OMEGA HEALTHCARE INVESTORS, INC.
900 Victors Way, Suite 350
Ann Arbor, Michigan 48108
May 11, 2000
First Chicago Trust Company
525 Washington Blvd., 3rd Floor
Suite 4660
Jersey City, New Jersey 07310
Attention: Corporate Actions Administrator
Re: Amendment No. 1 to Rights Agreement
Ladies and Gentlemen:
Pursuant to Section 27 of the Rights Agreement (the "Rights
Agreement"), dated as of May 12, 1999, between Omega Healthcare Investors, Inc.
(the "Company"), and First Chicago Trust Company, as rights agent, the Company,
by resolution adopted by its Board of Directors, hereby amends the Rights
Agreement as follows:
1. Section 1 of the Rights Agreement is hereby amended by adding the
following new subsection to Section 1:
"`Investment Agreement' shall mean the Investment Agreement,
dated as of May __, 2000, by and between the Company and
Explorer Holdings, L.P., a Delaware limited partnership
(`Purchaser')."
"`Stockholders Agreement' shall mean the Stockholders
Agreement to be entered into by Purchaser
and the Company pursuant to the Investment Agreement'."
2. Section 1 of the Rights Agreement is hereby amended by adding the
following sentence at the end of the definition of "Acquiring
Person":
"Notwithstanding any other provision hereof, (i) in no event
will Purchaser (together with its successors, assigns and
Permitted Transferees (as defined in the Stockholders
Agreement), and their respective successors, assigns and
Permitted Transferees, `Authorized Holder'), individually or
together with any other Person in which Authorized Holder has,
directly or indirectly, an ownership interest (such other
Persons, `Related Companies'), or any Affiliate, Associate,
director, officer, employer, partner, member or other related
Person of Authorized Holder or a Related Company
(collectively, a `Related Person' and, together with
Authorized Holder and the Related Companies, `Acquiror'), be
deemed to be an "Acquiring Person" for purposes hereof, nor
shall a Distribution Date, a Stock Acquisition Date, a
Triggering Event or any other event hereunder occur as a
result of Acquiror's Beneficial Ownership of Common Stock (any
such event, an `Acquiror Triggering Event') acquired pursuant
to the Investment Agreement and in accordance with the terms
of the Stockholders Agreement and (ii) no Acquiror Triggering
Event will be deemed to have occurred unless and until (A)
Acquiror shall have received written notice from the Company
that, notwithstanding the foregoing, the Board of Directors
has determined that Acquiror constitutes an Acquiring Person
hereunder and, within 30 calendar days after receipt of notice
of such determination from the Company, Acquiror shall not
have divested itself of Common Stock, cured any breach under
the Stockholders Agreement resulting in such Acquiror
Triggering Event or taken such other action as it determines,
after consultation with counsel, is sufficient, so that an
Acquiror Triggering Event is no longer continuing or (B)
during any period of twelve consecutive calendar months
commencing on the date the Permitted Transferee acquired
Beneficial Ownership of Common Stock pursuant to the
Stockholders Agreement, such Permitted Transferee who would be
an Acquiring Person but for the preceding sentence acquired
Beneficial Ownership of more than 2% of the outstanding Common
Stock."
3. Section 1 of the Rights Agreement is hereby amended by adding the
following new sentence at the end of that Section:
"Notwithstanding anything in this Agreement to the contrary,
Acquiror shall not be deemed an Acquiring Person and none of a
Distribution Date, a Stock Acquisition Date, or a Triggering
Event shall be deemed to occur or to have occurred, and the
Rights will not become separable, distributable, unredeemable
or exercisable, in each such case, by reason or as a result of
the approval, execution or delivery of the Investment
Agreement or the consummation of the transactions contemplated
by the Investment Agreement (including, without limitation,
the consummation of the Additional Equity Financing (as
defined in the Investment Agreement))."
4. The Rights Agreement shall not otherwise be supplemented or
amended by virtue of this Amendment No. 1 to the Rights
Agreement, but shall remain in full force and effect.
5. Capitalized terms used without other definition in this Amendment
No. 1 to the Rights Agreement shall be used as defined in the
Rights Agreement.
6. This Amendment No. 1 to the Rights Agreement shall be deemed to
be a contract made under the laws of the State of Maryland and
for all purposes shall be governed by and construed in accordance
with the laws of such State applicable to contracts to be made
and performed entirely within such State, except that those
provisions of this Amendment No. 1 to the Rights Agreement
affecting the rights, duties and responsibility of the Rights
Agent shall be governed by and construed in accordance with the
laws of the State of Illinois.
7. This Amendment No. 1 to the Rights Agreement may be executed in
any number of counterparts and each of such counterparts shall
for all purposes be deemed to be an original, and all such
counterparts shall together constitute but one and the same
instrument.
8. This Amendment No. 1 to the Rights Agreement shall be effective
as of, and immediately prior to, the execution and delivery of
the Investment Agreement, and all references to the Rights
Agreement shall, from and after such time, be deemed to be
references to the Rights Agreement as amended hereby.
9. Exhibits A and B to the Rights Agreement shall be deemed amended
in a manner consistent with this Amendment No. 1 to the Rights
Agreement.
Very truly yours,
OMEGA HEALTHCARE INVESTORS, INC.
By: /s/ Essel W. Bailey, JR.
------------------------
Name: Essel W. Bailey, Jr.
Title: Chief Executive Officer
Accepted and agreed to as of the effective time specified above:
FIRST CHICAGO TRUST COMPANY
By: /s/ Craig Broomfield
--------------------
Name: Craig Broomfield
Title: Senior Account Manager