Omega Healthcare Receives Notice from Mariner Health Care of Intent to Prepay Mortgages

Business Wire, Dec 13, 2004

TIMONIUM, Md. -- Omega Healthcare Investors, Inc. (NYSE:OHI) today announced that Professional Health Care Management, Inc. ("PHCMI"), an affiliate of Mariner Health Care, Inc. ("Mariner"), notified Omega on December 10, 2004 that PHCMI intends to exercise its right to prepay in full the Amended and Restated Secured Promissory Note dated September 1, 2001 from PHCMI and payable to the order of Omega in the principal amount of approximately $59.7 million (the "Note"). The Note has an interest rate of 11.57%. Pursuant to the notice and certain provisions of the Note, PHCMI will prepay the Note in full, together with (i) the required prepayment premium of three percent (3%) of the outstanding principal and (ii) accrued and unpaid interest, on February 1, 2005. In addition, PHCMI is also required to pay to Omega its good faith estimate of an amendment fee owing to Omega in connection with the Note, subject to certain "true-up" provisions contained in the Note.

Omega is a Real Estate Investment Trust investing in and providing financing to the long-term care industry. At September 30, 2004, the Company owned or held mortgages on 205 skilled nursing and assisted living facilities with approximately 21,900 beds located in 29 states and operated by 39 third-party healthcare operating companies.

This announcement includes forward-looking statements. All forward-looking statements included herein are based on current expectations and speak only as of the date of such statements. Omega undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of future events, new information or otherwise Such forward-looking statements should be regarded solely as reflections of Omega's current operating plans and estimates. Statements regarding future events and developments and Omega's future performance, as well as management's expectations, beliefs, plans, estimates or projections relating to the future, are forward-looking statements within the meaning of these laws. All forward-looking statements are subject to certain risks and uncertainties that could cause actual events to differ materially from those projected. Management believes that these forward-looking statements are reasonable; however, you should not place undue reliance on such statements. Actual results may differ materially from those reflected in such forward-looking statements as a result of a variety of factors, including, among other things: (i) uncertainties relating to the business operations of the operators of Omega's properties, including those relating to reimbursement by third-party payors, regulatory matters and occupancy levels; (ii) regulatory and other changes in the healthcare sector, including without limitation, changes in Medicare reimbursement; (iii) changes in the financial position of Omega's operators; (iv) the ability of 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; (v) the availability and cost of capital; (vi) competition in the financing of healthcare facilities; and (vii) other factors identified in Omega's filings with the Securities and Exchange Commission.