EXHIBIT 10.2
AMENDMENT NO. 1 TO AGREEMENT OF MERGER
THIS AMENDMENT NO. 1 TO AGREEMENT OF MERGER ("Amendment") is made and
entered into March 25, 1997, between HEALTH AND RETIREMENT PROPERTIES TRUST
("HRPT"), a Maryland real estate investment trust, with its principal office
located in Newton, Massachusetts and GOVERNMENT PROPERTY INVESTORS, INC.
("GPI"), a corporation organized and existing under the laws of the State of
Delaware, with its principal office located in Washington, D.C.
RECITAL
HRPT and GPI entered into an Agreement of Merger dated February 17,
1997 ("Merger Agreement"). HRPT and GPI desire to amend the Merger Agreement.
Capitalized terms not defined in this Agreement shall have the meanings
given therefor in the Merger Agreement.
NOW THEREFORE, it is agreed:
1. All references in Section 1.6 of the Merger Agreement to March
31, 1997 shall be references to March 25, 1997, and the
penultimate sentence of Section 1.6 is deleted in its entirety
and the following substituted therefor:
"Any difference between the Pro Forma Balance Sheet
and the consolidated balance sheet of GPI and its Subsidiaries
as of March 25, 1996, confirmed by Ernst & Young LLP which
would have affected the determination of the Aggregate Closing
Consideration shall be an adjustment to the number of HRPT
Common Shares first issued after the Closing Date pursuant to
Section 8.3 or 8.4, or to the Second Closing Consideration if
an insufficient number of HRPT Common Shares are issued
pursuant to Section 8.3 or 8.4."
2. The last sentence of Section 1.80 of the Merger Agreement is
deleted in its entirety and the following substituted
therefor:
"The Second Closing Consideration may be subject to
adjustment as provided in Sections 1.6, 6.9, 8.3 and 8.10."
3. Section 6.9 of the Merger Agreement provides for the
contribution of the contracts and agreements listed on
Disclosure Schedule 6.9 to GPH. If, after the Closing Date,
GPI is able to effect a reduction in the amounts GPH would be
obliged to expend with respect to items 8 and 9 on Disclosure
Schedule 6.9, and provides HRPT evidence of such reduction
reasonably satisfactory to HRPT, the Second Closing
Consideration will be increased by an amount equal to such
reduction.
4. Section 6.12 of the Merger Agreement is deleted in its
entirety and the following substituted therefor:
"GPI will take all action required in connection with
its liquidation and dissolution to ensure (i) that GPI will
continue to be qualified as a "real estate investment trust"
through December 31, 1997 and (ii) that each GPI Subsidiary
will continue to be qualified as a "qualified REIT subsidiary"
through the Effective Time, whether such action by GPI is
required to be taken before or after December 31, 1997 or the
Effective Time, as the case may be."
5. Section 6.17 of the Merger Agreement is deleted in its
entirety and the following substituted therefor:
"The Parties 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 (1) 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 and (2) no more than three
depositions by each Party limited to witnesses who will not be
available to testify at the hearing, each such deposition to
last no longer than one six- hour day. Judgment on the award
rendered by the arbitrators may be entered in any court having
jurisdiction thereof."
6. Section 8.3(b) of the Merger Agreement is deleted in its
entirety and the following substituted therefor:
"(b) San Diego Premises. If completion of the San
Diego Premises in accordance with the plans and specifications
therefor shall not have occurred and the obligations to pay
rent of both tenants under the Development Property Leases in
effect with respect to the San Diego Premises shall not have
commenced by the Closing Date, the Aggregate Closing
Consideration shall be reduced by $1,063,264. Upon (x) the
30th day after substantial completion of the San Diego
Premises in accordance with the plans and specifications
therefor, (y) the transfer to HRPT of the developer partner's
interest and (z) the novation of the Development Property
Leases in effect with respect to the San Diego Premises in
favor of an HRPT Subsidiary, HRPT will issue GPI a number of
HRPT Common Shares with an aggregate value (with each such
HRPT Common Share valued at the Merger Price) equal to
$1,063,264 less all amounts funded or anticipated to be funded
in
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connection with the punch list items by HRPT at or subsequent
to Closing to complete the San Diego Premises in accordance
with the plans and specifications therefor, including, without
limitation, any amounts paid to retire indebtedness or to
third party partners, together with interest thereon from the
date advanced by HRPT through the date of issuance of the HRPT
Common Shares pursuant to this Section 8.3(b) at an annual
rate equal to 7.4%. If the aggregate amount so funded by HRPT
(including the interest thereon) exceeds $1,063,264, one-half
such excess shall be deducted from the Second Closing
Consideration."
7. Schedule 9.2 to the Merger Agreement is deleted in its
entirety and Schedule 9.2 attached to this Amendment is
substituted therefor.
8. The first paragraph of Section 11.10 of the Merger Agreement
is deleted in its entirety and the following substituted
therefor:
"The Merger shall be governed by Maryland Law and
otherwise, this Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of New
York. This Agreement supersedes all negotiations, agreements
and understandings between the Parties with respect to the
subject matter of this Agreement (including, without
limitation, the Term Sheet dated January 7, 1997, between GPI
and HRPT and the Confidentiality Agreement dated May 17, 1996,
between GPI and HRPT) and constitutes the entire agreement
between the Parties to this Agreement."
9. In all other respects the Merger Agreement continues in full
force and effect and unmodified.
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EXECUTED under seal as of the date first above written.
HEALTH AND RETIREMENT PROPERTIES TRUST
By: /s/ Xxxxx X. Xxxxxxx
GOVERNMENT PROPERTY INVESTORS, INC.
By:/s/ Xxxx Xxxxx
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