Exhibit 10.33


 


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


 

















 


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

  



 

















 


	
  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

  



 














 


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:


 

















 


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

















 


(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

















 


(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

















 


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

















 


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

















 


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

















 


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 


 


8

















 


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














 


(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, 


 


10

















 


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

















 


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.


 


12

















 


(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

















 


(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.


 


14

















 


(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.


 


15














 


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


 


16

















 


Notices to HRP:


 


HRPT Properties Trust


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.


 


17

















 


(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

















 


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”.


 


19

















 


(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

















 


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

















 


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