Document:

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                                                                 Exhibit 10.4.2

                              DISTRIBUTION AGREEMENT

                                 by and between

                                   VENCOR, INC.

                                       and

                              VENCOR HEALTHCARE, INC.

                            Dated as of April 30, 1998

<PAGE>

                            DISTRIBUTION AGREEMENT

          THIS DISTRIBUTION AGREEMENT (this "Agreement") is made and entered
                                             ---------
into as of this 30th day of April, 1998, by and between Vencor, Inc., a
Delaware corporation ("Vencor"), and Vencor Healthcare, Inc., a Delaware
                       ------
corporation ("Healthcare Company").
              ------------------

                                   WITNESSETH:

          WHEREAS, the Board of Directors of Vencor has determined that it is
appropriate and desirable to (a) pursuant to the Reorganization Agreement (as
defined herein), separate Vencor and its subsidiaries into two publicly-owned
companies so that (i) the assets and liabilities relating to substantially all
of the Vencor-owned land, buildings and other improvements and real estate
related assets are allocated tg Vencor (the "Real Estate Business"), which will
                                             --------------------
be renamed "Ventas, Inc" immediately prior to the Distribution (as defined
herein), and (ii) the other assets and liabilities relating to the historical
operations of Vencor, including the Development Properties (as defined herein),
are allocated to Healthcare Company (the "Healthcare Business"), which will be
                                          -------------------
renamed Vencor, Inc. immediately prior to the Distribution; and (b) distribute
(the "Distribution"), following such reorganization, as a dividend to the
      ------------
holders of the issued and outstanding shares of common stock, par value $.25
per share, of Vencor ("Vencor Common Stock") all of the issued and outstanding
                       -------------------
shares of common stock, par value $.25 per share, of Healthcare Company
("Healthcare Company Common Stock") on the basis of one share of Healthcare
  -------------------------------
Company Common Stock for each share of Vencor Common Stock; and

          WHEREAS, the parties hereto have determined that it is necessary and
desirable to set forth the principal corporate transactions required to effect
the Distribution.

          NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained in this Agreement and intending to be legally bound hereby,
the parties hereto agree as follows:

                                   ARTICLE I.

                                  DEFINITIONS

          1.01. General.  Unless otherwise defined herein or unless the context
                -------
otherwise requires, the following terms shall have the following meanings (such
meanings to be equally applicable to both the singular and plural forms of the
terms defined):

          "Action" shall mean any demand, action, suit, countersuit,
           ------
arbitration, inquiry, proceeding or investigation by or before any federal,
state, local, foreign or international Governmental Authority or any
arbitration or mediation tribunal.

          "Affiliate" shall mean with respect to any specified Person, a
           ---------
Person that directly or indirectly, through one or more intermediaries,
controls, is controlled by, or is under common control with, such specified
Person; provided, however, that for purposes of this Agreement, no member of
        --------  -------
either Group shall be deemed to be an Affiliate of any member of the other
Group.
                                      - 1 -

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          "Agent" shall mean National City Bank, Cleveland, Ohio or such trust
           -----
company or bank designated by Vencor, which shall act as agent for the holders
of Vencor Common Stock and the holders of Healthcare Company Common Stock in
connection with the Distribution.

          "Agreement" shall have the meaning set forth in the preamble to this
           ---------
Agreement.

          "Ancillary Agreements" shall mean all the written agreements,
           --------------------
instruments, understandings, assignments or other arrangements (other than this
Agreement) entered into by the parties hereto or any other member of their
respective Group in connection with the Corporate Restructuring Transactions,
the Distribution and the other transactions contemplated hereby or thereby,
including without limitation, the following:

          (i)    the Master Lease Agreement;

          (ii)   the Development Agreement;

          (iii)  the Participation Agreement;

          (iv)   the Employee Benefits Agreement;

          (v)    the Intellectual Property Agreement;

          (vi)   the Tax Allocation Agreement;

          (vii)  the Transition Services Agreement;

          (viii) the Conveyance and Assumption Instruments;

          (ix)   the Debt and Cash Allocation Agreement;

          (x)    the Reorganization Agreement; and

          (xi)   the Insurance Agreement.

          "Annual Meeting" shall mean the 1998 Annual Meeting of Stockholders
           --------------
of Vencor to be held on April 27, 1998, or any adjournments or postponements
thereof.

          "Corporate Restructuring Transactions" shall mean, collectively, (a)
           ------------------------------------
each of the mergers, transfers, conveyances, contributions, assignments and
other transactions described and set forth on Exhibit A of this Agreement, and
                                              ---------
(b) such other mergers, transfers, conveyances, contributions, assignments and
other transactions that may be appropriate or required to be accomplished,
effected or consummated by Vencor or Healthcare Company or any of their
respective Subsidiaries and Affiliates in order to separate and divide, in a
series of transactions, Vencor so that:  (i) the Healthcare Company Assets,
Healthcare Company Liabilities and Healthcare Business shall be owned, directly
or indirectly, by Healthcare Company; and (ii) the Real Estate Assets, Real
Estate Liabilities and Real Estate Business that remain after the separation
and division described in clause (i) above, are, after giving effect to the
Distribution, owned directly or indirectly, by Vencor.

                                     - 2 -

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          "Debt and Cash Allocation Agreement" shall mean the Debt and Cash
           ----------------------------------
Allocation Agreement by and between Vencor and Healthcare Company, which
agreement shall be entered into prior to or on the Distribution Date in the
form attached to the Reorganization Agreement as Exhibit B.
                                                 ---------

          "Distribution" shall have the meaning set forth in the preamble to
           ------------
this Agreement.

          "Distribution Date" shall mean the date, to be determined by the
           -----------------
Board of Directors of Vencor, or such committee of the Board as shall be
designated by the Board of Directors, as of which the Distribution shall be
effected.

          "Distribution Record Date" shall mean the time and date determined by
           ------------------------
the Board of Directors of Vencor for purposes of determining the holders of
record of Vencor Common Stock entitled to participate in the Distribution.

          "Exchange Act" shall mean the Securities Exchange Act of 1934, as
           ------------
amended, together with the rules and regulations promulgated thereunder.

          "Financing Transactions" shall mean the Healthcare Company Financing
           ----------------------
Transactions and the Vencor Financing Transactions.

          "Governmental Authority" shall mean any federal, state, local,
           ----------------------
foreign or international court, government, department, commission, board,
bureau, agency, the NYSE or other regulatory, administrative or governmental
authority.

          "Group" shall mean, with respect to Vencor, the Vencor Group and,
           -----
with respect to Healthcare Company, the Healthcare Company Group.

          "Healthcare Business" shall have the meaning set forth in the
           -------------------
preamble to this Agreement.

          "Healthcare Company" shall have the meaning set forth in the preamble
           ------------------
to this Agreement.

          "Healthcare Company Assets" shall mean, collectively, all the rights
           -------------------------
and assets that are owned by Healthcare Company or any of its Subsidiaries as
of the close of business on the Distribution Date, including without
limitation:

          (i)   the capital stock of the Healthcare Company Subsidiaries;

          (ii)  all the assets included on the Healthcare Company Pro Forma
     Balance Sheet that are owned by Healthcare Company or any of its
     Subsidiaries as of the close of business on the Distribution Date;

          (iii) all the assets and rights expressly allocated to Healthcare
     Companq or any of the Healthcare Company Subsidiaries under this Agreement
     or any of the Ancillary Agreements; and

                                     - 3 -

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          (iv) any other asset acquired by Vencor or any of its Subsidiaries
     from the date of the Healthcare Company Pro Forma Balance Sheet to the
     close of business on the Distribution Date that is owned by Vencor or any
     of its Subsidiaries as of the close of business on the Distribution Date
     and that is of a nature or type that would have resulted in such asset
     being included as an asset on the Healthcare Company Pro Forma Balance
     Sheet had it been acquired on or prior to the date of the Healthcare
     Company Pro Forma Balance Sheet, determined on a basis consistent with the
     determination of the assets included on the Healthcare Company Pro Forma
     Balance Sheet.

          "Healthcare Company Common Stock" shall have the meaning set forth in
           -------------------------------
the preamble to this Agreement.

          "Healthcare Company Financing Transactions" shall mean the entry into
           -----------------------------------------
or issuance by Healthcare Company of (i) a revolving credit facility in the
amount of $300 million, (ii) a term loan in the amount of $300 million, (iii) a
second term loan in the amount of $200 million, (iv) a bridge loaf in the
amount of $200 million, (v) $17.7 million proceeds of Healthcare Company
preferred stock and (vi) $300 million of senior subordinated debt or such other
financing transactions approved by the Healthcare Company Board of Directors.

          "Healthcare Company Group" shall mean Healthcare Company, the
           ------------------------
Healthcare Company Subsidiaries and the corporations, partnerships, limited
liability companies, joint ventures, investments and other entities that
represent equity investments of Healthcare Company or any of the Healthcare
Company Subsidiaries following the consummation of the Corporate Restructuring
Transactions and the Distribution.

          "Healthcare Company Liabilities" shall mean, collectively, all of the
           ------------------------------
Liabilities of Healthcare Company, the Healthcare Company Subsidiaries and each
of the other members of the Healthcare Company Group after giving effect to the
Corporate Restructuring Transactions, the Distribution and the transactions
contemplated under the Debt and Cash Allocation Agreement, including, without
limitation:

          (i)   all the Liabilities included on the Healthcare Company Pro Forma
     Balance Sheet which remain outstanding as of the close of business on the
     Distribution Date;

          (ii)  all other Liabilities that are incurred or which accrue or are
     accrued at any time prior to, on or after the date of the Healthcare
     Company Pro Forma Balance Sheet and that arise or arose out of, or in
     connection with, the Healthcare Company Assets or the Healthcare Business,
     determined on a basis consistent with the determination of the Liabilities
     of Healthcare Company on the Healthcare Company Pro Forma Balance Sheet;

          (iii) all the Liabilities of Healthcare Company, the Healthcare
     Company Subsidiaries or any of the other members of the Healthcare Company
     Group under, or to be retained or assumed by Healthcare Company, any
     Healthcare Company Subsidiary or any of the other members of the
     Healthcare Company Group pursuant to this Agreement or any of the
     Ancillary Agreements; and

                                     - 4 -

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          (iv) all the Liabilities of the parties hereto or their respective
     Subsidiaries (whenever arising whether prior to, at or following the
     Distribution Data) arising out of or in connection with or otherwise
     relating to the management or conduct before or after the Distribution
     Date of the Healthcare Business, except as otherwise specifically provided
     herein.

          "Healthcare Company Pro Forma Balance Sheet" shall mean the pro forma
           ------------------------------------------
balance sheet of Healthcare Company at December 31, 1997 attached hereto as
Exhibit B.
---------

          "Healthcare Company Subsidiaries" shall mean all of the subsidiaries
           -------------------------------
listed on Schedule 1.01(a) of this Agreement.
          ----------------

          "Law" shall mean all laws, statutes and ordinances and all
           ---
regulations, rules and other pronouncements of Governmental Authorities having
the effect of law of the United States, any foreign country, or any domestic or
foreign state, province, commonwealth, city, country, municipality, territory,
protectorate, possession or similar instrumentality, or any Governmental
Authority thereof.

          "Liabilities" shall mean any and all debts, liabilities, obligations,
           -----------
responsibilities, response actions, losses, damages (whether compensatory,
punitive or treble), fines, penalties and sanctions, absolute or contingent,
matured or unmatured, liquidated or unliquidated, foreseen or unforeseen,
joint, several or individual, asserted or unasserted, accrued or unaccrued,
known or unknown, whenever arising, including without limitation those arising
under or in connection with any Law (including any Environmental Law!, Action,
threatened Action, order or consent decree of any Governmental Authority or any
award of any arbitration tribunal, and those arising under any contract,
guarantee, commitment or undertaking, whether sought to be imposed by a
Governmental Authority, private party, or party to this Agreement, whether
based in contract, tort, implied or express warranty, strict liability,
criminal or civil statute, or otherwise, and including any costs, expenses,
interest, attorneys' fees, disbursement and expense of counsel, expert and
consulting fees and costs related thereto or to the investigation or defense
thereof.

          "NYSE" shall mean the New York Stock Exchange, Inc.
           ----

          "Person" shall mean an individual, a partnership, a joint venture, a
           ------
corporation, a trust, a limited liability company, an unincorporated
organization or a government or any department or agency thereof.

          "Real Estate Business" shall have the meaning set forth in the
           --------------------
preamble to this Agreement.

          "Registration Statement" shall mean the registration statement on
           ----------------------
Form 10 to effect the registration of the Healthcare Company Common Stock
pursuant to the Exchange Act.

          "Reorganization Agreement" shall mean the Agreement and Plan of
           ------------------------
Reorganization by and between Vencor and Healthcare Company which shall be
entered into prior to or on the Distribution Date.

                                     - 5 -

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          "Subsidiary" shall mean with respect to any specified Person, any
           ----------
corporation or other legal entity of which such Person or any of its
Subsidiaries controls or owns, directly or indirectly, more than 50% of the
stock or other equity interest entitled to vote on the election of members to
the board of directors or similar governing body; provided, however, that for
                                                  --------  -------
purposes of this Agreement, (a) the Healthcare Company Subsidiaries shall be
deemed to be Subsidiaries of Healthcare Company and (b) Healthcare Company and
the Healthcare Company Subsidiaries shall not be deemed to be Subsidiaries of
Vencor or any of Vencor's Subsidiaries.

          "Tax Allocation Agreement" shall mean the Tax Allocation Agreement by
           ------------------------
and between Vencor and Healthcare Company, which agreement shall be entered
into prior to or on the Distribution Date in the form attached to the
Reorganization Agreement as Exhibit K.
                            ---------

          "Vencor" shall have the meaning set forth in the preamble to this
           ------
Agreement.

          "Vencor Assets" shall mean, collectively, all the rights and assets
           -------------
that are owned by Vencor or any of its Subsidiaries as of the close of business
on the Distribution Date (other than the Healthcare Company Assets and the
capital stock of Healthcare Company and the Healthcare Company Subsidiaries),
including without limitation:

          (i)   the capital stock of the Vencor Subsidiaries;

          (ii)  all the assets included on the Vencor Pro Forma Balance Sheet
     which are owned by Vencor and its Subsidiaries as of the close of business
     on the Distribution Date, including the real property to be retained by
     Vencor in connection with the Corporate Restructuring Transactions;

          (iii) all the assets and rights expressly allocated to Vencor or any
     of its Subsidiaries under this Agreement and any of the Ancillary
     Agreements; and

          (iv)  any other asset acquired by Vencor or any of its Subsidiaries
     from the date of the Vencor Pro Forma Balance Sheet to the close of
     business on the Distribution Date that is owned by Vencor or any of its
     Subsidiaries and that is of a nature of type that would have resulted in
     such asset being included as an asset on the Vencor Pro Forma Balance
     Sheet had it been acquired on or prior to the date of the Vencor Pro Forma
     Balance Sheet, determined on a basis consistent with the determination of
     the assets included on the Vencor Pro Forma Balance Sheet.

          "Vencor Certificate Amendments" shall mean the amendments to the
           -----------------------------
Vencor Certificate of Incorporation proposed by the Board of Directors of
Vencor to be considered and voted on by the stockholders of Vencor at the
Annual Meeting.

          "Vencor Common Stock" shall have the meaning set forth in the
           -------------------
preamble to this Agreement.

          "Vencor Financing Transactions" shall mean the entry into by Vencor
           -----------------------------
of (i) a revolving credit facility in the amount of $250 million, (ii) a term
loan in the amount of $250 million, (iii) a second term loan in the amount of
$250 million and (iv) a bridge loan in the

                                     - 6 -

<PAGE>

amount of $450 million or such other financing transactions approved by the
Vencor Board of Directors.

          "Vencor Group" means Vencor, the Vencor Subsidiaries and the
           ------------
corporations, partnerships, joint ventures, investments and other entities that
represent equity investments of Vencor or any of the Vencor Subsidiaries
following consummation of the Corporate Restructuring Transactions and the
Distribution.

          "Vencor Pro Forma Balance Sheet" shall mean the pro forma balance
           ------------------------------
sheet of Vencor attached hereto as Exhibit C.

          "Vencor Subsidiaries" shall mean the Subsidiaries of Vencor set
           -------------------
forth on Schedule 1.01(b) of this Agreement and all other Subsidiaries of
         ----------------
Vencor other than Healthcare Company and the Healthcare Company Subsidiaries.

                                 ARTICLE II.

                           DISTRIBUTION TRANSACTIONS

          2.01. Vencor Action Prior to the Distribution.  Prior to the
                ---------------------------------------
Distribution, subject to the terms and conditions set forth herein, Vencor
shall take, or cause to be taken, the following actions in connection with the
Distribution.

          (a)   Notice to NYSE.  Vencor shall, to the extent possible, give the
                --------------
NYSE not less than ten days advance notice of the Distribution Record Date in
compliance with Rule 10b-17 under the Exchange Act.

          (b)   Distribution Transactions.  Vencor shall cause all transactions
                -------------------------
contemplated by the Reorganization Agreement to have occurred prior to, or to
occur simultaneous with, the consummation of this Agreement.

          2.02. The Distribution.
                ----------------

          (a)   Duties and Obligations of Vencor.  Subject to the conditions
                --------------------------------
herein, on or prior to the Distribution Date, Vencor shall:

             (i)  deliver to the Agent the share certificates representing the
     Healthcare Company Common Stock, endorsed by Vencor in blank, for the
     benefit of the holders of Vencor Common Stock;

             (ii) instruct the Agent to distribute, as soon as practicable
     following consummation of the Distribution, to the holders of Vencor
     Common Stock the following:

                (A) one share of Healthcare Company Common Stock for every
          share of Vencor Common Stock, and

                                     - 7 -

<PAGE>

                (B) cash, if, applicable, in lieu of fractional shares obtained
          in the manner provided in Section 2.03; and

             (iii) subject to stockholder approval at the Annual Meeting of the
     Vencor Certificate Amendment to change the name of Vencor to "Ventas,
     Inc.," instruct the Agent to distribute, as soon as practicable following
     consummation of the Distribution, to the holders of certificated shares of
     Vencor Common Stock a letter of transmittal providing for such holders to
     forward to the Agent all of their certificated shares of Vencor Common
     Stock in order to exchange such shares for a corresponding number of new
     certificated shares of Vencor Common Stock which reflect such name change.

          (b) Duties and Responsibilities of Healthcare Company.  Healthcare
              -------------------------------------------------
Company shall provide, or cause to be provided, to the Agent sufficient
certificates representing Healthcare Company Common Stock in such denominations
as the Agent may request in order to effect the Distribution. All shares of
Healthcare Company Common Stock issued pursuant to the Distribution will be
validly issued, fully paid and nonassessable and free of any preemptive (or
similar) rights.

          2.03. Fractional Shares.
                -----------------

          (a)   No Fractional Shares.  Notwithstanding anything herein to the
                --------------------
contrary, no fractional shares of Healthcare Company Common Stock shall be
issued in connection with the Distribution, and any such fractional share
interests to whach a stockholder would otherwise be entitled will not entitle
such stockholder to vote or to afy rights of a stockholder of Healthcare
Company. In lieu of any such fractional shares, each stockholder who, but for
the provisions of this Section, would be entitled to receive a fractional share
interest of Healthcare Company Common Stock pursuant to the Distribution shall
be paid cash without any interest thereon, as hereinafter provided. Vencor
shall instruct the Agent to determine the number of whole shares and fractional
shares of Healthcare Company Common Stock allocable to each stockholder, to
aggregate all such fractional shares into whole shares, to sell the whole
shares obtained thereby in the open market at the then prevailing prices on
behalf of stockholders who otherwise would be entitled to receive fractional
share interests and to distribute to each such stockholder his, her or its
ratable share of the total proceeds of such sale, after making appropriate
deductions of the amount required for Federal income tax withholding purposes
and after deducting any applicable transfer taxes. All brokers' fees and
commissions incurred in connection with such sales shall be paid by Vencor

          (b)   Unclaimed Stock or Cash.  Any Healthcare Company Common Stock or
                -----------------------
cash in lieu of fractional shares and dividends or distributions with respect
to Healthcare Company Common Stock that remain unclaimed by any stockholder 180
days after the Distribution Date shall be returned to Vencor and any such
stockholders shall look only to Vencor for the Healthcare Company Common Stock
and cash, if any, in lieu of fractional share interests and any such dividends
or distributions to which they are entitled, subject in each case to applicable
escheat or other abandoned property laws.

                                     - 8 -

<PAGE>

          (c) Beneficial Owners.  Solely for purposes of computing fractional
              -----------------
share interests pursuant to Section 2.03(a), the beneficial owner of shares of
Vencor Common Stock or Healthcare Company Common Stock held of record in the
name of a nominee will be treated as the holder of record of such shares.

                                 ARTICLE III.

                        CONDITIONS TO THE DISTRIBUTION

          3.01. Conditions to Obligations.
                -------------------------

          (a) The obligations of the parties hereto to consummate the
Distribution are subject to the satisfaction, as determined by Vencor in its
sole discretion, of each of the following conditions:

               (i)   The Reorganization Agreement shall have been approved by
     the holders of a majority of the outstanding shares of Vencor Common Stock
     at the Annual Meeting;

               (ii)  The Dastribution shall have been approved by the holders of
     a majority of the outstanding shares of Vencor Common Stock at the Annual
     Meeting and by the Vencor Board of Directors;

               (iii) Each of the Vencor Certificate Amendments shall have been
     approved by the holders of a majority of the outstanding shares of Vencor
     Common Stock;

               (iv)  The transactions contemplated by Article II of the
     Reorganization Agreement, including the Corporate Restructuring
     Transactions, shall have been consummated in all material respects;

               (v)   The Healthcare Company Common Stock shall have been
approved for listing on the NYSE, subject to official notice of issuance;

               (vi)  The Registration Statement shall have been filed with the
     SEC and shall have become effective, and no stop order with respect
     thereto shall be in effect;

               (vii) All material authorizations, consents, approvals and
     clearances of Federal, state, local and foreign governmental agencies
     required to permit the valid consummation by the parties hereto of the
     transactions contemplated by this Agreement and the Reorganization
     Agreement shall have been obtained; and no such authorization, consent,
     approval or clearance shall contain any conditions which would have a
     material adverse effect on (A) the Real Estate Business or the Healthcare
     Business, (B) the Healthcare Company Assets and Vencor Assets, results of
     operations or financial condition of the Vencor Group or the Healthcare
     Company Group, in each case taken as a whole, or (C) the ability of Vencor
     or Healthcare Company to perform its obligations under this Agreement and
     the Reorganization Agreement; and all statutory requirements for such
     valid consummation shall have been fulfilled;

                                     - 9 -

<PAGE>

               (viii) No preliminary or permanent injunction or other order,
     decree or ruling issued by a court of competent jurisdiction or by a
     government, regulatory or administrative agency or commission, and no
     statute, rule, regulation or executive order promulgated or enacted by any
     governmental authority, shall be in effect preventing the consummation of
     this Agreement, the Reorganization Agreement or the Distribution;

               (ix) The Financing Transactions shall have occurred and all bank
     credit agreements, debt security or other financing facility entered into
     pursuant thereto shall be in place and all conditions to borrowing
     thereunder (other than any conditions concerning consummation of the
     Distribution and the transfers of assets and liabilities described
     hereunder) shall have been satisfied, and all necessary consents, waivers
     or amendments to each bank credit agreement, debt security or other
     financing facility to which any member of the Vencor Group or the
     Healthcare Company Group is a party or by which any such member is bound
     shall have been obtained, or each such agreement, security or facility
     shall have been refinanced, in each case on terms satisfactory to Vencor
     and to the extent necessary to permit the Distribution to be consummated
     without any material breach of the terms of such agreement, security or
     facility; and

               (x) An officer of Vencor shall have instructed the Agent to make
     the Distribution effective.

          (b) The foregoing conditions are for the sole benefit of Vencor and
shall not give rise to any duty on the part of Vencor or its Board of Directors
to waive or not waive any such condition. Any determination made by the Board
of Directors of Vencor in good faith on or prior to the Distribution Date
concerning the satisfaction or waiver of any or all of the conditions set forth
in Section 3.01(a) shall be conclusive.

          3.02. No Constraints.  Notwithstanding the provisions of Section
                --------------
3.01, the fulfillment or waiver of any or all of the conditions precedent to
the Distribution set forth therein shall not:

          (a) create any obligation on the part of Vencor or any other party
hereto to effect the Distribution;

          (b) in any way limit Vencor's right and power under Section 4.12 to
terminate this Agreement or the Reorganization Agreement and the process
leading to the Distribution and to abandon the Distribution; or

          (c) alter the consequences of any such termination under Section 4.12
from those specified in such Section.

          3.03. Deferral of the Distribution Date.  If the Distribution Date
                ---------------------------------
shall have been established by the Board of Directors of Vencor but all the
conditions precedent to the Distribution set forth in this Agreement have not
theretofore been fulfilled or waived, or Vencor does not reasonably anticipate
that they will be fulfilled or waived, on or prior to the date established as
the Distribution Date, the Distribution shall not occur at the time established
and, Vencor may, by resolution of its Board of Directors (or a committee
thereof, so authorized), defer the Distributiof Date to a later date.

                                     - 10 -

<PAGE>

          3.04. Public Notice of the Deferred Distribution Date.  If the
                -----------------------------------------------
Distribution Date is deferred in accordance with Section 3.03 and public
announcement of the prior Distribution Date has theretofore been made, Vencor
shall promptly thereafter issue a public announcement with respect to such
deferment and shall take such other actions as may be deemed necessary or
desirable with respect to the dissemination of such information.

                                   ARTICLE IV.

                                  MISCELLANEOUS

          4.01. Indemnification, Access to Information and Dispute Resolution.
                -------------------------------------------------------------
Each of Vencor and Healthcare Company hereby agrees that Articles III, V and VI
of the Reorganization Agreement regarding indemnification, access to
information and dispute resolution shall be applicable in all respects to this
Agreement.

          4.02. Complete Agreement.  This Agreement, the Exhibits and Schedules
                ------------------
hereto, the Ancillary Agreements and the agreements and other documents
referred to herein shall constitute the entire agreement between the parties
hereto with respect to the subject matter hereof and shall supersede all
previous negotiations, commitments and writings with respect to such subject
matter.

          4.03. Expenses.  All costs and expenses of any party hereto whether
                --------
incurred prior to or after the Distribution Date in connection with the
preparation, execution, delivery and implementation of this Agreement and with
the consummation of the transactions contemplated by this Agreement and the
Ancillary Agreements, including but not limited to legal fees, accounting fees,
investment banking fees, and all such other costs and expenses shall be
allocated among Vencor and the Healthcare Company in accordance with the Debt
and Cash Allocation Agreement and the Tax Allocation Agreement.

          4.04. Governing Law.  This Agreement shall be governed by and
                -------------
construed in accordance with the laws of the State of Delaware (other than the
laws regarding choice of laws and conflicts of laws) as to all matters,
including matters of validity, construction, effect, performance and remedies.

          4.05. Notices,  All notices, requests, claims, demands and other
                -------
communications hereunder (collectively, "Notices") shall be in writing and
                                         -------
shall be given (and shall be deemed to have been duly given upon receipt) by
delivery an person, by cable, telegram, facsimile, electronic mail or other
standard form of telecommunications (provided confirmation is delivered to the
recipient the next Business Day in the case of facsimile, electronic mail or
other standard form of telecommunications) or by registered or certified mail,
postage prepaid, return receipt requested, addressed as follows:

                                     - 11 -

<PAGE>

          If to Vencor:

               President
               Vencor, Inc.
               3300 Aegon Center
               400 West Market Street
               Louisville, Kentucky 40202
               Telephone:  (502) 596-7300
               Facsimile:  (502) 596-4026

          with a copy to:

               General Counsel
               Vencor, Inc.
               3300 Aegon Center
               400 West Market Street
               Louisville, Kentucky 40202
               Telephone:  (502) 596-7300
               Facsimile:  (502) 596-4075

          If to Healthcare Company:

               President
               Vencor Healthcare, Inc,
               3300 Aegon Center
               400 West Market Street
               Louisville, Kentucky 40202
               Telephone:  (502) 596-7300
               Facsimile:  (502) 596-4026

          with a copy to:

               General Counsel
               Vencor Healthcare, Inc.
               3300 Aegon Center
               400 West Market Street
               Louisville, Kentucky 40202
               Telephone:  (502) 596-7300
               Facsimile:  (502) 596-4075

or to such other address as any party hereto may have furnished to the other
parties by a notice in writing in accordance with this Section 4.05.

          4.06. Amendment and Modification.  This Agreement may be amended,
                --------------------------
modified or supplemented only by a written agreement signed by both of the
parties hereto.

          4.07. Successors and Assigns; No Third Party Beneficiaries.  This
                ----------------------------------------------------
Agreement and all of the provisions hereof shall be binding upon and inure to
the benefit of the parties

                                     - 12 -

<PAGE>

hereto and their successors and permitted assigns but neither this Agreement
nor any of the rights, interests and obligations hereunder shall be assigned by
any party hereto without the prior written consent of the other party (which
consent shall not be unreasonably withheld or delayed). This Agreement is
solely for the benefit of the parties hereto and their Subsidiaries and
Affiliates and is not intended to confer upon any other Persons any rights or
remedies hereunder.

          4.08. Counterparts.  This Agreement may be executed in two or more
                ------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

          4.09. Interpretation.  The Article and Section headings contained in
                --------------
this Agreement are solely for the purpose of reference, are not part of the
agreement of the parties hereto and shall not in any way affect the meaning or
interpretation of this Agreement.

          4.10. Legal Enforceability.  Any provision of this Agreement which is
                --------------------
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof. Any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. Each party
acknowledges that money damages would be an inadequate remedy for any breach of
the provisions of this Agreement and agrees that the obligations of the parties
hereunder shall be specifically enforceable.

          4.11. References; Construction.  References to any "Article",
                ------------------------
"Exhibit", "Schedule" or "Section", without more, are to Appendices, Articles,
Exhibits, Schedules and Sections to or of this Agreement. Unless otherwise
expressly stated, clauses beginning with the term "including" set forth
examples only and in no way limit the generality of the matters thus
exemplified.

          4.12. Termination.  Notwithstanding any provision hereof, this
                -----------
Agreement may be terminated and the Distribution abandoned at any time prior to
the Distribution Date by and in the sole discretion of the Board of Directors
of Vencor without the approval of any other party hereto or of Vencor's
stockholders. In the event of such termination, no party hereto shall have any
Liability to any Person by reason of this Agreement.

                                     - 13 -

<PAGE>

          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first above written.

                                       VENCOR, INC.

                                       By:  /s/ Jill L. Force
                                            ----------------------------------
                                            Name:   Jill L. Force
                                            Title:  Senior Vice President and
                                                    General Counsel

                                       VENCOR HEALTHCARE, INC.

                                       By:  /s/ Jill L. Force
                                            ----------------------------------
                                            Name:   Jill L. Force
                                            Title:  Senior Vice President and
                                                    General Counsel

                                     - 14 -<PAGE>

                                                                EXHIBIT 10.4.3.3

                              CASH ESCROW AGREEMENT

                  This CASH ESCROW AGREEMENT (this "Agreement") is dated as of
                                                    ---------
the 20/th/ day of April, 2001, by and among Vencor Inc. (to be renamed "Kindred
Healthcare, Inc."), a Delaware corporation ("Vencor"), Ventas, Inc., a Delaware
                                             ------
corporation ("Ventas"), and State Street Bank and Trust Company, a Massachusetts
              ------
trust company (the "Escrow Agent"), as escrow agent. Vencor and Ventas are
                    ------------
sometimes referred to herein, collectively, as the "Interested Parties."
                                                    ------------------

                  WHEREAS, Vencor and Ventas have entered into a Tax Refund
Escrow Agreement (the "Refund Agreement") as of the date hereof;
                       ----------------

                  WHEREAS, pursuant to Section 2 of the Refund Agreement, the
Interested Parties have agreed to deposit amounts held under the Tax Stipulation
Agreement and any other Subject Refunds (as defined in the Refund Agreement)
received by the Interested Parties after the effective date of the Refund
Agreement (the "Escrow Deposit", and together with any investment income or
                --------------
proceeds received by the Escrow Agent from the investment thereof from time to
time pursuant to Section 4 below, collectively, the "Escrow Property") into an
                                                     ---------------
escrow account established pursuant to this Escrow Agreement;

                  WHEREAS, Vencor and Ventas have agreed that the Escrow
Property shall be held in escrow and shall be disbursed and used as described in
the Refund Agreement;

                  WHEREAS, the Interested Parties wish to engage the Escrow
Agent to act, and the Escrow Agent is willing to act, as escrow agent hereunder
and, in that capacity, to hold, administer and distribute the amounts deposited
in escrow hereunder in accordance with, and subject to, the terms of this
Agreement;

                  NOW THEREFORE, for valuable consideration, the receipt whereof
is hereby acknowledged, the parties hereto agree as follows:

Section 1.        Definitions.
                  -----------

                  As between the Interested Parties, capitalized terms not
otherwise defined in this Agreement shall have the meaning given to them in the
Refund Agreement.

                  "Business Day" means any day other than a Saturday, Sunday, or
                   ------------
other day on which the Escrow Agent is authorized by law to close.

                  "Eligible Investments" shall mean (i) obligations issued or
                   --------------------
guaranteed by the United States of America or any agency or instrumentality
thereof (provided that the full faith and credit of the United States is pledged
in support thereof); (ii) obligations (including certificates of deposit and
banker's acceptances) of any domestic commercial bank having capital and surplus
in excess of $500,000,000; (iii) repurchase obligations for underlying
securities of the type described in clause (i); (iv) commercial paper rated not
lower than A-1 by Standard & Poor's Corporation or P-1 by Moody's Investors
Service, Inc. with maturities of not more than six months and one day; or (v)
investment in the Escrow Agent's "Insured Money

<PAGE>

Market Fund" ("IMMA"). If otherwise qualified, obligations of the Escrow Agent
               ----
or any of its affiliates shall qualify as Eligible Investments.

Section 2.  Deposit of Escrow Funds or Property.
            -----------------------------------

            2.1.   Vencor shall deliver the sum of $2,762,822.25, and Ventas
shall deliver the sum of $28,122,357.03, to the Escrow Agent. The Escrow Agent
agrees to hold the Escrow Property in an account established with the Escrow
Agent (the "Escrow Account"), and to administer the Escrow Property in
            --------------
accordance with the terms of this Agreement. Each of Vencor and Ventas
represents, respectively, that its transfer under this Section 2.1 to the Escrow
Agent is the entire amount required to be so transferred pursuant to Section
2(a) of the Refund Agreement. The Escrow Agent shall promptly acknowledge
receipt of such funds when received.

            2.2.   Upon delivery of additional funds to the Escrow Agent by
either of Vencor or Ventas, pursuant to section 2(b) of the Refund Agreement,
such funds shall be added to the Escrow Deposit, and the Escrow Agent shall
provide to the depositor a receipt evidencing such deposit.

Section 3.  Claims and Payment; Release from Escrow.
            ----------------------------------------

            3.1.   The Escrow Agent shall release from escrow and deliver the
Escrow Property (or any portion thereof) as follows:

                   (a) Within one Business Day after the Deposits are
transferred to the Escrow Agent, the Escrow Agent shall distribute to each
Interested Party $1,359,520.72 (Vencor and Ventas agree that this amount
represents 50% of the aggregate amount to be distributed pursuant to Section
7(a) of the Tax Refund Escrow Agreement).

                   (b) To an Interested Party, as a certified check payable
directly to a specified tax authority (for the account of an Interested Party),
at the written direction of any Interested Party, five (5) Business Days after
receipt of, and in accordance with, written instructions to the Escrow Agent
signed by such Interested Party (a "Tax Payment Instruction"), which Tax Payment
                                    -----------------------
Instruction must certify and represent that (i) the certified check is in the
amount due with respect to a Subject Tax assessed or imposed against the
Interested Party, (ii) the notice and contest provisions of the Refund Agreement
applying to such Subject Tax were complied with, (iii) that such Subject Tax
will be due (without incurring additional interest or penalties) within eight
(8) Business Days of the receipt of the Tax Payment Instruction, (iv) a copy of
such Tax Payment Instruction had been contemporaneously delivered to the other
Interested Party and (v) that three (3) days notice had been provided to the
other Interested Party in accordance with the provisions of Section 6(c) of the
Refund Agreement;

                   (c) To an Interested Party or directly to a third-party, at
the written direction of any Interested Party, within five (5) Business Days
after receipt of, and in accordance with, written instructions to the Escrow
Agent signed by such Interested Party (a "Contest Payment Instruction"), which
                                          ---------------------------
Contest Payment Instruction must certify and represent that (i) such amount is
in respect of a reasonable third-party cost of a Claim or Contest, or a
Preparation Cost, in each case as provided for in Sections 5(a)(ii) of the
Refund Agreement, and

                                        2

<PAGE>

(ii) that such Contest Payment Instruction is accompanied by any relevant
invoices issued by third-parties and that a copy of such invoices has been
contemporaneously provided to the other Interested Party;

                 (d) In accordance with written instructions to the Escrow Agent
signed by both Interested Parties (a "Joint Payment Instruction") directing the
                                      -------------------------
Escrow Agent to release the Escrow Property or any portion thereof in accordance
with such Joint Payment Instruction;

                 (e) Without instruction from either Interested Party, the
Escrow Agent shall distribute on or before each January 15th of each year during
the term of this Agreement to each of Vencor and Ventas an amount equal to 50%
of all (i) interest and other income earned or received on the Escrow Property
and (ii) all interest received from a taxing authority that was part of the
Escrow Property (as identified by an Interested Party to the Escrow Agent upon
deposit of Subject Taxes pursuant to Section 2.2 hereof);

                 (f) In accordance with the terms of any unstated order,
judgment or decree by a court or arbitrator ordering the release of the Escrow
Property or any portion thereof;

                 (g) After providing written notice to the Interested Parties,
in accordance with the terms of this Agreement, solely with respect to the fees,
costs and expenses of the Escrow Agent; and

                 (h) Upon receipt by the Escrow Agent of written instructions
signed by both Interested Parties (a "Termination Payment Instruction"), which
                                      -------------------------------
Termination Payment Instruction must certify that no further Claims may be made
by a taxing authority because the applicable statute of limitations on
assessments has expired or otherwise, and that no further deposits shall be made
pursuant Section 2(b) of the Refund Agreement, this Agreement shall be
terminated as to the Escrow Agent, except that the provisions of Sections
3.1(h), 3.2, 7(c), 8 and 15 herein shall survive, and any amounts remaining in
the Escrow Account shall be delivered 50% to Vencor and 50% to Ventas.

            3.2. Notwithstanding the receipt of written instructions pursuant to
Section 3.1 hereof, the Parties agree that such written instruction may be
withdrawn, and be of no further force and effect, by a written notice (including
by telex or facsimile) to the Escrow Agent from the Interested Party that
initially provided the written instruction (or, if both Interested Parties
signed the written instruction, from either of them), received by the Escrow
Agent any time prior to payment from the Escrow Account pursuant to Section 3.1
hereof in reliance upon the prior written instruction desired to be withdrawn.

Section 4.  Investment of Funds.
            --------------------

            4.1. Investment of Escrow Property. The Escrow Agent shall be
                 -----------------------------
authorized to, and shall, invest the Escrow Property, in Repurchase Agreements,
for a period of one (1) Business Day from the date hereof, and, if the Escrow
Agent shall have received specific joint written investment instruction from
Vencor and Ventas (which shall include instruction as to term to maturity, if
applicable), on a timely basis, the Escrow Agent shall invest the Escrow
Property in Eligible Investments, pursuant to and as directed in such
instruction. To the extent the Escrow Agent has not received such specific
written instruction, or such written instruction

                                       3

<PAGE>

has, by its terms, expired or otherwise is ineffective, the Escrow Property
shall be invested in the Janus Government Money Market Fund (#882).

            4.2. Escrow Agent Not Responsible For Investment Decisions. Absent
                 -----------------------------------------------------
its timely receipt of such specific joint written investment instruction from
Vencor and Ventas, the Escrow Agent shall be authorized to, and shall, invest
any of the Escrow Property in the Janus Government Money Market Fund (#882)
until specific written investment instruction is received from Vencor and
Ventas. All earnings received from the investment of the Escrow Property shall
be credited to, and shall become a part of, the Escrow Property (and any losses
on such investments shall be debited to the Escrow Account). The Escrow Agent
shall have no liability for any investment losses, including without limitation
any market loss on any investment liquidated prior to maturity in order to make
a payment required hereunder.

            4.3. Tax Reporting. The Interested Parties and the Escrow Agent
                 -------------
agree to treat each of Vencor and Ventas as the tax owner of 50% of the Escrow
Property and to file all tax reports consistently with such treatment. The
Interested Parties agree that, for tax reporting purposes, all interest or other
income earned from the investment of the Escrow Property in any tax year shall
be reported as allocated equally to each of the Interested Parties. The Escrow
Agent will provide any necessary taxpayer tax reporting forms or certificates to
Vencor and Ventas consistent therewith.

            4.4. Certification of Taxpayer Identification Number. The Interested
                 -----------------------------------------------
Parties hereto agree to provide the Escrow Agent with a certified tax
identification number by signing and returning a Form W-9 to the Escrow Agent
upon the execution and delivery of this Agreement. The Interested Parties
understand that, in the event their tax identification numbers are not certified
to the Escrow Agent, the Internal Revenue Code, as amended from time to time,
may require withholding of a portion of any interest or other income earned on
the investment of the Escrow Property.

            4.5. Quarterly and Annual Reports. The Escrow Agent shall, within
                 ----------------------------
fifteen (15) calendar days following the end of each quarterly period during
each calendar year commencing with the date of this Agreement, provide a written
statement to Vencor and Ventas reporting the interest or other income earned on
the Escrow Property during that quarter and over the current taxable year and
the assets on hand as of the end of such quarter and a detailed summary of all
payments made out of the Escrow Property during such quarter. The Escrow Agent
shall provide an annual report containing such information for each calendar
year by January 15th immediately following each calendar year. The currently
applicable taxable year of each Interested Party is the calendar year, which may
be changed by either Interested Party with a written notice to the Escrow Agent
thirty days prior to the requested change.

Section 5.  Intentionally omitted.
            ----------------------

Section 6.  Concerning the Escrow Agent.
            ----------------------------

                 (a) Each Interested Party acknowledges and agrees that the
Escrow Agent (i) shall not be responsible for any of the agreements referred to
or described herein (including without limitation the Refund Agreement), or for
determining of compelling

                                       4

<PAGE>

compliance therewith, and shall not otherwise be bound thereby, (ii) shall be
obligated only for the performance of such duties as are expressly and
specifically set forth in this Agreement on its part to be performed, each of
which is ministerial (and shall not be construed to be fiduciary) in nature, and
no implied duties or obligations of any kind shall be read into this Agreement
against or on the part of the Escrow Agent, (iii) shall not be obligated to take
any legal or other action hereunder which might in its judgment involve or cause
it to incur any expense or liability unless it shall have been furnished with
acceptable indemnification, (iv) may rely on and shall be protected in acting or
refraining from acting upon any written notice, instruction (including, without
limitation, wire transfer instructions, whether incorporated herein or provided
in a separate written instruction), instrument, statement, certificate, request
or other document furnished to it hereunder and believed by it to be genuine and
to have been signed or presented by the proper person, and shall have no
responsibility or duty to make inquiry as to or to determine the genuineness,
accuracy or validity thereof (or any signature appearing thereon), or of the
authority of the person signing or presenting the same, and (v) may consult
counsel satisfactory to it, including in-house counsel, and the opinion or
advice of such counsel in any instance shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in accordance with the opinion or advice of such
counsel. Any references herein to joint instructions or words of similar import
include any instructions signed in counterpart.

          (b) The Escrow Agent shall not be liable to anyone for any action
taken or omitted to be taken by it hereunder except in the case of the Escrow
Agent's gross negligence or willful misconduct in breach of the terms of this
Agreement. In no event shall the Escrow Agent be liable for indirect, punitive,
special or consequential damage or loss (including but not limited to lost
profits) whatsoever, even if the Escrow Agent has been informed of the
likelihood of such loss or damage and regardless of the form of action.

          (c) The Escrow Agent shall have no more or less responsibility or
liability on account of any action or omission of any book entry depository,
securities intermediary or other subescrow agent employed by the Escrow Agent
than any such book-entry depository, securities intermediary or other subescrow
agent has to the Escrow Agent, except to the extent that such action or omission
of any book entry depository, securities intermediary or other subescrow agent
was caused by the Escrow Agent's own gross negligence or willful misconduct in
breach of this Agreement.

          (d) The Escrow Agent is hereby authorized, in making or disposing of
any investment permitted by this Agreement, to deal with itself (in its
individual capacity) or with any one or more of its affiliates, whether it or
such affiliate is acting as a subagent of the Escrow Agent or for any third
person or dealing as principal for its own account.

          (e) Notwithstanding any term appearing in this Agreement to the
contrary, in no instance shall the Escrow Agent be required or obligated to
distribute any Escrow Property (or take other action that may be called for
hereunder to be taken by the Escrow Agent) sooner than two (2) Business Days
after (i) it has received the applicable documents required under this Agreement
in good form, or (ii) passage of the applicable time period (or both, as
applicable under the terms of this Agreement), as the case may be.

                                       5

<PAGE>

                (f) Unless and except to the extent otherwise expressly set
forth herein, all deposits and payments hereunder, or pursuant to the terms
hereof (including without limitation all payments to the Escrow Agent pursuant
to Section 7, shall be in U.S. dollars.

Section 7.  Compensation, Expense Reimbursement and Indemnification.
            -------------------------------------------------------

                (a) Each of the Interested Parties agrees, jointly and severally
(i) to pay or reimburse the Escrow Agent for reasonable attorneys fees and
expenses incurred in connection with the preparation of this Agreement and (ii)
to pay the Escrow Agent's compensation for its normal services hereunder in
accordance with the fee schedule attached hereto as Exhibit A and made a part
hereof, which may be subject to change hereafter by the Escrow Agent on an
annual basis with the written consent of the Interested Parties.

                (b) Each of the Interested Parties agrees, jointly and
severally, to reimburse the Escrow Agent on demand for all reasonable costs and
expenses incurred in connection with the administration of this Agreement or the
escrow created hereby or the performance or observance of its duties hereunder
which are in excess of its compensation for normal services hereunder, including
without limitation, payment of any reasonable legal fees and expenses incurred
by the Escrow Agent in connection with resolution of any claim by any party
hereunder.

                (c) Each of the Interested Parties covenants and agrees, jointly
and severally, to indemnify the Escrow Agent (and its directors, officers and
employees) and hold it (and such directors, officers and employees) harmless
from and against any loss, liability, damage, cost and expense of any nature
incurred by the Escrow Agent arising out of or in connection with this Agreement
or with the administration of its duties hereunder, including but not limited to
attorney's fees and other costs and expenses of defending or preparing to defend
against any claim of liability unless and except to the extent such loss,
liability, damage, cost and expense shall be caused by the Escrow Agent's gross
negligence, or willful misconduct. The foregoing indemnification and agreement
to hold harmless shall survive the termination of this Agreement.

                (d) Notwithstanding anything herein to the contrary, the Escrow
Agent shall have and is hereby granted a possessory lien on and security
interest in the Escrow Property, and all proceeds thereof, solely to secure
payment of all amounts owing to it from time to time hereunder, whether now
existing or hereafter arising; provided, however, that the Escrow Agent
acknowledges and agrees that it is holding the Escrow Property in its capacity
as an Escrow Agent and that it has no right to apply amounts deposited in escrow
hereunder against any obligations of the Interested Parties that do not arise
under this Agreement. The Escrow Agent shall have the right to deduct from the
Escrow Property, and proceeds thereof, any such sums, upon one Business Day's
notice to the Interested Parties of its intent to do so.

                (e) Without altering or limiting the joint and several liability
of any of the Interested Parties to the Escrow Agent hereunder, each of the
Interested Parties agrees as between themselves that each of them is obligated
to pay 50% of all amounts payable to the Escrow Agent pursuant to this Section
7(e).

                                        6

<PAGE>

Section 8.  Tax Indemnification.
            -------------------

                (a) Each of the Interested Parties agrees, jointly and
severally, (i) to assume any and all obligations imposed now or hereafter by any
applicable tax law with respect to any payment or distribution of the Escrow
Property or performance of other activities under this Agreement, (ii) to
instruct the Escrow Agent in writing with respect to the Escrow Agent's
responsibility for withholding and other taxes, assessments or other
governmental charges, and to instruct the Escrow Agent with respect to any
certifications and governmental reporting that may be required under any laws or
regulations that may be applicable in connection with its acting as Escrow Agent
under this Agreement, and (iii) to indemnify and hold the Escrow Agent harmless
from any liability or obligation on account of taxes, assessments, additions for
late payment, interest, penalties, expenses and other governmental charges that
may be assessed or asserted against the Escrow Agent in connection with, on
account of or relating to the Escrow Property, the management established
hereby, any payment or distribution of or from the Escrow Property pursuant to
the terms hereof or other activities performed under the terms of this
Agreement, including without limitation any liability for the withholding or
deduction of (or the failure to withhold or deduct) the same, and any liability
for failure to obtain proper certifications or to report properly to
governmental authorities in connection with this Agreement, including costs and
expenses (including reasonable legal fees and expenses), interest and penalties.
The foregoing indemnification and agreement to hold harmless shall survive the
termination of this Agreement.

Section 9.  Resignation.
            -----------

            The Escrow Agent may at any time resign as Escrow Agent hereunder by
giving thirty (30) Business Days' prior written notice of resignation to the
Interested Parties. Prior to the effective date of the resignation as specified
in such notice, the Interested Parties will jointly issue to the Escrow Agent a
written instruction authorizing redelivery of the Escrow Property to a bank or
trust company that it selects as successor to the Escrow Agent hereunder;
provided, however, that until a successor escrow agent is selected, the Escrow
Agent shall continue to hold the Escrow Property and otherwise comply with the
terms of this Agreement. If no successor escrow agent is named by the Interested
Parties within twenty (20) Business Days after its notice of resignation, the
Escrow Agent may apply to a court of competent jurisdiction for appointment of a
successor escrow agent. Any successor escrow agent shall execute and deliver an
instrument accepting such appointment and it shall, without further acts, be
vested in all the estates, properties, rights, powers and duties of the
predecessor escrow agent as if originally named as escrow agent hereunder.

Section 10. Dispute Resolution.
            ------------------

            It is understood and agreed that, should any dispute arise with
respect to the delivery, ownership, right of possession, and/or disposition of
the Escrow Property, or should any claim be made upon the Escrow Agent or the
Escrow Property by a third party, the Escrow Agent upon receipt of notice of
such dispute or claim is authorized and shall be entitled (at its sole option
and election) to retain in its possession without liability to anyone, all or
any of the said Escrow Property subject to such dispute or claim until such
dispute shall have been settled either by the mutual written agreement of the
parties involved or by a final order, decree or

                                       7

<PAGE>

judgment of a court in the United States of America, the time for perfection of
an appeal of such order, decree or judgment having expired. The Escrow Agent
may, but shall be under no duty whatsoever to, institute or defend any legal
proceedings that relate to the Escrow Property.

Section 11.  Consent to Jurisdiction and Service.
             -----------------------------------

                (a) In connection with any action or proceeding to which the
Escrow Agent is a party (other than an action or proceeding in the nature of an
interpleader action in which the Escrow Agent is acting solely as a
stakeholder), each of the parties hereto hereby absolutely and irrevocably
consents and submits to the jurisdiction of the courts located in the
Commonwealth of Massachusetts, and of any Federal court located in said
Commonwealth in connection with any actions or proceedings arising out of or
relating to this Agreement.

                (b) In connection with any action or proceeding other than those
described in paragraph (a), each of the parties hereto hereby absolutely and
irrevocably consents and submits to the jurisdiction of the courts located in
the State of New York, and of any Federal court located in said State in
connection with any actions or proceedings arising out of or relating to this
Agreement.

                (c) In any such action or proceeding, the parties hereto each
hereby absolutely and irrevocably (i) waives any objection to jurisdiction or
venue specified in this Section, (ii) waives personal service of any summons,
complaint, declaration or other process, and (iii) agrees that the service
thereof may be made by certified or registered first-class mail directed to such
party, as the case may be at their respective addresses set forth in Section 14.

Section 12.  Waiver of Jury Trial.
             --------------------

             THE ESCROW AGENT AND THE INTERESTED PARTIES HEREBY WAIVE A TRIAL BY
JURY OF ANY AND ALL ISSUES ARISING IN ANY ACTION OR PROCEEDING BETWEEN THEM OR
THEIR SUCCESSORS OR ASSIGNS, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY
OF ITS PROVISIONS OR ANY NEGOTIATIONS IN CONNECTION HEREWITH.

Section 13.  Force Majeure.
             -------------

             The Escrow Agent shall not be responsible for delays or failures in
performance resulting from acts beyond its control. Such acts shall include but
not be limited to acts of God, strikes, lockouts, riots, acts of war, epidemics,
governmental regulations superimposed after the fact, fire, communication line
failures, computer viruses, power failures, earthquakes or other disasters.

Section 14.  Notices; Wiring Instructions.
             ----------------------------

                (a) Notice Addresses. Any notice permitted or required hereunder
                    ----------------
shall be in writing, and shall be sent (i) by personal delivery, overnight
delivery by a recognized courier or delivery service, or (ii) mailed by
registered or certified mail, return receipt requested, postage prepaid, or
(iii) by confirmed telecopy accompanied by mailing of the original on the same
day by first class mail, postage prepaid, in each case the parties at their
address set forth

                                       8

<PAGE>

below (or to such other address as any such party may hereafter designate by
written notice to the other parties).

                  (a)      if to Vencor, to:

                           Kindred Healthcare, Inc.
                           680 South Fourth Street
                           Louisville, KY 40202
                           Attention:  Edward L.  Kuntz
                           (502) 596-7340
                           (502) 596-4141 (facsimile)

                           with a copy to:

                           Cleary, Gottlieb, Steen & Hamilton
                           One Liberty Plaza
                           New York, New York 10006
                           Attention:  Thomas J.  Moloney, Esq.
                           (212) 225-2460
                           (212) 225-3999 (facsimile)

                  (b)      if to Ventas, to:

                           Ventas, Inc.
                           4360 Brownsboro Road
                           Suite 115
                           Attention: T.  Richard Riney
                           Louisville, KY 40207-1642
                           (502) 357-9000
                           (502) 357-9001 (facsimile)

                           with a copy to:

                           Willkie Farr & Gallagher
                           787 Seventh Avenue
                           Attention: Myron Trepper and Bruce Montgomerie
                           New York, New York 10019-6099

                           If to Escrow Agent:

                           .     By first class mail, to:

                                 State Street Bank and Trust Company
                                 Global Investors Services Group
                                 Corporate Trust
                                 P.O.  Box 778
                                 Boston, Massachusetts 02102-0778
                                 Attention: Vencor/Ventas Cash Escrow Agreement

                                       9

<PAGE>

                           .     if by fax addressed as
                                 above and sent to
                                 the following telecopy number:

                                 Fax:  617-662-1466

                           .     if by hand, certified or
                                 registered mail or overnight
                                 courier or delivery, to:

                                 State Street Bank and Trust Company
                                 Global Investors Services Group
                                 Corporate Trust, 6th Floor
                                 2 Avenue DeLafayette
                                 Boston, Massachusetts 02111-1724
                                 Attention:  Vencor/Ventas Cash Escrow Agreement

                           (b)   Wiring Instructions. Any funds to be paid to or
                                 -------------------
by the Escrow Agent hereunder shall be sent by wire transfer pursuant to the
following instructions (or by such method of payment and pursuant to such
instruction as may have been given in advance and in writing to or by the Escrow
Agent, as the case may be, in accordance with Section 14(a) above):

If to Vencor:
                           Bank: PNC Bank
                           Pittsburgh, PA
                           ABA #: 043000096
                           Acct.  #.  1004406571
                           Acct.  Name: Vencor Operating, Inc.
                           (to be renamed Kindred Healthcare
                           Operating, Inc.)

If to Ventas:
                           Bank: Sun Trust Bank
                           ABA #: 064000046
                           Acct.  #: 7020723487
                           Ref:  Ventas Realty, Limited Partnership

If to the Escrow Agent:
                           Bank: State Street Bank and Trust Company
                           ABA #: 0110 0002 8
                           DDA #: 9903-990-1
                           Attn: Corporate Trust
                           Ref:  Vencor/Ventas Cash Escrow
                           Agreement/Account No.  127219-10.

                                       10

<PAGE>

Section 15.  Miscellaneous.
             -------------

                (a) Binding Effect: Successors. This Agreement shall be binding
                    --------------------------
upon the respective parties hereto and their heirs, executors, successors and
assigns. If the Escrow Agent consolidates, merges or converts into, or transfers
all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act shall be the
successor Escrow Agent.

                (b) Modifications. This Agreement may not be altered or modified
                    -------------
without the express written consent of the parties hereto. No course of conduct
shall constitute a waiver of any of the terms and conditions of this Escrow
Agreement, unless such waiver is specified in writing, and then only to the
extent so specified. A waiver of any of the terms and conditions of this Escrow
Agreement on one occasion shall not constitute a waiver of the other terms of
this Escrow Agreement, or of such terms and conditions on any other occasion.
Notwithstanding any other provision hereof, consent to an alteration or
modification of this Agreement may not be signed by means of an e-mail address.

                (c) Governing Law. THIS ESCROW AGREEMENT SHALL BE GOVERNED BY
                    -------------
AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE COMMONWEALTH OF NEW
YORK

                (d) Reproduction of Documents. This Agreement and all documents
                    -------------------------
relating thereto, including, without limitation, (a) consents, waivers and
modifications which may hereafter be executed, and (b) certificates and other
information previously or hereafter furnished, may be reproduced by any
photographic, photostatic, microfilm, optical disk, micro-card, miniature
photographic or other similar process. The parties agree that any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding, whether or not the original is in
existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.

                (e) Counterparts. This Escrow Agreement may be executed in
                    ------------
several counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.

                (f) Conflicting Provisions. As between the Interested Parties,
                    ----------------------
to the extent that any provision contained in the Refund Agreement or the Tax
Allocation Agreement, as amended (together, the "Operative Documents"),
                                                 -------------------
conflicts or is inconsistent with any provision contained herein, the provisions
contained in the Operative Documents shall control. The provisions of this
Escrow Agreement, however, shall control as to the Escrow Agent's duties,
obligations and rights hereunder.

                                       11

<PAGE>

          IN WITNESS WHEREOF, each of the parties has cause this Agreement to be
duly executed and delivered in its name and on its behalf as of the 20th day of
April, 2001.

                                        Vencor, Inc.
                                        (to be renamed Kindred Healthcare, Inc.)

                                        By:  /s/ Richard A. Schweinhart
                                             -----------------------------------
                                             Name:  Richard A. Schweinhart
                                             Title: Senior Vice President and
                                                    Chief Financial Officer

                                        Ventas, Inc.

                                        By:  /s/ T. Richard Riney
                                             -----------------------------------
                                             Name:  T. Richard Riney
                                             Title: Executive Vice President and
                                                    General Counsel

                                        State Street Bank and Trust Company, as
                                        Escrow Agent

                                        By:  /s/ Daniel Golden
                                             -----------------------------------
                                             Name:  Daniel Golden
                                             Title: Assistant Vice President

                                       12

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