Document:

Exhibit 10.3

Exhibit 10.3

GUARANTY OF AGREEMENT REGARDING LEASES

THIS GUARANTY OF AGREEMENT REGARDING LEASES (this “Guaranty”) is made and entered into
to be effective as of November 7, 2006 (the “Effective Date”), by SENIOR CARE, INC., a
Delaware corporation (“Guarantor”) in favor of VENTAS REALTY, LIMITED PARTNERSHIP, a
Delaware limited partnership (“VRLP”).

R E C I T A L S :

WHEREAS, as of the Effective Date, VRLP and Senior Care Operations Holdings, LLC, a Delaware
limited liability company (“SCT Holdings”), have executed and delivered that certain
Agreement Regarding Leases (as the same may be renewed, extended, amended or modified from time to
time, with or without notice to Guarantor, the “Agreement Regarding Leases”), pertaining to
the Facilities referred to therein;

WHEREAS, Guarantor is a direct or indirect owner of 100% of the beneficial ownership interest
in SCT Holdings, and Guarantor will derive substantial direct and indirect benefits from the
transactions contemplated by the Agreement Regarding Leases; and

WHEREAS, it is a condition to the entering into of the Agreement Regarding Leases by VRLP that
Guarantor shall have executed and delivered this Guaranty.

NOW, THEREFORE, in consideration of the foregoing and for other good and valuable
consideration the receipt and sufficiency of which are hereby acknowledged by Guarantor, and in
order to induce VRLP to enter into the Agreement Regarding Leases, Guarantor hereby agrees as
follows:

SECTION 1 DEFINITIONS. For purposes of this Guaranty, any capitalized terms used and
not otherwise defined shall have the respective meanings ascribed to such terms in the Agreement
Regarding Leases. In addition, as used herein the following capitalized terms shall have the
following meanings:

“Acquisition” by any Person, shall mean the purchase or acquisition by such Person of
any Capital Stock in another Person or any asset of another Person, whether or not involving a
merger or consolidation with such other Person.

“Action” means any civil, criminal or administrative action, suit, demand, claim,
arbitration, hearing, litigation, dispute or other proceeding or investigation by or before any
Governmental Authority or arbitrator.

“Actual Balanced Care EBITDAR” means, for any period for Balanced Care Tenant,
Consolidated Net Income for such period calculated solely with respect to Balanced Care Tenant,
plus without duplication, to the extent deducted or otherwise not included in determining
such Consolidated Net Income, the sum for such period of the following items, in each case
determined solely with respect to Balanced Care Tenant: (i) amortization and depreciation expense,
(ii) provision for income taxes (including provision for deferred taxes not payable currently),
(iii) Consolidated Interest Expense, (iv) Rent Expense, and (v) non-cash charges as are reasonably
acceptable to VRLP, but, excluding, for purposes hereof to the extent included in
determining Consolidated Net Income for such period the following items, in each case
determined solely with respect to Balanced Care Tenant: (A) extraordinary gains and losses and
related tax effects thereon, and (B) other non-cash gains and losses thereon as are reasonably
acceptable to VRLP.

 

 

 

“Actual Monthly Consolidated EBITDAR” means, for any calendar month for Guarantor and
its Consolidated Subsidiaries determined on a consolidated basis, Consolidated Net Income for such
period, plus without duplication, to the extent deducted or otherwise not included in
determining Consolidated Net Income, the sum for such period of (i) amortization and depreciation
expense, (ii) provision for income taxes (including provision for deferred taxes not payable
currently), (iii) Consolidated Interest Expense, (iv) Rent Expense, and (v) non-cash charges as are
reasonably acceptable to VRLP, but, excluding, for purposes hereof to the extent
included in determining Consolidated Net Income for such period (A) extraordinary gains and losses
and related tax effects thereon, and (B) other non-cash gains and losses thereon as are reasonably
acceptable to VRLP.

“Agreement Regarding Leases” has the meaning set forth in the Recitals.

“Asset Disposition” by any Person shall mean and include (i) the sale, lease or other
disposition of any property by such Person (including the Capital Stock of a Subsidiary of such
Person), but for purposes hereof shall not include, in any event, (A) the sale of inventory in the
ordinary course of business, (B) the sale, lease or other disposition of machinery and equipment no
longer used or useful in the conduct of business and (C) a sale, lease, transfer or disposition of
property to another Consolidated Subsidiary, and (ii) receipt by such Person of any cash insurance
proceeds or condemnation award payable by reason of theft, loss, physical destruction or damage,
taking or similar event with respect to any of its property.

“Average Debt” means, as of any date, for any Person, the average Debt balance for the
immediately preceding calendar month.

“Balanced Care Guaranty” shall mean that certain Guaranty of Balanced Care Rent and
Rent Payment Agreement made by IPC Equity Holdings Limited and SCRE Investments, Inc. in favor of
VRLP and the Ventas Lessors listed thereunder (collectively, the “Balanced Care Landlord”)
in respect of certain rent required to be paid pursuant to the Master Lease, as the same may be
amended, renewed, supplemented, extended or modified from time to time.

“Balanced Care Landlord” shall have the meaning set forth in the definition of
Balanced Care Guaranty, set forth herein.

“Balanced Care Tenant” shall mean collectively, jointly and severally, the entities
listed on Schedule 1 attached hereto, together with their permitted successors and assigns.

“BR Trust” shall mean BR Trust, a trust organized under the laws of the Bailiwick of
Guernsey.

“Capital Lease” as applied to any Person, shall mean any lease of any property
(whether real, personal or mixed) by that Person as lessee which, in accordance with GAAP and in
the
reasonable judgment of such Person, is required to be accounted for as a capital lease on the
balance sheet of that Person.

 

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“Capital Stock” shall mean, with respect to any entity, any capital stock (including
preferred stock), shares, interests, participation or other ownership interests (however
designated) of such entity and any rights (other than debt securities convertible into or
exchangeable for capital stock), warrants or options to purchase any thereof; provided,
however, that leases of real property that provide for contingent rent based on the
financial performance of the tenant shall not be deemed to be Capital Stock.

“Cash Interest Expense” shall mean, for any period, for Guarantor and its Consolidated
Subsidiaries determined on a consolidated basis without duplication in accordance with GAAP, all
interest payable in cash in respect of Debt during such period (whether or not actually paid during
such period) and all payments due under Interest Rate Protection Agreements by Guarantor and its
Consolidated Subsidiaries determined on a consolidated basis (net of payments to such parties by
any counter party thereunder).

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

“Consolidated Adjusted Leverage Ratio” shall mean, at any date, for Guarantor and its
Consolidated Subsidiaries determined on a consolidated basis, the ratio of:

(a) the sum of:

(i) Average Debt, net of cash and restricted cash shown on the balance sheet, and

(ii) Rent Expense, as of such date, for the Trailing Four Quarter Period ending on
such date multiplied by eight (8), to:

(b) Consolidated EBITDAR for the Trailing Four Quarter Period ending on such date.

“Consolidated EBITDAR” shall mean, for any period, for Guarantor and its Consolidated
Subsidiaries determined on a consolidated basis, Consolidated Net Income for such period,
plus without duplication, to the extent deducted in determining Consolidated Net Income,
the sum for such period of (i) amortization and depreciation expense, (ii) provision for income
taxes (including provision for deferred taxes not payable currently), (iii) Consolidated Interest
Expense, (iv) Rent Expense, and (v) non-cash charges as are reasonably acceptable to the Landlord
but, excluding, for purposes hereof to the extent included in determining
Consolidated Net Income for such period (A) extraordinary gains and losses and related tax effects
thereon, and (B) other non-cash gains and losses thereon as are reasonably acceptable to the
Landlord, provided, that during the First Lease Year, Consolidated EBITDAR with
respect to Guarantor and its Consolidated Subsidiaries other than Balanced Care Tenant shall equal
the First Year Consolidated EBITDAR, and provided further that for the
period beginning on the date hereof and ending on the last day prior to the third anniversary of
the date hereof, Consolidated EBITDAR for Balanced Care Tenant shall mean, for any period, the
greater of (a) Actual Balanced Care EBITDAR for such period, and (b) the aggregate sum of each
Guarantor Rent Payment actually paid to Balanced Care Landlord during such period.

 

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“Consolidated Interest Expense” shall mean, for any period, all interest expense for
Guarantor and its Consolidated Subsidiaries during such period determined on a consolidated basis
for such period taken as a single accounting period in accordance with GAAP, including amortization
of debt discount and premium, the interest component under Capital Leases (and also including, to
the extent required under GAAP, the implied interest component under a Securitization) and all
payments due under Interest Rate Protection Agreements by Guarantor and its Consolidated
Subsidiaries determined on a consolidated basis (net of payments to such parties by any counter
party thereunder), but excluding the amortization of any deferred financing fees. The applicable
period of determination shall be the Trailing Four Quarter Period.

“Consolidated Net Income” shall mean, for any period, the net income or loss of
Guarantor and its Consolidated Subsidiaries during such period determined on a consolidated basis
for such period taken as a single accounting period in accordance with GAAP. The applicable period
of determination shall be the Trailing Four Quarter Period.

“Consolidated Net Worth” shall mean, as of any date, for Guarantor and its
Consolidated Subsidiaries on a consolidated basis, consolidated shareholders’ equity or net worth
(including preferred and common equity) less goodwill and other intangible assets as of such date
as determined in accordance with GAAP.

“Consolidated Subsidiary” shall mean, as to any Person, at any date, any Subsidiary or
other entity the accounts of which would be consolidated with those of such Person in its
consolidated financial statements if such statements were prepared as of such date.

“Control”, with respect to any Person, shall mean the legal right or power, directly
or indirectly, to direct or cause the direction of the management and policies of such Person, by
contract or through the ownership of voting securities, partnership interests or other equity
interests, or otherwise. “Controlled” and “Controlling” shall have the correlative
meanings thereto.

“Debt” of Guarantor or any of its Consolidated Subsidiaries shall mean, without
duplication, any indebtedness of Guarantor or any of its Consolidated Subsidiaries, whether or not
contingent, in respect of:

(i) borrowed money or evidenced by bonds, notes, debentures or similar
instruments;

(ii) indebtedness for borrowed money secured by any encumbrance existing on
property owned by Guarantor or its Consolidated Subsidiaries, to the extent of the
lesser of (x) the amount of indebtedness so secured or (y) the fair market value of
the property subject to such encumbrance;

(iii) all reimbursement obligations in connection with any letters of credit or
amounts representing the balance deferred and unpaid of the purchase price of any
property or services, except any such balance that constitutes an accrued expense,
trade payable, conditional sale obligation or obligation under any title retention
agreement;

 

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(iv) all net obligations of such Person under any Interest Rate Protection
Agreement valued in accordance with GAAP;

(v) all obligations in respect of any preferred equity to the extent payments
are being made thereon;

(vi) indebtedness of any partnership or joint venture or other similar entity
in which such Person is a general partner or joint venturer and, as such, has
personal liability for such obligations, but only if and to the extent there is
recourse to such Person for payment thereof,

(vii) any obligations of Guarantor and its Consolidated Subsidiaries with
respect to redemption, repayment or other repurchase of any Equity Interest or the
principal amount of any Subordinated Debt (regardless of whether interest or
principal is then-currently payable with respect thereto);

(viii) any lease of property by Guarantor or any of its Consolidated
Subsidiaries as lessee which is reflected as a capital lease obligation on the
consolidated balance sheet of Guarantor or its Consolidated Subsidiaries;

to the extent, in the case of items of indebtedness under clauses (i) through (viii)
above, that any such items would appear as a liability on Guarantor’s or its
Consolidated Subsidiaries’ consolidated balance sheet in accordance with GAAP; or

(ix) the liquidation preference of any Equity Interest of Guarantor or any
 shares of preferred stock of any of its Consolidated Subsidiaries to the extent
payments are being made thereon.

Debt also includes, to the extent not otherwise included, any obligations by Guarantor and its
Consolidated Subsidiaries to be liable for, or to pay, as obligor, guarantor or otherwise (other
than for purposes of collection in the ordinary course of business), Debt of another Person (other
than Guarantor or any other Guarantor) including Debt secured by a Lien on any assets of such
Person, whether or not such Person shall have assumed such indebtedness.

Debt shall not include endorsements of instruments for deposit or collection in the ordinary
course of business. In the case of Debt as of any date issued with original issue discount, the
amount of such Debt shall be the accreted value thereof as of such date.

“Equity Interest” shall mean Capital Stock and all warrants, options or other rights
to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable
for, Capital Stock).

“First Lease Year” shall mean the period beginning on the date hereof and ending on
the last day prior to the first anniversary of the date hereof.

“First Year Consolidated EBITDAR” shall mean

 

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(i) as of the date hereof and the first day of the next following calendar month, Pro Forma
Consolidated EBITDAR, and

(ii) as of the first day of each following calendar month thereafter, an amount equal to: (A)
the First Year Consolidated EBITDAR as of the first day of the preceding calendar month
less (B) 1/12 of the Pro Forma Consolidated EBITDAR plus (C) Actual Monthly
Consolidated EBITDAR with respect to the preceding calendar month.

“Fiscal Quarter” shall mean a fiscal quarter of any Guarantor or any of their
Consolidated Subsidiaries, as the context may require.

“Fiscal Year” shall mean a fiscal year of any Guarantor or any of their Consolidated
Subsidiaries, as the context may require.

“Fixed Charge Coverage Ratio” shall mean, for Guarantor and its Consolidated
Subsidiaries on a consolidated basis, Consolidated EBITDAR for such period divided by the sum of
(i) scheduled principal payments on Debt of Guarantor and its Consolidated Subsidiaries required to
be made during such period (regardless of whether actually paid) and amortization of discount or
premium related to any such Debt for such period, whether expensed or capitalized, (ii) Cash
Interest Expense for such period, (iii) Rent Expense for such period and (iv) dividends or
distributions to the extent paid on or in respect of any preferred equity of Guarantor for such
period notwithstanding the prohibition on payment of same. The applicable period of determination
shall be the Trailing Four Quarter Period.

“GAAP” shall mean generally accepted accounting principles set forth in the opinions
and pronouncements of the Accounting Principles Board and the American Institute of Certified
Public Accountants and statements and pronouncements of the Financial Accounting Standards Board
(or agencies with similar functions of comparable stature and authority within the accounting
profession), or in such other statements by such entity as may be in general use by significant
segments of the U.S. accounting profession.

“Governmental Authority” means any United States federal, state or local or any
supra-national or non-U.S. government, political subdivision, governmental, regulatory or
administrative authority, instrumentality, agency, body or Commission, self-regulatory organization
or any court, tribunal, or judicial or arbitral body.

“Governmental Order” means any order, writ, judgment, injunction, decree, stipulation,
determination or award entered by or with any Governmental Authority.

“Guarantor Rent Payment” has the meaning set forth in the Balanced Care Guaranty.

“Indemnified Party” has the meaning set forth in Section 10.

“Interest Rate Protection Agreements” shall mean any interest rate swap agreement,
interest rate cap agreement, synthetic cap, collar or floor or other financial agreement or
arrangement designed to protect Guarantor or any Consolidated Subsidiary against fluctuations in
interest rates or to reduce the effect of any such fluctuations.

 

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“Lien” shall mean with respect to any asset or property, any mortgage, deed of trust,
lien, pledge, hypothecation, assignment, security interest, or any other encumbrance, charge or
transfer of, on or affecting such asset or property or any portion thereof or any tenant or any
interest therein, including, without limitation, any conditional sale or other title retention
agreement, any financing lease having substantially the same economic effect as any of the
foregoing, the filing of any financing statement, and mechanic’s, materialmen’s and other similar
liens and encumbrances.

“Losses” means, without duplication, all losses, damages, costs, expenses,
liabilities, obligations and claims of any kind (including any Action brought by any Governmental
Authority or Person), including reasonable attorneys’ fees and costs of investigation.

“Master Lease” shall mean that certain Master Lease Agreement, dated as of the date
hereof, as the same may be amended, modified, or supplemented, including, without limitation
pursuant to the “Combination Lease” and the “New Lease” provisions set forth in Section 39 and
Section 40 thereof.

“Parents” means with respect to any Person, the entity or entities Controlling such
Person.

“Person” shall mean any individual or entity, and the heirs, executors,
administrators, legal representatives, successors and assigns of such Person where the context so
requires.

“Pro Forma Basis” shall mean, for purposes of determining compliance with any
financial covenant hereunder, that the subject transaction shall be deemed to have occurred as of
the first day of the applicable period ending on a Quarterly Measurement Date for which annual or
quarterly financial statements shall have been delivered in accordance with the provisions of this
Guaranty. Further, for purposes of making calculations on a “Pro Forma Basis” hereunder, (i) in
the case of an Asset Disposition, (A) income statement items (whether positive or negative)
attributable to the property, entities or business units that are the subject of such Asset
Disposition shall be excluded to the extent relating to any period prior to the actual date of the
subject transaction, and (B) Debt paid or retired in connection with the subject transaction shall
be deemed to have been paid and retired as of the first day of the applicable period; and (ii) in
the case of an Acquisition, (A) income statement items (whether positive or negative) attributable
to the property, entities or business units that are the subject of such Acquisition shall be
included to the extent relating to any period prior to the actual date of the subject transaction,
and (B) Debt incurred in connection with the subject transaction shall be deemed to have been
incurred as of the first day of the applicable period (and interest expense shall be imputed for
the applicable period utilizing the actual interest rates thereunder or, if actual rates are not
ascertainable, assuming prevailing interest rates hereunder).

“Pro Forma Consolidated EBITDAR” means Fifty-Nine Million Eight Hundred and Four
Thousand Six Hundred and Sixty-Three Dollars ($59,804,663).

“Property Lease” and “Property Leases” have the meanings set forth in the
Agreement Regarding Leases.

 

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“Quarterly Measurement Date” shall mean the last Business Day of March, June,
September and December in each year, commencing on or after the date hereof.

“Rent Expense” shall mean, for any period for Guarantor and its Consolidated
Subsidiaries, rent expense computed under and in accordance with GAAP.

“SCT Holdings” has the meaning set forth in the Recitals.

“SCT Lessees” has the meaning set forth in the Agreement Regarding Leases.

“SCT Parent” shall mean SC Operations Holdings Inc., an Ontario corporation.

“SCT Rent Payments” has the meaning set forth in the Agreement Regarding Leases.

“SEC” shall mean the Securities and Exchange Commission.

“Securities Purchase Agreement” shall mean that certain Securities Purchase Agreement,
dated as of September 6, 2006 among SCRE Investments, Inc., IPC Equity Holdings Limited, Ventas
Holdings, and Ventas, Inc.

“Securitization” shall mean a securitization of any assets in a single asset
securitization or a pooled loan securitization.

“Subordinated Debt” shall mean Debt which by the terms of such Debt is subordinated in
right of payment to the principal of and interest and premium, if any, on the loans and obligations
owing hereunder and the guaranties thereof.

“Third Party Claim” shall mean a pending or threatened claim or demand asserted by a
third party, including any Governmental Authority, against an Indemnified Party.

“Trailing Four Quarter Period” shall mean with respect to a date, (i) if such date is
between the date hereof and June 30, 2006 inclusive, the second calendar quarter of 2006, (ii) if
such date is between July 1, 2006 and September 30, 2006 inclusive, the second and third calendar
quarters of 2006, (iii) if such date is between October 1, 2006 and December 31, 2006 inclusive,
the second, third and fourth calendar quarters of 2006, and (iv) on or after January 1, 2007, the
period of four consecutive full fiscal quarters of the Guarantor and its Consolidated Subsidiaries
ended on such date. Any amount measured with respect to a Trailing Four Quarter Period that is less
than one year, shall be annualized by multiplying such amount by a fraction, the numerator of which
is four and the denominator of which is the number of calendar quarters in such Trailing Four
Quarter Period.

“Ventas Holdings” shall mean VSCRE Holdings, LLC, a Delaware limited liability
company.

 

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SECTION 2 GUARANTY. Guarantor hereby jointly and severally, unconditionally and
irrevocably guarantees (i) the full and prompt payment of all SCT Rent Payments and other sums
required to be paid by SCT Holdings under the Agreement Regarding Leases, (ii) the full and timely
performance of all other terms, conditions, covenants and obligations, of SCT
Holdings under the Agreement Regarding Leases, and (iii) any and all expenses (including
reasonable attorneys’ fees and expenses) incurred by VRLP in enforcing any rights under the
Agreement Regarding Leases or this Guaranty (all such obligations in clauses (i)-(iii),
collectively, are referred to as the “Guaranteed Obligations”). Guarantor agrees that this
Guaranty is a guarantee of payment and performance, not collection, and that Guarantor is primarily
liable and responsible for the payment and performance of the Guaranteed Obligations. It is not
necessary for VRLP, in order to enforce payment and performance by Guarantor under this Guaranty,
first or contemporaneously to institute suit or exhaust remedies against SCT Holdings or others
liable for any of the Guaranteed Obligations or to enforce rights against any collateral securing
any of it. With the exception of the defense of prior payment, performance, or compliance by SCT
Holdings or Guarantor of the Guaranteed Obligations which Guarantor is called upon to pay, or the
defense that VRLP’s claim against Guarantor hereunder is barred by the applicable statute of
limitations, all defenses of the law of guaranty or suretyship, including, without limitation,
substantive defenses and procedural defenses, are waived and released by Guarantor to the extent
permitted by law. Except as provided in the preceding sentence, under no circumstances will the
liability of Guarantor under this Guaranty be terminated either with respect to any period of time
when the liability of SCT Holdings under the Agreement Regarding Leases continues, or with respect
to any circumstances as to which the Guaranteed Obligations have not been fully discharged by
payment, performance or compliance.

SECTION 3 GUARANTY ABSOLUTE. The liability and responsibilities of Guarantor under
this Guaranty shall be absolute and unconditional, shall not be subject to any counterclaim,
setoff, or deduction and shall not be released, discharged, affected or impaired by (i) any change
in the time, manner, or place of payment or performance of any of the Guaranteed Obligations, or
any other amendment or waiver of, or any consent to or departure from, or termination of, the
Agreement Regarding Leases or any of the Property Leases, (ii) any release or discharge of SCT
Holdings or any SCT Lessee in any bankruptcy, receivership or other similar proceedings, (iii) the
impairment, limitation or modification of the liability of SCT Holdings or the estate of SCT
Holdings in bankruptcy or any SCT Lessee or the estate of any SCT Lessee in bankruptcy, or of any
remedy for the enforcement of SCT Holdings’s liability under the Agreement Regarding Leases,
resulting from the operation of any present or future provisions of any bankruptcy code or other
statute or from the decision in any court, the rejection or disaffirmance of the Agreement
Regarding Leases in any such proceedings, or the assignment or transfer of the Agreement Regarding
Leases by SCT Holdings, (iv) any failure, omission or delay on the part of VRLP to enforce, assert
or exercise any right, power or remedy conferred on or available to VRLP in or by the Agreement
Regarding Leases or this Guaranty, or any action on the part of VRLP granting indulgence or
extension in any form whatsoever or any invalidity, irregularity or unenforceability as to SCT
Holdings of all or any part of the Guaranteed Obligations or any security therefor, (v) the waiver
by VRLP of the performance or observance by SCT Holdings or Guarantor of any of the agreements,
covenants, terms or conditions contained in the Agreement Regarding Leases or this Guaranty, (vi)
any merger, consolidation, reorganization or similar transaction involving SCT Holdings even if SCT
Holdings ceases to exist as a result of (and is not the surviving party in) such transaction, (vii)
the inability of VRLP or SCT Holdings to enforce any provision of the Agreement Regarding Leases
for any reason, (viii) any change in the corporate relationship between SCT Holdings and Guarantor
or any termination of such relationship, (ix) any change in the ownership of all or any part of the
membership interests in SCT Holdings, (x) the inability of

 

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SCT Holdings to perform, or the
release of SCT Holdings or Guarantor from the performance of, any obligation, agreement,
covenant, term or condition under the Agreement Regarding Leases or this Guaranty by reason of any
law, regulation or decree, now or hereafter in effect, (xi) any merger of the leasehold estate of
any SCT Lessee with the fee estate or any other estate in any facility or (xii) any disability or
other defense of SCT Holdings. VRLP and SCT Holdings, without notice to or consent by Guarantor,
may at any time or times enter into such modifications, extensions, amendments, or other covenants
with respect to the Agreement Regarding Leases as they may deem appropriate and Guarantor shall not
be released thereby, but shall continue to be fully liable for the payment and performance of all
liabilities, obligations and duties of SCT Holdings under the Agreement Regarding Leases as so
modified, extended or amended.

SECTION 4 REINSTATEMENT. Guarantor further agrees that, if at any time all or any
part of any payment applied to any of the Guaranteed Obligations is or must be rescinded or
returned for any reason whatsoever (including, without limitation, the insolvency, bankruptcy or
reorganization of Guarantor), such Guaranteed Obligations shall, for the purposes of this Guaranty,
to the extent that such payment is or must be rescinded or returned, be deemed to have continued in
existence, notwithstanding such application, and this Guaranty shall continue to be effective or be
reinstated, as the case may be, as to such Guaranteed Obligations, all as though such application
had not been made.

SECTION 5 CERTAIN ACTIONS. VRLP may, from time to time, at its discretion and without
notice to Guarantor, take any or all of the following actions: (a) retain or obtain the primary or
secondary obligation of any obligor or obligors, in addition to Guarantor, with respect to any of
the Guaranteed Obligations; (b) extend or renew for one or more periods (regardless of whether
longer than the original period), or release or compromise any obligation of Guarantor hereunder or
any obligation of any nature of any other obligor (including, without limitation, SCT Holdings)
with respect to any of the Guaranteed Obligations; or (c) release or fail to perfect any lien upon
or security interest in, or impair, surrender, release or permit any substitution or exchange for,
all or any part of any property securing any of the Guaranteed Obligations or any obligation
hereunder, or extend or renew for one or more periods (regardless of whether longer than the
original period) or release or compromise any obligations of any nature of any obligor with respect
to any such property.

SECTION 6 WAIVER. To the extent permitted by applicable law, Guarantor hereby
expressly waives: (i) notice of the acceptance of this Guaranty, (ii) except as otherwise provided
in the Agreement Regarding Leases or this Guaranty, notice of the existence or creation or
non-payment of all or any of the Guaranteed Obligations, (iii) presentment, demand, notice of
dishonor, protest and all other notices whatsoever except as otherwise provided in the Agreement
Regarding Leases or this Guaranty, and (iv) all diligence in collection or protection of or
realization upon the Guaranteed Obligations or any part thereof, any obligation hereunder, or any
security for or guaranty of any of the foregoing.

SECTION 7 WAIVER OF SUBROGATION. Guarantor hereby waives all rights of subrogation
which it may at any time otherwise have as a result of this Guaranty to the claims of VRLP against
SCT Holdings and all contractual, statutory or common law rights of reimbursement, contribution or
indemnity from SCT Holdings which it may at any time
otherwise have as a result of this Guaranty prior to final payment and satisfaction of the
Guaranteed Obligations.

 

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SECTION 8 DELIVERY OF FINANCIAL INFORMATION.

8.1. Financial Statements, Etc. Guarantor shall deliver the following information to
VRLP:

(a) as soon as available, and in any event within fifty (50) days (or ninety (90) days in the
event that VRLP notifies Guarantor in writing that VRLP and its Parents are not required, pursuant
to the rules and regulations of the SEC, to include such statements in their filings with the SEC)
after the close of each Fiscal Year, in hard copy and electronic format, in form satisfactory to
VRLP and accompanied by a checklist in the form attached hereto as Exhibit A completed by
Guarantor, and presented on a consolidated as well as a property-by-property basis, complete
financial statements prepared for such year with respect to Guarantor and its Consolidated
Subsidiaries, including a balance sheet as of the end of such year, together with related
statements of operations, cash flows and changes in equity for such Fiscal Year, audited by a “Big
Four” accounting firm or a nationally recognized, independent certified public accounting firm
reasonably satisfactory to VRLP whose opinion shall be to the effect that such financial statements
have been prepared in accordance with GAAP applied on a consistent basis and shall not be qualified
as to the scope of the audit or as to the status of Guarantor as a going concern or any other
material qualification. Together with Guarantor’s audited financial statements, Guarantor shall
furnish to Landlord an Officer’s Certificate (i) certifying as of the date thereof whether to the
best of such Guarantor’s knowledge there exists an event or circumstance which constitutes a
default or Event of Default under the Agreement Regarding Leases or under the Property Leases and
if such default or Event of Default exists, the nature thereof, the period of time it has existed
and the action then being taken to remedy the same, (ii) certifying that the information contained
in such financial statements is true and correct in all material respects, and (iii) demonstrating
in reasonable detail compliance with the provisions of Sections 9.1, 9.2, 9.3, and 9.5 hereof
(including in detail all calculations necessary therein).

(b) as soon as available and in any event within thirty (30) days (or forty-five (45) days in
the event that VRLP notifies Guarantor in writing that VRLP and its Parents are not required,
pursuant to the rules and regulations of the SEC, to include such statements in their filings with
the SEC) after the close of each Fiscal Year, in form satisfactory to VRLP and accompanied by a
checklist in the form attached hereto as Exhibit A completed by the applicable Guarantor,
unaudited financial statements prepared for such year with respect to Guarantor and its
Consolidated Subsidiaries including a balance sheet as of the end of such year, together with
related statements of operations and cash flows for such Fiscal Year. Together with Guarantor’s
unaudited financial statements, Guarantor shall furnish to Landlord an Officer’s Certificate (i)
certifying as of the date thereof whether to the best of such Guarantor’s knowledge there exists an
event or circumstance which constitutes a default or Event of Default under the Agreement Regarding
Leases or under the Property Leases and if such default or Event of Default exists, the nature
thereof, the period of time it has existed and the action then being taken to remedy the same, (ii)
certifying that the information contained in such financial statements is true and correct in all
material respects, and (iii) demonstrating in reasonable detail compliance with the
provisions of Sections 9.1, 9.2, 9.3, and 9.5 hereof (including in detail all calculations
necessary therein).

 

- 11 -

 

(c) as soon as available and in any event within thirty (30) days after the end of each of the
first three Fiscal Quarters of each Fiscal Year of Guarantor and its Consolidated Subsidiaries, in
form satisfactory to VRLP and accompanied by a checklist in the form attached hereto as Exhibit
A completed by Guarantor, (i) an unaudited consolidated balance sheet of Guarantor and its
Consolidated Subsidiaries, together with the related consolidated and consolidating statements of
operations for such Fiscal Quarter and for the portion of the Fiscal Year ended at such Fiscal
Quarter and a consolidated statement of cash flows for the portion of the Fiscal Year ended at the
end of such Fiscal Quarter, all of which shall be prepared on a comparative basis with the same
periods of the previous year (to the extent available) in accordance with GAAP. Together with
Guarantor’s interim financial statements, Guarantor shall furnish to Landlord an Officer’s
Certificate (i) certifying as of the date thereof whether to the best of such Guarantor’s knowledge
there exists an event or circumstance which constitutes a default or Event of Default under the
Agreement Regarding Leases or under the Property Leases and if such default or Event of Default
exists, the nature thereof, the period of time it has existed and the action then being taken to
remedy the same, (ii) certifying that the information contained in such financial statements is
true and correct in all material respects, and (iii) demonstrating in reasonable detail compliance
with the provisions of Sections 9.1, 9.2, 9.3, and 9.5 hereof (including in detail all calculations
necessary therein).

(d) as soon as available and in any event within thirty (30) days after the end of each month
of each Fiscal Year of Guarantor and its Consolidated Subsidiaries (and, with respect to the
calendar month immediately preceding the month in which the Effective Date occurs, thirty (30) days
following the end of such calendar month), (i) an unaudited consolidated balance sheet of Guarantor
and its Consolidated Subsidiaries, together with the related consolidated and consolidating
statements of operations for such month and for the portion of the Fiscal Year ended at such month
and a consolidated statement of cash flows for the portion of the Fiscal Year ended at the end of
such month, all of which shall be prepared on a comparative basis with the same periods of the
previous year (to the extent available) and in accordance with GAAP.

8.2. Guarantor agrees that any financial statements of Guarantor and its Consolidated
Subsidiaries required to be delivered to VRLP hereunder and under the Lease Documents may, without
the prior consent of, or notice to, Guarantor, be included and disclosed in offering memoranda or
prospectuses, or similar publications in connection with syndications, private placements or public
offerings of VRLP’s (or VRLP’s direct or indirect Parent’s) securities or interests, and in any
registration statement, report or other document permitted or required to be filed under applicable
federal and state laws, including those of any successor to VRLP. Guarantor agrees to provide such
other reasonable financial and other information necessary to facilitate a private placement or a
public offering or to satisfy the SEC or regulatory disclosure requirements. Guarantor agrees to
cause its independent auditors, at VRLP’s cost, to consent, in a timely manner, to the inclusion of
their audit report issued with respect to such financial statements in any registration statement
or other filing under federal and state laws and to provide the underwriters participating in any
offering of securities or interests of VRLP (or VRLP’s direct or indirect Parent) with a standard
accountant’s “comfort” letter with regard to the financial information of Guarantor and its
Consolidated Subsidiaries included or incorporated

 

- 12 -

 

by reference into any prospectus or other offering document. Guarantor also agrees to make
available to any underwriter participating in an offering of Ventas (or VRLP’s direct or indirect
Parent’s) securities or interests, and any attorney, accountant or other agent or representative
retained by an underwriter (an “Inspector”), all financial and other records and pertinent
corporate documents of Guarantor as shall be reasonably necessary to enable them to exercise their
due diligence responsibility, and cause Guarantor’s directors, officers and employees to supply all
information requested by any such Inspector in connection with such offering. Upon request of
VRLP, Guarantor shall notify VRLP of any necessary corrections to information VRLP proposes to
publish within a reasonable period of time (not to exceed three (3) Business Days) after being
informed thereof by VRLP. Without limiting the foregoing, Guarantor shall provide or cause to be
provided to VRLP and take such actions, in each case, as required under this Section 8.2 promptly
and in any event within such time periods to permit VRLP to make all filings required by the SEC or
any other Governmental Authority in a timely fashion under applicable laws. All reasonable costs
and expenses incurred by Guarantor and/or Guarantor’s directors, officers, and employees solely
with respect to this Section 8.2 shall be the sole responsibility of VRLP.

SECTION 9 FINANCIAL COVENANTS.

9.1. Fixed Charge Coverage Ratio.

(a) Guarantor covenants and agrees with VRLP that at each Quarterly Measurement Date the Fixed
Charge Coverage Ratio will not be less than 1.10 to 1.00.

(b) For purposes of calculating the foregoing ratio, Asset Dispositions or Acquisitions which
have occurred during such period shall be included on a Pro Forma Basis.

9.2. Consolidated Adjusted Leverage Ratio.

(a) Guarantor covenants and agrees with VRLP that at each Quarterly Measurement Date the
Consolidated Adjusted Leverage Ratio will not exceed 8.00:1.00.

(b) For purposes of calculating the foregoing ratio, Asset Dispositions or Acquisitions which
have occurred during such period shall be included on a Pro Forma Basis.

9.3. Minimum Consolidated Net Worth.

(a) Guarantor covenants and agrees with VRLP that for each Fiscal Quarter, the Consolidated
Net Worth of Guarantor will not be less than the sum of (a) Forty Million Dollars ($40,000,000.00)
plus (b) 90% of any proceeds (without duplication) received by Guarantor or any of its Consolidated
Subsidiaries pursuant to the issuance of any equity securities of such entities following the
Effective Date.

9.4. INTENTIONALLY OMITTED.

9.5. Distributions. Following the occurrence and during the continuance of a default
hereunder or an Event of Default under the Agreement Regarding Leases or the Property Leases,
Guarantor shall not make any distributions to any partners, parent entities, or affiliates.

 

- 13 -

 

9.6. Default. If, at any time during the term of the Agreement Regarding Leases,
Guarantor fails to comply with any of the covenants set forth in this Section 9, Guarantor shall be
deemed to be in default hereunder, beyond any applicable notice and/or cure periods.
Notwithstanding the foregoing, following the occurrence and during the continuance of a default
under Section 9.1(a) hereof or an Event of Default resulting from a breach of the covenant
relating to the Portfolio Coverage Ratio pursuant to Paragraph 6(a)(xviii) of the Agreement
Regarding Leases, in each case, within the first twelve (12) months following the date of this
Guaranty only, neither VRLP nor any Ventas Lessor (as such term is defined under the Agreement
Regarding Leases) shall exercise any of the rights and remedies set forth in Paragraph 6(b)
of the Agreement Regarding Leases or in Section 17.2, Section 17.3, or Section 17.4 of the Property
Leases during such twelve (12) month period, provided, that during such twelve (12)
month period, VRLP and each Ventas Lessor shall have all other rights and remedies available to
them under the other provisions of the Transaction Documents with respect to any such default.

SECTION 10 INDEMNITY.

10.1. INTENTIONALLY OMITTED.

10.2. Guarantor shall indemnify and save VRLP, its Affiliates, its direct and indirect
Parents, directors, employees, agents and each Person, if any, who controls VRLP or any such
Affiliate within the meaning of Section 15 of the Securities Act of 1933, as amended, or Section 20
of the Securities Exchange Act of 1934, as amended, (each such party, an “Indemnified
Party” and collectively, the “Indemnified Parties”) harmless from and against (i) any
and all claims against any of them of whatever nature arising from any act, omission or negligence
of Guarantor, its contractors, licensees, subtenants, agents, servants, employees, invitees or
visitors, (ii) all claims against any Indemnified Party arising from any accident, injury or damage
whatsoever caused to any person or to the property of any person and occurring during the term of
this Lease in or about the Facilities or in connection with the Lease Documents, and (iii) all
damages resulting from any breach, violation or non-performance of any covenant, condition or
agreement in this Guaranty, the Agreement Regarding Leases, or the Property Leases set forth and
contained on the part of Guarantor, SCT Holdings or the SCT Lessees to be fulfilled, kept, observed
and performed. This indemnity and hold harmless agreement shall include indemnity from and against
any and all liability, consequential damages, fines, suits, demands, costs and expenses of any kind
or nature incurred in or in connection with any such claim or proceeding brought thereon
(including, without limitation, reasonable attorneys’ fees), and the defense thereof.

SECTION 11 DEFAULTS. In addition to any default or breach of any representation, warranty,
agreement, covenant or other undertaking by Guarantor hereunder, the following shall also
constitutes defaults hereunder: (i) any default under the Agreement Regarding Lease or under any
Property Lease, beyond applicable notice and cure periods, (ii) if at any time during the term of
the Agreement Regarding Leases, any audit or financial statement of Guarantor contains a qualified
opinion regarding Guarantor’s ability to continue its operations as a “going concern”, or (iii) the
insolvency of Guarantor or its inability to pay any of its obligations when due.

 

- 14 -

 

SECTION 12 REPRESENTATIONS AND WARRANTIES. To induce VRLP and the Ventas Lessors to enter
into the Transaction Documents, Guarantor represents and warrants to VRLP as follows:

(a) Status and Authority of Guarantor. Guarantor is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware. Guarantor has all
requisite power and authority to enter into and perform its obligations under this Guaranty and to
consummate the transactions contemplated hereby. Guarantor is duly qualified and is in good
standing, to transact business in each jurisdiction in which the nature of the business conducted
by it requires such qualification.

(b) Action of Guarantor. Guarantor has taken all necessary action to authorize the
execution, delivery and performance of this Guaranty, and this Guaranty constitutes the valid and
binding obligation and agreement of Guarantor, enforceable against Guarantor in accordance with its
terms.

(c) No Violations of Agreements. Neither the execution, delivery or performance of
this Guaranty by Guarantor, nor compliance with the terms and provisions hereof, will result in any
breach of the terms, conditions or provisions of, or conflict with or constitute a default under,
or result in any breach of the terms, conditions or provisions of, or conflict with or constitute a
default under, or result in the creation of any lien, charge or encumbrance upon any Facility or
any property or assets of Guarantor pursuant to the terms of, any indenture, mortgage, deed of
trust, note, evidence of indebtedness or any other material agreement or instrument by which
Guarantor is bound.

(d) Litigation. Guarantor has received no written notice and, to Guarantor’s
knowledge, no action or proceeding is pending or threatened which questions the validity of this
Agreement or any action taken or to be taken pursuant hereto.

(e) Ownership Structure. Attached here to as Exhibit B (and Schedule
A attached thereto) is a true and correct structure chart depicting and describing the direct
and indirect ownership interests in the SCT Lessees, SCT Holdings, and Guarantor.

SECTION 13 MISCELLANEOUS.

13.1. Amendments, Etc. No amendment or waiver of any provision of this Guaranty nor
consent to any departure by Guarantor therefrom shall be effective unless the same shall be in
writing and signed by VRLP.

 

- 15 -

 

13.2. Addresses for Notices. All notices hereunder shall be in writing, personally
delivered, delivered by overnight courier service, sent by facsimile transmission (with
confirmation of receipt), or sent by certified mail, return receipt requested, addressed as
follows, or to such other address as shall be designated by Guarantor or VRLP in written notice to
the other party:

	 	 	 
	If to Guarantor:

	 	Senior Care, Inc.

Plaza II Office Building

9510 Ormsby Station Road

Louisville, Kentucky 40223

Attention: President

Facsimile: (502) 753-6101
	 
	 	 
	with a copy to:
	 	 
	 
	 	 
	 

	 	Senior Care, Inc.

Plaza II Office Building

9510 Ormsby Station Road

Louisville, Kentucky 40223

Attention: General Counsel

Facsimile: (502) 753-6104
	 
	 	 
	If to VRLP:

	 	Ventas Realty Limited Partnership

c/o Ventas, Inc.

111 South Wacker Drive

Suite 4800

Chicago, Illinois 60606

Attention: Lease Administration

Facsimile: (312) 660-3850
	 
	 	 
	with a copy to:

	 	Ventas, Inc.

10350 Ormsby Park Place

Suite 300

Louisville, Kentucky 40223

Attention: General Counsel

Facsimile: (502) 357-9001

13.3. No Waiver; Remedies. No failure on the part of VRLP to exercise, and no delay
in exercising, any right hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any right hereunder preclude any other or further exercise thereof or the
exercise of any other right. The remedies herein provided are cumulative and not exclusive of any
other remedies available at law or equity.

13.4. Continuing Guaranty; Transfer of Interest. This Guaranty shall create a
continuing guaranty and will (i) remain in full force and effect until payment and performance in
full and satisfaction of the Guaranteed Obligations, (ii) be binding upon Guarantor and its
successors and assigns, and (iii) inure, together with the rights and remedies of VRLP hereunder,
to the benefit of VRLP and its successors, as permitted under the Agreement Regarding Leases.
Without limiting the generality of the foregoing clause, if and when VRLP assigns or otherwise
transfers any interest held by it under the Agreement Regarding Leases to any other person, that
other person shall thereupon become vested with all the benefits held by VRLP under this
Guaranty.

 

- 16 -

 

13.5. GOVERNING LAW. THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

13.6. INDUCEMENT TO LANDLORD. Guarantor acknowledges and agrees that the execution
and delivery of this Guaranty by Guarantor to VRLP has served as a material inducement to VRLP to
execute and deliver the Agreement Regarding Leases, and Guarantor further acknowledges and agrees
that but for the execution and delivery of this Guaranty by Guarantor, VRLP would not have executed
and delivered the Agreement Regarding Leases.

13.7. SUBMISSION TO JURISDICTION. Guarantor hereby irrevocably submits to the
non-exclusive jurisdiction of any State or Federal court located in New York County, New York State
over any action, suit or proceeding to enforce or defend any right under this Guaranty or otherwise
arising from or relating to this Guaranty, and Guarantor irrevocably agrees that all claims in
respect of any such action, suit or proceeding may be heard and determined in such court.
Guarantor hereby irrevocably waives, to the fullest extent that it may effectively do so, the
defense of an inconvenient forum or venue to the maintenance of any such action, suit or
proceeding. Guarantor hereby agrees that a final, non-appealable judgment in, any such action,
suit or proceeding shall be, conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law.

13.8. WAIVER OF JURY TRIAL. Guarantor hereby waives, to the fullest extent permitted
by applicable law, any right to a trial by jury in any action, suit or proceeding to enforce or
defend any rights under this Guaranty or any other transaction document or any amendment,
instrument, document or agreement delivered or which may in the future be delivered in connection
herewith or arising from or relating to any relationship existing in connection with this guaranty,
and agrees, to the fullest extent permitted by applicable law, that any such action, suit or
proceeding shall be tried before a court and not before a jury.

13.9. COOPERATION, FURTHER ASSURANCES. Guarantor covenants, and agrees to sign,
execute and deliver or cause to be signed, executed and delivered and to do or make, or to cause to
be done or make, upon the written request of VRLP, any and all agreements, instruments, papers,
deeds, acts or things, supplemental, confirming or otherwise, as may be reasonably required by VRLP
for the purpose of, or in connection with, the transaction contemplated hereby, including, without
limitation, a reaffirmation of this Guaranty upon the execution of any Other Leases. Upon full and
final payment and performance of the Guaranteed Obligations, VRLP agrees to execute a release for
the benefit of Guarantor, in form and content reasonably satisfactory to VRLP. Notwithstanding
anything to the contrary contained herein, this Guaranty shall survive for a period of twelve (12)
months after the expiration or earlier termination of the Agreement Regarding Leases, and Guarantor
shall be liable to VRLP hereunder for any Guaranteed Obligations which arise during such period and
relate to matters which (i) occurred during the term of the Agreement Regarding Leases or (ii) SCT
Holdings is otherwise required to indemnify VRLP against pursuant to the terms of the Agreement
Regarding Leases.

 

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[THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK]

 

- 18 -

 

Guarantor has caused this Guaranty to be effective as of the Effective Date.

	 	 	 	 	 
	 	GUARANTOR:

SENIOR CARE, INC.,

a Delaware corporation

 	 
	 	By:  	/s/ Robin L. Barber
 	 
	 	 	Name:  	Robin L. Barber 	 
	 	 	Title:  	Secretary 	 
	 

 

 

 

ACKNOWLEDGMENT

	 	 	 	 	 	 	 
	STATE OF NEW YORK

	 	 	)	 	 	 
	 

	 	 	)	 	 	ss:
	COUNTY OF NEW YORK

	 	 	)	 	 	 

On the 1st day of November, 2006 before me, the undersigned, personally appeared
Robin L. Barber, personally known to me or proved to me on the basis of satisfactory
evidence to be the individual whose name is subscribed to the within instrument on behalf of SENIOR
CARE, INC. and acknowledged to me that he/she executed the same in his/her capacity and that by
his/her signatures on the instrument, such entity upon behalf of which the individual acted,
executed the instrument.

	 	 	 	 	 
	 

	 	/s/ illegible
	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	(Notary Seal)

	 	Signature and Office of Individual Taking	 	 
	 
	 	 	 	 
	 

	 	Acknowledgement	 	 

 

 

 

EXHIBIT A

Checklist

ARL Guaranty

Financial Reporting Checklist

	 	 	 	 	 	 	 
	Quarterly Reporting	 	 
	 	 	 	 
	 	 	 
	 	 	 	 
	Section 8.1(c)	 	Unaudited financial statements of Guarantor with Officer’s Certificate 

30 Days after the end of first three Fiscal Quarters
	 	 	o	 
	 	 	 
	 	 	 	 
	Section 8.1(c)	 	Unaudited financial statements of Consolidated Subsidiaries 

30 Days after the end of first three Fiscal Quarters
	 	 	o	 
	 	 	 
	 	 	 	 
	Annual Reporting	 	 
	 	 	 	 
	 	 	 
	 	 	 	 
	Section 8.1(a)	 	Audited financial statements of Guarantor with Officer’s Certificate 

50 Days after the end of each Fiscal Year
	 	 	o	 
	 	 	 
	 	 	 	 
	Section 8.1(a)	 	Audited financial statements of Consolidated Subsidiaries 

50 Days after the end of each Fiscal Year
	 	 	o	 
	 	 	 
	 	 	 	 
	Section 8.1(b)	 	Unaudited financial statements of Guarantor with Officer’s Certificate 

30 Days after the end of each Fiscal Year
	 	 	o	 
	 	 	 
	 	 	 	 
	Section 8.1(b)	 	Unaudited financial statements of Consolidated Subsidiaries 

30 Days after the end of each Fiscal Year
	 	 	o	 

	 	 	 	 	 	 	 
	By:
	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	Name:
	 	 	 	 
	 

	 	Title:	 	 	 	 

 

 

 

EXHIBIT B

Ownership Chart

 

 

 

Schedule A to Exhibit B

Ownership of Senior Care, Inc.

The total number of shares of all classes of stock which the Senior Care, Inc. shall have authority
to issue is (i) 200,000 shares of Class A Common Stock, $.01 par value per share (“Class A Common
Stock”), (ii) 20,000 shares of Class B Common Stock, $.01 par value per share, (“Class B Common
Stock,” and together with the Class A Common Stock, “Common Stock”) and (ii) 100,000 shares of
Preferred Stock (“Preferred Stock”), $.01 par value per share, of which 25,000 shall be designated
“Series A Preferred Stock,” of which 1000 shall be designated “Series B Preferred Stock,” of which
39,000 shall be designated “Series C Preferred Stock,” and of which 35,000 shares shall be
designated “Series D Convertible Preferred Stock. On the date hereof, the Common Stock and the
Preferred Stock are owned as follows:

	 	 	 	 	 	 	 
	 	 	 	 	Number of Shares	 
	 	 	 	 	Issued and	 
	Holder	 	Class	 	Outstanding	 
	SC Operations Holdings, Inc.
	 	Class A Common	 	 	88,000	 
	Calindas, LLC
	 	Class B Common	 	 	12,000	 
	 
	 	 	 	 	 	 
	SC Operations Holdings, Inc.
	 	Series A Preferred	 	 	25,000	 
	 
	 	 	 	 	 	 
	SC Operations Holdings, Inc.
	 	Series B Preferred	 	 	1,000	 
	 
	 	 	 	 	 	 
	SC Operations Holdings, Inc.
	 	Series C Preferred	 	 	4,748	 
	 
	 	 	 	 	 	 
	Management
	 	Series D Convertible Preferred	 	 	25,000	 

 

 

 

Schedule 1

Balanced Care Tenant

	 	 	 
	BCC Medina Operations, LLC

	 	 
	AL Sagamore Hills Operations, LLC
	 	 
	BCC Washington Township Operations, LLC
	 	 
	BCC Ontario Operations, LLC
	 	 
	AL Kingsport Operations, LLC
	 	 
	BCC Shippensburg Operations, LLC
	 	 
	AL Dillsburg Operations, LLC
	 	 
	AL Lebanon Operations, LLCExhibit 10.4

Exhibit 10.4

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

This AMENDED AND RESTATED EMPLOYMENT AGREEMENT (“Agreement”) is made as of the 28th
day of December, 2006 (the “Effective Date”), by and between Ventas, Inc., a Delaware
corporation (the “Company”), and Debra A. Cafaro (the “Executive”).

W I T N E S S E T H:

WHEREAS, Executive has, pursuant to the terms of an Employment Agreement dated as of March 5,
1999 (the “Existing Employment Agreement”), served as President and Chief Executive Officer
of the Company since March 5, 1999 and as Chairman of the Board of Directors of the Company (the
“Board”) since January 28, 2003;

WHEREAS, the Company and Executive desire to amend and restate in its entirety, subject to
Section 21 herein, the Existing Employment Agreement and enter into this Agreement pursuant to
which the Executive will continue to serve as the Company’s President, Chief Executive Officer and
Chairman of the Board; and

NOW, THEREFORE, in consideration of the premises and the respective covenants and agreements
contained herein, and intending to be legally bound hereby, the Company and Executive agree as
follows:

1. EMPLOYMENT. The Company hereby agrees to employ the Executive and Executive hereby agrees
to be employed by the Company upon the terms and subject to the conditions herein set forth. The
term of employment of Executive by the Company pursuant to this Agreement (the “Employment
Term”) shall commence on the date hereof and shall continue until terminated pursuant to
Section 6 or amended pursuant to Section 21.

2. DUTIES. The Company hereby employs Executive and Executive hereby accepts employment with
the Company as President and Chief Executive Officer. During the Employment Term, Executive shall
have the title, status and duties of President and Chief Executive Officer, shall report directly
to the Board, and shall have duties consistent with and authority comparable to Chief Executive
Officers of other publicly-traded REITs, including the designation of senior management. During
the Employment Term, the Company shall cause Executive to be nominated for election as a member of
the Board.

3. EXTENT OF SERVICES. Executive, subject to the direction and control of the Board, shall
have the power and authority commensurate with her status as President and Chief Executive Officer
and necessary to perform her full-time duties hereunder. During the term, Executive shall devote
her working time, attention, labor, skill and energies to the business of the Company, and shall
not, without the consent of the Company, be actively engaged in any other business activity,
whether or not such business activity is pursued for gain, profit or other pecuniary advantage,
that competes, conflicts or interferes with the performance of her duties hereunder in any material
way.

 

 

 

4. COMPENSATION. As compensation for services hereunder rendered, Executive shall receive
during the Employment Term:

(a) BASE SALARY. A base salary at a rate of not less than six hundred thousand
dollars ($600,000) per year subject to increases from time to time as determined by the Executive
Compensation Committee acting in its sole discretion. Executive’s base salary shall be payable in
equal installments in accordance with the Company’s normal payroll procedures (but no less
frequently than semimonthly). The term “Base Salary” for purposes of this Agreement shall
refer to Executive’s base salary annualized, as most recently increased.

(b) 2007 ANNUAL BONUS AND LONG-TERM INCENTIVE COMPENSATION. In addition to Base
Salary, Executive shall be eligible to receive such other bonuses and incentive compensation as the
Board may approve from time to time. Provided that Executive’s employment is not terminated prior
to December 31, 2007, she shall be entitled to the following annual bonus and long-term incentive
compensation in respect of her services during 2007:

(i) Annual Bonus Paid in 2008 in Respect of Services Rendered During 2007. Executive’s
annual bonus for the 2007 fiscal year under the Company’s annual incentive plan shall be
$2,100,000, which shall be paid at the same time and in the same manner as annual bonuses in
respect of fiscal 2007 are paid to the Company’s other senior executives. Executive shall
not be entitled to any other annual bonus in respect of fiscal 2007; provided, however, that
if Executive’s employment is terminated by the Company without Cause or by the Executive for
Good Reason and Executive has executed and delivered a general release of claims in form
substantially similar to the form attached hereto as Exhibit B (the “Release”), the Company
shall pay Executive on Executive’s Date of Termination a lump sum payment in the amount of
$2,100,000;

(ii) Long-Term Incentives Awarded in 2008 in Respect of Services Rendered During 2007.
Executive shall in 2008 be awarded a package of long-term incentives in respect of services
during 2007 that shall have a total value at grant of $5,400,000. This package of
incentives shall be divided among restricted stock, stock options and/or awards under the
Company’s Performance Cash Plan in the manner determined by the Executive Compensation
Committee in the exercise of its sole discretion; provided, however, that if Executive’s
employment is terminated by the Company without Cause or by the Executive for Good Reason
and Executive has executed and delivered the Release, the Company shall pay Executive on
Executive’s Date of Termination a lump sum payment in cash in the amount of $5,400,000.
Executive shall not be entitled to any other long-term incentive compensation in respect of
fiscal 2007.

 

2

 

5. BENEFITS.

(a) Executive shall be entitled to participate in any and all pension benefit, welfare benefit
(including, without limitation, medical, dental, disability and group life insurance coverages) and
fringe benefit plans from time to time in effect for executives of the Company and its affiliates.
Without limitation of the foregoing, the Company shall provide Executive,
without any cost to Executive, with two million dollars of life insurance coverage and
executive disability coverage with an “own occupation” definition of disability providing annual
benefits of at least 100% of Executive’s Base Salary. To the extent any of the benefits or
payments within this Section 5(a) are treated as taxable to the Executive, the Company shall pay
Executive an additional amount such that the net amount or benefit retained by Executive after
deduction or payment of all federal, state, local and other taxes with respect to amounts or
benefits under this Section 5(a) shall be equal to the full amount of the payments or benefits
required by this Section 5(a).

(b) Executive shall be granted on the Effective Date 179,813 shares of restricted common stock
of the Company under the Ventas, Inc. 2000 Incentive Compensation Plan, as amended. The agreement
evidencing such award shall be substantially in the form attached to this Agreement as Exhibit A.

(c) Executive shall be entitled to participate in such bonus, stock option and other incentive
compensation plans of the Company and its affiliates in effect from time to time for executives of
the Company.

(d) Executive shall be entitled to four weeks of paid vacation each year, earned on the
Effective Date and the first day of each subsequent calendar year. The Executive shall schedule the
timing of such vacations in a reasonable manner. The Executive may also be entitled to such other
leave, with or without compensation, as shall be mutually agreed by the Company and Executive.

(e) Executive may incur reasonable business related expenses including for promoting the
business and expenses for entertainment, travel, cellular telephone and similar items related
thereto. The Company shall reimburse Executive for all such reasonable expenses subject to the
Company’s reimbursement procedures regarding the reporting and documentation of such expenses.

(f) The Company shall pay or promptly reimburse Executive for all reasonable travel expenses
incurred by Executive to travel to and from the Chicago area once each week. To the extent any of
the payments within this Section 5(f) are treated as taxable to the Executive, the Company shall
pay Executive an additional amount such that the net amount retained by Executive after deduction
or payment of all federal, state, local and other taxes with respect to amounts under this Section
5(f) shall be equal to the full amount of the payments required by this Section 5(f).

(g) The Company intends that all provisions of this Agreement will be fully operative,
effective, binding and enforceable as of the Effective Date and agrees to adopt such employee
benefit plans, amendments to employee benefit plans or other arrangements, as applicable, take such
other acts and pay such other amounts as are necessary to effectuate the provisions of this
Agreement effective on the Effective Date. Without limitation of the foregoing, to the extent
Executive experiences any economic or tax or other detriment or diminution in benefit on account of
or related to any of such provisions not being fully operative, effective, binding and enforceable
on the Effective Date fully in accordance with the terms and provisions of such provisions, or any
delay or failure to comply with such provisions, the
Company shall immediately take such actions, and pay such amounts, as Executive and the
Executive Compensation Committee reasonably determine are appropriate so that the Executive
achieves at least the same economic, tax and other benefits the Executive would have had if such
provisions were fully operative, effective, binding and enforceable in accordance with their terms
as of the Effective Date.

 

3

 

6. TERMINATION OF EMPLOYMENT.

(a) DEATH OR DISABILITY. Executive’s employment shall terminate automatically upon
Executive’s death during the Employment Term. If the Company determines in good faith that the
Disability of Executive has occurred during the Employment Term (pursuant to the definition of
Disability set forth below), it may give to Executive written notice of its intention to terminate
Executive’s employment. In such event, Executive’s employment with the Company shall terminate
effective on the 30th day after receipt of such notice by Executive (the “Disability Effective
Date”), provided that, within the 30 days after such receipt, Executive shall not have returned
to performance of Executive’s duties. For purposes of this Agreement, “Disability” shall
mean the total disability as determined by the Board in accordance with standards and procedures
similar to those under the Company’s long-term disability plan, or, if none, a physical or mental
infirmity which impairs the Executive’s ability to perform substantially her duties for a period of
180 consecutive days.

(b) CAUSE. The Company may terminate Executive’s employment during the Employment
Term for Cause or without Cause. For purposes of this Agreement, “Cause” shall mean the
Executive’s (i) conviction of or plea of nolo contendere to a crime involving moral turpitude; or
(ii) willful and material breach by Executive of her duties and responsibilities which is directly
and materially harmful to the business and reputation of the Company and which is committed in bad
faith or without reasonable belief that such breaching conduct is in the best interests of the
Company and its affiliates, but with respect to (ii) only if the Board adopts a resolution by a
vote of at least 75% of its members so finding after giving the Executive and her attorney an
opportunity to be heard by the Board. Any act, or failure to act, based upon authority given
pursuant to a resolution duly adopted by the Board or based upon advice of counsel for the Company
shall be conclusively presumed to be done, or omitted to be done, by Executive in good faith and in
the best interests of the Company.

(c) GOOD REASON. Executive’s employment may be terminated by Executive for Good
Reason or otherwise. “Good Reason” shall exist upon the occurrence, without Executive’s
express written consent, of any of the following events:

(i) a diminution in Executive’s position (including status, offices, titles and
reporting requirements), authority, duties or responsibilities (including the assignment to
Executive of any duties inconsistent with Executive’s position, authority, duties or
responsibilities), in each case, as President and Chief Executive Officer, excluding for
this purpose an isolated, insubstantial and inadvertent action not taken in bad faith and
which is remedied by the Company promptly after receipt of notice thereof given by the
Executive, it being understood that it shall constitute a diminution in Executive’s position
within the meaning of this provision if Executive is, following a
transaction in which the Company is a participant, no longer the chief executive
officer of a publicly traded company;

 

4

 

(ii) the Company shall (A) reduce the Base Salary or annual maximum bonus opportunity
of Executive or (B) reduce (other than pursuant to a uniform reduction applicable to all
similarly situated executives of the Company) Executive’s benefits and perquisites;

(iii) the Company shall require Executive to relocate Executive’s principal business
office to any location more than 30 miles from its location on the Effective Date except
that a relocation of the Executive’s principal business office to the Chicago business
district shall not constitute Good Reason;

(iv) the Company’s failure or refusal to comply with any provision of this Agreement;

(v) the Company (1) is a debtor in any bankruptcy case in which an order for relief is
entered under any chapter of the federal Bankruptcy Code; (2) is adjudicated a bankrupt
under any bankruptcy, insolvency, or reorganization law; (3) has a receiver of all or a
substantial portion of its assets or property appointed; or (4) makes an assignment for the
benefit of creditors; or

(vi) the failure of the Company to obtain the assumption of this Agreement as
contemplated by Section 12(c).

Notwithstanding anything in this Agreement to the contrary, a termination by Executive for any
reason during the 30-day period immediately following the one-year anniversary of a Change of
Control shall be deemed to be a termination with Good Reason for all purposes of this Agreement.

(d) For purposes of this Agreement, “Change of Control” shall mean the occurrence of any one
of the following events:

(i) An acquisition of any voting or other securities by any “Person” (having the
meaning ascribed to such term in Section 3(a)(9) of the Securities Exchange Act of 1934, as
amended (“1934 Act”) and used in Sections 13(d) and 14(d) thereof, including a “group” as
defined in Section 13(d)), such that immediately after which such Person has “Beneficial
Ownership” (within the meaning of Rule 13d-3 under the 1934 Act) of 20% or more of either
(i) any class of then-outstanding equity securities of the Company (“Outstanding Shares”) or
(ii) the combined voting power of the Company’s then outstanding voting securities entitled
to vote generally in the election of directors (“Voting Securities”); provided, however,
that in determining whether a Change of Control has occurred, Outstanding Shares or Voting
Securities which are acquired in an acquisition by (i) the Company or any of its
subsidiaries or, (ii) an employee benefit plan (or a trust forming a part thereof)
maintained by the Company or any of its subsidiaries shall not constitute an acquisition
which would cause a Change of Control;

 

5

 

(ii) The individuals who, as of the Effective Date, constituted the Board (the
“Incumbent Board”) cease for any reason to constitute over 50% of the Board; provided,
however, that if the election, or nomination for election by the Company’s stockholders, of
any new director was approved by a vote of over 50% of the Incumbent Board, such new
director shall, for purposes of this Section 6(d), be considered as though such person were
a member of the Incumbent Board; provided, further, however, that no individual shall be
considered a member of the Incumbent Board if such individual initially assumed office as a
result of either an actual or threatened “Election Contest” (as described in Rule 14a-11
promulgated under the 1934 Act) or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Incumbent Board (a “Proxy Contest”),
including by reason of any agreement intended to avoid or settle any Election Contest or
Proxy Contest;

(iii) Consummation of a merger, consolidation or reorganization involving the Company,
unless each of the following events occurs in connection with such merger, consolidation or
reorganization:

1) the stockholders of the Company, immediately before such merger,
consolidation or reorganization, have Beneficial Ownership, directly or indirectly
immediately following such merger, consolidation or reorganization, of over 50% of
the then outstanding shares of common stock and the combined voting power of all
voting securities of the corporation resulting from such merger or consolidation or
reorganization (the “Surviving Company”) in substantially the same proportion as
their Beneficial Ownership of the Outstanding Shares and Voting Securities
immediately before such merger, consolidation or reorganization;

2) the individuals who were members of the Incumbent Board immediately prior to
the execution of the agreement providing for such merger, consolidation or
reorganization constitute over 50% of the members of the board of directors of the
Surviving Company; and

3) no Person (other than the Company, any of its subsidiaries, any employee
benefit plan (or any trust forming a part thereof) maintained by the Company, the
Surviving Company or any Person who, immediately prior to such merger, consolidation
or reorganization had Beneficial Ownership of 20% or more of the then Outstanding
Shares or Voting Securities) has Beneficial Ownership of 20% or more of the then
Outstand Shares of the Surviving Company or combined voting power of the Surviving
Company’s then outstanding voting securities;

(iv) Approval by the Company’s stockholders of a complete liquidation or dissolution of
the Company, or the occurrence of the same.

(v) Approval by the Company’s stockholder of an agreement for the assignment, sale,
conveyance, transfer, lease or other disposition of all or substantially all
of the assets of the Company to any Person (other than a transfer to a subsidiary of
the Company), or the occurrence of the same.

 

6

 

(vi) The occurrence of any transaction which is reasonably likely to result in the
Company not continuing to be a real estate investment trust as defined under section 856 of
the Code (for example, such as because the Company will not have sufficient qualifying
income or assets).

(vii) Any other event that the Board shall determine constitutes an effective Change of
Control or Company.

(viii) Notwithstanding the foregoing, a Change of Control shall not be deemed to occur
solely because any Person (the “Subject Person”) acquired Beneficial Ownership of more than
the permitted amount of the Outstanding Shares or Voting Securities as a result of the
acquisition of Outstanding Shares or Voting Securities by the Company which, by reducing the
number of Outstanding Shares or Voting Securities outstanding, increases the proportional
number of shares Beneficially Owned by the Subject Person; provided that if a Change of
Control would occur (but for the operation of this sentence) as a result of the acquisition
of Shares or Voting Securities by the Company, the Subject Person becomes the Beneficial
Owner of any additional Outstanding Shares or Voting Securities which increases the
percentage of the then Outstanding Shares or Voting Securities Owned by the Subject Person,
then a Change of Control shall occur.

(e) NOTICE OF TERMINATION. Any termination by the Company for Cause, or by Executive
for Good Reason, shall be communicated by a Notice of Termination given in accordance with this
Agreement. For purposes of this Agreement, a “Notice of Termination” means a written
notice which (i) indicates the specific termination provision in this Agreement relied upon, (ii)
sets forth in reasonable detail the facts and circumstances claimed to provide a basis for
termination of Executive’s employment under the provision so indicated, and (iii) specifies the
intended termination date (which date, in the case of a termination for Good Reason, shall be not
more than thirty days after the giving of such notice). The failure by Executive or the Company to
set forth in the Notice of Termination any fact or circumstance which contributes to a showing of
Good Reason or Cause shall not waive any right of Executive or the Company, respectively, hereunder
or preclude Executive or the Company, respectively, from asserting such fact or circumstance in
enforcing Executive’s or the Company’s rights hereunder.

(f) DATE OF TERMINATION. “Date of Termination” means (i) if Executive’s
employment is terminated by the Company for Cause, or by Executive for Good Reason, the later of
the date specified in the Notice of Termination or the date that is one day after the last day of
any applicable cure period, (ii) if Executive’s employment is terminated by the Company other than
for Cause or Disability, or Executive resigns without Good Reason, the Date of Termination shall be
the date on which the Company or Executive notified Executive or the Company, respectively, of such
termination and (iii) if Executive’s employment is terminated by reason of death or Disability, the
Date of Termination shall be the date of death of Executive or the Disability Effective Date, as
the case may be.

 

7

 

7. OBLIGATIONS OF THE COMPANY UPON TERMINATION. Following any termination of Executive’s
employment hereunder for any reason whatsoever, the Company shall pay Executive her Base Salary
through the Date of Termination, all amounts earned by Executive through the Date of Termination
(including accrued vacation and bonus and expenses incurred but not yet reimbursed), and all
amounts owed to Executive pursuant to the terms and conditions of the benefit plans, programs and
arrangements of the Company at the time such payments are due. In addition, Executive shall be
entitled to the following additional payments and benefits.

(a) DEATH OR DISABILITY. If, during the Employment Term, Executive’s employment shall
terminate by reason of Executive’s death or Disability, the Company shall pay to Executive (or her
designated beneficiary or estate, as the case may be) the prorated portion of any Target Bonus (as
defined in Section 7(d)) Executive would have received for the year of termination of employment.
Such amount shall be paid within 30 days of the date when such amounts would otherwise have been
payable to the Executive if Executive’s employment had not terminated. In addition, if during the
Employment Term, Executive’s employment shall terminate by reason of Executive’s Disability, the
Company shall provide the benefits set forth in Section 7(b)(2).

(b) GOOD REASON; OTHER THAN FOR CAUSE. Subject to Executive’s execution and delivery
of the Release, if the Company shall terminate Executive’s employment other than for Cause (but not
for Disability) or the Executive shall terminate her employment for Good Reason:

(1) The Company shall pay Executive on the Executive’s Date of Termination an amount
equal to the sum of (i) the prorated portion of the Target Bonus for Executive for the year
in which the Date of Termination occurs, plus (ii) an amount equal to three (3) times the
sum of the Executive’s Base Salary and Target Bonus as of the Date of Termination.

(2) For a period of two (2) years following the Date of Termination, the Executive
shall be treated as if she had continued to be an Executive for all purposes under the
Company’s Health Insurance Plan and Dental Insurance Plan; or if the Company has not yet
established its own Health Insurance Plan and/or Dental Plan or the Executive is prohibited
from participating in such plan, the Company shall, at its sole cost and expense, provide
health and dental insurance coverage for Executive which is equivalent to the coverage
provided to Executive as of the Date of Termination. Such benefits shall not have any
waiting period for coverage and shall provide coverage for any pre-existing condition.
Following this continuation period, the Executive shall be entitled to receive continuation
coverage under Part 6 of Title I of ERISA treating the end of this period as a termination
of the Executive’s employment if allowed by law.

(3) For a period of two (2) years following the Date of Termination, Company shall
maintain in force, at its expense, all life insurance being provided or required to be
provided to the Executive by the Company as of the Date of Termination and shall thereafter
enable Executive to assume such life insurance at the Executive’s expense.

 

8

 

(4) For a period of two (2) years following the Executive’s Date of Termination, the
Company shall provide short-term and long-term disability insurance benefits to Executive
equivalent to the coverage that the Executive would have had she remained employed under the
disability insurance plans applicable to Executive on the Date of Termination. Should
Executive become disabled during such period, Executive shall be entitled to receive such
benefits, and for such duration, as the applicable plan provides.

(5) To the extent not already vested pursuant to the terms of such plan, the
Executive’s interests under any retirement, savings, deferred compensation, profit sharing
or similar arrangement of the Company shall be automatically fully (i.e., 100%) vested,
without regard to otherwise applicable percentages for the vesting of employer contributions
based upon the Executive’s years of service with the Company.

(6) The Company shall adopt such employee benefit plans or amendments to its employee
benefit plans, if any, as are necessary to effectuate the provisions of this Agreement.

(7) Executive shall become vested in all restricted stock awards, stock options and
other performance related compensation, including any performance cash plan awards or awards
under a successor or replacement plan, on the basis of the maximum payout for any open
performance cycles.

(8) The Company shall provide Executive with executive office space and an executive
secretary (both the office space and secretary shall be of a quality comparable to that the
Executive had during the Employment Term) in a city or other locale chosen by Executive for
a period of one year after the termination of Executive’s employment with an aggregate cost
not to exceed $50,000.

(c) DEATH AFTER TERMINATION. In the event of the death of Executive during the period
Executive is receiving payments pursuant to this Agreement, Executive’s designated beneficiary
shall be entitled to receive the balance of the payments; or in the event of no designated
beneficiary, the remaining payments shall be made to Executive’s estate.

(d) TARGET BONUS. For the purposes of all provisions of this Agreement, the term
“Target Bonus” shall mean the greater of (x) the highest actual bonus paid to Executive
pursuant to the Company’s annual incentive plan with respect to any of the three preceding calendar
years and (y) the full amount of the annual bonus that would be payable to the Executive, assuming
all performance criteria (at the maximum level) on which such bonus is based were deemed to be
satisfied, in respect of services for the calendar year in which the date in question occurs.

 

9

 

8. CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY. If Executive becomes entitled to any payments
or benefits whether pursuant to the terms of or by reason of this Agreement or any other plan,
arrangement, agreement, policy or program (including without limitation any restricted stock, stock
option, stock appreciation right or similar right, or the lapse or termination of any restriction
on the vesting or exercisability of any of the foregoing) with the
Company, any successor to the Company or to all or a part of the business or assets of the
Company (whether direct or indirect, by purchase, merger, consolidation, spin off, or otherwise and
regardless of whether such payment is made by or on behalf of the Company or such successor) or any
person whose actions result in a change of control or any person affiliated with the Company or
such persons (in the aggregate, “Payments” or singularly, “Payment”), which
Payments are reasonably determined by the Executive to be subject to the tax imposed by Section
4999 or any successor provision of the Code or any similar state or local tax, or any interest or
penalties are incurred by Executive with respect to such excise tax (such excise tax, together with
any such interest and penalties, are hereinafter collectively referred to as the “Excise
Tax”), the Company shall pay Executive an additional amount (“Gross-Up Payment”) such
that the net amount retained by Executive, after deduction or payment of (i) any Excise Tax on
Payments, (ii) any federal, state and local income tax and Excise Tax upon the payment provided for
by this Section, and (iii) any additional interest and penalties imposed because the Excise Tax is
not paid when due, shall be equal to the full amount of the Payments. The Gross-Up Payment shall
be paid to the Executive within ten (10) days of the Company’s receipt of written notice from the
Executive that the Excise Tax has been paid, is or was payable or will be payable at any time in
the future.

9. TAX PAYMENT. For purposes of determining the amount of payments pursuant to Sections 5(a),
5(f), 5(g), 8, 10 and 16 and elsewhere in this Agreement, the Executive shall be deemed to pay
federal income taxes at the highest marginal rate of federal income taxation in the calendar year
in which the payment is to be made and state and local income taxes at the highest marginal rates
of taxation in the state and locality of the Executive’s residence or the Executive’s place of
business, whichever is higher, on the date the payment is to be made. Without limitation on any
other provision of this Agreement, all such payments involving the calculation of taxes shall be
made no later than two (2) days after the receipt by the Company of written advice from a
professional tax advisor selected by the Executive that taxes are payable. The expense incurred in
obtaining such advice shall be paid by the Company. Without limitation on any other provisions of
this Agreement, the Company shall indemnify Executive for all taxes with respect to the amounts for
which payments described in the first sentence of this Section are required to be made pursuant to
this Agreement and all other costs including interest and penalties with respect to the payment of
such taxes. To the extent any of the payments pursuant to this Section are treated as taxable to
the Executive, the Company shall pay Executive an additional amount such that the net amount
retained by the Executive after deduction or payment of all federal, state, local and other taxes
with respect to amounts pursuant to this Section shall be equal to the full amount of the payments
required by this Section.

10. DISPUTES. Any dispute or controversy arising under, out of, or in connection with this
Agreement shall, at the election and upon written demand of either party, be finally determined and
settled by binding arbitration in the City of Chicago, Illinois, in accordance with the Labor
Arbitration rules and procedures of the American Arbitration Association, and judgment upon the
award may be entered in any court having jurisdiction thereof. The Company shall pay all costs of
the arbitration and all reasonable attorneys’ and accountants’ fees of the Executive in connection
therewith, including any litigation to enforce any arbitration award. To the extent any of the
payments within this Section are treated as taxable to the Executive, the Company shall pay
Executive an additional amount such that the net amount retained by Executive after deduction or
payment of all federal, state, local and other taxes with respect to
amounts under this Section shall be equal to the full amount of the payments required by this
Section.

 

10

 

11. RESTRICTIVE COVENANTS.

(a) CONFIDENTIALITY.

(i) The Executive acknowledges that in the course of the Executive’s employment with
the Company the Executive has and will become familiar with trade secrets and other
confidential information concerning the Company and its subsidiaries and that the
Executive’s services will be of special, unique and extraordinary value to the Company and
its subsidiaries.

(ii) Executive acknowledges that it is the policy of the Company and its subsidiaries
to maintain as secret and confidential all valuable and unique information and techniques
acquired, developed or used by the Company and its subsidiaries relating to their business,
operations, actual or potential products, strategies, potential liabilities, employees,
tenants, proposed or perspective tenants and customers, business partners and customers,
(including without limitation information protected by the Company’s attorney/client, work
product, or tax advisor/audit privileges; tax matters and information; financial analysis
models; the Company’s strategic plans; negotiations with third parties; methods, policies,
processes, formulas, techniques, know-how and other knowledge; trade practices, trade
secrets, or financial matters; lists of customers or customers’ purchases; lists of
suppliers, manufacturers, representatives, or other distributors; lists of and information
about tenants; requirements for systems, programs, machines, or their equipment; information
regarding the Company’s bank accounts, credit agreement or financial projections
information; information regarding the Company’s directors or officers or their personal
affairs) which gives the Company and its subsidiaries a competitive advantage in the
businesses in which the Company and its subsidiaries are engaged (“Confidential
Information”). “Confidential Information” shall not include information that (A) is or
becomes generally available to the public other than as a result of a disclosure by
Executive in violation of this Agreement, (B) was available to Executive on a
non-confidential basis prior to the date hereof, or (C) is compelled to be disclosed by a
court or governmental agency, provided that prior written notice is given to the Company and
Executive cooperates with the Company in any efforts by the Company to limit the scope of
such obligation and/or to obtain confidential treatment of any material disclosed pursuant
to such obligation. Executive recognizes that all such Confidential Information is the sole
and exclusive property of the Company and its subsidiaries, and that disclosure of
Confidential Information would cause damage to the Company and its subsidiaries. Executive
shall not disclose, directly or indirectly, any Confidential Information obtained during her
employment with the Company, and will take all necessary precautions to prevent disclosure,
to any unauthorized individual or entity inside or outside the Company, and will not use the
Confidential Information or permit its use for the benefit of Executive or other third party
other than the Company. These obligations shall continue for so long as the Confidential
Information remains Confidential Information.

 

11

 

(b) NONCOMPETITION, NONSOLICITATION, NONINTERFERENCE. Executive shall not during the
Employment Term, and during the one-year period after the termination of Executive’s employment
with the Company for any reason (the “Restricted Period”), either directly or indirectly
(through another business or person) engage in or facilitate any of the following activities
anywhere in the United States:

(i) soliciting to hire, recruit or employ any person who is, or during the six-month
period preceding such activity was, employed by the Company or any subsidiary, or causing or
attempting to cause any third party to do any of the foregoing;

(ii) performing services as an employee, director, officer, consultant, independent
contractor or advisor; or investing in, whether in the form of equity or debt, owning any
interest or otherwise having an ownership or other interest or a connection to any
Prohibited Entity or performing services as an employee, director, officer, consultant,
independent contractor or advisor to any other company, entity or person if those services
relate directly to a business or businesses that directly and materially compete with the
Company anywhere in the United States. Nothing in this Section (ii) shall, however,
restrict Executive from (A) making an investment in and owning up to one-percent (1%) of the
common stock of any company whose stock is listed on a national exchange, provided that such
investment does not give Executive the right or ability to control or influence the policy
decisions of any direct competitor, or (B) except as provided in Section 11(c) below,
performing services as an employee, director, officer, consultant, independent contractor or
advisor in an operating company which provides healthcare services or goods other than
leasing or financing of real property (for example, a hospital or a nursing facility). For
purposes of this Agreement, a Prohibited Entity is any company, entity or person that
derives more than 20% of its consolidated gross revenues from a business or businesses that
directly and materially compete with the Company.

(c) OTHER PROHIBITED ACTIVITIES. Executive acknowledges that her position at the
Company provides her with access to highly sensitive information concerning the Company’s principal
lessee and its affiliates and leases to such lessee and its affiliates which are critical to the
Company’s ability to effectively function and to the properties to be purchased by the Company, and
that if Executive were to provide services for such principal lessee and/or its affiliates such
services would cause irreparable damages to the Company. Executive shall not during the Employment
Term and the Restricted Period, either directly or indirectly (through another business or person)
engage in or facilitate any of the following activities anywhere in the United States or in any
location outside the United States where the Company conducts or plans to conduct business:
performing services as an employee, director, officer, consultant, independent contractor or
advisor; or investing in, whether in the form of equity or debt, owning any interest or otherwise
having an ownership or other interest or a connection to Kindred Healthcare, Inc. or any of its
parent, sister, subsidiary or affiliated entities in any manner, including without limitation as an
owner, principal, partner, officer, director, stockholder, employee, consultant, contractor, agent,
broker, representative or otherwise (unless Executive becomes a stockholder in Kindred Healthcare
as part of a restructuring of Kindred Healthcare where the Company’s stockholders receive Kindred
Healthcare stock), provided, however that subsection (c) shall not preclude Executive from owning
any equity or debt interest in Kindred
Healthcare to which she became entitled by reason of her previous employment by Kindred
Healthcare.

 

12

 

(d) NON-DISPARAGEMENT.

(i) Executive agrees not to make, or cause to be made, any statement, observation or
opinion, or communicate any information (whether oral or written, directly or indirectly)
that (A) accuses or implies that the Company and/or any of its affiliates, together with
their respective present or former officers, directors, partners, stockholders, employees
and agents, and each of their predecessors, successors and assigns, engaged in any wrongful,
unlawful, unethical or improper conduct, whether relating to Executive’s employment (or
termination thereof), the business or operations of the Company, or otherwise; or (B)
disparages, impugns or in any way reflects adversely upon the business, good will, products,
business opportunities, competency, character, behavior or reputation of the Company and/or
any of its affiliates, together with their respective present or former officers, directors,
partners, stockholders, employees and agents, and each of their predecessors, successors and
assigns.

(ii) The Company agrees not to make, or cause to be made, any statement, observation or
opinion, or communicate any information (whether oral or written, directly or indirectly)
that (A) accuses or implies that Executive engaged in any wrongful, unlawful, unethical or
improper conduct, whether relating to Executive’s employment (or termination thereof), the
business or operations of the Company, or otherwise; or (B) disparages, impugns or in any
way reflects adversely upon the business, business opportunities, competency, character,
behavior or reputation of Executive.

(iii) Nothing herein shall be deemed to preclude Executive or the Company from
providing truthful testimony or information pursuant to subpoena, court or other similar
legal process.

(e) NEW EMPLOYER. Executive shall provide the terms and conditions of this Section 11
to any prospective new employer or new employer and shall permit the Company to contact any such
company, entity or individual to confirm Executive’s compliance with this Section 11 and shall
provide the Company with such information as it requests to allow such inquiry.

(f) REASONABLENESS OF RESTRICTIVE COVENANTS. 

(i) Executive acknowledges that the covenants contained in this Section 11 are
reasonable in the scope of the activities restricted, the geographic area covered by the
restrictions, and the duration of the restrictions, and that such covenants are reasonably
necessary to protect the Company’s legitimate interests in its Confidential Information, its
reputation, and in its relationships with its employees, customers, and suppliers.

(ii) The Company has, and the Executive has had an opportunity to, consult with their
respective legal counsel and to be advised concerning the reasonableness and propriety of
such covenants. Executive acknowledges that her
observance of the covenants contained herein will not deprive Executive of the ability
to earn a livelihood or to support her dependents.

 

13

 

(g) RIGHT TO INJUNCTION. In recognition of the confidential nature of the
Confidential Information, and in recognition of the necessity of the limited restrictions imposed
by Section 11, Executive and the Company agree that it would be impossible to measure solely in
money the damages which the Company would suffer if Executive were to breach any of her obligations
hereunder. Executive acknowledges that any breach of any provision of this Agreement would
irreparably injure the Company. Accordingly, Executive agrees that if she breaches any of the
provisions of Section 11, the Company shall be entitled, in addition to any other remedies to which
the Company may be entitled under this Agreement or otherwise, to an injunction to be issued by a
court of competent jurisdiction, to restrain any breach, or threatened breach, of any provision of
Section 11, and Executive hereby waives any right to assert any claim or defense that the Company
has an adequate remedy at law for any such breach.

(h) ASSISTANCE. During the one-year period following a termination of Executive’s
employment with the Company, Executive shall from time to time provide the Company with such
reasonable assistance and cooperation as the Company may reasonably from time to time request in
connection with any financial and business issues, investigation, claim, dispute, judicial,
legislative, administrative or arbitral proceeding, or litigation arising out of matters within the
knowledge of Executive and related to her position as an employee of the Company at the times and
on the terms agreed to in good faith by Executive and the Company.

12. SUCCESSORS.

(a) This Agreement is personal to Executive and without the prior written consent of the
Company shall not be assignable by Executive otherwise than by will or the laws of descent and
distribution. This Agreement shall inure to the benefit of and be enforceable by Executive’s legal
representatives.

(b) This Agreement shall inure to the benefit of and be binding upon the Company and its
successors and assigns. This Agreement shall not be terminated by the voluntary or involuntary
dissolution of the Company or by any merger or consolidation where the Company is not the surviving
corporation, or upon any transfer of all or substantially all of the Company’s stock or assets. In
the event of such merger, consolidation or transfer, the provisions of this Agreement shall be
binding upon and shall inure to the benefit of the surviving corporation or corporation to which
such stock or assets of the Company shall be transferred.

(c) The Company shall require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or assets of the
Company, or any business of the Company for which Executive’s services are principally performed,
to assume expressly, absolutely and unconditionally and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform it if no such
succession had taken place. As used in this Agreement, “Company” shall mean the Company as
herein before defined and any successor to its business and/or assets as aforesaid which assumes
and agrees to perform this Agreement by operation of law, or otherwise.

 

14

 

13. OTHER SEVERANCE BENEFITS. Executive hereby agrees that in consideration for and subject
to the receipt of the payments to be received under this Agreement, Executive waives any and all
rights to any payments or benefits under any other plans, programs, contracts or arrangements of
the Company or their respective affiliates that provide for severance payments or benefits upon a
termination of employment, except as provided in this Agreement.

14. PRESS RELEASE. The Company shall not issue or permit to be issued any press release or
other public announcement regarding the Executive or the terms of Executive’s employment (including
related to any termination of Executive’s employment for any reason) without Executive’s prior
approval, which shall not be unreasonably withheld.

15. INDEMNIFICATION AND INSURANCE. Beginning on the Effective Date and continuing thereafter,
including after the termination of Executive’s employment hereunder, the Company shall indemnify,
defend and hold the Executive harmless from and against any and all Expenses, liabilities, damages,
costs, judgments, penalties, fines and amounts paid in settlement, incurred by Executive in
connection with any Proceeding involving her by reason of her being or having been an officer,
director, employee or agent of the Company (or any affiliate of the Company) to the fullest extent
permitted by law, whether or not Executive is, or is threatened to be made, a party to any
threatened, pending, or completed Proceeding, and whether or not Executive is successful in such
Proceeding. In addition, upon receipt from Executive of (i) a written request for an advancement
of Expenses which Executive reasonably believes will be subject to indemnification hereunder and
(ii) a written undertaking by Executive to repay any such amounts if it shall ultimately be
determined that she is not entitled to indemnification under this Agreement or otherwise, the
Company shall advance such Expenses to Executive or pay such Expenses for Executive, all in advance
of the final disposition of any such matter. The provisions of the preceding two sentences shall
survive the termination of Executive’s employment hereunder for any reason whatsoever and the
termination of this Agreement. The rights of indemnification and to receive advancement of
Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which
Executive may at any time be entitled under applicable law, the Certificate of Incorporation, the
By-Laws of the Company, any other agreement, a vote of stockholders or a resolution of the Board,
or otherwise. For purposes hereof, “Expenses” shall include all reasonable fees and
expenses including, without limitation, reasonable attorneys’ fees, retainers, court costs,
transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and
binding costs, telephone charges, postage, delivery service fees, and disbursements and expenses of
the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or
defend, investigating, or being or preparing to be a witness in a Proceeding; and
“Proceeding” shall include (without limitation) any and all proceedings, including, without
limitation, actions, suits, arbitrations, alternative dispute resolution mechanisms,
investigations, administrative hearings and other proceedings, whether civil, criminal,
administrative or investigative, and whether or not by or in the right of the Company. Beginning on
the Effective Date and continuing thereafter, including after the termination of Executive’s
employment hereunder, Executive shall have coverage under a director’s and officer’s liability
insurance policy in amounts no less than, and on terms no less favorable than those, as provided to
officers of the Company as of the Effective Date and in amounts no less than, and on terms no less
favorable than those, as provided to the other members of the Board and senior executive officers
of the Company from time to time.

 

15

 

16. ATTORNEY FEES. The Company will pay, or reimburse Executive for, at Executive’s
discretion, all attorneys fees, costs and expenses incurred by Executive in connection with the
negotiation, execution and delivery of this Agreement. All reasonable costs and expenses
(including fees and disbursements of counsel) incurred by Executive in seeking to interpret this
Agreement or enforce rights pursuant to this Agreement shall be paid on behalf of or reimbursed to
Executive promptly by the Company, whether or not Executive is successful in asserting such rights;
provided, however, that no reimbursement shall be made of such expenses relating to any
unsuccessful assertion of rights if and to the extent that Executive’s assertion of such rights was
in bad faith. To the extent any of the payments within this Section are treated as taxable to the
Executive, the Company shall pay Executive an additional amount such that the net amount retained
by Executive after deduction or payment of all federal, state, local and other taxes with respect
to amounts under this subsection shall be equal to the full amount of the payments required by this
Section.

17. WITHHOLDING. All payments to be made to Executive hereunder will be subject to all
applicable required withholding of taxes.

18. NO MITIGATION. Executive shall have no duty to mitigate her damages by seeking other
employment or taking other action by way of mitigation of the amounts payable to the Executive
under this Agreement and the payments required hereunder shall not be reduced or offset by any
amounts, including compensation from other employment. Further, the Company’s obligations to make
any payments hereunder shall not be subject to or affected by any set off, counterclaims or
defenses which the Company may have against Executive or others.

19. NOTICES. Any notice required or permitted to be given under this Agreement shall be in
writing and shall be deemed to have been duly given and effective when delivered by personal or
overnight couriers, or registered mail, in each case with confirmation of receipt, prepaid and
addressed as follows:

If to Executive:

Debra A. Cafaro

166 Sheridan Road

Winnetka, Illinois 60093

With a copy to:

Wachtell, Lipton, Rosen & Katz

51 W. 52nd Street

New York, New York 10019

Attention: Adam D. Chinn

If to Company:

Ventas, Inc.

10350 Ormsby Park Place

Suite 300

Louisville, Kentucky 40223

Attn: General Counsel

Either party may change its specified address by giving notice in writing to the other in
accordance with the foregoing method.

 

16

 

20. WAIVER OF BREACH AND SEVERABILITY. The waiver by either party of a breach of any
provision of this Agreement by the other party shall not operate or be construed as a waiver of any
subsequent breach by either party. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision, which other
provision shall remain in full force and effect. In the event any provision of this Agreement is
found to be invalid or unenforceable, it may be severed from the Agreement and the remaining
provisions of the Agreement, including all make- whole provisions of this Agreement, shall continue
to be binding and effective.

21. ENTIRE AGREEMENT; AMENDMENT. This instrument contains the entire agreement of the parties
with respect to the subject matter hereof and supersedes all prior agreements (including the
Existing Employment Agreement), promises, covenants, arrangements, communications, representations
and warranties between them, whether written or oral, with respect to the subject matter hereof;
provided, however, notwithstanding anything to the contrary found herein (including this Section
21), Section 6 of the Existing Employment Agreement shall not be modified in any way and the loans
granted and outstanding as of the Effective Date pursuant to such Section 6 shall continue to
represent the Executive’s obligations to the Company. The penultimate sentence of Section 5(c) of
the Existing Agreement shall also remain in full force and effect. No provisions of this Agreement
may be modified, waived or discharged unless such modification, waiver or discharge is agreed to in
writing signed by Executive and such officer of the Company specifically designated by the Board.

22. COMPLIANCE WITH SECTION 409A OF THE INTERNAL REVENUE CODE. All payments pursuant to this
Agreement shall be subject to the provisions of this Section 22. If Executive is a “Specified
Employee” of the Company for purposes of Internal Revenue Code Section 409A (“Code Section 409A”)
at the time of a payment event set forth in this Agreement, then no severance or other payments
pursuant to this Agreement shall be made to Executive by the Company until the amount of time has
passed that is necessary to avoid incurring excise taxes under Code Section 409A. Should this
Section 22 result in a delay of payments to Executive, on the first day any such payments may be
made without incurring a penalty pursuant to Code Section 409A (the “409A Payment Date”), the
Company shall begin to make such payments as provided for in this Agreement, provided that any
amounts that would have been payable earlier but for the application of this Section 22, shall be
paid in lump-sum on the 409A Payment Date along with accrued interest at the rate of interest
published in the Wall Street Journal as the “prime rate” (or equivalent) on the date that payments
to Executive should have been made under this Agreement. For purposes of this provision, the term
Specified Employee shall have the meaning set forth in Section 409A(2)(B)(i) of the Internal
Revenue Code of 1986, as amended or any successor provision and the treasury regulations and
rulings issued thereunder. If any compensation or benefits provided by this Agreement may result
in the application of Code Section 409A, the Company shall, in consultation with the Executive,
modify the Agreement in the least restrictive manner necessary in order to exclude such
compensation from the definition of “deferred compensation” within the meaning of such Code
Section 409A or in order to comply with the provisions of Code Section 409A of the Code and without
any diminution in the value of the payments or benefits to the Executive.

 

17

 

23. GOVERNING LAW. This Agreement shall be construed in accordance with and governed by the
laws of the State of Delaware.

24. HEADINGS. The headings in this Agreement are for convenience only and shall not be used
to interpret or construe its provisions.

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

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above
written.

	 	 	 	 	 	 	 
	 	 	VENTAS, INC.
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Ronald G. Geary	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Ronald G. Geary, Director	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	/s/ Debra A. Cafaro	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Executive	 	 

 

18

 

Exhibit A

VENTAS, INC.

RESTRICTED STOCK AGREEMENT

THIS RESTRICTED STOCK AGREEMENT (“Agreement”) is made and entered into as of the
28th day of December, 2006 (“Effective Date”), by and between VENTAS, INC., a Delaware
corporation (“Company”), and Debra A. Cafaro, an employee of the Company (“Employee”).

RECITALS:

A. Company has adopted the 2000 Incentive Compensation Plan, as amended (“Plan”), to promote
the interests of Company, its subsidiaries (hereinafter the term “Company” includes, where
appropriate, all of Company’s subsidiaries, as that term is defined in Section 424(f) of the
Internal Revenue Code of 1986, as amended (“Code”)) and its stockholders by encouraging selected
employees of Company, such as Employee, to invest in Company’s shares of Common Stock, having a par
value of $.25 per share (“Common Stock”).

B. Company believes that such investment should increase the personal interest and special
efforts of Employee in providing for the continued success and progress of Company and should
enhance the efforts of Company to attract and retain competent key employees.

AGREEMENT:

NOW, THEREFORE, the parties agree as follows:

1. Issuance of Common Stock. The Company shall cause to be issued to Employee 179,813
shares of Common Stock (the “Shares”). The certificates representing the Shares, together with a
stock power duly endorsed in blank by Employee, shall be deposited with the Company to be held by
it until the restrictions imposed upon the Shares by this Agreement have expired.

2. Vesting of Shares. If Employee has not forfeited any of the Shares, the
restriction on the Transfer (as defined herein) of the Shares shall expire with respect to
one-fifth (20%) of the Shares on each of the first five annual anniversaries of the Effective Date.
Upon expiration of the restriction against Transfer of any of the Shares pursuant to this Section
2, the Shares shall vest. Notwithstanding the foregoing, in the event of (A) a Change of Control,
(B) the death or Disability of Employee or (C) termination of Employee’s employment by the Company
without Cause or by Employee with Good Reason (as each of such terms in this Paragraph 2 are
defined in Employee’s Amended and Restated Employment Agreement, dated as of the date hereof
(“Employment Agreement”), the Shares shall automatically vest and all restrictions on the Shares
shall lapse.

3. Forfeiture of Shares. If Employee ceases to be an Employee for any reason other
than death or Disability or termination by the Company without Cause or by Employee with Good
Reason (as such terms are defined in Employee’s Employment Agreement), all of the Shares which have
not vested in accordance with Section 2 of this Agreement shall be forfeited
and reconveyed to the Company by Employee without additional consideration and Employee shall
have no further rights with respect thereto.

 

 

 

4. Restriction on Transfer of Shares. Employee shall not Transfer any of the Shares
owned by Employee until such restriction on the Transfer of the Shares is removed pursuant to this
Agreement. For the purposes of this Agreement, the term “Transfer” shall mean any sale, exchange,
assignment, gift, encumbrance, lien, transfer by bankruptcy or judicial order, transfers by
operation of law and all other types of transfers and dispositions, whether direct or indirect,
voluntary or involuntary.

5. Rights as Stockholder. Unless the Shares are forfeited, Employee shall be
considered a stockholder of the Company with respect to all such Shares that have not been
forfeited and shall have all rights appurtenant thereto, including the right to vote or consent to
all matters that may be presented to the stockholders and to receive all dividends and other
distributions paid on such Shares. If any dividends or distributions are paid in Common Stock,
such Common Stock shall be subject to the same restrictions as the Shares with respect to which it
was paid.

6. Restrictive Legend. Each certificate representing the Shares may bear the
following legend:

The sale or other transfer of the shares represented by this Certificate,
whether voluntary, involuntary or by operation of law, is subject to
certain restrictions on transfer as set forth in the Ventas, Inc. 2000
Incentive Compensation Plan, and in the related Restricted Stock Agreement.
A copy of the Plan and such Restricted Stock Agreement may be obtained
from the Secretary of Ventas, Inc.

When the Shares have become vested, Employee shall have the right to have the preceding legend
removed from the certificate representing such vested Shares.

7. Agreement Does Not Grant Employment Rights. The granting of Shares shall not be
construed as granting to Employee any right to employment by the Company. The right of the Company
to terminate Employee’s employment at any time, whether by dismissal, discharge, retirement or
otherwise, is specifically reserved.

8. Miscellaneous.

(a) Incorporation of Plan. This Agreement is and shall be, in all respects, subject
to the terms and conditions of the Plan, a copy of which Employee acknowledges receiving prior to
the execution hereof and the terms of which are incorporated by reference.

(b) Captions. The captions and section headings used herein are for convenience only,
shall not be deemed a part of this Agreement and shall not in any way restrict or modify the
context or substance of any section or paragraph of this Agreement.

(c) Governing Law. This Agreement shall be governed by, and construed in accordance
with, the laws of the State of Delaware without regard to its conflict of laws rules.

 

A-2

 

(d) Section 83(b) Election Under the Code. If Employee timely elects, under Section
83(b) of the Code, to include the fair market value of the Shares on the date hereof in such
Employee’s gross income for the current taxable year, Employee agrees to give prompt written notice
of such election to the Company. Employee hereby acknowledges that the Company will be obligated
to withhold income taxes for the income includable in Employee’s income and hereby agrees to make
whatever arrangements are necessary to enable the Company to withhold as required by law.

(e) Defined Terms. All capitalized terms not defined herein shall have the same
meanings as set forth in the Plan unless a different meaning is plainly required by the context.

IN WITNESS WHEREOF, the parties have executed this Agreement on and as of the date first
above written.

	 	 	 	 	 	 	 	 	 
	 	 	VENTAS, INC.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 	 	DEBRA A. CAFARO

 

A-3

 

Exhibit B

General Release

This agreement, release and waiver (the “Agreement”), made as of the            day of                     ,
                          (the “Effective Date”), is made by and between Ventas, Inc. (together with all successors
thereto, “Company”) and Debra A. Cafaro (“Executive”).

WHEREAS, the Executive and the Company have entered into an Amended and Restated Employment
Agreement dated the            day of December, 2006 (“Employment Agreement”);

NOW THEREFORE, in consideration for receiving benefits and severance under the Employment Agreement
and in consideration of the representations, covenants and promises set forth in this Agreement,
the parties agree as follows:

	1.	 	Release. Except with respect to the Company’s obligations under the Employment
Agreement, the Executive, and Executive’s heirs, executors, assigns, agents, legal
representatives, and personal representatives, hereby releases, acquits and forever discharges
the Company, its agents, subsidiaries, affiliates, and their respective officers, directors,
agents, servants, employees, attorneys, shareholders, successors, assigns and affiliates, of
and from any and all claims, liabilities, demands, causes of action, costs, expenses,
attorneys fees, damages, indemnities and obligations of every kind and nature, in law, equity,
or otherwise, known and unknown, suspected and unsuspected, disclosed and undisclosed, arising
out of or in any way related to agreements, events, acts or conduct at any time prior to the
day prior to execution of this Agreement, including but not limited to any and all such claims
and demands directly or indirectly arising out of or in any way connected with the Executive’s
employment with the Company; the Executive’s termination of employment with the Company;
claims or demands related to salary, bonuses, commissions, stock, stock options, or any other
ownership interests in the Company, vacation pay, fringe benefits, expense reimbursements,
sabbatical benefits, severance benefits, or any other form of compensation or equity; claims
pursuant to any federal, state, local law, statute, ordinance or cause of action including,
but not limited to, the federal Civil Rights Act of 1964, as amended; the federal Age
Discrimination in Employment Act of 1967, as amended; the federal Americans with Disabilities
Act of 1990; tort law; contract law; wrongful discharge; discrimination; fraud; defamation;
harassment; emotional distress; or breach of the implied covenant of good faith and fair
dealing. This Release does not apply to the payment of any benefits to which the Executive
may be entitled under a Company sponsored tax qualified retirement or savings plan, nor to any
rights of the Executive to indemnification under the Articles of Incorporation or by-laws of
the Company or other agreement between Executive and the Company, nor to any rights of the
Executive under any directors’ and officers’ liability insurance policy maintained by the
Company.

	 
	2.	 	No Inducement. Executive agrees that no promise or inducement to enter into this
Agreement has been offered or made except as set forth in this Agreement, that the Executive
is entering into this Agreement without any threat or coercion and without reliance or any
statement or representation made on behalf of the Company or by any person employed by or
representing the Company, except for the written provisions and promises contained in this
Agreement.

 

 

 

	3.	 	Damages. The parties agree that damages incurred as a result of a breach of this
Agreement will be difficult to measure. It is, therefore, further agreed that, in addition to
any other remedies, equitable relief will be available in the case of a breach of this
Agreement. It is also agreed that, in the event Executive files a claim against the Company
with respect to a claim released by Executive herein (other than a proceeding before the
EEOC), the Company may withhold, retain, or require reimbursement of all or any portion of the
benefits and severance payments under the Severance Agreement until such claim is withdrawn by
Executive.

	 
	4.	 	Advice of Counsel; Time to Consider; Revocation. Executive acknowledges the
following:

	 	(a)	 	Executive has read this Agreement, and understands its legal
and binding effect. Executive is acting voluntarily and of Executive’s own
free will in executing this Agreement.

	 
	 	(b)	 	Executive has been advised to seek and has had the opportunity
to seek legal counsel in connection with this Agreement.

	 
	 	(c)	 	Executive was given at least 21 days to consider the terms of
this Agreement before signing it.

Executive understands that, if Executive signs the Agreement, Executive may revoke it within
seven days after signing it. Executive understands that this Agreement will not be
effective until after the seven-day period has expired; provided, however, that if Executive
shall revoke this Agreement, Executive shall be obligated to return to the Company all
payments made to Executive pursuant to the Employment Agreement that were contingent upon
the execution and delivery of this Agreement.

	5.	 	Severability. If all or any part of this Agreement is declared by any court or
governmental authority to be unlawful or invalid, such unlawfulness or invalidity shall not
invalidate any other portion of this Agreement. Any section or a part of a section declared
to be unlawful or invalid shall, if possible, be construed in a manner which will give effect
to the terms of the section to the fullest extent possible while remaining lawful and valid.

	 
	6.	 	Amendment. This Agreement shall not be altered, amended, or modified except by
written instrument executed by the Company and the Executive. A waiver of any portion of this
Agreement shall not be deemed a waiver of any other portion of this Agreement.

	 
	7.	 	Counterparts. This Agreement may be executed in several counterparts, each of which
shall be deemed to be an original, but all of which together will constitute one and the same
instrument.

	 
	8.	 	Headings. The headings of this Agreement are not part of the provisions hereof and
shall not have any force or effect.

 

B-2

 

	9.	 	Applicable Law. The provisions of this Agreement shall be interpreted and construed
in accordance with the laws of the Commonwealth of Kentucky without regard to its choice of
law principles.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the dates specified below.

	 	 	 	 	 	 	 	 	 
	 	 	EXECUTIVE
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	 	 	DATE:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	VENTAS, INC.
	 
	 	 	 	 	 	 	 	 
	 

	 	BY:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	TITLE:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	DATE:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

 

B-3

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