Exhibit 10.3
SUBSCRIPTION AGREEMENT
Dated as of June                     , 2006
          BIOSCRIP PBM SERVICES, LLC (as successor to MIM Health Plans, Inc.), a
corporation organized under the laws of the State of Delaware (together with its
successors and assigns, the “Primary Servicer”), BIOSCRIP INFUSION SERVICES,
INC., a California corporation (“Infusion Services”), BIOSCRIP PHARMACY, INC., a
Minnesota corporation (“BioScrip Pharmacy”), JPD, INC., an Ohio corporation
(“JPD”) and NATURAL LIVING, INC., a New York corporation (“Natural Living”, and
together with Infusion Services, BioScrip Pharmacy and JPD, and each of their
successors and assigns, the “New Providers”), each a wholly-owned direct or
indirect subsidiary of BioScrip, Inc. (f/ka/ MIM Corporation) (the “Parent”) and
MIM FUNDING LLC, a limited liability company organized under the laws of the
State of Delaware (together with its successors and assigns, the “Purchaser”),
agree as follows:
PRELIMINARY STATEMENTS
          Reference is hereby made to that certain Receivables Purchase and
Transfer Agreement, dated as of November 1, 2000, among BioScrip PBM Services,
Inc. (as successor by merger to MIM Health Plans, Inc.), as Primary Servicer,
and as a Provider, certain other persons party thereto as Providers
(collectively, the “ Providers”), and the Purchaser (as previously amended and
as the same may be further amended, restated, modified or supplemented from time
to time in accordance with its terms, the “RPTA”). Unless otherwise specifically
defined herein, all capitalized terms used herein shall have the respective
meanings set forth in the RPTA.
          The New Providers wish to sell and contribute to the Purchaser on a
continuing basis all of their Receivables. The Purchaser is prepared to purchase
or to accept the contribution of such Receivables on the terms and subject to
the conditions set forth in the RPTA and herein. The Purchaser, the Primary
Servicer and the Providers agree that upon the effectiveness of this
Subscription Agreement the New Providers shall become parties to the RPTA as
Providers pursuant to Section 5.18(a) of the RPTA.
          Accordingly, for valuable consideration, the receipt and adequacy of
which hereby are acknowledged, the Providers, the New Providers, the Purchaser,
and the Primary Servicer agree hereby as follows:
1. Acceptance by the Providers. Each New Provider hereby is added as a party to
the RPTA and hereby is deemed a “Provider” as such term is defined in the RPTA.
Each New Provider, by its execution and delivery of this Subscription Agreement,
agrees to be bound by all of the terms and provisions of the RPTA and of the
other Documents (as defined in the Loan Agreement) to which the Providers are
party.

 

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2. Grant of Security Interest. (a) As collateral security for the Providers’
obligations to purchase Denied Receivables under Section 4.01 of the RPTA, the
Providers’ indemnification obligations to the Purchaser under Section 4.02 of
the RPTA, and the Providers’ obligations to pay costs and expenses under
Section 5.05 of the RPTA, each New Provider hereby grants to the Purchaser a
first priority lien on and security interest in and right of set-off against,
(x) all of the Accounts now or hereafter owned or held by such New Provider,
(y) all proceeds thereof and (z) any and all cash collateral reserve accounts
established pursuant to the RPTA from time to time. Each New Provider agrees to
execute, and hereby authorizes the Purchaser to file, one or more financing
statements or continuation statements or amendments thereto or assignments
thereof in respect of the lien created hereby which may at any time be required
or, in the opinion of the Purchaser, desirable, and to do so without the
signature of such New Provider where permitted by law.
          (b) In the event that, contrary to the mutual intent of the Providers
and the Purchaser, any purchase of a Purchased Batch is not characterized as a
sale, each New Provider shall, effective as of the date hereof, be deemed to
have granted (and each New Provider hereby does grant) to the Purchaser a first
priority security interest in and to any and all of such New Provider’s Accounts
in a Purchased Batch and the proceeds thereof to secure the payment of all
amounts to be paid by the Providers under the RPTA with accrued interest
thereon, and the RPTA as amended by this Subscription Agreement shall be deemed
to be a security agreement.
3. Amendment to RPTA. Schedule I to the RPTA shall be and hereby is amended to
include the New Providers.
4. Representations and Warranties. Each of the Primary Servicer and each New
Provider hereby represents and warrants on its behalf to the Purchaser and the
Lender:

  (a)         (1)   no Group-Wide Event of Termination is existing and the
proposed Addition shall not cause, or not reasonably be expected to cause, a
Group-Wide Event of Termination;     (2)   except as expressly provided herein,
the applicable conditions precedent set forth in Exhibit II to the RPTA have
been fulfilled with respect to such Person;     (3)   except as otherwise
disclosed in public filings made by the Parent with the United States Securities
and Exchange Commission, each applicable representation and warranty set forth
in Exhibit III to the RPTA are true and correct in all material respects with
respect to each New Provider;

 

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  (b)   each New Provider has delivered, or shall promptly deliver within
25 days of the date hereof, to the Purchaser and the Lender:

  (1)   a certificate issued by the Secretary of State of the state of such New
Provider’s (i) organization as to the legal existence and good standing of such
entity and (ii) locale of operation, if different from its state of
organization, as to the foreign qualification, authorization and good standing
of such entity in such locale (all of which certificates shall be dated not more
than 20 days prior to the initial Transfer Date with respect to such New
Provider);     (2)   certified copies of the charter and by-laws or other
organizational documents of such entity, certified copies of resolutions of the
Board of Directors or similar governing body of such entity approving the
Subscription Agreement and the RPTA, certified copies of all documents filed to
register any and all assumed/trade names of such entity, and certified copies of
all documents evidencing other necessary corporate action and governmental
approvals, if any, with respect to the RPTA;     (3)   a certificate of the
Secretary or Assistant Secretary of such entity certifying the names and true
signatures of the incumbent officers of such entity authorized to sign this
Subscription Agreement and the other documents to be delivered by it under this
Subscription Agreement and the RPTA;     (4)   acknowledgment or time stamped
receipt copies of proper financing statements (showing such New Provider as
debtor/seller, the Purchaser as secured party/purchaser and Healthco-4 as
assignee, and stating that the financing statements are being filed because UCC
Section 9-109 provides that Article 9 of the UCC applies generally to sales of
accounts and chattel paper) duly filed on or before the initial Transfer Date
with respect to such entity under the UCC of all jurisdictions that the
Purchaser may deem necessary or desirable in order to perfect the ownership
interests contemplated by this Subscription Agreement and the RPTA;     (5)  
acknowledgment or time-stamped receipt copies of proper financing statements
(showing such New Provider as debtor and the Purchaser as secured party and
Healthco-4 as assignee with respect to the grant by such New Provider of a first
priority security interest to the Purchaser in the Providers’ Accounts and the
proceeds thereof, as contemplated by Section 4.04 of the RPTA) duly filed on or
before the initial Transfer Date with respect to such entity under the UCC of
all jurisdictions that the

 

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      Purchaser may deem necessary or desirable in order to perfect such
security interest;     (6)   completed requests for information (UCC search
results) dated within 20 days of the initial Transfer Date with respect to such
entity, and a schedule thereof listing all effective financing statements filed
in the jurisdictions referred to in subsections (4) and (5) above that name such
New Provider as debtor, together with copies of all other financing statements
filed against such New Provider (none of which shall cover any Accounts or any
proceeds thereof);     (7)   releases of, and acknowledgment copies of proper
termination statements (Form UCC-3), if any, necessary to evidence the release
of all security interests, ownership and other rights of any Person previously
granted by such New Provider in any of its Accounts or the proceeds thereof;    
(8)   favorable opinions of (i) counsel for such New Provider and (ii) counsel
for the Purchaser, substantially in the forms attached as Exhibits XI-B and XI-C
to the RPTA, respectively, and as to such other matters as the HFG Group
requests;     (9)   a duly executed Depositary Agreement among UMB Bank, as
Lockbox Bank and BioScrip Pharmacy and JPD as Lockbox Providers;     (10)   a
copy of each new form of invoice from the New Provider showing the appropriate
Lockbox as the remittance address;     (11)   copies of all Notices to Obligors
required pursuant to Article II of the RPTA, together with evidence satisfactory
to the Purchaser that such Notices to Obligors have been or will be delivered to
the addressees thereof;     (12)   duly executed amendment to the Guaranty by
Parent with respect to certain obligations of the New Providers under the RPTA;
    (13)   duly executed Pledge Agreement with respect to the shares of stock or
equity of certain of the Providers;     (14)   such other documents as the
Purchaser or Lender may request, including, without limitation, financial
statements;

  (c)   each New Provider is an Affiliate of the Primary Servicer;

 

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  (d)   each New Provider has become a member of the Purchaser;     (e)   the
execution, delivery and performance by it of this Subscription Agreement and the
other documents to be delivered by it thereunder, (i) are within its corporate
or limited liability company powers, (ii) have been duly authorized by all
necessary corporate or limited liability company action, (iii) do not contravene
(1) its charter or by-laws or certificate of formation or operating agreement,
as applicable, (2) any material law, rule or regulation applicable to it,
(3) any material contractual restriction binding on or affecting it or its
Property, or (4) any order, writ, judgment, award, injunction or decree binding
on or affecting it or its Property, and (iv) do not result in or require the
creation of any Lien upon or with respect to any of its Properties, other than
the interests created by this Subscription Agreement. This Subscription
Agreement has been duly executed and delivered by it;     (f)   no consent of
any other person (including, without limitation, shareholders, members or
creditors of the Primary Servicer or any Provider), and, except for financing
statements or termination statements that have been delivered to the Purchaser
for filing in accordance with Exhibit II to the RPTA, no action of, or filing
(except any financing statement or termination statement to be filed pursuant to
the RPTA) with any Governmental Entity is required to authorize, or is otherwise
required in connection with the execution, delivery and performance of this
Subscription Agreement and the RPTA; and     (g)   this Subscription Agreement
and the RPTA each constitutes the legal, valid and binding obligations of the
Primary Servicer and each New Provider enforceable against it in accordance with
its terms, except as limited by bankruptcy, insolvency, moratorium, fraudulent
conveyance or other laws relating to the enforcement of creditors’ rights
generally and general principles of equity (regardless of whether enforcement is
sought at equity or law).

5. Eligibility Criteria. The Primary Servicer and New Providers each hereby
acknowledge and agree that the Receivables of each New Provider shall not be
considered “Eligible Receivables” under the RPTA or the Loan Agreement until
such time as:

  (a)   The Master Servicer shall have delivered a certificate to the Program
Manager stating that all computer linkups and interfaces necessary or desirable,
in the sole discretion of the Master Servicer, to effectuate the transactions
and information transfers under the RPTA with respect to such New Provider are
fully operational to the satisfaction of the Master

 

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      Servicer (and the Master Servicer shall have received an interface fee for
each additional computer interface);     (b)   The Program Manager shall have
completed its due diligence with respect to such New Provider and its
Receivables and has established Eligibility Criteria and Net Value Factors (as
defined in the Loan Agreement) relating to such Receivables in consultation with
the Primary Servicer that are satisfactory to the Program Manager in its sole
discretion; and     (c)   Each of the deliverables set forth in Section 4(b)
hereto have been delivered to the Purchaser and The Lender with respect to such
New Provider.

6. Waiver. The Purchaser hereby waives the 30-days’ prior written notice
required from the Primary Servicer under Section 5.18(a) of the RPTA with
respect to the Addition of the New Providers.
7. GOVERNING LAW. THIS SUBSCRIPTION AGREEMENT SHALL, IN ACCORDANCE WITH SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK, BE GOVERNED BY
THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO ANY CONFLICT OF LAWS
PRINCIPLES THEREOF THAT WOULD CALL FOR THE APPLICATION OF THE LAWS OF ANY OTHER
JURISDICTION.
8. Execution in Counterparts; Facsimile. This Subscription Agreement may be
executed in counterparts, each of which when so executed shall be deemed to be
an original and all of which when taken together shall constitute one and the
same agreement. Delivery of an executed counterpart of a signature page by
telecopier shall be effective as delivery of a manually executed counterpart.
[Remainder of Page Intentionally Left Blank]

 

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          IN WITNESS WHEREOF, the parties hereto have caused this Subscription
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written.

                  NEW PROVIDERS:   BIOSCRIP INFUSION SERVICES, INC.    
 
               
 
      By:        
 
     
 
   
 
      Name:        
 
      Title:        
 
               
 
      Trade names:        
 
      Prior names:        
 
               
 
      Address:        320 South Flower Street  
 
                            Burbank, CA 91502  
 
      Attention:        
 
      Facsimile Number:        
 
                    BIOSCRIP PHARMACY, INC.    
 
               
 
      By:        
 
   
 
   
 
      Name:        
 
      Title:        
 
               
 
      Trade names:        
 
      Prior names:        
 
               
 
      Address:         10050 Crosstown Circle Suite 300    
 
                             Eden Prairie, MN 55344    
 
      Attention:        
 
      Facsimile Number:        

 

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                      JPD, INC.    
 
               
 
      By:        
 
     
 
   
 
      Name:
Title:        
 
               
 
      Trade names:
Prior names:        
 
               
 
      Address:        1495 Morse Road    
 
                            Columbus, OH 43229    
 
      Attention:        
 
      Facsimile Number:        
 
                    NATURAL LIVING, INC.    
 
               
 
      By:        
 
     
 
   
 
      Name:
Title:        
 
               
 
      Trade names:
Prior names:        
 
               
 
      Address:        2226 White Plains Rd    
 
                            Bronx, NY 10467    
 
      Attention:        
 
      Facsimile Number:        
 
                PRIMARY SERVICER:   BIOSCRIP PBM SERVICES, LLC (as successor to
MIM Health Plans, Inc.)    
 
               
 
      By:        
 
     
 
   
 
      Name:
Title:        
 
               
 
      Address:        100 Clearbook Road    
 
                            Elmsford, NY 10523    
 
      Attention:        
 
      Facsimile No.:        

 

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                  PURCHASER:   MIM FUNDING LLC    
 
               
 
      By:        
 
         
 
   
 
      Name:
Title:        

              CONSENTED TO:        
 
            BIOSCRIP, INC. (f/k/a MIM Corporation)    
 
           
By:
           
Name:
 
 
       
Title:
           
 
            BIOSCRIP PHARMACY (NY), INC. (f/k/a Vitality Home Infusion Services,
Inc.)    
 
           
By:
           
 
           
Name:
           
Title:
           
 
            BIOSCRIP PBM SERVICES, LLC (as successor to MIM Health Plans, Inc.)
   
 
           
By:
           
 
           
Name:
           
Title:
           
 
            BIOSCRIP PHARMACY SERVICES, INC. (f/ka/ Scrip Pharmacy, Inc.)    
 
           
By:
           
 
           
Name:
           
Title:
           

 

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              BIOSCRIP INFUSION SERVICES, LLC (f/ka/ American Disease Management
Associates, LLC)    
 
           
By:
           
Name:
 
 
       
Title:
           

              HFG HEALTHCO-4 LLC    
 
           
 
  By:   HFG Healthco-4, Inc., a member    
 
           
 
  By:        
 
           
 
  Name:        
 
  Title: