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Item 1.01.
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Entry into a Material Definitive Agreement.
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Hillenbrand, Inc. (the “Company”) has taken proactive
measures to maintain financial flexibility during the COVID-19 pandemic. As previously reported, as part of the actions to safeguard
the Company’s capital position, the Company made draws on its revolving credit facility (the “Revolver”) available
under the Third Amended and Restated Credit Agreement, dated as of August 28, 2019, among the Company, as a borrower, the subsidiary
borrowers party thereto, the lenders party thereto, and JPMorgan Chase Bank, N.A., as administrative agent for the lenders (as
amended from time to time prior to the date hereof, the “Existing Credit Agreement”).
As previously reported, the Existing Credit Agreement and the
Company’s other debt documents contain certain financial covenants and events of default, including maintenance of certain
financial ratios. The Existing Credit Agreement is filed as Exhibit 10.01 to the Company’s Current Report on Form 8-K filed
on September 4, 2019, with amendments thereto filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on
October 11, 2019 and as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on January 10, 2020, and such filings
are incorporated herein by this reference.
Amendment No. 4 to Third Amended and Restated Credit Agreement
On May 19, 2020, the Company and the subsidiary borrowers party
to the Existing Credit Agreement entered into Amendment No. 4 (the “Fourth Amendment”) to Existing Credit Agreement
(as amended by the Fourth Amendment, the “Credit Agreement”). The Fourth Amendment amends the Existing Credit Agreement
to, among other things:
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(i)
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increase the maximum permitted leverage ratio to:
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(A)
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4.75 to 1.00 for the fiscal quarters ending June 30, 2020, September 30, 2020, December 31, 2020 and March 31, 2021,
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(B)
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4.25 to 1.00 for the fiscal quarter ending June 30, 2021,
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(C)
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4.00 to 1.00 for the fiscal quarter ending September 30, 2021,
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(D)
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3.75 to 1.00 for the fiscal quarter ending December 31, 2021, and
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(E)
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3.50 to 1.00 for the fiscal quarter ending March 31, 2022 and each fiscal quarter ending thereafter;
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(ii)
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increase the margin paid on LIBO Rate and Alternate Base Rate (each as defined in the Credit Agreement) revolving loans and
term loans (such margin, the “Applicable Rate”) (x) at the pricing level applicable if the leverage ratio equals or
exceeds 3.00 to 1.00 but is less than 4.00 to 1.00 as of the last day of any fiscal quarter and (y) at the pricing level applicable
if the leverage ratio equals or exceeds 4.00 to 1.00 but is less than 4.50 to 1.00 as of the last day of any fiscal quarter;
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(iii)
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add an additional pricing level to the Applicable Rate if the leverage ratio equals or exceeds 4.50 to 1.00 as of the last
day of any fiscal quarter;
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(iv)
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increase the interest rate floor for various rates, including the LIBO Rate, to 0.75% and increase the rate floor for the Alternate
Base Rate to 1.75%;
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(v)
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refresh capacity for addbacks to Consolidated EBITDA (as defined in the Credit Agreement), capped at 10% of Consolidated EBITDA
for unusual or non-recurring expenses, charges or losses with only new such items counting against the cap beginning with the fiscal
quarter ending June 30, 2020;
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(vi)
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increase to $175 million the cash netting amount allowable when calculating the leverage ratio;
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(vii)
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add as a condition to each borrowing under the Revolver that the amount of cash or cash equivalents on the Company’s
balance sheet not exceed $350 million, subject to certain exceptions; and
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(viii)
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impose certain restrictions on the Company’s ability to make restricted payments and grant liens on the Company’s
assets until January 1, 2022.
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The foregoing description of the Fourth Amendment is a general
description and is qualified in its entirety by reference to the Fourth Amendment filed as Exhibit 10.1 hereto.
Amendment No. 7 to Private Shelf Agreement
On May 19, 2020, the Company and the subsidiary guarantors party
thereto entered into Amendment No. 7 (the “Shelf Amendment”) to the Private Shelf Agreement, dated as of December 6,
2012 (as amended from time to time, the “Shelf Agreement”), among the Company, the subsidiary guarantors party thereto,
PGIM, Inc. (f/k/a Prudential Investment Management, Inc.), and each Prudential Affiliate (as defined therein) bound thereby. The
Shelf Amendment, among other things, aligns the maximum permitted leverage ratio covenant, EBITDA addback cap, cash netting, and
restricted payment covenant and lien covenant in the Shelf Agreement to the corresponding provisions in the Credit Agreement. The
Shelf Amendment also:
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(i)
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adds a covenant relief period fee equal to 0.25% per annum on average daily principal balance from the effective date of the
Shelf Amendment through January 1, 2022; and
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(ii)
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imposes in the Shelf Agreement a similar restriction on Credit Agreement borrowings as is in the Credit Agreement.
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The foregoing description of the Shelf Amendment is a general
description and is qualified in its entirety by reference to the Shelf Amendment filed as Exhibit 10.2 hereto.
Third Amendment to L/G Facility Agreement
On May 19, 2020, the Company and certain of its
subsidiaries entered into the Third Amendment Agreement (the “L/G Amendment”) to the Syndicated Letter of
Guarantee Facility Agreement, dated March 8, 2018 (as amended from time to time, the “L/G Facility Agreement”),
among the Company, certain of its subsidiaries party thereto, the lenders party thereto, and Commerzbank Finance &
Covered Bond S.A., acting as agent. The L/G Amendment, among other things, aligns the maximum permitted leverage ratio
covenant, EBITDA addback cap, cash netting, and restricted payment covenant and lien covenant in the L/G Facility Agreement
to the corresponding provisions in the Credit Agreement. The L/G Amendment also adjusts the leverage-ratio based L/G Fee
Rate (as defined in the L/G Facility Agreement), by:
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(i)
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increasing the L/G Fee Rate (x) at the pricing level applicable if the leverage ratio equals or exceeds 3.50 to 1.00 but is
less than 4.00 to 1.00 as of the last day of any fiscal quarter and (y) at the pricing level applicable if the leverage ratio equals
or exceeds 4.00 to 1.00 but is less than 4.50 to 1.00 as of the last day of any fiscal quarter and
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(ii)
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adding an additional pricing level to the L/G Fee Rate if the leverage ratio equals or exceeds 4.50 to 1.00 as of the last
day of any fiscal quarter.
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The foregoing description of the L/G Amendment is a general
description and is qualified in its entirety by reference to the L/G Amendment filed as Exhibit 10.3 hereto.