EX-10.1



 EXHIBIT 10.1 

EXECUTION VERSION 
  

 
  

SEPARATION AGREEMENT 

by and among 
 KINDRED
HEALTHCARE, INC., 
 KENTUCKY HOMECARE HOLDINGS, INC., 

KENTUCKY HOSPITAL HOLDINGS, LLC, 

and 
 KENTUCKY HOSPITAL
MERGER SUB, INC. 
 Dated as of December 19, 2017 
  

 
  







 Table of Contents 

 

							
	 	 	 	  	Page	 
	
	ARTICLE I	 
	
	SEPARATION TRANSACTIONS	 
			
	 Section 1.01
	 	 KNCLP Contribution
	  	 	2	 
	 Section 1.02
	 	 KNCE Merger
	  	 	2	 
	 Section 1.03
	 	 Conversion to Limited Liability Company
	  	 	2	 
	 Section 1.04
	 	 Transfer of Transferred Homecare Companies and Transferred Homecare Assets
	  	 	2	 
	 Section 1.05
	 	 Distributions of Gentiva
	  	 	3	 
	 Section 1.06
	 	 Hospital Merger
	  	 	3	 
	 Section 1.07
	 	 Effects of the Hospital Merger
	  	 	4	 
	 Section 1.08
	 	 Company LLC Agreement
	  	 	4	 
	 Section 1.09
	 	 Directors and Officers
	  	 	5	 
	 Section 1.10
	 	 No Assignment
	  	 	5	 
	
	ARTICLE II	 
	
	COVENANTS	 
			
	 Section 2.01
	 	 Transition Matters
	  	 	6	 
	 Section 2.02
	 	 Shared Contracts
	  	 	9	 
	 Section 2.03
	 	 Replacement of Guarantees and Credit Support
	  	 	10	 
	 Section 2.04
	 	 Further Assurances; Post-Closing Transfers
	  	 	12	 
	 Section 2.05
	 	 Use of Names; Cross License
	  	 	14	 
	 Section 2.06
	 	 Insurance
	  	 	15	 
	 Section 2.07
	 	 Representation and Warranty Insurance
	  	 	17	 
	 Section 2.08
	 	 Loss Portfolio Transfer
	  	 	18	 
	 Section 2.09
	 	 Settlement of Intercompany Accounts
	  	 	18	 
	 Section 2.10
	 	 Post-Closing Access to Information; Retention of Records; Confidentiality
	  	 	19	 
	 Section 2.11
	 	 Litigation Cooperation
	  	 	20	 
	 Section 2.12
	 	 Merger Consideration Savings Amount
	  	 	20	 
	 Section 2.13
	 	 Pre-Closing Restructuring Actions
	  	 	20	 


  
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 Table of Contents 

(continued) 
  

							
	 	 	 	  	Page	 
	
	ARTICLE III	 
	
	EMPLOYEE BENEFITS; LABOR MATTERS	 
			
	 Section 3.01
	 	 Employee Transfers
	  	 	21	 
	 Section 3.02
	 	 Transfer of Homecare Benefit Plans
	  	 	22	 
	 Section 3.03
	 	 Treatment of Legacy Short-Term and Long-Term Cash Compensation Awards
	  	 	22	 
	 Section 3.04
	 	 Section 7.07 of Merger Agreement
	  	 	22	 
	
	ARTICLE IV	 
	
	CONDITIONS PRECEDENT	 
			
	 Section 4.01
	 	 Conditions to Each Party’s Obligation to Effect the Separation Transactions
	  	 	22	 
	 Section 4.02
	 	 Conditions to Obligations of Each of HospitalCo Parent and Hospital Merger Sub
	  	 	22	 
	
	ARTICLE V	 
	TERMINATION, AMENDMENT AND WAIVER	 
	 Section 5.01
	 	 Termination by Mutual Consent
	  	 	23	 
	 Section 5.02
	 	 Termination By Parent, Hospital Merger Sub or the Company
	  	 	23	 
	 Section 5.03
	 	 Termination by Hospital Merger Sub or Parent
	  	 	23	 
	 Section 5.04
	 	 Effect of Termination
	  	 	23	 
	 Section 5.05
	 	 Amendment
	  	 	24	 
	 Section 5.06
	 	 Expenses
	  	 	24	 
	
	ARTICLE VI	 
	
	INDEMNIFICATION	 
			
	 Section 6.01
	 	 Survival
	  	 	24	 
	 Section 6.02
	 	 Indemnification
	  	 	25	 
	 Section 6.03
	 	 Indemnification Procedures
	  	 	26	 
	 Section 6.04
	 	 Limitations on Indemnification
	  	 	28	 
	
	ARTICLE VII	 
	
	TAX MATTERS	 
			
	 Section 7.01
	 	 Tax Returns
	  	 	28	 


  
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 Table of Contents 

(continued) 
  

 

							
	 	 	 	  	Page	 
	 Section 7.02
	 	 Tax Contests
	  	 	29	 
	 Section 7.03
	 	 Cooperation and Exchange of Information
	  	 	30	 
	 Section 7.04
	 	 Tax Sharing Agreements
	  	 	30	 
	 Section 7.05
	 	 Payments, Refunds, Credits and Carrybacks
	  	 	31	 
	 Section 7.06
	 	 Transfer Taxes
	  	 	31	 
	 Section 7.07
	 	 Purchase Price Allocation
	  	 	31	 
	 Section 7.08
	 	 Agreed Tax Treatment of the Hospital Merger
	  	 	32	 
	 Section 7.09
	 	 Tax Matters Coordination and Survival
	  	 	32	 
	 Section 7.10
	 	 FIRPTA Certificate
	  	 	32	 
	
	ARTICLE VIII	 
	
	GENERAL PROVISIONS	 
	 Section 8.01
	 	 Governing Law
	  	 	32	 
	 Section 8.02
	 	 Submission to Jurisdiction
	  	 	32	 
	 Section 8.03
	 	 Waiver of Jury Trial
	  	 	33	 
	 Section 8.04
	 	 Notices
	  	 	33	 
	 Section 8.05
	 	 Entire Agreement
	  	 	36	 
	 Section 8.06
	 	 No Third Party Beneficiaries
	  	 	37	 
	 Section 8.07
	 	 Severability
	  	 	37	 
	 Section 8.08
	 	 Assignment; Binding Effect
	  	 	37	 
	 Section 8.09
	 	 Remedies
	  	 	37	 
	 Section 8.10
	 	 Specific Performance
	  	 	38	 
	 Section 8.11
	 	 Reliance on Counsel and Other Advisors
	  	 	38	 
	 Section 8.12
	 	 Counterparts; Effectiveness
	  	 	38	 
	 Section 8.13
	 	 Interpretation
	  	 	39	 
	 Section 8.14
	 	 Definitions
	  	 	39	 

 List of Schedules and Exhibits 
  

					
	 Schedule 1.04(a)(i)
	 	 Transferred Homecare Assets and Transferred Homecare Companies
	  	
	 Schedule 1.04(a)(ii)
	 	 Assumed Homecare Liabilities
	  	
	 Schedule 2.05(a)
	 	 Hospital Trademarks
	  	
	 Schedule 2.05(b)(i)
	 	 Homecare IP
	  	
	 Schedule 2.05(b)(ii)
	 	 Hospital IP
	  	
	 Schedule 2.09
	 	 Intercompany Accounts
	  	


  
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 SEPARATION AGREEMENT 

This SEPARATION AGREEMENT (this “Agreement”), dated as of December 19, 2017, is by and among Kindred Healthcare, Inc., a
Delaware corporation (together with its successors-in-interest, the “Company”), Kentucky Homecare Holdings, Inc., a Delaware corporation
(“Parent”), Kentucky Hospital Holdings, LLC, a Delaware limited liability company (“HospitalCo Parent”), and Kentucky Hospital Merger Sub, Inc., a Delaware corporation (“Hospital Merger Sub”). Each
of the Company, Parent, HospitalCo Parent and Hospital Merger Sub is referred to herein as a “Party” and, collectively, as the “Parties” and each of Parent, HospitalCo Parent and Hospital Merger Sub is sometimes
referred to herein as a “Consortium Party” and, collectively, as the “Consortium Parties”. 
 RECITALS

 WHEREAS, concurrently with the execution of this Agreement, the Company is entering into an Agreement and Plan of Merger (the
“Merger Agreement”), dated as of the date hereof, by and among Parent, HospitalCo Parent, Kentucky Homecare Merger Sub, Inc. (“Merger Sub”) and the Company, pursuant to which, at the Closing (as defined in the
Merger Agreement) (the “Take-Private Closing”) and in accordance with the Delaware General Corporation Law (the “DGCL”), Merger Sub shall merge with and into the Company, with the Company continuing its corporate
existence under the DGCL as the surviving corporation in such merger (the “Take-Private Merger”); 
 WHEREAS, upon the
terms and subject to the conditions set forth in this Agreement, immediately following the Take-Private Closing, the Company shall consummate the Separation Transactions (as defined herein), including merging with Hospital Merger Sub, with the
Company continuing as the surviving limited liability company following such merger, in accordance with the Delaware Limited Liability Company Act (the “LLC Act”); and 

WHEREAS, the effectiveness of the Separation Transactions shall be conditioned upon the consummation of the Take-Private Closing. 

NOW, THEREFORE, in consideration of the foregoing Recitals and the representations, warranties, covenants and agreements set forth in this
Agreement, and intending to be legally bound by this Agreement, the Parties agree as follows: 







 ARTICLE I 

SEPARATION TRANSACTIONS 

Section 1.01 KNCLP Contribution Subject to the terms and conditions of this Agreement, after satisfaction or, to the extent
permitted hereunder, waiver of all conditions to the Separation Transactions set forth in Article IV (other than those conditions that by their nature are to be satisfied at or immediately prior to the Hospital Merger Closing, but subject to
the satisfaction or waiver of such conditions at or immediately prior to the Hospital Merger Closing), unless this Agreement has been terminated pursuant to its terms or unless another time or date is agreed to in writing by the Parties, the Company
shall, immediately following the Take-Private Closing, cause KHLP to transfer and assign all of its equity interests in KNCLP to New LLC (the “KNCLP Contribution”). 

Section 1.02 KNCE Merger. Subject to the terms and conditions of this Agreement, following the KNCLP Contribution, the Company
shall cause KNCE to merge with and into New LP (the “KNCE Merger”), with New LP continuing as the surviving entity in such merger. 

Section 1.03 Conversion to Limited Liability Company. Subject to the terms and conditions of this Agreement, immediately following
the KNCE Merger, the Company shall convert into a limited liability company by causing a certificate of conversion to be executed, acknowledged and filed with the Secretary of State of the State of Delaware and taking all other actions required to
effect such conversions pursuant to the LLC Act (the “LLC Conversion”). 
 Section 1.04 Transfer of Transferred
Homecare Companies and Transferred Homecare Assets. 
 (a) Subject to the terms and conditions of this Agreement, immediately following
the completion of the LLC Conversion: 
 (i) the Company shall (and shall cause its Hospital Entities to) convey, assign,
transfer and deliver to Gentiva, and Gentiva shall (and the Company shall cause Gentiva to) acquire and accept from the Company and the Hospital Entities, all of the Company’s and the Hospital Entities’ right, title and interest to
(x) the Transferred Homecare Company Interests and the Transferred Homecare Company Agreements, and (y) the Transferred Homecare Assets, in each case subject to all Liens in place immediately prior to such conveyances, assignments,
transfers and deliveries (other than Liens that arose in the operation of the Retained Business); and 
 (ii) concurrently
with the actions described in Section 1.04(a)(i), the Company shall (and shall cause the Hospital Entities to) convey, assign and transfer to Gentiva, and Gentiva shall (and the Company shall cause Gentiva to) assume and agree to pay, perform
and discharge when due, all of the Assumed Homecare Liabilities (the transactions described in this Section 1.04(a), collectively, the “Homecare Transfers”). 

  
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 (b) At the closing of the Homecare Transfers: 

(i) the Company shall (and shall cause the Hospital Entities to) execute such instruments of sale and transfer or other
documents and take such other actions, in each case as are reasonably necessary to (x) convey, assign, transfer and deliver to Gentiva the Transferred Homecare Company Interests, Transferred Homecare Company Agreements and the Transferred
Homecare Assets or (y) assign and transfer the Assumed Homecare Liabilities to Gentiva; 
 (ii) Gentiva shall (and the
Company shall cause Gentiva to) execute and deliver such instruments of sale and transfer or other documents and take such other actions, in each case as are reasonably necessary to (x) acquire and accept from the Company or the applicable
Hospital Entities the Transferred Homecare Company Interests, Transferred Homecare Company Agreements and the Transferred Homecare Assets or (y) assume and agree to pay, perform and discharge when due the Assumed Homecare Liabilities. 

Section 1.05 Distributions of Gentiva. 

(a) Subject to the terms and conditions of this Agreement, immediately after the Homecare Transfers: 

(i) the Company shall cause Kentucky Healthcare Operating to distribute all of its right, title and interest in the Company
Interests of Gentiva to the Company; and 
 (ii) immediately thereafter, the Company shall distribute all of its right, title
and interest in the Company Interests of Gentiva to Homecare Intermediate (the distributions described in this Section 1.03(a), together, the “Gentiva Distributions”). 

(b) The Company shall, and shall cause Kentucky Healthcare Operating to, execute such documents and take such actions, in each case as are
reasonably necessary to effectuate the Gentiva Distributions. 
 Section 1.06 Hospital Merger. 

(a) Subject to the terms and conditions of this Agreement, immediately after the consummation of the Gentiva Distributions, Hospital Merger Sub
shall be merged with and into the Company in accordance with the LLC Act (the “Hospital Merger”, and the closing of the Hospital Merger, the “Hospital Merger Closing,” and the date of the Hospital Merger Closing,
the “Closing Date”). As a result of the Hospital Merger, the separate existence of Hospital Merger Sub shall cease and the Company shall continue as the surviving company (the “Surviving Company”) and as an
indirectly wholly owned Subsidiary of HospitalCo Parent. 

  
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 (b) At the Hospital Merger Closing: 

(i) HospitalCo Parent and Hospital Merger Sub shall cause a certificate of merger to be executed, acknowledged and filed with
the Secretary of State of the State of Delaware in accordance with the relevant provisions of the LLC Act, and the Hospital Merger shall become effective at the time such certificate of merger has been duly filed (the “Hospital Merger
Effective Time”); 
 (ii) HospitalCo Parent shall cause the Hospital Merger Consideration to be funded to Hospital
Merger Sub. At the Hospital Merger Effective Time, all of the limited liability company interests held by Homecare Intermediate in the Surviving Company shall be converted into the right to receive the Hospital Merger Consideration in the aggregate.
Homecare Intermediate shall (and Parent shall cause Homecare Intermediate to) direct the Surviving Company, on behalf of Homecare Intermediate, to deposit into the Payment Fund such portion of the Hospital Merger Consideration as is necessary to
satisfy the amount required to be deposited in the Payment Fund to pay the Merger Consideration to holders of shares of Company Common Stock pursuant to Section 2.02(a) of the Merger Agreement. 

(c) The Consortium Parties agree to ensure that, immediately following the Take-Private Closing (after giving effect to the Financing (but not
taking into account any funds borrowed under any revolving credit facility that is part of the Financing) and the other transactions contemplated by the Merger Agreement), the Homecare Entities will hold or own Cash as at the Hospital Merger Closing
equal to $12,500,000. The Consortium Parties further agree that all other Cash of the Company and its Subsidiaries immediately prior to the Hospital Merger Closing shall either be held and owned by the Hospital Entities or distributed by
the Homecare Entities to the Company immediately prior to the Hospital Merger Closing. 
 Section 1.07 Effects of the Hospital
Merger. The Hospital Merger shall have the effects set forth in this Agreement and in the applicable provisions of the LLC Act. Without limiting the generality of the foregoing, and subject thereto, from and after the Hospital Merger Effective
Time, all property, rights, privileges, immunities, powers, franchises, licenses and authority of the Company and Hospital Merger Sub shall vest in the Surviving Company, and all debts, liabilities, obligations, restrictions and duties of each of
the Company and Hospital Merger Sub shall become the debts, liabilities, obligations, restrictions and duties of the Surviving Company. 

Section 1.08 Company LLC Agreement. At the Hospital Merger Effective Time, HospitalCo Parent shall enter into a limited liability
company operating agreement of the Surviving Company in a form satisfactory to HospitalCo Parent (the “Company LLC Agreement”), which shall be the limited liability company agreement of the Company until thereafter amended in
accordance with the terms thereof. 

  
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 Section 1.09 Directors and Officers. From and after the Hospital Merger Effective
Time, the managers and officers of the Company shall be the managers and officers of the Surviving Company until their successors have been duly elected or appointed and qualified or until their earlier death, resignation or removal in accordance
with the Company LLC Agreement. 
 Section 1.10 No Assignment. 

(a) Notwithstanding Section 1.04, this Agreement shall not constitute an agreement to transfer, and none of the
Hospital Entities shall be required to transfer, to Gentiva (or any other Homecare Entity) any Contract constituting a Transferred Homecare Asset, or any Claim, right, or benefit thereunder or resulting therefrom, if an attempted transfer thereof
without the consent of any Third Party would constitute a breach or violation of the terms and conditions of such Contract or applicable Law and for which such consent has not been obtained prior to the Homecare Transfers (any such Contract,
together with any such Claim, right or benefit, the “Consent Required Contracts”). 
 (b) Prior to the Homecare Transfers,
the Company and Parent shall (and shall cause their respective applicable Subsidiaries to) use reasonable best efforts to obtain all consents required to assign to Gentiva (or any other Homecare Entity as may be designated by Gentiva or Parent) any
Contract that would be a Consent Required Contract if the consent of a Third Party to the assignment thereof to Gentiva or its designee was not obtained as of or prior to the consummation of the Homecare Transfers. With respect to each Consent
Required Contract, the Company shall, and Parent shall cause Gentiva or its designee to, enter into a commercially reasonable arrangement acceptable to each of the HospitalCo Parent and Parent, to be effective as of, or prior to, the consummation of
the Homecare Transfers which will not result in any material violation or breach of, or constitute a material default under, applicable Law or the terms of such Consent Required Contract and under which, as of the consummation of the Homecare
Transfers (x) Gentiva would obtain the Claims, rights and benefits under such Consent Required Contract as if such Contract had been fully assigned and transferred to Gentiva effective as of the consummation of the Homecare Transfers, and
(y) Gentiva would assume and agree to perform, pay and discharge all Liabilities under such Consent Required Contract as if such Liabilities had been assumed by Gentiva effective as of the consummation of the Homecare Transfers. The Company
shall, and shall cause the applicable Hospital Entities to, promptly pay to Gentiva, when received, all monies received by them under any such Consent Required Contract. Parent shall, and shall cause Gentiva to, pay when required any Liabilities
under any such Consent Required Contract or promptly reimburse the Company or any other applicable Hospital Entities to 

  
 5 








 
the extent the Company or such Hospital Entities have paid any such Liabilities. If and when the consent required to transfer any Consent Required Contract is obtained, the transfer of the
applicable Consent Required Contracts shall be promptly effected in accordance with the terms of this Agreement. For twelve (12) months following the Homecare Transfers or such longer period (not to exceed eighteen (18) months following
the Homecare Transfers) as may be reasonably requested by Parent by written notice to the Company prior to the expiration of such twelve (12) month period, the Company and Parent shall use their reasonable best efforts to obtain all consents
required to assign any Consent Required Contract to Gentiva. Parent shall cause Gentiva to use its reasonable best efforts to assist the Company in obtaining each such consent. Promptly after receipt of any such consent, the Company, Parent and
Gentiva shall (or shall cause their applicable Subsidiaries to) execute all such documents and take such other actions as may be reasonably necessary to assign the applicable Consent Required Contract to Gentiva and for Gentiva to assume the
Liabilities thereunder. 
 (c) Except as expressly contemplated in this Section 1.10, any Consent Required Contract
shall continue to be considered a Transferred Homecare Asset under this Agreement during any period prior to receipt of the consent of a Third Party required for the assignment thereof to Gentiva or its designee and the effectiveness of such
assignment to Gentiva or its designee; provided that (i) there shall be no adjustment to the Hospital Merger Consideration as a result of any Contract being a Consent Required Contract and (ii) subject to the Company’s
performance of its obligations under this Section 1.10 in accordance with the terms of hereof, in no event shall the failure (in and of itself) following the Homecare Transfers, to obtain any consent in respect of a Consent
Required Contract constitute a breach of this Agreement. 
 (d) From and after the Hospital Merger Closing, the out-of-pocket costs and expenses associated with any assignments of any Consent Required Contracts contemplated by this Section 1.10, including
payments made to Third Party counterparties to such Consent Required Contracts in connection with such assignments or obtaining consents with respect thereto, shall be borne by Parent and HospitalCo Parent in proportion to their Homecare Sharing
Percentage and Hospital Sharing Percentage, respectively. 
 ARTICLE II 

Covenants 

Section 2.01 Transition Matters. 

(a) Promptly following the date hereof, in furtherance of the transactions contemplated by this Agreement, the Consortium Parties shall, and
shall cause their Subsidiaries and their respective officers, employees, accountants, legal advisors and other representatives to, develop a transition plan for the separation of the Homecare 

  
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Business and the Retained Business, each on a standalone basis (the “Transition Plan”). Until the Hospital Merger Closing or the earlier termination of this Agreement in
accordance with its terms, the Consortium Parties shall, and shall cause their Subsidiaries and their respective officers, employees, accountants, legal advisors and other representatives to, cooperate in good faith and use reasonable best efforts
to implement such Transition Plan as promptly as practicable (and in accordance with the schedule set forth therein). The Transition Plan shall address: transitional services to be provided for under the Transition Services Agreement and any other
transitional agreements; the separation or replacement of Shared Contracts (including steps to assign, partially assign and/or separate such contracts); the separation of the Company’s current integrated IT Systems into separate IT Systems for
each of the Homecare Business and the Retained Business; the separation or sharing of other shared assets that are currently used or held for use by both the Homecare Business and the Retained Business (including the determination of what assets
shall comprise the Transferred Homecare Assets and assets retained by the Hospital Entities, respectively); a proposed timeline for transitional services and the separation of the Homecare Business and the Retained Business, including those actions
contemplated to be taken prior to the Hospital Merger Closing; and such other matters as Parent and HospitalCo Parent may mutually agree; provided that, except as expressly set forth in the Merger Agreement or this Agreement, any action to be
taken by the Company or any of its Subsidiaries prior to the Hospital Merger Closing shall require the Company’s prior written consent, not to be unreasonably withheld. 

(b) Subject to the terms and conditions of this Agreement, prior to the Hospital Merger Closing, the Company shall, and shall cause its
Subsidiaries and their respective officers, employees, accountants, legal advisors and other representatives to, (i) provide all such assistance and cooperation as may be reasonably requested by Parent and/or HospitalCo Parent in connection
with the development and preparation of the Transition Plan, the Transition Services Agreement and such other transitional arrangements as may be desired and with the identification of assets and liabilities to be separated or allocated between the
Homecare Business, on the one hand, and the Retained Business, on the other hand (including what assets shall comprise the Transferred Homecare Assets), and (ii) execute such instruments and other documents and take such other actions, in each
case as may be requested by Parent and/or HospitalCo Parent to implement the transactions contemplated by this Agreement (including the obtaining of any consents) or by the Transition Plan; provided, that except as expressly
contemplated under the Merger Agreement or this Agreement (including pursuant to Section 8.02(i) of the Merger Agreement and Section 2.06(b), Section 2.06(c) and
Section 2.07 of this Agreement), neither the Company nor any of its Subsidiaries shall be required to, prior to the Take-Private Closing, (A) execute any instruments or documents or take any actions, (B) bear any
material out-of-pocket cost or expense, or pay any material fee or make any other material payment to any third party, (C) commence any litigation or offer or grant
any material accommodation (financial or 

  
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otherwise) to any third party in order to assign, partially assign, separate, replace or novate any Contract or insurance policy, release or put in place any Guarantee and Credit Support
Arrangements, or to obtain any consent otherwise required in connection with any of the transactions contemplated by this Agreement (including pursuant to Section 1.10, Section 2.02 and
Section 2.03); or (D) incur any other material liability, in each case of clauses (A) to (D), that would not be conditioned upon or that would be effective prior to the Take-Private Closing. 

(c) In addition, Parent and HospitalCo Parent shall each take the following actions: 

(i) promptly after the date of this Agreement, appoint a transition manager whose primary responsibility is to plan and execute
such transition and manage such Party’s respective transition team; 
 (ii) promptly after the date of this Agreement,
review the technology, business operations and administration capabilities to be so transitioned or migrated, taking into account any issues of separation arising from the Transition Plan; 

(iii) establish the respective transition teams; 

(iv) set regular meetings of such transition teams during the period between the date of this Agreement and the Hospital Merger
Closing; 
 (v) make available appropriate knowledgeable business, operations, administration and technology personnel and
any other personnel reasonably needed for such transition and migration planning; and 
 (vi) implement the Transition Plan;

 provided that all such activities shall be in compliance with applicable Law. The Company shall be permitted to designate one or more
representatives who shall be permitted to attend any meeting of the transition teams and otherwise participate in any of the actions set forth in this Section 2.01 or otherwise related to the Transition Plan. Each of Parent
and HospitalCo Parent shall, and shall cause their respective transition teams to, consult with the Company and consider in good faith the Company’s recommendations regarding the Transition Plan and the development and implementation thereof.
Prior to the Take-Private Closing, representatives of the Company shall be entitled to participate in any communications and negotiations with Third Parties in connection with (A) obtaining any consent required under any Consent Required
Contract, (B) assigning, partially assigning, separating, replacing, or obtaining any complete or partial novation of any Shared Contract or any insurance policy, or (C) releasing or putting in place any Guarantee and Credit Support
Arrangements. 

  
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 (d) During the period between the date of this Agreement and the Hospital Merger Closing or the
earlier termination of this Agreement in accordance with its terms, the Company shall, and shall cause its Subsidiaries and their respective officers, employees, accountants, legal advisors and other representatives to, cooperate in good faith with
Parent and HospitalCo Parent to review and assist Parent and HospitalCo Parent in the preparation of the schedules to the Transition Services Agreement to achieve a separation of the Homecare Business and the Retained Business in accordance with the
principles and timeline desired by Parent and HospitalCo Parent. 
 Section 2.02 Shared Contracts. 

(a) Promptly after the date hereof and until the Hospital Merger Closing or the earlier termination of this Agreement in accordance with its
terms, the Parties shall, and shall cause their respective Subsidiaries to, use reasonable best efforts to cause the Shared Contracts to be assigned or partially assigned to a HomecareCo Group Member or a HospitalCo Group Member and/or to be
replaced with separate contracts for the Homecare Business and/or the Retained Business, in each case as set forth in the Transition Plan and effective as of the Hospital Merger Closing or such later time or date as may be set forth in the
Transition Plan. The Parties shall cooperate and provide reasonable assistance to each other in effecting such partial assignment, separation or replacement of the Shared Contracts. 

(b) If, as of the Hospital Merger Closing (or such later time or date as may be set forth in the Transition Plan), any Shared Contract has not
been assigned, partially assigned, separated or replaced as set forth in the Transition Plan, then, until (x) the twelve (12) month anniversary of the Hospital Merger Closing or such longer period (not to exceed eighteen
(18) months following the Hospital Merger Closing) as may be reasonably requested by Parent by written notice to HospitalCo Parent prior to the expiration of such twelve (12) month period or (y) the earlier expiration or
termination of the Shared Contract in accordance with its terms, HospitalCo Parent shall cause the applicable Hospital Entity and Parent shall cause the applicable Homecare Entity to enter into a mutually agreeable arrangement which will not result
in a material violation or breach of, or constitute a material default under, applicable Law or the terms of such Shared Contract and under which (i) the Homecare Business or the Retained Business (as the case may be) would obtain such Claims,
rights and benefits under such Shared Contract as the Homecare Business or the Retained Business (as the case may be) obtained immediately prior to the Hospital Merger Closing, and (ii) a Homecare Entity or Hospital Entity (as the case may be)
would assume and agree to perform, pay and discharge when due all Liabilities under such Shared Contract to the extent related to the Homecare Business or Retained Business (as the case may be). Parent or HospitalCo Parent, as the case may be, shall
cause its Subsidiary that is party to such Shared Contract to promptly pay to HospitalCo Parent (or its designated Hospital Entity) or Parent (or its designated Homecare Entity) (as the case may be), when received, all monies received by


  
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such Subsidiary to the extent related to the Retained Business or the Homecare Business (as the case may be). Parent or HospitalCo Parent shall or shall cause its applicable Subsidiaries to pay
when required any Liabilities under any such Shared Contract or promptly reimburse the party to such Shared Contract to the extent such party has paid (or cause to be paid) any such Liabilities. Unless mutually agreed by Parent and HospitalCo
Parent, neither Parent nor HospitalCo Parent (nor any of their respective Subsidiaries) will be obligated to extend or renew any Shared Contract beyond the term of such Shared Contract as in effect immediately prior to the Hospital Merger Closing.

 (c) From and after the Hospital Merger Closing, the
out-of-pocket costs and expenses associated with any such assignments or separations of Shared Contracts contemplated by this Section 2.02,
including payments made to Third Party counterparties to such Shared Contracts in connection therewith, shall be borne by Parent and HospitalCo Parent in proportion to their Homecare Sharing Percentage and Hospital Sharing Percentage, respectively.

 Section 2.03 Replacement of Guarantees and Credit Support. 

(a) The Parties covenant and agree that: 

(i) they shall cooperate and use their respective reasonable best efforts to obtain the full and unconditional release,
effective as of the Hospital Merger Closing, of the guarantees extended by the Hospital Entities on behalf of a Homecare Entity or the Homecare Business (“Hospital Guarantees”); and 

(ii) they shall cooperate and use their respective reasonable best efforts to put in place, effective as of the Hospital Merger
Closing, replacement credit support arrangements from a Homecare Entity reasonably acceptable to the relevant counterparties to substitute for the credit support currently provided by the Hospital Entities on behalf of a Homecare Entity or the
Homecare Business (“Hospital Credit Support”). 
 (b) From and after the Hospital Merger Closing, Parent shall indemnify,
pay, reimburse and hold the HospitalCo Group Indemnified Persons harmless from any and all payments required to be made under, and costs and expenses reasonably incurred in connection with, Hospital Guarantees or Hospital Credit Support to the
extent relating to the Homecare Business. 
 (c) The Parties covenant and agree that: 

(i) they shall cooperate and use their respective reasonable best efforts to obtain the full and unconditional release,
effective as of the Hospital Merger Closing, of the guarantees extended by the Homecare Entities on behalf of a Hospital Entity or the Retained Business (“Homecare Guarantees”); and 

  
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 (ii) they shall cooperate and use their respective reasonable best efforts to put
in place, effective as of the Hospital Merger Closing, replacement credit support arrangements from a Hospital Entity acceptable to the relevant counterparties to substitute for the credit support currently provided by the Homecare Entities on
behalf of a Hospital Entity or the Retained Business (“Homecare Credit Support”, and together with the Homecare Guarantees, the Hospital Guarantees and the Hospital Credit Support, collectively the “Guarantee and Credit
Support Arrangements”). 
 (d) From and after the Hospital Merger Closing, HospitalCo Parent shall indemnify, pay, reimburse and
hold the HomecareCo Group Indemnified Persons harmless from any and all payments required to be made under, and costs and expenses reasonably incurred in connection with, Homecare Guarantees or Homecare Credit Support to the extent relating to the
Retained Business. 
 (e) It is the intention and understanding of the Parties that, except as may be mutually agreed by Parent and
HospitalCo Parent, such Hospital Guarantees, Hospital Credit Support, Homecare Guarantees and Homecare Credit Support shall be canceled and terminated as of the Closing Date, and the released Person and its Affiliates shall have no further
obligation or liability (contingent or otherwise) under such Hospital Guarantees, Hospital Credit Support, Homecare Guarantees and Homecare Credit Support from and after the Closing Date; provided, however, that in the event any of the
Guarantee and Credit Support Arrangements has not been canceled and terminated as of the Closing Date, HospitalCo Parent or Parent, as applicable, shall, and shall cause its respective Subsidiaries to, keep in place such Guarantee and Credit Support
Arrangements as may be mutually agreed between Parent and HospitalCo Parent and shall not take any action to terminate or modify any such mutually agreed Guarantee and Credit Support Arrangement until the earlier of (i) expiration by its terms
of such Guarantee and Credit Support Arrangement or (ii) the date on which HospitalCo Parent or Parent, as applicable, provides written confirmation to the other Party that such Guarantee and Credit Support Arrangement (including all
obligations and Liabilities of such other Party and its respective Affiliates with respect thereto) has been fully and unconditionally released; provided that each of Parent and HospitalCo Parent shall indemnify, hold harmless and reimburse the
other (or its applicable Subsidiaries) for any Liabilities that may be incurred pursuant to such outstanding Guarantee and Credit Support Arrangements. 

(f) Prior to the Hospital Merger Closing, the Company shall, and shall cause its Subsidiaries to, provide such assistance and cooperation as
Parent and HospitalCo Parent may reasonably request in connection with the actions contemplated by this Section 2.03, including the identification of all Guarantee and Credit Support Arrangements and communication with the
beneficiaries of the foregoing. 

  
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 Section 2.04 Further Assurances; Post-Hospital Merger Closing Transfers. 

(a) Each of the Parties will execute and deliver such further instruments of transfer, distribution and assumption or such other documents, and
take such actions, as the other Parties may reasonably request in order to effect the purposes of this Agreement and to carry out the terms hereof, in each case subject to and in accordance with the Transition Plan, the Transition Services
Agreement, the other terms and conditions of this Agreement and applicable Law. Without limiting the generality of the foregoing, subject to and in accordance with the Transition Plan, the Transition Services Agreement, the other terms and
conditions of this Agreement and applicable Law, at any time and from time to time after Hospital Merger Closing: 
 (i) at
the reasonable request of Parent, HospitalCo Parent and the Hospital Entities shall execute and deliver such other instruments of transfer, distribution and assumption and such other documents, and take such actions as Parent may reasonably deem
necessary or desirable in order to (x) transfer, convey, assign and deliver to a Homecare Entity any asset, property or right to the extent it relates to or that is used or held for use exclusively in the operation of the Homecare Business, and
(y) properly assume and agree to perform, pay and discharge when due any Liability to the extent it relates or arises from the operation of the Hospital Business; and 

(ii) at the reasonable request of HospitalCo Parent, Parent and the Homecare Entities shall execute and deliver such other
instruments of transfer, distribution and assumption and such other documents, and take such actions as HospitalCo Parent may reasonably deem necessary or desirable in order to (x) transfer, convey, assign and deliver to a Hospital Entity any
asset, property or right of a Homecare Entity to the extent it relates to or that is used or held for use exclusively in the operation of the Hospital Business and (y) properly assume and agree to perform, pay and discharge when due any
Liability to the extent it relates to or arises from the operation of the Homecare Business. 
 (b) If at any time following the Hospital
Merger Closing, either Parent or HospitalCo Parent (or any Subsidiary thereof) shall receive or otherwise possess any asset that is or was, prior to the Hospital Merger Closing, used or held for use exclusively in the other’s business (in the
case of Parent, the Transferred Homecare Assets, and in the case of HospitalCo Parent, assets that do not constitute Transferred Homecare Assets, and each such asset (as applicable), a “Non-Transferred
Asset”), Parent or HospitalCo Parent (as the case may be) (the “Transferor Party”) shall, upon identification of such Non-Transferred Asset by any Party or its Subsidiaries, promptly transfer, or cause to be
transferred, such Non-Transferred Asset to the other Party (or to such Party’s designated Subsidiary) (the “Transferee Party”) entitled to such Non-Transferred Asset, and the Transferee Party shall accept such
Non-Transferred Asset (provided that, to the extent the Transferor Party requires such Non-Transferred Asset to provide services to the Transferee Party under the Transition Services Agreement, such transfer shall be delayed


  
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until completion of the applicable services). If any transfer or assignment of any Non-Transferred Asset under this Section 2.04
is unable to be consummated promptly for any reason, then, insofar as reasonably possible, the Transferor Party shall thereafter hold such Non-Transferred Asset for the use and benefit of the Transferee Party.
In addition, the Transferor Party retaining such Non-Transferred Asset shall, insofar as reasonably possible and to the extent permitted by Law, take such actions as may be reasonably requested by the
Transferee Party to which such Non-Transferred Asset is to be transferred or assigned, in order to place such Transferee Party in a substantially similar position as if such
Non-Transferred Asset had been transferred as contemplated hereby and so that all the benefits and burdens relating to such Non-Transferred Asset, including use, risk of
loss, Tax costs, potential for gain, and dominion, control and command over such Non-Transferred Asset, is to inure from and after the Hospital Merger Closing to the Transferee Party. From and after the
Hospital Merger Closing, the reasonable out-of-pocket costs and expenses associated with any such transfers or assignments of
Non-Transferred Assets, including reasonable attorneys’ fees and all recording or similar fees, shall be borne by Parent and HospitalCo Parent in proportion to their Homecare Sharing Percentage and
Hospital Sharing Percentage, respectively. 
 (c) Notwithstanding anything to the contrary in Section 2.04(b), to
the extent not prohibited by applicable Tax Laws (and to the extent consistent with the relevant arrangement agreed to by Parent and HospitalCo Parent pursuant to Section 2.04(b)), Parent shall cause the HomecareCo Group
and HospitalCo Parent shall cause the HospitalCo Group to treat and report on their Tax Returns, the Non-Transferred Assets as assets owned by the Transferee Party after the Hospital Merger Closing. Each of
Parent and HospitalCo Parent agrees to notify the other Party promptly in writing if it determines that such treatment (to the extent consistent with the relevant arrangement agreed to by Parent and HospitalCo Parent pursuant to
Section 2.04(b)) is not permitted under applicable Tax Laws. Where such treatment is not permitted under applicable Tax Laws, and subject to the terms of any relevant arrangement agreed to by Parent and HospitalCo Parent
pursuant to Section 2.04(b), the amount of the Liability for Taxes imposed on the Transferor Party or any of its Subsidiaries with respect to any Non-Transferred Asset for any taxable
period (or portion thereof) beginning after the Closing Date, if any, for which the Transferee Party and its Subsidiaries are responsible shall be calculated on a “with and without” basis and the Transferee Party shall pay such amount to
the Transferor Party. The Transferor Party shall provide, and shall cause its Subsidiaries to provide, the Transferee Party with a reasonable opportunity to review the relevant portion of any applicable Tax Returns relating to any Non-Transferred Assets (and accompanying schedules, calculations and other reasonably requested work papers) as necessary for determining such Tax Liability; provided, that, in the case of Tax Returns of the
Transferor Party or any of its Subsidiaries (or of a consolidated, combined, unitary or Tax group including any of them), the Transferor Party may, in lieu of delivering the Tax Returns, deliver to the Transferee Party
pro-forma statements setting forth in sufficient detail the information relevant for determining the relevant Tax 

  
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Liability. If Parent and HospitalCo Parent are unable to reach an agreement in respect of any dispute concerning such Tax Liability, they shall promptly submit any such dispute for resolution to
an accounting firm of international reputation mutually agreeable to Parent and HospitalCo Parent (the “Tax Accountant”). All costs and expenses of the Tax Accountant shall be borne by Parent and HospitalCo Parent in proportion to
their Homecare Sharing Percentage and Hospital Sharing Percentage, respectively. 
 (d) If any skilled nursing facility remains unsold as of
the Hospital Merger Closing and is sold after such date for a positive purchase price, the Company shall remit to Parent the Homecare Sharing Percentage of the net proceeds actually realized by the Company with respect to such sale. 

Section 2.05 Use of Names; Cross License. 

(a) At the Hospital Merger Closing, the Company and Parent shall, or shall cause their respective Subsidiaries to, enter into a trademark
license agreement (the “Trademark License Agreement”), reasonably acceptable to both Parent and HospitalCo Parent, which shall provide for the grant of a limited, royalty-free license to each of the HomecareCo Group Members to use
the Hospital Trademarks set forth in Schedule 2.05(a) for so long as the HomecareCo Group and the HospitalCo Group continue to be Affiliates, plus a reasonable wind-down period thereafter. 

(b) At the Hospital Merger Closing, the Company and Parent shall, or shall cause their respective Subsidiaries to, enter into an intellectual
property license agreement (the “IP License Agreement”), reasonably acceptable to both Parent and HospitalCo Parent, which shall provide for the grant of a limited, royalty-free license to each of the HospitalCo Group Members to use
the Homecare IP to the extent used in the Retained Business and to each of the HomecareCo Group Members to use the Hospital IP to the extent used in the Homecare Business; provided, that unless set forth in the Transition Services Agreement
or any other Ancillary Agreement, neither the Company nor Parent (or any of their respective Subsidiaries) shall have any obligation to provide updates, support or bug fixes to any such licensed Intellectual Property. 

(c) Prior to the Hospital Merger Closing, the Company shall, and shall cause its Subsidiaries to, provide such assistance and cooperation as
Parent and HospitalCo Parent may reasonably request in connection with the actions contemplated by this Section 2.05, including using reasonable best efforts to identify shared Intellectual Property. 

  
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 Section 2.06 Insurance 

(a) Separation of Insurance Generally. Except as otherwise provided in Section 2.06(d), from and after the
Hospital Merger Closing, (i) the Homecare Entities, the Homecare Business, the Transferred Homecare Assets and the Assumed Homecare Liabilities, and the operations, assets and Liabilities in respect thereof, shall cease to be insured by any of
Hospital Entities’ non-Affiliated Third Party insurance and reinsurance policies, and (ii) except as provided in this Agreement, none of the HomecareCo Group shall have any access, right, title or
interest in or to any such insurance or reinsurance policies (including to all claims and rights to make claims and all rights to proceeds, except as otherwise provided in Section 2.06(d)) to cover the Homecare Entities,
the Homecare Business, the Transferred Homecare Assets or the Assumed Homecare Liabilities, or the operations, assets or Liabilities in respect thereof. From and after the Hospital Merger Closing, the HomecareCo Group shall be responsible for
securing all insurance it considers appropriate for the Homecare Entities, the Homecare Business, the Transferred Homecare Assets and the Assumed Homecare Liabilities, and the operations, assets and Liabilities in respect thereof (which may include
insurance written by the Company’s captive insurance Subsidiary if permitted under applicable Law). 
 (b) Replacement of Homecare
Insurance Coverage. During the period between the date of this Agreement and the Hospital Merger Closing or the earlier termination of this Agreement in accordance with its terms, the Company shall, and shall cause its Subsidiaries and their
respective officers, employees, accountants, legal advisors and other representatives to, cooperate in good faith with Parent and HospitalCo Parent to enable Parent and HospitalCo Parent, at their sole cost and expense, to place and bind, effective
as of the Hospital Merger Closing, new insurance policies with respect to the Homecare Entities, the Homecare Business, the Transferred Homecare Assets and the Assumed Homecare Liabilities, and the operations, assets and Liabilities in respect
thereof, in replacement of any of the insurance or reinsurance policies of the Company or its Subsidiaries that are provided by non-Affiliated Third Parties or by Cornerstone under which coverage was provided
for the Homecare Entities, the Homecare Business, the Transferred Homecare Assets and the Assumed Homecare Liabilities prior to the Hospital Merger Closing and under which such coverage will not be available following the Hospital Merger Closing.
All out-of-pocket costs and expenses of Parent and HospitalCo Parent and out-of-pocket
costs and expenses of the Company to place and bind such new insurance policies contemplated by this Section 2.06(b) outstanding as of the Hospital Merger Closing shall be deemed to be Shared Company Transaction
Liabilities; provided, that any premiums or other payments payable by the insured under such new insurance policies shall be borne solely by the Homecare Entities. 

(c) Novation of Workers’ Compensation Insurance Policies. Without limiting Section 2.06(a) and
Section 2.06(b), as promptly as practicable following the date of this Agreement (and in any event prior to the Hospital Merger Closing), the Company shall cooperate with Parent and HospitalCo Parent and use reasonable best efforts to enter
into, at Parent and HospitalCo Parent’s sole expense, a partial novation (on terms acceptable to Parent and HospitalCo Parent) to one or more of the Homecare Entities of the Company’s non-Affiliated
Third Party workers’ compensation insurance policies for all policy periods commencing on and after January 1, 2011 with respect to all of the risks insured 

  
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thereunder to the extent relating to (i) the Homecare Business and (ii) the Homecare Sharing Percentage of all other risks insured thereunder that do not relate to the Hospital Business
(the risks described in this clause (ii), the “Novated Unallocated WC Tail”) (which risks, for the avoidance of doubt, constitute Assumed Homecare Liabilities), which novation shall be effective as of the Hospital Merger Closing.
Parent shall cause one or more of the Homecare Entities to obtain as of the Hospital Merger Closing all letters of credit as may be required by the provider of such workers’ compensation insurance as collateral in connection with the insurance
novated to the applicable Homecare Entities, which letters of credit shall reduce the letters of credit required to be held in respect of the Company’s obligations from and after the Hospital Merger Closing. If such novation is not effective as
of the Hospital Merger Closing, Parent shall, and shall cause the Homecare Entities, to (x) cooperate with HospitalCo Parent and the Company to enter into such novation as promptly as practicable following the Hospital Merger Closing,
(y) obtain all required letters of credit as promptly as practicable following the Hospital Merger Closing as contemplated by the foregoing sentence and (z) indemnify and hold the Company harmless against, and promptly reimburse the
Company for, any losses incurred by the Company in connection with the risks to be novated pursuant to this Section 2.06(c) in accordance with Section 6.02(b)(ii). 

(d) Claims Under Hospital Insurance Policies. With respect to events, occurrences or circumstances relating to the Homecare Entities,
the Homecare Business, the Transferred Homecare Assets or the Assumed Homecare Liabilities, or the operations, assets and Liabilities in respect thereof, that occurred or existed prior to the Closing Date that are covered by occurrence-based
insurance policies of the Hospital Entities that are provided by non-Affiliated Third Parties, following the Hospital Merger Closing, the HomecareCo Group may, or may by written request to the HospitalCo Group
cause the HospitalCo Group to on HomecareCo Group’s behalf, make claims under such policies; provided, that: 

(i) by making, or causing to be made, such claims, (x) Parent shall cause the HomecareCo Group to reimburse the HospitalCo
Group for any documented out-of-pocket costs incurred by the HospitalCo Group as a result of making such claims, including any retroactive or prospective premium
adjustments to the extent directly attributable to any such claims, as such amounts are determined in accordance with those policies from time to time and as reasonably demonstrated by HospitalCo Parent, and (y) Parent shall cause the
HomecareCo Group to pay and satisfy any applicable deductible or retention amount with respect to any such claims; 
 (ii)
Parent agrees that the HomecareCo Group shall not, and shall cause the HomecareCo Group Members not to, make any such claims if, and to the extent that, such claims are covered by any insurance policy issued to or maintained by the HomecareCo Group;


  
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 (iii) the HospitalCo Group shall not be liable under any circumstances for the
inability of the HomecareCo Group, or HospitalCo Group on HomecareCo Group’s behalf, to collect insurance proceeds under any such insurance policy; and 

(iv) HospitalCo Group shall not have any obligation to commence any litigation with respect to any matter potentially covered
under such insurance policy, and if the HomecareCo Group reasonably believes that coverage for any such event or circumstance was wrongfully denied under such insurance policy, the HospitalCo Group shall, to the extent permitted under such insurance
policy and by applicable Law, upon request of the HomecareCo Group, assign to the HomecareCo Group the right to commence and pursue litigation with respect to such allegedly wrongfully denied coverage. Any such litigation shall be at the HomecareCo
Group’s sole expense. 
 (e) Wrong Pockets. If, following the Hospital Merger Closing, any HospitalCo Group Member receives any
amounts under any insurance policy with respect to any claim asserted under such policy prior to the Closing Date in respect of any occurrence, event, condition, or circumstance that occurred or existed prior to the Closing Date relating to the
Homecare Entities, Homecare Business, the Transferred Homecare Assets or the Assumed Homecare Liabilities, or the operations, assets and Liabilities in respect thereof, the applicable HospitalCo Group Member shall promptly forward such amounts (or
the applicable portion thereof to the extent relating to the Homecare Entities, Homecare Business, the Transferred Homecare Assets or the Assumed Homecare Liabilities, or the operations, assets and Liabilities in respect thereof) to Parent or its
designated Subsidiary. 
 Section 2.07 Representation and Warranty Insurance. 

(a) As promptly as practicable following the date hereof, the Company shall and shall cause its applicable Subsidiaries to, at the request of
Parent or HospitalCo Parent, use reasonable best efforts to obtain and bind a sell-side representation and warranty insurance policy at Parent’s and HospitalCo Parent’s cost, on terms and conditions reasonably approved by Parent and
HospitalCo Parent, and to incept on the Closing Date, with respect to the representations and warranties made by the Company and/or its Subsidiaries under the asset purchase agreement and operations transfer agreements entered into in connection
with the SNF Transaction (such policy, the “SNF R&W Policy”). The Company shall, and shall cause its Subsidiaries and Representatives to, promptly provide reasonable cooperation to Parent and/or HospitalCo Parent in connection
with obtaining and binding the SNF R&W Policy, including making available employees of the Company and its Subsidiaries, on reasonable advance notice during business hours, for underwriting and diligence purposes and providing access to any
Company data room or other due diligence materials furnished in connection with the SNF Transaction. All out-of-pocket costs and expenses of Parent and HospitalCo Parent
and out-of-pocket costs and expenses of the Company for the SNF R&W Policy outstanding as of the Hospital Merger Closing shall be deemed to be Shared Company
Transaction Liabilities. 

  
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 (b) At the request of Parent or HospitalCo Parent, the Company shall and shall cause its
Subsidiaries to promptly provide all reasonable cooperation to Parent and/or HospitalCo Parent in connection with any efforts of Parent or HospitalCo Parent to obtain and bind a buy-side representation and
warranty insurance policy with respect to the representations and warranties of the Company under the Merger Agreement. All out-of-pocket costs and expenses of Parent
and HospitalCo Parent and out-of-pocket costs and expenses of the Company for buy-side representation and warranty insurance
policy contemplated by this Section 2.07(b) outstanding as of the Hospital Merger Closing shall be deemed to be Shared Company Transaction Liabilities. 

Section 2.08 Loss Portfolio Transfer. In the event that the Put or the Call is exercised pursuant to the Homecare JV
Agreement, Parent shall or shall cause one of the Homecare Entities to, obtain and bind loss portfolio transfer reinsurance policies (such policies, the “Loss Portfolio Transfer Reinsurance Policies”), effective as of the Put/Call
Closing Date, pursuant to which all of the Liabilities in respect of the Assumed Share of NCD/ALF Claims Tail (including any such Liabilities which (a) are known or pending or have otherwise arisen as of or prior to the Put/Call Closing Date or
(b) are discovered or otherwise arise after the Put/Call Closing Date), shall be transferred to a commercial insurer. All costs and expenses of obtaining such Loss Portfolio Transfer Reinsurance Policies shall be borne by a Homecare Entity;
provided, that the aggregate amount of all such costs and expenses shall be deducted from the net consideration payable to the Put Sellers (as defined in the Homecare JV Agreement) or the Call Sellers (as defined in the Homecare JV Agreement)
payable at the Put/Call Closing. To the extent reasonably requested by Parent, HospitalCo Parent shall, and shall cause the HospitalCo Group Members to, cooperate and assist Parent in obtaining and binding the Loss Portfolio Transfer Reinsurance
Policies. 
 Section 2.09 Settlement of Intercompany Accounts. The Company shall use reasonable best efforts to cause all
intercompany leases, receivables, payables, loans and other accounts (collectively, “Intercompany Accounts”) in existence immediately prior to the Hospital Merger Closing between the Hospital Entities, on the one hand, and the
Homecare Entities, on the other hand, to be contributed, distributed, or otherwise transferred or assumed at or prior to the Hospital Merger Closing such that, as of the Closing Date, there are no Intercompany Accounts outstanding between any
Hospital Entity, on the one hand, and any Homecare Entity, on the other hand, except as set forth on Schedule 2.09. 

  
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 Section 2.10 Post-Hospital Merger Closing Access to Information; Retention of Records;
Confidentiality. 
 (a) For a period of six (6) years after the Hospital Merger Closing, (i) HospitalCo Parent shall give
Parent and its Affiliates and its and their Representatives access to the books and records of the Hospital Entities to the extent related to the Homecare Business or the business of the Company and its Subsidiaries prior to the Hospital Merger
Closing, and (ii) Parent shall give HospitalCo Parent and its Affiliates and its and their Representatives access to the books and records of the Homecare Entities to the extent related to the Retained Business or the business of the Company
and its Subsidiaries prior to the Hospital Merger Closing (the information in clauses (i) and (ii), collectively, the “Accessible Information”), in each case as may be reasonably required by the requesting Party or such
Party’s Affiliates or its and their Representatives, including to the extent necessary for the preparation of financial statements or regulatory filings in respect of periods ending on or prior to the Hospital Merger Closing, or in connection
with any insurance claims, Claims or any obligations under this Agreement or any agreement, document or instrument contemplated hereby or thereby. At the requesting Party’s cost and expense, the requesting Party and its Affiliates and its and
their respective Representatives shall be entitled to make copies of, and conduct searches with respect to or in order to identify, any Accessible Information to which such Persons are entitled to access pursuant to this
Section 2.10. Any such access shall be conducted during regular business hours upon reasonable advance notice and under reasonable circumstances, and shall be subject to restrictions under Law and any confidentiality
obligations to which the Parties are bound. 
 (b) Except as required by applicable Law, each Party shall retain, and shall use reasonable
best efforts to cause its Affiliates to retain, for a period of at least six (6) years following the Closing Date, all information in their possession relating to (i) in the case of HospitalCo Parent, the Homecare Business, and
(ii) in the case of Parent, the Company and its Subsidiaries prior to the Hospital Merger Closing and the Retained Business. Except as required by applicable Law, after expiry of such six (6) year period, each Party and its Affiliates may
destroy or otherwise dispose of such information in their possession, provided, that prior to such destruction or disposal, it shall use reasonable best efforts to notify the other Parties specifying the information proposed to be destroyed
or disposed of and give the other Parties a reasonable opportunity to obtain possession of such information. 
 (c) From and after the
Hospital Merger Closing, each Party shall, and shall cause its Affiliates and each of its and their respective Representatives, to keep confidential and not disclose to any other Person, unless required by applicable Law or compelled to disclose by
judicial or administrative process or at the direction of any Governmental Entity, all information concerning each other Party furnished to it under this Agreement or the Ancillary Agreements by such other Party or such other Party’s
Representatives, except to the extent that such information concerning such other Party can be shown to have been (i) in the public domain through no fault of the Party to which it was furnished, or (ii) lawfully acquired on a non-confidential basis from other sources by the Party to which it was furnished, provided that such sources are not known by the Party to be subject to a confidentiality obligation to the furnishing Party or its
Representatives. 

  
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 Section 2.11 Litigation Cooperation. Following the Hospital Merger Closing, with
respect to any Claim made by a Third Party against or that involves any of the Parties, the HomecareCo Group Members or HospitalCo Group Members and relates to (a) the transactions contemplated by this Agreement, the Ancillary Agreements or the
Merger Agreement, or (b) the Company or any current or former Subsidiary of the Company or any Liabilities or current or former assets, employees or businesses thereof, whether or not such Claim is subject to indemnification hereunder, each of
the Parties hereto shall, upon written request by any other party hereto, and at the expense of the requesting Party (subject to the indemnification and expense-sharing provisions of this Agreement, to the extent applicable), provide all cooperation
and assistance, and shall furnish such records and information, as may be reasonably requested by the other in connection therewith, including, by using reasonable efforts to make available to the other, its officers, directors, employees and agents
as witnesses and to attend such conferences, discovery proceedings, hearings, trials and appeals as may be reasonably requested by the other in connection therewith. Following the Hospital Merger Closing, with respect to (i) any such Claim
involving Shared Company Transaction Liabilities or (ii) any Claim initiated by any Governmental Entity or private party pursuant to the HSR Act or any similar Law and relating to the transactions contemplated by this Agreement or the Merger
Agreement, the Parties agree, consistent with applicable rules of privilege and legal ethics, to provide each other with timely and reasonably detailed updates with respect to all material developments, consult with each other before taking any
significant actions in connection therewith and offer each other the opportunity to comment before submitting to any Governmental Entity or adverse party any written materials prepared or furnished in connection with such Claim. 

Section 2.12 Merger Consideration Savings Amount. If any portion of the Merger Consideration is not paid to pre-Take Private Closing stockholders of the Company who exercised their appraisal rights as a result of an appraisal proceeding resulting in an Order valuing the shares of the Company Common Stock at a lower
valuation than the Merger Consideration (such unpaid portion of the Merger Consideration, the “Merger Consideration Savings Amount”), Parent shall be entitled to, and the Company shall pay to Parent, the Homecare Sharing Percentage
of such Merger Consideration Savings Amount, and HospitalCo Parent (directly or indirectly through the Company) shall be entitled to the Hospital Sharing Percentage of such Merger Consideration Savings Amount. 

Section 2.13 Pre-Closing Restructuring Actions. After the date hereof and prior to the
Take-Private Closing, the Company shall (and shall cause its Subsidiaries to) undertake each of the following actions and transactions (collectively, the “Pre-Closing Restructuring Actions”):


  
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 (a) SHC Holding, Inc. shall distribute and assign all of the equity interests held by it in SHC
Rehab LLC (after the conversion of SHC Rehab, Inc. into a Delaware limited liability company) to PF Development 21, L.L.C., and (ii) thereafter, PF Development 21, L.L.C. shall distribute and assign all of the equity interests held by it in SHC
Rehab LLC to Kindred Rehab Services LLC (after the conversion of Kindred Rehab Services Inc. to a Delaware limited liability company); and 

(b) KAH Development 3, L.L.C. shall distribute and assign all of the equity interests held by it in Silver State ACO, LLC to Kindred Rehab
Services LLC (after the conversion of Kindred Rehab Services Inc. to a Delaware limited liability company). 
 The Company shall (and shall
cause its Subsidiaries to) execute such instruments of distribution, assignment and transfer or other documents and take such other actions, in each case as are reasonably necessary, to implement and consummate the
Pre-Closing Restructuring Actions. 
 ARTICLE III 

Employee Benefits; Labor Matters 

Section 3.01 Employee Transfers. Following the Take-Private Closing and effective simultaneously with the consummation of the
transactions contemplated by Section 1.04 of this Agreement, the employment of (a) all of the Homecare Employees who are not at that time employed by one of the Homecare Entities and (b) all of the Transferring
Employees shall be transferred to one or more of the HomecareCo Group Members designated in the Transition Plan. HospitalCo Parent and Parent shall identify the Transferring Employees no later than 45 days prior to the Hospital Merger Closing.
HospitalCo Parent and Parent agree to use, or to cause the Company to use, reasonable best efforts to execute, and to seek to have the applicable Homecare Employees and Transferring Employees execute, such documentation, if any, as may be reasonably
determined to be necessary to reflect the transfer of employment described in this Section 3.01. Parent and HospitalCo Parent agree that no Homecare Employee or Transferring Employee will be covered by the terms of a
collective bargaining agreement. The Parties agree that except to the extent required by applicable Law or the terms of any Benefit Plan, the transfers described in this Section 3.01 shall in no event be deemed a severance
or termination of employment of any employee for purposes of any plan, policy, practice or arrangement. 

  
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 Section 3.02 Transfer of Homecare Benefit Plans. Following the Take-Private Closing
and effective simultaneously with the consummation of the transactions contemplated by Section 1.04 of this Agreement, Parent shall assume, or shall cause the applicable Homecare Entity designated in the Transition Plan for
such purpose to assume, all assets, rights, liabilities and obligations of and relating to the Homecare Benefit Plans. In the event that the consent of any Person is required as a condition to any such assumption, the Parties shall use reasonable
best efforts to obtain such consent; provided, that if such consent is not obtained, such Homecare Benefit Plan shall not be so assumed. HospitalCo Parent and Parent shall cooperate reasonably and in good faith with respect to the
establishment of any Benefit Plans for the HomecareCo Group that the HomecareCo Group determines to be reasonably necessary to replace the applicable Benefit Plans in which the Homecare Employees or Transferring Employees participate that are not
Homecare Benefit Plans. 
 Section 3.03 Treatment of Legacy Short-Term and Long-Term Cash Compensation Awards. Without limiting
the generality of Section 1.04(b)(ii) of this Agreement, effective simultaneously with the consummation of the transactions contemplated by Section 1.04 of this Agreement, all assets, rights,
liabilities and obligations of and relating to the Homecare STIP Awards, Homecare LTIP Awards, Homecare Retention Awards, and Homecare Converted Equity Awards shall be assumed by one or more Homecare Entities designated in the Transition Plan for
such purpose. In connection with the assumption of the Homecare STIP Awards, the performance goals applicable to the Homecare STIP Awards shall be modified to give effect to such transactions as agreed to by the Company and the Consortium Parties
(such agreement not to be unreasonably withheld) and provided in the Transition Plan. 
 Section 3.04 Section 7.07 of Merger
Agreement. Parent and HospitalCo Parent acknowledge and agree that they are bound by the obligations set forth in Section 7.07 of the Merger Agreement and nothing contained in this Agreement, including this Article III, is intended
in any way to expand, diminish, amend, modify or supersede any such obligation. 
 ARTICLE IV 

Conditions Precedent 

Section 4.01 Conditions to Each Party’s Obligation to Effect the Separation Transactions. The obligation of
each Party to consummate the Separation Transactions is subject to the consummation of the Take-Private Closing in accordance with the terms of the Merger Agreement. 

Section 4.02 Conditions to Obligations of Each of Parent, HospitalCo Parent and Hospital Merger Sub. The obligations of each of
Parent, HospitalCo Parent and Hospital Merger Sub to consummate the Separation Transactions are further subject to 

  
 22 








 
the Company having performed and complied with in all material respects all obligations, agreements and covenants that it is required under this Agreement to be performed or complied with at or
prior to the Take-Private Closing (provided that any obligations, agreements and covenants that are required under this Agreement to be performed or complied with by the Company prior to the Hospital Merger Closing (other than the completion of the
Separation Transactions) shall be deemed to be required to be performed prior to the Take-Private Closing), and Hospital Merger Sub having received a certificate, dated as of the Closing Date and signed by the chief executive officer or chief
financial officer of the Company, certifying as to such matters; provided that this condition may be waived in writing by Parent. 

ARTICLE V 
 Termination,
Amendment and Waiver 
 Section 5.01 Termination by Mutual Consent. This Agreement may be terminated at any time prior to
the Take-Private Closing by mutual written consent of Parent, Hospital Merger Sub and the Company. 
 Section 5.02 Termination By
Parent, Hospital Merger Sub or the Company. This Agreement may be terminated by any of Parent, Hospital Merger Sub or the Company at any time prior to the Take-Private Closing if the Merger Agreement has been terminated in accordance with its
terms. 
 Section 5.03 Termination by Hospital Merger Sub or Parent. This Agreement may be terminated by Hospital Merger Sub or
Parent at any time prior to the Take-Private Closing if the Company shall have breached or failed to perform any of its covenants or agreements, which breach or failure to perform (a) would give rise to the failure of a condition set forth in
Section 4.02 if it was continuing as of the Closing Date and (b) cannot be cured by the Company or, if capable of being cured, shall not have been cured by the earlier of (i) the End Date and (ii) the date
that is thirty (30) days following receipt of written notice from Hospital Merger Sub or Parent describing such breach or failure in reasonable detail; provided that neither Hospital Merger Sub nor Parent shall have the right to
terminate this Agreement pursuant to this Section 5.03 if (A) such breach or failure to perform by the Company is directly caused by, or the direct result of, any breach, failure to perform or delay in the performance of any of the
covenants or agreements required to be performed by any Consortium Party under this Agreement or (B) any Consortium Party is otherwise then in material breach of any of its covenants or agreements set forth in this Agreement. 

Section 5.04 Effect of Termination. The Party desiring to terminate this Agreement pursuant to this Article V (other than
pursuant to Section 5.01) shall deliver written notice of such termination to each other Party hereto specifying with particularity the reason for such termination. If this Agreement is terminated
pursuant 

  
 23 








 
to and in accordance with this Article V, it will become void and of no further force and effect, with no liability on the part of any party to this Agreement (or any stockholder,
director, officer, employee, agent or Representative of such Party) to any other party hereto; provided, however, that (i) the provisions of this Section 5.04 and Article VIII (and any
related definitions contained in any such sections or Article) shall survive such termination and remain in full force and effect, and (ii) nothing in this Section 5.04 shall be construed to limit Section 9.05 of
the Merger Agreement. 
 Section 5.05 Amendment. Any provision of this Agreement may be amended or waived at any time prior to
the Take-Private Closing if, but only if, such amendment or waiver is in writing and signed, in the case of an amendment, by each of the Parties hereto or, in the case of a waiver, by each Party against whom such waiver is to be effective;
provided that (i) no amendment to or waiver of Section 1.06(b)(ii) shall be permitted from and after the Take-Private Closing, and (ii) the schedules to this Agreement may be amended by an amendment in
writing signed by each of the Consortium Parties unless such amendment would prevent, impede or delay the Take-Private Merger or the solvency of either the HospitalCo Group or the HomecareCo Group in any way. No failure or delay by any Party hereto
in exercising any right under this Agreement shall operate as a waiver of such right nor shall any single or partial exercise thereof preclude any other or future exercise of any other right under this Agreement. 

Section 5.06 Expenses. Except as otherwise expressly set forth in this Agreement (including
Section 2.01) or the Merger Agreement (including in Sections 7.08, 7.09, 7.15, 7.16 and 7.18 of the Merger Agreement), all fees and expenses incurred by or on behalf of Party hereto in connection with the authorization,
preparation, negotiation, execution and performance of this Agreement and any of the transactions contemplated hereby shall be paid by the Party incurring such expenses. 

ARTICLE VI 
 Indemnification

 Section 6.01 Survival. All of the covenants and agreements of the Parties contained in this Agreement that, by their
terms, are to be performed or complied with in their entirety at or prior to the Hospital Merger Closing, and all Claims with respect thereto, shall terminate at and as of the Hospital Merger Closing. All of the covenants and agreements of the
Parties contained in this Agreement that, by their terms, are to be performed or complied with in whole or in part after the Hospital Merger Closing, and all Claims with respect thereto, shall survive the Hospital Merger Closing and continue until
60 days after the last date on which such covenant is, by its express terms, to be performed (or, if no such date is expressly specified, until the expiration of the applicable statute of limitations plus 60 days). The indemnification obligations of
the HospitalCo Parent under Section 6.02(a) and the indemnification obligations of the 

  
 24 








 
HomecareCo Group under Section 6.02(b) shall survive indefinitely, until the expiration of the applicable statute of limitations plus 60 days, except that the
indemnification obligations under Section 6.02(b)(iv) shall expire and be of no further force and effect as of the Put/Call Closing Date (if any); . Notwithstanding the foregoing, if a Claim Notice with respect to a Claim
for indemnification under Section 6.02 (other than under Section 6.02(b)(iv)) has been delivered pursuant to Section 6.03 prior to the expiration of the applicable
survival period set forth in this Section 6.01, all rights to indemnification under this Article VI (and any other relevant provisions of this Agreement) with respect to the covenants or agreements that are the
subject of such Claim Notice shall survive with respect to the matters set forth in such Claim Notice until such Claim is finally and fully resolved. This Section 6.01 shall operate as a contractual statute of limitations.

 Section 6.02 Indemnification. 

(a) From and after the Hospital Merger Closing, subject to the other provisions of this Article VI, HospitalCo Parent shall indemnify,
pay and reimburse the HomecareCo Group, its Affiliates and its and their respective Representatives (collectively, the “HomecareCo Group Indemnified Persons”) for, and defend and hold the HomecareCo Group Indemnified Persons
harmless from and against, any and all Losses actually paid or incurred by any HomecareCo Group Indemnified Persons as a result of or related to: 

(i) any breach after the Hospital Merger Closing of any covenant or agreement of the HospitalCo Group Members required to be
performed or complied with after the Hospital Merger Closing set forth in this Agreement or any Ancillary Agreement (other than the Transition Service Agreement); 

(ii) any Retained Liabilities, whether arising before or after the Hospital Merger Closing, including the failure of the
HospitalCo Group Members or any other Person to pay, perform, fulfill, discharge or, to the extent applicable, comply with, in due course and in full, any Retained Liabilities; and 

(iii) any Shared Company Transaction Liabilities (to the extent outstanding after the Hospital Merger Closing) that the
HomecareCo Group would otherwise be liable for in excess of the Homecare Sharing Percentage of such Shared Company Transaction Liabilities. 

(b) From and after the Hospital Merger Closing, subject to the other provisions of this Article VI, Parent shall indemnify, pay and
reimburse the HospitalCo Group, its Affiliates and its and their respective Representatives (collectively, the “HospitalCo Group Indemnified Persons”) for, and defend and hold the HospitalCo Group Indemnified Persons harmless from
and against, any and all Losses actually paid or incurred by any HospitalCo Group Indemnified Person as a result of or related to: 

  
 25 








 (i) any breach after the Hospital Merger Closing of any covenant or agreement of
the HomecareCo Group Members required to be performed or complied with after the Hospital Merger Closing set forth in this Agreement and any Ancillary Agreement (other than the Transition Service Agreement); 

(ii) any Assumed Homecare Liabilities, including the failure of the Homecare Entities or any other Person to pay, perform,
fulfill, discharge or, to the extent applicable, comply with, in due course and in full, any Assumed Homecare Liabilities; 

(iii) any Shared Company Transaction Liabilities (to the extent outstanding from and after the Hospital Merger Closing) that
the HospitalCo Group would otherwise be liable for in excess of the Hospital Sharing Percentage of such Shared Company Transaction Liabilities; 

(iv) the Assumed Share of NCD/ALF Claims Tail, but only to the Losses in respect of Assumed Share of NCD/ALF Claims Tail have
been actually paid by a HospitalCo Group Indemnified Person prior to the Put/Call Closing Date; and 
 (v) any Homecare
Taxes. 
 Section 6.03 Indemnification Procedures. 

(a) Any Person seeking indemnification under Section 6.02 (each, an “Indemnified Person”) shall
assert any Claim for indemnification, including any Claim brought by a Third Party (a “Third Party Claim”), by delivering written notice thereof (a “Claim Notice”) in accordance with
Section 6.03 to the Party from which indemnification is sought pursuant to Section 9.02 (the “Indemnifying Party”) as soon as reasonably practicable upon becoming aware of any fact
or circumstance that may give rise to an indemnification Claim under Section 6.02, provided, that the failure to give such notice shall not eliminate the right to indemnification provided hereunder except, and solely
to the extent that, the Indemnifying Party shall have been actually and materially prejudiced as a result of such failure. Each Claim Notice shall describe in reasonable detail the nature of the Claim, shall reference the provision or provisions of
this Agreement under which the Claim is asserted and, if applicable, the applicable sections of this Agreement which are alleged to have been breached by the Indemnifying Party, and attach copies of all material written evidence thereof that the
Indemnified Person has received from any Person that is not a Party or a Person Affiliated with a Party (a “Third Party”). The date of delivery of such Claim Notice is referred to herein as the “Claim Date.” If the
Indemnifying Party objects to any Claims within such Claim Notice, such objection must be made in writing delivered to the Indemnified Person within thirty (30) days after the Claim Date (the “Objection Notice”). The
Indemnified Person and the Indemnifying Party shall attempt to resolve any dispute for a period of thirty (30) days from the date of 

  
 26 








 
the delivery of the Objection Notice to the Indemnified Person and thereafter, such dispute may be resolved in the manner contemplated by Section 8.02. If a Claim Notice
was delivered to the Indemnifying Party and no Objection Notice was delivered to the Indemnified Person within thirty (30) days after the Claim Date, then the Indemnifying Party shall be deemed to have irrevocably agreed to pay the Losses at
issue in the Claim Notice, subject to the terms and conditions set forth herein. 
 (b) Subject to the terms of this
Section 6.03(b), the Indemnified Party shall permit the Indemnifying Party, at the Indemnifying Party’s option and expense, to assume the complete defense of any Third Party Claim with full and exclusive authority to
conduct such defense and to settle or otherwise dispose of the same and the Indemnified Party will fully cooperate in such defense; provided that HospitalCo Parent (and/or one or more of its designated HospitalCo Group Members) shall be the
Controlling Party with respect to any Third Party Claim relating to any Shared Company Transaction Liability, and the reasonable costs and expenses of such defense incurred by the HospitalCo Group Members shall be deemed to be Shared Company
Transaction Liabilities. For purposes of this Section 6.03, the Persons controlling the defense of any Third Party Claim shall be referred to as the “Controlling Party”, and the applicable Persons not
controlling such defense shall be referred to as the “Non-Controlling Party”. Notwithstanding anything to the contrary, no Controlling Party may settle or compromise, or consent to the entry
of any Order with respect to (i) any Third Party Claim (other than a Third Party Claim relating to a Shared Company Transaction Liability) without the prior written consent of the Non-Controlling Party
(which must not be unreasonably withheld or delayed) if such settlement, compromise or consent to such Order (1) includes any form of relief (other than the payment of money) binding upon the
Non-Controlling Party, or (2) does not include an unconditional and full release given by the Third Party to the Non-Controlling Party from all Liability in respect
of such Claim, and (ii) any Third Party Claim relating to a Shared Company Transaction Liability without the prior written consent of Parent (as the Non-Controlling Party) (which must not be unreasonably
withheld or delayed) if such settlement, compromise or consent to such Order (1) includes any form of relief (other than the payment of money) binding upon any HomecareCo Group Member, (2) involves the payment of money in an aggregate
amount in excess of $5,000,000, or (3) does not include an unconditional and full release given by the Third Party to any HomecareCo Group Members from all Liability in respect of such Claim. The
Non-Controlling Party shall be entitled to participate in (but not control) such investigation, prosecution, defense and appeal with counsel reasonably acceptable to the Controlling Party at such Non-Controlling Party’s sole cost and expense. HospitalCo Parent and Parent shall, and shall cause their respective Subsidiaries to, use reasonable best efforts to cooperate in the defense of any Third Party
Claim and keep each other informed of all developments relating to any such Third Party Claim. 

  
 27 








 (c) Notwithstanding anything in this Section 6.03 to the contrary,
Article VII shall govern for purposes of any Third Party Claim that is a Tax Claim. 
 Section 6.04 Limitations on
Indemnification. 
 (a) The Indemnifying Party shall be subrogated to any right, defense or Claim that the Indemnified Person may have
against any other Person with respect to any matter giving rise to a Claim for indemnification hereunder. Such Indemnified Person shall cooperate with the Indemnifying Party in a reasonable manner, at the sole cost and expense of the Indemnifying
Party, in presenting any subrogated right, defense or Claim. 
 (b) All indemnifiable Losses shall be determined net of any amounts actually
recovered by the Indemnified Person under insurance policies (including the SNF R&W Policy) with respect to such Losses, such amounts actually recovered to be net of reasonable and documented out-of-pocket costs of collection and any retrospective or prospective premium increase to the extent attributable or reasonably relating to any such claim thereunder as reasonably demonstrated by the
Indemnifying Party. 
 (c) All indemnifiable Losses shall be determined without duplication of recovery under other provisions of this
Agreement or the Ancillary Agreements. Without limiting the generality of the prior sentence, if a set of facts, conditions or events constitutes a breach of more than one representation, warranty, covenant or agreement of this Agreement that is
subject to an indemnification obligation under this Article VI, only one recovery of indemnifiable Losses shall be allowed with respect to such set of facts, conditions or events, and in no event shall there be any indemnification or
duplication of payments or recovery under different provisions of this Agreement arising out of the same set of facts, conditions or events. 

(d) No Party shall have any right to off-set or set-off any
payment due pursuant to this Article VI. 
 (e) The HomecareCo Group and the HospitalCo Group agree to treat, and to cause their
respective Affiliates to treat, for all Tax purposes, any payment made under this Article VI and Article VII, to the maximum extent permitted by applicable Law, as an adjustment to the Hospital Merger Consideration. 

ARTICLE VII 
 Tax Matters

 Section 7.01 Tax Returns. 

(a) From and after the Hospital Merger Closing, except as provided in Section 2.04(c) and Section 7.06,
HospitalCo Parent shall prepare and timely file, or shall cause 

  
 28 








 
to be prepared and timely filed, any Tax Return that includes a Pre-Closing Tax Period and relates solely to the Retained Business. Parent shall prepare
and timely file, or shall cause to be prepared and timely filed, any other Tax Return that includes a Pre-Closing Tax Period. Subject to any indemnity obligations pursuant to Article VI, each party
responsible for the preparation of a Tax Return under this Section 7.01 shall timely remit, or cause to be timely remitted, all Taxes due in respect of such Tax Returns. All such Tax Returns shall be prepared in a manner
consistent with past practices, except as otherwise required by applicable Law. Neither HospitalCo Parent nor Parent shall, and each shall not cause its Affiliates to, amend or revoke any Tax Return (or any notification or election relating thereto)
that reflects or includes Taxes for which the other Party may be liable under Article VI without the prior written consent of the other Party (which consent shall not be unreasonably withheld, conditioned or delayed). 

(b) HospitalCo Parent shall submit each Tax Return it is responsible for pursuant to Section 7.01(a) to Parent
(together with schedules, statements and, to the extent requested by Parent, supporting documentation) at least thirty (30) days prior to the due date (including extensions) of such Tax Return if such Tax Return requires a payment by Parent or
could reasonably be expected to have a material Tax effect on Parent. Following resolution of the procedures described in Section 20.1 of the Homecare JV Agreement, HospitalCo Parent shall file such Tax Return in accordance with such
resolution. If the procedures described in Section 20.1 of the Homecare JV Agreement have not been resolved with respect to such Tax Return at least five (5) days prior to the due date therefor, such Tax Return shall be filed as prepared
by HospitalCo Parent and amended to reflect such resolution. 
 Section 7.02 Tax Contests. Parent shall promptly notify
HospitalCo Parent in writing upon receipt by Parent or any of its Subsidiaries of notice of any Tax audits, examinations or assessments that could give rise to a liability for which HospitalCo Parent is responsible under Article VI of this
Agreement, provided that Parent’s failure so to notify HospitalCo Parent shall not limit Parent’s rights under Article VI except to the extent HospitalCo Parent is materially prejudiced by such failure. HospitalCo Parent
shall promptly notify Parent in writing upon receipt by HospitalCo Parent or any of its Subsidiaries of notice of any Tax audits, examinations or assessments that could give rise to a liability for which Parent is responsible under Article VI
of this Agreement, provided that HospitalCo Parent’s failure so to notify Parent shall not limit HospitalCo Parent’s rights under Article VI except to the extent Parent is materially prejudiced by such failure. Except as
otherwise provided herein, (a) Parent shall control any Tax audit, examination or proceeding that concerns a Tax Return or a Tax matter that relates solely to a Homecare Entity or that relates primarily to a Homecare Entity and would not
reasonably be expected to result in an adjustment which, disregarding any net operating loss deduction, would result in an increase in Tax to a Hospital Entity in excess of $3,000,000, (b) HospitalCo Parent shall control any Tax audit, examination
or proceeding that concerns a Tax Return or a Tax matter that relates 

  
 29 








 
solely to a Hospital Entity or that relates primarily to a Hospital Entity and would not reasonably be expected to result in an adjustment which, disregarding any net operating loss deduction,
would result in an increase in Tax of Homecare Entity in excess of $3,000,000 and (c) for any Tax audit, examination or proceeding not described in clauses (a) or (b) above, the Parties shall exercise joint control of such Tax audit,
examination or proceeding. 
 Section 7.03 Cooperation and Exchange of Information. Parent and HospitalCo Parent shall (and
shall cause their respective Affiliates to) (a) provide the other party and its Affiliates with such assistance as may be reasonably requested in connection with the preparation and filing of any Tax Return or claim for refund, the
determination of a tax liability for Taxes or a right to refund of Taxes or the conduct of any audit or other examination by any taxing authority or any judicial or administrative proceeding relating to Taxes and (b) retain (and provide the
other party and its Affiliates with reasonable access to) all records or information which may be relevant to such Tax Return, claim for refund, Tax determination, audit, examination or proceeding. Such cooperation and information shall include
providing copies of all relevant Tax Returns, together with accompanying schedules and related workpapers, documents relating to rulings or other determinations made by taxing authorities and records concerning the ownership and tax basis of
property, which either party may possess. Each party shall make its employees available on a mutually convenient basis to provide explanation of any documents or information provided hereunder. Except as otherwise provided in this Agreement, the
party requesting assistance hereunder shall reimburse the other for any reasonable out of pocket costs incurred in providing any Tax Return, document or other written information, and shall compensate the other for any reasonable costs (excluding
wages and salaries and related costs) of making employees available, upon receipt of reasonable documentation of such costs. Any information obtained under this Section 7.03 shall be kept confidential, except as may be
otherwise necessary in connection with the filing of Tax Returns or claims for refund or in conducting any audit, examination or other proceeding. Parent and HospitalCo Parent agree that the sharing of information and cooperation contemplated by
this Section 7.03 shall be done in a manner so as not to interfere unreasonably with the conduct of the business of the parties. 

Section 7.04 Tax Agreements. Prior to or at the Hospital Merger Closing, the Company shall terminate all Tax Agreements such that
neither the Company nor any of its Subsidiaries shall have any obligations thereunder following the Hospital Merger Closing. The Company shall cause any and all existing powers of attorney with respect to Taxes or Tax Returns to which the Company or
any of its Subsidiaries is a party to be terminated as of the Hospital Merger Closing. 

  
 30 








 Section 7.05 Payments, Refunds, Credits and Carrybacks. 

(a) All refunds of Taxes (including interest actually received thereon from a relevant taxing authority) for which Parent is responsible
pursuant to Article VI (including, for the avoidance of doubt, any portion for which Parent is responsible under Section 6.02(b)(iii)) shall be for the account of Parent, and HospitalCo Parent shall pay such amounts
less HospitalCo Parent’s out-of-pocket expenses incurred in connection with obtaining such refund and less any Taxes incurred by HospitalCo Parent, its equity
owners, its Affiliates, the Company or any of its Subsidiaries in connection with the receipt of such refund or interest to Parent if such refunds are received by HospitalCo Parent, the Company or any of its Subsidiaries. All refunds of Taxes
(including interest actually received thereon from a relevant taxing authority) for which HospitalCo Parent is responsible pursuant to Article VI (including, for the avoidance of doubt, any portion for which Parent is responsible under
Section 6.02(b)(iii)) shall be for the account of HospitalCo Parent, and Parent shall pay such amounts less Parent’s out-of-pocket
expenses incurred in connection with obtaining such refund and less any Taxes incurred by Parent, its Affiliates, or any of its Subsidiaries in connection with the receipt of such refund or interest to HospitalCo Parent if such refunds are received
by Parent or any of its Subsidiaries. 
 Section 7.06 Transfer Taxes. Notwithstanding anything to the contrary in this
Agreement, each of Parent and HospitalCo Parent shall be responsible for the Homecare Sharing Percentage and the Hospital Sharing Percentage, respectively, of any Transfer Taxes and related fees imposed on or payable in connection with the
transactions contemplated by this Agreement. The Party responsible under applicable Law for filing the Tax Returns with respect to such Transfer Taxes shall prepare and timely file such Tax Returns and promptly provide a copy of such Tax Return to
the other Party. Parent and HospitalCo Parent shall, and shall cause their respective Affiliates to, cooperate to timely prepare and file any Tax Returns or other filings relating to such Transfer Taxes, including any claim for exemption or
exclusion from the application or imposition of any Transfer Taxes. 
 Section 7.07 Purchase Price Allocation. HospitalCo Parent
shall deliver to Parent within fifty-five (55) days after the Closing Date a proposed allocation of the purchase price for Tax purposes among (a) the Company Interests of any Hospital Entities classified as associations taxable as
corporations for U.S. federal income tax purposes and (b) the assets acquired in the Hospital Merger that are not described in clause (a) above for Tax reporting purposes (the “Preliminary Allocation”). The Preliminary
Allocation shall be made in a manner consistent with the requirements of Section 1060 of the Code and Treasury Regulations thereunder, based upon a reasonable determination of the respective fair market values of those assets. Following
resolution of the procedures described in Section 20.4 of the Homecare JV Agreement, HospitalCo Parent and Parent shall set forth such resolution in a signed 

  
 31 








 
written document (the “Final Allocation”), and HospitalCo Parent and Parent shall, and shall cause their respective Affiliates to, complete and timely file any necessary Tax
forms, and their respective income Tax Returns, in accordance with the Final Allocation (as modified from time to time by any adjustments to the purchase price for Tax purposes). 

Section 7.08 Agreed Tax Treatment of the Hospital Merger. The Parties agree for U.S. income tax purposes to treat the Hospital
Merger as an acquisition of the assets constituting the Retained Business from Homecare Intermediate in exchange for the Hospital Merger Consideration and other relevant items. 

Section 7.09 Tax Matters Coordination and Survival. Notwithstanding anything to the contrary in this Agreement, to the extent of
any inconsistency between this Article VII and Article VI, this Article VII shall control as to Tax matters. 

Section 7.10 FIRPTA Certificate. Prior to the Hospital Merger Closing, Homecare Intermediate shall deliver to HospitalCo Parent a
statement meeting the requirements of Section 1.1445-(b)(2) of the Treasury Regulations to the effect that Homecare Intermediate is not a “foreign person” within the meaning of Section 1445 of the Code and the Treasury
Regulations thereunder. 
 ARTICLE VIII 

General Provisions 

Section 8.01 Governing Law This Agreement, and all claims or causes of action (whether at law or in equity, in contract or in
tort, or otherwise) that may be based upon, arise out of or relate to this Agreement or the negotiation, execution or performance hereof, shall be governed by and construed in accordance with the laws of the State of Delaware without giving effect
to any choice or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of Laws of any jurisdiction other than those of the State of Delaware. 

Section 8.02 Submission to Jurisdiction. Each of the Parties irrevocably agrees that any legal action or proceeding with respect
to this Agreement and the rights and obligations arising hereunder, or for recognition and enforcement of any judgment in respect of this Agreement and the rights and obligations arising hereunder brought by any other Party or its successors or
assigns shall be brought and determined exclusively in the Chancery Court of the State of Delaware and any state appellate court therefrom within the State of Delaware, or in the event (but only in the event) that such court does not have subject
matter jurisdiction over such action or proceeding, in any state or federal court located within the State of Delaware. Each of the Parties agrees that mailing of process or other papers in connection with any such action or proceeding in the manner
provided in Section 8.04 or in such other manner as may be permitted by 

  
 32 








 
applicable Laws, will be valid and sufficient service thereof. Each of the Parties hereby irrevocably submits with regard to any such action or proceeding for itself and in respect of its
property, generally and unconditionally, to the personal jurisdiction of the aforesaid courts and agrees that it will not bring any action relating to this Agreement or any of the transactions contemplated by this Agreement in any court or tribunal
other than the aforesaid courts. Each of the Parties hereby irrevocably waives, and agrees not to assert, by way of motion, as a defense, counterclaim or otherwise, in any action or proceeding with respect to this Agreement and the rights and
obligations arising hereunder, or for recognition and enforcement of any judgment in respect of this Agreement and the rights and obligations arising hereunder (i) any claim that it is not personally subject to the jurisdiction of the above
named courts for any reason other than the failure to serve process in accordance with this Section 8.02, (ii) any claim that it or its property is exempt or immune from jurisdiction of any such
court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise), and (iii) to the fullest extent
permitted by the applicable Law, any claim that (x) the suit, action or proceeding in such court is brought in an inconvenient forum, (y) the venue of such suit, action or proceeding is improper, or (z) this Agreement, or the subject
matter hereof, may not be enforced in or by such courts. 
 Section 8.03 Waiver of Jury Trial. EACH PARTY ACKNOWLEDGES AND
AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES AND, THEREFORE, EACH SUCH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LEGAL ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY TO THIS AGREEMENT CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT SEEK TO ENFORCE THE FOREGOING WAIVER IN THE EVENT OF A LEGAL ACTION, (B) SUCH PARTY HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) SUCH
PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 8.03. 

Section 8.04 Notices. All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in
writing and shall be deemed to have been given (a) when delivered by hand (with written confirmation of receipt), (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested), (c) on the
date sent by facsimile or e-mail of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, or 

  
 33 








 
on the next Business Day if sent after normal business hours of the recipient, or (d) on the third day after the date mailed, by certified or registered mail, return receipt requested,
postage prepaid. Such communications must be sent to the respective Parties at the following addresses (or at such other address for a Party as shall be specified in a notice given in accordance with this Section 8.04):

  

			
	If to the Company, prior to the effective time of the Take-Private Merger, to:	  	 Kindred Healthcare, Inc.
 680 South Fourth
Street
 Louisville, Kentucky 40202
 Facsimile: (866) 866-3426
 Attention: Joseph L. Landenwich

		
	with a copy (which will not constitute notice to the Company) to:	  	 Cleary Gottlieb Steen & Hamilton LLP

One Liberty Plaza
 New York, New York 10006

Facsimile: (212) 225-3999

Attention: Benet J. O’Reilly; Paul M. Tiger
 E-mail: boreilly@cgsh.com; ptiger@cgsh.com

		
	If to the Company, after the effective time of the Take-Private Merger, to:	  	 Kindred Healthcare, Inc.
 680 South Fourth
Street
 Louisville, Kentucky 40202
 Facsimile: (866) 866-3426
 Attention: Joseph L. Landenwich




  
 34 









			
	with a copies (which will not constitute notice to the Company) to:	  	 Kentucky Homecare Holdings, Inc.
 301 Commerce
Street
 Suite 3300
 Fort Worth, TX 76102

Attention: Adam Fliss

E-mail: afliss@tpg.com

Facsimile: (415) 438-6893
  

and
  

Debevoise & Plimpton LLP
 919 Third Avenue

New York, New York 10022
 Facsimile: (212) 521-7323
 Attention: Andrew L. Bab; Jennifer L. Chu

E-mail: albab@debevoise.com;

jlchu@debevoise.com

		
	If to HospitalCo Parent or Hospital Merger Sub, to:	  	 Kentucky Hospital Holdings, LLC
 c/o TPG VII
Management, LLC
 301 Commerce Street
 Suite 3300

Fort Worth, TX 76102
 Attention: Adam Fliss

E-mail: afliss@tpg.com

Facsimile: (415) 438-6893

		
	with a copy (which will not constitute notice to HospitalCo Parent or Hospital Merger Sub) to:	  	 Debevoise & Plimpton LLP
 919 Third
Avenue
 New York, New York 10022
 Facsimile: (212) 521-7323
 Attention: Andrew L. Bab; Jennifer L. Chu

E-mail: albab@debevoise.com;

jlchu@debevoise.com




  
 35 









			
	If to Parent, to:	  	 Kentucky Homecare Holdings, Inc.
 c/o TPG VII
Management, LLC
 301 Commerce Street
 Suite 3300

Fort Worth, TX 76102
 Attention: Adam Fliss

E-mail: afliss@tpg.com

Facsimile: (415) 438-6893

		
	with copies (which will not constitute notice to Parent) to:	  	 Debevoise & Plimpton LLP
 919 Third
Avenue
 New York, New York 10022
 Facsimile: (212) 521-7323
 Attention: Andrew L. Bab; Jennifer L. Chu

E-mail: albab@debevoise.com;

jlchu@debevoise.com
  

and
  

Fried, Frank, Harris, Shriver & Jacobson LLP
 One New
York Plaza
 New York, NY 10004
 Attention: Philip Richter

Facsimile: (212) 859-4000
  

and

		
		  	 Fried, Frank, Harris, Shriver & Jacobson LLP

801 17th Street, NW
 Washington, DC 20006

Attention: Brian T. Mangino
 Facsimile: (202) 639-7003



 or to such other Persons, addresses or facsimile numbers as may be designated in writing by the Person
entitled to receive such communication as provided above. 
 Section 8.05 Entire Agreement. The Merger Agreement, this Agreement
(including the Exhibits to this Agreement), the Company Disclosure Letter, the Confidentiality Agreements and the Clean-Team Confidentiality Agreements (as such terms are defined in the Merger Agreement), and the Ancillary Agreements constitute the
entire agreement among the Parties with respect to the subject matter of this 

  
 36 








 
Agreement and supersede all other prior agreements and understandings, both written and oral, among the Parties with respect to the subject matter of this Agreement. In the event of any
inconsistency between the statements in the body of this Agreement and the Company Disclosure Letter, the statements in the body of this Agreement will control. 

Section 8.06 No Third Party Beneficiaries Except for the right of the Indemnified Parties to enforce the provisions of
Section 2.03(b), Section 2.03(d), Article VI, Article VII and this Section 8.06, which are intended to be for the benefit
of the Indemnified Parties, this Agreement is for the sole benefit of the Parties and their permitted assigns and respective successors and nothing herein, express or implied, is intended to or shall confer upon any other Person or entity any legal
or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement. 
 Section 8.07
Severability. If any term or provision of this Agreement is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Agreement or invalidate or
render unenforceable such term or provision in any other jurisdiction. Upon such determination that any term or other provision is invalid, illegal or unenforceable, the Parties shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the Parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible. 

Section 8.08 Assignment; Binding Effect. Neither this Agreement nor any of the rights, interests or obligations hereunder shall be
assigned or delegated by any of the Parties without the prior written consent of (a) the Company (in the case of an assignment by any of HospitalCo Parent, Hospital Merger Sub or Parent) or (b) HospitalCo Parent, Hospital Merger Sub and
Parent (in the case of an assignment by the Company); provided that Parent, HospitalCo Parent and Hospital Merger Sub may, upon prior written notice to the Company, assign any of its rights, interests or obligations hereunder to an Affiliate
without the prior written consent of the Company; provided, further, that no assignment by Parent, HospitalCo Parent or Hospital Merger Sub to an Affiliate shall be permitted if such assignment would prevent, impede or delay the
consummation of the Closing. No assignment shall relieve the assigning Party of any of its obligations hereunder. Subject to the first sentence of this Section 8.08, this Agreement shall be binding upon
and shall inure to the benefit of the Parties and their respective successors and permitted assigns. Any purported assignment not permitted under this Section 8.08 shall be null and void. 

Section 8.09 Remedies. Except as otherwise provided in this Agreement, any and all remedies expressly conferred upon a Party to
this Agreement will be cumulative with, and not exclusive of, any other remedy contained in this Agreement, at Law or in equity. The exercise by a Party to this Agreement of any one remedy will not preclude the exercise by it of any other remedy.


  
 37 








 Section 8.10 Specific Performance. 

(a) The Parties’ rights in this Section 8.10 are an integral part of the transactions
contemplated by this Agreement and each Party hereby waives any objections to any remedy referred to in this Section 8.10. The Parties agree that irreparable damage would occur in the event that any of
the provisions of this Agreement were not performed, or were threatened to be not performed, in accordance with their specific terms or were otherwise breached, and that money damages would not be an adequate remedy, even if available. It is
accordingly agreed that, in addition to any other remedy that may be available to it, including monetary damages, each of the Parties shall be entitled to an injunction or injunctions to prevent breaches or threatened breaches of this Agreement and
to enforce specifically the terms and provisions of this Agreement exclusively in the Chancery Court of the State of Delaware and any state appellate court therefrom within the State of Delaware, or in the event (but only in the event) that such
court does not have subject matter jurisdiction over such action or proceeding, in any state or federal court within the State of Delaware. In the event any Party seeks any remedy referred to in this
Section 8.10, such Party shall not be required to prove damages or obtain, furnish, provide or post any bond or similar instrument in connection with or as a condition to obtaining any remedy referred
to in this Section 8.10 and each Party waives any objection to the imposition of such relief or any right it may have to require the obtaining, furnishing, providing or posting of any such bond or
similar instrument. 
 Section 8.11 Reliance on Counsel and Other Advisors Each party has consulted such legal, financial,
technical or other expert as it deems necessary or desirable before entering into this Agreement. Each party represents and warrants that it has read, knows, understands and agrees with the terms and conditions of this Agreement. 

Section 8.12 Counterparts; Effectiveness. This Agreement may be executed in any number of counterparts, each of which when
executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. This Agreement shall become effective when each party to this Agreement shall have received counterparts hereof signed by all of
the other parties. Signatures to this Agreement transmitted by facsimile transmission, by electronic mail in “portable document format” (“.pdf”) form, or by any other electronic means intended to preserve the original
graphic and pictorial appearance of a document, will have the same effect as physical delivery of the paper document bearing the original signature. 

  
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 Section 8.13 Interpretation. 

(a) The table of contents and headings herein are for convenience of reference only, do not constitute part of this Agreement and shall not be
deemed to limit or otherwise affect any of the provisions hereof. Where a reference in this Agreement is made to an Article, Section, Exhibit or Schedule, such reference shall be to an Article, Section of, Exhibit to or Schedule of this Agreement
unless otherwise indicated. Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.” The word
“extent” and the phrase “to the extent” used in this Agreement shall mean the degree to which a subject or other thing extends, and such word or phrase shall not mean simply “if”. A reference in this Agreement to $ or
dollars is to U.S. dollars. The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this
Agreement, unless the context otherwise requires, and the phrase “the date hereof” shall mean the date of this Agreement. The word “will” shall be construed to have the same meaning as the word “shall”. The definitions
contained in this Agreement are applicable to the singular as well as the plural form of such terms and to the masculine as well as to the feminine and neuter genders of such terms. References to “this Agreement” shall include the Company
Disclosure Letter. If the last day for the giving of any notice or the performance of any act required or permitted under this Agreement is a day that is not a Business Day, then the time for the giving of such notice or the performance of such
action shall be extended to the next succeeding Business Day. 
 (b) The Parties have participated jointly in negotiating and drafting this
Agreement with the benefit of competent legal representation, and the language used in this Agreement shall be deemed to be the language chosen by the Parties to express their mutual intent. In the event that an ambiguity or a question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provision of this Agreement. 

Section 8.14 Definitions. 

(a) For purposes of this Agreement, each of the following capitalized terms has the meaning specified in this
Section 8.14(a): 
 “Affiliate” means, with respect to any Person, any other Person that
directly or indirectly controls, is controlled by or is under common control with, such first Person. For the purposes of this definition, “control” (including, the terms “controlling,” “controlled by” and “under
common control with”), as applied to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of that Person, whether through the ownership of voting securities, by
Contract or otherwise; provided, that, solely for the purposes of Section 2.03(b), Section 2.03(d), Article VI and Article VII, after the Hospital Merger Closing, the
HomecareCo Group shall not constitute “Affiliates” of the HospitalCo Group and the HospitalCo Group shall not constitute “Affiliates” of the HomecareCo Group. 

  
 39 








 “Ancillary Agreements” means the Transition Services Agreement, Trademark
License Agreement, IP License Agreement, and any other Contract entered into, or any document or certificate delivered in connection with, this Agreement (other than the Merger Agreement). 

“Ancillary IP Rights” means, with respect to any Intellectual Property, any and all of the following in any jurisdiction
throughout the world: (i) all rights to sue and obtain damages, injunctive relief and other remedies for past, present and future infringement, misappropriation, dilution or other violation of such Intellectual Property; (ii) the exclusive
right to apply for, prosecute, obtain, maintain, abandon, and claim priority to any registrations of such Intellectual Property and to control oppositions and all other ex parte and inter partes proceedings relating thereto; and
(iii) with respect to Trademarks, all goodwill associated with and symbolized by such Intellectual Property. 
 “Assumed
Homecare Liabilities” means, except as otherwise provided in the Transition Services Agreement and except with respect to Taxes, (i) all Liabilities of the Company and its Subsidiaries (including the Homecare Entities) to the extent
related to or to the extent arising from the ownership or operation of the Homecare Business or the Transferred Homecare Assets, whether arising prior to, on or after the Homecare Transfers, (ii) Liabilities of the Company and its Subsidiaries
(including the Homecare Entities) in respect of the payment of compensation and provision of employee benefits to any Person who is or was a Homecare Employee or a Transferring Employee, whether arising prior to, on or after the Homecare Transfers
(including any Severance Costs of the Homecare Employees and Transferring Employees), other than the Funded Homecare Benefit Liabilities, and (iii) Liabilities of the Company and its Subsidiaries (including Cornerstone and the Homecare
Entities) to the extent related to or to the extent arising from any workers’ compensation claim by any Homecare Employee or Transferring Employee or any malpractice, professional liability or other general liability claim asserted in respect
of any Homecare Employee or any Transferring Employee or otherwise to the extent related to or to the extent arising from the Homecare Business. 

“Assumed Share of NCD/ALF Claims Tail” means the Homecare Sharing Percentage of all Liabilities of the Company and its
Subsidiaries (including Cornerstone) arising from any workers’ compensation claim by or on behalf of any employee relating to the performance of services for the NCD/ALF Business or any malpractice, professional liability or other general
liability claim to the extent relating to the NCD/ALF Business, whether arising prior to, on or after the Hospital Merger Closing. 

“Benefit Plan” means (i) each “employee benefit plan,” as such term is defined in Section 3(3) of ERISA,
including, without limitation, each “employee pension benefit plan” (as defined in Section 3(2) of ERISA) and each “employee welfare benefit plan” (as defined in Section 3(1) of ERISA) and (ii) each incentive,
bonus, performance award, phantom equity, stock or stock-based arrangements, plans, or programs, employment compensation, deferred compensation, pension, profit sharing, retirement, post-

  
 40 








 
retirement, employment, consulting, severance, termination, change in control, separation, retention, vacation, sickness, life or other insurance, welfare, fringe benefit and incentive bonus
contract, agreement, plan, program, policy or arrangement sponsored, maintained or contributed to by the Company or any of its Subsidiaries as of immediately prior to the transactions contemplated by this Agreement and in which any current or former
Company Employee participates or to which any such individual is subject or a party. 
 “Books and Records” means any and
all documents, instruments, papers, books, records, books of account, files and tangible or electronic embodiments of business information and data, telephone numbers and fax numbers, catalogs, brochures, sales literature, promotional materials,
certificates and other documents. 
 “Business Day” means any day, other than Saturday, Sunday or any day on which
banking institutions located in New York, New York are authorized or required by Law or other governmental action to close. 

“Call” has the meaning given to it in the Homecare JV Agreement. 

“Call Closing” has the meaning given to it in the Homecare JV Agreement. 

“Cash” means, with respect to the Homecare Entities, the aggregate amount of all cash and cash equivalents and marketable
securities of the Homecare Entities as of a given measurement date, as determined in accordance with GAAP, including the amounts of any received but uncleared checks, drafts and wires issued prior to such time, less (i) the amounts of
any issued but uncleared checks, drafts and wires issued prior to such time (other than wires relating to payments made in connection with the Take-Private Closing or Hospital Merger Closing), (ii) any restricted cash, (iii) cash and cash
equivalents held on behalf of third parties, (iv) the amount (if any) by which the aggregate of all Swap Obligations represent an amount payable by the Homecare Entities (or plus the amount (if any) by which the aggregate of all Swap
Obligations represent an amount due to the Homecare Entities), (v) any cash or cash equivalents held by any Non-Controlled Joint Venture or any other non-wholly owned
Homecare Entity, and (vi) any cash or cash equivalents held by any captive insurance Subsidiary of a Homecare Entity. 

“Claim” means any claim, suit, action or proceeding, whether civil, criminal, administrative, or investigative. 

“Company Common Stock” has the meaning given to it in the Merger Agreement. 

“Company Employee” on any date means an employee of the Company or any of its Subsidiaries on such date. A “former
Company Employee” on any date means an individual who was a Company Employee but whose employment with the Company and its Subsidiaries terminated prior to such date. 

  
 41 








 “Company TEV” has the meaning given to it in the HomecareCo Equity Commitment
Letters. 
 “Company Interests”, with respect to a Person, means the securities, warrants, equity interests, or other
ownership or contingent ownership interests, promissory notes or other debt securities issued by or held in such Person. 

“Contracts” means any written or oral contracts, agreements, licenses, notes, bonds, mortgages, indentures, evidence of
Indebtedness, leases or other agreement or arrangement that is legally binding. 
 “Cornerstone” means the Cornerstone
Insurance Company. 
 “End Date” has the meaning given to it in the Merger Agreement. 

“Exclusive Homecare Benefit Plans” means those Benefit Plans in which the only participants are current or former Homecare
Employees or to which only one or more Homecare Employees is subject or a party. 
 “Financing” has the meaning given to it
in the Merger Agreement. 
 “Funded Homecare Benefit Liabilities” means Liabilities under the Benefit Plans to or in
respect of any Person who is or was a Homecare Employee or a Transferring Employee (x) to the extent (but only to the extent) that such Liabilities arise on or prior to the Hospital Merger Closing and related assets are segregated for the
payment thereof and retained by one or more of the Hospital Entities following the Homecare Transfers, or (y) to the extent (but only to the extent) that such Liabilities arise following the Hospital Merger Closing and payment in respect
thereof is made by one or more of the Homecare Entities to the Hospital Entities for the payment thereof under the Transition Services Agreement, in each case, as agreed to by Parent and HospitalCo Parent. 

“GAAP” means the United States generally accepted accounting principles. 

“Gentiva” means Gentiva Health Services, Inc., a Delaware corporation. 

“Governmental Entity” means any supranational, national, state, municipal, local or foreign government, any instrumentality,
subdivision, court, administrative agency or commission or other governmental authority, or any quasi-governmental or private body exercising any regulatory or other governmental or quasi-governmental authority. 
 “Homecare Benefit Plans” means the Exclusive Homecare
Benefit Plans and such other Benefit Plans as designated by Parent and HospitalCo Parent as Homecare Benefit Plans. 

  
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 “Homecare Business” means the business, as operated and conducted by the Company
and its Subsidiaries (and, after the Hospital Merger Closing, the HomecareCo Group) that primarily provides home health, hospice, and community care services and the assets of the Company and its Subsidiaries (and, after the Hospital Merger Closing,
the HomecareCo Group) used or held for use in connection therewith. 
 “Homecare Converted Equity Awards” means each
Replacement Cash Award (as defined in the Merger Agreement) held by a Homecare Employee or Transferring Employee immediately following the consummation of the transactions contemplated by Section 1.04 of this Agreement.

 “Homecare Employees” means those Company Employees (other than Shared Services Employees) whose services exclusively
relate to the Homecare Business or whom Parent and HospitalCo Parent mutually agree are “Homecare Employees”. 
 “Homecare
Entities” means Gentiva, all of the direct and indirect Subsidiaries of Gentiva and the Transferred Homecare Entities. 

“Homecare Intermediate” means Kentucky Homecare Intermediate, Inc., a Delaware corporation. 

“Homecare IP” means all Intellectual Property, excluding Trademarks, owned by the HomecareCo Group Members immediately after
Hospital Merger Closing. 
 “Homecare JV Agreement” means the Shareholders Agreement of Parent, Kentucky Homecare JV
Holdings, LP, Humana Inc. and Parent dated as of Closing Date, as amended from time to time. 
 “Homecare LTIP
Award” means each Replacement LTIP Cash Award (as defined in the Merger Agreement) held by a Homecare Employee or Transferring Employee immediately following the consummation of the transactions contemplated by
Section 1.04 of this Agreement. 
 “Homecare Retention Awards” means the cash retention awards
awarded to Homecare Employees in connection with the entry into the Merger Agreement. 
 “Homecare Sharing Percentage” has
the meaning given to it in the HomecareCo Equity Commitment Letters. 
 “Homecare STIP Award” means each award granted to a
Homecare Employee or Transferring Employee under the Company’s Short-Term Incentive Plan in respect of the Company’s 2018 fiscal year that is outstanding as of immediately prior to the consummation
of the transactions contemplated by Section 1.04 of this Agreement. 

  
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 “Homecare Taxes” means, without duplication, (i) all Tax Liabilities of the
Company and its Subsidiaries (including the Homecare Entities) to the extent related to or to the extent arising from the ownership or operation of the Homecare Business or the Transferred Homecare Assets, whether arising prior to, on or after the
Homecare Transfers, (ii) all Taxes of the Homecare Entities for any Post-Closing Tax Period and the Post-Closing Share of any Taxes of the Homecare Entities for any Straddle Period and (iii) Transfer Taxes, to the extent required to be
borne by Parent under Section 7.06. 
 “Homecare Trademarks” means all Trademarks owned by the
HomecareCo Group Members immediately after Hospital Merger Closing. 
 “HomecareCo Equity Commitment Letters” has
the meaning given to it in the Merger Agreement. 
 “HomecareCo Group” means Parent and its Subsidiaries, excluding the
Hospital Entities. 
 “HomecareCo Group Member” means any entity within the HomecareCo Group. 

“Hospital Business” means the hospital division and rehabilitation services division primarily in hospitals and long-term
care settings of the Company and its Subsidiaries. 
 “Hospital Entities” means the Company and all of the direct and
indirect Subsidiaries of the Company, excluding the Homecare Entities. 
 “Hospital IP” means all Intellectual Property,
excluding Trademarks owned by the HospitalCo Group Members immediately after Hospital Merger Closing. 
 “Hospital Merger
Consideration” means an amount equal to the sum of (a) minus (b), where: 
  

			
	(a) =	  	the Company TEV plus the Homecare Financing Fees plus the Hospital Financing Fees plus the Shared Transaction Expenses plus the Net Funded Debt Difference
		
	and	  	
		
	(b) =	  	the HomecareCo Debt Financing Proceeds plus the Homecare Equity Commitment Amount plus $150,000,000.


 For the purposes of this definition of “Hospital Merger Consideration”, the terms
“Company TEV”, “Homecare Financing Fees”, “Hospital Financing Fees”, “Shared Transaction Expenses”, “Net Funded Debt Difference”, “HomecareCo Debt Financing Proceeds” and “Homecare
Equity Commitment Amount” shall have the meanings given to them in the HomecareCo Equity Commitment Letters. 

  
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 “Hospital Sharing Percentage” means a percentage amount equal to (i) 100%,
less (ii) the Homecare Sharing Percentage. 
 “Hospital Trademarks” means all Trademarks owned by the
HospitalCo Group Members immediately after the Hospital Merger Closing. 
 “HospitalCo Group” means HospitalCo Parent and
its Subsidiaries, including, after the Hospital Merger Closing, the Hospital Entities. 
 “HospitalCo Group Member” means
any entity within the HospitalCo Group. 
 “HSR Act” the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

 “Indebtedness” means, with respect to any Person, without duplication, as of the date of determination (i) all
obligations of such Person for borrowed money, (ii) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (iii) all obligations of such Person issued or assumed as the deferred purchase price of
property (including any expected future earn-out, purchase price adjustment, release of “holdback” or similar payment, but excluding such obligations incurred in the ordinary course of business),
(iv) all lease obligations of such Person capitalized on the books and records of such Person, (v) all Indebtedness of others secured by a Lien on property or assets owned or acquired by such Person, whether or not the Indebtedness secured
thereby have been assumed, (vi) all obligations of such Person under interest rate, currency or commodity derivatives or hedging transactions or similar arrangement (valued at the termination value thereof), (vii) all letters of credit or
performance bonds issued for the account of such Person, to the extent drawn upon, (viii) any accrued and unpaid interest, prepayment fees or penalties or similar obligations of such Person payable in connection with the repayment of the
foregoing and (ix) all guarantees and keepwell arrangements of such Person of any Indebtedness of any other Person. 

“Intellectual Property” means the following intellectual property rights in any jurisdiction worldwide, whether
registered or unregistered: (i) patents (including all reissues, divisions, continuations and continuations-in-part,
re-examinations, renewals and extensions thereof), patent applications or other patent rights (“Patents”); (ii) copyrights and all registrations, applications for registration, and renewals
for any of the foregoing (“Copyrights”); (iii) trademarks, service marks, trade names and trade dress, social media username (e.g., Twitter handles) and all registrations, applications and renewals for any of the foregoing, together
with all goodwill associated with the foregoing (“Trademarks”); (iv) trade secrets and confidential business, technical and know-how information (“Trade Secrets”); and
(v) Internet domain names and domain name registrations. 

  
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 “IT Contract” means any Contract for the purchase, lease, or license of any
equipment or software included in the IT Systems, and any development, support, maintenance, or other services related to the foregoing. 

“IT Systems” means hardware, software, databases, network and telecommunications equipment, and other information technology
and communications equipment, owned, leased or licensed by the Company or any of its Subsidiaries. 
 “Kentucky Healthcare
Operating” means Kindred Healthcare Operating, Inc., a Delaware corporation, and its successors-in-interest, including after the LLC Conversion, Kindred
Healthcare Operating, LLC, a Delaware limited liability company. 
 “KNCE” means Kindred Nursing Centers East, L.L.C., a
Delaware limited liability company. 
 “KNCLP” means Kindred Nursing Centers Limited Partnership, a Delaware limited
partnership. 
 “Laws” means any domestic or foreign laws, common law, statutes, ordinances, rules, regulations,
codes, Orders or legally enforceable requirements, criteria, policy or guideline enacted, issued, adopted, promulgated, enforced, ordered or applied by any Governmental Entity. 

“Liability” means any liability or obligation (whether known or unknown, whether asserted or unasserted, whether absolute or
contingent, whether accrued or unaccrued, whether liquidated or unliquidated, whether incurred or consequential and whether due or to become due). For the avoidance of doubt, “Liability” includes Taxes, (including Taxes under Treasury
Regulations Section 1.1502-6 or any similar provision of state, local or foreign law), but taking into account any previously paid amounts of estimated tax or prepaid tax. 

“Liens” means, with respect to any property or asset, all pledges, liens, mortgages, charges, encumbrances,
hypothecations and other forms of security interest of any kind or nature whatsoever. 
 “Losses” means Liabilities,
losses, damages, Order and costs and expenses (including reasonable fees and expenses of attorneys, auditors, consultants and other agents), but net of any insurance proceeds received; provided, that Losses described in Section 6.02(a)
shall include a reduction of Parent’s Pre-Closing NOLs to the extent the cumulative amount of any such reductions attributable to Losses described in Section 6.02(a) exceeds the
lesser of (i) the Hospital Sharing Percentage of Parent’s Pre-Closing NOLs and (ii) the amount of Parent’s Pre-Closing NOLs that have not, as of the
date such Loss is finally determined, been claimed as a deduction on any Tax Return or been reduced as a result of an audit adjustment. 

  
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 “Merger Consideration” has the meaning given to it in the Merger Agreement. 

“Merger Sub Shares” has the meaning given to it in the Merger Agreement. 

“ML5” has the meaning given to it in the Merger Agreement. 

“NCD/ALF Business” means the nursing center division and assisted living facility operations of the Company and its
Subsidiaries, including the skilled nursing facilities divested or to be divested pursuant to the SNF Transaction and the skilled nursing facilities to be closed after the date hereof. 

“New LLC” has the meaning given to it in the Merger Agreement. 

“New LP” has the meaning given to it in the Merger Agreement. 

“Non-Controlled Joint Venture” has the meaning given to it in
the Merger Agreement. 
 “Order” means any order, writ, assessment, decision, injunction, decree, ruling or judgment of, or
settlement agreement or other written agreement with, a Governmental Entity. 
 “Parent’s
Pre-Closing NOLs” means Parent’s U.S. federal net operating loss carryforwards as of the end of the day on the Closing Date, determined without regard to any adjustments made to such net
operating loss carryforwards after the Closing Date; provided, for the avoidance of doubt, that Pre-Closing NOLs shall not include any net operating losses incurred after the Closing Date. 

“Paying Agent” has the meaning given to it in the Merger Agreement. 

“Payment Fund” has the meaning given to it in the Merger Agreement. 

“Person” means any individual, corporation, limited or general partnership, limited liability company, limited liability
partnership, trust, association, joint venture, Governmental Entity and other entity and group (which term will include a “group” as such term is defined in Section 13(d)(3) of the Exchange Act). 

“Post-Closing Share” means, with respect to a Straddle Period, (i) in the case of real, personal and intangible ad
valorem Taxes, the total amount of such Taxes due for the Straddle Period, multiplied by a fraction, the numerator of which is the number of days in the Straddle Period following the Closing Date, and the denominator of which is the total number of
days in the Straddle Period, and (ii) in the case of all other Taxes, the amount of such Taxes that would be due if the taxable period of each applicable entity began on the day following the Closing Date and ended on the last day of the
Straddle Period. 

  
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 “Post-Closing Tax Period” means any Tax period beginning after the Closing Date

 “Pre-Closing Tax Period” means any Tax period ending on or before the Closing
Date. 
 “Put” has the meaning given to it in the Homecare JV Agreement. 

“Put Closing” has the meaning given to it in the Homecare JV Agreement. 

“Put/Call Closing Date” means the earlier of the date of the Put Closing or the Call Closing. 

“Representatives” means, with respect to a Person, such Person’s directors, officers, employees, investment
bankers, accountants, attorneys, advisors, consultants and other representatives. 
 “Retained Business” means the
business, operations, assets and liabilities of the Surviving Company and its Subsidiaries that remain after giving effect to the Separation Transactions, including the Hospital Business. 

“Retained Liabilities” means any Liabilities (including for the avoidance of doubt, Tax Liabilities) of the Company and its
Subsidiaries which are not Assumed Homecare Liabilities, other than (i) the Shared Company Transaction Liabilities to the extent that the HomecareCo Group would otherwise be liable for less than the Homecare Sharing Percentage of such Shared
Transaction Liabilities, (ii) the Assumed Share of NCD/ALF Claims Tail, (iii) Liabilities of the Company or its Subsidiaries arising after the Closing in the course of providing services under the Transition Services Agreement, and
(iv) Homecare Taxes. 
 “Securities Act” means the Securities Act of 1933, as amended. 

“Separation Transactions” means the transactions contemplated by Article I, including the KNCLP Contribution, KNCE
Merger, LLC Conversion, the Homecare Transfers, the Hospital Transfers, the Gentiva Distributions and the Hospital Merger. 

“Severance Costs” means the Liabilities for severance pay and termination benefits (including without limitation the cost of
subsidized COBRA continuation coverage and outplacement benefits) arising by reason of the termination of employment of a Person. 

  
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 “Shared Contracts” means Contracts that relate to, or are used in, (i) the
operation of both the Homecare Business and the Retained Business, or (ii) the other operations of the Company and its Subsidiaries. 

“Shared Company Transaction Liabilities” means, without duplication, (i) all Liabilities for costs and expenses in
connection with the transactions contemplated by this Agreement and the Merger Agreement that are incurred by the Company and its Subsidiaries on or prior to the Hospital Merger Closing or arise from or relate to arrangements, agreements or
commitments entered into or made by the Company or its Subsidiaries on or prior to the Hospital Merger Effective Time in connection with the transactions contemplated by this Agreement and the Merger Agreement, including Liabilities for filing fees
and printing and mailing costs and other expenses incurred in connection with the Proxy Statement and the Company’s and its Subsidiaries’ efforts to comply with the pre-closing covenants and
agreements contained in the Merger Agreement and this Agreement, fees and expenses of investment bankers, accountants, attorneys and other consultants and advisors and their
out-of-pocket costs and expenses, costs and expenses relating to termination or prepayment of the Company’s Indebtedness in existence immediately prior to the
Take-Private Closing, (ii) all Transaction Litigation and Appraisal Liabilities, (iii) all Liabilities for costs and expenses of the SNF R&W Policy incurred by the Company and its Subsidiaries, (iv) any and all change in control,
consent fees, assignment fees or similar fees or expenses payable to any Third Party in connection with the consummation of the Take-Private Closing or the Hospital Merger Closing, including any such fees and expenses payable to Ventas pursuant to
the ML5, and (v) any Severance Costs of the Shared Services Employees whose employment terminates (x) in connection with the consummation of the Separation Transactions by reason of identified redundancy, cost-savings or similar corporate
synergies or (y) if applicable, by reason of such Shared Services Employee electing to terminate his or her employment with “good reason” under an applicable
change-in-control or employment agreement, in the case of each of the foregoing clauses (x) or (y), within six (6) months following the Take-Private Closing,
but, in each case, excluding fees and expenses to the extent exclusively related to or arising from the Homecare Business or the Hospital Business. 

“Shared Services Employee” means each Company Employee who performs corporate-level and/or support services for or on behalf
of both the Homecare Business and the Hospital Business. 
 “SNF Transaction” has the meaning given to it in the Merger
Agreement. 
 “SNF Transaction Agreement” has the meaning given to it in the Merger Agreement. 

  
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 “Straddle Period” means any Tax period beginning before and ending after the
Closing Date. 
 “Subsidiary” means, with respect to any Person, any other Person (i) of which such first Person
(alone or in combination with any of such first Person’s other Subsidiaries) owns (1) capital stock or other equity interests having the ordinary voting power to elect a majority of the board of directors or other governing body of such
Person or (2) if no such governing body exists, a majority of the outstanding voting securities of such Person or (ii) with respect to which such first Person or any of its Subsidiaries is a controlling general partner or managing member
of such Person. 
 “Swap Obligations” means the net obligations of (i) the Homecare Entities to any
counterparty or (ii) any counterparty to the Homecare Entities, in each case, under any interest rate or currency swap or any other interest rate or currency hedging arrangement or derivative and determined as if such instrument were fully
terminated and settled on the date of determination. 
 “Tax Agreement” means any agreement that provides for the
allocation of Taxes among the Company and its Subsidiaries. 
 “Tax Returns” means any return, declaration, report or
other document required to be filed with a taxing authority in respect of Taxes, including any schedule or attachment thereto. 

“Taxes” means (i) all federal, state, local and foreign income, gross receipts, sales, use, production, ad valorem,
transfer, franchise, registration, profits, license, lease, service, service use, withholding, payroll, employment, unemployment, estimated, excise, severance, environmental, stamp, occupation, premium, property (real or personal), real property
gains, windfall profits, customs, duties or other taxes, fees, assessments or charges of any kind whatsoever, together with any interest, additions or penalties with respect thereto and (ii) Liability of another Person for amounts described in
clause (i) as a result of Treasury Regulations Section 1.1502-6 (or any similar provision of state, local or foreign law). 

“Transaction Litigation and Appraisal Liabilities” means Liabilities incurred by Company and its Subsidiaries arising from or
relating to Claims that arise from or relate to the execution of this Agreement and the Merger Agreement, or the consummation of the transactions contemplated hereby and thereby, including any payments due to the
pre-Take Private Closing stockholders of the Company to settle demands for appraisals of shares of Company Common Stock or in accordance with an Order requiring the Company to pay additional amounts in respect
of Merger Consideration in connection with stockholders’ exercise of their appraisal rights under the Delaware General Corporation Law. 

  
 50 








 “Transfer Taxes” means all transfer, documentary, sales, use, stamp,
registration, value added and other such Taxes and fees (including any penalties and interest) incurred in connection with transactions contemplated by this Agreement (including any real property transfer tax and any similar Tax). 

“Transferred Homecare Assets” means, except as provided in the Transition Services Agreement, (i) all of the assets,
properties and rights of the Company and the Hospital Entities exclusively related to the ownership of or used in the operation of the Homecare Business, including Contracts, Permits, Books and Records, Intellectual Property together with all
associated Ancillary IP Rights, IT Systems and IT Contracts designated in the Transition Plan as to be assigned to Gentiva, and (ii) the assets, properties and rights set forth in Schedule 1.04(a)(i) (together with, in the case of
Intellectual Property, all associated Ancillary IP Rights, and including without limitation the Homecare Benefit Plans and all assets related thereto). 

“Transferred Homecare Companies” means the Persons listed on Schedule 1.04(a)(i). 

“Transferred Homecare Company Agreement” means, with respect to each Transferred Homecare Company Interest, any subscription
agreement, investor rights agreement, stockholder agreement, limited liability company operating agreement, limited partnership agreements and any other agreement, instrument or document to which a Hospital Entity is a party or which inures to the
benefit of a Hospital Entity or by which a Hospital Entity is otherwise bound that governs the terms of such Hospital Entity’s ownership of such Transferred Homecare Company Interest or such Hospital Entity’s rights and obligations with
respect to the applicable Transferred Homecare Company or Transferred Homecare Company Interest. 
 “Transferred Homecare Company
Interests” means, collectively, the Company Interests in the Transferred Homecare Companies held by the Hospital Entities. 

“Transferred Homecare Entity” or “Transferred Homecare Entity” means the Transferred Homecare Companies and
each Subsidiary of a Transferred Homecare Company in which such Transferred Homecare Company, indirectly or indirectly, holds equity interests. 

“Transferring Employees” means each of the Shared Services Employees identified by Parent and HospitalCo Parent as
Transferring Employees in the Transition Plan. 
 “Ventas” has the meaning given to it in the Merger Agreement. 

  
 51 








 (b) In addition to the defined terms set forth in Section 8.14(a), each
of the following capitalized terms has the meaning specified in the Section set forth opposite such term below: 
  

			
	 Accessible Information
	  	Section 2.10
	 Agreement
	  	Preamble
	 Amended and Restated Company Agreement
	  	Section 1.08
	 Claim Date
	  	Section 6.03(a)
	 Claim Notice
	  	Section 6.03(a)
	 Closing Date
	  	Section 1.06(a)
	 Company
	  	Preamble
	 Company LLC Agreement
	  	Section 1.08
	 Consent Required Contracts
	  	Section 1.10(b)
	 Consent Required Shared Contract
	  	Section 2.02(b)
	 Controlling Party
	  	Section 6.03(b)
	 DGCL
	  	Recitals
	 Guarantee and Credit Support Arrangements
	  	Section 2.03(c)
	 Gentiva
	  	Recitals
	 Gentiva Distributions
	  	Section 1.05
	 Homecare Credit Support
	  	Section 2.03(c)
	 Homecare Guarantees
	  	Section 2.03(c)
	 Homecare Transfers
	  	Section 1.04(a)
	 HomecareCo Group Indemnified Persons
	  	Section 6.01
	 Hospital Credit Support
	  	Section 2.03(a)
	 Hospital Guarantees
	  	Section 2.03(a)
	 Hospital Merger
	  	Section 1.06
	 Hospital Merger Closing
	  	Section 1.06
	 Hospital Merger Effective Time
	  	Section 1.06
	 Hospital Merger Sub
	  	Preamble
	 Hospital Names
	  	Section 2.05
	 Hospital Proprietary Name Rights
	  	Section 2.05
	 HospitalCo Group Indemnified Persons
	  	Section 6.02(a)
	 HospitalCo Parent
	  	Preamble
	 Indemnified Person
	  	Section 6.03(a)
	 Indemnifying Party
	  	Section 6.03(a)
	 Intercompany Accounts
	  	Section 2.09
	 IP License Agreement
	  	Section 2.05(b)
	 KNCE Merger
	  	Section 1.02
	 KNCLP Contribution
	  	Section 1.01
	 LLC Act
	  	Recitals
	 LLC Conversion
	  	Section 1.03
	 Loss Portfolio Transfer Reinsurance Policy
	  	Section 2.08


  
 52 









			
	 Merger Agreement
	  	Recitals
	 Merger Consideration Savings Amount
	  	Section 2.12
	 Merger Sub
	  	Recitals
	 Non-Controlling Party
	  	Section 6.03(b)
	 Non-Transferred Asset
	  	Section 2.04(b)
	 Novated Unallocated WC Tail
	  	Section 2.06(c)
	 Objection Notice
	  	Section 6.03(a)
	 Parent
	  	Preamble
	 Party or Parties
	  	Preamble
	 Pre-Closing Restructuring Actions
	  	Section 2.13
	 SNF R&W Policy
	  	Section 2.07(a)
	 Surviving Company
	  	Section 1.06
	 Take-Private Closing
	  	Recitals
	 Take-Private Merger
	  	Recitals
	 Tax Accountant
	  	Section 2.03
	 Third Party
	  	Section 6.03(a)
	 Third-Party Claim
	  	Section 6.03(a)
	 Trademark License Agreement
	  	Section 2.05(a)
	 Transferee Party
	  	Section 2.04(b)
	 Transferor Party
	  	Section 2.04(b)
	 Transition Plan
	  	Section 2.01(a)

 [SIGNATURE PAGES FOLLOW] 

  
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 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date
first written above by their respective officers thereunto duly authorized. 
  

			
	Kindred Healthcare, Inc.


 
			
		
	By:	 	 /s/ Joseph L. Landenwich





			
	Name: Joseph L. Landenwich
	Title: General Counsel and Corporate Secretary









 
	
	 Kentucky Homecare Holdings, Inc.

 

	 By: /s/ Michael
LaGatta                    

Name: Michael LaGatta

Title: Vice President



  

	
	 Kentucky Hospital Holdings, LLC

 

	 By: /s/ Michael
LaGatta                    

Name: Michael LaGatta

Title: Vice President



  

	
	 Kentucky Hospital Merger Sub, Inc.

 

	 By: /s/ Michael
LaGatta                    

Name: Michael LaGatta

Title: Vice President



  

  
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