OMEGA HEALTHCARE INVESTORS INC
AMENDMENT TO PROVIDENT LOAN AGREEMENT
<DOCUMENT>
<TYPE>EX-10.3
<SEQUENCE>6
<FILENAME>0006.txt
<DESCRIPTION>AMENDMENT TO PROVIDENT LOAN AGREEMENT
<TEXT>


                                  AMENDMENT TO
                                 LOAN AGREEMENT

     This Amendment (the  "Amendment")  is made and entered into effective as of
the 13th day of July, 2000, by and between OMEGA HEALTHCARE  INVESTORS,  INC., a
Maryland  corporation (the "Borrower"),  STERLING  ACQUISITION CORP., a Kentucky
corporation,  OHI (IOWA),  INC., an Iowa corporation,  DELTA INVESTORS I, LLC, a
Maryland  limited  liability  company ("Delta 1") and DELTA INVESTORS II, LLC, a
Maryland limited  liability company ("Delta 2") (referred to collectively as the
"Guarantors") and THE PROVIDENT BANK, an Ohio banking corporation ("Bank").

                                   WITNESSETH:
                                   -----------

         WHEREAS, Borrower, Guarantors (other than Delta 1) and Bank are parties
to a certain Loan  Agreement  dated March 31, 1999 (as the same has been and may
from time to time hereafter be amended or supplemented, the "Agreement");

         WHEREAS,  Borrower and Bank are in the process of finalizing a proposed
new extension of credit from Bank and other participants to Borrower, as further
described in various letter  agreements,  including  exhibits  thereto,  between
Borrower and Provident Capital Corp. dated April 4, 2000, June 14, 2000 and July
7, 2000, together with such modifications and clarifications as may subsequently
be agreed upon by Borrower and Bank (the "New Facility");

         WHEREAS,  Borrower  has  requested  that Bank (i)  accept  five (5) new
Facilities as Real Property Collateral under the Agreement, and (ii) release two
(2) Facilities and the Post Office Property  currently  serving as Real Property
Collateral under the Agreement (referred to collectively as the "Substitution"),
and, in connection with the Substitution,  the Bank has (a) agreed to accept the
Appraisals  previously  submitted  for the Best Care,  Northside,  Ouachita  and
Sierra Vista Facilities, and (b) agreed to waive the requirement of an Appraisal
for the Clarion  Facility,  all subject to and  conditioned  upon the  execution
hereof by Borrower, Guarantors and Bank, and subject to the terms and conditions
stated herein; and

         WHEREAS,  as part of the  Substitution,  Delta 1 is being  added to the
Agreement as a Guarantor  and Loan Party,  and Delta 2 is being removed from the
Agreement as a Guarantor and Loan Party; and

         WHEREAS, in connection with the foregoing, Borrower, the Guarantors and
Bank  desire to  provide  for  certain  amendments  and  changes  to the  terms,
conditions and provisions of the Agreement, as specifically set forth herein and
subject to the terms and conditions hereof.

         NOW,  THEREFORE,  in consideration of the mutual promises and covenants
herein  contained,  and other good and valuable  consideration,  the receipt and
sufficiency  of which are  hereby  acknowledged,  the  parties  hereto  agree as
follows:
         1.  Substitution  of  Collateral.  If the New  Facility  has  not  been
consummated,  completed  and closed on or before  August 15,  2000,  the parties
shall mutually agree upon certain Facilities (the "Substitute  Facilities") from
the list  attached  hereto as  Schedule  1 which  shall be  substituted  for the
Facilities  theretofore  serving as Real  Property  Collateral.  The  Substitute
Facilities shall have an aggregate EBITDAR of not less than  $11,000,000.00  and
aggregate  EBITDAR  Coverage of not less than 1.25. Such  substitution  shall be
pursuant  to the terms,  conditions  and  provisions  of  Section  3.5(c) of the
Agreement (as amended  hereby),  and must be completed not later than August 31,
2000.  Following such substitution,  the Substitute  Facilities shall constitute
the Real Property Collateral under the Agreement, and shall be subject to all of
the terms,  conditions and provisions of the Agreement (as amended hereby).  For
purposes  hereof,  "EBITDAR"  shall mean,  for the twelve (12) month period next
preceding the last day of the most recently ended calendar  quarter,  determined
in accordance with GAAP, the sum of net income (or net loss) after subtracting a
4%  management  fee for such  period,  plus the sum of all  amounts  treated  as
expenses for: (a) interest, (b) depreciation,  (c) amortization, (d) all accrued
taxes on or measured by income to the extent  included in the  determination  of
such net  income  (or net  loss),  and (e) the  amount  of all  rental  payments
actually  paid or  accrued  to a Loan  Party  with  respect  to  such  Facility;
provided,  however,  that net income  (or net loss)  shall be  computed  without
giving effect to extraordinary  losses or gains or interest income. For purposes
hereof, "EBITDAR Coverage" shall mean the ratio of (i) the aggregate EBITDAR for
twelve (12) month period next  preceding the last day of the most recently ended
calendar  quarter to (ii) the aggregate rental payments made to the Loan Parties
under the lease, master lease, management agreement or similar agreement between
a Loan Party and an Operator with respect to each Facility  included within Real
Property Collateral for such period.

         2. Payment of Fees. Upon receipt of an invoice therefor, Borrower shall
promptly pay to Bank,  in good  cleared  funds,  all fees and costs,  including,
without  limitation  attorneys'  fees,  incurred by Bank in connection  with the
negotiation,  preparation and execution of this Amendment, the Substitution and,
if  applicable,  the further  substitution  provided  for in Paragraph 1 of this
Amendment.  The  foregoing  does not include any such fees,  costs and  expenses
incurred in connection with the New Facility.

         3.  Capitalized  Terms.  Capitalized  terms used but not defined herein
shall have the same meanings assigned to them in the Agreement.

         4.  Amendments to Agreement.

         The  following  amendments  shall be  deemed  to have  been made to the
Agreement as of August 15, 2000,  without any further  action on the part of the
parties hereto:

               4.1  Section 2.6 of the  Agreement  shall be amended and restated
                    to read in its entirety as follows:

     Section 2.6 Interest Payable on the Loan.

          (a)  Determination  of Interest  Rate For the Loan.  The Interest Rate
               for the Loan shall be determined as follows:

               (i)  During the  applicable  LIBOR  Period  specified  in a LIBOR
                    Election, the principal balance of such portions of the Loan
                    which are the  subject  of such  LIBOR  Election  shall bear
                    interest at the applicable  LIBOR-Based  Rate. The principal
                    balance  of such  portions  of the Loan other than the LIBOR
                    Loans  shall bear  interest  at the Prime  Based  Rate.  The
                    foregoing  provisions  of this  clause  (i) are  subject  to
                    imposition of the  Post-Default  Rate as provided in Section
                    2.6(d).

               (ii) From time to time as  provided  below,  Borrower  may make a
                    LIBOR Election in accordance  with the following  provisions
                    of this  clause  (ii).  Any LIBOR  Election,  in order to be
                    effective,  must be made by written notice, signed by a duly
                    authorized officer of Borrower  identified to Bank, given to
                    Bank and  actually  received by Bank,  and must  specify the
                    portions of the Loan which are the  subject  thereof and the
                    LIBOR Period  applicable  thereto.  Any LIBOR Election shall
                    become  effective as of the first day of the calendar  month
                    first  occurring  not less than  three  Business  Days after
                    Bank's  receipt  of the LIBOR  Election,  and  shall  remain
                    effective,  as to each LIBOR Loan specified  therein,  until
                    the end of the LIBOR Period  applicable  thereto  (excluding
                    the last day thereof).  Other than with the consent of Bank,
                    Borrower may not have more than four LIBOR Loans outstanding
                    at any time,  and any LIBOR  Election  that would  result in
                    more than four LIBOR  Loans being  outstanding  shall not be
                    effective.

               (iii)The  Prime-Based  Rate  and the  LIBOR-Based  Rate  shall be
                    adjusted  on  each  Interest  Rate  Adjustment  Date,  to be
                    effective upon such change.

               (iv) Notwithstanding  any other provisions of this Section 2.6(a)
                    to the contrary,  (A) Borrower may not make a LIBOR Election
                    if, at any time, deposits in Dollars for the requested LIBOR
                    Period are not  available  to Bank in the  London  interbank
                    market,  or (B) Borrower may not make a LIBOR Election,  and
                    if a LIBOR Election is in effect with respect to LIBOR Loan,
                    it shall  be  terminated  if,  at any  time,  by  reason  of
                    national or international  financial,  political or economic
                    conditions or by reason of any applicable law, treaty,  rule
                    or regulation (whether domestic or foreign) now or hereafter
                    in effect, or the  interpretation or administration  thereof
                    by   any   governmental    authority    charged   with   the
                    interpretation or administration  thereof,  or compliance by
                    Bank  with  any  request  or  directive  of  such  authority
                    (whether or not having the force of law), including, without
                    limitation,  exchange controls,  Bank reasonably  determines
                    that it is impracticable, unlawful or impossible for Bank to
                    maintain LIBOR Loans at the LIBOR-Based Rate.

          (b)  Interest  Rate on Other  Obligations.  With the  exception of any
               Obligations  due  and  owing  in  connection  with  that  certain
               facility  extended  from  Bank  to  Sterling   Acquisition  Corp.
               pursuant to a Loan and Security Agreement dated December 30, 1994
               (as the same may have been  modified,  amended or extended),  the
               outstanding  amount of any Obligations  other than the Loan shall
               bear interest at the  applicable  Interest  Rate,  subject to the
               imposition of Post-Default Rate as provided in Section 2.6(d).

          (c)  Interest  Payments.  Borrower  shall  pay to  Bank  (i)  interest
               accrued through the date of payment on the outstanding  principal
               amount  of each  LIBOR  Loan in  arrears  on the last day of each
               LIBOR  Period  applicable  thereto,  and  (ii)  interest  accrued
               through  the date of payment on each Loan other than a LIBOR Loan
               monthly in arrears  commencing on August 31, 2000 and  continuing
               on the last day of each calendar  quarter  thereafter;  provided,
               however, that if Borrower elects, pursuant to this Section 2.6 to
               convert a portion  of the Loan other than a LIBOR Loan to a LIBOR
               Loan,  Borrower shall pay all interest  accrued but unpaid on the
               portion of the Loan being converted for the period  commencing on
               the date of the last  interest  payment  for such  portion of the
               Loan to (but not including) the first day of the LIBOR Period for
               the LIBOR Loan into which such portion of the Loan was converted.
               Except as otherwise  provided in this Section 2.6, Borrower shall
               pay to Bank interest  accrued  through the date of payment on all
               other Obligations immediately upon demand.

          (d)  Post-Default Rate. Upon the occurrence and during the continuance
               of any  Event  of  Default,  the  outstanding  principal  and all
               accrued and unpaid interest, as well as any other Obligations due
               Bank hereunder or under any Loan Document, shall bear interest at
               the  Post-Default  Rate  from  the date on  which  such  Event of
               Default  shall have  occurred  to the date on which such Event of
               Default shall have been waived or cured.

     4.2  The following definitions are inserted in the appropriate alphabetical
          location  in Section 1.2 of the  Agreement.  To the extent that any of
          the  following  definitions  already  exists  in the  Agreement,  such
          definition  below  shall be deemed to have been  substituted  for such
          prior definition in its entirety:

         "Computation Date" means the last day of each fiscal quarter of
Borrower.

         "Debt  Ratio"  means,  as of any  Computation  Date,  the  ratio of (i)
Borrower's  Indebtedness  for Borrowed Money as of the Computation  Date to (ii)
Borrower's EBITDA for the Reference Period ending on the Computation Date.

         "Explorer Investment Agreement" means the Investment  Agreement,  dated
as of May 11, 2000,  between  Borrower and Explorer  Holdings,  L.P., a Delaware
limited partnership.

         "Explorer  Investment  Condition"  means  (i)  proper  approval  of the
Explorer Investment  Agreement by the shareholders of Borrower on or before July
31, 2000, and (ii) receipt by Borrower of not less than  $100,000,000  in equity
under the Explorer Investment Agreement on or before August 31, 2000.

         "Indebtedness  for Borrowed  Money" means at any  particular  time, all
Indebtedness (i) in respect of any money borrowed; (ii) evidenced by any loan or
credit agreement,  promissory note,  debenture,  bond, guaranty or other similar
written  obligation to pay money; or (iii) under any Capitalized  Lease,  all as
determined in accordance with GAAP.

         "Interest  Rate" means (a) the  Prime-Based  Rate,  with respect to any
portions of the Loan that are not LIBOR Loans,  and the  LIBOR-Based  Rate, with
respect any portions the Loan that are LIBOR Loans,  and (b) with respect to any
other Obligations, a rate equal to the Prime Rate plus two percent (2%).

         "Interest  Rate  Adjustment  Date"  means  (i)  with  respect  to those
portions of the Loan which are LIBOR  Loans,  the first day of the LIBOR  Period
for which  LIBOR-Based  Rate is being  determined  for each such LIBOR Loan, and
(ii) with respect to those portions of the Loan which are not LIBOR Loans,  each
date upon which the Prime Rate from time to time changes.

         "LIBOR-Based Rate" means an annual rate of interest equal to the sum of
(i) the LIBOR  Rate in effect as of the first day of LIBOR  Period for which the
LIBOR-Based Rate is being determined, plus (ii) the LIBOR Margin.

         "LIBOR  Election"  means an effective  election by Borrower to have the
principal balance of the Loan, or one or more designated portions thereof,  bear
interest at the LIBOR-Based  Rate for the LIBOR Period as designated  therein in
accordance with the provisions of Section 2.6(a).

         "LIBOR  Loan" means all or such  portions  of the Loan with  respect to
which a LIBOR Election shall have been made for the applicable LIBOR Period with
respect thereto.

         "LIBOR Margin" means one of the following percentages, depending on (i)
the  Debt  Ratio,  as  determined  by Bank as of the  Computation  Date  for the
immediately  preceding fiscal quarter,  and (ii) whether the Explorer Investment
Condition continues to be satisfied:

<TABLE>
<CAPTION>


                                                        Explorer Investment Condition        Explorer Investment
                                                          Continues to be Satisfied               Condition
                                                                                           Ceases to be Satisfied
<S>     <C>    <C>    <C>    <C>    <C>    <C>
Debt Ratio
Greater than or equal to 5.5:1                                      3.25%                           4.00%
Greater than or equal to 5.0:1, but less than 5.5:1                 3.25%                           3.50%
Greater than or equal to 4.5:1, but less than 5.0:1                 3.00%                           3.25%
Greater than or equal to 4.0:1, but less than 4.5:1                 2.75%                           3.00%
Less than 4.0:1                                                     2.50%                           2.75%

</TABLE>

         "LIBOR  Period" means a period  consisting of one (1), two (2), three
(3) or six (6) calendar  months,  as designated by Borrower from time to time in
a LIBOR Election.

         "LIBOR Rate" means,  as  applicable to any LIBOR Loan, an interest rate
per annum equal to the  quotient  of (i) the rate of interest  Bank may quote to
Borrower, from time to time and subject to change without notice,  determined on
the basis of the  offered  per annum  rate,  estimated  per annum  rate,  or the
arithmetic mean of the per annum rates  determined by Bank and rounded upward to
two decimal points in its reasonable  discretion for deposits in U.S. Dollars in
an amount comparable to the LIBOR Loan for the LIBOR Period,  which shall appear
on page BBAM,  captioned  British Bankers Assoc.  Interest  Settlement Rates, of
Bloomberg,  a service of Bloomberg Partners (or such other page that may replace
such page on that service for the purpose of displaying  the LIBOR Rate),  or if
such service  ceases to be available,  such other  reasonable  source  reporting
"London Interbank Offered Rates" of major banks on the date that is two Business
Days prior to the  commencement  of the LIBOR  Period,  divided by (ii) a number
equal to one minus the aggregate  (without  duplication) of the rates (expressed
as a decimal fraction) of the LIBOR Reserve Requirements current on the date two
Business Days prior to the commencement of the LIBOR Period.

         "LIBOR Reserve  Requirements"  means,  for any LIBOR Period for which a
LIBOR Election is effective, the maximum reserves (whether basic,  supplemental,
marginal,  emergency or  otherwise)  prescribed by the Board of Governors of the
Federal  Reserve System (or any successor) with respect to liabilities or assets
consisting  of or  including  eurocurrency  funding,  currently  referred  to as
"Eurocurrency liabilities" (as defined in Regulation D of the Board of Governors
of the Federal Reserve System), having a term equal to the LIBOR Period.

         "Prime-Based Rate" means an annual rate of interest equal to the sum of
(i) the Prime Rate as in effect from day to day plus (ii) the Prime Margin.

         "Prime Margin" means one of the following percentages, depending on (i)
the  Debt  Ratio,  as  determined  by Bank as of the  Computation  Date  for the
immediately  preceding fiscal quarter,  and (ii) whether the Explorer Investment
Condition continues to be satisfied:

<TABLE>
<CAPTION>

                                                        Explorer Investment Condition        Explorer Investment
                                                          Continues to be Satisfied               Condition
                                                                                          Ceases to be Satisfied
<S>     <C>    <C>    <C>    <C>    <C>    <C>

Debt Ratio
Greater than or equal to 5.5:1                                      1.00%                           2.75%
Greater than or equal to 5.0:1, but less than 5.5:1                 1.00%                           2.50%
Greater than or equal to 4.5:1, but less than 5.0:1                 0.50%                           2.25%
Greater than or equal to 4.0:1, but less than 4.5:1                 0.50%                           2.00%
Less than 4.0:1                                                     0.25%                           1.75%

</TABLE>

         "Prime Rate" means the rate of interest  established  from time to time
by Bank as its prime rate at its Head Office, whether or not Bank shall at times
lend to other borrowers at lower rates of interest.

     4.3  The definition "Interest Period" is deleted from the Agreement.

     4.4  Paragraph  3.5(c) of the  Agreement  shall be amended and  restated to
          read in its entirety as follows:

          (c)  Adding  new  Property  to  the  Real  Property   Collateral,   or
               substituting  new Property for  Property  being  removed from the
               Real Property Collateral,  shall require that, (i) following such
               addition or  substitution,  the Real Property  Collateral has and
               continues   to  have   aggregate   EBITDAR   of  not  less   than
               $11,000,000.00  and EBITDAR  Coverage of not less than 1.25,  and
               (ii) the Loan Party in question  (A)  delivers to Bank a lender's
               title  insurance  policy  on the  new  Property,  which  must  be
               reasonably  satisfactory  to Bank  and  indicate  that  such  new
               Property   is  owned  by  such  Loan   Party   free,   clear  and
               unencumbered,  except  for a lease to an  Operator  on terms  and
               conditions  acceptable to Bank, and that Bank's  Mortgage on such
               property is a first  priority  lien, (B) executes and delivers to
               Bank a Mortgage, in form and content satisfactory to Bank, on the
               new Property, and the due and proper recordation of such Mortgage
               on the  new  Property,  (C)  delivers  to Bank  such  Appraisals,
               environmental  audits,  reports or site assessments,  flood plain
               certifications  and surveys with respect to such Property as that
               Loan Party  shall have in its  possession,  and  agrees,  if Bank
               reasonably believes that any such item raises a concern about the
               Property in question,  to provide updated  information  regarding
               such  item  within  sixty  (60)   following  the  later  of  such
               substitution or Bank's request for such updated information,  and
               such updated information must be in form and substance reasonably
               acceptable  to Bank,  or Bank may remove such  Property  from the
               Real Property  Collateral  and request that  additional  Property
               reasonably  acceptable  to  Bank  be  substituted  therefor,  (D)
               delivers  to  Bank  such  other   information  and  documentation
               regarding the Property as Bank shall  reasonably  require and (E)
               pays all  costs,  fees and  expenses,  including  fees of  Bank's
               counsel,  associated with the review of information regarding the
               new Property,  the preparation of the new Mortgage, the recording
               of the same and the  preparation  of  documentation  necessary to
               release the Mortgage on the Property  being removed and released.
               Bank  agrees  to pay  one-half  of the cost of any new  Appraisal
               required by Bank under (ii)(C) above.

         5.  Failure to Comply and Event of  Default.  Borrower  and  Guarantors
acknowledge  and agree that it shall be an Event of Default under Section 9.1 of
the  Agreement,  and Bank shall have all of its  rights and  remedies  under the
Agreement and the Loan Documents,  if Borrower or Guarantors fail to comply with
the any of the terms,  conditions and provisions of this  Amendment,  including,
but not limited to, the provisions of Sections 1 and 2 hereof.

         6.       Representations and Warranties

                  6.1 All warranties and representations  made to Bank under the
Agreement  and each of the other Loan  Documents  are true and correct as of the
date hereof.

                  6.2 The execution  and delivery by Borrower and  Guarantors of
this   Amendment  and  the   performance  by  Borrower  and  Guarantors  of  the
transactions  herein  contemplated  (i) are and will be  within  Borrower's  and
Guarantors'  corporate  or  company  powers,  (ii) have been  authorized  by all
necessary  corporate action,  and (iii) are not and will not be in contravention
of any law, any order of any court or other agency of  government,  or any other
indenture,  agreement or  undertaking  to which  Borrower or any  Guarantor is a
party or by which the  property of Borrower  is bound,  or be in conflict  with,
result in a breach of, or  constitute  (with due notice  and/or lapse of time) a
default  under any such  indenture,  agreement or  undertaking  or result in the
imposition  of any  lien,  charge  or  encumbrance  of any  nature on any of the
properties of Borrower.

                  6.3 This Amendment is valid,  binding and enforceable  against
Borrower and Guarantors in accordance with its terms.

         7. Effectiveness Conditions. This Amendment shall be effective upon the
execution and delivery of this Amendment.

         8.  Confirmation  of  Indebtedness.  Borrower hereby  acknowledges  and
confirms  that as of the close of business on July 12,  2000,  it is indebted to
Bank,  without defense,  set off, claim,  counterclaim or defense of any nature,
under the Agreement,  in the aggregate principal amount of $50,000,000.00,  plus
all interest,  fees, costs and expenses (including  attorneys' fees) incurred to
date in  connection  with this  Amendment,  the  Agreement  and the  other  Loan
Documents.

         9.  Ratification  of Existing Loan  Documents.  Except as expressly set
forth  herein,  all of the terms and  conditions  of the Agreement and the other
Loan Documents are hereby  ratified and confirmed and continue  unchanged and in
full force and effect.

         IN WITNESS  WHEREOF,  the parties have caused this Agreement to be duly
executed and delivered by their proper and duly authorized officers.

                                            THE PROVIDENT BANK


                                     By: /s/ Steven J. Bloemer
                                         ------------------------
                                    Its: Vice President
                                Printed: Steven J. Bloemer





<PAGE>


                                       OMEGA HEALTHCARE INVESTORS, INC.,
                                       STERLING ACQUISITION CORP.
                                       OHI(IOWA), INC.
                                       DELTA INVESTORS I, LLC
                                       DELTA INVESTORS II, LLC

                                         /s/ F. Scott Kellman
                                       ----------------------------------------
                                   By: F. Scott Kellman, Chief Operating Officer

        F. Scott Kellman,  as an executive officer of all of the aforementioned
corporations  or  limited  liability  companies,  has  executed  this  Amendment
intending that all corporations or limited  liability  companies above named are
bound  and are to be  bound  by the one  signature  as if he had  executed  this
Amendment separately for each of the above named corporations.


</TEXT>
</DOCUMENT>
