Document:

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.ADVISORY AGREEMENT

     THIS ADVISORY  AGREEMENT,  dated as of July 14, 2000 (this  "Agreement") is
made and entered  into  between  Omega  Healthcare  Investors,  Inc., a Maryland
corporation  (the "Company"),  and The Hampstead Group,  L.L.C., a Texas limited
liability company (the "Advisor").

     A. Explorer Holdings, L.P. (the "Purchaser"),  an affiliate of the Advisor,
has  made  a  substantial  equity  investment  in  the  Company  pursuant  to an
Investment  Agreement,  dated as of the date hereof,  between  Purchaser and the
Company (the "Investment Agreement");

     B. The Advisor,  by and through itself, its affiliates and their respective
officers,  employees  and  representatives,   has  expertise  in  the  areas  of
management,  finance,  strategy,  investment  and  acquisitions  relating to the
business of the Company; and

     C.  Pursuant  to the terms of the  Investment  Agreement,  the  Company may
desire to avail itself,  during the term of this Agreement,  of the expertise of
the  Advisor in the  aforesaid  areas and the  Advisor  may wish to provide  the
services to the Company as herein set forth.

                  NOW, THEREFORE, in consideration of the foregoing, the parties
hereto agree as follows:

     1.  Advisory  Services.  (a) The Advisor may,  from time to time,  consider
advising and  assisting the Company in connection  with the  development  of its
strategic  plan,  including  acquisitions,  divestitures,  new  development  and
financing matters.  The precise nature of the services to be performed hereunder
by the Advisor will be determined  from time to time by mutual  agreement of the
Advisor  and the  Company.  The  Company  hereby  acknowledges  that the persons
performing  the  foregoing  services are  full-time  employees of the Advisor or
other  entities  and will not be expected to devote  substantially  all of their
efforts to the Company but rather only so much of their efforts as, from time to
time, the Advisor  determines in its reasonable  discretion to be appropriate in
the  circumstances.  The Advisor  will  disclose  to the  Company  any  material
interest of the  Advisor,  or its  affiliates  or designees  providing  services
hereunder, in matters that are the subject of the advisory services contemplated
hereby,  other than the Advisor's  interest as a shareholder  of the Company and
designees as directors of the Company.

     (b) The Advisor and the individuals  acting on its behalf that are actually
providing  the services  contemplated  hereby will be  independent  contractors,
rather  than  employees  or  agents,  and will have only  such  authority  as is
incident to the  discharge of the duties  herein  contemplated  or  specifically
authorized  from  time to time by the Board of  Directors  of the  Company  (the
"Board").

     2. Consideration. In consideration for the services provided by the Advisor
under  this  Agreement,  the  Company  will pay to the  Advisor  such  customary
advisory fees (the "Fees")  based upon the type and amount of services  provided
by the  Advisor  and as are agreed  upon by the  Advisor and a majority of those
members  of the  Board  who  are  "independent  directors"  having  no  material
affiliation or relationships with the Purchaser, the Advisor or the Company.

     3.  Reimbursements.  In addition to the Fees, the Company will pay directly
or reimburse the Advisor for its Out-of-Pocket Expenses.  Promptly following the
Company's request therefor,  the Advisor will provide written  substantiation in
reasonable   detail  relating   to any  Out-of-Pocket  Expenses  to be  paid  or
reimbursed by the Company  pursuant to this Agreement.  For the purposes of this
Agreement,  the term "Out-of-Pocket  Expenses" means the out-of-pocket costs and
expenses  that are  actually  and  reasonably  incurred  by the  Advisor  or its
affiliates   in   connection   with  the  services   rendered   hereunder.   All
reimbursements for Out-of-Pocket  Expenses will be made promptly upon or as soon
as  practicable  after  presentation  by the Advisor to the Company of a written
statement therefor.

     4.  Indemnification.  (a) The Company will  indemnify and hold harmless the
Advisor,  its  affiliates,  and their  respective  partners  (both  general  and
limited), members (both managing and otherwise), officers, directors, employees,
agents and representatives  (each such person being an "Indemnified Party") from
and against any and all losses, claims,  damages and liabilities,  whether joint
or several  (the  "Indemnifiable  Losses"),  related  to,  arising  out of or in
connection with the services contemplated by this Agreement or the engagement of
the Advisor  pursuant  to, and the  performance  by the Advisor of the  services
contemplated by, this Agreement,  whether or not pending or threatened,  whether
or not an  Indemnified  Party is a party and whether or not such action,  claim,
suit,  investigation  or  proceeding  (a "Claim") is initiated or brought by the
Company directly,  derivatively or otherwise,  including without  limitation any
action, suit,  proceeding or investigation  arising out of any action or failure
to take action by the Company or any of its  subsidiaries,  whether or not based
on  a  theory  of  primary  or  secondary  liability,  and  will  reimburse  any
Indemnified  Party for all reasonable costs and expenses  (including  reasonable
attorneys'   fees  and  expenses)  as  they  are  incurred  in  connection  with
investigating, preparing, pursuing, defending or assisting in the defense of any
Claim for which the Indemnified Party would be entitled to indemnification under
the terms of this  sentence,  or any  action or  proceeding  arising  therefrom,
whether or not such Indemnified Party is a party thereto, provided that, subject
to the following sentence,  the Company, upon execution of a written undertaking
reasonably  satisfactory  to the  Advisor  confirming  the  Company's  indemnity
obligations hereunder (without any reservation of rights other then as permitted
elsewhere herein) and expressly  releasing all Indemnified  Parties from any and
all  liability  related to the  matter in  question  subject to the  limitations
contained herein (such undertaking, an "Indemnity Undertaking") will be entitled
to assume the defense thereof at its own expense,  with counsel  satisfactory to
such Indemnified Party in its reasonable judgment. Any Indemnified Party may, at
its own expense,  retain separate counsel to participate in such defense, and in
any Claim in which both the Company and/or one or more of its  subsidiaries,  on
the one hand, and an Indemnified  Party, on the other hand, is, or is reasonably
likely to become, a party,  such Indemnified Party will have the right to employ
separate counsel at the expense of the Company and to control its own defense of
such Claim if, in the reasonable opinion of counsel to such Indemnified Party, a
conflict or potential conflict exists between the Company,  on the one hand, and
such  Indemnified  Party,  on the other  hand,  that  would  make such  separate
representation  advisable. The Indemnified Party shall give prompt notice to the
Company of any actual or asserted event or occurrence  that could  reasonably be
expected to give rise to a Claim. The failure by an Indemnified  Party to notify
the Company of a Claim will not relieve the Company from any liability hereunder
unless, and only to the extent that, the Company did not learn of such Claim and
such failure  shall  materially  prejudice  the ability of the Company to defend
such  Claim or  otherwise  perfect  rights to any  insurance  coverage  relating
thereto.  The  Company  will not,  without  the  prior  written  consent  of the
applicable Indemnified Party, settle,  compromise or consent to the entry of any
judgment in any pending or threatened Claim relating to the matters contemplated
hereby (if any Indemnified Party is a party thereto or has been threatened to be
made a party thereto) unless such settlement,  compromise or consent includes an
unconditional  release of the  applicable  Indemnified  Party from all liability
arising  or that may arise out of such  Claim.  Provided  the  Company is not in
breach of its indemnification  obligations  hereunder,  no Indemnified Party may
settle or compromise any Claim subject to indemnification  hereunder without the
consent of the Company  provided that prior thereto such  Indemnified  Party has
been furnished with an Indemnity Undertaking.

     (b) If any indemnification sought by any Indemnified Party pursuant to this
Section is unavailable for any reason or is insufficient to hold the Indemnified
Party harmless  against any  Indemnifiable  Losses referred to herein,  then the
Company   will   contribute   to  the   Indemnifiable   Losses  for  which  such
indemnification  is held  unavailable or  insufficient  in such proportion as is
appropriate  to reflect the relative  benefits  received (or  anticipated  to be
received) by the Company,  on the one hand, and the Advisor,  on the other hand,
in connection with the transactions which gave rise to such Indemnifiable Losses
or,  if such  allocation  is not  permitted  by  applicable  law,  not only such
relative benefits but also the relative faults of the Company,  on the one hand,
and  the  Advisor,   on  the  other  hand,  as  well  as  any  other   equitable
considerations,  subject  to the  limitation  that in any  event  the  aggregate
contribution by the Indemnified Parties to all Indemnifiable Losses with respect
to which  contribution  is  available  hereunder  will not  exceed the Fees paid
through the date on which (or, if more than one date, the last date on which the
conduct occurred that gave rise to the Indemnifiable Loss).

     (c) Notwithstanding any other provision hereof, none of the Advisor nor any
employee,  officer,  director  or other  related  person or entity will have any
liability  or  obligation  by  reason  of  this  Agreement  for  performance  or
nonperformance of services  contemplated  hereby except and solely to the extent
that it is judicially determined by a court of competent  jurisdiction that such
person  intentionally  breached or caused to be breached a material provision of
this Agreement.  The parties hereto hereby  expressly  disclaim any liability or
obligation  of the  Advisor  and  its  affiliates  or any  of  their  respective
employees,  officers, directors and other related persons or entities for actual
or  alleged  negligence  of  any  character  in  connection  with  the  services
contemplated by this Agreement.

     (d) The  provisions  of this  Section  4 will be in  addition  to and in no
manner limit or  otherwise  affect any other right that the Advisor or any other
Indemnified Party may have,  whether by contract,  or arising as a matter of law
or the constituent documents of any other entity.

     5. Term. This Agreement will terminate by (i) mutual consent of the parties
or (ii) on or after July 1, 2001,  by either the Company or the Advisor  with or
without cause on 60 calendar days prior notice to the other.  The termination or
expiration of the term of this  Agreement  will not affect the Advisor's  rights
(i)  under  Sections  3 or 4 hereof  (which  will  survive  any  termination  or
expiration of this  Agreement) and (ii) under Section 2 to receive the amount of
Fees pro rated  based  upon the  portion  of  services  performed  prior to such
termination.

     6.  Miscellaneous.  (a) No  amendment  or waiver of any  provision  of this
Agreement,  or consent to any  departure  by either  party  hereto from any such
provision,  shall be effective unless the same shall be in writing and signed by
each of the parties hereto. Any amendment,  waiver or consent shall be effective
only in the specific  instance and for the specific purpose for which given. The
waiver by any party of any breach of this  Agreement  shall not operate as or be
construed to be a waiver by such party of any subsequent breach.

     (b) Any notices or other  communications  required or  permitted  hereunder
shall  be  sufficiently  given if  delivered  personally  or sent by  facsimile,
Federal Express or other nationally  recognized overnight courier,  addressed as
follows or to such other address of which the parties may have given notice:

If to the Advisor:                          The Hampstead Group, L.L.C.
                                            4200 Texas Commerce Tower West
                                            2000 Ross Avenue
                                            Dallas, Texas 75201
                                            Attention: William T. Cavanaugh, Jr.
                                            Facsimile: (214) 220-4949

If to the Company:                          Omega Healthcare Investors, Inc.
                                            900 Victors Way
                                            Suite 350
                                            Ann Arbor, Michigan 48108
                                            Attention:  Susan Allene Kovach
                                            Facsimile:  (734) 887-0322

Unless otherwise specified herein, such notices or other communications shall be
deemed  received (i) on the date delivered,  if delivered  personally or sent by
facsimile,  and (ii) one  business  day after  being sent by Federal  Express or
other overnight courier.

     (c) This Agreement  shall be governed by, and construed and  interpreted in
accordance  with, the laws of the State of Delaware.  This Agreement shall inure
to the benefit of, and be binding upon, the parties hereto and their  respective
successors  and assigns.  The provisions of Section 4 shall inure to the benefit
of each Indemnified Party.

     (d) This Agreement may be executed by one or more parties to this Agreement
on any  number of  separate  counterparts,  and all of said  counterparts  taken
together shall be deemed to constitute one and the same instrument.

     (e) The  waiver by any  party of any  breach  of this  Agreement  shall not
operate  as or be  construed  to be a waiver  by such  party  of any  subsequent
breach.

     (f) Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability  without  invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction  shall be not invalidate or render  unenforceable such provision in
any other jurisdiction.

     (g) For purposes of this  Agreement,  (i)  "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 and
(ii) "person" means an individual,  corporation,  partnership, limited liability
company, joint venture, association, trust, unincorporated organization or other
entity.

     (h) When a reference  is made in this  Agreement  to an  Article,  Section,
Exhibit or Schedule,  such  reference is to a Section of 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".  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 defined in this
Agreement will have the 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. References to a person are also to its
permitted successors and assigns.

     (i) This  Agreement  (including the documents and  instruments  referred to
herein)  (i)  constitutes  the  entire  agreement,   and  supersedes  all  prior
agreements  and  understandings,  both written and oral,  among the parties with
respect  to the  subject  matter  of this  Agreement  and  (ii)  except  for the
provisions  of Section 4, are not  intended to confer upon any person other than
the parties any rights or remedies.

     (j) Neither this Agreement nor any of the rights,  interests or obligations
under this  Agreement may be assigned,  in whole or in part, by operation of law
or otherwise by either of the parties hereto  without the prior written  consent
of the other party; provided however, that the Advisor may assign its rights and
obligations  under this Agreement to an Affiliate of Advisor without the consent
of the Company  provided that no such  assignment  shall relieve  Advisor of its
obligations  under this Agreement.  Any assignment in violation of the preceding
sentence will be void. Subject to the preceding sentence, this Agreement will be
binding upon,  inure to the benefit of, and be  enforceable  by, the parties and
their respective successors and assigns.

     (k) The  parties  agree that  irreparable  damage  would occur and that the
parties  would not have any adequate  remedy at law in the event that any of the
provisions  of this  Agreement  were not  performed  in  accordance  with  their
specific terms or were  otherwise  breached.  It is accordingly  agreed that the
parties will be entitled to an injunction or injunctions to prevent  breaches of
this  Agreement  and to enforce  specifically  the terms and  provisions of this
Agreement in any federal  court  located in the State of Delaware or in Delaware
state  court,  this  being in  addition  to any other  remedy to which  they are
entitled  at law or in  equity.  In  addition,  each of the  parties  hereto (a)
consents to submit  itself to the  personal  jurisdiction  of any federal  court
located in the State of Delaware  and or any  Delaware  state court in the event
any dispute arises out of this Agreement or any of the transactions contemplated
by this  Agreement,  (b) agrees  that it will not attempt to deny or defeat such
personal  jurisdiction by motion or other request for leave from any such court,
and (c) agrees that it will not bring any action  relating to this  Agreement or
any of the transactions contemplated by this Agreement in any court other than a
federal court sitting in the State of Delaware or a Delaware state court.

                            [Signature page follows]

<PAGE>

                  IN WITNESS WHEREOF,  the parties have caused this Agreement to
be  executed as of the date first  written  above by their  respective  officers
thereto duly authorized.

                                              OMEGA HEALTHCARE INVESTORS, INC.

                                              By: /s/ Susan Allene Kovach
                                              ---------------------------
                                              Name:  Susan Allene Kovach
                                              Title: Vice President

                                              THE HAMPSTEAD GROUP, L.L.C.

                                              By: /s/ William T.Cavanaugh, Jr.
                                              --------------------------------
                                              Name:  William T. Cavanaugh
                                              Title: Vice President

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