Document:

Exhibit 10.34

 

AMENDED AND RESTATED

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

REIT MANAGEMENT & RESEARCH LLC

and

GOVERNMENT PROPERTIES INCOME TRUST

December 16, 2009

 

 

 

TABLE
OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I

  	
   

  
	
   

  	
   

  
	
  INVESTMENT IN THE COMPANY; FORMATION AND LICENSING
  EXPENSES

  	
   

  
	
   

  	
   

  	
   

  
	
  1.1

  	
  Share Issuances to Original Shareholders

  	
  2

  
	
  1.2

  	
  Future Share Issuances

  	
  2

  
	
  1.3

  	
  Formation and Licensing Expenses

  	
  2

  
	
  1.4

  	
  Share Issuance to GOV

  	
  2

  
	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
   

  
	
   

  	
   

  
	
  BOARD COMPOSITION

  	
   

  
	
   

  	
   

  	
   

  
	
  2.1

  	
  Board Composition

  	
  3

  
	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
   

  
	
   

  	
   

  
	
  TRANSFER OF SHARES;

  	
   

  
	
  PREEMPTIVE RIGHTS; CALL RIGHTS

  	
   

  
	
   

  	
   

  	
   

  
	
  3.1

  	
  Transfer of Shares; No Pledging of Shares

  	
  4

  
	
  3.2

  	
  Preemptive Rights

  	
  4

  
	
  3.3

  	
  Change of Control Call Option

  	
  7

  
	
  3.4

  	
  Permitted New Issuance of Shares

  	
  10

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
   

  
	
   

  	
   

  
	
  SPECIAL SHAREHOLDER APPROVAL REQUIREMENTS.

  	
   

  
	
   

  	
   

  	
   

  
	
  4.1

  	
  Special Shareholder Approval Requirements

  	
  10

  
	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
   

  
	
   

  	
   

  
	
  OTHER COVENANTS AND AGREEMENTS

  	
   

  
	
   

  	
   

  	
   

  
	
  5.1

  	
  Organizational Documents

  	
  11

  
	
  5.2

  	
  Reports and Information Access

  	
  11

  
	
  5.3

  	
  Compliance with Laws

  	
  11

  
	
  5.4

  	
  Cooperation; Further Assurances

  	
  11

  
	
  5.5

  	
  Confidentiality

  	
  12

  
	
  5.6

  	
  Required Regulatory Approvals

  	
  12

  
	
  5.7

  	
  REIT Matters

  	
  13

  

 

 

	
  ARTICLE VI

  	
   

  
	
   

  	
   

  
	
  REPRESENTATIONS AND WARRANTIES

  	
   

  
	
   

  	
   

  	
   

  
	
  6.1

  	
  The Company

  	
  13

  
	
  6.2

  	
  The Shareholders

  	
  14

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
   

  
	
   

  	
   

  
	
  TERMINATION

  	
   

  
	
   

  	
   

  	
   

  
	
  7.1

  	
  Termination

  	
  16

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  	
   

  
	
   

  	
   

  
	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
  8.1

  	
  Notices

  	
  16

  
	
  8.2

  	
  Successors and Assigns; Third Party Beneficiaries

  	
  18

  
	
  8.3

  	
  Amendment and Waiver

  	
  18

  
	
  8.4

  	
  Counterparts

  	
  18

  
	
  8.5

  	
  Headings

  	
  19

  
	
  8.6

  	
  Governing Law

  	
  19

  
	
  8.7

  	
  Dispute Resolution

  	
  19

  
	
  8.8

  	
  Interpretation and Construction

  	
  21

  
	
  8.9

  	
  Severability

  	
  21

  
	
  8.10

  	
  Entire Agreement

  	
  21

  
	
  8.11

  	
  Non-liability
  of Trustees and Directors

  	
  22

  

 

 

AMENDED
AND RESTATED

SHAREHOLDERS
AGREEMENT

 

AFFILIATES
INSURANCE COMPANY

 

This Amended and Restated Shareholders Agreement (this “Agreement”),
dated December 16, 2009, by and among Affiliates Insurance Company, an
Indiana insurance company (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”), Reit Management &
Research LLC, a Delaware limited liability company (“RMR”, and together
with FVE, HPT, HRP, SNH and TA, the “Original Shareholders”), and Government Properties Income Trust, a
Maryland real estate investment trust (“GOV”, and together with the
Original Shareholders, the “Shareholders”), amends and restates the
Shareholders Agreement (the “Original Shareholders Agreement”), dated February 27,
2009 (the “Original Date”), by and among the Company and the Original
Shareholders, effective as of the date first set forth above.

 

RECITALS

 

WHEREAS, the Company has been formed and licensed as an insurance
company domiciled in the State of Indiana;

 

WHEREAS, the Original Shareholders previously made the capital
contributions to the Company contemplated by Section 1.1 of this
Agreement;

 

WHEREAS, in connection with the purchase by GOV from the Company of
20,000 shares of common stock, par value of $10.00 per share, of the Company (the
“Shares”) pursuant to a Subscription Agreement (the “GOV Subscription
Agreement”) to be entered into by the Company and GOV, concurrently with
the execution and delivery of this Agreement, the Company, the Original
Shareholders and GOV desire to enter into this Agreement to, among other
things, add GOV as a Shareholder hereunder; 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 held by the
Shareholders and certain other matters.

 

 

NOW, THEREFORE, in consideration of the 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                                 Share Issuances
to Original Shareholders.

 

(a)                        On or about the Original Date, the Company issued and sold to
each Original Shareholder, and each Original Shareholder purchased from the
Company, 100 Shares at a purchase price of $250.00 per Share.

 

(b)                       Within five business days after the Company notified the
Original Shareholders that the Department of Insurance of the State of Indiana
had notified the Company that it intended to commence its financial review of
the Company, the Company issued and sold to each Original Shareholder, and each
Original Shareholder purchased 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,
except to the extent otherwise provided under this Agreement; 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 Original Date.

 

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 Original Shareholders shall reimburse the
Company for such amounts paid by the Company prior to the date hereof in equal
proportion.  The Shareholders shall
reimburse the Company for such amounts paid by the Company on or after the date
hereof in equal proportion.

 

1.4                                 Share Issuance
to GOV.  As described in the recitals,
concurrently with the execution and delivery of this Agreement, GOV is
purchasing 20,000 Shares from the Company pursuant to the GOV Subscription
Agreement and, upon such purchase, GOV shall then become a Shareholder
effective as of such purchase.

 

2

 

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.

 

(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 

 

3

 

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.

 

(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, for any of the
Original Shareholders, on the Original Date, and for GOV, 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 

 

4

 

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
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 

 

5

 

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 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 

 

6

 

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 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 

 

7

 

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 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

 

8

 

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, and excluding
with respect to FVE, persons or entities that have rights to acquire 9.8% or
more of FVE’s shares of common stock by virtue of their holding convertible
notes of FVE outstanding 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 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 

 

9

 

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.  The
prohibition on the preemptive rights and the change of control call options
created by Sections 3.2 and 3.3, respectively, of this Article III shall
not apply to the 20,000 Shares to be issued and sold by the Company to GOV
pursuant to the GOV Subscription Agreement and HRP’s spin off of GOV pursuant
to the initial public offering of GOV shares, which occurred during 2009 and
prior to the date of this Agreement, respectively, and the Original
Shareholders waive any rights they may have or have had under Sections 3.2 and
3.3 of this Article III with respect to such transactions.

 

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;

 

(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.

 

10

 

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 each Shareholder and the Company 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,
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 

 

11

 

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 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.

 

12

 

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 (unless any such representation
or warranty speaks as of another date, in which case, as of such date), 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 for the Shares previously issued pursuant to Section 1.1.  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.

 

(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).

 

13

 

(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.

 

(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, 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.

 

14

 

(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.

 

(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.  Except as provided by this Agreement, 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.

 

15

 

(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.

 

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

 

16

 

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

 

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

 

17

 

Notices to RMR:

 

Reit
Management & Research LLC

400
Centre Street

Newton, Massachusetts 02458

Attention:  President

Facsimile No.:  (617) 928-1305

 

and

 

Notices
to GOV:

 

Government Properties Income Trust

400 Centre Street

Newton, Massachusetts 02458

Attention:  President

Facsimile No.:  (617) 219-1441

 

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
and Section 3.4, no party may assign this Agreement or its rights
hereunder or delegate its duties hereunder without the written consent of the
other parties.  Except as otherwise
provided in Section 8.7, 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.

 

(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

 

18

 

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 between the parties (i) 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 or (ii) brought by or on behalf of any shareholder of the Company
(which, for purposes of this Section 8.7, shall mean any shareholder of
record or any beneficial owner of shares of the Company, or any former
shareholder of record or beneficial owner of shares of the Company), either on
his, her or its own behalf, on behalf of the Company or on behalf of any series
or class of shares of the Company or shareholders of the Company against the
Company or any director, officer, manager (including RMR 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 or the articles of incorporation or bylaws of the
Company (all of which are referred to as “Disputes”), or relating in any
way to such a Dispute or Disputes shall, on the demand of any party to such
Dispute, be resolved through binding and final arbitration in accordance with
the Commercial Arbitration Rules (the “Rules”) of the American
Arbitration Association (“AAA”) then in effect, except as those Rules may
be modified in this Section 8.7. 
For the avoidance of doubt, and not as a limitation, Disputes are
intended to include derivative actions against directors, officers or managers
of the Company and class actions by a shareholder against those individuals or
entities and the Company.  For the
avoidance of doubt, a Dispute shall include a Dispute made derivatively on
behalf of one party against another party.

 

(b)                                 There shall be three arbitrators.  If there are only two parties to the Dispute,
each party shall select one arbitrator within 15 days after receipt by
respondent of a copy of the demand for arbitration.  Such arbitrators may be affiliated or
interested persons of such parties.  If
either party fails to timely select an arbitrator, the other party to the
Dispute shall select the second arbitrator who shall be neutral and impartial
and shall not be affiliated with or an interested person of either party.  If there are more than two parties to the
Dispute, all claimants, on the one hand, and all respondents, on the other
hand, shall each select, by the vote of a majority of the claimants or the
respondents, as the case may be, one arbitrator. Such arbitrators may be
affiliated or interested persons of the claimants or the respondents, as the
case may be.  If either all claimants or
all respondents fail to timely select an arbitrator then such arbitrator (who
shall be neutral, impartial and unaffiliated with any party) shall be appointed
by the AAA.  The two arbitrators so
appointed shall jointly appoint the third and presiding arbitrator (who shall
be neutral, impartial and unaffiliated with any party) within 15 days of the
appointment of the second arbitrator.  If
the third arbitrator has not been appointed within the

 

19

 

time limit specified herein, then the AAA shall provide a
list of proposed arbitrators in accordance with the Rules, and the arbitrator
shall be appointed by the AAA in accordance with a listing, striking and
ranking procedure, with each party having a limited number of strikes,
excluding strikes for cause.

 

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

 

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

 

(h)                                 Any monetary award shall be made and payable in U.S. dollars
free of any tax, deduction or offset. 
Each party against which the Award assesses a monetary obligation shall
pay that obligation on or before the 30th day following the date of the Award or such
other date as the Award may provide.

 

(i)                                     This Section 8.7 is intended to benefit and be
enforceable by the shareholders, directors, officers, managers (including RMR
or its successor), agents or employees of the Company and the Company and shall
be binding on the shareholders of the

 

20

 

Company and the Company, as applicable, and shall be in
addition to, and not in substitution for, any other rights to indemnification
or contribution that such individuals or entities may have by contract or
otherwise.

 

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”.

 

(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 and the GOV Subscription Agreement constitute the entire agreement,
and supersede all prior agreements and understandings, both written and oral,
among the parties with respect to the subject matter of this Agreement.

 

21

 

8.11                           Non-liability
of Trustees and Directors.

 

(a)                        COPIES OF THE DECLARATIONS OF TRUST OF HPT, HRP, SNH AND GOV,
AS IN EFFECT ON THE DATE HEREOF, TOGETHER WITH ALL AMENDMENTS AND SUPPLEMENTS
THERETO, IF ANY, 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, SNH
AND GOV, PROVIDE THAT NO TRUSTEE, OFFICER, SHAREHOLDER, EMPLOYEE OR AGENT OF
HPT, HRP, SNH OR GOV, AS APPLICABLE, SHALL BE HELD TO ANY PERSONAL LIABILITY,
JOINTLY OR SEVERALLY, FOR ANY OBLIGATION OF, OR CLAIM AGAINST, HPT, HRP, SNH OR
GOV.  ALL PERSONS DEALING WITH HPT, HRP,
SNH OR GOV IN ANY WAY, SHALL LOOK ONLY TO THE ASSETS OF HPT, HRP, SNH OR GOV,
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 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]

 

22

 

IN
WITNESS WHEREOF, the undersigned have executed, or have caused to be executed,
this Amended and Restated Shareholders Agreement on the date first written
above.

 

	
  AFFILIATES
  INSURANCE COMPANY

  	
  SENIOR HOUSING PROPERTIES TRUST

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/
  Jennifer B. Clark

  	
   

  	
  By:

  	
  /s/
  David J. Hegarty

  
	
   

  	
  Name:
  Jennifer B. Clark

  	
   

  	
  Name:
  David J. Hegarty

  
	
   

  	
  Title:
    President

  	
   

  	
  Title:   President

  
	
   

  	
   

  
	
  FIVE
  STAR QUALITY CARE, INC.

  	
  TRAVELCENTERS
  OF AMERICA LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/
  Bruce J. Mackey

  	
   

  	
  By:

  	
  /s/
  Mark R. Young

  
	
   

  	
  Name:
  Bruce J. Mackey

  	
   

  	
  Name:
  Mark R. Young

  
	
   

  	
  Title:   President

  	
   

  	
  Title:   Executive
  Vice President and General Counsel

  
	
   

  	
   

  
	
  HOSPITALITY
  PROPERTIES TRUST

  	
  REIT
  MANAGEMENT & RESEARCH LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/
  Mark L. Kleifges

  	
   

  	
  By:

  	
  /s/
  Richard A. Doyle, Jr.

  
	
   

  	
  Name:
  Mark L. Kleifges

  	
   

  	
  Name:
  Richard A. Doyle, Jr.

  
	
   

  	
  Title:
    Chief Financial Officer

  	
   

  	
  Title:
    Senior Vice President

  
	
   

  	
   

  
	
  HRPT
  PROPERTIES TRUST

  	
  GOVERNMENT PROPERTIES INCOME TRUST

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/
  John A. Mannix

  	
   

  	
  By:

  	
  /s/
  David M. Blackman

  
	
   

  	
  Name:
  John A. Mannix

  	
   

  	
  Name:
  David M. Blackman

  
	
   

  	
  Title:   President

  	
   

  	
  Title:   Chief
  Financial OfficerExhibit 10.37

 

	
  

  	
   

  	
  UBS Bank USA

  Variable Credit
  Line Account Number (if applicable)

  5V                57978                CP

  Fixed Credit
  Line Account Number:  (if applicable)

  5F

  
	
   

  	
   

  	
  SS#/TIN

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Internal Use
  Only

  	
   

  

 

Credit Line
Agreement

 

Borrower Agreement

 

BY SIGNING BELOW, THE BORROWER UNDERSTANDS,
ACKNOWLEDGES AND AGREES THAT:

 

A.    The
Borrower has received and read a copy of this Borrower Agreement, the attached
Credit Line Account Application and Agreement (including the Credit Line
Agreement following this Borrower Agreement) and the Loan Disclosure Statement
explaining the risk factors that the Borrower should consider before obtaining
a loan secured by the Borrower’s securities account.  The Borrower agrees to be bound by the terms
and conditions contained in the Credit Line Account Application and Agreement
(including the Credit Line Agreement following this Borrower Agreement) (which
terms and conditions are incorporated by reference).  Capitalized terms used in this Borrower
Agreement have the meanings set forth in the Credit Line Agreement.

 

B.    THE
BORROWER UNDERSTANDS AND AGREES THAT UBS BANK USA MAY DEMAND FULL OR
PARTIAL PAYMENT OF THE CREDIT LINE OBLIGATIONS, AT ITS SOLE OPTION AND WITHOUT
CAUSE, AT ANY TIME, AND THAT NEITHER FIXED RATE ADVANCES NOR VARIABLE RATE
ADVANCES ARE EXTENDED FOR ANY SPECIFIC TERM OR DURATION. THE BORROWER
UNDERSTANDS AND AGREES THAT ALL ADVANCES ARE SUBJECT TO COLLATERAL MAINTENANCE
REQUIREMENTS. THE BORROWER UNDERSTANDS THAT UBS BANK USA MAY, AT ANY TIME, IN
ITS DISCRETION, TERMINATE AND CANCEL THE CREDIT LINE REGARDLESS OF WHETHER OR
NOT AN EVENT HAS OCCURRED.

 

C.    UNLESS
DISCLOSED IN WRITING TO UBS BANK USA AT THE TIME OF THIS AGREEMENT, AND
APPROVED BY UBS BANK USA, THE BORROWER AGREES NOT TO USE THE PROCEEDS OF ANY
ADVANCE EITHER TO PURCHASE, CARRY OR TRADE IN SECURITIES OR TO REPAY ANY DEBT (I) USED
TO PURCHASE, CARRY OR TRADE IN SECURITIES OR (II) TO ANY AFFILIATE OF UBS
BANK USA. THE BORROWER WILL BE DEEMED TO REPEAT THIS AGREEMENT EACH TIME THE
BORROWER REQUESTS AN ADVANCE.

 

D.    THE BORROWER UNDERSTANDS THAT BORROWING USING SECURITIES AS
COLLATERAL ENTAILS RISKS. SHOULD THE VALUE OF THE SECURITIES IN THE COLLATERAL
ACCOUNT DECLINE BELOW THE REQUIRED COLLATERAL MAINTENANCE REQUIREMENTS, UBS
BANK USA MAY REQUIRE THAT THE BORROWER POST ADDITIONAL COLLATERAL, REPAY PART OR
ALL OF THE BORROWER’S LOAN AND/OR SELL THE BORROWER’S SECURITIES. ANY REQUIRED
LIQUIDATIONS MAY INTERRUPT THE BORROWER’S LONG-TERM INVESTMENT STRATEGIES
AND MAY RESULT IN ADVERSE TAX CONSEQUENCES.

 

E.     Neither UBS Bank USA nor UBS Financial Services Inc. provides
legal or tax advice and nothing herein shall be construed as providing legal or
tax advice.

 

F.     Upon
execution of this Credit Line Account Application and Agreement, the Borrower
declares that all of the information requested in the Application and supplied
by the Borrower is true and accurate and further agrees to promptly notify UBS
Bank USA in writing of any material changes to any or all of the information
contained in the Application including information relating to the Borrower’s
financial situation.

 

G.    Subject
to any applicable financial privacy laws and regulations, data regarding the
Borrower and the Borrower’s securities accounts may be shared with UBS Bank USA
affiliates. Subject to any applicable financial privacy laws and regulations,
the Borrower requests that UBS Bank USA share such personal financial data with
non-affiliates of UBS Bank USA as is necessary or advisable to effect,
administer or enforce, or to service, process or maintain, all transactions and
accounts contemplated by this Agreement.

 

H.    The
Borrower authorizes UBS Bank USA and UBS Financial Services Inc. to obtain a
credit report or other credit references concerning the Borrower (including
making verbal or written inquiries concerning credit history) or to otherwise
verify on update credit information given to UBS Bank USA at any time. The
Borrower authorizes the release of this credit report or other credit
information to UBS Bank USA affiliates as it deems necessary or advisable to
effect, administer or enforce, or to service, process or maintain all
transactions and accounts contemplated by this Agreement, and for the purpose
of offering additional products, from time to time, to the Borrower. The
Borrower authorizes UBS Bank USA to exchange Borrower information with any
party it reasonably believes is conducting a legitimate credit inquiry in
accordance with the Fair Credit Reporting Act. UBS Bank USA may also share
credit or other transactional experience with the Borrower’s designated UBS
Financial Services Inc. Financial Advisor or other parties designated by the
Borrower.

 

I.      UBS
Bank USA is subject to examination by various federal, state and
self-regulatory organizations and the books and records maintained by UBS Bank
USA are subject to inspection and subpoena by these regulators and by federal,
state, and local law enforcement officials. The Borrower also acknowledges that
such regulators and officials may, pursuant to treaty or other arrangements, in
turn disclose such information to the officials or regulators of other
countries, and that U.S. courts may be required to compel UBS Bank USA to
disclose such information to the officials or regulators of other countries.
The Borrower agrees that UBS Bank USA may disclose to such regulators and
officials information about the Borrower and transactions in the credit line
account or other accounts at UBS Bank USA without notice to the Borrower. In
addition, UBS Bank USA may in the context of a private dispute be required by
subpoena or other judicial process to disclose information or produce
documentation related to the Borrower, the credit line account or other
accounts at UBS Bank USA. The Borrower acknowledges and agrees that UBS Bank
USA reserves the right, in its sole discretion, to respond to subpoenas and
judicial process as it deems appropriate.

 

J.     To
help the government fight the funding of terrorism and money laundering
activities, Federal law requires all financial institutions to obtain, verify,
and record information that identifies each person who opens an account. When
the Borrower opens an account with UBS Bank USA, UBS Bank USA will ask for the
Borrower’s name, address, and other information that will allow UBS Bank USA to
identify the Borrower. UBS Bank USA may also ask to see other identifying
documents. UBS Financial Services Inc. and UBS Bank USA are firmly committed to
compliance with all applicable laws, rules and regulations, including
those related to combating money laundering. The Borrower understands and
agrees that the Borrower must take all necessary steps to comply with the
anti-money laundering laws, rules and regulations of the Borrower’s
country of origin, country of residence and the situs of the Borrower’s
transaction.

 

K.    UBS
Bank USA and its affiliates will act as creditors and, accordingly, their
interests may be inconsistent with, and potentially adverse to, the Borrower’s
interests. As a lender and consistent with normal lending practice, UBS Bank
USA may take any steps necessary to perfect its interest in the Credit Line,
issue a call for additional collateral or force the sale of the Borrower’s
securities if the Borrower’s actions or inactions call the Borrower’s
creditworthiness into question. Neither UBS Bank USA nor UBS Financial Services
Inc. will act as Client’s investment advisor with respect to any liquidation.
In fact UBS Bank USA will act as a creditor and UBS Financial Services Inc.
will act as a securities intermediary.

 

L.     The
Borrower understands that, if the Collateral Account is a managed account with
UBS Financial Services Inc., (i) in addition to any fees payable to UBS
Financial Services Inc. in connection with the Borrower’s managed account,
interest will be payable to the Bank on an amount advanced to the Borrower in
connection with the Credit Line Account, and (ii) the performance of the
managed account might not exceed the managed account fees and the interest
expense payable to the Bank in which case the Borrower’s overall rate of return
will be less than the costs associated with the managed account.

 

M.   UBS
Bank USA may provide copies of all credit line account statements to UBS
Financial Services Inc. and to any Guarantor. The Borrower acknowledges and
agrees that UBS Bank USA may share any and all information regarding the
Borrower and the Borrower’s accounts at UBS Bank USA with UBS Financial
Services Inc. UBS Financial Services Inc. may provide copies of all statements
and confirmations concerning each Collateral Account to UBS Bank USA at such
times and in such manner as UBS Bank USA may request and may share with UBS
Bank USA any and all information regarding the Borrower and the Borrower’s
accounts with UBS Financial Services Inc.

 

1

 

	
  

  	
   

  	
  UBS Bank USA

  Variable Credit
  Line Account Number (if applicable)

  5V                57978                CP

  Fixed Credit
  Line Account Number:  (if applicable)

  5F

  
	
   

  	
   

  	
  SS#/TIN

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Internal Use
  Only

  	
   

  

 

Credit Line
Agreement

 

IN WITNESS WHEREOF, the
undersigned (“Borrower”) has signed this Agreement, or has caused this
Agreement to be signed in its name by its duly authorized representatives, as
of the date indicated below.

 

	
   

  	
   

  	
  DATE:

  	
  12/22/2009

  

 

	
  Name of Borrower

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Bruce J. Mackey Jr.

  	
   

  	
  Title:

  	
  President

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Francis R. Murphy III

  	
   

  	
  Title:

  	
  Treasurer

  	
   

  

 

The authorized signatory of the Borrower must be one of the
Authorized Persons designated on the applicable UBS Bank USA supplemental form
executed by the Borrower (e.g., the Supplemental Corporate/Resolution Form (HP
Form)).

 

2

 

	
  

  	
   

  	
  UBS Bank USA

  Variable Credit
  Line Account Number (if applicable)

  5V                57978                CP

  Fixed Credit
  Line Account Number:  (if applicable)

  5F

  
	
   

  	
   

  	
  SS#/TIN

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Internal Use
  Only

  	
   

  

 

Credit Line
Agreement

 

Credit Line Agreement — Demand Facility

 

THIS CREDIT LINE
AGREEMENT (as it may be amended, supplemented or otherwise modified from time
to time, this “Agreement”) is made by and between the party or parties signing
as the Borrower on the Application to which this Agreement is attached
(together and individually, the “Borrower”) and UBS Bank USA (the “Bank”) and,
together with the Application, establishes the terms and conditions that will
govern the uncommitted demand loan facility made available to the Borrower by
the Bank. This Agreement becomes effective upon the earlier of (i) notice
from the Bank (which notice may be oral or written) to the Borrower that the
Credit Line has been approved and (ii) the Bank making an Advance to the
Borrower.

 

1)     Definitions

 

·      “Advance”
means any Fixed Rate Advance or Variable Rate Advance made by the Bank pursuant
to this Agreement.

 

·      “Advance
Advice” means a written or electronic notice by the Bank, sent to the Borrower,
the Borrower’s financial advisor at UBS Financial Services Inc. or any other
party designated by the Borrower to receive the notice, confirming that a
requested Advance will be a Fixed Rate Advance and specifying the amount, fixed
rate of interest and Interest Period for the Fixed Rate Advance.

 

·      “Application”
means the Credit Line Account Application and Agreement that the Borrower has
completed and submitted to the Bank and into which this Agreement is
incorporated by reference.

 

·      “Approved
Amount” means the maximum principal amount of Advances that is permitted to be
outstanding under the Credit Line at any time, as specified in writing by the
Bank.

 

·      “Breakage
Costs” and “Breakage Fee” have the meanings specified in Section 6(b).

 

·      “Business
Day” means a day on which both of the Bank and UBS Financial Services Inc. are
open for business. For notices and determinations of LIBOR, Business Day must
also be a day for trading by and between banks in U.S. dollar deposits in the
London interbank market.

 

·      “Collateral”
has the meaning specified in Section 8(a).

 

·      “Collateral
Account” means, individually and collectively, each account of the Borrower or
Pledgor at UBS Financial Services Inc. or UBS International Inc., as
applicable, that is either identified as a Collateral Account on the
Application to which this Agreement is attached or subsequently identified as a
Collateral Account by the Borrower or Pledgor, either directly or indirectly
through the Borrower’s or Pledgor’s UBS Financial Services Inc. financial
advisor, together with all successors to those identified accounts,
irrespective of whether the successor account bears a different name or account
number.

 

·      “Credit
Line” has the meaning specified in Section 2(a).

 

·      “Credit
Line Account” means each Fixed Rate Account and each Variable Rate Account of
the Borrower that is established by the Bank in connection with this Agreement
and either identified on the Application or subsequently identified as a Credit
Line Account by the Bank by notice to the Borrower, together with all
successors to those identified accounts, irrespective of whether any successor
account bears a different name or account number.

 

·      “Credit
Line Obligations” means, at any time of determination, the aggregate of the
outstanding principal amounts of all Advances, together with all accrued but
unpaid interest on the outstanding principal amounts, any and all fees or other
charges payable in connection with the Advances and any costs of collection
(including reasonable attorneys’ fees) and other amounts payable by the
Borrower under this Agreement, and any and all other present or future
obligations of the Borrower and the other respective Loan Parties under this
Agreement and the related agreements, whether absolute or contingent, whether
or not due or mature.

 

·      “Event”
means any of the events listed in Section 10.

 

·      “Fixed
Rate Advance” means any advance made under the Credit Line that accrues
interest at a fixed rate.

 

·      “Guarantor”
means any party who guaranties the payment and performance of the Credit Line
Obligations.

 

·      “Guaranty
Agreement” means an agreement pursuant to which a Guarantor agrees to guaranty
payment of the Credit Line Obligations.

 

·      “Interest
Period” means, for a Fixed Rate Advance, the number of days, weeks or months
requested by the Borrower and confirmed in the Advance Advice relating to the
Fixed Rate Advance, commencing on the date of (i) the extension of the
Fixed Rate Advance or (ii) any renewal of the Fixed Rate Advance and, in
each case, ending on the last day of the period, If the last day is not a
Business Day, then the Interest Period will end on the immediately succeeding
Business Day. If the last Business Day would fall in the next calendar month,
the Interest Period will end on the immediately preceding Business Day. Each
monthly or longer Interest Period that commences on the fast Business Day of a
calendar month (or on any day for which there is no numerically corresponding
day in the appropriate subsequent calendar month) will end on the last Business
Day of the appropriate calendar month.

 

·      “Joint
Borrower” has the meaning specified in Section 7(a).

 

·      “LIBOR”
means, as of any date of determination for Variable Rate Advances, the
prevailing London Interbank Offered Rate for deposits U.S. dollars having a
maturity of 30 days as published in The Wall Street Journal “Money Rates” Table
on the date of the Advance.

 

If the rate ceases to be
regularly published by The Wall Street Journal, LIBOR will be determined by the
Bank in its sole and absolute discretion. For any day that is not a Business
Day, LIBOR will be the applicable LIBOR in effect immediately prior to that
day.

 

·      “Loan
Party” means each Borrower, Guarantor and Pledgor, each in their respective
capacities under this Agreement or any related agreement.

 

·      “Person”
means any natural person, company, corporation, firm, partnership, joint
venture, limited liability company or limited liability partnership,
association, organization or any other legal entity.

 

·      “Pledgor”
means each Person who pledges to the Bank any Collateral to secure the Credit
Line Obligations (or to secure the obligations of any Guarantor with respect to
the guaranty of the Credit Line Obligations). Pledgors will include (i) each
Borrower who pledges Collateral to secure the Credit Line Obligations, (ii) each
Guarantor who has pledged collateral to secure the Credit Line Obligations or
its obligations under a Guaranty Agreement, (iii) any spouse of a Borrower
who executes a spouse’s pledge and consent agreement with respect to a jointly
held collateral account, (iv) any other joint account holder who executes
a joint account holder pledge and consent agreement with respect to a jointly
held collateral account, and (v) any other Person who executes a pledge
agreement with respect to the Credit Line.

 

·      “Premier
Credit Line” means any Credit Line with an Approved Amount equal to or greater
than $100,000.

 

·      “Prime
Credit Line” means any Credit Line with an Approved Amount less than $100,000.

 

3

 

	
  

  	
   

  	
  UBS Bank USA

  Variable Credit
  Line Account Number (if applicable)

  5V                57978                CP

  Fixed Credit
  Line Account Number:  (if applicable)

  5F

  
	
   

  	
   

  	
  SS#/TIN

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Internal Use
  Only

  	
   

  

 

Credit Line
Agreement

 

·      “Prime
Rate” means the floating “Prime Rate” as published in The Wall Street Journal “Money
Rates” Table from time to time. The Prime Rate will change as and when the
Prime Rate as published in The Wall Street Journal changes. In the event that
The  Wall Street Journal does not
publish a Prime Rate, the Prime Rate will be the rate as determined by the Bank
in its sole and absolute discretion.

 

·      “Securities
Intermediary” has the meaning specified in Section 9.

 

·      “UBS
Bank USA Fixed Funding Rate” means, as of any date of determination for Fixed
Rate Advances, an internally computed rate established from time-to-time by the
Bank, in its sole discretion, based upon the LIBOR swap curve for a
corresponding period as well as the Bank’s assessment of other lending rates
charged in the financial markets.

 

·      “UBS
Financial Services Inc.” means UBS Financial Services Inc. and its successors.

 

·      “UBS-I”
means UBS International Inc. and its successors.

 

·      “Variable
Rate Advance” means any advance made under the Credit Line that accrues interest
at a variable rate.”

 

2)     Establishment
of Credit Line; Termination

 

a)     Upon
the effectiveness of this Agreement, the Bank establishes an UNCOMMITTED, DEMAND revolving line of
credit (the “Credit Line”) in an amount up to the Approved Amount. The Bank
may, from time to time upon request of the Borrower, without obligation and in
its sole and absolute discretion, authorize and make one or more Advances to
the Borrower. The Borrower acknowledges that the Bank has no obligation to make
any Advances to the Borrower. The Bank may carry each Variable Rate Advance in
a Variable Rate Account and may carry each Fixed Rate Advance in a Fixed Rate
Account, but all Advances will constitute extensions of credit pursuant to a
single Credit Line. The Approved Amount will be determined, and may be adjusted
from time to time, by the Bank in its sole and absolute discretion.

 

b)    THE BORROWER AND EACH OTHER LOAN PARTY UNDERSTAND AND AGREE
THAT THE BANK MAY DEMAND FULL OR PARTIAL PAYMENT OF THE CREDIT LINE
OBLIGATIONS, AT ITS SOLE AND ABSOLUTE DISCRETION AND WITHOUT CAUSE, AT ANY
TIME, AND THAT NEITHER FIXED RATE ADVANCES NOR VARIABLE RATE ADVANCES ARE
EXTENDED FOR ANY SPECIFIC TERM OR DURATION.

 

c)     UNLESS DISCLOSED IN WRITING TO THE BANK AT THE TIME OF THE
APPLICATION, AND APPROVED BY THE BANK, THE BORROWER AGREES NOT TO USE THE
PROCEEDS OF ANY ADVANCE EITHER TO PURCHASE, CARRY OR TRADE IN SECURITIES OR TO
REPAY ANY DEBT (I) USED TO PURCHASE, CARRY OR TRADE IN SECURITIES OR (II) TO
ANY AFFILIATE OF THE BANK. THE BORROWER WILL BE DEEMED TO REPEAT THE AGREEMENT
IN THIS SECTION 2(C) EACH TIME IT REQUESTS AN ADVANCE.

 

d)    Prior
to the first Advance under the Credit Line, the Borrower must sign and deliver
to the Bank a Federal Reserve Form U-1 and all other documentation as the
Bank may require. The Borrower acknowledges that neither the Bank nor any of
its affiliates has advised the Borrower in any manner regarding the purposes
for which the Credit Line will be used.

 

e)     The
Borrower consents and agrees that, in connection with establishing the Credit
Line Account, approving any Advances to the Borrower or for any other purpose
associated with the Credit Line, the Bank may obtain a consumer or other credit
report from a credit reporting agency relating to the Borrower’s credit history.
Upon request by the Borrower, the Bank will inform the Borrower (i) whether
or not a consumer or other credit report was requested, and (ii) if so,
the name and address of the consumer or other credit reporting agency that
furnished the report.

 

f)     The
Borrower understands that the Bank will, directly or indirectly, pay a portion
of the interest that it receives to the Borrower’s financial advisor at UBS
Financial Services Inc. or one of its affiliates. To the extent permitted by
applicable law, the Bank may also charge the Borrower fees for establishing and
servicing the Credit Line Account.

 

g)    Following
each month in which there is activity in the Borrower’s Credit Line Account in
amounts greater than $1, the Borrower will receive an account statement showing
the new balance, the amount of any new Advances, year to date interest charges,
payments and other charges and credits that have been registered or posted to
the Credit Line Account.

 

h)    Each
of the Loan Parties understands and agrees that the Bank may, at any time, in
its sole and absolute discretion, terminate and cancel the Credit Line
regardless of whether or not an Event has occurred. In the event the Bank
terminates and cancels the Credit Line the Credit Line Obligations shall be
immediately due and payable in full. If the Credit Line Obligations are not
paid in full, the Bank shall have the right, at its option, to exercise any or
all of its remedies described in Section 10 of this Agreement.

 

3)     Terms
of Advances

 

a)     Advances
made under this Agreement will be available to the Borrower in the form, and
pursuant to procedures, as are established from time to time by the Bank in its
sole and absolute discretion. The Borrower and each Loan Party agree to
promptly provide all documents, financial or other information in connection
with any Advance as the Bank may request. Advances will be made by wire
transfer of funds to an account as specified in writing by the Borrower or by
any other method agreed upon by the Bank and the Borrower. The Borrower
acknowledges and agrees that the Bank will not make any Advance to the Borrower
unless the collateral maintenance requirements that are established by the Bank
in its sole and absolute discretion have been satisfied.

 

b)    Each
Advance made under a Premier Credit Line will be a Variable Rate Advance unless
otherwise designated as a Fixed Rate Advance in an Advance Advice sent by the
Bank to the Borrower. The Bank will not designate any Advance as a Fixed Rate
Advance unless it has been requested to do so by the Borrower (acting directly
or indirectly through the Borrower’s UBS Financial Services Inc. financial
advisor or other agent designated by the Borrower and acceptable to the Bank).
Each Advance Advice will be conclusive and binding upon the Borrower, absent
manifest error, unless the Borrower otherwise notifies the Bank in writing no
later than the close of business, New York time, on the third Business Day
after the Advance Advice is received by the Borrower.

 

c)     Each
Advance made under a Prime Credit Line will be a Variable Advance.

 

d)    Unless
otherwise agreed by the Bank (i) all Fixed Rate Advances must be in an
amount of at least $100,000, and (ii) all Variable Rate Advances taken by
wire transfer must be in an amount of at least $2,500. If the Borrower is a
natural person, the initial Variable Rate Advance under the Credit Line must be
in an amount equal to at least $25,001 (the “Initial Advance Requirement”). If
the initial Advance requested by the Borrower is made in the form of a check
drawn on the Credit Line that does not satisfy the initial Advance Requirement,
then, in addition to and not in limitation of the Bank’s rights, remedies,
powers or privileges under this Agreement or applicable law, the Bank may, in
its sole and absolute discretion

 

(i)        pay
the check drawn by the Borrower if, prior to paying that check, the Bank makes
another Advance to the Borrower, which Advance shall he in an amount not less
than $25,001; or

 

(ii)       pay
the check drawn by the Borrower; or

 

(iii)      decline
to pay (bounce) the check.

 

4

 

	
  

  	
   

  	
  UBS Bank USA

  Variable Credit
  Line Account Number (if applicable)

  5V                57978                CP

  Fixed Credit
  Line Account Number:  (if applicable)

  5F

  
	
   

  	
   

  	
  SS#/TIN

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Internal Use
  Only

  	
   

  

 

Credit Line
Agreement

 

If the Bank elects option (ii), no
interest shall accrue on the amount of the Advance made by paying the check,
and the amount of that Advance shall be due and payable to the Bank immediately
(with or without demand by the Bank).

 

4)     Interest

 

a)     Each
Fixed Rate Advance will bear interest at a fixed rate and for the Interest
Period each as specified in the related Advance Advice. The rate of interest
payable on each Fixed Rate Advance will be determined by adding a percentage
rate to the UBS Bank USA Fixed Funding Rate, as of the date that the fixed rate
is determined.

 

b)    Each
Variable Rate Advance under a Premier Credit Line will bear interest at a
variable rate equal to LIBOR, adjusted daily, plus the percentage rate that
(unless otherwise specified by the Bank in writing) is shown on Schedule I
below for the Approved Amount of the Credit Line. For Premier Credit Lines, the
rate of interest payable on Variable Rate Advances is subject to change without
notice in accordance with fluctuations in LIBOR and in the Approved Amount. On
each day that LIBOR changes or the Approved Amount crosses one of the
thresholds that is indicated on Schedule I (or that is otherwise specified by
the Bank in writing), the interest rate on all Variable Rate Advances will
change accordingly.

 

c)     Each
Variable Rate Advance under a Prime Credit Line will bear interest at a
variable rate equal to the Prime Rate, adjusted daily, plus the percentage rate
that (unless otherwise specified by the Bank in writing) is shown on the
attached Schedule II and that corresponds to the aggregate principal amount
outstanding under the Prime Credit Line on that day. For Prime Credit Lines,
the rate of interest payable on Variable Rate Advances is subject to change
without notice in accordance with fluctuations in the Prime Rate and in the
aggregate amount outstanding under the Prime Credit Line. On each date that the
Prime Rate changes or the aggregate principal amount outstanding under the
Prime Credit Line crosses one of the thresholds that is indicated on Schedule
II (or that is otherwise specified by the Bank in writing), the interest rate
on all Variable Rate Advances will change accordingly.

 

5)     Payments

 

a)     Each Fixed Rate Advance will be due and payable in full ON
DEMAND or, if not earlier demanded by the Bank, on the last day of the
applicable Interest Period. Any Fixed Rate Advance
as to which the Bank has not made a demand for payment and that is not paid in
full or renewed, which renewal is in the sole and absolute discretion of the
Bank, (pursuant to procedures as may be established by the Bank) as another
Fixed Rate Advance on or before the last day of its Interest Period, will be
automatically renewed on that date as a U.S. dollar denominated, Variable Rate
Advance in an amount (based, in the case of any conversion of a non-U.S. dollar
denominated Fixed Rate Advance, upon the applicable, spot currency exchange
rate as of the maturity date, as determined by the Bank) equal to the unpaid
principal balance of the Fixed Rate Advance plus any accrued but unpaid
interest on the Fixed Rate Advance, which Variable Rate Advance will then
accrue additional interest at a variable rate as provided in this Agreement.

 

b)    Each Variable Rate Advance will be due and payable ON DEMAND.

 

c)     The
Borrower promises to pay the outstanding principal amount of each Advance,
together with all accrued but unpaid interest on each Advance, any and all fees
or other charges payable in connection with each Advance, on the date the principal
amount becomes due (whether by reason of demand, the occurrence of a stated
maturity date, by reason of acceleration or otherwise). The Borrower further
promises to pay interest in respect of the unpaid principal balance of each
Advance from the date the Advance is made until it is paid in full. All
interest will be computed on the basis of the number of days elapsed and a
360-day year. Interest on each Advance will be payable in arrears as follows.

 

(i)       for
Fixed Rate Advances - on the last day of the Interest Period (or if the
Interest Period is longer than three months, on the last day of each three
month period following the date of the Advance) and on each date that all or
any portion of the principal amount of the Fixed Rate Advance becomes due or is
paid, and

 

(ii)      for
Variable Rate Advances - on the twenty-second day of each month other than
December, and on the thirty-first day of December, and on each date that all or
any portion of the principal amount of the Variable Rate Advance becomes due or
is paid

 

To the extent permitted by law, and
without limiting any of the Bank’s other rights and remedies under the
Agreement, interest charges on any Advance that are not paid when due will be
treated as principal and will accrue interest at a variable rate from the date
the payment of interest was due until it is repaid in full.

 

d)    All
payments of principal, interest or other amounts payable under this Agreement
will be made in immediately available funds and in the same currency in which
the Advance was made, which unless otherwise agreed by the Bank, will be U.S.
dollars. UBS Financial Services Inc. or UBS International Inc., as applicable,
may act as collecting and servicing agent for the Bank for the Advances. All
payments will be made by wire transfer of funds to an account specified by the
Bank or by another method agreed upon by the Bank and the Borrower. Upon
receipt of all payments, the Bank will credit the same to the Credit Line
Account. The Bank shall apply the proceeds of any payments in the following
order, first to any Breakage Costs, Breakage Fee, other fees, costs of
collection and expenses, second to the outstanding principal amount of the
related Advance and third to accrued interest.

 

e)     All
payments must be made to the Bank free and clear of any and all present arid
future taxes (including withholding taxes), levies, imposts, duties,
deductions, fees, liabilities and similar charges other than those imposed on
the overall net income of the Bank. If so requested by the Bank, the Borrower
will deliver to the Bank the original or a certified copy of each receipt
evidencing payment of any taxes or, if no taxes are payable in respect of any
payment under this Agreement, a certificate from each appropriate taxing
authority, or an opinion of counsel in form and substance and from counsel
acceptable to the Bank in its sole and absolute discretion, in either case
stating that the payment is exempt from or not subject to taxes. If any taxes
or other charges are required to be withheld or deducted from any amount
payable by the Borrower under this Agreement, the amount payable will be
increased to the amount which, after deduction from the increased amount of all
taxes and other charges required to be withheld or deducted from the amount
payable, will yield to the Bank the amount stated to be payable under this
Agreement. If any of the taxes or charges are paid by the Bank, the Borrower
will reimburse the Bank on demand for the payments, together with all interest
and penalties that may be imposed by any governmental agency. None of the Bank,
UBS Financial Services Inc., UBS-I or their respective employees has provided
or will provide legal advice to the Borrower or any Loan Party regarding
compliance with (or the implications of the Credit Line and the related
guaranties and pledges under) the laws (including tax laws) of the jurisdiction
of the Borrower or any Loan Party or any other jurisdiction, The Borrower and
each Loan Party are and shall be solely responsible for, and the Bank shall
have no responsibility for, the compliance by the Loan Parties with any and all
reporting and other requirements arising under any applicable laws.

 

f)     In
no event will the total interest and fees, if any, charged under this Agreement
exceed the maximum interest rate or total fees permitted by law. In the event
any excess interest or fees are collected, the same will be refunded or
credited to the Borrower. If the amount of interest payable by the Borrower for
any period is reduced pursuant to this Section 5(f), the amount of
interest payable for each succeeding period will be increased to the maximum
rate permitted by law until the amount of the reduction has been received by
the Bank.

 

5

 

	
  

  	
   

  	
  UBS Bank USA

  Variable Credit
  Line Account Number (if applicable)

  5V                57978                CP

  Fixed Credit
  Line Account Number:  (if applicable)

  5F

  
	
   

  	
   

  	
  SS#/TIN

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Internal Use
  Only

  	
   

  

 

Credit Line
Agreement

 

6)     Prepayments;
Breakage Charges

 

a)     The
Borrower may repay any Variable Rate Advance at any time, in whole or in part,
without penalty.

 

b)    The
Borrower may repay any Fixed Rate Advance in whole. The Borrower may not repay
any Fixed Rate Advance in part. The Borrower agrees to reimburse the Bank,
immediately upon demand, for any loss or cost (“Breakage Costs”) that the Bank
notifies the Borrower has been incurred by the Bank as a result of (i) any
payment of the principal of a Fixed Rate Advance before the expiration of the
Interest Period for the Fixed Rate Advance (whether voluntarily, as a result of
acceleration, demand or otherwise), or (ii) the Customer’s failure to take
any Fixed Rate Advance on the date agreed upon, including any loss or cost
(including loss of profit or margin) connected with the Bank’s re-employment of
the amount so prepaid or of those funds acquired by the Bank to fund the
Advance not taken on the agreed upon date.

 

Breakage Costs will be calculated by
determining the differential between the stated rate of interest (as determined
in accordance with Section 4(a) of the Agreement) for the Fixed Rate
Advance and prevailing UBS Bank USA Fixed funding Rate and multiplying the
differential by the sum of the outstanding principal amount of the Fixed Rate
Advance (or the principal amount of Fixed Rate Advance not taken by the
Borrower) multiplied by the actual number of days remaining in the Interest
Period for the Fixed Rate Advance (based upon a 360-day year). The Borrower
also agrees to promptly pay to the Bank an administrative fee (“Breakage Fee”)
in connection with any permitted or required prepayment. The Breakage Fee will
be calculated by multiplying the outstanding principal amount of the Fixed Rate
Advance (or the principal amount of Fixed Rate Advance not taken by the
Borrower) by two basis points (0.02%) (with a minimum Breakage Fee of $100,00),
Any written notice from the Bank as to the amount of the loss or cost will be
conclusive absent manifest error.

 

7)     Joint
Credit Line Account Agreement; Suspension and Cancellation

 

a)     If
more than one Person is signing this Agreement as the “Borrower”, each party (a
“Joint Borrower”) will be Jointly and severally liable for the Credit Line
Obligations, regardless of any change in business relations, divorce, legal
separation, or other legal proceedings or in any agreement that may affect
liabilities between the parties. Except as provided below for the reinstatement
of a suspended or cancelled Credit Line, and unless otherwise agreed by the
Bank in writing, the Bank may rely on, and each Joint Borrower will be
responsible for, requests for Advances, directions, instructions and other
information provided to the Bank by any Joint Borrower.

 

b)    Any
Joint Borrower may request the Bank to suspend or cancel the Credit Line by
sending the Bank a written notice of the request addressed to the Bank at the
address shown on the Borrower’s periodic Credit Line Account statements. Any
notice will become effective three Business Days after the date that the Bank
receives it, and each Joint Borrower will continue to be responsible for paying
(i) the Credit Line Obligations as of the effective date of the notice,
and (ii) all Advances that any Joint Borrower has requested but that have
not yet become part of the Credit Line Obligations as of the effective date of
the notice. No notice will release or in any other way affect the Bank’s
interest in the Collateral. All subsequent requests to reinstate credit
privileges must be signed by all Joint Borrowers comprising the Borrower,
including the Joint Borrower requesting the suspension of credit privileges.
Any reinstatement will be granted or denied in the sole and absolute discretion
of the Bank.

 

c)     All
Credit Line Obligations will become immediately due and payable in full as of
the effective date of any suspension or cancellation of the Credit Line. The
borrower will be responsible for the payment of all charges incurred on the
Advances after the effective date. The Bank will not release any Loan Party
from any of the obligations under this Agreement or any related agreement until
the Credit Line Obligations have been paid in full and this Agreement has been
terminated.

 

8)     Collateral;
Grant of Security Interest; Set-off

 

a)     To
secure payment or performance of the Credit Line Obligations, the Borrower
assigns, transfers and pledges to the Bank, and grants to the Bank a first
priority lien and security interest in the following assets and rights of the
Borrower, wherever located and whether owned now or acquired or arising in the
future. (i) each Collateral Account, (ii) any and all money, credit
balances, certificated and uncertificated securities, security entitlements,
commodity contracts, certificates of deposit, instruments, documents,
partnership interests, general intangibles, financial assets and other
investment property now or in the future credited to or carried, held or
maintained in any Collateral Account. (iii) any and all over-the- counter
options, futures, foreign exchange, swap or similar contracts between the
Borrower and either UBS Financial Services Inc. or any of its affiliates, (iv) any
and all accounts of the Borrower at the Bank or any of its affiliates, (v) any
and all supporting obligations and other rights ancillary or attributable to,
or arising in any way in connection with, any of the foregoing, and (vi) any
and all interest, dividends, distributions and other proceeds of any of the
foregoing, including proceeds of proceeds (collectively, the “Collateral”).

 

b)    The
Borrower and if applicable, any Pledgor on the Collateral Account, will take
all actions reasonably requested by the Bank to evidence, maintain and perfect
the Bank’s first priority security interest in, and to enable the Bank to
obtain control over, the Collateral and any additional collateral pledged by
the Pledgors, including but not limited to making, executing, recording and
delivering to the Bank (and authorizes the Bank to file, without the signature
of the Borrower and any Pledgor where permitted by applicable law) financing
statements and amendments thereto, control agreements, notices, assignments,
listings, powers, consents and other documents regarding the Collateral and the
Bank’s security interest in the Collateral in such Jurisdiction and in a form
as the Bank reasonably may require. Each Loan Party irrevocably authorizes and
appoints each of the Bank and UBS Financial Services Inc., as collateral agent,
to act as their agent and attorney-in-fact to file any documents or to execute
any documents in their name, with or without designation of authority. Each
Loan Party acknowledges that it will be obligated in respect of the
documentation as if it had executed the documentation itself.

 

c)     The
Borrower (and, if applicable, any other Pledgor on the Collateral Account)
agrees to maintain in a Collateral Account, at all times, Collateral having an
aggregate lending value as specified by the Bank from time to time.

 

d)    The
Bank’s sole duty for the custody, safe keeping and physical preservation of any
Collateral in its possession will be to deal with the Collateral in the same
manner as the Bank deals with similar property for its own account. The
Borrower (and, if applicable, any other Pledgor on the Collateral Account)
agrees that the Bank will have no responsibility to act on any notice of
corporate actions or events provided to holders of securities or other
investment property included in the Collateral. The Borrower (and, if
applicable, any other Pledgor on the Collateral Account) agrees to (i) notify
the Bank promptly upon receipt of any communication to holders of the investment
property disclosing or proposing any stock split, stock dividend, extraordinary
cash dividend, spin-off or other corporate action or event as a result of which
the Borrower or Pledgor would receive securities, cash (other than ordinary
cash dividends) or other assets in respect of the investment property, and (ii) immediately
upon receipt by the Borrower or Pledgor of any of these assets, cause them to
be credited to a Collateral Account or deliver them to or as directed by the
Bank as additional Collateral.

 

e)     The
Borrower (and, if applicable, any other Pledgor on the Collateral Account)
agrees that all principal, interest, dividends, distributions, premiums or
other income and other payments received by the Bank or credited to the
Collateral Account in respect of any Collateral may be held by the Bank as
additional Collateral or applied by the Bank to the Credit Line Obligations.
The Bank may create a security interest in any of the Collateral and may, at
any time and at its option, transfer any securities or other investment
property constituting Collateral to a securities account maintained in its name
or cause any Collateral Account to be redesignated or renamed in the name of
the Bank.

 

6

 

	
  

  	
   

  	
  UBS Bank USA

  Variable Credit
  Line Account Number (if applicable)

  5V                57978                CP

  Fixed Credit
  Line Account Number:  (if applicable)

  5F

  
	
   

  	
   

  	
  SS#/TIN

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Internal Use
  Only

  	
   

  

 

Credit Line
Agreement

 

f)     The
Borrower (and, if applicable, any other Pledgor on the Collateral Account)
agrees that if a Collateral Account has margin features, the margin features
will be removed by UBS Financial Services Inc. or UBS International Inc., as
applicable, so long as there is no outstanding margin debit in the Collateral
Account.

 

g)    If
the Collateral Account permits cash withdrawals in the form of check writing,
access card charges, bill payment and/ or electronic funds transfer services
(for example, Resource Management Account®, Business Services Account BSA®,
certain Basic Investment Accounts and certain accounts enrolled in UBS
Financial Services Inc. Investment Consulting Services programs), the Borrower
(and, if applicable, any other Pledgor on the Collateral Account) agrees that
the “Withdrawal Limit” for the Collateral Account, as described in the
documentation governing the account will be reduced on an ongoing basis so that
the aggregate lending value of the Collateral remaining in the Collateral
Account following the withdrawal may not be less than the amount required
pursuant to Section 8(c).

 

h)    In
addition to the Bank’s security interest, the Borrower (and, if applicable, any
other Pledgor on the Collateral Account) agrees that the Bank will at all times
have a right to set off any or all of the Credit Line Obligations at or after
the time at which they become due, whether upon demand, at a stated maturity
date, by acceleration or otherwise, against all securities, cash, deposits or
other property in the possession of or at any time in any account maintained
with the Bank or any of its affiliates by or for the benefit of the Borrower,
whether carried individually or jointly with others. This right is in addition
to, and not in limitation of, any right the Bank may have at law or otherwise.

 

i)      The
Bank reserves the right to disapprove any Collateral and to require the
Borrower at any time to deposit into the Borrower’s Collateral Account
additional Collateral in the amount as the Bank requests or to substitute new
or additional Collateral for any Collateral that has previously been deposited
in the Collateral Account.

 

9)     Control

 

For the purpose of
giving the Bank control over each Collateral Account and in order to perfect
the Bank’s security interests in the Collateral, the Borrower and each Pledgor
on the applicable Collateral Account consents to compliance by UBS Financial
Services Inc., UBS-1 or any other securities intermediary (in any case, the “Securities
Intermediary”) maintaining a Collateral Account with entitlement orders and
instructions from the Bank (or from any assignee or successor of the Bank)
regarding the Collateral Account and any financial assets or other property
held therein without the further consent of the Borrower or any other Pledgor
on the applicable Collateral Account. Without limiting the foregoing, the
Borrower and each Pledger on the Collateral Account acknowledges. consents and
agrees that, pursuant to a control agreement entered into between the Bank and
the Securities Intermediary

 

a)     The
Securities Intermediary will comply with entitlement orders originated by the
Bank regarding any Collateral Account without further consent from the Borrower
or any Pledgor. The Securities Intermediary will treat all assets credited to a
Collateral Account, including money and credit balances, as financial assets
for purposes of Article 8 of the Uniform Commercial Code.

 

b)    In
order to enable the Borrower and any Pledgor on the applicable Collateral
Account to trade financial assets that are from time to time credited to a
Collateral Account, the Securities Intermediary may comply with entitlement
orders originated by the Borrower or any Pledgor on the applicable Collateral
Account (or if so agreed by the Bank, by an investment adviser designated by
the Borrower or any Pledgor on the applicable Collateral Account and acceptable
to the Bank and the Securities Intermediary) regarding the Collateral Account,
but only until the time that the Bank notifies the Securities Intermediary,
that the Bank is asserting exclusive control over the Collateral Account. After
the Securities Intermediary has received a notice of exclusive control and has
had a reasonable opportunity to comply, it will no longer comply with
entitlement orders originated by the Borrower or any Pledgor (or by any
investment adviser designated by the Borrower or any Pledgor) concerning the
Collateral Account. Notwithstanding the foregoing, however, and irrespective of
whether it has received any notice of exclusive control, the Securities
Intermediary will not comply with any entitlement order originated by the
Borrower or any Pledgor (or by any investment adviser designated by the
Borrower or any Pledgor) to withdraw any financial assets from a Collateral
Account or to pay any money, free credit balance or other amount owing on a
Collateral Account (other than cash withdrawals and payments not exceeding the “Withdrawal
Limit as contemplated in Section 8 (g)) without the prior consent of the
Bank.

 

10)   Remedies

 

a)     If
any of the following events (each, an “Event”) occurs

 

(i)          the
Borrower fails to pay any amount due under this Agreement,

 

(ii)         the
Borrower and/or any other relevant Loan Party fails to maintain sufficient
Collateral in a Collateral Account as required by the Bank or any Guarantor
fails to maintain collateral as required by the Bank under its Guaranty
Agreement,

 

(iii)        the
Borrower or any other Loan Party breaches or fails to perform any other
covenant, agreement, term or condition that is applicable to it under this
Agreement or any related agreement, or any representation or other statement of
the Borrower (or any Loan Party) in this Agreement or in any related agreement
is incorrect in any material respect when made or deemed made,

 

(iv)        the
Borrower or any other Loan Party dies or is declared (by appropriate authority)
incompetent or of unsound mind or is indicted or convicted of any crime or, if
not an individual, ceases to exist,

 

(v)         any
voluntary or involuntary proceeding for bankruptcy, reorganization, dissolution
or liquidation or similar action is commenced by or against the Borrower or any
other Loan Party, or a trustee in bankruptcy, receiver, conservator or
rehabilitator is appointed, or an assignment for the benefit of creditors is
made, with respect to the Borrower or any other Loan Party or its property;

 

(vi)        the
Borrower or any Loan Party is insolvent, unable to pay its debts as they fall
due, stops, suspends or threatens to stop or suspend payment of all or a
material part of its debts, begins negotiations or takes any proceeding or
other step with a view to readjustment, rescheduling or deferral of all or any
part of its indebtedness, which it would or might otherwise be unable to pay
when due, or proposes or makes a general assignment or an arrangement or
composition with or for the benefit of its creditors,

 

(vii)       a
Collateral Account (or any account in which collateral provided by a Loan Party
is maintained) or any portion thereof is terminated, attached or subjected to a
levy,

 

(viii)      the
Borrower or any Loan Party fails to provide promptly all financial and other
information as the Bank may request from time to time,

 

(ix)         any
indebtedness of the Borrower or any other Loan Party in respect of borrowed
money (including indebtedness guarantied by the Borrower or any other Loan
Party) or in respect of any swap, forward, cap, floor, collar, option or other
derivative transaction, repurchase or similar transaction or any combination of
these transactions is not paid when due, or any event or condition causes the
indebtedness to become, or permits the holder to declare the indebtedness to
be, due and payable prior to its stated maturity,

 

(x)          final
judgment for the payment of money is rendered against Borrower (or any Loan
Party) and, within thirty days from the entry of judgment, has not been
discharged or stayed

 

7

 

	
  

  	
   

  	
  UBS Bank USA

  Variable Credit
  Line Account Number (if applicable)

  5V                57978                CP

  Fixed Credit
  Line Account Number:  (if applicable)

  5F

  
	
   

  	
   

  	
  SS#/TIN

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Internal Use Only

  	
   

  

 

Credit Line
Agreement

 

pending
appeal or has not been discharged within thirty days from the entry of a final
order of affirmance on appeal,

 

(xi)         any
legal proceeding is instituted or any other event occurs or condition exists
that in the Bank’s judgment calls into question (A) the validity or
binding effect of this Agreement or any related agreement or any of the
Borrower’s (or any other Loan Party’s) obligations under this Agreement or
under any related agreement or (B) the ability of the Borrower (or any
Loan Party) to perform its obligations under this Agreement, or under any
related agreement, or

 

(xii)        the
Bank otherwise deems itself or its security interest in the Collateral insecure
or the Bank believes in good faith that the prospect of payment or other
performance by any Loan Party is impaired.

 

then, the Credit Line Obligations will
become immediately due and payable (without demand) and the Bank may, in its
sole and absolute discretion, liquidate, withdraw or sell all or any part of
the Collateral and apply the same, as well as the proceeds of any liquidation
or sale, to any amounts owed to the Bank, including any applicable Breakage
Costs and Breakage Fee. The Bank will not be liable to any Loan Party in any
way for any adverse consequences (for tax effect or otherwise) resulting from
the liquidation of appreciated Collateral. Without limiting the generality of
the foregoing, the sale may be made in the Bank’s sole and absolute discretion
by public sale on any exchange or market where business is then usually
transacted or by private sale, and the Bank may be the purchaser at any public
or private sale. Any Collateral that may decline speedily in value or that
customarily is sold on a recognized exchange or market may be sold without
providing any Loan Party with prior notice of the sale. Each Loan Party agrees
that, for all other Collateral, two calendar days notice to the Loan Party,
sent to its last address shown in the Bank’s account records, will be deemed
reasonable notice of the time and place of any public sale or time after which
any private sale or other disposition of the Collateral may occur. Any amounts
due and not paid on any Advance following an Event will bear interest from the
day following the Event until fully paid at a rate per annum equal to the
interest rate applicable to the Advance immediately prior to the Event plus
2.00%. In addition to the Bank’s rights under this Agreement, the Bank will
have the right to exercise any one or more of the rights and remedies of a
secured creditor under the Utah Uniform Commercial Code, as then in effect, or
under any other applicable law.

 

b)    Nothing
contained in this Section 10 will limit the right of the Bank to demand
full or partial payment of the Credit Line Obligations, in its sole and
absolute discretion and without cause, at any time, whether or not an Event has
occurred and is continuing.

 

c)     All
rights and remedies of the Bank under this Agreement are cumulative and are in
addition to all other rights and remedies that the Bank may have at law or
equity or under any other contract or other writing for the enforcement of the
security interest herein or the collection of any amount due under this
Agreement.

 

d)    Any
non-exercise of rights, remedies and powers by the Bank under this Agreement
and the other documents delivered in connection with this Agreement shall not
he construed as a waiver of any rights, remedies and powers. The Bank fully
reserves its rights to invoke any of its rights, remedies and powers at any
time it may deem appropriate.

 

11)   Representations,
Warranties and Covenants by the Loan Parties

 

Each Borrower and each other Loan Party
(if applicable) makes the following representations, warranties and covenants
(and each Borrower will be deemed to have repeated each representation and
warranty each time a Borrower requests an Advance) to the Bank

 

a)     Except
for the Bank’s rights under this Agreement and the rights of the Securities
Intermediary under any account agreement, the Borrower and each relevant
Pledgor owns the Collateral, free of any interest, lien or security interest in
favor of any third party and free of any impediment to transfer,

 

b)    Each
Loan Party: (i) if a natural Person, is of the age of majority, (ii) is
authorized to execute and deliver this Agreement and to perform its obligations
under this Agreement and any related agreement, (iii) is not an employee
benefit plan, as that term is defined by the Employee Retirement Income
Security Act of 1974, or an Individual Retirement Credit Line Account (and none
of the Collateral is an asset of a plan or account), and (iv) unless the
Loan Party advises the Bank to the contrary, in writing, and provides the Bank
with a letter of approval, where required, from its employer, is not an
employee or member of any exchange or of any corporation or firm engaged in the
business of dealing, either as a broker or as principal, in securities, bills
of exchange, acceptances or other forms of commercial paper,

 

c)     Neither
the Borrower nor any Pledgor on the Collateral Account has pledged or will
pledge the Collateral or grant a security interest in the Collateral to any
party other than the Bank or the Securities Intermediary, or has permitted or
will permit the Collateral to become subject to any liens or encumbrances (other
than those of the Bank and the Securities Intermediary), during the term of
this Agreement,

 

d)    No
Loan Party is in default under any material contract, judgment, decree or order
to which it is a party or by which it or its properties may be bound,

 

e)     Each
Loan Party has duly filed all tax and information returns required to be filed
and has paid all taxes, fees, assessments and other governmental charges or
levies that have become due and payable, except to the extent such taxes or
other charges are being contested in good faith and are adequately reserved
against in accordance with GAAP.

 

f)     The
Borrower and each relevant Pledgor (i) is and at all times will continue
to be the legal and beneficial owner of all assets held in or credited to any
Collateral Account or otherwise included in the Collateral, and (ii) does
not hold any assets held in or credited to any Collateral Account or otherwise
included in the Collateral in trust or subject to any contractual or other
restrictions on use that would prevent the use of such assets to (a) repay
the Bank or (b) be pledged as Collateral in favor of the Bank,

 

The
provisions of this Section 11 will survive the termination of this
Agreement or any related agreement and the repayment of the Credit Line
Obligations.

 

12)   Indemnification;
Limitation on Liability of the Bank and the Securities Intermediary

 

Borrower agrees to indemnify and hold
harmless the Bank and the Securities Intermediary, their affiliates and their
respective directors, officers, agents and employees against any and all
claims, causes of action, liabilities, lawsuits, demands and damages, for
example, any and all court costs and reasonable attorneys fees, in any way
relating to or arising out of or in connection with this Agreement, except to the
extent caused by the Bank’s or Securities Intermediary’s breach of its
obligations under this Agreement. Neither the Bank nor the Securities
Intermediary will be liable to any party for any consequential damages arising
out of any act or omission by either of them with respect to this Agreement or
any Advance or Collateral Account. The provisions of this Section 12 will
survive the termination of this Agreement or any related agreement and the
repayment of the Credit Line Obligation.

 

13)   Acceptance
of Application and Agreement, Applicable Law

 

THIS
APPLICATION AND AGREEMENT WILL BE RECEIVED AND ACCEPTED BY BANK IN THE STATE OF
UTAH, OR IF THIS APPLICATION AND AGREEMENT IS DELIVERED TO BANK’S AGENT, UBS
FINANCIAL SERVICES INC., IT WILL BE RECEIVED AND ACCEPTED WHEN RECEIVED BY UBS
FINANCIAL SERVICES INC.’S UNDERWRITING DEPARTMENT. DELIVERY OF THE APPLICATION
AND AGREEMENT TO THE BORROWER’S FINANCIAL ADVISOR AT UBS FINANCIAL SERVICES
INC. WILL NOT BE CONSIDERED RECEIPT OR ACCEPTANCE BY BANK. ALL DECISIONS MADE
BY BANK REGARDING THE CREDIT LINE WILL BE MADE IN UTAH.

 

8

 

	
  

  	
   

  	
  UBS Bank USA

  Variable Credit
  Line Account Number (if applicable)

  5V                57978                CP

  Fixed Credit
  Line Account Number:  (if applicable)

  5F

  
	
   

  	
   

  	
  SS#/TIN

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Internal Use
  Only

  	
   

  

 

Credit Line
Agreement

 

THIS
AGREEMENT WILL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF UTAH APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY IN
THE STATE OF UTAH AND, IN CONNECTION WITH THE CHOICE OF LAW GOVERNING INTEREST,
THE FEDERAL LAWS OF THE UNITED STATES, EXCEPT THAT WITH RESPECT TO THE
COLLATERAL ACCOUNT AND THE BANK’S SECURITY INTEREST THEREIN, THIS AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK, INCLUDING, WITHOUT LIMITATION, THE NEW YORK UNIFORM COMMERCIAL
CODE, AND FOR PURPOSES OF THIS AGREEMENT, THE COLLATERAL ACCOUNT AND THE BANK’S
SECURITY INTEREST THEREIN, THE JURISDICTION OF UBS FINANCIAL SERVICES INC. AND
UBS-I SHALL BE DEEMED TO BE THE STATE OF NEW YORK.

 

14)   Assignment

 

This Agreement may not be assigned by the
Borrower without the prior written consent of the Bank. This Agreement will be
binding upon and inure to the benefit of the heirs, successors and permitted
assigns of the Borrower. The Bank may assign this Agreement, and this Agreement
will inure to the benefit of the Bank’s successors and assigns.

 

15)   Amendment

 

This Agreement may be amended only by the
Bank, including, but not limited to, (i) the addition or deletion of any
provision of this Agreement and (ii) the amendment of the (x) “Spread
Over LIBOR/UBS Bank USA Fixed Funding Rate” in Schedule I or (y) “Spread
Over Prime’ in Schedule II to this Agreement, at any time by sending written
notice, signed by an authorized officer of the Bank, of an amendment to the
Borrower. The amendment shall be effective as of the date established by the
Bank. This Agreement may not be amended orally. The Borrower or the Bank may
waive compliance with any provision of this Agreement, but any waiver must be
in writing and will not be deemed to be a waiver of any other provision of this
Agreement. The provisions of this Agreement constitute the entire agreement
between the Bank and the Borrower with respect to the subject matter hereof and
supersede all prior or contemporaneous agreements, proposals, understandings
and representations, written or oral, between the parties with respect to the
subject matter hereof.

 

16)   Severability

 

If any provision of this Agreement is
held to be invalid, illegal, void or unenforceable, by reason of any law, rule,
administrative order or judicial or arbitral decision, the determination will
not affect the validity of the remaining provisions of this Agreement.

 

17)   Choice
of Forum; Waiver of Jury Trial

 

a)     ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATED TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY
JUDGMENT ENTERED BY ANY COURT REGARDING THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT WILL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN
THE THIRD JUDICIAL DISTRICT COURT FOR THE STATE OF UTAH OR IN THE UNITED STATES
DISTRICT COURT FOR THE STATE OF UTAH. EACH OF THE LOAN PARTIES IRREVOCABLY
SUBMITS TO THE JURISDICTION OF THE COURTS OF THE THIRD JUDICIAL DISTRICT COURT
FOR THE STATE OF UTAH AND OF THE UNITED STATES DISTRICT COURT FOR THE STATE OF
UTAH FOR THE PURPOSE OF ANY SUCH ACTION OR PROCEEDING AS SET FORTH ABOVE AND
IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION
WITH SUCH ACTION OR PROCEEDING. EACH OF THE LOAN PARTIES IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE NOW
OR IN THE FUTURE TO THE LAYING OF VENUE OF ANY SUCH ACTION OR PROCEEDING
BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH ACTION
OR PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

 

b)    EACH OF THE LOAN PARTIES (FOR ITSELF, ANYONE CLAIMING THROUGH
IT OR IN ITS NAME, AND ON BEHALF OF ITS EQUITY HOLDERS) IRREVOCABLY WAIVES ANY
RIGHT IT MAY HAVE TO A TRIAL BY JURY REGARDING ANY CLAIM BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT.

 

c)     Any
arbitration proceeding between the Borrower (or any other Loan Party) and the
Securities Intermediary, regardless of whether or not based on circumstances
related to any court proceedings between the Bank and the Borrower (or the
other Loan Party), will not provide a basis for any stay of the court
proceedings.

 

d)    Nothing
in this Section 17 will be deemed to alter any agreement to arbitrate any
controversies which may arise between the Borrower (or any other Loan Party)
and UBS Financial Services Inc. or its predecessors, and any claims between the
Borrower or the Loan Party, as applicable, and UBS Financial Services Inc. or
its employees (whether or not they have acted as agents of the Bank) will be
arbitrated as provided in any agreement between the Borrower or the Loan Party,
as applicable, and UBS Financial Services Inc.

 

18)   State
Specific Provisions and Disclosures

 

a)     For
residents of Ohio:

 

The Ohio laws against discrimination
require that all creditors make credit equally available to all creditworthy
customers, and that credit reporting agencies maintain separate credit
histories on each individual upon request. The Ohio civil rights commission
administers compliance with this law.

 

b)    For
residents of Oregon:

 

NOTICE TO BORROWER: DO NOT SIGN THIS
AGREEMENT BEFORE YOU READ IT. THIS AGREEMENT PROVIDES FOR THE PAYMENT OF A
PENALTY IF YOU WISH TO REPAY A FIXED RATE ADVANCE PRIOR TO THE DATE PROVIDED
FOR REPAYMENT IN THE AGREEMENT.

 

c)     For
residents of Vermont:

 

NOTICE TO BORROWER: THE ADVANCES MADE
UNDER THIS AGREEMENT ARE DEMAND LOANS AND SO MAY BE COLLECTED BY THE
LENDER AT ANY TIME. A NEW LOAN MUTUALLY AGREED UPON AND SUBSEQUENTLY ISSUED MAY CARRY
A HIGHER OR LOWER RATE OF INTEREST.

 

NOTICE TO JOINT BORROWER: YOUR SIGNATURE
ON THE AGREEMENT MEANS THAT YOU ARE EQUALLY LIABLE FOR REPAYMENT OF THIS LOAN.
IF THE BORROWER DOES NOT PAY, THE LENDER HAS A LEGAL RIGHT TO COLLECT FROM YOU.

 

d)    For
residents of California:

 

(i)       Any
person, whether married, unmarried, or separated, may apply for separate
credit.

 

(ii)      As
required by law, you are notified that a negative credit report reflecting on
your credit record may be submitted to a credit reporting agency if you fail to
fulfill the terms of your credit obligations.

 

(iii)     The
Borrower will notify the Bank, within a  reasonable
time, of any change in the Borrower’s name, address, or employment.

 

(iv)     The
Borrower will not attempt to obtain any Advance if the Borrower knows that the
Borrower’s credit privileges under the Credit Line have been terminated or
suspended.

 

(v)      The
Borrower will notify the Bank by telephone, telegraph, letter, or any other
reasonable means that an unauthorized use of the Credit Line has occurred or
may occur as the result of the loss or theft of a credit card or other
instrument identifying the Credit Line, within a reasonable time after the

 

9

 

	
  

  	
   

  	
  UBS Bank USA

  Variable Credit
  Line Account Number (if applicable)

  5V                57978                CP

  Fixed Credit
  Line Account Number:  (if applicable)

  5F

  
	
   

  	
   

  	
  SS#/TIN

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Internal Use
  Only

  	
   

  

 

Credit Line Agreement

 

Borrower’s
discovery of the loss or theft, and will reasonably assist the Bank in
determining the facts and circumstances relating to any unauthorized use of the
Credit Line.

 

19)   Account
Agreement

 

Each Loan Party
acknowledges and agrees that this Agreement supplements their account agreement(s) with
the Securities Intermediary relating to the Collateral Account and, if
applicable, any related account management agreement(s) between the Loan
Party and the Securities Intermediary. In the event of a conflict between the
terms of this Agreement and any other agreement between the Loan Party and the
Securities Intermediary, the terms of this Agreement will prevail.

 

20)   Notices

 

Unless otherwise
required by law, all notices to a Loan Party may be oral or in writing, in the
Bank’s discretion, and if in writing, delivered or mailed by the United States
mail, or by overnight carrier or by telecopy to the address of the Loan Party
shown on the records of the Bank. Each Loan Party agrees to send notices to the
Bank, in writing, at such address as provided by the Bank from time to time.

 

10

 

	
  

  	
   

  	
  UBS Bank USA

  Variable Credit
  Line Account Number (if applicable)

  5V                57978                CP

  Fixed Credit Line
  Account Number:  (if applicable)

  5F

  
	
   

  	
   

  	
  SS#/TIN

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Internal Use
  Only

  	
   

  

 

Credit Line
Agreement

 

Schedule
I to UBS Bank USA Credit Line Agreement

Schedule of Percentage Spreads Over LIBOR
or the UBS Bank USA Fixed

Funding Rate, as
applicable

 

	
  Aggregate
  Approved Amount

  	
   

  	
  Spread Over LIBOR/US Bank

  USA Fixed Funding Rate

  	
   

  
	
  $100,000
  to $249,999

  	
   

  	
  5.00

  	
  %

  
	
  $250,000
  to $499,999

  	
   

  	
  3.75

  	
  %

  
	
  $500,000
  to $999,999

  	
   

  	
  2.75

  	
  %

  
	
  $1,000,000
  to $2,499,999

  	
   

  	
  2.25

  	
  %

  
	
  $2,500,000
  to $4,999,999

  	
   

  	
  2.00

  	
  %

  
	
  $5,000,00
  to $9,999,999

  	
   

  	
  1.50

  	
  %

  
	
  $10,000,000
  and over

  	
   

  	
  1.25

  	
  %

  

 

Schedule
II to UBS Bank USA Credit Line Agreement

Schedule of Percentage
Spreads Over Prime

 

	
  Outstanding
  Amount under Credit Line

  	
   

  	
  Spread Over Prime

  	
   

  
	
  $0
  to $49,999

  	
   

  	
  3.50

  	
  %

  
	
  $50,000
  to $99,999

  	
   

  	
  3.00

  	
  %

  

 

 

NOTICE TO CO-SIGNER (Traduccion en Ingles Se Requiere Por La
Ley)

 

You are being asked to
guarantee this debt. Think carefully before you do. If the borrower doesn’t pay
the debt, you will have to. Be sure you can afford to pay if you have to, and
that you want to accept this responsibility.

 

You may have to pay to
the full amount of the debt if the borrower does not pay. You may also have to
pay late fees or collection costs, which increase this amount.

 

The creditor can collect
this debt from you without first trying to collect from the borrower. The
creditor can use the same collection methods against you that can be used
against the borrower, such as suing you, garnishing your wages, etc. If this
debt is ever in default, that fact may become a part of your credit record.

 

This notice is not the
contract that makes you liable for the debt.

 

AVISO PARA EL FIADOR (Spanish
Translation Required By Law)

 

Se
le esta pidiendo que garantice esta deuda. Pienselo con cuidado antes de
ponerse de acuerdo. Si la persona que ha pedido este prestamo no paga la deuda,
usted tendra que pagarla. Este seguro de que usted podra pagar si sea obligado
a pagarla y de que usted desea aceptar la responsabilidad.

 

Si
la persona que ha pedido el prestamo no paga la deuda, es posible que usted
tenga que pagar la suma total de la deuda, mas los cargos par tardarse en el
pago o el costo de cobranza, lo cual aumenta el total de esta suma.

 

El
acreedor (financiero) puede cobrarle a usted sin, primeramente, tratar de cobrarle
al deudor. Los mismos metodos de cobranza que pueden usarse contra el deudor,
podran usarse contra usted, tales como presentar una demanda en corte, quitar
parte de su sueldo, etc. Si alguna vez no se cumpla con la obligacion de pagar
esta deuda, se puede incluir esa informacion en la historia de credito de
usted.

 

Este
aviso no es el contrato mismo en que se le echa a usted la responsabilidad de
la deuda.

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