Exhibit 10.2


 





FOURTH
AMENDMENT TO AMENDED AND RESTATED

CREDIT AGREEMENT


 


THIS FOURTH AMENDMENT
TO AMENDED AND RESTATED CREDIT AGREEMENT (this “Amendment”), dated as of May 14, 2020, is entered into by and
among PETIQ, LLC, an Idaho limited liability company (“PetIQ”), the other Credit Parties signatory hereto (collectively
with PETIQ, the “Borrowers”), the LENDERS signatory hereto, and EAST WEST BANK, a California banking corporation,
as Administrative Agent for the Lenders (in such capacity, “Administrative Agent”), with reference to the following
facts:


 


RECITALS 


 


A.       The
Borrowers, the Lenders, and Administrative Agent are parties to an Amended and Restated Credit Agreement dated as of January 17,
2018, as amended by the First Amendment to Amended and Restated Credit Agreement and Joinder dated as of August 9, 2018, the
Second Amendment to Amended and Restated Credit Agreement dated as of March 25, 2019, and the Third Amendment to Amended and Restated
Credit Agreement dated as of July 8, 2019, and as supplemented by the Consent Agreement dated as of October 17, 2018, the
Joinder No. 1 to Amended and Restated Credit Agreement dated as of December 10, 2018, the consent letter dated May 7,
2019 from Administrative Agent to Borrower Representative, and the Joinder No. 2 to Amended and Restated Credit Agreement dated
as of July 23, 2019 (collectively, the “Credit Agreement”) and certain other related Loan Documents, pursuant
to which the Lenders provide the Borrowers a revolving credit facility with sub-facilities for letters of credit and swing line
loans.


 


B.       The
parties hereto desire to amend the Credit Agreement as set forth below.


 


NOW, THEREFORE, the
parties hereby agree as follows:


 


1.                 
Defined Terms. All initially capitalized terms used in this Amendment (including in the recitals hereto) without
definition shall have the respective meanings set forth for such terms in the Credit Agreement.


 


2.                 
Addition of Definitions Relating to Convertible Notes Offering.





 


(a)       Addition of Definition of Convertible Notes. Section 1.01 is hereby amended and supplemented by adding
therein a definition of “Convertible Notes” as follows:


 


“Convertible Notes” means senior unsecured convertible notes issued by PetIQ, Inc. due June 1, 2026 in an
aggregate principal amount of up to $125,000,000, subject to increase by an additional aggregate principal amount of up to $18,750,000.


 


(b)      [Reserved].



 


 






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(c)         Addition
of Definition of 2020 Intercompany Note. Section 1.01 of the Credit Agreement is hereby further amended and supplemented
by adding therein a definition of “2020 Intercompany Note” as follows:


 


“2020 Intercompany Note” means that certain Intercompany Note, issued
substantially concurrently with the Convertible Notes, by Parent to PetIQ, Inc.


 


3.               
Amendment of Definition of Available Amount. Section 1.01 of the Credit Agreement is hereby amended by amending
and restating the definition of “Available Rate” so that it reads in full as follows (changes to text are indicated,
in the case of deletions, with a strikethrough or, in the case of additions, in bold, italicized and underscored
type):


 


                  “Available Amount” means, as of any date of determination, an amount, not less than zero in the aggregate,
determined on a cumulative basis equal to, without duplication:


 


                  (a)       an amount equal to $5,000,000; plus


 


                  (b)
      the Cumulative Retained Excess Cash Flow Amount; plus


 


                  (c)        the
cumulative amount of Net Issuance Proceeds Not Otherwise Applied from issuances of Qualified Capital Stock received by PETIQ after
the Amendment Effective Date and prior to such date (other than any Net Issuance Proceeds in respect of Qualified Capital
Stock issued in respect of the 2020 Convertible Senior Notes); plus


 


                 (d)         (i)
the aggregate amount of proceeds received by PETIQ in cash or Cash Equivalents after the Amendment Effective Date from the sale
or other disposition of any Investment to the extent not required to be (A) used to prepay the Obligations (as defined in the
Term Credit Agreement) or (B) reinvested, plus (ii) returns, profits, distributions and similar amounts received in cash or Cash
Equivalents after the Amendment Effective Date to the extent not included or includable in Consolidated EBITDA or the Cumulative
Retained Excess Cash Flow Amount, in each instance in (i) and (ii), on or in respect of Investments to the extent such Investment
was originally funded with and in reliance on the Available Amount (but, in the aggregate for clauses (i) and (ii),
not in excess of the original amount of the Available Amount used to fund such Investment); minus


 


                  (e)       any amount of the
Available Amount used to make Investments pursuant to Section 7.01(j) after the Amendment Effective Date and prior to such time;
minus


 


                   (f)       any amount of the Available Amount use to make Restricted Payments pursuant to Section 7.04(a)(viii)
after the Amendment Effective Date and prior to such time; minus


 


                  (g)       any amount of the Available
Amount used to prepay Junior Indebtedness pursuant to Section 7.04(b)(v) after the Amendment Effective Date and prior to such
time.


 


4.                 
Addition of Eurodollar Rate “Floor”. Section 1.01 of the Credit Agreement is hereby amended
by amending and restating the definition of “Eurodollar Rate” so that it reads in full as follows (changes to text
are indicated, in the case of deletions, with a strikethrough or, in the case of additions, in bold, italicized
and underscored type):



 



 






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“Eurodollar
Rate” means, for any Interest Period with respect to any Eurodollar Rate Loan, the rate per annum determined by the Administrative
Agent to be the rate for deposits in Dollars for a period approximately equal to such Interest Period and in an amount approximately
equal to the principal amount of such Eurodollar Rate Loan which appears on the Bloomberg Screen TMM Page under the heading “LIBOR
Fix” as of 11:00 a.m. (London time) on the second Business Day prior to the first day of such Interest Period (adjusted for
any and all assessments, surcharges and reserve requirements); provided, however, if the Eurodollar Rate
determined as provided above would be less than zero, then the Eurodollar Rate shall be deemed to be zero for the purposes of this
Agreement in no event shall the Eurodollar Rate be less than 0.50% per annum. If such interest rate
shall cease to be available from the above-described Bloomberg report, the Eurodollar Rate shall be determined from such financial
reporting service as the Administrative Agent shall reasonably determine and use with respect to its other loan facilities for
which interest is determined based on the London interbank offered rate.


 


5.                 
Amendment of Indebtedness Negative Covenant to Permit 2020 Intercompany Note. Section 7.02 of the Credit Agreement
is hereby amended by (i) deleting the word “and” from the end of subsection (n), (ii) re-labelling current subsection
(o) so that it becomes new subsection (p), and (iii) adding therein a replacement subsection (o) which shall
read in full as follows:


 


                 “(o)      Indebtedness of Parent pursuant to the 2020 Intercompany Note; and””


 


6.                 
Other Matters Relating to Convertible Notes.


 


                    (a)      No Restrictions on Payments by PetIQ, Inc. Administrative Agent and the Lenders hereby acknowledge and confirm
that PetIQ, Inc. is not a Credit Party and that, accordingly, nothing contained in Section 7.04 of the Credit Agreement,
in any other provision of the Credit Agreement, or in any provision of any other Loan Document, shall prohibit, restrict or otherwise
impair PetIQ, Inc. from making any payment of interest or principal on the Convertible Notes when due.


 


                    (b)     Restrictions on PETIQ Dividends, Distributions or Direct Payments of Interest on Convertible Notes. The Credit
Parties hereby agree that notwithstanding anything to the contrary set forth in Section 7.04 of the Credit Agreement, in
any other provision of the Credit Agreement, or in any provision of any other Loan Document, PETIQ may not (i) make any dividends
or distributions to Parent to facilitate Parent’s direct payment of semi-annual interest payments on the 2020 Intercompany
Note when due or (ii) make direct payment of such interest payments unless either: (A) Overall Excess Availability is at least
$22,000,000 for both the period of three (3) consecutive Business Days prior to the date of any such dividend, distribution or
direct payment and after giving pro forma effect to any such dividend, distribution or direct payment; or (B) the Consolidated
Fixed Charge Coverage Ratio, determined as of the last day of the Fiscal Quarter ended immediately prior to the date of any such
dividend, distribution or direct payment is at least 1.10 to 1.00.


 


                   (c)      No Prepayment of 2020 Intercompany Note. Except for the payment of semi-annual interest payments in accordance
with Section 6(b) of this Amendment, Parent shall not make, PETIQ shall not make any distribution or dividend to Parent to enable
Parent to make, nor shall PETIQ make directly, any payment of interest or principal on the 2020 Intercompany Note without the
prior written consent of the Required Lenders.


 






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7.                
Conditions Precedent. The effectiveness of this Amendment shall be subject to the satisfaction of each of the following
conditions:


 


                    (a)     This Amendment. Administrative Agent shall have received this Amendment, duly executed by the Borrowers, the
Required Lenders, and Administrative Agent;


 


                   (b)      Amendment to Term Credit Agreement. Administrative Agent shall have received a copy of a fully executed amendment
to the Term Credit Agreement, in form and substance reasonably satisfactory to the Required Lenders; and


 


                   (c)      Fee. Administrative Agent shall have received payment of the fee set forth in a separate letter agreement between
Administrative Agent and the Borrowers dated as of the date hereof.


 


8.                 
General Amendment Provisions.


 


A.               
The Credit Agreement, as amended hereby, shall be and remain in full force and effect in accordance with its terms,
and the Borrowers hereby ratify and confirm the Credit Agreement in all respects. Except as expressly set forth herein, the execution,
delivery, and performance of this Amendment shall not operate as a waiver of, an amendment to, or a consent to a deviation from,
any right, power, or remedy of Administrative Agent or the Lenders under the Credit Agreement or any other Loan Document, as in
effect prior to the date hereof.


 


B.                
The Borrowers represent and warrant to Administrative Agent and the Lenders that the representations and warranties
contained in the Credit Agreement are true and correct in all material respects as of the date of this Amendment (except for representations
and warranties that expressly relate to an earlier date, which are true and correct in all material respects as of such earlier
date) and that no Event of Default has occurred and is continuing.


 


C.                
This Amendment constitutes the entire agreement of the parties in connection with the subject matter hereof and cannot
be changed or terminated orally. All prior agreements, understandings, representations, warranties and negotiations regarding the
subject matter hereof, if any, are merged into this Amendment.


 


D.               
This Amendment may be executed in two or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one instrument. In the event that any signature is delivered by facsimile transmission or by e-mail
delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing
this Amendment (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf”
signature page were an original hereof.


 






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E.                
This Amendment shall be governed by, and construed and enforced in accordance with, the internal laws (as opposed
to the conflicts of law principles) of the State of New York.


 


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blank; signature pages follow]


  






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IN WITNESS WHEREOF,
the undersigned have executed this Amendment by their respective duly authorized officers as of the date first above written.


	 	 
	 	The Borrowers:
	 	 
	 	PETIQ, LLC,
	 	an Idaho limited liability company
	 	 
	 	By	 /s/ McCord Christensen
	 	Name:  	   McCord Christensen
	 	Title:	   Chief Executive Officer
	 	 
	 	TRUE SCIENCE HOLDINGS, LLC,
	 	a Florida limited liability company
	 	 
	 	By	/s/ McCord Christensen
	 	Name:	   McCord Christensen
	 	Title:	   Chief Executive Officer
	 	 
	 	TRURX LLC,
	 	an Idaho limited liability company
	 	 
	 	By	 /s/ McCord Christensen
	 	Name:	   McCord Christensen
	 	Title:	   Chief Executive Officer
	 	 
	 	TRU PRODIGY, LLC,
	 	a Texas limited liability company
	 	 
	 	By	 /s/ McCord Christensen
	 	Name:	   McCord Christensen
	 	Title:	   Chief Executive Officer
	 	 




 





Fourth Amendment to Amended and Restated
Credit Agreement







 






    


     


    

	 	 
	 	 
	 	COMMUNITY VETERINARY CLINICS, LLC,
	 	a Delaware limited liability company
	 	 
	 	By	 /s/ McCord Christensen
	 	Name:	   McCord Christensen
	 	Title:	   Chief Executive Officer
	 	 
	 	PET SERVICES OPERATING, LLC,
	 	a Delaware limited liability company
	 	 
	 	By	 /s/ McCord Christensen
	 	Name:	   McCord Christensen
	 	Title:	   Chief Executive Officer
	 	 
	 	PAWSPLUS MANAGEMENT, LLC,
	 	a Delaware limited liability company
	 	 
	 	By	 /s/ McCord Christensen
	 	Name:	    McCord Christensen
	 	Title:	    Chief Executive Officer
	 	 
	 	VIP PETCARE, LLC,
	 	a Delaware limited liability company
	 	 
	 	By	 /s/ McCord Christensen
	 	Name:	   McCord Christensen
	 	Title:	   Chief Executive Officer
	 	 
	 	COMMUNITY CLINICS, INC.,
	 	a California corporation
	 	 
	 	By	 /s/ McCord Christensen
	 	Name:	   McCord Christensen
	 	Title:	   Chief Executive Officer




 





Fourth Amendment to Amended and Restated
Credit Agreement







  



    


     


    





	 	 
	 	HBH ENTERPRISES LLC,
	 	a Utah limited liability company
	 	 
	 	By:	PETIQ, LLC
	 	Its:	Sole Member
	 	 
	 	 	By	  /s/
    McCord Christensen
	 	 	Name:	McCord
    Christensen
	 	 	Title:	Chief Executive
    Officer
	 	  



 


Fourth Amendment to Amended and Restated
Credit Agreement


 






     


     


    

 


	 	 
	 	The Agent, L/C Issuer
    and Swingline Lender:
	 	 
	 	EAST WEST BANK,
	 	as Administrative Agent, LC/Issuer
    and
 Swingline Lender
	 	 
	 	By:	  /s
    John Kolb
	 	 	John Kolb
	 	 	Vice President



 


Fourth Amendment to Amended and Restated Credit Agreement 


 






     


     


    

 


	 	The Syndication Agent:
	 	 
	 	KEYBANK NATIONAL ASSOCIATION,
	 	as Syndication Agent
	 	 
	 	By	Anthony Alexander
	 	Name:   	Anthony Alexander
	 	Title:	Vice President



 


Fourth Amendment to Amended and Restated Credit Agreement


 






     


     


    

 



 


	 	 
	 	The Lenders:
	 	 
	 	EAST WEST BANK,
	 	as a Lender
	 	 
	 	By: 	 /s/ David A. Lehner
	 	     David A. Lehner

                                                                          Senior Vice President





 





Fourth Amendment to Amended and Restated
Credit Agreement







 






    


     


    

 


	 	 
	 	KEYBANK NATIONAL ASSOCIATION,
 as
    a Lender
	 	 
	 	By	Anthony Alexander
	 	Name:	    Anthony Alexander
	 	Title:	    Vice President




 





Fourth Amendment to Amended and Restated
Credit Agreement