Kindred Healthcare Offers Letter to Gentiva's Board

Kindred Healthcare, Inc. (“Kindred” or the “Company”) (NYSE: KND) today sentthe following letter to the board of directors of Gentiva Health Services,Inc. (“Gentiva”) (NASDAQ: GTIV) in response to Gentiva's announcement on July17, 2014 that an unnamed party has purportedly submitted a proposal to acquireGentiva for $17.25 per share, subject to financing, due diligence, internalapprovals and other conditions.July 21, 2014Rodney WindleyExecutive ChairmanGentiva Health Services, Inc.3350 Riverwood Parkway, Suite 1400Atlanta, GA 30339Tony StrangeChief Executive Officer, President and DirectorGentiva Health Services, Inc.3350 Riverwood Parkway, Suite 1400Atlanta, GA 30339Dear Rod and Tony:I am writing following the recent discussions among our respective financialadvisors 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 thecompany 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 Gentivain order to negotiate mutually acceptable transaction terms for Kindred toacquire 100% of the outstanding shares of Gentiva.We have indicated our willingness to structure a transaction so that Gentivashareholders can receive all cash or a mix of cash and stock, which wouldallow them to participate in the combined company's substantial upsidepotential.Additionally, we have been clear that we are willing to consider furtherincreasing our offer if you engage in good faith and permit us to conduct duediligence. Specifically, we confirm that Kindred would be prepared to enterinto a negotiated agreement to acquire all of the outstanding shares ofGentiva for $17.25 per share, provided that we are permitted to conductdiligence to confirm such additional value is warranted.As requested by your financial advisors, we also confirm that Kindred iswilling 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 bindingobligation, liability or commitment by us regarding a transaction or any othermatter. There will be no legally binding agreement between us regarding atransaction unless and until a definitive agreement is executed.We look forward to combining our two businesses and pursuing what we think isan incredibly compelling opportunity for our collective shareholder groups,patients and employees.Please feel free to contact me with any questions.Yours truly,Paul J. DiazChief Executive OfficerKindred Healthcare, Inc.cc: Phyllis Yale, Chairman of the Board