Form: 8-K

Current report filing

June 30, 2000

8-K: Current report filing

Published on June 30, 2000


AMENDED AND RESTATED ADVISORY AGREEMENT


THIS AMENDED AND RESTATED ADVISORY AGREEMENT, dated as of
October 4, 2000 (this "Agreement") is made and entered into between Omega
Healthcare Investors, Inc., a Maryland corporation (the "Company"), and The
Hampstead Group, L.L.C., a Texas limited liability company (the "Advisor").

A. Explorer Holdings, L.P. (the "Purchaser"), an affiliate of the Advisor,
has made a substantial equity investment in the Company (the "Investment")
pursuant to an Investment Agreement, dated as of July 14, 2000, between
Purchaser and the Company (the "Investment Agreement");

B. Simultaneously with the Investment, the Advisor and the Company entered
into an advisory agreement (the "Prior Agreement"). This Agreement amends and
restates the Prior Agreement in its entirety and supersedes the Prior Agreement
in all respects;

C. The Advisor, by and through itself, its affiliates and their respective
officers, employees and representatives, has expertise in the areas of
management, finance, strategy, investment and acquisitions relating to the
business of the Company; and

D. Pursuant to the terms of the Investment Agreement, the Company may
desire to avail itself, during the term of this Agreement, of the expertise of
the Advisor in the aforesaid areas and the Advisor may wish to provide the
services to the Company as herein set forth.

NOW, THEREFORE, in consideration of the foregoing, the parties hereto agree
as follows:

1. Advisory Services. (a) The Advisor may, from time to time,
consider advising and assisting the Company in connection with the development
of its strategic plan, including acquisitions, divestitures, new development and
financing matters. The precise nature of the services to be performed hereunder
by the Advisor will be determined from time to time by mutual agreement of the
Advisor and the Company. The Company hereby acknowledges that the persons
performing the foregoing services are full-time employees of the Advisor or
other entities and will not be expected to devote substantially all of their
efforts to the Company but rather only so much of their efforts as, from time to


time, the Advisor determines in its reasonable discretion to be appropriate in
the circumstances. The Advisor will disclose to the Company any material
interest of the Advisor, or its affiliates or designees providing services
hereunder, in matters that are the subject of the advisory services contemplated
hereby, other than the Advisor's interest as a shareholder of the Company and
designees as directors of the Company.

(b) The Advisor and the individuals acting on its behalf that
are actually providing the services contemplated hereby will be independent
contractors, rather than employees or agents, and will have only such authority
as is incident to the discharge of the duties herein contemplated or
specifically authorized from time to time by the Board of Directors of the
Company (the "Board").

2. Consideration. In consideration for the services provided
by the Advisor under this Agreement, the Company will pay to the Advisor such
customary advisory fees (the "Fees") based upon the type and amount of services
provided by the Advisor and as are agreed upon by the Advisor and a majority of
those members of the Board who are "independent directors" having no material
affiliation or relationships with the Purchaser, the Advisor or the Company.

3. Reimbursements. In addition to the Fees, the Company will
pay directly or reimburse the Advisor for its Out-of-Pocket Expenses. Promptly
following the Company's request therefor, the Advisor will provide written
substantiation in reasonable detail relating to any Out-of-Pocket Expenses to be
paid or reimbursed by the Company pursuant to this Agreement. For the purposes
of this Agreement, the term "Out-of-Pocket Expenses" means the out-of-pocket
costs and expenses that are actually and reasonably incurred by the Advisor or
its affiliates in connection with the services rendered hereunder. All
reimbursements for Out-of-Pocket Expenses will be made promptly upon or as soon
as practicable after presentation by the Advisor to the Company of a written
statement therefor.

4. Confidentiality. (a) All non-public information concerning
the Company which is given to the Advisor or its officers, directors, employees
and/or agents (its "Representatives") by the Company or its Representatives from
time to time will be used solely in the course of the performance of the
Advisor's services hereunder or, in the case of any of such persons who are also
officers and/or directors of the Company, in their capacities as officers and/or


directors of the Company. Except as contemplated by this Agreement or as
otherwise required by applicable law or judicial or regulatory process, the
Advisor will not disclose any non-public information to a third party without
the Company's consent.

(b) The Advisor acknowledges that the Advisor and its
Representatives are subject to the Company's insider trading policy and the
Advisor has so advised its Representatives.

5. Indemnification. (a) The Company will indemnify and hold
harmless the Advisor, its affiliates, and their respective partners (both
general and limited), members (both managing and otherwise), officers,
directors, employees, agents and representatives (each such person being an
"Indemnified Party") from and against any and all losses, claims, damages and
liabilities, whether joint or several (the "Indemnifiable Losses"), related to,
arising out of or in connection with the services contemplated by this Agreement
or the engagement of the Advisor pursuant to, and the performance by the Advisor
of the services contemplated by, this Agreement, whether or not pending or
threatened, whether or not an Indemnified Party is a party and whether or not
such action, claim, suit, investigation or proceeding (a "Claim") is initiated
or brought by the Company directly, derivatively or otherwise, including without
limitation any action, suit, proceeding or investigation arising out of any
action or failure to take action by the Company or any of its subsidiaries,
whether or not based on a theory of primary or secondary liability, and will
reimburse any Indemnified Party for all reasonable costs and expenses (including
reasonable attorneys' fees and expenses) as they are incurred in connection with
investigating, preparing, pursuing, defending or assisting in the defense of any
Claim for which the Indemnified Party would be entitled to indemnification under
the terms of this sentence, or any action or proceeding arising therefrom,
whether or not such Indemnified Party is a party thereto, provided that, subject
to the following sentence, the Company, upon execution of a written undertaking
reasonably satisfactory to the Advisor confirming the Company's indemnity
obligations hereunder (without any reservation of rights other then as permitted
elsewhere herein) and expressly releasing all Indemnified Parties from any and
all liability related to the matter in question subject to the limitations
contained herein (such undertaking, an "Indemnity Undertaking") will be entitled
to assume the defense thereof at its own expense, with counsel satisfactory to
such Indemnified Party in its reasonable judgment. Any Indemnified Party may, at
its own expense, retain separate counsel to participate in such defense, and in


any Claim in which both the Company and/or one or more of its subsidiaries, on
the one hand, and an Indemnified Party, on the other hand, is, or is reasonably
likely to become, a party, such Indemnified Party will have the right to employ
separate counsel at the expense of the Company and to control its own defense of
such Claim if, in the reasonable opinion of counsel to such Indemnified Party, a
conflict or potential conflict exists between the Company, on the one hand, and
such Indemnified Party, on the other hand, that would make such separate
representation advisable. The Indemnified Party shall give prompt notice to the
Company of any actual or asserted event or occurrence that could reasonably be
expected to give rise to a Claim. The failure by an Indemnified Party to notify
the Company of a Claim will not relieve the Company from any liability hereunder
unless, and only to the extent that, the Company did not learn of such Claim and
such failure shall materially prejudice the ability of the Company to defend
such Claim or otherwise perfect rights to any insurance coverage relating
thereto. The Company will not, without the prior written consent of the
applicable Indemnified Party, settle, compromise or consent to the entry of any
judgment in any pending or threatened Claim relating to the matters contemplated
hereby (if any Indemnified Party is a party thereto or has been threatened to be
made a party thereto) unless such settlement, compromise or consent includes an
unconditional release of the applicable Indemnified Party from all liability
arising or that may arise out of such Claim. Provided the Company is not in
breach of its indemnification obligations hereunder, no Indemnified Party may
settle or compromise any Claim subject to indemnification hereunder without the
consent of the Company provided that prior thereto such Indemnified Party has
been furnished with an Indemnity Undertaking.

(b) If any indemnification sought by any Indemnified Party
pursuant to this Section is unavailable for any reason or is insufficient to
hold the Indemnified Party harmless against any Indemnifiable Losses referred to
herein, then the Company will contribute to the Indemnifiable Losses for which
such indemnification is held unavailable or insufficient in such proportion as
is appropriate to reflect the relative benefits received (or anticipated to be
received) by the Company, on the one hand, and the Advisor, on the other hand,
in connection with the transactions which gave rise to such Indemnifiable Losses
or, if such allocation is not permitted by applicable law, not only such
relative benefits but also the relative faults of the Company, on the one hand,
and the Advisor, on the other hand, as well as any other equitable
considerations, subject to the limitation that in any event the aggregate


contribution by the Indemnified Parties to all Indemnifiable Losses with respect
to which contribution is available hereunder will not exceed the Fees paid
through the date on which (or, if more than one date, the last date on which the
conduct occurred that gave rise to the Indemnifiable Loss).

(c) Notwithstanding any other provision hereof, none of the
Advisor nor any employee, officer, director or other related person or entity
will have any liability or obligation by reason of this Agreement for
performance or nonperformance of services contemplated hereby except and solely
to the extent that it is judicially determined by a court of competent
jurisdiction that such person intentionally breached or caused to be breached a
material provision of this Agreement. The parties hereto hereby expressly
disclaim any liability or obligation of the Advisor and its affiliates or any of
their respective employees, officers, directors and other related persons or
entities for actual or alleged negligence of any character in connection with
the services contemplated by this Agreement.

(d) The provisions of this Section 5 will be in addition to
and in no manner limit or otherwise affect any other right that the Advisor or
any other Indemnified Party may have, whether by contract, or arising as a
matter of law or the constituent documents of any other entity.

6. Term. This Agreement will terminate by (i) mutual consent
of the parties or (ii) on or after July 1, 2001, by either the Company or the
Advisor with or without cause on 60 calendar days prior notice to the other. The
termination or expiration of the term of this Agreement will not affect the
Advisor's rights (i) under Sections 3 or 5 hereof (which will survive any
termination or expiration of this Agreement) and (ii) under Section 2 to receive
the amount of Fees pro rated based upon the portion of services performed prior
to such termination.

7. Miscellaneous. (a) No amendment or waiver of any provision
of this Agreement, or consent to any departure by either party hereto from any
such provision, shall be effective unless the same shall be in writing and
signed by each of the parties hereto. Any amendment, waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given. The waiver by any party of any breach of this Agreement shall not operate
as or be construed to be a waiver by such party of any subsequent breach.

(b) Any notices or other communications required or permitted
hereunder shall be sufficiently given if delivered personally or sent by
facsimile, Federal Express or other nationally recognized overnight courier,
addressed as follows or to such other address of which the parties may have
given notice:

If to the Advisor: The Hampstead Group, L.L.C.
4200 Texas Commerce Tower West
2000 Ross Avenue
Dallas, Texas 75201
Attention: William T. Cavanaugh, Jr.
Facsimile: (214) 220-4949

If to the Company: Omega Healthcare Investors, Inc.
900 Victors Way
Suite 350
Ann Arbor, Michigan 48108
Attention: Susan Allene Kovach
Facsimile: (734) 887-0322

Unless otherwise specified herein, such notices or other communications shall be
deemed received (i) on the date delivered, if delivered personally or sent by
facsimile, and (ii) one business day after being sent by Federal Express or
other overnight courier.

(c) This Agreement shall be governed by, and construed and
interpreted in accordance with, the laws of the State of Delaware. This
Agreement shall inure to the benefit of, and be binding upon, the parties hereto
and their respective successors and assigns. The provisions of Section 5 shall
inure to the benefit of each Indemnified Party.

(d) This Agreement may be executed by one or more parties to
this Agreement on any number of separate counterparts, and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.

(e) The waiver by any party of any breach of this Agreement
shall not operate as or be construed to be a waiver by such party of any
subsequent breach.

(f) Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall be not invalidate or render unenforceable such provision in
any other jurisdiction.

(g) For purposes of this Agreement, (i) "affiliate" of any
person means another person that directly or indirectly, through one or more
intermediaries, controls, is controlled by or is under common control with such
first person and (ii) "person" means an individual, corporation, partnership,
limited liability company, joint venture, association, trust, unincorporated
organization or other entity.

(h) When a reference is made in this Agreement to a Section,
such reference is to a Section of this Agreement unless otherwise indicated.
Whenever the words "include", "includes" or "including" are used in this
Agreement, they will be deemed to be followed by the words "without limitation".
The words "hereof", "herein" and "hereunder" and words of similar import when
used in this Agreement will refer to this Agreement as a whole and not to any
particular provision of this Agreement. All terms defined in this Agreement will
have the defined meanings when used in any certificate or other document made or
delivered pursuant hereto unless otherwise defined therein. The definitions
contained in this Agreement are applicable to the singular as well as the plural
forms of such terms and to the masculine as well as to the feminine and neuter
genders of such term. References to a person are also to its permitted
successors and assigns.

(i) This Agreement (including the documents and instruments
referred to herein) (i) constitutes the entire agreement, and supersedes all
prior agreements and understandings, both written and oral, among the parties
with respect to the subject matter of this Agreement and (ii) except for the
provisions of Section 5, are not intended to confer upon any person other than
the parties any rights or remedies.

(j) Neither this Agreement nor any of the rights, interests or
obligations under this Agreement may be assigned, in whole or in part, by
operation of law or otherwise by either of the parties hereto without the prior
written consent of the other party; provided however, that the Advisor may
assign its rights and obligations under this Agreement to an Affiliate of
Advisor without the consent of the Company provided that no such assignment
shall relieve Advisor of its obligations under this Agreement. Any assignment in
violation of the preceding sentence will be void. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of, and be
enforceable by, the parties and their respective successors and assigns.

(k) The parties agree that irreparable damage would occur and
that the parties would not have any adequate remedy at law in the event that any
of the provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties will be entitled to an injunction or injunctions to prevent breaches of
this Agreement and to enforce specifically the terms and provisions of this
Agreement in any federal court located in the State of Delaware or in Delaware
state court, this being in addition to any other remedy to which they are
entitled at law or in equity. In addition, each of the parties hereto (i)
consents to submit itself to the personal jurisdiction of any federal court
located in the State of Delaware and or any Delaware state court in the event
any dispute arises out of this Agreement or any of the transactions contemplated
by this Agreement, (ii) agrees that it will not attempt to deny or defeat such
personal jurisdiction by motion or other request for leave from any such court,
and (iii) agrees that it will not bring any action relating to this Agreement or
any of the transactions contemplated by this Agreement in any court other than a
federal court sitting in the State of Delaware or a Delaware state court.



[Signature page follows]







IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed as of the date first written above by their respective officers
thereto duly authorized.


OMEGA HEALTHCARE INVESTORS, INC.


By: /s/ Susan A. Kovach
-----------------------
Susan A. Kovach
Vice President


THE HAMPSTEAD GROUP, L.L.C.


By: /s/ William T. Cavanaugh, Jr.
-----------------------------
William T. Cavanaugh, Jr.
Vice President