Exhibit 10.4


 


INDEMNIFICATION AGREEMENT


 


THIS
INDEMNIFICATION AGREEMENT (this “Agreement”) is made and entered March 10,
2004 (the “Effective Date”), by and between Five Star Quality Care, Inc.,
a Maryland Corporation (the “Company”), and Rosemary Esposito, R.N. (“Indemnitee”).


 


WHEREAS
Indemnitee currently serves as an officer of the Company and may, in connection
therewith, be subjected to claims, suits or proceedings arising from such
service; and


 


WHEREAS,
as an inducement to Indemnitee to continue to serve as such officer, the Company has agreed to
indemnify and to advance expenses and costs incurred by Indemnitee in
connection with any such claims, suits or proceedings, to the fullest extent
permitted by law as hereinafter provided; and


 


NOW,
THEREFORE, in consideration of the premises and the covenants contained herein,
the Company and Indemnitee do hereby covenant and agree as follows:


 


Section 1.                                            Definitions.  For purposes of this Agreement:


 


(a)                                  “Change
in Control” means a change in control of the Company occurring after the
Effective Date of a nature that would be required to be reported in response to
Item 6(e) of Schedule 14A of Regulation 14A (or in response to any
similar item on any similar schedule or form) promulgated under the
Securities Exchange Act of 1934, as amended (the “Act”), whether or not the
Company is then subject to such reporting requirement; provided, however, that,
without limitation, such a Change in Control shall be deemed to have occurred
if after the Effective Date (i) any “person” (as such term is used in
Sections 13(d) and 14(d) of the Act) is or becomes the “beneficial
owner” (as defined in Rule 13d-3 under the Act), directly or indirectly,
of securities of the Company representing 10% or more of the combined voting power in the election of
directors of the Company’s then outstanding securities without the prior
approval of at least two-thirds of the members of the Board of Directors in
office immediately prior to such person attaining such percentage interest; (ii) there
occurs a proxy contest, or the Company is a party to a merger, consolidation,
sale of assets, plan of liquidation or other reorganization not approved by at
least two-thirds of the members of the Board of Directors then in office, as a
consequence of which members of the Board of Directors in office immediately
prior to such transaction or event constitute less than a majority of the Board
of Directors thereafter; or (iii) during any period of two consecutive
years, other than as a result of an event described in clause (a)(ii) of
this Section 1, individuals who at the beginning of such period
constituted the Board of Directors (including for this purpose any new director
whose election or nomination for election by the Company’s stockholders was
approved by a vote of at least two-thirds of the directors then still in office
who were directors at the beginning of such period) cease for any reason to
constitute at least a majority of the Board of Directors.


 


(b)                                 “Corporate
Status” means the status of a person who is or was a director, trustee, officer
or agent of the Company.


 


(c)                                  “Disinterested
Director” means a director of the Company who is not and was not a party to the
Proceeding in respect of which indemnification is sought by Indemnitee.


 

















 


(d)                                 “Expenses”
means all expenses, including, but not limited to, all reasonable attorneys’
fees, retainers, court costs, transcript costs, fees of experts, witness fees,
travel expenses, duplicating costs, printing and binding costs, telephone
charges, postage, delivery service fees, and all other disbursements or
expenses of the types customarily incurred in connection with prosecuting,
defending, preparing to prosecute or defend, investigating, or being or
preparing to be a witness in a Proceeding.


 


(e)                                  “Independent
Counsel” means a law firm, or a member of a law firm, that is retained by
Indemnitee and is not serving as counsel to the Company.


 


(f)                                    “Proceeding”
means any threatened, pending or completed action, suit, arbitration, alternate
dispute resolution mechanism, investigation, administrative hearing or any
other proceeding, whether civil, criminal, administrative or investigative
(including on appeal), except one initiated by an Indemnitee pursuant to Section 9.


 


Section 2.                                            Indemnification
- General.  The Company shall
indemnify, and advance Expenses to, Indemnitee (a) as provided in this
Agreement and (b) otherwise to the fullest extent permitted by Maryland
law in effect on the date hereof and as amended from time to time; provided,
however, that no change in Maryland law shall have the effect of
reducing the benefits available to Indemnitee hereunder based on Maryland law
as in effect on the date hereof.  The
rights of Indemnitee provided in this Section 2 shall include,
without limitation, the rights set forth in the other sections of this
Agreement, including any additional indemnification permitted by Section 2-418(g) of
the Maryland General Corporation Law (“MGCL”).


 


Section 3.                                            Proceedings
Other Than Proceedings by or in the Right of the Company.  Indemnitee shall be entitled to the rights of
indemnification provided in this Section 3 if, by reason of his
Corporate Status, he is, or is threatened to be, made a party to any
threatened, pending, or completed Proceeding, other than a Proceeding by or in
the right of the Company.  Pursuant to
this Section 3, Indemnitee shall be indemnified against all
judgments, penalties, fines and amounts paid in settlement and all Expenses
incurred by him or on his behalf in connection with a Proceeding by reason of
Indemnitee’s Corporate Status unless it is established that (i) the act or
omission of Indemnitee was material to the matter giving rise to the Proceeding
and (a) was committed in bad faith or (b) was the result of active
and deliberate dishonesty, (ii) Indemnitee actually received an improper
personal benefit in money, property or services, or (iii) in the case of
any criminal Proceeding, Indemnitee had reasonable cause to believe that his
conduct was unlawful.


 


Section 4.                                            Proceedings
by or in the Right of the Company. 
Indemnitee shall be entitled to the rights of indemnification provided
in this Section 4 if, by reason of his Corporate Status, he is, or
is threatened to be, made a party to any threatened, pending or completed
Proceeding brought by or in the right of the Company to procure a judgment in
its favor.  Pursuant to this Section 4,
Indemnitee shall be indemnified against all amounts paid in settlement and all
Expenses incurred by him or on his behalf in connection with such Proceeding
unless it is established that (i) the act or omission of Indemnitee was
material to the matter giving rise to such a Proceeding and (a) was
committed in bad faith or (b) was the result of active and


 


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deliberate dishonesty or (ii) Indemnitee actually received an
improper personal benefit in money, property or services.


 


Section 5.                                            Indemnification
for Expenses of a Party Who is Partly Successful.  Without limitation on Section 3
and Section 4, if Indemnitee is not wholly successful in any
Proceeding covered by this Agreement, but is successful, on the merits or
otherwise, as to one or more but less than all claims, issues or matters in
such Proceeding, the Company shall indemnify Indemnitee under this Section 5
for all Expenses incurred by him or on his behalf in connection with each
successfully resolved claim, issue or matter, allocated on a reasonable and
proportionate basis.  For purposes of
this Section and without limitation, the termination of any claim, issue
or matter in such a Proceeding by dismissal, with or without prejudice, shall
be deemed to be a successful result as to such claim, issue or matter.


 


Section 6.                                            Advance of Expenses. 
The Company shall advance all Expenses incurred by or on behalf of
Indemnitee in connection with any Proceeding to which Indemnitee is, or is
threatened to be, made a party or a witness, within ten days after the receipt
by the Company of a statement or statements from Indemnitee requesting such
advance or advances from time to time, whether prior to or after final
disposition of such Proceeding.  Such
statement or statements shall reasonably evidence the Expenses incurred by
Indemnitee and shall include or be preceded or accompanied by a written affirmation
by Indemnitee of Indemnitee’s good faith belief that the standard of conduct
necessary for indemnification by the Company as authorized by law and by this
Agreement has been met and a written undertaking by or on behalf of Indemnitee,
in substantially the form attached hereto as Exhibit A or in such
form as may be required under applicable law as in effect at the time of the
execution thereof, to reimburse the portion of any Expenses advanced to
Indemnitee relating to claims, issues or matters in the Proceeding as to which
it shall ultimately be established that the standard of conduct has not been
met and which have not been successfully resolved as described in Section 5.  To the extent that Expenses advanced to
Indemnitee do not relate to a specific claim, issue or matter in the Proceeding,
such Expenses shall be allocated on a reasonable and proportionate basis.  The undertaking required by this Section 6
shall be an unlimited general obligation by or on behalf of Indemnitee and
shall be accepted without reference to Indemnitee’s financial ability to repay
such advanced Expenses and without any requirement to post security therefor.


 


Section 7.                                            Procedure for Determination of
Entitlement to Indemnification.


 


(a)                                  To
obtain indemnification under this Agreement, Indemnitee shall submit to the
Company a written request, including such documentation and information as is
reasonably available to Indemnitee and is reasonably necessary to determine
whether and to what extent Indemnitee is entitled to indemnification.  The Secretary of the Company shall, promptly
upon receipt of such a request for indemnification, advise the Board of
Directors in writing that Indemnitee has requested indemnification.


 


(b)                                 Upon
written request by Indemnitee for indemnification pursuant to the first
sentence of Section 7(a) hereof, a determination, if required
by applicable law, with respect to Indemnitee’s entitlement thereto shall
promptly be made in the specific case: (i) if a Change in Control shall
have occurred, by Independent Counsel in a written opinion to the Board of


 


3

















 


Directors, a copy of which shall be delivered to
Indemnitee; or (ii) if a Change of Control shall not have occurred or if
after a Change of Control Indemnitee shall so request, (A) by the Board of
Directors (or a duly authorized committee thereof) by a majority vote of a
quorum consisting of Disinterested Directors (as herein defined), or (B) if
a quorum of the Board of Directors consisting of Disinterested Directors is not
obtainable or, even if obtainable, such quorum of Disinterested Directors so
directs, by Independent Counsel in a written opinion to the Board of Directors,
a copy of which shall be delivered to Indemnitee, or (C) if so directed by
a majority of the members of the Board of Directors, by the stockholders of the
Company; and, if it is so determined that Indemnitee is entitled to
indemnification, payment to Indemnitee shall be made within ten days after such
determination.  Indemnitee shall cooperate
with the person, persons or entity making such determination with respect to
Indemnitee’s entitlement to indemnification, including providing to such
person, persons or entity upon reasonable advance request any documentation or
information which is not privileged or otherwise protected from disclosure and
which is reasonably available to Indemnitee and reasonably necessary to such
determination.  Any Expenses incurred by
Indemnitee in so cooperating with the person, persons or entity making such determination
shall be borne by the Company (irrespective of the determination as to
Indemnitee’s entitlement to indemnification) and the Company shall indemnify
and hold Indemnitee harmless therefrom.


 


Section 8.                                            Presumptions and Effect of Certain
Proceedings.


 


(a)                                  In
making a determination with respect to entitlement to indemnification
hereunder, the person or persons or entity making such determination shall
presume that Indemnitee is entitled to indemnification under this Agreement if
Indemnitee has submitted a request for indemnification in accordance with Section 7(a) of
this Agreement, and the Company shall have the burden of proof to overcome that
presumption in connection with the making of any determination contrary to that
presumption.


 


(b)                                 The
termination of any Proceeding by judgment, order, settlement, conviction, a
plea of nolo  contendere or its equivalent, or an entry of an
order of probation prior to judgment, does not create a presumption that
Indemnitee did not meet the requisite standard of conduct described herein for
indemnification.


 


Section 9.                                            Remedies of Indemnitee.


 


(a)                                  If
(i) a determination is made pursuant to Section 7 that
Indemnitee is not entitled to indemnification under this Agreement, (ii) advance
of Expenses is not timely made pursuant to Section 6, (iii) no
determination of entitlement to indemnification shall have been made pursuant
to Section 7(b) within 30
days after receipt by the Company of the request for indemnification, (iv) payment
of indemnification is not made pursuant to Section 5 within ten
days after receipt by the Company of a written request therefor, or (v) payment
of indemnification is not made within ten days after a determination has been
made that Indemnitee is entitled to indemnification, Indemnitee shall be
entitled to an adjudication in an appropriate court of the State of Maryland,
or in any other court of competent jurisdiction, of his entitlement to such
indemnification or advance of Expenses. 
Alternatively, Indemnitee, at his option, may seek an award in
arbitration to be conducted by a single arbitrator pursuant to the commercial


 


4

















 


Arbitration Rules of the American Arbitration
Association.  Indemnitee shall commence
such proceeding seeking an adjudication or an award in arbitration within 180
days following the date on which Indemnitee first has the right to commence
such proceeding pursuant to this Section 9(a); provided, however,
that the foregoing clause shall not apply in respect of a proceeding brought by
Indemnitee to enforce his rights under Section 5.


 


(b)                                 In
any judicial proceeding or arbitration commenced pursuant to this Section 9,
the Company shall have the burden of proving that Indemnitee is not entitled to
indemnification or advance of Expenses, as the case may be.


 


(c)                                  If
a determination shall have been made pursuant to Section 7(b) that
Indemnitee is entitled to indemnification, the Company shall be bound by such
determination in any judicial proceeding or arbitration commenced pursuant to
this Section 9, absent a misstatement by Indemnitee of a material
fact, or an omission of a material fact necessary to make Indemnitee’s
statement not materially misleading, in connection with the request for
indemnification.


 


(d)                                 In
the event that Indemnitee, pursuant to this Section 9, seeks a
judicial adjudication of or an award in arbitration to enforce his rights
under, or to recover damages for breach of, this Agreement, Indemnitee shall be
entitled to recover from the Company, and shall be indemnified by the Company
for, any and all Expenses incurred by him in such judicial adjudication or
arbitration.  If it shall be determined
in such judicial adjudication or arbitration that Indemnitee is entitled to
receive part but not all of the indemnification or advance of Expenses sought,
the Expenses incurred by Indemnitee in connection with such judicial
adjudication or arbitration shall be appropriately prorated.


 


Section 10.                                      Defense of the Underlying Proceeding.


 


(a)                                  Indemnitee
shall notify the Company promptly upon being served with or receiving any
summons, citation, subpoena, complaint, indictment, information, notice,
request or other document relating to any Proceeding which may result in the
right to indemnification or the advance of Expenses hereunder; provided,
however, that the failure to give any such notice shall not disqualify
Indemnitee from the right, or otherwise affect in any manner any right of
Indemnitee, to indemnification or the advance of Expenses under this Agreement
unless the Company’s ability to defend in such Proceeding or to obtain proceeds
under any insurance policy is materially and adversely prejudiced thereby, and
then only to the extent the Company is thereby actually so prejudiced.


 


(b)                                 Subject
to the provisions of the last sentence of this Section 10(b) and
of Section 10(c) below, the Company shall have the right to
defend Indemnitee in any Proceeding which may give rise to indemnification
hereunder; provided, however, that the Company shall notify
Indemnitee of any such decision to defend within 15 calendar days following
receipt of notice of any such Proceeding under Section 10(a) above.  The Company shall not, without the prior
written consent of Indemnitee, which shall not be unreasonably withheld or
delayed, consent to the entry of any judgment against Indemnitee or enter into
any settlement or compromise which (i) includes an admission of fault of
Indemnitee or (ii) does not include, as an unconditional term thereof, the
full release of Indemnitee from all liability in respect of such Proceeding,
which


 


5

















 


release shall be in form and substance reasonably
satisfactory to Indemnitee.  This Section 10(b) shall
not apply to a Proceeding brought by Indemnitee under Section 9
above or Section 14.


 


(c)                                  Notwithstanding
the provisions of Section 10(b), if in a Proceeding to which
Indemnitee is a party by reason of Indemnitee’s Corporate Status, (i) Indemnitee
reasonably concludes, based upon an opinion of counsel approved by the Company,
which approval shall not be unreasonably withheld, that he may have separate
defenses or counterclaims to assert with respect to any issue which may not be
consistent with other defendants in such Proceeding, (ii) Indemnitee
reasonably concludes, based upon an opinion of counsel approved by the Company,
which approval shall not be unreasonably withheld, that an actual or apparent
conflict of interest or potential conflict of interest exists between
Indemnitee and the Company, or (iii) the Company fails to assume the
defense of such Proceeding in a timely manner, Indemnitee shall be entitled to
be represented by separate legal counsel of Indemnitee’s choice, subject to the
prior approval of the Company, which shall not be unreasonably withheld, at the
expense of the Company.  In addition, if
the Company fails to comply with any of its obligations under this Agreement or
in the event that the Company or any other person takes any action to declare
this Agreement void or unenforceable, or institutes any Proceeding to deny or
to recover from Indemnitee the benefits intended to be provided to Indemnitee
hereunder, Indemnitee shall have the right to retain counsel of Indemnitee’s
choice, subject to the prior approval of the Company, which shall not be
unreasonably withheld, at the expense of the Company (subject to Section 9(d)),
to represent Indemnitee in connection with any such matter.


 


Section 11.                                      Non-Exclusivity; Survival of Rights.


 


(a)                                  The
rights of indemnification and advance of Expenses as provided by this Agreement
shall not be deemed exclusive of any other rights to which Indemnitee may at
any time be entitled under applicable law, the Articles of Incorporation or
Bylaws of the Company, any agreement or a resolution of the stockholders
entitled to vote generally in the election of directors or of the Board of
Directors, or otherwise.  No amendment,
alteration or repeal of this Agreement or of any provision hereof shall limit
or restrict any right of Indemnitee under this Agreement in respect of any action
taken or omitted by such Indemnitee in his Corporate Status prior to such
amendment, alteration or repeal.


 


(b)                                 In
the event of any payment under this Agreement, the Company shall be subrogated
to the extent of such payment to all of the rights of recovery of Indemnitee,
who shall execute all papers required and take all action necessary to secure
such rights, including execution of such documents as are necessary to enable
the Company to bring suit to enforce such rights.


 


(c)                                  The
Company shall not be liable under this Agreement to make any payment of amounts
otherwise indemnifiable hereunder if and to the extent that Indemnitee has
otherwise actually received such payment under any insurance policy, contract,
agreement or otherwise.


 


Section 12.                                      Duration of Agreement; Binding Effect.


 


(a)                                  This
Agreement shall continue until and terminate ten years after the date that
Indemnitee shall have ceased to serve as a director, trustee, officer,
employee, or agent of the


 


6

















 


Company or of any other corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise which
Indemnitee served at the request of the Company; provided, however,
that the rights of Indemnitee hereunder shall continue until the final
termination of any Proceeding then pending in respect of which Indemnitee is
granted rights of indemnification or advance of Expenses hereunder and of any
proceeding commenced by Indemnitee pursuant to Section 9 relating
thereto.


 


(b)                                 The
indemnification and advance of Expenses provided by, or granted pursuant to,
this Agreement shall be binding upon and be enforceable by the parties hereto
and their respective successors and assigns (including any direct or indirect
successor by purchase, merger, consolidation or otherwise to all or
substantially all of the business or assets of the Company), shall continue as
to an Indemnitee who has ceased to be a director, trustee, officer, employee or
agent of the Company or of any other corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise which such person is or was
serving at the written request of the Company, and shall inure to the benefit
of Indemnitee and his or her spouse, assigns, heirs, devisees, executors and
administrators and other legal representatives.


 


(c)                                  The
Company shall require and cause any successor (whether direct or indirect by
purchase, merger, consolidation or otherwise) to all, substantially all or a
substantial part, of the business and/or assets of the Company, by written
agreement in form and substance satisfactory to Indemnitee, expressly to assume
and agree to perform this Agreement in the same manner and to the same extent
that the Company would be required to perform if no such succession had taken
place.


 


Section 13.                                      Severability. 
If any provision or provisions of this Agreement shall be held to be
invalid, illegal or unenforceable for any reason whatsoever: (a) the
validity, legality and enforceability of the remaining provisions of this
Agreement (including, without limitation, each portion of any section of
this Agreement containing any such provision held to be invalid, illegal or
unenforceable that is not itself invalid, illegal or unenforceable) shall not
in any way be affected or impaired thereby; and (b) to the fullest extent
possible, the provisions of this Agreement (including, without limitation, each
portion of any section of this Agreement containing any such provision
held to be invalid, illegal or unenforceable, that is not itself invalid,
illegal or unenforceable) shall be construed so as to give effect to the intent
manifested thereby.


 


Section 14.                                      Limitation and Exception to Right of
Indemnification or Advance of Expenses. 
Notwithstanding any other provision of this Agreement, (a) any
indemnification or advance of Expenses to which Indemnitee is otherwise
entitled under the terms of this Agreement shall be made only to the extent
such indemnification or advance of Expenses does not conflict with applicable
Maryland law and (b) Indemnitee shall not be entitled to indemnification
or advance of Expenses under this Agreement with respect to any Proceeding
brought by Indemnitee, unless (i) the Proceeding is brought to enforce
indemnification under this Agreement or otherwise or (ii) the Company’s
Bylaws, as amended, the Articles of Incorporation, a resolution of the
stockholders entitled to vote generally in the election of directors or of the
Board of Directors or an agreement approved by the Board of Directors to which
the Company is a party expressly provide otherwise.


 


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Section 15.                                      Counterparts. 
This Agreement may be executed in one or more counterparts, each of
which shall for all purposes be deemed to be an original but all of which
together shall constitute one and the same Agreement.  One such counterpart signed by the party
against whom enforceability is sought shall be sufficient to evidence the
existence of this Agreement.


 


Section 16.                                      Headings.  The headings
of the paragraphs of this Agreement are inserted for convenience only and shall
not be deemed to constitute part of this Agreement or to affect the
construction thereof.


 


Section 17.                                      Modification and Waiver. 
No supplement, modification or amendment of this Agreement shall be
binding unless executed in writing by both of the parties hereto.  No waiver of any of the provisions of this
Agreement shall be deemed or shall constitute a waiver of any other provisions
hereof (whether or not similar) nor shall such waiver constitute a continuing
waiver.


 


Section 18.                                      Notices.  Any notice,
report or other communication required or permitted to be given hereunder shall
be in writing unless some other method of giving such notice, report or other
communication is accepted by the party to whom it is given, and shall be given
by being delivered at the following addresses to the parties hereto:


 


(a)                                  If
to Indemnitee, to:  The address set forth
on the signature page hereto.


 


(b)                                 If
to the Company to:


 


Five
Star Quality Care, Inc.


400
Centre Street


Newton,
Massachusetts 02458


Attn:  Secretary


 


or
to such other address as may have been furnished to Indemnitee by the Company
or to the Company by Indemnitee, as the case may be.


 


Section 19.                                      Governing Law. 
The parties agree that this Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of Maryland,
without regard to its conflicts of laws rules.


 


[SIGNATURE PAGE FOLLOWS]


 


8

















 


IN
WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and
year first above written.


 


	
  ATTEST:

  	
   

  	
  FIVE
  STAR QUALITY CARE, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/
  Jennifer B. Clark

  	
   

  	
  By:

  	
  /s/
  Bruce J. Mackey Jr.

  	
  (SEAL)

  
	
   

  	
   

  	
  Name:

  	
  Bruce
  J. Mackey Jr.

  
	
   

  	
   

  	
  Title:

  	
  Treasurer,
  Chief Financial Officer and Assistant Secretary

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  WITNESS:

  	
   

  	
  INDEMNITEE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/
  Judith A. Stapleton

  	
   

  	
  /s/
  Rosemary Esposito, R.N.

  
	
   

  	
   

  	
  Name:  Rosemary Esposito, R.N.

  
	
   

  	
   

  	
  Address:
  [address omitted]

  



 


9

















 


EXHIBIT A


 


FORM OF
UNDERTAKING TO REPAY EXPENSES ADVANCED


 


The
Board of Directors of Five Star Quality Care, Inc.


 


Re:  Undertaking to Repay Expenses Advanced


 


Ladies
and Gentlemen:


 


This
undertaking is being provided pursuant to that certain Indemnification
Agreement dated
                          ,
2004, by and between Five Star Quality Care, Inc. (the “Company”) and the
undersigned Indemnitee (the “Indemnification Agreement”), pursuant to which I
am entitled to advance of expenses in connection with [Description
of Proceeding] (the “Proceeding”).


 


Terms
used herein and not otherwise defined shall have the meanings specified in the
Indemnification Agreement.


 


I
am subject to the Proceeding by reason of my Corporate Status or by reason of
alleged actions or omissions by me in such capacity.  I hereby affirm that at all times, insofar as
I was involved as [a director]  [an officer] of the Company, in any of the facts or events
giving rise to the Proceeding, I (1) acted in good faith and honestly, (2) did
not receive any improper personal benefit in money, property or services and (3) in
the case of any criminal proceeding, had no reasonable cause to believe that
any act or omission by me was unlawful.


 


In
consideration of the advance of expenses by the Company for reasonable attorney’s
fees and related expenses incurred by me in connection with the Proceeding (the
“Advanced Expenses”), I hereby agree that if, in connection with the
Proceeding, it is established that (1) an act or omission by me was
material to the matter giving rise to the Proceeding and (a) was committed
in bad faith or (b) was the result of active and deliberate dishonesty or (2) I
actually received an improper personal benefit in money, property or services
or (3) in the case of any criminal proceeding, I had reasonable cause to
believe that the act or omission was unlawful, then I shall promptly reimburse
the portion of the Advanced Expenses relating to the claims, issues or matters
in the Proceeding as to which the foregoing findings have been established and
which have not been successfully resolved as described in Section 5
of the Indemnification Agreement.  To the
extent that Advanced Expenses do not relate to a specific claim, issue or
matter in the Proceeding, I agree that such Expenses shall be allocated on a
reasonable and proportionate basis.


 


IN WITNESS WHEREOF, I have executed this Affirmation and Undertaking on
this         day of
                                        ,
200    .


 


WITNESS:


 


	
   

  	
   

  	
   

  	
  (SEAL)

  



 

















 


Schedule to Exhibit 10.4


 


The following individuals are parties to Indemnification Agreements
with the Company which are substantially identical in all material respects to
the representative Indemnification Agreement filed herewith and are dated as of
the respective dates listed below.  The other Indemnification Agreements
are omitted pursuant to Instruction 2 to Item 601 of Regulation S-K.


 


	
  Name of Signatory

  	
   

  	
  Date

  
	
  Evrett W. Benton

  	
   

  	
  March 10, 2004

  
	
  Rosemary Esposito, R.N.

  	
   

  	
  March 10, 2004

  
	
  Bruce M. Gans, M.D.

  	
   

  	
  March 10, 2004

  
	
  Barbara D. Gilmore

  	
   

  	
  March 10, 2004

  
	
  Maryann Hughes

  	
   

  	
  March 10, 2004

  
	
  Arthur G. Koumantzelis

  	
   

  	
  March 10, 2004

  
	
  Bruce J. Mackey Jr.

  	
   

  	
  March 10, 2004

  
	
  Gerard M. Martin

  	
   

  	
  March 10, 2004

  
	
  Barry M. Portnoy

  	
   

  	
  March 10, 2004

  
	
  William J. Sheehan

  	
   

  	
  May 7, 2004

  
	
  Travis K. Smith

  	
   

  	
  February 27, 2008

  
	
  Francis R. Murphy

  	
   

  	
  May 1, 2008