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Exhibit 10.1
 
Execution Version
 
OWNERSHIP LIMIT WAIVER AGREEMENT
 
This OWNERSHIP LIMIT WAIVER AGREEMENT (this “Agreement”) is made and entered
into as of October 30, 2014 by and between Omega Healthcare Investors, Inc., a
Maryland corporation (the “Company”), and LG Aviv L.P., a Delaware limited
partnership (“Lindsay Goldberg”).
 
RECITALS
 
A. The Company has elected to be taxed as a real estate investment trust
(“REIT”) under the Internal Revenue Code of 1986, as amended (the “Code”).
 
B. To help the Company maintain its status as a real estate investment trust
(“REIT”), the Company’s Articles of Amendment and Restatement (the “Articles”)
impose a certain limitations on the ownership of the Company’s stock while the
Company has elected to qualify as a REIT under the Code.
 
C. Section 5.04 of the Company’s Articles contains general restrictions
prohibiting any Person from owning more than a specified percentage – currently
set at 9.8% - of the Company’s common stock (the “Common Share Ownership Limit”)
or more than a specified percentage - currently set at 9.8% - of the value of
the Company’s aggregate outstanding capital stock (the “Equity Share Ownership
Limit”).
 
D. Under Section 5.04(i), upon notice of an acquisition or transfer, or proposed
acquisition or transfer, of the Company Stock that results or would result in a
violation of the Common Share Ownership Limit or the Equity Share Ownership
Limitation, the Company’s Board of Directors may, prospectively or
retroactively, upon receipt of evidence that the Board of Directors deems to be
satisfactory, in its sole discretion, determine that such acquisition or
transfer does not or will not violate the “closely held” provisions of Section
856(h) of the Code or otherwise cause the Corporation to fail to qualify as a
REIT, create an Excepted Holder Limit with respect to such transferee upon such
conditions as the Board of Directors may determine, in its sole discretion (the
“Excepted Holder Waiver Limit”).
 
E. It is anticipated that Lindsay Goldberg will become the owner of 19,488,431
shares of Company common stock, par value $0.01 per share (“Common Stock”) as a
result of the transactions contemplated by that certain Agreement and Plan of
Merger by and among the Company, Omega Healthcare Properties Holdco, Inc., Omega
Healthcare Properties Limited Partnership, Aviv REIT, Inc. and Aviv Healthcare
Properties Limited Partnership, L.P. dated as of October 27, 2014 (the “Merger
Agreement”), which shares of Common Stock will represent an amount in excess of
the Common Share Ownership Limit and Equity Share Ownership Limit currently set
forth in the Company’s Articles.
 
F. This Agreement creates an Excepted Holder Waiver Limit permitting Lindsay
Goldberg to own in excess of  the Company’s Common Stock Ownership Limit and the
Equity Share Ownership Limit on the terms and conditions set forth herein.
 

 

 

 

 
Execution Version
 
AGREEMENT
 
1. Representations and Warranties of Lindsay Goldberg. Beginning on the date
hereof and during any period that Lindsay Goldberg owns in excess of the Common
Share Ownership Limit or the Equity Share Ownership Limit, Lindsay Goldberg
represents and warrants that no person who is treated as an individual under
Section 542(a)(2) of the Code (determined after taking into account Section
856(h) of the Code) beneficially owns, or in the future will beneficially own,
as a result of Lindsay Goldberg’s ownership of Common Stock after giving effect
to the consummation of the transactions contemplated by the Merger Agreement,
Common Stock in excess of the Common Share Ownership Limit or the Equity Share
Ownership Limit. For purposes of this representation, “beneficially owns” means
ownership, either directly or constructively, through the application of Section
544 of the Code as modified by Section 856(h)(1)(B) of the Code.
 
2. Covenants and Termination. Lindsay Goldberg covenants that, after the date
hereof, it will promptly notify the Company of the date on which the foregoing
representations and covenants are no longer true and correct in all respects.
Lindsay Goldberg understands that:
 
(a) any breach of a representation or covenant in this letter will automatically
cause the Excepted Holder Waiver Limit granted to Lindsay Goldberg pursuant to
this Ownership Limit Waiver Agreement to immediately cease to be effective; and
 
(b) if at any time the ownership of the Company’s capital stock in excess of the
Common Share Ownership Limit or the Equity Share Ownership Limit granted to
Lindsay Goldberg in this Ownership Limit Waiver Agreement would result in the
Company failing to qualify as a REIT under the Code as a result of the breach of
any of the representation in Section 1, all or a portion of the Company’s
capital stock owned by Lindsay Goldberg will be subject to Section 5.04 of the
Articles, without giving effect to the amount set forth in this Agreement as the
Excepted Holder Waiver Limit.
 
3. Waiver of the Common Share Ownership Limit and the Equity Share Ownership
Limit for Lindsay Goldberg. Based on the above, representations, covenants and
agreements, the Company, pursuant to the resolutions of its Board of Directors
in the form attached hereto as Exhibit A, with respect to Lindsay Goldberg,
hereby, effective upon the Merger Effective Time (as defined in the Merger
Agreement):
 
(a) waives the Common Share Ownership Limit and the Equity Share Ownership Limit
provided for in Section 5.04 of the Company’s Articles; and
 
(b) increases the Common Share Ownership Limit and the Equity Share Ownership
Limit with respect to Company capital stock owned by Lindsay Goldberg to such
amount as necessary to permit Lindsay Goldberg to receive and own the Common
Stock to be delivered to Lindsay Goldberg in the form of Merger Consideration
(as defined in the Merger Agreement), subject to appropriate adjustment to
reflect the effect of any stock split, reverse stock split, stock dividend
(including any dividend or other distribution of securities convertible into
Common Stock), reorganization, recapitalization, reclassification, combination,
exchange of shares or other like change with respect to the number of shares of
Common Stock then outstanding.
 

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Execution Version
 
4. Miscellaneous.
 
4.1 This Agreement will be governed and construed in accordance with the laws of
the State of Maryland, without giving effect to choice of law or conflict law
provisions.
 
4.2 This Agreement may be signed by the parties in separate counterpart, each of
which will be an original and such counterparts together will constitute one and
the same instrument.
 
4.3 Capitalized terms not otherwise defined herein shall have the meaning
ascribed to them in the Articles.
 
4.4 The waiver by the Company of the Common Share Ownership Limit and the Equity
Share Ownership Limit set forth in the Articles and the Excepted Holder Waiver
Limit created for Lindsay Goldberg hereunder, is personal to Lindsay Goldberg
and may not be sold, assigned, conveyed, or otherwise transferred, nor shall
either inure to the benefit of Lindsay Goldberg’s successors and assigns. Any
attempt by Lindsay Goldberg to sell, assign, convey or otherwise transfer the
rights set forth herein shall be null and void.
 
[SIGNATURE PAGE FOLLOWS]
 

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Execution Version
 
Each of the parties has caused this Agreement to be signed by its duly
authorized officers as of the date set forth in the introductory paragraph of
this Agreement.
 

              OMEGA HEALTHCARE INVESTORS, INC.         a Maryland corporation  
                                                By:  /s/ C. Taylor Pickett      
  Name:
C. Taylor Pickett
        Title:
President and Chief Executive Officer
       

 

                                         
LG Aviv L.P.
       
a Delaware limited partnership
                                                  By:  /s/ Michael W. Dees      
  Name:
Michael W. Dees
        Title:
Authorized Signatory
       

 

 

 

 

 
Execution Version
 
EXHIBIT A
 
Resolutions of the Board of Directors
 
Waiver of Ownership Limits and Approval of Ownership Limit Waiver Agreement

WHEREAS, Section 5.04 of the Charter contains general restrictions prohibiting
any “person,” as such term is defined in Section 5.04, from owning more than a
specified percentage of the Company’s common stock or equity; and
 
WHEREAS, the Board believes that, upon consummation of the Merger as
contemplated in the Merger Agreement, LG Aviv L.P. (“Lindsay Goldberg”) will
acquire common stock of the Company in excess of the limits established in
Section 5.04; and

WHEREAS, Section 5.04(i) of the Charter provides that the Board may waive the
restrictions contained in Section 5.04 if the Board, in its sole discretion,
determines that a proposed acquisition of shares by such party will not violate
the “closely held” provisions of Section 856(h) of the Code or otherwise cause
the Company to fail to qualify as a REIT; and
 
WHEREAS, in connection with the Merger, the Company wishes to enter into an
Ownership Limit Waiver Agreement with Lindsay Goldberg, substantially in the
form attached hereto as Exhibit E (the “Waiver Agreement”), which contains
certain representations and warranties of Lindsay Goldberg and certain covenants
to be performed by Lindsay Goldberg as conditions for the waiver; and
 
WHEREAS, the Board has determined that it is in the best interest of the Company
to waive the restrictions contained in Section 5.04 with respect to Lindsey
Goldberg and to execute the Waiver Agreement in connection with the consummation
of the Merger.
 
NOW, THEREFORE, BE IT RESOLVED, that the Board hereby determines that the
proposed acquisition of Company common stock by Lindsay Goldberg pursuant to the
terms of the Merger Agreement will not violate the “closely held” provisions of
Section 856(h) of the Code or otherwise cause the Company to fail to qualify as
a REIT; and be it
 
FURTHER RESOLVED, that the Board hereby waives the Common Share Ownership Limit
and the Equity Share Ownership Limit, as such terms are defined in Section 5.04
of the Charter, with respect to Lindsay Goldberg, on the terms and conditions
set forth in the Waiver Agreement, with such waiver being effective upon the
Merger Effective Time (as defined in the Merger Agreement); and be it
 

 

 

 

 
Execution Version
 
FURTHER RESOLVED, that, effective upon the Merger Effective Time, the Board
hereby approves the creation of  an Excepted Holder Limit, as such term is
defined in Section 5.04 of the Charter, with respect to Lindsay Goldberg, with
such Excepted Holder Limit being equal to such amount as necessary to permit
Lindsay Goldberg to receive and own the common stock comprising the Merger
Consideration (as defined in the Merger Agreement) to be delivered to Lindsay
Goldberg , subject to appropriate adjustment to reflect the effect of any stock
split, reverse stock split, stock dividend (including any dividend or other
distribution of securities convertible into common stock), reorganization,
recapitalization, reclassification, combination, exchange of shares or other
like change with respect to the number of shares of common stock then
outstanding.; and be it
 
FURTHER RESOLVED, that the Waiver Agreement is hereby approved and adopted, with
such modifications, amendments or changes therein as any of the Authorized
Officers may approve; and the Authorized Officers be, and each of them hereby
is, authorized and empowered, in the name of and on behalf of the Company, to
execute and deliver the Waiver Agreement, in substantially the form attached
hereto, with such modifications, amendments or changes therein as the officer
executing the same shall deem necessary or desirable, such execution to be
conclusive evidence of the necessity or desirability of such changes.