KINDRED HEALTHCARE, INC.
LOCK-UP AGREEMENT
OCTOBER 22, 2001
Kindred Healthcare, Inc.
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Credit Suisse First Boston Corporation
Xxxxxxx, Xxxxx & Co.
X.X. Xxxxxx Securities Inc.
UBS Warburg LLC
Xxxxxx Brothers Inc.
As Representatives of the several
Underwriters to be named in the
Underwriting Agreement
c/o Credit Suisse First Boston Corporation
Eleven Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Dear Sirs:
As an inducement to the Underwriters to execute the Underwriting
Agreement, pursuant to which an offering will be made that is intended to
result in an orderly market for the Common Stock (the "Securities") of
Kindred Healthcare, Inc. and any successor (by merger or otherwise) thereto
(the "Company"), the undersigned hereby agrees that from the date hereof
and until 90 days after the date of the final prospectus used to sell the
Securities (the "Public Offering Date") pursuant to the Underwriting
Agreement, to which you are or expect to become parties, the undersigned
will not (1) offer, sell, contract to sell, pledge or otherwise dispose of,
directly or indirectly, any shares of Securities or securities convertible
into or exchangeable or exercisable for any shares of Securities, whether
now owned or hereafter acquired by the undersigned or with respect to which
the undersigned has or hereafter acquires the power of disposition, or (2)
enter into a transaction which would have the same effect, or enter into
any swap, hedge or other arrangement that transfers, in whole or in part,
any of the economic consequences of ownership of the Securities, whether
any such aforementioned transaction is to be settled by delivery of the
Securities or such other securities, in cash or otherwise, or (3) publicly
disclose the intention to make any such offer, sale, pledge or disposition,
or to enter into any such transaction, swap, hedge or other arrangement,
without, in the case of each of clauses (1), (2) and (3), the prior written
consent of Credit Suisse First Boston Corporation. In addition, the
undersigned agrees that, without the prior written consent of Credit Suisse
First Boston Corporation, it will not, during the period commencing on the
date hereof and ending 90 days after the Public Offering Date, make any
demand for or exercise any right with respect to, the registration of any
Securities or any security convertible into or exercisable or exchangeable
for the Securities.
The Company represents and warrants to the undersigned that each
officer, director and person named as a selling securityholder in the final
prospectus has entered into an agreement with the Company and the
Underwriters with substantially similar terms, containing no material
differences from the terms of this agreement. In the event any of the
shares held by any officers or directors or 1% or greater securityholders
of the Company (each a "Released Stockholder") are released from such
lock-up restrictions, Credit Suisse First Boston Corporation will release
the undersigned with respect to the percentage of the Securities held by
the undersigned equal to (a) the aggregate number of Securities released
from such lock-up restrictions (other than releases pursuant to this
paragraph or a similar paragraph in lock-up agreements with other holders)
divided by (b) the aggregate number of Securities of the Released
Stockholder subject to the lock-up restrictions as of the Public Offering
Date.
Any Securities received upon exercise of options granted to the
undersigned will also be subject to this Agreement. The restrictions in the
preceding paragraph shall not apply to (i) gifts and transfers by will or
intestacy or (ii) transfers to (A) the undersigned's members, partners,
affiliates or immediate family or (B) a trust, the beneficiaries of which
are the undersigned and/or members of the undersigned's immediate family;
provided that (x) the donee or transferee agrees in writing to be bound by
the foregoing restrictions in the same manner as they apply to the
undersigned and (y) if the donor or transferor is a reporting person
subject to Section 16(A) of the Securities Exchange Act of 1934 (the
"Exchange Act"), any gifts or transfers made in accordance with this
sentence shall not require such person to, and such person shall not
voluntarily, file a report of such transaction on Form 4 under the Exchange
Act. The term "immediate family" shall mean spouse, lineal descendants,
father, mother, brother or sister of the transferor and father, mother,
brother or sister of the transferor's spouse. Further, the restrictions in
the preceding paragraph shall not apply to (1) transactions relating to
shares of Securities or other securities acquired in open market
transactions after the completion of the public offering and (2) the
distribution by Ventas, Inc. ("Ventas") or The Ventas Stockholder Trust
(the "Ventas Trust") of up to 350,000 shares of such Securities to Ventas
stockholders on or after December 24, 2001, the resale by such stockholders
of the shares so distributed and any public disclosure by Ventas of the
Ventas entities' intention to effect such distribution.
In furtherance of the foregoing, the Company and its transfer
agent and registrar are hereby authorized to decline to make any transfer
of shares of Securities if such transfer would constitute a violation or
breach of this Agreement.
This Agreement shall be binding on the undersigned and the
successors, heirs, personal representatives and assigns of the undersigned.
This Agreement shall lapse and become null and void if the Public Offering
Date shall not have occurred on or before November 30, 2001.
Very truly yours,
By: /s/ Appaloosa Management L.P., on behalf of
certain funds for which it acts as investment
advisor
By: /s/ Xxxxx X. Xxxxx
-------------------------------------
Name: Xxxxx Xxxxx
Title: Vice President and Secretary
Agreed to:
KINDRED HEALTHCARE, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxx
--------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Vice President - Finance, Corporate Controller & Treasurer
