Common use of Eligible Inventory Clause in Contracts

Eligible Inventory. The second sentence of the definition of Eligible Inventory is hereby deleted and replaced with the following: "Inventory located outside the United States of America that a Revolving Loan Borrower has acquired in accordance with the terms of the purchase arrangements between such Revolving Loan Borrower and a supplier and as to which such Revolving Loan Borrower has obtained legal title and that would otherwise be determined by Lender to be Eligible Inventory in all respects which is in transit to the premises of a Customs Broker in the United States of America which is an Eligible Inventory Location or such other Eligible Inventory Location in the United States of America; provided, that, (a) Lender has a first priority perfected security interest in and lien upon such Inventory, (b) Lender has possession of not less than two (2) of a total of three (3) originals of the documents of title with respect to such Inventory and all of the terms and conditions of Section 8 of the Twenty-Seventh Amendment to Loan Agreement, dated as of October 31, 2003, among Lender, Borrowers and Guarantors shall have been satisfied, (c) Lender shall have received (i) a Notification and Acknowledgment Agreement, duly authorized, executed and delivered by either or both of the Customs Broker and Freight Forwarder, as the case may be, handling the shipping and delivery of such Inventory, (ii) a copy of the certificate of marine cargo insurance in connection therewith in which it has been named as an additional insured and loss payee in a manner acceptable to Lender, and (iii) a copy of the invoice, packing slip and manifest with respect thereto, (d) such Inventory is not subject to any Letter of Credit Accommodation, (e) the aggregate amount of the Value of such Inventory that is deemed to be Eligible Inventory shall not at any time exceed $1,000,000, and (f) such Inventory shall not have been in transit for more than sixty (60) days."

Eligible Inventory. The second sentence of the definition of Eligible Inventory owned by a Borrower that is hereby deleted and replaced with the following: "Inventory located outside the United States of America that a Revolving Loan Borrower has acquired deemed by Agent, in accordance with the terms of the purchase arrangements between such Revolving Loan Borrower and a supplier and as to which such Revolving Loan Borrower has obtained legal title and that would otherwise be determined by Lender its Permitted Discretion, to be Eligible Inventory; provided that, no Inventory in all respects which is in transit to the premises of a Customs Broker in the United States of America which is an shall be Eligible Inventory Location or such other Eligible Inventory Location in the United States of America; provided, that, unless it (a) Lender has is located at a first priority perfected security interest Borrower’s principal place of business or any other facility storing cased goods and/or bulk wine that complies with such Borrower’s related representations and warranties contained in and lien upon such Inventorythis Agreement, (b) Lender is not used, returned, obsolete, spoiled, inadequately sealed, packaged or stored, or otherwise unmerchantable, consigned, demonstrative or custom inventory, supplies (other than bulk wine), packing or shipping materials, (c) is bulk wine at cost or wholesale “FOB” cased wine, that is not older than three years following December 31 of its vintage year for white wine and that is either (i) not older than four years following December 31 of its vintage year for red wine or (ii) is four years or older following December 31 of its vintage year for red wine but does not exceed $5,000,000 in the aggregate in Value of such red wine; (d) is not held on consignment, nor subject to any deposit or down payment; (e) meets all standards imposed by any Governmental Authority; (f) conforms with the covenants and representations herein; (g) is subject to Agent’s duly perfected, first priority Lien, and no other Lien (other than (x) any Lien permitted pursuant to PACA or any other similar agricultural law or regulation with respect to which Agent has established a Grower’s Reserve, (y) non-consensual Permitted Liens arising by operation of law which are junior to the Agent’s Lien, or (z) any other Lien with respect to which Agent has establish an appropriate reserve its Permitted Discretion); (h) is within the continental United States, is not in transit (except (x) between locations of Borrowers, or (y) to another location disclosed to Agent with respect to which Agent has received an appropriate Lien Waiver or established an appropriate reserve in its Permitted Discretion, and is not consigned to any Person; (i) is not subject to any warehouse receipt or negotiable Document; (j) is not subject to any License or other arrangement that restricts such Borrower’s or Agent’s right to dispose of such Inventory, unless Agent has received an appropriate Lien Waiver or established an appropriate reserve in its Permitted Discretion; (k) is not located on leased premises or in the possession of not less than two a warehouseman, processor, repairman, mechanic, shipper, freight forwarder or other Person, unless the lessor or such Person has delivered a Lien Waiver or an appropriate Rent and Charges Reserve has been established; (2l) is reflected in the details of a total of three current perpetual inventory report; or (3m) originals of the documents of title if it is Inventory owned by a target acquired in connection with a Permitted Acquisition, an appraisal and field examination with respect to such Inventory and all of the terms and conditions of Section 8 of the Twenty-Seventh Amendment to Loan Agreement, dated as of October 31, 2003, among Lender, Borrowers and Guarantors shall have been satisfied, completed and are reasonably satisfactory to Agent (c) Lender shall have received (i) a Notification which appraisal and Acknowledgment Agreement, duly authorized, executed and delivered by either or both of field examination may be conducted prior to the Customs Broker and Freight Forwarder, as the case may be, handling the shipping and delivery closing of such Inventory, (ii) a copy of the certificate of marine cargo insurance in connection therewith in which it has been named as an additional insured and loss payee in a manner acceptable to Lender, and (iii) a copy of the invoice, packing slip and manifest with respect thereto, (d) such Inventory is not subject to any Letter of Credit Accommodation, (e) the aggregate amount of the Value of such Inventory that is deemed to be Eligible Inventory shall not at any time exceed $1,000,000, and (f) such Inventory shall not have been in transit for more than sixty (60) daysPermitted Acquisition)."

Eligible Inventory. The second sentence of the definition of With respect to S&H, finished goods owned by such Borrower; PROVIDED that Eligible Inventory shall not include any inventory (i) held on consignment, or not otherwise owned by such Borrower, or of a type no longer sold by such Borrower; (ii) which has been returned by a customer or is hereby deleted damaged or subject to any legal encumbrance other than Permitted Liens; (iii) which is not in the possession of such Borrower unless (A) such inventory is subject to a documentary letter of credit issued by a lender approved by the Administrative Agent and replaced with the following: "Administrative Agent has possession of and a first priority, perfected security interest in the documents of title relating to such inventory, (B) such inventory is in transit from one Permitted Inventory located outside Location of such Borrower within the United States of America that a Revolving Loan to another Permitted Inventory Location of such Borrower has acquired in accordance with the terms of the purchase arrangements between such Revolving Loan Borrower and a supplier and as to which such Revolving Loan Borrower has obtained legal title and that would otherwise be determined by Lender to be Eligible Inventory in all respects which is in transit to the premises of a Customs Broker in within the United States of America or (C) the aggregate gross book value of such inventory does not exceed $6,000,000 with respect to inventory located at such Borrower's distribution center and warehouse located at 8145 Xxxxxx Xxxxx, Florence, Kentucky and operated by The Discovery Channel Store, Inc. pursuant to the Cooperation and Services Agreement between The Discovery Channel Store, Inc. and such Borrower, and $1,750,000 with respect to all other inventory locations and the Administrative Agent has received (x) a waiver in form and substance satisfactory to the Administrative Agent from the possessor of such inventory, (y) financing statements in form and substance satisfactory to the Administrative Agent executed and delivered by such Borrower as secured party/bailxx xxx the possessor of such inventory as debtor/bailee, for filing in the appropriate jurisdictions PROVIDED, HOWEVER, that the Administrative Agent may in its sole discretion, waive the foregoing requirement with respect to financing statements, and (z) an assignment in form and substance satisfactory to the Administrative Agent by the secured party/bailxx xx the Administrative Agent of the aforementioned financing statements; (iv) in which the Administrative Agent does not have a valid and perfected first priority security interest; (v) which has been shipped to a customer of such Borrower regardless of whether such shipment is on a consignment basis; (vi) which is an Eligible not located at a Permitted Inventory Location of such Borrower within the United States of America, unless (A) such inventory is subject to a documentary letter of credit issued by a lender approved by the Administrative Agent and the Administrative Agent has possession of and a first priority, perfected security interest in the documents of title relating to such inventory or (B) such other Eligible inventory is in transit from one Permitted Inventory Location in of such Borrower within the United States of America to another Permitted Inventory Location of such Borrower within the United States of America; provided, that, (avii) Lender which the Majority Lenders reasonably deem to be obsolete or not marketable; (viii) which is located in California unless the Administrative Agent has received a first priority perfected security interest legal opinion in form and lien upon such Inventory, (b) Lender has possession substance satisfactory to the Administrative Agent that the Loan Documents comply with the provisions of not less than two (2ss.9102(5)(b) of a total the Uniform Commercial Code as in effect in California, or (ix) which consists of three (3) originals of the documents of title with respect to such Inventory and all of the terms and conditions of Section 8 of the Twenty-Seventh Amendment to Loan Agreement, dated as of October 31, 2003, among Lender, Borrowers and Guarantors shall have been satisfied, (c) Lender shall have received (i) a Notification and Acknowledgment Agreement, duly authorized, executed and delivered by either or both of the Customs Broker and Freight Forwarder, as the case may be, handling the shipping and delivery of such Inventory, (ii) a copy of the certificate of marine cargo insurance in connection therewith in which it has been named as an additional insured and loss payee in a manner acceptable to Lender, and (iii) a copy of the invoice, packing slip and manifest with respect thereto, (d) such Inventory is not subject to any Letter of Credit Accommodation, (e) the aggregate amount of the Value of such Inventory that is deemed to be Eligible Inventory shall not at any time exceed $1,000,000, and (f) such Inventory shall not have been in transit for more than sixty (60) dayslive plantings."

Eligible Inventory. The second sentence of the definition of Eligible Inventory is hereby deleted and replaced with the following: "Inventory located outside the United States of America owned by a Borrower that a Revolving Loan Borrower has acquired Lender, in accordance with the terms of the purchase arrangements between such Revolving Loan Borrower and a supplier and as to which such Revolving Loan Borrower has obtained legal title and that would otherwise be determined by Lender its Permitted Discretion, deems to be Eligible Inventory. Without limiting the foregoing, no Inventory in all respects which is in transit to the premises of a Customs Broker in the United States of America which is an shall be Eligible Inventory Location or such other Eligible Inventory Location in the United States of America; provided, that, unless it (a) Lender has a first priority perfected security interest in is finished goods or raw materials and lien upon such Inventorynot work-in-process, packaging or shipping materials, labels, samples, display items, bags, replacement parts or manufacturing supplies; (b) Lender has possession of is not less than two (2) of a total of three (3) originals of the documents of title with respect held on consignment, nor subject to such Inventory and all of the terms and conditions of Section 8 of the Twenty-Seventh Amendment to Loan Agreement, dated as of October 31, 2003, among Lender, Borrowers and Guarantors shall have been satisfied, any deposit or down payment; (c) Lender shall have received is in new and saleable condition and is not damaged, defective, shopworn or otherwise unfit for sale; (d) is not slow-moving, perishable, obsolete or unmerchantable, and does not constitute returned or repossessed goods; (e) meets all standards imposed by any governmental authority, has not been acquired from an entity subject to any sanction or on any specially designated nationals list maintained by OFAC, and does not constitute hazardous materials under any environmental law; (f) conforms with the covenants and representations herein; (g) is subject to Lender’s duly perfected, first priority Lien, and no other Lien; (h) is within the continental United States, is not in transit except between locations of Borrowers, and is not consigned to any Person; (i) a Notification and Acknowledgment Agreement, duly authorized, executed and delivered by either or both of the Customs Broker and Freight Forwarder, as the case may be, handling the shipping and delivery of such Inventory, (ii) a copy of the certificate of marine cargo insurance in connection therewith in which it has been named as an additional insured and loss payee in a manner acceptable to Lender, and (iii) a copy of the invoice, packing slip and manifest with respect thereto, (d) such Inventory is not subject to any Letter warehouse receipt or negotiable Document; (j) is not subject to any License or other arrangement that restricts any Borrower’s or Lender’s right to dispose of Credit Accommodationsuch Inventory, unless Lender has received an appropriate Lien Waiver; (k) is located (i) on a premises containing Eligible Inventory with an aggregate Value of at least $50,000, (eii) if such Inventory is located on a leased premises or in the possession of a warehouseman, processor, repairman, mechanic, shipper, freight forwarder or other Person, such lessor or such other Person has delivered a Lien Waiver or an appropriate Reserve has been established, provided, that, so long as Borrowers maintain Inventory with an aggregate amount of the Value of less than $60,000 at the Lambda Warehouse, no Lien Waiver shall be required for such location, or (iii) if such Inventory that is deemed located on a premises owned by Borrowers and such premises is subject to be Eligible Inventory shall not at a mortgage, the mortgagee of such premises has delivered a mortgagee waiver in form and substance satisfactory to Lender. Enforcement Action: any time exceed $1,000,000, and (f) such Inventory shall not have been in transit for more than sixty (60) daysaction to enforce any Obligations or Loan Documents or to realize upon any Collateral."

Eligible Inventory. The second sentence (i) Keep all Eligible Inventory only at the locations in the United States; and (ii) keep all Eligible Inventory only at locations identified on Schedule E-3 (as amended pursuant to Section 5.2 (and Schedule 5.2 thereof), (iii) keep all Eligible Inventory fully covered at not less than their book value under Borrowers’ “spares” all risk insurance policies, and (iv) keep all Eligible Inventory from being installed or held for installation on an Aircraft or Engine, or otherwise held, by, for, or on behalf an air carrier as defined in 14 CFR 49. Each Borrower shall, and shall cause each other Spare Parts Loan Party to, also keep all Spare Parts that are Collateral and all Eligible Inventory (except to the extent such Spare Parts are the subject of a Permitted Spare Parts Installation permitted pursuant to Section 5.19(e)(ii)) in fenced areas with readily visible signage indicating that the Spare Parts located at such location are subject to a Lien in favor of Agent. (b) Keep all Spare Parts and other Inventory (except to the extent the subject of a Permitted Spare Parts Installation permitted pursuant to Section 5.19(e)) of the definition of Spare Parts Loan Parties not designated as Eligible Inventory only at the locations identified on Schedule E-3 (as amended pursuant to Section 5.2 (and Schedule 5.2 thereof) and not permit any Spare Parts or other Inventory to be located at the premises of or otherwise put into the possession or control of any bailee, warehouseman, FAA repair station, servicer, mechanic, vendor, supplier, or other Person unless a Collateral Access Agreement has been put in place with such Person), provided that: (i) Borrowers may amend Schedule E-3 pursuant to Section 5.2 (and Schedule 5.2 thereof) to add additional locations so long as: (A) such amendment occurs by written notice to Agent not less than 10 Business Days prior to the date on which any Spare Parts are moved to such new location, and (B) such new location is hereby deleted within the United States; (ii) any Spare Part that is not Eligible Inventory may be transported to or from, or be in the possession of or under the control of, a bailee, warehouseman, FAA repair station, overhaul or maintenance servicer, mechanic, or similar Person for purposes of repair in the ordinary course of Borrowers’ business without a Collateral Access Agreement so long as either (A) no Event of Default has occurred and replaced is continuing or would result therefrom, or (B) the aggregate book value of all such Spare Parts in the possession of or under the control of all such Persons, in the aggregate, does not exceed $2,000,000; (iii) so long as such transit is in the United States and in the ordinary course of Borrowers’ business, the Spare Parts Loan Parties may move Spare Parts that are not Eligible Inventory to any location identified on Schedule E-3; (iv) so long as (A) no Event of Default has occurred and is continuing or would result therefrom, (B) such transit is in the ordinary course of Borrowers’ business, and (C) the aggregate book value of all Spare Parts moved to all such foreign locations, in the aggregate, does not exceed $2,500,000 (provided that Spare Parts at such foreign locations shall not count against the dollar amount of Spare Parts permitted to be maintained with third parties pursuant to Section 5.19(b)(ii)(B)), the following: "Spare Parts Loan Parties may move Spare Parts that are not Eligible Inventory located to any location outside the United States (including locations outside the United States where such Spare Parts are in the possession of America or under the control of a bailee, warehouseman, FAA repair station, overhaul or maintenance servicer, mechanic, or similar Person); (v) so long as such transit is in the ordinary course of Borrowers’ business, the Spare Parts Loan Parties may move Spare Parts that are not Eligible Inventory from any location outside the United States to any other location outside the United States; (vi) so long as such transit is in the ordinary course of Borrowers’ business, the Spare Parts Loan Parties may move Spare Parts that are not Eligible Inventory to the location of Aircraft, Engines, flight simulators or other Equipment to complete a Revolving Permitted Spare Parts Installation that is permitted pursuant to Section 5.19(e); and (vii) the Spare Parts Loan Borrower has acquired Parties may move Spare Parts that are not Eligible Inventory pursuant to pool, exchange or lease transactions permitted pursuant to Section 5.19(e). (c) Maintain in accordance effect a Spare Parts Tracking System. (d) Maintain, with respect to Spare Parts, all records, logs, serviceability tags and other documents and materials required by applicable law, including the terms of FARs, or by the purchase arrangements between such Revolving Spare Parts Loan Borrower and a supplier and as to which such Revolving Loan Borrower has obtained legal title and that would otherwise be determined by Lender Parties’ Maintenance Program. (e) Not permit any Spare Parts to be leased, sold, exchanged, attached or installed on any Aircraft, Engine, flight simulator, or other Equipment, or otherwise disposed of; provided, however, that (i) so long as no Overadvance is outstanding or would result therefrom (after having removed any such Eligible Inventory from the Borrowing Base), the Spare Parts Loan Parties may sell Spare Parts that are not Eligible Inventory in all respects which is in transit to the premises ordinary course of a Customs Broker in the United States of America which is an Eligible Inventory Location or such other Eligible Inventory Location in the United States of America; provided, that, (a) Lender has a first priority perfected security interest in and lien upon such Inventory, (b) Lender has possession of not less than two (2) of a total of three (3) originals of the documents of title with respect to such Inventory and all of the terms and conditions of Section 8 of the Twenty-Seventh Amendment to Loan Agreement, dated as of October 31, 2003, among Lender, Borrowers and Guarantors shall have been satisfied, (c) Lender shall have received (i) a Notification and Acknowledgment Agreement, duly authorized, executed and delivered by either or both of the Customs Broker and Freight Forwarder, as the case may be, handling the shipping and delivery of such InventoryBorrowers’ business, (ii) a copy of so long as no Overadvance is outstanding or would result therefrom, Borrowers may make Permitted Spare Parts Installations with Eligible Inventory, (iii) the certificate of marine cargo insurance in connection therewith in which it has been named as an additional insured and loss payee in a manner acceptable to LenderSpare Parts Loan Parties may make Permitted Spare Parts Installations with Spare Parts (other than Eligible Inventory), and (iiiiv) a copy of the invoice, packing slip and manifest with respect theretoto Spare Parts that are not Eligible Inventory, the Spare Parts Loan Parties may pool, exchange, or lease such Spare Parts in the ordinary course of business so long as (dx) such Inventory no Event of Default has occurred and is not subject to any Letter of Credit Accommodation, continuing or would result therefrom and (ey) the aggregate amount book value of all such Spare Parts, in the Value of such Inventory that is deemed to be Eligible Inventory shall aggregate, does not at any time exceed $1,000,000, and . (f) such Each Borrower, on behalf of each of its Subsidiaries, hereby waives any and all rights that it has or may have in the future to assert or claim against Agent or any of the Lenders or any transferee pursuant to the exercise of remedies under any of the Loan Documents, any mechanic’s, repairer’s, servicer’s, xxxxxx’x or other Lien against any Collateral, including any Spare Parts, Engines, or Aircraft constituting Collateral. Not permit any of its Spare Parts to be located at the premises of or otherwise put into the possession or control of any bailee, warehouseman, FAA repair station, servicer, mechanic, vendor, supplier, or similar Person except: that any Spare Part that is not an Eligible Inventory shall not have been may be in transit for more than sixty the possession of or under the control of a bailee, warehouseman, FAA repair station, overhaul or maintenance servicer, mechanic, or similar Person to the extent expressly permitted by (60but without duplication of) daysSection 5.19(b)."”

Eligible Inventory. The second sentence term ELIGIBLE INVENTORY means, at any date of determination thereof, the aggregate amount, as at such time, of INVENTORY owned by any or all of the definition BORROWERS which is acceptable to the LENDER to be included in the calculation of Eligible Inventory is hereby deleted the BORROWING BASE. The criteria for eligibility may be fixed and replaced with revised by the following: "Inventory located outside the United States of America that a Revolving Loan Borrower has acquired LENDER from time to time in its reasonable discretion in accordance with its internal credit policies, and any such determinations by the terms of LENDER will be promptly communicated to the purchase arrangements between such Revolving Loan Borrower and a supplier and as to which such Revolving Loan Borrower has obtained legal title and that would otherwise BORROWERS. INVENTORY in no event shall be determined by Lender deemed to be Eligible Inventory in all respects which is in transit to the premises of a Customs Broker in the United States of America which is an Eligible Inventory Location or such other Eligible Inventory Location in the United States of America; provided, that, ELIGIBLE INVENTORY unless: (a) Lender the LENDER has a first priority perfected security interest in and lien upon such Inventory, its INVENTORY; (b) Lender has possession it is normally and currently saleable in the ordinary course of business of any or all of the BORROWERS; (c) it is not less than two work in process; (2d) it is located on the premises of a total BORROWER; (e) it does not consist of three defective, damaged, obsolete, returned or repossessed items of INVENTORY or used goods or goods taken in trade; (3f) originals it does not consist of slow moving items or items determined by the LENDER in its sole discretion to be stale or dated merchandise; (g) it does not consist of packing or packaging materials, general supplies, catalogs, promotion materials, specialty inventory, inventory on loan to any PERSON, items used as demonstrators, prototypes, or salesman's samples; (h) it does not consist of an item consigned to any or all of the documents of title BORROWERS or with respect to such Inventory and which any PERSON claims a lien; (i) it has not been consigned by any or all of the terms BORROWERS to a consignee; (j) it is not held by any PERSON (other than a BORROWER) or located upon any premises not owned in fee simple by a BORROWER unless such PERSON or the owner of such premises has executed a lien waiver agreement in form and conditions substance satisfactory to the LENDER; and (k) it has not been deemed unmerchantable or otherwise unsatisfactory by the LENDER for any reason, in the LENDERS sole discretion, by written notice to the BORROWERS. The value of Section 8 of any INVENTORY deemed to meet the Twenty-Seventh Amendment to Loan Agreement, dated as of October 31, 2003, among Lender, Borrowers and Guarantors criteria for ELIGIBLE INVENTORY shall have been satisfied, (c) Lender shall have received be determined at the least of: (i) a Notification and Acknowledgment Agreement, duly authorized, executed and delivered by either the BORROWERS net purchase or both of the Customs Broker and Freight Forwarder, as the case may be, handling the shipping and delivery of such Inventory, manufacturing cost; (ii) a copy of the certificate of marine cargo insurance in connection therewith in which it has been named as an additional insured and loss payee in a manner acceptable to Lender, and lowest then-existing market price; (iii) a copy the BORROWERS lowest selling price, less estimated expenses for packing, selling and delivery; or (iv) any price ceiling which may be established by governmental order, regulation, or restriction. The LENDER shall be the discretionary judge of the invoicevalue of any INVENTORY, packing slip and manifest with respect theretobased upon such information as it deems, (d) such Inventory is not subject to any Letter of Credit Accommodationin its reasonable discretion, (e) the aggregate amount of the Value of such Inventory that is deemed to be Eligible Inventory shall not at any time exceed $1,000,000, and (f) such Inventory shall not have been relevant or applicable in transit for more than sixty (60) daysmaking that determination."

Eligible Inventory. The second sentence of the definition of Eligible Inventory is hereby deleted and replaced with the following: "Inventory located outside the United States of America owned by Borrower that a Revolving Loan Borrower has acquired Agent, in accordance with the terms of the purchase arrangements between such Revolving Loan Borrower and a supplier and as to which such Revolving Loan Borrower has obtained legal title and that would otherwise be determined by Lender its discretion, deems to be Eligible Inventory in all respects which is in transit to Inventory. Without limiting the premises of a Customs Broker in the United States of America which is an Eligible Inventory Location or such other Eligible Inventory Location in the United States of America; provided, thatforegoing, (a) Lender has a first priority perfected security interest in and lien upon such Inventory, (b) Lender has possession of not less than two (2) of a total of three (3) originals of the documents of title with respect to such no Inventory and all of the terms and conditions of Section 8 of the Twenty-Seventh Amendment to Loan Agreement, dated as of October 31, 2003, among Lender, Borrowers and Guarantors shall have been satisfied, (c) Lender shall have received be Eligible Inventory unless it (i) a Notification is finished goods (other than food, magazines or books), and Acknowledgment Agreementis not raw materials, duly authorizedwork-in-process, executed and delivered by either packaging or both of the Customs Broker and Freight Forwardershipping materials, as the case may belabels, handling the shipping and delivery of such Inventorysamples, display items, bags, replacement parts or manufacturing supplies; (ii) a copy of the certificate of marine cargo insurance in connection therewith in which it has been named as an additional insured and loss payee in a manner acceptable is not held on consignment, nor subject to Lender, and any deposit or down payment; (iii) a copy is in new and saleable condition and is not damaged, defective, shopworn or otherwise unfit for sale; (iv) is not slow-moving, defective, obsolete or unmerchantable, and does not constitute returned or repossessed goods; (v) meets all standards imposed by any Governmental Authority, does not constitute hazardous materials under any Environmental Law, and has not been produced in violation of the invoice, packing slip and manifest with respect thereto, FLSA (das may be reasonably determined by Agent) if such violation could reasonably be expected to result in any prohibition on the sale of such Inventory by Borrower or Agent; (vi) conforms with the covenants and representations herein; (vii) is subject to Agent’s duly perfected, first priority Lien, and no other Lien; (viii) is within the continental United States or Canada, is not in transit except between locations of Borrower, and is not consigned to any Person; (ix) is not subject to any Letter of Credit Accommodation, warehouse receipt or negotiable Document; (ex) the aggregate amount of the Value is not subject to any License or other arrangement that restricts Borrower’s or Agent’s right to dispose of such Inventory that Inventory, unless Agent has received an appropriate Lien Waiver; (xi) is deemed to be Eligible Inventory shall not at any time exceed $1,000,000located on leased premises or in the possession of a warehouseman, processor, repairman, mechanic, shipper, freight forwarder or other Person, unless the lessor or such Person has delivered a Lien Waiver or an appropriate Collateral Access Reserve and/or Charges Reserve has been established, as appropriate; and (fxii) such Inventory shall not have been is reflected in transit for more than sixty (60) daysthe details of a current perpetual inventory report."

Eligible Inventory. The second sentence Eligible Inventory" shall consist of all of the definition of Eligible Inventory is hereby deleted and replaced with Inventory, except the following: "(i) Inventory located outside which is damaged, obsolete, not in good condition, or not currently usable or currently saleable in the United States ordinary course of America that a Revolving Loan Borrower has acquired the Borrower's business as determined by the Agent; (ii) Inventory which the Agent determines, or which in accordance with the terms Borrower's customary business practices, is unacceptable due to age, type, category and/or quantity, including, without limitation, any Inventory which is in excess of a one (1) year's supply or is otherwise slow-moving; (iii) Inventory with respect to which the Agent does not have a first and valid, fully perfected Lien; (iv) Inventory consisting of packaging or supplies; (v) Inventory in the possession of the Borrower but not owned by the Borrower; (vi) Inventory produced in violation of the Fair Labor Standards Act and subject to the so-called "hot goods" provision contained in Title 29 U.S.C. ss.215(a)(1); (vii) Inventory with respect to which any disclosure is required in the applicable Monthly Report or Borrowing Base Certificate in accordance with subsection 3.11; (viii) Inventory which is on consignment or is located at a place other than the places of business and collateral locations of the Borrower listed on Exhibit 8.6; provided that, subject to subsection 7.9, in the case of leased or bailment locations listed on Exhibit 8.6, no Inventory located at any such location shall be "Eligible Inventory" until the applicable landlord or bailee has executed a lien waiver in form and substance satisfactory to the Agent) including, without limitation, Inventory in transit; (ix) Inventory consisting of finished goods which do not meet the specifications of the purchase arrangements between such Revolving Loan Borrower and a supplier and as to order for which such Revolving Loan Inventory was produced; and (x) Inventory which fails to meet the standards imposed by any governmental agency, or department or division thereof, having regulatory authority over such goods, or their use and/or sale. In the event that the Borrower has obtained legal title and becomes aware that would otherwise be determined by Lender Inventory with a material value previously scheduled in a Monthly Report or Borrowing Base Certificate ceases to be Eligible Inventory in all respects which is in transit to the premises of a Customs Broker in the United States of America which is an Eligible Inventory Location or such other Eligible Inventory Location in the United States of America; provided, that, (a) Lender has a first priority perfected security interest in and lien upon such Inventory, (b) Lender has possession of not less than two (2) of a total of three (3) originals of the documents of title with respect to such Inventory and all of Borrower shall notify the terms and conditions of Section 8 of the Twenty-Seventh Amendment to Loan Agreement, dated as of October 31, 2003, among Lender, Borrowers and Guarantors shall have been satisfied, (c) Lender shall have received (i) a Notification and Acknowledgment Agreement, duly authorized, executed and delivered by either or both of the Customs Broker and Freight Forwarder, as the case may be, handling the shipping and delivery of such Inventory, (ii) a copy of the certificate of marine cargo insurance in connection therewith in which it has been named as an additional insured and loss payee in a manner acceptable to Lender, and (iii) a copy of the invoice, packing slip and manifest with respect thereto, (d) such Inventory is not subject to any Letter of Credit Accommodation, (e) the aggregate amount of the Value of such Inventory that is deemed to be Eligible Inventory shall not at any time exceed $1,000,000, and (f) such Inventory shall not have been in transit for more than sixty (60) daysAgent thereof immediately."

Eligible Inventory. The second sentence of the definition of Eligible Inventory is hereby deleted and replaced with the following: "Inventory located outside the United States of America owned by a Borrowing Base Obligor that a Revolving Loan Borrower has acquired Agent, in accordance with the terms of the purchase arrangements between such Revolving Loan Borrower and a supplier and as to which such Revolving Loan Borrower has obtained legal title and that would otherwise be determined by Lender its discretion, deems to be Eligible Inventory. Without limiting the foregoing, no Inventory in all respects which is in transit to the premises of a Customs Broker in the United States of America which is an shall be Eligible Inventory Location or such other Eligible Inventory Location in the United States of America; provided, that, unless it (a) Lender has a first priority perfected security interest in is finished goods, “brite” goods (finished goods which have not been labeled), semi-finished frozen goods or can, can stock and lien upon such Inventoryplastic container raw materials (other than Cold Storage Pears), and not work-in-process (other than “brite” goods and semi-finished frozen goods); (b) Lender has possession of is not less than two (2) of a total of three (3) originals of the documents of title with respect held on consignment, nor subject to such Inventory and all of the terms and conditions of Section 8 of the Twenty-Seventh Amendment to Loan Agreement, dated as of October 31, 2003, among Lender, Borrowers and Guarantors shall have been satisfied, any deposit or down payment; (c) Lender shall have received is in good and saleable condition and is not damaged, defective, shopworn or otherwise unfit for sale; (d) is not slow-moving (i.e., older than two pack seasons), obsolete or unmerchantable, and does not constitute returned or repossessed goods, unless such goods are suitable for resale; (e) meets all standards imposed by any Governmental Authority, has not been acquired from a Person subject to any Sanction or on any specially designated nationals list maintained by OFAC, and does not constitute hazardous materials under any Environmental Law; (f) conforms with the covenants and representations herein; (g) is subject to Agent’s duly perfected, first priority Lien, except a Permitted Lien; (h) is within the continental United States or Canada, is not in transit except between locations of Borrowing Base Obligors, and is not consigned to any Person; (i) a Notification and Acknowledgment Agreement, duly authorized, executed and delivered by either or both of the Customs Broker and Freight Forwarder, as the case may be, handling the shipping and delivery of such Inventory, (ii) a copy of the certificate of marine cargo insurance in connection therewith in which it has been named as an additional insured and loss payee in a manner acceptable to Lender, and (iii) a copy of the invoice, packing slip and manifest with respect thereto, (d) such Inventory is not subject to any Letter warehouse receipt or negotiable Document; (j) is not subject to any License or other arrangement that restricts such Borrowing Base Obligor’s or Agent’s right to dispose of Credit Accommodationsuch Inventory, unless Agent has received an appropriate Lien Waiver (other than in respect of Excluded License Agreements); (k) (i) is not located on leased premises or in the possession of a warehouseman, processor, repairman, mechanic, shipper, freight forwarder or other Person, unless the lessor or such Person has delivered a Lien Waiver or an appropriate Rent and Charges Reserve has been established, (eii) is not located at a facility owned by a Borrowing Base Obligor subject to a mortgage unless the aggregate mortgagee of such Real Estate shall have entered into a Mortgagee Consent, or (iii) is located on leased premises or in the possession of a warehouseman, processor, repairman, mechanic, shipper, freight forwarder or is located at a facility owned by a Borrowing Base Obligor but subject to a mortgage and for which a Lien Waiver or Mortgagee Consent, as applicable, has not been obtained, provided that the amount of the Value of such Inventory that is deemed to may be Eligible Inventory shall under this clause (iii) of this clause (k) will not at any time exceed $1,000,00010% of all Inventory of the Borrowing Base Obligors in the aggregate, subject to the maintenance of Rent and Charges Reserves with respect thereto, it being understood, however, that the Agent anticipates, without limiting the generality of the Agent’s discretion with respect to the maintenance of additional Rent and Charges Reserves, that the Rent and Charges Reserves will include an amount equal to the amount of rent, mortgage payments, fees and equivalent amounts that are payable by the Borrowing Base Obligors for a period of 90 days with respect to any location (A) referenced in this clause (iii) of this clause (k) and (fB) such for which the landlord, warehouseman or mortgagee with respect thereto has not waived or subordinated any rights it may have in the Collateral to the rights of the Agent; (l) has not been sold to any Borrowing Base Obligor; (m) was not purchased from a Person that has a pending PACA Claims asserted against a Borrowing Base Obligor or any Subsidiary at the time that the Eligible Inventory shall is being determined; and (n) is not have been subject to a Lien in transit for more than sixty (60) daysfavor of a seller of farm products or a secured creditor of a seller of farm products pursuant to the Food Security Act."

Eligible Inventory. The second sentence following shall constitute the Eligibility Criteria for acceptance of Inventory for inclusion in the Borrowing Base. All Inventory of the definition of Eligible Inventory is hereby deleted and replaced with Loan Parties, valued at the following: "Inventory located outside the United States of America that a Revolving Loan Borrower has acquired lower cost or market in accordance with the terms GAAP, but excluding any Inventory having any of the purchase arrangements between such Revolving Loan Borrower and a supplier and as to which such Revolving Loan Borrower has obtained legal title and that would otherwise be determined by Lender to be Eligible Inventory in all respects which is in transit to the premises of a Customs Broker in the United States of America which is an Eligible Inventory Location or such other Eligible Inventory Location in the United States of America; provided, that, following characteristics: (a) Lender has a first priority perfected security interest in and lien upon such InventoryInventory that is in-transit; located at any warehouse, job site or located on any other premises that may be subject to the Lien of any person other than the Collateral Agent; (b) Lender has possession of Inventory that is otherwise not less than two (2) of subject to a total of three (3) originals of duly perfected first priority Lien in the documents of title with respect to such Inventory and all of the terms and conditions of Section 8 of the Twenty-Seventh Amendment to Loan Agreement, dated as of October 31, 2003, among Lender, Borrowers and Guarantors shall have been satisfied, Collateral Agent’s favor; (c) Lender shall have received Inventory that is subject to (ix) a Notification Lien in favor of any Person other than the Lender other than the ABDC Lien that is subject to the ABDC Intercreditor Agreement and Acknowledgment Agreement, duly authorized, executed and delivered by either (y) the Lien of a supplier or both similar creditor of any of the Customs Broker and Freight Forwarder, as the case may be, handling the shipping and delivery of such Inventory, (ii) Loan Parties that is subject to a copy of the certificate of marine cargo insurance in connection therewith in which it has been named as an additional insured and loss payee in a manner acceptable to Lender, and (iii) a copy of the invoice, packing slip and manifest with respect thereto, Supplier Intercreditor Agreement; (d) such Inventory is not covered by any negotiable or non-negotiable warehouse receipt, xxxx of lading or other document of title; on consignment from any Person; on consignment to any Person or subject to any Letter of Credit Accommodation, bailment unless such consignee or bailee has executed an agreement with the Lender; (e) Supplies, packaging, parts or sample Inventory, or customer supplied parts or Inventory; (f) Work-in-process Inventory; (g) Inventory that is damaged, defective, obsolete, slow moving or not currently saleable in the aggregate normal course of Borrower’s operations, or the amount of the Value of such Inventory that has been reduced by shrinkage; (h) Inventory that the Borrower has returned, has attempted to return, is deemed in the process of returning or intends to be Eligible return to the vendor thereof; (i) Inventory shall that is perishable or live or 30 days from expiration; (j) Inventory stored at locations outside the United States; (k) Inventory formulated by a Loan Party pursuant to a license unless the applicable licensor has agreed in writing to permit the Collateral Agent to exercise its rights and remedies against such Inventory; and (l) Inventory that is classified as controlled substances, C2 or other controlled substances or pharmaceuticals unless the applicable Loan Party (i) possesses a specialized license from the U.S. Drug Enforcement Agency or other federal, state or local authority to sell or dispose of same, or (ii) is not at any time exceed $1,000,000, and (f) such Inventory shall not have been in transit for more than sixty (60) daysotherwise prohibited under applicable law from selling or otherwise disposing of same."

Eligible Inventory. The second sentence following shall constitute the Eligibility Criteria for acceptance of Inventory for inclusion in the Borrowing Base. All Inventory of the definition Loan Parties, valued at the lower cost or market in accordance with GAAP, but excluding any Inventory having any of Eligible the following characteristics: (a) Inventory that is hereby deleted in-transit; located at any warehouse, job site or located on any other premises that may be subject to the Lien of any person other than the Collateral Agent; (b) Inventory that is otherwise not subject to a duly perfected first priority Lien in the Collateral Agent’s favor; (c) Inventory that is subject to (x) a Lien in favor of any Person other than the Lender other than the ABDC Lien that is subject to the ABDC Intercreditor Agreement and replaced (y) the Lien of a supplier or similar creditor of any of the Loan Parties that is subject to a Supplier Intercreditor Agreement; (d) Inventory covered by any negotiable or non-negotiable warehouse receipt, xxxx of lading or other document of title; on consignment from any Person; on consignment to any Person or subject to any bailment unless such consignee or bailee has executed an agreement with the following: "Lender; (e) Supplies, packaging, parts or sample Inventory, or customer supplied parts or Inventory; (f) Work-in-process Inventory; (g) Inventory located that is damaged, defective, obsolete, slow moving or not currently saleable in the normal course of Borrower’s operations, or the amount of such Inventory that has been reduced by shrinkage; (h) Inventory that the Borrower has returned, has attempted to return, is in the process of returning or intends to return to the vendor thereof; (i) Inventory that is perishable or live or 30 days from expiration; (j) Inventory stored at locations outside the United States States; (k) Inventory formulated by a Loan Party pursuant to a license unless the applicable licensor has agreed in writing to permit the Collateral Agent to exercise its rights and remedies against such Inventory; and (l) Inventory that is classified as controlled substances, C2 or other controlled substances or pharmaceuticals unless the applicable Loan Party (i) possesses a specialized license from the U.S. Drug Enforcement Agency or other federal, state or local authority to sell or dispose of America that a Revolving Loan Borrower has acquired in accordance with the terms same, or (ii) is not otherwise prohibited under applicable law from selling or otherwise disposing of the purchase arrangements between such Revolving Loan Borrower and a supplier and as to which such Revolving Loan Borrower has obtained legal title and that would otherwise be determined by Lender to be Eligible Inventory in all respects which same. None. Reference is in transit made to the premises of a Customs Broker in the United States of America which is an Eligible Inventory Location or such other Eligible Inventory Location in the United States of America; provided, that, (a) Lender has a first priority perfected security interest in Amended and lien upon such Inventory, (b) Lender has possession of not less than two (2) of a total of three (3) originals of the documents of title with respect to such Inventory and all of the terms and conditions of Section 8 of the Twenty-Seventh Amendment to Loan Restated Credit Agreement, dated as of October 31December 28, 20032010 (as amended, restated, supplemented, waived or otherwise modified from time to time, the “Credit Agreement”), among LenderBioScrip, Borrowers Inc., a Delaware corporation (“Borrower”), the Subsidiary Guarantors, the Lenders, Healthcare Finance Group, LLC, as administrative agent (in such capacity, the “Administrative Agent”), as collateral agent for the Secured Parties and Guarantors as collateral manager, and other entities party thereto. Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have been satisfiedthe meanings given to them in the Credit Agreement. 1. (the “Assignor”) hereby irrevocably sells and assigns, without recourse, to _________________ (cthe “Assignee”), and the Assignee hereby irrevocably purchases and assumes, from the Assignor, without recourse to the Assignor, effective as of the Effective Date set forth below (but not prior to the registration of the information contained herein in the Register pursuant to Section 11.04(c) Lender shall have received of the Credit Agreement), the interests set forth below (the “Assigned Interest”) in the Assignor’s rights and obligations under the Credit Agreement and the other Loan Documents, including, without limitation, the Swingline Commitment, Revolving Commitment and the Swingline Loans, Revolving Loans and participations held by the Assignor in Letters of Credit which are outstanding on the Effective Date. From and after the Effective Date (i) the Assignee shall be a Notification party to and Acknowledgment Agreement, duly authorized, executed and delivered be bound by either or both the provisions of the Customs Broker Credit Agreement and, to the extent of the interests assigned by this Assignment and Freight ForwarderAcceptance, as have the case may be, handling rights and obligations of a Lender thereunder and under the shipping Loan Documents and delivery of such Inventory, (ii) the Assignor shall, to the extent of the interests assigned by this Assignment and Acceptance, relinquish its rights and be released from its obligations under the Credit Agreement. 2. The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the interest being assigned hereby free and clear of any lien, encumbrance or other adverse claim created by the Assignor and that its Commitments, and the outstanding balances of its Loans, without giving effect to assignments thereof which have not become effective, are as set forth in this Assignment and Acceptance and (ii) it has all necessary power and authority, and has taken all action necessary, to execute and deliver this Assignment and Acceptance and to consummate the transactions contemplated hereby; and (b) except as set forth in (a) above, the Assignor makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with the Credit Agreement, or the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Credit Agreement, any other Loan Document or any other instrument or document furnished pursuant thereto, or the financial condition of any Loan Party or the performance or observance by any Loan Party of any of its obligations under the Credit Agreement, any other Loan Document or any other instrument or document furnished pursuant thereto. 3. The Assignee (a) represents and warrants that (i) it is legally authorized to enter into this Assignment and Acceptance and (ii) it has all necessary power and authority, and has taken all action necessary, to execute and deliver this Assignment and Acceptance and to consummate the transactions contemplated hereby and become a Lender under the Credit Agreement; (b) confirms that it has received a copy of the certificate Credit Agreement, and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Acceptance; (c) agrees that it will, independently and without reliance upon the Assignor, the Agents or any Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Agreement, the other Loan Documents or any other instrument or document furnished pursuant hereto or thereto; (d) appoints and authorizes the Agents to take such action as agents on its behalf and to exercise such powers and discretion under the Credit Agreement, the other Loan Documents or any other instrument or document furnished pursuant hereto or thereto as are delegated to the Agents by the terms thereof, together with such powers as are incidental thereto; and (e) agrees that it will be bound by the provisions of marine cargo insurance the Credit Agreement and will perform in accordance with its terms all the obligations which by the terms of the Credit Agreement are required to be performed by it as a Lender. 4. The effective date of this Assignment and Acceptance shall be the Effective Date of Assignment described in Schedule 1 hereto (the “Effective Date”). Following the execution of this Assignment and Acceptance, it will be delivered to the Administrative Agent for acceptance by it and recording by the Administrative Agent pursuant to the Credit Agreement, effective as of the Effective Date (which shall not, unless otherwise agreed to by the Administrative Agent, in its sole discretion, be earlier than three Business Days after the date of such acceptance and recording by the Administrative Agent). This Assignment and Acceptance will be delivered to the Administrative Agent together with (a) if the Assignee is a Foreign Lender, the forms specified in Section 2.15(e) of the Credit Agreement, duly completed and executed by such Assignee; (b) if the Assignee is not already a Lender under the Credit Agreement, an Administrative Questionnaire, and (c) a processing and recordation fee of $3,500, if required under the Credit Agreement. 5. Upon such acceptance and recording, from and after the Effective Date, the Administrative Agent shall make all payments in respect of the Assigned Interest (including payments of principal, interest, fees and other amounts) [to the Assignor for amounts which have accrued to the Effective Date and to the Assignee for amounts which have accrued subsequent to the Effective Date] [to the Assignee whether such amounts have accrued prior to the Effective Date or accrue subsequent to the Effective Date. The Assignor and the Assignee shall make all appropriate adjustments in payments by the Administrative Agent for periods prior to the Effective Date or with respect to the making of this assignment directly between themselves.] 6. From and after the Effective Date, (a) the Assignee shall be a party to the Credit Agreement and, to the extent provided in this Assignment and Acceptance, have the rights and obligations of a lender thereunder and under the other Loan Documents and shall be bound by the provisions thereof and (b) the Assignor shall, to the extent provided in this Assignment and Acceptance, relinquish its rights (except those surviving the payment in full of the Obligations) and be released from its obligations under the Loan Documents. 7. This Assignment and Acceptance shall be construed in accordance with and governed by the law of the State of New York without regard to conflicts of law principles that would require the application of the laws of another jurisdiction. Effective Date of Assignment: Legal Name of Assignor: Legal Name of Assignee: Assignee’s Address for Notices: Percentage Assigned of Applicable Loan/Commitment: Loan/Commitment Principal Amount Assigned all Lenders thereunder) Revolving Loans $ % Letters of Credit $ % Swingline Loans $ % [Signature Page Follows] The terms set forth above are hereby agreed to: [ as Assignor ] By: Name: Title: as Assignee By: Name: Title: Accepted:* BIOSCRIP, INC., as Borrower By: Name: Title: HEALTHCARE FINANCE GROUP, LLC, as Administrative Agent By: Name: Title: [______________], as [Swingline Lender/Issuing Bank]** * To be completed to the extent consent of Borrower and/or Administrative Agent is required under Section 11.04(b) of the Credit Agreement. ** To be completed to the extent consent of the Swingline Lender or Issuing Bank is required under Section 11.04(b) of the Credit Agreement. By: Name: Title: Healthcare Finance Group, LLC, as Administrative Agent for the Lenders referred to below 000 Xxxxx Xxxxxx, 00xx Xxxxx Xxx Xxxx, Xxx Xxxx 00000 Attention: [Bioscrip Account Manager] Facsimile: (000) 000-0000 Re: BioScrip, Inc. [Date] Ladies and Gentlemen: Reference is made to the Amended and Restated Credit Agreement, dated as of December 28, 2010 (as amended, restated, supplemented, waived or otherwise modified from time to time, the “Credit Agreement”), among BioScrip, Inc., a Delaware corporation (“Borrower”), the Subsidiary Guarantors, the Lenders, Healthcare Finance Group, LLC, as administrative agent, as collateral agent for the Secured Parties and as collateral manager, and other entities party thereto. Capitalized terms used but not defined herein shall have the meaning assigned to such terms in the Credit Agreement. Borrower hereby gives you notice pursuant to Section 2.03 of the Credit Agreement that it requests a Revolving Borrowing under the Credit Agreement, and that in connection therewith sets forth below the terms on which such Revolving Borrowing is requested to be made: (A) Principal amount of Borrowing:1 (B) Date of Borrowing (which is a Business Day): (C) Funds are requested to be disbursed to Borrower’s account with: Account No. Borrower hereby represents and warrants that the conditions to lending specified in which it has been named Sections 4.02(b)-(d) of the Credit Agreement are satisfied as an additional insured of the date hereof. 1 See Section 2.02(a) of the Credit Agreement for minimum borrowing amounts. By: Name: Title: BIOSCRIP, INC. BORROWING BASE at 1/31/2010 Manual AR Rebate Receivable Ineligible AR Offset — Shared Rebate Portion Cash Basis account for PBM Estimated Net Value Factor 95 % 95 % 95 % 90 % 92 % 92 % 95 % 95 % 99 % 0 % 94 % Estimated Net Value Credit Balances Month-end Cash intransit 0 Adjusted Net Value of Receivable Advance Rate A/R 85 % 85 % 85 % 85 % 85 % 85 % 85 % 85 % 85 % 0 % 85 % Inventory Availability per Appendix 1 0 Interim CHS availability Borrowing Base $ 0 Revolving Commitment $ 150,000,000 Borrowing Limit $ 0 Other Reserves Loan Activity $ 0 Revolving Advances Since Prior Report — Less Collections — Deposits — Total Interest, Fees, Charges & Expenses — Deposits in Transit — Revolving Loan Balance This Report Net Availability $ 0 The undersigned represents and loss payee warrants that the foregoing information is true, complete and correct and that the collateral reflected herein complies with and conforms to the Eligibility Criteria set forth in a manner acceptable Annex IV to Lenderthe Amended and Restated Credit Agreement dated as of December 28, 2010 by and among Bioscrip, Inc., the subsidiaries of Bioscrip, Inc., Healthcare Finance Group, LLC, as Administrative Agent, Collateral Agent and Collateral Manager, and other entities party thereto (iii) a copy of as amended, restated, supplemented or otherwise modified from time to time, the invoice“Agreement”). BioScrip, packing slip and manifest with respect theretoInc. promises to pay to Healthcare Finance Group, (d) such LLC, as Collateral Manager, the new loan balances reflected above, plus interest, as set forth in the Agreement. By: Date: _______________ Name: Title: I. Inventory is not subject to any Letter of Credit Accommodation, (e) the aggregate amount of the Value of such Inventory that is deemed to be Eligible Inventory shall not at any time exceed $1,000,000, and (f) such Inventory shall not have been in transit for more than sixty (60) days."per perpetual report $ —

Eligible Inventory. The second sentence of With respect to the definition of Borrower, finished goods inventory owned by the Borrower; PROVIDED that Eligible Inventory is hereby deleted and replaced with the following: "Inventory located outside the United States of America that a Revolving Loan Borrower has acquired in accordance with the terms of the purchase arrangements between such Revolving Loan Borrower and a supplier and as to which such Revolving Loan Borrower has obtained legal title and that would otherwise be determined by Lender to be Eligible Inventory in all respects which is in transit to the premises of a Customs Broker in the United States of America which is an Eligible Inventory Location or such other Eligible Inventory Location in the United States of America; provided, that, shall not include any inventory (a) Lender has a first priority perfected security interest in and lien upon such Inventoryheld on consignment, or not otherwise owned by the Borrower, (b) Lender has which is subject to any legal encumbrance other than Permitted Liens, (c) which is not in the possession of the Borrower unless (i) the Agent has received a waiver from the party in possession of such inventory in form and substance reasonably satisfactory to the Agent or (ii) such inventory is in transit from one Permitted Inventory Location to another Permitted Inventory Location, and the total duration of such transit time is not less more than two (2) of a total of three (3) originals of the documents of title with respect to such Inventory and all of the terms and conditions of Section 8 of the Twenty-Seventh Amendment to Loan Agreement, dated as of October 31, 2003, among Lender, Borrowers and Guarantors shall have been satisfied, (c) Lender shall have received (i) a Notification and Acknowledgment Agreement, duly authorized, executed and delivered by either or both of the Customs Broker and Freight Forwarder, as the case may be, handling the shipping and delivery of such Inventory, (ii) a copy of the certificate of marine cargo insurance in connection therewith in which it has been named as an additional insured and loss payee in a manner acceptable to Lender, and (iii) a copy of the invoice, packing slip and manifest with respect theretoBusiness Days, (d) such Inventory which is not subject to any Letter of Credit Accommodationlien, encumbrance or security interest which is prior to the liens granted to the Agent (other than landlord's or lessor's liens under leases to which the Borrower is a party provided no amount secured by such lien has become due and payable and not been paid), (e) as to which appropriate Uniform Commercial Code financing statements showing the aggregate amount of Borrower as debtor and the Value of such Inventory that is deemed Agent as secured party have not been filed in the proper filing office or offices in order to be Eligible Inventory shall not at any time exceed $1,000,000perfect the Agent's security interest therein, and (f) which has been shipped to a customer of the Borrower regardless of whether such shipment is on a consignment basis, (g) which is not located at a Permitted Inventory shall not have been Location unless such inventory is in transit from one Permitted Inventory Location to another Permitted Inventory Location, and the total duration of such transit time is not more than two (2) Business Days, (h) which the Borrower reasonably deems to be obsolete or not marketable consistent with its past practices, PROVIDED that such practices shall be subject to the review and approval of the Agent after the occurrence and during the continuance of an Event of Default, (i) which is Packaway Inventory to the extent such inventory exceeds ten percent (10%) of Eligible Inventory or (j) which has been owned by the Borrower for more than sixty one (601) daysyear (except to the extent permitted in clause (i) of this definition)."

Eligible Inventory. The second sentence (i) Keep all Eligible Inventory only at the locations in the United States; and (ii) keep all Eligible Inventory only at locations identified on Schedule E-3 (as amended pursuant to Section 5.2), (iii) keep all Eligible Inventory fully covered at not less than their book value under Borrower’s “spares” all risk insurance policies, and (iv) keep all Eligible Inventory from being installed or held for installation on an Aircraft or Engine, or otherwise held, by, for, or on behalf an air carrier as defined in 14 CFR 49. Each Borrower shall, and shall cause each other Spare Parts Loan Party to, also keep all Spare Parts that are Collateral and all Eligible Inventory (except to the extent such Spare Parts are the subject of a Permitted Spare Parts Installation permitted pursuant to Section 5.19(e)(ii)) in fenced areas with readily visible signage indicating that the Spare Parts located at such location are subject to a Lien in favor of Agent or otherwise segregated and not commingled with assets that are not Collateral. (b) Keep all Spare Parts and other Inventory (except to the extent the subject of a Permitted Spare Parts Installation permitted pursuant to Section 5.19(e)) of the definition of Spare Parts Loan Parties not designated as Eligible Inventory only at the locations identified on Schedule E-3 (as amended pursuant to Section 5.2) and not permit any Spare Parts or other Inventory to be located at the premises of or otherwise put into the possession or control of any bailee, warehouseman, FAA repair station, servicer, mechanic, vendor, supplier, or other Person unless a Collateral Access Agreement has been put in place with such Person), provided that: (i) Borrower may amend Schedule E-3 pursuant to Section 5.2 to add additional locations so long as: (A) such amendment occurs by written notice to Agent not less than 10 Business Days prior to the date on which any Spare Parts are moved to such new location, and (B) such new location is hereby deleted within the United States; (ii) any Spare Part that is not Eligible Inventory may be transported to or from, or be in the possession of or under the control of, a bailee, warehouseman, FAA repair station, overhaul or maintenance servicer, mechanic, or similar Person for purposes of repair in the ordinary course of Borrower’s business without a Collateral Access Agreement so long as either (A) no Event of Default has occurred and replaced is continuing or would result therefrom, or (B) the aggregate book value of all such Spare Parts in the possession of or under the control of all such Persons, in the aggregate, does not exceed $2,000,000; (iii) so long as such transit is in the United States and in the ordinary course of Borrower’s business, the Spare Parts Loan Parties may move Spare Parts that are not Eligible Inventory to any location identified on Schedule E-3; (iv) so long as (A) no Event of Default has occurred and is continuing or would result therefrom, (B) such transit is in the ordinary course of Borrower’s business, and (C) the aggregate book value of all Spare Parts moved to all such foreign locations, in the aggregate, does not exceed $2,500,000 (provided that Spare Parts at such foreign locations shall not count against the dollar amount of Spare Parts permitted to be maintained with third parties pursuant to Section 5.19(b)(ii)(B)), the following: "Spare Parts Loan Parties may move Spare Parts that are not Eligible Inventory located to any location outside the United States (including locations outside the United States where such Spare Parts are in the possession of America or under the control of a bailee, warehouseman, FAA repair station, overhaul or maintenance servicer, mechanic, or similar Person); (v) so long as such transit is in the ordinary course of Borrower’s business, the Spare Parts Loan Parties may move Spare Parts that are not Eligible Inventory from any location outside the United States to any other location outside the United States; (vi) so long as such transit is in the ordinary course of Borrower’s business, the Spare Parts Loan Parties may move Spare Parts that are not Eligible Inventory to the location of Aircraft, Engines, flight simulators or other Equipment to complete a Revolving Permitted Spare Parts Installation that is permitted pursuant to Section 5.19(e); and (vii) the Spare Parts Loan Borrower has acquired Parties may move Spare Parts that are not Eligible Inventory pursuant to pool, exchange or lease transactions permitted pursuant to Section 5.19(e). (c) Maintain in accordance effect a Spare Parts Tracking System. (d) Maintain, with respect to Spare Parts, all records, logs, serviceability tags and other documents and materials required by applicable law, including the terms of FARs, or by the purchase arrangements between such Revolving Spare Parts Loan Borrower and a supplier and as to which such Revolving Loan Borrower has obtained legal title and that would otherwise be determined by Lender Parties' Maintenance Program. (e) Not permit any Spare Parts to be leased, sold, exchanged, attached or installed on any Aircraft, Engine, flight simulator, or other Equipment, or otherwise disposed of; provided, however, that (i) so long as no Overadvance (as defined under the DIP Revolving Credit Agreement) is outstanding or would result therefrom (after having removed any such Eligible Inventory from the Borrowing Base (as defined under the DIP Revolving Credit Agreement)), the Spare Parts Loan Parties may sell Spare Parts that are not Eligible Inventory in all respects which is in transit to the premises ordinary course of a Customs Broker in the United States of America which is an Eligible Inventory Location or such other Eligible Inventory Location in the United States of America; provided, that, (a) Lender has a first priority perfected security interest in and lien upon such Inventory, (b) Lender has possession of not less than two (2) of a total of three (3) originals of the documents of title with respect to such Inventory and all of the terms and conditions of Section 8 of the Twenty-Seventh Amendment to Loan Agreement, dated as of October 31, 2003, among Lender, Borrowers and Guarantors shall have been satisfied, (c) Lender shall have received (i) a Notification and Acknowledgment Agreement, duly authorized, executed and delivered by either or both of the Customs Broker and Freight Forwarder, as the case may be, handling the shipping and delivery of such InventoryBorrower’s business, (ii) a copy of so long as no Overadvance (as defined under the certificate of marine cargo insurance in connection therewith in which it has been named as an additional insured and loss payee in a manner acceptable to LenderDIP Revolving Credit Agreement) is outstanding or would result therefrom, Borrower may make Permitted Spare Parts Installations with Eligible Inventory, (iii) the Spare Parts Loan Parties may make Permitted Spare Parts Installations with Spare Parts (other than Eligible Inventory), and (iiiiv) a copy of the invoice, packing slip and manifest with respect theretoto Spare Parts that are not Eligible Inventory, the Spare Parts Loan Parties may pool, exchange, or lease such Spare Parts in the ordinary course of business so long as (dx) such Inventory no Event of Default has occurred and is not subject to any Letter of Credit Accommodation, continuing or would result therefrom and (ey) the aggregate amount book value of all such Spare Parts, in the Value of such Inventory that is deemed to be Eligible Inventory shall aggregate, does not at any time exceed $1,000,000, and . (f) such Each Borrower, on behalf of each of its Subsidiaries, hereby waives any and all rights that it has or may have in the future to assert or claim against Agent or any of the Lenders or any transferee pursuant to the exercise of remedies under any of the Loan Documents, any mechanic's, repairer's, servicer's, xxxxxx'x or other Lien against any Collateral, including any Spare Parts, Engines, or Aircraft constituting Collateral. Not permit any of its Spare Parts to be located at the premises of or otherwise put into the possession or control of any bailee, warehouseman, FAA repair station, servicer, mechanic, vendor, supplier, or similar Person except: that any Spare Part that is not an Eligible Inventory shall not have been may be in transit for more than sixty the possession of or under the control of a bailee, warehouseman, FAA repair station, overhaul or maintenance servicer, mechanic, or similar Person to the extent expressly permitted by (60but without duplication of) daysSection 5.19(b)."

Eligible Inventory. The second sentence All of the Inventory owned by each Credit Party and properly reflected as “Eligible Inventory”, or “Eligible In-Transit Inventory” in the most recent Borrowing Base Certificate delivered by Borrower Representative to Agent shall be “Eligible Inventory” or “Eligible In-Transit Inventory”, as applicable for purposes of this Agreement, except any Inventory to which any of the exclusionary criteria set forth below or in the component definitions herein applies. Agent shall have the right to establish, modify, or eliminate Reserves against Eligible Inventory from time to time in its Permitted Discretion. In addition, Agent reserves the right, at any time and from time to time after the Effective Date, to adjust any of the applicable criteria and to establish new criteria with respect to Eligible Inventory, and/or Eligible In-Transit Inventory in each case in its Permitted Discretion, subject to the approval of Required Lenders in the case of adjustments or new criteria that have the effect of increasing the Borrowing Base. Eligible Inventory shall not include the following Inventory of a Credit Party that: (a) is not owned by such Credit Party free and clear of all Liens and rights of any other Person (including the rights of a purchaser that has made progress payments and the rights of a surety that has issued a bond to assure such Credit Party’s performance with respect to that Inventory), except (i) Qualified Liens described in clause (iv) of the definition of Eligible Inventory is hereby deleted and replaced thereof (provided that Reserves may be established with the following: "Inventory located outside the United States of America that a Revolving Loan Borrower has acquired respect thereto in accordance with this Agreement) and (ii) Permitted Liens in favor of landlords and bailees (provided that Reserves may be established with respect thereto in accordance with this Agreement); (b) (i) is not located on premises owned, leased or rented by such Credit Party and set forth in Schedule 3.21, such schedule to be updated from time to time, or (ii) is stored at a leased location either (x) with respect to which a reasonably satisfactory collateral access agreement has been delivered to Agent, or (y) Reserves may be established with respect thereto in accordance with this Agreement or (iii) is stored with a bailee or warehouseman unless a reasonably satisfactory, acknowledged bailee letter has been received by Agent and Reserves may be established with respect thereto in accordance with this Agreement, or (iv) is located at an owned location subject to a mortgage in favor of a lender other than Agent unless a reasonably satisfactory mortgagee waiver has been delivered to Agent, or (v) is located at any site if the terms aggregate book value of the purchase arrangements Inventory at any such location is less than $100,000; (c) is placed, purchased or sold on consignment (other than Eligible Consigned Inventory up to an aggregate maximum amount of $2,000,000) or is in transit, except for Inventory in transit between such Revolving Loan Borrower and a supplier and locations of Credit Parties as to which Agent’s Liens have been perfected at origin and destination, and except for Eligible In-Transit Inventory up to an aggregate maximum amount of $5,000,000; (d) is covered by a negotiable document of title, unless such Revolving Loan Borrower document has obtained legal title been delivered to Agent with all necessary endorsements, free and clear of all Liens except Qualified Liens described in clause (iv) of the definition thereof (provided that would otherwise Reserves may be determined established with respect thereto in accordance with this Agreement); (e) is obsolete, slow moving (in excess of two year’s supply), unsalable, unrentable, shopworn, seconds, damaged, defective, unfit for sale, is being repaired, is not of good or merchantable quality or does not meet all standards imposed by Lender to be Eligible Inventory in all respects any Governmental Authority having regulatory authority over such goods, their use, lease or sale; (f) consists of display items or packing or shipping materials, parts, manufacturing supplies, work‑in‑process Inventory, replacement parts, prototypes or consists of unfinished goods; (g) consists of goods which have been returned by the buyer; (h) is in transit to the premises not of a Customs Broker type held for sale in the United States ordinary course of America which is an Eligible Inventory Location or such other Eligible Inventory Location in the United States of America; provided, that, (a) Lender has a first priority perfected security interest in and lien upon such Inventory, (b) Lender has possession of not less than two (2) of a total of three (3) originals of the documents of title with respect to such Inventory and all of the terms and conditions of Section 8 of the Twenty-Seventh Amendment to Loan Agreement, dated as of October 31, 2003, among Lender, Borrowers and Guarantors shall have been satisfied, (c) Lender shall have received Credit Party’s business; (i) a Notification and Acknowledgment Agreement, duly authorized, executed and delivered by either or both of the Customs Broker and Freight Forwarder, as the case may be, handling the shipping and delivery of such Inventory, (ii) a copy of the certificate of marine cargo insurance in connection therewith in which it has been named as an additional insured and loss payee in a manner acceptable to Lender, and (iii) a copy of the invoice, packing slip and manifest with respect thereto, (d) such Inventory is not subject to any Letter a first priority lien in favor of Credit AccommodationAgent on behalf of itself and Secured Party, subject to (ei) the aggregate amount Qualified Liens described in clause (iv) of the Value of such Inventory definition thereof (provided that is deemed to Reserves may be Eligible Inventory shall not at any time exceed $1,000,000, established with respect thereto in accordance with this Agreement) and (fii) such Permitted Liens as set forth in clause (d) of subsection 5.1 (provided that Reserves may be established with respect thereto in accordance with this Agreement); (j) does not conform to any of the representations or warranties pertaining to Inventory shall set forth in the Loan Documents; (k) consists of Hazardous Materials or goods that can be transported or sold only with licenses that are not have been readily available; (l) is not covered by insurance as required by the Loan Documents; (m) is subject to any Patent or Trademark IP License requiring the payment of royalties or fees or requiring the consent of the licensor for a sale thereof by Agent; or (n) in transit the case of an Australian Credit Party, which does not meet all standards imposed by any Australian federal or state government authority, including relating to its production, acquisition or importation for more than sixty (60) daysinventory located in Australia or which does not consist of raw materials or finished goods for inventory located in Australia."

Eligible Inventory. The second sentence of the definition of (i) Keep all Eligible Inventory only at the locations in the United States; and (ii) keep all Eligible Inventory only at locations identified on Schedule E-3 (as amended pursuant to Section 5.2 (and Schedule 5.2 thereof), (iii) keep all Eligible Inventory fully covered at not less than their book value under Borrowers’ “spares” all risk insurance policies, and (iv) keep all Eligible Inventory from being installed or held for installation on an Aircraft or Engine, or otherwise held, by, for, or on behalf an air carrier as defined in 14 CFR 49. Each Borrower shall also keep all Spare Parts that are Collateral and all Eligible Inventory (except to the extent such Spare Parts are the subject of a Permitted Spare Parts Installation permitted pursuant to Section 5.19(e)(ii)) in fenced areas with readily visible signage indicating that the Spare Parts located at such location are subject to a Lien in favor of Agent. (b) Keep all Spare Parts and other Inventory (except to the extent the subject of a Permitted Spare Parts Installation permitted pursuant to Section 5.19(e)) of Borrowers not designated as Eligible Inventory only at the locations identified on Schedule E-3 (as amended pursuant to Section 5.2 (and Schedule 5.2 thereof) and not permit any Spare Parts or other Inventory to be located at the premises of or otherwise put into the possession or control of any bailee, warehouseman, FAA repair station, servicer, mechanic, vendor, supplier, or other Person unless a Collateral Access Agreement has been put in place with such Person), provided that: (i) Borrowers may amend Schedule E-3 pursuant to Section 5.2 (and Schedule 5.2 thereof) to add additional locations so long as: (A) such amendment occurs by written notice to Agent not less than 10 Business Days prior to the date on which any Spare Parts are moved to such new location, and (B) such new location is hereby deleted within the United States; (ii) any Spare Part that is not Eligible Inventory may be transported to or from, or be in the possession of or under the control of, a bailee, warehouseman, FAA repair station, overhaul or maintenance servicer, mechanic, or similar Person for purposes of repair in the ordinary course of Borrowers’ business without a Collateral Access Agreement so long as either (A) no Event of Default has occurred and replaced is continuing or would result therefrom, or (B) the aggregate book value of all such Spare Parts in the possession of or under the control of all such Persons, in the aggregate, does not exceed $2,000,000; (iii) so long as such transit is in the United States and in the ordinary course of Borrowers’ business, Borrowers may move Spare Parts that are not Eligible Inventory to any location identified on Schedule E-3; (iv) so long as (A) no Event of Default has occurred and is continuing or would result therefrom, (B) such transit is in the ordinary course of Borrowers’ business, and (C) the aggregate book value of all Spare Parts moved to all such foreign locations, in the aggregate, does not exceed $2,500,000 (provided that Spare Parts at such foreign locations shall not count against the dollar amount of Spare Parts permitted to be maintained with the following: "third parties pursuant to Section 5.19(b)(ii)(B)), Borrowers may move Spare Parts that are not Eligible Inventory located to any location outside the United States (including locations outside the United States where such Spare Parts are in the possession of America or under the control of a bailee, warehouseman, FAA repair station, overhaul or maintenance servicer, mechanic, or similar Person); (v) so long as such transit is in the ordinary course of Borrowers’ business, Borrowers may move Spare Parts that are not Eligible Inventory from any location outside the United States to any other location outside the United States; (vi) so long as such transit is in the ordinary course of Borrowers’ business, Borrowers may move Spare Parts that are not Eligible Inventory to the location of Aircraft, Engines, flight simulators or other Equipment to complete a Revolving Loan Borrower has acquired Permitted Spare Parts Installation that is permitted pursuant to Section 5.19(e); and (vii) Borrowers may move Spare Parts that are not Eligible Inventory pursuant to pool, exchange or lease transactions permitted pursuant to Section 5.19(e). (c) Maintain in accordance effect a Spare Parts Tracking System. (d) Maintain, with respect to Spare Parts, all records, logs, serviceability tags and other documents and materials required by applicable law, including the terms of the purchase arrangements between such Revolving Loan Borrower and a supplier and as to which such Revolving Loan Borrower has obtained legal title and that would otherwise be determined FARs, or by Lender Borrowers’ Maintenance Program. (e) Not permit any Spare Parts to be leased, sold, exchanged, attached or installed on any Aircraft, Engine, flight simulator, or other Equipment, or otherwise disposed of; provided, however, that (i) so long as no Overadvance is outstanding or would result therefrom (after having removed any such Eligible Inventory from the Borrowing Base), Borrowers may sell Spare Parts that are not Eligible Inventory in all respects which is in transit to the premises ordinary course of a Customs Broker in the United States of America which is an Eligible Inventory Location or such other Eligible Inventory Location in the United States of America; provided, that, (a) Lender has a first priority perfected security interest in and lien upon such Inventory, (b) Lender has possession of not less than two (2) of a total of three (3) originals of the documents of title with respect to such Inventory and all of the terms and conditions of Section 8 of the Twenty-Seventh Amendment to Loan Agreement, dated as of October 31, 2003, among Lender, Borrowers and Guarantors shall have been satisfied, (c) Lender shall have received (i) a Notification and Acknowledgment Agreement, duly authorized, executed and delivered by either or both of the Customs Broker and Freight Forwarder, as the case may be, handling the shipping and delivery of such InventoryBorrowers’ business, (ii) a copy of the certificate of marine cargo insurance in connection therewith in which it has been named so long as an additional insured and loss payee in a manner acceptable to Lenderno Overadvance is outstanding or would result therefrom, Borrowers may make Permitted Spare Parts Installations with Eligible Inventory, (iii) Borrowers may make Permitted Spare Parts Installations with Spare Parts (other than Eligible Inventory), and (iiiiv) a copy of the invoice, packing slip and manifest with respect theretoto Spare Parts that are not Eligible Inventory, Borrowers may pool, exchange, or lease such Spare Parts in the ordinary course of business so long as (dx) such Inventory no Event of Default has occurred and is not subject to any Letter of Credit Accommodation, continuing or would result therefrom and (ey) the aggregate amount book value of all such Spare Parts, in the Value of such Inventory that is deemed to be Eligible Inventory shall aggregate, does not at any time exceed $1,000,000, and . (f) such Each Borrower, on behalf of each of its Subsidiaries, hereby waives any and all rights that it has or may have in the future to assert or claim against Agent or any of the Lenders or any transferee pursuant to the exercise of remedies under any of the Loan Documents, any mechanic’s, repairer’s, servicer’s, xxxxxx’x or other Lien against any Collateral, including any Spare Parts, Engines, or Aircraft constituting Collateral. Not permit any of its Spare Parts to be located at the premises of or otherwise put into the possession or control of any bailee, warehouseman, FAA repair station, servicer, mechanic, vendor, supplier, or similar Person except: that any Spare Part that is not an Eligible Inventory shall not have been may be in transit for more than sixty the possession of or under the control of a bailee, warehouseman, FAA repair station, overhaul or maintenance servicer, mechanic, or similar Person to the extent expressly permitted by (60but without duplication of) daysSection 5.19(b)."

Eligible Inventory. The second sentence Eligible Inventory" shall consist of all of the definition Inventory of Eligible Inventory is hereby deleted and replaced with a Borrower, except the following: "(i) work in process; (ii) Inventory located outside which is damaged, obsolete, not in good condition, or not either currently usable or currently saleable in the United States ordinary course of America that a Revolving Loan Borrower has acquired such Borrower's business as determined by Lender in its reasonable business discretion; (iii) Inventory which Lender determines, or which in accordance with such Borrower's customary business practices, is unacceptable due to age, type, category and/or quantity, including any Inventory which is in excess of a one (1) year's supply or is otherwise slow-moving; (iv) Inventory with respect to which Lender does not have a first and valid, fully perfected Lien except; (v) Inventory consisting of packaging or supplies; (vi) Inventory in the terms possession of such Borrower but not owned by such Borrower; (vii) Inventory produced in violation of the Fair Labor Standards Act and subject to the so-called "hot goods" provision contained in Title 29 U.S.C. ss.215(a)(1); (viii) Inventory with respect to which any disclosure is required in the applicable Monthly Report or Borrowing Base Certificate in accordance with Section 11.1(n); (ix) Inventory which is on consignment or is located at a place other than the places of business and collateral locations of such Borrower listed on Schedule 10.29; provided that, subject to Section 11.24, in the case of leased or bailment locations listed on Schedule 10.29, no Inventory located at any such location shall be "Eligible Inventory" until the applicable landlord or bailee has executed a lien waiver in form and substance satisfactory to Lender) including Inventory in transit; (x) Inventory consisting of finished goods which do not meet the specifications of the purchase arrangements between such Revolving Loan Borrower and a supplier and as to order for which such Revolving Loan Borrower has obtained legal title Inventory was produced; and (xi) Inventory which fails to meet the standards imposed by any governmental agency, or department or division thereof, having regulatory authority over such goods, its use and/or sale. In the event that would otherwise be determined by Lender Inventory previously scheduled in a Monthly Report or Borrowing Base Certificate ceases to be Eligible Inventory in all respects which is in transit to the premises of a Customs Broker in the United States of America which is an Eligible Inventory Location or such other Eligible Inventory Location in the United States of America; provided, that, (a) Lender has a first priority perfected security interest in and lien upon such Inventory, (b) Borrowers shall notify Lender has possession of not less than two (2) of a total of three (3) originals of the documents of title with respect to such Inventory and all of the terms and conditions of Section 8 of the Twenty-Seventh Amendment to Loan Agreement, dated as of October 31, 2003, among Lender, Borrowers and Guarantors shall have been satisfied, (c) Lender shall have received (i) a Notification and Acknowledgment Agreement, duly authorized, executed and delivered by either or both of the Customs Broker and Freight Forwarder, as the case may be, handling the shipping and delivery of such Inventory, (ii) a copy of the certificate of marine cargo insurance in connection therewith in which it has been named as an additional insured and loss payee in a manner acceptable to Lender, and (iii) a copy of the invoice, packing slip and manifest with respect thereto, (d) such Inventory is not subject to any Letter of Credit Accommodation, (e) the aggregate amount of the Value of such Inventory that is deemed to be Eligible Inventory shall not at any time exceed $1,000,000, and (f) such Inventory shall not have been in transit for more than sixty (60) daysthereof immediately."

Eligible Inventory. The second sentence ELIGIBLE INVENTORY" shall consist of all of the definition Inventory of Eligible Inventory is hereby deleted Borrower and replaced with each Guarantor, except the following: "(i) Inventory located outside which is damaged, obsolete, not in good condition, or not either currently usable or currently saleable in the United States ordinary course of America that a Revolving Loan Borrower has acquired such Person's business as determined by Agent; (ii) Inventory which Agent determines, or which in accordance with such Person's customary business practices, is unacceptable due to age, type, category and/or quantity, including any Inventory which is in excess of a one (1) year's supply or is otherwise slow-moving; (iii) Inventory with respect to which Agent does not have a first and valid, fully perfected Lien; (iv) Inventory consisting of packaging or supplies; (v) Inventory in the terms possession of such Person but not owned by such Person; (vi) Inventory 52 produced in violation of the Fair Labor Standards Act and subject to the so-called "hot goods" provision contained in Title 29 U.S.C. ss.215(a)(1); (vii) Inventory with respect to which any disclosure is requireD in the applicable Monthly Report or Borrowing Base Certificate in accordance with clauses (i) through (vi) of Section 9.5; (viii) Inventory which is on consignment or is located at a place other than the places of business and collateral locations of such Person listed on Schedule 11.29; provided that, subject to Section 11.24, in the case of leased or bailment locations listed on Schedule 11.29, no Inventory located at any such location shall be "Eligible Inventory" until the applicable landlord or bailee has executed a lien waiver in form and substance satisfactory to Agent), including Inventory in transit; (ix) Inventory consisting of finished goods which do not meet the specifications of the purchase arrangements between such Revolving Loan Borrower and a supplier and as to order for which such Revolving Loan Borrower has obtained legal title Inventory was produced; (x) Inventory which fails to meet the standards imposed by any governmental agency, or department or division thereof, having regulatory authority over such goods, its use and/or sale and (xi) work in process. In the event that would otherwise be determined by Lender Inventory previously scheduled in a Monthly Report or Borrowing Base Certificate ceases to be Eligible Inventory in all respects which is in transit to the premises of a Customs Broker in the United States of America which is an Eligible Inventory Location or such other Eligible Inventory Location in the United States of America; provided, that, (a) Lender has a first priority perfected security interest in and lien upon such Inventory, (b) Lender has possession of not less than two (2) of a total of three (3) originals of Borrower shall notify, or shall cause the documents of title with respect applicable Guarantor to such Inventory and all of the terms and conditions of Section 8 of the Twenty-Seventh Amendment to Loan Agreementnotify, dated as of October 31, 2003, among Lender, Borrowers and Guarantors shall have been satisfied, (c) Lender shall have received (i) a Notification and Acknowledgment Agreement, duly authorized, executed and delivered by either or both of the Customs Broker and Freight Forwarder, as the case may be, handling the shipping and delivery of such Inventory, (ii) a copy of the certificate of marine cargo insurance in connection therewith in which it has been named as an additional insured and loss payee in a manner acceptable to Lender, and (iii) a copy of the invoice, packing slip and manifest with respect thereto, (d) such Inventory is not subject to any Letter of Credit Accommodation, (e) the aggregate amount of the Value of such Inventory that is deemed to be Eligible Inventory shall not at any time exceed $1,000,000, and (f) such Inventory shall not have been in transit for more than sixty (60) daysAgent thereof immediately."

Eligible Inventory. The second sentence of the definition of Eligible Inventory is hereby deleted and replaced with the following: "owned by Borrower or a Borrowing Base Guarantor; provided that, no Inventory located outside the United States of America that a Revolving Loan Borrower has acquired in accordance with the terms of the purchase arrangements between such Revolving Loan Borrower and a supplier and as to which such Revolving Loan Borrower has obtained legal title and that would otherwise be determined by Lender to shall be Eligible Inventory in all respects which is in transit to the premises of a Customs Broker in the United States of America which is an Eligible Inventory Location or such other Eligible Inventory Location in the United States of America; provided, that, unless it (a) Lender has a first priority perfected security interest in is finished goods, work-in-process or raw materials, and lien upon such Inventorynot packaging or shipping materials, labels, samples, display items, bags, replacement parts or manufacturing supplies; (b) Lender has possession of is not less than two (2) of a total of three (3) originals of the documents of title with respect held on consignment or approval or subject to such Inventory and all of the terms and conditions of Section 8 of the Twenty-Seventh Amendment to Loan Agreement, dated as of October 31, 2003, among Lender, Borrowers and Guarantors shall have been satisfied, any deposit or down payment; (c) Lender shall have received is in new and saleable condition and is not damaged, defective, shopworn or otherwise unfit for sale; (d) is not slow-moving, obsolete or unmerchantable, and does not constitute returned or repossessed goods; (e) meets all standards imposed by any Governmental Authority and has not been acquired from an entity subject to Sanctions or any specially designated nationals list maintained by OFAC; (f) conforms with the covenants and representations herein; (g) is subject to Agent’s duly perfected, first priority Lien, and no other Lien (other than non-consensual Permitted Liens arising by operation of law which are junior to the Agent’s Lien) unless an appropriate Reserve has been established in Agent’s sole discretion; (h) is within the continental United States or Canada, is not in transit (except Eligible In-Transit Inventory not to exceed $20,000,000 at any time outstanding), and is not consigned to any Person; (i) a Notification and Acknowledgment Agreement, duly authorized, executed and delivered by either or both of the Customs Broker and Freight Forwarder, as the case may be, handling the shipping and delivery of such Inventory, (ii) a copy of the certificate of marine cargo insurance in connection therewith in which it has been named as an additional insured and loss payee in a manner acceptable to Lender, and (iii) a copy of the invoice, packing slip and manifest with respect thereto, (d) such Inventory is not subject to any Letter of Credit Accommodationwarehouse receipt or negotiable Document unless an appropriate Reserve has been established in Agent’s sole discretion; (j) is not subject to any License or other arrangement that restricts Borrower’s, (e) the aggregate amount of the Value any Borrowing Base Guarantor’s or Agent’s right to dispose of such Inventory, unless Agent has received an appropriate Lien Waiver; and (k) is not located on leased premises or in the possession of a warehouseman, processor, repairman, mechanic, shipper, freight forwarder or other Person, unless the lessor or such Person has delivered a Lien Waiver or an appropriate Availability Reserve has been established in Agent’s sole discretion; provided further, Inventory that is deemed to shall not be Eligible Inventory shall not at any time exceed $1,000,000if it is Inventory which Agent has (i) determined in its Credit Judgment is unacceptable for inclusion in the Aggregate Borrowing Base, Tranche A Borrowing Base and Tranche B Borrowing Base and (fii) provided at least two (2) Business Days’ prior notice to Borrower (including telephonic or electronic notice promptly confirmed in writing) of such Inventory shall not have been in transit for more than sixty (60) daysdetermination."

Eligible Inventory. The second sentence Based on the most recent Borrowing Base ------------------ Certificate delivered by Borrower to Revolving Credit Agent and on other information available to Revolving Credit Agent, Revolving Credit Agent shall in its sole discretion determine which Inventory of Borrower shall be "Eligible -------- Inventory" for purposes of this Agreement. Revolving Credit Agent reserves the --------- right, at any time and from time to time after the Closing Date, to adjust any such criteria, to establish new criteria and to adjust advance rates with to Eligible Inventory in its sole discretion, subject to the approval of Requisite Lenders in the case of adjustments, or new criteria or changes in advance rates which have the effect of making more credit available. Without limiting the generality of the definition of Eligible foregoing, no Inventory is hereby deleted and replaced with the following: "Inventory located outside the United States of America that a Revolving Loan Borrower has acquired in accordance with the terms of the purchase arrangements between such Revolving Loan Borrower and a supplier and as to which such Revolving Loan Borrower has obtained legal title and that would otherwise be determined by Lender to shall be Eligible Inventory unless: (a) it is raw materials or finished goods; (b) it is in good, new and saleable condition; (c) it is not slow-moving, obsolete or unmerchantable; (d) it meets all standards imposed by any Governmental Authority; (e) it conforms in all respects which to the warranties and representations set forth in this Agreement; (f) it is owned by Borrower and is at all times subject to Agent's duly perfected, first priority security interest and no other Lien except a Permitted Lien; (g) it is in Borrower's possession and control, situated at a location in compliance with the Agreement and is not in transit or outside the continental United States; (h) it is not covered by a negotiable document of title, unless such document has been delivered to the premises Agent with all necessary endorsements, free and clear of a Customs Broker all Liens except those in the United States favor of America which is an Eligible Inventory Location or such other Eligible Inventory Location in the United States of America; provided, that, (a) Lender has a first priority perfected security interest in Agent and lien upon such Inventory, (b) Lender has possession of not less than two (2) of a total of three (3) originals of the documents of title with respect to such Inventory and all of the terms and conditions of Section 8 of the Twenty-Seventh Amendment to Loan Agreement, dated as of October 31, 2003, among Lender, Borrowers and Guarantors shall have been satisfied, (c) Lender shall have received Lenders; (i) a Notification and Acknowledgment Agreement, duly authorized, executed and delivered it does not consist of goods which have been returned by either the buyer; (j) it consists of goods held for sale or both utilized in the ordinary course of the Customs Broker and Freight Forwarder, as the case may be, handling the shipping and delivery of such Inventory, Borrower's business; and (iik) a copy of the certificate of marine cargo it is covered by casualty insurance in connection therewith in which it has been named as an additional insured and loss payee in a manner acceptable to Lender, Agent and (iii) a copy of the invoice, packing slip and manifest with respect thereto, (d) such Inventory is not subject to any Letter of Revolving Credit Accommodation, (e) the aggregate amount of the Value of such Inventory that is deemed to be Eligible Inventory shall not at any time exceed $1,000,000, and (f) such Inventory shall not have been in transit for more than sixty (60) daysAgent."

Eligible Inventory. The second sentence term AELIGIBLE INVENTORY@ means all INVENTORY owned by either or both of the definition of Eligible Inventory BORROWERS which is hereby deleted and replaced with acceptable to the following: "Inventory located outside LENDER to be included in the United States of America that a Revolving Loan Borrower has acquired in accordance with the terms calculation of the purchase arrangements between such Revolving Loan Borrower BORROWING BASE. The criteria for eligibility may be fixed and a supplier and as revised by the LENDER from time to which such Revolving Loan Borrower has obtained legal title and that would otherwise time in its discretion. INVENTORY in no event shall be determined by Lender deemed to be Eligible Inventory in all respects which is in transit to the premises of a Customs Broker in the United States of America which is an Eligible Inventory Location or such other Eligible Inventory Location in the United States of America; provided, that, eligible unless: (a) Lender the LENDER has a first priority perfected security interest in and lien upon such Inventory, the INVENTORY; (b) Lender has possession no vender, supplier or other PERSON claims any security interest or lien in or to the INVENTORY which is not expressly subordinated to the LENDER'S securities interests or liens therein; (c) it is normally and currently saleable in the ordinary course of not less than two (2) business of a total of three (3) originals either or both of the documents BORROWERS; (d) it is not raw materials or work in process; (e) it is located on the premises of title either of the BORROWERS; (f) it does not consist of obsolete, returned or repossessed items of INVENTORY or used goods or goods taken in trade; (g) it does not consist of slow moving items or items determined by the LENDER in its sole discretion to be stale or dated merchandise; (h) it does not consist of packing materials, catalogs, promotion materials, items used as demonstrators, prototypes, or salesman=s samples; (i) it does not consist of an item consigned to either or both of the BORROWERS or with respect to such Inventory and all of the terms and conditions of Section 8 of the Twenty-Seventh Amendment to Loan Agreement, dated as of October 31, 2003, among Lender, Borrowers and Guarantors shall have which any PERSON claims a lien; (j) it has not been satisfied, (c) Lender shall have received (i) a Notification and Acknowledgment Agreement, duly authorized, executed and delivered consigned by either or both of the Customs Broker and Freight Forwarder, as BORROWERS to a consignee; (k) it has not been leased by any PERSON; (l) it is not held by any PERSON (other than the case may be, handling BORROWER) or located upon any premises not owned in fee simple by the shipping and delivery BORROWER unless such PERSON or the owner of such Inventorypremises has executed a lien waiver agreement in form and substance satisfactory to the LENDER; and (m) it has not been deemed unsatisfactory by the LENDER for any reason, in the LENDER=S sole discretion, by written notice to either or both of the BORROWERS. The value of any INVENTORY deemed to meet the criteria for ELIGIBLE INVENTORY shall be determined at the least of: (i) the BORROWERS= net purchase or manufacturing cost; (ii) a copy of the certificate of marine cargo insurance in connection therewith in which it has been named as an additional insured and loss payee in a manner acceptable to Lender, and lowest then-existing market price; (iii) a copy the BORROWERS= lowest selling price, less estimated expenses for packing, selling and delivery; or (iv) any price ceiling which may be established by governmental order, regulation, or restriction. The LENDER shall be the discretionary judge of the invoicevalue of any INVENTORY, packing slip and manifest with respect thereto, (d) based upon such Inventory is not subject to any Letter of Credit Accommodation, (e) the aggregate amount of the Value of such Inventory that is deemed information as it deems in its discretion to be Eligible Inventory shall not at any time exceed $1,000,000, and (f) such Inventory shall not have been relevant or applicable in transit for more than sixty (60) daysmaking that determination."

Eligible Inventory. The second sentence of the definition of Eligible Inventory is hereby deleted and replaced with the following: "Inventory located outside the United States of America owned by a Borrower that a Revolving Loan Borrower has acquired Agent, in accordance with the terms of the purchase arrangements between such Revolving Loan Borrower and a supplier and as to which such Revolving Loan Borrower has obtained legal title and that would otherwise be determined by Lender its Permitted Discretion, deems to be Eligible Inventory. Without limiting the foregoing, no Inventory in all respects which is in transit to the premises of a Customs Broker in the United States of America which is an shall be Eligible Inventory Location or such other Eligible Inventory Location in the United States of America; provided, that, unless it (a) Lender has is finished goods built pursuant to a first priority perfected security interest in customer order, raw materials or work-in-process and lien upon such Inventorynot packaging or shipping materials, labels, samples, display items, bags, replacement parts, service parts or manufacturing supplies; (b) Lender has possession of is not less than two (2) of a total of three (3) originals of the documents of title with respect to such Inventory and all of the terms and conditions of Section 8 of the Twenty-Seventh Amendment to Loan Agreement, dated as of October 31, 2003, among Lender, Borrowers and Guarantors shall have been satisfied, held on consignment; (c) Lender shall have received (i) a Notification and Acknowledgment Agreement, duly authorized, executed and delivered by either or both of the Customs Broker and Freight Forwarder, as the case may be, handling the shipping and delivery of such Inventory, (ii) a copy of the certificate of marine cargo insurance in connection therewith in which it has been named as an additional insured and loss payee in a manner acceptable to Lender, and (iii) a copy of the invoice, packing slip and manifest with respect thereto, (d) such Inventory is not subject to any Letter of Credit Accommodationdeposit or down payment; (d) is in new and saleable condition and is not damaged, defective, shopworn or otherwise unfit for sale; (e) the aggregate amount of the Value of such Inventory that is deemed to be Eligible Inventory shall not at any time exceed $1,000,000slow-moving, perishable, obsolete or unmerchantable, and does not constitute returned or repossessed goods; (f) such Inventory shall meets all standards imposed by any Governmental Authority, has not have been acquired From a Person that is the target of any Sanction or on any specially designated nationals list maintained by OFAC, and does not constitute hazardous materials under any Environmental Law; (g) conforms with the covenants and representations herein; (h) is subject to Agent’s duly perfected, first priority Lien, and no other Lien (other than Permitted Liens); (i) is within the continental United States or Canada; is not in transit except between locations of Borrowers, between locations of a vendor to a location of a Borrower or between a location of a Borrower to a customer of a Borrower; and is not consigned to any Person; (j) is not subject to any warehouse receipt or negotiable Document; (k) is not subject to any License or other arrangement that restricts such Borrower’s or Agent’s right to dispose of such Inventory, unless Agent has received an appropriate Lien Waiver or has otherwise waived such requirement; and (l) is located (x) on a leased premises of a Borrower, (y) in the possession of a warehouseman, processor, repairman, mechanic, shipper, freight forwarder or other Person, and, to the extent the aggregate book value of Inventory at such location is greater than $1,000,000 the lessor or such Person has delivered a Lien Waiver or an appropriate Rent and Charges Reserve has been established or Agent has otherwise waived such requirement, or (z) at a customer location and in the process of being evaluated by the applicable customer for more than sixty acceptance by such customer under the terms of the sale contracts between a Borrower and such customer; and (60m) daysis reflected in the details of a current perpetual inventory report."

Eligible Inventory. The second sentence All of the definition inventory owned by the Borrower and reflected in the most recent Borrowing Base Certificate delivered by Borrower to Bank shall be “Eligible Inventory” for purposes of this Agreement, Eligible Inventory is hereby deleted and replaced with the following: "shall not include any Inventory located outside the United States of America that a Revolving Loan Borrower has acquired in accordance with the terms of the purchase arrangements between such Revolving Loan Borrower and a supplier and as to which such Revolving Loan Borrower has obtained legal title and that would otherwise be determined by Lender to be Eligible Inventory in all respects which is in transit to the premises of a Customs Broker in the United States of America which is an Eligible Inventory Location or such other Eligible Inventory Location in the United States of America; provided, that, : (a) Lender is not owned by Borrower free and clear of all liens and rights of any other person (including the rights of a purchaser that has made progress payments and the rights of a first priority perfected security interest surety that has issued a bond to assure Borrower’s performance with respect to that Inventory), except the liens in favor of Bank and lien upon such Inventory, Permitted Liens; (b) Lender has possession (i) is located on premises owned or leased by Borrower and is not encumbered by a mortgage or deed of not less than two trust, in each case in favor of Lender, or (2ii) is located at an owned or leased location subject to a mortgage in favor of a total of three (3) originals of the documents of title with respect to such Inventory and all of the terms and conditions of Section 8 of the Twenty-Seventh Amendment to Loan Agreement, dated as of October 31, 2003, among person other than Lender, Borrowers and Guarantors shall have been satisfied, ; (c) Lender shall have received (i) a Notification and Acknowledgment Agreement, duly authorized, executed and delivered by either is placed on consignment or both of the Customs Broker and Freight Forwarder, as the case may be, handling the shipping and delivery of such Inventory, (ii) a copy of the certificate of marine cargo insurance is in connection therewith in which it has been named as an additional insured and loss payee in a manner acceptable to Lender, and (iii) a copy of the invoice, packing slip and manifest with respect thereto, transit; (d) such obsolete, slow moving (in excess of one year’s supply), unsalable, damaged or unfit for sale; however, Reserve Seed Inventory that otherwise qualifies shall be deemed Eligible Inventory; (e) consists of display items or packing or shipping materials, manufacturing supplies, stores or replacement parts; (f) consists of goods which have been returned by the buyer; (g) is not of a type held for sale in the ordinary course of Borrower’s business; (h) is not subject to a first priority lien in favor of Lender; (i) breaches any Letter of Credit Accommodation, (e) the aggregate amount of the Value representations or warranties pertaining to Inventory set forth in the Loan Documents in any material respect; (j) consists of such Inventory any costs associated with “freight-in” charges, except those charges that is deemed to be Eligible Inventory shall not at any time exceed $1,000,000are customary in, and consistent with, Borrower’s historical accounting practices; (fk) such Inventory shall consists of Hazardous Materials or goods that can be transported or sold only with licenses that are not have readily available; (l) is not covered by casualty insurance reasonably acceptable to Lender; or (m) is subject to any patent or trademark license requiring the payment of royalties or fees or requiring the consent of the licensor for a sale thereof by Lender which has not been in transit for more than sixty (60) daysobtained."

Eligible Inventory. The second sentence All of the definition Inventory owned by the Borrowers and reflected in the most recent Borrowing Base Certificate delivered by each Borrower to Agent shall be “Eligible Inventory” for purposes of this Agreement, except Inventory that Agent, in its reasonable credit judgment and upon prior notice to Borrower Representative, has determined is not Eligible Inventory. Agent shall have the right to establish, modify or eliminate Reserves against Eligible Inventory from time to time in its reasonable credit judgment, in each case, upon prior notice to Borrower Representative. In addition, Agent reserves the right, at any time and from time to time after the Closing Date, to adjust any of the criteria set forth below and to establish new criteria, in its reasonable credit judgment and upon prior notice to Borrower Representative, subject to the approval of each Lender in the case of adjustments or new criteria which have the effect of making more credit available. Without in any way limiting the discretion of Agent to deem or not deem any Inventory as Eligible Inventory, Eligible Inventory shall not include any Inventory of any Borrower that: (a) is hereby deleted not owned by such Borrower free and replaced clear of all Liens and rights of any other Person (including the rights of a purchaser that has made progress payments and the rights of a surety that has issued a bond to assure such Borrower’s performance with respect to that Inventory), except the following: "Inventory located outside Liens in favor of Agent, on behalf of itself and Lenders, and Permitted Encumbrances in favor of landlords and bailees to the United States of America that a Revolving Loan Borrower has acquired extent permitted in Section 5.9 hereof (subject to Reserves established by Agent in accordance with the terms of the purchase arrangements between such Revolving Loan Borrower and a supplier and as to which such Revolving Loan Borrower has obtained legal title and that would otherwise be determined by Lender to be Eligible Inventory in all respects which is in transit to the premises of a Customs Broker in the United States of America which is an Eligible Inventory Location or such other Eligible Inventory Location in the United States of AmericaSection 5.9 hereof); provided, that, Inventory subject to the Rolex Security Agreement shall not be deemed to be ineligible solely because of the provisions of this clause (a); provided, further, that, the Congress Rolex Inventory shall not be deemed to be ineligible solely because of the provisions in this clause (a) Lender has a first priority perfected security interest so long as the Congress Rolex Intercreditor is in full force and lien upon such Inventory, effect; (b) Lender has possession of not less than two (2) of a total of three (3) originals of the documents of title with respect to such Inventory and all of the terms and conditions of Section 8 of the Twenty-Seventh Amendment to Loan Agreement, dated as of October 31, 2003, among Lender, Borrowers and Guarantors shall have been satisfied, (c) Lender shall have received (i) a Notification is not located on premises owned, leased or rented by such Borrower and Acknowledgment Agreement, duly authorized, executed and delivered by either or both of the Customs Broker and Freight Forwarder, set forth in Disclosure Schedule (3.2) (as the case same may bebe updated from time to time), handling the shipping and delivery of such Inventory, or (ii) is stored at a copy of the certificate of marine cargo insurance in connection therewith in which it leased location, unless Agent has given its prior consent thereto and unless either (x) a reasonably satisfactory landlord waiver has been named as an additional insured and loss payee in a manner acceptable delivered to LenderAgent, and or (y) Reserves reasonably satisfactory to Agent have been established with respect thereto or (iii) is stored with a copy of the invoicebailee or warehouseman unless a reasonably satisfactory, packing slip acknowledged bailee letter has been received by Agent and manifest Reserves reasonably satisfactory to Agent have been established with respect thereto, or (iv) is located at an owned location subject to a mortgage in favor of a lender other than Agent unless a reasonably satisfactory mortgagee waiver has been delivered to Agent; (c) is placed on consignment or is in transit, except for Inventory in transit between domestic locations of Credit Parties; (d) is covered by a negotiable document of title, unless such document has been delivered to Agent with all necessary endorsements, free and clear of all Liens except those in favor of Agent and Lenders; (e) is obsolete, slow moving, unsalable, shopworn, seconds, damaged or unfit for sale; (f) consists of display items or packing or shipping materials, manufacturing supplies, work-in-process Inventory or replacement parts; (g) is not of a type held for sale in the ordinary course of such Borrower’s business; (h) is not subject to any Letter a first priority lien in favor of Credit AccommodationAgent on behalf of itself and Lenders, subject to Permitted Encumbrances as set forth in clause (e) the aggregate amount of the Value definition thereof (subject to reserves satisfactory to Agent); (i) breaches any of such the representations or warranties pertaining to Inventory set forth in the Loan Documents; (j) consists of any costs associated with “freight-in” charges; (k) consists of Hazardous Materials or goods that can be transported or sold only with licenses that are not readily available; (l) is deemed not covered by casualty insurance reasonably acceptable to Agent; or (m) is subject to any patent or trademark license requiring the payment of royalties or fees or requiring the consent of the licensor for a sale thereof by Agent; provided, however, that, there shall be included as Eligible Inventory shall not at any time exceed $1,000,000, (i) all Rolex Inventory and (fii) such certain Inventory shall not have been in transit for more than sixty (60) dayssubject to the DAR License Agreement with an aggregate cost value of $500,000."

Eligible Inventory. The second sentence Inventory owned by a Borrower that (a) is finished goods or raw materials, and not packaging or shipping materials, labels, samples, display items, bags, replacement parts or manufacturing supplies; (b) is not held on consignment, nor subject to any deposit or down payment (but ineligibility shall be limited to the amount of the definition of Eligible Inventory such deposit or down payment); (c) is hereby deleted in new and replaced saleable condition and is not damaged, defective, shopworn or otherwise unfit for sale; (d) is not slow-moving, perishable, obsolete or unmerchantable, and does not constitute returned or repossessed goods; (e) meets all standards imposed by any Governmental Authority, and does not constitute hazardous materials under any Environmental Law; (f) conforms with the following: "Inventory covenants and representations herein; (g) is subject to Agent’s duly perfected, first priority Lien, and no other Lien; (h) is located outside within the continental United States or Canada, subject to the mutual agreement of America that a Revolving Loan Agent and Borrower has acquired Agent, is not consigned to any Person and is not in accordance with the terms transit, other than Inventory in transit between domestic locations of the purchase arrangements between such Revolving Loan any Borrower and a supplier and as to which Agent’s Liens have been perfected at origin and destination; (i) is not subject to any warehouse receipt or negotiable Document; (j) is not subject to any License or other arrangement that restricts such Revolving Loan Borrower Borrower’s or Agent’s right to dispose of such Inventory, unless Agent has obtained legal title received an appropriate Lien Waiver; (k) is not located on leased premises or in the possession of a warehouseman, processor, repairman, mechanic, shipper, freight forwarder or other Person, unless the lessor or such Person has delivered a Lien Waiver or an appropriate Rent and Charges Reserve has been established; (l) is not subject to a third party’s trademark or other proprietary right, unless Agent is satisfied that would it could sell such Inventory during a Default on terms satisfactory to Agent; (m) is reflected in the details of a current perpetual inventory report; (n) is not subject to any unfavorable capitalized variances; (o) is not identified within the “physical inventory reserve” in the Borrowers’ Financial Statements; (p) is not subject to intercompany profits from intercompany sales; (q) is not subject to vendor rebate accruals but, if so, such Inventory, if otherwise Eligible Inventory, shall only be determined by Lender to be Eligible Inventory in all respects which is in transit excluded to the premises extent of a Customs Broker such rebate accruals; and (r) is not otherwise deemed ineligible by Agent in the United States of America which is an Eligible Inventory Location or such other Eligible Inventory Location in the United States of Americaits Permitted Discretion; provided, that, before determining any Inventory ineligible pursuant to clause (a) Lender has r), Agent shall provide Borrower Agent with prior notice accompanied by a first priority perfected security interest in and lien upon such Inventory, (b) Lender has possession of not less than two (2) of a total of three (3) originals of statement setting forth the documents of title basis for Agent’s good faith determination made with respect to such Inventory and all of the terms and conditions of Section 8 of the Twenty-Seventh Amendment to Loan Agreement, dated as of October 31, 2003, among Lender, Borrowers and Guarantors shall have been satisfied, (c) Lender shall have received (i) a Notification and Acknowledgment Agreement, duly authorized, executed and delivered by either or both of the Customs Broker and Freight Forwarder, as the case may be, handling the shipping and delivery reasonable business judgment of such ineligible. Eligible Work-In-Process Inventory, (ii) a copy of the certificate of marine cargo insurance in connection therewith in which it has been named as an additional insured and loss payee in a manner acceptable to Lender, and (iii) a copy of the invoice, packing slip and manifest with respect thereto, (d) such Inventory is not subject to any Letter of Credit Accommodation, (e) the aggregate amount of the Value of such : Inventory that is deemed to would be Eligible Inventory shall not at any time exceed $1,000,000, and (f) except that such Inventory consists of work-in-process. Borrowers acknowledge that no Inventory shall not have been in transit for more than sixty (60) daysconstitute Eligible Work‑In‑Process Inventory until Agent receives the March 31, 2017 Inventory appraisal."

Eligible Inventory. The second sentence Inventory owned by a Borrower that Lender, in its discretion, deems to be Eligible Inventory. Without limiting the foregoing, no Inventory shall be Eligible Inventory unless it (a) is finished goods and not raw materials, or work-in-process, packaging or shipping materials, labels, samples, display items, bags, replacement parts or manufacturing supplies; (b) is not held on consignment, nor subject to any deposit or down payment; (c) is in new and saleable condition and is not damaged, defective, shopworn or otherwise unfit for sale; (d) is not slow-moving (i.e. Inventory that has not been sold or shipped within twelve (12) months after the date of production), perishable, obsolete or unmerchantable, and does not constitute returned or repossessed goods; except, that, Lender may, in its discretion, deem slow-moving Inventory (i.e. Inventory that has not been sold or shipped within twelve (12) months after the date of production) to be eligible for borrowing purposes, subject to the terms and conditions set forth in the definition of Eligible Inventory is hereby deleted Formula Amount herein; (e) meets all standards imposed by any governmental authority, has not been acquired from an entity subject to any sanction or on any specially designated nationals list maintained by OFAC, and replaced does not constitute hazardous materials under any environmental law; (f) conforms with the following: "Inventory located outside covenants and representations herein; (g) is subject to Lender's duly perfected, first priority Lien, and no other Lien; (h) is within the continental United States of America that a Revolving Loan Borrower has acquired in accordance with the terms of the purchase arrangements between such Revolving Loan Borrower and a supplier and as to which such Revolving Loan Borrower has obtained legal title and that would otherwise be determined by Lender to be Eligible Inventory in all respects which States, is not in transit to the premises except between locations of a Customs Broker in the United States of America which Borrower, and is an Eligible Inventory Location or such other Eligible Inventory Location in the United States of America; not consigned to any Person, provided, that, (a) upon the request of Borrowers, Lender has may, in its sole discretion, deem in-transit Inventory which is held by a first priority perfected security interest in shipping company or carrier and lien upon such “on the water” to be eligible for borrowing purposes so long as Borrowers satisfy Lender’s customary procedures and policies with respect to in-transit Inventory, (b) including, without limitation, delivering customs brokers/freight forwarder waivers, in form and substance satisfactory to Lender, in favor of Lender has possession of not less than two (2) of a total of three (3) originals of the documents of title with respect to such in-transit Inventory and all of the terms executing an amendment to this Agreement to agree to such customary procedures and conditions of Section 8 of the Twenty-Seventh Amendment to Loan Agreement, dated as of October 31, 2003, among Lender, Borrowers and Guarantors shall have been satisfied, (c) Lender shall have received policies; (i) a Notification and Acknowledgment Agreement, duly authorized, executed and delivered by either or both of the Customs Broker and Freight Forwarder, as the case may be, handling the shipping and delivery of such Inventory, (ii) a copy of the certificate of marine cargo insurance in connection therewith in which it has been named as an additional insured and loss payee in a manner acceptable to Lender, and (iii) a copy of the invoice, packing slip and manifest with respect thereto, (d) such Inventory is not subject to any Letter warehouse receipt or negotiable Document; (j) is not subject to any License or other arrangement that restricts a Borrower's or Lender's right to dispose of Credit Accommodationsuch Inventory, unless Lender has received an appropriate Lien Waiver; (k) is located (i) on a premises containing Eligible Inventory with an aggregate Value of at least $50,000, (eii) if such Inventory is located on a leased premises or in the aggregate amount possession of a warehouseman, processor, repairman, mechanic, shipper, freight forwarder or other Person, such lessor or such other Person has delivered a Lien Waiver or an appropriate Reserve has been established, or (iii) if such Inventory is located on a premises owned by a Borrower and such premises is subject to a mortgage, the Value mortgagee of such Inventory that is deemed premises has delivered a mortgagee waiver in form and substance satisfactory to be Eligible Inventory shall not at any time exceed $1,000,000, and (f) such Inventory shall not have been in transit for more than sixty (60) daysLender."

Eligible Inventory. The second sentence Inventory of any Borrower (other than work-in-process, packaging materials and supplies, tooling, samples and literature) which Agent, in its sole judgment, exercised in a commercially reasonable manner, deems to be Eligible Inventory. Without limiting the generality of the definition of foregoing, no Inventory shall be Eligible Inventory if: (i) it is hereby deleted and replaced with not raw materials or finished goods which meet the following: "Inventory located outside the United States of America that a Revolving Loan Borrower has acquired in accordance with the terms specifications of the purchase arrangements between order or contract for such Revolving Loan Inventory, if any; or (ii) it is not in good, new and saleable condition; or (iii) it is slow-moving, obsolete or unmerchantable; or (iv) it does not meet all standards imposed by any governmental agency or authority; or (v) it does not conform in all respects to any covenants, warranties and representations set forth in the Agreement; or (vi) it is not at all times subject to Agent’s duly perfected, first priority security interest or is subject to a Lien that is not a Permitted Lien; or (vii) it is not situated at a location in compliance with the Agreement, provided that Inventory situated at a location not owned by a Borrower and a supplier and as to which such Revolving Loan Borrower has obtained legal title and that would otherwise be determined by Lender to will be Eligible Inventory in all respects which is in transit to the premises of only if Agent has received a Customs Broker in the United States of America which is an Eligible Inventory Location satisfactory landlord’s agreement or such other Eligible Inventory Location in the United States of America; providedbailee letter, thatas applicable, (a) Lender has a first priority perfected security interest in and lien upon such Inventory, (b) Lender has possession of not less than two (2) of a total of three (3) originals of the documents of title with respect to such Inventory location; or (viii) it is in transit; or (ix) it is not otherwise acceptable to Agent in its sole judgment, exercised in a commercially reasonable manner. Environmental Laws – all federal, state and local laws, rules, regulations, ordinances, orders and consent decrees relating to health, safety and environmental matters. ERISA – the Employee Retirement Income Security Act of 1974, as amended, and any successor statute, and all rules and regulations from time to time promulgated thereunder. Event of Default – as defined in Section 10.1 of the terms and conditions Agreement. Existing Mortgage Indebtedness – money borrowed owed by Borrowers in the aggregate principal amount of Section 8 Seven Million One Hundred Six Thousand Dollars ($7,106,000) as of the Twenty-Seventh Amendment to Loan Agreement, dated Closing Date. Fee Letter – as of October 31, 2003, among Lender, Borrowers and Guarantors shall have been satisfied, (c) Lender shall have received (i) a Notification and Acknowledgment Agreement, duly authorized, executed and delivered by either or both defined in Section 2.3 of the Customs Broker and Freight Forwarder, as the case may be, handling the shipping and delivery Agreement. Final Xxxxxxxx Accounts – Accounts owed to Perma-Pipe if arising out of such Inventory, projects for which ninety-five percent (ii95%) a copy or more of the certificate of marine cargo insurance in connection therewith in which it has been named as an additional insured and loss payee in a manner acceptable to Lender, and (iii) a copy of the invoice, packing slip and manifest with respect thereto, (d) such Inventory is not subject to any Letter of Credit Accommodation, (e) the aggregate amount of the Value of such Inventory that is deemed xxxxxxxx to be Eligible Inventory shall not at any time exceed $1,000,000, and (f) made on such Inventory shall not project have been in transit for more than sixty (60) days."occurred. X-0

Eligible Inventory. The second sentence With respect to the Borrower or any of its ------------------ Subsidiaries, finished goods and work in progress and raw materials owned by the Borrower or such Subsidiary; provided that Eligible Inventory shall not include -------- any inventory (i) held on consignment, or not otherwise owned by the Borrower or such Subsidiary, or of a type no longer sold by the Borrower or such Subsidiary, (ii) which has been returned by a customer and is damaged or subject to any legal encumbrance other than Permitted Liens, (iii) which is not in the possession of the definition Borrower or such Subsidiary unless (A) the Loan and Collateral Agent has received a waiver from the party in possession of Eligible Inventory such inventory in form and substance satisfactory to the Loan and Collateral Agent or (B) such inventory is hereby deleted In-Transit Inventory, (iv) which is held by the Borrower or such Subsidiary on property leased by the Borrower or a Subsidiary, unless the Loan and replaced with Collateral Agent has received a waiver from the following: "Inventory located outside lessor of such leased property and, if any, sublessor thereof in form and substance satisfactory to the United States of America that a Revolving Loan Borrower has acquired in accordance with the terms of the purchase arrangements between such Revolving Loan Borrower and a supplier and Collateral Agent, (v) as to which (other than with the case of In- Transit Inventory) appropriate Uniform Commercial Code financing statements showing the Borrower or such Revolving Subsidiary as debtor and the Loan Borrower has obtained legal title and that would otherwise be determined by Lender to be Eligible Inventory in all respects which is in transit to the premises of a Customs Broker Collateral Agent as secured party have not been filed in the United States proper filing office or offices in order to perfect the Loan and Collateral Agent's security interest therein, (vi) which has been shipped to a customer of America which is an Eligible Inventory Location the Borrower or such Subsidiary regardless of whether such shipment is on a consignment basis, (vii) which, other Eligible Inventory Location in than In-Transit Inventory, is not located within the United States of America; provided, that, (aviii) Lender has a first priority perfected security interest in which the Loan and lien upon such InventoryCollateral Agent reasonably deem to be not marketable, (bix) Lender has possession scrap inventory, held coils (i.e. coils not used for initial orders) in excess of not less than two (2) of a total of three (3) originals $1,000,000 at any time, and "Other Inventory" as classified by the Borrower on its financial statements as of the documents of title with respect to such Inventory and all of the terms and conditions of Section 8 of the Twenty-Seventh Amendment to Loan AgreementBalance Statement Date, dated as of October 31, 2003, among Lender, Borrowers and Guarantors shall have been satisfied, or (cx) Lender shall have received (i) a Notification and Acknowledgment Agreement, duly authorized, executed and delivered by either or both of the Customs Broker and Freight Forwarder, as the case may be, handling the shipping and delivery of such Inventory, (ii) a copy of the certificate of marine cargo insurance in connection therewith in which it has been named as an additional insured and loss payee in a manner acceptable to Lender, and (iii) a copy of owned by the invoice, packing slip and manifest with respect thereto, (d) Borrower or such Inventory is not subject to any Letter of Credit Accommodation, (e) the aggregate amount of the Value of such Inventory that is deemed to be Eligible Inventory shall not at any time exceed $1,000,000, and (f) such Inventory shall not have been in transit Subsidiary for more than sixty one (601) daysyear."

Eligible Inventory. The second sentence Upon Borrower's delivery to Lender of the definition an Inventory Report, Lender shall determine which items of Inventory listed thereon are Eligible Inventory. Eligible Inventory is hereby deleted and replaced with shall mean all Inventory other than the following: "Inventory located outside the United States of America that a Revolving Loan Borrower has acquired in accordance with the terms of the purchase arrangements between such Revolving Loan Borrower and a supplier and as to which such Revolving Loan Borrower has obtained legal title and that would otherwise be determined by Lender to be Eligible Inventory in all respects which is in transit to the premises of a Customs Broker in the United States of America which is an Eligible Inventory Location or such other Eligible Inventory Location in the United States of America; provided, that, : (a) Any item of Inventory which is not in salable condition or does not meet all standards imposed by any governmental agency, or department or division thereof, having regulatory authority over such goods, their use or sale or is either not currently useable or currently unsaleable in the ordinary course of Borrower's business or is otherwise unacceptable to Lender has a due to age, type, category or quantity; (b) Any item of Inventory which is not located at one of the locations listed on Exhibit D attached hereto, is not subject to and covered by Lender's first priority perfected security interest in and lien upon such Inventoryor is subject to any other lien, (b) Lender has possession of not less than two (2) of a total of three (3) originals of the documents of title with respect to such Inventory and all of the terms and conditions of Section 8 of the Twenty-Seventh Amendment to Loan Agreementclaim, dated as of October 31encumbrance or security interest, 2003, among Lender, Borrowers and Guarantors shall have been satisfied, except for Permitted Liens; (c) Lender shall have received (i) a Notification and Acknowledgment Agreement, duly authorized, executed and delivered by either or both Any item of the Customs Broker and Freight Forwarder, as the case may be, handling the shipping and delivery of such Inventory, (ii) a copy of the certificate of marine cargo insurance in connection therewith in Inventory which it has been named as an additional insured and loss payee in a manner acceptable consigned, sold or leased to Lender, and (iii) a copy of the invoice, packing slip and manifest with respect thereto, any Person; (d) Any item of Inventory unless each of the warranties and representations set forth in Section 10.4 has been reaffirmed with respect such item of Inventory is not subject at the date that the most recent Inventory Report was delivered to any Letter of Credit Accommodation, Lender; (e) Any item of Inventory which was purchased by Borrower in or as part of a "bulk" transfer or sale of assets unless Borrower, and the aggregate amount of the Value seller of such Inventory that is deemed to be Eligible Inventory shall not at any time exceed $1,000,000item, and have complied with all applicable bulk sales or bulk transfer laws; (f) such Any item of Inventory shall not have been in transit for more than sixty which is work-in-progress, maintenance supplies, spare parts and shipping materials; or (60g) daysSlow-moving packaway Inventory, including seasonal inventory stored at the distribution center and other slow-moving inventory."

Eligible Inventory. The second sentence Any and all raw material and finished goods Inventory of Borrower valued at the definition lower of Eligible Inventory is hereby deleted cost (determined on a first-in/first-out basis) or market value located at Borrower's places of business shown on Schedule "5.2" attached hereto and replaced with the following: "Inventory located outside the United States of America that a Revolving Loan Borrower has acquired in accordance with the terms of the purchase arrangements between such Revolving Loan Borrower made part hereof (and a supplier and as to for which such Revolving Loan Borrower has obtained legal title and that would otherwise be determined by Lender to be Eligible Inventory in all respects which is in transit to the premises of a Customs Broker in the United States of America which is an Eligible Inventory Location or such other Eligible Inventory Location in the United States of America; provided, that, (a) location Lender has received a first priority perfected security interest landlord, warehouse or mortgagee waiver as determined by, and in form and lien upon such Inventorysubstance satisfactory to, (b) Lender has possession of not less than two (2) of a total of three (3) originals of the documents of title with respect to such Inventory and all of the terms and conditions of Section 8 of the Twenty-Seventh Amendment to Loan AgreementLender), dated as of October 31, 2003, among Lender, Borrowers and Guarantors shall have been satisfied, (c) Lender shall have received which (i) a Notification and Acknowledgment Agreement, duly authorized, executed and delivered by either or both of the Customs Broker and Freight Forwarder, as the case may be, handling the shipping and delivery of such Inventory, (ii) a copy of the certificate of marine cargo insurance in connection therewith in which it has been named as an additional insured and loss payee in a manner acceptable to Lender, and (iii) a copy of the invoice, packing slip and manifest with respect thereto, (d) such Inventory is not subject to any Lien (other than Liens granted under this Agreement and Permitted Liens, if applicable); (ii) is not slow moving, damaged, obsolete or unmerchantable, as determined by Lender in its sole discretion; (iii) meets all standards, if any, imposed by any Governmental Authority; (iv) is not Inventory held on consignment; (v) is not Inventory in-transit unless such Inventory (A) is in transit to one of Borrower's places of business shown on Schedule "5.2", (B) is owned by Borrower, (C) is insured to the full value thereof, and (D) is subject to negotiable bills of lading endorsed to, or non-negotiable bills of lading issued in the name of Lender, and covered by a Letter of Credit Accommodationissued under the Revolving Credit; (vi) is situated at a location not owned by Borrower, provided that (ex) the aggregate owner or occupier of such location has executed in favor of Lender a Lien Waiver Agreement or (y) Lender has instituted a reserve to the Borrowing Base in an amount equal to three (3) months’ rent under the lease for such location and (vii) meets such other reasonable specifications and requirements which may from time to time be established by Lender. Environmental Laws – Any and all Federal, foreign, state, local or municipal laws, rules, orders, regulations, statutes, ordinances, codes, decrees and any and all common law requirements, rules and bases of liability regulating, relating to or imposing liability or standards of conduct concerning pollution, protection of the Value environment, or the impact of such Inventory that is deemed to be Eligible Inventory shall not pollutants, contaminants or toxic or hazardous substances on human health or the environment, as now or may at any time exceed $1,000,000, and (f) such Inventory shall not have been hereafter be in transit for more than sixty (60) dayseffect."

Eligible Inventory. The second sentence Upon the delivery by Borrower to Lender of an Inventory Report, Lender shall determine, in its sole and absolute discretion, which items of Inventory listed thereon is Eligible Inventory. In making this determination, Lender will consider the definition of Eligible Inventory is hereby deleted and replaced with the following: "Inventory located outside the United States of America that a Revolving Loan Borrower has acquired in accordance with the terms of the purchase arrangements between such Revolving Loan Borrower and a supplier and as to which such Revolving Loan Borrower has obtained legal title and that would otherwise be determined by Lender to be Eligible Inventory in all respects which is in transit to the premises of a Customs Broker in the United States of America which is an Eligible Inventory Location or such other Eligible Inventory Location in the United States of America; provided, that, following requirements: (a) The item of Inventory is in good condition, meets all standards imposed by any governmental agency, or department or division thereof, having regulatory authority over such goods, their use or sale, is not obsolete, is in good condition and is either currently useable or currently saleable in the ordinary course of Borrower's business and is not otherwise unacceptable to Lender has a first priority due to age, type, category or quantity; (b) The item of Inventory is located at one of the locations of Borrower listed on Exhibit D attached hereto or as otherwise hereinafter agreed to by Lender, is subject to and covered by Lender's perfected security interest in and lien upon such Inventory, (b) Lender has possession of not less than two (2) of a total of three (3) originals of the documents of title with respect to such Inventory and all of the terms and conditions of Section 8 of the Twenty-Seventh Amendment to Loan Agreement, dated as of October 31, 2003, among Lender, Borrowers and Guarantors shall have been satisfied, (c) Lender shall have received (i) a Notification and Acknowledgment Agreement, duly authorized, executed and delivered by either or both of the Customs Broker and Freight Forwarder, as the case may be, handling the shipping and delivery of such Inventory, (ii) a copy of the certificate of marine cargo insurance in connection therewith in which it has been named as an additional insured and loss payee in a manner acceptable to Lender, and (iii) a copy of the invoice, packing slip and manifest with respect thereto, (d) such Inventory is not subject to any Letter other lien, claim, encumbrance or security interest; (c) The item of Credit AccommodationInventory has not been consigned, sold or leased to any Person; (d) Each of the warranties and representations set forth in Section 9.3 has been reaffirmed with respect such item of Inventory at the date that the most recent Inventory Report was delivered to Lender; (e) The item of Inventory was not purchased by Borrower in or as part of a "bulk" transfer or sale of assets unless Borrower, and the aggregate amount of the Value seller of such Inventory that is deemed to be Eligible Inventory shall not at any time exceed $1,000,000item, and have complied with all applicable bulk sales or bulk transfer laws; (f) The item of Inventory does not consist of work-in-process or packaging or supplies; (g) The item of Inventory is not slow moving Inventory, is not out of date Inventory and is not consigned Inventory; (h) The item of Inventory is in the possession of Borrower but is not owned by Borrower; (i) The item of Inventory does not consist of dock fees (or "inside margin" as such term is used or referred to by Borrower); and (j) The item of Inventory shall is not have been stored at a leased or warehouse location, unless in transit for more than sixty (60) daysrespect to such leased or warehouse location, Lender has received a landlord waiver or bailee letter in form and substance acceptable to Lender."

Eligible Inventory. The second sentence All Eligible Inventory is of good and merchantable quality, free from defects. As to each item of Eligible Inventory, such Inventory is (a) owned by Borrower free and clear of all Liens other than Liens in favor of Lender, (b) either located at one of the locations set forth on Schedule E-1 or in transit from one such location to another such location, provided, however, that in the case of Eligible In-Transit Inventory, such Inventory (i) is currently in transit from a location not set forth on Schedule E-1 to a location on Schedule E-1, (ii) title to such Inventory has passed to Borrower, and (iii) such Inventory otherwise conforms with the definition of Eligible Inventory is hereby deleted and replaced with the following: "Inventory located outside the United States of America that a Revolving Loan Borrower has acquired in accordance with the terms of the purchase arrangements between such Revolving Loan Borrower and a supplier and as to which such Revolving Loan Borrower has obtained legal title and that would otherwise be determined by Lender to be Eligible Inventory in all respects which is in transit to the premises of a Customs Broker in the United States of America which is an Eligible Inventory Location or such other Eligible Inventory Location in the United States of America; provided, that, (a) Lender has a first priority perfected security interest in and lien upon such In-Transit Inventory, (b) Lender has possession of not less than two (2) of a total of three (3) originals of the documents of title with respect to such Inventory and all of the terms and conditions of Section 8 of the Twenty-Seventh Amendment to Loan Agreement, dated as of October 31, 2003, among Lender, Borrowers and Guarantors shall have been satisfied, , (c) Lender shall have received (i) not located on real property leased by Borrower, in a Notification and Acknowledgment Agreementcontract warehouse, duly authorizedor other location that is not owned by Borrower, in each case, unless subject to a Collateral Access Agreement executed and delivered by either the lessor, the warehouseman, or both of the Customs Broker and Freight Forwarderother third party, as the case may be, handling and unless segregated or otherwise separately identifiable from goods of others, if any, stored on the premises, (d) not goods that have been returned or rejected by Borrower's customers, (e) not goods that are obsolete or slow moving, restrictive or custom items, work-in-process, or that constitute spare parts, packaging and shipping materials, supplies used or consumed in Borrower's business, xxxx and delivery hold goods, defective goods, "seconds," or Inventory acquired on consignment, and (f) not subject to the rights of other Persons (including rights associated with trademarks, patents, or copyrights) that would expose Lender to any liability (including the payment of any royalty or other sum) or prevent the sale of such Inventorygoods, as determined by Lender in its Permitted Discretion; provided that up to $500,000 (of value—which shall be the lower of cost or fair market value) of Inventory on consignment with Atlantic Research Corporation shall be included in Eligible Inventory if (x) it satisfies the criteria for Eligible Inventory set forth in the definition of Eligible Inventory (other than such consigned inventory is not located at one of the locations set forth on Schedule E-1) and (ii) a copy Borrower has complied with the provisions of the certificate of marine cargo insurance in connection therewith in which it has been named as an additional insured and loss payee in a manner acceptable to LenderSection 9114(1)(a), (b), (c), and (iiid) a copy of the invoiceCode (as in effect prior to July 1, packing slip and manifest with respect thereto2001), (dor Section 9324(b) such Inventory is not subject to any Letter of Credit Accommodation, (e) the aggregate amount of the Value of such Inventory that is deemed to be Eligible Inventory shall not at any time exceed $1,000,000Code (as in effect on and after July 1, and (f) such Inventory shall not have been in transit for more than sixty (60) days2001)."

Eligible Inventory. The second sentence With respect to the Borrower or any of its Subsidiaries, finished goods, work in progress and raw materials and component parts inventory owned by the Borrower or such Subsidiary; provided that Eligible Inventory shall not include any inventory (i) held on consignment, or not otherwise owned by the Borrower or such Subsidiary, or of a type no longer sold by the Borrower or such Subsidiary, (ii) which has been returned by a customer and not saleable in the ordinary course of the definition of Eligible Inventory Borrower's business or is hereby deleted and replaced with damaged or subject to any legal encumbrance other than Permitted Liens, (iii) which is not in the following: "Inventory located outside the United States of America that a Revolving Loan Borrower has acquired in accordance with the terms possession of the purchase arrangements between Borrower or such Revolving Loan Subsidiary unless the Agent has received a waiver from the party in possession of such inventory in form and substance satisfactory to the Agent, (iv) which is held by the Borrower or such Subsidiary on property leased by the Borrower or a Subsidiary, unless the Agent has received a waiver from the lessor of such leased property and, if any, sublessor thereof in form and a supplier and substance satisfactory to the Agent, (v) as to which appropriate Uniform Commercial Code financing statements showing the Borrower or such Revolving Loan Subsidiary as debtor and the Agent as secured party have not been filed in the proper filing office or offices in order to perfect the Agent's security interest therein, (vi) which has been shipped to a customer of the Borrower has obtained legal title and that would otherwise be determined by Lender to be Eligible Inventory in all respects or such Subsidiary regardless of whether such shipment is on a consignment basis, (vii) which is in transit to the premises of a Customs Broker in the United States of America which is an Eligible Inventory Location or such other Eligible Inventory Location in not located within the United States of America; provided, that, or (aviii) Lender has a first priority perfected security interest in and lien upon such Inventory, which the Majority Banks reasonably deem to be obsolete or not marketable. Employee Benefit Plan. Any employee benefit plan within the meaning of (b) Lender has possession of not less than two (2S)3(3) of ERISA maintained of contributed to by the Borrower or any ERISA Affiliate, other than a total Multiemployer Plan. Environmental Laws. Any judgment, decree, order, law, license, rule or regulation pertaining to environmental matters, including without limitation, those arising under the Resource Conservation and Recovery Act ("RCRA"), the Comprehensive Environmental Response, Compensation and Liability Act of three 1980 as amended (3) originals "CERCLA"), the Superfund Amendments and Reauthorization Act of 1986 ("XXXX"), the documents of title with respect Federal Clean Water Act, the Federal Clean Air Act, the Toxic Substances Control Act, or any applicable state or local statutes, regulation, ordinance, order or decree relating to such Inventory and all of the terms and conditions of Section 8 of the Twenty-Seventh Amendment to Loan Agreement, dated as of October 31, 2003, among Lender, Borrowers and Guarantors shall have been satisfied, (c) Lender shall have received (i) a Notification and Acknowledgment Agreement, duly authorized, executed and delivered by either or both of the Customs Broker and Freight Forwarder, as the case may be, handling the shipping and delivery of such Inventory, (ii) a copy of the certificate of marine cargo insurance in connection therewith in which it has been named as an additional insured and loss payee in a manner acceptable to Lender, and (iii) a copy of the invoice, packing slip and manifest with respect thereto, (d) such Inventory is not subject to any Letter of Credit Accommodation, (e) the aggregate amount of the Value of such Inventory that is deemed to be Eligible Inventory shall not at any time exceed $1,000,000, and (f) such Inventory shall not have been in transit for more than sixty (60) daysenvironment."

Eligible Inventory. The second sentence (i) Keep all Eligible Inventory only at the locations in the United States; and (ii) keep all Eligible Inventory only at locations identified on Schedule E-3 (as amended pursuant to Section 5.2), (iii) keep all Eligible Inventory fully covered at not less than their book value under Borrower’s “spares” all risk insurance policies, and (iv) keep all Eligible Inventory from being installed or held for installation on an Aircraft or Engine, or otherwise held, by, for, or on behalf an air carrier as defined in 14 CFR 49. Each Borrower shall, and shall cause each other Spare Parts Loan Party to, also keep all Spare Parts that are Collateral and all Eligible Inventory (except to the extent such Spare Parts are the subject of a Permitted Spare Parts Installation permitted pursuant to Section 5.19(e)(ii)) in fenced areas with readily visible signage indicating that the Spare Parts located at such location are subject to a Lien in favor of Agent or otherwise segregated and not commingled with assets that are not Collateral. (b) Keep all Spare Parts and other Inventory (except to the extent the subject of a Permitted Spare Parts Installation permitted pursuant to Section 5.19(e)) of the definition of Spare Parts Loan Parties not designated as Eligible Inventory only at the locations identified on Schedule E-3 (as amended pursuant to Section 5.2) and not permit any Spare Parts or other Inventory to be located at the premises of or otherwise put into the possession or control of any bailee, warehouseman, FAA repair station, servicer, mechanic, vendor, supplier, or other Person unless a Collateral Access Agreement has been put in place with such Person), provided that: (i) Borrower may amend Schedule E-3 pursuant to Section 5.2 to add additional locations so long as: (A) such amendment occurs by written notice to Agent not less than 10 Business Days prior to the date on which any Spare Parts are moved to such new location, and (B) such new location is hereby deleted within the United States; (ii) any Spare Part that is not Eligible Inventory may be transported to or from, or be in the possession of or under the control of, a bailee, warehouseman, FAA repair station, overhaul or maintenance servicer, mechanic, or similar Person for purposes of repair in the ordinary course of Borrower’s business without a Collateral Access Agreement so long as either (A) no Event of Default has occurred and replaced is continuing or would result therefrom, or (B) the aggregate book value of all such Spare Parts in the possession of or under the control of all such Persons, in the aggregate, does not exceed $2,000,000; (iii) so long as such transit is in the United States and in the ordinary course of Borrower’s business, the Spare Parts Loan Parties may move Spare Parts that are not Eligible Inventory to any location identified on Schedule E-3; (iv) so long as (A) no Event of Default has occurred and is continuing or would result therefrom, (B) such transit is in the ordinary course of Borrower’s business, and (C) the aggregate book value of all Spare Parts moved to all such foreign locations, in the aggregate, does not exceed $2,500,000 (provided that Spare Parts at such foreign locations shall not count against the dollar amount of Spare Parts permitted to be maintained with third parties pursuant to Section 5.19(b)(ii)(B)), the following: "Spare Parts Loan Parties may move Spare Parts that are not Eligible Inventory located to any location outside the United States (including locations outside the United States where such Spare Parts are in the possession of America or under the control of a bailee, warehouseman, FAA repair station, overhaul or maintenance servicer, mechanic, or similar Person); (v) so long as such transit is in the ordinary course of Borrower’s business, the Spare Parts Loan Parties may move Spare Parts that are not Eligible Inventory from any location outside the United States to any other location outside the United States; (vi) so long as such transit is in the ordinary course of Borrower’s business, the Spare Parts Loan Parties may move Spare Parts that are not Eligible Inventory to the location of Aircraft, Engines, flight simulators or other Equipment to complete a Revolving Permitted Spare Parts Installation that is permitted pursuant to Section 5.19(e); and (vii) the Spare Parts Loan Borrower has acquired Parties may move Spare Parts that are not Eligible Inventory pursuant to pool, exchange or lease transactions permitted pursuant to Section 5.19(e). (c) Maintain in accordance effect a Spare Parts Tracking System. (d) Maintain, with respect to Spare Parts, all records, logs, serviceability tags and other documents and materials required by applicable law, including the terms of FARs, or by the purchase arrangements between such Revolving Spare Parts Loan Borrower and a supplier and as to which such Revolving Loan Borrower has obtained legal title and that would otherwise be determined by Lender Parties' Maintenance Program. (e) Not permit any Spare Parts to be leased, sold, exchanged, attached or installed on any Aircraft, Engine, flight simulator, or other Equipment, or otherwise disposed of; provided, however, that (i) so long as no Overadvance (as defined under the DIP Revolving Credit Agreement) is outstanding or would result therefrom (after having removed any such Eligible Inventory from the Borrowing Base (as defined under the DIP Revolving Credit Agreement)), the Spare Parts Loan Parties may sell Spare Parts that are not Eligible Inventory in all respects which is in transit to the premises ordinary course of a Customs Broker in the United States of America which is an Eligible Inventory Location or such other Eligible Inventory Location in the United States of America; provided, that, (a) Lender has a first priority perfected security interest in and lien upon such Inventory, (b) Lender has possession of not less than two (2) of a total of three (3) originals of the documents of title with respect to such Inventory and all of the terms and conditions of Section 8 of the Twenty-Seventh Amendment to Loan Agreement, dated as of October 31, 2003, among Lender, Borrowers and Guarantors shall have been satisfied, (c) Lender shall have received (i) a Notification and Acknowledgment Agreement, duly authorized, executed and delivered by either or both of the Customs Broker and Freight Forwarder, as the case may be, handling the shipping and delivery of such InventoryBorrower’s business, (ii) a copy of so long as no Overadvance (as defined under the certificate of marine cargo insurance in connection therewith in which it has been named as an additional insured and loss payee in a manner acceptable to LenderDIP Revolving Credit Agreement) is outstanding or would result therefrom, Borrower may make Permitted Spare Parts Installations with Eligible Inventory, (iii) the Spare Parts Loan Parties may make Permitted Spare Parts Installations with Spare Parts (other than Eligible Inventory), and (iiiiv) a copy of the invoice, packing slip and manifest with respect theretoto Spare Parts that are not Eligible Inventory, the Spare Parts Loan Parties may pool, exchange, or lease such Spare Parts in the ordinary course of business so long as (dx) such Inventory no Event of Default has occurred and is not subject to any Letter of Credit Accommodation, continuing or would result therefrom and (ey) the aggregate amount book value of all such Spare Parts, in the Value of such Inventory that is deemed to be Eligible Inventory shall aggregate, does not at any time exceed $1,000,000, and . (f) such Each Borrower, on behalf of each of its Subsidiaries, hereby waives any and all rights that it has or may have in the future to assert or claim against Agent or any of the Lenders or any transferee pursuant to the exercise of remedies under any of the Loan Documents, any mechanic's, repairer's, servicer's, xxxxxx'x or other Lien against any Collateral, including any Spare Parts, Engines, or Aircraft constituting Collateral. Not permit any of its Spare Parts to be located at the premises of or otherwise put into the possession or control of any bailee, warehouseman, FAA repair station, servicer, mechanic, vendor, supplier, or similar Person except: that any Spare Part that is not an Eligible Inventory shall not have been may be in transit for more than sixty the possession of or under the control of a bailee, warehouseman, FAA repair station, overhaul or maintenance servicer, mechanic, or similar Person to the extent expressly permitted by (60but without duplication of) daysSection 5.19(b)."

Eligible Inventory. The second sentence Upon Borrower's delivery to Lender of the definition an Inventory Report, Lender shall, in its reasonable credit judgment, determine which items of Inventory and Gaming Supply Inventory listed thereon are Eligible Inventory is hereby deleted and replaced with Gaming Supply Eligible Inventory. Without limiting Lender's discretion to make such determination, the following: "Inventory located outside the United States of America that a Revolving Loan Borrower has acquired in accordance with the terms of the purchase arrangements between such Revolving Loan Borrower and a supplier and as to which such Revolving Loan Borrower has obtained legal title and that would otherwise be determined by Lender to be Eligible Inventory in all respects which is in transit to the premises of a Customs Broker in the United States of America which is an Eligible Inventory Location or such other Eligible Inventory Location in the United States of America; provided, that, (a) Lender has a first priority perfected security interest in and lien upon such Inventory, (b) Lender has possession of not less than two (2) of a total of three (3) originals of the documents of title with respect to such following Inventory and all of the terms and conditions of Section 8 of the Twenty-Seventh Amendment to Loan Agreement, dated as of October 31, 2003, among Lender, Borrowers and Guarantors Gaming Supply Inventory shall have been satisfied, (c) Lender shall have received (i) a Notification and Acknowledgment Agreement, duly authorized, executed and delivered by either or both of the Customs Broker and Freight Forwarder, as the case may be, handling the shipping and delivery of such Inventory, (ii) a copy of the certificate of marine cargo insurance in connection therewith in which it has been named as an additional insured and loss payee in a manner acceptable to Lender, and (iii) a copy of the invoice, packing slip and manifest with respect thereto, (d) such Inventory is not subject to any Letter of Credit Accommodation, (e) the aggregate amount of the Value of such Inventory that is be deemed to be Eligible Inventory shall and Gaming Supply Eligible Inventory: (A) Any Inventory and any Gaming Supply Inventory which is slow moving, is not in good condition, does not meet all standards imposed by any governmental agency, or department or division thereof, having regulatory authority over such goods (including the use or sale thereof), is not currently useable or currently saleable in the ordinary course of Borrower's or Gaming Supply's businesses, or is otherwise unacceptable to Lender due to age, type, category or quantity; (B) Any Inventory and any Gaming Supply Inventory which (i) is not located at one of the locations listed on Exhibit 3.2(B) attached hereto, (ii) is in the possession of, or located on the premises of, a bailee, warehouseman, processor, vendor or other third party, unless Borrower has delivered to Lender an appropriate waiver from such party in form and substance satisfactory to Lender, (iii) is not subject to and covered by Lender's security interest or (iv) is subject to any time exceed $1,000,000other lien, claim, encumbrance or security interest other than liens, claims, encumbrances or security interests in favor of NatWest and subject to the terms of the Intercreditor Agreement; (C) Any Inventory and any Gaming Supply Inventory which has been consigned, bailed, sold or leased to any Person; (D) Any Inventory and Gaming Supply Inventory with respect to which the representations and warranties set forth in Section 9.3 have not been reaffirmed and ratified as of the date of the most recent Inventory Report delivered to Lender; (E) Any Inventory and any Gaming Supply Inventory which was purchased by Borrower or Gaming Supply in or as part of a "bulk" transfer or sale of assets unless Borrower or Gaming Supply, as applicable, and (f) the seller of such Inventory shall not or Gaming Supply Inventory have been in transit for more than sixty (60) days."complied with all applicable bulk transfer laws;

Eligible Inventory. The second sentence following shall constitute the Eligibility Criteria for acceptance of Inventory for inclusion in the Borrowing Base All Inventory of the definition Loan Parties, valued at the lower cost or market in accordance with GAAP, but excluding any Inventory having any of Eligible the following characteristics: (a) Inventory that is hereby deleted in-transit; located at any warehouse, job site or located on any other premises that may be subject to the Lien of any person other than the Collateral Agent; (b) Inventory that is otherwise not subject to a duly perfected first priority Lien in the Collateral Agent’s favor; (c) Inventory that is subject to (x) a Lien in favor of any Person other than the Lender other than the ABDC Lien that is subject to the ABDC Intercreditor Agreement and replaced (y) the Lien of a supplier or similar creditor of any of the Loan Parties that is subject to a Supplier Intercreditor Agreement; (d) Inventory covered by any negotiable or non-negotiable warehouse receipt, xxxx of lading or other document of title; on consignment from any Person; on consignment to any Person or subject to any bailment unless such consignee or bailee has executed an agreement with the following: "Lender; (e) Supplies, packaging, parts or sample Inventory, or customer supplied parts or Inventory; (f) Work-in-process Inventory; (g) Inventory located that is damaged, defective, obsolete, slow moving or not currently saleable in the normal course of the Borrower’s operations, or the amount of such Inventory that has been reduced by shrinkage; (h) Inventory that the Borrower has returned, has attempted to return, is in the process of returning or intends to return to the vendor thereof; (i) Inventory that is perishable or live or 30 days from expiration; (j) Inventory stored at locations outside the United States States; (k) Inventory formulated by a Loan Party pursuant to a license unless the applicable licensor has agreed in writing to permit the Collateral Agent to exercise its rights and remedies against such Inventory; and (l) Inventory that is classified as controlled substances, C2 or other controlled substances or pharmaceuticals unless the applicable Loan Party (i) possesses a specialized license from the U.S. Drug Enforcement Agency or other federal, state or local authority to sell or dispose of America same, or (ii) is not otherwise prohibited under applicable law from selling or otherwise disposing of same. Reference is made to the credit agreement, dated as of March 25, 2010 (as amended, restated, supplemented, waived or otherwise modified from time to time, the “Credit Agreement”), among BioScrip, Inc., a Delaware corporation (“Borrower”), the Subsidiary Guarantors, the Lenders, Jefferies Finance LLC, as administrative agent (in such capacity, the “Administrative Agent”), as lead arranger, as book manager and as collateral agent for the Secured Parties, ING Capital LLC, as syndication agent, Compass Bank, as a co-documentation agent, General Electric Capital Corporation, a co-documentation agent, HFG Healthco-4, LLC, as swingline lender for the Lenders, and Healthcare Finance Group, LLC, collateral manager and as issuing bank for the Lenders. Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement. 1. (the “Assignor”) hereby irrevocably sells and assigns, without recourse, to the Assignee, and the Assignee hereby irrevocably purchases and assumes, from the Assignor, without recourse to the Assignor, effective as of the Effective Date set forth below (but not prior to the registration of the information contained herein in the Register pursuant to Section 11.04(c) of the Credit Agreement), the interests set forth below (the “Assigned Interest”) in the Assignor’s rights and obligations under the Credit Agreement and the other Loan Documents, including, without limitation, the Swingline Commitment, Revolving Commitment, Term Loan Commitment and the Swingline Loans, Revolving Loans, Term Loans and participations held by the Assignor in Letters of Credit which are outstanding on the Effective Date. From and after the Effective Date (i) the Assignee shall be a party to and be bound by the provisions of the Credit Agreement and, to the extent of the interests assigned by this Assignment and Acceptance, have the rights and obligations of a Lender thereunder and under the Loan Documents and (ii) the Assignor shall, to the extent of the interests assigned by this Assignment and Acceptance, relinquish its rights and be released from its obligations under the Credit Agreement. 2. The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the interest being assigned hereby free and clear of any lien, encumbrance or other adverse claim created by the Assignor and that its Commitments, and the outstanding balances of its Loans, without giving effect to assignments thereof which have not become effective, are as set forth in this Assignment and Acceptance and (ii) it has all necessary power and authority, and has taken all action necessary, to execute and deliver this Assignment and Acceptance and to consummate the transactions contemplated hereby; and (b) except as set forth in (a) above, the Assignor makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with the Credit Agreement, or the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Credit Agreement, any other Loan Document or any other instrument or document furnished pursuant thereto, or the financial condition of any Loan Party or the performance or observance by any Loan Party of any of its obligations under the Credit Agreement, any other Loan Document or any other instrument or document furnished pursuant thereto. 3. The Assignee (a) represents and warrants that (i) it is legally authorized to enter into this Assignment and Acceptance and (ii) it has all necessary power and authority, and has taken all action necessary, to execute and deliver this Assignment and Acceptance and to consummate the transactions contemplated hereby and become a Revolving Lender under the Credit Agreement; (b) confirms that it has received a copy of the Credit Agreement, and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Acceptance; (c) agrees that it will, independently and without reliance upon the Assignor, the Agents or any Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Agreement, the other Loan Borrower has acquired Documents or any other instrument or document furnished pursuant hereto or thereto; (d) appoints and authorizes the Agents to take such action as agents on its behalf and to exercise such powers and discretion under the Credit Agreement, the other Loan Documents or any other instrument or document furnished pursuant hereto or thereto as are delegated to the Agents by the terms thereof, together with such powers as are incidental thereto; and (e) agrees that it will be bound by the provisions of the Credit Agreement and will perform in accordance with its terms all the obligations which by the terms of the purchase arrangements between such Revolving Loan Borrower and a supplier and as to which such Revolving Loan Borrower has obtained legal title and that would otherwise be determined by Lender Credit Agreement are required to be Eligible Inventory performed by it as a Lender. 4. The effective date of this Assignment and Acceptance shall be the Effective Date of Assignment described in all respects which is in transit Schedule 1 hereto (the “Effective Date”). Following the execution of this Assignment and Acceptance, it will be delivered to the premises Administrative Agent for acceptance by it and recording by the Administrative Agent pursuant to the Credit Agreement, effective as of the Effective Date (which shall not, unless otherwise agreed to by the Administrative Agent, in its sole discretion, be earlier than three Business Days after the date of such acceptance and recording by the Administrative Agent). This Assignment and Acceptance will be delivered to the Administrative Agent together with (a) if the Assignee is a Customs Broker Foreign Lender, the forms specified in Section 2.15(e) of the United States Credit Agreement, duly completed and executed by such Assignee; (b) if the Assignee is not already a Lender under the Credit Agreement, an Administrative Questionnaire, and (c) a processing and recordation fee of America $3,500, if required under the Loan Documents. 5. Upon such acceptance and recording, from and after the Effective Date, the Administrative Agent shall make all payments in respect of the Assigned Interest (including payments of principal, interest, fees and other amounts) [to the Assignor for amounts which is an Eligible Inventory Location have accrued to the Effective Date and to the Assignee for amounts which have accrued subsequent to the Effective Date] [to the Assignee whether such amounts have accrued prior to the Effective Date or such other Eligible Inventory Location accrue subsequent to the Effective Date. The Assignor and the Assignee shall make all appropriate adjustments in payments by the United States Administrative Agent for periods prior to the Effective Date or with respect to the making of America; provided, thatthis assignment directly between themselves.] 6. From and after the Effective Date, (a) Lender has the Assignee shall be a first priority perfected security interest party to the Credit Agreement and, to the extent provided in this Assignment and lien upon such InventoryAcceptance, have the rights and obligations of a lender thereunder and under the other Loan Documents and shall be bound by the provisions thereof and (b) Lender has possession the Assignor shall, to the extent provided in this Assignment and Acceptance, relinquish its rights and be released from its obligations under the Credit Agreement. 7. This Assignment and Acceptance shall be construed in accordance with and governed by the law of not less than two (2the State of New York without regard to conflicts of law principles that would require the application of the laws of another jurisdiction. Effective Date of Assignment: Legal Name of Assignor: Legal Name of Assignee: Assignee’s Address for Notices: Percentage Assigned of Applicable Loan/Commitment: Loan/Commitment Principal Amount Assigned all Lenders thereunder) Term Loans $ % Revolving Loans $ % Letters of Credit $ % Swingline Loans $ % [Signature Page Follows] The terms set forth above are hereby agreed to: [ ] as Assignor By: Name: Title: as Assignee By: Name: Title: Accepted:* BIOSCRIP, INC. By: Name: Title: JEFFERIES FINANCE LLC, as Administrative Agent By: Name: Title: [ ], as [Swingline Lender/Issuing Bank]** By: Name: Title: * To be completed to the extent consent of Borrower and/or Administrative Agent is required under Section 11.04(b) of a total of three (3) originals the Credit Agreement. ** To be completed to the extent consent of the documents of title with respect to such Inventory and all Swingline Lender or Issuing Bank is required under Section 11.04(b) of the terms Credit Agreement. Jefferies Finance LLC, as Administrative Agent for the Lenders referred to below 000 Xxxxxxx Xxxxxx Xxx Xxxx, Xxx Xxxx 00000 Attention: Account Manager — BioScrip Facsimile: (000) 000-0000 Re: BioScrip, Inc. [Date] Ladies and conditions of Section 8 of Gentlemen: Reference is made to the Twenty-Seventh Amendment to Loan Agreementcredit agreement, dated as of October 31March 25, 20032010 (as amended, restated, supplemented, waived or otherwise modified from time to time, the “Credit Agreement”), among LenderBioScrip, Borrowers Inc., a Delaware corporation (“Borrower”), the Subsidiary Guarantors, the Lenders, Jefferies Finance LLC, as administrative agent, as lead arranger, as book manager and Guarantors as collateral agent for the Secured Parties, ING Capital LLC, as syndication agent, Compass Bank, as a co-documentation agent, General Electric Capital Corporation, a co-documentation agent, HFG Healthco-4, LLC, as swingline lender for the Lenders, and Healthcare Finance Group, LLC, as collateral manager and as issuing bank for the Lenders. Capitalized terms used but not defined herein shall have been satisfied, (c) Lender shall have received (i) the meaning assigned to such terms in the Credit Agreement. Borrower hereby gives you notice pursuant to Section 2.03 of the Credit Agreement that it requests a Notification and Acknowledgment Borrowing under the Credit Agreement, duly authorized, executed and delivered by either or both of the Customs Broker and Freight Forwarder, as the case may be, handling the shipping and delivery of such Inventory, (ii) a copy of the certificate of marine cargo insurance that in connection therewith sets forth below the terms on which such Borrowing is requested to be made: (A) Class of Borrowing: [Revolving Borrowing] [Term Borrowing] (B) Principal amount of Borrowing:1 (C) Date of Borrowing (which is a Business Day): (D) Type of Borrowing: [ABR Borrowing] [Eurodollar Borrowing] (E) Interest Period and the last day thereof:2 (F) Funds are requested to be disbursed to Borrower’s account with: Account No. Borrower hereby represents and warrants that the conditions to lending specified in which it has been named as an additional insured and loss payee in a manner acceptable to Lender, and (iiiSections 4.02(b)-(d) a copy of the invoice, packing slip and manifest with respect thereto, (d) such Inventory is not subject to any Letter of Credit Accommodation, (e) the aggregate amount Agreement are satisfied as of the Value date hereof. 1 See Section 2.02(a) of such Inventory that is deemed to be Eligible Inventory shall not at any time exceed $1,000,000, and (f) such Inventory shall not have been in transit the Credit Agreement for more than sixty (60) daysminimum borrowing amounts."

Eligible Inventory. The second sentence of Agent shall have the definition of Eligible Inventory is hereby deleted and replaced with the following: "Inventory located outside the United States of America that a Revolving Loan Borrower has acquired sole right, in its sole reasonable discretion exercised in accordance with its customary business practices, to determine which Inventory of Borrowers is eligible (the terms "Eligible Inventory"). Without limiting Agent's discretion, the following Inventory shall not be Eligible Inventory: (i) Inventory which is obsolete, not in good condition, or not either currently usable or currently salable in the ordinary course of the purchase arrangements between such Revolving Loan Borrower applicable Borrower's business; (ii) Inventory other than blank T-shirt stock, current calendar model year die-cast finished goods and a supplier and as prior calendar model year die-cast finished goods, (iii) Inventory which Agent determines, in the exercise of Agent's sole reasonable discretion exercise in accordance with Agent's customary business practices, to be unacceptable due to age, type, category and/or quantity; (iii) Inventory of any Person other than Borrowers; (iv) Inventory with respect to which such Revolving Loan Borrower has obtained legal title Agent, on behalf of Lenders, does not have a first and that would valid fully perfected Lien; (v) QVC Inventory or any other Inventory which is stored or placed with a bailee, consignee, warehouseman, supplier, lessor or similar party, unless otherwise be determined by Lender deemed to be Eligible Inventory by Agent in all respects which is in transit to the premises of a Customs Broker in the United States of America which is an Eligible Inventory Location or such other Eligible Inventory Location in the United States of Americaits sole discretion; provided, thatthat QVC Inventory shall not be deemed ineligible by virtue of the criteria set forth in this clause (v) so long as (1) such Inventory is held on consignment by QVC at a location owned or leased by QVC, Inc., (a) Lender has a first priority perfected security interest in and lien upon such Inventory, (b) Lender has possession of not less than two (2) of a total of three (3) originals of the documents of title with respect to such Inventory and all of the terms and conditions of Section 8 of the Twenty-Seventh Amendment to Loan Agreement, dated as of October 31, 2003, among Lender, Borrowers and Guarantors shall have been satisfied, (c) Lender shall have received (i) a Notification and Acknowledgment Agreement, duly authorized, executed and delivered by either or both of the Customs Broker and Freight Forwarder, as the case may be, handling the shipping and delivery of such Inventory, (ii) a copy of the certificate of marine cargo insurance in connection therewith in which it has been named as an additional insured and loss payee in a manner acceptable to Lender, and (iii) a copy of the invoice, packing slip and manifest with respect thereto, (d) such Inventory is not otherwise ineligible under any of the other criteria set forth in this subsection 3.10, (3) such Inventory is owned by the applicable Borrower, whose ownership interest in such Inventory is prior to all creditors of QVC, Inc. and has been perfected in accordance with Section 9-114 of the Code (and Borrowers have provided written evidence thereof to Agent), (4) Agent, on behalf of Lenders, shall have a first and valid fully perfected Lien on such Inventory and (5) Agent and QVC, Inc. shall have entered into a bailee letter with respect to all Inventory at such location in form and substance satisfactory to Agent; (vi) Inventory delivered to any Borrower on consignment; (vii) Inventory which is not located at one of the locations designated on Schedule 3.10 hereof or at one of the other locations permitted under subsection 8.10 hereof; (viii) Inventory for which any Borrower has invoiced the customer, whether or not the customer has paid for such Inventory; (ix) Inventory the completion of manufacture or sale of which by Agent following a Default would require the consent of, or royalty payments to, any third party, except for Inventory subject to the rights of licensees under Motor Sports License Agreements entered into in the ordinary course of business; and (x) Inventory with respect to which any Letter disclosure is required in the applicable Monthly Report or Collateral Report in accordance with subsection 3.11 hereof. In the event that previously scheduled Inventory having a value in excess of Credit Accommodation, (e) $200,000 in the aggregate amount of the Value of such Inventory that is deemed ceases to be Eligible Inventory under the above-described criteria, Borrower Representative shall not at notify Agent thereof promptly after any time exceed $1,000,000, and (f) such Inventory shall not have been in transit for more than sixty (60) daysBorrower has obtained knowledge thereof."

Eligible Inventory. The second sentence of the definition of Eligible Inventory owned by a Borrower that is hereby deleted and replaced with the following: "Inventory located outside the United States of America that a Revolving Loan Borrower has acquired deemed by Agent, in accordance with the terms of the purchase arrangements between such Revolving Loan Borrower and a supplier and as to which such Revolving Loan Borrower has obtained legal title and that would otherwise be determined by Lender its Permitted Discretion, to be Eligible Inventory; provided that, no Inventory in all respects which is in transit to the premises of a Customs Broker in the United States of America which is an shall be Eligible Inventory Location or such other Eligible Inventory Location in the United States of America; provided, that, unless it (a) Lender is located at a Borrower’s principal place of business or any other facility storing cased goods and/or bulk wine that (i) complies with such Borrower’s related representations and warranties contained in this Agreement, and (ii) has a first priority perfected security interest in and lien upon Inventory with an aggregate Value of not less than $100,000 at such Inventorylocation, (b) Lender is not used, returned, obsolete, spoiled, inadequately sealed, packaged or stored, or otherwise unmerchantable, consigned, demonstrative or custom inventory, supplies (other than bulk wine), packing or shipping materials, (c) is (i) bulk whiskey and other bulk spirits, (ii) bulk wine, (iii) wholesale “FOB” cased wine or wholesale “FOB” cased spirits for which the stock keeping units have a Value in excess of $1,000, (iv) Retail Wine sold under a label that has possession been approved by Agent in its Permitted Discretion and for which the stock keeping units have a Value in excess of $1,000, or (v) Late Release Wine up to an aggregate value of $5,000,000, provided, that with respect to wholesale “FOB” cased wine and Retail Wine, it must be either (x) white wine that is not less older than two three years following December 31 of its vintage year, or (y) red wine that is either (1) not older than four years following December 31 of its vintage year, or (2) more than four years old following December 31 of a total of three its vintage year but does not exceed $10,000,000 in the aggregate in Value, or (3z) originals of non-vintage wine that is either (1) sparkling wine or is sold under the documents of title label “Middle Sister” but does not exceed $8,000,000 in the aggregate in Value, or (2) other non-vintage wine that is not older than one year following its release date; provided, further, that with respect to such Inventory wholesale “FOB” cased spirits they must not be older than one year from their release date and they must not exceed $8,000,000 in the aggregate in Value; (d) is not held on consignment, nor subject to any deposit or down payment; (e) meets all standards imposed by any Governmental Authority; (f) conforms with the covenants and representations herein; (g) is subject to Agent’s duly perfected, first priority Lien, and no other Lien (other than (x) Permitted Liens, and (y) any other Lien with respect to which Agent has established an appropriate reserve in its Permitted Discretion); (h) is within the continental United States, is not in transit (except (x) between locations of the terms Borrowers, or (y) to another location disclosed to Agent with respect to which Agent has received an appropriate Lien Waiver or established an appropriate reserve in its Permitted Discretion, and conditions of Section 8 of the Twenty-Seventh Amendment is not consigned to Loan Agreement, dated as of October 31, 2003, among Lender, Borrowers and Guarantors shall have been satisfied, (c) Lender shall have received any Person; (i) a Notification and Acknowledgment Agreement, duly authorized, executed and delivered by either or both of the Customs Broker and Freight Forwarder, as the case may be, handling the shipping and delivery of such Inventory, (ii) a copy of the certificate of marine cargo insurance in connection therewith in which it has been named as an additional insured and loss payee in a manner acceptable to Lender, and (iii) a copy of the invoice, packing slip and manifest with respect thereto, (d) such Inventory is not subject to any Letter of Credit Accommodation, warehouse receipt or negotiable Document; (ej) the aggregate amount of the Value is not subject to any License or other arrangement that restricts such Borrower’s or Agent’s right to dispose of such Inventory that Inventory, unless Agent has received an appropriate Lien Waiver or established an appropriate reserve in its Permitted Discretion; (k) is deemed to be Eligible Inventory shall not at any time exceed $1,000,000located on leased premises or in the possession of a warehouseman, processor, repairman, mechanic, shipper, freight forwarder or other Person, unless the lessor or such Person has delivered a Lien Waiver or an appropriate Rent and Charges Reserve has been established; (l) is reflected in the details of a current perpetual inventory report; and (fm) such Inventory shall not have been is subject to a Lien Waiver if it is held in transit for more a wine barrel in which any Person other than sixty (60) daysAgent has a Lien."