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Item 1.01
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Entry into a Material Definitive Agreement.
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Term Loan Amendment Agreement
On June 14, 2016, Kindred Healthcare, Inc. (“Kindred”) entered into a fifth amendment and restatement agreement (the “Term
Loan Amendment Agreement”) among Kindred, the other credit parties party thereto, JPMorgan Chase Bank, N.A., as administrative agent and collateral agent (the “Term Loan Agent”), and the lenders party thereto. The Term Loan Amendment
Agreement amends and restates the Term Loan Credit Agreement dated as of June 1, 2011 (as amended by that certain Incremental Amendment No. 1 to the Term Loan Credit Agreement dated as of October 4, 2012 and as further amended and
restated by that certain Amendment and Restatement Agreement dated as of May 30, 2013, that certain Second Amendment and Restatement Agreement dated as of August 21, 2013, that certain Third Amendment and Restatement Agreement dated as of
April 9, 2014, that certain Fourth Amendment and Restatement Agreement dated as of November 25, 2014 and as further amended by that certain Incremental Amendment No. 2 dated as of March 10, 2015), among Kindred, the Term Loan
Agent and the lenders party thereto (the “Prior Term Loan Facility”).
The Term Loan Amendment Agreement amends and restates the
Prior Term Loan Facility (as amended and restated, the “Term Loan Facility”) to provide for, among other things, (1) additional joint venture flexibility, including an increased ability to enter into and make investments in joint
ventures that are non-guarantor restricted subsidiaries and to incur debt and liens of such joint ventures and other non-guarantor restricted subsidiaries, (2) an increase in the size of a basket for asset sales from 15% to 25% of consolidated
total assets, (3) maintaining a maximum total leverage ratio of 6.00:1.00 for each quarterly measurement date after the date of such amendment, and (4) a prepayment premium of 1.00% in connection with any repricing transaction within six
months of the closing date.
The Term Loan Amendment Agreement also provides for an incremental term loan under the Term Loan Facility in
an aggregate principal amount of $200 million. The incremental term loan was issued with 95 basis points of original issue discount and has the same terms as, and is fungible with, the $1.18 billion in aggregate principal amount of term loans that
were outstanding under the Term Loan Facility immediately prior to the effectiveness of the Term Loan Amendment Agreement. The net proceeds from the incremental term loan were used to repay a portion of Kindred’s outstanding borrowings under
its ABL Facility (as defined below).
ABL Amendment Agreement
Also on June 14, 2016, Kindred entered into a fourth amendment and restatement agreement (the “ABL Amendment Agreement”) among
Kindred, JPMorgan Chase Bank, N.A., as administrative agent, and the lenders party thereto. The ABL Amendment Agreement amends and restates the ABL Credit Agreement dated as of June 1, 2011 (as amended by that certain Amendment No. 1 to
the ABL Credit Agreement dated as of October 4, 2012 and as amended and restated by that certain Amendment and Restatement Agreement dated as of August 21, 2013, that certain Second Amendment and Restatement Agreement dated as of
April 9, 2014 and that certain Third Amendment and Restatement Agreement dated as of October 31, 2014, and as further amended by that certain Incremental ABL Joinder dated as of December 12, 2014 and that certain Amendment No. 2
dated as of June 3, 2015), among Kindred, JPMorgan Chase Bank, N.A., as administrative agent and collateral agent, and the lenders party thereto (the “Prior ABL Facility”).
The ABL Amendment Agreement amends and restates the Prior ABL Facility (as amended and restated, the “ABL Facility”) to provide for,
among other things, (1) additional joint venture flexibility, including an increased ability to enter into and make investments in joint ventures that are non-guarantor restricted subsidiaries and to incur debt and liens of such joint ventures
and other non-guarantor restricted subsidiaries, and (2) an increase in the size of a basket for asset sales from 15% to 25% of consolidated total assets.
The descriptions of the Term Loan Amendment Agreement and the ABL Amendment Agreement are qualified by the full text of the Term Loan
Amendment Agreement and the ABL Amendment Agreement, which are attached hereto as Exhibit 10.1 and Exhibit 10.2, respectively, and incorporated herein by reference.