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                                                                  EXHIBIT 10.5

                                       
                     AMENDED AND RESTATED PROMISSORY NOTE


$20,000,000.00                                               Date: May 19, 1998
                                 Oxnard, California

     THIS AMENDED AND RESTATED PROMISSORY NOTE (THIS "NOTE") SUPERSEDES AND
REPLACES THAT CERTAIN PROMISSORY NOTE DATED MARCH 30, 1998 MADE BY LTC
HEALTHCARE, INC. (FORMERLY KNOWN AS LTC EQUITY HOLDING COMPANY, INC.), AS MAKER,
IN FAVOR OF LTC PROPERTIES, INC., AS PAYEE, IN THE MAXIMUM PRINCIPAL AMOUNT OF
EIGHT MILLION DOLLARS ($8,000,000.00) (THE "ORIGINAL NOTE").

     In installments as herein stated, for value received, LTC HEALTHCARE, INC.,
a Nevada corporation (formerly known as LTC Equity Holding Company, Inc.)
("Maker"), hereby promises to pay to the order of LTC PROPERTIES, INC., a
Maryland corporation ("Payee"), at Payee's principal place of business in
Oxnard, California, or such other place as Payee may from time to time
designate, the principal sum of Twenty Million Dollars ($20,000,000.00), or so
much thereof as may have been advanced, with interest accruing on the principal
amount from time to time outstanding from the date hereof to and including the
Maturity Date (as defined below) at a rate equal to the lesser of (i) Ten
Percent (10%) per annum, or (ii) the Highest Lawful Rate (defined in Section 11,
below).  Principal and interest shall be payable as more particularly set forth
below.  All principal and accrued but unpaid interest shall be due on or before
April 1, 2008 (the "Maturity Date").  Principal, interest and all other sums due
hereunder shall be payable in lawful money of the United States.

     Maker desires to obtain an unsecured line of credit from Payee to enable
Maker to borrow, from time to time, sums up to, but not exceeding, in the
aggregate the principal sum of Twenty Million Dollars ($20,000,000.00). 
Accordingly, this Note represents funds that will be advanced to Maker in a
series of disbursements that will be made, from time to time, up to, but not
exceeding, in the aggregate the principal amount of Twenty Million Dollars
($20,000,000.00).  As a condition to Payee's obligation to make each and every
disbursement hereunder, Payee shall receive a request for advance setting forth
the desired amount of the advance and specifying the wiring instructions to
which the advance should be sent (or other method of delivery) not later than
two (2) business days prior to the date on which Maker wishes to receive the
funds.  No request for any such advance shall be for an amount less than One
Hundred Thousand Dollars ($100,000.00).  

     1.   PAYMENTS.   

          (a)  PAYMENTS OF INTEREST.  Payments of interest only under this Note
shall be made in arrears in bi-annual installments, without set-off, deduction,
demand or notice of any kind or nature whatsoever, on the 1st day of April and
the 1st day of October of each and every calendar year (each a "Payment Date")
in an amount equal to the accrued but unpaid interest for

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the immediately preceding six-month period on the principal amount 
outstanding from time to time.  Notwithstanding the foregoing, Maker 
acknowledges and agrees that Maker shall pay to Payee on the first (1st) 
Payment Date (I.E., October 1, 1998) the accrued but unpaid interest on 
advances made from and including March 30, 1998 to and including September 
30, 1998, including, but not limited to, accrued but unpaid interest on 
advances made under the Original Note.

          (b)  PAYMENTS ON MATURITY DATE.  Assuming no acceleration by Payee and
no prepayment in full of the Loan by Maker, on the Maturity Date, Maker shall
pay to Payee the entire outstanding principal balance, accrued and unpaid
interest and any and all other outstanding charges, fees or amounts owing to
Payee by Maker under this Note.  Maker acknowledges and agrees that the
outstanding principal balance under this Note includes, without limitation, the
principal sum of Four Million Nine Hundred Thirty-Nine Thousand Dollars
($4,939,000.00) advanced by Payee to Maker between March 30, 1998 and May 18,
1998 under the Original Note.

     2.   PREPAYMENTS.   Maker shall have the right to prepay all or any part of
the principal balance of this Note at any time without premium, penalty, or
charge of any kind whatsoever; provided, however, there shall be no discount of
any kind for any prepayment.

     3.   LATE PAYMENT CHARGE; NO WAIVER.   MAKER ACKNOWLEDGES THAT LATE PAYMENT
TO PAYEE OF ANY SUMS DUE HEREUNDER WILL CAUSE PAYEE TO INCUR COSTS NOT
CONTEMPLATED HEREUNDER, THE EXACT AMOUNT OF WHICH WILL BE IMPRACTICABLE OR
EXTREMELY DIFFICULT TO ASCERTAIN.  SUCH COSTS INCLUDE, BUT ARE NOT LIMITED TO,
PROCESSING AND ACCOUNTING CHARGES.  ACCORDINGLY, IF ANY INSTALLMENT IS NOT
RECEIVED BY PAYEE WHEN DUE, OR IF ANY REMAINING PRINCIPAL AND ACCRUED BUT UNPAID
INTEREST OWING UNDER THIS NOTE IS NOT PAID IN FULL ON THE MATURITY DATE, MAKER
SHALL THEN PAY TO PAYEE AN ADDITIONAL SUM OF FIVE PERCENT (5%) OF THE OVERDUE
AMOUNT AS A LATE CHARGE.  THE PARTIES HEREBY AGREE THAT LATE CHARGE REPRESENTS A
FAIR AND REASONABLE ESTIMATE OF THE COSTS PAYEE WILL INCUR BY REASON OF LATE
PAYMENT.  THIS PROVISION SHALL NOT, HOWEVER, BE CONSTRUED AS EXTENDING THE TIME
FOR PAYMENT OF ANY AMOUNT HEREUNDER, AND ACCEPTANCE OF SUCH LATE CHARGE BY PAYEE
SHALL IN NO EVENT CONSTITUTE A WAIVER OF MAKER'S DEFAULT WITH RESPECT TO SUCH
OVERDUE AMOUNT NOR PREVENT PAYEE FROM EXERCISING ANY OF ITS OTHER RIGHTS AND
REMEDIES WITH RESPECT TO SUCH DEFAULT.

     INITIAL:  JJP
             -------
              MAKER

     4.   DEFAULT.  The occurrence of any of the following shall constitute an
event of default ("Event of Default") under this Note:

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               (a)  failure to make any payment of principal, interest, or any
other sums due hereunder within five (5) business days of the date due;

               (b)  the occurrence of any breach or default of any other
obligation of Maker, monetary or otherwise, hereunder, which breach or default
shall continue for more than sixty (60) calendar days after Maker has received
written notice thereof from Payee.

     5.   ACCELERATION RIGHTS.   Upon the occurrence of an Event of Default
hereunder, Payee may, in its sole discretion, declare the entire balance of
principal and interest hereon immediately due and payable, together with all
costs of collection, including reasonable attorneys' fees and all other costs
and expenses incurred.

     6.   ATTORNEYS' FEES AND COSTS.     In the event it becomes necessary for
Payee to utilize legal counsel for the enforcement of this Note or any of its
terms, if Payee is successful in such enforcement by legal proceedings or
otherwise, Payee shall be reimbursed immediately by Maker for all reasonable
attorneys' fees and other costs and expenses.

     7.   WAIVERS.   Maker of this Note hereby waives diligence, demand,
presentment for payment, exhibition of this Note, notice of non-payment or
dishonor, protest and notice of protest, notice of demand, notice of election of
any right of holder hereof, any and all exemption rights against this
indebtedness, and expressly agrees that, at Payee's election, the time for
performance of any obligation under this Note may be extended from time to time,
without notice and that no such extension, renewal, or partial release shall
release Maker from its obligation of payment of this Note or any installment
hereof, and consents to offset of any sums owed to Maker by the holder hereof at
any time.

     8.   ASSIGNMENT/TRANSFER BY PAYEE.   Payee, in Payee's sole and absolute
discretion, and without notice to Maker, shall have the absolute right to sell,
assign, gift, transfer, convey, encumber or otherwise dispose of all or a
portion of the holder's rights in this Note or any other agreement related
thereto.  Maker may not assign, gift, transfer, convey, encumber or otherwise
dispose of all or a portion of its rights, nor delegate its duties or
obligations under this Note or any other agreement related thereto.

     9.   GOVERNING LAW.   This Note shall in all respects be interpreted,
enforced, and governed by and under the internal laws of the State of California
without resort to choice of law principles.

     10.  SEVERABILITY.   Every provision hereof is intended to be several.  If
any provision of this Note is determined by a court of competent jurisdiction to
be illegal, invalid or unenforceable, such illegality, invalidity or
unenforceability shall not affect the other provisions hereof, which shall
remain binding and enforceable.

     11.  COMPLIANCE WITH USURY LAWS.   It is the intention of the parties
hereto to conform strictly to applicable usury laws regarding the use,
forbearance or detention of the

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indebtedness evidenced by this Note, whether such laws are now or hereafter 
in effect, including the laws of the United States of America or any other 
jurisdiction whose laws are applicable, and including subsequent revisions to 
or judicial interpretations of those laws, in each case to the extent they 
are applicable to this Note (the "Applicable Usury Laws"); provided, however, 
if such laws shall hereafter permit higher rates of interest, then the 
Applicable Usury Laws shall be the laws allowing the higher rate of interest. 
 Accordingly, the following shall apply:

          (a)  if any acceleration of the Maturity Date of this Note or any
payment by Maker or any other person or entity results in the amount of interest
contracted for, charged, taken, reserved, received by or paid by Maker or such
other person or entity on the principal amount outstanding, from time to time,
on the Note being deemed to have been in excess of the Maximum Amount, as
hereinafter defined, or if any transaction contemplated hereby would otherwise
be usurious under any Applicable Usury Laws, then, in that event,
notwithstanding anything to the contrary in this Note, it is agreed as follows: 
(i) the provisions of this Section 11 shall govern and control; (ii) the
aggregate of all interest under Applicable Usury Laws that is contracted for,
charged, taken, reserved or received under this Note, or under any of the other
aforesaid agreements or instruments or otherwise shall under no circumstances
exceed the Maximum Amount, and any excess shall either be refunded to Maker or
applied in reduction of principal, if permitted by California law, in the sole
discretion of Payee; (iii) neither Maker nor any other person or entity shall
obligated to pay the amount of such interest to the extent it is in excess of
the Maximum Amount; (iv) any interest contracted for, charged, reserved, taken
or received in excess of the Maximum Amount shall be deemed an accidental or
bona fide error and canceled automatically to the extent of such excess; and (v)
the effective rate of interest on the Loan shall be IPSO FACTO reduced to the
Highest Lawful Rate (defined below), and the provision of this Note shall be
deemed reformed, without the necessity of the execution of any new document, so
as to comply with all Applicable Usury Laws.  All sums paid, or agreed to be
paid, to Payee for the use, forbearance, or the detention of the indebtedness of
Maker to Payee evidenced by this Note shall, to the fullest extent permitted by
the Applicable Usury Laws, be amortized, pro-rated, allocated and spread
throughout the full term of the indebtedness evidenced by this Note so that the
actual rate of interest does not exceed the Highest Lawful Rate in effect at any
particular time during the full term thereof.  As used herein, the term "Maximum
Amount" means the maximum non-usurious amount of interest which may be lawfully
contracted for, charged, reserved, taken or received by Payee in connection with
the indebtedness evidenced by this Note under all applicable Usury Laws.

          (b)  If at any time interest on the Loan, together with any fees 
and additional amounts payable hereunder or under any other agreements or 
instruments that are deemed to constitute interest under Applicable Usury 
Laws (the "Additional Interest"), exceeds the Highest Lawful Rate, then the 
amount of interest to accrue pursuant to this Note shall be limited, 
notwithstanding anything to the contrary in this Note, or any other agreement 
or instrument, to the amount of interest that would accrue at the Highest 
Lawful Rate; provided, however, that to the fullest extent permitted by 
Applicable Usury Laws, any subsequent reductions in the interest rate shall 
not reduce the interest to accrue pursuant to this Note below the Highest 
Lawful Rate until the aggregate amount of interest actually accrued pursuant 
to this Note, together with all Additional Interest, equals the amount of 
interest which would have accrued if the Highest

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Lawful Rate had at all times been in effect and such Additional Interest, if 
any, had been paid in full.

     For purposes of this Note, the term "Highest Lawful Rate" means the 
maximum rate of interest and other charges (if any such maximum exists) for 
the forbearance of the payment of monies, if any that may be charged, 
contracted for, reserved, taken or received under all Applicable Usury Laws 
on the principal balance of this Note from time to time outstanding.
     
     IN WITNESS WHEREOF, the Maker has caused this Note to be executed as of 
the date first above written.

                              MAKER: 

                              LTC HEALTHCARE, INC.,
                              A NEVADA CORPORATION


                              By:   /s/ James J. Pieczynski
                                    -------------------------------------
                              Name: JAMES J. PIECZYNSKI
                                    -------------------------------------
                              Its:  President and Chief Financial Officer
                                    -------------------------------------
 


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