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Exhibit 10.23.1
 
NOTE

$12,864,874.24
March 1, 2007

 
 San Ramon, California

FOR VALUE RECEIVED, SENIOR LIVING PROPERTIES, LLC, a limited liability company
organized under the laws of the State of Delaware ("Borrower"), shall pay to the
order of HEALTH CARE REIT, INC., a corporation organized under the laws of the
State of Delaware ("Lender"), the principal sum of Twelve Million Eight Hundred
Sixty-Four Thousand Eight Hundred Seventy-Four and 24/100 Dollars
($12,864,874.24), or so much thereof as shall have been advanced to Borrower,
with interest on so much thereof as shall from time to time be outstanding at
the rate of interest set forth below, until fully paid.

1.           Definitions.

"Business Day" means any day that is not a Saturday or Sunday or a public
holiday under the laws of the United States of America or the State of Ohio.

"Closing Date" means the date of this note.

"Collateral Document" means any document providing security for or guarantee of
repayment of this note.

"Commencement Date" means [i] the Closing Date if the Closing Date occurs on the
first day of a month or [ii] the first day of the month after the Closing Date
if the Closing Date occurs on any day other than the first day of the month.

"Default Rate" means the greater of [i] 18.50%; or [ii] 2.50% plus the then
applicable interest rate.

"Event of Default" has the meaning set forth in §8.

"Guarantor" means Summerville Senior Living, Inc., Summerville at Kenner,
L.L.C., Summerville at Dayton LLC, and Summerville at Outlook Manor LLC,
individually and collectively.

"Interest Rate" means the rate of 8.5% per annum, and includes the cumulative
annual increase by the Interest Rate Increaser Amount as set forth in §2(a).

"Interest Rate Increaser Amount" means 27 basis points per year.

"Lease" means the Amended and Restated Master Lease Agreement by which Health
Care REIT, Inc. and HCRI Louisiana Properties, L.P. lease certain property to
Borrower.

"Loan" means the loan evidenced by this note.

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"Loan Documents" means this note, the Mortgage, and any other documents executed
or delivered in connection therewith which by its terms evidences, secures or
guaranties the Loan.

"Maturity Date" means February 28, 2018.

"Mortgage" means the Leasehold Deed of Trust and Open-End Mortgage or Multiple
Indebtedness Leasehold Mortgage of even date made by Borrower in favor of Lender
to secure repayment of this note and other obligations of Borrower under the
Loan Documents.

"Term" means the period commencing on the Closing Date and expiring on the
Maturity Date.

"Term Sheet" means the Summerville Term Sheet dated as of February 15, 2007.

2.             Interest Rate.

(a)           Rate. Interest shall accrue on the principal amount outstanding
from and after the Closing Date until the Maturity Date at the Interest Rate. On
each anniversary of the Commencement Date during the Term, the Interest Rate
then in effect will be increased cumulatively by the Interest Rate Increaser
Amount.

(b)           Post-Maturity Rate. If the outstanding balance of this note has
not been paid in full by the Maturity Date, the interest rate on this note shall
thereafter be at the Default Rate.

(c)           Default Rate. After the occurrence and during the continuance of
an Event of Default, Borrower shall pay interest on this note, and on any
judgment on this note, at the Default Rate.

(d)           Computation Method. All interest rates shall be calculated based
on the actual number of days elapsed over a 360-day year (365/360 method).

3.             Payments. Borrower shall make payments in accordance with the
following:

(a)           On the Commencement Date, Borrower shall make a payment of
interest on the outstanding principal balance of this note at the Interest Rate
for the period commencing on the Closing Date and ending on the day before the
Commencement Date. If the Closing Date occurs on the first day of a month, this
section shall not apply and no payment is due on the Commencement Date.

(b)           Commencing on the first day of the first month after the
Commencement Date and on the first day of each month thereafter until the
Maturity Date, Borrower shall pay to Lender accrued interest on this note.

(c)           On the Maturity Date or upon prepayment of this note, Borrower
shall pay the outstanding principal balance of this note, all accrued and unpaid
interest, and all charges,
expenses and other amounts payable by Borrower to Lender under this note or any
Collateral Document.

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4.              Method and Place of Payment. Borrower shall make all payments on
this note by electronic wire transfer in accordance with the wiring instructions
set forth in Exhibit A attached hereto, subject to change in accordance with
other written instructions provided by Lender from time to time.

5.              Prepayment. Borrower may prepay all or any portion of the
outstanding principal balance of this note, all accrued and unpaid interest, and
all charges, expenses and other amounts payable by Borrower to Lender at any
time without payment of any prepayment fee.

6.              Application of Payments. Unless Lender elects otherwise, in its
sole discretion, all payments and other amounts received by Lender shall be
credited as follows: [i] first, to any charges, costs, expenses and fees payable
by Borrower under this note, the Loan Agreement or the Mortgage, or incurred by
Lender for the protection of any collateral securing the payment of this note,
if not paid by Borrower by the due date; [ii] second, to interest on the
foregoing amounts at the Default Rate from the due date or date of payment by
Lender, as the case may be; [iii] third, to accrued but unpaid interest on this
note; [iv] fourth, to the principal amount outstanding; and [v] the balance, if
any, to Borrower.

7.              Late Charge. Borrower acknowledges that any default in any
payment due under this note will result in loss and additional expense to Lender
in handling such delinquent payments and meeting Lender's other financial
obligations. Because such loss and additional expense is extremely difficult and
impractical to ascertain, Borrower agrees that if any payment hereunder is not
paid within 10 days after the due date, Borrower shall pay, as a reasonable
estimate of such loss and expense, a late charge equal to the lesser of [i] 5%
of the amount of the overdue payment, or [ii] the maximum amount permitted by
applicable law.

8.              Default. Any Event of Default under the Lease shall constitute
an "Event of Default" hereunder without advance notice to Borrower, such notice
being expressly waived by Borrower.

9.              Acceleration. Upon the occurrence of any Event of Default, in
addition to all other remedies available to Lender under the Mortgage, any other
security for or guarantee of this note, and at law or in equity, at the option
of Lender [i] the outstanding principal balance of this note, all accrued and
unpaid interest thereon, and all other amounts payable by Borrower to Lender
shall be immediately due and payable, and [ii] all such amounts shall bear
interest at the Default Rate from the date of the Event of Default until paid.
Lender may exercise either or both options without notice or demand of any kind.

10.            Governing Law. This note shall be governed by and construed in
accordance with the internal laws of the State of Ohio, without giving effect to
the conflict of laws rules thereof. Borrower waives any claim or defense that
such choice of law is not enforceable.

11.            Time is of the Essence. Time is of the essence in the payment of
this note. All grace periods in any Collateral Document that apply to a default
shall run concurrently.

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12.            Holidays. If any installment of this note becomes due on a day
which is not a Business Day, Borrower may pay the installment on the next
succeeding day on which banking institutions are open.

13.            Waivers. None of the following shall be a course of dealing,
estoppel, waiver or the like on which any party to this note or any Collateral
Document may rely: [i] Lender's acceptance of one or more late or partial
payments; [ii] Lender's forbearance from exercising any right or remedy under
this note or any Collateral Document; or [iii] Lender's forbearance from
exercising any right or remedy under this note or any Collateral Document on any
one or more occasions. Lender's exercise of any rights or remedies or a part of
a right or remedy on one or more occasions shall not preclude Lender from
exercising the right or remedy at any other time. Lender's rights and remedies
under this note, the Collateral Documents, and the law and equity are cumulative
to, but independent of, each other.

14.            Representations. Each party to this note and each Collateral
Document: [i] acknowledges that Lender would not have extended the credit
evidenced by this note and will not continue to extend the credit but for the
obligations of each; [ii] warrants that each has executed this note or
Collateral Documents to induce Lender to extend and to continue to extend the
credit; [iii] warrants that each has received good and valuable consideration
for executing this note or any Collateral Document; and [iv] warrants that none
have executed this note or any Collateral Document in reliance upon the
existence of the security for or guaranty or promise of the payment of this
note.

15.            Indulgences. Without notice, Lender may do or refrain from doing
anything affecting this note or any Collateral Document, as many times as Lender
desires, including the following [i] granting or not granting any indulgences to
anyone liable for payment of this note or to anyone liable under any Collateral
Document; [ii] releasing any security or anyone or any property from liability
on this note or any Collateral Document; [iii] amending this note or any
Collateral Document, including extending the time for payment of this note, in
accordance the terms of such Collateral Documents.

16.            No Release of Liability. No obligations of any party to this note
shall be affected by [i] any default in this note or any Collateral Document
when accepted by Lender or arising any time thereafter; [ii] the
unenforceability of or defect in this note or in any Collateral Document or any
interest conveyed by any Collateral Document; [iii] any decline in the value of
any interest in any property conveyed by any Collateral Document; or, [iv] the
death, incompetence, insolvency, dissolution, liquidation or winding up of
affairs of any party to this note or any Collateral Document or the start of
insolvency proceedings by or against any such party. EACH PARTY TO ANY
COLLATERAL DOCUMENT WAIVES ALL SURETYSHIP DEFENSES. No party to this note or any
Collateral Document may enforce any right of subrogation or contribution unless
and until this note is paid in full and waives all rights of subrogation against
any party that is subject to insolvency proceedings unless and until this note
is paid in full.

17.            Notices. All notices, demands, requests and consents (hereinafter
"notices") given pursuant to this note shall be in writing, and shall be served
by [i] personal delivery, [ii] United States Mail, postage prepaid; or [iii]
nationally recognized overnight courier to the following addresses:

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To Borrower:                                     Senior Living Properties, LLC
3000 Executive Parkway, Suite 530
San Ramon, California 94583

To Lender:                                         Health Care REIT, Inc.
One SeaGate, Suite 1500 P.O. Box 1475
Toledo, OH 43603-1475

All notices shall be deemed to be given upon the earlier of actual receipt or
three days after deposit in the United States mail or one business day after
deposit with the overnight courier. Lender and Borrower may change their notice
address at any time by giving the other party written notice of such change.

18.            Representation and Warranty Regarding Business Purpose. Borrower
represents and warrants that the loan evidenced by this note is for business
purposes only and not for personal, family, household, or agricultural purposes.

19.            Security; Guaranty. This note is secured by the Mortgage and a
security interest in substantially all personal property of Borrower granted
pursuant to the Lease. This note is guaranteed by Guarantor.

20.            Protest. Except as otherwise provided herein or in any of the
other Loan Documents, each party to this note jointly and severally waives
protest, notice of protest, demand, dishonor or default, presentment for
payment, notice of intent to declare this note immediately due and payable,
notice of declaration that this note is immediately due and payable in full, all
other notices, and all demands.

21.            Savings Clause. The intention of Lender and Borrower is to comply
with the laws of the State concerning the rate of interest on this note.
Notwithstanding any other provision in this note or in any other document given
in connection with this note, Borrower shall not be required to pay interest in
excess of the maximum lawful rate. To the extent the amount of interest provided
in this note ever exceeds the maximum lawful rate ("Excess Interest"), [i] the
provisions of this paragraph shall govern and control; [ii] Borrower shall not
be obligated to pay any Excess Interest; [iii] any Excess Interest that Lender
may have received shall be credited against the then outstanding balance due
under this note and, if the Excess Interest exceeds the outstanding balance, the
excess amount shall be refunded to Borrower; [iv] the rate of interest under
this note shall be automatically reduced to the maximum lawful rate and this
note and any other documents given in connection therewith shall be deemed
reformed and modified to reflect such reduction; and [v] subject to the
foregoing provisions of this paragraph, Borrower shall have no action or remedy
against Lender for any damages whatsoever or any defense to enforcement of the
note or any other documents given in connection therewith arising out of the
payment or collection of any Excess Interest. In determining whether interest
paid or payable on this note exceeds the maximum lawful rate, Borrower agrees to
exclude voluntary prepayment fees from the calculation of interest and to spread
the total amount of interest throughout the entire contemplated term of this
note.

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22.            Attorney's Fees and Expenses. Borrower shall pay to Lender all
reasonable out of pocket costs and expenses incurred by Lender in enforcing or
preserving Lender's rights under this note or any Collateral Document, and in
all matters of collection, provided an Event of Default has actually occurred or
has been declared and thereafter cured, including, but not limited to, [i]
reasonable attorney's and paralegal's fees and disbursements; [ii] the fees and
expenses of any litigation, administrative, bankruptcy, insolvency, receivership
and any other similar proceeding; [iii] court costs; [iv] the reasonable
expenses of Lender, its employees, agents, attorneys and witnesses in preparing
for litigation, administrative, bankruptcy, insolvency and other proceedings and
for lodging, travel, and attendance at meetings, hearings, depositions, and
trials; and [v] reasonable consulting and witness fees incurred by Lender in
connection with any litigation or other proceeding, but excluding Lender's
internal bookkeeping and routine loan servicing costs.

23.            Severability. If any clause, provision, section or article of
this note is ruled invalid by any court of competent jurisdiction, the
invalidity of such clause, provision, section, or article shall not affect any
of the remaining provisions hereof.

24.            Assignment. Borrower shall not assign its rights nor delegate its
obligations under this note.

25.            Amendment. This note may not be amended except in writing signed
by Borrower and Lender. All references to this note, whether in this note or in
any other document or instrument, shall be deemed to incorporate all amendments,
modifications, and renewals of this note and all substitutions made therefor
after the date hereof.

26.           CONSENT TO JURISDICTION. BORROWER HEREBY IRREVOCABLY SUBMITS AND
CONSENTS TO THE NONEXCLUSIVE JURISDICTION AND VENUE OF ANY STATE OR FEDERAL
COURT HAVING JURISDICTION OVER LUCAS COUNTY, OHIO OR ANY COUNTY IN WHICH ANY
PROPERTY SUBJECT TO THE LEASE IS LOCATED FOR ANY ACTION OR PROCEEDING TO ENFORCE
OR DEFEND ANY MATTER ARISING FROM OR RELATED TO [I] THE TERM SHEET FOR THE LOAN
EVIDENCED BY THIS NOTE; [II] THIS NOTE; OR [III] ANY LOAN DOCUMENT EXECUTED IN
CONNECTION WITH THIS NOTE. BORROWER HEREBY IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT BORROWER MAY EFFECTIVELY DO SO, THE DEFENSE OF AN INCONVENIENT FORUM TO
THE MAINTENANCE OF ANY SUCH ACTION OR PROCEEDING. BORROWER AGREES THAT A FINAL
JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN ANY OTHER JURISDICTION BY SUIT ON THE JUDGMENT OR IN ANY OTHER
MANNER PROVIDED BY LAW.
 
     BORROWER AND ANY GUARANTOR AGREE NOT TO INSTITUTE ANY LEGAL ACTION OR
PROCEEDING AGAINST LENDER OR ANY DIRECTOR, OFFICER, EMPLOYEE, AGENT OR PROPERTY
OF LENDER, CONCERNING ANY MATTER ARISING OUT OF OR RELATING TO THE TERM SHEET,
THIS NOTE OR ANY LOAN DOCUMENT IN ANY COURT OTHER THAN A STATE OR FEDERAL COURT
HAVING JURISDICTION OVER LUCAS COUNTY, OHIO.

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 BORROWER HEREBY CONSENTS TO SERVICE OF PROCESS BY LENDER IN ANY MANNER AND IN
ANY JURISDICTION PERMITTED BY LAW. NOTHING HEREIN SHALL AFFECT OR IMPAIR
LENDER'S RIGHT TO SERVE LEGAL PROCESS IN ANY MANNER PERMITTED BY LAW, OR
LENDER'S RIGHT TO BRING ANY ACTION OR PROCEEDING AGAINST BORROWER OR THE
PROPERTY OF BORROWER OR ANY GUARANTOR IN THE COURTS OF ANY OTHER JURISDICTION.

27.            WAIVER OF JURY TRIAL TO THE FULLEST EXTENT PERMITTED BY LAW,
BORROWER AND ANY GUARANTOR HEREBY KNOWINGLY AND VOLUNTARILY WAIVE THE RIGHT TO A
JURY TRIAL IN ANY ACTION, PROCEEDING OR COUNTERCLAIMS ARISING OUT OF OR RELATING
TO THIS NOTE.

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IN WITNESS WHEREOF, the undersigned has executed this note effective as of the
date first set forth above.

 
SENIOR LIVING PROPERTIES, LLC
         
By: /s/ Granger Cobb
 
 Granger Cobb
 
Title:    President

 
 
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