--------------------------------------------------------------------------------

SECOND AMENDMENT TO LOAN AGREEMENT
(Maryland Acquisition Loan)

BETWEEN

OHI ASSET III (PA) TRUST, as Lender

and

BEL PRE LEASING CO., LLC
RIDGE (MD) LEASING CO, LLC
MARLBORO LEASING CO., LLC
FAYETTE LEASING CO., LLC
LIBERTY LEASING CO., LLC
HOWARD LEASING CO., LLC
PALL MALL LEASING CO., LLC
WASHINGTON (MD) LEASING CO., LLC
MARYLAND NH ASSET, LLC
as Borrowers

and

OMG RE HOLDINGS, LLC
OMG RE LEASING CO., LLC
OMG ASSET OWNERSHIP, LLC
HEALTH CARE FACILITY MANAGEMENT, LLC
RESIDENT CARE CONSULTING, LLC
as Parent Guarantors

Dated:  November 3, 2009

 
 

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SECOND AMENDMENT TO LOAN AGREEMENT
 
(Maryland Acquisition Loan)
 
This Second Amendment to Loan Agreement (“Second Amendment”) is dated as of
November 3, 2009, and is by and among OHI ASSET III (PA) TRUST, a Maryland
business trust (“Lender”), and BEL PRE LEASING CO., LLC, an Ohio limited
liability company, RIDGE (MD) LEASING CO., LLC, an Ohio limited liability
company, MARLBORO LEASING CO., LLC, an Ohio limited liability company, FAYETTE
LEASING CO., LLC, an Ohio limited liability company, LIBERTY LEASING CO., LLC,
an Ohio limited liability company, HOWARD LEASING CO., LLC, an Ohio limited
liability company, PALL MALL LEASING CO., LLC, an Ohio limited liability
company, WASHINGTON (MD) LEASING CO., LLC, an Ohio limited liability company,
and MARYLAND NH ASSET, LLC, an Ohio limited liability company (each a
“Borrower”, and collectively, as the “Borrowers”) and OMG RE HOLDINGS, LLC, an
Ohio limited liability company (“RE Holdings”), OMG RE LEASING CO, LLC, an Ohio
limited liability company (“RE Leasing”), and OMG ASSET OWNERSHIP, LLC, an Ohio
limited liability company (“AO”), HEALTH CARE FACILITY MANAGEMENT, LLC, an Ohio
limited liability company (“HCFM”), and RESIDENT CARE CONSULTING, LLC, an Ohio
limited liability company (“RCC”, and together with RE Holdings, RE Leasing, AO,
and HCFM each a “Parent Guarantor” and collectively, the “Parent Guarantors”).
 
RECITALS:
 
A.           Borrowers and Parent Guarantors have executed and delivered to
Lender a Loan Agreement dated April 18, 2008, as amended by that certain First
Amendment to Loan Agreement dated as of March 15, 2009 (as amended, the
“Existing Loan Agreement”), pursuant to which Lender has made a loan (the
“Loan”) to Borrowers.  The Loan is evidenced by the Note and secured by the Loan
Documents (as defined below).
 
B.           Lender and the Borrowers desire to amend the Existing Loan
Agreement as set forth in this Second Amendment.
 
NOW THEREFORE, the parties agree as follows:
 
1. Definitions.  Any capitalized term used but not defined in this Second
Amendment will have the meaning assigned to such term in the Existing Loan
Agreement
 
2. Section 2.8.  Section 2.8 of the Existing Loan Agreement is hereby amended by
deleting the following third (3rd) sentence thereof:
 
After receipt of approval as to any specific Escrowed Improvement, the Borrowers
shall promptly undertake, and complete each such Escrowed Improvement on or
before December 31, 2009; provided, however, that with respect to Scheduled
Improvements to the Bel Pre Health & Rehabilitation Center and Marley Neck
Health & Rehabilitation Center to be funded from the $1,400,000 added to the
Escrowed Capex Funds on December 2, 2008, such Scheduled Improvement shall be
completed on or before December 31, 2010.
 
and by replacing such third (3rd) sentence with the following:
 
“After receipt of approval as to any specific Escrowed Improvement, the
Borrowers shall promptly undertake, and complete each such Escrowed Improvement
on or before December 31, 2010.”
 
3. Exhibit C.  Exhibit C to the Existing Loan Agreement is hereby amended and
restated in its entirety by Exhibit C to this Amendment.
 
4. Section 3.4.  Section 3.4 of the Existing Loan Agreement is hereby amended
and restated in its entirety as follows:
 
3.3          Release of Certain Facilities during First Three Years.
 
(a) On or before the third anniversary of the Closing, provided that (i) no
Event of Default has occurred and is continuing under the Loan Documents, (ii)
no Unmatured Event of Default has occurred and is continuing, and (iii)
Borrowers are selling the Facility or Facilities to an unrelated third party,
upon the payment to Lender of the applicable release payment set forth below
(each a “Three Years Release Payment”), Lender would agree to release the
applicable Facility listed below (each a “Three Years Facility”) from the lien
of the Loan Documents.  No Prepayment Premium would be payable in connection
with such prepayment and release.  The initial release prices (to be increased
by any reallocations as discussed below or any funded capex under Section 2.8)
are:
 
Facility Name
 
Initial Release Payment
 
 
Liberty Heights Health & Rehabilitation Center
4017 Liberty Heights Avenue
Baltimore MD 21207
 
  $ 7,975,509.54  
Franklin Square Health & Rehabilitation Center
1217 W. Fayette Street
Baltimore MD 21223
  $ 10,669,070.16  

 
Each Third Year Release Payment will increase 2.5% per year (compounding) on
each anniversary of the Closing and pursuant to subparagraph (b) below.
 
(b) If, after exercising reasonable efforts to sell any Three Years Facility,
Borrowers are unable to find a buyer willing to pay an amount sufficient to
satisfy the applicable Three Years Release Payment, then Lender will accept as a
Three Years Release Payment a lower release payment provided that: (i) the
release payment is no less than 50% of the otherwise applicable Third Year
Release Payment, and (ii) after giving effect to the sale of the Facility and
the pay down of the Loan, the Borrowers remain in compliance with the Cash Flow
Coverage Ratio and Combined Cash Flow Coverage Ratio required as of the date of
the payment.   The difference between the actual release payment and the Three
Years Release Payment shall be reallocated among the remaining Facilities in
proportion to the number of licensed beds at each remaining Facility bears to
the total number of licensed beds at all Facilities, which reallocation shall
also increase the Third Year Release Payment under this Section and the Seventh
Year Release Payment under Section 3.4 in the amount reallocated to such
Facilities.
 
(c) Borrowers must sell the Facilities to unrelated third parties in order for
the Facilities to be released from the lien of the Loan Documents pursuant to
this Section.
 
(d) Upon payment of the applicable Third Year Release Payment, the amount of the
Security Deposit required under this Agreement and the Master Lease will be
reduced by an amount equal to (i) the amount of the applicable Third Year
Release Payment actually paid to Lender multiplied by (ii) the Interest Rate
divided by (iii) four (4).
 
(e) Upon payment of the applicable Third Year Release Payment, Lender shall
release the applicable Facility from the Option to Purchase.
 
5.   Section 3.4.  Section 3.4 of the Existing Loan Agreement is hereby amended
and restated in its entirety as follows:
 
3.4          Release of Certain Facilities after Seven Years.
 
During the one year period commencing on the seventh anniversary of the Closing,
provided that (i) no Event of Default has occurred and is continuing under the
loan documents, (ii) no Unmatured Event of Default has occurred and is
continuing, (iii) the prepayment is made concurrently with respect to all such
Facilities (to the extent they have not previously been released as provided for
in Section 3.3), and (iv) the Lessee Purchase Option is closed concurrently,
upon the payment to Seller of $41,046738.18 (as such amount may be increased or
reduced pursuant to Sections 3.3(b) and 3.4(b), the “Seventh Year Release
Payment”), Seller will release the Facilities listed below from the lien of the
Loan Documents.  No Prepayment Premium would be payable in connection with such
prepayment and release.  Borrowers would not be obligated to sell the Facilities
in connection with such prepayment and release.  The Facilities covered by this
Section are as follows:
 
Bel Pre Health & Rehabilitation Center
2601 Bel Pre Road
Silver Spring MD 20906
 
Liberty Heights Health & Rehabilitation Center
4017 Liberty Heights Avenue
Baltimore MD 21207
 
Marley Neck Health & Rehabilitation Center
7575 E. Howard Road
Glen Burnie MD 21060
 
Franklin Square Health & Rehabilitation Center
1217 W. Fayette Street
Baltimore MD 21223

(a) The Seventh Year Release Payment will be reduced by the amount any Third
Year Release Payment paid in connection with any of the Seventh Year Facilities
which are also Third Year Facilities.
 
(b) If Borrowers do not sell or otherwise transfer the Facilities to third
parties, but instead continue to own and operate them, then upon payment of the
Seventh Year Release Payment and release of the Seventh Year Facilities from the
lien of the Loan Documents, the ownership of the applicable Borrowers which own
or operate such Facilities shall be transferred such that HCREH and the Parent
Guarantors no longer own or control such Borrowers.  Upon such transfer, Lender
will release such Borrowers from their obligations arising under the Loan
Document and their guaranty of the Master Lease and the City View Loan.
 
(c) Upon payment of the Seventh Year Release Payment, the amount of the Security
Deposit required under this Agreement and the Master Lease will be reduced by an
amount equal to (i) the amount of the Seventh Year Release Payment actually paid
to Lender multiplied by (ii) the Interest Rate divided by (iii) four (4).
 
(d) Upon payment of the Seventh Year Release Payment, Lender shall release the
Facilities covered by this Section from the Option to Purchase.
 
6. Representations and Warranties.
 
(a) Each of Borrower and Parent Guarantor hereby confirms and makes all of the
representations and warranties set forth in the Loan Agreement and other Loan
Documents with respect to such Borrower or Parent Guarantor, this Second
Amendment and the Loan Documents as of the date hereof and confirms that they
are true and correct in all material respects.
 
(b) Each of Borrower and Parent Guarantor hereby represents and warrants as of
the date of this Second Amendment as follows:  (i) it is duly incorporated or
organized, validly existing and in good standing under the laws of its
jurisdiction of organization; (ii) the execution, delivery and performance by it
of this Second Amendment and the Loan Documents, as applicable, are within its
powers, have been duly authorized, and do not contravene (A) its articles of
organization, operating agreement, or other organizational documents, or (B) any
applicable law; (iii) no consent, license, permit, approval or authorization of,
or registration, filing or declaration with any Governmental Authority or other
Person (except for those that have already been obtained), is required in
connection with the execution, delivery, performance, validity or enforceability
of this Second Amendment or the Loan Documents, as applicable, by or against it;
(iv) this Second Amendment and the Loan Documents, as applicable, have been duly
executed and delivered by it; (v) this Second Amendment and the Loan Documents,
as applicable, constitute its legal, valid and binding obligations enforceable
against it in accordance with its terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors’ rights generally or by general
principles of equity; (vi) it is not in default under the Loan Agreement and no
Event of Default or Unmatured Event of Default exists, has occurred or is
continuing, and (vii) Lender has fully performed all of its obligations under
each of the Loan Documents through the date of this Agreement, and Lender is in
full compliance with its obligations under each of the Loan Documents.
 
7. Expenses of Lender.  Borrowers shall pay all reasonable expenses of Lender
incurred in connection with this Second Amendment, including reasonable
attorneys fees and expenses.
 
8. Execution and Counterparts.  This Second Amendment may be executed in any
number of counterparts, each of which, when so executed and delivered, shall be
deemed to be an original, but when taken together shall constitute one and the
same Amendment.
 
9. Entire Agreement.  This Second Amendment, together with the other Loan
Documents, constitute the entire agreement of the parties in respect of the
subject matter described herein.  This Second Amendment may not be changed or
modified except by an agreement in writing signed by the Lender and the
Borrowers hereto.
 
10. Headings.  Section headings used in this Second Amendment are for reference
only and shall not affect the construction of the Second Amendment.
 
11. Enforceability.  Except as expressly and specifically set forth herein, the
Existing Loan Agreement remains unmodified and in full force and effect.  In the
event of any discrepancy between the Existing Loan Agreement and this Second
Amendment, the terms and conditions of this Second Amendment will control and
the Existing Loan Agreement is deemed amended to conform hereto.
 
[SIGNATURES APPEAR ON FOLLOWING PAGES]
 

 
 

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Signature Page to
 
SECOND AMENDMENT TO LOAN AGREEMENT
 
(Maryland Acquisition Loan)
 

LENDER:
 
OHI ASSET III (PA) TRUST
 
By:           OHI Asset (PA), LLC, a Delaware limited liability
company, its sole trustee
 
By:           Omega Healthcare Investors, a Maryland
corporation, its sole member
 
 
By:           /s/Daniel J. Booth                                
Name:           Daniel J. Booth
Title:           Chief Operating Officer
 

THE STATE OF MARYLAND                          )
)
COUNTY OF BALTIMORE                               )

This instrument was acknowledged before me on the 3rd day of November, 2009, by
Daniel J. Booth, the Chief Operating Officer of Omega Healthcare Investors,
Inc., a Maryland corporation, the sole member of OHI Asset (PA), LLC, a Delaware
limited liability company, the sole trustee of OHI Asset III (PA) Trust, a
Maryland business trust, on behalf of said business trust.
 

Judith A.
Jacobs                                                                           
                     Notary Public, Baltimore County, MD
My commission expires: May 12, 2012

Page S- of S-3
 
 

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Signature Page to
 
SECOND AMENDMENT TO LOAN AGREEMENT
 
(Maryland Acquisition Loan)
 

BORROWERS:
 
BEL PRE LEASING CO., LLC
RIDGE (MD) LEASING CO., LLC
MARLBORO LEASING CO., LLC
FAYETTE LEASING CO., LLC
LIBERTY LEASING CO., LLC
HOWARD LEASING CO., LLC
PALL MALL LEASING CO., LLC
WASHINGTON (MD) LEASING CO., LLC
MARYLAND NH ASSET, LLC
 
 
By:           /s/ Charles R. Stoltz                               
Name:           Charles R. Stoltz
Title:           CFO and Treasurer
 
 
PARENT GUARANTORS:
 
OMG RE HOLDINGS, LLC
OMG RE LEASING CO., LLC
OMG ASSET OWNERSHIP, LLC
HEALTH CARE FACILITY MANAGEMENT, LLC
RESIDENT CARE CONSULTING, LLC
 
 
By:           /s/ Charles R. Stoltz                               
Name:           Charles R. Stoltz
Title:           CFO and Treasurer
 

Page S- of S-3
 
 

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Signature Page to
 
SECOND AMENDMENT TO LOAN AGREEMENT
 
(Maryland Acquisition Loan)
 

STATE OF OHIO                                 )
) ss.
COUNTY OF HAMILTON                 )

The foregoing instrument was acknowledged before me this 3rd day of November,
2009, by Charles R. Stoltz, who is the CFO and Treasurer of the limited
liability companies listed above, on behalf of all such limited liability
companies.
 

Kathleen M.
Portman                                                                
                     Notary Public, Hamilton County, Ohio
My commission expires: 3-28-2012

Page S- of S-3
 
 

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SECOND AMENDMENT TO LOAN AGREEMENT
(Maryland Acquisition Loan)

EXHIBIT C

SCHEDULED IMPROVEMENTS

Facility
Address
City
ST
 
Allocation of $3.775M CAP-EX (1)
 
Bel Pre Health & Rehabilitation Center
2601 Bel Pre Road
Silver Spring
MD
    625,000.00  
Ellicott City Health & Rehabilitation Center
3000 N. Ridge Road
Ellicott City
MD
    300,000.00  
Forestville Health & Rehabilitation Center
7420 Marlboro Pike
Forestville
MD
    750,000.00  
Franklin Square Health & Rehabilitation Center (Fayette)
1217 W. Fayette Street
Baltimore
MD
    400,000.00  
Liberty Heights Health & Rehabilitation Center
4017 Liberty Heights Avenue
Baltimore
MD
    400,000.00  
Marley Neck Health & Rehabilitation Center
7575 E. Howard Road
Glen Burnie
MD
    1,050,000.00  
South River Health & Rehabilitation Center
144 Washington Road
Edgewater
MD
    250,000.00      
 
Total
    $ 3,775,000  

Specific improvements, budgets, and plans must be approved prior to the
commencement of any improvement.

Exhibit C  – Page  of 1

 
 

 
THIRD AMENDMENT TO LOAN AGREEMENT
(Maryland Acquisition Loan)

BETWEEN

OHI ASSET III (PA) TRUST, as Lender

and

BEL PRE LEASING CO., LLC
RIDGE (MD) LEASING CO, LLC
MARLBORO LEASING CO., LLC
FAYETTE LEASING CO., LLC
LIBERTY LEASING CO., LLC
HOWARD LEASING CO., LLC
PALL MALL LEASING CO., LLC
WASHINGTON (MD) LEASING CO., LLC
MARYLAND NH ASSET, LLC
as Borrowers

and

OMG RE HOLDINGS, LLC
OMG RE LEASING CO., LLC
OMG ASSET OWNERSHIP, LLC
HEALTH CARE FACILITY MANAGEMENT, LLC
RESIDENT CARE CONSULTING, LLC
as Parent Guarantors

Dated:  October 1, 2010

 
 

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THIRD AMENDMENT TO LOAN AGREEMENT
 
(Maryland Acquisition Loan)
 
This Third Amendment to Loan Agreement (“Second Amendment”) is dated as of
October 1, 2010, and is by and among OHI ASSET III (PA) TRUST, a Maryland
business trust (“Lender”), and BEL PRE LEASING CO., LLC, an Ohio limited
liability company, RIDGE (MD) LEASING CO., LLC, an Ohio limited liability
company, MARLBORO LEASING CO., LLC, an Ohio limited liability company, FAYETTE
LEASING CO., LLC, an Ohio limited liability company, LIBERTY LEASING CO., LLC,
an Ohio limited liability company, HOWARD LEASING CO., LLC, an Ohio limited
liability company, PALL MALL LEASING CO., LLC, an Ohio limited liability
company, WASHINGTON (MD) LEASING CO., LLC, an Ohio limited liability company,
and MARYLAND NH ASSET, LLC, an Ohio limited liability company (each a
“Borrower”, and collectively, as the “Borrowers”) and OMG RE HOLDINGS, LLC, an
Ohio limited liability company (“RE Holdings”), OMG RE LEASING CO, LLC, an Ohio
limited liability company (“RE Leasing”), and OMG ASSET OWNERSHIP, LLC, an Ohio
limited liability company (“AO”), HEALTH CARE FACILITY MANAGEMENT, LLC, an Ohio
limited liability company (“HCFM”), and RESIDENT CARE CONSULTING, LLC, an Ohio
limited liability company (“RCC”, and together with RE Holdings, RE Leasing, AO,
and HCFM each a “Parent Guarantor” and collectively, the “Parent Guarantors”).
 
RECITALS:
 
A.           Borrowers and Parent Guarantors have executed and delivered to
Lender a Loan Agreement dated April 18, 2008, as amended by that certain First
Amendment to Loan Agreement dated as of March 15, 2009, and a Second Amendment
to Loan Agreement dated as of November 3, 2009 (as amended, the “Existing Loan
Agreement”), pursuant to which Lender has made a loan (the “Loan”) to
Borrowers.  The Loan is evidenced by the Note and secured by the Loan Documents
(as defined below).
 
B.           Lender and the Borrowers desire to amend the Existing Loan
Agreement as set forth in this Second Amendment.
 
NOW THEREFORE, the parties agree as follows:
 
1. Definitions.
 
(a) Any capitalized term used but not defined in this Second Amendment will have
the meaning assigned to such term in the Existing Loan Agreement.
 
(b) The following term defined in Article I of the Existing Lease is hereby
amended and restated in its entirety as follows:
 
Interest Rate: means the following annual rate for the following period of time:
Rate
Period
11%
April 18, 2008 thru April 30, 2018
13.75%
May 1, 2019 thru April 30, 2028
16.75%
Thereafter

Maturity Date:  means April 30, 2022, as extended pursuant to Section 0.

 
2. Section 2.7.  Section 2.7 of the Existing Loan Agreement is hereby amended
and restated in its entirety as follows:
 
2.7           Extension of Maturity Date.  Borrowers are hereby granted two (2)
successive options to extend the Maturity Date (each an “Option to
Extend”).  The Options to Extend shall be for a period of ten (10) years each,
such that if the first Option to Extend is exercised, the Maturity Date would be
April 30, 2032 and if the first and second Options to Extend are exercised, the
Maturity Date would be April 30, 2042.  Borrowers’ exercise of the first and
second Options to Extend are subject to the following terms and conditions
(which conditions may be waived by Lender in its sole discretion):
 
(a) An Option to Extend is exercisable only by Notice to Lender at least one
hundred and eighty (180) days, and not more than three hundred sixty (360) days,
prior to the Maturity Date;
 
(b) No Event of Default or Unmatured Event of Default shall have occurred and be
continuing either at the time an option to extend is exercised or at the
commencement of the extension period;
 
(c) All of the terms and conditions of this Agreement, the Note, the Deeds of
Trust and the other Loan Documents shall remain in full force and effect; and
 
(d) Borrowers may only exercise their Options to Extend if the option to renew
for a corresponding period of years under the Master Lease (the “Master Lease”)
is also exercised with respect to all (and no fewer than all) of the Leased
Properties (as defined in the Master Lease) such that the Expiration Date (as
defined in the Master Lease) and the Maturity Date are the same date.
 
3. Representations and Warranties.
 
(a) Each of Borrower and Parent Guarantor hereby confirms and makes all of the
representations and warranties set forth in the Loan Agreement and other Loan
Documents with respect to such Borrower or Parent Guarantor, this Second
Amendment and the Loan Documents as of the date hereof and confirms that they
are true and correct in all material respects.
 
(b) Each of Borrower and Parent Guarantor hereby represents and warrants as of
the date of this Second Amendment as follows:  (i) it is duly incorporated or
organized, validly existing and in good standing under the laws of its
jurisdiction of organization; (ii) the execution, delivery and performance by it
of this Second Amendment and the Loan Documents, as applicable, are within its
powers, have been duly authorized, and do not contravene (A) its articles of
organization, operating agreement, or other organizational documents, or (B) any
applicable law; (iii) no consent, license, permit, approval or authorization of,
or registration, filing or declaration with any Governmental Authority or other
Person (except for those that have already been obtained), is required in
connection with the execution, delivery, performance, validity or enforceability
of this Second Amendment or the Loan Documents, as applicable, by or against it;
(iv) this Second Amendment and the Loan Documents, as applicable, have been duly
executed and delivered by it; (v) this Second Amendment and the Loan Documents,
as applicable, constitute its legal, valid and binding obligations enforceable
against it in accordance with its terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors’ rights generally or by general
principles of equity; (vi) it is not in default under the Loan Agreement and no
Event of Default or Unmatured Event of Default exists, has occurred or is
continuing, and (vii) Lender has fully performed all of its obligations under
each of the Loan Documents through the date of this Agreement, and Lender is in
full compliance with its obligations under each of the Loan Documents.
 
4. Expenses of Lender.  Borrowers shall pay all reasonable expenses of Lender
incurred in connection with this Second Amendment, including reasonable
attorneys fees and expenses.
 
5. Execution and Counterparts.  This Second Amendment may be executed in any
number of counterparts, each of which, when so executed and delivered, shall be
deemed to be an original, but when taken together shall constitute one and the
same Amendment.
 
6. Entire Agreement.  This Second Amendment, together with the other Loan
Documents, constitute the entire agreement of the parties in respect of the
subject matter described herein.  This Second Amendment may not be changed or
modified except by an agreement in writing signed by the Lender and the
Borrowers hereto.
 
7. Headings.  Section headings used in this Second Amendment are for reference
only and shall not affect the construction of the Second Amendment.
 
8. Enforceability.  Except as expressly and specifically set forth herein, the
Existing Loan Agreement remains unmodified and in full force and effect.  In the
event of any discrepancy between the Existing Loan Agreement and this Second
Amendment, the terms and conditions of this Second Amendment will control and
the Existing Loan Agreement is deemed amended to conform hereto.
 
[SIGNATURES APPEAR ON FOLLOWING PAGES]
 

 
 

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Signature Page to
THIRD AMENDMENT TO LOAN AGREEMENT
(Maryland Acquisition Loan)

LENDER:
 
OHI ASSET III (PA) TRUST
 
By:           OHI Asset (PA), LLC, a Delaware limited liability
company, its sole trustee
 
By:           Omega Healthcare Investors, a Maryland
corporation, its sole member
 
 
By:            /s/ Daniel J.
Booth                                                     
Name:           Daniel J. Booth
Title:           Chief Operating Officer
 

THE STATE OF MARYLAND                          )
)
COUNTY OF BALTIMORE                               )

This instrument was acknowledged before me on the 13th day of October, 2010, by
Daniel J. Booth, the Chief Operating Officer of Omega Healthcare Investors,
Inc., a Maryland corporation, the sole member of OHI Asset (PA), LLC, a Delaware
limited liability company, the sole trustee of OHI Asset III (PA) Trust, a
Maryland business trust, on behalf of said business trust.
 

Judith A.
Jacobs                                                                           
                     Notary Public, Baltimore County, MD
My commission expires: May 12, 2012

Page S- of S-3
 
 

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Signature Page to
THIRD AMENDMENT TO LOAN AGREEMENT
(Maryland Acquisition Loan)

 

BORROWERS:
 
BEL PRE LEASING CO., LLC
RIDGE (MD) LEASING CO., LLC
MARLBORO LEASING CO., LLC
FAYETTE LEASING CO., LLC
LIBERTY LEASING CO., LLC
HOWARD LEASING CO., LLC
PALL MALL LEASING CO., LLC
WASHINGTON (MD) LEASING CO., LLC
MARYLAND NH ASSET, LLC
 
 
By:           /s/ Charles R. Stoltz                              
Name:           Charles R. Stoltz
Title:           CFO and Treasurer
 
 
PARENT GUARANTORS:
 
OMG RE HOLDINGS, LLC
OMG RE LEASING CO., LLC
OMG ASSET OWNERSHIP, LLC
HEALTH CARE FACILITY MANAGEMENT, LLC
RESIDENT CARE CONSULTING, LLC
 
 
By:           /s/ Charles R. Stoltz                               
Name:           Charles R. Stoltz
Title:           CFO and Treasurer
 

Page S- of S-3
 
 

--------------------------------------------------------------------------------

 
Signature Page to
THIRD AMENDMENT TO LOAN AGREEMENT
(Maryland Acquisition Loan)

 

STATE OF OHIO                                 )
) ss.
COUNTY OF HAMILTON                 )

The foregoing instrument was acknowledged before me this 7th day of October,
2010, by Charles R. Stoltz, who is the CFO and Treasurer of the limited
liability companies listed above, on behalf of all such limited liability
companies.
 

Monica R.
Humbert                                                                
                     Notary Public, Hamilton County, Ohio
My commission expires: 7/28/2012

Page S- of S-3
 
 

 
FOURTH AMENDMENT TO LOAN AGREEMENT
(Maryland Acquisition Loan)

BETWEEN

OHI ASSET III (PA) TRUST, as Lender

and

BEL PRE LEASING CO., LLC
RIDGE (MD) LEASING CO, LLC
MARLBORO LEASING CO., LLC
FAYETTE LEASING CO., LLC
LIBERTY LEASING CO., LLC
HOWARD LEASING CO., LLC
PALL MALL LEASING CO., LLC
WASHINGTON (MD) LEASING CO., LLC
MARYLAND NH ASSET, LLC
as Borrowers

and

OMG RE HOLDINGS, LLC
OMG RE LEASING CO., LLC
OMG ASSET OWNERSHIP, LLC
HEALTH CARE FACILITY MANAGEMENT, LLC
RESIDENT CARE CONSULTING, LLC
as Parent Guarantors

Dated:  December 31, 2010

 
 

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FOURTH AMENDMENT TO LOAN AGREEMENT
 
(Maryland Acquisition Loan)
 
This Fourth Amendment to Loan Agreement (“Second Amendment”) is dated as of
December 31, 2010, and is by and among OHI ASSET III (PA) TRUST, a Maryland
business trust (“Lender”), and BEL PRE LEASING CO., LLC, an Ohio limited
liability company, RIDGE (MD) LEASING CO., LLC, an Ohio limited liability
company, MARLBORO LEASING CO., LLC, an Ohio limited liability company, FAYETTE
LEASING CO., LLC, an Ohio limited liability company, LIBERTY LEASING CO., LLC,
an Ohio limited liability company, HOWARD LEASING CO., LLC, an Ohio limited
liability company, PALL MALL LEASING CO., LLC, an Ohio limited liability
company, WASHINGTON (MD) LEASING CO., LLC, an Ohio limited liability company,
and MARYLAND NH ASSET, LLC, an Ohio limited liability company (each a
“Borrower”, and collectively, as the “Borrowers”) and OMG RE HOLDINGS, LLC, an
Ohio limited liability company (“RE Holdings”), OMG RE LEASING CO, LLC, an Ohio
limited liability company (“RE Leasing”), and OMG ASSET OWNERSHIP, LLC, an Ohio
limited liability company (“AO”), HEALTH CARE FACILITY MANAGEMENT, LLC, an Ohio
limited liability company (“HCFM”), and RESIDENT CARE CONSULTING, LLC, an Ohio
limited liability company (“RCC”, and together with RE Holdings, RE Leasing, AO,
and HCFM each a “Parent Guarantor” and collectively, the “Parent Guarantors”).
 
RECITALS:
 
A.           Borrowers and Parent Guarantors have executed and delivered to
Lender a Loan Agreement dated April 18, 2008, as amended by that certain First
Amendment to Loan Agreement dated as of March 15, 2009, a Second Amendment to
Loan Agreement dated as of November 3, 2009, and a Third Amendment to Loan
Agreement dated as of October 1, 2010 (as amended, the “Existing Loan
Agreement”), pursuant to which Lender has made a loan (the “Loan”) to
Borrowers.  The Loan is evidenced by the Note and secured by the Loan Documents
(as defined below).
 
B.           Lender and the Borrowers desire to amend the Existing Loan
Agreement as set forth in this Second Amendment.
 
NOW THEREFORE, the parties agree as follows:
 
1. Definitions.  Any capitalized term used but not defined in this Second
Amendment will have the meaning assigned to such term in the Existing Loan
Agreement
 
2. Section 2.8.  Section 2.8 of the Existing Loan Agreement is hereby amended by
deleting the following third (3rd) sentence thereof:
 
“After receipt of approval as to any specific Scheduled Improvement, the
Borrowers shall promptly undertake, and complete each such Scheduled Improvement
on or before December 31, 2010.”
 
and by replacing such third (3rd) sentence with the following:
 
“After receipt of approval as to any specific Scheduled Improvement, the
Borrowers shall promptly undertake, and complete each such Scheduled Improvement
on or before December 31, 2011.”
 
3. Exhibit C.  Exhibit C to the Existing Loan Agreement is hereby amended and
restated in its entirety by Exhibit C to this Amendment.
 
4. Section 3.4.  Section 3.4 of the Existing Loan Agreement is hereby amended
and restated in its entirety as follows:
 
3.3          Release of Certain Facilities during First Three Years.
 
(a) On or before the third anniversary of the Closing, provided that (i) no
Event of Default has occurred and is continuing under the Loan Documents, (ii)
no Unmatured Event of Default has occurred and is continuing, and (iii)
Borrowers are selling the Facility or Facilities to an unrelated third party,
upon the payment to Lender of the applicable release payment set forth below
(each a “Three Years Release Payment”), Lender would agree to release the
applicable Facility listed below (each a “Three Years Facility”) from the lien
of the Loan Documents.  No Prepayment Premium would be payable in connection
with such prepayment and release.  The initial release prices (to be increased
by any reallocations as discussed below or any funded capex under Section 2.8)
are:
 
Facility Name
 
Initial Release Payment
 
 
Liberty Heights Health & Rehabilitation Center
4017 Liberty Heights Avenue
Baltimore MD 21207
 
  $ 8,018,877.12  
Franklin Square Health & Rehabilitation Center
1217 W. Fayette Street
Baltimore MD 21223
  $ 11,294,353.32  

 
Each Third Year Release Payment will increase 2.5% per year (compounding) on
each anniversary of the Closing and pursuant to subparagraph (b) below.
 
(b) If, after exercising reasonable efforts to sell any Three Years Facility,
Borrowers are unable to find a buyer willing to pay an amount sufficient to
satisfy the applicable Three Years Release Payment, then Lender will accept as a
Three Years Release Payment a lower release payment provided that: (i) the
release payment is no less than 50% of the otherwise applicable Third Year
Release Payment, and (ii) after giving effect to the sale of the Facility and
the pay down of the Loan, the Borrowers remain in compliance with the Cash Flow
Coverage Ratio and Combined Cash Flow Coverage Ratio required as of the date of
the payment.   The difference between the actual release payment and the Three
Years Release Payment shall be reallocated among the remaining Facilities in
proportion to the number of licensed beds at each remaining Facility bears to
the total number of licensed beds at all Facilities, which reallocation shall
also increase the Third Year Release Payment under this Section and the Seventh
Year Release Payment under Section 3.4 in the amount reallocated to such
Facilities.
 
(c) Borrowers must sell the Facilities to unrelated third parties in order for
the Facilities to be released from the lien of the Loan Documents pursuant to
this Section.
 
(d) Upon payment of the applicable Third Year Release Payment, the amount of the
Security Deposit required under this Agreement and the Master Lease will be
reduced by an amount equal to (i) the amount of the applicable Third Year
Release Payment actually paid to Lender multiplied by (ii) the Interest Rate
divided by (iii) four (4).
 
(e) Upon payment of the applicable Third Year Release Payment, Lender shall
release the applicable Facility from the Option to Purchase.
 
5.   Section 3.4.  Section 3.4 of the Existing Loan Agreement is hereby amended
and restated in its entirety as follows:
 
3.4          Release of Certain Facilities after Seven Years.
 
During the one year period commencing on the seventh anniversary of the Closing,
provided that (i) no Event of Default has occurred and is continuing under the
loan documents, (ii) no Unmatured Event of Default has occurred and is
continuing, (iii) the prepayment is made concurrently with respect to all such
Facilities (to the extent they have not previously been released as provided for
in Section 3.3), and (iv) the Lessee Purchase Option is closed concurrently,
upon the payment to Seller of  $40,372,426.00  (as such amount may be increased
or reduced pursuant to Sections 3.3(b) and 3.4(b), the “Seventh Year Release
Payment”), Seller will release the Facilities listed below from the lien of the
Loan Documents.  No Prepayment Premium would be payable in connection with such
prepayment and release.  Borrowers would not be obligated to sell the Facilities
in connection with such prepayment and release.  The Facilities covered by this
Section are as follows:
 
Bel Pre Health & Rehabilitation Center
2601 Bel Pre Road
Silver Spring MD 20906
 
Liberty Heights Health & Rehabilitation Center
4017 Liberty Heights Avenue
Baltimore MD 21207
 
Marley Neck Health & Rehabilitation Center
7575 E. Howard Road
Glen Burnie MD 21060
 
Franklin Square Health & Rehabilitation Center
1217 W. Fayette Street
Baltimore MD 21223

(a) The Seventh Year Release Payment will be reduced by the amount any Third
Year Release Payment paid in connection with any of the Seventh Year Facilities
which are also Third Year Facilities.
 
(b) If Borrowers do not sell or otherwise transfer the Facilities to third
parties, but instead continue to own and operate them, then upon payment of the
Seventh Year Release Payment and release of the Seventh Year Facilities from the
lien of the Loan Documents, the ownership of the applicable Borrowers which own
or operate such Facilities shall be transferred such that HCREH and the Parent
Guarantors no longer own or control such Borrowers.  Upon such transfer, Lender
will release such Borrowers from their obligations arising under the Loan
Document and their guaranty of the Master Lease and the City View Loan.
 
(c) Upon payment of the Seventh Year Release Payment, the amount of the Security
Deposit required under this Agreement and the Master Lease will be reduced by an
amount equal to (i) the amount of the Seventh Year Release Payment actually paid
to Lender multiplied by (ii) the Interest Rate divided by (iii) four (4).
 
(d) Upon payment of the Seventh Year Release Payment, Lender shall release the
Facilities covered by this Section from the Option to Purchase.
 
6. Representations and Warranties.
 
(a) Each of Borrower and Parent Guarantor hereby confirms and makes all of the
representations and warranties set forth in the Loan Agreement and other Loan
Documents with respect to such Borrower or Parent Guarantor, this Second
Amendment and the Loan Documents as of the date hereof and confirms that they
are true and correct in all material respects.
 
(b) Each of Borrower and Parent Guarantor hereby represents and warrants as of
the date of this Second Amendment as follows:  (i) it is duly incorporated or
organized, validly existing and in good standing under the laws of its
jurisdiction of organization; (ii) the execution, delivery and performance by it
of this Second Amendment and the Loan Documents, as applicable, are within its
powers, have been duly authorized, and do not contravene (A) its articles of
organization, operating agreement, or other organizational documents, or (B) any
applicable law; (iii) no consent, license, permit, approval or authorization of,
or registration, filing or declaration with any Governmental Authority or other
Person (except for those that have already been obtained), is required in
connection with the execution, delivery, performance, validity or enforceability
of this Second Amendment or the Loan Documents, as applicable, by or against it;
(iv) this Second Amendment and the Loan Documents, as applicable, have been duly
executed and delivered by it; (v) this Second Amendment and the Loan Documents,
as applicable, constitute its legal, valid and binding obligations enforceable
against it in accordance with its terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors’ rights generally or by general
principles of equity; (vi) it is not in default under the Loan Agreement and no
Event of Default or Unmatured Event of Default exists, has occurred or is
continuing, and (vii) Lender has fully performed all of its obligations under
each of the Loan Documents through the date of this Agreement, and Lender is in
full compliance with its obligations under each of the Loan Documents.
 
7. Expenses of Lender.  Borrowers shall pay all reasonable expenses of Lender
incurred in connection with this Second Amendment, including reasonable
attorneys fees and expenses.
 
8. Execution and Counterparts.  This Second Amendment may be executed in any
number of counterparts, each of which, when so executed and delivered, shall be
deemed to be an original, but when taken together shall constitute one and the
same Amendment.
 
9. Entire Agreement.  This Second Amendment, together with the other Loan
Documents, constitute the entire agreement of the parties in respect of the
subject matter described herein.  This Second Amendment may not be changed or
modified except by an agreement in writing signed by the Lender and the
Borrowers hereto.
 
10. Headings.  Section headings used in this Second Amendment are for reference
only and shall not affect the construction of the Second Amendment.
 
11. Enforceability.  Except as expressly and specifically set forth herein, the
Existing Loan Agreement remains unmodified and in full force and effect.  In the
event of any discrepancy between the Existing Loan Agreement and this Second
Amendment, the terms and conditions of this Second Amendment will control and
the Existing Loan Agreement is deemed amended to conform hereto.
 
[SIGNATURES APPEAR ON FOLLOWING PAGES]
 

 
 

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Signature Page to
FOURTH AMENDMENT TO LOAN AGREEMENT
(Maryland Acquisition Loan)

LENDER:
 
OHI ASSET III (PA) TRUST
 
By:           OHI Asset (PA), LLC, a Delaware limited liability
company, its sole trustee
 
By:           Omega Healthcare Investors, a Maryland
corporation, its sole member
 
 
By:           /s/ Daniel J. Booth                               
Name:           Daniel J. Booth
Title:           Chief Operating Officer
 

THE STATE OF MARYLAND                          )
)
COUNTY OF BALTIMORE                               )

This instrument was acknowledged before me on the 28th day of December, 2010, by
Daniel J. Booth, the Chief Operating Officer of Omega Healthcare Investors,
Inc., a Maryland corporation, the sole member of OHI Asset (PA), LLC, a Delaware
limited liability company, the sole trustee of OHI Asset III (PA) Trust, a
Maryland business trust, on behalf of said business trust.
 

Judith A. Jacobs                                                             
                     Notary Public, Baltimore County, MD
My commission expires: May 12, 2012

Page S- of S-3
 
 

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Signature Page to
FOURTH AMENDMENT TO LOAN AGREEMENT
(Maryland Acquisition Loan)

 

BORROWERS:
 
BEL PRE LEASING CO., LLC
RIDGE (MD) LEASING CO., LLC
MARLBORO LEASING CO., LLC
FAYETTE LEASING CO., LLC
LIBERTY LEASING CO., LLC
HOWARD LEASING CO., LLC
PALL MALL LEASING CO., LLC
WASHINGTON (MD) LEASING CO., LLC
MARYLAND NH ASSET, LLC
 
 
By:           /s/ Charles R. Stoltz
Name:           Charles R. Stoltz
Title:           CFO and Treasurer
 
 
PARENT GUARANTORS:
 
OMG RE HOLDINGS, LLC
OMG RE LEASING CO., LLC
OMG ASSET OWNERSHIP, LLC
HEALTH CARE FACILITY MANAGEMENT, LLC
RESIDENT CARE CONSULTING, LLC
 
 
By:           /s/ Charles R. Stoltz                                
Name:           Charles R. Stoltz
Title:           CFO and Treasurer
 

Page S- of S-3
 
 

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Signature Page to
FOURTH AMENDMENT TO LOAN AGREEMENT
(Maryland Acquisition Loan)

 

STATE OF OHIO                                 )
) ss.
COUNTY OF HAMILTON                 )

The foregoing instrument was acknowledged before me this 29 day of December,
2010, by Charles R. Stoltz, who is the CFO and Treasurer of the limited
liability companies listed above, on behalf of all such limited liability
companies.
 

Kathleen M.
Portman                                                                           
                     Notary Public, Hamilton County, Ohio
My commission expires: 3/28/2012

Page S- of S-3
 
 

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FOURTH AMENDMENT TO LOAN AGREEMENT
(Maryland Acquisition Loan)

EXHIBIT C

SCHEDULED IMPROVEMENTS

Facility
Address
City
ST
 
Allocation of $3.775M CAP-EX (1)
 
Bel Pre Health & Rehabilitation Center
2601 Bel Pre Road
Silver Spring
MD
  $ 268,464.07  
Ellicott City Health & Rehabilitation Center
3000 N. Ridge Road
Ellicott City
MD
  $ 532,109.32  
Forestville Health & Rehabilitation Center
7420 Marlboro Pike
Forestville
MD
  $ 1,133,252.98  
Franklin Square Health & Rehabilitation Center (Fayette)
1217 W. Fayette Street
Baltimore
MD
  $ 995,122.99  
Liberty Heights Health & Rehabilitation Center
4017 Liberty Heights Avenue
Baltimore
MD
  $ 443,367.58  
Marley Neck Health & Rehabilitation Center
7575 E. Howard Road
Glen Burnie
MD
  $ 200,769.96  
South River Health & Rehabilitation Center
144 Washington Road
Edgewater
MD
  $ 201,913.10      
 
Total
    $ 3,775,000  

Specific improvements, budgets, and plans must be approved prior to the
commencement of any improvement.

Exhibit C  – Page  of 1

 
 

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