OMEGA HEALTHCARE INVESTORS INC
SECOND AMENDMENT TO FLEET LOAN AGREEMENT
<DOCUMENT>
<TYPE>EX-10.12
<SEQUENCE>3
<FILENAME>0003.txt
<DESCRIPTION>SECOND AMENDMENT TO FLEET LOAN AGREEMENT
<TEXT>

                        AMENDMENT NO. 2 TO LOAN AGREEMENT


     AMENDMENT  NO. 2 TO LOAN  AGREEMENT  (this  "Second  Amendment"),  made and
executed this 20th day of November, 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 NATIONAL BANK  (successor by merger to 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 (as amended by  Amendment  No. 1 to Loan  Agreement  dated August 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 definition of "Funded Indebtedness" contained in Article 1 is
     hereby deleted in its entirety and the following is substituted therefor:

          "'Funded  Indebtedness':   as  of  any  date  of  determination,   all
     Indebtedness  for  borrowed  money  (which  in any event  does not  include
     accounts payable and accrued  liabilities) of Omega on a consolidated basis
     including, in any event, the Credit Loans"

          2.2.  Section  6.9  (Financial  Covenants)  of the Loan  Agreement  is
     amended by adding the following sentence to the end of such Section:

                  "For purposes of computing the financial  covenants  contained
                  in Section 6.9,  there shall be excluded from the  calculation
                  of  "EBITDA"  and  "Adjusted  EBITDA"  a one  time  charge  of
                  $4,664,861,  incurred  by Omega  during  the third  quarter of
                  2000,  in  connection  with  severance  and  consulting  costs
                  arising  from  the   consummation   of  certain   transactions
                  contemplated by the Investment Agreement."

     3.  Representations  and  Warranties.  In order to induce the Banks and the
Agent to enter  into this  Second  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 Second  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 Second  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  Second  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 Second
     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 Second  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 Second 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  Second  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 Second 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 Second Amendment.

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

          5.3 Fee. In the event that the Required Banks execute and deliver this
     Second  Amendment,  the Borrowers shall pay to the Agent for the benefit of
     each Bank that  executes and delivers  this Second  Amendment no later than
     12:00 noon on Monday,  November 20, 2000 (the "Second Amendment Fee Date"),
     a  non-refundable  amendment fee equal to the product of (a) 0.05% (i.e., 5
     basis points)  multiplied by (b) the  Revolving  Credit  Commitment of such
     Lender, as of the Second Amendment Fee Date.

          5.4 Successors.  This Second  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.

          5.5 Execution in  Counterparts.  This Second 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]



<PAGE>


         IN  WITNESS  WHEREOF,  the  parties  hereto  have  caused  this  Second
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
[s]he had executed this Loan  Agreement  separately  for each of the above named
entities.















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


<PAGE>

                                              FLEET NATIONAL BANK, 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/  EDWARD P. MCGUIRE
                                                  ------------------------------
                                                  Name: Edward P. McGuire
                                                       -------------------------
                                                  Title:Vice President
                                                       -------------------------


                                              BANK ONE, MICHIGAN

                                              By:  /s/ KIRK W. ANDERSON
                                                 -------------------------------
                                                 Name: Kirk W. Anderson
                                                      --------------------------
                                                 Title:Senior Vice President
                                                       -------------------------


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

                                             By: /s/  M. E. STEARS
                                                --------------------------------
                                                Name: M. E. Stearns
                                                     ---------------------------
                                                Title:  Managing Member
                                                     ---------------------------



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




<PAGE>



                                             LASALLE BANK NATIONAL ASSOCIATION

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




                                            KBC N.V.


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


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



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



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