EXHIBIT 10.1

FIFTH AMENDMENT AND LIMITED WAIVER, dated as of August 9, 2006 (this
“Amendment”), to the Credit Agreement, dated as of March 26, 2002 (as amended by
the Amendment dated as of December 31, 2002, the Second Amendment and Waiver
dated as of June 7, 2004, the Waiver dated as of June 15, 2005, the Third
Amendment dated as of November 8, 2005, and the Fourth Amendment, dated as of
May 9, 2006, and as further amended, supplemented or modified from time to time,
the “Credit Agreement”), among ROTECH HEALTHCARE INC., a Delaware corporation
(the “Borrower”), the Lenders parties thereto, UBS SECURITIES LLC (formerly
known as UBS WARBURG LLC) and GOLDMAN SACHS CREDIT PARTNERS L.P., as joint lead
arrangers and joint bookrunners (the “Arrangers”), GOLDMAN SACHS CREDIT PARTNERS
L.P., as Syndication Agent, THE BANK OF NOVA SCOTIA, DEUTSCHE BANK SECURITIES
INC. (formerly known as Deutsche Banc Alex. Brown Inc.) and GENERAL ELECTRIC
CAPITAL CORPORATION, as Co-Documentation Agents, GENERAL ELECTRIC CAPITAL
CORPORATION, as Collateral Agent, and UBS AG, STAMFORD BRANCH, as Administrative
Agent.

W  I  T  N  E  S  S  E  T  H:

WHEREAS, the Borrower has informed the Lenders that it intends to record the
following non-cash charges as of the end of its fiscal quarter ending June 30,
2006 (collectively, the “Non-cash Charges”): (i) a charge for impairment of
goodwill that will not exceed $449,000,000, (ii) a charge relating to
professional and consulting fees attributable to a proposed transaction that
will not exceed $3,200,000 and (iii) a charge in respect of additions to its
provision for contractual adjustments related to account receivables that will
not exceed $17,500,000;

WHEREAS, as a consequence of the Non-cash Charges the Borrower will not be in
compliance with the financial condition covenants set forth in Section 7.1 of
the Credit Agreement as of June 30, 2006;

WHEREAS, the Borrower has requested that the Lenders agree to waive certain
provisions of the Credit Agreement as provided herein, and the Lenders are
agreeable to such request but only upon the terms and subject to the conditions
set forth herein.

WHEREAS, the Borrower has requested that certain provisions of the Credit
Agreement be amended upon the terms and subject to the conditions set forth
herein; and

WHEREAS, the Lenders have agreed to such amendments upon the terms and subject
to the conditions set forth herein;

NOW, THEREFORE, in consideration of the premises and mutual covenants contained
herein and in the Credit Agreement, the parties hereto hereby agree as follows:

SECTION 1. DEFINITIONS.

Unless otherwise defined herein, terms used herein and defined in the Credit
Agreement are used herein as therein defined.

SECTION 2. WAIVERS.

(a) Waiver of Section 7.1(a). The Lenders hereby waive any Default or Event of
Default arising under Section 7.1(a) of the Credit Agreement solely as a result
of the Borrower’s failure to

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be in compliance with the Consolidated Total Leverage Ratio for the period
ending on June 30, 2006; provided that the Waiver set forth in this Section 2(a)
shall expire and be of no further force or effect on September 15, 2006.

(b) Waiver of Section 7.1(b). The Lenders hereby waive any Default or Event of
Default arising under Section 7.1(b) of the Credit Agreement solely as a result
of the Borrower’s failure to be in compliance with the Consolidated Senior
Leverage Ratio for the period ending on June 30, 2006; provided that the Waiver
set forth in this Section 2(b) shall expire and be of no further force or effect
on September 15, 2006.

(c) Waiver of Section 7.1(c). The Lenders hereby waive any Default or Event of
Default arising under Section 7.1(c) of the Credit Agreement solely as a result
of the Borrower’s failure to be in compliance with the Consolidated Interest
Coverage Ratio for the period ending on June 30, 2006; provided that the Waiver
set forth in this Section 2(c) shall expire and be of no further force or effect
on September 15, 2006.

(d) Waiver of Section 7.1(d). The Lenders hereby waive any Default or Event of
Default arising under Section 7.1(d) of the Credit Agreement solely as a result
of the Borrower’s failure to be in compliance with the Consolidated Fixed Charge
Coverage Ratio for the period ending June 30, 2006; provided that the Waiver set
forth in this Section 2(d) shall expire and be of no further force or effect on
September 15, 2006.

SECTION 3. AMENDMENT.

Amendment to Section 6.2 (Certificates; Other Information). Section 6.2 of the
Credit Agreement is hereby amended by:

(i) inserting a new clause (h) at the end thereof to read as follows:

“(h) on the second Business Day of each week commencing with the week of
July 31, 2006 and through and including the week of September 25, 2006, a
projected cash flow for the period of 13 consecutive weeks commencing on the
first day of such week, in a form reasonably satisfactory to the Administrative
Agent.”;

(ii) by deleting the word “and” that appears at the end of clause (f) thereof;
and

(iii) by replacing the “.” appearing at the end of clause (g) thereof with the
following:

“; and”.

SECTION 4. OTHER AGREEMENTS.

(a) In order to induce the Lenders to consent to this Amendment, the Borrower
hereby agrees that the Administrative Agent shall have the right to engage, at
the expense of the Borrower, a third party satisfactory to the Administrative
Agent to conduct a field exam of the books and records of the Borrower and its
subsidiaries, to include without limitation, accounts, inventory and payables
and supporting documentation in respect thereof of the Borrower and its
subsidiaries, and an audit of the liquidity requirements of the Borrower and its
subsidiaries. The Borrower further agrees to cooperate, and to cause its
Subsidiaries to cooperate, with such third party audit and field exam and to pay
or to reimburse the Administrative Agent promptly for the reasonable costs and
expenses of such audit and

 

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field exam. The Borrower further agrees that any breach of this provision shall
constitute an Event of Default under Section 8(c) of the Credit Agreement.

(b) For the avoidance of doubt the Borrower acknowledges and agrees that the
waivers set forth in Section 2 of this Amendment shall be effective only if the
amount of the Non-cash Charges described in the first Whereas clause above does
not exceed for each item, the amount set forth for such item.

SECTION 5. MISCELLANEOUS.

5.1 Conditions to Effectiveness. This Amendment shall become effective on the
date (the “Amendment Effective Date”) on which the following conditions are
satisfied (or waived): (a) the Administrative Agent shall have received (i) an
executed counterpart of this Amendment duly executed and delivered by the
Borrower and each of the Required Lenders and (ii) an Acknowledgement and
Consent in the form attached hereto as Exhibit A duly executed and delivered by
each Guarantor and (b) the Administrative Agent and the Lenders shall have
received all fees and expenses required to be paid as of the Amendment Effective
Date.

5.2 Representations and Warranties. On the Amendment Effective Date and after
giving effect to the amendments contained herein, the Borrower hereby confirms,
reaffirms and restates the representations and warranties made by it in
Section 4 of the Credit Agreement, except to the extent any of such
representations and warranties relate to a specific earlier date, in which case
such representations and warranties shall be deemed true and correct on and as
of such earlier date; provided, that each reference therein to the Credit
Agreement shall be deemed to be a reference to the Credit Agreement after giving
effect to this Amendment.

5.3 Payment of Fees and Expenses. (a) The Borrower agrees to pay or reimburse
the Administrative Agent for all of its reasonable out-of-pocket costs and
expenses incurred in connection with this Amendment, any other documents
prepared in connection herewith and the transactions contemplated hereby,
including, without limitation, the reasonable fees and disbursements of counsel
to the Administrative Agent.

(b) The Borrower agrees to pay on the Amendment Effective Date an amendment fee
payable to every Lender that executes this Amendment on or prior to the
Amendment Effective Date in an aggregate amount equal to 0.10% of the sum of the
Revolving Credit Commitments and Term Loans of such Lender, provided that this
Amendment becomes effective.

5.4 Continuing Effect. Except as expressly provided hereby, all of the terms and
provisions of the Credit Agreement and the other Loan Documents are and shall
remain in full force and effect. The amendments contained herein shall not be
construed as a waiver of any other provision of the Credit Agreement or the
other Loan Documents or for any purpose except as expressly set forth herein or
a consent to any further or future action on the part of the Borrower that would
require the waiver or consent of the Administrative Agent or the Lenders.

5.5 Counterparts. This Amendment may be executed by one or more of the parties
hereto in any number of separate counterparts and all of said counterparts taken
together shall be deemed to constitute one and the same instrument. Any executed
counterpart delivered by facsimile transmission shall be effective as for all
purposes hereof.

5.6 GOVERNING LAW. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HERETO SHALL BE GOVERNED BY, AND

 

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CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed and delivered by their respective proper and duly authorized officers
as of the day and year first above written.

 

ROTECH HEALTHCARE INC. By:        Name:   Title:

 

 

 

 

UBS AG, STAMFORD BRANCH, as Administrative Agent and a Lender By:        Name:  
Title: By:        Name:   Title:

 

 

 

 

   [LENDER] By:        Name:   Title:

 

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