ex10_231.htm


    
      

    

    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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