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                                                                  Exhibit 10.3.1
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                     MASTER LEASE NO. 1 AMENDMENT AGREEMENT

                                  BY AND AMONG

                            KINDRED HEALTHCARE, INC.
                              (f/k/a Vencor, Inc.),

                       KINDRED HEALTHCARE OPERATING, INC.
                         (f/k/a Vencor Operating, Inc.),

                                       AND

                       VENTAS REALTY, LIMITED PARTNERSHIP

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                     MASTER LEASE NO. 1 AMENDMENT AGREEMENT

     THIS MASTER LEASE NO. 1 AMENDMENT AGREEMENT (hereinafter this "Agreement" )
is dated as of the 30th day of June, 2003, and is by and among VENTAS REALTY,
LIMITED PARTNERSHIP, a Delaware limited partnership (together with its
successors and assigns, "Lessor"), having an office at 4360 Brownsboro Road,
Suite 115, Louisville, Kentucky 40207, and KINDRED HEALTHCARE, INC., a Delaware
corporation (f/k/a Vencor, Inc.) ("Kindred"), and KINDRED HEALTHCARE OPERATING,
INC., a Delaware corporation (f/k/a Vencor Operating, Inc.) ("Operator";
Operator, jointly and severally with Kindred and permitted successors and
assignees of Operator and Kindred, "Tenant"), both having an office at 680 South
4th Avenue, Louisville, Kentucky 40202.

                                    RECITALS

     A.   Lessor and Tenant entered into a certain Amended and Restated Master
Lease Agreement No. 1 dated as of April 20, 2001 (as the same may have been or
may hereafter be amended, amended and restated, supplemented, modified, severed,
renewed, extended or replaced, the "Lease"), demising to Tenant certain
properties.

     B.   Lessor and Tenant entered into an Agreement for Sale of Real Estate
and Master Lease Amendments dated May 14, 2003 (as the same may have been
heretofore amended, amended and restated, supplemented, modified, renewed,
extended or replaced, the "Sale/Amendment Agreement").

     C.   Immediately prior hereto and pursuant to the Sale/Amendment Agreement,
Lessor and Tenant entered into a certain Master Lease No. 1 Partial Lease
Termination Agreement bearing even date herewith (the "Partial Lease
Termination"), pursuant to which the Lease was terminated as it applied to
certain properties.

     D.   Lessor and Tenant desire to amend the Lease as it applies to the
remaining Leased Properties, after the aforesaid termination, on the terms set
forth in this Agreement.

     NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the parties hereby agree as follows:

     1.   Capitalized Terms. All capitalized terms used herein and not defined
herein shall have the meaning ascribed thereto in the Lease.

     2.   No Accrued Rent. Lessor and Tenant acknowledge and agree that a
Refinancing Transaction has occurred and that, therefore, the Base Rent provided
for in the Lease shall at all times be payable on a current basis, not partly on
a current basis and partly on an accrual basis, and, notwithstanding anything to
the contrary contained in the Lease, Lessor and Tenant agree that, for all
purposes of the Lease, (a) Accrued Rent and Accrued Rent Interest shall equal
zero, (b) a Refinancing Transaction shall be deemed to have occurred under
subsection (i), (ii) and/or

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(iii) of the definition of "Refinancing Transaction" contained in Section 2.1 of
the Lease, (c) Base Rent shall at all times equal Current Rent and vice versa,
(d) the Unpaid Accrued Rent Due Date shall be deemed to have occurred on the
date of this Agreement, and (e) Schedule 2.1B of the Lease is hereby deleted
from the Lease.

     3.   Base Rent and Current Rent Amendments.

          (a) Relative to the definitions of "Base Rent" and "Current Rent"
contained in Section 2.1 of the Lease, Lessor and Tenant agree that the Base
Rent and Current Rent for the Leased Properties remaining under the Lease after
the termination referenced in the Partial Lease Termination shall, for the
period from July 1, 2003 through April 30, 2004, be equal to Forty-Nine Million
Three Hundred Ninety-Seven Thousand Three Hundred Thirty-Eight and 1/100 Dollars
($49,397,338.01) per annum, and, for Rent Calculation Years thereafter, Base
Rent and Current Rent shall be determined as set forth in subsection (d) of the
definition of "Base Rent" or subsection (b) of the definition of "Current Rent",
as applicable, contained in such Section 2.1, in each case subject to the
provisions of such definitions relative to the Reset Option and to the
provisions of Article XIX relative to the amount of the Base Rent and Current
Rent during Extended Terms; and

          (b) The definition of "Current Rent" contained in Section 2.1 of the
Lease is hereby amended by deleting therefrom the words "two percent (2%) of the
Prior Period Base Rent; provided, however, that, from and after the Unpaid
Accrued Rent Due Date, for the remainder of the Rent Calculation Year during
which such Unpaid Accrued Rent Due Date occurs and for each Rent Calculation
Year thereafter, subject to satisfaction of the aforesaid 75% of Adjusted Base
Patient Revenues test, the amount referenced in this subsection (b) (ii) shall
equal three and one-half percent (3.5%), rather than two percent (2%), of the
Prior Period Base Rent (i.e. from and after the Unpaid Accrued Rent Due Date,
Current Rent shall equal Base Rent)" and substituting in their place the words
"three and one-half percent (3.5%) of the Prior Period Base Rent."

     4.   New Definition. Section 2.1 of the Lease is hereby amended by adding
thereto, in the proper alphabetical location, the following new definition:
""Lease Amendment Date": means June 30, 2003."

     5.   Amendment to Section 19.2. The second sentence of Section 19.2 of the
Lease is hereby amended by adding to the end thereof a comma and the words
"subject to the terms of Section 19.2.1 below."

     6.   New Section 19.2.1. Article XIX of the Lease is hereby amended by
adding thereto the following new Section 19.2.1:

     "Section 19.2.1 First Extension Term Rental Adjustment. Included within the
Leased Property(ies) as of the Lease Amendment Date are certain properties
described on Schedule

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19.2.1 hereto (the "Section 19.2.1 Properties"), which have Fixed Term
Expiration Dates as set forth on such Schedule 19.2.1. Lessor and Tenant agree
that:

          (a) In the event this Lease is extended as to a particular Renewal
Group that includes a Section 19.2.1 Property(ies) for the first Extended Term,
(i) the amount of the Base Rent and Current Rent that is attributable to such
Section 19.2.1 Property(ies) for the first year of such first Extended Term
shall, pursuant to this Section 19.2.1, be adjusted from the amount that would
otherwise have been applicable but for the application of this Section 19.2.1 to
equal instead the respective amount(s) thereof set forth on Schedule 19.2.1,
(ii) the aggregate amount of the Base Rent and Current Rent for all of the
Leased Properties shall be revised to reflect such adjustment, and (iii) Exhibit
C to this Lease shall be revised to reflect such adjustment(s) relative to the
Section 19.2.1 Property(ies) and revision in the aggregate amount of the Base
Rent and Current Rent for all of the Leased Properties and incorporate the
respective revised Transferred Property Percentages of all of the Leased
Properties resulting from such adjustment(s) and revision.

          (b) Notwithstanding the foregoing or anything to the contrary
contained in this Section 19.2.1, this Section 19.2.1 shall not apply, and shall
be of no force or effect, (i) if Lessor exercises the Reset Option and/or (ii)
as to any Renewal Group that does not include any Section 19.2.1 Property(ies)."

     7.   Article XXVI Amendments. Article XXVI of the Lease is hereby amended
in the following respects:

          (a) Section 26.1 of the Lease is hereby amended by adding to the end
of subsection (j) thereof the word "and" and by adding thereafter the following
new subsections:

     "(k) Within three (3) Business Days following Tenant's receipt thereof,
true, correct and complete copies of all professional negligence, malpractice
and/or general liability actuarial studies, reports and/or analyses prepared
from time to time for or by Tenant or at Tenant's direction other than those
prepared by its independent auditors;

     (l) Within sixty (60) days after the close of each fiscal quarter, for any
insurance company owned or controlled by Tenant (a "Captive Insurance Company"),
an unaudited balance sheet and statement of operations as of the close of each
such period and the related unaudited statements of income, cash flows and
stockholders equity for such period and for the year to date of each Captive
Insurance Company, setting forth in each case in comparative form the
corresponding figures for the previous year, all prepared in accordance with
generally accepted accounting principles and all certified in an Officer's
Certificate to Lessor as being complete and accurate to the best of Tenant's
knowledge, subject to normal year end adjustments;

     (m) Within one hundred eighty (180) days after the close of each Fiscal
Year, for each Captive Insurance Company, a balance sheet and statement of
operations as of the close of such Fiscal Year and the related statements of
income, cash flows and stockholder's equity for such Fiscal Year, in each case
with accompanying notes and schedules, prepared in accordance with

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generally accepted accounting principles and audited by a firm of independent
certified public accountants of recognized standing selected by Tenant, which
accountants shall have issued an audit report thereon;

     (n) Contemporaneously with the Lease Amendment Date, copies of the
organizational documents, including, without limitation, any amendments thereto
prior to the Lease Amendment Date, for each Captive Insurance Company, and,
within five (5) Business Days following entry into any subsequent amendment
thereof, a true, correct and complete copy of any such amendment;

     (o) Within sixty (60) days following the end of each quarter during the
Term, reports, as of such quarter-end, (i) indicating the amount of the then
current "total loss pick" set for professional negligence and malpractice claims
against Tenant and its Subsidiaries and Affiliates and the then current
breakdown of such "total loss pick" (x) between claims incurred and reported and
claims incurred but not yet reported and (y) among claims incurred, whether or
not reported, that are (1) insured by the Captive Insurance Company(ies), (2)
insured by insurers other than a Captive Insurance Company, and (3) not insured
by a Captive Insurance Company or another insurer, (ii) indicating the amount to
be reserved by Tenant at the aforesaid then current "total loss pick" for
claims, whether or not reported, that are uninsured or that are insured by the
Captive Insurance Company(ies) and a reasonably detailed explanation of how such
reserved amount was calculated and determined, (iii) identifying the portion of
the reserve amount referenced in subsection (ii) above that will be funded, and
the portion of such reserve that will not be funded, to the Captive Insurance
Company(ies) by Tenant, and (iv) confirming that the amount to be funded to the
Captive Insurance Company(ies) by Tenant is being funded on budget or, if there
is a shortfall in the funding of the amount to be funded, detailing Tenant's
plan for funding such shortfall to the Captive Insurance Company(ies), and, in
addition, in each monthly Officer's Certificate delivered by Tenant pursuant to
subsection (a) above, Tenant shall include therein a certification that Tenant
is recording general and professional liability costs, on a monthly basis, in a
manner consistent with the most recent actuarial valuations;

     (p) On or prior to the date which is one hundred (100) days following the
end of each Fiscal Year, a report that allocates all professional negligence and
malpractice liability expenses incurred by Tenant and its Subsidiaries and
Affiliates during such preceding Fiscal Year to each Facility under this Lease,
to each of the other Facilities under the Leases and to all other
healthcare-related facilities of Tenant and its Subsidiaries and Affiliates that
are not leased by Tenant under the Leases and that explains the methodology of
such allocation in reasonable detail;

     (q) Within thirty (30) days following the end of each month during the
Term, Medicaid Rate Variance Reports, as of such month-end, prepared by Tenant
for the Facilities under this Lease, and under all of the Leases, that are
skilled nursing facilities, which report shall be substantially in the form
delivered by Tenant to Lessor on May 14, 2003 or another form reasonably
acceptable to Lessor, and, within forty-five (45) days following the end of each
month during the Term, the "Dennis Henson Medicaid Rate Report," or a
substantially similar report

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reasonably acceptable to Lessor, each as of such month-end, providing a state by
state evaluation and prediction of Medicaid rates;

     (r) Within forty-five (45) days following the end of each month during the
Term, operating reports, as of such month-end, for each Facility under this
Lease, and under each of the Leases, and for all Facilities under each of the
Leases, and under all of the Leases, in the form delivered to Lessor on May 14,
2003 or another form reasonably acceptable to Lessor;

     (s) Within thirty (30) days following the end of each month during the
Term, a "QA Management Activity Report", as of such month-end, prepared by
Tenant for each Facility under this Lease, and under each of the Leases, in the
form delivered to Lessor on May 14, 2003 or another form reasonably acceptable
to Lessor, and, relative thereto, promptly following Tenant's receipt of a
written request therefor from Lessor, true, correct and complete copies of any
survey deficiency reports and/or plans of correction relative to any of the
aforesaid Facilities designated by Lessor;

     (t) Within sixty (60) days after the commencement of each Fiscal Year, an
annual capital expenditures budget for such Fiscal Year, relating only to the
Leased Properties, in the form delivered to Lessor on May 14, 2003 or another
form reasonably acceptable to Lessor and, within fifteen (15) days after any
material amendment to such annual capital expenditures budget, a true, correct
and complete copy of such amendment;

     (u) Within forty-five (45) days following the end of each month during the
Term, a capital expenditures report, as of such month-end, relative to each
Facility under this Lease, and under all of the Leases, in the form delivered to
Lessor on May 14, 2003 or another form reasonably acceptable to Lessor, and,
including with each such report, project level expenditure detail by Facility;

     (v) Within thirty (30) days after the close of each of the first three
fiscal quarters, and within thirty (30) days after the close of each Fiscal
Year, a report, in form reasonably acceptable to Lessor, regarding changes in
the number of licensed beds and so-called "banked beds", at each Facility, at
all Facilities in the aggregate under this Lease and at all Facilities in the
aggregate under all of the Leases."

         (b) Section 26.3 of the Lease is hereby amended by adding to the end
thereof the following additional provisions: "Relative to the foregoing matters,
(a) Tenant agrees that those officers and managerial-level employees of Tenant
and its Subsidiaries and Affiliates as are reasonably designated by Lessor shall
attend the above described quarterly and/or Facility level meetings and reviews,
(b) each of the aforesaid quarterly meetings and reviews shall, unless otherwise
agreed by Lessor and Tenant, occur on the first Tuesday that is more than
fifteen (15) days following the earlier of the date of filing or the filing due
date of the Form 10Q or 10K, as applicable, that Tenant is required to file
following the close of the quarter-to-be-reviewed, and (c) the aforesaid
Facility level meetings and reviews shall, unless otherwise agreed by Lessor and
Tenant, occur simultaneously with the aforesaid quarterly meetings and reviews
and, in addition,

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from time to time at other times designated by Lessor upon ten (10) Business
Days written notice to Tenant."

          (c) Article XXVI of the Lease is hereby amended by adding to the end
thereof the following new Section 26.5, Section 26.6 and Section 26.7:

     "Section 26.5 Additional Tenant Assistance. Tenant agrees that Tenant's
chief executive officer and chief financial officer shall be made available by
Tenant, upon two (2) Business Days (five (5) Business Days, if an in-person
meeting is required) prior verbal and electronic notice from Lessor, to hold
meetings with, make presentations to and/or answer questions and inquiries by
investment advisers, analysts, underwriters, bankers and other lenders, rating
agencies and other persons and organizations designated by Lessor in connection
with transactions conducted by Lessor from time to time. Tenant shall not be
required to incur any out-of-pocket expenses (other than nominal expenses) in
connection with any such request by Lessor.

     Section 26.6 Electronic Format. All reports, statements and other materials
delivered by or on behalf of Tenant to Lessor under this Article XXVI shall be
delivered to Lessor in electronic format, if available.

     Section 26.7 Similar Reports. If Tenant shall at any time begin to prepare
new or additional reports, statements or other materials containing the same or
similar information as is contained in any of the reports, statements or other
materials that Tenant is required to deliver to Lessor by the terms of the other
Sections of this Article XXVI, Tenant shall deliver such new or additional
reports, statements or other materials to Lessor, promptly following Tenant's
preparation of the same."

     8.   New Section 40.18.1. Article XL of the Lease is hereby amended by
adding thereto the following new Section 40.18.1:

     "Section 40.18.1 If this Lease is combined pursuant to Section 40.18 with
that certain Master Lease Agreement dated as of December 12, 2001 between Ventas
Finance I, LLC, as successor to Ventas Realty, Limited Partnership, and Tenant
or with any other lease of any Master Lease Leased Property(ies), and this Lease
is the Section 40.18 Lease, each Master Lease Leased Property included in the
Second Lease shall, following such combination, be a part of, and re-join, the
same Renewal Group number as was originally applicable to such Master Lease
Leased Property as of April 20, 2001, as set forth as of such date in Exhibit D
to that certain Amended and Restated Master Lease Agreement No. 1 dated as of
April 20, 2001 between Lessor and Tenant. For example, if the aforesaid Master
Lease Agreement dated as of December 12, 2001 is combined with this Lease and
this Lease is the Section 40.18 Lease, Muncie Health Care & Rehab (Facility #IN
406), assuming it remains one of the Master Lease Leased Properties covered by
such December 12, 2001 lease, would, following such combination, be a part of,
and re-join, Renewal Group No. 1, which is the Renewal Group of which it was a
part as of April 20, 2001 under Exhibit D to the aforesaid April 20, 2001
lease)."

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     9.   New Exhibit C. Effective as of July 1, 2003, Exhibit C to the Lease is
hereby amended and restated in its entirety to read as set forth in Attachment 1
to this Agreement.

     10.  New Exhibit D. Exhibit D to the Lease is hereby amended and restated
in its entirety to read as set forth in Attachment 2 to this Agreement.

     11.  New Schedule 19.2.1 The Lease is hereby amended to add thereto a new
Schedule 19.2.1 in the form of Attachment 3 to this Agreement.

     12.  No Other Amendments. Except as provided in this Agreement, the Lease
remains in full force and effect without modification.

     13.  Successors and Assigns. This Agreement and the covenants and
agreements herein contained shall be binding upon and inure to the benefit of
Lessor and Tenant and their respective heirs, devisees, successors and assigns.

     14.  Integrated Agreement; Modifications; Waivers. This Agreement
constitutes the entire agreement between the parties hereto with respect to the
subject matter hereof and supersedes any and all prior representations,
understandings and agreements, whether written or oral, with respect to such
subject matter. Each of the parties hereto acknowledges that it has not relied
upon, in entering into this Agreement, any representation, warranty, promise or
condition not specifically set forth in this Agreement. No supplement,
modification or waiver of any provision of this Agreement shall be binding
unless executed in writing by the party to be bound thereby. No waiver of any of
the provisions of this Agreement shall be deemed or shall constitute a waiver of
any other provision hereof (whether or not similar), nor shall such waiver
constitute a continuing waiver unless otherwise expressly provided.

     15.  Headings and Captions. The headings and captions of the paragraphs of
this Agreement are for convenience of reference only and shall not affect the
meaning or interpretation of this Agreement or any provision hereof.

     16.  Gender and Number. As used in this Agreement, the neuter shall include
the feminine and masculine, the singular shall include the plural, and the
plural shall include the singular, except where expressly provided to the
contrary.

     17.  Severability. In the event that any paragraph, section, sentence,
clause or phrase contained in this Agreement becomes or is held by any court of
competent jurisdiction to be illegal, null or void or against public policy, the
remaining paragraphs, sections, sentences, clauses or phrases contained in this
Agreement shall not be affected thereby.

     18.  Counterparts. This Agreement and any amendment to this Agreement may
be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto were upon the same instrument.

                            [Signature Page Follows]

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     IN WITNESS WHEREOF, the parties hereto have executed these presents the day
and year first above written.

                                         TENANT:

                                         KINDRED HEALTHCARE, INC.,
                                         a Delaware corporation formerly
                                         known as Vencor, Inc.


                                         By: /s/ Joseph L. Landenwich
                                             ---------------------------------
                                         Name:   Joseph L. Landenwich
                                         Title:  Vice President of Corporate
                                                 Legal Affairs and Corporate
                                                 Secretary


                                         TENANT:

                                         KINDRED HEALTHCARE OPERATING, INC.,
                                         a Delaware corporation formerly
                                         known as Vencor Operating, Inc.


                                         By: /s/ Joseph L. Landenwich
                                            ---------------------------------
                                         Name:   Joseph L. Landenwich
                                         Title:  Vice President of Corporate
                                                 Legal Affairs and Corporate
                                                 Secretary

                                         LESSOR:

                                         VENTAS REALTY, LIMITED PARTNERSHIP,
                                         a Delaware limited partnership


                                         By: Ventas, Inc., a Delaware
                                             corporation, its general partner


                                             By: /s/ T. Richard Riney
                                                 -----------------------------
                                                 T. Richard Riney, Executive
                                                 Vice President, General
                                                 Counsel and Secretary

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