Document:

Exhibit
10.6

 

INDEMNIFICATION
AGREEMENT

 

THIS INDEMNIFICATION AGREEMENT (this
“Agreement”) is made and entered March 10, 2004 (the “Effective Date”), by
and between Senior Housing Properties Trust, a Maryland real estate investment
trust (the “Company”), and David J. Hegarty (“Indemnitee”).

 

WHEREAS Indemnitee currently serves as an
officer of the Company and may, in connection therewith, be subjected to
claims, suits or proceedings arising from such service; and

 

WHEREAS, as an inducement to Indemnitee to
continue to serve as such officer,
the Company has agreed to indemnify and to advance expenses and costs incurred
by Indemnitee in connection with any such claims, suits or proceedings, to the
fullest extent permitted by law as hereinafter provided; and

 

NOW, THEREFORE, in consideration of the
premises and the covenants contained herein, the Company and Indemnitee do
hereby covenant and agree as follows:

 

Section 1.               Definitions.  For purposes of this Agreement:

 

(a)           “Change in Control” means a change in
control of the Company occurring after the Effective Date of a nature that
would be required to be reported in response to Item 6(e) of Schedule 14A
of Regulation 14A (or in response to any similar item on any similar
schedule or form) promulgated under the Securities Exchange Act of 1934,
as amended (the “Act”), whether or not the Company is then subject to such
reporting requirement; provided, however, that, without limitation, such a
Change in Control shall be deemed to have occurred if after the Effective Date
(i) any “person” (as such term is used in Sections 13(d) and 14(d) of the Act)
is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Act),
directly or indirectly, of securities of the Company representing 10% or more of the combined voting power
in the election of trustees of the Company’s then outstanding securities
without the prior approval of at least two-thirds of the members of the Board
of Trustees in office immediately prior to such person attaining such
percentage interest; (ii) there occurs a proxy contest, or the Company is a
party to a merger, consolidation, sale of assets, plan of liquidation or other
reorganization not approved by at least two-thirds of the members of the Board
of Trustees then in office, as a consequence of which members of the Board of
Trustees in office immediately prior to such transaction or event constitute
less than a majority of the Board of Trustees thereafter; or (iii) during any
period of two consecutive years, other than as a result of an event described
in clause (a)(ii) of this Section 1, individuals who at the
beginning of such period constituted the Board of Trustees (including for this
purpose any new trustee whose election or nomination for election by the
Company’s shareholders was approved by a vote of at least two-thirds of the
trustees then still in office who were trustees at the beginning of such
period) cease for any reason to constitute at least a majority of the Board of
Trustees.

 

(b)           “Corporate Status” means the status
of a person who is or was a director, trustee, officer or agent of the Company.

 

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

 

(d)           “Expenses” means all expenses,
including, but not limited to, all reasonable attorneys’ fees, retainers, court
costs, transcript costs, fees of experts, witness fees, travel expenses,
duplicating costs, printing and binding costs, telephone charges, postage, delivery
service fees, and all other disbursements or expenses of the types customarily
incurred in connection with prosecuting, defending, preparing to prosecute or
defend, investigating, or being or preparing to be a witness in a Proceeding.

 

(e)           “Independent Counsel” means a law
firm, or a member of a law firm, that is retained by Indemnitee and is not
serving as counsel to the Company.

 

(f)            “Proceeding” means any threatened,
pending or completed action, suit, arbitration, alternate dispute resolution
mechanism, investigation, administrative hearing or any other proceeding,
whether civil, criminal, administrative or investigative (including on appeal),
except one initiated by an Indemnitee pursuant to Section 9.

 

Section 2.               Indemnification
- General.  The Company shall
indemnify, and advance Expenses to, Indemnitee (a) as provided in this
Agreement and (b) otherwise to the fullest extent permitted by Maryland law in
effect on the date hereof and as amended from time to time; provided, however,
that no change in Maryland law shall have the effect of reducing the benefits
available to Indemnitee hereunder based on Maryland law as in effect on the
date hereof.  The rights of Indemnitee
provided in this Section 2 shall include, without limitation, the
rights set forth in the other sections of this Agreement, including any
additional indemnification permitted by Section 2-418(g) of the Maryland
General Corporation Law (“MGCL”), as applicable to a Maryland real estate
investment trust by virtue of Section 8-301(15) of the Maryland REIT Law.

 

Section 3.               Proceedings
Other Than Proceedings by or in the Right of the Company.  Indemnitee shall be entitled to the rights of
indemnification provided in this Section 3 if, by reason of his
Corporate Status, he is, or is threatened to be, made a party to any
threatened, pending, or completed Proceeding, other than a Proceeding by or in
the right of the Company.  Pursuant to
this Section 3, Indemnitee shall be indemnified against all
judgments, penalties, fines and amounts paid in settlement and all Expenses
incurred by him or on his behalf in connection with a Proceeding by reason of
Indemnitee’s Corporate Status unless it is established that (i) the act or
omission of Indemnitee was material to the matter giving rise to the Proceeding
and (a) was committed in bad faith or (b) was the result of active and
deliberate dishonesty, (ii) Indemnitee actually received an improper personal
benefit in money, property or services, or (iii) in the case of any criminal
Proceeding, Indemnitee had reasonable cause to believe that his conduct was
unlawful.

 

Section 4.               Proceedings
by or in the Right of the Company. 
Indemnitee shall be entitled to the rights of indemnification provided
in this Section 4 if, by reason of his Corporate Status, he is, or
is threatened to be, made a party to any threatened, pending or completed
Proceeding brought by or in the right of the Company to procure a judgment in
its favor.  Pursuant to this Section 4,
Indemnitee shall be indemnified against all amounts paid in settlement and all
Expenses incurred by him or on his behalf in connection with such Proceeding
unless it is established that (i) the act or omission of Indemnitee was
material to the matter giving rise to such a Proceeding and (a) was committed
in bad faith or (b) was the result of active and

 

 

2

 

deliberate dishonesty or (ii)
Indemnitee actually received an improper personal benefit in money, property or
services.

 

Section 5.               Indemnification
for Expenses of a Party Who is Partly Successful.  Without limitation on Section 3
and Section 4, if Indemnitee is not wholly successful in any
Proceeding covered by this Agreement, but is successful, on the merits or
otherwise, as to one or more but less than all claims, issues or matters in
such Proceeding, the Company shall indemnify Indemnitee under this Section 5
for all Expenses incurred by him or on his behalf in connection with each
successfully resolved claim, issue or matter, allocated on a reasonable and
proportionate basis.  For purposes of
this Section and without limitation, the termination of any claim, issue
or matter in such a Proceeding by dismissal, with or without prejudice, shall
be deemed to be a successful result as to such claim, issue or matter.

 

Section 6.               Advance
of Expenses.  The Company shall
advance all Expenses incurred by or on behalf of Indemnitee in connection with
any Proceeding to which Indemnitee is, or is threatened to be, made a party or
a witness, within ten days after the receipt by the Company of a statement or
statements from Indemnitee requesting such advance or advances from time to
time, whether prior to or after final disposition of such Proceeding.  Such statement or statements shall reasonably
evidence the Expenses incurred by Indemnitee and shall include or be preceded
or accompanied by a written affirmation by Indemnitee of Indemnitee’s good
faith belief that the standard of conduct necessary for indemnification by the
Company as authorized by law and by this Agreement has been met and a written
undertaking by or on behalf of Indemnitee, in substantially the form attached
hereto as Exhibit A or in such form as may be required under applicable
law as in effect at the time of the execution thereof, to reimburse the portion
of any Expenses advanced to Indemnitee relating to claims, issues or matters in
the Proceeding as to which it shall ultimately be established that the standard
of conduct has not been met and which have not been successfully resolved as
described in Section 5.  To
the extent that Expenses advanced to Indemnitee do not relate to a specific
claim, issue or matter in the Proceeding, such Expenses shall be allocated on a
reasonable and proportionate basis.  The
undertaking required by this Section 6 shall be an unlimited
general obligation by or on behalf of Indemnitee and shall be accepted without
reference to Indemnitee’s financial ability to repay such advanced Expenses and
without any requirement to post security therefor.

 

Section 7.               Procedure
for Determination of Entitlement to Indemnification.

 

(a)           To obtain indemnification under this
Agreement, Indemnitee shall submit to the Company a written request, including
such documentation and information as is reasonably available to Indemnitee and
is reasonably necessary to determine whether and to what extent Indemnitee is
entitled to indemnification.  The
Secretary of the Company shall, promptly upon receipt of such a request for
indemnification, advise the Board of Trustees in writing that Indemnitee has
requested indemnification.

 

(b)           Upon written request by Indemnitee
for indemnification pursuant to the first sentence of Section 7(a)
hereof, a determination, if required by applicable law, with respect to
Indemnitee’s entitlement thereto shall promptly be made in the specific case:
(i) if a Change in Control shall have occurred, by Independent Counsel in a
written opinion to the Board of

 

3

 

 

Trustees,
a copy of which shall be delivered to Indemnitee; or (ii) if a Change of
Control shall not have occurred or if after a Change of Control Indemnitee
shall so request, (A) by the Board of Trustees (or a duly authorized committee
thereof) by a majority vote of a quorum consisting of Disinterested Trustees
(as herein defined), or (B) if a quorum of the Board of Trustees consisting of
Disinterested Trustees is not obtainable or, even if obtainable, such quorum of
Disinterested Trustees so directs, by Independent Counsel in a written opinion
to the Board of Trustees, a copy of which shall be delivered to Indemnitee, or
(C) if so directed by a majority of the members of the Board of Trustees, by
the shareholders of the Company; and, if it is so determined that Indemnitee is
entitled to indemnification, payment to Indemnitee shall be made within ten
days after such determination. 
Indemnitee shall cooperate with the person, persons or entity making
such determination with respect to Indemnitee’s entitlement to indemnification,
including providing to such person, persons or entity upon reasonable advance
request any documentation or information which is not privileged or otherwise
protected from disclosure and which is reasonably available to Indemnitee and
reasonably necessary to such determination. 
Any Expenses incurred by Indemnitee in so cooperating with the person,
persons or entity making such determination shall be borne by the Company
(irrespective of the determination as to Indemnitee’s entitlement to
indemnification) and the Company shall indemnify and hold Indemnitee harmless
therefrom.

 

Section 8.               Presumptions
and Effect of Certain Proceedings.

 

(a)           In making a determination with
respect to entitlement to indemnification hereunder, the person or persons or
entity making such determination shall presume that Indemnitee is entitled to
indemnification under this Agreement if Indemnitee has submitted a request for
indemnification in accordance with Section 7(a) of this Agreement,
and the Company shall have the burden of proof to overcome that presumption in
connection with the making of any determination contrary to that presumption.

 

(b)           The termination of any Proceeding by
judgment, order, settlement, conviction, a plea of nolo  contendere
or its equivalent, or an entry of an order of probation prior to judgment, does
not create a presumption that Indemnitee did not meet the requisite standard of
conduct described herein for indemnification.

 

Section 9.               Remedies
of Indemnitee.

 

(a)           If (i) a determination is made
pursuant to Section 7 that Indemnitee is not entitled to
indemnification under this Agreement, (ii) advance of Expenses is not timely
made pursuant to Section 6, (iii) no determination of entitlement
to indemnification shall have been made pursuant to Section 7(b)
within 30 days after receipt by the Company of the request for indemnification,
(iv) payment of indemnification is not made pursuant to Section 5
within ten days after receipt by the Company of a written request therefor, or
(v) payment of indemnification is not made within ten days after a
determination has been made that Indemnitee is entitled to indemnification,
Indemnitee shall be entitled to an adjudication in an appropriate court of the
State of Maryland, or in any other court of competent jurisdiction, of his
entitlement to such indemnification or advance of Expenses.  Alternatively, Indemnitee, at his option, may
seek an award in arbitration to be conducted by a single arbitrator pursuant to
the commercial

 

4

 

 

Arbitration
Rules of the American Arbitration Association. 
Indemnitee shall commence such proceeding seeking an adjudication or an
award in arbitration within 180 days following the date on which Indemnitee
first has the right to commence such proceeding pursuant to this Section 9(a);
provided, however, that the foregoing clause shall not apply in
respect of a proceeding brought by Indemnitee to enforce his rights under Section 5.

 

(b)           In any judicial proceeding or
arbitration commenced pursuant to this Section 9, the Company shall
have the burden of proving that Indemnitee is not entitled to indemnification
or advance of Expenses, as the case may be.

 

(c)           If a determination shall have been
made pursuant to Section 7(b) that Indemnitee is entitled to
indemnification, the Company shall be bound by such determination in any
judicial proceeding or arbitration commenced pursuant to this Section 9,
absent a misstatement by Indemnitee of a material fact, or an omission of a
material fact necessary to make Indemnitee’s statement not materially
misleading, in connection with the request for indemnification.

 

(d)           In the event that Indemnitee,
pursuant to this Section 9, seeks a judicial adjudication of or an
award in arbitration to enforce his rights under, or to recover damages for
breach of, this Agreement, Indemnitee shall be entitled to recover from the
Company, and shall be indemnified by the Company for, any and all Expenses
incurred by him in such judicial adjudication or arbitration.  If it shall be determined in such judicial
adjudication or arbitration that Indemnitee is entitled to receive part but not
all of the indemnification or advance of Expenses sought, the Expenses incurred
by Indemnitee in connection with such judicial adjudication or arbitration
shall be appropriately prorated.

 

Section 10.             Defense
of the Underlying Proceeding.

 

(a)           Indemnitee shall notify the Company
promptly upon being served with or receiving any summons, citation, subpoena,
complaint, indictment, information, notice, request or other document relating
to any Proceeding which may result in the right to indemnification or the
advance of Expenses hereunder; provided, however, that the
failure to give any such notice shall not disqualify Indemnitee from the right,
or otherwise affect in any manner any right of Indemnitee, to indemnification
or the advance of Expenses under this Agreement unless the Company’s ability to
defend in such Proceeding or to obtain proceeds under any insurance policy is
materially and adversely prejudiced thereby, and then only to the extent the
Company is thereby actually so prejudiced.

 

(b)           Subject to the provisions of the last
sentence of this Section 10(b) and of Section 10(c)
below, the Company shall have the right to defend Indemnitee in any Proceeding
which may give rise to indemnification hereunder; provided, however,
that the Company shall notify Indemnitee of any such decision to defend within
15 calendar days following receipt of notice of any such Proceeding under Section 10(a)
above.  The Company shall not, without
the prior written consent of Indemnitee, which shall not be unreasonably
withheld or delayed, consent to the entry of any judgment against Indemnitee or
enter into any settlement or compromise which (i) includes an admission of
fault of Indemnitee or (ii) does not include, as an unconditional term thereof,
the full release of Indemnitee from all liability in respect of such Proceeding,
which

 

5

 

release
shall be in form and substance reasonably satisfactory to Indemnitee.  This Section 10(b) shall not
apply to a Proceeding brought by Indemnitee under Section 9 above
or Section 14.

 

(c)           Notwithstanding the provisions of Section 10(b),
if in a Proceeding to which Indemnitee is a party by reason of Indemnitee’s
Corporate Status, (i) Indemnitee reasonably concludes, based upon an opinion of
counsel approved by the Company, which approval shall not be unreasonably
withheld, that he may have separate defenses or counterclaims to assert with
respect to any issue which may not be consistent with other defendants in such
Proceeding, (ii) Indemnitee reasonably concludes, based upon an opinion of
counsel approved by the Company, which approval shall not be unreasonably
withheld, that an actual or apparent conflict of interest or potential conflict
of interest exists between Indemnitee and the Company, or (iii) the Company
fails to assume the defense of such Proceeding in a timely manner, Indemnitee
shall be entitled to be represented by separate legal counsel of Indemnitee’s
choice, subject to the prior approval of the Company, which shall not be
unreasonably withheld, at the expense of the Company.  In addition, if the Company fails to comply
with any of its obligations under this Agreement or in the event that the
Company or any other person takes any action to declare this Agreement void or
unenforceable, or institutes any Proceeding to deny or to recover from
Indemnitee the benefits intended to be provided to Indemnitee hereunder,
Indemnitee shall have the right to retain counsel of Indemnitee’s choice,
subject to the prior approval of the Company, which shall not be unreasonably
withheld, at the expense of the Company (subject to Section 9(d)),
to represent Indemnitee in connection with any such matter.

 

Section 11.             Non-Exclusivity;
Survival of Rights.

 

(a)           The rights of indemnification and
advance of Expenses as provided by this Agreement shall not be deemed exclusive
of any other rights to which Indemnitee may at any time be entitled under
applicable law, the Declaration of Trust or Bylaws of the Company, any
agreement or a resolution of the shareholders entitled to vote generally in the
election of trustees or of the Board of Trustees, or otherwise.  No amendment, alteration or repeal of this
Agreement or of any provision hereof shall limit or restrict any right of
Indemnitee under this Agreement in respect of any action taken or omitted by such
Indemnitee in his Corporate Status prior to such amendment, alteration or
repeal.

 

(b)           In the event of any payment under
this Agreement, the Company shall be subrogated to the extent of such payment
to all of the rights of recovery of Indemnitee, who shall execute all papers
required and take all action necessary to secure such rights, including
execution of such documents as are necessary to enable the Company to bring
suit to enforce such rights.

 

(c)           The Company shall not be liable under
this Agreement to make any payment of amounts otherwise indemnifiable hereunder
if and to the extent that Indemnitee has otherwise actually received such
payment under any insurance policy, contract, agreement or otherwise.

 

Section 12.             Duration
of Agreement; Binding Effect.

 

(a)           This Agreement shall continue until
and terminate ten years after the date that Indemnitee shall have ceased to
serve as a director, trustee, officer, employee, or agent of the

 

 

6

 

Company
or of any other corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise which Indemnitee served at the request of the
Company; provided, however, that the rights of Indemnitee
hereunder shall continue until the final termination of any Proceeding then
pending in respect of which Indemnitee is granted rights of indemnification or
advance of Expenses hereunder and of any proceeding commenced by Indemnitee
pursuant to Section 9 relating thereto.

 

(b)           The indemnification and advance of
Expenses provided by, or granted pursuant to, this Agreement shall be binding
upon and be enforceable by the parties hereto and their respective successors
and assigns (including any direct or indirect successor by purchase, merger,
consolidation or otherwise to all or substantially all of the business or
assets of the Company), shall continue as to an Indemnitee who has ceased to be
a director, trustee, officer, employee or agent of the Company or of any other
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise which such person is or was serving at the written request of the
Company, and shall inure to the benefit of Indemnitee and his or her spouse,
assigns, heirs, devisees, executors and administrators and other legal
representatives.

 

(c)           The Company shall require and cause
any successor (whether direct or indirect by purchase, merger, consolidation or
otherwise) to all, substantially all or a substantial part, of the business
and/or assets of the Company, by written agreement in form and substance
satisfactory to Indemnitee, expressly to assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform if no such succession had taken place.

 

Section 13.             Severability.  If any provision or provisions of this
Agreement shall be held to be invalid, illegal or unenforceable for any reason
whatsoever: (a) the validity, legality and enforceability of the remaining
provisions of this Agreement (including, without limitation, each portion of
any section of this Agreement containing any such provision held to be
invalid, illegal or unenforceable that is not itself invalid, illegal or
unenforceable) shall not in any way be affected or impaired thereby; and (b) to
the fullest extent possible, the provisions of this Agreement (including,
without limitation, each portion of any section of this Agreement
containing any such provision held to be invalid, illegal or unenforceable,
that is not itself invalid, illegal or unenforceable) shall be construed so as
to give effect to the intent manifested thereby.

 

Section 14.             Limitation
and Exception to Right of Indemnification or Advance of Expenses.  Notwithstanding any other provision of this
Agreement, (a) any indemnification or advance of Expenses to which Indemnitee
is otherwise entitled under the terms of this Agreement shall be made only to
the extent such indemnification or advance of Expenses does not conflict with
applicable Maryland law and (b) Indemnitee shall not be entitled to
indemnification or advance of Expenses under this Agreement with respect to any
Proceeding brought by Indemnitee, unless (i) the Proceeding is brought to
enforce indemnification under this Agreement or otherwise or (ii) the Company’s
Bylaws, as amended, the Declaration of Trust, a resolution of the shareholders
entitled to vote generally in the election of trustees or of the Board of
Trustees or an agreement approved by the Board of Trustees to which the Company
is a party expressly provide otherwise.

 

 

7

 

Section 15.             Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall for all purposes be deemed to be an original
but all of which together shall constitute one and the same Agreement.  One such counterpart signed by the party
against whom enforceability is sought shall be sufficient to evidence the
existence of this Agreement.

 

Section 16.             Headings.  The headings of the paragraphs of this
Agreement are inserted for convenience only and shall not be deemed to
constitute part of this Agreement or to affect the construction thereof.

 

Section 17.             Modification
and Waiver.  No supplement,
modification or amendment of this Agreement shall be binding unless executed in
writing by both of the parties hereto. 
No waiver of any of the provisions of this Agreement shall be deemed or
shall constitute a waiver of any other provisions hereof (whether or not
similar) nor shall such waiver constitute a continuing waiver.

 

Section 18.             Notices.  Any notice, report or other communication
required or permitted to be given hereunder shall be in writing unless some
other method of giving such notice, report or other communication is accepted
by the party to whom it is given, and shall be given by being delivered at the
following addresses to the parties hereto:

 

(a)           If to Indemnitee, to:  The address set forth on the signature page
hereto.

 

(b)           If to the Company to:

 

Senior Housing Properties Trust

400 Centre Street

Newton, Massachusetts 02458

Attn:  Secretary

 

or to such other address as may have been furnished to Indemnitee by
the Company or to the Company by Indemnitee, as the case may be.

 

Section 19.             Governing
Law.  The parties agree that this
Agreement shall be governed by, and construed and enforced in accordance with,
the laws of the State of Maryland, without regard to its conflicts of laws
rules.

 

[SIGNATURE PAGE FOLLOWS]

 

8

 

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

 

	
  ATTEST:

  	
   

  	
  SENIOR HOUSING PROPERTIES TRUST

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  /s/ Jennifer B. Clark

  	
   

  	
  By:

  	
  /s/ John R. Hoadley

  	
  (SEAL)

  
	
   

  	
   

  	
  Name: John R. Hoadley

  	
   

  
	
   

  	
   

  	
  Title: Treasurer and Chief Financial Officer

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  WITNESS:

  	
   

  	
  INDEMNITEE

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  /s/ Judith A. Stapleton

  	
   

  	
  /s/ David J. Hegarty

  	
   

  
	
   

  	
   

  	
  Name: David J. Hegarty

  	
   

  
	
   

  	
   

  	
  Address: [address omitted]

  	
   

  

 

 

9

 

EXHIBIT
A

 

FORM OF UNDERTAKING TO REPAY
EXPENSES ADVANCED

 

The Board of Trustees of Senior Housing Properties Trust

 

Re:  Undertaking to Repay
Expenses Advanced

 

Ladies and Gentlemen:

 

This undertaking is being provided pursuant to that certain
Indemnification Agreement dated
                   ,
2004, by and between Senior Housing Properties Trust (the “Company”) and the
undersigned Indemnitee (the “Indemnification Agreement”), pursuant to which I
am entitled to advance of expenses in connection with [Description
of Proceeding] (the “Proceeding”).

 

Terms used herein and not otherwise defined shall have the meanings
specified in the Indemnification Agreement.

 

I am subject to the Proceeding by reason of my Corporate Status or by
reason of alleged actions or omissions by me in such capacity.  I hereby affirm that at all times, insofar as
I was involved as [a trustee]  [an officer] of the Company, in any of the facts or events
giving rise to the Proceeding, I (1) acted in good faith and honestly, (2) did
not receive any improper personal benefit in money, property or services and
(3) in the case of any criminal proceeding, had no reasonable cause to believe
that any act or omission by me was unlawful.

 

In consideration of the advance of expenses by the Company for
reasonable attorney’s fees and related expenses incurred by me in connection
with the Proceeding (the “Advanced Expenses”), I hereby agree that if, in
connection with the Proceeding, it is established that (1) an act or omission
by me was material to the matter giving rise to the Proceeding and (a) was
committed in bad faith or (b) was the result of active and deliberate
dishonesty or (2) I actually received an improper personal benefit in money,
property or services or (3) in the case of any criminal proceeding, I had
reasonable cause to believe that the act or omission was unlawful, then I shall
promptly reimburse the portion of the Advanced Expenses relating to the claims,
issues or matters in the Proceeding as to which the foregoing findings have
been established and which have not been successfully resolved as described in Section 5
of the Indemnification Agreement.  To the
extent that Advanced Expenses do not relate to a specific claim, issue or
matter in the Proceeding, I agree that such Expenses shall be allocated on a
reasonable and proportionate basis.

 

IN WITNESS WHEREOF, I have executed this Affirmation and Undertaking on
this         day of
                              ,
200     .

 

WITNESS:

 

	
   

  	
   

  	
   

  	
  (SEAL)

  

 

 

 

Schedule to
Exhibit 10.6

 

The following individuals are parties to
Indemnification Agreements with the Company which are substantially identical
in all material respects to the representative Indemnification Agreement filed
herewith and are dated as of the respective dates listed below.  The other Indemnification Agreements are
omitted pursuant to Instruction 2 to Item 601 of Regulation S-K.

 

	
  Name
  of Signatory

  	
   

  	
  Date

  
	
  David J. Hegarty

  	
   

  	
  March 10, 2004

  
	
  Richard A. Doyle

  	
   

  	
  February 27, 2008

  
	
  Frank J. Bailey

  	
   

  	
  March 10, 2004

  
	
  John L. Harrington

  	
   

  	
  March 10, 2004

  
	
  Adam D. Portnoy

  	
   

  	
  May 30, 2007

  
	
  Barry M. Portnoy

  	
   

  	
  March 10, 2004

  
	
  Frederick N. Zeytoonjian

  	
   

  	
  March 10, 2004

  
	
  William J. Sheehan

  	
   

  	
  May 7, 2004Exhibit
10.36

 

THIRTEENTH
AMENDMENT TO SECOND AMENDED

AND
RESTATED LEASE AGREEMENT

 

THIS
THIRTEENTH AMENDMENT TO SECOND AMENDED AND RESTATED LEASE AGREEMENT is made and entered into as of January 4,
2008 by and among (i) each of the parties identified on the signature page hereof
as a landlord, as landlord (collectively, “Landlord”), and (ii) FIVE STAR QUALITY CARE TRUST, a Maryland business trust, as
tenant (“Tenant”).

 

W  I  T  N  E
S  S  E  T  H:

 

WHEREAS, pursuant to the terms of that certain
Second Amended and Restated Lease Agreement, dated as of November 19,
2004, as amended by that certain First Amendment of Lease, dated as of May 17,
2005, that certain Second Amendment to Second Amended and Restated Lease
Agreement, dated as of June 3, 2005, that certain Third Amendment to
Second Amended and Restated Lease Agreement, dated as of October 31, 2005,
that certain other Third Amendment to Second Amended and Restated Lease
Agreement, dated as of December 30, 2005, that certain Letter Agreement,
dated as of March 13, 2006, that certain Fifth Amendment to Second Amended
and Restated Lease Agreement, dated as of September 1, 2006, that certain
Sixth Amendment to Second Amended and Restated Lease Agreement, dated as of October 1,
2006, that certain Seventh Amendment to Second Amended and Restated Lease
Agreement, dated as of October 1, 2006, that certain Eighth Amendment to
Second Amended and Restated Lease, dated as of November 1, 2006, that
certain Ninth Amendment to Second Amended and Restated Lease, dated as of November 1,
2006, that certain Tenth Amendment to Second Amended and Restated Lease
Agreement, dated as of November 6, 2006 (effective as of November 5,
2006), that certain Eleventh Amendment to Second Amended and Restated Lease
Agreement, dated as of December 22, 2006, and that certain Twelfth
Amendment to Second Amended and Restated Lease Agreement, dated as of January 1,
2007, (as so amended, the “Consolidated Lease”), Landlord leases to
Tenant, and Tenant leases from Landlord, the Leased Property (this and other
capitalized terms used but not otherwise defined herein having the meanings
given such terms in the Consolidated Lease), all as more particularly described
in the Consolidated Lease; and

 

WHEREAS, on or about the date hereof, SPTMNR Properties Trust has acquired
certain real property and related improvements with respect to six (6) senior
living properties located in Wisconsin, as more particularly described on 

 

 

 

Exhibits A-98 through A-103 attached hereto (collectively,
the “Meadowmere Properties”); and

 

WHEREAS, SPTMNR Properties Trust, the other entities
comprising Landlord and Tenant wish to amend the Consolidated Lease to include
the Meadowmere Properties;

 

NOW,
THEREFORE, in
consideration of the mutual covenants herein contained and other good and
valuable consideration, the mutual receipt and legal sufficiency of which are
hereby acknowledged, Landlord and Tenant hereby agree as follows:

 

1.             Definition of Base Year.  The definition of the term “Base Year” set
forth in Section 1.9 of the Consolidated Lease is hereby deleted in its
entirety and replaced with the following:

 

“Base
Year” shall
mean (i) with respect to the Existing Properties, the 2005 calendar year, (ii) with
respect to the Additional Properties, the 2006 calendar year, (iii) with
respect to the Hermitage/Marsh View/Somerset/Walking Horse and the Holiday
Properties, other than the Buena Vida Property, the 2007 calendar year, (iv) with
respect to the Buena Vida Property, the 2008 calendar year, and (v) with
respect to the Meadowmere Properties, the 2009 calendar year.

 

2.             Definition of Disbursement Rate.  The definition of the term “Disbursement Rate”
set forth in Section 1.23 of the Consolidated Lease is hereby deleted in
its entirety and replaced with the following:

 

“Disbursement
Rate”  shall mean (a) with respect to all
of the Properties other than the Hermitage/Marsh View/Somerset/Walking Horse
Properties, the Holiday Properties and the Meadowmere Properties, an annual
rate of interest, as of the date of determination, equal to the greater of (i) the
Interest Rate, and (ii) the per annum rate for ten (10) year U.S.
Treasury Obligations as published in The Wall Street Journal plus four
hundred (400) basis points, (b) with respect to the Hermitage
Hermitage/Marsh View/Somerset/Walking Horse Properties, the Holiday Properties
and the Meadowmere Properties, an annual rate of interest, as of the date of
determination, equal to the greater of (i) the Interest Rate, and (ii) the
per annum rate for ten (10) year U.S. Treasury Obligations as published in
The Wall Street Journal plus three hundred twenty-five (325) basis 

 

2

 

points; provided,
however, that in no event shall the Disbursement Rate exceed eleven and
one-half percent (11.5%).

 

3.             Definition of Interest Rate.  The definition of the term “Interest Rate”
set forth in Section 1.54 of the Consolidated Lease is hereby deleted in
its entirety and replaced with the following:

 

“Interest
Rate” shall
mean, (i) with respect to the Existing Properties, ten percent (10%) per
annum, (ii) with respect to the Additional Properties, nine percent (9%)
per annum, (iii) with respect to the Hermitage/Marsh View/Somerset/Walking
Horse Properties and the Holiday Properties, eight and one quarter percent
(8.25%) per annum, and (iv) with respect to the Meadowmere Properties,
eight percent (8%) per annum.

 

4.             Definition of Minimum Rent.  The definition for the term “Minimum Rent”
set forth in Section 1.69 of the Consolidated Lease is hereby deleted in
its entirety and replaced with the following:

 

“Minimum
Rent”  shall mean the sum of $47,531,493.00 per
annum.

 

5.             Definition of Meadowmere
Properties.  The following new
definition for the term “Meadowmere Properties” is hereby added to the
Consolidated Lease as a new section 1.104:

 

“Meadowmere
Properties” shall
mean the Properties located on the Land described on Exhibits A-98
through Exhibit A-103 attached hereto.

 

6.             Leased Property.  Section 2.1 of the Consolidated Lease is
hereby amended by deleting subsection (a) in its entirety and replacing it
with the following:

 

(a)           those certain tracts, pieces and
parcels of land as more particularly described in Exhibits A-1 through A-103
attached hereto and made a part hereof (the “Land”).

 

7.             Permitted Use.  Section 4.1.1 of the Consolidated Lease
is hereby amended by deleting subsection (b) in its entirety and replacing
it with the following:

 

3

 

(b)           In the event that, in the reasonable
determination of Tenant, it shall no longer be economically practical to
operate any Property as currently operated,  Tenant shall
give Landlord Notice thereof, which Notice shall set forth in reasonable detail
the reasons therefor.  Thereafter,
Landlord and Tenant shall negotiate in good faith to agree on an alternative
use for such Property, appropriate adjustments to the Additional Rent and other
related matters; provided, however, in no event shall the Minimum
Rent be reduced or abated as a result thereof. 
If Landlord and Tenant fail to agree on an alternative use for such
Property within sixty (60) days after commencing negotiations as aforesaid,
Tenant may market such Property for sale to a third party.  If Tenant receives a bona fide offer (an “Offer”)
to purchase such Property from a Person having the financial capacity to
implement the terms of such Offer, Tenant shall give Landlord Notice thereof,
which Notice shall include a copy of the Offer executed by such third
party.  In the event that Landlord shall
fail to accept or reject such Offer within thirty (30) days after receipt of
such Notice, such Offer shall be deemed to be rejected by Landlord.  If Landlord shall sell the Property pursuant
to such Offer, then, effective as of the date of such sale, this Agreement
shall terminate with respect to such Property, and the Minimum Rent shall be
reduced by an amount equal to the product of (a) the Interest Rate
applicable to such Property multiplied by (b) the net proceeds of sale
received by Landlord for such Property. 
If Landlord shall reject (or be deemed to have rejected) such Offer,
then, effective as of the proposed date of such sale, this Agreement shall
terminate with respect to such Property, and the Minimum Rent shall be reduced
by an amount equal to the product of (a) the Interest Rate applicable to
such Property multiplied by (b) the projected net proceeds determined by
reference to such Offer for such Property.

 

8.             Exhibit A.  Exhibit A to the Consolidated Lease is
hereby amended by adding Exhibits A-98 through A-103 attached
hereto following Exhibit A-97 to the Consolidated Lease.

 

9.             Ratification.  As amended hereby, the Consolidated Lease is
hereby ratified and confirmed.

 

 

[SIGNATURE PAGE FOLLOWS]

 

4

 

IN
WITNESS WHEREOF, Landlord
and Tenant have caused this Thirteenth Amendment to Second Amended and Restated
Lease Agreement to be duly executed, as a sealed instrument, as of the date
first set forth above.

 

	
   

  	
  LANDLORD:

  
	
   

  	
   

  
	
   

  	
  ELLICOTT CITY LAND I LLC, ELLICOTT CITY LAND II
  LLC, HRES2 PROPERTIES TRUST, SNH CHS PROPERTIES TRUST, SPTIHS PROPERTIES
  TRUST, SPT-MICHIGAN TRUST, SPTMNR PROPERTIES TRUST, SNH/LTA PROPERTIES TRUST, and SNH/LTA
  PROPERTIES GA LLC

  
	
   

  	
   

  
	
   

  
	
   

  	
  By: 

  	
  /s/ David J. Hegarty

  
	
   

  	
   

  	
  David J. Hegarty

  
	
   

  	
   

  	
  President, Chief
  Operating Officer and Secretary of each of the foregoing entities

  
	
   

  
	
   

  	
  TENANT:

  
	
   

  
	
   

  	
  FIVE STAR QUALITY CARE TRUST

  
	
   

  
	
   

  
	
   

  	
  By: 

  	
  /s/ Bruce J. Mackey Jr.

  
	
   

  	
   

  	
  Bruce J. Mackey Jr.

  
	
   

  	
   

  	
  Treasurer, Chief
  Financial Officer and Assistant Secretary

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