Common use of Eligible Inventory Clause in Contracts

Eligible Inventory. Inventory owned by a Borrower that is deemed by Agent, in its Permitted Discretion, to be Eligible Inventory; provided that, no Inventory shall be Eligible Inventory unless it (a) is located at a 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 this Agreement, (b) 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 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; or (m) 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 have been completed and are reasonably satisfactory to Agent (which appraisal and field examination may be conducted prior to the closing of such Permitted Acquisition).

Eligible Inventory. Inventory owned Based on the most recent Borrowing Base Certificate delivered by a the Borrower that is deemed by to the Agent and on other information available to the Agent, the Agent shall in its Permitted DiscretionCredit Judgment determine which Inventory of the Borrower shall be deemed to be “Eligible Inventory” of the Borrower for purposes of determining the amounts, if any, to be advanced to the Borrower under the Revolving Credit Loan and the Swing Line Loan. Without limiting the foregoing, Eligible Inventory; provided that, no Inventory shall be Eligible not include any Inventory unless it of the Borrower: (ai) that is not owned by the 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 surety that has issued a bond to assure the Borrower’s performance with respect to that Inventory), except the Liens in favor of the Agent, on behalf of itself and the Lenders; (ii) that is (i) not located on premises owned, leased or operated by the Borrower or (ii) stored with a bailee, warehouseman or similar Person, unless, commencing ninety (90) days after the Effective Date, either, at Borrower’s election, (x) a satisfactory bailee letter or landlord waiver has been delivered to the Agent, or (y) Reserves satisfactory to the Agent have been established with respect thereto, or (iii) located at any site if the aggregate book value of Inventory at any such location is less than $100,000; (iii) that is placed on consignment, is in transit or is otherwise not located on premises owned, leased or operated by the Borrower; (iv) that is covered by a Borrowernegotiable document of title, unless such document and evidence of acceptable insurance covering such Inventory have been delivered to the Agent; (v) that in the Agent’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 this Agreementreasonable determination, (b) is not used, returnedexcess, obsolete, spoiledunsalable, inadequately sealedshopworn, packaged seconds, damaged, imperfect or storedunfit for sale; (vi) that consists of display items, or otherwise unmerchantable, consigned, demonstrative or custom inventory, supplies (other than bulk wine)promotional materials, packing or shipping materials, manufacturing supplies, work-in-process Inventory or replacement parts; (cvii) is bulk wine at cost or wholesale “FOB” cased wine, that consists of goods which have been returned by the buyer; (viii) that is not older than three years following December 31 of its vintage year a type held 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 sale in the aggregate in Value ordinary course of such red wine; the Borrower’s business; (dix) is not held on consignmentthat consists of discontinued or slow-moving items (over 90 days old), nor subject to any deposit goods of substandard quality 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 goods classified as “clearance inventory”; (x) any Lien permitted pursuant to PACA that is ▇▇▇▇-and-hold inventory or any other similar agricultural law or regulation with respect that is evidenced by an account; (xi) as 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 on behalf of itself and the Lenders, therein is not a first priority perfected Lien; (zxii) any other Lien with respect as to which Agent has establish an appropriate reserve its Permitted Discretion)any of the representations or warranties pertaining to Inventory set forth in this Agreement or the Borrower Security Agreement is untrue; (xiii) that consists of any costs associated with “freight-in” charges; (xiv) that consists of Hazardous Materials or goods that can be transported or sold only with licenses that are not readily available; or (hxv) is within the continental United States, that 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 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; or (m) if it is Inventory owned covered by a target acquired in connection with a Permitted Acquisition, an appraisal and field examination with respect to such Inventory have been completed and are reasonably satisfactory to Agent (which appraisal and field examination may be conducted prior casualty insurance acceptable to the closing of such Permitted Acquisition)Agent.

Eligible Inventory. The second sentence of the definition of Eligible Inventory owned 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 a Borrower that is deemed by Agent, in its Permitted Discretion, Lender to be Eligible InventoryInventory 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 provided, that, no Inventory shall be Eligible Inventory unless it (a) is located at Lender has a Borrower’s principal place of business or any other facility storing cased goods and/or bulk wine that complies with first priority perfected security interest in and lien upon such Borrower’s related representations and warranties contained in this AgreementInventory, (b) is Lender has possession of not usedless 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, returneddated as of October 31, obsolete2003, spoiledamong Lender, inadequately sealed, packaged or stored, or otherwise unmerchantable, consigned, demonstrative or custom inventory, supplies (other than bulk wine), packing or shipping materialsBorrowers and Guarantors shall have been satisfied, (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 Lender shall have received (i) not older than four years following December 31 a Notification and Acknowledgment Agreement, duly authorized, executed and delivered by either or both of its vintage year for red wine or the Customs Broker and Freight Forwarder, as the case may be, handling the shipping and delivery of such Inventory, (ii) is four years or older following December 31 a copy of its vintage year for red wine but does not exceed $5,000,000 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 aggregate in Value of such red wine; invoice, packing slip and manifest with respect thereto, (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) such Inventory is not subject to any warehouse receipt or negotiable Document; Letter of Credit Accommodation, (je) is not subject to any License or other arrangement that restricts such Borrower’s or Agent’s right to dispose the aggregate amount of the Value of such InventoryInventory that is deemed to be Eligible Inventory shall not at any time exceed $1,000,000, unless Agent has received an appropriate Lien Waiver or established an appropriate reserve in its Permitted Discretion; and (kf) 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 reflected in the details of a current perpetual inventory report; or (m) 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 shall not have been completed and are reasonably satisfactory to Agent in transit for more than sixty (which appraisal and field examination may be conducted prior to the closing of such Permitted Acquisition)60) days."

Eligible Inventory. Upon Borrowers' delivery to Lender of an Inventory owned by a Borrower that is deemed by AgentCertification Report, Lender shall determine, in its Permitted Discretionreasonable business judgment, to be which Inventory listed thereon is "Eligible Inventory; provided that." In making this determination, no Lender will consider the following requirements: (A) With respect to Vita, the Inventory shall be Eligible Inventory unless it is in good condition, constitutes finished goods or raw fish (a) is located at a 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 this Agreementexcluding, (b) is not usedhowever, returned, obsolete, spoiled, inadequately sealed, packaged or stored, or otherwise unmerchantable, consigned, demonstrative or custom inventory, supplies ingredients (other than bulk wineraw fish) used to process finished goods Inventory)), 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; governmental agency, or department or division thereof, having regulatory authority over such goods, is currently saleable in the ordinary course of Vita's business and is not otherwise unacceptable to Lender due to age, type, category and/or quantity; (fB) 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 With respect to which Agent has established a Grower’s ReserveVirginia Honey, (y) non-consensual Permitted Liens arising the Inventory is in good condition, meets all standards imposed by operation of law which are junior to the Agent’s Lienany governmental agency, or (z) any other Lien with respect to which Agent has establish an appropriate reserve its Permitted Discretion); (h) is within the continental United Statesdepartment or division thereof, 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 Discretionhaving regulatory authority over such goods, and is not consigned otherwise unacceptable to any Person; Lender due to age, type, category and/or quantity; (iC) The Inventory is located at one of the locations listed on Schedule 5.6 attached hereto, is subject to and covered by Lender's perfected security interest and is not subject to any warehouse receipt other lien, claim, encumbrance or negotiable Document; security interest other than Permitted Liens (jall Inventory at other locations shall not be considered to be Eligible Inventory); (D) The Inventory has not been consigned to a customer of a Borrower (Inventory which is not subject to any License return due to expiration of code dates or other arrangement that restricts such Borrower’s due to being deemed "unwholesome" by the Account Debtor shall not be considered to be consigned Inventory); (E) Each of the warranties and representations set forth in Section 9.3 of this Agreement has been reaffirmed with respect thereto at the time the most recent Inventory Report was delivered to Lender; and (F) The Inventory was not purchased by a Borrower in 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 as part of a warehouseman, processor, repairman, mechanic, shipper, freight forwarder "bulk" transfer or other Person, sale of assets unless the lessor such Borrower has complied with all applicable bulk sales 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; or (m) 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 have been completed and are reasonably satisfactory to Agent (which appraisal and field examination may be conducted prior to the closing of such Permitted Acquisition)bulk transfer laws.

Eligible Inventory. The following shall constitute the Eligibility Criteria for acceptance of Inventory owned by a Borrower that is deemed by Agentfor inclusion in the Borrowing Base. All Inventory of the Loan Parties, valued at the lower cost or market in its Permitted Discretionaccordance with GAAP, to be Eligible Inventory; provided that, no but excluding any Inventory shall be Eligible Inventory unless it having any of the following characteristics: (a) Inventory that is in-transit; located at a Borrower’s principal place of business any warehouse, job site or located on any other facility storing cased goods and/or bulk wine premises that complies with such Borrower’s related representations and warranties contained in this Agreement, may be subject to the Lien of any person other than the Collateral Agent; (b) Inventory that is otherwise not usedsubject 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 (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, returned▇▇▇▇ 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 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, spoiled, inadequately sealed, packaged slow moving or storednot currently saleable in the normal course of Borrower’s operations, or otherwise unmerchantablethe amount of such Inventory that has been reduced by shrinkage; (h) Inventory that the Borrower has returned, consignedhas attempted to return, demonstrative is in the process of returning 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 intends to return to the vendor thereof; (i) not older than four years following December 31 Inventory 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 its vintage year for red wine same, or (ii) is four years not otherwise prohibited under applicable law from selling or older following December 31 otherwise disposing 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 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; or (m) 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 have been completed and are reasonably satisfactory to Agent (which appraisal and field examination may be conducted prior to the closing of such Permitted Acquisition)same.

Eligible Inventory. Inventory All of the inventory owned by a the Borrower that is deemed and reflected in the most recent Borrowing Base Certificate delivered by Agent, in its Permitted Discretion, Borrower to Bank shall be “Eligible Inventory; provided that” for purposes of this Agreement, no Eligible Inventory shall be Eligible not include any Inventory unless it of Borrower that: (a) is located at 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 surety that has issued a bond to assure Borrower’s principal place performance with respect to that Inventory), except the liens in favor of business or any other facility storing cased goods and/or bulk wine that complies with such Borrower’s related representations Bank and warranties contained in this Agreement, Permitted Liens; (b) (i) is located on premises owned or leased by Borrower and is not usedencumbered by a mortgage or deed of trust, returnedin each case in favor of Lender, or (ii) is located at an owned or leased location subject to a mortgage in favor of a person other than Lender; (c) is placed on consignment or is in transit; (d) obsolete, spoiled, inadequately sealed, packaged or stored, or otherwise unmerchantable, consigned, demonstrative or custom inventory, supplies slow moving (other than bulk winein 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, (c) is bulk wine at cost manufacturing supplies, stores 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; replacement parts; (f) conforms with consists of goods which have been returned by the covenants and representations herein; buyer; (g) is subject to Agentnot of a type held for sale in the ordinary course of Borrower’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); business; (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 a first priority lien in favor of Lender; (i) breaches any warehouse receipt of the representations or negotiable Document; warranties pertaining to Inventory set forth in the Loan Documents in any material respect; (j) is not subject to consists of any License or other arrangement costs associated with “freight-in” charges, except those charges that restricts such are customary in, and consistent with, 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; historical accounting practices; (k) is consists of Hazardous Materials or goods that can be transported or sold only with licenses that are 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; readily available; (l) is reflected in the details of a current perpetual inventory reportnot covered by casualty insurance reasonably acceptable to Lender; or or (m) if it is Inventory owned 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 a target acquired in connection with a Permitted Acquisition, an appraisal and field examination with respect to such Inventory have Lender which has not been completed and are reasonably satisfactory to Agent (which appraisal and field examination may be conducted prior to the closing of such Permitted Acquisition)obtained.

Eligible Inventory. Any and all raw material and finished goods Inventory owned by of Borrower valued at the lower of cost (determined on a Borrower that is deemed by Agent, in its Permitted Discretion, to be Eligible Inventory; provided that, no Inventory shall be Eligible Inventory unless it (afirst-in/first-out basis) is or market value located at a Borrower’s principal place 's places of business shown on Schedule "5.2" attached hereto and made part hereof (and for which location Lender has received a landlord, warehouse or any other facility storing cased goods and/or bulk wine that complies with such Borrower’s related representations mortgagee waiver as determined by, and warranties contained in this Agreementform and substance satisfactory to, (b) is not used, returned, obsolete, spoiled, inadequately sealed, packaged or stored, or otherwise unmerchantable, consigned, demonstrative or custom inventory, supplies (other than bulk wineLender), 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 DocumentLien (other than Liens granted under this Agreement and Permitted Liens, if applicable); (jii) is not subject to any License slow moving, damaged, obsolete or other arrangement that restricts such Borrower’s or Agent’s right to dispose of such Inventoryunmerchantable, unless Agent has received an appropriate Lien Waiver or established an appropriate reserve as determined by Lender in its Permitted Discretionsole discretion; (kiii) meets all standards, if any, imposed by any Governmental Authority; (iv) is not located Inventory held on leased premises 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 possession name of Lender, and covered by a warehousemanLetter of Credit issued under the Revolving Credit; (vi) is situated at a location not owned by Borrower, processor, repairman, mechanic, shipper, freight forwarder provided that (x) the owner or other Person, unless the lessor or occupier of such Person location has delivered executed in favor of Lender 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; Agreement or (my) if it is Inventory owned by Lender has instituted a target acquired in connection with a Permitted Acquisition, an appraisal and field examination with respect to such Inventory have been completed and are reasonably satisfactory to Agent (which appraisal and field examination may be conducted prior reserve to the closing 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 such Permitted Acquisition)liability regulating, relating to or imposing liability or standards of conduct concerning pollution, protection of the environment, or the impact of pollutants, contaminants or toxic or hazardous substances on human health or the environment, as now or may at any time hereafter be in effect.

Eligible Inventory. Eligible Inventory" shall consist of all of the Inventory, except the following: (i) Inventory which is damaged, obsolete, not in good condition, or not currently usable or currently saleable in the ordinary course of the Borrower's business as determined by the Agent; (ii) Inventory which the Agent determines, or which in accordance with the 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 that is deemed by Agentlisted on Exhibit 8.6; provided that, subject to subsection 7.9, in its Permitted Discretionthe 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 order for which such 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 becomes aware that Inventory with a material value previously scheduled in a Monthly Report or Borrowing Base Certificate ceases to be Eligible Inventory; provided that, no Inventory the Borrower shall be Eligible Inventory unless it (a) is located at a 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 this Agreement, (b) 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 notify 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 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; or (m) 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 have been completed and are reasonably satisfactory to Agent (which appraisal and field examination may be conducted prior to the closing of such Permitted Acquisition)thereof immediately.

Eligible Inventory. Inventory The term ELIGIBLE INVENTORY means, at any date of determination thereof, the aggregate amount, as at such time, of INVENTORY owned by a Borrower that any or all of the BORROWERS which is deemed acceptable to the LENDER to be included in the calculation of the BORROWING BASE. The criteria for eligibility may be fixed and revised by Agent, the LENDER from time to time in its Permitted Discretionreasonable discretion in accordance with its internal credit policies, and any such determinations by the LENDER will be promptly communicated to the BORROWERS. INVENTORY in no event shall be deemed to be Eligible Inventory; provided that, no Inventory shall be Eligible Inventory unless it ELIGIBLE INVENTORY unless: (a) is located at the LENDER has a 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 first priority perfected security interest in this Agreement, its INVENTORY; (b) it is not used, returned, obsolete, spoiled, inadequately sealed, packaged normally and currently saleable in the ordinary course of business of any or stored, or otherwise unmerchantable, consigned, demonstrative or custom inventory, supplies (other than bulk wine), packing or shipping materials, all of the BORROWERS; (c) is bulk wine at cost or wholesale “FOB” cased wine, that it 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 work in the aggregate in Value of such red wineprocess; (d) it is not held located on consignment, nor subject to any deposit or down paymentthe premises of a BORROWER; (e) meets all standards imposed by any Governmental Authorityit does not consist of defective, damaged, obsolete, returned or repossessed items of INVENTORY or used goods or goods taken in trade; (f) conforms with it does not consist of slow moving items or items determined by the covenants and representations hereinLENDER in its sole discretion to be stale or dated merchandise; (g) is subject it does not consist of packing or packaging materials, general supplies, catalogs, promotion materials, specialty inventory, inventory on loan to Agent’s duly perfectedany PERSON, first priority Lienitems used as demonstrators, and no other Lien prototypes, or salesman's samples; (other than (xh) it does not consist of an item consigned to any Lien permitted pursuant to PACA or any other similar agricultural law all of the BORROWERS or regulation with respect to which Agent has established any PERSON claims 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 Personlien; (i) is it has not subject been consigned by any or all of the BORROWERS to any warehouse receipt or negotiable Documenta consignee; (j) it is not subject to held by any License PERSON (other than a BORROWER) or other arrangement that restricts located upon any premises not owned in fee simple by a BORROWER unless such Borrower’s PERSON or Agent’s right to dispose the owner of such Inventory, unless Agent premises has received an appropriate Lien Waiver or established an appropriate reserve executed a lien waiver agreement in its Permitted Discretionform and substance satisfactory to the LENDER; and (k) is it has not located on leased premises been deemed unmerchantable or otherwise unsatisfactory by the LENDER for any reason, in the possession LENDERS sole discretion, by written notice to the BORROWERS. The value of a warehouseman, processor, repairman, mechanic, shipper, freight forwarder any INVENTORY deemed to meet the criteria for ELIGIBLE INVENTORY shall be determined at the least of: (i) the BORROWERS net purchase or other Person, unless the lessor or such Person has delivered a Lien Waiver or an appropriate Rent and Charges Reserve has been establishedmanufacturing cost; (lii) is reflected in the details of a current perpetual inventory reportlowest then-existing market price; (iii) the BORROWERS lowest selling price, less estimated expenses for packing, selling and delivery; or (miv) 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 have been completed and are reasonably satisfactory to Agent (any price ceiling which appraisal and field examination may be conducted prior established by governmental order, regulation, or restriction. The LENDER shall be the discretionary judge of the value of any INVENTORY, based upon such information as it deems, in its reasonable discretion, to the closing of such Permitted Acquisition)be relevant or applicable in making that determination.

Eligible Inventory. Upon Borrower's delivery to Lender of an Inventory owned by a Borrower that is deemed by AgentReport, Lender shall determine, in its Permitted Discretionsole and absolute discretion and in the exercise of good faith, to be Eligible Inventory; provided that, no which items of Inventory shall be listed thereon are Eligible Inventory unless it (a) is located at a 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 this Agreement, (b) 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 exercise of good faith. In making this determination, Lender will consider the following requirements: (A) The item of Inventory is in Value of such red wine; (d) is not held on consignmentgood condition, nor subject to any deposit or down payment; (e) meets all standards imposed by any Governmental Authority; governmental agency, or department or division thereof, having regulatory authority over such goods, their use or sale and is either currently useable or currently saleable in the ordinary course of Borrower's (fwho owns such Inventory) conforms with business and is not otherwise unacceptable to Lender due to age, type, category or quantity; (B) The item of Inventory is located at one of the covenants and representations herein; (g) locations listed on Exhibit C attached hereto, 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 covered 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, Lender's perfected security interest and is not consigned to any Person; (i) is not subject to any warehouse receipt other lien, claim, encumbrance or negotiable Document; security interest, except for the Permitted Liens; (jC) is The item of Inventory has not subject remained on hand for more than three hundred sixty (360) days; (D) The item of Inventory has not been consigned, sold or leased to any License or other arrangement that restricts such Borrower’s or Agent’s right to dispose Person; (E) Each of such Inventory, unless Agent has received an appropriate Lien Waiver or established an appropriate reserve the warranties and representations set forth in its Permitted Discretion; (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 Section 9.3 has been established; (l) is reflected in the details of a current perpetual inventory report; or (m) if it is Inventory owned by a target acquired in connection with a Permitted Acquisition, an appraisal and field examination reaffirmed with respect to such items of Inventory have been completed at the date that the most recent Inventory Report was delivered to Lender; and (F) The item of Inventory was not purchased by Borrower in or as part of a "bulk" transfer or sale of assets unless Borrower, and are reasonably satisfactory to Agent (which appraisal and field examination may be conducted prior to the closing seller of such Permitted Acquisition)item, have complied with all applicable bulk sales or bulk transfer laws.

Eligible Inventory. All of the Inventory owned by a 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 is deemed by Agent, in its Permitted Discretionreasonable 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 be 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; provided that, no Eligible Inventory shall be Eligible not include any Inventory unless it of any Borrower that: (a) is located at a Borrower’s principal place not owned by such Borrower free and clear of business or all Liens and rights of any other facility storing cased goods and/or bulk wine Person (including the rights of a purchaser that complies with has made progress payments and the rights of a surety that has issued a bond to assure such Borrower’s related representations performance with respect to that Inventory), except the Liens in favor of Agent, on behalf of itself and warranties contained Lenders, and Permitted Encumbrances in favor of landlords and bailees to the extent permitted in Section 5.9 hereof (subject to Reserves established by Agent in accordance with Section 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 Agreement, clause (a) so long as the Congress Rolex Intercreditor is in full force and effect; (b) (i) is not usedlocated on premises owned, returnedleased or rented by such Borrower and set forth in Disclosure Schedule (3.2) (as the same may be updated from time to time), or (ii) is stored at a leased location, unless Agent has given its prior consent thereto and unless either (x) a reasonably satisfactory landlord waiver has been delivered to Agent, or (y) Reserves reasonably satisfactory to Agent have been established with respect thereto or (iii) is stored with a bailee or warehouseman unless a reasonably satisfactory, acknowledged bailee letter has been received by Agent and 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, spoiledslow moving, inadequately sealedunsalable, packaged shopworn, seconds, damaged or stored, unfit for sale; (f) consists of display items or otherwise unmerchantable, consigned, demonstrative or custom inventory, supplies (other than bulk wine), packing or shipping materials, (c) is bulk wine at cost manufacturing supplies, work-in-process Inventory 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; replacement parts; (g) is subject to Agentnot of a type held for sale in the ordinary course of such Borrower’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); business; (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 a first priority lien in favor of Agent on behalf of itself and Lenders, subject to Permitted Encumbrances as set forth in clause (e) of the definition thereof (subject to reserves satisfactory to Agent); (i) breaches any warehouse receipt of the representations or negotiable Document; warranties pertaining to Inventory set forth in the Loan Documents; (j) is not subject to consists of 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; costs associated with “freight-in” charges; (k) is consists of Hazardous Materials or goods that can be transported or sold only with licenses that are 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; readily available; (l) is reflected in the details of a current perpetual inventory reportnot covered by casualty insurance reasonably acceptable to Agent; or or (m) if it 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 owned by a target acquired in connection with a Permitted Acquisition, an appraisal (i) all Rolex Inventory and field examination with respect to such (ii) certain Inventory have been completed and are reasonably satisfactory to Agent (which appraisal and field examination may be conducted prior subject to the closing DAR License Agreement with an aggregate cost value of such Permitted Acquisition)$500,000.

Eligible Inventory. ELIGIBLE INVENTORY" shall consist of all of the Inventory owned by a of Borrower that and each Guarantor, except the following: (i) Inventory which is deemed by Agent, in its Permitted Discretion, to be Eligible Inventory; provided that, no Inventory shall be Eligible Inventory unless it (a) is located at a 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 this Agreement, (b) is not used, returneddamaged, obsolete, spoiled, inadequately sealed, packaged or storednot in good condition, or otherwise unmerchantable, consigned, demonstrative not either currently usable 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 currently saleable in the ordinary course 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 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 four years unacceptable due to age, type, category and/or quantity, including any Inventory which is in excess of a one (1) year's supply 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 wineis otherwise slow-moving; (diii) 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 Inventory with respect to which Agent has established does not have a Grower’s Reservefirst and valid, fully perfected Lien; (yiv) non-consensual Permitted Liens arising Inventory consisting of packaging or supplies; (v) Inventory in the possession of such Person but not owned by operation such Person; (vi) Inventory 52 produced in violation of law which are junior the Fair Labor Standards Act and subject to the Agent’s Lien, or so-called "hot goods" provision contained in Title 29 U.S.C. ss.215(a)(1); (zvii) any other Lien Inventory with respect to which Agent has establish an appropriate reserve its Permitted Discretion)any disclosure is requireD in the applicable Monthly Report or Borrowing Base Certificate in accordance with clauses (i) through (vi) of Section 9.5; (hviii) Inventory which is within on consignment or is located at a place other than the continental United Statesplaces of business and collateral locations of such Person listed on Schedule 11.29; provided that, is 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 in transit (except meet the specifications of the purchase order for which such Inventory was produced; (x) between locations of BorrowersInventory 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 (yxi) work in process. In the event that Inventory previously scheduled in a Monthly Report or Borrowing Base Certificate ceases 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 be Eligible Inventory, unless Borrower shall notify, or shall cause the applicable Guarantor to notify, 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 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; or (m) 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 have been completed and are reasonably satisfactory to Agent (which appraisal and field examination may be conducted prior to the closing of such Permitted Acquisition)thereof immediately.

Eligible Inventory. The following shall constitute the Eligibility Criteria for acceptance of Inventory owned by a Borrower that is deemed by Agentfor inclusion in the Borrowing Base. All Inventory of the Loan Parties, valued at the lower cost or market in its Permitted Discretionaccordance with GAAP, to be Eligible Inventory; provided that, no but excluding any Inventory shall be Eligible Inventory unless it having any of the following characteristics: (a) Inventory that is in-transit; located at a Borrower’s principal place of business any warehouse, job site or located on any other facility storing cased goods and/or bulk wine premises that complies with such Borrower’s related representations and warranties contained in this Agreement, may be subject to the Lien of any person other than the Collateral Agent; (b) Inventory that is otherwise not usedsubject 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 (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, returned▇▇▇▇ 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 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, spoiled, inadequately sealed, packaged slow moving or storednot currently saleable in the normal course of Borrower’s operations, or otherwise unmerchantablethe amount of such Inventory that has been reduced by shrinkage; (h) Inventory that the Borrower has returned, consignedhas attempted to return, demonstrative is in the process of returning 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 intends to return to the vendor thereof; (i) not older than four years following December 31 Inventory 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 its vintage year for red wine same, or (ii) is four years not otherwise prohibited under applicable law from selling or older following otherwise disposing of same. None. Reference is made to the Amended and Restated Credit Agreement, dated as of December 31 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 (in such capacity, the “Administrative Agent”), as collateral agent for the Secured Parties and as collateral manager, and other entities party thereto. 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 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 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 vintage year for red wine but does Loans, without giving effect to assignments thereof which have not exceed $5,000,000 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 aggregate transactions contemplated hereby; and (b) except as set forth in Value (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 Credit Agreement, and such red wineother 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) is not held appoints and authorizes the Agents to take such action as agents on consignmentits behalf and to exercise such powers and discretion under the Credit Agreement, nor subject the other Loan Documents or any other instrument or document furnished pursuant hereto or thereto as are delegated to any deposit or down paymentthe Agents by the terms thereof, together with such powers as are incidental thereto; and (e) meets agrees that it will be bound by the provisions of the Credit Agreement and will perform in accordance with its terms all standards imposed the obligations which by any Governmental Authoritythe 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; (fb) conforms with if the covenants and representations herein; (g) Assignee is subject to Agent’s duly perfectednot already a Lender under the Credit Agreement, first priority Lienan Administrative Questionnaire, and no (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 Lien (other than (xamounts) any Lien permitted pursuant [to PACA 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 any other similar agricultural law 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 regulation with respect to which Agent has established a Grower’s Reservethe making of this assignment directly between themselves.] 6. From and after the Effective Date, (ya) non-consensual Permitted Liens arising 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 operation 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 which 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 junior 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 Agent’s Lienextent 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 ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ Attention: [Bioscrip Account Manager] Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ 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 (z) any other Lien with respect to which Agent has establish an appropriate reserve its Permitted Discretion“Borrower”); (h) is within , the continental United StatesSubsidiary Guarantors, is not in transit (except (x) between locations of Borrowersthe Lenders, 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 DiscretionHealthcare 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 not consigned requested to any Person; be made: (iA) Principal amount of Borrowing:1 (B) Date of Borrowing (which is not subject a Business Day): (C) Funds are requested to any warehouse receipt or negotiable Document; (j) is not subject be disbursed to any License or other arrangement that restricts such Borrower’s account with: Account No. Borrower hereby represents and warrants that the conditions to lending specified in Sections 4.02(b)-(d) of the Credit Agreement are satisfied as 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 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 Annex IV to the 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 (as amended, restated, supplemented or Agent’s right otherwise modified from time to dispose of such Inventorytime, 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 the “Agreement”). BioScrip, Inc. promises to pay to Healthcare Finance Group, LLC, as Collateral Manager, the new loan balances reflected above, plus interest, as set forth 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 Agreement. By: Date: _______________ Name: Title: I. Inventory per perpetual inventory report; or (m) 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 have been completed and are reasonably satisfactory to Agent (which appraisal and field examination may be conducted prior to the closing of such Permitted Acquisition).report $ —

Eligible Inventory. Inventory owned by Upon Borrower’s delivery to Lender of a Borrower that is deemed by AgentBorrowing Base Certificate, Lender shall determine, in its Permitted Discretionsole discretion, to be which Inventory listed thereon is “Eligible Inventory; provided that”. In making this determination, no Inventory shall be Eligible Inventory unless it Lender will consider the following requirements: (a) is located at a Borrower’s principal place the Inventory consists solely of business raw materials or any other facility storing cased finished goods and/or bulk wine that complies with such Borrower’s related representations and warranties contained in this Agreement, (but not work-in-progress); (b) the Inventory is in good and merchantable condition, is not usedslow-moving, returned, obsolete, spoiled, inadequately sealed, packaged obsolete or stored, or otherwise unmerchantable, consigned, demonstrative or custom inventory, supplies (other than bulk wine), packing or shipping materials, discontinued; (c) the Inventory 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 located on premises listed in the aggregate in Value of such red wine; Exhibit C attached hereto; (d) the Inventory is not held on consignment, nor covered by or subject to a seller’s right to repurchase, or any deposit consensual or down payment; nonconsensual lien or security interest, other than in favor of Lender; (e) meets all standards imposed by any Governmental Authority; the Inventory does not consist of packaging or supplies; (f) conforms with the covenants Inventory was not produced in violation of the Fair Labor Standards Act and representations herein; subject to the “hot goods” provisions contained in Title 29 U.S.C. §215; (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) Inventory is not subject to any warehouse receipt agreement or negotiable Document; (j) is not subject license which would restrict the Lender’s ability to any License sell or other arrangement that restricts such Borrower’s or Agent’s right to otherwise dispose of such Inventory, unless Agent has received an appropriate Lien Waiver or established an appropriate reserve in its Permitted Discretion; ; (kh) the Inventory is not located on leased premises identified to any purchase order or in contract to the possession of a warehouseman, processor, repairman, mechanic, shipper, freight forwarder extent progress 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; or (m) if it is Inventory owned by a target acquired in connection with a Permitted Acquisition, an appraisal and field examination advance payments are received with respect to such Inventory; and (i) the Lender shall not have determined in its reasonable discretion that the Inventory have been completed and are reasonably satisfactory is unacceptable due to Agent (age, type, category, quality, quantity and/or any other reason whatsoever. Inventory which appraisal and field examination may is at any time Eligible Inventory, but which subsequently fails to meet any of the foregoing requirements, shall forthwith cease to be conducted prior to the closing of such Permitted Acquisition)Eligible Inventory.

Eligible Inventory. Upon Borrower's delivery to Lender of an Inventory owned by a Borrower that is deemed by AgentReport, Lender shall, in its Permitted Discretionreasonable credit judgment, determine which items of Inventory and Gaming Supply Inventory listed thereon are Eligible Inventory and Gaming Supply Eligible Inventory. Without limiting Lender's discretion to make such determination, the following Inventory and Gaming Supply Inventory shall not be deemed to be Eligible Inventory and Gaming Supply Eligible Inventory; provided that: (A) Any Inventory and any Gaming Supply Inventory which is slow moving, no Inventory shall be Eligible Inventory unless it (a) is located at a 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 this Agreement, (b) is not usedin good condition, 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 meet 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 Liengovernmental agency, or department or division thereof, having regulatory authority over such goods (z) any other Lien with respect to which Agent has establish an appropriate reserve its Permitted Discretionincluding the use or sale thereof); (h) is within the continental United States, is not currently useable or currently saleable in transit (except (x) between locations the ordinary course of BorrowersBorrower's or Gaming Supply's businesses, or is otherwise unacceptable to Lender due to age, type, category or quantity; (yB) to another location disclosed to Agent with respect to Any Inventory and any Gaming Supply Inventory 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 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 any warehouse receipt or negotiable Document; Lender an appropriate waiver from such party in form and substance satisfactory to Lender, (jiii) is not subject to any License and covered by Lender's security interest 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; (kiv) is not located on leased premises subject to any other lien, claim, encumbrance or security interest other than liens, claims, encumbrances or security interests in favor of NatWest and subject to the possession terms 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 Intercreditor Agreement; (C) Any Inventory and Charges Reserve any Gaming Supply Inventory which has been established; consigned, bailed, sold or leased to any Person; (lD) is reflected in the details of a current perpetual inventory report; or (m) if it is Any Inventory owned by a target acquired in connection with a Permitted Acquisition, an appraisal and field examination 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 the seller of such Inventory or Gaming Supply Inventory have been completed and are reasonably satisfactory to Agent (which appraisal and field examination may be conducted prior to the closing of such Permitted Acquisition).complied with all applicable bulk transfer laws;

Eligible Inventory. Upon Borrowers' delivery to Lender of an Inventory owned by a Borrower that is deemed by AgentCertification Report, Lender shall determine, in its Permitted Discretionsole discretion, to be which Inventory listed thereon is "Eligible Inventory; provided that." In making this determination, no Inventory shall be Eligible Inventory unless it Lender will consider the following requirements: (a) The Inventory consists of raw material, work in process or finished goods, is located at a 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 this Agreementgood condition, (b) 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 governmental agency or any other similar agricultural law department 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 Statesdivision thereof having regulatory authority over such goods, is not identified to an acceptable purchase order or contract 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 DiscretionLender's sole discretion, and is not consigned otherwise unacceptable to any Person; Lender due to age (imust be less than one year old); (b) The Inventory is located at one of the locations listed on Exhibit D attached hereto, is subject to and covered by Lender's perfected security interest and is not subject to any warehouse receipt other lien, claim, encumbrance or negotiable Document; security interest (jall Inventory at other locations shall not be considered to be Eligible Inventory); (c) is The Inventory has not subject been consigned 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 a customer of a warehouseman, processor, repairman, mechanic, shipper, freight forwarder or other Person, unless Borrower; (d) Each of the lessor or such Person has delivered a Lien Waiver or an appropriate Rent warranties and Charges Reserve representations set forth in Section 9.3 of this Agreement has been establishedreaffirmed with respect thereto at the time the most recent Inventory Certification Report was delivered to Lender; and (le) is reflected The Inventory was not purchased by a Borrower in the details or as part of a current perpetual inventory report; "bulk" transfer or (m) if it is Inventory owned by a target acquired in connection sale of assets unless such Borrower has complied with a Permitted Acquisition, an appraisal and field examination with respect to such Inventory have been completed and are reasonably satisfactory to Agent (which appraisal and field examination may be conducted prior to the closing of such Permitted Acquisition)all applicable bulk sales or bulk transfer laws.

Eligible Inventory. All Eligible Inventory owned by a Borrower that is deemed by Agentof good and merchantable quality, in its Permitted Discretion, free from defects. As to be each item of Eligible Inventory; provided that, no such Inventory shall be Eligible Inventory unless it is (a) is located at a Borrower’s principal place owned by Borrower free and clear of business or any all Liens other facility storing cased goods and/or bulk wine that complies with such Borrower’s related representations and warranties contained than Liens in this Agreement, favor of Lender, (b) is not usedeither located at one of the locations set forth on Schedule E-1 or in transit from one such location to another such location, returnedprovided, 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 winehowever, 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 case of Eligible In-Transit Inventory, 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; 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 In-Transit Inventory, (c) not located on real property leased by Borrower, in a contract warehouse, or other location that is not owned by Borrower, in each case, unless subject to a Collateral Access Agreement executed by the lessor, the warehouseman, or other third party, as the case may be, 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, ▇▇▇▇ and hold goods, defective goods, "seconds," or Inventory acquired on consignment, and (f) not subject to any warehouse receipt the rights of other Persons (including rights associated with trademarks, patents, or negotiable Document; (jcopyrights) is not subject that would expose Lender to any License liability (including the payment of any royalty or other arrangement that restricts such Borrower’s sum) or Agent’s right to dispose prevent the sale of such Inventorygoods, unless Agent has received an appropriate Lien Waiver or established an appropriate reserve as determined by Lender in its Permitted Discretion; provided that up to $500,000 (kof 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 leased premises or Schedule E-1) and (ii) Borrower has complied with the provisions of Section 9114(1)(a), (b), (c), and (d) of the Code (as 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; or (m) 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 have been completed and are reasonably satisfactory to Agent (which appraisal and field examination may be conducted effect prior to July 1, 2001), or Section 9324(b) of the closing of such Permitted AcquisitionCode (as in effect on and after July 1, 2001).

Eligible Inventory. Upon the Borrowers' delivery to Lender of an ------------------ Inventory owned by a Borrower that is deemed by AgentReport, Lender shall, in its Permitted Discretionreasonable discretion, to be determine which items of Inventory listed thereon are Eligible Inventory; provided that. Unless otherwise agreed to by Lender, no Inventory shall be Eligible Inventory unless it shall, at all times, be subject to the following requirements for eligibility: (a) is located at a Borrower’s principal place The item of business Inventory shall constitute raw materials or any other facility storing cased goods and/or bulk wine that complies with such Borrower’s related representations and warranties contained finished goods, shall be in this Agreementgood condition, (b) 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 meet all standards imposed by any Governmental Authority; governmental agency or department or division thereof having regulatory authority over such goods or their use or sale, shall be either currently usable or currently saleable in the ordinary course of a Borrower's business and shall not otherwise be unacceptable to Lender due to age, type, category, quality or quantity; (b) The item of Inventory shall be located at one of the locations listed on Exhibit "C" attached hereto, shall be subject to and ----------- covered by Lender's perfected security interest and shall not be subject to any other lien, claim, encumbrance or security interest; (c) The item of Inventory shall not have been consigned, sold or leased to any Person; (d) The item of Inventory shall not have been purchased by a Borrower in or as part of a bulk transfer or sale of assets unless there was compliance, or an exemption from compliance, with all applicable bulk sales or transfer laws; (e) The item of Inventory may have been relieved from a Borrower's Inventory supply and may be accounted for by such Borrower as an "unbilled" Account, provided such Borrower can document the status of such item of Inventory to Lender's satisfaction; (f) conforms with Each of the covenants warranties 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 set forth 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 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; or (m) if it is Inventory owned by a target acquired in connection with a Permitted Acquisition, an appraisal and field examination Section 9.3 shall be reaffirmed with respect to such item of Inventory have been completed and are reasonably satisfactory at ----------- the time that the most recent Inventory Report was delivered to Agent Lender; and (which appraisal and field examination may g) The item of Inventory shall otherwise be conducted prior acceptable to the closing of such Permitted Acquisition)Lender, in its reasonable discretion.

Eligible Inventory. Inventory The term AELIGIBLE INVENTORY@ means all INVENTORY owned by a Borrower that either or both of the BORROWERS which is deemed acceptable to the LENDER to be included in the calculation of the BORROWING BASE. The criteria for eligibility may be fixed and revised by Agent, the LENDER from time to time in its Permitted Discretion, discretion. INVENTORY in no event shall be deemed to be Eligible Inventory; provided that, no Inventory shall be Eligible Inventory unless it eligible unless: (a) is located at the LENDER has a 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 first priority perfected security interest in this Agreement, the INVENTORY; (b) no vender, supplier or other PERSON claims any security interest or lien in or to the INVENTORY which is not used, returned, obsolete, spoiled, inadequately sealed, packaged expressly subordinated to the LENDER'S securities interests or stored, or otherwise unmerchantable, consigned, demonstrative or custom inventory, supplies (other than bulk wine), packing or shipping materials, liens therein; (c) it 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 normally 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 currently saleable in the aggregate in Value ordinary course of such red winebusiness of either or both of the BORROWERS; (d) it is not held on consignment, nor subject to any deposit raw materials or down paymentwork in process; (e) meets all standards imposed by any Governmental Authorityit is located on the premises of either of the BORROWERS; (f) conforms with the covenants and representations hereinit does not consist of obsolete, returned or repossessed items of INVENTORY or used goods or goods taken in trade; (g) is subject it does not consist of slow moving items or items determined by the LENDER in its sole discretion to Agent’s duly perfectedbe stale or dated merchandise; (h) it does not consist of packing materials, first priority Liencatalogs, and no other Lien promotion materials, items used as demonstrators, prototypes, or salesman=s samples; (other than (xi) any Lien permitted pursuant it does not consist of an item consigned to PACA either or any other similar agricultural law both of the BORROWERS or regulation with respect to which Agent has established any PERSON claims 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 Documentlien; (j) is it has not subject been consigned by either or both of the BORROWERS 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 Discretiona consignee; (k) is it has not located on been 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 establishedby any PERSON; (l) it is reflected not held by any PERSON (other than the BORROWER) or located upon any premises not owned in fee simple by the BORROWER unless such PERSON or the owner of such premises 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 details LENDER=S sole discretion, by written notice to either or both of a current perpetual inventory reportthe 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) the lowest then-existing market price; (iii) the BORROWERS= lowest selling price, less estimated expenses for packing, selling and delivery; or (miv) 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 have been completed and are reasonably satisfactory to Agent (any price ceiling which appraisal and field examination may be conducted prior established by governmental order, regulation, or restriction. The LENDER shall be the discretionary judge of the value of any INVENTORY, based upon such information as it deems in its discretion to the closing of such Permitted Acquisition)be relevant or applicable in making that determination.

Eligible Inventory. Inventory owned by a Borrower that is deemed by Agent, in its Permitted Discretion, to be Eligible Inventory; provided that, no Inventory shall be Eligible mean all Inventory unless it other than the following: (aA) is located at a Borrower’s principal place Any item 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 this Agreement, (b) Inventory which is not used, returned, obsolete, spoiled, inadequately sealed, packaged or storedin good condition, 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 meet 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 Liengovernmental agency, or (z) any other Lien with respect to which Agent has establish an appropriate reserve department or division thereof, having regulatory authority over such goods, its Permitted Discretion); (h) use or sale, or is within either currently unusable or currently unsalable in the continental United Statesordinary course of Borrower's business, or is not in transit otherwise acceptable to Lender due to age, type, category or quantity; (except (xB) between locations Any item of Borrowers, or (y) to another location disclosed to Agent with respect to Inventory which Agent has received an appropriate Lien Waiver or established an appropriate reserve in its Permitted Discretion, and is not consigned to any Person; (ilocated at one of the locations listed on Exhibit 3.3(B) attached hereto, is not subject to any warehouse receipt or negotiable Document; (j) and covered by Lender's perfected security interest and is not subject to any License other lien, claim, encumbrance or other arrangement security interest; (C) Any item of Inventory which has been consigned, sold or leased to any Person; (D) Any item of Inventory unless 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 restricts such the most recent Inventory Report was delivered to Lender; and (E) Any item of Inventory which is work in-process; (F) Any item of Inventory located in Canada or the United Kingdom; (G) Any item of Inventory which is Slow Moving Inventory; (H) Any item of Inventory which is courseware; (I) Any item of Inventory which is a sort of the FMST Simulator; and (J) Any item of Inventory which was purchased by Borrower in or as part of a "bulk" transfer or sale of assets unless Borrower’s or Agent’s right to dispose , and the seller of such Inventoryitem, unless Agent has received an appropriate Lien Waiver have complied with all applicable bulk sales or established an appropriate reserve in its Permitted Discretion; (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 reflected in the details of a current perpetual inventory report; or (m) 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 have been completed and are reasonably satisfactory to Agent (which appraisal and field examination may be conducted prior to the closing of such Permitted Acquisition)bulk transfer laws.

Eligible Inventory. All of the Inventory owned by a each Credit Party and properly reflected as “Eligible Inventory”, or “Eligible In-Transit Inventory” in the most recent Borrowing Base Certificate delivered by Borrower that is deemed by AgentRepresentative to Agent shall Table of Contents 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 be the approval of Required Lenders in the case of adjustments or new criteria that have the effect of increasing the Borrowing Base. Eligible Inventory; provided that, no Inventory shall be Eligible not include the following Inventory unless it 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 thereof (provided that Reserves may be established with 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 Borrower’s principal place of business leased location either (x) with respect to which a reasonably satisfactory collateral access agreement has been delivered to Agent, or any other facility storing cased goods and/or bulk wine that complies (y) Reserves may be established with such Borrower’s related representations 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 warranties contained Reserves may be established with respect thereto in accordance with this Agreement, or (biv) is not used, returned, obsolete, spoiled, inadequately sealed, packaged or storedlocated 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 otherwise unmerchantable(v) is located at any site if the aggregate book value of Inventory at any such location is less than $100,000; (c) is placed, consigned, demonstrative purchased or custom inventory, supplies sold on consignment (other than bulk wineEligible Consigned Inventory up to an aggregate maximum amount of $2,000,000) or is in transit, except for Inventory in transit between 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 document has 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 Reserves may be 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 Table of Contents by any Governmental Authority having regulatory authority over such goods, their use, lease or sale; (f) consists of display items or packing or shipping materials, (c) is bulk wine at cost parts, manufacturing supplies, work-in-process Inventory, replacement parts, prototypes or wholesale “FOB” cased wine, that is not older than three years following December 31 consists 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; unfinished goods; (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 consists of goods which Agent has established a Grower’s Reserve, (y) non-consensual Permitted Liens arising have been returned 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); buyer; (h) is within not of a type held for sale in the continental United States, is not in transit (except (x) between locations ordinary course 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; such Credit Party’s business; (i) is not subject to any warehouse receipt or negotiable Document; a first priority lien in favor of Agent on behalf of itself and Secured Party, subject to (i) Qualified Liens described in clause (iv) of the definition thereof (provided that Reserves may be established with respect thereto in accordance with this Agreement) and (ii) 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) is does not subject conform to any License of the representations or other arrangement that restricts such Borrower’s or Agent’s right warranties pertaining to dispose of such Inventory, unless Agent has received an appropriate Lien Waiver or established an appropriate reserve Inventory set forth in its Permitted Discretion; the Loan Documents; (k) is consists of Hazardous Materials or goods that can be transported or sold only with licenses that are 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; readily available; (l) is reflected in not covered by insurance as required by the details of a current perpetual inventory report; or Loan Documents; (m) if it is Inventory owned 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 a target acquired Agent; or (n) in connection with a Permitted Acquisitionthe case of an Australian Credit Party, an appraisal and field examination with respect which does not meet all standards imposed by any Australian federal or state government authority, including relating to such Inventory have been completed and are reasonably satisfactory to Agent (its production, acquisition or importation for inventory located in Australia or which appraisal and field examination may be conducted prior to the closing does not consist of such Permitted Acquisition)raw materials or finished goods for inventory located in Australia.

Eligible Inventory. The following shall constitute the Eligibility Criteria for acceptance of Inventory owned by a Borrower that is deemed by Agentfor inclusion in the Borrowing Base All Inventory of the Loan Parties, valued at the lower cost or market in its Permitted Discretionaccordance with GAAP, to be Eligible Inventory; provided that, no but excluding any Inventory shall be Eligible Inventory unless it having any of the following characteristics: (a) Inventory that is in-transit; located at a Borrower’s principal place of business any warehouse, job site or located on any other facility storing cased goods and/or bulk wine premises that complies with such Borrower’s related representations and warranties contained in this Agreement, may be subject to the Lien of any person other than the Collateral Agent; (b) Inventory that is otherwise not usedsubject 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 (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, returned▇▇▇▇ 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 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, spoiled, inadequately sealed, packaged slow moving or storednot currently saleable in the normal course of the Borrower’s operations, or otherwise unmerchantablethe amount of such Inventory that has been reduced by shrinkage; (h) Inventory that the Borrower has returned, consignedhas attempted to return, demonstrative is in the process of returning 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 intends to return to the vendor thereof; (i) not older than four years following December 31 Inventory 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 its vintage year for red wine same, or (ii) is four years not otherwise prohibited under applicable law from selling or older following December 31 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 vintage year for red wine but does Loans, without giving effect to assignments thereof which have not exceed $5,000,000 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 aggregate transactions contemplated hereby; and (b) except as set forth in Value (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 Credit Agreement, and such red wineother 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) is not held appoints and authorizes the Agents to take such action as agents on consignmentits behalf and to exercise such powers and discretion under the Credit Agreement, nor subject the other Loan Documents or any other instrument or document furnished pursuant hereto or thereto as are delegated to any deposit or down paymentthe Agents by the terms thereof, together with such powers as are incidental thereto; and (e) meets agrees that it will be bound by the provisions of the Credit Agreement and will perform in accordance with its terms all standards imposed the obligations which by any Governmental Authoritythe 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; (fb) conforms with if the covenants and representations herein; (g) Assignee is subject to Agent’s duly perfectednot already a Lender under the Credit Agreement, first priority Lienan Administrative Questionnaire, and no (c) a processing and recordation fee of $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 Lien (other than (xamounts) any Lien permitted pursuant [to PACA 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 any other similar agricultural law 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 regulation with respect to which Agent has established a Grower’s Reservethe making of this assignment directly between themselves.] 6. From and after the Effective Date, (ya) non-consensual Permitted Liens arising 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 operation the provisions thereof and (b) 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 the State of New York without regard to conflicts of law which 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 junior 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 Agent’s Lienextent 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. Jefferies Finance LLC, as Administrative Agent for the Lenders referred to below ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ Attention: Account Manager — BioScrip Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ Re: BioScrip, Inc. [Date] Ladies and Gentlemen: 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 (z) any other Lien with respect to which Agent has establish an appropriate reserve its Permitted Discretion“Borrower”); (h) is within , the continental United StatesSubsidiary Guarantors, is not in transit (except (x) between locations of Borrowersthe Lenders, 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 DiscretionJefferies Finance LLC, as 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, as collateral manager and as issuing bank for the Lenders. 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 Borrowing under the Credit Agreement, and that in connection therewith sets forth below the terms on which such Borrowing is not consigned requested to any Person; be made: (iA) Class of Borrowing: [Revolving Borrowing] [Term Borrowing] (B) Principal amount of Borrowing:1 (C) Date of Borrowing (which is not subject 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 any warehouse receipt or negotiable Document; (j) is not subject be disbursed to any License or other arrangement that restricts such Borrower’s or Agent’s right account with: Account No. Borrower hereby represents and warrants that the conditions to dispose lending specified in Sections 4.02(b)-(d) of such Inventory, unless Agent has received an appropriate Lien Waiver or established an appropriate reserve in its Permitted Discretion; (kthe Credit Agreement are satisfied as of the date hereof. 1 See Section 2.02(a) is not located on leased premises or in of 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; or (m) 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 have been completed and are reasonably satisfactory to Agent (which appraisal and field examination may be conducted prior to the closing of such Permitted Acquisition)Credit Agreement for minimum borrowing amounts.

Eligible Inventory. Inventory owned by a Borrower that is deemed by Agent, in its Permitted Discretion, to be Eligible Inventory; provided that, no Inventory shall be (i) Keep all Eligible Inventory unless it only at the locations in the United States; and (aii) is 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 Borrower’s principal place Lien in favor 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 this Agreement, Agent. (b) is 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 useddesignated 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, returnedwarehouseman, obsoleteFAA repair station, spoiledservicer, inadequately sealedmechanic, packaged or storedvendor, supplier, or otherwise unmerchantable, consigned, demonstrative or custom inventory, supplies (other than bulk winePerson unless a Collateral Access Agreement has been put in place with such Person), packing or shipping materialsprovided 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 (cB) such new location is bulk wine at cost or wholesale “FOB” cased wine, within the United States; (ii) any Spare Part that is not older than three years following December 31 Eligible Inventory may be transported to or from, or be in the possession of its vintage year or under the control of, a bailee, warehouseman, FAA repair station, overhaul or maintenance servicer, mechanic, or similar Person for white wine and that is purposes of repair in the ordinary course of Borrowers’ business without a Collateral Access Agreement so long as either (iA) not older than four years following December 31 no Event of its vintage year for red wine Default has occurred and is continuing or would result therefrom, or (iiB) is four years the aggregate book value of all such Spare Parts in the possession of or older following December 31 under the control of its vintage year for red wine but all such Persons, in the aggregate, does not exceed $5,000,000 2,000,000; (iii) so long as such transit is in the aggregate United States and in Value the ordinary course of such red wineBorrowers’ business, Borrowers may move Spare Parts that are not Eligible Inventory to any location identified on Schedule E-3; (div) 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 held on consignmentexceed $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)), nor subject Borrowers may move Spare Parts that are not Eligible Inventory to any deposit or down payment; location outside the United States (e) meets all standards imposed by any Governmental Authority; (f) conforms with including locations outside 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 United States where such Spare Parts 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 or under the control of a bailee, warehouseman, processorFAA repair station, repairmanoverhaul or maintenance servicer, mechanic, shipperor similar Person); (v) so long as such transit is in the ordinary course of Borrowers’ business, freight forwarder 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 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; or (m) if it is Inventory owned by a target acquired in connection with Equipment to complete a Permitted AcquisitionSpare 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, an appraisal and field examination exchange or lease transactions permitted pursuant to Section 5.19(e). (c) Maintain in 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 FARs, or by 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 the ordinary course of Borrowers’ business, (ii) so long as no 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 (iv) with respect to 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 (x) no Event of Default has occurred and is continuing or would result therefrom and (y) the aggregate book value of all such Spare Parts, in the aggregate, does not exceed $1,000,000. (f) Each Borrower, on behalf of each of its Subsidiaries, hereby waives any and all rights that it has or may have been completed and are reasonably satisfactory in the future to assert or claim against Agent (which appraisal and field examination 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, ▇▇▇▇▇▇’▇ 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 may be conducted prior in the possession of or under the control of a bailee, warehouseman, FAA repair station, overhaul or maintenance servicer, mechanic, or similar Person to the closing of such Permitted Acquisitionextent expressly permitted by (but without duplication of) Section 5.19(b).

Eligible Inventory. Upon the delivery by Borrower to Lender of an Inventory owned by a Borrower that is deemed by AgentReport, Lender shall determine, in its Permitted Discretionsole and absolute discretion, to be which items of Inventory listed thereon is Eligible Inventory; provided that. In making this determination, no Inventory shall be Eligible Inventory unless it Lender will consider the following requirements: (a) The item of Inventory is located at a 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 this Agreementgood condition, (b) 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; 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 due to age, type, category or quantity; (fb) conforms with The item of Inventory is located at one of the covenants and representations herein; (g) locations of Borrower listed on Exhibit D attached hereto or as otherwise hereinafter agreed to by Lender, 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 covered 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, Lender's perfected security interest and is not consigned to any Person; (i) is not subject to any warehouse receipt other lien, claim, encumbrance or negotiable Document; security interest; (jc) The item of Inventory 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 seller of such item, 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 subject to any License or other arrangement that restricts such Borrower’s or Agent’s right to dispose of such slow moving 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 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 is not stored at a warehouseman, processor, repairman, mechanic, shipper, freight forwarder leased or other Personwarehouse location, 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; or (m) 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 have been completed leased or warehouse location, Lender has received a landlord waiver or bailee letter in form and are reasonably satisfactory substance acceptable to Agent (which appraisal and field examination may be conducted prior to the closing of such Permitted Acquisition)Lender.

Eligible Inventory. Inventory owned by Borrower or a Borrower that is deemed by Agent, in its Permitted Discretion, to be Eligible InventoryBorrowing Base Guarantor; provided that, no Inventory shall be Eligible Inventory unless it (a) is located at a Borrower’s principal place of business finished goods, work-in-process or any other facility storing cased goods and/or bulk wine that complies with such Borrower’s related representations raw materials, and warranties contained in this Agreementnot packaging or shipping materials, labels, samples, display items, bags, replacement parts or manufacturing supplies; (b) 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 consignment or approval or 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, obsolete or unmerchantable, and does not constitute returned or repossessed goods; (e) meets all standards imposed by any Governmental AuthorityAuthority 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 (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 unless an appropriate reserve its Permitted Discretion)Reserve has been established in Agent’s sole discretion; (h) is within the continental United StatesStates or Canada, is not in transit (except (x) between locations of Borrowers, or (y) Eligible In-Transit Inventory not 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 Discretionexceed $20,000,000 at any time outstanding), and is not consigned to any Person; (i) is not subject to any warehouse receipt or negotiable DocumentDocument unless an appropriate Reserve has been established in Agent’s sole discretion; (j) is not subject to any License or other arrangement that restricts such Borrower’s, any Borrowing Base Guarantor’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 DiscretionWaiver; 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 Rent and Charges Availability Reserve has been establishedestablished in Agent’s sole discretion; (l) is reflected in the details of a current perpetual inventory report; or (m) provided further, Inventory shall not be Eligible Inventory if it is Inventory owned by a target acquired which Agent has (i) determined in connection with a Permitted Acquisitionits Credit Judgment is unacceptable for inclusion in the Aggregate Borrowing Base, an appraisal Tranche A Borrowing Base and field examination with respect Tranche B Borrowing Base and (ii) provided at least two (2) Business Days’ prior notice to such Inventory have been completed and are reasonably satisfactory to Agent Borrower (which appraisal and field examination may be conducted prior to the closing including telephonic or electronic notice promptly confirmed in writing) of such Permitted Acquisition)determination.

Eligible Inventory. Inventory With respect to S&H, finished goods owned by a Borrower such Borrower; PROVIDED that is deemed by Agent, in its Permitted Discretion, to be Eligible Inventory; provided that, no Inventory shall be Eligible Inventory unless it (a) is located at a Borrower’s principal place of business or not include any other facility storing cased goods and/or bulk wine that complies with such Borrower’s related representations and warranties contained in this Agreement, (b) 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 inventory (i) held on consignment, or not older than four years following December 31 otherwise owned by such Borrower, or of its vintage year for red wine or a type no longer sold by such Borrower; (ii) which has been returned by a customer or is four years damaged or older following December 31 subject to any legal encumbrance other than Permitted Liens; (iii) which is not in the possession of its vintage year for red wine but such Borrower 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, (B) such inventory is in transit from one Permitted Inventory Location of such Borrower within the United States of America to another Permitted Inventory Location of such Borrower within the United States of America or (C) the aggregate gross book value of such inventory does not exceed $5,000,000 in 6,000,000 with respect to inventory located at such Borrower's distribution center and warehouse located at 8145 ▇▇▇▇▇▇ ▇▇▇▇▇, Florence, Kentucky and operated by The Discovery Channel Store, Inc. pursuant to the aggregate in Value of Cooperation and Services Agreement between The Discovery Channel Store, Inc. and 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 LienBorrower, and no $1,750,000 with respect to all other Lien (other than inventory locations and the Administrative Agent has received (x) any Lien permitted pursuant a waiver in form and substance satisfactory to PACA or any other similar agricultural law or regulation with respect to which the Administrative Agent has established a Grower’s Reservefrom the possessor of such inventory, (y) non-consensual Permitted Liens arising by operation of law which are junior financing statements in form and substance satisfactory to the Agent’s LienAdministrative Agent executed and delivered by such Borrower as secured party/bail▇▇ ▇▇▇ 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/bail▇▇ ▇▇ 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 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 inventory is in transit from one Permitted Inventory Location of such Borrower within the United States of America to another Permitted Inventory Location of such Borrower within the United States of America; (vii) 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 legal opinion in form and substance satisfactory to the Administrative Agent that the Loan Documents comply with the provisions of ss.9102(5)(b) of the Uniform Commercial Code as in effect in California, or (zix) 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 consists 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 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; or (m) 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 have been completed and are reasonably satisfactory to Agent (which appraisal and field examination may be conducted prior to the closing of such Permitted Acquisition)live plantings.

Eligible Inventory. Inventory owned Based on the most recent Borrowing Base ------------------ Certificate delivered by a Borrower that is deemed by to Revolving Credit Agent and on other information available to Revolving Credit Agent, Revolving Credit Agent shall in its Permitted Discretionsole 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 be adjust any such criteria, to establish new criteria and to adjust advance rates with to Eligible Inventory; provided thatInventory 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 foregoing, no Inventory shall be Eligible Inventory unless it unless: (a) it is located at a Borrower’s principal place of business raw materials or any other facility storing cased goods and/or bulk wine that complies with such Borrower’s related representations and warranties contained in this Agreement, finished goods; (b) it is not usedin good, 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, new and saleable condition; (c) is bulk wine at cost or wholesale “FOB” cased wine, that it 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 slow-moving, obsolete 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; unmerchantable; (d) is not held on consignment, nor subject to any deposit or down payment; (e) it meets all standards imposed by any Governmental Authority; ; (e) it conforms in all respects to the warranties and representations set forth in this Agreement; (f) conforms with the covenants it is owned by Borrower and representations herein; (g) is at all times subject to Agent’s 's duly perfected, first priority Lien, security interest and no other Lien except a Permitted Lien; (other than (xg) any Lien permitted pursuant to PACA it is in Borrower's possession and control, situated at a location in compliance with the Agreement and is not in transit 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 outside the continental United States, ; (h) it is not in transit (except (x) between locations covered by a negotiable document of Borrowerstitle, or (y) to another location disclosed unless such document has been delivered to Agent with respect to which all necessary endorsements, free and clear of all Liens except those in favor of Agent has received an appropriate Lien Waiver or established an appropriate reserve in its Permitted Discretion, and is not consigned to any Person; Lenders; (i) is it does not subject to any warehouse receipt or negotiable Document; consist of goods which have been returned by the buyer; (j) is not subject to any License it consists of goods held for sale or other arrangement that restricts such utilized in the ordinary course of 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's business; 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 Rent and Charges Reserve has been established; (l) is reflected in the details of a current perpetual inventory report; or (m) if it is Inventory owned covered by a target acquired in connection with a Permitted Acquisition, an appraisal and field examination with respect to such Inventory have been completed and are reasonably satisfactory casualty insurance acceptable to Agent (which appraisal and field examination may be conducted prior to the closing of such Permitted Acquisition)Revolving Credit Agent.

Eligible Inventory. Eligible Inventory" shall consist of all of the Inventory of a Borrower, except the following: (i) work in process; (ii) Inventory which is damaged, obsolete, not in good condition, or not either currently usable or currently saleable in the ordinary course of 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 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 that is deemed by Agentlisted 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 order for which such 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 Permitted Discretion, use and/or sale. In the event that Inventory previously scheduled in a Monthly Report or Borrowing Base Certificate ceases to be Eligible Inventory; provided that, no Inventory Borrowers shall be Eligible Inventory unless it (a) is located at a 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 this Agreement, (b) 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 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; or (m) 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 have been completed and are reasonably satisfactory to Agent (which appraisal and field examination may be conducted prior to the closing of such Permitted Acquisition)notify Lender thereof immediately.

Eligible Inventory. Inventory owned by a Borrower that is deemed by Agent, in its Permitted Discretion, deems to be Eligible Inventory; provided that. Without limiting the foregoing, no Inventory shall be Eligible Inventory unless it (a) is located at finished goods built pursuant to a Borrower’s principal place of business customer order, raw materials or any other facility storing cased goods and/or bulk wine that complies with such Borrower’s related representations work-in-process and warranties contained in this Agreement, (b) 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 packaging or shipping materials, (c) is bulk wine at cost labels, samples, display items, bags, replacement parts, service parts 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 winemanufacturing supplies; (db) is not held on consignment, nor ; (c) is not subject to any deposit or down payment; (d) is in new and saleable condition and is not damaged, defective, shopworn or otherwise unfit for sale; (e) is not slow-moving, perishable, obsolete or unmerchantable, and does not constitute returned or repossessed goods; (f) meets all standards imposed by any Governmental Authority, has not 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; (fg) conforms with the covenants and representations herein; (gh) 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 DiscretionLiens); (hi) is within the continental United States, States or Canada; is not in transit (except (x) between locations of Borrowers, between locations of a vendor to a location of a Borrower or (y) between a location of a Borrower 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, a customer of a Borrower; and is not consigned to any Person; (ij) is not subject to any warehouse receipt or negotiable Document; (jk) 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 Discretionhas otherwise waived such requirement; and (kl) is not located (x) on a leased premises or of a Borrower, (y) in the possession of a warehouseman, processor, repairman, mechanic, shipper, freight forwarder or other Person, unless 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 establishedestablished 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 acceptance by such customer under the terms of the sale contracts between a Borrower and such customer; and (lm) is reflected in the details of a current perpetual inventory report; or (m) 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 have been completed and are reasonably satisfactory to Agent (which appraisal and field examination may be conducted prior to the closing of such Permitted Acquisition).

Eligible Inventory. All of the Inventory owned by a each Credit Party and properly reflected as “Eligible Inventory”, or “Eligible In-Transit Inventory” in the most recent Borrowing Base Certificate delivered by Borrower that is deemed by AgentRepresentative 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 be the approval of Required Lenders in the case of adjustments or new criteria that have the effect of increasing the Borrowing Base. Eligible Inventory; provided that, no Inventory shall be Eligible not include the following Inventory unless it of a Credit Party that: (a) is located at a Borrower’s principal place not owned by such Credit Party free and clear of business or all Liens and rights of any other facility storing cased goods and/or bulk wine Person (including the rights of a purchaser that complies has made progress payments and the rights of a surety that has issued a bond to assure such Credit Party’s performance with such Borrower’s related representations and warranties contained respect to that Inventory), except (i) Qualified Liens described in clause (iv) of the definition thereof (provided that Reserves may be established with 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) 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) is not older than four years following December 31 of its vintage year for red wine 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 four years stored at a leased location either (x) with respect to which a reasonably satisfactory collateral access agreement has been delivered to Agent, or older following December 31 (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 its vintage year for red wine but does not exceed $5,000,000 in 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 aggregate book value of 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 Value transit, except for Inventory in transit between locations of such red wine; 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 not held on consignmentcovered by a negotiable document of title, nor subject unless such document has been delivered to any deposit or down payment; Agent with all necessary endorsements, free and clear of all Liens except Qualified Liens described in clause (iv) of the definition thereof (provided that Reserves may be established with respect thereto in accordance with this Agreement); (e) meets 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 any Governmental Authority; Authority having regulatory authority over such goods, their use, lease or sale; (f) conforms with the covenants and representations herein; 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) 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 consists of goods which Agent has established a Grower’s Reserve, (y) non-consensual Permitted Liens arising have been returned 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); buyer; (h) is within not of a type held for sale in the continental United States, is not in transit (except (x) between locations ordinary course 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; such Credit Party’s business; (i) is not subject to any warehouse receipt or negotiable Document; a first priority lien in favor of Agent on behalf of itself and Secured Party, subject to (i) Qualified Liens described in clause (iv) of the definition thereof (provided that Reserves may be established with respect thereto in accordance with this Agreement) and (ii) 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) is does not subject conform to any License of the representations or other arrangement that restricts such Borrower’s or Agent’s right warranties pertaining to dispose of such Inventory, unless Agent has received an appropriate Lien Waiver or established an appropriate reserve Inventory set forth in its Permitted Discretion; the Loan Documents; (k) is consists of Hazardous Materials or goods that can be transported or sold only with licenses that are 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; readily available; (l) is reflected in not covered by insurance as required by the details of a current perpetual inventory report; or Loan Documents; (m) if it is Inventory owned 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 a target acquired Agent; or (n) in connection with a Permitted Acquisitionthe case of an Australian Credit Party, an appraisal and field examination with respect which does not meet all standards imposed by any Australian federal or state government authority, including relating to such Inventory have been completed and are reasonably satisfactory to Agent (its production, acquisition or importation for inventory located in Australia or which appraisal and field examination may be conducted prior to the closing does not consist of such Permitted Acquisition)raw materials or finished goods for inventory located in Australia.

Eligible Inventory. Inventory With respect to the Borrower and AEL, finished goods and piece goods owned by a the Borrower that is deemed or, ONLY with respect to finished goods and piece goods inventory located in Hong Kong, AEL or the Borrower if the Borrower has taken all steps requested by the Facility Agent to grant to the Facility Agent, for the benefit of the Agents and the Lenders, a first-priority perfected charge over the assets of the Borrower located in its Permitted DiscretionHong Kong, pursuant to such documentation (including, without limitation, a debenture, corporate authority documentation, and one or more legal opinion(s)) as shall be satisfactory, in form and substance, to be the Facility Agent; PROVIDED that Eligible Inventory; provided that, no Inventory shall be Eligible Inventory unless it not include any inventory (a) is located at held on consignment, or not otherwise owned by the Borrower or AEL or of a type no longer sold by the 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 this Agreement, (b) which has been returned by a customer or is not used, returned, obsolete, spoiled, inadequately sealed, packaged damaged or stored, or otherwise unmerchantable, consigned, demonstrative or custom inventory, supplies (subject to any legal encumbrance other than bulk wine), packing or shipping materialsPermitted Liens, (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 which (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 if such goods are located 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 the possession of Borrowers, the Borrower or any of its Subsidiaries unless the Facility Agent has received a waiver from the party in possession of such inventory in form and substance reasonably satisfactory to the Facility Agent or (yii) to another location disclosed to Agent if such goods are in transit, 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 all documents 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 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; or (m) if it is Inventory owned by a target acquired in connection with a Permitted Acquisition, an appraisal and field examination with respect title relating to such Inventory have not been completed consigned to the Facility Agent in a manner reasonably acceptable to the Facility Agent and are the Facility Agent or an Approved Customs Broker is not in possession of all documents of title relating to such goods, (d) which is held by the Borrower or any of its Subsidiaries on property leased by the Borrower or any of its Subsidiaries, unless the Facility Agent has received a waiver from the lessor of such leased property and, if any, sublessor thereof in form and substance reasonably satisfactory to the Facility Agent, (e) as to which the security interest of the Facility Agent has not been duly perfected under applicable local law, (f) which appraisal has been shipped to a customer of the Borrower or any of its Subsidiaries regardless of whether such shipment is on a consignment basis, (g) which the Facility Agent reasonably deems to be obsolete or not marketable or otherwise does not consider "Eligible Inventory", (h) which is reasonably deemed by the Facility Agent, based upon reasonable credit, commercial, accounting or other considerations, to be unacceptable for inclusion in Eligible Inventory, or (i) which is owned by the Borrower and field examination may be conducted prior located in Hong Kong unless the Borrower has taken all steps requested by the Facility Agent to grant to the closing Facility Agent, for the benefit of the Agents and the Lenders, a first-priority perfected charge over the assets of the Borrower located in Hong Kong, pursuant to such Permitted Acquisitiondocumentation (including, without limitation, a debenture, corporate authority documentation, and one or more legal opinion(s)) as shall be satisfactory, in form and substance, to the Facility Agent.

Eligible Inventory. Inventory owned by a Borrower that is deemed by AgentAgent shall have the sole right, in its Permitted Discretionsole reasonable discretion exercised in accordance with its customary business practices, to determine which Inventory of Borrowers is eligible (the "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 applicable Borrower's business; (ii) Inventory other than blank T-shirt stock, current calendar model year die-cast finished goods and 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 Eligible Inventoryunacceptable due to age, type, category and/or quantity; provided that, no (iii) Inventory shall be Eligible Inventory unless it (a) is located at a 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 this Agreement, (b) is not used, returned, obsolete, spoiled, inadequately sealed, packaged or stored, or otherwise unmerchantable, consigned, demonstrative or custom inventory, supplies (Person 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 wineBorrowers; (div) 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 Inventory with respect to which Agent, on behalf of Lenders, does not have a first and 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 deemed to be Eligible Inventory by Agent has established in its sole discretion; provided, that 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 Grower’s Reservelocation owned or leased by QVC, Inc., (y2) nonsuch 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-consensual Permitted Liens arising 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 operation of law which are junior Agent following a Default would require the consent of, or royalty payments to, any third party, except for Inventory subject to the Agent’s Lien, or rights of licensees under Motor Sports License Agreements entered into in the ordinary course of business; and (zx) any other Lien Inventory with respect to which Agent has establish an appropriate reserve its Permitted Discretion); (h) any disclosure 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 required in the possession 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 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 $200,000 in the details of a current perpetual inventory report; or (m) if it is aggregate ceases to be Eligible Inventory owned by a target acquired in connection with a Permitted Acquisitionunder the above-described criteria, an appraisal and field examination with respect to such Inventory have been completed and are reasonably satisfactory to Borrower Representative shall notify Agent (which appraisal and field examination may be conducted prior to the closing of such Permitted Acquisition)thereof promptly after any Borrower has obtained knowledge thereof.