Exhibit 10.1

 

AMENDED AND RESTATED BUSINESS MANAGEMENT AGREEMENT

 

THIS AMENDED AND RESTATED BUSINESS MANAGEMENT AGREEMENT (this “Agreement”) is
entered into as of December 10, 2012, by and between Hospitality Properties
Trust, a Maryland real estate investment trust (the “Company”), Reit
Management & Research LLC, a Delaware limited liability company  (the
“Manager”), and, solely with respect to Section 16 of this Agreement with
respect to certain non-competition covenants, Barry M. Portnoy, Gerard M. Martin
and Adam D. Portnoy.

 

WHEREAS, the Company and the Manager are parties to an Amended and Restated
Business Management Agreement, dated as of November 2, 2011 (the “Amended
Agreement”), and Barry M. Portnoy, Gerard M. Martin and Adam D. Portnoy are
parties to the Amended Agreement solely with respect to certain covenants in
Section 16 thereof; and

 

WHEREAS, the parties to the Amended Agreement wish to amend and restate the
Amended Agreement as hereinafter provided;

 

NOW, THEREFORE, in consideration of the mutual agreements herein set forth, the
parties hereto agree that the Amended Agreement is hereby amended and restated
to read in its entirety as follows:

 

1.             Engagement.  Subject to the terms and conditions hereinafter set
forth, the Company hereby continues to engage the Manager to provide the
management and real estate investment services contemplated by this Agreement
with respect to the Company’s business and real estate investments, and the
Manager hereby accepts such continued engagement.

 

2.             General Duties of the Manager.  The Manager shall use its
reasonable best efforts to present to the Company a continuing and suitable real
estate investment program consistent with the real estate investment policies
and objectives of the Company.  Subject to the management, direction and
supervision of the Company’s Board of Trustees (the “Trustees”), the Manager
shall:

 

(a)           provide research and economic and statistical data in connection
with the Company’s real estate investments and recommend changes in the
Company’s real estate investment policies when appropriate;

 

(b)           (i) investigate and evaluate investments in, or acquisitions or
dispositions of, real estate and related interests, and financing and
refinancing opportunities, (ii) make recommendations concerning specific
investments to the Trustees, and (iii) evaluate and

 

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negotiate contracts with respect to the foregoing, in each case, on behalf of
the Company and in the furtherance of the Company’s real estate financing
objectives;

 

(c)           investigate, evaluate and negotiate the prosecution and
negotiation of any claims of the Company in connection with its real estate
investments;

 

(d)           administer bookkeeping and accounting functions as are required
for the management and operation of the Company, contract for audits and prepare
or cause to be prepared such reports and filings as may be required by any
governmental authority in connection with the ordinary conduct of the Company’s
business, and otherwise advise and assist the Company with its compliance with
applicable legal and regulatory requirements, including without limitation,
periodic reports, returns or statements required under the Securities Exchange
Act of 1934, as amended, the Internal Revenue Code of 1986, as amended (said
Code, as in effect from time to time, together with any regulations and rulings
thereunder, being hereinafter referred to as the “Internal Revenue Code”), the
securities and tax statutes of any jurisdiction in which the Company is
obligated to file such reports, or the rules and regulations promulgated under
any of the foregoing;

 

(e)           advise and assist in the preparation and filing of all offering
documents (public and private), and all registration statements, prospectuses or
other documents filed with the Securities and Exchange Commission (the “SEC”) or
any state (it being understood that the Company shall be responsible for the
content of any and all of its offering documents and SEC filings (including
without limitation those filings referred to in Section 2(d) hereof), and the
Manager shall not be held liable for any costs or liabilities arising out of any
misstatements or omissions in the Company’s offering documents or SEC filings,
whether or not material, and the Company shall promptly indemnify the Manager
from such costs and liabilities);

 

(f)            retain counsel, consultants and other third party professionals
on behalf of the Company;

 

(g)           provide internal audit services as hereinafter provided;

 

(h)           advise and assist with the Company’s risk management and oversight
function;

 

(i)            to the extent not covered above, advise and assist the Company in
the review and negotiation of the Company’s contracts and agreements,
coordination and supervision of all third party legal services and oversight of
processing of claims by or against the Company;

 

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(j)            advise and assist the Company with respect to the Company’s
public relations, preparation of marketing materials, internet website and
investor relations services;

 

(k)           provide office space, office equipment and the use of accounting
or computing equipment when required;

 

(l)            advise and assist with respect to: the design, operation and
maintenance of network infrastructure, including telephone and data transmission
lines, voice mail, facsimile machines, cellular phones, pager, etc.; and local
area network and wide area network communications support; and

 

(m)          provide personnel necessary for the performance of the foregoing
services.

 

In performing its services under this Agreement, the Manager may utilize
facilities, personnel and support services of various of its affiliates.  The
Manager shall be responsible for paying such affiliates for their personnel and
support services and facilities out of its own funds unless otherwise approved
by a majority vote of the Independent Trustees (the “Independent Trustees”), as
defined in the Company’s Bylaws, as in effect from time to time (the “Bylaws”). 
Notwithstanding the foregoing, fees, costs and expenses of any third party which
is not an affiliate of the Manager retained as permitted hereunder are to be
paid by the Company.  Without limiting the foregoing sentence, any such fees,
costs or expenses referred to in the immediately preceding sentence which may be
paid by the Manager shall be reimbursed to the Manager by the Company promptly
following submission to the Company of a statement of any such fees, costs or
expenses by the Manager.

 

Notwithstanding anything herein, it is understood and agreed that the duties of,
and services to be provided by, the Manager pursuant to this Agreement shall not
include (i) any investment management or related services with respect to any
assets of the Company as the Company may wish to allocate from time to time to
investments in “securities” (as defined in the Investment Advisers Act of 1940,
as amended) or (ii) any services that would subject the Manager to registration
with the Commodity Futures Trading Commission as a “commodity trading advisor”
(as such term is defined in Section 1a(12) of the Commodity Exchange Act and in
CFTC Regulation 1.3(bb)(1)) or affirmatively require it to make any exemptive
certifications or similar filings with respect to “commodity trading advisor”
registration status.

 

In performing its services hereunder with respect to the Company, the Manager
shall adhere to, and shall require its officers and employees in the course of
providing such services to the Company to adhere to, the Company’s Code of
Business Conduct and Ethics, as in effect from time to time.  In addition, the
Manager shall make available to its officers and employees providing such
services to the Company the procedures for the receipt, retention and treatment
of complaints regarding accounting, internal accounting controls or auditing
matters relating to the Company and for the confidential, anonymous submission
by such officers and employees of

 

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concerns regarding questionable accounting or auditing matters relating to the
Company, as set forth in the Company’s Procedures for Handling Concerns or
Complaints about Accounting, Internal Accounting Controls or Auditing Matters,
as in effect from time to time.

 

3.             Bank Accounts.  The Manager shall establish and maintain one or
more bank accounts in its own name or, at the direction of the Trustees, in the
name of the Company, and shall collect and deposit into such account or accounts
and disburse therefrom any monies on behalf of the Company, provided that no
funds in any such account shall be commingled with any funds of the Manager or
any other person or entity.  The Manager shall from time to time, or at any time
requested by the Trustees, render an appropriate accounting of such collections
and payments to the Trustees and to the auditors of the Company.

 

4.             Records.  The Manager shall maintain appropriate books of account
and records relating to this Agreement, which books of account and records shall
be available for inspection by representatives of the Company upon reasonable
notice during ordinary business hours.

 

5.             Information Furnished to Manager.  The Trustees shall at all
times keep the Manager fully informed with regard to the real estate investment
policies of the Company, the capitalization policy of the Company, and generally
the Trustees’ then-current intentions as to the future of the Company.  In
particular, the Trustees shall notify the Manager promptly of their intention to
sell or otherwise dispose of any of the Company’s real estate investments or to
make any new real estate investment.  The Company shall furnish the Manager with
such information with regard to its affairs as the Manager may from time to time
reasonably request.  The Company shall retain legal counsel and accountants to
provide such legal and accounting advice and services as the Manager or the
Trustees shall deem necessary or appropriate to adequately perform the functions
of the Company, and shall have such legal or accounting opinions and advice as
the Manager shall reasonably request.

 

6.             REIT Qualification; Compliance with Law and Organizational
Documents.  Anything else in this Agreement to the contrary notwithstanding, the
Manager shall refrain from any action (including, without limitation, the
furnishing or rendering of services to tenants of property or managing real
property) which, in its judgment made in good faith, or in the judgment of the
Trustees as transmitted to the Manager in writing, would (a) adversely affect
the qualification of the Company as a real estate investment trust as defined
and limited in the Internal Revenue Code or which would make the Company subject
to the Investment Company Act of 1940, as amended (the “1940 Act”), (b) violate
any law or rule, regulation or statement of policy of any governmental body or
agency having jurisdiction over the Company or over its securities, or (c) not
be permitted by the Company’s Declaration of Trust, as in effect from time to
time (the “Declaration of Trust”), or Bylaws, except if such action shall be
ordered by the Trustees, in which event the Manager shall promptly notify the
Trustees of the Manager’s judgment that such action would adversely affect such
qualification, make the Company subject to the 1940 Act or violate any such law,
rule, regulation or policy, or the Declaration of Trust or Bylaws and shall
refrain from taking such action pending further clarification or instructions
from the Trustees.  In addition, the Manager shall take such affirmative steps
which, in its

 

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judgment made in good faith, or in the judgment of the Trustees as transmitted
to the Manager in writing, would prevent or cure any action described in (a),
(b) or (c) above.

 

7.             Self-Dealing.  Neither the Manager nor any affiliate of the
Manager shall sell any property or assets to the Company or purchase any
property or assets from the Company, directly or indirectly, except as approved
by a majority of the Independent Trustees (or otherwise pursuant to the
Declaration of Trust or Bylaws).  In addition, except as otherwise provided in
Sections 2, 10 or 11 hereof, or except as approved by a majority of the
Independent Trustees, neither the Manager nor any affiliate of the Manager shall
receive any commission or other remuneration, directly or indirectly, in
connection with the activities of the Company or any joint venture or
partnership in which the Company is a party.  Except for compensation received
by the Manager pursuant to Section 10 hereof, all commissions or other
remuneration received by the Manager or an affiliate of the Manager and not
approved by the Independent Trustees under Sections 2, 10 or 11 hereof or this
Section 7 shall be reported to the Company annually within ninety (90) days
following the end of the Company’s fiscal year.

 

Upon request of any trustee of the Company, the Manager shall from time to time
promptly furnish the Company with information on a confidential basis as to any
real estate investments within the Company’s real estate investment policies
made by the Manager for its own account.

 

8.             No Partnership or Joint Venture.  The Company and the Manager are
not partners or joint venturers with each other and neither the terms of this
Agreement nor the fact that the Company and the Manager have joint interests in
any one or more investments, ownership or other interests in any one or more
entities or may have common officers or employees or a tenancy relationship
shall be construed so as to make them such partners or joint venturers or impose
any liability as such on either of them.

 

9.             Fidelity Bond.  The Manager shall not be required to obtain or
maintain a fidelity bond in connection with the performance of its services
hereunder.

 

10.          Compensation.  The Manager shall be paid, for the services rendered
by it to the Company pursuant to this Agreement, an annual management fee (the
“Management Fee”) equal to 0.70% of the Average Invested Capital (as defined
below) computed as of the last day of the Company’s fiscal year up to
$250,000,000, and 0.50% of the Average Invested Capital equal to or exceeding
$250,000,000.  In addition, the Manager shall be paid an annual incentive fee
(the “Incentive Fee”), consisting of a number of shares of the Company’s Common
Shares of Beneficial Interest (“Common Shares”) with a value (determined as
provided below) equal to 15% of the amount by which Cash Available for
Distribution (as defined below) for such fiscal year exceeds Cash Available for
Distribution for the fiscal year immediately prior to such fiscal year, but in
no event shall the Incentive Fee payable in respect of any year exceed $.02
multiplied by the weighted average number of Common Shares outstanding during
such year.

 

Payment of the Incentive Fee shall be made by, issuance of Common Shares.  The

 

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number of Common Shares to be issued in payment of the Incentive Fee shall be
the whole number of shares (disregarding any fraction) equal to the value of the
Incentive Fee, as provided above, divided by the average closing price of the
Common Shares on the New York Stock Exchange during the month of December in the
year for which the computation is made.  (The Management Fee and Incentive Fee
are hereinafter collectively referred to as the “Fees.”)

 

For purposes of this Agreement:  (a) “Average Invested Capital” of the Company
shall mean the daily weighted average of the total historical cost of the
consolidated assets of the Company invested, directly or indirectly, in equity
interests in and loans secured by real estate and personal property owned in
connection with such real estate (collectively, “Properties”) (including
acquisition related costs and costs which may be allocated to intangibles or are
unallocated and excluding the historical cost of Properties representing
investments by the Company funded from a furniture, fixtures and equipment
reserve or other improvements funded by the Company that do not result in an
increase in the minimum rents or owner’s priority returns payable to the Company
under the related lease or management agreement), before reserves for
depreciation, amortization, impairment charges or bad debts or other similar
noncash reserves, computed by taking the weighted average of such values; and
(b) “Cash Available for Distribution” shall mean, for any period, the net income
of the Company, before real estate depreciation, amortization and other non-cash
or non-recurring items, less the amount, if any, included in the calculation
thereof which represents amounts which, pursuant to leasing or management
arrangements relating to any of the Properties, the Company is required to
escrow or reserve (including any implied reserve) for renovations and
refurbishments that do not result in an increase in the minimum rents or owner’s
priority returns payable to the Company under the related lease or management
agreement. Calculation of Average Invested Capital and of Cash Available for
Distribution to Shareholders shall be made annually by the Company.

 

Notwithstanding anything in this Section 10 to the contrary, with respect to any
consolidated asset acquired by the Company or any of its subsidiaries from a RMR
Managed Company (as that term is defined in Section 12 below), the “Annual
Average Invested Capital” thereof on the date of acquisition shall equal the
total historical cost of such consolidated asset on the books of the applicable
RMR Managed Company immediately prior to the contribution, sale or other
transfer of such property to the Company or its subsidiaries (including
acquisition related costs and costs which may be allocated to intangibles or are
unallocated), before reserves for depreciation, amortization, impairment charges
or bad debts and other similar noncash reserves, and all subsequent adjustments
shall be based on such historical cost.

 

Unless the Company and the Manager otherwise agree, the Management Fee shall be
computed and payable within thirty (30) days following the end of each fiscal
month by the Company, and the Incentive Fee shall be computed and payable within
thirty (30) days following the public availability of the Company’s annual
audited financial statements for each fiscal year.  Such computations shall be
based upon the Company’s monthly or annual financial statements, as the case may
be, and shall be in reasonable detail.  A copy of such computations shall
promptly be delivered to the Manager accompanied by payment of the Fees shown
thereon to be due and payable.

 

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The payment of the aggregate annual Fees payable for any fiscal year shall be
subject to adjustment as of the end of each fiscal year.  On or before the 30th
day after public availability of the Company’s annual audited financial
statements for each fiscal year, the Company shall deliver to the Manager an
Officer’s Certificate (a “Certificate”) reasonably acceptable to the Manager and
certified by an authorized officer of the Company setting forth (i) the Average
Invested Capital and Cash Available for Distribution for the Company’s fiscal
year ended upon the immediately preceding December 31, and (ii) the Company’s
computation of the Fees payable for said fiscal year.

 

If the aggregate annual Fees payable for said fiscal year as shown in such
Certificate exceed the aggregate amounts previously paid with respect thereto by
the Company, the Company shall include its check for such deficit and deliver
the same to the Manager with such Certificate.

 

If the aggregate annual Fees payable for said fiscal year as shown in such
Certificate are less than the aggregate amounts previously paid with respect
thereto by the Company, the Company shall specify in such Certificate whether
the Manager should (i) remit its check to the Company an amount equal to such
difference or (ii) grant the Company a credit against the Fees next coming due
in the amount of such difference until such amount has been fully paid or
otherwise discharged.

 

11.          Additional Services.

 

(a)           The Manager shall provide to the Company an internal audit
function meeting applicable requirements of the New York Stock Exchange and the
Securities and Exchange Commission and otherwise in scope approved by the Audit
Committee of the Board of Trustees of the Company. In addition to the Fees, the
Company agrees to reimburse the Manager, within 30 days of the receipt of the
invoice therefor, for the Company’s pro rata share (as reasonably agreed to by
the Independent Trustees from time to time) of the following costs of the
Manager:

 

(i)            employment expenses of the Manager’s internal audit manager and
other employees of the Manager actively engaged in providing internal audit
services, including but not limited to salary, wages, payroll taxes and the cost
of employee benefit plans; and

 

(ii)           the reasonable travel and other out-of-pocket expenses of the
Manager relating to the activities of the Manager’s internal audit manager and
other of the Manager’s employees actively engaged in providing internal audit
services and the reasonable third party expenses which the Manager incurs in
connection with its provision of internal audit services.

 

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(b)           If, and to the extent that, the Company shall request the Manager
to render services on behalf of the Company other than those required to be
rendered by the Manager in accordance with the terms of this Agreement, such
additional services shall be compensated separately on terms to be agreed upon
between the Manager and the Company from time to time.

 

12.          Right of First Offer.

 

(a)           Subject to the Company’s Declaration of Trust and Bylaws, the
Company hereby agrees with the Manager that if the Company or any of its
subsidiaries determines to offer, directly or indirectly, for sale or other
disposition arrangement (each a “Sale”) any real property that, at such time, is
of a type within a principal investment focus of another real estate investment
trust to which the Manager at such time provides business management or property
management services (such other company, a “RMR Managed Company”), then prior to
offering such real property for Sale to any other person, the Company shall
provide notice of such proposed Sale to such RMR Managed Company, describing
such proposed Sale in sufficient detail (including expected pricing, payment or
lease terms, closing date and other material terms) and offering such RMR
Managed Company the right to purchase or lease such real property, and shall
negotiate in good faith with such RMR Managed Company for such purchase or
lease.  If within fifteen (15) days after the Company has provided to such RMR
Managed Company the notice of an offer to effect a Sale of such real property,
the Company and such RMR Managed Company have not reached agreement on the terms
of such Sale, the Company (or its subsidiary, as applicable) will be free to
sell such real property to any person upon the same or substantially similar
terms as those contained in the written notice described above (but in any event
for a purchase price that is not less than 90% of the expected price), free of
the restrictions of this Section 12.

 

(b)           Notwithstanding the above, the following Sales shall be excluded
from the right of first offer referred to herein:

 

(i)            A transfer of a real property to a governmental or
quasi-governmental agency (an “Agency”) as part of a tax reduction or tax
abatement program in which the Company or its subsidiary leases such real
property back from such Agency; provided, however, a transfer or assignment of
the Company’s or its subsidiary’s interest as tenant in the lease of the real
property from such Agency shall be subject to the terms and conditions of this
Agreement and the right of first offer granted herein;

 

(ii)           A transfer of a real property to an entity that is wholly owned,
directly or indirectly, by the Company;

 

(iii)          A transfer of a real property to any tenant or other party having
a right of first refusal or offer to purchase in effect on the date hereof (or
in effect on the date such property is acquired by the Company or its
subsidiary, as applicable) on the

 

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terms and conditions of such right of first refusal or offer to purchase or
hereafter granted in a bona fide lease negotiation;

 

(iv)          A transfer of a real property to the appropriate condemning
authority pursuant to eminent domain or under threat of eminent domain; and

 

(v)           Any financing, reorganization, recapitalization, reclassification,
exchange of shares or spin-offs to the Company’s shareholders, in each case
where there is no change of control.

 

13.          Expenses of the Manager.  Without regard to and without limiting
the compensation received by the Manager from the Company pursuant to this
Agreement and except to the extent provided by Sections 2, 10 or 11, the Manager
shall bear the following expenses incurred in connection with the performance of
its duties under this Agreement:

 

(a)           employment expenses of the personnel employed by the Manager,
including, but not limited to, salaries, wages, payroll taxes and the cost of
employee benefit plans;

 

(b)           fees and travel and other expenses paid to directors, officers and
employees of the Manager, except fees and travel and other expenses of such
persons who are trustees or officers of the Company incurred in their capacities
as trustees or officers of the Company;

 

(c)           rent, telephone, utilities, office furniture, equipment and
machinery (including computers, to the extent utilized) and other office
expenses of the Manager, except to the extent such expenses relate solely to an
office maintained by the Company separate from the office of the Manager; and

 

(d)           miscellaneous administrative expenses relating to performance by
the Manager of its obligations hereunder.

 

14.          Expenses of the Company. Except as expressly otherwise provided in
this Agreement, the Company shall pay all its expenses not payable by the
Manager, and, without limiting the generality of the foregoing, it is
specifically agreed that the following expenses of the Company shall be paid by
the Company and shall not be paid by the Manager:

 

(a)           the cost of borrowed money;

 

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(b)           taxes on income and taxes and assessments on real property and
personal property, if any, and all other taxes applicable to the Company;

 

(c)           legal, auditing, accounting, underwriting, brokerage, listing,
reporting, registration and other fees, and printing, engraving and other
expenses and taxes incurred in connection with the issuance, distribution,
transfer, trading, registration and stock exchange listing of the Company’s
securities, including transfer agent’s, registrar’s and indenture trustee’s fees
and charges;

 

(d)           expenses of organizing, restructuring, reorganizing or terminating
the Company, or of revising, amending, converting or modifying the Company’s
organizational documents;

 

(e)           fees and travel and other expenses paid to trustees and officers
of the Company in their capacities as such (but not in their capacities as
officers or employees of the Manager) and fees and travel and other expenses
paid to advisors, contractors, mortgage servicers, consultants, and other agents
and independent contractors employed by or on behalf of the Company;

 

(f)            expenses directly connected with the investigation, acquisition,
disposition or ownership of real estate interests or other property (including
third party property diligence costs, appraisal reporting, the costs of
foreclosure, insurance premiums, legal services, brokerage and sales
commissions, maintenance, repair, improvement and local management of property),
other than expenses with respect thereto of employees of the Manager, to the
extent that such expenses are to be borne by the Manager pursuant to Section 13
above;

 

(g)           all insurance costs incurred in connection with the Company
(including officer and trustee liability insurance) or in connection with any
officer and trustee indemnity agreement to which the Company is a party;

 

(h)           expenses connected with payments of dividends or interest or
contributions in cash or any other form made or caused to be made by the
Trustees to holders of securities of the Company;

 

(i)            all expenses connected with communications to holders of
securities of the Company and other bookkeeping and clerical work necessary to
maintaining relations with holders of securities, including the cost of
preparing, printing, posting, distributing and mailing certificates for
securities and proxy solicitation materials and reports to holders of the
Company’s securities;

 

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(j)            legal, accounting and auditing fees and expenses, other than
those described in subsection (c) above;

 

(k)           filing and recording fees for regulatory or governmental filings,
approvals and notices to the extent not otherwise covered by any of the
foregoing items of this Section 14;

 

(l)            expenses relating to any office or office facilities maintained
by the Company separate from the office of the Manager; and

 

(m)          the costs and expenses of all equity award or compensation plans or
arrangements established by the Company, including the value of awards made by
the Company to the Manager or its employees, if any.

 

15.          Limits of Manager Responsibility; Indemnification; Company
Remedies.  The Manager assumes no responsibility other than to render the
services described herein in good faith and shall not be responsible for any
action of the Trustees in following or declining to follow any advice or
recommendation of the Manager.  The Manager, its shareholders, directors,
officers, employees and affiliates will not be liable to the Company, its
shareholders, or others, except by reason of acts constituting bad faith,
willful or wanton misconduct or gross negligence in the performance of its
obligations hereunder.  The Company shall reimburse, indemnify and hold harmless
the Manager, its shareholders, directors, officers and employees and its
affiliates for and from any and all expenses, losses, damages, liabilities,
demands, charges and claims of any nature whatsoever (including, without
limitation, all reasonable attorneys’, accountants’ and experts’ fees and
expenses) in respect of or arising from any acts or omissions of the Manager
with respect to the provision of services by it or performance of its
obligations in connection with this Agreement or performance of other matters
pursuant to specific instruction by the Trustees, except to the extent such
provision or performance was in willful bad faith or grossly negligent.  Without
limiting the foregoing, the Company shall promptly advance expenses incurred by
the indemnitees referred to in this section for matters referred to in this
section, upon request for such advancement.

 

16.          Other Activities of the Manager and its Shareholders.  None of the
Manager, Barry M. Portnoy, Gerard M. Martin or Adam D. Portnoy shall, without
the consent of the Independent Trustees, (a) provide management services to, or
serve as a director or officer of, any other real estate investment trust which
is principally engaged in the business of ownership of hotel or travel center
properties or (b) make direct investments in hotel or travel center facilities. 
Nothing herein shall prevent the Manager from engaging in other activities or
businesses or from acting as Manager to any other person or entity (including
other real estate investment trusts) provided that no such activity shall
conflict with the Manager’s obligations under the immediately preceding
sentence; provided, further, however, that the Manager shall notify the Company
in writing in the event that it does so act as a manager to another real estate
investment trust.  The Company acknowledges that the Manager manages real estate
investment trusts and other entities (including, as of the date of this
Agreement, CommonWealth REIT,

 

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Senior Housing Properties Trust, Government Properties Income Trust, Select
Income REIT, Five Star Quality Care, Inc. and TravelCenters of America LLC) and
that the Manager shall be free from any obligation to present to the Company any
particular investment opportunity which comes to the Manager and that the
Manager is not required to present the Company with opportunities to invest in
properties that are primarily of a type that are the investment focus of another
person or entity now or in the future managed by the Manager.  In addition,
subject to the first sentence of this section, nothing herein shall prevent any
shareholder or affiliate of the Manager from engaging in any other business or
from rendering services of any kind to any other person or entity (including
competitive business activities).  The Company acknowledges and agrees that the
Manager has certain interests that may be divergent from those of the Company,
including, without limitation, (a) the Manager provides certain services to
Affiliates Insurance Company and (b) the Manager provides certain services to
Sonesta International Hotels Corporation or its affiliates.  The parties agree
that these relationships and interests shall not affect either party’s rights
and obligations under this Agreement.  The parties further agree that whenever
any conflicts of interest arise resulting from the relationships and interests
described or referred to in this Section 16 or any such relationship or interest
as may arise or be present in the future, (x) between or among the Company and
the Manager or their respective affiliates, the Manager will act on its own
behalf and not on the Company’s behalf or (y) between or among the Company and
any entity with whom the Manager has a relationship or contract or their
respective affiliates, the Manager shall in its sole and absolute discretion,
determine on which of those parties’ behalf it shall act, and without any
resulting liability or obligation under this Agreement as a result of, arising
from or relating to any such determination.  Without limiting the foregoing
provisions, the Manager agrees, upon the request of any trustee of the Company,
to disclose certain real estate investment information concerning the Manager or
certain of its affiliates; provided, however, that such disclosure shall be
required only if it does not constitute a breach of any fiduciary duty or
obligation of the Manager, and the Company shall be required to keep such
information confidential.

 

Directors, officers, employees and agents of the Manager or of its affiliates
may serve as trustees, officers, employees, agents, nominees or signatories of
the Company.  When executing documents or otherwise acting in such capacities
for the Company, such persons shall use their respective titles in the Company. 
Such persons shall receive no compensation from the Company for their services
to the Company in any such capacities, except that the Company may make awards
to the employees of the Manager and others under the Company’s Equity
Compensation Plan then in effect or any equity plan adopted by the Company from
time to time.

 

17.          Term, Termination.  This Agreement shall continue in force and
effect until December 31, 2013, and shall be automatically renewed for
successive one year terms annually thereafter unless notice of non-renewal is
given by the Company or the Manager before the end of the term.  It is expected
that the terms and conditions may be reviewed by the Independent Trustees of the
Compensation Committee of the Board of Trustees of the Company at least
annually.

 

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Notwithstanding any other provision of this Agreement to the contrary, this
Agreement may be terminated by either party hereto upon sixty (60) days’ written
notice to the other party, pursuant to, in the case of a termination by the
Company, a majority vote of the Independent Trustees of the Compensation
Committee of the Board of Trustees of the Company or, in the case of a
termination by the Manager, by a majority vote of the directors of the Manager.

 

Section 18 hereof shall govern the rights, liabilities and obligations of the
parties upon termination of this Agreement; and, except as provided in Sections
15 and 18, a termination shall be without further liability of either party to
the other, other than for breach or violation of this Agreement prior to
termination.

 

18.          Action Upon Termination.  From and after the effective date of any
termination of this Agreement pursuant to Section 17 hereof, the Manager shall
be entitled to no compensation for services rendered hereunder for the
then-current term of this Agreement, but shall be paid, on a pro rata basis, all
compensation due for services performed prior to the effective date of such
termination.  Upon such termination, the Manager immediately shall:

 

(a)           pay over to the Company all monies collected and held for the
account of the Company by it pursuant to this Agreement, after deducting
therefrom any accrued Fees and reimbursements for its expenses to which it is
then entitled;

 

(b)           deliver to the Trustees a full and complete accounting, including
a statement showing all sums collected by it and a statement of all sums held by
it for the period commencing with the date following the date of its last
accounting to the Trustees; and

 

(c)           deliver to the Trustees all property and documents of the Company
then in its custody or possession.

 

The amount of Fees paid to the Manager upon termination shall be subject to
adjustment pursuant to the following mechanism.  On or before the 30th day after
public availability of the Company’s annual audited financial statements for the
fiscal year in which termination occurs, the Company shall deliver to the
Manager a Certificate reasonably acceptable to the Manager and certified by an
authorized officer of the Company setting forth (i) the Average Invested Capital
and Cash Available for Distribution for the Company’s fiscal year ended upon the
immediately preceding December 31, and (ii) the Company’s computation of the
Fees payable upon the date of termination.

 

If the annual Fees owed upon termination as shown in such Certificate exceed the
Fees paid by the Company upon termination, the Company shall include its check
for such deficit and deliver the same to the Advisor with such Certificate.

 

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If the Annual Fees owed upon termination as shown in such Certificate are less
than the Fees paid by the Company upon termination, the Manager shall remit to
the Company its check in an amount equal to such difference.

 

19.          Trustee Action. Wherever action on the part of the Trustees is
contemplated by this Agreement, action by a majority of the Trustees, including
a majority of the Independent Trustees, shall constitute the action provided for
herein.

 

20.          TRUSTEES AND SHAREHOLDERS NOT LIABLE.  THE DECLARATION OF TRUST, A
COPY OF WHICH, TOGETHER WITH ALL AMENDMENTS, IS DULY FILED IN THE OFFICE OF THE
DEPARTMENT OF ASSESSMENTS AND TAXATION OF THE STATE OF MARYLAND PROVIDES THAT
THE NAME HOSPITALITY PROPERTIES TRUST REFERS TO THE TRUSTEES COLLECTIVELY AS
TRUSTEES, BUT NOT INDIVIDUALLY OR PERSONALLY.  NO TRUSTEE, OFFICER, SHAREHOLDER,
EMPLOYEE OR AGENT OF THE COMPANY SHALL BE HELD TO ANY PERSONAL LIABILITY,
JOINTLY OR SEVERALLY, FOR ANY OBLIGATION OF, OR CLAIM AGAINST, THE COMPANY.  ALL
PERSONS DEALING WITH THE COMPANY, IN ANY WAY, SHALL LOOK ONLY TO THE ASSETS OF
THE COMPANY FOR THE PAYMENT OF ANY SUM OR THE PERFORMANCE OF ANY OBLIGATION.

 

21.          Notices.  Any notice, report or other communication required or
permitted to be given hereunder 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):

 

If to the Company:

Hospitality Properties Trust
Two Newton Place

255 Washington Street, Suite 300
Newton, MA 02458
Attention: President
Facsimile No.:  (617) 969-5730

 

If to the Manager:

Reit Management & Research LLC
Two Newton Place

255 Washington Street, Suite 300
Newton, MA 02458
Attention: President
Facsimile No.:  (617) 928-1305

 

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22.          Amendments.  The Company and the Manager, or their respective
successors or assigns, may amend, change modify, terminate or discharge in whole
or in part this Agreement by an instrument in writing signed by each of them,
without the consent of the other parties to this Agreement, provided that any
such amendment, change, modification, termination or discharge does not amend
Section 16 so as to adversely affect the rights or obligations of such other
parties.

 

23.          Assignment.  Neither party may assign this Agreement or its rights
hereunder or delegate its duties hereunder without the written consent of the
other party, except in the case of an assignment or delegation by the Manager to
a corporation, partnership, limited liability company, association, trust, or
other successor entity which may take over the property and carry on the affairs
of the Manager and which remains under the control of one or more persons who
controlled the operations of the Manager immediately prior to such assignment or
delegation.

 

24.          No Third Party Beneficiary.  Except as otherwise provided in
Section 27(i), no person or entity other than the parties hereto and their
successors and permitted assigns is intended to be a beneficiary of this
Agreement.

 

25.          Successors and Assigns.  This Agreement shall be binding upon any
successors or permitted assigns of the parties hereto as provided herein.

 

26.          Governing Law. The provisions of this Agreement shall be governed
by and construed in accordance with the laws of the Commonwealth of
Massachusetts.

 

27.          Arbitration.

 

(a)           Any disputes, claims or controversies between the parties
(i) arising out of or relating to this Agreement or the provision of services by
the Manager pursuant to this Agreement, or (ii) brought by or on behalf of any
shareholder of the Company (which, for purposes of this Section 27, shall mean
any shareholder of record or any beneficial owner of shares of the Company, or
any former shareholder of record or beneficial owner of shares of the Company),
either on his, her or its own behalf, on behalf of the Company or on behalf of
any series or class of shares of the Company or shareholders of the Company
against the Company or any trustee, officer, manager (including Manager or its
successor), agent or employee of the Company, including disputes, claims or
controversies relating to the meaning, interpretation, effect, validity,
performance or enforcement of this Agreement, including this arbitration
agreement, the Declaration of Trust or the Bylaws (all of which are referred to
as “Disputes”), or relating in any way to such a Dispute or Disputes shall, on
the demand of any party to such Dispute be resolved through binding and final
arbitration in accordance with the Commercial Arbitration Rules (the “Rules”) of
the American Arbitration Association (“AAA”) then in effect, except as those
Rules may be modified in this Section 27.  For the avoidance of doubt, and not
as a limitation, Disputes are intended to include derivative actions against
trustees, officers or

 

15

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managers of the Company and class actions by a shareholder against those
individuals or entities and the Company.  For the avoidance of doubt, a Dispute
shall include a Dispute made derivatively on behalf of one party against another
party.

 

(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
of a demand for arbitration. Such arbitrators may be affiliated or interested
persons of such parties. 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, by the vote of a majority of the claimants or the respondents, as the
case may be, one arbitrator within 15 days after receipt of a demand for
arbitration. Such arbitrators may be affiliated or interested persons of the
claimants or the respondents, as the case may be. If either a claimant (or all
claimants) or a respondent (or all respondents) fail to timely select an
arbitrator then the party (or parties) who has selected an arbitrator may
request the AAA to provide a list of three proposed arbitrators in accordance
with the Rules (each of whom shall be neutral, impartial and unaffiliated with
any party) and the party (or parties) that failed to timely appoint an
arbitrator shall have ten days from the date the AAA provides such list to
select one of the three arbitrators proposed by AAA. If such party (or parties)
fail to select such arbitrator by such time, the party (or parties) who have
appointed the first arbitrator shall then have ten days to select one of the
three arbitrators proposed by AAA to be the second arbitrator; and, if he/they
should fail to select such arbitrator by such time, the AAA shall select, within
15 days thereafter, one of the three arbitrators it had proposed as the second
arbitrator. The two arbitrators so appointed shall jointly appoint the third and
presiding arbitrator (who shall be neutral, impartial and unaffiliated with any
party) within 15 days of the appointment of the second arbitrator. If the third
arbitrator has not been appointed 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.

 

(c)           The place of arbitration shall be Boston, Massachusetts unless
otherwise agreed by the parties.

 

(d)           There shall be only limited documentary discovery of documents
directly related to the issues in dispute, as may be ordered by the arbitrators.

 

(e)           In rendering an award or decision (the “Award”), the arbitrators
shall be required to follow the laws of The Commonwealth of Massachusetts.  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 may, but
shall not be required to, briefly state the findings of fact and conclusions of
law on which it is based.

 

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(f)            Except to the extent expressly provided by this Agreement or as
otherwise agreed by the parties, each party involved in a Dispute shall bear its
own costs and expenses (including attorneys’ fees), and the arbitrators shall
not render an award that would include shifting of any such costs or expenses
(including attorneys’ fees) or, in a derivative case or class action, award any
portion of the Company’s award to the claimant or the claimant’s attorneys. 
Each party (or, if there are more than two parties to the Dispute, all
claimants, on the one hand, and all respondents, on the other hand,
respectively) shall bear the costs and expenses of its (or their) selected
arbitrator and the parties (or, if there are more than two parties to the
Dispute, all claimants, on the one hand, and all respondents, on the other hand)
shall equally bear the costs and expenses of the third appointed arbitrator.

 

(g)           An Award shall be final and binding upon the parties thereto and
shall be the sole and exclusive remedy between such 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.  To the fullest extent permitted by law, no application or appeal
to any court of competent jurisdiction may be made 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.

 

(i)            This Section 27 is intended to benefit and be enforceable by the
shareholders, directors, officers, managers (including the Manager or its
successor), agents or employees of the Company and the Company and shall be
binding on the shareholders of the Company and the Company, as applicable, and
shall be in addition to, and not in substitution for, any other rights to
indemnification or contribution that such individuals or entities may have by
contract or otherwise.

 

28.          Consent to Jurisdiction and Forum.  This Section 28 is subject to,
and shall not in any way limit the application of, Section 27; in case of any
conflict between this Section 28 and Section 27, Section 27 shall govern.  The
exclusive jurisdiction and venue in any action brought by any party hereto
pursuant to this Agreement shall lie in any federal or state court located in
Boston, Massachusetts.  By execution and delivery of this Agreement, each party
hereto irrevocably submits to the jurisdiction of such courts for itself and in
respect of its property with respect to such action. The parties irrevocably
agree that venue would be proper in such court, and hereby waive any objection
that such court is an improper or inconvenient forum for the resolution of such
action.  The parties further agree and consent to the service of any process
required by any such court by delivery of a copy thereof in accordance with
Section 21 and that

 

17

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any such delivery shall constitute valid and lawful service of process against
it, without necessity for service by any other means provided by statute or
rule of court.

 

29.          Captions. The captions included herein have been inserted for ease
of reference only and shall not be construed to affect the meaning, construction
or effect of this Agreement.

 

30.          Entire Agreement. This Agreement constitutes the entire agreement
of the parties hereto with respect to the subject matter hereof and supersedes
and cancels any pre-existing agreements with respect to such subject matter.

 

31.          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.

 

32.          Survival.  The provisions of Sections 2 (limited to the obligation
of the Company to indemnify the Manager for matters provided thereunder), 15, 16
(limited to the obligations of the Company to keep information provided to the
Company by the Manager confidential as provided in the last proviso in such
Section), 17 (limited to the last paragraph of such Section), 18, 20, 21, 24,
25, 26, 27, 28, 31 and 32 of this Agreement shall survive the termination
hereof.

 

33.          Other Agreements.  The parties hereto are also parties to an
Amended and Restated Property Management Agreement, dated as of January 13, 2010
(as amended, the “Property Management Agreement”).  The parties agree that this
Agreement does not include or otherwise address the rights and obligations of
the parties under the Property Management Agreement and that the Property
Management Agreement provides for its own separate rights and obligations of the
parties thereto, including, without limitation separate compensation payable by
the Company and the other Owners (as defined in the Property Management
Agreement) to the Manager thereunder for services to be provided by the Manager
pursuant to the Property Management Agreement.

 

34.          Equal Employment Opportunity Employer.  The Manager is an equal
employment opportunity employer and complies with all applicable state and
federal laws to provide a work environment free from discrimination and without
regard to race, color, sex, sexual orientation, national origin, ancestry,
religion, creed, physical or mental disability, age, marital status, veteran’s
status or any other basis protected by applicable laws.

 

[Signature Page To Follow]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amended and Restated
Business Management Agreement to be executed by their duly authorized officers,
under seal, as of the day and year first above written.

 

 

 

HOSPITALITY PROPERTIES TRUST

 

 

 

 

 

By:

/s/ John G. Murray

 

 

Name: John G. Murray

 

 

Title: President and Chief Operating Officer

 

 

 

 

 

 

 

REIT MANAGEMENT & RESEARCH LLC

 

 

 

 

 

 

 

By:

/s/ Adam D. Portnoy

 

 

Name: Adam D. Portnoy

 

 

Title: President and Chief Executive Officer

 

SOLELY AS TO SECTION 16 HEREOF:

 

 

 

 

 

 

 

 

/s/ Barry M. Portnoy

 

 

Barry M. Portnoy

 

 

 

 

 

 

 

 

/s/ Gerard M. Martin

 

 

Gerard M. Martin

 

 

 

 

 

 

 

 

/s/ Adam D. Portnoy

 

 

Adam D. Portnoy

 

 

 

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