EXHIBIT 10.1
AMENDMENT XX. 0
XXXXXXXXX Xx. 0 (this "Amendment") dated as of March 22, 2002, under the
$120,000,000 Credit Agreement dated as of April 20, 2001 (as heretofore amended,
the "Credit Agreement") among KINDRED HEALTHCARE OPERATING, INC. (formerly named
Vencor Operating, Inc.) (the "Borrower"), KINDRED HEALTHCARE, INC. (formerly
named Vencor, Inc.) ("Kindred"), the LENDERS, SWINGLINE BANK AND LC ISSUING
BANKS party thereto, JPMORGAN CHASE BANK (formerly The Chase Manhattan Bank,
successor-by-merger to Xxxxxx Guaranty Trust Company of New York), as
Administrative Agent and Collateral Agent, and GENERAL ELECTRIC CAPITAL
CORPORATION, as Documentation Agent and Collateral Monitoring Agent.
W I T N E S S E T H:
WHEREAS, the parties hereto desire to amend certain provisions of the
Credit Agreement as provided herein;
NOW, THEREFORE, the parties hereto agree as follows:
Section 1. Defined Terms; References. Unless otherwise specifically defined
herein, each term used herein which is defined in the Credit Agreement has the
meaning assigned to such term in the Credit Agreement. Each reference to
"hereof", "hereunder", "herein" and "hereby" and each other similar reference
and each reference to "this Agreement" and each other similar reference
contained in the Credit Agreement shall, after the Amendment Effective Date (as
defined below), refer to the Credit Agreement as amended hereby.
Section 2. Defined Terms. The definition of "Free Cash Flow" in Section
1.01 of the Credit Agreement is amended by deleting clause (iii) thereof and
renumbering clauses (iv), (v) and (vi) thereof as clauses (iii), (iv) and (v),
respectively.
Section 3. Increase in Commitments. Notwithstanding the last sentence of
Section 2.11(e)(i) and the last sentence of Section 2.13, in each case, of the
Credit Agreement, the Commitment of each Lender shall be ratably increased so
that the aggregate Commitments of all Lenders under the Credit Agreement shall
equal $120,000,000, such increase to take effect on the Commitment Increase
Effective Date (as defined below). Thereafter, the defined term "Commitment" in
the Credit Agreement shall be read to give effect to this increase in
Commitments. The prior reduction in the aggregate Commitments to $75,000,000
that became
effective on or about November 9, 2001 shall be disregarded for purposes of any
provision of Section 2.11 of the Credit Agreement, which permits the Borrower to
take certain specified actions (including prepaying loans under the Senior
Secured Credit Agreement) if the aggregate Commitments have previously been
permanently reduced to $75,000,000.
Section 4. Prepayment of Loans under the Senior Secured Credit Agreement;
Clean-Down Period. (a) The language prior to clause (i) of Section 2.11(b) of
the Credit Agreement is amended to read as follows:
"If on any date (an "Equity Receipt Date") on or after the Closing
Date Vencor receives any Net Cash Proceeds from any Equity Issuance,
Vencor shall promptly provide notice thereof to the Administrative
Agent, which notice shall specify the amount of the Net Cash Proceeds
received with respect thereto, whether all or any portion of such Net
Cash Proceeds will be transferred to the Borrower for application by
the Borrower to prepay loans under the Senior Secured Credit Agreement
(the amount, if any, specified for such purpose, the "Senior Secured
Prepayment Amount"), the positive amount, if any, equal to (x) 75% of
such Net Cash Proceeds less (y) the Senior Secured Prepayment Amount
(the "Designated Equity Proceeds") and the date on which such Net Cash
Proceeds were received. If any such notice shall specify a Senior
Secured Prepayment Amount, then within three Business Days after the
date of such notice, Vencor shall transfer to the Borrower as an
equity contribution such Senior Secured Prepayment Amount and, unless
a Default shall have occurred and be continuing, the Borrower shall
immediately prepay an aggregate principal amount of loans under the
Senior Secured Credit Agreement equal to the amount so transferred.
The Designated Equity Proceeds, if any, with respect to such Equity
Issuance shall be applied as follows:"
(b) The Lenders consent to the Borrower and the lenders thereunder amending
the Senior Secured Credit Agreement to permit the Borrower to make the
prepayments of loans thereunder as set forth in paragraph (a).
(c) The provisions of Section 2.11(e)(iv) of the Credit Agreement are
deleted and replaced with "[Intentionally omitted.]".
Section 5. Information. Section 5.01(o) of the Credit Agreement is amended
by replacing the reference to "promptly upon" with a reference to "within 15
Business Days of".
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Section 6. Guarantees by Future Restricted Subsidiaries. Section 5.07 of
the Credit Agreement is amended by replacing the reference to "five" with a
reference to "15".
Section 7. Future Assets to Be Added to Collateral. (a) Sections 5.08(a)
and 5.08(d) of the Credit Agreement are each amended by replacing the reference
to "5" with a reference to "15".
(b) Section 5.08(b) of the Credit Agreement is amended by replacing the
reference to "two" with a reference to "five" and replacing the reference to
"30" with a reference to "45".
Section 8. Use of Proceeds and Letters of Credit. Section 5.11(a) of the
Credit Agreement is amended by inserting (i) the phrase "make Restricted
Investments involving Healthcare Facilities and assets incidental thereto
pursuant to Section 7.08(b) but subject to the proviso below and to" immediately
after the phrase "will be used by the Borrower to" and (ii) the following
proviso at the end thereof:
"; provided that the aggregate principal amount of Loans and Swingline
Loans outstanding at any time the proceeds of which have been applied
by the Borrower and its Restricted Subsidiaries to directly or
indirectly make Restricted Investments involving Healthcare Facilities
and assets incidental thereto pursuant to Section 7.08(b) shall at no
time exceed $45,000,000".
Section 9. Fixed Charge Coverage Ratio (EBITDAR). The table appearing in
Section 6.01(a) of the Credit Agreement is amended and restated in its entirety
to read as follows:
--------------------------------------------------------------------------------
Period Ratio
--------------------------------------------------------------------------------
June 30, 2001 through December 31, 2001 1.14 to 1
--------------------------------------------------------------------------------
March 31, 2002 through December 31, 2004 1.25 to 1
--------------------------------------------------------------------------------
March 31, 2005 and thereafter 1.35 to 1
--------------------------------------------------------------------------------
Section 10. Total Leverage Ratio. The table appearing in Section 6.02(a) of
the Credit Agreement is amended and restated in its entirety to read as follows:
--------------------------------------------------------------------------------
Period Ratio
--------------------------------------------------------------------------------
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--------------------------------------------------------------------------------
June 30, 2001 through December 31, 2001 6.60 to 1
--------------------------------------------------------------------------------
March 31, 2002 through December 31, 2002 6.40 to 1
--------------------------------------------------------------------------------
March 31, 2003 through December 31, 2003 6.35 to 1
--------------------------------------------------------------------------------
March 31, 2004 through December 31, 2004 6.20 to 1
--------------------------------------------------------------------------------
March 31, 2005 through December 31, 2005 6.00 to 1
--------------------------------------------------------------------------------
March 31, 2006 and thereafter 5.80 to 1
--------------------------------------------------------------------------------
Section 11. Minimum Consolidated Net Worth. Section 6.04 of the Credit
Agreement is amended and restated in its entirety to read as follows:
"At each Quarterly Measurement Date set forth below, Consolidated Net
Worth will not be less than the amount set forth below opposite such
Quarterly Measurement Date:
-------------------------------------------------
Quarterly Measurement Date Amount
-------------------------------------------------
June 30, 2001 $378,797,000
-------------------------------------------------
September 30, 2001 $385,470,000
-------------------------------------------------
December 31, 2001 $399,125,000
-------------------------------------------------
March 31, 2002 $500,000,000
-------------------------------------------------
June 30, 2002 $510,000,000
-------------------------------------------------
September 30, 2002 $520,200,000
-------------------------------------------------
December 31, 2002 $530,604,000
-------------------------------------------------
March 31, 2003 $552,040,000
-------------------------------------------------
June 30, 2003 $563,081,000
-------------------------------------------------
September 30, 2003 $574,343,000
-------------------------------------------------
December 31, 2003 $585,830,000
-------------------------------------------------
March 31, 2004 $609,497,000
-------------------------------------------------
June 30, 2004 $621,687,000
-------------------------------------------------
September 30, 2004 $634,121,000
-------------------------------------------------
December 31, 2004 $646,803,000
-------------------------------------------------
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--------------------------------------------------
March 31, 2005 $659,739,000
--------------------------------------------------
June 30, 2005 $672,934,000
--------------------------------------------------
September 30, 2005 $683,393,000
--------------------------------------------------
December 31, 2005 $700,121,000
--------------------------------------------------
March 31, 2006 $714,123,000"
--------------------------------------------------
Section 12. Limitation on Debt; Negative Pledge. Sections 7.01(a)(iv),
7.01(a)(v), 7.02(f) and 7.02(g) of the Credit Agreement are each amended by
replacing the reference to "$25,000,000" with a reference to "$50,000,000".
Section 13. Restricted Payments. (a) Section 7.07(a)(v)(A) of the Credit
Agreement is amended by replacing the reference to "3.5:1" with a reference to
"4.0:1".
(b) Section 7.07(a)(v)(B) of the Credit Agreement is amended and restated
in its entirety to read as follows:
"the aggregate amount expended for all Restricted Payments made
pursuant to this clause (v) (x) during the 2002 Fiscal Year, would not
exceed 25% of the Free Cash Flow calculated for the period beginning
on the first day of the first full Fiscal Quarter following the
Closing Date and ending on December 31, 2001 and (y) during any Fiscal
Year thereafter, would not exceed 20% of the Free Cash Flow calculated
for the immediately preceding Fiscal Year (such calculation to be
based on financial statements for such immediately preceding Fiscal
Year that have been provided pursuant to this Agreement);"
(c) Section 7.07(b) of the Credit Agreement is amended and restated in its
entirety to read as follows:
"Vencor shall not, directly or indirectly, use more than 25% of the
proceeds of any Restricted Payment to (i) declare or pay any dividend
or other distribution on any Equity Interests of Vencor (except
dividends payable solely in Equity Interests of the same class) or
(ii) purchase, redeem, retire or otherwise acquire (any of the
foregoing, an "acquisition") any Equity Interests of Vencor held by
any Person; provided that (x) acquisitions of Equity Interests of
Vencor permitted by Section 7.07(a)(ii) shall be excluded for purposes
of determining compliance with clause (ii)
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and (y) payments may be declared and made and acquisitions may be
effected pursuant to this clause (b) only if at the time of, and after
giving effect to, such payment or acquisition, as applicable, no
Default shall have occurred and be continuing."
Section 14. Limitations on Acquisitions and Investments. Section
7.08(b)(ii) of the Credit Agreement is amended by (i) deleting the reference to
"(such Debt, "Investment Related Debt")", (ii) replacing the reference to
"$30,000,000" with a reference to "$130,000,000" and (iii) deleting the proviso
thereto.
Section 15. No Voluntary Prepayments of Other Debt. Section 7.15 of the
Credit Agreement is amended by replacing the second proviso thereto with
"provided further that, unless a Default shall have occurred and be continuing,
this Section will not apply to any prepayment of loans under the Senior Secured
Credit Agreement expressly permitted by any provision of this Agreement,
including any Excess Cash Prepayment and any prepayment permitted by the second
sentence of Section 2.11(b)".
Section 16. Representations Correct; No Default. Kindred and the Borrower
each represents and warrants that (i) the representations and warranties
contained in the Financing Documents are true as though made on and as of the
date hereof and will be true on and as of the Amendment Effective Date and the
Commitment Increase Effective Date as though made on and as of such dates and
(ii) no Default has occurred and is continuing on the date hereof and no Default
will occur or be continuing on the Amendment Effective Date or the Commitment
Increase Effective Date.
Section 17. Counterparts; Effectiveness. (a) This Amendment may be signed
in any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
(b) This Amendment shall become effective as of the date hereof on the date
(the "Amendment Effective Date") when the Administrative Agent shall have
received (i) duly executed counterparts hereof signed by Kindred, the Borrower
and the Required Lenders (or, in the case of any Lender as to which an executed
counterpart shall not have been received, the Administrative Agent shall have
received telegraphic, telex or other written confirmation from such party of
execution of a counterpart hereof by such Lender) and (ii) confirmation that the
Borrower has paid all statements of Xxxxx Xxxx & Xxxxxxxx, special counsel for
the Administrative Agent, that have been rendered to the Borrower at least two
Business Days prior to the Amendment Effective Date in respect of this Amendment
or other Credit Agreement matters; provided that the increase in
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Commitments referred to in Section 3 shall become effective only on the later of
(such later date, the "Commitment Increase Effective Date") (x) the date on
which the Administrative Agent shall have received duly executed counterparts
hereof signed by Kindred, the Borrower and each Lender (or, in the case of any
Lender as to which an executed counterpart shall not have been received, the
Administrative Agent shall have received telegraphic, telex or other written
confirmation from such party of execution of a counterpart hereof by such
Lender), (y) the date on which "Required Lenders" under the Senior Secured
Credit Agreement (as defined therein) shall have consented to such increase in
the Commitments and (z) April 5, 2002.
(c) No later than the first Business Day after the Fee Determination Date
(as defined below), the Borrower shall pay the Administrative Agent, in
immediately available funds for the account of each Lender that has evidenced
its agreement hereto as provided in clause (b) by 5:00 P.M. (New York City time)
on the later of (i) April 5, 2002 and (ii) the date the Administrative Agent
issues a notice to the Lenders saying this Amendment (other than, unless such
increase has theretofore become effective, the increase in Commitments provided
for herein) has become effective (such later date, the "Fee Determination
Date"), an amendment fee in an amount equal to 0.25% of such Lender's Commitment
(as in effect immediately prior to giving effect to the increase in Commitments
referred to in Section 3). In addition, no later than the first Business Day
after the Commitment Increase Effective Date, the Borrower shall pay the
Administrative Agent, in immediately available funds for the account of each
Lender, a commitment increase fee in an amount equal to 1% of the increase in
such Lender's Commitment provided for herein.
(d) Except as expressly set forth herein, the amendments contained herein
shall not constitute a waiver or amendment of any term or condition of the
Credit Agreement or any other Financing Document, and all such terms and
conditions shall remain in full force and effect and are hereby ratified and
confirmed in all respects.
Section 18. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed by their respective authorized officers as of the day and year
first above written.
KINDRED HEALTHCARE OPERATING, INC.
By /s/ Xxxxxxx X. Xxxxxxxxxx
------------------------------------
Name: XXXXXXX X. XXXXXXXXXX
Title: SENIOR VICE PRESIDENT,
CHIEF FINANCIAL OFFICER AND
TREASURER
KINDRED HEALTHCARE, INC.
By /s/ Xxxxxxx X. Xxxxxxxxxx
------------------------------------
Name: XXXXXXX X. XXXXXXXXXX
Title: SENIOR VICE PRESIDENT,
CHIEF FINANCIAL OFFICER AND
TREASURER
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LENDERS
-------
JPMORGAN CHASE BANK, as Administrative
Agent and as Lender
By: /s/ Xxxxxx Xxxxxxxxx
-----------------------------------
Name: XXXXXX XXXXXXXXX
Title: VICE PRESIDENT
GENERAL ELECTRIC CAPITAL
CORPORATION
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------
Name: XXXXX X. XXXXXXXX
Title: DULY AUTHORIZED SIGNATORY
XXXXXXX, XXXXX CREDIT PARTNERS, L.P.
By: /s/ Xxxxx XxXxxxxxx
-----------------------------------
Name: XXXXX XxXXXXXXX
Title: AUTHORIZED SIGNATOR
CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ Xxxxxxx Heidriech
-----------------------------------
Name: XXXXXXX HEIDRIECH
Title: SENIOR VICE PRESIDENT
FOOTHILL INCOME TRUST II, L.P.
By: /s/ M. E. Xxxxxxx
-----------------------------------
Name: M. E. XXXXXXX
Title: MANAGING MEMBER
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