Kindred Healthcare Offers Letter to Gentiva's Board

Kindred Healthcare, Inc. (“Kindred” or the “Company”)

today sent the following letter to the board of directors of Gentiva Health Services, Inc. (“Gentiva”)

in response to Gentiva's announcement on July 17, 2014 that an unnamed party has purportedly submitted a proposal to acquire Gentiva for $17.25 per share, subject to financing, due diligence, internal approvals and other conditions. July 21, 2014 Rodney Windley Executive Chairman Gentiva Health Services, Inc. 3350 Riverwood Parkway, Suite 1400 Atlanta, GA 30339 Tony Strange Chief Executive Officer, President and Director Gentiva Health Services, Inc. 3350 Riverwood Parkway, Suite 1400 Atlanta, GA 30339 Dear Rod and Tony: I am writing following the recent discussions among our respective financial advisors in response to the press release issued by Gentiva on July 17, 2014, which stated that an unnamed party has submitted a proposal to acquire the company for $17.25 per share in cash, subject to financing, due diligence, internal approvals and other conditions. As you know, for the last several months we have sought to engage with Gentiva in order to negotiate mutually acceptable transaction terms for Kindred to acquire 100% of the outstanding shares of Gentiva. We have indicated our willingness to structure a transaction so that Gentiva shareholders can receive all cash or a mix of cash and stock, which would allow them to participate in the combined company's substantial upside potential. Additionally, we have been clear that we are willing to consider further increasing our offer if you engage in good faith and permit us to conduct due diligence. Specifically, we confirm that Kindred would be prepared to enter into a negotiated agreement to acquire all of the outstanding shares of Gentiva for $17.25 per share, provided that we are permitted to conduct diligence to confirm such additional value is warranted. As requested by your financial advisors, we also confirm that Kindred is willing to enter into appropriate confidentiality and standstill agreements, in order to facilitate discussions to combine our two companies. This letter is not intended to create or constitute any legally binding obligation, liability or commitment by us regarding a transaction or any other matter. There will be no legally binding agreement between us regarding a transaction unless and until a definitive agreement is executed. We look forward to combining our two businesses and pursuing what we think is an incredibly compelling opportunity for our collective shareholder groups, patients and employees. Please feel free to contact me with any questions. Yours truly, Paul J. Diaz Chief Executive Officer Kindred Healthcare, Inc. cc: Phyllis Yale, Chairman of the Board