EXHIBIT 10.1
FORM OF
ADVISORY AGREEMENT
THIS AGREEMENT is entered into effective as of ____________, 1999, by
and among Senior Housing Properties Trust, a Maryland real estate investment
trust (the "Company"), Reit Management & Research, Inc., a Delaware corporation
(the "Advisor"), and, solely with respect to certain non-competition covenants
in Section 14 of this Agreement, Xxxxx X. Xxxxxxx and Xxxxxx X. Xxxxxx.
WHEREAS, the Advisor is a corporation organized for the purpose of
providing management and administrative services with respect to the ownership
of real property and interests in real property;
WHEREAS, in connection with its investments, the Company desires to
make use of the advice and assistance of the Advisor and information available
to the Advisor, and to have the Advisor undertake the duties and
responsibilities hereinafter set forth, on behalf of and subject to the
supervision of the Company's Board of Trustees (the "Trustees"), all as provided
herein;
WHEREAS, the Advisor is willing to render such services, subject to the
supervision of the Trustees, on the terms and conditions hereinafter set forth;
and
WHEREAS, the Company has qualified and intends to continue to qualify
as a real estate investment trust as defined in the Internal Revenue Code of
1986, as amended (said Code, as in effect from time to time, together with any
regulations and rulings thereunder, being hereinafter referred to as the
"Internal Revenue Code").
NOW, THEREFORE, in consideration of the mutual agreements herein set
forth, the parties hereto agree as follows:
1. General Duties of the Advisor. The Advisor shall use its best
efforts to present to the Company a continuing and suitable investment program
consistent with the investment policies and objectives of the Company. Subject
to the supervision of the Trustees and under their direction, and consistent
with the provisions of the Declaration of Trust, the Advisor shall:
(a) serve as the Company's investment advisor, with its
obligations to include providing research and economic and statistical
data in connection with the Company's investments and recommending
changes in the Company's investment policies, when appropriate;
(b) investigate and evaluate investment, financing and
refinancing opportunities and make recommendations concerning these
opportunities to the Trustees;
(c) manage the Company's short-term investments, including the
acquisition and sale of money market instruments in accordance with the
Company's policies;
(d) administer the day-to-day operations of the Company;
(e) investigate, negotiate and enter into appropriate contracts
on behalf of the Company with individuals, corporations and other
entities (i) for the purchase, lease or servicing of real estate and
related interests and otherwise in furtherance of the investment
activities of the Company and (ii) for the financing and refinancing of
investments and otherwise in furtherance of the financing activities of
the Company;
(f) upon request of the Trustees, act as attorney-in-fact or
agent in acquiring and disposing of investments and funds of the
Company and in handling, prosecuting and settling any claims of the
Company;
(g) obtain for the Company, when appropriate, the services of
property managers or management firms to perform customary property
management services with regard to the real estate properties owned by
or in the possession of the Company, and perform such supervisory or
monitoring services on behalf of the Company with respect to the
activities of those property managers or management firms as would be
performed by a prudent owner, including but not limited to supervising
the activities of property managers or management firms, visiting the
properties, participating in property management budgeting, reviewing
the accounting of property income and expenses, reporting on the
financial status of the properties and reviewing and approving
marketing plans, but excluding the actual on-site property management
functions performed by said property managers or management firms;
(h) obtain for the Company other services as may be required for
other activities relating to the investment portfolio of the Company;
(i) administer the day-to-day bookkeeping and accounting
functions as are required for the proper management of the assets of
the Company, contract for audits and prepare or cause to be prepared
reports as may be required by any governmental authority in connection
with the ordinary conduct of the Company's business, including without
limitation, periodic reports, returns or statements required under the
Securities Exchange Act of 1934, as amended, the Internal Revenue Code,
the securities and tax statutes of any jurisdiction in which the
Company is obligated to file such reports, or the rules and regulations
promulgated under any of the foregoing;
(j) provide office space, office equipment and the use of
accounting or computing equipment when required, and provide personnel
necessary for the performance of the foregoing services; and
(k) from time to time, or at any time requested by the Trustees,
make reports to the Trustees of its performance of the foregoing
services to the Company.
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In performing its services under this Agreement, the Advisor may
utilize facilities, personnel and support services of various of its Affiliates
(as defined below). The Advisor shall be responsible for paying such Affiliates
for their personnel and support services and facilities out of its own funds.
Notwithstanding the above, the Company may request, and will pay for the direct
costs of, services provided by Affiliates of the Advisor provided that such
request is approved by a majority vote of the Trustees who are not Affiliates of
the Advisor (the "Independent Trustees").
As used in this Agreement, the term "Affiliate" means, as to the
Advisor, (i) any other Person (as defined below) directly or indirectly
controlling, controlled by or under common control with the Advisor, (ii) any
other Person that owns beneficially, directly or indirectly, five percent (5%)
or more of the outstanding capital stock, shares or equity interests of the
Advisor, or (iii) any officer, director, trustee, employee or general partner of
the Advisor or of any Person controlling, controlled by or under common control
with the Advisor. The term "Person" means and includes individuals,
corporations, limited partnerships, general partnerships, limited liability
companies, joint stock companies or associations, joint ventures, associations,
companies, trusts, banks, trust companies, land trusts, business trusts and
other entities.
2. Bank Accounts. The Advisor 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 the account or accounts and disburse therefrom any monies on
behalf of the Company; provided that no funds in any account shall be commingled
with any funds of the Advisor or any other Person. The Advisor shall from time
to time render an appropriate accounting of collections and payments to the
Trustees and to the auditors of the Company.
3. Records. The Advisor shall maintain appropriate books of account and
records relating to services performed pursuant 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.
4. Information Furnished Advisor. The Trustees shall at all times keep
the Advisor fully informed with regard to the investment policies of the
Company, the capitalization policy of the Company, and generally the Trustees'
then-current intentions as to the future of the Company. In particular, the
Company shall notify the Advisor promptly of its intention to sell or otherwise
dispose of any of the Company's investments or to make any new investment. The
Company shall furnish the Advisor with a certified copy of all financial
statements, a signed copy of each report prepared by independent certified
public accountants and other information with regard to its affairs as the
Advisor may from time to time reasonably request. The Company shall retain legal
counsel and accountants to provide legal and accounting advice and services as
the Advisor or the Trustees shall deem necessary or appropriate to adequately
perform the functions of the Company, and shall have legal or accounting
opinions and advice as the Advisor shall reasonably request.
5. REIT Qualification. Anything else in this Agreement to the contrary
notwithstanding, the Advisor shall refrain from any action (including, without
limitation, the furnishing or rendering of services to tenants of property or
managing real property) which, in its judgment made in good faith, or in the
judgment of the Trustees as transmitted to the Advisor in writing, would (a)
adversely
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affect the status of the Company as a real estate investment trust as defined
and limited in the Internal Revenue Code or which would make the Company subject
to the Investment Company Act of 1940, as amended, or (b) violate any law, rule,
regulation or statement of policy or any governmental body or agency having
jurisdiction over the Company or over its securities, or (c) otherwise not be
permitted by the Declaration of Trust or Bylaws of the Company, as in effect
from time to time, except if the action shall be ordered by the Trustees, in
which event the Advisor shall promptly notify the Trustees of the Advisor's
judgment that the action would adversely affect the Company's status or violate
any law, rule or regulation or the Declaration of Trust or Bylaws of the Company
and shall refrain from taking the action pending further clarification or
instructions from the Trustees. In addition, the Advisor shall take affirmative
steps which, in its judgment made in good faith, or in the judgment of the
Trustees as transmitted to the Advisor in writing, would prevent or cure any
action described in (a), (b) or (c) above.
6. Self-Dealing. Neither the Advisor nor any Affiliate of the Advisor
shall, directly or indirectly, sell any property or assets to the Company or
purchase any property or assets from the Company, lease any property from the
Company or borrow any money from the Company, except as approved by a majority
of the Independent Trustees. In addition, except as otherwise provided in
Sections 1, 9 or 10 hereof, or except as approved by a majority of the
Independent Trustees, neither the Advisor nor any Affiliate of the Advisor shall
receive any commission or other remuneration, directly or indirectly, in
connection with the activities of the Company or any joint venture or
partnership in which the Company is a party. The foregoing prohibitions shall
not apply to the leases affecting three nursing homes between the Company and an
Affiliate of the Advisor, which leases were entered into by the Company's
predecessor in interest prior to the date of this Agreement.
7. No Partnership or Joint Venture. The Company and the Advisor are not
partners or joint venturers with each other and neither the terms of this
Agreement nor the fact that the Company and the Advisor have joint interests in
any one or more investments shall be construed so as to make them such partners
or joint venturers or impose any liability on either of them.
8. Fidelity Bond. The Advisor shall not be required to obtain or
maintain a fidelity bond in connection with the performance of its services
hereunder.
9. Compensation. The Advisor shall be paid an advisory fee (the
"Advisory Fee") for the services rendered by it to the Company pursuant to this
Agreement. The Advisory Fee for each full fiscal year of the Company shall equal
the sum of one-half of one percent (0.5%) of the Annual Average Transferred
Assets (as defined below), plus seven-tenths of one percent (0.7%) of the Annual
Average Invested Capital (as defined below) up to $250,000,000, plus one-half of
one percent (0.5%) of the Annual Average Invested Capital equal to or exceeding
$250,000,000. The Advisory Fee shall be prorated for any partial fiscal year of
the Company during the term of this Agreement. In addition, the Advisor shall be
paid an annual incentive fee (the "Incentive Fee") for each fiscal year of the
Company, commencing with the Company's fiscal year ending December 31, 2000,
consisting of a number of shares of the Company's common shares of beneficial
interest ("Common Shares") with an aggregate value (determined as provided
below) equal to fifteen percent (15%) of the product of (i) the weighted average
Common Shares of the Company outstanding on
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a diluted basis during such fiscal year and (ii) the excess if any of FFO Per
Share (as defined below) for such fiscal year over the FFO Per Share for the
preceding fiscal year; provided however, in no event shall the Incentive Fee
payable in respect of any fiscal year exceed $.02 multiplied by the weighted
average number of Common Shares outstanding on a diluted basis during such
fiscal year. (The Advisory Fee and Incentive Fee are hereinafter collectively
referred to as the "Fees"). No Incentive Fee shall be payable for the Company's
fiscal year ending December 31, 1999.
For purposes of this Agreement: "Annual Average Transferred Assets" of
the Company, for any fiscal year, means the daily weighted average during such
fiscal year (or, in the case of the Company's fiscal year ending December 31,
1999, during the period commencing with the date hereof and ending on December
31, 1999) of the aggregate book value of the Transferred Assets, before
depreciation, reserves for bad debts and other similar noncash items. "Annual
Average Invested Capital" of the Company, for any fiscal year, means the daily
weighted average during such fiscal year (or, in the case of the Company's
fiscal year ending December 31, 1999, during the period commencing with the date
hereof and ending on December 31, 1999) of the aggregate book value of the
consolidated assets of the Company, excluding the Transferred Assets, invested,
directly or indirectly, in equity interests in and loans secured by real estate
and personal property owned in connection with such real estate, before
depreciation, reserves for bad debts and other similar noncash items. "FFO Per
Share," for any fiscal year, means (i) the Company's consolidated net income,
computed in accordance with generally accepted accounting principles, before
gain or loss on sale of properties and extraordinary items, depreciation and
other non-cash items, including the Company's pro rata share of the funds from
operations (determined in accordance with this clause) for such fiscal year of
(A) any unconsolidated subsidiary and (B) any entity for which the Company
accounts by the equity method of accounting, divided by (ii) the weighted
average number of Common Shares outstanding on a diluted basis during such
fiscal year; "Transferred Assets" means the assets owned by the Company and its
subsidiaries on the date hereof. FFO Per Share for the Company's fiscal year
ending December 31, 1999 shall be calculated on a pro forma basis adjusted as if
the transactions described in the notes to the unaudited pro forma consolidated
financial statements of the Company contained in the Company's Registration
Statement No. 333-69703 filed with the Securities and Exchange Commission (as
amended through the date hereof) had occurred as of January 1, 1999.
The Advisory Fee shall be computed and paid by the Company on a year to
date basis within thirty (30) days following the end of each fiscal month. These
computations shall be based upon the Company's monthly or quarterly financial
statements, as the case may be, and shall be in reasonable detail. The Incentive
Fee shall be computed and paid by the Company within thirty (30) days following
the public availability of the Company's annual audited financial statements for
each fiscal year. A copy of the computations shall promptly be delivered to the
Advisor accompanied by payment of the Fees shown thereon to be due and payable.
The aggregate Fees paid for each fiscal year shall be subject to
adjustment as of the end of each that year. On or before the 30th day after
public availability of the Company's annual audited financial statements for
each fiscal year, the Company shall deliver to the Advisor an Officer's
Certificate (a "Certificate") reasonably acceptable to the Advisor and certified
by an authorized officer of the Company setting forth (i) the Annual Average
Transferred Assets, the Annual Average
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Invested Capital and FFO Per Share for the Company's fiscal year ended upon the
immediately preceding December 31, and (ii) the Company's computation of the
Fees payable for the fiscal year. The Certificate shall be accompanied by an
examination of the calculation of Annual Average Invested Capital and FFO Per
Share by the Company's independent certified public accountants.
If the aggregate Fees payable for any fiscal year as shown in the
Certificate exceed the aggregate amounts previously paid by the Company, the
Company shall pay the deficit to the Advisor at the time of delivery of the
Certificate.
If the aggregate Fees payable for any fiscal year as shown in the
Certificate are less than the aggregate amounts previously paid by the Company,
the Company shall specify in the Certificate whether the Advisor should (i)
refund to the Company an amount equal to the difference or (ii) grant the
Company a credit against the Fees next coming due in the amount of the
difference until that amount has been fully paid or otherwise discharged.
Payment of the Incentive Fee shall be made by issuance of Common
Shares. The number of shares to be issued in payment of the Incentive Fee shall
be the whole number of shares (disregarding any fraction) equal to the value of
the Incentive Fee, as provided above, divided by the average closing price of
the Common Shares on the New York Stock Exchange during the month before the end
of the fiscal year for which the computation is made.
10. Compensation for Additional Services. If, and to the extent that,
the Company shall request the Advisor to render services on behalf of the
Company other than those required to be rendered by the Advisor in accordance
with the terms of this Agreement, those additional services shall be compensated
separately on terms to be agreed upon between the Advisor and the Company from
time to time. In addition, the Company may make awards to the employees of the
Advisor and others under the Company's 1999 Incentive Share Award Plan.
11. Expenses of the Advisor. Without regard to the compensation
received by the Advisor from the Company pursuant to this Agreement, the Advisor
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
Advisor, 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 Advisor, except fees and travel and other
expenses of 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 Advisor, except to the extent those expenses may
relate solely to an office maintained by the Company separate from the
office of the Advisor, if any; and
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(d) miscellaneous administrative expenses incurred in
supervising, monitoring and inspecting real property and other
investments of the Company or relating to performance by the Advisor of
its obligations hereunder.
12. Expenses of the Company. Except as expressly otherwise provided in
this Agreement, the Company shall pay all its expenses not payable by the
Advisor, 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 Advisor:
(a) the cost of borrowed money;
(b) taxes on income and taxes and assessments on real
property, if any, and all other taxes applicable to the Company;
(c) legal, auditing, accounting, underwriting, brokerage,
listing, reporting, registration and other fees, and printing,
engraving and other expenses and taxes incurred in connection with the
issuance, distribution, transfer, trading, registration and stock
exchange listing of the Company's securities, including transfer
agent's, registrar's and indenture trustee's fees and charges;
(d) expenses of organizing, restructuring, reorganizing or
terminating the Company, or of revising, amending, converting or
modifying the Company's organizational documents;
(e) fees and travel and other expenses paid to Trustees and
officers of the Company in their capacities as such (but not in their
capacities as officers or employees of the Advisor) 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 acquisition,
disposition or ownership of real estate interests or other property
(including 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 Advisor, to the extent that those
expenses are to be borne by the Advisor pursuant to Section 11 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;
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(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 printing 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; and
(k) expenses relating to any office or office facilities
maintained by the Company separate from the office of the Advisor.
13. Limits of Advisor Responsibility. The Advisor 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 Advisor. The Advisor,
its shareholders, directors, officers, employees, agents and Affiliates will not
be liable to the Company, its shareholders, or others, except by reason of acts
constituting bad faith, willful or wanton misconduct or gross negligence. The
Company shall reimburse, indemnify and hold harmless the Advisor, its
shareholders, directors, officers and employees, agents and Affiliates for and
from any and all expenses, losses, damages, liabilities, demands, charges and
claims of any nature whatsoever in respect of or arising from any acts or
omissions of the Advisor undertaken in good faith and in accordance with the
standard set forth above pursuant to the authority granted to it by this
Agreement.
14. Other Activities of the Advisor and its Stockholders. Nothing
herein shall prevent the Advisor from engaging in other activities or businesses
or from acting as advisor to any other Person (including other real estate
investment trusts) even though that Person has investment policies and
objectives similar to those of the Company; provided, however, that neither the
Advisor nor Xxxxx X. Xxxxxxx or Xxxxxx X. Xxxxxx shall provide advisory services
to, make competitive direct investment in or, in the case of Messrs. Xxxxxxx and
Xxxxxx, serve as a director or officer of, any other real estate investment
trust which is principally engaged in the business of ownership of senior
apartments, congregate communities, assisted living or nursing home properties
without the consent of the Independent Trustees. The Advisor shall be free from
any obligation to present to the Company any particular investment opportunity
which comes to the Advisor. In addition, except as expressly provided herein,
nothing herein shall prevent any stockholder or Affiliate of the Advisor from
engaging in any other business or from rendering services of any kind to any
other corporation, partnership or other entity (including competitive business
activities). Without limiting the foregoing provisions, the Advisor agrees, upon
the request of any Trustee of the Company, to disclose certain investment
information concerning the Advisor or certain of its Affiliates, provided,
however, that the disclosure shall be required only if it does not constitute a
breach of any fiduciary duty or obligation of Advisor.
Directors, officers, employees and agents of the Advisor or of its
Affiliates may serve as Trustees, officers, employees, agents, nominees or
signatories of the Company. When executing documents or otherwise acting in
capacities for the Company, these persons shall use their respective titles in
the Company.
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15. Term, Termination. This Agreement shall continue in force and
effect until December 31, 1999 (the "Initial Term"), and is renewable
periodically thereafter by the Company, if a majority of the Independent
Trustees determine that the Advisor's performance has been satisfactory.
Paragraph 18 hereof shall govern the rights, liabilities and
obligations of the parties upon termination of this Agreement; and, except as
provided in paragraph 18, a termination shall be without further liability of
either party to the other than for breach or violation of this Agreement prior
to termination.
16. Assignment. The Company may terminate this Agreement at any time in
the event of its assignment by the Advisor except an assignment to a
corporation, partnership, trust, or other successor entity which may take over
the property and carry on the affairs of the Advisor; provided that, following a
permitted assignment, the persons who controlled the operations of the Advisor
immediately prior to the assignment shall control the operation of the
successor, including the performance of its duties under this Agreement, and
this successor shall be bound by the same restrictions by which the Advisor was
bound prior to such assignment. A permitted assignment or any other assignment
of this Agreement by the Advisor shall bind the assignee hereunder in the same
manner as the Advisor is bound hereunder. This Agreement shall not be assignable
by the Company without the prior written consent of the Advisor, except in the
case of any assignment by the Company to a trust, corporation, partnership or
other entity which is the successor to the Company, in which case the successor
shall be bound hereby and by the terms of said assignment in the same manner and
to the same extent as the Company is bound hereby.
17. Default, Bankruptcy, Etc. of the Advisor. At the sole option of the
Company, this Agreement may be terminated immediately by written notice from the
Trustees to the Advisor if any of the following events shall have occurred:
(a) the Advisor shall have violated any provision of this
Agreement and, after written notice from the Trustees of the violation,
shall have failed to cure the default within thirty (30) days;
(b) a petition shall have been filed against the Advisor for an
involuntary proceeding under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, and that petition shall
not have been dismissed within ninety (90) days of filing; or a court
having jurisdiction shall have appointed a receiver, liquidator,
assignee, custodian, trustee, sequestrator or similar official of the
Advisor for any substantial portion of its property, or ordered the
winding up or liquidation of its affairs, and that appointment or order
shall not have been rescinded or vacated within ninety (90) days of the
appointment or order; or
(c) the Advisor shall have commenced a voluntary proceeding
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or shall have made any general assignment for the
benefit of creditors, or shall have failed generally to pay its debts
as they became due.
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The Advisor agrees that, if any of the events specified in paragraphs
(b) or (c) of this Section 17 occur, it will give written notice thereof to the
Trustees within seven (7) days following the occurrence of the event.
18. Action Upon Termination. From and after the effective date of any
termination of this Agreement pursuant to Sections 15, 16 or 17 hereof, the
Advisor shall be entitled to no compensation for services rendered hereunder for
the remainder of the then-current term of this Agreement but shall be paid, on a
pro rata basis, all compensation due for services performed prior to
termination, including, without limitation, a pro rata portion of the then
current year's Incentive Fee. Upon termination, the Advisor immediately shall:
(a) pay over to the Company all monies collected and held for
the account of the Company by it pursuant to this Agreement, after
deducting therefrom any accrued and unpaid Fees (including, without
limitation, a pro rata portion of the then current year's 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 amount of Fees paid to the Advisor upon termination shall be
subject to adjustment pursuant to the following mechanism. On or before the 30th
day after public availability of the Company's annual audited financial
statements for the fiscal year in which termination occurs, the Company shall
deliver to the Advisor a Certificate reasonably acceptable to the Advisor and
certified by an authorized officer of the Company setting forth (i) the Annual
Average Invested Capital and FFO Per Share for the Company's fiscal year ended
upon the immediately preceding December 31, and (ii) the Company's computation
of the Fees (including, without limitation, a pro rata portion of the then
current year's Incentive Fee) payable upon the date of termination. The
Certificate shall be accompanied by a review of the calculation of Annual
Average Invested Capital and FFO Per Share by the Company's independent
certified public accountants.
If the annual Fees owed upon termination as shown in the Certificate
exceed the Fees paid by the Company upon termination, the Company shall include
its check for the deficit and deliver the same to the Advisor with the
Certificate.
The Incentive Fee for any partial fiscal year will be determined by
multiplying the Incentive Fee for such year (assuming this Agreement were in
effect for the entire year) by a fraction, the numerator of which is the number
of days in the portion of such year during which this Agreement was in effect,
and the denominator of which shall be 365.
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If the annual Fees owed upon termination as shown in the Certificate
are less than the Fees paid by the Company upon termination, the Advisor shall
remit to the Company its check in an amount equal to the difference.
19. 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.
20. Arbitration. The Company and the Advisor agree that any and all
disputes and disagreements arising out of or relating to this Agreement, other
than actions or claims for injunctive relief or claims raised in actions or
proceedings brought by third parties, shall be resolved through negotiations or,
if the dispute is not so resolved, through binding arbitration conducted in
Boston, Massachusetts under the J.A.M.S./Endispute Comprehensive Arbitration
Rules and Procedures, with the following amendments to those rules. First, the
parties agree that in no event shall the arbitration from commencement to
issuance of an award take longer than 180 days. Second, the parties agree that
the arbitration tribunal shall consist of three arbitrators and that the parties
elect not to have the optional appeal procedure provided for in Rule 23. Third,
in lieu of the depositions permitted in Rule 15(E) and (F), the parties agree
that the only depositions shall be a single deposition to last no longer than
one six-hour day that each party may take of the opposing party or an individual
under the control of the opposing party. Judgment on the award rendered by the
arbitrators may be entered in any court having jurisdiction thereof.
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 STATE DEPARTMENT OF ASSESSMENTS AND TAXATION 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 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 unless some other method of
giving the notice, report or other communication is accepted by the party to
whom it is given, and shall be given by being delivered at the following
addresses to the parties hereto:
If to the Company:
Senior Housing Properties Trust
000 Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: President
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If to the Advisor:
Reit Management & Research, Inc.
000 Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: President
Such notice shall be effective upon its receipt by the party to whom it
is directed. Either party hereto may at any time give notice to the other party
in writing of a change of its address for purposes of this paragraph 21.
23. Amendments. The 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. Successors and Assigns. This Agreement shall be binding upon any
successors or permitted assigns of the parties hereto as provided herein.
25. Governing Law. The provisions of this Agreement shall be governed
by and construed in accordance with the laws of The Commonwealth of
Massachusetts.
26. 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.
27. Entire Agreement. This Agreement constitutes the entire agreement
of the parties hereto with respect to the subject matter hereof and supersedes
and cancels any pre-existing agreements with respect to its subject matter.
28. Attorneys' Fees. If any legal action is brought for the enforcement
of this Agreement, or because of an alleged dispute, breach, default or
misrepresentation in connection with any of the provisions of this Agreement,
the successful or prevailing party or parties shall be entitled to recover
reasonable attorneys' fees and other costs incurred in that action in addition
to any other relief to which it or they may be entitled.
29. Survival. The provisions of Sections 13, 14, 18, 20, 21, 22 and 28
of this Agreement shall survive the termination hereof.
[Remainder of page intentionally left blank.]
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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.
SENIOR HOUSING PROPERTIES TRUST
By:_________________________________
Its:
REIT MANAGEMENT & RESEARCH, INC.
By:_________________________________
Its:
Solely as to Section 14 hereof:
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Xxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxx
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