BIOSCRIP, INC. (NASDAQ:BIOS) Files An 8-K Entry into a Material Definitive Agreement

Item 1.01 Entry into a Material Definitive Agreement.

On June 29, 2017, BioScrip, Inc. (the Company) and its
subsidiaries entered into various agreements to which they will
issue new senior secured notes, common stock and warrants to
purchase common stock and refinance their existing senior secured
credit facilities. The consummation of the transactions
contemplated by the various agreements is expected to take place
later in the day on June 29, 2017 (the date of closing, the
Closing Date). The information set forth under items 1.02, 2.03
and 3.02 of this report is incorporated in this item 1.01 by
reference in its entirety.

Notes Facilities

On June 29, 2017, the Company entered into (i) a first lien note
purchase agreement (the First Lien Note Facility), among the
Company, which is the issuer under the agreement, the financial
institutions and note purchasers from time to time party to the
agreement (the First Lien Note Purchasers), and Wells Fargo Bank,
National Association, in its capacity as collateral agent for
itself and the First Lien Note Purchasers (the First Lien
Collateral Agent), to which the Company will issue first lien
senior secured notes in an aggregate principal amount of $200
million (the First Lien Notes); and (ii) a second lien note
purchase agreement (the Second Lien Note Facility and, together
with the First Lien Note Facility, the Notes Facilities) among
the Company, which is the issuer under the agreement, the
financial institutions and note purchasers from time to time
party to the agreement (the Second Lien Note Purchasers), and
Wells Fargo Bank, National Association, in its capacity as
collateral agent for itself and the Second Lien Note Purchasers
(the Second Lien Collateral Agent and, together with the First
Lien Collateral Agent, the Collateral Agent), to which the
Company (a) will issue second lien senior secured notes in an
aggregate initial principal amount of $100 million (the Initial
Second Lien Notes) and (b) has the ability to draw upon the
Second Lien Note Facility and issue second lien delayed draw
senior secured notes in an aggregate initial principal amount of
$10 million for a period of 18 months after the Closing Date,
subject to certain terms and conditions (the Second Lien Delayed
Draw Notes and, together with the Initial Second Lien Notes, the
Second Lien Notes; the Second Lien Notes, together with the First
Lien Notes, the Notes). Funds managed by Ares Management L.P.
(Ares) are acting as lead purchasers for the Notes Facilities.

On the Closing Date, the Company will utilize the proceeds of the
sale of the First Lien Notes and the Initial Second Lien Notes to
the Note Facilities to repay in full (i) all amounts outstanding
under its Credit Agreement dated as of July 31, 2013, with
SunTrust Bank, Jefferies Finance LLC and Morgan Stanley Senior
Funding, Inc. (as amended, the Existing Senior Credit Facility)
and (b) all amounts outstanding under its Priming Credit
Agreement, dated as of January 6, 2017, among the Issuer, the
lenders from time to time party thereto and SunTrust Bank, as
administrative agent (the Priming Credit Agreement and, together
with the Existing Senior Credit Facility, the Existing Credit
Agreements). Each of the Existing Credit Agreements will be
terminated following such repayment. The Company intends to use
the remaining proceeds (which the Company anticipates would be
approximately $16.6 million after payment of all fees and
expenses of the transaction) of the Notes Facilities and the
Private Placement (defined below) for working capital and general
corporate purposes.

First Lien Note Facility

The First Lien Notes accrue interest, payable monthly in arrears,
at a floating rate or rates equal to, at the option of the
Company, (i) the base rate (defined as the highest of the Federal
Funds Rate plus 0.5% per annum, the Prime Rate as published by
The Wall Street Journal and the one-month London Interbank
Offered Rate (LIBOR) (subject to a 1.0% floor) plus 1.0%), or
(ii) the one-month LIBOR rate (subject to a 1.0% floor), plus a
margin of 6.0% if the base rate is selected or 7.0% if the LIBOR
Option is selected. The First Lien Notes mature on August 15,
2020, provided that if the Companys existing 8.875% Senior Notes
due 2021 (the Senior Notes), are refinanced prior to August 15,
2020, then the scheduled maturity date of the First Lien Notes
shall be June 30, 2022.

The First Lien Notes will amortize in equal quarterly
installments equal to 0.625% of the aggregate principal amount of
the First Lien Note Facility, commencing on September 30, 2019,
and on the last day of each third month thereafter, with the
balance payable at maturity. The First Lien Notes are pre-payable
at the Companys option at specified premiums to the principal
amount that will decline over the term of the First Lien Note
Facility. If the First Lien Notes are prepaid prior to the second
anniversary of the Closing Date, the Company will be required to
pay a make-whole premium based on the present value (using a
discount rate based on the specified treasury rate plus 50 basis
points) of all remaining interests payments on the First Lien
Notes being prepaid prior to the second anniversary of the
Closing Date, plus 4.0% of the principal amount of First Lien
Notes being prepaid. On or after the second anniversary of the
Closing Date, the prepayment premium is 4.0%, which declines to
2.0% on or after the third anniversary of the Closing Date, and
declines to 0.0% on or after the fourth anniversary of the
Closing Date. The occurrence of certain events of default may
increase the applicable rate of interest by 2% and could result
in the acceleration of the Companys obligations under the First
Lien Note Facility prior to stated maturity and an obligation of
the Company to pay the full amount of its obligations under the
First Lien Note Facility.

The First Lien Note Facility contains customary events of default
that include, among others, non-payment of principal, interest or
fees, violation of covenants, inaccuracy of representations and
warranties, bankruptcy and insolvency events, material judgments,
cross-defaults to material indebtedness and events constituting a
change of control. In addition, the obligations under the First
Lien Note Facility will be guaranteed by joint and several
guarantees from the Companys subsidiaries.

In connection with the First Lien Note Facility, the Company, its
subsidiaries and the First Lien Collateral Agent entered into a
First Lien Guaranty and Security Agreement, dated as of June 29,
2017 (the First Lien Guaranty and Security Agreement). to the
First Lien Guaranty and Security Agreement, the obligations under
the First Lien Notes will be secured by first priority liens on,
and security interests in, substantially all of the assets of the
Company and its subsidiaries.

The Company expects that the closing of the transactions
contemplated by the First Lien Note Facility will occur later in
the day on June 29, 2017.

The foregoing description of the First Lien Note Facility and the
First Lien Guaranty and Security Agreement does not purport to be
complete and is qualified in its entirety by reference to the
full text of the First Lien Note Facility and the First Lien
Guaranty and Security Agreement, copies of which are attached as
hereto as Exhibits 10.1 and 10.2, respectively, and incorporated
herein by reference.

Second Lien Note Facility

The Second Lien Notes accrue interest, payable monthly in
arrears, at a floating rate or rates equal to, at the option of
the Company, (i) one-month LIBOR (subject to a 1.25% floor) plus
9.25% per annum in cash, (ii) one-month LIBOR (subject to a 1.25%
floor) plus 11.25% per annum, which amount will be capitalized on
each interest payment date, or (iii) one-month LIBOR (subject to
a 1.25% floor) plus 10.25% per annum, of which one-half LIBOR
plus 4.625% per annum will be payable in cash and one-half LIBOR
plus 5.625% per annum will be capitalized on each interest
payment date, provided that, in each case, if any permitted
refinancing indebtedness with which the Senior Notes are
refinanced requires or permits the payment of cash interest, all
of the interest on the Second Lien Notes shall be paid in cash.
The Second Lien Notes mature on August 15, 2020, provided that if
the Senior Notes, are refinanced prior to August 15, 2020, then
the scheduled maturity date of the Second Lien Notes shall be
June 30, 2022.

The Second Lien Notes are not subject to scheduled amortization
installments. The Second Lien Notes are pre-payable at the
Companys option at specified premiums to the principal amount
that will decline over the term of the Second Lien Note Facility.
If the Second Lien Notes are prepaid prior to the third
anniversary of the Closing Date, the Company will need to pay a
make-whole premium based on the present value (using a discount
rate based on the specified treasury rate plus 50 basis points)
of all remaining interests payments on the Second Lien Notes
being prepaid prior to the third anniversary of the Closing Date,
plus 4.0% of the principal amount of Second Lien Notes being
prepaid. On or after the third anniversary of the Closing Date,
the prepayment premium is 4.0%, which declines to 2.0% on or
after the fourth anniversary of the Closing Date, and declines to
0.0% on or after the fifth anniversary of the Closing Date. The
occurrence of certain events of default may increase the
applicable rate of interest by 2% and could result in the
acceleration of the Companys obligations under the Second Lien
Note Facility prior to stated maturity and an obligation of the
Company to pay the full amount of its obligations under the
Second Lien Note Facility.

The Second Lien Note Facility contains customary events of
default that include, among others, non-payment of principal,
interest or fees, violation of covenants, inaccuracy of
representations and warranties, bankruptcy and insolvency events,
material judgments, cross-defaults to material indebtedness and
events constituting a change of control. In addition, the
obligations under the Second Lien Note Facility will be
guaranteed by joint and several guarantees from the Companys
subsidiaries.

In connection with the Second Lien Note Facility, the Company,
its subsidiaries and the Second Lien Collateral Agent entered
into a Second Lien Guaranty and Security Agreement, dated as of
June 29, 2017 (the Second Lien Guaranty and Security Agreement).
to the Second Lien Guaranty and Security Agreement, the
obligations under the Second Lien Notes will be secured by second
priority liens on, and security interests in, substantially all
of the assets of the Company and its subsidies.

The Company expects that the closing of the transactions
contemplated by the Second Lien Note Facility will occur later in
the day on June 29, 2017.

In connection with the First Lien Note Facility and the Second
Lien Note Facility, the Company, the First Lien Collateral Agent
and the Second Lien Collateral Agent, entered into an
intercreditor agreement containing customary provisions to, among
other things, subordinate the lien priority of the liens granted
under the Second Lien Note Facility to the liens granted under
the First Lien Note Facility.

The foregoing description of the Second Lien Note Facility and
the Second Lien Guaranty and Security Agreement does not purport
to be complete and is qualified in its entirety by reference to
the full text of the Second Lien Note Facility and the Second
Lien Guaranty and Security Agreement, copies of which are
attached as hereto as Exhibits 10.3 and 10.4, respectively, and
incorporated herein by reference.

Warrants

In connection with the Second Lien Note Facility, the Company
will also issue warrants (the Warrants) to the purchasers of the
Second Lien Notes to a Warrant Purchase Agreement dated as of
June 29, 2017 (the Warrant Purchase Agreement). The Warrants
entitle the purchasers of the Warrants to purchase shares of
Companys common stock, par value 0.0001 per share (the Common
Stock), representing at the time of any exercise of the Warrants
4.99% of the Common Stock of the Company on a fully diluted
basis, subject to the terms of the Warrant Agreement governing
the Warrants, dated as of June 29, 2017 (the Warrant Agreement);
provided, however, the Warrants may not be converted to the
extent that, after giving effect to such conversion, the Warrant
holders would beneficially own, in the aggregate, in excess of
(i) 19.99% of the shares of Common Stock outstanding as of the
Closing Date minus (ii) the shares of Common Stock that will be
sold to the Private Placement described below (the Conversion
Cap). The Conversion Cap will not apply to the Warrants if the
Company obtains the approval of its stockholders for the removal
of the Conversion Cap, which the Company is required to take
certain steps to attempt to obtain, subject to the terms of the
Warrant Agreement.

The Warrants have a 10 year term and an initial exercise price of
$2.00 per share, and may be exercised by payment of the exercise
price in cash or surrender of shares of common stock into which
the Warrants are being converted in an aggregate amount
sufficient to pay the exercise price. The exercise price and the
number of shares that may be acquired upon exercise of the
Warrants is subject to adjustments in certain situations,
including price based anti-dilution protection whereby, subject
to certain exceptions, if the Company later issues Common Stock
or certain Common Stock Equivalents (as defined in the Warrant
Agreement) at a price less than either the then current market
price per share or exercise price of the Warrant, then the
exercise price will be decreased and the percentage of shares of
Common Stock issuable upon exercise of the Warrants will remain
the same, giving effect to such issuance. Additionally, the
Warrants have standard anti-dilution protections if the Company
effects a stock split, subdivision, reclassification or
combination of its Common Stock or fixes a record date for the
making of a dividend or distribution to stockholders of cash or
certain assets. Upon the occurrence of certain business
combinations the Warrants will be converted into the right to
acquire shares of stock or other securities or property
(including cash) of the successor entity.

The Company expects the closing of the transactions contemplated
by the Warrant Purchase Agreement will occur later in the day on
June 29, 2017.

The foregoing description of the Warrants, the Warrant Agreement
and the Warrant Purchase Agreement does not purport to be
complete and is qualified in its entirety by reference to the
full text of the Warrant Agreement and the Warrant Purchase
Agreement, copies of which are attached hereto as 4.1 and 10.5,
respectively, and incorporated herein by reference.

Private Placement

On June 29, 2017, the Company entered into a Stock Purchase
Agreement (the SPA) with a fund managed by Ares (the Stock
Purchaser). to the terms of the SPA, the Company will issue and
sell to the Stock Purchaser in a private placement (the Private
Placement) 6,359,350 shares of Common Stock at a price of $2.50
per share, for gross proceeds of approximately $16 million.

The SPA contains customary representations, warranties and
covenants, including covenants relating to, among other things,
information rights, the Companys financial reporting, tax
matters, listing compliance under the NASDAQ Global Market, and
use of proceeds.

The Company expects that the closing of the transactions
contemplated by the SPA will occur later in the day on June 29,
2017.

The foregoing description of the SPA does not purport to be
complete and is qualified in its entirety by reference to the
full text of the SPA, a copy of which is attached as hereto as
Exhibit 10.6 and incorporated herein by reference.

Registration Rights Agreement

The Company entered into a registration rights agreement (the
Registration Rights Agreement) with the Stock Purchaser and the
holders of the Warrants that will, among other things and subject
to certain exceptions, require the Company, upon the request of
the Stock Purchaser and holders of the Warrants to register the
resale of the shares of Common Stock that will be issued in the
Private Placement and the shares of Common Stock issuable upon
exercise of the Warrants. to the terms of the Registration Rights
Agreement, these registration rights will not become effective
until twelve months after the Closing Date and the costs incurred
in connection with such registrations will be borne by the
Company.

The foregoing description of the Registration Rights Agreement
does not purport to be complete and is qualified in its entirety
by reference to the full text of the Registration Rights
Agreement, a copy of which is attached as hereto as Exhibit 4.2
and incorporated herein by reference.

Item 1.02 Termination of a Material Definitive
Agreement

The information set forth under Item 1.01 of this report is
incorporated in this Item 1.02 by reference in its entirety.

The Company intends use the proceeds of the sale of the Notes
described in Item 1.01 to repay in full all amounts outstanding
under the Existing Credit Agreements. Upon the Companys repayment
in full of all such amounts outstanding, the Existing Credit
Agreements, their respective security arrangements and related
rights thereunder will be terminated. As of June 29, 2017, loans
in an aggregate principal amount of approximately $291.4 million
were outstanding under the Existing Credit Agreements. The
obligations under the Existing Credit Agreements are secured by
security interests in, substantially all of the assets of the
Company and its subsidiaries.

Item 2.03 Creation of a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet Arrangement of
Registrant.

The disclosure provided above to Item 1.01 of this report
relating to the Notes Facilities, including the applicable
Exhibits, is incorporated herein by reference.

Item 3.02 Unregistered Sales of Equity
Securities

The disclosure provided above to Item 1.01 of this report
relating to the Warrants and the Private Placement, including the
applicable Exhibits, is incorporated herein by reference.

Item 8.01 Other Events

On June 29, 2017, the Company issued a press release announcing
its entry into the Note Facilities, the SPA and the Warrant
Purchase Agreement, a copy of which is attached hereto as Exhibit
99.1 and incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

BioScrip, Inc. Exhibit
EX-4.1 2 v469985_ex4-1.htm EXHIBIT 4.1   Exhibit 4.1 EXECUTION VERSION      BIOSCRIP,…
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About BIOSCRIP, INC. (NASDAQ:BIOS)

BioScrip, Inc. is engaged in providing infusion solutions. The Company partners with physicians, hospital systems, skilled nursing facilities, healthcare payors and pharmaceutical manufacturers to provide patients access to post-acute care services. The Company operates through Infusion Services segment. The Company operates through approximately 70 service locations in over 30 states. The Company offers home infusion services to provide clinical management services and the delivery of prescription medications. The Company provides services in coordination with, and under the direction of, the patient’s physician. The Company’s multidisciplinary team of clinicians, including pharmacists, nurses, dietitians and respiratory therapists, work with the physician to develop a plan of care suited to the patient’s specific needs. Its platform provides service capabilities to deliver clinical management services that offer patients a community-based and home-based care environment.