AMENDMENT NO. 1 TO LOAN AGREEMENT
                        ---------------------------------


         AMENDMENT NO. 1 TO LOAN  AGREEMENT  (this "First  Amendment"),  made
and executed this 22nd day of October, 1999, effective as of August 18, 1999,
by and between:

         OMEGA WORLDWIDE, INC., a Maryland corporation (the "Borrower");

         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  Borrower  has  entered  into a certain  Loan  Agreement  dated
November 20, 1998 (together with all Exhibits and Schedules thereto, hereinafter
referred to as the "Loan Agreement") with the Agent and the Banks;

         (B) The  Borrower  has  requested  that the Banks  and the Agent  amend
certain  provisions  of the Loan  Agreement,  and the  Banks  and the  Agent are
willing  to so  amend  the  Loan  Agreement,  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 Loan Agreement.  The Loan Agreement is hereby
            ------------------------------------
amended,  effective  on the date  this  First  Amendment  becomes  effective  in
accordance with Section 4 hereof, as follows:

                  2.1. Article 1 of the Loan Agreement  (Definitions) is amended
by deleting the chart  appearing in the  definition of  "Applicable  Margin" and
substituting therefor the following:

                  "Category 1
                  -----------

                  Both of the following Ratings:

                  BBB or higher by S&P; and
                  Baa2 or higher by Moody's                            1.0625%

                  Category 2
                  ----------

                  Both of the following Ratings:

                  BBB- by S&P; and
                  Baa3 by Moody's                                      1.1875%

                  Category 3
                  ----------

                  BBB- or higher by D&P and one of the following Ratings:

                  BBB- by S&P; or
                  Baa3 by Moody's                                      1.350%"

                  2.2. Article 1 of the Loan Agreement  (Definitions) is amended
by deleting the chart appearing in the definition of "Commitment Fee Percentage"
and substituting therefor the following:

                  "Category 1
                  -----------

                  Both of the following Ratings:

                  BBB or higher by S&P; and
                  Baa2 or higher by Moody's                            .250%

                  Category 2
                  ----------

                  Both of the following Ratings:

                  BBB- by S&P; and
                  Baa3 by Moody's                                      .300%

                  Category 3
                  ----------

                  BBB- or higher by D&P and one of the following Ratings:

                  BBB- by S&P; or
                  Baa3 by Moody's                                      .400%"

                  2.3 The following definition is added to Article 1 of the Loan
Agreement (Definitions) in its appropriate alphabetical position:

                  "'D&P' - Duff & Phelps."

                  2.4 The definition of "Ratings Agencies"  appearing in Article
1 of the  Loan  Agreement  (Definitions)  is  deleted  in its  entirety  and the
following is substituted therefor:

                  "'Ratings Agencies' - Moody's, S&P and D&P."

                  2.5  Article 8 of the Loan  Agreement  (Events of  Default) is
amended by deleting  Section 8.11  (Ratings)  in its  entirety and  substituting
therefor the following:

                  "Section 8.11  Ratings.
                                 -------

                  Failure by Omega to maintain an  investment  grade  Rating
from at least two of the three Ratings Agencies."

                  2.6   Article   10  of  the  Loan   Agreement   (Miscellaneous
Provisions) is amended by  substituting  the following  addresses in subsections
(a) and (c) of Section 10.9 (Notices), as follows:

                           "(a)   If to the Borrower:

                                  c/o Omega Healthcare Investors, Inc.
                                  900 Victors Way, Suite 345
                                  Ann Arbor, Michigan  48108
                                  Attention: Mr. Essel W. Bailey, Jr., President
                                  Telecopier No.: (734) 887-0301"

                           "(c)     If to the Agent:

                                    Fleet Bank, N.A., as Agent
                                    1185 Avenue of the Americas
                                    New York, New York  10036
                                    Attention: Mr. Christian J. Covello
                                    Telecopier No.: (212) 819-4120

                                    with a copy  (other  than  in  the  case  of
                                    Borrowing  Notices  and  reports  and  other
                                    documents   delivered  in  compliance   with
                                    Article 5 hereof) to:

                                    Emmet, Marvin & Martin, LLP
                                    120 Broadway
                                    New York, New York 10271-3291
                                    Attention:   Richard S. Talesnick, Esq.
                                    Telecopier No.: (212) 238-3100"


         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 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. Conditions Precedent to Effectiveness of Amendments.  The amendments
            ---------------------------------------------------
contemplated by Section 2 hereof are subject to the  satisfaction of each of the
                ---------
following conditions precedent:

                  4.1 First Amendment.  The Loan Parties shall have delivered or
                      ---------------
caused  to be  delivered  to the  Agent  and  each  Bank  an  original  executed
counterpart of this First Amendment.

                  4.2 No Default.  As of the date  hereof,  no Default or Event
                      -----------
of Default  shall have occurred and be continuing.

                  4.3 Warranties. As of the date hereof, the representations and
                      ----------
warranties  contained  in  Section 3 of this First  Amendment  shall be true and
                           ---------
correct.

                  4.4  Amendment  Fee. The Borrower  shall have paid the
                       --------------
Amendment  Fee in  accordance with Section 6.2 below

         5. Reference to and Effect Upon the Loan Agreement.
            -----------------------------------------------

                  5.1 Effect. Except as specifically amended hereby, 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.

                  5.2  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.

         6.       Miscellaneous.
                  --------------

                  6.1 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.

                  6.2. Amendment  Fee.  Simultaneously  with the  execution and
                       --------------
delivery of this Agreement, the Borrower shall pay to the Agent, for the benefit
of  the  Banks,  pro  rata,  according  to  their  respective  Revolving  Credit
Commitments,  a non-refundable  Amendment Fee in an amount equal to .125% of the
Total Commitment.

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

                  6.4   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.



<PAGE>


                  6.5  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.

                  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 WORLDWIDE, INC.


                                              By   /s/ Edward C. Noble
                                                   -------------------
                                                                       Title

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


                                              By   /s/ Christian Covello
                                                   ---------------------
                                                                        Title

                                                HARRIS TRUST AND SAVINGS BANK


                                              By   /s/ Kirby M. Law
                                                   ---------------------
                                                                        Title


Agreed to and Accepted:

OMEGA HEALTHCARE INVESTORS, INC.


By  /s/ David A. Stover
    -------------------
                                Title