As filed with the Securities and Exchange Commission
on May 13, 2021
REGISTRATION NO. 333-________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933
OMEGA HEALTHCARE
INVESTORS, INC.
(Exact name of registrant as specified in its charter)
Maryland
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38-3041398
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(State or other jurisdiction of incorporation or organization)
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(IRS Employer Identification Number)
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303 International Circle, Suite 200,
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Hunt Valley, MD 21030
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(410) 427-1700
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(Address, including zip code and telephone number, including area code,
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of registrant’s principal executive offices)
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C. Taylor Pickett
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Chief Executive Officer
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Omega Healthcare Investors, Inc.
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303 International Circle, Suite 200,
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Hunt Valley, MD 21030
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(410) 427-1700
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(Name, address, including zip code, and telephone number,
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including area code, of agent for service)
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Copies of communications to:
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Eliot Robinson
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Terrence Childers
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Bryan Cave Leighton Paisner LLP
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One Atlantic Center, Fourteenth Floor
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1201 West Peachtree Street, NW
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Atlanta, Georgia 30309-3488
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(404) 572-6600
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Approximate date of commencement of proposed
sale to the public: From time to time after this registration statement becomes effective.
If the only securities being registered on this
Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. ¨
If any of the securities being registered on this
Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities
offered only in connection with dividend or interest reinvestment plans, check the following box. x
If this Form is filed to register additional
securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities
Act registration statement number of the earlier effective registration statement for the same offering. ¨
If this Form is a post-effective amendment
filed pursuant to Section 462(c) under the Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same offering. ¨
If this Form is a registration statement pursuant
to General Instruction I.D. or a post-effective amendment thereto that shall become effective upon filing with the Commission pursuant
to Rule 462(e) under the Securities Act, check the following box. x
If this Form is a post-effective amendment
to a registration statement filed pursuant to General Instruction I.D. filed to register additional securities or additional classes of
securities pursuant to Rule 413(b) under the Securities Act, check the following box. ¨
Indicate by check mark whether the registrant is
a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See
the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and
“emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer x
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Accelerated filer ¨
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Non-accelerated filer ¨
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Smaller reporting company ¨
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Emerging growth company ¨
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If an emerging growth company, indicate by
check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 7(a)(2)(B) of Securities Act. ¨
CALCULATION OF REGISTRATION FEE
Title of Each Class of Securities to be
Registered
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Amount
to be
Registered
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Common Stock, par value $0.10 per share (2)
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Preferred Stock, par value $1.00 per share (2)
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(1)
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Warrants (3)
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(1)
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Information with respect to each class is omitted pursuant to General Instruction II.D of Form S-3. An indeterminate amount of securities are being registered as may from time to time be issued at indeterminate prices. Separate consideration may or may not be received for securities that are issuable upon exercise, conversion or exchange of other securities. In accordance with Rules 456(b) and 457(r) under the Securities Act, the registrant is deferring payment of all of the registration fee.
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(2)
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Also includes such indeterminate number of shares of preferred stock and common stock as may be issued upon conversion or exercise of, or exchange for, preferred stock, warrants or other securities pursuant to their terms. Separate consideration may or may not be received for such preferred stock or common stock. Also includes such indeterminate number of shares of common stock and preferred stock as may be required for delivery upon conversion or exercise of, or exchange for, preferred stock, warrants or other securities as a result of anti-dilution provisions thereof.
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(3)
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Represents an indeterminate number of warrants as may be issued at indeterminate prices, representing rights to purchase common stock and preferred stock, or any combination. Such warrants may be issued independently or together with preferred stock or common stock, and the warrants may be sold at the same or different time as those offered securities.
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PROSPECTUS
Preferred Stock ● Common Stock ● Warrants
We may offer from time to time our preferred stock,
common stock or warrants consisting of securities covered by this prospectus separately or together in any combination that may include
other securities set forth in an accompanying prospectus supplement, for sale directly to purchasers or through underwriters, dealers
or agents to be designated at a future time.
This prospectus describes the general terms of
the securities and the general manner in which we will offer them. We will provide specific terms of any offering of the securities in
supplements to this prospectus. The information in the prospectus supplement may supplement, update or change information contained in
this prospectus, and we may supplement, update or change any of the information contained in this prospectus by incorporating information
by reference. Before you invest, you should carefully read this prospectus, any prospectus supplement and any free writing prospectus
or other offering material we authorize relating to the securities and the documents incorporated by reference.
Shares of our common stock are traded on the New
York Stock Exchange, which we refer to as the NYSE, under the symbol “OHI.” The closing price of our common stock as reported
by the NYSE on May 10, 2021, was $36.43 per share. Unless we state otherwise in a prospectus supplement, we will not list any preferred
stock or warrants on any securities exchange.
Our principal executive offices are located at
303 International Circle, Suite 200, Hunt Valley, MD 21030, and our telephone number is (410) 427-1700.
Investing in the securities involves risks.
See “Risk Factors” beginning on page 6 to read about factors you should consider before investing in our securities.
NEITHER
THE SEC NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
We may offer the securities on a continuous or
delayed basis in amounts, at prices and on terms determined at the time of offering. We may offer the securities at fixed prices, which
may change, or at negotiated prices, or, in the case of our common stock, at prevailing market prices at the time of the sale or prices
related to prevailing market prices. Information about the underwriters or agents who will participate in any particular sale of the securities,
including any applicable commissions or discounts, will be set forth in the applicable prospectus supplement. Our net proceeds from the
sale of securities also will be set forth in the applicable prospectus supplement.
The date of this prospectus is May 13, 2021.
TABLE OF CONTENTS
ABOUT
THIS PROSPECTUS
This prospectus is part of an automatic shelf registration
statement on Form S-3 that we filed with the Securities and Exchange Commission (the “SEC”) as a “well-known seasoned
issuer” as defined in Rule 405 under the Securities Act of 1933, as amended, which we refer to as the Securities Act. Under
this automatic shelf registration process, we may sell, from time to time, any combination of the securities described in this prospectus
and the applicable prospectus supplement(s) in one or more offerings. This prospectus provides you with a general description of
the securities that we may offer. Each time we offer to sell securities, we will provide a prospectus supplement that will contain specific
information about the terms of that offering. Each prospectus supplement may also add, update or change information contained in this
prospectus. If there is any inconsistency between the information in this prospectus and the applicable prospectus supplement, you should
rely on the information in the prospectus supplement.
Before purchasing any securities, you should carefully
read this prospectus, any prospectus supplement and any free writing prospectus or other offering material that we authorize together
with the documents incorporated by reference as described under “Incorporation of Certain Information by Reference” and the
additional information described under the heading “Available Information” below.
You should rely only on the information contained
or incorporated by reference in this prospectus and the applicable prospectus supplements. We have not authorized anyone to provide you
with different information. Therefore, if anyone provides you with different or inconsistent information, you should not rely on it. We
are not making an offer to sell or soliciting an offer to buy securities in any jurisdiction where the offer or sale thereof is not permitted.
You should assume that the information in this prospectus is accurate only as of the date of this prospectus. Our business, financial
condition, results of operations and prospects may have changed since that date.
Unless otherwise mentioned or unless the context
requires otherwise, all references in this prospectus to “the Company,” “Omega,” “we,” “us,”
“our” or similar references mean Omega Healthcare Investors, Inc., a Maryland corporation, and its subsidiaries.
AVAILABLE
INFORMATION
We file annual, quarterly and current reports,
proxy statements and other information with the SEC. You may read and copy any document we file with the SEC at its public reference room
at 100 F Street, N.E., Washington, D.C. 20549. You can call the SEC at 1-800-SEC-0330 for further information on the operation of the
public reference room. Our SEC filings are also available to the public at the web site maintained by the SEC at www.sec.gov, as well
as on our website at www.omegahealthcare.com. You may inspect information that we file with the NYSE at the offices of the NYSE at 20 Broad
Street, New York, New York 10005. Information on our website is not incorporated by reference herein, and our web address is included
as an inactive textual reference only.
This prospectus constitutes part of a registration
statement on Form S-3 filed by Omega Healthcare Investors, Inc. under the Securities Act. As allowed by SEC rules, this prospectus
does not contain all the information you can find in the registration statement or the exhibits to the registration statement. For further
information regarding Omega Healthcare Investors, Inc., investors should refer to the registration statement and its exhibits. The
full registration statement can be obtained from the SEC as indicated above.
INCORPORATION
OF CERTAIN INFORMATION BY REFERENCE
The SEC allows us to “incorporate by reference”
into this Prospectus the information we file with the SEC, which means that we can disclose important information to you by referring
to our other filings with the SEC. The information that we incorporate by reference is considered a part of this prospectus, and information
that we file later with the SEC will automatically update and supersede the information contained in this prospectus. We incorporate by
reference the following documents we filed with the SEC pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, other
than information in these documents that is not deemed to be filed with the SEC:
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Current Reports on Form 8-K* filed on January 6, 2021, February 4, 2021, March 3, 2021, March 4, 2021 (two (2) filings), March 10, 2021, March 18, 2021, April 14, 2021, May 3, 2021 and May 4, 2021;
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the description of our common stock contained in our Registration Statement on Form 8-A, filed with the SEC on August 4,
1992, and any amendments or reports filed for the purpose of updating that description; and
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* We are not incorporating and will not incorporate
by reference into this prospectus past or future information on reports furnished or that will be furnished under Items 2.02 and/or 7.01
of, or otherwise with, Form 8-K.
All documents we file with the SEC pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this prospectus and prior to the termination of
the offering of our securities as described in this prospectus will be deemed to be incorporated by reference into this prospectus, other
than information in the documents that is not deemed to be filed with the SEC. A statement contained in this prospectus or in a document
incorporated or deemed to be incorporated by reference into this prospectus will be deemed to be modified or superseded to the extent
that a statement contained in any subsequently filed document that is incorporated by reference into this prospectus, modifies or supersedes
that statement. Any statements so modified or superseded will not be deemed, except as so modified or superseded, to constitute a part
of this prospectus.
We will provide without charge to each person to
whom this prospectus is delivered, upon written or oral request of any person, a copy of any or all of the documents incorporated herein
by reference, other than exhibits to the documents, unless the exhibits are specifically incorporated by reference into the documents
that this prospectus incorporates. Requests for copies in writing or by telephone should be directed to:
Omega Healthcare Investors, Inc.
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303 International Circle
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Suite 200
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Hunt Valley, MD 21030
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Attn: Chief Financial Officer
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(410) 427-1700
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CAUTIONARY
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus and the documents incorporated
by reference herein include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended,
which we refer to as the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, which we refer to as
the Exchange Act. All statements other than statements of historical facts included in this prospectus and the documents incorporated
by reference in this prospectus may constitute forward-looking statements. These statements relate to our expectations, beliefs, intentions,
plans, objectives, goals, strategies, future events, performance and underlying assumptions and other statements other than statements
of historical facts. In some cases, you can identify forward-looking statements by the use of forward-looking terminology including, but
not limited to, terms such as “may,” “will,” “anticipates,” “expects,” “believes,”
“intends,” “should” or comparable terms or the negative thereof or variations thereon or similar terminology.
These statements are based on information available on the date of this filing and only speak as to the date hereof and no obligation
to update such forward-looking statements should be assumed. Our actual results may differ materially from those reflected in the forward-looking
statements included or incorporated in this prospectus. These forward-looking statements involve risks and uncertainties that may cause
our actual future activities and results of operations to be materially different from those suggested or described in this prospectus.
There are a number of factors that could cause our actual results to differ materially from those projected in such forward-looking statements.
These factors include, without limitation:
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those items discussed under “Risk Factors” herein and under “Risk Factors” in Part I, Item 1A to
our Annual Report on Form 10-K for the fiscal year ended December 31, 2020, as supplemented from time-to-time in Part II, Item
1A to our Quarterly Reports on Form 10-Q;
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(ii)
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uncertainties relating to the business operations of the operators of our assets, including those relating to reimbursement by third-party
payors, regulatory matters and occupancy levels;
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(iii)
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the impact of the novel coronavirus (“COVID-19”) on our business and the business of our operators, including without
limitation, the extent and duration of the COVID-19 pandemic, increased costs and decreased occupancy levels experienced by operators
of skilled nursing facilities (“SNFs”) and assisted living facilities (“ALFs”) in connection therewith, the ability
of operators to comply with new infection control and vaccine protocols, and the extent to which continued government support may be available
to operators to offset such costs and the conditions related thereto;
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(iv)
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the ability of any of our operators in bankruptcy to reject unexpired lease obligations, modify the terms of our mortgages and impede
our ability to collect unpaid rent or interest during the pendency of a bankruptcy proceeding and retain security deposits for the debtor’s
obligations, and other costs and uncertainties associated with operator bankruptcies;
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(v)
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the ability of any of Omega’s operators in bankruptcy to reject unexpired lease obligations, modify the terms of Omega’s
mortgages and impede the ability of Omega to collect unpaid rent or interest during the pendency of a bankruptcy proceeding and retain
security deposits for the debtor’s obligations, and other costs and uncertainties associated with operator bankruptcies;
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(vi)
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our ability to re-lease, otherwise transition, or sell underperforming assets or assets held for sale on a timely basis and on terms
that allow us to realize the carrying value of these assets;
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(vii)
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the availability and cost of capital to us;
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(viii)
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changes in our credit ratings and the ratings of our debt securities;
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(ix)
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competition in the financing of healthcare facilities;
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(x)
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competition in the long-term healthcare industry and shifts in the perception of various types of long-term care facilities, including
SNFs and ALFs;
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(xi)
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additional regulatory and other changes in the healthcare sector;
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(xii)
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changes in the financial position of our operators;
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(xiii)
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the effect of economic and market conditions generally and, particularly, in the healthcare industry;
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(xiv)
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changes in interest rates;
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(xv)
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the timing, amount and yield of any additional investments;
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(xvi)
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changes in tax laws and regulations affecting REITs;
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(xvii)
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the potential impact of changes in the SNF and ALF markets or local real estate conditions on our ability to dispose of assets held
for sale for the anticipated proceeds or on a timely basis, or to redeploy the proceeds therefrom on favorable terms;
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(xviii)
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our ability to maintain our status as a REIT; and
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(xix)
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the effect of other factors affecting our business or the businesses of our operators that are beyond our or their control, including
natural disasters, other health crises or pandemics and governmental action; particularly in the healthcare industry.
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The risks set forth above are not exhaustive. Other
sections of this prospectus, including the documents that we incorporate by reference herein and therein, may include additional factors
that could adversely affect our business and financial performance. Moreover, we operate in a very competitive and rapidly changing environment.
New risk factors emerge from time to time and it is not possible for management to predict all risk factors, nor can we assess the impact
of all risk factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially
from those contained in any forward-looking statements. Given these risks and uncertainties, investors should not place undue reliance
on forward-looking statements as a prediction of actual results. Investors should also refer to our Annual Reports on Form 10-K,
our Quarterly Reports on Form 10-Q and our Current Reports on Form 8-K as we file them with the SEC, and to other materials
we may furnish to the public from time to time through Current Reports on Form 8-K or otherwise, for a discussion of risks and uncertainties
that may cause actual results, performance or achievements to differ materially from those expressed or implied by forward-looking statements.
We expressly disclaim any responsibility to update any forward-looking statements to reflect changes in underlying assumptions or factors,
new information, future events, or otherwise, and you should not rely upon these forward-looking statements after the date of this prospectus
supplement.
RISK
FACTORS
Investing in our securities involves risks. Before
you invest in our securities, you should carefully consider the risks described under “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020, and as supplemented in Part II, Item 1A to our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2021, each of which is incorporated by reference herein, as well
as the other information contained in or incorporated by reference into this prospectus. The risks and uncertainties described herein
and therein are not the only risks and uncertainties we face. See “Where you can find more information.” If any of the events
described in the following risk factors occur, our business, operating results and financial condition could be seriously harmed, and
you may lose all or part of your investment.
THE
COMPANY
We are a self-administered real estate investment
trust, which we refer to as a REIT, investing in income producing healthcare facilities, principally long-term care facilities located
in the United States and the United Kingdom, which we refer to as the U.K. We provide financing or capital to qualified operators of skilled
nursing facilities, which we refer to as SNFs, assisted living facilities, which we refer to as ALFs, and to a lesser extent, independent
living facilities and rehabilitation and acute care facilities, which we refer to as specialty facilities, and medical office buildings.
Our core portfolio consists of long-term leases and mortgage agreements. We have historically financed investments through borrowings
under our revolving credit facilities, private placements or public offerings of our debt and equity securities, the assumption of secured
indebtedness, retention of cash flow, or a combination of these methods.
We are structured as an umbrella partnership real
estate investment trust, which we refer to as an UPREIT. Accordingly, substantially all of our assets are held by OHI Healthcare Properties
Limited Partnership, an operating partnership that is a subsidiary of Omega Healthcare Investors, Inc., which we refer to as the
Operating Partnership. Omega Healthcare Investors, Inc. is the general partner of the Operating Partnership and has exclusive control
over the Operating Partnership’s day-to-day management. As of December 31, 2020, we owned approximately 97% of the issued and
outstanding units of partnership interest of the Operating Partnership, and investors owned approximately 3% of the units.
We were incorporated in the State of Maryland on
March 31, 1992. Our principal executive office is located at 303 International Circle, Suite 200, Hunt Valley, Maryland 21030,
and our telephone number is (410) 427-1700. Additional information regarding our company is set forth in documents on file with the SEC
and incorporated by reference in this prospectus supplement. See “Where you can find more information.”
You may also access our filings free of charge
on our website at www.omegahealthcare.com, or at the website maintained by the SEC at www.sec.gov. Information on our website is not incorporated
by reference herein, and our web address is included as an inactive textual reference only.
USE
OF PROCEEDS
Unless otherwise indicated in a prospectus supplement
or any free writing prospectus we have authorized for use in connection with a specific offering, we intend to use the net proceeds of
any offering of securities sold by us for general corporate purposes.
DESCRIPTION
OF SECURITIES
We may issue from time to time, in one or more
offerings, the following securities:
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shares of our preferred stock, par value $1.00 per share, in one or more series;
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shares of our common stock, par value $0.10 per share;
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warrants to purchase preferred stock, common stock or any combination thereof; or
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any combination of the foregoing, individually.
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This prospectus contains a summary of certain general
terms of the various securities that we may offer. The specific terms of the securities, including the initial offering price and the
net proceeds to us, will be described in a prospectus supplement, which may be in addition to or different from the general terms summarized
in this prospectus. Where applicable, the prospectus supplement will also describe any material United States federal income tax considerations
relating to the securities offered to the extent so required and indicate whether the securities offered are or will be listed on any
securities exchange. When we refer to a prospectus supplement we are also referring to any applicable pricing supplement, free writing
prospectus or other offering materials that we authorize, as appropriate, unless the context otherwise requires. The summaries contained
in this prospectus and in any prospectus supplements do not contain all of the information or restate the agreements under which the securities
may be issued and do not contain all of the information that you may find useful. We urge you to read the actual agreements relating to
any securities because they, and not the summaries, define your rights as a holder of the securities. The agreements will be on file with
the SEC as described under “Available Information” and “Incorporation of Certain Information By Reference.”
description
of capital stock
As of May 13, 2021, our only class of outstanding securities registered under the Exchange Act is
our common stock, par value $0.10 per share, which we refer to as the Common Stock.
The following is a description of the material
terms of our Common Stock and preferred stock we may offer and is qualified by reference to the provisions of our Articles of Amendment
and Restatement, as amended, which we refer to as our Charter, our Amended and Restated Bylaws, which we refer to as the Bylaws, and applicable
provisions of relevant Maryland law, including the Maryland General Corporation Law, which we refer to as the MGCL. The terms of any series
of preferred stock being offered by us will be described in the prospectus supplement relating to that series of preferred stock. That
prospectus supplement may not restate the articles supplementary that establishes a particular series of preferred stock in its entirety.
We urge you to read at that time the articles supplementary because it, and not the description in the prospectus supplement, will define
your rights as a holder of preferred stock. The articles supplementary will be filed with the State Department of Assessments and Taxation
of the State of Maryland of the State of Maryland and with the SEC.
Common Stock
We are authorized to issue 350,000,000 shares of
Common Stock. All shares of our Common Stock participate equally in dividends payable to stockholders of our Common Stock when and as
declared by our board of directors and in net assets available for distribution to stockholders of our Common Stock on liquidation or
dissolution; have one vote per share on all matters submitted to a vote of the stockholders; and do not have cumulative voting rights
in the election of directors. All of our outstanding shares of Common Stock are fully paid and non-assessable. Holders of our Common Stock
do not have preference, conversion, exchange or preemptive rights. We may issue additional shares of authorized Common Stock without stockholder
approval, subject to applicable rules of the NYSE.
Preferred Stock
We are authorized to issue 20,000,000 shares of
our preferred stock, par value $1.00 per share, which we refer to as the Preferred Stock. Under our Charter, our board of directors has
the authority to authorize from time to time, without further stockholder action, the issuance of shares of our Preferred Stock, in one
or more series as the board of directors shall deem appropriate, and to fix the rights, powers and restrictions of the Preferred Stock
by resolution and the filing of an amendment to our Charter, including but not limited to the designation of the following:
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the number of shares constituting such series and the distinctive designation thereof;
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the voting rights, if any, of such series;
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the rate of dividends payable on such series, the time or times when such dividends will be payable, the preference to, or any relation
to, the payment of dividends to any other class or series of stock and whether the dividends will be cumulative or non-cumulative;
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whether there shall be a sinking or similar fund for the purchase of shares of such series and, if so, the terms and provisions that
shall govern such fund;
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the rights of the holders of shares of such series upon the liquidation, dissolution or winding up of the Company;
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the rights, if any, of holders of shares of such series to convert such shares into, or to exchange such shares for, shares of any
other class or classes or any other series of the same or of any other class or classes of equity shares, the price or prices or rate
or rates of conversion or exchange, with such adjustments thereto as shall be provided, at which such shares shall be convertible or exchangeable,
whether such rights of conversion or exchange shall be exercisable at the option of the holder of the shares or the Company (or both)
or upon the happening of a specified event, and any other terms or conditions of such conversion or exchange; and
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any other preferences, powers and relative participating, optional or other special rights and qualifications, limitations or restrictions
of shares of such series.
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Except as otherwise provided in any prospectus
supplement or articles supplementary, all shares of the same series of Preferred Stock will be identical to each other share of said stock.
The shares of different series may differ, including as to ranking, as may be provided in our Charter, or as may be fixed by our board
of directors as described above. We may from time to time amend our Charter to increase or decrease the number of authorized shares of
Preferred Stock.
Certain Effects of Authorized but Unissued Stock
We may issue additional shares of Common Stock
or Preferred Stock without stockholder approval, subject to applicable rules of the NYSE, for a variety of corporate purposes, including
raising additional capital, corporate acquisitions, the payment of dividends and employee benefit plans. The existence of unissued and
unreserved Common and Preferred Stock may enable us to issue shares to persons who are friendly to current management, which could discourage
an attempt to obtain control of the Company through a merger, tender offer, proxy contest or otherwise, and protect the continuity of
management and possibly deprive you of opportunities to sell your shares at prices higher than the prevailing market prices. We could
also use additional shares to dilute the stock ownership of persons seeking to obtain control of the Company.
Restrictions on Ownership and Transfer
To qualify as a “real estate investment trust,”
which we refer to as a REIT, under the Internal Revenue Code of 1986 (as amended, the “Code”), we must satisfy a number of
statutory requirements, including a requirement that no more than 50% in value of our outstanding shares of stock may be owned, actually
or constructively, by five or fewer individuals (as defined by the Code to include certain entities such as qualified pension plans) during
the last half of a taxable year (other than the first year for which an election to be a REIT has been made). In addition, if we, or an
actual or constructive owner of 10% or more of us, actually or constructively owns 10% or more of a tenant of ours (or a tenant of any
partnership in which we are a partner), the rent we receive (either directly or through any such partnership) from such tenant will not
be qualifying income for purposes of the REIT gross income tests of the Code. Our stock must also be beneficially owned by 100 or more
persons during at least 355 days of a taxable year of twelve months or during a proportionate part of a shorter taxable year.
Our Charter provides that, subject to certain exceptions,
no person may beneficially or constructively own more than 9.8% in value or in number of shares, whichever is more restrictive, of the
outstanding shares of any class or series of our capital stock. Our Charter also prohibits any person from:
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beneficially owning shares of our capital stock to the extent that such beneficial ownership would result in our being “closely
held” within the meaning of Section 856(h) of the Code (without regard to whether the ownership interest is held during
the last half of the taxable year);
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beneficially or constructively owning shares of our capital stock to the extent such beneficial or constructive ownership would cause
us to fail to qualify as a REIT (including, but not limited to, beneficial or constructive ownership that would cause us to actually or
constructively own interests in a tenant that is described in Section 856(d)(2)(B) of the Code if the income derived by us from
such tenant would cause us to fail to satisfy any of the gross income requirements of Section 856(c) of the Code); or
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transferring shares of our capital stock to the extent that such transfer would result in our shares of capital stock being beneficially
owned by fewer than 100 persons (determined without reference to any rules of attribution).
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We refer to these restrictions, collectively, as
the “ownership limits.” Subject to certain limitations, our board of directors may, in its sole discretion, prospectively
or retroactively, exempt one or more persons from the ownership limits, on such terms and subject to such conditions as our board of directors
may require.
Our Charter requires that any person who acquires
or attempts to acquire shares of our stock in violation of the ownership limits give immediate, or in the event of a proposed or attempted
transfer, at least 15 days’ prior, written notice to us. Any attempted transfer of our stock which, if effective, would result in
our stock being beneficially owned by fewer than 100 persons will be void ab initio. Any attempted transfer of our stock which, if effective,
would result in violation of the ownership limits (or any expected holder limit) or result in our being “closely held” under
Section 856(h) of the Code or otherwise failing to qualify as a REIT, will cause the number of shares causing the violation
(rounded to the nearest whole share) to be automatically transferred to a trust for the exclusive benefit of one or more charitable beneficiaries,
and the proposed transferee will not acquire any rights in the shares. The trustee of the trust will be appointed by the Company or any
successor trustee thereof. Shares of our stock held in the trust will be issued and outstanding shares. The proposed transferee will not
benefit economically from ownership of any shares of stock held in the trust, will have no rights to dividends or other distributions
and no rights to vote or other rights attributable to the shares of stock held in the trust. The trustee of the trust will have all voting
rights and rights to dividends or other distributions with respect to shares held in the trust, which the trustee will exercise for the
exclusive benefit of the charitable beneficiary of the trust.
The automatic transfer will be effective as of
the close of business on the business day prior to the date of the violative transfer or other event that results in a transfer to the
trust. If the transfer to the trust as described above is not automatically effective, for any reason, to prevent violation of the applicable
restrictions on ownership and transfer of our stock, then the transfer of the shares will be void ab initio. Any dividend or other distribution
paid prior to our discovery that the shares had been automatically transferred to a trust as described above must be repaid by the recipient
to the trustee upon demand. Any dividend or other distribution authorized but unpaid will be paid when due to the trustee. Any dividend
or distribution paid to the trustee will be held in trust for the charitable beneficiary.
Subject to Maryland law, effective as of the date
that the shares have been transferred to the trust, the trustee shall have the authority, at the trustee’s sole discretion:
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to rescind as void ab initio any vote cast by a proposed transferee prior to our discovery that the shares have been transferred
to the trust; and
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to recast the vote in accordance with the desires of the trustee acting for the benefit of the charitable beneficiary of the trust.
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However, if we have already taken irreversible
corporate action, then the trustee may not rescind and recast the vote.
Shares of our stock transferred
to the trustee are deemed offered for sale to us, or our designee, at a price per share equal to the lesser of (1) the price per
share in the transaction that resulted in the transfer to the trust (or, in the case of a gift or devise, the market price at the time
of such gift or devise) and (2) the market price on the date we, or our designee, accepts such offer. We have the right to accept
such offer for a period of twenty (20) days after the later of (1) the date of the violative transfer or other event that results
in a transfer to the trust and (2) if no notice of a transfer of shares to the trust is received by us, the date we determine in
good faith that a violative transfer or other event that results in a transfer to the trust has occurred. Upon a sale to us, the interest
of the charitable beneficiary in the shares sold terminates and the trustee must distribute the net proceeds of the sale to the proposed
transferee. Any amounts received by the trustee in excess of the amounts paid to the proposed transferee will be paid to the charitable
beneficiary.
If we do not purchase
the shares held in trust, the trustee must sell the shares to a person designated by the trustee who could own the shares without violating
the ownership limit and the other restrictions on ownership and transfer of our stock contained in our Charter. After selling the shares,
the trustee must distribute to the proposed transferee an amount equal to the lesser of (1) the price paid by the proposed transferee
for the shares (or, in the case of a gift or devise, the market price at the time of such gift or devise) and (2) the sales proceeds
(net of commissions and other expenses of sale) received by the trust for the shares.
Every owner of more than
5% (or any lower percentage as required by the Code or the regulations promulgated thereunder or as may be requested by our board of directors
in its sole discretion) in number or value of the outstanding shares of our capital stock, within 30 days after the end of each taxable
year, is required to give us written notice, stating his or her name and address, the number of shares of each class and series of shares
of our capital stock that he or she beneficially owns and a description of the manner in which the shares are held. Each of these owners
must provide us with additional information that we may request in order to determine the effect, if any, of his or her beneficial ownership
on our status as a REIT and to ensure compliance with the ownership limits. In addition, each stockholder will upon demand be required
to provide us with information that we may request in good faith in order to determine our status as a REIT and to comply with the requirements
of any taxing authority or governmental authority or to determine our compliance.
Certain Anti-Takeover Provisions
The following is a description of certain provisions
included in our Charter, Bylaws and Maryland law that may have the effect of discouraging unilateral tender offers or other takeover proposals
that stockholders might deem to be in their interests or in which they might receive a substantial premium. Our board of directors’
authority to issue and establish the terms of currently authorized Preferred Stock, without stockholder approval, may also have the effect
of discouraging takeover attempts. The following provisions could also have the effect of insulating current management against the possibility
of removal and could, by possibly reducing temporary fluctuations in market price caused by accumulations of shares of our Common Stock,
deprive stockholders of opportunities to sell at a temporarily higher market price. Our board of directors believes, however, that these
provisions may help assure fair treatment of our stockholders and preserve our assets. These provisions may require persons seeking control
of the Company to negotiate with our board of directors regarding the price to be paid for our shares required to obtain control, promote
continuity and stability, and enhance the Company’s ability to pursue long-term strategies.
Charter and Bylaws
Our Charter and Bylaws contain certain provisions,
including the provisions described below, that may discourage certain types of transactions that involve an actual or threatened change
of control of us. Since the terms of our Charter and Bylaws may differ from the general information we are providing, you should only
rely on the actual provisions of our Charter and Bylaws.
Size of Board. Our Charter specifies that the number of directors
shall be six, which number may be increased or decreased as provided in the Bylaws, but shall not be less than five nor more than thirteen.
Election of Directors. A director is generally elected by the
vote of a majority of the votes cast at the meeting at which the election is held, except that, in case of a contested election, directors
are elected by the vote of a plurality of the votes present in person or represented by proxy at the meeting. For one of our stockholders
to nominate a candidate for director, our Bylaws require that such stockholder give timely notice to us in advance of the meeting. Ordinarily,
the stockholder must give notice not less than 90 days nor more than 120 days before the first anniversary of the preceding year’s
annual meeting. The notice must describe various matters regarding the nominee, the stockholder giving the notice and the beneficial owner
on whose behalf the nomination is made. Our Charter does not permit cumulative voting in the election of directors. Accordingly, the holders
of a majority of the then-outstanding shares of Common Stock can elect all of the directors of the class then being elected at that meeting
of stockholders.
Removal of Directors. Our Charter and Bylaws provide that stockholders
may remove a director only “for cause” and with the affirmative vote of not less than two-thirds of the-then outstanding shares
of our capital stock entitled to vote, subject to any rights of holders of any outstanding series of Preferred Stock or any other series
or class of stock to elect additional directors under specified circumstances.
Filling Vacancies. Our Bylaws provide that any vacancies on
the board of directors, including vacancies by reason of an increase in the number of directors, whether or not sufficient to constitute
a quorum, may be filled by a majority vote of the directors then in office even if the remaining directors do not constitute a quorum.
Limitations on Stockholder Action by Written Consent. Our Bylaws
provide that, except for the election of directors, action may be taken without a meeting of stockholders only if all of the stockholders
entitled to vote with respect to the subject matter thereof consent in writing or by electronic transmission to such action being taken
or (in respect to the adoption of new Bylaws or the amendment or repeal of the existing Bylaws) by a written consent of the holders of
a majority of the outstanding shares entitled to vote. The election of directors may not be undertaken by written consent.
Limitations on Calling Stockholder Meetings. Under our Bylaws,
special meetings of the stockholders may be called by a majority of our board of directors, the chairman of our board of directors, our
chief executive officer or president, or, subject to the satisfaction of certain procedural and informational requirements by the stockholders
requiring the meeting, by our secretary upon written request of holders of not less than a majority of the votes entitled to be cast on
the business proposed.
Advance Notice Bylaw; Proposal and Nomination Information Requirements;
Proxy Access. For a stockholder to bring a proposal before an annual meeting, including director nominations, our Bylaws require that
the stockholder give timely notice to us in advance of the meeting. Ordinarily, the stockholder must give notice at least 90 days but
not more than 120 days before the first anniversary of the preceding year’s annual meeting. Each proponent of a matter to be considered
at a stockholder meeting and each stockholder nominating a director must furnish certain information, including his or her ownership of
Common Stock, options or any short positions related to our Common Stock and any fees such proponent stands to earn based on the value
of the Common Stock or derivatives related to the Common Stock. Each director nominated by a stockholder must certify that he or she is
not a party to, and will not become a party to, any agreement with any person or entity in connection with service or action as a director.
Such director nominee must also submit a completed director questionnaire provided by us.
Our board of directors may reject any proposals
that have not followed these procedures or that are not a proper subject for stockholder action in accordance with the provisions of applicable
law.
Our Bylaws also provide that, subject to certain
requirements, a stockholder, or group of up to 20 stockholders, owning 3% or more of our outstanding common stock continuously for at
least three years, may nominate, and require us to include in our proxy materials for an annual meeting, stockholder-nominated director
candidates equal to the greater of two director seats or 20% of the board of directors.
Certain Amendments to our Charter and Bylaws. The provisions
of our Charter governing certain business combinations and governing ownership limitations and excess shares may not be amended without
the board declaring the amendment advisable and the approval of 80% of the outstanding shares of our capital stock entitled to vote. Our
Bylaws may be amended, altered, changed or repealed by (1) a majority of all the outstanding shares of capital stock entitled to
vote, unless the Bylaws provide that a higher voting requirement applies, or (2) a majority of our board of directors.
Business Combinations. Our Charter requires that, except in
some circumstances, “business combinations” between us and a beneficial holder of 10% or more of our outstanding voting stock,
which we refer to as a Related Person, be approved by the affirmative vote of at least 80% of our outstanding voting shares. A “business
combination” is defined in our Charter as:
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any merger or consolidation of the Company with or into a Related Person;
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any sale, lease, exchange, transfer or other disposition, including without limitation a mortgage or any other security device, of
all or any “Substantial Part” (as defined below) of the assets of the Company (including without limitation any voting securities
of a subsidiary) to a Related Person;
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any merger or consolidation of a Related Person with or into the Company;
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any sale, lease, exchange, transfer or other disposition of all or any Substantial Part of the assets of a Related Person to
the Company;
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the issuance of any of our securities (other than by way of pro rata distribution to all stockholders) of the Company to a Related
Person; and
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any agreement, contract or other arrangement providing for any of the transactions described above.
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The term “Substantial Part” means more
than 10% of the book value of our total assets as of the end of our most recent fiscal year ending prior to the time the determination
is being made.
Maryland Law
Maryland “Unsolicited Takeovers” under Subtitle 8 of
Title 3. The “Unsolicited Takeovers” provisions of Subtitle 8 of Title 3 of the Maryland General Corporation Law permits
a Maryland corporation with a class of equity securities registered under the Exchange Act and at least three independent directors to
elect to be subject, by provision in its Charter or Bylaws or a resolution of its board of directors and notwithstanding any contrary
provision in the Charter or Bylaws, to any or all of five provisions:
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a classified board of directors;
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a two-thirds vote requirement to remove a director;
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a requirement that the number of directors be fixed only by a vote of directors;
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a requirement that a vacancy on the board of directors be filled only by the remaining directors and for the remainder of the full
terms of the class of directors in which the vacancy occurred; and
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a majority requirement for the calling of a special meeting of stockholders.
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We have elected to be subject to the requirement
that a vacancy on the board of directors be filled by the remaining directors and for the remainder of the full term of the class of directors
in which the vacancy occurred. Accordingly, the stockholders may not fill any vacancy upon the board of directors.
Pursuant to a resolution of the board, we have
elected to affirmatively opt out of Section 3-803 of the MGCL, which permits the board of directors of a Maryland corporation to
divide its board into classes without stockholder approval. The board resolution is irrevocable unless it is first approved in the same
manner as an amendment to the Charter, which would require the approval of the Company’s stockholders by the affirmative vote of
a majority of all the votes entitled to be cast on the matter.
The other Subtitle 8 elections are not currently
relevant to us because existing provisions in our Charter and Bylaws (unrelated to Subtitle 8) already make us subject to the two-thirds
vote requirement for removing a director, a requirement that the number of directors be fixed only by a vote of directors, and a majority
requirement for the calling of a special meeting of stockholders. Subject to the voting requirements described herein, we retain our right
to opt in to any of the other provisions of Subtitle 8.
Maryland Business Combination Act. Pursuant to Section 5.09
of our Charter, we have opted out of Maryland’s statutory “business combination” provisions under the Maryland Business
Combination Act. Nevertheless, we cannot assure you that our board of directors will not decide in the future to adopt a resolution electing
to be subject to the statutory business combination provisions. An alteration or repeal of the Charter’s “opt out” provision,
however, would not have any effect on any business combinations that have been consummated or upon any agreements existing at the time
of such modification or repeal.
If we were to opt into the Maryland Business Combination
Act, certain “business combinations” (including a merger, consolidation, share exchange or, in certain circumstances specified
under the statute, an asset transfer or issuance or reclassification of equity securities) between a Maryland corporation and any interested
stockholder, or an affiliate of such an interested stockholder, would be prohibited for five years after the most recent date on which
the interested stockholder becomes an interested stockholder. Maryland law defines an interested stockholder as:
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any person who beneficially owns, directly or indirectly, 10% or more of the voting power of the corporation’s outstanding voting
stock; or
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an affiliate or associate of the corporation who, at any time within the two-year period prior to the date in question, was the beneficial
owner of 10% or more of the voting power of the then outstanding voting stock of the corporation.
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A person is not an interested stockholder under
the statute if the board of directors approved in advance the transaction by which the person otherwise would have become an interested
stockholder. In approving a transaction, however, a board of directors may provide that its approval is subject to compliance, at or after
the time of the approval, with any terms and conditions determined by it.
After such five-year period, any such business
combination must be recommended by the board of directors of the corporation and approved by the affirmative vote of at least:
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80% of the votes entitled to be cast by holders of outstanding shares of voting stock of the corporation; and
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two-thirds of the votes entitled to be cast by holders of voting stock of the corporation other than shares held by the interested
stockholder with whom (or with whose affiliate) the business combination is to be effected or held by an affiliate or associate of the
interested stockholder.
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These supermajority approval requirements do not
apply if, among other conditions, the corporation’s common stockholders receive a minimum price (as defined in the Maryland General
Corporation Law) for their shares and the consideration is received in cash or in the same form as previously paid by the interested stockholder
for its shares.
For a description of the Business Combinations
provision included in our Charter, see “Charter and Bylaws -Business Combinations” above.
Maryland Control Share Acquisition Act. Pursuant to Section 5.09
of our Charter, we have opted out of Maryland’s statutory “control share acquisition” provisions under the Maryland
Control Share Acquisition Act. Nevertheless, we cannot assure you that our board of directors will not decide in the future to adopt a
resolution electing to be subject to the statutory control share acquisition provisions. An alteration or repeal of the Charter’s
“opt out” provision, however, would not have any effect on any control share acquisitions that have been consummated or upon
any agreements existing at the time of such modification or repeal.
The Maryland Control Share Acquisition Act, if
and when applicable to us, would provide that “control shares” of a Maryland corporation acquired in a “control share
acquisition” have no voting rights except to the extent approved by a vote of two-thirds of the votes entitled to be cast on the
matter. Shares of stock owned by the acquirer, by officers or by directors who are employees of the corporation are excluded from shares
entitled to vote on the matter. “Control shares” are voting shares of stock, that, if aggregated with all other shares of
stock owned by the acquirer or shares of stock for which the acquirer is able to exercise or direct the exercise of voting power except
solely by virtue of a revocable proxy, would entitle the acquirer to exercise direct or indirect voting power in electing directors within
one of the following ranges of voting power:
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one-tenth or more, but less than one-third of all voting power;
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one-third or more, but less than a majority of all voting power; or
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a majority or more of all voting power.
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Control shares do not include shares the acquiring
person is then entitled to vote as a result of having previously obtained stockholder approval. Except as otherwise specified in the statute,
a “control share acquisition” means the direct or indirect acquisition of control shares.
Once a person who has made or proposes to make
a control share acquisition has undertaken to pay expenses and satisfied other conditions, the person may compel the board of directors
to call a special meeting of stockholders to be held within 50 days of the corporation’s receipt of demand to consider the voting
rights of the shares. If no request for a special meeting is made, the corporation itself may present the question at any stockholders
meeting.
If voting rights are not approved at the meeting
or if the acquiring person does not deliver an acquiring person statement as required by the statute, then the corporation may be able
to redeem any or all of the control shares for fair value, except for control shares for which voting rights previously have been approved.
The right of the corporation to redeem control shares is subject to certain conditions and limitations. Fair value is determined without
regard to the absence of voting rights for control shares, as of the date of the last control share acquisition by the acquirer or of
any meeting of stockholders at which the voting rights of control shares are considered and not approved. If voting rights for control
shares are approved at a stockholders meeting and the acquirer becomes entitled to vote a majority of the shares entitled to vote, all
other stockholders may exercise appraisal rights. The fair value of the shares as determined for purposes of these appraisal rights may
not be less than the highest price per share paid by the acquirer in the control share acquisition. Some of the limitations and restrictions
otherwise applicable to the exercise of appraisal rights do not apply in the context of a control share acquisition.
Duties of Directors with Respect to Unsolicited Takeovers. Maryland
law provides protection for Maryland corporations against unsolicited takeovers by limiting, among other things, the duties of the directors
in unsolicited takeover situations. The duties of directors of Maryland corporations do not require them to (a) accept, recommend
or respond on behalf of the corporation to any proposal by a person seeking to acquire control of the corporation, (b) make a determination
under the Maryland business combination or control share acquisition statutes described above, or (c) act or fail to act solely because
of the effect the act or failure to act may have on an acquisition or potential acquisition of control of the corporation or the amount
or type of consideration that may be offered or paid to the stockholders in an acquisition. Moreover, under Maryland law the act of a
director of a Maryland corporation relating to or affecting an acquisition or potential acquisition of control is not subject to any higher
duty or greater scrutiny than is applied to any other act of a director. Maryland law also contains a statutory presumption that an act
of a director of a Maryland corporation satisfies the applicable standards of conduct for directors under Maryland law.
Listing
Shares of
Common Stock are listed on the NYSE under the symbol “OHI.”
Transfer Agent and Registrar
The transfer
agent and registrar for our Common Stock is Computershare Trust Company, N.A.
DESCRIPTION
OF WARRANTS
We may issue warrants to purchase preferred stock
or common stock or any combination of the foregoing. Warrants may be attached to or separate from the underlying securities. The warrants
will be issued under warrant agreements to be entered into between us and a bank or trust company, as warrant agent, as detailed in the
prospectus supplement relating to the warrants being offered.
A prospectus supplement relating to any warrants
being offered will include specific terms relating to the offering, including a description of any other securities sold together with
the warrants. Such terms will include:
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the title of the warrants;
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the aggregate number of the warrants;
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the currencies in which the price or prices of the warrants may be payable;
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the designation, amount and terms of the preferred stock or common stock purchasable upon exercise of the warrants and procedures
by which those numbers may be adjusted;
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the designation and terms of the other offered securities, if any, with which the warrants are issued and the number of the warrants
issued with each security;
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if applicable, the date on and after which the warrants and the offered securities purchasable upon exercise of the warrants will
be separately transferable;
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the price or prices at which the offered securities purchasable upon exercise of the warrants may be purchased;
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the date on which the right to exercise the warrants shall commence and the date on which the right shall expire;
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the minimum or maximum amount of the warrants that may be exercised at any one time;
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any terms relating to the modification of the warrants, including adjustments in the exercise price;
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information with respect to book-entry procedures, if any;
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a discussion of any material Federal income tax considerations; and
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any other material terms of the warrants, including terms, procedures, and limitations relating to the transferability, exchange,
exercise or redemption of the warrants.
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The descriptions of the warrants in this prospectus
are summaries of the material provisions that will appear in the applicable agreements. These descriptions do not include all terms of
those agreements and do not contain all of the information that you may find useful. The applicable prospectus supplement will describe
the terms of any warrants in more detail; and we urge you to read the applicable documents because they, and not our summaries and descriptions,
will define your rights as holders of the warrants. The forms of the relevant documents will be filed with the SEC and will be available
as described under the heading “Available Information.”
MATERIAL
U.S. FEDERAL INCOME TAX CONSIDERATIONS
Consequences of an Investment in Our Securities
The following is a general summary of material
U.S. federal income tax considerations applicable to us, and to the purchasers of our securities and our election to be taxed as a REIT.
It is not tax advice. The summary is not intended to represent a detailed description of the U.S. federal income tax considerations applicable
to a particular stockholder in view of any person’s particular circumstances, nor is it intended to represent a description of the
U.S. federal income tax considerations applicable to stockholders subject to special treatment under the federal income tax laws such
as insurance companies, pension plans or other tax-exempt organizations (except to the extent summarized below), financial institutions,
securities broker-dealers, investors in pass-through entities, expatriates, persons that hold their stock as part of a straddle, hedge,
constructive sale or conversion transaction, persons subject to special tax accounting rules under Code Section 451(b), regulated
investment companies, persons whose “functional currency” is not the U.S. dollar, and taxpayers subject to alternative minimum
taxation.
The following discussion relating to an investment
in our securities was based on consultations with Bryan Cave Leighton Paisner LLP, our counsel. In the opinion of Bryan Cave Leighton
Paisner LLP, the following discussion, to the extent it constitutes matters of law or legal conclusions (assuming the facts, representations,
and assumptions upon which the discussion is based are accurate), accurately represents the material U.S. federal income tax considerations
relevant to purchasers of our securities. Bryan Cave Leighton Paisner LLP has not rendered any opinion regarding any effect of such issuance
on purchasers of our securities. The sections of the Code relating to the qualification and operation as a REIT are highly technical and
complex. The following discussion sets forth the material aspects of the Code sections that govern the federal income tax treatment of
a REIT and its stockholders. The information in this section is based on the Code; current, temporary, and proposed Treasury regulations
promulgated under the Code; the legislative history of the Code; current administrative interpretations and practices of the Internal
Revenue Service, which we refer to as the IRS; and court decisions, in each case, as of the date of this prospectus. In addition, the
administrative interpretations and practices of the IRS include its practices and policies as expressed in private letter rulings which
are not binding on the IRS, except with respect to the particular taxpayers who requested and received these rulings.
Taxation of Omega
General. We have elected to be taxed as
a REIT under Sections 856 through 860 of the Code, beginning with our taxable year ended December 31, 1992. We believe that we were
organized and have operated in such a manner as to qualify for taxation as a REIT under the Code. We intend to continue to operate in
a manner that will allow us to maintain our qualification as a REIT, but no assurance can be given that we have operated or will be able
to continue to operate in a manner so as to qualify or remain qualified as a REIT.
The sections of the Code that govern the federal
income tax treatment of a REIT are highly technical and complex. The following sets forth the material aspects of those sections. This
summary is qualified in its entirety by the applicable Code provisions, rules and regulations promulgated thereunder, and administrative
and judicial interpretations thereof.
In the opinion of Bryan Cave Leighton Paisner LLP,
which opinion has been filed as an exhibit to the registration statement of which this prospectus is a part, we were organized in conformity
with the requirements for qualification as a REIT, and our current and proposed method of operation will enable us to continue to meet
the requirements for continued qualification and taxation as a REIT under the Code. This opinion is based on various assumptions and is
conditioned upon certain representations made by us as to factual matters concerning our business and properties. Moreover, such qualification
and taxation as a REIT depends upon our ability to meet, through actual annual operating results, distribution levels and diversity of
stock ownership, the various qualification tests imposed under the Code discussed below, the results of which will not be reviewed by
Bryan Cave Leighton Paisner LLP on an ongoing basis. Accordingly, no assurance can be given that the various results of our operation
for any particular taxable year will satisfy such requirements. Further, such requirements may be changed, perhaps retroactively, by legislative
or administrative actions at any time. We have neither sought nor obtained any formal ruling from the IRS regarding our qualification
as a REIT and presently have no plan to apply for any such ruling. See “Failure to Qualify.”
If we qualify for taxation as a REIT, we generally
will not be subject to federal corporate income taxes on our net income that is currently distributed to stockholders. This treatment
substantially eliminates the “double taxation” (i.e., taxation at both the corporate and the stockholder levels) that generally
results from an investment in a corporation. However, we will be subject to certain federal income taxes as follows: First, we will be
taxed at regular corporate rates on any undistributed REIT taxable income, including undistributed net capital gains; provided, however,
that if we have a net capital gain, we will be taxed at regular corporate rates on our undistributed REIT taxable income, computed without
regard to net capital gain and the deduction for capital gains dividends, plus a 35% tax on undistributed net capital gain, if our tax
as thus computed is less than the tax computed in the regular manner. Second, if we have (i) net income from the sale or other disposition
of “foreclosure property” which is held primarily for sale to customers in the ordinary course of business, or (ii) other
nonqualifying income from foreclosure property, we will be subject to tax at the highest regular corporate rate on such income. Third,
if we have net income from prohibited transactions (which are, in general, certain sales or other dispositions of property (other than
foreclosure property) held primarily for sale to customers in the ordinary course of business by us, (i.e., when we are acting as a dealer)),
such income will be subject to a 100% tax. Fourth, if we should fail to satisfy the 75% gross income test or the 95% gross income test
(as discussed below), but have nonetheless maintained our qualification as a REIT because certain other requirements have been met, we
will be subject to a 100% tax on an amount equal to (a) the gross income attributable to the greater of the amount by which we fail
the 75% or 95% test, multiplied by (b) a fraction intended to reflect our profitability. Fifth, if we should fail to distribute by
the end of each year at least the sum of (i) 85% of our REIT ordinary income for such year, (ii) 95% of our REIT capital gain
net income for such year, and (iii) any undistributed taxable income from prior periods, we will be subject to a 4% excise tax on
the excess of such required distribution over the amounts actually distributed. Sixth, we will be subject to a 100% excise tax on transactions
with a taxable REIT subsidiary, which we refer to as a TRS, that are not conducted on an arm’s-length basis. Seventh, if we acquire
any asset that is defined as a “built-in gain asset” from a C corporation that is not a REIT (i.e., generally a corporation
subject to full corporate-level tax) in a transaction in which the basis of the built-in gain asset in our hands is determined by reference
to the basis of the asset (or any other property) in the hands of the C corporation, and we recognize gain on the disposition of such
asset during the 10-year period beginning on the date on which such asset was acquired by us, which is defined as the “recognition
period,” then, to the extent of the built-in gain (i.e., the excess of (a) the fair market value of such asset on the date
such asset was acquired by us over (b) our adjusted basis in such asset on such date), our recognized gain will be subject to tax
at the highest regular corporate rate. The results described above with respect to the recognition of built-in gain assume that we will
not make an election pursuant to Treasury Regulations Section 1.337(d)-7(c)(5).
Requirements for Qualification. The Code
defines a REIT as a domestic corporation, trust or association: (1) which is managed by one or more trustees or directors; (2) the
beneficial ownership of which is evidenced by transferable shares, or by transferable certificates of beneficial interest; (3) which
would be taxable as a domestic corporation, but for Sections 856 through 859 of the Code; (4) which is neither a financial institution
nor an insurance company as defined in provisions of the Code; (5) the beneficial ownership of which is held by 100 or more persons;
(6) during the last half year of each taxable year not more than 50% in value of the outstanding stock of which is owned, actually
or constructively, by five or fewer individuals (as defined in the Code to include certain entities); and (7) which meets certain
other tests, described below, regarding the nature of its income and assets and the amount of its annual distributions to stockholders.
The Code provides that conditions (1) to (4), inclusive, must be met during the entire taxable year and that condition (5) must
be met during at least 335 days of a taxable year of twelve months, or during a proportionate part of a taxable year of less than twelve
months. For purposes of conditions (5) and (6), pension funds and certain other tax-exempt entities are treated as individuals, subject
to a “look-through” exception in the case of condition (6). We may avoid disqualification as a REIT for a failure to satisfy
any of these tests if such failure is due to reasonable cause and not willful neglect, and we pay a penalty of $50,000 for each such failure.
Income Tests. To maintain our qualification
as a REIT, we annually must satisfy two gross income requirements. First, at least 75% of our gross income (excluding gross income from
prohibited transactions) for each taxable year must be derived directly or indirectly from investments relating to real property or mortgages
on real property (including generally “rents from real property,” interest on mortgages on real property and gains on sale
of real property and real property mortgages, other than property described in Section 1221(a)(1) of the Code) and income derived
from certain types of temporary investments. Second, at least 95% of our gross income (excluding gross income from prohibited transactions)
for each taxable year must be derived from such real property investments, dividends, interest, and gain from the sale or disposition
of stock or securities other than property held for sale to customers in the ordinary course of business.
Rents received by us will qualify as “rents
from real property” in satisfying the gross income requirements for a REIT described above only if several conditions are met. First,
the amount of the rent must not be based in whole or in part on the income or profits of any person. However, any amount received or accrued
generally will not be excluded from the term “rents from real property” solely by reason of being based on a fixed percentage
or percentages of receipts or sales. Second, the Code provides that rents received from a tenant (other than rent from a tenant that is
a TRS that meets the requirements described below) will not qualify as “rents from real property” in satisfying the gross
income tests if we or an owner (actually or constructively) of 10% or more of the value of our stock, actually or constructively owns
10% or more of such tenant, which is defined as a related party tenant, taking into account certain complex attribution rules. Third,
if rent attributable to personal property, leased in connection with a lease of real property, is greater than 15% of the total rent received
under the lease, then the portion of rent attributable to such personal property will not qualify as “rents from real property.”
Finally, for rents received to qualify as “rents from real property,” we generally must not operate or manage the property
or furnish or render services to the tenants of such property, other than through an independent contractor from which we derive no revenue.
We may, however, directly perform certain services that are “usually or customarily rendered” in connection with the rental
of space for occupancy only and are not otherwise considered “rendered to the occupant” of the property. In addition, we may
directly provide a minimal amount of “non-customary” services to the tenants of a property as long as our income from the
services does not exceed 1% of our income from the related property. Furthermore, we may own up to 100% of the stock of a TRS, which may
provide customary and non-customary services to our tenants without tainting our rental income from the related properties.
The term “interest” generally does
not include any amount received or accrued (directly or indirectly) if the determination of such amount depends in whole or in part on
the income or profits of any person. However, an amount received or accrued generally will not be excluded from the term “interest”
solely by reason of being based on a fixed percentage or percentages of gross receipts or sales. In addition, an amount that is based
on the income or profits of a debtor will be qualifying interest income as long as the debtor derives substantially all of its income
from the real property securing the debt from leasing substantially all of its interest in such real property, but only to the extent
that the amounts received by the debtor would be qualifying “rents from real property” if received directly by a REIT.
If a loan contains a provision that entitles us
to a percentage of the borrower’s gain upon the sale of the real property securing the loan or a percentage of the appreciation
in the property’s value as of a specific date, income attributable to that loan provision will be treated as gain from the sale
of the property securing the loan, which generally is qualifying income for purposes of both gross income tests.
Interest on debt secured by mortgages on real property
or on interests in real property generally is qualifying income for purposes of the 75% gross income test. However, if the highest principal
amount of a loan outstanding during a taxable year exceeds the fair market value of the real property securing the loan as of the date
we agreed to originate or acquire the loan, a portion of the interest income from such loan will not be qualifying income for purposes
of the 75% gross income test, but will be qualifying income for purposes of the 95% gross income test. The portion of the interest income
that will not be qualifying income for purposes of the 75% gross income test will be equal to the portion of the principal amount of the
loan that is not secured by real property. A modification of a mortgage loan, if it is deemed significant for income tax purposes, could
be considered to be the deemed issuance of a new mortgage loan that is subject to re-testing under these rules, with the possible re-characterization
of the mortgage interest on such loan as non-qualifying income for purposes of the 75% gross income test (but not the 95% gross income
test, which is discussed below), as well as non-qualifying assets under the asset test (discussed below) and the deemed exchange of the
modified loan for the new loan could result in imposition of the 100% prohibited transaction tax (also discussed below). IRS guidance
provides relief in the case of certain existing mortgage loans held by a REIT that are modified in response to certain distressed market
conditions such that (i) the modified mortgage loan need not be re-tested for purposes of determining whether the income from the
mortgage loan continues to be qualified income for purposes of the 75% gross income test or whether the mortgage loan retains its character
as a qualified REIT asset for purposes of the asset test (discussed below), and (ii) the modification of the loan will not be treated
as a prohibited transaction. At present, we do not hold any mortgage loans that have been modified, which would require us to take advantage
of these rules for special relief. We monitor our mortgage loans and direct financing leases for compliance with the above rules.
Prohibited Transactions. We will incur a
100% tax on the net income derived from any sale or other disposition of property, other than foreclosure property, that we hold primarily
for sale to customers in the ordinary course of a trade or business. We believe that none of our assets is primarily held for sale to
customers and that a sale of any of our assets would not be in the ordinary course of our business. Whether a REIT holds an asset primarily
for sale to customers in the ordinary course of a trade or business depends, however, on the facts and circumstances in effect from time
to time, including those related to a particular asset. Nevertheless, we will attempt to comply with the terms of safe-harbor provisions
in the federal income tax laws prescribing when an asset sale will not be characterized as a prohibited transaction. The terms of these
safe-harbor provisions relate primarily to the number and/or amount of properties disposed of by a REIT, the period of time the property
has been held by the REIT, and/or aggregate expenditures made by the REIT with respect to the property being disposed of. We cannot assure
you, however, that we can comply with the safe-harbor provisions or that we will avoid owning property that may be characterized as property
that we hold primarily for sale to customers in the ordinary course of a trade or business.
Foreclosure Property. We will be subject
to tax at the maximum corporate rate on any income from foreclosure property, other than income that otherwise would be qualifying income
for purposes of the 75% gross income test, less expenses directly connected with the production of that income. However, gross income
from foreclosure property is treated as qualifying for purposes of the 75% and 95% gross income tests. Foreclosure property is any real
property, including interests in real property, and any personal property incident to such real property:
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that is acquired by a REIT as the result of the REIT having bid on such property at foreclosure, or having otherwise reduced such
property to ownership or possession by agreement or process of law, after there was a default or default was imminent on a lease of such
property or on indebtedness that such property secured;
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for which the related loan or lease was acquired by the REIT at a time when the default was not imminent or anticipated; and
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for which the REIT makes a proper election to treat the property as foreclosure property.
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Such property generally ceases to be foreclosure
property at the end of the third taxable year following the taxable year in which the REIT acquired the property, or longer (for a total
of up to six years) if an extension is granted by the Secretary of the Treasury. In the case of a “qualified health care property”
acquired solely as a result of termination of a lease, but not in connection with default or an imminent default on the lease, the initial
grace period terminates at the end of the second (rather than third) taxable year following the year in which the REIT acquired the property
(unless the REIT establishes the need for and the Secretary of the Treasury grants one or more extensions, not exceeding six years in
total, including the original two-year period, to provide for the orderly leasing or liquidation of the REIT’s interest in the qualified
health care property). This grace period terminates and foreclosure property ceases to be foreclosure property on the first day:
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on which a lease is entered into for the property that, by its terms, will give rise to income that does not qualify for purposes
of the 75% gross income test, or any amount is received or accrued, directly or indirectly, pursuant to a lease entered into on or after
such day that will give rise to income that does not qualify for purposes of the 75% gross income test;
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on which any construction takes place on the property, other than completion of a building or any other improvement, where more than
10% of the construction was completed before default became imminent; or
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which is more than 90 days after the day on which the REIT acquired the property and the property is used in a trade or business that
is conducted by the REIT, other than through an independent contractor from whom the REIT itself does not derive or receive any income.
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The definition of foreclosure property includes
any “qualified health care property,” as defined in Code Section 856(e)(6), acquired by us as the result of the termination
or expiration of a lease of such property. We have from time to time operated qualified healthcare facilities acquired in this manner
for up to two years (or longer if an extension was granted). However, we do not currently own any property with respect to which we have
made foreclosure property elections. Properties that we had acquired in a foreclosure or bankruptcy and operated for our own account were
treated as foreclosure properties for income tax purposes, pursuant to Code Section 856(e). Gross income from foreclosure properties
was classified as “good income” for purposes of the annual REIT income tests upon making the election on the tax return. Once
made, the income was classified as “good” for a period of three years, or until the properties were no longer operated for
our own account. In all cases of foreclosure property, we utilized an independent contractor to conduct day-to-day operations to comply
with certain REIT requirements. In certain cases, we operated these facilities through a taxable REIT subsidiary. For those properties
operated through the taxable REIT subsidiary, we utilized an eligible independent contractor to conduct day-to-day operations to comply
with certain REIT requirements. As a result of the foregoing, we do not believe that our participation in the operation of nursing homes
increased the risk that we would fail to qualify as a REIT. We cannot predict whether, in the future, our income from foreclosure property
will be significant and whether we could be required to pay a significant amount of tax on that income.
Hedging Transactions. From time to time,
we may enter into hedging transactions with respect to one or more of our assets or liabilities. Our hedging activities may include entering
into interest rate swaps, caps and floors, options to purchase these items and futures and forward contracts. To the extent that we enter
into an interest rate swap or cap contract, option, futures contract, forward rate agreement, or any similar financial instrument to hedge
our indebtedness incurred to acquire or carry “real estate assets,” any periodic income or gain from the disposition of that
contract should be qualifying income for purposes of the 95% gross income test, but not the 75% gross income test. Accordingly, our income
and gain from our interest rate swap agreements generally is qualifying income for purposes of the 95% gross income test, but not the
75% gross income test. To the extent that we hedge with other types of financial instruments, or in other situations, it is not entirely
clear how the income from those transactions will be treated for purposes of the gross income tests. We have structured and intend to
continue to structure any hedging transactions in a manner that does not jeopardize our status as a REIT. For tax years beginning after
2004, we were no longer required to include income from hedging transactions in gross income (i.e., not included in either the numerator
or the denominator) for purposes of the 95% gross income test and we are no longer required to include in gross income (i.e., not included
in either the numerator or the denominator) for purposes of the 75% gross income test any gross income from any hedging transaction entered
into after July 30, 2008. We believe that we have structured and intend to continue to structure any hedging transactions in a manner
that does not jeopardize our status as a REIT.
TRS Income. A TRS may earn income that would
not be qualifying income if earned directly by the parent REIT. Both the subsidiary and the REIT must jointly elect to treat the subsidiary
as a TRS. A corporation of which a TRS directly or indirectly owns more than 35% of the voting power or value of the stock will automatically
be treated as a TRS. Overall, no more than 20% (25% prior to 2018) of the value of a REIT’s assets may consist of securities of
one or more TRSs. Prior to 2009, a TRS was not permitted to directly or indirectly (i) operate or manage a health care (or lodging)
facility, or (ii) provide to any other person (under a franchise, license, or otherwise) rights to any brand name under which a health
care (or lodging) facility is operated. Beginning in 2009, TRSs became permitted to own or lease a health care facility provided that
the facility is operated and managed by rents receive an “eligible independent contractor.” A TRS will pay income tax at regular
corporate rates on any income that it earns. In addition, the new rules limit the deductibility of interest paid or accrued by a
TRS to its parent REIT to assure that the TRS is subject to an appropriate level of corporate taxation. The rules also impose a 100%
excise tax on transactions between a TRS and its parent REIT or the REIT’s operators that are not conducted on an arm’s-length
basis. As stated above, we do not lease any of our facilities to any of our TRSs.
Failure to Satisfy, Income
Tests. If we fail to satisfy one or both of the 75% or 95% gross income tests for any taxable year, we may nevertheless qualify as
a REIT for such year if we are entitled to relief under certain provisions of the Code. These relief provisions will be generally available
if our failure to meet such tests was due to reasonable cause and not due to willful neglect, we attach a schedule of the sources of our
income to our tax return, and any incorrect information on the schedule was not due to fraud with intent to evade tax. It is not possible,
however, to state whether in all circumstances we would be entitled to the benefit of these relief provisions. Even if these relief provisions
apply, we would incur a 100% tax on the gross income attributable to the greater of the amounts by which we fail the 75% and 95% gross
income tests, multiplied by a fraction intended to reflect our profitability and we would file a schedule with descriptions of each item
of gross income that caused the failure.
Asset Tests. At the close of each quarter
of our taxable year, we must also satisfy the following tests relating to the nature of our assets. First, at least 75% of the value of
our total assets must be represented by real estate assets including (i) our allocable share of real estate assets held by partnerships
in which we own an interest, (ii) stock or debt instruments held for less than one year purchased with the proceeds of a stock offering
or long-term (at least five years) debt offering of our company, and (iii) debt instruments (whether or not secured by real property)
that are issued by a “publicly offered REIT” (i.e. a REIT that is required to file annual and periodic reports with the Securities
and Exchange Commission under the Securities Exchange Act of 1934), cash, cash items and government securities. Second, of our investments
not included in the 75% asset class, the value of our interest in any one issuer’s securities may not exceed 5% of the value of
our total assets. Third, we may not own more than 10% of the voting power or value of any one issuer’s outstanding securities (subject
to the discussion below regarding TRSs and QRSs). Fourth, no more than 20% (25% prior to 2018) of the value of our total assets may consist
of the securities of one or more TRSs. Fifth, no more than 25% of the value of our total assets may consist of the securities of TRSs
and other non-TRS taxable subsidiaries and other assets that are not qualifying assets for purposes of the 75% asset test. Sixth, no more
than 25% of the total value of our assets may be represented by “nonqualified publicly offered REIT debt instruments” (i.e.
real estate assets that would cease to be real estate assets if debt instruments issued by publicly offered REITs were not included in
the definition of real estate assets).
For purposes of the second and third asset tests,
the term “securities” does not include our equity or debt securities of a qualified REIT subsidiary, a TRS, or equity interest
in any partnership, but does include our proportionate share of any securities held by any partnership of which we are a partner. Furthermore,
for purposes of determining whether we own more than 10% of the value of only one issuer’s outstanding securities, the term “securities”
does not include: (i) any loan to an individual or an estate; (ii) any Code Section 467 rental agreement; (iii) any
obligation to pay rents from real property; (iv) certain government issued securities; (v) any security issued by another REIT;
and (vi) our debt securities in any partnership, not otherwise excepted under (i) through (v) above, (A) to the extent
of our interest as a partner in the partnership or (B) if 75% of the partnership’s gross income is derived from sources described
in the 75% income test set forth above.
We may own up to 100% of the stock of one or more
TRSs. However, overall, no more than 20% (25% prior to 2018) of the value of our assets may consist of securities of one or more TRSs,
and no more than 25% of the value of our assets may consist of the securities of TRSs and other non-TRS taxable subsidiaries (including
stock in non-REIT C corporations) and other assets that are not qualifying assets for purposes of the 75% asset test.
If the outstanding principal balance of a mortgage
loan exceeds the fair market value of the real property securing the loan, a portion of such loan likely will not be a qualifying real
estate asset for purposes of the 75% test. The non-qualifying portion of that mortgage loan will be equal to the portion of the loan amount
that exceeds the value of the associated real property. As discussed above under the 75% gross income test, IRS guidance provides
relief from re-testing certain mortgage loans held by a REIT that have been modified as a result of certain distressed market conditions
with respect to real property. At present, we do not hold any mortgage loans that have been modified, which would require us to take advantage
of these rules for special relief.
After initially meeting the asset tests at the
close of any quarter, we will not lose our status as a REIT for failure to satisfy any of the asset tests at the end of a later quarter
solely by reason of changes in asset values. If the failure to satisfy the asset tests results from an acquisition of securities or other
property during a quarter, the failure can be cured by disposition of sufficient non-qualifying assets within 30 days after the close
of that quarter.
Subject to certain de minimis exceptions, we may
avoid REIT disqualification in the event of certain failures under the asset tests, provided that (i) we file a schedule with a description
of each asset that caused the failure, (ii) the failure was due to reasonable cause and not willful neglect, (iii) we dispose
of the assets within 6 months after the last day of the quarter in which the identification of the failure occurred (or the requirements
of the rules are otherwise met within such period) and (iv) we pay a tax on the failure equal to the greater of (A) $50,000
per failure and (B) the product of the net income generated by the assets that caused the failure for the period beginning on the
date of the failure and ending on the date we dispose of the asset (or otherwise satisfy the requirements) multiplied by the highest applicable
corporate tax rate.
Annual Distribution Requirements. To qualify
as a REIT, we are required to distribute dividends (other than capital gain dividends) to our stockholders in an amount at least equal
to (A) the sum of (i) 90% of our “REIT taxable income” (computed without regard to the dividends paid deduction
and our net capital gain) and (ii) 90% of the net income (after tax), if any, from foreclosure property, minus (B) the excess
of the sum of certain items of noncash income over 5% of our REIT taxable income, computed without regard to our net capital gains and
the deduction for dividends paid.
Such distributions must be paid in the taxable
year to which they relate, or in the following taxable year if declared before we timely file our tax return for such year and paid on
or before the first regular dividend payment after such declaration. In addition, such distributions are required to be made pro rata,
with no preference to any share of stock as compared with other shares of the same class, and with no preference to one class of stock
as compared with another class except to the extent that such class is entitled to such a preference. To the extent that we do not distribute
all of our net capital gain or distribute at least 90%, but less than 100% of our “REIT taxable income,” as adjusted, we will
be subject to tax thereon at regular corporate tax rates. Furthermore, if we fail to distribute during a calendar year, or by the end
of January following the calendar year in the case of distributions with declaration and record dates falling in the last three months
of the calendar year, at least the sum of:
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85% of our REIT ordinary income for such year;
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95% of our REIT capital gain income for such year; and
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any undistributed taxable income from prior periods,
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we will incur a 4% nondeductible excise tax on the excess of such required
distribution over the amounts we actually distribute. We may elect to retain and pay income tax on the net long-term capital gain we receive
in a taxable year. If we so elect, we will be treated as having distributed any such retained amount for purposes of the 4% excise tax
described above. We have made, and we intend to continue to make, timely distributions sufficient to satisfy the annual distribution requirements.
We may also be entitled to pay and deduct deficiency dividends in later years as a relief measure to correct errors in determining our
taxable income. Although we may be able to avoid income tax on amounts distributed as deficiency dividends, we will be required to pay
interest to the IRS based upon the amount of any deduction we take for deficiency dividends.
The availability to us of, among other things,
depreciation deductions with respect to our owned facilities depends upon the treatment by us as the owner of such facilities for federal
income tax purposes, and the classification of the leases with respect to such facilities as “true leases” rather than financing
arrangements for federal income tax purposes. The questions of whether we are the owner of such facilities and the leases are true leases
for federal tax purposes, are essentially factual matters. We believe that we will be treated as the owner of each of the facilities that
we lease, and such leases will be treated as true leases for federal income tax purposes. However, no assurances can be given that the
IRS will not successfully challenge our status as the owner of our facilities subject to leases, and the status of such leases as true
leases, asserting that the purchase of the facilities by us and the leasing of such facilities merely constitute steps in secured financing
transactions in which the lessees are owners of the facilities and we are merely a secured creditor. In such event, we would not be entitled
to claim depreciation deductions with respect to any of the affected facilities.
Reasonable Cause Savings Clause. We may
avoid disqualification in the event of a failure to meet certain requirements for REIT qualification if the failures are due to reasonable
cause and not willful neglect, and if the REIT pays a penalty of $50,000 for each such failure. This reasonable cause safe harbor is not
available for failures to meet the 95% and 75% gross income tests or the asset tests.
Failure to Qualify
If we fail to qualify as a REIT in any taxable
year, and the reasonable cause relief provisions do not apply, we will be subject to tax on our taxable income at regular corporate rates.
Distributions to stockholders in any year in which we fail to qualify will not be deductible and our failure to qualify as a REIT would
reduce the cash available for distribution by us to our stockholders. In addition, if we fail to qualify as a REIT, all distributions
to stockholders will be taxable as ordinary income, to the extent of current and accumulated earnings and profits. However, in such a
case, subject to certain limitations of the Code, corporate distributees may be eligible for the dividends-received deduction with respect
to dividends that we make, and in the case of an individual, trust, or an estate, dividends are treated the same as capital gain income,
which currently is subject to a maximum income tax rate that is lower than regular income tax rates. In addition, in the case of an individual,
trust or an estate, to the extent such taxpayer’s unearned income (including dividends) exceeds certain threshold amounts, the 3.8%
tax on certain “net investment income” also will apply to dividend income. Unless entitled to relief under specific statutory
provisions, we would also be disqualified from taxation as a REIT for the four taxable years following the year during which qualification
was lost. It is not possible to state whether in all circumstances we would be entitled to such statutory relief. Failure to qualify could
result in our incurring indebtedness or liquidating investments in order to pay the resulting taxes.
Other Tax Matters
We own and operate a number of properties through
subsidiaries and the classification of such subsidiaries varies for federal income tax purposes as described in this section. Some of
these subsidiaries elected to be taxed as REITs beginning with the calendar year ending December 31, 2015. The stock of the REIT
subsidiaries, and dividends received from the REIT subsidiaries, will qualify under the asset tests and income tests, respectively, as
described above; provided that such subsidiaries maintain their REIT qualification.
Our REIT subsidiaries own and operate a number
of properties through subsidiaries, known as qualified REIT subsidiaries, which we refer to as QRSs. Code Section 856(i) provides
that a corporation that is QRS shall not be treated as a separate corporation, and all assets, liabilities, and items of income, deduction,
and credit of a QRS shall be treated as assets, liabilities and such items (as the case may be) of the REIT. Thus, in applying the tests
for REIT qualification to our REIT subsidiaries described in this prospectus under the heading “Taxation of Omega,” the QRSs
will be ignored, and all assets, liabilities and items of income, deduction, and credit of such QRSs will be treated as assets, liabilities
and items of income, deduction, and credit of our REIT subsidiaries.
In the case of a REIT that is a partner in a partnership
(such as our Operating Partnership), such REIT is treated as owning its proportionate share of the assets of the partnership and as earning
its allocable share of the gross income of the partnership for purposes of the applicable REIT qualification tests. Thus, our proportionate
share of the assets, liabilities, and items of income of our Operating Partnership and any other partnership, joint venture, or limited
liability company that is treated as a partnership for federal income tax purposes in which we own an interest, directly or indirectly,
will be treated as our assets and gross income for purposes of applying the various REIT qualification requirements.
Taxation of Taxable U.S. Holders That Are Not Tax-Exempt
Distribution. So long as Omega qualifies
for taxation as a REIT, distributions on shares of Omega’s stock made to U.S. holders out of the current or accumulated earnings
and profits allocable to these distributions (and not designated as capital gain dividends) will be includable as ordinary income for
federal income tax purposes. None of these distributions will be eligible for the dividends-received deduction for corporate U.S. holders.
Additionally, Omega’s ordinary dividends will generally not qualify as qualified dividend income, which, for individuals, trusts
and estates, is included in the computation of net capital gain, which can be taxed at rates that are lower than ordinary income rates.
Any distribution declared by Omega in October, November or December of any year on a specified date in any such month shall
be treated as both paid by Omega and received by Omega’s stockholders on December 31 of that year, provided that the distribution
is actually paid by Omega no later than January 31 of the following year. Distributions made by Omega in excess of current or accumulated
earnings and profits will be treated as a nontaxable return of capital to the extent of a U.S. holder’s basis and will reduce the
basis of the U.S. holder’s shares. Any distributions by Omega in excess of current or accumulated earnings and profits and in excess
of a U.S. holder’s basis in the U.S. holder’s shares will be treated as gain from the sale of Omega’s shares. See “Disposition
of Stock of Omega” below.
Qualified REIT Dividends. Distributions
that we make to our U.S. holders out of current or accumulated earnings and profits that we do not designate as “capital gain dividends”
or “qualified dividend income” (as described below) for tax years beginning before January 1, 2026, generally will entitle
individuals, trusts and estates to the 20% pass-through deduction. Corporate stockholders are not entitled to the pass-through deduction
or the dividends-received deduction with respect to our distributions. A noncorporate U.S. holder’s ability to claim the deduction
equal to 20% of qualifying dividends received may be limited by the U.S. holder’s particular circumstances. In addition, for any
noncorporate U.S. holder that claims a deduction in respect of qualifying dividends, the maximum threshold for the accuracy-related penalty
with respect to substantial understatements of income tax could be reduced from 10% to 5%.
Capital Gains Dividends. Distributions to
U.S. holders that are designated as capital gain dividends will be taxed as long-term capital gains (to the extent they do not exceed
Omega’s actual net capital gain for the taxable year), without regard to the period for which a U.S. holder held Omega’s shares.
However, a corporate U.S. holder, may be required to treat a portion of some capital gain dividends as ordinary income. If Omega elects
to retain and pay income tax on any net long-term capital gain, each of Omega’s U.S. holders would include in income, as long-term
capital gain, its proportionate share of this net long-term capital gain. Each of Omega’s U.S. holders would also receive a refundable
tax credit for its proportionate share of the tax paid by Omega on such retained capital gains and increase the basis of its shares of
Omega’s stock in an amount equal to the amount of includable capital gains reduced by the share of refundable tax credit.
Disposition of Stock of Omega. Upon any
taxable sale or other disposition of any shares of Omega’s stock, a U.S. holder will generally recognize capital gain or loss equal
to the difference between the amount realized on the sale or exchange and the U.S. holder’s adjusted tax basis in such shares of
Omega’s stock. This gain will be capital gain if the U.S. holder held such shares of Omega’s stock as a capital asset, and
will be long-term capital gain or loss if such U.S. holder held such shares for more than one (1) year.
3.8% Tax on Net Investment Income. Certain
U.S. holders of Omega’s stock who are individuals, estates or trusts and whose income exceeds certain thresholds will be required
to pay a 3.8% tax on certain “net investment income” including dividends on Omega’s stock and capital gains from the
sale or other disposition of Omega’s stock.
Taxation of Tax-Exempt Stockholders
Tax-exempt entities are generally exempt from federal
income taxation. However, they are subject to taxation on their unrelated business taxable income, which we refer to as UBTI. Distributions
made by Omega to a U.S. holder that is a tax-exempt entity (such as an individual retirement account, which we refer to as an IRA, or
a 401(k) plan) generally should not constitute UBTI, unless such tax-exempt U.S. holder has financed the acquisition of its shares
with “acquisition indebtedness” within the meaning of the Code, or the shares are otherwise used in an unrelated trade or
business conducted by such U.S. holder.
However, for tax-exempt stockholders that are social
clubs, voluntary employee benefit associations, supplemental unemployment benefit trusts and qualified group legal services plans exempt
from federal income taxation under Sections 501(c)(7), (c)(9), (c)(17) and (c)(20) of the Code, respectively, income from an investment
in Omega will constitute UBTI unless the organization properly sets aside or reserves such amounts for purposes specified in the Code.
Special rules apply to certain tax-exempt
pension funds (including 401(k) plans but excluding IRAs or government pension plans) that own more than 10% (measured by value)
of a “pension-held REIT.” Such a pension fund may be required to treat a certain percentage of all dividends received from
the REIT during the year as UBTI. The percentage is equal to the ratio of the REIT’s gross income (less direct expenses related
thereto) derived from the conduct of unrelated trades or businesses determined as if the REIT were a tax-exempt pension fund (including
income from activities financed with “acquisition indebtedness”), to the REIT’s gross income (less direct expenses related
thereto) from all sources. The special rules will not require a pension fund to recharacterize a portion of its dividends as UBTI
unless the percentage computed is at least 5%.
A REIT will be treated as a “pension-held
REIT” if the REIT is predominantly held by tax-exempt pension funds and if the REIT would otherwise fail to satisfy the five or
fewer test discussed above. A REIT is predominantly held by tax-exempt pension funds if at least one tax-exempt pension fund holds more
than 25% (measured by value) of the REIT’s stock or beneficial interests, or if one or more tax-exempt pension funds (each of which
owns more than 10% (measured by value) of the REIT’s stock or beneficial interests) own in the aggregate more than 50% (measured
by value) of the REIT’s stock or beneficial interests. Omega believes that it will not be treated as a pension-held REIT. However,
because the shares of Omega are publicly traded, no assurance can be given that Omega is not or will not become a pension-held REIT.
Information Reporting Requirements and Backup Withholding Tax
Omega will report to its U.S. holders and to the
IRS the amount of dividends paid during each calendar year and the amount of tax withheld, if any, with respect thereto. Generally, backup
withholding will apply to such dividends if:
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you fail to furnish a TIN in the prescribed manner;
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the IRS notifies us that the TIN furnished by you is incorrect;
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the IRS notifies us that you are subject to backup withholding because you failed to report properly the receipt of reportable interest
or dividend payments; or
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you fail to certify under penalties of perjury that you are not subject to backup withholding.
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A U.S. holder who does not provide Omega with the
holder’s correct taxpayer identification number also may be subject to penalties imposed by the IRS. Backup withholding is not an
additional tax and any amounts withheld will be allowed as a refund or credit against the U.S. holder’s United States federal income
tax liability, provided that the required information is timely furnished to the IRS. In addition, Omega may be required to withhold a
portion of any capital gain distributions made to U.S. holders who fail to certify their non-foreign status to Omega. Additional issues
may arise pertaining to information reporting and backup withholding with respect to non-U.S. holders, and non-U.S. holders should consult
their tax advisors with respect to any such information reporting and backup withholding requirements.
Taxation of Non-U.S. Holders
The rules governing non-U.S. holders are complex,
and the following discussion is intended only as a summary of such rules. Non-U.S. holders should consult with their own tax advisors
to determine the impact of United States federal, state, and local income tax laws on an investment in stock of Omega, including any reporting
requirements.
Distributions Not Attributable to Gain from
the Sale or Exchange of a “United States Real Property Interest.” Distributions made by Omega to non-U.S. holders that
are not attributable to gain from the sale or exchange by Omega of United States real property interests, which we refer to as USRPI,
and that are not designated by Omega as capital gain dividends will be treated as ordinary income dividends to non-U.S. holders to the
extent made out of current or accumulated earnings and profits of Omega. Generally, such ordinary income dividends will be subject to
United States withholding tax at the rate of 30% on the gross amount of the dividend paid unless reduced or eliminated by an applicable
United States income tax treaty. Omega expects to withhold United States income tax at the rate of 30% on the gross amount of any such
dividends paid to a non-U.S. holder unless a lower treaty rate applies and the non-U.S. holder has filed an applicable IRS Form W-8
with Omega, certifying the non-U.S. holder’s entitlement to treaty benefits.
If the investment in our stock is treated as effectively
connected with a non-U.S. holder’s conduct of a U.S. trade or business, the non-U.S. holder generally will be subject to a tax at
the graduated rates applicable to ordinary income, in the same manner as a U.S. holder is taxed with respect to ordinary dividend income
(and also may be subject to the 30% branch profits tax in the case of a non-U.S. holder that is a foreign corporation that is not entitled
to any treaty exemption). In general, a non-U.S. holder will not be considered to be engaged in a U.S. trade or business solely as a result
of its ownership of our stock unless we are provided with an IRS Form W-8ECI by such non-U.S. Holder.
Distributions made by Omega in excess of its current
and accumulated earnings and profits to a non-U.S. holder who owns not more than 10% of the stock of Omega (after application of certain
ownership rules) will not be subject to U.S. income or withholding tax. If it cannot be determined at the time a distribution is made
whether or not such distribution will be in excess of Omega’s current and accumulated earnings and profits, the distribution will
be subject to withholding at the rate applicable to a dividend distribution (i.e., 30% or lower treaty rate). However, the non-U.S. holder
may seek a refund from the IRS of any amount withheld if it is subsequently determined that such distribution was, in fact, in excess
of Omega’s then current and accumulated earnings and profits by filing a U.S. federal income tax return.
Distributions Attributable to Gain from the
Sale or Exchange of a “United States Real Property Interest.” So long as Omega’s stock continues to be regularly
traded on an established securities market located in the United States, such as the NYSE, distributions to a non-U.S. holder holding
not more than 10% at all times during the one-year period ending on the date of the distribution will not be treated as attributable to
gain from the sale or exchange of a USRPI. See “Distributions Not Attributable to Gain from the Sale or Exchange of a ‘United
States Real Property Interest.’”
Distributions made by Omega to non-U.S. holders
that are attributable to gain from the sale or exchange of any USRPI will be taxed to a non-U.S. holder under the Foreign Investment in
Real Property Tax Act of 1980, which we refer to as FIRPTA. Under FIRPTA, such distributions are taxed to a non-U.S. holder as if the
distributions were gains “effectively connected” with a United States trade or business. Accordingly, a non-U.S. holder will
be taxed on distributions made by Omega that are attributable to gain from the sale or exchange of any USRPI at the normal capital gain
rates applicable to a U.S. holder. Distributions subject to FIRPTA also may be subject to a 30% branch profits tax when made to a corporate
non-U.S. holder that is not entitled to a treaty exemption. Omega is required to withhold 21% of any distribution that is attributable
to gain from the sale or exchange by Omega of any USRPI, whether or not designated by Omega as a capital gains dividend. Such amount is
creditable against the non-U.S. holder’s FIRPTA tax liability.
Sale or Disposition of Stock of Omega. Generally,
gain recognized by a non-U.S. holder upon the sale or exchange of stock of Omega will not be subject to United States taxation unless
such stock constitutes a USRPI within the meaning of the FIRPTA. The stock of Omega will not constitute a USRPI so long as Omega is a
“domestically controlled REIT.” A “domestically controlled REIT” is a REIT in which at all times during a specified
testing period less than 50% in value of its stock or beneficial interests are held directly or indirectly by non-U.S. holders. For purposes
of determining if we are domestically-controlled, we may assume that any shareholder owing less 5% of our stock is a U.S. person unless
we have actual knowledge that such shareholder is not a U.S. person. Omega believes that generally it has been and will continue to be
a “domestically controlled REIT,” and therefore that the sale of stock of Omega will generally not be subject to taxation
under FIRPTA. However, because the stock of Omega is publicly traded, no assurance can be given that Omega is or will continue to be a
“domestically controlled REIT.”
If Omega does not constitute a “domestically
controlled REIT,” gain arising from the sale or exchange by a non-U.S. holder of stock of Omega would be subject to United States
taxation under FIRPTA as a sale of a USRPI unless (i) the stock of Omega is regularly traded on an established securities market,
such as the NYSE, located in the United States and (ii) the selling non-U.S. holder’s interest (after application of certain
constructive ownership rules) in Omega is not more than 10% at all times during the five years preceding the sale or exchange. If gain
on the sale or exchange of the stock of Omega were subject to taxation under FIRPTA, the non-U.S. holder would be subject to regular United
States income tax with respect to such gain in the same manner as a U.S. holder (subject to the possible application of the 30% branch
profits tax in the case of foreign corporations), and the purchaser of the stock of Omega (including Omega) would be required to withhold
and remit to the IRS 15% of the gross purchase price. Additionally, in such case, distributions on the stock of Omega to the extent they
represent a return of capital or capital gain from the sale of the stock of Omega, rather than dividends, would be subject to a 15% withholding
tax. Capital gains not subject to FIRPTA will nonetheless be taxable in the United States to a non-U.S. holder in two cases:
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if the non-U.S. holder’s investment in the stock of Omega is effectively connected with a United States trade or business conducted
by such non-U.S. holder, the non-U.S. holder will be subject to the same treatment as a U.S. holder with respect to such gain; or
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if the non-U.S. holder is a nonresident alien individual who was present in the United States for 183 days or more during the taxable
year and has a “tax home” in the United States, the nonresident alien individual will be subject to the same treatment as
a U.S. holder with respect to such gain.
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Foreign Account Tax Compliance Act
Sections 1471 through 1474 of the Code, which we
refer to as FATCA, impose a 30% U.S. federal withholding tax on payments of dividends on our stock made to (i) a “foreign financial
institution,” as defined under such rules, unless such institution enters into an agreement with the Treasury Department to, among
other things, collect and provide to it substantial information regarding such institution’s United States financial account holders,
including certain account holders that are non-U.S. entities with United States owners or, in the case of a foreign financial institution
in a jurisdiction that has entered into an intergovernmental agreement with the United States, such institution complies with the requirements
of such agreement and (ii) a “non-financial foreign entity,” as defined under such rules, unless such entity provides
the paying agent with a certification that it does not have any substantial United States owners or a certification identifying the direct
and indirect substantial United States owners of the entity, unless in each case, an exemption applies.
While withholding under FATCA may also apply to
payments of gross proceeds from a sale or other disposition of our stock, under proposed Treasury regulations, withholding on payments
of gross proceeds is not required. Although such regulations are not final, applicable withholding agents may rely on the proposed regulations
until final regulations are issued.
Possible Legislative or Other Actions Affecting Tax Consequences
Prospective holders of our securities should recognize
that the present federal income tax treatment of investment in Omega may be modified by legislative, judicial or administrative action
at any time and that any of these actions may affect investments and commitments previously made. The rules dealing with federal
income taxation are constantly under review by persons involved in the legislative process and by the IRS and the Treasury Department,
resulting in revisions of regulations and revised interpretations of established concepts as well as statutory changes. Revisions in federal
tax laws and interpretations thereof could adversely affect the tax consequences of investment in Omega.
State and Local Taxes
We may be and you may be subject to state or local
taxes in other jurisdictions such as those in which we may be deemed to be engaged in activities or own property or other interests. The
state and local tax treatment of us may not conform to the federal income tax consequences discussed above.
PLAN
OF DISTRIBUTION
We may sell the securities covered by this prospectus
in one or more of the following ways from time to time, including without limitation:
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directly to purchasers;
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to or through underwriters or dealers; or
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through a combination of these methods.
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A distribution of the securities offered by this
prospectus may also be effected through the issuance of derivative securities, including without limitation, warrants, exchangeable securities,
forward delivery contracts and the writing of options.
In addition, the manner in which we may sell some
or all of the securities covered by this prospectus includes, without limitation, through:
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a block trade in which a broker-dealer will attempt to sell as agent, but may position or resell a portion of the block, as principal,
in order to facilitate the transaction;
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purchases by a broker-dealer, as principal, and resale by the broker-dealer for its account;
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ordinary brokerage transactions and transactions in which a broker solicits purchasers; or
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privately negotiated transactions.
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We may also enter into hedging transactions. For
example, we may:
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enter into transactions with a broker-dealer or affiliate thereof in connection with which such broker-dealer or affiliate will engage
in short sales of the common stock pursuant to this prospectus, in which case such broker-dealer or affiliate may use shares of common
stock received from us to close out its short positions;
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sell securities short and redeliver such shares to close out our short positions;
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enter into option or other types of transactions that require us to deliver common stock to a broker-dealer or an affiliate thereof,
who will then resell or transfer the common stock under this prospectus; or
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loan or pledge the common stock to a broker-dealer or an affiliate thereof, who may sell the loaned shares or, in an event of default
in the case of a pledge, sell the pledged shares pursuant to this prospectus.
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In addition, we may enter into derivative or hedging
transactions with third parties, or sell securities not covered by this prospectus to third parties in privately negotiated transactions.
In connection with such a transaction, the third parties may sell securities covered by and pursuant to this prospectus and an applicable
prospectus supplement or pricing supplement, as the case may be. If so, the third party may use securities borrowed from us or others
to settle such sales and may use securities received from us to close out any related short positions. We may also loan or pledge securities
covered by this prospectus and an applicable prospectus supplement to third parties, who may sell the loaned securities or, in an event
of default in the case of a pledge, sell the pledged securities pursuant to this prospectus and the applicable prospectus supplement or
pricing supplement, as the case may be.
A prospectus supplement with respect to each series
of securities will state the terms of the offering of the securities, including:
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the terms of the offering;
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the name or names of any underwriters or agents and the amounts of securities underwritten or purchased by each of them, if any;
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the public offering price or purchase price of the securities and the net proceeds to be received by us from the sale;
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any delayed delivery arrangements;
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any initial public offering price;
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any underwriting discounts or agency fees and other items constituting underwriters’ or agents’ compensation;
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any discounts or concessions allowed or reallowed or paid to dealers; and
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any securities exchange on which the securities may be listed.
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The offer and sale of the securities described
in this prospectus by us, the underwriters or the third parties described above may be effected from time to time in one or more transactions,
including privately negotiated transactions, either:
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at a fixed price or prices, which may be changed;
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at market prices prevailing at the time of sale;
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at prices related to the prevailing market prices; or
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General
Any public offering price and any discounts, commissions,
concessions or other items constituting compensation allowed or reallowed or paid to underwriters, dealers, agents or remarketing firms
may be changed from time to time. Underwriters, dealers, agents and remarketing firms that participate in the distribution of the offered
securities may be “underwriters” as defined in the Securities Act, as amended (the “Securities Act”). Any discounts
or commissions they receive from us and any profits they receive on the resale of the offered securities may be treated as underwriting
discounts and commissions under the Securities Act. We will identify any underwriters, agents or dealers and describe their commissions,
fees or discounts in the applicable prospectus supplement or pricing supplement, as the case may be.
Underwriters and Agents
If underwriters are used in a sale, they will acquire
the offered securities for their own account. The underwriters may resell the offered securities in one or more transactions, including
negotiated transactions. These sales may be made at a fixed public offering price or prices, which may be changed, at market prices prevailing
at the time of the sale, at prices related to such prevailing market price or at negotiated prices. We may offer the securities to the
public through an underwriting syndicate or through a single underwriter. The underwriters in any particular offering will be mentioned
in the applicable prospectus supplement or pricing supplement, as the case may be.
Unless otherwise specified in connection with any
particular offering of securities, the obligations of the underwriters to purchase the offered securities will be subject to certain conditions
contained in an underwriting agreement that we will enter into with the underwriters at the time of the sale to them.
The underwriters will be obligated to purchase
all of the securities of the series offered if any of the securities are purchased, unless otherwise specified in connection with any
particular offering of securities. Any initial public offering price and any discounts or concessions allowed, reallowed or paid to dealers
may be changed from time to time.
We may designate agents to sell the offered securities.
Unless otherwise specified in connection with any particular offering of securities, the agents will agree to use their best efforts to
solicit purchases for the period of their appointment. We may also sell the offered securities to one or more remarketing firms, acting
as principals for their own accounts or as agents for us. These firms will remarket the offered securities upon purchasing them in accordance
with a redemption or repayment pursuant to the terms of the offered securities. A prospectus supplement or pricing supplement, as the
case may be, will identify any remarketing firm and will describe the terms of its agreement, if any, with us and its compensation.
In connection with offerings made through underwriters
or agents, we may enter into agreements with such underwriters or agents pursuant to which we receive our outstanding securities in consideration
for the securities being offered to the public for cash. In connection with these arrangements, the underwriters or agents may also sell
securities covered by this prospectus to hedge their positions in these outstanding securities, including in short sale transactions.
If so, the underwriters or agents may use the securities received from us under these arrangements to close out any related open borrowings
of securities.
Dealers
We may sell the offered securities to dealers as
principals. We may negotiate and pay dealers’ commissions, discounts or concessions for their services. The dealer may then resell
such securities to the public either at varying prices to be determined by the dealer or at a fixed offering price agreed to with us at
the time of resale. Dealers engaged by us may allow other dealers to participate in resales.
Direct Sales
We may choose to sell the offered securities directly.
In this case, no underwriters or agents would be involved.
Institutional Purchasers
We may authorize agents, dealers or underwriters
to solicit certain institutional investors to purchase offered securities on a delayed delivery basis pursuant to delayed delivery contracts
providing for payment and delivery on a specified future date. The applicable prospectus supplement or pricing supplement, as the case
may be will provide the details of any such arrangement, including the offering price and commissions payable on the solicitations.
We will enter into such delayed contracts only
with institutional purchasers that we approve. These institutions may include commercial and savings banks, insurance companies, pension
funds, investment companies and educational and charitable institutions.
Indemnification; Other Relationships
We may have agreements with agents, underwriters,
dealers and remarketing firms to indemnify them against certain civil liabilities, including liabilities under the Securities Act. Agents,
underwriters, dealers and remarketing firms, and their affiliates, may engage in transactions with, or perform services for, us in the
ordinary course of business. This includes commercial banking and investment banking transactions.
Market Making, Stabilization and Other Transactions
There is currently no market for any of the offered
securities other than the common stock, which is listed on the New York Stock Exchange. If the offered securities are traded after their
initial issuance, they may trade at a discount from their initial offering price, depending upon prevailing interest rates, the market
for similar securities and other factors. While it is possible that an underwriter could inform us that it intended to make a market in
the offered securities, such underwriter would not be obligated to do so, and any such market making could be discontinued at any time
without notice. Therefore, no assurance can be given as to whether an active trading market will develop for the offered securities. We
have no current plans for listing of the debt securities, preferred stock or warrants on any securities exchange or on the National Association
of Securities Dealers, Inc. automated quotation system; any such listing with respect to any particular debt securities, preferred
stock or warrants will be described in the applicable prospectus supplement or pricing supplement, as the case may be.
In connection with any offering, the underwriters
may purchase and sell shares of common stock in the open market. These transactions may include short sales, syndicate covering transactions
and stabilizing transactions. Short sales involve syndicate sales of common stock in excess of the number of shares to be purchased by
the underwriters in the offering, which creates a syndicate short position. “Covered” short sales are sales of shares made
in an amount up to the number of shares represented by the underwriters’ over-allotment option. In determining the source of shares
to close out the covered syndicate short position, the underwriters will consider, among other things, the price of shares available for
purchase in the open market as compared to the price at which they may purchase shares through the over-allotment option. Transactions
to close out the covered syndicate short involve either purchases of the common stock in the open market after the distribution has been
completed or the exercise of the over-allotment option. The underwriters may also make “naked” short sales of shares in excess
of the over-allotment option. The underwriters must close out any naked short position by purchasing shares of common stock in the open
market. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the
price of the shares in the open market after pricing that could adversely affect investors who purchase in the offering. Stabilizing transactions
consist of bids for or purchases of shares in the open market while the offering is in progress for the purpose of pegging, fixing or
maintaining the price of the securities.
In connection with any offering, the underwriters
may also engage in penalty bids. Penalty bids permit the underwriters to reclaim a selling concession from a syndicate member when the
securities originally sold by the syndicate member are purchased in a syndicate covering transaction to cover syndicate short positions.
Stabilizing transactions, syndicate covering transactions and penalty bids may cause the price of the securities to be higher than it
would be in the absence of the transactions. The underwriters may, if they commence these transactions, discontinue them at any time.
LEGAL
MATTERS
Unless
otherwise indicated in the applicable prospectus supplement, the validity of the securities offered hereby will be passed upon for us
by Bryan Cave Leighton Paisner LLP, Atlanta, Georgia and/or Shapiro Sher Guinot & Sandler, P.A., Baltimore,
Maryland. In addition, the description of material federal income tax consequences contained in this prospectus under the heading “Material
U.S. Federal Income Tax Considerations” is based upon the opinion of Bryan Cave Leighton Paisner LLP, Atlanta, Georgia.
EXPERTS
The consolidated financial statements of Omega
Healthcare Investors, Inc. appearing in Omega Healthcare Investors, Inc.’s Annual Report (Form 10-K) for the year ended December 31, 2020 (including schedules appearing therein), and the effectiveness of Omega Healthcare Investors, Inc.’s
internal control over financial reporting as of December 31, 2020, have been audited by Ernst & Young LLP, independent registered
public accounting firm, as set forth in their reports thereon, included therein, and incorporated herein by reference. Such financial
statements and schedules are, and audited financial statements to be included in subsequently filed documents will be, incorporated herein
in reliance upon the reports of Ernst & Young LLP pertaining to such financial statements and the effectiveness of our internal
control over financial reporting as of the respective dates to the extent covered by consents filed with the Securities and Exchange Commission
given on the authority of such firm as experts in accounting and auditing.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
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Item 14.
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Other Expenses of Issuance and Distribution.
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The following table sets forth the costs and expenses
to be paid by the Company in connection with the offering of the securities registered. All amounts are estimates except for the registration
fee.
SEC Registration Fee
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$
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*
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Rating Agency Fees
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**
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Trusting Fees and Expenses
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**
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Accounting Fees and Expenses
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**
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Legal Fees and Expenses
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**
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Printing and Filing Expenses
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**
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Transfer Fees and Expenses
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**
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Miscellaneous
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**
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Total
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$
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**
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*Deferred in reliance on Rules 456(b) and 457(r) of the Securities Act
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**An estimate of the aggregate amount of these expenses will be reflected in the applicable prospectus supplement
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Item 15.
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Indemnification of Directors and Officers
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The charter and bylaws of Omega provide for indemnification
of directors and officers to the fullest extent permitted by Maryland law.
Section 2-418 of the General Corporation Law
of the State of Maryland generally permits indemnification of any director or officer with respect to any proceedings unless it is established
that: (a) the act or omission of the director or officer was material to the matter giving rise to the proceeding and was either
(i) committed in bad faith or (ii) the result of active and deliberate dishonesty; (b) the director or officer actually
received an improper personal benefit in money, property or services; or (c) in the case of a criminal proceeding, the director or
officer had reasonable cause to believe that the act or omission was unlawful. The indemnity may include judgments, penalties, fines,
settlements, and reasonable expenses actually incurred by the director or officer in connection with the proceedings. However, a corporation
may not indemnify a director or officer who shall have been adjudged to be liable to the corporation, or who instituted a proceeding against
the corporation (unless such proceeding was brought to enforce the indemnification provisions of Section 2-418, or the charter, bylaws,
a resolution of the board of directors of the corporation or an agreement approved by the board of directors). In addition, a director
may not be indemnified under Section 2-418 in respect of any proceeding charging improper personal benefit to the director, whether
or not involving action in the director’s official capacity, in which the director was adjudged to be liable on the basis that personal
benefit was improperly received. The termination of any proceeding by judgment, order or settlement does not create a presumption that
the director or officer did not meet the requisite standard of conduct required for permitted indemnification. The termination of any
proceeding by conviction, or plea of nolo contendere or its equivalent, or an entry of an order of probation prior to judgment, creates
a rebuttable presumption that the director or officer did not meet that standard of conduct. A director or officer who has been successful
on the merits or otherwise, in the defense of any proceeding referred to above shall be indemnified against any reasonable expenses incurred
by the director or officer in connection with the proceeding. As noted below, the SEC may limit the corporation’s obligation to
provide this indemnification.
Omega has also entered into indemnity agreements
with the officers and directors of the registrant that provide that the registrant will, subject to certain conditions, pay on behalf
of the indemnified party any amount which the indemnified party is or becomes legally obligated to pay because of any act or omission
or neglect or breach of duty, including any actual or alleged error or misstatement or misleading statement, which the indemnified party
commits or suffers while acting in the capacity as an officer or director of the registrant. Once an initial determination is made by
the registrant that a director or officer did not act in bad faith or for personal benefit, the indemnification provisions contained in
the charter, bylaws, and indemnity agreements would require the registrant to advance any reasonable expenses incurred by the director
or officer, and to pay the costs, judgments, and penalties determined against a director or officer in a proceeding brought against them.
Insofar as indemnification for liabilities arising
under the Securities Act is permitted to directors and officers of Omega pursuant to the above-described provisions, Omega understands
that the SEC is of the opinion that such indemnification contravenes federal public policy as expressed in said act and therefore is unenforceable.
A list of exhibits included as part of this registration
statement is set forth in the Exhibit Index and is incorporated herein by reference.
(a) The
undersigned registrant hereby undertakes:
(1) To
file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i) To
include any prospectus required by Section 10(a)(3) of the Securities Act;
(ii) To
reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information in this registration statement.
Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered
would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume
and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration
Fee” table in the effective registration statement; and
(iii) To
include any material information with respect to the plan of distribution not previously disclosed in this registration statement or any
material change to such information in the registration statement;
provided, however, that paragraphs (a)(1)(i),
(ii), and (iii) above do not apply if the information required to be included in a post-effective amendment by those paragraphs is
contained in reports filed with or furnished to the Commission by the registrant pursuant to Section 13 or Section 15(d) of
the Exchange Act that are incorporated by reference in the registration statement, or is contained in a form of prospectus filed pursuant
to Rule 424(b) that is part of the registration statement.
(2) That,
for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(3) To
remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination
of the offering.
(4) That,
for the purpose of determining liability under the Securities Act to any purchaser:
(i) If
the registrant is relying on Rule 430B:
(A) Each
prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of
the date the filed prospectus was deemed part of and included in the registration statement; and
(B) Each
prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance
on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the
information required by Section 10(a) of the Securities Act shall be deemed to be part of and included in the registration statement
as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities
in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is
at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities
in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus
that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration
statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such
effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration
statement or made in any such document immediately prior to such effective date.
(5) That,
for the purpose of determining liability of the registrant under the Securities Act to any purchaser in the initial distribution of the
securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this
registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered
or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser
and will be considered to offer or sell such securities to such purchaser:
(i) Any
preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
(ii) Any
free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the
undersigned registrant;
(iii) The
portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant
or its securities provided by or on behalf of the undersigned registrant; and
(iv) Any
other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
(6) That,
for purposes of determining any liability under the Securities Act, each filing of the registrant’s annual report pursuant to section
13(a) or section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan’s annual report
pursuant to section 15(d) of the Exchange Act) that is incorporated by reference in the registration statement shall be deemed to
be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(7) Insofar
as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities
Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all the requirements for filing on Form S-3
and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Hunt Valley, State of Maryland, on this 13th day of May, 2021.
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OMEGA HEALTHCARE INVESTORS, INC.
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By:
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/s/ C. Taylor Pickett
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C. Taylor Pickett
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Chief Executive Officer
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POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each
person who signature appears below constitutes and appoints Robert O. Stephenson and Gail D. Makode, or either of them, his or her true
and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for them and in their name, place and stead,
in any and all capacities stated below, to sign any and all amendments to this registration statement (including post-effective amendments),
and any additional registration statement filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended, for the
offerings contemplated by this registration statement, and all documents and instruments necessary or advisable in connection therewith,
and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission,
granting unto either of said attorneys-in-fact and agents, full power and authority to do and perform in the name and on behalf of the
undersigned each and every act and thing necessary or advisable to be done in and about the premises, as fully as to all intents and purposes
as each of the undersigned might or could do in person, hereby ratifying and confirming all that either of said attorneys-in-fact and
agents, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities
Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on the 13th day of May,
2021.
Signature
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Position
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/s/ C. Taylor Pickett
C. Taylor Pickett
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Chief Executive Officer and Director
(Principal Executive Officer)
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/s/ Robert O. Stephenson
Robert O. Stephenson
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Chief Financial Officer
(Principal Financial Officer)
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/s/ Neal A. Ballew
Neal A. Ballew
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Chief Accounting Officer
(Principal Accounting Officer)
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/s/ Craig R. Callen
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Chairman of the Board
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Craig R. Callen
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/s/ Kapila K. Anand
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Director
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Kapila K. Anand
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/s/ Barbara B. Hill
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Director
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Barbara B. Hill
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/s/ Kevin J. Jacobs
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Director
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Kevin J. Jacobs
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/s/ Edward Lowenthal
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Director
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Edward Lowenthal
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/s/ Stephen D. Plavin
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Director
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Stephen D. Plavin
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/s/ Burke W. Whitman
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Director
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Burke W. Whitman
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EXHIBIT INDEX
Exhibit
Number
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Description of Exhibit
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1.1
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Form of Underwriting Agreement.*
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3.1
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Articles of Amendment and Restatement of Omega Healthcare Investors, Inc., as amended. (Incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-3ASR filed on September 3, 2015).
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3.2
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Articles Supplementary of Omega Healthcare Investors, Inc. filed with the State Department of Assessments and Taxation of Maryland on November 5, 2019. (Incorporated by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q, filed November 8, 2019).
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3.3
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Amended and Restated Bylaws of Omega Healthcare Investors, Inc. as of April 8, 2021 (Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed with the SEC on April 14, 2021).
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4.1
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Form of Articles Supplementary for Preferred Stock.*
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4.2
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Form of Warrant Agreement (including form of Warrant).*
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5.1
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Opinion of Shapiro Sher Guinot & Sandler, P.A. as to the legality of the securities registered hereby.+
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8.1
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Opinion of Bryan Cave Leighton Paisner LLP regarding certain tax matters.+
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22.1
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Subsidiary guarantors of guaranteed securities (Incorporated by reference to Exhibit 22.1 to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on May 4, 2021).
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23.1
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Consent of Bryan Cave Leighton Paisner LLP (included in Exhibit 8.1).
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23.2
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Consent of Shapiro Sher Guinot & Sandler, P.A. (included in Exhibit 5.1).
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23.3
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Consent of Ernst & Young LLP.+
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24.1
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Powers of Attorney (included in the signature page hereto).
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* To the extent required, to be filed either by a post-effective amendment to the registration statement or as an exhibit to a Current Report on Form 8-K or Form 10-Q pursuant to Item 601 of Regulation S-K and incorporated by reference herein.
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+ Filed herewith.
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