth in Section 8.19.
“Non-Excluded Taxes” (a) any and all Taxes, other than Excluded Taxes, and (b) to the extent not otherwise described in (a), Other Taxes.

“Notes” means each US Term Note, each UK Term Note and each Fourth Tranche US Last Out Term Note and shall include each such US Term Note, UK Term Note, or Fourth Tranche US Last Out Term Note delivered pursuant to any provision of this Agreement and each such US Term Note, UK Term Note, or Fourth Tranche US Last Out Term Note delivered in substitution or exchange for, or otherwise in respect of, any other Note pursuant to any such provision.
“Notice of Borrowing” means a notice given by the Borrower Representative to the Agent pursuant to Section 2.1, in substantially the form of Exhibit F hereto.
“Obligations” means any and all obligations, liabilities and indebtedness, including without limitation, principal, interest (including, but not limited to, interest calculated at the Default Rate and post-petition interest in any proceeding under any Bankruptcy Law), Late Charges, Monthly Maintenance Fees, Prepayment Premium, and other fees, costs, expenses and other charges and other obligations arising under the Transaction Documents, of the Credit Parties to the Agent, the Holders and the Lenders or to any parent, affiliate or subsidiary of the Agent, such Holders or such Lenders of any and every kind and nature, howsoever created, arising or evidenced and howsoever owned, held or acquired, whether now or hereafter existing, whether now due or to become due, whether primary, secondary, direct, indirect, absolute, contingent or otherwise (including, without limitation, obligations of performance), whether several, joint or joint and several, and whether arising or existing under written or oral agreement or by operation of law.
“Optional Reborrowing” has the meaning set forth in Section 2.3(c).
“Optional Revolving Date” means the first or last calendar day of any calendar month in the first calendar quarter.
“Original Closing Date” means January 30, 2014.
“Original Financing Agreement” has the meaning set forth in the Recitals.
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“Original Jurisdiction” means, in relation to a Credit Party, the jurisdiction under whose laws that Credit Party is incorporated as of the Original Closing Date or, in the case of a New Guarantor, as of the date on which such New Guarantor becomes party to this Agreement as a New Guarantor.
“Original Restatement Closing Date” means August 15, 2014.
“Other Taxes” has the meaning set forth in Section 2.6(c).
“Outside Legal Counsel” means counsel selected by the Borrowers from time to time.
“Participant Register” has the meaning set forth in Section 13.9.
“Past Due Roll Rate (UK)” means the rate expressed as a percentage, as of the last day of any calendar month, of the ratio of (i) the aggregate outstanding principal balance of Consumer Loans marked as “Sunny” on the monthly financial statements provided to Agent pursuant to Section 8.2(a) (a) that have a principal payment that is one or more days past due but not greater than thirty days past due or (b) that did not have a principal payment that is one or more days past due in the calendar month immediately prior to the calendar month that includes the date of determination but became charged off in accordance with the Program Guidelines in the calendar month that includes such date of determination, in each case, in the calendar month that includes such date of determination to (ii) the aggregate outstanding principal balance of Consumer Loans marked as “Sunny” on the monthly financial statements provided to Agent pursuant to Section 8.2(a) that do not have a principal payment that became one or more days past due or is otherwise charged off in accordance with the Program Guidelines, in each case, as of the last day of the calendar month immediately prior to the calendar month that includes such date of determination.
“Past Due Roll Rate (US)” means the rate expressed as a percentage, as of the last day of any calendar month, of the ratio of (i) the aggregate outstanding principal balance of Consumer Loans marked as “Rise” on the monthly financial statements provided to Agent pursuant to Section 8.2(a) (a) that have a principal payment that is one or more days past due but not greater than thirty days past due or (b) that did not have a principal payment that is one or more days past due in the calendar month immediately prior to the calendar month that includes the date of determination but became charged off in accordance with the Program Guidelines in the calendar month that includes such date of determination, in each case, in the calendar month that includes such date of determination to (ii) the aggregate outstanding principal balance of Consumer Loans marked as “Rise” on the monthly financial statements provided to Agent pursuant to Section 8.2(a) that do not have a principal payment that became one or more days past due or is otherwise charged off in accordance with the Program Guidelines, in each case, as of the last day of the calendar month immediately prior to the calendar month that includes such date of determination.
“PBGC” means the Pension Benefit Guaranty Corporation or any successor thereto.
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“Pension Plan” means any Employee Benefit Plan, other than a Multiemployer Plan, which is subject to Sections 412 and 430 of the Code or Section 302 of ERISA.
“Performance Hurdle” means that the Elevate Credit Parent has a minimum net income in the 2019 Fiscal Year of $22,000,000 and has a minimum net income in the 2020 Fiscal Year equal to an amount to be agreed upon by the Agent and each Credit Party no later than February 15, 2020.of $30,000,000.
“Permitted Dispositions” means (i) sales of Inventory in the ordinary course of business, (ii) disposals of obsolete, worn out or surplus equipment in the ordinary course of business, (iii) the granting of Permitted Liens, (iv) the licensing of patents, trademarks, copyrights and other Intellectual Property Rights in the ordinary course of business consistent with past practice, (v) collection, sale, or disposition in the ordinary course of business of the Credit Parties of Credit Card Receivables that are not Eligible Credit Card Receivables and that have been settled or charged off, (vi) collection, sale, or disposition in the ordinary course of business of the Credit Parties of Consumer Loans that are not Eligible US Consumer Loans or Eligible UK Consumer Loans and that have been settled or charged off, (vii) reasonable expenditures of cash in the ordinary course of business or as otherwise approved by the board of directors (or similar governing body) of the applicable Credit Party, (viii) subject to (A) no adverse selection by the Credit Parties, (B) no Event of Default existing at the time of such sale or other disposition (or arising therefrom) and (C) immediately after giving pro forma effect to such sale or other disposition, the Credit Parties being in pro forma compliance with the covenants set forth in Section 8.1, sales or other dispositions of Credit Card Receivables in an aggregate principal amount not to exceed $10,000,000 and (ix) subject to no adverse selection by the Credit Parties, dispositions and sales of Consumer Loans and/or Credit Card Receivables by the Credit Parties for which Lender has not provided funding for the applicable Borrower to originate and/or purchase a participation interest therein.
“Permitted Draw Date” means any one Business Day of each calendar month during the term of this Agreement.
“Permitted Indebtedness” means (i) Reserved, (ii) Indebtedness of any (A) Domestic Subsidiary Credit Party (other than any US Term Note Borrower) to Elevate Credit Parent or any other Domestic Subsidiary Credit Party (other than any US Term Note Borrower) and (B) Foreign Subsidiary Credit Party (other than the UK Borrower) to any other Foreign Subsidiary Credit Party (other than the UK Borrower); provided, in each case, all such Indebtedness shall be unsecured, (iii) Reserved, (iv) Indebtedness in respect of netting services, overdraft protections and otherwise in connection with customary deposit accounts maintained by any Credit Party as part of its ordinary cash management program, (v) performance guaranties in the ordinary course of business and consistent with historic practices of the obligations of suppliers, customers, franchisees and licensees of Elevate Credit Parent and its subsidiaries, (vi) guaranties by Elevate Credit Parent of Indebtedness of any subsidiary Credit Party or guaranties by any Domestic Subsidiary Credit Party (other than any US Term Note Borrower) of any Indebtedness of Elevate Credit Parent with respect, in each case, to Indebtedness otherwise permitted to be incurred pursuant to this definition, (vii) Indebtedness which is secured by Liens permitted under clause
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(xii) of the definition of “Permitted Liens”, (viii) Indebtedness of any subsidiary Credit Party with respect to financing leases; provided, the principal amount of such Indebtedness shall not exceed at any time $5,000,000 for such subsidiary Credit Parties, (ix) purchase money Indebtedness of any subsidiary Credit Parties; provided, (A) any such Indebtedness shall be secured only by the asset acquired in connection with the incurrence of such Indebtedness and (B) the aggregate amount of all such Indebtedness shall not exceed at any time $2,500,000 in the aggregate for such subsidiary Credit Parties, (x) other unsecured Indebtedness of any subsidiary Credit Party, which is subordinated to the Obligations on terms acceptable to Agent in its sole discretion in an aggregate amount not to exceed at any time $25,000,000, excluding any CSO Loans, (xi) guaranties by the Credit Parties in favor of the Agent, for the benefit of the Lenders and the Holders, hereunder and under the other Transaction Documents, (xii) to the extent constituting Indebtedness, obligations of a Credit Party (other than any US Term Note Borrower) under the Bank Transaction Documents; provided, that any such guaranty obligations shall be non-recourse to such Credit Party (but for the avoidance of doubt, any such guaranty obligations may be secured by Permitted Liens of the type described in clause (xiv) of the definition of Permitted Liens; and (xiii) guaranties by Elevate Credit Parent of the obligations of any Domestic Credit Party to a lender in respect of any CSO Loans; provided, that no Indebtedness otherwise permitted by clauses (x) or (xi) shall be assumed, created, or otherwise refinanced if an Event of Default (or event or circumstance that, with the passage of time, the giving of notice, or both, would become an Event of Default) has occurred or would result therefrom.
“Permitted Liens” means (i) Liens in favor of the Agent, for the benefit of the Lenders and the Holders, (ii) Liens for Taxes, assessments and other governmental charges not delinquent or if obligations with respect to such Taxes are being contested in good faith by appropriate proceedings promptly instituted and diligently conducted so long as such reserves or other appropriate provisions, if any, as shall be required by GAAP shall have been made for any such contested amounts, (iii) statutory Liens of landlords, banks (and rights of set off), of carriers, warehousemen, mechanics, repairmen, workmen and materialmen, and other Liens imposed by law (other than any such Lien imposed pursuant to §§401 (a)(29) or 412(n) of the Code or by ERISA), in each case incurred in the ordinary course of business (A) for amounts not yet overdue, or (B) for amounts that are overdue and that (in the case of any such amounts overdue for a period in excess of five (5) days) are being contested in good faith by appropriate proceedings, so long as such reserves or other appropriate provisions, if any, as shall be required by GAAP shall have been made for any such contested amounts, (iv) Liens incurred in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other types of social security, or to secure the performance of tenders, statutory obligations, surety and appeal bonds, bids, leases, government contracts, trade contracts, performance and return of money bonds and other similar obligations (exclusive of obligations for the payment of borrowed money or other Indebtedness), so long as no foreclosure, sale or similar proceedings have been commenced with respect to any portion of the Collateral on account thereof, (v) easements, rights of way, restrictions, encroachments, and other minor defects or irregularities in title, in each case which do not and will not interfere in any material respect with the value or use of the property to which such Lien is attached or with the ordinary conduct of the business of such Person, (vi) any interest or title of a lessor or sublessor under any lease of real estate, (vii) Liens solely on any cash earnest money deposits made by such Person in connection with any
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letter of intent or purchase agreement permitted hereunder, (viii) purported Liens evidenced by the filing of precautionary UCC financing statements relating solely to operating leases of personal property entered into in the ordinary course of business, (ix) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods, (x) any zoning or similar law or right reserved to or vested in any governmental office or agency to control or regulate the use of any real property, in each case which do not and will not interfere with or affect in any material respect the use, value or operations of any real estate assets or in the ordinary conduct of the business of such Person, (xi) licenses of patents, trademarks and other intellectual property rights granted by such Person in the ordinary course of business and not interfering in any respect with the ordinary conduct of the business of such Person, (xii) Liens (A) which are junior in priority to those of the Agent, for the benefit of the Lenders and the Holders, pursuant to a subordination agreement acceptable to the Agent, (B) which may not be foreclosed upon without the consent of the Agent, (C) which attach only to goods and (D) which, in the aggregate, do not secure Indebtedness in excess of $1,000,000, (xiii) Liens securing Indebtedness permitted pursuant to clause (ix) of the definition of Permitted Indebtedness; provided, any such Lien shall encumber only the asset acquired with the proceeds of such Indebtedness and (xiv) Liens securing Permitted Indebtedness described in clause (xii) of the definition of Permitted Indebtedness so long as such Liens consist solely of cash collateral in an aggregate outstanding amount not to exceed the “Required Balance” or any similar defined term or concept under the Bank Transaction Documents maintained by the applicable Credit Party or Subsidiary in a deposit account maintained at the applicable Bank party to the applicable Bank Transaction Documents which holds only those funds required to satisfy such “Required Balance” or any similar defined term or concept under the applicable Bank Transaction Documents.
“Permitted Redemption” means the redemption of Notes permitted pursuant to Section 2.3(a).
“Permitted Redemption Amount” has the meaning set forth in Section 2.3(a)(i).
“Permitted Redemption Date” means the date on which the Borrower Representative has elected to redeem the Notes in accordance with Section 2.3(a).
“Permitted Redemption Notice” has the meaning set forth in Section 2.3(a)(i).
“Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity and a government or any department or agency thereof.
“Plan” means any Multiemployer Plan or Pension Plan.
“Pounds Sterling” or “£” means the lawful money of the United Kingdom.
“Prepayment Premium” means the premium to be paid in connection with certain prepayments of the Notes pursuant to this Agreement, including pursuant to Section 2.3(a) and Section 2.3(b), but specifically excluding any mandatory prepayment pursuant to Sections
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2.3(b)(ii), 2.3(b)(v), 2.3(b)(vi) or 2.3(b)(vii) (solely to the extent such excess required to be applied as a prepayment relates to a prepayment under Sections 2.3(b)(ii), 2.3(b)(v) or 2.3(b)(vi)).
Solely in respect of the US Term Notes and UK Term Notes, such prepayment premium shall be equal to, with respect to such prepayment to be made or made during any period set forth in the table below, the product of (a) the percentage set forth beside such period in such table and (b) the greater of (i) the aggregate principal amount of such Notes then prepaid or required to be prepaid (excluding the principal amount of any Optional Reborrowings repaid one hundred eighty (180) or more days prior to the applicable prepayment) or (ii) the aggregate principal amount of such Notes prior to an Optional Reborrowing pursuant to Section 2.3(c):
Period Prepayment Premium
January 1, 2022 through and including December 31, 2022 5.0%
January 1, 2023 through and including December 31, 2023 2.0%
    
; provided, that such prepayment premium in connection with a prepayment of such Notes pursuant to Section 2.3(a) in connection with an M&A Event shall equal an amount equal to the sum of (i) the product of (A) the number of days from the date of such prepayment until January 1, 2022 divided by 360 days, (B) the product of the greater of (x) the highest aggregate principal amount of such Notes at any time prior to such prepayment (excluding the principal amount of any Optional Reborrowings repaid one hundred eighty (180) or more days prior to the applicable prepayment) or (y) the aggregate principal amount of such Notes prior to an Optional Reborrowing pursuant to Section 2.3(c) and (C) the Current Interest Rate, and (ii) the product of (A) the greater of (x) the highest aggregate principal amount of such Notes at any time prior to such prepayment (excluding the principal amount of any Optional Reborrowings repaid one hundred eighty (180) or more days prior to the applicable prepayment) or (y) the aggregate principal amount of such Notes prior to an Optional Reborrowing pursuant to Section 2.3(c) and (B) five percent (5%).

Solely in respect of the Fourth Tranche US Last Out Term Notes, such prepayment premium shall be equal to the applicable percentage set forth beside the applicable period in the table below of the aggregate principal amount of such Fourth Tranche US Last Out Term Notes then prepaid or required to be prepaid:
Prepayment Premium Table for all Fourth Tranche US Last Out Term Notes
Period Prepayment Premium
February 1, 2018 through and including February 1, 2019 10.0%
After February 1, 2019 through and including February 1, 2020 5.0%
February 1, 2020 through February 1, 2021 3.0%

“Proceeding” has the meaning set forth in Section 7.15.
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“Program” means (a) the lending program for the solicitation, marketing, and origination of Consumer Loans (or participation interests therein) pursuant to the Consumer Loan Guidelines and (b) the credit card program for the solicitation, marketing, origination and purchase (including participation interests therein) of Credit Card Receivables pursuant to Credit Card Guidelines.
“Program Guidelines” means, collectively, the Consumer Loan Guidelines and the Credit Card Guidelines.
“Property” means any right or interest in or to property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible, including, without limitation, Capital Stock.
“Public Offering” means a public offering of Capital Stock pursuant to a registration statement filed with the Securities and Exchange Commission or any successor or similar Governmental Authority.
“Qualified Funding Failure” has the meaning set forth in Section 2.3(a)(iii).
“Quoted Eurobond Listing” means the listing of the UK Term Notes on a recognized stock exchange as defined by the Income Tax Act 2007.
“Receivables” means the indebtedness and other obligations owed to the Borrower, Elevate Credit Parent or any other Credit Party in connection with any and all liens, title retention and security agreements, chattel mortgages, chattel paper, bailment leases, installment sale agreements, instruments, consumer finance paper and/or promissory notes securing and evidencing unsecured multi-pay consumer installment loans made, and/or time sale transactions or acquired by a Credit Party which were originated in accordance with the Program Guidelines.
“Register” has the meaning set forth in Section 2.8.
“Related Parties” of any Person means such Person’s Affiliates or any of its respective partners, directors, agents, employees and controlling persons.
“Release Agreement” means that certain Release Agreement, dated on or about the Fifth Restatement Closing Date, among Agent, the Credit Parties, and the Credit Card Borrower (as defined therein).
“Released Parties” has the meaning set forth in Section 13.20.
“Releasing Parties” has the meaning set forth in Section 13.20.
“Relevant Jurisdiction” means, in relation to a Credit Party, (a) its Original Jurisdiction; (b) any jurisdiction where any asset subject to or intended to be subject to the Collateral to be created by it is situated; (c) any jurisdiction where it conducts its business; and (d) the jurisdiction whose laws govern the perfection of any of the Security Documents entered into by it.
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“Required Lenders” means at any time (a) the Lenders then holding more than fifty percent (50%) of the aggregate Commitments then in effect plus the aggregate unpaid principal balance of the Notes then outstanding, or (b) if the Commitments have been terminated, the Holders of Notes then holding more than fifty percent (50%) of the aggregate unpaid principal balance of the Notes then outstanding.
“Required US Term Note Lenders” means at any time (a) the Lenders then holding more than fifty percent (50%) of the aggregate US Term Note Commitments then in effect plus the aggregate unpaid principal balance of the US Term Notes then outstanding, or (b) if the US Term Note Commitments have been terminated, the Holders of US Term Notes then holding more than fifty percent (50%) of the aggregate unpaid principal balance of the US Term Notes then outstanding.
“Requirements” means all applicable federal, state and foreign laws and regulations related, directly or indirectly, to the following: credit (including, without limitation, Consumer Credit); servicing; disclosures, information security and privacy and regulations and industry guidance and requirements (including, but not limited to, guidance issued by the Payment Card Industry); the USA Patriot Act; the Office of Foreign Asset Controls' rules and regulations; the Interagency Guidelines; debt collection and debt collection practices laws and regulations applicable to the Credit Parties or the Program; the federal Truth in Lending Act; the federal Electronic Funds Transfer Act; the federal Equal Credit Opportunity Act; the federal Gramm-Leach-Bliley Act; the federal Fair Debt Collection Practices Act; the Bribery Act 2010; the Data Protection Act 1998; and laws, regulations, rules, and guidance applicable to the solicitation, origination, and servicing of the Credit Card Accounts, including but not limited to the credit card network rules, the Payment Card Industry Data Security Standards and the NACHA Operating Regulations. It is hereby acknowledged and agreed by the Credit Parties that “Requirements” shall include, without limitation, (a) the proposed rule captioned 12 CFR Part 1041, Docket No. CFPB-2016-0025, RIN 3170–AA40 released by the Consumer Financial Protection Bureau on June 2, 2016, regardless of whether such rule shall become Law, but as such rule may be amended, supplemented or otherwise modified from time to time, and (b) any other proposed rules or guidelines presented by the Consumer Financial Protection Bureau or any other Governmental Authority from time to time relating to credit (including, without limitation, Consumer Credit); servicing; disclosures, information security and privacy and regulations and industry guidance and requirements, in each case, regardless of whether such rules or guidelines shall become Law, but as such rule and guidelines may be amended, supplemented or otherwise modified from time to time.
“Revolving Amount” has the meaning set forth in Section 2.3(c).
“Revolving Conditions” means the satisfaction of each of the following conditions as of any date of determination:
(a)The Borrowers are in compliance with all of its obligations and covenants under this Agreement and all of the Borrowers’ representations and warranties are true, accurate and correct; and
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(b)No Event of Default (or event or circumstance that, with the passage of time, the giving of notice, or both, would become an Event of Default) has occurred or would result therefrom.
“ROFR Notice” has the meaning set forth in Section 8.19.
“Schedules” has the meaning set forth in ARTICLE 7.
“Second Amendment” means that certain Second Amendment dated the Second Amendment Effective Date by and among the Credit Parties and Agent.
“Second Amendment Effective Date” means August 30, 2017.
“Second Amendment Effective Date UK Exchange Rate” means the exchange rate to convert any amount denominated in Pounds Sterling into Dollars, as in effect on the Second Amendment Effective Date, which exchange rate for the avoidance of doubt is 1.285.
“Second Restatement Closing Date” means June 30, 2016.
“Securities” means the Notes and, to the extent issued, the Conversion Shares.
“Security Agreement” means, individually and collectively, the US Security Agreement and the UK Security Documents.
“Security Assignment” means, that certain Deed of Assignment by way of Security dated on or about the Original Restatement Closing Date made between the applicable UK Credit Parties and the Agent, as the same may be amended, restated, supplemented or otherwise modified from time to time.
“Security Documents” means the US Security Agreement, the UK Security Documents, the Intellectual Property Security Agreements and all other instruments, documents and agreements delivered by any of the Credit Parties, any of their respective Subsidiaries, Affiliates or any equityholder of any of the Credit Parties in order to grant to Agent, any Lender or any Holder a Lien on any real, personal or mixed Property of such Person as security for the Obligations.
“Share Charges” means those certain Charges Over Shares dated on or about the Original Restatement Closing Date made between the applicable UK Credit Parties and the Agent, in each case, as the same may be amended, restated, supplemented or otherwise modified from time to time.
“State Force Majeure Event” means any regulatory event or regulatory change in any state in which the Credit Parties originate Consumer Loans and/or Credit Card Receivables (or purchase participation interests therein) that would prohibit or make it illegal for the Credit Parties to continue to originate or collect Consumer Loans and/or Credit Card Receivables (or participation interests therein and collect thereon, as the case may be) in such state pursuant to the Program or another program of a type similar to the Program.
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“State Force Majeure Paydown Amount” means, as of any date of determination, an amount designated in writing by the Borrower Representative to the Agent within ten (10) days following such date equal to the aggregate outstanding principal amount of the US Term Notes on such date multiplied by a fraction, the numerator of which shall be equal to the portion of such aggregate outstanding principal amount for which the proceeds thereof were used to originate Consumer Loans and/or purchase participation interests in Credit Card Receivables that remain outstanding on such date to borrowers residing in state(s) affected by a State Force Majeure Event (which amount with respect to each such Consumer Loan or Credit Card Receivable, as applicable, shall not exceed the outstanding principal amount of such Consumer Loan or Credit Card Receivable, as applicable, on such date) and the denominator of which shall be equal to the aggregate outstanding principal amount of the US Term Notes on such date.
“Subsidiaries” has the meaning set forth in Section 7.1.
“Swap Rate” means the forward swap rate based on the London Interbank Offered Rate last quoted by Bloomberg for deposits of U.S. Dollars for a period of three months, and taking into account the time period between the Issuance Date and the Maturity Date as determined by the Agent in its sole reasonable discretion based on the Bloomberg SWPM calculator. If no such London Interbank Offered Rate exists, such rate will be the rate of interest per annum, as determined by the Agent at which deposits of U.S. Dollars in immediately available funds are offered on the last Business Day of each calendar month by major financial institutions reasonably satisfactory to the Agent in the London interbank market for a period of three months for the applicable principal amount on such date of determination.
“Taking” means any taking of any property of any Credit Party or any of their Subsidiaries or any portion thereof, in or by condemnation or other eminent domain proceedings pursuant to any law, general or special, or by reason of the temporary requisition of the use of such assets or any portion thereof, by any Governmental Authority, civil or military (i) in excess of $250,000 in the aggregate for any Fiscal Year or (ii) that results, either individually or in the aggregate, in a Material Adverse Effect.
“Taxes” means any and all current or future (a) foreign, federal, state or local income, gross receipts, franchise, estimated, alternative minimum, add-on minimum, sales, use, transfer, registration, value added, excise, parking, unclaimed property/escheatment, natural resources, severance, stamp, occupation, occupancy, ad valorem, premium, windfall profit, environmental, customs, duties, real property, personal property, capital stock, social security, unemployment, disability, payroll, license, employee or other withholding, or other tax of any kind whatsoever, (b) any liability for the payment of amounts of the type described in clause (a) hereof as a result of being at any time a transferee of, or a successor in interest to, any person, and (c) any interest, penalties or additions to tax or additional amounts (whether disputed or not) in respect of the foregoing.
“Tax Return” means any return, declaration, report, claim for refund, or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof.
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“Third Amended and Restated Financing Agreement” has the meaning set forth in the Recitals.
“Third Restatement Closing Date” means February 1, 2017.
“Total Cash” means, as of any date of determination, the sum of all unrestricted cash and Cash Equivalent Investments of Elevate Credit Parent and all other Credit Parties. For purposes of clarification, unrestricted cash includes all cash of the Credit Parties that is being held by an ACH provider prior to remittance to a Credit Party.
“Trailing Eight Month Charge Off Rate (UK)” means, as of any date of determination, the average, for each of the three (3) immediately preceding completed months, of the Eight Month Charge Off Rate (UK).
“Trailing Excess Spread (UK)” means, as of any date of determination, the average of the Excess Spread (UK) in (i) the calendar month immediately prior to the calendar month that includes such date of determination and (ii) the calendar month that includes such date of determination.
“Trailing Excess Spread (US)” means, as of any date of determination, the average of the Excess Spread (US) in (i) the calendar month immediately prior to the calendar month that includes such date of determination and (ii) the calendar month that includes such date of determination.
“Trailing Four Month Charge Off Rate (UK)” means, as of any date of determination, the average, for each of the three (3) immediately preceding completed months, of the Four Month Charge Off Rate (UK).
“Trailing Four Month Charge Off Rate (US)” means, as of any date of determination, the average, for each of the three (3) immediately preceding completed months, of the Four Month Charge Off Rate (US).
“Trailing Past Due Roll Rate (UK)” means, as of any date of determination, the average, of the Past Due Roll Rate (UK) in (i) the calendar month immediately prior to the calendar month that includes such date of determination and (ii) the calendar month that includes such date of determination.
“Trailing Past Due Roll Rate (US)” means, as of any date of determination, the average, of the Past Due Roll Rate (US) in (i) the calendar month immediately prior to the calendar month that includes such date of determination and (ii) the calendar month that includes such date of determination.
“Trailing Twelve Month Charge Off Rate (US)” means, as of any date of determination, the average, for each of the three (3) immediately preceding completed months, of the Twelve Month Charge Off Rate (US).
“Transaction Documents” has the meaning set forth in Section 7.2.
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“Twelve Month Charge Off Rate (US)” means, as of any date of determination and with respect to any Vintage Pool of Consumer Loans marked as “Rise” on the monthly financial statements provided to Agent pursuant to Section 8.2(a), the ratio of (i) the aggregate Charge Off amount in such Vintage Pool during the period beginning on the applicable date of origination through the end of the month of such origination and ending on the twelfth consecutive calendar month, beginning with such month of origination to (ii) the aggregate principal balance of such Vintage Pool at the time of origination.
“UCC” has the meaning set forth in Section 7.13.
“UK Borrower” has the meaning set forth in the introductory paragraph hereto.

“UK Credit Party” means the UK Borrower and each other Credit Party organized under the laws of the United Kingdom.
“UK Force Majeure Event” means any regulatory event or regulatory change in the United Kingdom that would prohibit or make it illegal for the UK Borrower to continue to originate or collect Consumer Loans in the United Kingdom pursuant to the Program or another program of a type similar to the Program.
“UK Force Majeure Paydown Amount” means, as of any date of determination, an amount designated in writing by the Borrower Representative to the Agent within ten (10) days following such date equal to the aggregate outstanding principal amount of the UK Term Notes on such date.
“UK Security Documents” means, collectively, the Debenture, the Share Charges, the Security Assignment and the Intercompany Subordination Agreement.
“UK Tax Deduction” has the meaning set forth in Section 2.6(a).
“UK Term Note Commitment” has the meaning set forth in Section 2.1(b).
“UK Term Notes” means each UK Term Note (USD) and each UK Term Note (GBP), and shall include each such UK Term Note (USD) or UK Term Note (GBP) delivered pursuant to any provision of this Agreement and each such UK Term Note (USD) or UK Term Note (GBP) delivered in substitution or exchange for, or otherwise in respect of, any other UK Term Note pursuant to any such provision.
“UK Term Notes (GBP)” has the meaning set forth in Section 2.1(b).
“UK Term Notes (USD)” has the meaning set forth in Section 2.1(b).
“US Credit Party” means US Term Note Borrowers, the US Last Out Term Note Borrower and each other Credit Party organized under the laws of a State of the United States or the District of Columbia.
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“US Holder” mean each of VPC Specialty Finance Fund I, L.P. (“VP”), VPC Special Opportunities Fund III Onshore, L.P. and any other US Person that is an assignee or transferee of VP or is the beneficial owner of a direct or indirect interest in any of the foregoing.
“US Last Out Term Note Borrower” has the meaning set forth in the introductory paragraph hereto.
“US Last Out Term Notes” has the meaning set forth in Section 2.1(d).
“US Person” means any Person that is a “United States Person” as defined in Section 7701(a)(30) of the Code.
“US Security Agreement” means that certain Amended and Restated Pledge and Security Agreement dated as of the Fourth Restatement Closing Date by and among Agent and the “Obligors” (as defined therein), as the same may be amended, restated, supplemented or otherwise modified from time to time.
“US Tax Compliance Certificate” has the meaning set forth in Section 2.6(e).
“US Term Note Borrowers” has the meaning set forth in the introductory paragraph hereto.
“US Term Note Commitment” has the meaning set forth in Section 2.1(a).
“US Term Notes” has the meaning set forth in Section 2.1(a).
“Vintage Pool” means and refers to, at any given time, all Consumer Loans that were originated in a particular calendar month. By way of example, and not by way of limitation, all Consumer Loans that were originated in December 2018 shall constitute one Vintage Pool for the calendar month that ended on December 31, 2018; all Consumer Loans that were originated in January 2019 shall constitute one Vintage Pool for the calendar month that ended on January 31, 2019; all Consumer Loans that were originated in February 2019 shall constitute one Vintage Pool for the calendar month that ended on February 28, 2019; and so on.
“Waivable Mandatory Prepayment” has the meaning set forth in Section 2.3(d).
“Withholding Agent” means any Borrower, any Credit Party or the Agent.
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”. Unless the context requires otherwise, (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as 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
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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 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 Agreement and (e) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any right or interest in or to assets and properties of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible. References in this Agreement to “determination” by the Agent include good faith estimates by the Agent (in the case of quantitative determinations) and good faith beliefs by the Agent (in the case of qualitative determinations).
Section 1.3Accounting and Other Terms. Unless otherwise expressly provided herein, each accounting term used herein shall have the meaning given it under GAAP applied on a basis consistent with those used in preparing the financial statements delivered to Agent pursuant to Section 8.2. Notwithstanding any other provision contained herein, all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to herein shall be made, without giving effect to any election under Accounting Standards Codification 825-10 (or any other Financial Accounting Standard having a similar result or effect) to value any Indebtedness or other liabilities of any Credit Party or any Subsidiary of any Credit Party at “fair value”.
Section 1.4Borrower Representative. Each Borrower hereby designates and appoints Elevate Credit as its representative and agent on its behalf (in such capacity, the “Borrower Representative”) for the purposes of delivering certificates, including Compliance Certificates, giving Notices of Borrowing and other instructions with respect to the disbursement of the proceeds of the Notes, giving and receiving all other notices and consents hereunder or under any of the other Transaction Documents and taking all other actions (including in respect of compliance with covenants) on behalf of any Borrower or Borrowers under the Transaction Documents. Borrower Representative hereby accepts such appointment. Agent, each Lender and each Holder may regard any notice or other communication pursuant to any Transaction Document from Borrower Representative as a notice or communication from all Borrowers. Each warranty, covenant, agreement and undertaking made on behalf of a Borrower by Borrower Representative shall be deemed for all purposes to have been made by such Borrower and shall be binding upon and enforceable against such Borrower to the same extent as if the same had been made directly by such Borrower.
Section 1.5Payments in Foreign Currencies. If, notwithstanding the terms of Section 2.4, the Agent receives any payment from or on behalf of any Credit Party in a currency other than the currency in which the relevant Obligation is denominated, the Agent may convert the payment (including the monetary proceeds of realization upon any Collateral) into the currency in which the relevant Obligation is payable at the exchange rate published in The Wall Street Journal (or if such reference is not available, by such other method reasonably determined by Agent) on the Business Day closest in time to the date on which such payment was due (or if either such reference is not available, by such other method reasonably determined by Agent).
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Any such determination or redetermination by Agent shall be conclusive and binding for all purposes, absent manifest error. No determination or redetermination by any Lender, any Holder or any Credit Party and no other currency conversion shall change or release any obligation of any Credit Party or of any Lender, any Holder (other than Agent) under any Transaction Document, each of which agrees to pay separately for any shortfall remaining after any conversion and payment of the amount as converted. The relevant Obligations shall be satisfied only to the extent of the amount actually received by the Agent upon such conversion. Agent may round up or down, and may set up appropriate mechanisms to round up or down, any amount hereunder to nearest higher or lower amounts and may determine reasonable de minimis payment thresholds.
Section 1.6Exchange Rates. Unless otherwise expressly set forth herein or therein, wherever in this Agreement or any other Transaction Document, an amount contained in a representation, warranty, covenant or Event of Default related thereto is expressed in Dollars, but a relevant currency applicable thereto is denominated in another currency, such amount will be deemed to be the Dollar Equivalent thereof; provided, that, for purposes of determining compliance with any incurrence or expenditure tests set forth herein or in any other Transaction Document or with Dollar-based basket levels appearing herein or in any other Transaction Document, any amounts so incurred, expended or utilized (to the extent incurred, expended or utilized in a currency other than Dollars) shall be deemed to be the Dollar Equivalent amount thereof as of the date of such incurrence, expenditure or utilization under any provision of any such Section or definition that has an aggregate Dollar limitation provided for therein. Unless otherwise specified herein, all determinations of Dollar Equivalents shall be determined by reference to The Wall Street Journal published on the Business Day closest in time to the relevant date of determination or for the relevant period of determination (or if such reference is not available, by such other method reasonably determined by Agent). Any such determination or redetermination by Agent shall be conclusive and binding for all purposes, absent manifest error.
Section 1.7Judgment Currency. If, for the purposes of obtaining judgment in any court, it is necessary to convert a sum due hereunder or any other Transaction Document in one currency into another currency, the rate of exchange used shall be that at which in accordance with normal banking procedures Agent could purchase the first currency with such other currency on the Business Day preceding that on which final judgment is given. The obligation of any Credit Party in respect of any such sum due from it to Agent, any Lender or any other Holder hereunder or under the other Transaction Documents shall, notwithstanding any judgment in a currency (the “Judgment Currency”) other than that in which such sum is denominated in accordance with the applicable provisions of this Agreement (the “Agreement Currency”), be discharged only to the extent that on the Business Day following receipt by Agent of any sum adjudged to be so due in the Judgment Currency, Agent may in accordance with normal banking procedures purchase the Agreement Currency with the Judgment Currency. If the amount of the Agreement Currency so purchased is less than the sum originally due from the applicable Credit Parties in the Agreement Currency, such Credit Parties agree, as a separate obligation and not-withstanding any such judgment, to indemnify Agent or the Person to whom such obligation was owing against such loss.
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Article 2
BORROWERS’ AUTHORIZATION OF ISSUE

Section 2.1Senior Secured Term Notes; Senior Secured UK Term Notes; Senior Secured Fourth Tranche US Last Out Term Notes.
(a)Rise SPV, as “US Term Note Borrower” as defined in the Third Amended and Restated Financing Agreement previously (i) authorized and issued to the Lenders on the Original Closing Date senior secured term notes in the aggregate principal amount of the Maximum US Term Note Commitment (as defined in the Original Financing Agreement), dated the date of issue thereof, maturing on the Maturity Date (as defined in the Original Financing Agreement), bearing interest as provided in Section 2.2 below and in the form of Exhibit A to the Original Financing Agreement and Exhibit A-1 hereto (the “Existing US Term Notes”) and (ii) authorized the issuance to the applicable Lenders prior to the date hereof additional senior secured term notes in an aggregate principal amount equal to the Maximum US Term Note Commitment minus the aggregate original principal amount of the Existing US Term Notes, to be dated the date of issue thereof, to mature on the Maturity Date, to bear interest as provided in Section 2.2 below and in the form of Exhibit A-1 hereto (the senior secured term notes described in the foregoing clauses (i) and (ii) collectively, the “US Term Notes”). Today Card, as a US Term Note Borrower, hereby ratifies the previous authorization and issuance of the Existing US Term Notes and other US Term Notes issued prior to the date hereof, authorizes the issuance of additional US Term Notes in accordance with the terms hereof after the date hereof and agrees, together with Rise SPV as a US Term Note Borrower, to be jointly and severally liable for the US Term Notes issued prior to the date hereof and all other Obligations of the “US Term Note Borrower” as defined in the Fourth Amended and Restated Financing Agreement as if it were originally a party thereto. The commitment of each Lender to fund its pro rata share of draws under the US Term Notes as of the Fifth Restatement Closing Date is set forth opposite such Lender’s name in column three (3) of Section 1 (US Term Notes) of the Schedule of Lenders attached hereto (such amount as the same may be reduced or increased from time to time in accordance with this Agreement, being referred to herein as such Lender’s “US Term Note Commitment”). The US Term Note Borrowers shall repay, on a joint and several basis, the outstanding principal balance of the US Term Notes in full in cash on the Maturity Date, unless accelerated in accordance with Section 10.2 or redeemed or prepaid in accordance with Section 2.3. A portion of the Maximum US Term Note Commitment under the US Term Notes was previously advanced to certain of the US Term Note Borrowers by the Lenders under the Original Financing Agreement (as defined in the Third Amended and Restated Financing Agreement), the Original Financing Agreement, the Third Amended and Restated Financing Agreement or the Fourth Amended and Restated Financing Agreement, as applicable, as is set forth opposite such Lender’s name in column four (4) of Section 1 (US Term Notes) of the Schedule of Lenders attached hereto. Each US Term Note Borrower acknowledges and agrees that, as of the Fifth Restatement Closing Date, immediately prior to giving effect to the transactions contemplated by this Agreement, the aggregate outstanding principal balance of the US Term Notes is $207,000,000. Each US Term Note Borrower hereby (a) represents, warrants, agrees, covenants and reaffirms that it has no defense, set off, claim or counterclaim against the
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Agent, the Holders or the Lenders with regard to its Obligations under the US Term Notes arising prior to the Fifth Restatement Closing Date and (b) reaffirms its obligation to repay the US Term Notes in accordance with the terms and provisions of this Agreement and the other Transaction Documents. For purposes of clarification, the entire outstanding principal balance of the US Term Notes as of the Fifth Restatement Closing Date shall be deemed to constitute a portion of the outstanding principal balance of the US Term Notes from and after the Fifth Restatement Closing Date, without constituting a novation. Future draws under the US Term Notes shall be disbursed as the Borrower Representative shall direct on each borrowing date, upon the submission of such evidence as the Agent shall request to verify the satisfaction of the conditions set forth in Section 5.2 below (including, without limitation, a Borrowing Base Certificate delivered in accordance with Section 5.2(g) prior to such disbursement); provided, however, that, after giving effect to any such draw under the US Term Notes, the aggregate principal amount of all (i) US Term Notes shall not exceed the Maximum US Term Note Balance and (ii) First Out Notes shall not exceed the Maximum First Out Note Balance. The Borrower Representative shall deliver to the Agent a Notice of Borrowing setting forth each requested draw not later than noon, Chicago time, on (A) the fifteenth (15th) day prior to the proposed borrowing date upon which the US Term Note Borrowers desire to make a draw under the US Term Notes in an amount of $10,000,000 or less or (B) the thirtieth (30th) day prior to the proposed borrowing date upon which the US Term Note Borrowers desire to make a draw under the US Term Notes in an amount of greater than $10,000,000, in each case, or such earlier date as shall be agreed to by the applicable Lenders; provided, further, however, that the Borrower Representative on behalf of the US Term Note Borrowers shall be entitled to deliver only two (2) Notices of Borrowing during each calendar month. Each Notice of Borrowing required hereunder (i) shall be irrevocable, (ii) shall specify the amount of the proposed draw (which shall be in increments of not less than $100,000) under the US Term Notes and the applicable US Term Note Borrower requesting the proposed draw, (iii) shall specify the proposed borrowing date for such proposed draw, which shall be a Permitted Draw Date and (iv) shall specify wire transfer instructions in accordance with which such draw under the US Term Notes shall be funded. Upon receipt of any such Notice of Borrowing, the Agent shall promptly notify each Lender thereof and of the amount of such Lender’s pro rata share of the proposed borrowing under the US Term Notes (determined on the basis of such Lender’s US Term Note Commitment relative to the aggregate US Term Note Commitment of all Lenders) and, subject to the terms and conditions of this Agreement and in reliance upon the representations and warranties of the Credit Parties contained herein, each Lender holding a US Term Note Commitment shall fund its pro rata share of the proposed borrowing under the US Term Notes to Agent no later than 12:00 p.m. (Noon) Central Time on the applicable Permitted Draw Date in immediately available funds in accordance with the wire instructions provided by Agent to such Lender and upon receipt of such funds from all applicable Lenders Agent will fund such proposed borrowing on the applicable Permitted Draw Date in immediately available funds in accordance with terms of such Notice of Borrowing; provided, that notwithstanding the foregoing to the contrary, in the event of a Defaulting US Term Note Lender with respect to a proposed borrowing under the US Term Notes, at the election of the Agent and each applicable Lender that is not a Defaulting US Term Note Lender, such Lender(s) may agree to fund such Defaulting US Term Note Lender’s pro rata share of the proposed borrowing under the US Term Notes in amounts acceptable to Agent and such Lender(s) in their sole discretion and in the event of any such funding by such Lender(s), (i)
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such Defaulting US Term Note Lender shall be automatically deemed to have assigned to the applicable Lender(s) funding more than their pro rata share of the proposed borrowing under the US Term Notes (and such Lender(s) funding more than their pro rata share of the proposed borrowing under the US Term Notes shall be automatically deemed to have assumed) a percentage interest in the US Term Note Commitment of such Defaulting US Term Note Lender in amounts sufficient to give effect to such non pro rata funding and such assignment shall otherwise be deemed to be made pursuant to, and in accordance with, the terms of Section 13.8 without further action or documentation by any Person and (ii) the Schedule of Lenders attached hereto shall be updated by Agent to reflect such assignments of the US Term Note Commitments. Notwithstanding anything to the contrary herein, for purposes of clarification, it is hereby agreed that during each calendar month there shall be only, and the Borrower Representative on behalf of the US Term Note Borrowers shall not be entitled to specify more than, two (2) Permitted Draw Dates. The US Term Note Borrowers and Agent, on behalf of the applicable Lenders and Holders, hereby agree that Agent and US Term Note Borrowers may from time to time, update what portions of the aggregate principal amount of the US Term Notes then outstanding are deemed requested and/or borrowed by Rise SPV, as a US Term Note Borrower and what portions of the aggregate principal amount of the US Term Notes then outstanding are deemed requested and/or borrowed by Today Card, as a US Term Note Borrower (but in any event any such allocation shall not affect or otherwise change the joint and several nature of the obligations of the US Term Note Borrowers hereunder).
(b)UK Term Notes. The UK Borrower previously authorized and issued to the Lenders senior secured term notes denominated in Dollars in the aggregate principal amount of the Maximum UK Commitment (as defined in the Fourth Amended and Restated Financing Agreement), dated the date of issue thereof, maturing on the Maturity Date (as defined in the Fourth Amended and Restated Financing Agreement), bearing interest as provided in Section 2.2 below and in the forms of Exhibit A-2(a) to the Fourth Amended and Restated Financing Agreement and Exhibit A-2(a) hereto (the “UK Term Notes (USD)”) and Exhibit A-2(b) to the Fourth Amended and Restated Financing Agreement and Exhibit A-2(b) hereto (the “UK Term Notes (USD)”). A portion of the Maximum UK Commitment under the UK Term Notes was previously advanced to the UK Borrower by the Lenders as is set forth opposite such Lender’s or the applicable Holders’ name in column four (4) of Section 2(a) (UK Term Notes (USD) and column four (4) of Section 2(b) (UK Term Notes (GBP) of the Schedule of Lenders attached hereto. The aggregate outstanding principal amount of UK Term Notes (USD) of each applicable Lender immediately after giving effect to the transactions contemplated by this Agreement on the Fifth Restatement Closing Date is set forth opposite such Lender’s name in column four (4) of Section 2(a) (UK Term Notes (USD)) of the Schedule of Lenders attached hereto. The commitment of each applicable Lender to fund its pro rata share of draws under the UK Term Notes (GBP) as of the Fifth Restatement Closing Date is set forth opposite such Lender’s name in column three (3) of Section 2(b) (UK Term Notes (GBP)) of the Schedule of Lenders attached hereto (such amount as the same may be reduced or increased from time to time in accordance with this Agreement, being referred to herein as such Lender’s “UK Term Note Commitment”) (provided, that notwithstanding the foregoing to the contrary, the UK Term Note Commitments shall be funded in Dollars instead of Pounds Sterling; provided, that the applicable Lenders shall use best efforts to fund such amounts in Pounds Sterling unless
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otherwise elected by Agent in its sole discretion (and for the avoidance of doubt, any amounts requested in Pounds Sterling but funded in Dollars shall be funded in the Dollar Equivalent Amount)) and the aggregate outstanding principal amount of UK Term Notes (GBP) of each applicable Lender immediately after giving effect to the transactions contemplated by this Agreement on the Fifth Restatement Closing Date is set forth opposite such Lender’s name in column four (4) of Section 2(b) (UK Term Notes (GBP)) of the Schedule of Lenders attached hereto. To the extent necessary to give effect to the provisions of the preceding sentences, (x) each Person who is a “Lender” under and as defined in the Fourth Amended and Restated Financing Agreement prior to giving effect to this Agreement (each an “Existing Lender”), severally and not jointly, hereby agrees by their consent to Agent’s execution of this Agreement on the Fifth Restatement Closing Date to sell and to assign to each Lender hereunder that was not a “Lender” under the Fourth Amended and Restated Financing Agreement prior to giving effect to this Agreement (each, a “New Lender”), without recourse, representation or warranty (except as set forth below), and each New Lender, severally and not jointly, hereby purchases and assumes from the Existing Lender, effective upon such New Lender’s execution of this Agreement, a percentage interest in the applicable Commitments in amounts required to give effect to the pro rata shares set forth in column three (3) of Section 2(a) (UK Term Notes (USD)) and/or Section 2(b) (UK Term Notes (GBP)) of the Schedule of Lenders attached hereto and (y) each Person who is a “Holder” under and as defined in the Fourth Amended and Restated Financing Agreement prior to giving effect to this Agreement (each an “Existing Holder”), severally and not jointly, hereby agrees by their consent to Agent’s execution of this Agreement on the Fifth Restatement Closing Date to sell and to assign to each Holder hereunder that was not a “Holder” under the Fourth Amended and Restated Financing Agreement prior to giving effect to this Agreement (each, a “New Holder”), without recourse, representation or warranty (except as set forth below), and each New Holder, severally and not jointly, hereby purchases and assumes from the Existing Holder, effective upon Agent’s execution of this Agreement on the Fifth Restatement Closing Date on its behalf, a percentage interest in the applicable UK Term Notes in amounts required to give effect to the pro rata shares set forth in column four (4) of Section 2(a) (UK Term Notes (USD)) and/or Section 2(b) (UK Term Notes (GBP)) attached hereto. The Lenders, severally and not jointly, hereby agree by their execution hereof, to effect such inter-Lender transfers in accordance with column three (3) of Section 2(a) (UK Term Notes (USD)) and Section 2(b) (UK Term Notes (GBP)) of the Schedule of Lenders attached hereto. As a result of such assignments and acceptances, each Existing Lender is absolutely released from any of such obligations, covenants and agreements, to the extent of its assigned shares of the applicable Commitments and the applicable New Lenders hereby assume such obligations, covenants and agreements from such Existing Lenders. The New Lenders and the Existing Lenders shall make all appropriate adjustments in payment for periods prior to the effectiveness of the assignment and acceptance described in this Section 2.1(b) by the Agent or with respect to the making of this assignment directly between themselves. The Holders, severally and not jointly, hereby agree by their consent to Agent’s execution of this Agreement on the Fifth Restatement Closing Date, to effect such inter-Holder transfers in accordance with column four (4) of Section 2(a) (UK Term Notes (USD)) and Section 2(b) (UK Term Notes (GBP)) of the Schedule of Lenders attached hereto. As a result of such assignments and acceptances, each Existing Holder is absolutely released from any of such obligations, covenants and agreements, to the extent of its assigned shares of the applicable UK Term Notes and the applicable New
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Holders hereby assume such obligations, covenants and agreements from such Existing Holders. The New Holders and the Existing Holders shall make all appropriate adjustments in payment for periods prior to the effectiveness of the assignment and acceptance described in this Section 2.1(b) by the Agent or with respect to the making of this assignment directly between themselves. The UK Borrower shall repay the outstanding principal balance of the UK Term Notes in full in cash on the Maturity Date, unless accelerated in accordance with Section 10.2 or redeemed or prepaid in accordance with Section 2.3. Future draws under the UK Term Notes shall be disbursed as the Borrower Representative shall direct on each borrowing date, upon the submission of such evidence as the Agent shall request to verify the satisfaction of the conditions set forth in Section 5.2 below (including, without limitation, a Borrowing Base Certificate delivered in accordance with Section 5.2(g) prior to such disbursement); provided, however, that, after giving effect to any such draw under the UK Term Notes, the aggregate principal amount of all (i) UK Term Notes shall not exceed the Maximum UK Term Note Balance and (ii) First Out Notes shall not exceed the Maximum First Out Note Balance. The Borrower Representative shall deliver to the Agent a Notice of Borrowing setting forth each requested draw not later than noon, Chicago time, on (A) the fifteenth (15th) day prior to the proposed borrowing date upon which the UK Borrower desires to make a draw under the UK Term Notes in an amount of $10,000,000 (or in the case of a requested draw denominated in Pounds Sterling, the Dollar Equivalent thereof) or less or (B) the thirtieth (30th) day prior to the proposed borrowing date upon which the UK Borrower desires to make a draw under the UK Term Notes in an amount of greater than $10,000,000 (or in the case of a requested draw denominated in Pounds Sterling, the Dollar Equivalent thereof), in each case, or such earlier date as shall be agreed to by the applicable Lenders; provided, further, however, that the Borrower Representative on behalf of the UK Borrower shall be entitled to deliver only two (2) Notices of Borrowing during each calendar month. Each Notice of Borrowing required hereunder (i) shall be irrevocable, (ii) shall specify whether the proposed draw shall be Dollars or Pounds Sterling (it being agreed and understood that draws shall be funded in Dollars provided, that the applicable Lenders shall use best efforts to fund in Pound Sterling as described above), (iii) the amount of the proposed draw (which shall be in increments of not less than $100,000 (or in the case of a requested draw denominated in Pounds Sterling, the Dollar Equivalent thereof)), (iv) shall specify the proposed borrowing date for such proposed draw, which shall be a Permitted Draw Date and (v) shall specify wire transfer instructions in accordance with which such draw under the applicable UK Term Notes shall be funded. Upon receipt of any such Notice of Borrowing, the Agent shall promptly notify each applicable Lender thereof and of the amount of such Lender’s pro rata share of the proposed borrowing under the UK Term Notes (determined on the basis of such Lender’s UK Term Note Commitment relative to the aggregate UK Term Note Commitment of all Lenders) and, subject to the terms and conditions of this Agreement and in reliance upon the representations and warranties of the Credit Parties contained herein, each Lender holding a UK Term Note Commitment shall fund its pro rata share of the proposed borrowing under the applicable UK Term Notes on the applicable Permitted Draw Date in immediately available funds in accordance with the terms of such Notice of Borrowing. Notwithstanding anything to the contrary herein, for purposes of clarification, it is hereby agreed that during each calendar month there shall be only, and the Borrower Representative on behalf of the UK Borrower shall not be entitled to specify more than, two (2) Permitted Draw Dates.
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In consideration for (a) each applicable Lender’s commitment to fund its pro rata share of future draws under the UK Term Notes in accordance with the terms of this Agreement, UK Borrower shall issue to each applicable Lender on the Fifth Restatement Closing Date, a UK Term Note (GBP), in the aggregate principal amount of such Lender’s UK Term Loan Commitment and (b) each applicable Lender’s best efforts to fund its pro rata share of draws under the UK Term Notes in Pounds Sterling in accordance with the terms of this Agreement, upon the funding of any such draws in the Dollar Equivalent amount of the requested draw in Dollars and the request of the applicable Lender (or Agent on their behalf), UK Borrower shall issue to such Lender one or more UK Term Notes (USD) evidencing the amounts funded by such Lender in Dollars.
Notwithstanding anything in this Agreement to the contrary, from and after the Fifth Restatement Closing Date, upon the mutual agreement of Agent and Borrower Representative in writing (which may be in the form of an e-mail), (i) all or any portion of the outstanding principal amount under any UK Term Notes (USD) may be converted into (at the Current UK Exchange Rate), and shall thereafter be deemed to constitute a portion of, the outstanding principal balance of the UK Term Notes (GBP) and (ii) all or any portion of the outstanding principal amount under any UK Term Notes (GBP) may be converted into (at the Current UK Exchange Rate), and shall thereafter be deemed to constitute a portion of, the outstanding principal balance of the UK Term Notes (USD) and, in each case, the UK Borrower shall promptly issue to the applicable Lenders replacement UK Term Notes (USD) and/or UK Term Notes (GBP) reflecting any such conversion. For the avoidance of doubt and for purposes of clarification, the Maximum UK Commitment hereunder in respect of the UK Term Notes and the Current Interest Rate applicable to the UK Term Notes would be the same with or without the guarantees provided by the other Borrowers and other Credit Parties in respect of the UK Term Notes pursuant to this Agreement and the other Transaction Documents. The UK Borrower acknowledges and agrees that, as of the Fifth Restatement Closing Date, immediately prior to giving effect to the transactions contemplated by this Agreement, the aggregate outstanding principal balance of the UK Term Notes (USD) is $26,781,600.00 and the aggregate outstanding principal balance of the UK Term Notes (GBP) is £9,747,470.82. Notwithstanding anything in this Agreement or any other Transaction Document to the contrary and for the avoidance of doubt, as a result of the Rise UK Administration Event of Default (as defined in that certain Omnibus Waiver dated July 29, 2020 by and among the Credit Parties, Agent and the other Persons party thereto), the UK Term Note Commitments have been automatically reduced to, and as of the First Amendment Effective Date (after giving effect to the First Amendment) are, £0.00 pursuant to the terms of Section 10.2.
(c)[Reserved].
(d)Fourth Tranche US Last Out Term Notes. The US Last Out Term Note Borrower previously authorized and issued to the Lenders on the Second Restatement Closing Date senior secured last out term notes in the aggregate principal amount of the Maximum Fourth Tranche US Last Out Term Note Commitment, dated the date of issue thereof, maturing on the Maturity Date, bearing interest as provided in Section 2.2 below and in the form of Exhibit A-4 to the Second Amended and Restated Financing Agreement and Exhibit A-4 hereto (the “Fourth Tranche US Last Out Term Notes” or “US Last Out Term Notes”). The
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commitment of each Lender to fund its pro rata share of the single draw under the Fourth Tranche US Last Out Term Notes on the Fifth Restatement Closing Date is set forth opposite such Lender’s name in column three (3) of Section 3 (Fourth Tranche US Last Out Term Notes) of the Schedule of Lenders attached hereto (such amount being referred to herein as such Lender’s “Fourth Tranche US Last Out Term Note Commitment”). The US Last Out Term Note Borrower shall repay the outstanding principal balance of the Fourth Tranche US Last Out Term Notes in full in cash on the Maturity Date, unless accelerated in accordance with Section 10.2 or redeemed or prepaid in accordance with Section 2.3; provided, that notwithstanding the foregoing to the contrary, the US Last Out Term Note Borrower may request, and the Agent and the Holders of the Fourth Tranche US Last Out Term Notes may agree (in their sole discretion), to permit the US Last Out Term Note Borrower to repay the outstanding principal balance of the Fourth Tranche US Last Out Term Notes in cash on an amortizing basis commencing on the Maturity Date on terms to be agreed. The entire Maximum Fourth Tranche US Last Out Term Note Commitment under the Fourth Tranche US Last Out Term Notes was previously advanced to the US Last Out Term Note Borrower by the Lenders and the aggregate outstanding principal amount of all Fourth Tranche US Last Out Term Notes as of the Fifth Restatement Closing Date is allocated as set forth opposite each applicable Lender’s name in column four (4) of Section 4 (Fourth Tranche US Last Out Term Notes) of the Schedule of Lenders attached hereto. The US Last Out Term Note Borrower acknowledges and agrees that, as of the Fifth Restatement Closing Date, immediately prior to giving effect to the transactions contemplated by this Agreement, the aggregate outstanding principal balance of the Fourth Tranche US Last Out Term Notes is $35,050,000. The US Last Out Term Note Borrower hereby (a) represents, warrants, agrees, covenants and reaffirms that it has no defense, set off, claim or counterclaim against the Agent, the Holders or the Lenders with regard to its Obligations under the Fourth Tranche US Last Out Term Notes arising prior to the Fifth Restatement Closing Date and (b) reaffirms its obligation to repay the Fourth Tranche US Last Out Term Notes in accordance with the terms and provisions of this Agreement and the other Transaction Documents. For purposes of clarification, the entire outstanding principal balance of the Fourth Tranche US Last Out Term Notes as of the Fifth Restatement Closing Date shall be deemed to constitute a portion of the outstanding principal balance of the Fourth Tranche US Last Out Term Notes from and after the Fifth Restatement Closing Date, without constituting a novation.

(e)[Reserved].

(f)Relative Priorities. Each of the US Term Notes and the UK Term Notes shall be pari passu (and, for purposes of clarification, senior to the Fourth Tranche US Last Out Term Notes) in right of payment or collectability, whether with respect to payment of redemptions, interest, damages or upon liquidation or dissolution or otherwise. Each of the Fourth Tranche US Last Out Term Notes shall be pari passu (and, for purposes of clarification, junior to the US Term Notes and the UK Term Notes) in right of payment or collectability, whether with respect to payment of redemptions, interest, damages or upon liquidation or dissolution or otherwise. To the extent the Last Out Notes have a Maturity Date prior to that of the US Term Notes and the applicable Credit Parties are required to pay the outstanding principal amount of such Notes on or after the applicable Maturity Date, the payment of the outstanding principal amount of such Notes (or the payment of the next scheduled principal payment in
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respect of such Notes, as the case maybe) shall be subordinated to the payment in full of the outstanding principal amount of the First Out Notes to the extent such principal payment of the Last Out Notes on such Maturity Date would reasonably be expected to cause an Event of Default (or an event or circumstance that, with the passage of time, the giving of notice, or both, would become an Event of Default) to occur and shall not be permitted to be paid so long as such Event of Default (or an event or circumstance that, with the passage of time, the giving of notice, or both, would become an Event of Default) exists (it being agreed and understood that any such payment not permitted to be paid by operation of the foregoing shall subsequently be permitted to be paid if the payment thereof would not reasonably be expected to cause an Event of Default (or an event or circumstance that, with the passage of time, the giving of notice, or both, would become an Event of Default) to occur). For the avoidance of doubt, the priorities specified in this Section 2.1(f) shall be applicable to all voluntary and mandatory principal prepayments of the Notes.
Section 2.2Interest. The Borrowers shall pay interest on the unpaid principal amount of the Notes, in each case, at the rates, time and manner set forth below:
(a)Rate of Interest. Each US Term Note shall bear interest on the unpaid principal amount thereof from the date issued through the date such US Term Note is paid in full in cash (whether upon final maturity, by redemption, prepayment, acceleration or otherwise) at the Current Interest Rate. Each UK Term Note shall bear interest on the unpaid principal amount thereof from the date issued through the date such UK Term Note is paid in full in cash (whether upon final maturity, by redemption, prepayment, acceleration or otherwise) at the Current Interest Rate. Each Fourth Tranche US Last Out Term Note shall bear interest on the unpaid principal amount thereof from the date issued through the date such Fourth Tranche US Last Out Term Note is paid in full in cash (whether upon final maturity, by redemption, prepayment, acceleration or otherwise) at the Current Fourth Tranche US Last Out Term Note Interest Rate. Interest on each Note shall be computed on the basis of a 360-day year and actual days elapsed and, subject to Section 2.2(b), shall be payable monthly, in arrears, on the third (3rd) Business Day following the last day of each calendar month during the period beginning on the date such Note is issued (the “Issuance Date”) and ending on, and including, the date on which the Obligations under such Note are paid in full (each, an “Interest Date”).
(b)Interest Payments. Interest on each Note shall be payable on each Interest Date or at any such other time the Notes become due and payable (whether by acceleration, redemption or otherwise) by the applicable Borrower to the Agent, for the account of the record holder of such Note, on the applicable Interest Date. Each Interest Date shall be considered the last day of an accrual period for U.S. federal income tax purposes. Each applicable Borrower hereby agrees that all accrued and unpaid interest due and owing under the Fourth Amended and Restated Financing Agreement as of the Fifth Restatement Closing Date shall be deemed accrued and continued and shall be paid in cash by such Borrower to the Agent, for the account of the record holder of the applicable Notes, on the first Interest Date following the Fifth Restatement Closing Date.

(c)Default Rate. Upon the occurrence of any Event of Default, the Notes shall bear interest (including post-petition interest in any proceeding under any Bankruptcy Law)
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on the unpaid principal amount thereof at the Default Rate from the date of such Event of Default through and including the date such Event of Default is waived. In the event that such Event of Default is subsequently waived, the adjustment referred to in the preceding sentence shall cease to be effective as of the date of such waiver; provided that interest as calculated and unpaid at the Default Rate during the continuance of such Event of Default shall continue to be due to the extent relating to the days after the occurrence of such Event of Default through and including the date on which such Event of Default is waived. All such interest shall be payable on demand of the Agent.

(d)Savings Clause. In no contingency or event shall the interest rate charged pursuant to the terms of this Agreement exceed the highest rate permissible under any law which a court of competent jurisdiction shall, in a final determination, deem applicable hereto. In the event that such a court determines that the Lenders or Holders have received interest hereunder in excess of the highest applicable rate, the amount of such excess interest shall be applied against the principal amount of the Notes then outstanding to the extent permitted by applicable law, and any excess interest remaining after such application shall be refunded promptly to the applicable Borrower.

(e)Interest Payment Reduction. On or after January 1, 2020, the Current Interest Rate shall be reduced by one-quarter percent (0.25%) if the Interest Rate Spread Reduction Conditions are satisfied during the 2019 calendar year. On or after January 1, 2021, the Current Interest Rate shall be reduced by one-quarter percent (0.25%) if the Interest Rate Spread Reduction Conditions are satisfied during the 2020 calendar year. For the avoidance of doubt, if the Interest Rate Spread Reduction Conditions were satisfied during both the 2019 calendar year and the 2020 calendar year, the total reduction in the Current Interest Rate shall be one-half percent (0.50%).
Section 2.3Redemptions and Payments.
(a)Permitted Redemption.
(i)The Borrowers may, at any time after January 1, 2022, at their option, elect to pay to the Agent, on behalf of the Holders, the Permitted Redemption Amount (as defined below), on the Permitted Redemption Date, by redeeming the aggregate unpaid principal amount of all Notes, in whole (and not in part), whereupon the Commitments of each Lender shall automatically and permanently be terminated (the “Permitted Redemption”); provided that, a Permitted Redemption may occur prior to January 1, 2022 only in connection with an M&A Event. The Borrowers may not, at any time, redeem the Notes in part. On or prior to the date which is the thirtieth (30th) calendar day (or, solely with respect to any Permitted Redemption of US Term Notes, the ninetieth (90th) calendar day) prior to the proposed Permitted Redemption Date, the Borrower Representative shall deliver written notice (the “Permitted Redemption Notice”) to the Agent stating (i) that the Borrowers elect to redeem pursuant to the Permitted Redemption and (ii) the proposed Permitted Redemption Date. The “Permitted Redemption Amount” shall be equal to (A) the aggregate unpaid outstanding principal amount of all Notes, (B) all accrued and unpaid interest with respect to such principal
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amount and all accrued and unpaid fees, (C) all accrued and unpaid Late Charges with respect to such Permitted Redemption Amount, (D) the Prepayment Premium and (E) all other amounts due under the Transaction Documents. The Credit Parties acknowledge and agree that the Prepayment Premium represents bargained for consideration in exchange for the right and privilege to redeem the Notes.
(ii)A Permitted Redemption Notice delivered pursuant to this subsection shall be irrevocable; provided that such Permitted Redemption Notice may be revoked if for any reason the applicable M&A Event covered by such Permitted Redemption Notice is terminated prior to closing. If the Borrower Representative, on behalf of the Borrowers, elects to redeem the Notes pursuant to a Permitted Redemption under Section 2.3(a), then the Permitted Redemption Amount which is to be paid to the Agent, on behalf of the Holders, on the Permitted Redemption Date shall be redeemed by the Borrowers on the Permitted Redemption Date, and the Borrowers shall pay to the Agent, on behalf of the Holders, on the Permitted Redemption Date, by wire transfer of immediately available funds, an amount in cash equal to the Permitted Redemption Amount. Such Permitted Redemption Amount shall be applied, first, on a pro rata basis with respect to the outstanding US Term Notes and UK Term Notes, and second, to the outstanding Fourth Tranche US Last Out Term Notes.
(iii)Notwithstanding the foregoing and anything to the contrary herein, (A) if a Federal or Multi-State Force Majeure Event or UK Force Majeure Event shall have occurred or (B) if the Lenders shall fail to fund more than one additional draw under the Notes requested by the Borrower Representative, on behalf of the Borrowers, after the Fifth Restatement Closing Date in accordance with Section 2.1 and provided that all conditions of such funding set forth in Section 5.2 shall have been satisfied at the time thereof (a “Qualified Funding Failure”), then the Borrower Representative, on behalf of the Borrowers, shall have the right, exercisable upon at least sixty (60) calendar days’ prior written notice to the Agent, to consummate a Permitted Redemption (provided, that in the case of the foregoing clause (B), such Permitted Redemption shall apply solely to the applicable tranche of Notes (i.e., US Term Notes, UK Term Notes or Fourth Tranche US Last Out Term Notes) for which such Qualified Funding Failure occurred) at a price equal to the Permitted Redemption Amount excluding the Prepayment Premium, which Permitted Redemption shall otherwise be made in accordance with the provisions of Section 2.3(a)(i) hereof; provided, that such right to consummate a Permitted Redemption at a price equal to the Permitted Redemption Amount excluding the Prepayment Premium shall expire (x) in the case of the foregoing clause (A), upon the cessation of such Federal or Multi-State Force Majeure Event or UK Force Majeure Event or (y) in the case of the foregoing clause (B), upon written notice from the Agent to the Borrower Representative, given no later than ten (10) calendar days after the Agent’s receipt of the Borrower Representative’s notice of redemption under the foregoing Section 2.3(a)(iii)(B) stating that the Lenders are thereafter willing and able to fund additional draws under the Notes of the applicable tranche requested by the Borrower Representative, on behalf of the Borrowers, in accordance with Section 2.1 and provided that all conditions of such fundings set forth in Section 5.2 shall have been satisfied at the time thereof; provided
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further, that, in the case of a Permitted Redemption in respect of the foregoing clause (A), if such Federal or Multi-State Force Majeure Event or UK Force Majeure Event ceases within the earlier of (i) one (1) year following such Permitted Redemption or (ii) July 1, 2021, the Credit Parties shall give the Agent and Lenders the right to participate in any new Program or substantially similar program to the Program. For purposes of clarification, prior to the expiration of the ten (10) calendar day (or longer, as the case may be) notice of purchase pursuant to the foregoing Section 2.3(a)(iii)(B), the Agent may deliver notice to the Borrower Representative that the Lenders are willing and able to fund such draws under the Notes and provided that all conditions of such fundings set forth in Section 5.2 shall have been satisfied at the time thereof, whereupon such right to consummate a Permitted Redemption at a price equal to the Permitted Redemption Amount excluding the Prepayment Premium shall automatically terminate, but the Borrower Representative, on behalf of the Borrowers, shall at all times thereafter retain the right to consummate a Permitted Redemption at a price equal to the Permitted Redemption Amount including the Prepayment Premium (if applicable), which Permitted Redemption shall otherwise be made in accordance with the provisions of Section 2.3(a)(i) hereof. The provisions of this Section 2.3(a)(iii) set forth the exclusive rights and remedies of the Credit Parties to seek or obtain damages or any other remedy or relief from the Agent or any Lender with respect to any Qualified Funding Failure.
(b)Mandatory Prepayments.
(i)On the date of receipt by any Credit Party or any of their Subsidiaries of any net cash proceeds in excess of $200,000 in the aggregate during any Fiscal Year from any Asset Sales (other than Permitted Dispositions), the Borrowers shall prepay the Notes as set forth in Section 2.3(e) in an aggregate amount equal to 100% of such net cash proceeds.
(ii)On the date of receipt by any Credit Party or any of their Subsidiaries, or the Agent as loss payee, of any net cash proceeds from any Destruction or Taking, the Borrowers shall prepay the Notes as set forth in Section 2.3(e) in an aggregate amount equal to 100% of such net cash proceeds; provided, so long as no Event of Default (or event or circumstance that, with the passage of time, the giving of notice, or both, would become an Event of Default) shall have occurred and be continuing on the date of receipt thereof or caused thereby, the Borrowers shall have the option to apply such net cash proceeds, prior to the date that is 90 days following receipt thereof, for purposes of the repair, restoration or replacement of the applicable assets thereof.
(iii)On the date of receipt by any Credit Party or any of their Subsidiaries of any net cash proceeds in excess of $5,000,000 in the aggregate during the term of this Agreement from a capital contribution by any Person (other than a Subsidiary of Elevate Credit Parent) to, or the issuance to any Person (other than a Credit Party or a Subsidiary of a Credit Party) of any Equity Interests of any Credit Party or any of their Subsidiaries, including, without limitation, in connection with a Public Offering, the Borrowers shall
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prepay the Notes as set forth in Section 2.3(e) in an aggregate amount equal to 100% of such net cash proceeds, but subject to the provisions of Section 2.3(d).
(iv)On the date of receipt by any Credit Party or any of their Subsidiaries of any net cash proceeds from the incurrence of any Indebtedness of any Credit Party or any of their Subsidiaries (other than with respect to Permitted Indebtedness), the Borrowers shall prepay the Notes as set forth in Section 2.3(e) in an aggregate amount equal to 100% of such net cash proceeds.
(v)On the date of receipt by any Credit Party or any of their Subsidiaries of any Extraordinary Receipts, the Borrowers shall prepay the Notes as set forth in Section 2.3(e) in an aggregate amount equal to 100% of such Extraordinary Receipts.
(vi)If at any time the then outstanding principal balance of (A) the US Term Notes shall exceed the Maximum US Term Note Balance, (B) the UK Term Notes shall exceed the Maximum UK Term Note Balance, or (C) the First Out Notes shall exceed the Maximum First Out Note Balance, then in each case the applicable Borrower or Borrowers shall immediately prepay the applicable Notes as set forth in Section 2.3(e) in an amount sufficient to eliminate such excess.
(vii)Concurrently with any prepayment of the applicable Notes pursuant to this Section 2.3(b), the Borrower Representative, on behalf of the Borrowers, shall deliver to the Agent a certificate of an authorized officer thereof demonstrating the calculation of the amount of the applicable proceeds. In the event that the Credit Parties shall subsequently determine that the actual amount of such proceeds exceeded the amount set forth in such certificate (including as a result of the conversion of non-cash proceeds into cash), the applicable Borrower(s) shall promptly make an additional prepayment of all the Notes in an amount equal to such excess (or applicable percentage thereof), and the Borrower Representative, on behalf of the Borrowers, shall concurrently therewith deliver to the Agent a certificate of an authorized officer thereof demonstrating the derivation of such excess.
(c)Optional Reborrowing. Subject to the satisfaction of the Revolving Conditions, (i) the US Term Note Borrowers may, at their option once per year on an Optional Revolving Date, elect to pay to the Agent, on behalf of the applicable Lenders and Holders, the Revolving Amount (as defined below) with respect to the US Term Notes and (ii) the UK Term Note Borrower may, at its option once per year on an Optional Revolving Date, elect to pay to the Agent, on behalf of the applicable Lenders and Holders, the Revolving Amount (as defined below) with respect to the UK Term Notes (each of the foregoing, an “Optional Reborrowing”). The “Revolving Amount” shall be equal to (x) in the case of an Optional Reborrowing with respect to US Term Notes, (A) up to twenty percent (20%) of the aggregate unpaid outstanding principal amount of all US Term Notes, (B) all accrued and unpaid interest with respect to such principal amount repaid and all accrued and unpaid fees and (C) all accrued and unpaid Late Charges with respect to such Revolving Amount and (y) in the case of an Optional Reborrowing with respect to UK Term Notes, (A) up to twenty percent (20%) of the aggregate unpaid outstanding principal amount of all UK Term Notes, (B) all accrued and unpaid
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interest with respect to such principal amount repaid and all accrued and unpaid fees and (C) all accrued and unpaid Late Charges with respect to such Revolving Amount. On or prior to the date which is the sixtieth (60th) calendar day prior to the proposed Optional Revolving Date, the Borrower Representative shall deliver written notice to the Agent stating (i) that the applicable Borrowers elect to make a payment in connection with an Optional Reborrowing and (ii) the proposed Revolving Amount. The Commitments of each Lender shall not automatically and permanently be terminated or decreased as a result of a payment by the applicable Borrowers of any Revolving Amount pursuant to this Section 2.3(c) and the applicable Borrowers may reborrow any Revolving Amount of such Borrowers (but for the avoidance of doubt, not any other Borrowers) in accordance with Section 2.1; provided that reborrowing any such Revolving Amount within one hundred eighty (180) days shall not cause the Current Interest Rate to decrease.
(d)Waiver of Mandatory Prepayments. Anything contained in Section 2.3(b) to the contrary notwithstanding, in the event the Borrowers are required to make any mandatory prepayment (a “Waivable Mandatory Prepayment”) of the Notes, not less than three (3) Business Days prior to the date (the “Required Prepayment Date”) on which the Borrowers are required to make such Waivable Mandatory Prepayment, the Borrower Representative, on behalf of the Borrowers, shall notify the Agent of the amount of such prepayment, and the Agent shall promptly thereafter notify each Holder holding an outstanding Note of the amount of such Holder’s pro rata share of such Waivable Mandatory Prepayment and such Holder’s option to refuse such amount. Each such Holder may exercise such option by giving written notice to the Borrower Representative and the Agent of its election to do so on or before the first Business Day prior to the Required Prepayment Date (it being understood that any Holder which does not notify the Borrower Representative and the Agent of its election to exercise such option on or before the first Business Day prior to the Required Prepayment Date shall be deemed to have elected, as of such date, not to exercise such option). On the Required Prepayment Date, the Borrower Representative shall pay to the Agent the amount of the Waivable Mandatory Prepayment, which amount shall be applied in an amount equal to that portion of the Waivable Mandatory Prepayment payable to those Holders that have elected not to exercise such option, to prepay the Notes of such Holders.
(e)Application of Mandatory Prepayments; Prepayment Premium. All mandatory prepayments made pursuant to Section 2.3(b) and not waived pursuant to Section 2.3(d) shall be made to the Agent, for the account of the Holders, and shall be applied, first, on a pro rata basis with respect to the outstanding US Term Notes and UK Term Notes (or in such other manner in respect of the outstanding US Term Notes and UK Term Notes as shall be determined by the Agent with the consent of the Required US Term Note Lenders (which consent may be in the form of an email to Agent)), and second, to the outstanding Fourth Tranche US Last Out Term Notes; provided, that notwithstanding the foregoing to the contrary, any mandatory prepayment made pursuant to Section 2.3(b)(iii) with the net cash proceeds from a Public Offering shall solely be applied to the outstanding UK Term Notes and Fourth Tranche US Last Out Term Notes in the manner directed by Borrower Representative (or, in the absence of such direction, first to the outstanding UK Term Notes and second, to the outstanding Fourth Tranche US Last Out Term Notes) (for the avoidance of doubt, net cash proceeds from a Public
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Offering required to be applied as mandatory prepayment pursuant to Section 2.3(b)(iii) shall not be applied to the US Term Notes). Concurrently with each mandatory prepayment made pursuant to (i) Section 2.3(b) (other than in accordance with Section 2.3(b)(vi)), the US Term Note Commitment (in the case of a mandatory prepayment applied to the US Term Notes), the UK Term Note Commitment (in the case of a mandatory prepayment applied to the UK Term Notes) and the Fourth Tranche US Last Out Term Note Commitment (in the case of a mandatory prepayment applied to the Fourth Tranche US Last Out Term Notes), as applicable, of each Lender shall, at the election of Agent to be given to Borrower Representative within five (5) Business Days after receipt of such mandatory prepayment (or automatically upon the occurrence of any Event of Default described in Section 10.1(c) or Section 10.1(d)), permanently be reduced by the amount of such prepayment and (ii) Section 2.3(b) (other than in accordance with Sections 2.3(b)(ii), 2.3(b)(v), 2.3(b)(vi) or 2.3(b)(vii) (solely to the extent such excess required to be applied as a prepayment relates to a prepayment under Sections 2.3(b)(ii), 2.3(b)(v) or 2.3(b)(vi))), the Borrowers shall also pay to the Agent, for the ratable benefit of the applicable Holders, the Prepayment Premium in respect of the Notes repaid or redeemed in connection with such mandatory prepayment.
Section 2.4Payments. Whenever any payment of cash is to be made by any Credit Party to any Person pursuant to this Agreement, the Notes or other Transaction Document, such payment shall be made in lawful money of the United States of America (provided, that payments of cash made in respect of the UK Term Notes (GBP) shall be made in lawful money of the United Kingdom) by a check drawn on the account or accounts of such Credit Party and sent via overnight courier service to such Person at such address as previously provided to the Borrower Representative in writing (which address, in the case of each of the Lenders, shall initially be as set forth on the Schedule of Lenders attached hereto); provided that (i) the Agent, any Holder or any Lender may elect to receive a payment of cash via wire transfer of immediately available funds by providing the Borrower Representative with prior written notice setting out such request and the Agent’s, such Holder’s or such Lender’s wire transfer instructions and (ii) Credit Parties may elect to make a payment of cash via wire transfer of immediately available funds in accordance with wire transfer instructions provided by the Agent, each Holder and each Lender upon request therefor. Whenever any amount expressed to be due by the terms of this Agreement or any Note is due on any day which is not a Business Day, the same shall instead be due on the next succeeding day which is a Business Day and, in the case of any Interest Date which is not the date on which the applicable Note is paid in full in cash, the extension of the due date thereof shall not be taken into account for purposes of determining the amount of interest due on such date. Any amount due under the Transaction Documents (other than principal and interest, if the same are already accruing interest at the Default Rate), which is not paid when due shall result in a late charge being incurred and payable by the Borrowers in an amount equal to accrued interest at the Default Rate from the date such amount was due until the same is paid in full in cash (“Late Charge”). Such Late Charge shall continue to accrue post-petition in any proceeding under any Bankruptcy Law.
Section 2.5Dispute Resolution. Except as otherwise provided herein, in the case of a dispute as to the determination of any amounts due and owing pursuant to a redemption under Section 2.3 or otherwise or any other similar or related amount, the Borrower Representative, on
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behalf of the Borrowers, shall submit the disputed determinations or arithmetic calculations via facsimile within three (3) Business Days of receipt, or deemed receipt, of the applicable notice of dispute to the Agent. If the Agent and the Borrower Representative are unable to agree upon such determination or calculation within three (3) Business Days of such disputed determination or arithmetic calculation being submitted to the Agent, then the Borrower Representative shall, within three (3) Business Days submit via facsimile the disputed determinations or arithmetic calculations to an independent outside national accounting firm specified by Agent. The Borrower Representative, at the Borrowers’ expense, shall cause the accountant to perform the determinations or calculations and notify the Agent of the results no later than five (5) Business Days from the time it receives the disputed determinations or calculations. Such accountant’s determination or calculation, as the case may be, shall be binding upon all parties absent demonstrable error.
Section 2.6Taxes.
(a)Notwithstanding anything to the contrary in this Agreement or any other Transaction Document:
(i)all payments made by or on behalf of the Credit Parties under this Agreement or any other Transaction Document shall be made by such parties without any withholding or deduction for or on account of any Taxes imposed by the United Kingdom (“UK Tax Deduction”), unless such UK Tax Deduction is required by law;
(ii)if a UK Tax Deduction is required by law:
A.the applicable Credit Party shall promptly upon becoming aware that it must make a UK Tax Deduction (or that there is any change in the rate or the basis of the UK Tax Deduction) notify the Agent, Holder or Lender accordingly;
B.the amount of the payment due from such Credit Party shall be increased to an amount which (after making any UK Tax Deduction) leaves an amount equal to the payment which would have been due if no UK Tax Deduction had been required;
C.such Credit Party shall make such UK Tax Deduction and any payment required in connection with such UK Tax Deduction within the time allowed and in the minimum amount required by law; and
D.within thirty (30) days of making either a UK Tax Deduction or any payment required in connection with such UK Tax Deduction, such Credit Party shall deliver to the Agent, Holder or Lender evidence reasonably satisfactory to the Agent, Holder or Lender, as applicable, that such UK Tax Deduction has been made or (as applicable) any appropriate payment has been paid to the relevant taxing authority.
(b)Without prejudice to Section 2.6(a), any and all payments by or on behalf of the Credit Parties hereunder and under any other Transaction Document shall be made free and clear of and without deduction or withholding for any and all current or future Taxes, levies, imposts, deductions or charges unless required by law. If any Non-Excluded Taxes are required by law to be deducted or withheld from or in respect of any payment or sum payable hereunder or under any Transaction Document by any Withholding Agent to the Agent, any Holder or any
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Lender, (x) the applicable Withholding Agent shall make such deductions and withholdings within the time allowed and in the minimum amount required by law, (y) the sum payable by the applicable Credit Party shall be increased by the amount (an “Additional Amount”) necessary so that, after making all required deductions and withholdings (including deductions and withholdings applicable to additional sums payable under this Section 2.6(b)) the Agent, such Holder or such Lender, as applicable, shall receive an amount equal to the sum it would have received had no such deductions or withholdings been made and (z) the Withholding Agent shall pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable law and shall promptly provide to the Agent, Holder or Lender, as applicable, an evidence of such payment to the relevant Governmental Authority (in a form reasonably satisfactory to the Agent, Holder or Lender, as applicable).
(c)The Borrowers will pay to the relevant Governmental Authority in accordance with applicable law any current or future stamp, stamp duty, registration, court, documentary, intangible, recording, filing or similar Taxes or any other excise or property taxes, charges or similar levies that arise from any payment made hereunder or under any Transaction Document, or from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, this Agreement or any Transaction Document that are or would be applicable to the Holders, the Agent, or a Lender (“Other Taxes”).
(d)The Credit Parties agree to indemnify the Agent, each Holder, each Lender and their respective Affiliates for the full amount of Non-Excluded Taxes and Other Taxes paid by the Agent, such Holder, such Lender or such Affiliates and any liability (including penalties, interest and expenses (including reasonable attorney’s and other advisors’ fees and expenses)) arising therefrom or with respect thereto, whether or not such Non-Excluded Taxes or Other Taxes were correctly or legally asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability prepared by the Agent, such Holder, such Lender or such Affiliate, absent manifest error, shall be final conclusive and binding for all purposes. Such indemnification shall be made within thirty (30) days after the date the Agent, such Holder, such Lender or such Affiliate makes written demand therefor. Agent, a Lender, a Holder or any of their respective Affiliates shall notify the Borrower Representative in writing of the receipt by such Person of any written notice from any taxing authority demanding, or threatening to demand, any Tax indemnifiable by the Borrowers under this Section 2.6(d), within a reasonable period of time after receipt of such notice.
(e)On the Original Closing Date, and subsequently on or prior to the date on which a Lender or Holder became or becomes a Lender or Holder under this Agreement with respect to the applicable Borrower(s) (and from time to time thereafter upon the reasonable request of the applicable Borrower(s) or the Agent), each applicable Lender and Holder has delivered or shall deliver to the Borrower Representative a completed and signed IRS Form W-8 or IRS Form W-9 (or any successor form), as applicable. In the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate substantially in the form attached hereto as Exhibit I to the effect that such Foreign Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent
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shareholder” of the applicable Borrower(s) within the meaning of Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code (a “US Tax Compliance Certificate”).
(f)The parties hereto agree to treat and report amounts lent under this Agreement and any amount due under the Notes as debt for U.S. federal, state and local income tax purposes. The Credit Parties agree to indemnify the Agent, each Holder, each Lender and their respective Affiliates for the full amount of Taxes and Other Taxes paid by the Agent, such Holder, such Lender or such Affiliates and any liability (including penalties, interest and expenses (including reasonably attorney’s and other advisors’ fees and expenses)) arising therefrom or with respect thereto, whether or not such Taxes and Other Taxes were correctly or legally asserted by the relevant Governmental Authority, to the extent such Taxes or Other Taxes are imposed as a result of the treatment of any amounts lent under this Agreement or any amount due under the Notes as other than debt by any Governmental Authority.
(g)Survival. Notwithstanding anything to the contrary herein, each party’s obligations under this Section 2.6 and Section 13.12 shall survive the resignation, removal or replacement of the Agent or any assignment of rights by, or the replacement of, a Lender or Holder, the termination of the Commitments and the repayment, satisfaction or discharge of all obligations under any Transaction Document.
Section 2.7Reissuance.
(a)Transfer. If any Note is to be transferred, the Holder thereof shall surrender such Note to the Borrower Representative, whereupon the applicable Borrower will forthwith issue and deliver upon the order of such Holder a new Note (in accordance with this Section 2.7), registered as such Holder may request (provided that electronic registration is acceptable), representing the outstanding principal being transferred by such Holder and, if less than the entire outstanding principal amount is being transferred, a new Note (in accordance with this Section 2.7) to such Holder representing the outstanding principal not being transferred.
(b)Lost, Stolen or Mutilated Note. Upon receipt by the Borrower Representative of evidence reasonably satisfactory to the Borrower Representative of the loss, theft, destruction or mutilation of any Note and (i) in the case of loss, theft or destruction, upon delivery of an indemnity agreement reasonably satisfactory to the Borrower Representative (provided, however, that if the Holder is an institutional investor, the affidavit of an authorized partner or officer of such Holder setting forth the circumstances with respect to such loss, theft or destruction shall be accepted as satisfactory evidence thereof and no indemnity agreement or other security shall be required), and (ii) in the case of mutilation, upon surrender and cancellation of the mutilated Note, the applicable Borrower shall execute and deliver to such Holder a new Note (in accordance with this Section 2.7) representing the outstanding principal.
(c)Note Exchangeable for Different Denominations. The Notes are exchangeable, upon the surrender thereof by the Holder at the principal office of the applicable Borrower, for a new Note or Notes (in accordance with this Section 2.7) of like tenor in principal amounts of at least $100,000 representing in the aggregate the outstanding principal of the
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surrendered Note, and each such new Note will represent such portion of such outstanding principal as is designated by such Holder or such Lender at the time of such surrender.
(d)Issuance of New Notes. Whenever a Borrower is required to issue a new Note pursuant to the terms of this Agreement or the Notes, such new Note (i) shall be of like tenor with the Note being replaced, (ii) shall represent, as indicated on the face of such new Note, the applicable Commitment thereunder then in effect (or, in the case of a new Note being issued pursuant to paragraph (a) or (b) of this Section 2.7, the applicable Commitment designated by the Holder which, when added to the applicable Commitment represented by the other new Notes issued in connection with such issuance, equals the aggregate applicable Commitment under the Note being replaced immediately prior to such issuance of new Notes), (iii) shall have an Issuance Date, as indicated on the face of such new Note, which is the same as the Issuance Date of the Note being replaced, (iv) shall have the same rights and conditions as the Note being replaced, and (v) shall represent accrued interest on the principal, Prepayment Premium, and Late Charges of the Note being replaced from such Issuance Date.
Section 2.8Register. The Borrower Representative, on behalf of the Borrowers, shall maintain at its principal executive office (or such other office or agency of the Borrower Representative as it may designate by notice to each holder of Securities), a register for the Notes in which the Borrower Representative shall record the name and address of the Person in whose name the Notes have been issued (including the name and address of each transferee) and the principal amount (and stated interest) of Notes held by such Person (the “Register”). The Borrower Representative shall keep the Register open and available at all times during normal business hours for inspection of any Holder, any Lender or their respective representatives. The Register may be maintained in electronic format.
Section 2.9Maintenance of Register. Notwithstanding anything to the contrary contained herein, the Notes and this Agreement are registered obligations and the right, title, and interest of each Holder, each Lender and their assignees in and to such Notes (or any rights under this Agreement) shall be transferable only upon notation of such transfer in the Register. The Notes shall only evidence a Holder’s, a Lender’s or their assignee’s right, title and interest in and to the related Notes, and in no event is any such Note to be considered a bearer instrument or obligation. This Section 2.9 shall be construed so that the Notes are at all times maintained in “registered form” within the meaning of Sections 163(f), 871(h)(2) and 881(c)(2) of the Code and any related Treasury regulations promulgated thereunder.
Section 2.10Monthly Maintenance Fee. Commencing August 1, 2016, the Borrowers hereby agree to pay to Agent in arrears on the last Business Day of each calendar month, a monthly maintenance fee in the amount of $5,000 (which amount shall be increased to $15,000 commencing with the monthly maintenance fee payment required to be made on the last Business Day of the calendar month in which the Third Restatement Closing Date occurs) (collectively, the “Monthly Maintenance Fees”). The Borrowers agree that the Monthly Maintenance Fees shall be fully-earned when paid and shall not be refundable in whole or in part under any circumstances.
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Article 3
FIFTH RESTATEMENT CLOSING

Section 3.1Fifth Restatement Closing. In consideration for each applicable Lender’s commitment to fund its pro rata share of draws under the US Term Notes (as defined in the Fourth Amended and Restated Financing Agreement) in accordance with the terms of the Fourth Amended and Restated Financing Agreement (which commitment remains in effect hereunder without constituting a novation), certain US Term Note Borrowers previously issued and sold to such Lender a US Term Note in the aggregate principal amount of the US Term Note Commitment (as defined in the Fourth Amended and Restated Financing Agreement) of such Lender. In consideration for each applicable Lender’s commitment to fund its pro rata share of draws under the US Term Notes in accordance with the terms hereof, the US Term Note Borrowers shall (a) issue and sell to each Lender on the Fifth Restatement Closing Date, and each applicable Lender severally, but not jointly, agrees to purchase from the US Term Note Borrowers on the Fifth Restatement Closing Date, a new or replacement US Term Note in the aggregate principal amount of the US Term Note Commitment of such Lender and (b) in the case of a Lender with an existing US Term Note Commitment, reaffirm their joint and several obligations under the US Term Notes in the aggregate principal amount of the US Term Note Commitment of such Lender previously issued and sold to such Lender. In consideration for each applicable Lender’s commitment to fund its pro rata share of draws under the UK Term Notes in accordance with the terms of the Second Amended and Restated Financing Agreement (which commitment remains in effect hereunder without constituting a novation), the UK Borrower previously issued and sold to such Lender a UK Term Note in the aggregate principal amount of the UK Term Note Commitment of such Lender. In consideration for each applicable Lender’s commitment to fund its pro rata share of draws under the UK Term Notes in accordance with the terms hereof, the UK Borrower shall (a) issue and sell to each applicable Lender on the Fifth Restatement Closing Date, and each applicable Lender severally, but not jointly, agrees to purchase from the UK Borrower on the Fifth Restatement Closing Date, a new or replacement UK Term Notes in the aggregate principal amount of the applicable UK Term Note Commitments of such Lender and (b) in the case of a Lender with an existing UK Term Note Commitment, reaffirm their joint and several obligations under the applicable UK Term Notes in the aggregate principal amount of the UK Term Note Commitment of such Lender previously issued and sold to such Lender. In consideration for each applicable Lender’s commitment to purchase its pro rata share of the Fourth Tranche US Last Out Term Notes, the US Last Out Term Note Borrower previously issued and sold to such Lender a Fourth Tranche US Last Out Term Note in the aggregate principal amount of the Fourth Tranche US Last Out Term Note Commitment of such Lender. The closing (the “Fifth Restatement Closing”) of the transactions contemplated by this Agreement and the issuance of the additional US Term Notes by the US Term Note Borrowers shall occur at the offices of Katten Muchin Rosenman LLP, 525 West Monroe Street, Suite 1900, Chicago, Illinois 60661. The date and time of the Fifth Restatement Closing (the “Fifth Restatement Closing Date”) shall be 10:00 a.m., Chicago time, on the date hereof, subject to notification of satisfaction (or waiver) of the conditions to the Fifth Restatement Closing set forth in Section 5.1 below (or such later date as is mutually agreed to by the Borrower Representative and each Lender). On the Fifth Restatement Closing Date, the
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Borrowers shall deliver to each applicable Lender the applicable Notes (in the denominations as such Lender shall have requested prior to the Fifth Restatement Closing) which such Lender is then purchasing, duly executed on behalf of the applicable Borrowers and registered in the name of such Lender or its designee.

Article 4
INTENTIONALLY OMITTED

Article 5
CONDITIONS TO FIFTH RESTATEMENT CLOSING AND EACH LENDER’S OBLIGATION TO PURCHASE

Section 5.1Fifth Restatement Closing. The obligation of the Agent and the Lenders to close the transactions contemplated by this Agreement is subject to the satisfaction, at or before the Fifth Restatement Closing Date, of each of the following conditions:
(a)(i)    Reserved;
    (ii)    the US Term Note Borrowers shall have executed and delivered to each applicable Lender the US Term Notes (in such denominations as such Lender shall have requested prior to the Fifth Restatement Closing) being issued to such Lender at the Fifth Restatement Closing pursuant to this Agreement and the UK Borrower shall have executed and delivered to each applicable Lender the applicable UK Term Notes (in such denominations as such Lender shall have requested prior to the Fifth Restatement Closing) being issued to such Lender at the Fifth Restatement Closing pursuant to this Agreement; and
    (iii)    the Credit Parties shall have executed and delivered to the Agent each of the other Transaction Documents to which it is a party.
(b)The Borrowers shall have executed and delivered, or caused to be delivered, to the Agent evidence satisfactory to the Agent that the Borrowers shall pay to the Agent on the Fifth Restatement Closing Date all fees and other amounts due and owing thereon under this Agreement and the other Transaction Documents.
(c)Reserved.
(d)The Credit Parties shall have executed and/or delivered, or caused to be delivered, to the Agent, without duplication, the deliveries set forth in the Index of Fifth Restatement Closing Documents attached hereto as Exhibit H.
(e)Each Credit Party shall have executed and delivered, or caused to be delivered, to the Agent:
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(i)a certificate evidencing its organization, formation, or incorporation (as applicable) and good standing in its jurisdiction of organization issued by the Secretary of State of such jurisdiction, as of a date reasonably proximate to the Fifth Restatement Closing Date;
(ii)a certificate evidencing its qualification as a foreign corporation, limited liability company or other entity (as applicable) and good standing issued by the Secretary of State (or comparable office) of each jurisdiction in which such Person is qualified to conduct business and failure to so qualify would cause a Material Adverse Effect, as of a date reasonably proximate to Fifth Restatement Closing Date;
(iii)a certificate as to the fact that no action has been taken with respect to any merger, consolidation, liquidation or dissolution of such Person, or with respect to the sale of substantially all of its assets, nor is any such action pending or contemplated; and
(iv)a certificate, executed by the secretary (or other authorized officer) of such Person and dated the Fifth Restatement Closing Date, as to (A) the resolutions consistent with Section 7.2 as adopted by such Person’s board of directors (or similar governing body) in a form reasonably acceptable to the Agent, (B) such Person’s certificate of incorporation (or similar document), each as in effect at the Fifth Restatement Closing, (C) such Person’s bylaws (or similar document), each as in effect at the Fifth Restatement Closing, and (D) no action having been taken by such Person or its stockholders, members, directors or officers (as applicable) in contemplation of any amendments to items (A), (B), or (C) listed in this Section 5.1(e)(iv), as certified in the form attached hereto as Exhibit C.
(f)The Borrowers shall have obtained and delivered to Agent:
(i)the opinions of Outside Legal Counsel, dated the Fifth Restatement Closing Date;
(ii)all governmental, regulatory and third party consents, approvals and notifications, if any, necessary for the closing of the transactions contemplated by this Agreement and the issuance of the Securities to be issued at the Fifth Restatement Closing;
(iii)if requested by the Agent, updated Lien searches in the jurisdictions of organization of each Credit Party, the jurisdiction of the chief executive offices of each Credit Party and each jurisdiction where a filing would need to be made in order to perfect the Agent’s and Holders’ security interest in the Collateral, copies of the financing statements on file in such jurisdictions and evidence that no Liens exist other than Permitted Liens;
(iv)such information in form, scope and substance reasonably satisfactory to the Agent regarding environmental matters relating to all real property owned, leased, operated or used by the Credit Parties as of the Fifth Restatement Closing Date;
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(v)a certificate from the chief financial officer of the Borrowers (or other authorized executive officer performing a similar function) in form and substance satisfactory to the Agent, supporting the conclusions that, after giving effect to the transactions contemplated by the Transaction Documents, the Credit Parties taken as a whole are not Insolvent; and
(vi)if requested by the Agent, updated certificates from the Borrowers’ insurance broker or other evidence satisfactory to it that all insurance required to be maintained pursuant to this Agreement is in full force and effect, together with endorsements naming the Agent, for the benefit of the Holders, as additional insured and lender’s loss payee thereunder, as applicable.
(g)Each Credit Party shall have authorized the filing of UCC financing statements for each appropriate jurisdiction as is necessary, in the Agent’s sole discretion, to perfect the Agent’s security interest in the Collateral and, if applicable, the filing of the Intellectual Property Security Agreements in the U.S. Patent and Trademark Office and the U.S. Copyright Office, as applicable.
(h)The Borrowers shall have caused to be executed and delivered, to the Agent such landlord waivers, collateral access agreements or other similar documents as the Agent may reasonably request.
(i)The representations and warranties of the Credit Parties shall be true and correct in all material respects (without duplication of any materiality qualifiers) as of the date when made and as of the Fifth Restatement Closing Date as though made at that time (except for representations and warranties that speak as of a specific date, which shall be true and correct in all material respects (without duplication of any materiality qualifiers) as of such specific date), and the Credit Parties shall have performed, satisfied and complied in all respects with the covenants, agreements and conditions required by the Transaction Documents to be performed, satisfied or complied with by the Credit Parties at or prior to the Fifth Restatement Closing Date. The Agent shall have received a certificate, executed by the chief executive officer of the Borrower Representative (or other authorized executive officer performing a similar function), dated the Fifth Restatement Closing Date, to the foregoing effect and as to such other matters as may be reasonably requested by the Agent, in the form attached hereto as Exhibit D.
(j)No Event of Default (or event or circumstance that, with the passage of time, the giving of notice, or both, would become an Event of Default) shall have occurred and be continuing or would result from the closing of the transactions contemplated by this Agreement or issuance of the Securities to be issued at the Fifth Restatement Closing.
(k)The Credit Parties shall have paid or reimbursed the Agent and the Lenders for all costs and expenses required to be paid or reimbursed by them on the Fifth Restatement Closing Date in accordance with Section 8.22 hereof.
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Section 5.2Subsequent Draws. The obligation of each Lender hereunder to fund any draw under the Notes subsequent to the Fifth Restatement Closing Date is subject to the satisfaction, at the funding date thereof, of each of the following conditions:
(a)Each representation and warranty by any Credit Party contained herein and in each other Transaction Document shall be true and correct in all material respects (without duplication of any materiality qualifiers) as of such date (subject to such updates to the Schedules, if any, as are approved by the Agent in its reasonable discretion), except to the extent that such representation or warranty expressly relates to an earlier date, including the Fifth Restatement Closing Date (in which event such representations and warranties shall be true and correct in all material respects (without duplication of any materiality qualifiers) as of such earlier date).
(b)No Event of Default or event or circumstance which, with the giving of notice, the lapse of time, or both, would (if not cured or otherwise remedied during such time) constitute an Event of Default shall have occurred and be continuing or would result after giving effect to such draw.
(c)After giving effect to such draw or issuance, as applicable, (i) the aggregate outstanding principal amount of the First Out Notes would not exceed the Maximum First Out Note Balance, (ii) with respect to a draw under the US Term Notes, the aggregate outstanding principal amount of the US Term Notes would not exceed the Maximum US Term Note Balance, (iii) with respect to a draw under the UK Term Notes, the aggregate outstanding principal amount of the UK Term Notes would not exceed the Maximum UK Term Note Balance and (iv) with respect to a draw under the Fourth Tranche US Last Out Term Notes, the aggregate outstanding principal amount of the Fourth Tranche US Last Out Term Notes would not exceed the Maximum Fourth Tranche US Last Out Term Note Commitment.
(d)The funding date shall be a Permitted Draw Date.
(e)After giving effect to such draw, the Debt-to-Equity Ratio of each Borrower shall not be more than 9-to-1.
(f)The Credit Parties shall have paid or reimbursed the Agent and the Lenders and Holders for all costs and expenses required to be paid or reimbursed by them on the Permitted Draw Date in accordance with Section 8.22 hereof.
(g)Except in connection with a draw under the Fourth Tranche US Last Out Term Notes, the Credit Parties shall have delivered a Borrowing Base Certificate, certified on behalf of the Borrowers by the chief financial officer of the Borrower Representative (or other authorized executive officer performing a similar function), setting forth the Borrowing Base of the Borrowers as of a date no earlier than the end of the most recently ended fiscal month and no later than the day immediately preceding the funding date.
The request by the Borrower Representative and acceptance by the Borrowers of the proceeds of any additional draw under the Notes made after the Fifth Restatement Closing Date shall be
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deemed to constitute, as of the date thereof, (i) a representation and warranty by the Borrowers that the conditions in this Section 5.2 have been satisfied and (ii) a reaffirmation by each Credit Party of the granting and continuance of Agent’s Liens, on behalf of the Lenders and the Holders, pursuant to the Transaction Documents.
Article 6
RESERVED

Article 7
CREDIT PARTIES’ REPRESENTATIONS AND WARRANTIES

As an inducement to the Agent and the Lenders to enter into this Agreement and to consummate the transactions contemplated hereby, each of the Credit Parties jointly and severally represents and warrants to each of the Agent and the Lenders that each and all of the following representations and warranties (as supplemented by the disclosure schedules delivered to the Agent and the Lenders contemporaneously with the execution and delivery of this Agreement (the “Schedules”)) are true and correct as of the Fifth Restatement Closing Date. The Schedules shall be arranged by the Borrowers in paragraphs corresponding to the sections and subsections contained in this ARTICLE 7.
Section 7.1Organization and Qualification. Each Credit Party and each of its respective Subsidiaries (which, for purposes of this Agreement, means any entity in which any Credit Party, directly or indirectly, owns at least 50% of the Capital Stock or other Equity Interests or a subsidiary undertaking within the meaning of Section 1162 of the Companies Act 2006) (“Subsidiaries”) are entities duly incorporated or organized and validly existing in good standing under the laws of the jurisdiction in which they are formed or incorporated, and have the requisite corporate or limited liability company power and authorization, as applicable, to own their properties, carry on their business as now being conducted, enter into the Transaction Documents to which they are party and carry out the transactions contemplated thereby. Each Credit Party and each of its Subsidiaries is duly qualified as a foreign entity to do business and is in good standing in every jurisdiction in which its ownership of property or the nature of the business conducted by it makes such qualification necessary, except to the extent that the failure to be so qualified or be in good standing would not have, either individually or in the aggregate, a Material Adverse Effect. Except as set forth on Schedule 7.1, (i) no Credit Party has any Subsidiaries and (ii) all Capital Stock or other equity or similar interests of the Subsidiaries is directly or indirectly owned by a Credit Party, as set forth therein. In respect of each UK Credit Party, and for the purposes of The Council of the European Union Regulation No. 1346/2000 on Insolvency Proceedings, its centre of main interest (as that term is used in Article 3(1) of such regulation) is situated in England and Wales and it has no “establishment” (as that term is used in Article 2(h) of such regulation) in any other jurisdiction.
Section 7.2Authorization; Enforcement; Validity. Each of the Credit Parties has the requisite power and authority to enter into and perform its obligations under this Agreement, the Notes, the Security Agreement, each of the other Security Documents, the Intercompany
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Subordination Agreement, the Intercreditor Agreement, the Release Agreement and each of the other agreements, documents and certificates entered into by the parties hereto in connection with the transactions contemplated by this Agreement (collectively, the “Transaction Documents”) and to issue the Securities in accordance with the terms hereof and thereof. The execution and delivery of the Transaction Documents by the Credit Parties have been duly authorized by each of the Credit Parties’ respective board of directors (or other governing body) and the consummation by the Credit Parties of the transactions contemplated hereby and thereby, including, without limitation, the issuance of the Securities by the Borrowers have been duly authorized by the respective Credit Party’s board of directors (or other governing body), and (other than filings with “Blue Sky” authorities as required therein) no further filing, consent, or authorization is required by any Credit Party, its board of directors (or other governing body) or its stockholders or any parties in a similar capacity. This Agreement and the other Transaction Documents have been duly executed and delivered by each of the Credit Parties thereto, and constitute the legal, valid and binding obligations of each of the Credit Parties party thereto, enforceable against each of such Credit Parties in accordance with their respective terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies.
Section 7.3Issuance of Securities. The Securities are duly authorized and, upon issuance in accordance with the terms hereof, shall be validly issued and free from all Taxes, liens and charges with respect to the issue thereof.
Section 7.4No Conflicts. Neither the execution, delivery and performance of the Transaction Documents by the Credit Parties party thereto, nor the consummation by the Credit Parties of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Securities) will (i) result in a violation of any Credit Party’s or any Subsidiary’s certificate of incorporation, certificate of formation, bylaws, limited liability company agreement or other governing or constitutional documents, or the terms of any Capital Stock or other Equity Interests of any Credit Party or any of their Subsidiaries; (ii) conflict with, or constitute a breach or default (or an event which, with notice or lapse of time or both, would become a breach or default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any Consumer Loan Agreement or any other agreement, indenture or instrument to which any Credit Party or any of their Subsidiaries is a party; (iii) result in any “price reset” or other material change in or other modification to the terms of any Indebtedness, Equity Interests or other securities of any Credit Party or any of their Subsidiaries; or (iv) result in a violation of any law, rule, regulation, order, judgment or decree (including, without limitation, (A) any Environmental Laws, (B) any Requirements or (C) any federal or state securities laws).
Section 7.5Consents. Except as set forth on Schedule 7.5, no Credit Party is required to obtain any consent, authorization, approval, order, license, franchise, permit, certificate or accreditation of, or make any filing or registration with, any court, governmental agency or any regulatory or self-regulatory agency or authority or any other Person in order for it to execute, deliver or perform any of its obligations under or contemplated by the Transaction Documents, in each case in accordance with the terms hereof or thereof (other than filings required by the
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Security Documents). All consents, authorizations, approvals, orders, licenses, franchises, permits, certificates or accreditations of, filings and registrations set forth on Schedule 7.5 have been obtained or effected on or prior to the Fifth Restatement Closing Date.
Section 7.6Subsidiary Rights. Each Credit Party has the unrestricted right to vote, and (subject to limitations imposed by applicable law) to receive dividends and distributions on, all capital and other equity securities of its Subsidiaries as owned by any Credit Party.
Section 7.7Equity Capitalization. As of the Fifth Restatement Closing Date, the authorized Capital Stock and the issued and outstanding Equity Interests of each Credit Party and each Subsidiary of each Credit Party is as set forth on Schedule 7.7. All of such outstanding shares of Capital Stock or other Equity Interests of the Credit Parties and their Subsidiaries have been duly authorized, validly issued and are fully paid and nonassessable and are owned by the Persons and in the amounts set forth on Schedule 7.7. Except as set forth on Schedule 7.7: (i) none of any Credit Party or any Subsidiary’s Capital Stock or other Equity Interest in any other Credit Party or such Subsidiary is subject to preemptive rights or any other similar rights or any liens or encumbrances suffered or permitted by such Credit Party or such Subsidiary; (ii) there are no outstanding options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable for, any Capital Stock or other Equity Interests in any Credit Party or any of their Subsidiaries, or contracts, commitments, understandings or arrangements by which any Credit Party or any of their Subsidiaries is or may become bound to issue additional Capital Stock or other Equity Interests in such Credit Party or such Subsidiary or options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable for, any Capital Stock or other Equity Interests in any Credit Party or any of their Subsidiaries; (iii) there are no outstanding debt securities, notes, credit agreements, credit facilities or other agreements, documents or instruments evidencing Indebtedness of any Credit Party or any of their Subsidiaries or by which any Credit Party or any of their Subsidiaries is or may become bound other than Permitted Indebtedness; (iv) there are no financing statements securing obligations in any material amounts, either singly or in the aggregate, filed in connection with any Credit Party or any of their Subsidiaries; (v) there are no agreements or arrangements under which any Credit Party or any of their Subsidiaries is obligated to register the sale of any of its securities under the 1933 Act; (vi) there are no outstanding securities or instruments of any Credit Party or any of their Subsidiaries which contain any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by which any Credit Party or any of their Subsidiaries is or may become bound to redeem a security of any Credit Party or any of their Subsidiaries; (vii) there are no securities or instruments containing anti-dilution or similar provisions that will be triggered by the closing of the transactions contemplated by this Agreement or the issuance of the Securities; (viii) none of any Credit Party or any of their Subsidiaries has any stock appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement and (ix) none of any Credit Party or any of their Subsidiaries has any liabilities or obligations required to be disclosed in its financial statements (including the footnotes thereto) that are not so disclosed. Prior to the Fifth Restatement Closing, the Borrowers have provided to the Lenders true, correct and complete copies of (i) each Credit Party’s and each of their Subsidiary’s
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certificate of incorporation, certificate of formation (or other applicable governing or constitutional document), as amended and as in effect on the Fifth Restatement Closing Date, and (ii) each Credit Party’s and each of their Subsidiary’s bylaws or limited liability company agreement (or other applicable governing or constitutional document), as applicable, as amended and as in effect on the Fifth Restatement Closing Date. Schedule 7.7 identifies all outstanding securities convertible into, or exercisable or exchangeable for, shares of Capital Stock or other Equity Interests in any Credit Party or any of their Subsidiaries and the material rights of the holders thereof in respect thereto.
Section 7.8Indebtedness and Other Contracts. Except as disclosed on Schedule 7.8, none of any Credit Party or any of their Subsidiaries (i) has any outstanding Indebtedness other than Permitted Indebtedness, (ii) is a party to any contract, agreement or instrument, the violation of which, or default under which, by the other party(ies) to such contract, agreement or instrument could reasonably be expected to result in a Material Adverse Effect, or (iii) is in violation of any term of or in default under any contract, agreement or instrument relating to any Indebtedness or any contract, agreement or instrument entered into in connection therewith that could reasonably be expected to result in, either individually or in the aggregate, a Material Adverse Effect.
Section 7.9Off Balance Sheet Arrangements. There is no transaction, arrangement, or other relationship between any Credit Party or any of their Subsidiaries and an unconsolidated or other off balance sheet entity that would be reasonably likely to have, either individually or in the aggregate, a Material Adverse Effect.
Section 7.10Ranking of Notes. Subject to the relative priorities of the Notes set forth in this Agreement, no Indebtedness of any of the Credit Parties or any of their Subsidiaries will rank senior to or pari passu with the Notes in right of payment or collectability, whether with respect to payment of redemptions, interest, damages or upon liquidation or dissolution or otherwise.
Section 7.11Title. Each of the Credit Parties and each of their Subsidiaries has (i) good and marketable title to (in the case of fee interests in real property), (ii) valid leasehold interests in (in the case of leasehold interests in real or personal property), (iii) adequate rights in (in the case of licensed interests in Intellectual Property Rights and Intellectual Property Rights that are not wholly owned by a Credit Party or a Subsidiary), and (iv) good and marketable title to (in the case of all other personal property) all of its real property and other properties and assets owned by it which are material to the business of such Credit Party or such Subsidiary, in each case free and clear of all liens, encumbrances and defects, other than Permitted Liens. Any real property and facilities held under lease by any Credit Party or any of their Subsidiaries are held by it under valid and enforceable leases.
Section 7.12Intellectual Property Rights. Each of the Credit Parties and each of their Subsidiaries owns or possesses adequate rights to use all trademarks, trade names, service marks, service mark registrations, service names, patents, patent rights, copyrights, inventions, trade secrets and other intellectual property rights (“Intellectual Property Rights”) that are necessary and material to conduct its respective business and no Credit Party or Subsidiary has previously
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granted any Lien on any such Intellectual Property Rights other than Permitted Liens. Except as described on Schedule 7.12, no registered Intellectual Property Rights that are owned by a Credit Party or a Subsidiary have expired or terminated, or are expected to expire or terminate within five (5) years from the Fifth Restatement Closing Date. Except as described on Schedule 7.12, (i) none of any Credit Party or any of their Subsidiaries has any knowledge of any infringement, misappropriation, dilution or other violation by any Credit Party or any of their Subsidiaries of Intellectual Property Rights owned by other Persons; (ii) none of any Credit Party or any of their Subsidiaries has any knowledge of any infringement, misappropriation, dilution or other violation by any other Persons of the Intellectual Property Rights owned by any Credit Party or any of their Subsidiaries; (iii) there is no claim, action or proceeding pending before any court, judicial body, administrative or regulatory agency, arbitrator or other governmental authority or, to the knowledge of each of the Credit Parties, threatened in writing, against any Credit Party or any of their Subsidiaries contesting or challenging the validity, scope or enforceability of, or a Credit Party’s or Subsidiary’s ownership of or right to use, its owned Intellectual Property Rights or the Intellectual Property Rights it licenses from other Persons; and (iv) none of any Credit Party or any of their Subsidiaries is aware of any facts or circumstances which reasonably could be expected to give rise to any of the foregoing infringements or claims, actions or proceedings. Each of the Credit Parties and their Subsidiaries has taken and is taking commercially reasonable security measures to maintain and protect the secrecy, confidentiality and value of the trade secrets and other confidential information it owns.
Section 7.13Creation, Perfection, and Priority of Liens.
(a)The Security Documents (other than the UK Security Documents) are effective to create in favor of the Agent, for the benefit of the Holders and the Lenders, a legal, valid, binding, and (upon the filing of the appropriate UCC financing statements and Intellectual Property Security Agreements, the transfer of possession of original certificated securities together with appropriate transfer instruments and the delivery of deposit account control agreements) enforceable perfected first priority (subject to Permitted Liens) security interest and Lien in the Collateral described therein as security for the Obligations to the extent that a legal, valid, binding, and enforceable security interest and Lien in such Collateral may be created under applicable law including without limitation, the uniform commercial code as in effect in any applicable jurisdiction (“UCC”) and any other applicable governmental agencies.
(b)The obligations expressed to be assumed by each UK Credit Party in each UK Security Document to which it is a party are legal, valid, binding and enforceable obligations subject to (i) the Legal Reservations and (ii) registration under the Companies Act 2006.
Section 7.14Absence of Certain Changes; Insolvency.
(a)Since December 31, 2015 (the “Diligence Date”), there has been no material adverse change in the business, assets, properties, operations, condition (financial or otherwise), results of operations or prospects of any Credit Party or any of the Credit Parties’ Subsidiaries. Since the Diligence Date, neither any Credit Party nor any of their Subsidiaries has (i) declared or paid any dividends or (ii) sold any assets (other than the sale of Inventory in the ordinary course of business). NeitherExcept as described on Schedule 7.14, neither any Credit
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Party nor any of their Subsidiaries has taken any steps to seek protection pursuant to any bankruptcy law nor do any Credit Party or any of their Subsidiaries have any knowledge that its creditors intend to initiate involuntary bankruptcy proceedings or any actual knowledge of any fact which would reasonably lead a creditor to do so. Neither any Credit Party nor any of their Subsidiaries intends to incur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt). None of the UK Credit Parties, the US Credit Parties or the Credit Parties and their Subsidiaries taken as a whole are, as of the Fifth Restatement Closing Date, or after giving effect to the transactions contemplated hereby to occur at the Fifth Restatement Closing, will be, Insolvent. Without limitation of the foregoing, no corporate action, legal proceeding or other procedure or step in respect of any Insolvency Proceeding or expropriation, attachment, sequestration, distress or execution or any analogous process in any jurisdiction over any asset or assets of a Credit Party has been taken or, to the knowledge of Holdings, threatened in relation to Elevate Credit Parent or any of its Subsidiaries.
Section 7.15Absence of Proceedings. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, Governmental Authority (including, without limitation, the SEC, self-regulatory organization or other governmental body) (in each case, a “Proceeding”) pending or, to the knowledge of any Credit Party, threatened in writing against or affecting any Credit Party, or any of the Credit Parties’ Subsidiaries or any of their respective officers or directors which (i) could reasonably be expected to result, either individually or in the aggregate, in a Material Adverse Effect, (ii) if adversely determined, could reasonably be expected to result, either individually or in the aggregate, in a Material Adverse Effect, or (iii) questions the validity of this Agreement, any of the other Transaction Documents or any of the transactions contemplated hereby or thereby or any action taken or to be taken pursuant hereto or thereto.
Section 7.16No Undisclosed Events, Liabilities, Developments or Circumstances. No event, liability, development or circumstance has occurred or exists, or is contemplated to occur or may occur with respect to any Credit Party or any of the Credit Parties’ Subsidiaries or their respective business, properties, prospects, operations or financial condition, that would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect. For the purposes of this Section 7.16 only, any gross negligence, willful misconduct or fraud in the conduct of business by any Credit Party or any of their Subsidiaries, as determined by a court of competent jurisdiction in a final, non-appealable judgment or order, shall be presumed to have, or be reasonably expected to have, a Material Adverse Effect.
Section 7.17No Disagreements with Accountants and Lawyers. There are no disagreements of any kind presently existing, or reasonably anticipated by any Credit Party or any of their Subsidiaries to arise, between any Credit Party or any of their Subsidiaries and the accountants and lawyers formerly or presently employed by Credit Parties and their Subsidiaries which would reasonably be expected to affect the ability of the Credit Parties to perform any of their obligations under any of the Transaction Documents.
Section 7.18No General Solicitation; Placement Agent’s Fees.
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None of the Borrowers, any of their Affiliates, nor any Person acting on its or their behalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D) in connection with the offer or sale of the Securities. No Credit Party has engaged any placement agent or other agent in connection with the closing of the transactions contemplated by this Agreement or the issuance of the Securities.
Section 7.19Reserved.
Section 7.20Tax Status. Each Credit Party and their Subsidiaries (i) have made or filed all foreign, federal, state and local income Tax Returns and all other material Tax Returns, reports and declarations required by any jurisdiction to which they are subject and all such Tax Returns were correct and complete in all respects and were prepared in substantial compliance with all applicable laws and regulations, (ii) have paid all Taxes and other governmental assessments and charges due and owing (whether or not shown on any Tax Return), and (iii) have set aside on their books adequate reserves in accordance with GAAP for the payment of all Taxes due and owing by any Credit Party or its respective Subsidiaries. There are no unpaid Taxes in any material amount claimed to be delinquent by the taxing authority of any jurisdiction (other than those being contested in good faith by appropriate proceedings promptly instituted and diligently conducted and subject to adequate reserves taken by Credit Parties or such Subsidiaries as shall be required in conformity with GAAP), and the officers of each of the Credit Parties and their Subsidiaries know of no basis for any such claim. No claim has ever been made by an authority in a jurisdiction where any Credit Party or any of its Subsidiaries does not file Tax Returns that any Credit Party or any of its Subsidiaries is or may be subject to taxation by that jurisdiction. There are no Liens for Taxes (other than Taxes not yet due and payable) upon any of the assets of the Credit Parties or any of their respective Subsidiaries.
Section 7.21Transfer Taxes. On the Fifth Restatement Closing Date, all transfer or Other Taxes (other than income or similar taxes) which are required to be paid in connection with the issuance of the Securities to each Lender hereunder will be, or will have been, fully paid or provided for by the Credit Parties, and all laws imposing such Taxes will be or will have been complied with. Without limitation of the foregoing, it is not necessary under the laws of each Relevant Jurisdiction of the Credit Parties that the Transaction Documents be filed, recorded or enrolled with any court or other authority in that jurisdiction or that any stamp, registration, notarial or similar taxes or fees be paid on or in relation to the Transaction Documents or the transactions contemplated by the Transaction Documents except:
(a)registration of particulars of the UK Security Documents at the Companies Registration Office in England and Wales under section 859A of the Companies Act 2006 and payment of associated fees; and
(b)registration of particulars of the relevant UK Security Documents at the Trade Marks Registry at the Patent Office in England and Wales any payment of associated fees;
each of which registration will be made and paid promptly after the date of the relevant Transaction Document.
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Section 7.22Conduct of Business; Compliance with Laws; Regulatory Permits. Neither any Credit Party nor any of their Subsidiaries is in violation of any term of or in default under its certificate or articles of incorporation or bylaws or other governing documents. Neither any Credit Party nor any of their Subsidiaries is in violation of any judgment, decree or order or any law, rule, regulation, statute or ordinance applicable to any Credit Party or any of their Subsidiaries (including, without limitation, all Environmental Laws and the Requirements). As of the Fifth Restatement Closing Date and the date of each Subsequent Draw, all Consumer Loan Agreements, Bank Transaction Documents and related Consumer Loans (or participation interests therein) originated or purchased on or after the Fifth Restatement Closing Date have been originated by the applicable Bank or a Credit Party or Subsidiary of a Credit Party and in the case of Bank originations, have been purchased by the Credit Parties or their Subsidiaries, in each case, in compliance with applicable law and the Program Guidelines and are being serviced by the applicable Credit Parties or Subsidiaries in compliance with applicable law and the Program Guidelines except to the extent that any such noncompliance would not reasonably be expected to have, either individually or in the aggregate, in a Material Adverse Effect. Schedule 7.22 (as such Schedule shall be updated from time to time by the Credit Parties by written notice to Agent) sets forth all United States federal and state and applicable foreign regulatory licenses, material consents, authorizations, approvals, orders, licenses, franchises, permits, certificates, accreditations and permits and all other appropriate regulatory authorities necessary to conduct the respective businesses of the Credit Parties and their Subsidiaries, and except as set forth on Schedule 7.22 (as such Schedule shall be updated from time to time by the Credit Parties by written notice to Agent), all of such United States federal and state and applicable foreign regulatory licenses, material consents, authorizations, approvals, orders, licenses, franchises, permits, certificates, accreditations and permits and other appropriate regulatory authorities are valid and in effect and no Credit Party nor any of their Subsidiaries has received any notice of proceedings or entered into formal or informal discussions relating to the revocation or modification of any such United States federal and state and applicable foreign regulatory licenses, consents, authorizations, approvals, orders, licenses, franchises, permits, certificates, accreditations or permits. To the knowledge of each of the Credit Parties, it is not necessary under the laws of its Relevant Jurisdictions:
(a)in order to enable the Agent, any Lender or any Holder to enforce their respective rights under any Transaction Document; or
(b)by reason of the execution of any Transaction Document or the performance by it of its obligations under any Transaction Document,
that the Agent, any Lender or any Holder be licensed, qualified or otherwise entitled to carry on business in any of its Relevant Jurisdictions.
None of the Agent, any Lender or any Holder is or will be deemed to be resident, domiciled or carrying on business in its Relevant Jurisdictions solely by reason of the execution, performance and/or enforcement of any Transaction Document.
Section 7.23Foreign Corrupt Practices. Neither any Credit Party nor any of their Subsidiaries, nor any director, officer, agent, employee or other Person acting on behalf of any
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Credit Party or any of their Subsidiaries has, in the course of its actions for, or on behalf of, any Credit Party or any of their Subsidiaries (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expenses relating to political activity; (ii) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; (iii) violated or is in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977 or the Bribery Act 2010, in each case, as amended; or (iv) made any unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful payment to any foreign or domestic government official or employee.
Section 7.24Reserved.
Section 7.25Environmental Laws. Each Credit Party and their Subsidiaries (a) (i) is in compliance with any and all Environmental Laws, (ii) has received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses, (iii) is in compliance with all terms and conditions of any such permit, license or approval, and (iv) has no outstanding Liability under any Environmental Laws and are not aware of any facts that could reasonably result in Liability under any Environmental Laws, in each of the foregoing clauses of this clause (a), except to the extent, either individually or in the aggregate, a Material Adverse Effect could not reasonably be expected to occur, and (b) have provided Agent and Lenders with copies of all environmental reports, assessments and other documents in any way related to any actual or potential Liability under any Environmental Laws.
Section 7.26Margin Stock. Neither any Credit Party nor any of their Subsidiaries is engaged in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulation U of the Board of Governors of the Federal Reserve System), and no part of the proceeds from any Securities will be used (a) to directly purchase or carry any margin stock, (b) to the knowledge of the Credit Parties, without inquiry, to extend credit to others for the purpose of purchasing or carrying any margin stock, or (c) for any purpose that violates the provisions of Regulation T, U or X of the Board of Governors of the Federal Reserve System.
Section 7.27ERISA; Pension Schemes. Except as set forth on Schedule 7.27, neither any Credit Party nor any ERISA Affiliate (a) maintains or has maintained any Pension Plan, (b) contributes or has contributed to any Multiemployer Plan or (c) provides or has provided post-retirement medical or insurance benefits with respect to employees or former employees (other than benefits required under Section 601 of ERISA, Section 4980B of the Code or applicable federal, state or foreign law). Except as set forth on Schedule 7.27, neither any Credit Party nor any ERISA Affiliate has received any notice or has any knowledge to the effect that it is not in material compliance with any of the requirements of ERISA, the Code or applicable federal, state or foreign law with respect to any Employee Benefit Plan. No ERISA Event exists. Each Employee Benefit Plan which is intended to qualify under the Code has received a favorable determination letter (or opinion letter in the case of a prototype Employee Benefit Plan) to the effect that such Employee Benefit Plan is so qualified and to Credit Parties’ knowledge, there exists no reasonable basis for the revocation of such determination or opinion letter. Neither any Credit Party nor any ERISA Affiliate has (i) any unpaid minimum required contributions under
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any Plan, whether or not waived, (ii) any liability under Section 4201 or 4243 of ERISA for any withdrawal, or partial withdrawal, from any Multiemployer Plan, (iii) a Pension Plan that is “at risk” within the meaning of Section 430 of the Code, (iv) received notice from any Multiemployer Plan that it is either in endangered or critical status within the meaning of Section 432 of the Code or (v) any material liability or knowledge of any facts or circumstances which reasonably might be expected to result in any material liability to the PBGC, the Internal Revenue Service, the Department of Labor or any participant in connection with any Employee Benefit Plan (other than routine claims for benefits under the Employee Benefit Plan). In respect of each UK Credit Party, (a) neither it nor any of its Subsidiaries is or has at any time been an employer (for the purposes of sections 38 to 51 of the Pensions Act 2004) of an occupational pension scheme which is not a money purchase scheme (both terms as defined in the Pensions Schemes Act 1993); and (b) neither it nor any of its Subsidiaries is or has at any time been “connected” with or an “associate” of (as those terms are used in sections 38 and 43 of the Pensions Act 2004) such an employer.
Section 7.28Investment Company. Neither any Credit Party nor any of their Subsidiaries is a “registered investment company” or a company “controlled” by a “registered investment company” or a “principal underwriter” of a “registered investment company” as such terms are defined in the Investment Company Act of 1940, as amended.
Section 7.29U.S. Real Property Holding Corporation. Neither any Credit Party nor any of their Subsidiaries is, nor has it ever been, a U.S. real property holding corporation within the meaning of Section 897 of the Code, as amended, and the Credit Parties will so certify upon the request of Agent.
Section 7.30Internal Accounting and Disclosure Controls. The Credit Parties and their Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset and liability accountability, (iii) access to assets or incurrence of liabilities is permitted only in accordance with management’s general or specific authorization and (iv) the recorded accountability for assets and liabilities is compared with the existing assets and liabilities at reasonable intervals and appropriate action is taken with respect to any difference. During the twelve (12) months immediately prior to the Fifth Restatement Closing Date, neither any Credit Party nor any of their Subsidiaries has received any written notice or correspondence from any accountant relating to any potential material weakness in any part of the system of internal accounting controls of any Credit Party or any of their Subsidiaries.
Section 7.31Accounting Reference Date. The Accounting Reference Date of Holdings and each of its Subsidiaries is December 31.
Section 7.32Transactions With Affiliates. Except (i) as set forth on Schedule 7.32 and (ii) for transactions that have been entered into on terms no less favorable to the Credit Parties and their Subsidiaries than those that might be obtained at the time from a Person who is not an officer, director or employee, none of the officers, directors or employees of any Credit Party or
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any of their Subsidiaries is presently a party to any transaction with any Credit Party or any of their Subsidiaries (other than for ordinary course services as employees, officers or directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any such officer, director or employee or, to the knowledge of the Credit Parties, any corporation, partnership, trust or other entity in which any such officer, director, or employee has a substantial interest or is an officer, director, trustee or partner.
Section 7.33Acknowledgment Regarding Holders’ Purchase of Securities. Each of the Credit Parties acknowledges and agrees that each Holder is acting solely in the capacity of an arm’s length lender with respect to the Transaction Documents and the transactions contemplated hereby and thereby and that no Holder is (i) an officer or director of any Credit Party or any of their Subsidiaries, or (ii) an Affiliate of any Credit Party or any of their Subsidiaries. Each of the Credit Parties further acknowledges that no Holder is acting as a financial advisor or fiduciary of any Credit Party or any of their Subsidiaries (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated hereby and thereby, and any advice given by a Holder or any of their representatives or agents, including, without limitation, the Agent, in connection with the Transaction Documents and the transactions contemplated hereby and thereby is merely incidental to such Holder’s receipt of the Securities. Each of the Credit Parties further represents to each Holder that each Credit Party’s decision to enter into the Transaction Documents to which it is a party have been based solely on the independent evaluation by such Person and its respective representatives.
Section 7.34Reserved.
Section 7.35Insurance. Credit Parties and their Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which Credit Parties and their Subsidiaries are engaged. Neither any Credit Party nor any of their Subsidiaries believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse Effect.
Section 7.36 Full Disclosure. None of the representations or warranties made by any Credit Party or any of their Subsidiaries in the Transaction Documents as of the date such representations and warranties are made or deemed made, and none of the statements contained in each exhibit, report, statement or certificate furnished by or on behalf of any Credit Party or any of their Subsidiaries in connection with the Transaction Documents, contains any untrue statement of a material fact or omits any material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances under which they are made, not misleading as of the time when made or delivered.
Section 7.37Employee Relations. Neither any Credit Party nor any of their Subsidiaries is a party to any collective bargaining agreement or employs any member of a union in such person’s capacity as a union member or to perform union labor work. Each of the Credit Parties believes that its relations with its employees are good. As of the Fifth Restatement
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Closing Date, no executive officer of any Credit Party or any of their Subsidiaries has notified such Credit Party or such Subsidiary that such officer intends to leave such Credit Party or such Subsidiary or otherwise terminate such officer’s employment with such Credit Party or such Subsidiary. As of the Fifth Restatement Closing Date, no executive officer of any Credit Party or any of their Subsidiaries, to the knowledge of the Credit Parties, is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement, non-competition agreement, or any other contract or agreement or any restrictive covenant. Each Credit Party and their Subsidiaries are in compliance with all federal, state, local and foreign laws and regulations respecting labor, employment and employment practices and benefits, terms and conditions of employment and wages and hours, except where failure to be in compliance would not, either individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.
Section 7.38Certain Other Representations and Warranties. Each Consumer Loan Agreement and Credit Card Agreement is a valid and subsisting agreement and is in full force and effect in accordance with the terms thereof, no default or event of default exists under any such Consumer Loan Agreement or Credit Card Agreement and no party to any such Consumer Loan Agreement or Credit Card Agreement has any accrued right to terminate any such Consumer Loan Agreement of Credit Card Agreement on account of a default by any Person or otherwise, except in each case, where the same would not, either individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect. Each of the Bank Transaction Documents complies in all material respects with all applicable laws, rules, regulations, orders, judgments and decrees (including, without limitation, all Environmental Laws and the Requirements). Each Bank Transaction Document is a valid and enforceable agreement and is in full force and effect in accordance with the terms thereof and is currently being serviced in accordance with the Program Guidelines and the applicable Requirements and no party to any such Bank Transaction Document (other than a Credit Party) has any accrued right to terminate any such Bank Transaction Document on account of a default by any Person or otherwise, except in each case, where the same would not, either individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect. The CCB Participation Agreement is a valid and enforceable agreement and is in full force and effect in accordance with the terms thereof and is currently being serviced in accordance with the Program Guidelines and the applicable Requirements and no party to the CCB Participation Agreement (other than a Credit Party) has any accrued right to terminate the CCB Participation Agreement on account of a default by any Person or otherwise, except in each case, where the same would not, either individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.
Section 7.39Patriot Act. To the extent applicable, the Credit Parties and their Subsidiaries are in compliance, in all material respects, with (i) the Trading with the Enemy Act, as amended, and each of the foreign assets control regulations of the United States Treasury Department and any other enabling legislation or executive order relating thereto, and (ii) the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)).
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Section 7.40Material Contracts. Schedule 7.40 contains a true, correct and complete list of all the Material Contracts (other than those of the type described in clause (a) of the definition thereof) of the Credit Parties and their Subsidiaries (which Schedule shall be updated by the Credit Parties by written notice to Agent promptly following the execution of any such additional Material Contract following the Fifth Restatement Closing Date), and all such Material Contracts are in full force and effect and, to Credit Parties’ knowledge, no defaults currently exist thereunder.
Article 8
COVENANTS

Section 8.1Financial Covenants. Solely with respect to the calendar month ending February 28, 2019, the Credit Parties shall, and shall cause their Subsidiaries to, comply with the financial covenants set forth in Section 8.1 of the Fourth Amended and Restated Financing Agreement prior to the effectiveness of this Agreement and thereafter, the Credit Parties shall, and shall cause their Subsidiaries to, comply with the following financial covenants:
(a)Loan to Value Ratio.
(i)The Credit Parties shall not permit the Loan to Value Ratio (UK) calculated as of the last day of any calendar month to be greater than 1.00 to 1.00.
(ii)The Credit Parties shall not permit the Loan to Value Ratio (US) calculated as of the last day of any calendar month to be greater than 1.00 to 1.00.
If as of any applicable testing date the Credit Parties fail to comply with the financial covenants contained in this Section 8.1(a) (a “LTV Covenant Default”), then the Credit Parties shall have the obligation to cure such breach (the “LTV Covenant Cure Obligation”) within thirty (30) days of the occurrence thereof by causing Elevate Credit Parent to contribute to the Borrowers cash (in the form of a capital contribution and not in the form of an extension of credit or other Indebtedness) in an aggregate amount that would cause the Credit Parties to be in pro forma compliance with such covenant as of such testing date (such amount, the “LTV Covenant Cure Amount”). Until timely receipt of the LTV Covenant Cure Amount for any applicable LTV Covenant Default, an Event of Default shall be deemed to exist for all purposes of this Agreement and the other Transaction Documents; provided, that during such thirty (30) day cure period (unless the Agent shall have been notified that such LTV Covenant Cure Amount shall not be made) neither the Agent nor any Lender or Holder shall exercise any enforcement remedy against the Credit Parties or any of their Subsidiaries or any of their respective properties solely as a result of the existence of the applicable LTV Covenant Default and; provided, further, that upon timely receipt of such LTV Covenant Cure Amount, the underlying LTV Covenant Default shall no longer be deemed to be continuing. Notwithstanding anything to the contrary in this Section 8.1(a), in no event shall the Credit Parties be permitted to cure more than three (3) LTV Covenant Defaults during the term of this Agreement.
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(b)Corporate Cash. The Credit Parties shall not permit Corporate Cash at any time (x) prior to December 31, 2019 to be less than the greater of (i) $5,000,000 or (ii) in the event that Elevate Credit Parent enters into any share buyback, $10,000,000 and (y) after December 31, 2019 to be less than the greater of (i) $7,500,000 or (ii) in the event that Elevate Credit Parent enters into any share buyback, $10,000,000.
(c)Total Cash. The Credit Parties shall cause Total Cash as of the last day of each calendar month to be greater than or equal to five percent (5%) of total principal amount of Receivables of Elevate Credit Parent and its Subsidiaries.
(d)Book Value of Equity. The Credit Parties shall not permit the Book Value of Equity, calculated as of the last day of any calendar month, to be less than $85,000,000, as may be amended or modified by mutual agreement between the parties hereto in good faith; provided that the parties agree that any reductions or discounts required by applicable Current Expected Credit Losses (CECL) standards shall be carved out.
(e)Past Due Roll Rate.
(i)The Credit Parties shall not permit the Trailing Past Due Roll Rate (UK), calculated as of the last day of any calendar month (commencing with the calendar month of February 2019) to be greater than thirteen and one-half percent (13.5%).
(ii)The Credit Parties shall not permit the Trailing Past Due Roll Rate (US), calculated as of the last day of any calendar month (commencing with the calendar month of February 2019) to be greater than twelve and one-half percent (12.5%).
(f)Four Month Vintage Charge Off Rate.
(i)The Credit Parties shall not permit the Trailing Four Month Charge Off Rate (UK) to be greater than twenty percent (20%).
(ii)The Credit Parties shall not permit the Trailing Four Month Charge Off Rate (US) to be greater than nine and one-half percent (9.5%).
(g)Eight Month Vintage Charge Off Rate. The Credit Parties shall not permit the Trailing Eight Month Charge Off Rate (UK) to be greater than twenty-five percent (25%).
(h)Twelve Month Vintage Charge Off Rate. The Credit Parties shall not permit the Trailing Twelve Month Charge Off Rate (US) to be greater than thirty-six percent (36%).
(i)Excess Spread.
(i)The Credit Parties shall not permit the Trailing Excess Spread (UK) to be less than eight percent (8.00%).
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(ii)The Credit Parties shall not permit the Trailing Excess Spread (US) to be less than three percent (3.00%).
The defined term “Consumer Loans” as used in Sections 8.1(e) through (i) (or component defined terms used therein) may, in the Agent’s sole discretion, be deemed to mean, include and/or exclude (i) all unsecured consumer loans originated by FinWise Bank and in which a 96.0% participation interest is sold to EF SPV and/or (ii) all unsecured consumer loans originated by Capital Community Bank and in which a 95.0% participation interest is sold to EFCC SPV. Notwithstanding anything in this Agreement to the contrary, all calculations for purposes of Section 8.1(e), (f) and (g) above with respect to Consumer Loans marked as “Sunny” on the monthly financial statements provided to Agent pursuant to Section 8.2(a) shall include accrued interest for such Consumer Loans in the numerator for such calculations.
Section 8.2Deliveries. The Borrowers agree to deliver the following to the Agent via electronic (e-mail) transmission or other written means acceptable to the Agent:
(a)Monthly Financial Statements. As soon as available and in any event within twenty-one (21) days after the end of each month (including December), the unaudited consolidated and consolidating (as between United Kingdom operations, on the one hand, and United States operations, on the other hand) balance sheets of the Credit Parties and their Subsidiaries as at the end of such month and the related consolidated and consolidating (as between United Kingdom operations, on the one hand, and United States operations, on the other hand) statements of operations, stockholders’ equity and cash flows of Elevate Credit Parent and its Subsidiaries and UK Borrower for such month and for the period from the beginning of the then current Fiscal Year to the end of such month, all in reasonable detail, and certified by the chief financial officer of Elevate Credit Parent (or other authorized executive officer performing a similar function) as being true and correct and fairly presenting in accordance with GAAP, the financial position and results of operations of the Elevate Credit Parent and its Subsidiaries and UK Borrower, as applicable, subject to normal year-end adjustments and absence of footnote disclosure;
(b)Annual Financial Statements. As soon as available, and in any event within one hundred twenty (120) days after the end of each Fiscal Year, the audited consolidated and consolidating (as between United Kingdom operations, on the one hand, and United States operations, on the other hand) balance sheets of Elevate Credit Parent and its Subsidiaries and UK Borrower as at the end of such Fiscal Year and the related consolidated and consolidating (as between United Kingdom operations, on the one hand, and United States operations, on the other hand) statements of operations, stockholders’ equity and cash flows of the Credit Parties and their Subsidiaries for such Fiscal Year, setting forth in each case in comparative form the corresponding figures for the previous Fiscal Year, in reasonable detail and certified by the chief financial officer of Elevate Credit Parent (or other authorized executive officer performing a similar function) as being true and correct and fairly presenting in accordance with GAAP, the financial position and results of operations of Elevate Credit Parent and its Subsidiaries and UK Borrower, as applicable, accompanied by a customary unqualified opinion of an independent accounting firm acceptable to Agent;
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(c)Compliance Certificate and Borrowing Base Certificate. On the dates that the financial statements under clause (a) above are delivered, a duly completed Compliance Certificate and a duly completed Borrowing Base Certificate, each with appropriate insertions, dated the date of the applicable monthly financial statements, and signed on behalf of the Borrowers by the chief financial officer of the Borrower Representative (or other authorized executive officer performing a similar function), in the case of each Compliance Certificate (i) containing a computation of the covenants set forth in Section 8.1 hereof, (ii) indicating whether or not the Credit Parties are in compliance with each covenant set forth in ARTICLE 8 of this Agreement and whether each representation and warranty contained in ARTICLE 7 of this Agreement is true and correct in all material respects (without duplication of any materiality qualifiers) as though made on such date (except for representations and warranties that speak as of a specific date, which representations and warranties are true and correct in all material respects (without duplication of any materiality qualifiers as of such date), and (iii) to the effect that such officer has not become aware of any Event of Default (or event or circumstance that, with the passage of time, the giving of notice, or both, would become an Event of Default) that has occurred and is continuing or, if there is any such Event of Default (or event or circumstance that, with the passage of time, the giving of notice, or both, would become an Event of Default), describing it and the steps, if any, being taken to cure it;
(d)Monthly Data Tape. On the dates that the financial statements under clause (a) above are delivered, a data tape in a form acceptable to Agent in its sole discretion that contains information as to the Borrowers’ loan and credit card receivables portfolio submitted as of the most recent month end. The Credit Parties shall provide a data tape to Agent promptly after the Fifth Restatement Closing Date but in no event after March 31, 2019.
(e)Monthly Reporting Package. On the dates that the financial statements under clause (a) above are delivered, a monthly operations reporting package, in form and detail reasonably acceptable to the Agent.
Section 8.3Notices. The Borrowers agree to deliver the following to the Agent via electronic (e-mail) transmission or other written means acceptable to the Agent:
(a)Collateral Information. Upon request of Agent, a certificate of one of the duly authorized officers of the Borrower Representative on behalf of the Borrowers (i) either confirming that there has been no change in the information set forth in the perfection certificate executed and delivered to the Agent on the Fifth Restatement Closing Date since such date or the date of the most recent certificate delivered pursuant to this Section and/or identifying such changes, and (ii) certifying that all UCC financing statements (including fixtures filings, as applicable) and other appropriate filings, recordings and registrations have been filed of record in each governmental, municipal and other appropriate office in each jurisdiction identified pursuant to clause (i) above (or in such certificate) to the extent necessary to effect, protect and perfect the security interests under the Security Documents for a period of not less than 18 months after the date of such certificate (except as noted therein with respect to any continuation statements to be filed within such period);
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(b)Auditor Reports. Promptly upon receipt thereof, copies of any reports submitted by the Credit Parties’ independent public accountants, if any, in connection with each annual, interim or special audit or review of any type of the financial statements or internal control systems of any Credit Party or any of their Subsidiaries made by such accountants, including any comment letters submitted by such accountants to management of any Credit Party or any of their Subsidiaries in connection with their services;
(c)Notice of Default. Promptly upon any officer of a Credit Party obtaining knowledge (i) of any condition or event that constitutes an Event of Default (or event or circumstance that, with the passage of time, the giving of notice, or both, would become an Event of Default) or that notice has been given to a Credit Party with respect thereto; (ii) that any Person has given any notice to the Credit Party or taken any other action with respect to any event or condition set forth in ARTICLE 10; or (iii) of the occurrence of any event or change that has caused or evidences, either in any case or in the aggregate, a Material Adverse Effect, a certificate of its chief executive officer or chief financial officer (or other authorized executive officer performing a similar function) specifying the nature and period of existence of such condition, event or change, or specifying the notice given and action taken by any such Person and the nature of such claimed Event of Default, default, event or condition, and the action(s) the Credit Parties have taken, are taking and propose to take with respect thereto;
(d)Notice of Litigation. Promptly upon any officer of a Credit Party obtaining knowledge of (i) the institution of, or nonfrivolous threat of, any adverse Proceeding against or affecting any Credit Party, or any of the Credit Parties’ Subsidiaries or any of their respective officers or directors not previously disclosed in writing by the Credit Parties to the Agent, or (ii) any material development in any adverse Proceeding against or affecting any Credit Party, or any of the Credit Parties’ Subsidiaries or any of their respective officers or directors that, in the case of either clause (i) or (ii) if adversely determined, could be reasonably expected to have a Material Adverse Effect, or seeks to enjoin or otherwise prevent the consummation of, or to recover any damages or obtain relief as a result of, the transactions contemplated hereby, written notice thereof together with such other information as may be reasonably available to the Credit Parties to enable the Agent, the Lenders and the Holders and their counsel to evaluate such matters (it being agreed and understood that as of the First Amendment Effective Date the Credit Parties have timely complied with their notice obligations, if any, under this clause (d) with respect to the Proceedings described on Schedule 8.3(d));
(e)ERISA. (i) Promptly upon becoming aware of the occurrence of or forthcoming occurrence of any ERISA Event, a written notice specifying the nature thereof, the action(s) any Credit Party or any of their Subsidiaries or any of their respective ERISA Affiliates has taken, is taking or proposes to take with respect thereto and, when known, any action taken or threatened by the Internal Revenue Service, the Department of Labor or the PBGC with respect thereto; and (ii) with reasonable promptness, copies of (1) each Schedule B (Actuarial Information) to the annual report (Form 5500 Series) filed by any Credit Party, any of their Subsidiaries or any of their respective ERISA Affiliates with the Internal Revenue Service with respect to each Pension Plan; (2) all notices received by the Credit Party, any of its Subsidiaries or any of their respective ERISA Affiliates from a Multiemployer Plan sponsor concerning an
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ERISA Event; and (3) copies of such other documents or governmental reports or filings relating to any Employee Benefit Plan as the Agent shall reasonably request;
(f)Insurance Report. Promptly upon request of the Agent, a report by the Credit Parties’ insurance broker(s) in form and substance satisfactory to the Agent outlining all material insurance coverage maintained as of the date of such report by the Credit Parties;
(g)Environmental Reports and Audits. As soon as practicable following receipt thereof, copies of all environmental audits and reports with respect to environmental matters at any facility or property used by any Credit Party or any of their Subsidiaries or which relate to any environmental liabilities of any Credit Party or any of their Subsidiaries which, in any such case, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect;
(h)Corporate Information. Fifteen (15) days’ prior written notice of any change (i) in any Credit Parties’ corporate name, (ii) in any Credit Parties’ identity or organizational structure, (iii) in any Credit Parties’ jurisdiction of organization, or (iv) in any Credit Parties’ Federal Taxpayer Identification Number or state organizational identification number (or local equivalents thereof). The Credit Parties agree not to effect or permit any change referred to in the preceding sentence unless all filings have been made under the UCC or otherwise and all other actions that are required in order for the Agent to continue at all times following such change to have a valid, legal and perfected security interest in all the Collateral as contemplated in the US Security Agreement, the UK Security Documents and other Transaction Documents; provided, the foregoing notwithstanding any of the Elevate Credit Subsidiaries (other than a Borrower) may suspend its operations in any jurisdiction in which it operates and dissolve as a result of a decision by the Credit Parties to exit one or more markets from time to time;
(i)Tax Returns. Within ten (10) days following request by the Agent, copies of each federal income tax return filed by or on behalf of Credit Parties and requested by the Agent;
(j)Event of Loss. Promptly (and in any event within three (3) Business Days) notice of any claim with respect to any liability against any Credit Party or any of their Subsidiaries that (i) is in excess of $250,000 or (ii) could reasonably be expected to result in a Material Adverse Effect;
(k)Program and Consumer Loan Portfolio Reporting. (i) No later than the fifth (5th) Business Day after the end of each calendar week, a performance report of the Program as of the end of business on Friday of such calendar week, in form and substance reasonably acceptable to the Agent and (ii) together with the delivery of the financial statements and reports pursuant to subsections 8.2(a) and (b), a summary report with respect to the Consumer Loan portfolio of Elevate Credit Parent and its Subsidiaries containing such information as may be reasonably requested by Agent and a summary report with respect to the Credit Card Receivable portfolio of the Credit Parties containing such information as may be reasonably requested by Agent;
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(l)[Reserved]; and
(m)Bank Transaction Documents. Promptly upon receipt thereof, (i) copies of all notices of the occurrence of a “Default”, an “Event of Default” or other event described by terms of similar import under the Bank Transaction Documents or any other material notices under the Bank Transaction Documents, (ii) notice of any cure or waiver of any “Default”, “Event of Default” or other event described by terms of similar import under the Bank Transaction Documents or any reservation of rights notice, and (iii) complete copies of any amendments, consents or waivers to, or with respect to the Bank Transaction Documents.
(n)Other Information. Promptly upon their becoming available, deliver copies of (i) all financial statements, reports, notices and proxy statements sent or made available generally by any Credit Party to its security holders acting in such capacity or by any of their Subsidiaries to their security holders other than another Credit Party or another Subsidiary, (ii) all regular and periodic reports and all registration statements and prospectuses, if any, filed by any Credit Party or any of their Subsidiaries with any securities exchange or with the SEC or any governmental or private regulatory authority, (iii) all press releases and other statements made available generally by any Credit Party or any of their Subsidiaries to the public concerning material developments in the business of any Credit Party or any of their Subsidiaries, (iv) subject to limitations imposed by applicable law, all documents and information furnished to Governmental Authorities in connection with any investigation of any Credit Party or any of their Subsidiaries (other than any routine inquiry) and (v) such other information and data with respect to any Credit Party or any of their Subsidiaries as from time to time may be reasonably requested by the Agent.
Section 8.4Rank. Subject to the relative priorities of the Notes set forth in this Agreement, all Indebtedness due under the Notes shall be senior in right of payment, whether with respect to payment of redemptions, interest, damages or upon liquidation or dissolution or otherwise, to all other current and future Indebtedness of the Credit Parties and their Subsidiaries.
Section 8.5Incurrence of Indebtedness. No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to, directly or indirectly, create, incur or guarantee, assume, or suffer to exist any Indebtedness or engage in any sale and leaseback, synthetic lease or similar transaction, other than (i) the Obligations and (ii) Permitted Indebtedness.
Section 8.6Existence of Liens. No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to, directly or indirectly, allow or suffer to exist any Liens, other than Permitted Liens.
Section 8.7Restricted Payments. No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to, directly or indirectly,
(a)declare or pay any dividend or make any other payment or distribution (or interest on any unpaid dividend, charge, fee or other distribution) (whether in cash or in kind) on account of any Credit Party’s or any of their Subsidiaries’ Equity Interests (including, without
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limitation, any payment in connection with any merger or consolidation involving any Credit Party or any of their Subsidiaries) or to the direct or indirect holders of any Credit Party’s or any of their Subsidiaries’ Equity Interests in their capacity as such, except that:
        (i)    the Credit Parties may pay dividends (A) solely in common stock and (B) with the prior written consent of the Agent (not to be unreasonably withheld, conditioned or delayed) in cash to the holders of their common Equity Interests; provided, that with respect to this clause (B), no Event of Default (or event or circumstance that, with the passage of time, the giving of notice, or both, would become an Event of Default) has occurred and is continuing or would arise as a result of such payment;
        (ii)    the Borrowers may make monthly distributions of funds to Elevate Credit commencing on the fifth (5th) Business Day after the financial statements under Section 8.2(a) shall have been delivered for the applicable month; provided, that each of the following conditions are satisfied:
        (A)    no Event of Default (or event or circumstance that, with the passage of time, the giving of notice, or both, would become an Event of Default) has occurred and is continuing or would arise as a result of such payment; and
        (B)    after giving effect to such payment, (1) the Credit Parties are in pro forma compliance with the covenant set forth in Section 8.1(a) and (2) the Debt-to-Equity Ratio of the Borrowers shall not be more than 9-to-1; and
        (iii)    the Elevate Credit Subsidiaries may make distributions or remit payments received on account of the undivided portion of the Consumer Loans to further the purposes of, and in compliance with, the Transaction Documents.
(b)repurchase, redeem, repay, defease, retire, distribute any dividend or share premium reserve or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation involving any Credit Party or any of their Subsidiaries) any Equity Interests of any Credit Party or any of their Subsidiaries or any direct or indirect parent of any Credit Party or any of their Subsidiaries except in connection with the termination of an employee’s employment with any Credit Party; provided, that each of the following conditions are satisfied:
(i)no Event of Default (or event or circumstance that, with the passage of time, the giving of notice, or both, would become an Event of Default) has occurred and is continuing or would arise as a result of such repurchase, redemption, repayment, defeasance, retirement, distribution, acquisition or retirement for value of any such Equity Interests;
(ii)after giving effect to such repurchase, redemption, repayment, defeasance, retirement, distribution, acquisition or retirement for value of any such Equity Interests,
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(A) the Credit Parties are in pro forma compliance with the covenants set forth in Section 8.1 and (B) the Debt-to-Equity Ratio of the Borrowers shall not be more than 9-to-1; and
(iii)except for any share buyback program, the aggregate amount of all such repurchases, redemptions, repayments, defeasances, retirements, distributions, acquisitions or retirements for value of any such Equity Interests shall not exceed $1,000,000 in any Fiscal Year;
(c)make any payment (including by setoff) on or with respect to, accelerate the maturity of, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness of any Credit Party or any of their Subsidiaries (or set aside or escrow any funds for any such purpose), except for (i) payments of principal, interest and other amounts constituting Obligations and (ii) subject to the terms of applicable subordination terms, if any, regularly scheduled non accelerated payments of principal, interest and other amounts under Permitted Indebtedness; or
(d)pay any management, consulting or similar fees to any Affiliate of any Credit Party or to any officer, director or employee of any Credit Party or any Affiliate of any Credit Party, except for the avoidance of doubt, payments of salaries, advances, bonuses (including pre-funded bonuses) or stock incentives of employees of the Credit Parties in the ordinary course of business.
Section 8.8Mergers; Acquisitions; Asset Sales. No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to, directly or indirectly, without Agent’s prior written consent, (a) be a party to any merger or consolidation, or Acquisition or (b) consummate any Asset Sale other than a Permitted Disposition. For the avoidance of doubt, notwithstanding anything to the contrary contained herein or in any other Transaction Document to the contrary, (i) no Credit Party shall enter into (or agree to enter into) any Division/Series Transaction, or permit any of its Subsidiaries to enter into (or agree to enter into), any Division/Series Transaction and (ii) none of the provisions in this Agreement or any other Transaction Document shall be deemed to permit any Division/Series Transaction without the prior written consent of the Agent.
Section 8.9No Further Negative Pledges. No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to, enter into, assume or become subject to any agreement prohibiting or otherwise restricting the existence of any Lien upon any of their properties or assets in favor of Agent or the Holders as set forth under the Transaction Documents, whether now owned or hereafter acquired, or requiring the grant of any security for any obligation if such property or asset is given as security under the Transaction Documents, except in connection with any Permitted Liens or any document or instrument governing any Permitted Liens, provided that any such restriction contained therein relates only to the property or asset subject to such Permitted Liens (or proceeds thereof).
Section 8.10Affiliate Transactions. No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to, directly or indirectly, enter into or permit to exist any transaction (including the purchase, sale, lease or exchange of any property or the rendering of
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any service) with any Affiliate of any Credit Party or any of their Subsidiaries, unless such transaction is on terms that are no less favorable to such Credit Party or such Subsidiary, as the case may be, than those that might be obtained at the time from a Person who is not an Affiliate and, unless the same shall not require payments thereunder in an amount exceeding $500,000 in the aggregate, are fully disclosed in writing to Agent prior to consummation thereof.
Section 8.11Insurance.
(a)The Credit Parties shall keep the Collateral properly housed and insured against loss or damage by fire, theft, explosion, sprinklers, collision (in the case of motor vehicles) and such other risks as are customarily insured against by Persons engaged in businesses similar to that of the Credit Parties, with such companies, in such amounts, with such deductibles and under policies in such form as shall be reasonably satisfactory to the Agent. Certificates of insurance or, if requested by the Agent, original (or certified) copies of such policies of insurance have been or shall be, no later than the Fifth Restatement Closing Date, delivered to the Agent, and shall contain an endorsement, in form and substance reasonably acceptable to Agent, showing loss under such insurance policies payable to the Agent, for the benefit of the Holders. Such endorsement, or an independent instrument furnished to the Agent, shall provide that the insurance company shall give the Agent at least thirty (30) days’ written notice before any such policy of insurance is altered or canceled and that no act, whether willful or negligent, or default of a Credit Party or any other Person shall affect the right of the Agent to recover under such policy of insurance in case of loss or damage. Each Credit Party hereby directs all insurers under all policies of insurance to pay all proceeds payable thereunder directly to the Agent. Each Credit Party irrevocably makes, constitutes and appoints the Agent (and all officers, employees or agents designated by the Agent) as such Person’s true and lawful attorney (and agent-in-fact) for the purpose of making, settling and adjusting claims under such policies of insurance, endorsing the name of such Person on any check, draft, instrument or other item of payment for the proceeds of such policies of insurance and making all determinations and decisions with respect to such policies of insurance, provided however, that if no Event of Default shall have occurred and be continuing, such Credit Party may make, settle and adjust claims involving less than $100,000 in the aggregate without the Agent’s consent.
(b)The Credit Parties shall maintain, at their expense, such public liability and third-party property damage insurance as is customary for Persons engaged in businesses similar to that of the Credit Parties with such companies and in such amounts with such deductibles and under policies in such form as shall be reasonably satisfactory to the Agent in light of such customs and certificates of insurance or, if requested by the Agent, original (or certified) copies of such policies have been or shall be, no later than the Fifth Restatement Closing Date, delivered to the Agent; each such policy shall contain an endorsement showing the Agent as additional insured thereunder and providing that the insurance company shall give the Agent at least thirty (30) days’ written notice before any such policy shall be altered or canceled.
(c)If any Credit Party at any time or times hereafter shall fail to obtain or maintain any of the policies of insurance required above or to pay any premium relating thereto, then the Agent, without waiving or releasing any obligation or default by the Credit Parties
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hereunder, may (but shall be under no obligation to) obtain and maintain such policies of insurance and pay such premiums and take such other actions with respect thereto as the Agent reasonably deems advisable. Such insurance, if obtained by the Agent, may, but need not, protect each Credit Parties’ interests or pay any claim made by or against any Credit Party with respect to the Collateral. Such insurance may be more expensive than the cost of insurance the Credit Parties may be able to obtain on their own and may be cancelled only upon the Credit Parties providing evidence that they have obtained the insurance as required above. All sums disbursed by the Agent in connection with any such actions, including, without limitation, court costs, expenses, other charges relating thereto and reasonable attorneys’ fees, shall constitute part of the Obligations due and owing hereunder, shall be payable on demand by the Credit Parties to the Agent and, until paid, shall bear interest at the Default Rate.
Section 8.12Corporate Existence and Maintenance of Properties. Each Credit Party shall, and each Credit Party shall cause each of its Subsidiaries to, maintain and preserve (a) its existence and good standing in the jurisdiction of its organization and (b) its qualification to do business and good standing in each jurisdiction where the nature of its business makes such qualification necessary (other than such jurisdictions in which the failure to be so qualified or in good standing could not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect). Each Credit Party shall, and each Credit Party shall cause each of its Subsidiaries to, maintain or cause to be maintained in good repair, working order and condition, ordinary wear and tear excepted, all material properties used or useful in the business of the Credit Parties and their Subsidiaries and from time to time will make or cause to be made all appropriate repairs, renewals and replacements thereof. The Credit Parties shall take all reasonable steps and actions from time to time reasonably necessary or desirable to preserve, protect and defend all of their rights, title and interest in, to and under each of the Bank Transaction Documents.
Section 8.13Non-circumvention. Each Credit Party hereby covenants and agrees that neither any of the Credit Parties nor any of their Subsidiaries will, by amendment of its certificate of incorporation, certificate of formation, limited liability company agreement, bylaws, or other governing documents, or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Agreement or the other Transaction Documents, and will at all times in good faith carry out all of the provisions of this Agreement and the other Transaction Documents and take all reasonable action as may be required to protect the rights of the Agent, the Lenders and the Holders.
Section 8.14Change in Business; Change in Accounting; Centre of Main Interest; Elevate Credit Parent. The Credit Parties shall not engage in any line of business other than the businesses engaged in on the Fifth Restatement Closing Date and activities reasonably incident thereto. The Credit Parties shall not (a) make any significant change in accounting treatment or reporting practices, except as required by GAAP, (b) change their Fiscal Year; method for determining fiscal quarters of any Credit Party or of any Subsidiary of any Credit Party or change their Accounting Reference Date, (c) change their name as it appears in official filings in
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its jurisdiction of organization or (d) change their jurisdiction of organization, in the case of clauses (c) and (d), without providing written notice to Agent no later than thirty (30) days following the occurrence of any such change. For the purposes of The Council of the European Union Regulation No. 1346/2000 on Insolvency Proceedings, each UK Credit Party shall ensure that its centre of main interest (as that term is used in Article 3(1) of such regulation) is situated in England and Wales and that it has no “establishment” (as that term is used in Article 2(h) of such regulation) in any other jurisdiction. Elevate Credit Parent shall not trade, carry on any business, own any assets or incur any liabilities except for:
(a)the provision of administrative services (excluding treasury services) to its Subsidiaries of a type customarily provided by a holding company to its Subsidiaries;
(b)ownership of shares in its Subsidiaries, intra-company debit balances, intra-company credit balances and other credit balances in bank accounts, cash and Cash Equivalent Investments but only if those shares, credit balances, cash and Cash Equivalent Investments constitute Collateral; and
(c)any liabilities under the Transaction Documents and Bank Transaction Documents to which it is a party and professional fees and administration costs in the ordinary course of business as a holding company.
Section 8.15U.S. Real Property Holding Corporation. None of the Credit Parties shall become a U.S. real property holding corporation or permit or cause its shares to be U.S. real property interests, within the meaning of Section 897 of the Code.
Section 8.16Compliance with Laws. No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to, fail to (a) comply in all material respects with the requirements of all applicable laws, rules, regulations and orders of any Governmental Authority (including, without limitation, all Environmental Laws and the Requirements) and (b) preserve and maintain in full force and effect all material rights, privileges, qualifications, permits, licenses and franchises necessary in the normal conduct of its business.
Section 8.17Additional Collateral. With respect to any Property acquired after the Fifth Restatement Closing Date by any Credit Party as to which the Agent, for the benefit of the Holders does not have a perfected Lien, such Credit Party shall promptly (i) execute and deliver to the Agent, for the benefit of the Holders or its agent such amendments to the Security Documents or such other documents as the Agent, for the benefit of the Holders deems necessary or advisable to grant to the Agent, for the benefit of the Holders, a security interest in such Property and (ii) take all other actions necessary or advisable to grant to the Agent, for the benefit of the Holders, a perfected first priority (subject to Permitted Liens) security interest in such Property, including, without limitation, the filing of UCC financing statements in such jurisdictions as may be required by the Security Documents or by law or as may be requested by the Agent. If at any time during the existence of an Event of Default, Agent seeks to collect or liquidate Collateral, the Credit Parties will use their best efforts to assist Agent in any such efforts, including effectuating a sale of such Collateral.
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Section 8.18Audit Rights; Field Exams; Appraisals; Meetings; Books and Records.
(a)The Credit Parties shall, upon reasonable notice and during reasonable business hours (except during the continuance of an Event of Default when no such limitations shall apply), subject to reasonable safety and security procedures, and at the Credit Parties’ sole cost and expense, permit the Agent and each Lender and Holder (or any of their respective designated representatives) to visit and inspect any of the properties of any Credit Party or any of their Subsidiaries, to examine the books of account of any Credit Party or any of their Subsidiaries (and to make copies thereof and extracts therefrom), and to discuss the affairs, finances and accounts of the Credit Parties and their Subsidiaries, and to be advised as to the same by their respective officers, and to conduct examinations and verifications (whether by internal commercial finance examiners or independent auditors), all at such reasonable times and intervals as the Agent, Lenders and the Holders may reasonably request. In addition to the foregoing, Agent shall have the right, at the joint and several expense of the Credit Parties, to conduct a legal and/or regulatory review regarding the compliance of any Credit Parties, as well as the form of Consumer Loan Agreement (and any other agreements, certificates, instruments and documents related thereto), with all applicable laws, and any Credit Party shall cooperate with Agent and its internal and/or outside legal counsel or other third party advisors in such review. Except during the continuance of an Event of Default, the Agent shall not exercise any of their rights pursuant to this Section 8.18(a) more than once per calendar year.
(b)The Credit Parties shall, upon reasonable notice and during reasonable business hours, subject to reasonable safety and security procedures, and at the Credit Parties’ sole cost and expense, permit the Agent (or any of its designated representatives) and each Lender and Holder to conduct field exams of the Collateral, all at such reasonable times and intervals as the Agent may reasonably request. Except during the continuance of an Event of Default, the Agent shall not exercise any of their rights pursuant to this Section 8.18(b) more than once per calendar year.
(c)The Credit Parties shall, at Agent’s request (which shall be made no more frequently than once during each calendar year unless an Event of Default shall have occurred and be continuing) and upon reasonable notice, and at the Credit Parties’ sole cost and expense, obtain an appraisal of the Collateral from an independent appraisal firm reasonably satisfactory to Agent.
(d)The Credit Parties will, upon the request of the Agent, participate in a meeting of the Agent, Lenders and the Holders twice during each Fiscal Year to be held at the Credit Parties’ corporate offices (or at such other location as may be agreed to by the Borrower Representative and the Agent) at such time as may be agreed to by the Borrower Representative and the Agent.
(e)The Credit Parties shall, at the Credit Parties’ sole cost and expense, make all books and records of the Credit Parties available for review electronically by the Agent upon Agent’s request and subject to applicable Requirements with respect to disclosure of Customer Information.
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Section 8.19Additional Issuances of Debt Securities; Right of First Refusal on New Indebtedness. So long as any Notes are outstanding (or, solely if the Obligations are paid in full in cash with proceeds from the issuance of any Equity Interests of any Credit Party or any of their Subsidiaries, until the date that is twelve (12) months after the date such Obligations are paid in full), none of the Credit Parties nor any of their Subsidiaries shall, directly or indirectly, offer, sell, grant any option to purchase, or otherwise dispose of (or announce any offer, sale, grant or any option to purchase or other disposition of) any of its debt securities or Equity Interests (including any preferred stock or other instrument or security) that may, in accordance with the terms thereof, be, at any time during its life, and under any circumstance, convertible into or exchangeable or exercisable for Indebtedness or debt securities, but excluding Permitted Indebtedness, without the prior written consent of the Agent; provided, that, if any Credit Party seeks to incur additional Indebtedness from time to time from any third-party, then in each such case, the Agent and its designees shall have a right of first refusal (but not an obligation) to provide such additional Indebtedness on the same terms and conditions as would be provided by such third-parties. The Borrower Representative will give Agent written notice (a “ROFR Notice”) describing the additional Indebtedness and the terms and conditions thereof (collectively, the “New Indebtedness Opportunity”). The Agent and its designees shall have thirty (30) days from the date of the Agent’s receipt of a ROFR Notice to agree to provide such additional Indebtedness pursuant to the New Indebtedness Opportunity. If the Agent fails to exercise such right of first refusal within said thirty (30)-day period with respect to the New Indebtedness Opportunity, then the New Indebtedness Opportunity may be offered to such third-party upon the identical terms and conditions as are specified in the applicable ROFR Notice; provided, that in the event the New Indebtedness Opportunity has not been consummated by the applicable third-party within the one hundred (100)-day period from the date of the ROFR Notice, no New Indebtedness Opportunity may be offered by the Credit Parties to any third-party without first offering such New Indebtedness Opportunity to the Agent in the manner provided above.
Section 8.20Post-Closing Obligations.
(a)Within ninety (90) days after the Original Restatement Closing Date (or such later date as shall be acceptable to the Agent in its sole discretion), confirmation, together with relevant supporting documents, that the Quoted Eurobond Listing has taken place;
(b)The Credit Parties shall, (i) in a manner satisfactory to the Agent, cooperate with and assist the Agent, the Lenders and their respective attorneys, officers, employees, representatives, consultants and agents (collectively, the “Reviewing Parties” and each, a “Reviewing Party”) in connection with any Reviewing Party’s regulatory review and due diligence of the Credit Parties’ Program in each state or foreign jurisdiction in which any Credit Party originates or purchases Consumer Loans and/or Credit Card Receivables (including participation interests therein), (ii) review and consider in good faith any issues raised by, or comments, recommendations or guidance from, any Reviewing Party with respect to any such lending program (such issues, comments, recommendations and guidance, collectively, the “Diligence Issues”) and (iii) within 90 days (or such longer period as may be agreed to by the Agent in its sole discretion) of any Credit Party’s receipt of written notice of any Diligence
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Issues from a Reviewing Party, resolve or address any such Diligence Issues, in each case, in a manner satisfactory to the Agent;
(c)The Credit Parties shall deliver, or cause to be delivered to the Agent, within sixty (60) days after the Fifth Restatement Closing Date (or such later date as shall be acceptable to the Agent in its sole discretion), deposit account control agreements executed by the applicable Credit Party and each depository institution for which such Credit Party maintains deposit and other accounts, each in form and substance reasonably satisfactory to the Agent in its sole discretion, covering all deposit accounts and other accounts maintained at such depository institution that are not currently subject to deposit account control agreements in favor of the Agent;
(d)The Credit Parties shall deliver, or cause to be delivered to the Agent, within thirty (30) days after the Fifth Restatement Closing Date (or such later date as shall be acceptable to the Agent in its sole discretion), Intellectual Property Security Agreements executed by the applicable Credit Party covering all federally-registered Intellectual Property Rights that are not currently subject to an Intellectual Property Security Agreement in favor of the Agent;
(e)The Credit Parties shall deliver, or cause to be delivered to the Agent, prior to purchasing any Consumer Loans (or participation interests in Consumer Loans) pursuant to any Bank Transaction Documents (or such later date as shall be acceptable to the Agent in its sole discretion), a revised form of Consumer Loan Agreement to be used under such Bank Transaction Documents which provides that (i) all obligations thereunder are “registered obligations” and all instruments issued thereunder (if any) shall be at all times maintained in “registered form” within the meaning of Sections 163(f), 871(h)(2) and 881(c)(2) of the Code and any related Treasury regulations promulgated thereunder and (ii) the first page thereof shall have the following legend: “THIS AGREEMENT SHALL NOT CONSTITUTE A “NEGOTIABLE INSTRUMENT””, which form shall be reasonably satisfactory to the Agent and its counsel; and
(f)The Credit Parties shall deliver, or cause to be delivered to the Agent, within thirty (30) days after the Fifth Restatement Closing Date (or such later date as shall be acceptable to the Agent in its sole discretion), updated insurance certificates and updated insurance endorsements with respect to the applicable Credit Parties, in each case, in form and substance reasonably satisfactory to Agent and evidencing the insurance policies and endorsements thereto required to be maintained in accordance with Section 8.11.
Section 8.21Use of Proceeds. The Credit Parties will use the proceeds from the sale of (i) each Note solely (A) to fund certain fees and expenses associated with the consummation of the transactions contemplated by this Agreement and (B) to originate Consumer Loans (other than so-called “payday loans”) that are Eligible US Consumer Loans or Eligible UK Consumer Loans and to purchase participation interests under the applicable Bank Transaction Documents in Consumer Loans (other than so-called “payday loans”) that are Eligible US Consumer Loans or Eligible UK Consumer Loans, in each case made to residents of any State of the United States or residents of the United Kingdom (provided, that in no event shall proceeds of the US Term
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Notes, or the Fourth Tranche US Last Out Term Notes be used to originate or purchase Consumer Loans (or participation interests therein) to residents of the United Kingdom), in each case, for which the Credit Parties shall have become duly-licensed to originate such Consumer Loans in accordance with all applicable Requirements or for which the applicable Bank party to the applicable Bank Transaction Documents shall have become duly licensed to originate such Consumer Loans in accordance with all applicable Requirements, (ii) each US Term Note solely, in addition to permitted uses provided above in clause (i), for Today Card to purchase participation interests in Credit Card Receivables under, and in accordance with, the CCB Participation Agreement that are Eligible Credit Card Receivables, (iii) solely with regard to the proceeds of the Fourth Tranche US Last Out Term Notes, also for direct marketing expenses relating to the making of Consumer Loans and (iv) subject to excess availability under this facility, to transfer funds as permitted under this Agreement.
Section 8.22Fees, Costs and Expenses. The Credit Parties, on behalf of themselves and the other Credit Parties, shall jointly and severally reimburse the Lenders and the Holders or their designee(s) for reasonable and documented costs and expenses incurred in connection with the transactions contemplated by the Transaction Documents (including reasonable legal fees and disbursements in connection therewith, documentation and implementation of the transactions contemplated by the Transaction Documents and due diligence in connection therewith), subject to the limitations set forth in Section 13.1 hereof, which amounts shall be paid by the Credit Parties to the Agent, for the benefit of itself and the Lenders and the Holders, on the Fifth Restatement Closing Date. In addition, the Credit Parties shall, within five (5) Business Days of receiving a request from the Agent therefor, reimburse the Agent for any additional reasonable legal fees incurred post-closing in connection with perfecting the Agent’s security interests and any additional filing or recording fees in connection therewith. The Credit Parties shall be responsible for the payment of, and shall pay, any placement agent’s fees, financial advisory fees, or broker’s commissions relating to or arising out of the transactions contemplated hereby, and shall hold the Agent, each Holder and each Lender harmless against, any liability, loss or expense (including, without limitation, reasonable attorney’s fees and out-of-pocket expenses) arising in connection with any claim relating to any such payment.
Section 8.23Modification of Organizational Documents and Certain Documents. The Credit Parties shall not, without the prior written consent of the Agent, (i) permit the charter, by-laws or other organizational documents of any Credit Party, or any Material Contract, to be amended or modified, (ii) amend, supplement in a manner adverse to the Agent, any Lender or any Holder or otherwise modify, or waive any material rights, claims or remedies under, any of the Consumer Loan Agreements or Credit Card Agreements, as applicable, except with respect to a settlement or charge off thereunder in the ordinary course of business, (iii) amend, supplement or otherwise modify any Bank Transaction Documents in a manner materially adverse to Agent, any Lender or any Holder, or waive any material rights, claims or remedies under any Bank Transaction Documents except with respect to a settlement or charge off thereunder in the ordinary course of business or (iv) amend, supplement or otherwise modify the CCB Participation Agreement in a manner materially adverse to Agent, any Lender or any Holder, or waive any material rights, claims or remedies under the CCB Participation Agreement except with respect to a settlement or charge off thereunder in the ordinary course of business.
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Section 8.24Joinder. The Credit Parties shall notify the Agent in writing within the earlier of: (i) thirty (30) days of the formation or acquisition of any Subsidiaries; or (ii) the making or purchase of any Consumer Loans or Credit Card Receivables (or participation interests therein) by any such newly formed or acquired Subsidiaries. For any Subsidiaries formed or acquired after the Fifth Restatement Closing Date, the Credit Parties shall at their own expense, within the time period set forth in the immediately preceding sentence, cause each such Subsidiary (provided, in the case of Foreign Subsidiaries, solely with respect to such Foreign Subsidiaries’ guaranty of the Obligations of the US Term Note Borrowers and/or the US Last Out Term Note Borrower, no 956 Impact would arise as a result thereof) to execute an instrument of joinder in the form attached hereto as Exhibit G (a “Joinder Agreement”), obligating such Subsidiary to any or all of the Transaction Documents deemed necessary or appropriate by the Agent and cause the applicable Person that owns the Equity Interests of such Subsidiary to pledge to the Holders 100% of the Equity Interests owned by it of each such Subsidiary formed or acquired after the Fifth Restatement Closing Date and execute and deliver all documents or instruments required thereunder or appropriate to perfect the security interest created thereby (provided that with respect to any First Tier Foreign Subsidiary, solely with respect to such Foreign Subsidiaries’ guaranty of the Obligations of the US Term Note Borrowers and/or the US Last Out Term Note Borrower, if a 956 Impact exists such pledge shall be limited to sixty-five percent (65%) of such Foreign Subsidiary’s outstanding voting Equity Interests and one hundred percent (100%) of such Foreign Subsidiary’s outstanding non-voting Equity Interests). In the event a Person becomes a Guarantor (a “New Guarantor”) pursuant to the Joinder Agreement, upon such execution the New Guarantor shall be bound by all the terms and conditions hereof and the other Transaction Documents to the same extent as though such New Guarantor had originally executed the Transaction Documents. The addition of a New Guarantor shall not in any manner affect the obligations of the other Credit Parties hereunder or thereunder. Each Credit Party, each Lender, each Holder and the Agent acknowledges that the schedules and exhibits hereto or thereto may be amended or modified in connection with the addition of any New Guarantor to reflect information relating to such New Guarantor. Compliance with this Section 8.24 shall not excuse any violation of Section 8.8 for failing to obtain Lender’s prior consent to a merger, consolidation or Acquisition. A “956 Impact” will be deemed to exist to the extent the issuance of a guaranty by, grant of a Lien by, or pledge of greater than two-thirds of the voting Equity Interests of, a Foreign Subsidiary, solely with respect to such Foreign Subsidiary’s guaranty of the Obligations of the US Term Note Borrowers and/or the US Last Out Term Note Borrower, would result in material incremental income tax liability under Section 956 of the Code, taking into account actual anticipated repatriation of funds, foreign tax credits and other relevant factors.
Section 8.25Investments. No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to, make or permit to exist any Investment in any other Person, except the following:
(a)Cash Equivalent Investments, to the extent the Agent has a first priority security interest therein;
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(b)bank deposits in the ordinary course of business, to the extent the Agent has a first priority security interest therein;
(c)Investments in securities of account debtors received pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of such account debtors;
(d)Investments owned by the Credit Parties and their Subsidiaries on the Fifth Restatement Closing Date as set forth on Schedule 8.25;
(e)(i) Domestic Credit Parties may maintain Investments in Foreign Subsidiaries in amounts not to exceed the outstanding amounts of such Investments as of the Fifth Restatement Closing Date plus additional Investments in Foreign Subsidiaries after the Fifth Restatement Closing Date to the extent expressly approved by Agent in advance in writing; provided, if the Investments described in the foregoing clause (i) are evidenced by notes, such notes shall be pledged to Agent, for the benefit of the Lenders, and have such terms as Agent may reasonably require; and (ii) Foreign Subsidiaries may make Investments in other Foreign Subsidiaries;
(f)Investments constituting cash equity contributions by Elevate Credit in the other Borrowers, including, without limitation, cash equity contributions made in order to satisfy the LTV Covenant Cure Obligation, and Investments by Elevate Credit in its other Subsidiaries that are Credit Parties;
(g)nvestments made by the Credit Parties (other than Elevate Credit and Elevate Credit Parent) constituting Consumer Loans to residents of the United States and the United Kingdom;
(h)Investments made by the Credit Parties constituting the acquisition of Consumer Loans to residents of the United States or participation interests in such Consumer Loans, in each case, pursuant to the applicable Bank Transaction Documents; and
(i)Investments made by Today Card constituting the acquisition of participation interests in Credit Card Receivables pursuant to the CCB Participation Agreement.

Section 8.26Further Assurances. At any time or from time to time upon the request of the Agent, each Credit Party will, at its expense, promptly execute, acknowledge and deliver such further documents and do such other acts and things as the Agent may reasonably request in order to effect fully the purposes of the Transaction Documents. In furtherance and not in limitation of the foregoing, each Credit Party shall take such actions as the Agent may reasonably request from time to time to ensure that the Obligations are guaranteed by all Subsidiaries (including the US Term Note Borrowers with respect to the Obligations of the UK Borrower and each US Term Note Borrower with respect to the Obligations of each other US Term Note Borrower) of the Credit Parties and secured by substantially all of the assets of the Credit Parties and their Subsidiaries (in each case provided, in the case of Foreign Subsidiaries, solely with respect to such Foreign Subsidiaries’ guaranty of the Obligations of the US Term Note Borrowers and/or the US Last Out Term Note Borrower, no 956 Impact would arise as a result thereof).
Section 8.27Pensions Schemes.
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(a)UK Borrower shall ensure that all pension schemes operated by or maintained for the benefit of any UK Credit Party and/or any of their employees are fully funded based on the statutory funding objective under sections 221 and 222 of the Pensions Act 2004 and that no action or omission is taken by any UK Credit Party in relation to such a pension scheme which has or is reasonably likely to have a Material Adverse Effect (including, without limitation, the termination or commencement of winding-up proceedings of any such pension scheme or any UK Credit Party ceasing to employ any member of such a pension scheme).
(b)UK Borrower shall ensure that none of its Subsidiaries is or has been at any time an employer (for the purposes of sections 38 to 51 of the Pensions Act 2004) of an occupational pension scheme which is not a money purchase scheme (both terms as defined in the Pension Schemes Act 1993) or “connected” with or an “associate” of (as those terms are used in sections 38 or 43 of the Pensions Act 2004) such an employer.

(c)UK Borrower shall deliver to the Agent at such times as those reports are prepared in order to comply with the then current statutory or auditing requirements (as applicable either to the trustees of any relevant schemes or to Elevate Credit), actuarial reports in relation to all pension schemes mentioned in paragraph (a) above.

(d)UK Borrower shall promptly notify the Agent of any material change in the rate of contributions to any pension schemes mentioned in (a) above paid or recommended to be paid (whether by the scheme actuary or otherwise) or required (by law or otherwise).

Section 8.29Backup Servicer. At any time or from time to time upon the request of the Agent, the Borrowers shall appoint, at Borrowers’ sole expense, a Backup Servicer that is satisfactory to the Agent in Agent’s sole discretion and shall enter into a Backup Servicing Agreement that is satisfactory (including with respect to the Credit Parties’ obligations to cooperate with such Backup Servicer and provide any data and other information and documents, including data tapes, to such Backup Servicer to allow Backup Servicer to perform its duties) to the Agent in Agent’s sole discretion.
Section 9.29Claims Escrow Account.
(a)Within two (2) Business Days on or after the date in which (i) all Obligations not relating to any pending claim that are due to Lenders and Holders have been paid in full and (ii) the Credit Parties are aware of a pending claim, the Borrowers shall establish and maintain a deposit account at a bank reasonable acceptable to Agent, in the form of time deposit or demand account (the “Claims Escrow Account”). Such Claims Escrow Account shall be a Blocked Account. The Borrowers shall deposit in the Claims Escrow Account, no later than one (1) Business Day following receipt, fifty percent (50%) of the collections received by Borrowers from all of the Consumer Loans and Credit Card Receivables until the Claims Escrow Account Funding Condition is satisfied. After a Claims Escrow Account is established pursuant to this Section 8.29 and subject to the rights of the parties under the Intercreditor Agreement, the Borrowers shall be permitted to remit, prior to the satisfaction of the Claims Escrow Account Funding Condition, fifty percent (50%) of the collections remaining after remitting to the Claims
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Escrow Account and, on and after the satisfaction of the Claims Escrow Account Funding Condition, one hundred percent (100%) of any collections to the applicable Elevate Credit Subsidiary in accordance with the applicable contractual terms between the applicable Borrower and such Elevate Credit Subsidiary. For the avoidance of doubt and notwithstanding Section 12.14, subject to the satisfaction of the foregoing requirements this Section 8.29(a), the Agent shall not seek to limit the ability of the Borrowers to remit funds to the Elevate Credit Subsidiary under this Section 8.29(a) and such amounts shall be released without restriction from the Lien of the Financing Agreement.
(b)In the sole discretion of the Agent, funds deposited in the Claims Escrow Account may be used to satisfy any Obligations then due to Lenders, Holders and/or Agent.

Article 9
CROSS GUARANTY

Section 9.1Cross-Guaranty. Each Guarantor (including, for the avoidance of doubt, the US Term Note Borrower and the US Last Out Term Note Borrower with respect to the Obligations of the UK Borrower and each US Term Note Borrower with respect to the Obligations of each other US Term Note Borrower), jointly and severally, hereby absolutely and unconditionally guarantees to the Agent, the Lenders, the Holders and their respective successors and assigns the full and prompt payment (whether at stated maturity, by acceleration or otherwise) and performance of, all Obligations (and for the avoidance of doubt, each Borrower, in its capacity as a Guarantor, so guarantees the payment and performance of the Obligations of each other Borrower under each Note). Each Guarantor agrees that its guaranty obligation hereunder is a continuing guaranty of payment and performance and not of collection, that its obligations under this ARTICLE 9 shall not be discharged until payment and performance, in full, of the Obligations under the Transaction Documents has occurred and all commitments (if any) to lend hereunder have been terminated, and that its obligations under this ARTICLE 9 shall be absolute and unconditional, irrespective of, and unaffected by:
(a)the genuineness, validity, regularity, enforceability or any future amendment of, or change in, this Agreement, any other Transaction Document or any other agreement, document or instrument to which any Credit Party is or may become a party;
(b)the absence of any action to enforce this Agreement (including this ARTICLE 9) or any other Transaction Document or the waiver or consent by the Agent, the Lenders or the Holders with respect to any of the provisions thereof;

(c)the Insolvency of any Credit Party or Subsidiary; or

(d)any other action or circumstances that might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor.
Each Guarantor shall be regarded, and shall be in the same position, as principal debtor with respect to the obligations guaranteed hereunder.
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Section 9.2Waivers by Guarantors. Each Guarantor expressly waives all rights it may have now or in the future under any statute, or at common law, or at law or in equity, or otherwise, to compel the Agent, the Lenders or the Holders to marshal assets or to proceed in respect of the obligations guaranteed hereunder against any other Credit Party or Subsidiary, any other party or against any security for the payment and performance of the obligations under the Transaction Documents before proceeding against, or as a condition to proceeding against, such Guarantor. It is agreed among each Guarantor that the foregoing waivers are of the essence of the transaction contemplated by this Agreement and the other Transaction Documents and that, but for the provisions of this ARTICLE 9 and such waivers, the Agent, the Lenders and the Holders would decline to enter into this Agreement.
Section 9.3Benefit of Guaranty. Each Guarantor agrees that the provisions of this ARTICLE 9 are for the benefit of the Agent, the Lenders, the Holders and their respective successors, transferees, endorsees and assigns, and nothing herein contained shall impair, as between any other Credit Party, on the one hand, and the Agent, the Lenders and the Holders, on the other hand, the obligations of such other Credit Party under the Transaction Documents.
Section 9.4Waiver of Subrogation, Etc. Notwithstanding anything to the contrary in this Agreement or in any other Transaction Document, and except as set forth in Section 9.7, each Guarantor hereby expressly and irrevocably waives any and all rights at law or in equity to subrogation, reimbursement, exoneration, contribution, indemnification or set off and any and all defenses available to a surety, guarantor or accommodation co-obligor. Each Guarantor acknowledges and agrees that this waiver is intended to benefit the Agent, the Lenders and the Holders and shall not limit or otherwise affect such Guarantor’s liability hereunder or the enforceability of this ARTICLE 9, and that the Agent, the Lenders, the Holders and their respective successors and assigns are intended third party beneficiaries of the waivers and agreements set forth in this Section 9.4.
Section 9.5Election of Remedies. If the Agent, the Lenders or the Holders may, under applicable law, proceed to realize their benefits under any of the Transaction Documents, the Agent, any of the Lenders or any of the Holders may, at their sole option, determine which of their remedies or rights they may pursue without affecting any of their rights and remedies under this ARTICLE 9. If, in the exercise of any of their rights and remedies, any of the Agent, the Lenders or the Holders shall forfeit any of their rights or remedies, including their right to enter a deficiency judgment against any Credit Party or any other Person, whether because of any applicable laws pertaining to “election of remedies” or the like, each Credit Party hereby consents to such action by the Agent, such Lenders or such Holders, as applicable, and waives any claim based upon such action, even if such action by the Agent, such Lenders or such Holders shall result in a full or partial loss of any rights of subrogation that any Credit Party might otherwise have had but for such action by the Agent, such Lenders or such Holders. Any election of remedies that results in the denial or impairment of the right of the Agent, the Lenders or the Holders to seek a deficiency judgment against any Credit Party shall not impair any other Credit Party’s obligation to pay the full amount of the Obligations under the Transaction Documents.
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Section 9.6Limitation. Notwithstanding any provision herein contained to the contrary, each Guarantor’s liability under this ARTICLE 9 (which liability is in any event in addition to amounts for which Credit Parties are primarily liable under the Transaction Documents) shall be limited to an amount not to exceed as of any date of determination the greater of:
(a)the net amount of all amounts advanced to such Guarantor under this Agreement or otherwise transferred to, or for the benefit of, such Guarantor (including any interest and fees and other charges); and
(b)the amount that could be claimed by the Agent, the Lenders and the Holders from such Guarantor under this ARTICLE 9 without rendering such claim voidable or avoidable under Section 548 of Chapter 11 of the Bankruptcy Code or under any applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance Act or similar statute or common law after taking into account, among other things, such Guarantor’s right of contribution and indemnification from each other Credit Party under Section 9.7.

Section 9.7Contribution with Respect to Guaranty Obligations.
(a)To the extent that any Guarantor shall make a payment under this ARTICLE 9 of all or any of the Obligations under the Transaction Documents (other than financial accommodations made to that Guarantor for which it is primarily liable) (a “Guarantor Payment”) that, taking into account all other Guarantor Payments then previously or concurrently made by any other Guarantor, exceeds the amount that such Guarantor would otherwise have paid if each Guarantor had paid the aggregate Obligations under the Transaction Documents satisfied by such Guarantor Payment in the same proportion that such Guarantor’s “Allocable Amount” (as defined below) (as determined immediately prior to such Guarantor Payment) bore to the aggregate Allocable Amounts of each of the Guarantor as determined immediately prior to the making of such Guarantor Payment, then, following indefeasible payment in full in cash of the Obligations under the Transaction Documents and termination of the Transaction Documents (including all commitments (if any) to lend hereunder), such Guarantor shall be entitled to receive contribution and indemnification payments from, and be reimbursed by, each other Guarantor for the amount of such excess, pro rata based upon their respective Allocable Amounts in effect immediately prior to such Guarantor Payment.
(b)As of any date of determination, the “Allocable Amount” of any Guarantor shall be equal to the maximum amount of the claim that could then be recovered from such Guarantor under this ARTICLE 9 without rendering such claim voidable or avoidable under Section 548 of Chapter 11 of the Bankruptcy Code or under any applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance Act or similar statute or common law.

(c)This Section 9.7 is intended only to define the relative rights of Guarantor and nothing set forth in this Section 9.7 is intended to or shall impair the obligations of Credit Parties, jointly and severally, to pay any amounts as and when the same shall become due and payable in accordance with the terms of this Agreement, including Section 9.1. Nothing
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contained in this Section 9.7 shall limit the liability of any Credit Party to pay the financial accommodations made directly or indirectly to that Credit Party and accrued interest, fees and expenses with respect thereto for which such Credit Party shall be primarily liable.

(d)The parties hereto acknowledge that the rights of contribution and indemnification hereunder shall constitute assets of the Guarantor to which such contribution and indemnification is owing.
The rights of the indemnifying Guarantor against other Guarantor under this Section 9.7 shall be exercisable upon the full and indefeasible payment of the Obligations under the Transaction Documents and the termination of the Transaction Documents.
Section 9.8Liability Cumulative. The liability of each Guarantor under this ARTICLE 9 is in addition to and shall be cumulative with all liabilities of each other Credit Party to the Agent, the Lenders and the Holders under this Agreement and the other Transaction Documents to which such Credit Party is a party or in respect of any Obligations under the Transaction Documents or obligation of the other Credit Party, without any limitation as to amount, unless the instrument or agreement evidencing or creating such other liability specifically provides to the contrary.
Section 9.9Stay of Acceleration. If acceleration of the time for payment of any amount payable by the Credit Parties under this Agreement is stayed upon the insolvency, bankruptcy or reorganization of any of the Credit Parties, all such amounts otherwise subject to acceleration under the terms of this Agreement shall nonetheless be payable jointly and severally by the Credit Parties hereunder forthwith on demand by the Agent.
Section 9.10Benefit to Credit Parties. All of the Credit Parties and their Subsidiaries are engaged in related businesses and integrated to such an extent that the financial strength and flexibility of each such Person has a direct impact on the success of each other Person. Each Credit Party and each Subsidiary will derive substantial direct and indirect benefit from the purchase and sale of the Notes hereunder.
Section 9.11Indemnity. Each Guarantor irrevocably and unconditionally jointly and severally agrees with the Agent, each Lender and each Holder that if any obligation guaranteed by it is or becomes unenforceable, invalid or illegal, it will, as an independent and primary obligation, indemnify the Agent, such Lender and/or such Holder, as applicable, immediately on demand against any cost, loss or liability it incurs as a result of a Borrower or Guarantor not paying any amount which would, but for such unenforceability, invalidity or illegality, have been payable by it under any Transaction Document on the date when it would have been due. The amount payable by a Guarantor under this indemnity will not exceed the amount it would have had to pay under this ARTICLE 9 if the amount claimed had been recoverable on the basis of a guarantee.
Section 9.12Reinstatement. If any discharge, release or arrangement (whether in respect of the Obligations or any security for those Obligations or otherwise) is made by the Agent, a Lender and/or a Holder in whole or in part on the basis of any payment, security or other disposition which is avoided or must be restored in insolvency, liquidation, administration
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or otherwise, without limitation, then the liability of each Guarantor under this ARTICLE 9 will continue or be reinstated as if the discharge, release or arrangement had not occurred.
Section 9.13Guarantor Intent. Without prejudice to any other provision of this ARTICLE 9, each Guarantor expressly confirms that it intends that this guarantee shall extend from time to time to any (however fundamental) variation, increase, extension or addition of or to any of the Transaction Documents and/or any facility or amount made available under any of the Transaction Documents for the purposes of or in connection with any of the following: business acquisitions of any nature; increasing working capital; enabling investor distributions to be made; carrying out restructurings; refinancing existing facilities; refinancing any other indebtedness; making facilities available to new borrowers; any other variation or extension of the purposes for which any such facility or amount might be made available from time to time; and any reasonable and invoiced fees, costs and/or expenses associated with any of the foregoing.
Section 9.14General. Notwithstanding anything to the contrary set forth herein, the provisions of this ARTICLE 9 shall not be construed to (a) permit the Agent, Lenders or Holders to amend or otherwise modify this Agreement or the Obligations in a manner that would otherwise require the consent of the Borrowers pursuant to the express terms of this Agreement or (b) constitute a waiver by any Borrower of such Borrower’s rights or defenses under this Agreement in such Borrower’s capacity as a Borrower hereunder.
Article 10
RIGHTS UPON EVENT OF DEFAULT

Section 10.1Event of Default. Each of the following events shall constitute an “Event of Default”:
(a)any Credit Parties’ failure to pay to the Agent, the Holders and/or the Lenders any amount of (i) principal or redemptions when and as due under this Agreement or any Note (including, without limitation, the Credit Parties’ failure to pay any redemption payments or amounts hereunder or under any Note) or any other Transaction Document, or any other agreement, document, certificate or other instrument delivered in connection with the transactions contemplated hereby and thereby or (ii) interest (including interest calculated at the Default Rate), Late Charges, Prepayment Premium, or other amounts (other than principal or redemptions) within five (5) days after the same shall become due under this Agreement or any Note or any other Transaction Document, or any other agreement, document, certificate or other instrument delivered in connection with the transactions contemplated hereby and thereby;
(b)any default occurs and is continuing under (subject to any applicable grace periods), or any redemption of or acceleration prior to maturity of, any Indebtedness (other than the Obligations) of any Credit Party or any Subsidiary of any Credit Party in excess of $100,000; provided, that, in the event that any such default or acceleration of indebtedness is cured or rescinded by the holders thereof prior to acceleration of the Notes, no Event of Default shall exist as a result of such cured default or rescinded acceleration;
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(c)(i) any Credit Party or any Subsidiary of any Credit Party pursuant to or within the meaning of Title 11, U.S. Code (the “Bankruptcy Code”) or any similar federal, foreign or state law for the relief of debtors (collectively, “Bankruptcy Law”), (A) commences a voluntary case, (B) consents to the entry of an order for relief against it in an involuntary case, or to the conversion of an involuntary case to a voluntary case, (C) consents to the appointment of or taking of possession by a receiver, trustee, assignee, liquidator or similar official (a “Custodian”) for all or a substantial part of its property, (D) makes a general assignment for the benefit of its creditors, or (E) is generally unable to pay its debts as they become due; (ii) the Credit Parties, taken as a whole, become Insolvent or (iii) the board of directors (or similar governing body) of any Credit Party or any Subsidiary of any Credit Party (or any committee thereof) adopts any resolution or otherwise authorizes any action to approve any of the actions referred to in this Section 10.1(c) or Section 10.1(d);

(d)any expropriation, attachment, sequestration, distress or execution or any analogous process in any jurisdiction in which a court of competent jurisdiction (i) enters an order or decree under any Bankruptcy Law, which order or decree (A) (1) is not stayed or (2) is not rescinded, vacated, overturned, or otherwise withdrawn within sixty (60) days after the entry thereof, and (B) is for relief against any Credit Party or any Subsidiary of any Credit Party in an involuntary case, (ii) appoints a Custodian over all or a substantial part of the property of any Credit Party or any Subsidiary of any Credit Party and such appointment continues for sixty (60) days, (iii) orders the liquidation of any Credit Party or any Subsidiary of any Credit Party, or (iv) issues a warrant of attachment, execution or similar process against any substantial part of the property of any Credit Party or any Subsidiary of any Credit Party;

(e)a final judgment or judgments for the payment of money in excess of $250,000 or that otherwise could reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect are rendered against any Credit Party or any Subsidiary of any Credit Party, which judgments are not, within fifteen (15) days after the entry thereof, bonded, discharged or stayed pending appeal, or are not discharged within fifteen (15) days after the expiration of such stay, unless (in the case of a monetary judgment) such judgment is covered by third-party insurance, so long as the applicable Credit Party or Subsidiary provides the Agent a written statement from such insurer (which written statement shall be reasonably satisfactory to the Agent) to the effect that such judgment is covered by insurance and such Credit Party or Subsidiary will receive the proceeds of such insurance within fifteen (15) days following the issuance of such judgment;

(f)any Credit Party breaches any covenant, or other term or condition of any Transaction Document, any other agreement with the Agent, any Lender or any Holder, except in the case of a breach of a covenant or other term or condition of any Transaction Document (other than Sections 8.1(a), 8.2, 8.3(c), 8.4 through 8.11, 8.13, 8.14, 8.16, 8.17, 8.18, 8.20, 8.21, 8.23, 8.25 and 8.29 of this Agreement) which is curable, only if such breach continues for a period of thirty (30) days after the earlier to occur of (A) the date upon which an executive officer of any Credit Party becomes aware of such default and (B) the date upon which written notice thereof is given to the Borrower Representative by Agent; and a breach addressed by the other provisions of this Section 10.1; provided, the foregoing notwithstanding, the Credit Parties shall be afforded
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a grace period of five (5) Business Days, exercisable no more than an aggregate of twice per year during the term of this Agreement, with regard to the delivery requirements set forth in Section 8.2 hereof;

(g)a Change of Control that is not in connection with an M&A Event resulting in a Permitted Redemption pursuant to Section 2.3(a) occurs;

(h)any representation or warranty made by any Credit Party herein or in any other Transaction Document is breached or is false or misleading, each in any material respect;

(i)any “Event of Default” occurs and is continuing with respect to any of the other Transaction Documents or under either the Elastic Financing Agreement, the FinWise Financing Agreement or the FinWiseCC Financing Agreement, in each case, beyond any applicable notice or cure period;

(j)(i) the written rescindment or repudiation by any Credit Party of any Transaction Document or any of its obligations under any Transaction Document, or (ii) any Transaction Document or any material term thereof shall cease to be, or is asserted by any Credit Party not to be, a legal, valid and binding obligation of any Credit Party enforceable in accordance with its terms;

(k)any Lien against the Collateral intended to be created by any Security Document shall at any time be invalidated, subordinated (except to Permitted Liens to the extent expressly permitted under the Transaction Documents) or otherwise cease to be in full force and effect, for whatever reason, or any security interest purported to be created by any Security Document shall cease to be, or shall be asserted by any Credit Party not to be, a valid, first priority perfected Lien (to the extent that any Transaction Document obligates the parties to provide such a perfected first priority Lien, and except to the extent Permitted Liens are permitted by the terms of the Transaction Documents to have priority) in the Collateral (except as expressly otherwise provided under and in accordance with the terms of such Transaction Document);

(l)any material provision of any Transaction Document shall at any time for any reason be declared to be null and void, or the validity or enforceability thereof shall be contested by any Credit Party, or a proceeding shall be commenced by any Credit Party, or by any Governmental Authority having jurisdiction over such Credit Party, seeking to establish the invalidity or unenforceability thereof, or any Credit Party shall deny that it has any liability or obligation purported to be created under any Transaction Document;

(m)Reserved;

(n)the occurrence of (i) any event which could reasonably be expected to have a Material Adverse Effect, (ii) a State Force Majeure Event, (iii) a Federal or Multi-State Force Majeure Event or (iv) a UK Force Majeure Event;

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(o)(i) any Credit Party or Subsidiary of any Credit Party liquidates, dissolves, terminates or suspends its business operations or otherwise fails to operate its business in the ordinary course; provided, the foregoing notwithstanding any of the Elevate Credit Subsidiaries (other than a Borrower) may suspend its operations in any jurisdiction in which it operates and dissolve as a result of a decision by the Credit Parties to exit one or more markets from time to time or (ii) the authority or ability of any Credit Party or Subsidiary of any Credit Party to conduct its business is limited or wholly or substantially curtailed by any seizure, expropriation, nationalization, intervention, restriction or other action by or on behalf of any governmental, regulatory or other authority or other person in relation to any Credit Party, any of their Subsidiaries or any of their respective assets;

(p)Ken ReesJason Harvison or Chris Lutes shall, at any time for any reason, cease to be employed by either an Elevate Credit Subsidiary or Elevate Credit Parent in the same position and with duties substantially similar to those held as of the Fifth Restatement Closing Date (or, in the case of Jason Harvison, the First Amendment Effective Date), unless a replacement reasonably satisfactory to Agent shall have been appointed and employed (including on an interim basis) within ninety (90) days of his cessation of employment;

(q)any material decline or depreciation in the value or market price of the Collateral (whether actual or reasonably anticipated), which causes the Collateral, in the reasonable opinion of Agent acting in good faith, to become unsatisfactory as to value or character, or which causes the Agent to reasonably believe that the Obligations are inadequately secured and that the likelihood for repayment of the Obligations is or will soon be materially impaired, time being of the essence;

(r)(i) the occurrence of one or more ERISA Events which individually or in the aggregate result(s) in or could reasonably be expected to result in liability of the Credit Parties or any of their Subsidiaries in excess of $100,000 during the term hereof; or (ii) the existence of any fact or circumstance that could reasonably be expected to result in the imposition of a Lien pursuant to Section 430(k) of the Code or ERISA or a violation of Section 436 of the Code; or

(s)any default or event of default (monetary or otherwise) by a Credit Party shall occur with respect to any Material Contract, which if curable has not been cured in accordance with the provisions of the applicable Material Contract and that could have a Material Adverse Effect.

Section 10.2Termination of Commitments and Acceleration Right.
(a)Promptly after the occurrence of an Event of Default, the Borrower Representative shall deliver written notice thereof via email, facsimile and overnight courier (an “Event of Default Notice”) to the Agent. At any time after the earlier of the Agent’s receipt of an Event of Default Notice and the Agent becoming aware of an Event of Default which has not been cured or waived, (i) the Agent may (or, solely with respect to the US Term Note Commitments of the applicable Lenders to fund additional draws under the US Term Notes, at
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the direction of the Required US Term Note Lenders, shall) declare all or any portion of the Commitment of each Lender to fund additional draws under the Notes to be suspended or terminated by delivering written notice thereof (an “Event of Default Commitment Suspension or Termination Notice”) to the Borrower Representative, which Event of Default Commitment Suspension or Termination Notice shall indicate the portion of the Commitments that the Agent is suspending or terminating, whereupon such Commitments shall forthwith be suspended or terminated, and/or (ii) the Agent may require the Borrowers to redeem all or any portion of the Notes (provided, that any redemption of any portion of the Notes (including any tranche thereof) that changes the priority of payment to which the US Term Notes are entitled under this Agreement shall also require the consent of the Required US Term Note Lenders and, to the extent not included in the foregoing consent by Required US Term Note Lenders, the consent of each other Lender or Holder that holds, individually, an aggregate principal amount of US Term Note Commitments and outstanding US Term Notes of $20,000,000 or more (which consent may be in the form of an email to Agent)) (an “Event of Default Redemption”) by delivering written notice thereof (the “Event of Default Redemption Notice”) to the Borrower Representative, which Event of Default Redemption Notice shall indicate the tranche(s) and portion(s) of the Notes that the Agent is requiring the Borrowers to redeem (to be allocated on a pro rata basis with respect to the applicable outstanding Notes), whereupon a corresponding pro rata portion of the applicable Commitments in respect thereof shall forthwith be terminated effective upon the date of such Event of Default Redemption Notice; provided, that upon the occurrence of any Event of Default described in Section 10.1(c) or Section 10.1(d), and without any action on behalf of the Agent, any Holder or any Lender, the Commitments, in whole, shall automatically be terminated and the Notes shall automatically be redeemed by the Borrowers. All Notes subject to redemption by the Borrowers pursuant to this Section 10.2 shall be redeemed by the Borrowers at a price equal to the outstanding principal amount of such Notes, plus accrued and unpaid interest, accrued and unpaid Late Charges, accrued and unpaid Prepayment Premium, and all other amounts due under the Transaction Documents (the “Event of Default Redemption Price”); provided, the foregoing notwithstanding, the Prepayment Premium shall not be due solely in connection with an Event of Default Redemption occurring as a result of the occurrence of an Event of Default of the type described in Sections 10.1(n)(ii), 10.1(n)(iii) or 10.1(n)(iv) so long as no other Event of Default shall be in existence at such time.
(b)In the case of an Event of Default Redemption, the Borrowers shall deliver the applicable Event of Default Redemption Price to the Agent within three (3) Business Days after the Borrower Representative’s receipt of the Event of Default Redemption Notice. In the case of an Event of Default Redemption of less than all of the principal of a tranche of the Notes, the applicable Borrower shall promptly cause to be issued and delivered to the applicable Holders new Notes (in accordance with Section 2.7) representing the portion of the Commitments that have not been terminated as a result of such redemption.

Section 10.3Consultation Rights. Without in any way limiting any remedy that the Agent, the Holders or the Lenders may have, at law or in equity, under any Transaction Document (including under the foregoing provisions of this ARTICLE 10) or otherwise, upon the occurrence and during the continuance of any Event of Default, upon the request of the
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Agent, the Credit Parties shall hire or otherwise retain a consultant, advisor or similar Person acceptable to the Agent to advise the Credit Parties with respect to their business and operations.
Section 10.4Other Remedies. The remedies provided herein and in the Notes shall be cumulative and in addition to all other remedies available under any of the other Transaction Documents, at law or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the Agent’s, any Lender’s or any Holder’s right to pursue actual damages for any failure by the Credit Parties to comply with the terms of this Agreement, the Notes and the other Transaction Documents. Amounts set forth or provided for herein and in the Notes with respect to payments and the like (and the computation thereof) shall be the amounts to be received by the Agent, the Holders and/or the Lenders and shall not, except as expressly provided herein, be subject to any other obligation of the Credit Parties (or the performance thereof). Each of the Credit Parties acknowledges that a breach by it of its obligations hereunder and under the Notes and the other Transaction Documents will cause irreparable harm to the Agent, the Holders and the Lenders and that the remedy at law for any such breach may be inadequate. The Credit Parties therefore agree that, in the event of any such breach or threatened breach, the Agent, the Holders and the Lenders shall be entitled, in addition to all other available remedies, to an injunction restraining any breach, without the necessity of showing economic loss and without any bond or other security being required.
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Section 10.5Application of Proceeds.
(a)Notwithstanding anything to the contrary contained in this Agreement, upon the occurrence and during the continuance of an Event of Default, Borrowers irrevocably waive the right to direct the application of any and all payments at any time or times thereafter received by Agent from or on behalf of the Borrowers or any other Credit Party of all or any part of the Obligations, and, as between the Credit Parties on the one hand and Agent and Holders on the other, Agent shall have the continuing and exclusive right to apply and to reapply any and all payments received against the Obligations in such manner as Agent may deem advisable (subject to clause (b) below) notwithstanding any previous application by Agent.
(b)Following the occurrence and during the continuance of an Event of Default, any and all voluntary and mandatory, payments, prepayments or redemptions made in respect of the Obligations shall be delivered to the Agent and shall be applied in the following order: first, to all fees, costs, indemnities, liabilities, obligations and expenses incurred by or owing to Agent with respect to this Agreement, the other Transaction Documents or the Collateral; second, to accrued and unpaid interest on the First Out Notes on a pro rata basis with respect to the outstanding First Out Notes; third, to the principal amount of the First Out Notes and to any Prepayment Premium thereon then due and owing on a pro rata basis with respect to the outstanding First Out Notes; fourth, to accrued and unpaid interest on the Fourth Tranche US Last Out Term Notes on a pro rata basis with respect to the outstanding Fourth Tranche US Last Out Term Notes; fifth, to the principal amount of the Fourth Tranche US Last Out Term Notes and to any Prepayment Premium thereon then due and owing on a pro rata basis with respect to the Fourth Tranche US Last Out Term Notes.

(c)Any payments, prepayments or proceeds of Collateral received by any Lender that were not permitted to be made under this Agreement or were not applied as required under this Agreement shall be promptly paid over to the Agent for application under Section 10.5(b). Any balance remaining after giving effect to the applications set forth in this Section 10.5 shall be delivered to Borrower Representative or to whoever may be lawfully entitled to receive such balance or as a court of competent jurisdiction may direct. In carrying out any of the applications set forth in this Section 10.5, (i) amounts received shall be applied in the numerical order provided until exhausted prior to the application to the next succeeding category and (ii) each of the Persons entitled to receive a payment in any particular category shall receive an amount equal to its pro rata share of amounts available to be applied pursuant thereto for such category.

Article 11
BANKRUPTCY MATTERS

    In the event of any Insolvency Proceeding involving a Credit Party or the liquidation or dissolution of a Credit Party:
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Section 11.1    General. This Agreement shall be applicable both before and after the filing of any Insolvency Proceeding, including, without limitation, any case or proceeding of the type described in Sections 10.1(c) or 10.1(d) of this Agreement, and all converted or succeeding cases in respect thereof, and all references herein to any Credit Party shall be deemed to apply to the trustee for such Credit Party and such Credit Party as a debtor-in-possession. The relative rights of the First Out Note Holders and the Last Out Note Holders, including, without limitation, in respect of (a) any Collateral or proceeds thereof and (b) the order of application of all payments in respect of Obligations, shall continue after the filing of such petition on the same basis as prior to the date of such filing, subject to any court order approving the financing of, or use of cash collateral by, any Credit Party. This Agreement shall be enforceable in any Insolvency Proceeding in accordance with its terms. In furtherance of the foregoing, any payment or distribution which is payable or deliverable in such Insolvency Proceeding in respect of any of the Notes, whether in cash, securities, or other property, shall be paid or delivered in accordance with the terms of this Agreement, and all receivers, trustees, liquidators, custodians, conservators and others having authority in the premises are each irrevocably authorized, empowered and directed to effect all such payments and deliveries. Each Last Out Note Holder acknowledges and agrees that because of their differing rights in proceeds of the Collateral, the Obligations in respect of the Fourth Tranche US Last Out Term Notes are fundamentally different from the Obligations in respect of the First Out Notes and must be separately classified in any plan of reorganization proposed or confirmed in any Insolvency Proceeding involving any Borrower or other Credit Party as a debtor. No Last Out Note Holder shall seek in any such Insolvency Proceeding to be treated as part of the same class of creditors as the First Out Note Holders or shall oppose any pleading or motion by the First Out Note Holders for the First Out Note Holders and the Last Out Note Holders to be treated as separate classes of creditors.
Section 11.2    Post Petition Financing; Etc. In the event of the filing of any Insolvency Proceeding, including, without limitation, any case or proceeding of the type described in Sections 10.1(c) or 10.1(d) of this Agreement, by or against any Credit Party, until no Credit Exposure exists (other than Credit Exposure with respect to the Fourth Tranche US Last Out Term Notes):
    (a)    if any such Credit Party or Credit Parties as debtor(s)-in-possession (or a trustee appointed on behalf of such Credit Party or Credit Parties) shall move for either approval of financing (“DIP Financing”) to be provided by the Agent or any of the Lenders (other than the Last Out Note Holders) (or to be provided by any other Person or group of Persons with the consent of the Agent) under Section 364 of the Bankruptcy Code or the use of cash collateral with the consent of the Agent and the Lenders (other than the Last Out Note Holders) under Section 363 of the Bankruptcy Code, then each Last Out Note Holder agrees as follows: (i) adequate notice to such Last Out Note Holder for such DIP Financing or use of cash collateral shall be deemed to have been given to the Last Out Note Holders if the Last Out Note Holders receive notice in advance of the hearing to approve such DIP Financing or use of cash collateral on an interim basis and at least 5 Business Days in advance of the hearing to approve such DIP Financing or use of cash collateral on a final basis, (ii) no Last Out Note Holder will request or accept adequate protection or any other relief in connection with the use of such cash collateral or such DIP Financing, and (iii) no Last Out Note Holder shall contest or oppose in any manner
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any adequate protection provided to the Agent and the Lenders (other than the Last Out Note Holders) as adequate protection of their interests in the Collateral, any DIP Financing or any cash collateral use and shall be deemed to have waived any objections to such adequate protection, DIP Financing or cash collateral use, including, without limitation, any objection alleging Credit Parties’ failure to provide “adequate protection” of the interests of the Last Out Note Holders in the Collateral; and
    (b)    no Last Out Note Holder or any of its Affiliates shall (i) propose, move for approval of or make any DIP Financing, (ii) propose or, except as required by clause (ii)(x) of the last sentence of Section 13.6, vote (to the extent such vote is required to satisfy Section 1129(a)(10) of the Bankruptcy Code) in favor of any chapter 11 plan that seeks confirmation of a plan of reorganization that would “cram down” the class of claims held by the Lenders in respect of the Obligations (other than the Fourth Tranche US Last Out Term Notes) under Section 1129(b)(2)(A) of the Bankruptcy Code, or (iii) take any other action that would otherwise result or potentially result in any “cram down” of the Obligations (other than Fourth Tranche US Last Out Term Notes), any DIP Financing or any claims of the holders of the Obligations (other than the Fourth Tranche US Last Out Term Notes), in each case, unless the Agent and the Lenders then holding more than sixty-six and two-thirds percent (66 2/3%) of the aggregate Commitments then in effect plus the aggregate unpaid principal balance of the Notes then outstanding consent in writing and in advance to such action.
Section 11.3    Commencement of Insolvency Proceedings. Notwithstanding any rights or remedies available to any Last Out Note Holder under any Transaction Document, applicable law or otherwise, prior to the Maturity Date (as the same may be extended) of the Fourth Tranche US Last Out Term Notes, no Last Out Note Holder shall commence an Insolvency Proceeding against any Borrower or any other Credit Party.
Section 11.4    Bankruptcy Sale. No Last Out Note Holder shall object to or oppose a sale or other disposition of any Collateral free and clear of Liens or other claims under Section 363 of the Bankruptcy Code on any grounds that may be asserted by a holder of a Lien on such Collateral (and shall be deemed to have consented to such sale in its capacity as a secured creditor for the purposes of Section 363) if the Agent has consented to such sale or disposition of such Collateral, and no Last Out Note Holder shall request that it or any other Person be granted adequate protection of its Lien on such Collateral if the Agent has consented to such sale or disposition of such Collateral and so long as any Lien of the Agent on such Collateral attaches to the proceeds of such sale or disposition.
Section 11.5    Relief from Stay. No Last Out Note Holder shall (a) seek (or support any other Person seeking) relief from the automatic stay or any other stay in any Insolvency Proceeding in respect of the Collateral, without the prior written consent of Agent, or (b) oppose any request by Agent or any Lender (other than the Last Out Note Holders) to seek relief from the automatic stay or any other stay in any Insolvency Proceeding in respect of the Collateral.
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Article 12

AGENCY PROVISIONS

Section 12.1Appointment. Each of the Holders and Lenders hereby irrevocably designates and appoints Agent as the administrative agent and collateral agent of such Holder or such Lender (or the Holders or Lenders represented by it) under this Agreement and the other Transaction Documents for the term hereof (and Agent hereby accepts such appointment), and each such Holder and Lender irrevocably authorizes Agent to take such action on its behalf under the provisions of this Agreement and the other Transaction Documents and to exercise such powers and perform such duties as are expressly delegated to the Agent by the terms of this Agreement and the other Transaction Documents, together with such other powers as are reasonably incidental thereto. Notwithstanding any provision to the contrary elsewhere in this Agreement or the other Transaction Documents, the Agent shall not have any duties or responsibilities, except those expressly set forth herein and therein, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or the other Transaction Documents or otherwise exist against the Agent. Without limiting the generality of the foregoing, Agent shall have the sole and exclusive right and authority (to the exclusion of the Lenders and Holders), and is hereby authorized, to (a) act as the disbursing and collecting agent for the Lenders and Holders with respect to all payments and collections arising in connection with the Transaction Documents (including in any proceeding described in Sections 10.1(c) or 10.1(d) or any other bankruptcy, insolvency or similar proceeding), and each Person making any payment in connection with any Transaction Document to any Lender or Holder is hereby authorized to make such payment to Agent, (b) file and prove claims and file other documents necessary or desirable to allow the claims of the Agent, Lenders and Holders with respect to any Obligation in any proceeding described in Sections 10.1(c) or 10.1(d) or any other bankruptcy, insolvency or similar proceeding (but not to vote, consent or otherwise act on behalf of such Person), (c) act as collateral agent for itself and each Lender and Holder for purposes of the perfection of all Liens created by such agreements and all other purposes stated therein, (d) manage, supervise and otherwise deal with the Collateral, (e) take such other action as is necessary or desirable to maintain the perfection and priority of the Liens created or purported to be created by the Transaction Documents, (f) except as may be otherwise specified in any Transaction Document, exercise all remedies given to Agent, the Lenders and the Holders with respect to the Credit Parties and/or the Collateral, whether under the Transaction Documents, applicable Requirements or otherwise and (g) execute any amendment, consent or waiver under the Transaction Documents on behalf of any Lender or Holder that has consented in writing to such amendment, consent or waiver; provided, however, that Agent hereby appoints, authorizes and directs each Lender and Holder to act as collateral sub-agent for Agent, the Lenders and the Holders for purposes of the perfection of all Liens with respect to the Collateral, including any deposit account maintained by a Credit Party with, and cash and Cash Equivalent Investments held by, such Lender or Holder, and may further authorize and direct the Lenders and the Holders to take further actions as collateral sub-agents for purposes of enforcing such Liens or otherwise to transfer the Collateral subject thereto to Agent, and each Lender and
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Holder hereby agrees to take such further actions to the extent, and only to the extent, so authorized and directed. Sections 12.5 and 12.9 shall apply to any collateral sub-agent described in the proviso to the immediately preceding sentence and its Related Parties in connection with their respective actions and activities described therein. Any reference to the Agent in this Agreement or the other Transaction Documents shall be deemed to refer to the Agent solely in its capacity as Agent and not in its capacity, if any, as a Holder or a Lender. Under the Transaction Documents, Agent (a) is acting solely on behalf of the Agent, Lenders and Holders (except to the limited extent provided in Section 2.9 with respect to the Register), with duties that are entirely administrative in nature, notwithstanding the use of the defined term “Agent”, the terms “agent”, “Agent” and “collateral agent” and similar terms in any Transaction Document to refer to Agent, which terms are used for title purposes only, (b) is not assuming any obligation under any Transaction Document other than as expressly set forth therein or any role as agent (except as expressly set forth in this Agreement and the other Transaction Documents), fiduciary or trustee of or for any Lender, Holder or any other Person and (c) shall have no implied functions, responsibilities, duties, obligations or other liabilities under any Transaction Document, and each Lender and Holder, by accepting the benefits of the Transaction Documents, hereby waives and agrees not to assert any claim against Agent based on the roles, duties and legal relationships expressly disclaimed in clauses (a) through (c) of this sentence.
Section 12.2Binding Effect. Each Lender and Holder, by accepting the benefits of the Loan Documents, agrees that (a) any action taken by Agent (or, when expressly required hereby, all the Holders) in accordance with the provisions of the Transaction Documents, (b) any action taken by Agent in reliance upon the instructions of Required Lenders (or, when expressly required hereby, all the Holders) and (c) the exercise by Agent (or, when expressly required hereby, all the Holders) of the powers set forth herein or therein, together with such other powers as are reasonably incidental thereto, shall be authorized and binding upon all of the Lenders and Holders.
Section 12.3Use of Discretion. Agent shall not be required to exercise any discretion or take, or to omit to take, any action, including with respect to enforcement or collection, except any action it is required to take or omit to take (a) under any Transaction Document or (b) pursuant to instructions from all the Holders, when expressly required hereby. Notwithstanding the foregoing, Agent shall not be required to take, or to omit to take, any action (a) unless, upon demand, Agent receives an indemnification satisfactory to it from the Lenders and/or Holders (or, to the extent applicable and acceptable to Agent, any other Person) against all liabilities that, by reason of such action or omission, may be imposed on, incurred by or asserted against Agent or any of its Related Parties or (b) that is, in the opinion of Agent or its counsel, contrary to any Transaction Document or applicable Requirement. Notwithstanding anything to the contrary contained herein or in any other Transaction Document, the authority to enforce rights and remedies hereunder and under the other Transaction Documents against the Credit Parties or any of them shall be vested exclusively in, and all actions and proceedings at law in connection with such enforcement shall be instituted and maintained exclusively by, Agent in accordance with the Transaction Documents for the benefit of all the Lenders and the Holders; provided, that the foregoing shall not prohibit (a) Agent from exercising on its own behalf the rights and remedies that inure to its benefit (solely in its capacity as Agent) hereunder and under the other
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Transaction Documents, (b) any Lender or Holder from exercising setoff rights in accordance with Section 13.17(a) or (c) any Lender or Holder from filing proofs of claim or appearing and filing pleadings on its own behalf during the pendency of a proceeding relative to any Credit Party under any bankruptcy or other debtor relief law; and provided, further that if at any time there is no Person acting as Agent hereunder and under the other Transaction Documents, then (A) the Required Lenders shall have the rights otherwise ascribed to Agent pursuant to Article 10 and (B) in addition to the matters set forth in clauses (b) and (c) of the preceding proviso and subject to Section 13.17(a), any Lender or Holder may, with the consent of the Required Lenders, enforce any rights and remedies available to it and as authorized by the Required Lenders.
Section 12.4Delegation of Duties. The Agent may execute any of its respective duties under this Agreement or the other Transaction Documents by or through agents or attorneys in fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. The Agent shall not be responsible for the negligence or misconduct of any agents or attorneys in fact selected by the Agent with reasonable care.
Section 12.5Exculpatory Provisions. Neither the Agent nor any of its Related Parties shall be (a) liable for any action lawfully taken or omitted to be taken by it or such Person under or in connection with this Agreement (except for actions occasioned by its or such Person’s own gross negligence or willful misconduct), or (b) responsible in any manner to any of the Holders or Lenders for any recitals, statements, representations or warranties made by the Credit Parties or any of their Subsidiaries or any officer thereof contained in this Agreement, the other Transaction Documents or in any certificate, report, statement or other document referred to or provided for in, or received by the Agent under or in connection with, this Agreement or the other Transaction Documents or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Transaction Document or for any failure of the Credit Parties or any of their Subsidiaries to perform its obligations hereunder or thereunder. The Agent shall not be under any obligation to any Holder or any Lender to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or of any other Transaction Document, or to inspect the properties, books or records of the Credit Parties or any of their Subsidiaries.
Section 12.6Reliance by Agent. The Agent shall be entitled to rely, and shall be fully protected in relying, upon any note, writing, resolution, notice, consent, certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype message, statement, order or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons and upon advice and statements of legal counsel (including, without limitation, counsel to the Borrowers), independent accountants and other experts selected by the Agent. The Agent may deem and treat the payee of any Note as the owner thereof for all purposes unless the Agent shall have actual notice of any transferee. The Agent shall be fully justified in failing or refusing to take any action under this Agreement and the other Transaction Documents unless it shall first receive such advice or concurrence of the Required Lenders (or, when expressly required hereby, all the Holders) as it deems appropriate, if any, or it shall first be indemnified to its satisfaction by the Holders and Lenders against any
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and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action except for its own gross negligence or willful misconduct (each as determined in a final, non-appealable judgment by a court of competent jurisdiction). The Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement and the other Transaction Documents in accordance with a request of the Required Lenders (or, when expressly required hereby, all the Holders), and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Holders and Lenders and all future Holders and Lenders. Without limiting the foregoing, Agent:
(a)shall not be responsible or otherwise incur liability for any action or omission taken in reliance upon the instructions of the Required Lenders or for the actions or omissions of any of its Related Parties selected with reasonable care (other than employees, officers and directors of Agent, when acting on behalf of Agent);
(b)shall not be responsible to any Lender, Holder or other Person for the due execution, legality, validity, enforceability, effectiveness, genuineness, sufficiency or value of, or the attachment, perfection or priority of any Lien created or purported to be created under or in connection with, any Transaction Document; and

(c)makes no warranty or representation, and shall not be responsible, to any Lender, Holder or other Person for any statement, document, information, representation or warranty made or furnished by or on behalf of any Credit Party or any Related Party of any Credit Party in connection with any Transaction Document or any transaction contemplated therein or any other document or information with respect to any Credit Party, whether or not transmitted or omitted to be transmitted by Agent, including as to completeness, accuracy, scope or adequacy thereof, or for the scope, nature or results of any due diligence performed by Agent in connection with the Transaction Documents;
and, for each of the items set forth in clauses (a) through (c) above, each Lender, Holder and Credit Party hereby waives and agrees not to assert (and Borrowers shall cause each other Credit Party to waive and agree not to assert) any right, claim or cause of action it might have against Agent based thereon.
Section 12.7Notices of Default. The Agent shall not be deemed to have knowledge or notice of the occurrence of any Event of Default hereunder or under any other Transaction Document unless it has received notice of such Event of Default in accordance with the terms hereof or thereof or notice from a Holder, a Lender or the Borrowers referring to this Agreement or the other Transaction Documents describing such Event of Default and stating that such notice is a “notice of default.” In the event that the Agent receives such a notice, it shall promptly give notice thereof to the Holders and Lenders. The Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Event of Default as it shall deem advisable in the best interests of the Holders and Lenders, except to the extent that other provisions of this Agreement or the other Transaction Documents expressly require that any such action be taken or not be taken only with the consent and authorization or upon the request of all the Holders.
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Section 12.8Non Reliance on the Agent and Other Holders. Each of the Holders and Lenders expressly acknowledges that neither the Agent nor any of its respective officers, directors, employees, agents, attorneys in fact, Subsidiaries or Affiliates has made any representations or warranties to it and that no act by the Agent hereinafter taken, including any review of the affairs of the Credit Parties or any of their Subsidiaries, shall be deemed to constitute any representation or warranty by the Agent to any Holder or Lender. Each of the Holders and Lenders represents that it has made and will continue to make, independently and without reliance upon the Agent or any other Holder or Lender, and based on such documents and information as it shall deem appropriate at the time, its own credit analysis, appraisals and decisions in taking or not taking action under this Agreement and the other Transaction Documents, and such investigation as it deems necessary to inform itself as to the business, operations, property, financial and other condition and creditworthiness of the Credit Parties and their Subsidiaries. Except for notices, reports and other documents expressly required to be furnished to the Holders and Lenders by the Agent hereunder or under the other Transaction Documents, the Agent shall not have any duty or responsibility to provide any Holder or Lender with any credit or other information concerning the business, operations, property, financial and other condition or creditworthiness of the Credit Parties or any of their Subsidiaries which may come into the possession of the Agent or any of its respective officers, directors, employees, agents, attorneys in fact, Subsidiaries or Affiliates.
Section 12.9Indemnification. Each of the Holders and Lenders hereby agrees to indemnify the Agent in its capacity as such (to the extent not reimbursed by the Credit Parties and without limiting the obligation of the Credit Parties to do so), ratably according to the respective amounts of their Notes, from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind whatsoever which may at any time (including, without limitation, at any time following the payment of the Notes) be imposed on, incurred by or asserted against the Agent in any way relating to or arising out of this Agreement, the other Transaction Documents, or any documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby or any action taken or omitted by the Agent under or in connection with any of the foregoing; provided that no Holder or Lender shall be liable for the payment of any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements to the extent they result from the Agent’s gross negligence or willful misconduct, as determined by a court of competent jurisdiction in a final non-appealable judgment or order. The agreements in this Section 12.9 shall survive the payment of the Notes and all other amounts payable hereunder and the termination of this Agreement and the other Transaction Documents.
Section 12.10The Agent in Its Individual Capacity. The Agent and its Subsidiaries and Affiliates may make loans to, accept deposits from and generally engage in any kind of business with the Credit Parties or any of their Subsidiaries as though the Agent were not an Agent hereunder. With respect to any Note issued to it, the Agent shall have the same rights and powers under this Agreement and the other Transaction Documents as any Holder or Lender and may exercise the same as though it were not an Agent, and the terms “Holders” and “Lenders” shall include the Agent in its individual capacity.
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Section 12.11Resignation or Removal of the Agent; Successor Agent. The Agent may resign as Agent at any time by giving thirty (30) days advance notice thereof to the Holders and Lenders and the Borrowers and, thereafter, the retiring Agent shall be discharged from its duties and obligations hereunder. If the Agent becomes subject to an insolvency proceeding under Bankruptcy Law that is not dismissed within sixty (60) days after commencement thereof or ceases to operate its business as a going concern, the Required Lenders (determined solely for purposes of this sentence without taking into account any Lenders or Holders that are Affiliates of Agent) may, upon 20 days’ prior written notice, remove the Agent and, thereafter, the removed Agent shall be discharged from its duties and obligations hereunder. Upon any such resignation or removal, the Required Lenders (determined, solely in the case of the removal of Agent in accordance with the immediately preceding sentence, without taking into account any Lenders or Holders that are Affiliates of Agent) shall have the right to appoint a successor Agent. If no successor Agent shall have been so appointed by the Required Lenders, then the Agent may, on behalf of the Holders and Lenders, appoint a successor Agent reasonably acceptable to the Borrowers (so long as no Event of Default has occurred and is continuing) and, in the case of a removal of Agent, reasonably acceptable to Required Lenders (determined solely for purposes of this sentence without taking into account any Lenders or Holders that are Affiliates of Agent). Upon the acceptance of any appointment as Agent hereunder by a successor Agent, such successor Agent shall thereupon succeed to and become vested with all rights, powers, privileges and duties of the retiring or removed Agent, as applicable. After any retiring Agent’s resignation hereunder as Agent or any removed Agent’s removal hereunder as Agent, as the case maybe, the provisions of this Section 12.11 shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as Agent. If no successor has accepted appointment as Agent by the date which is thirty (30) days following a retiring Agent’s notice of resignation or a removed Agent’s receipt of a notice of removal, as applicable, the retiring Agent’s resignation or the removed Agent’s removal, as the case may be, shall nevertheless thereupon become effective and the Required Lenders shall perform all of the duties of the Agent hereunder until such time, if any, as the Required Lenders appoint a successor agent as provided for above. Notwithstanding the foregoing, the resignation of the Agent may, at the election of the Agent upon prior written notice thereof to the Last Out Note Holders and the Borrower Representative, be effective immediately upon the date that no Credit Exposure exists (other than Credit Exposure with respect to the Fourth Tranche US Last Out Term Notes). Upon receipt of any such notice of resignation under the immediately preceding sentence, Last Out Note Holders holding greater than fifty percent (50%) of the outstanding principal balance of the Fourth Tranche US Last Out Term Notes shall have the right to appoint a successor Agent. From and following the effectiveness of such notice, (i) the retiring Agent shall be discharged from its duties and obligations hereunder and under the other Transaction Documents and (ii) all payments, communications and determinations provided to be made by, to or through Agent shall instead be made by or to each Lender directly, until such time as Last Out Note Holders holding greater than fifty percent (50%) of the outstanding principal balance of the Fourth Tranche US Last Out Term Notes appoint a successor Agent as provided for above in this Section 12.11.
Section 12.12Reimbursement by Holders and Lenders. To the extent that the Borrowers for any reason fail to indefeasibly pay any amount required under Section 13.1 or Section 13.12
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to be paid by it to the Agent (or any sub-agent thereof), or any Related Party of any of the foregoing, each Holder and Lender severally agrees to pay to the Agent (or any such sub agent) or such Related Party, as the case may be, such Holder’s or Lender’s applicable percentage thereof (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount, provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Agent (or any such sub agent) in its capacity as such, or against any Related Party of any of the foregoing acting for the Agent (or any such sub-agent) in connection with such capacity. For the purposes of this Section 12.12, the “applicable percentage” of a Holder or a Lender shall be the percentage of the total aggregate principal amount of the Notes represented by the Notes held by such Holder or Lender at such time.
Section 12.13Withholding. To the extent required by any Requirement, Agent may withhold from any payment to any Lender or Holder under a Transaction Document an amount equal to any applicable withholding Tax (including withholding Taxes imposed under Chapters 3 and 4 of Subtitle A of the Code). If the IRS or any other Governmental Authority asserts a claim that Agent did not properly withhold tax from amounts paid to or for the account of any Lender or Holder (because the appropriate certification form was not delivered, was not properly executed, or fails to establish an exemption from, or reduction of, withholding tax with respect to a particular type of payment, or because such Lender or Holder failed to notify Agent or any other Person of a change in circumstances which rendered the exemption from, or reduction of, withholding tax ineffective, failed to maintain a Participant Register or for any other reason), or Agent reasonably determines that it was required to withhold taxes from a prior payment but failed to do so, such Lender or Holder shall promptly indemnify Agent fully for all amounts paid, directly or indirectly, by Agent as tax or otherwise, including penalties and interest, and together with all expenses incurred by Agent, including legal expenses, allocated internal costs and out-of-pocket expenses. Agent may offset against any payment to any Lender or Holder under a Transaction Document, any applicable withholding tax that was required to be withheld from any prior payment to such Lender or Holder but which was not so withheld, as well as any other amounts for which Agent is entitled to indemnification from such Lender or Holder under this Section 12.13.
Section 12.14Release of Collateral or Guarantors. Each Lender and Holder hereby consents to the release and hereby directs Agent to release (or, in the case of clause (b)(ii) below, release or subordinate) the following:
(a)any Subsidiary of a Borrower (other than a Subsidiary that is itself a Borrower) from its guaranty of any Obligation if all of the Equity Interests of such Subsidiary owned by any Credit Party are sold or transferred in a transaction permitted under the Transaction Documents (including pursuant to a waiver or consent), to the extent that, after giving effect to such transaction, such Subsidiary would not be required to guaranty any Obligations; and
(b)any Lien held by Agent for the benefit of the Lenders and Holders against (i) any Collateral that is sold, transferred, conveyed or otherwise disposed of by a Credit Party in
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a transaction permitted by the Transaction Documents (including pursuant to a valid waiver or consent), to the extent all Liens required to be granted in such Collateral pursuant to this Agreement after giving effect to such transaction have been granted, (ii) any property subject to a Lien permitted hereunder in reliance upon clause (xiii) of the definition of Permitted Liens and (iii) all of the Collateral and all Credit Parties, upon (A) indefeasible payment in full in cash of the Obligations (other than any indemnity obligations of any Credit Party under the Transaction Documents that satisfy all of the following conditions: (X) such indemnity obligations are not then due and payable orand (Y) such indemnity obligations are obligations for which any events or claims that would give rise thereto are not then pending) under the Transaction Documents and termination of the Transaction Documents (including all commitments (if any) to lend hereunder and (B) to the extent requested by Agent, receipt by Agent and the Lenders and Holders of liability releases from the Credit Parties each in form and substance acceptable to Agent.
Article 13
MISCELLANEOUS

Section 13.1Payment of Expenses. The Credit Parties shall reimburse the Agent, the Lenders and the Holders on demand for all reasonable costs and expenses, including, without limitation, legal expenses and reasonable attorneys’ fees (whether for internal or outside counsel), incurred by the Agent, the Lenders and the Holders in connection with (i) the investigation, development, preparation, negotiation, syndication, execution, interpretation or administration of, any modification of any term of or termination of, this Agreement and any other Transaction Document, any commitment or proposal letter therefor, any other document prepared in connection therewith or the consummation and administration of any transaction contemplated therein, and any other transactions between the Credit Parties and the Agent, the Lenders and the Holders, including, without limitation, UCC and other public record searches and filings, overnight courier or other express or messenger delivery, appraisal costs, surveys, title insurance and environmental audit or review (including due diligence review) costs; provided, that the aggregate amount of such cost and expenses which shall be required to be reimbursed under this Agreement and the other Transaction Documents with regard to all matters through and including the Second Restatement Closing Date shall not exceed $100,000; (ii) the collection, protection or enforcement of any rights in or to the Collateral; (iii) the collection of any Obligations; (iv) the administration and enforcement of Agent’s, any Lender’s and any Holder’s rights under this Agreement or any other Transaction Document (including, without limitation, any costs and expenses of any third party provider engaged by Agent, the Lenders or the Holders for such purposes, and any costs and expenses incurred in connection with the forbearance of any of the rights and remedies of the Agent, the Lenders and any Holders hereunder); (v) any refinancing or restructuring of the Notes whether in the nature of a “workout,” in any insolvency or bankruptcy proceeding or otherwise, and whether or not consummated; (vi) the assignment, transfer or syndication of the Notes; and (vii) any liability for any Non-Excluded Taxes, if any, including any interest and penalties, and any finder’s or brokerage fees, commissions and expenses (other than any fees, commissions or expenses of finders or brokers engaged by the Agent, the Lenders and/or the Holders), that may be payable in connection with the purchase of the Notes contemplated by this Agreement and the other
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Transaction Documents. The Credit Parties shall also pay all normal service charges with respect to all accounts maintained by the Credit Parties with the Lenders and/or the Holders and any additional services requested by the Credit Parties from the Lenders and/or the Holders. All such costs, expenses and charges shall constitute Obligations hereunder, shall be payable by the Credit Parties to the applicable Lenders or Holders on demand, and, until paid, shall bear interest at the highest rate then applicable to the Notes hereunder. Without limiting the foregoing, if (a) any Note is placed in the hands of an attorney for collection or enforcement or is collected or enforced through any legal proceeding or any Holder or Lender otherwise takes action to collect amounts due under such Note or to enforce the provisions of this Agreement or such Note or (b) there occurs any bankruptcy, reorganization, receivership of any Credit Party or other proceedings affecting creditors’ rights and involving a claim under this Agreement or such Note, then the Credit Parties shall pay the costs incurred by such Holder or such Lender for such collection, enforcement or action or in connection with such bankruptcy, reorganization, receivership or other proceeding, including, but not limited to, reasonable attorneys’ fees and disbursements (including such fees and disbursements related to seeking relief from any stay, automatic or otherwise, in effect under any Bankruptcy Law).
Section 13.2Governing Law; Jurisdiction; Jury Trial. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal laws of the State of Delaware, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Delaware or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of Delaware. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in Wilmington, Delaware, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTIONS CONTEMPLATED HEREBY.
Section 13.3Counterparts. This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to each other party; provided that a facsimile or .pdf signature shall be considered due execution and shall be binding upon the signatory thereto with the same force and effect as if the signature were an original, not a facsimile or .pdf signature.
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Section 13.4Headings. The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this Agreement.
Section 13.5Severability. If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of any provision of this Agreement in any other jurisdiction.
Section 13.6Entire Agreement; Amendments. This Agreement and the other Transaction Documents supersede all other prior oral or written agreements between the Agent, the Holders, the Lenders, the Credit Parties, their Affiliates and Persons acting on their behalf with respect to the matters discussed herein and therein, and this Agreement, the other Transaction Documents and the instruments referenced herein and therein contain the entire understanding of the parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, none of the Credit Parties or the Agent, any Holder or any Lender makes any representation, warranty, covenant or undertaking with respect to such matters. No provision of this Agreement, the Securities or any of the other Transaction Documents may be amended or waived other than by an instrument in writing signed by the Credit Parties (other than UK Borrower) and the Agent (provided, that no amendment or waiver hereof shall (a) increase or extend any Commitment of a Lender, (b) extend the Maturity Date of any Note or postpone or delay any date fixed for the scheduled payment of principal or any payment of interest, fees or other amounts (other than principal) due to the Lenders (or any of them) (it being agreed that, for purposes of clarification, mandatory redemptions pursuant to Section 2.3(b) may be postponed, delayed, reduced, waived or modified in accordance with Section 2.3(d) or otherwise with the consent of the Agent), (c) decrease the amount or rate of interest (it being agreed that waiver of the Default Rate shall only require the consent of the Agent), premium, principal or other amounts payable hereunder or under any Note or forgive or waive any such payment (it being agreed that mandatory redemptions pursuant to Section 2.3(b) may be postponed, delayed, reduced, waived or modified in accordance with Section 2.3(d) or otherwise with the consent of the Agent), (d) change Section 2.1(f) or 10.5(b) or any other provision of this Agreement that specifies the priority of payment among the Notes, (e) change the percentage of the Commitments or of the aggregate unpaid principal amount of the Notes which shall be required for the Lenders or any of them to take any action hereunder or, subject to the terms of this Agreement, change the definition of Required Lenders or the definition of Required US Term Note Lenders, (f) discharge any Credit Party from its respective payment Obligations under the Transaction Documents, or release all or substantially all of the Collateral, except as otherwise may be provided in this Agreement or the other Transaction Documents, (g) modify this Section 13.6 or (h) disproportionately and adversely affect any Lender or Holder as compared to other Lenders or Holders, in each case, without the consent of all Lenders and Holders directly affected thereby (which consent may be in the form of an email to Agent); provided, further, that no amendment or waiver hereof shall waive or agree to forbear with respect to any Event of Default arising under Section 10.1(a) (solely with respect to a failure to pay principal or interest), Section 10.1(b) or Section 10.1(f) (solely with respect to a breach of Section 8.1) without the consent of each Lender and Holder directly affected thereby that holds, individually, an aggregate principal amount of US Term Note Commitments and outstanding US
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Term Notes of $20,000,000 or more (which consent may be in the form of an email to Agent)), and any amendment or waiver to this Agreement made in conformity with the provisions of this Section 13.6 shall be binding on all Lenders and all Holders, as applicable. None of the Credit Parties has, directly or indirectly, made any agreements with the Agent, any Lenders or any Holders relating to the terms or conditions of the transactions contemplated by the Transaction Documents except as set forth in the Transaction Documents. Without limiting the foregoing, each of the Credit Parties confirms that, except as set forth in this Agreement, none of Agent, any Lender or any Holder has made any commitment or promise or has any other obligation to provide any financing to the Credit Parties or otherwise. Whether or not it is held that the foregoing provisions are enforceable in any Insolvency Proceeding pertaining to any Borrower or any other Credit Party, (i) no Last Out Note Holder shall assert any claim, motion, objection or argument in respect of Fourth Tranche US Last Out Term Notes that could otherwise be asserted or raised in any Insolvency Proceeding by a Lender or Holder, except to the extent such Person is not being treated ratably with all other Last Out Note Holders and (ii) in connection with the voting of any plan in any such proceeding, (x) if Lenders (that are not Last Out Note Holders) holding greater than sixty-six and two-thirds percent (662/3%) in amount and at least fifty percent (50%) in number of the claims of such Lenders (that are not Last Out Note Holders) vote in favor of a plan, each Last Out Note Holder shall vote its claim in respect of Fourth Tranche US Last Out Term Notes in favor of such plan and (y) no Last Out Note Holder shall vote its claim in respect of Fourth Tranche US Last Out Term Notes in favor of any plan that is not supported by those Lenders (that are not Last Out Note Holders) holding greater than sixty-six and two-thirds percent (662/3%) in amount and at least fifty percent (50%) in number of the claims of such Lenders (that are not Last Out Note Holders).
Section 13.7Notices
. Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile (provided, confirmation of transmission is mechanically or electronically generated and kept on file by the sending party) or e-mail (provided, confirmation of receipt is verified by return email from the receiver or by other written means); or (iii) one Business Day after deposit with an overnight courier service, in each case properly addressed to the party to receive the same. The addresses, facsimile numbers and e-mail addresses for such communications shall be:
If to any of the Credit Parties:

c/o Elevate Credit, Inc.
4150 International Plaza, Suite 400300
Fort Worth, Texas 76109
USA
Attention:    Chief Executive Officer
Facsimile:    817-546-2700
E-Mail:    jharvison@elevate.com

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with a copy (for informational purposes only) to:

        Coblentz Patch Duffy & Bass LLP
One Montgomery Street, Suite 3000
San Francisco, California 94104
USA
Telephone:    (415) 391-4800
Facsimile:    (415) 989-1663
Attention:    Paul J. Tauber, Esq.
E-Mail:    pjt@cpdb.com

and a copy (for informational purposes only) to:

Walker Morris LLP
Kings Court, 12 King Street, Leeds, LS1 2HL
Telephone:     +44 (0)113 283 2504
Attention:    Michael Taylor, Partner
E-Mail:    michael.taylor@walkermorris.co.uk

If to the Agent:

Victory Park Management, LLC
150 N. Riverside Plaza, Suite 5200
Chicago, Illinois 60606
USA
Telephone:     (312) 705-2786
Facsimile:    (312) 701-0794
Attention:     Scott R. Zemnick, General Counsel
E-mail:        szemnick@vpcadvisors.com
with a copy (for informational purposes only) to:

Katten Muchin Rosenman LLP
525 West Monroe Street
Chicago, Illinois 60661
USA
Telephone:    (312) 902-5297 and (312) 902-54955333
Facsimile:    (312) 577-8964 and (312) 577-8854902-1061
Attention:    Mark R. Grossmann, Esq. and Scott E. LyonsJohn P. Huang, Esq.
E-mail:        mg@kattenlaw.com and john.huang@kattenlaw.com

If to a Lender, to its address, facsimile number and e-mail address set forth on the Schedule of Lenders, with copies to such Lender’s representatives as set forth on the Schedule of Lenders,
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If to a Holder (that is not also a Lender), to the address, facsimile number and e-mail address as such Holder has specified by written notice given to each other party at the time such Holder has become a Holder hereunder,
or to such other address, facsimile number and/or e-mail address and/or to the attention of such other Person as the recipient party has specified by written notice given to each other party five days prior to the effectiveness of such change. Written confirmation of receipt (A) given by the recipient of such notice, consent, waiver or other communication, (B) mechanically or electronically generated by the sender’s facsimile machine containing the time, date, recipient facsimile number and an image of the first page of such transmission or (C) provided by an overnight courier service shall be rebuttable evidence of personal service, receipt by facsimile or receipt from an overnight courier service in accordance with clauses (i), (ii) or (iii) above, respectively.
Section 13.8Successors and Assigns; Participants. This Agreement shall be binding upon and inure to the benefit of the parties and their respective permitted successors and assigns, including any purchasers of the Notes or the Conversion Shares. None of the Credit Parties shall assign this Agreement or any rights or obligations hereunder without the prior written consent of Agent, including by way of a Change of Control. Subject to the provisions of Section 2.7, 2.8 and 2.9 hereof, a Lender or Holder may assign some or all of its rights and obligations hereunder in connection with the transfer of any of its Notes or Conversion Shares to any Person (an “Assignee”), with the prior written consent of the Agent and, so long as no Event of Default exists, the Borrower Representative (which consent of the Borrower Representative shall not be unreasonably withheld, conditioned or delayed and neither of which consents shall be required for an assignment by (i) a Lender to an Assignee that is (A) another Lender or Holder or (B) an Affiliate of such assigning Lender or (ii) a Holder to an Assignee that is (A) another Holder or Lender or (B) an Affiliate of such assigning Holder); provided, however, that (a) the Borrower Representative shall be deemed to have consented to any such assignment unless it shall object thereto by written notice to the Agent within ten (10) Business Days after having received notice thereof, (b) for purposes of clarification, the Borrower Representative hereby consents to any such assignment (including, without limitation, a Principal Only Assignment (as defined below)) to each of (i) Raven Capital Management, LLC, (ii) Hudson Cove Capital Management LLC, (iii) BasePoint Capital and/or (iv) their respective Affiliates, (c) anything herein to the contrary notwithstanding, the UK Term Notes may not be offered, sold or delivered, directly or indirectly, within the United Kingdom or to, or for the account or benefit of a Person within the United Kingdom and no transfer of UK Term Notes made in breach of this restriction will be registered by the UK Borrower and (d) no Notes or Commitments may be offered, assigned, sold or delivered by a Lender or Holder that is not an Affiliate of Agent to any Person (other than to (x) an Affiliate of such Lender or Holder or (y) to a Lender or Holder that is an Affiliate of Agent) without first offering to Agent and Agent’s designees an opportunity to purchase such Notes and/or Commitments at their fair market value (such fair market value to be reasonably determined by such transferring Lender or Holder and Agent, provided, that if such transferring Lender or
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Holder obtains a bona fide offer from a third party that is a permitted Assignee for such Notes and/or Commitments and such Lender or Holder is prepared to accept such offer, the fair market value shall be the price offered by such third party for such Notes and/or Commitments). Each such permitted Assignee shall be deemed to be the Lender (or, as provided below, a Holder) hereunder with respect to such assigned rights and obligations, and the Credit Parties shall ensure that such transferee is registered as a Holder and that any Liens on the Collateral shall be for the benefit of such Holder (as well as the other Holders of Notes). Notwithstanding anything in this Agreement to the contrary, Agent may from time to time update the Schedule of Lenders attached hereto to reflect any assignments made pursuant to this Section 13.8. For purposes of clarification, a Lender may assign all or a portion of such Lender’s outstanding Notes (and its corresponding rights and obligations hereunder in connection therewith) with or without an assignment of all or a portion of such Lender’s portion of the applicable Commitments. Any Assignee of all or a portion of a Lender’s outstanding Notes (and its corresponding rights and obligations hereunder in connection therewith) who shall not have also been assigned all or a portion of such Lender’s Commitment(s) (such assignment, a “Principal Only Assignment”), shall be deemed a “Holder” and not a “Lender” hereunder, and all or such portion of the Notes held by such Lender that shall have been assigned to such Holder pursuant to the Principal Only Assignment shall be evidenced by and entitled to the benefits of this Agreement and, if requested by such Holder, a Note payable to such Holder in an amount equal to the principal amount of outstanding Notes as shall have been assigned to such Holder pursuant to such Principal Only Assignment. For the avoidance of doubt, any Assignee of a Principal Only Assignment shall have no obligation to fund or advance any draws under this Agreement or any Note. For purposes of determining whether the Borrowers have reached the Maximum US Term Note Commitment, Maximum UK Term Note Commitment, and/or Maximum Fourth Tranche US Last Out Term Note Commitment hereunder, any principal amount of Notes outstanding with respect to a Principal Only Assignment shall be included in such determination. In connection with any permitted assignment by a Holder of some or all of its rights and obligations hereunder, upon the request of such Holder, the Borrowers shall cause to be delivered to the Assignee thereof either (i) a letter from Outside Legal Counsel indicating that it may rely upon the opinion letter delivered by it pursuant to Section 5.1(f)(i) or (ii) an opinion from other legal counsel reasonably acceptable to the Assignee to the effect of such opinion letter, in either case dated on or before the effective date of such assignment. Notwithstanding anything in the Transaction Documents to the contrary, (i) no lender to or funding or financing source of a Lender, a Holder or any of their Affiliates shall have any obligation to purchase Notes, (ii) there shall be no limitation or restriction or consent right on a Lender's or Holder’s ability to assign or otherwise transfer any Transaction Document, Note or Obligation to an Affiliate or lender or funding or financing source, and (iii) there shall be no limitation or restriction or consent rights on such Affiliates’ or lenders’ or financing or funding sources’ ability to assign or otherwise transfer any Transaction Document, Note or Obligation (or any of its rights thereunder or interest therein). In addition to the other rights provided in this Section 13.8, each Lender may, without notice to or consent from Agent or the Borrower Representative, sell participations to
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one or more Persons in or to all or a portion of its rights and obligations under the Transaction Documents (including all its rights and obligations with respect to the Notes); provided, however, that, whether as a result of any term of any Transaction Document or of such participation, (i) no such participant shall have a commitment, or be deemed to have made an offer to commit, to fund draws under the Notes hereunder, and, except as provided in the applicable participation agreement, none shall be liable for any obligation of such Lender hereunder, (ii) such Lender’s rights and obligations, and the rights and obligations of the Credit Parties and the Agent and other Lenders towards such Lender, under any Transaction Document shall remain unchanged and each other party hereto shall continue to deal solely with such Lender, which shall remain the holder of the applicable Obligations in the Register, except that each such participant shall be entitled to the benefit of Section 2.6; provided, however, that in no case shall a participant have the right to enforce any of the terms of any Transaction Document, and (iii) the consent of such participant shall not be required (either directly, as a restraint on such Lender’s ability to consent hereunder or otherwise) for any amendments, waivers or consents with respect to any Transaction Document or to exercise or refrain from exercising any powers or rights such Lender may have under or in respect of the Transaction Documents (including the right to enforce or direct enforcement of the Obligations). Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Borrowers, 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 Notes or other obligations under the Transaction Documents (the “Participant Register”); provided, that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any participant or any information relating to a participant's interest in any commitments, loans, letters of credit or its other obligations under any Transaction Document) to any Person other than Agent except to the extent that such disclosure is necessary to establish that such commitment, loan, letter of credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations and Sections 163(f), 871(h)(2) and 881(c)(2) of the Code and any related Treasury regulations promulgated thereunder. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, Agent shall have no responsibility for maintaining a Participant Register.
Section 13.9No Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.
Section 13.10Survival. The representations, warranties, agreements and covenants of the Credit Parties and the Lenders contained in the Transaction Documents shall survive the Fifth Restatement Closing. Each Lender and each Holder shall be responsible only for its own agreements and covenants hereunder.
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Section 13.11Further Assurances. Each Credit Party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as any other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.
Section 13.12Indemnification. In consideration of the Agent’s and each Lender’s execution and delivery of the Transaction Documents and acquisition of the Securities hereunder and in addition to all of the Credit Parties’ other obligations under the Transaction Documents, subject to the 956 Limitations, the Credit Parties shall jointly and severally defend, protect, indemnify and hold harmless the Agent, each Lender, each other Holder, each of their respective Affiliates and all of their respective stockholders, equity holders, partners, members, managers, investment managers, officers, directors, employees, principals, advisory board members, and direct or indirect investors and any of the foregoing Persons’ agentspredecessors, successors, assigns, agents, attorneys (up to an aggregate amount of $250,000 pursuant to this Section 13.12 and Section 13.12 in the FinWise Financing Agreement, the Elastic Financing Agreement and the CC Financing Agreement), consultants, advisors, accountants, investment bankers or other representatives (including, without limitation, those retained in connection with the transactions contemplated by this Agreement) (collectively, the “Indemnitees”) from and against any and all actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages, and expenses in connection therewith (irrespective of whether any such Indemnitee is a party to the action for which indemnification hereunder is sought), and including reasonable attorneys’ fees and disbursements (the “Indemnified Liabilities”), incurred by any Indemnitee as a result of, or arising out of, or relating to (a) any misrepresentation or breach of any representation or warranty made by any Credit Party in this Agreement, any other Transaction Documents, any Bank Transaction Documents or any other certificate, instrument or document contemplated hereby or thereby, (b) any breach of any covenant, agreement or obligation of any Credit Party contained in this Agreement, any other Transaction Documents, any Bank Transaction Documents or any other certificate, instrument or document contemplated hereby or thereby, (c) the present or former status of any Credit Party as a U.S. real property holding corporation for federal income tax purposes within the meaning of Section 897 of the Internal Revenue Code of 1986, as amended, if applicable, (d) the Program and the Requirements and transactions otherwise contemplated by or further described in the Transaction Documents or any Bank Transaction Documents, including, without limitation, as a result of any litigation or administrative proceeding before any court or governmental or administrative body presently pending or threatened against any Indemnitee as a result of or arising from the foregoing, (e) the imposition of any Non-Excluded Taxes imposed on amounts payable under the Transaction Documents paid by such Indemnitee and any liabilities arising therefrom or with respect thereto, whether or not such Non-Excluded Taxes were correctly or legally asserted, (f) any improper use or disclosure or unlawful use or disclosure of Customer Information by a Credit Party or (g) any action, cause of action, suit or claim, claim, demand, request for documents and/or information, regulatory review, subpoena, investigation, inquiry, civil investigatory demand, litigation or proceeding brought or made against such Indemnitee by a third party (including for these purposes a derivative action brought on behalf of any Credit Party) and arising out of or resulting from (i) the execution, delivery, performance or enforcement of this Agreement, any other Transaction
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Documents, any Bank Transaction Documents or any other certificate, instrument or document contemplated hereby or thereby, (ii) any transaction financed or to be financed in whole or in part, directly or indirectly, with the proceeds of the Securities, or (iii) the status of such Lender or Holder as a lender to the Borrowers pursuant to the transactions contemplated by the Transaction Documents or any Bank Transaction Documents. To the extent that the foregoing undertakings by the Credit Parties may be unenforceable for any reason, the Credit Parties shall make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law. No Credit Party shall assert, and each waives, any claim against the Indemnitees on any theory of liability for special, indirect, consequential or punitive damages arising out of, in connection with or as a result of, this Agreement of any of the other Transaction Documents or the transactions contemplated hereby or thereby. The agreements in this Section 13.12 shall survive the payment of the Obligations and the termination of the Commitments, this Agreement and the other Transaction Documents and the Bank Transaction Documents. For the avoidance of doubt, the obligations and agreements of the Credit Parties under this Section 13.12 shall constitute “Obligations” hereunder and the other Transaction Documents.
Section 13.13No Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party.
Section 13.14Waiver. No failure or delay on the part of the Agent, any Holder or any Lender in the exercise of any power, right or privilege hereunder or any of the other Transaction Documents shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege.
Section 13.15Payment Set Aside. To the extent that any of the Credit Parties makes a payment or payments to the Agent, the Holders or the Lenders hereunder or pursuant to any of the other Transaction Documents or the Agent, the Holders or the Lenders enforce or exercise their rights hereunder or thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to any of the Credit Parties, a trustee, receiver or any other Person under any law (including, without limitation, any bankruptcy law, foreign, state or federal law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred.
Section 13.16Independent Nature of the Lenders’ and the Holders’ Obligations and Rights. The obligations of each Lender and each Holder under any Transaction Document are several and not joint with the obligations of any other Lender or Holder, and no Lender or Holder shall be responsible in any way for the performance of the obligations of any other Lender or Holder under any Transaction Document. Nothing contained herein or in any other Transaction
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Document, and no action taken by the Agent, any Lender or Holder pursuant hereto or thereto, shall be deemed to constitute the Agent, the Lenders and/or the Holders as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Agent, the Holders and/or the Lenders are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents and each of the Credit Parties acknowledges that the Agent, the Lenders and the Holders are not acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents. Each Lender and each Holder confirms that it has independently participated in the negotiation of the transactions contemplated hereby with the advice of its own counsel and advisors. Each Lender and each Holder shall be entitled to independently protect and enforce its rights, including, without limitation, the rights arising out of this Agreement or out of any other Transaction Documents, and it shall not be necessary for any other Lender or Holder to be joined as an additional party in any proceeding for such purpose.
Section 13.17Set-off; Sharing of Payments.
(a)Each of Agent, each Lender, each Holder and each Affiliate (including each branch office thereof) of any of them is hereby authorized, without notice or demand (each of which is hereby waived by each Credit Party), at any time and from time to time during the continuance of any Event of Default and to the fullest extent permitted by applicable Requirements, to set off and apply any and all deposits (whether general or special, time or demand, provisional or final) at any time held and other Indebtedness, claims or other obligations at any time owing by Agent, such Lender, such Holder or any of their respective Affiliates to or for the credit or the account of any Borrower or any other Credit Party against any Obligation of any Credit Party now or hereafter existing, whether or not any demand was made under any Transaction Document with respect to such Obligation and even though such Obligation may be unmatured. No Lender or Holder shall exercise any such right of setoff without the prior consent of Agent. Each of Agent, each Lender and each Holder agrees promptly to notify the Borrower Representative and Agent after any such setoff and application made by such Lender, Holder or its Affiliates; provided, however, that the failure to give such notice shall not affect the validity of such setoff and application. The rights under this Section 13.7(a) are in addition to any other rights and remedies (including other rights of setoff) that Agent, the Lenders, the Holders or their Affiliates, may have.
(b)If any Lender or Holder, directly or through an Affiliate or branch office thereof, obtains any payment of any Obligation of any Credit Party (whether voluntary, involuntary or through the exercise of any right of setoff or the receipt of any Collateral or “proceeds” (as defined under the applicable UCC) of Collateral) other than pursuant to Sections 2.6 or 13.8 and such payment exceeds the amount such Lender or Holder would have been entitled to receive if all payments had gone to, and been distributed by, Agent in accordance with the provisions of the Transaction Documents, such Lender or Holder shall purchase for cash from other Lenders or Holders such participations in their Obligations as necessary for such Lender or Holder to share such excess payment with such Lenders or Holders to ensure such payment is applied as though it had been received by Agent and applied in accordance with this Agreement (or, if such application would then be at the discretion of the Borrower
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Representative, applied to repay the Obligations in accordance herewith); provided, however, that (i) if such payment is rescinded or otherwise recovered from such Lender or Holder in whole or in part, such purchase shall be rescinded and the purchase price therefor shall be returned to such Lender or Holder without interest and (ii) such Lender or Holder shall, to the fullest extent permitted by applicable Requirements, be able to exercise all its rights of payment (including the right of setoff) with respect to such participation as fully as if such Lender or Holder were the direct creditor of the applicable Credit Party in the amount of such participation.

Section 13.18Reserved.
Section 13.19Reaffirmation. Anything contained herein to the contrary notwithstanding, this Agreement is not intended to and shall not serve to effect a novation of the “Obligations” (as defined in the Fourth Amended and Restated Financing Agreement). Instead, it is the express intention of the parties hereto to reaffirm the indebtedness, obligations and liabilities created under the Original Financing Agreement (as defined in the Second Amended and Restated Financing Agreement), the Second Amended and Restated Financing Agreement, the Third Amended and Restated Financing Agreement, the Fourth Amended and Restated Financing Agreement and the Notes, which are evidenced by the Notes and secured by the Collateral. Each Credit Party acknowledges, ratifies, reaffirms and confirms that the Liens and security interests granted pursuant to the Security Documents secure the indebtedness, liabilities and obligations of the Credit Parties to the Agent, the Lenders and Holders under the Notes, the Original Financing Agreement (as defined in the Second Amended and Restated Financing Agreement), the Second Amended and Restated Financing Agreement, the Third Amended and Restated Financing Agreement and the Fourth Amended and Restated Financing Agreement, as amended and restated pursuant to the Notes and this Agreement, respectively (except that the grants of security interests, mortgages and Liens under and pursuant to the Security Documents (including previous grants of security interests, mortgages and Liens under and pursuant to the Security Documents as defined in the Original Financing Agreement (as defined in the Second Amended and Restated Financing Agreement), the Second Amended and Restated Financing Agreement, Third Amended and Restated Financing Agreement or the Fourth Amended and Restated Financing Agreement) shall continue unaltered, and each other Transaction Document (including (a) any Notes previously issued and outstanding prior to the date hereof and (b) the Transactions Documents as such term is defined in the Original Financing Agreement (as defined in the Second Amended and Restated Financing Agreement), the Second Amended and Restated Financing Agreement, the Third Amended and Restated Financing Agreement or the Fourth Amended and Restated Financing Agreement) shall continue in full force and effect in accordance with its terms unless otherwise amended by the parties thereto, and the parties hereto hereby acknowledge, ratify, reaffirm and confirm the terms thereof as being in full force and effect and unaltered by this Agreement), that the term “Obligations” as used in the Transaction Documents (including the Transactions Documents as such term is defined in the Original Financing Agreement (as defined in the Second Amended and Restated Financing Agreement), the Second Amended and Restated Financing Agreement, the Third Amended and Restated Financing Agreement or the Fourth Amended and Restated Financing Agreement) (or any other term used therein to describe or refer to the indebtedness, liabilities and obligations of the Credit Parties to the Agent and the Lenders and Holders) includes the indebtedness, liabilities and
128

obligations of the Credit Parties under this Agreement and the Notes delivered or reaffirmed hereunder, and under the Notes, the Original Financing Agreement (as defined in the Second Amended and Restated Financing Agreement), the Second Amended and Restated Financing Agreement, the Third Amended and Restated Financing Agreement and the Fourth Amended and Restated Financing Agreement, as amended and restated pursuant to the Notes and this Agreement, respectively, as the same further may be amended, modified, supplemented and/or restated from time to time and the parties hereto hereby acknowledge, ratify, reaffirm and confirm that all of such security interests, mortgages and Liens are intended and shall be deemed and construed to secure to the fullest extent set forth therein all now existing and hereafter arising Obligations under and as defined in this Agreement, as hereafter amended, modified, supplemented and/or restated from time to time. The Transaction Documents and all agreements, instruments and documents executed or delivered in connection with any of the foregoing shall each be deemed to be amended to the extent necessary to give effect to the provisions of this Section 13.19. Each reference to the “Financing Agreement” or the “Notes” in any Transaction Document shall mean and be a reference to this Agreement and the Notes issued or reaffirmed hereunder, respectively (as each may be further amended, restated, supplemented or otherwise modified from time to time). Cross-references in the Transaction Documents to particular section numbers in the Original Financing Agreement (as defined in the Second Amended and Restated Financing Agreement), the Second Amended and Restated Financing Agreement, the Third Amended and Restated Financing Agreement or the Fourth Amended and Restated Financing Agreement, as applicable, shall be deemed to be cross-references to the corresponding sections, as applicable, of this Agreement.
Section 13.20Release of Agent and Lenders. Notwithstanding any other provision of this Agreement or any other Transaction Document, each Credit Party voluntarily, knowingly, unconditionally and irrevocably, with specific and express intent, for and on behalf of itself, its managers, members, directors, officers, employees, stockholders, Affiliates, agents, representatives, auditors, attorneys, successors and assigns, fiduciaries, principals, investment managers, investors and their respective Affiliates (collectively, the “Releasing Parties”), hereby fully and completely releases and forever discharges Agent, each Lender, each Holder, their respective successors and assigns and their respective directors, officers, agents, employees, advisors, shareholders, attorneys and Affiliates and any other Person or insurer which may be responsible or liable for the acts or omissions of any of them, or who may be liable for the injury or damage resulting therefrom (collectively, the “Released Parties”), of and from any and all actions, causes of action, damages, claims, obligations, liabilities, costs, expenses and demands of any kind whatsoever, at law or in equity, matured or unmatured, vested or contingent, that any of the Releasing Parties has against any of the Released Parties as of the date hereof. Each Credit Party acknowledges the foregoing release is a material inducement to Agent, each Lender’s and each Holder's decision to extend to Borrowers the financial accommodations hereunder and has been relied upon by the Agent, each Holder and each Lender in agreeing to purchase the Notes.
Section 13.21Buy-Out Option. Each Last Out Note Holder hereby agrees that:
129

(a)at any time on or after the date that the Agent shall have voted in favor of any waiver, amendment, consent, request or election relating to this Agreement or any other Transaction Document that requires the affirmative vote of each of the Last Out Note Holders under Section 13.6 of this Agreement, which affirmative vote of each of the Last Out Note Holders shall not have been received (the “Holdout Buy-Out”) (the Last Out Note Holders (who failed to provide such vote) whose interest in the Fourth Tranche US Last Out Term Notes that the First Out Note Holders elect to purchase in connection with the Holdout Buy-Out, each a “Holdout Last Out Note Holder” and collectively, the “Holdout Last Out Note Holders”), then any of the First Out Note Holders (each, a “Committed First Out Note Holder” and collectively, the “Committed First Out Note Holders”) shall have the right by giving a written notice (a “First Out Committed Buy-Out Notice”; it being understood that the First Out Note Holders shall have no obligation to send a First Out Committed Buy-Out Notice) to the Last Out Note Holders to acquire (ratably in proportion to their respective pro rata shares of the First Out Notes or as shall otherwise be determined by the Agent) on or before the date that is 10 Business Days after the date of the Last Out Note Holders’ receipt of such First Out Committed Buy-Out Notice, from the Last Out Note Holders of the right, title, and interest of the Last Out Note Holders (or, with respect to the Holdout Buy-Out, of the Holdout Last Out Note Holders only) in and to the Fourth Tranche US Last Out Term Notes; provided, however, that if any First Out Note Holder elects not to participate in the buy-out contemplated by this Section 13.21, any other First Out Note Holder (or such other Person(s) designated by the Agent) may purchase the ratable portion of the Fourth Tranche US Last Out Term Notes that such declining First Out Note Holder otherwise would have been entitled to purchase.
(b)Upon the receipt by the Last Out Note Holders of the First Out Committed Buy-Out Notice, the Committed First Out Note Holders that have elected to participate in the buy-out contemplated in this Section 13.21 shall irrevocably be committed to acquire from the Last Out Note Holders (or, with respect to the Holdout Buy-Out, from the Holdout Last Out Note Holders only) on the date specified by the First Out Note Holders in the First Out Committed Buy-Out Notice (which date shall be within 10 Business Days after receipt by the Last Out Note Holders of the First Out Committed Buy-Out Notice) all (but not less than all) of the right, title, and interest of the Last Out Note Holders (or, with respect to the Holdout Buy-Out, from the Holdout Last Out Note Holders only) in and to the Fourth Tranche US Last Out Notes by paying to the Last Out Note Holders (or, with respect to the Holdout Buy-Out, the applicable Holdout Last Out Note Holder only), in cash a purchase price (the “First Out Purchase Price”) equal to the sum of:
(i)100% of the outstanding balance with respect to the Fourth Tranche US Last Out Term Notes (or, with respect to the Holdout Buy-Out, 100% of the Holdout Last Out Note Holders’ pro rata share of the outstanding balance with respect to Fourth Tranche US Last Out Term Notes), including, without limitation, principal, interest accrued and unpaid thereon, and any unpaid fees, to the extent earned or due and payable in accordance with the Transaction Documents, and
        (ii)    all expenses to the extent owing to the Last Out Note Holders (or, with respect to the Holdout Buy-Out, to the Holdout Last Out Note Holders only) in accordance with the Transaction Documents;
130

whereupon the Last Out Note Holders (or, with respect to the Holdout Buy-Out, the Holdout Last Out Note Holders) shall assign to the Committed First Out Note Holders who have elected to participate in the buy-out contemplated by this Section 13.21, without any representation, recourse, or warranty whatsoever (except that each Last Out Note Holder (or, with respect to the Holdout Buy-Out, each Holdout Last Out Note Holder) shall warrant to the Committed First Out Note Holders that (A) the amount quoted by such Last Out Note Holder or such Holdout Last Out Note Holder (as the case may be) as its portion of the First Out Purchase Price represents the amount shown as owing with respect to the claims transferred as reflected on its books and records, (B) it owns, or has the right to transfer to the Committed First Out Note Holders, the rights being transferred, (C) the assets being transferred will be free and clear of Liens, and (D) no approval of any Governmental Authority is required for the sale or transfer of the Fourth Tranche US Last Out Term Notes), its right, title, and interest with respect to the Fourth Tranche US Last Out Term Notes.
(c)The assignment by the Last Out Note Holders (or, with respect to the Holdout Buy-Out, the Holdout Last Out Note Holders) of their right, title, and interest with respect to the Fourth Tranche US Last Out Term Notes shall be at no expense to the First Out Note Holders. In connection with such assignment, the applicable Last Out Note Holders (or, with respect to the Holdout Buy-Out, the Holdout Last Out Note Holders) shall deliver to the First Out Note Holders their original Fourth Tranche US Last Out Term Notes and shall execute such other customary documents, instruments, and agreements reasonably necessary to effect such assignment, whereupon the Last Out Note Holders (or, with respect to the Holdout Buy-Out, the Holdout Last Out Note Holders) shall be relieved from any further duties, obligations, or liabilities to the First Out Note Holders pursuant to this Agreement.
(d)Anything in this Agreement to the contrary notwithstanding, each First Out Note Holder and each Last Out Note Holder hereby agree that the Committed First Out Note Holders may (i) subject to the terms of this Agreement, assign and delegate to any assignee any of the rights and obligations acquired by the First Out Note Holders as a result of the exercise of their rights pursuant to this Section 13.21 and (ii) offer the right to each other First Out Note Holder to participate in such purchase by the First Out Note Holders pursuant to this Section 13.21 in proportion to their respective pro rata shares of the First Out Notes.

Section 13.22Replacement of Lenders and Holders. If any Lender or Holder (other than a Lender or Holder that is an Affiliate of Agent) fails to approve any consent, waiver, amendment or other modification to any Transaction Document that (a) requires the approval of all or all directly affected Lenders and/or Holders, as applicable and (b) has been approved by the Required Lenders (or Agent on behalf of Required Lenders), the Borrower Representative (with notice to Agent) or Agent may, at its option, upon notice to such Lender or Holder and, solely to the extent requested by such Lender or Holder, delivery to such Lender or Holder of copies of Borrowers’ and Agent’s executed signature page to such consent, waiver, amendment or modification (or, to the extent Required Lenders are directly executing such consent, waiver, amendment or modification, copies of Required Lenders’ executed signature pages to such consent, waiver, amendment or modification), require such Lender or Holder (at its sole expense) to assign and delegate, without recourse (in accordance with and subject to the restrictions
131

contained in, and consent required by, Section 13.8), all of its interests, rights and obligations under this Agreement and the other Transaction Documents (including, without limitation, all of its Commitment and/or Notes, as applicable) to an Assignee acceptable to Agent; provided, that such replaced Lender or Holder, as applicable, shall have received payment of an amount equal to the aggregate outstanding principal of its Notes, accrued and unpaid interest thereon, accrued and unpaid fees and all other amounts payable to it hereunder, in each case, as of the date of such assignment, from such Assignee (to the extent of such outstanding principal and accrued and unpaid interest and fees) or the applicable Borrowers (in the case of all other amounts). In the event that a replaced Lender or Holder does not execute an assignment pursuant to Section 13.8 within five (5) Business Days after receipt by such replaced Lender or Holder of notice of replacement pursuant to this Section 13.22 and presentation to such replaced Lender or Holder, as applicable, of an assignment agreement evidencing an assignment pursuant to this Section 13.22, the Agent shall be entitled (but not obligated) to execute such an assignment agreement on behalf of such replaced Lender or Holder, as applicable, and any such assignment agreement so executed by the replacement Lender or Holder, as applicable, Agent and, to the extent required by Section 13.8, Borrower Representative, shall be effective for purposes of this Section 13.22 and Section 13.8. Upon any such assignment and payment and compliance with the other provisions of Section 13.8, such replaced Lender or Holder, as applicable, shall no longer constitute a “Lender” or “Holder”, as the case may be, for purposes hereof; provided, any rights of such replaced Lender or Holder to indemnification by the Credit Parties hereunder shall survive.
Section 13.23Creditor Debtor Relationship
. The relationship between Agent, each Lender and each Holder, on the one hand, and the Credit Parties, on the other hand, is solely that of creditor and debtor. None of the Agent, any Lender or any Holder has any advisory or fiduciary relationship or duty to any Credit Party or to any Credit Party’s business associates arising out of or in connection with, and there is no agency, tenancy or joint venture relationship between the Agent, any Lender or any Holder and the Credit Parties by virtue of, any Transaction Document or any transaction contemplated therein. Nothing contained herein or in any other Transaction Document, and no action taken by the Agent, any Lender or any Holder pursuant hereto or thereto, shall be deemed to constitute the Agent, the Lenders and/or the Holders as a partnership, an association, a joint venture or any other kind of entity with any of the Credit Parties, or create a presumption that the Agent, the Holders and/or the Lenders are in any way acting in concert or as a group with any of the Credit Parties with respect to the transactions contemplated by the Transaction Documents. None of the Agent, any Lender or any Holder has been involved in the structuring, negotiation or implementation of the business of the Credit Parties or given any advice to the Credit Parties or any of the Credit Party’s business associates with respect to the Credit Parties structuring, negotiating, implementing and operating their respective businesses, and the Credit Parties have relied solely on the advice of their own counsel in structuring, negotiating, implementing and operating their respective businesses. Without characterizing the relationship between Agent, each Lender and each Holder, on the one hand, and the Credit Parties, on the other hand, as anything other than that of creditor and debtor, in the event the nature of such relationship between Agent, each Lender and each Holder, on the one hand, and the Credit Parties, on the other hand, shall ever be
132

challenged and recharacterized as an equity, ownership, advisory or any other type of relationship, it is agreed and understood that the Agent, each Lender and each Holder shall solely be considered a passive investor with respect to the Credit Parties.
[Signature Pages Follow]

133

IN WITNESS WHEREOF, each party has caused its signature page to this Fourth Amended and Restated Financing Agreement to be duly executed as of the date first written above.
US TERM NOTE BORROWERS:

RISE SPV, LLC, a Delaware limited liability company, as a US Term Note Borrower

By: Elevate Credit, Inc., a Delaware
Corporation, its Sole Member
By:                            
Name:    Jason Harvison
Title:    Chief Executive Officer

TODAY CARD, LLC, a Delaware limited liability company, as a US Term Note Borrower

By: Elevate Credit, Inc., a Delaware
Corporation, its Sole Member

By:                            
Name:    Jason Harvison
Title:    Chief Executive Officer

UK BORROWER:

ELEVATE CREDIT INTERNATIONAL LTD., a company incorporated under the laws of England with number 05041905, as the UK Borrower

By:                            
Name:                            
Title:                            

US LAST OUT TERM NOTE BORROWER:

ELEVATE CREDIT SERVICE, LLC, a Delaware limited liability company, as the US Last Out Term Note Borrower

By:    Elevate Credit, Inc., as Sole Member
By:                            
Name:    Jason Harvison
Title:    Chief Executive Officer
Fifth Amended and Restated Financing Agreement


IN WITNESS WHEREOF, each party has caused its signature page to this Fourth Amended and Restated Financing Agreement to be duly executed as of the date first written above.

GUARANTORS:

ELEVATE CREDIT, INC.

By:                            
Name:    Jason Harvison
Title:    Chief Executive Officer
ELASTIC FINANCIAL, LLC
ELEVATE DECISION SCIENCES, LLC
RISE CREDIT, LLC
FINANCIAL EDUCATION, LLC
EF FINANCIAL, LLC

    By: Elevate Credit, Inc., as Sole Member of each of the above-named entities

By:                            
Name:    Jason Harvison
Title:    Chief Executive Officer
RISE CREDIT SERVICE OF OHIO, LLC
RISE CREDIT SERVICE OF TEXAS, LLC

    By: RISE Credit, LLC, as Sole Member of each of the above-named entities

By: Elevate Credit, Inc., as its Sole Member

By:                            
Name:    Jason Harvison
Title:    Chief Executive Officer




Fifth Amended and Restated Financing Agreement

IN WITNESS WHEREOF, each party has caused its signature page to this Fourth Amended and Restated Financing Agreement to be duly executed as of the date first written above.
GUARANTORS (CONT.), EACH AS AN “ELEVATE CREDIT SUBSIDIARY”:


RISE FINANCIAL, LLC
RISE CREDIT OF ALABAMA, LLC
RISE CREDIT OF ARIZONA, LLC
RISE CREDIT OF CALIFORNIA, LLC
RISE CREDIT OF COLORADO, LLC
RISE CREDIT OF DELAWARE, LLC
RISE CREDIT OF FLORIDA, LLC
RISE CREDIT OF GEORGIA, LLC
RISE CREDIT OF IDAHO, LLC
RISE CREDIT OF ILLINOIS, LLC
RISE CREDIT OF KANSAS, LLC
RISE CREDIT OF LOUISIANA, LLC
RISE CREDIT OF MISSISSIPPI, LLC
RISE CREDIT OF MISSOURI, LLC
RISE CREDIT OF NEBRASKA, LLC
RISE CREDIT OF NEVADA, LLC
RISE CREDIT OF NORTH DAKOTA, LLC
RISE CREDIT OF OKLAHOMA, LLC
RISE CREDIT OF SOUTH CAROLINA, LLC
RISE CREDIT OF SOUTH DAKOTA, LLC
RISE CREDIT OF TENNESSEE, LLC
RISE CREDIT OF TEXAS, LLC
RISE CREDIT OF UTAH, LLC
RISE CREDIT OF VIRGINIA, LLC
By: RISE SPV, LLC, as Sole Member of each of the above-named entities

By: Elevate Credit, Inc., as its Sole Member


By:                            
Name:    Jason Harvison
Title:    Chief Executive Officer

Fifth Amended and Restated Financing Agreement

IN WITNESS WHEREOF, each party has caused its signature page to this Fourth Amended and Restated Financing Agreement to be duly executed as of the date first written above.

GUARANTORS (CONT.), EACH AS AN “ELEVATE CREDIT SUBSIDIARY”:

ELASTIC LOUISVILLE, LLC
ELEVATE ADMIN, LLC
ELASTIC MARKETING, LLC
By:    Elastic Financial, LLC, as Sole Member of each of the above-named entities

By:    Elevate Credit, Inc., as its Sole Member

By:                            
Name:    Jason Harvison
Title:    Chief Executive Officer

EF MARKETING, LLC

By: EF Financial, LLC, as its Sole Member

By: Elevate Credit, Inc., as its Sole Member

By:                            
Name:    Jason Harvison
Title:    Chief Executive Officer

TODAY MARKETING, LLC
TODAY SPV, LLC

By: Today Card, LLC, as its Sole Member

By: Elevate Credit, Inc., as its Sole Member

By:                            
Name:    Jason Harvison
Title:    Chief Executive Officer


Fifth Amended and Restated Financing Agreement

IN WITNESS WHEREOF, each party has caused its signature page to this Fourth Amended and Restated Financing Agreement to be duly executed as of the date first written above.

AGENT:

VICTORY PARK MANAGEMENT, LLC

By:                            
Name:     Scott R. Zemnick
Title:     Authorized Signatory


LENDERS:

VPC ONSHORE SPECIALTY FINANCE FUND II, L.P.

By:     VPC Specialty Finance Fund GP II, L.P.
Its:     General Partner

By:     VPC Specialty Finance Fund UGP II, LLC
Its:     General Partner

By:    ___________________________________
Name:    Scott R. Zemnick
Title:    General Counsel

VPC SPECIALTY LENDING INVESTMENTS INTERMEDIATE, L.P.

By:     VPC Specialty Lending Investments     Intermediate GP, LLC
Its:     General Partner

By:    Victory Park Management, LLC
Its:     Manager

By: ___________________________________
Name: Scott R. Zemnick
Title: Manager

Fifth Amended and Restated Financing Agreement


SCHEDULE OF LENDERS
1.    US Term Notes
(1) (2) (3) (4) (5)
Lender/Holder Address and Facsimile Number Commitment to Fund Draws under US Term Notes as of Fifth Restatement Closing Date: Outstanding Principal Amount under US Term Notes as of Fifth Restatement Closing: Legal Representative’s Address and Facsimile Number
VPC Onshore Specialty Finance Fund II, L.P.
150 N. Riverside Plaza
Suite 5200
Chicago, IL 60606
Telephone: 312.705.2786
Facsimile: 312.701.0794
Attention: Scott R. Zemnick
E-mail: szemnick@vpcadvisors.com

$143,000,000.00 $44,793,822.52
Katten Muchin Rosenman LLP
525 West Monroe Street
Chicago, IL 60661
Telephone:    (312) 902-5297
    (312) 902-5495
Facsimile:    (312) 577-8964
    (312) 577-8854
Attention:    Mark R. Grossmann
    Scott E. Lyons
E-mail:    mg@kattenlaw.com
    scott.lyons@kattenlaw.com
VPC Specialty Lending Fund (NE), Ltd.
150 N. Riverside Plaza
Suite 5200
Chicago, IL 60606
Telephone: 312.705.2786
Facsimile: 312.701.0794
Attention: Scott R. Zemnick
E-mail: szemnick@vpcadvisors.com

$0.00 $3,387,466.54
Katten Muchin Rosenman LLP
525 West Monroe Street
Chicago, IL 60661
Telephone:    (312) 902-5297
    (312) 902-5495
Facsimile:    (312) 577-8964
    (312) 577-8854
Attention:    Mark R. Grossmann
    Scott E. Lyons
E-mail:    mg@kattenlaw.com
    scott.lyons@kattenlaw.com
Schedule - 1



VPC Special Opportunities Fund III Onshore, L.P.
150 N. Riverside Plaza
Suite 5200
Chicago, IL 60606
Telephone: 312.705.2786
Facsimile: 312.701.0794
Attention: Scott R. Zemnick
E-mail: szemnick@vpcadvisors.com

$0.00 $419,120.08
Katten Muchin Rosenman LLP
525 West Monroe Street
Chicago, IL 60661
Telephone:    (312) 902-5297
    (312) 902-5495
Facsimile:    (312) 577-8964
    (312) 577-8854
Attention:    Mark R. Grossmann
    Scott E. Lyons
E-mail:    mg@kattenlaw.com
    scott.lyons@kattenlaw.com
VPC Investor Fund B, LLC
150 N. Riverside Plaza
Suite 5200
Chicago, IL 60606
Telephone: 312.705.2786
Facsimile: 312.701.0794
Attention: Scott R. Zemnick
E-mail: szemnick@vpcadvisors.com

$0.00 $69,668,193.83
Katten Muchin Rosenman LLP
525 West Monroe Street
Chicago, IL 60661
Telephone:    (312) 902-5297
    (312) 902-5495
Facsimile:    (312) 577-8964
    (312) 577-8854
Attention:    Mark R. Grossmann
    Scott E. Lyons
E-mail:    mg@kattenlaw.com
    scott.lyons@kattenlaw.com
VPC Investor Fund C, L.P.
150 N. Riverside Plaza
Suite 5200
Chicago, IL 60606
Telephone: 312.705.2786
Facsimile: 312.701.0794
Attention: Scott R. Zemnick
E-mail: szemnick@vpcadvisors.com

$0.00 $28,366,350.24
Katten Muchin Rosenman LLP
525 West Monroe Street
Chicago, IL 60661
Telephone:    (312) 902-5297
    (312) 902-5495
Facsimile:    (312) 577-8964
    (312) 577-8854
Attention:    Mark R. Grossmann
    Scott E. Lyons
E-mail:    mg@kattenlaw.com
    scott.lyons@kattenlaw.com
Schedule - 2



VPC Investor Fund G-1, L.P.
150 N. Riverside Plaza
Suite 5200
Chicago, IL 60606
Telephone: 312.705.2786
Facsimile: 312.701.0794
Attention: Scott R. Zemnick
E-mail: szemnick@vpcadvisors.com

$0.00 $5,969,515.57
Katten Muchin Rosenman LLP
525 West Monroe Street
Chicago, IL 60661
Telephone:    (312) 902-5297
    (312) 902-5495
Facsimile:    (312) 577-8964
    (312) 577-8854
Attention:    Mark R. Grossmann
    Scott E. Lyons
E-mail:    mg@kattenlaw.com
    scott.lyons@kattenlaw.com
VPC Offshore Unleveraged Private Debt Fund, L.P.
150 N. Riverside Plaza
Suite 5200
Chicago, IL 60606
Telephone: 312.705.2786
Facsimile: 312.701.0794
Attention: Scott R. Zemnick
E-mail: szemnick@vpcadvisors.com

$0.00 $661,502.78
Katten Muchin Rosenman LLP
525 West Monroe Street
Chicago, IL 60661
Telephone:    (312) 902-5297
    (312) 902-5495
Facsimile:    (312) 577-8964
    (312) 577-8854
Attention:    Mark R. Grossmann
    Scott E. Lyons
E-mail:    mg@kattenlaw.com
    scott.lyons@kattenlaw.com
VPC Specialty Lending Investments Intermediate, L.P.
150 N. Riverside Plaza
Suite 5200
Chicago, IL 60606
Telephone: 312.705.2786
Facsimile: 312.701.0794
Attention: Scott R. Zemnick
E-mail: szemnick@vpcadvisors.com

$0.00 $22,934,028.44
Katten Muchin Rosenman LLP
525 West Monroe Street
Chicago, IL 60661
Telephone:    (312) 902-5297
    (312) 902-5495
Facsimile:    (312) 577-8964
    (312) 577-8854
Attention:    Mark R. Grossmann
    Scott E. Lyons
E-mail:    mg@kattenlaw.com
    scott.lyons@kattenlaw.com
[****] [****] [****] [****] [****]
[****] [****] [****] [****] [****]
[****] [****] [****] [****] [****]
Schedule - 3



Shaper Family Partnership
1800 West Loop South #360
Houston, TX 77027
Attention: Stephen Shaper



    
$0.00 $800,000.00 N/A
Aggregate Commitment to Fund Draws under US Term Notes as of Fifth Restatement Closing Date: $143,000,000.00
Aggregate Outstanding Principal Amount under US Term Notes as of Fifth Restatement Closing: $207,000,000.00


Schedule - 4



2.    
(a)    UK Term Notes (USD)
(1) (2) (3) (4) (5)
Lender Address and Facsimile Number Commitment to Fund Draws under UK Term Notes (USD) as of Fifth Restatement Closing Date: Outstanding Principal Amount under UK Term Notes (USD) as of Fifth Restatement Closing Date: Legal Representative’s Address and Facsimile Number
VPC Specialty Lending Fund (NE), Ltd.
150 N. Riverside Plaza
Suite 5200
Chicago, IL 60606
Telephone: 312.705.2786
Facsimile: 312.701.0794
Attention: Scott R. Zemnick
E-mail: szemnick@vpcadvisors.com

$0.00 $499,600.00
Katten Muchin Rosenman LLP
525 West Monroe Street
Chicago, IL 60661
Telephone:    (312) 902-5297
    (312) 902-5495
Facsimile:    (312) 577-8964
    (312) 577-8854
Attention:    Mark R. Grossmann
    Scott E. Lyons
E-mail:    mg@kattenlaw.com
    scott.lyons@kattenlaw.com
VPC Specialty Opportunities Fund III Onshore, L.P.
150 N. Riverside Plaza
Suite 5200
Chicago, IL 60606
Telephone: 312.705.2786
Facsimile: 312.701.0794
Attention: Scott R. Zemnick
E-mail: szemnick@vpcadvisors.com

$0.00 $799,300.00
Katten Muchin Rosenman LLP
525 West Monroe Street
Chicago, IL 60661
Telephone:    (312) 902-5297
    (312) 902-5495
Facsimile:    (312) 577-8964
    (312) 577-8854
Attention:    Mark R. Grossmann
    Scott E. Lyons
E-mail:    mg@kattenlaw.com
    scott.lyons@kattenlaw.com
Schedule - 5



VPC Investor Fund B, LLC
150 N. Riverside Plaza
Suite 5200
Chicago, IL 60606
Telephone: 312.705.2786
Facsimile: 312.701.0794
Attention: Scott R. Zemnick
E-mail: szemnick@vpcadvisors.com

$0.00 $6,200,000.00
Katten Muchin Rosenman LLP
525 West Monroe Street
Chicago, IL 60661
Telephone:    (312) 902-5297
    (312) 902-5495
Facsimile:    (312) 577-8964
    (312) 577-8854
Attention:    Mark R. Grossmann
    Scott E. Lyons
E-mail:    mg@kattenlaw.com
    scott.lyons@kattenlaw.com
VPC Investor Fund C, L.P.
150 N. Riverside Plaza
Suite 5200
Chicago, IL 60606
Telephone: 312.705.2786
Facsimile: 312.701.0794
Attention: Scott R. Zemnick
E-mail: szemnick@vpcadvisors.com

$0.00 $4,071,800.00
Katten Muchin Rosenman LLP
525 West Monroe Street
Chicago, IL 60661
Telephone:    (312) 902-5297
    (312) 902-5495
Facsimile:    (312) 577-8964
    (312) 577-8854
Attention:    Mark R. Grossmann
    Scott E. Lyons
E-mail:    mg@kattenlaw.com
    scott.lyons@kattenlaw.com
VPC Investor Fund G-1, L.P.
150 N. Riverside Plaza
Suite 5200
Chicago, IL 60606
Telephone: 312.705.2786
Facsimile: 312.701.0794
Attention: Scott R. Zemnick
E-mail: szemnick@vpcadvisors.com

$0.00 $649,900.00
Katten Muchin Rosenman LLP
525 West Monroe Street
Chicago, IL 60661
Telephone:    (312) 902-5297
    (312) 902-5495
Facsimile:    (312) 577-8964
    (312) 577-8854
Attention:    Mark R. Grossmann
    Scott E. Lyons
E-mail:    mg@kattenlaw.com
    scott.lyons@kattenlaw.com
Schedule - 6



VPC Offshore Unleveraged Private Debt Fund, L.P.
150 N. Riverside Plaza
Suite 5200
Chicago, IL 60606
Telephone: 312.705.2786
Facsimile: 312.701.0794
Attention: Scott R. Zemnick
E-mail: szemnick@vpcadvisors.com

$0.00 $9,361,400.00
Katten Muchin Rosenman LLP
525 West Monroe Street
Chicago, IL 60661
Telephone:    (312) 902-5297
    (312) 902-5495
Facsimile:    (312) 577-8964
    (312) 577-8854
Attention:    Mark R. Grossmann
    Scott E. Lyons
E-mail:    mg@kattenlaw.com
    scott.lyons@kattenlaw.com
VPC Onshore Specialty Finance Fund II, L.P.
150 N. Riverside Plaza
Suite 5200
Chicago, IL 60606
Telephone: 312.705.2786
Facsimile: 312.701.0794
Attention: Scott R. Zemnick
E-mail: szemnick@vpcadvisors.com

$0.00 $499,600.00
Katten Muchin Rosenman LLP
525 West Monroe Street
Chicago, IL 60661
Telephone:    (312) 902-5297
    (312) 902-5495
Facsimile:    (312) 577-8964
    (312) 577-8854
Attention:    Mark R. Grossmann
    Scott E. Lyons
E-mail:    mg@kattenlaw.com
    scott.lyons@kattenlaw.com
VPC Specialty Lending Investments Intermediate, L.P.
150 N. Riverside Plaza
Suite 5200
Chicago, IL 60606
Telephone: 312.705.2786
Facsimile: 312.701.0794
Attention: Scott R. Zemnick
E-mail: szemnick@vpcadvisors.com

$0.00 $4,700,000.00
Katten Muchin Rosenman LLP
525 West Monroe Street
Chicago, IL 60661
Telephone:    (312) 902-5297
    (312) 902-5495
Facsimile:    (312) 577-8964
    (312) 577-8854
Attention:    Mark R. Grossmann
    Scott E. Lyons
E-mail:    mg@kattenlaw.com
    scott.lyons@kattenlaw.com
Schedule - 7



Aggregate Commitment to Fund Draws under UK Term Notes (USD) as of Fifth Restatement Closing Date: $0.00
Aggregate Outstanding Principal Amount under UK Term Notes (USD) as of Fifth Restatement Closing Date: $26,781,600.00

Schedule - 8




(b)    UK Term Notes (GBP)
(1) (2) (3) (4) (5)
Lender Address and Facsimile Number Commitment to Fund Draws under UK Term Notes (GBP) as of Fifth Restatement Closing Date: Outstanding Principal Amount under UK Term Notes (GBP) as of Fifth Restatement Closing Date: Legal Representative’s Address and Facsimile Number
VPC Specialty Lending Investments Intermediate, L.P.
150 N. Riverside Plaza
Suite 5200
Chicago, IL 60606
Telephone: 312.705.2786
Facsimile: 312.701.0794
Attention: Scott R. Zemnick
E-mail: szemnick@vpcadvisors.com

£100,000,000.00 £9,747,470.82
Katten Muchin Rosenman LLP
525 West Monroe Street
Chicago, IL 60661
Telephone:    (312) 902-5297
    (312) 902-5495
Facsimile:    (312) 577-8964
    (312) 577-8854
Attention:    Mark R. Grossmann
    Scott E. Lyons
E-mail:    mg@kattenlaw.com
    scott.lyons@kattenlaw.com
Aggregate Commitment to Fund Draws under UK Term Notes (GBP) as of Fifth Restatement Closing Date: £100,000,000.00 Aggregate Outstanding Principal Amount under UK Term Notes (GBP) as of Fifth Restatement Closing Date: £9,747,470.82


Schedule - 9



3.    Fourth Tranche US Last Out Term Notes
(1) (2) (3) (4) (5)
Lender/Holder Address and Facsimile Number Commitment to Fund Draws under Fourth Tranche US Last Out Term Notes as of Fifth Restatement Closing Date: Outstanding Principal Amount under Fourth Tranche US Last Out Term Notes as of Fifth Restatement Closing Date: Legal Representative’s Address and Facsimile Number
VPC Specialty Lending Fund (NE), Ltd.
150 N. Riverside Plaza
Suite 5200
Chicago, IL 60606
Telephone: 312.705.2786
Facsimile: 312.701.0794
Attention: Scott R. Zemnick
E-mail: szemnick@vpcadvisors.com


$0.00 $824,100.00
Katten Muchin Rosenman LLP
525 West Monroe Street
Chicago, IL 60661
Telephone:    (312) 902-5297
    (312) 902-5495
Facsimile:    (312) 577-8964
    (312) 577-8854
Attention:    Mark R. Grossmann
    Scott E. Lyons
E-mail:    mg@kattenlaw.com
    scott.lyons@kattenlaw.com
VPC Special Opportunities Fund III Onshore, L.P.
150 N. Riverside Plaza
Suite 5200
Chicago, IL 60606
Telephone: 312.705.2786
Facsimile: 312.701.0794
Attention: Scott R. Zemnick
E-mail: szemnick@vpcadvisors.com


$0.00 $4,020,000.00
Katten Muchin Rosenman LLP
525 West Monroe Street
Chicago, IL 60661
Telephone:    (312) 902-5297
    (312) 902-5495
Facsimile:    (312) 577-8964
    (312) 577-8854
Attention:    Mark R. Grossmann
    Scott E. Lyons
E-mail:    mg@kattenlaw.com
    scott.lyons@kattenlaw.com
Schedule - 10



VPC Investor Fund B, LLC
150 N. Riverside Plaza
Suite 5200
Chicago, IL 60606
Telephone: 312.705.2786
Facsimile: 312.701.0794
Attention: Scott R. Zemnick
E-mail: szemnick@vpcadvisors.com


$0.00 $17,000,000.00
Katten Muchin Rosenman LLP
525 West Monroe Street
Chicago, IL 60661
Telephone:    (312) 902-5297
    (312) 902-5495
Facsimile:    (312) 577-8964
    (312) 577-8854
Attention:    Mark R. Grossmann
    Scott E. Lyons
E-mail:    mg@kattenlaw.com
    scott.lyons@kattenlaw.com
VPC Onshore Specialty Finance Fund II, L.P.
150 N. Riverside Plaza
Suite 5200
Chicago, IL 60606
Telephone: 312.705.2786
Facsimile: 312.701.0794
Attention: Scott R. Zemnick
E-mail: szemnick@vpcadvisors.com


$0.00 $3,783,900.00
Katten Muchin Rosenman LLP
525 West Monroe Street
Chicago, IL 60661
Telephone:    (312) 902-5297
    (312) 902-5495
Facsimile:    (312) 577-8964
    (312) 577-8854
Attention:    Mark R. Grossmann
    Scott E. Lyons
E-mail:    mg@kattenlaw.com
    scott.lyons@kattenlaw.com
VPC Specialty Lending Investments Intermediate, L.P.
150 N. Riverside Plaza
Suite 5200
Chicago, IL 60606
Telephone: 312.705.2786
Facsimile: 312.701.0794
Attention: Scott R. Zemnick
E-mail: szemnick@vpcadvisors.com


$0.00 $9,422,000.00
Katten Muchin Rosenman LLP
525 West Monroe Street
Chicago, IL 60661
Telephone:    (312) 902-5297
    (312) 902-5495
Facsimile:    (312) 577-8964
    (312) 577-8854
Attention:    Mark R. Grossmann
    Scott E. Lyons
E-mail:    mg@kattenlaw.com
    scott.lyons@kattenlaw.com
Schedule - 11



Aggregate Commitment to Fund Draws under Fourth Tranche US Last Out Term Notes as of Fifth Restatement Closing Date: $0.00
Aggregate Outstanding Principal Amount under Fourth Tranche US Last Out Term Notes as of Fifth Restatement Closing Date:
$35,050,000.00

Schedule - 12

EXECUTION VERSION
FINANCING AGREEMENT
Dated as of July 31, 2020

by and among

EC SPV, LTD., as the Borrower (the “Borrower”),

THE GUARANTORS FROM TIME TO TIME PARTY HERETO,

THE LENDERS PARTY HERETO
and

VICTORY PARK MANAGEMENT, LLC
as Agent
______________________________________________________________________________
$100,000,000 SENIOR SECURED TERM NOTES
______________________________________________________________________________


US_143017890

TABLE OF CONTENTS
Page
Article 1 DEFINITIONS; CERTAIN TERMS 2
Section 1.1 Definitions 2
Section 1.2 Terms Generally 25
Section 1.3 Accounting and Other Terms 26
Article 2 BORROWER’S AUTHORIZATION OF ISSUE 26
Section 2.1 Senior Secured Term Notes 26
Section 2.2 Interest 27
Section 2.3 Redemptions and Payments 28
Section 2.4 Payments 32
Section 2.5 Dispute Resolution 32
Section 2.6 Taxes 33
Section 2.7 Reissuance 34
Section 2.8 Register 35
Section 2.9 Maintenance of Register 35
Section 2.10 Monthly Maintenance Fee 35
Article 3 CLOSING 36
Section 3.1 Initial Closing 36
Section 3.2 Subsequent Closings 36
Article 4 INTENTIONALLY OMITTED 37
Article 5 CONDITIONS TO CLOSING AND EACH LENDER’S OBLIGATION TO PURCHASE 37
Section 5.1 Closing 37
Section 5.2 Subsequent Closings 39
Article 6 Intentionally Omitted 40
Article 7 CREDIT PARTIES’ REPRESENTATIONS AND WARRANTIES 40
Section 7.1 Organization and Qualification 41
Section 7.2 Authorization; Enforcement; Validity 41
Section 7.3 Issuance of Notes 41
Section 7.4 No Conflicts 41
Section 7.5 Consents 42
Section 7.6 Subsidiary Rights 42
Section 7.7 Equity Capitalization 42
1

Section 7.8 Indebtedness and Other Contracts 43
Section 7.9 Off Balance Sheet Arrangements 43
Section 7.10 Ranking of Notes 43
Section 7.11 Title 43
Section 7.12 Intellectual Property Rights 43
Section 7.13 Creation, Perfection, and Priority of Liens 44
Section 7.14 Absence of Certain Changes; Insolvency 44
Section 7.15 Absence of Proceedings 45
Section 7.16 No Undisclosed Events, Liabilities, Developments or Circumstances 45
Section 7.17 No Disagreements with Accountants and Lawyers 45
Section 7.18 Placement Agent’s Fees. 45
Section 7.19 Reserved. 45
Section 7.20 Tax Status 45
Section 7.21 Transfer Taxes 46
Section 7.22 Conduct of Business; Compliance with Laws; Regulatory Permits 46
Section 7.23 Foreign Corrupt Practices 47
Section 7.24 Reserved 47
Section 7.25 Environmental Laws 47
Section 7.26 Margin Stock 47
Section 7.27 ERISA 47
Section 7.28 Investment Company 48
Section 7.29 U.S. Real Property Holding Corporation 48
Section 7.30 Internal Accounting and Disclosure Controls 48
Section 7.31 Reserved 48
Section 7.32 Transactions With Affiliates 48
Section 7.33 Acknowledgment Regarding Holders’ Purchase of Notes 49
Section 7.34 Reserved 49
Section 7.35 Insurance 49
Section 7.36 Full Disclosure 49
Section 7.37 Employee Relations 49
Section 7.38 Certain Other Representations and Warranties 50
Section 7.39 Patriot Act 50
Section 7.40 Material Contracts 50
Article 8 COVENANTS 50
Section 8.1 Financial Covenants 50
Section 8.2 Deliveries 51
Section 8.3 Notices 53
Section 8.4 Rank 55
Section 8.5 Incurrence of Indebtedness 55
Section 8.6 Existence of Liens 55
2

Section 8.7 Restricted Payments 55
Section 8.8 Mergers; Acquisitions; Asset Sales 57
Section 8.9 No Further Negative Pledges 57
Section 8.10 Affiliate Transactions 57
Section 8.11 Insurance. 58
Section 8.12 Corporate Existence and Maintenance of Properties 59
Section 8.13 Non-circumvention 59
Section 8.14 Change in Business; Change in Accounting; Elevate Credit 59
Section 8.15 U.S. Real Property Holding Corporation 60
Section 8.16 Compliance with Laws 60
Section 8.17 Additional Collateral 60
Section 8.18 Audit Rights; Field Exams; Appraisals; Meetings; Books and Records 60
Section 8.19 Additional Issuances of Debt Securities; Right of First Refusal on New Indebtedness 61
Section 8.20 Post-Closing Obligations. 62
Section 8.21 Use of Proceeds 62
Section 8.22 Fees, Costs and Expenses 62
Section 8.23 Modification of Organizational Documents and Certain Documents 63
Section 8.24 Joinder 63
Section 8.25 Investments 64
Section 8.26 Further Assurances. 64
Section 8.27 Backup Servicer 64
Section 8.28 Claims Escrow Account 65
Article 9 CROSS GUARANTY 65
Section 9.1 Cross-Guaranty 65
Section 9.2 Waivers by Guarantors 66
Section 9.3 Benefit of Guaranty 66
Section 9.4 Waiver of Subrogation, Etc 66
Section 9.5 Election of Remedies 66
Section 9.6 Limitation 67
Section 9.7 Contribution with Respect to Guaranty Obligations. 67
Section 9.8 Liability Cumulative 68
Section 9.9 Stay of Acceleration 68
Section 9.10 Benefit to Credit Parties 68
Section 9.11 Indemnity 68
Section 9.12 Reinstatement 69
Section 9.13 Guarantor Intent 69
Section 9.14 General 69
Article 10 RIGHTS UPON EVENT OF DEFAULT 69
3

Section 10.1 Event of Default 69
Section 10.2 Termination of Commitments and Acceleration Right 72
Section 10.3 Consultation Rights 73
Section 10.4 Other Remedies 73
Section 10.5 Application of Proceeds 73
Article 11 [Reserved] 74
Article 12 AGENCY PROVISIONS 74
Section 12.1 Appointment 74
Section 12.2 Binding Effect 75
Section 12.3 Use of Discretion 76
Section 12.4 Delegation of Duties 76
Section 12.5 Exculpatory Provisions 76
Section 12.6 Reliance by Agent 77
Section 12.7 Notices of Default 78
Section 12.8 Non Reliance on the Agent and Other Holders 78
Section 12.9 Indemnification 78
Section 12.10 The Agent in Its Individual Capacity 79
Section 12.11 Resignation of the Agent; Successor Agent 79
Section 12.12 Reimbursement by Holders and Lenders 79
Section 12.13 Withholding 80
Section 12.14 Release of Collateral or Guarantors 80
Article 13 MISCELLANEOUS 81
Section 13.1 Payment of Expenses 81
Section 13.2 Governing Law; Jurisdiction; Jury Trial 82
Section 13.3 Counterparts 82
Section 13.4 Headings 82
Section 13.5 Severability 82
Section 13.6 Entire Agreement; Amendments 82
Section 13.7 Notices 83
Section 13.8 Successors and Assigns; Participants 85
Section 13.9 No Third Party Beneficiaries 86
Section 13.10 Survival 86
Section 13.11 Further Assurances 87
Section 13.12 Indemnification 87
Section 13.13 No Strict Construction 88
Section 13.14 Waiver 88
Section 13.15 Payment Set Aside 88
Section 13.16 Independent Nature of the Lenders’ and the Holders’ Obligations and Rights 88
4

Section 13.17 Set-off; Sharing of Payments 89
Section 13.18 Limited Recourse and Non-Petition 89
Section 13.19 Creditor Debtor Relationship 90

5


EXHIBITS
Exhibit A    Form of Senior Secured Term Note
Exhibit B    Form of Pledge and Security Agreement
Exhibit C    Form of Secretary’s Certificate
Exhibit D    Form of Officer’s Certificate
Exhibit E    Form of Compliance Certificate
Exhibit F    Form of Notice of Purchase and Sale
Exhibit G    Form of Joinder Agreement
Exhibit H    Index of Closing Documents
Exhibit I    Form of US Tax Compliance Certificate

SCHEDULES
Schedule 1.1        Program Guidelines
Schedule 7.1        Subsidiaries
Schedule 7.5        Consents
Schedule 7.7        Equity Capitalization
Schedule 7.8        Indebtedness and Other Contracts
Schedule 7.12        Intellectual Property Rights
Schedule 7.14        Absence of Certain Changes; Insolvency
Schedule 7.22        Conduct of Business; Compliance with Laws; Regulatory Permits
Schedule 7.27        ERISA
Schedule 7.32        Transactions with Affiliates
Schedule 7.40        Material Contracts
Schedule 8.3(d)    Notice of Certain Proceedings as of Closing Date
Schedule 8.25        Existing Investments

6

FINANCING AGREEMENT
This FINANCING AGREEMENT (as modified, amended, extended, restated, amended and restated and/or supplemented from time to time, this “Agreement”), dated as of July 31, 2020 is being entered into by and among (a) EC SPV, Ltd., an exempted company incorporated with limited liability under the laws of the Cayman Islands (the “Borrower”), (b) Elevate Credit, Inc., a Delaware corporation as a Guarantor (as defined herein) and the other Guarantors from time to time party hereto, (c) the lenders listed on the Schedule of Lenders attached hereto (each individually, a “Lender” and collectively, the “Lenders”) and (d) Victory Park Management, LLC, as administrative agent and collateral agent (the “Agent”) for the Lenders and the Holders (as defined herein).
RECITALS
WHEREAS, each Lender has agreed to purchase, and the Borrower has agreed to sell, upon the terms and conditions stated in this Agreement, that principal amount of senior secured term notes, in substantially the form attached hereto as Exhibit A, as set forth opposite each such Lender’s name in the Schedule of Lenders attached hereto;
WHEREAS, contemporaneously with the execution and delivery of this Agreement, the Borrower, the Guarantors and the Agent on behalf of the Holders and Lenders are executing and delivering a Pledge and Security Agreement, substantially in the form attached thereto as Exhibit B (as modified, amended, extended, restated, amended and restated and/or supplemented from time to time, the “Security Agreement”), pursuant to which substantially all of the assets of the Borrower and the Guarantors are pledged as Collateral to secure the Obligations;
WHEREAS, subject to the terms hereof, each of the Guarantors are willing to guaranty all of the Obligations of the Borrower and to pledge to the Agent, for the benefit of the Holders and Lenders, all of the Capital Stock of its respective Subsidiaries and substantially all of its other Property to secure the Obligations; provided, notwithstanding any other provisions of this Agreement, (a) no Obligation of the Borrower (including any guaranty of any Obligation of the Borrower) shall constitute an “Obligation” with respect to any UK Credit Party, (b) no UK Credit Party shall guaranty or otherwise be liable for any other Credit Party’s guaranty of any Obligation of the Borrower and (c) no assets of any UK Credit Party shall serve as collateral security for any Obligations of the Borrower (including any guaranty of any Obligations of the Borrower), it being understood and acknowledged that the preceding provisions are intended to ensure that no UK Credit Party shall be treated as holding any obligations of a United States person pursuant to Section 956 of the Internal Revenue Code and shall be interpreted consistent with this intention (the limitations contained in the foregoing proviso are referred to herein collectively as the “956 Limitations”); and
WHEREAS, contemporaneously with the execution and delivery of this Agreement, the Borrower shall pay and reimburse the Agent for itself and on behalf of the Holders and Lenders for all expenses incurred in connection with the transactions contemplated hereunder.
1

NOW, THEREFORE, in consideration of the premises and the covenants and agreements contained herein, the Borrower, the Guarantors, the Agent and each Lender hereby agree as follows:
Article 1

DEFINITIONS; CERTAIN TERMS
Section 1.1    Definitions. As used in this Agreement, the following terms have the respective meanings indicated below, such meanings to be applicable equally to both the singular and plural forms of such terms:
“956 Impact” has the meaning set forth in Section 8.24.
“956 Limitations” has the meaning set forth in the Recitals.
“1933 Act” means the Securities Act of 1933, as amended.
“Acquisition” means any transaction or series of related transactions for the purpose of or resulting, directly or indirectly, in (a) the acquisition of all or substantially all of the assets of a Person, or of all or substantially all of any business line, unit or division of a Person, (b) the acquisition of in excess of 50% of the Equity Interests of any Person, or otherwise causing any Person to become a Subsidiary, or (c) a merger or consolidation or any other combination with another Person.
“Additional Amount” has the meaning set forth in Section 2.6(a).
“Affiliate” means, with respect to a specified Person, another Person that (i) is a director or officer of such specified Person, or (ii) directly or indirectly through one or more intermediaries, Controls, is Controlled by or is under common Control with the Person specified.
“Agent” has the meaning set forth in the introductory paragraph hereto.
“Agreement” has the meaning set forth in the introductory paragraph hereto.
“Amounts Due” has the meaning set forth in Section 13.18.
“Asset Sale” means the sale, lease, license, conveyance or other disposition of any assets or rights of any Credit Party or any Credit Party’s Subsidiaries.
“Assignee” has the meaning set forth in Section 13.8.
“Backup Servicer” means a Person, reasonably satisfactory to Agent, that the Borrower has appointed and that is providing backup servicing and its permitted successors and assigns reasonably satisfactory to Agent.

2

“Backup Servicing Agreement” means the Backup Servicing Agreement among the Credit Parties, the Backup Servicer and the Agent as amended, restated, supplemented or otherwise modified from time to time in accordance with the terms thereof.
“Bankruptcy Code” has the meaning set forth in Section 10.1(c).
“Bankruptcy Law” has the meaning set forth in Section 10.1(c).
“Base Rate” means as of each Issuance Date, a rate equal to the weighted average of (i) the Base Rate immediately preceding such Issuance Date and (ii) the greatest of (A) the LIBOR Rate as of such Issuance Date, (B) the Swap Rate as of such Issuance Date and (C) one percent per annum (1%). For the avoidance of doubt, the resulting weighted average calculated above shall be used as the Base Rate when calculating the Base Rate on the next succeeding Issuance Date.
“Blocked Account” means each “Controlled Account” (as defined in the Security Agreement) that is subject to the full dominion and control of the Agent.
“Book Value of Equity” means, as of any date of determination, total assets less intangible assets less total liabilities, in each case, of the Credit Parties and their Subsidiaries.
“Borrower” has the meaning set forth in the introductory paragraph hereto.
“Borrowing Base” means, on any date of determination, the sum of:
(a)    the aggregate balance of the portion of the Eligible Consumer Loans in which the Borrower owns a participation interest pursuant to the Participation Agreement on such date (for the avoidance of doubt, any portion of an Eligible Consumer Loan with respect to which an interest is retained by CC Bank is excluded hereunder) less any Excess Concentration Amounts multiplied by eighty-five percent (85%); plus
(b)    one hundred percent (100%) of the balance of the unrestricted (it being agreed and acknowledged that cash collateral securing surety bonds and letters of credit posted or maintained by the Borrower shall be deemed to be “restricted”) cash and Cash Equivalent Investments of the Borrower in a Funding Account or Collection Account on such date for which the Agent shall have a first-priority perfected Lien. For purposes of clarification, unrestricted cash includes all cash of the Borrower that is being held by an ACH provider or CC Bank prior to remittance to Borrower but in no circumstances will include any cash or Cash Equivalent Investment deposited in the "Cash Collateral Account" (as defined in the Participation Agreement) so long as such Cash Collateral Account or other account is for the benefit of any Person other than the Agent or the Lenders.
“Borrowing Base Certificate” means a borrowing base certificate signed by the chief financial officer of the Borrower (or other authorized executive officer performing a similar function), in substantially the form included in the Form of Notice of Purchase and Sale attached hereto as Exhibit F.
3

“Business Day” means any day other than Saturday or Sunday or any day that banks in Chicago, Illinois are required or permitted to close.
“Capital Stock” means (1) in the case of a corporation, corporate stock; (2) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock; (3) in the case of a partnership or limited liability company, partnership interests (whether general or limited) or membership interests; and (4) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person, but excluding from all of the foregoing any debt securities convertible into, or exchangeable for, Capital Stock, whether or not such debt securities include any right of participation with Capital Stock.
“Cash Equivalent Investment” means, at any time, (a) any evidence of debt, maturing not more than one year after such time, issued or guaranteed by the United States Government or any agency thereof, (b) commercial paper, maturing not more than one year from the date of issue, or corporate demand notes, in each case rated at least A-l by Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc. or P-l by Moody’s Investors Service, Inc., (c) any certificate of deposit, time deposit or banker’s acceptance, maturing not more than one year after such time, or any overnight Federal Funds transaction that is issued or sold by 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, (d) any repurchase agreement entered into with any commercial banking institution of the nature referred to in clause (c) which (i) is secured by a fully perfected security interest in any obligation of the type described in any of clauses (a) through (c) 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 such commercial banking institution, (e) money market accounts or mutual funds which invest exclusively in assets satisfying the foregoing requirements, and (f) other short term liquid investments approved in writing by Agent.
“CC Bank” means Capital Community Bank, a Utah state chartered bank.
“Change of Control” means, (a) with respect to any Credit Party or any Subsidiary of any Credit Party, that such Person shall, directly or indirectly, in one or more related transactions, (i) consolidate or merge with or into (whether or not such Person is the surviving corporation) another Person or (ii) sell, assign, transfer, lease, license, convey or otherwise dispose of all or substantially all of the properties or assets of such Person to another Person; provided, the foregoing notwithstanding, any of the Elevate Credit Subsidiaries may suspend its operations in any jurisdiction in which it operates and dissolve as a result of a decision by the Credit Parties to exit one or more markets from time to time; (b) the accumulation after October 15, 2018, whether directly, indirectly, beneficially or of record, by any individual, entity or group (within the meaning of Sections 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended) of 50% or more of the shares of the outstanding Capital Stock of the Elevate Credit Parent, or, in any event, that number of shares of outstanding Capital Stock of Elevate Credit Parent representing voting control of Elevate Credit Parent, whether by merger, consolidation, sale or other transfer of shares of Capital Stock (other than a merger or consolidation where the
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stockholders of Elevate Credit Parent prior to the merger or consolidation are the holders of a majority of the voting securities of the entity that survives such merger or consolidation); (c) Elevate Credit Parent shall cease to own, beneficially and of record, for any reason at any time 100% of the Capital Stock of any of the Elevate Credit Subsidiaries, free and clear of all Liens (other than Liens in favor of the Agent); or (d) the owner of the Capital Stock of the Borrower as of the Closing Date shall cease to own, beneficially and of record, for any reason at any time 100% of the Capital Stock of the Borrower.
“Charge Off” means an amount equal to the sum of the outstanding principal balance of Consumer Loans that (i) have a principal payment that became greater than sixty (60) days past due the scheduled payment date, which such scheduled payment date shall not be fourteen (14) days (or, in the case of Modified and Re-Aged Consumer Loans that have been modified in accordance with a modification policy approved in writing by Agent, such other period of days agreed to by Agent) past the original payment date, (ii) are identified as fraudulent or where the underlying borrowers are in bankruptcy proceedings or (iii) is otherwise charged off in accordance with the Program Guidelines, in each case, in the calendar month that includes such date of determination. “Charged Off” shall have a meaning correlative thereto.
“Claims Escrow Account” has the meaning set forth in Section 8.28(a).
“Claims Escrow Account Funding Condition” means a condition that is satisfied if the principal balance of the Claims Escrow Account is five million dollars ($5,000,000).
“Closing” has the meaning set forth in Section 3.1.
“Closing Date” has the meaning set forth in Section 3.1.
“Closing Note” has the meaning set forth in Section 2.1.
“Closing Note Purchase Price” has the meaning set forth in Section 3.1.
“Code” means the Internal Revenue Code of 1986, as amended.
“Collateral” means the “Collateral” as defined in the Security Agreement.
“Collection Account” means, with respect to the Borrower, a deposit account of Borrower approved in writing by the Agent, in which (a) all funds on deposit therein shall be solely amounts collected or received in respect of Consumer Loans and (b) no other party shall have a Lien or shall have perfected a Lien, other than any Lien of the Agent and customary common law or statutory rights of setoff of banks arising in connection with their depository relationship with Borrower. For the avoidance of doubt, the "Cash Collateral Account" (as defined in the Participation Agreement) shall not be a Collection Account.
“Commitment” has the meaning set forth in Section 2.1.
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“Compliance Certificate” means a compliance certificate signed by the chief financial officer of the Borrower (or other authorized executive officer performing a similar function), in substantially the form attached hereto as Exhibit E.
“Consumer Credit” is defined in 12 C.F.R §202.2(h).
“Consumer Loan Agreement” means a consumer loan agreement (together with all related agreements, documents and instruments executed and/or delivered in connection therewith) or similar contract, pursuant to which a Credit Party agrees to make Consumer Loans from time to time.
“Consumer Loans” means unsecured consumer loans marked as “EC SPV, Ltd.” on the monthly financial statements provided to Agent pursuant to Section 8.2(a) that are originated by CC Bank and in which a 95.0% participation interest, or such other percentage as mutually agreed upon among CC Bank, Borrower and Agent, is sold to Borrower. Consumer Loans will be only be issued to individual residents of the United States of America and in accordance with the Program Guidelines.
“Contingent Obligation” means, as to any Person, any direct or indirect liability, contingent or otherwise, of that Person with respect to any indebtedness, lease, dividend or other obligation of another Person if the primary purpose or intent of the Person incurring such liability, or the primary effect thereof, is to provide assurance to the obligee of such liability that such liability will be paid or discharged, or that any agreements relating thereto will be complied with, or that the holders of such liability will be protected (in whole or in part) against loss with respect thereto.
“Control” means the possession, directly or indirectly, of the power (i) to vote 10% or more of the Capital Stock having ordinary voting power for the election of directors of a Person or (ii) to direct or cause the direction of management and policies of a Person, whether through the ownership of voting securities, by contract, proxy, agency or otherwise. “Controlling” and “Controlled” have meanings correlative thereto.
“Corporate Cash” means, as of any date of determination, the sum of unrestricted cash and Cash Equivalent Investments of Elevate Credit Parent and its Subsidiaries (excluding the Borrower and the Other Borrowers) with respect to which Agent has a perfected Lien as of such date of determination.
“Credit Party” means the Borrower and each Guarantor.
“CSO Loans” means installment loans originated by independent third party lenders, whereby (a) the applicable Elevate Credit Subsidiary acts as a credit services organization on behalf of consumers in accordance with applicable state laws and (b) in order to assist the customer in obtaining a loan under such program, Elevate Credit Parent guarantees, on behalf of the customer, the customer’s payment obligations to the third party lender under the loan.
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“Current Interest Rate” means the sum of (i) the Base Rate and (ii) the Interest Rate Spread; provided, that the Current Interest Rate shall not exceed the highest lawful rate and may be reduced in accordance with Section 2.2(e).
“Custodian” has the meaning set forth in Section 10.1(c).
“Customer Information” means nonpublic information relating to borrowers or applicants of Consumer Loans, including without limitation, names, addresses, telephone numbers, e-mail addresses, credit information, account numbers, social security numbers, loan balances or other loan information, and lists derived therefrom and any other information required to be kept confidential by the Requirements.
“Debt-to-Equity Ratio” means, (a) with respect to Elevate Credit Parent, at any time, the ratio between (i) the aggregate amount of Indebtedness, liabilities and other obligations of Elevate Credit Parent and its Subsidiaries (including the Obligations), determined in accordance with GAAP, at such time, and (ii) the sum of (A) the aggregate amount of capital contributions made to Elevate Credit Parent by its stockholders and retained earnings of Elevate Credit Parent, determined in accordance with GAAP, in each case, as of such time reduced by (B) the aggregate amount of cash distributions made by Elevate Credit Parent to any of its stockholders, as of such time, and (b) with respect to each Borrower, at any time, the ratio between (i) the aggregate amount of Indebtedness, liabilities and other obligations of the Borrower (including the Obligations), determined in accordance with GAAP, at such time, and (ii) the sum of (A) the aggregate amount of capital contributions made to the Borrower by Elevate Credit Parent and retained earnings of the Borrower, determined in accordance with GAAP, in each case, as of such time reduced by (B) the aggregate amount of cash distributions made by the Borrower to any of its members as of such time.
“Default Rate” means a rate equal to the lesser of (i) the Current Interest Rate plus five percent (5.0%) per annum and (ii) the highest lawful rate.
“Destruction” means any and all damage to, or loss or destruction of, or loss of title to, all or any portion of the Collateral (i) in excess of $100,000 in the aggregate for any Fiscal Year or (ii) that results, individually or in the aggregate, in a Material Adverse Effect.
“Diligence Date” has the meaning set forth in Section 7.14(a).
“Diligence Issues” has the meaning set forth in Section 8.20(a).
“Division/Series Transaction” means, with respect to any Credit Party and/or any of its Subsidiaries that is a limited liability company organized under the laws of the State of Delaware, that any such Person (a) divides into two or more Persons (whether or not the original Credit Party or Subsidiary thereof survives such division) or (b) creates, or reorganizes into, one or more series, in each case, as contemplated under the laws of the State of Delaware.
“Dollar” and “$” mean lawful money of the United States.
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“Domestic Credit Party” means a Credit Party that is incorporated or otherwise organized under the laws of a state of the United States.
“Elevate Credit Parent” shall mean Elevate Credit, Inc., a Delaware corporation.
“Elevate Credit Subsidiaries” means each of (a) the Subsidiaries of Elevate Credit Parent listed on the signature pages hereto as an “Elevate Credit Subsidiary;” and (b) each other Subsidiary formed or acquired by Elevate Credit Parent from time to time after the Closing Date; provided, no Other Borrower shall be deemed to be an Elevate Credit Subsidiary.
“Eligible Consumer Loan” means, as of any date of determination, a Consumer Loan that is subject to a first priority Lien in favor of Agent and which are not any of the following:
(a)    Consumer Loan with a principal payment that is greater than sixty (60) days past due on any contractual payment due date or is otherwise a Charged Off Consumer Loan, or is charged off in accordance with the Program Guidelines;
(b)    Consumer Loan to employees of any Credit Party;
(c)    Consumer Loan not originated to a person domiciled in the United States;
(d)    Consumer Loan not denominated in U.S. Dollars;
(e)    Consumer Loan involved in litigation or subject to legal, bankruptcy or insolvency proceedings or with underlying borrowers subject to bankruptcy or insolvency proceedings;
(f)    Consumer Loan with a balloon payment and/or Consumer Loan that is a non-amortizing account;
(g)    Consumer Loan with original term in excess of thirty-six (36) months;
(h)    Consumer Loan originated, acquired or participated in a manner that is not in compliance with the Program Guidelines within each respective state where such Consumer Loan is originated;
(i)    Consumer Loan that violates applicable consumer protection, state or usury laws in any material respect;
(j)    Consumer Loan that is subject to assignment or confidentiality restrictions applicable to CC Bank or the underlying borrower;
(k)    Consumer Loan originated to residents in states where CC Bank was not licensed or registered as required by applicable state law when such Consumer Loan was originated;
(l)    Consumer Loan with an original principal amount greater than $10,000;
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(m)    Consumer Loan with an annual percentage rate of less than thirty percent (30%); and
(n)    Consumer Loan that has been modified outside of the Program Guidelines or is a Modified and Re-Aged Consumer Loan that has been modified outside of the modification policy approved in writing by Agent, in each case unless approved by Agent in its sole discretion;
provided, for the avoidance of doubt, any reference in this definition to the Program Guidelines shall be the Program Guidelines in effect before any amendment, modification or supplement unless such amendment, modification or supplement has been approved by the Agent in writing in accordance with the definition of “Program Guidelines”.
“Employee Benefit Plan” means any “employee benefit plan” as defined in Section 3(3) of ERISA (a) which is or was sponsored, maintained or contributed to by, or required to be contributed to by, any Credit Party, any Subsidiary of any Credit Party or any of their ERISA Affiliates, or (b) with respect to which, any Credit Party or any Subsidiary of any Credit Party may have liability (contingent or otherwise).
“Environmental Laws” means all applicable federal, state, local or foreign laws relating to pollution or protection of human health or the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata), including, without limitation, laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous Materials”) into the environment, the exposure of humans thereto, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well as all regulatory authorizations, codes, decrees, demands or demand letters, injunctions, judgments, licenses, notices of violation or similar notice letters, orders, permits, plans or regulations issued, entered, promulgated or approved thereunder.
“Equity Interests” means Capital Stock and all warrants, options and other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock, whether or not such debt security includes the right of participation with Capital Stock).
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time.
“ERISA Affiliate” means, as to any Credit Party, any trade or business (whether or not incorporated) that is a member of a group which includes such Credit Party and which is treated as a single employer under Section 414 of the Code.
“ERISA Event” means (a) the occurrence of a “reportable event” within the meaning of Section 4043 of ERISA and the regulations issued thereunder with respect to any Pension Plan (excluding those for which the provision for 30 day notice to the PBGC has been waived by regulation) with respect to an ERISA Affiliate; (b) the failure to meet the minimum funding
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standards of Sections 412 and 430 of the Code with respect to any Pension Plan (whether or not waived in accordance with Section 412(c) of the Code) or the failure to make by its due date a required installment under Section 430(j) of the Code with respect to any Pension Plan or the failure to make any required contribution to a Multiemployer Plan; (c) the provision by the administrator of any Pension Plan pursuant to Section 4041(a)(2) of ERISA of a notice of intent to terminate such plan in a distress termination described in Section 4041(c) of ERISA; (d) the withdrawal by any of the Credit Parties, any of their respective Subsidiaries or any of their respective ERISA Affiliates from any Pension Plan with two or more contributing sponsors or the termination of any such Pension Plan resulting in liability to any of the Credit Parties, any of their respective Subsidiaries or any of their respective ERISA Affiliates pursuant to Section 4063 or 4064 of ERISA; (e) the institution by the PBGC of proceedings to terminate any Pension Plan, or the occurrence of any event or condition which reasonably might be expected to constitute grounds under ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan; (f) the imposition of liability on any of the Credit Parties, any of their respective Subsidiaries or any of their respective ERISA Affiliates pursuant to Section 4062(e) or 4069 of ERISA or by reason of the application of Section 4212(c) of ERISA; (g) the withdrawal of any of the Credit Parties, any of their respective Subsidiaries or any of their respective ERISA Affiliates in a complete or partial withdrawal (within the meaning of Sections 4203 and 4205 of ERISA) from any Multiemployer Plan if there is any potential liability therefor, or the receipt by any of the Credit Parties, any of their respective Subsidiaries or any of their respective ERISA Affiliates of notice from any Multiemployer Plan that it is in reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA, or that it intends to terminate or has terminated under Section 4041A or 4042 of ERISA; (h) the occurrence of an act or omission which reasonably might be expected to give rise to the imposition on any of the Credit Parties, any of their respective Subsidiaries or any of their respective ERISA Affiliates of fines, penalties, taxes or related charges under Sections 4975 or 4971 of the Code or under Section 409, Section 502(c), (i) or (l), or Section 4071 of ERISA in respect of any Employee Benefit Plan; (i) the assertion of a material claim (other than routine claims for benefits) against any Employee Benefit Plan other than a Multiemployer Plan or the assets thereof, or against any of the Credit Parties, any of their respective Subsidiaries or any of their respective ERISA Affiliates in connection with any Employee Benefit Plan; (j) receipt from the Internal Revenue Service of notice of the failure of any Pension Plan (or any other Employee Benefit Plan intended to be qualified under Section 401(a) of the Code) to qualify under Section 401(a) of the Code, or the failure of any trust forming part of any Pension Plan to qualify for exemption from taxation under Section 501(a) of the Code; or (k) the imposition of a Lien pursuant to Section 401(a)(29) or 430(k) of the Code or pursuant to ERISA with respect to any Pension Plan.
“Event of Default” has the meaning set forth in Section 10.1.
“Event of Default Commitment Suspension or Termination Notice” has the meaning set forth in Section 10.2(a).
“Event of Default Notice” has the meaning set forth in Section 10.2(a).
“Event of Default Redemption” has the meaning set forth in Section 10.2(a).
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“Event of Default Redemption Notice” has the meaning set forth in Section 10.2(a).
“Event of Default Redemption Price” has the meaning set forth in Section 10.2(a).
“Event of Loss” means any Destruction to, or any Taking of, any asset or property of any Credit Party or any of their Subsidiaries.
“Excess Concentration Amount” shall include the following:
(a)    The aggregate principal balance of all Eligible Consumer Loans, as of any date of determination, that have principal payments that are greater than or equal to one (1) day past due and less than or equal to thirty (30) days past due on such date in excess of ten percent (10%) of the aggregate principal balance of all of the Eligible Consumer Loans;
(b)    The aggregate principal balance of all Eligible Consumer Loans, as of any date of determination, that have principal payments that are greater than thirty (30) days and less than or equal to sixty (60) days past due on such date in excess of five and one-half percent (5.5%) of the aggregate principal balance of all of the Eligible Consumer Loans; or

(c)    The aggregate principal balance of all Eligible Consumer Loans that are Modified and Re-Aged Consumer Loans in excess of five percent (5%) of the aggregate principal balance of all of the Eligible Consumer Loans.

“Excess Spread” means, as of any date of determination, the ratio expressed as a percentage of (a) the aggregate amount of interest collections from Consumer Loans less any Charge Offs, in each case, in the calendar month immediately prior to the calendar month that includes such date of determination over (b) the aggregate principal balance of Consumer Loans as of the first day of the calendar month immediately prior to the calendar month that includes such date of determination; provided, if the date of determination is the last day of the calendar month, “Excess Spread” means the ratio expressed as a percentage of (a) the aggregate amount of interest collections from Consumer Loans less any Charge Offs, in each case, in the calendar month that includes such date of determination over (b) the aggregate principal balance of Consumer Loans as of the first day of the calendar month that includes such date of determination.
“Excluded Taxes” means, in respect of the Agent or any Holder or Lender, as applicable, (a) income taxes imposed on the net income of such Person, (b) franchise taxes imposed on the net income of such Person, in each case by the jurisdiction under the laws of which such Person is organized or qualified to do business or a jurisdiction or any political subdivision thereof in which such Person engages in business activity, other than activity or connection arising from such Person having executed, delivered, become a party to, enjoyed or exercised its rights under, performed its obligations under, received payments under, received or perfected a security interest under, or engaged in any other transaction contemplated under this Agreement or any Transaction Document, or sold or assigned any interest in any Note or any of the other Transaction Documents.
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“Extraordinary Receipts” means any cash received by any Credit Party or any of their Subsidiaries outside the ordinary course of business (and not consisting of proceeds described in Sections 2.3(b)(i), (b)(ii), (b)(iii), (b)(iv) or (b)(vi)), including, without limitation, (a) foreign, United States, state or local tax refunds outside the ordinary course of business, (b) pension plan reversions outside the ordinary course of business, (c) judgments, proceeds of settlements or other consideration of any kind in excess of $500,000 in the aggregate in connection with any cause of action (but excluding any amounts received in connection with the collection, sale, or disposition in the ordinary course of business of the Credit Parties of Consumer Loans that are not Eligible Consumer Loans and that have been settled or charged off) and (d) any purchase price adjustment received in connection with any Acquisition.
“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with) and any current or future regulations or official interpretations thereof, and any agreements entered into pursuant to Section 1471(b)(1) of the Code, or any U.S. or non-U,S, fiscal or regulatory legislation, rules, guidance notes or practices adopted pursuant to any intergovernmental agreement entered into in connection with the implementation of such sections of the Code or analogous provisions of non-U.S. law.
“Federal or Multi-State Force Majeure Affected Amount” means, as of any date of determination, an amount equal to the aggregate outstanding principal amount of the Notes on such date multiplied by a fraction, the numerator of which shall be equal to the portion of such aggregate outstanding principal amount for which the proceeds thereof were used to originate Consumer Loans that remain outstanding on such date to borrowers residing in state(s) directly affected by a Federal or Multi-State Force Majeure Event (which amount with respect to each such Consumer Loan shall not exceed the outstanding principal amount of such Consumer Loan on such date) and the denominator of which shall be equal to the aggregate outstanding principal amount of the Notes on such date.
“Federal or Multi-State Force Majeure Event” means (i) any regulatory event or regulatory change at the federal level or in any group of states acting in concert in which the Credit Parties originate Consumer Loans, in each case, that would prohibit or make it illegal for the Credit Parties to continue to originate or collect Consumer Loans in such affected jurisdictions pursuant to the Program or another program of a type similar to the Program or (ii) the termination by CC Bank of the Program and the failure by the Credit Parties, after using commercially reasonable efforts during the termination period specified in CC Bank’s termination notice, to arrange for another partner to originate Consumer Loans or similar products under the Program or another program of similar type to the Program, either of which resulting in a Federal or Multi-State Force Majeure Affected Amount equal to two-thirds or more of the aggregate principal amount then outstanding under the Notes as of the applicable date of determination.
“FinWise Financing Agreement” means that certain Financing Agreement dated as of February 7, 2019 by and among EF SPV, Ltd., Elevate Credit Service, LLC, the other
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“Guarantors” from time to time party thereto, the “Lenders” from time to time party thereto and Victory Park Management, LLC, as administrative agent.
“First Tier Foreign Subsidiary” means a Foreign Subsidiary more than fifty percent (50%) of the voting Equity Interests of which are held directly by a Credit Party or indirectly by a Credit Party through one or more Subsidiaries that are incorporated or otherwise organized under the laws of a state of the United States of America.
“Fiscal Year” means a fiscal year of the Credit Parties.
“Foreign Lender” means a Lender or a Holder that is not a US Person.
“Foreign Subsidiary” means, with respect to any Person, a Subsidiary of such Person, which Subsidiary is not incorporated or otherwise organized under the laws of a state of the United States of America.
“Foreign Subsidiary Credit Party” means any Credit Party that is a Foreign Subsidiary.
“Four Month Charge Off Rate” means, as of any date of determination and with respect to any Vintage Pool, the ratio of (i) the aggregate Charge Off amount in such Vintage Pool during the period beginning on the applicable date of origination through the end of the month of such origination and ending on the fourth consecutive calendar month, beginning with such month of origination to (ii) the aggregate principal balance of such Vintage Pool at the time of origination.
“Funding Account” means, with respect to the Borrower, a deposit account of Borrower approved in writing by the Agent, in which (a) all funds on deposit therein shall be solely used to fund Consumer Loans and for no other purpose and (b) no other party shall have a Lien or shall have perfected a Lien, other than any Lien of the Agent and customary common law or statutory rights of setoff of banks arising in connection with their depository relationship with Borrower. For the avoidance of doubt, the "Cash Collateral Account" (as defined in the Participation Agreement) shall not be a Funding Account.
“GAAP” means United States generally accepted accounting principles, consistently applied.
“Governmental Authority” means the government of the United States of America, any other nation or any political subdivision of any of the foregoing, whether federal, state or local, and any agency, authority, commission, 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.
“Guarantor” means (i) Elevate Credit Parent (ii) each of the Elevate Credit Subsidiaries, and (iii) each other Person that guarantees in writing all or any part of the Obligations.
“Guarantor Payment” has the meaning set forth in Section 9.7(a).
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“Hedging Obligations” means, with respect to any specified Person, the obligations of such Person under: (i) interest rate swap agreements (whether from fixed to floating or from floating to fixed), interest rate cap agreements and interest rate collar agreements; (ii) other agreements or arrangements designed to manage interest rates or interest rate risk; and (iii) other agreements or arrangements designed to protect such Person against fluctuations in currency exchange rates or commodity prices.
“Holder” means a holder of a Note.
“Indebtedness” of any Person means, without duplication (i) all indebtedness for borrowed money, (ii) all obligations issued, undertaken or assumed as the deferred purchase price of property or services (including, without limitation, “financing leases” in accordance with GAAP) (other than trade payables entered into in the ordinary course of business), (iii) all reimbursement or payment obligations with respect to letters of credit, surety bonds and other similar instruments, (iv) all obligations evidenced by notes, bonds, notes or similar instruments whether convertible or not, including obligations so evidenced incurred in connection with the acquisition of property, assets or businesses, (v) all indebtedness created or arising under any conditional sale or other title retention agreement, or incurred as financing, in either case with respect to any property or assets acquired with the proceeds of such indebtedness (even though the rights and remedies of the seller or bank under such agreement in the event of default are limited to repossession or sale of such property), (vi) all indebtedness referred to in clauses (i) through (v) above secured by (or for which the holder of such indebtedness has an existing right, contingent or otherwise, to be secured by) any mortgage, lien, pledge, charge, security interest or other encumbrance upon or in any property or assets (including accounts and contract rights) owned by any Person, even though the Person which owns such assets or property has not assumed or become liable for the payment of such indebtedness, (vii) all Contingent Obligations in respect of indebtedness or obligations of others of the kinds referred to in clauses (i) through (vi) above; (viii) banker’s acceptances; (ix) the balance deferred and unpaid of the purchase price of any property or services due more than three months after such property is acquired or such services are completed; (x) Hedging Obligations; and (xi) obligations under convertible securities of any Credit Party or any of their Subsidiaries. In addition, the term “Indebtedness” of any Credit Party or any of their Subsidiaries, as applicable, includes (a) all Indebtedness of others secured by a Lien on any assets of any Credit Party or any of their Subsidiaries (whether or not such Indebtedness is assumed by any Credit Party or any of such Subsidiaries), (b) to the extent not otherwise included, the guarantee by any Credit Party or any of their Subsidiaries of any Indebtedness of any other Person and (c) the absolute value of any negative amounts in any accounts owned by any Credit Party.
“Indemnified Liabilities” has the meaning set forth in Section 13.12.
“Indemnitees” has the meaning set forth in Section 13.12.
“Insolvency Proceeding” means any corporate action, legal proceeding or other procedure or formal step taken in relation to (a) the suspension of payments, a moratorium of any indebtedness, winding-up, dissolution, administration or reorganization (by way of voluntary arrangement, scheme of arrangement or otherwise (other than for the purpose of a reconstruction
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or amalgamation the terms of which have been approved by the Agent)) of Elevate Credit Parent, any of its Subsidiaries or the Borrower; (b) a composition, compromise, assignment or arrangement with any creditor of Elevate Credit Parent, any of its Subsidiaries or the Borrower; (c) the appointment of a liquidator, receiver, administrative receiver, administrator, compulsory manager or other similar officer in respect of Elevate Credit Parent, any of its Subsidiaries or the Borrower or any of their respective assets; or (d) enforcement of any security over any assets of Elevate Credit, any of its Subsidiaries or the Borrower, in each case, or any analogous procedure or formal step taken in any jurisdiction.
“Insolvent” means, with respect to any Person, (a) the present fair saleable value in a non-liquidation context of such Person’s assets is less than the amount required to pay such Person’s total Indebtedness as applicable, or the fair value of the assets of such Person is less than its total liabilities (taking into account contingent and prospective liabilities), (b) such Person is unable to pay its debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities fall due or become absolute and matured, (c) such Person incurs debts that would be beyond its ability to pay as such debts mature, (d) such Person has unreasonably small capital with which to conduct the business in which it is engaged as such business is now conducted and is proposed to be conducted, (e) such Person is deemed to, or is declared to, be unable to pay its debts under applicable law, (f) such Person suspends or threatens in writing to suspend making payments on any of its debts, (g) a moratorium is declared in respect of any Indebtedness of such Person, or (h) as of such date of determination, to the extent such Person is a Borrower, based on information derived from the Borrower’s internal analysis of the assets held by the Borrower and contemplated to be held by the Borrower following such issuance and purchase of Notes and the Borrower’s reasonable forecasts in good faith (which forecasts shall be mutually acceptable to the Borrower and Agent (in each case, which acceptance shall not be unreasonably conditioned, withheld or delayed)), that it is expected that any Obligations under the Notes will not be fully and timely paid when due. The amount of contingent liabilities (such as litigation, guaranties and pension plan liabilities) at any time shall be computed as the amount that, in light of all the facts and circumstances existing at the time, represents the amount that would reasonably be expected to become an actual or matured liability. If a moratorium occurs, the ending of the moratorium will not remedy any Event of Default caused by that moratorium.
“Intellectual Property Rights” has the meaning provided in Section 7.12.
“Intellectual Property Security Agreements” means each trademark security agreement, each patent security agreement and each copyright security agreement, each in form and substance reasonably acceptable to the Agent, entered into from time to time by and among the applicable Credit Party or the applicable Guarantor and the Agent.
“Interagency Guidelines” means the Interagency Guidelines Establishing Information Security Guidelines, as set forth in Appendix B to 12 C.F.R. Part 30.
“Intercreditor Agreement” means that certain Second Amended and Restated Intercreditor Agreement dated on or about the Closing Date and among Agent, the “Borrowers” (as defined therein), the “Collateral Agents” (as defined therein) and the “Grantors” (as defined therein).
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“Interest Date” has the meaning provided in Section 2.2(a).
“Interest Rate Spread” means seven and one-quarter percent (7.25%) per annum.
“Interest Rate Spread Reduction Conditions” means the satisfaction of each of the following conditions:
(a)    All of the Credit Parties have been in compliance with all of their obligations and covenants under this Agreement for the six (6) months prior to any date of determination and all of the Credit Parties’ representations and warranties are true, accurate and correct for the six (6) months prior to any date of determination; and
(b)    The Borrower shall have satisfied the then applicable Performance Hurdle.
“Inventory” has the meaning provided in the UCC.
“Investment” means, with respect to any Person, any investment in another Person, whether by acquisition of any debt security or Equity Interest, by making any loan or advance, by becoming contingently liable in respect of obligations of such other Person or by making an Acquisition.
“IRS” means the Internal Revenue Service of the United States and any successor thereto.
“Issuance Date” has the meaning provided in Section 2.2(a).
“Joinder Agreement” has the meaning set forth in Section 8.24.
“Late Charge” has the meaning provided in Section 2.4.
“Lender” and “Lenders” has the meaning set forth in the introductory paragraph hereto.
“LIBOR Rate” means the London Interbank Offered Rate last quoted by Bloomberg for deposits of U.S. Dollars for a period of three months. If no such London Interbank Offered Rate exists, such rate will be the rate of interest per annum, as determined by the Agent at which deposits of U.S. Dollars in immediately available funds are offered on the last Business Day of each calendar month by major financial institutions reasonably satisfactory to the Agent in the London interbank market for a period of three months for the applicable principal amount on such date of determination.
“Lien” means any mortgage, lien, pledge, security interest, conditional sale or other title retention agreement, charge or other security interest or encumbrance of any kind, whether or not filed, recorded or otherwise perfected under applicable law, including any conditional sale or other title retention agreement or any lease or license in the nature thereof, any option or other agreement to sell or give a security interest in, or any agreement or arrangement having similar effect.
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“Loan to Value Ratio” means, as of any date of determination, the ratio of (a) the outstanding principal balance of the Notes to (b) the Borrowing Base, in each case, as of such date of determination.
“LTV Covenant Cure Amount” has the meaning provided in Section 8.1(a).
“LTV Covenant Cure Obligation” has the meaning provided in Section 8.1(a).
“LTV Covenant Default” has the meaning provided in Section 8.1(a).
“M&A Event” means a Change of Control of Elevate Credit Parent.
“Material Adverse Effect” means any material adverse effect on the business, properties, assets, operations, the Collateral, results of operations, or condition (financial or otherwise) or prospects of the Credit Parties and their Subsidiaries, taken as whole, or on the transactions contemplated hereby or by the other Transaction Documents, or on the authority or ability of any Credit Party or any of their respective Subsidiaries to fully and timely perform its obligations under any Transaction Document, in each case, as determined by the Agent in its sole but reasonable discretion.
“Material Contract” means any contract or other arrangement to which any Credit Party or any of its Subsidiaries is a party (other than the Transaction Documents) for which breach, nonperformance, cancellation, termination or failure to renew could reasonably be expected to have a Material Adverse Effect.
“Maturity Date” means the earlier of (a) January 1, 2024 and (b) such earlier date as the unpaid principal balance of all outstanding Notes becomes due and payable pursuant to the terms of this Agreement and the Notes.
“Maximum Commitment” means $100,000,000.
“Modified and Re-Aged Consumer Loans” means Consumer Loans that were modified at any time after origination and meet the definition of a trouble debt restructuring under GAAP.
“Monthly Maintenance Fees” has the meaning set forth in Section 2.10.
“Mortgage” means a mortgage or deed of trust, in form and substance reasonably satisfactory to the Agent, as it may be amended, supplemented or otherwise modified from time to time.
“Multiemployer Plan” means any Employee Benefit Plan which is a “multiemployer plan” as defined in Section 3(37) of ERISA.
“Net Proceeds” has the meaning set forth in Section 13.18.
“New Guarantor” has the meaning set forth in Section 8.24.
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“New Indebtedness Opportunity” has the meaning set forth in Section 8.19.
“Non-Excluded Taxes” (a) any and all Taxes, other than Excluded Taxes, and (b) to the extent not otherwise described in (a), Other Taxes.
“Notes” has the meaning set forth in Section 2.1.
“Notice of Purchase and Sale” means a notice given by the Borrower to the Agent pursuant to Section 2.1, in substantially the form of Exhibit F hereto.
“Obligations” means any and all obligations, liabilities and indebtedness, including without limitation, principal, interest (including, but not limited to, interest calculated at the Default Rate and post-petition interest in any proceeding under any Bankruptcy Law), Late Charges, Monthly Maintenance Fees, Prepayment Premium, and other fees, costs, expenses and other charges and other obligations arising under the Transaction Documents, of the Credit Parties to the Agent, the Holders and the Lenders or to any parent, affiliate or subsidiary of the Agent, such Holders or such Lenders of any and every kind and nature, howsoever created, arising or evidenced and howsoever owned, held or acquired, whether now or hereafter existing, whether now due or to become due, whether primary, secondary, direct, indirect, absolute, contingent or otherwise (including, without limitation, obligations of performance), whether several, joint or joint and several, and whether arising or existing under written or oral agreement or by operation of law.
“Optional Reborrowing” has the meaning set forth in Section 2.3(c).
“Optional Revolving Date” means the first or last calendar day of any calendar month in the first calendar quarter.
“Original Jurisdiction” means, in relation to a Credit Party, the jurisdiction under whose laws that Credit Party is incorporated as of the Closing Date or, in the case of a New Guarantor, as of the date on which such New Guarantor becomes party to this Agreement as a New Guarantor.
“Other Borrowers” means the “Borrowers” under and as defined in the Other Financing Agreement.
“Other Financing Agreement” means the Fifth Amended and Restated Financing Agreement dated as of February 7, 2019 by and among Rise SPV, LLC, Elevate Credit Service, LLC, the other “Guarantors” from time to time party thereto, the “Lenders” from time to time party thereto and Victory Park Management, LLC, as administrative agent, as amended, restated, supplemented or otherwise modified from time to time.
“Other Taxes” has the meaning set forth in Section 2.6(b).
“Outside Legal Counsel” means counsel selected by the Borrower from time to time.
“Participant Register” has the meaning set forth in Section 13.8.
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“Participation Agreement” means the Participation Agreement dated as of July 31, 2020 by and between the Borrower and CC Bank.
“Past Due Roll Rate” means the rate expressed as a percentage, as of the last day of any calendar month, of the ratio of (i) the aggregate outstanding principal balance of Consumer Loans (a) that have a principal payment that is one or more days past due but not greater than thirty days past due or (b) that did not have a principal payment that is one or more days past due in the calendar month immediately prior to the calendar month that includes the date of determination but became charged off in accordance with the Program Guidelines in the calendar month that includes such date of determination, in each case, in the calendar month that includes such date of determination to (ii) the aggregate outstanding principal balance of Consumer Loans that do not have a principal payment that became one or more days past due or is otherwise charged off in accordance with the Program Guidelines, in each case, as of the last day of the calendar month immediately prior to the calendar month that includes such date of determination.
“PBGC” means the Pension Benefit Guaranty Corporation or any successor thereto.
“Pension Plan” means any Employee Benefit Plan, other than a Multiemployer Plan, which is subject to Sections 412 and 430 of the Code or Section 302 of ERISA.
“Performance Hurdle” means that the Elevate Credit Parent has a minimum net income in the 2020 Fiscal Year of $30,000,000.
“Permitted Dispositions” means (i) sales of Inventory in the ordinary course of business, (ii) disposals of obsolete, worn out or surplus equipment in the ordinary course of business, (iii) the granting of Permitted Liens, (iv) the licensing of patents, trademarks, copyrights and other Intellectual Property Rights in the ordinary course of business consistent with past practice, (v) subject to no adverse selection by the Credit Parties, dispositions and sales of Consumer Loans by the Credit Parties for which Lender has not provided funding for Borrower to purchase a participation interest therein, (vi) collection, sale, or disposition in the ordinary course of business of the Credit Parties of Consumer Loans that are not Eligible Consumer Loans and that have been settled or charged off, and (vii) reasonable expenditures of cash in the ordinary course of business or as otherwise approved by the board of directors (or similar governing body) of the applicable Credit Party.
“Permitted Indebtedness” means (i) Indebtedness of any (A) Domestic Credit Party to Elevate Credit Parent or any other Domestic Credit Party and (B) Foreign Subsidiary Credit Party to any other Foreign Subsidiary Credit Party; provided, in each case, all such Indebtedness shall be unsecured, (ii) Indebtedness in respect of netting services, overdraft protections and otherwise in connection with customary deposit accounts maintained by any Credit Party as part of its ordinary cash management program, (iii) performance guaranties in the ordinary course of business and consistent with historic practices of the obligations of suppliers, customers, franchisees and licensees of Elevate Credit Parent and its subsidiaries, (iv) guaranties by Elevate Credit Parent of Indebtedness of any subsidiary Credit Party or guaranties by any Domestic Credit Party of any Indebtedness of Elevate Credit Parent with respect, in each case, to
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Indebtedness otherwise permitted to be incurred pursuant to this definition, (v) Indebtedness which is secured by Liens permitted under clause (xii) of the definition of “Permitted Liens”, (vi) Indebtedness of any subsidiary Credit Party with respect to financing leases; provided, the principal amount of such Indebtedness shall not exceed at any time $5,000,000 for such subsidiary Credit Parties, (vii) purchase money Indebtedness of any subsidiary Credit Parties; provided, (A) any such Indebtedness shall be secured only by the asset acquired in connection with the incurrence of such Indebtedness and (B) the aggregate amount of all such Indebtedness shall not exceed at any time $2,500,000 in the aggregate for such subsidiary Credit Parties, (viii) other unsecured Indebtedness of any subsidiary Credit Party, which is subordinated to the Obligations on terms acceptable to Agent in its sole discretion in an aggregate amount not to exceed at any time $25,000,000, excluding any CSO Loans and (ix) guaranties by the Credit Parties in favor of the Agent, for the benefit of the Lenders and the Holders, hereunder and under the other Transaction Documents; provided, that no Indebtedness otherwise permitted by clauses (viii) or (ix) shall be assumed, created, or otherwise refinanced if an Event of Default (or event or circumstance that, with the passage of time, the giving of notice, or both, would become an Event of Default) has occurred or would result therefrom.
“Permitted Issuance Date” means any two Business Day of each calendar month during the term of this Agreement; provided, that no Permitted Issuance Date will be within 5 Business Days of another Permitted Issuance Date.
“Permitted Liens” means (i) Liens in favor of the Agent, for the benefit of the Lenders and the Holders, (ii) Liens for Taxes, assessments and other governmental charges not delinquent or if obligations with respect to such Taxes are being contested in good faith by appropriate proceedings promptly instituted and diligently conducted so long as such reserves or other appropriate provisions, if any, as shall be required by GAAP shall have been made for any such contested amounts, (iii) statutory Liens of landlords, banks (and rights of set off), of carriers, warehousemen, mechanics, repairmen, workmen and materialmen, and other Liens imposed by law (other than any such Lien imposed pursuant to §§401 (a)(29) or 412(n) of the Code or by ERISA), in each case incurred in the ordinary course of business (A) for amounts not yet overdue, or (B) for amounts that are overdue and that (in the case of any such amounts overdue for a period in excess of five (5) days) are being contested in good faith by appropriate proceedings, so long as such reserves or other appropriate provisions, if any, as shall be required by GAAP shall have been made for any such contested amounts, (iv) Liens incurred in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other types of social security, or to secure the performance of tenders, statutory obligations, surety and appeal bonds, bids, leases, government contracts, trade contracts, performance and return of money bonds and other similar obligations (exclusive of obligations for the payment of borrowed money or other Indebtedness), so long as no foreclosure, sale or similar proceedings have been commenced with respect to any portion of the Collateral on account thereof, (v) easements, rights of way, restrictions, encroachments, and other minor defects or irregularities in title, in each case which do not and will not interfere in any material respect with the value or use of the property to which such Lien is attached or with the ordinary conduct of the business of such Person, (vi) any interest or title of a lessor or sublessor under any lease of real estate, (vii) Liens solely on any cash earnest money deposits made by such Person in
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connection with any letter of intent or purchase agreement permitted hereunder, (viii) purported Liens evidenced by the filing of precautionary UCC financing statements relating solely to operating leases of personal property entered into in the ordinary course of business, (ix) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods, (x) any zoning or similar law or right reserved to or vested in any governmental office or agency to control or regulate the use of any real property, in each case which do not and will not interfere with or affect in any material respect the use, value or operations of any real estate assets or in the ordinary conduct of the business of such Person, (xi) licenses of patents, trademarks and other intellectual property rights granted by such Person in the ordinary course of business and not interfering in any respect with the ordinary conduct of the business of such Person, (xii) Liens (A) which are junior in priority to those of the Agent, for the benefit of the Lenders and the Holders, pursuant to a subordination agreement acceptable to the Agent, (B) which may not be foreclosed upon without the consent of the Agent, (C) which attach only to goods and (D) which, in the aggregate, do not secure Indebtedness in excess of $1,000,000, and (xiii) Liens securing Indebtedness permitted pursuant to clause (ix) of the definition of Permitted Indebtedness; provided, any such Lien shall encumber only the asset acquired with the proceeds of such Indebtedness.
“Permitted Redemption” means the redemption of Notes permitted pursuant to Section 2.3(a).
“Permitted Redemption Amount” has the meaning set forth in Section 2.3(a)(i).
“Permitted Redemption Date” means the date on which the Borrower has elected to redeem the Notes in accordance with Section 2.3(a).
“Permitted Redemption Notice” has the meaning set forth in Section 2.3(a)(i).
“Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity and a government or any department or agency thereof.
“Plan” means any Multiemployer Plan or Pension Plan.
“Prepayment Premium” means the premium to be paid in connection with certain prepayments of the Notes pursuant to this Agreement, including pursuant to Section 2.3(a) and Section 2.3(b), but specifically excluding any mandatory prepayment pursuant to Sections 2.3(b)(ii), 2.3(b)(v), 2.3(b)(vi) or 2.3(b)(vii) (solely to the extent such excess required to be applied as a prepayment relates to a prepayment under Sections 2.3(b)(ii), 2.3(b)(v) or 2.3(b)(vi)). Such prepayment premium shall be equal to, with respect to such prepayment to be made or made during any period set forth in the table below, the product of (a) the percentage set forth beside such period in such table and (b) the greater of (i) the aggregate principal amount of the Notes then prepaid or required to be prepaid (excluding the principal amount of any Optional Reborrowings repaid one hundred eighty (180) or more days prior to the applicable prepayment) or (ii) the aggregate principal amount of the Notes prior to an Optional Reborrowing pursuant to Section 2.3(c):
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Period Prepayment Premium
January 1, 2022 through and including December 31, 2022 5.0%
January 1, 2023 through and including December 31, 2023 2.0%
    ;provided, that such prepayment premium in connection with a prepayment of the Notes pursuant to Section 2.3(a) in connection with an M&A Event shall equal an amount equal to the sum of (i) the product of (A) the number of days from the date of such prepayment until January 1, 2022 divided by 360 days, (B) the product of the greater of (x) the highest aggregate principal amount of the Notes at any time prior to such prepayment (excluding the principal amount of any Optional Reborrowings repaid one hundred eighty (180) or more days prior to the applicable prepayment) or (y) the aggregate principal amount of the Notes prior to an Optional Reborrowing pursuant to Section 2.3(c) and (C) the Current Interest Rate, and (ii) the product of (A) the greater of (x) the highest aggregate principal amount of the Notes at any time prior to such prepayment (excluding the principal amount of any Optional Reborrowings repaid one hundred eighty (180) or more days prior to the applicable prepayment) or (y) the aggregate principal amount of the Notes prior to an Optional Reborrowing pursuant to Section 2.3(c) and (B) five percent (5%).

“Principal Only Assignment” has the meaning set forth in Section 13.8.
“Proceeding” has the meaning set forth in Section 7.15.
“Program” means the lending program for the solicitation, marketing, and origination of Consumer Loans pursuant to Program Guidelines.
“Program Guidelines” means those guidelines established by CC Bank, attached as Schedule 1.1 hereto, for the administration of the Program, as amended, modified or supplemented from time to time by CC Bank with the prior written consent of the Borrower to the extent such consent is required pursuant to the Participation Agreement; provided, the Borrower will not provide such consent without the prior written consent of the Agent.
“Property” means any right or interest in or to property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible, including, without limitation, Capital Stock.
“Qualified Funding Failure” has the meaning set forth in Section 2.3(a)(iii).
“Receivables” means the indebtedness and other obligations owed to the Borrower, Elevate Credit Parent or any other Credit Party in connection with any and all liens, title retention and security agreements, chattel mortgages, chattel paper, bailment leases, installment sale agreements, instruments, consumer finance paper and/or promissory notes securing and evidencing unsecured multi-pay consumer installment loans made, and/or time sale transactions or acquired by a Credit Party which were originated in accordance with the Program Guidelines.
“Register” has the meaning set forth in Section 2.8.
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“Related Parties” of any Person means such Person’s Affiliates or any of its respective partners, directors, agents, employees and controlling persons.
“Relevant Jurisdiction” means, in relation to a Credit Party, (a) its Original Jurisdiction; (b) any jurisdiction where any asset subject to or intended to be subject to the Collateral to be created by it is situated; (c) any jurisdiction where it conducts its business; and (d) the jurisdiction whose laws govern the perfection of any of the Security Documents entered into by it.
“Republic Financing Agreement” means that certain Amended and Restated Financing Agreement dated as of February 7, 2019 by and among Elastic SPV, Ltd., Elevate Credit Service, LLC, the other “Guarantors” from time to time party thereto, the “Lenders” from time to time party thereto and Victory Park Management, LLC, as administrative agent, as amended, restated, supplemented or otherwise modified from time to time.
“Required Lenders” means at any time (a) the Lenders then holding more than fifty percent (50%) of the aggregate Maximum Commitments then in effect plus the aggregate unpaid principal balance of the Notes then outstanding, or (b) if the Maximum Commitments have been terminated, the Holders of Notes then holding more than fifty percent (50%) of the aggregate unpaid principal balance of the Notes then outstanding.
“Required Prepayment Date” has the meaning set forth in Section 2.3(d).
“Requirements” means all applicable federal and state laws and regulations related, directly or indirectly, to the following: credit (including, without limitation, Consumer Credit); servicing; disclosures, information security and privacy and regulations and industry guidance and requirements (including, but not limited to, guidance issued by the Payment Card Industry); the USA Patriot Act; the Office of Foreign Asset Controls’ rules and regulations; the Interagency Guidelines; debt collection and debt collection practices laws and regulations applicable to the Credit Parties or the Program; the federal Truth in Lending Act; the federal Electronic Funds Transfer Act; the federal Equal Credit Opportunity Act; the federal Gramm-Leach-Bliley Act; and the federal Fair Debt Collection Practices Act.
“Reviewing Party” or “Reviewing Parties” has the meaning set forth in Section 8.20(a).
“Revolving Amount” has the meaning set forth in Section 2.3(c).
“Revolving Conditions” means the satisfaction of each of the following conditions as of any date of determination:
(a)    The Borrower is in compliance with all of its obligations and covenants under this Agreement and all of the Borrower’s representations and warranties are true, accurate and correct; and
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(b)    No Event of Default (or event or circumstance that, with the passage of time, the giving of notice, or both, would become an Event of Default) has occurred or would result therefrom.
“ROFR Notice” has the meaning set forth in Section 8.19.
“Schedules” has the meaning set forth in Article 7.
“Security Agreement” means a Pledge and Security Agreement, substantially in the form attached hereto as Exhibit B.
“Security Documents” means the Security Agreement, the Intellectual Property Security Agreements and all other instruments, documents and agreements delivered by any of the Credit Parties, any of their respective Subsidiaries, Affiliates or any equityholder of any of the Credit Parties in order to grant to Agent (on behalf of the Lenders), any Lender or any Holder a Lien on any real, personal or mixed Property of such Person as security for the Obligations.
“State Force Majeure Event” means any regulatory event or regulatory change in any state in which the Credit Parties originate Consumer Loans that would prohibit or make it illegal for the Credit Parties to continue to originate or collect Consumer Loans in such state pursuant to the Program or another program of a type similar to the Program.
“State Force Majeure Paydown Amount” means, as of any date of determination, an amount designated in writing by the Borrower to the Agent within ten (10) days following such date equal to the aggregate outstanding principal amount of the Notes on such date multiplied by a fraction, the numerator of which shall be equal to the portion of such aggregate outstanding principal amount for which the proceeds thereof were used to originate Consumer Loans that remain outstanding on such date to borrowers residing in state(s) affected by a State Force Majeure Event (which amount with respect to each such Consumer Loan shall not exceed the outstanding principal amount of such Consumer Loan on such date) and the denominator of which shall be equal to the aggregate outstanding principal amount of the US Notes on such date.
“Subsequent Closing” has the meaning set forth in Section 3.2.
“Subsequent Closing Date” has the meaning set forth in Section 3.2.
“Subsequent Closing Note Purchase Price” has the meaning set forth in Section 3.2.
“Subsidiaries” has the meaning set forth in Section 7.1.
“Swap Rate” means the forward swap rate based on the London Interbank Offered Rate last quoted by Bloomberg for deposits of U.S. Dollars for a period of three months, and taking into account the time period between the Issuance Date and the Maturity Date as determined by the Agent in its sole reasonable discretion based on the Bloomberg SWPM calculator. If no such London Interbank Offered Rate exists, such rate will be the rate of interest per annum, as determined by the Agent at which deposits of U.S. Dollars in immediately available funds are offered on the last Business Day of each calendar month by major financial institutions
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reasonably satisfactory to the Agent in the London interbank market for a period of three months for the applicable principal amount on such date of determination.
“Taking” means any taking of any property of any Credit Party or any of their Subsidiaries or any portion thereof, in or by condemnation or other eminent domain proceedings pursuant to any law, general or special, or by reason of the temporary requisition of the use of such assets or any portion thereof, by any Governmental Authority, civil or military (i) in excess of $250,000 in the aggregate for any Fiscal Year or (ii) that results, either individually or in the aggregate, in a Material Adverse Effect.
“Taxes” means any and all current or future (a) foreign, federal, state or local income, gross receipts, franchise, estimated, alternative minimum, add-on minimum, sales, use, transfer, registration, value added, excise, parking, unclaimed property/escheatment, natural resources, severance, stamp, occupation, occupancy, ad valorem, premium, windfall profit, environmental, customs, duties, real property, personal property, capital stock, social security, unemployment, disability, payroll, license, employee or other withholding, or other tax of any kind whatsoever, (b) any liability for the payment of amounts of the type described in clause (a) hereof as a result of being at any time a transferee of, or a successor in interest to, any person, and (c) any interest, penalties or additions to tax or additional amounts (whether disputed or not) in respect of the foregoing.
“Tax Return” means any return, declaration, report, claim for refund, or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof.
“Total Cash” means, as of any date of determination, the sum of all unrestricted cash and Cash Equivalent Investments of Elevate Credit Parent and all other Credit Parties. For purposes of clarification, unrestricted cash includes all cash of the Credit Parties that is being held by an ACH provider prior to remittance to a Credit Party.
“Trailing Excess Spread” means, as of any date of determination, the average of the Excess Spread in (i) the calendar month immediately prior to the calendar month that includes such date of determination and (ii) the calendar month that includes such date of determination.
“Trailing Four Month Charge Off Rate” means, as of any date of determination, the average, for each of the three (3) immediately preceding completed months, of the Four Month Charge Off Rate.
“Trailing Past Due Roll Rate” means, as of any date of determination, the average, of the Past Due Roll Rate in (i) the calendar month immediately prior to the calendar month that includes such date of determination and (ii) the calendar month that includes such date of determination.
“Trailing Twelve Month Charge Off Rate” means, as of any date of determination, the average, for each of the three (3) immediately preceding completed months, of the Twelve Month Charge Off Rate.
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“Transaction Documents” has the meaning set forth in Section 7.2.
“Twelve Month Charge Off Rate” means, as of any date of determination and with respect to any Vintage Pool, the ratio of (i) the aggregate Charge Off amount in such Vintage Pool during the period beginning on the applicable date of origination through the end of the month of such origination and ending on the twelfth consecutive calendar month, beginning with such month of origination to (ii) the aggregate principal balance of such Vintage Pool at the time of origination.
“UCC” has the meaning set forth in Section 7.13.
“UK Credit Party” means a Credit Party organized under the laws of the United Kingdom.
“US Person” means any Person that is a “United States Person” as defined in Section 7701(a)(30) of the Code.
“US Tax Compliance Certificate” has the meaning set forth in Section 2.6(d).
“Vintage Pool” means and refers to, at any given time, all Consumer Loans that were originated by CC Bank in a particular calendar month. By way of example, and not by way of limitation, all Consumer Loans that were originated in July 2020 shall constitute one Vintage Pool for the calendar month that ended on July 31, 2020; all Consumer Loans that were originated in August 2020 shall constitute one Vintage Pool for the calendar month that ended on August 31, 2020; and so on.
“Waivable Mandatory Prepayment” has the meaning set forth in Section 2.3(d).
“Withholding Agent” means the Borrower, any Credit Party or the Agent.    
Section 1.2    Terms 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”. Unless the context requires otherwise, (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as 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 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 Agreement and (e) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any right or interest in or to assets and
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properties of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible. References in this Agreement to “determination” by the Agent include good faith estimates by the Agent (in the case of quantitative determinations) and good faith beliefs by the Agent (in the case of qualitative determinations).

Section 1.3    Accounting and Other Terms.    Unless otherwise expressly provided herein, each accounting term used herein shall have the meaning given it under GAAP applied on a basis consistent with those used in preparing the financial statements delivered to Agent pursuant to Section 8.2. Notwithstanding any other provision contained herein, all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to herein shall be made, without giving effect to any election under Accounting Standards Codification 825-10 (or any other Financial Accounting Standard having a similar result or effect) to value any Indebtedness or other liabilities of any Credit Party or any Subsidiary of any Credit Party at “fair value”.
Article 2

BORROWER’S AUTHORIZATION OF ISSUE

Section 2.1    Senior Secured Term Notes.
(a)    The Borrower has authorized (a) the issuance to the Lenders on the Closing Date of senior secured term notes in the aggregate principal amount of $0.00 (the “Closing Notes”) and (b) the issuance to the Lenders after the Closing Date of additional senior secured term notes in the aggregate principal amount not to exceed, together with the aggregate principal amount of the Closing Notes, the Maximum Commitment, in each case of the foregoing clauses (a) and (b), to be dated the date of issuance thereof, to mature on the Maturity Date, to bear interest as provided in Section 2.2 below and to be in the form of Exhibit A hereto (the “Notes”). The commitment of each Lender to fund its pro rata share of Notes issued by the Borrower as of the Closing Date is set forth opposite such Lender’s name in column three (3) of Section 1 of the Schedule of Lenders attached hereto (such amount as the same may be reduced or increased from time to time in accordance with this Agreement, being referred to herein as such Lender’s “Commitment”). The Borrower shall repay the outstanding principal balance of the Notes in full in cash on the Maturity Date, unless accelerated in accordance with Section 10.2 or redeemed or prepaid in accordance with Section 2.3. The proceeds of future purchases of Notes by the Lenders shall be disbursed as the Borrower shall direct on each issuance date of such Note, upon the submission of such evidence as the Agent shall request to verify the satisfaction of the conditions set forth in Section 5.2 below (including, without limitation, a Borrowing Base Certificate delivered in accordance with Section 5.2(g) prior to such disbursement); provided, however, that, after giving effect to any such issuance and purchase of Notes, the aggregate principal amount of all Notes shall not exceed the Maximum Commitment. The Borrower shall deliver to or shall procure the delivery to the Agent a Notice of Purchase and Sale setting forth each proposed issuance of Notes not later than noon, Chicago time, on (A) the fifteenth (15th) day prior to the proposed issuance date upon which the Borrower desires to issue
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Notes for purchase by the Lenders in an amount of $10,000,000 or less or (B) the thirtieth (30th) day prior to the proposed issuance date upon which the Borrower desires to issue Notes for purchase by the Lenders in an amount of greater than $10,000,000, in each case, or such earlier date as shall be agreed to by the applicable Lenders; provided, further, however, that the Borrower shall be entitled to deliver only two (2) Notices of Purchase and Sale during each calendar month. Each Notice of Purchase and Sale required hereunder (i) shall be irrevocable, (ii) shall specify the amount of the proposed issuance (which shall be in increments of not less than $100,000) under the Notes, (iii) shall specify the proposed issuance date for such proposed issuance, which shall be a Permitted Issuance Date and (iv) shall specify wire transfer instructions in accordance with which such issuance under the Notes shall be funded, to the extend purchased by the Lenders. Upon receipt of any such Notice of Purchase and Sale, the Agent shall promptly notify each Lender thereof and of the amount of such Lender’s pro rata share of the proposed issuance (provided, that at the election of the Agent and each applicable Lender, such Lender(s) may agree to purchase such proposed issuance of Notes on a non pro rata basis in amounts acceptable to Agent and such Lender(s) in their sole discretion and in the event of any such non pro rata purchase by such Lender(s), (i) such Lender(s) purchasing less than their pro rata share of the proposed issuance of Notes shall be automatically deemed to have assigned to the applicable Lender(s) purchasing more than their pro rata share of the proposed issuance of Notes (and such Lender(s) purchasing more than their pro rata share of the proposed issuance of Notes shall be automatically deemed to have assumed) a percentage interest in the respective Commitments of such Lender(s) purchasing less than their pro rata share of the proposed issuance of Notes in amounts sufficient to give effect to such non pro rata purchase and such assignment shall otherwise be deemed to be made pursuant to, and in accordance with, the terms of Section 13.8 without further action or documentation by any Person and (ii) the Schedule of Lenders attached hereto shall be updated by Agent to reflect such assignments of the Commitments) and, subject to the terms and conditions of this Agreement and in reliance upon the representations and warranties of the Credit Parties contained herein, each Lender holding a Commitment shall fund its pro rata share of the proposed issuance of the Notes (subject to, and except as set forth in, the preceding parenthetical in this sentence) on the applicable Permitted Issuance Date in immediately available funds in accordance with the terms of such Notice of Purchase and Sale. Notwithstanding anything to the contrary herein, for purposes of clarification, it is hereby agreed that during each calendar month there shall be only, and the Borrower shall not be entitled to specify more than, two (2) Permitted Issuance Dates.
Section 2.2    Interest.    The Borrower shall pay interest on the unpaid principal amount of the Notes, in each case, at the rates, time and manner set forth below:
(a)    Rate of Interest. Each Note shall bear interest on the unpaid principal amount thereof from the date issued through the date such Note is paid in full in cash (whether upon final maturity, by redemption, prepayment, acceleration or otherwise) at the Current Interest Rate. Interest on each Note shall be computed on the basis of a 360-day year and actual days elapsed and, subject to Section 2.2(b), shall be payable monthly, in arrears, on the third (3rd) Business Day following the last day of each calendar month during the period beginning on the date such Note is issued (the “Issuance Date”) and ending on, and including, the date on which the Obligations under such Note are paid in full (each, an “Interest Date”).
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(b)    Interest Payments. Interest on each Note shall be payable on each Interest Date or at any such other time the Notes become due and payable (whether by acceleration, redemption or otherwise) by the Borrower to the Agent, for the account of the record holder of such Note, on the applicable Interest Date. Each Interest Date shall be considered the last day of an accrual period for U.S. federal income tax purposes. Notwithstanding anything herein to the contrary, any payment of accrued but unpaid interest due and owing on any Note shall be made by cash only by wire transfer of immediately available funds.
(c)    Default Rate. Upon the occurrence of any Event of Default, the Notes shall bear interest (including post-petition interest in any proceeding under any Bankruptcy Law) on the unpaid principal amount thereof at the Default Rate from the date of such Event of Default through and including the date such Event of Default is waived. In the event that such Event of Default is subsequently waived, the adjustment referred to in the preceding sentence shall cease to be effective as of the date of such waiver; provided that interest as calculated and unpaid at the Default Rate during the continuance of such Event of Default shall continue to be due to the extent relating to the days after the occurrence of such Event of Default through and including the date on which such Event of Default is waived. All such interest shall be payable on demand of the Agent.
(d)    Savings Clause. In no contingency or event shall the interest rate charged pursuant to the terms of this Agreement exceed the highest rate permissible under any law which a court of competent jurisdiction shall, in a final determination, deem applicable hereto. In the event that such a court determines that the Lenders or Holders have received interest hereunder in excess of the highest applicable rate, the amount of such excess interest shall be applied against the principal amount of the Notes then outstanding to the extent permitted by applicable law, and any excess interest remaining after such application shall be refunded promptly to the Borrower.
(e)    Interest Payment Reduction. On or after January 1, 2021, the Current Interest Rate shall be reduced by one-quarter percent (0.25%) if the Interest Rate Spread Reduction Conditions are satisfied during the 2020 calendar year.
Section 2.3    Redemptions and Payments
(a)    Permitted Redemption.
(i)    The Borrower may at any time after January 1, 2022, at its option, elect to pay to the Agent, on behalf of the Holders, the Permitted Redemption Amount (as defined below), on the Permitted Redemption Date, by redeeming the aggregate unpaid principal amount of all Notes, in whole (and not in part), whereupon the Commitments of each Lender shall automatically and permanently be terminated (the “Permitted Redemption”); provided that, a Permitted Redemption may occur prior to January 1, 2022 only in connection with an M&A Event. The Borrower may not, at any time, redeem the Notes in part. On or prior to the date which is the thirtieth (30th) calendar day prior to the proposed Permitted Redemption Date, the Borrower shall deliver written notice (the “Permitted Redemption Notice”) to the Agent
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stating (i) that the Borrower elects to redeem pursuant to the Permitted Redemption and (ii) the proposed Permitted Redemption Date. The “Permitted Redemption Amount” shall be equal to (A) the aggregate unpaid outstanding principal amount of all Notes, (B) all accrued and unpaid interest with respect to such principal amount and all accrued and unpaid fees, (C) all accrued and unpaid Late Charges with respect to such Permitted Redemption Amount, (D) the Prepayment Premium and (E) all other amounts due under the Transaction Documents. The Credit Parties acknowledge and agree that the Prepayment Premium represents bargained for consideration in exchange for the right and privilege to redeem the Notes.
(ii)    A Permitted Redemption Notice delivered pursuant to this subsection shall be irrevocable; provided that such Permitted Redemption Notice may be revoked if for any reason the applicable M&A Event covered by such Permitted Redemption Notice is terminated prior to closing. If the Borrower elects to redeem the Notes pursuant to a Permitted Redemption under Section 2.3(a), then the Permitted Redemption Amount which is to be paid to the Agent, on behalf of the Holders, on the Permitted Redemption Date shall be redeemed by the Borrower on the Permitted Redemption Date, and the Borrower shall pay to the Agent, on behalf of the Holders, on the Permitted Redemption Date, by wire transfer of immediately available funds, an amount in cash equal to the Permitted Redemption Amount.
(iii)    Notwithstanding the foregoing and anything to the contrary herein, (A) if a Federal or Multi-State Force Majeure Event shall have occurred or (B) if the Lenders shall fail to purchase additional Notes requested by the Borrower after the Closing Date in accordance with Section 2.1 and provided that all conditions of such purchase set forth in Section 5.2 shall have been satisfied at the time thereof (a “Qualified Funding Failure”), then the Borrower shall have the right, exercisable upon at least sixty (60) calendar days’ prior written notice to the Agent, to consummate a Permitted Redemption at a price equal to the Permitted Redemption Amount excluding the Prepayment Premium, which Permitted Redemption shall otherwise be made in accordance with the provisions of Section 2.3(a)(i) hereof; provided, that such right to consummate a Permitted Redemption at a price equal to the Permitted Redemption Amount excluding the Prepayment Premium shall expire (x) in the case of the foregoing clause (A), upon the cessation of such Federal or Multi-State Force Majeure Event or (y) in the case of the foregoing clause (B), upon written notice from the Agent to the Borrower, given no later than ten (10) calendar days after the Agent’s receipt of the Borrower’s notice of redemption under the foregoing Section 2.3(a)(iii)(B) stating that the Lenders are thereafter willing and able to purchase additional Notes requested by the Borrower, in accordance with Section 2.1 and provided that all conditions of such purchase set forth in Section 5.2 shall have been satisfied at the time thereof; provided further, that, in the case of a Permitted Redemption in respect of the foregoing clause (A), if such Federal or Multi-State Force Majeure Event ceases within the earlier of (i) one (1) year following such Permitted Redemption or (ii) July 1, 2021, the Credit Parties shall give the Agent and Lenders the right to participate in any new Program or substantially similar program to the Program. For purposes of clarification, prior to the expiration of the ten (10) calendar day (or longer, as the case may be) notice of purchase pursuant to the foregoing Section 2.3(a)(iii)(B), the Agent may deliver notice to the Borrower that the Lenders are willing and able to purchase additional Notes and provided that all conditions of such purchase set forth in Section 5.2 shall have been satisfied at the time thereof,
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whereupon such right to consummate a Permitted Redemption at a price equal to the Permitted Redemption Amount excluding the Prepayment Premium shall automatically terminate, but the Borrower shall at all times thereafter retain the right to consummate a Permitted Redemption at a price equal to the Permitted Redemption Amount including the Prepayment Premium (if applicable), which Permitted Redemption shall otherwise be made in accordance with the provisions of Section 2.3(a)(i) hereof. The provisions of this Section 2.3(a)(iii) set forth the exclusive rights and remedies of the Credit Parties to seek or obtain damages or any other remedy or relief from the Agent or any Lender with respect to any Qualified Funding Failure.
(b)    Mandatory Prepayments.
(i)    On the date of receipt by any Credit Party or any of their Subsidiaries of any net cash proceeds in excess of $200,000 in the aggregate during any Fiscal Year from any Asset Sales (other than Permitted Dispositions), the Borrower shall prepay the Notes as set forth in Section 2.3(e) in an aggregate amount equal to 100% of such net cash proceeds.
(ii)    On the date of receipt by any Credit Party or any of their Subsidiaries, or the Agent as loss payee, of any net cash proceeds from any Destruction or Taking, the Borrower shall prepay the Notes as set forth in Section 2.3(e) in an aggregate amount equal to 100% of such net cash proceeds; provided, so long as no Event of Default (or event or circumstance that, with the passage of time, the giving of notice, or both, would become an Event of Default) shall have occurred and be continuing on the date of receipt thereof or caused thereby, the Borrower shall have the option to apply such net cash proceeds, prior to the date that is 90 days following receipt thereof, for purposes of the repair, restoration or replacement of the applicable assets thereof.
(iii)    On the date of receipt by any Credit Party or any of their Subsidiaries of any net cash proceeds in excess of $5,000,000 in the aggregate during the term of this Agreement from a capital contribution by any Person (other than an Elevate Credit Subsidiary) to, or the issuance to any Person (other than a Credit Party or an Elevate Credit Subsidiary) of any Equity Interests of any Credit Party or any of their Subsidiaries, the Borrower shall prepay the Notes as set forth in Section 2.3(e) in an aggregate amount equal to 100% of such net cash proceeds.
(iv)    On the date of receipt by any Credit Party or any of their Subsidiaries of any net cash proceeds from the incurrence of any Indebtedness (other than with respect to Permitted Indebtedness) of any Credit Party or any of their Subsidiaries, the Borrower shall prepay the Notes as set forth in Section 2.3(e) in an aggregate amount equal to 100% of such net cash proceeds.
(v)    On the date of receipt by any Credit Party or any of their Subsidiaries of any Extraordinary Receipts, the Borrower shall prepay the Notes as set forth in Section 2.3(e) in an aggregate amount equal to 100% of such Extraordinary Receipts.
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(vi)    If at any time the then outstanding principal balance of Notes shall exceed the Maximum Commitment, the Borrower shall immediately prepay the Notes as set forth in Section 2.3(e) in an amount sufficient to eliminate such excess.
(vii)    Concurrently with any prepayment of the Notes pursuant to this Section 2.3(b), the Borrower shall deliver to the Agent a certificate of an authorized officer thereof demonstrating the calculation of the amount of the applicable proceeds. In the event that the Credit Parties shall subsequently determine that the actual amount of such proceeds exceeded the amount set forth in such certificate (including as a result of the conversion of non-cash proceeds into cash), the Borrower shall promptly make an additional prepayment of all the Notes in an amount equal to such excess (or applicable percentage thereof), and the Borrower shall concurrently therewith deliver to the Agent a certificate of an authorized officer thereof demonstrating the derivation of such excess.
(c)    Optional Reborrowing. Subject to the satisfaction of the Revolving Conditions, the Borrower may, at its option once per year on an Optional Revolving Date, elect to pay to the Agent, on behalf of the Holders, the Revolving Amount (as defined below) (the “Optional Reborrowing”). The “Revolving Amount” shall be equal to (A) up to twenty percent (20%) of the aggregate unpaid outstanding principal amount of all Notes, (B) all accrued and unpaid interest with respect to such principal amount repaid and all accrued and unpaid fees and (C) all accrued and unpaid Late Charges with respect to such Revolving Amount. On or prior to the date which is the sixtieth (60th) calendar day prior to the proposed Optional Revolving Date, the Borrower shall deliver written notice to the Agent stating (i) that the Borrower elects to make a payment in connection with an Optional Reborrowing and (ii) the proposed Revolving Amount. The Commitments of each Lender shall not automatically and permanently be terminated or decreased as a result of a payment by Borrower of any Revolving Amount pursuant to this Section 2.3(c) and Borrower may reborrow any Revolving Amount in accordance with Section 2.1; provided that reborrowing any such Revolving Amount within one hundred eighty (180) days shall not cause the Current Interest Rate to decrease.
(d)    Waiver of Mandatory Prepayments. Anything contained in Section 2.3(b) to the contrary notwithstanding, in the event the Borrower is required to make any mandatory prepayment (a “Waivable Mandatory Prepayment”) of the Notes, not less than three (3) Business Days prior to the date (the “Required Prepayment Date”) on which the Borrower is required to make such Waivable Mandatory Prepayment, the Borrower shall notify the Agent of the amount of such prepayment, and the Agent shall promptly thereafter notify each Holder holding an outstanding Note of the amount of such Holder’s pro rata share of such Waivable Mandatory Prepayment and such Holder’s option to refuse such amount. Each such Holder may exercise such option by giving written notice to the Borrower and the Agent of its election to do so on or before the first Business Day prior to the Required Prepayment Date (it being understood that any Holder which does not notify the Borrower and the Agent of its election to exercise such option on or before the first Business Day prior to the Required Prepayment Date shall be deemed to have elected, as of such date, not to exercise such option). On the Required Prepayment Date, the Borrower shall pay to the Agent the amount of the Waivable Mandatory Prepayment, which amount shall be applied in an amount equal to that
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portion of the Waivable Mandatory Prepayment payable to those Holders that have elected not to exercise such option, to prepay the Notes of such Holders.
(e)    Application of Mandatory Prepayments; Prepayment Premium. All mandatory prepayments made pursuant to Section 2.3(b) and not waived pursuant to Section 2.3(d) shall be made to the Agent, for the account of the Holders, as determined by the Agent in its sole discretion. Concurrently with each mandatory prepayment made pursuant to (i) Section 2.3(b) (other than in accordance with Section 2.3(b)(vi)), the Commitment of each Lender shall, at the election of Agent to be given to Borrower within five (5) Business Days after receipt of such mandatory prepayment (or automatically upon the occurrence of any Event of Default described in Section 10.1(c) or Section 10.1(d)), permanently be reduced by the amount of such prepayment and (ii) Section 2.3(b) (other than in accordance with Sections 2.3(b)(ii), 2.3(b)(v), 2.3(b)(vi) or 2.3(b)(vii) (solely to the extent such excess required to be applied as a prepayment relates to a prepayment under Sections 2.3(b)(ii), 2.3(b)(v) or 2.3(b)(vi))), the Borrower shall also pay to the Agent, for the ratable benefit of the Holders, the Prepayment Premium in respect of the Notes repaid or redeemed in connection with such mandatory prepayment.
Section 2.4    Payments.    Whenever any payment of cash is to be made by any Credit Party to any Person pursuant to this Agreement, the Notes or other Transaction Document, such payment shall be made in lawful money of the United States of America by a check drawn on the account or accounts of such Credit Party and sent via overnight courier service to such Person at such address as previously provided to the Borrower in writing (which address, in the case of each of the Lenders, shall initially be as set forth on the Schedule of Lenders attached hereto); provided that (i) the Agent, any Holder or any Lender may elect to receive a payment of cash via wire transfer of immediately available funds by providing the Borrower with prior written notice setting out such request and the Agent’s, such Holder’s or such Lender’s wire transfer instructions and (ii) Credit Parties may elect to make a payment of cash via wire transfer of immediately available funds in accordance with wire transfer instructions provided by the Agent, each Holder and each Lender upon request therefor. Whenever any amount expressed to be due by the terms of this Agreement or any Note is due on any day which is not a Business Day, the same shall instead be due on the next succeeding day which is a Business Day and, in the case of any Interest Date which is not the date on which the applicable Note is paid in full in cash, the extension of the due date thereof shall not be taken into account for purposes of determining the amount of interest due on such date. Any amount due under the Transaction Documents (other than principal and interest, if the same are already accruing interest at the Default Rate), which is not paid when due shall result in a late charge being incurred and payable by the Borrower in an amount equal to accrued interest at the Default Rate from the date such amount was due until the same is paid in full in cash (“Late Charge”). Such Late Charge shall continue to accrue post-petition in any proceeding under any Bankruptcy Law.
Section 2.5    Dispute Resolution.    Except as otherwise provided herein, in the case of a dispute as to the determination of any amounts due and owing pursuant to a redemption under Section 2.3 or otherwise or any other similar or related amount, the Borrower shall submit the disputed determinations or arithmetic calculations via facsimile within three (3) Business Days
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of receipt, or deemed receipt, of the applicable notice of dispute to the Agent. If the Agent and the Borrower are unable to agree upon such determination or calculation within three (3) Business Days of such disputed determination or arithmetic calculation being submitted to the Agent, then the Borrower shall, within three (3) Business Days submit via facsimile the disputed determinations or arithmetic calculations to an independent outside national accounting firm specified by Agent. The Borrower, at the Borrower’s expense, shall cause the accountant to perform the determinations or calculations and notify the Agent of the results no later than five (5) Business Days from the time it receives the disputed determinations or calculations. Such accountant’s determination or calculation, as the case may be, shall be binding upon all parties absent demonstrable error.
Section 2.6    Taxes.
(a)    Any and all payments by or on behalf of the Credit Parties hereunder and under any other Transaction Document shall be made free and clear of and without deduction or withholding for any and all current or future Taxes, levies, imposts, deductions or charges unless required by law. If any Non-Excluded Taxes are required by law to be deducted or withheld from or in respect of any payment or sum payable hereunder or under any Transaction Document by any Withholding Agent to the Agent, any Holder or any Lender, (x) the applicable Withholding Agent shall make such deductions and withholdings within the time allowed and in the minimum amount required by law, (y) the sum payable by the applicable Credit Party shall be increased by the amount (an “Additional Amount”) necessary so that, after making all required deductions and withholdings (including deductions and withholdings applicable to additional sums payable under this Section 2.6(a)) the Agent, such Holder or such Lender, as applicable, shall receive an amount equal to the sum it would have received had no such deductions or withholdings been made and (z) the Withholding Agent shall pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable law and shall promptly provide to the Agent, Holder or Lender, as applicable, an evidence of such payment to the relevant Governmental Authority (in a form reasonably satisfactory to the Agent, Holder or Lender, as applicable).
(b)    The Borrower will pay to the relevant Governmental Authority in accordance with applicable law any current or future stamp, stamp duty, registration, court, documentary, intangible, recording, filing or similar Taxes or any other excise or property taxes, charges or similar levies that arise from any payment made hereunder or under any Transaction Document, or from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, this Agreement or any Transaction Document that are or would be applicable to the Holders, the Agent, or a Lender (“Other Taxes”).
(c)    The Credit Parties agree to indemnify the Agent, each Holder, each Lender and their respective Affiliates for the full amount of Non-Excluded Taxes and Other Taxes paid by the Agent, such Holder, such Lender or such Affiliates and any liability (including penalties, interest and expenses (including reasonable attorney’s and other advisors’ fees and expenses)) arising therefrom or with respect thereto, whether or not such Non-Excluded Taxes or Other
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Taxes were correctly or legally asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability prepared by the Agent, such Holder, such Lender or such Affiliate, absent manifest error, shall be final conclusive and binding for all purposes. Such indemnification shall be made within thirty (30) days after the date the Agent, such Holder, such Lender or such Affiliate makes written demand therefor. Agent, a Lender, a Holder or any of their respective Affiliates shall notify the Borrower in writing of the receipt by such Person of any written notice from any taxing authority demanding, or threatening to demand, any Tax indemnifiable by the Borrower under this Section 2.6(c), within a reasonable period of time after receipt of such notice.
(d)    On the Closing Date, and subsequently on or prior to the date on which a Lender or Holder becomes a Lender or Holder under this Agreement with respect to the Borrower (and from time to time thereafter upon the reasonable request of the Borrower or the Agent), each applicable Lender and Holder shall deliver to the Borrower a completed and signed IRS Form W-8 or IRS Form W-9 (or any successor form), as applicable. In the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate substantially in the form attached hereto as Exhibit I to the effect that such Foreign Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code (a “US Tax Compliance Certificate”).
(e)    The Parties agree to treat and report amounts lent under this Agreement and any amount due under the Notes as debt for U.S. federal, state and local income tax purposes. The Credit Parties agree to indemnify the Agent, each Holder, each Lender and their respective Affiliates for the full amount of Taxes and Other Taxes paid by the Agent, such Holder, such Lender or such Affiliates and any liability (including penalties, interest and expenses (including reasonable attorney’s and other advisors’ fees and expenses)) arising therefrom or with respect thereto, whether or not such Taxes or Other Taxes were correctly or legally asserted by the relevant Governmental Authority, to the extent such Taxes or Other Taxes are imposed as a result of the treatment of any amounts lent under this Agreement or any amount due under the Notes as other than debt by any Governmental Authority.
(f)    Survival. Notwithstanding anything to the contrary herein, each party’s obligations under this Section 2.6 and Section 13.12 shall survive the resignation or replacement of the Agent or any assignment of rights by, or the replacement of, a Lender or Holder, the termination of the Commitments and the repayment, satisfaction or discharge of all obligations under any Transaction Document.
Section 2.7    Reissuance.
(a)    Transfer. If any Note is to be transferred, the Holder thereof shall surrender such Note to the Borrower, whereupon the Borrower will forthwith issue and deliver upon the order of such Holder a new Note (in accordance with this Section 2.7), registered as such Holder may request (provided that electronic registration is acceptable), representing the outstanding principal being transferred by such Holder and, if less than the entire outstanding
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principal amount is being transferred, a new Note (in accordance with this Section 2.7) to such Holder representing the outstanding principal not being transferred.
(b)    Lost, Stolen or Mutilated Note. Upon receipt by the Borrower of evidence reasonably satisfactory to the Borrower of the loss, theft, destruction or mutilation of any Note and (i) in the case of loss, theft or destruction, upon delivery of an indemnity agreement reasonably satisfactory to the Borrower (provided, however, that if the Holder is an institutional investor, the affidavit of an authorized partner or officer of such Holder setting forth the circumstances with respect to such loss, theft or destruction shall be accepted as satisfactory evidence thereof and no indemnity agreement or other security shall be required), and (ii) in the case of mutilation, upon surrender and cancellation of the mutilated Note, the Borrower shall execute and deliver to such Holder a new Note (in accordance with this Section 2.7) representing the outstanding principal.
(c)    Note Exchangeable for Different Denominations. The Notes are exchangeable, upon the surrender thereof by the Holder at the principal office of the Borrower, for a new Note or Notes (in accordance with this Section 2.7) of like tenor in principal amounts of at least $100,000 representing in the aggregate the outstanding principal of the surrendered Note, and each such new Note will represent such portion of such outstanding principal as is designated by such Holder or such Lender at the time of such surrender.
(d)    Issuance of New Notes. Whenever the Borrower is required to issue a new Note pursuant to the terms of this Agreement or the Notes, such new Note (i) shall be of like tenor with the Note being replaced, (ii) shall represent, as indicated on the face of such new Note, the principal remaining outstanding (or, in the case of a new Note being issued pursuant to paragraph (a) or (b) of this Section 2.7, the principal designated by the Holder which, when added to the principal represented by the other new Notes issued in connection with such issuance, equals aggregate principal remaining outstanding under the Note being replaced immediately prior to such issuance of new Notes), (iii) shall have an Issuance Date, as indicated on the face of such new Note, which is the same as the Issuance Date of the Note being replaced, (iv) shall have the same rights and conditions as the Note being replaced, and (v) shall represent accrued interest on the principal, Prepayment Premium and Late Charges of the Note being replaced from such Issuance Date.
Section 2.8    Register.    The Borrower shall maintain at its principal executive office (or such other office or agency of the Borrower (or the Agent on its behalf) as it may designate by notice to each holder of Notes), a register for the Notes in which the Borrower (or the Agent on its behalf) shall record the name and address of the Person in whose name the Notes have been issued (including the name and address of each transferee) and the principal amount (and stated interest) of Notes held by such Person (the “Register”). The Borrower shall keep the Register open and available at all times during normal business hours for inspection of any Holder, any Lender or their respective representatives. The Register may be maintained in electronic format.
Section 2.9    Maintenance of Register.    Notwithstanding anything to the contrary contained herein, the Notes and this Agreement are registered obligations and the right, title, and
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interest of each Holder, each Lender and their assignees in and to such Notes (or any rights under this Agreement) shall be transferable only upon notation of such transfer in the Register. The Notes shall only evidence a Holder’s, a Lender’s or their assignee’s right, title and interest in and to the related Notes, and in no event is any such Note to be considered a bearer instrument or obligation. This Section 2.9 shall be construed so that the Notes are at all times maintained in “registered form” within the meaning of Sections 163(f), 871(h)(2) and 881(c)(2) of the Code and any related Treasury regulations promulgated thereunder.
Section 2.10    Monthly Maintenance Fee.    The Borrower hereby agrees to pay to Agent in arrears on the last Business Day of each calendar month, a monthly maintenance fee in the amount of $5,000 (collectively, the “Monthly Maintenance Fees”). The Borrower agrees that the Monthly Maintenance Fees shall be fully-earned when paid and shall not be refundable in whole or in part under any circumstances.
Article 3

CLOSING

Section 3.1    Initial Closing.    In consideration for each applicable Lender’s payment of its pro rata share of the aggregate purchase price (the “Closing Note Purchase Price”) of the Notes to be purchased by the Lenders at the Closing (as defined below), which is set forth opposite such Lender’s name in column four (4) of the Schedule of Lenders attached hereto, the Borrower shall issue and sell to such Lender on the Closing Date (as defined below), and each applicable Lender severally, but not jointly, agrees to purchase from the Borrower on the Closing Date, a Note, in substantially the form attached hereto as Exhibit A, and in the aggregate principal amount as is set forth opposite such Lender’s name in column four (4) of the Schedule of Lenders attached hereto. The closing (the “Closing”) of the transactions contemplated by this Agreement and the issuance of the Notes to be issued on the Closing Date by the Borrower and the purchase thereof by the applicable Lenders shall occur at the offices of Katten Muchin Rosenman LLP, 525 West Monroe Street, Suite 1900, Chicago, Illinois 60661. The date and time of the Closing (the “Closing Date”) shall be 10:00 a.m., Chicago time, on the date hereof, subject to notification of satisfaction (or waiver) of the conditions to the Closing set forth in Section 5.1 below (or such later date as is mutually agreed to by the Borrower and the Agent). On the Closing Date, (i) each Lender shall pay its pro rata share of the Closing Note Purchase Price to the Borrower for the Notes to be issued and sold to such Lender at the Closing, by wire transfer of immediately available funds, as more fully set forth on the Schedule of Lenders and (ii) the Borrower shall deliver to each Lender the Notes (in the denominations as such Lender shall have requested prior to the Closing) which such Lender is then purchasing, duly executed on behalf of the Borrower and registered in the name of such Lender or its designee.
Section 3.2    Subsequent Closings.    Subject to the satisfaction (or waiver by the Agent in its sole discretion) of the conditions to a Subsequent Closing set forth in Section 5.2 and further subject to Section 10.2(a), each applicable Lender hereby promises to purchase from the
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Borrower an aggregate principal amount of additional Notes not to exceed, when aggregated with the principal amount of Notes acquired by such Lender prior to such Subsequent Closing (including, without limitation, at the Closing), such Lender’s Commitment. Subject to the satisfaction (or waiver by the Agent) of the conditions to a Subsequent Closing set forth in Section 5.2 and further subject to Section 10.2(a), in consideration for each applicable Lender’s payment of its pro rata share of the aggregate purchase price (the “Subsequent Closing Note Purchase Price”) of the Notes to be purchased by such Lenders at such Subsequent Closing, the Borrower shall issue and sell to each Lender on the applicable Subsequent Closing Date (as defined below), and each Lender severally, but not jointly, agrees to purchase from the Borrower on such Subsequent Closing Date, a principal amount of Notes in the amount each Lender has agreed in writing to pay in respect thereof, pursuant to a Notice of Purchase and Sale. The closing (each a “Subsequent Closing”) of any of the transactions contemplated by this Section 3.2 and the issuance of the additional Notes to be issued to the Lenders at such Subsequent Closing shall occur at the offices of Katten Muchin Rosenman LLP, 525 West Monroe Street, Suite 1900, Chicago, Illinois 60661. With respect to each Subsequent Closing, the date and time of such Subsequent Closing (the “Subsequent Closing Date”) shall be 10:00 a.m., Chicago time, on the date on which the conditions set forth in Section 5.2 below shall be satisfied or waived in accordance with this Agreement (or such later date as is mutually agreed to by the Borrower and the Agent). On each Subsequent Closing Date, (i) each Lender shall pay its pro rata share of the applicable Subsequent Closing Note Purchase Price to the Borrower for the Notes to be issued and sold to such Lender at such Subsequent Closing, by wire transfer of immediately available funds in accordance with the Borrower’s written wire instructions, and (ii) the Borrower shall deliver to each Lender the Notes (in the denominations as such Lender shall have requested prior to such Subsequent Closing) which such Lender is then purchasing, duly executed on behalf of the Borrower and registered in the name of such Lender or its designee.
Article 4

INTENTIONALLY OMITTED

Article 5
CONDITIONS TO CLOSING AND EACH LENDER’S OBLIGATION TO PURCHASE

Section 5.1    Closing.    The obligation of the Agent and the Lenders to close the transactions contemplated by this Agreement is subject to the satisfaction, at or before the Closing Date, of each of the following conditions:
(a)    Reserved.
(b)    The Borrower shall have executed and delivered, or caused to be delivered, to the Agent evidence satisfactory to the Agent that the Borrower shall pay to the Agent on the Closing Date all fees and other amounts due and owing thereon under this Agreement and the other Transaction Documents.
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(c)    The Credit Parties shall have executed and/or delivered, or caused to be delivered, to the Agent each of the Security Documents and the Credit Parties shall have executed (to the extent applicable) and/or delivered, or caused to be delivered, to the Agent:
(i)    certificates evidencing any Pledged Equity (as defined in the Security Agreement) pledged to the Agent pursuant to the Security Agreement, together with duly executed in blank, undated stock or unit powers attached thereto; and
(ii)    such other documents relating to the transactions contemplated by this Agreement as the Agent or its counsel may reasonably request.
(d)    The Credit Parties shall have executed and/or delivered, or caused to be delivered, to the Agent, without duplication, the deliveries set forth in each of the Index of Closing Documents attached hereto as Exhibit H.
(e)    Each Credit Party shall have executed and delivered, or caused to be delivered, to the Agent:
(i)    a certificate evidencing its organization, formation, or incorporation (as applicable) and good standing in its jurisdiction of organization or incorporation issued by the Secretary of State of such jurisdiction, as of a date reasonably proximate to the Closing Date;
(ii)    a certificate evidencing its qualification as a foreign corporation, limited liability company or other entity (as applicable) and good standing issued by the Secretary of State (or comparable office) of each jurisdiction in which such Person is qualified to conduct business and failure to so qualify would cause a Material Adverse Effect, as of a date reasonably proximate to the Closing Date;
(iii)    a certificate as to the fact that no action has been taken with respect to any merger, consolidation, liquidation or dissolution of such Person, or with respect to the sale of substantially all of its assets, nor is any such action pending or contemplated; and
(iv)    a certificate, executed by the secretary (or other authorized officer) of such Person and dated the Closing Date, as to (A) the resolutions consistent with Section 7.2 as adopted by such Person’s board of directors (or similar governing body) in a form reasonably acceptable to the Agent, (B) such Person’s certificate of incorporation (or similar document), each as in effect at the Closing, (C) such Person’s bylaws or memorandum and articles of association (or similar document), each as in effect at the Closing, and (D) no action having been taken by such Person or its stockholders, members, directors or officers (as applicable) in contemplation of any amendments to items (A), (B), or (C) listed in this Section 5.1(e)(iv), as certified in the form attached hereto as Exhibit C.
(f)    The Borrower shall have obtained and delivered to Agent:
(i)    the opinions of Outside Legal Counsel, dated the Closing Date;
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(ii)    all governmental, regulatory and third party consents, approvals and notifications, if any, necessary for the closing of the transactions contemplated by this Agreement and the issuance of the Notes to be issued at the Closing;
(iii)    if requested by the Agent, updated Lien searches in the jurisdictions of organization of each Credit Party, the jurisdiction of the chief executive offices of each Credit Party and each jurisdiction where a filing would need to be made in order to perfect the Agent’s and Holders’ security interest in the Collateral, copies of the financing statements on file in such jurisdictions and evidence that no Liens exist other than Permitted Liens;
(iv)    such information in form, scope and substance reasonably satisfactory to the Agent regarding environmental matters relating to all real property owned, leased, operated or used by the Credit Parties as of the Closing Date;
(v)    a certificate from the chief financial officer of the Borrower (or other authorized executive officer performing a similar function) in form and substance satisfactory to the Agent, supporting the conclusions that, after giving effect to the transactions contemplated by the Transaction Documents, the Borrower is not Insolvent; and
(vi)    if requested by the Agent, updated certificates from the Borrower’s insurance broker or other evidence satisfactory to it that all insurance required to be maintained pursuant to this Agreement is in full force and effect, together with endorsements naming the Agent, for the benefit of the Holders, as additional insured and lender’s loss payee thereunder, as applicable.
(g)    Each Credit Party shall have authorized the filing of UCC financing statements for each appropriate jurisdiction as is necessary, in the Agent’s sole discretion, to perfect the Agent’s security interest in the Collateral and, if applicable, the filing of the Intellectual Property Security Agreements in the U.S. Patent and Trademark Office and the U.S. Copyright Office, as applicable.
(h)    The Borrower shall have caused to be executed and delivered, to the Agent such landlord waivers, collateral access agreements or other similar documents as the Agent may reasonably request.
(i)    The representations and warranties of the Credit Parties shall be true and correct in all material respects (without duplication of any materiality qualifiers) as of the date when made and as of the Closing Date as though made at that time (except for representations and warranties that speak as of a specific date, which shall be true and correct in all material respects (without duplication of any materiality qualifiers) as of such specific date), and the Credit Parties shall have performed, satisfied and complied in all respects with the covenants, agreements and conditions required by the Transaction Documents to be performed, satisfied or complied with by the Credit Parties at or prior to the Closing Date. The Agent shall have received a certificate, executed by the chief executive officer of the Borrower (or other authorized executive officer performing a similar function), dated the Closing Date, to the
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foregoing effect in respect of the Borrower only and as to such other matters as may be reasonably requested by the Agent, in the form attached hereto as Exhibit D.
(j)    No Event of Default (or event or circumstance that, with the passage of time, the giving of notice, or both, would become an Event of Default) shall have occurred and be continuing or would result from the closing of the transactions contemplated by this Agreement or issuance of the Notes to be issued at the Closing.
(k)    The Credit Parties shall have paid or reimbursed the Agent and the Lenders for all costs and expenses required to be paid or reimbursed by them on the Closing Date in accordance with Section 8.22 hereof.
Section 5.2    Subsequent Closings.    The obligation of each Lender hereunder to purchase Notes at a Subsequent Closing is subject to the satisfaction, at the applicable Subsequent Closing Date, of each of the following conditions:
(a)    Each representation and warranty by any Credit Party contained herein and in each other Transaction Document shall be true and correct in all material respects (without duplication of any materiality qualifiers) as of such date (subject to such updates to the Schedules, if any, as are approved by the Agent in its reasonable discretion), except to the extent that such representation or warranty expressly relates to an earlier date, including the Closing Date (in which event such representations and warranties shall be true and correct in all material respects (without duplication of any materiality qualifiers) as of such earlier date).
(b)    No Event of Default or event or circumstance which, with the giving of notice, the lapse of time, or both, would (if not cured or otherwise remedied during such time) constitute an Event of Default shall have occurred and be continuing or would result after giving effect to such issuance and purchase of Notes.
(c)    After giving effect to such issuance and purchase of Notes, the aggregate outstanding principal amount of the Notes would not exceed the Maximum Commitment.
(d)    The funding date shall be a Permitted Issuance Date.
(e)    After giving effect to such draw, the Debt-to-Equity Ratio of the Borrower shall not be more than 9-to-1.
(f)    The Credit Parties shall have paid or reimbursed the Agent and the Lenders for all costs and expenses required to be paid or reimbursed by them on the Permitted Issuance Date in accordance with Section 8.22 hereof.
(g)    The Credit Parties shall have delivered a Borrowing Base Certificate, certified on behalf of the Borrower by the chief financial officer of the Borrower (or other authorized executive officer performing a similar function), setting forth the Borrowing Base of the Borrower as of a date no earlier than the end of the most recently ended fiscal month and no later than the day immediately preceding the funding date.
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The request by the Borrower and acceptance by the Borrower of the proceeds of any additional issuance and purchase of Notes made on a Subsequent Closing Date shall be deemed to constitute, as of such Subsequent Closing Date, (i) a representation and warranty by the Borrower that the conditions in this Section 5.2 have been satisfied and (ii) a reaffirmation by each Credit Party of the granting and continuance of Agent’s Liens, on behalf of the Lenders and the Holders, pursuant to the Transaction Documents.
Article 6
Intentionally Omitted

Article 7
CREDIT PARTIES’ REPRESENTATIONS AND WARRANTIES
As an inducement to the Agent and the Lenders to enter into this Agreement and to consummate the transactions contemplated hereby, each of the Credit Parties severally represents and warrants in respect of itself to each of the Agent and the Lenders that each and all of the following representations and warranties (as supplemented by the disclosure schedules delivered to the Agent and the Lenders contemporaneously with the execution and delivery of this Agreement (the “Schedules”)) as applicable to it, are true and correct as of the Closing Date and as of each Subsequent Closing Date. The Schedules shall be arranged by the Borrower in paragraphs corresponding to the sections and subsections contained in this Article 7.
Section 7.1    Organization and Qualification.    Each Credit Party and each of its respective Subsidiaries (which, for purposes of this Agreement, means any entity in which any Credit Party, directly or indirectly, owns at least 50% of the Capital Stock or other Equity Interests) (“Subsidiaries”) are entities duly incorporated or organized and validly existing in good standing under the laws of the jurisdiction in which they are formed or incorporated, and have the requisite corporate or limited liability company power and authorization, as applicable, to own their properties, carry on their business as now being conducted, enter into the Transaction Documents to which they are party and carry out the transactions contemplated thereby. Each Credit Party and each of its Subsidiaries is duly qualified as a foreign entity to do business and is in good standing in every jurisdiction in which its ownership of property or the nature of the business conducted by it makes such qualification necessary, except to the extent that the failure to be so qualified or be in good standing would not have, either individually or in the aggregate, a Material Adverse Effect. Except as set forth on Schedule 7.1, (i) no Credit Party has any Subsidiaries and (ii) all Capital Stock or other equity or similar interests of the Subsidiaries is directly or indirectly owned by a Credit Party, as set forth therein.
Section 7.2    Authorization; Enforcement; Validity.    Each of the Credit Parties has the requisite power and authority to enter into and perform its obligations under this Agreement, the Notes, the Security Agreement, each of the other Security Documents, the Intercreditor Agreement and each of the other agreements, documents and certificates entered into by the parties hereto in connection with the transactions contemplated by this Agreement (collectively, the “Transaction Documents”) and to issue the Notes in accordance with the terms hereof and thereof. The execution and delivery of the Transaction Documents by the Credit Parties have
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been duly authorized by each of the Credit Parties’ respective board of directors (or other governing body) and the consummation by the Credit Parties of the transactions contemplated hereby and thereby, including, without limitation, the issuance of the Notes by the Borrower has been duly authorized by the respective Credit Party’s board of directors (or other governing body), and (other than filings with “Blue Sky” authorities as required therein) no further filing, consent, or authorization is required by any Credit Party, its board of directors (or other governing body) or its stockholders or any parties in a similar capacity.
Section 7.3    Issuance of Notes.    The Notes are duly authorized and, upon issuance in accordance with the terms hereof, shall be validly issued and free from all Taxes, liens and charges with respect to the issue thereof.
Section 7.4    No Conflicts.    Neither the execution, delivery and performance of the Transaction Documents by the Credit Parties party thereto, nor the consummation by the Credit Parties of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Notes) will (i) result in a violation of any Credit Party’s or any Subsidiary’s certificate of incorporation, certificate of formation, bylaws, limited liability company agreement or other governing documents, or the terms of any Capital Stock or other Equity Interests of any Credit Party or any of their Subsidiaries; (ii) conflict with, or constitute a breach or default (or an event which, with notice or lapse of time or both, would become a breach or default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any Consumer Loan Agreement or any other agreement, indenture or instrument to which any Credit Party or any of their Subsidiaries is a party; (iii) result in any “price reset” or other material change in or other modification to the terms of any Indebtedness, Equity Interests or other securities of any Credit Party or any of their Subsidiaries; or (iv) result in a violation of any law, rule, regulation, order, judgment or decree (including, without limitation, (A) any Environmental Laws, (B) any Requirements or (C) any federal or state securities laws).
Section 7.5    Consents.    Except as set forth on Schedule 7.5, no Credit Party is required to obtain any consent, authorization, approval, order, license, franchise, permit, certificate or accreditation of, or make any filing or registration with, any court, governmental agency or any regulatory or self-regulatory agency or authority or any other Person in order for it to execute, deliver or perform any of its obligations under or contemplated by the Transaction Documents, in each case in accordance with the terms hereof or thereof (other than filings required by the Security Documents). All consents, authorizations, approvals, orders, licenses, franchises, permits, certificates or accreditations of, filings and registrations set forth on Schedule 7.5 have been obtained or effected on or prior to the Closing Date.
Section 7.6    Subsidiary Rights.    Each Credit Party has the unrestricted right to vote, and (subject to limitations imposed by applicable law) to receive dividends and distributions on, all capital and other equity securities of its Subsidiaries as owned by any Credit Party.
Section 7.7    Equity Capitalization.    As of the Closing Date, the authorized Capital Stock and the issued and outstanding Equity Interests of each Credit Party and each Subsidiary of each Credit Party is as set forth on Schedule 7.7. All of such outstanding shares of Capital Stock or other Equity Interests of the Credit Parties and their Subsidiaries have been duly
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authorized, validly issued and are fully paid and nonassessable and are owned by the Persons and in the amounts set forth on Schedule 7.7. Except as set forth on Schedule 7.7: (i) none of any Credit Party or any Subsidiary’s Capital Stock or other Equity Interest in any other Credit Party or such Subsidiary is subject to preemptive rights or any other similar rights or any liens or encumbrances suffered or permitted by such Credit Party or such Subsidiary; (ii) there are no outstanding options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable for, any Capital Stock or other Equity Interests in any Credit Party or any of their Subsidiaries, or contracts, commitments, understandings or arrangements by which any Credit Party or any of their Subsidiaries is or may become bound to issue additional Capital Stock or other Equity Interests in such Credit Party or such Subsidiary or options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable for, any Capital Stock or other Equity Interests in any Credit Party or any of their Subsidiaries; (iii) there are no outstanding debt securities, notes, credit agreements, credit facilities or other agreements, documents or instruments evidencing Indebtedness of any Credit Party or any of their Subsidiaries or by which any Credit Party or any of their Subsidiaries is or may become bound other than Permitted Indebtedness; (iv) there are no financing statements securing obligations in any material amounts, either singly or in the aggregate, filed in connection with any Credit Party or any of their Subsidiaries; (v) there are no agreements or arrangements under which any Credit Party or any of their Subsidiaries is obligated to register the sale of any of its securities under the 1933 Act; (vi) there are no outstanding securities or instruments of any Credit Party or any of their Subsidiaries which contain any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by which any Credit Party or any of their Subsidiaries is or may become bound to redeem a security of any Credit Party or any of their Subsidiaries; (vii) there are no securities or instruments containing anti-dilution or similar provisions that will be triggered by the closing of the transactions contemplated by this Agreement or the issuance of the Notes; (viii) none of any Credit Party or any of their Subsidiaries has any stock appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement and (ix) none of any Credit Party or any of their Subsidiaries has any liabilities or obligations required to be disclosed in its financial statements (including the footnotes thereto) that are not so disclosed. Prior to the Closing, the Borrower has provided to the Lenders true, correct and complete copies of (i) its certificate of incorporation as in effect on the Closing Date, and (ii) its memorandum and articles of association as in effect on the Closing Date. Schedule 7.7 identifies all outstanding securities convertible into, or exercisable or exchangeable for, shares of Capital Stock or other Equity Interests in any Credit Party or any of their Subsidiaries and the material rights of the holders thereof in respect thereto.
Section 7.8    Indebtedness and Other Contracts    Except as disclosed on Schedule 7.8, none of any Credit Party or any of their Subsidiaries (i) has any outstanding Indebtedness other than Permitted Indebtedness, (ii) is a party to any contract, agreement or instrument, the violation of which, or default under which, by the other party(ies) to such contract, agreement or instrument could reasonably be expected to result in a Material Adverse Effect, or (iii) is in violation of any term of or in default under any contract, agreement or instrument relating to any Indebtedness or any contract, agreement or instrument entered into in connection therewith that
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could reasonably be expected to result in, either individually or in the aggregate, a Material Adverse Effect.
Section 7.9    Off Balance Sheet Arrangements.    There is no transaction, arrangement, or other relationship between any Credit Party or any of their Subsidiaries and an unconsolidated or other off balance sheet entity that would be reasonably likely to have, either individually or in the aggregate, a Material Adverse Effect.
Section 7.10    Ranking of Notes. No Indebtedness of any of the Credit Parties or any of their Subsidiaries will rank senior to or pari passu with the Notes in right of payment or collectability, whether with respect to payment of redemptions, interest, damages or upon liquidation or dissolution or otherwise.
Section 7.11    Title. Each of the Credit Parties and each of their Subsidiaries has (i) good and marketable title to (in the case of fee interests in real property), (ii) valid leasehold interests in (in the case of leasehold interests in real or personal property), (iii) adequate rights in (in the case of licensed interests in Intellectual Property Rights and Intellectual Property Rights that are not wholly owned by a Credit Party or a Subsidiary), and (iv) good and marketable title to (in the case of all other personal property) all of its real property and other properties and assets owned by it which are material to the business of such Credit Party or such Subsidiary, in each case free and clear of all liens, encumbrances and defects, other than Permitted Liens. Any real property and facilities held under lease by any Credit Party or any of their Subsidiaries are held by it under valid and enforceable leases.
Section 7.12    Intellectual Property Rights. Each of the Credit Parties and each of their Subsidiaries owns or possesses adequate rights to use all trademarks, trade names, service marks, service mark registrations, service names, patents, patent rights, copyrights, inventions, trade secrets and other intellectual property rights (“Intellectual Property Rights”) that are necessary and material to conduct its respective business and no Credit Party or Subsidiary has previously granted any Lien on any such Intellectual Property Rights other than Permitted Liens. Except as described on Schedule 7.12, no registered Intellectual Property Rights that are owned by a Credit Party or a Subsidiary have expired or terminated, or are expected to expire or terminate within five (5) years from the Closing Date. Except as described on Schedule 7.12, (i) none of any Credit Party or any of their Subsidiaries has any knowledge of any infringement, misappropriation, dilution or other violation by any Credit Party or any of their Subsidiaries of Intellectual Property Rights owned by other Persons; (ii) none of any Credit Party or any of their Subsidiaries has any knowledge of any infringement, misappropriation, dilution or other violation by any other Persons of the Intellectual Property Rights owned by any Credit Party or any of their Subsidiaries; (iii) there is no claim, action or proceeding pending before any court, judicial body, administrative or regulatory agency, arbitrator or other governmental authority or, to the knowledge of each of the Credit Parties, threatened in writing, against any Credit Party or any of their Subsidiaries contesting or challenging the validity, scope or enforceability of, or a Credit Party’s or Subsidiary’s ownership of or right to use, its owned Intellectual Property Rights or the Intellectual Property Rights it licenses from other Persons; and (iv) none of any Credit Party or any of their Subsidiaries is aware of any facts or circumstances which reasonably could
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be expected to give rise to any of the foregoing infringements or claims, actions or proceedings. Each of the Credit Parties and their Subsidiaries has taken and is taking commercially reasonable security measures to maintain and protect the secrecy, confidentiality and value of the trade secrets and other confidential information it owns.
Section 7.13    Creation, Perfection, and Priority of Liens. The Security Documents are effective to create in favor of the Agent, for the benefit of the Holders and the Lenders, a legal, valid, binding, and (upon the filing of the appropriate UCC financing statements and Intellectual Property Security Agreements, the transfer of possession of original certificated securities together with appropriate transfer instruments and the delivery of deposit account control agreements) enforceable perfected first priority (subject to Permitted Liens) security interest and Lien in the Collateral described therein as security for the Obligations to the extent that a legal, valid, binding, and enforceable security interest and Lien in such Collateral may be created under applicable law including without limitation, the uniform commercial code as in effect in any applicable jurisdiction (“UCC”) and any other applicable governmental agencies.
Section 7.14    Absence of Certain Changes; Insolvency.
(a)    Since December 31, 2019 (the “Diligence Date”), there has been no material adverse change in the business, assets, properties, operations, condition (financial or otherwise), results of operations or prospects of any Credit Party or any of the Credit Parties’ Subsidiaries. Since the Diligence Date, neither any Credit Party nor any of their Subsidiaries has (i) declared or paid any dividends or (ii) sold any assets (other than the sale of Inventory in the ordinary course of business). Except as described on Schedule 7.14, neither any Credit Party nor any of their Subsidiaries has taken any steps to seek protection pursuant to any bankruptcy law nor do any Credit Party or any of their Subsidiaries have any knowledge that its creditors intend to initiate involuntary bankruptcy proceedings or any actual knowledge of any fact which would reasonably lead a creditor to do so. Neither any Credit Party nor any of their Subsidiaries intends to incur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt). Neither the Credit Parties or the Credit Parties and their Subsidiaries taken as a whole are, as of the Closing Date, or after giving effect to the transactions contemplated hereby to occur at the Closing, will be, Insolvent. Without limitation of the foregoing, no corporate action, legal proceeding or other procedure or step in respect of any Insolvency Proceeding or expropriation, attachment, sequestration, distress or execution or any analogous process in any jurisdiction over any asset or assets of a Credit Party has been taken or, to the knowledge of Holdings, threatened in relation to Elevate Credit Parent or any of its Subsidiaries.
Section 7.15    Absence of Proceedings. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, Governmental Authority (including, without limitation, the SEC, self-regulatory organization or other governmental body) (in each case, a “Proceeding”) pending or, to the knowledge of any Credit Party, threatened in writing against or affecting any Credit Party, or any of the Credit Parties’ Subsidiaries or any of their respective officers or directors which (i) could reasonably be expected to result, either individually or in the aggregate, in a Material Adverse Effect, (ii) if adversely determined, could reasonably be
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expected to result, either individually or in the aggregate, in a Material Adverse Effect, or (iii) questions the validity of this Agreement, any of the other Transaction Documents or any of the transactions contemplated hereby or thereby or any action taken or to be taken pursuant hereto or thereto.
Section 7.16    No Undisclosed Events, Liabilities, Developments or Circumstances. No event, liability, development or circumstance has occurred or exists, or is contemplated to occur or may occur with respect to any Credit Party or any of the Credit Parties’ Subsidiaries or their respective business, properties, prospects, operations or financial condition, that would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect. For the purposes of this Section 7.16 only, any gross negligence, willful misconduct or fraud in the conduct of business by any Credit Party or any of their Subsidiaries, as determined by a court of competent jurisdiction in a final, non-appealable judgment or order, shall be presumed to have, or be reasonably expected to have, a Material Adverse Effect.
Section 7.17    No Disagreements with Accountants and Lawyers. There are no disagreements of any kind presently existing, or reasonably anticipated by any Credit Party or any of their Subsidiaries to arise, between any Credit Party or any of their Subsidiaries and the accountants and lawyers formerly or presently employed by Credit Parties and their Subsidiaries which would reasonably be expected to affect the ability of the Credit Parties to perform any of their obligations under any of the Transaction Documents.
Section 7.18    Placement Agent’s Fees. No Credit Party has engaged any placement agent or other agent in connection with the closing of the transactions contemplated by this Agreement or the issuance of the Notes.
Section 7.19    Reserved.
Section 7.20    Tax Status. Each Credit Party and their Subsidiaries (i) have made or filed all foreign, federal, state and local income Tax Returns and all other material Tax Returns, reports and declarations required by any jurisdiction to which they are subject and all such Tax Returns were correct and complete in all respects and were prepared in substantial compliance with all applicable laws and regulations, (ii) have paid all Taxes and other governmental assessments and charges due and owing (whether or not shown on any Tax Return), and (iii) have set aside on their books adequate reserves in accordance with GAAP for the payment of all Taxes due and owing by any Credit Party or its respective Subsidiaries. There are no unpaid Taxes in any material amount claimed to be delinquent by the taxing authority of any jurisdiction (other than those being contested in good faith by appropriate proceedings promptly instituted and diligently conducted and subject to adequate reserves taken by Credit Parties or such Subsidiaries as shall be required in conformity with GAAP), and the officers of each of the Credit Parties and their Subsidiaries know of no basis for any such claim. No claim has ever been made by an authority in a jurisdiction where any Credit Party or any of its Subsidiaries does not file Tax Returns that any Credit Party or any of its Subsidiaries is or may be subject to taxation by that jurisdiction. There are no Liens for Taxes (other than Taxes not yet due and payable) upon any of the assets of the Credit Parties or any of their respective Subsidiaries.
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Section 7.21    Transfer Taxes. On the Closing Date, all transfer or Other Taxes (other than income or similar taxes) which are required to be paid in connection with the issuance of the Notes to each Lender hereunder will be, or will have been, fully paid or provided for by the Credit Parties, and all laws imposing such Taxes will be or will have been complied with.
Section 7.22    Conduct of Business; Compliance with Laws; Regulatory Permits. Neither any Credit Party nor any of their Subsidiaries is in violation of any term of or in default under its certificate or articles of incorporation or bylaws or other governing documents. Neither any Credit Party nor any of their Subsidiaries is in violation of any judgment, decree or order or any law, rule, regulation, statute or ordinance applicable to any Credit Party or any of their Subsidiaries (including, without limitation, all Environmental Laws and the Requirements). Schedule 7.22 (as such Schedule shall be updated from time to time by the Credit Parties by written notice to Agent) sets forth all United States federal and state and applicable foreign regulatory licenses, material consents, authorizations, approvals, orders, licenses, franchises, permits, certificates, accreditations and permits and all other appropriate regulatory authorities necessary to conduct the respective businesses of the Credit Parties and their Subsidiaries, and except as set forth on Schedule 7.22 (as such Schedule shall be updated from time to time by the Credit Parties by written notice to Agent), all of such United States federal and state and applicable foreign regulatory licenses, material consents, authorizations, approvals, orders, licenses, franchises, permits, certificates, accreditations and permits and other appropriate regulatory authorities are valid and in effect and no Credit Party nor any of their Subsidiaries has received any notice of proceedings or entered into formal or informal discussions relating to the revocation or modification of any such United States federal and state and applicable foreign regulatory licenses, consents, authorizations, approvals, orders, licenses, franchises, permits, certificates, accreditations or permits. To the knowledge of each of the Credit Parties, it is not necessary under the laws of its Relevant Jurisdictions:
(a)    in order to enable the Agent, any Lender or any Holder to enforce their respective rights under any Transaction Document; or
(b)    by reason of the execution of any Transaction Document or the performance by it of its obligations under any Transaction Document,
that the Agent, any Lender or any Holder be licensed, qualified or otherwise entitled to carry on business in any of its Relevant Jurisdictions.
None of the Agent, any Lender or any Holder is or will be deemed to be resident, domiciled or carrying on business in its Relevant Jurisdictions solely by reason of the execution, performance and/or enforcement of any Transaction Document.
Section 7.23    Foreign Corrupt Practices. Neither any Credit Party nor any of their Subsidiaries, nor any director, officer, agent, employee or other Person acting on behalf of any Credit Party or any of their Subsidiaries has, in the course of its actions for, or on behalf of, any Credit Party or any of their Subsidiaries (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expenses relating to political activity; (ii) made any direct or indirect unlawful payment to any foreign or domestic government official
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or employee from corporate funds; (iii) violated or is in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended; or (iv) made any unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful payment to any foreign or domestic government official or employee.
Section 7.24    Reserved.
Section 7.25    Environmental Laws. Each Credit Party and their Subsidiaries (a) (i) is in compliance with any and all Environmental Laws, (ii) has received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses, (iii) is in compliance with all terms and conditions of any such permit, license or approval, and (iv) has no outstanding Liability under any Environmental Laws and are not aware of any facts that could reasonably result in Liability under any Environmental Laws, in each of the foregoing clauses of this clause (a), except to the extent, either individually or in the aggregate, a Material Adverse Effect could not reasonably be expected to occur, and (b) have provided Agent and Lenders with copies of all environmental reports, assessments and other documents in any way related to any actual or potential Liability under any Environmental Laws.
Section 7.26    Margin Stock. Neither any Credit Party nor any of their Subsidiaries is engaged in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulation U of the Board of Governors of the Federal Reserve System), and no part of the proceeds from any Note will be used (a) to directly purchase or carry any margin stock, (b) to the knowledge of the Credit Parties, without inquiry, to extend credit to others for the purpose of purchasing or carrying any margin stock, or (c) for any purpose that violates the provisions of Regulation T, U or X of the Board of Governors of the Federal Reserve System.
Section 7.27    ERISA. Except as set forth on Schedule 7.27, neither any Credit Party nor any ERISA Affiliate (a) maintains or has maintained any Pension Plan, (b) contributes or has contributed to any Multiemployer Plan or (c) provides or has provided post-retirement medical or insurance benefits with respect to employees or former employees (other than benefits required under Section 601 of ERISA, Section 4980B of the Code or applicable federal or state law). Except as set forth on Schedule 7.27, neither any Credit Party nor any ERISA Affiliate has received any notice or has any knowledge to the effect that it is not in material compliance with any of the requirements of ERISA, the Code or applicable federal or state law with respect to any Employee Benefit Plan. No ERISA Event exists. Each Employee Benefit Plan which is intended to qualify under the Code has received a favorable determination letter (or opinion letter in the case of a prototype Employee Benefit Plan) to the effect that such Employee Benefit Plan is so qualified and to Credit Parties’ knowledge, there exists no reasonable basis for the revocation of such determination or opinion letter. Neither any Credit Party nor any ERISA Affiliate has (i) any unpaid minimum required contributions under any Plan, whether or not waived, (ii) any liability under Section 4201 or 4243 of ERISA for any withdrawal, or partial withdrawal, from any Multiemployer Plan, (iii) a Pension Plan that is “at risk” within the meaning of Section 430 of the Code, (iv) received notice from any Multiemployer Plan that it is either in endangered or critical status within the meaning of Section 432 of the Code or (v) any
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material liability or knowledge of any facts or circumstances which reasonably might be expected to result in any material liability to the PBGC, the Internal Revenue Service, the Department of Labor or any participant in connection with any Employee Benefit Plan (other than routine claims for benefits under the Employee Benefit Plan).
Section 7.28    Investment Company. Neither any Credit Party nor any of their Subsidiaries is a “registered investment company” or a company “controlled” by a “registered investment company” or a “principal underwriter” of a “registered investment company” as such terms are defined in the Investment Company Act of 1940, as amended.
Section 7.29    U.S. Real Property Holding Corporation. Neither any Credit Party nor any of their Subsidiaries is, nor has it ever been, a U.S. real property holding corporation within the meaning of Section 897 of the Code, as amended, and the Credit Parties will so certify upon the request of Agent.
Section 7.30    Internal Accounting and Disclosure Controls. The Credit Parties and their Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset and liability accountability, (iii) access to assets or incurrence of liabilities is permitted only in accordance with management’s general or specific authorization and (iv) the recorded accountability for assets and liabilities is compared with the existing assets and liabilities at reasonable intervals and appropriate action is taken with respect to any difference. During the twelve (12) months immediately prior to the Closing Date, neither any Credit Party nor any of their Subsidiaries has received any written notice or correspondence from any accountant relating to any potential material weakness in any part of the system of internal accounting controls of any Credit Party or any of their Subsidiaries.
Section 7.31    Reserved.
Section 7.32    Transactions With Affiliates. Except (i) as set forth on Schedule 7.32 and (ii) for transactions that have been entered into on terms no less favorable to the Credit Parties and their Subsidiaries than those that might be obtained at the time from a Person who is not an officer, director or employee, none of the officers, directors or employees of any Credit Party or any of their Subsidiaries is presently a party to any transaction with any Credit Party or any of their Subsidiaries (other than for ordinary course services as employees, officers or directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any such officer, director or employee or, to the knowledge of the Credit Parties, any corporation, partnership, trust or other entity in which any such officer, director, or employee has a substantial interest or is an officer, director, trustee or partner.
Section 7.33    Acknowledgment Regarding Holders’ Purchase of Notes. Each of the Credit Parties acknowledges and agrees that each Holder is acting solely in the capacity of an arm’s length lender with respect to the Transaction Documents and the transactions contemplated
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hereby and thereby and that no Holder is (i) an officer or director of any Credit Party or any of their Subsidiaries, or (ii) an Affiliate of any Credit Party or any of their Subsidiaries. Each of the Credit Parties further acknowledges that no Holder is acting as a financial advisor or fiduciary of any Credit Party or any of their Subsidiaries (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated hereby and thereby, and any advice given by a Holder or any of their representatives or agents, including, without limitation, the Agent, in connection with the Transaction Documents and the transactions contemplated hereby and thereby is merely incidental to such Holder’s receipt of the Notes. Each of the Credit Parties further represents to each Holder that each Credit Party’s decision to enter into the Transaction Documents to which it is a party have been based solely on the independent evaluation by such Person and its respective representatives.
Section 7.34    Reserved.
Section 7.35    Insurance. Credit Parties and their Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which Credit Parties and their Subsidiaries are engaged. Neither any Credit Party nor any of their Subsidiaries believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse Effect.
Section 7.36    Full Disclosure. None of the representations or warranties made by any Credit Party or any of their Subsidiaries in the Transaction Documents as of the date such representations and warranties are made or deemed made, and none of the statements contained in each exhibit, report, statement or certificate furnished by or on behalf of any Credit Party or any of their Subsidiaries in connection with the Transaction Documents, contains any untrue statement of a material fact or omits any material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances under which they are made, not misleading as of the time when made or delivered.
Section 7.37    Employee Relations. Neither any Credit Party nor any of their Subsidiaries is a party to any collective bargaining agreement or employs any member of a union in such person’s capacity as a union member or to perform union labor work. Each of the Credit Parties believes that its relations with its employees are good. As of the Closing Date, no executive officer of any Credit Party or any of their Subsidiaries has notified such Credit Party or such Subsidiary that such officer intends to leave such Credit Party or such Subsidiary or otherwise terminate such officer’s employment with such Credit Party or such Subsidiary. As of the Closing Date, no executive officer of any Credit Party or any of their Subsidiaries, to the knowledge of the Credit Parties, is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement, noncompetition agreement, or any other contract or agreement or any restrictive covenant. Each Credit Party and their Subsidiaries are in compliance with all federal, state, local and foreign laws and regulations respecting labor, employment and employment practices and benefits, terms and conditions of employment and wages and hours, except where failure to be in
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compliance would not, either individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.
Section 7.38    Certain Other Representations and Warranties. Each Consumer Loan Agreement is a valid and subsisting agreement and is in full force and effect in accordance with the terms thereof, no default or event of default exists under any such Consumer Loan Agreement and no party to any such Consumer Loan Agreement has any accrued right to terminate any such Consumer Loan Agreement on account of a default by any Person or otherwise, except in each case, where the same would not, either individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.
Section 7.39    Patriot Act. To the extent applicable, the Credit Parties and their Subsidiaries are in compliance, in all material respects, with (i) the Trading with the Enemy Act, as amended, and each of the foreign assets control regulations of the United States Treasury Department and any other enabling legislation or executive order relating thereto, and (ii) the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)).
Section 7.40    Material Contracts. Schedule 7.40 contains a true, correct and complete list of all the Material Contracts (other than those of the type described in clause (a) of the definition thereof) of the Credit Parties and their Subsidiaries (which Schedule shall be updated by the Credit Parties by written notice to Agent promptly following the execution of any such additional Material Contract following the Closing Date), and all such Material Contracts are in full force and effect and, to Credit Parties’ knowledge, no defaults currently exist thereunder.
Article 8
COVENANTS

Section 8.1    Financial Covenants. The Credit Parties shall, and shall cause their Subsidiaries to, comply with the following financial covenants:
(a)    Loan to Value Ratio. The Credit Parties shall not permit the Loan to Value Ratio calculated as of the last day of any calendar month (commencing with the calendar month of July 2020) to be greater than 0.85.
If as of any applicable testing date the Credit Parties fail to comply with the financial covenant contained in this Section 8.1(a) (a “LTV Covenant Default”), then the Credit Parties shall have the obligation to cure such breach (the “LTV Covenant Cure Obligation”) within thirty (30) days of the occurrence thereof by causing Elevate Credit Parent to contribute to the Borrower cash (in the form of a capital contribution and not in the form of an extension of credit or other Indebtedness) in an aggregate amount that would cause the Credit Parties to be in pro forma compliance with such covenant as of such testing date (such amount, the “LTV Covenant Cure Amount”). Until timely receipt of the LTV Covenant Cure Amount for any applicable LTV Covenant Default, an Event of Default shall be deemed to exist for all purposes of this Agreement and the other Transaction Documents; provided, that during such thirty (30) day cure
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period (unless the Agent shall have been notified that such LTV Covenant Cure Amount shall not be made) neither the Agent nor any Lender or Holder shall exercise any enforcement remedy against the Credit Parties or any of their Subsidiaries or any of their respective properties solely as a result of the existence of the applicable LTV Covenant Default and; provided, further, that upon timely receipt of such LTV Covenant Cure Amount, the underlying LTV Covenant Default shall no longer be deemed to be continuing. Notwithstanding anything to the contrary in this Section 8.1(a), in no event shall the Credit Parties be permitted to cure more than three (3) LTV Covenant Defaults during the term of this Agreement.
(b)    Corporate Cash. The Credit Parties shall not permit Corporate Cash at any time to be less than the greater of (i) $7,500,000 or (ii) in the event that Elevate Credit Parent enters into any share buyback, $10,000,000.
(c)    Total Cash. The Credit Parties shall cause Total Cash as of the last day of each calendar month to be greater than or equal to five percent (5%) of total principal amount of Receivables of Elevate Credit Parent and its Subsidiaries.
(d)    Book Value of Equity. The Credit Parties shall not permit the Book Value of Equity, calculated as of the last day of any calendar month, to be less than $85,000,000, as may be amended or modified by mutual agreement between the parties hereto in good faith; provided that the parties agree that any reductions or discounts required by applicable Current Expected Credit Losses (CECL) standards shall be carved out.
(e)    Past Due Roll Rate. The Credit Parties shall not permit the Trailing Past Due Roll Rate, calculated as of the last day of any calendar month (commencing with the calendar month of July 2020) to be greater than twelve and one-half percent (12.5%).
(f)    Four Month Vintage Charge Off Rate. The Credit Parties shall not permit the Trailing Four Month Charge Off Rate to be greater than nine and one-half percent (9.5%).
(g)    Twelve Month Vintage Charge Off Rate. The Credit Parties shall not permit the Trailing Twelve Month Charge Off Rate to be greater than thirty-six percent (36%).
(h)    Excess Spread. The Credit Parties shall not permit the Trailing Excess Spread to be less than three and one-quarter percent (3.00%).
The defined term “Consumer Loans” as used in Sections 8.1(e) through (h) may be deemed to also include all unsecured consumer loans marked as “Rise SPV, LLC” and/or “EF SPV, Ltd.” on the monthly financial statements provided to Agent pursuant to Section 8.2(a) in the Agent’s sole discretion.
Section 8.2    Deliveries. The Borrower agrees to deliver the following to the Agent via electronic (e-mail) transmission or other written means acceptable to the Agent:
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(a)    Monthly Financial Statements. As soon as available and in any event within twenty-one (21) days after the end of each month (including December), the unaudited consolidated balance sheets of the Credit Parties and their Subsidiaries as at the end of such month and the related consolidated statements of operations, stockholders’ equity and cash flows of Elevate Credit Parent and its Subsidiaries for such month and for the period from the beginning of the then current Fiscal Year to the end of such month, all in reasonable detail, and certified by the chief financial officer of Elevate Credit Parent (or other authorized executive officer performing a similar function) as being true and correct and fairly presenting in accordance with GAAP, the financial position and results of operations of the Elevate Credit Parent and its Subsidiaries subject to normal year-end adjustments and absence of footnote disclosure;
(b)    Annual Financial Statements. As soon as available, and in any event within one hundred twenty (120) days after the end of each Fiscal Year, the audited consolidated balance sheets of Elevate Credit Parent and its Subsidiaries as at the end of such Fiscal Year and the related consolidated statements of operations, stockholders’ equity and cash flows of the Credit Parties and their Subsidiaries for such Fiscal Year, setting forth in each case in comparative form the corresponding figures for the previous Fiscal Year, in reasonable detail and certified by the chief financial officer of Elevate Credit Parent (or other authorized executive officer performing a similar function) as being true and correct and fairly presenting in accordance with GAAP, the financial position and results of operations of Elevate Credit Parent and its Subsidiaries, as applicable, accompanied by a customary unqualified opinion of an independent accounting firm acceptable to Agent;
(c)    Compliance Certificate and Borrowing Base Certificate. On the dates that the financial statements under clause (a) above are delivered, a duly completed Compliance Certificate and a duly completed Borrowing Base Certificate, each with appropriate insertions, dated the date of the applicable monthly financial statements, and signed on behalf of the Borrower by the chief financial officer of the Borrower (or other authorized executive officer performing a similar function), in the case of each Compliance Certificate (i) containing a computation of the covenants set forth in Section 8.1 hereof, (ii) indicating whether or not the Credit Parties are in compliance with each covenant set forth in Article 8 of this Agreement and whether each representation and warranty contained in Article 7 of this Agreement is true and correct in all material respects (without duplication of any materiality qualifiers) as though made on such date (except for representations and warranties that speak as of a specific date, which representations and warranties are true and correct in all material respects (without duplication of any materiality qualifiers as of such date)), and (iii) to the effect that such officer has not become aware of any Event of Default (or event or circumstance that, with the passage of time, the giving of notice, or both, would become an Event of Default) that has occurred and is continuing or, if there is any such Event of Default (or event or circumstance that, with the passage of time, the giving of notice, or both, would become an Event of Default), describing it and the steps, if any, being taken to cure it;
(d)    Monthly Data Tape. On the dates that the financial statements under clause (a) above are delivered, a data tape in a form acceptable to Agent in its sole discretion that
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contains information as to Borrower’s loan portfolio submitted as of the most recent month end. The Credit Parties shall provide a data tape to Agent as of the Closing Date.
(e)    Monthly Reporting Package. On the dates that the financial statements under clause (a) above are delivered, a monthly operations reporting package, in form and detail reasonably acceptable to the Agent.
Section 8.3    Notices. The Borrower agrees to deliver the following to the Agent via electronic (e-mail) transmission or other written means acceptable to the Agent:
(a)    Collateral Information. Upon request of Agent, a certificate of one of the duly authorized officers of the Borrower (i) either confirming that there has been no change in the information set forth in the perfection certificate executed and delivered to the Agent on the Closing Date since such date or the date of the most recent certificate delivered pursuant to this Section and/or identifying such changes, and (ii) certifying that all UCC financing statements (including fixtures filings, as applicable) and other appropriate filings, recordings and registrations have been filed of record in each governmental, municipal and other appropriate office in each jurisdiction identified pursuant to clause (i) above (or in such certificate) to the extent necessary to effect, protect and perfect the security interests under the Security Documents for a period of not less than 18 months after the date of such certificate (except as noted therein with respect to any continuation statements to be filed within such period);
(b)    Auditor Reports. Promptly upon receipt thereof, copies of any reports submitted by the Credit Parties’ independent public accountants, if any, in connection with each annual, interim or special audit or review of any type of the financial statements or internal control systems of any Credit Party or any of their Subsidiaries made by such accountants, including any comment letters submitted by such accountants to management of any Credit Party or any of their Subsidiaries in connection with their services;
(c)    Notice of Default. Promptly upon any officer of a Credit Party obtaining knowledge (i) of any condition or event that constitutes an Event of Default (or event or circumstance that, with the passage of time, the giving of notice, or both, would become an Event of Default) or that notice has been given to a Credit Party with respect thereto; (ii) that any Person has given any notice to the Credit Party or taken any other action with respect to any event or condition set forth in Article 10; or (iii) of the occurrence of any event or change that has caused or evidences, either in any case or in the aggregate, a Material Adverse Effect, a certificate of its chief executive officer or chief financial officer (or other authorized executive officer performing a similar function) specifying the nature and period of existence of such condition, event or change, or specifying the notice given and action taken by any such Person and the nature of such claimed Event of Default, default, event or condition, and the action(s) the Credit Parties have taken, are taking and propose to take with respect thereto;
(d)    Notice of Litigation. Promptly upon any officer of a Credit Party obtaining knowledge of (i) the institution of, or nonfrivolous threat of, any adverse Proceeding against or affecting any Credit Party, or any of the Credit Parties’ Subsidiaries or any of their respective officers or directors not previously disclosed in writing by the Credit Parties to the
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Agent, or (ii) any material development in any adverse Proceeding against or affecting any Credit Party, or any of the Credit Parties’ Subsidiaries or any of their respective officers or directors that, in the case of either clause (i) or (ii) if adversely determined, could be reasonably expected to have a Material Adverse Effect, or seeks to enjoin or otherwise prevent the consummation of, or to recover any damages or obtain relief as a result of, the transactions contemplated hereby, written notice thereof together with such other information as may be reasonably available to the Credit Parties to enable the Agent, the Lenders and the Holders and their counsel to evaluate such matters (it being agreed and understood that as of the Closing Date the Credit Parties have timely complied with their notice obligations, if any, under this clause (d) with respect to the Proceedings described on Schedule 8.3(d));
(e)    ERISA. (i) Promptly upon becoming aware of the occurrence of or forthcoming occurrence of any ERISA Event, a written notice specifying the nature thereof, the action(s) any Credit Party or any of their Subsidiaries or any of their respective ERISA Affiliates has taken, is taking or proposes to take with respect thereto and, when known, any action taken or threatened by the Internal Revenue Service, the Department of Labor or the PBGC with respect thereto; and (ii) with reasonable promptness, copies of (1) each Schedule B (Actuarial Information) to the annual report (Form 5500 Series) filed by any Credit Party, any of their Subsidiaries or any of their respective ERISA Affiliates with the Internal Revenue Service with respect to each Pension Plan; (2) all notices received by the Credit Party, any of its Subsidiaries or any of their respective ERISA Affiliates from a Multiemployer Plan sponsor concerning an ERISA Event; and (3) copies of such other documents or governmental reports or filings relating to any Employee Benefit Plan as the Agent shall reasonably request;
(f)    Insurance Report. Promptly upon request of the Agent, a report by the Credit Parties’ insurance broker(s) in form and substance satisfactory to the Agent outlining all material insurance coverage maintained as of the date of such report by the Credit Parties;
(g)    Environmental Reports and Audits. As soon as practicable following receipt thereof, copies of all environmental audits and reports with respect to environmental matters at any facility or property used by any Credit Party or any of their Subsidiaries or which relate to any environmental liabilities of any Credit Party or any of their Subsidiaries which, in any such case, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect;
(h)    Corporate Information. Fifteen (15) days’ prior written notice of any change (i) in any Credit Parties’ corporate name, (ii) in any Credit Parties’ identity or organizational structure, (iii) in any Credit Parties’ jurisdiction of organization, or (iv) in any Credit Parties’ Federal Taxpayer Identification Number or state organizational identification number. The Credit Parties agree not to effect or permit any change referred to in the preceding sentence unless all filings have been made under the UCC or otherwise and all other actions that are required in order for the Agent to continue at all times following such change to have a valid, legal and perfected security interest in all the Collateral as contemplated in the Security Agreement, the Security Documents and other Transaction Documents; provided, the foregoing notwithstanding any of the Elevate Credit Subsidiaries (other than the Borrower) may suspend its
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operations in any jurisdiction in which it operates and dissolve as a result of a decision by the Credit Parties to exit one or more markets from time to time;
(i)    Tax Returns. Within ten (10) days following request by the Agent, copies of each federal income tax return filed by or on behalf of Credit Parties and requested by the Agent;
(j)    Event of Loss. Promptly (and in any event within three (3) Business Days) notice of any claim with respect to any liability against any Credit Party or any of their Subsidiaries that (i) is in excess of $250,000 or (ii) could reasonably be expected to result in a Material Adverse Effect.
(k)    Program and Consumer Loan Portfolio Reporting. (i) No later than the fifth (5th) Business Day after the end of each calendar week, a performance report of the Program as of the end of business on Friday of such calendar week, in form and substance reasonably acceptable to the Agent and (ii) together with the delivery of the financial statements and reports pursuant to subsections 8.2(a) and (b), a summary report with respect to the Consumer Loan portfolio of the Credit Parties containing such information as may be reasonably requested by Agent.
(l)    Other Information. Promptly upon their becoming available, deliver copies of (i) all financial statements, reports, notices and proxy statements sent or made available generally by any Credit Party to its security holders acting in such capacity or by any of their Subsidiaries to their security holders other than another Credit Party or another Subsidiary, (ii) all regular and periodic reports and all registration statements and prospectuses, if any, filed by any Credit Party or any of their Subsidiaries with any securities exchange or with the SEC or any governmental or private regulatory authority, (iii) all press releases and other statements made available generally by any Credit Party or any of their Subsidiaries to the public concerning material developments in the business of any Credit Party or any of their Subsidiaries, (iv) subject to limitations imposed by applicable law, all documents and information furnished to Governmental Authorities in connection with any investigation of any Credit Party or any of their Subsidiaries (other than any routine inquiry), (v) all notices received or provided by any Credit Party relating to or in connection with the Participation Agreement, and (vi) such other information and data with respect to any Credit Party or any of their Subsidiaries as from time to time may be reasonably requested by the Agent.
Section 8.4    Rank. All Indebtedness due under the Notes shall be senior in right of payment, whether with respect to payment of redemptions, interest, damages or upon liquidation or dissolution or otherwise, to all other current and future Indebtedness of the Credit Parties and their Subsidiaries.
Section 8.5    Incurrence of Indebtedness. No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to, directly or indirectly, create, incur or guarantee, assume, or suffer to exist any Indebtedness or engage in any sale and leaseback, synthetic lease or similar transaction, other than (i) the Obligations and (ii) Permitted Indebtedness.
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Section 8.6    Existence of Liens. No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to, directly or indirectly, allow or suffer to exist any Liens, other than Permitted Liens.
Section 8.7    Restricted Payments. No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to, directly or indirectly,
(a)    declare or pay any dividend or make any other payment or distribution (or interest on any unpaid dividend, charge, fee or other distribution) (whether in cash or in kind) on account of any Credit Party’s or any of their Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation involving any Credit Party or any of their Subsidiaries) or to the direct or indirect holders of any Credit Party’s or any of their Subsidiaries’ Equity Interests in their capacity as such, except that:
(i)    the Credit Parties may pay dividends (A) solely in common stock and (B) with the prior written consent of the Agent (not to be unreasonably withheld, conditioned or delayed) in cash to the holders of their common Equity Interests; provided, that with respect to this clause (B), no Event of Default (or event or circumstance that, with the passage of time, the giving of notice, or both, would become an Event of Default) has occurred and is continuing or would arise as a result of such payment;
(ii)    the Borrower may make monthly distributions of funds to Elevate Credit Parent commencing on the fifth (5th) Business Day after the financial statements under Section 8.2(a) shall have been delivered for the applicable month; provided, that each of the following conditions are satisfied:
(A)    no Event of Default (or event or circumstance that, with the passage of time, the giving of notice, or both, would become an Event of Default) has occurred and is continuing or would arise as a result of such payment; and
(B)    after giving effect to such payment, (1) the Credit Parties are in pro forma compliance with the covenant set forth in Section 8.1(a) and (2) the Debt-to-Equity Ratio of the Borrower shall not be more than 9-to-1; and
(iii)    the Elevate Credit Subsidiaries may make distributions or remit payments received on account of the undivided portion of the Consumer Loans to further the purposes of, and in compliance with, the Transaction Documents.
(b)    repurchase, redeem, repay, defease, retire, distribute any dividend or share premium reserve or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation involving any Credit Party or any of their Subsidiaries) any Equity Interests of any Credit Party or any of their Subsidiaries or any direct or indirect parent of any Credit Party or any of their Subsidiaries except in connection with the termination of an employee’s employment with any Credit Party; provided, that each of the following conditions are satisfied:
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(i)    no Event of Default (or event or circumstance that, with the passage of time, the giving of notice, or both, would become an Event of Default) has occurred and is continuing or would arise as a result of such repurchase, redemption, repayment, defeasance, retirement, distribution, acquisition or retirement for value of any such Equity Interests;
(ii)    after giving effect to such repurchase, redemption, repayment, defeasance, retirement, distribution, acquisition or retirement for value of any such Equity Interests, (A) the Credit Parties are in pro forma compliance with the covenants set forth in Section 8.1 and (B) the Debt-to-Equity Ratio of the Borrower shall not be more than 9-to-1; and
(iii)    except for any share buyback program, the aggregate amount of all such repurchases, redemptions, repayments, defeasances, retirements, distributions, acquisitions or retirements for value of any such Equity Interests shall not exceed $1,000,000 in any Fiscal Year;
(c)    make any payment (including by setoff) on or with respect to, accelerate the maturity of, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness of any Credit Party or any of their Subsidiaries (or set aside or escrow any funds for any such purpose), except for (i) payments of principal, interest and other amounts constituting Obligations and (ii) subject to the terms of applicable subordination terms, if any, regularly scheduled non accelerated payments of principal, interest and other amounts under Permitted Indebtedness; or
(d)    pay any management, consulting or similar fees to any Affiliate of any Credit Party or to any officer, director or employee of any Credit Party or any Affiliate of any Credit Party, except for the avoidance of doubt, payments of salaries, advances, bonuses (including pre-funded bonuses) or stock incentives of employees of the Credit Parties in the ordinary course of business.
Section 8.8    Mergers; Acquisitions; Asset Sales. No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to, directly or indirectly, without Agent’s prior written consent, (a) be a party to any merger or consolidation, or Acquisition or (b) consummate any Asset Sale other than a Permitted Disposition. For the avoidance of doubt, notwithstanding anything to the contrary contained herein or in any other Transaction Document to the contrary, (i) no Credit Party shall enter into (or agree to enter into) any Division/Series Transaction, or permit any of its Subsidiaries to enter into (or agree to enter into), any Division/Series Transaction and (ii) none of the provisions in this Agreement or any other Transaction Document shall be deemed to permit any Division/Series Transaction without the prior written consent of the Agent.
Section 8.9    No Further Negative Pledges. No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to, enter into, assume or become subject to any agreement prohibiting or otherwise restricting the existence of any Lien upon any of their properties or assets in favor of Agent or the Holders as set forth under the Transaction Documents, whether now owned or hereafter acquired, or requiring the grant of any security for any obligation if such
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property or asset is given as security under the Transaction Documents, except in connection with any Permitted Liens or any document or instrument governing any Permitted Liens, provided that any such restriction contained therein relates only to the property or asset subject to such Permitted Liens (or proceeds thereof).
Section 8.10    Affiliate Transactions. No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to, directly or indirectly, enter into or permit to exist any transaction (including the purchase, sale, lease or exchange of any property or the rendering of any service) with any Affiliate of any Credit Party or any of their Subsidiaries, unless such transaction is on terms that are no less favorable to such Credit Party or such Subsidiary, as the case may be, than those that might be obtained at the time from a Person who is not an Affiliate and, unless the same shall not require payments thereunder in an amount exceeding $500,000 in the aggregate, are fully disclosed in writing to Agent prior to consummation thereof.
Section 8.11    Insurance.
(a)    The Credit Parties shall keep the Collateral properly housed and insured against loss or damage by fire, theft, explosion, sprinklers, collision (in the case of motor vehicles) and such other risks as are customarily insured against by Persons engaged in businesses similar to that of the Credit Parties, with such companies, in such amounts, with such deductibles and under policies in such form as shall be reasonably satisfactory to the Agent. Certificates of insurance or, if requested by the Agent, original (or certified) copies of such policies of insurance have been or shall be, no later than the Closing Date, delivered to the Agent, and shall contain an endorsement, in form and substance reasonably acceptable to Agent, showing loss under such insurance policies payable to the Agent, for the benefit of the Holders. Such endorsement, or an independent instrument furnished to the Agent, shall provide that the insurance company shall give the Agent at least thirty (30) days’ written notice before any such policy of insurance is altered or canceled and that no act, whether willful or negligent, or default of a Credit Party or any other Person shall affect the right of the Agent to recover under such policy of insurance in case of loss or damage. Each Credit Party hereby directs all insurers under all policies of insurance to pay all proceeds payable thereunder directly to the Agent. Each Credit Party irrevocably makes, constitutes and appoints the Agent (and all officers, employees or agents designated by the Agent) as such Person’s true and lawful attorney (and agent-in-fact) for the purpose of making, settling and adjusting claims under such policies of insurance, endorsing the name of such Person on any check, draft, instrument or other item of payment for the proceeds of such policies of insurance and making all determinations and decisions with respect to such policies of insurance, provided however, that if no Event of Default shall have occurred and be continuing, such Credit Party may make, settle and adjust claims involving less than $100,000 in the aggregate without the Agent’s consent.
(b)    The Credit Parties shall maintain, at their expense, such public liability and third-party property damage insurance as is customary for Persons engaged in businesses similar to that of the Credit Parties with such companies and in such amounts with such deductibles and under policies in such form as shall be reasonably satisfactory to the Agent in light of such customs and certificates of insurance or, if requested by the Agent, original (or
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certified) copies of such policies have been or shall be, no later than the Closing Date, delivered to the Agent; each such policy shall contain an endorsement showing the Agent as additional insured thereunder and providing that the insurance company shall give the Agent at least thirty (30) days’ written notice before any such policy shall be altered or canceled.
(c)    If any Credit Party at any time or times hereafter shall fail to obtain or maintain any of the policies of insurance required above or to pay any premium relating thereto, then the Agent, without waiving or releasing any obligation or default by the Credit Parties hereunder, may (but shall be under no obligation to) obtain and maintain such policies of insurance and pay such premiums and take such other actions with respect thereto as the Agent reasonably deems advisable. Such insurance, if obtained by the Agent, may, but need not, protect each Credit Parties’ interests or pay any claim made by or against any Credit Party with respect to the Collateral. Such insurance may be more expensive than the cost of insurance the Credit Parties may be able to obtain on their own and may be cancelled only upon the Credit Parties providing evidence that they have obtained the insurance as required above. All sums disbursed by the Agent in connection with any such actions, including, without limitation, court costs, expenses, other charges relating thereto and reasonable attorneys’ fees, shall constitute part of the Obligations due and owing hereunder, shall be payable on demand by the Credit Parties to the Agent and, until paid, shall bear interest at the Default Rate.
Section 8.12    Corporate Existence and Maintenance of Properties. Each Credit Party shall, and each Credit Party shall cause each of its Subsidiaries to, maintain and preserve (a) its existence and good standing in the jurisdiction of its organization or incorporation and (b) its qualification to do business and good standing in each jurisdiction where the nature of its business makes such qualification necessary (other than such jurisdictions in which the failure to be so qualified or in good standing could not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect). Each Credit Party shall, and each Credit Party shall cause each of its Subsidiaries to, maintain or cause to be maintained in good repair, working order and condition, ordinary wear and tear excepted, all material properties used or useful in the business of the Credit Parties and their Subsidiaries and from time to time will make or cause to be made all appropriate repairs, renewals and replacements thereof.
Section 8.13    Non-circumvention. Each Credit Party hereby covenants and agrees that neither any of the Credit Parties nor any of their Subsidiaries will, by amendment of its certificate of incorporation, certificate of formation, limited liability company agreement, bylaws, or other governing documents, or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Agreement or the other Transaction Documents, and will at all times in good faith carry out all of the provisions of this Agreement and the other Transaction Documents and take all reasonable action as may be required to protect the rights of the Agent, the Lenders and the Holders.
Section 8.14    Change in Business; Change in Accounting; Elevate Credit. The Credit Parties shall not engage in any line of business other than the businesses engaged in on the
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Closing Date and activities reasonably incident thereto. The Credit Parties shall not (a) make any significant change in accounting treatment or reporting practices, except as required by GAAP, (b) change their Fiscal Year; method for determining fiscal quarters of any Credit Party or of any Subsidiary of any Credit Party, (c) change their name as it appears in official filings in its jurisdiction of organization or (d) change their jurisdiction of organization, in the case of clauses (c) and (d), without providing written notice to Agent no later than thirty (30) days following the occurrence of any such change. Elevate Credit Parent shall not trade, carry on any business, own any assets or incur any liabilities except for:
(a)    the provision of administrative services (excluding treasury services) to its Subsidiaries of a type customarily provided by a holding company to its Subsidiaries;
(b)    ownership of shares in its Subsidiaries, intra-company debit balances, intra-company credit balances and other credit balances in bank accounts, cash and Cash Equivalent Investments but only if those shares, credit balances, cash and Cash Equivalent Investments constitute Collateral; and
(c)    any liabilities under the Transaction Documents to which it is a party and professional fees and administration costs in the ordinary course of business as a holding company.
Section 8.15    U.S. Real Property Holding Corporation. None of the Credit Parties shall become a U.S. real property holding corporation or permit or cause its shares to be U.S. real property interests, within the meaning of Section 897 of the Code.
Section 8.16    Compliance with Laws. No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to, fail to (a) comply in all material respects with the requirements of all applicable laws, rules, regulations and orders of any Governmental Authority (including, without limitation, all Environmental Laws and the Requirements) and (b) preserve and maintain in full force and effect all material rights, privileges, qualifications, permits, licenses and franchises necessary in the normal conduct of its business. Each Holder is deemed to agree and represent that the Issuer (or its agents or representatives including the Agent) may (1) provide such information and documentation and any other information concerning its investment in such Notes to the Cayman Islands Tax Information Authority, the U.S. Internal Revenue Service and any other relevant tax authority, in each case to the extent required by applicable law, and (2) take such other steps as the deem necessary or helpful to comply with FATCA.
Section 8.17    Additional Collateral. With respect to any Property acquired after the Closing Date by any Credit Party as to which the Agent, for the benefit of the Holders does not have a perfected Lien, such Credit Party shall promptly (i) execute and deliver to the Agent, for the benefit of the Holders or its agent such amendments to the Security Documents or such other documents as the Agent, for the benefit of the Holders deems necessary or advisable to grant to the Agent, for the benefit of the Holders, a security interest in such Property and (ii) take all other actions necessary or advisable to grant to the Agent, for the benefit of the Holders, a perfected first priority (subject to Permitted Liens) security interest in such Property, including, without limitation, the filing of UCC financing statements in such jurisdictions as may be
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required by the Security Documents or by law or as may be requested by the Agent. If at any time during the existence of an Event of Default, Agent seeks to collect or liquidate Collateral, the Credit Parties will use their best efforts to assist Agent in any such efforts, including effectuating a sale of such Collateral.
Section 8.18    Audit Rights; Field Exams; Appraisals; Meetings; Books and Records.
(a)    The Credit Parties shall, upon reasonable notice and during reasonable business hours (except during the continuance of an Event of Default when no such limitations shall apply), subject to reasonable safety and security procedures, and at the Credit Parties’ sole cost and expense, permit the Agent and each Holder (or any of their respective designated representatives) to visit and inspect any of the properties of any Credit Party or any of their Subsidiaries, to examine the books of account of any Credit Party or any of their Subsidiaries (and to make copies thereof and extracts therefrom), and to discuss the affairs, finances and accounts of the Credit Parties and their Subsidiaries, and to be advised as to the same by their respective officers, and to conduct examinations and verifications (whether by internal commercial finance examiners or independent auditors), all at such reasonable times and intervals as the Agent and the Holders may reasonably request. In addition to the foregoing, Agent shall have the right, at the joint and several expense of the Credit Parties, to conduct a legal and/or regulatory review regarding the compliance of any Credit Parties, as well as the form of Consumer Loan Agreement (and any other agreements, certificates, instruments and documents related thereto), with all applicable laws, and any Credit Party shall cooperate with Agent and its internal and/or outside legal counsel or other third party advisors in such review. Except during the continuance of an Event of Default, the Credit Parties shall not exercise any of their rights pursuant to this Section 8.18(a) more than once per calendar year.
(b)    The Credit Parties shall, upon reasonable notice and during reasonable business hours, subject to reasonable safety and security procedures, and at the Credit Parties’ sole cost and expense, permit the Agent (or any of its designated representatives) and each Holder to conduct field exams of the Collateral, all at such reasonable times and intervals as the Agent may reasonably request. Except during the continuance of an Event of Default, the Credit Parties shall not exercise any of their rights pursuant to this Section 8.18(b) more than once per calendar year.
(c)    The Credit Parties shall, at Agent’s request (which shall be made no more frequently than once during each calendar year unless an Event of Default shall have occurred and be continuing) and upon reasonable notice, and at the Credit Parties’ sole cost and expense, obtain an appraisal of the Collateral from an independent appraisal firm reasonably satisfactory to Agent.
(d)    The Credit Parties will, upon the request of the Agent, participate in a meeting of the Agent and the Holders twice during each Fiscal Year to be held at the Credit Parties’ corporate offices (or at such other location as may be agreed to by the Borrower and the Agent) at such time as may be agreed to by the Borrower and the Agent.
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(e)    The Credit Parties shall, at the Credit Parties’ sole cost and expense, make all books and records of the Credit Parties available for review electronically by the Agent upon Agent’s request and subject to applicable Requirements with respect to disclosure of Customer Information.
Section 8.19    Additional Issuances of Debt Securities; Right of First Refusal on New Indebtedness. So long as any Notes are outstanding, none of the Credit Parties nor any of their Subsidiaries shall, directly or indirectly, offer, sell, grant any option to purchase, or otherwise dispose of (or announce any offer, sale, grant or any option to purchase or other disposition of) any of its debt securities or Equity Interests (including any preferred stock or other instrument or security) that may, in accordance with the terms thereof, be, at any time during its life, and under any circumstance, convertible into or exchangeable or exercisable for Indebtedness or debt securities, but excluding Permitted Indebtedness, without the prior written consent of the Agent; provided, that, if any Credit Party seeks to incur additional Indebtedness from time to time from any third-party, then in each such case, the Agent and its designees shall have a right of first refusal (but not an obligation) to provide such additional Indebtedness on the same terms and conditions as would be provided by such third-parties. The Borrower will give Agent written notice (a “ROFR Notice”) describing the additional Indebtedness and the terms and conditions thereof (collectively, the “New Indebtedness Opportunity”). The Agent and its designees shall have thirty (30) days from the date of the Agent’s receipt of a ROFR Notice to agree to provide such additional Indebtedness pursuant to the New Indebtedness Opportunity. If the Agent fails to exercise such right of first refusal within said thirty (30)-day period with respect to the New Indebtedness Opportunity, then the New Indebtedness Opportunity may be offered to such third-party upon the identical terms and conditions as are specified in the applicable ROFR Notice; provided, that in the event the New Indebtedness Opportunity has not been consummated by the applicable third-party within the one hundred (100)-day period from the date of the ROFR Notice, no New Indebtedness Opportunity may be offered by the Credit Parties to any third-party without first offering such New Indebtedness Opportunity to the Agent in the manner provided above.
Section 8.20    Post-Closing Obligations.
(a)    The Credit Parties shall, (i) in a manner satisfactory to the Agent, cooperate with and assist the Agent, the Lenders and their respective attorneys, officers, employees, representatives, consultants and agents (collectively, the “Reviewing Parties” and each, a “Reviewing Party”) in connection with any Reviewing Party’s regulatory review and due diligence of the Credit Parties’ lending program for the solicitation, marketing, documentation, origination and servicing of Consumer Loans in each state in which any Credit Party originates Consumer Loans, (ii) review and consider in good faith any issues raised by, or comments, recommendations or guidance from, any Reviewing Party with respect to any such lending program (such issues, comments, recommendations and guidance, collectively, the “Diligence Issues”) and (iii) within 90 days (or such longer period as may be agreed to by the Agent in its sole discretion) of any Credit Party’s receipt of written notice of any Diligence Issues from a Reviewing Party, resolve or address any such Diligence Issues, in each case, in a manner satisfactory to the Agent.
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(b)    The Credit Parties shall deliver, or cause to be delivered to the Agent, within sixty (60) days after the Closing Date (or such later date as shall be acceptable to the Agent in its sole discretion), deposit account control agreements executed by the applicable Credit Party and each depository institution for which such Credit Party maintains deposit and other accounts, each in form and substance reasonably satisfactory to the Agent in its sole discretion, covering all deposit accounts and other accounts maintained at such depository institution.
Section 8.21    Use of Proceeds. The Borrower will use the proceeds from the sale of each Note solely (i) to purchase participation interests in any Eligible Consumer Loans, (ii) to fund certain fees and expenses associated with the consummation of the transactions contemplated by this Agreement, and (iii) subject to excess availability under this facility, to transfer funds as permitted under this Agreement.
Section 8.22    Fees, Costs and Expenses. The Credit Parties, on behalf of themselves and the other Credit Parties, shall jointly and severally reimburse the Lenders and the Holders or their designee(s) and applicable legal counsel for reasonable and documented costs and expenses incurred in connection with the transactions contemplated by the Transaction Documents (including reasonable legal fees and disbursements in connection therewith, documentation and implementation of the transactions contemplated by the Transaction Documents and due diligence in connection therewith and ongoing fees and expenses of the Borrower), subject to the limitations set forth in Section 13.1 hereof, which amounts shall be paid by the Credit Parties to the Agent, for the benefit of itself and the Lenders and the Holders, on the Closing Date. After the Closing Date, the Guarantors agree to pay the ongoing fees, Taxes (if any) and expenses of the Borrower. In addition, the Credit Parties shall, within five (5) Business Days of receiving a request from the Agent therefor, reimburse the Agent for any additional reasonable legal fees incurred post-closing in connection with perfecting the Agent’s security interests and any additional filing or recording fees in connection therewith. The Credit Parties shall be responsible for the payment of, and shall pay, any placement agent’s fees, financial advisory fees, or broker’s commissions relating to or arising out of the transactions contemplated hereby, and shall hold the Agent, each Holder and each Lender harmless against, any liability, loss or expense (including, without limitation, reasonable attorney’s fees and out-of-pocket expenses) arising in connection with any claim relating to any such payment.
Section 8.23    Modification of Organizational Documents and Certain Documents. The Credit Parties shall not, without the prior written consent of the Agent, (i) permit the charter, by-laws, memorandum and articles of association, or other organizational or incorporation documents of any Credit Party, or any Material Contract, to be amended or modified, or (ii) amend, supplement in a manner adverse to the Agent, any Lender or any Holder or otherwise modify, or waive any material rights, claims or remedies under, any of the Consumer Loan Agreements except with respect to a settlement or charge off thereunder in the ordinary course of business.
Section 8.24    Joinder. The Credit Parties shall notify the Agent in writing within the earlier of: (i) thirty (30) days of the formation or acquisition of any Subsidiaries; or (ii) the
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making of any Consumer Loans by any such newly formed or acquired Subsidiaries. For any Subsidiaries formed or acquired after the Closing Date, the Credit Parties shall at their own expense, within the time period set forth in the immediately preceding sentence, cause each such Subsidiary (provided, in the case of Foreign Subsidiaries, no 956 Impact would arise as a result thereof) to execute an instrument of joinder in the form attached hereto as Exhibit G (a “Joinder Agreement”), obligating such Subsidiary to any or all of the Transaction Documents deemed necessary or appropriate by the Agent and cause the applicable Person that owns the Equity Interests of such Subsidiary to pledge to the Holders 100% of the Equity Interests owned by it of each such Subsidiary formed or acquired after the Closing Date and execute and deliver all documents or instruments required thereunder or appropriate to perfect the security interest created thereby (provided that with respect to any First Tier Foreign Subsidiary, if a 956 Impact exists such pledge shall be limited to sixty-five percent (65%) of such Foreign Subsidiary’s outstanding voting Equity Interests and one hundred percent (100%) of such Foreign Subsidiary’s outstanding non-voting Equity Interests). In the event a Person becomes a Guarantor (a “New Guarantor”) pursuant to the Joinder Agreement, upon such execution the New Guarantor shall be bound by all the terms and conditions hereof and the other Transaction Documents to the same extent as though such New Guarantor had originally executed the Transaction Documents. The addition of a New Guarantor shall not in any manner affect the obligations of the other Credit Parties hereunder or thereunder. Each Credit Party, each Lender, each Holder and the Agent acknowledges that the schedules and exhibits hereto or thereto may be amended or modified in connection with the addition of any New Guarantor to reflect information relating to such New Guarantor. Compliance with this Section 8.24 shall not excuse any violation of Section 8.8 for failing to obtain Lender’s prior consent to a merger, consolidation or Acquisition. A “956 Impact” will be deemed to exist to the extent the issuance of a guaranty by, grant of a Lien by, or pledge of greater than two-thirds of the voting Equity Interests of, a Foreign Subsidiary would result in material incremental income tax liability under Section 956 of the Code to Elevate Credit Parent, taking into account actual anticipated repatriation of funds, foreign tax credits and other relevant factors.
Section 8.25    Investments. No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to, make or permit to exist any Investment in any other Person, except the following:
(a)    Cash Equivalent Investments, to the extent the Agent has a first priority security interest therein;
(b)    bank deposits in the ordinary course of business, to the extent the Agent has a first priority security interest therein;
(c)    Investments in securities of account debtors received pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of such account debtors;
(d)    Investments owned by the Credit Parties and their Subsidiaries on the Closing Date as set forth on Schedule 8.25;
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(e)    (i) Domestic Credit Parties may maintain Investments in Foreign Subsidiaries in amounts not to exceed the outstanding amounts of such Investments as of the Closing Date plus additional Investments in Foreign Subsidiaries after the Closing Date to the extent expressly approved by Agent in advance in writing; provided, if the Investments described in the foregoing clause (i) are evidenced by notes, such notes shall be pledged to Agent, for the benefit of the Lenders, and have such terms as Agent may reasonably require; and (ii) Foreign Subsidiaries may make Investments in other Foreign Subsidiaries;
(f)    Investments constituting cash equity contributions by Elevate Credit Parent in the Borrower, including, without limitation, cash equity contributions made in order to satisfy the LTV Covenant Cure Obligation, and Investments by Elevate Credit Parent in its other Subsidiaries that are Credit Parties; and
(g)    Investments made by the Credit Parties (other than Elevate Credit Parent) constituting Consumer Loans to residents of the United States.
Section 8.26    Further Assurances. At any time or from time to time upon the request of the Agent, each Credit Party will, at its expense, promptly execute, acknowledge and deliver such further documents and do such other acts and things as the Agent may reasonably request in order to effect fully the purposes of the Transaction Documents. In furtherance and not in limitation of the foregoing, each Credit Party shall take such actions as the Agent may reasonably request from time to time to ensure that the Obligations are guaranteed by all Subsidiaries of the Credit Parties and secured by substantially all of the assets of the Credit Parties and their Subsidiaries (in each case provided, in the case of Foreign Subsidiaries, no 956 Impact would arise as a result thereof).
Section 8.27    Backup Servicer. At any time or from time to time upon the request of the Agent, the Borrower shall appoint, at Borrower’s sole expense, a Backup Servicer that is satisfactory to the Agent in Agent’s sole discretion and shall enter into a Backup Servicing Agreement that is satisfactory (including with respect to the Credit Parties’ obligations to cooperate with such Backup servicer and provide any data and other information and documents, including data tapes, to such Backup Servicer to allow Backup Servicer to perform its duties) to the Agent in Agent’s sole discretion.
Section 8.28    Claims Escrow Account.
(a)    Within two (2) Business Days on or after the date in which (i) all Obligations not relating to any pending claim that are due to Lenders and Holders have been paid in full and (ii) the Credit Parties are aware of a pending claim, the Borrower shall establish and maintain a deposit account at a bank reasonable acceptable to Agent, in the form of time deposit or demand account (the “Claims Escrow Account”). Such Claims Escrow Account shall be a Blocked Account. The Borrower shall deposit in the Claims Escrow Account, no later than one (1) Business Day following receipt, fifty percent (50%) of the collections received by Borrower from all of the Consumer Loans until the Claims Escrow Account Funding Condition is satisfied. After a Claims Escrow Account is established pursuant to this Section 8.28 and subject to the rights of the parties under the Intercreditor Agreement, the Borrower shall be permitted to remit,
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prior to the satisfaction of the Claims Escrow Account Funding Condition, the fifty percent (50%) of the collections remaining after remitting to the Claims Escrow Account and, on and after the satisfaction of the Claims Escrow Account Funding Condition, one hundred percent (100%) of any collections to the applicable Elevate Credit Subsidiary in accordance with the applicable contractual terms between Borrower and such Elevate Credit Subsidiary. For the avoidance of doubt and notwithstanding Section 12.14, subject to the satisfaction of the foregoing requirements this Section 8.28(a), the Agent shall not seek to limit the ability of the Borrower to remit funds to the Elevate Credit Subsidiary under this Section 8.28(a) and such amounts shall be released without restriction from the Lien of the Financing Agreement.
(b)    In the sole discretion of the Agent, funds deposited in the Claims Escrow Account may be used to satisfy any Obligations then due to Lenders, Holders and/or Agent.

Article 9
CROSS GUARANTY

Section 9.1    Cross-Guaranty. Each Guarantor, jointly and severally, hereby absolutely and unconditionally guarantees to the Agent, the Lenders, the Holders and their respective successors and assigns the full and prompt payment (whether at stated maturity, by acceleration or otherwise) and performance of, all Obligations. Each Guarantor agrees that its guaranty obligation hereunder is a continuing guaranty of payment and performance and not of collection, that its obligations under this Article 9 shall not be discharged until payment and performance, in full, of the Obligations under the Transaction Documents has occurred and all commitments (if any) to lend hereunder have been terminated, and that its obligations under this Article 9 shall be absolute and unconditional, irrespective of, and unaffected by:
(a)    the genuineness, validity, regularity, enforceability or any future amendment of, or change in, this Agreement, any other Transaction Document or any other agreement, document or instrument to which any Credit Party is or may become a party;
(b)    the absence of any action to enforce this Agreement (including this Article 9) or any other Transaction Document or the waiver or consent by the Agent, the Lenders or the Holders with respect to any of the provisions thereof;
(c)    the Insolvency of any Credit Party or Subsidiary; or
(d)    any other action or circumstances that might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor.
Each Guarantor shall be regarded, and shall be in the same position, as principal debtor with respect to the obligations guaranteed hereunder.
Section 9.2    Waivers by Guarantors. Each Guarantor expressly waives all rights it may have now or in the future under any statute, or at common law, or at law or in equity, or
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otherwise, to compel the Agent, the Lenders or the Holders to marshal assets or to proceed in respect of the obligations guaranteed hereunder against any other Credit Party or Subsidiary, any other party or against any security for the payment and performance of the obligations under the Transaction Documents before proceeding against, or as a condition to proceeding against, such Guarantor. It is agreed among each Guarantor that the foregoing waivers are of the essence of the transaction contemplated by this Agreement and the other Transaction Documents and that, but for the provisions of this Article 9 and such waivers, the Agent, the Lenders and the Holders would decline to enter into this Agreement.
Section 9.3    Benefit of Guaranty. Each Guarantor agrees that the provisions of this Article 9 are for the benefit of the Agent, the Lenders, the Holders and their respective successors, transferees, endorsees and assigns, and nothing herein contained shall impair, as between any other Credit Party, on the one hand, and the Agent, the Lenders and the Holders, on the other hand, the obligations of such other Credit Party under the Transaction Documents.
Section 9.4    Waiver of Subrogation, Etc. Notwithstanding anything to the contrary in this Agreement or in any other Transaction Document, and except as set forth in Section 9.7, each Guarantor hereby expressly and irrevocably waives any and all rights at law or in equity to subrogation, reimbursement, exoneration, contribution, indemnification or set off and any and all defenses available to a surety, guarantor or accommodation co-obligor. Each Guarantor acknowledges and agrees that this waiver is intended to benefit the Agent, the Lenders and the Holders and shall not limit or otherwise affect such Guarantor’s liability hereunder or the enforceability of this Article 9, and that the Agent, the Lenders, the Holders and their respective successors and assigns are intended third party beneficiaries of the waivers and agreements set forth in this Section 9.4.
Section 9.5    Election of Remedies. If the Agent, the Lenders or the Holders may, under applicable law, proceed to realize their benefits under any of the Transaction Documents, the Agent, any of the Lenders or any of the Holders may, at their sole option, determine which of their remedies or rights they may pursue without affecting any of their rights and remedies under this Article 9. If, in the exercise of any of their rights and remedies, any of the Agent, the Lenders or the Holders shall forfeit any of their rights or remedies, including their right to enter a deficiency judgment against any Credit Party or any other Person, whether because of any applicable laws pertaining to “election of remedies” or the like, each Credit Party hereby consents to such action by the Agent, such Lenders or such Holders, as applicable, and waives any claim based upon such action, even if such action by the Agent, such Lenders or such Holders shall result in a full or partial loss of any rights of subrogation that any Credit Party might otherwise have had but for such action by the Agent, such Lenders or such Holders. Any election of remedies that results in the denial or impairment of the right of the Agent, the Lenders or the Holders to seek a deficiency judgment against any Credit Party shall not impair any other Credit Party’s obligation to pay the full amount of the Obligations under the Transaction Documents.
Section 9.6    Limitation. Notwithstanding any provision herein contained to the contrary, each Guarantor’s liability under this Article 9 (which liability is in any event in
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addition to amounts for which Credit Parties are primarily liable under the Transaction Documents) shall be limited to an amount not to exceed as of any date of determination the greater of:
(a)    the net amount of all amounts advanced to such Guarantor under this Agreement or otherwise transferred to, or for the benefit of, such Guarantor (including any interest and fees and other charges); and
(b)    the amount that could be claimed by the Agent, the Lenders and the Holders from such Guarantor under this Article 9 without rendering such claim voidable or avoidable under Section 548 of Chapter 11 of the Bankruptcy Code or under any applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance Act or similar statute or common law after taking into account, among other things, such Guarantor’s right of contribution and indemnification from each other Credit Party under Section 9.7.
Section 9.7    Contribution with Respect to Guaranty Obligations.
(a)    To the extent that any Guarantor shall make a payment under this Article 9 of all or any of the Obligations under the Transaction Documents (other than financial accommodations made to that Guarantor for which it is primarily liable) (a “Guarantor Payment”) that, taking into account all other Guarantor Payments then previously or concurrently made by any other Guarantor, exceeds the amount that such Guarantor would otherwise have paid if each Guarantor had paid the aggregate Obligations under the Transaction Documents satisfied by such Guarantor Payment in the same proportion that such Guarantor’s “Allocable Amount” (as defined below) (as determined immediately prior to such Guarantor Payment) bore to the aggregate Allocable Amounts of each of the Guarantor as determined immediately prior to the making of such Guarantor Payment, then, following indefeasible payment in full in cash of the Obligations under the Transaction Documents and termination of the Transaction Documents (including all commitments (if any) to lend hereunder), such Guarantor shall be entitled to receive contribution and indemnification payments from, and be reimbursed by, each other Guarantor for the amount of such excess, pro rata based upon their respective Allocable Amounts in effect immediately prior to such Guarantor Payment.
(b)    As of any date of determination, the “Allocable Amount” of any Guarantor shall be equal to the maximum amount of the claim that could then be recovered from such Guarantor under this Article 9 without rendering such claim voidable or avoidable under Section 548 of Chapter 11 of the Bankruptcy Code or under any applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance Act or similar statute or common law.
(c)    This Section 9.7 is intended only to define the relative rights of Guarantor and nothing set forth in this Section 9.7 is intended to or shall impair the obligations of Credit Parties, jointly and severally, to pay any amounts as and when the same shall become due and payable in accordance with the terms of this Agreement, including Section 9.1. Nothing contained in this Section 9.7 shall limit the liability of any Credit Party to pay the financial accommodations made directly or indirectly to that Credit Party and accrued interest, fees and expenses with respect thereto for which such Credit Party shall be primarily liable.
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(d)    The parties hereto acknowledge that the rights of contribution and indemnification hereunder shall constitute assets of the Guarantor to which such contribution and indemnification is owing.
The rights of the indemnifying Guarantor against other Guarantor under this Section 9.7 shall be exercisable upon the full and indefeasible payment of the Obligations under the Transaction Documents and the termination of the Transaction Documents.
Section 9.8    Liability Cumulative. The liability of each Guarantor under this Article 9 is in addition to and shall be cumulative with all liabilities of each other Credit Party to the Agent, the Lenders and the Holders under this Agreement and the other Transaction Documents to which such Credit Party is a party or in respect of any Obligations under the Transaction Documents or obligation of the other Credit Party, without any limitation as to amount, unless the instrument or agreement evidencing or creating such other liability specifically provides to the contrary.
Section 9.9    Stay of Acceleration. If acceleration of the time for payment of any amount payable by the Credit Parties under this Agreement is stayed upon the insolvency, bankruptcy or reorganization of any of the Credit Parties, all such amounts otherwise subject to acceleration under the terms of this Agreement shall nonetheless be payable jointly and severally by the Credit Parties hereunder forthwith on demand by the Agent.
Section 9.10    Benefit to Credit Parties. All of the Credit Parties and their Subsidiaries are engaged in related businesses and integrated to such an extent that the financial strength and flexibility of each such Person has a direct impact on the success of each other Person. Each Credit Party and each Subsidiary will derive substantial direct and indirect benefit from the purchase and sale of the Notes hereunder.
Section 9.11    Indemnity. Each Guarantor irrevocably and unconditionally jointly and severally agrees with the Agent, each Lender and each Holder that if any obligation guaranteed by it is or becomes unenforceable, invalid or illegal, it will, as an independent and primary obligation, indemnify the Agent, such Lender and/or such Holder, as applicable, immediately on demand against any cost, loss or liability it incurs as a result of the Borrower or Guarantor not paying any amount which would, but for such unenforceability, invalidity or illegality, have been payable by it under any Transaction Document on the date when it would have been due. The amount payable by a Guarantor under this indemnity will not exceed the amount it would have had to pay under this Article 9 if the amount claimed had been recoverable on the basis of a guarantee.
Section 9.12    Reinstatement. If any discharge, release or arrangement (whether in respect of the Obligations or any security for those Obligations or otherwise) is made by the Agent, a Lender and/or a Holder in whole or in part on the basis of any payment, security or other disposition which is avoided or must be restored in insolvency, liquidation, administration or otherwise, without limitation, then the liability of each Guarantor under this Article 9 will continue or be reinstated as if the discharge, release or arrangement had not occurred.
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Section 9.13    Guarantor Intent. Without prejudice to any other provision of this Article 9, each Guarantor expressly confirms that it intends that this guarantee shall extend from time to time to any (however fundamental) variation, increase, extension or addition of or to any of the Transaction Documents and/or any facility or amount made available under any of the Transaction Documents for the purposes of or in connection with any of the following: business acquisitions of any nature; increasing working capital; enabling investor distributions to be made; carrying out restructurings; refinancing existing facilities; refinancing any other indebtedness; making facilities available to new borrowers; any other variation or extension of the purposes for which any such facility or amount might be made available from time to time; and any reasonable and invoiced fees, costs and/or expenses associated with any of the foregoing.
Section 9.14    General. Notwithstanding anything to the contrary set forth herein, the provisions of this Article 9 shall not be construed to (a) permit the Agent, Lenders or Holders to amend or otherwise modify this Agreement or the Obligations in a manner that would otherwise require the consent of the Borrower pursuant to the express terms of this Agreement or (b) constitute a waiver by the Borrower of the Borrower’s rights or defenses under this Agreement in the Borrower’s capacity as the Borrower hereunder.
Article 10
RIGHTS UPON EVENT OF DEFAULT

Section 10.1    Event of Default. Each of the following events shall constitute an “Event of Default”:
(a)    any Credit Parties’ failure to pay to the Agent, the Holders and/or the Lenders any amount of (i) principal or redemptions when and as due under this Agreement or any Note (including, without limitation, the Credit Parties’ failure to pay any redemption payments or amounts hereunder or under any Note) or any other Transaction Document, or any other agreement, document, certificate or other instrument delivered in connection with the transactions contemplated hereby and thereby or (ii) interest (including interest calculated at the Default Rate), Late Charges, Prepayment Premium or other amounts (other than principal or redemptions) within five (5) days after the same shall become due under this Agreement or any Note or any other Transaction Document, or any other agreement, document, certificate or other instrument delivered in connection with the transactions contemplated hereby and thereby;
(b)    any default occurs and is continuing under (subject to any applicable grace periods), or any redemption of or acceleration prior to maturity of, any Indebtedness (other than the Obligations) of any Credit Party or any Subsidiary of any Credit Party in excess of $100,000; provided, that, in the event that any such default or acceleration of indebtedness is cured or rescinded by the holders thereof prior to acceleration of the Notes, no Event of Default shall exist as a result of such cured default or rescinded acceleration;
(c)    (i) any Credit Party or any Subsidiary of any Credit Party pursuant to or within the meaning of Title 11, U.S. Code (the “Bankruptcy Code”) or any similar federal,
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foreign or state law for the relief of debtors (collectively, “Bankruptcy Law”), (A) commences a voluntary case, (B) consents to the entry of an order for relief against it in an involuntary case, or to the conversion of an involuntary case to a voluntary case, (C) consents to the appointment of or taking of possession by a receiver, trustee, assignee, liquidator or similar official (a “Custodian”) for all or a substantial part of its property, (D) makes a general assignment for the benefit of its creditors, or (E) is generally unable to pay its debts as they become due; (ii) the Credit Parties, taken as a whole, become Insolvent or (iii) the board of directors (or similar governing body) of any Credit Party or any Subsidiary of any Credit Party (or any committee thereof) adopts any resolution or otherwise authorizes any action to approve any of the actions referred to in this Section 10.1(c) or Section 10.1(d);
(d)    any expropriation, attachment, sequestration, distress or execution or any analogous process in any jurisdiction in which a court of competent jurisdiction (i) enters an order or decree under any Bankruptcy Law, which order or decree (A) (1) is not stayed or (2) is not rescinded, vacated, overturned, or otherwise withdrawn within sixty (60) days after the entry thereof, and (B) is for relief against any Credit Party or any Subsidiary of any Credit Party in an involuntary case, (ii) appoints a Custodian over all or a substantial part of the property of any Credit Party or any Subsidiary of any Credit Party and such appointment continues for sixty (60) days, (iii) orders the liquidation of any Credit Party or any Subsidiary of any Credit Party, or (iv) issues a warrant of attachment, execution or similar process against any substantial part of the property of any Credit Party or any Subsidiary of any Credit Party;
(e)    a final judgment or judgments for the payment of money in excess of $250,000 or that otherwise could reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect are rendered against any Credit Party or any Subsidiary of any Credit Party, which judgments are not, within fifteen (15) days after the entry thereof, bonded, discharged or stayed pending appeal, or are not discharged within fifteen (15) days after the expiration of such stay, unless (in the case of a monetary judgment) such judgment is covered by third-party insurance, so long as the applicable Credit Party or Subsidiary provides the Agent a written statement from such insurer (which written statement shall be reasonably satisfactory to the Agent) to the effect that such judgment is covered by insurance and such Credit Party or Subsidiary will receive the proceeds of such insurance within fifteen (15) days following the issuance of such judgment;
(f)    any Credit Party breaches any covenant, or other term or condition of any Transaction Document, any other agreement with the Agent, any Lender or any Holder, except in the case of a breach of a covenant or other term or condition of any Transaction Document (other than Sections 8.1(a), 8.2, 8.3(c), 8.4 through 8.11, 8.13, 8.14, 8.16, 8.17, 8.18, 8.20, 8.21, 8.23, and 8.25 of this Agreement) which is curable, only if such breach continues for a period of thirty (30) days after the earlier to occur of (A) the date upon which an executive officer of any Credit Party becomes aware of such default and (B) the date upon which written notice thereof is given to the Borrower by Agent; and a breach addressed by the other provisions of this Section 10.1; provided, the foregoing notwithstanding, the Credit Parties shall be afforded a grace period of five (5) Business Days, exercisable no more than an aggregate of twice per year during the term of this Agreement, with regard to the delivery requirements set forth in Section 8.2 hereof;
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(g)    a Change of Control that is not in connection with an M&A Event resulting in a Permitted Redemption pursuant to Section 2.3(a) occurs;
(h)    any representation or warranty made by any Credit Party herein or in any other Transaction Document is breached or is false or misleading, each in any material respect;
(i)    any “Event of Default” occurs and is continuing with respect to any of the other Transaction Documents, the Republic Financing Agreement, the FinWise Financing Agreement or the Other Financing Agreement beyond any applicable notice or cure period;
(j)    (i) the written rescindment or repudiation by any Credit Party of any Transaction Document or any of its obligations under any Transaction Document, or (ii) any Transaction Document or any material term thereof shall cease to be, or is asserted by any Credit Party not to be, a legal, valid and binding obligation of any Credit Party enforceable in accordance with its terms;
(k)    any Lien against the Collateral intended to be created by any Security Document shall at any time be invalidated, subordinated (except to Permitted Liens to the extent expressly permitted under the Transaction Documents) or otherwise cease to be in full force and effect, for whatever reason, or any security interest purported to be created by any Security Document shall cease to be, or shall be asserted by any Credit Party not to be, a valid, first priority perfected Lien (to the extent that any Transaction Document obligates the parties to provide such a perfected first priority Lien, and except to the extent Permitted Liens are permitted by the terms of the Transaction Documents to have priority) in the Collateral (except as expressly otherwise provided under and in accordance with the terms of such Transaction Document);
(l)    any material provision of any Transaction Document shall at any time for any reason be declared to be null and void, or the validity or enforceability thereof shall be contested by any Credit Party, or a proceeding shall be commenced by any Credit Party, or by any Governmental Authority having jurisdiction over such Credit Party, seeking to establish the invalidity or unenforceability thereof, or any Credit Party shall deny that it has any liability or obligation purported to be created under any Transaction Document;
(m)    Reserved;
(n)    the occurrence of (i) any event which could reasonably be expected to have a Material Adverse Effect, (ii) a State Force Majeure Event, or (iii) a Federal or Multi-State Force Majeure Event;
(o)    (i) any Credit Party or Subsidiary of any Credit Party liquidates, dissolves, terminates or suspends its business operations or otherwise fails to operate its business in the ordinary course; provided, the foregoing notwithstanding any of the Elevate Credit Subsidiaries may suspend its operations in any jurisdiction in which it operates and dissolve as a result of a decision by the Credit Parties to exit one or more markets from time to time or (ii) the authority or ability of any Credit Party or Subsidiary of any Credit Party to conduct its business is limited
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or wholly or substantially curtailed by any seizure, expropriation, nationalization, intervention, restriction or other action by or on behalf of any governmental, regulatory or other authority or other person in relation to any Credit Party, any of their Subsidiaries or any of their respective assets;
(p)    Jason Harvison and Chris Lutes shall, at any time for any reason, cease to be employed by either an Elevate Credit Subsidiary or Elevate Credit Parent in the same position and with duties substantially similar to those held as of the Closing Date, unless a replacement reasonably satisfactory to Agent shall have been appointed and employed (including on an interim basis) within ninety (90) days of his cessation of employment;
(q)    any material decline or depreciation in the value or market price of the Collateral (whether actual or reasonably anticipated), which causes the Collateral, in the reasonable opinion of Agent acting in good faith, to become unsatisfactory as to value or character, or which causes the Agent to reasonably believe that the Obligations are inadequately secured and that the likelihood for repayment of the Obligations is or will soon be materially impaired, time being of the essence;
(r)    (i) the occurrence of one or more ERISA Events which individually or in the aggregate result(s) in or could reasonably be expected to result in liability of the Credit Parties or any of their Subsidiaries in excess of $100,000 during the term hereof; or (ii) the existence of any fact or circumstance that could reasonably be expected to result in the imposition of a Lien pursuant to Section 430(k) of the Code or ERISA or a violation of Section 436 of the Code; or
(s)    any default or event of default (monetary or otherwise) by a Credit Party shall occur with respect to any Material Contract, which if curable has not been cured in accordance with the provisions of the applicable Material Contract and that could have a Material Adverse Effect.
Section 10.2    Termination of Commitments and Acceleration Right.
(a)    Promptly after the occurrence of an Event of Default, the Borrower shall deliver written notice thereof via email, facsimile and overnight courier (an “Event of Default Notice”) to the Agent. At any time after the earlier of the Agent’s receipt of an Event of Default Notice and the Agent becoming aware of an Event of Default which has not been cured or waived, (i) the Agent may declare all or any portion of the Commitment of each Lender to purchase additional Notes to be suspended or terminated by delivering written notice thereof (an “Event of Default Commitment Suspension or Termination Notice”) to the Borrower, which Event of Default Commitment Suspension or Termination Notice shall indicate the portion of the Commitments that the Agent is suspending or terminating, whereupon such Commitments shall forthwith be suspended or terminated, and/or (ii) the Agent may require the Borrower to redeem all or any portion of the Notes (an “Event of Default Redemption”) by delivering written notice thereof (the “Event of Default Redemption Notice”) to the Borrower, which Event of Default Redemption Notice shall indicate the tranche(s) and portion(s) of the Notes that the Agent is requiring the Borrower to redeem (to be allocated on a pro rata basis with respect to the
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applicable outstanding Notes), whereupon a corresponding pro rata portion of the applicable Commitments in respect thereof shall forthwith be terminated effective upon the date of such Event of Default Redemption Notice; provided, that upon the occurrence of any Event of Default described in Section 10.1(c) or Section 10.1(d), and without any action on behalf of the Agent, any Holder or any Lender, the Commitments, in whole, shall automatically be terminated and the Notes shall automatically be redeemed by the Borrower. All Notes subject to redemption by the Borrower pursuant to this Section 10.2 shall be redeemed by the Borrower at a price equal to the outstanding principal amount of such Notes, plus accrued and unpaid interest, accrued and unpaid Late Charges, accrued and unpaid Prepayment Premium and all other amounts due under the Transaction Documents (the “Event of Default Redemption Price”); provided, the foregoing notwithstanding, the Prepayment Premium shall not be due solely in connection with an Event of Default Redemption occurring as a result of the occurrence of an Event of Default of the type described in Sections 10.1(n)(ii) or 10.1(n)(iii) so long as no other Event of Default shall be in existence at such time.
(b)    In the case of an Event of Default Redemption, the Borrower shall deliver the applicable Event of Default Redemption Price to the Agent within three (3) Business Days after the Borrower’s receipt of the Event of Default Redemption Notice. In the case of an Event of Default Redemption of less than all of the principal of the Notes, the Borrower shall promptly cause to be issued and delivered to the Holders new Notes (in accordance with Section 2.7) representing the portion of the outstanding principal thereunder that has not be paid as a result of such redemption.
Section 10.3    Consultation Rights. Without in any way limiting any remedy that the Agent, the Holders or the Lenders may have, at law or in equity, under any Transaction Document (including under the foregoing provisions of this Article 10) or otherwise, upon the occurrence and during the continuance of any Event of Default, upon the request of the Agent, the Credit Parties shall hire or otherwise retain a consultant, advisor or similar Person acceptable to the Agent to advise the Credit Parties with respect to their business and operations.
Section 10.4    Other Remedies. The remedies provided herein and in the Notes shall be cumulative and in addition to all other remedies available under any of the other Transaction Documents, at law or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the Agent’s, any Lender’s or any Holder’s right to pursue actual damages for any failure by the Credit Parties to comply with the terms of this Agreement, the Notes and the other Transaction Documents. Amounts set forth or provided for herein and in the Notes with respect to payments and the like (and the computation thereof) shall be the amounts to be received by the Agent, the Holders and/or the Lenders and shall not, except as expressly provided herein, be subject to any other obligation of the Credit Parties (or the performance thereof). Each of the Credit Parties acknowledges that a breach by it of its obligations hereunder and under the Notes and the other Transaction Documents will cause irreparable harm to the Agent, the Holders and the Lenders and that the remedy at law for any such breach may be inadequate. The Credit Parties therefore agree that, in the event of any such breach or threatened breach, the Agent, the Holders and the Lenders shall be entitled, in addition
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to all other available remedies, to an injunction restraining any breach, without the necessity of showing economic loss and without any bond or other security being required.
Section 10.5    Application of Proceeds.
(a)    Notwithstanding anything to the contrary contained in this Agreement, upon the occurrence and during the continuance of an Event of Default, Borrower irrevocably waives the right to direct the application of any and all payments at any time or times thereafter received by Agent from or on behalf of the Borrower or any other Credit Party of all or any part of the Obligations, and, as between the Credit Parties on the one hand and Agent and Holders on the other, Agent shall have the continuing and exclusive right to apply and to reapply any and all payments received against the Obligations in such manner as Agent may deem advisable (subject to clause (b) below) notwithstanding any previous application by Agent.
(b)    Following the occurrence and during the continuance of an Event of Default, any and all voluntary and mandatory, payments, prepayments or redemptions made in respect of the Obligations shall be delivered to the Agent and shall be applied in the following order: first, to all fees, costs, indemnities, liabilities, obligations and expenses incurred by or owing to Agent with respect to this Agreement, the other Transaction Documents or the Collateral; second, to accrued and unpaid interest on a pro rata basis with respect to the outstanding Notes; and third, to the principal amount of Notes then due and owing on a pro rata basis with respect to the outstanding Notes.
(c)    Any payments, prepayments or proceeds of Collateral received by any Lender that were not permitted to be made under this Agreement or were not applied as required under this Agreement shall be promptly paid over to the Agent for application under Section 10.5(b). Any balance remaining after giving effect to the applications set forth in this Section 10.5 shall be delivered to Borrower or to whoever may be lawfully entitled to receive such balance or as a court of competent jurisdiction may direct. In carrying out any of the applications set forth in this Section 10.5, (i) amounts received shall be applied in the numerical order provided until exhausted prior to the application to the next succeeding category and (ii) each of the Persons entitled to receive a payment in any particular category shall receive an amount equal to its pro rata share of amounts available to be applied pursuant thereto for such category.
Article 11
[Reserved]

Article 12

AGENCY PROVISIONS

Section 12.1    Appointment. Each of the Holders and Lenders hereby irrevocably designates and appoints Agent as the administrative agent and collateral agent of such Holder or
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such Lender (or the Holders or Lenders represented by it) under this Agreement and the other Transaction Documents for the term hereof (and Agent hereby accepts such appointment), and each such Holder and Lender irrevocably authorizes Agent to take such action on its behalf under the provisions of this Agreement and the other Transaction Documents and to exercise such powers and perform such duties as are expressly delegated to the Agent by the terms of this Agreement and the other Transaction Documents, together with such other powers as are reasonably incidental thereto. Notwithstanding any provision to the contrary elsewhere in this Agreement or the other Transaction Documents, the Agent shall not have any duties or responsibilities, except those expressly set forth herein and therein, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or the other Transaction Documents or otherwise exist against the Agent. Without limiting the generality of the foregoing, Agent shall have the sole and exclusive right and authority (to the exclusion of the Lenders and Holders), and is hereby authorized, to (a) act as the disbursing and collecting agent for the Lenders and Holders with respect to all payments and collections arising in connection with the Transaction Documents (including in any proceeding described in Sections 10.1(c) or 10.1(d) or any other bankruptcy, insolvency or similar proceeding), and each Person making any payment in connection with any Transaction Document to any Lender or Holder is hereby authorized to make such payment to Agent, (b) file and prove claims and file other documents necessary or desirable to allow the claims of the Agent, Lenders and Holders with respect to any Obligation in any proceeding described in Sections 10.1(c) or 10.1(d) or any other bankruptcy, insolvency or similar proceeding (but not to vote, consent or otherwise act on behalf of such Person), (c) act as collateral agent for itself and each Lender and Holder for purposes of the perfection of all Liens created by such agreements and all other purposes stated therein, (d) manage, supervise and otherwise deal with the Collateral, (e) take such other action as is necessary or desirable to maintain the perfection and priority of the Liens created or purported to be created by the Transaction Documents, (f) except as may be otherwise specified in any Transaction Document, exercise all remedies given to Agent, the Lenders and the Holders with respect to the Credit Parties and/or the Collateral, whether under the Transaction Documents, applicable Requirements or otherwise and (g) execute any amendment, consent or waiver under the Transaction Documents on behalf of any Lender or Holder that has consented in writing to such amendment, consent or waiver; provided, however, that Agent hereby appoints, authorizes and directs each Lender and Holder to act as collateral sub-agent for Agent, the Lenders and the Holders for purposes of the perfection of all Liens with respect to the Collateral, including any deposit account maintained by a Credit Party with, and cash and Cash Equivalent Investments held by, such Lender or Holder, and may further authorize and direct the Lenders and the Holders to take further actions as collateral sub-agents for purposes of enforcing such Liens or otherwise to transfer the Collateral subject thereto to Agent, and each Lender and Holder hereby agrees to take such further actions to the extent, and only to the extent, so authorized and directed. Any reference to the Agent in this Agreement or the other Transaction Documents shall be deemed to refer to the Agent solely in its capacity as Agent and not in its capacity, if any, as a Holder or a Lender. Under the Transaction Documents, Agent (a) is acting solely on behalf of the Agent, Lenders and Holders (except to the limited extent provided in Section 2.9 with respect to the Register), with duties that are entirely administrative in nature, notwithstanding the use of the defined term “Agent”, the terms “agent”, “Agent” and “collateral agent” and similar terms in any Transaction Document to refer to Agent, which terms are used
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for title purposes only, (b) is not assuming any obligation under any Transaction Document other than as expressly set forth therein or any role as agent, fiduciary or trustee of or for any Lender, Holder or any other Person and (c) shall have no implied functions, responsibilities, duties, obligations or other liabilities under any Transaction Document, and each Lender and Holder, by accepting the benefits of the Transaction Documents, hereby waives and agrees not to assert any claim against Agent based on the roles, duties and legal relationships expressly disclaimed in clauses (a) through (c) of this sentence.
Section 12.2    Binding Effect. Each Lender and Holder, by accepting the benefits of the Loan Documents, agrees that (a) any action taken by Agent (or, when expressly required hereby, all the Holders) in accordance with the provisions of the Transaction Documents, (b) any action taken by Agent in reliance upon the instructions of Required Lenders (or, when expressly required hereby, all the Holders) and (c) the exercise by Agent (or, when expressly required hereby, all the Holders) of the powers set forth herein or therein, together with such other powers as are reasonably incidental thereto, shall be authorized and binding upon all of the Lenders and Holders.
Section 12.3    Use of Discretion. Agent shall not be required to exercise any discretion or take, or to omit to take, any action, including with respect to enforcement or collection, except any action it is required to take or omit to take (a) under any Transaction Document or (b) pursuant to instructions from all the Holders, when expressly required hereby. Notwithstanding the foregoing, Agent shall not be required to take, or to omit to take, any action (a) unless, upon demand, Agent receives an indemnification satisfactory to it from the Lenders and/or Holders (or, to the extent applicable and acceptable to Agent, any other Person) against all liabilities that, by reason of such action or omission, may be imposed on, incurred by or asserted against Agent or any of its Related Parties or (b) that is, in the opinion of Agent or its counsel, contrary to any Transaction Document or applicable Requirement. Notwithstanding anything to the contrary contained herein or in any other Transaction Document, the authority to enforce rights and remedies hereunder and under the other Transaction Documents against the Credit Parties or any of them shall be vested exclusively in, and all actions and proceedings at law in connection with such enforcement shall be instituted and maintained exclusively by, Agent in accordance with the Transaction Documents for the benefit of all the Lenders and the Holders; provided, that the foregoing shall not prohibit (a) Agent from exercising on its own behalf the rights and remedies that inure to its benefit (solely in its capacity as Agent) hereunder and under the other Transaction Documents, (b) any Lender or Holder from exercising setoff rights in accordance with Section 13.17(a) or (c) any Lender or Holder from filing proofs of claim or appearing and filing pleadings on its own behalf during the pendency of a proceeding relative to any Credit Party under any bankruptcy or other debtor relief law; and provided, further that if at any time there is no Person acting as Agent hereunder and under the other Transaction Documents, then (A) the Required Lenders shall have the rights otherwise ascribed to Agent pursuant to Article 10 and (B) in addition to the matters set forth in clauses (b) and (c) of the preceding proviso and subject to Section 13.17(a), any Lender or Holder may, with the consent of the Required Lenders, enforce any rights and remedies available to it and as authorized by the Required Lenders.
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Section 12.4    Delegation of Duties. The Agent may execute any of its respective duties under this Agreement or the other Transaction Documents by or through agents or attorneys in fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. The Agent shall not be responsible for the negligence or misconduct of any agents or attorneys in fact selected by the Agent with reasonable care.
Section 12.5    Exculpatory Provisions. Neither the Agent nor any of its Related Parties shall be (a) liable for any action lawfully taken or omitted to be taken by it or such Person under or in connection with this Agreement (except for actions occasioned by its or such Person’s own gross negligence or willful misconduct), or (b) responsible in any manner to any of the Holders or Lenders for any recitals, statements, representations or warranties made by any Guarantor, the Borrower or any of their respective Subsidiaries or any officer thereof contained in this Agreement, the other Transaction Documents or in any certificate, report, statement or other document referred to or provided for in, or received by the Agent under or in connection with, this Agreement or the other Transaction Documents or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Transaction Document or for any failure of any Guarantor, the Borrower or any of their respective Subsidiaries to perform its obligations hereunder or thereunder. The Agent shall not be under any obligation to any Holder or any Lender to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or of any other Transaction Document, or to inspect the properties, books or records of any Guarantor, the Borrower or any of their respective Subsidiaries.
Section 12.6    Reliance by Agent. The Agent shall be entitled to rely, and shall be fully protected in relying, upon any note, writing, resolution, notice, consent, certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype message, statement, order or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons and upon advice and statements of legal counsel (including, without limitation, counsel to the Borrower), independent accountants and other experts selected by the Agent. The Agent may deem and treat the payee of any Note as the owner thereof for all purposes unless the Agent shall have actual notice of any transferee. The Agent shall be fully justified in failing or refusing to take any action under this Agreement and the other Transaction Documents unless it shall first receive such advice or concurrence of the Required Lenders (or, when expressly required hereby, all the Holders) as it deems appropriate, if any, or it shall first be indemnified to its satisfaction by the Holders and Lenders against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action except for its own gross negligence or willful misconduct (each as determined in a final, non-appealable judgment by a court of competent jurisdiction). The Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement and the other Transaction Documents in accordance with a request of the Required Lenders (or, when expressly required hereby, all the Holders), and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Holders and Lenders and all future Holders and Lenders. Without limiting the foregoing, Agent:
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(a)    shall not be responsible or otherwise incur liability for any action or omission taken in reliance upon the instructions of the Required Lenders or for the actions or omissions of any of its Related Parties selected with reasonable care (other than employees, officers and directors of Agent, when acting on behalf of Agent);
(b)    shall not be responsible to any Lender, Holder or other Person for the due execution, legality, validity, enforceability, effectiveness, genuineness, sufficiency or value of, or the attachment, perfection or priority of any Lien created or purported to be created under or in connection with, any Transaction Document; and
(c)    makes no warranty or representation, and shall not be responsible, to any Lender, Holder or other Person for any statement, document, information, representation or warranty made or furnished by or on behalf of any Credit Party or any Related Party of any Credit Party in connection with any Transaction Document or any transaction contemplated therein or any other document or information with respect to any Credit Party, whether or not transmitted or omitted to be transmitted by Agent, including as to completeness, accuracy, scope or adequacy thereof, or for the scope, nature or results of any due diligence performed by Agent in connection with the Transaction Documents;
and, for each of the items set forth in clauses (a) through (c) above, each Lender, Holder and Credit Party hereby waives and agrees not to assert (and Borrower shall cause each other Credit Party to waive and agree not to assert) any right, claim or cause of action it might have against Agent based thereon.
Section 12.7    Notices of Default. The Agent shall not be deemed to have knowledge or notice of the occurrence of any Event of Default hereunder or under any other Transaction Document unless it has received notice of such Event of Default in accordance with the terms hereof or thereof or notice from a Holder, a Lender or the Borrower referring to this Agreement or the other Transaction Documents describing such Event of Default and stating that such notice is a “notice of default.” In the event that the Agent receives such a notice, it shall promptly give notice thereof to the Holders and Lenders. The Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Event of Default as it shall deem advisable in the best interests of the Holders and Lenders, except to the extent that other provisions of this Agreement or the other Transaction Documents expressly require that any such action be taken or not be taken only with the consent and authorization or upon the request of all the Holders.
Section 12.8    Non Reliance on the Agent and Other Holders. Each of the Holders and Lenders expressly acknowledges that neither the Agent nor any of its respective officers, directors, employees, agents, attorneys in fact, Subsidiaries or Affiliates has made any representations or warranties to it and that no act by the Agent hereinafter taken, including any review of the affairs of Elevate Credit Parent, the Borrower or any of their respective Subsidiaries, shall be deemed to constitute any representation or warranty by the Agent to any Holder or Lender. Each of the Holders and Lenders represents that it has made and will continue to make, independently and without reliance upon the Agent or any other Holder or Lender, and based on such documents and information as it shall deem appropriate at the time, its own credit
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analysis, appraisals and decisions in taking or not taking action under this Agreement and the other Transaction Documents, and such investigation as it deems necessary to inform itself as to the business, operations, property, financial and other condition and creditworthiness of Elevate Credit Parent, the Borrower and their Subsidiaries. Except for notices, reports and other documents expressly required to be furnished to the Holders and Lenders by the Agent hereunder or under the other Transaction Documents, the Agent shall not have any duty or responsibility to provide any Holder or Lender with any credit or other information concerning the business, operations, property, financial and other condition or creditworthiness of Elevate Credit Parent, the Borrower or any of their respective Subsidiaries which may come into the possession of the Agent or any of its respective officers, directors, employees, agents, attorneys in fact, respective Subsidiaries or Affiliates.
Section 12.9    Indemnification. Each of the Holders and Lenders hereby agrees to indemnify the Agent in its capacity as such (to the extent not reimbursed by the Credit Parties and without limiting the obligation of the Credit Parties to do so), ratably according to the respective amounts of their Notes, from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind whatsoever which may at any time (including, without limitation, at any time following the payment of the Notes) be imposed on, incurred by or asserted against the Agent in any way relating to or arising out of this Agreement, the other Transaction Documents, or any documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby or any action taken or omitted by the Agent under or in connection with any of the foregoing; provided that no Holder or Lender shall be liable for the payment of any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements to the extent they result from the Agent’s gross negligence or willful misconduct, as determined by a court of competent jurisdiction in a final non-appealable judgment or order. The agreements in this Section 12.9 shall survive the payment of the Notes and all other amounts payable hereunder and the termination of this Agreement and the other Transaction Documents.
Section 12.10    The Agent in Its Individual Capacity. The Agent and its Subsidiaries and Affiliates may make loans to, accept deposits from and generally engage in any kind of business with the Credit Parties or any of their Subsidiaries as though the Agent were not an Agent hereunder. With respect to any Note issued to it, the Agent shall have the same rights and powers under this Agreement and the other Transaction Documents as any Holder or Lender and may exercise the same as though it were not an Agent, and the terms “Holders” and “Lenders” shall include the Agent in its individual capacity.
Section 12.11    Resignation of the Agent; Successor Agent. The Agent may resign as Agent at any time by giving thirty (30) days advance notice thereof to the Holders and Lenders and the Borrower and, thereafter, the retiring Agent shall be discharged from its duties and obligations hereunder. Upon any such resignation, the Required Lenders shall have the right to appoint a successor Agent. If no successor Agent shall have been so appointed by the Required Lenders, then the Agent may, on behalf of the Holders and Lenders, appoint a successor Agent reasonably acceptable to the Borrower (so long as no Event of Default has occurred and is
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continuing). Upon the acceptance of any appointment as Agent hereunder by a successor Agent, such successor Agent shall thereupon succeed to and become vested with all rights, powers, privileges and duties of the retiring Agent. After any retiring Agent’s resignation hereunder as Agent, the provisions of this Section 12.11 shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as Agent. If no successor has accepted appointment as Agent by the date which is thirty (30) days following a retiring Agent’s notice of resignation, the retiring Agent’s resignation shall nevertheless thereupon become effective and the Required Lenders shall perform all of the duties of the Agent hereunder until such time, if any, as the Required Lenders appoint a successor agent as provided for above.
Section 12.12    Reimbursement by Holders and Lenders. To the extent that the Borrower for any reason fails to indefeasibly pay any amount required under Section 13.1 or Section 13.12 to be paid by it to the Agent (or any sub-agent thereof), or any Related Party of any of the foregoing, each Holder and Lender severally agrees to pay to the Agent (or any such sub agent) or such Related Party, as the case may be, such Holder’s or Lender’s applicable percentage thereof (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount, provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Agent (or any such sub agent) in its capacity as such, or against any Related Party of any of the foregoing acting for the Agent (or any such sub-agent) in connection with such capacity. For the purposes of this Section 12.12, the “applicable percentage” of a Holder or a Lender shall be the percentage of the total aggregate principal amount of the Notes represented by the Notes held by such Holder or Lender at such time.
Section 12.13    Withholding. To the extent required by any Requirement, Agent may withhold from any payment to any Lender or Holder under a Transaction Document an amount equal to any applicable withholding Tax (including withholding Taxes imposed under Chapters 3 and 4 of Subtitle A of the Code). If the IRS or any other Governmental Authority asserts a claim that Agent did not properly withhold tax from amounts paid to or for the account of any Lender or Holder (because the appropriate certification form was not delivered, was not properly executed, or fails to establish an exemption from, or reduction of, withholding tax with respect to a particular type of payment, or because such Lender or Holder failed to notify Agent or any other Person of a change in circumstances which rendered the exemption from, or reduction of, withholding tax ineffective, failed to maintain a Participant Register or for any other reason), or Agent reasonably determines that it was required to withhold taxes from a prior payment but failed to do so, such Lender or Holder shall promptly indemnify Agent fully for all amounts paid, directly or indirectly, by Agent as tax or otherwise, including penalties and interest, and together with all expenses incurred by Agent, including legal expenses, allocated internal costs and out-of-pocket expenses. Agent may offset against any payment to any Lender or Holder under a Transaction Document, any applicable withholding tax that was required to be withheld from any prior payment to such Lender or Holder but which was not so withheld, as well as any other amounts for which Agent is entitled to indemnification from such Lender or Holder under this Section 12.13.
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Section 12.14    Release of Collateral or Guarantors. Each Lender and Holder hereby consents to the release and hereby directs Agent to release (or, in the case of clause (b)(ii) below, release or subordinate) the following:
(a)    any Subsidiary of the Borrower from its guaranty of any Obligation if all of the Equity Interests of such Subsidiary owned by any Credit Party are sold or transferred in a transaction permitted under the Transaction Documents (including pursuant to a waiver or consent), to the extent that, after giving effect to such transaction, such Subsidiary would not be required to guaranty any Obligations; and
(b)    any Lien held by Agent for the benefit of the Lenders and Holders against (i) any Collateral that is sold, transferred, conveyed or otherwise disposed of by a Credit Party in a transaction permitted by the Transaction Documents (including pursuant to a valid waiver or consent), to the extent all Liens required to be granted in such Collateral pursuant to this Agreement after giving effect to such transaction have been granted, (ii) any property subject to a Lien permitted hereunder in reliance upon clause (xiii) of the definition of Permitted Liens and (iii) all of the Collateral and all Credit Parties, upon (A) indefeasible payment in full in cash of the Obligations (other than any indemnity obligations of any Credit Party under the Transaction Documents that satisfy all of the following conditions: (X) such indemnity obligations are not then due and payable and (Y) such indemnity obligations are obligations for which any events or claims that would give rise thereto are not then pending) under the Transaction Documents and termination of the Transaction Documents (including all commitments (if any) to lend hereunder) and (B) to the extent requested by Agent, receipt by Agent and the Lenders and Holders of liability releases from the Credit Parties each in form and substance acceptable to Agent.
Article 13
MISCELLANEOUS

Section 13.1    Payment of Expenses. The Credit Parties shall reimburse the Agent, the Lenders and the Holders on demand for all reasonable costs and expenses, including, without limitation, legal expenses and reasonable attorneys’ fees (whether for internal or outside counsel), incurred by the Agent, the Lenders and the Holders in connection with (i) the investigation, development, preparation, negotiation, syndication, execution, interpretation or administration of, any modification of any term of or termination of, this Agreement and any other Transaction Document, any commitment or proposal letter therefor, any other document prepared in connection therewith or the consummation and administration of any transaction contemplated therein, ongoing fees and expenses of the Borrower, and any other transactions between the Credit Parties and the Agent, the Lenders and the Holders, including, without limitation, UCC and other public record searches and filings, overnight courier or other express or messenger delivery, appraisal costs, surveys, title insurance and environmental audit or review (including due diligence review) costs; (ii) the collection, protection or enforcement of any rights in or to the Collateral; (iii) the collection of any Obligations; (iv) the administration and enforcement of Agent’s, any Lender’s and any Holder’s rights under this Agreement or any other
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Transaction Document (including, without limitation, any costs and expenses of any third party provider engaged by Agent, the Lenders or the Holders for such purposes, and any costs and expenses incurred in connection with the forbearance of any of the rights and remedies of the Agent, the Lenders and any Holders hereunder); (v) any refinancing or restructuring of the Notes whether in the nature of a “work-out,” in any insolvency or bankruptcy proceeding or otherwise, and whether or not consummated; (vi) the assignment, transfer or syndication of the Notes; and (vii) any liability for any Non-Excluded Taxes, if any, including any interest and penalties, and any finder’s or brokerage fees, commissions and expenses (other than any fees, commissions or expenses of finders or brokers engaged by the Agent, the Lenders and/or the Holders), that may be payable in connection with the purchase of the Notes contemplated by this Agreement and the other Transaction Documents. The Credit Parties shall also pay all normal service charges with respect to all accounts maintained by the Credit Parties with the Lenders and/or the Holders and any additional services requested by the Credit Parties from the Lenders and/or the Holders. All such costs, expenses and charges shall constitute Obligations hereunder, shall be payable by the Credit Parties to the applicable Lenders or Holders on demand, and, until paid, shall bear interest at the highest rate then applicable to the Notes hereunder. Without limiting the foregoing, if (a) any Note is placed in the hands of an attorney for collection or enforcement or is collected or enforced through any legal proceeding or any Holder or Lender otherwise takes action to collect amounts due under such Note or to enforce the provisions of this Agreement or such Note or (b) there occurs any bankruptcy, reorganization, receivership of any Credit Party or other proceedings affecting creditors’ rights and involving a claim under this Agreement or such Note, then the Credit Parties shall pay the costs incurred by such Holder or such Lender for such collection, enforcement or action or in connection with such bankruptcy, reorganization, receivership or other proceeding, including, but not limited to, reasonable attorneys’ fees and disbursements (including such fees and disbursements related to seeking relief from any stay, automatic or otherwise, in effect under any Bankruptcy Law).
Section 13.2    Governing Law; Jurisdiction; Jury Trial. This Agreement shall be a contract made under, and governed and enforced in every respect by, the internal laws of the State of New York, without giving effect to its conflicts of law principles other than §5-1401 and 5-1402 of the New York General Obligations Law. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in New York, New York for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
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CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTIONS CONTEMPLATED HEREBY.
Section 13.3    Counterparts. This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to each other party; provided that a facsimile or .pdf signature shall be considered due execution and shall be binding upon the signatory thereto with the same force and effect as if the signature were an original, not a facsimile or .pdf signature.
Section 13.4    Headings. The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this Agreement.
Section 13.5    Severability. If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of any provision of this Agreement in any other jurisdiction.
Section 13.6    Entire Agreement; Amendments. This Agreement and the other Transaction Documents supersede all other prior oral or written agreements between the Agent, the Holders, the Lenders, the Credit Parties, their Affiliates and Persons acting on their behalf with respect to the matters discussed herein and therein, and this Agreement, the other Transaction Documents and the instruments referenced herein and therein contain the entire understanding of the parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, none of the Credit Parties or the Agent, any Holder or any Lender makes any representation, warranty, covenant or undertaking with respect to such matters. No provision of this Agreement, the Notes or any of the other Transaction Documents may be amended or waived other than by an instrument in writing signed by the Credit Parties and the Agent (provided, that no amendment or waiver hereof shall (a) extend the Maturity Date of any Note (it being agreed that, for purposes of clarification, mandatory redemptions pursuant to Section 2.3(b) may be postponed, delayed, reduced, waived or modified in accordance with Section 2.3(d) or otherwise with the consent of the Agent), (b) decrease the amount or rate of interest (it being agreed that waiver of the Default Rate shall only require the consent of the Agent), premium, principal or other amounts payable hereunder or under any Note or forgive or waive any such payment (it being agreed that mandatory redemptions pursuant to Section 2.3(b) may be postponed, delayed, reduced, waived or modified in accordance with Section 2.3(d) or otherwise with the consent of the Agent), (c) modify this Section 13.6, or (d) disproportionately and adversely affect any Lender or Holder as compared to other Lenders or Holders, in each case, without the consent of all Holders directly affected thereby), and any amendment or waiver to this Agreement made in conformity with the provisions of this Section 13.6 shall be binding on all Lenders and all Holders, as applicable. None of the Credit Parties has, directly or indirectly, made any agreements with the Agent, any Lenders or any Holders relating to the terms or conditions of the transactions contemplated by the Transaction Documents except as set forth in the Transaction Documents. Without limiting the foregoing, each of the Credit Parties confirms that, except as set forth in this Agreement, none of Agent, any Lender or any Holder
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has made any commitment or promise or has any other obligation to provide any financing to the Credit Parties or otherwise.
Section 13.7    Notices. Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile (provided, confirmation of transmission is mechanically or electronically generated and kept on file by the sending party) or e-mail (provided, confirmation of receipt is verified by return email from the receiver or by other written means); or (iii) one Business Day after deposit with an overnight courier service, in each case properly addressed to the party to receive the same. The addresses, facsimile numbers and e-mail addresses for such communications shall be:
If to any of the Guarantors:

c/o Elevate Credit, Inc.
4150 International Plaza, Suite 300
Fort Worth, Texas 76109
USA
Attention:    Chief Executive Officer
Facsimile:    817-546-2700
E-Mail:    jharvison@elevate.com

with a copy (for informational purposes only) to:

Coblentz Patch Duffy & Bass LLP
One Montgomery Street, Suite 3000
San Francisco, California 94104
USA
Telephone:    (415) 391-4800
Facsimile:    (415) 989-1663
Attention:    Paul J. Tauber, Esq.
E-Mail:    pjt@cpdb.com

If to the Borrower:
    
MaplesFS Limited
PO Box 1093
Boundary Hall, Cricket Square
Grand Cayman, KY1-1102
Cayman Islands
Telephone:    (345) 814-5710
Attention:    Andrew Dean, Senior Vice President
E-mail:     Andrew.Dean@maples.com

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If to the Agent:

Victory Park Management, LLC
150 North Riverside Plaza, Suite 5200
Chicago, Illinois 60606
USA
Telephone:     (312) 705-2786
Facsimile:    (312) 701-0794
Attention:     Scott R. Zemnick, General Counsel
E-mail:        szemnick@vpcadvisors.com
with a copy (for informational purposes only) to:

Katten Muchin Rosenman LLP
525 West Monroe Street
Chicago, Illinois 60661
USA
Telephone:    (312) 902-5297 and (312) 902-5495
Facsimile:    (312) 577-8964 and (312) 577-8854
Attention:    Mark R. Grossmann, Esq. and Scott E. Lyons, Esq.
E-mail:        mg@katten.com and scott.lyons@katten.com

If to a Lender, to its address, facsimile number and e-mail address set forth on the Schedule of Lenders, with copies to such Lender’s representatives as set forth on the Schedule of Lenders,
If to a Holder (that is not also a Lender), to the address, facsimile number and e-mail address as such Holder has specified by written notice given to each other party at the time such Holder has become a Holder hereunder,
or to such other address, facsimile number and/or e-mail address and/or to the attention of such other Person as the recipient party has specified by written notice given to each other party five days prior to the effectiveness of such change. Written confirmation of receipt (A) given by the recipient of such notice, consent, waiver or other communication, (B) mechanically or electronically generated by the sender’s facsimile machine containing the time, date, recipient facsimile number and an image of the first page of such transmission or (C) provided by an overnight courier service shall be rebuttable evidence of personal service, receipt by facsimile or receipt from an overnight courier service in accordance with clauses (i), (ii) or (iii) above, respectively.
Section 13.8    Successors and Assigns; Participants. This Agreement shall be binding upon and inure to the benefit of the parties and their respective permitted successors and assigns, including any purchasers of the Notes.  None of the Credit Parties shall assign this Agreement or any rights or obligations hereunder without the prior written consent of Agent, including by way of a Change of Control.  Subject to the provisions of Section 2.7, 2.8 and 2.9 hereof, a Lender or
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Holder may assign some or all of its rights and obligations hereunder in connection with the transfer of any of its Notes to any Person (an “Assignee”), with the prior written consent of the Agent and, so long as no Event of Default exists, the Borrower (which consent of the Borrower shall not be unreasonably withheld, conditioned or delayed and neither of which consents shall be required for an assignment by (i) a Lender to an Assignee that is (A) another Lender or Holder or (B) an Affiliate of such assigning Lender or (ii) a Holder to an Assignee that is (A) another Holder or Lender or (B) an Affiliate of such assigning Holder); provided, however, that the Borrower shall be deemed to have consented to any such assignment unless it shall object thereto by written notice to the Agent within ten (10) Business Days after having received notice thereof. Each such permitted Assignee shall be deemed to be the Lender (or, as provided below, a Holder) hereunder with respect to such assigned rights and obligations, and the Credit Parties shall ensure that such transferee is registered as a Holder and that any Liens on the Collateral shall be for the benefit of such Holder (as well as the other Holders of Notes).  For purposes of clarification, a Lender may assign all or a portion of such Lender’s outstanding Notes (and its corresponding rights and obligations hereunder in connection therewith) with or without an assignment of all or a portion of such Lender’s portion of the applicable Commitments.  Any Assignee of all or a portion of a Lender’s outstanding Notes (and its corresponding rights and obligations hereunder in connection therewith) who shall not have also been assigned all or a portion of such Lender’s Commitment(s) (such assignment, a “Principal Only Assignment”), shall be deemed a “Holder” and not a “Lender” hereunder, and all or such portion of the Notes held by such Lender that shall have been assigned to such Holder pursuant to the Principal Only Assignment shall be evidenced by and entitled to the benefits of this Agreement and, if requested by such Holder, a Note payable to such Holder in an amount equal to the principal amount of outstanding Notes as shall have been assigned to such Holder pursuant to such Principal Only Assignment. For the avoidance of doubt, any Assignee of a Principal Only Assignment shall have no obligation to purchase any Notes.  For purposes of determining whether the Borrower has reached the Maximum Commitment hereunder, any principal amount of Notes outstanding with respect to a Principal Only Assignment shall be included in such determination.  In connection with any permitted assignment by a Holder of some or all of its rights and obligations hereunder, upon the request of such Holder, the Borrower shall cause to be delivered to the Assignee thereof either (i) a letter from Outside Legal Counsel indicating that it may rely upon the opinion letter delivered by it pursuant to Section 5.1(f)(i) or (ii) an opinion from other legal counsel reasonably acceptable to the Assignee to the effect of such opinion letter, in either case dated on or before the effective date of such assignment. Notwithstanding anything in the Transaction Documents to the contrary, (i) no lender to or funding or financing source of a Lender or its Affiliates shall have any obligation to purchase Notes, (ii) there shall be no limitation or restriction or consent right on a Lender's ability to assign or otherwise transfer any Transaction Document, Note or Obligation to an Affiliate or lender or funding or financing source, and (iii) there shall be no limitation or restriction or consent rights on such Affiliates’ or lenders’ or financing or funding sources’ ability to assign or otherwise transfer any Transaction Document, Note or Obligation (or any of its rights thereunder or interest therein).
In addition to the other rights provided in this Section 13.8, each Lender may, without notice to or consent from Agent or the Borrower, sell participations to one or more Persons in or to all or a portion of its rights and obligations under the Transaction Documents (including all its
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rights and obligations with respect to the Notes); provided, however, that, whether as a result of any term of any Transaction Document or of such participation, (i) no such participant shall have a commitment, or be deemed to have made an offer to commit, to purchase Notes hereunder, and, except as may otherwise be provided in the operative documentation governing such participation, none shall be liable for any obligation of such Lender hereunder, (ii) such Lender’s rights and obligations, and the rights and obligations of the Credit Parties and the Agent and other Lenders towards such Lender, under any Transaction Document shall remain unchanged and each other party hereto shall continue to deal solely with such Lender, which shall remain the holder of the applicable Obligations in the Register, except that each such participant shall be entitled to the benefit of Section 2.6; provided, however, that in no case shall a participant have the right to enforce any of the terms of any Transaction Document, and (iii) except as may otherwise be provided in the operative documentation governing such participation, the consent of such participant shall not be required (either directly, as a restraint on such Lender’s ability to consent hereunder or otherwise) for any amendments, waivers or consents with respect to any Transaction Document or to exercise or refrain from exercising any powers or rights such Lender may have under or in respect of the Transaction Documents (including the right to enforce or direct enforcement of the Obligations). Each Lender that sells a participation 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 Notes or other obligations under the Transaction Documents (the “Participant Register”); provided, that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any participant or any information relating to a participant’s interest in any commitments, loans, letters of credit or its other obligations under any Transaction Document) to any Person other than Agent except to the extent that such disclosure is necessary to establish that such commitment, loan, letter of credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations and Sections 163(f), 871(h)(2) and 881(c)(2) of the Code and any related Treasury regulations promulgated thereunder. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, Agent shall have no responsibility for maintaining a Participant Register.
Section 13.9    No Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.
Section 13.10    Survival. The representations, warranties, agreements and covenants of the Credit Parties and the Lenders contained in the Transaction Documents shall survive the Closing. Each Lender and each Holder shall be responsible only for its own agreements and covenants hereunder.
Section 13.11    Further Assurances. Each Credit Party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as any other party may reasonably
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request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.
Section 13.12    Indemnification. In consideration of the Agent’s and each Lender’s execution and delivery of the Transaction Documents and acquisition of the Notes hereunder and in addition to all of the Credit Parties’ other obligations under the Transaction Documents, subject to 956 Limitations, the Credit Parties shall jointly and severally defend, protect, indemnify and hold harmless the Agent, each Lender, each other Holder, each of their respective Affiliates and all of their respective stockholders, equity holders, partners, members, managers, investment managers, officers, directors, employees, principals, advisory board members, and direct or indirect investors and any of the foregoing Persons’ predecessors, successors, assigns, attorneys (up to an aggregate amount of $250,000 pursuant to this Section 13.12 and Section 13.12 in the Republic Financing Agreement, the FinWise Financing Agreement and the Other Financing Agreement) and agents (collectively, the “Indemnitees”) from and against any and all actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages, and expenses in connection therewith (irrespective of whether any such Indemnitee is a party to the action for which indemnification hereunder is sought), and including reasonable attorneys’ fees and disbursements (the “Indemnified Liabilities”), incurred by any Indemnitee as a result of, or arising out of, or relating to (a) any misrepresentation or breach of any representation or warranty made by any Credit Party in this Agreement, any other Transaction Documents or any other certificate, instrument or document contemplated hereby or thereby, (b) any breach of any covenant, agreement or obligation of any Credit Party contained in this Agreement, any other Transaction Documents or any other certificate, instrument or document contemplated hereby or thereby, (c) the present or former status of any Credit Party as a U.S. real property holding corporation for federal income tax purposes within the meaning of Section 897 of the Internal Revenue Code of 1986, as amended, if applicable, (d) the Program and the Requirements and transactions otherwise contemplated by or further described in the Transaction Documents, including, without limitation, as a result of any litigation or administrative proceeding before any court or governmental or administrative body presently pending or threatened against any Indemnitee as a result of or arising from the foregoing, (e) the imposition of any Non-Excluded Taxes imposed on amounts payable under the Transaction Documents paid by such Indemnitee and any liabilities arising therefrom or with respect thereto, whether or not such Non-Excluded Taxes were correctly or legally asserted, (f) any improper use or disclosure or unlawful use or disclosure of Customer Information by a Credit Party or (g) any action, cause of action, suit, claim, demand, request for documents and/or information, regulatory review, subpoena, investigation, inquiry, civil investigatory demand, litigation or proceeding brought or made against such Indemnitee by a third party (including for these purposes a derivative action brought on behalf of any Credit Party) and arising out of or resulting from (i) the execution, delivery, performance or enforcement of this Agreement, any other Transaction Documents or any other certificate, instrument or document contemplated hereby or thereby, (ii) any transaction financed or to be financed in whole or in part, directly or indirectly, with the proceeds of the Notes, or (iii) the status of such Lender or Holder as a lender to the Borrower pursuant to the transactions contemplated by the Transaction Documents. To the extent that the foregoing undertakings by the Credit Parties may be unenforceable for any reason, the Credit Parties shall make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities
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which is permissible under applicable law. No Credit Party shall assert, and each waives, any claim against the Indemnitees on any theory of liability for special, indirect, consequential or punitive damages arising out of, in connection with or as a result of, this Agreement of any of the other Transaction Documents or the transactions contemplated hereby or thereby. The agreements in this Section 13.12 shall survive the payment of the Obligations and the termination of the Commitments, this Agreement and the other Transaction Documents. For the avoidance of doubt, the obligations and agreements of the Credit Parties under this Section 13.12 shall constitute “Obligations” hereunder and the other Transaction Documents.
Section 13.13    No Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party.
Section 13.14    Waiver. No failure or delay on the part of the Agent, any Holder or any Lender in the exercise of any power, right or privilege hereunder or any of the other Transaction Documents shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege.
Section 13.15    Payment Set Aside. To the extent that any of the Credit Parties makes a payment or payments to the Agent, the Holders or the Lenders hereunder or pursuant to any of the other Transaction Documents or the Agent, the Holders or the Lenders enforce or exercise their rights hereunder or thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to any of the Credit Parties, a trustee, receiver or any other Person under any law (including, without limitation, any bankruptcy law, foreign, state or federal law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred.
Section 13.16    Independent Nature of the Lenders’ and the Holders’ Obligations and Rights. The obligations of each Lender and each Holder under any Transaction Document are several and not joint with the obligations of any other Lender or Holder, and no Lender or Holder shall be responsible in any way for the performance of the obligations of any other Lender or Holder under any Transaction Document. Nothing contained herein or in any other Transaction Document, and no action taken by the Agent, any Lender or Holder pursuant hereto or thereto, shall be deemed to constitute the Agent, the Lenders and/or the Holders as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Agent, the Holders and/or the Lenders are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents and each of the Credit Parties acknowledges that the Agent, the Lenders and the Holders are not acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents. Each Lender and each Holder confirms that it has independently participated in the
92

negotiation of the transactions contemplated hereby with the advice of its own counsel and advisors. Each Lender and each Holder shall be entitled to independently protect and enforce its rights, including, without limitation, the rights arising out of this Agreement or out of any other Transaction Documents, and it shall not be necessary for any other Lender or Holder to be joined as an additional party in any proceeding for such purpose.
Section 13.17    Set-off; Sharing of Payments.
(a)    Each of Agent, each Lender, each Holder and each Affiliate (including each branch office thereof) of any of them is hereby authorized, without notice or demand (each of which is hereby waived by each Credit Party), at any time and from time to time during the continuance of any Event of Default and to the fullest extent permitted by applicable Requirements, to set off and apply any and all deposits (whether general or special, time or demand, provisional or final) at any time held and other Indebtedness, claims or other obligations at any time owing by Agent, such Lender, such Holder or any of their respective Affiliates to or for the credit or the account of the Borrower or any other Credit Party against any Obligation of any Credit Party now or hereafter existing, whether or not any demand was made under any Transaction Document with respect to such Obligation and even though such Obligation may be unmatured. No Lender or Holder shall exercise any such right of setoff without the prior consent of Agent. Each of Agent, each Lender and each Holder agrees promptly to notify the Borrower and Agent after any such setoff and application made by such Lender, Holder or its Affiliates; provided, however, that the failure to give such notice shall not affect the validity of such setoff and application. The rights under this Section 13.7(a) are in addition to any other rights and remedies (including other rights of setoff) that Agent, the Lenders, the Holders or their Affiliates, may have.
(b)    If any Lender or Holder, directly or through an Affiliate or branch office thereof, obtains any payment of any Obligation of any Credit Party (whether voluntary, involuntary or through the exercise of any right of setoff or the receipt of any Collateral or “proceeds” (as defined under the applicable UCC) of Collateral) other than pursuant to Sections 2.6 or 13.8 and such payment exceeds the amount such Lender or Holder would have been entitled to receive if all payments had gone to, and been distributed by, Agent in accordance with the provisions of the Transaction Documents, such Lender or Holder shall purchase for cash from other Lenders or Holders such participations in their Obligations as necessary for such Lender or Holder to share such excess payment with such Lenders or Holders to ensure such payment is applied as though it had been received by Agent and applied in accordance with this Agreement (or, if such application would then be at the discretion of the Borrower, applied to repay the Obligations in accordance herewith); provided, however, that (i) if such payment is rescinded or otherwise recovered from such Lender or Holder in whole or in part, such purchase shall be rescinded and the purchase price therefor shall be returned to such Lender or Holder without interest and (ii) such Lender or Holder shall, to the fullest extent permitted by applicable Requirements, be able to exercise all its rights of payment (including the right of setoff) with respect to such participation as fully as if such Lender or Holder were the direct creditor of the applicable Credit Party in the amount of such participation.
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Section 13.18    Limited Recourse and Non-Petition.
(a)    The Secured Parties shall have recourse only to the proceeds of the realization of Collateral once the proceeds have been applied in accordance with the terms of the Pledge and Security Agreement (the “Net Proceeds”). If the Net Proceeds are insufficient to discharge all payments which, but for the effect of this clause, would then be due (the “Amounts Due”), the obligation of the Company shall be limited to the amounts available from the Net Proceeds and no debt shall be owed to the Secured Parties by the Company for any further sum. The Secured Parties shall not take any action or commence any proceedings against the Company to recover any amounts due and payable by the Company under this Agreement except as expressly permitted by the provisions of this Agreement. The Secured Parties shall not take any action or commence any proceedings or petition a court for the liquidation of the Company, nor enter into any arrangement, reorganization or insolvency proceedings in relation to the Company whether under the laws of the Cayman Islands or other applicable bankruptcy laws until after the later to occur of the payment of all of the Amounts Due or the application of all of the Net Proceeds.
(b)    The Secured Parties hereby acknowledge and agree that the Company’s obligations under the Transaction Documents are solely the corporate obligations of the Company, and that the Secured Parties shall not have any recourse against any of the directors, officers or employees of the Company for any claims, losses, damages, liabilities, indemnities or other obligations whatsoever in connection with any transactions contemplated by the Transaction Documents.
Section 13.9    Creditor Debtor Relationship. The relationship between Agent, each Lender and each Holder, on the one hand, and the Credit Parties, on the other hand, is solely that of creditor and debtor. None of the Agent, any Lender or any Holder has any advisory or fiduciary relationship or duty to any Credit Party or to any Credit Party’s business associates arising out of or in connection with, and there is no agency, tenancy or joint venture relationship between the Agent, any Lender or any Holder and the Credit Parties by virtue of, any Transaction Document or any transaction contemplated therein. Nothing contained herein or in any other Transaction Document, and no action taken by the Agent, any Lender or any Holder pursuant hereto or thereto, shall be deemed to constitute the Agent, the Lenders and/or the Holders as a partnership, an association, a joint venture or any other kind of entity with any of the Credit Parties, or create a presumption that the Agent, the Holders and/or the Lenders are in any way acting in concert or as a group with any of the Credit Parties with respect to the transactions contemplated by the Transaction Documents. None of the Agent, any Lender or any Holder has been involved in the structuring, negotiation or implementation of the business of the Credit Parties or given any advice to the Credit Parties or any of the Credit Party’s business associates with respect to the Credit Parties structuring, negotiating, implementing and operating their respective businesses, and the Credit Parties have relied solely on the advice of their own counsel in structuring, negotiating, implementing and operating their respective businesses. Without characterizing the relationship between Agent, each Lender and each Holder, on the one hand, and the Credit Parties, on the other hand, as anything other than that of creditor and debtor, in the event the nature of such relationship between Agent, each Lender and each Holder, on the
94

one hand, and the Credit Parties, on the other hand, shall ever be challenged and recharacterized as an equity, ownership, advisory or any other type of relationship, it is agreed and understood that the Agent, each Lender and each Holder shall solely be considered a passive investor with respect to the Credit Parties.
[Signature Pages Follow]


95

IN WITNESS WHEREOF, each party has caused its signature page to this Financing Agreement to be duly executed as of the date first written above.
BORROWER:

EC SPV, LTD., an exempted company incorporated with limited liability under the laws of the Cayman Islands, as a Borrower



By:        /s/ Andrew Dean                            
Name:    Andrew Dean
Title:    Director



Financing Agreement

IN WITNESS WHEREOF, each party has caused its signature page to this Financing Agreement to be duly executed as of the date first written above.

GUARANTORS:

ELEVATE CREDIT, INC., a Delaware corporation



By:        /s/ Jason Harvison                        
Name: Jason Harvison
Title:    Chief Executive Officer

Financing Agreement

IN WITNESS WHEREOF, each party has caused its signature page to this Financing Agreement to be duly executed as of the date first written above.

GUARANTORS (CONT.), EACH AS AN “ELEVATE CREDIT SUBSIDIARY”:

ELASTIC FINANCIAL, LLC
ELEVATE DECISION SCIENCES, LLC
RISE CREDIT, LLC
FINANCIAL EDUCATION, LLC
ELEVATE CREDIT SERVICE, LLC
RISE SPV, LLC
EF FINANCIAL, LLC
EC FINANCIAL, LLC
ELEVATE COLLECTIONS, LLC

By: Elevate Credit, Inc., as Sole Member of each of the above-named entities


By:        /s/ Jason Harvison                        
Name: Jason Harvison
Title:    Chief Executive Officer

RISE CREDIT SERVICE OF OHIO, LLC
RISE CREDIT SERVICE OF TEXAS, LLC

By: RISE Credit, LLC, as Sole Member of each of the above-named entities
By: Elevate Credit, Inc., as its Sole Member


By:        /s/ Jason Harvison                        
Name: Jason Harvison
Title:    Chief Executive Officer



Financing Agreement

IN WITNESS WHEREOF, the parties hereto have caused this Financing Agreement to be duly executed on the day and year first above written.

Rise Financial, LLC
RISE Credit of Alabama, LLC
RISE Credit of Arizona, LLC
RISE Credit of California, LLC
RISE Credit of Colorado, LLC
RISE Credit of Delaware, LLC
RISE Credit of Florida, LLC
RISE Credit of Georgia, LLC
RISE Credit of Idaho, LLC
RISE Credit of Illinois, LLC
RISE Credit of Kansas, LLC
RISE Credit of Louisiana, LLC
RISE Credit of Mississippi, LLC
RISE Credit of Missouri, LLC
RISE Credit of Nebraska, LLC
RISE Credit of Nevada, LLC
RISE Credit of North Dakota, LLC
RISE Credit of Oklahoma, LLC
RISE Credit of South Carolina, LLC
RISE Credit of South Dakota, LLC
RISE Credit of Texas, LLC
RISE Credit of Tennessee, LLC
RISE Credit of Utah, LLC
RISE Credit of Virginia, LLC
By: RISE SPV, LLC, as Sole Member of each of the above-named entities
By: Elevate Credit, Inc., as its Sole Member



By:        /s/ Jason Harvison                        
Name: Jason Harvison
Title:    President




US_143017890

IN WITNESS WHEREOF, the parties hereto have caused this Financing Agreement to be duly executed on the day and year first above written.
ELASTIC LOUISVILLE, LLC
ELEVATE ADMIN, LLC
ELASTIC MARKETING, LLC
By: Elastic Financial, LLC, as Sole Member of each of the above-named entities
By: Elevate Credit, Inc., as its Sole Member

By:        /s/ Jason Harvison                        
Name: Jason Harvison
Title:    President


EF MARKETING, LLC
By: EF Financial, LLC, as Sole Member of the above-named entity
By: Elevate Credit, Inc., as its Sole Member

By:        /s/ Jason Harvison                        
Name: Jason Harvison
Title:    President


EC MARKETING, LLC
By: EC Financial, LLC, as Sole Member of the above-named entity
By: Elevate Credit, Inc., as its Sole Member

By:        /s/ Jason Harvison                        
Name: Jason Harvison
Title:    President


Financing Agreement

IN WITNESS WHEREOF, each party has caused its signature page to this Financing Agreement to be duly executed as of the date first written above.

AGENT:

VICTORY PARK MANAGEMENT, LLC


By:    /s/ Scott R. Zemnick                    
Name:     Scott R. Zemnick
Title:     Authorized Signatory



Signature Page to Financing Agreement

SCHEDULE OF LENDERS

None.


Schedule - 1

EXHIBIT A
FORM OF SENIOR SECURED TERM NOTE
[_________], 20[__]
Principal: U.S. $[_____]
FOR VALUE RECEIVED, EC SPV, Ltd., an exempted company incorporated with limited liability under the laws of the Cayman Islands (the “Borrower”) hereby promises to pay to [_____] or its registered assigns (the “Holder”) the amount set out above as the Principal or, if less, the aggregate unpaid outstanding principal amount under this Senior Secured Term Note pursuant to the terms of that certain Financing Agreement, dated as of July 31, 2020 by and among the Borrower, Victory Park Management, LLC, as administrative agent and collateral agent (in such capacity, the “Agent”), the other Credit Parties party thereto and the Lenders party thereto (together with all exhibits and schedules thereto and as may be amended, restated, modified and supplemented from time to time the “Financing Agreement”). The Borrower hereby promises to pay accrued and unpaid interest and Prepayment Premium, if any, on the aggregate outstanding principal amount under this Note (as defined below) on the dates, rates and in the manner provided for in the Financing Agreement. This Senior Secured Term Note (including all Notes issued in exchange, transfer, or replacement hereof, this “Note”) is one of the senior secured term Notes issued pursuant to the Financing Agreement (collectively, the “Notes”). Capitalized terms used and not defined herein are defined in the Financing Agreement.
This Note is subject to optional redemption, mandatory prepayment and optional reborrowing on the terms specified in the Financing Agreement, but not otherwise. At any time an Event of Default exists, the aggregate outstanding principal amount under this Note, together with all accrued and unpaid interest and any applicable premium due, if any, may be declared or otherwise become due and payable in the manner, at the price and with the effect, all as provided in the Financing Agreement.
All payments in respect of this Note are to be made in lawful money of the United States of America at the Agent’s office in Chicago, Illinois or at such other place as the Agent or the Holder shall have designated by written notice to the Borrower as provided in the Financing Agreement.
This Note may be offered, sold, assigned or transferred by the Holder as provided in the Financing Agreement.
This Note is a registered Note and, as provided in the Financing Agreement, upon surrender of this Note for registration of transfer, duly endorsed, or accompanied by a written instrument of transfer duly executed, by the registered Holder hereof or such Holder’s attorney duly authorized in writing, a new Note for a like principal amount will be issued to, and registered in the name of, the transferee. Prior to due presentment for registration of transfer, the Borrower may treat the person in whose name this Note is registered as the owner hereof for the purpose of receiving payment and for all other purposes, and the Borrower will not be affected by any notice to the contrary.
US_142989424

This Note shall be made under, and governed and enforced in every respect by, the internal laws of the State of New York, without giving effect to its conflicts of law principles other than §5-1401 and 5-1402 of the New York General Obligations Law. The parties hereto (a) agree that any legal action or proceeding with respect to this Note or any other agreement, document, or other instrument executed in connection herewith, shall be brought in any state or federal court located within New York, New York, (b) irrevocably waive any objections which either may now or hereafter have to the venue of any suit, action or proceeding arising out of or relating to this Note, or any other agreement, document, or other instrument executed in connection herewith, brought in the aforementioned courts, and (c) further irrevocably waive any claim that any such suit, action, or proceeding brought in any such court has been brought in an inconvenient forum.
THE HOLDER AND THE BORROWER IRREVOCABLY WAIVE THE RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING BROUGHT TO ENFORCE ANY PROVISION OF THIS NOTE OR ANY OTHER TRANSACTION DOCUMENT.
[Remainder of Page Intentionally Left Blank; Signature Page Follows]

3


IN WITNESS WHEREOF, the Borrower has caused this Note to be duly executed as of the date set out above.
BORROWER:

EC SPV, LTD., an exempted company incorporated with limited liability under the laws of the Cayman Islands

By:                         
Name:    
Title:








EXHIBIT B
FORM OF PLEDGE AND SECURITY AGREEMENT
This PLEDGE AND SECURITY AGREEMENT, dated as of July 31, 2020 (as amended, restated, supplemented or otherwise modified from time to time, this “Agreement”), is entered into by and among EC SPV, Ltd., an exempted company incorporated with limited liability under the laws of the Cayman Islands (the “Borrower”), Elevate Credit, Inc., a Delaware corporation (“Elevate”), as a Guarantor (as defined in the Financing Agreement described below), the other Guarantors party hereto, Victory Park Management, LLC (“Victory Park”), as the collateral agent (in such capacity, the “Collateral Agent”) for the benefit of the “Secured Parties” (as defined below), and each Person which becomes a party hereto pursuant to the joinder provisions of Section 20 hereof (the Borrower, the Guarantors and such other Persons are collectively referred to as the “Obligors” or individually referred to as an “Obligor”).
WHEREAS:
A.Pursuant to that certain Financing Agreement entered into by and among the Obligors, the Lenders and Holders identified therein and the Collateral Agent (such Lenders, Holders and the Collateral Agent hereinafter collectively referred to as the “Secured Parties”) dated as of even date herewith (as amended, restated, supplemented or otherwise modified from time to time, the “Financing Agreement”) the Lenders have agreed to purchase those certain senior secured term notes issued by the Borrower to the Lenders in the original aggregate principal amount of $100,000,000 (as the same may be amended, restated, supplemented or otherwise modified from time to time, the “Notes”).
B.Pursuant to the Financing Agreement, the Guarantors have agreed to guaranty all Obligations of the Borrower to the Secured Parties under the Notes, the Financing Agreement and the other Transaction Documents.
C.In order to secure the Obligations and as an inducement to the Lenders to purchase the Notes under the Financing Agreement, each Obligor has agreed to enter into this Agreement for the benefit of the Secured Parties.
NOW, THEREFORE, in consideration of the agreements herein contained and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows:
1.CERTAIN DEFINITIONS. As used in this Agreement, the following terms shall have the meanings set forth in this Section 1. Terms used but not otherwise defined in this Agreement that are defined in the UCC shall have the respective meanings given such terms in the UCC (and if such terms are defined in more than one article of the UCC, such terms shall have the meaning given in Article 9 thereof), and capitalized terms not otherwise defined herein shall have the meaning given to them in the Financing Agreement.


(a)“Collateral” means, subject to the exclusions expressly identified in Section 2 hereof, the following property of the Obligors, whether presently owned or existing or hereafter acquired or coming into existence and wherever located, and all additions and accessions thereto and all substitutions and replacements thereof, and all proceeds, products and accounts thereof, including, without limitation, all proceeds from the sale or transfer thereof and of insurance covering the same and of any tort claims in connection therewith:
(i)    all Accounts, Deposit Accounts, Instruments, Documents, Chattel Paper (whether Tangible Chattel Paper or Electronic Chattel Paper), Goods (including Inventory, Equipment, Fixtures and Motor Vehicles), Money, Payment Intangibles, Software, customer lists and other General Intangibles and all Letter-of-Credit Rights;
(ii)    the shares of common stock and preferred stock, or partnership, membership and other ownership interests, now or hereafter owned by the Obligors and not constituting Excluded Equity Interests (collectively, the “Pledged Equity”), and all certificates evidencing the same, together with, in each case, all shares, securities, monies or property representing a dividend on any of the Pledged Equity, or representing a distribution or return of capital upon or in respect of the Pledged Equity, or resulting from a split up, revision, reclassification or other like change of the Pledged Equity or otherwise received in exchange therefor, and any subscription warrants, rights or options issued to the holders of, or otherwise in respect of, the Pledged Equity (the Pledged Equity, together with all other certificates, shares, securities, properties, ownership interests, or moneys, dividends, distributions, returns of capital subscription, warrants, rights or options as may from time to time be pledged hereunder pursuant to this clause being herein collectively called the “Equity Collateral”);
(iii)    all Investment Property, Financial Assets and Securities Accounts not covered by the foregoing clauses (i) and (ii);
(iv)    all Intellectual Property;
(v)    all commercial tort claims now or hereafter described on Schedule C attached hereto;
(vi)    all other tangible and intangible personal property of the Obligors, including all books, correspondence, credit files, records, invoices, tapes, cards, computer runs and other papers and documents owned by the Obligors (including any held for the Obligors by any computer bureau or service company from time to time acting for the Obligors); and
(vii)    all Proceeds and products in whatever form of all or any part of the other Collateral, including all rents, profits, income and benefits and all proceeds of insurance and all condemnation awards and all other compensation for any event of loss with respect to all or any part of the other Collateral (together with
6


all rights to recover and proceed with respect to the same), and all accessions to, substitutions for and replacements of all or any part of the other Collateral.
(b)“Controlled Account” means the bank accounts (including, without limitation, all Deposit Accounts and Securities Accounts) of the Obligors, including without limitation those set forth on Schedule F hereto, but excluding any accounts used exclusively to fund payroll.
(c)“Copyright Licenses” shall mean any and all agreements and licenses to which an Obligor is a party providing for the granting of any right in or to Copyrights or otherwise providing for a covenant not to sue with respect to a Copyright (whether such Obligor is licensee or licensor thereunder).
(d)“Copyrights” shall mean all United States and foreign copyrights owned or licensed by an Obligor (including community designs), including but not limited to copyrights in software (if any) and all rights in and to databases, and all Mask Works (as defined under 17 U.S.C. 901 of the U.S. Copyright Act), whether registered or unregistered, and, with respect to any and all of the foregoing: (i) all registrations and applications therefor, (ii) all extensions and renewals thereof, (iii) all rights corresponding thereto throughout the world, including, without limitation, all moral rights, reversionary interests and termination rights, (iv) all rights to sue for past, present and future infringements thereof and (v) all Proceeds of the foregoing, including, without limitation, licenses, royalties, income, payments, claims, damages and proceeds of suit.
(e)“Event of Default” shall have the meaning ascribed in the Financing Agreement.
(f)“Excluded Equity Interests” means any voting equity interests in excess of 65% of the outstanding voting equity interest of any First Tier Foreign Subsidiary which, pursuant to the terms of the Financing Agreement, is not required to guaranty the Obligations. For the purposes of this definition, “voting equity interest” means, with respect to any issuer, the issued and outstanding shares of each class of equity interest of such issuer entitled to vote (within the meaning of Treasury Regulations § 1.956-2(c)(2)).
(g)“Intellectual Property” shall mean, collectively, the Copyrights, the Copyright Licenses, the Patents, the Patent Licenses, the Trade Secrets, the Trade Secret Licenses, the Trademarks and the Trademark Licenses.
(h)“Obligations” shall have the meaning ascribed in the Financing Agreement.
(i)“Patent Licenses” means all agreements and licenses to which an Obligor is a party providing for the granting of any right in or to Patents or otherwise providing for a covenant not to sue with respect to a Patent (whether such Obligor is licensee or licensor thereunder).
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(j)“Patents” shall mean all United States and foreign patents and certificates of invention, or similar industrial property rights, and applications for any of the foregoing owned or licensed by an Obligor, including, but not limited to: (i) all registrations and applications therefor, (ii) all reissues, divisions, continuations, continuations-in-part, extensions, renewals, and reexaminations thereof, (iii) all rights corresponding thereto throughout the world, (iv) all inventions and improvements described therein, (v) all rights to sue for past, present and future infringements thereof, (vi) all licenses, claims, damages, and proceeds of suit arising therefrom, and (vii) all Proceeds of the foregoing, including, without limitation, licenses, royalties, income, payments, claims, damages, and proceeds of suit.
(k)“Permitted Liens” shall have the meaning ascribed in the Financing Agreement.
(l)“Requirements of Laws” means any U.S. federal, state and local, and any non-U.S. laws, statutes, regulations, rules, codes or ordinances enacted, adopted, issued or promulgated by any Governmental Authority and applicable to an Obligor.
(m)“Trade Secret Licenses” shall mean any and all agreements to which an Obligor is a party providing for the granting of any right in or to Trade Secrets (whether such Obligor is licensee or licensor thereunder).
(n)“Trade Secrets” shall mean all trade secrets and all other confidential or proprietary information and know-how owned by an Obligor whether or not such Trade Secret has been reduced to a writing or other tangible form, including all documents and things embodying, incorporating, or referring in any way to such Trade Secret, including but not limited to: (i) the right to sue for past, present and future misappropriation or other violation of any Trade Secret, and (ii) all Proceeds of the foregoing, including, without limitation, licenses, royalties, income, payments, claims, damages, and proceeds of suit.
(o)“Trademark Licenses” means any and all agreements and licenses to which an Obligor is a party providing for the granting of any right in or to Trademarks or otherwise providing for a covenant not to sue or permitting co-existence with respect to a Trademark (whether such Obligor is licensee or licensor thereunder).
(p)“Trademarks” means United States and foreign trademarks, trade names, corporate names, company names, business names, fictitious business names, Internet domain names, service marks, certification marks, collective marks, logos, other source or business identifiers, designs and general intangibles of a like nature owned or licensed by an Obligor, all registrations and applications for any of the foregoing including, but not limited to: (i) all registrations and applications therefor, (ii) all extensions or renewals of any of the foregoing, (iii) all of the goodwill of the business connected with the use of and symbolized by the foregoing, (iv) the right to sue for past, present and future infringement or dilution of any of the foregoing or for any injury to goodwill, and (v) all
8


Proceeds of the foregoing, including, without limitation, licenses, royalties, income, payments, claims, damages, and proceeds of suit.
(q)“Transaction Documents” shall have the meaning ascribed in the Financing Agreement.
(r)“Unasserted Contingent Obligations” means Obligations for taxes, costs, indemnifications, reimbursements, damages and other liabilities (excluding Obligations in respect of the principal of, and interest and premium (if any) on, and fees and expenses relating to, any Obligation) in respect of which no assertion of liability (whether oral or written) and no claim or demand for payment (whether oral or written) has been made (and, in the case of Obligations for indemnification, no notice for indemnification has been issued by the indemnitee) at such time.
2.GRANT OF SECURITY INTEREST. As an inducement for the Lenders to purchase the Notes, and to secure the complete and timely payment, performance and discharge in full, as the case may be, of all of the Obligations, each Obligor hereby unconditionally and irrevocably pledges, grants and hypothecates to the Collateral Agent for the benefit of the Secured Parties a continuing security interest (the “Security Interest”) in and to, a lien upon and a right of set-off against all of their respective right, title and interest of whatsoever kind and nature in and to the Collateral, but excluding (i) the fees (including for each issuance of Notes) received as a fee for entering into the Transaction Documents and transactions contemplated thereby, standing to the credit of the bank account of the Borrower in the Cayman Islands; (ii) any earnings on clause (i) or proceeds thereof; and (iii) any share capital of the Borrower.
3.REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS OF THE OBLIGOR. Each Obligor represents and warrants to, and covenants and agrees with, the Collateral Agent for the benefit of the Secured Parties as follows:
(a)Such Obligor has the requisite corporate or limited liability company power and authority to enter into this Agreement and otherwise to carry out its obligations hereunder. The execution, delivery and performance by such Obligor of this Agreement and the filings contemplated therein have been duly authorized by all necessary corporate or limited liability company action on the part of such Obligor and no further action is required by such Obligor.
(b)Such Obligor has no place of business or offices where its books of account and records are kept (other than temporarily at the offices of its attorneys or accountants) or places where Collateral is stored or located, except as set forth on Schedule A attached hereto.
(c)Such Obligor is the sole owner of, or possesses adequate rights in, the Collateral, and, except for the Permitted Liens and liens in favor of the Secured Parties, such Collateral is free and clear of any liens, security interests, encumbrances, rights or claims, and such Obligor is fully authorized to grant the Security Interest in and to pledge the Collateral. There is not on file in any governmental or regulatory authority, agency or
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recording office an effective financing statement, security agreement, license or transfer or any notice of any of the foregoing (other than those filed in favor of the Secured Parties) covering or affecting any of the Collateral except for the Permitted Liens and liens in favor of the Secured Parties. So long as this Agreement shall be in effect, such Obligor shall not execute and shall not knowingly permit to be on file in any such office or agency any such financing statement or other document or instrument (except to the extent filed or recorded in favor of the Secured Parties pursuant to the terms of this Agreement and except those arising from the Permitted Liens).
(d)No part of the Intellectual Property owned by such Obligor constituting Collateral has been judged invalid or unenforceable, and to the knowledge of such Obligor, no part of the Intellectual Property licensed by such Obligor constituting Collateral has been judged invalid or unenforceable. Except as disclosed in the Schedules to the Financing Agreement, to the knowledge of such Obligor no written claim has been received by such Obligor that any Intellectual Property or such Obligor’s use of any Intellectual Property violates the intellectual property rights of any third party. There has been no adverse decision to such Obligor’s claim of ownership rights in or rights to use the Intellectual Property owned by such Obligor in any jurisdiction or to such Obligor’s right to keep and maintain the registered Intellectual Property it owns in full force and effect, and to the knowledge of such Obligor, there has been no adverse decision to such Obligor’s claim of rights to use the Intellectual Property licensed by such Obligor in any jurisdiction. Except as disclosed in the Schedules to the Financing Agreement, there is no proceeding pending before any court, judicial body, administrative or regulatory agency, arbitrator or other governmental authority or, to the knowledge of such Obligor, threatened in writing against such Obligor contesting or challenging the validity, scope or enforceability of, or an Obligor’s ownership of or right to use such Intellectual Property.
(e)Such Obligor shall at all times maintain its books of account and records relating to the Collateral at its principal place of business and its Collateral at the locations set forth on Schedule A attached hereto and may not relocate such books of account and records or tangible Collateral unless it delivers to the Collateral Agent at least 30 days prior to such relocation (i) written notice of such relocation and the new location thereof (which must be within the United States) and (ii) evidence that appropriate financing statements under the UCC and other necessary documents have been filed and recorded and other steps have been taken to create in favor of Collateral Agent, for the benefit of itself and the Secured Parties, a valid, perfected and continuing perfected first priority (except for the Permitted Liens) Lien in the Collateral.
(f)This Agreement creates in favor of the Collateral Agent, for itself and on behalf of the Secured Parties, a valid security interest in the Collateral securing the payment and performance of the Obligations and, upon making the filings described in clause (g) below with respect to Collateral that may be perfected by such filing and upon the timely effecting of actions required by applicable law to perfect security interests in other Collateral which actions shall be taken by such Obligor at the request of a Secured
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Party (including, without limitation, the transfer of possession of original certificated securities with respect to Borrower (or any Guarantor that issues original certificated securities), together with appropriate transfer instruments and the delivery of deposit account control agreements), a perfected first priority (except for the Permitted Liens) Lien in such Collateral.
(g)Such Obligor hereby authorizes the Collateral Agent, for itself and on behalf of the Secured Parties, to file one or more financing statements under the UCC, with respect to the Security Interest with the filing and recording agencies in any jurisdiction deemed necessary or desirable in the sole and absolute discretion of the Collateral Agent, and to file the Intellectual Property Security Agreements with the U.S. Patent and Trademark Office or the U.S. Copyright Office as appropriate. Without limiting the foregoing, each Obligor authorizes the Collateral Agent to file the UCC financing statement naming such Obligor as debtor set forth on Exhibit B hereto. Each Obligor irrevocably authorizes the Collateral Agent, for and on behalf of the Secured Parties, at any time and from time to time, to file in any filing office in any jurisdiction, any initial financing statement or amendment thereto that indicates the collateral as “all assets” or “all personal property” of such Obligor or words of similar effect. Such Obligor will pay the cost of filing the same in all public offices wherever the filing is, or is deemed by the Collateral Agent to be, necessary or desirable to effect the rights and obligations provided for herein. Without limiting the generality of the foregoing, but subject to the terms of the Financing Agreement and this Agreement, such Obligor shall pay all fees, taxes and other amounts necessary to maintain the Collateral and the Security Interest hereunder, and such Obligor shall obtain and furnish to the Collateral Agent from time to time, upon demand, such releases and/or subordinations of claims and liens which may be required to maintain the priority of the Security Interest hereunder.
(h)The execution, delivery and performance of this Agreement by such Obligor does not conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any material agreement, credit facility, debt or other instrument (evidencing such Obligor’s debt or otherwise) to which such Obligor is a party or by which any property or asset of such Obligor is bound or affected. No consent (including, without limitation, any consent from any holder of stock or other type of ownership interest, any creditors, or any Governmental Authority that currently regulates the business of such Obligor) is required for such Obligor to enter into and perform its obligations hereunder, other than such consents as shall have previously been obtained.
(i)Such Obligor shall at all times maintain the Liens and Security Interest provided for hereunder as valid and perfected first priority (except for Permitted Liens) Liens and Security Interests in the Collateral in favor of the Collateral Agent until this Agreement and the Security Interest hereunder shall be terminated pursuant to Section 13 hereof. Such Obligor hereby agrees to defend the Liens in favor of the Collateral Agent from and against any and all persons except for the Secured Parties. Such Obligor shall
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safeguard and protect all Collateral for the account of the Secured Parties, subject to ordinary wear and tear, casualty or condemnation.
(j)Except for the Permitted Liens and as expressly permitted under the Financing Agreement, such Obligor will not transfer, pledge, hypothecate, encumber, license, sell or otherwise dispose of any of the Collateral without the prior written consent of the Collateral Agent.
(k)Such Obligor shall keep and preserve its Equipment, Inventory and other tangible Collateral in good condition, repair and order, subject to ordinary wear and tear, casualty or condemnation, and shall not operate or locate any such Collateral (or cause to be operated or located) in any area excluded from insurance coverage or otherwise prohibited by any applicable Requirement of Law.
(l)Such Obligor shall, promptly upon obtaining knowledge thereof, advise the Collateral Agent, in sufficient detail, of any substantial change in the Collateral, and of the occurrence of any event with respect to the Collateral which would have a Material Adverse Effect on the value of the Collateral or on the Secured Parties’ Lien thereon.
(m)Such Obligor shall promptly execute and deliver to the Secured Parties such further deeds, mortgages, fixture filings, assignments, security agreements, financing statements or other instruments, documents, certificates and assurances and take such further action as any Secured Party may from time to time request and may in its sole discretion deem necessary to perfect, protect or enforce its security interest in the Collateral or any additional collateral, including, without limitation, the execution and delivery of separate mortgages and fixture filings, which shall be satisfactory to the Collateral Agent in its sole discretion for real or personal property interest.
(n)Such Obligor shall permit the Secured Parties and their representatives and agents to inspect the Collateral and to make copies of records pertaining to the Collateral in accordance with the terms of the Financing Agreement.
(o)Such Obligor shall take all steps reasonably necessary to diligently pursue and seek to preserve, enforce and collect any rights, claims, causes of action and accounts receivable in respect of the Collateral (subject, in each case, to the sale, settlement or charge off in the ordinary course of business of the Credit Parties of Consumer Loans that are greater than sixty (60) days past due).
(p)Such Obligor shall within three (3) Business Days notify the Collateral Agent in sufficient detail upon becoming aware of any attachment, garnishment, execution or other legal process levied against any Collateral and of any other information received by such Obligor that may materially adversely affect the value of the Collateral, the Security Interest or the rights and remedies of the Secured Parties hereunder.
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(q)All information heretofore, herein or hereafter supplied to the Secured Parties by or on behalf of such Obligor with respect to the Collateral is accurate and complete in all material respects as of the date furnished.
(r)Such Obligor shall, and shall cause its Subsidiaries to, at all times preserve and keep in full force and effect their respective valid existence and good standing and any rights, permits, licenses and franchises material to their businesses.
(s)Such Obligor will not change its name, corporate structure, or identity, or add any fictitious name unless it provides at least thirty (30) days prior written notice to the Collateral Agent of such change and, at the time of such written notification, such Obligor provides any financing statements or fixture filings necessary to perfect and continue perfected the perfected first priority (except for Permitted Liens) Security Interest granted and evidenced by the Security Documents.
(t)Such Obligor may not consign any of its Inventory or sell any of its Inventory on bill and hold, sale or return, sale on approval, or other conditional terms of sale without the consent of the Collateral Agent, which shall not be unreasonably withheld.
(u)Such Obligor may not relocate its chief executive office to a new location without providing thirty (30) days prior written notification thereof to the Collateral Agent and so long as, at the time of such written notification, such Obligor provides any financing statements or fixture filings necessary to perfect and continue perfected the perfected first priority (except for Permitted Liens) Security Interest granted and evidenced by the Security Documents.
(v)Such Obligor’s exact legal name and jurisdiction of organization is set forth in the introduction paragraph of this Agreement.
(w)With respect to the Pledged Companies (as set forth in Schedule D):
(i)    The Obligors shall deliver, or cause to be delivered, all certificates or instruments representing or evidencing the Pledged Equity of the Pledged Companies to the Collateral Agent, which shall be in suitable form for transfer by delivery, or shall be accompanied by duly executed instruments of transfer or assignment in blank, all in form and substance satisfactory to the Collateral Agent, and each Obligor agrees to execute and deliver, or cause to be executed and delivered, to the Collateral Agent with respect to each Pledged Company a Consent, in the form attached hereto as Exhibit A-1, and a Pledge Instruction, in the form attached hereto as Exhibit A-2 and by this reference each made a part hereof.
(ii)    The Collateral Agent shall have the right, at any time in its discretion and without notice to any Obligor, after the occurrence of any Event of Default, to transfer to or to register in the name of the Collateral Agent or any of
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its nominees any or all of such Pledged Equity with respect to such Pledged Companies. The Collateral Agent shall also have the right at any time, in connection with exercising its rights hereunder, to exchange certificates or instruments, if any, representing or evidencing such Pledged Equity for certificates or instruments of smaller or larger denominations provided that the aggregate number of interests on such certificates or instruments issued in exchange thereof shall not exceed the number of interests pledged by the Obligors in the Pledged Companies;
(iii)    in addition, all other steps necessary or advisable under any applicable law to be taken in order to perfect the first priority (except for Permitted Liens) Security Interest granted to Collateral Agent free from adverse claims hereunder shall be taken by or on behalf of each Obligor, including without limitation, any notation on any certificate or instrument representing the Pledged Equity of the Pledged Companies and any notation on any share register or similar document or Instrument;
(iv)    upon the proper filing of UCC financing statements by the Collateral Agent, and/or upon delivery to the Collateral Agent of any issued certificates representing the Pledged Equity of the Pledged Companies and the taking of any other steps that may be required in accordance with this Section 3(w) or otherwise, the pledge of Pledged Equity of the Pledged Companies pursuant to this Agreement creates a valid and perfected first priority (subject only to Permitted Liens) Security Interest free from adverse claims in the Equity Collateral in respect of the Pledged Companies securing the payment of the Obligations for the benefit of the Collateral Agent and the other Secured Parties;
(v)    Schedule D and Schedule E to this Agreement with respect to the Pledged Companies are true and correct and complete; and without limiting the generality of the foregoing, the Pledged Equity set forth opposite such Obligor’s name on Schedule E hereto, constitutes, as of the date hereof, the number of the issued and outstanding equity interests of each Pledged Company indicated on Schedule D hereto, the percentage of each Pledged Company indicated on Schedule E hereto and the Pledged Equity constitutes all of the Equity Interests of any such Pledged Company owned by such Obligor; and
(vi)    Notwithstanding anything to the contrary contained herein, no interest in any limited liability company or limited partnership owned or controlled by any Obligor that constitutes Pledged Equity shall be represented by a certificate unless (i) the limited liability company agreement or partnership agreement expressly provides that such interests shall be a “security” within the meaning of Article 8 of the UCC of the applicable jurisdiction, and (ii) such certificate shall be delivered to the Collateral Agent in accordance with the terms hereof.
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(x)(i)    So long as no Event of Default shall have occurred and be continuing, each applicable Obligor shall be entitled to exercise any and all voting and other rights pertaining to the Pledged Companies, as applicable, or any part thereof for any purpose not inconsistent with the terms of this Agreement and the other Transaction Documents; provided, however, that such Obligor shall not exercise or shall refrain from exercising any such right if such action or inaction could reasonably be expected to have a Material Adverse Effect on the value of the Pledged Companies or any part thereof or be inconsistent with or violate any provisions of this Agreement and the other Transaction Documents.
(ii)    So long as no Event of Default shall have occurred and be continuing, each applicable Obligor shall be entitled to receive all dividends, distributions and payments paid from time to time in respect of the Collateral, Equity Collateral and Pledged Companies to the extent permitted by the Transaction Documents.
(iii)    At any time while an Event of Default has occurred and is continuing, any and all (A) dividends and other distributions paid or payable in cash in respect of any Equity Collateral in connection with a partial or total liquidation or dissolution or in connection with a reduction of capital, capital surplus or paid-in-surplus, and (B) cash paid, payable or otherwise distributed in redemption of, or in exchange for, any Equity Collateral, shall be in each case forthwith delivered to the Collateral Agent, to hold and shall, if received by an Obligor, be received in trust for the benefit of the Collateral Agent and the Secured Parties, be segregated from the other property or funds of such Obligor, and be forthwith delivered to the Collateral Agent in the same form as so received (with any necessary endorsement).
(iv)    All dividends or other distributions which are received by an Obligor contrary to the provisions of this Section 3(x) shall be received in trust for the benefit of the Collateral Agent and the Secured Parties, shall be segregated from other funds of such Obligor and shall be forthwith paid over to the Collateral Agent in the same form as so received (with any necessary endorsement).
(v)    Subject to the provisions of Section 4 hereof, upon the occurrence and during the continuance of an Event of Default, (A) all voting and other rights of an Obligor which it would otherwise be entitled to exercise pursuant to Section 3(x)(i) shall cease, and all such rights shall automatically thereupon (unless expressly waived in writing by the Collateral Agent) become vested in the Collateral Agent for the benefit of itself and the Secured Parties, which shall (unless expressly waived in writing by the Collateral Agent) thereupon have the sole right to exercise such rights in accordance with Article 5 hereof, and (B) all cash dividends or other distributions payable in respect of the Pledged Companies shall be paid to the Collateral Agent, for the benefit of itself and the Secured
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Parties and such Obligor’s right to receive such cash payments pursuant to Sections 3(x)(ii) and 3(x)(iii) hereof shall immediately and automatically cease.
(y)Schedule F attached hereto correctly sets forth all Controlled Accounts of each Obligor as of the date hereof. Each Obligor agrees that (i) it shall not create any new Controlled Account, unless prior to (or concurrently therewith) it has entered into an account control agreement for such Controlled Account in form and substance reasonably satisfactory to the Collateral Agent, and (ii) no proceeds of any Accounts will be deposited in or at any time transferred to any Controlled Account other than a Controlled Account governed by an account control agreement in form and substance reasonably satisfactory to the Collateral Agent.
(z)Except as set forth on Schedule G attached hereto, Obligor owns no motor vehicles for which a certificate of title has been issued or for which a certificate of title is required by law and upon acquiring any such motor vehicle each Obligor shall, at the request of the Collateral Agent, cause the Collateral Agent to be noted as the first lienholder on the certificate of title.
(aa)With respect to any Intellectual Property hereafter owned or acquired which is registered or for which registration is sought, such Obligor shall promptly (and in any event, within 30 days of Obligor acquiring such Intellectual Property) file, in appropriate form for recordation, an Intellectual Property Security Agreement covering such Intellectual Property with the U.S. Patent and Trademark Office or the U.S. Copyright Office, as applicable; provided that, the foreign equivalents of such filings shall be required only to the extent requested by Collateral Agent.
(bb)
(i)    If any amount payable under or in connection with any Collateral owned by such Obligor shall be or become evidenced by an instrument or Tangible chattel paper, such Obligor shall mark all such instruments and Tangible Chattel Paper with the following legend: “This writing and the obligations evidenced or secured hereby are subject to the security interest of Victory Park Management, LLC, as Collateral Agent” and, at the request of the Collateral Agent, shall immediately deliver such instrument or Tangible Chattel Paper to the Collateral Agent, duly indorsed in a manner satisfactory to the Collateral Agent. Notwithstanding the foregoing, so long as no Event of Default shall have occurred and be continuing, such Obligor may retain for collection in the ordinary course of business any instrument received for payment in the ordinary course of business, and the Collateral Agent shall, within reasonable time upon request of the Obligor, make appropriate arrangements for making any instrument or Tangible Chattel Paper delivered by Obligor available to Obligor for purposes of presentation, collection or renewal (any such arrangement to be effected, to the extent deemed appropriate by Collateral Agent, against trust receipts or like document).
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(ii)    Such Obligor shall not grant “control” (within the meaning of such term under Article 9-106 of the UCC) over any investment property to any Person other than the Collateral Agent, a securities intermediary or a commodity intermediary.
(iii)    If any amount payable under or in connection with any Collateral owned by such Obligor shall be or become evidenced by Electronic Chattel Paper, such Obligor shall take all steps requested by Collateral Agent after notification by Obligor of ownership of such Collateral, to grant the Collateral Agent control of all such Electronic Chattel Paper for the purposes of Section 9-105 of the UCC (or any similar section under any equivalent UCC) and all “transferable records” as defined in each of the Uniform Electronic Transactions Act and the Electronic Signatures in Global and National Commerce Act.
(cc)    Any default in the observance or performance by such Obligor of any covenant, condition or agreement contained herein, subject to applicable cure periods, if any, shall constitute an Event of Default to the extent provided in the Financing Agreement.
4.DUTY TO HOLD IN TRUST. Upon the occurrence and during the continuance of any Event of Default, the Obligors shall, upon receipt of any revenue, income or other sums subject to the Security Interest, whether payable pursuant to the Financing Agreement, the Notes or otherwise, or of any check, draft, note, trade acceptance or other instrument evidencing an obligation to pay any such sum, hold the same in trust for the Collateral Agent on behalf of the Secured Parties and shall forthwith endorse and transfer any such sums or instruments, or both, to the Collateral Agent on behalf of the Secured Parties (pro rata in accordance with the then outstanding principal amount of Notes held by each) for application to the satisfaction of the Obligations.
5.RIGHTS AND REMEDIES UPON DEFAULT. Upon the occurrence and during the continuance of any Event of Default, the Collateral Agent, for itself and behalf of each Secured Party, shall have the right to exercise all of the remedies conferred hereunder and under the Financing Agreement and the Notes, at law and in equity, and the Collateral Agent, for itself and on behalf of each Secured Party, shall have all the rights and remedies of a secured party under the UCC. Without limitation, the Collateral Agent shall also have the following rights and powers:
(a)The Collateral Agent shall have the right to take possession of the Collateral and, for that purpose, enter (with respect to leased premises, to the extent permitted by the owner thereof), with the aid and assistance of any person, any premises where the Collateral, or any part thereof, is or may be placed and remove the same, and the Obligors shall assemble the Collateral and make it available to the Collateral Agent at places which the Collateral Agent shall reasonably select, whether at the Obligors’ premises or elsewhere, and make available to the Collateral Agent, without rent paid by the Collateral Agent, all of the Obligors’ respective premises and facilities for the
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purpose of the Collateral Agent taking possession of, removing or putting the Collateral in saleable or disposable form.
(b)The Collateral Agent shall have the right to operate the business of the Obligors using the Collateral and shall have the right to assign, sell, lease or otherwise dispose of and deliver all or any part of the Collateral, at public or private sale or otherwise, either with or without special conditions or stipulations, for cash or on credit or for future delivery, in such parcel or parcels and at such time or times and at such place or places, and upon such terms and conditions as the Collateral Agent may deem commercially reasonable and in accordance with all applicable laws, all without (except as shall be required by applicable statute and cannot be waived) advertisement or demand upon or notice to the Obligors or right of redemption of the Obligors, which are hereby expressly waived. Upon each such sale, lease, assignment or other transfer of Collateral, the Collateral Agent may, unless prohibited by applicable law which cannot be waived, purchase all or any part of the Collateral being sold, free from and discharged of all trusts, claims, right of redemption and equities of the Obligors, which are hereby waived and released.
(c)Each of the Obligors agrees that, upon the occurrence and during the continuance of an Event of Default, Collateral Agent shall have the absolute right to seek the immediate appointment of a receiver for all or any portion of the Collateral and/or any other real or personal property of the Obligors given as security for the payment and performance of the Obligors’ obligations under this Agreement, the Notes, the Financing Agreement and the other Transaction Documents. Such right to the appointment of a receiver for the assets of the Obligors shall exist regardless of the value of the security for the amounts due under the Notes or secured hereby or of the solvency of any party bound for the payment of such indebtedness. Obligors hereby irrevocably consent to such appointment and, upon the occurrence of an Event of Default under Section 10.1(c) or Section 10.1(d) of the Financing Agreement, waive notice of any application thereof, and agree that such appointment may be made by Collateral Agent on an ex parte basis.
6.PLEDGED EQUITY. Each Obligor recognizes that, by reason of certain prohibitions contained in the 1933 Act and applicable state securities laws, the Collateral Agent may be compelled, with respect to any sale of all or any part of the Equity Collateral conducted without prior registration or qualification of such Equity Collateral under the 1933 Act and/or such state securities laws, to limit purchasers to those who will agree, among other things, to acquire the Equity Collateral for their own account, for investment and not with a view to the distribution or resale thereof. Each Obligor acknowledges that any such private sale may be at prices and on terms less favorable than those obtainable through a public sale without such restrictions (including a public offering made pursuant to a registration statement under the 1933 Act) and, notwithstanding such circumstances, each Obligor agrees that any such private sale shall be deemed to have been made in a commercially reasonable manner and that the Collateral Agent shall have no obligation to engage in public sales and no obligation to delay the sale of any Equity Collateral for the period of time necessary to permit the issuer thereof to register it for a form of public sale requiring registration under the 1933 Act or under applicable state securities
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laws, even if such issuer would, or should, agree to so register it. If the Collateral Agent determines to exercise its right to sell any or all of the Equity Collateral, upon written request, each Obligor shall and shall cause each issuer of any Equity Collateral to be sold hereunder, each partnership and each limited liability company from time to time to furnish to the Collateral Agent all such information as the Collateral Agent may request in order to determine the number and nature of interest, shares or other instruments included in the Equity Collateral which may be sold by the Collateral Agent in exempt transactions under the 1933 Act and the rules and regulations of the SEC thereunder, as the same are from time to time in effect.
7.GRANT OF INTELLECTUAL PROPERTY LICENSE. For the purpose of enabling the Collateral Agent, during the continuance of an Event of Default, to exercise rights and remedies under Sections 5 and 8 hereof at such time as the Collateral Agent shall be lawfully entitled to exercise such rights and remedies, and for no other purpose, each Obligor hereby (a) grants to the Collateral Agent, to the extent not prohibited under any applicable third party agreements or any applicable law, a non-exclusive license (exercisable without payment of royalty or other compensation to such Obligor) to such rights as each Obligor has to use, license or sublicense any of the Intellectual Property now owned or hereafter acquired by such Obligor, wherever the same may be located, and including in such license access to all media in which any of such Intellectual Property may be recorded or stored and to all computer programs used for the compilation or printout hereof, subject, in the case of Trademarks, to sufficient rights to quality control and inspection in favor of such Obligor to avoid the risk of invalidation of said Trademarks, and (b) irrevocably agrees that the Collateral Agent may sell any of such Obligor’s Inventory directly to any person, including without limitation persons who have previously purchased such Obligor’s Inventory from such Obligor and in connection with any such sale or other enforcement of the Collateral owned by or licensed to such Obligor and any Inventory that is covered by any Copyright owned by or licensed to such Obligor, the Collateral Agent may finish any work in process and affix any Trademark owned by or licensed to such Obligor and sell such Inventory as provided herein.
8.INTELLECTUAL PROPERTY.
(a)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 shall have the right (but not the obligation) to bring suit or otherwise commence any action or proceeding in the name of any Obligor, the Collateral Agent or otherwise, in the Collateral Agent’s sole discretion, to enforce any Intellectual Property, in which event such Obligor shall, at the request of the Collateral Agent, do any and all lawful acts and execute any and all documents reasonably requested by the Collateral Agent in aid of such enforcement and such Obligor shall promptly, upon demand, reimburse and indemnify the Collateral Agent as provided in Section 10 hereof in connection with the exercise of its rights under this Section, and, to the extent that the Collateral Agent shall elect not to bring suit to enforce any Intellectual Property as
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provided in this Section, each Obligor agrees to use commercially reasonable measures, whether by action, suit, proceeding or otherwise, to prevent the infringement or other violation of any of such Obligor’s rights in the Intellectual Property by others and for that purpose agrees to use commercially reasonable efforts to maintain any action, suit or proceeding against any Person so infringing as shall be necessary to prevent such infringement or violation;
(ii)    upon written demand from the Collateral Agent, each Obligor shall grant, assign, convey or otherwise transfer to the Collateral Agent or such Collateral Agent’s designee all of such Obligor’s right, title and interest in and to the Intellectual Property to the extent such grant, conveyance, assignment or other transfer is not prohibited under the terms of any applicable third party agreements or any applicable law, and shall execute and deliver to the Collateral Agent such documents as are reasonably necessary or appropriate to carry out the intent and purposes of this clause (ii);
(iii)    each Obligor agrees that such an assignment and/or recording shall be applied to reduce the Obligations outstanding only to the extent that the Collateral Agent (or any Secured Party) receives cash proceeds in respect of the sale of, or other realization upon (including any license proceeds under), the Intellectual Property;
(iv)    within five (5) Business Days after written notice from the Collateral Agent, each Obligor shall make available to the Collateral Agent, to the extent within such Obligor’s power and authority, such personnel in such Obligor’s employ on the date of such Event of Default as the Collateral Agent may reasonably designate, by name, title or job responsibility, to permit such Obligor to continue, directly or indirectly, to produce, advertise and sell the products and services sold or delivered by such Obligor under or in connection with the Trademarks and Trademark Licenses, such persons to be available to perform their prior functions on the Collateral Agent’s behalf and to be compensated by the Collateral Agent at such Obligor’s actual cost, consistent with the salary and benefit structure applicable to each as of the date of such Event of Default; and
(v)    the Collateral Agent shall have the right to notify, or upon its written request require each Obligor to notify, any obligors of an Obligor with respect to amounts due or to become due to such Obligor in respect of the Intellectual Property, of the existence of the security interest created herein, to direct such obligors to make payment of all such amounts directly to the Collateral Agent, and, upon such notification and at the expense of such Obligor, to enforce collection of any such amounts and to adjust, settle or compromise the amount or payment thereof, in the same manner and to the same extent as such Obligor might have done; provided that:
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(1)all amounts and proceeds (including checks and other instruments) received by Obligor in respect of amounts due to such Obligor in respect of the Intellectual Property or any portion thereof shall be received in trust for the benefit of the Collateral Agent hereunder, shall be segregated from other funds of such Obligor, and shall be forthwith paid over or delivered to the Collateral Agent in the same form as so received (with any necessary endorsement) to be held as cash Collateral and applied as provided by Section 9 hereof; and
(2)Obligor shall not adjust, settle or compromise the amount or payment of any such amount or release wholly or partly any obligor with respect thereto or allow any credit or discount thereon.
(b)If (i) an Event of Default shall have occurred and, by reason of a written waiver from the Secured Parties, no longer be continuing, (ii) no other Event of Default shall have occurred and be continuing, (iii) an assignment or other transfer to the Collateral Agent of any rights, title and interests in and to the Intellectual Property shall have been previously made and shall have become absolute and effective, and (iv) the Obligations shall not have become immediately due and payable, then upon the written request of any Obligor, the Collateral Agent shall promptly execute and deliver to such Obligor, at such Obligor’s sole cost and expense, such assignments or other documents as may be reasonably necessary to reassign to such Obligor any such rights, title and interests as may have been assigned to the Collateral Agent as aforesaid, subject to any disposition thereof that may have been made by the Collateral Agent; provided, after giving effect to such reassignment, the Collateral Agent’s security interest granted pursuant hereto, as well as all other rights and remedies of the Collateral Agent granted hereunder, shall continue to be in full force and effect; and provided further, the rights, title and interests so reassigned shall be free and clear of any other Liens granted by or on behalf of the Collateral Agent and the Secured Parties.
9.APPLICATIONS OF PROCEEDS. The proceeds of any sale, lease or other disposition of the Collateral hereunder shall be applied first, to the expenses of retaking, holding, storing, processing and preparing for sale, selling, and the like (including, without limitation, any taxes, fees and other costs incurred in connection therewith) of the Collateral, second, to attorneys’ fees and expenses incurred by the Collateral Agent in enforcing its rights hereunder and in connection with collecting, storing and disposing of the Collateral, and then to satisfaction of the Obligations to each Secured Party, and to the payment of any other amounts required by applicable law, after which the Secured Parties shall pay to the Obligor any surplus proceeds. If, upon the sale, license or other disposition of the Collateral, the proceeds thereof are insufficient to pay all amounts to which the Secured Parties are legally entitled, the Obligors will be liable for the deficiency, together with interest thereon, at the Default Rate, and the reasonable fees of any attorneys employed by the Collateral Agent to collect such deficiency. To the extent permitted by applicable law, each Obligor waives all claims, damages and demands against the Secured Parties arising out of the repossession, removal, retention or sale of the Collateral, unless due to the gross negligence or willful misconduct of any Secured Party. All proceeds hereof or
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payments under any of the Transaction Documents shall apply to the Secured Parties on a pro-rata basis, in accordance with the principal amount of the Notes outstanding at the time of such payment.
10.COSTS AND EXPENSES. The Obligors agree to pay all reasonable out-of-pocket fees, costs and expenses incurred in connection with any filing required hereunder, including without limitation, any financing statements pursuant to the UCC, continuation statements, partial releases and/or termination statements related thereto or any expenses of any searches reasonably required by any Secured Party. The Obligors shall also pay all other claims and charges which in the reasonable opinion of the Collateral Agent might prejudice, imperil or otherwise affect the Collateral or the Security Interest therein. The Obligors will also, upon demand, pay to the Collateral Agent the amount of any and all reasonable expenses, including the reasonable fees and expenses of its counsel and of any experts and agents, which the Collateral Agent may incur in connection with (i) the enforcement of this Agreement, (ii) the custody or preservation of, or the sale of, collection from, or other realization upon, any of the Collateral or (iii) the exercise or enforcement of any of the rights of the Secured Parties under the Transaction Documents. Until so paid, any fees payable hereunder shall be added to the principal amount of the Notes and shall bear interest at the Default Rate.
11.RESPONSIBILITY FOR COLLATERAL. The Obligors assume all liabilities and responsibility in connection with all Collateral, and the Obligations shall in no way be affected or diminished by reason of the loss, destruction, damage or theft of any of the Collateral or its unavailability for any reason.
12.SECURITY INTEREST ABSOLUTE. All rights of each Secured Party and all Obligations of the Obligors hereunder shall be absolute and unconditional, irrespective of: (a) any lack of validity or enforceability of this Agreement, the Notes, the other Transaction Documents or any other agreement entered into in connection with the foregoing, or any portion hereof or thereof; (b) any change in the time, manner or place of payment or performance of, or in any other term of, all or any of the Obligations, or any other amendment or waiver of or any consent to any departure from this Agreement, the Notes, the other Transaction Documents or any other agreement entered into in connection with the foregoing; (c) any exchange, release or nonperfection of any of the Collateral, or any release or amendment or waiver of or consent to departure from any other collateral for, or any guaranty, or any other security, for all or any of the Obligations; (d) any action by the Collateral Agent to obtain, adjust, settle and cancel in its sole discretion any insurance claims or matters made or arising in connection with the Collateral; or (e) any other circumstance which might otherwise constitute any legal or equitable defense available to the Obligors, or a discharge of all or any part of the Security Interest granted hereby. Until the Obligations (other than Unasserted Contingent Obligations) shall have been paid and performed in full, the rights of each Secured Party shall continue even if the Obligations are barred for any reason, including, without limitation, the running of the statute of limitations or bankruptcy. Each Obligor expressly waives presentment, protest, notice of protest, demand, notice of nonpayment and demand for performance. In the event that at any time any transfer of any Collateral or any payment received by any Secured Party hereunder shall be deemed by final order of a court of competent jurisdiction to have been a voidable preference or fraudulent
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conveyance under the bankruptcy or insolvency laws of the United States, or shall be deemed to be otherwise due to any party other than any Secured Party, then, in any such event, the Obligors’ obligations hereunder shall survive cancellation of this Agreement, and shall not be discharged or satisfied by any prior payment thereof and/or cancellation of this Agreement, but shall remain a valid and binding obligation enforceable in accordance with the terms and provisions hereof. Each Obligor waives all right to require a Secured Party to proceed against any other person or to apply any Collateral which such Secured Party may hold at any time, or to marshal assets, or to pursue any other remedy. Each Obligor waives any defense arising by reason of the application of the statute of limitations to any obligation secured hereby.
13.TERM OF AGREEMENT. This Agreement and the Security Interest shall terminate on the date on which all Obligations have been paid in full or have been satisfied or discharged in full (except for Unasserted Contingent Obligations). Upon such termination, the Collateral Agent, at the request and at the expense of the Obligors, will join in executing any termination statement with respect to any financing statement or other security document executed and filed pursuant to this Agreement.
14.POWER OF ATTORNEY, FURTHER ASSURANCES.
(a)Each Obligor authorizes the Collateral Agent, and does hereby make, constitute and appoint the Collateral Agent and its respective officers, agents, successors or assigns with full power of substitution, as such Obligor’s true and lawful attorney-in-fact, with power, in the name of the Collateral Agent or such Obligor, after the occurrence and during the continuance of an Event of Default, (i) to endorse any note, checks, drafts, money orders or other instruments of payment (including payments payable under or in respect of any policy of insurance) in respect of the Collateral that may come into possession of the Secured Party, (ii) to sign and endorse any financing statement pursuant to the UCC or any invoice, freight or express bill, bill of lading, storage or warehouse receipts, drafts against Obligors, assignments, verifications and notices in connection with accounts, and other documents relating to the Collateral, (iii) to pay or discharge taxes, liens, security interests or other encumbrances at any time levied or placed on or threatened against the Collateral, (iv) to demand, collect, receipt for, compromise, settle and sue for monies due in respect of the Collateral and (v) generally, to do, at the option of the Collateral Agent, and at the expense of such Obligor, at any time, or from time to time, all acts and things, including without limitation, to sell, transfer, lease, license, pledge, make any agreement with respect to or otherwise deal with the Collateral, which the Collateral Agent reasonably determines to be necessary to protect, preserve and realize upon the Collateral and the Security Interest granted herein in order to effect the intent of this Agreement, the Financing Agreement and the Notes all as fully and effectually as such Obligor might or could do; and such Obligor hereby ratifies all that said attorney shall lawfully do or cause to be done by virtue hereof. This power of attorney is coupled with an interest and shall be irrevocable for the term of this Agreement and thereafter as long as any of the Obligations shall be outstanding (except for Unasserted Contingent Obligations).
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(b)On a continuing basis, each Obligor will make, execute, acknowledge, deliver, file and record, as the case may be, with the proper filing and recording agencies in any jurisdiction, including, without limitation, the jurisdictions indicated on Schedule B attached hereto, all such instruments, and take all such action as may reasonably be deemed necessary or advisable, or as reasonably requested by the Collateral Agent, to perfect the Security Interest granted hereunder and otherwise to carry out the intent and purposes of this Agreement, or for assuring and confirming to the Collateral Agent the grant or perfection of a perfected first priority security interest in all the Collateral under the UCC (subject to Permitted Liens).
(c)Each Obligor hereby irrevocably appoints the Collateral Agent as such Obligor’s attorney-in-fact, with full authority in the place and stead of such Obligor and in the name of such Obligor, from time to time in the Collateral Agent’s discretion, to file, in its sole discretion, one or more financing or continuation statements and amendments thereto, relative to any of the Collateral without the signature of such Obligor where permitted by law.
15.NOTICES. All notices, requests, demands and other communications hereunder shall be subject to the notice provision of the Financing Agreement.
16.OTHER SECURITY. To the extent that the Obligations are now or hereafter secured by property other than the Collateral or by the guarantee, endorsement or property of any other person, firm, corporation or other entity, then the Collateral Agent shall have the right, in its sole discretion, to pursue, relinquish, subordinate, modify or take any other action with respect thereto, without in any way modifying or affecting any Secured Party’s rights and remedies hereunder.
17.LICENSED COLLATERAL. Notwithstanding any other provision contained herein or any of the other Transaction Documents, after the occurrence and during the continuance of an Event of Default, each Obligor hereby agrees that with respect to any part of the Collateral which may require the consent of any third party or third parties in order for such Obligor to transfer and/or convey its interest in and to such Collateral to the Collateral Agent, as may be required in accordance herewith, such Obligor agrees to and shall use commercially reasonable efforts to obtain such consents or approvals in as expedient manner as practicable.
18.AGENCY.
(a)Appointment. The Secured Parties by their acceptance of the benefits of this Agreement, hereby designate Victory Park as the Collateral Agent to act as specified herein. Each Secured Party shall be deemed irrevocably to authorize the Collateral Agent to take such action on its behalf under the provisions of the Agreement and any other Transaction Document and to exercise such powers and to perform such duties hereunder and thereunder as are specifically delegated to or required of the Collateral Agent by the terms hereof and thereof and such other powers as are reasonably incidental thereto. The Collateral Agent may perform any of its duties hereunder by or through its agents or employees.
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(b)Nature of Duties. The Collateral Agent shall have no duties or responsibilities except those expressly set forth herein. Neither the Collateral Agent nor any of its partners, members, shareholders, officers, directors, employees or agents shall be liable for any action taken or omitted by it as such hereunder or in connection herewith or be responsible for the consequence of any oversight or error of judgment or answerable for any loss, unless caused solely by its or their gross negligence or willful misconduct as determined by a final judgment (not subject to further appeal) of a court of competent jurisdiction. The duties of the Collateral Agent shall be mechanical and administrative in nature; the Collateral Agent shall not have by reason of this Agreement or any other Transaction Document a fiduciary relationship in respect of any Obligor or any Secured Party; and nothing in this Agreement or any other Transaction Document, expressed or implied, is intended to or shall be so construed as to impose upon the Collateral Agent any obligations in respect of this Agreement or any other Transaction Document except as expressly set forth herein and therein.
(c)Lack of Reliance on the Collateral Agent. Independently and without reliance upon the Collateral Agent, each Secured Party, to the extent it deems appropriate, has made and shall continue to make (i) its own independent investigation of the financial condition and affairs of the Obligors in connection with such Secured Party’s investment in the Borrower, the creation and continuance of the Obligations, the transactions contemplated by the Transaction Documents, and the taking or not taking of any action in connection therewith, and (ii) its own appraisal of the creditworthiness of the Obligors and their subsidiaries, and of the value of the Collateral from time to time, and the Collateral Agent shall have no duty or responsibility, either initially or on a continuing basis, to provide any Secured Party with any credit, market or other information with respect thereto, whether coming into its possession before any Obligations are incurred or at any time or times thereafter. The Collateral Agent shall not be responsible to any Obligor or any Secured Party for any recitals, statements, information, representations or warranties herein or in any document, certificate or other writing delivered in connection herewith other than representations made by the Collateral Agent related to its status as an accredited investor under federal and state securities laws, or for the execution, effectiveness, genuineness, validity, enforceability, perfection, collectibility, priority or sufficiency of the Agreement or any other Transaction Document, or for the financial condition of any Obligor or the value of any of the Collateral, or be required to make any inquiry concerning either the performance or observance of any of the terms, provisions or conditions of the Agreement or any other Transaction Document, or the financial condition of the Obligors, or the value of any of the Collateral, or the existence or possible existence of any default or Event of Default under this Agreement, the Financing Agreement, the Notes or any of the other Transaction Documents.
(d)Certain Rights of the Collateral Agent. Subject to this Agreement, the Collateral Agent shall have the right to take any action with respect to the Collateral, on behalf of all of the Secured Parties. The Collateral Agent may, but shall not be obligated, to request instructions from the Secured Parties with respect to any material act or action
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(including failure to act) in connection with the Agreement or any other Transaction Document, and shall be entitled to act or refrain from acting in accordance with the instructions of Secured Parties that are the Required Holders; if such instructions are not provided despite the Collateral Agent’s request therefor, the Collateral Agent shall be entitled to refrain from such act or taking such action, and if such action is taken, shall be entitled to appropriate indemnification from the Secured Parties in respect of actions to be taken by the Collateral Agent; and the Collateral Agent shall not incur liability to any person or entity by reason of so refraining. Without limiting the foregoing, (i) no Secured Party shall have any right of action whatsoever against the Collateral Agent as a result of the Collateral Agent acting or refraining from acting hereunder in accordance with the terms of the Agreement or any other Transaction Document, and the Obligors shall have no right to question or challenge the authority of, or the instructions given to, the Collateral Agent pursuant to the foregoing and (ii) the Collateral Agent shall not be required to take any action which the Collateral Agent believes (A) could reasonably be expected to expose it to personal liability or (B) is contrary to this Agreement, the Transaction Documents or applicable law.
(e)Reliance. The Collateral Agent shall be entitled to rely, and shall be fully protected in relying, upon any writing, resolution, notice, statement, certificate, telex, teletype or telecopier message, cablegram, radiogram, order or other document or telephone message signed, sent or made by the proper person or entity, and, with respect to all legal matters pertaining to the Agreement and the other Transaction Documents and its duties thereunder, upon advice of counsel selected by it and upon all other matters pertaining to this Agreement and the other Transaction Documents and its duties thereunder, upon advice of other experts selected by it. Anything to the contrary notwithstanding, the Collateral Agent shall have no obligation whatsoever to any Secured Party to assure that the Collateral exists or is owned by the Obligors or is cared for, protected or insured or that the liens granted pursuant to the Agreement have been properly or sufficiently or lawfully created, perfected, or enforced or are entitled to any particular priority.
(f)Indemnification. To the extent that the Collateral Agent is not reimbursed and indemnified by the Obligors, the Secured Parties will jointly and severally reimburse and indemnify the Collateral Agent, in proportion to principal outstanding amounts of the Notes held at such time, from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever which may be imposed on, incurred by or asserted against the Collateral Agent in performing its duties hereunder or under the Agreement or any other Transaction Document, or in any way relating to or arising out of the Agreement or any other Transaction Document except for those determined by a final judgment (not subject to further appeal) of a court of competent jurisdiction to have resulted solely from the Collateral Agent’s own gross negligence or willful misconduct. Prior to taking any action hereunder as Collateral Agent, the Collateral Agent may require each Secured Party to deposit with it sufficient sums as it determines in good faith is necessary to protect the Collateral Agent for costs and expenses associated with taking such action.
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(g)Resignation by the Collateral Agent.
(i)    The Collateral Agent may resign from the performance of all its functions and duties under the Agreement and the other Transaction Documents at any time by giving thirty (30) days’ prior written notice (as provided in this Agreement) to the Obligors and the Secured Parties. Such resignation shall take effect upon the appointment of a successor Collateral Agent pursuant to clauses (ii) and (iii) below.
(ii)    Upon any such notice of resignation, the Secured Parties, acting by the Required Holders, shall appoint a successor Collateral Agent hereunder.
(iii)    If a successor Collateral Agent shall not have been so appointed within said thirty (30) day notice period, the Collateral Agent shall then appoint a successor Collateral Agent who shall serve as Collateral Agent until such time, if any, as the Secured Parties appoint a successor Collateral Agent as provided above. If a successor Collateral Agent has not been appointed within such thirty (30) day notice period, the Collateral Agent may petition any court of competent jurisdiction or may interplead the Secured Parties in a proceeding for the appointment of a successor Collateral Agent, and all fees, including, but not limited to, extraordinary fees associated with the filing of interpleader and expenses associated therewith, shall be payable by the Secured Parties on demand and shall not be part of the Obligations or otherwise be reimbursable by the Obligors hereunder or under the Transaction Documents.
(iv)    Upon the acceptance of any appointment as Collateral Agent hereunder by a successor Collateral Agent, such successor Collateral Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Collateral Agent and the retiring Collateral Agent shall be discharged from its duties and obligations under the Agreement.  After any retiring Collateral Agent’s resignation or removal hereunder as Collateral Agent, the provisions of the Agreement shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Collateral Agent.
(h)Rights with Respect to Collateral. Each Secured Party agrees with all other Secured Parties and the Collateral Agent (i) that it shall not, and shall not attempt to, exercise any rights with respect to its Security Interest in the Collateral, whether pursuant to any other agreement or otherwise (other than pursuant to this Agreement), or take or institute any action against the Collateral Agent or any of the other Secured Parties in respect of the Collateral or its rights hereunder (other than any such action arising from the breach of this Agreement) and (ii) that such Secured Party has no other rights with respect to the Collateral other than as set forth in this Agreement and the other Transaction Documents.
(i)The Collateral Agent in its Individual Capacity. The Collateral Agent and its Affiliates may purchase notes from, make loans to, issue letters of credit for the
27


account of, accept deposits from and generally engage in any kind of lending or other business with any party and its Affiliates as though the Collateral Agent was not the Collateral Agent hereunder. With respect to any loans, purchases of notes or issuances of credit, if any, made by the Collateral Agent in its capacity as a Holder, the Collateral Agent in its capacity as a Secured Party shall have the same rights and powers under this Agreement and the other Security Documents as any other Secured Parties and may exercise the same as though it were not the Collateral Agent, and the terms “Secured Party” or “Secured Parties” shall include the Collateral Agent in its capacity as a Secured Party.
19.MISCELLANEOUS.
(a)No course of dealing between the Obligors and any Secured Party, nor any failure to exercise, nor any delay in exercising, on the part of any Secured Party, any right, power or privilege hereunder, under the Financing Agreement, the Notes or the other Transaction Documents shall operate as a waiver thereof; nor shall any single or partial exercise of any right, power or privilege hereunder or thereunder preclude any other or further exercise thereof or the exercise of any other right, power or privilege.
(b)All of the rights and remedies of each Secured Party with respect to the Collateral, whether established hereby, under the Financing Agreement, the Notes or the other Transaction Documents or by any other agreements, instruments or documents entered into in connection therewith or by law shall be cumulative and may be exercised singly or concurrently.
(c)This Agreement, along with the other Transaction Documents, constitutes the entire agreement of the parties with respect to the subject matter hereof and is intended to supersede all prior negotiations, understandings and agreements with respect thereto. Except as specifically set forth in this Agreement, no provision of this Agreement may be modified or amended except by a written agreement specifically referring to this Agreement and signed by the parties hereto.
(d)In the event any provision of this Agreement is held to be invalid, prohibited or unenforceable in any jurisdiction for any reason, unless such provision is narrowed by judicial construction, this Agreement shall, as to such jurisdiction, be construed as if such invalid, prohibited or unenforceable provision had been more narrowly drawn so as not to be invalid, prohibited or unenforceable. If, notwithstanding the foregoing, any provision of this Agreement is held to be invalid, prohibited or unenforceable in any jurisdiction, such provision, as to such jurisdiction, shall be ineffective to the extent of such invalidity, prohibition or unenforceability without invalidating the remaining portion of such provision or the other provisions of this Agreement and without affecting the validity or enforceability of such provision or the other provisions of this Agreement in any other jurisdiction.
(e)No waiver of any breach or default or any right under this Agreement shall be considered valid unless in writing and signed by the party giving such waiver, and no
28


such waiver shall be deemed a waiver of any subsequent breach or default or right, whether of the same or similar nature or otherwise.
(f)This Agreement shall be binding upon and inure to the benefit of each party hereto and its successors and assigns.
(g)Each party shall take such further action and execute and deliver such further documents as may be necessary or appropriate in order to carry out the provisions and purposes of this Agreement.
(h)This Agreement shall be a contract made under, and governed and enforced in every respect by, the internal laws of the State of New York, without giving effect to its conflicts of law principles other than §5-1401 and 5-1402 of the New York General Obligations Law. The parties hereto (a) agree that any legal action or proceeding with respect to this Agreement or any other agreement, document, or other instrument executed in connection herewith or therewith, shall be brought in any state or federal court located within New York, New York (b) irrevocably waive any objections which either may now or hereafter have to the venue of any suit, action or proceeding arising out of or relating to the Security Documents, or any other agreement, document, or other instrument executed in connection herewith or therewith, brought in the aforementioned courts, and (c) further irrevocably waive any claim that any such suit, action, or proceeding brought in any such court has been brought in an inconvenient forum.
(i)OBLIGORS AND SECURED PARTIES IRREVOCABLY WAIVE THE RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING BROUGHT TO ENFORCE ANY PROVISION OF THIS AGREEMENT, THE FINANCING AGREEMENT, THE NOTES, OR ANY OTHER TRANSACTION DOCUMENT.
(j)This Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and, all of which taken together shall constitute one and the same Agreement. In the event that any signature is delivered by facsimile transmission, such signature shall create a valid binding obligation of the party executing (or on whose behalf such signature is executed) the same with the same force and effect as if such facsimile signature were the original thereof.
20.JOINDER. In the event a party becomes an Obligor (the “New Obligor”) pursuant to the Joinder Agreement, upon such execution the New Obligor shall be bound by all the terms and conditions hereof to the same extent as though such New Obligor had originally executed this Agreement. The addition of the New Obligor shall not in any manner affect the obligations of the other Obligors hereunder. Each Obligor and Secured Party acknowledges that the schedules and exhibits hereto may be amended or modified in connection with the addition of any New Obligor to reflect information relating to such New Obligor.
21.LIMITED RECOURSE AND NON-PETITION.
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(a)    The Secured Parties shall have recourse only to the proceeds of the realization of Collateral once the proceeds have been applied in accordance with the terms of this Agreement (the “Net Proceeds”). If the Net Proceeds are insufficient to discharge all payments which, but for the effect of this clause, would then be due (the “Amounts Due”), the obligation of the Company shall be limited to the amounts available from the Net Proceeds and no debt shall be owed to the Secured Parties by the Company for any further sum. The Secured Parties shall not take any action or commence any proceedings against the Company to recover any amounts due and payable by the Company under this Agreement except as expressly permitted by the provisions of this Agreement. The Secured Parties shall not take any action or commence any proceedings or petition a court for the liquidation of the Company, nor enter into any arrangement, reorganization or insolvency proceedings in relation to the Company whether under the laws of the Cayman Islands or other applicable bankruptcy laws until after the later to occur of the payment of all of the Amounts Due or the application of all of the Net Proceeds.
(b)    The Secured Parties hereby acknowledge and agree that the Company's obligations under the Transaction Documents are solely the corporate obligations of the Company, and that the Secured Parties shall not have any recourse against any of the directors, officers or employees of the Company for any claims, losses, damages, liabilities, indemnities or other obligations whatsoever in connection with any transactions contemplated by the Transaction Documents.


[Remainder of Page Intentionally Left Blank; Signature Pages Follow]
30



IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed on the day and year first above written.
OBLIGORS:

EC SPV, LTD., an exempted company incorporated with limited liability under the laws of the Cayman Islands.


By:                         
Name:    
Title:    


ELEVATE CREDIT, INC., a Delaware corporation, as a Guarantor


By:                         
Name:    Jason Harvison
Title:    President


31


IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed on the day and year first above written.
OBLIGORS (continued), EACH AS A "GUARANTOR":

ELEVATE FINANCIAL, LLC
ELEVATE DECISION SCIENCES, LLC
RISE CREDIT, LLC
FINANCIAL EDUCATION, LLC
ELEVATE CREDIT SERVICE, LLC
RISE SPV, LLC
EF FINANCIAL, LLC
EC FINANCIAL, LLC
ELEVATE COLLECTIONS, LLC

By: Elevate Credit, Inc., as Sole Member of each of the above-named entities


By:                         
Name:    Jason Harvison
Title:    President
RISE CREDIT SERVICE OF OHIO, LLC
RISE CREDIT SERVICE OF TEXAS, LLC

By: RISE Credit, LLC., as Sole Member of each of the above-named entities

By: Elevate Credit, Inc., as its Sole Member

By:                         
Name:    Jason Harvison
Title:    President

32


IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed on the day and year first above written.
Rise Financial, LLC
RISE Credit of Alabama, LLC
RISE Credit of Arizona, LLC
RISE Credit of California, LLC
RISE Credit of Colorado, LLC
RISE Credit of Delaware, LLC
RISE Credit of Florida, LLC
RISE Credit of Georgia, LLC
RISE Credit of Idaho, LLC
RISE Credit of Illinois, LLC
RISE Credit of Kansas, LLC
RISE Credit of LOUISIANA, LLC
RISE Credit of Mississippi, LLC
RISE Credit of Missouri, LLC
RISE Credit of Nebraska, LLC
RISE Credit of Nevada, LLC
RISE Credit of North Dakota, LLC
RISE Credit of Oklahoma, LLC
RISE Credit of South Carolina, LLC
RISE Credit of South Dakota, LLC
RISE Credit of Texas, LLC
RISE Credit of Tennessee, LLC
RISE Credit of Utah, LLC
RISE Credit of Virginia, LLC

By: RISE SPV, LLC, as Sole Member of each of the above-named entities
By: Elevate Credit, Inc., as its Sole Member


By: ______________________________
Name: Jason Harvison
Title:     President


US_143008235

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed on the day and year first above written.
ELASTIC LOUISVILLE, LLC
ELEVATE ADMIN, LLC
ELASTIC MARKETING, LLC
By: Elastic Financial, LLC, as Sole Member of each of the above-named entities

By: Elevate Credit, Inc., as its Sole Member

By: ______________________________
Name:     Jason Harvison
Title:     President

EF MARKETING, LLC
By: EF Financial, LLC, as Sole Member of the above-named entity

By: Elevate Credit, Inc., as its Sole Member

By: ______________________________
Name:     Jason Harvison
Title:     President

EC MARKETING, LLC
By: EC Financial, LLC, as Sole Member of the above-named entity

By: Elevate Credit, Inc., as its Sole Member

By: ______________________________
Name:     Jason Harvison
Title:     President

Pledge and Security Agreement

COLLATERAL AGENT:

VICTORY PARK MANAGEMENT, LLC, as Collateral Agent

By: __________________________________
Name: Scott R. Zemnick
Title: Authorized Signatory






Pledge and Security Agreement

SCHEDULE A
Principal Places of Business and Other
Collateral Locations of Obligors

1.    Chief Executive Office
All Guarantors have a Chief Executive Office and Principal Place of Business at 4150 International Plaza, Suite 300, Ft. Worth, TX 76109, Tarrant County.

Borrower has its registered office at the offices of Maples FS, PO Box 1093, Queensgate House, Grand Cayman, KY1-1102, Cayman Islands.
2.    Other Collateral Locations
Name of Entity
Complete Address
(including county)
Record Owner Relationship
Elevate Credit Service, LLC
745 Atlantic Ave
Boston, MA 02111
Suffolk County
Iron Mountain Provider
Elevate Credit Service, LLC
5080 Spectrum Drive
Suite 200 West
Addison, TX 75001

COP-Spectrum Center, LLC Lessor (Elevate Credit, Inc.)
Elevate Credit Service, LLC
Torrey Reserve Building 14
11710 El Camino Real
Solana Beach, CA 92130
AAT Torrey 13-14, LLC Lessor (Elevate Credit, Inc.)




SCHEDULE B
Recording Jurisdiction
Obligor Recording Jurisdiction
Elastic, SPV, Ltd. Washington DC
Elastic Financial, LLC Delaware
Elevate Credit, Inc. Delaware
Elevate Credit Service, LLC Delaware
Elevate Decision Sciences, LLC Delaware
RISE Credit, LLC Delaware
RISE SPV, LLC Delaware
Financial Education, LLC Delaware
Rise Financial, LLC Delaware
RISE Credit of Alabama, LLC Delaware
RISE Credit of Arizona, LLC Delaware
RISE Credit of California, LLC Delaware
RISE Credit of Colorado, LLC Delaware
RISE Credit of Delaware, LLC Texas
RISE Credit of Florida, LLC Delaware
RISE Credit of Georgia, LLC Delaware
RISE Credit of Idaho, LLC Delaware
RISE Credit of Illinois, LLC Delaware
RISE Credit of Kansas, LLC Delaware
RISE Credit of Louisiana, LLC Delaware
RISE Credit of Mississippi, LLC Delaware
RISE Credit of Missouri, LLC Delaware
RISE Credit of Nebraska, LLC Delaware
RISE Credit of Nevada, LLC Delaware
RISE Credit of North Dakota, LLC Delaware
RISE Credit of Oklahoma, LLC Delaware
RISE Credit of Texas, LLC Delaware
RISE Credit of Tennessee, LLC Delaware
RISE Credit of South Carolina, LLC Delaware
RISE Credit of South Dakota, LLC Delaware
RISE Credit of Utah, LLC Delaware
RISE Credit of Virginia, LLC Delaware
RISE Credit Service of Ohio, LLC Delaware
RISE Credit Service of Texas, LLC Delaware
Elastic Louisville, LLC Delaware
Elevate Admin, LLC Delaware
Elastic Marketing, LLC Delaware



SCHEDULE C
Commercial Tort Claims

None.


SCHEDULE D
Pledged Companies
Name Sole Member State of Formation Percent of Subsidiary Held
Elastic Financial, LLC Elevate Credit, Inc. Delaware 100%
Elevate Credit Service, LLC Elevate Credit, Inc. Delaware 100%
Elevate Decision Sciences, LLC Elevate Credit, Inc. Delaware 100%
RISE Credit, LLC Elevate Credit, Inc. Delaware 100%
RISE SPV, LLC Elevate Credit, Inc. Delaware 100%
Financial Education, LLC Elevate Credit, Inc. Delaware 100%
Rise Financial, LLC RISE SPV, LLC Delaware 100%
RISE Credit of Alabama, LLC RISE SPV, LLC Delaware 100%
RISE Credit of Arizona, LLC RISE SPV, LLC Delaware 100%
RISE Credit of California, LLC RISE SPV, LLC Delaware 100%
RISE Credit of Colorado, LLC RISE SPV, LLC Delaware 100%
RISE Credit of Delaware, LLC RISE SPV, LLC Texas 100%
RISE Credit of Florida, LLC RISE SPV, LLC Delaware 100%
RISE Credit of Georgia, LLC RISE SPV, LLC Delaware 100%
RISE Credit of Idaho, LLC RISE SPV, LLC Delaware 100%
RISE Credit of Illinois, LLC RISE SPV, LLC Delaware 100%
RISE Credit of Kansas, LLC RISE SPV, LLC Delaware 100%
RISE Credit of Louisiana, LLC RISE SPV, LLC Delaware 100%
RISE Credit of Mississippi, LLC RISE SPV, LLC Delaware 100%
RISE Credit of Missouri, LLC RISE SPV, LLC Delaware 100%
RISE Credit of Nebraska, LLC RISE SPV, LLC Delaware 100%
RISE Credit of Nevada, LLC RISE SPV, LLC Delaware 100%
RISE Credit of North Dakota, LLC RISE SPV, LLC Delaware 100%
RISE Credit of Oklahoma, LLC RISE SPV, LLC Delaware 100%
RISE Credit of Texas, LLC RISE SPV, LLC Delaware 100%
RISE Credit of Tennessee, LLC RISE SPV, LLC Delaware 100%
RISE Credit of South Carolina, LLC RISE SPV, LLC Delaware 100%
RISE Credit of South Dakota, LLC RISE SPV, LLC Delaware 100%
RISE Credit of Utah, LLC RISE SPV, LLC Delaware 100%
RISE Credit of Virginia, LLC RISE SPV, LLC Delaware 100%
RISE Credit Service of Ohio, LLC RISE Credit, LLC Delaware 100%
RISE Credit Service of Texas, LLC RISE Credit, LLC Delaware 100%
Elastic Louisville, LLC Elastic Financial, LLC Delaware 100%
Elevate Admin, LLC
Elastic Financial, LLC Delaware 100%
Elastic Marketing, LLC Elastic Financial, LLC Delaware 100%


US_143008235

SCHEDULE E
Pledged Equity
Obligor Pledged Company Number of Units Pledged Percent of Pledged Interests Certificate No. of Pledged Interests Pledged Interests as % of Total Issued and Outstanding of Pledged Company
Elevate Credit, Inc. Elevate Credit International Limited 650 65% 8 65%
Elevate Credit, Inc. Elastic Financial, LLC 100 100% 2 100%
Elevate Credit, Inc. Elevate Credit Service, LLC 100 100% 2 100%
Elevate Credit, Inc. Elevate Decision Sciences, LLC 100 100% 2 100%
Elevate Credit, Inc. RISE Credit, LLC 100 100% 2 100%
Elevate Credit, Inc. RISE SPV, LLC 100 100% 2 100%
Elevate Credit, Inc. Financial Education, LLC 100 100% 1 100%
RISE SPV, LLC Rise Financial, LLC 100 100% 2 100%
RISE SPV, LLC RISE Credit of Alabama, LLC 100 100% 2 100%
RISE SPV, LLC RISE Credit of Arizona, LLC 100 100% 1 100%
RISE SPV, LLC RISE Credit of California, LLC 100 100% 3 100%
RISE SPV, LLC RISE Credit of Colorado, LLC 100 100% 1 100%
RISE SPV, LLC RISE Credit of Delaware, LLC 100 100% 4 100%
RISE SPV, LLC RISE Credit of Florida, LLC 100 100% 1 100%
RISE SPV, LLC RISE Credit of Georgia, LLC 100 100% 2 100%
RISE SPV, LLC RISE Credit of Idaho, LLC 100 100% 3 100%
RISE SPV, LLC RISE Credit of Illinois, LLC 100 100% 3 100%
RISE SPV, LLC RISE Credit of Kansas, LLC 100 100% 2 100%
RISE SPV, LLC RISE Credit of Louisiana, LLC 100 100% 1 100%
RISE SPV, LLC RISE Credit of Mississippi, LLC 100 100% 2 100%
RISE SPV, LLC RISE Credit of Missouri, LLC 100 100% 3 100%
RISE SPV, LLC RISE Credit of Nebraska, LLC 100 100% 1 100%
RISE SPV, LLC RISE Credit of Nevada, LLC 100 100% 2 100%
RISE SPV, LLC RISE Credit of North Dakota, LLC 100 100% 2 100%
US_143008235

RISE SPV, LLC RISE Credit of Oklahoma, LLC 100 100% 1 100%
RISE SPV, LLC RISE Credit of Texas, LLC 100 100% 1 100%
RISE SPV, LLC RISE Credit of Tennessee, LLC 100 100% 1 100%
RISE SPV, LLC RISE Credit of South Carolina, LLC 100 100% 3 100%
RISE SPV, LLC RISE Credit of South Dakota, LLC 100 100% 3 100%
RISE SPV, LLC RISE Credit of Utah, LLC 100 100% 3 100%
RISE SPV, LLC RISE Credit of Virginia, LLC 100 100% 2 100%
RISE Credit, LLC RISE Credit Service of Ohio, LLC 100 100% 4 100%
RISE Credit, LLC RISE Credit Service of Texas, LLC 100 100% 3 100%
Elastic Financial, LLC Elastic Louisville, LLC 100 100% 2 100%
Elastic Financial, LLC Elevate Admin, LLC 100 100% 3 100%
Elastic Financial, LLC Elastic Marketing, LLC 100 100% 2 100%






SCHEDULE F
Controlled Accounts

Name of Bank
(addresses below)
Name of Entity on the Account Account Name or Description Account Number Type of Account
Republic Bank Elastic, SPV, Ltd Elastic, SPV, Ltd 58237437 Checking
Republic Bank Elastic, SPV, Ltd Elastic, SPV, Ltd 58237690 Checking
Republic Bank Elastic, SPV, Ltd Elastic, SPV, Ltd 58167692 Checking
Plains Capital Bank Rise Credit of Delaware LLC Rise Credit of Delaware LLC 3600007342 Checking
Plains Capital Bank Rise Credit LLC Rise Credit LLC 3600012953 Checking
Plains Capital Bank Rise Financial, LLC PDO Financial, LLC 3600007375 Checking
Plains Capital Bank Rise Credit of Utah Rise Credit of Utah 3600007433 Checking
Plains Capital Bank Rise Credit of Missouri Rise Credit of Missouri 3600007367 Checking
Plains Capital Bank Rise Credit of South Dakota Rise Credit of South Dakota 3600007391 Checking
Plains Capital Bank Rise Credit Service of Ohio Rise Credit Service of Ohio 3600007904 Checking
Plains Capital Bank Elastic Financial LLC Elastic Financial ($25,000 Min) 3600010437 Checking
Plains Capital Bank Rise Credit of South Carolina Rise Credit of South Carolina 3600008159 Checking
Plains Capital Bank Rise Credit of California LLC Rise Credit of California LLC 3600012599 Checking
Plains Capital Bank Rise Credit of Idaho, LLC Rise Credit of Idaho, LLC 3600012680 Checking
Plains Capital Bank Rise Credit of Alabama, LLC Rise Credit of Alabama, LLC 3600013720 Checking
Plains Capital Bank Rise Credit of Nevada, LLC Rise Credit of Nevada, LLC 3600013738 Checking
Plains Capital Bank Rise Credit of Mississippi, LLC Rise Credit of Mississippi, LLC 3600013746 Checking
Plains Capital Bank Rise Credit of Illinois, LLC Rise Credit of Illinois, LLC 3600013753 Checking
Plains Capital Bank Rise Credit of Virginia, LLC Rise Credit of Virginia, LLC 3600013761 Checking
Plains Capital Bank Rise Credit of North Dakota, LLC Rise Credit of North Dakota, LLC 3600015253 Checking
Plains Capital Bank Rise Credit of Arizona, LLC Rise Credit of Arizona, LLC 3600016053 Checking
Plains Capital Bank Rise Credit of Colorado, LLC Rise Credit of Colorado, LLC 3600016061 Checking
Plains Capital Bank Rise Credit of Oklahoma, LLC Rise Credit of Oklahoma, LLC 3600016004 Checking
Plains Capital Bank Rise Credit of Tennessee, LLC Rise Credit of Tennessee, LLC 7528432700 Checking
Plains Capital Bank Elastic Marketing LLC Think@Work LLC 3600015493 Checking
Plains Capital Bank Rise Credit of Kansas LLC Rise Credit of Kansas LLC 3600015477 Checking
Plains Capital Bank Financial Education LLC Financial Education LLC 3600016087 Checking
Plains Capital Bank Rise SPV LLC Rise SPV LLC 3600015550 Checking
Plains Capital Bank Elevate Credit Decision Sciences LLC Elevate Credit Decision Sciences LLC 3600015444 Checking
Plains Capital Bank Elevate Credit, Inc. Elevate Credit Inc Operating Account 3600015279 Checking
Plains Capital Bank Elevate Credit Service, LLC Elevate Credit Service Operating Account 3600015287 Checking
Plains Capital Bank Elevate Credit Service, LLC Elevate Credit Service Payroll Account 3600015295 Checking
Plains Capital Bank Elevate Credit Service, LLC Elevate Credit Service Sec125 Account 3600015303 Checking
Plains Capital Bank Elevate Credit Service, LLC Elevate Credit Service, LLC 8660164400 CD
Plains Capital Bank Rise SPV LLC Rise SPV LLC 7579646500 MMA
Republic Bank Elastic Louisville, LLC Elastic @ Work LLC 57915113 Checking
Republic Bank Elastic Marketing, LLC Elastic Reserve Acct 51222620 Checking
US_143008235

Republic Bank Elevate Admin LLC Elevate@ Work Admin LLC 58237364 Checking
BB&T Bank Elevate Credit Inc Elevate Credit Inc - Operating 1440000702068 Checking
BB&T Bank Elevate Credit Service LLC Elevate Credit Service - Operating 1440000702076 Checking
BB&T Bank Elevate Credit Service LLC Elevate Credit Service - Payroll 1440000702092 Checking
BB&T Bank Elevate Credit Service LLC Elevate Credit Service - Sec125 1440000702106 Checking
BB&T Bank Rise SPV, LLC Rise SPV, LLC 1440000702084 Checking
BB&T Bank Rise Credit of Louisiana LLC Rise Credit of Louisiana LLC 1440000702114 Checking

* This account has a zero balance and is in the process of being closed.

Plains Capital Bank Address:
2323 Victory Avenue, Suite 1400
Dallas, Texas 75219

Republic Bank Address:
601 West Market Street
Louisville, KY 40202

BB&T Bank
200 W 2nd Street
Winston Salem, NC 27101-4019







SCHEDULE G
Motor Vehicles
None.




EXHIBIT A-1
CONSENT
_________________, a _____________ (the “Pledged Company”), hereby consents and agrees to cause to be registered on its books and records the pledge of all of ___________’s (“Obligor”) right, title and interest in and to the Pledged Company (as defined in that certain Security Agreement defined below). The Pledged Company acknowledges that it is familiar with that certain Pledge and Security Agreement by and among EC SPV, Ltd., a Cayman Islands company (the “Borrower”), Elevate Credit, Inc., a Delaware corporation (“Elevate”), as a Guarantor, the other Obligors from time to time party thereto and Victory Park Management, LLC, as collateral agent (the “Collateral Agent”) for the benefit of the “Secured Parties” (as defined therein), dated as of July 31, 2020 (as modified, amended, extended, restated, amended and restated or supplemented from time to time, the “Security Agreement”), and agrees that, without the need for any further consent of any other person, it will abide by all notices and instructions relating to the Pledged Company sent by the Collateral Agent. All notices to the Pledged Company should be sent to its address set forth below. Capitalized terms used herein and not otherwise defined herein shall have the meanings given to such terms in the Security Agreement.
The Pledged Company agrees that all amounts which it may from time to time owe to the Obligor under its organizational documents shall, following written notice by the Collateral Agent to the Pledged Company that an Event of Default has occurred and is continuing, be paid, in immediately available funds, directly to the Collateral Agent without off-set or counterclaim for application on account of the Obligations. In the event the Collateral Agent duly demands payment from the Pledged Company pursuant to the foregoing Security Agreement and the Pledged Company shall fail to make payment thereof within 30 days thereof, the Pledged Company shall pay the Collateral Agent all costs of enforcing the Collateral Agent’s rights against the Pledged Company (including attorney’s and paralegal fees) together with interest at the rate set forth in Notes and/or Financing Agreement on all amounts actually found to be owing to the Collateral Agent from the date of such demand to the date of payment. Any and all payments made by the Pledged Company to the Collateral Agent in accordance with the preceding sentence shall be deemed payments to the Obligor.
[Signature page follows]



IN WITNESS WHEREOF, the Pledged Company has caused this Consent to be duly signed and delivered as of the date first above written.
Pledged Company:
[Pledged Company]

By:                        
Name:                        
Title:                        
Address:
[______________]
Attention: [______________]
Tel. No. [______________]
Fax No. [______________]
E-mail: [______________]
With a copy to:    
[______________]



EXHIBIT A-2
PLEDGE INSTRUCTION
BY THIS PLEDGE INSTRUCTION, dated ________________, 20__, _________ (the “Pledgor”), hereby instructs ________________, a __________ (the “Pledged Company”), to register a pledge in favor of Victory Park Management, LLC, as Collateral Agent (“Collateral Agent”) for itself and the Secured Parties (under and as defined in that certain Pledge and Security Agreement, in the form attached hereto as Annex A (the “Security Agreement”) of all of the Pledgor’s, right, title and interest in and to the Pledged Company, whether now owned or hereafter acquired by the Pledgor (the “Pledged Interest”).
1.    PLEDGE INSTRUCTIONS. The Pledged Company is hereby instructed by the Pledgor to register all of the Pledgor’s right, title and interest in and to all of the Pledgor’s interests and/or pledged interests in the Pledged Company as subject to the Transaction Documents (as defined in the Security Agreement) in favor of the Collateral Agent (in accordance with and subject to the Security Agreement) which, upon such registration, shall become the registered pledgee of the Pledged Interest with all rights incident thereto.
2.    INITIAL TRANSACTION STATEMENT. The Pledged Company is further instructed by the Pledgor to promptly inform the Collateral Agent of the registration of the pledge by sending the transaction statement, in the form attached hereto as Annex A, to Victory Park Management, LLC, as Collateral Agent, 150 North Riverside Plaza, Suite 5200, Chicago, Illinois 60606, Attention: Scott R. Zemnick, General Counsel.
3.    WARRANTIES OF THE PLEDGOR. The Pledgor hereby warrants that (i) the Pledgor is an appropriate person to originate this instruction and (ii) the Pledgor is entitled to effect the instruction contained herein.
[Signature page follows]

US_143008235

IN WITNESS WHEREOF, the Pledgor has caused this Pledge Instruction to be duly signed and delivered as of the date first above written.
Pledgor:
[Pledgor]

By:                        
Name:                        
Title:                        
Address:[______________]
Attention: [______________]
Tel. No. [______________]
Fax No. [______________]
E-mail: [______________]
With a copy to:    
[______________]




ANNEX A
to
Pledge Instruction
Form of Initial Transaction Statement

Victory Park Management, LLC, as Collateral Agent
150 North Riverside Plaza, Suite 5200
Chicago, Illinois 60606
Attention: Scott R. Zemnick, General Counsel

On ______________, 20__, the undersigned, [__________], a [__________] (the “Pledged Company”), caused the pledge of 100% of the interests in the Pledged Company (the “Pledged Interest”) held by [__________], a [__________], in favor of Victory Park Management, LLC, as Collateral Agent, to be registered on the books and records of the Pledged Company. Except for the terms and conditions contained in the [__________] of the Pledged Company, the Pledged Company has no liens, restrictions or adverse claims to which the Pledged Interest is or may be subject, as of the date hereof.
[Pledged Company]

By:                            
    Name:
    Title:



EXHIBIT B
UCC FINANCING STATEMENTS




EXHIBIT C
FORM OF SECRETARY’S CERTIFICATE
The undersigned hereby certifies that he is the duly elected, qualified and acting Secretary of _______________, a ______________ _____________ (the “Company”), and that as such he is authorized to execute and deliver this certificate in the name and on behalf of Company and in connection with the Financing Agreement, dated as of July 31, 2020 by and among the Company, the other Credit Parties party thereto, the Lenders identified therein and Victory Park Management, LLC, as administrative agent and collateral agent for the Lenders and the Holders (the “Financing Agreement”), and further certifies in his official capacity, in the name and on behalf of the Company, the items set forth below. Capitalized terms used but not otherwise defined herein shall have the meaning set forth in the Financing Agreement.
1.    Attached hereto as Exhibit A is a true, correct and complete copy of the resolutions duly adopted by the board of directors or managers (or other governing body) of the Company. Such resolutions have not in any way been amended, modified, revoked or rescinded, have been in full force and effect since their adoption to and including the date hereof, and are now in full force and effect.
2.    Attached hereto as Exhibit B is a true, correct and complete copy of the certificate of formation of the Company, together with any and all amendments thereto currently in effect, and as of the date hereof no action has been taken to further amend, modify or repeal such certificate of formation, the same being in full force and effect in the attached form as of the date hereof.
3.    Attached hereto as Exhibit C is a true, correct and complete copy of the operating agreement or limited liability company agreement of the Company and any and all amendments thereto currently in effect, and as of the date hereof no action has been taken to further amend, modify or repeal such operating agreement or limited liability company agreement, the same being in full force and effect in the attached form as of the date hereof.
4.    Attached hereto as Exhibit D is a certificate from the Secretary of State of the State of Delaware certifying that as of the date thereof, the Company is duly formed under the laws of the State of Delaware and remains an existing limited liability company in good standing under the laws of such state as of such date.
5.    Attached hereto as Exhibit E are certificates evidencing the Company’s qualification as a foreign limited liability company and good standing issued by the Secretary of State (or comparable office) of each jurisdiction in which such Person is qualified to conduct business and failure to so qualify would cause a Material Adverse Effect.


6.    Each person listed below has been duly elected or appointed to the position(s) indicated opposite his name and is duly authorized to sign the Financing Agreement and each of the other Transaction Documents on behalf of the Company, and the signature appearing opposite such person’s name below is such person’s genuine signature.

Name Position
Signature

_________________________
_________________________
_________________________


[Remainder of Page Intentionally Left Blank; Signature Page Follows]



IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of this ___ day of _______.
                        By:                         
                        Name:                         
                        Title: Secretary


I, ______________, as an _______________ of the Company, hereby certify that ________________ is the duly elected, qualified and acting Secretary of the Company and that the signature set forth above is his true signature.
                        By:                         
                        Name:                         
                            Title:                         



Secretary’s Certificate

EXHIBIT D
FORM OF OFFICER’S CERTIFICATE

[_______], 20[_]


    The undersigned, being the duly appointed director of EC SPV, Ltd., an exempted company incorporated with limited liability under the laws of the Cayman Islands (the “Borrower”), hereby represents, warrants and certifies, in his capacity as director of the Borrower, to the Agent, the Holders and the Lenders pursuant to Section 5.1(i) of the Financing Agreement, dated as of the date hereof, by and among the Borrower, the Guarantors party thereto, the Lenders identified therein and Victory Park Management, LLC, as administrative and collateral agent for the Lenders and the Holders (as amended, restated, supplemented or otherwise modified from time to time, the “Financing Agreement”), as follows (capitalized terms used but not otherwise defined herein shall have the meaning set forth in the Financing Agreement):
1.The representations and warranties made by the Borrower in the Transaction Documents are true and correct in all material respects (without duplication of any materiality qualifiers) as of the date when made and as of the date hereof (except for representations and warranties that speak as of a specific date, which are true and correct in all material respects (without duplication of any materiality qualifiers) as of such specific date);
2.The Borrower has performed, satisfied and complied in all respects with the covenants, agreements and conditions required by the Transaction Documents to be performed, satisfied or complied with by them on or prior to the date hereof;
3.The conditions to the Closing specified in Section 5.1 of the Financing Agreement have been satisfied;
4.No action has been taken with respect to any merger, consolidation, liquidation or dissolution of the Borrower or with respect to the sale of substantially all of their assets, nor is any such action pending or contemplated;
5.Since the Diligence Date, there has been no change which has had or could reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect;
6.No Event of Default (or event or circumstance that, with the passage of time, the giving of notice, or both, would become an Event of Default) has occurred and is continuing or will result from the issuance of the Notes at the Closing;
7.After giving effect to the transactions contemplated by the Transaction Documents, the Borrower is not Insolvent; and


8.Attached hereto as Exhibit A are true, correct and complete copies of the documents listed below and such documents have not been rescinded, modified or amended and remain in full force and effect as of the date hereof:
(a)Form Consumer Loan Agreements;
(b)Participation Agreement; and
(c)Program Guidelines.
[Remainder of Page Intentionally Left Blank; Signature Page Follows]



IN WITNESS WHEREOF, the undersigned has executed this certificate in his capacity as director of the Borrower, as of the date first written above.
EC SPV, LTD., an exempted company incorporated with limited liability under the laws of the Cayman Islands

By:    __________________________________
Name:
Title:    


Officer’s Certificate

Exhibit A to Officer’s Certificate

See attached.







EXHIBIT E
FORM OF COMPLIANCE CERTIFICATE
Reference is made to that certain Financing Agreement, dated as of July 31, 2020 (as modified, amended, extended, restated, amended and restated or supplemented from time to time, the “Financing Agreement”) by and among EC SPV, Ltd., an exempted company incorporated with limited liability under the laws of the Cayman Islands (the “Borrower”), the Guarantors from time to time party thereto, the lenders listed on the Schedule of Lenders attached thereto (each individually, a “Lender” and collectively, the “Lenders”) and Victory Park Management, LLC, as administrative agent and collateral agent (the “Agent”) for the Lenders and the Holders (as defined therein). This certificate (this “Certificate”), together with supporting calculations attached hereto, is delivered to the Agent pursuant to the terms of Section 8.2(c) of the Financing Agreement. Capitalized terms used but not otherwise defined herein shall have the meaning set forth in the Financing Agreement.
Enclosed herewith is a copy of the financial statements that are required to be delivered pursuant to Section 8.2[(a)/(b)] of the Financing Agreement for [calendar month]/[Fiscal Year] ending as of [date of end of period] (the “Computation Date”), which (i) are in accordance with the books and records of the Credit Parties, which have been maintained in such a manner as to permit the preparation of consolidated financial statements in accordance with GAAP, and (ii) are true and correct and fairly present in accordance with GAAP, the financial condition and results of operations of the Credit Parties and their Subsidiaries as of the Computation Date and for the period covered thereby, subject solely in the case of financial statements delivered pursuant to Section 8.2(a) of the Financing Agreement, to normal year-end adjustments and absence of footnote disclosure.
I, [Name of Officer], director of the Borrower, does hereby certify in such capacity, on behalf of the Credit Parties, that (i) the amounts and computations of the covenants set forth in Section 8.1 of the Financing Agreement set forth on Schedule A attached hereto are true and correct, (ii) the Credit Parties are in compliance with each covenant set forth in Article 8 of the Financing Agreement and each representation and warranty contained in Article 7 of the Financing Agreement is true and correct in all material respects (without duplication of any materiality qualifiers contained therein) as though made on such date (except for representations and warranties that speak as of a specific date, which representations and warranties were true and correct in all material respects (without duplication of any materiality qualifiers contained therein) as of such specific date) and (iii) [I have not become aware of any Event of Default (or event or circumstance that, with the passage of time, the giving of notice, or both, would become an Event of Default) that has occurred and is continuing.] [If an Event of Default exists, provide a description of it and the steps, if any, being taken to cure it.]
[Signature Page Follows]


IN WITNESS WHEREOF, the undersigned has signed this Certificate as of this ________ day of __________, 20__.
EC SPV, LTD., an exempted company incorporated with limited liability under the laws of the Cayman Islands, as Borrower

By                         
Name: _______________________________
Title: _______________________________


[Signature Page to Compliance Certificate]

SCHEDULE A

A.    Section 8.1(a) – Loan to Value Ratio
1.    Outstanding principal amount of the Notes as of the date of determination
$        
2.    Aggregate outstanding principal amount of Current Consumer Loans as of the date of determination
$        
3.    Maximum Loan to Value Ratio [0.85]
4.    Product of amounts under 2 + 3
$        
5.    Aggregate unrestricted (it being agreed and acknowledged that cash collateral securing surety bonds and letters of credit posted or maintained by the Credit Parties shall be deemed to be “restricted”) cash and Cash Equivalent Investments of the Credit Parties with respect to which Agent shall have a perfected Lien, in each case, as of the date of determination
$        
6.    Total Value (“Borrowing Base”) (Sum of amounts under 4 + 5) __________
Compliance (i.e. greater than or equal to 1.00 to 1.00?): [YES/NO]
B.    Section 8.01(b) – Corporate Cash
1.    Lowest sum of unrestricted cash and Cash Equivalent Investments of Elevate Credit Parent with respect to which Agent has a perfected Lien since the date of most recently delivered Certificate
$        
2.    Minimum aggregate cash balance required
$        **
** Refer to Section 8.1(b) of Financing Agreement for determination of the minimum amount of Corporate Cash as of the date of measurement.
Compliance: [YES/NO]
C.    Section 8.1(c) – Total Cash


1.    Amount of Total Cash as of the last day of each calendar month
$        
2.    5% of total Receivables of Elevate Credit Parent and its Subsidiaries
$        
Compliance: [YES/NO]
D.    Section 8.1(d) – Book Value of Equity
1.    Total assets of the Credit Parties and their Subsidiaries as of date of determination
$        
2.    Less intangible assets of the Credit Parties and their Subsidiaries as of date of determination
$        
3.    Less total liabilities of the Credit Parties and their Subsidiaries as of date of determination
$        
4.    Book Value of Equity (Amount under 1 minus amount under 2 minus amount under 3)
$        
5.    Minimum required Book Value of Equity $[85,000,000]
Compliance: [YES/NO]
E.    Section 8.1(e) – Past Due Roll Rate
2

1.    Ratio of (i) the aggregate outstanding principal balance of Consumer Loans (a) that have a principal payment that is one or more days past due but not greater than thirty days past due or (b) that did not have a principal payment that is one or more days past due in the calendar month immediately prior to the calendar month that includes the date of determination but became charged off in accordance with the Program Guidelines in the calendar month that includes such date of determination, in each case, in [calendar month that includes the date of this certificate] to (ii) the aggregate outstanding principal balance of Consumer Loans that do not have a principal payment that became one or more days past due or is otherwise charged off in accordance with the Program Guidelines, in each case, as of the last day of the [calendar month immediately prior to the calendar month that includes the date of this certificate]
        

2.    Ratio of (i) the aggregate outstanding principal balance of Consumer Loans (a) that have a principal payment that is one or more days past due but not greater than thirty days past due or (b) that did not have a principal payment that is one or more days past due in the calendar month immediately prior to the calendar month that includes the date of determination but became charged off in accordance with the Program Guidelines in the calendar month that includes such date of determination, in each case, in [calendar month that is one (1) month prior to the calendar month that includes the date of this certificate] to (ii) the aggregate outstanding principal balance of Consumer Loans that do not have a principal payment that became one or more days past due or is otherwise charged off in accordance with the Program Guidelines, in each case, as of the last day of the [calendar month immediately prior to the calendar month that is one (1) month prior to the calendar month that includes the date of this certificate]
        

3.    Average of 1 and 2
4.    Maximum Trailing Past Due Roll Rate [12.5]%
Compliance: [YES/NO]
F.    Section 8.1(f) – Four Month Vintage Charge Off Rate
3

1.    As of [calendar month that includes the date of this certificate] and with respect to any Vintage Pool, the ratio of (i) the aggregate Charge Off amount in such Vintage Pool during the period beginning on the applicable date of origination through the end of the month of such origination and ending on the fourth consecutive calendar month after such month of origination to (ii) the aggregate principal balance of such Vintage Pool at the time of origination.
2.    As of [calendar month immediately prior to the calendar month that includes the date of this certificate] and with respect to any Vintage Pool, the ratio of (i) the aggregate Charge Off amount in such Vintage Pool during the period beginning on the applicable date of origination through the end of the month of such origination and ending on the fourth consecutive calendar month after such month of origination to (ii) the aggregate principal balance of such Vintage Pool at the time of origination.

3.    As of [calendar month two (2) months immediately prior to the calendar month that includes the date of this certificate] and with respect to any Vintage Pool, the ratio of (i) the aggregate Charge Off amount in such Vintage Pool during the period beginning on the applicable date of origination through the end of the month of such origination and ending on the fourth consecutive calendar month after such month of origination to (ii) the aggregate principal balance of such Vintage Pool at the time of origination.
4.    Average of 1, 2 and 3
5.    Maximum Four Month Vintage Charge Off Rate

[9.5]%
Compliance: [YES/NO]
G.    Section 8.1(g) – Twelve Month Vintage Charge Off Rate
1.    As of [calendar month that includes the date of this certificate] and with respect to any Vintage Pool, the ratio of (i) the aggregate Charge Off amount in such Vintage Pool during the period beginning on the applicable date of origination through the end of the month of such origination and ending on the twelfth consecutive calendar month after such month of origination to (ii) the aggregate principal balance of such Vintage Pool at the time of origination
4

2.    As of [calendar month immediately prior to the calendar month that includes the date of this certificate] and with respect to any Vintage Pool, the ratio of (i) the aggregate Charge Off amount in such Vintage Pool during the period beginning on the applicable date of origination through the end of the month of such origination and ending on the twelfth consecutive calendar month after such month of origination to (ii) the aggregate principal balance of such Vintage Pool at the time of origination
3.    As of [calendar month two (2) months immediately prior to the calendar month that includes the date of this certificate] and with respect to any Vintage Pool, the ratio of (i) the aggregate Charge Off amount in such Vintage Pool during the period beginning on the applicable date of origination through the end of the month of such origination and ending on the twelfth consecutive calendar month after such month of origination to (ii) the aggregate principal balance of such Vintage Pool at the time of origination

4.    Average of 1, 2 and 3
5.    Maximum Twelve Month Vintage Charge Off Rate [36]%
Compliance: [YES/NO]
H.    Section 8.1(h) – Excess Spread
1.    As of [calendar month that includes the date of this certificate], the ratio expressed as a percentage of (a) the aggregate amount of interest collections from Consumer Loans less any Charge Offs, in each case, in the calendar month immediately prior to the calendar month that includes such date of determination over (b) the aggregate principal balance of Consumer Loans as of the first day of the calendar month immediately prior to the calendar month that includes such date of determination***

*** Refer to the definition of “Excess Spread” in the Financing Agreement if the date of determination is the last day of the calendar month.
5

2.    As of [calendar month immediately prior to the calendar month that includes the date of this certificate], the ratio of (i) the ratio expressed as a percentage of (a) the aggregate amount of interest collections from Consumer Loans less any Charge Offs, in each case, in the calendar month immediately prior to the calendar month that includes such date of determination over (b) the aggregate principal balance of Consumer Loans as of the first day of the calendar month immediately prior to the calendar month that includes such date of determination
3.    Average of 1 and 2
4.    Minimum Excess Spread [3.00]%
Compliance: [YES/NO]



6


EXHIBIT F
FORM OF NOTICE OF PURCHASE AND SALE
Victory Park Management, LLC,
as Agent under the Financing Agreement described below
_______________ __, ____
Ladies and Gentlemen:
Reference is made to that certain Financing Agreement, dated as of July 31, 2020 (as the same may be amended, restated, supplemented or otherwise modified from time to time, the “Financing Agreement”), among EC SPV, Ltd., an exempted company incorporated with limited liability under the laws of the Cayman Islands (the “Borrower”), the Guarantors party thereto, Victory Park Management, LLC, as Agent, and the Lenders signatory thereto from time to time. Capitalized terms used but not otherwise defined in this letter shall have the meanings given to such terms in the Financing Agreement.
The Borrower hereby gives you irrevocable notice, pursuant to Section 2.1 of the Financing Agreement of its request of an issuance under the Notes (the “Proposed Issuance”) under the Financing Agreement and, in that connection, sets forth the following information:
a.    The amount of the Proposed Issuance is $__________1;
b.    The date of the Proposed Issuance is __________, ____2 (the “Issuance Date”); and
c.    The proceeds of the Proposed Issuance shall be disbursed in accordance with the instructions set forth on Exhibit A attached hereto.
The undersigned hereby certifies that attached hereto as Exhibit B is a true and correct calculation (which calculation shall be in form and substance reasonably acceptable to the Agent) of the Borrowing Base of the Borrower as of a date no earlier than the end of the most recently ended fiscal month and no later than the day immediately preceding the Issuance Date.
The undersigned hereby certifies that the following statements are true and correct on the date hereof and will be true and correct on the Issuance Date, both before and after giving effect to the Proposed Issuance:
1     Must be in increments of not less than $100,000.
2     Must be a Permitted Issuance Date.

7

    i.    Each representation and warranty by each Credit Party contained in the Financing Agreement and in each other Transaction Document are true and correct in all material respects (without duplication of any materiality qualifiers) as of the Issuance Date (subject to such updates to the Schedules, if any, as are approved by the Agent in its reasonable discretion), except to the extent that such representation or warranty expressly relates to an earlier date, including the Closing Date (in which event such representations and warranties were true and correct in all material respects (without duplication of any materiality qualifiers) as of such earlier date);
    ii.    No Event of Default or event or circumstance which, with the giving of notice, the lapse of time, or both, would (if not cured or otherwise remedied during such time) constitute an Event of Default has occurred and is continuing or would result after giving effect to such Proposed Issuance;
    iii.    After giving effect to such Proposed Issuance, the aggregate outstanding principal amount of the Notes does not exceed the Maximum Commitment;
    iv.    The Issuance Date is a Permitted Issuance Date; and
    v.    After giving effect to the Proposed Issuance, the Debt-to-Equity Ratio of the Borrower is not more than 9-to-1.
[Balance of page intentionally left blank; signature page follows.]




EC SPV, LTD., an exempted company incorporated with limited liability under the laws of the Cayman Islands, as the Borrower

By:                        
Name:    
Title:    



Exhibit A to
Notice of Purchase and Sale

Instructions for Disbursement of Proceeds
[Insert]


Exhibit B to
Notice of Purchase and Sale

Calculation of Borrowing Base of Borrower
Borrowing Base as of _________, 20__3
A.    the aggregate balance of Eligible Consumer Loans on such date
$        
B.    Excess Concentration Amounts on such date
$        
C.    (A minus B above) multiplied by 0.85
$        
D.    one hundred percent (100%) of the balance of the unrestricted (it being agreed and acknowledged that cash collateral securing surety bonds and letters of credit posted or maintained by the Borrower shall be deemed to be “restricted”) cash and Cash Equivalent Investments of the Borrower in a Funding Account or Collection Account on such date for which the Agent shall have a first-priority perfected Lien.*
$        
E.    Borrowing Base (Sum of C and D above)
$        
*For purposes of clarification, unrestricted cash includes all cash of the Borrower that is being held by an ACH provider or CC Bank prior to remittance to Borrower but in no circumstances will include any cash or Cash Equivalent Investment deposited in the "Cash Collateral Account" (as defined in the Participation Agreement) so long as such Cash Collateral Account or other account is for the benefit of any Person other than the Agent or the Lenders.


3 To be a date no earlier than the end of the most recently ended fiscal month and no later than the day immediately preceding the Issuance Date.


EXHIBIT G
FORM OF JOINDER AGREEMENT

This JOINDER AGREEMENT (this “Joinder Agreement”) dated as of ________ ___, 20___ is executed by the undersigned for the benefit of Victory Park Management, LLC, as administrative agent and collateral agent (the “Agent”) for the Lenders and the Holders (as defined therein) in connection with that certain Financing Agreement dated as of July 31, 2020 among EC SPV, Ltd., an exempted company incorporated with limited liability under the laws of the Cayman Islands (the “Borrower”), the Guarantors from time to time party thereto, the Lenders party thereto and the Agent (as amended, supplemented or modified from time to time, the “Financing Agreement”), that certain Pledge and Security Agreement dated as of July 31, 2020 among the Borrower, Elevate, the other Guarantors party thereto and the Agent (as amended, supplemented or modified from time to time, the “Pledge and Security Agreement”) and that certain letter agreement dated as of July 31, 2020 among the Borrower, Elevate, the other Assignors party thereto and the Agent (as amended, supplemented or modified from time to time, the “Collateral Assignment”). Capitalized terms not otherwise defined herein are being used herein as defined in the Financing Agreement.
The signatory hereto is required to execute this Joinder Agreement pursuant to Section 8.24 of the Financing Agreement.
NOW THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the undersigned hereby agrees as follows:
1.    The undersigned expressly assumes all the obligations of (a) a Guarantor and a Credit Party under the Financing Agreement, (b) an Obligor under the Pledge and Security Agreement and (c) an Assignor under the Collateral Assignment and agrees that such Person is (x) a Guarantor and a Credit Party under the Financing Agreement and bound as a Guarantor and a Credit Party under the terms of the Financing Agreement, (y) an Obligor under the Pledge and Security Agreement and bound as an Obligor under the terms of the Pledge and Security Agreement and (z) an Assignor under the Collateral Assignment and bound as an Assignor under the terms of the Collateral Agreement, in each case, as if it had been an original signatory to the Financing Agreement, the Pledge and Security Agreement and the Collateral Assignment. Without limiting the generality of the foregoing, as collateral security for the prompt and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of the Obligations, the undersigned hereby mortgages, pledges and hypothecates to the Agent for the benefit of the Secured Parties, and grants to the Agent for the benefit of the Secured Parties, a lien on and security interest in, all of its right, title and interest in, to and under the Collateral of the undersigned subject to the provisions of the Financing Agreement, the Pledge and Security Agreement and the Collateral Assignment.
2.    The information set forth in Annex 1-A to this Joinder Agreement is hereby added to the information set forth in Schedules A through G to the Pledge and Security Agreement.


3.    The undersigned’s address and fax number for notices under the Financing Agreement, the Pledge and Security Agreement and the Collateral Assignment shall be the address and fax number set forth below its signature to this Joinder Agreement.
4.    This Joinder Agreement shall be deemed to be part of, and a modification to, the Financing Agreement, the Pledge and Security Agreement and the Collateral Assignment and shall be governed by all the terms and provisions of the Financing Agreement, the Pledge and Security Agreement and the Collateral Assignment, which shall continue in full force and effect as modified hereby as a valid and binding agreement of the undersigned enforceable against such person or entity. The undersigned hereby waives notice of Agent’s acceptance of this Joinder Agreement. The undersigned will deliver an executed original of this Joinder Agreement to Agent.
5.    The undersigned hereby represents and warrants that each of the representations and warranties contained in the Financing Agreement, the Pledge and Security Agreement and the Collateral Assignment applicable to it is true and correct in all material respects (without duplication of any materiality qualifiers) on and as the date hereof as if made on and as of such date, except to the extent such representations and warranties expressly relate to an earlier date, in which case such representations and warranties were true and correct in all material respects (without duplication of any materiality qualifiers) as of such earlier date.
[Signature Page Follows]




IN WITNESS WHEREOF, the undersigned has caused this Joinder Agreement to be duly executed and delivered by its duly authorized officer as of the day and year first above written.

                    [NEW CREDIT PARTY]

By: _____________________________________
Name: ___________________________________
Title: ____________________________________

Address:    ____________________________
        ____________________________
        Attn: _______________________
        Fax: ________________________





ANNEX 1-A

SCHEDULES TO PLEDGE AND SECURITY AGREEMENT

See attached.




SCHEDULE A
Principal Places of Business and Other
Collateral Locations of Obligors

1.    Chief Executive Office

2.    Other Collateral Locations


SCHEDULE B
Recording Jurisdiction







SCHEDULE C
Commercial Tort Claims




SCHEDULE D
Pledged Companies




SCHEDULE E
Pledged Equity

Obligor Pledged Company Number of Units Pledged Percent of Pledged Interests Certificate No. of Pledged Interests Pledged Interests as % of Total Issued and Outstanding of Pledged Company




SCHEDULE F
Controlled Accounts




SCHEDULE G
Motor Vehicles






EXHIBIT I
FORM OF U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Lenders Relying on the Portfolio Interest Exemption For U.S. Federal Income Tax Purposes)
Reference is hereby made to that certain Financing Agreement, dated as of July 31, 2020 (as modified, amended, extended, restated, amended and restated or supplemented from time to time, the “Financing Agreement”) by and among EC SPV, Ltd., an exempted company incorporated with limited liability under the laws of the Cayman Islands (the “Borrower”), the Guarantors from time to time party thereto, the lenders listed on the Schedule of Lenders attached thereto (each individually, a “Lender” and collectively, the “Lenders”) and Victory Park Management, LLC, as administrative agent and collateral agent (the “Agent”) for the Lenders and the Holders (as defined therein).
Pursuant to the provisions of Section 2.6(d) of the Financing Agreement, the undersigned hereby certifies that (i) it is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, (ii) it is not a “10 percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of the Code and (iii) it is not a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code.
The undersigned has furnished the Agent and the Borrower with executed originals of IRS Form W-8BEN or W-8BEN-E, as applicable. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Borrower and the Agent, and (2) the undersigned shall have at all times furnished the Borrower and the Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Financing Agreement and used herein shall have the meanings given to them in the Financing Agreement.

[NAME OF LENDER]
By:    
Name:
Title:
Date: ________ __, 20[ ]


SCHEDULES
TO
FINANCING AGREEMENT


Schedule 1.1        Program Guidelines

Brand: RISE

Consumer Loan: The Consumer Loan is an unsecured installment loan offered by CC Bank. The credit limit will be between $500 and $5,000. In order to obtain a Consumer Loan, the underlying borrower must establish and maintain a deposit account with a financial institution. The underlying borrower may request the proceeds of the Consumer Loan online or by phone. CC Bank will fund the account in the underlying borrower’s deposit account or mailing a paper check.

Interest Rates: Annual Percentage Rates will range from thirty-six percent (36%) to one hundred forty-nine percent (149%)

Repayment. Consumer Loans have a term from seven (7) to twenty-six (26) months. The Consumer Loan will have bi-weekly, semi-monthly and monthly payment options. Interest accrues on the principal amount of the Consumer Loan on a daily basis. Repayments are applied to principal and interest according to an amortization schedule.

Eligible States: CC Bank will provide Consumer Loans only to consumers who reside in states in which its consumer credit products may be permissibly offered.

Multi-Channel Marketing: Direct mail, digital, strategic partners (including but not limited to Lending Tree and Credit Karma), television and mass media

Reporting: Underlying borrower’s repayment history shall be reported to the credit bureaus.

The Parties will mutually agree in writing in advance on the terms and conditions of any additional products or credit plans to be included under the Program and originated by CC Bank.


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Schedule 7.1        Subsidiaries

Name Sole Member State of Formation Percent of Subsidiary Held
Elevate Credit Service, LLC Elevate Credit, Inc. Delaware 100%
Elevate Decision Sciences, LLC Elevate Credit, Inc. Delaware 100%
Elastic Financial, LLC Elevate Credit, Inc. Delaware 100%
RISE Credit, LLC Elevate Credit, Inc. Delaware 100%
RISE SPV, LLC Elevate Credit, Inc. Delaware 100%
Financial Education, LLC Elevate Credit, Inc. Delaware 100%
Today Card, LLC Elevate Credit, Inc. Delaware 100%
EF Financial, LLC Elevate Credit, Inc. Delaware 100%
EC Financial, LLC Elevate Credit, Inc. Delaware 100%
Elevate Collections, LLC Elevate Credit Service, LLC Delaware 100%
Rise Financial, LLC RISE SPV, LLC Delaware 100%
RISE Credit of Alabama, LLC RISE SPV, LLC Delaware 100%
RISE Credit of Arizona, LLC RISE SPV, LLC Delaware 100%
RISE Credit of California, LLC RISE SPV, LLC Delaware 100%
RISE Credit of Colorado, LLC RISE SPV, LLC Delaware 100%
RISE Credit of Delaware, LLC RISE SPV, LLC Texas 100%
Rise Credit of Florida, LLC RISE SPV, LLC Delaware 100%
RISE Credit of Georgia, LLC RISE SPV, LLC Delaware 100%
RISE Credit of Idaho, LLC RISE SPV, LLC Delaware 100%
RISE Credit of Illinois, LLC RISE SPV, LLC Delaware 100%
RISE Credit of Kansas, LLC RISE SPV, LLC Delaware 100%
RISE Credit of Louisiana, LLC RISE SPV, LLC Delaware 100%
RISE Credit of Mississippi, LLC RISE SPV, LLC Delaware 100%
RISE Credit of Missouri, LLC RISE SPV, LLC Delaware 100%
RISE Credit of Nebraska, LLC RISE SPV, LLC Delaware 100%
RISE Credit of Nevada, LLC RISE SPV, LLC Delaware 100%
RISE Credit of North Dakota, LLC RISE SPV, LLC Delaware 100%
RISE Credit of Oklahoma, LLC RISE SPV, LLC Delaware 100%
RISE Credit of Texas, LLC RISE SPV, LLC Delaware 100%
RISE Credit of Tennessee, LLC RISE SPV, LLC Delaware 100%
RISE Credit of South Carolina, LLC RISE SPV, LLC Delaware 100%
RISE Credit of South Dakota, LLC RISE SPV, LLC Delaware 100%
RISE Credit of Utah, LLC RISE SPV, LLC Delaware 100%
RISE Credit of Virginia, LLC RISE SPV, LLC Delaware 100%
RISE Credit Service of Ohio, LLC RISE Credit, LLC Delaware 100%
RISE Credit Service of Texas, LLC RISE Credit, LLC Delaware 100%
Elastic Louisville, LLC Elastic Financial, LLC Delaware 100%
Elevate Admin, LLC
Elastic Financial, LLC Delaware 100%
Elastic Marketing, LLC Elastic Financial, LLC Delaware 100%
Today Marketing, LLC Today Card, LLC Delaware 100%
Today SPV, LLC Today Card, LLC Delaware 100%
EF Marketing, LLC EF Financial, LLC Delaware 100%
EC Marketing, LLC EC Financial, LLC Delaware 100%

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Schedule 7.5        Consents

NONE
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Schedule 7.7        Equity Capitalization

For Elevate Credit, Inc.:

Elevate Credit is a publicly traded corporation.


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For Subsidiaries of Elevate Credit, Inc.:

Issuer Holder Class of Stock or Other Interests Certificate No. No. of Units Percent of Subsidiary Held
Elevate Credit Service, LLC Elevate Credit, Inc. membership interest 2 100 100%
Elevate Decision Sciences, LLC Elevate Credit, Inc. membership interest 2 100 100%
Elastic Financial, LLC Elevate Credit, Inc. membership interest 2 100 100%
RISE Credit, LLC Elevate Credit, Inc. membership interest 2 100 100%
RISE SPV, LLC Elevate Credit, Inc. membership interest 2 100 100%
Financial Education, LLC Elevate Credit, Inc. membership interest 1 100 100%
Today Card, LLC Elevate Credit, Inc. membership interest 1 100 100%
EF Financial, LLC Elevate Credit, Inc. membership interest 1 100 100%
EC Financial, LLC Elevate Credit, Inc. membership interest 1 100 100%
Elevate Collections, LLC Elevate Credit Service, LLC membership interest 1 100 100%
Rise Financial, LLC RISE SPV, LLC membership interest 2 100 100%
RISE Credit of Alabama, LLC RISE SPV, LLC membership interest 2 100 100%
RISE Credit of Arizona, LLC RISE SPV, LLC membership interest 1 100 100%
RISE Credit of California, LLC RISE SPV, LLC membership interest 3 100 100%
RISE Credit of Colorado, LLC RISE SPV, LLC membership interest 1 100 100%
RISE Credit of Delaware, LLC RISE SPV, LLC membership interest 4 100 100%
Rise Credit of Florida, LLC RISE SPV, LLC membership interest 1 100 100%
RISE Credit of Georgia, LLC RISE SPV, LLC membership interest 2 100 100%
RISE Credit of Idaho, LLC RISE SPV, LLC membership interest 3 100 100%
RISE Credit of Illinois, LLC RISE SPV, LLC membership interest 3 100 100%
RISE Credit of Kansas, LLC RISE SPV, LLC membership interest 2 100 100%
RISE Credit of Louisiana, LLC RISE SPV, LLC membership interest 1 100 100%
RISE Credit of Mississippi, LLC RISE SPV, LLC membership interest 2 100 100%
RISE Credit of Missouri, LLC RISE SPV, LLC membership interest 3 100 100%
RISE Credit of Nebraska, LLC RISE SPV, LLC membership interest 1 100 100%
RISE Credit of Nevada, LLC RISE SPV, LLC membership interest 2 100 100%
RISE Credit of North Dakota, LLC RISE SPV, LLC membership interest 2 100 100%
RISE Credit of Oklahoma, LLC RISE SPV, LLC membership interest 1 100 100%
RISE Credit of Texas, LLC RISE SPV, LLC membership interest 1 100 100%
RISE Credit of Tennessee, LLC RISE SPV, LLC membership interest 1 100 100%
RISE Credit of South Carolina, LLC RISE SPV, LLC membership interest 3 100 100%
RISE Credit of South Dakota, LLC RISE SPV, LLC membership interest 3 100 100%
RISE Credit of Utah, LLC RISE SPV, LLC membership interest 3 100 100%
RISE Credit of Virginia, LLC RISE SPV, LLC membership interest 2 100 100%
RISE Credit Service of Ohio, LLC RISE Credit, LLC membership interest 4 100 100%
RISE Credit Service of Texas, LLC RISE Credit, LLC membership interest 3 100 100%
Elastic Louisville, LLC Elastic Financial, LLC membership interest 2 100 100%
Elevate Admin, LLC
Elastic Financial, LLC membership interest 3 100 100%
Elastic Marketing, LLC Elastic Financial, LLC membership interest 2 100 100%
Today Marketing, LLC Today Card, LLC membership interest 1 100 100%
Today SPV, LLC Today Card, LLC membership interest 1 100 100%
EF Marketing, LLC EF Financial, LLC membership interest 1 100 100%
EC Marketing, LLC EC Financial, LLC membership interest 1 100 100%

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Schedule 7.8        Indebtedness and Other Contracts

(i)NONE

(ii)See Elevate Credit's most recent public filing for a current list of material agreements.

(iii)    NONE


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Schedule 7.12        Intellectual Property Rights

NONE


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Schedule 7.14        Absence of Certain Changes; Insolvency.


Elevate Credit International Limited ("ECIL") has been placed in administration under the UK Insolvency Act 1986, and the Board of Directors of ECIL has appointed KPMG LLP to take control and management of ECIL business.


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Schedule 7.22        Conduct of Business; Regulatory Permits

NONE

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Schedule 7.27        ERISA

    (a) See below:

1.Elevate Credit has two equity incentive plans to provide equity incentives to employees at its discretion.
2.Elevate Credit provides Workers Compensation insurance to its employees through CNA Financial Corporation for all states except Washington, which is provided through the State of Washington.
3.Elevate Credit provides a Vision Insurance Plan to its employees through UnitedHealthCare.
4.Elevate Credit provides Flexible Spending Accounts to its employees through Infinisource.
5.Elevate Credit provides COBRA to its employees through Infinisource.
6.Elevate Credit provides a Dental insurance plan to its employees through UnitedHealthCare.
7.Elevate Credit provides Short Term Disability to its employees through Cigna.
8.Elevate Credit provides Long Term Disability to its employees through Cigna.
9.Elevate Credit provides Group life/ AD&D to its employees through Cigna.
10.Elevate Credit provides Voluntary Life/ AD&D to its employees through Cigna.
11.Elevate Credit provides a Medical Insurance plan to its employees through UnitedHealthcare.
12.Elevate Credit provides a 401(k) Plan to its employees through Fidelity.
13.Elevate Credit provides a Life Assistance Program to its employees through Cigna.

    (b) None.


    (c) None.


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Schedule 7.32        Transactions with Affiliates

See Elevate Credit's most recent public filing for a current list of material agreements.


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Schedule 7.40        Material Contracts

See Elevate Credit's most recent public filing for a current list of material agreements.

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Schedule 8.3(d)    Notice of Certain Proceedings as of Closing Date

1.In or around December 2018, Elevate provided notice to the Credit Parties, Agent, Lenders and Holders regarding the potential for a fraudulent conveyance action related to the Think Finance bankruptcy.
2.On February 20, 2020, Elevate provided notice to the Credit Parties, Agent, Lenders and Holders regarding investigative subpoenas from AG Racine and the District of Columbia related to loans originated by FinWise and First Republic Bank and Sopheary Sanh v. Opportunity Financial, LLC, Applied Data Finance, LLC d/b/a/ Applied Data Finance d/b/a Personify Financial, and RISE Credit Service of Texas, LLC d/b/a RISE, alleging violations of the Washington Consumer Protection Act by engaging in unfair and deceptive practices and other threatened or pending litigation previously noticed.
3.On March 25, 2020, Elevate provided updated information to the Credit Parties, Agent, Lenders and Holders regarding investigative subpoenas from AG Racine and the District of Columbia related to loans originated by FinWise and First Republic Bank, and Crawford v. Elevate et al, California claim requesting public injunctive relief asserting claims under the “unlawful,” “unfair,” and “fraudulent” prongs of the California Unfair Competition Law and for breach of contract and civil conspiracy and California Financing Law’s prohibition on unconscionable loans and the California False Advertising Law and other pending litigation previous noticed.
4.On April 28, 2020, Elevate provided notice to the Credit Parties, Agent, Lenders and Holders regarding Le v. RISE Credit of California, LLC dba RISE et al - California Demand for Arbitration and Public Injunctive Relief asserting claims under the “unlawful,” “unfair,” and “fraudulent” prongs of the California Unfair Competition Law and for breach of contract and civil conspiracy and California Financing Law’s prohibition on unconscionable loans and the California False Advertising Law, and other pending litigation previously noticed.
5.On June 5, 2020, Elevate provided notice to the Credit Parties, Agent, Lenders and Holders regarding AG Racine & District of Columbia v. Elevate, alleging violations of the District of Columbia Consumer Protection Procedures Act (“CPPA”), D.C. Code §§ 28-3901, et seq.

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Schedule 8.25        Existing Investments

NONE

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EXECUTION VERSION
SECOND AMENDMENT TO FINANCING AGREEMENT
This SECOND AMENDMENT TO FINANCING AGREEMENT (this “Amendment”) is made and entered into as of July 31, 2020 by and among EF SPV, Ltd., an exempted company incorporated with limited liability under the laws of the Cayman Islands (the “Borrower”), Elevate Credit, Inc., a Delaware corporation (“Elevate Credit”), as a Guarantor, the other Guarantors party hereto (such Guarantors, collectively with Elevate Credit and the Borrower, the “Credit Parties”) and Victory Park Management, LLC, as administrative agent and collateral agent for the Lenders and the Holders (in such capacity, the “Agent”). Capitalized terms used and not otherwise defined herein shall have the respective meanings ascribed to them in the Financing Agreement or if not defined therein, in the Security Agreement.
WHEREAS, the Guarantors, Elevate Credit, the Borrower, the Lenders and the Agent are parties to that certain Financing Agreement dated as of February 7, 2019 (as amended by that certain First Amendment to Financing Agreement, entered into as of August 1, 2019, by and among the Credit Parties, the Agent and the Lenders, and as may be further amended, restated, supplemented or otherwise modified from time to time, the “Financing Agreement”); and
WHEREAS, the Credit Parties and the Agent desire to amend certain provisions of the Financing Agreement on the terms set forth herein.
NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt, adequacy and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
1.    Amendments to Financing Agreement. Effective as of the date hereof, the Financing Agreement is hereby amended as set forth in Exhibit A hereto, with text marked in underline indicating additions and text marked in strikethrough indicating deletions thereto.
2.    Conditions Precedent. This Amendment shall become effective upon the satisfaction in full of each of the following conditions:
(a)    the Borrower shall have executed and delivered, or caused to be delivered, to the Agent evidence satisfactory to the Agent that the Borrower shall pay to the Agent on the date hereof all fees and other amounts due and owing thereon under this Amendment and the other Transaction Documents;
(b)    the representations and warranties of the Credit Parties contained herein and in the Financing Agreement shall be true and correct except to the extent such representations and warranties expressly relate to an earlier date, in which case such representations and warranties shall be true and correct as of such earlier date; and
(c)    no Event of Default shall have occurred and be continuing or would result from the transaction contemplated hereby.
US_142978223v5

3.    General Release. In consideration of the Agent’s agreements contained in this Amendment, each Credit Party hereby irrevocably releases and forever discharge the Lenders, the Holders and the Agent and their affiliates, subsidiaries, successors, assigns, directors, officers, employees, agents, consultants, attorneys, managers, investment managers, principles and portfolio companies (each, a “Released Person”) of and from any and all claims, suits, actions, investigations, proceedings or demands, whether based in contract, tort, implied or express warranty, strict liability, criminal or civil statute or common law of any kind or character, known or unknown, which such Credit Party ever had or now has against Agent, any Lender, any Holder or any other Released Person which relates, directly or indirectly, to any acts or omissions of Agent, any Lender, any Holder or any other Released Person relating to the Financing Agreement or any other Transaction Document on or prior to the date hereof.
4.    Representations and Warranties of the Credit Parties. To induce the Agent to execute and deliver this Amendment, each Credit Party represents, warrants and covenants that:
(a)    The execution, delivery and performance by each Credit Party of this Amendment and all documents and instruments delivered in connection herewith have been duly authorized by all necessary action required on its part, and this Amendment and all documents and instruments delivered in connection herewith are legal, valid and binding obligations of such Credit Party enforceable against such Credit Party in accordance with its terms except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies.
(b)    Each of the representations and warranties set forth in the Transaction Documents is true and correct on and as of the date hereof as if made on the date hereof, except to the extent such representations and warranties expressly relate to an earlier date, in which case such representations and warranties shall be true and correct as of such earlier date, and each of the agreements and covenants in the Transaction Documents is hereby reaffirmed with the same force and effect as if each were separately stated herein and made as of the date hereof.
(c)    Neither the execution, delivery and performance of this Amendment nor the consummation of the transactions contemplated hereby or thereby does or shall (i) result in a violation of any Credit Party’s certificate of incorporation, certificate of formation, bylaws, limited liability company agreement or other governing documents, or the terms of any Capital Stock or other Equity Interests of any Credit Party; (ii) conflict with, or constitute a breach or default (or an event which, with notice or lapse of time or both, would become a breach or default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which any Credit Party is a party; (iii) result in any “price reset” or other material change in or other modification to the terms of any Indebtedness, Equity Interests or other securities of any Credit Party; or (iv) result in a violation of any law, rule, regulation, order, judgment or decree.
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(d)    No Event of Default has occurred or is continuing under this Amendment or any other Transaction Document.
5.    Ratification of Liability. Each Credit Party, as debtor, grantor, pledgor, guarantor, assignor, or in other similar capacity in which such party grants liens or security interests in its properties or otherwise acts as an accommodation party or guarantor, as the case may be, under the Transaction Documents, hereby ratifies and reaffirms all of its payment and performance obligations and obligations to indemnify, contingent or otherwise, under each Transaction Document to which such party is a party, and each such party hereby ratifies and reaffirms its grant of liens on or security interests in its properties pursuant to such Transaction Documents to which it is a party as security for the obligations under or with respect to the Financing Agreement, the Notes and the other Transaction Documents, and confirms and agrees that such liens and security interests hereafter secure all of the obligations under the Transaction Documents, including, without limitation, all additional obligations hereafter arising or incurred pursuant to or in connection with this Amendment or any Transaction Document. Each Credit Party further agrees and reaffirms that the Transaction Documents to which it is a party now apply to all obligations as modified hereby (including, without limitation, all additional obligations hereafter arising or incurred pursuant to or in connection with this Amendment or any Transaction Document). Each such party (a) further acknowledges receipt of a copy of this Amendment and all other agreements, documents, and instruments executed or delivered in connection herewith, (b) consents to the terms and conditions of same, and (c) agrees and acknowledges that each of the Transaction Documents, as modified hereby, remains in full force and effect and is hereby ratified and confirmed. Except as expressly provided herein, the execution of this Amendment shall not operate as a waiver of any right, power or remedy of any Lender, any Holder or the Agent, nor constitute a waiver of any provision of any of the Transaction Documents nor constitute a novation of any of the obligations under the Transaction Documents.
6.    Reference to and Effect Upon the Transaction Documents.
(a)    Except as specifically amended hereby, all terms, conditions, covenants, representations and warranties contained in the Transaction Documents, and all rights of the Lenders, the Holders and the Agent and all of the obligations under the Transaction Documents, shall remain in full force and effect, including, but not limited to, the right of first refusal in favor of Agent and its designees set forth in Section 8.19 of the Financing Agreement. Each Credit Party hereby confirms that the Transaction Documents are in full force and effect, and that no Credit Party has any right of setoff, recoupment or other offset or any defense, claim or counterclaim with respect to any Transaction Document or the Credit Parties’ obligations thereunder.
(b)    Except as expressly set forth herein, the execution, delivery and effectiveness of this Amendment and any consents or waivers set forth herein shall not directly or indirectly: (i) create any obligation to make any further loans or to defer any enforcement action after the occurrence of any Event of Default; (ii) constitute a consent or waiver of any past, present or future violations of any Transaction Document; (iii)
    3


amend, modify or operate as a waiver of any provision of any Transaction Document or any right, power or remedy of any Lender, any Holder or the Agent or (iv) constitute a course of dealing or other basis for altering any obligations under the Transaction Documents or any other contract or instrument. Except as expressly set forth herein, each Lender, each Holder and the Agent reserve all of their rights, powers, and remedies under the Transaction Documents and applicable law. All of the provisions of the Transaction Documents, including, without limitation, the time of the essence provisions, are hereby reiterated, and if ever waived previously, are hereby reinstated.
(c)    From and after the date hereof, (i) the term “Agreement” in the Financing Agreement, and all references to the Financing Agreement in any Transaction Document shall mean the Financing Agreement, as amended by this Amendment and (ii) the term “Transaction Documents” defined in the Financing Agreement shall include, without limitation, this Amendment and any agreements, instruments and other documents executed or delivered in connection herewith.
7.    Costs and Expenses. In addition to, and not in lieu of, the terms of the Transaction Documents relating to the reimbursement of the Lenders’, the Holders’ and the Agent’s fees and expenses, the Credit Parties shall reimburse each Lender, each Holder and the Agent, as the case may be, promptly on demand for all fees, costs, charges and expenses, including the fees, costs and expenses of counsel and other expenses incurred in connection with this Amendment.
8.    Governing Law; Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Amendment shall be governed by the internal laws of the State of New York, without giving effect to its conflicts of law principles other than §5-1401 and 5-1402 of the New York General Obligations Law. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in New York, New York for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Amendment and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AMENDMENT OR ANY TRANSACTIONS CONTEMPLATED HEREBY.
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9.    No Strict Construction. The language used in this Amendment will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party.
10.    Counterparts. This Amendment may be executed in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. Signatures of the parties hereto transmitted by facsimile or by electronic media or similar means shall be deemed to be their original signature for all purposes.
11.    Severability. The invalidity, illegality, or unenforceability of any provision in or obligation under this Amendment in any jurisdiction shall not affect or impair the validity, legality, or enforceability of the remaining provisions or obligations under this Amendment or of such provision or obligation in any other jurisdiction. If feasible, any such offending provision shall be deemed modified to be within the limits of enforceability or validity; provided that if the offending provision cannot be so modified, it shall be stricken and all other provisions of this Amendment in all other respects shall remain valid and enforceable.
12.    Further Assurances. The parties hereto shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as any other party may reasonably request in order to carry out the intent and accomplish the purposes of this Amendment and the consummation of the transactions contemplated hereby.
13.    Headings. The headings of this Amendment are for convenience of reference and shall not form part of, or affect the interpretation of, this Amendment.
14.    Limited Recourse and Non-Petition.
(a)    The Secured Parties shall have recourse only to the proceeds of the realization of Collateral once the proceeds have been applied in accordance with the terms of the Security Agreement (the "Net Proceeds"). If the Net Proceeds are insufficient to discharge all payments which, but for the effect of this clause, would then be due (the "Amounts Due"), the obligation of the Borrower shall be limited to the amounts available from the Net Proceeds and no debt shall be owed to the Secured Parties by the Borrower for any further sum. The Secured Parties shall not take any action or commence any proceedings against the Borrower to recover any amounts due and payable by the Borrower under the Financing Agreement except as expressly permitted by the provisions of the Financing Agreement. The Secured Parties shall not take any action or commence any proceedings or petition a court for the liquidation of the Borrower, nor enter into any arrangement, reorganization or insolvency proceedings in relation to the Borrower whether under the laws of the Cayman Islands or other applicable bankruptcy laws until after the later to occur of the payment of all of the Amounts Due or the application of all of the Net Proceeds.
(b)    The Secured Parties hereby acknowledge and agree that the Borrower’s obligations under the Transaction Documents are solely the corporate obligations of the Borrower, and that the Secured Parties shall not have any recourse against any of the directors, officers or
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employees of the Borrower for any claims, losses, damages, liabilities, indemnities or other obligations whatsoever in connection with any transactions contemplated by the Transaction Documents.
[Remainder of Page Intentionally Left Blank; Signature Pages Follows]


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IN WITNESS WHEREOF, each party has caused its signature page to this Amendment to be duly executed as of the date first written above.

BORROWER:

EF SPV, LTD., an exempted company incorporated with limited liability under the laws of the Cayman Islands, as Borrower



By:    /s/ Andrew Dean    
Name:    Andrew Dean
Title:    Director


GUARANTORS:

ELEVATE CREDIT, INC., a Delaware corporation

By:    /s/ Jason Harvison    
Name: Jason Harvison
Title: Chief Executive Officer

[SIGNATURE PAGES CONTINUE]







    [Signature Page to Second Amendment to Financing Agreement (FinWise)]


GUARANTORS (CONT.), EACH AS AN “ELEVATE CREDIT SUBSIDIARY”:

ELASTIC FINANCIAL, LLC
ELEVATE DECISION SCIENCES, LLC
RISE CREDIT, LLC
FINANCIAL EDUCATION, LLC
ELEVATE CREDIT SERVICE, LLC
RISE SPV, LLC
EF FINANCIAL, LLC
EC FINANCIAL, LLC
ELEVATE COLLECTIONS, LLC

By: Elevate Credit, Inc., as Sole Member of each of the above-named entities

By:    /s/ Jason Harvison    
Name: Jason Harvison
Title:     President

RISE Credit Service of Ohio, LLC
RISE Credit Service of Texas, LLC

By: RISE Credit, LLC, as Sole Member of each of the above-named entities
By: Elevate Credit, Inc., as its Sole Member

By:    /s/ Jason Harvison    
Name: Jason Harvison
Title:     President

[SIGNATURE PAGES CONTINUE]


    [Signature Page to Second Amendment to Financing Agreement (FinWise)]

Rise Financial, LLC
RISE Credit of Alabama, LLC
RISE Credit of Arizona, LLC
RISE Credit of California, LLC
RISE Credit of Colorado, LLC
RISE Credit of Delaware, LLC
RISE Credit of Florida, LLC
RISE Credit of Georgia, LLC
RISE Credit of Idaho, LLC
RISE Credit of Illinois, LLC
RISE Credit of Kansas, LLC
RISE Credit of Louisiana, LLC
RISE Credit of Mississippi, LLC
RISE Credit of Missouri, LLC
RISE Credit of Nebraska, LLC
RISE Credit of Nevada, LLC
RISE Credit of North Dakota, LLC
RISE Credit of Oklahoma, LLC
RISE Credit of South Carolina, LLC
RISE Credit of South Dakota, LLC
RISE Credit of Texas, LLC
RISE Credit of Tennessee, LLC
RISE Credit of Utah, LLC
RISE Credit of Virginia, LLC
By: RISE SPV, LLC, as Sole Member of each of the above-named entities
By: Elevate Credit, Inc., as its Sole Member


By:    /s/ Jason Harvison    
Name: Jason Harvison
Title:     President
[SIGNATURE PAGES CONTINUE]




    [Signature Page to Second Amendment to Financing Agreement (FinWise)]

ELASTIC LOUISVILLE, LLC
ELEVATE ADMIN, LLC
ELASTIC MARKETING, LLC
By: Elastic Financial, LLC, as Sole Member of each of the above-named entities
By: Elevate Credit, Inc., as its Sole Member


By:    /s/ Jason Harvison    
Name: Jason Harvison
Title:     President


EF MARKETING, LLC
By: EF Financial, LLC, as its Sole Member
By: Elevate Credit, Inc., as its Sole Member

By:    /s/ Jason Harvison    
Name: Jason Harvison
Title:     Chief Executive Officer


EC MARKETING, LLC
By: EC Financial, LLC, as its Sole Member
By: Elevate Credit, Inc., as its Sole Member

By:    /s/ Jason Harvison    
Name: Jason Harvison
Title:     Chief Executive Officer



[SIGNATURE PAGES CONTINUE]




    [Signature Page to Second Amendment to Financing Agreement (FinWise)]

AGENT:

VICTORY PARK MANAGEMENT, LLC


By:    /s/ Scott R. Zemnick                    
Name:     Scott R. Zemnick
Title:     Authorized Signatory

LENDERS:

VPC INVESTOR FUND B, LLC

By:     VPC Investor Fund GP B, L.P.
Its:     Managing Member

By:     VPC Investor Fund UGP B, LLC
Its:     General Partner


By:    /s/ Scott R. Zemnick                    
Name:    Scott R. Zemnick
Title:    General Counsel

VPC SPECIAL OPPORTUNITIES FUND III ONSHORE, L.P.

By:     VPC Special Opportunities Fund III GP, L.P.
Its:       General Partner

By:      VPC Special Opportunities III UGP, LLC
Its:       General Partner

By:    /s/ Scott R. Zemnick                    
Name:    Scott R. Zemnick
Title:    General Counsel


[SIGNATURE PAGES CONTINUE]



    [Signature Page to Second Amendment to Financing Agreement (FinWise)]

LENDERS (CON’T.):

VPC ONSHORE SPECIALTY FINANCE FUND II, L.P.

By:     VPC Specialty Finance Fund GP II, L.P.
Its:     General Partner

By:     VPC Specialty Finance Fund UGP II, LLC
Its:     General Partner


By:    /s/ Scott R. Zemnick                    
Name:    Scott R. Zemnick
Title:    General Counsel

VPC INVESTOR FUND B II, LLC

By:     VPC Investor Fund GP B II, L.P.
Its:     Managing Member

By:     VPC Investor Fund UGP B II, LLC
Its:     General Partner


By:    /s/ Scott R. Zemnick                    
Name:    Scott R. Zemnick
Title: General Counsel

VPC INVESTOR FUND C, L.P.

By:     VPC Investor Fund GP C, L.P.
Its:     General Partner

By:     VPC Investor Fund UGP C, LLC
Its:     General Partner


By:    /s/ Scott R. Zemnick                    
Name:    Scott R. Zemnick
Title:    General Counsel

[SIGNATURE PAGES CONTINUE]

    [Signature Page to Second Amendment to Financing Agreement (FinWise)]

LENDERS (CON’T.):

VPC INVESTOR FUND G-1, L.P.

By:     VPC Investor Fund GP G, L.P.
Its:     General Partner

By:     VPC Investor Fund UGP G, LLC
Its:     General Partner


By:    /s/ Scott R. Zemnick                    
Name:    Scott R. Zemnick
Title:    General Counsel



VPC SPECIALTY LENDING FUND (NE), LTD.
 

By:     Victory Park Capital Advisors, LLC
Its:     Investment Manager (pursuant to powers of attorney granted in the Investment Management Agreement)


By:    /s/ Scott R. Zemnick                    
Name:    Scott R. Zemnick
Title:    General Counsel


[SIGNATURE PAGES CONTINUE]


    [Signature Page to Second Amendment to Financing Agreement (FinWise)]

VPC SPECIALTY LENDING INVESTMENTS INTERMEDIATE, L.P.

By:    VPC Specialty Lending Investments Intermediate GP, LLC
Its:    General Partner

By:     Victory Park Management, LLC
Its:    Manager


By:    /s/ Scott R. Zemnick                    
Name:    Scott R. Zemnick
Title:    Manager

VPC OFFSHORE UNLEVERAGED PRIVATE DEBT FUND, L.P.

By:     VPC Private Debt Fund GP, L.P.
Its:     General Partner

By:     VPC UGP, LLC
Its:     General Partner


By:    /s/ Scott R. Zemnick                    
Name:    Scott R. Zemnick
Title:    General Counsel


    [Signature Page to Second Amendment to Financing Agreement (FinWise)]

Exhibit A
AMENDMENT TO THE FINANCING AGREEMENT
(see attached)



FINANCING AGREEMENT
Dated as of February 7, 2019

by and among

EF SPV, LTD., as the Borrower (the “Borrower”),

THE GUARANTORS FROM TIME TO TIME PARTY HERETO,

THE LENDERS PARTY HERETO
and

VICTORY PARK MANAGEMENT, LLC
as Agent
______________________________________________________________________________
$150,000,000250,000,000 SENIOR SECURED TERM NOTES
______________________________________________________________________________








TABLE OF CONTENTS


Page
Article 1 DEFINITIONS; CERTAIN TERMS 2
Section 1.1 Definitions 2
Section 1.2 Terms Generally
2526
Section 1.3 Accounting and Other Terms 26
Article 2 BORROWER’S AUTHORIZATION OF ISSUE 26
Section 2.1 Senior Secured Term Notes 26
Section 2.2 Interest
2728
Section 2.3 Redemptions and Payments 29
Section 2.4 Payments 32
Section 2.5 Dispute Resolution 33
Section 2.6 Taxes 33
Section 2.7 Reissuance 35
Section 2.8 Register
3536
Section 2.9 Maintenance of Register 36
Section 2.10 Monthly Maintenance Fee 36
Article 3 CLOSING 36
Section 3.1 Initial Closing 36
Section 3.2 Subsequent Closings 37
Article 4 INTENTIONALLY OMITTED
3738
Article 5 CONDITIONS TO CLOSING AND EACH LENDER’S OBLIGATION TO PURCHASE
3738
Section 5.1 Closing
3738
Section 5.2 Subsequent Closings 40
Article 6 Intentionally Omitted 41
Article 7 CREDIT PARTIES’ REPRESENTATIONS AND WARRANTIES 41
Section 7.1 Organization and Qualification 41
Section 7.2 Authorization; Enforcement; Validity 42
Section 7.3 Issuance of Notes 42
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Section 7.4 No Conflicts 42
Section 7.5 Consents
4243
Section 7.6 Subsidiary Rights 43
Section 7.7 Equity Capitalization 43
Section 7.8 Indebtedness and Other Contracts 44
Section 7.9 Off Balance Sheet Arrangements 44
Section 7.10 Ranking of Notes 44
Section 7.11 Title 44
Section 7.12 Intellectual Property Rights 44
Section 7.13 Creation, Perfection, and Priority of Liens 45
Section 7.14 Absence of Certain Changes; Insolvency 45
Section 7.15 Absence of Proceedings
4546
Section 7.16 No Undisclosed Events, Liabilities, Developments or Circumstances 46
Section 7.17 No Disagreements with Accountants and Lawyers 46
Section 7.18 Placement Agent’s Fees. 46
Section 7.19 Reserved. 46
Section 7.20 Tax Status 46
Section 7.21 Transfer Taxes 47
Section 7.22 Conduct of Business; Compliance with Laws; Regulatory Permits 47
Section 7.23 Foreign Corrupt Practices
4748
Section 7.24 Reserved 48
Section 7.25 Environmental Laws 48
Section 7.26 Margin Stock 48
Section 7.27 ERISA 48
Section 7.28 Investment Company 49
Section 7.29 U.S. Real Property Holding Corporation 49
Section 7.30 Internal Accounting and Disclosure Controls 49
Section 7.31 Reserved 49
Section 7.32 Transactions With Affiliates 49
Section 7.33 Acknowledgment Regarding Holders’ Purchase of Notes
4950
Section 7.34 Reserved 50
Section 7.35 Insurance 50
Section 7.36 Full Disclosure 50
Section 7.37 Employee Relations 50
Section 7.38 Certain Other Representations and Warranties
5051
Section 7.39 Patriot Act 51
Section 7.40 Material Contracts 51
Article 8 COVENANTS 51
Section 8.1 Financial Covenants 51
Section 8.2 Deliveries
5253
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Section 8.3 Notices 54
Section 8.4 Rank 56
Section 8.5 Incurrence of Indebtedness 56
Section 8.6 Existence of Liens
5657
Section 8.7 Restricted Payments
5657
Section 8.8 Mergers; Acquisitions; Asset Sales 58
Section 8.9 No Further Negative Pledges 58
Section 8.10 Affiliate Transactions
5859
Section 8.11 Insurance. 59
Section 8.12 Corporate Existence and Maintenance of Properties 60
Section 8.13 Non-circumvention 60
Section 8.14 Change in Business; Change in Accounting; Elevate Credit 60
Section 8.15 U.S. Real Property Holding Corporation 61
Section 8.16 Compliance with Laws 61
Section 8.17 Additional Collateral 61
Section 8.18 Audit Rights; Field Exams; Appraisals; Meetings; Books and Records
6162
Section 8.19 Additional Issuances of Debt Securities; Right of First Refusal on New Indebtedness
6263
Section 8.20 Post-Closing Obligations. 63
Section 8.21 Use of Proceeds
6364
Section 8.22 Fees, Costs and Expenses
6364
Section 8.23 Modification of Organizational Documents and Certain Documents 64
Section 8.24 Joinder 64
Section 8.25 Investments 65
Section 8.26 Further Assurances.
6566
Section 8.27 Backup Servicer 66
Section 8.28 Claims Escrow Account 66
Article 9 CROSS GUARANTY
6667
Section 9.1 Cross-Guaranty
6667
Section 9.2 Waivers by Guarantors 67
Section 9.3 Benefit of Guaranty 67
Section 9.4 Waiver of Subrogation, Etc
6768
Section 9.5 Election of Remedies
6768
Section 9.6 Limitation 68
Section 9.7 Contribution with Respect to Guaranty Obligations.
6869
Section 9.8 Liability Cumulative 69
Section 9.9 Stay of Acceleration
6970
Section 9.10 Benefit to Credit Parties
6970
Section 9.11 Indemnity
6970
Section 9.12 Reinstatement 70
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Section 9.13 Guarantor Intent 70
Section 9.14 General 70
Article 10 RIGHTS UPON EVENT OF DEFAULT
7071
Section 10.1 Event of Default
7071
Section 10.2 Termination of Commitments and Acceleration Right
7374
Section 10.3 Consultation Rights
7475
Section 10.4 Other Remedies
7475
Section 10.5 Application of Proceeds 75
Article 11 [Reserved]
7576
Article 12 AGENCY PROVISIONS 76
Section 12.1 Appointment 76
Section 12.2 Binding Effect 77
Section 12.3 Use of Discretion 77
Section 12.4 Delegation of Duties 78
Section 12.5 Exculpatory Provisions 78
Section 12.6 Reliance by Agent 78
Section 12.7 Notices of Default 79
Section 12.8 Non Reliance on the Agent and Other Holders
7980
Section 12.9 Indemnification 80
Section 12.10 The Agent in Its Individual Capacity 80
Section 12.11 Resignation of the Agent; Successor Agent
8081
Section 12.12 Reimbursement by Holders and Lenders 81
Section 12.13 Withholding 81
Section 12.14 Release of Collateral or Guarantors
8182
Article 13 MISCELLANEOUS 82
Section 13.1 Payment of Expenses 82
Section 13.2 Governing Law; Jurisdiction; Jury Trial 83
Section 13.3 Counterparts
8384
Section 13.4 Headings
8384
Section 13.5 Severability 84
Section 13.6 Entire Agreement; Amendments 84
Section 13.7 Notices
8485
Section 13.8 Successors and Assigns; Participants 86
Section 13.9 No Third Party Beneficiaries 88
Section 13.10 Survival 88
Section 13.11 Further Assurances 88
Section 13.12 Indemnification 88
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Section 13.13 No Strict Construction
8990
Section 13.14 Waiver
8990
Section 13.15 Payment Set Aside
8990
Section 13.16 Independent Nature of the Lenders’ and the Holders’ Obligations and Rights 90
Section 13.17 Set-off; Sharing of Payments 90
Section 13.18 Limited Recourse and Non-Petition 91
Section 13.19 Creditor Debtor Relationship 92


EXHIBITS
Exhibit A    Form of Senior Secured Term Note
Exhibit B    Form of Pledge and Security Agreement
Exhibit C    Form of Secretary’s Certificate
Exhibit D    Form of Officer’s Certificate
Exhibit E    Form of Compliance Certificate
Exhibit F    Form of Notice of Purchase and Sale
Exhibit G    Form of Joinder Agreement
Exhibit H    Index of Closing Documents
Exhibit I    Form of US Tax Compliance Certificate

SCHEDULES
Schedule 1.1        Program Guidelines
Schedule 7.1        Subsidiaries
Schedule 7.5        Consents
Schedule 7.7        Equity Capitalization
Schedule 7.8        Indebtedness and Other Contracts
Schedule 7.12        Intellectual Property Rights
Schedule 7.14        Absence of Certain Changes; Insolvency
Schedule 7.22        Conduct of Business; Compliance with Laws; Regulatory Permits
Schedule 7.27        ERISA
Schedule 7.32        Transactions with Affiliates
Schedule 7.40        Material Contracts
Schedule 8.3(d)    Notice of Certain Proceedings as of Second Amendment Effective Date
Schedule 8.25        Existing Investments

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FINANCING AGREEMENT
This FINANCING AGREEMENT (as modified, amended, extended, restated, amended and restated and/or supplemented from time to time, this “Agreement”), dated as of February 7, 2019 is being entered into by and among (a) EF SPV, Ltd., an exempted company incorporated with limited liability under the laws of the Cayman Islands (the “Borrower”), (b) Elevate Credit, Inc., a Delaware corporation as a Guarantor (as defined herein) and the other Guarantors from time to time party hereto, (c) the lenders listed on the Schedule of Lenders attached hereto (each individually, a “Lender” and collectively, the “Lenders”) and (d) Victory Park Management, LLC, as administrative agent and collateral agent (the “Agent”) for the Lenders and the Holders (as defined herein).
RECITALS
WHEREAS, each Lender has agreed to purchase, and the Borrower has agreed to sell, upon the terms and conditions stated in this Agreement, that principal amount of senior secured term notes, in substantially the form attached hereto as Exhibit A, as set forth opposite each such Lender’s name in the Schedule of Lenders attached hereto;
WHEREAS, contemporaneously with the execution and delivery of this Agreement, the Borrower, the Guarantors and the Agent on behalf of the Holders and Lenders are executing and delivering a Pledge and Security Agreement, substantially in the form attached thereto as Exhibit B (as modified, amended, extended, restated, amended and restated and/or supplemented from time to time, the “Security Agreement”), pursuant to which substantially all of the assets of the Borrower and the Guarantors are pledged as Collateral to secure the Obligations;
WHEREAS, subject to the terms hereof, each of the Guarantors are willing to guaranty all of the Obligations of the Borrower and to pledge to the Agent, for the benefit of the Holders and Lenders, all of the Capital Stock of its respective Subsidiaries and substantially all of its other Property to secure the Obligations; provided, notwithstanding any other provisions of this Agreement, (a) no Obligation of the Borrower (including any guaranty of any Obligation of the Borrower) shall constitute an “Obligation” with respect to any UK Credit Party, (b) no UK Credit Party shall guaranty or otherwise be liable for any other Credit Party’s guaranty of any Obligation of the Borrower and (c) no assets of any UK Credit Party shall serve as collateral security for any Obligations of the Borrower (including any guaranty of any Obligations of the Borrower), it being understood and acknowledged that the preceding provisions are intended to ensure that no UK Credit Party shall be treated as holding any obligations of a United States person pursuant to Section 956 of the Internal Revenue Code and shall be interpreted consistent with this intention (the limitations contained in the foregoing proviso are referred to herein collectively as the “956 Limitations”); and
WHEREAS, contemporaneously with the execution and delivery of this Agreement, the Borrower shall pay and reimburse the Agent for itself and on behalf of the Holders and Lenders for all expenses incurred in connection with the transactions contemplated hereunder.
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NOW, THEREFORE, in consideration of the premises and the covenants and agreements contained herein, the Borrower, the Guarantors, the Agent and each Lender hereby agree as follows:
Article 1
DEFINITIONS; CERTAIN TERMS
Section 1.1    Definitions. As used in this Agreement, the following terms have the respective meanings indicated below, such meanings to be applicable equally to both the singular and plural forms of such terms:
“956 Impact” has the meaning set forth in Section 8.24.
“956 Limitations” has the meaning set forth in the Recitals.
“1933 Act” means the Securities Act of 1933, as amended.
“Acquisition” means any transaction or series of related transactions for the purpose of or resulting, directly or indirectly, in (a) the acquisition of all or substantially all of the assets of a Person, or of all or substantially all of any business line, unit or division of a Person, (b) the acquisition of in excess of 50% of the Equity Interests of any Person, or otherwise causing any Person to become a Subsidiary, or (c) a merger or consolidation or any other combination with another Person.
“Additional Amount” has the meaning set forth in Section 2.6(a).
“Affiliate” means, with respect to a specified Person, another Person that (i) is a director or officer of such specified Person, or (ii) directly or indirectly through one or more intermediaries, Controls, is Controlled by or is under common Control with the Person specified.
“Agent” has the meaning set forth in the introductory paragraph hereto.
“Agreement” has the meaning set forth in the introductory paragraph hereto.
“Amounts Due” has the meaning set forth in Section 13.18.
“Asset Sale” means the sale, lease, license, conveyance or other disposition of any assets or rights of any Credit Party or any Credit Party’s Subsidiaries.
“Assignee” has the meaning set forth in Section 13.8.
“Backup Servicer” means a Person, reasonably satisfactory to Agent, that the Borrower has appointed and that is providing backup servicing and its permitted successors and assigns reasonably satisfactory to Agent.
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“Backup Servicing Agreement” means the Backup Servicing Agreement among the Credit Parties, the Backup Servicer and the Agent as amended, restated, supplemented or otherwise modified from time to time in accordance with the terms thereof.
“Bankruptcy Code” has the meaning set forth in Section 10.1(c).
“Bankruptcy Law” has the meaning set forth in Section 10.1(c).
“Base Rate” means
(a)    at any time on or after February 1, 2019 but prior to the first Issuance Date after February 1, 2019, a rate equal to the greatest of (i) the LIBOR Rate as of February 1, 2019, (ii) the Swap Rate as of February 1, 2019, and (iii) one percent per annum (1%); and
(b)at any time after the first Issuance Date after February 1, 2019 and as of each Issuance Date, a rate equal to the weighted average of (i) the then-current Base Rate immediately preceding such Issuance Date and (ii) the greatest of (A) the LIBOR Rate as of such Issuance Date, (B) the Swap Rate as of such Issuance Date and (C) one percent per annum (1%). For the avoidance of doubt, the resulting weighted average calculated in clause (b) shall be used as the then-current Base Rate in clause (b)(i) when calculating the Base Rate on the next succeeding Issuance Date.
“Blocked Account” means each “Controlled Account” (as defined in the Security Agreement) that is subject to the full dominion and control of the Agent.
“Book Value of Equity” means, as of any date of determination, total assets less intangible assets less total liabilities, in each case, of the Credit Parties and their Subsidiaries.
“Borrower” has the meaning set forth in the introductory paragraph hereto.
“Borrowing Base” means, on any date of determination, the sum of:
(a)    the aggregate balance of the portion of the Eligible Consumer Loans in which the Borrower owns a participation interest pursuant to the Participation Agreement on such date (for the avoidance of doubt, any portion of an Eligible Consumer Loan with respect to which an interest is retained by FinWise Bank is excluded hereunder) less any Excess Concentration Amounts multiplied by eighty-five percent (85%); plus
(b)    one hundred percent (100%) of the balance of the unrestricted (it being agreed and acknowledged that cash collateral securing surety bonds and letters of credit posted or maintained by the Borrower shall be deemed to be “restricted”) cash and Cash Equivalent Investments of the Borrower in a Funding Account or Collection Account on such date for which the Agent shall have a first-priority perfected Lien. For purposes of clarification, unrestricted cash includes all cash of the Borrower that is being held by an ACH provider or FinWise Bank prior to remittance to Borrower.
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“Borrowing Base Certificate” means a borrowing base certificate signed by the chief financial officer of the Borrower (or other authorized executive officer performing a similar function), in substantially the form included in the Form of Notice of Purchase and Sale attached hereto as Exhibit F.
“Business Day” means any day other than Saturday or Sunday or any day that banks in Chicago, Illinois are required or permitted to close.
“Capital Stock” means (1) in the case of a corporation, corporate stock; (2) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock; (3) in the case of a partnership or limited liability company, partnership interests (whether general or limited) or membership interests; and (4) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person, but excluding from all of the foregoing any debt securities convertible into, or exchangeable for, Capital Stock, whether or not such debt securities include any right of participation with Capital Stock.
“Cash Equivalent Investment” means, at any time, (a) any evidence of debt, maturing not more than one year after such time, issued or guaranteed by the United States Government or any agency thereof, (b) commercial paper, maturing not more than one year from the date of issue, or corporate demand notes, in each case rated at least A-l by Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc. or P-l by Moody’s Investors Service, Inc., (c) any certificate of deposit, time deposit or banker’s acceptance, maturing not more than one year after such time, or any overnight Federal Funds transaction that is issued or sold by 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, (d) any repurchase agreement entered into with any commercial banking institution of the nature referred to in clause (c) which (i) is secured by a fully perfected security interest in any obligation of the type described in any of clauses (a) through (c) 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 such commercial banking institution, (e) money market accounts or mutual funds which invest exclusively in assets satisfying the foregoing requirements, and (f) other short term liquid investments approved in writing by Agent.
“CC Financing Agreement” means that certain Financing Agreement dated as of July 31, 2020 by and among EC SPV, Ltd., Elevate Credit Service, LLC, the other “Guarantors” from time to time party thereto, the “Lenders” from time to time party thereto and Victory Park Management, LLC, as administrative agent.
“Change of Control” means, (a) with respect to any Credit Party or any Subsidiary of any Credit Party, that such Person shall, directly or indirectly, in one or more related transactions, (i) consolidate or merge with or into (whether or not such Person is the surviving corporation) another Person or (ii) sell, assign, transfer, lease, license, convey or otherwise dispose of all or substantially all of the properties or assets of such Person to another Person; provided, the foregoing notwithstanding, any of the Elevate Credit Subsidiaries may suspend its operations in any jurisdiction in which it operates and dissolve as a result of a decision by the
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Credit Parties to exit one or more markets from time to time; (b) the accumulation after October 15, 2018, whether directly, indirectly, beneficially or of record, by any individual, entity or group (within the meaning of Sections 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended) of 50% or more of the shares of the outstanding Capital Stock of the Elevate Credit Parent, or, in any event, that number of shares of outstanding Capital Stock of Elevate Credit Parent representing voting control of Elevate Credit Parent, whether by merger, consolidation, sale or other transfer of shares of Capital Stock (other than a merger or consolidation where the stockholders of Elevate Credit Parent prior to the merger or consolidation are the holders of a majority of the voting securities of the entity that survives such merger or consolidation); (c) Elevate Credit Parent shall cease to own, beneficially and of record, for any reason at any time 100% of the Capital Stock of any of the Elevate Credit Subsidiaries, free and clear of all Liens (other than Liens in favor of the Agent); or (d) the owner of the Capital Stock of the Borrower as of the Closing Date shall cease to own, beneficially and of record, for any reason at any time 100% of the Capital Stock of the Borrower.
“Charge Off” means an amount equal to the sum of the outstanding principal balance of Consumer Loans that (i) have a principal payment that became greater than sixty (60) days past due the scheduled payment date, which such scheduled payment date shall not be fourteen (14) days (or, in the case of Modified and Re-Aged Consumer Loans that have been modified in accordance with a modification policy approved in writing by Agent, such other period of days agreed to by Agent) past the original payment date, (ii) are identified as fraudulent or where the underlying borrowers are in bankruptcy proceedings or (iii) is otherwise charged off in accordance with the Program Guidelines, in each case, in the calendar month that includes such date of determination. “Charged Off” shall have a meaning correlative thereto.
“Claims Escrow Account” has the meaning set forth in Section 8.28(a).
“Claims Escrow Account Funding Condition” means a condition that is satisfied if the principal balance of the Claims Escrow Account is five million dollars ($5,000,000).
“Closing” has the meaning set forth in Section 3.1.
“Closing Date” has the meaning set forth in Section 3.1.
“Closing Note” has the meaning set forth in Section 2.1.
“Closing Note Purchase Price” has the meaning set forth in Section 3.1.
“Code” means the Internal Revenue Code of 1986, as amended.
“Collateral” means the “Collateral” as defined in the Security Agreement.
“Collection Account” means, with respect to the Borrower, a deposit account of Borrower approved in writing by the Agent, in which (a) all funds on deposit therein shall be solely amounts collected or received in respect of Consumer Loans and (b) no other party shall have a Lien or shall have perfected a Lien, other than any Lien of the Agent and customary
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common law or statutory rights of setoff of banks arising in connection with their depository relationship with Borrower.
“Commitment” has the meaning set forth in Section 2.1.
“Compliance Certificate” means a compliance certificate signed by the chief financial officer of the Borrower (or other authorized executive officer performing a similar function), in substantially the form attached hereto as Exhibit E.
“Consumer Credit” is defined in 12 C.F.R §202.2(h).
“Consumer Loan Agreement” means a consumer loan agreement (together with all related agreements, documents and instruments executed and/or delivered in connection therewith) or similar contract, pursuant to which a Credit Party agrees to make Consumer Loans from time to time.
“Consumer Loans” means unsecured consumer loans marked as “EF SPV, Ltd.” on the monthly financial statements provided to Agent pursuant to Section 8.2(a) that are originated by FinWise Bank and in which a 96.0% participation interest, or such other percentage as mutually agreed upon among FinWise Bank, Borrower and Agent, is sold to Borrower. Consumer Loans will be only be issued to individual residents of the United States of America and in accordance with the Program Guidelines.
“Contingent Obligation” means, as to any Person, any direct or indirect liability, contingent or otherwise, of that Person with respect to any indebtedness, lease, dividend or other obligation of another Person if the primary purpose or intent of the Person incurring such liability, or the primary effect thereof, is to provide assurance to the obligee of such liability that such liability will be paid or discharged, or that any agreements relating thereto will be complied with, or that the holders of such liability will be protected (in whole or in part) against loss with respect thereto.
“Control” means the possession, directly or indirectly, of the power (i) to vote 10% or more of the Capital Stock having ordinary voting power for the election of directors of a Person or (ii) to direct or cause the direction of management and policies of a Person, whether through the ownership of voting securities, by contract, proxy, agency or otherwise. “Controlling” and “Controlled” have meanings correlative thereto.
“Corporate Cash” means, as of any date of determination, the sum of unrestricted cash and Cash Equivalent Investments of Elevate Credit Parent and its Subsidiaries (excluding the Borrower and the Other Borrowers) with respect to which Agent has a perfected Lien as of such date of determination.
“Credit Party” means the Borrower and each Guarantor.
“CSO Loans” means installment loans originated by independent third party lenders, whereby (a) the applicable Elevate Credit Subsidiary acts as a credit services organization on
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behalf of consumers in accordance with applicable state laws and (b) in order to assist the customer in obtaining a loan under such program, Elevate Credit Parent guarantees, on behalf of the customer, the customer’s payment obligations to the third party lender under the loan.
“Current Interest Rate” means the sum of (i) the Base Rate and (ii) the Interest Rate Spread; provided, that the Current Interest Rate shall not exceed the highest lawful rate and may be reduced in accordance with Section 2.2(e).
“Custodian” has the meaning set forth in Section 10.1(c).
“Customer Information” means nonpublic information relating to borrowers or applicants of Consumer Loans, including without limitation, names, addresses, telephone numbers, e-mail addresses, credit information, account numbers, social security numbers, loan balances or other loan information, and lists derived therefrom and any other information required to be kept confidential by the Requirements.
“Debt-to-Equity Ratio” means, (a) with respect to Elevate Credit Parent, at any time, the ratio between (i) the aggregate amount of Indebtedness, liabilities and other obligations of Elevate Credit Parent and its Subsidiaries (including the Obligations), determined in accordance with GAAP, at such time, and (ii) the sum of (A) the aggregate amount of capital contributions made to Elevate Credit Parent by its stockholders and retained earnings of Elevate Credit Parent, determined in accordance with GAAP, in each case, as of such time reduced by (B) the aggregate amount of cash distributions made by Elevate Credit Parent to any of its stockholders, as of such time, and (b) with respect to each Borrower, at any time, the ratio between (i) the aggregate amount of Indebtedness, liabilities and other obligations of the Borrower (including the Obligations), determined in accordance with GAAP, at such time, and (ii) the sum of (A) the aggregate amount of capital contributions made to the Borrower by Elevate Credit Parent and retained earnings of the Borrower, determined in accordance with GAAP, in each case, as of such time reduced by (B) the aggregate amount of cash distributions made by the Borrower to any of its members as of such time.
“Default Rate” means a rate equal to the lesser of (i) the Current Interest Rate plus five percent (5.0%) per annum and (ii) the highest lawful rate.
“Destruction” means any and all damage to, or loss or destruction of, or loss of title to, all or any portion of the Collateral (i) in excess of $100,000 in the aggregate for any Fiscal Year or (ii) that results, individually or in the aggregate, in a Material Adverse Effect.
“Diligence Date” has the meaning set forth in Section 7.14(a).
“Diligence Issues” has the meaning set forth in Section 8.20(a).
“Division/Series Transaction” means, with respect to any Credit Party and/or any of its Subsidiaries that is a limited liability company organized under the laws of the State of Delaware, that any such Person (a) divides into two or more Persons (whether or not the original
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Credit Party or Subsidiary thereof survives such division) or (b) creates, or reorganizes into, one or more series, in each case, as contemplated under the laws of the State of Delaware.
“Dollar” and “$” mean lawful money of the United States.
“Domestic Credit Party” means a Credit Party that is incorporated or otherwise organized under the laws of a state of the United States.
“Elevate Credit Parent” shall mean Elevate Credit, Inc., a Delaware corporation.
“Elevate Credit Subsidiaries” means each of (a) the Subsidiaries of Elevate Credit Parent listed on the signature pages hereto as an “Elevate Credit Subsidiary;” and (b) each other Subsidiary formed or acquired by Elevate Credit Parent from time to time after the Closing Date; provided, no Other Borrower shall be deemed to be an Elevate Credit Subsidiary.
“Eligible Consumer Loan” means, as of any date of determination, a Consumer Loan that is subject to a first priority Lien in favor of Agent and which are not any of the following:
(a)Consumer Loan with a principal payment that is greater than sixty (60) days past due on any contractual payment due date or is otherwise a Charged Off Consumer Loan, or is charged off in accordance with the Program Guidelines;
(b)Consumer Loan to employees of any Credit Party;
(c)Consumer Loan not originated to a person domiciled in the United States;

(d)Consumer Loan not denominated in U.S. Dollars;

(e)Consumer Loan involved in litigation or subject to legal, bankruptcy or insolvency proceedings or with underlying borrowers subject to bankruptcy or insolvency proceedings;

(f)Consumer Loan with a balloon payment and/or Consumer Loan that is a non-amortizing account;

(g)Consumer Loan with original term in excess of thirty-six (36) months;

(h)Consumer Loan originated, acquired or participated in a manner that is not in compliance with the Program Guidelines within each respective state where such Consumer Loan is originated;

(i)Consumer Loan that violates applicable consumer protection, state or usury laws in any material respect;

(j)Consumer Loan that is subject to assignment or confidentiality restrictions applicable to FinWise Bank or the underlying borrower;
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(k)Consumer Loan originated to residents in states where FinWise Bank was not licensed or registered as required by applicable state law when such Consumer Loan was originated;

(l)Consumer Loan with an original principal amount greater than $10,000;

(m)Consumer Loan with an annual percentage rate of less than thirty percent (30%); and

(n)Consumer Loan that has been modified outside of the Program Guidelines or is a Modified and Re-Aged Consumer Loan that has been modified outside of the modification policy approved in writing by Agent, in each case unless approved by Agent in its sole discretion;
provided, for the avoidance of doubt, any reference in this definition to the Program Guidelines shall be the Program Guidelines in effect before any amendment, modification or supplement unless such amendment, modification or supplement has been approved by the Agent in writing in accordance with the definition of “Program Guidelines”.
“Employee Benefit Plan” means any “employee benefit plan” as defined in Section 3(3) of ERISA (a) which is or was sponsored, maintained or contributed to by, or required to be contributed to by, any Credit Party, any Subsidiary of any Credit Party or any of their ERISA Affiliates, or (b) with respect to which, any Credit Party or any Subsidiary of any Credit Party may have liability (contingent or otherwise).
“Environmental Laws” means all applicable federal, state, local or foreign laws relating to pollution or protection of human health or the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata), including, without limitation, laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous Materials”) into the environment, the exposure of humans thereto, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well as all regulatory authorizations, codes, decrees, demands or demand letters, injunctions, judgments, licenses, notices of violation or similar notice letters, orders, permits, plans or regulations issued, entered, promulgated or approved thereunder.
“Equity Interests” means Capital Stock and all warrants, options and other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock, whether or not such debt security includes the right of participation with Capital Stock).
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time.
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“ERISA Affiliate” means, as to any Credit Party, any trade or business (whether or not incorporated) that is a member of a group which includes such Credit Party and which is treated as a single employer under Section 414 of the Code.
“ERISA Event” means (a) the occurrence of a “reportable event” within the meaning of Section 4043 of ERISA and the regulations issued thereunder with respect to any Pension Plan (excluding those for which the provision for 30 day notice to the PBGC has been waived by regulation) with respect to an ERISA Affiliate; (b) the failure to meet the minimum funding standards of Sections 412 and 430 of the Code with respect to any Pension Plan (whether or not waived in accordance with Section 412(c) of the Code) or the failure to make by its due date a required installment under Section 430(j) of the Code with respect to any Pension Plan or the failure to make any required contribution to a Multiemployer Plan; (c) the provision by the administrator of any Pension Plan pursuant to Section 4041(a)(2) of ERISA of a notice of intent to terminate such plan in a distress termination described in Section 4041(c) of ERISA; (d) the withdrawal by any of the Credit Parties, any of their respective Subsidiaries or any of their respective ERISA Affiliates from any Pension Plan with two or more contributing sponsors or the termination of any such Pension Plan resulting in liability to any of the Credit Parties, any of their respective Subsidiaries or any of their respective ERISA Affiliates pursuant to Section 4063 or 4064 of ERISA; (e) the institution by the PBGC of proceedings to terminate any Pension Plan, or the occurrence of any event or condition which reasonably might be expected to constitute grounds under ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan; (f) the imposition of liability on any of the Credit Parties, any of their respective Subsidiaries or any of their respective ERISA Affiliates pursuant to Section 4062(e) or 4069 of ERISA or by reason of the application of Section 4212(c) of ERISA; (g) the withdrawal of any of the Credit Parties, any of their respective Subsidiaries or any of their respective ERISA Affiliates in a complete or partial withdrawal (within the meaning of Sections 4203 and 4205 of ERISA) from any Multiemployer Plan if there is any potential liability therefor, or the receipt by any of the Credit Parties, any of their respective Subsidiaries or any of their respective ERISA Affiliates of notice from any Multiemployer Plan that it is in reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA, or that it intends to terminate or has terminated under Section 4041A or 4042 of ERISA; (h) the occurrence of an act or omission which reasonably might be expected to give rise to the imposition on any of the Credit Parties, any of their respective Subsidiaries or any of their respective ERISA Affiliates of fines, penalties, taxes or related charges under Sections 4975 or 4971 of the Code or under Section 409, Section 502(c), (i) or (l), or Section 4071 of ERISA in respect of any Employee Benefit Plan; (i) the assertion of a material claim (other than routine claims for benefits) against any Employee Benefit Plan other than a Multiemployer Plan or the assets thereof, or against any of the Credit Parties, any of their respective Subsidiaries or any of their respective ERISA Affiliates in connection with any Employee Benefit Plan; (j) receipt from the Internal Revenue Service of notice of the failure of any Pension Plan (or any other Employee Benefit Plan intended to be qualified under Section 401(a) of the Code) to qualify under Section 401(a) of the Code, or the failure of any trust forming part of any Pension Plan to qualify for exemption from taxation under Section 501(a) of the Code; or (k) the imposition of a Lien pursuant to Section 401(a)(29) or 430(k) of the Code or pursuant to ERISA with respect to any Pension Plan.
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“Event of Default” has the meaning set forth in Section 10.1.
“Event of Default Commitment Suspension or Termination Notice” has the meaning set forth in Section 10.2(a).
“Event of Default Notice” has the meaning set forth in Section 10.2(a).
“Event of Default Redemption” has the meaning set forth in Section 10.2(a).
“Event of Default Redemption Notice” has the meaning set forth in Section 10.2(a).
“Event of Default Redemption Price” has the meaning set forth in Section 10.2(a).
“Event of Loss” means any Destruction to, or any Taking of, any asset or property of any Credit Party or any of their Subsidiaries.
“Excess Concentration Amount” shall include the following:
(a)The aggregate principal balance of all Eligible Consumer Loans, as of any date of determination, that have principal payments that are greater than or equal to one (1) day past due and less than or equal to thirty (30) days past due on such date in excess of ten percent (10%) of the aggregate principal balance of all of the Eligible Consumer Loans;
(b)The aggregate principal balance of all Eligible Consumer Loans, as of any date of determination, that have principal payments that are greater than thirty (30) days and less than or equal to sixty (60) days past due on such date in excess of five and one-half percent (5.5%) of the aggregate principal balance of all of the Eligible Consumer Loans; or

(c)The aggregate principal balance of all Eligible Consumer Loans that are Modified and Re-Aged Consumer Loans in excess of five percent (5%) of the aggregate principal balance of all of the Eligible Consumer Loans.

“Excess Spread” means, as of any date of determination, the ratio expressed as a percentage of (a) the aggregate amount of interest collections from Consumer Loans less any Charge Offs, in each case, in the calendar month immediately prior to the calendar month that includes such date of determination over (b) the aggregate principal balance of Consumer Loans as of the first day of the calendar month immediately prior to the calendar month that includes such date of determination; provided, if the date of determination is the last day of the calendar month, “Excess Spread” means the ratio expressed as a percentage of (a) the aggregate amount of interest collections from Consumer Loans less any Charge Offs, in each case, in the calendar month that includes such date of determination over (b) the aggregate principal balance of Consumer Loans as of the first day of the calendar month that includes such date of determination.
“Excluded Taxes” means, in respect of the Agent or any Holder or Lender, as applicable, (a) income taxes imposed on the net income of such Person, (b) franchise taxes imposed on the
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net income of such Person, in each case by the jurisdiction under the laws of which such Person is organized or qualified to do business or a jurisdiction or any political subdivision thereof in which such Person engages in business activity, other than activity or connection arising from such Person having executed, delivered, become a party to, enjoyed or exercised its rights under, performed its obligations under, received payments under, received or perfected a security interest under, or engaged in any other transaction contemplated under this Agreement or any Transaction Document, or sold or assigned any interest in any Note or any of the other Transaction Documents.
“Extraordinary Receipts” means any cash received by any Credit Party or any of their Subsidiaries outside the ordinary course of business (and not consisting of proceeds described in Sections 2.3(b)(i), (b)(ii), (b)(iii), (b)(iv) or (b)(vi)), including, without limitation, (a) foreign, United States, state or local tax refunds outside the ordinary course of business, (b) pension plan reversions outside the ordinary course of business, (c) judgments, proceeds of settlements or other consideration of any kind in excess of $500,000 in the aggregate in connection with any cause of action (but excluding any amounts received in connection with the collection, sale, or disposition in the ordinary course of business of the Credit Parties of Consumer Loans that are not Eligible Consumer Loans and that have been settled or charged off) and (d) any purchase price adjustment received in connection with any Acquisition.
“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with) and any current or future regulations or official interpretations thereof, and any agreements entered into pursuant to Section 1471(b)(1) of the Code, or any U.S. or non-U,S, fiscal or regulatory legislation, rules, guidance notes or practices adopted pursuant to any intergovernmental agreement entered into in connection with the implementation of such sections of the Code or analogous provisions of non-U.S. law.
“Federal or Multi-State Force Majeure Affected Amount” means, as of any date of determination, an amount equal to the aggregate outstanding principal amount of the Notes on such date multiplied by a fraction, the numerator of which shall be equal to the portion of such aggregate outstanding principal amount for which the proceeds thereof were used to originate Consumer Loans that remain outstanding on such date to borrowers residing in state(s) directly affected by a Federal or Multi-State Force Majeure Event (which amount with respect to each such Consumer Loan shall not exceed the outstanding principal amount of such Consumer Loan on such date) and the denominator of which shall be equal to the aggregate outstanding principal amount of the Notes on such date.
“Federal or Multi-State Force Majeure Event” means (i) any regulatory event or regulatory change at the federal level or in any group of states acting in concert in which the Credit Parties originate Consumer Loans, in each case, that would prohibit or make it illegal for the Credit Parties to continue to originate or collect Consumer Loans in such affected jurisdictions pursuant to the Program or another program of a type similar to the Program or (ii) the termination by FinWise Bank of the Program and the failure by the Credit Parties, after using commercially reasonable efforts during the termination period specified in FinWise Bank’s
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termination notice, to arrange for another partner to originate Consumer Loans or similar products under the Program or another program of similar type to the Program, either of which resulting in a Federal or Multi-State Force Majeure Affected Amount equal to two-thirds or more of the aggregate principal amount then outstanding under the Notes as of the applicable date of determination.
“FinWise Bank” means FinWise Bank, a Utah state chartered bank.
“First Tier Foreign Subsidiary” means a Foreign Subsidiary more than fifty percent (50%) of the voting Equity Interests of which are held directly by a Credit Party or indirectly by a Credit Party through one or more Subsidiaries that are incorporated or otherwise organized under the laws of a state of the United States of America.
“Fiscal Year” means a fiscal year of the Credit Parties.
“Foreign Lender” means a Lender or a Holder that is not a US Person.
“Foreign Subsidiary” means, with respect to any Person, a Subsidiary of such Person, which Subsidiary is not incorporated or otherwise organized under the laws of a state of the United States of America.
“Foreign Subsidiary Credit Party” means any Credit Party that is a Foreign Subsidiary.
“Four Month Charge Off Rate” means, as of any date of determination and with respect to any Vintage Pool, the ratio of (i) the aggregate Charge Off amount in such Vintage Pool during the period beginning on the applicable date of origination through the end of the month of such origination and ending on the fourth consecutive calendar month, beginning with such month of origination to (ii) the aggregate principal balance of such Vintage Pool at the time of origination.
“Fourth Amended and Restated Financing Agreement” means that certain Fourth Amended and Restated Financing Agreement dated as of October 15, 2018 by and among the Borrowers party thereto, the other Credit Parties party thereto, Agent and the Lenders and Holders party thereto.
“Funding Account” means, with respect to the Borrower, a deposit account of Borrower approved in writing by the Agent, in which (a) all funds on deposit therein shall be solely used to fund Consumer Loans and for no other purpose and (b) no other party shall have a Lien or shall have perfected a Lien, other than any Lien of the Agent and customary common law or statutory rights of setoff of banks arising in connection with their depository relationship with Borrower.
“GAAP” means United States generally accepted accounting principles, consistently applied.
“Governmental Authority” means the government of the United States of America, any other nation or any political subdivision of any of the foregoing, whether federal, state or local, and any agency, authority, commission, instrumentality, regulatory body, court, central bank or
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other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.
“Guarantor” means (i) Elevate Credit Parent (ii) each of the Elevate Credit Subsidiaries, and (iii) each other Person that guarantees in writing all or any part of the Obligations.
“Guarantor Payment” has the meaning set forth in Section 9.7(a).
“Hedging Obligations” means, with respect to any specified Person, the obligations of such Person under: (i) interest rate swap agreements (whether from fixed to floating or from floating to fixed), interest rate cap agreements and interest rate collar agreements; (ii) other agreements or arrangements designed to manage interest rates or interest rate risk; and (iii) other agreements or arrangements designed to protect such Person against fluctuations in currency exchange rates or commodity prices.
“Holder” means a holder of a Note.
“Indebtedness” of any Person means, without duplication (i) all indebtedness for borrowed money, (ii) all obligations issued, undertaken or assumed as the deferred purchase price of property or services (including, without limitation, “financing leases” in accordance with GAAP) (other than trade payables entered into in the ordinary course of business), (iii) all reimbursement or payment obligations with respect to letters of credit, surety bonds and other similar instruments, (iv) all obligations evidenced by notes, bonds, notes or similar instruments whether convertible or not, including obligations so evidenced incurred in connection with the acquisition of property, assets or businesses, (v) all indebtedness created or arising under any conditional sale or other title retention agreement, or incurred as financing, in either case with respect to any property or assets acquired with the proceeds of such indebtedness (even though the rights and remedies of the seller or bank under such agreement in the event of default are limited to repossession or sale of such property), (vi) all indebtedness referred to in clauses (i) through (v) above secured by (or for which the holder of such indebtedness has an existing right, contingent or otherwise, to be secured by) any mortgage, lien, pledge, charge, security interest or other encumbrance upon or in any property or assets (including accounts and contract rights) owned by any Person, even though the Person which owns such assets or property has not assumed or become liable for the payment of such indebtedness, (vii) all Contingent Obligations in respect of indebtedness or obligations of others of the kinds referred to in clauses (i) through (vi) above; (viii) banker’s acceptances; (ix) the balance deferred and unpaid of the purchase price of any property or services due more than three months after such property is acquired or such services are completed; (x) Hedging Obligations; and (xi) obligations under convertible securities of any Credit Party or any of their Subsidiaries. In addition, the term “Indebtedness” of any Credit Party or any of their Subsidiaries, as applicable, includes (a) all Indebtedness of others secured by a Lien on any assets of any Credit Party or any of their Subsidiaries (whether or not such Indebtedness is assumed by any Credit Party or any of such Subsidiaries), (b) to the extent not otherwise included, the guarantee by any Credit Party or any of their Subsidiaries of any Indebtedness of any other Person and (c) the absolute value of any negative amounts in any accounts owned by any Credit Party.
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“Indemnified Liabilities” has the meaning set forth in Section 13.12.
“Indemnitees” has the meaning set forth in Section 13.12.
“Insolvency Proceeding” means any corporate action, legal proceeding or other procedure or formal step taken in relation to (a) the suspension of payments, a moratorium of any indebtedness, winding-up, dissolution, administration or reorganization (by way of voluntary arrangement, scheme of arrangement or otherwise (other than for the purpose of a reconstruction or amalgamation the terms of which have been approved by the Agent)) of Elevate Credit Parent, any of its Subsidiaries or the Borrower; (b) a composition, compromise, assignment or arrangement with any creditor of Elevate Credit Parent, any of its Subsidiaries or the Borrower; (c) the appointment of a liquidator, receiver, administrative receiver, administrator, compulsory manager or other similar officer in respect of Elevate Credit Parent, any of its Subsidiaries or the Borrower or any of their respective assets; or (d) enforcement of any security over any assets of Elevate Credit, any of its Subsidiaries or the Borrower, in each case, or any analogous procedure or formal step taken in any jurisdiction.
“Insolvent” means, with respect to any Person, (a) the present fair saleable value in a non-liquidation context of such Person’s assets is less than the amount required to pay such Person’s total Indebtedness as applicable, or the fair value of the assets of such Person is less than its total liabilities (taking into account contingent and prospective liabilities), (b) such Person is unable to pay its debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities fall due or become absolute and matured, (c) such Person incurs debts that would be beyond its ability to pay as such debts mature, (d) such Person has unreasonably small capital with which to conduct the business in which it is engaged as such business is now conducted and is proposed to be conducted, (e) such Person is deemed to, or is declared to, be unable to pay its debts under applicable law, (f) such Person suspends or threatens in writing to suspend making payments on any of its debts, (g) a moratorium is declared in respect of any Indebtedness of such Person, or (h) as of such date of determination, to the extent such Person is a Borrower, based on information derived from the Borrower’s internal analysis of the assets held by the Borrower and contemplated to be held by the Borrower following such issuance and purchase of Notes and the Borrower’s reasonable forecasts in good faith (which forecasts shall be mutually acceptable to the Borrower and Agent (in each case, which acceptance shall not be unreasonably conditioned, withheld or delayed)), that it is expected that any Obligations under the Notes will not be fully and timely paid when due. The amount of contingent liabilities (such as litigation, guaranties and pension plan liabilities) at any time shall be computed as the amount that, in light of all the facts and circumstances existing at the time, represents the amount that would reasonably be expected to become an actual or matured liability. If a moratorium occurs, the ending of the moratorium will not remedy any Event of Default caused by that moratorium.
“Intellectual Property Rights” has the meaning provided in Section 7.12.
“Intellectual Property Security Agreements” means each trademark security agreement, each patent security agreement and each copyright security agreement, each in form and substance reasonably acceptable to the Agent, entered into from time to time by and among the applicable Credit Party or the applicable Guarantor and the Agent.
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“Interagency Guidelines” means the Interagency Guidelines Establishing Information Security Guidelines, as set forth in Appendix B to 12 C.F.R. Part 30.
“Intercreditor Agreement” means that certain Second Amended and Restated Intercreditor Agreement dated on or about the ClosingSecond Amendment Effective Date and among Agent, the “Borrowers” (as defined therein), the “Collateral Agents” (as defined therein) and the “Grantors” (as defined therein).
“Interest Date” has the meaning provided in Section 2.2(a).
“Interest Rate Spread” means seven and one-half percent (7.5%) per annum.
“Interest Rate Spread Reduction Conditions” means the satisfaction of each of the following conditions:
(a)All of the Credit Parties have been in compliance with all of their obligations and covenants under this Agreement for the six (6) months prior to any date of determination and all of the Credit Parties’ representations and warranties are true, accurate and correct for the six (6) months prior to any date of determination; and
(b)The Borrower shall have satisfied the then applicable Performance Hurdle.

“Inventory” has the meaning provided in the UCC.
“Investment” means, with respect to any Person, any investment in another Person, whether by acquisition of any debt security or Equity Interest, by making any loan or advance, by becoming contingently liable in respect of obligations of such other Person or by making an Acquisition.
“IRS” means the Internal Revenue Service of the United States and any successor thereto.
“Issuance Date” has the meaning provided in Section 2.2(a).
“Joinder Agreement” has the meaning set forth in Section 8.24.
“Late Charge” has the meaning provided in Section 2.4.
“Lender” and “Lenders” has the meaning set forth in the introductory paragraph hereto.
“LIBOR Rate” means the London Interbank Offered Rate last quoted by Bloomberg for deposits of U.S. Dollars for a period of three months. If no such London Interbank Offered Rate exists, such rate will be the rate of interest per annum, as determined by the Agent at which deposits of U.S. Dollars in immediately available funds are offered on the last Business Day of each calendar month by major financial institutions reasonably satisfactory to the Agent in the London interbank market for a period of three months for the applicable principal amount on such date of determination.
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“Lien” means any mortgage, lien, pledge, security interest, conditional sale or other title retention agreement, charge or other security interest or encumbrance of any kind, whether or not filed, recorded or otherwise perfected under applicable law, including any conditional sale or other title retention agreement or any lease or license in the nature thereof, any option or other agreement to sell or give a security interest in, or any agreement or arrangement having similar effect.
“Loan to Value Ratio” means, as of any date of determination, the ratio of (a) the outstanding principal balance of the Notes to (b) the Borrowing Base, in each case, as of such date of determination.
“LTV Covenant Cure Amount” has the meaning provided in Section 8.1(a).
“LTV Covenant Cure Obligation” has the meaning provided in Section 8.1(a).
“LTV Covenant Default” has the meaning provided in Section 8.1(a).
“M&A Event” means a Change of Control of Elevate Credit Parent.
“Material Adverse Effect” means any material adverse effect on the business, properties, assets, operations, the Collateral, results of operations, or condition (financial or otherwise) or prospects of the Credit Parties and their Subsidiaries, taken as whole, or on the transactions contemplated hereby or by the other Transaction Documents, or on the authority or ability of any Credit Party or any of their respective Subsidiaries to fully and timely perform its obligations under any Transaction Document, in each case, as determined by the Agent in its sole but reasonable discretion.
“Material Contract” means any contract or other arrangement to which any Credit Party or any of its Subsidiaries is a party (other than the Transaction Documents) for which breach, nonperformance, cancellation, termination or failure to renew could reasonably be expected to have a Material Adverse Effect.
“Maturity Date” means the earlier of (a) January 1, 2024 and (b) such earlier date as the unpaid principal balance of all outstanding Notes becomes due and payable pursuant to the terms of this Agreement and the Notes.
“Maximum Commitment” means $150,000,000.250,000,000.
“Modified and Re-Aged Consumer Loans” means Consumer Loans that were modified at any time after origination and meet the definition of a trouble debt restructuring under GAAP.
“Monthly Maintenance Fees” has the meaning set forth in Section 2.10.
“Mortgage” means a mortgage or deed of trust, in form and substance reasonably satisfactory to the Agent, as it may be amended, supplemented or otherwise modified from time to time.
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“Multiemployer Plan” means any Employee Benefit Plan which is a “multiemployer plan” as defined in Section 3(37) of ERISA.
“Net Proceeds” has the meaning set forth in Section 13.18.
“New Guarantor” has the meaning set forth in Section 8.24.
“New Indebtedness Opportunity” has the meaning set forth in Section 8.19.
“Non-Excluded Taxes” (a) any and all Taxes, other than Excluded Taxes, and (b) to the extent not otherwise described in (a), Other Taxes.
“Notes” has the meaning set forth in Section 2.1.
“Notice of Purchase and Sale” means a notice given by the Borrower to the Agent pursuant to Section 2.1, in substantially the form of Exhibit F hereto.
“Obligations” means any and all obligations, liabilities and indebtedness, including without limitation, principal, interest (including, but not limited to, interest calculated at the Default Rate and post-petition interest in any proceeding under any Bankruptcy Law), Late Charges, Monthly Maintenance Fees, Prepayment Premium, and other fees, costs, expenses and other charges and other obligations arising under the Transaction Documents, of the Credit Parties to the Agent, the Holders and the Lenders or to any parent, affiliate or subsidiary of the Agent, such Holders or such Lenders of any and every kind and nature, howsoever created, arising or evidenced and howsoever owned, held or acquired, whether now or hereafter existing, whether now due or to become due, whether primary, secondary, direct, indirect, absolute, contingent or otherwise (including, without limitation, obligations of performance), whether several, joint or joint and several, and whether arising or existing under written or oral agreement or by operation of law.
“Optional Reborrowing” has the meaning set forth in Section 2.3(c).
“Optional Revolving Date” means the first or last calendar day of any calendar month in the first calendar quarter.
“Original Jurisdiction” means, in relation to a Credit Party, the jurisdiction under whose laws that Credit Party is incorporated as of the Closing Date or, in the case of a New Guarantor, as of the date on which such New Guarantor becomes party to this Agreement as a New Guarantor.
“Other Borrowers” means the “Borrowers” under and as defined in the Other Financing Agreement.
“Other Financing Agreement” means the Fifth Amended and Restated Financing Agreement dated as of February 7, 2019 by and among Rise SPV, LLC, Elevate Credit Service, LLC, the other “Guarantors” from time to time party thereto, the “Lenders” from time to time
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party thereto and Victory Park Management, LLC, as administrative agent, as amended, restated, supplemented or otherwise modified from time to time.
“Other Taxes” has the meaning set forth in Section 2.6(b).
“Outside Legal Counsel” means counsel selected by the Borrower from time to time.
“Participant Register” has the meaning set forth in Section 13.8.
“Participation Agreement” means the Participation Agreement dated as of October 15, 2018 by and between the Borrower and FinWise Bank.
“Past Due Roll Rate” means the rate expressed as a percentage, as of the last day of any calendar month, of the ratio of (i) the aggregate outstanding principal balance of Consumer Loans (a) that have a principal payment that is one or more days past due but not greater than thirty days past due or (b) that did not have a principal payment that is one or more days past due in the calendar month immediately prior to the calendar month that includes the date of determination but became charged off in accordance with the Program Guidelines in the calendar month that includes such date of determination, in each case, in the calendar month that includes such date of determination to (ii) the aggregate outstanding principal balance of Consumer Loans that do not have a principal payment that became one or more days past due or is otherwise charged off in accordance with the Program Guidelines, in each case, as of the last day of the calendar month immediately prior to the calendar month that includes such date of determination.
“PBGC” means the Pension Benefit Guaranty Corporation or any successor thereto.
“Pension Plan” means any Employee Benefit Plan, other than a Multiemployer Plan, which is subject to Sections 412 and 430 of the Code or Section 302 of ERISA.
“Performance Hurdle” means that the Elevate Credit Parent has a minimum net income in the 2019 Fiscal Year of $22,000,000 and has a minimum net income in the 2020 Fiscal Year equal to an amount to be agreed upon by the Agent and each Credit Party no later than February 15, 2020.of $30,000,000.
“Permitted Dispositions” means (i) sales of Inventory in the ordinary course of business, (ii) disposals of obsolete, worn out or surplus equipment in the ordinary course of business, (iii) the granting of Permitted Liens, (iv) the licensing of patents, trademarks, copyrights and other Intellectual Property Rights in the ordinary course of business consistent with past practice, (v) subject to no adverse selection by the Credit Parties, dispositions and sales of Consumer Loans by the Credit Parties for which Lender has not provided funding for Borrower to purchase a participation interest therein, (vi) collection, sale, or disposition in the ordinary course of business of the Credit Parties of Consumer Loans that are not Eligible Consumer Loans and that have been settled or charged off, and (vii) reasonable expenditures of cash in the ordinary course of business or as otherwise approved by the board of directors (or similar governing body) of the applicable Credit Party.
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“Permitted Indebtedness” means (i) Indebtedness of any (A) Domestic Credit Party to Elevate Credit Parent or any other Domestic Credit Party and (B) Foreign Subsidiary Credit Party to any other Foreign Subsidiary Credit Party; provided, in each case, all such Indebtedness shall be unsecured, (ii) Indebtedness in respect of netting services, overdraft protections and otherwise in connection with customary deposit accounts maintained by any Credit Party as part of its ordinary cash management program, (iii) performance guaranties in the ordinary course of business and consistent with historic practices of the obligations of suppliers, customers, franchisees and licensees of Elevate Credit Parent and its subsidiaries, (iv) guaranties by Elevate Credit Parent of Indebtedness of any subsidiary Credit Party or guaranties by any Domestic Credit Party of any Indebtedness of Elevate Credit Parent with respect, in each case, to Indebtedness otherwise permitted to be incurred pursuant to this definition, (v) Indebtedness which is secured by Liens permitted under clause (xii) of the definition of “Permitted Liens”, (vi) Indebtedness of any subsidiary Credit Party with respect to financing leases; provided, the principal amount of such Indebtedness shall not exceed at any time $5,000,000 for such subsidiary Credit Parties, (vii) purchase money Indebtedness of any subsidiary Credit Parties; provided, (A) any such Indebtedness shall be secured only by the asset acquired in connection with the incurrence of such Indebtedness and (B) the aggregate amount of all such Indebtedness shall not exceed at any time $2,500,000 in the aggregate for such subsidiary Credit Parties, (viii) other unsecured Indebtedness of any subsidiary Credit Party, which is subordinated to the Obligations on terms acceptable to Agent in its sole discretion in an aggregate amount not to exceed at any time $25,000,000, excluding any CSO Loans and (ix) guaranties by the Credit Parties in favor of the Agent, for the benefit of the Lenders and the Holders, hereunder and under the other Transaction Documents; provided, that no Indebtedness otherwise permitted by clauses (viii) or (ix) shall be assumed, created, or otherwise refinanced if an Event of Default (or event or circumstance that, with the passage of time, the giving of notice, or both, would become an Event of Default) has occurred or would result therefrom.
“Permitted Issuance Date” means any two Business Day of each calendar month during the term of this Agreement; provided, that no Permitted Issuance Date will be within 5 Business Days of another Permitted Issuance Date.
“Permitted Liens” means (i) Liens in favor of the Agent, for the benefit of the Lenders and the Holders, (ii) Liens for Taxes, assessments and other governmental charges not delinquent or if obligations with respect to such Taxes are being contested in good faith by appropriate proceedings promptly instituted and diligently conducted so long as such reserves or other appropriate provisions, if any, as shall be required by GAAP shall have been made for any such contested amounts, (iii) statutory Liens of landlords, banks (and rights of set off), of carriers, warehousemen, mechanics, repairmen, workmen and materialmen, and other Liens imposed by law (other than any such Lien imposed pursuant to §§401 (a)(29) or 412(n) of the Code or by ERISA), in each case incurred in the ordinary course of business (A) for amounts not yet overdue, or (B) for amounts that are overdue and that (in the case of any such amounts overdue for a period in excess of five (5) days) are being contested in good faith by appropriate proceedings, so long as such reserves or other appropriate provisions, if any, as shall be required by GAAP shall have been made for any such contested amounts, (iv) Liens incurred in the ordinary course of business in connection with workers’ compensation, unemployment insurance
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and other types of social security, or to secure the performance of tenders, statutory obligations, surety and appeal bonds, bids, leases, government contracts, trade contracts, performance and return of money bonds and other similar obligations (exclusive of obligations for the payment of borrowed money or other Indebtedness), so long as no foreclosure, sale or similar proceedings have been commenced with respect to any portion of the Collateral on account thereof, (v) easements, rights of way, restrictions, encroachments, and other minor defects or irregularities in title, in each case which do not and will not interfere in any material respect with the value or use of the property to which such Lien is attached or with the ordinary conduct of the business of such Person, (vi) any interest or title of a lessor or sublessor under any lease of real estate, (vii) Liens solely on any cash earnest money deposits made by such Person in connection with any letter of intent or purchase agreement permitted hereunder, (viii) purported Liens evidenced by the filing of precautionary UCC financing statements relating solely to operating leases of personal property entered into in the ordinary course of business, (ix) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods, (x) any zoning or similar law or right reserved to or vested in any governmental office or agency to control or regulate the use of any real property, in each case which do not and will not interfere with or affect in any material respect the use, value or operations of any real estate assets or in the ordinary conduct of the business of such Person, (xi) licenses of patents, trademarks and other intellectual property rights granted by such Person in the ordinary course of business and not interfering in any respect with the ordinary conduct of the business of such Person, (xii) Liens (A) which are junior in priority to those of the Agent, for the benefit of the Lenders and the Holders, pursuant to a subordination agreement acceptable to the Agent, (B) which may not be foreclosed upon without the consent of the Agent, (C) which attach only to goods and (D) which, in the aggregate, do not secure Indebtedness in excess of $1,000,000, and (xiii) Liens securing Indebtedness permitted pursuant to clause (ix) of the definition of Permitted Indebtedness; provided, any such Lien shall encumber only the asset acquired with the proceeds of such Indebtedness.
“Permitted Redemption” means the redemption of Notes permitted pursuant to Section 2.3(a).
“Permitted Redemption Amount” has the meaning set forth in Section 2.3(a)(i).
“Permitted Redemption Date” means the date on which the Borrower has elected to redeem the Notes in accordance with Section 2.3(a).
“Permitted Redemption Notice” has the meaning set forth in Section 2.3(a)(i).
“Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity and a government or any department or agency thereof.
“Plan” means any Multiemployer Plan or Pension Plan.
“Prepayment Premium” means the premium to be paid in connection with certain prepayments of the Notes pursuant to this Agreement, including pursuant to Section 2.3(a) and
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Section 2.3(b), but specifically excluding any mandatory prepayment pursuant to Sections 2.3(b)(ii), 2.3(b)(v), 2.3(b)(vi) or 2.3(b)(vii) (solely to the extent such excess required to be applied as a prepayment relates to a prepayment under Sections 2.3(b)(ii), 2.3(b)(v) or 2.3(b)(vi)). Such prepayment premium shall be equal to, with respect to such prepayment to be made or made during any period set forth in the table below, the product of (a) the percentage set forth beside such period in such table and (b) the greater of (i) the aggregate principal amount of the Notes then prepaid or required to be prepaid (excluding the principal amount of any Optional Reborrowings repaid one hundred eighty (180) or more days prior to the applicable prepayment) or (ii) the aggregate principal amount of the Notes prior to an Optional Reborrowing pursuant to Section 2.3(c):
Period Prepayment Premium
January 1, 2022 through and including December 31, 2022 5.0%
January 1, 2023 through and including December 31, 2023 2.0%
    ;provided, that such prepayment premium in connection with a prepayment of the Notes pursuant to Section 2.3(a) in connection with an M&A Event shall equal an amount equal to the sum of (i) the product of (A) the number of days from the date of such prepayment until January 1, 2022 divided by 360 days, (B) the product of the greater of (x) the highest aggregate principal amount of the Notes at any time prior to such prepayment (excluding the principal amount of any Optional Reborrowings repaid one hundred eighty (180) or more days prior to the applicable prepayment) or (y) the aggregate principal amount of the Notes prior to an Optional Reborrowing pursuant to Section 2.3(c) and (C) the Current Interest Rate, and (ii) the product of (A) the greater of (x) the highest aggregate principal amount of the Notes at any time prior to such prepayment (excluding the principal amount of any Optional Reborrowings repaid one hundred eighty (180) or more days prior to the applicable prepayment) or (y) the aggregate principal amount of the Notes prior to an Optional Reborrowing pursuant to Section 2.3(c) and (B) five percent (5%).

“Principal Only Assignment” has the meaning set forth in Section 13.8.
“Proceeding” has the meaning set forth in Section 7.15.
“Program” means the lending program for the solicitation, marketing, and origination of Consumer Loans pursuant to Program Guidelines.
“Program Guidelines” means those guidelines established by FinWise Bank, attached as Schedule 1.1 hereto, for the administration of the Program, as amended, modified or supplemented from time to time by FinWise Bank with the prior written consent of the Borrower to the extent such consent is required pursuant to the Participation Agreement; provided, the Borrower will not provide such consent without the prior written consent of the Agent.
“Property” means any right or interest in or to property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible, including, without limitation, Capital Stock.
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“Qualified Funding Failure” has the meaning set forth in Section 2.3(a)(iii).
“Receivables” means the indebtedness and other obligations owed to the Borrower, Elevate Credit Parent or any other Credit Party in connection with any and all liens, title retention and security agreements, chattel mortgages, chattel paper, bailment leases, installment sale agreements, instruments, consumer finance paper and/or promissory notes securing and evidencing unsecured multi-pay consumer installment loans made, and/or time sale transactions or acquired by a Credit Party which were originated in accordance with the Program Guidelines.
“Register” has the meaning set forth in Section 2.8.
“Related Parties” of any Person means such Person’s Affiliates or any of its respective partners, directors, agents, employees and controlling persons.
“Relevant Jurisdiction” means, in relation to a Credit Party, (a) its Original Jurisdiction; (b) any jurisdiction where any asset subject to or intended to be subject to the Collateral to be created by it is situated; (c) any jurisdiction where it conducts its business; and (d) the jurisdiction whose laws govern the perfection of any of the Security Documents entered into by it.
“Republic Financing Agreement” means that certain Amended and Restated Financing Agreement dated as of February 7, 2019 by and among Elastic SPV, Ltd., Elevate Credit Service, LLC, the other “Guarantors” from time to time party thereto, the “Lenders” from time to time party thereto and Victory Park Management, LLC, as administrative agent, as amended, restated, supplemented or otherwise modified from time to time.
“Required Lenders” means at any time (a) the Lenders then holding more than fifty percent (50%) of the aggregate Maximum Commitments then in effect plus the aggregate unpaid principal balance of the Notes then outstanding, or (b) if the Maximum Commitments have been terminated, the Holders of Notes then holding more than fifty percent (50%) of the aggregate unpaid principal balance of the Notes then outstanding.
“Required Prepayment Date” has the meaning set forth in Section 2.3(d).
“Requirements” means all applicable federal and state laws and regulations related, directly or indirectly, to the following: credit (including, without limitation, Consumer Credit); servicing; disclosures, information security and privacy and regulations and industry guidance and requirements (including, but not limited to, guidance issued by the Payment Card Industry); the USA Patriot Act; the Office of Foreign Asset Controls’ rules and regulations; the Interagency Guidelines; debt collection and debt collection practices laws and regulations applicable to the Credit Parties or the Program; the federal Truth in Lending Act; the federal Electronic Funds Transfer Act; the federal Equal Credit Opportunity Act; the federal Gramm-Leach-Bliley Act; and the federal Fair Debt Collection Practices Act.
“Reviewing Party” or “Reviewing Parties” has the meaning set forth in Section 8.20(a).
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“Revolving Amount” has the meaning set forth in Section 2.3(c).
“Revolving Conditions” means the satisfaction of each of the following conditions as of any date of determination:
(a)The Borrower is in compliance with all of its obligations and covenants under this Agreement and all of the Borrower’s representations and warranties are true, accurate and correct; and
(b)No Event of Default (or event or circumstance that, with the passage of time, the giving of notice, or both, would become an Event of Default) has occurred or would result therefrom.

“ROFR Notice” has the meaning set forth in Section 8.19.
“Schedules” has the meaning set forth in Article 7.
“Second Amendment Effective Date” means July 31, 2020.
“Security Agreement” means a Pledge and Security Agreement, substantially in the form attached hereto as Exhibit B.
“Security Documents” means the Security Agreement, the Intellectual Property Security Agreements and all other instruments, documents and agreements delivered by any of the Credit Parties, any of their respective Subsidiaries, Affiliates or any equityholder of any of the Credit Parties in order to grant to Agent (on behalf of the Lenders), any Lender or any Holder a Lien on any real, personal or mixed Property of such Person as security for the Obligations.
“State Force Majeure Event” means any regulatory event or regulatory change in any state in which the Credit Parties originate Consumer Loans that would prohibit or make it illegal for the Credit Parties to continue to originate or collect Consumer Loans in such state pursuant to the Program or another program of a type similar to the Program.
“State Force Majeure Paydown Amount” means, as of any date of determination, an amount designated in writing by the Borrower to the Agent within ten (10) days following such date equal to the aggregate outstanding principal amount of the Notes on such date multiplied by a fraction, the numerator of which shall be equal to the portion of such aggregate outstanding principal amount for which the proceeds thereof were used to originate Consumer Loans that remain outstanding on such date to borrowers residing in state(s) affected by a State Force Majeure Event (which amount with respect to each such Consumer Loan shall not exceed the outstanding principal amount of such Consumer Loan on such date) and the denominator of which shall be equal to the aggregate outstanding principal amount of the US Notes on such date.
“Subsequent Closing” has the meaning set forth in Section 3.2.
“Subsequent Closing Date” has the meaning set forth in Section 3.2.
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“Subsequent Closing Note Purchase Price” has the meaning set forth in Section 3.2.
“Subsidiaries” has the meaning set forth in Section 7.1.
“Swap Rate” means the forward swap rate based on the London Interbank Offered Rate last quoted by Bloomberg for deposits of U.S. Dollars for a period of three months, and taking into account the time period between the Issuance Date and the Maturity Date as determined by the Agent in its sole reasonable discretion based on the Bloomberg SWPM calculator. If no such London Interbank Offered Rate exists, such rate will be the rate of interest per annum, as determined by the Agent at which deposits of U.S. Dollars in immediately available funds are offered on the last Business Day of each calendar month by major financial institutions reasonably satisfactory to the Agent in the London interbank market for a period of three months for the applicable principal amount on such date of determination.
“Taking” means any taking of any property of any Credit Party or any of their Subsidiaries or any portion thereof, in or by condemnation or other eminent domain proceedings pursuant to any law, general or special, or by reason of the temporary requisition of the use of such assets or any portion thereof, by any Governmental Authority, civil or military (i) in excess of $250,000 in the aggregate for any Fiscal Year or (ii) that results, either individually or in the aggregate, in a Material Adverse Effect.
“Taxes” means any and all current or future (a) foreign, federal, state or local income, gross receipts, franchise, estimated, alternative minimum, add-on minimum, sales, use, transfer, registration, value added, excise, parking, unclaimed property/escheatment, natural resources, severance, stamp, occupation, occupancy, ad valorem, premium, windfall profit, environmental, customs, duties, real property, personal property, capital stock, social security, unemployment, disability, payroll, license, employee or other withholding, or other tax of any kind whatsoever, (b) any liability for the payment of amounts of the type described in clause (a) hereof as a result of being at any time a transferee of, or a successor in interest to, any person, and (c) any interest, penalties or additions to tax or additional amounts (whether disputed or not) in respect of the foregoing.
“Tax Return” means any return, declaration, report, claim for refund, or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof.
“Total Cash” means, as of any date of determination, the sum of all unrestricted cash and Cash Equivalent Investments of Elevate Credit Parent and all other Credit Parties. For purposes of clarification, unrestricted cash includes all cash of the Credit Parties that is being held by an ACH provider prior to remittance to a Credit Party.
“Trailing Excess Spread” means, as of any date of determination, the average of the Excess Spread in (i) the calendar month immediately prior to the calendar month that includes such date of determination and (ii) the calendar month that includes such date of determination.
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“Trailing Four Month Charge Off Rate” means, as of any date of determination, the average, for each of the three (3) immediately preceding completed months, of the Four Month Charge Off Rate.
“Trailing Past Due Roll Rate” means, as of any date of determination, the average, of the Past Due Roll Rate in (i) the calendar month immediately prior to the calendar month that includes such date of determination and (ii) the calendar month that includes such date of determination.
“Trailing Twelve Month Charge Off Rate” means, as of any date of determination, the average, for each of the three (3) immediately preceding completed months, of the Twelve Month Charge Off Rate.
“Transaction Documents” has the meaning set forth in Section 7.2.
“Twelve Month Charge Off Rate” means, as of any date of determination and with respect to any Vintage Pool, the ratio of (i) the aggregate Charge Off amount in such Vintage Pool during the period beginning on the applicable date of origination through the end of the month of such origination and ending on the twelfth consecutive calendar month, beginning with such month of origination to (ii) the aggregate principal balance of such Vintage Pool at the time of origination.
“UCC” has the meaning set forth in Section 7.13.
“UK Credit Party” means a Credit Party organized under the laws of the United Kingdom.
“US Person” means any Person that is a “United States Person” as defined in Section 7701(a)(30) of the Code.
“US Tax Compliance Certificate” has the meaning set forth in Section 2.6(d).
“Vintage Pool” means and refers to, at any given time, all Consumer Loans that were originated by FinWise Bank in a particular calendar month. By way of example, and not by way of limitation, all Consumer Loans that were originated in December 2018 shall constitute one Vintage Pool for the calendar month that ended on December 31, 2018; all Consumer Loans that were originated in January 2019 shall constitute one Vintage Pool for the calendar month that ended on January 31, 2019; all Consumer Loans that were originated in February 2019 shall constitute one Vintage Pool for the calendar month that ended on February 28, 2019; and so on.
“Waivable Mandatory Prepayment” has the meaning set forth in Section 2.3(d).
“Withholding Agent” means the Borrower, any Credit Party or the Agent.
Section 1.2    Terms 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
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“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”. Unless the context requires otherwise, (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as 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 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 Agreement and (e) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any right or interest in or to assets and properties of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible. References in this Agreement to “determination” by the Agent include good faith estimates by the Agent (in the case of quantitative determinations) and good faith beliefs by the Agent (in the case of qualitative determinations).
Section 1.3    Accounting and Other Terms. Unless otherwise expressly provided herein, each accounting term used herein shall have the meaning given it under GAAP applied on a basis consistent with those used in preparing the financial statements delivered to Agent pursuant to Section 8.2. Notwithstanding any other provision contained herein, all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to herein shall be made, without giving effect to any election under Accounting Standards Codification 825-10 (or any other Financial Accounting Standard having a similar result or effect) to value any Indebtedness or other liabilities of any Credit Party or any Subsidiary of any Credit Party at “fair value”.
Article 2

BORROWER’S AUTHORIZATION OF ISSUE

Section 2.1    Senior Secured Term Notes.
(a)The Borrower has authorized (a) the issuance to the Lenders on the Closing Date of senior secured term notes in the aggregate principal amount of $53,000,000 (the “Closing Notes”) and (b) the issuance to the Lenders after the Closing Date of additional senior secured term notes in the aggregate principal amount not to exceed, together with the aggregate principal amount of the Closing Notes, the Maximum Commitment, in each case of the foregoing clauses (a) and (b), to be dated the date of issuance thereof, to mature on the Maturity Date, to bear interest as provided in Section 2.2 below and to be in the form of Exhibit A hereto (the “Notes”). The commitment of each Lender to fund its pro rata share of Notes issued by the Borrower as of the Closing Date is set forth opposite such Lender’s name in column three (3) of Section 1 of the Schedule of Lenders attached hereto (such amount as the same may be reduced
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or increased from time to time in accordance with this Agreement, being referred to herein as such Lender’s “Commitment”). The Borrower shall repay the outstanding principal balance of the Notes in full in cash on the Maturity Date, unless accelerated in accordance with Section 10.2 or redeemed or prepaid in accordance with Section 2.3. The proceeds of future purchases of Notes by the Lenders shall be disbursed as the Borrower shall direct on each issuance date of such Note, upon the submission of such evidence as the Agent shall request to verify the satisfaction of the conditions set forth in Section 5.2 below (including, without limitation, a Borrowing Base Certificate delivered in accordance with Section 5.2(g) prior to such disbursement); provided, however, that, after giving effect to any such issuance and purchase of Notes, the aggregate principal amount of all Notes shall not exceed the Maximum Commitment. The Borrower shall deliver to or shall procure the delivery to the Agent a Notice of Purchase and Sale setting forth each proposed issuance of Notes not later than noon, Chicago time, on (A) the fifteenth (15th) day prior to the proposed issuance date upon which the Borrower desires to issue Notes for purchase by the Lenders in an amount of $10,000,000 or less or (B) the thirtieth (30th) day prior to the proposed issuance date upon which the Borrower desires to issue Notes for purchase by the Lenders in an amount of greater than $10,000,000, in each case, or such earlier date as shall be agreed to by the applicable Lenders; provided, further, however, that the Borrower shall be entitled to deliver only two (2) Notices of Purchase and Sale during each calendar month. Each Notice of Purchase and Sale required hereunder (i) shall be irrevocable, (ii) shall specify the amount of the proposed issuance (which shall be in increments of not less than $100,000) under the Notes, (iii) shall specify the proposed issuance date for such proposed issuance, which shall be a Permitted Issuance Date and (iv) shall specify wire transfer instructions in accordance with which such issuance under the Notes shall be funded, to the extend purchased by the Lenders. Upon receipt of any such Notice of Purchase and Sale, the Agent shall promptly notify each Lender thereof and of the amount of such Lender’s pro rata share of the proposed issuance (provided, that at the election of the Agent and each applicable Lender, such Lender(s) may agree to purchase such proposed issuance of Notes on a non pro rata basis in amounts acceptable to Agent and such Lender(s) in their sole discretion and in the event of any such non pro rata purchase by such Lender(s), (i) such Lender(s) purchasing less than their pro rata share of the proposed issuance of Notes shall be automatically deemed to have assigned to the applicable Lender(s) purchasing more than their pro rata share of the proposed issuance of Notes (and such Lender(s) purchasing more than their pro rata share of the proposed issuance of Notes shall be automatically deemed to have assumed) a percentage interest in the respective Commitments of such Lender(s) purchasing less than their pro rata share of the proposed issuance of Notes in amounts sufficient to give effect to such non pro rata purchase and such assignment shall otherwise be deemed to be made pursuant to, and in accordance with, the terms of Section 13.8 without further action or documentation by any Person and (ii) the Schedule of Lenders attached hereto shall be updated by Agent to reflect such assignments of the Commitments) and, subject to the terms and conditions of this Agreement and in reliance upon the representations and warranties of the Credit Parties contained herein, each Lender holding a Commitment shall fund its pro rata share of the proposed issuance of the Notes (subject to, and except as set forth in, the preceding parenthetical in this sentence) on the applicable Permitted Issuance Date in immediately available funds in accordance with the terms of such Notice of Purchase and Sale. Notwithstanding anything to the contrary herein, for purposes of
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clarification, it is hereby agreed that during each calendar month there shall be only, and the Borrower shall not be entitled to specify more than, two (2) Permitted Issuance Dates.
Section 2.2    Interest. The Borrower shall pay interest on the unpaid principal amount of the Notes, in each case, at the rates, time and manner set forth below:
(a)Rate of Interest. Each Note shall bear interest on the unpaid principal amount thereof from the date issued through the date such Note is paid in full in cash (whether upon final maturity, by redemption, prepayment, acceleration or otherwise) at the Current Interest Rate. Interest on each Note shall be computed on the basis of a 360-day year and actual days elapsed and, subject to Section 2.2(b), shall be payable monthly, in arrears, on the third (3rd) Business Day following the last day of each calendar month during the period beginning on the date such Note is issued (the “Issuance Date”) and ending on, and including, the date on which the Obligations under such Note are paid in full (each, an “Interest Date”).
(b)Interest Payments. Interest on each Note shall be payable on each Interest Date or at any such other time the Notes become due and payable (whether by acceleration, redemption or otherwise) by the Borrower to the Agent, for the account of the record holder of such Note, on the applicable Interest Date. Each Interest Date shall be considered the last day of an accrual period for U.S. federal income tax purposes. Notwithstanding anything herein to the contrary, any payment of accrued but unpaid interest due and owing on any Note shall be made by cash only by wire transfer of immediately available funds.
(c)Default Rate. Upon the occurrence of any Event of Default, the Notes shall bear interest (including post-petition interest in any proceeding under any Bankruptcy Law) on the unpaid principal amount thereof at the Default Rate from the date of such Event of Default through and including the date such Event of Default is waived. In the event that such Event of Default is subsequently waived, the adjustment referred to in the preceding sentence shall cease to be effective as of the date of such waiver; provided that interest as calculated and unpaid at the Default Rate during the continuance of such Event of Default shall continue to be due to the extent relating to the days after the occurrence of such Event of Default through and including the date on which such Event of Default is waived. All such interest shall be payable on demand of the Agent.
(d)Savings Clause. In no contingency or event shall the interest rate charged pursuant to the terms of this Agreement exceed the highest rate permissible under any law which a court of competent jurisdiction shall, in a final determination, deem applicable hereto. In the event that such a court determines that the Lenders or Holders have received interest hereunder in excess of the highest applicable rate, the amount of such excess interest shall be applied against the principal amount of the Notes then outstanding to the extent permitted by applicable law, and any excess interest remaining after such application shall be refunded promptly to the Borrower.
(e)Interest Payment Reduction. On or after January 1, 2020, the Current Interest Rate shall be reduced by one-quarter percent (0.25%) if the Interest Rate Spread Reduction Conditions are satisfied during the 2019 calendar year. On or after January 1, 2021, the Current Interest Rate shall be reduced by one-quarter percent (0.25%) if the Interest Rate
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Spread Reduction Conditions are satisfied during the 2020 calendar year. For the avoidance of doubt, if the Interest Rate Spread Reduction Conditions were satisfied during both the 2019 calendar year and the 2020 calendar year, the total reduction in the Current Interest Rate shall be one-half percent (0.50%).

Section 2.3    Redemptions and Payments.
(a)    Permitted Redemption.
(i)    The Borrower may at any time after January 1, 2022, at its option, elect to pay to the Agent, on behalf of the Holders, the Permitted Redemption Amount (as defined below), on the Permitted Redemption Date, by redeeming the aggregate unpaid principal amount of all Notes, in whole (and not in part), whereupon the Commitments of each Lender shall automatically and permanently be terminated (the “Permitted Redemption”); provided that, a Permitted Redemption may occur prior to January 1, 2022 only in connection with an M&A Event. The Borrower may not, at any time, redeem the Notes in part. On or prior to the date which is the thirtieth (30th) calendar day prior to the proposed Permitted Redemption Date, the Borrower shall deliver written notice (the “Permitted Redemption Notice”) to the Agent stating (i) that the Borrower elects to redeem pursuant to the Permitted Redemption and (ii) the proposed Permitted Redemption Date. The “Permitted Redemption Amount” shall be equal to (A) the aggregate unpaid outstanding principal amount of all Notes, (B) all accrued and unpaid interest with respect to such principal amount and all accrued and unpaid fees, (C) all accrued and unpaid Late Charges with respect to such Permitted Redemption Amount, (D) the Prepayment Premium and (E) all other amounts due under the Transaction Documents. The Credit Parties acknowledge and agree that the Prepayment Premium represents bargained for consideration in exchange for the right and privilege to redeem the Notes.
(ii)    A Permitted Redemption Notice delivered pursuant to this subsection shall be irrevocable; provided that such Permitted Redemption Notice may be revoked if for any reason the applicable M&A Event covered by such Permitted Redemption Notice is terminated prior to closing. If the Borrower elects to redeem the Notes pursuant to a Permitted Redemption under Section 2.3(a), then the Permitted Redemption Amount which is to be paid to the Agent, on behalf of the Holders, on the Permitted Redemption Date shall be redeemed by the Borrower on the Permitted Redemption Date, and the Borrower shall pay to the Agent, on behalf of the Holders, on the Permitted Redemption Date, by wire transfer of immediately available funds, an amount in cash equal to the Permitted Redemption Amount.
(iii)    Notwithstanding the foregoing and anything to the contrary herein, (A) if a Federal or Multi-State Force Majeure Event shall have occurred or (B) if the Lenders shall fail to purchase additional Notes requested by the Borrower after the Closing Date in accordance with Section 2.1 and provided that all conditions of such purchase set forth in Section 5.2 shall have been satisfied at the time thereof (a “Qualified Funding Failure”), then the Borrower shall have the right, exercisable upon at least sixty (60) calendar days’ prior written notice to the Agent, to consummate a Permitted Redemption at a price equal to the Permitted Redemption Amount excluding the Prepayment Premium, which Permitted Redemption shall
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otherwise be made in accordance with the provisions of Section 2.3(a)(i) hereof; provided, that such right to consummate a Permitted Redemption at a price equal to the Permitted Redemption Amount excluding the Prepayment Premium shall expire (x) in the case of the foregoing clause (A), upon the cessation of such Federal or Multi-State Force Majeure Event or (y) in the case of the foregoing clause (B), upon written notice from the Agent to the Borrower, given no later than ten (10) calendar days after the Agent’s receipt of the Borrower’s notice of redemption under the foregoing Section 2.3(a)(iii)(B) stating that the Lenders are thereafter willing and able to purchase additional Notes requested by the Borrower, in accordance with Section 2.1 and provided that all conditions of such purchase set forth in Section 5.2 shall have been satisfied at the time thereof; provided further, that, in the case of a Permitted Redemption in respect of the foregoing clause (A), if such Federal or Multi-State Force Majeure Event ceases within the earlier of (i) one (1) year following such Permitted Redemption or (ii) July 1, 2021, the Credit Parties shall give the Agent and Lenders the right to participate in any new Program or substantially similar program to the Program. For purposes of clarification, prior to the expiration of the ten (10) calendar day (or longer, as the case may be) notice of purchase pursuant to the foregoing Section 2.3(a)(iii)(B), the Agent may deliver notice to the Borrower that the Lenders are willing and able to purchase additional Notes and provided that all conditions of such purchase set forth in Section 5.2 shall have been satisfied at the time thereof, whereupon such right to consummate a Permitted Redemption at a price equal to the Permitted Redemption Amount excluding the Prepayment Premium shall automatically terminate, but the Borrower shall at all times thereafter retain the right to consummate a Permitted Redemption at a price equal to the Permitted Redemption Amount including the Prepayment Premium (if applicable), which Permitted Redemption shall otherwise be made in accordance with the provisions of Section 2.3(a)(i) hereof. The provisions of this Section 2.3(a)(iii) set forth the exclusive rights and remedies of the Credit Parties to seek or obtain damages or any other remedy or relief from the Agent or any Lender with respect to any Qualified Funding Failure.
(b)    Mandatory Prepayments.
(i)    On the date of receipt by any Credit Party or any of their Subsidiaries of any net cash proceeds in excess of $200,000 in the aggregate during any Fiscal Year from any Asset Sales (other than Permitted Dispositions), the Borrower shall prepay the Notes as set forth in Section 2.3(e) in an aggregate amount equal to 100% of such net cash proceeds.
(ii)    On the date of receipt by any Credit Party or any of their Subsidiaries, or the Agent as loss payee, of any net cash proceeds from any Destruction or Taking, the Borrower shall prepay the Notes as set forth in Section 2.3(e) in an aggregate amount equal to 100% of such net cash proceeds; provided, so long as no Event of Default (or event or circumstance that, with the passage of time, the giving of notice, or both, would become an Event of Default) shall have occurred and be continuing on the date of receipt thereof or caused thereby, the Borrower shall have the option to apply such net cash proceeds, prior to the date that is 90 days following receipt thereof, for purposes of the repair, restoration or replacement of the applicable assets thereof.
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(iii)    On the date of receipt by any Credit Party or any of their Subsidiaries of any net cash proceeds in excess of $5,000,000 in the aggregate during the term of this Agreement from a capital contribution by any Person (other than an Elevate Credit Subsidiary) to, or the issuance to any Person (other than a Credit Party or an Elevate Credit Subsidiary) of any Equity Interests of any Credit Party or any of their Subsidiaries, the Borrower shall prepay the Notes as set forth in Section 2.3(e) in an aggregate amount equal to 100% of such net cash proceeds.
(iv)    On the date of receipt by any Credit Party or any of their Subsidiaries of any net cash proceeds from the incurrence of any Indebtedness (other than with respect to Permitted Indebtedness) of any Credit Party or any of their Subsidiaries, the Borrower shall prepay the Notes as set forth in Section 2.3(e) in an aggregate amount equal to 100% of such net cash proceeds.
(v)    On the date of receipt by any Credit Party or any of their Subsidiaries of any Extraordinary Receipts, the Borrower shall prepay the Notes as set forth in Section 2.3(e) in an aggregate amount equal to 100% of such Extraordinary Receipts.
(vi)    If at any time the then outstanding principal balance of Notes shall exceed the Maximum Commitment, the Borrower shall immediately prepay the Notes as set forth in Section 2.3(e) in an amount sufficient to eliminate such excess.
(vii)    Concurrently with any prepayment of the Notes pursuant to this Section 2.3(b), the Borrower shall deliver to the Agent a certificate of an authorized officer thereof demonstrating the calculation of the amount of the applicable proceeds. In the event that the Credit Parties shall subsequently determine that the actual amount of such proceeds exceeded the amount set forth in such certificate (including as a result of the conversion of non-cash proceeds into cash), the Borrower shall promptly make an additional prepayment of all the Notes in an amount equal to such excess (or applicable percentage thereof), and the Borrower shall concurrently therewith deliver to the Agent a certificate of an authorized officer thereof demonstrating the derivation of such excess.
(c)    Optional Reborrowing. Subject to the satisfaction of the Revolving Conditions, the Borrower may, at its option once per year on an Optional Revolving Date, elect to pay to the Agent, on behalf of the Holders, the Revolving Amount (as defined below) (the “Optional Reborrowing”). The “Revolving Amount” shall be equal to (A) up to twenty percent (20%) of the aggregate unpaid outstanding principal amount of all Notes, (B) all accrued and unpaid interest with respect to such principal amount repaid and all accrued and unpaid fees and (C) all accrued and unpaid Late Charges with respect to such Revolving Amount. On or prior to the date which is the sixtieth (60th) calendar day prior to the proposed Optional Revolving Date, the Borrower shall deliver written notice to the Agent stating (i) that the Borrower elects to make a payment in connection with an Optional Reborrowing and (ii) the proposed Revolving Amount. The Commitments of each Lender shall not automatically and permanently be terminated or decreased as a result of a payment by Borrower of any Revolving Amount pursuant to this Section 2.3(c) and Borrower may reborrow any Revolving Amount in accordance with
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Section 2.1; provided that reborrowing any such Revolving Amount within one hundred eighty (180) days shall not cause the Current Interest Rate to decrease.
(d)    Waiver of Mandatory Prepayments. Anything contained in Section 2.3(b) to the contrary notwithstanding, in the event the Borrower is required to make any mandatory prepayment (a “Waivable Mandatory Prepayment”) of the Notes, not less than three (3) Business Days prior to the date (the “Required Prepayment Date”) on which the Borrower is required to make such Waivable Mandatory Prepayment, the Borrower shall notify the Agent of the amount of such prepayment, and the Agent shall promptly thereafter notify each Holder holding an outstanding Note of the amount of such Holder’s pro rata share of such Waivable Mandatory Prepayment and such Holder’s option to refuse such amount. Each such Holder may exercise such option by giving written notice to the Borrower and the Agent of its election to do so on or before the first Business Day prior to the Required Prepayment Date (it being understood that any Holder which does not notify the Borrower and the Agent of its election to exercise such option on or before the first Business Day prior to the Required Prepayment Date shall be deemed to have elected, as of such date, not to exercise such option). On the Required Prepayment Date, the Borrower shall pay to the Agent the amount of the Waivable Mandatory Prepayment, which amount shall be applied in an amount equal to that portion of the Waivable Mandatory Prepayment payable to those Holders that have elected not to exercise such option, to prepay the Notes of such Holders.
(e)    Application of Mandatory Prepayments; Prepayment Premium. All mandatory prepayments made pursuant to Section 2.3(b) and not waived pursuant to Section 2.3(d) shall be made to the Agent, for the account of the Holders, as determined by the Agent in its sole discretion. Concurrently with each mandatory prepayment made pursuant to (i) Section 2.3(b) (other than in accordance with Section 2.3(b)(vi)), the Commitment of each Lender shall, at the election of Agent to be given to Borrower within five (5) Business Days after receipt of such mandatory prepayment (or automatically upon the occurrence of any Event of Default described in Section 10.1(c) or Section 10.1(d)), permanently be reduced by the amount of such prepayment and (ii) Section 2.3(b) (other than in accordance with Sections 2.3(b)(ii), 2.3(b)(v), 2.3(b)(vi) or 2.3(b)(vii) (solely to the extent such excess required to be applied as a prepayment relates to a prepayment under Sections 2.3(b)(ii), 2.3(b)(v) or 2.3(b)(vi))), the Borrower shall also pay to the Agent, for the ratable benefit of the Holders, the Prepayment Premium in respect of the Notes repaid or redeemed in connection with such mandatory prepayment.
Section 2.4    Payments. Whenever any payment of cash is to be made by any Credit Party to any Person pursuant to this Agreement, the Notes or other Transaction Document, such payment shall be made in lawful money of the United States of America by a check drawn on the account or accounts of such Credit Party and sent via overnight courier service to such Person at such address as previously provided to the Borrower in writing (which address, in the case of each of the Lenders, shall initially be as set forth on the Schedule of Lenders attached hereto); provided that (i) the Agent, any Holder or any Lender may elect to receive a payment of cash via wire transfer of immediately available funds by providing the Borrower with prior written notice setting out such request and the Agent’s, such Holder’s or such Lender’s wire transfer instructions and (ii) Credit Parties may elect to make a payment of cash via wire transfer of
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immediately available funds in accordance with wire transfer instructions provided by the Agent, each Holder and each Lender upon request therefor. Whenever any amount expressed to be due by the terms of this Agreement or any Note is due on any day which is not a Business Day, the same shall instead be due on the next succeeding day which is a Business Day and, in the case of any Interest Date which is not the date on which the applicable Note is paid in full in cash, the extension of the due date thereof shall not be taken into account for purposes of determining the amount of interest due on such date. Any amount due under the Transaction Documents (other than principal and interest, if the same are already accruing interest at the Default Rate), which is not paid when due shall result in a late charge being incurred and payable by the Borrower in an amount equal to accrued interest at the Default Rate from the date such amount was due until the same is paid in full in cash (“Late Charge”). Such Late Charge shall continue to accrue post-petition in any proceeding under any Bankruptcy Law.
Section 2.5    Dispute Resolution. Except as otherwise provided herein, in the case of a dispute as to the determination of any amounts due and owing pursuant to a redemption under Section 2.3 or otherwise or any other similar or related amount, the Borrower shall submit the disputed determinations or arithmetic calculations via facsimile within three (3) Business Days of receipt, or deemed receipt, of the applicable notice of dispute to the Agent. If the Agent and the Borrower are unable to agree upon such determination or calculation within three (3) Business Days of such disputed determination or arithmetic calculation being submitted to the Agent, then the Borrower shall, within three (3) Business Days submit via facsimile the disputed determinations or arithmetic calculations to an independent outside national accounting firm specified by Agent. The Borrower, at the Borrower’s expense, shall cause the accountant to perform the determinations or calculations and notify the Agent of the results no later than five (5) Business Days from the time it receives the disputed determinations or calculations. Such accountant’s determination or calculation, as the case may be, shall be binding upon all parties absent demonstrable error.
Section 2.6    Taxes.
(a)Any and all payments by or on behalf of the Credit Parties hereunder and under any other Transaction Document shall be made free and clear of and without deduction or withholding for any and all current or future Taxes, levies, imposts, deductions or charges unless required by law. If any Non-Excluded Taxes are required by law to be deducted or withheld from or in respect of any payment or sum payable hereunder or under any Transaction Document by any Withholding Agent to the Agent, any Holder or any Lender, (x) the applicable Withholding Agent shall make such deductions and withholdings within the time allowed and in the minimum amount required by law, (y) the sum payable by the applicable Credit Party shall be increased by the amount (an “Additional Amount”) necessary so that, after making all required deductions and withholdings (including deductions and withholdings applicable to additional sums payable under this Section 2.6(a)) the Agent, such Holder or such Lender, as applicable, shall receive an amount equal to the sum it would have received had no such deductions or withholdings been made and (z) the Withholding Agent shall pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable law and shall promptly provide to the Agent, Holder or Lender, as applicable, an evidence of such
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payment to the relevant Governmental Authority (in a form reasonably satisfactory to the Agent, Holder or Lender, as applicable).
(b)The Borrower will pay to the relevant Governmental Authority in accordance with applicable law any current or future stamp, stamp duty, registration, court, documentary, intangible, recording, filing or similar Taxes or any other excise or property taxes, charges or similar levies that arise from any payment made hereunder or under any Transaction Document, or from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, this Agreement or any Transaction Document that are or would be applicable to the Holders, the Agent, or a Lender (“Other Taxes”).

(c)The Credit Parties agree to indemnify the Agent, each Holder, each Lender and their respective Affiliates for the full amount of Non-Excluded Taxes and Other Taxes paid by the Agent, such Holder, such Lender or such Affiliates and any liability (including penalties, interest and expenses (including reasonable attorney’s and other advisors’ fees and expenses)) arising therefrom or with respect thereto, whether or not such Non-Excluded Taxes or Other Taxes were correctly or legally asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability prepared by the Agent, such Holder, such Lender or such Affiliate, absent manifest error, shall be final conclusive and binding for all purposes. Such indemnification shall be made within thirty (30) days after the date the Agent, such Holder, such Lender or such Affiliate makes written demand therefor. Agent, a Lender, a Holder or any of their respective Affiliates shall notify the Borrower in writing of the receipt by such Person of any written notice from any taxing authority demanding, or threatening to demand, any Tax indemnifiable by the Borrower under this Section 2.6(c), within a reasonable period of time after receipt of such notice.

(d)On the Closing Date, and subsequently on or prior to the date on which a Lender or Holder becomes a Lender or Holder under this Agreement with respect to the Borrower (and from time to time thereafter upon the reasonable request of the Borrower or the Agent), each applicable Lender and Holder shall deliver to the Borrower a completed and signed IRS Form W-8 or IRS Form W-9 (or any successor form), as applicable. In the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate substantially in the form attached hereto as Exhibit I to the effect that such Foreign Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code (a “US Tax Compliance Certificate”).

(e)The Parties agree to treat and report amounts lent under this Agreement and any amount due under the Notes as debt for U.S. federal, state and local income tax purposes. The Credit Parties agree to indemnify the Agent, each Holder, each Lender and their respective Affiliates for the full amount of Taxes and Other Taxes paid by the Agent, such Holder, such Lender or such Affiliates and any liability (including penalties, interest and expenses (including reasonable attorney’s and other advisors’ fees and expenses)) arising
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therefrom or with respect thereto, whether or not such Taxes or Other Taxes were correctly or legally asserted by the relevant Governmental Authority, to the extent such Taxes or Other Taxes are imposed as a result of the treatment of any amounts lent under this Agreement or any amount due under the Notes as other than debt by any Governmental Authority.
(f)Survival. Notwithstanding anything to the contrary herein, each party’s obligations under this Section 2.6 and Section 13.12 shall survive the resignation or replacement of the Agent or any assignment of rights by, or the replacement of, a Lender or Holder, the termination of the Commitments and the repayment, satisfaction or discharge of all obligations under any Transaction Document.

Section 2.7    Reissuance.
(a)Transfer. If any Note is to be transferred, the Holder thereof shall surrender such Note to the Borrower, whereupon the Borrower will forthwith issue and deliver upon the order of such Holder a new Note (in accordance with this Section 2.7), registered as such Holder may request (provided that electronic registration is acceptable), representing the outstanding principal being transferred by such Holder and, if less than the entire outstanding principal amount is being transferred, a new Note (in accordance with this Section 2.7) to such Holder representing the outstanding principal not being transferred.
(b)Lost, Stolen or Mutilated Note. Upon receipt by the Borrower of evidence reasonably satisfactory to the Borrower of the loss, theft, destruction or mutilation of any Note and (i) in the case of loss, theft or destruction, upon delivery of an indemnity agreement reasonably satisfactory to the Borrower (provided, however, that if the Holder is an institutional investor, the affidavit of an authorized partner or officer of such Holder setting forth the circumstances with respect to such loss, theft or destruction shall be accepted as satisfactory evidence thereof and no indemnity agreement or other security shall be required), and (ii) in the case of mutilation, upon surrender and cancellation of the mutilated Note, the Borrower shall execute and deliver to such Holder a new Note (in accordance with this Section 2.7) representing the outstanding principal.

(c)Note Exchangeable for Different Denominations. The Notes are exchangeable, upon the surrender thereof by the Holder at the principal office of the Borrower, for a new Note or Notes (in accordance with this Section 2.7) of like tenor in principal amounts of at least $100,000 representing in the aggregate the outstanding principal of the surrendered Note, and each such new Note will represent such portion of such outstanding principal as is designated by such Holder or such Lender at the time of such surrender.

(d)Issuance of New Notes. Whenever the Borrower is required to issue a new Note pursuant to the terms of this Agreement or the Notes, such new Note (i) shall be of like tenor with the Note being replaced, (ii) shall represent, as indicated on the face of such new Note, the principal remaining outstanding (or, in the case of a new Note being issued pursuant to paragraph (a) or (b) of this Section 2.7, the principal designated by the Holder which, when added to the principal represented by the other new Notes issued in connection with such issuance, equals aggregate principal remaining outstanding under the Note being replaced
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immediately prior to such issuance of new Notes), (iii) shall have an Issuance Date, as indicated on the face of such new Note, which is the same as the Issuance Date of the Note being replaced, (iv) shall have the same rights and conditions as the Note being replaced, and (v) shall represent accrued interest on the principal, Prepayment Premium and Late Charges of the Note being replaced from such Issuance Date.

Section 2.8    Register. The Borrower shall maintain at its principal executive office (or such other office or agency of the Borrower (or the Agent on its behalf) as it may designate by notice to each holder of Notes), a register for the Notes in which the Borrower (or the Agent on its behalf) shall record the name and address of the Person in whose name the Notes have been issued (including the name and address of each transferee) and the principal amount (and stated interest) of Notes held by such Person (the “Register”). The Borrower shall keep the Register open and available at all times during normal business hours for inspection of any Holder, any Lender or their respective representatives. The Register may be maintained in electronic format.
Section 2.9    Maintenance of Register. Notwithstanding anything to the contrary contained herein, the Notes and this Agreement are registered obligations and the right, title, and interest of each Holder, each Lender and their assignees in and to such Notes (or any rights under this Agreement) shall be transferable only upon notation of such transfer in the Register. The Notes shall only evidence a Holder’s, a Lender’s or their assignee’s right, title and interest in and to the related Notes, and in no event is any such Note to be considered a bearer instrument or obligation. This Section 2.9 shall be construed so that the Notes are at all times maintained in “registered form” within the meaning of Sections 163(f), 871(h)(2) and 881(c)(2) of the Code and any related Treasury regulations promulgated thereunder.
Section 2.10    Monthly Maintenance Fee. The Borrower hereby agrees to pay to Agent in arrears on the last Business Day of each calendar month, a monthly maintenance fee in the amount of $5,000 (collectively, the “Monthly Maintenance Fees”). The Borrower agrees that the Monthly Maintenance Fees shall be fully-earned when paid and shall not be refundable in whole or in part under any circumstances.
Article 3
CLOSING

Section 3.1    Initial Closing. In consideration for each applicable Lender’s payment of its pro rata share of the aggregate purchase price (the “Closing Note Purchase Price”) of the Notes to be purchased by the Lenders at the Closing (as defined below), which is set forth opposite such Lender’s name in column four (4) of the Schedule of Lenders attached hereto, the Borrower shall issue and sell to such Lender on the Closing Date (as defined below), and each applicable Lender severally, but not jointly, agrees to purchase from the Borrower on the Closing Date, a Note, in substantially the form attached hereto as Exhibit A, and in the aggregate principal amount as is set forth opposite such Lender’s name in column four (4) of the Schedule of Lenders attached hereto. The closing (the “Closing”) of the transactions contemplated by this Agreement and the issuance of the Notes to be issued on the Closing Date by the Borrower and
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the purchase thereof by the applicable Lenders shall occur at the offices of Katten Muchin Rosenman LLP, 525 West Monroe Street, Suite 1900, Chicago, Illinois 60661. The date and time of the Closing (the “Closing Date”) shall be 10:00 a.m., Chicago time, on the date hereof, subject to notification of satisfaction (or waiver) of the conditions to the Closing set forth in Section 5.1 below (or such later date as is mutually agreed to by the Borrower and the Agent). On the Closing Date, (i) each Lender shall pay its pro rata share of the Closing Note Purchase Price to the Borrower for the Notes to be issued and sold to such Lender at the Closing, by wire transfer of immediately available funds, as more fully set forth on the Schedule of Lenders and (ii) the Borrower shall deliver to each Lender the Notes (in the denominations as such Lender shall have requested prior to the Closing) which such Lender is then purchasing, duly executed on behalf of the Borrower and registered in the name of such Lender or its designee.
Section 3.2    Subsequent Closings. Subject to the satisfaction (or waiver by the Agent in its sole discretion) of the conditions to a Subsequent Closing set forth in Section 5.2 and further subject to Section 10.2(a), each applicable Lender hereby promises to purchase from the Borrower an aggregate principal amount of additional Notes not to exceed, when aggregated with the principal amount of Notes acquired by such Lender prior to such Subsequent Closing (including, without limitation, at the Closing), such Lender’s Commitment. Subject to the satisfaction (or waiver by the Agent) of the conditions to a Subsequent Closing set forth in Section 5.2 and further subject to Section 10.2(a), in consideration for each applicable Lender’s payment of its pro rata share of the aggregate purchase price (the “Subsequent Closing Note Purchase Price”) of the Notes to be purchased by such Lenders at such Subsequent Closing, the Borrower shall issue and sell to each Lender on the applicable Subsequent Closing Date (as defined below), and each Lender severally, but not jointly, agrees to purchase from the Borrower on such Subsequent Closing Date, a principal amount of Notes in the amount each Lender has agreed in writing to pay in respect thereof, pursuant to a Notice of Purchase and Sale. The closing (each a “Subsequent Closing”) of any of the transactions contemplated by this Section 3.2 and the issuance of the additional Notes to be issued to the Lenders at such Subsequent Closing shall occur at the offices of Katten Muchin Rosenman LLP, 525 West Monroe Street, Suite 1900, Chicago, Illinois 60661. With respect to each Subsequent Closing, the date and time of such Subsequent Closing (the “Subsequent Closing Date”) shall be 10:00 a.m., Chicago time, on the date on which the conditions set forth in Section 5.2 below shall be satisfied or waived in accordance with this Agreement (or such later date as is mutually agreed to by the Borrower and the Agent). On each Subsequent Closing Date, (i) each Lender shall pay its pro rata share of the applicable Subsequent Closing Note Purchase Price to the Borrower for the Notes to be issued and sold to such Lender at such Subsequent Closing, by wire transfer of immediately available funds in accordance with the Borrower’s written wire instructions, and (ii) the Borrower shall deliver to each Lender the Notes (in the denominations as such Lender shall have requested prior to such Subsequent Closing) which such Lender is then purchasing, duly executed on behalf of the Borrower and registered in the name of such Lender or its designee.
Article 4
INTENTIONALLY OMITTED
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Article 5
CONDITIONS TO CLOSING AND EACH LENDER’S OBLIGATION TO PURCHASE

Section 5.1    Closing. The obligation of the Agent and the Lenders to close the transactions contemplated by this Agreement is subject to the satisfaction, at or before the Closing Date, of each of the following conditions:
(a)Reserved.
(b)The Borrower shall have executed and delivered, or caused to be delivered, to the Agent evidence satisfactory to the Agent that the Borrower shall pay to the Agent on the Closing Date all fees and other amounts due and owing thereon under this Agreement and the other Transaction Documents.

(c)The Credit Parties shall have executed and/or delivered, or caused to be delivered, to the Agent each of the Security Documents and the Credit Parties shall have executed (to the extent applicable) and/or delivered, or caused to be delivered, to the Agent:
(i)    certificates evidencing any Pledged Equity (as defined in the Security Agreement) pledged to the Agent pursuant to the Security Agreement, together with duly executed in blank, undated stock or unit powers attached thereto; and
(ii)    such other documents relating to the transactions contemplated by this Agreement as the Agent or its counsel may reasonably request.
(d)The Credit Parties shall have executed and/or delivered, or caused to be delivered, to the Agent, without duplication, the deliveries set forth in each of the Index of Closing Documents attached hereto as Exhibit H.
(e)Each Credit Party shall have executed and delivered, or caused to be delivered, to the Agent:
(i)    a certificate evidencing its organization, formation, or incorporation (as applicable) and good standing in its jurisdiction of organization or incorporation issued by the Secretary of State of such jurisdiction, as of a date reasonably proximate to the Closing Date;
(ii)    a certificate evidencing its qualification as a foreign corporation, limited liability company or other entity (as applicable) and good standing issued by the Secretary of State (or comparable office) of each jurisdiction in which such Person is qualified to conduct business and failure to so qualify would cause a Material Adverse Effect, as of a date reasonably proximate to the Closing Date;
(iii)    a certificate as to the fact that no action has been taken with respect to any merger, consolidation, liquidation or dissolution of such Person, or with respect to the sale of substantially all of its assets, nor is any such action pending or contemplated; and
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(iv)    a certificate, executed by the secretary (or other authorized officer) of such Person and dated the Closing Date, as to (A) the resolutions consistent with Section 7.2 as adopted by such Person’s board of directors (or similar governing body) in a form reasonably acceptable to the Agent, (B) such Person’s certificate of incorporation (or similar document), each as in effect at the Closing, (C) such Person’s bylaws or memorandum and articles of association (or similar document), each as in effect at the Closing, and (D) no action having been taken by such Person or its stockholders, members, directors or officers (as applicable) in contemplation of any amendments to items (A), (B), or (C) listed in this Section 5.1(e)(iv), as certified in the form attached hereto as Exhibit C.
(f)The Borrower shall have obtained and delivered to Agent:
(i)    the opinions of Outside Legal Counsel, dated the Closing Date;
(ii)    all governmental, regulatory and third party consents, approvals and notifications, if any, necessary for the closing of the transactions contemplated by this Agreement and the issuance of the Notes to be issued at the Closing;
(iii)    if requested by the Agent, updated Lien searches in the jurisdictions of organization of each Credit Party, the jurisdiction of the chief executive offices of each Credit Party and each jurisdiction where a filing would need to be made in order to perfect the Agent’s and Holders’ security interest in the Collateral, copies of the financing statements on file in such jurisdictions and evidence that no Liens exist other than Permitted Liens;
(iv)    such information in form, scope and substance reasonably satisfactory to the Agent regarding environmental matters relating to all real property owned, leased, operated or used by the Credit Parties as of the Closing Date;
(v)    a certificate from the chief financial officer of the Borrower (or other authorized executive officer performing a similar function) in form and substance satisfactory to the Agent, supporting the conclusions that, after giving effect to the transactions contemplated by the Transaction Documents, the Borrower is not Insolvent; and
(vi)    if requested by the Agent, updated certificates from the Borrower’s insurance broker or other evidence satisfactory to it that all insurance required to be maintained pursuant to this Agreement is in full force and effect, together with endorsements naming the Agent, for the benefit of the Holders, as additional insured and lender’s loss payee thereunder, as applicable.
(g)Each Credit Party shall have authorized the filing of UCC financing statements for each appropriate jurisdiction as is necessary, in the Agent’s sole discretion, to perfect the Agent’s security interest in the Collateral and, if applicable, the filing of the Intellectual Property Security Agreements in the U.S. Patent and Trademark Office and the U.S. Copyright Office, as applicable.
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(h)The Borrower shall have caused to be executed and delivered, to the Agent such landlord waivers, collateral access agreements or other similar documents as the Agent may reasonably request.

(i)The representations and warranties of the Credit Parties shall be true and correct in all material respects (without duplication of any materiality qualifiers) as of the date when made and as of the Closing Date as though made at that time (except for representations and warranties that speak as of a specific date, which shall be true and correct in all material respects (without duplication of any materiality qualifiers) as of such specific date), and the Credit Parties shall have performed, satisfied and complied in all respects with the covenants, agreements and conditions required by the Transaction Documents to be performed, satisfied or complied with by the Credit Parties at or prior to the Closing Date. The Agent shall have received a certificate, executed by the chief executive officer of the Borrower (or other authorized executive officer performing a similar function), dated the Closing Date, to the foregoing effect in respect of the Borrower only and as to such other matters as may be reasonably requested by the Agent, in the form attached hereto as Exhibit D.

(j)No Event of Default (or event or circumstance that, with the passage of time, the giving of notice, or both, would become an Event of Default) shall have occurred and be continuing or would result from the closing of the transactions contemplated by this Agreement or issuance of the Notes to be issued at the Closing.

(k)The Credit Parties shall have paid or reimbursed the Agent and the Lenders for all costs and expenses required to be paid or reimbursed by them on the Closing Date in accordance with Section 8.22 hereof.

Section 5.2    Subsequent Closings. The obligation of each Lender hereunder to purchase Notes at a Subsequent Closing is subject to the satisfaction, at the applicable Subsequent Closing Date, of each of the following conditions:
(a)Each representation and warranty by any Credit Party contained herein and in each other Transaction Document shall be true and correct in all material respects (without duplication of any materiality qualifiers) as of such date (subject to such updates to the Schedules, if any, as are approved by the Agent in its reasonable discretion), except to the extent that such representation or warranty expressly relates to an earlier date, including the Closing Date (in which event such representations and warranties shall be true and correct in all material respects (without duplication of any materiality qualifiers) as of such earlier date).
(b)No Event of Default or event or circumstance which, with the giving of notice, the lapse of time, or both, would (if not cured or otherwise remedied during such time) constitute an Event of Default shall have occurred and be continuing or would result after giving effect to such issuance and purchase of Notes.

(c)After giving effect to such issuance and purchase of Notes, the aggregate outstanding principal amount of the Notes would not exceed the Maximum Commitment.
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(d)The funding date shall be a Permitted Issuance Date.

(e)After giving effect to such draw, the Debt-to-Equity Ratio of the Borrower shall not be more than 9-to-1.

(f)The Credit Parties shall have paid or reimbursed the Agent and the Lenders for all costs and expenses required to be paid or reimbursed by them on the Permitted Issuance Date in accordance with Section 8.22 hereof.

(g)The Credit Parties shall have delivered a Borrowing Base Certificate, certified on behalf of the Borrower by the chief financial officer of the Borrower (or other authorized executive officer performing a similar function), setting forth the Borrowing Base of the Borrower as of a date no earlier than the end of the most recently ended fiscal month and no later than the day immediately preceding the funding date.
The request by the Borrower and acceptance by the Borrower of the proceeds of any additional issuance and purchase of Notes made on a Subsequent Closing Date shall be deemed to constitute, as of such Subsequent Closing Date, (i) a representation and warranty by the Borrower that the conditions in this Section 5.2 have been satisfied and (ii) a reaffirmation by each Credit Party of the granting and continuance of Agent’s Liens, on behalf of the Lenders and the Holders, pursuant to the Transaction Documents.
Article 6
INTENTIONALLY OMITTED

Article 7
CREDIT PARTIES’ REPRESENTATIONS AND WARRANTIES

As an inducement to the Agent and the Lenders to enter into this Agreement and to consummate the transactions contemplated hereby, each of the Credit Parties severally represents and warrants in respect of itself to each of the Agent and the Lenders that each and all of the following representations and warranties (as supplemented by the disclosure schedules delivered to the Agent and the Lenders contemporaneously with the execution and delivery of this Agreement (the “Schedules”)) as applicable to it, are true and correct as of the Closing Date and as of each Subsequent Closing Date. The Schedules shall be arranged by the Borrower in paragraphs corresponding to the sections and subsections contained in this Article 7.
Section 7.1    Organization and Qualification. Each Credit Party and each of its respective Subsidiaries (which, for purposes of this Agreement, means any entity in which any Credit Party, directly or indirectly, owns at least 50% of the Capital Stock or other Equity Interests) (“Subsidiaries”) are entities duly incorporated or organized and validly existing in good standing under the laws of the jurisdiction in which they are formed or incorporated, and have the requisite corporate or limited liability company power and authorization, as applicable, to own their properties, carry on their business as now being conducted, enter into the
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Transaction Documents to which they are party and carry out the transactions contemplated thereby. Each Credit Party and each of its Subsidiaries is duly qualified as a foreign entity to do business and is in good standing in every jurisdiction in which its ownership of property or the nature of the business conducted by it makes such qualification necessary, except to the extent that the failure to be so qualified or be in good standing would not have, either individually or in the aggregate, a Material Adverse Effect. Except as set forth on Schedule 7.1, (i) no Credit Party has any Subsidiaries and (ii) all Capital Stock or other equity or similar interests of the Subsidiaries is directly or indirectly owned by a Credit Party, as set forth therein.
Section 7.2    Authorization; Enforcement; Validity. Each of the Credit Parties has the requisite power and authority to enter into and perform its obligations under this Agreement, the Notes, the Security Agreement, each of the other Security Documents, the Intercreditor Agreement and each of the other agreements, documents and certificates entered into by the parties hereto in connection with the transactions contemplated by this Agreement (collectively, the “Transaction Documents”) and to issue the Notes in accordance with the terms hereof and thereof. The execution and delivery of the Transaction Documents by the Credit Parties have been duly authorized by each of the Credit Parties’ respective board of directors (or other governing body) and the consummation by the Credit Parties of the transactions contemplated hereby and thereby, including, without limitation, the issuance of the Notes by the Borrower has been duly authorized by the respective Credit Party’s board of directors (or other governing body), and (other than filings with “Blue Sky” authorities as required therein) no further filing, consent, or authorization is required by any Credit Party, its board of directors (or other governing body) or its stockholders or any parties in a similar capacity.
Section 7.3    Issuance of Notes. The Notes are duly authorized and, upon issuance in accordance with the terms hereof, shall be validly issued and free from all Taxes, liens and charges with respect to the issue thereof.
Section 7.4    No Conflicts. Neither the execution, delivery and performance of the Transaction Documents by the Credit Parties party thereto, nor the consummation by the Credit Parties of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Notes) will (i) result in a violation of any Credit Party’s or any Subsidiary’s certificate of incorporation, certificate of formation, bylaws, limited liability company agreement or other governing documents, or the terms of any Capital Stock or other Equity Interests of any Credit Party or any of their Subsidiaries; (ii) conflict with, or constitute a breach or default (or an event which, with notice or lapse of time or both, would become a breach or default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any Consumer Loan Agreement or any other agreement, indenture or instrument to which any Credit Party or any of their Subsidiaries is a party; (iii) result in any “price reset” or other material change in or other modification to the terms of any Indebtedness, Equity Interests or other securities of any Credit Party or any of their Subsidiaries; or (iv) result in a violation of any law, rule, regulation, order, judgment or decree (including, without limitation, (A) any Environmental Laws, (B) any Requirements or (C) any federal or state securities laws).
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Section 7.5    Consents. Except as set forth on Schedule 7.5, no Credit Party is required to obtain any consent, authorization, approval, order, license, franchise, permit, certificate or accreditation of, or make any filing or registration with, any court, governmental agency or any regulatory or self-regulatory agency or authority or any other Person in order for it to execute, deliver or perform any of its obligations under or contemplated by the Transaction Documents, in each case in accordance with the terms hereof or thereof (other than filings required by the Security Documents). All consents, authorizations, approvals, orders, licenses, franchises, permits, certificates or accreditations of, filings and registrations set forth on Schedule 7.5 have been obtained or effected on or prior to the Closing Date.
Section 7.6    Subsidiary Rights. Each Credit Party has the unrestricted right to vote, and (subject to limitations imposed by applicable law) to receive dividends and distributions on, all capital and other equity securities of its Subsidiaries as owned by any Credit Party.
Section 7.7    Equity Capitalization. As of the Closing Date, the authorized Capital Stock and the issued and outstanding Equity Interests of each Credit Party and each Subsidiary of each Credit Party is as set forth on Schedule 7.7. All of such outstanding shares of Capital Stock or other Equity Interests of the Credit Parties and their Subsidiaries have been duly authorized, validly issued and are fully paid and nonassessable and are owned by the Persons and in the amounts set forth on Schedule 7.7. Except as set forth on Schedule 7.7: (i) none of any Credit Party or any Subsidiary’s Capital Stock or other Equity Interest in any other Credit Party or such Subsidiary is subject to preemptive rights or any other similar rights or any liens or encumbrances suffered or permitted by such Credit Party or such Subsidiary; (ii) there are no outstanding options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable for, any Capital Stock or other Equity Interests in any Credit Party or any of their Subsidiaries, or contracts, commitments, understandings or arrangements by which any Credit Party or any of their Subsidiaries is or may become bound to issue additional Capital Stock or other Equity Interests in such Credit Party or such Subsidiary or options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable for, any Capital Stock or other Equity Interests in any Credit Party or any of their Subsidiaries; (iii) there are no outstanding debt securities, notes, credit agreements, credit facilities or other agreements, documents or instruments evidencing Indebtedness of any Credit Party or any of their Subsidiaries or by which any Credit Party or any of their Subsidiaries is or may become bound other than Permitted Indebtedness; (iv) there are no financing statements securing obligations in any material amounts, either singly or in the aggregate, filed in connection with any Credit Party or any of their Subsidiaries; (v) there are no agreements or arrangements under which any Credit Party or any of their Subsidiaries is obligated to register the sale of any of its securities under the 1933 Act; (vi) there are no outstanding securities or instruments of any Credit Party or any of their Subsidiaries which contain any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by which any Credit Party or any of their Subsidiaries is or may become bound to redeem a security of any Credit Party or any of their Subsidiaries; (vii) there are no securities or instruments containing anti-dilution or similar provisions that will be triggered by the closing of the transactions contemplated by this Agreement or the issuance of
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the Notes; (viii) none of any Credit Party or any of their Subsidiaries has any stock appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement and (ix) none of any Credit Party or any of their Subsidiaries has any liabilities or obligations required to be disclosed in its financial statements (including the footnotes thereto) that are not so disclosed. Prior to the Closing, the Borrower has provided to the Lenders true, correct and complete copies of (i) its certificate of incorporation as in effect on the Closing Date, and (ii) its memorandum and articles of association as in effect on the Closing Date. Schedule 7.7 identifies all outstanding securities convertible into, or exercisable or exchangeable for, shares of Capital Stock or other Equity Interests in any Credit Party or any of their Subsidiaries and the material rights of the holders thereof in respect thereto.
Secton 7.8    Indebtedness and Other Contracts. Except as disclosed on Schedule 7.8, none of any Credit Party or any of their Subsidiaries (i) has any outstanding Indebtedness other than Permitted Indebtedness, (ii) is a party to any contract, agreement or instrument, the violation of which, or default under which, by the other party(ies) to such contract, agreement or instrument could reasonably be expected to result in a Material Adverse Effect, or (iii) is in violation of any term of or in default under any contract, agreement or instrument relating to any Indebtedness or any contract, agreement or instrument entered into in connection therewith that could reasonably be expected to result in, either individually or in the aggregate, a Material Adverse Effect.
Section 7.9    Off Balance Sheet Arrangements. There is no transaction, arrangement, or other relationship between any Credit Party or any of their Subsidiaries and an unconsolidated or other off balance sheet entity that would be reasonably likely to have, either individually or in the aggregate, a Material Adverse Effect.
Section 7.10    Ranking of Notes. No Indebtedness of any of the Credit Parties or any of their Subsidiaries will rank senior to or pari passu with the Notes in right of payment or collectability, whether with respect to payment of redemptions, interest, damages or upon liquidation or dissolution or otherwise.
Section 7.11    Title. Each of the Credit Parties and each of their Subsidiaries has (i) good and marketable title to (in the case of fee interests in real property), (ii) valid leasehold interests in (in the case of leasehold interests in real or personal property), (iii) adequate rights in (in the case of licensed interests in Intellectual Property Rights and Intellectual Property Rights that are not wholly owned by a Credit Party or a Subsidiary), and (iv) good and marketable title to (in the case of all other personal property) all of its real property and other properties and assets owned by it which are material to the business of such Credit Party or such Subsidiary, in each case free and clear of all liens, encumbrances and defects, other than Permitted Liens. Any real property and facilities held under lease by any Credit Party or any of their Subsidiaries are held by it under valid and enforceable leases.
Section 7.12    Intellectual Property Rights. Each of the Credit Parties and each of their Subsidiaries owns or possesses adequate rights to use all trademarks, trade names, service marks, service mark registrations, service names, patents, patent rights, copyrights, inventions, trade secrets and other intellectual property rights (“Intellectual Property Rights”) that are necessary
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and material to conduct its respective business and no Credit Party or Subsidiary has previously granted any Lien on any such Intellectual Property Rights other than Permitted Liens. Except as described on Schedule 7.12, no registered Intellectual Property Rights that are owned by a Credit Party or a Subsidiary have expired or terminated, or are expected to expire or terminate within five (5) years from the Closing Date. Except as described on Schedule 7.12, (i) none of any Credit Party or any of their Subsidiaries has any knowledge of any infringement, misappropriation, dilution or other violation by any Credit Party or any of their Subsidiaries of Intellectual Property Rights owned by other Persons; (ii) none of any Credit Party or any of their Subsidiaries has any knowledge of any infringement, misappropriation, dilution or other violation by any other Persons of the Intellectual Property Rights owned by any Credit Party or any of their Subsidiaries; (iii) there is no claim, action or proceeding pending before any court, judicial body, administrative or regulatory agency, arbitrator or other governmental authority or, to the knowledge of each of the Credit Parties, threatened in writing, against any Credit Party or any of their Subsidiaries contesting or challenging the validity, scope or enforceability of, or a Credit Party’s or Subsidiary’s ownership of or right to use, its owned Intellectual Property Rights or the Intellectual Property Rights it licenses from other Persons; and (iv) none of any Credit Party or any of their Subsidiaries is aware of any facts or circumstances which reasonably could be expected to give rise to any of the foregoing infringements or claims, actions or proceedings. Each of the Credit Parties and their Subsidiaries has taken and is taking commercially reasonable security measures to maintain and protect the secrecy, confidentiality and value of the trade secrets and other confidential information it owns.
Section 7.13    Creation, Perfection, and Priority of Liens. The Security Documents are effective to create in favor of the Agent, for the benefit of the Holders and the Lenders, a legal, valid, binding, and (upon the filing of the appropriate UCC financing statements and Intellectual Property Security Agreements, the transfer of possession of original certificated securities together with appropriate transfer instruments and the delivery of deposit account control agreements) enforceable perfected first priority (subject to Permitted Liens) security interest and Lien in the Collateral described therein as security for the Obligations to the extent that a legal, valid, binding, and enforceable security interest and Lien in such Collateral may be created under applicable law including without limitation, the uniform commercial code as in effect in any applicable jurisdiction (“UCC”) and any other applicable governmental agencies.
Section 7.14    Absence of Certain Changes; Insolvency.
(a)Since December 31, 2014 (the “Diligence Date”), there has been no material adverse change in the business, assets, properties, operations, condition (financial or otherwise), results of operations or prospects of any Credit Party or any of the Credit Parties’ Subsidiaries. Since the Diligence Date, neither any Credit Party nor any of their Subsidiaries has (i) declared or paid any dividends or (ii) sold any assets (other than the sale of Inventory in the ordinary course of business). NeitherExcept as described on Schedule 7.14, neither any Credit Party nor any of their Subsidiaries has taken any steps to seek protection pursuant to any bankruptcy law nor do any Credit Party or any of their Subsidiaries have any knowledge that its creditors intend to initiate involuntary bankruptcy proceedings or any actual knowledge of any fact which would reasonably lead a creditor to do so. Neither any Credit Party nor any of their
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Subsidiaries intends to incur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt). Neither the Credit Parties or the Credit Parties and their Subsidiaries taken as a whole are, as of the Closing Date, or after giving effect to the transactions contemplated hereby to occur at the Closing, will be, Insolvent. Without limitation of the foregoing, no corporate action, legal proceeding or other procedure or step in respect of any Insolvency Proceeding or expropriation, attachment, sequestration, distress or execution or any analogous process in any jurisdiction over any asset or assets of a Credit Party has been taken or, to the knowledge of Holdings, threatened in relation to Elevate Credit Parent or any of its Subsidiaries.
Section 7.15    Absence of Proceedings. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, Governmental Authority (including, without limitation, the SEC, self-regulatory organization or other governmental body) (in each case, a “Proceeding”) pending or, to the knowledge of any Credit Party, threatened in writing against or affecting any Credit Party, or any of the Credit Parties’ Subsidiaries or any of their respective officers or directors which (i) could reasonably be expected to result, either individually or in the aggregate, in a Material Adverse Effect, (ii) if adversely determined, could reasonably be expected to result, either individually or in the aggregate, in a Material Adverse Effect, or (iii) questions the validity of this Agreement, any of the other Transaction Documents or any of the transactions contemplated hereby or thereby or any action taken or to be taken pursuant hereto or thereto.
Section 7.16    No Undisclosed Events, Liabilities, Developments or Circumstances. No event, liability, development or circumstance has occurred or exists, or is contemplated to occur or may occur with respect to any Credit Party or any of the Credit Parties’ Subsidiaries or their respective business, properties, prospects, operations or financial condition, that would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect. For the purposes of this Section 7.16 only, any gross negligence, willful misconduct or fraud in the conduct of business by any Credit Party or any of their Subsidiaries, as determined by a court of competent jurisdiction in a final, non-appealable judgment or order, shall be presumed to have, or be reasonably expected to have, a Material Adverse Effect.
Section 7.17    No Disagreements with Accountants and Lawyers. There are no disagreements of any kind presently existing, or reasonably anticipated by any Credit Party or any of their Subsidiaries to arise, between any Credit Party or any of their Subsidiaries and the accountants and lawyers formerly or presently employed by Credit Parties and their Subsidiaries which would reasonably be expected to affect the ability of the Credit Parties to perform any of their obligations under any of the Transaction Documents.
Section 7.18    Placement Agent’s Fees. No Credit Party has engaged any placement agent or other agent in connection with the closing of the transactions contemplated by this Agreement or the issuance of the Notes.
Section 7.19    Reserved.

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Section 7.20    Tax Status. Each Credit Party and their Subsidiaries (i) have made or filed all foreign, federal, state and local income Tax Returns and all other material Tax Returns, reports and declarations required by any jurisdiction to which they are subject and all such Tax Returns were correct and complete in all respects and were prepared in substantial compliance with all applicable laws and regulations, (ii) have paid all Taxes and other governmental assessments and charges due and owing (whether or not shown on any Tax Return), and (iii) have set aside on their books adequate reserves in accordance with GAAP for the payment of all Taxes due and owing by any Credit Party or its respective Subsidiaries. There are no unpaid Taxes in any material amount claimed to be delinquent by the taxing authority of any jurisdiction (other than those being contested in good faith by appropriate proceedings promptly instituted and diligently conducted and subject to adequate reserves taken by Credit Parties or such Subsidiaries as shall be required in conformity with GAAP), and the officers of each of the Credit Parties and their Subsidiaries know of no basis for any such claim. No claim has ever been made by an authority in a jurisdiction where any Credit Party or any of its Subsidiaries does not file Tax Returns that any Credit Party or any of its Subsidiaries is or may be subject to taxation by that jurisdiction. There are no Liens for Taxes (other than Taxes not yet due and payable) upon any of the assets of the Credit Parties or any of their respective Subsidiaries.
Section 7.21    Transfer Taxes. On the Closing Date, all transfer or Other Taxes (other than income or similar taxes) which are required to be paid in connection with the issuance of the Notes to each Lender hereunder will be, or will have been, fully paid or provided for by the Credit Parties, and all laws imposing such Taxes will be or will have been complied with.
Section 7.22    Conduct of Business; Compliance with Laws; Regulatory Permits. Neither any Credit Party nor any of their Subsidiaries is in violation of any term of or in default under its certificate or articles of incorporation or bylaws or other governing documents. Neither any Credit Party nor any of their Subsidiaries is in violation of any judgment, decree or order or any law, rule, regulation, statute or ordinance applicable to any Credit Party or any of their Subsidiaries (including, without limitation, all Environmental Laws and the Requirements). Schedule 7.22 (as such Schedule shall be updated from time to time by the Credit Parties by written notice to Agent) sets forth all United States federal and state and applicable foreign regulatory licenses, material consents, authorizations, approvals, orders, licenses, franchises, permits, certificates, accreditations and permits and all other appropriate regulatory authorities necessary to conduct the respective businesses of the Credit Parties and their Subsidiaries, and except as set forth on Schedule 7.22 (as such Schedule shall be updated from time to time by the Credit Parties by written notice to Agent), all of such United States federal and state and applicable foreign regulatory licenses, material consents, authorizations, approvals, orders, licenses, franchises, permits, certificates, accreditations and permits and other appropriate regulatory authorities are valid and in effect and no Credit Party nor any of their Subsidiaries has received any notice of proceedings or entered into formal or informal discussions relating to the revocation or modification of any such United States federal and state and applicable foreign regulatory licenses, consents, authorizations, approvals, orders, licenses, franchises, permits, certificates, accreditations or permits. To the knowledge of each of the Credit Parties, it is not necessary under the laws of its Relevant Jurisdictions:
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(a)in order to enable the Agent, any Lender or any Holder to enforce their respective rights under any Transaction Document; or
(b)by reason of the execution of any Transaction Document or the performance by it of its obligations under any Transaction Document, that the Agent, any Lender or any Holder be licensed, qualified or otherwise entitled to carry on business in any of its Relevant Jurisdictions.

None of the Agent, any Lender or any Holder is or will be deemed to be resident, domiciled or carrying on business in its Relevant Jurisdictions solely by reason of the execution, performance and/or enforcement of any Transaction Document.
Section 7.23    Foreign Corrupt Practices. Neither any Credit Party nor any of their Subsidiaries, nor any director, officer, agent, employee or other Person acting on behalf of any Credit Party or any of their Subsidiaries has, in the course of its actions for, or on behalf of, any Credit Party or any of their Subsidiaries (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expenses relating to political activity; (ii) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; (iii) violated or is in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended; or (iv) made any unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful payment to any foreign or domestic government official or employee.
Section 7.24    Reserved.
Section 7.25    Environmental Laws. Each Credit Party and their Subsidiaries (a) (i) is in compliance with any and all Environmental Laws, (ii) has received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses, (iii) is in compliance with all terms and conditions of any such permit, license or approval, and (iv) has no outstanding Liability under any Environmental Laws and are not aware of any facts that could reasonably result in Liability under any Environmental Laws, in each of the foregoing clauses of this clause (a), except to the extent, either individually or in the aggregate, a Material Adverse Effect could not reasonably be expected to occur, and (b) have provided Agent and Lenders with copies of all environmental reports, assessments and other documents in any way related to any actual or potential Liability under any Environmental Laws.
Section 7.26    Margin Stock. Neither any Credit Party nor any of their Subsidiaries is engaged in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulation U of the Board of Governors of the Federal Reserve System), and no part of the proceeds from any Note will be used (a) to directly purchase or carry any margin stock, (b) to the knowledge of the Credit Parties, without inquiry, to extend credit to others for the purpose of purchasing or carrying any margin stock, or (c) for any purpose that violates the provisions of Regulation T, U or X of the Board of Governors of the Federal Reserve System.
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Section 7.27    ERISA. Except as set forth on Schedule 7.27, neither any Credit Party nor any ERISA Affiliate (a) maintains or has maintained any Pension Plan, (b) contributes or has contributed to any Multiemployer Plan or (c) provides or has provided post-retirement medical or insurance benefits with respect to employees or former employees (other than benefits required under Section 601 of ERISA, Section 4980B of the Code or applicable federal or state law). Except as set forth on Schedule 7.27, neither any Credit Party nor any ERISA Affiliate has received any notice or has any knowledge to the effect that it is not in material compliance with any of the requirements of ERISA, the Code or applicable federal or state law with respect to any Employee Benefit Plan. No ERISA Event exists. Each Employee Benefit Plan which is intended to qualify under the Code has received a favorable determination letter (or opinion letter in the case of a prototype Employee Benefit Plan) to the effect that such Employee Benefit Plan is so qualified and to Credit Parties’ knowledge, there exists no reasonable basis for the revocation of such determination or opinion letter. Neither any Credit Party nor any ERISA Affiliate has (i) any unpaid minimum required contributions under any Plan, whether or not waived, (ii) any liability under Section 4201 or 4243 of ERISA for any withdrawal, or partial withdrawal, from any Multiemployer Plan, (iii) a Pension Plan that is “at risk” within the meaning of Section 430 of the Code, (iv) received notice from any Multiemployer Plan that it is either in endangered or critical status within the meaning of Section 432 of the Code or (v) any material liability or knowledge of any facts or circumstances which reasonably might be expected to result in any material liability to the PBGC, the Internal Revenue Service, the Department of Labor or any participant in connection with any Employee Benefit Plan (other than routine claims for benefits under the Employee Benefit Plan).
Section 7.28    Investment Company. Neither any Credit Party nor any of their Subsidiaries is a “registered investment company” or a company “controlled” by a “registered investment company” or a “principal underwriter” of a “registered investment company” as such terms are defined in the Investment Company Act of 1940, as amended.
Section 7.29    U.S. Real Property Holding Corporation. Neither any Credit Party nor any of their Subsidiaries is, nor has it ever been, a U.S. real property holding corporation within the meaning of Section 897 of the Code, as amended, and the Credit Parties will so certify upon the request of Agent.
Section 7.30    Internal Accounting and Disclosure Controls. The Credit Parties and their Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset and liability accountability, (iii) access to assets or incurrence of liabilities is permitted only in accordance with management’s general or specific authorization and (iv) the recorded accountability for assets and liabilities is compared with the existing assets and liabilities at reasonable intervals and appropriate action is taken with respect to any difference. During the twelve (12) months immediately prior to the Closing Date, neither any Credit Party nor any of their Subsidiaries has received any written notice or correspondence from any accountant relating to any potential
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material weakness in any part of the system of internal accounting controls of any Credit Party or any of their Subsidiaries.
Section 7.31    Reserved.
Section 7.32    Transactions With Affiliates. Except (i) as set forth on Schedule 7.32 and (ii) for transactions that have been entered into on terms no less favorable to the Credit Parties and their Subsidiaries than those that might be obtained at the time from a Person who is not an officer, director or employee, none of the officers, directors or employees of any Credit Party or any of their Subsidiaries is presently a party to any transaction with any Credit Party or any of their Subsidiaries (other than for ordinary course services as employees, officers or directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any such officer, director or employee or, to the knowledge of the Credit Parties, any corporation, partnership, trust or other entity in which any such officer, director, or employee has a substantial interest or is an officer, director, trustee or partner.
Section 7.33    Acknowledgment Regarding Holders’ Purchase of Notes. Each of the Credit Parties acknowledges and agrees that each Holder is acting solely in the capacity of an arm’s length lender with respect to the Transaction Documents and the transactions contemplated hereby and thereby and that no Holder is (i) an officer or director of any Credit Party or any of their Subsidiaries, or (ii) an Affiliate of any Credit Party or any of their Subsidiaries. Each of the Credit Parties further acknowledges that no Holder is acting as a financial advisor or fiduciary of any Credit Party or any of their Subsidiaries (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated hereby and thereby, and any advice given by a Holder or any of their representatives or agents, including, without limitation, the Agent, in connection with the Transaction Documents and the transactions contemplated hereby and thereby is merely incidental to such Holder’s receipt of the Notes. Each of the Credit Parties further represents to each Holder that each Credit Party’s decision to enter into the Transaction Documents to which it is a party have been based solely on the independent evaluation by such Person and its respective representatives.
Section 7.34    Reserved.
Section 7.35    Insurance. Credit Parties and their Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which Credit Parties and their Subsidiaries are engaged. Neither any Credit Party nor any of their Subsidiaries believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse Effect.
Section 7.36    Full Disclosure. None of the representations or warranties made by any Credit Party or any of their Subsidiaries in the Transaction Documents as of the date such representations and warranties are made or deemed made, and none of the statements contained in each exhibit, report, statement or certificate furnished by or on behalf of any Credit Party or
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any of their Subsidiaries in connection with the Transaction Documents, contains any untrue statement of a material fact or omits any material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances under which they are made, not misleading as of the time when made or delivered.
Section 7.37    Employee Relations. Neither any Credit Party nor any of their Subsidiaries is a party to any collective bargaining agreement or employs any member of a union in such person’s capacity as a union member or to perform union labor work. Each of the Credit Parties believes that its relations with its employees are good. As of the Closing Date, no executive officer of any Credit Party or any of their Subsidiaries has notified such Credit Party or such Subsidiary that such officer intends to leave such Credit Party or such Subsidiary or otherwise terminate such officer’s employment with such Credit Party or such Subsidiary. As of the Closing Date, no executive officer of any Credit Party or any of their Subsidiaries, to the knowledge of the Credit Parties, is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement, non-competition agreement, or any other contract or agreement or any restrictive covenant. Each Credit Party and their Subsidiaries are in compliance with all federal, state, local and foreign laws and regulations respecting labor, employment and employment practices and benefits, terms and conditions of employment and wages and hours, except where failure to be in compliance would not, either individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.
Section 7.38    Certain Other Representations and Warranties . Each Consumer Loan Agreement is a valid and subsisting agreement and is in full force and effect in accordance with the terms thereof, no default or event of default exists under any such Consumer Loan Agreement and no party to any such Consumer Loan Agreement has any accrued right to terminate any such Consumer Loan Agreement on account of a default by any Person or otherwise, except in each case, where the same would not, either individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.
Section 7.39    Patriot Act. To the extent applicable, the Credit Parties and their Subsidiaries are in compliance, in all material respects, with (i) the Trading with the Enemy Act, as amended, and each of the foreign assets control regulations of the United States Treasury Department and any other enabling legislation or executive order relating thereto, and (ii) the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)).
Section 7.40    Material Contracts. Schedule 7.40 contains a true, correct and complete list of all the Material Contracts (other than those of the type described in clause (a) of the definition thereof) of the Credit Parties and their Subsidiaries (which Schedule shall be updated by the Credit Parties by written notice to Agent promptly following the execution of any such additional Material Contract following the Closing Date), and all such Material Contracts are in full force and effect and, to Credit Parties’ knowledge, no defaults currently exist thereunder.
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Article 8
COVENANTS

Section 8.1    Financial Covenants. Solely with respect to the calendar month ending February 28, 2019, the Credit Parties shall, and shall cause their Subsidiaries to, comply with the financial covenants set forth in Section 8.1 of the Fourth Amended and Restated Financing Agreement prior to the effectiveness of this Agreement and thereafter, the Credit Parties shall, and shall cause their Subsidiaries to, comply with the following financial covenants:
(a)Loan to Value Ratio. The Credit Parties shall not permit the Loan to Value Ratio calculated as of the last day of any calendar month (commencing with the calendar month of February 2019) to be greater than the ratio in the table set forth in the definition of Borrowing Base.0.85.
If as of any applicable testing date the Credit Parties fail to comply with the financial covenant contained in this Section 8.1(a) (a “LTV Covenant Default”), then the Credit Parties shall have the obligation to cure such breach (the “LTV Covenant Cure Obligation”) within thirty (30) days of the occurrence thereof by causing Elevate Credit Parent to contribute to the Borrower cash (in the form of a capital contribution and not in the form of an extension of credit or other Indebtedness) in an aggregate amount that would cause the Credit Parties to be in pro forma compliance with such covenant as of such testing date (such amount, the “LTV Covenant Cure Amount”). Until timely receipt of the LTV Covenant Cure Amount for any applicable LTV Covenant Default, an Event of Default shall be deemed to exist for all purposes of this Agreement and the other Transaction Documents; provided, that during such thirty (30) day cure period (unless the Agent shall have been notified that such LTV Covenant Cure Amount shall not be made) neither the Agent nor any Lender or Holder shall exercise any enforcement remedy against the Credit Parties or any of their Subsidiaries or any of their respective properties solely as a result of the existence of the applicable LTV Covenant Default and; provided, further, that upon timely receipt of such LTV Covenant Cure Amount, the underlying LTV Covenant Default shall no longer be deemed to be continuing. Notwithstanding anything to the contrary in this Section 8.1(a), in no event shall the Credit Parties be permitted to cure more than three (3) LTV Covenant Defaults during the term of this Agreement.
(b)Corporate Cash. The Credit Parties shall not permit Corporate Cash at any time (x) prior to December 31, 2019 to be less than the greater of (i) $5,000,000 or (ii) in the event that Elevate Credit Parent enters into any share buyback, $10,000,000 and (y) after December 31, 2019 to be less than the greater of (i) $7,500,000 or (ii) in the event that Elevate Credit Parent enters into any share buyback, $10,000,000.
(c)Total Cash. The Credit Parties shall cause Total Cash as of the last day of each calendar month to be greater than or equal to five percent (5%) of total principal amount of Receivables of Elevate Credit Parent and its Subsidiaries.

(d)Book Value of Equity. The Credit Parties shall not permit the Book Value of Equity, calculated as of the last day of any calendar month, to be less than $85,000,000,
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as may be amended or modified by mutual agreement between the parties hereto in good faith; provided that the parties agree that any reductions or discounts required by applicable Current Expected Credit Losses (CECL) standards shall be carved out.

(e)Past Due Roll Rate. The Credit Parties shall not permit the Trailing Past Due Roll Rate, calculated as of the last day of any calendar month (commencing with the calendar month of February 2019) to be greater than twelve and one-half percent (12.5%).

(f)Four Month Vintage Charge Off Rate. The Credit Parties shall not permit the Trailing Four Month Charge Off Rate to be greater than nine and one-half percent (9.5%).

(g)Twelve Month Vintage Charge Off Rate. The Credit Parties shall not permit the Trailing Twelve Month Charge Off Rate to be greater than thirty-six percent (36%).

(h)Excess Spread. The Credit Parties shall not permit the Trailing Excess Spread to be less than three and one-quarter percent (3.00%).

The defined term “Consumer Loans” as used in Sections 8.1(e) through (h) may be deemed to also include all unsecured consumer loans marked as “Rise SPV, LLC” and/or “EC SPV, Ltd.” on the monthly financial statements provided to Agent pursuant to Section 8.2(a) in the Agent’s sole discretion.
Section 8.2    Deliveries. The Borrower agrees to deliver the following to the Agent via electronic (e-mail) transmission or other written means acceptable to the Agent:
(a)Monthly Financial Statements. As soon as available and in any event within twenty-one (21) days after the end of each month (including December), the unaudited consolidated balance sheets of the Credit Parties and their Subsidiaries as at the end of such month and the related consolidated statements of operations, stockholders’ equity and cash flows of Elevate Credit Parent and its Subsidiaries for such month and for the period from the beginning of the then current Fiscal Year to the end of such month, all in reasonable detail, and certified by the chief financial officer of Elevate Credit Parent (or other authorized executive officer performing a similar function) as being true and correct and fairly presenting in accordance with GAAP, the financial position and results of operations of the Elevate Credit Parent and its Subsidiaries subject to normal year-end adjustments and absence of footnote disclosure;
(b)Annual Financial Statements. As soon as available, and in any event within one hundred twenty (120) days after the end of each Fiscal Year, the audited consolidated balance sheets of Elevate Credit Parent and its Subsidiaries as at the end of such Fiscal Year and the related consolidated statements of operations, stockholders’ equity and cash flows of the Credit Parties and their Subsidiaries for such Fiscal Year, setting forth in each case in comparative form the corresponding figures for the previous Fiscal Year, in reasonable detail and certified by the chief financial officer of Elevate Credit Parent (or other authorized executive
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officer performing a similar function) as being true and correct and fairly presenting in accordance with GAAP, the financial position and results of operations of Elevate Credit Parent and its Subsidiaries, as applicable, accompanied by a customary unqualified opinion of an independent accounting firm acceptable to Agent;

(c)Compliance Certificate and Borrowing Base Certificate. On the dates that the financial statements under clause (a) above are delivered, a duly completed Compliance Certificate and a duly completed Borrowing Base Certificate, each with appropriate insertions, dated the date of the applicable monthly financial statements, and signed on behalf of the Borrower by the chief financial officer of the Borrower (or other authorized executive officer performing a similar function), in the case of each Compliance Certificate (i) containing a computation of the covenants set forth in Section 8.1 hereof, (ii) indicating whether or not the Credit Parties are in compliance with each covenant set forth in Article 8 of this Agreement and whether each representation and warranty contained in Article 7 of this Agreement is true and correct in all material respects (without duplication of any materiality qualifiers) as though made on such date (except for representations and warranties that speak as of a specific date, which representations and warranties are true and correct in all material respects (without duplication of any materiality qualifiers as of such date)), and (iii) to the effect that such officer has not become aware of any Event of Default (or event or circumstance that, with the passage of time, the giving of notice, or both, would become an Event of Default) that has occurred and is continuing or, if there is any such Event of Default (or event or circumstance that, with the passage of time, the giving of notice, or both, would become an Event of Default), describing it and the steps, if any, being taken to cure it;

(d)Monthly Data Tape. On the dates that the financial statements under clause (a) above are delivered, a data tape in a form acceptable to Agent in its sole discretion that contains information as to Borrower’s loan portfolio submitted as of the most recent month end. The Credit Parties shall provide a data tape to Agent promptly after the Closing Date but in no event after March 21, 2019.

(e)Monthly Reporting Package. On the dates that the financial statements under clause (a) above are delivered, a monthly operations reporting package, in form and detail reasonably acceptable to the Agent.

Section 8.3    Notices. The Borrower agrees to deliver the following to the Agent via electronic (e-mail) transmission or other written means acceptable to the Agent:
(a)Collateral Information. Upon request of Agent, a certificate of one of the duly authorized officers of the Borrower (i) either confirming that there has been no change in the information set forth in the perfection certificate executed and delivered to the Agent on the Closing Date since such date or the date of the most recent certificate delivered pursuant to this Section and/or identifying such changes, and (ii) certifying that all UCC financing statements (including fixtures filings, as applicable) and other appropriate filings, recordings and registrations have been filed of record in each governmental, municipal and other appropriate office in each jurisdiction identified pursuant to clause (i) above (or in such certificate) to the
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extent necessary to effect, protect and perfect the security interests under the Security Documents for a period of not less than 18 months after the date of such certificate (except as noted therein with respect to any continuation statements to be filed within such period);
(b)Auditor Reports. Promptly upon receipt thereof, copies of any reports submitted by the Credit Parties’ independent public accountants, if any, in connection with each annual, interim or special audit or review of any type of the financial statements or internal control systems of any Credit Party or any of their Subsidiaries made by such accountants, including any comment letters submitted by such accountants to management of any Credit Party or any of their Subsidiaries in connection with their services;

(c)Notice of Default. Promptly upon any officer of a Credit Party obtaining knowledge (i) of any condition or event that constitutes an Event of Default (or event or circumstance that, with the passage of time, the giving of notice, or both, would become an Event of Default) or that notice has been given to a Credit Party with respect thereto; (ii) that any Person has given any notice to the Credit Party or taken any other action with respect to any event or condition set forth in Article 10; or (iii) of the occurrence of any event or change that has caused or evidences, either in any case or in the aggregate, a Material Adverse Effect, a certificate of its chief executive officer or chief financial officer (or other authorized executive officer performing a similar function) specifying the nature and period of existence of such condition, event or change, or specifying the notice given and action taken by any such Person and the nature of such claimed Event of Default, default, event or condition, and the action(s) the Credit Parties have taken, are taking and propose to take with respect thereto;

(d)Notice of Litigation. Promptly upon any officer of a Credit Party obtaining knowledge of (i) the institution of, or nonfrivolous threat of, any adverse Proceeding against or affecting any Credit Party, or any of the Credit Parties’ Subsidiaries or any of their respective officers or directors not previously disclosed in writing by the Credit Parties to the Agent, or (ii) any material development in any adverse Proceeding against or affecting any Credit Party, or any of the Credit Parties’ Subsidiaries or any of their respective officers or directors that, in the case of either clause (i) or (ii) if adversely determined, could be reasonably expected to have a Material Adverse Effect, or seeks to enjoin or otherwise prevent the consummation of, or to recover any damages or obtain relief as a result of, the transactions contemplated hereby, written notice thereof together with such other information as may be reasonably available to the Credit Parties to enable the Agent, the Lenders and the Holders and their counsel to evaluate such matters (it being agreed and understood that as of the Second Amendment Effective Date the Credit Parties have timely complied with their notice obligations, if any, under this clause (d) with respect to the Proceedings described on Schedule 8.3(d));

(e)ERISA. (i) Promptly upon becoming aware of the occurrence of or forthcoming occurrence of any ERISA Event, a written notice specifying the nature thereof, the action(s) any Credit Party or any of their Subsidiaries or any of their respective ERISA Affiliates has taken, is taking or proposes to take with respect thereto and, when known, any action taken or threatened by the Internal Revenue Service, the Department of Labor or the PBGC with respect thereto; and (ii) with reasonable promptness, copies of (1) each Schedule B (Actuarial
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Information) to the annual report (Form 5500 Series) filed by any Credit Party, any of their Subsidiaries or any of their respective ERISA Affiliates with the Internal Revenue Service with respect to each Pension Plan; (2) all notices received by the Credit Party, any of its Subsidiaries or any of their respective ERISA Affiliates from a Multiemployer Plan sponsor concerning an ERISA Event; and (3) copies of such other documents or governmental reports or filings relating to any Employee Benefit Plan as the Agent shall reasonably request;

(f)Insurance Report. Promptly upon request of the Agent, a report by the Credit Parties’ insurance broker(s) in form and substance satisfactory to the Agent outlining all material insurance coverage maintained as of the date of such report by the Credit Parties;

(g)Environmental Reports and Audits. As soon as practicable following receipt thereof, copies of all environmental audits and reports with respect to environmental matters at any facility or property used by any Credit Party or any of their Subsidiaries or which relate to any environmental liabilities of any Credit Party or any of their Subsidiaries which, in any such case, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect;

(h)Corporate Information. Fifteen (15) days’ prior written notice of any change (i) in any Credit Parties’ corporate name, (ii) in any Credit Parties’ identity or organizational structure, (iii) in any Credit Parties’ jurisdiction of organization, or (iv) in any Credit Parties’ Federal Taxpayer Identification Number or state organizational identification number. The Credit Parties agree not to effect or permit any change referred to in the preceding sentence unless all filings have been made under the UCC or otherwise and all other actions that are required in order for the Agent to continue at all times following such change to have a valid, legal and perfected security interest in all the Collateral as contemplated in the Security Agreement, the Security Documents and other Transaction Documents; provided, the foregoing notwithstanding any of the Elevate Credit Subsidiaries (other than the Borrower) may suspend its operations in any jurisdiction in which it operates and dissolve as a result of a decision by the Credit Parties to exit one or more markets from time to time;

(i)Tax Returns. Within ten (10) days following request by the Agent, copies of each federal income tax return filed by or on behalf of Credit Parties and requested by the Agent;

(j)Event of Loss. Promptly (and in any event within three (3) Business Days) notice of any claim with respect to any liability against any Credit Party or any of their Subsidiaries that (i) is in excess of $250,000 or (ii) could reasonably be expected to result in a Material Adverse Effect.

(k)Program and Consumer Loan Portfolio Reporting. (i) No later than the fifth (5th) Business Day after the end of each calendar week, a performance report of the Program as of the end of business on Friday of such calendar week, in form and substance reasonably acceptable to the Agent and (ii) together with the delivery of the financial statements and reports pursuant to subsections 8.2(a) and (b), a summary report with respect to the
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Consumer Loan portfolio of the Credit Parties containing such information as may be reasonably requested by Agent.

(l)Other Information. Promptly upon their becoming available, deliver copies of (i) all financial statements, reports, notices and proxy statements sent or made available generally by any Credit Party to its security holders acting in such capacity or by any of their Subsidiaries to their security holders other than another Credit Party or another Subsidiary, (ii) all regular and periodic reports and all registration statements and prospectuses, if any, filed by any Credit Party or any of their Subsidiaries with any securities exchange or with the SEC or any governmental or private regulatory authority, (iii) all press releases and other statements made available generally by any Credit Party or any of their Subsidiaries to the public concerning material developments in the business of any Credit Party or any of their Subsidiaries, (iv) subject to limitations imposed by applicable law, all documents and information furnished to Governmental Authorities in connection with any investigation of any Credit Party or any of their Subsidiaries (other than any routine inquiry) and (v) such other information and data with respect to any Credit Party or any of their Subsidiaries as from time to time may be reasonably requested by the Agent.

Section 8.4    Rank. All Indebtedness due under the Notes shall be senior in right of payment, whether with respect to payment of redemptions, interest, damages or upon liquidation or dissolution or otherwise, to all other current and future Indebtedness of the Credit Parties and their Subsidiaries.
Section 8.5    Incurrence of Indebtedness. No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to, directly or indirectly, create, incur or guarantee, assume, or suffer to exist any Indebtedness or engage in any sale and leaseback, synthetic lease or similar transaction, other than (i) the Obligations and (ii) Permitted Indebtedness.
Section 8.6    Existence of Liens. No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to, directly or indirectly, allow or suffer to exist any Liens, other than Permitted Liens.
Section 8.7    Restricted Payments. No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to, directly or indirectly,
(a)declare or pay any dividend or make any other payment or distribution (or interest on any unpaid dividend, charge, fee or other distribution) (whether in cash or in kind) on account of any Credit Party’s or any of their Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation involving any Credit Party or any of their Subsidiaries) or to the direct or indirect holders of any Credit Party’s or any of their Subsidiaries’ Equity Interests in their capacity as such, except that:
(i)    the Credit Parties may pay dividends (A) solely in common stock and (B) with the prior written consent of the Agent (not to be unreasonably withheld, conditioned or delayed) in cash to the holders of their common Equity Interests; provided, that with respect to this clause (B), no Event of Default (or event or circumstance that, with the passage of time, the
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giving of notice, or both, would become an Event of Default) has occurred and is continuing or would arise as a result of such payment;
(ii)    the Borrower may make monthly distributions of funds to Elevate Credit Parent commencing on the fifth (5th) Business Day after the financial statements under Section 8.2(a) shall have been delivered for the applicable month; provided, that each of the following conditions are satisfied:
(A)no Event of Default (or event or circumstance that, with the passage of time, the giving of notice, or both, would become an Event of Default) has occurred and is continuing or would arise as a result of such payment; and
(B)after giving effect to such payment, (1) the Credit Parties are in pro forma compliance with the covenant set forth in Section 8.1(a) and (2) the Debt-to-Equity Ratio of the Borrower shall not be more than 9-to-1; and

(iii)    the Elevate Credit Subsidiaries may make distributions or remit payments received on account of the undivided portion of the Consumer Loans to further the purposes of, and in compliance with, the Transaction Documents.
(b)repurchase, redeem, repay, defease, retire, distribute any dividend or share premium reserve or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation involving any Credit Party or any of their Subsidiaries) any Equity Interests of any Credit Party or any of their Subsidiaries or any direct or indirect parent of any Credit Party or any of their Subsidiaries except in connection with the termination of an employee’s employment with any Credit Party; provided, that each of the following conditions are satisfied:
(i)    no Event of Default (or event or circumstance that, with the passage of time, the giving of notice, or both, would become an Event of Default) has occurred and is continuing or would arise as a result of such repurchase, redemption, repayment, defeasance, retirement, distribution, acquisition or retirement for value of any such Equity Interests;
(ii)    after giving effect to such repurchase, redemption, repayment, defeasance, retirement, distribution, acquisition or retirement for value of any such Equity Interests, (A) the Credit Parties are in pro forma compliance with the covenants set forth in Section 8.1 and (B) the Debt-to-Equity Ratio of the Borrower shall not be more than 9-to-1; and
(iii)    except for any share buyback program, the aggregate amount of all such repurchases, redemptions, repayments, defeasances, retirements, distributions, acquisitions or retirements for value of any such Equity Interests shall not exceed $1,000,000 in any Fiscal Year;
(c)make any payment (including by setoff) on or with respect to, accelerate the maturity of, or purchase, redeem, defease or otherwise acquire or retire for value any
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Indebtedness of any Credit Party or any of their Subsidiaries (or set aside or escrow any funds for any such purpose), except for (i) payments of principal, interest and other amounts constituting Obligations and (ii) subject to the terms of applicable subordination terms, if any, regularly scheduled non accelerated payments of principal, interest and other amounts under Permitted Indebtedness; or
(d)pay any management, consulting or similar fees to any Affiliate of any Credit Party or to any officer, director or employee of any Credit Party or any Affiliate of any Credit Party, except for the avoidance of doubt, payments of salaries, advances, bonuses (including pre-funded bonuses) or stock incentives of employees of the Credit Parties in the ordinary course of business.

Section 8.8    Mergers; Acquisitions; Asset Sales. No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to, directly or indirectly, without Agent’s prior written consent, (a) be a party to any merger or consolidation, or Acquisition or (b) consummate any Asset Sale other than a Permitted Disposition. For the avoidance of doubt, notwithstanding anything to the contrary contained herein or in any other Transaction Document to the contrary, (i) no Credit Party shall enter into (or agree to enter into) any Division/Series Transaction, or permit any of its Subsidiaries to enter into (or agree to enter into), any Division/Series Transaction and (ii) none of the provisions in this Agreement or any other Transaction Document shall be deemed to permit any Division/Series Transaction without the prior written consent of the Agent.
Section 8.9    No Further Negative Pledges. No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to, enter into, assume or become subject to any agreement prohibiting or otherwise restricting the existence of any Lien upon any of their properties or assets in favor of Agent or the Holders as set forth under the Transaction Documents, whether now owned or hereafter acquired, or requiring the grant of any security for any obligation if such property or asset is given as security under the Transaction Documents, except in connection with any Permitted Liens or any document or instrument governing any Permitted Liens, provided that any such restriction contained therein relates only to the property or asset subject to such Permitted Liens (or proceeds thereof).
Section 8.10    Affiliate Transactions. No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to, directly or indirectly, enter into or permit to exist any transaction (including the purchase, sale, lease or exchange of any property or the rendering of any service) with any Affiliate of any Credit Party or any of their Subsidiaries, unless such transaction is on terms that are no less favorable to such Credit Party or such Subsidiary, as the case may be, than those that might be obtained at the time from a Person who is not an Affiliate and, unless the same shall not require payments thereunder in an amount exceeding $500,000 in the aggregate, are fully disclosed in writing to Agent prior to consummation thereof.
Section 8.11    Insurance.
(a)The Credit Parties shall keep the Collateral properly housed and insured against loss or damage by fire, theft, explosion, sprinklers, collision (in the case of motor
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vehicles) and such other risks as are customarily insured against by Persons engaged in businesses similar to that of the Credit Parties, with such companies, in such amounts, with such deductibles and under policies in such form as shall be reasonably satisfactory to the Agent. Certificates of insurance or, if requested by the Agent, original (or certified) copies of such policies of insurance have been or shall be, no later than the Closing Date, delivered to the Agent, and shall contain an endorsement, in form and substance reasonably acceptable to Agent, showing loss under such insurance policies payable to the Agent, for the benefit of the Holders. Such endorsement, or an independent instrument furnished to the Agent, shall provide that the insurance company shall give the Agent at least thirty (30) days’ written notice before any such policy of insurance is altered or canceled and that no act, whether willful or negligent, or default of a Credit Party or any other Person shall affect the right of the Agent to recover under such policy of insurance in case of loss or damage. Each Credit Party hereby directs all insurers under all policies of insurance to pay all proceeds payable thereunder directly to the Agent. Each Credit Party irrevocably makes, constitutes and appoints the Agent (and all officers, employees or agents designated by the Agent) as such Person’s true and lawful attorney (and agent-in-fact) for the purpose of making, settling and adjusting claims under such policies of insurance, endorsing the name of such Person on any check, draft, instrument or other item of payment for the proceeds of such policies of insurance and making all determinations and decisions with respect to such policies of insurance, provided however, that if no Event of Default shall have occurred and be continuing, such Credit Party may make, settle and adjust claims involving less than $100,000 in the aggregate without the Agent’s consent.
(b)The Credit Parties shall maintain, at their expense, such public liability and third-party property damage insurance as is customary for Persons engaged in businesses similar to that of the Credit Parties with such companies and in such amounts with such deductibles and under policies in such form as shall be reasonably satisfactory to the Agent in light of such customs and certificates of insurance or, if requested by the Agent, original (or certified) copies of such policies have been or shall be, no later than the Closing Date, delivered to the Agent; each such policy shall contain an endorsement showing the Agent as additional insured thereunder and providing that the insurance company shall give the Agent at least thirty (30) days’ written notice before any such policy shall be altered or canceled.

(c)If any Credit Party at any time or times hereafter shall fail to obtain or maintain any of the policies of insurance required above or to pay any premium relating thereto, then the Agent, without waiving or releasing any obligation or default by the Credit Parties hereunder, may (but shall be under no obligation to) obtain and maintain such policies of insurance and pay such premiums and take such other actions with respect thereto as the Agent reasonably deems advisable. Such insurance, if obtained by the Agent, may, but need not, protect each Credit Parties’ interests or pay any claim made by or against any Credit Party with respect to the Collateral. Such insurance may be more expensive than the cost of insurance the Credit Parties may be able to obtain on their own and may be cancelled only upon the Credit Parties providing evidence that they have obtained the insurance as required above. All sums disbursed by the Agent in connection with any such actions, including, without limitation, court costs, expenses, other charges relating thereto and reasonable attorneys’ fees, shall constitute part
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of the Obligations due and owing hereunder, shall be payable on demand by the Credit Parties to the Agent and, until paid, shall bear interest at the Default Rate.

Section 8.12    Corporate Existence and Maintenance of Properties. Each Credit Party shall, and each Credit Party shall cause each of its Subsidiaries to, maintain and preserve (a) its existence and good standing in the jurisdiction of its organization or incorporation and (b) its qualification to do business and good standing in each jurisdiction where the nature of its business makes such qualification necessary (other than such jurisdictions in which the failure to be so qualified or in good standing could not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect). Each Credit Party shall, and each Credit Party shall cause each of its Subsidiaries to, maintain or cause to be maintained in good repair, working order and condition, ordinary wear and tear excepted, all material properties used or useful in the business of the Credit Parties and their Subsidiaries and from time to time will make or cause to be made all appropriate repairs, renewals and replacements thereof.
Section 8.13    Non-circumvention. Each Credit Party hereby covenants and agrees that neither any of the Credit Parties nor any of their Subsidiaries will, by amendment of its certificate of incorporation, certificate of formation, limited liability company agreement, bylaws, or other governing documents, or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Agreement or the other Transaction Documents, and will at all times in good faith carry out all of the provisions of this Agreement and the other Transaction Documents and take all reasonable action as may be required to protect the rights of the Agent, the Lenders and the Holders.
Section 8.14    Change in Business; Change in Accounting; Elevate Credit. The Credit Parties shall not engage in any line of business other than the businesses engaged in on the Closing Date and activities reasonably incident thereto. The Credit Parties shall not (a) make any significant change in accounting treatment or reporting practices, except as required by GAAP, (b) change their Fiscal Year; method for determining fiscal quarters of any Credit Party or of any Subsidiary of any Credit Party, (c) change their name as it appears in official filings in its jurisdiction of organization or (d) change their jurisdiction of organization, in the case of clauses (c) and (d), without providing written notice to Agent no later than thirty (30) days following the occurrence of any such change. Elevate Credit Parent shall not trade, carry on any business, own any assets or incur any liabilities except for:
(a)the provision of administrative services (excluding treasury services) to its Subsidiaries of a type customarily provided by a holding company to its Subsidiaries;
(b)ownership of shares in its Subsidiaries, intra-company debit balances, intra-company credit balances and other credit balances in bank accounts, cash and Cash Equivalent Investments but only if those shares, credit balances, cash and Cash Equivalent Investments constitute Collateral; and
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(c)any liabilities under the Transaction Documents to which it is a party and professional fees and administration costs in the ordinary course of business as a holding company.

Section 8.15    U.S. Real Property Holding Corporation. None of the Credit Parties shall become a U.S. real property holding corporation or permit or cause its shares to be U.S. real property interests, within the meaning of Section 897 of the Code.
Section 8.16    Compliance with Laws. No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to, fail to (a) comply in all material respects with the requirements of all applicable laws, rules, regulations and orders of any Governmental Authority (including, without limitation, all Environmental Laws and the Requirements) and (b) preserve and maintain in full force and effect all material rights, privileges, qualifications, permits, licenses and franchises necessary in the normal conduct of its business. Each Holder is deemed to agree and represent that the Issuer (or its agents or representatives including the Agent) may (1) provide such information and documentation and any other information concerning its investment in such Notes to the Cayman Islands Tax Information Authority, the U.S. Internal Revenue Service and any other relevant tax authority, in each case to the extent required by applicable law, and (2) take such other steps as the deem necessary or helpful to comply with FATCA.
Section 8.17    Additional Collateral. With respect to any Property acquired after the Closing Date by any Credit Party as to which the Agent, for the benefit of the Holders does not have a perfected Lien, such Credit Party shall promptly (i) execute and deliver to the Agent, for the benefit of the Holders or its agent such amendments to the Security Documents or such other documents as the Agent, for the benefit of the Holders deems necessary or advisable to grant to the Agent, for the benefit of the Holders, a security interest in such Property and (ii) take all other actions necessary or advisable to grant to the Agent, for the benefit of the Holders, a perfected first priority (subject to Permitted Liens) security interest in such Property, including, without limitation, the filing of UCC financing statements in such jurisdictions as may be required by the Security Documents or by law or as may be requested by the Agent. If at any time during the existence of an Event of Default, Agent seeks to collect or liquidate Collateral, the Credit Parties will use their best efforts to assist Agent in any such efforts, including effectuating a sale of such Collateral.
Section 8.18    Audit Rights; Field Exams; Appraisals; Meetings; Books and Records.
(a)The Credit Parties shall, upon reasonable notice and during reasonable business hours (except during the continuance of an Event of Default when no such limitations shall apply), subject to reasonable safety and security procedures, and at the Credit Parties’ sole cost and expense, permit the Agent and each Holder (or any of their respective designated representatives) to visit and inspect any of the properties of any Credit Party or any of their Subsidiaries, to examine the books of account of any Credit Party or any of their Subsidiaries (and to make copies thereof and extracts therefrom), and to discuss the affairs, finances and accounts of the Credit Parties and their Subsidiaries, and to be advised as to the same by their
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respective officers, and to conduct examinations and verifications (whether by internal commercial finance examiners or independent auditors), all at such reasonable times and intervals as the Agent and the Holders may reasonably request. In addition to the foregoing, Agent shall have the right, at the joint and several expense of the Credit Parties, to conduct a legal and/or regulatory review regarding the compliance of any Credit Parties, as well as the form of Consumer Loan Agreement (and any other agreements, certificates, instruments and documents related thereto), with all applicable laws, and any Credit Party shall cooperate with Agent and its internal and/or outside legal counsel or other third party advisors in such review. Except during the continuance of an Event of Default, the Credit Parties shall not exercise any of their rights pursuant to this Section 8.18(a) more than once per calendar year.
(b)The Credit Parties shall, upon reasonable notice and during reasonable business hours, subject to reasonable safety and security procedures, and at the Credit Parties’ sole cost and expense, permit the Agent (or any of its designated representatives) and each Holder to conduct field exams of the Collateral, all at such reasonable times and intervals as the Agent may reasonably request. Except during the continuance of an Event of Default, the Credit Parties shall not exercise any of their rights pursuant to this Section 8.18(b) more than once per calendar year.

(c)The Credit Parties shall, at Agent’s request (which shall be made no more frequently than once during each calendar year unless an Event of Default shall have occurred and be continuing) and upon reasonable notice, and at the Credit Parties’ sole cost and expense, obtain an appraisal of the Collateral from an independent appraisal firm reasonably satisfactory to Agent.

(d)The Credit Parties will, upon the request of the Agent, participate in a meeting of the Agent and the Holders twice during each Fiscal Year to be held at the Credit Parties’ corporate offices (or at such other location as may be agreed to by the Borrower and the Agent) at such time as may be agreed to by the Borrower and the Agent.

(e)The Credit Parties shall, at the Credit Parties’ sole cost and expense, make all books and records of the Credit Parties available for review electronically by the Agent upon Agent’s request and subject to applicable Requirements with respect to disclosure of Customer Information.

Section 8.19    Additional Issuances of Debt Securities; Right of First Refusal on New Indebtedness. So long as any Notes are outstanding, none of the Credit Parties nor any of their Subsidiaries shall, directly or indirectly, offer, sell, grant any option to purchase, or otherwise dispose of (or announce any offer, sale, grant or any option to purchase or other disposition of) any of its debt securities or Equity Interests (including any preferred stock or other instrument or security) that may, in accordance with the terms thereof, be, at any time during its life, and under any circumstance, convertible into or exchangeable or exercisable for Indebtedness or debt securities, but excluding Permitted Indebtedness, without the prior written consent of the Agent; provided, that, if any Credit Party seeks to incur additional Indebtedness from time to time from any third-party, then in each such case, the Agent and its designees shall have a right of first
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refusal (but not an obligation) to provide such additional Indebtedness on the same terms and conditions as would be provided by such third-parties. The Borrower will give Agent written notice (a “ROFR Notice”) describing the additional Indebtedness and the terms and conditions thereof (collectively, the “New Indebtedness Opportunity”). The Agent and its designees shall have thirty (30) days from the date of the Agent’s receipt of a ROFR Notice to agree to provide such additional Indebtedness pursuant to the New Indebtedness Opportunity. If the Agent fails to exercise such right of first refusal within said thirty (30)-day period with respect to the New Indebtedness Opportunity, then the New Indebtedness Opportunity may be offered to such third-party upon the identical terms and conditions as are specified in the applicable ROFR Notice; provided, that in the event the New Indebtedness Opportunity has not been consummated by the applicable third-party within the one hundred (100)-day period from the date of the ROFR Notice, no New Indebtedness Opportunity may be offered by the Credit Parties to any third-party without first offering such New Indebtedness Opportunity to the Agent in the manner provided above.
Section 8.20    Post-Closing Obligations.
(a)The Credit Parties shall, (i) in a manner satisfactory to the Agent, cooperate with and assist the Agent, the Lenders and their respective attorneys, officers, employees, representatives, consultants and agents (collectively, the “Reviewing Parties” and each, a “Reviewing Party”) in connection with any Reviewing Party’s regulatory review and due diligence of the Credit Parties’ lending program for the solicitation, marketing, documentation, origination and servicing of Consumer Loans in each state in which any Credit Party originates Consumer Loans, (ii) review and consider in good faith any issues raised by, or comments, recommendations or guidance from, any Reviewing Party with respect to any such lending program (such issues, comments, recommendations and guidance, collectively, the “Diligence Issues”) and (iii) within 90 days (or such longer period as may be agreed to by the Agent in its sole discretion) of any Credit Party’s receipt of written notice of any Diligence Issues from a Reviewing Party, resolve or address any such Diligence Issues, in each case, in a manner satisfactory to the Agent.
(b)The Credit Parties shall deliver, or cause to be delivered to the Agent, within sixty (60) days after the Closing Date (or such later date as shall be acceptable to the Agent in its sole discretion), deposit account control agreements executed by the applicable Credit Party and each depository institution for which such Credit Party maintains deposit and other accounts, each in form and substance reasonably satisfactory to the Agent in its sole discretion, covering all deposit accounts and other accounts maintained at such depository institution.

Section 8.21    Use of Proceeds. The Borrower will use the proceeds from the sale of each Note solely (i) to purchase participation interests in loan and interest receivables (in any non-payday loan product), originated by FinWise Bankany Eligible Consumer Loans, (ii) to fund certain fees and expenses associated with the consummation of the transactions contemplated by this Agreement, and (iii) subject to excess availability under this facility, to transfer funds as permitted under this Agreement.
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Section 8.22    Fees, Costs and Expenses. The Credit Parties, on behalf of themselves and the other Credit Parties, shall jointly and severally reimburse the Lenders and the Holders or their designee(s) and applicable legal counsel for reasonable and documented costs and expenses incurred in connection with the transactions contemplated by the Transaction Documents (including reasonable legal fees and disbursements in connection therewith, documentation and implementation of the transactions contemplated by the Transaction Documents and due diligence in connection therewith and ongoing fees and expenses of the Borrower), subject to the limitations set forth in Section 13.1 hereof, which amounts shall be paid by the Credit Parties to the Agent, for the benefit of itself and the Lenders and the Holders, on the Closing Date. After the Closing Date, the Guarantors agree to pay the ongoing fees, Taxes (if any) and expenses of the Borrower. In addition, the Credit Parties shall, within five (5) Business Days of receiving a request from the Agent therefor, reimburse the Agent for any additional reasonable legal fees incurred post-closing in connection with perfecting the Agent’s security interests and any additional filing or recording fees in connection therewith. The Credit Parties shall be responsible for the payment of, and shall pay, any placement agent’s fees, financial advisory fees, or broker’s commissions relating to or arising out of the transactions contemplated hereby, and shall hold the Agent, each Holder and each Lender harmless against, any liability, loss or expense (including, without limitation, reasonable attorney’s fees and out-of-pocket expenses) arising in connection with any claim relating to any such payment.
Section 8.23    Modification of Organizational Documents and Certain Documents . The Credit Parties shall not, without the prior written consent of the Agent, (i) permit the charter, by-laws, memorandum and articles of association, or other organizational or incorporation documents of any Credit Party, or any Material Contract, to be amended or modified, or (ii) amend, supplement in a manner adverse to the Agent, any Lender or any Holder or otherwise modify, or waive any material rights, claims or remedies under, any of the Consumer Loan Agreements except with respect to a settlement or charge off thereunder in the ordinary course of business.
Section 8.24    Joinder. The Credit Parties shall notify the Agent in writing within the earlier of: (i) thirty (30) days of the formation or acquisition of any Subsidiaries; or (ii) the making of any Consumer Loans by any such newly formed or acquired Subsidiaries. For any Subsidiaries formed or acquired after the Closing Date, the Credit Parties shall at their own expense, within the time period set forth in the immediately preceding sentence, cause each such Subsidiary (provided, in the case of Foreign Subsidiaries, no 956 Impact would arise as a result thereof) to execute an instrument of joinder in the form attached hereto as Exhibit G (a “Joinder Agreement”), obligating such Subsidiary to any or all of the Transaction Documents deemed necessary or appropriate by the Agent and cause the applicable Person that owns the Equity Interests of such Subsidiary to pledge to the Holders 100% of the Equity Interests owned by it of each such Subsidiary formed or acquired after the Closing Date and execute and deliver all documents or instruments required thereunder or appropriate to perfect the security interest created thereby (provided that with respect to any First Tier Foreign Subsidiary, if a 956 Impact exists such pledge shall be limited to sixty-five percent (65%) of such Foreign Subsidiary’s outstanding voting Equity Interests and one hundred percent (100%) of such Foreign Subsidiary’s outstanding non-voting Equity Interests). In the event a Person becomes a
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Guarantor (a “New Guarantor”) pursuant to the Joinder Agreement, upon such execution the New Guarantor shall be bound by all the terms and conditions hereof and the other Transaction Documents to the same extent as though such New Guarantor had originally executed the Transaction Documents. The addition of a New Guarantor shall not in any manner affect the obligations of the other Credit Parties hereunder or thereunder. Each Credit Party, each Lender, each Holder and the Agent acknowledges that the schedules and exhibits hereto or thereto may be amended or modified in connection with the addition of any New Guarantor to reflect information relating to such New Guarantor. Compliance with this Section 8.24 shall not excuse any violation of Section 8.8 for failing to obtain Lender’s prior consent to a merger, consolidation or Acquisition. A “956 Impact” will be deemed to exist to the extent the issuance of a guaranty by, grant of a Lien by, or pledge of greater than two-thirds of the voting Equity Interests of, a Foreign Subsidiary would result in material incremental income tax liability under Section 956 of the Code to Elevate Credit Parent, taking into account actual anticipated repatriation of funds, foreign tax credits and other relevant factors.
Section 8.25    Investments. No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to, make or permit to exist any Investment in any other Person, except the following:
(a)Cash Equivalent Investments, to the extent the Agent has a first priority security interest therein;
(b)bank deposits in the ordinary course of business, to the extent the Agent has a first priority security interest therein;

(c)Investments in securities of account debtors received pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of such account debtors;

(d)Investments owned by the Credit Parties and their Subsidiaries on the Closing Date as set forth on Schedule 8.25;

(e)(i) Domestic Credit Parties may maintain Investments in Foreign Subsidiaries in amounts not to exceed the outstanding amounts of such Investments as of the Closing Date plus additional Investments in Foreign Subsidiaries after the Closing Date to the extent expressly approved by Agent in advance in writing; provided, if the Investments described in the foregoing clause (i) are evidenced by notes, such notes shall be pledged to Agent, for the benefit of the Lenders, and have such terms as Agent may reasonably require; and (ii) Foreign Subsidiaries may make Investments in other Foreign Subsidiaries;

(f)Investments constituting cash equity contributions by Elevate Credit Parent in the Borrower, including, without limitation, cash equity contributions made in order to satisfy the LTV Covenant Cure Obligation, and Investments by Elevate Credit Parent in its other Subsidiaries that are Credit Parties; and
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(g)Investments made by the Credit Parties (other than Elevate Credit Parent) constituting Consumer Loans to residents of the United States.

Section 8.26    Further Assurances. At any time or from time to time upon the request of the Agent, each Credit Party will, at its expense, promptly execute, acknowledge and deliver such further documents and do such other acts and things as the Agent may reasonably request in order to effect fully the purposes of the Transaction Documents. In furtherance and not in limitation of the foregoing, each Credit Party shall take such actions as the Agent may reasonably request from time to time to ensure that the Obligations are guaranteed by all Subsidiaries of the Credit Parties and secured by substantially all of the assets of the Credit Parties and their Subsidiaries (in each case provided, in the case of Foreign Subsidiaries, no 956 Impact would arise as a result thereof).
Section 8.27    Backup Servicer. At any time or from time to time upon the request of the Agent, the Borrower shall appoint, at Borrower’s sole expense, a Backup Servicer that is satisfactory to the Agent in Agent’s sole discretion and shall enter into a Backup Servicing Agreement that is satisfactory (including with respect to the Credit Parties’ obligations to cooperate with such Backup servicer and provide any data and other information and documents, including data tapes, to such Backup Servicer to allow Backup Servicer to perform its duties) to the Agent in Agent’s sole discretion.
Section 8.28    Claims Escrow Account.
(a)Within two (2) Business Days on or after the date in which (i) all Obligations not relating to any pending claim that are due to Lenders and Holders have been paid in full and (ii) the Credit Parties are aware of a pending claim, the Borrower shall establish and maintain a deposit account at a bank reasonable acceptable to Agent, in the form of time deposit or demand account (the “Claims Escrow Account”). Such Claims Escrow Account shall be a Blocked Account. The Borrower shall deposit in the Claims Escrow Account, no later than one (1) Business Day following receipt, fifty percent (50%) of the collections received by Borrower from all of the Consumer Loans until the Claims Escrow Account Funding Condition is satisfied. After a Claims Escrow Account is established pursuant to this Section 8.28 and subject to the rights of the parties under the Intercreditor Agreement, the Borrower shall be permitted to remit, prior to the satisfaction of the Claims Escrow Account Funding Condition, the fifty percent (50%) of the collections remaining after remitting to the Claims Escrow Account and, on and after the satisfaction of the Claims Escrow Account Funding Condition, one hundred percent (100%) of any collections to the applicable Elevate Credit Subsidiary in accordance with the applicable contractual terms between Borrower and such Elevate Credit Subsidiary. For the avoidance of doubt and notwithstanding Section 12.14, subject to the satisfaction of the foregoing requirements this Section 8.28(a), the Agent shall not seek to limit the ability of the Borrower to remit funds to the Elevate Credit Subsidiary under this Section 8.28(a) and such amounts shall be released without restriction from the Lien of the Financing Agreement.
(b)In the sole discretion of the Agent, funds deposited in the Claims Escrow Account may be used to satisfy any Obligations then due to Lenders, Holders and/or Agent.
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Article 9
CROSS GUARANTY

Section 9.1    Cross-Guaranty. Each Guarantor, jointly and severally, hereby absolutely and unconditionally guarantees to the Agent, the Lenders, the Holders and their respective successors and assigns the full and prompt payment (whether at stated maturity, by acceleration or otherwise) and performance of, all Obligations. Each Guarantor agrees that its guaranty obligation hereunder is a continuing guaranty of payment and performance and not of collection, that its obligations under this Article 9 shall not be discharged until payment and performance, in full, of the Obligations under the Transaction Documents has occurred and all commitments (if any) to lend hereunder have been terminated, and that its obligations under this Article 9 shall be absolute and unconditional, irrespective of, and unaffected by:
(a)the genuineness, validity, regularity, enforceability or any future amendment of, or change in, this Agreement, any other Transaction Document or any other agreement, document or instrument to which any Credit Party is or may become a party;
(b)the absence of any action to enforce this Agreement (including this Article 9) or any other Transaction Document or the waiver or consent by the Agent, the Lenders or the Holders with respect to any of the provisions thereof;

(c)the Insolvency of any Credit Party or Subsidiary; or

(d)any other action or circumstances that might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor.

Each Guarantor shall be regarded, and shall be in the same position, as principal debtor with respect to the obligations guaranteed hereunder.
Section 9.2    Waivers by Guarantors. Each Guarantor expressly waives all rights it may have now or in the future under any statute, or at common law, or at law or in equity, or otherwise, to compel the Agent, the Lenders or the Holders to marshal assets or to proceed in respect of the obligations guaranteed hereunder against any other Credit Party or Subsidiary, any other party or against any security for the payment and performance of the obligations under the Transaction Documents before proceeding against, or as a condition to proceeding against, such Guarantor. It is agreed among each Guarantor that the foregoing waivers are of the essence of the transaction contemplated by this Agreement and the other Transaction Documents and that, but for the provisions of this Article 9 and such waivers, the Agent, the Lenders and the Holders would decline to enter into this Agreement.
Section 9.3    Benefit of Guaranty. Each Guarantor agrees that the provisions of this Article 9 are for the benefit of the Agent, the Lenders, the Holders and their respective successors, transferees, endorsees and assigns, and nothing herein contained shall impair, as
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between any other Credit Party, on the one hand, and the Agent, the Lenders and the Holders, on the other hand, the obligations of such other Credit Party under the Transaction Documents.
Section 9.4    Waiver of Subrogation, Etc. Notwithstanding anything to the contrary in this Agreement or in any other Transaction Document, and except as set forth in Section 9.7, each Guarantor hereby expressly and irrevocably waives any and all rights at law or in equity to subrogation, reimbursement, exoneration, contribution, indemnification or set off and any and all defenses available to a surety, guarantor or accommodation co-obligor. Each Guarantor acknowledges and agrees that this waiver is intended to benefit the Agent, the Lenders and the Holders and shall not limit or otherwise affect such Guarantor’s liability hereunder or the enforceability of this Article 9, and that the Agent, the Lenders, the Holders and their respective successors and assigns are intended third party beneficiaries of the waivers and agreements set forth in this Section 9.4.
Section 9.5    Election of Remedies. If the Agent, the Lenders or the Holders may, under applicable law, proceed to realize their benefits under any of the Transaction Documents, the Agent, any of the Lenders or any of the Holders may, at their sole option, determine which of their remedies or rights they may pursue without affecting any of their rights and remedies under this Article 9. If, in the exercise of any of their rights and remedies, any of the Agent, the Lenders or the Holders shall forfeit any of their rights or remedies, including their right to enter a deficiency judgment against any Credit Party or any other Person, whether because of any applicable laws pertaining to “election of remedies” or the like, each Credit Party hereby consents to such action by the Agent, such Lenders or such Holders, as applicable, and waives any claim based upon such action, even if such action by the Agent, such Lenders or such Holders shall result in a full or partial loss of any rights of subrogation that any Credit Party might otherwise have had but for such action by the Agent, such Lenders or such Holders. Any election of remedies that results in the denial or impairment of the right of the Agent, the Lenders or the Holders to seek a deficiency judgment against any Credit Party shall not impair any other Credit Party’s obligation to pay the full amount of the Obligations under the Transaction Documents.
Section 9.6    Limitation. Notwithstanding any provision herein contained to the contrary, each Guarantor’s liability under this Article 9 (which liability is in any event in addition to amounts for which Credit Parties are primarily liable under the Transaction Documents) shall be limited to an amount not to exceed as of any date of determination the greater of:
(a)the net amount of all amounts advanced to such Guarantor under this Agreement or otherwise transferred to, or for the benefit of, such Guarantor (including any interest and fees and other charges); and
(b)the amount that could be claimed by the Agent, the Lenders and the Holders from such Guarantor under this Article 9 without rendering such claim voidable or avoidable under Section 548 of Chapter 11 of the Bankruptcy Code or under any applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance Act or similar statute or
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common law after taking into account, among other things, such Guarantor’s right of contribution and indemnification from each other Credit Party under Section 9.7.

Section 9.7    Contribution with Respect to Guaranty Obligations.
(a)To the extent that any Guarantor shall make a payment under this Article 9 of all or any of the Obligations under the Transaction Documents (other than financial accommodations made to that Guarantor for which it is primarily liable) (a “Guarantor Payment”) that, taking into account all other Guarantor Payments then previously or concurrently made by any other Guarantor, exceeds the amount that such Guarantor would otherwise have paid if each Guarantor had paid the aggregate Obligations under the Transaction Documents satisfied by such Guarantor Payment in the same proportion that such Guarantor’s “Allocable Amount” (as defined below) (as determined immediately prior to such Guarantor Payment) bore to the aggregate Allocable Amounts of each of the Guarantor as determined immediately prior to the making of such Guarantor Payment, then, following indefeasible payment in full in cash of the Obligations under the Transaction Documents and termination of the Transaction Documents (including all commitments (if any) to lend hereunder), such Guarantor shall be entitled to receive contribution and indemnification payments from, and be reimbursed by, each other Guarantor for the amount of such excess, pro rata based upon their respective Allocable Amounts in effect immediately prior to such Guarantor Payment.
(b)As of any date of determination, the “Allocable Amount” of any Guarantor shall be equal to the maximum amount of the claim that could then be recovered from such Guarantor under this Article 9 without rendering such claim voidable or avoidable under Section 548 of Chapter 11 of the Bankruptcy Code or under any applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance Act or similar statute or common law.

(c)This Section 9.7 is intended only to define the relative rights of Guarantor and nothing set forth in this Section 9.7 is intended to or shall impair the obligations of Credit Parties, jointly and severally, to pay any amounts as and when the same shall become due and payable in accordance with the terms of this Agreement, including Section 9.1. Nothing contained in this Section 9.7 shall limit the liability of any Credit Party to pay the financial accommodations made directly or indirectly to that Credit Party and accrued interest, fees and expenses with respect thereto for which such Credit Party shall be primarily liable.

(d)The parties hereto acknowledge that the rights of contribution and indemnification hereunder shall constitute assets of the Guarantor to which such contribution and indemnification is owing.

The rights of the indemnifying Guarantor against other Guarantor under this Section 9.7 shall be exercisable upon the full and indefeasible payment of the Obligations under the Transaction Documents and the termination of the Transaction Documents.
Section 9.8    Liability Cumulative. The liability of each Guarantor under this Article 9 is in addition to and shall be cumulative with all liabilities of each other Credit Party to the
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Agent, the Lenders and the Holders under this Agreement and the other Transaction Documents to which such Credit Party is a party or in respect of any Obligations under the Transaction Documents or obligation of the other Credit Party, without any limitation as to amount, unless the instrument or agreement evidencing or creating such other liability specifically provides to the contrary.
Section 9.9    Stay of Acceleration. If acceleration of the time for payment of any amount payable by the Credit Parties under this Agreement is stayed upon the insolvency, bankruptcy or reorganization of any of the Credit Parties, all such amounts otherwise subject to acceleration under the terms of this Agreement shall nonetheless be payable jointly and severally by the Credit Parties hereunder forthwith on demand by the Agent.
Section 9.10    Benefit to Credit Parties. All of the Credit Parties and their Subsidiaries are engaged in related businesses and integrated to such an extent that the financial strength and flexibility of each such Person has a direct impact on the success of each other Person. Each Credit Party and each Subsidiary will derive substantial direct and indirect benefit from the purchase and sale of the Notes hereunder.
Section 9.11    Indemnity. Each Guarantor irrevocably and unconditionally jointly and severally agrees with the Agent, each Lender and each Holder that if any obligation guaranteed by it is or becomes unenforceable, invalid or illegal, it will, as an independent and primary obligation, indemnify the Agent, such Lender and/or such Holder, as applicable, immediately on demand against any cost, loss or liability it incurs as a result of the Borrower or Guarantor not paying any amount which would, but for such unenforceability, invalidity or illegality, have been payable by it under any Transaction Document on the date when it would have been due. The amount payable by a Guarantor under this indemnity will not exceed the amount it would have had to pay under this Article 9 if the amount claimed had been recoverable on the basis of a guarantee.
Section 9.12    Reinstatement. If any discharge, release or arrangement (whether in respect of the Obligations or any security for those Obligations or otherwise) is made by the Agent, a Lender and/or a Holder in whole or in part on the basis of any payment, security or other disposition which is avoided or must be restored in insolvency, liquidation, administration or otherwise, without limitation, then the liability of each Guarantor under this Article 9 will continue or be reinstated as if the discharge, release or arrangement had not occurred.
Section 9.13    Guarantor Intent. Without prejudice to any other provision of this Article 9, each Guarantor expressly confirms that it intends that this guarantee shall extend from time to time to any (however fundamental) variation, increase, extension or addition of or to any of the Transaction Documents and/or any facility or amount made available under any of the Transaction Documents for the purposes of or in connection with any of the following: business acquisitions of any nature; increasing working capital; enabling investor distributions to be made; carrying out restructurings; refinancing existing facilities; refinancing any other indebtedness; making facilities available to new borrowers; any other variation or extension of the purposes for which any such facility or amount might be made available from time to time;
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and any reasonable and invoiced fees, costs and/or expenses associated with any of the foregoing.
Section 9.14    General. Notwithstanding anything to the contrary set forth herein, the provisions of this Article 9 shall not be construed to (a) permit the Agent, Lenders or Holders to amend or otherwise modify this Agreement or the Obligations in a manner that would otherwise require the consent of the Borrower pursuant to the express terms of this Agreement or (b) constitute a waiver by the Borrower of the Borrower’s rights or defenses under this Agreement in the Borrower’s capacity as the Borrower hereunder.
Article 10
RIGHTS UPON EVENT OF DEFAULT

Section 10.1    Event of Default. Each of the following events shall constitute an “Event of Default”:
(a)any Credit Parties’ failure to pay to the Agent, the Holders and/or the Lenders any amount of (i) principal or redemptions when and as due under this Agreement or any Note (including, without limitation, the Credit Parties’ failure to pay any redemption payments or amounts hereunder or under any Note) or any other Transaction Document, or any other agreement, document, certificate or other instrument delivered in connection with the transactions contemplated hereby and thereby or (ii) interest (including interest calculated at the Default Rate), Late Charges, Prepayment Premium or other amounts (other than principal or redemptions) within five (5) days after the same shall become due under this Agreement or any Note or any other Transaction Document, or any other agreement, document, certificate or other instrument delivered in connection with the transactions contemplated hereby and thereby;
(b)any default occurs and is continuing under (subject to any applicable grace periods), or any redemption of or acceleration prior to maturity of, any Indebtedness (other than the Obligations) of any Credit Party or any Subsidiary of any Credit Party in excess of $100,000; provided, that, in the event that any such default or acceleration of indebtedness is cured or rescinded by the holders thereof prior to acceleration of the Notes, no Event of Default shall exist as a result of such cured default or rescinded acceleration;

(c)(i) any Credit Party or any Subsidiary of any Credit Party pursuant to or within the meaning of Title 11, U.S. Code (the “Bankruptcy Code”) or any similar federal, foreign or state law for the relief of debtors (collectively, “Bankruptcy Law”), (A) commences a voluntary case, (B) consents to the entry of an order for relief against it in an involuntary case, or to the conversion of an involuntary case to a voluntary case, (C) consents to the appointment of or taking of possession by a receiver, trustee, assignee, liquidator or similar official (a “Custodian”) for all or a substantial part of its property, (D) makes a general assignment for the benefit of its creditors, or (E) is generally unable to pay its debts as they become due; (ii) the Credit Parties, taken as a whole, become Insolvent or (iii) the board of directors (or similar governing body) of any Credit Party or any Subsidiary of any Credit Party (or any committee
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thereof) adopts any resolution or otherwise authorizes any action to approve any of the actions referred to in this Section 10.1(c) or Section 10.1(d);

(d)any expropriation, attachment, sequestration, distress or execution or any analogous process in any jurisdiction in which a court of competent jurisdiction (i) enters an order or decree under any Bankruptcy Law, which order or decree (A) (1) is not stayed or (2) is not rescinded, vacated, overturned, or otherwise withdrawn within sixty (60) days after the entry thereof, and (B) is for relief against any Credit Party or any Subsidiary of any Credit Party in an involuntary case, (ii) appoints a Custodian over all or a substantial part of the property of any Credit Party or any Subsidiary of any Credit Party and such appointment continues for sixty (60) days, (iii) orders the liquidation of any Credit Party or any Subsidiary of any Credit Party, or (iv) issues a warrant of attachment, execution or similar process against any substantial part of the property of any Credit Party or any Subsidiary of any Credit Party;

(e)a final judgment or judgments for the payment of money in excess of $250,000 or that otherwise could reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect are rendered against any Credit Party or any Subsidiary of any Credit Party, which judgments are not, within fifteen (15) days after the entry thereof, bonded, discharged or stayed pending appeal, or are not discharged within fifteen (15) days after the expiration of such stay, unless (in the case of a monetary judgment) such judgment is covered by third-party insurance, so long as the applicable Credit Party or Subsidiary provides the Agent a written statement from such insurer (which written statement shall be reasonably satisfactory to the Agent) to the effect that such judgment is covered by insurance and such Credit Party or Subsidiary will receive the proceeds of such insurance within fifteen (15) days following the issuance of such judgment;

(f)any Credit Party breaches any covenant, or other term or condition of any Transaction Document, any other agreement with the Agent, any Lender or any Holder, except in the case of a breach of a covenant or other term or condition of any Transaction Document (other than Sections 8.1(a), 8.2, 8.3(c), 8.4 through 8.11, 8.13, 8.14, 8.16, 8.17, 8.18, 8.20, 8.21, 8.23, and 8.25 of this Agreement) which is curable, only if such breach continues for a period of thirty (30) days after the earlier to occur of (A) the date upon which an executive officer of any Credit Party becomes aware of such default and (B) the date upon which written notice thereof is given to the Borrower by Agent; and a breach addressed by the other provisions of this Section 10.1; provided, the foregoing notwithstanding, the Credit Parties shall be afforded a grace period of five (5) Business Days, exercisable no more than an aggregate of twice per year during the term of this Agreement, with regard to the delivery requirements set forth in Section 8.2 hereof;

(g)a Change of Control that is not in connection with an M&A Event resulting in a Permitted Redemption pursuant to Section 2.3(a) occurs;

(h)any representation or warranty made by any Credit Party herein or in any other Transaction Document is breached or is false or misleading, each in any material respect;

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(i)any “Event of Default” occurs and is continuing with respect to any of the other Transaction Documents, the Republic Financing Agreement, the CC Financing Agreement or the Other Financing Agreement beyond any applicable notice or cure period;

(j)(i) the written rescindment or repudiation by any Credit Party of any Transaction Document or any of its obligations under any Transaction Document, or (ii) any Transaction Document or any material term thereof shall cease to be, or is asserted by any Credit Party not to be, a legal, valid and binding obligation of any Credit Party enforceable in accordance with its terms;

(k)any Lien against the Collateral intended to be created by any Security Document shall at any time be invalidated, subordinated (except to Permitted Liens to the extent expressly permitted under the Transaction Documents) or otherwise cease to be in full force and effect, for whatever reason, or any security interest purported to be created by any Security Document shall cease to be, or shall be asserted by any Credit Party not to be, a valid, first priority perfected Lien (to the extent that any Transaction Document obligates the parties to provide such a perfected first priority Lien, and except to the extent Permitted Liens are permitted by the terms of the Transaction Documents to have priority) in the Collateral (except as expressly otherwise provided under and in accordance with the terms of such Transaction Document);

(l)any material provision of any Transaction Document shall at any time for any reason be declared to be null and void, or the validity or enforceability thereof shall be contested by any Credit Party, or a proceeding shall be commenced by any Credit Party, or by any Governmental Authority having jurisdiction over such Credit Party, seeking to establish the invalidity or unenforceability thereof, or any Credit Party shall deny that it has any liability or obligation purported to be created under any Transaction Document;

(m)Reserved;

(n)the occurrence of (i) any event which could reasonably be expected to have a Material Adverse Effect, (ii) a State Force Majeure Event, or (iii) a Federal or Multi-State Force Majeure Event;

(o)(i) any Credit Party or Subsidiary of any Credit Party liquidates, dissolves, terminates or suspends its business operations or otherwise fails to operate its business in the ordinary course; provided, the foregoing notwithstanding any of the Elevate Credit Subsidiaries may suspend its operations in any jurisdiction in which it operates and dissolve as a result of a decision by the Credit Parties to exit one or more markets from time to time or (ii) the authority or ability of any Credit Party or Subsidiary of any Credit Party to conduct its business is limited or wholly or substantially curtailed by any seizure, expropriation, nationalization, intervention, restriction or other action by or on behalf of any governmental, regulatory or other authority or other person in relation to any Credit Party, any of their Subsidiaries or any of their respective assets;

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(p)Ken ReesJason Harvison and Chris Lutes shall, at any time for any reason, cease to be employed by either an Elevate Credit Subsidiary or Elevate Credit Parent in the same position and with duties substantially similar to those held as of the Closing Date (or, in the case of Jason Harvison, the Second Amendment Effective Date), unless a replacement reasonably satisfactory to Agent shall have been appointed and employed (including on an interim basis) within ninety (90) days of his cessation of employment;

(q)any material decline or depreciation in the value or market price of the Collateral (whether actual or reasonably anticipated), which causes the Collateral, in the reasonable opinion of Agent acting in good faith, to become unsatisfactory as to value or character, or which causes the Agent to reasonably believe that the Obligations are inadequately secured and that the likelihood for repayment of the Obligations is or will soon be materially impaired, time being of the essence;

(r)(i) the occurrence of one or more ERISA Events which individually or in the aggregate result(s) in or could reasonably be expected to result in liability of the Credit Parties or any of their Subsidiaries in excess of $100,000 during the term hereof; or (ii) the existence of any fact or circumstance that could reasonably be expected to result in the imposition of a Lien pursuant to Section 430(k) of the Code or ERISA or a violation of Section 436 of the Code; or

(s)any default or event of default (monetary or otherwise) by a Credit Party shall occur with respect to any Material Contract, which if curable has not been cured in accordance with the provisions of the applicable Material Contract and that could have a Material Adverse Effect.

Section 10.2    Termination of Commitments and Acceleration Right.
(a)Promptly after the occurrence of an Event of Default, the Borrower shall deliver written notice thereof via email, facsimile and overnight courier (an “Event of Default Notice”) to the Agent. At any time after the earlier of the Agent’s receipt of an Event of Default Notice and the Agent becoming aware of an Event of Default which has not been cured or waived, (i) the Agent may declare all or any portion of the Commitment of each Lender to purchase additional Notes to be suspended or terminated by delivering written notice thereof (an “Event of Default Commitment Suspension or Termination Notice”) to the Borrower, which Event of Default Commitment Suspension or Termination Notice shall indicate the portion of the Commitments that the Agent is suspending or terminating, whereupon such Commitments shall forthwith be suspended or terminated, and/or (ii) the Agent may require the Borrower to redeem all or any portion of the Notes (an “Event of Default Redemption”) by delivering written notice thereof (the “Event of Default Redemption Notice”) to the Borrower, which Event of Default Redemption Notice shall indicate the tranche(s) and portion(s) of the Notes that the Agent is requiring the Borrower to redeem (to be allocated on a pro rata basis with respect to the applicable outstanding Notes), whereupon a corresponding pro rata portion of the applicable Commitments in respect thereof shall forthwith be terminated effective upon the date of such Event of Default Redemption Notice; provided, that upon the occurrence of any Event of Default
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described in Section 10.1(c) or Section 10.1(d), and without any action on behalf of the Agent, any Holder or any Lender, the Commitments, in whole, shall automatically be terminated and the Notes shall automatically be redeemed by the Borrower. All Notes subject to redemption by the Borrower pursuant to this Section 10.2 shall be redeemed by the Borrower at a price equal to the outstanding principal amount of such Notes, plus accrued and unpaid interest, accrued and unpaid Late Charges, accrued and unpaid Prepayment Premium and all other amounts due under the Transaction Documents (the “Event of Default Redemption Price”); provided, the foregoing notwithstanding, the Prepayment Premium shall not be due solely in connection with an Event of Default Redemption occurring as a result of the occurrence of an Event of Default of the type described in Sections 10.1(n)(ii) or 10.1(n)(iii) so long as no other Event of Default shall be in existence at such time.
(b)In the case of an Event of Default Redemption, the Borrower shall deliver the applicable Event of Default Redemption Price to the Agent within three (3) Business Days after the Borrower’s receipt of the Event of Default Redemption Notice. In the case of an Event of Default Redemption of less than all of the principal of the Notes, the Borrower shall promptly cause to be issued and delivered to the Holders new Notes (in accordance with Section 2.7) representing the portion of the outstanding principal thereunder that has not be paid as a result of such redemption.

Section 10.3    Consultation Rights. Without in any way limiting any remedy that the Agent, the Holders or the Lenders may have, at law or in equity, under any Transaction Document (including under the foregoing provisions of this Article 10) or otherwise, upon the occurrence and during the continuance of any Event of Default, upon the request of the Agent, the Credit Parties shall hire or otherwise retain a consultant, advisor or similar Person acceptable to the Agent to advise the Credit Parties with respect to their business and operations.
Section 10.4    Other Remedies. The remedies provided herein and in the Notes shall be cumulative and in addition to all other remedies available under any of the other Transaction Documents, at law or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the Agent’s, any Lender’s or any Holder’s right to pursue actual damages for any failure by the Credit Parties to comply with the terms of this Agreement, the Notes and the other Transaction Documents. Amounts set forth or provided for herein and in the Notes with respect to payments and the like (and the computation thereof) shall be the amounts to be received by the Agent, the Holders and/or the Lenders and shall not, except as expressly provided herein, be subject to any other obligation of the Credit Parties (or the performance thereof). Each of the Credit Parties acknowledges that a breach by it of its obligations hereunder and under the Notes and the other Transaction Documents will cause irreparable harm to the Agent, the Holders and the Lenders and that the remedy at law for any such breach may be inadequate. The Credit Parties therefore agree that, in the event of any such breach or threatened breach, the Agent, the Holders and the Lenders shall be entitled, in addition to all other available remedies, to an injunction restraining any breach, without the necessity of showing economic loss and without any bond or other security being required.
Section 10.5    Application of Proceeds.
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(a)Notwithstanding anything to the contrary contained in this Agreement, upon the occurrence and during the continuance of an Event of Default, Borrower irrevocably waives the right to direct the application of any and all payments at any time or times thereafter received by Agent from or on behalf of the Borrower or any other Credit Party of all or any part of the Obligations, and, as between the Credit Parties on the one hand and Agent and Holders on the other, Agent shall have the continuing and exclusive right to apply and to reapply any and all payments received against the Obligations in such manner as Agent may deem advisable (subject to clause (b) below) notwithstanding any previous application by Agent.
(b)Following the occurrence and during the continuance of an Event of Default, any and all voluntary and mandatory, payments, prepayments or redemptions made in respect of the Obligations shall be delivered to the Agent and shall be applied in the following order: first, to all fees, costs, indemnities, liabilities, obligations and expenses incurred by or owing to Agent with respect to this Agreement, the other Transaction Documents or the Collateral; second, to accrued and unpaid interest on a pro rata basis with respect to the outstanding Notes; and third, to the principal amount of Notes then due and owing on a pro rata basis with respect to the outstanding Notes.

(c)Any payments, prepayments or proceeds of Collateral received by any Lender that were not permitted to be made under this Agreement or were not applied as required under this Agreement shall be promptly paid over to the Agent for application under Section 10.5(b). Any balance remaining after giving effect to the applications set forth in this Section 10.5 shall be delivered to Borrower or to whoever may be lawfully entitled to receive such balance or as a court of competent jurisdiction may direct. In carrying out any of the applications set forth in this Section 10.5, (i) amounts received shall be applied in the numerical order provided until exhausted prior to the application to the next succeeding category and (ii) each of the Persons entitled to receive a payment in any particular category shall receive an amount equal to its pro rata share of amounts available to be applied pursuant thereto for such category.
Article 11
[RESERVED]

Article 12
AGENCY PROVISIONS

Section 12.1    Appointment. Each of the Holders and Lenders hereby irrevocably designates and appoints Agent as the administrative agent and collateral agent of such Holder or such Lender (or the Holders or Lenders represented by it) under this Agreement and the other Transaction Documents for the term hereof (and Agent hereby accepts such appointment), and each such Holder and Lender irrevocably authorizes Agent to take such action on its behalf under the provisions of this Agreement and the other Transaction Documents and to exercise such powers and perform such duties as are expressly delegated to the Agent by the terms of this Agreement and the other Transaction Documents, together with such other powers as are
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reasonably incidental thereto. Notwithstanding any provision to the contrary elsewhere in this Agreement or the other Transaction Documents, the Agent shall not have any duties or responsibilities, except those expressly set forth herein and therein, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or the other Transaction Documents or otherwise exist against the Agent. Without limiting the generality of the foregoing, Agent shall have the sole and exclusive right and authority (to the exclusion of the Lenders and Holders), and is hereby authorized, to (a) act as the disbursing and collecting agent for the Lenders and Holders with respect to all payments and collections arising in connection with the Transaction Documents (including in any proceeding described in Sections 10.1(c) or 10.1(d) or any other bankruptcy, insolvency or similar proceeding), and each Person making any payment in connection with any Transaction Document to any Lender or Holder is hereby authorized to make such payment to Agent, (b) file and prove claims and file other documents necessary or desirable to allow the claims of the Agent, Lenders and Holders with respect to any Obligation in any proceeding described in Sections 10.1(c) or 10.1(d) or any other bankruptcy, insolvency or similar proceeding (but not to vote, consent or otherwise act on behalf of such Person), (c) act as collateral agent for itself and each Lender and Holder for purposes of the perfection of all Liens created by such agreements and all other purposes stated therein, (d) manage, supervise and otherwise deal with the Collateral, (e) take such other action as is necessary or desirable to maintain the perfection and priority of the Liens created or purported to be created by the Transaction Documents, (f) except as may be otherwise specified in any Transaction Document, exercise all remedies given to Agent, the Lenders and the Holders with respect to the Credit Parties and/or the Collateral, whether under the Transaction Documents, applicable Requirements or otherwise and (g) execute any amendment, consent or waiver under the Transaction Documents on behalf of any Lender or Holder that has consented in writing to such amendment, consent or waiver; provided, however, that Agent hereby appoints, authorizes and directs each Lender and Holder to act as collateral sub-agent for Agent, the Lenders and the Holders for purposes of the perfection of all Liens with respect to the Collateral, including any deposit account maintained by a Credit Party with, and cash and Cash Equivalent Investments held by, such Lender or Holder, and may further authorize and direct the Lenders and the Holders to take further actions as collateral sub-agents for purposes of enforcing such Liens or otherwise to transfer the Collateral subject thereto to Agent, and each Lender and Holder hereby agrees to take such further actions to the extent, and only to the extent, so authorized and directed. Any reference to the Agent in this Agreement or the other Transaction Documents shall be deemed to refer to the Agent solely in its capacity as Agent and not in its capacity, if any, as a Holder or a Lender. Under the Transaction Documents, Agent (a) is acting solely on behalf of the Agent, Lenders and Holders (except to the limited extent provided in Section 2.9 with respect to the Register), with duties that are entirely administrative in nature, notwithstanding the use of the defined term “Agent”, the terms “agent”, “Agent” and “collateral agent” and similar terms in any Transaction Document to refer to Agent, which terms are used for title purposes only, (b) is not assuming any obligation under any Transaction Document other than as expressly set forth therein or any role as agent, fiduciary or trustee of or for any Lender, Holder or any other Person and (c) shall have no implied functions, responsibilities, duties, obligations or other liabilities under any Transaction Document, and each Lender and Holder, by accepting the benefits of the Transaction Documents, hereby waives and agrees not to assert any
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claim against Agent based on the roles, duties and legal relationships expressly disclaimed in clauses (a) through (c) of this sentence.
Section 12.2    Binding Effect. Each Lender and Holder, by accepting the benefits of the Loan Documents, agrees that (a) any action taken by Agent (or, when expressly required hereby, all the Holders) in accordance with the provisions of the Transaction Documents, (b) any action taken by Agent in reliance upon the instructions of Required Lenders (or, when expressly required hereby, all the Holders) and (c) the exercise by Agent (or, when expressly required hereby, all the Holders) of the powers set forth herein or therein, together with such other powers as are reasonably incidental thereto, shall be authorized and binding upon all of the Lenders and Holders.
Section 12.3    Use of Discretion. Agent shall not be required to exercise any discretion or take, or to omit to take, any action, including with respect to enforcement or collection, except any action it is required to take or omit to take (a) under any Transaction Document or (b) pursuant to instructions from all the Holders, when expressly required hereby. Notwithstanding the foregoing, Agent shall not be required to take, or to omit to take, any action (a) unless, upon demand, Agent receives an indemnification satisfactory to it from the Lenders and/or Holders (or, to the extent applicable and acceptable to Agent, any other Person) against all liabilities that, by reason of such action or omission, may be imposed on, incurred by or asserted against Agent or any of its Related Parties or (b) that is, in the opinion of Agent or its counsel, contrary to any Transaction Document or applicable Requirement. Notwithstanding anything to the contrary contained herein or in any other Transaction Document, the authority to enforce rights and remedies hereunder and under the other Transaction Documents against the Credit Parties or any of them shall be vested exclusively in, and all actions and proceedings at law in connection with such enforcement shall be instituted and maintained exclusively by, Agent in accordance with the Transaction Documents for the benefit of all the Lenders and the Holders; provided, that the foregoing shall not prohibit (a) Agent from exercising on its own behalf the rights and remedies that inure to its benefit (solely in its capacity as Agent) hereunder and under the other Transaction Documents, (b) any Lender or Holder from exercising setoff rights in accordance with Section 13.17(a) or (c) any Lender or Holder from filing proofs of claim or appearing and filing pleadings on its own behalf during the pendency of a proceeding relative to any Credit Party under any bankruptcy or other debtor relief law; and provided, further that if at any time there is no Person acting as Agent hereunder and under the other Transaction Documents, then (A) the Required Lenders shall have the rights otherwise ascribed to Agent pursuant to Article 10 and (B) in addition to the matters set forth in clauses (b) and (c) of the preceding proviso and subject to Section 13.17(a), any Lender or Holder may, with the consent of the Required Lenders, enforce any rights and remedies available to it and as authorized by the Required Lenders.
Section 12.4    Delegation of Duties. The Agent may execute any of its respective duties under this Agreement or the other Transaction Documents by or through agents or attorneys in fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. The Agent shall not be responsible for the negligence or misconduct of any agents or attorneys in fact selected by the Agent with reasonable care.
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Section 12.5    Exculpatory Provisions. Neither the Agent nor any of its Related Parties shall be (a) liable for any action lawfully taken or omitted to be taken by it or such Person under or in connection with this Agreement (except for actions occasioned by its or such Person’s own gross negligence or willful misconduct), or (b) responsible in any manner to any of the Holders or Lenders for any recitals, statements, representations or warranties made by any Guarantor, the Borrower or any of their respective Subsidiaries or any officer thereof contained in this Agreement, the other Transaction Documents or in any certificate, report, statement or other document referred to or provided for in, or received by the Agent under or in connection with, this Agreement or the other Transaction Documents or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Transaction Document or for any failure of any Guarantor, the Borrower or any of their respective Subsidiaries to perform its obligations hereunder or thereunder. The Agent shall not be under any obligation to any Holder or any Lender to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or of any other Transaction Document, or to inspect the properties, books or records of any Guarantor, the Borrower or any of their respective Subsidiaries.
Section 12.6    Reliance by Agent. The Agent shall be entitled to rely, and shall be fully protected in relying, upon any note, writing, resolution, notice, consent, certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype message, statement, order or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons and upon advice and statements of legal counsel (including, without limitation, counsel to the Borrower), independent accountants and other experts selected by the Agent. The Agent may deem and treat the payee of any Note as the owner thereof for all purposes unless the Agent shall have actual notice of any transferee. The Agent shall be fully justified in failing or refusing to take any action under this Agreement and the other Transaction Documents unless it shall first receive such advice or concurrence of the Required Lenders (or, when expressly required hereby, all the Holders) as it deems appropriate, if any, or it shall first be indemnified to its satisfaction by the Holders and Lenders against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action except for its own gross negligence or willful misconduct (each as determined in a final, non-appealable judgment by a court of competent jurisdiction). The Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement and the other Transaction Documents in accordance with a request of the Required Lenders (or, when expressly required hereby, all the Holders), and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Holders and Lenders and all future Holders and Lenders. Without limiting the foregoing, Agent:
(a)shall not be responsible or otherwise incur liability for any action or omission taken in reliance upon the instructions of the Required Lenders or for the actions or omissions of any of its Related Parties selected with reasonable care (other than employees, officers and directors of Agent, when acting on behalf of Agent);
(b)shall not be responsible to any Lender, Holder or other Person for the due execution, legality, validity, enforceability, effectiveness, genuineness, sufficiency or value of, or
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the attachment, perfection or priority of any Lien created or purported to be created under or in connection with, any Transaction Document; and

(c)makes no warranty or representation, and shall not be responsible, to any Lender, Holder or other Person for any statement, document, information, representation or warranty made or furnished by or on behalf of any Credit Party or any Related Party of any Credit Party in connection with any Transaction Document or any transaction contemplated therein or any other document or information with respect to any Credit Party, whether or not transmitted or omitted to be transmitted by Agent, including as to completeness, accuracy, scope or adequacy thereof, or for the scope, nature or results of any due diligence performed by Agent in connection with the Transaction Documents;
and, for each of the items set forth in clauses (a) through (c) above, each Lender, Holder and Credit Party hereby waives and agrees not to assert (and Borrower shall cause each other Credit Party to waive and agree not to assert) any right, claim or cause of action it might have against Agent based thereon.
Section 12.7    Notices of Default. The Agent shall not be deemed to have knowledge or notice of the occurrence of any Event of Default hereunder or under any other Transaction Document unless it has received notice of such Event of Default in accordance with the terms hereof or thereof or notice from a Holder, a Lender or the Borrower referring to this Agreement or the other Transaction Documents describing such Event of Default and stating that such notice is a “notice of default.” In the event that the Agent receives such a notice, it shall promptly give notice thereof to the Holders and Lenders. The Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Event of Default as it shall deem advisable in the best interests of the Holders and Lenders, except to the extent that other provisions of this Agreement or the other Transaction Documents expressly require that any such action be taken or not be taken only with the consent and authorization or upon the request of all the Holders.
Section 12.8    Non Reliance on the Agent and Other Holders. Each of the Holders and Lenders expressly acknowledges that neither the Agent nor any of its respective officers, directors, employees, agents, attorneys in fact, Subsidiaries or Affiliates has made any representations or warranties to it and that no act by the Agent hereinafter taken, including any review of the affairs of Elevate Credit Parent, the Borrower or any of their respective Subsidiaries, shall be deemed to constitute any representation or warranty by the Agent to any Holder or Lender. Each of the Holders and Lenders represents that it has made and will continue to make, independently and without reliance upon the Agent or any other Holder or Lender, and based on such documents and information as it shall deem appropriate at the time, its own credit analysis, appraisals and decisions in taking or not taking action under this Agreement and the other Transaction Documents, and such investigation as it deems necessary to inform itself as to the business, operations, property, financial and other condition and creditworthiness of Elevate Credit Parent, the Borrower and their Subsidiaries. Except for notices, reports and other documents expressly required to be furnished to the Holders and Lenders by the Agent hereunder or under the other Transaction Documents, the Agent shall not have any duty or responsibility to provide any Holder or Lender with any credit or other information concerning the business,
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operations, property, financial and other condition or creditworthiness of Elevate Credit Parent, the Borrower or any of their respective Subsidiaries which may come into the possession of the Agent or any of its respective officers, directors, employees, agents, attorneys in fact, respective Subsidiaries or Affiliates.
Section 12.9    Indemnification. Each of the Holders and Lenders hereby agrees to indemnify the Agent in its capacity as such (to the extent not reimbursed by the Credit Parties and without limiting the obligation of the Credit Parties to do so), ratably according to the respective amounts of their Notes, from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind whatsoever which may at any time (including, without limitation, at any time following the payment of the Notes) be imposed on, incurred by or asserted against the Agent in any way relating to or arising out of this Agreement, the other Transaction Documents, or any documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby or any action taken or omitted by the Agent under or in connection with any of the foregoing; provided that no Holder or Lender shall be liable for the payment of any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements to the extent they result from the Agent’s gross negligence or willful misconduct, as determined by a court of competent jurisdiction in a final non-appealable judgment or order. The agreements in this Section 12.9 shall survive the payment of the Notes and all other amounts payable hereunder and the termination of this Agreement and the other Transaction Documents.
Section 12.10    The Agent in Its Individual Capacity. The Agent and its Subsidiaries and Affiliates may make loans to, accept deposits from and generally engage in any kind of business with the Credit Parties or any of their Subsidiaries as though the Agent were not an Agent hereunder. With respect to any Note issued to it, the Agent shall have the same rights and powers under this Agreement and the other Transaction Documents as any Holder or Lender and may exercise the same as though it were not an Agent, and the terms “Holders” and “Lenders” shall include the Agent in its individual capacity.
Section 12.11    Resignation of the Agent; Successor Agent. The Agent may resign as Agent at any time by giving thirty (30) days advance notice thereof to the Holders and Lenders and the Borrower and, thereafter, the retiring Agent shall be discharged from its duties and obligations hereunder. Upon any such resignation, the Required Lenders shall have the right to appoint a successor Agent. If no successor Agent shall have been so appointed by the Required Lenders, then the Agent may, on behalf of the Holders and Lenders, appoint a successor Agent reasonably acceptable to the Borrower (so long as no Event of Default has occurred and is continuing). Upon the acceptance of any appointment as Agent hereunder by a successor Agent, such successor Agent shall thereupon succeed to and become vested with all rights, powers, privileges and duties of the retiring Agent. After any retiring Agent’s resignation hereunder as Agent, the provisions of this Section 12.11 shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as Agent. If no successor has accepted appointment as Agent by the date which is thirty (30) days following a retiring Agent’s notice of resignation, the retiring Agent’s resignation shall nevertheless thereupon become
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effective and the Required Lenders shall perform all of the duties of the Agent hereunder until such time, if any, as the Required Lenders appoint a successor agent as provided for above.
Section 12.12    Reimbursement by Holders and Lenders. To the extent that the Borrower for any reason fails to indefeasibly pay any amount required under Section 13.1 or Section 13.12 to be paid by it to the Agent (or any sub-agent thereof), or any Related Party of any of the foregoing, each Holder and Lender severally agrees to pay to the Agent (or any such sub agent) or such Related Party, as the case may be, such Holder’s or Lender’s applicable percentage thereof (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount, provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Agent (or any such sub agent) in its capacity as such, or against any Related Party of any of the foregoing acting for the Agent (or any such sub-agent) in connection with such capacity. For the purposes of this Section 12.12, the “applicable percentage” of a Holder or a Lender shall be the percentage of the total aggregate principal amount of the Notes represented by the Notes held by such Holder or Lender at such time.
Section 12.13    Withholding. To the extent required by any Requirement, Agent may withhold from any payment to any Lender or Holder under a Transaction Document an amount equal to any applicable withholding Tax (including withholding Taxes imposed under Chapters 3 and 4 of Subtitle A of the Code). If the IRS or any other Governmental Authority asserts a claim that Agent did not properly withhold tax from amounts paid to or for the account of any Lender or Holder (because the appropriate certification form was not delivered, was not properly executed, or fails to establish an exemption from, or reduction of, withholding tax with respect to a particular type of payment, or because such Lender or Holder failed to notify Agent or any other Person of a change in circumstances which rendered the exemption from, or reduction of, withholding tax ineffective, failed to maintain a Participant Register or for any other reason), or Agent reasonably determines that it was required to withhold taxes from a prior payment but failed to do so, such Lender or Holder shall promptly indemnify Agent fully for all amounts paid, directly or indirectly, by Agent as tax or otherwise, including penalties and interest, and together with all expenses incurred by Agent, including legal expenses, allocated internal costs and out-of-pocket expenses. Agent may offset against any payment to any Lender or Holder under a Transaction Document, any applicable withholding tax that was required to be withheld from any prior payment to such Lender or Holder but which was not so withheld, as well as any other amounts for which Agent is entitled to indemnification from such Lender or Holder under this Section 12.13.
Section 12.14    Release of Collateral or Guarantors. Each Lender and Holder hereby consents to the release and hereby directs Agent to release (or, in the case of clause (b)(ii) below, release or subordinate) the following:
(a)any Subsidiary of the Borrower from its guaranty of any Obligation if all of the Equity Interests of such Subsidiary owned by any Credit Party are sold or transferred in a transaction permitted under the Transaction Documents (including pursuant to a waiver or
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consent), to the extent that, after giving effect to such transaction, such Subsidiary would not be required to guaranty any Obligations; and
(b)any Lien held by Agent for the benefit of the Lenders and Holders against (i) any Collateral that is sold, transferred, conveyed or otherwise disposed of by a Credit Party in a transaction permitted by the Transaction Documents (including pursuant to a valid waiver or consent), to the extent all Liens required to be granted in such Collateral pursuant to this Agreement after giving effect to such transaction have been granted, (ii) any property subject to a Lien permitted hereunder in reliance upon clause (xiii) of the definition of Permitted Liens and (iii) all of the Collateral and all Credit Parties, upon (A) indefeasible payment in full in cash of the Obligations (other than any indemnity obligations of any Credit Party under the Transaction Documents that satisfy all of the following conditions: (X) such indemnity obligations are not then due and payable orand (Y) such indemnity obligations are obligations for which any events or claims that would give rise thereto are not then pending) under the Transaction Documents and termination of the Transaction Documents (including all commitments (if any) to lend hereunder) and (B) to the extent requested by Agent, receipt by Agent and the Lenders and Holders of liability releases from the Credit Parties each in form and substance acceptable to Agent.

Article 13
MISCELLANEOUS

Section 13.1    Payment of Expenses. The Credit Parties shall reimburse the Agent, the Lenders and the Holders on demand for all reasonable costs and expenses, including, without limitation, legal expenses and reasonable attorneys’ fees (whether for internal or outside counsel), incurred by the Agent, the Lenders and the Holders in connection with (i) the investigation, development, preparation, negotiation, syndication, execution, interpretation or administration of, any modification of any term of or termination of, this Agreement and any other Transaction Document, any commitment or proposal letter therefor, any other document prepared in connection therewith or the consummation and administration of any transaction contemplated therein, ongoing fees and expenses of the Borrower, and any other transactions between the Credit Parties and the Agent, the Lenders and the Holders, including, without limitation, UCC and other public record searches and filings, overnight courier or other express or messenger delivery, appraisal costs, surveys, title insurance and environmental audit or review (including due diligence review) costs; (ii) the collection, protection or enforcement of any rights in or to the Collateral; (iii) the collection of any Obligations; (iv) the administration and enforcement of Agent’s, any Lender’s and any Holder’s rights under this Agreement or any other Transaction Document (including, without limitation, any costs and expenses of any third party provider engaged by Agent, the Lenders or the Holders for such purposes, and any costs and expenses incurred in connection with the forbearance of any of the rights and remedies of the Agent, the Lenders and any Holders hereunder); (v) any refinancing or restructuring of the Notes whether in the nature of a “work-out,” in any insolvency or bankruptcy proceeding or otherwise, and whether or not consummated; (vi) the assignment, transfer or syndication of the Notes; and (vii) any liability for any Non-Excluded Taxes, if any, including any interest and penalties, and
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any finder’s or brokerage fees, commissions and expenses (other than any fees, commissions or expenses of finders or brokers engaged by the Agent, the Lenders and/or the Holders), that may be payable in connection with the purchase of the Notes contemplated by this Agreement and the other Transaction Documents. The Credit Parties shall also pay all normal service charges with respect to all accounts maintained by the Credit Parties with the Lenders and/or the Holders and any additional services requested by the Credit Parties from the Lenders and/or the Holders. All such costs, expenses and charges shall constitute Obligations hereunder, shall be payable by the Credit Parties to the applicable Lenders or Holders on demand, and, until paid, shall bear interest at the highest rate then applicable to the Notes hereunder. Without limiting the foregoing, if (a) any Note is placed in the hands of an attorney for collection or enforcement or is collected or enforced through any legal proceeding or any Holder or Lender otherwise takes action to collect amounts due under such Note or to enforce the provisions of this Agreement or such Note or (b) there occurs any bankruptcy, reorganization, receivership of any Credit Party or other proceedings affecting creditors’ rights and involving a claim under this Agreement or such Note, then the Credit Parties shall pay the costs incurred by such Holder or such Lender for such collection, enforcement or action or in connection with such bankruptcy, reorganization, receivership or other proceeding, including, but not limited to, reasonable attorneys’ fees and disbursements (including such fees and disbursements related to seeking relief from any stay, automatic or otherwise, in effect under any Bankruptcy Law).
Section 13.2    Governing Law; Jurisdiction; Jury Trial . This Agreement shall be a contract made under, and governed and enforced in every respect by, the internal laws of the State of New York, without giving effect to its conflicts of law principles other than §5-1401 and 5-1402 of the New York General Obligations Law. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in New York, New York for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTIONS CONTEMPLATED HEREBY.
Section 13.3    Counterparts. This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to each other party; provided that a facsimile or .pdf signature shall be considered due execution and shall be binding
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upon the signatory thereto with the same force and effect as if the signature were an original, not a facsimile or .pdf signature.
Section 13.4    Headings. The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this Agreement.
Section 13.5    Severability. If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of any provision of this Agreement in any other jurisdiction.
Section 13.6    Entire Agreement; Amendments. This Agreement and the other Transaction Documents supersede all other prior oral or written agreements between the Agent, the Holders, the Lenders, the Credit Parties, their Affiliates and Persons acting on their behalf with respect to the matters discussed herein and therein, and this Agreement, the other Transaction Documents and the instruments referenced herein and therein contain the entire understanding of the parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, none of the Credit Parties or the Agent, any Holder or any Lender makes any representation, warranty, covenant or undertaking with respect to such matters. No provision of this Agreement, the Notes or any of the other Transaction Documents may be amended or waived other than by an instrument in writing signed by the Credit Parties and the Agent (provided, that no amendment or waiver hereof shall (a) extend the Maturity Date of any Note (it being agreed that, for purposes of clarification, mandatory redemptions pursuant to Section 2.3(b) may be postponed, delayed, reduced, waived or modified in accordance with Section 2.3(d) or otherwise with the consent of the Agent), (b) decrease the amount or rate of interest (it being agreed that waiver of the Default Rate shall only require the consent of the Agent), premium, principal or other amounts payable hereunder or under any Note or forgive or waive any such payment (it being agreed that mandatory redemptions pursuant to Section 2.3(b) may be postponed, delayed, reduced, waived or modified in accordance with Section 2.3(d) or otherwise with the consent of the Agent), (c) modify this Section 13.6, or (d) disproportionately and adversely affect any Lender or Holder as compared to other Lenders or Holders, in each case, without the consent of all Holders directly affected thereby), and any amendment or waiver to this Agreement made in conformity with the provisions of this Section 13.6 shall be binding on all Lenders and all Holders, as applicable. None of the Credit Parties has, directly or indirectly, made any agreements with the Agent, any Lenders or any Holders relating to the terms or conditions of the transactions contemplated by the Transaction Documents except as set forth in the Transaction Documents. Without limiting the foregoing, each of the Credit Parties confirms that, except as set forth in this Agreement, none of Agent, any Lender or any Holder has made any commitment or promise or has any other obligation to provide any financing to the Credit Parties or otherwise.
Section 13.7    Notices. Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile (provided, confirmation of transmission is mechanically or electronically
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generated and kept on file by the sending party) or e-mail (provided, confirmation of receipt is verified by return email from the receiver or by other written means); or (iii) one Business Day after deposit with an overnight courier service, in each case properly addressed to the party to receive the same. The addresses, facsimile numbers and e-mail addresses for such communications shall be:
If to any of the Guarantors:

c/o Elevate Credit, Inc.
4150 International Plaza, Suite 400300
Fort Worth, Texas 76109
USA
Attention:    Chief Executive Officer
Facsimile:    817-546-2700
E-Mail:    kreesjharvison@elevate.com

with a copy (for informational purposes only) to:

Coblentz Patch Duffy & Bass LLP
One Montgomery Street, Suite 3000
San Francisco, California 94104
USA
Telephone:    (415) 391-4800
Facsimile:    (415) 989-1663
Attention:    Paul J. Tauber, Esq.
E-Mail:    pjt@cpdb.com

If to the Borrower:
    
MaplesFS Limited
PO Box 1093
Boundary Hall, Cricket Square
Grand Cayman, KY1-1102
Cayman Islands
Telephone:    (345) 814-5710
Attention:    Andrew Dean, Senior Vice President
E-mail:     Andrew.Dean@maplesfsmaples.com

If to the Agent:

Victory Park Management, LLC
150 North Riverside Plaza, Suite 5200
Chicago, Illinois 60606
USA
Telephone:     (312) 705-2786
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Facsimile:    (312) 701-0794
Attention:     Scott R. Zemnick, General Counsel
E-mail:        szemnick@vpcadvisors.com
with a copy (for informational purposes only) to:

Katten Muchin Rosenman LLP
525 West Monroe Street
Chicago, Illinois 60661
USA
Telephone:    (312) 902-5297 and (312) 902-5495
Facsimile:    (312) 577-8964 and (312) 577-8854
Attention:    Mark R. Grossmann, Esq. and Scott E. Lyons, Esq.
E-mail:        mg@katten.com and scott.lyons@katten.com

If to a Lender, to its address, facsimile number and e-mail address set forth on the Schedule of Lenders, with copies to such Lender’s representatives as set forth on the Schedule of Lenders,
If to a Holder (that is not also a Lender), to the address, facsimile number and e-mail address as such Holder has specified by written notice given to each other party at the time such Holder has become a Holder hereunder,
or to such other address, facsimile number and/or e-mail address and/or to the attention of such other Person as the recipient party has specified by written notice given to each other party five days prior to the effectiveness of such change. Written confirmation of receipt (A) given by the recipient of such notice, consent, waiver or other communication, (B) mechanically or electronically generated by the sender’s facsimile machine containing the time, date, recipient facsimile number and an image of the first page of such transmission or (C) provided by an overnight courier service shall be rebuttable evidence of personal service, receipt by facsimile or receipt from an overnight courier service in accordance with clauses (i), (ii) or (iii) above, respectively.
Section 13.8    Successors and Assigns; Participants. This Agreement shall be binding upon and inure to the benefit of the parties and their respective permitted successors and assigns, including any purchasers of the Notes. None of the Credit Parties shall assign this Agreement or any rights or obligations hereunder without the prior written consent of Agent, including by way of a Change of Control. Subject to the provisions of Section 2.7, 2.8 and 2.9 hereof, a Lender or Holder may assign some or all of its rights and obligations hereunder in connection with the transfer of any of its Notes to any Person (an “Assignee”), with the prior written consent of the Agent and, so long as no Event of Default exists, the Borrower (which consent of the Borrower shall not be unreasonably withheld, conditioned or delayed and neither of which consents shall be required for an assignment by (i) a Lender to an Assignee that is (A) another Lender or Holder or (B) an Affiliate of such assigning Lender or (ii) a Holder to an Assignee that is (A) another Holder or Lender or (B) an Affiliate of such assigning Holder); provided, however, that the
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Borrower shall be deemed to have consented to any such assignment unless it shall object thereto by written notice to the Agent within ten (10) Business Days after having received notice thereof. Each such permitted Assignee shall be deemed to be the Lender (or, as provided below, a Holder) hereunder with respect to such assigned rights and obligations, and the Credit Parties shall ensure that such transferee is registered as a Holder and that any Liens on the Collateral shall be for the benefit of such Holder (as well as the other Holders of Notes). For purposes of clarification, a Lender may assign all or a portion of such Lender’s outstanding Notes (and its corresponding rights and obligations hereunder in connection therewith) with or without an assignment of all or a portion of such Lender’s portion of the applicable Commitments. Any Assignee of all or a portion of a Lender’s outstanding Notes (and its corresponding rights and obligations hereunder in connection therewith) who shall not have also been assigned all or a portion of such Lender’s Commitment(s) (such assignment, a “Principal Only Assignment”), shall be deemed a “Holder” and not a “Lender” hereunder, and all or such portion of the Notes held by such Lender that shall have been assigned to such Holder pursuant to the Principal Only Assignment shall be evidenced by and entitled to the benefits of this Agreement and, if requested by such Holder, a Note payable to such Holder in an amount equal to the principal amount of outstanding Notes as shall have been assigned to such Holder pursuant to such Principal Only Assignment. For the avoidance of doubt, any Assignee of a Principal Only Assignment shall have no obligation to purchase any Notes. For purposes of determining whether the Borrower has reached the Maximum Commitment hereunder, any principal amount of Notes outstanding with respect to a Principal Only Assignment shall be included in such determination. In connection with any permitted assignment by a Holder of some or all of its rights and obligations hereunder, upon the request of such Holder, the Borrower shall cause to be delivered to the Assignee thereof either (i) a letter from Outside Legal Counsel indicating that it may rely upon the opinion letter delivered by it pursuant to Section 5.1(f)(i) or (ii) an opinion from other legal counsel reasonably acceptable to the Assignee to the effect of such opinion letter, in either case dated on or before the effective date of such assignment. Notwithstanding anything in the Transaction Documents to the contrary, (i) no lender to or funding or financing source of a Lender or its Affiliates shall have any obligation to purchase Notes, (ii) there shall be no limitation or restriction or consent right on a Lender's ability to assign or otherwise transfer any Transaction Document, Note or Obligation to an Affiliate or lender or funding or financing source, and (iii) there shall be no limitation or restriction or consent rights on such Affiliates’ or lenders’ or financing or funding sources’ ability to assign or otherwise transfer any Transaction Document, Note or Obligation (or any of its rights thereunder or interest therein).
In addition to the other rights provided in this Section 13.8, each Lender may, without notice to or consent from Agent or the Borrower, sell participations to one or more Persons in or to all or a portion of its rights and obligations under the Transaction Documents (including all its rights and obligations with respect to the Notes); provided, however, that, whether as a result of any term of any Transaction Document or of such participation, (i) no such participant shall have a commitment, or be deemed to have made an offer to commit, to purchase Notes hereunder, and, except as may otherwise be provided in the operative documentation governing such participation, none shall be liable for any obligation of such Lender hereunder, (ii) such Lender’s rights and obligations, and the rights and obligations of the Credit Parties and the Agent and other Lenders towards such Lender, under any Transaction Document shall remain unchanged
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and each other party hereto shall continue to deal solely with such Lender, which shall remain the holder of the applicable Obligations in the Register, except that each such participant shall be entitled to the benefit of Section 2.6; provided, however, that in no case shall a participant have the right to enforce any of the terms of any Transaction Document, and (iii) except as may otherwise be provided in the operative documentation governing such participation, the consent of such participant shall not be required (either directly, as a restraint on such Lender’s ability to consent hereunder or otherwise) for any amendments, waivers or consents with respect to any Transaction Document or to exercise or refrain from exercising any powers or rights such Lender may have under or in respect of the Transaction Documents (including the right to enforce or direct enforcement of the Obligations). Each Lender that sells a participation 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 Notes or other obligations under the Transaction Documents (the “Participant Register”); provided, that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any participant or any information relating to a participant’s interest in any commitments, loans, letters of credit or its other obligations under any Transaction Document) to any Person other than Agent except to the extent that such disclosure is necessary to establish that such commitment, loan, letter of credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations and Sections 163(f), 871(h)(2) and 881(c)(2) of the Code and any related Treasury regulations promulgated thereunder. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, Agent shall have no responsibility for maintaining a Participant Register.
Section 13.9    No Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.
Section 13.10    Survival. The representations, warranties, agreements and covenants of the Credit Parties and the Lenders contained in the Transaction Documents shall survive the Closing. Each Lender and each Holder shall be responsible only for its own agreements and covenants hereunder.
Section 13.11    Further Assurances. Each Credit Party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as any other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.
Section 13.12    Indemnification. In consideration of the Agent’s and each Lender’s execution and delivery of the Transaction Documents and acquisition of the Notes hereunder and in addition to all of the Credit Parties’ other obligations under the Transaction Documents, subject to 956 Limitations, the Credit Parties shall jointly and severally defend, protect,
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indemnify and hold harmless the Agent, each Lender, each other Holder, each of their respective Affiliates and all of their respective stockholders, equity holders, partners, members, managers, investment managers, officers, directors, employees, principals, advisory board members, and direct or indirect investors and any of the foregoing Persons’ agents or other representatives (including, without limitation, those retained in connection with the transactions contemplated by this Agreement)predecessors, successors, assigns, attorneys (up to an aggregate amount of $250,000 pursuant to this Section 13.12 and Section 13.12 in the Republic Financing Agreement, the CC Financing Agreement and the Other Financing Agreement) and agents (collectively, the “Indemnitees”) from and against any and all actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages, and expenses in connection therewith (irrespective of whether any such Indemnitee is a party to the action for which indemnification hereunder is sought), and including reasonable attorneys’ fees and disbursements (the “Indemnified Liabilities”), incurred by any Indemnitee as a result of, or arising out of, or relating to (a) any misrepresentation or breach of any representation or warranty made by any Credit Party in this Agreement, any other Transaction Documents or any other certificate, instrument or document contemplated hereby or thereby, (b) any breach of any covenant, agreement or obligation of any Credit Party contained in this Agreement, any other Transaction Documents or any other certificate, instrument or document contemplated hereby or thereby, (c) the present or former status of any Credit Party as a U.S. real property holding corporation for federal income tax purposes within the meaning of Section 897 of the Internal Revenue Code of 1986, as amended, if applicable, (d) the Program and the Requirements and transactions otherwise contemplated by or further described in the Transaction Documents, including, without limitation, as a result of any litigation or administrative proceeding before any court or governmental or administrative body presently pending or threatened against any Indemnitee as a result of or arising from the foregoing, (e) the imposition of any Non-Excluded Taxes imposed on amounts payable under the Transaction Documents paid by such Indemnitee and any liabilities arising therefrom or with respect thereto, whether or not such Non-Excluded Taxes were correctly or legally asserted, (f) any improper use or disclosure or unlawful use or disclosure of Customer Information by a Credit Party or (g) any action, cause of action, suit or claim, claim, demand, request for documents and/or information, regulatory review, subpoena, investigation, inquiry, civil investigatory demand, litigation or proceeding brought or made against such Indemnitee by a third party (including for these purposes a derivative action brought on behalf of any Credit Party) and arising out of or resulting from (i) the execution, delivery, performance or enforcement of this Agreement, any other Transaction Documents or any other certificate, instrument or document contemplated hereby or thereby, (ii) any transaction financed or to be financed in whole or in part, directly or indirectly, with the proceeds of the Notes, or (iii) the status of such Lender or Holder as a lender to the Borrower pursuant to the transactions contemplated by the Transaction Documents. To the extent that the foregoing undertakings by the Credit Parties may be unenforceable for any reason, the Credit Parties shall make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law. No Credit Party shall assert, and each waives, any claim against the Indemnitees on any theory of liability for special, indirect, consequential or punitive damages arising out of, in connection with or as a result of, this Agreement of any of the other Transaction Documents or the transactions contemplated hereby or thereby. The agreements in this Section 13.12 shall survive the payment of the Obligations and the termination
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of the Commitments, this Agreement and the other Transaction Documents. For the avoidance of doubt, the obligations and agreements of the Credit Parties under this Section 13.12 shall constitute “Obligations” hereunder and the other Transaction Documents.
Section 13.13    No Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party.
Section 13.14    Waiver. No failure or delay on the part of the Agent, any Holder or any Lender in the exercise of any power, right or privilege hereunder or any of the other Transaction Documents shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege.
Section 13.15    Payment Set Aside. To the extent that any of the Credit Parties makes a payment or payments to the Agent, the Holders or the Lenders hereunder or pursuant to any of the other Transaction Documents or the Agent, the Holders or the Lenders enforce or exercise their rights hereunder or thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to any of the Credit Parties, a trustee, receiver or any other Person under any law (including, without limitation, any bankruptcy law, foreign, state or federal law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred.
Section 13.16    Independent Nature of the Lenders’ and the Holders’ Obligations and Rights. The obligations of each Lender and each Holder under any Transaction Document are several and not joint with the obligations of any other Lender or Holder, and no Lender or Holder shall be responsible in any way for the performance of the obligations of any other Lender or Holder under any Transaction Document. Nothing contained herein or in any other Transaction Document, and no action taken by the Agent, any Lender or Holder pursuant hereto or thereto, shall be deemed to constitute the Agent, the Lenders and/or the Holders as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Agent, the Holders and/or the Lenders are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents and each of the Credit Parties acknowledges that the Agent, the Lenders and the Holders are not acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents. Each Lender and each Holder confirms that it has independently participated in the negotiation of the transactions contemplated hereby with the advice of its own counsel and advisors. Each Lender and each Holder shall be entitled to independently protect and enforce its rights, including, without limitation, the rights arising out of this Agreement or out of any other Transaction Documents, and it shall not be necessary for any other Lender or Holder to be joined as an additional party in any proceeding for such purpose.
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Section 13.17    Set-off; Sharing of Payments.
(a)Each of Agent, each Lender, each Holder and each Affiliate (including each branch office thereof) of any of them is hereby authorized, without notice or demand (each of which is hereby waived by each Credit Party), at any time and from time to time during the continuance of any Event of Default and to the fullest extent permitted by applicable Requirements, to set off and apply any and all deposits (whether general or special, time or demand, provisional or final) at any time held and other Indebtedness, claims or other obligations at any time owing by Agent, such Lender, such Holder or any of their respective Affiliates to or for the credit or the account of the Borrower or any other Credit Party against any Obligation of any Credit Party now or hereafter existing, whether or not any demand was made under any Transaction Document with respect to such Obligation and even though such Obligation may be unmatured. No Lender or Holder shall exercise any such right of setoff without the prior consent of Agent. Each of Agent, each Lender and each Holder agrees promptly to notify the Borrower and Agent after any such setoff and application made by such Lender, Holder or its Affiliates; provided, however, that the failure to give such notice shall not affect the validity of such setoff and application. The rights under this Section 13.7(a) are in addition to any other rights and remedies (including other rights of setoff) that Agent, the Lenders, the Holders or their Affiliates, may have.
(b)If any Lender or Holder, directly or through an Affiliate or branch office thereof, obtains any payment of any Obligation of any Credit Party (whether voluntary, involuntary or through the exercise of any right of setoff or the receipt of any Collateral or “proceeds” (as defined under the applicable UCC) of Collateral) other than pursuant to Sections 2.6 or 13.8 and such payment exceeds the amount such Lender or Holder would have been entitled to receive if all payments had gone to, and been distributed by, Agent in accordance with the provisions of the Transaction Documents, such Lender or Holder shall purchase for cash from other Lenders or Holders such participations in their Obligations as necessary for such Lender or Holder to share such excess payment with such Lenders or Holders to ensure such payment is applied as though it had been received by Agent and applied in accordance with this Agreement (or, if such application would then be at the discretion of the Borrower, applied to repay the Obligations in accordance herewith); provided, however, that (i) if such payment is rescinded or otherwise recovered from such Lender or Holder in whole or in part, such purchase shall be rescinded and the purchase price therefor shall be returned to such Lender or Holder without interest and (ii) such Lender or Holder shall, to the fullest extent permitted by applicable Requirements, be able to exercise all its rights of payment (including the right of setoff) with respect to such participation as fully as if such Lender or Holder were the direct creditor of the applicable Credit Party in the amount of such participation.

Section 13.18    Limited Recourse and Non-Petition.
(a)    The Secured Parties shall have recourse only to the proceeds of the realization of Collateral once the proceeds have been applied in accordance with the terms of the Pledge and Security Agreement (the “Net Proceeds”). If the Net Proceeds are insufficient to discharge all payments which, but for the effect of this clause, would then be due (the “Amounts
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Due”), the obligation of the Company shall be limited to the amounts available from the Net Proceeds and no debt shall be owed to the Secured Parties by the Company for any further sum. The Secured Parties shall not take any action or commence any proceedings against the Company to recover any amounts due and payable by the Company under this Agreement except as expressly permitted by the provisions of this Agreement. The Secured Parties shall not take any action or commence any proceedings or petition a court for the liquidation of the Company, nor enter into any arrangement, reorganization or insolvency proceedings in relation to the Company whether under the laws of the Cayman Islands or other applicable bankruptcy laws until after the later to occur of the payment of all of the Amounts Due or the application of all of the Net Proceeds.
(b)    The Secured Parties hereby acknowledge and agree that the Company’s obligations under the Transaction Documents are solely the corporate obligations of the Company, and that the Secured Parties shall not have any recourse against any of the directors, officers or employees of the Company for any claims, losses, damages, liabilities, indemnities or other obligations whatsoever in connection with any transactions contemplated by the Transaction Documents.
Section 13.19    Creditor Debtor Relationship. The relationship between Agent, each Lender and each Holder, on the one hand, and the Credit Parties, on the other hand, is solely that of creditor and debtor. None of the Agent, any Lender or any Holder has any advisory or fiduciary relationship or duty to any Credit Party or to any Credit Party’s business associates arising out of or in connection with, and there is no agency, tenancy or joint venture relationship between the Agent, any Lender or any Holder and the Credit Parties by virtue of, any Transaction Document or any transaction contemplated therein. Nothing contained herein or in any other Transaction Document, and no action taken by the Agent, any Lender or any Holder pursuant hereto or thereto, shall be deemed to constitute the Agent, the Lenders and/or the Holders as a partnership, an association, a joint venture or any other kind of entity with any of the Credit Parties, or create a presumption that the Agent, the Holders and/or the Lenders are in any way acting in concert or as a group with any of the Credit Parties with respect to the transactions contemplated by the Transaction Documents. None of the Agent, any Lender or any Holder has been involved in the structuring, negotiation or implementation of the business of the Credit Parties or given any advice to the Credit Parties or any of the Credit Party’s business associates with respect to the Credit Parties structuring, negotiating, implementing and operating their respective businesses, and the Credit Parties have relied solely on the advice of their own counsel in structuring, negotiating, implementing and operating their respective businesses. Without characterizing the relationship between Agent, each Lender and each Holder, on the one hand, and the Credit Parties, on the other hand, as anything other than that of creditor and debtor, in the event the nature of such relationship between Agent, each Lender and each Holder, on the one hand, and the Credit Parties, on the other hand, shall ever be challenged and recharacterized as an equity, ownership, advisory or any other type of relationship, it is agreed and understood that the Agent, each Lender and each Holder shall solely be considered a passive investor with respect to the Credit Parties.
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[Signature Pages Follow]

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IN WITNESS WHEREOF, each party has caused its signature page to this Financing Agreement to be duly executed as of the date first written above.
BORROWER:

EF SPV, LTD., an exempted company incorporated with limited liability under the laws of the Cayman Islands, as a Borrower



By: ______________________________
Name:
Title:



Financing Agreement
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IN WITNESS WHEREOF, each party has caused its signature page to this Financing Agreement to be duly executed as of the date first written above.

GUARANTORS:

ELEVATE CREDIT, INC., a Delaware corporation



By: ______________________________
Name: Jason Harvison
Title: Chief Executive Officer

Financing Agreement
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IN WITNESS WHEREOF, each party has caused its signature page to this Financing Agreement to be duly executed as of the date first written above.

GUARANTORS (CONT.), EACH AS AN “ELEVATE CREDIT SUBSIDIARY”:

ELASTIC FINANCIAL, LLC
ELEVATE DECISION SCIENCES, LLC
RISE CREDIT, LLC
FINANCIAL EDUCATION, LLC
ELEVATE CREDIT SERVICE, LLC
RISE SPV, LLC
EF FINANCIAL, LLC

By: Elevate Credit, Inc., as Sole Member of each of the above-named entities


By: ______________________________
Name: Kenneth E. ReesJason Harvison
Title:     President

RISE CREDIT SERVICE OF OHIO, LLC
RISE CREDIT SERVICE OF TEXAS, LLC

By: RISE Credit, LLC, as Sole Member of each of the above-named entities
By: Elevate Credit, Inc., as its Sole Member


By: ______________________________
Name:     Kenneth E. ReesJason Harvison
Title:     President



Financing Agreement
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IN WITNESS WHEREOF, the parties hereto have caused this Financing Agreement to be duly executed on the day and year first above written.

RISE FINANCIAL, LLC
RISE CREDIT OF ALABAMA, LLC
RISE CREDIT OF ARIZONA, LLC
RISE CREDIT OF CALIFORNIA, LLC
RISE CREDIT OF COLORADO, LLC
RISE CREDIT OF DELAWARE, LLC
RISE CREDIT OF FLORIDA, LLC
RISE CREDIT OF GEORGIA, LLC
RISE CREDIT OF IDAHO, LLC
RISE CREDIT OF ILLINOIS, LLC
RISE CREDIT OF KANSAS, LLC
RISE CREDIT OF LOUISIANA, LLC
RISE CREDIT OF MISSISSIPPI, LLC
RISE CREDIT OF MISSOURI, LLC
RISE CREDIT OF NEBRASKA, LLC
RISE CREDIT OF NEVADA, LLC
RISE CREDIT OF NORTH DAKOTA, LLC
RISE CREDIT OF OKLAHOMA, LLC
RISE CREDIT OF SOUTH CAROLINA, LLC
RISE CREDIT OF SOUTH DAKOTA, LLC
RISE CREDIT OF TEXAS, LLC
RISE CREDIT OF TENNESSEE, LLC
RISE CREDIT OF UTAH, LLC
RISE CREDIT OF VIRGINIA, LLC
By: RISE SPV, LLC, as Sole Member of each of the above-named entities
By: Elevate Credit, Inc., as its Sole Member



By: ______________________________
Name: Kenneth E. ReesJason Harvison
Title:     President


Financing Agreement
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IN WITNESS WHEREOF, the parties hereto have caused this Financing Agreement to be duly executed on the day and year first above written.
ELASTIC LOUISVILLE, LLC
ELEVATE ADMIN, LLC
ELASTIC MARKETING, LLC
By: Elastic Financial, LLC, as Sole Member of each of the above-named entities
By: Elevate Credit, Inc., as its Sole Member

By: ______________________________
Name:     Kenneth E. ReesJason Harvison
Title:     President


Financing Agreement
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IN WITNESS WHEREOF, each party has caused its signature page to this Financing Agreement to be duly executed as of the date first written above.

AGENT:

VICTORY PARK MANAGEMENT, LLC


By: ______________________________
Name:     Scott R. Zemnick
Title:     Authorized Signatory

LENDER:

VPC INVESTOR FUND B, LLC

By:     VPC Investor Fund GP B, L.P.
Its:     Managing Member

By:     VPC Investor Fund UGP B, LLC
Its:     General Partner


By: ______________________________
Name:    Scott R. Zemnick
Title:    General Counsel

VPC SPECIAL OPPORTUNITIES FUND III ONSHORE, L.P.

By: VPC Special Opportunities Fund III GP, L.P.
Its: General Partner

By: VPC Special Opportunities III UGP, LLC
Its: General Partner

By: ______________________________
Name: Scott R. Zemnick
Title: General Counsel

[SIGNATURE PAGES CONTINUE]



Signature Page to Financing Agreement
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LENDERS (CON’T.):

VPC ONSHORE SPECIALTY FINANCE FUND II, L.P.

By:     VPC Specialty Finance Fund GP II, L.P.
Its:     General Partner

By:     VPC Specialty Finance Fund UGP II, LLC
Its:     General Partner


By: ______________________________
Name:    Scott R. Zemnick
Title:    General Counsel

VPC INVESTOR FUND B II, LLC

By:     VPC Investor Fund GP B II, L.P.
Its:     Managing Member

By:     VPC Investor Fund UGP B II, LLC
Its:     General Partner

    
By: ______________________________
Name:    Scott R. Zemnick
Title: General Counsel

VPC INVESTOR FUND C, L.P.

By:     VPC Investor Fund GP C, L.P.
Its:     General Partner

By:     VPC Investor Fund UGP C, LLC
Its:     General Partner


By: ______________________________
Name:    Scott R. Zemnick
Title:    General Counsel

Signature Page to Financing Agreement
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[SIGNATURE PAGES CONTINUE]



LENDERS (CON’T.):

VPC INVESTOR FUND G-1, L.P.

By:     VPC Investor Fund GP G, L.P.
Its:     General Partner

By:     VPC Investor Fund UGP G, LLC
Its:     General Partner

By: ______________________________
Name:    Scott R. Zemnick
Title:    General Counsel



VPC SPECIALTY LENDING FUND (NE), LTD.

By:     Victory Park Capital Advisors, LLC
Its:     Investment Manager (pursuant to powers of attorney granted in the Investment Management Agreement)

By: ______________________________
Name:    Scott R. Zemnick
Title:    General Counsel



Signature Page to Financing Agreement
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VPC SPECIALTY LENDING INVESTMENTS INTERMEDIATE, L.P.

By:    VPC Specialty Lending Investments Intermediate GP, LLC
Its:    General Partner

By:     Victory Park Management, LLC
Its:    Manager

By: ______________________________
Name:    Scott R. Zemnick
Title:    Manager



VPC OFFSHORE UNLEVERAGED PRIVATE DEBT FUND, L.P.

By:     VPC Private Debt Fund GP, L.P.
Its:     General Partner

By:     VPC UGP, LLC
Its:     General Partner

By: ______________________________
Name:    Scott R. Zemnick
Title:    General Counsel





Signature Page to Financing Agreement
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SCHEDULE OF LENDERS
(1) (2) (3) (4) (5)
Lender Address and Facsimile Number Commitment to Purchase Notes: Commitment to Purchase Closing Notes at Closing: Legal Representative’s Address and Facsimile Number
VPC INVESTOR FUND B, LLC 150 North Riverside Plaza, Suite 5200
Suite 3900
Chicago, IL 60606
Telephone: 312.705.2786
Facsimile: 312.701.0794
Attention: Scott R. Zemnick
E-mail: szemnick@vpcadvisors.com 		$13,111,806.17 $13,111,806.17
Katten Muchin Rosenman LLP
525 West Monroe Street
Chicago, IL 60661
Telephone:    (312) 902-5297
    (312) 902-5495
Facsimile:    (312) 577-8964
    (312) 577-8854
Attention:    Mark R. Grossmann
    Scott E. Lyons
E-mail:    mg@katten.com
    scott.lyons@kattenlawkatten.com
VPC Special Opportunities Fund III Onshore, L.P. 150 North Riverside Plaza, Suite 5200
Suite 3900
Chicago, IL 60606
Telephone: 312.705.2786
Facsimile: 312.701.0794
Attention: Scott R. Zemnick
E-mail: szemnick@vpcadvisors.com 		$78,879.92 $78,879.92
Katten Muchin Rosenman LLP
525 West Monroe Street
Chicago, IL 60661
Telephone:    (312) 902-5297
    (312) 902-5495
Facsimile:    (312) 577-8964
    (312) 577-8854
Attention:    Mark R. Grossmann
    Scott E. Lyons
E-mail:    mg@katten.com
    scott.lyons@kattenlawkatten.com
Schedule - 1
US_142974558

VPC ONSHORE SPECIALTY FINANCE FUND II, L.P. 150 North Riverside Plaza, Suite 5200
Suite 3900
Chicago, IL 60606
Telephone: 312.705.2786
Facsimile: 312.701.0794
Attention: Scott R. Zemnick
E-mail: szemnick@vpcadvisors.com 		$105,430,359.48 $8,430,359.48
Katten Muchin Rosenman LLP
525 West Monroe Street
Chicago, IL 60661
Telephone:    (312) 902-5297
    (312) 902-5495
Facsimile:    (312) 577-8964
    (312) 577-8854
Attention:    Mark R. Grossmann
    Scott E. Lyons
E-mail:    mg@katten.com
    scott.lyons@kattenlawkatten.com
VPC Investor Fund B II, LLC 150 North Riverside Plaza, Suite 5200
Suite 3900
Chicago, IL 60606
Telephone: 312.705.2786
Facsimile: 312.701.0794
Attention: Scott R. Zemnick
E-mail: szemnick@vpcadvisors.com 		$10,000,000.00 $10,000,000.00
Katten Muchin Rosenman LLP
525 West Monroe Street
Chicago, IL 60661
Telephone:    (312) 902-5297
    (312) 902-5495
Facsimile:    (312) 577-8964
    (312) 577-8854
Attention:    Mark R. Grossmann
    Scott E. Lyons
E-mail:    mg@katten.com
    scott.lyons@kattenlawkatten.com
VPC INVESTOR FUND C, L.P. 150 North Riverside Plaza, Suite 5200
Suite 3900
Chicago, IL 60606
Telephone: 312.705.2786
Facsimile: 312.701.0794
Attention: Scott R. Zemnick
E-mail: szemnick@vpcadvisors.com 		$5,338,649.76 $5,338,649.76
Katten Muchin Rosenman LLP
525 West Monroe Street
Chicago, IL 60661
Telephone:    (312) 902-5297
    (312) 902-5495
Facsimile:    (312) 577-8964
    (312) 577-8854
Attention:    Mark R. Grossmann
    Scott E. Lyons
E-mail:    mg@katten.com
    scott.lyons@kattenlawkatten.com
Schedule - 2
US_142974558

VPC INVESTOR FUND G-1, L.P. 150 North Riverside Plaza, Suite 5200
Suite 3900
Chicago, IL 60606
Telephone: 312.705.2786
Facsimile: 312.701.0794
Attention: Scott R. Zemnick
E-mail: szemnick@vpcadvisors.com 		$1,123,484.43 $1,123,484.43
Katten Muchin Rosenman LLP
525 West Monroe Street
Chicago, IL 60661
Telephone:    (312) 902-5297
    (312) 902-5495
Facsimile:    (312) 577-8964
    (312) 577-8854
Attention:    Mark R. Grossmann
    Scott E. Lyons
E-mail:    mg@katten.com
    scott.lyons@kattenlawkatten.com
VPC SPECIALTY LENDING FUND (NE), LTD. 150 North Riverside Plaza, Suite 5200
Suite 3900
Chicago, IL 60606
Telephone: 312.705.2786
Facsimile: 312.701.0794
Attention: Scott R. Zemnick
E-mail: szemnick@vpcadvisors.com 		$637,533.46 $637,533.46
Katten Muchin Rosenman LLP
525 West Monroe Street
Chicago, IL 60661
Telephone:    (312) 902-5297
    (312) 902-5495
Facsimile:    (312) 577-8964
    (312) 577-8854
Attention:    Mark R. Grossmann
    Scott E. Lyons
E-mail:    mg@katten.com
    scott.lyons@kattenlawkatten.com
VPC Specialty Lending Investments Intermediate, L.P. 150 North Riverside Plaza, Suite 5200
Suite 3900
Chicago, IL 60606
Telephone: 312.705.2786
Facsimile: 312.701.0794
Attention: Scott R. Zemnick
E-mail: szemnick@vpcadvisors.com 		$14,154,789.56 $14,154,789.56
Katten Muchin Rosenman LLP
525 West Monroe Street
Chicago, IL 60661
Telephone:    (312) 902-5297
    (312) 902-5495
Facsimile:    (312) 577-8964
    (312) 577-8854
Attention:    Mark R. Grossmann
    Scott E. Lyons
E-mail:    mg@katten.com
    scott.lyons@kattenlawkatten.com
Schedule - 3
US_142974558

VPC Offshore Unleveraged Private Debt Fund, L.P. 150 North Riverside Plaza, Suite 5200
Suite 3900
Chicago, IL 60606
Telephone: 312.705.2786
Facsimile: 312.701.0794
Attention: Scott R. Zemnick
E-mail: szemnick@vpcadvisors.com 		$124,497.22 $124,497.22
Katten Muchin Rosenman LLP
525 West Monroe Street
Chicago, IL 60661
Telephone:    (312) 902-5297
    (312) 902-5495
Facsimile:    (312) 577-8964
    (312) 577-8854
Attention:    Mark R. Grossmann
    Scott E. Lyons
E-mail:    mg@katten.com
    scott.lyons@kattenlawkatten.com


Schedule - 4
US_142974558
EXECUTION VERSION
FIRST AMENDMENT TO FINANCING AGREEMENT
This FIRST AMENDMENT TO FINANCING AGREEMENT (this “Amendment”) is made and entered into as of July 31, 2020 by and among Elastic SPV, Ltd., an exempted company incorporated with limited liability under the laws of the Cayman Islands (the “Borrower”), Elevate Credit, Inc., a Delaware corporation (“Elevate Credit”), as a Guarantor, the other Guarantors party hereto (such Guarantors, collectively with Elevate Credit and the Borrower, the “Credit Parties”) and Victory Park Management, LLC, as administrative agent and collateral agent for the Lenders and the Holders (in such capacity, the “Agent”). Capitalized terms used and not otherwise defined herein shall have the respective meanings ascribed to them in the Financing Agreement or if not defined therein, in the Security Agreement.
WHEREAS, the Guarantors, Elevate Credit, the Borrower, the Lenders and the Agent are parties to that certain Amended and Restated Financing Agreement dated as of February 7, 2019 (as amended, restated, supplemented or otherwise modified from time to time, the “Financing Agreement”); and
WHEREAS, the Credit Parties and the Agent desire to amend certain provisions of the Financing Agreement on the terms set forth herein.
NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt, adequacy and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
1.Amendments to Financing Agreement. Effective as of the date hereof, the Financing Agreement is hereby amended as set forth in Exhibit A hereto, with text marked in underline indicating additions and text marked in strikethrough indicating deletions thereto.
2.Conditions Precedent. This Amendment shall become effective upon the satisfaction in full of each of the following conditions:
(a)the Borrower shall have executed and delivered, or caused to be delivered, to the Agent evidence satisfactory to the Agent that the Borrower shall pay to the Agent on the date hereof all fees and other amounts due and owing thereon under this Amendment and the other Transaction Documents;
(b)the representations and warranties of the Credit Parties contained herein and in the Financing Agreement shall be true and correct except to the extent such representations and warranties expressly relate to an earlier date, in which case such representations and warranties shall be true and correct as of such earlier date; and
(c)no Event of Default shall have occurred and be continuing or would result from the transaction contemplated hereby.
3.General Release. In consideration of the Agent’s agreements contained in this Amendment, each Credit Party hereby irrevocably releases and forever discharge the Lenders, the Holders and the Agent and their affiliates, subsidiaries, successors, assigns, directors,
US_143055304v5

officers, employees, agents, consultants, attorneys, managers, investment managers, principles and portfolio companies (each, a “Released Person”) of and from any and all claims, suits, actions, investigations, proceedings or demands, whether based in contract, tort, implied or express warranty, strict liability, criminal or civil statute or common law of any kind or character, known or unknown, which such Credit Party ever had or now has against Agent, any Lender, any Holder or any other Released Person which relates, directly or indirectly, to any acts or omissions of Agent, any Lender, any Holder or any other Released Person relating to the Financing Agreement or any other Transaction Document on or prior to the date hereof.
4.Representations and Warranties of the Credit Parties. To induce the Agent to execute and deliver this Amendment, each Credit Party represents, warrants and covenants that:
(a)The execution, delivery and performance by each Credit Party of this Amendment and all documents and instruments delivered in connection herewith have been duly authorized by all necessary action required on its part, and this Amendment and all documents and instruments delivered in connection herewith are legal, valid and binding obligations of such Credit Party enforceable against such Credit Party in accordance with its terms except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies.
(b)Each of the representations and warranties set forth in the Transaction Documents is true and correct on and as of the date hereof as if made on the date hereof, except to the extent such representations and warranties expressly relate to an earlier date, in which case such representations and warranties shall be true and correct as of such earlier date, and each of the agreements and covenants in the Transaction Documents is hereby reaffirmed with the same force and effect as if each were separately stated herein and made as of the date hereof.
(c)Neither the execution, delivery and performance of this Amendment nor the consummation of the transactions contemplated hereby or thereby does or shall (i) result in a violation of any Credit Party’s certificate of incorporation, certificate of formation, bylaws, limited liability company agreement or other governing documents, or the terms of any Capital Stock or other Equity Interests of any Credit Party; (ii) conflict with, or constitute a breach or default (or an event which, with notice or lapse of time or both, would become a breach or default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which any Credit Party is a party; (iii) result in any “price reset” or other material change in or other modification to the terms of any Indebtedness, Equity Interests or other securities of any Credit Party; or (iv) result in a violation of any law, rule, regulation, order, judgment or decree.
(d)No Event of Default has occurred or is continuing under this Amendment or any other Transaction Document.
    2


5.Ratification of Liability. Each Credit Party, as debtor, grantor, pledgor, guarantor, assignor, or in other similar capacity in which such party grants liens or security interests in its properties or otherwise acts as an accommodation party or guarantor, as the case may be, under the Transaction Documents, hereby ratifies and reaffirms all of its payment and performance obligations and obligations to indemnify, contingent or otherwise, under each Transaction Document to which such party is a party, and each such party hereby ratifies and reaffirms its grant of liens on or security interests in its properties pursuant to such Transaction Documents to which it is a party as security for the obligations under or with respect to the Financing Agreement, the Notes and the other Transaction Documents, and confirms and agrees that such liens and security interests hereafter secure all of the obligations under the Transaction Documents, including, without limitation, all additional obligations hereafter arising or incurred pursuant to or in connection with this Amendment or any Transaction Document. Each Credit Party further agrees and reaffirms that the Transaction Documents to which it is a party now apply to all obligations as modified hereby (including, without limitation, all additional obligations hereafter arising or incurred pursuant to or in connection with this Amendment or any Transaction Document). Each such party (a) further acknowledges receipt of a copy of this Amendment and all other agreements, documents, and instruments executed or delivered in connection herewith, (b) consents to the terms and conditions of same, and (c) agrees and acknowledges that each of the Transaction Documents, as modified hereby, remains in full force and effect and is hereby ratified and confirmed. Except as expressly provided herein, the execution of this Amendment shall not operate as a waiver of any right, power or remedy of any Lender, any Holder or the Agent, nor constitute a waiver of any provision of any of the Transaction Documents nor constitute a novation of any of the obligations under the Transaction Documents.
6.Reference to and Effect Upon the Transaction Documents.
(a)Except as specifically amended hereby, all terms, conditions, covenants, representations and warranties contained in the Transaction Documents, and all rights of the Lenders, the Holders and the Agent and all of the obligations under the Transaction Documents, shall remain in full force and effect, including, but not limited to, the right of first refusal in favor of Agent and its designees set forth in Section 8.19 of the Financing Agreement. Each Credit Party hereby confirms that the Transaction Documents are in full force and effect, and that no Credit Party has any right of setoff, recoupment or other offset or any defense, claim or counterclaim with respect to any Transaction Document or the Credit Parties’ obligations thereunder.
(b)Except as expressly set forth herein, the execution, delivery and effectiveness of this Amendment and any consents or waivers set forth herein shall not directly or indirectly: (i) create any obligation to make any further loans or to defer any enforcement action after the occurrence of any Event of Default; (ii) constitute a consent or waiver of any past, present or future violations of any Transaction Document; (iii) amend, modify or operate as a waiver of any provision of any Transaction Document or any right, power or remedy of any Lender, any Holder or the Agent or (iv) constitute a course of dealing or other basis for altering any obligations under the Transaction
    3


Documents or any other contract or instrument. Except as expressly set forth herein, each Lender, each Holder and the Agent reserve all of their rights, powers, and remedies under the Transaction Documents and applicable law. All of the provisions of the Transaction Documents, including, without limitation, the time of the essence provisions, are hereby reiterated, and if ever waived previously, are hereby reinstated.
(c)From and after the date hereof, (i) the term “Agreement” in the Financing Agreement, and all references to the Financing Agreement in any Transaction Document shall mean the Financing Agreement, as amended by this Amendment and (ii) the term “Transaction Documents” defined in the Financing Agreement shall include, without limitation, this Amendment and any agreements, instruments and other documents executed or delivered in connection herewith.
7.Costs and Expenses. In addition to, and not in lieu of, the terms of the Transaction Documents relating to the reimbursement of the Lenders’, the Holders’ and the Agent’s fees and expenses, the Credit Parties shall reimburse each Lender, each Holder and the Agent, as the case may be, promptly on demand for all fees, costs, charges and expenses, including the fees, costs and expenses of counsel and other expenses incurred in connection with this Amendment.
8.Governing Law; Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Amendment shall be governed by the internal laws of the State of New York, without giving effect to its conflicts of law principles other than §5-1401 and 5-1402 of the New York General Obligations Law. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in New York, New York for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Amendment and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AMENDMENT OR ANY TRANSACTIONS CONTEMPLATED HEREBY.
9.No Strict Construction. The language used in this Amendment will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party.
    4



10.Counterparts. This Amendment may be executed in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. Signatures of the parties hereto transmitted by facsimile or by electronic media or similar means shall be deemed to be their original signature for all purposes.
11.Severability. The invalidity, illegality, or unenforceability of any provision in or obligation under this Amendment in any jurisdiction shall not affect or impair the validity, legality, or enforceability of the remaining provisions or obligations under this Amendment or of such provision or obligation in any other jurisdiction. If feasible, any such offending provision shall be deemed modified to be within the limits of enforceability or validity; provided that if the offending provision cannot be so modified, it shall be stricken and all other provisions of this Amendment in all other respects shall remain valid and enforceable.
12.Further Assurances. The parties hereto shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as any other party may reasonably request in order to carry out the intent and accomplish the purposes of this Amendment and the consummation of the transactions contemplated hereby.
13.Headings. The headings of this Amendment are for convenience of reference and shall not form part of, or affect the interpretation of, this Amendment.
14.Limited Recourse and Non-Petition.
(a)    The Secured Parties shall have recourse only to the proceeds of the realization of Collateral once the proceeds have been applied in accordance with the terms of the Security Agreement (the "Net Proceeds"). If the Net Proceeds are insufficient to discharge all payments which, but for the effect of this clause, would then be due (the "Amounts Due"), the obligation of the Borrower shall be limited to the amounts available from the Net Proceeds and no debt shall be owed to the Secured Parties by the Borrower for any further sum. The Secured Parties shall not take any action or commence any proceedings against the Borrower to recover any amounts due and payable by the Borrower under the Financing Agreement except as expressly permitted by the provisions of the Financing Agreement. The Secured Parties shall not take any action or commence any proceedings or petition a court for the liquidation of the Borrower, nor enter into any arrangement, reorganization or insolvency proceedings in relation to the Borrower whether under the laws of the Cayman Islands or other applicable bankruptcy laws until after the later to occur of the payment of all of the Amounts Due or the application of all of the Net Proceeds.
    5



(b)    The Secured Parties hereby acknowledge and agree that the Borrower’s obligations under the Transaction Documents are solely the corporate obligations of the Borrower, and that the Secured Parties shall not have any recourse against any of the directors, officers or employees of the Borrower for any claims, losses, damages, liabilities, indemnities or other obligations whatsoever in connection with any transactions contemplated by the Transaction Documents.
[Remainder of Page Intentionally Left Blank; Signature Pages Follows]


    6


IN WITNESS WHEREOF, each party has caused its signature page to this Amendment to be duly executed as of the date first written above.

BORROWER:

ELASTIC SPV, LTD., an exempted company incorporated with limited liability under the laws of the Cayman Islands, as Borrower



By:     /s/ Andrew Dean    
Name:     Andrew Dean
Title:     Director


GUARANTORS:

ELEVATE CREDIT, INC., a Delaware corporation

By:     /s/ Jason Harvison    
Name: Jason Harvison
Title: Chief Executive Officer

[SIGNATURE PAGES CONTINUE]







    [Signature Page to First Amendment to Financing Agreement (Elastic)]



GUARANTORS (CONT.), EACH AS AN “ELEVATE CREDIT SUBSIDIARY”:

ELASTIC FINANCIAL, LLC
ELEVATE DECISION SCIENCES, LLC
RISE CREDIT, LLC
FINANCIAL EDUCATION, LLC
ELEVATE CREDIT SERVICE, LLC
RISE SPV, LLC
EF FINANCIAL, LLC
TODAY CARD, LLC
EC FINANCIAL, LLC
ELEVATE COLLECTIONS, LLC

By: Elevate Credit, Inc., as Sole Member of each of the above-named entities


By:     /s/ Jason Harvison    
Name: Jason Harvison
Title:     President

RISE Credit Service of Ohio, LLC
RISE Credit Service of Texas, LLC

    By: RISE Credit, LLC, as Sole Member of each of the above-named entities
By: Elevate Credit, Inc., as its Sole Member


By:     /s/ Jason Harvison    
Name: Jason Harvison
Title:     President

[SIGNATURE PAGES CONTINUE]



    [Signature Page to First Amendment to Financing Agreement (Elastic)]

Rise Financial, LLC
RISE Credit of Alabama, LLC
RISE Credit of Arizona, LLC
RISE Credit of California, LLC
RISE Credit of Colorado, LLC
RISE Credit of Delaware, LLC
RISE Credit of Florida, LLC
RISE Credit of Georgia, LLC
RISE Credit of Idaho, LLC
RISE Credit of Illinois, LLC
RISE Credit of Kansas, LLC
RISE Credit of Louisiana, LLC
RISE Credit of Mississippi, LLC
RISE Credit of Missouri, LLC
RISE Credit of Nebraska, LLC
RISE Credit of Nevada, LLC
RISE Credit of North Dakota, LLC
RISE Credit of Oklahoma, LLC
RISE Credit of South Carolina, LLC
RISE Credit of South Dakota, LLC
RISE Credit of Texas, LLC
RISE Credit of Tennessee, LLC
RISE Credit of Utah, LLC
RISE Credit of Virginia, LLC
By: RISE SPV, LLC, as Sole Member of each of the above-named entities

By: Elevate Credit, Inc., as its Sole Member


By:     /s/ Jason Harvison    
Name: Jason Harvison
Title: President

[SIGNATURE PAGES CONTINUE]


    [Signature Page to First Amendment to Financing Agreement (Elastic)]

ELASTIC LOUISVILLE, LLC
ELEVATE ADMIN, LLC
ELASTIC MARKETING, LLC
By: Elastic Financial, LLC, as Sole Member of each of the above-named entities
By: Elevate Credit, Inc., as its Sole Member

By:     /s/ Jason Harvison    
Name:     Jason Harvison
Title:     President

EF MARKETING, LLC

By: EF Financial, LLC, as Sole Member of the above-named entity
By: Elevate Credit, Inc., as its Sole Member

By:     /s/ Jason Harvison    
Name:    Jason Harvison
Title:    President

EC MARKETING, LLC

By: EC Financial, LLC, as its Sole Member
By: Elevate Credit, Inc., as its Sole Member

By:     /s/ Jason Harvison    
Name:     Jason Harvison
Title:     Chief Executive Officer

TODAY MARKETING, LLC
TODAY SPV, LLC

By: Today Card, LLC, as Sole Member of each of the above-named entities
By: Elevate Credit, Inc., as its Sole Member

By:     /s/ Jason Harvison    
Name:    Jason Harvison
Title:     President
[SIGNATURE PAGES CONTINUE]
    [Signature Page to First Amendment to Financing Agreement (Elastic)]

AGENT:

VICTORY PARK MANAGEMENT, LLC

By:     /s/ Scott R. Zemnick    
Name:     Scott R. Zemnick
Title:     Authorized Signatory

LENDERS:

VPC INVESTOR FUND B, LLC

By:     VPC Investor Fund GP B, L.P.
Its:     Managing Member

By:     VPC Investor Fund UGP B, LLC
Its:     General Partner


By:     /s/ Scott R. Zemnick    
Name:    Scott R. Zemnick
Title:    General Counsel

VPC SPECIAL OPPORTUNITIES FUND III ONSHORE, L.P.

By:     VPC Special Opportunities Fund III GP, L.P.
Its:       General Partner

By:      VPC Special Opportunities III UGP, LLC
Its:       General Partner

By:     /s/ Scott R. Zemnick    
Name:    Scott R. Zemnick
Title:    General Counsel


[SIGNATURE PAGES CONTINUE]



    [Signature Page to First Amendment to Financing Agreement (Elastic)]

LENDERS (CON’T.):

VPC ONSHORE SPECIALTY FINANCE FUND II, L.P.

By:     VPC Specialty Finance Fund GP II, L.P.
Its:     General Partner

By:     VPC Specialty Finance Fund UGP II, LLC
Its:     General Partner


By:     /s/ Scott R. Zemnick    
Name:    Scott R. Zemnick
Title:    General Counsel

VPC INVESTOR FUND B II, LLC

By:     VPC Investor Fund GP B II, L.P.
Its:     Managing Member

By:     VPC Investor Fund UGP B II, LLC
Its:     General Partner


By:     /s/ Scott R. Zemnick    
Name:    Scott R. Zemnick
Title: General Counsel

VPC INVESTOR FUND C, L.P.

By:     VPC Investor Fund GP C, L.P.
Its:     General Partner

By:     VPC Investor Fund UGP C, LLC
Its:     General Partner


By:     /s/ Scott R. Zemnick    
Name:    Scott R. Zemnick
Title:    General Counsel

[SIGNATURE PAGES CONTINUE]

    [Signature Page to First Amendment to Financing Agreement (Elastic)]

LENDERS (CON’T.):

VPC INVESTOR FUND G-1, L.P.

By:     VPC Investor Fund GP G, L.P.
Its:     General Partner

By:     VPC Investor Fund UGP G, LLC
Its:     General Partner


By:     /s/ Scott R. Zemnick    
Name:    Scott R. Zemnick
Title:    General Counsel



VPC SPECIALTY LENDING FUND (NE), LTD.
 

By:     Victory Park Capital Advisors, LLC
Its:     Investment Manager (pursuant to powers of attorney granted in the Investment Management Agreement)


By:     /s/ Scott R. Zemnick    
Name:    Scott R. Zemnick
Title:    General Counsel


[SIGNATURE PAGES CONTINUE]


    [Signature Page to First Amendment to Financing Agreement (Elastic)]

VPC SPECIALTY LENDING INVESTMENTS INTERMEDIATE, L.P.

By:    VPC Specialty Lending Investments Intermediate GP, LLC
Its:    General Partner

By:     Victory Park Management, LLC
Its:    Manager


By:     /s/ Scott R. Zemnick    
Name:    Scott R. Zemnick
Title:    Manager

VPC OFFSHORE UNLEVERAGED PRIVATE DEBT FUND, L.P.

By:     VPC Private Debt Fund GP, L.P.
Its:     General Partner

By:     VPC UGP, LLC
Its:     General Partner


By:     /s/ Scott R. Zemnick    
Name:    Scott R. Zemnick
Title:    General Counsel

VPC INVESTOR FUND G-2, L.P.

By:    VPC Investor Fund GP G-2, L.P.
Its:    General Partner

By:     VPC Investor Fund UGP G, LLC
Its:    General Partner


By:     /s/ Scott R. Zemnick    
Name:    Scott R. Zemnick
Title:    General Counsel




    [Signature Page to First Amendment to Financing Agreement (Elastic)]

Exhibit A
AMENDMENT TO THE FINANCING AGREEMENT
(see attached)



AMENDED AND RESTATED
FINANCING AGREEMENT

Dated as of February 7, 2019

by and among

ELASTIC SPV, LTD., as the Borrower (the “Borrower”),

THE GUARANTORS FROM TIME TO TIME PARTY HERETO,

THE LENDERS PARTY HERETO
and

VICTORY PARK MANAGEMENT, LLC
as Agent
______________________________________________________________________________
$350,000,000 SENIOR SECURED TERM NOTES
______________________________________________________________________________




TABLE OF CONTENTS
Page
Article 1 DEFINITIONS; CERTAIN TERMS 1
Section 1.1 Definitions 1
Section 1.2 Terms Generally 26
Section 1.3 Accounting and Other Terms 26
Article 2 BORROWER’S AUTHORIZATION OF ISSUE 27
Section 2.1 Senior Secured Term Notes 27
Section 2.2 Interest 28
Section 2.3 Redemptions and Payments 29
Section 2.4 Payments 33
Section 2.5 Dispute Resolution 33
Section 2.6 Taxes 34
Section 2.7 Reissuance 35
Section 2.8 Register 36
Section 2.9 Maintenance of Register 36
Section 2.1 Monthly Maintenance Fee 36
Article 3 RESTATEMENT CLOSING 37
Section 3.1 Restatement Closing 37
Section 3.2 Subsequent Closings 37
Article 4 INTENTIONALLY OMITTED 38
Article 5 CONDITIONS TO RESTATEMENT CLOSING AND EACH LENDER’S OBLIGATION TO PURCHASE 38
Section 5.1 Restatement Closing 38
Section 5.2 Subsequent Closings 41
Article 6 INTENTIONALLY OMITTED 42
Article 7 CREDIT PARTIES’ REPRESENTATIONS AND WARRANTIES 42
Section 7.1 Organization and Qualification 42
Section 7.2 Authorization; Enforcement; Validity 42
Section 7.3 Issuance of Notes 43
Section 7.4 No Conflicts 43
Section 7.5 Consents 43
Section 7.6 Subsidiary Rights 43
1
US_142815097

Section 7.7 Equity Capitalization 43
Section 7.8 Indebtedness and Other Contracts 44
Section 7.9 Off Balance Sheet Arrangements 44
Section 7.10 Ranking of Notes 45
Section 7.11 Title 45
Section 7.12 Intellectual Property Rights 45
Section 7.13 Creation, Perfection, and Priority of Liens 45
Section 7.14 Absence of Certain Changes; Insolvency 46
Section 7.15 Absence of Proceedings 46
Section 7.16 No Undisclosed Events, Liabilities, Developments or Circumstances 46
Section 7.17 No Disagreements with Accountants and Lawyers 47
Section 7.18 Placement Agent’s Fees. 47
Section 7.19 Reserved. 47
Section 7.20 Tax Status 47
Section 7.21 Transfer Taxes 47
Section 7.22 Conduct of Business; Compliance with Laws; Regulatory Permits 47
Section 7.23 Foreign Corrupt Practices 48
Section 7.24 Reserved 48
Section 7.25 Environmental Laws 48
Section 7.26 Margin Stock 49
Section 7.27 ERISA 49
Section 7.28 Investment Company 49
Section 7.29 U.S. Real Property Holding Corporation 49
Section 7.30 Internal Accounting and Disclosure Controls 50
Section 7.31 Reserved 50
Section 7.32 Transactions With Affiliates 50
Section 7.33 Acknowledgment Regarding Holders’ Purchase of Notes 50
Section 7.34 Reserved 50
Section 7.35 Insurance 50
Section 7.36 Full Disclosure 51
Section 7.37 Employee Relations 51
Section 7.38 Certain Other Representations and Warranties 51
Section 7.39 Patriot Act 51
Section 7.40 Material Contracts 52
Article 8 COVENANTS 52
Section 8.1 Financial Covenants 52
Section 8.2 Deliveries 53
Section 8.3 Notices 54
Section 8.4 Rank 57
Section 8.5 Incurrence of Indebtedness 57
Section 8.6 Existence of Liens 57
Section 8.7 Restricted Payments 57
Section 8.8 Mergers; Acquisitions; Asset Sales 59
2
US_142815097

Section 8.9 No Further Negative Pledges 59
Section 8.10 Affiliate Transactions 59
Section 8.11 Insurance. 59
Section 8.12 Corporate Existence and Maintenance of Properties 60
Section 8.13 Non-circumvention 61
Section 8.14 Change in Business; Change in Accounting; Elevate Credit 61
Section 8.15 U.S. Real Property Holding Corporation 61
Section 8.16 Compliance with Laws 61
Section 8.17 Additional Collateral 62
Section 8.18 Audit Rights; Field Exams; Appraisals; Meetings; Books and Records 62
Section 8.19 Additional Issuances of Debt Securities; Right of First Refusal on New Indebtedness 63
Section 8.20 Post-Closing Obligations. 64
Section 8.21 Use of Proceeds 64
Section 8.22 Fees, Costs and Expenses 64
Section 8.23 Modification of Organizational Documents and Certain Documents 64
Section 8.24 Joinder 65
Section 8.25 Investments 65
Section 8.26 Further Assurances. 66
Section 8.27 Backup Servicer 66
Section 8.28 Claims Escrow Account 66
Article 9 CROSS GUARANTY 67
Section 9.1 Cross-Guaranty 67
Section 9.2 Waivers by Guarantors 68
Section 9.3 Benefit of Guaranty 68
Section 9.4 Waiver of Subrogation, Etc 68
Section 9.5 Election of Remedies 68
Section 9.6 Limitation 69
Section 9.7 Contribution with Respect to Guaranty Obligations. 69
Section 9.8 Liability Cumulative 70
Section 9.9 Stay of Acceleration 70
Section 9.10 Benefit to Credit Parties 70
Section 9.11 Indemnity 70
Section 9.12 Reinstatement 70
Section 9.13 Guarantor Intent 71
Section 9.14 General 71
Article 10 RIGHTS UPON EVENT OF DEFAULT 71
Section 10.1 Event of Default 71
Section 10.2 Termination of Commitments and Acceleration Right 74
Section 10.3 Consultation Rights 75
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Section 10.4 Other Remedies 75
Section 10.5 Application of Proceeds 75
Article 11 [RESERVED] 76
Article 12 AGENCY PROVISIONS 76
Section 12.1 Appointment 76
Section 12.2 Binding Effect 78
Section 12.3 Use of Discretion 78
Section 12.4 Delegation of Duties 78
Section 12.5 Exculpatory Provisions 78
Section 12.6 Reliance by Agent 79
Section 12.7 Notices of Default 80
Section 12.8 Non Reliance on the Agent and Other Holders 80
Section 12.9 Indemnification 80
Section 12.10 The Agent in Its Individual Capacity 81
Section 12.11 Resignation of the Agent; Successor Agent 81
Section 12.12 Reimbursement by Holders and Lenders 81
Section 12.13 Withholding 82
Section 12.14 Release of Collateral or Guarantors 82
Article 13 MISCELLANEOUS 83
Section 13.1 Payment of Expenses 83
Section 13.2 Governing Law; Jurisdiction; Jury Trial 84
Section 13.3 Counterparts 84
Section 13.4 Headings 84
Section 13.5 Severability 84
Section 13.6 Entire Agreement; Amendments 84
Section 13.7 Notices 85
Section 13.8 Successors and Assigns; Participants 87
Section 13.9 No Third Party Beneficiaries 89
Section 13.10 Survival 89
Section 13.11 Further Assurances 89
Section 13.12 Indemnification 89
Section 13.13 No Strict Construction 90
Section 13.14 Waiver 90
Section 13.15 Payment Set Aside 90
Section 13.16 Independent Nature of the Lenders’ and the Holders’ Obligations and Rights 90
Section 13.17 Set-off; Sharing of Payments 91
Section 13.18 Reaffirmation 92
Section 13.19 Release of Agent and Lenders 93
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Section 13.20 Limited Recourse and Non-Petition 93
Section 13.19 Creditor Debtor Relationship 93

EXHIBITS
Exhibit A    Form of Senior Secured Term Note
Exhibit B    Form of Pledge and Security Agreement
Exhibit C    Form of Secretary’s Certificate
Exhibit D    Form of Officer’s Certificate
Exhibit E    Form of Compliance Certificate
Exhibit F    Form of Notice of Purchase and Sale
Exhibit G    Form of Joinder Agreement
Exhibit H    Index of Closing Documents
Exhibit I    Form of US Tax Compliance Certificate

SCHEDULES
Schedule 1.1        Program Guidelines
Schedule 7.1        Subsidiaries
Schedule 7.5        Consents
Schedule 7.7        Equity Capitalization
Schedule 7.8        Indebtedness and Other Contracts
Schedule 7.12        Intellectual Property Rights
Schedule 7.14        Absence of Certain Changes; Insolvency
Schedule 7.22        Conduct of Business; Compliance with Laws; Regulatory Permits
Schedule 7.27        ERISA
Schedule 7.32        Transactions with Affiliates
Schedule 7.40        Material Contracts
Schedule 8.3(d)    Notice of Certain Proceedings as of First Amendment Effective Date
Schedule 8.25        Existing Investments

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AMENDED AND RESTATED
FINANCING AGREEMENT
This AMENDED AND RESTATED FINANCING AGREEMENT (as modified, amended, extended, restated, amended and restated and/or supplemented from time to time, this “Agreement”), dated as of February 7, 2019 is being entered into by and among (a) Elastic SPV, Ltd., an exempted company incorporated with limited liability under the laws of the Cayman Islands (the “Borrower”), (b) Elevate Credit, Inc., a Delaware corporation as a Guarantor (as defined herein) and the other Guarantors from time to time party hereto, (c) the lenders listed on the Schedule of Lenders attached hereto (each individually, a “Lender” and collectively, the “Lenders”) and (d) Victory Park Management, LLC, as administrative agent and collateral agent (the “Agent”) for the Lenders and the Holders (as defined herein).
RECITALS
WHEREAS, the Borrower, the other Credit Parties, Agent and Lenders are parties to that certain Financing Agreement, dated as of July 1, 2015, as amended by that certain First Amendment to Financing Agreement dated as of October 21, 2015, that certain Second Amendment to Financing Agreement dated as of July 14, 2016, that certain Third Amendment to Financing Agreement dated as of April 27, 2017, and that certain Fourth Amendment to Financing Agreement dated as of October 15, 2018 (the “Original Agreement”);
WHEREAS, the parties hereto desire to enter into this Agreement to, among other things, amend and restate in its entirety the Original Agreement, without constituting a novation of the obligations, liabilities and indebtedness of the Borrower and Guarantors thereunder, on the terms and subject to the conditions contained herein; and
WHEREAS, contemporaneously with the execution and delivery of this Agreement, the Borrower shall pay and reimburse the Agent for itself and on behalf of the Holders and Lenders for all costs and expenses, including but not limited to fees, reimbursements, legal costs and expenses, collateral valuations, appraisals, field examinations, third party diligence, lien searches, filing fees, and all other out-of-pocket expenses incurred in connection with the transactions contemplated hereunder.
NOW, THEREFORE, in consideration of the premises and the covenants and agreements contained herein, the Borrower, the Guarantors, the Agent and each Lender hereby amend and restate the Original Agreement in its entirety without effecting a novation of the Obligations thereunder, and otherwise agree as follows:
Article 1
DEFINITIONS; CERTAIN TERMS

Section 1.1Definitions. As used in this Agreement, the following terms have the respective meanings indicated below, such meanings to be applicable equally to both the singular and plural forms of such terms:
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“956 Impact” has the meaning set forth in Section 8.24.
“956 Limitations” means, collectively, that notwithstanding any other provisions of this Agreement, (a) no Obligation of the Borrower (including any guaranty of any Obligation of the Borrower) shall constitute an “Obligation” with respect to any UK Credit Party, (b) no UK Credit Party shall guaranty or otherwise be liable for any other Credit Party’s guaranty of any Obligation of the Borrower and (c) no assets of any UK Credit Party shall serve as collateral security for any Obligations of the Borrower (including any guaranty of any Obligations of the Borrower), it being understood and acknowledged that the preceding provisions are intended to ensure that no UK Credit Party shall be treated as holding any obligations of a United States person pursuant to Section 956 of the Internal Revenue Code and shall be interpreted consistent with this intention.
“1933 Act” means the Securities Act of 1933, as amended.
“Acquisition” means any transaction or series of related transactions for the purpose of or resulting, directly or indirectly, in (a) the acquisition of all or substantially all of the assets of a Person, or of all or substantially all of any business line, unit or division of a Person, (b) the acquisition of in excess of 50% of the Equity Interests of any Person, or otherwise causing any Person to become a Subsidiary, or (c) a merger or consolidation or any other combination with another Person.
“Additional Amount” has the meaning set forth in Section 2.6(a).
“Affiliate” means, with respect to a specified Person, another Person that (i) is a director or officer of such specified Person, or (ii) directly or indirectly through one or more intermediaries, Controls, is Controlled by or is under common Control with the Person specified.
“Agent” has the meaning set forth in the introductory paragraph hereto.
“Agreement” has the meaning set forth in the introductory paragraph hereto.
“Amounts Due” has the meaning set forth in Section 13.20.
“Asset Sale” means the sale, lease, license, conveyance or other disposition of any assets or rights of any Credit Party or any Credit Party’s Subsidiaries.
“Assignee” has the meaning set forth in Section 13.8.
“Backup Servicer” means a Person, reasonably satisfactory to Agent, that the Borrower has appointed and that is providing backup servicing and its permitted successors and assigns reasonably satisfactory to Agent.
“Backup Servicing Agreement” means the Backup Servicing Agreement among the Credit Parties, the Backup Servicer and the Agent as amended, restated, supplemented or otherwise modified from time to time in accordance with the terms thereof.
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“Bankruptcy Code” has the meaning set forth in Section 10.1(c).
“Bankruptcy Law” has the meaning set forth in Section 10.1(c).
“Base Rate” means
(a)at any time on or after February 1, 2019 but prior to the first Issuance Date after February 1, 2019, a rate equal to the greatest of (i) the LIBOR Rate as of February 1, 2019, (ii) the Swap Rate as of February 1, 2019, and (iii) one percent per annum (1%); and
(b)at any time after the first Issuance Date after February 1, 2019 and as of each Issuance Date, a rate equal to the weighted average of (i) the then-current Base Rate immediately preceding such Issuance Date and (ii) the greatest of (A) the LIBOR Rate as of such Issuance Date, (B) the Swap Rate as of such Issuance Date and (C) one percent per annum (1%). For the avoidance of doubt, the resulting weighted average calculated in clause (b) shall be used as the then-current Base Rate in clause (b)(i) when calculating the Base Rate on the next succeeding Issuance Date.

“Blocked Account” means each “Controlled Account” (as defined in the Security Agreement) that is subject to the full dominion and control of the Agent.
“Book Value of Equity” means, as of any date of determination, total assets less intangible assets less total liabilities, in each case, of the Credit Parties and their Subsidiaries.
“Borrower” has the meaning set forth in the introductory paragraph hereto.
“Borrowing Base” means, on any date of determination, the sum of:
(a)the aggregate principal balance of the portion of the Eligible Consumer Loans in which the Borrower owns a participation interest pursuant to the Participation Agreement on such date (for the avoidance of doubt, any portion of an Eligible Consumer Loan with respect to which an interest is retained by Republic Bank is excluded hereunder) less any Excess Concentration Amounts multiplied by eighty-five percent (85%); plus
(b)one hundred percent (100%) of the balance of the unrestricted (it being agreed and acknowledged that cash collateral securing surety bonds and letters of credit posted or maintained by the Borrower shall be deemed to be “restricted”) cash and Cash Equivalent Investments of the Borrower in a Funding Account or Collection Account on such date for which the Agent shall have a first-priority perfected Lien. For purposes of clarification, unrestricted cash includes all cash of the Borrower that is being held by an ACH provider or Republic Bank prior to remittance to Borrower.

“Borrowing Base Certificate” means a borrowing base certificate signed by the chief financial officer of the Borrower (or other authorized executive officer performing a similar function), in substantially the form included in the Form of Notice of Purchase and Sale attached hereto as Exhibit F.
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“Business Day” means any day other than Saturday or Sunday or any day that banks in Chicago, Illinois are required or permitted to close.
“Capital Stock” means (1) in the case of a corporation, corporate stock; (2) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock; (3) in the case of a partnership or limited liability company, partnership interests (whether general or limited) or membership interests; and (4) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person, but excluding from all of the foregoing any debt securities convertible into, or exchangeable for, Capital Stock, whether or not such debt securities include any right of participation with Capital Stock.
“Cash Equivalent Investment” means, at any time, (a) any evidence of debt, maturing not more than one year after such time, issued or guaranteed by the United States Government or any agency thereof, (b) commercial paper, maturing not more than one year from the date of issue, or corporate demand notes, in each case rated at least A-l by Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc. or P-l by Moody’s Investors Service, Inc., (c) any certificate of deposit, time deposit or banker’s acceptance, maturing not more than one year after such time, or any overnight Federal Funds transaction that is issued or sold by 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, (d) any repurchase agreement entered into with any commercial banking institution of the nature referred to in clause (c) which (i) is secured by a fully perfected security interest in any obligation of the type described in any of clauses (a) through (c) 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 such commercial banking institution, (e) money market accounts or mutual funds which invest exclusively in assets satisfying the foregoing requirements, and (f) other short term liquid investments approved in writing by Agent.
“CC Financing Agreement” means that certain Financing Agreement dated as of July 31, 2020 by and among EC SPV, Ltd., Elevate Credit Service, LLC, the other “Guarantors” from time to time party thereto, the “Lenders” from time to time party thereto and Victory Park Management, LLC, as administrative agent.
“Change of Control” means, (a) with respect to any Credit Party or any Subsidiary of any Credit Party, that such Person shall, directly or indirectly, in one or more related transactions, (i) consolidate or merge with or into (whether or not such Person is the surviving corporation) another Person or (ii) sell, assign, transfer, lease, license, convey or otherwise dispose of all or substantially all of the properties or assets of such Person to another Person; provided, the foregoing notwithstanding, any of the Elevate Credit Subsidiaries may suspend its operations in any jurisdiction in which it operates and dissolve as a result of a decision by the Credit Parties to exit one or more markets from time to time; (b) the accumulation after October 15, 2018, whether directly, indirectly, beneficially or of record, by any individual, entity or group (within the meaning of Sections 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended) of 50% or more of the shares of the outstanding Capital Stock of the Elevate Credit
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Parent, or, in any event, that number of shares of outstanding Capital Stock of Elevate Credit Parent representing voting control of Elevate Credit Parent, whether by merger, consolidation, sale or other transfer of shares of Capital Stock (other than a merger or consolidation where the stockholders of Elevate Credit Parent prior to the merger or consolidation are the holders of a majority of the voting securities of the entity that survives such merger or consolidation); (c) Elevate Credit Parent shall cease to own, beneficially and of record, for any reason at any time 100% of the Capital Stock of any of the Elevate Credit Subsidiaries, free and clear of all Liens (other than Liens in favor of the Agent); or (d) the owner of the Capital Stock of the Borrower as of the Original Closing Date shall cease to own, beneficially and of record, for any reason at any time 100% of the Capital Stock of the Borrower.
“Charge Off” means an amount equal to the sum of the outstanding principal balance of Consumer Loans that (i) have a principal payment that became greater than sixty (60) days past due the scheduled payment date, which such scheduled payment date shall not be fourteen (14) days (or, in the case of Modified and Re-Aged Consumer Loans that have been modified in accordance with a modification policy approved in writing by Agent, such other period of days agreed to by Agent) past the original payment date, (ii) are identified as fraudulent or where the underlying borrowers are in bankruptcy proceedings or (iii) is otherwise charged off in accordance with the Program Guidelines, in each case, in the calendar month that includes such date of determination. The Charge Offs shall be applied to lower the principal balance of Consumer Loans on a last-in first-out basis. “Charged Off” shall have a meaning correlative thereto.
“Claims Escrow Account” has the meaning set forth in Section 8.28(a).
“Claims Escrow Account Funding Condition” means a condition that is satisfied if the principal balance of the Claims Escrow Account is five million dollars ($5,000,000).
“Code” means the Internal Revenue Code of 1986, as amended.
“Collateral” means the “Collateral” as defined in the Security Agreement.
“Collection Account” means, with respect to the Borrower, a deposit account of Borrower approved in writing by the Agent, in which (a) all funds on deposit therein shall be solely amounts collected or received in respect of Consumer Loans and (b) no other party shall have a Lien or shall have perfected a Lien, other than any Lien of the Agent and customary common law or statutory rights of setoff of banks arising in connection with their depository relationship with Borrower.
“Commitment” has the meaning set forth in Section 2.1.
“Compliance Certificate” means a compliance certificate signed by the chief financial officer of the Borrower (or other authorized executive officer performing a similar function), in substantially the form attached hereto as Exhibit E.
“Consumer Credit” is defined in 12 C.F.R §202.2(h).
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“Consumer Loan Agreement” means a consumer loan agreement (together with all related agreements, documents and instruments executed and/or delivered in connection therewith) or similar contract, pursuant to which a Credit Party agrees to make Consumer Loans from time to time.
“Consumer Loans” means unsecured consumer loans marked as “Elastic” on the monthly financial statements provided to Agent pursuant to Section 8.2(a) that are originated by Republic Bank and in which a 90.0% participation interest is sold to Borrower. Consumer Loans will be only be issued to individual residents of the United States of America and in accordance with the Program Guidelines.
“Contingent Obligation” means, as to any Person, any direct or indirect liability, contingent or otherwise, of that Person with respect to any indebtedness, lease, dividend or other obligation of another Person if the primary purpose or intent of the Person incurring such liability, or the primary effect thereof, is to provide assurance to the obligee of such liability that such liability will be paid or discharged, or that any agreements relating thereto will be complied with, or that the holders of such liability will be protected (in whole or in part) against loss with respect thereto.
“Control” means the possession, directly or indirectly, of the power (i) to vote 10% or more of the Capital Stock having ordinary voting power for the election of directors of a Person or (ii) to direct or cause the direction of management and policies of a Person, whether through the ownership of voting securities, by contract, proxy, agency or otherwise. “Controlling” and “Controlled” have meanings correlative thereto.
“Corporate Cash” means, as of any date of determination, the sum of unrestricted cash and Cash Equivalent Investments of Elevate Credit Parent and its Subsidiaries (excluding the Borrower and the Other Borrowers) with respect to which Agent has a perfected Lien as of such date of determination.
“Credit Party” means the Borrower and each Guarantor.
“CSO Loans” means installment loans originated by independent third party lenders, whereby (a) the applicable Elevate Credit Subsidiary acts as a credit services organization on behalf of consumers in accordance with applicable state laws and (b) in order to assist the customer in obtaining a loan under such program, Elevate Credit Parent guarantees, on behalf of the customer, the customer’s payment obligations to the third party lender under the loan.
“Current Interest Rate” means the sum of (i) the Base Rate and (ii) the Interest Rate Spread; provided, that the Current Interest Rate shall not exceed the highest lawful rate and may be reduced in accordance with Section 2.2(e).
“Custodian” has the meaning set forth in Section 10.1(c).
“Customer Information” means nonpublic information relating to borrowers or applicants of Consumer Loans, including without limitation, names, addresses, telephone
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numbers, e-mail addresses, credit information, account numbers, social security numbers, loan balances or other loan information, and lists derived therefrom and any other information required to be kept confidential by the Requirements.
“Debt-to-Equity Ratio” means, (a) with respect to Elevate Credit Parent, at any time, the ratio between (i) the aggregate amount of Indebtedness, liabilities and other obligations of Elevate Credit Parent and its Subsidiaries (including the Obligations), determined in accordance with GAAP, at such time, and (ii) the sum of (A) the aggregate amount of capital contributions made to Elevate Credit Parent by its stockholders and retained earnings of Elevate Credit Parent, determined in accordance with GAAP, in each case, as of such time reduced by (B) the aggregate amount of cash distributions made by Elevate Credit Parent to any of its stockholders, as of such time, and (b) with respect to each Borrower, at any time, the ratio between (i) the aggregate amount of Indebtedness, liabilities and other obligations of the Borrower (including the Obligations), determined in accordance with GAAP, at such time, and (ii) the sum of (A) the aggregate amount of capital contributions made to the Borrower by Elevate Credit Parent and retained earnings of the Borrower, determined in accordance with GAAP, in each case, as of such time reduced by (B) the aggregate amount of cash distributions made by the Borrower to any of its members as of such time.
“Default Rate” means a rate equal to the lesser of (i) the Current Interest Rate plus five percent (5.0%) per annum and (ii) the highest lawful rate.
“Destruction” means any and all damage to, or loss or destruction of, or loss of title to, all or any portion of the Collateral (i) in excess of $100,000 in the aggregate for any Fiscal Year or (ii) that results, individually or in the aggregate, in a Material Adverse Effect.
“Diligence Date” has the meaning set forth in Section 7.14(a).
“Diligence Issues” has the meaning set forth in Section 8.20(a).
“Division/Series Transaction” means, with respect to any Credit Party and/or any of its Subsidiaries that is a limited liability company organized under the laws of the State of Delaware, that any such Person (a) divides into two or more Persons (whether or not the original Credit Party or Subsidiary thereof survives such division) or (b) creates, or reorganizes into, one or more series, in each case, as contemplated under the laws of the State of Delaware.
“Dollar” and “$” mean lawful money of the United States.
“Domestic Credit Party” means a Credit Party that is incorporated or otherwise organized under the laws of a state of the United States.
“Elevate Credit Parent” shall mean Elevate Credit, Inc., a Delaware corporation.
“Elevate Credit Subsidiaries” means each of (a) the Subsidiaries of Elevate Credit Parent listed on the signature pages hereto as an “Elevate Credit Subsidiary;” and (b) each other
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Subsidiary formed or acquired by Elevate Credit Parent from time to time after the Original Closing Date; provided, no Other Borrower shall be deemed to be an Elevate Credit Subsidiary.
“Eligible Consumer Loan” means, as of any date of determination, a Consumer Loan that is subject to a first priority Lien in favor of Agent and which are not any of the following:
(a)Consumer Loan with a principal payment that is greater than sixty (60) days past due on any contractual payment due date or is otherwise a Charged Off Consumer Loan, or is charged off in accordance with the Program Guidelines;
(b)Consumer Loan to employees of any Credit Party;

(c)Consumer Loan not originated to a person domiciled in the United States;

(d)Consumer Loan not denominated in U.S. Dollars;

(e)Consumer Loan involved in litigation or subject to legal, bankruptcy or insolvency proceedings or with underlying borrowers subject to bankruptcy or insolvency proceedings;

(f)Consumer Loan with a balloon payment and/or Consumer Loan that is a non-amortizing account;

(g)Consumer Loan with original term in excess of twenty (20) months;

(h)Consumer Loan originated, acquired or participated in a manner that is not in compliance with the Program Guidelines within each respective state where such Consumer Loan is originated;

(i)Consumer Loan that violates applicable consumer protection, state or usury laws in any material respect;

(j)Consumer Loan that is subject to assignment or confidentiality restrictions applicable to Republic Bank or the underlying borrower;

(k)Consumer Loan originated to residents in states where Republic Bank was not licensed or registered as required by applicable state law when such Consumer Loan was originated;

(l)Consumer Loan with an original principal amount greater than $4,500;

(m)Consumer Loan with an annual percentage rate of less than eighty percent (80%); and

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(n)Consumer Loan that has been modified outside of the Program Guidelines or is a Modified and Re-Aged Consumer Loan that has been modified outside of the modification policy approved in writing by Agent, in each case unless approved by Agent in its sole discretion;
provided, for the avoidance of doubt, any reference in this definition to the Program Guidelines shall be the Program Guidelines in effect before any amendment, modification or supplement unless such amendment, modification or supplement has been approved by the Agent in writing in accordance with the definition of “Program Guidelines”.
“Employee Benefit Plan” means any “employee benefit plan” as defined in Section 3(3) of ERISA (a) which is or was sponsored, maintained or contributed to by, or required to be contributed to by, any Credit Party, any Subsidiary of any Credit Party or any of their ERISA Affiliates, or (b) with respect to which, any Credit Party or any Subsidiary of any Credit Party may have liability (contingent or otherwise).
“Environmental Laws” means all applicable federal, state, local or foreign laws relating to pollution or protection of human health or the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata), including, without limitation, laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous Materials”) into the environment, the exposure of humans thereto, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well as all regulatory authorizations, codes, decrees, demands or demand letters, injunctions, judgments, licenses, notices of violation or similar notice letters, orders, permits, plans or regulations issued, entered, promulgated or approved thereunder.
“Equity Interests” means Capital Stock and all warrants, options and other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock, whether or not such debt security includes the right of participation with Capital Stock).
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time.
“ERISA Affiliate” means, as to any Credit Party, any trade or business (whether or not incorporated) that is a member of a group which includes such Credit Party and which is treated as a single employer under Section 414 of the Code.
“ERISA Event” means (a) the occurrence of a “reportable event” within the meaning of Section 4043 of ERISA and the regulations issued thereunder with respect to any Pension Plan (excluding those for which the provision for 30 day notice to the PBGC has been waived by regulation) with respect to an ERISA Affiliate; (b) the failure to meet the minimum funding standards of Sections 412 and 430 of the Code with respect to any Pension Plan (whether or not waived in accordance with Section 412(c) of the Code) or the failure to make by its due date a required installment under Section 430(j) of the Code with respect to any Pension Plan or the failure to make any required contribution to a Multiemployer Plan; (c) the provision by the
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administrator of any Pension Plan pursuant to Section 4041(a)(2) of ERISA of a notice of intent to terminate such plan in a distress termination described in Section 4041(c) of ERISA; (d) the withdrawal by any of the Credit Parties, any of their respective Subsidiaries or any of their respective ERISA Affiliates from any Pension Plan with two or more contributing sponsors or the termination of any such Pension Plan resulting in liability to any of the Credit Parties, any of their respective Subsidiaries or any of their respective ERISA Affiliates pursuant to Section 4063 or 4064 of ERISA; (e) the institution by the PBGC of proceedings to terminate any Pension Plan, or the occurrence of any event or condition which reasonably might be expected to constitute grounds under ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan; (f) the imposition of liability on any of the Credit Parties, any of their respective Subsidiaries or any of their respective ERISA Affiliates pursuant to Section 4062(e) or 4069 of ERISA or by reason of the application of Section 4212(c) of ERISA; (g) the withdrawal of any of the Credit Parties, any of their respective Subsidiaries or any of their respective ERISA Affiliates in a complete or partial withdrawal (within the meaning of Sections 4203 and 4205 of ERISA) from any Multiemployer Plan if there is any potential liability therefor, or the receipt by any of the Credit Parties, any of their respective Subsidiaries or any of their respective ERISA Affiliates of notice from any Multiemployer Plan that it is in reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA, or that it intends to terminate or has terminated under Section 4041A or 4042 of ERISA; (h) the occurrence of an act or omission which reasonably might be expected to give rise to the imposition on any of the Credit Parties, any of their respective Subsidiaries or any of their respective ERISA Affiliates of fines, penalties, taxes or related charges under Sections 4975 or 4971 of the Code or under Section 409, Section 502(c), (i) or (l), or Section 4071 of ERISA in respect of any Employee Benefit Plan; (i) the assertion of a material claim (other than routine claims for benefits) against any Employee Benefit Plan other than a Multiemployer Plan or the assets thereof, or against any of the Credit Parties, any of their respective Subsidiaries or any of their respective ERISA Affiliates in connection with any Employee Benefit Plan; (j) receipt from the Internal Revenue Service of notice of the failure of any Pension Plan (or any other Employee Benefit Plan intended to be qualified under Section 401(a) of the Code) to qualify under Section 401(a) of the Code, or the failure of any trust forming part of any Pension Plan to qualify for exemption from taxation under Section 501(a) of the Code; or (k) the imposition of a Lien pursuant to Section 401(a)(29) or 430(k) of the Code or pursuant to ERISA with respect to any Pension Plan.
“Event of Default” has the meaning set forth in Section 10.1.
“Event of Default Commitment Suspension or Termination Notice” has the meaning set forth in Section 10.2(a).
“Event of Default Notice” has the meaning set forth in Section 10.2(a).
“Event of Default Redemption” has the meaning set forth in Section 10.2(a).
“Event of Default Redemption Notice” has the meaning set forth in Section 10.2(a).
“Event of Default Redemption Price” has the meaning set forth in Section 10.2(a).
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“Event of Loss” means any Destruction to, or any Taking of, any asset or property of any Credit Party or any of their Subsidiaries.
“Excess Concentration Amount” shall include the following:
(a)The aggregate principal balance of all Eligible Consumer Loans, as of any date of determination, that have principal payments that are greater than or equal to one (1) day past due and less than or equal to thirty (30) days past due on such date in excess of seven percent (7%) of the aggregate principal balance of all of the Eligible Consumer Loans;
(b)The aggregate principal balance of all Eligible Consumer Loans, as of any date of determination, that have principal payments that are greater than thirty (30) days and less than or equal to sixty (60) days past due on such date in excess of four and one-half percent (4.5%) of the aggregate principal balance of all of the Eligible Consumer Loans; or

(c)The aggregate principal balance of all Eligible Consumer Loans that are Modified and Re-Aged Consumer Loans in excess of five percent (5%) of the aggregate principal balance of all of the Eligible Consumer Loans.

“Excess Spread” means, as of any date of determination, the ratio expressed as a percentage of (a) the aggregate amount of interest collections from Consumer Loans less any Charge Offs, in each case, in the calendar month immediately prior to the calendar month that includes such date of determination over (b) the aggregate principal balance of Consumer Loans as of the first day of the calendar month immediately prior to the calendar month that includes such date of determination; provided, if the date of determination is the last day of the calendar month, “Excess Spread” means the ratio expressed as a percentage of (a) the aggregate amount of interest collections from Consumer Loans less any Charge Offs, in each case, in the calendar month that includes such date of determination over (b) the aggregate principal balance of Consumer Loans as of the first day of the calendar month that includes such date of determination.
“Excluded Taxes” means, in respect of the Agent or any Holder or Lender, as applicable, (a) income taxes imposed on the net income of such Person, (b) franchise taxes imposed on the net income of such Person, in each case by the jurisdiction under the laws of which such Person is organized or qualified to do business or a jurisdiction or any political subdivision thereof in which such Person engages in business activity, other than activity or connection arising from such Person having executed, delivered, become a party to, enjoyed or exercised its rights under, performed its obligations under, received payments under, received or perfected a security interest under, or engaged in any other transaction contemplated under this Agreement or any Transaction Document, or sold or assigned any interest in any Note or any of the other Transaction Documents.
“Extraordinary Receipts” means any cash received by any Credit Party or any of their Subsidiaries outside the ordinary course of business (and not consisting of proceeds described in Sections 2.3(b)(i), (b)(ii), (b)(iii), (b)(iv) or (b)(vi)), including, without limitation, (a) foreign, United States, state or local tax refunds outside the ordinary course of business, (b) pension plan
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reversions outside the ordinary course of business, (c) judgments, proceeds of settlements or other consideration of any kind in excess of $500,000 in the aggregate in connection with any cause of action (but excluding any amounts received in connection with the collection, sale, or disposition in the ordinary course of business of the Credit Parties of Consumer Loans that are not Eligible Consumer Loans and that have been settled or charged off) and (d) any purchase price adjustment received in connection with any Acquisition.
“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with) and any current or future regulations or official interpretations thereof, and any agreements entered into pursuant to Section 1471(b)(1) of the Code, or any U.S. or non-U,S, fiscal or regulatory legislation, rules, guidance notes or practices adopted pursuant to any intergovernmental agreement entered into in connection with the implementation of such sections of the Code or analogous provisions of non-U.S. law.
“Federal or Multi-State Force Majeure Affected Amount” means, as of any date of determination, an amount equal to the aggregate outstanding principal amount of the Notes on such date multiplied by a fraction, the numerator of which shall be equal to the portion of such aggregate outstanding principal amount for which the proceeds thereof were used to originate Consumer Loans that remain outstanding on such date to borrowers residing in state(s) directly affected by a Federal or Multi-State Force Majeure Event (which amount with respect to each such Consumer Loan shall not exceed the outstanding principal amount of such Consumer Loan on such date) and the denominator of which shall be equal to the aggregate outstanding principal amount of the Notes on such date.
“Federal or Multi-State Force Majeure Event” means (i) any regulatory event or regulatory change at the federal level or in any group of states acting in concert in which the Credit Parties originate Consumer Loans, in each case, that would prohibit or make it illegal for the Credit Parties to continue to originate or collect Consumer Loans in such affected jurisdictions pursuant to the Program or another program of a type similar to the Program or (ii) the termination by Republic Bank of the Program and the failure by the Credit Parties, after using commercially reasonable efforts during the termination period specified in Republic Bank’s termination notice, to arrange for another partner to originate Consumer Loans or similar products under the Program or another program of similar type to the Program, either of which resulting in a Federal or Multi-State Force Majeure Affected Amount equal to two-thirds or more of the aggregate principal amount then outstanding under the Notes as of the applicable date of determination.
“FinWise Financing Agreement” means that certain Financing Agreement entered into by and among EF SPV, Ltd., as borrower, Elevate Credit, Inc., as a guarantor, the other guarantors party thereto, Victory Park Management, LLC, as collateral agent, and each person who becomes party thereto pursuant to the joinder provisions thereof.
“First Amendment Effective Date” means July 31, 2020.
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“First Tier Foreign Subsidiary” means a Foreign Subsidiary more than fifty percent (50%) of the voting Equity Interests of which are held directly by a Credit Party or indirectly by a Credit Party through one or more Subsidiaries that are incorporated or otherwise organized under the laws of a state of the United States of America.
“Fiscal Year” means a fiscal year of the Credit Parties.
“Foreign Lender” means a Lender or a Holder that is not a US Person.
“Foreign Subsidiary” means, with respect to any Person, a Subsidiary of such Person, which Subsidiary is not incorporated or otherwise organized under the laws of a state of the United States of America.
“Foreign Subsidiary Credit Party” means any Credit Party that is a Foreign Subsidiary.
“Four Month Charge Off Rate” means, as of any date of determination and with respect to any Vintage Pool, the ratio of (i) the aggregate Charge Off amount in such Vintage Pool during the period beginning on the applicable date of origination through the end of the month of such origination and ending on the fourth consecutive calendar month, beginning with such month of origination to (ii) the aggregate principal balance of such Vintage Pool at the time of origination.
“Funding Account” means, with respect to the Borrower, a deposit account of Borrower approved in writing by the Agent, in which (a) all funds on deposit therein shall be solely used to fund Consumer Loans and for no other purpose and (b) no other party shall have a Lien or shall have perfected a Lien, other than any Lien of the Agent and customary common law or statutory rights of setoff of banks arising in connection with their depository relationship with Borrower.
“GAAP” means United States generally accepted accounting principles, consistently applied.
“Governmental Authority” means the government of the United States of America, any other nation or any political subdivision of any of the foregoing, whether federal, state or local, and any agency, authority, commission, 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.
“Guarantor” means (i) Elevate Credit Parent (ii) each of the Elevate Credit Subsidiaries, and (iii) each other Person that guarantees in writing all or any part of the Obligations.
“Guarantor Payment” has the meaning set forth in Section 9.7(a).
“Hedging Obligations” means, with respect to any specified Person, the obligations of such Person under: (i) interest rate swap agreements (whether from fixed to floating or from floating to fixed), interest rate cap agreements and interest rate collar agreements; (ii) other agreements or arrangements designed to manage interest rates or interest rate risk; and (iii) other
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agreements or arrangements designed to protect such Person against fluctuations in currency exchange rates or commodity prices.
“Holder” means a holder of a Note.
“Indebtedness” of any Person means, without duplication (i) all indebtedness for borrowed money, (ii) all obligations issued, undertaken or assumed as the deferred purchase price of property or services (including, without limitation, “financing leases” in accordance with GAAP) (other than trade payables entered into in the ordinary course of business), (iii) all reimbursement or payment obligations with respect to letters of credit, surety bonds and other similar instruments, (iv) all obligations evidenced by notes, bonds, notes or similar instruments whether convertible or not, including obligations so evidenced incurred in connection with the acquisition of property, assets or businesses, (v) all indebtedness created or arising under any conditional sale or other title retention agreement, or incurred as financing, in either case with respect to any property or assets acquired with the proceeds of such indebtedness (even though the rights and remedies of the seller or bank under such agreement in the event of default are limited to repossession or sale of such property), (vi) all indebtedness referred to in clauses (i) through (v) above secured by (or for which the holder of such indebtedness has an existing right, contingent or otherwise, to be secured by) any mortgage, lien, pledge, charge, security interest or other encumbrance upon or in any property or assets (including accounts and contract rights) owned by any Person, even though the Person which owns such assets or property has not assumed or become liable for the payment of such indebtedness, (vii) all Contingent Obligations in respect of indebtedness or obligations of others of the kinds referred to in clauses (i) through (vi) above; (viii) banker’s acceptances; (ix) the balance deferred and unpaid of the purchase price of any property or services due more than three months after such property is acquired or such services are completed; (x) Hedging Obligations; and (xi) obligations under convertible securities of any Credit Party or any of their Subsidiaries. In addition, the term “Indebtedness” of any Credit Party or any of their Subsidiaries, as applicable, includes (a) all Indebtedness of others secured by a Lien on any assets of any Credit Party or any of their Subsidiaries (whether or not such Indebtedness is assumed by any Credit Party or any of such Subsidiaries), (b) to the extent not otherwise included, the guarantee by any Credit Party or any of their Subsidiaries of any Indebtedness of any other Person and (c) the absolute value of any negative amounts in any accounts owned by any Credit Party.
“Indemnified Liabilities” has the meaning set forth in Section 13.12.
“Indemnitees” has the meaning set forth in Section 13.12.
“Insolvency Proceeding” means any corporate action, legal proceeding or other procedure or formal step taken in relation to (a) the suspension of payments, a moratorium of any indebtedness, winding-up, dissolution, administration or reorganization (by way of voluntary arrangement, scheme of arrangement or otherwise (other than for the purpose of a reconstruction or amalgamation the terms of which have been approved by the Agent)) of Elevate Credit Parent, any of its Subsidiaries or the Borrower; (b) a composition, compromise, assignment or arrangement with any creditor of Elevate Credit Parent, any of its Subsidiaries or the Borrower; (c) the appointment of a liquidator, receiver, administrative receiver, administrator, compulsory
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manager or other similar officer in respect of Elevate Credit Parent, any of its Subsidiaries or the Borrower or any of their respective assets; or (d) enforcement of any security over any assets of Elevate Credit, any of its Subsidiaries or the Borrower, in each case, or any analogous procedure or formal step taken in any jurisdiction.
“Insolvent” means, with respect to any Person, (a) the present fair saleable value in a nonliquidation context of such Person’s assets is less than the amount required to pay such Person’s total Indebtedness as applicable, or the fair value of the assets of such Person is less than its total liabilities (taking into account contingent and prospective liabilities), (b) such Person is unable to pay its debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities fall due or become absolute and matured, (c) such Person incurs debts that would be beyond its ability to pay as such debts mature, (d) such Person has unreasonably small capital with which to conduct the business in which it is engaged as such business is now conducted and is proposed to be conducted, (e) such Person is deemed to, or is declared to, be unable to pay its debts under applicable law, (f) such Person suspends or threatens in writing to suspend making payments on any of its debts, (g) a moratorium is declared in respect of any Indebtedness of such Person, or (h) as of such date of determination, to the extent such Person is a Borrower, based on information derived from the Borrower’s internal analysis of the assets held by the Borrower and contemplated to be held by the Borrower following such issuance and purchase of Notes and the Borrower’s reasonable forecasts in good faith (which forecasts shall be mutually acceptable to the Borrower and Agent (in each case, which acceptance shall not be unreasonably conditioned, withheld or delayed)), that it is expected that any Obligations under the Notes will not be fully and timely paid when due. The amount of contingent liabilities (such as litigation, guaranties and pension plan liabilities) at any time shall be computed as the amount that, in light of all the facts and circumstances existing at the time, represents the amount that would reasonably be expected to become an actual or matured liability. If a moratorium occurs, the ending of the moratorium will not remedy any Event of Default caused by that moratorium.
“Intellectual Property Rights” has the meaning provided in Section 7.12.
“Intellectual Property Security Agreements” means each trademark security agreement, each patent security agreement and each copyright security agreement, each in form and substance reasonably acceptable to the Agent, entered into from time to time by and among the applicable Credit Party or the applicable Guarantor and the Agent.
“Interagency Guidelines” means the Interagency Guidelines Establishing Information Security Guidelines, as set forth in Appendix B to 12 C.F.R. Part 30.
“Intercreditor Agreement” means that certain Second Amended and Restated Intercreditor Agreement dated on or about the Restatement ClosingFirst Amendment Effective Date and among Agent, the “Borrowers” (as defined therein), the “Collateral Agents” (as defined therein) and the “Grantors” (as defined therein).
“Interest Date” has the meaning provided in Section 2.2(a).
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“Interest Rate Spread” means, prior to July 1, 2019, twelve and three-quarters percent (12.75%) per annum and, on and after July 1, 2019, seven and one-half percent (7.5%) per annum.
“Interest Rate Spread Reduction Conditions” means the satisfaction of each of the following conditions:
(a)All of the Credit Parties have been in compliance with all of their obligations and covenants under this Agreement for the six (6) months prior to any date of determination and all of the Credit Parties’ representations and warranties are true, accurate and correct for the six (6) months prior to any date of determination; and
(b)The Borrower shall have satisfied the then applicable Performance Hurdle.

“Inventory” has the meaning provided in the UCC.
“Investment” means, with respect to any Person, any investment in another Person, whether by acquisition of any debt security or Equity Interest, by making any loan or advance, by becoming contingently liable in respect of obligations of such other Person or by making an Acquisition.
“IRS” means the Internal Revenue Service of the United States and any successor thereto.
“Issuance Date” has the meaning provided in Section 2.2(a).
“Joinder Agreement” has the meaning set forth in Section 8.24.
“Late Charge” has the meaning provided in Section 2.4.
“Lender” and “Lenders” has the meaning set forth in the introductory paragraph hereto.
“LIBOR Rate” means the London Interbank Offered Rate last quoted by Bloomberg for deposits of U.S. Dollars for a period of three months. If no such London Interbank Offered Rate exists, such rate will be the rate of interest per annum, as determined by the Agent at which deposits of U.S. Dollars in immediately available funds are offered on the last Business Day of each calendar month by major financial institutions reasonably satisfactory to the Agent in the London interbank market for a period of three months for the applicable principal amount on such date of determination.
“Lien” means any mortgage, lien, pledge, security interest, conditional sale or other title retention agreement, charge or other security interest or encumbrance of any kind, whether or not filed, recorded or otherwise perfected under applicable law, including any conditional sale or other title retention agreement or any lease or license in the nature thereof, any option or other agreement to sell or give a security interest in, or any agreement or arrangement having similar effect.
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“Loan to Value Ratio” means, as of any date of determination, the ratio of (a) the outstanding principal balance of the Notes to (b) the Borrowing Base, in each case, as of such date of determination.
“LTV Covenant Cure Amount” has the meaning provided in Section 8.1(a).
“LTV Covenant Cure Obligation” has the meaning provided in Section 8.1(a).
“LTV Covenant Default” has the meaning provided in Section 8.1(a).
“M&A Event” means a Change of Control of Elevate Credit Parent.
“Material Adverse Effect” means any material adverse effect on the business, properties, assets, operations, the Collateral, results of operations, or condition (financial or otherwise) or prospects of the Credit Parties and their Subsidiaries, taken as whole, or on the transactions contemplated hereby or by the other Transaction Documents, or on the authority or ability of any Credit Party or any of their respective Subsidiaries to fully and timely perform its obligations under any Transaction Document, in each case, as determined by the Agent in its sole but reasonable discretion.
“Material Contract” means any contract or other arrangement to which any Credit Party or any of its Subsidiaries is a party (other than the Transaction Documents) for which breach, nonperformance, cancellation, termination or failure to renew could reasonably be expected to have a Material Adverse Effect.
“Maturity Date” means the earlier of (a) January 1, 2024 and (b) such earlier date as the unpaid principal balance of all outstanding Notes becomes due and payable pursuant to the terms of this Agreement and the Notes.
“Maximum Commitment” means $350,000,000.
“Modified and Re-Aged Consumer Loans” means Consumer Loans that were modified at any time after origination and meet the definition of a trouble debt restructuring under GAAP.
“Monthly Maintenance Fees” has the meaning set forth in Section 2.10.
“Mortgage” means a mortgage or deed of trust, in form and substance reasonably satisfactory to the Agent, as it may be amended, supplemented or otherwise modified from time to time.
“Multiemployer Plan” means any Employee Benefit Plan which is a “multiemployer plan” as defined in Section 3(37) of ERISA.
“Net Proceeds” has the meaning set forth in Section 13.20.
“New Guarantor” has the meaning set forth in Section 8.24.
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“New Indebtedness Opportunity” has the meaning set forth in Section 8.19.
“Non-Excluded Taxes” (a) any and all Taxes, other than Excluded Taxes, and (b) to the extent not otherwise described in (a), Other Taxes.
“Notes” has the meaning set forth in Section 2.1.
“Notice of Purchase and Sale” means a notice given by the Borrower to the Agent pursuant to Section 2.1, in substantially the form of Exhibit F hereto.
“Obligations” means any and all obligations, liabilities and indebtedness, including without limitation, principal, interest (including, but not limited to, interest calculated at the Default Rate and post-petition interest in any proceeding under any Bankruptcy Law), Late Charges, Monthly Maintenance Fees, Prepayment Premium, and other fees, costs, expenses and other charges and other obligations arising under the Transaction Documents, of the Credit Parties to the Agent, the Holders and the Lenders or to any parent, affiliate or subsidiary of the Agent, such Holders or such Lenders of any and every kind and nature, howsoever created, arising or evidenced and howsoever owned, held or acquired, whether now or hereafter existing, whether now due or to become due, whether primary, secondary, direct, indirect, absolute, contingent or otherwise (including, without limitation, obligations of performance), whether several, joint or joint and several, and whether arising or existing under written or oral agreement or by operation of law.
“Optional Reborrowing” has the meaning set forth in Section 2.3(c).
“Optional Revolving Date” means the first or last calendar day of any calendar month in the first calendar quarter.
“Original Agreement” has the meaning set forth in the Recitals.
“Original Closing Date” means July 1, 2015.
“Original Jurisdiction” means, in relation to a Credit Party, the jurisdiction under whose laws that Credit Party is incorporated as of the Original Closing Date or, in the case of a New Guarantor, as of the date on which such New Guarantor becomes party to this Agreement as a New Guarantor.
“Other Borrowers” means the “Borrowers” under and as defined in the Other Financing Agreement.
“Other Financing Agreement” means the Fifth Amended and Restated Financing Agreement dated as of February 7, 2019 by and among Rise SPV, LLC, Elevate Credit Service, LLC, the other “Guarantors” from time to time party thereto, the “Lenders” from time to time party thereto and Victory Park Management, LLC, as administrative agent, as amended, restated, supplemented or otherwise modified from time to time.
“Other Taxes” has the meaning set forth in Section 2.6(b).
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“Outside Legal Counsel” means counsel selected by the Borrower from time to time.
“Participant Register” has the meaning set forth in Section 13.8.
“Participation Agreement” means the Participation Agreement dated as of July 1, 2015 by and between the Borrower and Republic Bank.
“Past Due Roll Rate” means the rate expressed as a percentage, as of the last day of any calendar month, of the ratio of (i) the aggregate outstanding principal balance of Consumer Loans (a) that have a principal payment that is one or more days past due but not greater than thirty days past due or (b) that did not have a principal payment that is one or more days past due in the calendar month immediately prior to the calendar month that includes the date of determination but became charged off in accordance with the Program Guidelines in the calendar month that includes such date of determination, in each case, in the calendar month that includes such date of determination to (ii) the aggregate outstanding principal balance of Consumer Loans that do not have a principal payment that became one or more days past due or is otherwise charged off in accordance with the Program Guidelines, in each case, as of the last day of the calendar month immediately prior to the calendar month that includes such date of determination.
“PBGC” means the Pension Benefit Guaranty Corporation or any successor thereto.
“Pension Plan” means any Employee Benefit Plan, other than a Multiemployer Plan, which is subject to Sections 412 and 430 of the Code or Section 302 of ERISA.
“Performance Hurdle” means that the Elevate Credit Parent has a minimum net income in the 2019 Fiscal Year of $22,000,000 and has a minimum net income in the 2020 Fiscal Year equal to an amount to be agreed upon by the Agent and each Credit Party no later than February 15, 2020.of $30,000,000.
“Permitted Dispositions” means (i) sales of Inventory in the ordinary course of business, (ii) disposals of obsolete, worn out or surplus equipment in the ordinary course of business, (iii) the granting of Permitted Liens, (iv) the licensing of patents, trademarks, copyrights and other Intellectual Property Rights in the ordinary course of business consistent with past practice, (v) subject to no adverse selection by the Credit Parties, dispositions and sales of Consumer Loans by the Credit Parties for which Lender has not provided funding for Borrower to purchase a participation interest therein, (vi) collection, sale, or disposition in the ordinary course of business of the Credit Parties of Consumer Loans that are not Eligible Consumer Loans and that have been settled or charged off, and (vii) reasonable expenditures of cash in the ordinary course of business or as otherwise approved by the board of directors (or similar governing body) of the applicable Credit Party.
“Permitted Indebtedness” means (i) Indebtedness of any (A) Domestic Credit Party to Elevate Credit Parent or any other Domestic Credit Party and (B) Foreign Subsidiary Credit Party to any other Foreign Subsidiary Credit Party; provided, in each case, all such Indebtedness shall be unsecured, (ii) Indebtedness in respect of netting services, overdraft protections and
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otherwise in connection with customary deposit accounts maintained by any Credit Party as part of its ordinary cash management program, (iii) performance guaranties in the ordinary course of business and consistent with historic practices of the obligations of suppliers, customers, franchisees and licensees of Elevate Credit Parent and its subsidiaries, (iv) guaranties by Elevate Credit Parent of Indebtedness of any subsidiary Credit Party or guaranties by any Domestic Credit Party of any Indebtedness of Elevate Credit Parent with respect, in each case, to Indebtedness otherwise permitted to be incurred pursuant to this definition, (v) Indebtedness which is secured by Liens permitted under clause (xii) of the definition of “Permitted Liens”, (vi) Indebtedness of any subsidiary Credit Party with respect to financing leases; provided, the principal amount of such Indebtedness shall not exceed at any time $5,000,000 for such subsidiary Credit Parties, (vii) purchase money Indebtedness of any subsidiary Credit Parties; provided, (A) any such Indebtedness shall be secured only by the asset acquired in connection with the incurrence of such Indebtedness and (B) the aggregate amount of all such Indebtedness shall not exceed at any time $2,500,000 in the aggregate for such subsidiary Credit Parties, (viii) other unsecured Indebtedness of any subsidiary Credit Party, which is subordinated to the Obligations on terms acceptable to Agent in its sole discretion in an aggregate amount not to exceed at any time $25,000,000, excluding any CSO Loans and (ix) guaranties by the Credit Parties in favor of the Agent, for the benefit of the Lenders and the Holders, hereunder and under the other Transaction Documents; provided, that no Indebtedness otherwise permitted by clauses (viii) or (ix) shall be assumed, created, or otherwise refinanced if an Event of Default (or event or circumstance that, with the passage of time, the giving of notice, or both, would become an Event of Default) has occurred or would result therefrom.
“Permitted Issuance Date” means any two Business Day of each calendar month during the term of this Agreement; provided, that no Permitted Issuance Date will be within 5 Business Days of another Permitted Issuance Date.
“Permitted Liens” means (i) Liens in favor of the Agent, for the benefit of the Lenders and the Holders, (ii) Liens for Taxes, assessments and other governmental charges not delinquent or if obligations with respect to such Taxes are being contested in good faith by appropriate proceedings promptly instituted and diligently conducted so long as such reserves or other appropriate provisions, if any, as shall be required by GAAP shall have been made for any such contested amounts, (iii) statutory Liens of landlords, banks (and rights of set off), of carriers, warehousemen, mechanics, repairmen, workmen and materialmen, and other Liens imposed by law (other than any such Lien imposed pursuant to §§401 (a)(29) or 412(n) of the Code or by ERISA), in each case incurred in the ordinary course of business (A) for amounts not yet overdue, or (B) for amounts that are overdue and that (in the case of any such amounts overdue for a period in excess of five (5) days) are being contested in good faith by appropriate proceedings, so long as such reserves or other appropriate provisions, if any, as shall be required by GAAP shall have been made for any such contested amounts, (iv) Liens incurred in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other types of social security, or to secure the performance of tenders, statutory obligations, surety and appeal bonds, bids, leases, government contracts, trade contracts, performance and return of money bonds and other similar obligations (exclusive of obligations for the payment of borrowed money or other Indebtedness), so long as no foreclosure, sale or similar proceedings
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have been commenced with respect to any portion of the Collateral on account thereof, (v) easements, rights of way, restrictions, encroachments, and other minor defects or irregularities in title, in each case which do not and will not interfere in any material respect with the value or use of the property to which such Lien is attached or with the ordinary conduct of the business of such Person, (vi) any interest or title of a lessor or sublessor under any lease of real estate, (vii) Liens solely on any cash earnest money deposits made by such Person in connection with any letter of intent or purchase agreement permitted hereunder, (viii) purported Liens evidenced by the filing of precautionary UCC financing statements relating solely to operating leases of personal property entered into in the ordinary course of business, (ix) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods, (x) any zoning or similar law or right reserved to or vested in any governmental office or agency to control or regulate the use of any real property, in each case which do not and will not interfere with or affect in any material respect the use, value or operations of any real estate assets or in the ordinary conduct of the business of such Person, (xi) licenses of patents, trademarks and other intellectual property rights granted by such Person in the ordinary course of business and not interfering in any respect with the ordinary conduct of the business of such Person, (xii) Liens (A) which are junior in priority to those of the Agent, for the benefit of the Lenders and the Holders, pursuant to a subordination agreement acceptable to the Agent, (B) which may not be foreclosed upon without the consent of the Agent, (C) which attach only to goods and (D) which, in the aggregate, do not secure Indebtedness in excess of $1,000,000, and (xiii) Liens securing Indebtedness permitted pursuant to clause (ix) of the definition of Permitted Indebtedness; provided, any such Lien shall encumber only the asset acquired with the proceeds of such Indebtedness.
“Permitted Redemption” means the redemption of Notes permitted pursuant to Section 2.3(a).
“Permitted Redemption Amount” has the meaning set forth in Section 2.3(a)(i).
“Permitted Redemption Date” means the date on which the Borrower has elected to redeem the Notes in accordance with Section 2.3(a).
“Permitted Redemption Notice” has the meaning set forth in Section 2.3(a)(i).
“Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity and a government or any department or agency thereof.
“Plan” means any Multiemployer Plan or Pension Plan.
“Prepayment Premium” means the premium to be paid in connection with certain prepayments of the Notes pursuant to this Agreement, including pursuant to Section 2.3(a) and Section 2.3(b), but specifically excluding any mandatory prepayment pursuant to Sections 2.3(b)(ii), 2.3(b)(v), 2.3(b)(vi) or 2.3(b)(vii) (solely to the extent such excess required to be applied as a prepayment relates to a prepayment under Sections 2.3(b)(ii), 2.3(b)(v) or 2.3(b)(vi)). Such prepayment premium shall be equal to, with respect to such prepayment to be
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made or made during any period set forth in the table below, the product of (a) the percentage set forth beside such period in such table and (b) the greater of (i) the aggregate principal amount of the Notes then prepaid or required to be prepaid (excluding the principal amount of any Optional Reborrowings repaid one hundred eighty (180) or more days prior to the applicable prepayment) or (ii) the aggregate principal amount of the Notes prior to an Optional Reborrowing pursuant to Section 2.3(c):
Period Prepayment Premium
January 1, 2022 through and including December 31, 2022 5.0%
January 1, 2023 through and including December 31, 2023 2.0%
    ;provided, that such prepayment premium in connection with a prepayment of the Notes pursuant to Section 2.3(a) in connection with an M&A Event shall equal an amount equal to the sum of (i) the product of (A) the number of days from the date of such prepayment until January 1, 2022 divided by 360 days, (B) the product of the greater of (x) the highest aggregate principal amount of the Notes at any time prior to such prepayment (excluding the principal amount of any Optional Reborrowings repaid one hundred eighty (180) or more days prior to the applicable prepayment) or (y) the aggregate principal amount of the Notes prior to an Optional Reborrowing pursuant to Section 2.3(c) and (C) the Current Interest Rate, and (ii) the product of (A) the greater of (x) the highest aggregate principal amount of the Notes at any time prior to such prepayment (excluding the principal amount of any Optional Reborrowings repaid one hundred eighty (180) or more days prior to the applicable prepayment) or (y) the aggregate principal amount of the Notes prior to an Optional Reborrowing pursuant to Section 2.3(c) and (B) five percent (5%).

“Principal Only Assignment” has the meaning set forth in Section 13.8.
“Proceeding” has the meaning set forth in Section 7.15.
“Program” means the lending program for the solicitation, marketing, and origination of Consumer Loans pursuant to Program Guidelines.
“Program Guidelines” means those guidelines established by Republic Bank, attached as Schedule 1.1 hereto, for the administration of the Program, as amended, modified or supplemented from time to time by Republic Bank with the prior written consent of the Borrower to the extent such consent is required pursuant to the Participation Agreement; provided, the Borrower will not provide such consent without the prior written consent of the Agent.
“Property” means any right or interest in or to property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible, including, without limitation, Capital Stock.
“Qualified Funding Failure” has the meaning set forth in Section 2.3(a)(iii).
“Receivables” means the indebtedness and other obligations owed to the Borrower, Elevate Credit Parent or any other Credit Party in connection with any and all liens, title
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retention and security agreements, chattel mortgages, chattel paper, bailment leases, installment sale agreements, instruments, consumer finance paper and/or promissory notes securing and evidencing unsecured multi-pay consumer installment loans made, and/or time sale transactions or acquired by a Credit Party which were originated in accordance with the Program Guidelines.
“Register” has the meaning set forth in Section 2.8.
“Related Parties” of any Person means such Person’s Affiliates or any of its respective partners, directors, agents, employees and controlling persons.
“Release Agreement” means that certain Release Agreement, dated on or about the Restatement Closing Date, among Agent, the Credit Parties, and the Credit Card Borrower (as defined in the Release Agreement).
“Released Parties” has the meaning set forth in Section 13.19.
“Releasing Parties” has the meaning set forth in Section 13.19.
“Relevant Jurisdiction” means, in relation to a Credit Party, (a) its Original Jurisdiction; (b) any jurisdiction where any asset subject to or intended to be subject to the Collateral to be created by it is situated; (c) any jurisdiction where it conducts its business; and (d) the jurisdiction whose laws govern the perfection of any of the Security Documents entered into by it.
“Republic Bank” means Republic Bank & Trust Company, a Kentucky banking corporation, and its successors and assigns.
“Required Lenders” means at any time (a) the Lenders then holding more than fifty percent (50%) of the aggregate Maximum Commitments then in effect plus the aggregate unpaid principal balance of the Notes then outstanding, or (b) if the Maximum Commitments have been terminated, the Holders of Notes then holding more than fifty percent (50%) of the aggregate unpaid principal balance of the Notes then outstanding.
“Required Prepayment Date” has the meaning set forth in Section 2.3(d).
“Requirements” means all applicable federal and state laws and regulations related, directly or indirectly, to the following: credit (including, without limitation, Consumer Credit); servicing; disclosures, information security and privacy and regulations and industry guidance and requirements (including, but not limited to, guidance issued by the Payment Card Industry); the USA Patriot Act; the Office of Foreign Asset Controls’ rules and regulations; the Interagency Guidelines; debt collection and debt collection practices laws and regulations applicable to the Credit Parties or the Program; the federal Truth in Lending Act; the federal Electronic Funds Transfer Act; the federal Equal Credit Opportunity Act; the federal Gramm-Leach-Bliley Act; and the federal Fair Debt Collection Practices Act.
“Restatement Closing” has the meaning set forth in Section 3.1.
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“Restatement Closing Date” has the meaning set forth in Section 3.1.
“Restatement Closing Note” has the meaning set forth in Section 2.1.
“Restatement Closing Note Purchase Price” has the meaning set forth in Section 3.1.
“Restatement Fee” means an amount equal to $2,390,000.
“Reviewing Party” or “Reviewing Parties” has the meaning set forth in Section 8.20(a).
“Revolving Amount” has the meaning set forth in Section 2.3(c).
“Revolving Conditions” means the satisfaction of each of the following conditions as of any date of determination:
(a)The Borrower is in compliance with all of its obligations and covenants under this Agreement and all of the Borrower’s representations and warranties are true, accurate and correct; and
(b)No Event of Default (or event or circumstance that, with the passage of time, the giving of notice, or both, would become an Event of Default) has occurred or would result therefrom.

“ROFR Notice” has the meaning set forth in Section 8.19.
“Schedules” has the meaning set forth in Article 7.
“Security Agreement” means a Pledge and Security Agreement, substantially in the form attached hereto as Exhibit B.
“Security Documents” means the Security Agreement, the Intellectual Property Security Agreements and all other instruments, documents and agreements delivered by any of the Credit Parties, any of their respective Subsidiaries, Affiliates or any equityholder of any of the Credit Parties in order to grant to Agent (on behalf of the Lenders), any Lender or any Holder a Lien on any real, personal or mixed Property of such Person as security for the Obligations.
“State Force Majeure Event” means any regulatory event or regulatory change in any state in which the Credit Parties originate Consumer Loans that would prohibit or make it illegal for the Credit Parties to continue to originate or collect Consumer Loans in such state pursuant to the Program or another program of a type similar to the Program.
“State Force Majeure Paydown Amount” means, as of any date of determination, an amount designated in writing by the Borrower to the Agent within ten (10) days following such date equal to the aggregate outstanding principal amount of the Notes on such date multiplied by a fraction, the numerator of which shall be equal to the portion of such aggregate outstanding principal amount for which the proceeds thereof were used to originate Consumer Loans that remain outstanding on such date to borrowers residing in state(s) affected by a State Force
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Majeure Event (which amount with respect to each such Consumer Loan shall not exceed the outstanding principal amount of such Consumer Loan on such date) and the denominator of which shall be equal to the aggregate outstanding principal amount of the US Notes on such date.
“Subsequent Closing” has the meaning set forth in Section 3.2.
“Subsequent Closing Date” has the meaning set forth in Section 3.2.
“Subsequent Closing Note Purchase Price” has the meaning set forth in Section 3.2.
“Subsidiaries” has the meaning set forth in Section 7.1.
“Swap Rate” means the forward swap rate based on the London Interbank Offered Rate last quoted by Bloomberg for deposits of U.S. Dollars for a period of three months, and taking into account the time period between the Issuance Date and the Maturity Date as determined by the Agent in its sole reasonable discretion based on the Bloomberg SWPM calculator. If no such London Interbank Offered Rate exists, such rate will be the rate of interest per annum, as determined by the Agent at which deposits of U.S. Dollars in immediately available funds are offered on the last Business Day of each calendar month by major financial institutions reasonably satisfactory to the Agent in the London interbank market for a period of three months for the applicable principal amount on such date of determination.
“Taking” means any taking of any property of any Credit Party or any of their Subsidiaries or any portion thereof, in or by condemnation or other eminent domain proceedings pursuant to any law, general or special, or by reason of the temporary requisition of the use of such assets or any portion thereof, by any Governmental Authority, civil or military (i) in excess of $250,000 in the aggregate for any Fiscal Year or (ii) that results, either individually or in the aggregate, in a Material Adverse Effect.
“Taxes” means any and all current or future (a) foreign, federal, state or local income, gross receipts, franchise, estimated, alternative minimum, add-on minimum, sales, use, transfer, registration, value added, excise, parking, unclaimed property/escheatment, natural resources, severance, stamp, occupation, occupancy, ad valorem, premium, windfall profit, environmental, customs, duties, real property, personal property, capital stock, social security, unemployment, disability, payroll, license, employee or other withholding, or other tax of any kind whatsoever, (b) any liability for the payment of amounts of the type described in clause (a) hereof as a result of being at any time a transferee of, or a successor in interest to, any person, and (c) any interest, penalties or additions to tax or additional amounts (whether disputed or not) in respect of the foregoing.
“Tax Return” means any return, declaration, report, claim for refund, or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof.
“Total Cash” means, as of any date of determination, the sum of all unrestricted cash and Cash Equivalent Investments of Elevate Credit Parent and all other Credit Parties. For purposes
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of clarification, unrestricted cash includes all cash of the Credit Parties that is being held by an ACH provider prior to remittance to a Credit Party.
“Trailing Excess Spread” means, as of any date of determination, the average of the Excess Spread in (i) the calendar month immediately prior to the calendar month that includes such date of determination and (ii) the calendar month that includes such date of determination.
“Trailing Four Month Charge Off Rate” means, as of any date of determination, the average, for each of the three (3) immediately preceding completed months, of the Four Month Charge Off Rate.
“Trailing Past Due Roll Rate” means, as of any date of determination, the average, of the Past Due Roll Rate in (i) the calendar month immediately prior to the calendar month that includes such date of determination and (ii) the calendar month that includes such date of determination.
“Trailing Twelve Month Charge Off Rate” means, as of any date of determination, the average, for each of the three (3) immediately preceding completed months, of the Twelve Month Charge Off Rate.
“Transaction Documents” has the meaning set forth in Section 7.2.
“Twelve Month Charge Off Rate” means, as of any date of determination and with respect to any Vintage Pool, the ratio of (i) the aggregate Charge Off amount in such Vintage Pool during the period beginning on the applicable date of origination through the end of the month of such origination and ending on the twelfth consecutive calendar month, beginning with such month of origination to (ii) the aggregate principal balance of such Vintage Pool at the time of origination.
“UCC” has the meaning set forth in Section 7.13.
“UK Credit Party” means a Credit Party organized under the laws of the United Kingdom.
“US Person” means any Person that is a “United States Person” as defined in Section 7701(a)(30) of the Code.
“US Tax Compliance Certificate” has the meaning set forth in Section 2.6(d).
“Vintage Pool” means and refers to, at any given time, all Consumer Loans that were originated by Republic Bank in a particular calendar month. By way of example, and not by way of limitation, all Consumer Loans that were originated in December 2018 shall constitute one Vintage Pool for the calendar month that ended on December 31, 2018; all Consumer Loans that were originated in January 2019 shall constitute one Vintage Pool for the calendar month that ended on January 31, 2019; all Consumer Loans that were originated in February 2019 shall constitute one Vintage Pool for the calendar month that ended on February 28, 2019; and so on.
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“Waivable Mandatory Prepayment” has the meaning set forth in Section 2.3(d).
“Withholding Agent” means the Borrower, any Credit Party or the Agent.
Section 1.2    Terms 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”. Unless the context requires otherwise, (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as 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 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 Agreement and (e) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any right or interest in or to assets and properties of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible. References in this Agreement to “determination” by the Agent include good faith estimates by the Agent (in the case of quantitative determinations) and good faith beliefs by the Agent (in the case of qualitative determinations).
Section 1.3Accounting and Other Terms. Unless otherwise expressly provided herein, each accounting term used herein shall have the meaning given it under GAAP applied on a basis consistent with those used in preparing the financial statements delivered to Agent pursuant to Section 8.2. Notwithstanding any other provision contained herein, all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to herein shall be made, without giving effect to any election under Accounting Standards Codification 825-10 (or any other Financial Accounting Standard having a similar result or effect) to value any Indebtedness or other liabilities of any Credit Party or any Subsidiary of any Credit Party at “fair value”.
Article 2    
BORROWER’S AUTHORIZATION OF ISSUE

Section 2.1Senior Secured Term Notes.
(a)The Borrower has authorized (a) the issuance to the Lenders on the Restatement Closing Date of senior secured term notes in the aggregate principal amount of $239,000,000 (the “Restatement Closing Notes”) and (b) the issuance to the Lenders after the Restatement Closing Date of additional senior secured term notes in the aggregate principal amount not to exceed, together with the aggregate principal amount of the Restatement Closing
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Notes, the Maximum Commitment, in each case of the foregoing clauses (a) and (b), to be dated the date of issuance thereof, to mature on the Maturity Date, to bear interest as provided in Section 2.2 below and to be in the form of Exhibit A hereto (the “Notes”). The commitment of each Lender to fund its pro rata share of Notes issued by the Borrower as of the Restatement Closing Date is set forth opposite such Lender’s name in column three (3) of Section 1 of the Schedule of Lenders attached hereto (such amount as the same may be reduced or increased from time to time in accordance with this Agreement, being referred to herein as such Lender’s “Commitment”). The Borrower shall repay the outstanding principal balance of the Notes in full in cash on the Maturity Date, unless accelerated in accordance with Section 10.2 or redeemed or prepaid in accordance with Section 2.3. The proceeds of future purchases of Notes by the Lenders shall be disbursed as the Borrower shall direct on each issuance date of such Note, upon the submission of such evidence as the Agent shall request to verify the satisfaction of the conditions set forth in Section 5.2 below (including, without limitation, a Borrowing Base Certificate delivered in accordance with Section 5.2(g) prior to such disbursement); provided, however, that, after giving effect to any such issuance and purchase of Notes, the aggregate principal amount of all Notes shall not exceed the Maximum Commitment. The Borrower shall deliver to or shall procure the delivery to the Agent a Notice of Purchase and Sale setting forth each proposed issuance of Notes not later than noon, Chicago time, on (A) the fifteenth (15th) day prior to the proposed issuance date upon which the Borrower desires to issue Notes for purchase by the Lenders in an amount of $10,000,000 or less or (B) the thirtieth (30th) day prior to the proposed issuance date upon which the Borrower desires to issue Notes for purchase by the Lenders in an amount of greater than $10,000,000, in each case, or such earlier date as shall be agreed to by the applicable Lenders; provided, further, however, that the Borrower shall be entitled to deliver only two (2) Notices of Purchase and Sale during each calendar month. Each Notice of Purchase and Sale required hereunder (i) shall be irrevocable, (ii) shall specify the amount of the proposed issuance (which shall be in increments of not less than $100,000) under the Notes, (iii) shall specify the proposed issuance date for such proposed issuance, which shall be a Permitted Issuance Date and (iv) shall specify wire transfer instructions in accordance with which such issuance under the Notes shall be funded, to the extend purchased by the Lenders. Upon receipt of any such Notice of Purchase and Sale, the Agent shall promptly notify each Lender thereof and of the amount of such Lender’s pro rata share of the proposed issuance (provided, that at the election of the Agent and each applicable Lender, such Lender(s) may agree to purchase such proposed issuance of Notes on a non pro rata basis in amounts acceptable to Agent and such Lender(s) in their sole discretion and in the event of any such non pro rata purchase by such Lender(s), (i) such Lender(s) purchasing less than their pro rata share of the proposed issuance of Notes shall be automatically deemed to have assigned to the applicable Lender(s) purchasing more than their pro rata share of the proposed issuance of Notes (and such Lender(s) purchasing more than their pro rata share of the proposed issuance of Notes shall be automatically deemed to have assumed) a percentage interest in the respective Commitments of such Lender(s) purchasing less than their pro rata share of the proposed issuance of Notes in amounts sufficient to give effect to such non pro rata purchase and such assignment shall otherwise be deemed to be made pursuant to, and in accordance with, the terms of Section 13.8 without further action or documentation by any Person and (ii) the Schedule of Lenders attached hereto shall be updated by Agent to reflect such assignments of the Commitments) and, subject to the terms and conditions of this Agreement and in reliance upon the representations and
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warranties of the Credit Parties contained herein, each Lender holding a Commitment shall fund its pro rata share of the proposed issuance of the Notes (subject to, and except as set forth in, the preceding parenthetical in this sentence) on the applicable Permitted Issuance Date in immediately available funds in accordance with the terms of such Notice of Purchase and Sale. Notwithstanding anything to the contrary herein, for purposes of clarification, it is hereby agreed that during each calendar month there shall be only, and the Borrower shall not be entitled to specify more than, two (2) Permitted Issuance Dates.
Section 2.2    Interest. The Borrower shall pay interest on the unpaid principal amount of the Notes, in each case, at the rates, time and manner set forth below:
(a)Rate of Interest. Each Note shall bear interest on the unpaid principal amount thereof from the date issued through the date such Note is paid in full in cash (whether upon final maturity, by redemption, prepayment, acceleration or otherwise) at the Current Interest Rate. Interest on each Note shall be computed on the basis of a 360-day year and actual days elapsed and, subject to Section 2.2(b), shall be payable monthly, in arrears, on the third (3rd) Business Day following the last day of each calendar month during the period beginning on the date such Note is issued (the “Issuance Date”) and ending on, and including, the date on which the Obligations under such Note are paid in full (each, an “Interest Date”).
(b)Interest Payments. Interest on each Note shall be payable on each Interest Date or at any such other time the Notes become due and payable (whether by acceleration, redemption or otherwise) by the Borrower to the Agent, for the account of the record holder of such Note, on the applicable Interest Date. Each Interest Date shall be considered the last day of an accrual period for U.S. federal income tax purposes. Notwithstanding anything herein to the contrary, any payment of accrued but unpaid interest due and owing on any Note shall be made by cash only by wire transfer of immediately available funds.

(c)Default Rate. Upon the occurrence of any Event of Default, the Notes shall bear interest (including post-petition interest in any proceeding under any Bankruptcy Law) on the unpaid principal amount thereof at the Default Rate from the date of such Event of Default through and including the date such Event of Default is waived. In the event that such Event of Default is subsequently waived, the adjustment referred to in the preceding sentence shall cease to be effective as of the date of such waiver; provided that interest as calculated and unpaid at the Default Rate during the continuance of such Event of Default shall continue to be due to the extent relating to the days after the occurrence of such Event of Default through and including the date on which such Event of Default is waived. All such interest shall be payable on demand of the Agent.

(d)Savings Clause. In no contingency or event shall the interest rate charged pursuant to the terms of this Agreement exceed the highest rate permissible under any law which a court of competent jurisdiction shall, in a final determination, deem applicable hereto. In the event that such a court determines that the Lenders or Holders have received interest hereunder in excess of the highest applicable rate, the amount of such excess interest shall be applied
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against the principal amount of the Notes then outstanding to the extent permitted by applicable law, and any excess interest remaining after such application shall be refunded promptly to the Borrower.

(e)Interest Payment Reduction. On or after January 1, 2020, the Current Interest Rate shall be reduced by one-quarter percent (0.25%) if the Interest Rate Spread Reduction Conditions are satisfied during the 2019 calendar year. On or after January 1, 2021, the Current Interest Rate shall be reduced by one-quarter percent (0.25%) if the Interest Rate Spread Reduction Conditions are satisfied during the 2020 calendar year. For the avoidance of doubt, if the Interest Rate Spread Reduction Conditions were satisfied during both the 2019 calendar year and the 2020 calendar year, the total reduction in the Current Interest Rate shall be one-half percent (0.50%).

Section 2.3 Redemptions and Payments.
(a)Permitted Redemption.
(i)The Borrower may at any time after January 1, 2022, at its option, elect to pay to the Agent, on behalf of the Holders, the Permitted Redemption Amount (as defined below), on the Permitted Redemption Date, by redeeming the aggregate unpaid principal amount of all Notes, in whole (and not in part), whereupon the Commitments of each Lender shall automatically and permanently be terminated (the “Permitted Redemption”); provided that, a Permitted Redemption may occur prior to January 1, 2022 only in connection with an M&A Event. The Borrower may not, at any time, redeem the Notes in part. On or prior to the date which is the thirtieth (30th) calendar day prior to the proposed Permitted Redemption Date, the Borrower shall deliver written notice (the “Permitted Redemption Notice”) to the Agent stating (i) that the Borrower elects to redeem pursuant to the Permitted Redemption and (ii) the proposed Permitted Redemption Date. The “Permitted Redemption Amount” shall be equal to (A) the aggregate unpaid outstanding principal amount of all Notes, (B) all accrued and unpaid interest with respect to such principal amount and all accrued and unpaid fees, (C) all accrued and unpaid Late Charges with respect to such Permitted Redemption Amount, (D) the Prepayment Premium and (E) all other amounts due under the Transaction Documents. The Credit Parties acknowledge and agree that the Prepayment Premium represents bargained for consideration in exchange for the right and privilege to redeem the Notes.
(ii)A Permitted Redemption Notice delivered pursuant to this subsection shall be irrevocable; provided that such Permitted Redemption Notice may be revoked if for any reason the applicable M&A Event covered by such Permitted Redemption Notice is terminated prior to closing. If the Borrower elects to redeem the Notes pursuant to a Permitted Redemption under Section 2.3(a), then the Permitted Redemption Amount which is to be paid to the Agent, on behalf of the Holders, on the Permitted Redemption Date shall be redeemed by the Borrower on the Permitted Redemption Date, and the Borrower shall pay to the Agent, on behalf of the Holders, on
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the Permitted Redemption Date, by wire transfer of immediately available funds, an amount in cash equal to the Permitted Redemption Amount.

(iii)Notwithstanding the foregoing and anything to the contrary herein, (A) if a Federal or Multi-State Force Majeure Event shall have occurred or (B) if the Lenders shall fail to purchase additional Notes requested by the Borrower after the Restatement Closing Date in accordance with Section 2.1 and provided that all conditions of such purchase set forth in Section 5.2 shall have been satisfied at the time thereof (a “Qualified Funding Failure”), then the Borrower shall have the right, exercisable upon at least sixty (60) calendar days’ prior written notice to the Agent, to consummate a Permitted Redemption at a price equal to the Permitted Redemption Amount excluding the Prepayment Premium, which Permitted Redemption shall otherwise be made in accordance with the provisions of Section 2.3(a)(i) hereof; provided, that such right to consummate a Permitted Redemption at a price equal to the Permitted Redemption Amount excluding the Prepayment Premium shall expire (x) in the case of the foregoing clause (A), upon the cessation of such Federal or Multi-State Force Majeure Event or (y) in the case of the foregoing clause (B), upon written notice from the Agent to the Borrower, given no later than ten (10) calendar days after the Agent’s receipt of the Borrower’s notice of redemption under the foregoing Section 2.3(a)(iii)(B) stating that the Lenders are thereafter willing and able to purchase additional Notes requested by the Borrower, in accordance with Section 2.1 and provided that all conditions of such purchase set forth in Section 5.2 shall have been satisfied at the time thereof; provided further, that, in the case of a Permitted Redemption in respect of the foregoing clause (A), if such Federal or Multi-State Force Majeure Event ceases within the earlier of (i) one (1) year following such Permitted Redemption or (ii) July 1, 2021, the Credit Parties shall give the Agent and Lenders the right to participate in any new Program or substantially similar program to the Program. For purposes of clarification, prior to the expiration of the ten (10) calendar day (or longer, as the case may be) notice of purchase pursuant to the foregoing Section 2.3(a)(iii)(B), the Agent may deliver notice to the Borrower that the Lenders are willing and able to purchase additional Notes and provided that all conditions of such purchase set forth in Section 5.2 shall have been satisfied at the time thereof, whereupon such right to consummate a Permitted Redemption at a price equal to the Permitted Redemption Amount excluding the Prepayment Premium shall automatically terminate, but the Borrower shall at all times thereafter retain the right to consummate a Permitted Redemption at a price equal to the Permitted Redemption Amount including the Prepayment Premium (if applicable), which Permitted Redemption shall otherwise be made in accordance with the provisions of Section 2.3(a)(i) hereof. The provisions of this Section 2.3(a)(iii) set forth the exclusive rights and remedies of the Credit Parties to seek or obtain damages or any other remedy or relief from the Agent or any Lender with respect to any Qualified Funding Failure.

(b)Mandatory Prepayments.
(i)On the date of receipt by any Credit Party or any of their Subsidiaries of any net cash proceeds in excess of $200,000 in the aggregate during any
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Fiscal Year from any Asset Sales (other than Permitted Dispositions), the Borrower shall prepay the Notes as set forth in Section 2.3(e) in an aggregate amount equal to 100% of such net cash proceeds.
(ii)On the date of receipt by any Credit Party or any of their Subsidiaries, or the Agent as loss payee, of any net cash proceeds from any Destruction or Taking, the Borrower shall prepay the Notes as set forth in Section 2.3(e) in an aggregate amount equal to 100% of such net cash proceeds; provided, so long as no Event of Default (or event or circumstance that, with the passage of time, the giving of notice, or both, would become an Event of Default) shall have occurred and be continuing on the date of receipt thereof or caused thereby, the Borrower shall have the option to apply such net cash proceeds, prior to the date that is 90 days following receipt thereof, for purposes of the repair, restoration or replacement of the applicable assets thereof.

(iii)On the date of receipt by any Credit Party or any of their Subsidiaries of any net cash proceeds in excess of $5,000,000 in the aggregate during the term of this Agreement from a capital contribution by any Person (other than an Elevate Credit Subsidiary) to, or the issuance to any Person (other than a Credit Party or an Elevate Credit Subsidiary) of any Equity Interests of any Credit Party or any of their Subsidiaries, the Borrower shall prepay the Notes as set forth in Section 2.3(e) in an aggregate amount equal to 100% of such net cash proceeds.

(iv)On the date of receipt by any Credit Party or any of their Subsidiaries of any net cash proceeds from the incurrence of any Indebtedness (other than with respect to Permitted Indebtedness) of any Credit Party or any of their Subsidiaries, the Borrower shall prepay the Notes as set forth in Section 2.3(e) in an aggregate amount equal to 100% of such net cash proceeds.

(v)On the date of receipt by any Credit Party or any of their Subsidiaries of any Extraordinary Receipts, the Borrower shall prepay the Notes as set forth in Section 2.3(e) in an aggregate amount equal to 100% of such Extraordinary Receipts.

(vi)If at any time the then outstanding principal balance of Notes shall exceed the Maximum Commitment, the Borrower shall immediately prepay the Notes as set forth in Section 2.3(e) in an amount sufficient to eliminate such excess.

(vii)Concurrently with any prepayment of the Notes pursuant to this Section 2.3(b), the Borrower shall deliver to the Agent a certificate of an authorized officer thereof demonstrating the calculation of the amount of the applicable proceeds. In the event that the Credit Parties shall subsequently determine that the actual amount of such proceeds exceeded the amount set forth in such certificate (including as a result of the conversion of non-cash proceeds into cash), the Borrower shall promptly make an additional prepayment of all the Notes in an amount equal to such excess (or applicable
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percentage thereof), and the Borrower shall concurrently therewith deliver to the Agent a certificate of an authorized officer thereof demonstrating the derivation of such excess.

(c)Optional Reborrowing. Subject to the satisfaction of the Revolving Conditions, the Borrower may, at its option once per year on an Optional Revolving Date, elect to pay to the Agent, on behalf of the Holders, the Revolving Amount (as defined below) (the “Optional Reborrowing”). The “Revolving Amount” shall be equal to (A) up to twenty percent (20%) of the aggregate unpaid outstanding principal amount of all Notes, (B) all accrued and unpaid interest with respect to such principal amount repaid and all accrued and unpaid fees and (C) all accrued and unpaid Late Charges with respect to such Revolving Amount. On or prior to the date which is the sixtieth (60th) calendar day prior to the proposed Optional Revolving Date, the Borrower shall deliver written notice to the Agent stating (i) that the Borrower elects to make a payment in connection with an Optional Reborrowing and (ii) the proposed Revolving Amount. The Commitments of each Lender shall not automatically and permanently be terminated or decreased as a result of a payment by Borrower of any Revolving Amount pursuant to this Section 2.3(c) and Borrower may reborrow any Revolving Amount in accordance with Section 2.1; provided that reborrowing any such Revolving Amount within one hundred eighty (180) days shall not cause the Current Interest Rate to decrease.
(d)Waiver of Mandatory Prepayments. Anything contained in Section 2.3(b) to the contrary notwithstanding, in the event the Borrower is required to make any mandatory prepayment (a “Waivable Mandatory Prepayment”) of the Notes, not less than three (3) Business Days prior to the date (the “Required Prepayment Date”) on which the Borrower is required to make such Waivable Mandatory Prepayment, the Borrower shall notify the Agent of the amount of such prepayment, and the Agent shall promptly thereafter notify each Holder holding an outstanding Note of the amount of such Holder’s pro rata share of such Waivable Mandatory Prepayment and such Holder’s option to refuse such amount. Each such Holder may exercise such option by giving written notice to the Borrower and the Agent of its election to do so on or before the first Business Day prior to the Required Prepayment Date (it being understood that any Holder which does not notify the Borrower and the Agent of its election to exercise such option on or before the first Business Day prior to the Required Prepayment Date shall be deemed to have elected, as of such date, not to exercise such option). On the Required Prepayment Date, the Borrower shall pay to the Agent the amount of the Waivable Mandatory Prepayment, which amount shall be applied in an amount equal to that portion of the Waivable Mandatory Prepayment payable to those Holders that have elected not to exercise such option, to prepay the Notes of such Holders.

(e)Application of Mandatory Prepayments; Prepayment Premium. All mandatory prepayments made pursuant to Section 2.3(b) and not waived pursuant to Section 2.3(d) shall be made to the Agent, for the account of the Holders, as determined by the Agent in its sole discretion. Concurrently with each mandatory prepayment made pursuant to (i) Section 2.3(b) (other than in accordance with Section 2.3(b)(vi)), the Commitment of each Lender shall, at the election of Agent to be given to Borrower within five (5) Business Days after receipt of such mandatory prepayment (or automatically upon the occurrence of any Event of Default described in Section 10.1(c) or Section 10.1(d)), permanently be reduced by the amount of such
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prepayment and (ii) Section 2.3(b) (other than in accordance with Sections 2.3(b)(ii), 2.3(b)(v), 2.3(b)(vi) or 2.3(b)(vii) (solely to the extent such excess required to be applied as a prepayment relates to a prepayment under Sections 2.3(b)(ii), 2.3(b)(v) or 2.3(b)(vi))), the Borrower shall also pay to the Agent, for the ratable benefit of the Holders, the Prepayment Premium in respect of the Notes repaid or redeemed in connection with such mandatory prepayment.

Section 2.4    Payments. Whenever any payment of cash is to be made by any Credit Party to any Person pursuant to this Agreement, the Notes or other Transaction Document, such payment shall be made in lawful money of the United States of America by a check drawn on the account or accounts of such Credit Party and sent via overnight courier service to such Person at such address as previously provided to the Borrower in writing (which address, in the case of each of the Lenders, shall initially be as set forth on the Schedule of Lenders attached hereto); provided that (i) the Agent, any Holder or any Lender may elect to receive a payment of cash via wire transfer of immediately available funds by providing the Borrower with prior written notice setting out such request and the Agent’s, such Holder’s or such Lender’s wire transfer instructions and (ii) Credit Parties may elect to make a payment of cash via wire transfer of immediately available funds in accordance with wire transfer instructions provided by the Agent, each Holder and each Lender upon request therefor. Whenever any amount expressed to be due by the terms of this Agreement or any Note is due on any day which is not a Business Day, the same shall instead be due on the next succeeding day which is a Business Day and, in the case of any Interest Date which is not the date on which the applicable Note is paid in full in cash, the extension of the due date thereof shall not be taken into account for purposes of determining the amount of interest due on such date. Any amount due under the Transaction Documents (other than principal and interest, if the same are already accruing interest at the Default Rate), which is not paid when due shall result in a late charge being incurred and payable by the Borrower in an amount equal to accrued interest at the Default Rate from the date such amount was due until the same is paid in full in cash (“Late Charge”). Such Late Charge shall continue to accrue post-petition in any proceeding under any Bankruptcy Law.
Section 2.5    Dispute Resolution. Except as otherwise provided herein, in the case of a dispute as to the determination of any amounts due and owing pursuant to a redemption under Section 2.3 or otherwise or any other similar or related amount, the Borrower shall submit the disputed determinations or arithmetic calculations via facsimile within three (3) Business Days of receipt, or deemed receipt, of the applicable notice of dispute to the Agent. If the Agent and the Borrower are unable to agree upon such determination or calculation within three (3) Business Days of such disputed determination or arithmetic calculation being submitted to the Agent, then the Borrower shall, within three (3) Business Days submit via facsimile the disputed determinations or arithmetic calculations to an independent outside national accounting firm specified by Agent. The Borrower, at the Borrower’s expense, shall cause the accountant to perform the determinations or calculations and notify the Agent of the results no later than five (5) Business Days from the time it receives the disputed determinations or calculations. Such accountant’s determination or calculation, as the case may be, shall be binding upon all parties absent demonstrable error.
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Section 2.6    Taxes.
(a)Any and all payments by or on behalf of the Credit Parties hereunder and under any other Transaction Document shall be made free and clear of and without deduction or withholding for any and all current or future Taxes, levies, imposts, deductions or charges unless required by law. If any Non-Excluded Taxes are required by law to be deducted or withheld from or in respect of any payment or sum payable hereunder or under any Transaction Document by any Withholding Agent to the Agent, any Holder or any Lender, (x) the applicable Withholding Agent shall make such deductions and withholdings within the time allowed and in the minimum amount required by law, (y) the sum payable by the applicable Credit Party shall be increased by the amount (an “Additional Amount”) necessary so that, after making all required deductions and withholdings (including deductions and withholdings applicable to additional sums payable under this Section 2.6(a)) the Agent, such Holder or such Lender, as applicable, shall receive an amount equal to the sum it would have received had no such deductions or withholdings been made and (z) the Withholding Agent shall pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable law and shall promptly provide to the Agent, Holder or Lender, as applicable, an evidence of such payment to the relevant Governmental Authority (in a form reasonably satisfactory to the Agent, Holder or Lender, as applicable).
(b)The Borrower will pay to the relevant Governmental Authority in accordance with applicable law any current or future stamp, stamp duty, registration, court, documentary, intangible, recording, filing or similar Taxes or any other excise or property taxes, charges or similar levies that arise from any payment made hereunder or under any Transaction Document, or from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, this Agreement or any Transaction Document that are or would be applicable to the Holders, the Agent, or a Lender (“Other Taxes”).

(c)The Credit Parties agree to indemnify the Agent, each Holder, each Lender and their respective Affiliates for the full amount of Non-Excluded Taxes and Other Taxes paid by the Agent, such Holder, such Lender or such Affiliates and any liability (including penalties, interest and expenses (including reasonable attorney’s and other advisors’ fees and expenses)) arising therefrom or with respect thereto, whether or not such Non-Excluded Taxes or Other Taxes were correctly or legally asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability prepared by the Agent, such Holder, such Lender or such Affiliate, absent manifest error, shall be final conclusive and binding for all purposes. Such indemnification shall be made within thirty (30) days after the date the Agent, such Holder, such Lender or such Affiliate makes written demand therefor. Agent, a Lender, a Holder or any of their respective Affiliates shall notify the Borrower in writing of the receipt by such Person of any written notice from any taxing authority demanding, or threatening to demand, any Tax indemnifiable by the Borrower under this Section 2.6(c), within a reasonable period of time after receipt of such notice.

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(d)On the Original Closing Date, and subsequently on or prior to the date on which a Lender or Holder became or becomes a Lender or Holder under this Agreement with respect to the Borrower (and from time to time thereafter upon the reasonable request of the Borrower or the Agent), each applicable Lender and Holder has delivered or shall deliver to the Borrower a completed and signed IRS Form W-8 or IRS Form W-9 (or any successor form), as applicable. In the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate substantially in the form attached hereto as Exhibit I to the effect that such Foreign Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code (a “US Tax Compliance Certificate”).

(e)The Parties agree to treat and report amounts lent under this Agreement and any amount due under the Notes as debt for U.S. federal, state and local income tax purposes. The Credit Parties agree to indemnify the Agent, each Holder, each Lender and their respective Affiliates for the full amount of Taxes and Other Taxes paid by the Agent, such Holder, such Lender or such Affiliates and any liability (including penalties, interest and expenses (including reasonable attorney’s and other advisors’ fees and expenses)) arising therefrom or with respect thereto, whether or not such Taxes or Other Taxes were correctly or legally asserted by the relevant Governmental Authority, to the extent such Taxes or Other Taxes are imposed as a result of the treatment of any amounts lent under this Agreement or any amount due under the Notes as other than debt by any Governmental Authority.

(f)Survival. Notwithstanding anything to the contrary herein, each party’s obligations under this Section 2.6 and Section 13.12 shall survive the resignation or replacement of the Agent or any assignment of rights by, or the replacement of, a Lender or Holder, the termination of the Commitments and the repayment, satisfaction or discharge of all obligations under any Transaction Document.

Section 2.7    Reissuance.
(a)Transfer. If any Note is to be transferred, the Holder thereof shall surrender such Note to the Borrower, whereupon the Borrower will forthwith issue and deliver upon the order of such Holder a new Note (in accordance with this Section 2.7), registered as such Holder may request (provided that electronic registration is acceptable), representing the outstanding principal being transferred by such Holder and, if less than the entire outstanding principal amount is being transferred, a new Note (in accordance with this Section 2.7) to such Holder representing the outstanding principal not being transferred.
(b)Lost, Stolen or Mutilated Note. Upon receipt by the Borrower of evidence reasonably satisfactory to the Borrower of the loss, theft, destruction or mutilation of any Note and (i) in the case of loss, theft or destruction, upon delivery of an indemnity agreement reasonably satisfactory to the Borrower (provided, however, that if the Holder is an institutional investor, the affidavit of an authorized partner or officer of such Holder setting forth the circumstances with respect to such loss, theft or destruction shall be accepted as satisfactory
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evidence thereof and no indemnity agreement or other security shall be required), and (ii) in the case of mutilation, upon surrender and cancellation of the mutilated Note, the Borrower shall execute and deliver to such Holder a new Note (in accordance with this Section 2.7) representing the outstanding principal.

(c)Note Exchangeable for Different Denominations. The Notes are exchangeable, upon the surrender thereof by the Holder at the principal office of the Borrower, for a new Note or Notes (in accordance with this Section 2.7) of like tenor in principal amounts of at least $100,000 representing in the aggregate the outstanding principal of the surrendered Note, and each such new Note will represent such portion of such outstanding principal as is designated by such Holder or such Lender at the time of such surrender.

(d)Issuance of New Notes. Whenever the Borrower is required to issue a new Note pursuant to the terms of this Agreement or the Notes, such new Note (i) shall be of like tenor with the Note being replaced, (ii) shall represent, as indicated on the face of such new Note, the principal remaining outstanding (or, in the case of a new Note being issued pursuant to paragraph (a) or (b) of this Section 2.7, the principal designated by the Holder which, when added to the principal represented by the other new Notes issued in connection with such issuance, equals aggregate principal remaining outstanding under the Note being replaced immediately prior to such issuance of new Notes), (iii) shall have an Issuance Date, as indicated on the face of such new Note, which is the same as the Issuance Date of the Note being replaced, (iv) shall have the same rights and conditions as the Note being replaced, and (v) shall represent accrued interest on the principal, Prepayment Premium and Late Charges of the Note being replaced from such Issuance Date.

Section 2.8    Register. The Borrower shall maintain at its principal executive office (or such other office or agency of the Borrower (or the Agent on its behalf) as it may designate by notice to each holder of Notes), a register for the Notes in which the Borrower (or the Agent on its behalf) shall record the name and address of the Person in whose name the Notes have been issued (including the name and address of each transferee) and the principal amount (and stated interest) of Notes held by such Person (the “Register”). The Borrower shall keep the Register open and available at all times during normal business hours for inspection of any Holder, any Lender or their respective representatives. The Register may be maintained in electronic format.
Section 2.9    Maintenance of Register. Notwithstanding anything to the contrary contained herein, the Notes and this Agreement are registered obligations and the right, title, and interest of each Holder, each Lender and their assignees in and to such Notes (or any rights under this Agreement) shall be transferable only upon notation of such transfer in the Register. The Notes shall only evidence a Holder’s, a Lender’s or their assignee’s right, title and interest in and to the related Notes, and in no event is any such Note to be considered a bearer instrument or obligation. This Section 2.9 shall be construed so that the Notes are at all times maintained in “registered form” within the meaning of Sections 163(f), 871(h)(2) and 881(c)(2) of the Code and any related Treasury regulations promulgated thereunder.
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Section 2.10    Monthly Maintenance Fee. The Borrower hereby agrees to pay to Agent in arrears on the last Business Day of each calendar month, a monthly maintenance fee in the amount of $5,000 (collectively, the “Monthly Maintenance Fees”). The Borrower agrees that the Monthly Maintenance Fees shall be fully-earned when paid and shall not be refundable in whole or in part under any circumstances.
Article 3
RESTATEMENT CLOSING

Section 3.1    Restatement Closing. In consideration for each applicable Lender’s payment of its pro rata share of the aggregate purchase price (the “Restatement Closing Note Purchase Price”) of the Notes to be purchased by the Lenders at the Restatement Closing (as defined below), which is set forth opposite such Lender’s name in column four (4) of the Schedule of Lenders attached hereto, the Borrower shall issue and sell to such Lender on the Restatement Closing Date (as defined below), and each applicable Lender severally, but not jointly, agrees to purchase from the Borrower on the Restatement Closing Date, a Note, in substantially the form attached hereto as Exhibit A, and in the aggregate principal amount as is set forth opposite such Lender’s name in column four (4) of the Schedule of Lenders attached hereto. The restatement closing (the “Restatement Closing”) of the transactions contemplated by this Agreement and the issuance of the Notes to be issued on the Restatement Closing Date by the Borrower and the purchase thereof by the applicable Lenders shall occur at the offices of Katten Muchin Rosenman LLP, 525 West Monroe Street, Suite 1900, Chicago, Illinois 60661. The date and time of the Restatement Closing (the “Restatement Closing Date”) shall be 10:00 a.m., Chicago time, on the date hereof, subject to notification of satisfaction (or waiver) of the conditions to the Restatement Closing set forth in Section 5.1 below (or such later date as is mutually agreed to by the Borrower and the Agent). On the Restatement Closing Date, (i) each Lender shall pay its pro rata share of the Restatement Closing Note Purchase Price to the Borrower for the Notes to be issued and sold to such Lender at the Restatement Closing, by wire transfer of immediately available funds, as more fully set forth on the Schedule of Lenders and (ii) the Borrower shall deliver to each Lender the Notes (in the denominations as such Lender shall have requested prior to the Restatement Closing) which such Lender is then purchasing, duly executed on behalf of the Borrower and registered in the name of such Lender or its designee.
Section 3.2    Subsequent Closings. Subject to the satisfaction (or waiver by the Agent in its sole discretion) of the conditions to a Subsequent Closing set forth in Section 5.2 and further subject to Section 10.2(a), each applicable Lender hereby promises to purchase from the Borrower an aggregate principal amount of additional Notes not to exceed, when aggregated with the principal amount of Notes acquired by such Lender prior to such Subsequent Closing (including, without limitation, at the Restatement Closing), such Lender’s Commitment. Subject to the satisfaction (or waiver by the Agent) of the conditions to a Subsequent Closing set forth in Section 5.2 and further subject to Section 10.2(a), in consideration for each applicable Lender’s payment of its pro rata share of the aggregate purchase price (the “Subsequent Closing Note Purchase Price”) of the Notes to be purchased by such Lenders at such Subsequent Closing, the
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Borrower shall issue and sell to each Lender on the applicable Subsequent Closing Date (as defined below), and each Lender severally, but not jointly, agrees to purchase from the Borrower on such Subsequent Closing Date, a principal amount of Notes in the amount each Lender has agreed in writing to pay in respect thereof, pursuant to a Notice of Purchase and Sale. The closing (each a “Subsequent Closing”) of any of the transactions contemplated by this Section 3.2 and the issuance of the additional Notes to be issued to the Lenders at such Subsequent Closing shall occur at the offices of Katten Muchin Rosenman LLP, 525 West Monroe Street, Suite 1900, Chicago, Illinois 60661. With respect to each Subsequent Closing, the date and time of such Subsequent Closing (the “Subsequent Closing Date”) shall be 10:00 a.m., Chicago time, on the date on which the conditions set forth in Section 5.2 below shall be satisfied or waived in accordance with this Agreement (or such later date as is mutually agreed to by the Borrower and the Agent). On each Subsequent Closing Date, (i) each Lender shall pay its pro rata share of the applicable Subsequent Closing Note Purchase Price to the Borrower for the Notes to be issued and sold to such Lender at such Subsequent Closing, by wire transfer of immediately available funds in accordance with the Borrower’s written wire instructions, and (ii) the Borrower shall deliver to each Lender the Notes (in the denominations as such Lender shall have requested prior to such Subsequent Closing) which such Lender is then purchasing, duly executed on behalf of the Borrower and registered in the name of such Lender or its designee.
Article 4
INTENTIONALLY OMITTED

Article 5
CONDITIONS TO RESTATEMENT CLOSING AND EACH LENDER’S OBLIGATION TO PURCHASE

Section 5.1    Restatement Closing. The obligation of the Agent and the Lenders to close the transactions contemplated by this Agreement is subject to the satisfaction, at or before the Restatement Closing Date, of each of the following conditions:
(a)The Borrower shall pay to the Agent on the February 2019 Interest Date, for the benefit of the Lenders, a fully-earned non-refundable Restatement Fee by wire transfer of immediately available funds.
(b)The Borrower shall have executed and delivered, or caused to be delivered, to the Agent evidence satisfactory to the Agent that the Borrower shall pay to the Agent on the Restatement Closing Date all fees and other amounts, including the Restatement Fee, due and owing thereon under this Agreement and the other Transaction Documents.

(c)The Credit Parties shall have executed and/or delivered, or caused to be delivered, to the Agent each of the Security Documents and the Credit Parties shall have executed (to the extent applicable) and/or delivered, or caused to be delivered, to the Agent:
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(i)certificates evidencing any Pledged Equity (as defined in the Security Agreement) pledged to the Agent pursuant to the Security Agreement, together with duly executed in blank, undated stock or unit powers attached thereto; and
(ii)such other documents relating to the transactions contemplated by this Agreement as the Agent or its counsel may reasonably request.

(d)The Credit Parties shall have executed and/or delivered, or caused to be delivered, to the Agent, without duplication, the deliveries set forth in each of the Index of Restatement Closing Documents attached hereto as Exhibit H.
(e)Each Credit Party shall have executed and delivered, or caused to be delivered, to the Agent:
(i)a certificate evidencing its organization, formation, or incorporation (as applicable) and good standing in its jurisdiction of organization or incorporation issued by the Secretary of State of such jurisdiction, as of a date reasonably proximate to the Restatement Closing Date;
(ii)a certificate evidencing its qualification as a foreign corporation, limited liability company or other entity (as applicable) and good standing issued by the Secretary of State (or comparable office) of each jurisdiction in which such Person is qualified to conduct business and failure to so qualify would cause a Material Adverse Effect, as of a date reasonably proximate to the Restatement Closing Date;

(iii)a certificate as to the fact that no action has been taken with respect to any merger, consolidation, liquidation or dissolution of such Person, or with respect to the sale of substantially all of its assets, nor is any such action pending or contemplated; and

(iv)a certificate, executed by the secretary (or other authorized officer) of such Person and dated the Restatement Closing Date, as to (A) the resolutions consistent with Section 7.2 as adopted by such Person’s board of directors (or similar governing body) in a form reasonably acceptable to the Agent, (B) such Person’s certificate of incorporation (or similar document), each as in effect at the Restatement Closing, (C) such Person’s bylaws or memorandum and articles of association (or similar document), each as in effect at the Restatement Closing, and (D) no action having been taken by such Person or its stockholders, members, directors or officers (as applicable) in contemplation of any amendments to items (A), (B), or (C) listed in this Section 5.1(e)(iv), as certified in the form attached hereto as Exhibit C.

(f)The Borrower shall have obtained and delivered to Agent:
(i)the opinions of Outside Legal Counsel, dated the Restatement Closing Date;
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(ii)all governmental, regulatory and third party consents, approvals and notifications, if any, necessary for the closing of the transactions contemplated by this Agreement and the issuance of the Notes to be issued at the Restatement Closing;

(iii)if requested by the Agent, updated Lien searches in the jurisdictions of organization of each Credit Party, the jurisdiction of the chief executive offices of each Credit Party and each jurisdiction where a filing would need to be made in order to perfect the Agent’s and Holders’ security interest in the Collateral, copies of the financing statements on file in such jurisdictions and evidence that no Liens exist other than Permitted Liens;

(iv)such information in form, scope and substance reasonably satisfactory to the Agent regarding environmental matters relating to all real property owned, leased, operated or used by the Credit Parties as of the Restatement Closing Date;

(v)a certificate from the chief financial officer of the Borrower (or other authorized executive officer performing a similar function) in form and substance satisfactory to the Agent, supporting the conclusions that, after giving effect to the transactions contemplated by the Transaction Documents, the Borrower is not Insolvent; and

(vi)if requested by the Agent, updated certificates from the Borrower’s insurance broker or other evidence satisfactory to it that all insurance required to be maintained pursuant to this Agreement is in full force and effect, together with endorsements naming the Agent, for the benefit of the Holders, as additional insured and lender’s loss payee thereunder, as applicable.

(g)Each Credit Party shall have authorized the filing of UCC financing statements for each appropriate jurisdiction as is necessary, in the Agent’s sole discretion, to perfect the Agent’s security interest in the Collateral and, if applicable, the filing of the Intellectual Property Security Agreements in the U.S. Patent and Trademark Office and the U.S. Copyright Office, as applicable.
(h)The Borrower shall have caused to be executed and delivered, to the Agent such landlord waivers, collateral access agreements or other similar documents as the Agent may reasonably request.

(i)The representations and warranties of the Credit Parties shall be true and correct in all material respects (without duplication of any materiality qualifiers) as of the date when made and as of the Restatement Closing Date as though made at that time (except for representations and warranties that speak as of a specific date, which shall be true and correct in all material respects (without duplication of any materiality qualifiers) as of such specific date), and the Credit Parties shall have performed, satisfied and complied in all respects with the covenants, agreements and conditions required by the Transaction Documents to be performed, satisfied or complied with by the Credit Parties at or prior to the Restatement Closing Date. The
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Agent shall have received a certificate, executed by the chief executive officer of the Borrower (or other authorized executive officer performing a similar function), dated the Restatement Closing Date, to the foregoing effect in respect of the Borrower only and as to such other matters as may be reasonably requested by the Agent, in the form attached hereto as Exhibit D.

(j)No Event of Default (or event or circumstance that, with the passage of time, the giving of notice, or both, would become an Event of Default) shall have occurred and be continuing or would result from the closing of the transactions contemplated by this Agreement or issuance of the Notes to be issued at the Restatement Closing.

(k)The Credit Parties shall have paid or reimbursed the Agent and the Lenders for all costs and expenses required to be paid or reimbursed by them on the Restatement Closing Date in accordance with Section 8.22 hereof.

Section 5.2    Subsequent Closings. The obligation of each Lender hereunder to purchase Notes at a Subsequent Closing is subject to the satisfaction, at the applicable Subsequent Closing Date, of each of the following conditions:
(a)Each representation and warranty by any Credit Party contained herein and in each other Transaction Document shall be true and correct in all material respects (without duplication of any materiality qualifiers) as of such date (subject to such updates to the Schedules, if any, as are approved by the Agent in its reasonable discretion), except to the extent that such representation or warranty expressly relates to an earlier date, including the Restatement Closing Date (in which event such representations and warranties shall be true and correct in all material respects (without duplication of any materiality qualifiers) as of such earlier date).
(b)No Event of Default or event or circumstance which, with the giving of notice, the lapse of time, or both, would (if not cured or otherwise remedied during such time) constitute an Event of Default shall have occurred and be continuing or would result after giving effect to such issuance and purchase of Notes.

(c)After giving effect to such issuance and purchase of Notes, the aggregate outstanding principal amount of the Notes would not exceed the Maximum Commitment.

(d)The funding date shall be a Permitted Issuance Date.

(e)After giving effect to such draw, the Debt-to-Equity Ratio of the Borrower shall not be more than 9-to-1.

(f)The Credit Parties shall have paid or reimbursed the Agent and the Lenders for all costs and expenses required to be paid or reimbursed by them on the Permitted Issuance Date in accordance with Section 8.22 hereof.

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(g)The Credit Parties shall have delivered a Borrowing Base Certificate, certified on behalf of the Borrower by the chief financial officer of the Borrower (or other authorized executive officer performing a similar function), setting forth the Borrowing Base of the Borrower as of a date no earlier than the end of the most recently ended fiscal month and no later than the day immediately preceding the funding date.

The request by the Borrower and acceptance by the Borrower of the proceeds of any additional issuance and purchase of Notes made on a Subsequent Closing Date shall be deemed to constitute, as of such Subsequent Closing Date, (i) a representation and warranty by the Borrower that the conditions in this Section 5.2 have been satisfied and (ii) a reaffirmation by each Credit Party of the granting and continuance of Agent’s Liens, on behalf of the Lenders and the Holders, pursuant to the Transaction Documents.
Article 6
INTENTIONALLY OMITTED

Article 7
CREDIT PARTIES’ REPRESENTATIONS AND WARRANTIES

As an inducement to the Agent and the Lenders to enter into this Agreement and to consummate the transactions contemplated hereby, each of the Credit Parties severally represents and warrants in respect of itself to each of the Agent and the Lenders that each and all of the following representations and warranties (as supplemented by the disclosure schedules delivered to the Agent and the Lenders contemporaneously with the execution and delivery of this Agreement (the “Schedules”)) as applicable to it, are true and correct as of the Restatement Closing Date and as of each Subsequent Closing Date. The Schedules shall be arranged by the Borrower in paragraphs corresponding to the sections and subsections contained in this Article 7.
Section 7.1    Organization and Qualification. Each Credit Party and each of its respective Subsidiaries (which, for purposes of this Agreement, means any entity in which any Credit Party, directly or indirectly, owns at least 50% of the Capital Stock or other Equity Interests) (“Subsidiaries”) are entities duly incorporated or organized and validly existing in good standing under the laws of the jurisdiction in which they are formed or incorporated, and have the requisite corporate or limited liability company power and authorization, as applicable, to own their properties, carry on their business as now being conducted, enter into the Transaction Documents to which they are party and carry out the transactions contemplated thereby. Each Credit Party and each of its Subsidiaries is duly qualified as a foreign entity to do business and is in good standing in every jurisdiction in which its ownership of property or the nature of the business conducted by it makes such qualification necessary, except to the extent that the failure to be so qualified or be in good standing would not have, either individually or in the aggregate, a Material Adverse Effect. Except as set forth on Schedule 7.1, (i) no Credit Party has any Subsidiaries and (ii) all Capital Stock or other equity or similar interests of the Subsidiaries is directly or indirectly owned by a Credit Party, as set forth therein.
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Section 7.2    Authorization; Enforcement; Validity. Each of the Credit Parties has the requisite power and authority to enter into and perform its obligations under this Agreement, the Notes, the Security Agreement, each of the other Security Documents, the Intercreditor Agreement, the Release Agreement and each of the other agreements, documents and certificates entered into by the parties hereto in connection with the transactions contemplated by this Agreement (collectively, the “Transaction Documents”) and to issue the Notes in accordance with the terms hereof and thereof. The execution and delivery of the Transaction Documents by the Credit Parties have been duly authorized by each of the Credit Parties’ respective board of directors (or other governing body) and the consummation by the Credit Parties of the transactions contemplated hereby and thereby, including, without limitation, the issuance of the Notes by the Borrower has been duly authorized by the respective Credit Party’s board of directors (or other governing body), and (other than filings with “Blue Sky” authorities as required therein) no further filing, consent, or authorization is required by any Credit Party, its board of directors (or other governing body) or its stockholders or any parties in a similar capacity.
Section 7.3    Issuance of Notes. The Notes are duly authorized and, upon issuance in accordance with the terms hereof, shall be validly issued and free from all Taxes, liens and charges with respect to the issue thereof.
Section 7.4    No Conflicts. Neither the execution, delivery and performance of the Transaction Documents by the Credit Parties party thereto, nor the consummation by the Credit Parties of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Notes) will (i) result in a violation of any Credit Party’s or any Subsidiary’s certificate of incorporation, certificate of formation, bylaws, limited liability company agreement or other governing documents, or the terms of any Capital Stock or other Equity Interests of any Credit Party or any of their Subsidiaries; (ii) conflict with, or constitute a breach or default (or an event which, with notice or lapse of time or both, would become a breach or default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any Consumer Loan Agreement or any other agreement, indenture or instrument to which any Credit Party or any of their Subsidiaries is a party; (iii) result in any “price reset” or other material change in or other modification to the terms of any Indebtedness, Equity Interests or other securities of any Credit Party or any of their Subsidiaries; or (iv) result in a violation of any law, rule, regulation, order, judgment or decree (including, without limitation, (A) any Environmental Laws, (B) any Requirements or (C) any federal or state securities laws).
Section 7.5    Consents. Except as set forth on Schedule 7.5, no Credit Party is required to obtain any consent, authorization, approval, order, license, franchise, permit, certificate or accreditation of, or make any filing or registration with, any court, governmental agency or any regulatory or self-regulatory agency or authority or any other Person in order for it to execute, deliver or perform any of its obligations under or contemplated by the Transaction Documents, in each case in accordance with the terms hereof or thereof (other than filings required by the Security Documents). All consents, authorizations, approvals, orders, licenses, franchises, permits, certificates or accreditations of, filings and registrations set forth on Schedule 7.5 have been obtained or effected on or prior to the Restatement Closing Date.
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Section 7.6    Subsidiary Rights. Each Credit Party has the unrestricted right to vote, and (subject to limitations imposed by applicable law) to receive dividends and distributions on, all capital and other equity securities of its Subsidiaries as owned by any Credit Party.
Section 7.7    Equity Capitalization. As of the Restatement Closing Date, the authorized Capital Stock and the issued and outstanding Equity Interests of each Credit Party and each Subsidiary of each Credit Party is as set forth on Schedule 7.7. All of such outstanding shares of Capital Stock or other Equity Interests of the Credit Parties and their Subsidiaries have been duly authorized, validly issued and are fully paid and nonassessable and are owned by the Persons and in the amounts set forth on Schedule 7.7. Except as set forth on Schedule 7.7: (i) none of any Credit Party or any Subsidiary’s Capital Stock or other Equity Interest in any other Credit Party or such Subsidiary is subject to preemptive rights or any other similar rights or any liens or encumbrances suffered or permitted by such Credit Party or such Subsidiary; (ii) there are no outstanding options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable for, any Capital Stock or other Equity Interests in any Credit Party or any of their Subsidiaries, or contracts, commitments, understandings or arrangements by which any Credit Party or any of their Subsidiaries is or may become bound to issue additional Capital Stock or other Equity Interests in such Credit Party or such Subsidiary or options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable for, any Capital Stock or other Equity Interests in any Credit Party or any of their Subsidiaries; (iii) there are no outstanding debt securities, notes, credit agreements, credit facilities or other agreements, documents or instruments evidencing Indebtedness of any Credit Party or any of their Subsidiaries or by which any Credit Party or any of their Subsidiaries is or may become bound other than Permitted Indebtedness; (iv) there are no financing statements securing obligations in any material amounts, either singly or in the aggregate, filed in connection with any Credit Party or any of their Subsidiaries; (v) there are no agreements or arrangements under which any Credit Party or any of their Subsidiaries is obligated to register the sale of any of its securities under the 1933 Act; (vi) there are no outstanding securities or instruments of any Credit Party or any of their Subsidiaries which contain any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by which any Credit Party or any of their Subsidiaries is or may become bound to redeem a security of any Credit Party or any of their Subsidiaries; (vii) there are no securities or instruments containing anti-dilution or similar provisions that will be triggered by the closing of the transactions contemplated by this Agreement or the issuance of the Notes; (viii) none of any Credit Party or any of their Subsidiaries has any stock appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement and (ix) none of any Credit Party or any of their Subsidiaries has any liabilities or obligations required to be disclosed in its financial statements (including the footnotes thereto) that are not so disclosed. Prior to the Restatement Closing, the Borrower has provided to the Lenders true, correct and complete copies of (i) its certificate of incorporation as in effect on the Restatement Closing Date, and (ii) its memorandum and articles of association as in effect on the Restatement Closing Date. Schedule 7.7 identifies all outstanding securities convertible into, or exercisable or exchangeable for, shares of Capital Stock or other Equity Interests in any Credit Party or any of their Subsidiaries and the material rights of the holders thereof in respect thereto.
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Section 7.8    Indebtedness and Other Contracts. Except as disclosed on Schedule 7.8, none of any Credit Party or any of their Subsidiaries (i) has any outstanding Indebtedness other than Permitted Indebtedness, (ii) is a party to any contract, agreement or instrument, the violation of which, or default under which, by the other party(ies) to such contract, agreement or instrument could reasonably be expected to result in a Material Adverse Effect, or (iii) is in violation of any term of or in default under any contract, agreement or instrument relating to any Indebtedness or any contract, agreement or instrument entered into in connection therewith that could reasonably be expected to result in, either individually or in the aggregate, a Material Adverse Effect.
Section 7.9    Off Balance Sheet Arrangements. There is no transaction, arrangement, or other relationship between any Credit Party or any of their Subsidiaries and an unconsolidated or other off balance sheet entity that would be reasonably likely to have, either individually or in the aggregate, a Material Adverse Effect.
Section 7.10    Ranking of Notes. No Indebtedness of any of the Credit Parties or any of their Subsidiaries will rank senior to or pari passu with the Notes in right of payment or collectability, whether with respect to payment of redemptions, interest, damages or upon liquidation or dissolution or otherwise.
Section 7.11    Title. Each of the Credit Parties and each of their Subsidiaries has (i) good and marketable title to (in the case of fee interests in real property), (ii) valid leasehold interests in (in the case of leasehold interests in real or personal property), (iii) adequate rights in (in the case of licensed interests in Intellectual Property Rights and Intellectual Property Rights that are not wholly owned by a Credit Party or a Subsidiary), and (iv) good and marketable title to (in the case of all other personal property) all of its real property and other properties and assets owned by it which are material to the business of such Credit Party or such Subsidiary, in each case free and clear of all liens, encumbrances and defects, other than Permitted Liens. Any real property and facilities held under lease by any Credit Party or any of their Subsidiaries are held by it under valid and enforceable leases.
Section 7.12    Intellectual Property Rights. Each of the Credit Parties and each of their Subsidiaries owns or possesses adequate rights to use all trademarks, trade names, service marks, service mark registrations, service names, patents, patent rights, copyrights, inventions, trade secrets and other intellectual property rights (“Intellectual Property Rights”) that are necessary and material to conduct its respective business and no Credit Party or Subsidiary has previously granted any Lien on any such Intellectual Property Rights other than Permitted Liens. Except as described on Schedule 7.12, no registered Intellectual Property Rights that are owned by a Credit Party or a Subsidiary have expired or terminated, or are expected to expire or terminate within five (5) years from the Restatement Closing Date. Except as described on Schedule 7.12, (i) none of any Credit Party or any of their Subsidiaries has any knowledge of any infringement, misappropriation, dilution or other violation by any Credit Party or any of their Subsidiaries of Intellectual Property Rights owned by other Persons; (ii) none of any Credit Party or any of their Subsidiaries has any knowledge of any infringement, misappropriation, dilution or other violation by any other Persons of the Intellectual Property Rights owned by any Credit Party or
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any of their Subsidiaries; (iii) there is no claim, action or proceeding pending before any court, judicial body, administrative or regulatory agency, arbitrator or other governmental authority or, to the knowledge of each of the Credit Parties, threatened in writing, against any Credit Party or any of their Subsidiaries contesting or challenging the validity, scope or enforceability of, or a Credit Party’s or Subsidiary’s ownership of or right to use, its owned Intellectual Property Rights or the Intellectual Property Rights it licenses from other Persons; and (iv) none of any Credit Party or any of their Subsidiaries is aware of any facts or circumstances which reasonably could be expected to give rise to any of the foregoing infringements or claims, actions or proceedings. Each of the Credit Parties and their Subsidiaries has taken and is taking commercially reasonable security measures to maintain and protect the secrecy, confidentiality and value of the trade secrets and other confidential information it owns.
Section 7.13    Creation, Perfection, and Priority of Liens. The Security Documents are effective to create in favor of the Agent, for the benefit of the Holders and the Lenders, a legal, valid, binding, and (upon the filing of the appropriate UCC financing statements and Intellectual Property Security Agreements, the transfer of possession of original certificated securities together with appropriate transfer instruments and the delivery of deposit account control agreements) enforceable perfected first priority (subject to Permitted Liens) security interest and Lien in the Collateral described therein as security for the Obligations to the extent that a legal, valid, binding, and enforceable security interest and Lien in such Collateral may be created under applicable law including without limitation, the uniform commercial code as in effect in any applicable jurisdiction (“UCC”) and any other applicable governmental agencies.
Section 7.14    Absence of Certain Changes; Insolvency.
(a)Since December 31, 2014 (the “Diligence Date”), there has been no material adverse change in the business, assets, properties, operations, condition (financial or otherwise), results of operations or prospects of any Credit Party or any of the Credit Parties’ Subsidiaries. Since the Diligence Date, neither any Credit Party nor any of their Subsidiaries has (i) declared or paid any dividends or (ii) sold any assets (other than the sale of Inventory in the ordinary course of business). NeitherExcept as described on Schedule 7.14, neither any Credit Party nor any of their Subsidiaries has taken any steps to seek protection pursuant to any bankruptcy law nor do any Credit Party or any of their Subsidiaries have any knowledge that its creditors intend to initiate involuntary bankruptcy proceedings or any actual knowledge of any fact which would reasonably lead a creditor to do so. Neither any Credit Party nor any of their Subsidiaries intends to incur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt). Neither the Credit Parties or the Credit Parties and their Subsidiaries taken as a whole are, as of the Restatement Closing Date, or after giving effect to the transactions contemplated hereby to occur at the Restatement Closing, will be, Insolvent. Without limitation of the foregoing, no corporate action, legal proceeding or other procedure or step in respect of any Insolvency Proceeding or expropriation, attachment, sequestration, distress or execution or any analogous process in any jurisdiction over any asset or assets of a Credit Party has been taken or, to the knowledge of Holdings, threatened in relation to Elevate Credit Parent or any of its Subsidiaries.
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Section 7.15    Absence of Proceedings. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, Governmental Authority (including, without limitation, the SEC, self-regulatory organization or other governmental body) (in each case, a “Proceeding”) pending or, to the knowledge of any Credit Party, threatened in writing against or affecting any Credit Party, or any of the Credit Parties’ Subsidiaries or any of their respective officers or directors which (i) could reasonably be expected to result, either individually or in the aggregate, in a Material Adverse Effect, (ii) if adversely determined, could reasonably be expected to result, either individually or in the aggregate, in a Material Adverse Effect, or (iii) questions the validity of this Agreement, any of the other Transaction Documents or any of the transactions contemplated hereby or thereby or any action taken or to be taken pursuant hereto or thereto.
Section 7.16    No Undisclosed Events, Liabilities, Developments or Circumstances. No event, liability, development or circumstance has occurred or exists, or is contemplated to occur or may occur with respect to any Credit Party or any of the Credit Parties’ Subsidiaries or their respective business, properties, prospects, operations or financial condition, that would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect. For the purposes of this Section 7.16 only, any gross negligence, willful misconduct or fraud in the conduct of business by any Credit Party or any of their Subsidiaries, as determined by a court of competent jurisdiction in a final, non-appealable judgment or order, shall be presumed to have, or be reasonably expected to have, a Material Adverse Effect.
Section 7.17    No Disagreements with Accountants and Lawyers. There are no disagreements of any kind presently existing, or reasonably anticipated by any Credit Party or any of their Subsidiaries to arise, between any Credit Party or any of their Subsidiaries and the accountants and lawyers formerly or presently employed by Credit Parties and their Subsidiaries which would reasonably be expected to affect the ability of the Credit Parties to perform any of their obligations under any of the Transaction Documents.
Section 7.18    Placement Agent’s Fees. No Credit Party has engaged any placement agent or other agent in connection with the closing of the transactions contemplated by this Agreement or the issuance of the Notes.
Section 7.19    Reserved.
Section 7.20    Tax Status. Each Credit Party and their Subsidiaries (i) have made or filed all foreign, federal, state and local income Tax Returns and all other material Tax Returns, reports and declarations required by any jurisdiction to which they are subject and all such Tax Returns were correct and complete in all respects and were prepared in substantial compliance with all applicable laws and regulations, (ii) have paid all Taxes and other governmental assessments and charges due and owing (whether or not shown on any Tax Return), and (iii) have set aside on their books adequate reserves in accordance with GAAP for the payment of all Taxes due and owing by any Credit Party or its respective Subsidiaries. There are no unpaid Taxes in any material amount claimed to be delinquent by the taxing authority of any jurisdiction (other than those being contested in good faith by appropriate proceedings promptly instituted and diligently conducted and subject to adequate reserves taken by Credit Parties or such
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Subsidiaries as shall be required in conformity with GAAP), and the officers of each of the Credit Parties and their Subsidiaries know of no basis for any such claim. No claim has ever been made by an authority in a jurisdiction where any Credit Party or any of its Subsidiaries does not file Tax Returns that any Credit Party or any of its Subsidiaries is or may be subject to taxation by that jurisdiction. There are no Liens for Taxes (other than Taxes not yet due and payable) upon any of the assets of the Credit Parties or any of their respective Subsidiaries.
Section 7.21    Transfer Taxes. On the Restatement Closing Date, all transfer or Other Taxes (other than income or similar taxes) which are required to be paid in connection with the issuance of the Notes to each Lender hereunder will be, or will have been, fully paid or provided for by the Credit Parties, and all laws imposing such Taxes will be or will have been complied with.
Section 7.22    Conduct of Business; Compliance with Laws; Regulatory Permits. Neither any Credit Party nor any of their Subsidiaries is in violation of any term of or in default under its certificate or articles of incorporation or bylaws or other governing documents. Neither any Credit Party nor any of their Subsidiaries is in violation of any judgment, decree or order or any law, rule, regulation, statute or ordinance applicable to any Credit Party or any of their Subsidiaries (including, without limitation, all Environmental Laws and the Requirements). Schedule 7.22 (as such Schedule shall be updated from time to time by the Credit Parties by written notice to Agent) sets forth all United States federal and state and applicable foreign regulatory licenses, material consents, authorizations, approvals, orders, licenses, franchises, permits, certificates, accreditations and permits and all other appropriate regulatory authorities necessary to conduct the respective businesses of the Credit Parties and their Subsidiaries, and except as set forth on Schedule 7.22 (as such Schedule shall be updated from time to time by the Credit Parties by written notice to Agent), all of such United States federal and state and applicable foreign regulatory licenses, material consents, authorizations, approvals, orders, licenses, franchises, permits, certificates, accreditations and permits and other appropriate regulatory authorities are valid and in effect and no Credit Party nor any of their Subsidiaries has received any notice of proceedings or entered into formal or informal discussions relating to the revocation or modification of any such United States federal and state and applicable foreign regulatory licenses, consents, authorizations, approvals, orders, licenses, franchises, permits, certificates, accreditations or permits. To the knowledge of each of the Credit Parties, it is not necessary under the laws of its Relevant Jurisdictions:
(a)in order to enable the Agent, any Lender or any Holder to enforce their respective rights under any Transaction Document; or
(b)by reason of the execution of any Transaction Document or the performance by it of its obligations under any Transaction Document,

that the Agent, any Lender or any Holder be licensed, qualified or otherwise entitled to carry on business in any of its Relevant Jurisdictions.
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None of the Agent, any Lender or any Holder is or will be deemed to be resident, domiciled or carrying on business in its Relevant Jurisdictions solely by reason of the execution, performance and/or enforcement of any Transaction Document.
Section 7.23    Foreign Corrupt Practices. Neither any Credit Party nor any of their Subsidiaries, nor any director, officer, agent, employee or other Person acting on behalf of any Credit Party or any of their Subsidiaries has, in the course of its actions for, or on behalf of, any Credit Party or any of their Subsidiaries (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expenses relating to political activity; (ii) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; (iii) violated or is in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended; or (iv) made any unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful payment to any foreign or domestic government official or employee.
Section 7.24    Reserved.
Section 7.25    Environmental Laws. Each Credit Party and their Subsidiaries (a) (i) is in compliance with any and all Environmental Laws, (ii) has received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses, (iii) is in compliance with all terms and conditions of any such permit, license or approval, and (iv) has no outstanding Liability under any Environmental Laws and are not aware of any facts that could reasonably result in Liability under any Environmental Laws, in each of the foregoing clauses of this clause (a), except to the extent, either individually or in the aggregate, a Material Adverse Effect could not reasonably be expected to occur, and (b) have provided Agent and Lenders with copies of all environmental reports, assessments and other documents in any way related to any actual or potential Liability under any Environmental Laws.
Section 7.26    Margin Stock. Neither any Credit Party nor any of their Subsidiaries is engaged in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulation U of the Board of Governors of the Federal Reserve System), and no part of the proceeds from any Note will be used (a) to directly purchase or carry any margin stock, (b) to the knowledge of the Credit Parties, without inquiry, to extend credit to others for the purpose of purchasing or carrying any margin stock, or (c) for any purpose that violates the provisions of Regulation T, U or X of the Board of Governors of the Federal Reserve System.
Section 7.27    ERISA. Except as set forth on Schedule 7.27, neither any Credit Party nor any ERISA Affiliate (a) maintains or has maintained any Pension Plan, (b) contributes or has contributed to any Multiemployer Plan or (c) provides or has provided post-retirement medical or insurance benefits with respect to employees or former employees (other than benefits required under Section 601 of ERISA, Section 4980B of the Code or applicable federal or state law). Except as set forth on Schedule 7.27, neither any Credit Party nor any ERISA Affiliate has received any notice or has any knowledge to the effect that it is not in material compliance with any of the requirements of ERISA, the Code or applicable federal or state law with respect to any Employee Benefit Plan. No ERISA Event exists. Each Employee Benefit Plan which is
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intended to qualify under the Code has received a favorable determination letter (or opinion letter in the case of a prototype Employee Benefit Plan) to the effect that such Employee Benefit Plan is so qualified and to Credit Parties’ knowledge, there exists no reasonable basis for the revocation of such determination or opinion letter. Neither any Credit Party nor any ERISA Affiliate has (i) any unpaid minimum required contributions under any Plan, whether or not waived, (ii) any liability under Section 4201 or 4243 of ERISA for any withdrawal, or partial withdrawal, from any Multiemployer Plan, (iii) a Pension Plan that is “at risk” within the meaning of Section 430 of the Code, (iv) received notice from any Multiemployer Plan that it is either in endangered or critical status within the meaning of Section 432 of the Code or (v) any material liability or knowledge of any facts or circumstances which reasonably might be expected to result in any material liability to the PBGC, the Internal Revenue Service, the Department of Labor or any participant in connection with any Employee Benefit Plan (other than routine claims for benefits under the Employee Benefit Plan).
Section 7.28    Investment Company. Neither any Credit Party nor any of their Subsidiaries is a “registered investment company” or a company “controlled” by a “registered investment company” or a “principal underwriter” of a “registered investment company” as such terms are defined in the Investment Company Act of 1940, as amended.
Section 7.29    U.S. Real Property Holding Corporation. Neither any Credit Party nor any of their Subsidiaries is, nor has it ever been, a U.S. real property holding corporation within the meaning of Section 897 of the Code, as amended, and the Credit Parties will so certify upon the request of Agent.
Section 7.30    Internal Accounting and Disclosure Controls. The Credit Parties and their Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset and liability accountability, (iii) access to assets or incurrence of liabilities is permitted only in accordance with management’s general or specific authorization and (iv) the recorded accountability for assets and liabilities is compared with the existing assets and liabilities at reasonable intervals and appropriate action is taken with respect to any difference. During the twelve (12) months immediately prior to the Restatement Closing Date, neither any Credit Party nor any of their Subsidiaries has received any written notice or correspondence from any accountant relating to any potential material weakness in any part of the system of internal accounting controls of any Credit Party or any of their Subsidiaries.
Section 7.31    Reserved.
Section 7.32    Transactions With Affiliates. Except (i) as set forth on Schedule 7.32 and (ii) for transactions that have been entered into on terms no less favorable to the Credit Parties and their Subsidiaries than those that might be obtained at the time from a Person who is not an officer, director or employee, none of the officers, directors or employees of any Credit Party or any of their Subsidiaries is presently a party to any transaction with any Credit Party or any of their Subsidiaries (other than for ordinary course services as employees, officers or
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directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any such officer, director or employee or, to the knowledge of the Credit Parties, any corporation, partnership, trust or other entity in which any such officer, director, or employee has a substantial interest or is an officer, director, trustee or partner.
Section 7.33    Acknowledgment Regarding Holders’ Purchase of Notes. Each of the Credit Parties acknowledges and agrees that each Holder is acting solely in the capacity of an arm’s length lender with respect to the Transaction Documents and the transactions contemplated hereby and thereby and that no Holder is (i) an officer or director of any Credit Party or any of their Subsidiaries, or (ii) an Affiliate of any Credit Party or any of their Subsidiaries. Each of the Credit Parties further acknowledges that no Holder is acting as a financial advisor or fiduciary of any Credit Party or any of their Subsidiaries (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated hereby and thereby, and any advice given by a Holder or any of their representatives or agents, including, without limitation, the Agent, in connection with the Transaction Documents and the transactions contemplated hereby and thereby is merely incidental to such Holder’s receipt of the Notes. Each of the Credit Parties further represents to each Holder that each Credit Party’s decision to enter into the Transaction Documents to which it is a party have been based solely on the independent evaluation by such Person and its respective representatives.
Section 7.34    Reserved.
Section 7.35    Insurance. Credit Parties and their Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which Credit Parties and their Subsidiaries are engaged. Neither any Credit Party nor any of their Subsidiaries believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse Effect.
Section 7.36    Full Disclosure. None of the representations or warranties made by any Credit Party or any of their Subsidiaries in the Transaction Documents as of the date such representations and warranties are made or deemed made, and none of the statements contained in each exhibit, report, statement or certificate furnished by or on behalf of any Credit Party or any of their Subsidiaries in connection with the Transaction Documents, contains any untrue statement of a material fact or omits any material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances under which they are made, not misleading as of the time when made or delivered.
Section 7.37    Employee Relations. Neither any Credit Party nor any of their Subsidiaries is a party to any collective bargaining agreement or employs any member of a union in such person’s capacity as a union member or to perform union labor work. Each of the Credit Parties believes that its relations with its employees are good. As of the Restatement Closing Date, no executive officer of any Credit Party or any of their Subsidiaries has notified such Credit Party or such Subsidiary that such officer intends to leave such Credit Party or such
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Subsidiary or otherwise terminate such officer’s employment with such Credit Party or such Subsidiary. As of the Restatement Closing Date, no executive officer of any Credit Party or any of their Subsidiaries, to the knowledge of the Credit Parties, is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement, noncompetition agreement, or any other contract or agreement or any restrictive covenant. Each Credit Party and their Subsidiaries are in compliance with all federal, state, local and foreign laws and regulations respecting labor, employment and employment practices and benefits, terms and conditions of employment and wages and hours, except where failure to be in compliance would not, either individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.
Section 7.38    Certain Other Representations and Warranties . Each Consumer Loan Agreement is a valid and subsisting agreement and is in full force and effect in accordance with the terms thereof, no default or event of default exists under any such Consumer Loan Agreement and no party to any such Consumer Loan Agreement has any accrued right to terminate any such Consumer Loan Agreement on account of a default by any Person or otherwise, except in each case, where the same would not, either individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.
Section 7.39    Patriot Act. To the extent applicable, the Credit Parties and their Subsidiaries are in compliance, in all material respects, with (i) the Trading with the Enemy Act, as amended, and each of the foreign assets control regulations of the United States Treasury Department and any other enabling legislation or executive order relating thereto, and (ii) the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)).
Section 7.40    Material Contracts. Schedule 7.40 contains a true, correct and complete list of all the Material Contracts (other than those of the type described in clause (a) of the definition thereof) of the Credit Parties and their Subsidiaries (which Schedule shall be updated by the Credit Parties by written notice to Agent promptly following the execution of any such additional Material Contract following the Restatement Closing Date), and all such Material Contracts are in full force and effect and, to Credit Parties’ knowledge, no defaults currently exist thereunder.
Article 8
COVENANTS

Section 8.1    Financial Covenants. Solely with respect to the calendar month ending February 28, 2019, the Credit Parties shall, and shall cause their Subsidiaries to, comply with the financial covenants set forth in Section 8.1 of the Original Agreement prior to the effectiveness of this Agreement and thereafter, the Credit Parties shall, and shall cause their Subsidiaries to, comply with the following financial covenants:
(a)Loan to Value Ratio. The Credit Parties shall not permit the Loan to Value Ratio calculated as of the last day of any calendar month (commencing with the calendar
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month of February 2019) to be greater than the ratio in the table set forth in the definition of Borrowing Base.0.85.
If as of any applicable testing date the Credit Parties fail to comply with the financial covenant contained in this Section 8.1(a) (a “LTV Covenant Default”), then the Credit Parties shall have the obligation to cure such breach (the “LTV Covenant Cure Obligation”) within thirty (30) days of the occurrence thereof by causing Elevate Credit Parent to contribute to the Borrower cash (in the form of a capital contribution and not in the form of an extension of credit or other Indebtedness) in an aggregate amount that would cause the Credit Parties to be in pro forma compliance with such covenant as of such testing date (such amount, the “LTV Covenant Cure Amount”). Until timely receipt of the LTV Covenant Cure Amount for any applicable LTV Covenant Default, an Event of Default shall be deemed to exist for all purposes of this Agreement and the other Transaction Documents; provided, that during such thirty (30) day cure period (unless the Agent shall have been notified that such LTV Covenant Cure Amount shall not be made) neither the Agent nor any Lender or Holder shall exercise any enforcement remedy against the Credit Parties or any of their Subsidiaries or any of their respective properties solely as a result of the existence of the applicable LTV Covenant Default and; provided, further, that upon timely receipt of such LTV Covenant Cure Amount, the underlying LTV Covenant Default shall no longer be deemed to be continuing. Notwithstanding anything to the contrary in this Section 8.1(a), in no event shall the Credit Parties be permitted to cure more than three (3) LTV Covenant Defaults during the term of this Agreement.
(b)Corporate Cash. The Credit Parties shall not permit Corporate Cash at any time (x) prior to December 31, 2019 to be less than the greater of (i) $5,000,000 or (ii) in the event that Elevate Credit Parent enters into any share buyback, $10,000,000 and (y) after December 31, 2019 to be less than the greater of (i) $7,500,000 or (ii) in the event that Elevate Credit Parent enters into any share buyback, $10,000,000.
(c)Total Cash. The Credit Parties shall cause Total Cash as of the last day of each calendar month to be greater than or equal to five percent (5%) of total principal amount of Receivables of Elevate Credit Parent and its Subsidiaries.

(d)Book Value of Equity. The Credit Parties shall not permit the Book Value of Equity, calculated as of the last day of any calendar month, to be less than $85,000,000, as may be amended or modified by mutual agreement between the parties hereto in good faith; provided that the parties agree that any reductions or discounts required by applicable Current Expected Credit Losses (CECL) standards shall be carved out.

(e)Past Due Roll Rate. The Credit Parties shall not permit the Trailing Past Due Roll Rate, calculated as of the last day of any calendar month (commencing with the calendar month of February 2019) to be greater than eight percent (8%).

(f)Four Month Vintage Charge Off Rate. The Credit Parties shall not permit the Trailing Four Month Charge Off Rate to be greater than eleven percent (11%).

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(g)Twelve Month Vintage Charge Off Rate. The Credit Parties shall not permit the Trailing Twelve Month Charge Off Rate to be greater than twenty-three percent (23%).

(h)Excess Spread. The Credit Parties shall not permit the Trailing Excess Spread to be less than two and three-quarters percent (2.75%).

Section 8.2    Deliveries. The Borrower agrees to deliver the following to the Agent via electronic (e-mail) transmission or other written means acceptable to the Agent:
(a)Monthly Financial Statements. As soon as available and in any event within twenty-one (21) days after the end of each month (including December), the unaudited consolidated balance sheets of the Credit Parties and their Subsidiaries as at the end of such month and the related consolidated statements of operations, stockholders’ equity and cash flows of Elevate Credit Parent and its Subsidiaries for such month and for the period from the beginning of the then current Fiscal Year to the end of such month, all in reasonable detail, and certified by the chief financial officer of Elevate Credit Parent (or other authorized executive officer performing a similar function) as being true and correct and fairly presenting in accordance with GAAP, the financial position and results of operations of the Elevate Credit Parent and its Subsidiaries subject to normal year-end adjustments and absence of footnote disclosure;
(b)Annual Financial Statements. As soon as available, and in any event within one hundred twenty (120) days after the end of each Fiscal Year, the audited consolidated balance sheets of Elevate Credit Parent and its Subsidiaries as at the end of such Fiscal Year and the related consolidated statements of operations, stockholders’ equity and cash flows of the Credit Parties and their Subsidiaries for such Fiscal Year, setting forth in each case in comparative form the corresponding figures for the previous Fiscal Year, in reasonable detail and certified by the chief financial officer of Elevate Credit Parent (or other authorized executive officer performing a similar function) as being true and correct and fairly presenting in accordance with GAAP, the financial position and results of operations of Elevate Credit Parent and its Subsidiaries, as applicable, accompanied by a customary unqualified opinion of an independent accounting firm acceptable to Agent;

(c)Compliance Certificate and Borrowing Base Certificate. On the dates that the financial statements under clause (a) above are delivered, a duly completed Compliance Certificate and a duly completed Borrowing Base Certificate, each with appropriate insertions, dated the date of the applicable monthly financial statements, and signed on behalf of the Borrower by the chief financial officer of the Borrower (or other authorized executive officer performing a similar function), in the case of each Compliance Certificate (i) containing a computation of the covenants set forth in Section 8.1 hereof, (ii) indicating whether or not the Credit Parties are in compliance with each covenant set forth in Article 8 of this Agreement and whether each representation and warranty contained in Article 7 of this Agreement is true and correct in all material respects (without duplication of any materiality qualifiers) as though made on such date (except for representations and warranties that speak as of a specific date, which
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representations and warranties are true and correct in all material respects (without duplication of any materiality qualifiers as of such date)), and (iii) to the effect that such officer has not become aware of any Event of Default (or event or circumstance that, with the passage of time, the giving of notice, or both, would become an Event of Default) that has occurred and is continuing or, if there is any such Event of Default (or event or circumstance that, with the passage of time, the giving of notice, or both, would become an Event of Default), describing it and the steps, if any, being taken to cure it;

(d)Monthly Data Tape. On the dates that the financial statements under clause (a) above are delivered, a data tape in a form acceptable to Agent in its sole discretion that contains information as to Borrower’s loan portfolio submitted as of the most recent month end. The Credit Parties shall provide a data tape to Agent promptly after the Restatement Closing Date but in no event after March 21, 2019.

(e)Monthly Reporting Package. On the dates that the financial statements under clause (a) above are delivered, a monthly operations reporting package, in form and detail reasonably acceptable to the Agent.

Section 8.3    Notices. The Borrower agrees to deliver the following to the Agent via electronic (e-mail) transmission or other written means acceptable to the Agent:
(a)Collateral Information. Upon request of Agent, a certificate of one of the duly authorized officers of the Borrower (i) either confirming that there has been no change in the information set forth in the perfection certificate executed and delivered to the Agent on the Restatement Closing Date since such date or the date of the most recent certificate delivered pursuant to this Section and/or identifying such changes, and (ii) certifying that all UCC financing statements (including fixtures filings, as applicable) and other appropriate filings, recordings and registrations have been filed of record in each governmental, municipal and other appropriate office in each jurisdiction identified pursuant to clause (i) above (or in such certificate) to the extent necessary to effect, protect and perfect the security interests under the Security Documents for a period of not less than 18 months after the date of such certificate (except as noted therein with respect to any continuation statements to be filed within such period);
(b)Auditor Reports. Promptly upon receipt thereof, copies of any reports submitted by the Credit Parties’ independent public accountants, if any, in connection with each annual, interim or special audit or review of any type of the financial statements or internal control systems of any Credit Party or any of their Subsidiaries made by such accountants, including any comment letters submitted by such accountants to management of any Credit Party or any of their Subsidiaries in connection with their services;

(c)Notice of Default. Promptly upon any officer of a Credit Party obtaining knowledge (i) of any condition or event that constitutes an Event of Default (or event or circumstance that, with the passage of time, the giving of notice, or both, would become an Event of Default) or that notice has been given to a Credit Party with respect thereto; (ii) that any
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Person has given any notice to the Credit Party or taken any other action with respect to any event or condition set forth in Article 10; or (iii) of the occurrence of any event or change that has caused or evidences, either in any case or in the aggregate, a Material Adverse Effect, a certificate of its chief executive officer or chief financial officer (or other authorized executive officer performing a similar function) specifying the nature and period of existence of such condition, event or change, or specifying the notice given and action taken by any such Person and the nature of such claimed Event of Default, default, event or condition, and the action(s) the Credit Parties have taken, are taking and propose to take with respect thereto;
(d)Notice of Litigation. Promptly upon any officer of a Credit Party obtaining knowledge of (i) the institution of, or non-frivolous threat of, any adverse Proceeding against or affecting any Credit Party, or any of the Credit Parties’ Subsidiaries or any of their respective officers or directors not previously disclosed in writing by the Credit Parties to the Agent, or (ii) any material development in any adverse Proceeding against or affecting any Credit Party, or any of the Credit Parties’ Subsidiaries or any of their respective officers or directors that, in the case of either clause (i) or (ii) if adversely determined, could be reasonably expected to have a Material Adverse Effect, or seeks to enjoin or otherwise prevent the consummation of, or to recover any damages or obtain relief as a result of, the transactions contemplated hereby, written notice thereof together with such other information as may be reasonably available to the Credit Parties to enable the Agent, the Lenders and the Holders and their counsel to evaluate such matters (it being agreed and understood that as of the First Amendment Effective Date the Credit Parties have timely complied with their notice obligations, if any, under this clause (d) with respect to the Proceedings described on Schedule 8.3(d));

(e)ERISA. (i) Promptly upon becoming aware of the occurrence of or forthcoming occurrence of any ERISA Event, a written notice specifying the nature thereof, the action(s) any Credit Party or any of their Subsidiaries or any of their respective ERISA Affiliates has taken, is taking or proposes to take with respect thereto and, when known, any action taken or threatened by the Internal Revenue Service, the Department of Labor or the PBGC with respect thereto; and (ii) with reasonable promptness, copies of (1) each Schedule B (Actuarial Information) to the annual report (Form 5500 Series) filed by any Credit Party, any of their Subsidiaries or any of their respective ERISA Affiliates with the Internal Revenue Service with respect to each Pension Plan; (2) all notices received by the Credit Party, any of its Subsidiaries or any of their respective ERISA Affiliates from a Multiemployer Plan sponsor concerning an ERISA Event; and (3) copies of such other documents or governmental reports or filings relating to any Employee Benefit Plan as the Agent shall reasonably request;

(f)Insurance Report. Promptly upon request of the Agent, a report by the Credit Parties’ insurance broker(s) in form and substance satisfactory to the Agent outlining all material insurance coverage maintained as of the date of such report by the Credit Parties;

(g)Environmental Reports and Audits. As soon as practicable following receipt thereof, copies of all environmental audits and reports with respect to environmental matters at any facility or property used by any Credit Party or any of their Subsidiaries or which relate to any environmental liabilities of any Credit Party or any of their Subsidiaries which, in
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any such case, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect;

(h)Corporate Information. Fifteen (15) days’ prior written notice of any change (i) in any Credit Parties’ corporate name, (ii) in any Credit Parties’ identity or organizational structure, (iii) in any Credit Parties’ jurisdiction of organization, or (iv) in any Credit Parties’ Federal Taxpayer Identification Number or state organizational identification number. The Credit Parties agree not to effect or permit any change referred to in the preceding sentence unless all filings have been made under the UCC or otherwise and all other actions that are required in order for the Agent to continue at all times following such change to have a valid, legal and perfected security interest in all the Collateral as contemplated in the Security Agreement, the Security Documents and other Transaction Documents; provided, the foregoing notwithstanding any of the Elevate Credit Subsidiaries (other than the Borrower) may suspend its operations in any jurisdiction in which it operates and dissolve as a result of a decision by the Credit Parties to exit one or more markets from time to time;

(i)Tax Returns. Within ten (10) days following request by the Agent, copies of each federal income tax return filed by or on behalf of Credit Parties and requested by the Agent;

(j)Event of Loss. Promptly (and in any event within three (3) Business Days) notice of any claim with respect to any liability against any Credit Party or any of their Subsidiaries that (i) is in excess of $250,000 or (ii) could reasonably be expected to result in a Material Adverse Effect.

(k)Program and Consumer Loan Portfolio Reporting. (i) No later than the fifth (5th) Business Day after the end of each calendar week, a performance report of the Program as of the end of business on Friday of such calendar week, in form and substance reasonably acceptable to the Agent and (ii) together with the delivery of the financial statements and reports pursuant to subsections 8.2(a) and (b), a summary report with respect to the Consumer Loan portfolio of the Credit Parties containing such information as may be reasonably requested by Agent.

(l)Other Information. Promptly upon their becoming available, deliver copies of (i) all financial statements, reports, notices and proxy statements sent or made available generally by any Credit Party to its security holders acting in such capacity or by any of their Subsidiaries to their security holders other than another Credit Party or another Subsidiary, (ii) all regular and periodic reports and all registration statements and prospectuses, if any, filed by any Credit Party or any of their Subsidiaries with any securities exchange or with the SEC or any governmental or private regulatory authority, (iii) all press releases and other statements made available generally by any Credit Party or any of their Subsidiaries to the public concerning material developments in the business of any Credit Party or any of their Subsidiaries, (iv) subject to limitations imposed by applicable law, all documents and information furnished to Governmental Authorities in connection with any investigation of any Credit Party or any of their Subsidiaries (other than any routine inquiry) and (v) such other information and data with
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respect to any Credit Party or any of their Subsidiaries as from time to time may be reasonably requested by the Agent.

Section 8.4    Rank. All Indebtedness due under the Notes shall be senior in right of payment, whether with respect to payment of redemptions, interest, damages or upon liquidation or dissolution or otherwise, to all other current and future Indebtedness of the Credit Parties and their Subsidiaries.
Section 8.5    Incurrence of Indebtedness. No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to, directly or indirectly, create, incur or guarantee, assume, or suffer to exist any Indebtedness or engage in any sale and leaseback, synthetic lease or similar transaction, other than (i) the Obligations and (ii) Permitted Indebtedness.
Section 8.6    Existence of Liens. No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to, directly or indirectly, allow or suffer to exist any Liens, other than Permitted Liens.
Section 8.7    Restricted Payments. No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to, directly or indirectly,
(a)declare or pay any dividend or make any other payment or distribution (or interest on any unpaid dividend, charge, fee or other distribution) (whether in cash or in kind) on account of any Credit Party’s or any of their Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation involving any Credit Party or any of their Subsidiaries) or to the direct or indirect holders of any Credit Party’s or any of their Subsidiaries’ Equity Interests in their capacity as such, except that:
(i)the Credit Parties may pay dividends (A) solely in common stock and (B) with the prior written consent of the Agent (not to be unreasonably withheld, conditioned or delayed) in cash to the holders of their common Equity Interests; provided, that with respect to this clause (B), no Event of Default (or event or circumstance that, with the passage of time, the giving of notice, or both, would become an Event of Default) has occurred and is continuing or would arise as a result of such payment;
(ii)the Borrower may make monthly distributions of funds to Elevate Credit Parent commencing on the fifth (5th) Business Day after the financial statements under Section 8.2(a) shall have been delivered for the applicable month; provided, that each of the following conditions are satisfied:
(A)no Event of Default (or event or circumstance that, with the passage of time, the giving of notice, or both, would become an Event of Default) has occurred and is continuing or would arise as a result of such payment; and
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(B)after giving effect to such payment, (1) the Credit Parties are in pro forma compliance with the covenant set forth in Section 8.1(a) and (2) the Debt-to-Equity Ratio of the Borrower shall not be more than 9-to-1; and
(iii)the Elevate Credit Subsidiaries may make distributions or remit payments received on account of the undivided portion of the Consumer Loans to further the purposes of, and in compliance with, the Transaction Documents.
(b)repurchase, redeem, repay, defease, retire, distribute any dividend or share premium reserve or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation involving any Credit Party or any of their Subsidiaries) any Equity Interests of any Credit Party or any of their Subsidiaries or any direct or indirect parent of any Credit Party or any of their Subsidiaries except in connection with the termination of an employee’s employment with any Credit Party; provided, that each of the following conditions are satisfied:
(i)no Event of Default (or event or circumstance that, with the passage of time, the giving of notice, or both, would become an Event of Default) has occurred and is continuing or would arise as a result of such repurchase, redemption, repayment, defeasance, retirement, distribution, acquisition or retirement for value of any such Equity Interests;
(ii)after giving effect to such repurchase, redemption, repayment, defeasance, retirement, distribution, acquisition or retirement for value of any such Equity Interests, (A) the Credit Parties are in pro forma compliance with the covenants set forth in Section 8.1 and (B) the Debt-to-Equity Ratio of the Borrower shall not be more than 9-to-1; and
(iii)except for any share buyback program, the aggregate amount of all such repurchases, redemptions, repayments, defeasances, retirements, distributions, acquisitions or retirements for value of any such Equity Interests shall not exceed $1,000,000 in any Fiscal Year;

(c)make any payment (including by setoff) on or with respect to, accelerate the maturity of, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness of any Credit Party or any of their Subsidiaries (or set aside or escrow any funds for any such purpose), except for (i) payments of principal, interest and other amounts constituting Obligations and (ii) subject to the terms of applicable subordination terms, if any, regularly scheduled non accelerated payments of principal, interest and other amounts under Permitted Indebtedness; or
(d)pay any management, consulting or similar fees to any Affiliate of any Credit Party or to any officer, director or employee of any Credit Party or any Affiliate of any Credit Party, except for the avoidance of doubt, payments of salaries, advances, bonuses (including pre-funded bonuses) or stock incentives of employees of the Credit Parties in the ordinary course of business.
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Section 8.8    Mergers; Acquisitions; Asset Sales. No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to, directly or indirectly, without Agent’s prior written consent, (a) be a party to any merger or consolidation, or Acquisition or (b) consummate any Asset Sale other than a Permitted Disposition. For the avoidance of doubt, notwithstanding anything to the contrary contained herein or in any other Transaction Document to the contrary, (i) no Credit Party shall enter into (or agree to enter into) any Division/Series Transaction, or permit any of its Subsidiaries to enter into (or agree to enter into), any Division/Series Transaction and (ii) none of the provisions in this Agreement or any other Transaction Document shall be deemed to permit any Division/Series Transaction without the prior written consent of the Agent.
Section 8.9    No Further Negative Pledges. No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to, enter into, assume or become subject to any agreement prohibiting or otherwise restricting the existence of any Lien upon any of their properties or assets in favor of Agent or the Holders as set forth under the Transaction Documents, whether now owned or hereafter acquired, or requiring the grant of any security for any obligation if such property or asset is given as security under the Transaction Documents, except in connection with any Permitted Liens or any document or instrument governing any Permitted Liens, provided that any such restriction contained therein relates only to the property or asset subject to such Permitted Liens (or proceeds thereof).
Section 8.10    Affiliate Transactions. No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to, directly or indirectly, enter into or permit to exist any transaction (including the purchase, sale, lease or exchange of any property or the rendering of any service) with any Affiliate of any Credit Party or any of their Subsidiaries, unless such transaction is on terms that are no less favorable to such Credit Party or such Subsidiary, as the case may be, than those that might be obtained at the time from a Person who is not an Affiliate and, unless the same shall not require payments thereunder in an amount exceeding $500,000 in the aggregate, are fully disclosed in writing to Agent prior to consummation thereof.
Section 8.11    Insurance.
(a)The Credit Parties shall keep the Collateral properly housed and insured against loss or damage by fire, theft, explosion, sprinklers, collision (in the case of motor vehicles) and such other risks as are customarily insured against by Persons engaged in businesses similar to that of the Credit Parties, with such companies, in such amounts, with such deductibles and under policies in such form as shall be reasonably satisfactory to the Agent. Certificates of insurance or, if requested by the Agent, original (or certified) copies of such policies of insurance have been or shall be, no later than the Restatement Closing Date, delivered to the Agent, and shall contain an endorsement, in form and substance reasonably acceptable to Agent, showing loss under such insurance policies payable to the Agent, for the benefit of the Holders. Such endorsement, or an independent instrument furnished to the Agent, shall provide that the insurance company shall give the Agent at least thirty (30) days’ written notice before any such policy of insurance is altered or canceled and that no act, whether willful or negligent, or default of a Credit Party or any other Person shall affect the right of the Agent to recover
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under such policy of insurance in case of loss or damage. Each Credit Party hereby directs all insurers under all policies of insurance to pay all proceeds payable thereunder directly to the Agent. Each Credit Party irrevocably makes, constitutes and appoints the Agent (and all officers, employees or agents designated by the Agent) as such Person’s true and lawful attorney (and agent-in-fact) for the purpose of making, settling and adjusting claims under such policies of insurance, endorsing the name of such Person on any check, draft, instrument or other item of payment for the proceeds of such policies of insurance and making all determinations and decisions with respect to such policies of insurance, provided however, that if no Event of Default shall have occurred and be continuing, such Credit Party may make, settle and adjust claims involving less than $100,000 in the aggregate without the Agent’s consent.
(b)The Credit Parties shall maintain, at their expense, such public liability and third-party property damage insurance as is customary for Persons engaged in businesses similar to that of the Credit Parties with such companies and in such amounts with such deductibles and under policies in such form as shall be reasonably satisfactory to the Agent in light of such customs and certificates of insurance or, if requested by the Agent, original (or certified) copies of such policies have been or shall be, no later than the Restatement Closing Date, delivered to the Agent; each such policy shall contain an endorsement showing the Agent as additional insured thereunder and providing that the insurance company shall give the Agent at least thirty (30) days’ written notice before any such policy shall be altered or canceled.

(c)If any Credit Party at any time or times hereafter shall fail to obtain or maintain any of the policies of insurance required above or to pay any premium relating thereto, then the Agent, without waiving or releasing any obligation or default by the Credit Parties hereunder, may (but shall be under no obligation to) obtain and maintain such policies of insurance and pay such premiums and take such other actions with respect thereto as the Agent reasonably deems advisable. Such insurance, if obtained by the Agent, may, but need not, protect each Credit Parties’ interests or pay any claim made by or against any Credit Party with respect to the Collateral. Such insurance may be more expensive than the cost of insurance the Credit Parties may be able to obtain on their own and may be cancelled only upon the Credit Parties providing evidence that they have obtained the insurance as required above. All sums disbursed by the Agent in connection with any such actions, including, without limitation, court costs, expenses, other charges relating thereto and reasonable attorneys’ fees, shall constitute part of the Obligations due and owing hereunder, shall be payable on demand by the Credit Parties to the Agent and, until paid, shall bear interest at the Default Rate.

Section 8.12    Corporate Existence and Maintenance of Properties. Each Credit Party shall, and each Credit Party shall cause each of its Subsidiaries to, maintain and preserve (a) its existence and good standing in the jurisdiction of its organization or incorporation and (b) its qualification to do business and good standing in each jurisdiction where the nature of its business makes such qualification necessary (other than such jurisdictions in which the failure to be so qualified or in good standing could not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect). Each Credit Party shall, and each Credit Party shall cause each of its Subsidiaries to, maintain or cause to be maintained in good repair, working order and condition, ordinary wear and tear excepted, all material properties used or
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useful in the business of the Credit Parties and their Subsidiaries and from time to time will make or cause to be made all appropriate repairs, renewals and replacements thereof.
Section 8.13    Non-circumvention. Each Credit Party hereby covenants and agrees that neither any of the Credit Parties nor any of their Subsidiaries will, by amendment of its certificate of incorporation, certificate of formation, limited liability company agreement, bylaws, or other governing documents, or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Agreement or the other Transaction Documents, and will at all times in good faith carry out all of the provisions of this Agreement and the other Transaction Documents and take all reasonable action as may be required to protect the rights of the Agent, the Lenders and the Holders.
Section 8.14    Change in Business; Change in Accounting; Elevate Credit. The Credit Parties shall not engage in any line of business other than the businesses engaged in on the Restatement Closing Date and activities reasonably incident thereto. The Credit Parties shall not (a) make any significant change in accounting treatment or reporting practices, except as required by GAAP, (b) change their Fiscal Year; method for determining fiscal quarters of any Credit Party or of any Subsidiary of any Credit Party, (c) change their name as it appears in official filings in its jurisdiction of organization or (d) change their jurisdiction of organization, in the case of clauses (c) and (d), without providing written notice to Agent no later than thirty (30) days following the occurrence of any such change. Elevate Credit Parent shall not trade, carry on any business, own any assets or incur any liabilities except for:
(a)the provision of administrative services (excluding treasury services) to its Subsidiaries of a type customarily provided by a holding company to its Subsidiaries;
(b)ownership of shares in its Subsidiaries, intra-company debit balances, intra-company credit balances and other credit balances in bank accounts, cash and Cash Equivalent Investments but only if those shares, credit balances, cash and Cash Equivalent Investments constitute Collateral; and

(c)any liabilities under the Transaction Documents to which it is a party and professional fees and administration costs in the ordinary course of business as a holding company.

Section 8.15    U.S. Real Property Holding Corporation. None of the Credit Parties shall become a U.S. real property holding corporation or permit or cause its shares to be U.S. real property interests, within the meaning of Section 897 of the Code.
Section 8.16    Compliance with Laws. No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to, fail to (a) comply in all material respects with the requirements of all applicable laws, rules, regulations and orders of any Governmental Authority (including, without limitation, all Environmental Laws and the Requirements) and (b) preserve and maintain in full force and effect all material rights, privileges, qualifications, permits, licenses and
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franchises necessary in the normal conduct of its business. Each Holder is deemed to agree and represent that the Issuer (or its agents or representatives including the Agent) may (1) provide such information and documentation and any other information concerning its investment in such Notes to the Cayman Islands Tax Information Authority, the U.S. Internal Revenue Service and any other relevant tax authority, in each case to the extent required by applicable law, and (2) take such other steps as the deem necessary or helpful to comply with FATCA.
Section 8.17    Additional Collateral. With respect to any Property acquired after the Restatement Closing Date by any Credit Party as to which the Agent, for the benefit of the Holders does not have a perfected Lien, such Credit Party shall promptly (i) execute and deliver to the Agent, for the benefit of the Holders or its agent such amendments to the Security Documents or such other documents as the Agent, for the benefit of the Holders deems necessary or advisable to grant to the Agent, for the benefit of the Holders, a security interest in such Property and (ii) take all other actions necessary or advisable to grant to the Agent, for the benefit of the Holders, a perfected first priority (subject to Permitted Liens) security interest in such Property, including, without limitation, the filing of UCC financing statements in such jurisdictions as may be required by the Security Documents or by law or as may be requested by the Agent. If at any time during the existence of an Event of Default, Agent seeks to collect or liquidate Collateral, the Credit Parties will use their best efforts to assist Agent in any such efforts, including effectuating a sale of such Collateral.
Section 8.18    Audit Rights; Field Exams; Appraisals; Meetings; Books and Records.
(a)The Credit Parties shall, upon reasonable notice and during reasonable business hours (except during the continuance of an Event of Default when no such limitations shall apply), subject to reasonable safety and security procedures, and at the Credit Parties’ sole cost and expense, permit the Agent and each Holder (or any of their respective designated representatives) to visit and inspect any of the properties of any Credit Party or any of their Subsidiaries, to examine the books of account of any Credit Party or any of their Subsidiaries (and to make copies thereof and extracts therefrom), and to discuss the affairs, finances and accounts of the Credit Parties and their Subsidiaries, and to be advised as to the same by their respective officers, and to conduct examinations and verifications (whether by internal commercial finance examiners or independent auditors), all at such reasonable times and intervals as the Agent and the Holders may reasonably request. In addition to the foregoing, Agent shall have the right, at the joint and several expense of the Credit Parties, to conduct a legal and/or regulatory review regarding the compliance of any Credit Parties, as well as the form of Consumer Loan Agreement (and any other agreements, certificates, instruments and documents related thereto), with all applicable laws, and any Credit Party shall cooperate with Agent and its internal and/or outside legal counsel or other third party advisors in such review. Except during the continuance of an Event of Default, the Credit Parties shall not exercise any of their rights pursuant to this Section 8.18(a) more than once per calendar year.
(b)The Credit Parties shall, upon reasonable notice and during reasonable business hours, subject to reasonable safety and security procedures, and at the Credit Parties’
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sole cost and expense, permit the Agent (or any of its designated representatives) and each Holder to conduct field exams of the Collateral, all at such reasonable times and intervals as the Agent may reasonably request. Except during the continuance of an Event of Default, the Credit Parties shall not exercise any of their rights pursuant to this Section 8.18(b) more than once per calendar year.

(c)The Credit Parties shall, at Agent’s request (which shall be made no more frequently than once during each calendar year unless an Event of Default shall have occurred and be continuing) and upon reasonable notice, and at the Credit Parties’ sole cost and expense, obtain an appraisal of the Collateral from an independent appraisal firm reasonably satisfactory to Agent.

(d)The Credit Parties will, upon the request of the Agent, participate in a meeting of the Agent and the Holders twice during each Fiscal Year to be held at the Credit Parties’ corporate offices (or at such other location as may be agreed to by the Borrower and the Agent) at such time as may be agreed to by the Borrower and the Agent.

(e)The Credit Parties shall, at the Credit Parties’ sole cost and expense, make all books and records of the Credit Parties available for review electronically by the Agent upon Agent’s request and subject to applicable Requirements with respect to disclosure of Customer Information.

Section 8.19    Additional Issuances of Debt Securities; Right of First Refusal on New Indebtedness. So long as any Notes are outstanding, none of the Credit Parties nor any of their Subsidiaries shall, directly or indirectly, offer, sell, grant any option to purchase, or otherwise dispose of (or announce any offer, sale, grant or any option to purchase or other disposition of) any of its debt securities or Equity Interests (including any preferred stock or other instrument or security) that may, in accordance with the terms thereof, be, at any time during its life, and under any circumstance, convertible into or exchangeable or exercisable for Indebtedness or debt securities, but excluding Permitted Indebtedness, without the prior written consent of the Agent; provided, that, if any Credit Party seeks to incur additional Indebtedness from time to time from any third-party, then in each such case, the Agent and its designees shall have a right of first refusal (but not an obligation) to provide such additional Indebtedness on the same terms and conditions as would be provided by such third-parties. The Borrower will give Agent written notice (a “ROFR Notice”) describing the additional Indebtedness and the terms and conditions thereof (collectively, the “New Indebtedness Opportunity”). The Agent and its designees shall have thirty (30) days from the date of the Agent’s receipt of a ROFR Notice to agree to provide such additional Indebtedness pursuant to the New Indebtedness Opportunity. If the Agent fails to exercise such right of first refusal within said thirty (30)-day period with respect to the New Indebtedness Opportunity, then the New Indebtedness Opportunity may be offered to such third-party upon the identical terms and conditions as are specified in the applicable ROFR Notice; provided, that in the event the New Indebtedness Opportunity has not been consummated by the applicable third-party within the one hundred (100)-day period from the date of the ROFR Notice, no New Indebtedness Opportunity may be offered by the Credit Parties to any third-party
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without first offering such New Indebtedness Opportunity to the Agent in the manner provided above.
Section 8.20    Post-Closing Obligations.
(a)The Credit Parties shall, (i) in a manner satisfactory to the Agent, cooperate with and assist the Agent, the Lenders and their respective attorneys, officers, employees, representatives, consultants and agents (collectively, the “Reviewing Parties” and each, a “Reviewing Party”) in connection with any Reviewing Party’s regulatory review and due diligence of the Credit Parties’ lending program for the solicitation, marketing, documentation, origination and servicing of Consumer Loans in each state in which any Credit Party originates Consumer Loans, (ii) review and consider in good faith any issues raised by, or comments, recommendations or guidance from, any Reviewing Party with respect to any such lending program (such issues, comments, recommendations and guidance, collectively, the “Diligence Issues”) and (iii) within 90 days (or such longer period as may be agreed to by the Agent in its sole discretion) of any Credit Party’s receipt of written notice of any Diligence Issues from a Reviewing Party, resolve or address any such Diligence Issues, in each case, in a manner satisfactory to the Agent.
Section 8.21    Use of Proceeds. The Borrower will use the proceeds from the sale of each Note solely (i) to purchase participation interests in loan and interest receivables (in any non-payday loan product), originated by Republic Bankin any Eligible Consumer Loans, (ii) to fund certain fees and expenses associated with the consummation of the transactions contemplated by this Agreement, and (iii) subject to excess availability under this facility, to transfer funds as permitted under this Agreement.
Section 8.22    Fees, Costs and Expenses. The Credit Parties, on behalf of themselves and the other Credit Parties, shall jointly and severally reimburse the Lenders and the Holders or their designee(s) and applicable legal counsel for reasonable and documented costs and expenses incurred in connection with the transactions contemplated by the Transaction Documents (including reasonable legal fees and disbursements in connection therewith, documentation and implementation of the transactions contemplated by the Transaction Documents and due diligence in connection therewith and ongoing fees and expenses of the Borrower), subject to the limitations set forth in Section 13.1 hereof, which amounts shall be paid by the Credit Parties to the Agent, for the benefit of itself and the Lenders and the Holders, on the Restatement Closing Date. After the Restatement Closing Date, the Guarantors agree to pay the ongoing fees, Taxes (if any) and expenses of the Borrower. In addition, the Credit Parties shall, within five (5) Business Days of receiving a request from the Agent therefor, reimburse the Agent for any additional reasonable legal fees incurred post-closing in connection with perfecting the Agent’s security interests and any additional filing or recording fees in connection therewith. The Credit Parties shall be responsible for the payment of, and shall pay, any placement agent’s fees, financial advisory fees, or broker’s commissions relating to or arising out of the transactions contemplated hereby, and shall hold the Agent, each Holder and each Lender harmless against, any liability, loss or expense (including, without limitation, reasonable attorney’s fees and out-of-pocket expenses) arising in connection with any claim relating to any such payment.
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Section 8.23    Modification of Organizational Documents and Certain Documents . The Credit Parties shall not, without the prior written consent of the Agent, (i) permit the charter, by-laws, memorandum and articles of association, or other organizational or incorporation documents of any Credit Party, or any Material Contract, to be amended or modified, or (ii) amend, supplement in a manner adverse to the Agent, any Lender or any Holder or otherwise modify, or waive any material rights, claims or remedies under, any of the Consumer Loan Agreements except with respect to a settlement or charge off thereunder in the ordinary course of business.
Section 8.24    Joinder. The Credit Parties shall notify the Agent in writing within the earlier of: (i) thirty (30) days of the formation or acquisition of any Subsidiaries; or (ii) the making of any Consumer Loans by any such newly formed or acquired Subsidiaries. For any Subsidiaries formed or acquired after the Restatement Closing Date, the Credit Parties shall at their own expense, within the time period set forth in the immediately preceding sentence, cause each such Subsidiary (provided, in the case of Foreign Subsidiaries, no 956 Impact would arise as a result thereof) to execute an instrument of joinder in the form attached hereto as Exhibit G (a “Joinder Agreement”), obligating such Subsidiary to any or all of the Transaction Documents deemed necessary or appropriate by the Agent and cause the applicable Person that owns the Equity Interests of such Subsidiary to pledge to the Holders 100% of the Equity Interests owned by it of each such Subsidiary formed or acquired after the Restatement Closing Date and execute and deliver all documents or instruments required thereunder or appropriate to perfect the security interest created thereby (provided that with respect to any First Tier Foreign Subsidiary, if a 956 Impact exists such pledge shall be limited to sixty-five percent (65%) of such Foreign Subsidiary’s outstanding voting Equity Interests and one hundred percent (100%) of such Foreign Subsidiary’s outstanding non-voting Equity Interests). In the event a Person becomes a Guarantor (a “New Guarantor”) pursuant to the Joinder Agreement, upon such execution the New Guarantor shall be bound by all the terms and conditions hereof and the other Transaction Documents to the same extent as though such New Guarantor had originally executed the Transaction Documents. The addition of a New Guarantor shall not in any manner affect the obligations of the other Credit Parties hereunder or thereunder. Each Credit Party, each Lender, each Holder and the Agent acknowledges that the schedules and exhibits hereto or thereto may be amended or modified in connection with the addition of any New Guarantor to reflect information relating to such New Guarantor. Compliance with this Section 8.24 shall not excuse any violation of Section 8.8 for failing to obtain Lender’s prior consent to a merger, consolidation or Acquisition. A “956 Impact” will be deemed to exist to the extent the issuance of a guaranty by, grant of a Lien by, or pledge of greater than two-thirds of the voting Equity Interests of, a Foreign Subsidiary would result in material incremental income tax liability under Section 956 of the Code to Elevate Credit Parent, taking into account actual anticipated repatriation of funds, foreign tax credits and other relevant factors.
Section 8.25    Investments. No Credit Party shall, and no Credit Party shall permit any of its Subsidiaries to, make or permit to exist any Investment in any other Person, except the following:
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(a)Cash Equivalent Investments, to the extent the Agent has a first priority security interest therein;
(b)bank deposits in the ordinary course of business, to the extent the Agent has a first priority security interest therein;

(c)Investments in securities of account debtors received pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of such account debtors;

(d)Investments owned by the Credit Parties and their Subsidiaries on the Restatement Closing Date as set forth on Schedule 8.25;

(e)(i) Domestic Credit Parties may maintain Investments in Foreign Subsidiaries in amounts not to exceed the outstanding amounts of such Investments as of the Restatement Closing Date plus additional Investments in Foreign Subsidiaries after the Restatement Closing Date to the extent expressly approved by Agent in advance in writing; provided, if the Investments described in the foregoing clause (i) are evidenced by notes, such notes shall be pledged to Agent, for the benefit of the Lenders, and have such terms as Agent may reasonably require; and (ii) Foreign Subsidiaries may make Investments in other Foreign Subsidiaries;

(f)Investments constituting cash equity contributions by Elevate Credit Parent in the Borrower, including, without limitation, cash equity contributions made in order to satisfy the LTV Covenant Cure Obligation, and Investments by Elevate Credit Parent in its other Subsidiaries that are Credit Parties; and

(g)Investments made by the Credit Parties (other than Elevate Credit Parent) constituting Consumer Loans to residents of the United States.

Section 8.26    Further Assurances. At any time or from time to time upon the request of the Agent, each Credit Party will, at its expense, promptly execute, acknowledge and deliver such further documents and do such other acts and things as the Agent may reasonably request in order to effect fully the purposes of the Transaction Documents. In furtherance and not in limitation of the foregoing, each Credit Party shall take such actions as the Agent may reasonably request from time to time to ensure that the Obligations are guaranteed by all Subsidiaries of the Credit Parties and secured by substantially all of the assets of the Credit Parties and their Subsidiaries (in each case provided, in the case of Foreign Subsidiaries, no 956 Impact would arise as a result thereof).
Section 8.27    Backup Servicer. At any time or from time to time upon the request of the Agent, the Borrower shall appoint, at Borrower’s sole expense, a Backup Servicer that is satisfactory to the Agent in Agent’s sole discretion and shall enter into a Backup Servicing Agreement that is satisfactory (including with respect to the Credit Parties’ obligations to cooperate with such Backup servicer and provide any data and other information and documents,
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including data tapes, to such Backup Servicer to allow Backup Servicer to perform its duties) to the Agent in Agent’s sole discretion.
Section 8.28    Claims Escrow Account.
(a)Within two (2) Business Days on or after the date in which (i) all Obligations not relating to any pending claim that are due to Lenders and Holders have been paid in full and (ii) the Credit Parties are aware of a pending claim, the Borrower shall establish and maintain a deposit account at a bank reasonable acceptable to Agent, in the form of time deposit or demand account (the “Claims Escrow Account”). Such Claims Escrow Account shall be a Blocked Account. The Borrower shall deposit in the Claims Escrow Account, no later than one (1) Business Day following receipt, fifty percent (50%) of the collections received by Borrower from all of the Consumer Loans until the Claims Escrow Account Funding Condition is satisfied. After a Claims Escrow Account is established pursuant to this Section 8.28 and subject to the rights of the parties under the Intercreditor Agreement, the Borrower shall be permitted to remit, prior to the satisfaction of the Claims Escrow Account Funding Condition, the fifty percent (50%) of the collections remaining after remitting to the Claims Escrow Account and, on and after the satisfaction of the Claims Escrow Account Funding Condition, one hundred percent (100%) of any collections to the applicable Elevate Credit Subsidiary in accordance with the applicable contractual terms between Borrower and such Elevate Credit Subsidiary. For the avoidance of doubt and notwithstanding Section 12.14, subject to the satisfaction of the foregoing requirements this Section 8.28(a), the Agent shall not seek to limit the ability of the Borrower to remit funds to the Elevate Credit Subsidiary under this Section 8.28(a) and such amounts shall be released without restriction from the Lien of the Financing Agreement.
(b)In the sole discretion of the Agent, funds deposited in the Claims Escrow Account may be used to satisfy any Obligations then due to Lenders, Holders and/or Agent.

Article 9
CROSS GUARANTY

Section 9.1    Cross-Guaranty. Each Guarantor, jointly and severally, hereby absolutely and unconditionally guarantees to the Agent, the Lenders, the Holders and their respective successors and assigns the full and prompt payment (whether at stated maturity, by acceleration or otherwise) and performance of, all Obligations. Each Guarantor agrees that its guaranty obligation hereunder is a continuing guaranty of payment and performance and not of collection, that its obligations under this Article 9 shall not be discharged until payment and performance, in full, of the Obligations under the Transaction Documents has occurred and all commitments (if any) to lend hereunder have been terminated, and that its obligations under this Article 9 shall be absolute and unconditional, irrespective of, and unaffected by:
(a)the genuineness, validity, regularity, enforceability or any future amendment of, or change in, this Agreement, any other Transaction Document or any other agreement, document or instrument to which any Credit Party is or may become a party;
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(b)the absence of any action to enforce this Agreement (including this Article 9) or any other Transaction Document or the waiver or consent by the Agent, the Lenders or the Holders with respect to any of the provisions thereof;

(c)the Insolvency of any Credit Party or Subsidiary; or

(d)any other action or circumstances that might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor.

Each Guarantor shall be regarded, and shall be in the same position, as principal debtor with respect to the obligations guaranteed hereunder.
Section 9.2    Waivers by Guarantors. Each Guarantor expressly waives all rights it may have now or in the future under any statute, or at common law, or at law or in equity, or otherwise, to compel the Agent, the Lenders or the Holders to marshal assets or to proceed in respect of the obligations guaranteed hereunder against any other Credit Party or Subsidiary, any other party or against any security for the payment and performance of the obligations under the Transaction Documents before proceeding against, or as a condition to proceeding against, such Guarantor. It is agreed among each Guarantor that the foregoing waivers are of the essence of the transaction contemplated by this Agreement and the other Transaction Documents and that, but for the provisions of this Article 9 and such waivers, the Agent, the Lenders and the Holders would decline to enter into this Agreement.
Section 9.3    Benefit of Guaranty. Each Guarantor agrees that the provisions of this Article 9 are for the benefit of the Agent, the Lenders, the Holders and their respective successors, transferees, endorsees and assigns, and nothing herein contained shall impair, as between any other Credit Party, on the one hand, and the Agent, the Lenders and the Holders, on the other hand, the obligations of such other Credit Party under the Transaction Documents.
Section 9.4    Waiver of Subrogation, Etc. Notwithstanding anything to the contrary in this Agreement or in any other Transaction Document, and except as set forth in Section 9.7, each Guarantor hereby expressly and irrevocably waives any and all rights at law or in equity to subrogation, reimbursement, exoneration, contribution, indemnification or set off and any and all defenses available to a surety, guarantor or accommodation co-obligor. Each Guarantor acknowledges and agrees that this waiver is intended to benefit the Agent, the Lenders and the Holders and shall not limit or otherwise affect such Guarantor’s liability hereunder or the enforceability of this Article 9, and that the Agent, the Lenders, the Holders and their respective successors and assigns are intended third party beneficiaries of the waivers and agreements set forth in this Section 9.4.
Section 9.5    Election of Remedies. If the Agent, the Lenders or the Holders may, under applicable law, proceed to realize their benefits under any of the Transaction Documents, the Agent, any of the Lenders or any of the Holders may, at their sole option, determine which of their remedies or rights they may pursue without affecting any of their rights and remedies under this Article 9. If, in the exercise of any of their rights and remedies, any of the Agent, the
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Lenders or the Holders shall forfeit any of their rights or remedies, including their right to enter a deficiency judgment against any Credit Party or any other Person, whether because of any applicable laws pertaining to “election of remedies” or the like, each Credit Party hereby consents to such action by the Agent, such Lenders or such Holders, as applicable, and waives any claim based upon such action, even if such action by the Agent, such Lenders or such Holders shall result in a full or partial loss of any rights of subrogation that any Credit Party might otherwise have had but for such action by the Agent, such Lenders or such Holders. Any election of remedies that results in the denial or impairment of the right of the Agent, the Lenders or the Holders to seek a deficiency judgment against any Credit Party shall not impair any other Credit Party’s obligation to pay the full amount of the Obligations under the Transaction Documents.
Section 9.6    Limitation. Notwithstanding any provision herein contained to the contrary, each Guarantor’s liability under this Article 9 (which liability is in any event in addition to amounts for which Credit Parties are primarily liable under the Transaction Documents) shall be limited to an amount not to exceed as of any date of determination the greater of:
(a)the net amount of all amounts advanced to such Guarantor under this Agreement or otherwise transferred to, or for the benefit of, such Guarantor (including any interest and fees and other charges); and
(b)the amount that could be claimed by the Agent, the Lenders and the Holders from such Guarantor under this Article 9 without rendering such claim voidable or avoidable under Section 548 of Chapter 11 of the Bankruptcy Code or under any applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance Act or similar statute or common law after taking into account, among other things, such Guarantor’s right of contribution and indemnification from each other Credit Party under Section 9.7.

Section 9.7    Contribution with Respect to Guaranty Obligations.
(a)To the extent that any Guarantor shall make a payment under this Article 9 of all or any of the Obligations under the Transaction Documents (other than financial accommodations made to that Guarantor for which it is primarily liable) (a “Guarantor Payment”) that, taking into account all other Guarantor Payments then previously or concurrently made by any other Guarantor, exceeds the amount that such Guarantor would otherwise have paid if each Guarantor had paid the aggregate Obligations under the Transaction Documents satisfied by such Guarantor Payment in the same proportion that such Guarantor’s “Allocable Amount” (as defined below) (as determined immediately prior to such Guarantor Payment) bore to the aggregate Allocable Amounts of each of the Guarantor as determined immediately prior to the making of such Guarantor Payment, then, following indefeasible payment in full in cash of the Obligations under the Transaction Documents and termination of the Transaction Documents (including all commitments (if any) to lend hereunder), such Guarantor shall be entitled to receive contribution and indemnification payments from, and be
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reimbursed by, each other Guarantor for the amount of such excess, pro rata based upon their respective Allocable Amounts in effect immediately prior to such Guarantor Payment.
(b)As of any date of determination, the “Allocable Amount” of any Guarantor shall be equal to the maximum amount of the claim that could then be recovered from such Guarantor under this Article 9 without rendering such claim voidable or avoidable under Section 548 of Chapter 11 of the Bankruptcy Code or under any applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance Act or similar statute or common law.

(c)This Section 9.7 is intended only to define the relative rights of Guarantor and nothing set forth in this Section 9.7 is intended to or shall impair the obligations of Credit Parties, jointly and severally, to pay any amounts as and when the same shall become due and payable in accordance with the terms of this Agreement, including Section 9.1. Nothing contained in this Section 9.7 shall limit the liability of any Credit Party to pay the financial accommodations made directly or indirectly to that Credit Party and accrued interest, fees and expenses with respect thereto for which such Credit Party shall be primarily liable.

(d)The parties hereto acknowledge that the rights of contribution and indemnification hereunder shall constitute assets of the Guarantor to which such contribution and indemnification is owing.

The rights of the indemnifying Guarantor against other Guarantor under this Section 9.7 shall be exercisable upon the full and indefeasible payment of the Obligations under the Transaction Documents and the termination of the Transaction Documents.
Section 9.8    Liability Cumulative. The liability of each Guarantor under this Article 9 is in addition to and shall be cumulative with all liabilities of each other Credit Party to the Agent, the Lenders and the Holders under this Agreement and the other Transaction Documents to which such Credit Party is a party or in respect of any Obligations under the Transaction Documents or obligation of the other Credit Party, without any limitation as to amount, unless the instrument or agreement evidencing or creating such other liability specifically provides to the contrary.
Section 9.9    Stay of Acceleration. If acceleration of the time for payment of any amount payable by the Credit Parties under this Agreement is stayed upon the insolvency, bankruptcy or reorganization of any of the Credit Parties, all such amounts otherwise subject to acceleration under the terms of this Agreement shall nonetheless be payable jointly and severally by the Credit Parties hereunder forthwith on demand by the Agent.
Section 9.10    Benefit to Credit Parties. All of the Credit Parties and their Subsidiaries are engaged in related businesses and integrated to such an extent that the financial strength and flexibility of each such Person has a direct impact on the success of each other Person. Each Credit Party and each Subsidiary will derive substantial direct and indirect benefit from the purchase and sale of the Notes hereunder.
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Section 9.11    Indemnity. Each Guarantor irrevocably and unconditionally jointly and severally agrees with the Agent, each Lender and each Holder that if any obligation guaranteed by it is or becomes unenforceable, invalid or illegal, it will, as an independent and primary obligation, indemnify the Agent, such Lender and/or such Holder, as applicable, immediately on demand against any cost, loss or liability it incurs as a result of the Borrower or Guarantor not paying any amount which would, but for such unenforceability, invalidity or illegality, have been payable by it under any Transaction Document on the date when it would have been due. The amount payable by a Guarantor under this indemnity will not exceed the amount it would have had to pay under this Article 9 if the amount claimed had been recoverable on the basis of a guarantee.
Section 9.12    Reinstatement. If any discharge, release or arrangement (whether in respect of the Obligations or any security for those Obligations or otherwise) is made by the Agent, a Lender and/or a Holder in whole or in part on the basis of any payment, security or other disposition which is avoided or must be restored in insolvency, liquidation, administration or otherwise, without limitation, then the liability of each Guarantor under this Article 9 will continue or be reinstated as if the discharge, release or arrangement had not occurred.
Section 9.13    Guarantor Intent. Without prejudice to any other provision of this Article 9, each Guarantor expressly confirms that it intends that this guarantee shall extend from time to time to any (however fundamental) variation, increase, extension or addition of or to any of the Transaction Documents and/or any facility or amount made available under any of the Transaction Documents for the purposes of or in connection with any of the following: business acquisitions of any nature; increasing working capital; enabling investor distributions to be made; carrying out restructurings; refinancing existing facilities; refinancing any other indebtedness; making facilities available to new borrowers; any other variation or extension of the purposes for which any such facility or amount might be made available from time to time; and any reasonable and invoiced fees, costs and/or expenses associated with any of the foregoing.
Section 9.14    General. Notwithstanding anything to the contrary set forth herein, the provisions of this Article 9 shall not be construed to (a) permit the Agent, Lenders or Holders to amend or otherwise modify this Agreement or the Obligations in a manner that would otherwise require the consent of the Borrower pursuant to the express terms of this Agreement or (b) constitute a waiver by the Borrower of the Borrower’s rights or defenses under this Agreement in the Borrower’s capacity as the Borrower hereunder.
Article 10
RIGHTS UPON EVENT OF DEFAULT

Section 10.1    Event of Default. Each of the following events shall constitute an “Event of Default”:
(a)any Credit Parties’ failure to pay to the Agent, the Holders and/or the Lenders any amount of (i) principal or redemptions when and as due under this Agreement or
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any Note (including, without limitation, the Credit Parties’ failure to pay any redemption payments or amounts hereunder or under any Note) or any other Transaction Document, or any other agreement, document, certificate or other instrument delivered in connection with the transactions contemplated hereby and thereby or (ii) interest (including interest calculated at the Default Rate), Late Charges, Prepayment Premium or other amounts (other than principal or redemptions) within five (5) days after the same shall become due under this Agreement or any Note or any other Transaction Document, or any other agreement, document, certificate or other instrument delivered in connection with the transactions contemplated hereby and thereby;
(b)any default occurs and is continuing under (subject to any applicable grace periods), or any redemption of or acceleration prior to maturity of, any Indebtedness (other than the Obligations) of any Credit Party or any Subsidiary of any Credit Party in excess of $100,000; provided, that, in the event that any such default or acceleration of indebtedness is cured or rescinded by the holders thereof prior to acceleration of the Notes, no Event of Default shall exist as a result of such cured default or rescinded acceleration;

(c)(i) any Credit Party or any Subsidiary of any Credit Party pursuant to or within the meaning of Title 11, U.S. Code (the “Bankruptcy Code”) or any similar federal, foreign or state law for the relief of debtors (collectively, “Bankruptcy Law”), (A) commences a voluntary case, (B) consents to the entry of an order for relief against it in an involuntary case, or to the conversion of an involuntary case to a voluntary case, (C) consents to the appointment of or taking of possession by a receiver, trustee, assignee, liquidator or similar official (a “Custodian”) for all or a substantial part of its property, (D) makes a general assignment for the benefit of its creditors, or (E) is generally unable to pay its debts as they become due; (ii) the Credit Parties, taken as a whole, become Insolvent or (iii) the board of directors (or similar governing body) of any Credit Party or any Subsidiary of any Credit Party (or any committee thereof) adopts any resolution or otherwise authorizes any action to approve any of the actions referred to in this Section 10.1(c) or Section 10.1(d);

(d)any expropriation, attachment, sequestration, distress or execution or any analogous process in any jurisdiction in which a court of competent jurisdiction (i) enters an order or decree under any Bankruptcy Law, which order or decree (A) (1) is not stayed or (2) is not rescinded, vacated, overturned, or otherwise withdrawn within sixty (60) days after the entry thereof, and (B) is for relief against any Credit Party or any Subsidiary of any Credit Party in an involuntary case, (ii) appoints a Custodian over all or a substantial part of the property of any Credit Party or any Subsidiary of any Credit Party and such appointment continues for sixty (60) days, (iii) orders the liquidation of any Credit Party or any Subsidiary of any Credit Party, or (iv) issues a warrant of attachment, execution or similar process against any substantial part of the property of any Credit Party or any Subsidiary of any Credit Party;

(e)a final judgment or judgments for the payment of money in excess of $250,000 or that otherwise could reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect are rendered against any Credit Party or any Subsidiary of any Credit Party, which judgments are not, within fifteen (15) days after the entry thereof, bonded, discharged or stayed pending appeal, or are not discharged within fifteen (15) days after
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the expiration of such stay, unless (in the case of a monetary judgment) such judgment is covered by third-party insurance, so long as the applicable Credit Party or Subsidiary provides the Agent a written statement from such insurer (which written statement shall be reasonably satisfactory to the Agent) to the effect that such judgment is covered by insurance and such Credit Party or Subsidiary will receive the proceeds of such insurance within fifteen (15) days following the issuance of such judgment;

(f)any Credit Party breaches any covenant, or other term or condition of any Transaction Document, any other agreement with the Agent, any Lender or any Holder, except in the case of a breach of a covenant or other term or condition of any Transaction Document (other than Sections 8.1(a), 8.2, 8.3(c), 8.4 through 8.11, 8.13, 8.14, 8.16, 8.17, 8.18, 8.20, 8.21, 8.23, and 8.25 of this Agreement) which is curable, only if such breach continues for a period of thirty (30) days after the earlier to occur of (A) the date upon which an executive officer of any Credit Party becomes aware of such default and (B) the date upon which written notice thereof is given to the Borrower by Agent; and a breach addressed by the other provisions of this Section 10.1; provided, the foregoing notwithstanding, the Credit Parties shall be afforded a grace period of five (5) Business Days, exercisable no more than an aggregate of twice per year during the term of this Agreement, with regard to the delivery requirements set forth in Section 8.2 hereof;

(g)a Change of Control that is not in connection with an M&A Event resulting in a Permitted Redemption pursuant to Section 2.3(a) occurs;

(h)any representation or warranty made by any Credit Party herein or in any other Transaction Document is breached or is false or misleading, each in any material respect;

(i)any “Event of Default” occurs and is continuing with respect to any of the other Transaction Documents, the FinWise Financing Agreement, the CC Financing Agreement or the Other Financing Agreement beyond any applicable notice or cure period;

(j)(i) the written rescindment or repudiation by any Credit Party of any Transaction Document or any of its obligations under any Transaction Document, or (ii) any Transaction Document or any material term thereof shall cease to be, or is asserted by any Credit Party not to be, a legal, valid and binding obligation of any Credit Party enforceable in accordance with its terms;

(k)any Lien against the Collateral intended to be created by any Security Document shall at any time be invalidated, subordinated (except to Permitted Liens to the extent expressly permitted under the Transaction Documents) or otherwise cease to be in full force and effect, for whatever reason, or any security interest purported to be created by any Security Document shall cease to be, or shall be asserted by any Credit Party not to be, a valid, first priority perfected Lien (to the extent that any Transaction Document obligates the parties to provide such a perfected first priority Lien, and except to the extent Permitted Liens are permitted by the terms of the Transaction Documents to have priority) in the Collateral (except as expressly otherwise provided under and in accordance with the terms of such Transaction Document);
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(l)any material provision of any Transaction Document shall at any time for any reason be declared to be null and void, or the validity or enforceability thereof shall be contested by any Credit Party, or a proceeding shall be commenced by any Credit Party, or by any Governmental Authority having jurisdiction over such Credit Party, seeking to establish the invalidity or unenforceability thereof, or any Credit Party shall deny that it has any liability or obligation purported to be created under any Transaction Document;

(m)Reserved;

(n)the occurrence of (i) any event which could reasonably be expected to have a Material Adverse Effect, (ii) a State Force Majeure Event, or (iii) a Federal or Multi-State Force Majeure Event;

(o)(i) any Credit Party or Subsidiary of any Credit Party liquidates, dissolves, terminates or suspends its business operations or otherwise fails to operate its business in the ordinary course; provided, the foregoing notwithstanding any of the Elevate Credit Subsidiaries may suspend its operations in any jurisdiction in which it operates and dissolve as a result of a decision by the Credit Parties to exit one or more markets from time to time or (ii) the authority or ability of any Credit Party or Subsidiary of any Credit Party to conduct its business is limited or wholly or substantially curtailed by any seizure, expropriation, nationalization, intervention, restriction or other action by or on behalf of any governmental, regulatory or other authority or other person in relation to any Credit Party, any of their Subsidiaries or any of their respective assets;

(p)Ken ReesJason Harvison and Chris Lutes shall, at any time for any reason, cease to be employed by either an Elevate Credit Subsidiary or Elevate Credit Parent in the same position and with duties substantially similar to those held as of the Restatement Closing Date (or, in the case of Jason Harvison, the First Amendment Effective Date), unless a replacement reasonably satisfactory to Agent shall have been appointed and employed (including on an interim basis) within ninety (90) days of his cessation of employment;

(q)any material decline or depreciation in the value or market price of the Collateral (whether actual or reasonably anticipated), which causes the Collateral, in the reasonable opinion of Agent acting in good faith, to become unsatisfactory as to value or character, or which causes the Agent to reasonably believe that the Obligations are inadequately secured and that the likelihood for repayment of the Obligations is or will soon be materially impaired, time being of the essence;

(r)(i) the occurrence of one or more ERISA Events which individually or in the aggregate result(s) in or could reasonably be expected to result in liability of the Credit Parties or any of their Subsidiaries in excess of $100,000 during the term hereof; or (ii) the existence of any fact or circumstance that could reasonably be expected to result in the imposition of a Lien pursuant to Section 430(k) of the Code or ERISA or a violation of Section 436 of the Code; or
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(s)any default or event of default (monetary or otherwise) by a Credit Party shall occur with respect to any Material Contract, which if curable has not been cured in accordance with the provisions of the applicable Material Contract and that could have a Material Adverse Effect.

Section 10.2    Termination of Commitments and Acceleration Right.
(a)Promptly after the occurrence of an Event of Default, the Borrower shall deliver written notice thereof via email, facsimile and overnight courier (an “Event of Default Notice”) to the Agent. At any time after the earlier of the Agent’s receipt of an Event of Default Notice and the Agent becoming aware of an Event of Default which has not been cured or waived, (i) the Agent may declare all or any portion of the Commitment of each Lender to purchase additional Notes to be suspended or terminated by delivering written notice thereof (an “Event of Default Commitment Suspension or Termination Notice”) to the Borrower, which Event of Default Commitment Suspension or Termination Notice shall indicate the portion of the Commitments that the Agent is suspending or terminating, whereupon such Commitments shall forthwith be suspended or terminated, and/or (ii) the Agent may require the Borrower to redeem all or any portion of the Notes (an “Event of Default Redemption”) by delivering written notice thereof (the “Event of Default Redemption Notice”) to the Borrower, which Event of Default Redemption Notice shall indicate the tranche(s) and portion(s) of the Notes that the Agent is requiring the Borrower to redeem (to be allocated on a pro rata basis with respect to the applicable outstanding Notes), whereupon a corresponding pro rata portion of the applicable Commitments in respect thereof shall forthwith be terminated effective upon the date of such Event of Default Redemption Notice; provided, that upon the occurrence of any Event of Default described in Section 10.1(c) or Section 10.1(d), and without any action on behalf of the Agent, any Holder or any Lender, the Commitments, in whole, shall automatically be terminated and the Notes shall automatically be redeemed by the Borrower. All Notes subject to redemption by the Borrower pursuant to this Section 10.2 shall be redeemed by the Borrower at a price equal to the outstanding principal amount of such Notes, plus accrued and unpaid interest, accrued and unpaid Late Charges, accrued and unpaid Prepayment Premium and all other amounts due under the Transaction Documents (the “Event of Default Redemption Price”); provided, the foregoing notwithstanding, the Prepayment Premium shall not be due solely in connection with an Event of Default Redemption occurring as a result of the occurrence of an Event of Default of the type described in Sections 10.1(n)(ii) or 10.1(n)(iii) so long as no other Event of Default shall be in existence at such time.
(b)In the case of an Event of Default Redemption, the Borrower shall deliver the applicable Event of Default Redemption Price to the Agent within three (3) Business Days after the Borrower’s receipt of the Event of Default Redemption Notice. In the case of an Event of Default Redemption of less than all of the principal of the Notes, the Borrower shall promptly cause to be issued and delivered to the Holders new Notes (in accordance with Section 2.7) representing the portion of the outstanding principal thereunder that has not be paid as a result of such redemption.

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Section 10.3     Rights. Without in any way limiting any remedy that the Agent, the Holders or the Lenders may have, at law or in equity, under any Transaction Document (including under the foregoing provisions of this Article 10) or otherwise, upon the occurrence and during the continuance of any Event of Default, upon the request of the Agent, the Credit Parties shall hire or otherwise retain a consultant, advisor or similar Person acceptable to the Agent to advise the Credit Parties with respect to their business and operations.
Section 10.4    Other Remedies. The remedies provided herein and in the Notes shall be cumulative and in addition to all other remedies available under any of the other Transaction Documents, at law or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the Agent’s, any Lender’s or any Holder’s right to pursue actual damages for any failure by the Credit Parties to comply with the terms of this Agreement, the Notes and the other Transaction Documents. Amounts set forth or provided for herein and in the Notes with respect to payments and the like (and the computation thereof) shall be the amounts to be received by the Agent, the Holders and/or the Lenders and shall not, except as expressly provided herein, be subject to any other obligation of the Credit Parties (or the performance thereof). Each of the Credit Parties acknowledges that a breach by it of its obligations hereunder and under the Notes and the other Transaction Documents will cause irreparable harm to the Agent, the Holders and the Lenders and that the remedy at law for any such breach may be inadequate. The Credit Parties therefore agree that, in the event of any such breach or threatened breach, the Agent, the Holders and the Lenders shall be entitled, in addition to all other available remedies, to an injunction restraining any breach, without the necessity of showing economic loss and without any bond or other security being required.
Section 10.5    Application of Proceeds.
(a)Notwithstanding anything to the contrary contained in this Agreement, upon the occurrence and during the continuance of an Event of Default, Borrower irrevocably waives the right to direct the application of any and all payments at any time or times thereafter received by Agent from or on behalf of the Borrower or any other Credit Party of all or any part of the Obligations, and, as between the Credit Parties on the one hand and Agent and Holders on the other, Agent shall have the continuing and exclusive right to apply and to reapply any and all payments received against the Obligations in such manner as Agent may deem advisable (subject to clause (b) below) notwithstanding any previous application by Agent.
(b)Following the occurrence and during the continuance of an Event of Default, any and all voluntary and mandatory, payments, prepayments or redemptions made in respect of the Obligations shall be delivered to the Agent and shall be applied in the following order: first, to all fees, costs, indemnities, liabilities, obligations and expenses incurred by or owing to Agent with respect to this Agreement, the other Transaction Documents or the Collateral; second, to accrued and unpaid interest on a pro rata basis with respect to the outstanding Notes; and third, to the principal amount of Notes then due and owing on a pro rata basis with respect to the outstanding Notes.

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(c)Any payments, prepayments or proceeds of Collateral received by any Lender that were not permitted to be made under this Agreement or were not applied as required under this Agreement shall be promptly paid over to the Agent for application under Section 10.5(b). Any balance remaining after giving effect to the applications set forth in this Section 10.5 shall be delivered to Borrower or to whoever may be lawfully entitled to receive such balance or as a court of competent jurisdiction may direct. In carrying out any of the applications set forth in this Section 10.5, (i) amounts received shall be applied in the numerical order provided until exhausted prior to the application to the next succeeding category and (ii) each of the Persons entitled to receive a payment in any particular category shall receive an amount equal to its pro rata share of amounts available to be applied pursuant thereto for such category.
Article 11
[RESERVED]

Article 12
AGENCY PROVISIONS

Section 12.1    Appointment. Each of the Holders and Lenders hereby irrevocably designates and appoints Agent as the administrative agent and collateral agent of such Holder or such Lender (or the Holders or Lenders represented by it) under this Agreement and the other Transaction Documents for the term hereof (and Agent hereby accepts such appointment), and each such Holder and Lender irrevocably authorizes Agent to take such action on its behalf under the provisions of this Agreement and the other Transaction Documents and to exercise such powers and perform such duties as are expressly delegated to the Agent by the terms of this Agreement and the other Transaction Documents, together with such other powers as are reasonably incidental thereto. Notwithstanding any provision to the contrary elsewhere in this Agreement or the other Transaction Documents, the Agent shall not have any duties or responsibilities, except those expressly set forth herein and therein, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or the other Transaction Documents or otherwise exist against the Agent. Without limiting the generality of the foregoing, Agent shall have the sole and exclusive right and authority (to the exclusion of the Lenders and Holders), and is hereby authorized, to (a) act as the disbursing and collecting agent for the Lenders and Holders with respect to all payments and collections arising in connection with the Transaction Documents (including in any proceeding described in Sections 10.1(c) or 10.1(d) or any other bankruptcy, insolvency or similar proceeding), and each Person making any payment in connection with any Transaction Document to any Lender or Holder is hereby authorized to make such payment to Agent, (b) file and prove claims and file other documents necessary or desirable to allow the claims of the Agent, Lenders and Holders with respect to any Obligation in any proceeding described in Sections 10.1(c) or 10.1(d) or any other bankruptcy, insolvency or similar proceeding (but not to vote, consent or otherwise act on behalf of such Person), (c) act as collateral agent for itself and each Lender and Holder for purposes of the perfection of all Liens created by such agreements and all other purposes stated therein, (d) manage, supervise and otherwise deal with the Collateral, (e) take such other action
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as is necessary or desirable to maintain the perfection and priority of the Liens created or purported to be created by the Transaction Documents, (f) except as may be otherwise specified in any Transaction Document, exercise all remedies given to Agent, the Lenders and the Holders with respect to the Credit Parties and/or the Collateral, whether under the Transaction Documents, applicable Requirements or otherwise and (g) execute any amendment, consent or waiver under the Transaction Documents on behalf of any Lender or Holder that has consented in writing to such amendment, consent or waiver; provided, however, that Agent hereby appoints, authorizes and directs each Lender and Holder to act as collateral sub-agent for Agent, the Lenders and the Holders for purposes of the perfection of all Liens with respect to the Collateral, including any deposit account maintained by a Credit Party with, and cash and Cash Equivalent Investments held by, such Lender or Holder, and may further authorize and direct the Lenders and the Holders to take further actions as collateral sub-agents for purposes of enforcing such Liens or otherwise to transfer the Collateral subject thereto to Agent, and each Lender and Holder hereby agrees to take such further actions to the extent, and only to the extent, so authorized and directed. Any reference to the Agent in this Agreement or the other Transaction Documents shall be deemed to refer to the Agent solely in its capacity as Agent and not in its capacity, if any, as a Holder or a Lender. Under the Transaction Documents, Agent (a) is acting solely on behalf of the Agent, Lenders and Holders (except to the limited extent provided in Section 2.9 with respect to the Register), with duties that are entirely administrative in nature, notwithstanding the use of the defined term “Agent”, the terms “agent”, “Agent” and “collateral agent” and similar terms in any Transaction Document to refer to Agent, which terms are used for title purposes only, (b) is not assuming any obligation under any Transaction Document other than as expressly set forth therein or any role as agent, fiduciary or trustee of or for any Lender, Holder or any other Person and (c) shall have no implied functions, responsibilities, duties, obligations or other liabilities under any Transaction Document, and each Lender and Holder, by accepting the benefits of the Transaction Documents, hereby waives and agrees not to assert any claim against Agent based on the roles, duties and legal relationships expressly disclaimed in clauses (a) through (c) of this sentence.
Section 12.2    Binding Effect. Each Lender and Holder, by accepting the benefits of the Loan Documents, agrees that (a) any action taken by Agent (or, when expressly required hereby, all the Holders) in accordance with the provisions of the Transaction Documents, (b) any action taken by Agent in reliance upon the instructions of Required Lenders (or, when expressly required hereby, all the Holders) and (c) the exercise by Agent (or, when expressly required hereby, all the Holders) of the powers set forth herein or therein, together with such other powers as are reasonably incidental thereto, shall be authorized and binding upon all of the Lenders and Holders.
Section 12.3    Use of Discretion. Agent shall not be required to exercise any discretion or take, or to omit to take, any action, including with respect to enforcement or collection, except any action it is required to take or omit to take (a) under any Transaction Document or (b) pursuant to instructions from all the Holders, when expressly required hereby. Notwithstanding the foregoing, Agent shall not be required to take, or to omit to take, any action (a) unless, upon demand, Agent receives an indemnification satisfactory to it from the Lenders and/or Holders (or, to the extent applicable and acceptable to Agent, any other Person) against all liabilities that,
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by reason of such action or omission, may be imposed on, incurred by or asserted against Agent or any of its Related Parties or (b) that is, in the opinion of Agent or its counsel, contrary to any Transaction Document or applicable Requirement. Notwithstanding anything to the contrary contained herein or in any other Transaction Document, the authority to enforce rights and remedies hereunder and under the other Transaction Documents against the Credit Parties or any of them shall be vested exclusively in, and all actions and proceedings at law in connection with such enforcement shall be instituted and maintained exclusively by, Agent in accordance with the Transaction Documents for the benefit of all the Lenders and the Holders; provided, that the foregoing shall not prohibit (a) Agent from exercising on its own behalf the rights and remedies that inure to its benefit (solely in its capacity as Agent) hereunder and under the other Transaction Documents, (b) any Lender or Holder from exercising setoff rights in accordance with Section 13.17(a) or (c) any Lender or Holder from filing proofs of claim or appearing and filing pleadings on its own behalf during the pendency of a proceeding relative to any Credit Party under any bankruptcy or other debtor relief law; and provided, further that if at any time there is no Person acting as Agent hereunder and under the other Transaction Documents, then (A) the Required Lenders shall have the rights otherwise ascribed to Agent pursuant to Article 10 and (B) in addition to the matters set forth in clauses (b) and (c) of the preceding proviso and subject to Section 13.17(a), any Lender or Holder may, with the consent of the Required Lenders, enforce any rights and remedies available to it and as authorized by the Required Lenders.
Section 12.4    Delegation of Duties. The Agent may execute any of its respective duties under this Agreement or the other Transaction Documents by or through agents or attorneys in fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. The Agent shall not be responsible for the negligence or misconduct of any agents or attorneys in fact selected by the Agent with reasonable care.
Section 12.5    Exculpatory Provisions. Neither the Agent nor any of its Related Parties shall be (a) liable for any action lawfully taken or omitted to be taken by it or such Person under or in connection with this Agreement (except for actions occasioned by its or such Person’s own gross negligence or willful misconduct), or (b) responsible in any manner to any of the Holders or Lenders for any recitals, statements, representations or warranties made by any Guarantor, the Borrower or any of their respective Subsidiaries or any officer thereof contained in this Agreement, the other Transaction Documents or in any certificate, report, statement or other document referred to or provided for in, or received by the Agent under or in connection with, this Agreement or the other Transaction Documents or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Transaction Document or for any failure of any Guarantor, the Borrower or any of their respective Subsidiaries to perform its obligations hereunder or thereunder. The Agent shall not be under any obligation to any Holder or any Lender to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or of any other Transaction Document, or to inspect the properties, books or records of any Guarantor, the Borrower or any of their respective Subsidiaries.
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Section 12.6    Reliance by Agent. The Agent shall be entitled to rely, and shall be fully protected in relying, upon any note, writing, resolution, notice, consent, certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype message, statement, order or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons and upon advice and statements of legal counsel (including, without limitation, counsel to the Borrower), independent accountants and other experts selected by the Agent. The Agent may deem and treat the payee of any Note as the owner thereof for all purposes unless the Agent shall have actual notice of any transferee. The Agent shall be fully justified in failing or refusing to take any action under this Agreement and the other Transaction Documents unless it shall first receive such advice or concurrence of the Required Lenders (or, when expressly required hereby, all the Holders) as it deems appropriate, if any, or it shall first be indemnified to its satisfaction by the Holders and Lenders against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action except for its own gross negligence or willful misconduct (each as determined in a final, non-appealable judgment by a court of competent jurisdiction). The Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement and the other Transaction Documents in accordance with a request of the Required Lenders (or, when expressly required hereby, all the Holders), and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Holders and Lenders and all future Holders and Lenders. Without limiting the foregoing, Agent:
(a)shall not be responsible or otherwise incur liability for any action or omission taken in reliance upon the instructions of the Required Lenders or for the actions or omissions of any of its Related Parties selected with reasonable care (other than employees, officers and directors of Agent, when acting on behalf of Agent);
(b)shall not be responsible to any Lender, Holder or other Person for the due execution, legality, validity, enforceability, effectiveness, genuineness, sufficiency or value of, or the attachment, perfection or priority of any Lien created or purported to be created under or in connection with, any Transaction Document; and

(c)makes no warranty or representation, and shall not be responsible, to any Lender, Holder or other Person for any statement, document, information, representation or warranty made or furnished by or on behalf of any Credit Party or any Related Party of any Credit Party in connection with any Transaction Document or any transaction contemplated therein or any other document or information with respect to any Credit Party, whether or not transmitted or omitted to be transmitted by Agent, including as to completeness, accuracy, scope or adequacy thereof, or for the scope, nature or results of any due diligence performed by Agent in connection with the Transaction Documents;

and, for each of the items set forth in clauses (a) through (c) above, each Lender, Holder and Credit Party hereby waives and agrees not to assert (and Borrower shall cause each other Credit Party to waive and agree not to assert) any right, claim or cause of action it might have against Agent based thereon.
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Section 12.7    Notices of Default. The Agent shall not be deemed to have knowledge or notice of the occurrence of any Event of Default hereunder or under any other Transaction Document unless it has received notice of such Event of Default in accordance with the terms hereof or thereof or notice from a Holder, a Lender or the Borrower referring to this Agreement or the other Transaction Documents describing such Event of Default and stating that such notice is a “notice of default.” In the event that the Agent receives such a notice, it shall promptly give notice thereof to the Holders and Lenders. The Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Event of Default as it shall deem advisable in the best interests of the Holders and Lenders, except to the extent that other provisions of this Agreement or the other Transaction Documents expressly require that any such action be taken or not be taken only with the consent and authorization or upon the request of all the Holders.
Section 12.8    Non Reliance on the Agent and Other Holders. Each of the Holders and Lenders expressly acknowledges that neither the Agent nor any of its respective officers, directors, employees, agents, attorneys in fact, Subsidiaries or Affiliates has made any representations or warranties to it and that no act by the Agent hereinafter taken, including any review of the affairs of Elevate Credit Parent, the Borrower or any of their respective Subsidiaries, shall be deemed to constitute any representation or warranty by the Agent to any Holder or Lender. Each of the Holders and Lenders represents that it has made and will continue to make, independently and without reliance upon the Agent or any other Holder or Lender, and based on such documents and information as it shall deem appropriate at the time, its own credit analysis, appraisals and decisions in taking or not taking action under this Agreement and the other Transaction Documents, and such investigation as it deems necessary to inform itself as to the business, operations, property, financial and other condition and creditworthiness of Elevate Credit Parent, the Borrower and their Subsidiaries. Except for notices, reports and other documents expressly required to be furnished to the Holders and Lenders by the Agent hereunder or under the other Transaction Documents, the Agent shall not have any duty or responsibility to provide any Holder or Lender with any credit or other information concerning the business, operations, property, financial and other condition or creditworthiness of Elevate Credit Parent, the Borrower or any of their respective Subsidiaries which may come into the possession of the Agent or any of its respective officers, directors, employees, agents, attorneys in fact, respective Subsidiaries or Affiliates.
Section 12.9    Indemnification. Each of the Holders and Lenders hereby agrees to indemnify the Agent in its capacity as such (to the extent not reimbursed by the Credit Parties and without limiting the obligation of the Credit Parties to do so), ratably according to the respective amounts of their Notes, from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind whatsoever which may at any time (including, without limitation, at any time following the payment of the Notes) be imposed on, incurred by or asserted against the Agent in any way relating to or arising out of this Agreement, the other Transaction Documents, or any documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby or any action taken or omitted by the Agent under or in connection with any of the foregoing; provided that no Holder or Lender shall be liable for the payment of any portion of
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such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements to the extent they result from the Agent’s gross negligence or willful misconduct, as determined by a court of competent jurisdiction in a final non-appealable judgment or order. The agreements in this Section 12.9 shall survive the payment of the Notes and all other amounts payable hereunder and the termination of this Agreement and the other Transaction Documents.
Section 12.10    The Agent in Its Individual Capacity. The Agent and its Subsidiaries and Affiliates may make loans to, accept deposits from and generally engage in any kind of business with the Credit Parties or any of their Subsidiaries as though the Agent were not an Agent hereunder. With respect to any Note issued to it, the Agent shall have the same rights and powers under this Agreement and the other Transaction Documents as any Holder or Lender and may exercise the same as though it were not an Agent, and the terms “Holders” and “Lenders” shall include the Agent in its individual capacity.
Section 12.11    Resignation of the Agent; Successor Agent. The Agent may resign as Agent at any time by giving thirty (30) days advance notice thereof to the Holders and Lenders and the Borrower and, thereafter, the retiring Agent shall be discharged from its duties and obligations hereunder. Upon any such resignation, the Required Lenders shall have the right to appoint a successor Agent. If no successor Agent shall have been so appointed by the Required Lenders, then the Agent may, on behalf of the Holders and Lenders, appoint a successor Agent reasonably acceptable to the Borrower (so long as no Event of Default has occurred and is continuing). Upon the acceptance of any appointment as Agent hereunder by a successor Agent, such successor Agent shall thereupon succeed to and become vested with all rights, powers, privileges and duties of the retiring Agent. After any retiring Agent’s resignation hereunder as Agent, the provisions of this Section 12.11 shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as Agent. If no successor has accepted appointment as Agent by the date which is thirty (30) days following a retiring Agent’s notice of resignation, the retiring Agent’s resignation shall nevertheless thereupon become effective and the Required Lenders shall perform all of the duties of the Agent hereunder until such time, if any, as the Required Lenders appoint a successor agent as provided for above.
Section 12.12    Reimbursement by Holders and Lenders. To the extent that the Borrower for any reason fails to indefeasibly pay any amount required under Section 13.1 or Section 13.12 to be paid by it to the Agent (or any sub-agent thereof), or any Related Party of any of the foregoing, each Holder and Lender severally agrees to pay to the Agent (or any such sub agent) or such Related Party, as the case may be, such Holder’s or Lender’s applicable percentage thereof (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount, provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Agent (or any such sub agent) in its capacity as such, or against any Related Party of any of the foregoing acting for the Agent (or any such sub-agent) in connection with such capacity. For the purposes of this Section 12.12, the “applicable percentage” of a Holder or a Lender shall be the percentage of the total aggregate principal amount of the Notes represented by the Notes held by such Holder or Lender at such time.
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Section 12.13    Withholding. To the extent required by any Requirement, Agent may withhold from any payment to any Lender or Holder under a Transaction Document an amount equal to any applicable withholding Tax (including withholding Taxes imposed under Chapters 3 and 4 of Subtitle A of the Code). If the IRS or any other Governmental Authority asserts a claim that Agent did not properly withhold tax from amounts paid to or for the account of any Lender or Holder (because the appropriate certification form was not delivered, was not properly executed, or fails to establish an exemption from, or reduction of, withholding tax with respect to a particular type of payment, or because such Lender or Holder failed to notify Agent or any other Person of a change in circumstances which rendered the exemption from, or reduction of, withholding tax ineffective, failed to maintain a Participant Register or for any other reason), or Agent reasonably determines that it was required to withhold taxes from a prior payment but failed to do so, such Lender or Holder shall promptly indemnify Agent fully for all amounts paid, directly or indirectly, by Agent as tax or otherwise, including penalties and interest, and together with all expenses incurred by Agent, including legal expenses, allocated internal costs and out-of-pocket expenses. Agent may offset against any payment to any Lender or Holder under a Transaction Document, any applicable withholding tax that was required to be withheld from any prior payment to such Lender or Holder but which was not so withheld, as well as any other amounts for which Agent is entitled to indemnification from such Lender or Holder under this Section 12.13.
Section 12.14    Release of Collateral or Guarantors. Each Lender and Holder hereby consents to the release and hereby directs Agent to release (or, in the case of clause (b)(ii) below, release or subordinate) the following:
(a)any Subsidiary of the Borrower from its guaranty of any Obligation if all of the Equity Interests of such Subsidiary owned by any Credit Party are sold or transferred in a transaction permitted under the Transaction Documents (including pursuant to a waiver or consent), to the extent that, after giving effect to such transaction, such Subsidiary would not be required to guaranty any Obligations; and
(b)any Lien held by Agent for the benefit of the Lenders and Holders against (i) any Collateral that is sold, transferred, conveyed or otherwise disposed of by a Credit Party in a transaction permitted by the Transaction Documents (including pursuant to a valid waiver or consent), to the extent all Liens required to be granted in such Collateral pursuant to this Agreement after giving effect to such transaction have been granted, (ii) any property subject to a Lien permitted hereunder in reliance upon clause (xiii) of the definition of Permitted Liens and (iii) all of the Collateral and all Credit Parties, upon (A) indefeasible payment in full in cash of the Obligations (other than any indemnity obligations of any Credit Party under the Transaction Documents that satisfy all of the following conditions: (X) such indemnity obligations are not then due and payable orand (Y) such indemnity obligations are obligations for which any events or claims that would give rise thereto are not then pending) under the Transaction Documents and termination of the Transaction Documents (including all commitments (if any) to lend hereunder) and (B) to the extent requested by Agent, receipt by Agent and the Lenders and Holders of liability releases from the Credit Parties each in form and substance acceptable to Agent.
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Article 13
MISCELLANEOUS

Section 13.1    Payment of Expenses. The Credit Parties shall reimburse the Agent, the Lenders and the Holders on demand for all reasonable costs and expenses, including, without limitation, legal expenses and reasonable attorneys’ fees (whether for internal or outside counsel), incurred by the Agent, the Lenders and the Holders in connection with (i) the investigation, development, preparation, negotiation, syndication, execution, interpretation or administration of, any modification of any term of or termination of, this Agreement and any other Transaction Document, any commitment or proposal letter therefor, any other document prepared in connection therewith or the consummation and administration of any transaction contemplated therein, ongoing fees and expenses of the Borrower, and any other transactions between the Credit Parties and the Agent, the Lenders and the Holders, including, without limitation, UCC and other public record searches and filings, overnight courier or other express or messenger delivery, appraisal costs, surveys, title insurance and environmental audit or review (including due diligence review) costs; (ii) the collection, protection or enforcement of any rights in or to the Collateral; (iii) the collection of any Obligations; (iv) the administration and enforcement of Agent’s, any Lender’s and any Holder’s rights under this Agreement or any other Transaction Document (including, without limitation, any costs and expenses of any third party provider engaged by Agent, the Lenders or the Holders for such purposes, and any costs and expenses incurred in connection with the forbearance of any of the rights and remedies of the Agent, the Lenders and any Holders hereunder); (v) any refinancing or restructuring of the Notes whether in the nature of a “workout,” in any insolvency or bankruptcy proceeding or otherwise, and whether or not consummated; (vi) the assignment, transfer or syndication of the Notes; and (vii) any liability for any Non-Excluded Taxes, if any, including any interest and penalties, and any finder’s or brokerage fees, commissions and expenses (other than any fees, commissions or expenses of finders or brokers engaged by the Agent, the Lenders and/or the Holders), that may be payable in connection with the purchase of the Notes contemplated by this Agreement and the other Transaction Documents. The Credit Parties shall also pay all normal service charges with respect to all accounts maintained by the Credit Parties with the Lenders and/or the Holders and any additional services requested by the Credit Parties from the Lenders and/or the Holders. All such costs, expenses and charges shall constitute Obligations hereunder, shall be payable by the Credit Parties to the applicable Lenders or Holders on demand, and, until paid, shall bear interest at the highest rate then applicable to the Notes hereunder. Without limiting the foregoing, if (a) any Note is placed in the hands of an attorney for collection or enforcement or is collected or enforced through any legal proceeding or any Holder or Lender otherwise takes action to collect amounts due under such Note or to enforce the provisions of this Agreement or such Note or (b) there occurs any bankruptcy, reorganization, receivership of any Credit Party or other proceedings affecting creditors’ rights and involving a claim under this Agreement or such Note, then the Credit Parties shall pay the costs incurred by such Holder or such Lender for such collection, enforcement or action or in connection with such bankruptcy, reorganization, receivership or other proceeding, including, but not limited to, reasonable attorneys’ fees and disbursements (including such fees and disbursements related to seeking relief from any stay, automatic or otherwise, in effect under any Bankruptcy Law).
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Section 13.2    Governing Law; Jurisdiction; Jury Trial . This Agreement shall be a contract made under, and governed and enforced in every respect by, the internal laws of the State of New York, without giving effect to its conflicts of law principles other than §5-1401 and 5-1402 of the New York General Obligations Law. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in New York, New York for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTIONS CONTEMPLATED HEREBY.
Section 13.3    Counterparts. This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to each other party; provided that a facsimile or .pdf signature shall be considered due execution and shall be binding upon the signatory thereto with the same force and effect as if the signature were an original, not a facsimile or .pdf signature.
Section 13.4    Headings. The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this Agreement.
Section 13.5    Severability. If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of any provision of this Agreement in any other jurisdiction.
Section 13.6    Entire Agreement; Amendments. This Agreement and the other Transaction Documents supersede all other prior oral or written agreements between the Agent, the Holders, the Lenders, the Credit Parties, their Affiliates and Persons acting on their behalf with respect to the matters discussed herein and therein, and this Agreement, the other Transaction Documents and the instruments referenced herein and therein contain the entire understanding of the parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, none of the Credit Parties or the Agent, any Holder or any Lender makes any representation, warranty, covenant or undertaking with respect to such matters. No provision of this Agreement, the Notes or any of the other Transaction Documents may be amended or waived other than by an instrument in writing signed by the Credit Parties
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and the Agent (provided, that no amendment or waiver hereof shall (a) extend the Maturity Date of any Note (it being agreed that, for purposes of clarification, mandatory redemptions pursuant to Section 2.3(b) may be postponed, delayed, reduced, waived or modified in accordance with Section 2.3(d) or otherwise with the consent of the Agent), (b) decrease the amount or rate of interest (it being agreed that waiver of the Default Rate shall only require the consent of the Agent), premium, principal or other amounts payable hereunder or under any Note or forgive or waive any such payment (it being agreed that mandatory redemptions pursuant to Section 2.3(b) may be postponed, delayed, reduced, waived or modified in accordance with Section 2.3(d) or otherwise with the consent of the Agent), (c) modify this Section 13.6, or (d) disproportionately and adversely affect any Lender or Holder as compared to other Lenders or Holders, in each case, without the consent of all Holders directly affected thereby), and any amendment or waiver to this Agreement made in conformity with the provisions of this Section 13.6 shall be binding on all Lenders and all Holders, as applicable. None of the Credit Parties has, directly or indirectly, made any agreements with the Agent, any Lenders or any Holders relating to the terms or conditions of the transactions contemplated by the Transaction Documents except as set forth in the Transaction Documents. Without limiting the foregoing, each of the Credit Parties confirms that, except as set forth in this Agreement, none of Agent, any Lender or any Holder has made any commitment or promise or has any other obligation to provide any financing to the Credit Parties or otherwise.
Section 13.7    Notices. Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile (provided, confirmation of transmission is mechanically or electronically generated and kept on file by the sending party) or e-mail (provided, confirmation of receipt is verified by return email from the receiver or by other written means); or (iii) one Business Day after deposit with an overnight courier service, in each case properly addressed to the party to receive the same. The addresses, facsimile numbers and e-mail addresses for such communications shall be:
If to any of the Guarantors:

c/o Elevate Credit, Inc.
4150 International Plaza, Suite 400300
Fort Worth, Texas 76109
USA
Attention:    Chief Executive Officer
Facsimile:    817-546-2700
E-Mail:    kreesjharvison@elevate.com

with a copy (for informational purposes only) to:

Coblentz Patch Duffy & Bass LLP
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One Montgomery Street, Suite 3000
San Francisco, California 94104
USA
Telephone:    (415) 391-4800
Facsimile:    (415) 989-1663
Attention:    Paul J. Tauber, Esq.
E-Mail:    pjt@cpdb.com

If to the Borrower:
    
MaplesFS Limited
    PO Box 1093
Boundary Hall, Cricket Square
Grand Cayman, KY1-1102
Cayman Islands
Telephone:    (345) 814-5710
Attention:    Andrew Dean, Senior Vice President
E-mail:     Andrew.Dean@maplesfsmaples.com

If to the Agent:

Victory Park Management, LLC
150 North Riverside Plaza, Suite 5200
Chicago, Illinois 60606
USA
Telephone:     (312) 705-2786
Facsimile:    (312) 701-0794
Attention:     Scott R. Zemnick, General Counsel
E-mail:        szemnick@vpcadvisors.com
with a copy (for informational purposes only) to:

Katten Muchin Rosenman LLP
525 West Monroe Street
Chicago, Illinois 60661
USA
Telephone:    (312) 902-5297 and (312) 902-5495
Facsimile:    (312) 577-8964 and (312) 577-8854
Attention:    Mark R. Grossmann, Esq. and Scott E. Lyons, Esq.
E-mail:        mg@katten.com and scott.lyons@katten.com

If to a Lender, to its address, facsimile number and e-mail address set forth on the Schedule of Lenders, with copies to such Lender’s representatives as set forth on the Schedule of Lenders,
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If to a Holder (that is not also a Lender), to the address, facsimile number and e-mail address as such Holder has specified by written notice given to each other party at the time such Holder has become a Holder hereunder,
or to such other address, facsimile number and/or e-mail address and/or to the attention of such other Person as the recipient party has specified by written notice given to each other party five days prior to the effectiveness of such change. Written confirmation of receipt (A) given by the recipient of such notice, consent, waiver or other communication, (B) mechanically or electronically generated by the sender’s facsimile machine containing the time, date, recipient facsimile number and an image of the first page of such transmission or (C) provided by an overnight courier service shall be rebuttable evidence of personal service, receipt by facsimile or receipt from an overnight courier service in accordance with clauses (i), (ii) or (iii) above, respectively.
Section 13.8    Successors and Assigns; Participants. This Agreement shall be binding upon and inure to the benefit of the parties and their respective permitted successors and assigns, including any purchasers of the Notes. None of the Credit Parties shall assign this Agreement or any rights or obligations hereunder without the prior written consent of Agent, including by way of a Change of Control. Subject to the provisions of Section 2.7, 2.8 and 2.9 hereof, a Lender or Holder may assign some or all of its rights and obligations hereunder in connection with the transfer of any of its Notes to any Person (an “Assignee”), with the prior written consent of the Agent and, so long as no Event of Default exists, the Borrower (which consent of the Borrower shall not be unreasonably withheld, conditioned or delayed and neither of which consents shall be required for an assignment by (i) a Lender to an Assignee that is (A) another Lender or Holder or (B) an Affiliate of such assigning Lender or (ii) a Holder to an Assignee that is (A) another Holder or Lender or (B) an Affiliate of such assigning Holder); provided, however, that the Borrower shall be deemed to have consented to any such assignment unless it shall object thereto by written notice to the Agent within ten (10) Business Days after having received notice thereof. Each such permitted Assignee shall be deemed to be the Lender (or, as provided below, a Holder) hereunder with respect to such assigned rights and obligations, and the Credit Parties shall ensure that such transferee is registered as a Holder and that any Liens on the Collateral shall be for the benefit of such Holder (as well as the other Holders of Notes). For purposes of clarification, a Lender may assign all or a portion of such Lender’s outstanding Notes (and its corresponding rights and obligations hereunder in connection therewith) with or without an assignment of all or a portion of such Lender’s portion of the applicable Commitments. Any Assignee of all or a portion of a Lender’s outstanding Notes (and its corresponding rights and obligations hereunder in connection therewith) who shall not have also been assigned all or a portion of such Lender’s Commitment(s) (such assignment, a “Principal Only Assignment”), shall be deemed a “Holder” and not a “Lender” hereunder, and all or such portion of the Notes held by such Lender that shall have been assigned to such Holder pursuant to the Principal Only Assignment shall be evidenced by and entitled to the benefits of this Agreement and, if requested by such Holder, a Note payable to such Holder in an amount equal to the principal amount of outstanding Notes as shall have been assigned to such Holder pursuant to such Principal Only Assignment. For the avoidance of doubt, any Assignee of a Principal Only Assignment shall have no obligation to purchase any Notes. For purposes of determining whether the Borrower
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has reached the Maximum Commitment hereunder, any principal amount of Notes outstanding with respect to a Principal Only Assignment shall be included in such determination. In connection with any permitted assignment by a Holder of some or all of its rights and obligations hereunder, upon the request of such Holder, the Borrower shall cause to be delivered to the Assignee thereof either (i) a letter from Outside Legal Counsel indicating that it may rely upon the opinion letter delivered by it pursuant to Section 5.1(f)(i) or (ii) an opinion from other legal counsel reasonably acceptable to the Assignee to the effect of such opinion letter, in either case dated on or before the effective date of such assignment. Notwithstanding anything in the Transaction Documents to the contrary, (i) no lender to or funding or financing source of a Lender or its Affiliates shall have any obligation to purchase Notes, (ii) there shall be no limitation or restriction or consent right on a Lender's ability to assign or otherwise transfer any Transaction Document, Note or Obligation to an Affiliate or lender or funding or financing source, and (iii) there shall be no limitation or restriction or consent rights on such Affiliates’ or lenders’ or financing or funding sources’ ability to assign or otherwise transfer any Transaction Document, Note or Obligation (or any of its rights thereunder or interest therein).
In addition to the other rights provided in this Section 13.8, each Lender may, without notice to or consent from Agent or the Borrower, sell participations to one or more Persons in or to all or a portion of its rights and obligations under the Transaction Documents (including all its rights and obligations with respect to the Notes); provided, however, that, whether as a result of any term of any Transaction Document or of such participation, (i) no such participant shall have a commitment, or be deemed to have made an offer to commit, to purchase Notes hereunder, and, except as may otherwise be provided in the operative documentation governing such participation, none shall be liable for any obligation of such Lender hereunder, (ii) such Lender’s rights and obligations, and the rights and obligations of the Credit Parties and the Agent and other Lenders towards such Lender, under any Transaction Document shall remain unchanged and each other party hereto shall continue to deal solely with such Lender, which shall remain the holder of the applicable Obligations in the Register, except that each such participant shall be entitled to the benefit of Section 2.6; provided, however, that in no case shall a participant have the right to enforce any of the terms of any Transaction Document, and (iii) except as may otherwise be provided in the operative documentation governing such participation, the consent of such participant shall not be required (either directly, as a restraint on such Lender’s ability to consent hereunder or otherwise) for any amendments, waivers or consents with respect to any Transaction Document or to exercise or refrain from exercising any powers or rights such Lender may have under or in respect of the Transaction Documents (including the right to enforce or direct enforcement of the Obligations). Each Lender that sells a participation 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 Notes or other obligations under the Transaction Documents (the “Participant Register”); provided, that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any participant or any information relating to a participant’s interest in any commitments, loans, letters of credit or its other obligations under any Transaction Document) to any Person other than Agent except to the extent that such disclosure is necessary to establish that such commitment, loan, letter of credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury
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Regulations and Sections 163(f), 871(h)(2) and 881(c)(2) of the Code and any related Treasury regulations promulgated thereunder. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, Agent shall have no responsibility for maintaining a Participant Register.
Section 13.9    No Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.
Section 13.10    Survival. The representations, warranties, agreements and covenants of the Credit Parties and the Lenders contained in the Transaction Documents shall survive the Restatement Closing. Each Lender and each Holder shall be responsible only for its own agreements and covenants hereunder.
Section 13.11    Further Assurances. Each Credit Party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as any other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.
Section 13.12    Indemnification. In consideration of the Agent’s and each Lender’s execution and delivery of the Transaction Documents and acquisition of the Notes hereunder and in addition to all of the Credit Parties’ other obligations under the Transaction Documents, subject to 956 Limitations, the Credit Parties shall jointly and severally defend, protect, indemnify and hold harmless the Agent, each Lender, each other Holder, each of their respective Affiliates and all of their respective stockholders, equity holders, partners, members, managers, investment managers, officers, directors, employees, principals, advisory board members, and direct or indirect investors and any of the foregoing Persons’ agents or other representatives (including, without limitation, those retained in connection with the transactions contemplated by this Agreement)predecessors, successors, assigns, attorneys (up to an aggregate amount of $250,000 pursuant to this Section 13.12 and Section 13.12 in the FinWise Financing Agreement, the CC Financing Agreement and the Other Financing Agreement) and agents (collectively, the “Indemnitees”) from and against any and all actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages, and expenses in connection therewith (irrespective of whether any such Indemnitee is a party to the action for which indemnification hereunder is sought), and including reasonable attorneys’ fees and disbursements (the “Indemnified Liabilities”), incurred by any Indemnitee as a result of, or arising out of, or relating to (a) any misrepresentation or breach of any representation or warranty made by any Credit Party in this Agreement, any other Transaction Documents or any other certificate, instrument or document contemplated hereby or thereby, (b) any breach of any covenant, agreement or obligation of any Credit Party contained in this Agreement, any other Transaction Documents or any other certificate, instrument or document contemplated hereby or thereby, (c) the present or former status of any Credit Party as a U.S. real property holding corporation for federal income tax
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purposes within the meaning of Section 897 of the Internal Revenue Code of 1986, as amended, if applicable, (d) the Program and the Requirements and transactions otherwise contemplated by or further described in the Transaction Documents, including, without limitation, as a result of any litigation or administrative proceeding before any court or governmental or administrative body presently pending or threatened against any Indemnitee as a result of or arising from the foregoing, (e) the imposition of any Non-Excluded Taxes imposed on amounts payable under the Transaction Documents paid by such Indemnitee and any liabilities arising therefrom or with respect thereto, whether or not such Non-Excluded Taxes were correctly or legally asserted, (f) any improper use or disclosure or unlawful use or disclosure of Customer Information by a Credit Party or (g) any action, cause of action, suit or claim, claim, demand, request for documents and/or information, regulatory review, subpoena, investigation, inquiry, civil investigatory demand, litigation or proceeding brought or made against such Indemnitee by a third party (including for these purposes a derivative action brought on behalf of any Credit Party) and arising out of or resulting from (i) the execution, delivery, performance or enforcement of this Agreement, any other Transaction Documents or any other certificate, instrument or document contemplated hereby or thereby, (ii) any transaction financed or to be financed in whole or in part, directly or indirectly, with the proceeds of the Notes, or (iii) the status of such Lender or Holder as a lender to the Borrower pursuant to the transactions contemplated by the Transaction Documents. To the extent that the foregoing undertakings by the Credit Parties may be unenforceable for any reason, the Credit Parties shall make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law. No Credit Party shall assert, and each waives, any claim against the Indemnitees on any theory of liability for special, indirect, consequential or punitive damages arising out of, in connection with or as a result of, this Agreement of any of the other Transaction Documents or the transactions contemplated hereby or thereby. The agreements in this Section 13.12 shall survive the payment of the Obligations and the termination of the Commitments, this Agreement and the other Transaction Documents. For the avoidance of doubt, the obligations and agreements of the Credit Parties under this Section 13.12 shall constitute “Obligations” hereunder and the other Transaction Documents.
Section 13.13    No Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party.
Section 13.14    Waiver. No failure or delay on the part of the Agent, any Holder or any Lender in the exercise of any power, right or privilege hereunder or any of the other Transaction Documents shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege.
Section 13.15    Payment Set Aside. To the extent that any of the Credit Parties makes a payment or payments to the Agent, the Holders or the Lenders hereunder or pursuant to any of the other Transaction Documents or the Agent, the Holders or the Lenders enforce or exercise their rights hereunder or thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be
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fraudulent or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to any of the Credit Parties, a trustee, receiver or any other Person under any law (including, without limitation, any bankruptcy law, foreign, state or federal law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred.
Section 13.16    Independent Nature of the Lenders’ and the Holders’ Obligations and Rights. The obligations of each Lender and each Holder under any Transaction Document are several and not joint with the obligations of any other Lender or Holder, and no Lender or Holder shall be responsible in any way for the performance of the obligations of any other Lender or Holder under any Transaction Document. Nothing contained herein or in any other Transaction Document, and no action taken by the Agent, any Lender or Holder pursuant hereto or thereto, shall be deemed to constitute the Agent, the Lenders and/or the Holders as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Agent, the Holders and/or the Lenders are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents and each of the Credit Parties acknowledges that the Agent, the Lenders and the Holders are not acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents. Each Lender and each Holder confirms that it has independently participated in the negotiation of the transactions contemplated hereby with the advice of its own counsel and advisors. Each Lender and each Holder shall be entitled to independently protect and enforce its rights, including, without limitation, the rights arising out of this Agreement or out of any other Transaction Documents, and it shall not be necessary for any other Lender or Holder to be joined as an additional party in any proceeding for such purpose.
Section 13.17    Set-off; Sharing of Payments.
(a)Each of Agent, each Lender, each Holder and each Affiliate (including each branch office thereof) of any of them is hereby authorized, without notice or demand (each of which is hereby waived by each Credit Party), at any time and from time to time during the continuance of any Event of Default and to the fullest extent permitted by applicable Requirements, to set off and apply any and all deposits (whether general or special, time or demand, provisional or final) at any time held and other Indebtedness, claims or other obligations at any time owing by Agent, such Lender, such Holder or any of their respective Affiliates to or for the credit or the account of the Borrower or any other Credit Party against any Obligation of any Credit Party now or hereafter existing, whether or not any demand was made under any Transaction Document with respect to such Obligation and even though such Obligation may be unmatured. No Lender or Holder shall exercise any such right of setoff without the prior consent of Agent. Each of Agent, each Lender and each Holder agrees promptly to notify the Borrower and Agent after any such setoff and application made by such Lender, Holder or its Affiliates; provided, however, that the failure to give such notice shall not affect the validity of such setoff and application. The rights under this Section 13.7(a) are in addition to any other rights and
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remedies (including other rights of setoff) that Agent, the Lenders, the Holders or their Affiliates, may have.
(b)If any Lender or Holder, directly or through an Affiliate or branch office thereof, obtains any payment of any Obligation of any Credit Party (whether voluntary, involuntary or through the exercise of any right of setoff or the receipt of any Collateral or “proceeds” (as defined under the applicable UCC) of Collateral) other than pursuant to Sections 2.6 or 13.8 and such payment exceeds the amount such Lender or Holder would have been entitled to receive if all payments had gone to, and been distributed by, Agent in accordance with the provisions of the Transaction Documents, such Lender or Holder shall purchase for cash from other Lenders or Holders such participations in their Obligations as necessary for such Lender or Holder to share such excess payment with such Lenders or Holders to ensure such payment is applied as though it had been received by Agent and applied in accordance with this Agreement (or, if such application would then be at the discretion of the Borrower, applied to repay the Obligations in accordance herewith); provided, however, that (i) if such payment is rescinded or otherwise recovered from such Lender or Holder in whole or in part, such purchase shall be rescinded and the purchase price therefor shall be returned to such Lender or Holder without interest and (ii) such Lender or Holder shall, to the fullest extent permitted by applicable Requirements, be able to exercise all its rights of payment (including the right of setoff) with respect to such participation as fully as if such Lender or Holder were the direct creditor of the applicable Credit Party in the amount of such participation.

Section 13.18    Reaffirmation. Anything contained herein to the contrary notwithstanding, this Agreement is not intended to and shall not serve to effect a novation of the “Obligations” (as defined in the Original Agreement). Instead, it is the express intention of the parties hereto to reaffirm the indebtedness, obligations and liabilities created under the Original Agreement and the Notes, which are evidenced by the Notes and secured by the Collateral. Each Credit Party acknowledges, ratifies, reaffirms and confirms that the Liens and security interests granted pursuant to the Security Documents secure the indebtedness, liabilities and obligations of the Credit Parties to the Agent, the Lenders and Holders under the Notes and the Original Agreement, as amended and restated pursuant to the Notes and this Agreement, respectively (except that the grants of security interests, mortgages and Liens under and pursuant to the Security Documents (including previous grants of security interests, mortgages and Liens under and pursuant to the Security Documents as defined in the Original Agreement) shall continue unaltered, and each other Transaction Document (including (a) any Notes previously issued and outstanding prior to the date hereof and (b) the Transactions Documents as such term is defined in the Original Agreement) shall continue in full force and effect in accordance with its terms unless otherwise amended by the parties thereto, and the parties hereto hereby acknowledge, ratify, reaffirm and confirm the terms thereof as being in full force and effect and unaltered by this Agreement), that the term “Obligations” as used in the Transaction Documents (including the Transactions Documents as such term is defined in the Original Agreement) (or any other term used therein to describe or refer to the indebtedness, liabilities and obligations of the Credit Parties to the Agent and the Lenders and Holders) includes the indebtedness, liabilities and obligations of the Credit Parties under this Agreement and the Notes delivered or reaffirmed hereunder, and under the Notes and the Original Agreement, as amended and restated pursuant to
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the Notes and this Agreement, respectively, as the same further may be amended, modified, supplemented and/or restated from time to time and the parties hereto hereby acknowledge, ratify, reaffirm and confirm that all of such security interests, mortgages and Liens are intended and shall be deemed and construed to secure to the fullest extent set forth therein all now existing and hereafter arising Obligations under and as defined in this Agreement, as hereafter amended, modified, supplemented and/or restated from time to time. The Transaction Documents and all agreements, instruments and documents executed or delivered in connection with any of the foregoing shall each be deemed to be amended to the extent necessary to give effect to the provisions of this Section 13.18. Each reference to the “Financing Agreement” or the “Notes” in any Transaction Document shall mean and be a reference to this Agreement and the Notes issued or reaffirmed hereunder, respectively (as each may be further amended, restated, supplemented or otherwise modified from time to time). Cross-references in the Transaction Documents to particular section numbers in the Original Agreement shall be deemed to be cross-references to the corresponding sections, as applicable, of this Agreement.
Section 13.19    Release of Agent and Lenders. Notwithstanding any other provision of this Agreement or any other Transaction Document, each Credit Party voluntarily, knowingly, unconditionally and irrevocably, with specific and express intent, for and on behalf of itself, its managers, members, directors, officers, employees, stockholders, Affiliates, agents, representatives, auditors, attorneys, successors and assigns, fiduciaries, principals, investment managers, investors and their respective Affiliates (collectively, the “Releasing Parties”), hereby fully and completely releases and forever discharges Agent, each Lender, each Holder, their respective successors and assigns and their respective directors, officers, agents, employees, advisors, shareholders, attorneys and Affiliates and any other Person or insurer which may be responsible or liable for the acts or omissions of any of them, or who may be liable for the injury or damage resulting therefrom (collectively, the “Released Parties”), of and from any and all actions, causes of action, damages, claims, obligations, liabilities, costs, expenses and demands of any kind whatsoever, at law or in equity, matured or unmatured, vested or contingent, that any of the Releasing Parties has against any of the Released Parties as of the date hereof. Each Credit Party acknowledges the foregoing release is a material inducement to Agent, each Lender’s and each Holder's decision to extend to the Borrower the financial accommodations hereunder and has been relied upon by the Agent, each Holder and each Lender in agreeing to purchase the Notes
Section 13.20    Limited Recourse and Non-Petition.
(a)    The Secured Parties shall have recourse only to the proceeds of the realization of Collateral once the proceeds have been applied in accordance with the terms of the Pledge and Security Agreement (the “Net Proceeds”). If the Net Proceeds are insufficient to discharge all payments which, but for the effect of this clause, would then be due (the “Amounts Due”), the obligation of the Company shall be limited to the amounts available from the Net Proceeds and no debt shall be owed to the Secured Parties by the Company for any further sum. The Secured Parties shall not take any action or commence any proceedings against the Company to recover any amounts due and payable by the Company under this Agreement except as expressly permitted by the provisions of this Agreement. The Secured Parties shall not take any action or
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commence any proceedings or petition a court for the liquidation of the Company, nor enter into any arrangement, reorganization or insolvency proceedings in relation to the Company whether under the laws of the Cayman Islands or other applicable bankruptcy laws until after the later to occur of the payment of all of the Amounts Due or the application of all of the Net Proceeds.
(b)    The Secured Parties hereby acknowledge and agree that the Company’s obligations under the Transaction Documents are solely the corporate obligations of the Company, and that the Secured Parties shall not have any recourse against any of the directors, officers or employees of the Company for any claims, losses, damages, liabilities, indemnities or other obligations whatsoever in connection with any transactions contemplated by the Transaction Documents.
(c)Creditor Debtor Relationship
. The relationship between Agent, each Lender and each Holder, on the one hand, and the Credit Parties, on the other hand, is solely that of creditor and debtor. None of the Agent, any Lender or any Holder has any advisory or fiduciary relationship or duty to any Credit Party or to any Credit Party’s business associates arising out of or in connection with, and there is no agency, tenancy or joint venture relationship between the Agent, any Lender or any Holder and the Credit Parties by virtue of, any Transaction Document or any transaction contemplated therein. Nothing contained herein or in any other Transaction Document, and no action taken by the Agent, any Lender or any Holder pursuant hereto or thereto, shall be deemed to constitute the Agent, the Lenders and/or the Holders as a partnership, an association, a joint venture or any other kind of entity with any of the Credit Parties, or create a presumption that the Agent, the Holders and/or the Lenders are in any way acting in concert or as a group with any of the Credit Parties with respect to the transactions contemplated by the Transaction Documents. None of the Agent, any Lender or any Holder has been involved in the structuring, negotiation or implementation of the business of the Credit Parties or given any advice to the Credit Parties or any of the Credit Party’s business associates with respect to the Credit Parties structuring, negotiating, implementing and operating their respective businesses, and the Credit Parties have relied solely on the advice of their own counsel in structuring, negotiating, implementing and operating their respective businesses. Without characterizing the relationship between Agent, each Lender and each Holder, on the one hand, and the Credit Parties, on the other hand, as anything other than that of creditor and debtor, in the event the nature of such relationship between Agent, each Lender and each Holder, on the one hand, and the Credit Parties, on the other hand, shall ever be challenged and recharacterized as an equity, ownership, advisory or any other type of relationship, it is agreed and understood that the Agent, each Lender and each Holder shall solely be considered a passive investor with respect to the Credit Parties.
[Signature Pages Follow]


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IN WITNESS WHEREOF, each party has caused its signature page to this Financing Agreement to be duly executed as of the date first written above.
BORROWER:

ELASTIC SPV, LTD., an exempted company incorporated with limited liability under the laws of the Cayman Islands, as a Borrower



By:                            
Name:
Title:



Financing Agreement
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IN WITNESS WHEREOF, each party has caused its signature page to this Financing Agreement to be duly executed as of the date first written above.

GUARANTORS:

ELEVATE CREDIT, INC., a Delaware corporation



By:                            
Name: Jason Harvison
Title: Chief Executive Officer
Financing Agreement
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IN WITNESS WHEREOF, each party has caused its signature page to this Financing Agreement to be duly executed as of the date first written above.

GUARANTORS (CONT.), EACH AS AN “ELEVATE CREDIT SUBSIDIARY”:

ELASTIC FINANCIAL, LLC
ELEVATE DECISION SCIENCES, LLC
RISE CREDIT, LLC
FINANCIAL EDUCATION, LLC
ELEVATE CREDIT SERVICE, LLC
RISE SPV, LLC
EF FINANCIAL, LLC

By: Elevate Credit, Inc., as Sole Member of each of the above-named entities


By:                            
Name: Kenneth E. ReesJason Harvison
Title:     President

RISE CREDIT SERVICE OF OHIO, LLC
RISE CREDIT SERVICE OF TEXAS, LLC

By: RISE Credit, LLC, as Sole Member of each of the above-named entities
By: Elevate Credit, Inc., as its Sole Member


By:                            
Name:     Kenneth E. ReesJason Harvison
Title:     President



Financing Agreement
US_142815097

IN WITNESS WHEREOF, the parties hereto have caused this Financing Agreement to be duly executed on the day and year first above written.

RISE FINANCIAL, LLC
RISE CREDIT OF ALABAMA, LLC
RISE CREDIT OF ARIZONA, LLC
RISE CREDIT OF CALIFORNIA, LLC
RISE CREDIT OF COLORADO, LLC
RISE CREDIT OF DELAWARE, LLC
RISE CREDIT OF FLORIDA, LLC
RISE CREDIT OF GEORGIA, LLC
RISE CREDIT OF IDAHO, LLC
RISE CREDIT OF ILLINOIS, LLC
RISE CREDIT OF KANSAS, LLC
RISE CREDIT OF LOUISIANA, LLC
RISE CREDIT OF MISSISSIPPI, LLC
RISE CREDIT OF MISSOURI, LLC
RISE CREDIT OF NEBRASKA, LLC
RISE CREDIT OF NEVADA, LLC
RISE CREDIT OF NORTH DAKOTA, LLC
RISE CREDIT OF OKLAHOMA, LLC
RISE CREDIT OF SOUTH CAROLINA, LLC
RISE CREDIT OF SOUTH DAKOTA, LLC
RISE CREDIT OF TEXAS, LLC
RISE CREDIT OF TENNESSEE, LLC
RISE CREDIT OF UTAH, LLC
RISE CREDIT OF VIRGINIA, LLC
By: RISE SPV, LLC, as Sole Member of each of the above-named entities
By: Elevate Credit, Inc., as its Sole Member



By:                            
Name: Kenneth E. ReesJason Harvison
Title:     President


Financing Agreement
US_142815097

IN WITNESS WHEREOF, the parties hereto have caused this Financing Agreement to be duly executed on the day and year first above written.
ELASTIC LOUISVILLE, LLC
ELEVATE ADMIN, LLC
ELASTIC MARKETING, LLC
By: Elastic Financial, LLC, as Sole Member of each of the above-named entities
By: Elevate Credit, Inc., as its Sole Member

By:                            
Name:     Kenneth E. ReesJason Harvison
Title:     President


Financing Agreement
US_142815097

IN WITNESS WHEREOF, each party has caused its signature page to this Financing Agreement to be duly executed as of the date first written above.

AGENT:

VICTORY PARK MANAGEMENT, LLC


By:                            
Name:     Scott R. Zemnick
Title:     Authorized Signatory

LENDER:

VPC INVESTOR FUND B, LLC

By:     VPC Investor Fund GP B, L.P.
Its:     Managing Member

By:     VPC Investor Fund UGP B, LLC
Its:     General Partner


By:                            
Name:    Scott R. Zemnick
Title:    General Counsel

VPC SPECIAL OPPORTUNITIES FUND III ONSHORE, L.P.

By: VPC Special Opportunities Fund III GP, L.P.
Its: General Partner

By: VPC Special Opportunities III UGP, LLC
Its: General Partner

By:                            
Name: Scott R. Zemnick
Title: General Counsel

[SIGNATURE PAGES CONTINUE]



Signature Page to Financing Agreement
US_142815097

LENDERS (CON’T.):

VPC ONSHORE SPECIALTY FINANCE FUND II, L.P.

By:     VPC Specialty Finance Fund GP II, L.P.
Its:     General Partner

By:     VPC Specialty Finance Fund UGP II, LLC
Its:     General Partner


By:                            
Name:    Scott R. Zemnick
Title:    General Counsel


VPC INVESTOR FUND B II, LLC

By:     VPC Investor Fund GP B II, L.P.
Its:     Managing Member

By:     VPC Investor Fund UGP B II, LLC
Its:     General Partner

    
By:                            
Name:    Scott R. Zemnick
Title: General Counsel

VPC INVESTOR FUND C, L.P.

By:     VPC Investor Fund GP C, L.P.
Its:     General Partner

By:     VPC Investor Fund UGP C, LLC
Its:     General Partner


By:                            
Name:    Scott R. Zemnick
Title:    General Counsel

Signature Page to Financing Agreement
US_142815097




LENDERS (CON’T.):

VPC INVESTOR FUND G-1, L.P.

By:     VPC Investor Fund GP G, L.P.
Its:     General Partner

By:     VPC Investor Fund UGP G, LLC
Its:     General Partner

By:                            
Name:    Scott R. Zemnick
Title:    General Counsel



VPC SPECIALTY LENDING FUND (NE), LTD.

By:     Victory Park Capital Advisors, LLC
Its:     Investment Manager (pursuant to powers of attorney granted in the Investment Management Agreement)

By:                            
Name:    Scott R. Zemnick
Title:    General Counsel



Signature Page to Financing Agreement
US_142815097

VPC SPECIALTY LENDING INVESTMENTS INTERMEDIATE, L.P.

By:    VPC Specialty Lending Investments Intermediate GP, LLC
Its:    General Partner

By:     Victory Park Management, LLC
Its:    Manager

By:                            
Name:    Scott R. Zemnick
Title:    Manager


VPC OFFSHORE UNLEVERAGED PRIVATE DEBT FUND, L.P.

By:     VPC Private Debt Fund GP, L.P.
Its:     General Partner

By:     VPC UGP, LLC
Its:     General Partner

By:                            
Name:    Scott R. Zemnick
Title:    General Counsel


[SIGNATURE PAGES CONTINUE]


Signature Page to Financing Agreement
US_142815097

LENDERS (CON’T.):

VPC INVESTOR FUND G-2, L.P.

By: VPC Investor Fund GP G-2, LP
Its: General Partner

By: VPC Investor Fund UGP G, LLC
Its: General Partner

By:                            
Name: Scott R. Zemnick
Title: General Counsel




Signature Page to Financing Agreement
US_142815097

SCHEDULE OF LENDERS
(1) (2) (3) (4) (5)
Lender Address and Facsimile Number Commitment to Purchase Notes: Commitment to Purchase Restatement Closing Notes at Restatement Closing: Legal Representative’s Address and Facsimile Number
VPC INVESTOR FUND B, LLC 150 North Riverside Plaza, Suite 5200
Suite 3900
Chicago, IL 60606
Telephone: 312.705.2786
Facsimile: 312.701.0794
Attention: Scott R. Zemnick
E-mail: szemnick@vpcadvisors.com 		$34,502,000.00 $34,502,000.00
Katten Muchin Rosenman LLP
525 West Monroe Street
Chicago, IL 60661
Telephone:    (312) 902-5297
    (312) 902-5495
Facsimile:    (312) 577-8964
    (312) 577-8854
Attention:    Mark R. Grossmann
    Scott E. Lyons
E-mail:    mg@katten.com
    scott.lyons@kattenlawkatten.com
VPC Offshore Unleveraged Private Debt Fund, L.P. 150 North Riverside Plaza, Suite 5200
Suite 3900
Chicago, IL 60606
Telephone: 312.705.2786
Facsimile: 312.701.0794
Attention: Scott R. Zemnick
E-mail: szemnick@vpcadvisors.com 		$7,021,000.00 $7,021,000.00
Katten Muchin Rosenman LLP
525 West Monroe Street
Chicago, IL 60661
Telephone:    (312) 902-5297
    (312) 902-5495
Facsimile:    (312) 577-8964
    (312) 577-8854
Attention:    Mark R. Grossmann
    Scott E. Lyons
E-mail:    mg@katten.com
    scott.lyons@kattenlawkatten.com
Schedule - 1
US_142815097

VPC ONSHORE SPECIALTY FINANCE FUND II, L.P. 150 North Riverside Plaza, Suite 5200
Suite 3900
Chicago, IL 60606
Telephone: 312.705.2786
Facsimile: 312.701.0794
Attention: Scott R. Zemnick
E-mail: szemnick@vpcadvisors.com 		$115,661,000.00 $4,661,000.00
Katten Muchin Rosenman LLP
525 West Monroe Street
Chicago, IL 60661
Telephone:    (312) 902-5297
    (312) 902-5495
Facsimile:    (312) 577-8964
    (312) 577-8854
Attention:    Mark R. Grossmann
    Scott E. Lyons
E-mail:    mg@katten.com
    scott.lyons@kattenlawkatten.com
VPC INVESTOR FUND B II, LLC 150 North Riverside Plaza, Suite 5200
Suite 3900
Chicago, IL 60606
Telephone: 312.705.2786
Facsimile: 312.701.0794
Attention: Scott R. Zemnick
E-mail: szemnick@vpcadvisors.com 		$2,948,000.00 $2,948,000.00
Katten Muchin Rosenman LLP
525 West Monroe Street
Chicago, IL 60661
Telephone:    (312) 902-5297
    (312) 902-5495
Facsimile:    (312) 577-8964
    (312) 577-8854
Attention:    Mark R. Grossmann
    Scott E. Lyons
E-mail:    mg@katten.com
    scott.lyons@kattenlawkatten.com
VPC INVESTOR FUND C, L.P. 150 North Riverside Plaza, Suite 5200
Suite 3900
Chicago, IL 60606
Telephone: 312.705.2786
Facsimile: 312.701.0794
Attention: Scott R. Zemnick
E-mail: szemnick@vpcadvisors.com 		$15,400,000.00 $15,400,000.00
Katten Muchin Rosenman LLP
525 West Monroe Street
Chicago, IL 60661
Telephone:    (312) 902-5297
    (312) 902-5495
Facsimile:    (312) 577-8964
    (312) 577-8854
Attention:    Mark R. Grossmann
    Scott E. Lyons
E-mail:    mg@katten.com
    scott.lyons@kattenlawkatten.com
Schedule - 2
US_142815097

VPC INVESTOR FUND G-1, L.P. 150 North Riverside Plaza, Suite 5200
Suite 3900
Chicago, IL 60606
Telephone: 312.705.2786
Facsimile: 312.701.0794
Attention: Scott R. Zemnick
E-mail: szemnick@vpcadvisors.com 		$58,581,000.00 $58,581,000.00
Katten Muchin Rosenman LLP
525 West Monroe Street
Chicago, IL 60661
Telephone:    (312) 902-5297
    (312) 902-5495
Facsimile:    (312) 577-8964
    (312) 577-8854
Attention:    Mark R. Grossmann
    Scott E. Lyons
E-mail:    mg@katten.com
    scott.lyons@kattenlawkatten.com
VPC INVESTOR FUND G-2, L.P. 150 North Riverside Plaza, Suite 5200
Suite 3900
Chicago, IL 60606
Telephone: 312.705.2786
Facsimile: 312.701.0794
Attention: Scott R. Zemnick
E-mail: szemnick@vpcadvisors.com 		$45,900,000.00 $45,900,000.00
Katten Muchin Rosenman LLP
525 West Monroe Street
Chicago, IL 60661
Telephone:    (312) 902-5297
    (312) 902-5495
Facsimile:    (312) 577-8964
    (312) 577-8854
Attention:    Mark R. Grossmann
    Scott E. Lyons
E-mail:    mg@katten.com
    scott.lyons@kattenlawkatten.com
VPC SPECIALTY LENDING FUND (NE), LTD. 150 North Riverside Plaza, Suite 5200
Suite 3900
Chicago, IL 60606
Telephone: 312.705.2786
Facsimile: 312.701.0794
Attention: Scott R. Zemnick
E-mail: szemnick@vpcadvisors.com 		$9,899,000.00 $9,899,000.00
Katten Muchin Rosenman LLP
525 West Monroe Street
Chicago, IL 60661
Telephone:    (312) 902-5297
    (312) 902-5495
Facsimile:    (312) 577-8964
    (312) 577-8854
Attention:    Mark R. Grossmann
    Scott E. Lyons
E-mail:    mg@katten.com
    scott.lyons@kattenlawkatten.com
Schedule - 3
US_142815097

VPC Special Opportunities Fund III Onshore, L.P. 150 North Riverside Plaza, Suite 5200
Suite 3900
Chicago, IL 60606
Telephone: 312.705.2786
Facsimile: 312.701.0794
Attention: Scott R. Zemnick
E-mail: szemnick@vpcadvisors.com 		$13,649,000.00 $13,649,000.00
Katten Muchin Rosenman LLP
525 West Monroe Street
Chicago, IL 60661
Telephone:    (312) 902-5297
    (312) 902-5495
Facsimile:    (312) 577-8964
    (312) 577-8854
Attention:    Mark R. Grossmann
    Scott E. Lyons
E-mail:    mg@katten.com
    scott.lyons@kattenlawkatten.com
VPC Specialty Lending Investments Intermediate, L.P. 150 North Riverside Plaza, Suite 5200
Suite 3900
Chicago, IL 60606
Telephone: 312.705.2786
Facsimile: 312.701.0794
Attention: Scott R. Zemnick
E-mail: szemnick@vpcadvisors.com 		$46,439,000.00 $46,439,000.00
Katten Muchin Rosenman LLP
525 West Monroe Street
Chicago, IL 60661
Telephone:    (312) 902-5297
    (312) 902-5495
Facsimile:    (312) 577-8964
    (312) 577-8854
Attention:    Mark R. Grossmann
    Scott E. Lyons
E-mail:    mg@katten.com
    scott.lyons@kattenlawkatten.com


Schedule - 4
US_142815097

Exhibit 31.1
CERTIFICATION
I, Jason Harvison, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of Elevate Credit, 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 the registrant’s board of directors (or persons performing the equivalent functions):
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.
Date: November 9, 2020 By: /s/ Jason Harvison
Jason Harvison
  Chief Executive Officer
(Principal Executive Officer)




Exhibit 31.2
CERTIFICATION
I, Christopher Lutes, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of Elevate Credit, 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 the registrant’s board of directors (or persons performing the equivalent functions):
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.
Date: November 9, 2020 By: /s/ Christopher Lutes
Christopher Lutes
  Chief Financial Officer
(Principal Financial Officer)



Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, Jason Harvison, Chief Executive Officer of Elevate Credit, Inc. (the "Company"), hereby certify, that, to my knowledge:
i.The Company’s Quarterly Report on Form 10-Q for the period ending September 30, 2020 as filed with the Securities and Exchange Commission on the date hereof (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
ii.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: November 9, 2020 By: /s/ Jason Harvison
Jason Harvison
  Chief Executive Officer
(Principal Executive Officer)



Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, Christopher Lutes, Chief Financial Officer of Elevate Credit, Inc. (the "Company"), hereby certify, that, to my knowledge:
i.The Company’s Quarterly Report on Form 10-Q for the period ending September 30, 2020 as filed with the Securities and Exchange Commission on the date hereof (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
ii.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: November 9, 2020 By: /s/ Christopher Lutes
Christopher Lutes
  Chief Financial Officer
(Principal Financial Officer)