Exhibit 10.2

 

TAX MATTERS AGREEMENT

 

by and between

 

VENTAS, INC.,

 

and

 

CARE CAPITAL PROPERTIES, INC.

 

Dated as of August 17, 2015

 

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TABLE OF CONTENTS

 

 

 

 

Page

 

 

 

ARTICLE I DEFINITIONS

 

2

 

 

 

 

Section 1.01.

General

 

2

Section 1.02.

Additional Definitions

 

11

 

 

 

 

ARTICLE II PREPARATION, FILING AND PAYMENT OF TAXES SHOWN DUE ON TAX RETURNS

 

11

 

 

 

 

Section 2.01.

Combined Tax Returns

 

11

Section 2.02.

Ventas Separate Tax Returns

 

11

Section 2.03.

SpinCo Separate Tax Returns

 

11

Section 2.04.

Restructuring Transfer Tax Returns

 

11

 

 

 

 

ARTICLE III TAX RETURN PROCEDURES

 

11

 

 

 

 

Section 3.01.

Procedures relating to Combined Tax Returns and Ventas Separate Tax Returns

 

11

Section 3.02.

Procedures relating to SpinCo Separate Tax Returns

 

12

Section 3.03.

Preparation of all Tax Returns

 

13

Section 3.04.

Tax Returns Reflecting Restructuring/Distribution Taxes

 

13

 

 

 

 

ARTICLE IV TAX TIMING AND ALLOCATION

 

13

 

 

 

 

Section 4.01.

Timing of Payments

 

13

Section 4.02.

Expenses

 

13

Section 4.03.

Apportionment of SpinCo Taxes

 

13

 

 

 

 

ARTICLE V INDEMNIFICATION

 

13

 

 

 

 

Section 5.01.

Indemnification by Ventas

 

13

Section 5.02.

Indemnification by SpinCo

 

14

Section 5.03.

Characterization of and Adjustments to Payments

 

14

Section 5.04.

Timing of Indemnification Payments

 

14

Section 5.05.

Certain Tax Procedures

 

15

 

 

 

 

ARTICLE VI REFUNDS, DEDUCTIONS

 

15

 

 

 

 

Section 6.01.

Refunds

 

15

Section 6.02.

Treatment of Deductions Associated with Equity-Related Compensation

 

15

 

 

 

 

ARTICLE VII TAX PROCEEDINGS

 

16

 

 

 

 

Section 7.01.

Notification of Tax Proceedings

 

16

 

i

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Section 7.02.

Tax Proceedings

 

16

 

 

 

 

ARTICLE VIII TAX-FREE STATUS OF THE DISTRIBUTION

 

17

 

 

 

 

Section 8.01.

Representations and Warranties

 

17

Section 8.02.

Restrictions Relating to the Distribution

 

18

Section 8.03.

Procedures Regarding Post-Distribution Rulings and Unqualified Tax Opinions

 

20

Section 8.04.

Section 336(e) Election

 

21

 

 

 

 

ARTICLE IX [Reserved]

 

22

 

 

 

 

ARTICLE X COOPERATION

 

22

 

 

 

 

Section 10.01.

General Cooperation

 

22

Section 10.02.

Retention of Records

 

22

 

 

 

 

ARTICLE XI MISCELLANEOUS

 

23

 

 

 

 

Section 11.01.

Dispute Resolution

 

23

Section 11.02.

Tax Sharing Agreements

 

23

Section 11.03.

Interest on Late Payments

 

23

Section 11.04.

Survival of Covenants

 

24

Section 11.05.

Severability

 

24

Section 11.06.

Entire Agreement

 

24

Section 11.07.

No Third-Party Beneficiaries

 

24

Section 11.08.

Specific Performance

 

24

Section 11.09.

Amendment

 

24

Section 11.10.

Rules of Construction

 

25

Section 11.11.

Counterparts

 

25

Section 11.12.

Coordination with Separation and Distribution Agreement

 

25

Section 11.13.

Coordination with the Employee Matters Agreement

 

25

Section 11.14.

Governing Law

 

25

Section 11.15.

Assignability

 

26

Section 11.16.

Notices

 

26

Section 11.17.

Effective Date

 

27

 

ii

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DEFINED TERMS

 

 

 

Page

 

 

 

Accounting Firm

 

2, 23

Acquisition

 

1, 2

Acquisition Date

 

2

Acquisition Transaction

 

2

Adjustment

 

3

Agreement

 

1, 3

Ancillary Agreement

 

3

Benefited Party

 

3, 15

Cash Distribution

 

3

Code

 

3

Combined Tax Return

 

3

Contribution

 

3

Disqualifying Action

 

3

Distribution

 

1, 3

Distribution Date

 

3

Due Date

 

3

Effective Time

 

3

Employee Matters Agreement

 

3

Equity Securities

 

3

Fifty-Percent or Greater Interest

 

4

Final Determination

 

4

Healthtrust

 

1

Income Tax Return

 

4

Income Taxes

 

4

Indemnified Party

 

4

Indemnifying Party

 

4

Information

 

4, 22

Information Request

 

4, 22

IRS

 

4

Law

 

4

Non-Income Tax Return

 

4

Non-Income Taxes

 

5

Notified Action

 

5, 20

Ordinary Course of Business

 

5

Parties

 

1

Party

 

1, 5

Past Practice

 

5, 12

Person

 

5

Plan of Reorganization

 

5

Post-Distribution Ruling

 

5, 20

Post-Separation Period

 

5

Record Holders

 

5

Refund

 

5

 

iii

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REIT

 

5

REIT Taxable Income

 

5

REIT Taxes

 

5

Representatives

 

5

Restriction Period

 

5

Restructuring

 

1, 6

Restructuring Transfer Taxes

 

6

Restructuring/Distribution Taxes

 

6

SAG

 

6

Section 336(e) Election

 

6, 21

Section 8.02(e) Acquisition Transaction

 

6

Separate Return

 

6

Separation and Distribution Agreement

 

1, 6

SpinCo

 

1, 6

SpinCo Active Trade or Business

 

6

SpinCo Assets

 

6

SpinCo Business

 

6

SpinCo Disqualifying Action

 

6

SpinCo Entity

 

7

SpinCo Group

 

7

SpinCo Income

 

7

SpinCo Liabilities

 

7

SpinCo REIT Distribution Indemnification Amount

 

7

SpinCo Separate Tax Return

 

7

SpinCo Shares

 

1

SpinCo Tax Proceeding

 

7, 16

SpinCo Taxes

 

7

Straddle Period

 

8

Subsidiary

 

8

Tax

 

8

Tax Attributes

 

8

Tax Counsel

 

8

Tax Item

 

8

Tax Matter

 

8, 22

Tax Opinion

 

8

Tax Opinion Documents

 

8, 17

Tax Package

 

8

Tax Proceeding

 

8

Tax Return

 

9

Tax-Free Status

 

9

Taxing Authority

 

9

Taxing Jurisdiction

 

9

Transactions

 

9

Transfer Taxes

 

9

Treasury Regulations

 

9

U.S.

 

9

 

iv

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Unqualified Tax Opinion

 

9

UPREIT

 

1

Ventas

 

1, 9

Ventas Board

 

9

Ventas Business

 

9

Ventas Disqualifying Action

 

10

Ventas Entity

 

10

Ventas Group

 

10

Ventas Income

 

10

Ventas REIT Distribution Indemnification Amount

 

10

Ventas Separate Tax Return

 

10

Ventas Shares

 

1

Ventas Tax Proceeding

 

10, 16

Ventas Taxes

 

10

Waiver

 

11, 20

 

v

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TAX MATTERS AGREEMENT

 

THIS TAX MATTERS AGREEMENT (this “Agreement”), dated as of August 17, 2015, is
by and between Ventas, Inc., a Delaware corporation (“Ventas”), and Care Capital
Properties, Inc., a Delaware corporation (“SpinCo”). Each of Ventas and SpinCo
is sometimes referred to herein as a “Party” and, collectively, as the
“Parties.”

 

RECITALS

 

WHEREAS, Ventas has elected to be classified as a REIT and SpinCo intends to
elect to be classified as a REIT;

 

WHEREAS, Ventas, through its respective Subsidiaries, is engaged in the Ventas
Business and the SpinCo Business;

 

WHEREAS, the Ventas Board has determined that it is in the best interests of
Ventas and its stockholders to create a new publicly traded company which shall
operate the SpinCo Business;

 

WHEREAS, Ventas and SpinCo have entered into the Separation and Distribution
Agreement, dated as of August 17, 2015 (the “Separation and Distribution
Agreement”), providing for the separation of the SpinCo Business from the Ventas
Business, pursuant to which (a) Ventas will, and will cause its Subsidiaries to,
transfer the SpinCo Assets and the SpinCo Liabilities to SpinCo and its
Subsidiaries, as a result of which transfer SpinCo and its Subsidiaries will
own, directly and through their respective Subsidiaries, the SpinCo Business
(the “Restructuring”) and (b) Ventas will distribute all of the outstanding
shares of common stock, par value $0.01 per share, of SpinCo (“SpinCo Shares”)
owned by Ventas to the Record Holders of the issued and outstanding shares of
common stock, par value $0.25 per share, of Ventas (“Ventas Shares”) on a pro
rata basis (the “Distribution”);

 

WHEREAS, for U.S. federal Income Tax purposes, it is intended that the
Contribution (as defined herein) and the Distribution, taken together, shall
qualify as a tax-free transaction under Sections 355(a) and 368(a)(1)(D) of the
Code;

 

WHEREAS, as a result of the acquisition (the “Acquisition”) by Care Capital
Properties LP, a Delaware limited partnership and indirect wholly owned
Subsidiary of SpinCo (“UPREIT”) of all the membership units of Healthtrust,
L.L.C., a Florida limited liability company (“Healthtrust”), pursuant to the
Unit Purchase Agreement, dated as of April 4, 2015, by and among Ventas, UPREIT,
Healthtrust, and certain other Persons, SpinCo will cease to be a “qualified
REIT subsidiary” of Ventas (within the meaning of Section 856(i)(2) of the Code)
and instead will elect to be taxed as a REIT; and

 

WHEREAS, the Parties wish to (a) provide for the payment of Tax liabilities and
entitlement to refunds thereof, (b) allocate responsibility for, and cooperation
in, the filing of Tax Returns, and provide for certain other matters relating to
Taxes, and (c) set forth certain covenants and indemnities relating to the
preservation of the tax-free status of certain steps of the Restructuring and
the Distribution.

 

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NOW, THEREFORE, in consideration of the foregoing and the terms, conditions,
covenants and provisions of this Agreement, each of the Parties mutually
covenants and agrees as follows:

 

ARTICLE I

 

DEFINITIONS

 

Section 1.01.             General. As used in this Agreement, the following
terms shall have the following meanings:

 

“Accounting Firm” has the meaning set forth in Section 11.01.

 

“Acquisition” has the meaning set forth in the Recitals.

 

“Acquisition Date” means the closing date of the Acquisition.

 

“Acquisition Transaction” means a transaction or series of transactions (or any
agreement, understanding or arrangement, within the meaning of Section 355(e) of
the Code and Treasury Regulations Section 1.355-7, or any other regulations
promulgated thereunder, to enter into a transaction or series of transactions),
whether such transaction is supported, permitted or solicited by management or
shareholders of SpinCo, is a hostile acquisition, or otherwise, as a result of
which such SpinCo would merge or consolidate with or enter into any other
reorganization transaction with any other Person or as a result of which one or
more Persons would (directly or indirectly) acquire, or have the right to
acquire, from SpinCo and/or one or more holders of outstanding shares of Equity
Securities of SpinCo, as the case may be, a number of shares of Equity
Securities of SpinCo that would, when combined with any other changes in
ownership of the Equity Securities of SpinCo pertinent for purposes of
Section 355(e) of the Code, comprise a forty percent (40%) or greater interest
in SpinCo (A) by value, as of the date of such transaction, or in the case of a
series of transactions, the date of the last transaction of such series, or
(B) by vote, as of the date of such transaction, or in the case of a series of
transactions, the date of the last transaction of such series. Notwithstanding
the foregoing, an Acquisition Transaction shall not include (A) the adoption by
SpinCo of a shareholder rights plan or (B) issuances of Equity Securities by
SpinCo that satisfy Safe Harbor VIII (relating to acquisitions in connection
with a person’s performance of services) or Safe Harbor IX (relating to
acquisitions by a retirement plan of an employer) of Treasury Regulations
Section 1.355-7(d). For purposes of determining whether a transaction
constitutes an indirect acquisition, any recapitalization resulting in a shift
of voting power shall be treated as an indirect acquisition of shares of Equity
Securities by the shareholders whose voting power is increased thereby and any
redemption of shares of Equity Securities shall be treated as an indirect
acquisition of shares of Equity Securities by the non-exchanging shareholders.
For purposes of this definition, each reference to SpinCo shall include a
reference to any entity treated as successor thereto. This definition and the
application thereof is intended to monitor compliance with Section 355(e) of the
Code and shall be interpreted accordingly. Any clarification of, or change in,
the statute or regulations promulgated under Section 355(e) of the Code or
published IRS guidance with respect thereto shall be incorporated in this
definition and its interpretation.

 

2

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“Adjustment” means any change in the Tax liability of a taxpayer, whether in
connection with a Tax Proceeding, resulting from a change in facts or subsequent
transactions, pursuant to amendment or otherwise, determined issue-by-issue,
transaction-by-transaction, or with respect to a taxable period, as the case may
be.

 

“Agreement” has the meaning set forth in the preamble.

 

“Ancillary Agreement” has the meaning set forth in the Separation and
Distribution Agreement.

 

“Benefited Party” has the meaning set forth in Section 6.01(b).

 

“Cash Distribution” has the meaning set forth in the Separation and Distribution
Agreement.

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

“Combined Tax Return” means a consolidated, combined, unitary, affiliated or
similar Income Tax Return or Non-Income Tax Return that actually includes, by
election or otherwise, one or more members of the Ventas Group together with one
or more members of the SpinCo Group.

 

“Contribution” means the contribution and assignment by Ventas and certain of
its Subsidiaries of certain SpinCo Assets and SpinCo Liabilities to SpinCo in
exchange for SpinCo Shares and the proceeds of the Cash Distribution.

 

“Disqualifying Action” means a Ventas Disqualifying Action or a SpinCo
Disqualifying Action.

 

“Distribution” has the meaning set forth in the Recitals.

 

“Distribution Date” has the meaning set forth in the Separation and Distribution
Agreement.

 

“Due Date” means (i) with respect to a Tax Return, the date (taking into account
all valid extensions) on which such Tax Return is required to be filed under
applicable Law and (ii) with respect to a payment of Taxes, the date on which
such payment is required to be made to avoid the incurrence of interest,
penalties and/or additions to Tax.

 

“Effective Time” has the meaning set forth in the Separation and Distribution
Agreement.

 

“Employee Matters Agreement” has the meaning set forth in the Separation and
Distribution Agreement.

 

“Equity Securities” means, with respect to a Person, all classes or series of
capital stock of such Person (or any entity treated as a successor to such
Person) and all other instruments treated as stock in such Person (or any entity
treated as a successor to such Person) for U.S.

 

3

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federal Income Tax purposes, and including all options, warrants or any other
rights to acquire such stock.

 

“Fifty-Percent or Greater Interest” has the meaning ascribed to such term for
purposes of Sections 355(d) and (e) of the Code.

 

“Final Determination” means the final resolution of liability for any Tax or Tax
Item, which resolution may be for a specific issue or adjustment or for a
taxable period, by or as a result of (i) IRS Form 870 or 870-AD (or any
successor forms thereto), on the date of acceptance by or on behalf of the
taxpayer, or by a comparable form under the Laws of any Taxing Jurisdiction,
except that an IRS Form 870 or 870-AD or comparable form shall not constitute a
Final Determination to the extent that it reserves (whether by its terms or by
operation of law) the right of the taxpayer to file a claim for Refund or the
right of the Taxing Authority to assert a further deficiency in respect of such
issue or adjustment or for such taxable period (as the case may be); (ii) a
final decision, judgment, decree or other order by any court of competent
jurisdiction that can no longer be appealed; (iii) a final settlement with the
IRS, a closing agreement or accepted offer in compromise under Sections 7121 or
7122 of the Code, or a comparable agreement under the Laws of any Taxing
Jurisdiction; (iv) any allowance of a Refund or credit in respect of an
overpayment of Tax, but only after the expiration of all periods during which
such Refund or credit may be recovered by the jurisdiction imposing the Tax; or
(v) any other final resolution, including by reason of the expiration of the
applicable statute of limitations, the execution of a pre-filing agreement with
the IRS or other Taxing Authority or by mutual agreement of the Parties.

 

“Income Tax Return” means any Tax Return relating to Income Taxes.

 

“Income Taxes” means any Taxes measured by or calculated with respect to net
income, profits, net receipts or gross receipts (including any margin Tax, REIT
Taxes, capital Tax, excise Tax or franchise Tax), but excluding (i) any Transfer
Taxes and (ii) those Taxes listed on Schedule 1.

 

“Indemnified Party” means the Party which is entitled to seek indemnification
from another Party pursuant to the provisions of Article V.

 

“Indemnifying Party” means the Party from which another Party is entitled to
seek indemnification pursuant to the provisions of Article V.

 

“Information” has the meaning set forth in Section 10.01.

 

“Information Request” has the meaning set forth in Section 10.01.

 

“IRS” means the U.S. Internal Revenue Service.

 

“Law” has the meaning set forth in the Separation and Distribution Agreement.

 

“Non-Income Tax Return” means any Tax Return relating to Taxes other than Income
Taxes.

 

4

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“Non-Income Taxes” means (i) any Taxes other than Income Taxes and (ii) for the
avoidance of doubt, those Taxes listed on Schedule 1.

 

“Notified Action” has the meaning set forth in Section 8.03(a).

 

“Ordinary Course of Business” means an action taken by a Person only if such
action is taken in the ordinary course of the normal day-to-day operations of
such Person.

 

“Party” has the meaning set forth in the preamble.

 

“Past Practice” has the meaning set forth in Section 3.01(a).

 

“Person” has the meaning set forth in the Separation and Distribution Agreement.

 

“Plan of Reorganization” has the meaning set forth in the Separation and
Distribution Agreement.

 

“Post-Distribution Ruling” has the meaning set forth in Section 8.02(d).

 

“Post-Separation Period” means any taxable period (or portion thereof) beginning
on or after the Acquisition Date, including for the avoidance of doubt, the
portion of any Straddle Period beginning on or after the Acquisition Date.

 

“Record Holders” has the meaning set forth in the Separation and Distribution
Agreement.

 

“Refund” means any refund (or credit in lieu thereof) of Taxes (including any
overpayment of Taxes that can be refunded or, alternatively, applied to other
Taxes payable), including any interest paid on or with respect to such refund of
Taxes; provided, however, that for purposes of this Agreement, the amount of any
Refund required to be paid to another Party shall be reduced by the net amount
of any Income Taxes imposed on, related to, or attributable to, the receipt or
accrual of such Refund.

 

“REIT” means a real estate investment trust within the meaning of
Section 856(a) of the Code.

 

“REIT Taxable Income” means “real estate investment trust taxable income” within
the meaning of Section 857(b)(2) of the Code.

 

“REIT Taxes” means (i) any Taxes imposed as a result of the disqualification of
Ventas or SpinCo, as the case may be, as a REIT, (ii) any Taxes imposed under
Section 857(b)(5) of the Code, and (iii) any excise Taxes imposed under
Section 4981 of the Code.

 

“Representatives” has the meaning set forth in the Separation and Distribution
Agreement.

 

“Restriction Period” means the period beginning on the date hereof and ending on
the twenty five (25) month anniversary of the Distribution Date.

 

5

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“Restructuring” has the meaning set forth in the recitals and includes, for the
avoidance of doubt, the Contribution and the Distribution.

 

“Restructuring/Distribution Taxes” means any Taxes imposed on, in connection
with, or by reason of the Restructuring or the Distribution (including REIT
Taxes but not including any Transfer Taxes), other than any such Taxes caused by
a Disqualifying Action.

 

“Restructuring Transfer Taxes” means any Transfer Taxes imposed on, in
connection with, or by reason of the Restructuring or the Distribution.

 

“SAG” has the meaning ascribed to the term “separate affiliated group” in
Section 355(b)(3)(B) of the Code.

 

“Section 336(e) Election” has the meaning set forth in Section 8.04.

 

“Section 8.02(e) Acquisition Transaction” means any transaction or series of
transactions that is not an Acquisition Transaction but would be an Acquisition
Transaction if the percentage reflected in the definition of Acquisition
Transaction were thirty percent (30%) instead of forty percent (40%).

 

“Separate Return” means (i) in the case of any Tax Return required to be filed
by any member of the Ventas Group (including any consolidated, combined, unitary
or similar Tax Return), any such Tax Return that does not include any member of
the SpinCo Group and (ii) in the case of any Tax Return required to be filed by
any member of the SpinCo Group (including any consolidated, combined, unitary or
similar Tax Return), any such Tax Return that does not include any member of the
Ventas Group.

 

“Separation and Distribution Agreement” has the meaning set forth in the
recitals.

 

“SpinCo” has the meaning set forth in the preamble.

 

“SpinCo Active Trade or Business” means the trade or business actively conducted
(within the meaning of Section 355(b) of the Code) by SpinCo (taking into
account Section 355(b)(3) of the Code and Revenue Ruling 2007-42, 2007-2 C.B.
44) immediately prior to the Distribution and relied upon to satisfy the
requirements of Section 355(b) of the Code with respect to the Distribution, as
set forth in the Tax Opinion Documents.

 

“SpinCo Assets” has the meaning set forth in the Separation and Distribution
Agreement.

 

“SpinCo Business” has the meaning set forth in the Separation and Distribution
Agreement.

 

“SpinCo Disqualifying Action” means (i) any action (or the failure to take any
action) by SpinCo or any SpinCo Entity (including entering into any agreement,
understanding or arrangement or any negotiations or discussions with respect to
any transaction or series of transactions) that, (ii) any acquisition of all or
a portion, or any event (or series of events) involving, the Equity Securities
of SpinCo, any assets of SpinCo or any Equity Securities or assets of any SpinCo
Entity that, or (iii) any inaccuracy in or breach by SpinCo or any SpinCo

 

6

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Entity of any of the representations, warranties or covenants of or made by
SpinCo in this Agreement or in connection with the Tax Opinion (irrespective of
whether Ventas made the same representation or warranty on behalf of, or with
respect to, SpinCo or any SpinCo Entity), that, in each case, causes any of the
Transactions to fail to have Tax-Free Status (regardless of whether a
Post-Distribution Ruling, Unqualified Tax Opinion or Waiver may have been
obtained or provided with respect to such action, event, inaccuracy or breach);
provided, however, that the term “SpinCo Disqualifying Action” shall not include
any action expressly contemplated by the Separation and Distribution Agreement
or any Ancillary Agreement or that is undertaken pursuant to the Restructuring,
the Distribution or the Plan of Reorganization.

 

“SpinCo Entity” means any member of the SpinCo Group other than SpinCo.

 

“SpinCo Group” means individually or collectively, as the case may be,
(a) SpinCo and any of its Subsidiaries (including, for the avoidance of doubt,
any such Subsidiary that is treated as a “disregarded entity” for U.S. federal
Income Tax purposes (or for purposes of any state, local or foreign Tax law)
immediately after the Effective Time (and giving effect to the Restructuring and
the Distribution), (b) any Person that shall have merged or liquidated into
SpinCo or any such Subsidiary and (c) any predecessor or successor to any Person
otherwise described in this definition.

 

“SpinCo Income” means (i) any REIT Taxable Income attributable to, or arising
with respect to, assets or activities of the SpinCo Business (excluding any REIT
Taxable Income attributable to the Restructuring or the Distribution), (ii) any
REIT Taxable Income attributable to a SpinCo Disqualifying Action and (iii) any
REIT Taxable Income resulting from any inaccuracy in or breach by SpinCo or any
SpinCo Entity of any of the representations, warranties or covenants of or made
by SpinCo in this Agreement.

 

“SpinCo Liabilities” has the meaning set forth in the Separation and
Distribution Agreement.

 

“SpinCo REIT Distribution Indemnification Amount” means any amount required to
be distributed by Ventas pursuant to Section 857(a) of the Code in order for
Ventas to maintain its status as a REIT for any taxable period as a result of
any SpinCo Income required to be included in taxable income of Ventas for U.S.
federal Income Tax purposes for such taxable period.

 

“SpinCo Separate Tax Return” means any Separate Return required to be filed by
any member of the SpinCo Group.

 

“SpinCo Tax Proceeding” has the meaning set forth in Section 7.02(a).

 

“SpinCo Taxes” means, without duplication, (i) any Income Taxes of or imposed on
any member of the SpinCo Group (including any Taxes reported on or otherwise
imposed with respect to a Combined Tax Return), in each case, for any
Post-Separation Period, attributable to, or arising with respect to, assets or
activities of the SpinCo Business (excluding any Restructuring/Distribution
Taxes or any Restructuring Transfer Taxes), whether imposed as a result of an
Adjustment, amendment or otherwise, (ii) any Non-Income Taxes of or imposed on
any member of the Ventas Group or any member of the SpinCo Group (including any
Taxes reported on or otherwise imposed with respect to a Combined Tax Return),
in each case, required

 

7

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to be paid in any Post-Separation Period, attributable to, or arising with
respect to, assets or activities of the SpinCo Business (excluding any
Restructuring/Distribution Taxes or any Restructuring Transfer Taxes), whether
imposed as a result of an Adjustment or amendment or otherwise, (iii) any
Restructuring Transfer Taxes resulting from an Adjustment or amendment and
attributable to, or arising with respect to, assets or activities of the SpinCo
Business, and (iv) any Taxes attributable to a SpinCo Disqualifying Action
(including any REIT Taxes), whether imposed as a result of an Adjustment,
amendment or otherwise; provided, that SpinCo Taxes shall not include any Taxes
attributable to a Ventas Disqualifying Action.

 

“Straddle Period” means any taxable period beginning prior to the Acquisition
Date and ending on or after the Acquisition Date.

 

“Subsidiary” has the meaning set forth in the Separation and Distribution
Agreement.

 

“Tax” means (i) all taxes, charges, fees, duties, levies, imposts, or other
similar assessments, imposed by any U.S. federal, state or local or foreign
governmental authority, including, but not limited to (A) income, gross
receipts, excise, property, sales, use, license, capital stock, transfer,
franchise, margin, payroll, withholding, social security, value added and other
taxes and (B) for the avoidance of doubt, those taxes listed on Schedule 1,
(ii) any interest, penalties or additions attributable thereto and (iii) all
liabilities in respect of any items described in clause (i) or (ii) payable by
reason of assumption, transferee or successor liability, operation of Law or
Treasury Regulations Section 1.1502-6(a) (or any predecessor or successor
thereof or any analogous or similar provision under Law).

 

“Tax Attributes” means net operating losses, capital losses, credits, earnings
and profits (including any REIT earning and profits), overall foreign losses,
previously taxed income, separate limitation losses and all other Tax
attributes.

 

“Tax Counsel” shall mean tax counsel of recognized national standing that is
acceptable to Ventas.

 

“Tax Item” means any item of income, gain, loss, deduction, credit, recapture of
credit or any other item that increases or decreases Taxes paid or payable.

 

“Tax Matter” has the meaning set forth in Section 10.01.

 

“Tax Opinion” shall mean the opinion issued by Tax Counsel to Ventas with
respect to certain Tax aspects of the Contribution and the Distribution, as
referenced in Section 3.3(a)(iii) of the Separation and Distribution Agreement.

 

“Tax Opinion Documents” has the meaning set forth in Section 8.01(a).

 

“Tax Package” means all relevant Tax-related information relating to the
operations of the Ventas Business or the SpinCo Business, as applicable, that is
reasonably necessary to prepare and file the applicable Tax Return.

 

“Tax Proceeding” means any audit, assessment of Taxes, pre-filing agreement,
other examination by any Taxing Authority, proceeding, appeal of a proceeding or
litigation relating to

 

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Taxes, whether administrative or judicial, including proceedings relating to
competent authority determinations.

 

“Tax Return” means any return, report, certificate, form or similar statement or
document (including any related or supporting information or schedule attached
thereto and any information return, or declaration of estimated Tax) supplied
to, filed with or required to be supplied to or filed with, a Taxing Authority
in connection with the payment, determination, assessment or collection of any
Tax or the administration of any Laws relating to any Tax and any amended Tax
return or claim for refund.

 

“Tax-Free Status” means the qualification of the Contribution and the
Distribution, taken together, (i) as a reorganization described in Sections
355(a) and 368(a)(1)(D) of the Code, (ii) as a transaction in which the stock
distributed thereby is “qualified property” for purposes of Sections 355(d),
355(e) and 361(c) of the Code, and (iii) as a transaction in which Ventas,
SpinCo and the shareholders of Ventas recognize no income or gain for U.S.
federal Income Tax purposes pursuant to Sections 355, 361 and 1031 of the Code.

 

“Taxing Authority” means any governmental authority or any subdivision, agency,
commission or entity thereof or any quasi-governmental or private body having
jurisdiction over the assessment, determination, collection or imposition of any
Tax (including the IRS).

 

“Taxing Jurisdiction” means the United States and every other government or
governmental unit having jurisdiction to tax Ventas, SpinCo or any of their
respective Affiliates.

 

“Transactions” means the transactions referred to in the definition of “Tax-Free
Status.”

 

“Transfer Taxes” means all sales, use, transfer, real property transfer (whether
such transfer is direct or indirect), intangible, recordation, registration,
documentary, stamp or similar Taxes.

 

“Treasury Regulations” means the final and temporary (but not proposed) income
Tax regulations promulgated under the Code, as such regulations may be amended
from time to time (including corresponding provisions of succeeding
regulations).

 

“U.S.” means the United States of America.

 

“Unqualified Tax Opinion” means a “will” opinion, without substantive
qualifications, of a nationally recognized law firm, which law firm is
reasonably acceptable to Ventas, to the effect that a transaction will not
affect the conclusions set forth in the Tax Opinion.

 

“Ventas” has the meaning set forth in the preamble.

 

“Ventas Board” has the meaning set forth in the Separation and Distribution
Agreement.

 

“Ventas Business” has the meaning set forth in the Separation and Distribution
Agreement.

 

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“Ventas Disqualifying Action” means (i) any action (or the failure to take any
action) by Ventas or any Ventas Entity (including entering into any agreement,
understanding or arrangement or any negotiations or discussions with respect to
any transaction or series of transactions) that, (ii) any acquisition of all or
a portion, or any event (or series of events) involving, the Equity Securities
of Ventas, any assets of Ventas or any Equity Securities or assets of any Ventas
Entity that, or (iii) any inaccuracy in or breach by Ventas or any Ventas Entity
of any of the representations, warranties or covenants of or made by Ventas in
this Agreement or in connection with the Tax Opinion (other than, in each case,
any representations and warranties made by Ventas on behalf of, or with respect
to, SpinCo or any SpinCo Entity) that, in each case, causes any of the
Transactions to fail to have Tax-Free Status; provided, however, that the term
“Ventas Disqualifying Action” shall not include any action expressly
contemplated by the Separation and Distribution Agreement or any Ancillary
Agreement or that is undertaken pursuant to the Restructuring, the Distribution
or the Plan of Reorganization.

 

“Ventas Entity” means any member of the Ventas Group other than Ventas.

 

“Ventas Group” means, individually or collectively, as the case may be,
(a) Ventas and any of its Subsidiaries (including, for the avoidance of doubt,
any such Subsidiary that is treated as a “disregarded entity” for U.S. federal
Income Tax purposes (or for purposes of any state, local or foreign Tax law)
immediately after the Effective Time (and giving effect to the Restructuring and
the Distribution), (b) any Person that shall have merged or liquidated into
Ventas or any such Subsidiary and (c) any predecessor or successor to any Person
otherwise described in this definition.

 

“Ventas Income” means (i) any REIT Taxable Income attributable solely to, or
arising solely with respect to, assets or activities of the Ventas Business
(excluding any REIT Taxable Income attributable to the Restructuring or the
Distribution), (ii) any REIT Taxable Income attributable to a Ventas
Disqualifying Action and (iii) any REIT Taxable Income resulting from any
inaccuracy in or breach by Ventas or any Ventas Entity of any of the
representations, warranties or covenants of or made by Ventas in this Agreement.

 

“Ventas REIT Distribution Indemnification Amount” means any amount required to
be distributed by SpinCo pursuant to Section 857(a) of the Code in order for
SpinCo to maintain its status as a REIT for any taxable period as a result of
any Ventas Income required to be included in the taxable income of SpinCo for
U.S. federal Income Tax purposes for such taxable period.

 

“Ventas Separate Tax Return” means any Separate Return required to be filed by
any member of the Ventas Group.

 

“Ventas Tax Proceeding” has the meaning set forth in Section 7.02(a).

 

“Ventas Taxes” means, without duplication, (i) any Taxes of or imposed on Ventas
or any Ventas Entity (including any Taxes reported on or otherwise imposed with
respect to a Combined Tax Return, but excluding any Restructuring/Distribution
Taxes), whether imposed as a result of an Adjustment, amendment or otherwise,
(ii) any Restructuring Transfer Taxes (A) due in connection with an
originally-filed Tax Return that Ventas determines to be due or (B) attributable
to, or arising with respect to, assets or activities of the Ventas Business (in
the

 

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case of clause (B), whether imposed as a result of an Adjustment, amendment or
otherwise), (iii) any Restructuring/Distribution Taxes, whether imposed as a
result of an Adjustment, amendment or otherwise, and (iv) any Taxes attributable
to a Ventas Disqualifying Action (including any REIT Taxes), whether imposed as
a result of an Adjustment, amendment or otherwise; provided, that,
notwithstanding anything in clauses (i) through (iv) to the contrary, Ventas
Taxes shall not include any SpinCo Taxes (including, for the avoidance of doubt,
any Taxes attributable to a SpinCo Disqualifying Action).

 

“Waiver” has the meaning set forth in Section 8.02(d).

 

Section 1.02.              Additional Definitions. Capitalized terms not defined
in this Agreement shall have the meaning ascribed to them in the Separation and
Distribution Agreement.

 

ARTICLE II

 

PREPARATION, FILING AND PAYMENT OF TAXES SHOWN DUE

ON TAX RETURNS

 

Section 2.01.               Combined Tax Returns. Ventas shall prepare and file
(or cause to be prepared and filed) all Combined Tax Returns and shall pay (or
cause to be paid) all Taxes shown to be due and payable on such Tax Returns;
provided, that SpinCo shall reimburse Ventas for any such Taxes that are SpinCo
Taxes.

 

Section 2.02.               Ventas Separate Tax Returns. Ventas shall prepare
and file (or cause to be prepared and filed) all Ventas Separate Tax Returns and
shall pay (or cause to be paid) all Taxes shown to be due and payable on such
Tax Returns; provided, that SpinCo shall reimburse Ventas for any such Taxes
that are SpinCo Taxes.

 

Section 2.03.               SpinCo Separate Tax Returns. SpinCo shall prepare
and file (or cause to be prepared and filed) all SpinCo Separate Tax Returns and
shall pay (or cause to be paid) all Taxes shown to be due and payable on such
Tax Returns; provided, that Ventas shall reimburse SpinCo for any such Taxes
that are Ventas Taxes.

 

Section 2.04.               Restructuring Transfer Tax Returns. Ventas shall
prepare and file (or cause to be prepared and filed) all Tax Returns required to
be filed with respect to Restructuring Transfer Taxes and Ventas shall pay (or
cause to be paid) all Taxes shown to be due and payable on such Tax Returns;
provided, that SpinCo shall reimburse Ventas for any such Taxes that are SpinCo
Taxes.

 

ARTICLE III

 

TAX RETURN PROCEDURES

 

Section 3.01.               Procedures relating to Combined Tax Returns and
Ventas Separate Tax Returns.

 

(a)                                 In connection with the preparation of any
Combined Tax Return pursuant to Section 2.01 or any Ventas Separate Tax Return
pursuant to Section 2.02 that may include Tax

 

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Items relating to the activities or assets of the SpinCo Business, SpinCo will
(and will cause the SpinCo Entities to) assist and cooperate with Ventas by
preparing and providing to Ventas such information and other documentation as
may be requested by or necessary to enable Ventas, in such form as Ventas may
reasonably request, to prepare such Combined Tax Return or Ventas Separate Tax
Return, including, but not limited to, pro forma Tax Returns for SpinCo and any
SpinCo Entity to be included in such Combined Tax Return or equivalent financial
data to be used in the preparation of such Ventas Separate Tax Return, as
applicable. Any such pro forma Tax Return or equivalent financial data shall be
prepared in accordance with past practices, accounting methods, elections and
conventions (“Past Practice”), unless otherwise required by Law or reasonably
requested in writing by Ventas, and shall be delivered no later than sixty (60)
days following Ventas’s request therefor. At its option, Ventas may engage an
accounting firm of its choice to review the pro forma Tax Return or equivalent
financial data, supporting documentation, and statements submitted by SpinCo and
in connection therewith, shall determine whether such Tax Return was prepared in
accordance with Past Practice. All costs and expenses associated with such
review will be borne by SpinCo upon receipt of invoices detailing the work
performed by such accounting firm.

 

(b)                                 Ventas (or its designee) shall determine the
entities to be included in any Combined Tax Return and make or revoke any Tax
elections, adopt or change any Tax accounting methods, and determine any other
position taken on or in respect of any Combined Tax Return or Ventas Separate
Tax Return. Notwithstanding the immediately preceding sentence, any Combined Tax
Return or Ventas Separate Tax Return shall, to the extent relating to SpinCo,
any SpinCo Entity or the activities or assets of the SpinCo Business, be
prepared in good faith. Ventas shall deliver to SpinCo for its review a draft of
any Combined Tax Return or Ventas Separate Tax Return, in each case, if such Tax
Return reflects or relates to Taxes for which SpinCo would reasonably be
expected to be liable hereunder, at least fifteen (15) days prior to the Due
Date for such Tax Return to enable SpinCo to analyze and comment on such Tax
Return (along with a statement setting forth the calculation of the Tax shown
due and payable on such Tax Return reimbursable by SpinCo under Sections 2.01 or
2.02). Ventas shall in good faith consider any such reasonable comments received
from SpinCo and Ventas and SpinCo shall attempt in good faith to resolve any
issues arising out of the review of any such Tax Return; provided, however, that
nothing herein shall prevent Ventas from timely filing (or causing to be filed)
any such Tax Return.

 

Section 3.02.               Procedures relating to SpinCo Separate Tax Returns.
In the case of any SpinCo Separate Tax Return that reflects or relates to Taxes
for which Ventas would reasonably be expected to be liable hereunder, SpinCo
shall (1) unless otherwise required by Law or agreed to in writing by Ventas,
prepare (or cause to be prepared) such Tax Return in a manner consistent with
Past Practice to the extent such items affect the Taxes for which Ventas may be
responsible pursuant to this Agreement, and (2) submit to Ventas a draft of any
such Tax Return (along with a statement setting forth the calculation of the Tax
shown due and payable on such Tax Return reimbursable by Ventas under
Section 2.03) at least fifteen (15) days prior to the Due Date for such Tax
Return to enable Ventas to analyze and comment on such Tax Return. SpinCo shall
reflect any such reasonable comments received from Ventas in good faith, to the
extent such comments relate to Taxes for which Ventas would reasonably be
expected to be liable hereunder.

 

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Section 3.03.               Preparation of all Tax Returns. Except as required
by applicable Law or as a result of a Final Determination, (i) neither Ventas
nor SpinCo shall (nor shall cause or permit any members of the Ventas Group or
SpinCo Group, respectively, to) take any position that is either inconsistent
with the Tax-Free Status (or analogous status under any state or local Law) or,
with respect to a specific Tax Item on any Tax Return, treat such Tax Item in a
manner that is inconsistent with the manner such Tax Item is reported on a Tax
Return prepared or filed by Ventas pursuant to Article II hereof (including,
without limitation, the claiming of a deduction previously claimed on any such
Tax Return) and (ii) Ventas and SpinCo shall (and shall cause the members of the
Ventas Group and SpinCo Group, respectively, to) prepare all Tax Returns in a
manner consistent with the terms of this Agreement and the Separation and
Distribution Agreement.

 

Section 3.04.               Tax Returns Reflecting Restructuring/Distribution
Taxes. Notwithstanding anything to the contrary in Articles II, III and IV, the
portion of any Tax Return that relates to any Restructuring/Distribution Taxes
or any Taxes attributable to a Ventas Disqualifying Action shall be prepared by
Ventas in the manner determined by Ventas in its sole discretion.

 

ARTICLE IV

 

TAX TIMING AND ALLOCATION

 

Section 4.01.               Timing of Payments. All Taxes required to be paid or
caused to be paid pursuant to Article II by either Ventas or SpinCo, as the case
may be, to an applicable Taxing Authority or to be reimbursed by Ventas or
SpinCo to the other Party (or any member of its Group) pursuant to this
Agreement, shall, in the case of a payment to a Taxing Authority, be paid on or
before the Due Date for the payment of such Taxes and, in the case of a payment
to the other Party, be paid at least two (2) business days before the Due Date
for the payment of such Taxes by the other Party.

 

Section 4.02.               Expenses. Except as expressly provided herein
(including, Section 3.01 and Section 11.01(b)), each Party shall bear its own
expenses incurred in connection with Articles II, III and IV.

 

Section 4.03.               Apportionment of SpinCo Taxes. For all purposes of
this Agreement, Ventas shall determine in its sole discretion exercised in good
faith which Tax Items are properly attributable to assets or activities of the
SpinCo Business (and in the case of a Tax Item that is properly attributable to
both the SpinCo Business and the Ventas Business, the allocation of such Tax
Item between the SpinCo Business and the Ventas Business).

 

ARTICLE V

 

INDEMNIFICATION

 

Section 5.01.               Indemnification by Ventas. Ventas shall pay, and
shall indemnify and hold SpinCo and the SpinCo Entities harmless from and
against, without duplication, (i) all Ventas Taxes, (ii) all Taxes (including
any REIT Taxes) incurred by SpinCo or any SpinCo

 

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Entity as a result of any inaccuracy in or breach by Ventas or any Ventas Entity
of any of the representations, warranties or covenants of or made by Ventas in
this Agreement, (iii) the Ventas REIT Distribution Indemnification Amount for
any taxable period, and (iv) any costs and expenses related to the foregoing
(including reasonable fees of attorneys and experts and out-of-pocket expenses).

 

Section 5.02.               Indemnification by SpinCo. SpinCo shall pay, and
shall indemnify and hold Ventas and the Ventas Entities harmless from and
against, without duplication, (i) all SpinCo Taxes, (ii) all Taxes (including
any REIT Taxes) incurred by Ventas or any Ventas Entity as a result of any
inaccuracy in or breach by SpinCo or any SpinCo Entity of any of the
representations, warranties or covenants of or made by SpinCo in this Agreement,
(iii) the SpinCo REIT Distribution Indemnification Amount for any taxable
period, and (vi) any costs and expenses related to the foregoing (including
reasonable fees of attorneys and experts and out-of-pocket expenses).

 

Section 5.03.               Characterization of and Adjustments to Payments.

 

(a)                                 For all Tax purposes, the Parties agree to
treat (and to cause their respective Affiliates to treat) (i) any payment
required by this Agreement (other than payments with respect to interest
accruing after the Acquisition Date) as either a contribution by Ventas to
SpinCo or a distribution by SpinCo to Ventas, as the case may be, occurring
immediately prior to the Acquisition or as a payment of an assumed or retained
Liability and (ii) any payment of non-federal Taxes by or to a Taxing Authority
or any payment of interest as taxable or deductible, as the case may be, to the
Party entitled under this Agreement to retain such payment or required under
this Agreement to make such payment, in each case, except as otherwise required
by applicable Law.

 

(b)                                 Any indemnification payment under this
Article V and under Article IV of the Separation and Distribution Agreement
shall be increased to take into account any inclusion in income of the
Indemnified Party arising from the receipt of such indemnity payment (including
any additional REIT Taxes or additional amount required to be distributed under
Section 857(a) of the Code resulting therefrom) and shall be decreased to take
into account any reduction in income of the Indemnified Party arising from such
indemnified Liability (including any reduction in REIT Taxes or reduction in the
amount required to be distributed under Section 857(a) of the Code resulting
therefrom). For purposes hereof, any adjustment to an indemnification payment on
account of Taxes (or REIT Taxes) shall be determined (i) using the highest
marginal rates in effect for Ventas, in the case of an Indemnified Party that is
a member of the Ventas Group, or for SpinCo, in the case of an Indemnified Party
that is a member of the SpinCo Group, at the time of the determination and
(ii) assuming that the Indemnified Party will be liable for Taxes at such rate
and has no Tax Attributes at the time of the determination.

 

Section 5.04.               Timing of Indemnification Payments. Indemnification
payments required pursuant to this Article V shall be paid by the Indemnifying
Party to the Indemnified Party within ten (10) business days of the receipt by
the Indemnifying Party of notification of the amount owed, together with
reasonable documentation showing (i) the basis for the calculation of such
amount and (ii) if the Indemnified Party has already paid such amount to the
relevant Taxing Authority or other recipient, evidence of such payment.

 

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Section 5.05.               Certain Tax Procedures. For the avoidance of doubt,
Section 4.11 of the Separation and Distribution Agreement shall apply with
respect to any indemnification payments required to be made pursuant to this
Agreement.

 

ARTICLE VI

 

REFUNDS, DEDUCTIONS

 

Section 6.01.               Refunds.

 

(a)                                 Ventas shall be entitled to all Refunds of
Taxes for which Ventas is responsible pursuant to Article II or for which Ventas
is or may be liable pursuant to Article V, and SpinCo shall be entitled to all
Refunds of Taxes for which SpinCo is responsible pursuant to Article II or for
which SpinCo is or may be liable pursuant to Article V. A Party receiving a
Refund to which the other Party is entitled pursuant to this Agreement shall pay
the amount to which such other Party is entitled within ten (10) days after the
receipt of the Refund.

 

(b)                                 In the event of an Adjustment relating to
Taxes for which one Party is responsible pursuant to Article II or is or may be
liable pursuant to Article V which would have given rise to a Refund but for an
offset against the Taxes for which the other Party is or may be liable pursuant
to Article V (the “Benefited Party”), then the Benefited Party shall pay to the
other Party, within ten (10) days of the Final Determination of such Adjustment
an amount equal to the lesser of (i) the amount of such hypothetical Refund or
(ii) the amount of such reduction in the Taxes of the Benefited Party, in each
case plus interest at the rate set forth in Section 6621(a)(1) of the Code on
such amount for the period from the filing date of the Tax Return that would
have given rise to such Refund to the payment date. For purposes of this
Section 6.01(b), a decrease in REIT Taxable Income shall be considered a
reduction in Taxes of a Benefited Party, and an increase in REIT Taxable Income
shall be considered Taxes for which a party is or may be liable.

 

(c)                                  Notwithstanding Section 6.01(a), to the
extent that a Party applies or causes to be applied an overpayment of Taxes as a
credit toward or a reduction in Taxes otherwise payable (or a Taxing Authority
requires such application in lieu of a Refund) and such overpayment of Taxes, if
received as a Refund, would have been payable by such Party to the other Party
pursuant to this Section 6.01, such Party shall pay such amount to the other
Party no later than the Due Date of the Tax Return for which such overpayment is
applied to reduce Taxes otherwise payable.

 

(d)                                 To the extent that the amount of any Refund
under this Section 6.01 is later reduced by a Taxing Authority or a Tax
Proceeding, such reduction shall be allocated to the Party to which such Refund
was allocated pursuant to this Section 6.01 and an appropriate adjusting payment
shall be made.

 

Section 6.02.               Treatment of Deductions Associated with
Equity-Related Compensation. The treatment of Tax deductions associated with
equity-related compensation shall be governed by Section 5.3 of the Employee
Matters Agreement.

 

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ARTICLE VII

 

TAX PROCEEDINGS

 

Section 7.01.               Notification of Tax Proceedings. Within thirty (30)
days after an Indemnified Party becomes aware of the commencement of a Tax
Proceeding that may give rise to Taxes for which an Indemnifying Party is
responsible pursuant to Article V, such Indemnified Party shall notify the
Indemnifying Party of such Tax Proceeding, and thereafter shall promptly forward
or make available to the Indemnifying Party copies of notices and communications
relating to such Tax Proceeding. The failure of the Indemnified Party to notify
the Indemnifying Party of the commencement of any such Tax Proceeding within
such thirty (30)-day period or promptly forward any further notices or
communications shall not relieve the Indemnifying Party of any obligation which
it may have to the Indemnified Party under this Agreement except to the extent
that the Indemnifying Party is actually prejudiced by such failure.

 

Section 7.02.               Tax Proceedings.

 

(a)                                 Generally. Except as provided in
Section 7.02(c)(i), Ventas (or such member of the Ventas Group as Ventas shall
designate) shall have the sole right to control, and to represent the interests
of the members of the Ventas Group and the members of the SpinCo Group and to
employ counsel of its choice at its expense in, any Tax Proceeding (including
any Tax Proceeding with respect to Restructuring/Distribution Taxes) relating to
(i) any Combined Tax Return, (ii) any Ventas Separate Tax Return, (iii) any
Restructuring/Distribution Taxes, or (iv) any Non-Income Taxes that are both
SpinCo Taxes and Ventas Taxes (each, a “Ventas Tax Proceeding”). Except as
provided in Section 7.02(c)(ii), SpinCo (or such member of the SpinCo Group as
SpinCo shall designate) shall have the sole right to control, and to represent
the interests of the members of the SpinCo Group and to employ counsel of its
choice at its expense in, (i) any Tax Proceeding relating to any SpinCo Separate
Tax Return and (ii) any Non-Income Taxes or Restructuring Transfer Taxes that
are attributable to, or arise with respect to, assets or activities of the
SpinCo Business, in each case, other than a Ventas Proceeding (a “SpinCo Tax
Proceeding”).

 

(b)                                 Power of Attorney. SpinCo shall (and shall
cause the members of the SpinCo Group to) execute and deliver to Ventas (or such
member of the Ventas Group as Ventas shall designate) any power of attorney or
other document reasonably requested by Ventas (or such designee) in connection
with any Ventas Tax Proceeding.

 

(c)                                  Participation Rights.

 

(i)                                     Ventas Tax Proceedings. In the event of
any Ventas Tax Proceeding the resolution of which could reasonably be expected
to give rise to an indemnification obligation of SpinCo pursuant to Article V,
(A) Ventas shall consult with SpinCo reasonably in advance of taking any
significant action in connection with such Tax Proceeding, (B) Ventas shall
consult with SpinCo and offer SpinCo a reasonable opportunity to comment before
submitting any written materials prepared or furnished in connection with such
Tax Proceeding, (C) Ventas shall defend such Tax Proceeding diligently and in
good faith as if it were the only party in interest in connection with such Tax
Proceeding, and (D) Ventas shall provide SpinCo copies of any

 

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written materials relating to such Tax Proceeding received from the relevant
Taxing Authority. Notwithstanding anything in the preceding sentence to the
contrary, the final determination of the positions taken, including with respect
to settlement or other disposition, in any Ventas Tax Proceeding shall be made
in the sole discretion of Ventas and shall be final and not subject to the
dispute resolution provisions of Section 11.01 (or Article VII of the Separation
and Distribution Agreement).

 

(ii)                                  SpinCo Tax Proceedings. In the event of
any SpinCo Tax Proceeding the resolution of which could reasonably be expected
to give rise to an indemnification obligation of Ventas pursuant to Article V or
which otherwise could reasonably be expected to have a significant adverse
impact on Ventas, (A) SpinCo shall consult with Ventas reasonably in advance of
taking any significant action in connection with such Tax Proceeding, (B) SpinCo
shall consult with Ventas and offer Ventas a reasonable opportunity to comment
before submitting any written materials prepared or furnished in connection with
such Tax Proceeding, (C) SpinCo shall defend such Tax Proceeding diligently and
in good faith as if it were the only party in interest in connection with such
Tax Proceeding, (D) SpinCo shall provide Ventas copies of any written materials
relating to such Tax Proceeding received from the relevant Taxing Authority,
(E) Ventas shall be entitled to participate in such Tax Proceeding at its own
expense and (F) SpinCo shall not settle, compromise or abandon any such Tax
Proceeding without obtaining the prior written consent of Ventas, which consent
shall not be unreasonably withheld, conditioned or delayed.

 

ARTICLE VIII

 

TAX-FREE STATUS OF THE DISTRIBUTION

 

Section 8.01.               Representations and Warranties.

 

(a)                                 SpinCo.

 

(i)                                     SpinCo hereby represents and warrants
that (i) it has examined (A) the representation letter by and or on behalf of
Ventas and SpinCo addressed to Tax Counsel and delivered in connection with the
Tax Opinion and (B) any other information, documents or other materials
delivered or deliverable by Ventas or SpinCo in connection with the Tax Opinion
(all of the foregoing, collectively, the “Tax Opinion Documents”) and (ii) the
facts presented and the representations made in the Tax Opinion Documents, to
the extent descriptive of or in reference to the SpinCo Group or the SpinCo
Business (including with respect to the plans, proposals, intentions and
policies of the SpinCo Group), are true, correct and complete in all respects.

 

(ii)                                  SpinCo hereby represents and warrants that
during the two (2)-year period ending on the Distribution Date, there was no
“agreement,” “understanding,” “arrangement,” “substantial negotiations” or
“discussions” (as such terms are defined in Treasury Regulations
Section 1.355-7(h)) by any one or more officers or directors of any member of
the SpinCo Group or by any other person or persons with the implicit or explicit
permission of one or more of such officers or directors regarding an acquisition
of all or a significant portion of the Equity Securities of SpinCo (or any
predecessor); provided, that no representation or warranty is made by SpinCo
regarding any “agreement,” “understanding,” “arrangement,” “substantial

 

17

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negotiations” or “discussions” (as such terms are defined in Treasury
Regulations Section 1.355-7(h)) by one or more officers or directors of Ventas.

 

(b)                                 Ventas. Ventas hereby represents and
warrants that (i) it has delivered complete and accurate copies of the Tax
Opinion Documents to SpinCo and (ii) the facts presented and the representations
made in the Tax Opinion Documents, to the extent descriptive of or in reference
to the Ventas Group or the Ventas Business (including with respect to the
business purposes for the Distribution described in the Tax Opinion Documents
and the plans, proposals, intentions and policies of the Ventas Group), are
true, correct and complete in all respects.

 

(c)                                  No Contrary Plan. Each of Ventas and SpinCo
represents and warrants that neither it, nor any of its Affiliates, has any plan
or intention to take any action (or fail to take any action) or knows of any
fact or circumstance (after due inquiry) (A) which is inconsistent with any
statements or representations made in the Tax Opinion Documents, this Agreement
or the Separation and Distribution Agreement (or that could cause any such
statements or representations to be untrue) or (B) which may cause any of the
Transactions not to have Tax-Free Status.

 

Section 8.02.               Restrictions Relating to the Distribution.

 

(a)                                 General. SpinCo shall not, and shall not
permit any SpinCo Entity to, take any action that constitutes (and shall not
fail to take an action, the omission of which would result in) a Disqualifying
Action described in the definition of SpinCo Disqualifying Action.

 

(b)                                 SpinCo Obligations. SpinCo shall not take
any action (including, but not limited to, any cessation, transfer or
disposition of all or any portion of any SpinCo Business, payment of
extraordinary dividends and acquisitions or issuance of Equity Securities) or
permit any member of the SpinCo Group to take any such action, and SpinCo shall
not fail to take any such action or permit any SpinCo Entity to fail to take any
such action, in each case, unless such action or failure to act (x) could not
reasonably be expected to cause any of the Transactions to fail to have Tax-Free
Status or (y) could not require Ventas or SpinCo to reflect a liability or
reserve for Taxes or other amounts with respect to the Transactions in its
financial statements.

 

(c)                                  SpinCo Restrictions. Prior to the first
(1st) day after the end of the Restriction Period, SpinCo:

 

(i)                                     (x) shall continue and cause to be
continued the active conduct (within the meaning of Section 355(b) of the Code)
of the SpinCo Active Trade or Business as conducted immediately prior to the
Distribution, taking into account Section 355(b)(3) of the Code and Revenue
Ruling 2007-42, 2007-2 C.B. 44, and (y) shall not engage (or permit any SpinCo
Entity to engage) in any transaction (including, without limitation, any
cessation, transfer or disposition of all or any portion of any SpinCo Business)
that could reasonably be expected to result in SpinCo ceasing to be a company
engaged in the SpinCo Active Trade or Business.

 

(ii)                                  shall not, and shall not permit any SpinCo
Entity (other than any SpinCo Entity treated as an entity disregarded as
separate from its owner for U.S. federal Income Tax

 

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purposes) to, voluntarily dissolve or liquidate (or take any other action or
enter into any transaction that would effect a liquidation for U.S. federal
Income Tax purposes).

 

(iii)                               shall not (1) enter into, solicit, agree to,
participate in, approve or effect any Acquisition Transaction or, to the extent
SpinCo has the right to prohibit any Acquisition Transaction, permit any
Acquisition Transaction to occur, (2) redeem or otherwise repurchase or agree to
redeem or otherwise repurchase (directly or through an Affiliate) any Equity
Securities of SpinCo except to the extent such repurchases satisfy
Section 4.05(1)(b) of Revenue Procedure 96-30 (as in effect prior to the
amendment of such Revenue Procedure by Revenue Procedure 2003-48), (3) amend its
certificate of incorporation (or other organizational documents), or take any
other action, whether through a stockholder vote or otherwise, affecting the
relative voting rights of its Equity Securities (including through the
conversion of any Equity Securities into another class of Equity Securities),
(4) merge or consolidate (or agree to merge or consolidate) with any other
Person and shall not permit any SpinCo Entity to merge or consolidate (or agree
to merger or consolidate) with any other Person (other than SpinCo or a SpinCo
Entity) or (5) take any other action or actions (including any action or
transaction that would be reasonably likely to be inconsistent with any
statement or representation made in the Tax Opinion Documents) which,
individually or in the aggregate (and taking into account any other transactions
described in this Section 8.02(c)(iii)) would be reasonably likely to have the
effect of causing or permitting one or more Persons (whether or not acting in
concert) to acquire, directly or indirectly, Equity Securities representing a
Fifty-Percent or Greater Interest in SpinCo or otherwise jeopardize the Tax-Free
Status of any of the Transactions. In addition, SpinCo shall not at any time,
whether before or subsequent to the expiration of the Restriction Period, engage
in any action described in the immediately preceding sentence if it is pursuant
to an agreement negotiated (in whole or in part) prior to the second (2nd)
anniversary of the Distribution, even if at the time of the Distribution or
thereafter such action is subject to various conditions.

 

(iv)                              shall not, and shall not permit any SpinCo
Entity to, (x) sell, transfer, or otherwise dispose of or agree to, sell,
transfer or otherwise dispose (including in any transaction treated for U.S.
federal Income Tax purposes as a sale, transfer or disposition) of assets
(including, any shares of Equity Securities of a Subsidiary) that, in the
aggregate, constitute more than thirty percent (30%) of the gross assets of
SpinCo or more than thirty percent (30%) of the consolidated gross assets of
SpinCo and the members of its SAG or (y) sell, transfer, or otherwise dispose of
or agree to, sell, transfer or otherwise dispose (including in any transaction
treated for U.S. federal Income Tax purposes as a sale, transfer or disposition)
or otherwise terminate the business conducted by Healthtrust. The foregoing
sentence shall not apply to (A) sales, transfers, or dispositions of assets in
the Ordinary Course of Business, (B) any cash paid to acquire assets from an
unrelated Person in an arm’s-length transaction, (C) any assets transferred to a
Person that is disregarded as an entity separate from the transferor for U.S.
federal Income Tax purposes or (D) any mandatory or optional repayment (or
pre-payment) of any indebtedness of SpinCo (or any member of its SAG). The
percentages of gross assets of SpinCo or of the consolidated gross assets SpinCo
and the members of its SAG, as the case may be, sold, transferred, or otherwise
disposed of, shall be based on the fair market value of the gross assets of such
entity or entities as of the Distribution Date. For purposes of this
Section 8.02(c)(iv), a merger of SpinCo (or a member of its SAG) with and into
any Person shall constitute a disposition of all of the assets of such entity or
such member.

 

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(d)                                 Notwithstanding the restrictions imposed by
Section 8.02(c), during the Restriction Period, SpinCo may proceed with any of
the actions or transactions described in Section 8.02(c), if (x) such action or
transaction is not described in Section 8.02(a) or Section 8.02(b) and (y) prior
to entering into any agreement contemplating such action or transaction, and
prior to taking or consummating any such action or transaction, (i) SpinCo shall
first have requested Ventas to obtain a private letter ruling from the IRS (and
any other relevant Taxing Authority) (a “Post-Distribution Ruling”) in
accordance with Section 8.03 of this Agreement to the effect that such action or
transaction will not affect the Tax-Free Status of any of the Transactions and
Ventas shall have received such Post-Distribution Ruling in form and substance
satisfactory to Ventas in its sole and absolute discretion, (ii) SpinCo shall
have provided Ventas with an Unqualified Tax Opinion in form and substance
satisfactory to Ventas in its sole and absolute discretion, or (iii) Ventas
shall have waived in writing (a “Waiver”) the requirement to obtain such
Post-Distribution Ruling or Unqualified Tax Opinion. In determining whether a
Post-Distribution Ruling or Unqualified Tax Opinion is satisfactory, Ventas
shall exercise its discretion in good faith and may consider, among other
factors, the appropriateness of any underlying assumptions or representations
used as a basis for the Post-Distribution Ruling or Unqualified Tax Opinion and
the views on the substantive merits. For the avoidance of doubt, SpinCo shall
not be relieved of any indemnification obligation pursuant to Article V or
otherwise under this Agreement as a result of having satisfied the requirements
of clauses (i), (ii) or (iii) of this Section 8.02(d).

 

(e)                                  Certain Issuances of Capital Stock. If
SpinCo proposes to enter into any Section 8.02(e) Acquisition Transaction or, to
the extent SpinCo has the right to prohibit any Section 8.02(e) Acquisition
Transaction, proposes to permit any Section 8.02(e) Acquisition Transaction to
occur, in each case, during the Restriction Period, SpinCo, shall provide
Ventas, no later than ten (10) days following the signing of any written
agreement with respect to any Section 8.02(e) Acquisition Transaction, with a
written description of such transaction (including the type and amount of SpinCo
Equity Securities to be issued in such transaction).

 

(f)                                   Tax Reporting. Each of SpinCo and Ventas
covenants and agrees that it will not take, and will cause its respective
Affiliates not to take, any position on any Tax Return that is inconsistent with
the Tax-Free Status of the Transactions.

 

Section 8.03.               Procedures Regarding Post-Distribution Rulings and
Unqualified Tax Opinions.

 

(a)                                 Notification. If SpinCo determines that it
desires to take one of the actions described in Sections 8.02(c) (a “Notified
Action”), SpinCo shall promptly notify Ventas of this fact in writing.

 

(b)                                 Post-Distribution Rulings or Unqualified Tax
Opinions at SpinCo’s Request. Upon the reasonable request of SpinCo pursuant to
Section 8.03(a), Ventas shall cooperate with SpinCo and use its commercially
reasonable efforts to seek to obtain, as expeditiously as possible, a
Post-Distribution Ruling or an Unqualified Tax Opinion for the purpose of
permitting SpinCo to take the Notified Action unless Ventas shall have waived
the requirement to obtain such Post-Distribution Ruling or Unqualified Tax
Opinion in writing pursuant to Section 8.02(d). Notwithstanding the foregoing,
in no event shall Ventas be required to file or cooperate in the

 

20

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filing of any ruling request for a Post-Distribution Ruling under this
Section 8.03(b) unless Spinco represents that (i) it has read such ruling
request, and (ii) all statements, information and representations relating to
any member of the SpinCo Group contained in such ruling request are (subject to
any qualifications therein) true, correct and complete. SpinCo shall reimburse
Ventas for all reasonable costs and expenses incurred by the Ventas Group in
obtaining a Post-Distribution Ruling or Unqualified Tax Opinion requested by
Ventas within ten (10) days after receiving an invoice from Ventas therefor.

 

(c)                                  Post-Distribution Rulings or Unqualified
Tax Opinions at Ventas’s Request. Ventas shall have the right to obtain a
Post-Distribution Ruling or a tax opinion at any time in its sole and absolute
discretion. If Ventas determines to obtain a Post-Distribution Ruling or a tax
opinion, SpinCo shall (and shall cause each SpinCo Entity to) cooperate with
Ventas and use commercial reasonably efforts to take any and all actions
reasonably requested by Ventas in connection with obtaining such
Post-Distribution Ruling or tax opinion (including, without limitation, by
making any representation or covenant or providing any information, documents
and materials requested by the IRS, any other relevant Taxing Authority or the
Tax Counsel issuing such opinion); provided, that SpinCo shall not be required
to make (or cause a SpinCo Entity to make) any representation or covenant that
is inconsistent with historical facts or as to future matters or events over
which it has no control. Ventas and SpinCo shall each bear its own costs and
expenses in obtaining a Post-Distribution Ruling or tax opinion requested by
Ventas.

 

(d)                                 All Post-Distribution Rulings. Ventas shall
have sole and exclusive control over the process of obtaining any
Post-Distribution Ruling, and only Ventas shall be permitted to apply for a
Post-Distribution Ruling. In connection with obtaining a Post-Distribution
Ruling, (i) Ventas shall keep SpinCo informed in a timely manner of all material
actions taken or proposed to be taken by Ventas in connection therewith;
(ii) Ventas shall (1) reasonably in advance of the submission of any request for
a Post-Distribution Ruling provide SpinCo with a draft copy thereof;
(2) reasonably consider SpinCo’s comments on such draft copy; and (3) provide
SpinCo with a final copy; and (iii) Ventas shall provide SpinCo with notice
reasonably in advance of, and SpinCo shall have the right to attend, any
formally scheduled meetings with the IRS (subject to the approval of the IRS)
that relate to such Post-Distribution Ruling. Neither SpinCo nor any SpinCo
Entity shall seek any guidance from the IRS or any other Taxing Authority
(whether written, verbal or otherwise) at any time concerning the Restructuring
or the Distribution (including the impact of any transaction on the
Restructuring or the Distribution) without Ventas’s prior written consent.

 

Section 8.04.               Section 336(e) Election. If Ventas determines, in
its sole discretion, that a protective election under Section 336(e) of the Code
(a “Section 336(e) Election”) shall be made with respect to the Distribution,
SpinCo shall (or shall cause the relevant SpinCo Entity to) join with Ventas or
the relevant Ventas Entity in the making of such election and shall take any
action reasonably requested by Ventas or that is otherwise necessary to give
effect to such election (including making any other related election). If a
Section 336(e) Election is made with respect to the Distribution, then this
Agreement shall be amended in such a manner as is determined by Ventas in good
faith to take into account such Section 336(e) Election (including by requiring
that, in the event the Transactions fail to have Tax-Free Status and Ventas is
not entitled to indemnification for any Taxes (including REIT Taxes) or Losses
arising from such failure, SpinCo shall pay over to Ventas any refund, credit,
or other reduction in otherwise

 

21

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required Tax payments realized by the SpinCo Group or any member of the SpinCo
Group arising from the step-up in Tax basis resulting from the
Section 336(e) Election).

 

ARTICLE IX

[Reserved]

 

ARTICLE X

COOPERATION

 

Section 10.01. General Cooperation.

 

(a)                                 The Parties shall each cooperate fully (and
each shall cause its respective Subsidiaries to cooperate fully) with all
reasonable requests in writing (“Information Request”) from the other Party
hereto, or from an agent or Representative of such Party, in connection with the
preparation and filing of Tax Returns (including the preparation of Tax
Packages), claims for Refunds, Tax Proceedings, and calculations of amounts
required to be paid pursuant to this Agreement, in each case, related or
attributable to or arising in connection with Taxes of any of the Parties or
their respective Subsidiaries covered by this Agreement and the establishment of
any reserve required in connection with any financial reporting (a “Tax
Matter”). Such cooperation shall include the provision of any information
reasonably necessary or helpful in connection with a Tax Matter (“Information”)
and shall include, without limitation, at each Party’s own cost:

 

(i)                                     the provision of any Tax Returns of the
Parties and their respective Subsidiaries, books, records (including information
regarding ownership, Tax basis of property, and earnings and profits),
documentation and other information relating to such Tax Returns, including
accompanying schedules, related work papers, and documents relating to rulings
or other determinations by Taxing Authorities;

 

(ii)                                  the execution of any document (including
any power of attorney) in connection with any Tax Proceedings of any of the
Parties or their respective Subsidiaries, or the filing of a Tax Return or a
Refund claim of the Parties or any of their respective Subsidiaries;

 

(iii)                               the use of the Party’s reasonable best
efforts to obtain any documentation in connection with a Tax Matter; and

 

(iv)                              the use of the Party’s reasonable best efforts
to obtain any Tax Returns (including accompanying schedules, related work
papers, and documents), documents, books, records or other information in
connection with the filing of any Tax Returns of any of the Parties or their
Subsidiaries.

 

(b)                                 Each Party shall make its employees,
advisors, and facilities available, without charge, on a reasonable and mutually
convenient basis in connection with the foregoing matters.

 

Section 10.02. Retention of Records. Ventas and SpinCo shall retain or cause to
be retained all Tax Returns, schedules and work papers, and all material records
or other documents relating thereto in their possession, until sixty (60) days
after the expiration of the applicable statute of limitations (including any
waivers or extensions thereof) of the taxable periods to

 

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which such Tax Returns and other documents relate or until the expiration of any
additional period that any Party reasonably requests, in writing, with respect
to specific material records or documents. A Party intending to destroy any
material records or documents shall provide the other Party with reasonable
advance notice and the opportunity to copy or take possession of such records
and documents. The Parties hereto will notify each other in writing of any
waivers or extensions of the applicable statute of limitations that may affect
the period for which the foregoing records or other documents must be retained.

 

ARTICLE XI

 

MISCELLANEOUS

 

Section 11.01. Dispute Resolution. In the event of any dispute between the
Parties as to any matter covered by this Agreement, the Parties shall cooperate
in good faith to resolve such dispute. If the Parties cannot resolve such
dispute within thirty (30) days from the time such dispute arises, the Parties
shall appoint a nationally recognized independent accounting firm (other than
the current auditing firm of Ventas or SpinCo) (the “Accounting Firm”) to
resolve such dispute. The Parties shall cooperate in good faith in jointly
selecting the Accounting Firm. The Accounting Firm shall make determinations
with respect to the disputed items based solely on representations made by
Ventas and SpinCo and their respective Representatives, and not by independent
review, and shall function only as an expert and not as an arbitrator and shall
be required to make a determination in favor of one Party only. The Parties
shall require the Accounting Firm to resolve all disputes no later than fifteen
(15) days after the submission of such dispute to the Accounting Firm, but in no
event later than the Due Date for the payment of Taxes or the filing of the
applicable Tax Return, if applicable, and agree that all decisions by the
Accounting Firm with respect thereto shall be final and conclusive and binding
on the Parties. The Accounting Firm shall resolve all disputes in a manner
consistent with this Agreement and, to the extent not inconsistent with this
Agreement, in a manner consistent with the Past Practices of Ventas and the
members of the Ventas Group, except as otherwise required by applicable Law. The
Parties shall require the Accounting Firm to render all determinations in
writing and to set forth, in reasonable detail, the basis for such
determination. The fees and expenses of the Accounting Firm shall be paid by the
non-prevailing Party.

 

Section 11.02. Tax Sharing Agreements. All Tax sharing, indemnification and
similar agreements, written or unwritten, as between Ventas or a Ventas Entity,
on the one hand, and SpinCo or a SpinCo Entity, on the other hand (other than
this Agreement, the Separation and Distribution Agreement, any other Ancillary
Agreement and any agreement entered into after the Distribution), shall be or
shall have been terminated no later than the Effective Time and, after the
Effective Time, none of Ventas, any Ventas Entity, SpinCo or any SpinCo Entity
shall have any further rights or obligations under any such Tax sharing,
indemnification or similar agreement.

 

Section 11.03. Interest on Late Payments. With respect to any payment between
the Parties pursuant to this Agreement not made by the due date set forth in
this Agreement for such payment, the outstanding amount will accrue interest at
a rate per annum equal to the rate in effect for underpayments under
Section 6621 of the Code from such due date to and including

 

23

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the earlier of the ninetieth (90th) day or the payment date, and thereafter will
accrue interest at a rate per annum equal to Prime Rate plus 2%.

 

Section 11.04. Survival of Covenants. Except as otherwise contemplated by this
Agreement, all covenants and agreements of the Parties contained in this
Agreement shall survive the Effective Time and remain in full force and effect
in accordance with their applicable terms; provided, however, that the
representations and warranties and all indemnification for Taxes shall survive
until sixty (60) days following the expiration of the applicable statute of
limitations (taking into account all extensions thereof), if any, for assessment
of the Tax that gave rise to the indemnification; provided, further, that, in
the event that notice for indemnification has been given within the applicable
survival period, such indemnification shall survive until such time as such
claim is finally resolved.

 

Section 11.05. Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced under any Law or as a matter of
public policy, all other conditions and provisions of this Agreement shall
remain in full force and effect. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the Parties to
this Agreement shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the Parties as closely as possible in a mutually
acceptable manner.

 

Section 11.06. Entire Agreement. Except as otherwise expressly provided in this
Agreement and subject to Section 11.12 hereof, this Agreement, the Employee
Matters Agreement, and the Separation and Distribution Agreement constitute the
entire agreement of the Parties hereto with respect to the subject matter of
this Agreement and supersede all prior agreements and undertakings, both written
and oral, between or on behalf of the Parties hereto with respect to the subject
matter of this Agreement.

 

Section 11.07. No Third-Party Beneficiaries. Except as provided in Article V
with respect to indemnified Parties, this Agreement is for the sole benefit of
the Parties to this Agreement and their respective Subsidiaries and their
permitted successors and assigns and nothing in this Agreement, express or
implied, is intended to or shall confer upon any other Person any legal or
equitable right, benefit or remedy of any nature whatsoever under or by reason
of this Agreement.

 

Section 11.08. Specific Performance. In the event of any actual or threatened
default in, or breach of, any of the terms, conditions and provisions of this
Agreement, the Party who is or is to be thereby aggrieved shall have the right
to specific performance and injunctive or other equitable relief of its rights
under this Agreement, in addition to any and all other rights and remedies at
law or in equity, and all such rights and remedies shall be cumulative. The
Parties agree that the remedies at law for any breach or threatened breach,
including monetary damages, may be inadequate compensation for any loss, and
that any defense in any action for specific performance that a remedy at law
would be adequate is waived. Any requirements for the securing or posting of any
bond with such remedy are waived by the Parties to this Agreement.

 

Section 11.09. Amendment. No provision of this Agreement may be amended or
modified except by a written instrument signed by the Parties to this Agreement.
No waiver by any Party of any provision of this Agreement shall be effective
unless explicitly set forth in

 

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writing and executed by the Party so waiving. The waiver by any Party of a
breach of any provision of this Agreement shall not operate or be construed as a
waiver of any other subsequent breach.

 

Section 11.10. Rules of Construction. Interpretation of this Agreement shall be
governed by the following rules of construction: (i) words in the singular shall
be held to include the plural and vice versa and words of one gender shall be
held to include the other gender as the context requires; (ii) references to the
terms Article, Section, paragraph, clause, Exhibit and Schedule are references
to the Articles, Sections, paragraphs, clauses, exhibits and schedules of this
Agreement unless otherwise specified; (iii) the terms “hereof,” “herein,”
“hereby,” “hereto,” and derivative or similar words refer to this entire
Agreement, including the Schedules and Exhibits hereto; (iv) references to “$”
shall mean U.S. dollars; (v) the word “including” and words of similar import
when used in this Agreement shall mean “including without limitation,” unless
otherwise specified; (vi) the word “or” shall not be exclusive; (vii) references
to “written” or “in writing” include in electronic form; (viii) provisions shall
apply, when appropriate, to successive events and transactions; (ix) the table
of contents and headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement; (x) Ventas and SpinCo have each participated in the negotiation and
drafting of this Agreement and if an ambiguity or question of interpretation
should arise, this Agreement shall be construed as if drafted jointly by the
parties hereto and no presumption or burden of proof shall arise favoring or
burdening either Party by virtue of the authorship of any of the provisions in
this Agreement or any interim drafts of this Agreement; and (xi) a reference to
any Person includes such Person’s successors and permitted assigns.

 

Section 11.11. Counterparts. This Agreement may be executed in one or more
counterparts, each of which when executed shall be deemed to be an original, but
all of which taken together shall constitute one and the same agreement.
Delivery of an executed counterpart of a signature page to this Agreement by
facsimile or portable document format (PDF) shall be as effective as delivery of
a manually executed counterpart of any such Agreement.

 

Section 11.12. Coordination with Separation and Distribution Agreement. In the
event of any inconsistency between this Agreement and the Separation and
Distribution Agreement, the Employee Matters Agreement, or any other Ancillary
Agreement with respect to matters addressed herein the provisions of this
Agreement shall control.

 

Section 11.13. Coordination with the Employee Matters Agreement. To the extent
any covenants or agreements between the Parties with respect to employee
withholding Taxes are expressly set forth in the Employee Matters Agreement,
such Taxes shall be governed exclusively by the Employee Matters Agreement and
not by this Agreement.

 

Section 11.14. Governing Law. This Agreement (and any claims or disputes arising
out of or related hereto or to the transactions contemplated hereby or to the
inducement of any Party to enter herein, whether for breach of contract,
tortious conduct or otherwise and whether predicated on common law, statute or
otherwise) shall be governed by and construed and interpreted in accordance with
the Laws of the State of Delaware, irrespective of the choice of Laws principles
of the State of Delaware, including all matters of validity, construction,
effect, enforceability, performance and remedies.

 

25

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Section 11.15. Assignability. This Agreement shall be binding upon and inure to
the benefit of the Parties and their respective successors and permitted
assigns. Neither Party may assign its rights or delegate its obligations under
this Agreement without the express prior written consent of the other Party
hereto; provided, however, that each Party may assign all of its rights and
obligations under this Agreement to any of its Subsidiaries; provided, further,
that no such assignment shall release the assigning Party from any of its
liabilities or obligations under this Agreement.

 

Section 11.16. Notices. Any notice, demand, claim or other communication under
this Agreement will be in writing and will be deemed to have been given (a) on
delivery if delivered personally; (b) on the date on which delivery thereof is
guaranteed by the carrier if delivered by a national courier guaranteeing
delivery within a fixed number of days of sending; or (c) on the date of
facsimile transmission thereof if delivery is confirmed, but, in each case, only
if addressed to the Parties in the following manner at the following addresses
or facsimile numbers (or at the other address or other number as a Party may
specify by notice to the others):

 

If to Ventas, to:

 

Ventas, Inc.

10350 Ormsby Park Place, Suite 300

Louisville, KY 40223

Attention:

General Counsel

Facsimile:

(502) 357-9001

 

 

with a copy (until the Effective Time) to:

 

Wachtell, Lipton, Rosen & Katz

51 West 52nd Street

New York, New York 10019

Attention:

Robin Panovka

 

Karessa Cain

 

Victor Goldfeld

Facsimile:

(212) 403-2000

 

 

If to SpinCo, to:

 

 

Care Capital Properties, Inc.

353 North Clark Street

Suite 2900

Chicago, Illinois 60654

Attention:

General Counsel

Facsimile:

312-881-4798

 

26

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with a copy (until the Effective Time) to:

 

Wachtell, Lipton, Rosen & Katz

51 West 52nd Street

New York, New York 10019

Attention:

Robin Panovka

 

Karessa Cain

 

Victor Goldfeld

Facsimile:

(212) 403-2000

 

Section 11.17. Effective Date. This Agreement shall become effective only upon
the occurrence of the Distribution.

 

[The remainder of this page is intentionally left blank.]

 

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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by
their duly authorized representatives as of the day and year first above
written.

 

 

VENTAS, INC.

 

 

 

 

 

By:

/s/ Brian K. Wood

 

 

Name: Brian K. Wood

 

 

Title: Sr. Vice President & Chief Tax Officer

 

 

 

 

 

 

 

CARE CAPITAL PROPERTIES, INC.

 

 

 

 

 

 

 

By:

/s/ Raymond J. Lewis

 

 

Name: Raymond J. Lewis

 

 

Title: Chief Executive Officer

 

[Signature Page to Tax Matters Agreement]

 

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