On January 20, 2022, Avanos Medical, Inc. incurred $125 million of incremental term loans (the Tranche A Term Loans") under that certain Incremental Agreement dated as of December 22, 2021 (the Incremental Agreement"), which supplemented the Company's existing senior secured credit facility (as amended by that certain First Amendment dated as of December 22, 2021 the Existing Credit Agreement"). The proceeds of the Tranche A Term Loans were used to fund a portion of the purchase price under the Merger Agreement and to pay fees and expenses relating to the Merger. The unpaid principal amount of the Tranche A Term Loans is due and payable by the Company upon its maturity on October 30, 2023.

The Company has the right to voluntarily prepay the Tranche A Term Loans from time to time in accordance with the Existing Credit Agreement. Interest on the Tranche A Term Loans is payable in accordance with the Existing Credit Agreement at the rates payable with respect to the Company's existing revolving credit facility, which bear interest, at the Company's option, at either (i) adjusted term SOFR plus a margin ranging between 1.50% to 2.25% per annum, depending on the Company's consolidated total leverage ratio or (ii) the base rate plus a margin ranging between 0.50% to 1.25% per annum, depending on the Company's consolidated total leverage ratio. The Tranche A Term Loans, together with all other obligations owing under the Existing Credit Agreement, are secured by substantially all the assets of the Company and certain of its subsidiaries located in the United States and a certain percentage of the capital stock of the Company's foreign subsidiaries.

The other terms and conditions of the Tranche A Term Loans are governed by the Existing Credit Agreement, as supplemented by the Incremental Agreement.