Exhibit 99.1
AMENDMENT ▇▇. ▇
▇▇▇▇▇▇▇▇▇ ▇▇. ▇ (this "Amendment") dated as of March 7, 2003, 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, the SWINGLINE BANK and the LC
ISSUING BANKS party thereto, JPMORGAN CHASE BANK (formerly The Chase Manhattan
Bank, successor-by-merger to ▇▇▇▇▇▇ 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 this Amendment becomes effective,
refer to the Credit Agreement as amended hereby.
Section 2. Information. Section 5.01(n) of the Credit Agreement is amended
by deleting the phrase "within 15 days after the commencement of each Fiscal
Year" and replacing in substitution therefor the phrase "as soon as available
and in any event no later than February 28th of each Fiscal Year".
Section 3. 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:
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Period Ratio
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June 30, 2001 through December 31, 2001 1.14 to 1
--------------------------------------------------------------------------------
March 31, 2002 through March 31, 2003 1.25 to 1
--------------------------------------------------------------------------------
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June 30, 2003 through December 31, 2003 1.10 to 1
--------------------------------------------------------------------------------
March 31, 2004 and June 30, 2004 1.15 to 1
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September 30, 2004 1.20 to 1
--------------------------------------------------------------------------------
December 31, 2004 1.25 to 1
--------------------------------------------------------------------------------
March 31, 2005 and thereafter 1.35 to 1
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Section 4. 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:
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Period Ratio
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June 30, 2001 through December 31, 2001 6.60 to 1
--------------------------------------------------------------------------------
January 1, 2002 through September 30, 2002 6.40 to 1
--------------------------------------------------------------------------------
October 1, 2002 through December 31, 2002 6.25 to 1
--------------------------------------------------------------------------------
January 1, 2003 through March 31, 2003 6.60 to 1
--------------------------------------------------------------------------------
April 1, 2003 through December 31, 2003 7.25 to 1
--------------------------------------------------------------------------------
January 1, 2004 through March 31, 2004 7.10 to 1
--------------------------------------------------------------------------------
April 1, 2004 through June 30, 2004 6.90 to 1
--------------------------------------------------------------------------------
July 1, 2004 through September 30, 2004 6.50 to 1
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October 1, 2004 through December 31, 2004 6.10 to 1
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January 1, 2005 through December 31, 2005 5.90 to 1
--------------------------------------------------------------------------------
January 1, 2006 and thereafter 5.75 to 1
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Section 5. Minimum EBITDAR. Schedule 12 attached hereto is substituted for
Schedule 12 to the Credit Agreement.
Section 6. Minimum Consolidated Net Worth. The table appearing in Section
6.04 of the Credit Agreement is amended and restated in its entirety to read as
follows:
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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 $522,200,000
--------------------------------------------------------------------------------
June 30, 2003 $520,100,000
--------------------------------------------------------------------------------
September 30, 2003 $509,800,000
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December 31, 2003 $505,100,000
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March 31, 2004 $506,700,000
--------------------------------------------------------------------------------
June 30, 2004 $512,300,000
--------------------------------------------------------------------------------
September 30, 2004 $519,000,000
--------------------------------------------------------------------------------
December 31, 2004 $536,700,000
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March 31, 2005 $551,800,000
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June 30, 2005 $567,800,000
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September 30, 2005 $582,800,000
--------------------------------------------------------------------------------
December 31, 2005 $601,000,000
--------------------------------------------------------------------------------
March 31, 2006 $616,800,000
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Section 7. Capital Expenditures. Schedule 13 attached hereto is substituted
for Schedule 13 to the Credit Agreement.
Section 8. Restricted Payments. (a) Section 7.07(a)(ii) of the Credit
Agreement is amended and restated in its entirety to read as follow:
"the Borrower may declare or make Restricted Payments to Vencor for
the purchase, redemption or
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other acquisition or retirement for value of Equity Interests of
Vencor held by (A) officers, directors or employees or former
officers, directors or employees (or their estates or beneficiaries
under their estates), upon death, disability, retirement, severance or
termination of employment or (B) Ventas, to the extent required to
satisfy the requirements of Article XII of Vencor's Amended and
Restated Certificate of Incorporation; provided that the aggregate
amount paid to Vencor pursuant to this clause (ii) does not exceed an
aggregate amount of $500,000;"
(b) Section 7.07(b) of the Credit Agreement is amended and restated in its
entirety to read as follow:
"Vencor shall not, directly or indirectly, use the proceeds of any
Restricted Payment to (i) declare or pay any dividend or other
distribution on any Equity Securities of Vencor (except dividends
payable solely in Equity Securities of the same class) or (ii)
purchase, redeem, retire or otherwise acquire any Equity Securities of
Vencor except as permitted by Section 7.07(a)(ii)."
Section 9. Limitations on Acquisitions and Investments. Section 7.08(b)(ii)
of the Credit Agreement is amended by replacing the reference to "$130,000,000"
with a reference to "$50,000,000".
Section 10. Acknowledgment. The Borrower, Kindred and the Required Lenders
hereby agree that Restricted Payments in an aggregate amount not exceeding
$1,050,000 made by the Borrower to Kindred pursuant to Section 7.07(a)(ii) of
the Credit Agreement prior to the date hereof for the purchase, redemption or
other acquisition or retirement for value of Equity Interests of Kindred shall
be deemed not to constitute a failure to observe Section 7.07 of the Credit
Agreement.
Section 11. 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 (as
defined below) as though made on and as of such date and (ii) no Default has
4
occurred and is continuing on the date hereof and no Default will occur or be
continuing on the Amendment Effective Date.
Section 12. 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 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 facsimile or other written confirmation from such party of execution of
a counterpart hereof by such Lender).
(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 2:00 P.M. (New York City time)
on the later of (i) March 19, 2003 and (ii) the date the Administrative Agent
issues a notice to the Lenders saying this Amendment has become effective (such
later date, the "Fee Determination Date"), an amendment fee in an amount equal
to 0.50% of such Lender's Commitment (as in effect on the opening of business on
the date of this Amendment).
(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 13. 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/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Senior Vice President,
Chief Financial Officer
and Treasurer
KINDRED HEALTHCARE, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Senior Vice President,
Chief Financial Officer
and Treasurer
LENDERS
JPMORGAN CHASE BANK, as Administrative
Agent and as Lender
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇, III
----------------------------------
Name:
Title:
GENERAL ELECTRIC CAPITAL CORPORATION
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
▇▇▇▇▇▇▇ SACHS CREDIT PARTNERS, L.P.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Authorized Signatory
CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ Philippe Soustra
----------------------------------
Name: Philippe Soustra
Title: Executive Vice President
FOOTHILL INCOME TRUST II, L.P.
By: FIT 2 GP LLC, its General Partner
By: /s/ M.E. ▇▇▇▇▇▇▇
----------------------------------
Name: M.E. ▇▇▇▇▇▇▇
Title: Managing Member
SCHEDULE 12
MINIMUM CONSOLIDATED EBITDAR
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Quarterly Measurement Date Amount
--------------------------------------------------------------------------------
June 30, 2001 $383,000,000
--------------------------------------------------------------------------------
September 30, 2001 $382,000,000
--------------------------------------------------------------------------------
December 31, 2001 $384,000,000
--------------------------------------------------------------------------------
March 31, 2002 $386,000,000
--------------------------------------------------------------------------------
June 30, 2002 $389,000,000
--------------------------------------------------------------------------------
September 30, 2002 $391,000,000
--------------------------------------------------------------------------------
December 31, 2002 $393,000,000
--------------------------------------------------------------------------------
March 31, 2003 $356,700,000
--------------------------------------------------------------------------------
June 30, 2003 $320,100,000
--------------------------------------------------------------------------------
September 30, 2003 $327,600,000
--------------------------------------------------------------------------------
December 31, 2003 $322,300,000
--------------------------------------------------------------------------------
March 31, 2004 $330,700,000
--------------------------------------------------------------------------------
June 30, 2004 $341,600,000
--------------------------------------------------------------------------------
September 30, 2004 $360,500,000
--------------------------------------------------------------------------------
December 31, 2004 $392,500,000
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March 31, 2005 $436,000,000
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June 30, 2005 $442,000,000
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September 30, 2005 $447,000,000
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December 31, 2005 $453,000,000
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March 31, 2006 $459,000,000
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SCHEDULE 13
MAXIMUM CUMULATIVE CAPITAL EXPENDITURE
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Period Amount
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January 1, 2001 through June 30, 2001 $47,000,000
--------------------------------------------------------------------------------
January 1, 2001 through September 30, 2001 $68,000,000
--------------------------------------------------------------------------------
January 1, 2001 through December 31, 2001 $75,000,000
--------------------------------------------------------------------------------
January 1, 2002 through March 31, 2002 $30,000,000
--------------------------------------------------------------------------------
January 1, 2002 through June 30, 2002 $47,000,000
--------------------------------------------------------------------------------
January 1, 2002 through September 30, 2002 $68,000,000
--------------------------------------------------------------------------------
January 1, 2002 through December 31, 2002 $75,000,000
--------------------------------------------------------------------------------
January 1, 2003 through March 31, 2003 $30,000,000
--------------------------------------------------------------------------------
January 1, 2003 through June 30, 2003 $50,000,000
--------------------------------------------------------------------------------
January 1, 2003 through September 30, 2003 $72,000,000
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January 1, 2003 through December 31, 2003 $80,000,000
--------------------------------------------------------------------------------
January 1, 2004 through March 31, 2004 $30,000,000
--------------------------------------------------------------------------------
January 1, 2004 through June 30, 2004 $50,000,000
--------------------------------------------------------------------------------
January 1, 2004 through September 30, 2004 $72,000,000
--------------------------------------------------------------------------------
January 1, 2004 through December 31, 2004 $80,000,000
--------------------------------------------------------------------------------
January 1, 2005 through March 31, 2005 $35,000,000
--------------------------------------------------------------------------------
January 1, 2005 through June 30, 2005 $53,000,000
--------------------------------------------------------------------------------
January 1, 2005 through September 30, 2005 $77,000,000
--------------------------------------------------------------------------------
January 1, 2005 through December 31, 2005 $85,000,000
--------------------------------------------------------------------------------
January 1, 2006 through the Revolving Credit Termination Date $35,000,000
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