SC 13D/A: Schedule filed to report acquisition of beneficial ownership of 5% or more of a class of equity securities
Published on May 15, 2002
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D/A
Under the Securities Exchange Act of 1934
(Amendment No. 8)
Omega Healthcare Investors, Inc.
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(Name of Issuer)
Common Stock, par value $0.10 per share
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(Title of Class of Securities)
681936100
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(CUSIP Number)
Kymberlyn J. Irvin
Explorer Holdings, L.P.
2200 Ross Avenue
Suite 4200 West
Dallas, Texas 75201-6799
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(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
April 30, 2002
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(Date of Event which Requires Filing of this Statement)
If the reporting person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ] .
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 13d-7 for other parties
to whom copies are to be sent.
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CUSIP No. 681936100 13D Page 2 of 9 Pages
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1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Explorer Holdings, L.P.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |X|
(b) | |
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) or 2(e) | |
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY None
OWNED BY ----------------------------------------------------
EACH REPORTING 8 SHARED VOTING POWER
PERSON WITH
29,312,430**
----------------------------------------------------
9 SOLE DISPOSITIVE POWER
None
----------------------------------------------------
10 SHARED DISPOSITIVE POWER
29,312,430**
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
29,312,430**
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* | |
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
54.4%**
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14 TYPE OF REPORTING PERSON*
PN
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
** The Reporting Person beneficially owns 12,537,710 shares of common stock
and 1,048,420 shares of Series C Convertible Preferred Stock, which Series
C shares are convertible into 16,774,720 shares of common stock of Omega.
Based upon the number of shares of common stock reported to be outstanding
by Omega as of April 12, 2002, all such shares would represent 54.4% of
Omega's common stock, after giving effect to the conversion of the Series C
Preferred.
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CUSIP No. 681936100 13D Page 3 of 9 Pages
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1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Explorer Holdings GenPar, LLC
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |X|
(b) | |
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) or 2(e) | |
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY None
OWNED BY ----------------------------------------------------
EACH REPORTING 8 SHARED VOTING POWER
PERSON WITH
29,312,430**
----------------------------------------------------
9 SOLE DISPOSITIVE POWER
None
----------------------------------------------------
10 SHARED DISPOSITIVE POWER
29,312,430**
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
29,312,430**
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* | |
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
54.4%**
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14 TYPE OF REPORTING PERSON*
00
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
** See footnote ** on page 2 of this Schedule 13D/A.
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CUSIP No. 681936100 13D Page 4 of 9 Pages
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1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Hampstead Investment Partners III, L.P.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |X|
(b) | |
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) or 2(e) | |
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Texas
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NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY None
OWNED BY ----------------------------------------------------
EACH REPORTING 8 SHARED VOTING POWER
PERSON WITH
29,312,430**
----------------------------------------------------
9 SOLE DISPOSITIVE POWER
None
----------------------------------------------------
10 SHARED DISPOSITIVE POWER
29,312,430**
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
29,312,430**
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* | |
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
54.4%**
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14 TYPE OF REPORTING PERSON*
PN
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
** See footnote ** on page 2 of this Schedule 13D/A.
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CUSIP No. 681936100 13D Page 5 of 9 Pages
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1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Donald J. McNamara
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |X|
(b) | |
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) or 2(e) | |
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
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NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 544,772**
OWNED BY ----------------------------------------------------
EACH REPORTING 8 SHARED VOTING POWER
PERSON WITH
29,312,430**
----------------------------------------------------
9 SOLE DISPOSITIVE POWER
544,772**
----------------------------------------------------
10 SHARED DISPOSITIVE POWER
29,312,430**
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
29,857,202**
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* | |
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
55.4%**
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14 TYPE OF REPORTING PERSON*
IN
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
** Mr.McNamara may be deemed to beneficially own, due to his relationship with
Explorer Holdings, L.P., the 12,537,710 shares of common stock and
1,048,420 shares of Series C Convertible Preferred Stock owned by Explorer,
which Series C shares are convertible into 16,774,720 shares of common
stock of Omega. Mr. McNamara also (i) owns 164,349 shares of common stock
directly, (ii) holds options for 11,000 shares of common stock, of which
3,666 are exercisable immediately or in the next 60 days, (iii) may be
deemed to have beneficial ownership of 1,466 shares of common stock held by
a trust established by Mr. McNamara for non-family members of which Mr.
McNamara is the trustee, (iv) may be deemed to have beneficial ownership of
7,546 shares of common stock held by a charitable foundation established by
Mr. McNamara of which Mr. McNamara has voting and investment control, and
(v) may be deemed to have beneficial ownership of 367,745 shares of common
stock held by a partnership established by Mr. McNamara for the benefit of
certain members of Mr. McNamara's family, of which Mr. McNamara may be
deemed to have voting or investment power. Based upon the number of shares
of common stock reported to be outstanding by Omega as of April 12, 2002,
all such shares would represent 55.4% of Omega's common stock, after giving
effect to the conversion of the Series C Preferred. Mr. McNamara disclaims
beneficial ownership of all shares held by Explorer and the trust,
charitable foundation and partnership discussed above.
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CUSIP No. 681936100 13D Page 6 of 9 Pages
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1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Daniel A. Decker
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |X|
(b) | |
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) or 2(e) | |
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
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NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 8,307**
OWNED BY ----------------------------------------------------
EACH REPORTING 8 SHARED VOTING POWER
PERSON WITH
29,312,430**
----------------------------------------------------
9 SOLE DISPOSITIVE POWER
8,307**
----------------------------------------------------
10 SHARED DISPOSITIVE POWER
29,312,430**
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
29,320,737**
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* | |
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
54.4%**
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14 TYPE OF REPORTING PERSON*
IN
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
** Mr. Decker may be deemed to beneficially own, due to his relationship with
Explorer Holdings, L.P., the 12,537,710 shares of common stock and
1,048,420 shares of Series C Convertible Preferred Stock owned by Explorer,
which Series C shares are convertible into 16,774,720 shares of common
stock of Omega. Mr. Decker also (i) owns 4,641 shares of common stock
directly and (ii) holds options for 11,000 shares of common stock, of which
3,666 are exercisable immediately or in the next 60 days. Based upon the
number of shares of common stock reported to be outstanding by Omega as of
April 12, 2002, all such shares would represent 54.4% of Omega's common
stock, after giving effect to the conversion of the Series C Preferred. Mr.
Decker also disclaims beneficial ownership of all shares held by Explorer.
This amendment to Schedule 13D/A amends and supplements the information set
forth in the Statement on Schedule 13D filed on May 25, 2000, as amended on
April 19, 2001, September 20, 2001, October 29, 2001, November 26, 2001,
February 22, 2002, March 28, 2002, and April 18, 2002 (as amended, the
"Statement") by the Reporting Persons.
Item 1. Security and Issuer.
This amendment relates to the common stock, par value $0.10 (the "Common
Stock"), of Omega Healthcare Investors, Inc. (the "Company") and the Series C
Convertible Preferred Stock, par value $1.00 (the "Series C Preferred"), of the
Company.
Item 3. Source and Amount of Funds or Other Consideration.
Item 3 is hereby amended to add the following at the end thereof:
The Reporting Persons have purchased 199,400 additional shares of Common
Stock since April 8, 2002. The source of funds for the purchase of these shares
was derived from capital contributions from the partners of Explorer Holdings,
L.P. ("Explorer").
Item 4. Purpose of Transaction.
Item 4 is hereby amended to add the following at the end thereof:
Explorer and the Company amended their Stockholders Agreement (the "Second
Amended Stockholders Agreement") as of April 30, 2002 to clarify that Explorer
will be entitled to designate to the Board of Directors of the Company that
number of directors that is generally proportionate to Explorer's ownership of
voting securities of the Company and based on the maximum number of authorized
directors from time to time. Under the prior Stockholders Agreement, Explorer
was entitled to appoint a fixed number of directors that was proportionate to
its ownership interest in the Company based on a maximum size of the Board of
ten directors. This provision needed to be changed in light of the Company's
proposal to amend the Company's charter and bylaws to increase the maximum
number of directors from nine to thirteen. Under the Second Amended Stockholders
Agreement, the number of Explorer designees to the Board will in no event exceed
the minimum number of directors necessary to constitute a majority of the Board
during such period that Explorer owns a majority of the Company's voting
securities.
Item 5. Interest in Securities of the Issuer.
Item 5(a) is hereby amended to read in its entirety as follows:
(a) Each of the Reporting Persons, other than Messrs. McNamara and Decker,
beneficially owns 29,312,430 shares of Common Stock, which includes 16,774,720
shares of Common Stock owned by virtue of Explorer's ownership of 1,048,420
shares of Series C Preferred. Based on the number of shares of Common Stock
reported to be outstanding as of April 12, 2002, such shares would represent
54.4% of the Company's outstanding shares of Common Stock, after giving effect
to the conversion of the Series C Preferred.
Messrs. Decker and McNamara may be deemed to beneficially own all shares
held by Explorer by virtue of their relationship with Explorer and additional
shares of Common Stock described on pages 5 and 6 of this Statement.
Item 5(c) is hereby amended to add the following at the end thereof:
(c) Explorer has engaged in the following transactions on the New York
Stock Exchange since April 8, 2002:
Aggregate Number
Trade Date of Shares Purchased Weighted Average Price
4/08/2002 22,200 $5.29
4/11/2002 154,600 $6.10
4/12/2002 22,600 $6.20
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to
Securities of the Issuer.
The responses to Items 3, 4 and 5 are incorporated herein by reference,
including, in particular, the description of the following document:
1. Second Amended and Restated Stockholders Agreement.
Item 7. Material to be Filed as Exhibits.
Exhibit A - Second Amended and Restated Stockholders Agreement, dated as of
April 30, 2002, by and between Explorer Holdings, L.P. and Omega
Healthcare Investors, Inc.
SIGNATURES
After reasonable inquiry and to the best of their knowledge and belief, the
undersigned certify that the information set forth in this statement is true,
complete and correct, and agree that this Statement may be filed collectively on
behalf of each of the undersigned by Explorer Holdings, L.P., Explorer Holdings
GenPar, LLC, Hampstead Investment Partners III, L.P., Donald J. McNamara and
Daniel A. Decker.
Date: May 14, 2002 EXPLORER HOLDINGS, L.P.
By: Explorer Holdings GenPar, LLC,
its General Partner
By: /s/ Kymberlyn J. Irvin
Kymberlyn J. Irvin
Authorized Officer
EXPLORER HOLDINGS GENPAR, LLC
By: /s/ Kymberlyn J. Irvin
Kymberlyn J. Irvin
Authorized Officer
HAMPSTEAD INVESTMENT PARTNERS III, L.P.
By: Hampstead Investment Partners III
GenPar, L.P., its General Partner
By: Hampstead GenPar III, LLC,
its General Partner
By: /s/ Kymberlyn J. Irvin
Kymberlyn J. Irvin
Authorized Officer
/s/ Kymberlyn J. Irvin*
-------------------------
Donald J. McNamara
/s/ Kymberlyn J. Irvin*
-------------------------
Daniel A. Decker
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* Pursuant to Power of Attorney previously filed.
EXHIBIT A
SECOND AMENDED AND RESTATED
STOCKHOLDERS AGREEMENT
SECOND AMENDED AND RESTATED STOCKHOLDERS AGREEMENT (this "Agreement"),
dated as of April 30, 2002, between Explorer Holdings, L.P., a Delaware limited
partnership ("Stockholder"), and Omega Healthcare Investors, Inc., a Maryland
corporation (the "Company").
WHEREAS, the Company and Stockholder have entered into an Investment
Agreement, dated as of October 29, 2001, as amended (the "Investment
Agreement"), pursuant to which, among other things, Stockholder acquired shares
of common stock, par value $0.10 per share, of the Company (the "Common Stock"),
which together with the Series C Preferred Stock held by Stockholder represent a
majority of the outstanding Voting Securities (as defined below);
WHEREAS, upon the closing of the transactions contemplated by the
Investment Agreement, the Company and Stockholder entered into an Amended and
Restated Stockholders Agreement, dated as of February 20, 2002 (the "Original
Agreement"); and
WHEREAS, the Company and the Stockholder wish to amend the Original
Agreement to clarify Stockholder's right to designate directors of the Company
and to make certain other changes.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements herein contained, the parties hereto hereby agree as follows:
I. DEFINITIONS
1.1 Definitions. Capitalized terms used herein and not defined herein will
have the meaning set forth in the Investment Agreement. In addition to the terms
defined elsewhere herein, the following terms have the following meanings when
used herein with initial capital letters:
(a) "Affiliate" of any Person means any other Person, that, directly or
indirectly through one or more intermediaries, controls or is controlled by, or
is under common control with, such Person; and, for the purposes of this
definition only, "control" (including the terms "controlling", "controlled by"
and "under common control with") means the possession, direct or indirect, of
the power to direct or cause the direction of the management, policies or
activities of a Person whether through the ownership of securities, by contract
or agency or otherwise; provided that the Company and the Stockholder shall not
be deemed to be Affiliates of the other for purposes of this Agreement.
(b) "Assumption Agreement" means an agreement in writing in substantially
the form of Exhibit A hereto pursuant to which the party thereto agrees to be
bound by the terms and provisions of Sections 2.2, 2.5, 3.1 and 3.2 of this
Agreement.
(c) A Person will be deemed the "beneficial owner" of, and will be deemed
to "beneficially own", and will be deemed to have "beneficial ownership" of:
(i) any securities that such Person or any of such Person's Affiliates
is deemed to "beneficially own" within the meaning of Rule 13d-3 under the
Exchange Act, as in effect on the date of this Agreement; and
(ii) any securities (the "underlying securities") that such Person or
any of such Person's Affiliates has the right to acquire (whether such
right is exercisable immediately or only after the passage of time)
pursuant to any agreement, arrangement or understanding (written or oral),
or upon the exercise of conversion rights, exchange rights, rights,
warrants or options, or otherwise (it being understood that such Person
will also be deemed to be the beneficial owner of the securities
convertible into or exchangeable for the underlying securities).
(d) "Board" means the Board of Directors of the Company.
(e) "Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
(f) "Person" means an individual, a corporation, a partnership, a limited
partnership, a limited liability company, an association, a trust or other
entity or organization, including without limitation a government or political
subdivision or an agency or instrumentality thereof.
(g) "Public Offering" means the sale of shares of any class of Securities
to the public pursuant to an effective registration statement (other than a
registration statement on Form S-4 or S-8 or any similar or successor form)
filed under the Securities Act.
(h) "Registration Rights Agreement" means the Amended and Restated
Registration Rights Agreement, dated as of February 20, 2002, between
Stockholder and the Company and any other registration rights agreement entered
into in accordance with Article III hereof.
(i) "Securities" means the Common Stock, the Series C Preferred and all
other securities of the Company entitled to vote generally in the election of
the directors of the Company, and all other securities convertible into,
exchangeable for or exercisable for any such securities (whether immediately or
otherwise).
(j) "Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
(k) "Transfer" means a transfer, sale, assignment, pledge, hypothecation or
disposition.
(l) "Voting Securities" means the Common Stock, the Series C Preferred and
all other securities of the Company entitled to vote generally in the election
of the directors of the Company. For the avoidance of doubt, the Series A
Preferred Stock and the Series B Preferred Stock of the Company are not Voting
Securities.
II. GOVERNANCE; RESTRICTIONS ON ACQUISITION OF VOTING SECURITIES
2.1 Nomination and Voting for Stockholder Designees and Independent
Directors. (a) Stockholder will be entitled at Stockholder's election to
designate from time to time up to such number (rounded to the nearest whole
number) of directors to the Board (the "Stockholder Designees") based on the
percentage of the Company's total issued and outstanding Voting Securities
beneficially owned by Stockholder on an as-converted basis, not to exceed the
minimum number of directors (rounded to the nearest whole number) that
represents at least 51% of the total number of directors entitled to be elected
to the Board from time to time (including any directors who may then be elected
or appointed to fill any vacant seat on the Board that exists from time to time
or who may then be elected or appointed pursuant to the terms of any series of
preferred stock of the Company); provided that (i) the aggregate number of
Stockholder Designees will not exceed the minimum number of directors (rounded
to the nearest whole number) that represents at least 51% of the total number of
directors entitled to be elected to the Board from time to time (including any
directors who may then be elected or appointed to fill any vacant seat on the
Board that exists from time to time or who may then be elected or appointed
pursuant to the terms of any series of preferred stock of the Company) and (ii)
the aggregate number of Stockholder Designees will constitute a majority of the
total number of directors on the Board only during such time as Explorer owns at
least a majority of the Company's total issued and outstanding Voting
Securities. For purposes hereof, directors elected by the holders of the
Company's Series C Preferred Stock pursuant to the terms thereof relating to
dividend arrearages shall be deemed Stockholder Designees so long as Stockholder
beneficially owns at least 66-2/3% of the outstanding Series C Preferred Stock.
(b) The Company, at each meeting of stockholders of the Company at which
directors are elected or pursuant to which such action is to be taken by written
consent, will nominate for election as directors of the Company such number of
Stockholder Designees such that following such election the Stockholder
Designees who are members of the Board represent the aggregate number of
Stockholder Designees that Stockholder is permitted to designate pursuant to
this Section 2.1. At least 90 calendar days prior to any such meeting or action
by written consent, Stockholder will provide the Company with the information
required pursuant to Regulation 14A under the Exchange Act with respect to each
Stockholder Designee. The Company will solicit proxies from its stockholders for
such nominees, vote all proxies in favor of such nominees, except for such
proxies that specifically indicate to the contrary, and otherwise use its best
efforts to cause such nominees to be elected to the Board as herein
contemplated. The Company will as promptly as practicable, at the request of
Stockholder, take such corporate action (including, without limitation, (i)
calling a special stockholders meeting, (ii) increasing the size of the Board,
and (iii) filling any vacancy created by such increase in the size of the Board)
in order to have the Board constituted in the manner contemplated by this
Section 2.1.
(c) The Stockholder Designees will be apportioned among the three classes
of directors as equal as possible; provided, however, that in the event that the
number of Stockholder Designees determined pursuant to Section 2.1 is not evenly
divisible by three, such additional Stockholder Designee or Designees shall be
nominated to the class or classes of directors with the longest term of office.
Each Stockholder Designee will serve until his successor is elected and
qualified or until his earlier resignation, retirement, disqualification,
removal from office, or death.
(d) Notwithstanding anything in the Articles of Restatement or bylaws of
the Company to the contrary, if any Stockholder Designee ceases to be a director
of the Company for any reason, the Company will promptly upon the request of
Stockholder cause a person designated by Stockholder to replace such director if
Stockholder is so entitled.
(e) Stockholder agrees to cause a Stockholder Designee to promptly resign
in the event Stockholder's beneficial ownership of Voting Securities declines
such that Stockholder would no longer have the right to designate such person.
(f) From and after the date the stockholders of the Company vote to approve
the amendment of the Company's Articles of Restatement and bylaws to permit an
increase in the size of the Board to more than nine members (the "Stockholder
Approval Date"), the Company will take all actions as may be necessary to
appoint C. Taylor Pickett to the Board. Prior to the Stockholder Approval Date,
the Company covenants that the total number of seats on the Board (including any
vacant seats) will in no event exceed nine unless otherwise requested in writing
by Stockholder or as provided pursuant to the terms of the Series A, B or C
Preferred Stock in effect on the date hereof. After the Stockholder Approval
Date, the Company covenants that the total number of seats on the Board
(including any vacant seats) will in no event exceed ten unless otherwise
requested in writing by Stockholder or as provided pursuant to the terms of the
Series A, B or C Preferred Stock in effect on the date hereof.
(g) Except as may otherwise be required under the rules of The New York
Stock Exchange or the SEC or as may be agreed to by a majority of the
Stockholder Designees, at all times after the date hereof, the Company will take
such action to ensure that the Stockholder Designees are represented on each
committee of the Board in at least the same proportion as their representation
on the entire Board and that each committee will consist of at least three
members, other than any committee comprised solely of Non-Stockholder Designees
established for the purpose of considering transactions in which the Stockholder
or its Affiliates or Associates have an interest different from other
stockholders of the Company.
2.2 Voting for Other Directors. (a) For as long as Stockholder beneficially
owns at least 15.0% of the issued and outstanding Voting Securities on an
as-converted basis, Stockholder will vote all Voting Securities that it
beneficially owns to elect as directors (i) three Independent Directors and (ii)
from and after the date the Board is increased to ten members, one additional
Person who is not an Affiliate or Associate of Stockholder or its Affiliates or
Associates (other than the Company) (such designees, "Non-Stockholder
Designees").
(b) The Company shall use its best efforts to cause the Non-Stockholder
Designees selected in accordance with this Section 2.2 to serve on the Board.
The Company, at each meeting of stockholders of the Company at which directors
are elected or pursuant to which such action is to be taken by written consent,
will nominate for election as directors of the Company such number of
Non-Stockholder Designees such that following such election the Non-Stockholder
Designees who are members of the Board represent the aggregate number of
Non-Stockholder Designees that are to be elected in accordance with this Section
2.2. The Company will solicit proxies from its stockholders for such nominees,
vote all proxies in favor of such nominees, except for such proxies that
specifically indicate to the contrary, and otherwise use its best efforts to
cause such nominees to be elected to the Board as herein contemplated.
Notwithstanding anything in the Articles of Restatement or bylaws of the Company
to the contrary, in the event any Non-Stockholder Designee shall be unable to
serve as a director, a replacement for such director shall be designated in the
same manner as set forth in this Section 2.2.
(c) "Independent Director" shall mean a Person who (i) satisfies the
qualification requirements as an "independent" director and as a member of the
audit committee of the Company under the rules and regulations of The New York
Stock Exchange and (ii) is not an Affiliate of Stockholder.
2.3 Other Voting Rights. Stockholder and the Company agree that under
applicable law, including without limitation Section 2-419 of the MGCL, and
pursuant to the Company's constituent documents, neither the Stockholder nor the
Stockholder Designees would be precluded, and the Company agrees that it will
not assert that the Stockholder or any of the Stockholder Designees is
precluded, from voting with respect to any transaction involving Stockholder
following appropriate disclosure to the then directors of any circumstances that
could provide the basis for an assertion of a conflict of interest.
2.4 Access. The Company will, and will cause its subsidiaries and each of
the Company's and its subsidiaries' officers, directors, employees, agents,
representatives, accountants and counsel to: (a) afford the officers, employees
and authorized agents, accountants, counsel, financing sources and
representatives of Stockholder reasonable access, during normal business hours,
to the offices, properties, other facilities, books and records of the Company
and each subsidiary and to those officers, directors, employees, agents,
accountants and counsel of the Company and of each subsidiary who have any
knowledge relating to the Company or any subsidiary and (b) furnish to the
officers, employees and authorized agents, accountants, counsel, financing
sources and representatives of Stockholder, such additional financial and
operating data and other information regarding the assets, properties and
goodwill of the Company and its subsidiaries (or legible copies thereof) as
Stockholder may from time to time reasonably request (other than information and
material from the Company's counsel which is subject to the attorney/client
privilege, which information and material shall be made available to the
Stockholder Designees in their capacity as members of the Board).
2.5 Restriction on Acquisition of Voting Securities. Except in connection
with the acquisition of Voting Securities in a transaction approved by a
committee of the Board, all of the members of which committee shall consist of
Non-Stockholder Designees, Stockholder will not purchase or otherwise acquire
beneficial ownership of more than 80% of the Voting Securities then issued and
outstanding on an as-converted basis. Notwithstanding the foregoing, Stockholder
shall not be in breach of this Section 2.5 as the result of (i) an acquisition
of Voting Securities by the Company which, by reducing the number of Voting
Securities outstanding, increases the proportionate number of Voting Securities
beneficially owned by Stockholder in excess of 80% of the Voting Securities then
issued and outstanding on an as-converted basis, (ii) the acquisition by
Stockholder of newly issued Voting Securities directly from the Company, or
(iii) any increase in the number of Voting Securities beneficially owned by
Stockholder as a result of the anti-dilution provisions of any Voting
Securities. This Section 2.5 will immediately terminate if a third party
publicly announces an intent to effect a transaction, "commence a tender offer"
(within the meaning of Rule 14d-2 under the Exchange Act), or enter into an
agreement contemplating the acquisition of, 20% or more of the Voting Securities
then issued and outstanding on an as-converted basis.
III. TRANSFER OF SECURITIES
3.1 Transfer of Voting Securities by Stockholder. (a) Stockholder agrees
that Stockholder will not Transfer Voting Securities beneficially owned by it,
the effect of which would cause the transferee to acquire beneficial ownership
of 10% or more of the Voting Securities then-outstanding on an as-converted
basis (other than to any Affiliate of Stockholder), unless, prior to such
Transfer (i) notice of such Transfer is given to the Company and (ii) the Person
to whom such Voting Securities are to be Transferred enters into an Assumption
Agreement.
(b) In the event of any purported Transfer by Stockholder of any Voting
Securities not made in compliance with this Section 3.1, such purported Transfer
will be void and of no effect and the Company will not give effect to such
Transfer. The Company shall be entitled to treat the prior owner as the holder
of any such Securities not Transferred in accordance with this Agreement.
3.2 Legend. Each certificate representing Securities issued to Stockholder
will bear a legend on the face thereof substantially to the following effect
(with such additions thereto or changes therein as the Company may be advised by
counsel are required by law (the "Legend")):
"THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE TRANSFERRED OR
OTHERWISE DISPOSED OF UNLESS THEY HAVE BEEN REGISTERED UNDER THAT ACT OR
ANY OTHER APPLICABLE LAW OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE."
"THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A
SECOND AMENDED AND RESTATED STOCKHOLDERS AGREEMENT, DATED APRIL 30, 2002,
BETWEEN THE COMPANY AND EXPLORER HOLDINGS, L.P., A COPY OF WHICH IS ON FILE
WITH THE SECRETARY OF THE COMPANY. NO TRANSFER, SALE, ASSIGNMENT, PLEDGE,
HYPOTHECATION OR OTHER DISPOSITION OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE MAY BE MADE EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF SUCH
AGREEMENT."
The Legend will be removed by the Company promptly following the delivery
of a legal opinion from counsel to the Stockholder to the effect that such
legend is no longer required for purposes of applicable securities laws. In
connection with the foregoing, the Company agrees that, if the Company is
required to file reports under the Exchange Act, for so long as and to the
extent necessary to permit the Stockholder to sell any Securities pursuant to
Rule 144, the Company will use its reasonable efforts to file, on a timely
basis, all reports required to be filed with the SEC by it pursuant to Section
13 of the Exchange Act, furnish to the Stockholder upon request a written
statement as to whether the Company has complied with such reporting
requirements during the 12 months preceding any proposed sale under Rule 144 and
otherwise use its reasonable efforts to permit such sales pursuant to Rule 144.
3.3 Transfers of Voting Securities by Stockholder. The Company and its
transfer agent may not refuse to Transfer any Voting Securities, passing either
by voluntary Transfer or by operation of law, by Stockholder if such Transfer
(i) complies with Section 3.1 hereof and (ii) would not, in the written opinion
of counsel to Stockholder reasonably acceptable to the Company, disqualify the
Company as a Real Estate Investment Trust under the Internal Revenue Code of
1986, as amended.
3.4 Registration Rights. Upon consummation of any Transfer of Securities
constituting 5% or more of the Securities (other than a Transfer in a Public
Offering or pursuant to Rule 144 under the Securities Act) on an as-converted,
fully diluted basis, the Company will enter into a registration rights agreement
in favor of such transferee substantially in the form of the Registration Rights
Agreement, with such modifications thereto as are acceptable to such transferee
that do not materially increase the Company's obligations thereunder (excluding
the effects of multiple parties); provided, however, that in no event will the
Company be required to grant more than one demand registration right for every
5% of Securities then outstanding involved in such Transfer of Securities.
IV. MISCELLANEOUS
4.1 Termination. (a) The provisions of this Agreement will terminate, and
be of no further force or effect (other than with respect to prior breaches), on
February 20, 2007.
(b) Any portion or all of this Agreement will terminate and be of no
further force and effect upon written agreement of the parties to that effect.
4.2 Specific Performance. The parties agree that any breach by either of
them of any provision of this Agreement would irreparably injure the Company or
the Stockholder, as the case may be, and that money damages would be an
inadequate remedy therefor. Accordingly, the parties agree that the other party
will be entitled to one or more injunctions enjoining any such breach and
requiring specific performance of this Agreement and consent to the entry
thereof, in addition to any other remedy to which such other party is entitled
at law or in equity.
4.3 Notices. All notices, requests and other communications to either party
hereunder will be in writing (including telecopy or similar writing) and will be
given:
If to the Company, to:
---------------------
Omega Healthcare Investors, Inc.
9690 Deereco Road, Suite 100
Timonium, Maryland 21093
Attention: Chief Financial Officer
Fax: (734) 887-0388
with a copy to:
--------------
Powell, Goldstein, Frazer & Murphy LLP
191 Peachtree Street, N.E.
Suite 1600
Atlanta, Georgia 30303
Attention: Rick Miller or
Eliot Robinson
Fax: (404) 572-6999
If to Stockholder, to:
---------------------
Explorer Holdings, L.P.
c/o The Hampstead Group, L.L.C.
4200 Texas Commerce Tower West
2200 Ross Avenue
Dallas, Texas 75801
Attention: Kymberlyn J. Irvin
Fax: (214) 220-4949
with a copy to:
--------------
Jones, Day, Reavis & Pogue
222 East 41st Street
New York, New York 10017
Attention: Thomas W. Bark
Fax: (212) 755-7306
or such other address or telecopier number as such party may hereafter specify
by notice to the other party hereto. Each such notice, request or other
communication shall be effective only when actually delivered at the address
specified in this Section 4.3, if delivered prior to 5:00 (local time) and such
day is a Business Day, and if not, then such notice, request or other
communication shall not be effective until the next succeeding Business Day.
4.4 Amendments: No Waivers. (a) Any provision of this Agreement may be
amended or waived if, and only if, such amendment or waiver is in writing and
signed, in the case of an amendment, by the Company and Stockholder, or in the
case of a waiver, by the party against whom the waiver is to be effective.
(b) No failure or delay by any party in exercising any right, power or
privilege hereunder will operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided will be cumulative and not exclusive of any rights or remedies provided
by law.
4.5 Successors and Assigns. The provisions of this Agreement will be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns, provided, however, that none of the parties may assign,
delegate or otherwise transfer any of their rights or obligations under this
Agreement without the written consent of the other party hereto. Neither this
Agreement nor any provision hereof is intended to confer upon any Person other
than the parties hereto any rights or remedies hereunder.
4.6 Counterparts; Effectiveness. This Agreement may be signed in any number
of counterparts, each of which will be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument. This Agreement
will become effective when each party hereto shall have received a counterpart
hereof signed by the other party hereto.
4.7 Entire Agreement. This Agreement, the Investment Agreement, the
Registration Rights Agreement and the documents contemplated thereby (and all
schedules and exhibits thereto) constitute the entire agreement among the
parties with respect to the subject matter hereof and supersede all prior
agreements, understandings and negotiations, both written and oral, between the
parties with respect thereto.
4.8 Governing Law. This Agreement shall be construed in accordance with and
governed by the laws of the State of Delaware, without giving effect to the
principles of conflict of laws thereof.
4.9 Calculation of Beneficial Ownership. Any provision in this Agreement
that refers to a percentage of Voting Securities shall be calculated based on
the aggregate number of issued and outstanding shares of Common Stock at the
time of such calculation (including any shares of Common Stock that would then
be issuable upon the conversion of the Series C Preferred or any outstanding
convertible security), but shall not include any shares of Common Stock issuable
upon any options, warrants or other securities that are exercisable for Common
Stock.
4.10 Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstances, 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 contained herein shall not be in any way impaired
thereby, it being intended that all of the rights and privileges of the parties
hereto shall be enforceable to the fullest extent permitted by law.
4.11 Jurisdiction; Consent to Service of Process. (a) Each party hereby
irrevocably and unconditionally submits, for itself and its property, to the
exclusive jurisdiction of any state or federal court located in the State of
Delaware (as applicable, a "Delaware Court"), and any appellate court from any
such court, in any suit, action or proceeding arising out of or relating to this
Agreement, or for recognition or enforcement of any judgment resulting from any
such suit, action or proceeding, and each party hereby irrevocably and
unconditionally agrees that all claims in respect of any such suit, action or
proceeding may be heard and determined in the Delaware Court.
(b) It will be a condition precedent to each party's right to bring any
such suit, action or proceeding that such suit, action or proceeding, in the
first instance, be brought in the Delaware Court (unless such suit, action or
proceeding is brought solely to obtain discovery or to enforce a judgment), and
if each such court refuses to accept jurisdiction with respect thereto, such
suit, action or proceeding may be brought in any other court with jurisdiction.
(c) No party may move to (i) transfer any such suit, action or proceeding
from the Delaware Court to another jurisdiction, (ii) consolidate any such suit,
action or proceeding brought in the Delaware Court with a suit, action or
proceeding in another jurisdiction, or (iii) dismiss any such suit, action or
proceeding brought in the Delaware Court for the purpose of bringing the same in
another jurisdiction.
(d) Each party hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, (i) any objection which it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement in the Delaware Court,
(ii) the defense of an inconvenient forum to the maintenance of such suit,
action or proceeding in any such court, and (iii) the right to object, with
respect to such suit, action or proceeding, that such court does not have
jurisdiction over such party. Each party irrevocably consents to service of
process in any manner permitted by law. Notwithstanding the foregoing, this
Section 4.11 will not apply to (x) any suit, action or proceeding by a party
seeking indemnification or contribution pursuant to this Agreement or otherwise
in respect of a suit, action or proceeding against such party by a third party
if such suit, action or proceeding by such party seeking indemnification or
contribution is brought in the same court as the suit, action or proceeding
against such party or (y) any suit, action or proceeding to enforce a judgment
of a Delaware Court.
4.12 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES
ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING, CLAIM OR
COUNTERCLAIM, WHETHER IN CONTRACT OR TORT, AT LAW OR IN EQUITY, ARISING OUT OF
OR IN ANY WAY RELATED TO THIS AGREEMENT.
4.13 No Strict Construction. The parties hereto have participated jointly
in the negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties hereto, and no presumption or burden of
proof shall arise favoring or disfavoring any party by virtue of the authorship
of any of the provisions of this Agreement.
[Signature page follows]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
EXPLORER HOLDINGS, L.P.
By: EXPLORER HOLDINGS GENPAR, L.L.C.,
its General Partner
By: /s/ Kymberlyn J. Irvin
--------------------------
Kymberlyn J. Irvin
Vice President
OMEGA HEALTHCARE INVESTORS, INC.
By: /s/ C. Taylor Pickett
---------------------
C. Taylor Pickett
Chief Executive Officer
EXHIBIT A
Form of Assumption Agreement
The undersigned hereby agrees, effective as of the date hereof, to become a
party to, and be bound by the provisions of, Sections 2.2, 2.5, 3.1 and 3.2 of
that certain Second Amended and Restated Stockholders Agreement (the
"Agreement"), dated as of April 30, 2002, by and between Omega Healthcare
Investors, Inc. and Explorer Holdings, L.P. and for all purposes of such
sections of the Agreement, the undersigned shall be included within the term
"Stockholder" (as defined in the Agreement). The address and facsimile number to
which notices may be sent to the undersigned is as follows:
----------------------------
----------------------------
Facsimile No._______________
[Name]
By: _____________________________
Name:
Title: