Form 8-K SENIOR HOUSING PROPERTIE For: Jun 05

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC  20549

FORM 8-K

CURRENT REPORT PURSUANT

TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): June 5, 2015

SENIOR HOUSING PROPERTIES TRUST

(Exact Name of Registrant as Specified in Its Charter)

Maryland

(State or Other Jurisdiction of Incorporation)

(617) 796-8350

(Registrant’s Telephone Number, Including Area Code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o            Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o            Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o            Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o            Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

In this Current Report on Form 8-K, the terms “SNH”, “we”, “us” and “our” refer to Senior Housing Properties Trust; “RMR LLC” refers to Reit Management & Research LLC; “RMR INC” refers to Reit Management & Research Inc.; and “RMR Trust” refers to Reit Management & Research Trust.

Item 1.01.  Entry into a Material Definitive Agreement.

Acquisition of Shares of RMR INC

On June 5, 2015, pursuant to a Transaction Agreement by and among us, our manager, RMR LLC, its then sole member, RMR Trust, and RMR INC, a new holding company of RMR LLC, we acquired 5,272,787 shares of RMR INC’s Class A Common Stock, par value $0.001 per share, or INC Shares, from RMR INC for an aggregate purchase price of $60,739,080.  As payment for the INC Shares, we issued 2,345,000 shares of our common shares of beneficial interest, par value $.01 per share, or our Common Shares, valued at $46,772,198, to RMR INC, and made a cash payment to RMR INC of $13,966,883.  Our Common Shares were valued at their volume weighted average trading prices during the 20 business days prior to the acquisition.

Simultaneously with our acquisition of INC Shares, Government Properties Income Trust, or GOV, Hospitality Properties Trust, or HPT, and Select Income REIT, or SIR, and collectively with GOV and HPT, the Other REITs, acquired 1,541,201, 5,019,121 and 3,166,891 INC Shares, respectively, at the same price per INC Share, pursuant to transaction agreements containing substantially the same terms as the Transaction Agreement, as follows:

As a result of these acquisitions, our and the Other REITs’ economic ownership in RMR LLC is as follows:

Through our and the Other REITs’ acquisition of INC Shares, we and the Other REITs indirectly acquired combined economic ownership of 48.4% of RMR LLC.  We and the Other REITs are each managed by RMR LLC.  Pursuant to the terms of the Transaction Agreement and the transaction agreements with the Other REITs, we and the Other REITs each agreed to distribute approximately half of the INC Shares we and they acquired in the transaction to our and their respective shareholders as a special distribution, and RMR INC agreed to facilitate this distribution by filing a registration statement with the Securities and Exchange Commission, or SEC, to register the INC Shares to be distributed and by seeking a listing of those shares on a national stock exchange

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upon the registration statement being declared effective by the SEC.  We currently expect to distribute the INC Shares to our shareholders before year end 2015.

Our and the Other REITs’ acquisition of INC Shares was accomplished by means of an “Up-C” transaction structure in which our Common Shares, together with common shares of the Other REITs and cash in the amounts paid to RMR INC, were paid by RMR INC to RMR Trust to acquire its ownership interest in RMR LLC.  In the Up-C transaction, RMR Trust received shares of RMR INC’s Class B-2 Common Stock, which have 10:1 voting rights and no economic interest, and are paired with RMR Trust’s ownership interest in RMR LLC.  Additionally, RMR Trust acquired shares of RMR INC’s Class B-1 Common Stock for cash at the same per share price that we paid for the INC Shares we acquired.  The Class B-1 shares have 10:1 voting rights, but otherwise have the same rights as the Class A Common Stock.  In the aggregate, RMR Trust owns, directly and indirectly, 51.6% of RMR LLC, and RMR Trust owns 91.4% of the voting rights in RMR INC.  As a result, so long as RMR Trust does not convert its ownership in RMR LLC into common shares of RMR INC, or sell the shares of RMR INC it received in the transaction to unrelated third parties, RMR Trust, which is beneficially owned by Mr. Barry Portnoy and Mr. Adam Portnoy, will control RMR INC and will continue to control RMR LLC.

Our Common Shares that we issued to RMR INC and the INC Shares that we acquired are unregistered.  Concurrently with entering into the Transaction Agreement, we also entered into a Registration Rights and Lock-Up Agreement by and among us, RMR Trust, Mr. Barry Portnoy and Mr. Adam Portnoy with respect to our Common Shares, pursuant to which RMR Trust, Mr. Barry Portnoy and Mr. Adam Portnoy each agreed not to transfer our Common Shares acquired by RMR Trust from RMR INC for a period of 10 years, subject to certain exceptions, and received demand and piggyback registration rights, subject to certain limitations.  We also entered into a Registration Rights Agreement with RMR INC with respect to the INC Shares that we do not distribute to our shareholders, pursuant to which we received demand and piggyback registration rights, subject to certain limitations.

The transactions contemplated by the Transaction Agreement and the terms thereof were negotiated and reviewed by a Joint Special Committee comprised solely of our Independent Trustees and the independent trustees of the Other REITs, or the Joint Special Committee, and were separately approved and adopted by our Independent Trustee who does not serve as an independent trustee of any of the Other REITs, or our Disinterested Trustee, by a Special Committee of our Board of Trustees, comprised solely of our Independent Trustees, or our Special Committee, and by our Board of Trustees.  Morgan Stanley & Co. LLC acted as financial advisor to the Joint Special Committee and Centerview Partners LLC acted as financial advisor to our Special Committee.

The foregoing descriptions of the Transaction Agreement, the Registration Rights and Lock-Up Agreement and the Registration Rights Agreement and related transactions are not complete and are qualified in their entirety by reference to the full text of the Transaction Agreement, the Registration Rights and Lock-Up Agreement and the Registration Rights Agreement, which are filed as Exhibits 10.1, 10.4 and 10.5, respectively, to this Current Report on Form 8-K, and are incorporated by reference herein.

This Current Report on Form 8-K refers to an anticipated distribution of INC Shares we and the Other REITs have agreed to make to our and the Other REITs’ shareholders.  This distribution will be made only after a registration statement, including a prospectus, is filed by RMR INC and declared effective by the SEC.  This Current Report on Form 8-K is not an offer to sell or solicitation of an offer to buy shares of RMR INC, us or any Other REIT.

Amendment and Restatement of Management Agreements with RMR LLC

In connection with entering into the Transaction Agreement, on June 5, 2015, we and RMR LLC entered into an amended and restated business management agreement, or the amended business management agreement,

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which amended and restated our preexisting business management agreement, as well as an amended and restated property management agreement, or the amended property management agreement, which amended and restated our preexisting property management agreement.  The amended business management agreement and the amended property management agreement are referred to together herein as the amended management agreements.  The amended management agreements were effective as of June 5, 2015.

The terms of the amended management agreements end on December 31, 2035, and automatically extend on December 31st of each year for an additional year, so that the terms of the agreements thereafter end on the 20th anniversary of the date of the extension.  We have the right to terminate the amended management agreements: (i) at any time on 60 days’ written notice for convenience, (ii) immediately upon written notice for cause, as defined therein, (iii) on 60 days’ written notice given within 60 days after the end of any calendar year for a performance reason, as defined therein, and (iv) by written notice during the 12 months following a change of control of RMR LLC, as defined therein.  RMR LLC has the right to terminate the amended management agreements for good reason, as defined therein, on 60 days’ written notice, or 90 days, if we take steps to cure.

If we terminate either of the amended management agreements for cause, as defined therein, or as a result of a manager change of control, as defined therein, we will not pay any termination fee.

If we terminate either of the amended management agreements for convenience, or if RMR LLC terminates either of the amended management agreements for good reason, we are obligated to pay RMR LLC a termination fee in an amount equal to the sum of the present values of the monthly future fees, as defined therein, for the respective amended management agreement, for the remaining term, calculating the present values of the monthly future fees by applying a discount rate equal to 1/12 of the sum of the applicable treasury rate, as defined therein, plus 300 basis points.  If we terminate either of the amended management agreements based on performance, we are obligated to pay RMR LLC a termination fee in an amount equal to the sum of the present values of the monthly future fees, as defined therein, for the respective amended management agreement, assuming a remaining term of 10 years.

The amended management agreements provide for certain proportional adjustments to the termination fees if we merge with another real estate investment trust to which RMR LLC is providing management services or if we spin-off a subsidiary of ours to which we contributed properties and to which RMR LLC is providing management services both at the time of the spin-off and on the date of the expiration or termination of either of the amended management agreements.

Our preexisting business management agreement provided that 10% of the management fee and all of the incentive fee were payable by issuance of our common shares.  The amended business management agreement provides that 100% of the management fee and the incentive fee will be paid by us in cash.

The amendments to our preexisting business management agreement and our preexisting property management agreement described above were negotiated and reviewed by the Joint Special Committee, and were approved and adopted by the Compensation Committee of our Board of Trustees, which is comprised solely of our Independent Trustees.

The foregoing descriptions of certain provisions of our preexisting business management agreement and our preexisting property management agreement and the amendments thereto are not complete and are qualified in their entirety by reference to: (i) our preexisting business management agreement, a copy of which is filed as Exhibit 10.1 to our Current Report on Form 8-K filed with the SEC on December 26, 2013, and the first amendment to our preexisting business management agreement, a copy of which is filed as Exhibit 10.1 to our Current Report on Form 8-K filed with the SEC on May 12, 2014, (ii) the amended business management agreement, a copy of which is filed as Exhibit 10.2 to this Current Report on Form 8-K, (iii) our preexisting property management agreement, a copy of which is filed as Exhibit 10.2 to our Current Report on Form 8-K filed

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with the SEC on January 13, 2010, the first amendment to our preexisting property management agreement, a copy of which is filed as Exhibit 10.5 to our Annual Report on Form 10-K for the year ended December 31, 2010 filed with the SEC on February 24, 2011, the second amendment to our preexisting property management agreement, a copy of which is filed as Exhibit 10.2 to our Current Report on Form 8-K filed with the SEC on December 11, 2012, and the third amendment to our preexisting property management agreement, a copy of which is filed as Exhibit 10.2 to our Current Report on Form 8-K filed with the SEC on May 12, 2014 and (iv) the amended property management agreement, a copy of which is filed as Exhibit 10.3 to this Current Report on Form 8-K, each of which is incorporated herein by reference.

Information Regarding Certain Relationships and Related Person Transactions

One of our Managing Trustees, Mr. Barry Portnoy, is chairman, an owner (through his majority ownership of RMR Trust) and an employee of RMR LLC.  Our other Managing Trustee, Mr. Adam Portnoy, is the son of Mr. Barry Portnoy, and an owner (through his part ownership of RMR Trust), president, chief executive officer and a director of RMR LLC.  Mr. Adam Portnoy also serves as President and a director of RMR INC, and Mr. Barry Portnoy is the other director of RMR INC.  Each of our executive officers is also an officer of RMR LLC.  A majority of our Independent Trustees and the members of the Joint Special Committee also serve as independent directors or independent trustees of other public companies to which RMR LLC provides management services.  Mr. Barry Portnoy serves as a managing director or managing trustee of those companies and Mr. Adam Portnoy serves as a managing trustee of a majority of those companies.  In addition, certain officers of RMR LLC serve as officers of those companies, including RMR INC.

For further information about our relationships and transactions with RMR LLC, including the other entities to which RMR LLC provides management services and other related person transactions, please see our Annual Report on Form 10-K for the year ended December 31, 2014, or the Annual Report, our definitive Proxy Statement for our 2015 Annual Meeting of Shareholders, or the Proxy Statement, our Quarterly Report on Form 10-Q for the quarter ended March 31, 2015, or our Quarterly Report, and our other filings with the SEC, including Note 5 to the Consolidated Financial Statements included in the Annual Report, the sections captioned “Business”, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Related Person Transactions” and “Warning Concerning Forward Looking Statements” of the Annual Report, the section captioned “Related Person Transactions” and the information regarding our Trustees and executive officers in the Proxy Statement, Note 10 to the Condensed Consolidated Financial Statements included in the Quarterly Report and the sections captioned “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Related Person Transactions” and “Warning Concerning Forward Looking Statements” of the Quarterly Report.  In addition, please see the section captioned “Risk Factors” of the Annual Report for a description of risks that may arise from these transactions and relationships.  Our filings with the SEC, including the Annual Report, the Proxy Statement and the Quarterly Report, are available at the SEC’s website at www.sec.gov.  Copies of certain of our agreements with these related parties are publicly available as exhibits to our public filings with the SEC and accessible at the SEC’s website.

Item 7.01.  Regulation FD Disclosure.

On June 8, 2015, we issued a press release announcing the transactions contemplated by the Transaction Agreement, a copy of which is furnished herewith as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference herein, and we released an investor presentation containing additional detail on the transactions contemplated by the Transaction Agreement, a copy of which is furnished herewith as Exhibit 99.2.

WARNING CONCERNING FORWARD LOOKING STATEMENTS

THIS CURRENT REPORT ON FORM 8-K CONTAINS STATEMENTS THAT CONSTITUTE FORWARD LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES

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LITIGATION REFORM ACT OF 1995 AND OTHER SECURITIES LAWS.  ALSO, WHENEVER WE USE WORDS SUCH AS “BELIEVE”, “EXPECT”, “ANTICIPATE”, “INTEND”, “PLAN”, “ESTIMATE” OR SIMILAR EXPRESSIONS, WE ARE MAKING FORWARD LOOKING STATEMENTS.  THESE FORWARD LOOKING STATEMENTS ARE BASED UPON OUR PRESENT INTENT, BELIEFS OR EXPECTATIONS, BUT FORWARD LOOKING STATEMENTS ARE NOT GUARANTEED TO OCCUR AND MAY NOT OCCUR.  ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE CONTAINED IN OR IMPLIED BY THESE FORWARD LOOKING STATEMENTS AS A RESULT OF VARIOUS FACTORS, INCLUDING SOME WHICH ARE BEYOND OUR CONTROL.  FOR EXAMPLE:

·                  THIS CURRENT REPORT STATES: THE PURCHASE PRICE WE PAID FOR THE INC SHARES; OUR AND THE OTHER REITS’ COMBINED ECONOMIC OWNERSHIP INTEREST IN RMR LLC; THAT MORGAN STANLEY & CO. LLC ACTED AS FINANCIAL ADVISOR TO THE JOINT SPECIAL COMMITTEE; AND THAT CENTERVIEW PARTNERS LLC ACTED AS FINANCIAL ADVISOR TO OUR SPECIAL COMMITTEE.  AN IMPLICATION OF THESE STATEMENTS MAY BE THAT THE INC SHARES TO BE DISTRIBUTED TO OUR SHAREHOLDERS WILL HAVE MARKET VALUE AT LEAST EQUAL TO THE VALUE WE PAID FOR THE INC SHARES.  IN FACT, THE VALUE OF THE INC SHARES MAY BE DIFFERENT FROM THE PRICE WE PAID FOR THE INC SHARES.  THE MARKET VALUE OF THE INC SHARES WILL DEPEND UPON VARIOUS FACTORS, INCLUDING SOME THAT ARE BEYOND OUR CONTROL, SUCH AS MARKET CONDITIONS GENERALLY AT THE TIME THE INC SHARES ARE AVAILABLE FOR TRADING.  THERE CAN BE NO ASSURANCE PROVIDED REGARDING THE PRICE AT WHICH THE INC SHARES WILL TRADE IF AND WHEN THEY ARE DISTRIBUTED AND LISTED ON A NATIONAL STOCK EXCHANGE.

·                  THIS CURRENT REPORT STATES THAT WE CURRENTLY EXPECT TO DISTRIBUTE APPROXIMATELY HALF OF THE INC SHARES WE ACQUIRED TO OUR SHAREHOLDERS BEFORE YEAR END 2015.  THE PROCESS OF PREPARING A REGISTRATION STATEMENT WILL REQUIRE EXTENSIVE LEGAL AND ACCOUNTING SERVICES AND IS LIKELY TO TAKE CONSIDERABLE TIME.  AFTER A REGISTRATION STATEMENT IS FILED BY RMR INC WITH THE SEC, IT WILL BE SUBJECT TO REVIEW BY SEC STAFF, WHICH MAY ALSO TAKE CONSIDERABLE TIME.  THE LISTING OF THE INC SHARES ON A NATIONAL STOCK EXCHANGE WILL ALSO BE SUBJECT TO THE SATISFACTION OF THE LISTING REQUIREMENTS AND APPROVAL OF THE APPLICABLE STOCK EXCHANGE.  WE CAN PROVIDE NO ASSURANCE WHEN OR IF THE REGISTRATION STATEMENT WILL BE DECLARED EFFECTIVE BY THE SEC, THAT THE INC SHARES WILL BE APPROVED FOR LISTING ON A NATIONAL STOCK EXCHANGE OR THAT THE DISTRIBUTION OF THE INC SHARES WILL OCCUR BEFORE YEAR END 2015 OR EVER.

·                  THIS CURRENT REPORT STATES THAT THE TRANSACTIONS CONTEMPLATED BY THE TRANSACTION AGREEMENT AND THE TERMS THEREOF, AND THE AMENDMENTS TO OUR PREEXISTING BUSINESS MANAGEMENT AGREEMENT AND OUR PREEXISTING PROPERTY MANAGEMENT AGREEMENT WERE NEGOTIATED AND REVIEWED BY THE JOINT SPECIAL COMMITTEE; THAT THE TRANSACTIONS CONTEMPLATED BY THE TRANSACTION AGREEMENT AND THE TERMS THEREOF WERE SEPARATELY REVIEWED AND APPROVED BY OUR DISINTERESTED TRUSTEE, OUR SPECIAL COMMITTEE AND OUR BOARD OF TRUSTEES; AND THAT THE AMENDMENTS TO OUR PREEXISTING BUSINESS MANAGEMENT AGREEMENT AND OUR PREEXISTING PROPERTY MANAGEMENT AGREEMENT WERE APPROVED AND ADOPTED BY OUR COMPENSATION COMMITTEE, WHICH IS COMPRISED SOLELY OF OUR INDEPENDENT TRUSTEES.  DESPITE THESE PROCEDURAL SAFEGUARDS, WE COULD STILL BE SUBJECT TO CLAIMS

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CHALLENGING THESE TRANSACTIONS OR OUR ENTRY INTO THESE AGREEMENTS BECAUSE OF THE MULTIPLE RELATIONSHIPS AMONG US, RMR LLC AND THEIR RELATED PERSONS AND ENTITIES OR OTHER REASONS, AND DEFENDING EVEN MERITLESS CLAIMS COULD BE EXPENSIVE AND DISTRACTING TO MANAGEMENT.

THE INFORMATION CONTAINED IN OUR FILINGS WITH THE SEC, INCLUDING UNDER THE CAPTION “RISK FACTORS” IN OUR PERIODIC REPORTS, OR INCORPORATED THEREIN, IDENTIFIES OTHER IMPORTANT FACTORS THAT COULD CAUSE DIFFERENCES FROM OUR FORWARD LOOKING STATEMENTS.  OUR FILINGS WITH THE SEC ARE AVAILABLE ON THE SEC’S WEBSITE AT WWW.SEC.GOV.

YOU SHOULD NOT PLACE UNDUE RELIANCE UPON OUR FORWARD LOOKING STATEMENTS.

EXCEPT AS REQUIRED BY LAW, WE DO NOT INTEND TO UPDATE OR CHANGE ANY FORWARD LOOKING STATEMENTS AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE.

Item 9.01.  Financial Statements and Exhibits.

(d)                                 Exhibits.

10.1                        Transaction Agreement, dated as of June 5, 2015, among Senior Housing Properties Trust, Reit Management & Research LLC, Reit Management & Research Trust and Reit Management & Research Inc. (Filed herewith.)

10.2                        Second Amended and Restated Business Management Agreement, dated as of June 5, 2015, between Senior Housing Properties Trust and Reit Management & Research LLC. (Filed herewith.)

10.3                        Second Amended and Restated Property Management Agreement, dated as of June 5, 2015, between Senior Housing Properties Trust and Reit Management & Research LLC. (Filed herewith.)

10.4                        Registration Rights and Lock-Up Agreement, dated as of June 5, 2015, among Senior Housing Properties Trust, Reit Management & Research Trust, Barry M. Portnoy and Adam D. Portnoy. (Filed herewith.)

10.5                        Registration Rights Agreement, dated as of June 5, 2015, between Senior Housing Properties Trust and Reit Management & Research Inc. (Filed herewith.)

99.1                        Press Release dated June 8, 2015. (Furnished herewith.)

99.2                        Investor Presentation dated June 8, 2015. (Furnished herewith.)

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

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Exhibit 10.1

EXECUTION VERSION

TRANSACTION AGREEMENT

BY AND AMONG

REIT MANAGEMENT & RESEARCH LLC,

REIT MANAGEMENT & RESEARCH TRUST,

REIT MANAGEMENT & RESEARCH INC.

AND

SENIOR HOUSING PROPERTIES TRUST

Dated as of June 5, 2015

TABLE OF CONTENTS

TRANSACTION AGREEMENT

This Transaction Agreement (as amended, supplemented or restated from time to time, this “Agreement”) is entered into as of June 5, 2015, by and among (i) Reit Management & Research LLC, a Maryland limited liability company (“LLC”), (ii) Reit Management & Research Trust, a Massachusetts business trust (“TRUST”), (iii) Reit Management & Research Inc., a Maryland corporation (“INC,” and together with LLC and TRUST, the “RMR Parties”), and (iv) Senior Housing Properties Trust, a Maryland real estate investment trust (“REIT”).  The RMR Parties and REIT are each referred to as a “Party” and collectively as the “Parties.”

RECITALS

WHEREAS, the Parties desire to effect the Transactions (as defined below) on the terms and conditions set forth herein; and

WHEREAS, the amendment and restatement of REIT’s business management agreement and property management agreement with LLC contemplated by this Agreement is a condition of and material inducement to each RMR Party’s agreement to effect the Transactions on the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the foregoing recitals and of the representations, warranties, covenants and agreements contained herein, and other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, the Parties hereby agree as follows:

ARTICLE I

DEFINITIONS

Section 1.1                                    Certain Defined Terms. As used in this Agreement, the following terms shall have the following meanings:

“Business Day” means a day, other than Saturday, Sunday or other day on which banks located in Boston, Massachusetts or Baltimore, Maryland are authorized or required by Law to close.

“Class A Common Stock” means the Class A Common Stock, par value $0.001 per share, of INC.

“Class B-1 Common Stock” means the Class B-1 Common Stock, par value $0.001 per share, of INC.

“Class B-2 Common Stock” means the Class B-2 Common Stock, par value $0.001 per share, of INC.

“Closing” means the closing of the Party Transactions.

“Code” means the Internal Revenue Code of 1986.

“Contract” means any agreement, obligation, contract, license, understanding, commitment, indenture or instrument, whether written or oral.

“Encumbrance” means any lien, pledge, charge, claim, encumbrance, equitable interest, security interest, option, mortgage, easement, right of first refusal or restriction of any kind.

“ERISA” means the Employee Retirement Income Security Act of 1974.

“Exchange Act” means the Securities Exchange Act of 1934.

“Founders” means Barry M. Portnoy and Adam D. Portnoy.

“Governmental Entity” means (a) the United States of America, (b) any other sovereign nation, (c) any state, province, district, territory or other political subdivision of (a) or (b) of this definition, including any county, municipal or other local subdivision of the foregoing, or (d) any entity exercising executive, legislative, judicial, regulatory or administrative functions of government on behalf of (a), (b) or (c) of this definition.

“Independent Director” means an “Independent Director” as such term may be defined in the Bylaws of INC.

“Law” means any law, statute, ordinance, rule, regulation, directive, code or order enacted, issued, promulgated, enforced or entered by any Governmental Entity.

“LLC Class A Unit” means a “Class A Unit,” as such term is defined in the Operating Agreement.

“LLC Class B Unit” means a “Class B Unit,” as such term is defined in the Operating Agreement.

“Member” means a “Member” of LLC, as such term is defined in the Operating Agreement.

“Operating Agreement” means the Operating Agreement of LLC dated as of June 5, 2015.

“Other REITs” means (i) Government Properties Income Trust, a Maryland real estate investment trust, (ii) Hospitality Properties Trust, a Maryland real estate investment trust, and (iii) Select Income REIT, a Maryland real estate investment trust.

“Other REIT Distribution Shares” means the shares of Class A Common Stock that the Other REITs have agreed to distribute to their shareholders pursuant to the Other REIT Transaction Agreements.

“Other REIT Transaction Agreements” means (i) the Transaction Agreement by and among the RMR Parties and Government Properties Income Trust, (ii) the Transaction

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Agreement by and among the RMR Parties and Hospitality Properties Trust and (iii) the Transaction Agreement by and among the RMR Parties and Select Income REIT, in each case, dated as of the date hereof.

“Other REIT Transactions Closings” means the closings of the transactions contemplated by the Other REIT Transaction Agreements.

“Party Transactions” means the Transactions other than the Distribution and the distribution of the Other REIT Distribution Shares.

“Person” means an individual, a corporation, a general or limited partnership, an association, a limited liability company, a Governmental Entity, a trust, a joint venture, a joint stock company or an other entity or organization.

“Proceeding” means any suit, action, proceeding, arbitration, mediation, audit, hearing, inquiry or, to the knowledge of the Person in question, investigation (in each case, whether civil, criminal, administrative, investigative, formal or informal) commenced, brought, conducted or heard by or before, or otherwise involving, any Governmental Entity.

“REIT Common Shares” means the common shares of beneficial interest of REIT, par value $.01 per share.

“Representatives” means, when used with respect to any Person, such Person’s directors, trustees, officers, employees, financial advisors, accountants, legal counsel, investment bankers, and other agents, advisors and other representatives.

“RMR Advisors” means RMR Advisors LLC, a Maryland limited liability company.

“RMR Australia” means RMR Australia Asset Management Pty Ltd., a company organized under the Laws of the State of Victoria, Australia.

“RMR Entity” means each of LLC, INC, RMR Advisors, RMR Intl and RMR Australia.

“RMR Intl” means RMR Intl LLC, a Maryland limited liability company.

“SEC” means the Securities and Exchange Commission.

“Securities Act” means the Securities Act of 1933.

“Taxes” means all United States federal, state, local, foreign or other income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental, customs duties, capital stock, franchise, profits, withholding, social security, unemployment, disability, real property, personal property, sales, use, hotel and motel occupancy, transfer, registration, value added, alternative or add-on minimum, estimated or other taxes, fees, assessments or charges of any kind whatsoever, together with any interest, penalties or additions to tax imposed with respect thereto.

“Transactions” means the transactions contemplated by this Agreement.

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“Transaction Documents” means the agreements referenced in Sections 6.1(c) through and including Section 6.1(g) and all other agreements and documents entered into in connection with the Transactions.

Section 1.2                                    Terms Defined Elsewhere in this Agreement.  Each of the following terms is defined in the Section set forth opposite such term:

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Section 1.3                                    Construction.  Unless the context otherwise requires, as used in this Agreement: (i) “or” is not exclusive; (ii) “including” and its variants mean “including, without limitation” and its variants; (iii) words defined in the singular have the parallel meaning in the plural and vice versa; (iv) references to “written,” “in writing” and comparable terms refer to printing, typing and other means of reproducing words (including electronic media) in a visible form; (v) words of one gender shall be construed to apply to each gender; (vi) all pronouns and any variations thereof refer to the masculine, feminine or neuter as the context may require; (vii) “Articles,” “Sections,” and “Schedules” refer to Articles, Sections, and Schedules of this Agreement unless otherwise specified; (viii) “hereof”, “herein” and “hereunder” and words of like import used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement; (ix) “Dollars” and “$” mean United States Dollars; and (x) the word “extent” in the phrase “to the extent” shall mean the degree to which a subject or other thing extends and such phrase shall not mean simply “if.”

Section 1.4                                    Other Interpretative Provisions.  The headings in this Agreement are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement.  Any capitalized term used in any Schedule to this Agreement, but not otherwise defined therein, shall have the meaning as defined in this Agreement.  All Schedules annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein.  References to any statute shall be deemed to refer to such statute as amended from time to time and to any rules or regulations promulgated thereunder.  References to any Contract are to that Contract as amended, modified or supplemented from time to time in accordance with the terms hereof and thereof.  References to any Person include the successors and permitted assigns of that Person. References from or through any date mean, unless otherwise specified, from and including or through and including, respectively.

Section 1.5                                    Joint Drafting.  The Parties have been represented by counsel in the negotiation and preparation of this Agreement; therefore, this Agreement will be deemed to be drafted by each of the Parties, and no rule of construction will be invoked respecting the authorship of this Agreement.

ARTICLE II

THE CONTRIBUTIONS

Section 2.1                                    The Contributions.

(a)                                 Subject to the terms and conditions hereinafter set forth, and on the basis of, in reliance upon and in consideration for the representations, warranties, covenants, agreements and closing conditions set forth herein, the applicable Parties shall take the actions described in this Section 2.1(a) or cause such actions to take place:

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(i)                                     TRUST’s Contribution to INC.  TRUST shall contribute to INC as a capital contribution $11,520,000 in cash, and in exchange INC shall issue to TRUST 1,000,000 shares of Class B-1 Common Stock (“TRUST’s Contribution to INC”).

(ii)                                  INC’s Contribution to LLC.  Immediately following TRUST’s Contribution to INC, INC shall contribute $11,520,000 in cash as a capital contribution to LLC, and in exchange LLC shall issue to INC 1,000,000 LLC Class B Units (“INC’s Contribution to LLC”).

(iii)                               REIT’s Contribution to INC.  Immediately following INC’s Contribution to LLC, REIT shall contribute $60,739,080 to INC as a capital contribution (“REIT’s Contribution”), which capital contribution shall be comprised of a number of newly-issued REIT Common Shares contributed at a price per REIT Common Share of $19.95 and, to the extent that amount of such REIT Common Shares would exceed one percent (1%) of the outstanding REIT Common Shares prior to such issuance or is otherwise limited to comply with the rules of the stock exchange on which the REIT Common Shares are listed, cash.  In exchange for REIT’s Contribution, INC shall issue to REIT 5,272,787  shares of Class A Common Stock (“Subject Class A Shares”). The REIT Common Shares contributed to INC under this Section 2.1(a)(iii) are referred to herein as the “Subject REIT Shares” and the transactions provided for in this Section 2.1(a)(iii) are referred to herein as “REIT’s Contribution to INC”.

(iv)                              INC’s Purchase of LLC Class A Units.  Immediately following REIT’s Contribution to INC, INC shall purchase from TRUST, and TRUST shall sell to INC, 5,272,787  LLC Class A Units owned by TRUST free and clear from all Encumbrances for $60,739,080 to be paid by: (1) the transfer by INC to TRUST of the Subject REIT Shares and any cash received in REIT’s Contribution to INC and (2) the issuance by INC to TRUST of 5,272,787 shares of Class B-2 Common Stock (“INC’s Purchase of LLC Class A Units”).  For United States federal (and conforming state) income Tax purposes, the Parties agree that the consideration described in Section 2.1(a)(iv)(1) has a fair market value of $60,739,080, and shall perform such income Tax reporting accordingly, except as required by Law.

(b)                                 Following the Closing and the Other REIT Transactions Closings, the capital structure and ownership of LLC shall be as set forth in Schedule I attached hereto and the capital structure and ownership of INC shall be as set forth in Schedule II attached hereto.  For the avoidance of doubt, the contributions contemplated by Section 2.1(a)(i) and Section 2.1(a)(ii) are the exact same contributions contemplated by the comparable sections of the Other REIT Transaction Agreements.

Section 2.2                                    The Closing.  Unless otherwise mutually agreed in writing among the Parties, the Closing shall take place at the offices of Skadden, Arps, Slate, Meagher & Flom LLP, 500 Boylston Street, Boston, Massachusetts 02116, or at such other place or through such other means as such Parties may agree, simultaneously with the execution and delivery of this Agreement, the execution and delivery of the Other REIT Transaction Agreements by the parties thereto and the Other REIT Transactions Closings so long as the conditions precedent set forth in Article VI have been previously satisfied or waived in writing (other than conditions with respect

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to actions the respective Parties will take at the Closing itself, but subject to the satisfaction or waiver of those conditions) (the “Closing Date”).

Section 2.3                                    Closing Deliverables.  At the Closing:

(a)                                 TRUST’s Contribution to INC.

(i)                                     TRUST shall deliver to INC $11,520,000 in immediately available funds by wire transfer to one or more bank accounts designated by INC; and

(ii)                                  INC shall deliver, or cause to be delivered, to TRUST either (A) a stock certificate or certificates evidencing the issuance to TRUST of 1,000,000 shares of Class B-1 Common Stock, or (B) evidence in a form reasonably satisfactory to TRUST that an account for TRUST has been created on, and the issuance to TRUST of 1,000,000 shares of Class B-1 Common Stock has been credited to such account in, the book entry transfer system maintained by INC or its transfer agent, as requested by TRUST.

(b)                                 INC’s Contribution to LLC.

(i)                                     INC shall deliver to LLC $11,520,000 in immediately available funds by wire transfer to one or more bank accounts designated by LLC; and

(ii)                                  LLC shall deliver, or cause to be delivered, to INC a Schedule of Members to the Operating Agreement reflecting the admittance of INC as Managing Member and the issuance to INC of 1,000,000 LLC Class B Units.

(c)                                  REIT’s Contribution to INC.

(i)                                     INC shall deliver, or cause to be delivered, to REIT either (A) a stock certificate or certificates evidencing the issuance to REIT of 5,272,787  shares of Class A Common Stock or (B) evidence in a form reasonably satisfactory to REIT that an account for REIT has been created on, and the issuance to REIT of 5,272,787  shares of Class A Common Stock has been credited to such account in, the book entry transfer system maintained by INC or its transfer agent, as requested by REIT.

(ii)                                  REIT shall deliver, or cause to be delivered, to INC (A) either (1) a share certificate or certificates evidencing the issuance to INC of the Subject REIT Shares, or (2) evidence in a form reasonably satisfactory to INC that an account for INC has been created on, and the issuance to INC of the Subject REIT Shares has been credited to such account in, the book entry transfer system maintained by REIT or its transfer agent, as requested by INC and (B) any cash portion of REIT’s Contribution in immediately available funds by wire transfer to one or more bank accounts designated by INC.

(d)                                 INC’s Purchase of LLC Class A Units.

(i)                                     LLC shall deliver to INC a Schedule of Members to the Operating Agreement reflecting the admittance of INC as Member and owner of 5,272,787  LLC Class A Units; and

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(ii)                                  INC shall (A) deliver, or cause to be delivered, to TRUST a stock power for the Subject REIT Shares, in customary form, (B) either (1) deliver to TRUST a share certificate or certificates evidencing the issuance to TRUST of the Subject REIT Shares or (2) deliver, or cause to be delivered, to REIT or its transfer agent a letter of direction directing REIT or its transfer agent to create an account for TRUST on, and credit the Subject REIT Shares in such account in, the book entry transfer system maintained by REIT’s transfer agent, as requested by TRUST, and (C) deliver, or cause to be delivered, to TRUST any cash portion of REIT’s Contribution in immediately available funds by wire transfer to one or more bank accounts designated by TRUST and (D) deliver, or cause to be delivered, to TRUST either (1) a stock certificate or certificates evidencing the issuance to TRUST of 5,272,787  shares of Class B-2 Common Stock or (2) evidence in a form reasonably satisfactory to TRUST that an account for TRUST has been created on, and the issuance to TRUST of 5,272,787  shares of Class B-2 Common Stock has been credited to such account in, the book entry transfer system maintained by INC or its transfer agent, as requested by TRUST.

(e)                                  Other Transaction Documents.  Each Party shall deliver to the applicable parties one or more executed signature pages to each Transaction Document to which it is a party, as such applicable parties may request.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

Section 3.1                                    Representations and Warranties of TRUST.  TRUST hereby represents and warrants to REIT, subject to the exceptions set forth in the disclosure schedule prepared by TRUST and delivered to REIT concurrently with the execution and delivery of this Agreement (“TRUST’s Disclosure Schedule”), that as of the date hereof as follows:

(a)                                 Organization.  TRUST and each RMR Entity is duly organized, validly existing and in good standing under the Laws of its jurisdiction of organization or incorporation, as applicable.

(b)                                 Due Authorization.  The execution, delivery and performance by each RMR Party of this Agreement and each Transaction Document to which it is a party have been duly authorized by all necessary action.

(c)                                  Authority; Validity of Agreement.  Each RMR Party has the requisite power, authority and legal right to execute and deliver this Agreement and each Transaction Document to which it is a party, and to consummate the transactions contemplated hereby and thereby, as the case may be.  This Agreement and each Transaction Document to which an RMR Party is a party have been duly executed and delivered by such RMR Party and constitute its legal, valid and binding obligations, enforceable against it in accordance with its terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar Laws relating to or affecting creditors’ rights generally.

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(d)                                 No Conflicts.  The execution, delivery and performance by each RMR Party of this Agreement and the Transaction Documents to which it is a party, the consummation by such RMR Party of the transactions contemplated hereby or thereby and the compliance by such RMR Party with the terms and provisions hereof or thereof, will not, directly or indirectly (with or without notice or lapse of time or both), (i) contravene or conflict with, or result in a breach or termination of, or constitute a default under (or with notice or lapse of time or both, result in the breach or termination of or constitute a default under) the organizational documents of such RMR Party, (ii) constitute a violation by TRUST or any RMR Entity of any existing requirement of Law applicable to it or any of its properties, rights or assets or (iii) require the consent or approval of any Person, except, in the case of clauses (ii) and (iii), as would not reasonably be expected to result in, individually or in the aggregate, a material adverse effect on its ability to consummate the transactions contemplated by this Agreement and the Transaction Documents to which it is a party.

(e)                                  Litigation.  There are no Proceedings pending or, to TRUST’s knowledge, threatened, against TRUST or any RMR Entity which, individually or in the aggregate, if determined adversely to it, would reasonably be expected to materially and adversely affect the ability of any RMR Party to perform its obligations under this Agreement and the Transaction Documents to which it is a party.

(f)                                   INC Capitalization.  The authorized capital stock of INC consists of (i) 31,000,000 shares of Class A Common Stock, (ii) 1,000,000 shares of Class B-1 Common Stock and (iii) 15,000,000 shares of Class B-2 Common Stock (collectively, “INC Common Stock”).  No shares of INC Common Stock are issued or outstanding.  When issued pursuant to the terms of this Agreement and receipt of payment therefor, all of the issued and outstanding shares of INC Common Stock will be duly authorized, validly issued, fully paid and non-assessable.

(g)                                  LLC Financial Statements.  LLC has provided to REIT copies of: (i) the audited consolidated balance sheets of LLC, as historically presented, which excludes RMR Australia and RMR Advisors, as at September 30, 2014, September 30, 2013, September 30, 2012, September 30, 2011 and September 30, 2010 and the audited consolidated statements of income, changes in members’ equity and cash flow for the fiscal years ended September 30, 2014, September 30, 2013, September 30, 2012, September 30, 2011 and September 30, 2010, together with the report thereon of Ernst & Young LLP, independent certified public accountants and the notes thereto; (ii) the unaudited consolidated statements of income of LLC for the fiscal years ended September 30, 2014, September 30, 2013, September 30, 2012, September 30, 2011 and September 30, 2010;  (iii) the unaudited consolidated statements of income of RMR Advisors for the fiscal years ended September 30, 2014, September 30, 2013, September 30, 2012, September 30, 2011 and September 30, 2010; (iv) the unaudited consolidated statements of income of RMR Australia for the fiscal years ended September 30, 2014 and September 30, 2013; (v) the unaudited consolidated balance sheet of LLC as at March 31, 2015 and the related unaudited consolidated statements of income for the six months ended March 31, 2015 and March 31, 2014 ((ii) through (v), collectively, the “Unaudited LLC Financial Statements”); and (vi) the unaudited consolidated balance sheet of LLC as at April 30, 2015 giving effect to certain transactions which occurred subsequent to the date of the audited and unaudited financial statements in (i) through (vi) (the “LLC Interim Balance Sheet”).  Such financial statements (i) 

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have been prepared from, are in accordance with, and accurately reflect the books and records of LLC and its subsidiaries in all material respects, (ii) have been prepared in accordance with U.S. generally accepted accounting principles as in effect from time to time (“GAAP”) applied on a consistent basis during the periods involved, except as may be indicated in the notes thereto or, in the case of the Unaudited LLC Financial Statements and the LLC Interim Balance Sheet, for year-end audit adjustments (which are not material in amount) and (iii) fairly present, in all material respects, the consolidated financial position of LLC and its subsidiaries, as of the respective dates thereof, and the consolidated results of their operations, and, where included, their consolidated members’ equity and their consolidated cash flows for the respective periods indicated, subject, in the case of the Unaudited LLC Financial Statements and the LLC Interim Balance Sheet, to year-end audit adjustments (which are not material in amount).

(h)                                 Undisclosed Liabilities.  Except (i) as reflected or reserved against in the LLC Interim Balance Sheet, (ii) for liabilities and obligations incurred since the date of the LLC Interim Balance Sheet in the ordinary course of business consistent with past practice (none of which have had, or could reasonably be expected to have, a material adverse effect on LLC) and (iii) for liabilities and obligations expressly contemplated by or under this Agreement, the Other REIT Transaction Agreements or any Transaction Document, none of LLC, its subsidiaries or INC have any material liabilities or obligations of any nature (whether absolute or contingent, asserted or unasserted, known or unknown, primary or secondary, direct or indirect, and whether or not accrued) that would be required by GAAP to be reflected on a consolidated balance sheet of LLC and its subsidiaries or in the notes thereto.

(i)                                     LLC Capitalization and Ownership of LLC Class A Units and LLC Class B Units.  The membership interest of LLC consists of 30,000,000 LLC Class A Units and 1,000,000 LLC Class B Units.  TRUST owns beneficially and of record all of the issued and outstanding LLC Class A Units, free and clear from all Encumbrances.  Upon completion of INC’s Purchase of LLC Class A Units and INC’s Contribution to LLC, INC will own 15,000,000 Class A Units and all of the LLC Class B Units, free and clear from all Encumbrances.

(j)                                    RMR Advisors, RMR Intl and RMR Australia Capitalization.  LLC owns beneficially and of record all of the issued and outstanding membership interests of RMR Advisors, free and clear from all Encumbrances.  LLC owns beneficially and of record all of the issued and outstanding membership interests of RMR Intl, free and clear from all Encumbrances.  RMR Intl owns beneficially and of record all of the issued and outstanding capital stock of RMR Australia, free and clear from all Encumbrances.

(k)                                 Compliance with Law.  Each RMR Entity is, and has been at all times since June 1, 2010, in compliance in all material respects with all material Laws applicable to the conduct of its respective business, and holds, and has held since June 1, 2010, all material permits, registrations, authorizations, or licenses from Governmental Entities with jurisdiction over such RMR Entity, necessary for the conduct of its business as from time to time conducted.

(l)                                     ERISA.  Except for such instances as would not reasonably be expected, individually or in the aggregate, to result in a material adverse effect on LLC, (i) each employee benefit plan, within the meaning of Section 3(3) of ERISA, for which LLC or any organization that is, or has in the five years prior to the Closing been, treated as a single employer with LLC

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under Sections 414(b), (c), (m) or (o) of the Code or Sections 4001(a)(14) or 4001(b)(1) of ERISA (each, an “ERISA Affiliate”) would have any liability (each, a “Plan”) has been maintained in compliance with its terms and the requirements of any applicable statutes, orders, rules and regulations, including but not limited to ERISA and the Code; (ii) no prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975 of the Code, has occurred with respect to any Plan (excluding transactions effected pursuant to a statutory or administrative exemption); (iii) for each Plan that is subject to the funding rules of Section 412 of the Code or Section 302 of ERISA, all required contributions have been made and there is no accumulated funding deficiency, whether or not waived; (iv) no “reportable event” (within the meaning of Section 4043(c) of ERISA) has occurred or is reasonably expected to occur; and (v) neither LLC nor any ERISA Affiliate has incurred, nor reasonably expects to incur, any liability under Title IV of ERISA (other than contributions to the Plan or premiums to the Pension Benefit Guaranty Corporation, in the ordinary course and without default) in respect of a Plan (including a “multiemployer plan,” within the meaning of Section 4001(a)(3) of ERISA).

(m)                             Taxes.  Each RMR Entity (i) has timely filed or caused to be timely filed or will timely file or cause to be timely filed (taking into account any extension of time to file granted or obtained) with the appropriate Governmental Entity all material Tax returns required to be filed by or with respect to it, and all such filed Tax returns are true, correct and complete in all material respects and were prepared in material compliance with all applicable Laws and (ii) has timely paid or will timely pay all amounts of material Taxes due and payable by or with respect to it (whether or not shown on any Tax return) except to the extent that such Taxes are being contested in good faith and for which it has set aside adequate reserves in accordance with GAAP.  All amounts of material Taxes and other amounts required to have been withheld by or with respect to each RMR Entity have been or will be timely withheld and timely remitted to the applicable Governmental Entity, and each RMR Entity has materially complied with all information reporting requirements and has properly completed and timely filed all material Tax returns and other forms with respect thereto that are required to be filed.

(n)                                 Material Contracts.  Other than the Transaction Documents, the Contracts listed in Section 3.1(n) of TRUST’s Disclosure Schedule and any agreements terminable by LLC on thirty (30) days or less notice, LLC has no material Contracts.

(o)                                 Title to Assets.  Each of LLC, RMR Advisors, RMR Intl and RMR Australia has good and marketable title to, or a valid leasehold interest in, or other valid right to use, every material property and asset, including intellectual property, used by it in the conduct of its respective business.

(p)                                 Certain Business Practices.  TRUST and each RMR Entity and, to TRUST’s knowledge, each of their respective trustees, directors, officers, employees or agents and each other Person acting on behalf of any of them, has complied and is in compliance, in all material respects, with all applicable requirements under (i) the Foreign Corrupt Practices Act of 1977, (ii) all other international anti-bribery conventions and (iii) all other applicable Laws relating to corruption, bribery, ethical business conduct, money laundering, political contributions, gifts and gratuities, or lawful expenses, Laws requiring the disclosure of agency relationships or commissions and anti-corruption rules of any international financial institutions with which any of them do business.

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(q)                                 Sophistication of Parties.  Each RMR Party has such knowledge, sophistication and experience in financial and business matters that it is capable of evaluating the merits and risks of its entering into this Agreement and the Transaction Documents to which it is a party and consummating the Transactions and the transactions contemplated by the Other REIT Transaction Agreements.

(r)                                    Information.

(i)                                     Each RMR Party has adequate information concerning the business and financial condition of REIT to make an informed decision regarding the Transactions and has independently and without reliance upon any REIT Party (as defined below) made its own analysis and decision to accept the Subject REIT Shares in consideration for the Subject Class A Shares and the other Transactions.  Each of INC and TRUST has relied solely on its own independent investigation in valuing the Subject REIT Shares and determining to proceed with this Agreement, the Transaction Documents to which it is a party and the Transactions.  It has not relied on any assertions made by REIT or any Person representing or acting on behalf of REIT (collectively, the “REIT Parties”) regarding REIT, the Subject REIT Shares or the valuation thereof.  It has previously undertaken such independent investigation of REIT as in its judgment is appropriate to make an informed decision with respect to the Transactions and has made its own decision to consummate (or cause INC and LLC to consummate) the Transactions based on its own independent review and consultations with such investment, legal, tax, accounting and other advisers as it has deemed necessary; and

(ii)                                  The RMR Parties understand and acknowledge that, except as expressly otherwise set forth in Section 3.2, REIT makes no representation or warranty to it, express or implied, with respect to REIT, the Subject REIT Shares, the Transactions or the accuracy, completeness or adequacy of any publicly available information regarding REIT or its subsidiaries, nor shall any of the REIT Parties be liable for any loss or damages of any kind resulting from the use of any information (other than any liability of REIT solely as a result of a material untruth or material inaccuracy of a representation or warranty of REIT set forth in Section 3.2) supplied to the RMR Parties.

(s)                                   Investment Purpose.  TRUST is acquiring the Subject REIT Shares for its own account and the account of its beneficiaries for investment purposes only and not with a view to the distribution or resale thereof, in whole or in part, and it will not transfer, or offer to transfer, all or any portion of the Subject REIT Shares in any manner that would violate or cause any of the RMR Parties to violate the Securities Act or any securities Laws of the several states.

Section 3.2                                    Representations and Warranties of REIT.  REIT hereby represents and warrants to the RMR Parties, subject to the exceptions set forth in the disclosure schedule prepared by REIT and delivered to the RMR Parties concurrently with the execution and delivery of this Agreement, that as of the date hereof as follows:

(a)                                 Organization.  REIT is duly organized, validly existing and in good standing under the Laws of the State of Maryland.

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(b)                                 Due Authorization.  The execution, delivery and performance by REIT of this Agreement and of each Transaction Document to which it is a party have been duly authorized by all necessary action, including the authorization by the Compensation Committee of REIT of the execution, delivery and performance by REIT of the Amended and Restated Management Agreements.

(c)                                  Authority; Validity of Agreement.  REIT has the requisite power, authority and legal right to execute and deliver this Agreement and each Transaction Document to which it is a party, and to consummate the transactions contemplated hereby and thereby, as the case may be.  This Agreement and each Transaction Document to which it is a party have been duly executed and delivered by REIT and constitute the legal, valid and binding obligations of REIT, enforceable against REIT in accordance with its terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar Laws relating to or affecting creditors’ rights generally.

(d)                                 No Conflicts.  The execution, delivery and performance by REIT of this Agreement and the Transaction Documents to which it is a party, the consummation by REIT of the transactions contemplated hereby or thereby and the compliance by REIT with the terms and provisions hereof or thereof, will not, directly or indirectly (with or without notice or lapse of time or both), (i) contravene or conflict with, or result in a breach or termination of, or constitute a default under (or with notice or lapse of time or both, result in the breach or termination of or constitute a default under) the organizational documents of REIT, (ii) constitute a violation by REIT of any existing requirement of Law applicable to REIT or any of its properties, rights or assets or (iii) require the consent or approval of any Person, except, in the case of clauses (ii) and (iii), as would not reasonably be expected to result in, individually or in the aggregate, a material adverse effect on the ability of REIT to consummate the transactions contemplated by this Agreement and the Transaction Documents to which it is a party.

(e)                                  Litigation.  There are no Proceedings pending or, to the knowledge of REIT, threatened, against REIT which, individually or in the aggregate, if determined adversely to REIT, would reasonably be expected to materially and adversely affect the ability of REIT to perform its obligations under this Agreement and the Transaction Documents to which it is a party.

(f)                                   Capitalization.  All of the outstanding REIT Common Shares are, and when issued pursuant to the terms of this Agreement upon receipt of payment therefor, the Subject REIT Shares will be, duly authorized, validly issued, fully paid and non-assessable.

(g)                                  Sophistication of Parties.  REIT has such knowledge, sophistication and experience in financial and business matters that REIT is capable of evaluating the merits and risks of its entering into this Agreement and the Transaction Documents to which it is a party and consummating the Transactions.

(h)                                 Information.

(i)                                     REIT has adequate information concerning the business and financial condition of the RMR Entities to make an informed decision regarding the Transactions

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and has independently and without reliance upon any RMR Group Party (as defined below) made its own analysis and decision to accept the Subject Class A Shares in exchange for the Subject REIT Shares and the other Transactions.  REIT has relied solely on its own independent investigation in valuing the Subject Class A Shares and determining to proceed with this Agreement, the Transaction Documents to which it is a party and the Transactions.  REIT has not relied on any assertions made by TRUST or any RMR Entity or any Founder or any Person representing or acting on behalf of TRUST, any RMR Entity or any Founder (collectively, the “RMR Group Parties”) regarding the RMR Entities, the Subject Class A Shares or the valuation thereof.  REIT has previously undertaken such independent investigation of the RMR Entities as in its judgment is appropriate to make an informed decision with respect to the Transactions and has made its own decision to consummate the Transactions based on its own independent review and consultations with such investment, legal, tax, accounting and other advisers as it has deemed necessary; and

(ii)                                  REIT understands and acknowledges that, except as expressly otherwise set forth in Section 3.1, the RMR Group Parties do not make any representation or warranty to it, express or implied, with respect to the RMR Parties, the Subject Class A Shares, the Transactions or the accuracy, completeness or adequacy of any publicly available information regarding the RMR Parties or their subsidiaries, nor shall any of the RMR Group Parties be liable for any loss or damages of any kind resulting from the use of any information (other than any liability of the RMR Group Parties solely as a result of a material untruth or material inaccuracy of a representation or warranty of such parties set forth in Section 3.1) supplied to REIT.

(i)                                     Investment Purpose.  Except as provided in Section 4.3, REIT is acquiring the Subject Class A Shares for REIT’s own account for investment purposes only and not with a view to the distribution or resale thereof, in whole or in part, and agrees that it will not transfer, or offer to transfer, all or any portion of the Subject Class A Shares in any manner that would violate or cause INC to violate the Securities Act or any securities Laws of the several states.

ARTICLE IV

ADDITIONAL AGREEMENTS

Section 4.1                                    Registration Statement on Form S-1.

(a)                                 As promptly as reasonably practicable following the date of this Agreement, INC shall prepare (with the REIT’s reasonable cooperation) and cause to be filed with the SEC, a Registration Statement on Form S-1, including all exhibits and financial statements required under the Securities Act to be filed therewith (the “Form S-1”), in connection with the registration under the Securities Act of the Distribution Shares and the Other REIT Distribution Shares.  INC shall use its reasonable best efforts to (A) have the Form S-1 declared effective under the Securities Act as promptly as practicable after such filing, (B) ensure that the Form S-1 complies in all material respects with the applicable provisions of the Exchange Act and the Securities Act and (C) keep the Form S-1 effective for so long as necessary to complete the Distribution.  REIT shall furnish all information concerning itself and

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its subsidiaries to INC and provide such other assistance as may be reasonably requested by INC in connection with the preparation, filing and distribution of the Form S-1 and related prospectus.  Each of INC and REIT shall provide to its and each other’s counsel such representations as reasonably necessary to render the opinions required to be filed therewith.  The Form S-1 shall include all information reasonably requested by INC and REIT to be included therein.  INC shall promptly notify REIT upon the receipt of any comments from the SEC or any request from the SEC for amendments or supplements to the Form S-1, and shall, as promptly as practicable after receipt thereof, provide REIT with copies of all correspondence between it and its Representatives, on the one hand, and the SEC, on the other hand, and all written comments with respect to the Form S-1 received from the SEC and advise REIT of any oral comments with respect to the Form S-1 received from the SEC.  INC shall use its reasonable best efforts to respond as promptly as practicable to any comments from the SEC with respect to the Form S-1.  Notwithstanding the foregoing, prior to filing the Form S-1 (or any amendment or supplement thereto) or responding to any comments from the SEC with respect thereto, INC shall cooperate with REIT and provide REIT a reasonable opportunity to review and comment on such document or response (including the proposed final version of such document or response).  INC shall advise REIT, promptly after it receives notice thereof, of the time of effectiveness of the Form S-1, the issuance of any stop order relating thereto or the suspension of the qualification of the Distribution Shares for offering or sale in any jurisdiction, and INC and REIT shall use their reasonable best efforts to have any such stop order or suspension lifted, reversed or otherwise terminated.  INC shall also take any other action reasonably required to be taken under the Securities Act, the Exchange Act, any applicable foreign or state securities or “blue sky” Laws and the rules and regulations thereunder in connection with the distribution of the Distribution Shares, and REIT shall furnish all information concerning itself and the holders of the REIT Common Shares as may be reasonably requested in connection with any such actions.

(b)                                 If, at any time prior to effective date of the Distribution, any information relating to INC, REIT or any Other REIT should be discovered by INC or REIT which, in the reasonable judgment of INC or REIT, should be set forth in an amendment of, or a supplement to, the Form S-1, so that any of such documents would not include any misstatement of a material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, the Party that discovers such information shall promptly notify the other Party, and INC and REIT shall cooperate in the prompt filing with the SEC of any necessary amendment of, or supplement to, the Form S-1 and, to the extent required by Law, in disseminating the information contained in such amendment or supplement to the shareholders of REIT.  For purposes of this Section 4.1, any information concerning or related to the RMR Parties or the Founders will be deemed to have been provided by INC, any information concerning or related to REIT or its subsidiaries will be deemed to have been provided by REIT and any information concerning or related to any Other REIT or its subsidiaries will be deemed to have been provided by such Other REIT.

(c)                                  LLC shall pay or promptly reimburse INC and REIT, as applicable, for all customary costs and expenses incident to the preparation and filing of the Form S-1 and the listing of the Class A Common Stock on a national securities exchange, including: (i) all SEC registration and filing fees; (ii) all fees and expenses to list the Class A Common Stock on a national securities exchange; (iii) fees and expenses of compliance with securities or “blue sky” Laws (including reasonable fees and disbursements of counsel in connection with blue sky

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qualifications of the Distribution Shares); (iv) reasonable fees and disbursements of counsel to INC and fees and expenses for independent registered public accountants retained by INC (including the expenses or costs associated with the delivery of any consents and opinions); and (v) the fees and expenses of INC’s transfer agent and registrar.  For the avoidance of doubt, INC and LLC shall not have any obligation to pay or reimburse the fees and expenses of the Distribution Agent, REIT’s transfer agent and registrar, REIT’s counsel or the cost of printing or mailing any prospectus for the Distribution to REIT’s shareholders, all of which shall be paid by REIT.

Section 4.2                                    INC Charter, Board and Board Committees.  After the date of this Agreement and prior to the filing of the Form S-1, INC and REIT will discuss the advisability of including ownership limitations in INC’s charter comparable to those in REIT’s declaration of trust and will amend INC’s charter, if necessary.  Immediately prior to the time that the Form S-1 is declared effective under the Securities Act, (i) the Board of Directors of INC (the “INC Board”) shall be expanded to include not less than three (3) Independent Directors (the identity and qualifications of which shall have been previously approved by the independent trustees of REIT, which approval shall not be unreasonably withheld, conditioned or delayed), and (ii) the INC Board shall establish audit, compensation and nominating and governance committees thereof which comply with the Exchange Act and the listing requirements of any national securities exchange on which the Class A Common Stock has then been approved for listing.  Thereafter changes to the composition of INC Board and the committees thereof shall be made in accordance with INC’s organizational documents, as then in effect.

Section 4.3                                    Distribution.

(a)                                 As promptly as practicable following the time that the Form S-1 is declared effective under the Securities Act, REIT shall use reasonable best efforts to declare a pro rata distribution to holders of REIT Common Shares approximately half of the Subject Class A Shares received pursuant to Section 2.1(a) above (such distribution, the “Distribution,” and the shares to be distributed, the “Distribution Shares”).  REIT shall cooperate in good faith with INC and the Other REITs in choosing a distribution agent (the “Distribution Agent”) and establishing a record date and distribution date for the Distribution such that the record dates and distribution dates for the distributions of shares of Class A Common Stock to be made by REIT and by the Other REITs pursuant to the Other REIT Transaction Agreements are as close in time as practicable to each other and to the effective date of the Form S-1.

(b)                                 REIT shareholders holding a number of REIT Common Shares on the Distribution record date, which would entitle such shareholders to receive less than one whole Distribution Share in the Distribution, will receive cash in lieu of fractional shares. Fractional Distribution Shares will not be distributed in the Distribution nor credited to book-entry accounts.  The Distribution Agent shall, as soon as practicable after the Distribution date (i) determine the number of whole and fractional Distribution Shares allocable to each holder of record or beneficial owner of REIT Common Shares as of close of business on the Distribution record date, (ii) aggregate all such fractional shares into whole shares and sell the whole shares obtained thereby in open market transactions, in each case, at the then prevailing trading prices on behalf of holders who would otherwise be entitled to fractional share interests and (iii) distribute to each such holder, or for the benefit of each such beneficial owner, such holder

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or owner’s ratable share of the net proceeds of such sale, based upon the average gross selling price per Distribution Share after making appropriate deductions for any amount required to be withheld for tax purposes and any brokerage fees incurred in connection with these sales of fractional shares.  None of REIT, INC or the Distribution Agent will guarantee any minimum resale price for the fractional Distribution Shares.  INC will not pay any interest on the proceeds from the sale of fractional shares.  The Distribution Agent acting on behalf of REIT will have the sole discretion to select the broker-dealers through which to sell the aggregated fractional shares and to determine when, how and at what price to sell such shares.

Section 4.4                                    Exchange Listing.  INC shall use its best efforts to have the issued and outstanding Class A Common Stock (including the Distribution Shares) approved for listing on a national securities exchange, as defined under the Exchange Act, on or prior to the earliest distribution date.

Section 4.5                                    Transfer Agent.  INC shall use its best efforts to provide and cause to be maintained a transfer agent and registrar (which may be the same entity) for the Distribution Shares and obtain a CUSIP number for the Class A Common Stock, in each case, no later than the effective date of the Form S-1.

ARTICLE V

INDEMNIFICATION

Section 5.1                                    Indemnification by LLC.  LLC shall indemnify and hold harmless REIT, its subsidiaries, each of their respective directors, trustees, officers and agents, and each of the heirs, executors, successors and assigns of any of the foregoing (collectively, the “REIT Indemnified Parties”) from and against any and all damages, claims, losses, expenses, costs, obligations and liabilities, including liabilities for all reasonable attorneys’, accountants’, and experts’ fees and expenses (collectively, “Covered Liabilities”), suffered, directly or indirectly, by any REIT Indemnified Party by reason of, or arising out of any untrue statement or alleged untrue statement of a material fact contained in the Form S-1 (or any amendment thereto), including any omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading or arising out of any untrue statement or alleged untrue statement of a material fact in the Form S-1 or the omission or alleged omission therefrom of a material fact necessary in order to make the statement therein in light of the circumstances under which they were made, not misleading, in each case other than any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with written information furnished to INC by REIT or any Other REIT for use in the Form S-1 (or any amendment thereto).

Section 5.2                                    Indemnification by REIT.  REIT shall indemnify and hold harmless LLC, TRUST, INC, each of their respective subsidiaries and each of their respective directors, trustees, officers, employees and agents, and each of the heirs, executors, successors and assigns of any of the foregoing (collectively, the “RMR Indemnified Parties”) from and against any and all Covered Liabilities suffered, directly or indirectly, by any RMR Indemnified Party by reason of, or arising out of any untrue statement or omission or alleged untrue statement or omission made

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in the Form S-1 in reliance upon and in conformity with written information furnished to INC by REIT for use therein.

Section 5.3                                    Certain Limitations, Etc.  The amount of any Covered Liabilities for which indemnification is provided under this Agreement shall be net of (i) any amounts actually recovered or recoverable by the indemnified parties under insurance policies and (ii) other amounts actually recovered by the indemnified party from third parties, in the case of (i) and (ii), with respect to such Covered Liabilities.  Any indemnifying party hereunder shall be subrogated to the rights of the indemnified party upon payment in full of the amount of the relevant indemnifiable loss.  An insurer who would otherwise be obligated to pay any claim shall not be relieved of the responsibility with respect thereto or, solely by virtue of the indemnification provision hereof, have any subrogation rights with respect thereto. If any indemnified party recovers an amount from a third party in respect of an indemnifiable loss for which indemnification is provided in this Agreement after the full amount of such indemnifiable loss has been paid by an indemnifying party or after an indemnifying party has made a partial payment of such indemnifiable loss and the amount received from the third party exceeds the remaining unpaid balance of such indemnifiable loss, then the indemnified party shall promptly remit to the indemnifying party the excess of (i) the sum of the amount theretofore paid by such indemnifying party in respect of such indemnifiable loss plus the amount received from the third party in respect thereof, less (ii) the full amount of such Covered Liabilities.

ARTICLE VI

CONDITIONS TO CLOSING

Section 6.1                                    Conditions to Each Party’s Obligation to Consummate the Transactions.  The respective obligation of each Party to consummate the Party Transactions is subject to the satisfaction or waiver of the following conditions:

(a)                                 No Injunction.  No judgment, injunction, decree or other legal restraint (each, an “Order”) prohibiting the consummation of the Transactions shall have been issued by any Governmental Entity and be continuing in effect, there shall be no pending Proceeding commenced by a Governmental Entity seeking an Order that would prohibit the Transactions, and the consummation of the Transactions shall not have been prohibited or rendered illegal under any applicable Law.

(b)                                 Other REIT Transactions.  Each condition to the obligation of the parties under the Other REIT Transaction Agreements to complete the transactions thereunder shall be satisfied or waived by such parties and each party under such Other REIT Transaction Agreements shall have confirmed that it stands ready, willing and able to complete the transactions thereunder simultaneously with the Closing.

(c)                                  Management Agreements.  REIT and LLC shall have entered into an Amended and Restated Business Management Agreement and Amended and Restated Property Management Agreement with LLC, each in a form acceptable to them (together, the “Amended and Restated Management Agreements”).

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(d)                                 Tax Receivable Agreement.  LLC, TRUST and INC shall have entered into a Tax Receivable Agreement, in a form acceptable to them.

(e)                                  Registration Rights and Lock-Up Agreement with Respect to Subject REIT Shares.  REIT, TRUST and the Founders shall have entered into the Registration Rights and Lock-Up Agreement in a form acceptable to them.

(f)                                   Registration Rights Agreement with Respect to Subject Class A Shares.  INC and REIT shall have entered into the INC Registration Rights Agreement in a form acceptable to them.

(g)                                  Registration Rights Agreement with respect to Subject Class A Shares Beneficially Owned by TRUST.  TRUST and INC shall have entered into the INC Registration Rights Agreement in a form acceptable to them.

ARTICLE VII

MISCELLANEOUS

Section 7.1                                    Notices.  All notices and other communications in connection with this Agreement shall be in writing and shall be considered given if given in the manner, and be deemed given at times, as follows: (i) on the date delivered, if personally delivered; (ii) on the day of transmission if sent via facsimile transmission to the facsimile number given below, and telephonic confirmation of receipt is obtained promptly after completion of transmission; or (iii) on the next Business Day after being sent by recognized overnight mail service specifying next Business Day delivery, in each case with delivery charges pre-paid and addressed to the following addresses:

(a)                                 If to any RMR Party, to:

c/o Reit Management & Research LLC
Two Newton Place
255 Washington Street
Suite 300
Newton, MA 02458
Attn:  President
Facsimile:  (617) 928-1305

with copies (which shall not constitute notice) to:

Skadden, Arps, Slate, Meagher & Flom LLP
500 Boylston Street
Boston, MA 02116
Attn:  Margaret R. Cohen
Facsimile:  (617) 305-4859

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Saul Ewing LLP
500 E. Pratt Street, Suite 900
Baltimore, MD 21202-3133
Attn:  Eric G. Orlinsky, Esq.
Facsimile:  (410) 332-8688

(b)                                 If to REIT, to:

Senior Housing Properties Trust
Two Newton Place
255 Washington Street
Suite 300
Newton, MA 02458
Attn:  President
Facsimile:  (617) 796-8349

with copies (which shall not constitute notice) to:

Sullivan & Worcester LLP
One Post Office Square
Boston, MA 02109
Attn:  Richard Teller
Facsimile:  (617) 338-2880

Venable LLP
750 E. Pratt Street, Suite 900
Baltimore, MD 21202
Attn:  James J. Hanks, Jr., Esq.
Facsimile:  (410) 244-7742

Section 7.2                                    Assignment; Successors; Third Party Beneficiaries.  Neither this Agreement nor any of the rights, interests or obligations under this Agreement may be assigned by any Party without the prior written consent of each other Party.  This Agreement shall bind and inure to the benefit of and be enforceable by the Parties and their respective successors and permitted assigns.  This Agreement (including the documents and instruments referred to in this Agreement) is not intended to and does not confer upon any Person other than the Parties any rights or remedies under this Agreement.

Section 7.3                                    Survival.  The representations and warranties made by the Parties herein (a) are made solely as of the date hereof and (b) shall survive the Closing until, and shall terminate on, the date that is eighteen (18) months after the Closing Date; provided, however, that the representations and warranties in Section 3.1(a), Section 3.1(b), Section 3.1(c), Section 3.1(f), Section 3.1(i), Section 3.1(j), Section 3.2(a), Section 3.2(b), Section 3.2(c), and Section 3.2(f) shall survive the Closing until, and shall terminate on, the date that is six (6) years after the Closing Date.  Each covenant and agreement made by the Parties herein that by its terms contemplates performance after Closing shall survive the Closing and remain in full force and effect in accordance with its terms.

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Section 7.4                                    Prior Negotiations; Entire Agreement.  This Agreement and the Transaction Documents (including the documents and instruments referred to in this Agreement and in any Transaction Document) constitute the entire agreement of the Parties and supersede all prior agreements, arrangements or understandings, whether written or oral, between the Parties with respect to the subject matter of this Agreement.

Section 7.5                                    Governing Law; Venue; Arbitration.

(a)                                 Governing Law.  This Agreement and any Dispute, whether in contract, tort or otherwise, shall be governed by and construed in accordance with the laws of the State of Maryland without regard to principles of conflicts of law.

(b)                                 Venue.  Each Party agrees that it shall bring any Proceeding in respect of any claim arising out of or related to this Agreement or the Transactions exclusively in the courts of the State of Maryland and the Federal courts of the United States, in each case, located in the City of Baltimore (the “Chosen Courts”).  Solely in connection with claims arising under this Agreement or the Transactions, each Party irrevocably and unconditionally (i) submits to the exclusive jurisdiction of the Chosen Courts, (ii) agrees not to commence any such Proceeding except in such courts, (iii) waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any such Proceeding in the Chosen Courts, (iv) waives, to the fullest extent permitted by Law, the defense of an inconvenient forum to the maintenance of such Proceeding and (v) agrees that service of process upon such Party in any such Proceeding shall be effective if notice is given in accordance with Section 7.1.  Nothing in this Agreement will affect the right of any Party to serve process in any other manner permitted by Law.  A final judgment in any such Proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by Law.  EACH PARTY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS.  Notwithstanding anything herein to the contrary, if a demand for arbitration of a Dispute is made pursuant to Section 7.5(c), this Section 7.5(b) shall not pre-empt resolution of the Dispute pursuant to Section 7.5(c).

(c)                                  Arbitration.

(i)                                     Any disputes, claims or controversies arising out of or relating to this Agreement, any Transaction Document or the Transactions, including any disputes, claims or controversies brought by or on behalf of a Party or any holder of equity interests (which, for purposes of this Section 7.5(c), shall mean any holder of record or any beneficial owner of equity interests, or any former holder of record or beneficial owner of equity interests) of a Party, either on his, her or its own behalf, on behalf of a Party or on behalf of any series or class of equity interests of a Party or holders of equity interests of a Party against a Party or any of their respective trustees, directors, members, officers, managers, agents or employees, including any disputes, claims or controversies relating to the meaning, interpretation, effect, validity, performance or enforcement of this Agreement, including this arbitration agreement, any Transaction Document or the Transactions or the governing documents of a Party, (all of which are referred to as “Disputes”) or relating in any way to

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such a Dispute or Disputes shall, on the demand of any party to such Dispute or Disputes, 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 7.5(c).  For the avoidance of doubt, and not as a limitation, Disputes are intended to include derivative actions against the trustees, directors, officers or managers of a Party and class actions by a holder of equity interests against those individuals or entities and a Party.  For the avoidance of doubt, a Dispute shall include a Dispute made derivatively on behalf of one party against another party.  For purposes of this Section 7.5(c), the term “equity interest” shall mean, (i) in respect of INC, shares of capital stock of INC, (ii) in respect of LLC, “membership interest” in LLC as defined in the Maryland Limited Liability Companies Act and (iii) in respect of REIT and TRUST, shares of beneficial interest of REIT and TRUST, respectively.

(ii)                                  There shall be three (3) arbitrators.  If there are only two (2) parties to the Dispute, each party shall select one (1) arbitrator within fifteen (15) days after receipt by respondent of a copy of the demand for arbitration.  The arbitrators may be affiliated or interested persons of the parties.  If there are more than two (2) 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 (1) arbitrator within fifteen (15) days after receipt of the demand for arbitration. The arbitrators may be affiliated or interested persons of the claimants or the respondents, as the case may be.  If either a claimant (or all claimants) or a respondent (or all respondents) fail(s) to timely select an arbitrator then the party (or parties) who has selected an arbitrator may request AAA to provide a list of three (3) proposed arbitrators in accordance with the Rules (each of whom shall be neutral, impartial and unaffiliated with any party) and the party (or parties) that failed to timely appoint an arbitrator shall have ten (10) days from the date AAA provides the list to select one (1) of the three (3) arbitrators proposed by AAA.  If the party (or parties) fail(s) to select the second (2nd) arbitrator by that time, the party (or parties) who have appointed the first (1st) arbitrator shall then have ten (10) days to select one (1) of the three (3) arbitrators proposed by AAA to be the second (2nd) arbitrator; and, if he/they should fail to select the second (2nd) arbitrator by such time, AAA shall select, within fifteen (15) days thereafter, one (1) of the three (3) arbitrators it had proposed as the second (2nd) arbitrator.  The two (2) arbitrators so appointed shall jointly appoint the third (3rd) and presiding arbitrator (who shall be neutral, impartial and unaffiliated with any party) within fifteen (15) days of the appointment of the second (2nd) arbitrator.  If the third (3rd) arbitrator has not been appointed within the time limit specified herein, then AAA shall provide a list of proposed arbitrators in accordance with the Rules, and the arbitrator shall be appointed by AAA in accordance with a listing, striking and ranking procedure, with each party having a limited number of strikes, excluding strikes for cause.

(iii)                               The place of arbitration shall be Boston, Massachusetts unless otherwise agreed by the parties.  There shall be only limited documentary discovery of documents directly related to the issues in dispute, as may be ordered by the arbitrators.  For the avoidance of doubt, it is intended that there shall be no depositions and no other discovery other than limited documentary discovery as described in the preceding sentence.

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(iv)                              In rendering an award or decision (the “Award”), the arbitrators shall be required to follow the Laws of the State of Maryland.  Any arbitration proceedings or award rendered hereunder and the validity, effect and interpretation of this arbitration agreement shall be governed by the Federal Arbitration Act, 9 U.S.C. §1 et seq.  The Award shall be in writing and shall state the findings of fact and conclusions of law on which it is based.  Any monetary award shall be made and payable in Dollars free of any tax, deduction or offset.  Subject to Section 7.5(c)(vi), each party against which the Award assesses a monetary obligation shall pay that obligation on or before the thirtieth (30th) day following the date of the Award or such other date as the Award may provide.

(v)                                 Except to the extent expressly provided by this Agreement or as otherwise agreed by the parties thereto, 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 a party’s award to the claimant or the claimant’s attorneys.  Each party (or, if there are more than two (2) 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 (2) 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 (3rd) appointed arbitrator.

(vi)                              Notwithstanding any language to the contrary in this Agreement, the Award, including but not limited to any interim Award, may be appealed pursuant to the AAA’s Optional Appellate Arbitration Rules (“Appellate Rules”).  The Award shall not be considered final until after the time for filing the notice of appeal pursuant to the Appellate Rules has expired.  Appeals must be initiated within thirty (30) days of receipt of the Award by filing a notice of appeal with any AAA office.  Following the appeal process, the decision rendered by the appeal tribunal may be entered in any court having jurisdiction thereof.  For the avoidance of doubt, and despite any contrary provision of the Appellate Rules, Section 7.5(c)(v) hereof shall apply to any appeal pursuant to this Section and the appeal tribunal shall not render an award that would include shifting of any costs or expenses (including attorneys’ fees) of any party.

(vii)                           Following the expiration of the time for filing the notice of appeal, or the conclusion of the appeal process set forth in Section 7.5(c)(vi), the Award shall be final and binding upon the parties thereto and shall be the sole and exclusive remedy between those 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.

(viii)                        This Section 7.5(c) is intended to benefit and be enforceable by the

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Parties, the parties to the Transaction Documents and their respective holders of equity interests, trustees, directors, officers, managers, members, agents or employees and their respective successors and assigns, shall be binding upon all such parties and their respective holders of equity interests, and 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.

Section 7.6                                    Severability.  This Agreement and the Transaction Documents shall be interpreted in such manner as to be effective and valid under applicable Law.  If at any time subsequent to the date hereof, any provision of this Agreement or any Transaction Document is determined by any court or arbitrator of competent jurisdiction to be invalid, illegal or incapable of being enforced by any rule of Law or public policy in any respect, such provision will be enforced to the maximum extent possible given the intent of the Parties or the parties thereto.

Section 7.7                                    Counterparts.  This Agreement may be executed in any number of counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each of the Parties and delivered to the other Party (including via facsimile or other electronic transmission), it being understood that each Party need not sign the same counterpart.

Section 7.8                                    Expenses.  Except as otherwise expressly contemplated hereby or by any Transaction Document, each Party shall bear its own reasonable expenses incurred in connection with the negotiation and execution of this Agreement and the Transaction Documents and the Closing.

Section 7.9                                    Waivers and Amendments.  This Agreement may be amended, modified, superseded, cancelled, renewed or extended, and the terms and conditions of this Agreement may be waived, only by a written instrument signed by the Parties or, in the case of a waiver, by the Party waiving compliance.  No delay on the part of any Party in exercising any right, power or privilege pursuant to this Agreement shall operate as a waiver thereof, nor shall any waiver of the part of any Party of any right, power or privilege pursuant to this Agreement, nor shall any single or partial exercise of any right, power or privilege pursuant to this Agreement, preclude any other or further exercise thereof or the exercise of any other right, power or privilege pursuant to this Agreement.  The rights and remedies provided pursuant to this Agreement are cumulative and are not exclusive of any rights or remedies which any Party otherwise may have at Law or in equity.

Section 7.10                             Certain Remedies.

(a)                                 Specific Performance.  The Parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement or of any other agreement among them with respect to the Transactions were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that, in addition to any other applicable remedies at Law or equity, the Parties shall be entitled to an injunction or injunctions, without proof of damages, to prevent breaches of this Agreement or of any other agreement between them with respect to the Transactions and to enforce specifically the terms and provisions of this Agreement.

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(b)                                 No Consequential Damages.  To the fullest extent permitted by applicable Law, the Parties shall not assert, and hereby waive, any claim or any such damages, whether or not accrued and whether or not known or suspected to exist in its favor, against any other Party and its respective affiliates, members, members’ affiliates, officers, directors, partners, trustees, employees, attorneys and agents on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) (whether or not the claim therefor is based on Contract, tort or duty imposed by any applicable legal requirement) arising out of, in connection with, or as a result of, this Agreement or of any other agreement between them with respect to the Transactions.

Section 7.11                             Further Assurances.  At any time or from time to time after the date hereof, the Parties agree to cooperate with each other, and at the request of any other Party, to execute and deliver any further instruments or documents and to take all such further action as the other Party may reasonably request in order to evidence or effectuate the consummation of the Transactions and to otherwise carry out the intent of the Parties hereunder.

Section 7.12                             Exculpation.  NO TRUSTEE, OFFICER, DIRECTOR, SHAREHOLDER, MEMBER, EMPLOYEE OR AGENT OF ANY PARTY SHALL BE HELD TO ANY PERSONAL LIABILITY, JOINTLY OR SEVERALLY, FOR ANY OBLIGATION OF, OR CLAIM AGAINST, SUCH PARTY.  ALL PERSONS DEALING WITH SUCH PARTY IN ANY WAY, SHALL LOOK ONLY TO THE ASSETS OF SUCH PARTY FOR THE PAYMENT OF ANY SUM OR THE PERFORMANCE OF ANY OBLIGATION.

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IN WITNESS WHEREOF, the Parties have executed this Transaction Agreement as of the date first above written.

[Signature Page to the Transaction Agreement]

Schedule I

Capital Structure and Ownership of Reit Management & Research Inc.
Immediately After Closing and the Other REIT Transactions Closings

Schedule II

Capital Structure and Ownership of Reit Management & Research LLC
Immediately After Closing and the Other REIT Transactions Closings

Exhibit 10.2

EXECUTION VERSION

SECOND AMENDED AND RESTATED BUSINESS MANAGEMENT AGREEMENT

THIS SECOND AMENDED AND RESTATED BUSINESS MANAGEMENT AGREEMENT (this “Agreement”) is entered into effective as of June 5, 2015, by and between Senior Housing Properties Trust, a Maryland real estate investment trust (the “Company”), and Reit Management & Research LLC, a Maryland limited liability company (the “Manager”).

WHEREAS, the Company and the Manager are parties to an Amended and Restated Business Management Agreement, dated as of December 23, 2013, as amended as of May 9, 2014 (as so amended, the “Original Agreement”); and

WHEREAS, the Company and the Manager wish to continue the Original Agreement in force and effect with respect to services performed and fees due with respect to such services, on and prior to the date of this Agreement, but wish to amend and restate the Original Agreement as hereinafter provided, effective with respect to services performed and fees due with respect to such services after the date of this Agreement;

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 management, direction and oversight of the Company’s Board of Trustees (the “Trustees”), the Manager shall conduct and perform all corporate office functions for the Company, including, but not limited to, the following:

(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 strategic objectives;

(c)                                  investigate, evaluate, prosecute and negotiate any claims of the Company in connection with its real estate investments or otherwise in connection with the conduct of its business;

(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 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, and the rules and regulations thereunder (the “Exchange Act”), the Internal Revenue Code of 1986, as amended and any regulations and rulings thereunder (the “Code”), the securities and tax statutes of any jurisdiction in which the Company is obligated to file such reports or any rules or 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 functions;

(i)                                     to the extent not covered above, advise and assist the Company in the review and negotiation of the Company’s contracts and agreements, coordinate and supervise all third party legal services and 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 communications facilities for the Company and its officers and Trustees and provide meeting space as required; and

(l)                                     provide office space, equipment and experienced and qualified 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”).

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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 (i) 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), (ii) any services that would subject the Manager to registration with the Commodity Futures Trading Commission as a “commodity trading advisor” (as such term is defined in Section 1a(12) of the Commodity Exchange Act and in CFTC Regulation 1.3(bb)(1)), or affirmatively require it to make any exemptive certifications or similar filings with respect to “commodity trading advisor” registration status, or (iii) any services or the taking of any action that would render the Manager a “municipal advisor” as defined in Section 15B(e)(4) of the Exchange Act.

3.                                      Bank Accounts.  The Manager shall establish and maintain one or more bank accounts in its own name or in the name of the Company, and shall collect and deposit into such account or accounts and may 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 unless separate records of the Company’s funds are maintained.  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.

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 reasonably informed with regard to the Trustees’ then current intentions as to the future of the Company.  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, accountants and third party consultants to provide such legal and accounting advice, services and opinions 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 activity which, in its good faith judgment, 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 Code or which would make the Company

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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 approved 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.                                      Manager Conduct.

(a)                                 The Manager shall adhere to, and shall require its officers and employees in the course of providing services to the Company to adhere to, the Company’s Code of Business Conduct and Ethics as in effect from time to time.

(b)                                 Neither the Manager nor any affiliate of the Manager shall sell any property or assets to the Company or purchase any assets from the Company, directly or indirectly, except as approved by a majority vote of the Independent Trustees.  No compensation, commission or remuneration shall be paid to the Manager or any affiliate of the Manager on account of services provided to the Company except as provided by this Agreement, the Property Management Agreement (hereafter defined) or otherwise approved by a majority vote of the Independent Trustees.

(c)                                  The Manager may engage in other activities or businesses and act as the manager to any other person or entity (including other real estate investment trusts) even though such person or entity has investment policies and objectives similar to those of the Company.  The Company recognizes that it is not entitled to preferential treatment in receiving information, recommendations and other services from the Manager.  The Manager shall act in good faith to endeavor to identify to the Independent Trustees any conflicts that may arise among the Company, the Manager and/or any other person or entity on whose behalf the Manager may be engaged.  When allocating investment opportunities among the persons or entities for which the Manager acts as manager, the Manager will consider the factors set forth in its allocation policy as in effect from time to time.

(d)                                 The Manager shall make available sufficient experienced and qualified personnel to perform the services and functions specified, including, without limitation, at the Company’s request, serving as the officers of the Company.  The Manager’s personnel shall receive no compensation from the Company for their services to the Company in any such capacities, except that the Company may (directly or indirectly) make awards to employees of the Manager and others under the Company’s Equity Compensation Plan or any other equity plan adopted by the Company from time to time, subject to applicable reporting and withholding. The Manager shall not be obligated to

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dedicate any of its personnel exclusively to the Company nor shall the Manager or any of its personnel be obligated to dedicate any specific portion of its or their time to the Company or its business, except as necessary to perform the services provided for herein.

(e)                                  The Manager’s liability under this Agreement shall be as set forth in Section 17.

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 in each other 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.                               Management Fee.  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”).  The Management Fee for each year shall equal the lesser of:

(a)                                 the sum of (i) one half of one percent (0.5%) of the Average Transferred Assets (as defined below), plus (ii) seven tenths of one percent (0.7%) of the Average Invested Capital (as defined below) up to $250,000,000, plus (iii) one half of one percent (0.5%) of the Average Invested Capital exceeding $250,000,000; and

(b)                                 the sum of (i) seven tenths of one percent (0.7%) of the Average Market Capitalization (as defined below) up to $250,000,000, plus (ii) one half of one percent (0.5%) of the Average Market Capitalization exceeding $250,000,000.

For purposes of this Agreement:

“Average Invested Capital” of the Company shall mean the average of the aggregate historical cost of the consolidated assets of the Company and its subsidiaries, excluding the Transferred Assets, invested, directly or indirectly, in real estate or ownership 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 other similar noncash reserves, computed by taking the average of such values at the beginning and end of the period for which Average Invested Capital is calculated.

Notwithstanding anything in this Section 10 to the contrary, with respect to any consolidated asset acquired by the Company or any of its subsidiaries from a real estate investment trust to which the Manager provided business management or property management services (“RMR Managed Company”) , the “Average Invested Capital” thereof on the date of acquisition shall equal the gross book value thereof (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 and other similar noncash items, on the books of

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the RMR Managed Company transferring such asset immediately prior to acquisition thereof by the Company and all subsequent adjustments shall be based on such initial book value.

“Average Transferred Assets” shall mean the daily weighted average of the aggregate book value of the Transferred Assets (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 other similar noncash items, computed by taking the average of such values at the beginning and end of the period for which Average Transferred Assets is calculated.

“Average Market Capitalization” of the Company shall mean the average of the closing prices per Common Share on the Stock Exchange for each trading day during the period for which Average Market Capitalization is calculated multiplied by the average number of shares of the Company’s Common Shares of Beneficial Interest (“Common Shares”) outstanding during such period, plus the daily weighted average of aggregate liquidation preference of each class of the Company’s preferred shares outstanding during such period, plus the daily weighted average of the aggregate principal amount of the Company’s consolidated indebtedness during such period.

“RMR Managed Company” shall mean a real estate investment trust to which the Manager provided business management or property management services.

“Stock Exchange” shall mean the national securities exchange, as defined under the Exchange Act, on which the Common Shares are principally traded.

“Transferred Assets” shall mean the assets owned by the Company and its subsidiaries as of October 12, 1999.

The Management Fee shall be computed by the Manager and payable monthly by the Company in cash within thirty (30) days following the end of each month.  Computation of the Management Fee shall be based upon the Company’s monthly financial statements and the Average Market Capitalization for the month in respect of which the Management Fee is paid.  A copy of such computation shall be delivered by the Manager to the Company within twenty-one (21) days following the end of each month.

11.                               Incentive Fee.

In addition to the Management Fee, the Manager shall be paid an annual incentive fee (the “Incentive Fee”), not in excess of the Cap (as defined below), equal to twelve percent (12%) of the product of (a) the Equity Market Capitalization (as defined below) and (b) the amount (expressed as a percentage) by which the Total Return Per Share (as defined below) during the relevant Measurement Period (as defined below) exceeds the Benchmark Return Per Share (as defined below) or the Adjusted Benchmark Return Per Share (as defined below), if applicable, for the relevant Measurement Period, as reduced by the Low Return Factor, if applicable, in the case of the Adjusted Benchmark Return Per Share.

For purposes of this Agreement:

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“Benchmark Return Per Share” shall mean the cumulative percentage total shareholder return of the SNL Index for the relevant Measurement Period, but not less than zero, provided if the Total Return Per Share is in excess of twelve percent (12%) per year in any Measurement Period, the Benchmark Return Per Share for such Measurement Period shall be the lesser of the total shareholder return of the SNL Index for such Measurement Period and twelve percent (12%) per year (the “Adjusted Benchmark Return Per Share”), all determined on a cumulative basis after the initial Measurement Period, i.e. twelve percent (12%) per year multiplied by the number of years in such Measurement Period and the cumulative SNL Index.

“Cap” shall mean an amount equal to the value of the number of Common Shares which would, after issuance, represent one and one-half percent (1.5%) of the Common Shares then outstanding multiplied by the Final Share Price for the relevant Measurement Period.

“Equity Market Capitalization” shall mean the total number of Common Shares outstanding on the last trading day of the year immediately prior to the first year of any Measurement Period multiplied by the Initial Share Price for such Measurement Period.

“Final Share Price” shall mean, with respect to any Measurement Period, the average closing price of the Common Shares on the Stock Exchange on the ten (10) consecutive trading days having the highest average closing prices during the final thirty (30) trading days in the last year of the Measurement Period.

“Initial Share Price” shall mean the closing price of the Common Shares on the Stock Exchange on the last trading day of the year immediately prior to the first year of any Measurement Period, provided, however, that, with respect to calculation of the Incentive Fee in the years ending December 31, 2014 and December 31, 2015, the Initial Share Price shall be the closing price of the Common Shares on the Stock Exchange on the last trading day of the year ending December 31, 2013.

“Low Return Factor” shall mean, where the Incentive Fee is determined based upon the amount (expressed as a percentage) by which the Total Return Per Share is in excess of the Adjusted Benchmark Return Per Share, a reduction in the Incentive Fee if the Total Return Per Share is between 200 basis points and 500 basis points below the SNL Index in any year; if the Total Return Per Share is 500 basis points below the SNL Index in any year, it shall be reduced to zero and if it is below the SNL Index by more than 200 basis points, but no more than 500 basis points, it shall be reduced by a percentage determined by linear interpolation between 200 and 500, determined on a cumulative basis after the first Measurement Period, i.e. between 200 basis points and 500 basis points per year multiplied by the number of years in such Measurement Period and below the cumulative SNL Index.

“Measurement Period” shall mean, for the year beginning January 1, 2015, the consecutive two (2) year period including the then current year and the immediately prior year; and for the year beginning January 1, 2016, and thereafter, a consecutive three (3) year period including the then current year and the immediately prior two years.

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“SNL Index” shall mean the SNL US REIT Healthcare Index as published from time to time (or a successor index including a comparable universe of United States publicly treated real estate investment trusts).

“Total Return Per Share” of the holders of Common Shares shall mean a percentage determined by subtracting the Initial Share Price for the relevant Measurement Period from the sum of the Final Share Price for such Measurement Period, plus the aggregate amount of dividends declared in respect of a Common Share during such Measurement Period, and dividing the result by such Initial Share Price.  Computation of the Total Return Per Share shall be made annually by the Company as of the last day of the year.

The Incentive Fee shall be computed by the Manager and payable by the Company in cash within thirty (30) days following the end of each year.  Computation of the Incentive Fee shall be based upon the Total Return Per Share, the Benchmark Return Per Share and the Equity Market Capitalization for the relevant Measurement Period, provided if additional Common Shares are issued during any Measurement Period, the computation of the Incentive Fee (including the determinations of Total Return Per Share, Equity Market Capitalization and Initial Share Price) shall give effect to the price at which such additional Common Shares were issued, the number of such additional Common Shares issued, the dividends paid in respect of such additional Common Shares and the length of time such additional Common Shares were outstanding.  A copy of such computation shall be delivered by the Manager to the Company within twenty-one (21) days following the end of each year.

If the Company’s financial statements are restated due to material non-compliance with any financial reporting requirements under the securities laws as a result of the Manager’s bad faith, fraud, willful misconduct or gross negligence, for one or more periods in respect of which the Manager received an Incentive Fee, the Incentive Fee payable with respect to periods for which there has been a restatement shall be recalculated by, and approved by a majority vote of, the Independent Trustees in light of such restatement and the Manager, at its election, shall either deliver to the Company Common Shares with a value, or pay to the Company an amount in cash, equal to the value in excess of that which the Manager would have received based upon the Incentive Fee as recalculated.  Any Common Share delivered by the Manager pursuant to the foregoing sentence shall be valued at the volume weighted average trading price of the Common Shares on the Stock Exchange for the thirty (30) consecutive trading days after the date of the publication of the applicable restatement of the Company’s financial statements.

12.                               Share Splits, etc.  For purposes of determining the Management Fee or the Incentive Fee, if there shall occur a share split, dividend, subdivision, combination, consolidation or recapitalization with respect to the Common Shares during a year involved in such determination, the number of Common Shares outstanding during the relevant periods shall be proportionally adjusted to give effect to such share split, dividend, subdivision, combination, consolidation or recapitalization as if it had occurred as of the first day of the period in respect of which the Management Fee or Incentive Fee is being paid.

13.                               Internal Audit Services.  The Manager shall provide to the Company, or arrange to be provided by third parties approved by the Company, an internal audit function meeting applicable requirements of the Stock Exchange and the SEC and otherwise in scope approved by

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the Company’s Audit Committee.  In addition to the Fees, the Company agrees to reimburse the Manager, within thirty (30) days of the receipt of the invoice therefor, the Company’s pro rata share (as reasonably agreed to by a majority of the Independent Trustees from time to time) of the following:

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

(b)                                 the reasonable travel and other out-of-pocket expenses of the Manager relating to the activities of the Manager’s director of internal audit and other of the Manager’s employees 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.

In addition, the Manager shall make available (which may be by posting to the Company’s web site) 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.

14.                               Additional Services.  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 by the Manager and the Company (and approved by majority vote of the Independent Trustees) from time to time.

15.                               Expenses of the Manager.  Except as otherwise expressly provided herein or approved by majority vote of the Independent Trustees, 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;

(c)                                  rent, telephone, utilities, office furniture, equipment and machinery (including computers, to the extent utilized) 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

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

16.                               Expenses of the Company.  Except as expressly otherwise provided in this Agreement, the Company shall pay all its expenses, 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 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 listing of the Company’s securities on the Stock Exchange, including transfer agent’s, registrar’s and indenture trustee’s fees and charges;

(d)                                 expenses of organizing, restructuring, reorganizing or liquidating 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 15 above;

(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 any transfer agent, the cost of preparing,

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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 16;

(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, and payment of any employment or withholding taxes in connection therewith.

17.                               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 members, officers, employees and affiliates will not be liable to the Company, its shareholders, or others, except by reason of acts constituting bad faith, fraud, willful misconduct or gross negligence in the performance of its obligations hereunder.  The Company shall reimburse, indemnify and hold harmless the Manager, its members, 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 instruction by the Trustees, except to the extent such provision or performance was in bad faith, was fraudulent, was willful misconduct or was grossly 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.

18.                               Term, Termination.  This Agreement shall continue in force and effect until December 31, 2035, and, on December 31 of each year after the effective date of this Agreement (each, an “Extension Date”), the term of this Agreement shall be automatically extended an additional year so that the term of this Agreement thereafter ends on the twentieth anniversary of such Extension Date.

Notwithstanding any other provision of this Agreement to the contrary, this Agreement, or any extension thereof, may be terminated prior to the expiration of the term:

(a)                                 by the Company, (i) upon sixty (60) days’ prior written notice to the Manager (such termination, a “Termination for Convenience”), (ii) for Cause, immediately upon written notice to the Manager (such termination, a “Termination for

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Cause”), (iii) for a Performance Reason, upon prior written notice to the Manager given within sixty (60) days after the end of the calendar year giving rise to such Performance Reason (a “Termination for Performance”), or (iv) by written notice at any time during the twelve (12)-month period immediately following the date a Manager Change of Control occurred; or

(b)                                 by the Manager, for Good Reason, upon sixty (60) days’ prior written notice to the Company (or ninety (90) days if the Company takes steps to cure any relevant default within thirty (30) days of written notice to the Company).

Any notice of termination shall include the reason for such termination.

In the event of a Termination for Convenience by the Company or a termination by the Manager pursuant to Section 18(b), the Company shall pay the Manager an amount in cash (the “Full Termination Fee”) equal to the sum of the present values of Monthly Future Fees payable for the Remaining Term, determined by assuming that a Monthly Future Fee is payable for each month in the Remaining Term on the thirtieth (30th) day after the end of that month and calculating for each Monthly Future Fee the present value of that fee by applying a discount rate to that fee equal to one-twelfth (1/12) the sum of the applicable Treasury Rate plus 300 basis points, with monthly periods for discounting.

In the event of a Termination for Performance, the Company shall pay the Manager an amount in cash (the “Performance Termination Fee”) equal to the sum of the present values of Monthly Future Fees payable for the first one hundred twenty (120) months of the Remaining Term, determined by assuming that a Monthly Future Fee is payable for each of the first one hundred twenty (120) months in the Remaining Term on the thirtieth (30th) day after the end of that month and calculating for each Monthly Future Fee the present value of that fee by applying a discount rate to that fee equal to one-twelfth (1/12) the sum of the applicable Treasury Rate plus 300 basis points, with monthly periods for discounting.  It is expressly understood and agreed that a Termination for Performance and payment of the Performance Termination Fee is the Company’s intended remedy for a Performance Reason.

No Full Termination Fee or Performance Termination Fee shall be payable in the event of termination by the Company pursuant to Section 18(a)(ii) (Termination For Cause) or Section 18(a)(iv) (following a Manager Change of Control).

The provisions of this Section 18 shall not apply as a limitation on the amount which may be paid by agreement of the Company and the Manager in connection with a transaction pursuant to which any assets or going business values of the Manager are acquired by the Company in association with termination of this Agreement and the Full Termination Fee or the Performance Termination Fee, as applicable, is in addition to any amounts otherwise payable to the Manager under this Agreement as compensation for services and for expenses of or reimbursement due to the Manager through the date of termination.  Also, payment of the Full Termination Fee or the Performance Termination Fee, as applicable, shall not affect other rights and obligations created under Sections 2, 14, 17, 18 and 19 of this Agreement or otherwise between the Company and the Manager.

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19.                               Action Upon Termination.  From and after the effective date of any termination of this Agreement, the Manager shall be entitled to no compensation (other than the Full Termination Fee or the Performance Termination Fee, if applicable) for services rendered hereunder for the remainder of the then-current term of this Agreement, but shall be paid, on a pro rata basis as set forth in this Section 19, all compensation due for services performed prior to the effective date of such termination, including without limitation, a pro rata portion of the current year’s Incentive Fee (except as otherwise provided below).  Upon such termination, the Manager shall as promptly as practicable:

(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 Management Fee or Incentive Fee 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 Management Fee due upon termination shall be computed and payable within thirty (30) days following the date of the notice of termination.  The Incentive Fee and, to the extent applicable, the Full Termination Fee or Performance Termination Fee, due upon termination shall be computed and payable within thirty (30) days following the date of termination.  A copy of all computations of the Management Fee, Incentive Fee and, to the extent applicable, the Full Termination Fee or Performance Termination Fee, shall be delivered by the Manager to the Company within thirty (30) days following the date of termination.

The Management Fee for any partial month prior to termination will be computed by multiplying the Management Fee which would have been earned for the full month by a fraction, the numerator of which is the number of days in the portion of such month prior to the date of termination, and the denominator of which shall be thirty (30).

For purposes of computation of the Incentive Fee for any partial year prior to termination, the last year of the Measurement Period will be deemed to have ended on the effective date of termination and the computation of the Incentive Fee shall be based upon prior whole years in the Measurement Period and with respect to the year in which termination occurred, the portion of the year in which termination occurred.

In addition to other actions on termination of this Agreement, for up to one hundred twenty (120) days following the effective date of any termination of this Agreement in accordance with the terms hereof, the Manager shall cooperate with the Company and use commercially reasonable efforts to facilitate the orderly transfer of the management and real estate investment services provided under this Agreement to employees of the Company or to its designee, including, but not limited to the transfer of bookkeeping and accounting functions and

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legal and regulatory compliance and reporting. In connection therewith, the Manager shall assign to the Company, and the Company shall assume, any authorized agreements the Manager executed in its name on behalf of the Company and the Manager shall assign to the Company all proprietary information with respect to the Company.  Additionally, the Company or its designee shall have the right to offer employment to any employee of the Manager whom the Manager proposes to terminate in connection with a Covered Termination and the Manager shall cooperate with the Company or its designee in connection therewith.

20.                               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.

21.                               TRUSTEES AND SHAREHOLDERS NOT LIABLE.  THE DECLARATION OF TRUST OF THE COMPANY, 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 SENIOR HOUSING 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 OR ENTITIES 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.

22.                               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 (3rd) 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:

Senior Housing Properties Trust
Two Newton Place
255 Washington Street, Suite 300
Newton, Massachusetts 02458
Attn: President and Board of Trustees
Facsimile: (617) 796-8349

with copies (which shall not constitute notice) to:

Sullivan & Worcester LLP
One Post Office Square
Boston, MA 02109
Attn: Richard Teller

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Facsimile: (617) 338-2880

Venable LLP
750 E. Pratt Street, Suite 900
Baltimore, MD 21202
Attn: James J. Hanks, Jr., Esq.
Facsimile: (410) 244-7742

If to the Manager:

Reit Management & Research LLC
Two Newton Place
255 Washington Street, Suite 300
Newton, Massachusetts 02458
Attn: President
Facsimile: (617) 928-1305

with copies (which shall not constitute notice) to:

Skadden, Arps, Slate, Meagher & Flom LLP
500 Boylston Street
Boston, MA 02116
Attn: Margaret R. Cohen
Facsimile: (617) 305-4859

Saul Ewing LLP
500 E. Pratt Street, Suite 900
Baltimore, MD 21202-3133
Attn: Eric G. Orlinsky, Esq.
Facsimile: (410) 332-8688

23.                               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.

24.                               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 that the Manager may assign this Agreement to any subsidiary of Parent so long as such subsidiary is then and remains Controlled by Parent.

25.                               Successors and Assigns.  This Agreement shall be binding upon, and inure to the benefit of, any successors or permitted assigns of the parties hereto as provided herein.

26.                               No Third Party Beneficiary.  Except as otherwise provided in Section 28(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.

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27.                               Governing Law.  The provisions of this Agreement and any Dispute (as defined below), whether in contract, tort or otherwise, shall be governed by and construed in accordance with the laws of the State of Maryland without regard to principles of conflicts of law.

28.                               Arbitration.

(a)                                 Any disputes, claims or controversies arising out of or relating to this Agreement, the provision of services by the Manager pursuant to this Agreement or the transactions contemplated hereby, including any disputes, claims or controversies brought by or on behalf of the Company, Parent or the Manager or any holder of equity interests (which, for purposes of this Section 28, shall mean any holder of record or any beneficial owner of equity interests or any former holder of record or beneficial owner of equity interests) of the Company, Parent or the Manager, either on his, her or its own behalf, on behalf of the Company, Parent or the Manager or on behalf of any series or class of equity interests of the Company, Parent or Manager or holders of any equity interests of the Company, Parent or the Manager against the Company, Parent or the Manager or any of their respective trustees, directors, members, officers, managers (including the Manager or its successor), agents or employees, including any disputes, claims or controversies relating to the meaning, interpretation, effect, validity, performance or enforcement of this Agreement, including this arbitration agreement or the governing documents of the Company, Parent or the Manager (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 or Disputes, 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 28.  For the avoidance of doubt, and not as a limitation, Disputes are intended to include derivative actions against the trustees, directors, officers or managers of the Company, Parent or the Manager and class actions by a holder of equity interests against those individuals or entities and the Company, Parent or the Manager.  For the avoidance of doubt, a Dispute shall include a Dispute made derivatively on behalf of one party against another party.  For purposes of this Section 28, the term “equity interest” shall mean, (i) in respect of the Company, shares of beneficial interest of the Company, (ii) in respect of the Manager, “membership interest” in the Manager as defined in the Maryland Limited Liability Companies Act and (iii) in respect of Parent, shares of capital stock of Parent.

(b)                                 There shall be three (3) arbitrators. If there are only two (2) parties to the Dispute, each party shall select one (1) arbitrator within fifteen (15) days after receipt by respondent of a copy of the demand for arbitration.  The arbitrators may be affiliated or interested persons of the parties. If there are more than two (2) 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 (1) arbitrator within fifteen (15) days after receipt of the demand for arbitration.  The arbitrators may be affiliated or interested persons of the claimants or the respondents, as the case may be. If either a claimant (or all claimants) or a respondent (or all respondents) fail(s) to timely select an arbitrator then the party (or parties) who has selected an arbitrator may request AAA to provide a list of three (3) proposed arbitrators in

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accordance with the Rules (each of whom shall be neutral, impartial and unaffiliated with any party) and the party (or parties) that failed to timely appoint an arbitrator shall have ten (10) days from the date AAA provides the list to select one (1) of the three (3) arbitrators proposed by AAA. If the party (or parties) fail(s) to select the second (2nd) arbitrator by that time, the party (or parties) who have appointed the first (1st) arbitrator shall then have ten (10) days to select one (1) of the three (3) arbitrators proposed by AAA to be the second (2nd) arbitrator; and, if he/they should fail to select the second (2nd) arbitrator by such time, AAA shall select, within fifteen (15) days thereafter, one (1) of the three (3) arbitrators it had proposed as the second (2nd) arbitrator. The two (2) arbitrators so appointed shall jointly appoint the third (3rd) and presiding arbitrator (who shall be neutral, impartial and unaffiliated with any party) within fifteen (15) days of the appointment of the second (2nd) arbitrator. If the third (3rd) arbitrator has not been appointed within the time limit specified herein, then AAA shall provide a list of proposed arbitrators in accordance with the Rules, and the arbitrator shall be appointed by 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.  For the avoidance of doubt, it is intended that there shall be no depositions and no other discovery other than limited documentary discovery as described in the preceding sentence.

(e)                                  In rendering an award or decision (the “Award”), the arbitrators shall be required to follow the laws of the State of Maryland.  Any arbitration proceedings or award rendered hereunder and the validity, effect and interpretation of this arbitration agreement shall be governed by the Federal Arbitration Act, 9 U.S.C. §1 et seq.  The Award shall be in writing and shall state the findings of fact and conclusions of law on which it is based.  Any monetary award shall be made and payable in U.S. dollars free of any tax, deduction or offset.  Subject to Section 28(g), each party against which the Award assesses a monetary obligation shall pay that obligation on or before the thirtieth (30th) day following the date of the Award or such other date as the Award may provide.

(f)                                   Except to the extent expressly provided by this Agreement or as otherwise agreed by the parties thereto, 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, Parent’s or the Manager’s, as applicable, award to the claimant or the claimant’s attorneys.  Each party (or, if there are more than two (2) 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 (2) 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 (3rd) appointed arbitrator.

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(g)                                  Notwithstanding any language to the contrary in this Agreement, the Award, including but not limited to, any interim Award, may be appealed pursuant to the AAA’s Optional Appellate Arbitration Rules (“Appellate Rules”). The Award shall not be considered final until after the time for filing the notice of appeal pursuant to the Appellate Rules has expired. Appeals must be initiated within thirty (30) days of receipt of the Award by filing a notice of appeal with any AAA office. Following the appeal process, the decision rendered by the appeal tribunal may be entered in any court having jurisdiction thereof.  For the avoidance of doubt, and despite any contrary provision of the Appellate Rules, Section 28(f) hereof shall apply to any appeal pursuant to this Section and the appeal tribunal shall not render an award that would include shifting of any costs or expenses (including attorneys’ fees) of any party.

(h)                                 Following the expiration of the time for filing the notice of appeal, or the conclusion of the appeal process set forth in Section 28(g), the Award shall be final and binding upon the parties thereto and shall be the sole and exclusive remedy between those 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.

(i)                                     This Section 28 is intended to benefit and be enforceable by the Company, the Manager, Parent and their respective holders of equity interests, trustees, directors, officers, managers (including the Manager or its successor), agents or employees, and their respective successors and assigns and shall be binding upon the Company, the Manager, Parent and their respective holders of equity interests, and 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.

29.                               Consent to Jurisdiction and Forum.  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 Baltimore, Maryland.  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 22 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.  EACH PARTY HERETO IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE PROVISION OF SERVICES BY THE MANAGER PURSUANT TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.  Notwithstanding anything herein to the

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contrary, if a demand for arbitration of a Dispute is made pursuant to Section 28, this Section 29 shall not pre-empt resolution of the Dispute pursuant to Section 28.

30.                               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.

31.                               Entire Agreement.  This Agreement constitutes the entire agreement of the parties hereto with respect to the subject matter hereof and supersedes any pre-existing agreements with respect to such subject matter.  This Agreement constitutes an integral part of, and a condition to, the transactions contemplated by the Transaction Agreement entered into as of the date hereof by and among the Company, the Manager, Parent and Reit Management & Research Trust, a Massachusetts business trust.

32.                               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.

33.                               Survival.  The provisions of Section 2 (limited to the obligation of the Company to indemnify the Manager for matters provided thereunder) and Sections 17 through and including 35 of this Agreement shall survive the termination hereof.  Any termination of this Agreement shall be without prejudice to the rights of the parties hereto accrued prior to the termination or upon termination.

34.                               Other Agreements.  The parties hereto are also parties to a Second 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.

35.                               Equal Employment Opportunity Employer.  The Manager is an equal employment opportunity employer and complies with all applicable state and federal laws to provide a work environment free from discrimination and without regard to race, color, sex, sexual orientation, national origin, ancestry, religion, creed, physical or mental disability, age, marital status, veteran’s status or any other basis protected by applicable laws.

[Signature Page To Follow]

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

SOLELY IN RESPECT OF SECTION 28, PARENT:

[Signature Page to the Second Amended and Restated Business Management Agreement]

Exhibit A

Definitions

The following definitions shall be applied to the terms used in the Agreement for all purposes, unless otherwise clearly indicated to the contrary.  All capitalized terms used in this Exhibit A but not defined in this Exhibit A shall have the respective meanings given to those terms in the Agreement.  Unless otherwise noted, all section references in this Exhibit A refer to sections in the Agreement.

(1)                                 “Affiliate” shall mean, with respect to any Person, any other Person that directly or indirectly, through one or more intermediaries, Controls, is Controlled by, or is under common Control with, the first Person.

(2)                                 “Cause” shall mean: (i) the Manager engages in any act that constitutes bad faith, fraud, willful misconduct or gross negligence in the performance of its obligations under this Agreement; (ii) a default by the Manager in the performance or observance of any material term, condition or covenant contained in this Agreement to be performed by the Manager, the consequence of which is a Material Adverse Effect; (iii) the Manager is convicted of a felony; (iv) any executive officer or senior manager of the Manager is convicted of a felony or other crime, whether or not a felony, involving his or her duties as an employee of the Manager and who is not promptly discharged and any actual loss suffered by the Company as a result of such felony or crime is not promptly reimbursed; (v) any involuntary proceeding is commenced against the Manager seeking liquidation, reorganization or other relief with respect to the Manager or its debts under bankruptcy, insolvency or similar law and such proceeding is not dismissed in one hundred twenty (120) days; or (vi) the Manager authorizes the commencement of a voluntary proceeding seeking liquidation, reorganization or other relief with respect to the Manager or its debts under bankruptcy, insolvency or similar law or the appointment of a trustee, receiver, liquidator, custodian or similar official of the Manager or any substantial part of its property.

(3)                                 “Charitable Organization” shall mean an organization that is described in section 501(c)(3) of the Code (or any corresponding provision of a future United States Internal Revenue law) which is exempt from income taxation under section 501(a) thereof.

(4)                                 “Continuing Parent Directors” shall mean, as of any date of determination, any member of the Board of Directors of Reit Management & Research Inc., a Maryland corporation (“Parent”), who was (i) a member of the Board of Directors of Parent as of the date of this Agreement or (ii) nominated for election or elected to the Board of Directors of Parent by, or whose election to the Board of Directors of Parent was made or approved by, (x) the affirmative vote of a majority of Continuing Parent Directors who were members of the Board of Directors of Parent at the time of such nomination or election (and not including a director whose initial assumption of office is in connection with an actual or threatened contested solicitation, including, without limitation, a consent or proxy solicitation, relating to the election of directors of Parent or an unsolicited tender offer or exchange offer for Parent’s voting securities) or (y) so long as Parent is Controlled by one or both Founders, by one or both Founders.

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(5)                                 “Control” of an entity, shall mean the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of such entity, whether through ownership of voting securities, by contract or otherwise and the participles “Controls” and “Controlled” have parallel meanings.

(6)                                 “Covered Termination” shall mean a Termination for Convenience, a Termination for Performance or a termination by the Manager pursuant to Section 18(b).

(7)                                 “Founder” shall mean each of Barry M. Portnoy and Adam D. Portnoy.

(8)                                 “Good Reason” shall mean: (i) a default by the Company in the performance or observance of any material term, condition or covenant contained in this Agreement to be performed by the Company, the consequence of which was materially adverse to the Manager and which did not result from and was not attributable to any action, or failure to act, of the Manager, and such default shall continue for a period of sixty (60) days (or ninety (90) days if the Company takes steps to cure such default within thirty (30) days of written notice to the Company) after written notice thereof by the Manager specifying such default and requesting that the same be remedied in such sixty (60) day period; (ii) the Company materially reduces the duties and responsibilities historically performed by the Manager or materially reduces the scope of the authority of the Manager as historically exercised by the Manager under this Agreement, including, without limitation, the Company appoints or engages a Person or personnel to perform material services historically provided by the Manager or its personnel; or (iii) the consummation of any direct or indirect sale, lease, transfer, conveyance or other disposition, in one or a series of related transactions, of all or substantially all of the assets of the Company (including securities of the Company’s subsidiaries) on a consolidated basis, other than a sale, lease, transfer, conveyance or other disposition to a subsidiary of the Company Controlled by the Company, an RMR Managed Company or another entity to which the Manager has agreed to provide management services.

(9)                                 “Immediate Family Member” as used to indicate a relationship with any individual, shall mean (x) any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law, and any other individual (other than a tenant or employee), which individual is sharing the household of that individual or (y) a trust, the beneficiaries of which are the individual and/or any Immediate Family Member of such individual.

(10)                          “Law” means any law, statute, ordinance, rule, regulation, directive, code or order enacted, issued, promulgated, enforced or entered by any governmental entity.

(11)                          “Manager Change of Control” shall be deemed to have occurred upon any of the following events:

(i)                                     any “person” or “group”(as such terms are used in Sections 13(d) of the Exchange Act), other than a Permitted Manager Transferee or a Person to whom the Manager would be permitted to assign this Agreement pursuant to Section 24 of this Agreement, becomes the “beneficial owner” (as defined in Rule 13d-3 and Rule 13d-5 promulgated under the Exchange Act, except that any person shall be deemed to

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beneficially own securities such person has a right to acquire whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of fifty percent (50%) or more of the then outstanding voting power of the voting securities of the Manager and/or Parent, as applicable;

(ii)                                  the consummation of any direct or indirect sale, lease, transfer, conveyance or other disposition, in one or a series of related transactions, of all or substantially all of the assets of the Manager (including securities of the Manager’s subsidiaries) on a consolidated basis, except the transfer of outstanding voting power of the voting securities of the Manager or Parent to a Permitted Manager Transferee or if the transaction constitutes a permissible assignment under Section 24 of this Agreement; or

(iii)                               at any time, the Continuing Parent Directors cease for any reason to constitute the majority of the Board of Directors of Parent;

provided, however, that if the Manager is no longer a subsidiary of Parent as a result of a transaction not constituting a Manager Change of Control, then a Manager Change of Control shall be deemed to have occurred upon any of the foregoing events that affect the Manager only (and no Manager Change of Control shall be deemed to have occurred if such event affects Parent).

(12)                          “Material Adverse Effect” means any fact, circumstance, event, change, effect or occurrence that, individually or in the aggregate with all other facts, circumstances, events, changes, effects and occurrences, has had a material adverse effect on the business, results of operations or financial condition of the Company and its subsidiaries, taken as a whole, but will not include facts, circumstances, events, changes, effects or occurrences to the extent attributable to: (i) any changes in general United States or global economic conditions; (ii) any changes in conditions generally affecting any of the industry(ies) in which the Company and its subsidiaries operate; (iii) any Performance Reason or any decline in the market price, credit rating or trading volume of the Company’s securities (it being understood that the facts or occurrences giving rise to or contributing to such Performance Reason or decline may be taken into account in determining whether there has been a Material Adverse Effect); (iv) regulatory, legislative or political conditions or securities, credit, financial or other capital markets conditions, in each case in the United States or any foreign jurisdiction; (v) any failure by the Company to meet any internal or published projections, forecasts, estimates or predictions in respect of revenues, earnings or other financial or operating metrics for any period (it being understood that the facts or occurrences giving rise to or contributing to such failure may be taken into account in determining whether there has been a Material Adverse Effect); (vi) any actions that were not recommended by the Manager that are approved by the Independent Trustees, or the consequences thereof; (vii) any change in applicable Law or United States generally accepted accounting principles (or authoritative interpretations thereof); (viii) geopolitical conditions, the outbreak or escalation of hostilities, any acts of war, sabotage or terrorism; or (ix) any hurricane, tornado, flood, earthquake or other natural disaster.

(13)                          “Monthly Future Fee” shall mean (i) the sum of (A) the total Management Fee earned by the Manager under this Agreement for the twelve (12)-month period immediately preceding the effective date of a Covered Termination, plus (B) the aggregate of all amounts

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payable to the Manager for internal audit services pursuant to Section 13 of this Agreement for the twelve (12)-month period immediately preceding the effective date of a Covered Termination, divided by (ii) twelve (12), and rounded upward to the nearest whole number.

If there is a Covered Termination following a merger between the Company and another RMR Managed Company, the Monthly Future Fee shall be calculated by reference to (i) the aggregate of the total Management Fee payable by the Company to the Manager and the total management fee payable by the other RMR Managed Company to the Manager for the applicable period plus (ii) the aggregate of all amounts payable by the Company and the other RMR Managed Company to the Manager for internal audit services, in each case for the period specified above.

If there is a Covered Termination following the spin-off of a subsidiary of the Company (by sale in whole or part to the public or distribution to the Company’s shareholders) to which the Company contributed Properties (the “Contributed Properties”) and which was an RMR Managed Company both at the time of the spin-off and on the date of the Covered Termination, in determining the Termination Fee, the Monthly Future Fee shall be calculated by reference to (i) the Average Invested Capital and Average Transferred Assets after reduction by the historical cost of the Contributed Properties (if then included in Average Invested Capital or Average Transferred Assets), provided such recalculated Monthly Future Fee shall only be used in determining the Termination Fee if it would result in a calculation of the Monthly Future Fee which would have been lower than that which was payable, plus (ii) amounts payable for internal audit services for any period prior to the spin-off shall be reduced to represent the same percentage of amounts charged to all RMR Managed Companies as is charged to the Company after the spin-off.

(14)                          “Performance Reason” shall mean, for any period of three (3) consecutive calendar years beginning with the 2016 calendar year: (i) for each calendar year in such period, the TSR of the Company is less than (A) the percentage total shareholder return of the SNL Index for the year, minus (B) five percent (5%) (for illustrative purposes and the avoidance of doubt, if the percentage total shareholder return of the SNL Index for a year is positive fifteen percent (15%), the TSR for the year must be less than ten percent (10%) in the same year to count as one of the three (3) consecutive years that may be included within a Performance Reason), and (ii) for each calendar year in such period, the TSR of the Company is less than the TSR (determined for each company separately) of sixty-six percent (66%) of the member companies in the SNL Index (for illustrative purposes and the avoidance of doubt, if there are ninety (90) member companies in the SNL Index, the Company’s TSR for a year must be less than the TSR of sixty (60) member companies in the SNL Index).  For purposes of the calculation of TSR and percentage total shareholder return of the SNL Index in clauses (i) and (ii) of the preceding sentence, each such calendar year shall be treated as a Measurement Period.

(15)                          “Permitted Manager Transferee” shall mean: (A) Parent or any of its Controlled subsidiaries; (B) any employee benefit plan of the Manager, Parent or any of their respective Controlled subsidiaries; (C) any Founder or any of a Founder’s lineal descendants; (D) any Immediate Family Member of a Founder or any of an Immediate Family Member’s lineal descendants; (E) any Qualifying Employee, any Immediate Family Member of a Qualifying Employee or any of the Qualifying Employee’s or Immediate Family Member’s lineal

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descendants; (F) a Person described in clause (C), (D) or (E) to whom securities are transferred by will or pursuant to the laws of descent and distribution by a Person described in clause (C), (D) or (E) of this definition; (G) any entity Controlled by any Person or Persons described in clause (B), (C), (D), (E) or (F) of this definition; (H) a Charitable Organization Controlled by any Person or Persons described in clause (C), (D), (E) or (F) of this definition; (I) an entity owned, directly or indirectly, by shareholders (or equivalent) of the Manager or Parent in substantially the same proportions as their ownership of the Manager or Parent, as applicable, immediately prior to the acquisition of beneficial ownership; (J) any Person approved by the Company in writing; or (K) an underwriter temporarily holding securities of the Manager or Parent, as applicable, pursuant to an offering of such securities; provided, however, that “lineal descendants” shall not include Persons adopted after attaining the age of eighteen (18) years and any such adopted Person’s descendants, and further provided that any subsidiary described in clause (A) or (B), any entity described in clause (G) and Charitable Organization described in clause (H), shall only be a Permitted Manager Transferee so long as it remains Controlled as provided in clause (A), (B), (G) or (H).

(16)                          “Person” shall mean an individual or any corporation, partnership, limited liability company, trust, unincorporated organization, association, joint venture or any other organization or entity, whether or not a legal entity.

(17)                          “Qualifying Employee” means any employee of the Manager or Parent or any of their respective subsidiaries who is and has been an employee of the Manager or Parent or any of their respective subsidiaries for at least thirty-six (36) months.

(18)                          “Remaining Term” shall mean the remaining period in the term of this Agreement had the Agreement not been terminated (rounded to nearest month), up to a maximum of twenty (20) years.

(19)                          “Treasury Rate” shall mean, for the calculation of the present value of a Monthly Future Fee, the arithmetic mean of the yields under the heading “Week Ending” published in the most recent Federal Reserve Statistical Release H.15 under the caption “Treasury Constant Maturities” for the maturity corresponding to the date that is the thirtieth (30th) day after the end of the month for which the Monthly Future Fee is assumed to be payable.  If no maturity exactly corresponds to such maturity, yields for the two published maturities most closely corresponding to such period shall be calculated pursuant to the immediately preceding sentence and the Treasury Rate shall be interpolated or extrapolated from such yields on a straight-line basis, rounding in each of such relevant periods to the nearest month.  For purposes of calculating the applicable Treasury Rates, the most recent Federal Reserve Statistical Release H.15 (or any successor publication which is published weekly by the Federal Reserve System and which establishes yields on actively traded United States government securities adjusted to constant maturities) published prior to the required date of payment of the Termination Fee will be used.  If such statistical release is not published at the time of any determination under this Agreement, then any publicly available source of similar market data which shall be selected by the Manager, will be used.

(20)                          “TSR” of a company shall be determined by (i) subtracting, for the relevant Measurement Period, (A) the closing price of the common shares of the company on the

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principal national securities exchange (as defined in the Exchange Act) on which the shares are traded, on the last trading day immediately prior to the beginning of the Measurement Period (the “Initial Price” ) from (B) the sum of the average closing price of the common shares on the ten (10) consecutive trading days having the highest average closing prices during the final thirty (30) trading days of the Measurement Period, plus the aggregate amount of dividends declared in respect of a common share during the Measurement Period, and (ii) dividing the result by the Initial Price.

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Exhibit 10.3

EXECUTION VERSION

SECOND AMENDED AND RESTATED PROPERTY MANAGEMENT AGREEMENT

THIS SECOND AMENDED AND RESTATED PROPERTY MANAGEMENT AGREEMENT (this “Agreement”) is made and entered into as of June 5, 2015, by and among Reit Management & Research LLC, a Maryland limited liability company (“Managing Agent”), and Senior Housing Properties Trust, a Maryland real estate investment trust (the “Company”), on behalf of itself and those of its subsidiaries as may from time to time own properties subject to this Agreement (each, an “Owner” and, collectively, “Owners”).

W I T N E S S E T H:

WHEREAS, Owners and Managing Agent are parties to an Amended and Restated Property Management Agreement, dated as of January 7, 2010, as amended as of January 14, 2011, December 11, 2012 and May 9, 2014 (as so amended, the “Original Agreement”), pursuant to which Owners have engaged Managing Agent to manage certain of the medical office buildings, clinics and biomedical, pharmaceutical and laboratory properties (such types of properties, the “Properties”) from time to time subject to this Agreement (the “Managed Premises”); and

WHEREAS, Owners and Managing Agent wish to continue the Original Agreement in force and effect with respect to services performed and fees due with respect to such services, on and prior to the date of this Agreement, but wish to amend and restate the Original Agreement as hereinafter provided, effective with respect to services performed and fees due with respect to such services after the date of this Agreement;

NOW, THEREFORE, in consideration of the premises and the agreements herein contained, Owners and Managing Agent hereby 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, Owners hereby continue to engage Managing Agent to provide the property management and administrative services with respect to the Managed Premises contemplated by this Agreement.  Managing Agent hereby accepts such continued engagement as managing agent and agrees to devote such time, attention and effort as may be appropriate to operate and manage the Managed Premises in a diligent, orderly and efficient manner.  Managing Agent may subcontract out some or all of its obligations hereunder to third parties; provided, however, that, in any such event, Managing Agent shall be and remain primarily liable to Owners for performance hereunder.

Notwithstanding anything to the contrary set forth in this Agreement, the services to be provided by Managing Agent hereunder shall exclude all services (including, without limitation, any garage management or cafeteria management services) whose performance by a manager to any Owner could give rise to an Owner’s receipt of “impermissible tenant service income” as defined in §856(d)(7) of the Internal Revenue Code of 1986 (as amended or superseded hereafter, the “Code”) or could in any other way jeopardize an Owner’s federal or state tax qualification as a real estate investment trust.

2.                                      General Parameters.  Any or all services may be performed or goods purchased by Managing Agent under arrangements jointly with or for other properties owned or managed by Managing Agent and the costs shall be reasonably apportioned.  Managing Agent may employ personnel who are assigned to work exclusively at the Managed Premises or partly at the Managed Premises and other buildings owned and/or managed by Managing Agent.  Wages, benefits and other related costs of centralized accounting personnel and employees employed by Managing Agent and assigned to work exclusively or partly at the Managed Premises shall be fairly apportioned and reimbursed, pro rata, by Owners in addition to the Fee and Construction Supervision Fee (each as defined in Section 6).

3.                                      Duties.  Without limitation, Managing Agent agrees to perform the following specific duties:

(a)                                 To seek tenants for the Managed Premises in accordance with market rents and to negotiate leases, including renewals thereof, and to lease space to tenants, at rentals, and for periods of occupancy all on market terms.  To employ appropriate means in order that the availability of rental space is made known to potential tenants, including, but not limited to, the employment of brokers.  The brokerage and legal expenses of negotiating such leases and leasing such space shall be paid by the applicable Owner.

(b)                                 To collect all rents and other income from the Managed Premises and to give receipts therefor, both on behalf of Owners, and deposit such funds in such banks and such accounts as are named, from time to time, by Owners, in agency accounts for and under the name of Owners.  Managing Agent shall be empowered to sign disbursement checks on these accounts.  Managing Agent may also use pooled bank accounts for the benefit of Owners and other owners for whom the Managing Agent provides services, provided separate records and accountings of such funds are maintained.

(c)                                  To make contracts for and to supervise any repairs and/or alterations to the Managed Premises, including tenant improvements on reasonable commercial terms.

(d)                                 For Owners’ account and at its expense, to hire, supervise and discharge employees as required for the efficient operation and maintenance of the Managed Premises.

(e)                                  To obtain, at Owners’ expense, appropriate insurance for the Managed Premises protecting Owners and Managing Agent while acting on behalf of Owners against all normally insurable risks relating to the Managed Premises and complying with the requirements of Owners’ mortgagee, if any, and to cause the same to be provided and maintained by all tenants with respect to the Managed Premises to the extent required by the terms of such tenants’ leases.  Notwithstanding the foregoing, Owners may determine to purchase insurance directly for their own account.

(f)                                   To promptly notify the applicable Owner’s insurance carriers, as required by the applicable policies, of any casualty or injury to person or property at the Managed Premises, and complete customary reports in connection therewith.

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(g)                                  To procure all supplies, other materials and services as may be necessary for the proper operation of the Managed Premises, at Owners’ expense.

(h)                                 To pay promptly from rental receipts, other income derived from the Managed Premises, or other monies made available by Owners for such purpose, all costs incurred in the operation of the Managed Premises which are expenses of Owners hereunder, including wages or other payments for services rendered, invoices for supplies or other items furnished in relation to the Managed Premises, and pay over forthwith the balance of such rental receipts, income and monies to Owners or as Owners shall from time to time direct.  In the event that the sum of the expenses to operate and the compensation due Managing Agent exceeds gross receipts in any month and no excess funds from prior months are available for payment of such excess, Owners shall pay promptly the amount of the deficiency thereof to Managing Agent upon receipt of statements therefor.

(i)                                     To keep Owners apprised of any material developments in the operation of the Managed Premises.

(j)                                    To establish reasonable rules and regulations for tenants of the Managed Premises.

(k)                                 On behalf of and in the name of Owner, to institute or defend, as the case may be, any and all legal actions or proceedings relating to the operation of the Managed Premises.

(l)                                     To maintain the books and records of Owners reflecting the management and operation of the Managed Premises, making available for reasonable inspection and examination by Owners or their representatives all books, records and other financial data relating to the Managed Premises at the place where the same are maintained.

(m)                             To prepare and deliver seasonably to tenants of the Managed Premises such statements of expenses or other information as shall be required on the landlord’s part to be delivered to such tenants for computation of rent, additional rent, or any other reason.

(n)                                 To aid, assist and cooperate with Owners in matters relating to taxes and assessments and insurance loss adjustments, notify Owners of any tax increase or special assessments relating to the Managed Premises and to enter into contracts for tax abatements services.

(o)                                 To provide such emergency services as may be required for the efficient management and operation of the Managed Premises on a twenty-four (24)-hour basis.

(p)                                 To enter into contracts on commercially reasonable terms for utilities (including, without limitation, water, fuel, electricity and telephone) and for building services (including, without limitation, cleaning of windows, common areas and tenant space, ash, rubbish and garbage hauling, snow plowing, landscaping, carpet cleaning and

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vermin extermination), and for other services as are appropriate to the Managed Premises.

(q)                                 To seek market terms for all items purchased or services contracted by it under this Agreement.

(r)                                    To take such action generally consistent with the provisions of this Agreement as Owners might with respect to the Managed Premises if personally present.

(s)                                   To, from time to time, or at any time requested by the Board of Trustees of the Company (the “Trustees”), make reports of its performance of the foregoing services to the Company.

4.                                      Authority.  Owners give to Managing Agent the authority and powers to perform the foregoing duties on behalf of Owners and authorize Managing Agent to incur such reasonable expenses, as contemplated in Sections 2, 3 and 5 on behalf of Owners as are necessary in the performance of those duties.

5.                                      Special Authority of Managing Agent.  In addition to, and not in limitation of, the duties and authority of Managing Agent contained herein, Managing Agent shall perform the following duties:

(a)                                 Terminate tenancies and sign and serve in the name of Owners such notices therefor as may be required for the proper management of the Managed Premises.

(b)                                 At Owners’ expense, institute and prosecute actions to evict tenants and recover possession of rental space, and recover rents and other sums due; and when expedient, settle, compromise and release such actions or suits or reinstate such tenancies.

6.                                      Compensation.

(a)                                 In consideration of the services to be rendered by Managing Agent hereunder, Owners agree to pay and Managing Agent agrees to accept as its compensation (i) a management fee (the “Fee”) equal to three percent (3%) of the gross collected rents actually received by Owners from the Managed Premises, such gross rents to include all fixed rents, percentage rents, additional rents, operating expense and tax escalations, and any other charges paid to Owners in connection with occupancy of the Managed Premises, but excluding any amounts collected from tenants to reimburse Owners for the cost of capital improvements or for expenses incurred in curing any tenant default or in enforcing any remedy against any tenant; and (ii) a construction supervision fee (the “Construction Supervision Fee”) in connection with all interior and exterior construction renovation or repair activities at the Managed Premises, including, without limitation, all tenant and capital improvements in, on or about the Managed Premises, undertaken during the term of this Agreement, other than ordinary maintenance and repair, equal to five percent (5%) of the cost of such construction which shall include the costs of all related professional services and the cost of general conditions.

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(b)                                 Unless otherwise agreed, the Fee shall be due and payable monthly, in arrears based on a reasonable annual estimate or budget with an annual reconciliation within thirty (30) days after the end of each calendar year.  The Construction Supervision Fee shall be due and payable periodically, as agreed by Managing Agent and Owners, based on actual costs incurred to date.

(c)                                  Notwithstanding anything herein to the contrary, Owners shall reimburse Managing Agent for reasonable travel expenses incurred when traveling to and from the Managed Premises while performing its duties in accordance with this Agreement; provided, however, that reasonable travel expenses shall not include expenses incurred for travel to and from the Managed Premises by personnel assigned to work exclusively at the Managed Premises.

(d)                                 Managing Agent shall be entitled to no other additional compensation, whether in the form of commission, bonus or the like for its services under this Agreement.  Except as otherwise specifically provided herein with respect to payment by Owners of legal fees, accounting fees, salaries, wages, fees and charges of parties hired by Managing Agent on behalf of Owners to perform operating and maintenance functions in the Managed Premises, and the like, if Managing Agent hires third parties to perform services required to be performed hereunder by Managing Agent without additional charge to Owners, Managing Agent shall (except to the extent the same are reasonably attributable to an emergency at the Managed Premises) be responsible for the charges of such third parties.

7.                                      Term of Agreement. This Agreement shall continue in force and effect until December 31, 2035, and, on December 31 of each year after the effective date of this Agreement (each, an “Extension Date”), the term of this Agreement shall be automatically extended an additional year so that the term of this Agreement thereafter ends on the twentieth anniversary of such Extension Date.

Notwithstanding any other provision of this Agreement to the contrary, this Agreement, or any extension thereof, may be terminated prior to the expiration of the term:

(a)                                 by the Company (on behalf of itself and Owners), (i) upon sixty (60) days’ prior written notice to Managing Agent (such termination, a “Termination for Convenience”), (ii) for Cause, immediately upon written notice to Managing Agent (such termination, a “Termination for Cause”), (iii) for a Performance Reason, upon written notice to Managing Agent given within sixty (60) days after the end of the calendar year giving rise to such Performance Reason (such termination, a “Termination for Performance”), or (iv) by written notice at any time during the twelve (12) month period immediately following the date a Managing Agent Change of Control occurred; or

(b)                                 by Managing Agent, for Good Reason, upon sixty (60) days’ prior written notice to the Company (or ninety (90) days if the Company takes steps to cure any relevant default within thirty (30) days of written notice to the Company).

Any notice of termination shall include the reason for such termination.

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In the event of a Termination for Convenience by the Company or a termination by Managing Agent pursuant to Section 7(b), the Company shall pay Managing Agent an amount in cash (the “Full Termination Fee”) equal to the sum of the present values of Monthly Future Fees payable for the Remaining Term, determined by assuming that a Monthly Future Fee is payable for each month in the Remaining Term on the thirtieth (30th) day after the end of that month and calculating for each Monthly Future Fee the present value of that fee by applying a discount rate to that fee equal to one-twelfth (1/12) the sum of the applicable Treasury Rate plus 300 basis points, with monthly periods for discounting.

In the event of a Termination for Performance, the Company shall pay Managing Agent an amount in cash (the “Performance Termination Fee”) equal to the sum of the present values of Monthly Future Fees payable for the first one hundred twenty (120) months of the Remaining Term, determined by assuming that a Monthly Future Fee is payable for each of the first one hundred twenty (120) months in the Remaining Term on the thirtieth (30th) day after the end of that month and calculating for each Monthly Future Fee the present value of that fee by applying a discount rate to that fee equal to one-twelfth (1/12) the sum of the applicable Treasury Rate plus 300 basis points, with monthly periods for discounting.  It is expressly understood and agreed that a Termination for Performance and payment of the Performance Termination Fee is the Company’s intended remedy for a Performance Reason.

No Full Termination Fee or Performance Termination Fee shall be payable in the event of termination by the Company pursuant to Section 7(a)(ii) (Termination For Cause) or Section 7(a)(iv) (following a Managing Agent Change of Control).

The provisions of this Section 7 shall not apply as a limitation on the amount which may be paid by agreement of the Company and Managing Agent in connection with a transaction pursuant to which any assets or going business values of Managing Agent are acquired by the Company in association with termination of this Agreement and the Full Termination Fee or the Performance Termination Fee, as applicable, is in addition to any amounts otherwise payable to Managing Agent under this Agreement as compensation for services and for expenses of or reimbursement due to Managing Agent through the date of termination.

8.                                      Termination.  Upon termination of this Agreement with respect to any of the Managed Premises for any reason whatsoever, Managing Agent shall as soon as practicable turn over to Owners all books, papers, funds, records, keys and other items relating to the management and operation of such Managed Premises, including, without limitation, all leases in the possession of Managing Agent and shall render to Owners a final accounting with respect thereto through the date of termination.  Owners shall be obligated to pay all compensation for services rendered by Managing Agent hereunder prior and up to the effective time of such termination, including, without limitation, any Fees and Construction Supervision Fees, and shall pay and reimburse to Managing Agent all expenses and costs incurred by Managing Agent prior and up to the effective time of such termination which are otherwise payable or reimbursable to Managing Agent pursuant to the terms of this Agreement (collectively, “Accrued Fees”).  The amount of such fees paid as compensation pursuant to the foregoing sentence shall be subject to adjustment in accordance with the annual reconciliation contemplated by Section 6(b) and consistent with past practices in performing such reconciliation.

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A computation of all Accrued Fees and of the Termination Fee, if any, due upon termination shall be delivered by Managing Agent to the Company within thirty (30) days following the effective date of termination. The Accrued Fees and, to the extent applicable, the Full Termination Fee or Performance Termination Fee, due upon termination shall be payable within ten (10) business days following the delivery to the Company of such computation.

In addition to other actions on termination of this Agreement, for up to one hundred twenty (120) days following the date of notice of a termination of this Agreement, Managing Agent shall cooperate with the Company and the Owners and use commercially reasonable efforts to facilitate the orderly transfer of management of the Managed Premises.  In connection therewith Managing Agent shall assign to the Company, to one or more Owners, or to their designee(s), as directed by the Company, and the Company, such Owner(s) or their designee(s) shall assume, all contracts entered into by Managing Agent pursuant to this Agreement, but excluding all insurance contracts, and multi-property contracts not limited in scope to the Managed Premises and all contracts with affiliates of Managing Agent.  Managing Agent shall also transfer to the Company all proprietary information with respect to the Company and/or the Owners.  Additionally, the Company, one or more Owners, or their designee(s) shall have the right to offer employment to any employee of Managing Agent whom Managing Agent proposes to terminate in connection with a Covered Termination and Managing Agent shall cooperate with the Company, such Owners, or their designee(s) in connection therewith.

9.                                      Assignment of Rights and Obligations.

(a)                                 Without Owners’ prior written consent, Managing Agent shall not sell, transfer, assign or otherwise dispose of or mortgage, hypothecate or otherwise encumber or permit or suffer any encumbrance of all or any part of its rights and obligations hereunder, and any transfer, encumbrance or other disposition of an interest herein made or attempted in violation of this paragraph shall be void and ineffective, and shall not be binding upon Owners.  Notwithstanding the foregoing, Managing Agent may assign its rights and delegate its obligations under this Agreement to any subsidiary of Parent so long as such subsidiary is then and remains Controlled by Parent.

(b)                                 Owners, without Managing Agent’s consent, may not assign their respective rights or delegate their respective obligations hereunder.

(c)                                  Any assignment permitted hereunder shall not release the assignor hereunder.

10.                               Indemnification and Insurance.

(a)                                 Owners agree to defend, indemnify and hold harmless Managing Agent from and against all costs, claims, expenses and liabilities (including reasonable attorneys’ fees) arising out of Managing Agent’s performance of its duties in accordance with this Agreement including, without limitation, injury or damage to persons or property occurring in, on or about the Managed Premises and violations or alleged violations of any law, ordinance, regulation or order of any governmental authority regarding the Managed Premises except any injury, damage or violation resulting from

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Managing Agent’s fraud, gross negligence or willful misconduct in the performance of its duties hereunder.

(b)                                 Owners and Managing Agent shall maintain such commercially reasonable insurance as shall from time to time be mutually agreed by Owners and Managing Agent.

11.                               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 (3rd) 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 or the Owners:

Senior Housing Properties Trust
Two Newton Place

255 Washington Street, Suite 300
Newton, Massachusetts 02458
Attn: President
Facsimile: (617) 796-8349

with copies (which shall not constitute notice) to:

Sullivan & Worcester LLP
One Post Office Square
Boston, MA 02109
Attn: Richard Teller
Facsimile: (617) 338-2880

Venable LLP
750 E. Pratt Street, Suite 900
Baltimore, MD 21202
Attn: James J. Hanks, Jr., Esq.
Facsimile: (410) 244-7742

If to Managing Agent:

Reit Management & Research LLC
Two Newton Place

255 Washington Street, Suite 300
Newton, Massachusetts 02458
Attn: President
Facsimile: (617) 928-1305

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with copies (which shall not constitute notice) to:

Skadden, Arps, Slate, Meagher & Flom LLP
500 Boylston Street
Boston, MA 02116
Attn: Margaret R. Cohen
Facsimile: (617) 305-4859

Saul Ewing LLP
500 E. Pratt Street, Suite 900
Baltimore, MD 21202-3133
Attn: Eric G. Orlinsky, Esq.
Facsimile: (410) 332-8688

12.                               Limitation of Liability.  The Declarations of Trust establishing certain Owners, a copy of each, together with all amendments thereto (the “Declarations”), are duly filed with the Department of Assessments and Taxation of the State of Maryland, provide that the names of such Owners refers to the trustees under such Declarations collectively as trustees, but not individually or personally.  No trustee, officer, shareholder, employee or agent of such Owners shall be held to any personal liability, jointly or severally, for any obligation of, or claim against, such Owners.  All persons and entities dealing with such Owners, in any way, shall look only to the respective assets of such Owners for the payment of any sum or the performance of any obligation of such Owners.  In any event, all liability of such Owners hereunder is limited to the interest of such Owners in the Managed Premises and, in the case of Managing Agent, to its interest hereunder.

13.                               Acquisitions and Dispositions of Properties.  Unless Owners and Managing Agent otherwise agree in writing, all Properties from time to time acquired by Owners or their affiliates shall automatically become subject to this Agreement without amendment hereof.  Similarly, this Agreement shall automatically terminate with respect to all properties disposed of by Owners in the ordinary course of business, effective upon such disposition.

14.                               Modification of Agreement.  This Agreement may not be modified, altered or amended in any manner except by an amendment in writing, duly executed by the parties hereto.

15.                               Independent Contractor.  This Agreement is not one of general agency by Managing Agent for Owners, but Managing Agent is being engaged as an independent contractor.  Nothing in this Agreement is intended to create a joint venture, partnership, tenancy-in-common or other similar relationship between Owners and Managing Agent for any purposes whatsoever, and, without limiting the generality of the foregoing, neither the terms of this Agreement nor the fact that Owners and Managing Agent 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.

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16.                               Governing Law.  The provisions of this Agreement and any Dispute (as defined below), whether in contract, tort or otherwise, shall be governed by and construed in accordance with the laws of the State of Maryland without regard to principles of conflicts of law.

17.                               Successors and Assigns.  This Agreement shall be binding upon, and inure to the benefit of, any successors or permitted assigns of the parties hereto as provided herein.

18.                               No Third Party Beneficiary.  Except as otherwise provided in Section 21(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.

19.                               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.

20.                               Survival.  Except for Sections 1 through 5 and Section 13, all other provisions of this Agreement shall survive the termination hereof.  Any termination of this Agreement shall be without prejudice to the rights of the parties hereto accrued prior to the termination or upon termination.

21.                               Arbitration.

(a)                                 Any disputes, claims or controversies arising out of or relating to this Agreement, the provision of services by Managing Agent pursuant to this Agreement or the transactions contemplated hereby, including any disputes, claims or controversies brought by or on behalf of Company, any Owner, Parent, Managing Agent or any holder of equity interests (which, for purposes of this Section 21, shall mean any holder of record or any beneficial owner of equity interests or any former holder of record or beneficial owner of equity interests) of Company, any Owner, Parent or Managing Agent, either on his, her or its own behalf, on behalf of Company, any Owner, Parent or Managing Agent or on behalf of any series or class of equity interests of Company, any Owner, Parent or Managing Agent or holders of any equity interests of Company, any Owner, Parent or Managing Agent against Company, any Owner, Parent or Managing Agent or any of their respective trustees, directors, members, officers, managers (including Managing Agent or its successor), agents or employees, including any disputes, claims or controversies relating to the meaning, interpretation, effect, validity, performance or enforcement of this Agreement, including this arbitration agreement or the governing documents of Company, any Owner, Parent or Managing Agent (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 or Disputes, 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 21.  For the avoidance of doubt, Disputes are intended to include derivative actions against the trustees, directors, officers or managers

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of Company, any Owner, Parent or Managing Agent and class actions by a holder of equity interests against those individuals or entities and Company, any Owner, Parent or Managing Agent.  For the avoidance of doubt, and not as a limitation, a Dispute shall include a Dispute made derivatively on behalf of one party against another party.  For purposes of this Section 21, the term “equity interest” shall mean, (i) in respect of the Company, shares of beneficial interest of the Company, (ii) in respect of any other Owner, equity interests in that Owner, (iii) in respect of Managing Agent, “membership interest” in Managing Agent as defined in the Maryland Limited Liability Companies Act and (iv) in respect of Parent, shares of capital stock of Parent.

(b)           There shall be three (3) arbitrators. If there are only two (2) parties to the Dispute, each party shall select one (1) arbitrator within fifteen (15) days after receipt by respondent of a copy of the demand for arbitration.  The arbitrators may be affiliated or interested persons of the parties. If there are more than two (2) 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 (1) arbitrator within fifteen (15) days after receipt of the demand for arbitration.  The arbitrators may be affiliated or interested persons of the claimants or the respondents, as the case may be. If either a claimant (or all claimants) or a respondent (or all respondents) fail(s) to timely select an arbitrator then the party (or parties) who has selected an arbitrator may request AAA to provide a list of three (3) proposed arbitrators in accordance with the Rules (each of whom shall be neutral, impartial and unaffiliated with any party) and the party (or parties) that failed to timely appoint an arbitrator shall have ten (10) days from the date AAA provides the list to select one (1) of the three (3) arbitrators proposed by AAA. If the party (or parties) fail(s) to select the second (2nd) arbitrator by that time, the party (or parties) who have appointed the first (1st) arbitrator shall then have ten (10) days to select one (1) of the three (3) arbitrators proposed by AAA to be the second (2nd) arbitrator; and, if he/they should fail to select the second (2nd) arbitrator by such time, AAA shall select, within fifteen (15) days thereafter, one (1) of the three (3) arbitrators it had proposed as the second (2nd) arbitrator. The two (2) arbitrators so appointed shall jointly appoint the third (3rd) and presiding arbitrator (who shall be neutral, impartial and unaffiliated with any party) within fifteen (15) days of the appointment of the second (2nd) arbitrator. If the third (3rd) arbitrator has not been appointed within the time limit specified herein, then AAA shall provide a list of proposed arbitrators in accordance with the Rules, and the arbitrator shall be appointed by 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.  For the avoidance of doubt, it is intended that there shall be no depositions and no other discovery other than limited documentary discovery as described in the preceding sentence.

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(e)           In rendering an award or decision (the “Award”), the arbitrators shall be required to follow the laws of the State of Maryland.  Any arbitration proceedings or award rendered hereunder and the validity, effect and interpretation of this arbitration agreement shall be governed by the Federal Arbitration Act, 9 U.S.C. §1 et seq.  The Award shall be in writing and shall state the findings of fact and conclusions of law on which it is based.  Any monetary award shall be made and payable in U.S. dollars free of any tax, deduction or offset.  Subject to Section 21(g), each party against which the Award assesses a monetary obligation shall pay that obligation on or before the thirtieth (30th) day following the date of the Award or such other date as the Award may provide.

(f)            Except to the extent expressly provided by this Agreement or as otherwise agreed by the parties thereto, 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, Parent’s or Managing Agent’s, as applicable, award to the claimant or the claimant’s attorneys.  Each party (or, if there are more than two (2) 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 (2) 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 (3rd) appointed arbitrator.

(g)           Notwithstanding any language to the contrary in this Agreement, the Award, including but not limited to, any interim Award, may be appealed pursuant to the AAA’s Optional Appellate Arbitration Rules (“Appellate Rules”). The Award shall not be considered final until after the time for filing the notice of appeal pursuant to the Appellate Rules has expired. Appeals must be initiated within thirty (30) days of receipt of the Award by filing a notice of appeal with any AAA office. Following the appeal process, the decision rendered by the appeal tribunal may be entered in any court having jurisdiction thereof.  For the avoidance of doubt, and despite any contrary provision of the Appellate Rules, Section 21(f) hereof shall apply to any appeal pursuant to this Section and the appeal tribunal shall not render an award that would include shifting of any costs or expenses (including attorneys’ fees) of any party.

(h)           Following the expiration of the time for filing the notice of appeal, or the conclusion of the appeal process set forth in Section 21(g), the Award shall be final and binding upon the parties thereto and shall be the sole and exclusive remedy between those 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.

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(i)            This Section 21 is intended to benefit and be enforceable by the Company, Owners, Managing Agent, Parent and their respective holders of equity interests, trustees, directors, officers, managers (including Managing Agent or its successor), agents or employees, and their respective successors and assigns and shall be binding upon the Company, Owners, Managing Agent, Parent and their respective holders of equity interests, and 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.

22.          Consent to Jurisdiction and Forum.  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 Baltimore, Maryland.  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 11 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.  EACH PARTY HERETO IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE PROVISION OF SERVICES BY MANAGING AGENT PURSUANT TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.  Notwithstanding anything herein to the contrary, if a demand for arbitration of a Dispute is made pursuant to Section 21, this Section 22 shall not pre-empt resolution of the Dispute pursuant to Section 21.

23.          Entire Agreement.  This Agreement constitutes the entire agreement of the parties hereto with respect to the subject matter hereof and supersedes any pre-existing agreements with respect to such subject matter.  This Agreement constitutes an integral part of, and a condition to, the transactions contemplated by the Transaction Agreement entered into as of the date hereof by and among the Company, Managing Agent, Parent and Reit Management & Research Trust, a Massachusetts business trust.

24.          Other Agreements.  The Company and Managing Agent are also parties to a Business Management Agreement, dated as of the date hereof, as in effect from time to time (the “Business Management Agreement”).  The parties agree that this Agreement does not include or otherwise address the rights and obligations of the parties under the Business Management Agreement and that the Business Management Agreement provides for its own separate rights and obligations of the parties thereto, including without limitation separate compensation payable by the Company to Managing Agent thereunder for services to be provided by the Managing Agent pursuant to the Business Management Agreement.