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AMENDED AND RESTATED CREDIT AND GUARANTY AGREEMENT Dated as of

Tuesday, January 24, 2023 8 min read
Key Takeaway: AMENDED AND RESTATED CREDIT AND GUARANTY AGREEMENT Dated as of September 16, 2022 by and among QHM HOLDINGS INC., as the Borrower, THE GUARANTORS FROM TIME TO TIME PARTY HERETO, CIT BANK, a division of FIRST-CITIZENS BANK & TRUST COMPANY, as Administrative Agent, and THE OTHER LE

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AMENDED AND RESTATED CREDIT AND GUARANTY AGREEMENT Dated as of September 16, 2022 by and among QHM HOLDINGS INC., as the Borrower, THE GUARANTORS FROM TIME TO TIME PARTY HERETO, CIT BANK, a division of FIRST-CITIZENS BANK & TRUST COMPANY, as Administrative Agent, and THE OTHER LENDERS PARTY HERETO
Arranged By: CIT BANK, a division of FIRST-CITIZENS BANK & TRUST COMPANY, as Sole Lead Arranger and Book Runner
ARTICLE 1 DEFINITIONS AND ACCOUNTING TERMS 1
1.01 Defined Terms 1
1.02 Other Interpretative Provisions 55
1.03 Accounting Terms 55
1.04 Rounding 56
1.05 Times of Day 56
1.06 Letter of Credit Amounts 56
1.07 Divisions 57
1.08 Interest Rates 57
ARTICLE 2 THE COMMITMENTS AND CREDIT EXTENSIONS 57
2.01 Loans 57
2.02 Borrowings, Conversions and Continuations of Loans 58
2.03 Letters of Credit and Letter of Credit Fees 60
2.04 Swingline Loans 67
2.05 Prepayments 69
2.06 Termination or Reduction of Total Delayed Draw Term Loan Commitments or Revolving Commitments 73
2.07 Repayment of Loans 74
2.08 Interest 75
2.09 Fees 76
2.10 Computation of Interest and Fees 76
2.11 Evidence of Debt 77
2.12 Payments Generally 77
2.13 Sharing of Payments 79
2.14 Handling of Proceeds of Collateral; Cash Dominion; Revolving Loan Account 79
2.15 Uncommitted Facilities Increase 82
2.16 Defaulting Lenders 87
ARTICLE 3 TAXES, YIELD PROTECTION AND ILLEGALITY 8 9
3.01 Taxes 8 9
3.02 Illegality 93
3.03 Inability to Determine Rate 94
3.04 Increased Cost and Reduced Return; Capital Adequacy 94
3.05 Funding Losses 95
3.06 Matters Applicable to all Requests for Compensation 95
3.07 Benchmark Replacement Setting; Conforming Changes 96
3.08 Survival 100
ARTICLE 4 CONDITIONS PRECEDENT TO CREDIT EXTENSIONS 101
4.01 Conditions of Initial Credit Extension 101
4.02 Conditions to all Credit Extensions 105
4.03 Satisfaction of Conditions 106
ARTICLE 5 REPRESENTATIONS AND WARRANTIES 107
5.01 Existence, Qualification and Power 107
5.02 Authorization; No Contravention 107
5.03 Governmental Authorization; Other Consents 107
5.04 Binding Effect 107
5.05 Financial Statements; No Material Adverse Effect 108
5.06 Litigation 108
5.07 No Default 109
5.08 Ownership of Property; Liens 109
5.09 Environmental Compliance 109
5.10 Insurance 110
5.11 Taxes 110
5.12 ERISA Compliance 110
5.13 Subsidiaries 111
5.14 Margin Regulations; Investment Company Act, Use of Proceeds 111
5.15 Disclosure 112
5.16 Compliance with Laws 112
5.17 Intellectual Property; Licenses, Etc. 112
5.18 Broker's Fees 113
5.19 Labor Matters 113
5.20 Business Locations 113
5.21 Perfection of Security Interests in the Collateral 113
5.22 Solvency 113
5.23 Status as Senior Debt, Subordinated Debt Subordination 114
5.24 Material Contracts 114
5.25 Accounts 114
5.26 Holding Company Status 114
5.27 Patriot Act 114
5.28 OFAC 115
5.29 EEA Financial Institutions 115
5.30 Flood Zone 115
5.31 Healthcare Authorizations and Accreditations 115
5.32 HIPAA/HITECH Compliance 115
5.33 Reimbursement; Third-Party Payors 116
5.34 Other Healthcare Regulatory Matters 116
5.35 Compliance with Healthcare Laws 116
5.36 Compliance of Products 118
5.37 Inventory Suppliers 120
ARTICLE 6 AFFIRMATIVE COVENANTS 121
6.01 Financial Statements 121
6.02 Certificates; Other Information 122
6.03 Notices 124
6.04 Payment of Obligations: Tax Returns 125
6.05 Preservation of Existence, Material Contracts, Etc. 125
6.06 Maintenance of Properties 126
6.07 Maintenance of Insurance 127
6.08 Compliance with Laws 127
6.09 Books and Records 127
6.10 Inspection Rights 128
6.11 Use of Proceeds 128
6.12 Additional Subsidiaries 129
6.13 ERISA Compliance 129
6.14 Pledged Assets 129
6.15 Covenant with Respect to Environmental Matters 130
6.16 Covenants with Respect to Real Property 131
6.17 Lenders Annual Meetings and Quarterly Teleconferences 132
6.18 Post-Closing Covenants 132
6.19 Interest Rate Protection 132
6.20 Patriot Act; OFAC 132
6.21 Landlord and Warehouse Agreements; Cloud Assignment Agreements 132
6.22 [Reserved] 133
6.23 Inventory 133
6.24 Primary Treasury Management 133
6.25 Licenses 134
6.26 Healthcare Operations 135
ARTICLE 7 NEGATIVE COVENANTS 136
7.01 Indebtedness 136
7.02 Liens 138
7.03 Investments 139
7.04 Fundamental Changes 140
7.05 Dispositions 141
7.06 Restricted Payments 142
7.07 Change in Nature of Business 142
7.08 Transactions with Affiliates and Insiders 142
7.09 Burdensome Agreements 142
7.10 Use of Proceeds 143
7.11 Amendments of Subordinated Debt; Amendments to Certain Agreements 143
7.12 Organization Documents; Fiscal Year; Legal Name, State of Formation and Form of Entity 144
7.13 Ownership of Subsidiaries 144
7.14 Sale and Leaseback Transactions 144
7.15 Limitations on Ultimate Parent, Holdings and Quipt 144
7.16 Account Control Agreements; Bank Accounts 144
7.17 Management Agreement 145
7.18 Healthcare Matters 145
ARTICLE 8 FINANCIAL COVENANTS 146
8.01 Financial Covenants 146
ARTICLE 9 EVENTS OF DEFAULT AND REMEDIES 147
9.01 Events of Default 147
9.02 Remedies upon Event of Default 151
9.03 Collections of Rents and Profits by Receiver or Administrative Agent 152
9.04 Application of Funds 152
9.05 Loan Parties Right to Cure 153
ARTICLE 10 GUARANTY 155
10.01 The Guaranty 155
10.02 Obligations Unconditional 155
10.03 Reinstatement 156
10.04 Waivers 157
10.05 Remedies 157
10.06 Contribution by Guarantors 158
10.07 Guarantee of Payment; Continuing Guarantee 158
10.08 Subordination of Other Obligations 158
10.09 Qualified ECP Guarantors 159
ARTICLE 11 THE ADMINISTRATIVE AGENT 159
11.01 Appointment and Authorization of Administrative Agent 159
11.02 Delegation of Duties 160
11.03 Liability of Administrative Agent 160
11.04 Reliance by Administrative Agent 161
11.05 Notice of Default 162
11.06 Credit Decision; Disclosure of Information by Administrative Agent 162
11.07 Indemnification of Administrative Agent 163
11.08 Administrative Agent in its Individual Capacity 163
11.09 Successor Administrative Agent 164
11.10 Administrative Agent May File Proofs of Claim 164
11.11 Collateral and Guaranty Matters 165
11.12 Other Agents; Arrangers and Managers 166
11.13 Additional Secured Parties 166
11.14 Exclusive Right to Enforce Rights and Remedies 167
11.15 Flood Laws 167
11.16 Banking Services Obligations/Hedging 168
11.17 Certain ERISA Matters 168
11.18 Erroneous Payments 169
ARTICLE 12 MISCELLANEOUS 173
12.01 Amendments, Etc. 173
12.02 Notices and Other Communications; Facsimile Copies 175
12.03 No Waiver; Cumulative Remedies 177
12.04 Attorney Costs, Expenses 177
12.05 Indemnification by the Loan Parties 178
12.06 Payments Set Aside 179
12.07 Successors and Assigns 179
12.08 Confidentiality 184
12.09 Set-off 186
12.10 Interest Rate Limitation 186
12.11 Counterparts 187
12.12 Integration 187
12.13 Survival of Representations and Warranties 187
12.14 Severability 187
12.15 Replacement of Lenders 188
12.16 Governing Law 188
12.17 Waiver of Right to Trial by Jury 189
12.18 USA Patriot Act Notice 189
12.19 Nonliability of Lenders 190
12.20 Acknowledgment and Consent to Bail-In of Affected Financial Institutions 191
12.21 Acknowledgement Regarding Any Supported QFCs 192
ARTICLE 13 APPOINTMENT OF THE BORROWER REPRESENTATIVE; JOINT AND SEVERAL LIABILITY OF THE BORROWERS; SUBORDINATION 193
13.01 Borrower Representative 193
13.02 Joint and Several Liability of Borrowers 193
13.03 Subordination to Payment of Obligations 197
13.04 Effect of Amendment and Restatement 198
1.01 (a) Existing Letters of Credit
1.01(b) Excluded Accounts
2.01 Commitments and Pro Rata Shares
4.01 Subordinated Indebtedness
5.10 Insurance
5.13 Capitalization
5.17 IP Rights
5.20(a) Locations of Real Property
5.20(b) Locations of Tangible Personal Property
5.20(c) Locations of Chief Executive Office
5.24 Material Contracts
5.25 Accounts
5.36(a) Compliance of Products
5.36(b) Required Healthcare Authorizations
5.37 Inventory Suppliers
6.18 Post-Closing Covenants
7.01 Indebtedness Existing on the Closing Date
7.02 Liens Existing on the Closing Date
7.03 Investments Existing on the Closing Date
12.02 Certain Addresses for Notices
A-1 Form of Loan Notice
A-2 Form of Swingline Loan Notice
B-1 Form of Revolving Note
B-2 Form of Term Note
B-3 Form of Swingline Note
C Form of Compliance Certificate
D-1 Form of Assignment and Assumption Agreement
D-2 [Reserved]
E Form of Solvency Certificate
F [Reserved]
G-1 Form of U.S. Tax Compliance Certificate
G-2 Form of U.S. Tax Compliance Certificate
G-3 Form of U.S. Tax Compliance Certificate
G-4 Form of U.S. Tax Compliance Certificate
AMENDED AND RESTATED CREDIT AND GUARANTY AGREEMENT
This AMENDED AND RESTATED
CREDIT AND GUARANTY AGREEMENT is entered into as of September 16, 2022 among, QHM HOLDINGS INC., a Delaware corporation ("Quipt")
and such other Persons joined hereto as a Borrower from time to time (each a "Borrower" and together, the "Borrowers"),
the Guarantors (as hereinafter defined) from time to time party hereto, including QUIPT HOME MEDICAL INC., a Delaware corporation ("Holdings"),
the Lenders (as hereinafter defined) from time to time party hereto, and CIT BANK, a division of FIRST-CITIZENS BANK & TRUST
COMPANY ("CIT"), as Administrative Agent.
Administrative Agent and
certain lenders have previously established credit facilities in favor of Borrowers pursuant to that certain Credit and Security Agreement
(as amended, restated, supplemented or otherwise modified from time to time, the "Existing Credit Agreement"), dated
as of September 18, 2020, by and among Quipt and each of the Persons signatory thereto and named on Schedule 1 thereto as
a borrower, Holdings, as a guarantor, certain lenders party thereto, and CIT (f/k/a CIT Bank, N.A.), as administrative agent.
The Borrowers have requested
that the Lenders agree to certain modifications to the Existing Credit Agreement and to provide $110,000,000 in credit facilities for
the purposes set forth herein and the Lenders are willing to do so on the terms and conditions set forth herein.
In consideration of the mutual
covenants and agreements herein contained, the parties hereto covenant and agree as follows:
DEFINITIONS AND ACCOUNTING TERMS
Terms. As used in this Agreement, the following terms shall have the meanings set forth below:
Term SOFR" means, for any day, the greater of (i) the rate per annum equal to the rate determined by Administrative Agent
to be Adjusted Term SOFR with a tenor equivalent to three (3) months, in effect on such day (or if such day is not a U.S. Government
Securities Business Day, the first preceding U.S. Government Securities Business Day, so long as such first preceding U.S. Government
Securities Business Day is not more than three (3) U.S. Government Securities Business Days prior to the determination day), and
Migration Completion Date" means three hundred and sixty-five (365) days following the Closing Date (or such later date
as agreed to in writing by Administrative Agent as determined in its sole discretion).
means all of the Loan Parties' present and future: (a) accounts (as defined in the UCC); (b) instruments, documents,
chattel paper (including electronic chattel paper) (all as defined in the UCC); (c) reserves and credit balances arising in connection
with or pursuant to this Agreement; (d) guaranties; (e) other supporting obligations, payment intangibles and letter of credit
rights (all as defined in the UCC); (f) property, including notes and deposits, of the Loan Parties' account debtors securing
the obligations owed by such account debtors to the Loan Parties; and (g) all proceeds of any of the foregoing.
"Accrediting Organization"
means any Person from which any Borrower has received an accreditation as of the Closing Date or thereafter.
by any Person, means the acquisition by such Person, in a single transaction or in a series of related transactions, of (a) all
or substantially all of the Property of another Person, (b) all or a portion of a division or operating group of another Person,
or (c) the Capital Stock of another Person constituting all (other than directors' qualifying Capital Stock, if applicable)
or a majority of the Capital Stock of such Person, in each case whether or not involving a merger or consolidation with such other Person
and whether for cash, property, services, assumption of Indebtedness, securities or otherwise.
has the meaning specified in Section 2.15(d).
Agent" has the meaning specified in Section 11.12.
"Adjusted Term SOFR"
means, for purposes of any calculation, the rate per annum equal to (a) Term SOFR for such calculation, plus (b) the Term SOFR
Adjustment. In no event shall Adjusted Term SOFR equal less than the Floor with respect to the Initial Term Loans, the Delayed-Draw Term
Loans and the Revolving Loans.
Agent" means CIT or any successor thereof in its capacity as administrative agent under any of the Loan Documents, or any successor
administrative agent.
Agent's Bank Account" means an account maintained with the Administrative Agent.
Agent's Office" means the Administrative Agent's address and, as appropriate, account as set forth on Schedule
12.02 or such other address or account as the Administrative Agent may from time to time notify the Borrowers and the Lenders.
Questionnaire" means an Administrative Questionnaire in a form supplied by the Administrative Agent.
Institution" means (a) any EEA Financial Institution or (b) any UK Financial Institution.
means, with respect to any Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled
by or is under common Control with the Person specified.
"Agent-Related Persons"
means the Administrative Agent, together with its Affiliates, and its Approved Funds, and the officers, directors, employees, agents,
advisors, auditors and Controlling Persons and attorneys-in-fact of such Persons, Affiliates and Approved Funds, provided, however,
that no Agent-Related Person shall be deemed an Affiliate of the Borrowers or the Guarantors.
"Aggregate Payments"
has the meaning specified in Section 10.06.
means this Amended and Restated Credit and Guaranty Agreement.
means with respect to the Loans and the Letters of Credit, the following percentages per annum, based upon the Consolidated Total Net
Leverage Ratio as set forth in the most recent Compliance Certificate received by the Administrative Agent pursuant to Section 6.02(b):
Initial Term Loan Revolving Loans Delayed Draw Term Loan
Pricing Level Consolidated Total Net Leverage Ratio Letters of Credit Term SOFR Loans Base Rate Loans Term SOFR Loans Base Rate Loans Swingline Loans Term SOFR Loans Base Rate Loans
1 2.0 to 1.0 2.75% 2.75% 1.75% 2.75% 1.75% 1.75% 2.75% 1.75%
2 1.5 to 1.0 but < 2.0 to 1.0 2.50% 2.50% 1.50% 2.50% 1.50% 1.50% 2.50% 1.50%
3 1.0 to 1.0 but < 1.5 to 1.0 2.25% 2.25% 1.25% 2.25% 1.25% 1.25% 2.25% 1.25%
4 < 1.0 to 1.0 2.00% 2.00% 1.00% 2.00% 1.00% 1.00% 2.00% 1.00%
Any increase or decrease
in the Applicable Margin resulting from a change in the Consolidated Total Net Leverage Ratio shall become effective as of the first
Business Day immediately following the date a Compliance Certificate is required to be delivered to the Administrative Agent pursuant
to Section 6.02(b), provided, that if a Compliance Certificate is not delivered to the Administrative Agent when due
in accordance with such Section, then Pricing Level 1 shall apply as of the first Business Day after the date on which such a Compliance
Certificate was required to have been delivered and shall continue to apply until the first Business Day immediately following the date
a Compliance Certificate is delivered to the Administrative Agent in accordance with Section 6.02(b), whereupon the Applicable
Margin shall be adjusted based upon the calculation of the Consolidated Total Net Leverage Ratio contained in such Compliance Certificate.
Notwithstanding the foregoing, the Applicable Margin in effect from the Closing Date through the first Business Day immediately following
the date a Compliance Certificate is required to be delivered to the Administrative Agent pursuant to Section 6.02(b) for
the Fiscal Year ending September 30, 2022 (such time period the "Initial Applicable Period") shall be set at
Pricing Level 4; provided that, in the event that such Compliance Certificate demonstrates a Consolidated Total Net Leverage Ratio
that would have led to the application of a higher Applicable Margin for the Initial Applicable Period than the Applicable Margin applied
for such Applicable Period, then (i) the Applicable Margin for such Initial Applicable Period shall be the Applicable Margin corresponding
to the information disclosed on such Compliance Certificate, and (ii) the Borrowers shall immediately pay to the Administrative
Agent the accrued additional interest owing as a result of the application of such increased Applicable Margin for the Initial Applicable
Period, which payment shall be promptly applied by the Administrative Agent. Further, in the event that (a) any financial statement
delivered pursuant to Section 6.01(a) or (b) or Compliance Certificate delivered pursuant to Section 6.02(b) is
shown to be inaccurate and (b) such inaccuracy if corrected, would have led to the application of a higher Applicable Margin for
any period (an "Applicable Period") than the Applicable Margin applied for such Applicable Period, then (i) the
Borrowers shall immediately deliver to the Administrative Agent a corrected Compliance Certificate for such Applicable Period, (ii) the
Applicable Margin for such Applicable Period shall be the Applicable Margin corresponding to the information disclosed on the corrected
Compliance Certificate, and (iii) the Borrowers shall immediately pay to the Administrative Agent the accrued additional interest
owing as a result of the application of such increased Applicable Margin for such Applicable Period, which payment shall be promptly
applied by the Administrative Agent. The rights of the Administrative Agent set forth above shall survive the Termination Date and are
in addition to rights of the Administrative Agent and Lenders with respect to Sections 2.08 and 9.02 and other of their
respective rights under this Agreement.
has the meaning specified in the definition of "Applicable Margin".
has the meaning specified in the definition of "Cash Equivalents".
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Last updated: Jan 24, 2023