On January 25, 2023, The Honest Company, Inc. entered into a first lien credit agreement with JPMorgan Chase Bank, N.A., as administrative agent and lender, and the other lenders party thereto, which provides for a $35.0 million revolving credit facility maturing on April 30, 2026. The 2023 Credit Facility includes a subfacility that provides for the issuance of letters of credit in an amount of up to $15.0 million at any time outstanding, of which the Company has $4.8 million in existing letters of credit outstanding as of January 27, 2023. Availability of the 2023 Credit Facility will be based upon a borrowing base formula and periodic borrowing base certifications valuing certain of the Company's accounts receivable and inventory as reduced by an availability block and certain reserves, if any.

The 2023 Credit Facility includes an uncommitted accordion feature that allows for increases in the Revolving Commitment to as much as an additional $35.0 million, for up to $70.0 million in potential Revolving Commitment. The 2023 Credit Facility is subject to customary fees for loan facilities of this type, including a commitment fee based on the average daily undrawn portion of the 2023 Credit Facility. The Company has not borrowed under the 2023 Credit Facility as of January 27, 2023.

Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the 2023 Credit Facility. The interest rate applicable to the 2023 Credit Facility will be, at the Company's option, either (a) the Adjusted Term SOFR Rate (subject to a 0.00% floor), plus a margin ranging from 1.50% to 2.25% or (b) the CB floating rate, (i) plus a margin of 0.25% or (ii) minus a margin ranging from 0.25% to 0.50%. The margin will be based upon the Company's fixed charge coverage ratio.

The CB floating rate is the highest of (a) the Wall Street Journal prime rate and (b) 2.50%. The 2023 Credit Facility will terminate and borrowings thereunder, if any, will be due in full on April 30, 2026. Debt under the 2023 Credit Facility will be guaranteed by substantially all of the Company's material domestic subsidiaries and will be secured by substantially all of the company's and such subsidiaries' assets.

On January 25, 2023, upon entry into the 2023 Credit Facility, the Company's existing first lien credit agreement, dated as of April 30, 2021, with JPMorgan Chase Bank, N.A., as administrative agent and lender, and the other lenders party thereto was terminated. The 2021 Credit Facility provided for a $35.0 million revolving credit facility that matured on April 30, 2026. The 2021 Credit Facility included a subfacility that provided for the issuance of letters of credit in an amount of up to $10.0 million at any time outstanding, which reduced the amount available under the 2021 Credit Facility.

The 2021 Credit Facility was subject to customary fees for loan facilities of this type, including a commitment fee based on the average daily undrawn portion of the revolving credit facility. The interest rate applicable to the 2021 Credit Facility was, at the Company's option, either (a) the LIBOR (or a replacement rate established in accordance with the terms of the 2021 Credit Facility) (subject to a 0.00% LIBOR floor), plus a margin of 1.50% or (b) the CB floating rate minus a margin of 0.50%. The CB floating rate was the higher of (a) the Wall Street Journal prime rate and (b)(i) 2.50% plus (ii) the adjusted LIBOR rate for a one-month interest period.