S-11/A: Registration statement for securities to be issued by real estate companies
Published on January 14, 2002
EXHIBIT 8.2
[ARGUE PEARSON HARBISON & MYERS, LLP LETTERHEAD]
January , 2002
Omega Healthcare Investors, Inc.
900 Victors Way, Suite 350
Ann Arbor, Michigan 48108
Re: Omega Healthcare Investors, Inc.
Qualification as
REAL ESTATE INVESTMENT TRUST
Ladies and Gentlemen:
We have acted as special tax counsel in connection with your proposed rights
offering to raise $50 million in new equity capital. You have requested our
opinion regarding certain U.S. federal income tax matters relating to the
qualification of Omega Healthcare Investors, Inc. (the "Company") as a real
estate investment trust.
The Company currently owns interests in healthcare facilities and associated
personal property (the "Facilities"), and debt obligations secured by
Facilities, directly and through qualified REIT subsidiaries. The Company also
owns a 9.9% interest represented by 990,000 ordinary shares in Principal
Healthcare Finance Limited, an Isle of Jersey Company, and an 8.0% interest in
Principal Healthcare Finance Trust, an Australia Trust. In addition, the Company
also owns 100% of the stock of a taxable REIT subsidiary, Omega TRS I, Inc.
which holds 1,163,061 (9.45%) of the voting common stock of Omega
Worldwide, Inc. ("OWWI") and 260,000 shares of preferred stock of OWWI, and 100%
of the nonvoting preferred shares but with no interest in the common shares of
Bayside Street II, Inc., also a taxable REIT subsidiary.
In connection with the opinions rendered below, we have examined the
following:
1. The Company's Articles of Incorporation, as duly filed with the
Department of Assessments and Taxation of the State of Maryland on
March 31, 1992, as amended or supplemented by Articles of Amendment and
Restatement dated April 16, 1995, Articles of Amendment dated April 26,
1995, Articles Supplementary dated April 25, 1997, Articles Supplementary
dated April 23, 1998, Articles of Amendment filed July 19, 1999, and
Articles Supplementary dated July 14, 2000;
2. The Company's Bylaws;
3. The minutes or drafts thereof of meetings of the Company's Board of
Directors held from January 1, 1998 through September 17, 2001;
4. The Company's Registration Statement No, 333-72750 (Amendment
No. 1) (the "Registration Statement");
5. Such other documents as we have deemed necessary or appropriate for
purposes of this opinion.
In connection with the opinions rendered below, we have assumed that:
1. Each of the documents referred to above has been duly authorized,
executed, and delivered; is authentic, if an original, or is accurate, if a
copy; and has not been amended except as indicated;
2. During its taxable year ending December 31, 1998 and subsequent
taxable years, the Company has operated and will continue to operate in such
a manner that makes and will
Omega Healthcare Investors, Inc.
January , 2002
Page 2
continue to make the representations contained in a certificate, dated the
date hereof and executed by a duly appointed officer of the Company (the
"Officer's Certificate"), true for such years;
3. The Company will not make any amendments to its organizational
documents, or the organizational documents of the Subsidiaries after the
date of this opinion that would negatively affect its qualification as a
real estate investment trust (a "REIT") for any taxable year;
4. No action will be taken by the Company or the Subsidiaries after the
date hereof that would have the effect of altering the facts upon which the
opinions set forth below are based;
5. All of the documents that we have reviewed will be complied with
without waiver;
6. Explorer Holdings, L.P., Explorer Holdings Level II, L.P. and
Hampstead Investment Partners III, L.P. are partnerships for purposes of
Section 544(a)(1) under the Internal Revenue Code of 1986, as amended (the
"Internal Revenue Code"); and
7. Yale University and The Board of Trustees of Leland Stanford
University are not individuals under Section 542(a)(2) of the Internal
Revenue Code.
In connection with the opinions rendered below, we have relied upon the
correctness of the factual representations contained in the Officer's
Certificate. After reasonable inquiry, we are not aware of any facts
inconsistent with the representations set forth in the Officer's Certificate. We
have relied on a letter from Explorer Holdings, L.P. regarding the ownership of
Explorer Holdings, L.P. in the Company (the "Representation Letter"). We have
assumed that the stock of the Company held by Explorer Holdings, L.P. and
attributed to The State of Oregon Public Employees' Retirement Fund is treated
under Section 856 (h)(3) as held directly by its beneficiaries in proportion to
their actuarial interests in such fund.
Based on the documents and assumptions set forth above, and subject to the
exceptions set forth herein, the representations set forth in the Officer's
Certificate and the Representation Letter, we are of the opinion that:
(a) commencing with its taxable year ended December 31, 1998, the
Company was organized and has operated in conformity with the requirements
for qualifications as a REIT under the Internal Revenue Code,
(b) the transactions contemplated by the Registration Statement will not
prevent the Company from continuing to operate in conformity with the
requirements for qualifications as a REIT under the Internal Revenue Code.
We will not review on a continuing basis the Company's compliance with the
documents or assumptions set forth above, or the representations set forth in
the Officer's Certificate and the Representation Letter. Accordingly, no
assurance can be given that the actual results of the Company's operations for
its 2002 and subsequent taxable years will satisfy the requirements for
qualification and taxation as a REIT.
This opinion does not take into account changes in value of the Company's
outstanding stock after the date hereof.
The foregoing opinions are based on current provisions of the Code and the
Treasury regulations thereunder (the "Regulations"), published administrative
interpretations thereof, and published court decisions. The Internal Revenue
Service has not issued Regulations or administrative interpretations with
respect to various provisions of the Code relating to REIT qualification. No
assurance can be given that the law will not change in a way that will prevent
the Company from qualifying as a REIT.
Omega Healthcare Investors, Inc.
January , 2002
Page 3
The foregoing opinions are limited to the U.S. federal income tax matters
addressed herein, and no other opinions are rendered with respect to other
federal tax or other matters or to any issues arising under the tax laws of any
other country, or any state or locality. We undertake no obligation to update
the opinions expressed herein after the date of this letter.
We hereby consent to the use of this opinion as Exhibit 8.2 and to the use
of our name in the section captioned "MATERIAL UNITED STATES INCOME TAX
CONSIDERATIONS" in the Registration Statement. In giving this consent, we do not
admit that we come within the category of persons whose consent is required
under Section 7 of the Securities Act of 1933, as amended, or the Rules and
Regulations of the Securities and Exchange Commission thereunder.
Very truly yours,
DRAFT