Exhibit
10.5


 


SECOND
AMENDMENT TO CREDIT AGREEMENT


 


To each of the Lenders

signatory hereto


 


Ladies and Gentlemen:


 


Reference is
hereby made to that certain Credit Agreement dated as of December 26, 2003
(as amended hereby and heretofore amended, the “Credit
Agreement”), between the undersigned,
LTC Properties, Inc., the Guarantors party thereto, the Lenders party
thereto, Bank of Montreal, as Administrative Agent, Harris Nesbitt Corp., as
Co-Lead Arranger and Book Manager and Key Bank National Association, as
successor in interest to Key Corporate Capital Inc., as Co-Lead Arranger and
Syndication Agent.  All capitalized terms
used herein without definition shall have the same meanings herein as such
terms have in the Credit Agreement.


 


The Company has
requested that Merrill Lynch Capital, a Division of Merrill Lynch Business
Financial Services Inc., a Delaware corporation (“Merrill
Lynch”) be added as a Lender with a Commitment of $20,000,000
pursuant to Section 1.14 of the Credit Agreement and the Lenders are
willing to amend the Credit Agreement to do so under the terms and conditions
set forth in this agreement (herein, the “Amendment”).


 


1.             ADDITION
OF NEW LENDER.


 


Upon satisfaction
of the conditions precedent set forth in Section 3 below, the Credit Agreement
shall be and hereby is amended as follows:


 


1.1           Merrill Lynch
Capital, a Division of Merrill Lynch Business Financial Services Inc., a
Delaware corporation (the “New Lender”)
shall be deemed a Lender signatory to the Credit Agreement and shall have all
the rights, benefits, duties and obligations of a Lender under the Credit
Agreement and the Loan Documents. 
Accordingly, all references in the Credit Agreement and the Loan
Documents to the terms “Lender” and “Lenders” shall be deemed to include, and be a reference to,
the New Lender.  The New Lender agrees
that it will perform all of the duties and obligations which by the terms of
the Credit Agreement and the Loan Documents are required to be performed by it
as a Lender with a Commitment of $20,000,000.


 





















 


1.2           The following address
shall be deemed to appear on the New Lender’s signature page in the Credit
Agreement as so amended for the New Lender:


 


Merrill Lynch Capital,

a Division of Merrill Lynch Business Financial Services Inc.


222 N. LaSalle
Street, 16th Floor


Chicago, IL  60601


 


Attention:      John
H. Ferguson, V


Assistant Vice President, Operations


Telephone:    (312)
499-3361


Telecopy:      (312)
750-6240


 


2.             AMENDMENTS.


 


Subject to the
satisfaction of the conditions precedent set forth in Section 3 below, the
Credit Agreement shall be and hereby is amended as follows:


 


2.1.          Section 1.5(b) of the
Credit Agreement shall be amended in its entirety to read as follows:


 


(b)           Notice to the Lenders. 
The Administrative Agent shall (i) give prompt telephonic or facsimile
notice of each Borrowing notice received from Borrower pursuant to Section
1.5(a) above, (ii) send a facsimile copy to each Lender within
five (5) Business Days of the date of receipt of each notice from the
Borrower received pursuant to Section 1.5(a) above and (iii) if such
notice requests the Lenders to make Eurodollar Loans, the Administrative Agent
shall give notice to the Borrower and each Lender by like means of the interest
rate applicable thereto promptly after the Administrative Agent has made such
determination.


 


2.2           The defined term “Commitment” appearing in Section 5.1 of the Credit
Agreement is hereby amended by deleting the last sentence thereof and replacing
it with the following:


 


The Borrower and
the Lenders acknowledge and agree that the Commitments of the Lenders aggregate
$65,000,000 as of October 5, 2004.


 


2.3.          Schedule I to the Credit
Agreement is hereby amended and restated in its entirety in the form attached
hereto as Schedule I.


 


2





















 


3.             CONDITIONS PRECEDENT.


 


The effectiveness of this
Amendment is subject to the satisfaction of all of the following conditions
precedent:


 


3.1.          The Borrower, the
Administrative Agent and the Lenders shall each have executed and delivered
this Amendment.


 


3.2.          The Borrower shall have
executed and delivered a Note to Merrill Lynch in the amount of its
Commitment, such new Note to constitute a ”Note”
for all purposes of the Credit Agreement and the other Loan Documents upon the
Administrative Agent’s receipt of the same for the New Lender.


 


3.3           All legal matters
incident to the execution and delivery of this Amendment and the instruments
and documents contemplated hereby shall be satisfactory to the Lenders and
their counsel; and the Administrative Agent shall have received (with a signed
copy for each Lender) (i) the favorable written opinion of counsel for the
Borrower in form and substance satisfactory to the Administrative Agent and
(ii) the signed Certificate of the Secretary or an Assistant Secretary of
the Borrower, dated the date hereof, certifying (x) a true and correct
copy of resolutions adopted by the Board of Directors of the Borrower
authorizing or ratifying the execution, delivery and performance of the Credit
Agreement as amended by this Amendment and the other instruments and documents
called for above, including the Note to be issued to the New Lender and
(y) the incumbency and specimen signatures of officers of the Borrower
executing the documents referred to in clause (x) above and any other
documents delivered to the Administrative Agent in connection with this
Amendment.


 


3.4.          The Guarantors shall
have executed and delivered their consent to this Amendment in the space
provided for that purpose below.


 


4.             EQUALIZATION OF OUTSTANDING LOANS.


 


Anything contained in the
Credit Agreement to the contrary notwithstanding, upon satisfactory completion
of the conditions precedent to the effectiveness of this Amendment set forth
above, Merrill Lynch shall advance to the Administrative Agent an amount equal
to its ratable share of all outstanding Loans and the Administrative Agent
shall allocate such amount to each of the other Lenders so that after giving
effect thereto each Lender holds its ratable share of the total of the Loans
then outstanding.  On such date, the
Lender’s respective interests in outstanding Letters of Credit shall also be
adjusted to reflect Merrill Lynch’s pro rata interest therein.


 


5.             REPRESENTATIONS.


 


In order to induce the
Lenders to execute and deliver this Amendment, the Borrower hereby represents
to the Administrative Agent and the Lenders that as of the date hereof the
representations and warranties set forth in Section 6 of the Credit
Agreement are and shall be and


 


3





















 


remain true and correct (except to the extent the same expressly relate
to an earlier date) and the Borrower is in compliance with all of the terms and
conditions of the Credit Agreement and the other Loan Documents and no Default
or Event of Default has occurred and is continuing under the Credit Agreement
or shall result after giving effect to this Amendment.


 


6.             MISCELLANEOUS.


 


6.1           By signing below, the
New Lender hereby (i) confirms that it has received a copy of the Credit
Agreement, together with copies of the most recent financial statements
delivered to the Lenders pursuant to Section 8.5 thereof and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Amendment; (ii) agrees that it will,
independently and without reliance upon the Administrative Agent or any other
Lender and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under the Credit Agreement; (iii) appoints and authorizes the
Administrative Agent to take such action as Administrative Agent on its behalf
and to exercise such powers under the Credit Agreement and the other Loan
Documents as are delegated to the Administrative Agent by the terms thereof,
together with such powers as are reasonably incidental thereto; and (iv) agrees
that it will perform in accordance with their terms all of the obligations
which by the terms of the Credit Agreement and the other Loan Documents are
required to be performed by it as a Lender.


 


6.2.          Except as specifically
amended herein, the Credit Agreement shall continue in full force and effect in
accordance with its original terms. 
Reference to this specific Amendment need not be made in the Credit
Agreement, or any other instrument or document executed in connection
therewith, or in any certificate, letter or communication issued or made
pursuant to or with respect to the Credit Agreement, any reference in any of
such items to the Credit Agreement being sufficient to refer to the Credit
Agreement as amended hereby.


 


6.3.          The Borrower agrees to
pay on demand all reasonable costs and expenses of or incurred by the
Administrative Agent in connection with the negotiation, preparation, execution
and delivery of this Amendment and the other instruments and documents
contemplated hereby, including the reasonable fees and expenses of counsel for
the Administrative Agent.


 


6.4.          This Amendment may be
executed in any number of counterparts, and by the different parties on
different counterpart signature pages, all of which taken together shall
constitute one and the same agreement. 
Any of the parties hereto may execute this Amendment by signing any such
counterpart and each of such counterparts shall for all purposes be deemed to
be an original.  This Amendment shall be
governed by the internal laws of the State of New York.


 


[SIGNATURES PAGES TO FOLLOW]


 


4





















 


This Second Amendment to
Credit Agreement is dated as of October 5, 2004.


 


	
   

  	
  LTC PROPERTIES,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  
	
   

  	
   

  	
  Name

  	
  /s/ Andre
  Dimitriadis

  	
   

  
	
   

  	
   

  	
  Title

  	
  Chairman &
  CEO

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name

  	
  /s/ Alex J.
  Chavez

  	
   

  
	
   

  	
   

  	
  Title

  	
  Sr. Vice
  President and Treasurer

  	
   

  
								



 


5





















 


Accepted and
agreed to as of the date and year last above written.


 


	
   

  	
  BANK OF MONTREAL,
  Chicago Branch, in

  its individual capacity as a Lender, as

  L/C Issuer, and as Administrative Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
  Name

  	
  /s/ Thomas A.
  Batterham

  	
   

  
	
   

  	
  Title

  	
  Managing Director

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  KEY BANK NATIONAL
  ASSOCIATION, as

  successor in interest to KEY CORPORATE

  CAPITAL INC., in its individual capacity as a

  Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
  Name

  	
  /s/ Florentina
  Djulvezan

  	
   

  
	
   

  	
  Title

  	
  Vice President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BANK LEUMI USA,
  in its individual capacity as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
  Name

  	
  /s/ Joung Hee
  Hong

  	
   

  
	
   

  	
  Title

  	
  Vice President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Merrill Lynch Capital,
  a Division of Merrill

  Lynch Business Financial Services Inc., in its

  individual capacity as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
  Name

  	
  /s/ Brett
  Robinson

  	
   

  
	
   

  	
  Title

  	
  Vice President

  	
   

  
									



 


6





















 


GUARANTORS’
ACKNOWLEDGMENT


 


The undersigned each
hereby consent to the Second Amendment to Credit Agreement as set forth above
and confirm all of the undersigneds’ obligations thereunder remain in full
force and effect.  The undersigned each
further agree that the consents of the undersigned to any further amendments to
the Credit Agreement shall not be required as a result of this consent having been
obtained.


 


	
  Dated as of October 5, 2004.

  	
   

  
	
   

  	
   

  
	
   

  	
  LTC-WEST, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
  Name

  	
  /s/ Alex J.
  Chavez

  	
   

  
	
   

  	
  Title

  	
  Sr. Vice
  President and Treasurer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
  Name

  	
  /s/ Andre
  Dimitriadis

  	
   

  
	
   

  	
  Title

  	
  Chairman &
  CEO

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  FLORIDA-LTC,
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
  Name

  	
  /s/ Alex J.
  Chavez

  	
   

  
	
   

  	
  Title

  	
  Sr. Vice President
  and Treasurer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
  Name

  	
  /s/ Andre
  Dimitriadis

  	
   

  
	
   

  	
  Title

  	
  Chairman &
  CEO

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  LTC GP I, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
  Name

  	
  /s/ Alex J.
  Chavez

  	
   

  
	
   

  	
  Title

  	
  Sr. Vice
  President and Treasurer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
  Name

  	
  /s/ Andre
  Dimitriadis

  	
   

  
	
   

  	
  Title

  	
  Chairman &
  CEO

  	
   

  
								



 


7





















 


	
   

  	
  LTC GP VI, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
  Name

  	
  /s/ Alex J.
  Chavez

  	
   

  
	
   

  	
  Title

  	
  Sr. Vice
  President and Treasurer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
  Name

  	
  /s/ Andre
  Dimitriadis

  	
   

  
	
   

  	
  Title

  	
  Chairman &
  CEO

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  NORTH
  CAROLINA REAL ESTATE

  INVESTMENTS LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
  Name

  	
  /s/ Alex J.
  Chavez

  	
   

  
	
   

  	
  Title

  	
  Sr. Vice
  President and Treasurer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
  Name

  	
  /s/ Andre
  Dimitriadis

  	
   

  
	
   

  	
  Title

  	
  Chairman &
  CEO

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  EDUCATION PROPERTIES
  INVESTORS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
  Name

  	
  /s/ Alex J.
  Chavez

  	
   

  
	
   

  	
  Title

  	
  Sr. Vice
  President and Treasurer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
  Name

  	
  /s/ Andre
  Dimitriadis

  	
   

  
	
   

  	
  Title

  	
  Chairman &
  CEO

  	
   

  
											



 


8





















 


SCHEDULE
I


 


COMMITMENTS


 


	
  NAME
  OF LENDER

  	
   

  	
  CREDIT COMMITMENT

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Bank of
  Montreal, Chicago Branch

  	
   

  	
  $

  	
  20,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Key Bank
  National Association, as successor in interest to Key Corporate
  Capital Inc.

  	
   

  	
  $

  	
  20,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Merrill Lynch
  Capital, a Division of Merrill Lynch Business Financial Services Inc.

  	
   

  	
  $

  	
  20,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Bank Leumi USA

  	
   

  	
  $

  	
  5,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  TOTAL

  	
   

  	
  $

  	
  65,000,000