10-K: Annual report pursuant to Section 13 and 15(d)

AMENDMENT NO. 1 TO LOAN AGREEMENT


AMENDMENT NO. 1 TO LOAN AGREEMENT (this "First Amendment"), made and
executed this 15th day of August, 2000, by and among:

OMEGA HEALTHCARE INVESTORS, INC. and certain of its subsidiaries
(individually, a "Borrower" and collectively, the "Borrowers"),

The Banks that have executed the signature pages hereto (individually,
a "Bank" and collectively, the "Banks"); and

FLEET BANK, N.A., a national banking association, as Agent for the Banks
(in such capacity, together with its successors in such capacity, the "Agent").

PRELIMINARY STATEMENTS

(A) The Borrowers have entered into a certain Loan Agreement dated June 15,
2000 (hereinafter referred to as the "Loan Agreement") with the Agent and the
Banks; and

(B) The Borrowers have requested that the Banks and the Agent amend certain
provisions of the Loan Agreement, and the Banks and the Agent are willing to do
so, all on the terms and conditions hereinafter set forth;

NOW, THEREFORE, in consideration of the agreements and provisions contained
herein, the parties hereto hereby agree as follows:

1. Definitions. Capitalized terms used but not otherwise defined herein
shall have the meanings ascribed to such terms in the Loan Agreement.

2. Certain Amendments to the Loan Agreement. The Loan Agreement is hereby
amended as follows:

2.1. The following definitions are added to Article 1 in their
appropriate alphabetic locations:

(a) "'New Provident Loan Agreement': that certain Loan Agreement dated
on or about August 11, 2000 among Omega, certain of its Subsidiaries, the
lenders party thereto and The Provident Bank, as Agent for such lenders, as
the same may hereafter be amended from time to time during the term of this
Agreement."

(b) "'1999 Provident Loan Agreement': that certain Loan Agreement
dated March 31, 1999 between Omega and The Provident Bank, as the same has
been amended from time to time through the date of the 1999 Provident Loan
Agreement."

(c) "'Provident/Sterling Note': that certain Promissory Note dated
July 1,2000 executed by Sterling Acquisitions Corp. in favor of The
Provident Bank."

2.2. Subsection 2.6(e) (Payment of Loans; Voluntary Changes in
Commitment; Mandatory Repayments) of the Loan Agreement is hereby amended
by deleting the period at the end of such subsection and inserting the
following

", except that the Borrower may use the proceeds of the loans
to be made by The Provident Bank and the other lenders party
thereto under the New Provident Loan Agreement (i) in order to
repay in full all of the Indebtedness outstanding under (A)
the 1999 Loan Agreement and (B) the Provident/Sterling Note,
and (ii) as otherwise permitted pursuant to the New Provident
Loan Agreement."

2.3. Subsection 7.1(f) (Indebtedness) of the Loan Agreement is hereby
deleted in its entirety and the following is substituted therefor:

"(f) Indebtedness, the terms of which shall not
require any principal payments thereon prior to the Revolving
Credit Commitment Termination Date, other than the
Indebtedness constituting the Revolving Loan B under and as
defined in the New Provident Loan Agreement, as in effect on
the date hereof."

2.4. Subsection 7.5(b)(i) (Redemptions; Distributions) of the Loan
Agreement is hereby deleted in its entirety and the following is
substituted therefor:

"(i) Omega may declare and make dividend payments or other
distributions payable solely (A) in its common stock; and (B) in
kind to Explorer Holdings, L.P. in respect of the Series C
Convertible Preferred Stock of Omega as contemplated under the
Investment Agreement;"

2.5. Section 7.12 (Use of Cash) of the Loan Agreement is hereby
amended by deleting the portion of such Section beginning with subsection
(c)(ii) thereof through the end of such Section and substituting the
following therefor:

"(ii) any loan or loans made by The Provident Bank pursuant to
the New Provident Loan Agreement, and (d) for uses that are
otherwise specifically permitted by this Agreement."

3. Representations and Warranties. In order to induce the Banks and the
Agent to enter into this First Amendment, each of the Loan Parties hereby
represents and warrants to the Banks and the Agent, as to itself with respect to
the Loan Documents to which it is a party, that:

3.1 No Default. After giving effect to this First Amendment, no
Default or Event of Default shall have occurred or be continuing.

3.2 Existing Representations and Warranties. As of the date hereof and
after giving effect to this First Amendment, each and every one of the
representations and warranties set forth in the Loan Documents are true,
accurate and complete in all respects and with the same effect as though
made on the date hereof, and each is hereby incorporated herein in full by
reference as if restated herein in its entirety, except for changes in the
ordinary course of business which are not prohibited by the Loan Agreement
(as amended hereby) and which do not, either singly or in the aggregate,
have a Material Adverse Effect.

3.3 Authority; Enforceability. (i) The execution, delivery and
performance by each Loan Party of this First Amendment are within its
organizational powers and have been duly authorized by all necessary action
(corporate or otherwise) on the part of each Loan Party, (ii) this First
Amendment is the legal, valid and binding obligation of each Loan Party,
enforceable against each Loan Party in accordance with its terms, and (iii) this
First Amendment and the execution, delivery and performance by each Loan Party
thereof does not: (A) contravene the terms of any Loan Party's organization
documents, (B) conflict with or result in any breach or contravention of, or the
creation of any Lien under, any document evidencing any contractual obligation
to which any Loan Party is a party or any order, injunction, writ or decree to
which any Loan Party or its property is subject, or (C) violate any requirement
of law.

4. Reference to and Effect Upon the Loan Agreement.

4.1 Effect. Except as specifically set forth herein, the Loan
Agreement and the other Loan Documents shall remain in full force and
effect in accordance with their terms and are hereby ratified and
confirmed.

4.2 No Waiver; References. The execution, delivery and effectiveness
of this First Amendment shall not operate as a waiver of any right, power
or remedy of the Agent or any Bank under the Loan Agreement, nor constitute
a waiver of any provision of the Loan Agreement, except as specifically set
forth herein. Upon the effectiveness of this First Amendment, each
reference in:

(i) the Loan Agreement to "this Agreement", "hereunder",
"hereof", "herein" or words of similar import shall mean and be a
reference to the Loan Agreement as amended hereby;

(ii) the other Loan Documents to the "Loan Agreement" shall mean
and be a reference to the Loan Agreement as amended hereby; and

(iii) the Loan Documents to the "Loan Documents" shall be deemed
to include this First Amendment.

5. Miscellaneous.

5.1 Expenses. The Loan Parties agree to pay the Agent upon demand for
all reasonable expenses, including reasonable attorneys' fees and expenses
of the Agent, incurred by the Agent in connection with the preparation,
negotiation and execution of this First Amendment.

5.2. Law. THIS FIRST AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH
AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK.

5.3 Successors. This First Amendment shall be binding upon the Loan
Parties, the Banks and the Agent and their respective successors and
assigns, and shall inure to the benefit of the Loan Parties, the Banks and
the Agent and the successors and assigns of the Banks and the Agent.

5.4 Execution in Counterparts. This First Amendment may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed
to be an original and all of which taken together shall constitute one and
the same instrument.

[Signature Page to Follow]





IN WITNESS WHEREOF, the parties hereto have caused this First Amendment
to be executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.

OMEGA HEALTHCARE
INVESTORS, INC.
DELTA INVESTORS I, LLC
DELTA INVESTORS II, LLC
JEFFERSON CLARK, INC.
NRS VENTURES, L.L.C.
OHI (CLEMMONS), INC.
OHI (FLORIDA), INC.
OHI (GREENSBORO), INC.
OHI (ILLINOIS), INC.
OHI (IOWA), INC.
OHI (KANSAS), INC.
OHI OF TEXAS, INC.
OMEGA (KANSAS), INC.
OS LEASING COMPANY
STERLING ACQUISITION CORP.
STERLING ACQUISITION CORP. II

By /s/ SUSAN A. KOVACH
----------------

Susan A. Kovach, as an executive officer of all of the aforementioned
entities, has executed this Loan Agreement and intending that all entities above
named are bound and are to be bound by the one signature as if she had executed
this Loan Agreement separately for each of the above named entities.















Signature Page to First Amendment to Loan Agreement among
Omega Healthcare Investors, Inc., and certain of its Subsidiaries,
the Banks party thereto, and Fleet Bank, N.A. as Agent

FLEET BANK, N.A., as Agent
and as a Bank


By: /s/ CHRISTIAN J. COVELLO
-----------------------------
Name: Christian J. Covello
------------------------
Title: Vice President
------------------------


DRESDNER BANK AG, NEW YORK BRANCH
and GRAND CAYMAN BRANCH

By: /s/ DEBRA RITZLER
-----------------------------
Name: Debra Ritzler
-----------------------
Title:Assistant Vice President
-----------------------


By: /s/ CHARLES M. O'SHEA
------------------------------
Name: Charles M. O'Shea
------------------------
Title: Vice President
-----------------------


HARRIS TRUST AND SAVINGS BANK

By: /s/ MICHAEL J. JOHNSON
------------------------------
Name: Michael J. Johnson
-------------------------
Title:Vice President
-------------------------


BANK ONE, MICHIGAN

By: /s/ MARCIA F. VENTURA
------------------------------
Name: Marcia F. Fentura
------------------------
Title:First Vice President
------------------------


FOOTHILL INCOME TRUST, L.P.
By FIT-GP, LLC

By: /s/ M. E. STEARNS
-----------------------------
Name: M. E. Stearns
------------------------

Title: Managing Member
------------------------


Signature Page to First Amendment to Loan Agreement among
Omega Healthcare Investors, Inc., and certain of its Subsidiaries,
the Banks party thereto, and Fleet Bank, N.A. as Agent






MICHIGAN NATIONAL BANK

By: /s/ DRAGA PALINCAS
------------------------------
Name: Draga Palincas
------------------------
Title: Vice President
------------------------


LASALLE BANK NATIONAL ASSOCIATION

By: /s/ JOSEPH N. LAZEWSKI
---------------------------
Name: Joseph N. Lazewski
----------------------
Title:Loan Officer
----------------------


BHF (USA) CAPITAL CORPORATION

By: /s/ RICHARD CAMERON
----------------------------
Name: Richard Cameron
----------------------
Title: Vice President
----------------------

By: /s/ HANS J. SCHOLZ
----------------------------
Name: Hans J. Scholz
----------------------
Title:Vice President
----------------------


KBC N.V.


By: /s/ ROBERT SNAUFFER
----------------------------
Name: Robert Snauffer
----------------------
Title: First Vice President
----------------------


By: /s/ KATHERINE S. MCCARTHY
----------------------------
Name: Katherine S. McCarthy
----------------------
Title:Vice President
----------------------







Signature Page to First Amendment to Loan Agreement among
Omega Healthcare Investors, Inc., and certain of its Subsidiaries,
the Banks party thereto, and Fleet Bank, N.A. as Agent