Exhibit 10.4


 


INDEMNIFICATION AGREEMENT


 


THIS INDEMNIFICATION AGREEMENT (this “Agreement”) is made and entered
into as of June 24, 2009 (the “Effective Date”), by and between Government
Properties Income Trust, a Maryland real estate investment trust (the “Company”),
and Adam D. Portnoy (“Indemnitee”).


 


WHEREAS, Indemnitee currently serves as the President and a Managing
Trustee 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
President and Managing Trustee, 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 maximum extent permitted by law as
hereinafter provided; and


 


WHEREAS, the parties by this Agreement desire to set forth their
agreement regarding indemnification and advance of expenses;


 


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 of all the Company’s
then-outstanding securities entitled to vote generally in the election of
trustees without the prior approval of at least two-thirds of the members of
the Board of Trustees of the Company (the “Board of Trustees”) 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 Trustees then in office, as a
consequence of which members of the Board of Trustees in office immediately
prior to such transaction or event 


 

















 


constitute
less than a majority of the Board of Trustees 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 Trustees (including
for this purpose any new trustee whose election or nomination for election by
the Company’s shareholders was approved by a vote of at least two-thirds of the
trustees then still in office who were trustees at the beginning of such
period) cease for any reason to constitute at least a majority of the Board of
Trustees.


 


(b)       “Corporate
Status” means the status of a person who is or was a director, trustee, officer
or agent of the Company and the status of a person who, while a director,
trustee, officer or agent of the Company, is or was serving at the request of
the Company as a director, trustee, officer or agent of another foreign or
domestic real estate investment trust, corporation, partnership, limited
liability company, joint venture, trust, other enterprise or employee benefit
plan.


 


(c)       “Disinterested
Trustee” means a trustee of the Company who is not and was not a party to the
Proceeding in respect of which indemnification and/or advance of Expenses is
sought by Indemnitee.


 


(d)       “Expenses”
means all expenses, including, but not limited to, all reasonable attorneys’
fees and costs, 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, selected by the
Indemnitee and reasonably acceptable to the Company, that is experienced in
matters of business law and that neither is, nor in the past two years has
been, retained to represent (i) the Company or Indemnitee in any matter
material to either such party (other than with respect to matters concerning
Indemnitee under this Agreement or of other indemnities of the Company under
similar indemnification agreements), or (ii) any other party to or
participant or witness in the Proceeding giving rise to a claim for
indemnification or advance of Expenses hereunder.


 


(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 maximum extent permitted by Maryland law in effect on the Effective Date
and as amended from time to 


 


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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
Effective Date.  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”), as applicable to a Maryland real
estate investment trust by virtue of Section 8-301(15) of the Maryland
REIT Law.


 


Section 3.           Proceedings Other Than
Derivative 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 derivative
Proceeding by or in the right of the Company (or, if applicable, such other
enterprise at which Indemnitee is or was serving at the request 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.           Derivative 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 derivative Proceeding brought by or in the
right of the Company (or, if applicable, such other enterprise at which
Indemnitee is or was serving at the request 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 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 


 


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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
Trustees 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
Trustees, 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 Trustees (or a duly
authorized committee thereof) by a majority vote of a quorum consisting of
Disinterested Trustees (as herein defined), or (B) if a quorum of the
Board of Trustees consisting of Disinterested Trustees is not obtainable or,
even if obtainable, such quorum of Disinterested Trustees so directs, by
Independent Counsel in a written opinion to the Board of Trustees, a copy of
which shall be delivered to Indemnitee, or (C) if so directed by a
majority of the members of the Board of Trustees, by the shareholders 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


 


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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.


 


(c)       The Company
shall pay the fees and expenses of Independent Counsel, if one is appointed
pursuant to this Section 7.


 


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 (A) unless the Company
demands arbitration as provided by Section 16, be entitled to an
adjudication in an appropriate court of the State of Maryland or in any other
court of competent jurisdiction or (B) be entitled to seek an award in
arbitration as provided by Section 16, in each case of his
entitlement to such indemnification or advance of Expenses.


 


(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 


 


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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 as provided by Section 16
to enforce his rights under, or to recover damages for breach of, this
Agreement by the Company, Indemnitee shall be entitled to recover in full from
the Company, and shall be indemnified in full by the Company for, any and all
Expenses incurred by him in such judicial adjudication or arbitration if it is
determined that the Indemnitee is entitled to enforce any of his rights under,
or to recover any damages for breach of, this Agreement by the Company.


 


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,
and the counsel selected by the Company shall be reasonably satisfactory to
Indemnitee.  The Company shall not,
without the prior written consent of Indemnitee, 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 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 15.


 


(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 


 


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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.             Liability
Insurance.  To the extent the Company
maintains an insurance policy or policies providing liability insurance for any
of its directors, trustees or officers, Indemnitee shall be covered by such
policy or policies, in accordance with its or their terms, to the maximum
extent of the coverage available for any Company director, trustee or officer
during the Indemnitee’s tenure as a director, trustee or officer and, following
a termination of Indemnitee’s service in connection with a Change in Control,
for a period of six years thereafter.


 


Section 12.         Non-Exclusivity;
Survival of Rights; Subrogation.


 


(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 Amended and Restated Declaration of Trust
(as the same may be amended from time to time, the “Declaration of Trust”) or
Bylaws of the Company (as the same may be amended from time to time, the “Bylaws”),
any agreement or a resolution of the shareholders entitled to vote generally in
the election of trustees or of the Board of Trustees, 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 or payable or reimbursable as Expenses hereunder if and
to the extent that Indemnitee has otherwise actually received such payment
under any insurance policy, contract, agreement or otherwise.


 


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Section 13.         Binding Effect.


 


(a)       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 real estate investment trust, corporation,
partnership, limited liability company, 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.


 


(b)       Any
successor of the Company (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 shall be automatically deemed to have
assumed and agreed 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, provided that no such assumption shall relieve the Company of its
obligations hereunder.  To the extent
required by applicable law to give effect to the foregoing sentence and to the
extent requested by Indemnitee, the Company shall require and cause any such
successor to expressly assume and agree to perform this Agreement by written
agreement in form and substance satisfactory to Indemnitee.


 


Section 14.         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 15.         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, the Declaration of
Trust, the Bylaws, liability insurance policy or policies, if any, or otherwise
or (ii) the Declaration of Trust, the Bylaws, a resolution of the
shareholders entitled to vote generally in the election of trustees or of the
Board of Trustees or an agreement approved by the Board of Trustees to which
the Company is a party expressly provides otherwise.


 


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Section 16.         Arbitration.


 


(a)       Any disputes,
claims or controversies between the parties (i) regarding the Indemnitee’s
entitlement to indemnification or advance of Expenses hereunder or otherwise
arising out of or relating to this Agreement, or (ii) brought by or on
behalf of any shareholder of the Company (which, for purposes of this Section 16,
shall mean any shareholder of record or any beneficial owner of shares of the
Company, or any former shareholder of record or beneficial owner of shares of
the Company), either on his own behalf, on behalf of the Company or on behalf
of any series or class of shares of the Company or shareholders of the Company
against the Company or any trustee, officer, manager (including Reit Management &
Research LLC or its successor), agent or employee of the Company, including
disputes, claims or controversies relating to the meaning, interpretation,
effect, validity, performance or enforcement of this Agreement, the Declaration
of Trust or the Bylaws (all of which are referred to as “Disputes”) or relating
in any way to such a Dispute or Disputes, shall on the demand of any party to
such Dispute be resolved through binding and final arbitration in accordance
with the Commercial Arbitration Rules (the “Rules”) of the American Arbitration
Association (“AAA”) then in effect, except as modified herein.  For the avoidance of doubt, and not as a
limitation, Disputes are intended to include derivative actions against
trustees, officers or managers of the Company and class actions by a
shareholder against those individuals or entities and the Company.


 


(b)       There shall be
three arbitrators.  If there are (i) 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 and (ii) more
than two parties to the Dispute, all claimants, on the one hand, and all
respondents, on the other hand, shall each select, by the vote of a majority of
the claimants or the respondents, as the case may be, one arbitrator.  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.  For the avoidance of doubt, the arbitrators
appointed by the parties to such Dispute may be affiliates or interested
persons of such parties but the third arbitrator elected by the party
arbitrators or by the AAA shall be unaffiliated with either party.


 


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


 


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


 


(e)       In rendering
an award or decision (the “Award”), the arbitrators shall be required to follow
the laws of the State of Maryland.  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


 


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and may,
but shall not be required to, briefly state the findings of fact and
conclusions of law on which it is based.


 


(f)        Except to the
extent expressly provided by this Agreement (including Section 5
and Section 9(d)) or as otherwise agreed between the parties, each
party involved in a Dispute shall bear its own costs and expenses (including attorneys’
fees), and the arbitrators shall not render an award that would include
shifting of any such costs or expenses (including attorneys’ fees) or, in a
derivative case or class action by a shareholder of the Company, award any
portion of the Company’s award to the claimant or the claimant’s
attorneys.  Each party (or, if there are
more than two parties to the Dispute, all claimants, on the one hand, and all
respondents, on the other hand, respectively) shall bear the costs and expenses
of its (or their) selected arbitrator and the parties (or, if there are more
than two parties to the Dispute, all claimants, on the one hand, and all
respondents, on the other hand) shall equally bear the costs and expenses of
the third appointed arbitrator.


 


(g)       The Award
shall be final and binding upon the parties thereto and shall be the sole and
exclusive remedy between such parties relating to the Dispute, including any
claims, counterclaims, issues or accounting presented to the arbitrators.  Judgment upon the Award may be entered in any
court having jurisdiction.  To the
fullest extent permitted by law, no application or appeal to any court of
competent jurisdiction may be made in connection with any question of law
arising in the course of arbitration or with respect to any award made except
for actions relating to enforcement of this agreement to arbitrate or any
arbitral award issued hereunder and except for actions seeking interim or other
provisional relief in aid of arbitration proceedings in any court of competent
jurisdiction.


 


(h)       Any monetary
award shall be made and payable in U.S. dollars free of any tax, deduction or
offset.  The 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.


 


Section 17.             Period
of Limitations.  To the fullest
extent permitted by law, no legal action shall be brought, and no cause of
action shall be asserted, by or on behalf of the Company or any controlled
affiliate of the Company against Indemnitee, Indemnitee’s spouse, heirs,
executors or personal or legal representatives after the expiration of two
years from the date of accrual of such cause of action, and any claim or cause
of action of the Company or its controlled affiliate shall be extinguished and
deemed released unless asserted by the timely filing of a legal action within
such two-year period; provided, however, if any shorter period of
limitations is otherwise applicable to any such cause of action, such shorter
period shall govern.


 


Section 18.             Reports
to Shareholders.  To the extent
required by the MGCL, the Company shall report in writing to its shareholders
the payment of any amounts for indemnification of, or advance of Expenses to, Indemnitee
under this Agreement arising out of a derivative Proceeding by or in the right
of the Company with the notice of the meeting of


 


10

















 


shareholders of the Company next following the date of the payment of
any such indemnification or advance of Expenses or prior to such meeting.


 


Section 19.         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 20.         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 21.         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 22.         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:


 


Government
Properties Income Trust

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 23.         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.


 


Section 24.             Miscellaneous.  Use of the masculine pronoun in this
Agreement shall be deemed to include usage of the feminine pronoun where
appropriate.


 


11

















 


[SIGNATURE PAGE FOLLOWS]


 


12

















 


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


 


	
   

  	
  GOVERNMENT PROPERTIES
  INCOME TRUST

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David M. Blackman

  
	
   

  	
  Name:

  	
  David M. Blackman

  
	
   

  	
  Title:

  	
  Treasurer and Chief
  Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  INDEMNITEE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Adam D. Portnoy

  
	
   

  	
  Name:

  	
  Adam D. Portnoy

  
	
   

  	
  Address:

  	
  400 Centre Street
  Newton, MA 02458

  



 

















 


EXHIBIT
A


 


FORM OF UNDERTAKING TO
REPAY EXPENSES ADVANCED


 


The Board of Trustees of Government Properties
Income Trust


 


Re: 
Undertaking to Repay Expenses Advanced


 


Ladies and Gentlemen:


 


This undertaking is being provided pursuant to that
certain Indemnification Agreement dated
                            ,
20    , by and between Government Properties Income Trust
(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 trustee] [an officer]
of the Company, in any of the facts or events giving rise to the Proceeding, I (1) did
not act with bad faith or active or deliberate dishonesty, (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 attorneys’ 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                          , 20    .


 


 




	
  WITNESS:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (SEAL)

  






 

















 


Schedule
to Exhibit 10.1


 


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

  
	
  Jacquelyn S. Anderson

  	
   

  	
  June 24,
  2009

  
	
  David M. Blackman

  	
   

  	
  June 24,
  2009

  
	
  Jennifer B. Clark

  	
   

  	
  June 24,
  2009

  
	
  Barbara D. Gilmore

  	
   

  	
  June 24,
  2009

  
	
  John L. Harrington

  	
   

  	
  June 24,
  2009

  
	
  Adam D. Portnoy

  	
   

  	
  June 24,
  2009

  
	
  Barry M. Portnoy

  	
   

  	
  June 24,
  2009

  
	
  William J. Sheehan

  	
   

  	
  June 24,
  2009

  
	
  Jeffrey Somers

  	
   

  	
  June 24, 2009