Document:

Exhibit 10.63

 

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 PresidentExhibit 4.8

 

SPECIMEN
PREFERRED STOCK CERTIFICATE

 

SEE
LEGENDS ON REVERSE SIDE

 

PENN
NATIONAL GAMING, INC

 

Incorporated
under the laws of the Commonwealth of Pennsylvania

 

12,500
Shares Series B Redeemable Preferred Stock

 

Par
Value $0.01 Per Share

 

This Certifies
that                                                                              
is the registered holder of                                                           
                                                                
Shares of the Series B Redeemable Preferred Stock of Penn National Gaming, Inc.,
fully paid and non-assessable, transferable only on the books of the
Corporation by the holder hereof in person or by Attorney upon surrender of
this Certificate properly endorsed.

 

In Witness
Whereof, the said Corporation has caused this Certificate to be signed by its
duly authorized officers and its Corporate Seal to be hereunto affixed

 

this                           
day of                             
A.D. 20    .

 

	
  /s/

  	
   

  	
  /s/

  
	
   

  	
   

  	
   

  
	
  Secretary

  	
   

  	
                 Chairman

  

 

THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED.  THEY
MAY NOT BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF A REGISTRATION
STATEMENT WHICH IS EFFECTIVE UNDER THAT ACT AS TO SAID SECURITIES OR AN
OPINION, IN FORM AND SUBSTANCE SATISFACTORY TO THE COMPANY AND GIVEN BY
COUNSEL SATISFACTORY TO THE COMPANY TO THE EFFECT THAT SUCH REGISTRATION IS NOT
REQUIRED.

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT
TO RESTRICTIONS ON TRANSFER AND CERTAIN OTHER LIMITATIONS SET FORTH IN A
CERTAIN INVESTOR RIGHTS AGREEMENT DATED AS OF JULY 3, 2008, AMONG THE
COMPANY AND THE PURCHASERS NAMED THEREIN, AS THE SAME MAY BE AMENDED FROM
TIME TO TIME (THE “AGREEMENT”), COPIES OF WHICH AGREEMENT ARE ON FILE AT THE
PRINCIPAL OFFICE OF THE COMPANY.

 

THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND
CONDITIONS OF A STATEMENT WITH RESPECT TO SHARES, FILED WITH THE DEPARTMENT OF
STATE OF THE COMMONWEALTH OF PENNSYLVANIA ON JULY 9, 2008, WHICH SETS
FORTH THE VOTING RIGHTS, PREFERENCES, LIMITATIONS AND SPECIAL RIGHTS, IF ANY,
OF THE SHARES OF THIS SERIES (THE “STATEMENT WITH RESPECT TO SHARES”).  THE COMPANY WILL FURNISH WITHOUT CHARGE TO
EACH SHAREHOLDER UPON WRITTEN REQUEST A COPY OF THE FULL TEXT OF THE STATEMENT
WITH RESPECT TO SHARES AND ANY AMENDMENTS THERETO AND AMENDMENTS AND
RESTATEMENTS THEREOF FILED WITH THE DEPARTMENT OF STATE OF THE COMMONWEALTH OF
PENNSYLVANIA.

 

IF AT ANY TIME A GAMING AUTHORITY IN A JURISDICTION IN
WHICH THE COMPANY OPERATES FINDS THAT AN OWNER OF THIS SECURITY IS UNSUITABLE
TO CONTINUE TO HAVE ANY INVOLVEMENT IN GAMING IN SUCH JURISDICTION, SUCH OWNER
MUST DISPOSE OF SUCH SECURITY AS PROVIDED BY THE LAWS OF SUCH JURISDICTION AND
THE REGULATIONS OF SUCH 

 

 

GAMING AUTHORITY THEREUNDER. SUCH LAWS AND REGULATIONS
MAY RESTRICT THE RIGHT UNDER CERTAIN CIRCUMSTANCES: (A) TO PAY OR
RECEIVE ANY DIVIDEND OR INTEREST UPON SUCH SECURITY; (B) TO EXERCISE,
DIRECTLY OR THROUGH ANY TRUSTEE OR NOMINEE, ANY VOTING RIGHT CONFERRED BY SUCH
SECURITY; OR (C) TO RECEIVE ANY REMUNERATION IN ANY FORM FROM THE
COMPANY FOR SERVICES RENDERED OR OTHERWISE.

 

For Value Received,                   
hereby sell, assign and transfer unto                                                                                                
                                                                   
Shares represented by the within Certificate, and do hereby irrevocably
constitute and appoint                                                                               
Attorney to transfer the said Shares on the books of the within named
Corporation with full power of substitution in the premises.

 

Dated                                       
20    

 

In presence of                                                               .

 

NOTICE: THE SIGNATURE OF THIS ASSIGNMENT MUST
CORRESPOND WITH THE NAME AS WRITTEN UPON THE FACE OF THE CERTIFICATE, IN EVERY
PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT, OR ANY CHANGE WHATEVER.

 

2

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