Document:

<PAGE>

                                                                    EXHIBIT 10.1

                                  AMENDMENT TO
                            PATENT LICENSE AGREEMENT

This Amendment to the Patent License Agreement (this "Amendment") dated the 17th
day of April, 2003, is by and between The Children's Hospital of Philadelphia, a
Pennsylvania nonprofit corporation (the "Licensor"), and Genaera Corporation
(formerly Magainin Sciences Inc.), a Delaware corporation (the "Licensee").

WHEREAS, the Licensor and Licensee entered into the Patent License Agreement
dated as of March 1, 1988 with a Licensor signature date of October 18, 1991
(the "Agreement"); and

WHEREAS, the Licensor has patents and patent applications listed in Appendix A
to this Amendment which represent in the aggregate the sole Licensable Invention
and have been licensed to the Licensee as Licensed Patents; and

WHEREAS, the Licensee has patents and patent applications pertaining
specifically to Licensed Product ("Licensee Patents"); and

WHEREAS, Licensor and Licensee wish to amend and restate certain provisions of
the Agreement as set forth specifically in this Amendment.

NOW THEREFORE, the parties, in consideration of the mutual obligations set forth
herein and in the Agreement, the sufficiency of which is hereby acknowledged,
intending to be legally bound, agree as follows:

1.   Capitalized terms used herein and not otherwise defined shall have the
     meanings given to them in the Agreement.

2.   Section 1.6 is hereby amended and restated in its entirety as follows:

          "Licensed Patents" shall mean all patent applications and patents,
          including all divisionals, continuations, continuations-in-part,
          reissues, extensions and foreign counterparts thereof, directed to a
          Licensable Invention, all of which are identified in Appendix A, and a
          written schedule that shall be kept current and signed by both
          parties.

3.   Section 1.7 is hereby amended and restated in its entirety as follows:

          "Licensed Product" shall mean any product, composition, chemical,
          peptide, composition of matter, machine, etc., that is covered by a
          Valid Claim of a Licensed Patent. From and after the expiration of
          such Licensed Patent, such Licensed Product shall continue for

                                       1

<PAGE>

          purposes of this Agreement to be considered a Licensed Product if its
          is covered by a Valid Claim of a Licensee Patent. Licensed Product
          shall further mean any product, chemical, composition of matter,
          peptide, machine, etc. that normal and customary use of which, or the
          use of which pursuant to the associated labeling, utilizes a Licensed
          Process covered by a Valid Claim of a Licensed Patent. Licensed
          Product shall further include any product that is manufactured
          according to, or with the benefit of, any Licensed Process covered by
          a Valid Claim of a Licensed Patent.

4.   A new Section 1.10 is hereby added to the Agreement as follows:

          "Licensee Patents" shall mean all patent applications and patents,
          including all divisionals, continuations, continuations-in-part,
          reissues, extensions and foreign counterparts thereof, under the
          control of the Licensee that pertain specifically and solely to
          making, having made, using or selling a Licensed Product in the
          Licensed Territory. Licensee Patents shall exclude Licensed Patents.

5.   Sections 1.10, 1.11 and 1.12 are hereby renumbered as Sections 1.11, 1.12
     and 1.13, respectively.

6.   Section 3.1 of the Agreement is hereby amended and restated in its entirety
     as follows:

          The royalty rate payable by Licensee to Licensor under this Agreement
          shall be equal to one percent (1%) of Net Sales in the Licensed
          Territory prior to March 18, 2010. The royalty rate payable by
          Licensee to Licensor under this Agreement shall be equal to one-half
          percent (0.5%) of Net Sales in the Licensed Territory that occur from
          and after March 18, 2010 in the Licensed Territory. Only one royalty
          shall be due and payable to Licensor for any Licensed Product for
          which royalties are to be paid under this Agreement.

7.   Sections 3.2, 3.3 and 3.4 are of the Agreement are hereby deleted in their
     entirety.

8.   Sections 3.5, 3.6, 3.7, 3.8, 3.9 and 3.10 are hereby renumbered as Sections
     3.2, 3.3, 3.4, 3.5, 3.6 and 3.7, respectively.

9.   Newly renumbered Section 3.5 of the Agreement is hereby amended and
     restated in its entirety as follows:

          Reports. Licensee shall deliver to Licensor, simultaneously with
          payment pursuant to Section 3.2.1, a written statement

                                       2

<PAGE>

          signed by a responsible officer of Licensee in such detail as Licensor
          may reasonably require, showing the Net Sales for the License Quarter
          and calculation of the payment due. If no payments are due for the
          License Quarter, the report shall so state.

10.  Newly renumbered Section 3.6.2 of the Agreement is hereby amended and
     restated in its entirety as follows:

          Licensee shall permit, upon reasonable advance written notice,
          Licensor, or any person designated by Licensor and reasonably
          acceptable to Licensee, to have full access to such records for the
          purpose of verifying the amount of payments due Licensor. Audits shall
          be requested in writing, and shall occur no more than once per License
          Year. Licensor shall be responsible for its own costs and expenses in
          connection with any audit, except that Licensee shall reimburse
          Licensor after written request for all reasonable documented costs and
          expenses of any audit that demonstrates conclusively that Licensee's
          actual payments for any particular License Quarter were less than the
          amount due and payable according to Section 3.1 by an amount that
          equals or exceeds ten percent (10%) of such actual, due and payable
          amount.

11.  Newly renumbered Section 3.7 of the Agreement is hereby amended and
     restated in its entirety as follows:

          Interest. Any required payments that are due and payable but not made
          on or before the date for payment specified in Section 3.2 shall bear
          interest, compounded annually, from the date such payment is due until
          the date it is received, at the prime or reference rate announced by
          Provident National Bank (or another mutually agreeable federally
          chartered bank) applicable to short-term (i.e., ninety (90) day)
          borrowings.

12.  Section 4.1.1 of the Agreement is hereby amended and restated in its
     entirety as follows:

          Licensee shall use commercially reasonable efforts and commercially
          reasonable diligence under the circumstances to sublicense, or
          research and subsequently develop for commercial sale, each Licensed
          Product. If Licensee does not appear to have used such efforts and
          diligence under the circumstances to sublicense, or research and
          subsequently develop for commercial sale, each Licensed Product, then
          Section 4.1.2 of this Agreement shall apply.

                                       3

<PAGE>

13.  Section 4.1.2 of the Agreement is hereby amended and restated in its
     entirety as follows:

          In the event that Licensor reasonably believes that Licensee is not
          using commercially reasonable efforts and commercially reasonable
          diligence under the circumstances to sublicense, or research and
          subsequently develop for commercial sale each Licensed Product, then
          Licensor may provide written notice to Licensee specifying Licensor's
          basis for such belief and what additional efforts Licensor believes
          should be made by Licensee. Licensee shall respond within thirty (30)
          days, providing assurances and/or detailed explanation of the status
          of the research efforts. For a ninety (90) day period following the
          exchange of such written notices, Licensor and Licensee shall enter
          into good faith negotiations in order to reach mutual agreement as to
          what efforts by Licensee shall satisfy the requirements of Section
          4.1.1, and, if such mutual agreement is not reached within such ninety
          (90) day period, then either party may submit such matter to
          arbitration pursuant to Section 19. Licensor's obligation to arbitrate
          as to any particular Licensed Product pursuant to this Section 4.1.2
          shall be limited to a single arbitration.

14.  Section 4.3 of the Agreement is hereby amended and restated in its entirety
     as follows:

          Proprietary Rights Of Others. The parties acknowledge that Licensor
          has received grants from the Ben Franklin Technology Center directed
          to the materials covered by the Sponsored Research Agreement and may
          have received other such grants in the past from third parties
          ("Grantors"). Licensee acknowledges that Licensor and any party
          licensing relevant technology from Licensor, such as Licensee, are
          subject to certain duties and obligations to the Grantors. The parties
          agree to abide by the terms of the Grantors and to expend their
          respective commercially reasonable efforts to comply with any such
          duties and obligations, but Licensor agrees to be solely responsible
          for the payment of any amounts due or payable to the Grantors,
          including, without limitation, all royalties and reimbursements due to
          the Grantors.

15.  Section 9.1 of the Agreement is hereby amended and restated in its entirety
     as follows:

                                       4

<PAGE>

          Term. Unless this Agreement is terminated earlier pursuant to Section
          9.2, this Agreement shall remain in full force and effect from the
          Effective Date until the expiration of the last to expire Licensed
          Patents and Licensee Patents.

16.  Except as set forth herein, the Agreement shall remain in full force and
     effect.

17.  This Amendment shall be governed by, and construed in accordance with, the
     laws of the Commonwealth of Pennsylvania.

18.  This Amendment may be executed in counterparts, each of which need not
     contain the signature of more than one party but both of which together
     shall constitute one and the same agreement.

                            [Signature Page Follows]

                                       5

<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to the Patent
License Agreement to be executed by their duly authorized officers as of the day
above written.

                           THE CHILDRENS HOSPITAL OF PHILADELPHIA

                           BY:  /s/ Judith Argon
                              --------------------------------
                           Name: Judith Argon
                           Title: VP, Research Administration

                           GENAERA CORPORATION

                           BY:  /s/ Roy Clifford Levitt, M.D.
                              --------------------------------
                           Name:  Roy Clifford Levitt, M.D.
                           Title:  President and CEO

                                       6

<PAGE>

                                   Appendix A

Patent No.:       5,192,756
Issue Date:       3/9/93
Serial No.:       853,634
Filing Date:      3/18/92
Title:            AMINOSTEROL ANTIBIOTIC
Inventors:        Michael Zasloff, Karen Moore, Suzanne Wehrli
Status:           In force until 3/9/10 upon payment of maintenance fees
Foreign Cases:    Country    Status   Serial No./Patent No.
                  -------    ------   ---------------------

                  EPO        Issued   EP 0 637 243
                  Australia  Issued   675782
                  Canada     Pending  2,130,803
                  Japan      Granted  516544/1993

Synopsis:         This patent describes the composition of matter of squalamine
                  and its use as an antimicrobial.

                                       7Amended and Restated Promissory Note dated July 29, 2003

  Exhibit 10.1
 AMENDED AND RESTATED
PROMISSORY NOTE
 DATE: July 29, 2003
 Malibu,
California
 THIS AMENDED AND RESTATED PROMISSORY NOTE (THIS “NOTE”), SUPERSEDES AND REPLACES THAT CERTAIN PROMISSORY NOTE DATED DECEMBER 31, 2001
MADE BY HEALTHCARE HOLDINGS, INC., AS MAKER, IN FAVOR OF LTC PROPERTIES, INC., AS PAYEE IN THE ORIGINAL PRINCIPAL AMOUNT OF SEVEN MILLION DOLLARS ($7,000,000.00) (THE “ORIGINAL NOTE”).
 NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is acknowledged, Maker and Payee agree as follows:
 RECITALS
 A.         As of the date hereof,
Maker certifies, acknowledges and agrees the outstanding principal balance of the Note plus accrued interest as of July 29, 2003 is $7,631,917.81 prior to any additional amounts borrowed under B below.
 B.         Subject to the limitations described herein, Maker desires to amend this Note from Payee to enable Maker to borrow
from Payee up to an additional Two Million dollars ($2,000,000) and to allow Maker to “upstream” any additional advances to Maker’s parent company, CLC Healthcare, Inc. (“CLC”).
 C.         At Maturity Date, as hereinafter defined, for value received, Maker hereby promises to pay to the order of Payee, at
Payee’s principal place of business in Malibu, California, or such other place as Payee may from time to time designate, the principal sum then outstanding. Principal amounts outstanding will accrue interest at the rate of 5%, compounded
annually, (“Compounded Interest”). In addition, during the term of the Note, Maker shall pay to Payee on an annual basis accrued interest at the rate of 2% (“Annual Interest”) on the principal balance then outstanding on each
December 31st and ending with the last payment of Annual Interest on December 31, 2006. All principal and accrued Compound Interest shall be due on or before December 31, 2006 (the “Maturity Date”). Principal and interest due hereunder
shall be payable in lawful money of the United States.
 1.          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, compound interest and
accrued interest owing to Payee by Maker under this Note.
 2.          Prepayments. Maker shall have the right to prepay all or any part of the principal and accrued interest balance of this Note 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.          Security Documents. This Note is a full recourse obligation of the Maker and is secured by all of the assets of Maker, whether heretofore or hereafter, including, but not limited to the Assisted Living Concepts,
Inc. “(ALF”) common shares currently held by Maker. Reference is made to the Security Documents for a description of the collateral provided for therein and the rights of Payee with respect to such collateral.
 4.          Sale of Collateral. Maker may not at any time
sell all or a portion of the Collateral underlying this Note without Payee’s written consent. One hundred percent (100%) of the proceeds, as hereinafter defined, must be remitted to the Payee within 3 business days of receipt of such proceeds.
“Proceeds” is defined as total cash received before any costs, expenses or fees associated with such sale. Such Proceeds, to the extent of the proceeds, will first be applied to reduce any accrued but unpaid Annual Interest, second to
reduce any accrued but unpaid Compounded Interest and finally to reduce the principal of the Note.
 
1

  5.          Restrictive
Covenants. Maker hereby covenants and agrees with Payee that, for so long as the obligations of Maker under this Note remain outstanding under the Note, Maker will comply with all of the following:
 (a)        Maker will not, and will not permit any subsidiary of Maker to, create, assume, incur
or suffer to exist any lien or encumbrance of any kind, upon all or any portion of the Collateral (as defined in the Security Documents).
 (b)        Maker will not, and will not permit any subsidiary to pay a dividend, provide any loan guaranty, lend money or borrow any additional sums beyond this Note without prior
approval of Payee.
 (c)        Maker will not, and will not permit any
subsidiary to (i) lease, assign or sell all or substantially all of its property or business to any other Person (as hereinafter defined), (ii) merge or consolidate with or into any other Person, (iii) purchase or lease or otherwise acquire all or
substantially all of the assets of any other Person, (iv) sell, transfer, pledge or otherwise dispose of capital stock of Maker or any of its subsidiaries, (v) liquidate, suspend or dissolve its business operations, (vi) change its name, identity or
corporate, partnership or other structure, or (vii) change the current principal place of business or chief executive office, in each case without the prior written consent of Payee.
 6.          Acknowledgement and Restrictive Covenant of CLC Healthcare, Inc., parent of Maker
(“CLC”). CLC hereby acknowledges that it has heretofore pledged as collateral all of the outstanding stock of Maker pursuant to that certain First Amendment to Second Amended and Restated Promissory Note and
Security Agreement dated October 1, 2002, which obligation remains in effect, and hereby further covenants and agrees with Payee that, for so long as the obligations of Maker under this Note remain outstanding, CLC will not pledge the stock of
Maker, or otherwise encumber the stock of Maker, in any manner for any reason.
 7.          Change of Control. Notwithstanding anything to the contrary contained herein, upon a Change of Control (as hereinafter defined)
Payee may, in its sole discretion, declare the entire balance of principal and interest hereon immediately due and payable, together with all applicable charges and payments due hereunder, all costs of collection, including reasonable
attorneys’ fees and all other costs and expenses incurred, and shall have all remedies available under the Security Documents, at law or in equity. For purposes of this Note, a “Change of Control” shall mean and include (i) the sale
by Maker, or CLC (each hereinafter referred to as “Party”) and/or any subsidiary of either Party of all or substantially all of the assets of either Party and its subsidiaries taken as a whole, (ii) any Acquisition by any person or any
persons acting together which would constitute a “group” for purposes of Section 13(d) of the Exchange Act (a “Group”) of 30% or more of the total voting power of all classes of capital stock of either Party entitled to vote
generally in the election of the Board of Directors of either Party, (iii) any Acquisition by any person or Group of the power to elect, appoint or cause the election or appointment of at least a majority of the members of the Board of Directors of
either party, through beneficial ownership of the capital stock or otherwise, or, (iv) a majority of the members of the Boards of Directors of either Party cease to be Continuing Directors (as hereinafter defined). As used herein, “Continuing
Directors” means, as of any date of determination, any member of the Board of Directors of either party, who (i) was a member of the Boards of Directors of either Party on the date of this Note, or (ii) was nominated for election or elected to
such Board with the approval of a majority of the Continuing Directors who were members of such Boards at the time of such nomination or election. For the purposes of this definition, “Acquisition” of the power or properties and assets stated in the preceding sentence means the earlier of (a) the actual possession thereof and (b) the consummation of any transaction or series of related transactions which, with the passage of
time, will give such Person or Persons that actual possession thereof. As used herein, “Person” shall mean an individual, corporation, trust, partnership, joint venture, unincorporated
organization, government agency or any agency or political subdivision thereof, or other entity.
 8.          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 
 
2

  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 THE 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:  
 	 
 
 
 	  
 	  
 	 
 
 
 
	  
 	 
 	  
 	  
 	  
 
	  
 	 Maker
 	  
 	  
 	  
 

 9.          Default. The occurrence of any of the following shall constitute an event of default (“Event of Default”) under this
Note:
 (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, CLC, or any of their respective subsidiaries, monetary or otherwise, hereunder or otherwise, which breach or default (except as provided below) shall continue for
more than ten (10) calendar days after Maker or CLC has received written notice thereof from Payee;
 (c)        notwithstanding anything to the contrary contained in this Section, immediately upon the breach or default of any provision of Sections 4, 5 and 6 hereof; or

(d)         a breach or default under the Security Documents.
 10.       Acceleration Rights; Remedies. Upon the occurrence of an Event
of Default or Change of Control hereunder, Payee may, in its sole discretion, declare the entire balance of principal and interest hereon immediately due and payable, together with all applicable charges and payments due hereunder, costs of
collection, including reasonable attorneys’ fees and all other costs and expenses incurred, and shall have any and all remedies available under the Security Documents, at law or in equity.
 11.       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.
 12.       Waivers. Maker
of this Note hereby waives diligence, demand, presentment for payment, exhibit 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.
 13.       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.
 14.       Governing Law. This Note shall in all respects be interpreted, enforced, and governed by and under
the internal law of the State of California without resort to choice of law principles.
 
3

  15.       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.
 16.       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 indebtedness evidenced by this Note, whether
such laws are not or hereafter in effect, including the laws of the Untied 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 17 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 be obligated to apply the amount of such interest to the extent it is in excess of the Maximum Amount; (iv) any
interest contracted for, charge, 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 (as hereinafter defined), 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 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.
 
4

  17.       Notices. Any notice
or other communication required or permitted to be given under this Note shall be in writing and sent by United States mail, registered or certified mail, postage prepaid, return receipt requested, and addressed as follows:
  

	 If to Maker:
 	  
 	 Healthcare Holdings, Inc.
 22917 Pacific Coast Hwy, Suite 350
 Malibu, California 90265

Attention: Chief Financial Officer
 
	  
 	  
 	  
 
	 with a copy to:
 	  
 	 Healthcare Holdings, Inc
 22917 Pacific Coast Hwy, Suite 350
 Malibu, California 90265
 Attention: Legal Department
 
	  
 	  
 	  
 
	 If to Parent:
 	  
 	 CLC Healthcare, Inc.
 7610 N. Stemmons Fwy, Suite 500
 Dallas, Texas 75247
 Attention: Chief Financial Officer
 
	  
 	  
 	  
 
	 If to Payee:
 	  
 	 LTC Properties, Inc.
 22917 Pacific Coast Hwy, Suite 350
 Malibu, California 90265
 Attention: Chief Financial Officer
 
	  
 	  
 	  
 
	 with a copy to:
 	  
 	 LTC Properties, Inc.
 22917 Pacific Coast Hwy, Suite 350
 Malibu, California 90265
 Attention: Legal Department
 

 or such other address as either party may from time to time specify in writing to the other in the
manner aforesaid. If personally delivered, such notices or other communications shall be deemed delivered upon delivery. If sent by United States mail, registered or certified mail, postage prepaid, return receipt requested, such notices or other
communications shall be deemed delivered upon delivery or refusal to accept delivery as indicated on the return receipt.
 [SIGNATURE PAGE FOLLOWS]

5

  IN WITNESS WHEREOF, the Maker has caused this Note to be executed as of the date first above
written.
   

	  
 	  
 	 MAKER:
 
 HEALTHCARE HOLDINGS, INC.,
 a Nevada corporation
 
	 
 
 
 	  
 	 By: 
 	 
 
 /s/ KIMBERLY DAUGHERTY
 
	  
 	  
 	  
 	 
 
	  
 	  
 	 Name: 
 	 Kimberly Daugherty
 
	  
 	  
 	 Its: 
 	 Senior Vice President
 
	  
 	  
 	  
 	  
 
	  
 	  
 	 PARENT:
 
 CLC HEALTHCARE, INC.,
 a Nevada corporation
 
	  
 	  
 	 By: 
 	 
 
 /s/ ANDREW KERR
 
	  
 	  
 	  
 	 
 
	  
 	  
 	 Name: 
 	 Andrew Kerr
 
	  
 	  
 	 Its: 
 	 Chief Financial Officer
 
					

 
6

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