Document:

caxg8k20100118ex10b.htm

    
      

      

    

    Exhibit 10-b

     

     

    
      EXECUTIVE EMPLOYMENT
AGREEMENT

      
 

       

       

      This
EXECUTIVE EMPLOYMENT AGREEMENT (the “Agreement”) is
entered into as of January 13, 2010 by and between China Aoxing
Pharmaceutical Company, Inc, a company incorporated under the laws of the
Florida  (the “Company”), and
Mr. Hui Shao    , an individual (the “Executive”) and
effective on the Effective Date (as hereinafter defined). The term “Company” as
used herein with respect to all obligations of the Executive hereunder shall be
deemed to include the Company and all of its direct or indirect parent
companies, subsidiaries, affiliates, or subsidiaries or affiliates of its parent
companies (collectively, the “Company”).

       

      RECITALS

       

      A. The
Company desires to employ the Executive and to assure itself of the services of
the Executive during the term of Employment (as defined below).

       

      B. The
Executive desires to be employed by the Company during the term of Employment
and under the terms and conditions of this Agreement.

       

      AGREEMENT

       

      The
parties hereto agree as follows:

       

      
        	
                1.

              	 
      	
                POSITION

              

      

       

      The
Executive hereby accepts a position of Chief Financial Officer (the “Employment”) of the
Company.

       

      
        	
                2.

              	 
      	
                TERM

              

      

       

      Subject
to the terms and conditions of this Agreement, the initial term of the
Employment shall be three years, commencing on January 13, 2010 (the “Effective Date”),
until January 13, 2013, unless terminated earlier pursuant to the terms of
this Agreement. Upon expiration of the initial three-year term, the Employment
shall be automatically extended for successive one-year terms unless either
party gives the other party hereto written notice to terminate the Employment no
less than 60 days, and no more than 120 days, prior to the expiration
of such one-year term or unless terminated earlier pursuant to the terms of this
Agreement.

       

      
        	
                3.

              	 
      	
                DUTIES
      AND RESPONSIBILITIES

              

      

       

      The
Executive’s duties at the Company will include all jobs assigned by the Board of
Directors of the Company (the “Board”) or the Chief
Executive Officer (“CEO”). The Executive will report directly to the
CEO.

       

      The
Executive shall devote all of his working time, attention and skills to the
performance of his duties at the Company and shall faithfully and diligently
serve the Company in accordance with this Agreement and the guidelines, policies
and procedures of the Company approved from time to time by the
Company.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      The
Executive shall use his best efforts to perform his duties hereunder. The
Executive shall not, without the prior written consent of the Company, become an
employee or consultant of any entity other than the Company and/or any member of
the Company , and shall not carry on or be interested in the business or entity
that competes with that carried on by the Company  (any such business
or entity, a “Competitor”),
provided that nothing in this clause shall preclude the Executive from holding
any shares or other securities of any Competitor that is listed on any
securities exchange or recognized securities market anywhere.

       

      
        	
                4.

              	 
      	
                NO
      BREACH OF CONTRACT

              

      

       

      The
Executive hereby represents to the Company that: (i) the execution and
delivery of this Agreement by the Executive and the performance by the Executive
of the Executive’s duties hereunder shall not constitute a breach of, or
otherwise contravene, the terms of any other agreement or policy to which the
Executive is a party or otherwise bound, except for agreements that are required
to be entered into by and between the Executive and any member of the
Company  pursuant to applicable law of the jurisdiction where the
Executive is based, if any; (ii) that the Executive has no information
(including, without limitation, confidential information and trade secrets)
relating to any other person or entity which would prevent, or be violated by,
the Executive entering into this Agreement or carrying out his duties hereunder;
(iii) that the Executive is not bound by any confidentiality, trade secret
or similar agreement (other than this) with any other person or entity except
for other member(s) of the Company , as the case may be.

       

      
        	
                5.

              	 
      	
                LOCATION

              

      

       

      The
Executive will be based in the United States of America or China, on a full time
basis. The executive may be required to work in other regions on temporary
basis.

       

      
        	
                6.

              	 
      	
                COMPENSATION
      AND BENEFITS

              

      

      

      
        	 
      	
                (a)

              	 
      	
                Cash
      Compensation. The Executive’s cash compensation shall be provided
      by the Company pursuant to Schedule A-1
      hereto, subject to annual review and adjustment by the
    Board.

              

      

      

      
        	 
      	
                (b)

              	 
      	
                Equity Incentives.
      The Executive will be eligible to participate in any of the
      Company’s equity incentive plans as determined by the Board. Subject to
      approval by the Company’s Board of Directors and the execution of a stock
      option agreement which will govern the terms and conditions contained in a
      stock option agreement to be entered into by you and the Company prior to
      the grant, you will receive the equity award listed on Schedule A-2
      (the “Initial Grant”). Following a Company Change of Control Transaction
      (as hereinafter defined), all unvested options under the Initial Grant
      shall vest upon the closing of the Change of Control
      Transaction.

              

      

      

      
        	 
      	
                (c)

              	 
      	
                Benefits. The
      Executive is eligible for participation in any standard employee benefit
      plan of the Company, including any health insurance plan and annual
      holiday plan.

              

      

      

      
        	 
      	
                (d)

              	 
      	
                Certain
      Definitions. For purposes of this Agreement, a Change of Control
      Transaction shall mean (a) any sale, lease, exchange or other
      transfer (in one transaction or a series of transactions) of all or
      substantially all of the assets of the Company other than to a Company
      Affiliate; (b) any consolidation or merger or other business
      combination of the Company with any other entity, other than a Company
      Affiliate, where the shareholders of the Company, immediately prior to the
      consolidation or merger or other business combination would not,
      immediately after the consolidation or merger or other business
      combination, beneficially own, directly or indirectly, shares representing
      fifty percent (50%) of the combined voting power of all of the outstanding
      securities of the entity issuing cash or securities in the consolidation
      or merger or other business combination (or its ultimate parent
      corporation, if any); or (c) the Board of the Company adopts a
      resolution to the effect that a “Change In Control” has occurred for
      purposes of this Agreement.

              

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      
        	
                7.

              	 
      	
                TERMINATION
      OF THE AGREEMENT

              

      

      

      
        	 
      	
                (a)

              	 
      	
                By the Company with
      cause. The Company may terminate the Executive’s Employment for
      cause, at any time, without advance notice or remuneration, if
      (1) the Executive is convicted or pleads guilty to a felony or to an
      act of fraud, misappropriation or embezzlement, (2) the Executive has
      been grossly negligent or acted dishonestly to the detriment of the
      Company, (3) the Executive has engaged in actions amounting to gross
      misconduct or failed to perform his duties hereunder and such failure
      continues after the Executive is afforded a reasonable opportunity to cure
      such failure, (4) the Executive has died, or (5) the Executive
      has a disability which shall mean a physical or mental impairment which,
      as reasonably determined by the Board, renders the Executive unable to
      perform the essential functions of his employment with the Company, even
      with reasonable accommodation that does not impose an undue hardship on
      the Company, for more than 180 days in any 12-month period, unless a
      longer period is required by applicable law, in which case that longer
      period would apply.

              

      

      

      
        	 
      	
                (b)

              	 
      	
                By the Company without
      cause. The Company may terminate the Executive’s Employment without
      cause, at any time, upon one-month prior written notice to the Executive
      during the first year after the Effective Date, or two-month prior written
      notice to the Executive during any period after the first anniversary of
      the Effective Date.

              

      

      

      
        	 
      	
                (c)

              	 
      	
                By the Executive for
      Good Reason. If there is a material and substantial reduction in
      the Executive’s existing authority and responsibilities and such
      resignation is approved by the Board, the Executive may resign upon
      one-month prior written notice to the Company during the first year after
      the Effective Date, or two-month prior written notice to the Company
      during any period after the first anniversary of the Effective
      Date.

              

      

      

      
        	 
      	
                (d)

              	 
      	
                Notice of
      Termination. Any termination of the Executive’s employment under
      this Agreement shall be communicated by written notice of termination from
      the terminating party to the other party. The notice of termination shall
      indicate the specific provision(s) of this Agreement relied upon in
      effecting the termination.

              

      

      

      
        	 
      	
                (e)

              	 
      	
                Remuneration upon
      Termination. Upon the Company’s termination of the Employment
      without cause pursuant to Section 7(b) above or the Executive’s
      resignation upon the Board’s approval pursuant to Section 7(c) above and
      upon the execution of a general release agreement in a form reasonably
      acceptable to the Company, the Company will provide remuneration to the
      Executive as follows: (1) if such termination or resignation becomes
      effective during the first year after the Effective Date, the Company will
      provide the Executive with a severance pay equal to three months base
      salary of the Executive; (2) if such termination or resignation
      becomes effective during any period after the first anniversary of the
      Effective Date, the Company will provide the Executive with a severance
      pay equal to six months base salary of the Executive; and (3) the
      Company will vest any options of the Initial Grant that would have vested
      during the applicable severance period.  Any payments made
      pursuant to Section 7(e)(1) or Section 7(e)(2) shall be paid in
      accordance with the Company’s normal payroll cycles in effect on the
      termination or resignation date.

              

      

      

      
        	 
      	
                (f)

              	 
      	
                Termination by
      Executive for No Reason. The Executive may terminate his Employment
      for any reason, at any time, upon 90 days prior written notice to the
      Company.

              

      

      

      
        	 
      	
                (g)

              	 
      	
                Compliance with
      Internal Revenue Code Section 409A and 457A. This Agreement is
      intended to comply with the requirements of Internal Revenue Code (the
      “Code”) Section 409A and 457A, as applicable, and the corresponding
      regulations and related guidance, and shall be administered in accordance
      with Section 409A and Section 457A, to the extent such sections
      apply. To the extent Section 409A or Section 457A applies, the
      parties agree to work together to ensure any payments pursuant to Section
      7(d) of this Agreement comply with Section 409A and
      Section 457A, as applicable.

              

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      
        	
                8.

              	 
      	
                CONFIDENTIALITY
      AND NONDISCLOSURE

              

      

      

      
        	 
      	
                (a)

              	 
      	
                Confidentiality and
      Non-disclosure. In the course of the Executive’s services, the
      Executive may have access to the Company and/or the Company’s client’s
      and/or prospective client’s trade secrets and confidential information,
      including but not limited to those embodied in memoranda, manuals, letters
      or other documents, computer disks, tapes or other information storage
      devices, hardware, or other media or vehicles, pertaining to the Company
      and/or the Company’s client’s and/or prospective client’s business. All
      such trade secrets and confidential information are considered
      confidential. All materials containing any such trade secret and
      confidential information are the property of the Company and/or the
      Company’s client and/or prospective client, and shall be returned to the
      Company and/or the Company’s client and/or prospective client upon
      expiration or earlier termination of this Agreement. The Executive shall
      not directly or indirectly disclose or use any such trade secret or
      confidential information, except as required in the performance of the
      Executive’s duties in connection with the Employment, or pursuant to
      applicable law.

              

      

      

      
        	 
      	
                (b)

              	 
      	
                Trade Secrets.
      During and after the Employment, the Executive shall hold the Trade
      Secrets in strict confidence; the Executive shall not disclose these Trade
      Secrets to anyone except other employees of the Company who have a need to
      know the Trade Secrets in connection with the Company’s business. The
      Executive shall not use the Trade Secrets other than for the benefits of
      the Company.

              

      

       

      “Trade Secrets” means
information deemed confidential by the Company, treated by the Company or which
the Executive know or ought reasonably to have known to be confidential, and
trade secrets, including without limitation designs, processes, pricing
policies, methods, inventions, conceptions, technology, technical data,
financial information, corporate structure and know-how, relating to the
business and affairs of the Company and its subsidiaries, affiliates and
business associates, whether embodied in memoranda, manuals, letters or other
documents, computer disks, tapes or other information storage devices, hardware,
or other media or vehicles. Trade Secrets do not include information generally
known or released to public domain through no fault of the
Executive.

       

      
        	 
      	
                (c)

              	 
      	
                Former Employer
      Information. The Executive agrees that he has not and will not,
      during the term of his employment improperly use or disclose any
      proprietary information or trade secrets of any former employer, unless
      the former employer has been acquired by the Company, or other person or
      entity with which the Executive has an agreement to keep in confidence
      information acquired by Executive, if any. The Executive will indemnify
      the Company and hold it harmless from and against all claims, liabilities,
      damages and expenses, including reasonable attorneys’ fees and costs of
      suit, arising out of or in connection with any violation of the
      foregoing.

              

      

      

      
        	 
      	
                (d)

              	 
      	
                Third Party
      Information. The Executive recognizes that the Company may have
      received, and in the future may receive, from third parties their
      confidential or proprietary information subject to a duty on the Company’s
      part to maintain the confidentiality of such information and to use it
      only for certain limited purposes. The Executive agrees that the Executive
      owes the Company and such third parties, during the Executive’s employment
      by the Company and thereafter, a duty to hold all such confidential or
      proprietary information in the strictest confidence and not to disclose it
      to any person or firm and to use it in a manner consistent with, and for
      the limited purposes permitted by, the Company’s agreement with such third
      party.

              

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      This
Section 8 shall survive the termination of this Agreement for any reason.
In the event the Executive breaches this Section 8, the Company shall have
right to seek any and all remedies at law or in equity.

       

      
        	
                9.

              	 
      	
                NON-COMPETITION
      AND NON-SOLICITATION

              

      

       

      (a) In
consideration of the base salary provided to the Executive by the Company
hereunder, the adequacy of which is hereby acknowledged by the parties hereto,
the Executive agrees that during the term of the Employment and for a period of
one year following the termination of the Employment for whatever
reason:

       

      (i) The
Executive will not approach clients, customers or contacts of the Company or
other persons or entities introduced to the Executive in the Executive’s
capacity as a representative of the Company for the purposes of doing business
with such persons or entities which will harm the business relationship between
the Company and such persons and/or entities;

       

      (ii) unless
expressly consented to by the Company, the Executive will not seek directly or
indirectly, by the offer of alternative employment or other inducement
whatsoever, to solicit the services of any employee of the Company employed as
at or after the date of such termination, or in the year preceding such
termination.

       

      (b) In
consideration of the base salary provided to the Executive by the Company
hereunder, the adequacy of which is hereby acknowledged by the parties hereto,
the Executive agrees that during the term of the Employment and for a period of
one year thereafter (except in the event of a Termination by the Company without
cause pursuant to Section 7(b) or in the event of a Termination by the Executive
for Good Reason pursuant to Section 7(c)), following the termination of the
Employment for whatever reason, unless expressly consented to by the Company,
the Executive will not assume employment with or provide services for any
Competitor, or engage, whether as principal, partner, licensor or otherwise, in
any Competitor.

       

      (c) In
consideration of the base salary provided to the Executive by the Company
hereunder, the adequacy of which is hereby acknowledged by the parties hereto,
the Executive agrees that in the event of a Termination by the Company without
cause pursuant to Section 7(b) or in the event of a Termination by the Executive
for Good Reason pursuant to Section 7(c), then during the term of the
Employment and for the period of the duration of the severance pay described in
Section 7(e)(1) or Section 7(e)(2), as appropriate, unless expressly
consented to by the Company, the Executive will not assume employment with or
provide services for any Competitor, or engage, whether as principal, partner,
licensor or otherwise, in any Competitor.

       

      The
provisions contained in this Section 9 are considered reasonable by the
Executive and the Company. In the event that any such provisions should be found
to be void under applicable laws but would be valid if some part thereof was
deleted or the period or area of application reduced, such provisions shall
apply with such modification as may be necessary to make them valid and
effective.

       

      This
Section 9 shall survive the termination of this Agreement for any reason.
In the event the Executive breaches this Section 9, the Executive
acknowledges that there will be no adequate remedy at law, and the Company shall
be entitled to injunctive relief and/or a decree for specific performance, and
such other relief as may be proper (including monetary damages if appropriate).
In any event, the Company shall have right to seek any and all remedies
permissible at law or in equity.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      
        	
                10.

              	 
      	
                ASSIGNMENT

              

      

       

      This
Agreement is personal in its nature and neither of the parties hereto shall,
without the consent of the other, assign or transfer this Agreement or any
rights or obligations hereunder; provided, however, that (i) the Company
may assign or transfer this Agreement or any rights or obligations hereunder to
any member of the Company  without such consent, and (ii) in the
event of a Change-of-Control Transaction of the Company, this Agreement shall,
subject to the provisions hereof, be binding upon and inure to the benefit of
such successor and such successor shall discharge and perform all the promises,
covenants, duties, and obligations of the Company hereunder.

       

      
        	
                11.

              	 
      	
                SEVERABILITY

              

      

       

      If any
provision of this Agreement or the application thereof is held invalid, the
invalidity shall not affect other provisions or applications of this Agreement
which can be given effect without the invalid provisions or applications and to
this end the provisions of this Agreement are declared to be
severable.

       

      
        	
                12.

              	 
      	
                GOVERNING
      LAW

              

      

       

      This
Agreement shall be governed by and construed in accordance with the law of the
State of Florida, U.S.A.

       

      
        	
                13.

              	 
      	
                AMENDMENT

              

      

       

      This
Agreement may not be amended, modified or changed (in whole or in part), except
by a formal, definitive written agreement expressly referring to this Agreement,
which agreement is executed by both of the parties hereto.

       

      
        	
                14.

              	 
      	
                WAIVER

              

      

       

      Neither
the failure nor any delay on the part of a party to exercise any right, remedy,
power or privilege under this Agreement shall operate as a waiver thereof, nor
shall any single or partial exercise of any right, remedy, power or privilege
preclude any other or further exercise of the same or of any right, remedy,
power or privilege, nor shall any waiver of any right, remedy, power or
privilege with respect to any occurrence be construed as a waiver of such right,
remedy, power or privilege with respect to any other occurrence. No waiver shall
be effective unless it is in writing and is signed by the party asserted to have
granted such waiver.

       

      
        	
                15.

              	 
      	
                NOTICES

              

      

       

      All
notices, requests, demands and other communications required or permitted under
this Agreement shall be in writing and shall be deemed to have been duly given
and made if (i) delivered by hand, (ii) otherwise delivered against receipt
therefor, or (iii) sent by a recognized courier with next-day or second-day
delivery to the last known address of the other party.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      
        	
                16.

              	 
      	
                COUNTERPARTS

              

      

       

      This
Agreement may be executed in any number of counterparts, each of which shall be
deemed an original as against any party whose signature appears thereon, and all
of which together shall constitute one and the same instrument. This Agreement
shall become binding when one or more counterparts hereof, individually or taken
together, shall bear the signatures of all of the parties reflected hereon as
the signatories. Photographic copies of such signed counterparts may be used in
lieu of the originals for any purpose.

       

      
        	
                17.

              	 
      	
                NO
      INTERPRETATION AGAINST DRAFTER

              

      

       

      Each
party recognizes that this Agreement is a legally binding contract and
acknowledges that such party has had the opportunity to consult with legal
counsel of choice. In any construction of the terms of this Agreement, the same
shall not be construed against either party on the basis of that party being the
drafter of such terms.

       

      
        	
                18.

              	 
      	
                LANGUAGE

              

      

       

      This
Agreement is prepared and executed in English.

       

       

       

       

      IN
WITNESS WHEREOF, this Agreement has been executed as of the date first written
above.

       

      
        	 
      	 
      	 
      	 
	 
      	 
      	
                CHINA
      AOXING PHARMACEUTICAL COMPANY, INC

              	 
	 
      	 
      	 
      	 
	 
      	 
      	
                By:
      /s/ Zhenjiang Yue

              	 
	 
      	 
      	
                Name:
      Zhenjiang Yue

              	 
	
                              

              	 
      	
                Title:
      Chairman of the Board and CEO

              	 
	 
      	 
      	 
      	 
	 
      	 
      	
                EXECUTIVE

              	 
	 
      	 
      	 
      	 
	 
      	 
      	 
      	 
	 
      	 
      	
                By:
      /s/ Hui Shao

              	 
	 
      	 
      	
                Name:
      Hui Shao    

              	 
	 
      	 
      	
                   

              	 

      

       

      

      
        	
                /s/ Zhenjiang
      Yue

              	
                /s/ John
      O’Shea

              	 
      
	
                Zhenjiang
      Yue

              	
                John
      O’Shea

              	 
      
	 
      	 
      	 
      
	
                /s/ Min
      Jun

              	
                /s/ Howard
      Sterling

              	
                /s/ Guozhu
      Xu

              
	
                Min
      Jun

              	
                Howard
      Sterling

              	
                Guozhu
      Xu

              

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      Schedule A-1

      Cash Compensation

       

      
        	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	
                Amount

              	 
      	
                Pay
      Period

              
	
                Base
      Salary 

              	 
      	
                US
      $200,000 annually, subject to applicable

                withholding
      and other taxes

                 

                  

              	 
      	
                Payable
      in 12 equal

                monthly

                installments
      for

                each
      calendar year

                 

              
	
                Bonus

              	 
      	
                Discretionary
      as approved by the Board of Directors.

              	 
      	
                As
      determined by

                the
      Board of

                Directors

              

      

       

      Schedule A-2

      Initial Equity
Award

       

      Subject
to the approval of the Company’s Board of Directors, the Executive is granted an
option to purchase 600,000 shares of the Company’s common stock on January 13,
2010 (“Date of Grant”). The option price is $0.98 USD, based on the average
trading price of the previous 10-day trading days prior to January 13,
2010.  This option award includes two components.

      

      Component
One: The Executive is granted an option to purchase 300,000 shares of the
Company’s common stock on January 13, 2010 (“Date of Grant”). This award will
vest in three years, including 100,000 shares vested on the one year anniversary
of the Date of Grant, 100,000 shares vested on the second anniversary on the
Date of Grant and 100,000 shares vested on the third anniversary of the Date of
Grant. The shares granted in Component One are exercisable for five years after
the vesting date.

      

      Component
2: The Executive is granted an option to purchase 300,000 shares of the
Company’s common stock on January 13, 2010 (“Date of Grant”). This award will
vest in five years, including 60,000 shares vested on the one year anniversary
of the Date of Grant, 60,000 shares vested on the second anniversary on the Date
of Grant, 60,000 shares vested on the third anniversary of the Date of Grant,
60,000 shares vested on the fourth anniversary on the Date of Grant, 60,000
shares vested on the fifth year anniversary of the Date of Grant.  The
shares granted in Component Two are exercisable for five years after the vesting
date.Exhibit
10.1

 

AMENDED
AND RESTATED BUSINESS MANAGEMENT AGREEMENT

 

THIS AMENDED AND RESTATED BUSINESS MANAGEMENT AGREEMENT (this “Agreement”)
is entered into as of January 13, 2010, by and between Hospitality
Properties Trust, a Maryland real estate investment trust (the “Company”), Reit
Management & Research LLC, a Delaware limited liability company  (the “Manager”), and, solely with respect to Section 15
of this Agreement with respect to certain non-competition covenants, Barry M.
Portnoy, Gerard M. Martin and Adam D. Portnoy.

 

WHEREAS, the Company and the Manager are parties to an Amended and
Restated Advisory Agreement, dated as of January 1, 2006 (as amended, the “Original
Agreement”), and Barry M. Portnoy, Gerard M. Martin and Adam D. Portnoy are
parties to the Original Agreement solely with respect to certain covenants in Section 15
thereof; and

 

WHEREAS, the parties to the Original Agreement wish to amend and
restate the Original Agreement as hereinafter provided;

 

NOW, THEREFORE, in consideration of the mutual agreements herein set
forth, the parties hereto agree that the Original Agreement is hereby amended
and restated to read in its entirety as follows:

 

1.             Engagement. 
Subject to the terms and conditions hereinafter set forth, the Company
hereby continues to engage the Manager to provide the management and real
estate investment services contemplated by this Agreement with respect to the
Company’s business and real estate investments, and the Manager hereby accepts
such continued engagement.

 

2.             General Duties of the Manager.  The Manager shall use its reasonable best
efforts to present to the Company a continuing and suitable real estate
investment program consistent with the real estate investment policies and
objectives of the Company.  Subject to
the supervision of the Company’s Board of Trustees (the “Trustees”), the
Manager shall:

 

(a)           provide
research and economic and statistical data in connection with the Company’s
real estate investments and recommend changes in the Company’s real estate investment
policies when appropriate;

 

(b)           (i) investigate
and evaluate investments in, or acquisitions or dispositions of, real estate
and related interests, and financing and refinancing opportunities, (ii) make
recommendations concerning specific investments to the Trustees, and (iii) evaluate
and negotiate contracts with respect to the foregoing, in each case, on behalf
of the Company and in the furtherance of the Company’s real estate financing
objectives;

 

 

(c)           investigate,
evaluate and negotiate the prosecution and negotiation of any claims of the
Company in connection with its real estate investments;

 

(d)           administer
bookkeeping and accounting functions as are required for the management and
operation of the Company, contract for audits and prepare or cause to be
prepared such reports and filings as may be required by any governmental
authority in connection with the ordinary conduct of the Company’s business,
and otherwise advise and assist the Company with its compliance with applicable
legal and regulatory requirements, including without limitation, periodic
reports, returns or statements required under the Securities Exchange Act of
1934, as amended, the Internal Revenue Code of 1986, as amended (said Code, as
in effect from time to time, together with any regulations and rulings
thereunder, being hereinafter referred to as the “Internal Revenue Code”), the
securities and tax statutes of any jurisdiction in which the Company is
obligated to file such reports, or the rules and regulations promulgated under
any of the foregoing;

 

(e)           advise and
assist in the preparation and filing of all offering documents (public and
private), and all registration statements, prospectuses or other documents
filed with the Securities and Exchange Commission (the “SEC”) or any state (it
being understood that the Company shall be responsible for the content of any
and all of its offering documents and SEC filings (including without limitation
those filings referred to in Section 2(d) hereof), and the Manager
shall not be held liable for any costs or liabilities arising out of any
misstatements or omissions in the Company’s offering documents or SEC filings,
whether or not material, and the Company shall promptly indemnify the Manager
from such costs and liabilities);

 

(f)            retain
counsel, consultants and other third party professionals on behalf of the
Company;

 

(g)           provide
internal audit services as hereinafter provided;

 

(h)           advise and
assist with the Company’s risk management and oversight function;

 

(i)            to the
extent not covered above, advise and assist the Company in the review and
negotiation of the Company’s contracts and agreements, coordination and
supervision of all third party legal services and oversight of processing of
claims by or against the Company;

 

(j)           advise and
assist the Company with respect to the Company’s public relations, preparation
of marketing materials, internet website and investor relations services;

 

(k)           provide
office space, office equipment and the use of accounting or computing equipment
when required;

 

2

 

(l)            advise
and assist with respect to: the design, operation and maintenance of network
infrastructure, including telephone and data transmission lines, voice mail,
facsimile machines, cellular phones, pager, etc.; and local area network and
wide area network communications support; and

 

(m)          provide
personnel necessary for the performance of the foregoing services.

 

In performing its services under this Agreement, the Manager may
utilize facilities, personnel and support services of various of its
affiliates.  The Manager shall be
responsible for paying such affiliates for their personnel and support services
and facilities out of its own funds unless otherwise approved by a majority
vote of the Independent Trustees (the “Independent Trustees”), as defined in
the Company’s Bylaws, as in effect from time to time (the “Bylaws”).  Notwithstanding the foregoing, fees, costs
and expenses of any third party which is not an affiliate of the Manager retained
as permitted hereunder are to be paid by the Company.  Without limiting the foregoing sentence, any
such fees, costs or expenses referred to in the immediately preceding sentence
which may be paid by the Manager shall be reimbursed to the Manager by the
Company promptly following submission to the Company of a statement of any such
fees, costs or expenses by the Manager.

 

Notwithstanding anything herein, it is understood and agreed that the
duties of, and services to be provided by, the Manager pursuant to this
Agreement shall not include any investment management or related services with
respect to any assets of the Company as the Company may wish to allocate from
time to time to investments in “securities” (as defined in the Investment
Advisers Act of 1940, as amended).

 

In performing its services hereunder with respect to the Company, the
Manager shall adhere to, and shall require its officers and employees in the
course of providing such services to the Company to adhere to, the Company’s
Code of Business Conduct and Ethics, as in effect from time to time.  In addition, the Manager shall make available
to its officers and employees providing such services to the Company the
procedures for the receipt, retention and treatment of complaints regarding accounting,
internal accounting controls or auditing matters relating to the Company and
for the confidential, anonymous submission by such officers and employees of
concerns regarding questionable accounting or auditing matters relating to the
Company, as set forth in the Company’s Procedures for Handling Concerns or
Complaints about Accounting, Internal Accounting Controls or Auditing Matters,
as in effect from time to time.

 

3.             Bank Accounts. 
The Manager shall establish and maintain one or more bank accounts in
its own name or, at the direction of the Trustees, in the name of the Company,
and shall collect and deposit into such account or accounts and disburse
therefrom any monies on behalf of the Company, provided that no funds in any
such account shall be commingled with any funds of the Manager or any other
person or entity.  The Manager shall from
time to time, or at any time requested by the Trustees, render an appropriate
accounting of such collections and payments to the Trustees and to the auditors
of the Company.

 

3

 

4.             Records. 
The Manager shall maintain appropriate books of account and records
relating to this Agreement, which books of account and records shall be
available for inspection by representatives of the Company upon reasonable
notice during ordinary business hours.

 

5.             Information Furnished to Manager.  The Trustees shall at all times keep the
Manager fully informed with regard to the real estate investment policies of
the Company, the capitalization policy of the Company, and generally the
Trustees’ then-current intentions as to the future of the Company.  In particular, the Trustees shall notify the
Manager promptly of their intention to sell or otherwise dispose of any of the
Company’s real estate investments or to make any new real estate
investment.  The Company shall furnish
the Manager with such information with regard to its affairs as the Manager may
from time to time reasonably request. 
The Company shall retain legal counsel and accountants to provide such
legal and accounting advice and services as the Manager or the Trustees shall
deem necessary or appropriate to adequately perform the functions of the
Company.

 

6.             REIT Qualification; Compliance with Law and
Organizational Documents.  Anything
else in this Agreement to the contrary notwithstanding, the Manager shall
refrain from any action (including, without limitation, the furnishing or
rendering of services to tenants of property or managing real property) which,
in its judgment made in good faith, or in the judgment of the Trustees as
transmitted to the Manager in writing, would (a) adversely affect the
qualification of the Company as a real estate investment trust as defined and
limited in the Internal Revenue Code or which would make the Company subject to
the Investment Company Act of 1940,  as
amended (the “1940 Act”), (b) violate any law or rule, regulation or
statement of policy of any governmental body or agency having jurisdiction over
the Company or over its securities, or (c) not be permitted by the Company’s
Declaration of Trust, as in effect from time to time (the “Declaration of Trust”),
or Bylaws, except if such action shall be ordered by the Trustees, in which
event the Manager shall promptly notify the Trustees of the Manager’s judgment
that such action would adversely affect such qualification, make the Company
subject to the 1940 Act or violate any such law, rule, regulation or policy, or
the Declaration of Trust or Bylaws and shall refrain from taking such action
pending further clarification or instructions from the Trustees.  In addition, the Manager shall take such
affirmative steps which, in its judgment made in good faith, or in the judgment
of the Trustees as transmitted to the Manager in writing, would prevent or cure
any action described in (a), (b) or (c) above.

 

7.             Self-Dealing. 
Neither the Manager nor any affiliate of the Manager shall sell any
property or assets to the Company or purchase any property or assets from the
Company, directly or indirectly, except as approved by a majority of the
Independent Trustees (or otherwise pursuant to the Declaration of Trust or
Bylaws).  In addition, except as
otherwise provided in Sections 2, 10 or 11 hereof, or except as approved by a
majority of the Independent Trustees, neither the Manager nor any affiliate of
the Manager shall receive any commission or other remuneration, directly or
indirectly, in connection with the activities of the Company or any joint
venture or partnership in which the Company is a party.  Except for compensation received by the
Manager pursuant to Section 10 hereof, all commissions or other
remuneration received by the Manager or an affiliate of the Manager and not
approved by the Independent Trustees under 

 

4

 

Sections 2, 10 or 11 hereof
or this Section 7 shall be reported to the Company annually within ninety
(90) days following the end of the Company’s fiscal year.

 

Upon request of any trustee
of the Company, the Manager shall from time to time promptly furnish the
Company with information on a confidential basis as to any real estate
investments within the Company’s real estate investment policies made by the
Manager for its own account.

 

8.             No Partnership or Joint Venture.  The Company and the Manager are not partners
or joint venturers with each other and neither the terms of this Agreement nor
the fact that the Company and the Manager have joint interests in any one or
more investments, ownership or other interests in any one or more entities or
may have common officers or employees or a tenancy relationship shall be
construed so as to make them such partners or joint venturers or impose any
liability as such on either of them.

 

9.             Fidelity Bond. 
The Manager shall not be required to obtain or maintain a fidelity bond
in connection with the performance of its services hereunder.

 

10.           Compensation. 
The Manager shall be paid, for the services rendered by it to the
Company pursuant to this Agreement, an annual management fee (the “Management
Fee”) equal to 0.70% of the Average Invested Capital (as defined below)
computed as of the last day of the Company’s fiscal year up to $250,000,000,
and 0.50% of the Average Invested Capital equal to or exceeding
$250,000,000.  In addition, the Manager
shall be paid an annual incentive fee (the “Incentive Fee”), consisting of a
number of shares of the Company’s Common Shares of Beneficial Interest (“Common
Shares”) with a value (determined as provided below) equal to 15% of the amount
by which Cash Available for Distribution (as defined below) for such fiscal
year exceeds Cash Available for Distribution for the fiscal year immediately
prior to such fiscal year, but in no event shall the Incentive Fee payable in
respect of any year exceed $.02 multiplied by the weighted average number of
Common Shares outstanding during such year.

 

Payment of the Incentive Fee
shall be made by, issuance of Common Shares, under the Company’s Incentive
Share Award Plan then in effect or otherwise. 
The number of Common Shares to be issued in payment of the Incentive Fee
shall be the whole number of shares (disregarding any fraction) equal to the
value of the Incentive Fee, as provided above, divided by the average closing
price of the Common Shares on the New York Stock Exchange during the month of December in
the year for which the computation is made. 
(The Management Fee and Incentive Fee are hereinafter collectively
referred to as the “Fees.”)

 

For purposes of this Agreement:  (a) “Average
Invested Capital” of the Company shall mean the daily weighted average of the
total historical cost of the consolidated assets of the Company invested,
directly or indirectly, in equity interests in and loans secured by real estate
and personal property owned in connection with such real estate (collectively, “Properties”)
(including acquisition related costs and costs which may be allocated to
intangibles or are unallocated), before reserves for depreciation,
amortization, impairment charges or bad debts or 

 

5

 

other similar noncash reserves, computed by
taking the weighted average of such values; and (b) “Cash Available for
Distribution” shall mean, for any period, the net income of the Company, before
real estate depreciation, amortization and other non-cash or non-recurring
items, less the amount, if any, included in the calculation thereof which
represents rental income recognized by the Company in respect of amounts which,
pursuant to leasing arrangements relating to any of the Properties, the Company
is required to escrow or reserve for renovations and refurbishments.  Calculation of Average Invested Capital and
of Cash Available for Distribution to Shareholders shall be made annually by
the Company.

 

Unless the Company and the Manager otherwise agree, the Management Fee
shall be computed and payable within thirty (30) days following the end of each
fiscal month by the Company, and the Incentive Fee shall be computed and
payable within thirty (30) days following the public availability of the
Company’s annual audited financial statements for each fiscal year.  Such computations shall be based upon the
Company’s monthly or annual financial statements, as the case may be, and shall
be in reasonable detail.  A copy of such
computations shall promptly be delivered to the Manager accompanied by payment
of the Fees shown thereon to be due and payable.

 

The payment of the aggregate annual Fees payable for any fiscal year
shall be subject to adjustment as of the end of each fiscal year.  On or before the 30th day after public
availability of the Company’s annual audited financial statements for each
fiscal year, the Company shall deliver to the Manager an Officer’s Certificate
(a “Certificate”) reasonably acceptable to the Manager and certified by an
authorized officer of the Company setting forth (i) the Average Invested
Capital and Cash Available for Distribution for the Company’s fiscal year ended
upon the immediately preceding December 31, and (ii) the Company’s
computation of the Fees payable for said fiscal year.

 

If the aggregate annual Fees payable for said fiscal year as shown in
such Certificate exceed the aggregate amounts previously paid with respect
thereto by the Company, the Company shall include its check for such deficit
and deliver the same to the Manager with such Certificate.

 

If the aggregate annual Fees payable for said fiscal year as shown in
such Certificate are less than the aggregate amounts previously paid with
respect thereto by the Company, the Company shall specify in such Certificate
whether the Manager should (i) remit its check to the Company an amount
equal to such difference or (ii) grant the Company a credit against the
Fees next coming due in the amount of such difference until such amount has
been fully paid or otherwise discharged.

 

6

 

11.           Additional Services.

 

(a)           The
Manager shall provide to the Company an internal audit function meeting
applicable requirements of the New York Stock Exchange and the Securities and
Exchange Commission and otherwise in scope approved by the  Audit Committee of the Board of Trustees of
the Company. As additional compensation payable pursuant to Section 10 to
the Manager for such additional services, the Company agrees to reimburse the
Manager, within 30 days of the receipt of the invoice therefor, for a pro rata
share (as agreed to by the Independent Trustees from time to time) of the
following costs of the Manager:

 

(i)            employment expenses of the Manager’s
internal audit manager and other employees of the Manager actively engaged in
providing internal audit services, including but not limited to salary, wages,
payroll taxes and the cost of employee benefit plans; and

 

(ii)           the reasonable travel and other
out-of-pocket expenses of the Manager relating to the activities of the Manager’s
internal audit manager and other of the Manager’s employees actively engaged in
providing internal audit services and the reasonable third party expenses which
the Manager incurs in connection with its provision of internal audit services.

 

(b)           If, and to
the extent that, the Company shall request the Manager to render services on
behalf of the Company other than those required to be rendered by the Manager
in accordance with the terms of this Agreement, such additional services shall
be compensated separately on terms to be agreed upon between the Manager and
the Company from time to time.

 

12.                                 Expenses of the
Manager.  Without regard to and without
limiting the compensation received by the Manager from the Company pursuant to
this Agreement and except to the extent provided by Sections 2, 10 or 11, the
Manager shall bear the following expenses incurred in connection with the
performance of its duties under this Agreement:

 

(a)           employment
expenses of the personnel employed by the Manager, including, but not limited
to, salaries, wages, payroll taxes and the cost of employee benefit plans;

 

(b)           fees and
travel and other expenses paid to directors, officers and employees of the
Manager, except fees and travel and other expenses of such persons who are
trustees or officers of the Company incurred in their capacities as trustees or
officers of the Company;

 

7

 

(c)           rent,
telephone, utilities, office furniture, equipment and machinery and other
office expenses of the Manager, except to the extent such expenses relate
solely to an office maintained by the Company separate from the office of the
Manager; and

 

(d)           miscellaneous
administrative expenses relating to performance by the Manager of its
obligations hereunder.

 

13.                                 Expenses of the
Company. Except as expressly otherwise provided in this Agreement, the Company
shall pay all its expenses not payable by the Manager, and, without limiting
the generality of the foregoing, it is specifically agreed that the following
expenses of the Company shall be paid by the Company and shall not be paid by
the Manager:

 

(a)           the cost
of borrowed money;

 

(b)           taxes on
income and taxes and assessments on real property and personal property, if
any, and all other taxes applicable to the Company;

 

(c)           legal,
auditing, accounting, underwriting, brokerage, listing, reporting, registration
and other fees, and printing, engraving and other expenses and taxes incurred
in connection with the issuance, distribution, transfer, trading, registration
and stock exchange listing of the Company’s securities, including transfer
agent’s, registrar’s and indenture trustee’s fees and charges;

 

(d)           expenses
of organizing, restructuring, reorganizing or terminating the Company, or of
revising, amending, converting or modifying the Company’s organizational
documents;

 

(e)           fees and
travel and other expenses paid to trustees and officers of the Company in their
capacities as such (but not in their capacities as officers or employees of the
Manager) and fees and travel and other expenses paid to advisors, contractors,
mortgage servicers, consultants, and other agents and independent contractors
employed by or on behalf of the Company;

 

(f)            expenses
directly connected with the investigation, acquisition, disposition or
ownership of real estate interests or other property (including third party
property diligence costs, appraisal reporting, the costs of foreclosure,
insurance premiums, legal services, brokerage and sales commissions,
maintenance, repair, improvement and local management of property), other than
expenses with respect thereto of employees of the Manager, to the extent that
such expenses are to be borne by the Manager pursuant to Section 12 above;

 

8

 

(g)           all
insurance costs incurred in connection with the Company (including officer and
trustee liability insurance) or in connection with any officer and trustee
indemnity agreement to which the Company is a party;

 

(h)           expenses
connected with payments of dividends or interest or contributions in cash or
any other form made or caused to be made by the Trustees to holders of
securities of the Company;

 

(i)            all
expenses connected with communications to holders of securities of the Company
and other bookkeeping and clerical work necessary to maintaining relations with
holders of securities, including the cost of preparing, printing, posting,
distributing and mailing certificates for securities and proxy solicitation
materials and reports to holders of the Company’s securities;

 

(j)            legal,
accounting and auditing fees and expenses, other than those described in
subsection (c) above;

 

(k)           filing and
recording fees for regulatory or governmental filings, approvals and notices to
the extent not otherwise covered by any of the foregoing items of this Section 13;

 

(l)            expenses
relating to any office or office facilities maintained by the Company separate
from the office of the Manager; and

 

(m)          the costs
and expenses of all equity award or compensation plans or arrangements
established by the Company, including the value of awards made by the Company
to the Manager or its employees, if any.

 

14.                                 Limits of
Manager Responsibility; Indemnification; Company Remedies.  The Manager assumes no responsibility other
than to render the services described herein in good faith and shall not be
responsible for any action of the Trustees in following or declining to follow
any advice or recommendation of the Manager. 
The Manager, its shareholders, directors, officers, employees and
affiliates will not be liable to the Company, its shareholders, or others,
except by reason of acts constituting bad faith, willful or wanton misconduct
or gross negligence in the performance of its obligations hereunder.  The Company shall reimburse, indemnify and
hold harmless the Manager, its shareholders, directors, officers and employees
and its affiliates for and from any and all expenses, losses, damages,
liabilities, demands, charges and claims of any nature whatsoever (including,
without limitation, all reasonable attorneys’, accountants’ and experts’ fees
and expenses) in respect of or arising from any acts or omissions of the
Manager with respect to the provision of services by it or performance of its
obligations in connection with this Agreement or performance of other matters
pursuant to specific instruction by the Trustees, except to the extent such
provision or performance was in willful bad faith or grossly 

 

9

 

negligent.  Without limiting the foregoing, the Company
shall promptly advance expenses incurred by the indemnitees referred to in this
section for matters referred to in this section, upon request for such
advancement.

 

15.           Other Activities of the Manager and its Shareholders.  None of the Manager, Barry M. Portnoy, Gerard
M. Martin nor Adam D. Portnoy shall, without the consent of the Independent
Trustees, (a) provide management services to, or serve as a director or
officer of, any other real estate investment trust which is principally engaged
in the business of ownership of hotel or travel center properties or (b) make
direct investments in hotel or travel center facilities.  Nothing herein shall prevent the Manager from
engaging in other activities or businesses or from acting as Manager to any
other person or entity (including other real estate investment trusts) provided
that no such activity shall conflict with the Manager’s obligations under the
immediately preceding sentence; provided, further, however, that the Manager
shall notify the Company in writing in the event that it does so act as a
manager to another real estate investment trust.  The Company acknowledges that the Manager
manages real estate investment trusts and other entities (including, as of the
date of this Agreement, HRPT Properties Trust, Senior Housing Properties Trust,
Government Properties Income Trust, Five Star Quality Care, Inc. and
TravelCenters of America LLC) and that the Manager shall be free from any
obligation to present to the Company any particular investment opportunity
which comes to the Manager and that the Manager is not required to present the
Company with opportunities to invest in properties that are primarily of a type
that are the investment focus of another person or entity now or in the future
managed by the Manager.  The Company
acknowledges and agrees that the Manager has certain interests that may be
divergent from those of the Company.  The
parties agree that these relationships and interests shall not affect either
party’s rights and obligations under this Agreement.  Without limiting the foregoing provisions,
the Manager agrees, upon the request of any trustee of the Company, to disclose
certain real estate investment information concerning the Manager or certain of
its affiliates; provided, however, that such disclosure shall be required only
if it does not constitute a breach of any fiduciary duty or obligation of the
Manager, and the Company shall be required to keep such information
confidential.

 

Directors, officers, employees and agents of the Manager or of its
affiliates may serve as trustees, officers, employees, agents, nominees or
signatories of the Company.  When
executing documents or otherwise acting in such capacities for the Company, such
persons shall use their respective titles in the Company.  Such persons shall receive no compensation
from the Company for their services to the Company in any such capacities,
except that the Company may make awards to the employees of the Manager and others
under the Company’s Incentive Share Award Plan then in effect or any equity
plan adopted by the Company from time to time.

 

16.           Term, Termination. 
This Agreement shall continue in force and effect until December 31,
2010, and shall be automatically renewed for successive one year terms annually
thereafter unless notice of non-renewal is given by the Company or the Manager
before the end of the term.  It is
expected that the terms and conditions may be reviewed by the Independent
Trustees of the Compensation Committee of the Board of Trustees of the Company
at least annually.

 

10

 

Notwithstanding any other provision of this Agreement to the contrary,
this Agreement may be terminated by either party hereto upon sixty (60) days’
written notice to the other party, pursuant to, in the case of a termination by
the Company, a majority vote of the Independent Trustees or, in the case of a
termination by the Manager, by a majority vote of the directors of the Manager.

 

Section 17 hereof shall govern the rights, liabilities and
obligations of the parties upon termination of this Agreement; and, except as
provided in Sections 14 and 17, a termination shall be without further
liability of either party to the other, other than for breach or violation of
this Agreement prior to termination.

 

17.           Action Upon Termination.  From and after the effective date of any
termination of this Agreement pursuant to Section 16 hereof, the Manager
shall be entitled to no compensation for services rendered hereunder for the
then-current term of this Agreement, but shall be paid, on a pro rata basis,
all compensation due for services performed prior to the effective date of such
termination.  Upon such termination, the
Manager immediately shall:

 

(a)           pay over
to the Company all monies collected and held for the account of the Company by
it pursuant to this Agreement, after deducting therefrom any accrued Fees and
reimbursements for its expenses to which it is then entitled;

 

(b)           deliver to
the Trustees a full and complete accounting, including a statement showing all
sums collected by it and a statement of all sums held by it for the period
commencing with the date following the date of its last accounting to the
Trustees; and

 

(c)           deliver to
the Trustees all property and documents of the Company then in its custody or
possession.

 

The amount of Fees paid to the Manager upon termination shall be
subject to adjustment pursuant to the following mechanism.  On or before the 30th day after public
availability of the Company’s annual audited financial statements for the
fiscal year in which termination occurs, the Company shall deliver to the
Manager a Certificate reasonably acceptable to the Manager and certified by an
authorized officer of the Company setting forth (i) the Average Invested
Capital and Cash Available for Distribution for the Company’s fiscal year ended
upon the immediately preceding December 31, and (ii) the Company’s
computation of the Fees payable upon the date of termination.

 

If the annual Fees owed upon termination as shown in such Certificate
exceed the Fees paid by the Company upon termination, the Company shall include
its check for such deficit and deliver the same to the Advisor with such
Certificate.

 

11

 

If the Annual Fees owed upon termination as shown in such Certificate
are less than the Fees paid by the Company upon termination, the Manager shall
remit to the Company its check in an amount equal to such difference.

 

18.           Trustee Action. Wherever action on the part of the
Trustees is contemplated by this Agreement, action by a majority of the Trustees,
including a majority of the Independent Trustees, shall constitute the action
provided for herein.

 

19.           TRUSTEES AND SHAREHOLDERS NOT LIABLE.  THE DECLARATION OF TRUST, A COPY OF WHICH,
TOGETHER WITH ALL AMENDMENTS, IS DULY FILED IN THE OFFICE OF THE DEPARTMENT OF
ASSESSMENTS AND TAXATION OF THE STATE OF MARYLAND PROVIDES THAT THE NAME
HOSPITALITY PROPERTIES TRUST REFERS TO THE TRUSTEES COLLECTIVELY AS TRUSTEES,
BUT NOT INDIVIDUALLY OR PERSONALLY.  NO
TRUSTEE, OFFICER, SHAREHOLDER, EMPLOYEE OR AGENT OF THE COMPANY SHALL BE HELD
TO ANY PERSONAL LIABILITY, JOINTLY OR SEVERALLY, FOR ANY OBLIGATION OF, OR
CLAIM AGAINST, THE COMPANY.  ALL PERSONS
DEALING WITH THE COMPANY, IN ANY WAY, SHALL LOOK ONLY TO THE ASSETS OF THE
COMPANY FOR THE PAYMENT OF ANY SUM OR THE PERFORMANCE OF ANY OBLIGATION.

 

20.           Notices.  Any
notice, report or other communication required or permitted to be given
hereunder 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):

 

If
to the Company:

 

Hospitality
Properties Trust

400 Centre Street

Newton, MA 02458

Attention: President

Facsimile No.:  (617) 969-5730

 

If
to the Manager:

 

Reit
Management & Research LLC

400 Centre Street

Newton, MA 02458

Attention: President

Facsimile No.:  (617) 928-1305

 

12

 

21.           Amendments. 
This Agreement shall not be amended, changed, modified, terminated, or
discharged in whole or in part except by an instrument in writing signed by
each of the parties hereto, or by their respective successors or assigns, or
otherwise as provided herein.

 

22.           Assignment. 
Neither party may assign this Agreement or its rights hereunder or
delegate its duties hereunder without the written consent of the other party,
except in the case of an assignment or delegation by the Manager to a
corporation, partnership, limited liability company, association, trust, or
other successor entity which may take over the property and carry on the
affairs of the Manager and which remains under the control of one or more
persons who controlled the operations of the Manager immediately prior to such
assignment or delegation.

 

23.           No Third Party Beneficiary.  Except as otherwise provided in Section 26(i),
no person or entity other than the parties hereto and their successors and
permitted assigns is intended to be a beneficiary of this Agreement.

 

24.           Successors and Assigns.  This Agreement shall be binding upon any
successors or permitted assigns of the parties hereto as provided herein.

 

25.           Governing Law. The provisions of this Agreement
shall be governed by and construed in accordance with the laws of the
Commonwealth of Massachusetts.

 

26.           Arbitration.

 

(a)           Any
disputes, claims or controversies between the parties (i) arising out of
or relating to this Agreement or the provision of services by the Manager
pursuant to this Agreement, or (ii) brought by or on behalf of any
shareholder of the Company (which, for purposes of this Section 26, 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 trustee, officer, manager (including
Reit Management & Research LLC or its successor), agent or employee of
the Company, including disputes, claims or controversies relating to the
meaning, interpretation, effect, validity, performance or enforcement of this
Agreement, the Declaration of Trust or the Bylaws (all of which are referred to
as “Disputes”), or relating in any way to such a Dispute or Disputes shall, on
the demand of any party to such Dispute be resolved through binding and final
arbitration in accordance with the Commercial Arbitration Rules (the “Rules”)
of the American Arbitration Association (“AAA”) then in effect, except as those
Rules may be modified in this Section 26.  For the avoidance of doubt, and not as a
limitation, Disputes are intended to include derivative actions against
trustees, officers or managers of the Company and class actions by a shareholder
against those individuals or entities and the Company.  For the avoidance of doubt, a Dispute shall
include a Dispute made derivatively on behalf of one party against another
party.

 

13

 

(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 parties who have appointed the first arbitrator.  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 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 Boston, Massachusetts unless otherwise agreed by the
parties.

 

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

 

(e)           In
rendering an award or decision (the “Award”), the arbitrators shall be required
to follow the laws of The Commonwealth of Massachusetts.  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 expressly provided by this Agreement or as 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.

 

14

 

(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 26
is intended to benefit and be enforceable by the shareholders, directors,
officers, managers (including the Manager or its successor), agents or
employees of the Company and the Company and shall be binding on the
shareholders of the 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.

 

27.           Consent to Jurisdiction and Forum.  This Section 27 is subject to, and shall
not in any way limit the application of, Section 26; in case of any
conflict between this Section 27 and Section 26, Section 26
shall govern.  The exclusive jurisdiction
and venue in any action brought by any party hereto pursuant to this Agreement
shall lie in any federal or state court located in Boston, Massachusetts.  By execution and delivery of this Agreement,
each party hereto irrevocably submits to the jurisdiction of such courts for
itself and in respect of its property with respect to such action. The parties
irrevocably agree that venue would be proper in such court, and hereby waive
any objection that such court is an improper or inconvenient forum for the
resolution of such action.  The parties
further agree and consent to the service of any process required by any such
court by delivery of a copy thereof in accordance with Section 20 and that
any such delivery shall constitute valid and lawful service of process against
it, without necessity for service by any other means provided by statute or rule of
court.

 

28.           Captions. The captions included herein have been
inserted for ease of reference only and shall not be construed to affect the
meaning, construction or effect of this Agreement.

 

29.           Entire Agreement. This Agreement constitutes the
entire agreement of the parties hereto with respect to the subject matter
hereof and supersedes and cancels any pre-existing agreements with respect to
such subject matter.

 

15

 

30.           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.

 

31.           Survival. 
The provisions of Sections 2 (limited to the obligation of the Company
to indemnify the Manager for matters provided thereunder), 14, 15 (limited to
the obligations of the Company to keep information provided to the Company by
the Manager confidential as provided in the last proviso in such Section), 16
(limited to the last paragraph of such Section), 17, 19, 20, 23, 24, 25, 26,
27, 30 and 31 of this Agreement shall survive the termination hereof.

 

32.           Other Agreements. 
The parties hereto are also parties to an Amended and Restated Property
Management Agreement, dated as of the date hereof, as in effect from time to
time (the “Property Management Agreement”). 
The parties agree that this Agreement does not include or otherwise
address the rights and obligations of the parties under the Property Management
Agreement and that the Property Management Agreement provides for its own
separate rights and obligations of the parties thereto, including, without
limitation separate compensation payable by the Company and the other Owners
(as defined in the Property Management Agreement) to the Manager thereunder for
services to be provided by the Manager pursuant to the Property Management
Agreement.

 

 

[Signature Page To Follow.]

 

16

 

IN WITNESS WHEREOF, the parties hereto have caused this Amended and
Restated Business Management Agreement to be executed by their duly authorized
officers, under seal, as of the day and year first above written.

 

 

	
   

  	
   

  	
  HOSPITALITY
  PROPERTIES TRUST

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  John G. Murray

  
	
   

  	
   

  	
   

  	
  Name:

  	
  John
  G. Murray

  
	
   

  	
   

  	
   

  	
  Title:

  	
  President
  and Chief Operating Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  REIT
  MANAGEMENT & RESEARCH LLC

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  John C. Popeo

  
	
   

  	
   

  	
   

  	
  Name:

  	
  John C. Popeo

  
	
   

  	
   

  	
   

  	
  Title: 

  	
  Executive Vice President
  and Treasurer

  
	
   

  	
   

  	
   

  	
   

  
	
  SOLELY AS TO SECTION 15
  HEREOF:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/ Barry M. Portnoy

  	
   

  	
   

  	
   

  
	
  Barry M. Portnoy

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/ Gerard M. Martin

  	
   

  	
   

  	
   

  
	
  Gerard M. Martin

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/ Adam D. Portnoy

  	
   

  	
   

  	
   

  
	
  Adam D. Portnoy

  	
   

  	
   

  	
   

  

 

17

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