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                                                                    Exhibit 10.3

                              EMPLOYMENT AGREEMENT

This Employment Agreement (the "Agreement") is made and entered into effective
as of June 25, 2001 by and between Brian C. Klene (the "Employee") and Cymer,
Inc., a Nevada corporation (the "Company").

                                 R E C I T A L S

A.       The Company may from time to time need to address the possibility of an
acquisition transaction or change of control event. The Board of Directors of
the Company (the "Board") recognizes that such events can be a distraction to
the Employee and can cause the Employee to consider alternative employment
opportunities. The Board has determined that it is in the best interests of the
Company and its stockholders to assure that the Company will have the continued
dedication and objectivity of the Employee, notwithstanding the possibility,
threat or occurrence of a Change of Control (as defined below) of the Company,
although no such Change is now contemplated.

B.       The Board believes that it is in the best interests of the Company and
its stockholders to provide the Employee with an incentive to continue his
employment and to motivate the Employee to maximize the value of the Company
upon a Change of Control for the benefit of its stockholders.

C.       The Board believes that it is imperative to provide the Employee with
certain benefits upon a Change of Control and, under certain circumstances, upon
termination of the Employee's employment in connection with a Change of Control,
which benefits are intended to provide the Employee with financial security and
provide sufficient incentive and encouragement to the Employee to remain with
the Company notwithstanding the possibility of a Change of Control.

D.       To accomplish the foregoing objectives, the Board has directed the
Company, upon execution of this Agreement by the Employee, to agree to the terms
provided herein.

E.       Certain capitalized terms used in this Agreement are defined in Section
7 below.

                                A G R E E M E N T

In consideration of the mutual covenants herein contained, and in consideration
of the continuing employment of the Employee by the Company, the parties agree
as follows:

1.       DUTIES AND SCOPE OF EMPLOYMENT. The Company shall employ the Employee
in the position of Senior Vice President, Marketing, as such position has been
defined in terms of responsibilities and compensation as of the effective date
of this Agreement; provided, however, that the Board shall have the right, at
any time prior to the occurrence of a Change of Control, to revise such
responsibilities and compensation as the Board in its discretion may deem
necessary or appropriate. The Employee shall comply with and be bound by the
Company's operating policies, procedures and practices from time to time in
effect during his employment. During the term of the Employee's employment with
the Company, the Employee shall continue to devote his full time, skill and
attention to his duties and responsibilities, and shall perform them faithfully,
diligently and competently, and the Employee shall use his best efforts to
further the business of the Company and its affiliated entities.

2.       BASE COMPENSATION. The Company shall pay the Employee as compensation
for his services a base salary at the annualized rate of $225,750.46. Such
salary shall be paid periodically in accordance with normal Company payroll
practices. The Board or the Compensation Committee of the Board shall review the
base salary of the Employee according to normal Company practice, but no less
frequently than annually, and may in its discretion increase but not decrease
the base salary below the amount specified in this agreement.

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3.       ANNUAL INCENTIVE. Beginning with the Company's current fiscal year and
for each fiscal year thereafter during the term of this Agreement, the Employee
shall be eligible to receive an annual bonus under the Company's annual
incentive plan (the "Annual Incentive") based upon performance targets approved
by the Compensation Committee of the Board (the "Target Incentive"). The Annual
Incentive payable hereunder shall be payable in accordance with the Company's
normal practices and policies.

4.       EMPLOYEE BENEFITS. The Employee shall be eligible to participate in the
employee benefit plans and executive compensation programs maintained by the
Company applicable to other key executives of the Company, including (without
limitation) retirement plans, savings or profit-sharing plans, stock option,
incentive or other bonus plans, life, disability, health, accident and other
insurance programs, paid vacations, and similar plans or programs, subject in
each case to the generally applicable terms and conditions of the applicable
plan or program in question and to the sole determination of the Board or any
committee administering such plan or program.

5.       EMPLOYMENT RELATIONSHIP. The Company and the Employee acknowledge that
the Employee's employment is and shall continue to be at-will, as defined under
applicable law. If the Employee's employment terminates for any reason, the
Employee shall not be entitled to any payments, benefits, damages, awards or
compensation other than as provided by this Agreement, or as may otherwise be
available in accordance with the Company's established employee plans and
policies at the time of termination.

6.       TERMINATION BENEFITS. Subject to Sections 8 and 9 below, in the event
the Employee's employment terminates as a result of an Involuntary Termination
other than for Cause upon or within 18 months after a Change of Control, then
the Employee shall be entitled to receive severance and other benefits as
follows:

         (a)      PAY CONTINUATION. The Employee shall be entitled to monthly
         payments equal to the Employee's monthly Base Compensation as in effect
         immediately prior to the Change of Control plus one-twelfth (1/12) of
         the average of the annual bonus amount paid to the Employee with
         respect to the three previous calendar years. Such monthly amounts
         shall be paid according to the normal payroll practice of the Company
         for twelve (12) months following the date of termination (the
         "Termination Period").

         (b)      ANNUAL INCENTIVE. The Employee shall be entitled to receive a
         percentage of the Employee's Target Incentive for the calendar year in
         which such termination occurs. Such percentage shall equal a fraction,
         the numerator of which shall be the number of days in such calendar
         year up to and including the date of such termination and the
         denominator of which shall be the number of days in such calendar year.
         Such amount shall be payable according to the normal practice of the
         Company with respect to the payment of bonuses.

         (c)      OPTIONS. The unvested portion of any stock option(s) held by
         the Employee under the Company's stock option plans shall vest and
         become exercisable in full upon the date of such termination. Such
         vested options may be exercised throughout the Termination Period and
         until specified in the applicable Option Plan.

         (d)      MEDICAL BENEFITS. The Company shall reimburse the Employee for
         the cost of the Employee's group health, vision and dental plan
         coverage in effect until the end of the Termination Period. The
         Employee may use this payment, as well as any other payment made under
         this Section 6, for such continuation coverage or for any other
         purpose. To the extent the Employee pays the cost of such coverage, and
         the cost of such coverage is not deductible as a medical expense by the
         Employee, the Company shall "gross-up" the amount of such reimbursement
         for all taxes payable by the Employee on the amount of such
         reimbursement and the amount of such gross-up.

7.       DEFINITION OF TERMS. The following terms referred to in this Agreement
shall have the following meanings:

         (a)      CAUSE. "Cause" shall mean (i) any act of personal dishonesty
         taken by the Employee in connection with his responsibilities as an
         employee and intended to result in substantial personal enrichment

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         of the Employee, (ii) conviction of a felony that is injurious to the
         Company, (iii) a willful act by the Employee which constitutes gross
         misconduct and which is injurious to the Company, and (iv) continued
         violations by the Employee of the Employee's obligations under Section
         1 of this Agreement that are demonstrably willful and deliberate on the
         Employee's part after there has been delivered to the Employee a
         written demand for performance from the Company which describes the
         basis for the Company's belief that the Employee has not substantially
         performed his duties.

         (b)      CHANGE OF CONTROL. "Change of Control" shall mean the
         occurrence of any of the following events:

                  (i)      The acquisition by any "person" (as such term is used
                  in Sections 13(d) and 14(d) of the Exchange Act) (other than
                  the Company or a person that directly or indirectly controls,
                  is controlled by, or is under common control with, the
                  Company) of the "beneficial ownership" (as defined in Rule
                  13d-3 under said Act), directly or indirectly, of securities
                  of the Company representing fifty percent (50%) or more of the
                  total voting power represented by the Company's then
                  outstanding voting securities; or

                  (ii)     A change in the composition of the Board of Directors
                  of the Company occurring within a two-year period, as a result
                  of which fewer than a majority of the directors are Incumbent
                  Directors. "Incumbent Directors" shall mean directors who
                  either (A) are directors of the Company as of the date hereof,
                  or (B) are elected, or nominated for election, to the Board of
                  Directors of the Company with the affirmative votes of at
                  least a majority of the Incumbent Directors at the time of
                  such election or nomination (but shall not include an
                  individual not otherwise an Incumbent Director whose election
                  or nomination is in connection with an actual or threatened
                  proxy contest relating to the election of directors to the
                  Company); or

                  (iii)    A merger or consolidation of the Company with any
                  other corporation, other than a merger or consolidation which
                  would result in the voting securities of the Company
                  outstanding immediately prior thereto continuing to represent
                  (either by remaining outstanding or by being converted into
                  voting securities of the surviving entity) at least fifty
                  percent (50%) of the total voting power represented by the
                  voting securities of the Company or such surviving entity
                  outstanding immediately after such merger or consolidation, or
                  the approval by the stockholders of the Company of a plan of
                  complete liquidation of the Company or of an agreement for the
                  sale or disposition by the Company of all or substantially all
                  the Company's assets.

         (c)      DISABILITY. "Disability" shall mean that the Employee has been
         unable to substantially perform his duties under this Agreement as the
         result of his incapacity due to physical or mental illness, and such
         inability, at least 26 weeks after its commencement, is determined to
         be total and permanent by a physician selected by the Company or its
         insurers and acceptable to the Employee or the Employee's legal
         representative (such agreement as to acceptability not to be
         unreasonably withheld).

         (d)      EXCHANGE ACT. "Exchange Act" shall mean the Securities
         Exchange Act of 1934, as amended.

         (e)      INVOLUNTARY TERMINATION. "Involuntary Termination" shall mean
         (i) without the Employee's express written consent, the significant
         reduction of the Employee's duties or responsibilities relative to the
         Employee's duties or responsibilities in effect immediately prior to
         such reduction; provided, however, that a reduction in duties or
         responsibilities solely by virtue of the Company being acquired and
         made part of a larger entity (as, for example, when the Chief Financial
         Officer of Company remains as such following a Change of Control and is
         not made the Chief Financial Officer of the acquiring corporation)
         shall not constitute an "Involuntary Termination"; (ii) without the
         Employee's express written consent, a substantial reduction, without
         good business reasons, of the facilities and perquisites (including
         office space and location) available to the Employee immediately prior
         to such reduction; (iii) without the Employee's express written
         consent, a material reduction by the Company in the Base Compensation
         or Target Incentive of the Employee as in effect immediately prior to
         such reduction, or the ineligibility of the Employee to continue to
         participate in any long-term incentive plan of the Company; (iv) a
         material reduction by the

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         Company in the kind or level of employee benefits to which the Employee
         is entitled immediately prior to such reduction with the result that
         the Employee's overall benefits package is significantly reduced; (v)
         the relocation of the Employee to a facility or a location more than 50
         miles from the Employee's then present location, without the Employee's
         express written consent; (vi) any purported termination of the Employee
         by the Company which is not effected for death or Disability or for
         Cause, or any purported termination for which the grounds relied upon
         are not valid; or (vii) the failure of the Company to obtain the
         assumption of this agreement by any successors contemplated in Section
         10 below.

8.       LIMITATION ON PAYMENTS.

         (a)      In the event that the severance and other benefits provided
         for in this Agreement or otherwise payable to the Employee (i)
         constitute "parachute payments" within the meaning of Section 280G of
         the Internal Revenue Code of 1986, as amended (the "Code") and (ii) but
         for this Section 8 would be subject to the excise tax imposed by
         Section 4999 of the Code, then the Employee's severance benefits under
         Section 6 shall be payable either (i) in full, or (ii) as to such
         lesser amount which would result in no portion of such severance
         benefits being subject to excise tax under Section 4999 of the Code,
         whichever of the foregoing amounts, taking into account the applicable
         federal, state and local income taxes and the excise tax imposed by
         Section 4999, results in the receipt by the Employee on an after-tax
         basis, of the greatest amount of severance benefits under this
         Agreement, notwithstanding that all or some portion of such severance
         benefits may be taxable under Section 4999 of the Code.

         (b)      If a reduction in the payments and benefits that would
         otherwise be paid or provided to the Employee under the terms of this
         Agreement is necessary to comply with the provisions of Section 8(a),
         the Employee shall be entitled to select which payments or benefits
         will be reduced and the manner and method of any such reduction of such
         payments or benefits (including but not limited to the number of
         options that would vest under Section 6(b) subject to reasonable
         limitations (including, for example, express provisions under the
         Company's benefit plans) (so long as the requirements of Section 8(a)
         are met). Within thirty (30) days after the amount of any required
         reduction in payments and benefits is finally determined in accordance
         with the provisions of Section 8(c), the Employee shall notify the
         Company in writing regarding which payments or benefits are to be
         reduced. If no notification is given by the Employee, the Company will
         determine which amounts to reduce. If, as a result of any reduction
         required by Section 8(a), amounts previously paid to the Employee
         exceed the amount to which the Employee is entitled, the Employee will
         promptly return the excess amount to the Company.

         (c)      Unless the Company and the Employee otherwise agree in
         writing, any determination required under this Section 8 shall be made
         in writing by the Company's independent public accountants (the
         "Accountants"), whose determination shall be conclusive and binding
         upon the Employee and the Company for all purposes. For purposes of
         making the calculations required by this Section 8, the Accountants may
         make reasonable assumptions and approximations concerning applicable
         taxes and may rely on reasonable, good faith interpretations concerning
         the application of Sections 280G and 4999 of the Code. The Company and
         the Employee shall furnish to the Accountants such information and
         documents as the Accountants may reasonably request in order to make a
         determination under this Section. The Company shall bear all costs the
         Accountants may reasonably incur in connection with any calculations
         contemplated by this Section 8.

9.       CERTAIN BUSINESS COMBINATIONS. In the event it is determined by the
Board, upon receipt of a written opinion of the Company's independent public
accountants, that the enforcement of any Section or subsection of this
Agreement, including, but not limited to, Section 6(b) hereof, which allows for
the acceleration of vesting of options to purchase shares of the Company's
common stock upon a termination in connection with a Change of Control, would
preclude accounting for any proposed business combination of the Company
involving a Change of Control as a pooling of interests, and the Board otherwise
desires to approve such a proposed business transaction which requires as a
condition to the closing of such transaction that it be accounted for as a
pooling of interests, then any such Section of this Agreement shall be null and
void, but only if the absence of enforcement of such Section would preserve the
pooling treatment. For purposes of this Section 9, the Board's determination
shall require the unanimous approval of the disinterested Board members.

10.      SUCCESSORS.

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         (a)      COMPANY'S SUCCESSORS. Any successor to the Company (whether
         direct or indirect and whether by purchase, lease, merger,
         consolidation, liquidation or otherwise) to all or substantially all of
         the Company's business and assets shall assume the obligations under
         this Agreement and agree expressly to perform the obligations under
         this Agreement in the same manner and to the same extent as the Company
         would be required to perform such obligations in the absence of a
         succession. For all purposes under this Agreement, the term "Company"
         shall include any successor to the Company's business and assets which
         executes and delivers the assumption agreement described in this
         Section 10(a) or which becomes bound by the terms of this Agreement by
         operation of law.

         (b)      EMPLOYEE'S SUCCESSORS. The terms of this Agreement and all
         rights of the Employee hereunder shall inure to the benefit of, and be
         enforceable by, the Employee's personal or legal representatives,
         executors, administrators, successors, heirs, devisees and legatees.

11.      NOTICE. Notices and all other communications contemplated by this
Agreement shall be in writing and shall be deemed to have been duly given when
personally delivered or when mailed by U.S. registered or certified mail, return
receipt requested and postage prepaid. In the case of the Employee, mailed
notices shall be addressed to him at the home address which he most recently
communicated to the Company in writing. In the case of the Company, mailed
notices shall be addressed to its corporate headquarters, and all notices shall
be directed to the attention of its Secretary.

12.      MISCELLANEOUS PROVISIONS.

         (a)      WAIVER. No provision of this Agreement shall be modified,
         waived or discharged unless the modification, waiver or discharge is
         agreed to in writing and signed by the Employee and by an authorized
         officer of the Company (other than the Employee). No waiver by either
         party of any breach of, or of compliance with, any condition or
         provision of this Agreement by the other party shall be considered a
         waiver of any other condition or provision or of the same condition or
         provision at another time.

         (b)      WHOLE AGREEMENT. No agreements, representations or
         understandings (whether oral or written and whether express or implied)
         which are not expressly set forth in this Agreement have been made or
         entered into by either party with respect to the subject matter hereof.

         (c)      CHOICE OF LAW. The validity, interpretation, construction and
         performance of this Agreement shall be governed by the laws of the
         State of California.

         (d)      SEVERABILITY. The invalidity or unenforceability of any
         provision or provisions of this Agreement shall not affect the validity
         or enforceability of any other provision hereof, which shall remain in
         full force and effect.

         (e)      ARBITRATION. Any dispute or controversy arising out of,
         relating to or in connection with this Agreement shall be settled
         exclusively by binding arbitration in San Diego, California, in
         accordance with the National Rules for the Resolution of Employment
         Disputes of the American Arbitration Association then in effect.
         Judgment may be entered on the arbitrator's award in any court having
         jurisdiction. The Company and the Employee shall each pay one-half of
         the costs and expenses of such arbitration, and each shall separately
         pay its counsel fees and expenses. Punitive damages shall not be
         awarded.

         (f)      NO ASSIGNMENT OF BENEFITS. The rights of any person to
         payments or benefits under this Agreement shall not be made subject to
         option or assignment, either by voluntary or involuntary assignment or
         by operation of law, including (without limitation) bankruptcy,
         garnishment, attachment or other creditor's process, and any action in
         violation of this Section 12(g) shall be void.

         (g)      ASSIGNMENT BY COMPANY. The Company may assign its rights under
         this Agreement to an affiliate, and an affiliate may assign its rights
         under this Agreement to another affiliate of the Company or to

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         the Company; provided, however, that no assignment shall be made if the
         net worth of the assignee is less than the net worth of the Company at
         the time of assignment. In the case of any such assignment, the term
         "Company" when used in a section of this Agreement shall mean the
         corporation that actually employs the Employee.

         (h)      COUNTERPARTS. This Agreement may be executed in counterparts,
         each of which shall be deemed an original, but all of which together
         will constitute one and the same instrument.

IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case
of the Company by its duly authorized officer, as of the day and year first
above written.

COMPANY:                            CYMER, INC.

                                    By:    Pascal Didier

                                    Title: President and Chief Operating Officer

                                    /s/ Pascal Didier
                                    --------------------------------------------

EMPLOYEE:                           /s/ Brian C. Klene
                                    --------------------------------------------
                                                     Brian C. Klene

                                     Page 6Prepared by MERRILL CORPORATION

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EXHIBIT 10.1    
  

 
 

SECOND AMENDMENT
  TO
  REVOLVING CREDIT AGREEMENT    
  

    This Amendment, dated as of May 29, 2001, is entered into by (1) LTC PROPERTIES, INC., a Maryland corporation (the
"Borrower"), (2) the financial institutions listed on the signature pages hereof (the "Lenders"),
(3) SANWA BANK CALIFORNIA, as administrative agent (the "Administrative Agent") for the Lenders, (4) BANK OF MONTREAL, as syndication
agent (the "Syndication Agent"), and (5) BNP PARIBAS, as documentation agent (the "Documentation
Agent"). 

Recitals  

    A.  The
Borrower, the Lenders, the Administrative Agent, the Syndication Agent and the Documentation Agent are parties to a Revolving Credit Agreement dated as of
October 31, 2000, as amended by a First Amendment to Revolving Credit Agreement dated as of March 23, 2001 (said Revolving Credit Agreement, as so amended, herein called the
"Credit Agreement"). Terms defined in the Credit Agreement and not otherwise defined herein have the same respective meanings when used herein, and the
rules of interpretation set forth in Sections 1.2 and 1.3 of the Credit Agreement are incorporated herein by reference. 

    B.  The
Borrower and the Lenders wish to amend the Credit Agreement to change the definition of "Applicable Value" and certain related provisions. Accordingly, the
Borrower and the Lenders hereby agree as set forth below. 

    SECTION
1.  Amendments to Credit Agreement.  Subject to the terms and conditions of this Amendment, the
Borrower and the Lenders hereby agree that the Credit Agreement is amended as set forth below. 

    (a) The
definition of "Applicable Value" in Section 1.1 of the Credit Agreement is amended in full to read as follows: 

    "'Applicable Value' means, with respect to the Borrower and its Subsidiaries as of any date of determination, by reference to the most
recent annual or quarterly balance sheet delivered by the Borrower to the Lenders (but subject to any subsequent impairment charges), (a) for any Owned Property, the lesser of (i) the
Book Value thereof, net of depreciation applied on a pro rata basis, and (ii) the appraised value thereof determined pursuant to the most recent
Appraisal (if any) obtained with respect thereto, in either case net of any impairment charges, (b) for any Mortgage Loan, the unpaid principal balance thereof, net of any impairment charges,
and (c) for any REMIC Certificate, the book value thereof determined in accordance with GAAP." 

    (b) Clause (c)
of the definition of "Eligible Owned Property" in Section 1.1 of the Credit Agreement is amended in full to read as follows: 

    "(c)
an Owned Property subject to a lease under which any lease payment is 30 or more days past-due; provided, however,
that an Owned Property (i) whose Operator is the subject of a bankruptcy proceeding or is otherwise insolvent and (ii) that is not ineligible for inclusion in the Borrowing Base pursuant
to clause (f) below shall not be ineligible for inclusion in the Borrowing Base pursuant to this clause (c);." 

    (c) Clause (f)
of the definition of "Eligible Owned Property" in Section 1.1 of the Credit Agreement is amended in full to read as follows: 

    "(f)
an Owned Property (i) whose Operator is the subject of a bankruptcy proceeding or is otherwise insolvent and (ii) if any such bankruptcy proceeding is pursuant to
Chapter 11 of the United States Bankruptcy Code, that is subject to (A) a lease that has been rejected in such bankruptcy proceeding or (B) a lease under which any lease payment
is past-due by more than the 

 

sum of (1) 60 days after the initiation of such bankruptcy proceeding plus (2) the number of days, if any (but not to exceed 29), by which such lease payment was
past-due before the initiation of such bankruptcy proceeding;." 

    (d) Section 5.1(a)(i) of
the Credit Agreement is amended in full to read as follows: 

    "(i)
as soon as possible and in any event within 25 days after the end of each calendar month, a certificate duly executed by an Authorized Officer stating that (A) the
number and identity of the Eligible Mortgage Loans and Eligible Owned Properties of the Borrower and its Subsidiaries and (B) the aggregate impairment charges in respect of Eligible Mortgage
Loans and the aggregate impairment charges in respect of Eligible Owned Properties, in each case as specified in the Borrowing Base Certificate most recently delivered to the Lenders, have not changed
or, if there has been any such change, setting forth the details thereof;." 

    (e) Annex
1 to the form of Borrowing Base Certificate attached to the Credit Agreement as Exhibit D is amended in full to be in the form attached hereto as
Annex 1. 

    SECTION
2.  Conditions to Effectiveness.  This Amendment shall become effective as of the date first set
forth above when and if the Administrative Agent receives a fee of $100,000, for the ratable account of the Lenders, and the following documents, each dated the date hereof, otherwise in form and
substance satisfactory to the Administrative Agent and in the number of originals requested by the Administrative Agent: 

    (a) this
Amendment, duly executed by the Borrower and the Lenders; 

    (b) consents
to this Amendment, duly executed by the Guarantors; and 

    (c) such
other approvals, opinions, evidence and documents as any Lender through the Administrative Agent may reasonably request. 

    SECTION
3.  Representations and Warranties of Borrower.  The Borrower represents and warrants to the
Lenders and the Administrative Agent as set forth below. 

    (a) The
execution, delivery and performance by the Borrower of this Amendment and the Credit Documents, as amended hereby, to which the Borrower is a party are within
the Borrower's corporate powers, have been duly authorized by all necessary corporate action and do not (i) contravene the Borrower's charter documents or bylaws, (ii) contravene any
Governmental Rule or contractual restriction binding on or affecting the Borrower or (iii) result in or require the creation or imposition of any Lien (other than any created by the Credit
Documents) upon or with respect to any of the properties now owned or hereafter acquired by the Borrower. 

    (b) No
Governmental Action is required for the due execution, delivery or performance by the Borrower of this Amendment or any of the Credit Documents, as amended
hereby, to which the Borrower is or is to be a party. 

    (c) This
Amendment and each of the other Credit Documents, as amended hereby, to which the Borrower is a party constitute legal, valid and binding obligations of the
Borrower, enforceable against the Borrower in accordance with their respective terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, moratorium, reorganization or other
similar laws affecting creditors' rights generally. 

    (d) The
Collateral Documents constitute valid Liens on the Collateral purported to be covered thereby and secure the payment of all obligations purported to be secured
thereby; and the execution, delivery and performance of this Amendment do not adversely affect the Liens of the Collateral Documents. 

–2–

 

    (e) The financial information as of December 31, 2000 and for the fiscal year then ended that was delivered by the Borrower to the Lenders pursuant to
Section 5.1(a)(iv) of the Credit Agreement fairly presents the financial condition of the Borrower and the relevant Subsidiaries as of such date and the results of the operations of the
Borrower and such Subsidiaries for the fiscal year ended on such date, all in accordance with GAAP applied on a consistent basis. Except as disclosed in the Borrower's report on
Form 10-K for its fiscal year ended on December 31, 2000, since that date no event or situation has occurred that could reasonably be expected to have a Material Adverse
Effect. The Borrower and its Subsidiaries have no material contingent liabilities except as disclosed in the aforementioned financial information. 

    (f)  The
representations and warranties contained in the Credit Documents are correct on and as of the date hereof as though made on and as of such date (other than any
such representations or warranties that, by their terms, refer to a specific date, in which case as of such specific date). No event has occurred and is continuing, or would result from the
effectiveness of this Amendment, that constitutes a Default. 

    SECTION
4.  Reference to and Effect on Credit Documents.  

    (a) On
and after the effective date of this Amendment, each reference in the Credit Agreement to "this Agreement," "hereunder," "hereof," "herein" or any other
expression of like import referring to the Credit Agreement, and each reference in the other Credit Documents to "the Credit Agreement," "thereunder," "thereof," "therein" or any other expression of
like import referring to the Credit Agreement, shall mean and be a reference to the Credit Agreement as amended by this Amendment. 

    (b) Except
as specifically amended above, the Credit Agreement and the other Credit Documents shall remain in full force and effect and are hereby ratified and
confirmed; provided, however, that the Borrower hereby ratifies and confirms the Release of Claims with respect to all "Released Matters" (as defined in
the Release of Claims) as if that term had been defined to cover the period from the beginning of time through and including the date of this Amendment. Without limiting the generality of the
foregoing, the Collateral Documents and all of the Collateral described therein do and shall continue to secure the payment of all obligations stated to be secured thereby under the Credit Documents,
as amended hereby. 

    (c) Except
as expressly set forth herein, the execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy of the
Administrative Agent or the Lenders under any of the Credit Documents or constitute a waiver of any provision of any of the Credit Documents. 

    SECTION
5.  Costs and Expenses.  The Borrower agrees to pay on demand all costs and expenses of the
Administrative Agent in connection with the preparation, execution and delivery of this Amendment and the other instruments and documents to be delivered hereunder, including the reasonable fees and
out-of-pocket expenses of counsel for the Administrative Agent with respect thereto and with respect to advising the Administrative Agent as to its rights and responsibilities
hereunder and thereunder. 

    SECTION
6.  Execution in Counterparts.  This Amendment may be executed in any number of counterparts and
by the 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
agreement. 

–3–

 
    SECTION 7.  Governing Law.  THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF CALIFORNIA APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THE STATE OF CALIFORNIA. 

	 	 	LTC PROPERTIES, INC.
	

 	
 	

By:	
 	

 	
 	

 
	 	 	 	 	

	 	 	 	 	Name:	 	 
	 	 	 	 	Title:	 	 
	

 	
 	

SANWA BANK CALIFORNIA,

as Administrative Agent and Lender
	

 	
 	

By:	
 	

 	
 	

 
	 	 	 	 	
 E. Leigh Irwin

Senior Vice President
	

 	
 	

BANK OF MONTREAL,

as Syndication Agent and Lender
	

 	
 	

By:	
 	

 	
 	

 
	 	 	 	 	

	 	 	 	 	Name:	 	 
	 	 	 	 	Title:	 	 
	

 	
 	

BNP PARIBAS, Los Angeles Branch,

as Documentation Agent and Lender
	

 	
 	

By:	
 	

 	
 	

 
	 	 	 	 	

	 	 	 	 	Name:	 	 
	 	 	 	 	Title:	 	 
	

 	
 	

By:	
 	

 	
 	

 
	 	 	 	 	

	 	 	 	 	Name:	 	 
	 	 	 	 	Title:	 	 

S–1

 

	 	 	BANK HAPOALIM B.M.
	

 	
 	

By:	
 	

 	
 	

 
	 	 	 	 	

	 	 	 	 	Name:	 	 
	 	 	 	 	Title:	 	 
	

 	
 	

By:	
 	

 	
 	

 
	 	 	 	 	

	 	 	 	 	Name:	 	 
	 	 	 	 	Title:	 	 
	

 	
 	

BANK OF AMERICA, N.A.
	

 	
 	

By:	
 	

 	
 	

 
	 	 	 	 	

	 	 	 	 	Name:	 	 
	 	 	 	 	Title:	 	 
	

 	
 	

KEY CORPORATE CAPITAL INC.
	

 	
 	

By:	
 	

 	
 	

 
	 	 	 	 	

	 	 	 	 	Name:	 	 
	 	 	 	 	Title:	 	 
	

 	
 	

BHF (USA) CAPITAL CORPORATION
	

 	
 	

By:	
 	

 	
 	

 
	 	 	 	 	

	 	 	 	 	Name:	 	 
	 	 	 	 	Title:	 	 
	

 	
 	

By:	
 	

 	
 	

 
	 	 	 	 	

	 	 	 	 	Name:	 	 
	 	 	 	 	Title:	 	 

S–2

 

	 	 	WELLS FARGO BANK, N.A.
	

 	
 	

By:	
 	

 	
 	

 
	 	 	 	 	

	 	 	 	 	Name:	 	 
	 	 	 	 	Title:	 	 
	

 	
 	

BANK LEUMI USA
	

 	
 	

By:	
 	

 	
 	

 
	 	 	 	 	

	 	 	 	 	Name:	 	 
	 	 	 	 	Title:	 	 

S–3

ANNEX 1  

 BORROWING BASE REPORT

as of                           

	Book value of Eligible Mortgage Loans	 	$	 
	 	Less: Impairment adjustments	 	 	 
	 	 	

	Applicable Value of Eligible Mortgage Loans	 	$	 
	 	 	

	

Book value of Eligible Owned Properties	
 	
$	

 
	 	Less: Impairment adjustments	 	 	 
	 	 	

	Book value of Eligible Owned Properties, as adjusted	 	$	 
	 	Less: Depreciation, allocated pro rata Appraisal to book adjustments	 	$	 
	 	 	

	Applicable Value of Eligible Owned Properties	 	$	 
	 	 	

	
Borrowing Base Calculation	
 	
 	

 
	

Sum of:	
 	
 	

 
	

75% of total Applicable Value of Eligible Mortgage Loans	
 	
$	

 
	and	 	 	 
	60% of total Applicable Value of Eligible Owned Properties	 	$	 
	 	 	

	Borrowing Base	 	$	 
	

Less: Advances outstanding	
 	
$	

 
	

Less: Letters of Credit outstanding	
 	
$	

 
	

Less: Unreimbursed drawings under Letters of Credit	
 	
$	

 
	
Borrowing Base Availability (lesser of Borrowing Base and Aggregate Commitment, as it may be reduced pursuant to terms of Credit Agreement)	
 	
$	

 

QuickLinks

EXHIBIT 10.1

SECOND AMENDMENT TO REVOLVING CREDIT AGREEMENT

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