RMR Mortgage Trust (NasdaqCM:RMRM) entered into an agreement to acquire Tremont Mortgage Trust (NasdaqCM:TRMT) from Tremont Realty Advisors LLC, Adam D. Portnoy and others for $55 million on April 26, 2021. Under the terms of the merger agreement, each TRMT common share will be converted into 0.520 of one newly issued RMRM common share, subject to adjustment. On August 26, 2021, the exchange ratio was adjusted from 0.52 of one RMRM common share for each issued and outstanding TRMT common share, to 0.516 of one RMRM common share for each issued and outstanding TRMT common share. The exchange ratio was adjusted in connection with the payment of the distributions and in accordance with the merger agreement. Upon the closing of the merger, RMRM shareholders are expected to own approximately 70% of the combined company's outstanding common shares, while TRMT shareholders are expected to own approximately 30% of the combined company's outstanding common shares. TRMT agreed to merge with and into RMRM, with RMRM continuing as the surviving entity in the merger. Tremont Realty Advisors LLC, the manager of RMRM and TRMT, or the Manager, will continue to manage the combined company and has waived any termination fee that would otherwise be payable by TRMT as a result of the merger. Pursuant to the Merger Agreement, effective upon consummation of the Merger, RMRM's Declaration of Trust will be amended to, among other things, change its name to “Seven Hills Realty Capital” and the RMRM Common Shares will continue to trade on The Nasdaq Stock Market LLC, or Nasdaq, under the new ticker symbol “SHRC”. Each party is required to pay the other party a termination fee of $2.156 million.

The transaction is subject to the requisite approvals by RMRM and TRMT shareholders, the effectiveness of the registration statement on Form S-4, or the Form S-4, to be filed by RMRM with the Securities and Exchange Commission, or the SEC, to register the RMRM Common Shares to be issued in the Merger; Nasdaq's approval of the listing of the RMRM Common Shares to be issued in the Merger, subject to official notice of issuance; and the receipt of certain tax opinions from each party's tax counsel. and other customary closing conditions. RMRM's greater than 5% shareholder has agreed to vote in favor of the issuance of common shares in the merger at RMRM's special meeting of shareholders. TRMT's greater than 5% shareholder has agreed to vote in favor of the merger and other transactions contemplated by the merger agreement at TRMT's special meeting of shareholders. The meeting of RMRM and TRMT shareholders is scheduled on September 17, 2021. The transaction was unanimously approved and adopted by RMRM's and TRMT's independent trustees and by RMRM's and TRMT's board of trustee. The distributions and the exchange ratio adjustment were recommended, as applicable, to each of TRMT and RMRM's board of trustees by special committees of TRMT and RMRM's board of trustees, respectively, and were separately approved and adopted by TRMT and RMRM's independent trustees and by TRMT and RMRM's board of trustees. RMRM and TRMT will each hold special meetings of their respective shareholders on September 17, 2021. The Board of TRMT recommends the shareholders to vote in favor of the transaction. The agreement provides that either party may terminate the agreement if the merger is not consummated by December 31, 2021. As on September 10, 2021, three proxy advisory firms, Institutional Shareholder Services Inc., Glass Lewis & Co., LLC, and Egan-Jones Proxy Services have all recommended that shareholders vote “FOR” the transaction. As of September 20, 2021, the shareholders of Tremont approved the transaction. The merger is expected to close during the third quarter of 2021. As of August 27, 2021, the merger is expected to close on or about September 30, 2021. The merger is expected to be accretive to distributable earnings in 2022 with the potential to realize annual expense savings of $1.4 million to $1.6 million, or $0.10 to $0.11 per common share, due to the elimination of certain duplicative public company costs.

UBS Securities LLC acted as financial advisor and fairness opinion provider to RMR. Faiz Ahmad, Timothy F. Nelson, Sarah Beth Rizzo, Brian Breheny and Andrew Brady of Skadden, Arps, Slate, Meagher & Flom LLP acted as legal advisors to RMR. Citigroup Global Markets Inc. acted as financial advisor and fairness opinion provider to TRMT. Howard E. Berkenblit, Lindsey A. Getz, Angela Gomes, Brian E. Hammell, Ameek Ashok Ponda and Avinash R. Rao of Sullivan & Worcester LLP acted as legal advisors to TRMT. Citigroup Inc. (NYSE:C) acting as financial advisor to Tremont. D.F. King & Co., Inc. acted as information agent for RMRM and TRMT and received a fee of $15000 and $10000 respectively. Equiniti Trust Company acted as transfer agent and registrar to RMRM. RSM US LLP provided auditor's report on financials of RMRM while Deloitte & Touche LLP provided auditor's report on financials of TRMT. RMRM will pay UBS an aggregate fee of $4 million for its financial advisory services in connection with the Merger, of which $1 million was payable in connection with the delivery of UBS' opinion and the remaining $3 million is payable contingent upon completion. TRMT has agreed to pay Citi an aggregate fee of $4 million, of which $1 million was payable upon delivery of Citi's opinion and the balance is payable contingent upon completion.