Exhibit 10.23

 

SHAREHOLDERS AGREEMENT

 

by and among

AFFILIATES INSURANCE COMPANY,

 

FIVE STAR QUALITY CARE, INC.,

 

HOSPITALITY PROPERTIES TRUST,

 

HRPT PROPERTIES TRUST,

 

SENIOR HOUSING PROPERTIES TRUST,

 

TRAVELCENTERS OF AMERICA LLC

 

and

 

REIT MANAGEMENT & RESEARCH LLC

 

February 27, 2009

 

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TABLE OF CONTENTS

 

 

 

Page

ARTICLE I

 

 

 

INVESTMENT IN THE COMPANY; FORMATION AND LICENSING EXPENSES

 

1.1

Purchase and Sale of Shares

 

2

1.2

Future Share Issuances

 

2

1.3

Formation and Licensing Expenses

 

2

 

 

 

ARTICLE II

 

 

 

BOARD COMPOSITION

 

 

 

2.1

Board Composition

 

2

 

 

 

ARTICLE III

 

 

 

TRANSFER OF SHARES;

PREEMPTIVE RIGHTS; CALL RIGHTS

 

 

 

3.1

Transfer of Shares; No Pledging of Shares

 

3

3.2

Preemptive Rights

 

4

3.3

Change of Control Call Option

 

6

3.4

Permitted New Issuance of Shares

 

9

 

 

 

ARTICLE IV

 

 

 

SPECIAL SHAREHOLDER APPROVAL REQUIREMENTS.

 

 

 

4.1

Special Shareholder Approval Requirements

 

9

 

 

 

ARTICLE V

 

 

 

OTHER COVENANTS AND AGREEMENTS

 

 

 

5.1

Organizational Documents

 

10

5.2

Reports and Information Access

 

10

5.3

Compliance with Laws

 

10

5.4

Cooperation; Further Assurances

 

11

5.5

Confidentiality

 

11

5.6

Required Regulatory Approvals

 

11

5.7

REIT Matters

 

12

 

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ARTICLE VI

 

 

 

REPRESENTATIONS AND WARRANTIES

 

 

 

6.1

The Company

 

12

6.2

The Shareholders

 

14

 

 

 

ARTICLE VII

 

 

 

TERMINATION

 

 

 

7.1

Termination

 

15

 

 

 

ARTICLE VIII

 

 

 

MISCELLANEOUS

 

 

 

8.1

Notices

 

16

8.2

Successors and Assigns; Third Party Beneficiaries

 

17

8.3

Amendment and Waiver

 

17

8.4

Counterparts

 

18

8.5

Headings

 

18

8.6

Governing Law

 

18

8.7

Dispute Resolution

 

18

8.8

Interpretation and Construction

 

19

8.9

Severability

 

20

8.10

Entire Agreement

 

20

8.11

Non-liability of Trustees and Directors

 

20

 

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SHAREHOLDERS AGREEMENT

 

AFFILIATES INSURANCE COMPANY

 

This Shareholders Agreement (this “Agreement”), dated February 27, 2009, by and
among Affiliates Insurance Company, a company being formed and licensed as an
insurance company in the State of Indiana (the “Company”), Five Star Quality
Care, Inc., a Maryland corporation (“FVE”), Hospitality Properties Trust, a
Maryland real estate investment trust (“HPT”), HRPT Properties Trust, a Maryland
real estate investment trust (“HRP”), Senior Housing Properties Trust, a
Maryland real estate investment trust (“SNH”), TravelCenters of America LLC, a
Delaware limited liability company (“TA”), and Reit Management & Research LLC, a
Delaware limited liability company (“RMR”, and together with FVE, HPT, HRP, SNH
and TA, the “Shareholders”).

 

RECITALS

 

WHEREAS, the Company has been formed as an insurance company domiciled in the
State of Indiana; and

 

WHEREAS, the Shareholders have agreed to make capital contributions to the
Company as further detailed in this Agreement and that as of the funding of
those capital contributions as provided in this Agreement the Shareholders will
be the sole shareholders of the Company; and

 

WHEREAS, the Shareholders and the Company desire to enter into this Agreement in
order to set forth certain agreements and understandings relating to the
business and governance of the Company, the Shares (as defined herein) held by
the Shareholders and certain other matters;

 

NOW, THEREFORE, in consideration of the premises, representations, warranties,
covenants and agreements contained in this Agreement and of other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound, hereby agree as
follows:

 

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ARTICLE I

 

INVESTMENT IN THE COMPANY; FORMATION AND LICENSING EXPENSES

 

1.1                                 Purchase and Sale of Shares.

 

(a)                                  Concurrently with the execution and
delivery of this Agreement by the Company and the Shareholders, the Company
shall issue and sell to each Shareholder, and each Shareholder shall purchase
from the Company, 100 shares of common stock, par value of $10.00 per share, of
the Company (the “Shares”) at a purchase price of $250.00 per Share.

 

(b)                                 Within five business days after the Company
notifies the Shareholders that the Department of Insurance of the State of
Indiana has notified the Company that it intends to commence its financial
review of the Company, the Company shall issue and sell to each Shareholder, and
each Shareholder shall purchase from the Company, an additional 19,900 Shares at
a purchase price of $250.00 per Share.

 

1.2                                 Future Share Issuances.  No Shareholder
shall be obligated to purchase additional Shares or any other securities of the
Company and any future proposed issuance and sale of Shares or any other
securities of the Company shall be subject to Section 3.2; provided, however,
that the parties hereto acknowledge that the Company may need to seek additional
capital in the future and that it is the intention of the Shareholders that they
each may, but shall not be obligated to, contribute to the Company up to an
additional $5 million of capital during the period between the second and fifth
anniversaries of the date of this Agreement.

 

1.3                                 Formation and Licensing Expenses.  The
Company shall pay for all costs, fees and expenses in connection with the
formation and licensing of the Company as an Indiana insurance company.  The
Shareholders shall reimburse the Company for such amounts paid by the Company in
equal proportion.

 

ARTICLE II

 

BOARD COMPOSITION

 

2.1                                 Board Composition.

 

(a)                                  For as long as the Shareholders
collectively own a majority of the issued and outstanding Shares, the board of
directors of the Company (the “Board”) shall consist of not less than five nor
more than fifteen members, with the actual number determined in accordance with
the Bylaws of the Company, as in effect from time to time, and subject in all
instances to this Section 2.1.  As of the date of this Agreement, the Board
shall initially consist of thirteen members.  For so long as required by
applicable Indiana law, at least one member of the Board shall be an Indiana
resident.  Except as otherwise provided in Section 2.1(c), no Shareholder having
a right to designate any director pursuant to this Article II shall be required
to designate an Indiana resident as a director pursuant to such right; provided,
however, that this sentence shall in no way limit the application of the
immediately preceding sentence.

 

2

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(b)                                 For so long as a Shareholder (other than
RMR) owns not less than 10% of the issued and outstanding Shares, such
Shareholder shall have the right to designate two directors for election to the
Board.

 

(c)                                  For so long as RMR owns not less than 10%
of the issued and outstanding Shares, RMR shall have the right to designate
three directors for election to the Board.  For so long as RMR has the right to
designate directors pursuant to the immediately preceding sentence, Indiana law
requires the Board to include an Indiana resident as a director of the Company
and no other Shareholder designates an Indiana resident as a director of the
Company, RMR shall designate at least one Indiana resident to be a director.

 

(d)                                 Each Shareholder will vote, execute and
deliver written consents and take all other necessary action (including, if
necessary, causing the Company to call a special meeting of shareholders of the
Company) in favor of the election of each director designated by a Shareholder
in accordance with this Article II and otherwise to ensure that the composition
of the Board is at all times as set forth in this Article II.  Each Shareholder
agrees that it will not vote any of its Shares in favor of removal of any
director designated by another Shareholder unless such other Shareholder shall
have consented to such removal in writing.  Each Shareholder agrees to cause to
be called, if necessary, a special meeting of shareholders of the Company and to
vote all the Shares owned by such Shareholder for, or to take all actions in
lieu of any such meeting necessary to cause, the removal of any director
designated by such Shareholder if the Shareholder entitled to designate such
director requests in writing, signed by such Shareholder, such director’s
removal for any reason or no reason.

 

(e)                                  If, as a result of death, disability,
retirement, resignation, removal or otherwise, there shall exist or occur any
vacancy with respect to any director previously designated by a Shareholder in
accordance with such Shareholder’s right under this Article II to so designate
such director, such Shareholder shall have the right to designate a replacement
director.  Upon such designation, the Shareholders shall promptly take all
action necessary to ensure the election of such replacement director to fill the
unexpired term of the director whom such new director is replacing, including,
if necessary, calling a special meeting of shareholders of the Company and
voting their Shares, or executing any written consent in lieu thereof, in favor
of the election of such director.

 

ARTICLE III

 

TRANSFER OF SHARES;

PREEMPTIVE RIGHTS; CALL RIGHTS

 

3.1                                 Transfer of Shares; No Pledging of Shares.

 

(a)                                  The Shareholders may not, directly or
indirectly, transfer any Shares, except that a Shareholder may transfer Shares
owned by it to a wholly owned subsidiary of such Shareholder, to another
Shareholder or to a wholly owned subsidiary of another Shareholder.  Any
purported transfer of Shares in contravention of this Section 3.1 shall be null
and void and of no force or effect.

 

3

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(b)                                 The Shareholders may not pledge their Shares
(other than pledges arising from the operation of law and not as a result of the
Shareholder’s express granting of a pledge); provided, however, that any pledge
or other lien, charge or encumbrance which may arise by application of the terms
of any agreement, contract, license, permit or instrument existing on the date
hereof (an “Existing Pledge”) on a Shareholder’s Shares shall not be a violation
of this Section 3.1(b); and provided further, however, any transfer which
results from exercise of rights under a permitted lien, charge or encumbrance
shall be subject to the call rights of the Company and the other Shareholders
set forth in Section 3.3 to the fullest extent permitted by applicable law and
existing contracts as if such a transfer constitutes a “Change of Control”.  Any
Shareholder whose Shares would be subject to an Existing Pledge shall use best
efforts to cause the pledgee under an Existing Pledge, prior to any exercise by
the pledgee of its rights on the Shareholder’s Shares, to take all actions under
applicable law which are required to be taken prior to any such exercise,
including obtaining any necessary approvals from the Indiana Department of
Insurance and Indiana Insurance Commissioner.

 

3.2                                 Preemptive Rights.

 

(a)                                  If, at any time after the date hereof, the
Company wishes to issue any capital stock of the Company or any other securities
convertible into or exchangeable or exercisable for capital stock of the Company
(collectively, “New Securities”) to any person or entity (the “Subject
Purchaser”), then the Company shall first offer the Appropriate Percentage (as
defined herein) of the New Securities (the “Allocated Shares”) to each
Shareholder (each, a “Preemptive Rightholder” and collectively, the “Preemptive
Rightholders”) by sending written notice (the “New Issuance Notice”) to each of
the Preemptive Rightholders, which New Issuance Notice shall state the terms of
such proposed issuance, including the number of New Securities proposed to be
issued and the proposed purchase price per security of the New Securities (the
“Proposed Price”).  Upon delivery of the New Issuance Notice, such offer shall
be irrevocable unless and until the Company shall have terminated the
contemplated issuance of New Securities in its entirety at which time the rights
set forth herein shall be applicable to any proposed issuance subsequent to any
such termination.  For purposes of this Section 3.2, “Appropriate Percentage”
shall mean that percentage of the New Securities determined by dividing (i) the
total number of Shares then owned by a Preemptive Rightholder by (ii) the total
number of Shares owned by all the Preemptive Rightholders.

 

(b)                                 For a period of 20 days after the giving of
the New Issuance Notice pursuant to Section 3.2(a) (the “Initial Preemptive
Subscription Period”), each of the Preemptive Rightholders shall have the right
to purchase, in whole or in part, the Allocated Shares offered to such
Preemptive Rightholder as determined pursuant to Section 3.2(a) at a purchase
price equal to the Proposed Price and upon the terms and conditions set forth in
the New Issuance Notice.

 

(c)                                  The right of each Preemptive Rightholder to
purchase the New Securities so offered under Section 3.2(b) shall be exercisable
by delivering written notice of the exercise thereof, prior to the expiration of
the Initial Preemptive Subscription Period, to the Company, which notice shall
state the amount of New Securities that such Preemptive Rightholder elects to
purchase pursuant to Section 3.2(a).  The failure of a Preemptive Rightholder to
respond prior to the expiration of the Initial Preemptive Subscription Period
shall be deemed to be a waiver of such Preemptive Rightholder’s rights under
this Agreement solely

 

4

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with respect to its right to purchase the New Securities referenced in the New
Issuance Notice; provided that each Preemptive Rightholder may waive its rights
under Section 3.2(b) prior to the expiration of Initial Preemptive Subscription
Period by giving written notice of such waiver to the Company.

 

(d)                       If as of the expiration of the Initial Preemptive
Subscription Period, some but not all of the Preemptive Rightholders have
exercised their right to purchase the full amount of New Securities to which
they are entitled to purchase pursuant to Sections 3.2(b) and (c) (any such
Preemptive Rightholder which has exercised in full its rights to purchase such
New Securities, a “Fully Exercising Preemptive Rightholder”), the Fully
Exercising Preemptive Rightholders shall have the right to purchase, in whole or
in part, their Oversubscription Appropriate Percentage (as defined herein) of
the New Securities which the Preemptive Rightholders did not exercise their
right to purchase pursuant to Sections 3.2(b) and (c) (the “Undersubscribed
Shares”) at a purchase price equal to the Proposed Price and upon the terms and
conditions set forth in the New Issuance Notice.  The right of the Fully
Exercising Preemptive Rightholders to purchase the Undersubscribed Shares may be
exercised for a period of ten days following the earlier of the expiration of
the Initial Preemptive Subscription Period or the date on which notice is given
by the Company to such Fully Exercising Preemptive Rightholders that all the
Preemptive Rightholders have either exercised their right to purchase the New
Securities pursuant to Sections 3.2(b) and (c) or waived their rights to
purchase any of such New Securities pursuant to Section 3.2(c) (the
“Oversubscription Period”).  For purposes of this Section 3.2, “Oversubscription
Appropriate Percentage” shall mean that percentage of the Undersubscribed Shares
determined by dividing (i) the total number of Shares then owned by a Fully
Exercising Preemptive Rightholder by (ii) the total number of Shares owned by
all the Fully Exercising Preemptive Rightholders.

 

(e)                        The right of each Fully Exercising Preemptive
Rightholder to purchase Undersubscribed Shares pursuant to Section 3.2(d) shall
be exercisable by delivering written notice of the exercise thereof, prior to
the expiration of the Oversubscription Period, to the Company, which notice
shall state the amount of Undersubscribed Shares that such Fully Exercising
Preemptive Rightholder elects to purchase pursuant to Section 3.2(d).  The
failure of a Fully Exercising Preemptive Rightholder to respond prior to the
expiration of the Oversubscription Period shall be deemed to be a waiver of such
Fully Exercising Preemptive Rightholder’s rights under this Agreement solely
with respect to its right to purchase the Undersubscribed Shares included in the
New Securities referenced in the New Issuance Notice; provided that each Fully
Exercising Preemptive Rightholder may waive its rights under
Section 3.2(d) prior to the expiration of Oversubscription Period by giving
written notice of such waiver to the Company.

 

(f)                          The closing of the purchase of New Securities
subscribed for by the Preemptive Rightholders, including the Fully Exercising
Preemptive Rightholders, pursuant to this Section 3.2 shall be held at such time
and place as the parties to the transaction may reasonably agree.  At such
closing, the New Securities subscribed for shall be issued by the Company free
and clear of all liens, charges or encumbrances (other than those arising
hereunder and those attributable to actions by the purchasers thereof).  Each
Preemptive Rightholder, including each Fully Exercising Preemptive Rightholder,
purchasing the New Securities shall deliver at the closing payment in full in
immediately available funds for the New Securities

 

5

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purchased by it.  At such closing, all of the parties to the transaction shall
execute such additional documents as are otherwise necessary, appropriate or
customary for similar financing transactions.  If any Preemptive Rightholder,
including any Fully Exercising Preemptive Rightholder, fails to purchase any New
Securities for which it exercised its right to purchase pursuant to Sections
3.2(b) and (c) or 3.2(d) and (e), such New Securities may be purchased by the
Fully Exercising Preemptive Rightholders which did purchase all the New
Securities for which they exercised their rights to purchase pursuant to
Sections 3.2(b), (c), (d) and (e) in the same manner provided in this
Section 3.2 with respect to Undersubscribed Shares and the resulting
Oversubscription Period with respect to such right to purchase shall be an
“Oversubscription Period” for all instances such term is used in this
Section 3.2.  Notwithstanding the preceding sentence, the obligations and
liability of any Preemptive Rightholder, including any Fully Exercising
Preemptive Rightholder, which fails to purchase any New Securities for which it
exercised its right to purchase pursuant to Sections 3.2(b) and (c) or
3.2(d) and (e) shall not be relieved as a result of any Fully Exercising
Preemptive Rightholder’s right to purchase, or any actual purchase by any Fully
Exercising Preemptive Rightholder of, any such New Securities.

 

(g)                       Following the expiration of the later of the Initial
Preemptive Subscription Period and, if applicable, the Oversubscription Period,
if the Preemptive Rightholders, including any Fully Exercising Preemptive
Rightholders, did not exercise their right to purchase any of the New
Securities, including the Undersubscribed Shares, which were originally the
subject of the New Issuance Notice, then the Company may sell the remaining New
Securities to the Subject Purchaser on terms and conditions that are no more
favorable to the Subject Purchaser than those set forth in the New Issuance
Notice; provided, however, that such sale is bona fide and made pursuant to a
contract entered into between the Company and the Subject Purchaser and that
such sale is consummated by not later than 90 days following the earlier to
occur of (i) receipt by the Company of written waivers pursuant to
Section 3.2(c) from all the Preemptive Rightholders of their rights to purchase
the Appropriate Percentage of New Securities and, if applicable, written waivers
pursuant to Section 3.2(e) from all the Fully Exercising Preemptive Rightholders
of their rights to purchase the Oversubscription Appropriate Percentage of New
Securities, and (ii) the expiration of the Oversubscription Period, if
applicable, and if not applicable, the expiration of the Initial Preemptive
Subscription Period.  If the sale of any of the New Securities is not
consummated by the expiration of such 90 day period, then the preemptive rights
afforded to the Shareholders under this Section 3.2 shall again become
effective, and no issuance and sale of New Securities may be made thereafter by
the Company without again offering the same in accordance with this Section 3.2.

 

3.3                                 Change of Control Call Option.

 

(a)                        By not later than five days following a Change of
Control (as defined herein or in Section 3.1(b)) of any Shareholder, such
Shareholder shall give the Company and each other Shareholder notice of such
Change of Control and shall disclose the number of Shares and any other
securities of the Company which were owned by the Shareholder as of immediately
prior to such Change of Control of such Shareholder (the “Change of Control
Securities”).  If the Shareholder fails to give the notice required by the
preceding sentence by the time required thereby, and another Shareholder or the
Company is or becomes aware that such Shareholder underwent a Change of Control,
then (i) if it is a

 

6

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Shareholder that is or becomes aware of such Change of Control, that Shareholder
shall reasonably promptly inform the Company of such Change of Control and upon
the Company being of the reasonable belief that such a Change of Control has
occurred, the Company shall reasonably promptly provide the notice to the
Shareholders that such Shareholder which underwent the Change of Control failed
to provide, or (ii) if it is the Company that is or becomes aware of such Change
of Control, the Company shall reasonably promptly provide the notice that such
Shareholder which underwent the Change of Control failed to provide.  Any
liability of a Shareholder which undergoes a Change of Control for failure to
give the notice required by the first sentence of this Section 3.3(a) shall not
be relieved as a result of the Company or any other Shareholder being obligated
to give, or giving, the notice required by the second sentence of this
Section 3.3(a).

 

(b)                       For a period of 20 days following the receipt of a
notice given pursuant to Section 3.3(a), the Company shall have the right to
purchase from such Shareholder (or its successor, as applicable), in whole or in
part, the Change of Control Securities.  The purchase price for the Change of
Control Securities shall be the book value, as determined in accordance with the
statutory accounting principles applicable to the Company, of the Change of
Control Securities as of the time such Shareholder underwent the Change of
Control (the “Call Option Purchase Price”).  To exercise its right to purchase
the Change of Control Securities, the Company shall deliver written notice of
such exercise to the Shareholder which underwent the Change of Control and the
other Shareholders prior to the expiration of such 20 day call exercise period. 
The closing for any such exercised call option shall occur on the fifth business
day (or such longer period as may be required by applicable law or in order to
obtain applicable regulatory approval) following receipt of the Company’s notice
of exercise of its call option by the Shareholder which underwent the Change of
Control, or on such other date as may be agreed by the Company and such
Shareholder.  At its option, the Company may pay in cash the entire amount of
the Call Option Purchase Price at such closing or it may elect to defer any
amount of the Call Option Purchase Price.  Any amounts so deferred shall bear
interest at the Deferred Interest Rate (as defined herein).  The Company may pay
any such deferred amounts and accrued interest thereon at any time and from time
to time; provided, however, that all such deferred amounts and accrued but
unpaid interest, shall be due and payable on the fifth anniversary of the
closing of the applicable call option exercise.

 

(c)                        Shareholders other than the Shareholder which
underwent the Change of Control shall have the right to purchase, in whole or in
part, any Change of Control Securities not elected to be purchased by the
Company pursuant to Section 3.3(b) at a price equal to the Call Option Purchase
Price.  To exercise its right to purchase the Change of Control Securities, the
applicable Shareholder shall deliver written notice of such exercise to the
Shareholder which underwent the Change of Control, the Company and the other
Shareholders by not later than the 20 days following the earlier of (i) the
expiration of the 20 day period during which the Company has the right to
exercise its call option for the Change of Control Securities pursuant to
Section 3.3(b) and (ii) the date the Company waives its right to purchase such
Change of Control Securities and has given notice of the same to all the
Shareholders (such deadline for exercising a right to purchase Change of Control
Securities referred to as the “Call Option Exercise Deadline”).  The notice of
exercise shall indicate the number of Change of Control Securities that the
Shareholder seeks to purchase.  If the aggregate number of Change of Control
Securities sought to be purchased by the exercising Shareholders (determined by
adding

 

7

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all the eligible securities each Shareholder states it seeks to purchase in its
notice of exercise) exceeds the actual number of Change of Control Securities
eligible for purchase, the number of Change of Control Securities which may be
purchased by a particular applicable Shareholder shall be reduced by an amount
equal to the product of the aggregate number of such excess Change of Control
Securities sought to be purchased by all the exercising Shareholders multiplied
by the quotient of (x) the number of Shares owned by all eligible Shareholders
which are exercising their call option rights minus the number of Shares owned
by the particular applicable exercising Shareholder divided by (y) the number of
Shares owned by all eligible Shareholders which are exercising their call option
rights, with any such result rounded up or down to the nearest whole share as
reasonably determined by the Company.  The closing of any such exercised call
option shall occur on the fifth business day (or such longer period as may be
required by applicable law or in order to obtain applicable regulatory approval)
following the Call Option Exercise Deadline, or on such other date as may be
agreed by the exercising Shareholder, the Company and the Shareholder which
underwent the Change of Control.  At its option, the exercising Shareholder may
pay in cash the entire amount of the Call Option Purchase Price at such closing
or it may elect to defer any amount of the Call Option Purchase Price.  Any
amounts so deferred shall bear interest at the Deferred Interest Rate.  The
exercising Shareholder may pay any such deferred amounts and accrued interest
thereon at any time and from time to time; provided, however, that all such
deferred amounts and accrued but unpaid interest, shall be due and payable on
the fifth anniversary of the closing of the applicable call option exercise.

 

(d)                       Definitions.  For purposes of this Section 3.3, the
following terms have the meanings set forth below:

 

(i)             “Change of Control” means (A) the acquisition by any person or
entity, or two or more persons or entities acting in concert, of beneficial
ownership (such term, for purposes of this Section 3.3(d)(i), having the meaning
provided such term in Rule 13d-3 under the Securities Exchange Act of 1934, as
amended) of 9.8% or more, or rights, options or warrants to acquire 9.8% or
more, or any combination thereof, of the outstanding shares of voting stock or
other voting interests of the Shareholder, including voting proxies for such
shares, or the power to direct the management and policies of the Shareholder,
directly or indirectly, excluding with respect to RMR, any person or entity, or
two or more persons or entities acting in concert, beneficially owning 9.8% or
more of RMR’s outstanding voting interests as of the date of this Agreement,
(B) the merger or consolidation of the Shareholder with or into any other person
or entity (other than the merger or consolidation of any person or entity into
the Shareholder that does not result in a Change in Control of the Shareholder
under clauses (A), (C), (D) or (E) of this definition), (C) any one or more
sales or conveyances to any person or entity of all or any material portion of
the assets (including capital stock or other equity interests) or business of
the Shareholder, (D) the cessation, for any reason, of the individuals who at
the beginning of any 38 consecutive month period constituted the board of
directors (or analogous governing body) of the Shareholder (together with any
new directors (or analogous position) whose election by such board or whose
nomination for election by the shareholders of the Shareholder was approved by a
vote of a majority of the directors (or analogous position) then still in office
who were either directors (or analogous position) at the beginning of any such
period or whose election or nomination

 

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for election was previously so approved) to constitute a majority of the board
of directors (or analogous governing body) of the Shareholder then in office or
(E) in respect of a Shareholder other than RMR, the termination (including by
means of nonrenewal) of the Shareholder’s management agreement with RMR by such
Shareholder or, in response to a breach of such agreement by such Shareholder,
by RMR; provided, however, a Change of Control shall not include:  (1) the
acquisition by any person or entity, or two or more persons or entities acting
in concert, of beneficial ownership of 9.8% or more of the outstanding shares of
voting stock or other voting interests of a Shareholder if such acquisition is
approved by the governing board of such Shareholder in accordance with the
organizational documents of such Shareholder and if such acquisition is
otherwise in compliance with applicable law; (2) the merger or consolidation of
a Shareholder with one or more other Shareholders or wholly owned subsidiaries
of any such Shareholders; or (3) a Change of Control which is approved by
Shareholders owning 75% of the Shares owned by all Shareholders.

 

(ii)          “Deferred Interest Rate” means the London Interbank Offered Rate
(rounded upward, if necessary, to the nearest 1/100th of 1%) appearing on
Reuters Screen LIBO Page (or any successor page) as the London interbank offered
rate for three month deposits in U.S. dollars at approximately 11:00 a.m.
(London time) two days prior to applicable closing date (provided that if more
than one rate is specified on Reuters Screen LIBO Page, the applicable rate
shall be the arithmetic mean of all such rates), plus 100 basis points, and this
rate shall be adjusted in three month intervals thereafter, in accordance with
the foregoing, with such adjustment date being treated as an “applicable closing
date” for purposes of determining the adjusted rate in accordance with the
foregoing, for so long as any deferred amount pursuant to Sections 3.2(b) or
3.2(c) may be unpaid.

 

3.4                                 Permitted New Issuance of Shares.  The
prohibition on transfer of Shares, the preemptive rights and the change of
control call options created by Sections 3.1, 3.2 and 3.3 of this Article III
shall not apply to any sale of Shares by the Company, or by any Shareholder or
Shareholders, if the Shares are sold to an entity which is managed by RMR that
purchases insurance from the Company, provided that any such sale does not
reduce the ownership of any Shareholder to less than ten percent (10%) of the
Company’s outstanding voting Shares.

 

ARTICLE IV

 

SPECIAL SHAREHOLDER APPROVAL REQUIREMENTS.

 

4.1                                 Special Shareholder Approval
Requirements.  For so long as the Shareholders beneficially own a majority of
the Company’s issued and outstanding Shares, no action by the Company shall be
taken with respect to any of the following matters without the prior affirmative
approval of Shareholders owning 75% of the Shares owned by all the Shareholders:

 

(a)                        any amendment to the articles of incorporation or
bylaws of the Company;

 

9

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(b)                       any merger of the Company;

 

(c)                        the sale of all or substantially all of the Company’s
assets;

 

(d)                       any reorganization or recapitalization of the Company;
or

 

(e)                        any liquidation or dissolution of the Company.

 

If applicable law permits any of the foregoing actions to be taken by the
Company without a shareholders vote, the vote of all directors of the Company
designated by a Shareholder shall be considered the vote of the Shareholder for
purposes of any such action.

 

ARTICLE V

OTHER COVENANTS AND AGREEMENTS

 

5.1                                 Organizational Documents.  Subject to
applicable law, each Shareholder shall vote its Shares or execute any consents
necessary, and shall take all other actions necessary, to ensure that the
Company’s organizational documents facilitate, and do not at any time conflict
with any provision of, this Agreement or any applicable law, and to ensure that
the provisions hereof are implemented notwithstanding any inconsistent provision
in the Company’s organizational documents.  The parties hereto agree to amend,
if necessary, the Company’s organizational documents to conform to the
provisions set forth in this Agreement, to the extent permitted by applicable
law.  In the event of any actual or apparent inconsistency between this
Agreement and the organizational documents, then, as among the Shareholders, to
the extent permitted by applicable law, this Agreement shall control.

 

5.2                                 Reports and Information Access.  For so long
as a Shareholder owns not less than 10% of all the issued and outstanding
Shares, the Company shall provide periodically, through the
director(s) designated by such Shareholder under Section 2.1, to the Shareholder
financial information regarding the Company and its operations and the Company
shall permit the Shareholder and its representatives reasonable access to the
financial reports and records of the Company so that the Shareholder may comply
with its financial reporting and tax reporting obligations and procedures, and
disclosure obligations under the federal securities laws and other applicable
laws.

 

5.3                                 Compliance with Laws.  The Company shall
comply in all material respects with all applicable laws governing its business
and operations.  Except as provided in Section 5.7, if a Shareholder, by virtue
of such Shareholder’s ownership interest in the Company or actions taken by the
Shareholder affecting the Company, triggers the application of any requirement
or regulation of any federal, state, municipal or other governmental or
regulatory body on the Company or any subsidiary of the Company or any of their
respective businesses, assets or operations, including any obligations to make
any filing with or otherwise notifying or obtaining the consent, approval or
other action of any federal, state, municipal or other governmental or
regulatory body, such Shareholder shall promptly take all actions necessary and
fully cooperate with the Company to ensure that such requirements or regulations
are satisfied without restricting, imposing additional obligations on or in any
way limiting the business, assets,

 

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operations or prospects of the Company or any subsidiary of the Company.  Each
Shareholder shall use best efforts to cause its shareholders, directors (or
analogous position), nominees for director (or analogous position), officers,
employees and agents to comply with any applicable laws impacting the Company or
any of its subsidiaries or their respective businesses, assets or operations.

 

5.4                                 Cooperation; Further Assurances.

 

(a)                        The Shareholders shall cooperate with each other and
the Company in furtherance of the Company’s underwriting of insurance policies
and coverage with respect to the Shareholders and their respective businesses,
assets and properties as well as in furtherance of the development and execution
of the Company’s business as an insurer.  The Shareholders intend to transition
(but shall not be obligated to do so) their applicable insurance policies and
coverage to the Company so that the Company or its third party agents or
contracting parties shall become the underwriters of such current and future
policies and coverage.

 

(b)                       Each of the parties shall execute such documents and
perform such further acts (including obtaining any consents, exemptions,
authorizations or other actions by, or giving any notices to, or making any
filings with, any governmental authority) as may be reasonably required or
desirable to carry out or to perform the provisions of this Agreement or the
transactions contemplated hereby, including in connection with any subsequent
exercise by a party of a right afforded hereunder to such party.

 

5.5                                 Confidentiality.  Except as may be required
by applicable law or the rules of any national securities exchange upon which a
party’s shares are listed for trading, none of the parties hereto shall make any
disclosure concerning this Agreement, the transactions contemplated hereby or
the business, operations and financial affairs of the Company without prior
approval by the other parties hereto; provided, however, that nothing in this
Agreement shall restrict any of the parties from disclosing information (a) that
is already publicly available, (b) that was known to such party on a
non-confidential basis prior to any relevant disclosure, (c) that may be
required or appropriate in response to any summons or subpoena or in connection
with any litigation, provided that such party will use reasonable efforts to
notify the other party in advance of such disclosure so as to permit the other
party to seek a protective order or otherwise contest such disclosure, and such
party will use reasonable efforts to cooperate, at the expense of the other
party, with the other party in pursuing any such protective order, (d) to the
extent that such party reasonably believes it appropriate in order to protect
its investment in its Shares in order to comply with any applicable law, (e) to
such party’s officers, directors, trustees, advisors, employees, auditors or
counsel or (f) as warranted pursuant to the parties’ disclosure obligations
under federal securities laws.

 

5.6                                 Required Regulatory Approvals.  Certain
transactions required, permitted or otherwise contemplated by this Agreement may
under certain circumstances require prior filings with and approvals, or
non-disapprovals, from the Indiana Department of Insurance or the Indiana
Insurance Commissioner.  Such transactions include: (a) issuance or purchase of
any additional capital stock of the Company or other securities convertible into
or exchangeable or exercisable for capital stock of the Company pursuant to
Sections 1.2 or 3.4; (b) transfer of Shares to a wholly owned subsidiary of a
Shareholder, to another Shareholder or to a wholly

 

11

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owned subsidiary of another Shareholder pursuant to Sections 3.1(a) or 3.4;
(c) exercise of preemptive rights by a Shareholder pursuant to Section 3.2; and
(d) exercise of call rights by the Company or a Shareholder pursuant to
Section 3.3 (including pursuant to the two provisos in Section 3.1(b)). 
Notwithstanding anything to the contrary contained in this Agreement, any such
transactions requiring filings with and approvals, or non-disapprovals, from the
Indiana Department of Insurance or the Indiana Insurance Commissioner shall not,
to the extent within the control of a party hereto, be entered into or
consummated unless and until the required filings have been made and the
required approvals (or non-disapprovals) have been obtained, and to the extent
not within the control of an applicable party hereto, such party shall use best
efforts to cause such transactions not to be entered into or consummated unless
and until the required filings have been made and the required approvals (or
non-disapprovals) have been obtained.

 

5.7                                 REIT Matters.  At the request of any
Shareholder that intends (for itself or for any of its affiliates) to qualify
and be taxed as a real estate investment trust under the Internal Revenue Code
of 1986, as amended (the “Code”), the Company shall (a) join with such
Shareholder (or, as applicable, such Shareholder’s affiliate) in making a
“taxable REIT subsidiary” election under Section 856(l) of the Code and
(b) otherwise reasonably cooperate with any request of such Shareholder (or its
affiliate) pertaining to such real estate investment trust status or taxation
under the Code.

 

ARTICLE VI

 

REPRESENTATIONS AND WARRANTIES

 

6.1                                 The Company.  The Company represents and
warrants to each Shareholder, as of the date of this Agreement and as of the
date of the closing of the issuance, sale and purchase of Shares (unless any
such representation or warranty speaks as of another date, in which case, as of
such date) pursuant to Section 1.1(b), as follows:

 

(a)                        Organization, Existence, Good Standing and Power. 
The Company is an Indiana insurance company duly organized, validly existing and
in good standing under the laws of the State of Indiana and has the power and
authority to execute, deliver and perform its obligations under this Agreement.

 

(b)                       Capitalization; Subsidiaries.

 

(i)             As of immediately prior to the execution and delivery of this
Agreement, there are no securities of the Company issued and outstanding. 
Except as provided and contemplated by this Agreement, as of the date of this
Agreement, the Company has no commitment or arrangement to issue securities of
the Company to any person or entity.

 

(ii)          As of the date of this Agreement, the Company has no subsidiaries.

 

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(c)                        Valid Issuance of Shares.  The Shares being purchased
by the Shareholders hereunder, when issued, sold and delivered in accordance
with the terms of this Agreement for the consideration expressed herein, will be
duly and validly issued, fully paid and nonassessable, and will be free of
restrictions on transfer other than restrictions on transfer under this
Agreement and under applicable law.

 

(d)                       Binding Effect.  This Agreement has been duly executed
and delivered by the Company and constitutes the legal, valid and binding
obligations of the Company, enforceable against it in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, fraudulent conveyance or transfer, moratorium or similar laws
affecting the enforcement of creditors’ rights generally or by equitable
principles relating to enforceability (regardless of whether considered in a
proceeding at law or in equity).

 

(e)                        No Contravention.  The execution and delivery of this
Agreement by the Company and the performance of its obligations hereunder and
the consummation by the Company of the transactions contemplated by this
Agreement and compliance by the Company with the provisions of this Agreement
(i) have been duly authorized by all necessary company action, (ii) do not
contravene the terms of the Company’s organizational documents, (iii) do not
materially violate, conflict with or result in any breach or contravention of,
or the creation of any material lien, charge or encumbrance under, any material
agreement, contract, license, permit or instrument to which the Company is a
party or by which the Company or any of its assets or properties are bound and
(iv) do not materially violate any law, statute, regulation, order or decree
applicable to, or binding upon, the Company or any of its assets or properties.

 

(f)                          Consents.  No approval, consent, compliance,
exemption, authorization or other action by, or notice to, or filing with, any
local, state or federal governmental authority or any other person or entity
(individually and collectively, a “Consent”), not already obtained or made, and
no lapse of a waiting period under any applicable law, statute, regulation,
order or decree, is necessary or required in connection with the execution,
delivery or performance by the Company of this Agreement or the transactions
contemplated hereby; provided, however, that the foregoing representation and
warranty shall not apply to any Consent which may be required in the future as a
result of the application of the rights and obligations provided for hereunder
or the conducting of the Company’s business.

 

(g)                        Compliance with Laws.  The Company is in compliance
in all material respects with all applicable laws, statutes, regulations, orders
or decrees applicable to, or binding upon, the Company or any of its assets or
properties.

 

(h)                        Offering.  Subject to the accuracy of the
Shareholder’s representations and warranties set forth in Sections
6.2(f) through 6.2(i), the offer, sale and issuance of the Shares to be issued
in conformity with the terms of this Agreement constitute transactions which are
exempt from the registration requirements of the Securities Act of 1933, as
amended (the “Securities Act”), and from all applicable state registration or
qualification requirements.  Neither the Company nor any person or entity acting
on its behalf will take any action that would cause the loss of such exemption.

 

13

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(i)                            No Integration.  The Company has not, directly or
through any agent, sold, offered for sale, solicited offers to buy or otherwise
negotiated in respect of, any security (as defined in the Securities Act) which
is or will be integrated with the Shares sold pursuant to this Agreement in a
manner that would require the registration of the Shares under the Securities
Act.

 

6.2                                 The Shareholders.  Each Shareholder
represents and warrants to the Company and the other Shareholders, as of the
date of this Agreement and as of the date of the closing of the issuance, sale
and purchase of Shares pursuant to Section 1.1(b), as follows:

 

(a)                        Organization, Existence, Good Standing and Power. 
The Shareholder (i) is an entity duly organized, validly existing and in good
standing under the laws of the jurisdiction of its formation; (ii) has all
requisite power and authority to conduct the business in which it is currently
engaged; and (iii) has the power and authority to execute, deliver and perform
its obligations under this Agreement.

 

(b)                       Binding Effect.  This Agreement has been duly executed
and delivered by the Shareholder and constitutes the legal, valid and binding
obligations of the Shareholder, enforceable against it in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, fraudulent conveyance or transfer, moratorium or
similar laws affecting the enforcement of creditors’ rights generally or by
equitable principles relating to enforceability (regardless of whether
considered in a proceeding at law or in equity).

 

(c)                        No Contravention.  The execution and delivery of this
Agreement by the Shareholder and the performance of its obligations hereunder
and the consummation by the Shareholder of the transactions contemplated by this
Agreement and compliance by the Shareholder with the provisions of this
Agreement (i) have been duly authorized by all necessary company action, (ii) do
not contravene the terms of the Shareholder’s organizational documents, (iii) do
not materially violate, conflict with or result in any breach or contravention
of, or, except with respect to any Existing Pledge which the Shareholder or any
of its assets or properties may be subject, the creation of any material lien,
charge or encumbrance under, any material agreement, contract, license, permit
or instrument to which the Shareholder is a party or by which the Shareholder or
any of its assets or properties are bound and (iv) do not materially violate any
law, statute, regulation, order or decree applicable to, or binding upon, the
Shareholder or any of its assets or properties.

 

(d)                       Consents.  No Consent, not already obtained or made,
and no lapse of a waiting period under any applicable law, statute, regulation,
order or decree, is necessary or required in connection with the execution,
delivery or performance by the Shareholder of this Agreement or the transactions
contemplated hereby; provided, however, that the foregoing representation and
warranty shall not apply to any Consent which may be required in the future as a
result of the application of the rights and obligations provided for hereunder
or the conducting of the Company’s business.

 

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(e)                         Compliance with Laws.  The Shareholder is in
compliance in all material respects with all applicable laws, statutes,
regulations, orders or decrees applicable to, or binding upon, the Shareholder
or any of its assets or properties.

 

(f)                           Purchase Entirely for Own Account.  The Shares are
being acquired for investment for the Shareholder’s own account, not as a
nominee or agent, and not with a view to the resale or distribution of any part
thereof, and the Shareholder has no present intention of selling, granting any
participation with respect to or otherwise distributing the Shares.  The
Shareholder does not have any contract, undertaking, agreement or arrangement
with any person or entity to sell or transfer to any person or entity, or grant
participation rights to any person or entity with respect to, any of the Shares.

 

(g)                        Disclosure of Information.  The Shareholder has
received all the information from the Company and its management that the
Shareholder considers necessary or appropriate for deciding whether to purchase
the Shares hereunder.  The Shareholder further represents that it has had an
opportunity to ask questions and receive answers from the Company regarding the
Company, its financial condition, results of operations and prospects and the
terms and conditions of the offering of the Shares sufficient to enable it to
evaluate its investment.

 

(h)                        Investment Experience and Accredited Investor
Status.  The Shareholder is an “accredited investor” (as defined in Regulation D
under the Securities Act).  The Shareholder has such knowledge and experience in
financial or business matters that it is capable of evaluating the merits and
risks of the investment in the Shares to be purchased hereunder.

 

(i)                            Restricted Securities.    The Shareholder
understands that the Shares, when issued, shall be “restricted securities” under
the federal securities laws inasmuch as they are being acquired from the Company
in a transaction not involving a public offering and that under such laws the
Shares may be resold without registration under the Securities Act only in
certain limited circumstances.

 

ARTICLE VII

TERMINATION

 

7.1                                 Termination.  This Agreement shall remain in
full force and effect until the sooner of:  (a) its termination pursuant to the
next succeeding sentence of this Section 7.1 or (b) the dissolution of the
Company; provided, however, that the dissolution of the Company, the merger of
the Company with, or the transfer of all or substantially all the assets of the
Company to, another entity which continues substantially all of the Company’s
business shall not of itself terminate this Agreement.  This Agreement may be
terminated at any time by the Shareholders owning at least 75% of the issued and
outstanding Shares owned by all Shareholders.  Section 5.5 and Article VIII
shall survive any termination or expiration of this Agreement.

 

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ARTICLE VIII

MISCELLANEOUS

 

8.1                                 Notices.  Any notices or other
communications required or permitted under, or otherwise in connection with,
this Agreement shall be in writing and shall be deemed to have been duly given
when delivered in person, upon confirmation of receipt when transmitted by
facsimile transmission, on the next business day if transmitted by a nationally
recognized overnight courier or on the third business day following mailing by
first class mail, postage prepaid, in each case as follows (or at such other
United States address or facsimile number for a party as shall be specified by
like notice):

 

Notices to the Company:

 

Affiliates Insurance Company
101 West Washington Street, Suite 1100
Indianapolis, Indiana 46204
Attention:  President/Vice President
Facsimile No.:   (317) 632-2883

 

with a copy to:

 

Affiliates Insurance Company
400 Centre Street
Newton, Massachusetts 02458
Attention:  President/Vice President
Facsimile No.:  (617) 928-1305

 

Notices to FVE:

 

Five Star Quality Care, Inc.
400 Centre Street
Newton, Massachusetts 02458
Attention:  President
Facsimile No.:  (617) 796-8385

 

Notices to HPT:

 

Hospitality Properties Trust
400 Centre Street
Newton, Massachusetts 02458
Attention:  President
Facsimile No.:  (617) 969-5730

 

Notices to HRP:

 

HRPT Properties Trust

 

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400 Centre Street
Newton, Massachusetts 02458
Attention:  President
Facsimile No.:  (617) 332-2261

 

Notices to SNH:

 

Senior Housing Properties Trust

400 Centre Street
Newton, Massachusetts 02458
Attention:  President
Facsimile No.:  (617) 796-8349

 

 

Notices to TA:

 

TravelCenters of America LLC

24601 Center Ridge Road, Suite 200
Westlake, Ohio 44145
Attention:  President
Facsimile No.:  (440) 808-3301

 

and

 

Notices to RMR:

 

Reit Management & Research LLC

400 Centre Street
Newton, Massachusetts 02458
Attention:  President
Facsimile No.:  (617) 928-1305

 

8.2                                 Successors and Assigns; Third Party
Beneficiaries.  This Agreement shall inure to the benefit of and be binding upon
the successors and permitted assigns of the parties hereto.  Except as permitted
by Section 3.1, no party may assign this Agreement or its rights hereunder or
delegate its duties hereunder without the written consent of the other parties. 
No person or entity other than the parties hereto and their successors and
permitted assigns is intended to be a beneficiary of this Agreement.

 

8.3                                 Amendment and Waiver.

 

(a)                        No failure or delay on the part of any party in
exercising any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
remedy preclude any other or further exercise thereof or the exercise of any
other right, power or remedy.  The remedies provided for herein are cumulative
and are not exclusive of any remedies that may be available to each party at
law, in equity or otherwise.  Any party hereto may waive in whole or in part any
right afforded to such party hereunder.

 

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(b)                       Any amendment, supplement or modification of or to any
provision of this Agreement, shall be effective upon the written agreement of
the Company and the Shareholders owning not less than 75% of all Shares owned by
the Shareholders; provided, however, that any amendment, supplement or
modification of Article I or Article II shall require the approval of any
Shareholder which may be adversely affected by any such amendment, supplement or
modification.

 

8.4                                 Counterparts.  This Agreement may be
executed in any number of counterparts and by the parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.

 

8.5                                 Headings.  The headings in this Agreement
are for convenience of reference only and shall not limit or otherwise affect
the meaning hereof.

 

8.6                                 Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of the State of Indiana
without regard to the conflicts of laws rules thereof, which would require the
application of the laws of another jurisdiction.

 

8.7                                 Dispute Resolution

 

(a)                                  Any disputes, claims or controversies among
any of the parties hereto arising out of or relating to this Agreement, the
Company, its business, assets or operations or any insurance policies or
coverage underwritten by the Company or any of its third party agents in
furtherance of the Company’s insurance business, including any claims or
disputes, whether in contract, tort, equity or otherwise and whether relating to
the meaning, interpretation, effect, validity, performance or enforcement of
this Agreement (all of which are referred to as “Disputes”) shall be resolved
through binding and final arbitration in accordance with the Expedited
Procedures of the Commercial Arbitration Rules (the “Rules”) of the American
Arbitration Association (“AAA”) then in effect, except as modified herein.

 

(b)                                 There shall be three arbitrators.  If there
are only two parties to the Dispute, each party shall select one arbitrator
within 15 days after receipt by respondent of a copy of the demand for
arbitration.  The two party-nominated arbitrators shall jointly nominate the
third and presiding arbitrator within 15 days of the nomination of the second
arbitrator. If any arbitrator has not been nominated within the time limit
specified herein, then the AAA shall provide a list of proposed arbitrators in
accordance with the Rules and the arbitrator shall be appointed by the AAA in
accordance with a listing, striking and ranking procedure, with each party
having a limited number of strikes, excluding strikes for cause.  If there are
more than two parties to the Dispute, all claimants on the one hand and all
respondents, on the other hand, shall each select one arbitrator and the two
party-nominated arbitrators shall jointly nominate the third and presiding
arbitrator within 15 days of the nomination of the second arbitrator.  If  all
claimants and all respondents are unable to agree on party appointed
arbitrators, within 15 days of receipt by respondent(s) of the demand for
arbitration, the AAA shall provide a list of proposed arbitrators in accordance
with the Rules and all three arbitrators (or a single arbitrator if the parties
so agree) shall be appointed by the AAA in accordance with a listing, striking
and ranking procedure, with each party to the Dispute having a limited number of
strikes, excluding

 

18

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strikes for cause.  Notwithstanding any provision in the Expedited Procedures to
the contrary, the arbitrator shall be selected from the AAA’s large, complex
case panel and the AAA’s regional office shall have no input into the
compensation of any of the arbitrators.

 

(c)                                  The place of arbitration shall be
Indianapolis, Indiana unless otherwise agreed by the parties to the Dispute.

 

(d)                                 Consistent with the expedited nature of the
arbitration, there shall be only limited documentary discovery of documents
directly related to the issues in dispute.

 

(e)                                  In rendering an award or decision (the
“Award”), the arbitrators shall be required to follow the laws of the State of
Indiana.  Any arbitration proceedings or Award rendered hereunder and the
validity, effect and interpretation of this arbitration agreement shall be
governed by the Federal Arbitration Act, 9 U.S.C. §1 et seq.  The Award shall be
in writing and shall briefly state the findings of fact and conclusions of law
on which it is based.

 

(f)                                    Each party shall bear its own costs in
the arbitration, and the arbitrators shall not render an award that would
include shifting of such costs.

 

(g)                                 The Award shall be final and binding upon
the parties to the Dispute and shall be the sole and exclusive remedy between
the parties relating to the Dispute, including any claims, counterclaims, issues
or accounting presented to the arbitrators.  Judgment upon the Award may be
entered in any court having jurisdiction.  The parties hereby waive any rights
of application or appeal to any court of competent jurisdiction to the fullest
extent permitted by law in connection with any question of law arising in the
course of arbitration or with respect to any award made except for actions
relating to enforcement of this agreement to arbitrate or any arbitral award
issued hereunder and except for actions seeking interim or other provisional
relief in aid of arbitration proceedings in any court of competent jurisdiction.

 

(h)                                 Any monetary award shall be made and payable
in U.S. dollars free of any tax, deduction or offset.  Each party against which
the Award assesses a monetary obligation shall pay that obligation on or before
the 30th day following the date of the Award or such other date as the Award may
provide.

 

8.8                                 Interpretation and Construction.

 

(a)                        The words “hereof”, “herein”, “hereby” and
“hereunder” and words of similar import, when used in this Agreement, shall
refer to this Agreement as a whole and not to any particular provision of this
Agreement.

 

(b)                       Unless the context otherwise requires, references to
sections, subsections or Articles refer to sections, subsections or Articles of
this Agreement.

 

(c)                        Terms defined in the singular shall have a comparable
meaning when used in the plural, and vice versa.

 

(d)                       The words “include” and “including” and words of
similar import shall be deemed to be followed by the words “without limitation”.

 

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(e)                        Words importing gender include both genders.

 

(f)                          Any agreement, instrument or statute defined or
referred to herein or in any agreement or instrument that is referred to herein
means such agreement, instrument or statute as from time to time amended,
modified or supplemented, including (in the case of agreements or instruments)
by waiver or consent and (in the case of statutes) by succession of comparable
successor statutes and references to all attachments thereto and instruments
incorporated therein.  In addition, references to any statute are to that
statute and to the rules and regulations promulgated thereunder.

 

(g)                       The parties hereto have participated jointly in the
negotiation and drafting of this Agreement and, in the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as jointly drafted by the parties hereto and no presumption or burden of proof
shall arise favoring or disfavoring any party by virtue of the authorship of any
provision of this Agreement.

 

8.9                                 Severability.  If any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions hereof shall not be in any way impaired,
unless the provisions held invalid, illegal or unenforceable shall substantially
impair the benefits of the remaining provisions hereof.

 

8.10                           Entire Agreement.  This Agreement constitutes the
entire agreement, and supersedes all prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter of this
Agreement.

 

8.11                           Non-liability of Trustees and Directors.

 

(a)                        COPIES OF THE DECLARATIONS OF TRUST, AS IN EFFECT ON
THE DATE HEREOF, OF HPT, HRP AND SNH, TOGETHER WITH ALL AMENDMENTS AND
SUPPLEMENTS THERETO, ARE DULY FILED IN THE OFFICE OF THE STATE DEPARTMENT OF
ASSESSMENTS AND TAXATION OF MARYLAND.  THE DECLARATIONS OF TRUST, AS AMENDED AND
SUPPLEMENTED, OF HPT, HRP AND SNH, PROVIDE THAT NO TRUSTEE, OFFICER,
SHAREHOLDER, EMPLOYEE OR AGENT OF HPT, HRP OR SNH, AS APPLICABLE, SHALL BE HELD
TO ANY PERSONAL LIABILITY, JOINTLY OR SEVERALLY, FOR ANY OBLIGATION OF, OR CLAIM
AGAINST, HPT, HRP OR SNH.  ALL PERSONS DEALING WITH HPT, HRP OR SNH IN ANY WAY,
SHALL LOOK ONLY TO THE ASSETS OF HPT, HRP OR SNH, AS APPLICABLE, FOR THE PAYMENT
OF ANY SUM OR THE PERFORMANCE OF ANY OBLIGATION.

 

(b)                       A COPY OF THE ARTICLES OF INCORPORATION, AS IN EFFECT
ON THE DATE HEREOF, OF FVE, TOGETHER WITH ALL AMENDMENTS AND SUPPLEMENTS
THERETO, IS DULY FILED IN THE OFFICE OF THE STATE DEPARTMENT OF ASSESSMENTS AND
TAXATION OF MARYLAND.  NO DIRECTOR, OFFICER, SHAREHOLDER, EMPLOYEE OR AGENT OF
FVE SHALL BE HELD TO ANY

 

20

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PERSONAL LIABILITY, JOINTLY OR SEVERALLY, FOR ANY OBLIGATION OF, OR CLAIM
AGAINST, FVE.  ALL PERSONS DEALING WITH FVE, IN ANY WAY, SHALL LOOK ONLY TO THE
ASSETS OF FVE FOR THE PAYMENT OF ANY SUM OR THE PERFORMANCE OF ANY OBLIGATION.

 

(c)                        A COPY OF THE LIMITED LIABILITY COMPANY AGREEMENT, AS
IN EFFECT ON THE DATE HEREOF, OF TA, TOGETHER WITH ALL AMENDMENTS THERETO, IS
AVAILABLE TO A SHAREHOLDER PARTY HERETO UPON WRITTEN REQUEST MADE TO TA.  NO
DIRECTOR, OFFICER, SHAREHOLDER, EMPLOYEE OR AGENT OF TA SHALL BE HELD TO ANY
PERSONAL LIABILITY, JOINTLY OR SEVERALLY, FOR ANY OBLIGATION OF, OR CLAIM
AGAINST, TA.  ALL PERSONS DEALING WITH TA, IN ANY WAY, SHALL LOOK ONLY TO THE
ASSETS OF TA FOR THE PAYMENT OF ANY SUM OR THE PERFORMANCE OF ANY OBLIGATION.

 

[The Remainder of This Page Intentionally Left Blank]

 

21

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IN WITNESS WHEREOF, the undersigned have executed, or have caused to be
executed, this Shareholders Agreement on the date first written above.

 

 

AFFILIATES INSURANCE COMPANY

 

 

 

By:

 

/s/  Jennifer B. Clark

 

Name:

Jennifer B. Clark

 

Title:

President

 

 

 

FIVE STAR QUALITY CARE, INC.

 

 

 

By:

 

/s/  Bruce J. Mackey, Jr.

 

Name:

Bruce J. Mackey, Jr.

 

Title:

President and Chief Executive Officer

 

 

 

HOSPITALITY PROPERTIES TRUST

 

 

 

By:

 

/s/  John G. Murray

 

Name:

John G. Murray

 

Title:

President

 

 

 

HRPT PROPERTIES TRUST

 

 

 

By:

 

/s/  John A. Mannix

 

Name:

John A. Mannix

 

Title:

President

 

 

 

SENIOR HOUSING PROPERTIES TRUST

 

 

 

By:

 

/s/  David J. Hegarty

 

Name:

David J. Hegarty

 

Title:

President

 

 

 

TRAVELCENTERS OF AMERICA LLC

 

 

 

By:

 

/s/  Mark R. Young

 

Name:

Mark R. Young

 

Title:

Executive Vice President and General Counsel

 

 

 

REIT MANAGEMENT & RESEARCH LLC

 

 

 

By:

 

/s/  Mark L. Kleifges

 

Name:

Mark L. Kleifges

 

Title:

Executive Vice President

 

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