Exhibit 10.1

AMENDMENT NO. 3

AMENDMENT NO. 3 (this “Amendment”) dated as of February 28, 2011 to the Second
Amended and Restated Credit Agreement dated as of July 18, 2007 (as amended
through the date hereof, the “Credit Agreement”) among KINDRED HEALTHCARE, INC.,
a Delaware corporation (the “Borrower”), the LENDERS party thereto, and JPMORGAN
CHASE BANK, N.A., as Administrative Agent and Collateral Agent.

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. Amendments to Section 1.01.

 

  A. The following defined terms shall be added to Section 1.01 of the Credit
Agreement:

“Additional Escrow Amount” means an amount equal to (a) all interest that could
accrue on the Proposed Notes from and including the date of issuance thereof to
and including the Deadline, together with the amount of any original issue
discount on the Proposed Notes, and (b) all fees and expenses that are incurred
in connection with the issuance of the Proposed Notes and all fees, expenses or
other amounts payable in connection with the Proposed Notes Redemption.

“Deadline” means the earlier of (x) September 30, 2011 or such later date to
which the commitments of the “Commitment Parties” under the Commitment Letter
dated as of February 7, 2011 among Borrower, JPMorgan Chase Bank, N.A., J.P.
Morgan Securities LLC, Morgan Stanley Senior Funding, Inc. and Citigroup Global
Markets Inc. may have been extended and (y) three Business Days after the date
that Borrower shall have notified the Escrow Agent that the Rehab Merger
Agreement has been terminated or the Rehab Merger has been abandoned.

“Escrow Account” means a deposit or securities account at a financial
institution reasonably satisfactory to the Administrative Agent (such
institution, the “Escrow Agent”) into which the Escrowed Funds are deposited.

“Escrow Agent” is defined in the definition of the term Escrow Account.

“Escrow Subsidiary” means a Subsidiary of Borrower that (a) shall be formed
following the Third Amendment Effective Date, (b) at no time shall contain any
assets or liabilities other than the Proposed Notes, the Escrowed Funds, the
Escrow Account and such Subsidiary’s rights and obligations under the Proposed
Notes Documents and (c) shall be an Unrestricted Subsidiary for all purposes of
the Financing Documents (it being understood that the Escrow Subsidiary shall,
notwithstanding anything to the contrary contained in any Financing Document, in
no event be designated a Restricted Subsidiary). The Borrower shall notify the
Administrative Agent promptly following the formation of the Escrow Subsidiary.

“Escrowed Funds” means the sum of (a) the net proceeds of the Proposed Notes,
plus (b) the Additional Escrow Amount, plus (c) so long as they are retained in
the Escrow Account, any income, proceeds or products of the foregoing.

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“Merger Subsidiary” means Kindred Healthcare Development, Inc., a Delaware
corporation and wholly owned Subsidiary of Borrower.

“Proposed Notes” means debt securities issued after the Third Amendment
Effective Date of Escrow Subsidiary (which may not be guaranteed or receive
credit support from any Person other than Escrow Subsidiary); provided that the
net proceeds of such debt securities are deposited into the Escrow Account upon
the issuance thereof.

“Proposed Notes Indenture” means the indenture pursuant to which the Proposed
Notes shall be issued.

“Proposed Notes Escrow Documents” means the agreement(s) governing the Escrow
Account and any other documents entered into in order to provide the Escrow
Agent (or its designee) a Lien on the Escrowed Funds.

“Proposed Notes Documents” mean the Proposed Notes Indenture, the Proposed Notes
Escrow Documents and any other documents entered into by Escrow Subsidiary in
connection with the Proposed Notes; provided that such documents shall require
that (a) if the Rehab Merger shall not be consummated on or before the Deadline,
the Proposed Notes shall be redeemed in full (the “Proposed Notes Redemption”)
no later than the Deadline and (b) the Escrowed Funds shall be released from the
Escrow Account on or before the Deadline (A) upon the consummation of the Rehab
Merger and applied to pay part of the consideration or the contemplated
repayment of indebtedness of the Borrower or Rehab for the Rehab Merger and, at
the option of the Borrower, any fees and expenses in connection therewith or
(B) to effectuate the Proposed Notes Redemption.

“Proposed Notes Redemption” is defined in the definition of the term Proposed
Notes Documents.

“Rehab” means RehabCare Group, Inc., a Delaware corporation.

“Rehab Merger” means the merger of Rehab with and into Borrower or Merger
Subsidiary with and into Rehab, in each case pursuant to the Rehab Merger
Agreement.

“Rehab Merger Agreement” means that certain agreement and plan of merger by and
among Borrower, Rehab and Merger Subsidiary, dated as of February 7, 2011.

“Third Amendment Effective Date” has the meaning assigned to such term in
Amendment No. 3 to this Agreement.

 

  B. The following terms in Section 1.01 of the Credit Agreement shall be
amended as follows:

The following proviso shall be added to the definition of “Collateral”:

“; provided that the Collateral shall not include the Escrowed Funds, the Escrow
Account or any of the Proposed Notes Documents”.

The following proviso shall be added to the definition of “Collateral
Documents”:

“; provided that the Collateral Documents shall not include the Escrow Account
or any Proposed Notes Escrow Document”.

 

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The following proviso shall be added to the first sentence of the definition of
“Material Indebtedness”:

“; provided that the Material Indebtedness shall not include any Indebtedness
arising under the Proposed Notes Documents”.

Section 3. Section 1.05. A new Section 1.05 shall be added to the Credit
Agreement which shall state:

“Section 1.05. Proposed Notes. Notwithstanding anything to the contrary in any
Financing Document, nothing contained in any Financing Document shall prevent
(a) the formation and designation of Escrow Subsidiary as an Unrestricted
Subsidiary and any Investment in Escrow Subsidiary in an amount not greater than
the Additional Escrow Amount, (b) the incurrence of any Indebtedness evidenced
by any Proposed Note Document, (c) the granting or existence of any Liens on the
Escrow Account, the Escrowed Funds or any Proposed Note Document or pursuant to
any Proposed Notes Escrow Document, in each case, in favor of the Escrow Agent
(or its designee), (d) any transactions by and among the Borrower or one or more
Restricted Subsidiaries, on the one hand, and the Escrow Subsidiary, on the
other hand, in connection with the transactions contemplated by the Proposed
Notes Documents, in each case to the extent Borrower reasonably deems such
transactions necessary to effectuate the transactions contemplated by the
Proposed Notes Documents, (e) the holding of the Escrowed Funds in the Escrow
Account or (f) any other transaction contemplated by the Proposed Notes
Documents (it being understood, for the avoidance of doubt, that any such
Investments, incurrences of Indebtedness and other transactions shall be deemed
made exclusively in reliance upon this Section 1.05 and not any other exception
or basket under any other provision of any Financing Document); provided that
this Section 1.05 shall not operate to permit the RehabCare Merger to the extent
it would not otherwise be permitted absent this Section 1.05. The Lenders, the
L/C Issuers and their respective Affiliates hereby agree that none of the
Administrative Agent, the Collateral Agent or any Affiliate thereof shall have
any liability or obligation to the Lenders, in their capacities as such, with
respect to any transactions contemplated by the Proposed Notes Documents.”

Section 4. Section 5.06. A new Section 5.06(g) shall be added to the Credit
Agreement which shall state:

“(g) Notwithstanding anything to the contrary in this Section 5.06, (i) the
Borrower may designate the Escrow Subsidiary as an Unrestricted Subsidiary and
(ii) the Escrow Subsidiary shall be excluded from any calculations made, or any
conditions specified, in paragraph (a).

Section 5. Representations Correct; No Default. The Borrower represents and
warrants that (x) 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 Third Amendment Effective Date as though made on and as of such
date; provided that those representations and warranties that speak only of a
specific date shall only speak as of such date, (y) this Amendment constitutes,
and the Credit Agreement as modified hereby constitutes, a legal, valid and
binding obligation of each Credit Party that is a party hereto or thereto,
enforceable against each such Credit Party in accordance with its terms, except
as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors’ rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law) and (z) no Default has
occurred and is continuing on the date hereof and no Default will occur or be
continuing on the Third Amendment Effective Date.

 

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Section 6. Counterparts. 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.

Section 7. Effectiveness. This Amendment shall become effective as of the date
hereof (the “Third Amendment Effective Date”), subject to the satisfaction of
the following conditions: (a) the Administrative Agent shall have received duly
executed counterparts hereof signed by 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) and (b) the representations and warranties in Section 5 hereof
shall be true and correct (and the Administrative Agent shall have received an
executed certificate from a Financial Officer of Borrower to the effect that the
condition in this clause (b) shall be satisfied as of the Third Amendment
Effective Date).

Section 8. Limited Effect. 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 9. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW 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, INC., as Borrower By:  

/s/ Donald H. Robinson

  Name:    Donald H. Robinson   Title:    Senior Vice President, Tax & Treasurer

[SIGNATURE PAGE TO AMENDMENT NO. 3]

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JPMORGAN CHASE BANK, N.A., as Administrative Agent, Collateral Agent and as a
Lender

By:  

/s/ Dawn LeeLum

  Name:    Dawn LeeLum   Title:    Executive Director

 

[SIGNATURE PAGE TO AMENDMENT NO. 3]

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Citibank, N.A. By:  

/s/ Michael Vondriska

  Name:    Michael Vondriska   Title:    Vice President

 

[SIGNATURE PAGE TO AMENDMENT NO. 3]

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Morgan Stanley Bank, N.A. By:  

/s/ Alain Pelanne

  Name:    Alain Pelanne   Title:    Authorized Signatory

 

[SIGNATURE PAGE TO AMENDMENT NO. 3]

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General Electric Capital Corporation By:  

/s/ Jonathan Ruschhaupt

  Name:    Jonathan Ruschhaupt   Title:    Duly Authorized Signatory

 

[SIGNATURE PAGE TO AMENDMENT NO. 3]

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CIT Healthcare LLC By:  

/s/ Jerrold Clinton

  Name:    Jerrold Clinton   Title:    Vice President

 

[SIGNATURE PAGE TO AMENDMENT NO. 3]

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Wells Fargo Capital Finance Inc. (fka Wells Fargo Foothill, Inc.)

By:  

/s/ Eul Kim

  Name:    Eul Kim   Title:    Vice President

 

[SIGNATURE PAGE TO AMENDMENT NO. 3]

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PNC Bank, National Association By:  

/s/ Patricia S. Robertson

  Name:    Patricia S. Robertson   Title:    Senior Vice President

 

[SIGNATURE PAGE TO AMENDMENT NO. 3]

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Fifth Third Bank By:  

/s/ Barbara S. Tully

  Name:    Barbara S. Tully   Title:    Vice President

 

[SIGNATURE PAGE TO AMENDMENT NO. 3]

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U.S. Bank N.A By:  

/s/ Joseph C. Hensley

  Name:    Joseph C. Hensley   Title:    Vice President

 

[SIGNATURE PAGE TO AMENDMENT NO. 3]

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Branch Banking and Trust Co., Inc. By:  

/s/ Greg R. Branstetter

  Name:    Greg R. Branstetter   Title:    Senior Vice President

 

[SIGNATURE PAGE TO AMENDMENT NO. 3]

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Allied Irish Banks, P.L.C. By:  

/s/ Martin Chin

  Name:    Martin Chin   Title:    Senior Vice President If a second signature
is required: By:  

/s/ Brent Phillips

  Name:    Brent Phillips   Title:    Vice President

 

[SIGNATURE PAGE TO AMENDMENT NO. 3]

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Capital One Leverage Finance Corp. By:  

/s/ Thomas F. Furst

  Name:    Thomas F. Furst   Title:    Vice President

 

[SIGNATURE PAGE TO AMENDMENT NO. 3]