Document:

cashcollateral.htm

    
      

      

    

     

     

    [EXECUTION COPY

     

     

    

    BioScrip,
Inc.

    100
Clearbrook Road.

    Elmsford,
New York  10523

     

    July 8,
2009

     

    Bank of
America, N.A.

    100
Federal Street

    MA5-100-07-08

    Boston,
Massachusetts  02110

    Attention:
Linda E.C. Alto

    

    Re:           Cash
Collateral Agreement re Standby Letters of Credit

     

    Ladies
and Gentlemen:

     

    Reference
is hereby made to that certain letter agreement, dated as of the date hereof (as
amended and in effect from time to time, the “L/C Agreement”), between
BioScrip, Inc. and Bank of America, N.A. (“Bank of America” or
“you”),
pursuant to which Bank of America has agreed to issue, amend and renew Standby
Letters of Credit (all such Standby Letters of Credit so issued, amended or
renewed thereunder being hereinafter referred to as the “Credits”) for the
account of BioScrip, Inc. and its subsidiaries (collectively, “we” or “us”), in an aggregate
face amount at any one time not to exceed $5,000,000, and all as more
particularly set forth therein.  All of our obligations owing by us to
you hereunder or arising under or in respect of the L/C Agreement (including any
L/C Application delivered under and as defined in the L/C Agreement) or any
Credit, whether now existing or hereafter arising, contingent or otherwise, are
hereinafter referred to, collectively, as the “Obligations”.  In
connection with the Obligations, we hereby agree, and request your agreement, as
follows:

     

    The Cash Collateral
Account.  In accordance with the requirements of the L/C
Agreement, as collateral security for the Obligations, we will from time to time
furnish to you cash sums to be deposited into an interest bearing account with
you entitled “BioScrip, Inc. Loan Collateral”, Account # 406923 (the “Cash Collateral
Account”).  We agree that some or all of the funds from time to
time in the Cash Collateral Account may be invested by you in time deposits,
including, without limitation, certificates of deposit issued by you (such
certificates of deposit or other time deposits being hereinafter referred to,
collectively, as “Time
Deposits”), which are satisfactory to you after consultation with
us.  Interest earned on the Cash Collateral Account and on the Time
Deposits, and the principal of the Time Deposits at maturity which is not
invested in new Time Deposits, shall be deposited in the Cash Collateral
Account.

     

    Withdrawal Rights
Limited.  In the event that the cash sums plus the then fair
market value of the Time Deposits maintained in the Cash Collateral Account
exceed the sum of (a) the then aggregate undrawn amount of all outstanding
Credits, (b) all unreimbursed obligations with respect to any drawings under the
Credits and (c) all other Obligations then due and owing by us

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (such
excess, as determined by Bank of America in its reasonable discretion, being
referred to herein as the "Release Amount"), we may
thereafter, upon five (5) days prior written notice to you (and upon your
confirmation of the Release Amount, which shall occur no later than fifth
business day after your receipt of such notice), withdraw from the Cash
Collateral Account such portions of the cash sums and Time Deposits as we may
designate with a fair market value equal to the Release Amount (or such smaller
amount as may be requested by us).  Except as otherwise expressly set
forth in the immediately preceding sentence, we shall have no right to withdraw
any sums in the Cash Collateral Account or any Time Deposits or any proceeds of
any thereof or to ask you to part with physical possession of any of the
evidences of Time Deposits constituting instruments.

     

    Security
Interest.  In order to secure our payment and performance in
full of all of the Obligations, we hereby assign to you and grant to you a
security interest in and lien upon the Cash Collateral Account, all of the sums
from time to time in the Cash Collateral Account, the Time Deposits, if any, and
in any and all proceeds of any thereof, whether now or hereafter existing or
arising.  Upon our failure to pay any of the Obligations as and when
due and payable, then, without any demand or notice of any kind, you shall have
the rights and remedies of a secured party under the Uniform Commercial Code of
the Commonwealth of Massachusetts and, in addition, you shall be entitled to
debit the Cash Collateral Account in the amount of such Obligations in default
and, to the extent that the amount of such Obligations in default exceeds the
balance of the Cash Collateral Account, you may collect or redeem any Time
Deposits issued by you for application to such Obligations, with any withdrawal
penalties on any Time Deposits being considered a collection expense to be added
to such Obligations.

     

    Authorization to File Financing
Statement.  You are hereby authorized to file in any Uniform
Commercial Code filing office a financing statement naming us as the debtor and
indicating the collateral as the Cash Collateral Account, all of the sums from
time to time in the Cash Collateral Account, the Time Deposits, if any, and in
any and all proceeds of any thereof, whether now or hereafter existing or
arising.  You may indicate some or all of the collateral on the
financing statement, whether generally or specifically.

     

    Liens of Third
Parties.  We hereby agree that the Cash Collateral Account, the
Time Deposits, if any, and in any and all proceeds of any thereof, whether now
or hereafter existing or arising, shall not be subject to any lien or security
interest in favor of any person other than you unless and to the extent the
person or entity holding any such lien or security interest shall have waived
such lien or security interest on or prior to the date hereof.

     

    No Commitment to Extend or Renew the
Credit.  Except as otherwise specifically set forth in the L/C
Agreement, nothing contained in this Agreement shall constitute a commitment on
your part further to extend or renew the Credit or otherwise to grant any
additional credit facilities to us or to any of our subsidiaries or other
affiliates.

     

    Governing
Law.  This Agreement shall be governed by the law of the
Commonwealth of Massachusetts and shall be construed as a sealed instrument
under such law.

     

    Execution.  This
Agreement may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed shall
be

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    deemed to
be an original and all of which taken together shall constitute one and the same
agreement.  Delivery of an executed counterpart of a signature page to
this Agreement by telecopier (or electronic mail (including in PDF format))
shall be effective as delivery of a manually executed counterpart of this
Agreement.

     

    [Remainder of Page Left Intentionally
Blank]

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    If you
agree to and accept the foregoing, please so indicate by executing and returning
to us the enclosed duplicate of this letter.

     

     

    Very
truly yours,

     

    BIOSCRIP,
INC.

     

    By:_____________________________

    Name:  Phillip
J. Keller

    Title:  Vice
President Finance

    

    

    
      	
               
      

            	
              Mailing
      address:

            

    

    

    
      	
               
      

            	
              100
      Clearbrook Road

            

    

    
      	
               
      

            	
              Elmsford,
      New York  10523

            

    

    
      	
               
      

            	
              Attention:
      Barry Posner

            

    

    

    
      	
               
      

            	
              Type
      of organization:

            

    

    
      	
               
      

            	
              Corporation

            

    

    
      	
               
      

            	
              Jurisdiction
      of organization:

            

    

    
      	
               
      

            	
              DE

            

    

    Organizational
identification number or statement that none exists

    
      	
               
      

            	
              FEIN:
      

            

    

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    ACCEPTED
and AGREED as of

    July 8,
2009

    

    

    BANK OF
AMERICA, N.A.

    

    

    By:                                                                

    Name:

    Title:Exhibit 10.17.1

 

AMENDMENT NO. 1 

TO AMENDED AND RESTATED CREDIT AGREEMENT

 

THIS
AMENDMENT NO. 1 TO AMENDED AND RESTATED CREDIT AGREEMENT (this “Amendment”) is
entered into as of November 19, 2008, between Southwest Water Company, a
Delaware corporation (“Borrower”) and Bank of America, N.A., as Administrative
Agent with reference to the Amended and Restated Credit Agreement dated as of February
15, 2008 (the “Credit Agreement”), among Borrower, the Lenders described
therein, and the Administrative Agent. Capitalized terms not otherwise defined
herein are used with the meanings set forth for those terms in the Credit
Agreement.

 

The
parties hereto hereby agree with reference to the following facts:

 

A.            Borrower
has publicly announced that it will delay filing its Form 10-Q and the related
financial statements for the fiscal quarter ended September 30, 2008, and that
it is reviewing prior period financial statements based upon its discovery that
certain accounting practices are not appropriate.

 

B.            Borrower’s
audit committee has concluded that the consolidated financial statements for
the years ended December 31, 2005, 2006 and 2007 and for each of the fiscal
quarters therein, as well as for the quarters ended March 31, 2008 and June 30,
2008 (the “Subject Financial Statements”), should no longer be relied upon and
will be restated.

 

C.            Borrower
has also announced that the accounting practices which give rise to the
requirement of restatement of the Subject Financial Statements and the delay in
the filing of its Form 10-Q for the fiscal quarter ended September 30, 2008
(the “Subject Accounting Practices”) relate to: 1) establishment of the rate of
depreciation of assets acquired; and 2) accounting for revenues and related
costs associated with the installation of water and sewer taps.

 

D.            As
a result of the foregoing, Borrower is in default of its obligations under the
Credit Agreement (collectively, the “Existing Defaults”) (i) pursuant to
Sections 8.01(c) of the Credit Agreement, as a result Borrower’s failure to
deliver financial statements prepared in accordance with GAAP as required by Section
6.01(a) and Section 6.01(b) of the Credit Agreement for each of the fiscal
quarters and fiscal years occurring since the Closing Date, and (ii) pursuant
to Section 8.01(d) of the Credit Agreement (in each case, solely by virtue of
Borrower’s representations that the Subject Financial Statements were prepared
in accordance with GAAP as of the date of their delivery, which have now proven
to be inaccurate as a result of the application of the Subject Accounting
Practices).

 

NOW,
THEREFORE, Borrower and Administrative Agent, acting with the consent of the
Required Lenders pursuant to Section 10.01 of the Credit Agreement, agree as
follows:

 

1.             Representations and Warranties. Borrower represents and warrants to Administrative
Agent and the Lenders that:

 

(a)           Borrower
has delivered to the Administrative Agent and the Lenders preliminary financial
statements for the fiscal quarter ended September 30, 2008 which, to the best
knowledge of Borrower as of November 10, 2008, fairly represent the
consolidated financial condition of Borrower as of that date and for the period
then ended, in all material respects, in accordance with GAAP.

 

1

 

(b)           In
connection with the preliminary financial statements referred to in clause (a) above,
Borrower has delivered a preliminary calculation of its compliance in respect
of the covenants set forth in Section 6.12 of the Credit Agreement, which is
accurate in all material respects as of the date hereof.

 

(c)           The
Existing Defaults and the correction of the Subject Accounting Practices will result in non-cash balance sheet adjustments
having an aggregate impact for the period between September 30, 2000 and September
30, 2008 which, to the best knowledge of Borrower, is not in excess of
$8,000,000, and will not have a material cash impact in the periods covered by
the Subject Financial Statements or subsequent periods.

 

(d)           Prior
to giving effect to this Amendment, no Default or Event of Default has occurred
and remains continuing other than the Existing Defaults; and

 

(e)           Except
as detailed in the recitals hereto in respect of the Existing Defaults, each of
the representations and warranties set forth in Article V of the Credit
Agreement are true and correct as of the date of this Amendment (other than
those representations which relate solely to a prior date, each of which was
true as of that date).

 

2.             Covenant Regarding Delivery of Corrected
Subject Financial Statements.
Borrower hereby agrees that it shall deliver corrected and restated versions of
each of the Subject Financial Statements, and will file its report on form 10-Q
for the period ended September 30, 2008, not later than March 31, 2009, and
that its failure to observe the covenant set forth in this Section shall
constitute an immediate Event of Default.

 

3.             Waivers. In reliance upon the agreements, representations and warranties set
forth below, the Lenders hereby waive the occurrence of each of the Existing
Defaults. The waivers set forth herein are one time waivers only and shall
apply solely to the Existing Defaults.

 

4.             Amendment to Definition. The definition of “EBITDA Coverage Ratio”
set forth in Section 1.01 of the Credit Agreement is hereby amended to read in
full as follows (with the added text in bold and italics for the convenience of
the reader):

 

“EBITDA
Coverage Ratio” means, as of the last day of any Fiscal Quarter, the ratio
of :

 

(a) EBITDA for the twelve
month period ended on that date minus Maintenance Capital Expenditures
made by Borrower and its Subsidiaries during that period (but not less than
$1,500,000) minus
income taxes paid in Cash by Borrower and its Subsidiaries with respect to that
period; to

 

(b) the sum of (i) all
Interest Expense paid or payable in cash during that period, plus (ii) scheduled
principal payments in respect of Total Indebtedness during that period (other
than any such payments due upon the final maturity of any obligation which is
Total Indebtedness), plus (iii) dividends paid in Cash on Equity
Interests of Borrower and its Subsidiaries to third parties during that period,
plus (iv) mandatory principal prepayments in respect of Subordinated
Indebtedness made pursuant to Section 7.11(b) during that period.

 

provided that in the case of any Material
Transaction, the calculation of the foregoing ratio shall be adjusted on a pro
forma basis to give effect to the results of operations of each person or
assets which are the subject of such Material Transaction.

 

2

 

5.             Amendment to Coverage Ratio. Section 6.12(b) of the Credit Agreement is hereby
amended to read in full as follows:

 

“(b)         EBITDA Coverage Ratio. Maintain an EBITDA
Coverage Ratio, of not less than (i) 1.25 to 1.00 as of the last day of each
Fiscal Quarter ending before June 30, 2009 and (ii) 1.30 to 1.00 as of the last
day of each Fiscal Quarter ending on June 30, 2009 and thereafter.”

 

6.             Conditions; Effectiveness. The effectiveness of this Amendment shall
be subject to the conditions precedent that, on or before the effective date of
this Amendment:

 

(a)             the Administrative Agent shall have received
a written consent in the form of Exhibit A hereto executed by each of the
parties thereto;

 

(b)             the Administrative Agent shall have received
written consent of the Required Lenders as required under Section 10.01 of the
Credit Agreement in the form of Exhibit B hereto; and

 

(c)             the Administrative Agent shall have received,
for the account of each Lender which has executed a consent hereto prior to
12:00 noon (Los Angeles time) on November 19, 2008 (or any extension of such
deadline announced at least 24 hours in advance of such deadline), an amendment
fee in the amount set forth in a letter agreement with the Administrative Agent
(the amount of which has been advised to the Lenders by the Administrative
Agent via the Intralinks system).

 

7.             Effectiveness of the Credit Agreement. Except as hereby expressly amended, the Credit
Agreement remains in full force and effect, and is hereby ratified and
confirmed in all respects.

 

8.             Counterparts. This Amendment may be executed in any
number of counterparts and all of such counterparts taken together shall be
deemed to constitute one and the same instrument.

 

[Signature Page Follows]

 

3

 

IN WITNESS WHEREOF, the parties hereto have caused
this Amendment to be duly executed and delivered as of the date first written
above.

 

	
   

  	
  SOUTHWEST
  WATER COMPANY,

  
	
   

  	
  a
  Delaware corporation,

  
	
   

  	
  as
  Borrower

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Walter
  J. Bench

  
	
   

  	
  Name:
  

  	
  Walter
  J. Bench

  
	
   

  	
  Title:

  	
  Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BANK
  OF AMERICA, N.A., 

  
	
   

  	
  as
  Administrative Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Ken Puro

  
	
   

  	
  Name:

  	
  Ken
  Puro

  
	
   

  	
  Title:

  	
  Vice
  President

  

 

4

 

Exhibit A to Amendment

 

CONSENT OF GUARANTORS

 

This
Consent of Guarantors is delivered with reference to (a) the Amended and
Restated Credit Agreement dated as of February 15, 2008 (as heretofore amended,
restated, extended, supplemented, or otherwise modified, the “Credit
Agreement”), among Southwest Water Company, a Delaware corporation
(“Borrower”), the lenders from time to time party thereto (collectively, the
“Lenders”), and Bank of America, N.A., as  Administrative Agent (“Administrative Agent”)
and (b) the Amended and Restated Continuing Guaranty dated as of February 15,
2008, made by each of the undersigned (as heretofore amended, restated,
extended, supplemented, or otherwise modified, the “Guaranty”). Capitalized
terms not otherwise defined herein are used with the meanings set forth for
those terms in the Credit Agreement.

 

Each
of the undersigned (i) consents to and approves Borrower’s execution and
delivery of the attached Amendment No. 1 to Amended and Restated Credit
Agreement (the “Amendment”), (ii) agrees that such Amendment does not and shall
not limit or diminish in any manner the obligations of the undersigned under
the Guaranty and that such obligations would not be limited or diminished in
any manner even if the undersigned had not executed this Consent of Guarantors,
(iii) reaffirms the Guaranty, and (iv) agrees that the Guaranty remains in full
force and effect and is hereby ratified and confirmed.

 

Aqua
Services, L.P. no longer exists as an entity having been merged with and into
SWWC Services, Inc. on or about July 15, 2008

 

Dated
as of November 18, 2008.

 

 

	
   

  	
  ECO
  RESOURCES, INC.,

  
	
   

  	
  a
  Texas corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name: 

  	
   

  
	
   

  	
  Title: 

  	
   

  
	
   

  	
   

  
	
   

  	
  OPERATIONS
  TECHNOLOGIES, INC.,

  
	
   

  	
  a
  Georgia corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  SWWC
  SERVICES, INC.,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  

 

5

 

Exhibit B to Amendment

 

CONSENT OF LENDER

 

Reference
is hereby made to the Amended and Restated Credit Agreement dated as of February
15, 2008 (as heretofore amended, restated, extended, supplemented, or otherwise
modified, the “Credit Agreement”), among Southwest Water Company, a Delaware
corporation (“Borrower”), the lenders from time to time party thereto
(collectively, the “Lenders”), and Bank of America, N.A., as Administrative
Agent (“Administrative Agent”). Capitalized terms not otherwise defined herein
are used with the meanings set forth for those terms in the Credit Agreement.

 

The
undersigned Lender hereby consents to the execution and delivery of an
Amendment No. 1 to Amended and Restated Credit Agreement by Administrative
Agent on its behalf, substantially in the form of the most recent draft thereof
presented to the undersigned Lender.

 

Dated
as of November 18, 2008.

 

 

	
   

  	
   

  
	
   

  	
  [Name
  of Lender]

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:
  

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  

 

1

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