OMEGA HEALTHCARE INVESTORS, INC.
ARTICLES OF AMENDMENT
OMEGA HEALTHCARE INVESTORS, INC., a Maryland corporation (the "Company"),
having its principal Maryland office at The Corporation Trust Incorporated, 300
East Lombard Street, Suite 1400, Baltimore, Maryland 21202, hereby certifies to
the State Department of Assessments and Taxation of Maryland that:
FIRST: The board of directors of the Company, at a meeting duly convened
and held on October 29, 2001, adopted a resolution in which it was set forth the
foregoing amendment to the charter of the Company (the "Charter"), declaring
that said amendment to the Charter was advisable and directing that it be
submitted for action thereon at a meeting of the stockholders of the Company to
be held on February 18, 2002.
SECOND: Notice setting forth the aforesaid amendment of the Charter and
stating that a purpose of the meeting of the stockholders would be to take
action therein, was given as required by law to all stockholders entitled to
vote thereon. The amendment of the Charter of the Company as hereinabove set
forth was approved by the stockholders of the Company at said meeting by the
affirmative vote required by law and the Charter.
THIRD: The Charter is hereby amended by voiding those portions of the
Charter contained in the Articles Supplementary for Series C Convertible
Preferred Stock, filed with the State Department of Assessments and Taxation of
Maryland on July 13, 2000, in its entirety and inserting in lieu thereof the
following:
OMEGA HEALTHCARE INVESTORS, INC.
ARTICLES SUPPLEMENTARY FOR SERIES C
CONVERTIBLE PREFERRED STOCK
A description of the Series C Preferred Stock is as follows:
1. Designation and Number. A series of Preferred Stock, designated the
"Series C Convertible Preferred Stock" (the "Series C Preferred Stock"), is
hereby established. The number of shares of the Series C Preferred Stock
shall be 2,000,000, subject to increase pursuant to Section 4(b) prior to
payment by the Company of any dividend in shares of Series C Preferred
Stock in accordance with Section 4.
2. Maturity. The Series C Preferred Stock has no stated maturity.
3. Rank. The Series C Preferred Stock will, with respect to dividend
rights and rights upon liquidation, dissolution or winding up of the
Company, rank (i) senior to all classes or series of Common Stock of the
Company, and to all equity securities ranking junior to the Series C
Preferred Stock with respect to dividend rights or rights upon liquidation,
dissolution or winding up of the Company, (ii) on a parity with the Series
A Preferred Stock, Series B Preferred Stock, Series D Preferred Stock and
all other equity securities issued by the Company the terms of which
specifically provide that such equity securities rank on a parity with the
Series C Preferred Stock with respect to dividend rights or rights upon
liquidation, dissolution or winding up of the Company (the "Parity
Preferred"), and (iii) junior to all existing and future indebtedness of
the Company. The term "equity securities" does not include convertible debt
securities, which will rank senior to the Series C Preferred Stock prior to
conversion of such debt securities.
4. Dividends. (a) Except as set forth in Section 4(b), holders of
shares of the Series C Preferred Stock are entitled to receive, out of
funds legally available for the payment of dividends, preferential
cumulative dividends at the greater of (i) 10% per annum of the Liquidation
Preference per share (equivalent to a fixed annual amount of $10.00 per
share) and (ii) the amount per share declared or paid or set aside for
payment based on the number of shares of Common Stock into which such
shares of Series C Preferred Stock are then convertible in accordance with
Section 8. Dividends on each share of the Series C Preferred Stock shall be
cumulative commencing from the date of issuance of such share of Series C
Preferred Stock and shall be payable in arrears for each period ended July
31, October 31, January 31 and April 30 (each a "Dividend Period") on or
before the 15th day of August, November, February and May of each year, or,
if not a Business Day, the next succeeding Business Day (each, a "Dividend
Payment Date"). The first dividend will be paid on November 15, 2000, with
respect to the period commencing on the date of first issuance of Series C
Preferred Stock (the "Issue Date") and ending on October 31, 2000. Any
dividend payable on shares of the Series C Preferred Stock for any partial
period will be computed based on the actual number of days elapsed
(commencing with and including the date of issuance of such shares) and on
the basis of a 360-day year consisting of twelve 30-day months. Dividends
will be payable to holders of record as they appear in the stock records of
the Company at the close of business on the applicable record date, which
shall be the last day of the preceding calendar month prior to the
applicable Dividend Payment Date or on such other date designated by the
Board of Directors of the Company (the "Board") that is not more than 30
nor less than 10 days prior to such Dividend Payment Date (each, a
"Dividend Record Date").
(b) For any Dividend Period ending prior to February 1, 2001,
dividends will be payable, at the election of the Board, (i) by the
issuance as of the relevant Dividend Payment Date of additional shares of
fully paid, nonassessable Series C Preferred Stock having an aggregate
liquidation preference equal to the amount of such accrued dividends or
(ii) in cash. In the event that dividends are declared and paid pursuant to
clause (i), (A) such dividends will be deemed paid in full and will not
accumulate and (B) prior to paying any such dividends, the Board will take
such action as is necessary to increase the number of authorized shares of
Series C Preferred Stock by the number of shares to be issued pursuant to
this Section 4, including but not limited to the filing of Articles
Supplementary with the State Department of Assessments and Taxation of
Maryland in accordance with Article VII of the Charter. The Company will
deliver certificates representing shares of Series C Preferred Stock issued
pursuant to this Section 4(b) promptly after the relevant Dividend Payment
Date. For any Dividend Period ending after February 1, 2001, dividends will
be payable in cash.
(c) No dividends on shares of Series C Preferred Stock shall be
declared by the Board or paid or set apart for payment by the Company at
such time as the terms and provisions of any agreement of the Company,
including any agreement relating to its indebtedness, prohibits such
declaration, payment or setting apart for payment or provides that such
declaration, payment or setting apart for payment would constitute a breach
thereof or a default thereunder, or if such declaration or payment shall be
restricted or prohibited by law.
(d) Notwithstanding the foregoing, dividends on the Series C Preferred
Stock will accrue whether or not the Company has earnings, whether or not
there are funds legally available for the payment of such dividends and
whether or not such dividends are declared. Accrued but unpaid dividends on
the Series C Preferred Stock will not bear interest and holders of the
Series C Preferred Stock will not be entitled to any distributions in
excess of full cumulative distributions described above. Except as set
forth in the next sentence, no dividends will be declared or paid or set
apart for payment on any capital stock of the Company or any other series
of Preferred Stock ranking, as to dividends, on a parity with or junior to
the Series C Preferred Stock (other than a dividend in shares of the
Company's Common Stock or in shares of any other class of stock ranking
junior to the Series C Preferred Stock as to dividends and upon
liquidation) for any period unless full cumulative dividends have been or
contemporaneously are declared and paid or declared and a sum sufficient
for the payment thereof is set apart for such payment on the Series C
Preferred Stock for all past dividend periods and the then current dividend
period. When dividends are not paid in full (or a sum sufficient for such
full payment is not so set apart) upon the Series C Preferred Stock and the
shares of any other series of Preferred Stock ranking on a parity as to
dividends with the Series C Preferred Stock, all dividends declared upon
the Series C Preferred Stock and any other series of Preferred Stock
ranking on a parity as to dividends with the Series C Preferred Stock shall
be declared pro rata so that the amount of dividends declared per share of
Series C Preferred Stock and such other series of Preferred Stock shall in
all cases bear to each other the same ratio that accrued dividends per
share on the Series C Preferred Stock and such other series of Preferred
Stock (which shall not include any accrual in respect of unpaid dividends
for prior dividend periods if such Preferred Stock does not have a
cumulative dividend) bear to each other.
(e) Except as provided in the immediately preceding paragraph, unless
full cumulative dividends on the Series C Preferred Stock have been or
contemporaneously are declared and paid or declared and a sum sufficient
for the payment thereof is set apart for payment for all past dividend
periods and the then current dividend period, no dividends (other than in
shares of Common Stock or other shares of capital stock ranking junior to
the Series C Preferred Stock as to dividends and upon liquidation) shall be
declared or paid or set aside for payment nor shall any other distribution
be declared or made upon the Common Stock, or any other capital stock of
the Company ranking junior to or on a parity with the Series C Preferred
Stock as to dividends or upon liquidation, nor shall any shares of Common
Stock, or any other shares of capital stock of the Company ranking junior
to or on a parity with the Series C Preferred Stock as to dividends or upon
liquidation be redeemed, purchased or otherwise acquired for any
consideration (or any moneys be paid to or made available for a sinking
fund for the redemption of any such shares) by the Company (except by
conversion into or exchange for other capital stock of the Company ranking
junior to the Series C Preferred Stock as to dividends and upon liquidation
or redemption or for the purpose of preserving the Company's qualification
as a real estate investment trust under the Internal Revenue Code of 1986,
as amended (the "Code")). Holders of shares of the ---- Series C Preferred
Stock shall not be entitled to any dividend, whether payable in cash,
property or stock, in excess of full cumulative dividends on the Series C
Preferred Stock as provided above. Any dividend payment made on shares of
the Series C Preferred Stock shall first be credited against the earliest
accrued but unpaid dividend due with respect to such shares which remains
payable.
5. Liquidation Preference. Upon any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the Company, each
holder of shares of Series C Preferred Stock shall, at the election of such
holder, be entitled to be paid out of the assets of the Company legally
available for distribution to its shareholders the Liquidation Preference
(as defined in Section 10(e)) before any distribution of assets is made to
holders of Common Stock or any other class or series of capital stock of
the Company that ranks junior to the Series C Preferred Stock as to
liquidation rights. The Company will promptly provide to the holders of
Series C Preferred Stock written notice of any event triggering the right
to receive such Liquidation Preference. After payment of the full amount of
the Liquidation Preference, plus any accrued and unpaid dividends to which
they are entitled, the holders of Series C Preferred Stock will have no
right or claim to any of the remaining assets of the Company. A Change in
Control (as defined in Section 10(b)), or the sale, lease or conveyance of
all or substantially all of the property, business or assets of the Company
shall be deemed to constitute a liquidation, dissolution or winding up of
the Company for purposes of Section 5 of these Articles Supplementary only
and shall not be deemed a liquidation, dissolution or winding up of the
Company for any other series of Preferred Stock unless the terms of such
series of Preferred Stock expressly provide.
In determining whether a distribution (other than upon voluntary or
involuntary liquidation) by dividend, redemption or other acquisition of
shares of stock of the Company or otherwise is permitted under the Maryland
General Corporation Law (the "MGCL"), no effect shall be given to amounts
that would be needed if the Company would be dissolved at the time of the
distribution, to satisfy the preferential rights upon distribution of
holders of shares of stock of the Company whose preferential rights upon
distribution are superior to those receiving the distribution.
6. Redemption. The Series C Preferred Stock is not redeemable without
the consent of the holder of such share of Series C Preferred Stock.
7. Voting Rights. (a) Holders of the Series C Preferred Stock will not
have any voting rights, except as set forth below.
(b) Each holder of shares of Series C Preferred Stock shall be
entitled to notice of any stockholder meeting in accordance with the bylaws
of the Company (the "Bylaws"), shall be entitled to a number of votes equal
to the number of shares of Common Stock into which the shares of Series C
Preferred Stock held by such holder could then be converted pursuant to
Section 8, shall have voting rights and powers equal to the voting rights
and powers of the holders of Common Stock, and shall vote together as a
single class with holders of Common Stock, except as expressly required by
law. Fractional votes shall not be permitted, and any fractional voting
rights resulting from the right of any holder of Series C Preferred Stock
to vote on an as converted basis (after aggregating the shares into which
all shares of Series C Preferred Stock held such holder could be converted)
shall be rounded to the nearest whole number (with one-half being rounded
upward). The holders of Series C Preferred Stock shall have no separate
class or series vote on any matter except as expressly required by law or
as otherwise set forth in these Articles Supplementary.
(c) Whenever dividends on any shares of Series C Preferred Stock shall
be in arrears for four or more Dividend Periods (a "Preferred Dividend
Default"), the number of directors then constituting the Board shall be
increased by two (if not already increased by reason of a similar arrearage
with respect to the Series D Preferred Stock). The holders of such shares
of Series C Preferred Stock and the holders of Series D Preferred Stock
upon which like voting rights have been conferred and are exercisable
(voting together as a single class) will be entitled to fill the vacancies
thereby created by the addition of such number of directors of the Company
determined pursuant to the first sentence of this Section 7(c) (the
"Additional Series C/D Preferred Stock Directors") at a special meeting
called by the holders of record of at least 20% of the Series C Preferred
Stock or the holders of record of at least 20% of the Series D Preferred
Stock until all dividends accumulated on such shares of Series C Preferred
Stock and Series D Preferred Stock for the past dividend periods and the
dividend for the then current dividend period shall have been fully paid or
declared and a sum sufficient for the payment thereof set aside. In any
vote to elect or remove additional directors pursuant to this Section 7,
each such holder of shares of Series C Preferred Stock and Series D
Preferred Stock entitled to vote will be entitled to one vote for each
share held by such holder. In the event the directors of the Company are
divided into classes, each such vacancy shall be apportioned among the
classes of directors to prevent stacking in any one class and to ensure
that the number of directors in each of the classes of directors are as
equal as possible. Each Additional Series C/D Preferred Stock Director, as
a qualification for election as such (and regardless of how elected), shall
submit to the Board a duly executed, valid, binding and enforceable letter
of resignation from the Board, to be effective upon the date upon which all
dividends accumulated on such shares of Series C Preferred Stock and Series
D Preferred Stock for the past dividend periods and the dividend for the
then current dividend period shall have been fully paid or declared and a
sum sufficient for the payment thereof set aside for payment, whereupon the
terms of office of all persons elected as Additional Series C/D Preferred
Stock Directors by the holders of such shares of Series C Preferred Stock
and Series D Preferred Stock shall, upon the effectiveness of their
respective letters of resignation, forthwith terminate, and the number of
directors then constituting the Board shall be reduced accordingly. A
quorum for any such meeting shall exist if the holders of at least a
majority of the outstanding shares of Series C Preferred Stock and Series D
Preferred Stock so entitled to vote are represented in person or by proxy
at such meeting. Such Additional Series C/D Preferred Stock Directors shall
be elected upon the affirmative vote of a plurality (based on the number of
votes entitled to be cast) of the shares of Series C Preferred Stock and
Series D Preferred Stock so entitled to vote that are present and voting in
person or by proxy at a duly called and held meeting at which a quorum is
present. If and when all accumulated dividends and the dividend for the
then current dividend period on such shares of Series C Preferred Stock and
Series D Preferred Stock shall have been paid in full or declared and a sum
sufficient for the payment thereof in full shall have been set aside, the
holders thereof shall be divested of the foregoing voting rights (subject
to revesting in the event of each and every Preferred Dividend Default) and
the term of office of each Additional Series C/D Preferred Stock Director
so elected shall terminate. Any Additional Series C/D Preferred Stock
Director may be removed at any time with or without cause by, and shall not
be removed otherwise than by the vote of, the holders of record of a
majority of the outstanding shares of the Series C Preferred Stock and
Series D Preferred Stock entitled to vote (voting together as a single
class). So long as a Preferred Dividend Default shall continue, any vacancy
in the office of an Additional Series C/D Preferred Stock Director may be
filled by written consent of the Additional Series C/D Preferred Stock
Directors remaining in office, or if none remains in office, by a vote of
the holders of record of a majority of the outstanding shares of Series C
Preferred Stock and Series D Preferred Stock so entitled to vote (voting
together as a single class). The Additional Series C/D Preferred Stock
Directors shall each be entitled to one vote per director on any matter.
(d) Explorer Holdings, L.P. ("Explorer") hereby waives, for the period
from the date hereof through and including December 31, 2002 (the
"Governance Right Deferral Period"), its rights under Section 7(c) of these
Articles Supplementary to elect Additional Series C/D Preferred Stock
Directors, provided that the dividends on any shares of Series C Preferred
Stock shall not be in arrears for six or more Dividend Periods during the
Governance Right Deferral Period. For the avoidance of doubt, if (i) at any
time during the Governance Right Deferral Period the holders of any Parity
Preferred shall be entitled to elect Additional Preferred Stock Directors
then Explorer shall be entitled to simultaneously exercise its rights under
Section 7(c) of these Articles Supplementary and (ii) on or after January
1, 2003 the dividends on any shares of Series C Preferred Stock shall then
be in arrears for four or more Dividend Periods (including any Dividend
Periods prior to January 1, 2003), the holders of the Series C Preferred
Stock shall be entitled to elect Additional Series C/D Preferred Stock
Directors in accordance with the provisions of Section 7(c) of these
Articles Supplementary.
(e) So long as any shares of Series C Preferred Stock remain
outstanding, the Company will not, without the affirmative vote or consent
of the holders of at least two-thirds of the shares of the Series C
Preferred Stock outstanding at the time, given in person or by proxy,
either in writing or at a meeting (voting together with any other classes
of Preferred Stock adversely affected in the same manner as a single
class), amend, alter or repeal the provisions of the Charter or the
Articles Supplementary, whether by merger, consolidation or otherwise (an
"Event"), so as to materially and adversely affect any right, preference,
privilege or voting power of the Series C Preferred Stock or the holders
thereof, including without limitation, the creation of any series of
Preferred Stock ranking senior to the Series C Preferred Stock with respect
to payment of dividends or the distribution of assets upon liquidation,
dissolution or winding up, but not including the creation or issuance of
Parity Preferred.
(f) Except as expressly stated in these Articles Supplementary, the
Series C Preferred Stock shall not have any relative, participating,
optional or other special voting rights and powers and the consent of the
holders thereof shall not be required for the taking of any corporate
action, including but not limited to, any merger or consolidation involving
the Company or a sale of all or substantially all of the assets of the
Company, irrespective of the effect that such merger, consolidation or sale
may have upon the rights, preferences or voting power of the holders of the
Series C Preferred Stock.
8. Conversion. The holders of Series C Preferred Stock shall have the
following conversion rights with respect to such shares:
8.1 Optional Conversion. Each share of Series C Preferred Stock
(including all accrued and unpaid dividends thereon, to the extent
declared) may be converted, at any time at the option of the holder
thereof, into fully paid and nonassessable shares of Common Stock (and any
other securities or property expressly provided in this Section 8) as set
forth in this Section 8.
8.2 Conversion Price. Each share of Series C Preferred Stock may be
converted into such number of shares of Common Stock as is equal to the
quotient obtained by dividing the Original Issue Price for such share by
the Conversion Price (as defined below) in effect at the time of
conversion. The Conversion Price initially shall be equal to $6.25 per
share of Common Stock, subject to adjustment from time to time as provided
herein (the "Conversion Price").
8.3 Mechanics of Conversion. A holder of Series C Preferred Stock who
desires to convert the same into Common Stock shall surrender the
certificate or certificates representing such shares, duly endorsed, at the
office of the Company or at the office of any transfer agent for the Series
C Preferred Stock or Common Stock, and shall give written notice to the
Company at such office that such holder elects to convert the same and
shall state therein both the number of shares of Series C Preferred Stock
being converted and the name or names in which the holder wishes the
certificate or certificates for Common Stock to be issued. The Company
shall, as soon as practicable after such surrender, issue and deliver at
such office to such holder a certificate or certificates representing the
number of shares of Common Stock to which such holder is entitled and a new
certificate or certificates representing the number of shares of Series C
Preferred Stock represented by the certificate or certificates surrendered
by the holder minus the number of Series C Preferred Stock so converted by
the holder. Such conversion shall be deemed to have been made immediately
prior to the close of business on the date of such surrender of the
certificate representing the Series C Preferred Stock to be converted, and
the Person entitled to receive the Common Stock issuable upon such
conversion shall be treated for all purposes as the record holder of such
Common Stock on such date. Any Series C Preferred Stock converted into
Common Stock shall be retired and may not be reissued by the Company.
8.4 Adjustment for Stock Splits and Combinations. If the Company at
any time or from time to time after the Issue Date effects a subdivision of
the outstanding Common Stock, the Conversion Price then in effect
immediately before that subdivision shall be proportionately decreased, and
conversely, if the Company at any time or from time to time after the Issue
Date combines the outstanding Common Stock into a smaller number of shares,
the Conversion Price then in effect immediately before the combination
shall be proportionately increased. Any adjustment under this Section 8.4
shall become effective at the close of business on the date such
subdivision or combination becomes effective.
8.5 Adjustment for Certain Dividends and Distributions. If the Company
at any time or from time to time after the Issue Date makes, or fixes a
record date for the determination of holders of Common Stock entitled to
receive, a dividend or other distribution payable in additional Common
Stock, then and in each such event the Conversion Price then in effect
shall be decreased as of the time of such issuance or, in the event such
record date is fixed, as of the close of business on such record date, by
multiplying the Conversion Price then in effect by a fraction (1) the
numerator of which is the total number of shares of Common Stock issued and
outstanding immediately prior to the time of such issuance or the close of
business on such record date, and (2) the denominator of which shall be the
total number of shares of Common Stock issued and outstanding immediately
prior to the time of such issuance or the close of business on such record
date plus the number of shares of Common Stock issuable in payment of such
dividend or distribution; provided, however, that if such record date is
fixed and such dividend is not fully paid or if such distribution is not
fully made on the date fixed therefor, the Conversion Price shall be
recomputed accordingly as of the close of business on such record date and
thereafter the Conversion Price shall be adjusted pursuant to this Section
8.5 as of the time of actual payment of such dividends or distributions.
8.6 Adjustments for Other Dividends and Distributions. In the event
the Company at any time or from time to time after the Issue Date makes, or
fixes a record date for the determination of holders of Common Stock
entitled to receive, a dividend or other distribution payable in securities
of the Company other than Common Stock or other assets or property of the
Company (other than ordinary cash dividends, any special dividends
necessary to preserve the Company's qualification as a REIT and the
dividend payable pursuant to the Rights Offering), then and in each such
event provision shall be made so that the holders of Series C Preferred
Stock shall receive upon conversion thereof, in addition to the number of
shares of Common Stock receivable thereupon, the amount of securities of
the Company or other assets or property of the Company which they would
have received had their Series C Preferred Stock been converted into Common
Stock on the date of such event and had they thereafter, during the period
from the date of such event to and including the conversion date, retained
such securities or other assets or property of the Company receivable by
them as aforesaid during such period, subject to all other adjustments
called for during such period under this Section 8 with respect to the
rights of the holders of the Series C Preferred Stock.
8.7 Adjustment for Reclassification, Exchange and Substitution. In the
event that at any time or from time to time after the Issue Date, the
Common Stock or other securities as provided herein issuable upon the
conversion of the Series C Preferred Stock are changed into the same or a
different number of shares of any class or classes of stock, whether by
recapitalization, reclassification or otherwise (other than a subdivision
or combination of shares or stock dividend or a reorganization, merger,
consolidation or sale of assets, provided for elsewhere in this Section 8),
then and in any such event each holder of Series C Preferred Stock shall
have the right thereafter to convert such Series C Preferred Stock into the
kind and amount of stock and other securities and property receivable upon
such recapitalization, reclassification or other change, by holders of
Common Stock or other securities as provided herein into which such shares
of Series C Preferred Stock could have been converted immediately prior to
such recapitalization, reclassification or change, all subject to further
adjustment as provided herein.
8.8 Reorganizations, Mergers, Consolidations or Transfers of Assets.
If at any time or from time to time after the Issue Date there is a capital
reorganization of the Common Stock or other securities issuable upon
conversion of Series C Preferred Stock as provided herein (other than a
recapitalization, subdivision, combination, reclassification or exchange of
shares provided for elsewhere in this Section 8) or a merger or
consolidation or statutory binding share exchange of the Company with or
into another Person, or the transfer of all or substantially all of the
Company's properties and assets to any other Person and such capital
reorganization, merger, consolidation or transfer does not constitute a
Change in Control, then, as a part of such capital reorganization, merger,
consolidation, exchange or transfer, provision shall be made so that the
holders of the Series C Preferred Stock shall thereafter be entitled to
receive upon conversion of Series C Preferred Stock the number of shares of
stock or other securities, cash or property to which a holder of the number
of shares of Common Stock or other securities deliverable upon conversion
of the Series C Preferred Stock would have been entitled on such capital
reorganization, merger, consolidation, exchange or transfer. In any such
case, appropriate adjustment shall be made in the application of the
provisions of this Section 8 with respect to the rights of the holders of
the Series C Preferred Stock after the capital reorganization, merger,
consolidation, exchange or transfer to the end that the provisions of this
Section 8 (including adjustment of the Conversion Price then in effect and
the number of shares receivable upon conversion of the Series C Preferred
Stock) shall be applicable after that event and be as nearly equivalent as
may be practicable.
8.9 Sale of Shares Below Fair Market Value. (a) If at any time or from
time to time after the Issue Date, the Company issues or sells, or is
deemed by the express provisions of this Section 8.9 to have issued or
sold, Additional Common Stock (as defined below), other than as a dividend
or other distribution on any class of stock as provided in Section 8.5
above and other than upon a subdivision or combination of Common Stock as
provided in Section 8.4 above, for an Effective Price (as defined below)
less than the Fair Market Value, then and in each such case the then
existing Conversion Price shall be reduced, as of the opening of business
on the date of such issue or sale, to a price determined by multiplying
that Conversion Price by a fraction (i) the numerator of which shall be
equal to the sum of (A) the number of shares of Common Stock issued and
outstanding at the close of business on the Business Day immediately
preceding the date of such issue or sale, (B) the number of shares of
Common Stock which the aggregate consideration received (or by the express
provisions hereof is deemed to have been received) by the Company for the
total number of shares of Additional Common Stock so issued or sold would
purchase at such Fair Market Value, (C) the number of shares of Common
Stock into which all outstanding Series C Preferred Stock and Series D
Preferred Stock would be convertible at the close of business on the
Business Day immediately preceding the date of such issuance or sale
(whether or not the Series D Preferred Stock is then convertible), and (D)
the number of shares of Common Stock underlying all Convertible Securities
(as defined below) at the close of business on the Business Day immediately
preceding the date of such issuance or sale, and (ii) the denominator of
which shall be equal to the sum of (A) the number of shares of Common Stock
issued and outstanding at the close of business on the date of such
issuance or sale after giving effect to such issuance or sale of Additional
Common Stock, (B) the number of shares of Common Stock into which all
outstanding Series C Preferred Stock and Series D Preferred Stock would be
convertible at the close of business on the Business Day immediately
preceding the date of such issuance or sale (whether or not the Series D
Preferred Stock is then convertible), and (C) the number of shares of
Common Stock underlying all Convertible Securities at the close of business
on the Business Day immediately preceding the date of such issuance or
sale.
(b) For the purpose of making any adjustment required under this
Section 8.9, the consideration for any issuance or sale of securities shall
be deemed to be (A) to the extent it consists of cash, equal to the gross
amount paid in such issuance or sale, (B) to the extent it consists of
property other than cash, equal to the Fair Market Value of that property,
and (C) if Additional Common Stock, Convertible Securities (as defined
below) or rights or options to purchase either Additional Common Stock or
Convertible Securities are issued or sold together with other stock,
securities or assets of the Company for a consideration which covers both,
that portion of the consideration so received that is determined in good
faith by the Board to be allocable to such Additional Common Stock,
Convertible Securities or rights or options.
(c) For the purpose of the adjustment required under this Section 8.9,
if the Company issues or sells any rights or options for the purchase of,
or stock or other securities convertible into or exchangeable or
exercisable for, Additional Common Stock (such convertible or exchangeable
or exercisable stock or securities being hereinafter referred to as
"Convertible Securities") and if the Effective Price of such Additional
Common Stock is less than the Fair Market Value, then in each case the
Company shall be deemed to have (i) issued at the time of the issuance of
such rights or options or Convertible Securities the number of shares of
Additional Common Stock issuable upon exercise, conversion or exchange
thereof irrespective of whether the holders thereof have the fully vested
legal right to exercise, convert or exchange the Convertible Securities for
Additional Common Stock and (ii) received as consideration for the issuance
of such Additional Common Stock an amount equal to the total amount of the
consideration, if any, received by the Company for the issuance of such
rights or options or Convertible Securities, plus, in the case of such
rights or options, the consideration, if any, payable to the Company upon
the exercise of such rights or options, plus, in the case of Convertible
Securities, the consideration, if any, payable to the Company (other than
by cancellation of liabilities or obligations evidenced by such Convertible
Securities) upon the exercise, conversion or exchange thereof. No further
adjustment of the Conversion Price, as adjusted upon the issuance of such
rights, options or Convertible Securities, shall be made as a result of the
actual issuance of Additional Common Stock on the exercise of any such
rights or options or the conversion or exchange of any such Convertible
Securities. If any such rights or options or the conversion or exchange
privilege represented by any such Convertible Securities shall expire
without having been exercised, the Conversion Price as adjusted upon the
issuance of such rights, options or Convertible Securities shall be
readjusted to the Conversion Price which would have been in effect had an
adjustment been made on the basis that the only shares of Additional Common
Stock so issued were the shares of Additional Common Stock, if any,
actually issued or sold on the exercise of such rights or options or rights
of conversion or exchange of such Convertible Securities, and such shares
of Additional Common Stock, if any, were issued or sold for the
consideration actually received by the Company upon such exercise, plus the
consideration, if any, actually received by the Company for the granting of
the rights or options whether or not exercised, plus the consideration
received for issuing or selling the Convertible Securities actually
converted or exchanged, plus the consideration, if any, actually received
by the Company (other than by cancellation of liabilities or obligations
evidenced by such Convertible Securities) on the conversion or exchange of
such Convertible Securities.
(d) "Additional Common Stock" shall mean all Common Stock issued or
issuable by the Company after the Issue Date, whether or not subsequently
reacquired or retired by the Company, other than (i) Common Stock issued or
issuable upon conversion of, or as a dividend on, any Series C Preferred
Stock or Series D Preferred Stock, (ii) Common Stock issued or issuable
pursuant to any employee benefit plan or similar plan or arrangement
intended to provide compensation and other benefits to officers, directors,
employees and consultants of the Company provided that such plans and any
grants or awards thereunder have been approved by the Board or a committee
thereof, (iii) securities issued by the Company in payment of a purchase
price to the seller or any Person who beneficially owns equity securities
of such seller for any acquisition of assets or a business, which
acquisition is approved by the Board, or (iv) Common Stock issued or
issuable pursuant to the Rights Offering, the Investment Agreement or upon
issuance or conversion of the Series D Preferred Stock. The "Effective
Price" of Additional Common Stock shall mean the quotient determined by
dividing the total number of shares of Additional Common Stock issued or
sold, or deemed to have been issued or sold by the Company, by the
aggregate consideration received, or deemed to have been received, by the
Company for such Additional Common Stock. The share numbers in this Section
8.9(d) shall be appropriately adjusted for any stock dividends,
combinations, splits, reverse splits, recapitalizations and similar events
affecting the securities of the Company.
8.10 Certificate of Adjustment. In each case of an adjustment or
readjustment of the Conversion Price or the number of shares of Common
Stock or other securities issuable upon conversion of the Series C
Preferred Stock, the Company, at its expense, shall cause the Chief
Financial Officer of the Company to compute such adjustment or readjustment
in accordance with the provisions hereof and prepare a certificate showing
such adjustment or readjustment, and shall mail such certificate, by first
class mail, postage prepaid, to each registered holder of the Series C
Preferred Stock at the holder's address as shown in the Company's books.
The certificate shall set forth such adjustment or readjustment, showing in
detail the facts upon which such adjustment or readjustment is based,
including a statement of (1) the consideration received or deemed to be
received by the Company for any Additional Common Stock issued or sold or
deemed to have been issued or sold, (2) the Conversion Price in effect
immediately prior to the occurrence of the event giving rise to such
adjustment, (3) the number of shares of Additional Common Stock, and (4)
the type and amount, if any, of other property which at the time would be
received upon conversion of the Series C Preferred Stock.
8.11 Notices of Record Date. In the event of (i) any taking by the
Company of a record of the holders of any class of securities for the
purpose of determining the holders thereof who are entitled to receive any
dividend or other distribution or (ii) any capital reorganization of the
Company, any reclassification or recapitalization of the capital stock of
the Company, any merger or consolidation of the Company with or into any
other entity, or any transfer of all or substantially all of the assets of
the Company to any other person or any voluntary or involuntary
dissolution, liquidation or winding up of the Company, the Company shall
mail to each holder of Series C Preferred Stock at least ten days prior to
the record date specified therein, a notice specifying (1) the date on
which any such record is to be taken for the purpose of such dividend or
distribution and a description of such dividend or distribution, (2) the
date on which any such reorganization, reclassification, transfer,
consolidation, merger, dissolution, liquidation or winding up is expected
to become effective, and (3) the date, if any, that is to be fixed, as to
when the holders of record of Common Stock (or other securities) shall be
entitled to exchange their Common Stock (or other securities) for
securities or other property deliverable upon such reorganization,
reclassification, transfer, consolidation, merger, dissolution, liquidation
or winding up.
8.12 Fractional Shares. No fractional shares of Common Stock shall be
issued upon conversion of Series C Preferred Stock. In lieu of any
fractional share to which the holder would otherwise be entitled
(calculated based on the aggregate number of shares of Common Stock to
which such holder is entitled upon such conversion), the Company shall pay
cash equal to the product of such fraction multiplied by the Fair Market
Value of one share of Common Stock on the date of conversion.
8.13 Reservation of Stock Issuable Upon Conversion. The Company shall
at all times reserve and keep available out of its authorized but unissued
Common Stock, solely for the purpose of effecting the conversion of the
Series C Preferred Stock, such number of shares of its Common Stock and
other securities, if any, issuable upon conversion thereof as expressly
provided in Section 8 as shall from time to time be sufficient to effect
the conversion of all outstanding Series C Preferred Stock.
8.14 Notices. Any notice required or permitted by this Section 8 to be
given to a holder of Series C Preferred Stock or to the Company shall be in
writing and be deemed given upon the earlier of actual receipt or five days
after the same has been deposited in the United States mail, by certified
or registered mail, return receipt requested, postage prepaid, and
addressed (i) to each holder of record at the address of such holder
appearing on the books of the Company, or (ii) to the Company at its
registered office, or (iii) to the Company or any holder, at any other
address specified in a written notice given to the other for the giving of
notice.
8.15 Payment of Taxes. The Company will pay all taxes (other than
taxes based upon income) and other governmental charges that may be imposed
with respect to the issue and delivery of Common Stock upon conversion of
Series C Preferred Stock, including without limitation any tax or other
charge imposed in connection with the issue and delivery of Common Stock or
other securities, if any, issuable upon conversion thereof as expressly
provided in Section 8 in a name other than that in which the Series C
Preferred Stock so converted were registered.
8.16 Cancellation of Shares. Any shares of Series C Preferred Stock
which are converted in accordance with Section 8 or which are redeemed,
repurchased or otherwise acquired by the Company, shall be canceled and
added to the authorized but undesignated Preferred Stock of the Company but
shall not be reissued as Series C Preferred Stock.
9. Restrictions on Ownership and Transfer. Once there is a completed
public offering of the Series C Preferred Stock, if the Board shall, at any
time and in good faith, be of the opinion that actual or constructive
ownership of at least 9.9% or more of the value of the outstanding capital
stock of the Company has or may become concentrated in the hands of one
owner (other than Explorer Holdings, L.P. and its direct and indirect
equity owners), the Board shall have the power (i) by means deemed
equitable by the Board, and pursuant to written notice, to call for the
purchase from any shareholder of the corporation a number of shares of
Series C Preferred Stock sufficient, in the opinion of the Board, to
maintain or bring the direct or indirect ownership of such beneficial owner
to no more than 9.9% of the value of the outstanding capital stock of the
corporation, and (ii) to refuse to transfer or issue shares of Series C
Preferred Stock to any person whose acquisition of such Series C Preferred
Stock would, in the opinion of the Board, result in the direct or indirect
ownership by that person of more than 9.9% of the value of the outstanding
capital stock of the Company. The purchase price for any shares of Series C
Preferred Stock shall be equal to the fair market value of the shares
reflected in the closing sales price for the shares, if then listed on a
national securities exchange, or if the shares are not then listed on a
national securities exchange, the purchase price shall be equal to the
Liquidation Preference of such shares of Series C Preferred Stock. Payment
of the purchase price shall be made within thirty days following the date
set forth in the notice of call for purchase, and shall be made in such
manner as may be determined by the Board. From and after the date fixed for
purchase by the Board, as set forth in the notice, the holder of any shares
so called for purchase shall cease to be entitled to distributions and
other benefits with respect to such shares, excepting only the right to
payment of the purchase price fixed as aforesaid. Any transfer of Series C
Preferred Stock that would create an actual or constructive owner of more
than 9.9% of the value of the outstanding shares of capital stock of this
Company shall be deemed void ab initio and the intended transferee shall be
deemed never to have had an interest therein. If the foregoing provision is
determined to be void or invalid by virtue of any legal decision, statute,
rule or regulation, then the transferee of such Series C Preferred Stock
shall be deemed, at the option of the Company, to have acted as agent on
behalf of the Company in acquiring such shares and to hold such shares on
behalf of the Company.
Notwithstanding anything herein to the contrary, nothing herein shall
authorize the Company or its transfer agent to refuse to transfer any
shares of Series C Preferred Stock, passing either by voluntary transfer,
by operation of law, or under the last will and testament of any
shareholder, if such transfer would not, in the written opinion of counsel
to the transferor reasonably acceptable to the Company, disqualify the
Company as a Real Estate Investment Trust under the Code. Nothing herein
contained shall limit the ability of the Company to impose or to seek
judicial or other imposition of additional restrictions if deemed necessary
or advisable to preserve the Company's tax status as a qualified Real
Estate Investment Trust.
10. Certain Defined Terms. In addition to the terms defined elsewhere
in these Articles Supplementary or the Charter, the following terms will
have the following meanings when used herein with initial capital letters:
(a) "Business Day" means any day (other than a day which is a
Saturday, Sunday or legal holiday in New York City, or any day on which
banks in New York City are authorized by law to close).
(b) "Change in Control" means the occurrence of any of the following
in one or a series of related transactions: (A) any consolidation, merger,
reorganization, share exchange or other form of business combination
transaction involving the Company in which the holders of the Company's
Voting Stock immediately before such transaction do not, immediately after
such transaction, retain Voting Stock representing a majority of the voting
power of the acquiring entity, the Company or the entity surviving such
transaction or (B) the sale, transfer or assignment of Voting Stock of the
Company representing a majority of the voting power of the Company to an
acquiring Person; provided, however, that any transaction described in
clause (A) or (B) in which Voting Stock of the Company or the acquiring or
surviving entity in such transaction representing a majority of the voting
power of such Person is acquired by or from Explorer Holdings, L.P., its
partners and/or their respective Affiliates in one transaction or a series
of related transactions shall not be deemed a Change in Control.
(c) "Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
(d) "Fair Market Value" of any security or other asset means:
(i) In the case of any security:
(A) if the security is traded on a securities exchange, the
weighted average trading volume of the per share closing prices of the
security on such exchange over the five trading day period ending
three trading days prior to the date on which such value is measured;
(B) if the security is traded over-the-counter, the weighted
average trading volume of the per share closing bid prices of the
security over the five trading day period ending three trading days
prior to the date on which such value is measured; or
(C) if there is no public market for such security that meets the
criteria set forth in (A) or (B) above, the Fair Market Value shall be
the per share fair market value of such security as of the date on
which such value is measured, as determined in good faith by the
Board.
(ii) In the case of assets other than securities, the Fair Market
Value shall be the fair market value of such assets, as determined in
good faith by the Board.
(e) "Liquidation Preference" measured per share of Series C Preferred
Stock as of any date in question (the "Relevant Date"), means an amount
equal to the Original Issue Price of such share, plus an amount equal to
any accrued and unpaid dividends, but without interest, at the rate set
forth in Section 4 hereof, if any, for such share of Series C Preferred
Stock. In connection with the determination of the Liquidation Preference
of a share of Series C Preferred Stock upon liquidation, dissolution or
winding up of the Company, the Relevant Date shall be the date of
distribution of amounts payable to stockholders in connection with any such
liquidation, dissolution or winding up.
(f) "Original Issue Price" means $100 per share of Series C Preferred
Stock, subject to appropriate adjustment to reflect any stock dividends,
combinations, splits, reverse splits, recapitalizations or similar events
affecting the Series C Preferred Stock after the Issue Date.
(g) "Person" means any individual, firm, corporation, partnership,
limited liability company, or group (within the meaning of Section 13(d)(3)
of the Exchange Act).
(h) "Rights Offering" means the offering of shares of Common Stock by
the Company pursuant to Section 4.7 of the Investment Agreement, dated as
of October 29, 2001, relating to the Series D Preferred Stock (the
"Investment Agreement").
(i) "Voting Stock" means, with respect to any Person, the shares of
any class or kind ordinarily having the power to vote for the election of
directors or other members of the governing body of such Person, and for
purposes hereof, the Series D Preferred Stock whether or not then
convertible. For avoidance of doubt, Common Stock and Series C Preferred
Stock both constitute Voting Stock of the Company; provided, however, no
class of Preferred Stock shall be deemed to be Voting Stock by virtue of
the rights of such holder upon any Preferred Dividend Default.
11. Amendment; Waiver. Except as expressly prohibited by law, these
Articles Supplementary may be amended and any provision herein may be
waived with the approval of the holders of a majority of the Series C
Preferred Stock and a majority of the members of the Board who are not
Affiliates of any holder of Series C Preferred Stock. Any amendment or
waiver so effected shall be binding upon each holder of Series C Preferred
Stock.
FOURTH: The undersigned Chief Executive Officer of the Company acknowledges
the Articles of Amendment to be the corporate act of the Company and, as to all
matters or facts required to be verified under oath, the undersigned Chief
Executive Officer of the Company acknowledges that to the best of his or her
knowledge, information and belief, these matters and facts are true in all
material respects and that this statement is made under the penalties for
perjury.
IN WITNESS WHEREOF, the Company has caused this Articles of Amendment to be
executed under seal in its name and on its behalf by its Chief Executive Officer
and attested to by its Secretary on this 21th day of February, 2002.
ATTEST OMEGA HEALTHCARE INVESTORS, INC.
By: /s/ DANIEL J. BOOTH By: /s/ C. TAYLOR PICKETT
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Daniel J. Booth C. Taylor Pickett
Secretary Chief Executive Officer