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Exhibit 10.1

REPURCHASE AND CONVERSION AGREEMENT

by and between

OMEGA HEALTHCARE INVESTORS, INC.

and

EXPLORER HOLDINGS, L.P.

Dated as of February 5, 2004

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REPURCHASE AND CONVERSION AGREEMENT

        THIS REPURCHASE AND CONVERSION AGREEMENT (this "Agreement"), is dated as
of February 5, 2004, and is by and between Omega Healthcare Investors, Inc., a
Maryland company (the "Company") and Explorer Holdings, L.P., a Delaware limited
partnership ("Explorer"). The Company and Explorer are collectively referred to
herein as the "Parties," and individually referred to herein as a "Party").

RECITALS

        A.    Explorer currently is the beneficial owner of 1,048,420 shares
(the "Explorer Series C Shares") of the Company's Series C Convertible Preferred
Stock, with a liquidation preference of $100.00 per share ("Series C Preferred
Stock"), and 12,543,526 shares (the "Explorer Common Shares") of the Company's
common stock, par value $.10 per share ("Company Common Stock");

        B.    The Company is currently contemplating an offering (the
"Offering") of an additional series of preferred stock (the "New Preferred
Stock"), which shall be conducted at the sole discretion of the Company.

        C.    Explorer is willing to grant to the Company the Repurchase Option
(as defined below).

        D.    If the Company exercises the Repurchase Option, immediately
following the exercise of the Repurchase Option, Explorer will convert any
Explorer Series C Shares not repurchased by the Company into Company Common
Stock (the "Converted Common Shares," and together with the Explorer Common
Shares, the "Explorer Shares");

        E.    Each of the Parties hereto acknowledge that the benefits
associated with the consummation of the Transactions contemplated by this
Agreement are sufficient inducement to cause the Parties hereto to carry out the
obligations and other conditions precedent contained herein.

        F.    Capitalized terms used herein that are not otherwise defined shall
have the respective meanings set forth in Schedule 1.

AGREEMENT

        NOW, THEREFORE, in consideration of the mutual terms, conditions and
other agreements set forth herein, the Parties hereby agree as follows:

ARTICLE 1

OPTION TO REPURCHASE EXPLORER SERIES C SHARES

        1.1    Option to Repurchase of Explorer Shares.    Explorer does hereby
grant to Omega the right to repurchase (the "Repurchase Option") up to 700,000
Explorer Series C Shares (the "Repurchased Explorer Shares") at a price of
$145.92 per share (the "Share Repurchase Price"); provided, however, that it
shall be a condition to the exercise by Omega of the Repurchase Option that the
Share Repurchase Price multiplied by the number of Repurchased Explorer Shares
is at least $100 million (the "Minimum Aggregate Repurchase Price"). The
Repurchase Option may be exercised by the Company by delivering written notice
of such exercise to Explorer setting forth the number of Repurchased Explorer
Shares and the date, not more than 10 days after the date of such notice, on
which the Closing hereunder will occur, which shall be the same date and at the
same time and place as the closing of the Offering. Unless the Closing shall
have previously occurred, this Repurchase Option shall expire at 5:00 p.m.
eastern time on February 27, 2004 without any further action by the Parties. At
the Closing, subject to the terms and conditions of this Agreement:

        (a)   Explorer will sell, assign, transfer, convey, and deliver to the
Company all right, title, and interest of Explorer in and to the Repurchased
Explorer Shares, free and clear of any Lien. Explorer shall designate at its
option which of the Explorer Series C Shares are to be Repurchased Explorer
Shares.

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        (b)   The Company will purchase from Explorer all of its interest in and
to the Repurchased Explorer Shares and shall pay to Explorer in consideration
thereof an amount equal to the Share Repurchase Price multiplied by the total
number of the Repurchased Explorer Shares (the "Aggregate Repurchase Price");
provided, however, that the Aggregate Repurchase Price shall equal or exceed the
Minimum Aggregate Repurchase Price; and

        (c)   Explorer will convert the Explorer Series C Shares that are not
repurchased pursuant to the exercise by the Company of the Repurchase Option
into Converted Common Shares in accordance with the terms of the Explorer
Series C Shares.

        (d)   The Company will pay to Explorer the amount set forth in
Section 7.12 hereof.

        1.2    Exercise of Repurchase Option.    At the Closing, Explorer shall
deliver executed stock powers, in a form reasonably satisfactory to the Company,
together with those original certificates that immediately prior to the Closing
represented one hundred percent (100%) of the Repurchased Explorer Shares, or a
duly executed affidavit of lost certificate and indemnity for any stock
certificate of the Company which has been lost, stolen, seized or destroyed (the
"Company Certificates"), to the Company. Upon the surrender of the Company
Certificates to the Company, the Company shall pay to Explorer, in cash or other
immediately available funds by wire transfer to the accounts designated by
Explorer, the Aggregate Purchase Price.

        1.3    Dividends.    Notwithstanding the repurchase or conversion of the
Explorer Series C Shares, the Company will pay to Explorer the quarterly
dividend of $2.72 per share of Series C Preferred Stock payable on February 16,
2004, to holders of record on February 2, 2004.

ARTICLE 2

CLOSING

        2.1    Closing Date.    The consummation of the Transactions
contemplated by this Agreement (the "Closing") shall take place on the same date
and at the same time and place as the closing of the Offering (the "Closing
Date"), at the offices of Powell, Goldstein, Frazer & Murphy LLP, 191 Peachtree
Street, NE, 16th Floor, Atlanta, Georgia 30303, or at such other time or place
as the Parties may agree.

        2.2    Closing Deliveries.    At Closing, the Parties will deliver to
each other the various certificates, instruments, and documents referred to in
Sections 1.1 and 1.2 and Article 5 hereof, and will further execute, acknowledge
(if appropriate), and deliver to each other Party such additional certificates,
instruments and documents as their counsel reasonably may request to effect the
Transactions contemplated by this Agreement.

ARTICLE 3

REPRESENTATIONS AND WARRANTIES

        3.1    Representations and Warranties of Explorer.    Explorer
represents and warrants to the Company that the following statements are true,
complete and correct as of the date of this Agreement and will be true, complete
and correct effective as of the Closing Date, as follows:

        (a)    Existence; Good Standing; Corporate Authority.    Explorer is a
limited partnership duly formed, validly existing and in good standing under the
laws of the State of Delaware. Explorer is duly licensed or qualified to do
business as a limited partnership and is in good standing in each jurisdiction
in which the character of the properties owned or leased by it or in which the
transaction of its business makes such qualification necessary, except where the
failure to be so qualified or to be in good standing would not have an Explorer
Material Adverse Effect. An "Explorer Material Adverse Effect" means any change,
effect, event or condition that has had or could reasonably be expected to
prevent or materially delay Explorer's ability to consummate the

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Transactions contemplated hereby. Explorer has all requisite limited partnership
power and authority to own, operate and lease its properties and carry on its
business as now conducted.

        (b)    Authorization, Validity and Effect of Transaction
Documents.    Explorer has all requisite limited partnership power and authority
to execute and deliver the Transaction Documents to which it is a party. Each
Transaction Document to which Explorer is a party and the consummation by
Explorer of the Transactions contemplated hereby and thereby have been duly and
validly authorized by the general partner of Explorer and the applicable
governing body of Explorer's general partner, and no other action on the part of
Explorer or Explorer's general partner is necessary to authorize such
Transaction Documents or to consummate the Transactions contemplated hereby or
thereby. All Transaction Documents executed and delivered by Explorer constitute
the valid and binding obligations of Explorer, enforceable against it in
accordance with their respective terms, except that (i) the enforceability
thereof may be subject to applicable bankruptcy, reorganization, moratorium,
insolvency or other similar laws now or hereinafter in effect affecting
creditors' rights generally, (ii) the availability of the remedy of specific
performance or injunctive or other forms of equitable relief may be subject to
equitable and legal defenses and would be subject to the discretion of the court
before which any proceeding therefor may be brought, and (iii) rights to
indemnification may be limited by public policy considerations.

        (c)    No Conflict; Required Filings and Consents.    

        (1)   The execution, delivery and performance of each Transaction
Document to which Explorer is a party do not, and the consummation by Explorer
of the Transactions contemplated thereby will not, (i) conflict with or violate
the Charter Documents of Explorer or any of its Subsidiaries, (ii) conflict with
or violate any Law or Order applicable to Explorer or any of its Subsidiaries or
by which any property or asset of Explorer or any of its Subsidiaries is bound
or affected, or (iii) result in any breach of or constitute a default (or an
event which with notice or lapse of time or both would become a default) under,
result in the loss of a material benefit under, or give to others any right of
termination, amendment, acceleration, increased payments or cancellation of, or
result in the creation of a Lien on any property or asset of Explorer or any of
its Subsidiaries pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation
to which Explorer or any of its Subsidiaries is a party or by which Explorer or
any of its Subsidiaries or any property or asset of Explorer or any of its
Subsidiaries is bound or affected, except in the case of clauses (ii) and (iii),
for any such conflicts, violations, breaches, defaults, events, losses, rights,
payments, cancellations, encumbrances or other occurrences that would not,
individually or in the aggregate, have an Explorer Material Adverse Effect.

        (2)   The execution, delivery and performances by Explorer of each
Transaction Document to which Explorer is a party do not, and the consummation
by Explorer of the Transactions contemplated thereby will not, require any
consent, approval, authorization or permit of, or filing with or notification
to, any Governmental or Regulatory Body, except for (A) applicable requirements,
if any, of the Securities Act and the Exchange Act and (B) where failure to
obtain such consents, approvals, authorizations or permits, or to make such
filings or notifications, would not, individually or in the aggregate, have an
Explorer Material Adverse Effect.

        (d)    No Brokers.    Explorer has not entered into any contract,
arrangement or understanding with any Person which could impose an obligation on
the Company or any Subsidiary of the Company to pay any investment banker's,
consultant's or finder's fees, brokerage or agent's commissions or other like
payments in connection with the negotiations leading to this Agreement or the
consummation of the Transactions contemplated hereby, any such amounts to be the
sole liability of Explorer.

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        (e)    Title; Ownership of Shares.    Explorer owns, beneficially or of
record, 1,048,420 shares of Series C Preferred Stock and 12,543,526 shares of
Company Common Stock, free and clear of any Liens. Explorer has, and on the
Closing Date will have, the right to transfer to the Company, good, valid, and
marketable title to the Repurchased Explorer Shares, free and clear of any
Liens.

        3.2    Representations and Warranties of the Company.    The Company
represents and warrants to Explorer that the following statements are true,
complete and correct as of the date of this Agreement and will be true, complete
and correct effective as of the Closing Date, as follows:

        (a)    Existence; Good Standing; Corporate Authority.    The Company is
a corporation duly incorporated, validly existing and in good standing under the
laws of the State of Maryland. The Company is duly licensed or qualified to do
business as a foreign corporation and is in good standing under the laws of each
state in which the character of the properties owned or leased by it or in which
the transaction of its business makes such qualification necessary, except where
the failure to be so qualified or to be in good standing would not have a
Company Material Adverse Effect. The Company has all requisite corporate power
and authority to own, operate and lease its properties and carry on its business
as now conducted. As used in this Agreement, the term "Company Material Adverse
Effect" means any change, effect, event or condition that has had or could
reasonably be expected to (i) have a material adverse effect on the business,
results of operations or financial condition of the Company and its
Subsidiaries, taken as a whole, or (ii) prevent or materially delay the
Company's ability to consummate the Transactions contemplated hereby.

        (b)    Authorization, Validity and Effect of Agreement.    The Company
has the requisite corporate power and authority to execute and deliver the
Transaction Documents to which it is a party. Each Transaction Document to which
the Company is a party and the consummation by the Company of the Transactions
contemplated hereby and thereby have been duly authorized by all requisite
corporate action. The Transaction Documents have been duly and validly executed
and delivered by the Company and constitute the valid and binding obligations of
the Company, enforceable against the Company in accordance with their respective
terms, except that (i) such enforceability may be subject to applicable
bankruptcy, reorganization, moratorium, insolvency or other similar laws now or
hereinafter in effect affecting creditors' rights generally, (ii) the
availability of the remedy of specific performance or injunctive or other forms
of equitable relief may be subject to equitable and legal defenses and would be
subject to the discretion of the court before which any proceeding therefor may
be brought, and (iii) rights to indemnification may be limited by public policy
considerations.

        (c)    No Conflict; Required Filings and Consents.    

        (1)   The execution, delivery and performance of each Transaction
Document to which the Company is a party does not, and the consummation by the
Company of the Transactions contemplated thereby will not, (i) conflict with or
violate the Charter Documents of the Company or any of its Subsidiaries,
(ii) conflict with or violate any Law or Order applicable to the Company or any
of its Subsidiaries or by which any property or asset of the Company or any of
its Subsidiaries is bound or affected, or (iii) result in any breach of or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, result in the loss of a material benefit under,
or give to others any right of termination, amendment, acceleration, increased
payments or cancellation of, or result in the creation of a Lien on any property
or asset of the Company or any of its Subsidiaries pursuant to, any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise or
other instrument or obligation to which the Company or any of its Subsidiaries
is a party or by which the Company or any of its Subsidiaries or any property or
asset of the Company or any of its Subsidiaries is bound or affected, except in
the case of clauses (ii) and (iii), for any such conflicts, violations,
breaches, defaults, events, losses, rights, payments, cancellations,

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encumbrances or other occurrences that would not, individually or in the
aggregate, have a Company Material Adverse Effect.

        (2)   The execution, delivery and performances by the Company of each
Transaction Document to which the Company is a party does not, and the
consummation by the Company of the Transactions contemplated thereby will not,
require any consent, approval, authorization or permit of, or filing with or
notification to, any Governmental or Regulatory Body, except for (A) applicable
requirements, if any, of the Securities Act and the Exchange Act and (B) where
failure to obtain such consents, approvals, authorizations or permits, or to
make such filings or notifications, would not, individually or in the aggregate,
have a Company Material Adverse Effect.

        (d)    No Brokers.    The Company has not entered into any contract,
arrangement or understanding with any Person which could impose an obligation on
Explorer or any of its Affiliates to pay any investment banker's, consultant's
or finder's fees, brokerage or agent's commissions or other like payments in
connection with the negotiations leading to this Agreement or the consummation
of the Transactions contemplated hereby, including the Offering, any such
amounts to be the sole liability of the Company.

ARTICLE 4

COVENANTS

        4.1    Filings, Reasonable Efforts.    Upon the terms and subject to the
conditions set forth in this Agreement, each of the Parties will use all
commercially reasonable efforts to take, or cause to be taken, all actions, and
to do, or cause to be done, and to assist and cooperate with the other Party in
doing, all things necessary, proper or advisable to consummate and make
effective, in the most expeditious manner practicable, the Transactions
contemplated by this Agreement, including without limitation (i) obtaining of
all necessary actions, waivers, consents and approvals from Governmental or
Regulatory Bodies and making of all necessary registrations and filings
(including filings with Governmental or Regulatory Bodies) and taking of all
reasonable steps as may be necessary to obtain an approval or waiver from, or to
avoid an action or proceeding by, any Governmental or Regulatory Body,
(ii) obtaining, in writing, of all necessary consents, approvals or waivers from
third parties in form reasonably satisfactory to the Parties, and
(iii) executing and delivering any additional instruments necessary to
consummate the Transactions contemplated by, and to fully carry out the purposes
of, this Agreement.

        4.2    The Offering.    Notwithstanding anything to the contrary, the
Company shall have sole and absolute discretion on whether to engage in and
consummate the Offering and shall have sole and absolute discretion regarding
the terms and conditions of the Offering.

        4.3    Conversion of Explorer Series C Shares.    If the Company
exercises the Repurchase Option and repurchases the Repurchased Explorer Shares,
Explorer will take all actions and execute all documentation required by the
Series C Articles Supplementary to convert all of the remaining Explorer
Series C Shares into Company Common Stock

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ARTICLE 5

CONDITIONS PRECEDENT TO THE CLOSING

        5.1    Conditions Precedent to the Obligations of the Parties to
Complete the Closing.    The obligations of each of the Parties to enter into
and complete the Transactions contemplated by the Transaction Documents are
subject to the fulfillment at or prior to the Closing of the following
conditions:

        (a)    Offering.    The Offering shall be completed simultaneously with
or prior to the Closing hereunder and the net proceeds available therefrom,
together with other resources, shall be sufficient to enable the Company to fund
the Minimum Aggregate Purchase Price.

        (b)    Consents and Waivers.    All authorizations, consents, waivers
and approvals as may be required to be obtained by the Parties in connection
with the consummation of the Transactions shall have been obtained.

        (c)    Governmental Approvals.    All filings that are required to have
been made by the Parties with any Governmental or Regulatory Body in order to
carry out the Transactions shall have been made and all authorizations, consents
and approvals from any Governmental or Regulatory Body required to carry out the
Transactions shall have been received and any applicable waiting periods shall
have expired.

        (d)    Proceedings, Orders or Decrees.    There shall not be in force
any Order, Action or Proceeding by or before any Governmental or Regulatory Body
restraining, restricting, enjoining, prohibiting, invalidating or otherwise
preventing (or seeking to prevent) the consummation of the Transactions.

        5.2    Transfer Documents.    The Parties shall have executed and
delivered to each other such instruments and documents as may be reasonably
requested by any of them in order to complete and consummate the Transactions,
each in form and substance satisfactory to the Parties, including the
instruments and documents contemplated by Article 1.

        5.3    Conditions Precedent to the Obligations of Explorer to Complete
the Closing.    In addition to the conditions precedent set forth in
Section 5.1, the obligation of Explorer to enter into and complete the Closing
are subject to the fulfillment at or prior to the Closing of the following
conditions:

        (a)    Accuracy of Representations and Warranties.    Each of the
representations and warranties of the Company contained in the Transaction
Documents shall be true and correct in all material respects both as of the date
of this Agreement and at and as of the date of the Closing as if made at and as
of such date (other than representations and warranties which address matters
only as of a specified date, which shall be true and correct as of such
specified date), except where the failure of such representations and warranties
to be true and correct without regard to any materiality or Company Material
Adverse Effect qualification contained therein, would not, either individually
or in the aggregate, reasonably be expected to have a material adverse effect on
the Company's ability to consummate the Transactions contemplated by the
Transaction Documents or to perform its obligations thereunder, and Explorer
shall have received a certificate of an officer of the Company, acting in his or
her capacity as such, to such effect.

        (b)    Fulfillment of Covenants and Other Obligations.    The Company
shall have performed or complied in all material respects with all covenants
required by the Transaction Documents to be performed or complied with by it on
or prior to the Closing and Explorer shall have received a certificate of an
officer of the Company, acting in his or her capacity as such, to such effect.

        5.4    Conditions Precedent to the Obligations of the Company to
Complete the Closing.    In addition to the conditions precedent set forth in
Section 5.1, the obligation of the Company to enter into and

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complete the Closing are subject to the fulfillment at or prior to the Closing
of the following conditions:

        (a)    Accuracy of Representations and Warranties.    Each of the
representations and warranties of Explorer contained in the Transaction
Documents shall be true and correct in all material respects both as of the date
of this Agreement and at and as of the date of the Closing as if made at and as
of such date (other than representations and warranties which address matters
only as of a specified date, which shall be true and correct as of such
specified date), except where the failure of such representations and warranties
to be true and correct without regard to any materiality or Explorer Material
Adverse Effect qualification contained therein, would not, either individually
or in the aggregate, reasonably be expected to have a material adverse effect on
Explorer's ability to consummate the Transactions contemplated by the
Transaction Documents or to perform its obligations thereunder, and the Company
shall have received a certificate of an officer of the general partner of
Explorer, acting in his or her capacity as such, to such effect.

        (b)    (b) Fulfillment of Covenants and Other Obligations.    Explorer
shall have performed or complied in all material respects with all covenants
required by the Transaction Documents to be performed or complied with by it on
or prior to the Closing and the Company shall have received a certificate of an
officer of the general partner of Explorer, acting in his or her capacity as
such, to such effect.

ARTICLE 6

TERMINATION

        6.1    Termination Events.    This Agreement may, by notice given prior
to or at the Closing, be terminated:

        (a)   By either (i) the Company, if Explorer has materially breached any
provision of this Agreement and such material breach has not been waived or
cured within fifteen (15) days of such material breach, or (ii) by Explorer, if
the Company has materially breached any provision of this Agreement, and such
material breach has not been waived or cured within fifteen (15) days of such
material breach;

        (b)   By either (i) the Company or (ii) Explorer, if (A) the Company
determines not to proceed with the Offering or (B) the Closing has not occurred
(other than through the failure of the Party seeking to terminate this Agreement
to comply fully with its obligations under this Agreement) on or before
February 27, 2004, or such later date as each of the Parties may agree upon; or

        (c)   By mutual consent of each of the Parties hereto.

        6.2    Effect of Termination.    If this Agreement is terminated
pursuant to Section 6.1 above, all further obligations of the Parties under this
Agreement will terminate; provided, however, that if this Agreement is
terminated by a Party as a result of the other Party's fraud, or willful or
intentional breach of its representations, warranties or obligations hereunder,
the terminating Party shall have the right to pursue all remedies available to
it at law or in equity.

ARTICLE 7

GENERAL PROVISIONS

        7.1    Notices.    Any notice or other communication required to be
given hereunder shall be in writing, and sent by reputable courier service (with
proof of service), by hand delivery or by facsimile

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(followed on the same day by delivery by courier service (with proof of
delivery) or by hand delivery), addressed as follows:

        If to Explorer:

Explorer Holdings, L.P.
4200 Texas Commerce Tower West
2200 Ross Avenue
Dallas, Texas 75201
Attn: Kymberlyn K. Janney
Fax No.: (214) 220-4949

        With copies to:

Munsch Hardt Kopf & Harr, P.C.
1445 Ross Avenue
4000 Fountain Place
Dallas, Texas 75202
Attn: William T. Cavanaugh, Jr., Esq. or Peter E. Lorenzen, Esq.
Fax No.: (214) 978-4351

        If to the Company:

Omega Healthcare Investors, Inc.
Suite 100
9690 Deereco Road
Timonium, Maryland 21093
Attn: Chief Financial Officer
Fax No.: (410) 427-8822

        With copies to:

Powell, Goldstein, Frazer & Murphy LLP
191 Peachtree Street, N.E.
Suite 1600
Atlanta, Georgia 30303
Attn: Rick Miller or Eliot Robinson
Fax No.: (404) 572-6999

or to such other address as any Party will specify by written notice so given,
and such notice will be deemed to have been delivered as of the date so
telecommunicated or actually delivered.

        7.2    Assignment; Binding Effect.    Neither this Agreement nor any of
the rights, interests or obligations hereunder will be assigned by any Party
hereto (whether by operation of Law or otherwise) without the prior written
consent of the other Party, except that Explorer will have the right to assign
to any direct or indirect wholly owned subsidiary of Explorer or to the direct
or indirect partners or limited partners of Explorer any and all rights and
obligations of Explorer under this Agreement, provided, that any such assignment
will not relieve Explorer from any of its obligations hereunder. Any assignment
not granted in accordance with the foregoing shall be null and void. Subject to
the first sentence of this Section 7.2, this Agreement will be binding upon and
will inure to the benefit of the Parties hereto and their respective successors
and assigns. Notwithstanding anything contained in this Agreement to the
contrary, nothing in this Agreement, expressed or implied, is intended to confer
on any Person other than the Parties hereto or their respective heirs,
successors, executors, administrators and assigns any rights, remedies,
obligations or liabilities under or by reason of this Agreement.

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        7.3    Entire Agreement.    This Agreement, the other Transaction
Documents and any other documents, instruments and certificates delivered by the
Parties in connection herewith or therewith, constitute the entire agreement
among the Parties with respect to the subject matter hereof and supersede all
prior agreements and understandings among the Parties with respect thereto,
including, without limitation, any draft proposal or letter of intent, with
respect to the Transactions contemplated herein, provided that, except as
expressly provided herein or in another Transaction Document, neither this
Agreement nor any Transaction Document supercedes or modifies any existing
agreement between Explorer and the Company, and each such agreement including,
without limitation, that certain Indemnification Agreement dated as of July 14,
2000, by and between the Company and Explorer, shall remain in full force and
effect.

        7.4    Amendment.    This Agreement may be amended by the Parties
hereto, by action taken by their respective Boards of Directors, or other
equivalent governing bodies. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the Parties hereto.

        7.5    Governing Law.    This Agreement will be governed by and
construed in accordance with the laws of the State of Delaware, without regard
to its conflict of laws principles.

        7.6    Counterparts.    This Agreement may be executed by the Parties
hereto in separate counterparts, each of which when so executed and delivered
will be an original, but all such counterparts will together constitute one and
the same instrument. Each counterpart may consist of a number of copies hereof
each signed by less than all, but together signed by all of the Parties hereto.
A facsimile copy of a signature page shall be deemed to be an original signature
page.

        7.7    Headings.    Headings of the Articles and Sections of this
Agreement are for the convenience of the Parties only, and will be given no
substantive or interpretive effect whatsoever.

        7.8    Interpretations.    When a reference is made in this Agreement to
an Article, Section, Exhibit or Annex, such reference will be to an Article or
Section of, or an Annex or Exhibit to, 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," except when used in conjunction with a negative predicate. 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 used herein with initial
capital letters have the meanings ascribed to them herein and all terms defined
in this Agreement will have such 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. Any agreement, instrument or
statute defined or referred to herein or in any agreement or instrument that is
referred to herein means such agreement, instrument or statute as from time to
time amended, modified or supplemented, including (in the case of agreements or
instruments) by written waiver or written consent and (in the case of statutes)
by succession of comparable successor statutes and references to all attachments
thereto and instruments incorporated therein. References to a Person are also to
its permitted successors and assigns.

        7.9    Waivers.    Except as provided in this Agreement, no action taken
pursuant to this Agreement, including without limitation any investigation by or
on behalf of any Party, will be deemed to constitute a waiver by the Party
taking such action of compliance with any representations, warranties, covenants
or agreements contained in this Agreement or the other Transaction Documents.
The waiver by any Party hereto of a breach of any provision hereunder will not
operate or be construed as a waiver of any prior or subsequent breach of the
same or any other provision hereunder. At any time any Party hereto may
(a) extend the time for the performance of any of the obligations or other acts
of the other Party hereto, (b) waive any inaccuracies in the representations and
warranties contained herein or in any document delivered pursuant hereto, and
(c) waive compliance with any of the agreements or

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conditions contained herein. Any such extension or waiver shall be valid only if
set forth in an instrument in writing signed by the Party or Parties to be bound
thereby.

        7.10    Severability.    Any term or provision of this Agreement which
is invalid or unenforceable in any jurisdiction will, as to that jurisdiction,
be ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision will be interpreted
to be only so broad as is enforceable.

        7.11    Enforcement of Agreement.    The Parties hereto agree that
irreparable damage would occur in the event that any provision of this Agreement
was not performed in accordance with its specific terms or was otherwise
breached. It is accordingly agreed that the Parties will be entitled to an
injunction or injunctions to prevent breaches or threatened breaches of this
Agreement and to enforce specifically the terms and provisions hereof, this
being in addition to any other remedy to which they are entitled at law or in
equity.

        7.12    Expenses.    All Expenses incurred by the Parties hereto shall
be borne solely and entirely by the Party which has incurred such Expenses
whether or not the Transactions are consummated. The Company will be solely
responsible for payment of any investment banker's, consultant's or finder's
fees, brokerage or agent's commissions or other like payments in connection with
the Offering; provided, however, that at the Closing the Company will pay to
Explorer $150,000 in settlement of all outstanding claims by Explorer for
reimbursement of expenses (other than travel and related expenses incurred by
representatives of Explorer on behalf of the Company) and in consideration of
Explorer's agreement to pay all expenses incurred by it in connection with the
Transactions.

        7.13    Jurisdiction; Consent to Service of Process.    (a) Each Party
hereby irrevocably and unconditionally submits, for itself and its property, to
the exclusive jurisdiction of any state or federal court located in the State of
Delaware (a "Delaware Court"), and any appellate court from any such court, in
any suit, action or proceeding arising out of or relating to this Agreement, or
for recognition or enforcement of any judgment resulting from any such suit,
action or proceeding, and each Party hereby irrevocably and unconditionally
agrees that all claims in respect of any such suit, action or proceeding may be
heard and determined in a Delaware Court.

        (b)   It will be a condition precedent to each Party's right to bring
any such suit, action or proceeding that such suit, action or proceeding, in the
first instance, be brought in a Delaware Court (unless such suit, action or
proceeding is brought solely to obtain discovery or to enforce a judgment), and
if each such court refuses to accept jurisdiction with respect thereto, such
suit, action or proceeding may be brought in any other court with jurisdiction.

        (c)   No Party may move to (i) transfer any such suit, action or
proceeding from a Delaware Court to another jurisdiction, (ii) consolidate any
such suit, action or proceeding brought in a Delaware Court with a suit, action
or proceeding in another jurisdiction, or (iii) dismiss any such suit, action or
proceeding brought in a Delaware Court for the purpose of bringing the same in
another jurisdiction.

        (d)   Each Party hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, (i) any objection which it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement in a Delaware Court,
(ii) the defense of an inconvenient forum to the maintenance of such suit,
action or proceeding in any such court, and (iii) the right to object, with
respect to such suit, action or proceeding, that such court does not have
jurisdiction over such Party. Each Party irrevocably consents to service of
process in any manner permitted by law. Notwithstanding the foregoing, this

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Section 7.13 will not apply to any suit, action or proceeding to enforce a
judgment of a Delaware Court.

        7.14    WAIVER OF JURY TRIAL.    EACH OF THE PARTIES HERETO IRREVOCABLY
WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING, CLAIM OR
COUNTERCLAIM, WHETHER IN CONTRACT OR TORT, AT LAW OR IN EQUITY, ARISING OUT OF
OR IN ANY WAY RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

        7.15    No Strict Construction.    The Parties hereto have participated
jointly in the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the Parties hereto, and no presumption or
burden of proof shall arise favoring or disfavoring any Party by virtue of the
authorship of any of the provisions of this Agreement.

        IN WITNESS WHEREOF, the Parties have executed this Repurchase and
Conversion Agreement as of the date first above written.

    OMEGA HEALTHCARE INVESTORS, INC.
 
 
By:
 
/s/  C. TAYLOR PICKETT      

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    Name:    C. Taylor Pickett
Title:    Chief Executive Officer
 
 
EXPLORER HOLDINGS, L.P.:
 
 
By:
 
Explorer Holdings GenPar, LLC, its General Partner
 
 
By:
 
/s/  KYMBERLYN K. JANNEY      

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    Name:    Kymberlyn K. Janney
Title:    Vice President

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SCHEDULE 1
DEFINITIONS

        As used in this Agreement, the following terms have the following
meanings unless the context otherwise requires:

        1.     "Action or Proceeding" means any action, suit, proceeding or
arbitration by any Person or any investigation or audit by any Governmental or
Regulatory Body.

        2.     Intentionally omitted.

        3.     An "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. For purposes of this
Agreement, the Company shall be deemed not to be an Affiliate of Explorer.

        4.     Intentionally omitted.

        5.     "Business Day" means any day other than a Saturday, Sunday or day
on which banks in New York, New York are authorized or required by Law to close.

        6.     "Charter Documents" means, with respect to any corporation or
entity: those instruments that, among other things, (a) define its existence, as
filed or recorded with the applicable Governmental or Regulatory Body,
including, without limitation, such corporation's or entity's Articles or
Certificate of Incorporation, Organization, Association or Partnership, and
(b) otherwise govern its internal affairs including, without limitation, such
corporation's or entity's Bylaws, partnership agreement or agreement of limited
partnership.

        7.     "Claim" means any pending contest, claim, charge, demand,
assessment, action, cause of action, litigation, notice or demand involving any
Person.

        8.     "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

        9.     "Expenses" as used in this Agreement shall include all
out-of-pocket expenses (including, without limitation, all fees and expenses of
counsel, accountants, investment bankers, experts and consultants to a Party
hereto and its affiliates) incurred by a Party or on its behalf in connection
with or related to the authorization, preparation, negotiation, execution and
performance of the Transaction Documents.

        10.   "Governmental or Regulatory Body" means any court, tribunal,
arbitrator or any government or political subdivision thereof, whether federal,
state, county, local or foreign, or any agency, authority, official or
instrumentality of any such government or political subdivision.

        11.   "Knowledge" means, in the case of the Company, the actual
knowledge of the Chief Executive Officer, Chief Financial Officer or Chief
Operating Officer of the Company and, in the case of Explorer, the actual
knowledge of any officer of Explorer's general partner and, in each case, the
knowledge that such Persons would have obtained of the matter represented after
reasonable due and diligent inquiry of those employees and affiliates of such
Party whom such officers reasonably believe would have actual knowledge of the
matters represented.

        12.   "Law" means any law, statute, rule, regulation, ordinance and
other pronouncement having the effect of law of the United States, or any state,
county, city or other political subdivision or of any Governmental or Regulatory
Body.

        13.   "Liability" means any direct or indirect obligation, indebtedness,
liability, Claim, loss, damage (including punitive or exemplary damages and
fines or penalties or interest thereon), deficiency, obligation or
responsibility, fixed or unfixed, choate or inchoate, liquidated or
unliquidated, secured or unsecured, accrued, absolute, contingent or otherwise.

        14.   "Lien" means any lien, pledge, hypothecation, mortgage, security
interest, Claim, lease, charge, option, right of first refusal, easement,
servitude, transfer restriction under any stockholder or similar agreement,
encumbrance or any other restriction or limitation whatsoever.

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        15.   "Order" means any writ, judgment, decree, injunction or similar
order of any Governmental or Regulatory Body, in each case whether preliminary
or final.

        16.   "Person" means any individual, corporation, partnership, firm,
joint venture, association, joint-stock company, trust, unincorporated
organization, Governmental or Regulatory Body or other entity.

        17.   "Securities Act" means the Securities Act of 1934, as amended.

        18.   "Series C Articles Supplementary" means the Articles Supplementary
and any amendments thereto setting forth the preferences, terms and conditions
of the Series C Preferred Stock as filed by the Company with the Secretary of
State for the State of Maryland.

        19.   Intentionally omitted.

        20.   "Subsidiary" when used with respect to any Person, means any
corporation or other Person, whether incorporated or unincorporated, of which
such Person directly or indirectly owns or controls more than 50% of the
securities or other interests having by their terms ordinary voting power to
elect a majority of the board of directors or others performing similar
functions. For purposes of this Agreement, the Company shall be deemed not to be
a Subsidiary of Explorer.

        21.   "Transaction Documents" means this Agreement, and each other
certificate, instrument, or agreement necessary to consummate the Transactions
contemplated by this Agreement.

        22.   "Transactions" means the Purchase and the transactions
contemplated by the Transaction Documents.

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REPURCHASE AND CONVERSION AGREEMENT by and between OMEGA HEALTHCARE INVESTORS,
INC. and EXPLORER HOLDINGS, L.P. Dated as of February 5, 2004