Exhibit 10.1
CONSENT NO. 3 AND
WAIVER
CONSENT NO. 3 AND WAIVER (this
“ Consent ”) dated as of January 19, 2007,
pursuant to the $400,000,000 Amended and Restated Credit Agreement
dated as of June 28, 2004 (as heretofore amended, the “
Credit Agreement ”) among KINDRED HEALTHCARE, INC.
(the “ Borrower ”), the LENDERS party thereto,
and JPMORGAN CHASE BANK, N.A. (formerly known as JPMorgan Chase
Bank), as Administrative Agent and Collateral Agent.
W I T N E S S E T
H:
WHEREAS, the Borrower has informed
the Agent and the Lenders that (a) each of Bayberry Care
Center, L.L.C., Care Center of Rossmoor, L.L.C., Pacific Coast Care
Center, L.L.C., Siena Care Center, L.L.C. and Smith Ranch Care
Center, L.L.C. (each, a “ Transaction Subsidiary
”) proposes to lease (each such lease, a “ Proposed
Lease ”) a Healthcare Facility from Ocadian Care Centers,
LLC (“ Ocadian ”) (each such Healthcare
Facility, an “ Ocadian Facility ”),
(b) each Ocadian Facility is subject to a mortgage guaranteed
by the Department of Housing and Urban Development (“
HUD ”) and (c) HUD is willing to consent to each
Proposed Lease only if the Lenders agree not to require any
Leasehold Mortgage with respect to such Proposed Lease and further
agree to release any Accounts of any Transaction Subsidiary
relating to operations at the applicable Ocadian Facility or
services rendered by a Transaction Subsidiary at the applicable
Ocadian Facility (the “ Transaction Accounts ”)
from the Security Interests of the Security Agreement;
NOW, THEREFORE, the parties hereto
agree as follows:
SECTION 1 . Defined
Terms. 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.
SECTION 2 . Future Assets To
Be Added To Collateral; Limited Release of Liens. (a) The
Agent and the Required Lenders hereby (but subject to the
provisions of clauses (b) and (c)) (i) waive compliance
by the Borrower with the provisions of Section 5.09(c) of the
Credit Agreement to the extent (but solely to the extent) that such
provisions apply to any Ocadian Facility leased by any Transaction
Subsidiary and (ii) agree that, contemporaneously with such
Transaction Subsidiary entering into a Proposed Lease of such
Ocadian Facility, the Transaction Accounts of such Transaction
Subsidiary (but no other assets) shall be automatically released
from the Security Interests of the Security Agreement. For the
avoidance of doubt, while the foregoing waiver and consent are in
effect, the Transaction Accounts shall not be included in the
calculation of the Borrowing Base.
(b) The waiver and agreement set
forth in clause (a) shall each automatically terminate with
respect to an Ocadian Facility contemporaneously with such Ocadian
Facility no longer being subject to any mortgage guaranteed by HUD
(or, if earlier, upon HUD no longer restricting the ability of the
applicable Transaction Subsidiary to grant a Leasehold Mortgage
with respect its leasehold interest in such Ocadian Facility and a
Lien with respect to the Transaction Accounts in favor or the
Agent). While the waiver
and agreement set forth in clause (a) are
in effect, the Borrower shall, and shall cause each Transaction
Subsidiary to, ensure that no Lien over the leasehold interest of
any such Transaction Subsidiary in any Ocadian Facility or over any
Transactions Accounts is granted to any other Person (other than
the Agent).
(c) From and after the termination
of the waiver and agreement set forth in clause (a) as
contemplated by clause (b) with respect to any Ocadian
Facility (i) the provisions of Section 5.09(c) of the
Credit Agreement shall apply to the leasehold interest of the
applicable Transaction Subsidiary in such Ocadian Facility and, if
such lease is of a Material Real
