**FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AND SECURITYAGREEMENT, RESIGNATION OF EXISTING LENDERS’ AGENT, AND APPOINTMENT OF SUCCESSORLENDERS’ AGENT**

 

             This **FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT,RESIGNATION OF EXISTING LENDERS’ AGENT, AND APPOINTMENT OF SUCCESSOR LENDERS’AGENT** (this “**Amendment**”),dated as of April 13, 2001, is entered into by and among the financialinstitutions party hereto (the “**Lenders**”),**BANK OF AMERICA, N.A.**(individually and as resigning Lenders’ Agent, “**Bank of America**”), **GENERALELECTRIC CAPITAL CORPORATION** (individually and as successor Lenders’Agent, “**GECC**”), **OPTION CARE, INC.**, a Delaware corporation,(individually (“**Option Care**”) andas the Borrowers’ Agent (the “**Borrowers’Agent**”)), and Option Care and each of Option Care’s Subsidiariesparty hereto (collectively, the “**Borrowers**”).

 

**BackgroundStatement**

**             A.        **The Borrowers, theBorrowers’ Agent, the Lenders, and Bank of America, as the Lenders’ Agent, areparties to that certain Amended and Restated Loan and Security Agreement datedas of June 30, 2000 (as amended or otherwise modified to date, the “**Loan Agreement**”; capitalized terms used but not defined in this Amendment have themeanings given in the Loan Agreement).

**             B.        **Bank of America desires toresign from its position as the Lenders’ Agent under the Loan Agreement and theother Loan Documents.

**             C.        **The Lenders, with theconsent of the Borrowers and the Borrowers’ Agent, desire to appoint GECC assuccessor to Bank of America as the Lenders’ Agent under the Loan Agreement andother Loan Documents.

**             D.        **The parties to the LoanAgreement desire to amend the Loan Agreement in certain respects as set forthin this Amendment.

**Agreement**

             **NOW, THEREFORE**, for good andvaluable consideration, the parties hereto hereby agree as follows:

**             1.          Resignation and Appointment ofLenders’ Agent.**

             (a)         Resignationof Bank of America.  Bank of Americahereby resigns as existing Lenders’ Agent under the Loan Agreement and theother Loan Documents, effective upon the Effective Date (as defined in **Section 4**).  The Lenders and each Option Care Personhereby consents to such resignation and waives any right to prior noticethereof.
             (b)        Appointmentof GECC.  The Lenders hereby appointGECC as successor Lenders’ Agent under the Loan Agreement and the other LoanDocuments, effective upon the Effective Date. Each Option Care Person hereby consents to the appointment of GECC asthe Lenders’ Agent and waives any right to prior notice thereof.  Effective automatically upon the EffectiveDate, as provided in **Section 16.17** of the Loan Agreement, (i)GECC shall have all the rights, powers and duties of the Lenders’ Agent asexpressly provided for in the Loan Agreement and Loan Documents, and the term“Lenders’ Agent” shall mean GECC, (ii) Bank of America hereby assigns to GECC,as the successor Lenders’ Agent, the security interests, pledges and liensgranted by Borrowers in favor of Bank of America as the prior Lenders’ Agentand all of its rights as the Lenders’ Agent under the Loan Agreement and otherLoan Documents (subject to **Section 1.(e)** hereof), and (iii) Bank of America’s appointment, powers andduties as the Lenders’ Agent shall be terminated.

             (c)         FurtherAssurances.  Bank of America andeach Option Care Person agrees to execute and deliver all documents andagreements and to take all actions reasonably requested by GECC which may benecessary or desirable to accomplish the purposes of this Amendment and toensure that the security interests, pledges and assignments granted by theBorrowers to the Lenders’ Agent shall inure to the benefit of GECC as thesuccessor Lenders’ Agent on behalf of itself and the Lenders and shall continueto constitute legally valid and duly perfected security interests, pledges andassignments in favor of GECC, including, without limitation, the execution anddelivery of UCC financing statements, amendments and assignments reflecting theappointment of GECC as the Lenders’ Agent and the assignment (subject to **Section 1(e)** hereof) of all of Bank of America’srights as the prior Lenders’ Agent to GECC; provided, however,that this **Section1(c)** shall not obligate any Option Care Person to establish accountsor lockboxes with any financial institution, or to enter into any agreementwith the Lenders' Agent and the financial institution where any such account orlockbox may be located with respect thereto.

             (d)        Limitationof Liability.  In no event shallGECC be liable to any Option Care Person, any Lender, or any other Person underany Loan Document or any transaction arising thereunder or for any action oromission on the part of Bank of America or any other occurrence prior to theEffective Date.  The provisions of this **Section 1(d)**are not intended to and shall in no way diminish any limitation of liabilitycontained in any Loan Document.

             (e)         Reservationof Rights.  Notwithstanding anyother provision of this Amendment, Bank of America shall not relinquish itsrights to indemnification under **Sections 2.4, 4.4, 6.1, 7.13**and**15.11**, and **Section 16.1**through **16.17**,of the Loan Agreement or any other provision of any Loan Document providing forindemnification of Bank of America, in its individual capacity and in itscapacity as the Lenders’ Agent, to the extent such rights relate to the timeprior to the Effective Date.

**             2.          Amendment of Loan Agreement. **Effective upon theEffective Date, the Loan Agreement is amended as follows:

             (a)         **Section 1.1**of the Loan Agreement is amended by replacing the definitions of “Bank”,“Federal Funds Rate”, “LIBOR”, and “Reference Rate” withthe following respective definitions:
“Bank”means General Electric Capital Corporation, or any successor entity thereto.

“FederalFunds Rate” means, for any day, a floating rate equal to the weightedaverage of the rates on overnight federal funds transactions among members ofthe Federal Reserve System, as determined by the Lenders’ Agent in its solediscretion, which determination shall be final, binding and conclusive (absentmanifest error).

“LIBOR”means the rate per annum determined by the Lenders’ Agent equal to the offeredrate for deposits in United States Dollars for the applicable Interest Periodthat appears on Telerate Page 3750 as of 11:00 a.m. (London time), on thesecond full Business Day next preceding the first day of such Interest Period(unless such date is not a Business Day, in which event the next succeedingBusiness Day will be used).  If suchinterest rates shall cease to be available from Telerate News Service, LIBORshall be determined from such financial reporting service or other informationas shall be mutually acceptable to the Lenders’ Agent and the Borrowers.

“ReferenceRate” means, for any day, a floating rate equal to the higher of (i) therate publicly quoted from time to time by The Wall Street Journal as the “baserate on corporate loans posted by at least 75% of the nation’s 30 largestbanks” (or, if The Wall Street Journal ceases quoting a base rate of the typedescribed, the highest per annum rate of interest published by the FederalReserve Board in Federal Reserve statistical release H.15 (519) entitled“Selected Interest Rates” as the Bank prime loan rate or its equivalent), and(ii) the Federal Funds Rate plus 50 basis points per annum.  Each change in any Interest Rate providedfor in this Agreement based upon the Reference Rate shall take effect at thetime of such change in the Reference Rate.

             (b)        **Section15.20(d)** of the Loan Agreement is amended by replacing the first tworows of the chart therein with the following:
If to the Lenders’ Agent  or to the Bank or to General Electric Capital Corporation, as Lender: General Electric Capital  Corporation   2325 Lakeview Parkway   Suite 700   Alpharetta, Georgia 30004-1976   Attention: Account Manager - Option Care, Inc.   Facsimile: 678-624-7904   with a copy to: Kilpatrick Stockton LLP   1100 Peachtree Street N.E.   Suite 2800   Atlanta, Georgia 30309-4530   Attention: Colvin T. Leonard, Esq.
 

             (c)         **Section 15.20(d)** of the LoanAgreement is amended by inserting, immediately after the phrase “each OptionCare Person”, the phrase “(other than Option Care)”.

             (d)        **Exhibits A, B, C,**and **D** to the Loan Agreement arereplaced with **Exhibits A, B, C,** and**D**attached to this Amendment, respectively.

**             3.          Representations and Warranties.**

             (a)         Inorder to induce GECC and Lenders to enter into this Amendment, each Option CarePerson jointly and severally represents and warrants to GECC and the Lendersthat as of the date of this Amendment (which representations and warrantiesshall survive the execution of this Amendment):
 (i)this Amendment has been  duly authorized, executed and delivered by each Borrower and the Borrowers’  Agent;    (ii)no Default or Event of  Default has occurred and is continuing;    (iii)no Material Adverse Effect  has occurred since December 31, 2000;    (iv)the Perfection  Certificates dated as of April 13, 2001, executed by each Borrower are true  and correct in all respects as of the date of such Perfection Certificates  and as of the Effective Date;    (v)all of the representations  and warranties made by any Option Care Person in any Loan Document are true  and correct on and as of the date of this Amendment and after giving effect  to this Amendment (except to the extent that any such representations or  warranties expressly referred to a specific prior date or have changed based  upon events expressly permitted by the Loan Agreement).    (vi)no Subsidiary of Option  Care or any other Person has become an additional Borrower under the Loan  Agreement since June 30, 2000; and    (vii)except for this Amendment  and except as shown on **Schedule 2** hereto, there have been no  amendments, waivers, or other modifications of any Loan Documents.
             (b)        Inorder to induce GECC to enter into this Amendment, Bank of America representsand warrants to GECC that as of the date of this Amendment (whichrepresentations and warranties shall survive the execution of this Amendment):
 (i)to the best of Bank of  America’s knowledge, no Default or Event of Default has occurred and is  continuing as of the date of this Amendment;    (ii)**Schedule 1** hereto contains a complete and accurate list of Loan Documents;
 
 (iii)no Subsidiary of Option  Care or any other Person has become an additional Borrower under the Loan  Agreement since June 30, 2000; and    (iv)except for this Amendment  and except as shown on **Schedule 2**, there have been no  amendments, waivers, or other modifications of any Loan Documents.
**             4.          Conditions to Effectiveness;Post-Closing Conditions.**

             (a)         The“Effective Date” shall be the later of (x) the date first written above,and (y) the date upon which all of the conditions set forth in this **Section 4**are satisfied.  This Amendment shall beof no force or effect unless and until GECC has received each of the followingdocuments, each in form and substance acceptable to GECC:
 (i)this Amendment, duly  executed and delivered by Bank of America, each Borrower, the Borrowers’  Agent, and each Lender;    (ii)fully executed originals  of the Loan Agreement, Pledge Agreements, and Trademark Security Agreements,  and, to the extent that originals are not available, copies of all other Loan  Documents (in each case with all exhibits and schedules attached);    (iii)an Assignment and  Acceptance, duly executed and delivered by Bank of America, as former Lender,  and GECC, as successor Lender, and consented to by each Option Care Person;    (iv)a Revolving Note in the  principal amount of $15,625,000, duly executed and delivered by the Borrowers  in favor of GECC, as Lender;    (v)a Term Loan Note in the principal  amount of $9,375,000, duly executed and delivered by the Borrowers in favor  of GECC, as Lender;    (vi)the Lenders’ Agent shall  have terminated the Amended and Restated Lockbox/Blocked Account Agreement  with The Northern Trust Company;    (vii)an assignment of each  Trademark Security Agreement, duly executed and delivered by Bank of America  and consented to by the applicable grantor thereunder;    (viii)an Additional Borrower  Agreement, duly executed and delivered by Excel Healthcare, L.L.C., together  with **Annex  A** thereto and such other documents as may be required under **Section  15.19** of the Loan Agreement;    (ix)Perfection Certificates  executed by each Borrower, dated as of April 13, 2001;
 
 (x)UCC-3 termination  statements described on **Schedule 3**  hereto, duly executed  by the applicable secured party;    (xi)UCC-1 financing statements  described on **Schedule 4**  hereto, duly executed by the  applicable Borrower as debtor and naming the GECC as secured party, as agent;    (xii)an assignment of each  UCC-1 financing statement filed in connection with the Loan Documents,  including without limitation the assignments described on **Schedule 4**;  and    (xiii)original stock  certificates representing all of the shares of stock pledged under the Pledge  Agreements together with undated, signed stock powers.
**             5.          Ratification. **Each Option Care Personhereby ratifies and reaffirms all of its obligations under the Loan Agreement(as amended hereby) and all other Loan Documents to which such Person is aparty.

**             6.          Waiver by the Option Care Persons. **Each Option Care Personhereby waives any claim, defense, demand, action or suit of any kind or naturewhatsoever against the Lenders, GECC, and Bank of America arising on or priorto the date of this Amendment in connection with any of the Loan Documents orthe transactions contemplated thereunder.

**             7.          Governing Law. **THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,THE LAWS OF THE STATE OF ILLINOIS FOR CONTRACTS TO BE PERFORMED ENTIRELY WITHINSAID STATE.

**             8.          Counterparts. **This Amendment may be executed in any number of counterparts, all ofwhich shall be deemed to constitute but one original and shall be binding uponall parties, their successors and permitted assigns.

**             9.          No Other Amendments. **Except for the assignmentsand the resignation and appointment of Lenders’ Agent set forth in **Section 1** above, and the amendments expressly set forth in **Section 2** above, the Loan Agreement and the other Loan Documents shall remain unchangedand in full force and effect.  Nothingin this Amendment is intended, or shall be construed, to constitute a novationor an accord and satisfaction of any of the Obligations or to modify, affect orimpair the perfection or continuity of the Lenders’ Agent’s and the Lenders’security interests in, security titles to or other Liens on any Collateral.

[*Remainderof page intentionally left blank*]

 

             **IN WITNESS WHEREOF**, theparties have entered into this Amendment on the date first above written.

 
 **BANK OF  AMERICA, N.A.****,**individually and as  resigning Lenders’ Agent       By: Name: Title:     **GENERAL  ELECTRIC CAPITAL CORPORATION**,             individually, as successor  Lenders’ Agent, and as a Lender       By: Brian Beckwith Duly Authorized Signatory     **LASALLE  BANK NATIONAL ASSOCIATION**, as a Lender       By: Name: Title:     **OPTION  CARE, INC.**, a Delaware  corporation, as a Borrower             and as the Borrowers’ Agent       By: Rajat Rai President    By: Carla M. Pondel Chief Financial Officer   
[*Signaturescontinued on next page*]** **Borrowers:**   **EXCEL  HEALTHCARE, L.L.C.** **HOME CARE  OF COLUMBIA, INC.** **MANAGEMENT  BY INFORMATION, INC.** **NORTH  COUNTY HOME I.V., INC.** **OPTION  CARE ENTERPRISES, INC.**, a Delaware corporation **OPTION  CARE ENTERPRISES, INC.**, a Pennsylvania corporation **OPTION  CARE HOME HEALTH, L.L.C.** **OPTION  CARE HOME HEALTH OF CALIFORNIA, INC.** **OPTION  CARE HOSPICE, INC.** **OPTION  CARE, INC.**, a  California corporation **OPTION  CARE OF DENVER, INC.** **OPTION  CARE OF OKLAHOMA, INC.** **OPTION  HOME HEALTH, INC.** **OPTIONLINK,  INC.** **OPTIONMED,  INC.** **REHAB  OPTIONS, INC.**
 
 By: Rajat Rai President each of the  above-named Borrowers    By: Carla M. Pondel Chief Financial Officer each  of the above-named Borrowers
** **

 

**EXHIBIT A**

**FORM OF ACCOUNT DEBTOR NOTICE**

[Letterhead of Borrower]

_____________, 20__

CERTIFIEDMAIL;RETURN RECEIPT REQUESTED

[Name andaddress of Account Debtor]

To Whom ItMay Concern:

We arepleased to announce that we have entered into a revolving loan agreement withGeneral Electric Capital Corporation, the other lenders party thereto from timeto time, and General Electric Capital Corporation, as agent for those lenders(in such capacity, together with its successors and assigns in such capacity,the “Agent”).  In connection withthat agreement, we have granted a continuing security interest to the Agent inour existing and future  receivables andother amounts which you may owe us from time to time.

Suchsecurity interest will continue in effect until such time as the Agentotherwise notifies you in writing.  Wehereby revoke any notice we may have given you previously with regard to anysecurity interest granted (or transfer made) by us to any person or entity otherthan the Agent.

If you haveany questions about this notice or anything else, please contact theundersigned.
 Very truly yours,     [NAME OF BORROWER]      By: Name: Title:
** **

 

**EXHIBIT B**

**FORM OF ADDITIONAL BORROWER AGREEMENT**

General ElectricCapital Corporation2325 Lakeview ParkwaySuite 700Alpharetta, Georgia 30004-1976Attention: Account Manager - Option Care, Inc.

LaSalleNational Bank135 South LaSalle Street, Suite 215Chicago, Illinois 60603Attention: Dana Friedman
 Re:Amended and Restated Loan  and Security Agreement dated as of June 30, 2000 (as amended, amended and  restated or otherwise modified from time to time, the “Loan and Security  Agreement”) among the Lenders from time to time party thereto, General  Electric Capital Corporation, as the Lenders’ Agent, Option Care, Inc.,  individually and as the Borrowers’ Agent, and Option Care, Inc. and the  Subsidiaries of Option Care, Inc. from time to time party thereto, as the  Borrowers
Ladies andGentlemen:

ThisAdditional Borrower Agreement is dated as of [_______________] and is made anddelivered pursuant to Section 15.19 of the Loan and Security Agreement, andreference is made thereto for full particulars of the matters describedherein.  All capitalized terms definedin the Loan and Security Agreement and used in this Additional BorrowerAgreement without definition shall have the meanings assigned to them in theLoan and Security Agreement.

Each of                               (the “Additional Borrower”) and theBorrowers’ Agent hereby confirms, represents and warrants to the Lenders andthe Lenders’ Agent that the Additional Borrower is a wholly-owned Subsidiary ofOption Care or a wholly-owned Subsidiary of one of the Subsidiaries of OptionCare.

The partieshereto hereby agree that from and after the effective date specified in theAdditional Borrower Consent Notice relating to the Additional Borrower, theAdditional Borrower shall be a “Borrower” party to the Loan and SecurityAgreement and, without limiting the foregoing, shall have all of the rights,obligations, duties and liabilities of a Borrower thereunder.  The Additional Borrower confirms itsacceptance of, and consents to, all representations and warranties, covenants,and other terms and provisions of the Loan and Security Agreement; provided,however, that the Schedules to the Loan and Security Agreement arehereby supplemented with the information set forth in Annex A attachedhereto.  [Annex A should be attached tothe executed Additional Borrower Agreement] Without limiting the generality of the foregoing, and without limiting Section7.1 of the Loan and Security Agreement: as security for the payment andperformance of all of the Obligations, the Additional Borrower hereby grants tothe Lenders’ Agent a continuing security interest in, lien on, and assignmentof all of the Additional Borrower’s right, title and interest in, to and  under (but none of the Additional Borrower’sobligations under) the Collateral, in each case wherever located and whethernow existing or hereafter arising or acquired.
ThisAdditional Borrower Agreement may be executed in any number of counterparts,and by the parties hereto in separate counterparts, each of which shall be anoriginal, but all of which shall together constitute one and the sameagreement.

IN WITNESSWHEREOF, the parties hereto have caused this Additional Borrower Agreement tobe duly executed and delivered by their duly authorized officers as of the dayand year first above written.
 [NAME OF ADDITIONAL  BORROWER]     By: Name: Title:     OPTION CARE, INC., as the Borrowers’ Agent       By: Name: Title:       By: Name: Title:
** **

 

**EXHIBIT C**

**ADDITIONAL BORROWER CONSENT NOTICE**

[Date]

OptionCare, Inc.100 Corporate NorthSuite 212Bannockburn, Illinois 60015Attention: Chief Financial Officer
 Re:Additional Borrower  Agreement dated [__________________] (the “Additional Borrower Agreement”)  between [name of Additional Borrower] (the “Additional Borrower”) and  Option Care, Inc., as the Borrowers’ Agent
Ladies andGentlemen:

We havereceived the Additional Borrower Agreement and the other related itemscontemplated by Section 15.19 of the Loan and Security Agreementreferred to therein.  Please be advisedthat we consent to the Additional Borrower becoming a Borrower party to, andagree that the Additional Borrower shall become a Borrower party to, such Loanand Security Agreement, effective as of [_______________].
 Very truly yours,    GENERAL ELECTRIC CAPITAL  CORPORATION,  as a Lender       By: Name: Title:          LASALLE BANK NATIONAL  ASSOCIATION, as a Lender       By: Name: Title:
 

 

**EXHIBIT D**

**COMMITMENTS**

 
**Name of Lender** **Amount of  Commitment** **** ****     General  Electric Capital Corporation $25,000,000     LaSalle  Bank National Association $15,000,000 
 
** 

**Schedule 1**

 

**List ofLoan Documents**

 
1.Amended and Restated Loan  and Security Agreement2.Amended and Restated  Pledge Agreement executed by Option Care, Inc.3.Amended and Restated  Pledge Agreement executed by Option Care Enterprises, Inc.4.Amended and Restated  Pledge Agreement executed by Rehab Options, Inc.5.Amended and Restated  Trademark Security Agreement executed by Cordesys Healthcare Management, Inc.  (n/k/a OptionLink, Inc.)6.Amended and Restated  Trademark Security Agreement executed by Option Care, Inc., a California  corporation7.Amended and Restated  Trademark Security Agreement executed by Management by Information, Inc.8.Revolving Credit Notes9.Term Loan Notes10.Amended and Restated  Lockbox/Blocked Account Agreement
 

**Schedule 2**

**Amendments,Waivers, and Other Modifications**

1.       ConsentLetter dated September 29, 2000, regarding acquisition of assets of franchisedbusiness in Hemet, California, from Peluso Investments, Inc.

 

2.       TwoWaiver and Consent Letters, each dated December 27, 2000 regarding (i) failureto maintain Fixed Charge Coverage Ratio and (ii) acquisition of assets offranchised business in Rockwall, Texas, from Rockwall Drug, Inc.

 

3.       ConsentLetter dated January 15, 2001 regarding acquisition of (i) assets of franchisedbusiness of Columbus, Ohio, (ii) Medicare certified home health agency inFairborn, Ohio, and (iii) network management company on Columbus, Ohio.

 

4.       ConsentLetter dated February 6, 2001 regarding acquisition of Medicare certified homehealth agency in Thousand Oaks, California.

 

5.       Verbalconsent dated August 8, 2000 regarding acquisition of assets of franchisedbusiness in Sterling, Virginia (Excel Healthcare, L.L.C.).

 

6.       ConsentLetter dated April 9, 2001 regarding acquisition of assets of businesses in St.Louis, Missouri, and Tampa, Florida.

** **
** 

**Schedule 3**

**UCC-3Termination Statements**

 

[Seeattached]
** 

**Schedule 4**

**UCCFinancing Statements**
Entity Filing  Jurisdictions Assign  Existing  UCC-1File  New  UCC-1  Option Care, Inc.  [Delaware] Illinois ü       Option Care Enterprises,  Inc. [Delaware] Arizona ü   California ü   Colorado ü   Florida ü   Illinois ü   Michigan ü   Missouri  ü  Missouri, Boone County  ü  Missouri, Cole County  ü  Nebraska  ü  Ohio ü   Ohio, Hamilton County  ü  Oklahoma  ü  Oregon ü   Pennsylvania ü   Pennsylvania, Montgomery  County  ü  Texas ü   Washington ü       Excel Healthcare, L.L.C. Virginia  ü  Virginia, Louden County  ü      Option Care Enterprises,  Inc. [Pennsylvania] Pennsylvania  ü  Pennsylvania, Montgomery  County  ü  Illinois ü       Home Care of Columbia,  Inc. Illinois ü   Missouri  ü  Missouri, Boone County  ü      Management By Information,  Inc. Arkansas ü   Illinois ü   Delaware  ü      North County Home I.V.,  Inc. Illinois ü   California ü       Option Care Home Health of  California, Inc. Illinois ü   California ü   Delaware  ü      Option Care Home Health,  L.L.C. Illinois ü   Washington ü       Option Care Hospice, Inc. Illinois ü   Missouri ü       Option Care, Inc.  [California] California  ü  Illinois ü       Option Care of Denver,  Inc. Colorado ü   Delaware  ü  Illinois ü       Option Care of Oklahoma,  Inc. Delaware  ü  Illinois ü   Oklahoma  ü      Option Home Health, Inc. Illinois ü   Ohio ü   Ohio, Hamilton County  ü      OptionLink, Inc. Delaware  ü  Illinois  ü      OptionMed, Inc. Delaware  ü  Illinois ü       Rehab Options, Inc. Missouri ü   Illinois ü       Option Med, Inc. Illinois ü 
 

 ********