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[EXECUTION COPY]
Bank of America, N.A.
100 Federal Street
Boston, Massachusetts  02110

July 8, 2009
 
BioScrip, Inc.
10050 Crosstown Circle
Eden Prairie, Minnesota  55344
Attn:  Stanley G. Rosenbaum

Re:           Letter of Credit Facility
 
Ladies and Gentlemen:
 
BANK OF AMERICA, N.A. (the “Lender”) is pleased to make available to BIOSCRIP,
INC., a Delaware corporation (the “Borrower”), a letter of credit facility on
the terms and subject to the conditions set forth below.  Capitalized terms not
defined herein have the meanings assigned to them in Exhibit A attached to this
letter agreement (this “Agreement”).
 
1.           The Facility.
 
(a)           The Letter of Credit Commitment.
 
(i)           Subject to the satisfaction of the requirements of subsection (g)
below and the other terms and conditions set forth herein, the Lender agrees (A)
from time to time on any Business Day during the period from July 8, 2009 until
the Commitment Termination Date, to issue Letters of Credit for the account of
the Borrower and its Subsidiaries, and to amend or renew Letters of Credit
previously issued by it, in accordance with subsection (b) below, and (B) to
honor drafts under Letters of Credit; provided that the Lender shall not be
obligated to make any L/C Credit Extension with respect to any Letter of Credit
if as of the date of such L/C Credit Extension (after giving effect to any
requested L/C Credit Extension), (x) the aggregate undrawn amount of all
outstanding Letters of Credit plus the aggregate of all unreimbursed drawings
under all Letters of Credit would exceed the Commitment or (z) the aggregate
undrawn amount of all outstanding Letters of Credit plus the aggregate of all
unreimbursed drawings under all Letters of Credit would exceed the amount of
Pledged Collateral maintained in the Cash Collateral Account (as defined in the
Cash Collateral Agreement).  Within the foregoing limits, and subject to the
terms and conditions hereof, the Borrower’s ability to obtain Letters of Credit
shall be fully revolving, and accordingly the Borrower may, during the foregoing
period, obtain Letters of Credit to replace Letters of Credit that have expired
or that have been drawn upon and reimbursed.
 
(ii)           The Lender shall be under no obligation to issue any Letter of
Credit if:
 
(A)           any order, judgment or decree of any governmental authority or
arbitrator shall by its terms purport to enjoin or restrain the Lender from
issuing such Letter of Credit, or any law applicable to the Lender or any
request or directive (whether or not having the force of law) from any
governmental authority with jurisdiction over the Lender shall prohibit, or
request that the
 

 
 

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BioScrip, Inc.
July 8, 2009
Page 2

Lender refrain from, the issuance of letters of credit generally or such Letter
of Credit in particular or shall impose upon the Lender with respect to such
Letter of Credit any restriction, reserve or capital requirement (for which the
Lender is not otherwise compensated) not in effect on the date hereof, or shall
impose upon the Lender any unreimbursed loss, cost or expense which was not
applicable on the date hereof and which the Lender in good faith deems material
to it;
 
(B)           subject to Section 1(b)(iii), the expiry date of such requested
Letter of Credit would occur more than 364 days after the Commitment Termination
Date; provided, that the issuance of any such Letter of Credit with an expiry
date that would occur more than twelve months after the date of issuance or last
renewal shall be subject to the approval of the Lender; provided, further, that
the Lender shall be under no obligation to issue any Letter of Credit if the
expiry date of such requested Letter of Credit would occur more than three years
after the date of issuance; or
 
(C)           the issuance of such Letter of Credit would violate one or more
policies of the Lender.
 
(iii)           The Lender shall be under no obligation to amend any Letter of
Credit if (A) the Lender would have no obligation at such time to issue such
Letter of Credit in its amended form under the terms hereof, or (B) the
beneficiary of such Letter of Credit does not accept the proposed amendment to
such Letter of Credit.
 
(b)           Procedures for Issuance and Amendment of Letters of Credit;
Auto-Renewal Letters of Credit.
 
(i)           Each Letter of Credit shall be issued or amended, as the case may
be, upon the request of the Borrower delivered to the Lender in the form of a
Letter of Credit Application in substantially the form attached hereto as
Exhibit B hereto (an “L/C Application”), appropriately completed and signed by
an authorized officer of the Borrower.  Such L/C Application must be received by
the Lender not later than 1:00 p.m. (Boston, Massachusetts time), at least five
Business Days (or such sooner date and time as the Lender may agree in a
particular instance in its sole discretion) prior to the proposed issuance date
or date of amendment, as the case may be.  In the case of a request for an
initial issuance of a Letter of Credit, such L/C Application shall specify in
form and detail satisfactory to the Lender: (A) the proposed issuance date of
the requested Letter of Credit (which shall be a Business Day); (B) the amount
thereof; (C) the expiry date thereof; (D) the name and address of the
beneficiary thereof; (E) the documents to be presented by such beneficiary in
case of any drawing thereunder; (F) the full text of any certificate to be
presented by such beneficiary in case of any drawing thereunder; and (G) such
other matters as the Lender may require.  In the case of a request for an
amendment of any outstanding Letter of Credit, such L/C Application shall
specify in form and detail satisfactory to the Lender (A) the Letter of Credit
to be amended; (B) the proposed date of amendment thereof (which shall be a
Business Day);
 

 
 

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BioScrip, Inc.
July 8, 2009
Page 3

(C) the nature of the proposed amendment; and (D) such other matters as the
Lender may require.
 
(ii)           Upon the Lender’s determination that the requested issuance or
amendment is permitted in accordance with the terms hereof, then, subject to
satisfaction of the requirements set forth in subsection (g) below and the other
applicable terms and conditions hereof, the Lender shall, on the requested date,
issue a Letter of Credit for the account of the Borrower or enter into the
applicable amendment, as the case may be, in each case in accordance with the
Lender's usual and customary business practices.
 
(iii)           If the Borrower so requests in any applicable L/C Application,
the Lender may, in its sole and absolute discretion, agree to issue a Letter of
Credit that has automatic renewal provisions (each, an “Auto-Renewal Letter of
Credit”); provided that any such Auto-Renewal Letter of Credit must permit (but
not require) the Lender to prevent any such renewal at least once in each
twelve-month period (commencing with the date of issuance of such Letter of
Credit) by giving prior notice to the beneficiary thereof not later than a day
in each such twelve-month period to be agreed upon by Lender and Borrower at the
time such Letter of Credit is issued and which date shall be set forth in the
Letter of Credit.  Unless otherwise directed by the Lender, the Borrower shall
not be required to make a specific request to the Lender for any such
renewal.  Once an Auto-Renewal Letter of Credit has been issued, the Lender
shall, subject to the terms and conditions set forth herein, permit the renewal
of such Letter of Credit to an expiry date not later than twelve months after
the date of such renewal; provided, however, that the Lender shall have no
obligation to permit the renewal of any Auto-Renewal Letter of Credit at any
time if it has determined that it would have no obligation at such time to issue
such Letter of Credit in its renewed form under the terms hereof (by reason of
the provisions of Section 1(a)(ii) or otherwise).
 
(iv)           Promptly after its delivery of any Letter of Credit or any
amendment to a Letter of Credit to an advising bank with respect thereto or to
the beneficiary thereof, the Lender will also deliver to the Borrower a true and
complete copy of such Letter of Credit or amendment.
 
(c)           Drawings and Reimbursements.  Upon receipt from the beneficiary of
any Letter of Credit of any notice of a drawing under such Letter of Credit, the
Lender shall notify the Borrower thereof.  Not later than 1:00 p.m. on the date
of any payment by the Lender under a Letter of Credit (each such date, an “Honor
Date”), the Borrower shall reimburse the Lender in an amount equal to the amount
of such drawing at the Lender’s office in Boston, Massachusetts in immediately
available funds.  If the Borrower fails to so reimburse the Lender, the Lender
shall be entitled to, without notice to or demand upon the Borrower, debit the
Cash Collateral Account in an amount equal to the amount of such unreimbursed
drawing.
 
(d)           Obligations Absolute.  The obligation of the Borrower to reimburse
the Lender for each drawing under each Letter of Credit shall be absolute,
unconditional and irrevocable, and shall be paid strictly in accordance with the
terms of this Agreement under all circumstances, including the following:
 

 
 

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BioScrip, Inc.
July 8, 2009
Page 4

(i)           any lack of validity or enforceability of such Letter of Credit,
this Agreement, or any other agreement or instrument relating thereto;
 
(ii)           the existence of any claim, counterclaim, set-off, defense or
other right that the Borrower or any of its Subsidiaries may have at any time
against any beneficiary or any transferee of such Letter of Credit (or any
Person for whom any such beneficiary or any such transferee may be acting), the
Lender or any other Person, whether in connection with this Agreement, the
transactions contemplated hereby or by such Letter of Credit or any agreement or
instrument relating thereto, or any unrelated transaction;
 
(iii)           any draft, demand, certificate or other document presented under
such Letter of Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect; or any loss or delay in the transmission or otherwise of any document
required in order to make a drawing under such Letter of Credit;
 
(iv)           any payment by the Lender under such Letter of Credit against
presentation of a draft or certificate that does not strictly comply with the
terms of such Letter of Credit; or any payment made by the Lender under such
Letter of Credit to any Person purporting to be a trustee in bankruptcy,
debtor-in-possession, assignee for the benefit of creditors, liquidator,
receiver or other representative of or successor to any beneficiary or any
transferee of such Letter of Credit, including any arising in connection with
any proceeding under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors; or
 
(v)           any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing, including any other circumstance that might
otherwise constitute a defense available to, or a discharge of, the Borrower or
any of its Subsidiaries.
 
The Borrower shall promptly examine a copy of each Letter of Credit and each
amendment thereto that is delivered to it and, in the event of any claim of
noncompliance with the Borrower’s instructions or other irregularity, the
Borrower will promptly, but in any event within one (1) Business Day thereof,
notify the Lender.  The Borrower shall be conclusively deemed to have waived any
such claim against the Lender and its correspondents unless such notice is given
as aforesaid.
 
(e)           Role of Lender.  The Borrower agrees that, in paying any drawing
under a Letter of Credit, the Lender shall not have any responsibility to obtain
any document (other than any sight draft, certificates and other documents, if
any, expressly required by the Letter of Credit) or to ascertain or inquire as
to the validity or accuracy of any such document or the authority of the Person
executing or delivering any such document.  The Borrower hereby assumes all
risks of the acts or omissions of any beneficiary or transferee with respect to
its use of any Letter of Credit; provided, however, that this assumption is not
intended to, and shall not, preclude the Borrower from pursuing such rights and
remedies as it may have against the beneficiary or transferee at law or under
any other agreement.  None of the Lender, any of its affiliates, any of the
respective officers, directors, employees, agents or attorneys-in-fact of the
Lender and its affiliates, nor any of the respective correspondents,
participants or assignees of the Lender shall be liable or responsible for any
of the matters described in clauses (i)
 

 
 
 

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BioScrip, Inc.
July 8, 2009
Page 5

through (v) of Section 1(d); provided, however, that anything in such clauses to
the contrary notwithstanding, the Borrower may have a claim against the Lender,
and the Lender may be liable to the Borrower, to the extent, but only to the
extent, of any direct, as opposed to consequential or exemplary, damages
suffered by the Borrower which the Borrower proves were caused by the Lender's
willful misconduct or gross negligence or the Lender's willful failure to pay
under any Letter of Credit after the presentation to it by the beneficiary of a
sight draft, certificate(s) and other document(s), if any, strictly complying
with the terms and conditions of a Letter of Credit.  In furtherance and not in
limitation of the foregoing, the Lender may accept documents that appear on
their face to be in order, without responsibility for further investigation,
regardless of any notice or information to the contrary, and the Lender shall
not be responsible for the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign a Letter of Credit
or the rights or benefits thereunder or proceeds thereof, in whole or in part,
which may prove to be invalid or ineffective for any reason.
 
(f)           Letter of Credit Fees.
 
(i)           The Borrower shall pay to the Lender an annual Letter of Credit
fee for each Letter of Credit equal to two percent (2.00%) times the daily
maximum amount available to be drawn under such Letter of Credit (whether or not
such maximum amount is then in effect under such Letter of Credit).  Such letter
of credit fee shall be due and payable annually in advance on the date of the
applicable L/C Credit Extension and on each anniversary thereof.
 
(ii)           The Borrower shall pay to the Lender a commitment fee equal to
one half of one percent (0.50%) times the actual daily amount by which the
Commitment exceeds the aggregate maximum amount available to be drawn under all
Letters of Credit.  The commitment fee shall accrue at all times during the term
of this Agreement, and shall be due and payable quarterly in arrears on the last
Business Day of each March, June, September and December, commencing with the
first such date to occur after the date hereof, and on the Commitment
Termination Date.
 
The foregoing fees shall be fully earned when paid and shall not be refundable
for any reason whatsoever.
 
(g)           Cash Collateral.
 
(i)           As a condition to the issuance of any Letter of Credit or any
amendment to any Letter of Credit which shall increase the maximum amount
available to be drawn under such Letter of Credit, the Borrower shall, prior to
the issuance or amendment thereof, deposit in the Cash Collateral Account, cash
balances in an amount equal to the maximum amount available to be drawn under
such Letter of Credit (in addition to the aggregate amount of cash collateral,
if any, required pursuant to clause (ii) below).
 

 
 
 

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BioScrip, Inc.
July 8, 2009
Page 6

(ii)           The Borrower hereby covenants and agrees that the Pledged
Collateral shall at all times be equal to or greater than the sum of the
aggregate undrawn amount of all outstanding Letters of Credit plus the aggregate
amount of all unreimbursed drawings under all Letters of Credit.  If at any time
the aggregate amount of Pledged Collateral in the Cash Collateral Account is
less than the sum of the aggregate undrawn amount of all outstanding Letters of
Credit plus the aggregate of all unreimbursed drawings under all Letters of
Credit, then the Borrower shall immediately deposit in the Cash Collateral
Account such additional cash collateral as may be necessary to meet any
shortfall in the Pledged Collateral.  Failure to do so immediately shall
constitute an immediate and automatic Event of Default under the terms and
conditions of this Agreement.
 
(h)           Documentary and Processing Charges Payable to Lender.  The
Borrower shall pay to the Lender the customary issuance, presentation, amendment
and other processing fees, and other standard costs and charges, of the Lender
relating to letters of credit as from time to time in effect.  Such customary
fees and standard costs and charges are due and payable on demand and are
nonrefundable.
 
(i)           Letters of Credit Issued for Subsidiaries.  Notwithstanding that a
Letter of Credit issued or outstanding hereunder is in support of any
obligations of, or is for the account of, a Subsidiary of the Borrower, the
Borrower shall be named as an account party in such Letter of Credit and shall
be obligated to reimburse the Lender hereunder for any and all drawings under
such Letter of Credit and all fees and any other costs and expenses associated
therewith.  The Borrower hereby acknowledges that the issuance of Letters of
Credit for the account of its Subsidiaries inures to the benefit of the
Borrower, and that the Borrower’s business derives substantial benefits from the
businesses of such Subsidiaries.
 
(j)           Letter of Credit Amounts.  All references herein to the amount of
a Letter of Credit at any time shall be deemed to mean the maximum face amount
of such Letter of Credit after giving effect to all increases thereof
contemplated by such Letter of Credit or the Letter of Credit Application
therefor, whether or not such maximum face amount is in effect at such time.
 
(k)           Conflict with L/C Application.  The Borrower hereby agrees that
the terms and conditions set forth in the each L/C Application are in addition
to, not in derogation of, the terms and conditions set forth in this
Agreement.  In the event of any direct conflict between the terms hereof and the
terms of any L/C Application, the terms hereof, to the extent of any such
conflict, shall control.
 
2.           Conditions to Effectiveness.  The effectiveness of this Agreements
shall be subject to the satisfaction on or before the date hereof of each of the
following conditions precedent:
 
(a)           Delivery.  The Lender shall have received all of the following, in
form and substance reasonably satisfactory to Lender:
 
(i)           a fully-executed and effective Agreement by the Borrower and the
Lender;
 
(ii)           a fully-executed and effective copy of each other Loan Document,
duly executed by the parties thereto;
 

 
 

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July 8, 2009
Page 7

(iii)           a secretary’s certificate of the Borrower, attaching and
certifying as to such its constitutive, organizational or governing documents
and the resolutions adopted by the Board of Directors of the Borrower (which
resolutions shall be in form and substance reasonably satisfactory to the
Lender) approving the Loan Documents to which the Borrower is a party, the
incumbency and signatures of the officers executing any documents or instruments
in connection with the Loan Documents to which the Borrower is a party and as to
all other corporate proceedings relating to the authorization, execution,
delivery and performance of the Loan Documents to which the Borrower is a party;
and
 
(iv)           such other assurances, certificates, documents, consents or
opinions as the Lender reasonably may require.
 
(b)           Fees and Expenses.  The Borrower shall have paid to the Lender all
fees (including without limitation the Upfront Fee referred to below) and
expenses (including, without limitation, the reasonable attorneys' fees of
outside counsel to the Lender) incurred by the Lender in connection with this
Agreement, the other Loan Documents and all other documents which may be
executed and or delivered in connection the foregoing on or prior to the date
hereof.
 
(c)           Upfront Fee.  The Borrowers shall have paid to the Lender a fee in
an amount equal to $25,000 (the “Upfront Fee”), which Upfront Fee shall be fully
earned, payable in cash on the effective date of this Agreement, and shall be
non-refundable.
 
3.
Events of Default.  The following are “Events of Default:”

 
(a)           The Borrower fails to pay any Letter of Credit fee, any commitment
fee, or any charges, fees or expenses of the Lender due hereunder within five
days after the date when due; or
 
(b)           The Lender’s security interest in any Pledged Collateral shall
cease to be a first priority perfected security interest; or this Agreement or
any other Loan Document, at any time after its execution and delivery and for
any reason other than as expressly permitted hereunder or thereunder or the
satisfaction in full of all the obligations of the Borrower hereunder and
thereunder, ceases to be in full force and effect; or the Borrower or any other
Person contests in any manner the validity or enforceability of this Agreement
or any other Loan Document; or the Borrower denies that it has any or further
liability or obligation under this Agreement or any other Loan Document, or
purports to revoke, terminate or rescind this Agreement or any other Loan
Document; or
 
(c)           The Borrower generally discontinues its business operations or
sells or otherwise disposes of all or substantially all of its assets; or
 
(d)           The Borrower admits in writing that it is generally unable to pay
debts as they mature or become due; or
 
(e)           The Borrower makes a general assignment for the benefit of
creditors; or
 
(f)           The commencement of a proceeding by or against the Borrower under
the federal bankruptcy code, or any other federal or state laws seeking to
adjudicate the Borrower as bankrupt or insolvent, or
 

 
 

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BioScrip, Inc.
July 8, 2009
Page 8

seeking the liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief or composition of the Borrower or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors, or
seeking the entry of an order for relief or the appointment of a receiver,
liquidator, assignee, custodian, trustee, sequestrator, debtor in possession,
examiner or other similar official for the Borrower, the Pledged Collateral or
any substantial part of the Borrower's property, with or without consent, for
any purpose whatsoever and, in the case of any such proceeding instituted
against the Borrower (but not instituted by it), such proceeding shall remain
unstayed and undismissed for a period of sixty (60) days; or any of the
following actions sought in such proceeding shall occur: the entry of an order
for relief against, or the appointment of a receiver, trustee, custodian or
other similar official for, the Borrower, the Pledged Collateral or for any
substantial part of its property; or
 
(g)           Any of the Pledged Collateral is taken by attachment, execution or
any other form of legal process; or
 
(h)           The Borrower’s failure to comply with the covenants set forth in
Section 1(g)(ii) of this Agreement.
 
Upon the occurrence of an Event of Default, the Lender may declare its
commitment to issue, amend or renew Letters of Credit to be terminated,
whereupon such commitment shall be terminated, and/or declare all sums
outstanding hereunder to be immediately due and payable, whereupon the same
shall become and be immediately due and payable, without notice of default,
presentment or demand for payment, protest or notice of nonpayment or dishonor,
or other notices or demands of any kind or character, all of which are hereby
expressly waived; provided, however, that upon the occurrence of an actual or
deemed entry of an order for relief with respect to the Borrower under the
Bankruptcy Code of the United States of America, the commitment of the Lender
hereunder shall automatically terminate, and all sums outstanding hereunder
shall become and be immediately due and payable, without notice of default,
presentment or demand for payment, protest or notice of nonpayment or dishonor,
or other notices or demands of any kind or character, all of which are hereby
expressly waived.
 
4.
Extension of Commitment Termination Date.

 
(a)           Not earlier than 60 days prior to, nor later than 45 days prior
to, each anniversary of the date hereof, the Borrower may, upon notice to the
Lender, request a one-year extension of the Commitment Termination Date then in
effect.  Within 30 days of delivery of such notice, the Lender shall notify the
Borrower whether or not it consents to such extension (which consent may be
given or withheld in the Lender’s sole and absolute discretion).  If the Lender
fails to respond within the above time period, it shall be deemed not to have
consented to such extension.
 
(b)           If the Lender consents to such extension, the Commitment
Termination Date shall be extended to the same date in the following year,
effective as of the Commitment Termination Date then in effect (such existing
Commitment Termination Date being the “Extension Effective Date”).  As a
condition precedent to such extension, the Borrower shall deliver to the Lender
a certificate of the Borrower dated as of the Extension Effective Date signed by
an authorized officer of the Borrower (i) certifying and attaching the
resolutions adopted by the Borrower approving or consenting to such extension
and (ii) certifying that, before and after giving effect to such extension, no
Event of Default exists.
 

 
 

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BioScrip, Inc.
July 8, 2009
Page 9

 
5.
Payments; Overdue Amounts.

 
(a)           Payments.  All reimbursements of drawings under any Letter of
Credit and payments of interest, fees, expenses and any other amounts due
hereunder or under any of the other Loan Documents shall be made on the due date
thereof to the Lender in U.S. Dollars, at the Lender’s office in Boston,
Massachusetts or at such other place that the Lender may from time to time
designate, in each case at or about 1:00 p.m. (Boston, Massachusetts, time or
other local time at the place of payment) and in immediately available funds.
The Lender may, without notice to or demand upon the Borrower, debit the Cash
Collateral Account in payment of all amounts not paid when due hereunder.
 
(b)           No Offset, Counterclaims.  All payments by the Borrower hereunder
and under any of the other Loan Documents shall be made without recoupment,
setoff or counterclaim and free and clear of and without deduction for any
taxes, levies, imposts, duties, charges, fees, deductions, withholdings,
compulsory loans, restrictions or conditions of any nature now or hereafter
imposed or levied by any jurisdiction or any political subdivision thereof or
taxing or other authority therein unless the Borrower is compelled by law to
make such deduction or withholding.  If any such obligation is imposed upon the
Borrower with respect to any amount payable by it hereunder or under any of the
other Loan Documents, the Borrower will pay to the Lender, on the date on which
such amount is due and payable hereunder or under such other Loan Document, such
additional amount in U.S. Dollars as shall be necessary to enable the Lender to
receive the same net amount which the Lender would have received on such due
date had no such obligation been imposed upon the Borrower.  The Borrower will
deliver promptly to the Lender certificates  or other valid vouchers for all
taxes or other charges deducted from or paid with respect to payments made by
the Borrower hereunder or under such other Loan Document.
 
(c)           Overdue Amounts.  All overdue amounts payable hereunder or under
any of the other Loan Documents, including, without limitation, overdue fees,
shall bear interest compounded monthly and payable on demand at the rate per
annum equal to the Lender’s prime rate as in effect from time to time plus four
percent (4.00%).
 
6.           Increased Costs; Capital Adequacy.  If any law, treaty,
governmental (or quasi-governmental) rule, regulation, guideline or order
regarding capital adequacy, reserve requirements or similar requirements or
compliance by the Lender with any request or directive regarding capital
adequacy, reserve requirements or similar requirements (whether or not having
the force of law), in each case, adopted after the date hereof, from any central
bank or other governmental authority increases or would have the effect of
increasing the amount of capital, reserves or other funds required to be
maintained by Lender and thereby reducing the rate of return on Lender’s capital
as a consequence of its obligations hereunder, then the Borrower shall from time
to time upon demand by the Lender pay to the Lender additional amounts
sufficient to compensate the Lender for such reduction.  A certificate as to the
amount of that reduction and showing the basis of the computation thereof
submitted by the Lender to the Borrower shall be presumptive evidence of the
matters set forth therein.  The agreements in this Section 6 shall survive the
termination of the Commitment and repayment, satisfaction or discharge of all
other obligations under the Loan Documents.
 

 
 

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Page 10

7.           Miscellaneous.
 
(a)           Except as otherwise expressly provided in this Agreement or the
other Loan Documents, all notices and other communications made or required to
be given pursuant to this Agreement or the other Loan Documents shall be in
writing and shall be delivered by hand, mailed by registered or certified first
class mail, postage prepaid, sent by overnight courier, or sent by facsimile and
confirmed by delivery via courier or postal service, addressed as follows:
 
(i)           if to the Borrower, at 10050 Cross Town Circle, Eden Prairie,
Minnesota  55344, Attention:  Stanley G. Rosenbaum, Telecopier No.  __________;
with a copy to BioScrip, Inc. at 100 Clearbrook Road, Elmsford, New York  10523,
Attention: General Counsel, Telecopier No. 914-460-1670, or, in each case, at
such other addresses for notice as the Borrower shall have furnished in writing
to the Lender;
 
(ii)           if to the Lender, at Bank of America, N.A., 100 Federal Street,
MA5-100-07-08,Boston, Massachusetts 02110, Attention:  Linda E.C. Alto,
Telecopier No.  617-434-3552; with a copy to Bingham McCutchen LLP, One Federal
Street, Boston, Massachusetts 02110, Attention: Linda J. Groves, Telecopier
No:  617-951-8736, or, in each case, such other address for notice as the Lender
shall have last furnished in writing to the Borrower.
 
Any such notice or demand shall be deemed to have been duly given or made and to
have become effective (i) if delivered by hand, overnight courier or facsimile
to a responsible officer of the party to which it is directed, at the time of
receipt thereof by such officer or the sending of such facsimile and (ii) if
sent by registered or certified first-class mail, postage prepaid, on the third
Business Day following the mailing thereof.
 
(b)           This Agreement shall inure to the benefit of the parties hereto
and their respective successors and assigns, except that the Borrower may not
assign its rights and obligations hereunder.  The Lender may at any time (i)
assign all or any part of its rights and obligations hereunder to any other
Person with the consent of the Borrower, such consent not to be unreasonably
withheld, provided that no such consent shall be required if the assignment is
to an affiliate of the Lender or if an Event of Default exists, and (ii) grant
to any other Person participating interests in all or part of its rights and
obligations hereunder without notice to the Borrower.  The Borrower agrees to
execute any documents reasonably requested by the Lender in connection with any
such assignment.  All information provided by or on behalf of the Borrower to
the Lender or its affiliates may be furnished by the Lender to its affiliates
and to any actual or proposed assignee or participant.
 
(c)           The Borrower shall pay the Lender, on demand, all reasonable
out-of-pocket costs and expenses (including reasonable attorneys' fees of
outside counsel or the allocated costs of in-house counsel) incurred or paid in
connection with the preparation, interpretation or enforcement of this Agreement
or any instruments or agreements executed in connection herewith.  The
agreements in this Section 7(c) shall survive the termination of the Commitment
and repayment, satisfaction or discharge of all other obligations under the Loan
Documents.
 

 
 

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BioScrip, Inc.
July 8, 2009
Page 11

(d)           Whether or not the transactions contemplated hereby are
consummated, the Borrower shall indemnify and hold harmless the Lender, its
affiliates, and their respective directors, officers, employees, counsel, agents
and attorneys-in-fact (collectively the “Indemnitees”) from and against any and
all liabilities, obligations, losses, damages, penalties, claims, demands,
actions, judgments, suits, costs, expenses and disbursements of any kind or
nature whatsoever which may at any time be imposed on, incurred by or asserted
against any such Indemnitee in any way relating to or arising out of or in
connection with (a) the execution, delivery, enforcement, performance or
administration of any Loan Document or any other agreement, letter or instrument
delivered in connection with the transactions contemplated thereby or the
consummation of the transactions contemplated thereby, (b) the Commitment, any
Letter of Credit or the use or proposed use of the proceeds therefrom (including
any refusal by the Lender to honor a demand for payment under a Letter of Credit
if the documents presented in connection with such demand do not strictly comply
with the terms of such Letter of Credit), or (c) any actual or prospective
claim, litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory (including any investigation
of, preparation for, or defense of any pending or threatened claim,
investigation, litigation or proceeding) and regardless of whether any
Indemnitee is a party thereto (all the foregoing, collectively, the “Indemnified
Liabilities”); provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such liabilities, obligations, losses, damages,
penalties, claims, demands, actions, judgments, suits, costs, expenses or
disbursements are determined by a court of competent jurisdiction by final and
nonappealable judgment to have resulted from the gross negligence or willful
misconduct of such Indemnitee.  No Indemnitee shall have any liability for any
indirect or consequential damages relating to this Agreement or any other Loan
Document or arising out of its activities in connection herewith or therewith
(whether before or after the date hereof).  All amounts due under this Section
7(d) shall be payable within ten Business Days after demand therefor.  The
agreements in this Section shall survive the termination of the Commitment and
the repayment, satisfaction or discharge of all the other obligations under the
Loan Documents.
 
(e)           If any provision of this Agreement or the other Loan Documents is
held to be illegal, invalid or unenforceable, (i) the legality, validity and
enforceability of the remaining provisions of this Agreement and the other Loan
Documents shall not be affected or impaired thereby and (ii) the parties shall
endeavor in good faith negotiations to replace the illegal, invalid or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the illegal, invalid or unenforceable
provisions.  The invalidity of a provision in a particular jurisdiction shall
not invalidate or render unenforceable such provision in any other jurisdiction.
 
(f)           The Borrower will cooperate with the Lender and execute such
further instruments and documents as the Lender shall reasonably request to
carry out to the transactions contemplated by this Agreement and the other Loan
Documents.
 
(g)           This Agreement may be executed in one or more counterparts, and
each counterpart, when so executed, shall be deemed an original but all such
counterparts shall constitute but one and the same instrument.  Delivery of a
signature page to this Agreement by telecopy or other electronic means shall be
effective as delivery of a manually executed counterpart of such signature page.
 

 
 

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BioScrip, Inc.
July 8, 2009
Page 12

(h)           This Agreement shall be governed by and construed in accordance
with the laws of the Commonwealth of Massachusetts.
 
(i)           The Lender hereby notifies the Borrower that pursuant to the
requirements of the USA Patriot Act (Title III of Pub.L. 107-56 (signed into law
October 26, 2001)) (the “Act”), the Lender is required to obtain, verify and
record information that identifies the Borrower, which information includes the
name and address of the Borrower and other information that will allow the
Lender to identify the Borrower in accordance with the Act.
 
Please indicate your acceptance of the Commitment on the foregoing terms and
conditions by returning an executed copy of this Agreement to the undersigned
not later than July 8, 2009.
 
 
BANK OF AMERICA, N.A.
 

 
By: ____________________________________
Name:
Title:
 

 
 

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BioScrip, Inc.
July 8, 2009
Page 13

Accepted and Agreed to as of the date first written above:
 
BIOSCRIP, INC.
 
 
By: ____________________________________
       Name
       Title:

 
 

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EXHIBIT A
 
DEFINITIONS
 
Business Day:
Any day other than a Saturday, Sunday, or other day on which commercial banks
are authorized to close under the laws of, or are in fact closed in, the
Commonwealth of Massachusetts.
Cash Collateral Agreement:
That certain Cash Collateral Agreement re Standby Letters of Credit, in
substantially the form attached hereto as Exhibit C.
Commitment:
The obligation of the Lender to make L/C Credit Extensions hereunder in an
aggregate principal amount at any one time not to exceed $5,000,000.
Commitment Termination Date:
The later of (a) July 8, 2010 and (b) if the commitment is extended pursuant to
Section 4, such extended commitment termination date as determined pursuant to
such Section.
HFG Waiver:
That certain Waiver of Security Interests, in substantially the form attached
hereto as Exhibit D.
L/C Credit Extension
With respect to any Letter of Credit, the issuance thereof or extension of the
expiry date thereof, or the renewal or increase of the amount thereof.
Letter of Credit:
Any standby letter of credit issued hereunder.
Loan Documents:
This Agreement, the Cash Collateral Agreement, the HFG Waiver, each L/C
Application and each other document executed and or delivered in connection
herewith or therewith.
Person:
Any natural person, corporation, limited liability company, trust, joint
venture, association, company, partnership, governmental authority or other
entity.
Pledged Collateral:
All amounts and other property from time to time credited to the Cash Collateral
Account or on deposit or held therein (including, without limitation, all cash,
and all money market and similar instruments on deposit therein), and all
dividends, distributions, income, interest and all proceeds of the foregoing
whether now existing or hereafter arising
Subsidiary:
With respect to the Borrower, a corporation, partnership, joint venture, limited
liability company or other business entity of which all of the shares of
securities or other interests having ordinary voting power for the election of
directors or other governing body (other than securities or interests having
such power only by reason of the happening of a contingency) are at the time
beneficially owned, and the management of which is otherwise controlled,
directly, or indirectly through one or more intermediaries, or both, by the
Borrower.