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EXHIBIT 10.2
OPPORTUNITY AGREEMENT
Dated as of __________ ___, 1998
between
OMEGA HEALTHCARE INVESTORS, INC.
and
OMEGA WORLDWIDE, INC.
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OPPORTUNITY AGREEMENT
This OPPORTUNITY AGREEMENT (this "Agreement"), is entered into as of
__________ ___, 1998 between Omega Healthcare Investors, Inc., a Maryland
corporation ("Omega"), and Omega Worldwide, Inc., a Maryland corporation ("Omega
Worldwide").
WHEREAS, an entity organized as a REIT principally makes passive
investments which produce interest or rental income, and the nature of the
investment approach and capital structure of Omega is to seek healthcare
investments principally located in the United States and producing significant
current income for distribution to Omega shareholders; and
WHEREAS, Omega may in certain circumstances determine that it is
precluded from pursuing, or is limited in the manner in which it pursues,
various business opportunities due to its status as a REIT;
WHEREAS, Omega Worldwide emphasizes investment opportunities
(including healthcare operating opportunities) and active advisory
management opportunities not requiring a significant current yield but
contemplating long-term appreciation of growth in value through investments
made worldwide, and has been formed for the purpose of, among other things,
consolidating the advisory and management business and international operations
previously conducted by Omega; and
WHEREAS, it is the objective of the parties that to the extent of their
common interests, each party will provide the other with a right of first
opportunity with respect to certain business opportunities made available to
each of them;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements contained in this Agreement and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. In addition to the terms defined in the
preamble and recitals to this Agreement and elsewhere herein, the following
terms shall have the meanings set forth herein for the purposes of this
Agreement:
"Affiliate" with respect to a Person, means a Person that
controls, is controlled by, or is under common control with such
Person. For purposes of this definition, "control" when used with
respect to any Person means the power to direct the management and
policies of such Person, directly or indirectly, whether through the
ownership of voting
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securities, by contract or otherwise; and the terms "affiliated,"
"controlling" and "controlled" have meanings correlative to the
foregoing.
"Change of Control" means a change in control of either party
of a nature that would be required to be reported in response to Item
6(e) of Schedule 14A, Regulation 240, 14a-101, promulgated under the
Securities Exchange Act of 1934 (the "Act"), or, if Item 6(e) is no
longer in effect, any regulation issued by the Securities and Exchange
Commission pursuant to the Act which serves similar purposes; provided
that, without limitation, a Change of Control shall be deemed to have
occurred if and when (a) any "person" (as such term is used in Sections
13(d) and 14(d)(2) of the Act) is or becomes a beneficial owner,
directly or indirectly, of securities of such company representing 50%
or more of the combined voting power of such company's then outstanding
securities, (b) individuals who are members of the Board of Directors
immediately prior to a meeting of the shareholders of such company
involving a contest for the election of directors shall not constitute
a majority of the Board of Directors following such election, or (c) a
merger in which such company is not the surviving corporation, and the
shareholders of such company immediately prior to such merger do not
own at least a majority of the outstanding shares of the surviving
corporation.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time.
"Disinterested Directors" means, (i) with respect to Omega,
the member(s) of Omega's Board of Directors who are not, and are not
associates of, a direct, indirect or beneficial stockholder, director,
officer, employee or Affiliate of Omega Worldwide or any of its
Affiliates, and (ii) with respect to Omega Worldwide, the member(s) of
Omega Worldwide's Board of Directors who are not, and are not
associates of, a direct, indirect or beneficial stockholder, director,
officer, employee or Affiliate of Omega or any of its Affiliates. For
purposes hereof, the term "associate" shall have the meaning given in
Rule 12b-2 promulgated under the Securities Exchange Act of 1934, as
amended.
"Opportunity" means either a Worldwide Opportunity or a REIT
Opportunity.
"Person" means any individual, corporation, proprietorship,
firm, partnership, limited partnership, limited liability company,
trust, association or other entity.
"REIT" means a real estate investment trust under sections 856
through 860 of the Code.
"REIT Opportunity" means any opportunity, principally within
the United States, to (i) make any investment in healthcare real
estate, real estate mortgages, real estate derivatives, or entities
that invest exclusively in or have a substantial portion of their
assets in any of the foregoing, so long as such investment would be
consistent with the
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requirements of the Code and regulations relating to Omega's status as
a REIT; or (ii) make any REIT-Qualified Investment. "REIT-Qualified
Investment" means an investment, at least 95% of the gross income from
which would qualify under the 95% gross income test set forth in
section 856(c)(2) of the Code (or could be structured so to qualify)
and the ownership of which would not cause Omega to violate the asset
limitations set forth in section 856(c)(4) of the Code (or could be
structured not to cause Omega to violate the section 856(c)(4)
limitations) and which otherwise meets the federal income tax
requirements applicable to REITs.
"Worldwide Opportunity" means any opportunity (i) to provide
investment advisory services and/or investment management services to
any healthcare investors, (ii) to acquire or make debt and/or equity
investments (through a joint venture or otherwise) in, any healthcare
investor or in healthcare real-estate related assets outside of the
United States, (iii) to make investments in any entity conducting
healthcare operations, or (iv) to make any other real estate, finance
or other investments not customarily undertaken by a qualified REIT.
ARTICLE II
RELATIONSHIP OF OMEGA
AND OMEGA WORLDWIDE
Section 2.1 Offer of Opportunities to Omega Worldwide. Subject to
the limitations described herein, Omega will offer Omega Worldwide any
Worldwide Opportunities that become available to Omega and any REIT
Opportunities that Omega determines not to pursue. Omega Worldwide will have 10
business days (the "Notice Period") after receipt of information from Omega
with respect to an Opportunity to determine whether or not it will pursue such
Opportunity. After the end of the Notice Period, unless Omega has received
notice from Omega Worldwide that it will pursue the Opportunity, Omega may, if
it desires, pursue the Opportunity itself or offer the Opportunity to any other
Person. If Omega Worldwide notifies Omega that it intends to pursue an
Opportunity but subsequently decides not to pursue the Opportunity or for any
reason fails to consummate the Opportunity, Omega Worldwide shall immediately
provide notice that it is no longer pursuing the Opportunity to Omega. Omega
shall have the right to pursue the Opportunity itself or offer the Opportunity
to any other Person. Notwithstanding anything to the contrary set forth herein,
Omega shall have no obligation to offer a Worldwide Opportunity to Omega
Worldwide if the Worldwide Opportunity arose out of an investment previously
made by Omega outside of the United States. Omega, in its sole discretion, in
transactions approved by its Disinterested Directors, will make all decisions
as to its willingness to pursue any REIT Opportunities referenced above.
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Section 2.2 Offer of REIT Opportunities to Omega. Subject to the
limitations described herein, Omega Worldwide will offer Omega any REIT
Opportunities identified by Omega Worldwide. Omega will have the Notice Period
after receipt of information from Omega Worldwide with respect to the REIT
Opportunity to determine whether or not it will pursue the REIT Opportunity.
After the end of the Notice Period, unless Omega Worldwide has received notice
from Omega that it will pursue the opportunity, Omega Worldwide may, if it
desires, pursue the REIT Opportunity on its own behalf or offer the REIT
Opportunity to any other Person. If Omega notifies Omega Worldwide that it
intends to pursue a REIT Opportunity but subsequently decides not to pursue the
REIT Opportunity or for any reason fails to consummate the REIT Opportunity,
Omega shall immediately provide notice that it is no longer pursuing the REIT
Opportunity to Omega Worldwide. Omega Worldwide shall have the right to pursue
the REIT Opportunity itself or offer the REIT Opportunity to any other Person.
Section 2.3 Support Provided by Omega Worldwide. Omega Worldwide, at
Omega's request, may make investments in certain transactions in order to
assist Omega in structuring acquisitions or investments that Omega elects to
pursue. The terms pursuant to which such investments are provided will be
negotiated in good faith on arm's length terms mutually acceptable to the
Disinterested Directors of each of Omega and Omega Worldwide.
ARTICLE III
MISCELLANEOUS
Section 3.1 Term and Termination.
(a) This Agreement shall terminate on __________ ___, 2008, subject to
renewal by mutual agreement of the parties for successive five-year terms.
(b) Notwithstanding Section 3.1(a), a party may terminate this
Agreement by providing written notice to the other party that the other party is
in default of this Agreement and such default is material and remains uncured
for 15 days after receipt of notice thereof.
(c) Notwithstanding Section 3.1(a), this Agreement shall terminate
automatically upon a Change of Control of either party.
Section 3.2 Acknowledgments.
(a) Each of the parties hereto acknowledges that the obligations
undertaken by it pursuant to this Agreement are unique and that the other party
hereto will not have an adequate remedy at law if it shall fail to perform any
of its obligations hereunder, and each of the parties hereto therefore confirms
that the right of the other party hereto to specific performance of the terms of
this Agreement is essential to protect the rights and interests of such party.
Accordingly, in addition to any other remedies that any party hereto may have at
law or in equity, each party
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shall have the right to have all obligations, covenants, agreements and other
provisions of this Agreement specifically performed by the other party hereto,
and each party shall have the right to obtain preliminary and permanent
injunctive relief to secure specific performance and to prevent a breach or
contemplated breach of this Agreement by the other party hereto.
(b) If performance of any provision of this Agreement, at the time such
performance shall be due, shall transcend the limit of validity prescribed by
law, then the obligation to be performed shall be reduced to the limit of such
validity; and if any clause or provision contained in this Agreement operates or
would operate to invalidate this Agreement, in whole or in part, then such
clause or provision only shall be held ineffective, as though not herein
contained, and the remainder of this Agreement shall remain operative and in
full force and effect. The parties shall negotiate in good faith a replacement
clause or provision as consistent with the ineffective clause or provision as is
practicable under law.
Section 3.3 Subsidiaries. Any Opportunity that is offered to and
accepted by a party hereunder may be entered into by such party or any
subsidiary of such party.
Section 3.4 Contractual Restrictions. No party shall be required
to comply with the first opportunity and notification rights set forth
in Article II of this Agreement if such compliance would violate any
confidentiality requirement or other contractual restriction binding on such
party.
Section 3.5 No Partnership. While it is the intention of the
parties to align their businesses in accordance with the terms of this
Agreement, each party shall act independently in its own best interests and
neither party shall be considered a partner or agent of the other party or to
owe any fiduciary or other common law duties to the other party.
Section 3.6 Amendment. This Agreement may be amended, modified or
supplemented but only in writing signed by each of the parties hereto; provided
that any such amendment, modification or supplement shall be approved by the
Disinterested Directors of Omega and Omega Worldwide.
Section 3.7 Noties. Any notice, request, instruction or other
document to be given hereunder by a party hereto shall be in writing and shall
be deemed to have been given, (i) when
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received if given in person or by courier or a courier service, (ii) on the date
of transmission if sent by facsimile or other wire transmission, or (iii) three
business days (seven business days for overseas mail) after being deposited in
the U.S. mail, certified or registered mail, postage prepaid:
(a) If to Omega, addressed as follows:
Omega Healthcare Investors, Inc.
000 Xxxx Xxxxxxxxxx Xxxxxx
Xxxxx 000
Xxx Xxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
Facsimile No.: (000) 000-0000
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(b) If to Omega Worldwide, addressed as follows:
Omega Worldwide, Inc.
000 Xxxx Xxxxxxxxxx Xxxxxx
Xxxxx 000
Xxx Xxxxx, Xxxxxxxx 00000
Attention: Vice President and Secretary
Facsimile No.: (000) 000-0000
or to such other individual or address as a party hereto may designate for
itself by notice given as herein provided.
Section 3.8 Waivers. The delay or failure of a party hereto at any
time or times to require performance of any provision hereof shall in no manner
affect its right at a later time to enforce the same. No waiver by a party of
any condition or of any breach of any term, covenant, representation or warranty
contained in this Agreement shall be effective unless in writing, and no waiver
in any one or more instances shall be deemed to be a further or continuing
waiver of any such condition or breach in other instances or a waiver of any
other condition or breach of any other term, covenant, representation or
warranty.
Section 3.9 Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
Section 3.10 Interpretation. The headings preceding the text of
Articles and Sections included in this Agreement and the headings to Exhibits
attached to this Agreement are for convenience only and shall not be deemed part
of this Agreement or be given any effect in interpreting this Agreement. The use
of the masculine, feminine or neuter gender herein shall not limit any provision
of this Agreement. The use of the terms "including" or "include" shall in all
cases mean "including, without limitation" or "include, without limitation,"
respectively. Underscored references to Articles, Sections or Exhibits shall
refer to those portions of this Agreement.
Section 3.11 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF MARYLAND, WITHOUT REGARD
TO THE PRINCIPLES OF CONFLICTS OF LAWS.
Section 3.12 Assignment. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns. Except as otherwise specifically provided in this Agreement, no
assignment of any rights or obligations shall be made by any party without the
written consent of the other party.
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Section 3.13 No Third Party Beneficiaries. This Agreement is solely
for the benefit of the parties hereto and no provision of this Agreement shall
be deemed to confer upon other third parties any remedy, claim, liability,
reimbursement, cause of action or other right.
Section 3.14 Remedies Cumulative. The remedies provided in this
Agreement shall be cumulative and shall not preclude the assertion or exercise
of any other rights or remedies available by law, in equity or otherwise.
Section 3.15 Entire Understanding. This Agreement sets forth the
entire agreement and understanding of the parties hereto with respect to the
matters set forth herein and supersedes any and all prior agreements,
arrangements and understandings among the parties.
Section 3.16 No Presumption Against Drafter. Each of the parties
hereto has jointly participated in the negotiation and drafting of this
Agreement. In the event of any ambiguity or a question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by each of the parties hereto and no presumptions or burdens of proof shall
arise favoring any party by virtue of the authorship of any of the provisions of
this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered as of the date first above written.
OMEGA HEALTHCARE INVESTORS, INC.
By:
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Name:
------------------------
Title:
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OMEGA WORLDWIDE, INC.
By:
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Name:
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Title:
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