ex10_281.htm


    
      

    

    Exhibit
      10.28.1

     

    
      
        AMENDED
AND
          RESTATED LEASE
          AGREEMENT

      

      
        


      

      
        THIS
          AMENDED AND RESTATED LEASE AGREEMENT (the “Lease”) is made and entered into as
          of the 1st day of November, 1994,  by and between ALHAMBRAI ROYALE, a
          California limited partnership (hereinafter referred to
          as  “Landlord”) and JERRY AGAM, an individual, and PACIFICA MANOR,
          INC., a California corporation (hereinafter collectively referred to as
          “Tenant”), and is made with reference to the following facts and
          objectives:

      

      
        


      

      
        A.  Landlord
          and Tenant have heretofore entered into a Lease Agreement,
          dated
          May 1, 1987, for the
          Premises; which prior Lease Agreement
          was
          amended by that certain Amendment of Lease Agreement,
          dated
          October 16, 1989 (the prior Lease Agreement, as thus amended,
          is
          hereinafter collectively referred to as the “Prior Lease”). The parties
          desire to fully amend and restate the Prior Lease
          with this Lease;
          and, upon execution of this Lease, the Prior Lease shall be
          terminated and of no further force and effect.

      

      
        


      

      
        B.  Landlord
          owns the “Premises” hereinafter described, together with
          the
          fixtures and equipment therein.

      

      
        


      

      
        C.  Tenant
          is experienced in the management and operation of
          residential care facilities for the elderly [as defined in California
          Health and Safety Code, Division 22, Chapter 23.2,
          S1569.2].

      

      
        


      

      
        D.  Tenant
          desires to lease the Premises and personal property from
          Landlord
          pursuant to the provisions of this Lease, for the purpose
          of
          operating a residential care facility for the elderly.

      

      
        


      

      
        E.  Landlord
          is entering into this Lease in reliance upon the particular
          skills, knowledge and experience of Tenant in the operation
          of 
residential care facilities for the elderly.

      

      
        


      

      
        NOW,
          THEREFORE, for and in consideration of the forego­ing Recitals and the
          terms, covenants and conditions of this Lease, and for good and valuable
          consideration, the sufficiency of which is acknowledged by all parties,
          the
          parties agree as follows:

      

      
        


      

      
        
          	
                	
                  1.

                	
                  PREMISES

                


        

      

      
        


      

      
           
          Subject to the terms and conditions of this Lease, Landlord hereby leases
          to
          Tenant, and Tenant hereby leases from Landlord, that certain real property
          described in Exhibit “A” attached hereto, which is improved with and currently
          licensed and operating as a one hundred seventy-four (174) bed residential
          care
          facility for the elderly, and certain personal property located thereon,
          or
          hereafter located thereon (collectively, the “Premises”). The Premises is
          located at 1 East Commonwealth, Alhambra, Los Angeles County, California,
          and is
          commonly known as Alhambra Gardens.

      

      
         

        
          	
                	
                  2.

                	
                  TERM

                


        

      

      
         

          
          The term of this Lease (the “Term”) shall be for seventeen (17) years and six
          (6) months, commencing on November 1, 1994, and terminating on April 30,
          2012.

      

      
        


      

      
        
          	
                	
                  3.

                	
                  RENT

                


        

      

      
        


      

      
        3.1 
          Tenant shall pay to Landlord a monthly rent during each month of the Term,
          without deduction, setoff, prior notice or demand, as
          follows:

      

      
        


      

      
        3.1.1    Subject
          to Section 3.2 below, the monthly rent for the initial two (2) years and
          six (6)
          months of the Term, through April 30, 1997, shall be Twenty-Nine Thousand
          Nine
          Hundred Twenty Dollars ($29,920.00).

      

      
        


      

      
        3.1.2    
          Commencing  on  May 1, 1997, and thereafter on the yearly
          anniversary date of such date throughout the remainder of the Term, the
          monthly
          rental shall increase, but never decrease, as calculated on the basis of
          the
          Consumer Price Index, All Urban Wage Earners and Clerical Workers, All
          Items,
          published by the U. S.
Department of
          labor.
Bureau of Statistics
          for the Los Angeles/Long Beach/Anaheim Metropolitan
          Area (the “Index”), as follows:

      

      
        


      

      
        	
                 

              	
                (a)
                  The Index published as of April 1, 1996, shall be considered the
“Base
                  Index”;

              


      

      
        


      

      
        	
                 

              	
                (b)
                  The monthly rental shall be adjusted upward, but not downward,
                  by an
                  amount equal to sixty percent (60%) of the increase, if any, in
                  the Index
                  as of the last month prior to such adjustment over the Base Index
                  (for
                  instance, for the adjustment to occur on May 1, 1997, the Base
                  Index would
                  be compared to the Index for April 1, 1997); provided, however,
                  the
                  monthly rent shall not increase in any lease year by more than
                  four
                  percent (4%) nor less than two and one-half percent
                  (2-1/2%).

              


      

      
        


        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

      
         

        If
          at the
          time of any such adjustment of the monthly rental, the Index shall not
          exist in
          the same format described above, the Landlord shall reasonably substitute
          any
          official index published by the Bureau of Labor Statistics, or successor
          agency,
          as may then be in existence and most nearly equivalent
          thereto.

      

      
        


      

      
        3.2  The
          parties agree that the monthly rant for the initial one (1)
          month
          of the Term, due November 1, 1994, shall be deferred; that
          is, not
          payable on its usual due date, but rather paid to Landlord
          in
          sixty (60) monthly payments of Four Hundred Ninety-Nine Dollars
          ($499.00) each, commencing on January 1, 1995, and ending with
          the
          payment on December l, 1999. Each such payment shall be deemed
          additional rent, in addition to monthly rent and all other sums
          due
          under this Lease.  Tenant covenants that it shall expend
          such
          deferred rent amount for capital improvements to the Premises;
          which
          expenditures shall be approved in advanced by Landlord in its
          reasonable discretion and shall be accounted for in writing by Tenant
          to
          Landlord.  This one time deferral shall include only
          the
          deferral of the monthly rent, not the deferral of additional rent,
          impound payments or other sums due under this Lease for November
          l,
          1994 or any other date.

      

      
        


      

      
        3.3  The
          monthly rent is due and payable on the first (1st) day
          of each
          month, commencing on the first (1st) day of the month in
          which the
          Term commences. If the Term commences on a day other than
          the
          first (1st) day of a month, monthly rent for such partial
          month
          shall be prorated at the rate of l/30th of the monthly rent per
          day.

      

      
        


      

      
        3.4  All
          rent shall be paid to Landlord at 5150 Overland Avenue,
          Culver
          City, California 90230,  or at such other address as may
          be
          designated by Landlord from time to time in writing to
          Tenant.

      

      
        


      

      
        3.5  Tenant
          acknowledges that late payment by Tenant to Landlord of
          rent
          will cause Landlord to incur costs net contemplated
          by this
          Lease, the exact amount of such costs being extremely difficult
          and
          impracticable to fix. Such costs include, without limitation,
          processing and accounting charges, and late charges that may be imposed
          on
          Landlord by the terms of any encumbrance(s)
          affecting the Premises. Therefore, if any installment of rent is not received
          by
          landlord within ten (10) days after its due date, Tenant shall pay to Landlord
          an additional sum equal to five percent (5%) of the overdue rent as a late
          charge. The parties agree that this late charge represents a fair and reasonable
          estimate of the costs that Landlord will incur by reason of late payment
          by
          Tenant. Acceptance of any late charge shall not constitute a waiver of
          Tenant’s
          default with respect to the overdue amount, nor prevent Landlord from exercising
          any of the other
          rights and remedies available to Landlord hereunder, at law or in
          equity.

      

      
        


      

      
        3.6 The
          monthly rent
          provided in this Lease shall be in addition to all other payments to be
          made by
          Tenant as provided herein. It is the purpose and intent of Landlord and
          Tenant
          that the Monthly rent provided herein shall be absolutely net to Landlord,
          so
          that this Lease shall yield net to Landlord the monthly rent specified
          in this
          Lease in each month during the Term. Except as otherwise expressly provided
          herein, Landlord shall, have no obligation or Liability to pay any amounts
          in
          connection with the ownership, operation and/or management of the Premises,
          or
          any part thereof, whether for real or personal property taxes, or insurance
          premiums of any kind, or maintenance or
          costs of
          repair of any kind, including structural or exterior maintenance, or license
          fees. Excluding encumbrances for which Landlord is liable, if any, all
          costs and
          expenses including, without limitation, taxes, assessments, insurance premiums,
          utilities, maintenance and repair (capital and ordinary), restore, license
          fees
          and obligations of every kind and nature whatsoever relating to the use
          and/or
          management of the Premises by Tenant which may accrue or become due during
          or
          out of the Term shall be paid by Tenant and Landlord shall be indemnified
          and
          saved harmless by Tenant from and against the same.

      

      
        


      

      
        4.  REAL
          ESTATE AND
          PERSONAL  PROPERTY  TAXES

      

      
        


      

      
        In
          addition to all rentals herein reserved, the Tenant shall pay the real
          estate
          taxes, levies and assessments imposed, levied upon or assessed against
          the
          Premises for each year of the Term. Said
          taxes
          shall be payable in full within thirty (30) days after receipt by Tenant
          of a
          statement in writing from Landlord setting forth the amount of taxes and
          assessments due under this Section. The term “real estate taxes” as used herein
          shall be deemed to mean all taxes imposed upon the real property and permanent
          improvements, and all assessments levied against the Premises, but shall
          not
          include personal income taxes, inheritance taxes or franchise taxes levied
          against the Landlord.

      

      
        


      

      
        During
          the Term, Tenant shall pay, prior to delinquency, all taxes assessed against
          and
          levied upon fixtures, furnishings, equipment and all other personal property
          contained in the Premises.

      

      
        


      

      
        Upon
          the
          commencement of the Term, an impound account for the payment of real estate
          taxes shall be established and maintained by Landlord, as set forth below.
          Concurrent with each payment of monthly rental and in addition thereto,
          Tenant
          shall pay to Landlord’s a sum (the “Funds”) equal to one-twelfth (1/12)
          of
          the yearly real estate taxes and assessments, as may be adjusted from time
          to
          time. Any funds received by Landlord shall be held in an institution chosen
          by
          Landlord, in its sole discretion, provided the deposits of which are insured
          by
          a federal or state agency. Landlord shall be permitted to commingls the
          Funds
          with its own funds or the funds of other tenants of Landlord, as Landlord
          shall
          determine in its sole discretion. Landlord shall apply the Funds to pay
          the real
          estate taxes for the Premises; provided Landlord shall only be obligated
          to make
          such payment of Funds to the extent that Tenant pays the Funds to Landlord.
          Landlord shall not charge for the holding or handling of Funds. Landlord
          shall
          pay interest on the Funds actually held by Landlord based upon a rate equal
          to
          the then-existing average interest rate for thirty (30) day certificates
          of
          deposit as published by the Wall Street Journal. The
          prompt
          payment of the Funds shall be a material covenant of Tenant under this
          Leasea,  and shall constitute additional rent hereunder. Landlord
          shall provide to Tenant an annual accounting of the Funds showing
          credits and debits to the Funds and the purpose for which each debit to
          the
          Funds was made. If the amount of the Funds held by Landlord, together with
          the
          future monthly installments of Funds payable prior to the due dates of
          real
          estate taxes, shall exceed the amount required to pay said real estate
          taxes as
          they fall due, at Landlord’s option, such excess shall either be repaid to
          Tenant or credited to Tenant on monthly installments of Funds. If the
          amount of
          the Funds held by Landlord shall be insufficient to pay real estate taxes,
          as
          they fall due, Tenant shall immediately pay to Landlord any amount necessary
          to
          make up the deficiency in one or more payments, as Landlord may require.
          In the
          event that the Premises is transferred by Landlord to another party, which
          transfer results in an increase in the real estate taxes, Tenant shall
          not be
          responsible for the payment of such additional real estate taxes.
          Notwithstanding the foregoing, the initial impound payments by Tenant,
          commencing November 1, 1994, shall be utilized for the second (2nd) installment
          payment of real estate taxes for 1994-95, and, in addition thereto, Tenant
          shall
          be responsible for the timely payment of the first (1st) installment payment
          of
          real estate taxes for 1994-95 directly to the applicable
          taxing-agency.

      

      
        


        
          
            
            

          

          
            2

            
              

            

          

          
            
            

          

        

      

      
         

        5.
USE

      

      
        


      

      
        5.1  Tenant
          shall use the facility for a residential care facility
          for the
          elderly, and for no other use without Landlord’s
prior
          written consent,
          which may be withheld in Landlord’s sole
          discretion.

      

      
        


      

      
        5.2  Tenant’s
          use of the Premises as provided in this Lease shall be in accordance with
          the
          following:

      

      
        


      

      
        5.2.1  Tenant
          shall not do, bring or keep anything in, or about the Premises that will
          cause a
          cancellation of any insurance covering the Premises, and Tenant shall comply
          with all requirements imposed by any such insurance company.

      

      
        


      

      
        5.2.2  Tenant
          shall cause the Premises to be and remain licensed and certified by the
          applicable state and/or local governmental agencies as a licensed residential
          care facility for the elderly, and shall maintain such license(s)  and
          certifications during the Term. At Tenant’s sole expense, Tenant shall cause the
          Premises to conform to the requirements and provisions as the licensed
          facility
          including, without limitation, the obligation at Tenant’s sole cost to alter,
          maintain, replace or restore the Premises or any part thereof in compliance
          and
          conformity with all laws relating to the condition, use or occupancy of
          the
          Premises as the licensed facility during the Term.

      

      
        


      

      
        5.2.3  Tenant
          shall not use the Premises in any manner that will
          constitute waste, nuisance to the Premises, or cause unreasonable annoyance
          to
          owners or occupants of adjacent properties.

      

      
        


      

      
        5.2.4  Tenant
          shall not do anything on the Premises that will cause damage to the Premises
          or
          any part thereof. No machinery, apparatus or other appliance shall be used
          or
          operated in, on or about the Premises that will in any manner injure the
          Premises or any part thereof.

      

      
        


      

      
        5.2.5  Tenant
          shall pay all payrolls promptly when due respecting all personnel at the
          Premises and shall file all governmental reports required pursuant thereto
          (including, without limitation, payroll tax returns), and shall pay such
          taxes
          promptly and before delinquency.

      

      
        


      

      
        5.2.6 Tenant
          shall not
          release, use, generate, manufacture, store or dispose of on, under or about
          the
          Premises or transfer to or from the Premises any flammable explosives,
          radioactive materials, hazardous wastes, toxic substances or related materials
          (collectively “hazardous substances”). There is excluded from this prohibition
          hazardous substances of the type commonly used in residential care facilities
          for the elderly in California, subject to the condition that they are used,
          stored, and disposed of in accordance with applicable laws.  As used
          in this Lease, hazardous substances shall include, but not be limited to,
          substances defined as “hazardous substances,” “hazardous
          materials,” or  “toxic  substances”  in  the  Comprehensive
          Environmental Response, Compensation and Liability Act of 1980, as amended,
          42
          U.S.C. Section 9601, et seq.; the Hazardous Materials Transportation Act,
          49 U.S.C. Section
          1801, et seq.; the Resource conservation and recovery Act, 42 U.S.C. Section
          5901, et seq.; the Clean Water Act, 33 U.S.C. Section 466 et seq.; the
          Safe
          Drinking Water Act, 14 U.S.C. Section 1401, et seq.; the Superfund Amendment
          and
          Reauthorization Act of 1986, Public Law 99-499, 100 Stat. 1613; the Toxic
          Substances Control Act, 15 U.S.C. Section 7401, et seq., as amended; the
          Clean
          Air Act, 42 U.S.C. Section 7401, et seq.; the Occupational Safety and Health
          Act
          (“OSHA, 29 U.S.C. Section 651, et a seq.; California Environmental Quality
          Act,
          Pub. Res. Code Section  21000, et seq.; Carpenter Presley-Tanner
          Hazardous Substance Account Act, Health and Safety Code Section 25300,
          et seq.;
          Hazardous Waste Control Law, Health and Safety Code Section 25100, et seq.;
          Porter-cologne Water Quality Control Act, Water Code Section 13000, at
          seq.;
          Hazardous Waste Disposal Land Use Law, Health and Safety Code Section 25220,
          et
          seq.; Safe Drinking Water and Toxic Enforcement Act of 1986 (“Prop 65”), Health
          and Safety Code Section 25249.5, et seq.; Hazardous Substances Underground
          Storage Tank Law, Health and Safety Code Section 25280, et seq.; Air Resources
          Law, Health and Safety Code Section 39000, et seq., Hazardous Materials
          Release
          Response Plans and Inventory, Health and Safety Code Sections 25500-25541;
          Toxic
          Pits Cleanup Act, Health and Safety Code Section 25208, et seq.; and those
          materials and substances of a similar nature regulated or restricted under
          any
          other laws of the United States, the state of California or any other
          governmental agency having jurisdiction over the premises now existing
          or
          hereafter adopted, and in regulations adopted and publications promulgated
          pursuant to said laws.

      

      
        


      

      
        5.2.7  Tenant
          shall comply with, and the leasehold created by this Lease is subject to,
          all
          covenants, conditions, restrictions, easements and rights of way affecting
          the
          Premises.

      

      
        


        
          
            
            

          

          
            3

            
              

            

          

          
            
            

          

        

      

      
        5.2.8  Tenant
          shall furnish any bond which may be required by law in connection with
          residents’ trust funds and the accounting therefore. Tenant shall be fully
          responsible for such trust funds, and agrees to indemnify and hold harmless
          Landlord from any lass regarding same.

      

      
        


      

      
        6.
ALTERATIONS

      

      
        


      

      
        Tenant
          shall not make, or suffer to be made, any alterations of the Premises,
          or any
          part thereof, without the prior written consent of Landlord, and any additions
          to, or alterations of the Premises, except movable furniture and trade
          fixtures,
          shall become at once a part of the realty and belong to
          Landlord.

      

      
        


      

      
        7.
MAINTENANCE
AND
          REPAIRS

      

      
        


      

      
        7.1
          Except as provided in Section 7.2 below, Tenant shall, during the Term,
          at its
          sale cost and expense, keep in good repair and maintain the entire Premises
          in
          good, clean working order, condition and repair including, without limitation,
          the structural portions of the building and improvements thereon, the
          interior and exterior thereof, plate glass, wiring, plumbing, heat and
          air
          conditioning units, the parking and service areas, the landscaping, the
          approaches thereto and appurtanances thereof, including all adjacent sidewalks
          and allays, Except as provided in section 7. 2 below, Tenant's obligation
          to
          maintain the Premises shall specifically include, without limitation, the
          obligation to make any and all repairs and to repaint and/or re-stain all
          painted areas as required. Landlord shall not have any responsibility to
          maintain the Premises or any part thereof including, without limitation,
          any
          structural maintenance, repair, replacement or restoration. Tenant waives
          all
          rights under any laws which may provide for Tenant's right to make repairs
          and
          to than deduct from rents the expenses of such repairs.

      

      
        


      

      
        7.2  Except
          as provided in Section 7.3 below. Landlord shall,
          during
          the Term, at its sole cost and expense, keep in good repair
          and
          maintain the roof and exterior surface of the Premises
          in good
          condition and repair. Landlord’s obligations for maintenance and
          repair
          shall be limited to the particular obligations of
          this
          Section 7.2; all other maintenance and repair obligations relating
          to
          the Promises shall belong to Tenant under Section 7.1 above.
          Landlord’s obligation to maintain the exterior surface of the
          Premises
          shall include, without limitation, the obligation to
          make any
          and all repairs and to repaint and/or restain, as applicable,
          the painted portions of the exterior surface.  Upon
          the occurrence of the events described
          in
          Section 7.3 below,
          all obligations of Landlord hereunder shall shift to Tenant.  In
          the event that Tenant becomes aware of the need to repair the roof
          and/or
          exterior surface of the Premises (prior to the assumption
          by
          Tenant of the responsibility for maintenances of the roof pursuant
          to
          Section 7.3 below), Tenant shall notify Landlord in writing
          of
          the specific details of such need (a).  In the event that
          Landlord
          fails to repair, or commence to repair (and prosecutes diligently
          to completion), such needs within ten (10) days after receipt
          of
          the written notice, and damages are thereafter suffered
          to
          the Premises and/or Tenant’s personal property as the
          direct
          and consequential result of such failure to repair, then
          Landlord
          shall be liable to Tenant for the amount of such damages
          which
          exceed Tenant’s recovery of insurance proceeds for such damage.
          Such
          damage shall be subject to reasonable proof and verification
          being
          provided to Landlord. The foregoing shall represent Landlord’s
          only potential area of liability for maintenance and
          repair
          of the Premises under this Lease.

      

      
        


      

      
        7.3  Landlord
          shall have the option, in its sole discretion and
          at its
          sole cost and expense, to re-roof the Premises and/or
          to
          repaint the exterior of the Premises. In the event that Landlord
          causes such work to be performed during the Term, then immediately
          thereafter and throughout the remainder of the Term, Tenant
          shall
          assume, at its sole coat and expense, the obligation to
          keep in
          good repair and maintain the roof and/ or the exterior surface
          of the
          Premises, respectively, along with and in comparable condition
          with other portions of the Premises as required of Tenant
          in
          Section 7.1 above. upon such assumption: (a) Landlord’s obligation
          to repair and maintain the roof and/or exterior surface
          of the
          premises under Section 7.2 above shall cease and terminate
          and
          (b) Landlord shall cause to be assigned to Tenant any applicable
          warranty for all the new roof.

      

      
        


      

      
        7.4  Tenant
          shall, at its sole cost and expense, during the Term, keep and maintain
          all the
          personal property including furniture, fixtures and equipment, in good
          working
          order, condition and rapair. Tenant shall have the right to install on
          the
          Premises any and all equipment and fixtures which Tenant desires to install
          thereon and which are necessary or convenient to Tenant’s use of the premises as
          permitted herein; without the consent of Landlord. All such property so
          installed by Tenant shall remain Tenant’s property (other than replacements for
          personal property as provided below) and, provided Tenant is not in default
          hereunder, may be removed by Tenant as provided in this Lease. Tenant shall
          not
          remove any personal property owned by Landlord which was leased to Tenant
          as
          part of the Premises and/or replacements thereof or any part thereof from
          the
          Premises, without the prior written consent or Landlord. Tenant shall purchase
          and replace with substitutes of equal or higher quality any worn out or
          broken
          items of personal
          property required to be on the Premises for continued licensing and/or
          certification as the same may occur from time to time throughout the Term
          at
          Tenant’s sole cost, and expense.
          Such items
          being replaced by Tenant shall become the property of Landlord. Tenant
          agrees,
          upon written request from Landlord, to execute any and all documents necessary
          to assist Landlord to fully evidence Landlord’s ownership of the personal
          property.

      

      
        


      

      
        7.5  Tenant
          shall, throughout the Term of this Lease, make all
          repairs, alterations, replacements and additions to the Premises
          required
          by law and/or as necessary to obtain and maintain licensing
          and
          certification as a licensed residential car facility for
          the
          elderly.

      

      
        


      

      
        7.6  By
          entering upon the Premises, Tenant shall be deemed to have
          accepted
          the Premises as being in good and sanitary order, condition
          and
          repair.

      

      
        


        
          
            
            

          

          
            4

            
              

            

          

          
            
            

          

        

      

      
         

        8.  COMPLIANCE
          WITH LAWS

      

      
        


      

      
        Tenant
          shall, at his sole cost and expense, comply with all of the requirements
          of all
          municipal, state and federal authorities now in force or which may hereafter
          be
          in force pertaining to the use of the Premises, and shall faithfully observe
          in
          said use all municipal ordinances and State and Federal statutes now in
          force or
          which shall hereinafter be in fores. The judgment of any court of competent
          jurisdiction, the ruling of any administrative proceeding, or the admission
          of
          Tenant, in any action, or proceeding against Tenant, Whether Landlord be
          a party
          thereto or not, that Tenant has violated any such regulation, order or
          statute
          in said use, shall be conclusive of that fact as between the Landlord and
          Tenant. It is agreed and understood by and between Landlord and Tenant
          that, in
          order to conduct the business proposed far the Premises, the Stats of California
          shall issue and be responsible for renewing a license to allow Tenant to
          conduct
          a residential care facility for the elderly. In the event of the cancellation
          or
          rescinding of said license, Tenant agrees that this action shall constitute
          a
          material default under this Lease.

      

      
        


      

      
        9.
 INDEMNIFICATION
          OF
          LANDLORD

      

      
        


      

      
        Tenant,
          as a material part of the consideration to be rendered to Landlord under
          this
          Lease, hereby waives and releases all claims against Landlord for damage
          to
          personal property in, upon or about the Premises and for injuries to any
          and all
          persons in or about the Premises, from any cause arising at any
          time.

      

      
        


      

      
        Tenant
          hereby agrees to indemnify and hold harmless Landlord and its partners,
          agents,
          successors, heirs and assigns from and against any and all damage or injury
          to
          any person, or personal property of any person, arising from the use of
          the
          Premises by Tenant, or from the failure of Tenant to keep the Premises
          in good
          condition and repair as herein provided.

      

      
        


      

      
        Except
          as
          provided in Sections 10.3 and 10.4 below, Tenant furthermore agrees to
          indemnify
          and hold harmless Landlord and its partners, agents, successors, heirs
          and
          assigns from and against any and all from and against any and all loss,
          damages,
          claims, causes of action and/or awards incurred, directly or indirectly,
          by
          reason of any damage to the Premises, any personal property thereon or
          any
          person during the Term for any reason,  other than the intentionally
          tortious conduct of Landlord.

      

      
        


      

      
        10.  INSURANCE

      

      
        


      

      
        10.1    During
          the entire Term, the Tenant shall, at its sole cost
          and
          expense, but for the mutual benefit of Landlordand Tenant, maintain general
          public liability insurance against claims for personal
          injury, death, or property damage occurring in, upon or about
          the
          Premises and on any sidewalks directly adjacent to the
          Premises.  The limitation of liability of
          such
          insurance shall be
          not less than One Million Dollars ($1,000,000) in respect to injury or
          death. of
          one person and to the limit of not less than Two Million Dollars
          ($2,000,000.00) in respect to any one accident and to the limit
          of not
          less than Five Hundred Thousand Dollars ($500,000.00]
          in
          respect to property damage. All such policies of insurance shall
          be
          issued in the name of Tenant and Landlord and for the mutual
          and
          joint benefit and protection of the parties, and such policies
          of
          insurance or copies thereof shall be delivered to the Landlord.
          Each
          insurance policy shall provide that such policy cannot be canceled,
          modified or reduced in scope without thirty (30) days’ prior
          written notice to Landlord and to any superior lessor, mortgagee
          or
          trust deed holder of whom the insurer has been notified in
          writing.

      

      
        


      

      
        10.2     During
          the entire term. Tenant shall, at its cost and expense,
          maintain fire a and extended coverage insurance throughout the
          Term of
          this Lease in an amount equal to the replacement value
          of
          the Premises (exclusive of foundation and excavation costs)
          of
          the building and improvements
          hereby
          demised, as
          determined by Landlord in its sole discretion, The proceeds of said policy shall
          be
          payable to Landlord and Tenant as their respective interests
          may appear. Tenant agrees that upon Landlord’s request, it
          will procure a mortgagee’s loss payable endorsement to
          said
          policy, provided that any policy proceeds paid to such mortgagee
          shall
          be available for reconstruction in accordance with
          the
          terms of this Lease. It is further understood and agreed that
          Tenant
          hereby waives any right of recovery from Landlord, its
          officers
          or employees for any loss or damage (including
          consequential loss resulting from any of the perils insured against
          in the
          standard form fire insurance policy with extended coverage
          endorsement.

      

      
        


      

      
        10.3     In
          the event that the Premises are damaged or destroyed by
          fire or
          other casualty, but the Premises not thereby rendered untenantable
          in whole or in part, Landlord shall cause such damage or
          destruction to be repaired at its own cost and expense (in excess
          of
          any insurance proceeds paid pursuant to such damage or destruction),
          and the monthly rent provided herein shall not be abated
          during
          the repair period as to any portion of the Premises.  The
          cost of any repairs required as the result of the negligence of
          Tenant
          shall be paid by Tenant.

      

      
         

      

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

      
        


      

      
        10.4     In
          the event that the premises are damaged or destroyed by
          fire or
          other casualty, and the Premises shall be rendered untenantable
          either in whole or in part, Landlord shall have the option
          to
          repair the damage and destruction at its coat and expense (in
          excess
          of any insurance proceeds thereof), in which case the monthly
          rent
          provided hereunder shall not be abated during the repair period
          as to
          any portion of the Premises, including, without limitation,
          the
          portion rendered untenantable. Landlord may, however,
          in the
          event of any damage or destruction, and at Landlord’s election,
          terminate this Lease by giving Tenant written notice of Landlord’s
          election within sixty (60) days following the date of such
          damage or
          destruction, and in such event this Lease shall terminate
          on the
          data of such notice and rent shall be prorated as of
          the data
          of expiration of coverage under the business interruption
          insurance in place. The cost of any repairs required as a
          result of
          the negligence of Tenant shall be paid by Tenant. to the
          extent applicable, Tenant hereby waives  any provisions of the
          California civil coda with respect to any damage to, or destruction of, the Premises
          or the
          building in which the Premises are located, the rights of Tenant in the
          case of
          any such, case of any such damage or destruction being governed by the
          provisions of this Lease.

      

      
        


      

      
        10.5      during
          the entire Term, Tenant, at its sold cost and expense, shall maintain business
          interruption insurance or loss of income insurance for a coverage period
          satisfactory to Landlord, but not less than six (6) months. Landlord shall
          be
          named in such policy as the irrevocable assignee of all proceeds of such
          policy.

      

      
        


      

      
        11.  ASSIGNMENT
AND  SUBLETTING

      

      
        


      

      
         Tenant
          shall not assign this Lease, or any interest therein, and shall not sublet
          the
          Premises, or any part thereof, or any right or privilege appurtenant thereto,
          or
          permit any other person (the agents and servants of Tenant excepted) to
          occupy
          or use the Premises, or any portion thereof, without first obtaining the
          written
          consent of Landlord, which consent may be withheld in the sole discretion
          of
          Landlord. Consent by Landlord to one assignment, subletting, occupation
          or use
          by another person shall not be deemed to be a consent to any subsequent
          assignment, subletting, occupation or use by another person. Consent to
          an
          assignment, subletting, occupation or use by another person shall not release
          the original named Tenant from liability for the continued performance
          of the
          terms and provisions on the part of Tenant to be kept and performed, unless
          Landlord specifically and in writing releases the original named Tenant
          from
          said liability. Any assignment or subletting without the prior written
          consent
          of Landlord shall be void and shall, at option of Landlord, terminate this
          Lease. Tenant may not assign this Lease, or any interest therein, by operation
          of law, without the prior written consent of Landlord, which consent shall
          not
          be unreasonably withheld.

      

      
        


      

      
        12.  DEFAULT

      

      
        


      

      
        In
          the
          event of any breach of this Lease by Tenant the Landlord shall notify the
          Tenant
          in writing of such breach, and Tenant shall have ten (10) days in which
          to cure
          any such breach as to payments of rent or other sums due hereunder, and
          thirty
          (30) days to cure any other breach and if: Tenant shall fail to cure such
          breach
          or default within such time limit, then Landlord, besides other rights
          or
          remedies Landlord may have, shall have the immediate right of reentry and
          may
          remove all persons and property from the Premises, and such property may
          be
          removed and stored in a public warehouse or elsewhere at the cost of and
          for the
          account of Tenant. Should Landlord elect to raentar, as herein provided,
          or
          should Landlord take possession pursuant to legal proceedings or pursuant
          to any
          notice provided for by law. Landlord may either terminate this Lease or
          may from
          time to time, without terminating this Lease, relet the Premises, or any
          part
          thereof, for such term or terms and at such rental or rentals and upon
          such
          other terns and conditions as Landlord in his sole discretion may deem
          advisable, with the right to make alterations and repairs to said premises.
          Upon
          such reletting: (a) Tenant shall be immediately liable to pay to Landlord,
          in
          addition to any indebtedness other than rent due hereunder, the cost and
          expenses of such reletting and of such alteration and repair, incurred
          by
          Landlord, and the amount, if any, by which the rent reserved in this Lease
          for
          the period of such reletting up to but not beyond  Term, exceeds the
          amount agreed to be paid as rent for the demised premises for such period
          of
          such reletting or (b) At the option of Landlord, rents received by such
          Landlord
          from such reletting shall be applied as follows: First, to the payment
          of any
          indebtedness, other than rent, due hereunder from Tenant to Landlord; Second,
          to
          the payment of any costs and expenses of such reletting and of such alterations
          and repairs; Third, to the payment of rent due and unpaid hereunder; and
          the
          residue, if any, shall be held by Landlord and applied in payment of future
          rent
          as the same may become due and payable hereunder. If Tenant has been
          credited with any
          rent to be received by such reletting under option (a), and such rent shall
          not
          be promptly paid to Landlord by:the new Tenant, or if such rentals received
          from
          reletting under option (b) during any month be less than that to be paid
          during
          that month by Tenant hereunder, Tenant shall pay any such deficiency to
          Landlord. Such deficiency shall be calculated and paid monthly. No such
          reentry
          or taking possession of the Premises by Landlord shall be construed as
          an
          election on Landlord’s part to terminate this Lease unless a written notice of
          such intantion be given to Tenant or unless the termination thereof be
          dacreed
          by a court of competent jurisdiction. Notwithstanding any re-letting without
          termination, Landlord may at any time thereafter elect to terminate this
          Lease
          for such previous breach. Should Landlord at any time elect to terminate
          this
          Lease for any breach, in addition to any other remedies ha may have, Landlord
          may recover from Tenant all damages incurred by Landlord by reason of such
          breach, including the cost of recovering the premises, and including the
          worth
          at the time of such termination of the excess, if any, of the amount of rent and charges
          equivalent to rent reserved in this Lease for the remainder of the stated
          term
          of this Lease over the than reasonable rental value of the premises for
          the
          remainder of the stated term, all of which amounts shall be immediately
          due and
          payable from Tenant to Landlord.

      

      
        


        
          
            
            

          

          
            6

            
              

            

          

          
            
            

          

        

      

      
         

        In
          addition to all other rights created herein upon any default under this
          Lease by
          Tenant, It is expressly agreed that: (a) a default under this Lease shall
          also
          constitute a default under all of the Other Leases (as defined below) entered
          into between Landlord and its related affiliates, on one hand, and Tenant,
          on
          the other hand, shall constitute a default in each and all of the Other
          Leases
          and allow Landlord to exercise all remedied provided in each of the Other
          Leases, and (b) a default under any or all of the Other Leases shall constitute
          a default under this Lease and shall allow Landlord to exercise all remedies
          provided for Tenant’s default under this Lease. The “Other Leases” ‘shall mean
          and refer to the following; (i) the Amended and Restated Lease Agreement,
          dated
          November 1, 1994, between Clairamont Royale and Tenant for the premises
          at 5219
          Clairemont Masa Boulevard, San Diego, California; (ii) the Amended and
          Restated
          Lease Agreement, dated November 1, 1994, between Channel Islands Royale
          and
          Tenant for the premises at 1020 Bismark Way, oxnard, California; (iii)
          the
          Amended and Restated Lease Agreement, dated November 1, 1994, between
          Northridge Royale and Tenant for the premises at 17300 Roscoe Boulevard,
          Northridge, California; and (iv) the Amended and Restated Lease Agreement
          dated
          November 1, 1994, between Chatsworth Royale and Tenant for the premises
          at 20801
          Devonshire Street, Chatsworth, California.

      

      
        


      

      
        13.  FREE  FROM  LIENS

      

      
        


      

      
        Tenant
          shall keep the3 Premises free from any liens arising out of any work performed,
          material furnished, or obligation incurred by Tenant.

      

      
        


      

      
        14.  ABANDONMENT

      

      
        


      

      
        Tenant
          shall not vacate or abandon the Premises at any time during the Term; and
          if
          Tenant shall abandon, vacate or surrender the Premises or be dispossessed
          by
          procase of law, or otherwise, any personal property belonging to Tenant
          and left
          on the Premises shall be deemed to be abandoned, at the option of Landlord,
          except such property as may be mortgaged to Landlord.

      

      
        


      

      
        15.  SIGNS;
          AUCTIONS

      

      
        


      

      
        The
          Tenant may affix and maintain upon the exterior (including those parts
          of the
          interior visible from the exterior) of the building only such signs,
          advertising, placards, names, insignia, trademarks and descriptive material
          as
          shall have first received the written approval of the Landlord as to size,
          type,
          color, location, copy, nature and display qualities and
          which are
          in conformity with municipal ordinances. Anything to the contrary, in this
          Lease
          notwithstanding, Tenant shall not affix any sign to the roof of the
          building.

      

      
        


      

      
        Tenant
          shall not conduct or permit to be conducted in, from or upon the Premises
          any
          sale by auction, whether such auction be voluntary, involuntary, pursuant
          to any
          assignment for the payment of creditors or pursuant to any bankruptcy or
          other
          insolvency proceeding.

      

      
        


      

      
        16.  UTILITIES

      

      
        


      

      
        Tenant
          shall pay before delinquency all charges for water, gas, heat, electricity,
          power, telephone service, trash, collection and all other services and
          utilities
          used in, open or about the Premises by Tenant during the Term. Landlord
          shall
          not be liable for any interruption in the provision of any such utility
          services
          to the Premises.

      

      
        


      

      
        17.  ENTRY
AND
          INSPECTION

      

      
        


      

      
        Tenant
          shall permit Landlord and his agents to enter into and upon the premises
          at all
          reasonable times for the purpose of inspecting the same or for the purpose
          of
          performing any right of Landlord hereunder, or for the purpose of pasting
          notices of non-liability for alterations, additions or repairs, or for
          the
          purpose of placing upon the Premises any usual or ordinary “For Sale“ signs.
          Landlord shall be permitted to do any of the above without any rebate of
          rent
          and without any liability to Tenant for any loss of occupation or quiet
          enjoyment of the Premises thereby occasioned. Tenant shall permit Landlord,
          at
          any time within six (6) months prior to the expiration of this Lease, to
          place
          upon the Premises any usual or ordinary “For Lease“ signs and during such six
          (6) month period, Landlord or his agents may, during normal business hours,
          enter upon the Premises and exhibit same to prospective
          tenants.

      

      
        


        
          
            
            

          

          
            7

            
              

            

          

          
            
            

          

        

      

      
         

        l8.  INSOLVENCY
          OF
          TENANT

      

      
        


      

      
        Tenant
          agrees that, in the event all or substantially all of its assets be placed
          in
          the hands of a receiver or trustee, and in the event such receivership
          or
          trusteeship continues for a period of ten (10) days, or should Tenant make
          an
          assignment for the benefit of creditors, or be adjudicated as bankrupt,
          or
          should Tenant institute any proceedings under any state or federal bankruptcy
          act wherein Tenant seeks to be adjudicated as bankrupt, or seeks to be
          discharged of its debts, or should any involuntary proceedings be filed
          against
          such Tenant under such bankrupt laws and Tenant consents thereto or acquiesces
          therein by pleading or default, then this Lease or any interest in and
          to the
          Premises shall not become an asset in any of such proceedings and in any
          of such
          events, and in addition to any and all rights or remedies of Landlord hereunder
          or as provided by law, it shall be lawful for Landlord at his option to
          declare
          the Term ended and to reenter the Premises and take possession thereof
          and
          remove all persons therefrom and Tenant shall have no further claim therein
          or
          hereunder.

      

      
        


      

      
        19.  SURRENDER
          OF
          LEASE

      

      
        


      

      
        The
          voluntary or other surrender of this Lease by Tenant, or a mutual cancellation
          thereof, shall not work a merger, and shall, at the option of Landlord,
          terminate all or any existing sub-leases or sub-tenancies or may, at the
          option
          of Landlord, operate as an assignment to him of any or all of such sub-leases
          or
          sub-tenancies.

      

      
        


      

      
        20.  HOLDING
OVER

      

      
        


      

      
        This
          Lease shall terminate at the end or the Term, provided it has not either
          been
          earlier terminated as contemplated in this. Upon termination of this Lease,
          whether by lapse of time, cancellation, forfeiture, or otherwise, Tenant
          shall
          immediately surrender possession of the premises and all buildings and
          improvements within which the same are located to Landlord in good and
          tenantable repair, reasonable wear and tear excepted. Tenant shall fully
          cooperate with Landlord in turning the Promises
          over to Landlord so as to assure to uninterrupted care to all residents
          of the
          Premises.

      

      
        


      

      
        21.  PRESERVATION
          OF RESIDENTS’
RECORDS

      

      
        


      

      
        Tenant
          shall preserve all resident records as required by applicable law and deliver
          them to Landlord on expiration, or sooner termination, of this
          Lease.

      

      
        


      

      
        22.  RESIDENT
CARE;
          CENSUS

      

      
        


      

      
        Tenant
          shall take all steps appropriate to maintain a high level of quality resident
          care, and to pronote and maintain a high resident census at the Premises
          consistent with law and ethical standards governing the operation of residential
          care facilities for the elderly.

      

      
        


      

      
        23.  FINANCIAL
          STATEMENT

      

      
        


      

      
        Landlord
          and Tenant agree that, upon request by Landlord, Tenant will provide to
          Landlord, within ten (10) days of Landlord’s request, a copy of the current
          financial statement for the Premises (which shall include a current profit
          and
          loss statement and balance sheet).

      

      
        


      

      
        24.  ATTORNEYS’
          FEES

      

      
        


      

      
        In
          the
          event the Landlord finds it necessary to retain an attorney in connection
          with
          the default by the Tenant in any of the agreements or covenants contained
          in this Lease, Tenant shall pay reasonable attorneys ‘fees and costs
          incurred by said attorney.

      

      
        


      

      
        In
          the
          event of any litigation regarding this Lease, the prevailing party shall
          be
          entitled to recovery of expenses of litigation, including, without limitation,
          attorneys‘ fees, travel expenses, trial and appellate court costs and deposition
          and trial transcript expenses.

      

      
        


        
          
            
            

          

          
            8

            
              

            

          

          
            
            

          

        

      

      
         

        25.  NOTICES

      

      
        


      

      
        Wherever
          in this Lease it shall be required or permitted that notice and demand
          be given
          or served by either party to this Lease to or on the other, such notice
          or
          demand shall be given or served and shall not be deemed to have been duly
          given
          or served unless in writing and forwarded by registered or express mail,
          return
          receipt requested, addressed as follows:

      

      
        


      

      
        	
                TO
                  LANDLORD

              	 	
                TO
                  TENANT

              
	 	 	 
	
                Alhambra
                  Royale

              	 	
                Pacifica
                  Manor, Inc.

              
	
                5150
                  Overland Avenue

              	 	
                11141
                  West Washington Boulevard

              
	
                Culver
                  City, California 90230

              	 	
                Culver
                  City, California 90232

              
	
                Attention:
                  Warren Breslow

              	 	
                Attention:
                  Jerry Agam

              
	
                 
                  

              	 	
                President

              


      

      
         

      

      
        Either
          party may change such address by written notice by registered mail to the
          other.

      

      
        


      

      
        26.  SUCCESSORS
          IN
          INTEREST

      

      
        


      

      
        The
          covenants herein contained shall, subject to the provisions as to assignment,
          apply to and bind the heirs, successors, executors, administrators and
          assigns
          of all the parties hereto.

      

      
        


      

      
        27.  FORCE
          MAJEURE

      

      
        


      

      
        If
          either
          party hereto shall be delayed or prevented from the performance of any
          act
          required hereunder by reason of acts of God, strikes, lockouts, labor troubles,
          inability to procure materials, restrictive governmental laws or regulations
          or
          other cause without fault and beyond the control of the party obligated
          (financial inability excepted) , performance of such act shall be excused
          for
          the period of the delay and the period of such delay; provided, however,
          nothing
          in this Section contained shall excuse Tenant from the prompt payment of
          any
          rental or other charge required of Tenant hereunder except as may be expressly
          provided elsewhere in this Lease.

      

      
        


      

      
        28.  PARTIAL
          INVALIDITY

      

      
        


      

      
        If
          any
          term, covenant, condition or provision of this Lease is held by a court
          of
          competant jurisdiction to be invalid, void or unenforceable, the remainder
          of
          the provisions hereof shall remain in full force and affect and shall in
          no way
          be affected, impaired or invalidated thereof.

      

      
        


      

      
        29.  MARGINAL
          CAPTIONS

      

      
        


      

      
        The
          various headings and numbers herein and the grouping of the provisions
          of this
          Lease into separate Sections and Paragraphs are for the purpose of convenience
          only and shall not be considered a part hereof.

      

      
        


      

      
        30.  TIME

      

      
        


      

      
        Time  is
          of the essence in the performance and interpretation
          of this
          Lease.

      

      
        


      

      
        31.  SUBORDINATION,
          ATTORNMENT

      

      
        


      

      
        This
          Lease and all rights of Tenant herein shall be subordinate to the lien
          of any
          mortgage, or deed of trust, to any bank, insurance company or other lending
          institution, now or hereafter in force against the land and building of
          which
          the Premises are a part, and upon any buildings hereafter placed upon the
          land
          of which the Premises are a part, and to all advances made or hereafter
          to be
          made upon the security thereof. Tenant agrees to execute any writing required
          by
          Landlord or its lender(s) to evidence such subordination.

      

      
        


      

      
         In
          the event any proceedings are brought for foreclosure, or in the event
          of the
          exercise of the power of sale under any mortgage or deed of trust made
          by the
          Landlord covering the Premises, Tenant shall attorn to the purchaser upon
          any
          such foreclosure or sale and recognize such purchaser as the Landlord under
          this
          Lease. The provisions of this Section to the contrary notwithstanding and
          so
          long as Tenant is not in default hereunder, this Lease shall remain in
          full
          force and effect for the full Term.

      

      
        


        
          
            
            

          

          
            9

            
              

            

          

          
            
            

          

        

      

      
         

        Within
          ten (10) days after request therefor by Landlord, or in the event that
          upon any
          sale, assignment or hypothecation of the Premises or the land thereunder
          by the
          Landlord, an offset statement shall be required from Tenant, Tenant agrees
          to
          deliver in recordable form a certificate addressed to any such proposed
          mortgagee or purchaser or to the Landlord certifying that this Lease is
          in full
          force and effect (if such be the case; and that there are no differences
          or
          offsets thereto or stating  those claimed by
          Tenant.

      

      
        


      

      
        32.  BROKERAGE

      

      
        


      

      
        Tenant
          shall be responsible for all brokerage fees, if any, resulting from this
          Lease,
          and Tenant agrees to indemnify and hold harmless Landlord from and against
          all
          such fees and costs.

      

      
        


      

      
        33.  WARRANTIES

      

      
        


      

      
        LANDLORD
          HAS MADE NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED NORDOES LANDLORD
          MAKE ANY HEREIN REGARDING THE CONDITION OF THE PREMISES OR ANY PART THEREOF,
          INCLUDING, WITHOUT LIMITATION, THE PREMISES’ FITNESS FOR ANY PARTICULAR USE OR
          OCCUPANCY. LANDLORD FURTHER HEREBY SPECIFICALLY DISCLAIMS ANY REPRESENTATIONS
          AND/OR WARRANTIES, BOTH EXPRESS AND IMPLIED IN LAW, WITH RESPECT TO THE
          CONDITION, HABITABILITY, OR SUITABILITY OF THE PREMISES, OR ANY PART THEREOF,
          FOR THE USE AMD PURPOSES PERMITTED HEREUNDER OR ANY OTHER PURPOSE, AND
          LANDLORD
          DOBS NOT REPRESENT OR WARRANT THAT THE PREMISES OR ANY PART THEREOF COMPLIES
          WITH ANY LAWS RELATING TO THE USES AND OCCUPANCY THEREOF. TENANT FULLY
          UNDERSTANDS THAT THERE MAY BE CERTAIN REPAIRS AND ALTERATIONS REQUIRED
          FOR THE
          CONTINUED LICENSING AND/OR CERTIFICATION OF THE PREMISES, AND TENANT SHALL
          BE
          FULLY RESPONSIBLE FOR THE COST OF AND FOR EFFECTUATING ANY AND ALL
          ALTERATIONS, REPAIRS AND REPLACEMENTS REQUIRED TO BE MADE FOR THE CONTINUED
          LICENSING AND CERTIFICATION OF THE PREMISES, AS WELL AS ALL ALTERATIONS
          AND
          REPLACEMENTS REQUIRED TO MAINTAIN AND PRESERVE THE PREMISES IN THE CONDITION
          CALLED FOR HEREIN. THE PARTIES HEREBY ACKNOWLEDGE THAT LANDLORD IS NOT
          RESPONSIBLE FOR, AND TENANT SHALL HOLD LANDLORD HARMLESS IN CONNECTION
          WITH, ANY
          SUCH REPAIRS, REPLACEMENTS, AND ALTERATIONS TO THE PREMISES FOR ANY REASON
          WHATSOEVER.

      

      
        


      

      
        Initials
          of Tenant Jerry
          Agam

      

      
        


      

      
        34.  RIGHT
          OF  FIRST  REFUSAL

      

      
        


      

      
        In
          consideration of this Lease, Paragraph 2 of the Amendment to the Prior
          Lease, entitled “Option to Purchase,” is hereby expressly deleted and terminated
          upon the execution of this Lease; and, as a part thereof, Tenant Waives
          and
          relinguishes all rights and/or interest in the Premises created thereby.
          In
          place thereof, Landlord hereby grants to Tenant a right of first refusal
          as set forth in
          Subsection
          34.1 immediately below.

      

      
        


      

      
        34.1
          During the Term of this Lease, in the event that Landlord shall decide
          to sell
          the Premises, Tenant shall have a right of first refusal to match the terms
          of
          any offer of a third party to purchase the Premises from Landlord, on the
          following terms and conditions;

      

      
        


      

      
         (a)
          Landlord shall deliver to Tenant a copy of a legitimate written offer of
          a third
          party (the
“offer”) to whom the
          Landlord proposes to sell the Demised Premises;
          which Offer shall contain all basic deal points
          of
          such offer;

      

      
         

         (b)
          Tenant shall have fifteen (15) calender days after its
          receipt
          of the offer within which to exercise its
          right of
          first refusal; and shall exercise such
          right by
          delivery to the Landlord of a written notice
          of
          intent to exercise such right.

      

      
        


      

      
         (c) If
          Tenant exercises its right to purchase the Premises, it shall be upon the
          same
          terms, conditions and timing as set forth in the offer; and

      

      
        


      

      
         (d) If
          Tenant fails to exercise its right of first refusal within the time limit
          imposed above, Tenant’s right of first refusal shall be forever waived and
          terminated.

      

      
        


        
          
            
            

          

          
            10

            
              

            

          

          
            
            

          

        

      

      
         

        34.2
          The
          parties acknowledge that, as part of the Prior Lease (as provided in Sections
          21
          and 29 of the Prior Lease), Tenant paid to Landlord a refundable “Option
          Payment” equal to One Hundred Seventy-Six Thousand Dollars ($176,000.00). In
          light of the termination of the “Option to Purchase,“ as provided in Section 34
          of this Lease, the parties hereby agree to reallocate the option Payment,
          as
          follows:

         

      

      
        (a)
          A
          portion of the Option Payment equal to Eighty-Eight Thousand Dollars
          ($88,000.00) shall be deemed the Option Payment for the “Option to Purchase,”
for the term from the data of execution of the Prior Lease through October
          31,
          1994. This portion shall be deemed fully earned by Landlord, and shall
          not be
          subject to any refund, credit or offset.

      

      
        
       
          (b) The remaining portion of the option Payment, in the amount of Eighty-Eight
          Thousand Dollars ($88,000.00), effective upon the commencement of the Term
          of
          this Lease, shall be deemed to be a refundable security deposit (the “Security
          Deposit”) under this Lease, and not prepaid rent, Landlord shall not be required
          to keep the Security Deposit separate from Landlord’s other accounts and no
          trust relationship is created with respect to the Security Deposit. In
          no event
          shall the Security Deposit be in lieu of, constitute, or excuse Tenant
          from
          paying any portion of the monthly rent, additional rent, or of any other
          sums
          payable by Tenant under this Lease, at any time during the Term of this
          Lease.
          The application of the Security Deposit by Landlord shall in no way be a bar or defense
          to
          any action in unlawful detainer . for the recovery of the Premises or any
          other
          action which Landlord way at any time institute for the breach of this
          Lease, No
          interest shall accrue or be payable by Landlord on the Security Deposit.
          Landlord say, at Landlord’s option, apply all or any part of the Security
          Deposit to any unpaid monthly rent, additional rent, or any other sums
          due from
          Tenant under this Lease, or to cure any other defaults of Tenant hereunder.
          Upon
          expiration of the Term of this Lease, and provided Tenant is not then in
          default
          under this Lease, or no event has occurred which could give rise to a default
          with the giving of notice and/or the passage of time. Landlord, shall return
          that portion of the Security Deposit to Tenant which has not been
          so applied by Landlord, Should all or any portion of the Security Deposit
          be applied by Landlord, pursuant to this Section 34.2, . Tenant shall,
          upon the
          written demand of Landlord promptly remit to Landlord a sufficient amount
          of
          cash to replenish the Security Deposit to the amount of the Security Deposit
          immediately prior to such application, and Tenant’s failure to do so within five
          (5) days after receipt of such demand shall constitute a further material
          default and breach under this Lease.

      

      
         

               
          (c)
          As  a  further  part  hereof,  Tenant
          acknowledges that security deposits have been delivered by Tenant pursuant
          to
          each of the other
          Leases (as defined in Section 12 of this Lease), in addition of the Security
          Deposit herein. la the event that the Security Deposit herein has been
          depleted,
          then Landlord shall be expressly permitted and authorized, but not obligated,
          to
          apply funds from the security deposits of any or all of the Other Leases
          to
          replenish the Security Deposit under this Lease. Such application of security
          deposits from any of the Other Leases shall in no manner limit or waive
          Tenant’s
          obligation under this Lease to replenish the Security Deposit herein, and
          likewise shall further require Tenant to immediately replenish the security
          deposit(s) applied from any of the Other Leases. Upon the expiration of
          this
          Lease, if any of the security deposit(s) provided for in the other Leases
          are
          subject to the replenishment as provided in this Section 34 or said Other
          Lease,
          and further provided that Tenant would otherwise be entitled to the return
          of
          all or a portion of the Security Deposit, the Security Deposit herein shall
          be
          transferred to the Other Leases in the amount(s) necessary to replenish
          said
          security deposit(s), and only the balance of the Security Deposit after
          such
          transfer, if any, shall be returned to Tenant. Likewise, if one or more
          of the
          Other Leases shall expire, and the Security Deposit herein shall be subject
          to
          replenishment as provided above, any portion of the security deposit(s)
          for such
          Other Leases shall be transferred to the Security. Deposit herein to replenish
          same, and only the balance thereof, if any, shall be returned to Tenant.
          Tenant
          expressly agrees and acknowledges that any transfer of funds, between the
          Security Deposit and the security deposit(s) of any or all of the Other
          Leases
          pursuant to the provisions of this Section 34.2 (c) shall be deemed a good
          faith
          retention of such funds by Landlord. Tenant further’ acknowledges and agrees to
          waive any and all of the provisions of California Civil Code Section 1950.7,
          or
          successor provision, which shall in any manner conflict with this Section
          34.2(c).

      

      
        


        
          
            
            

          

          
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        35. NOVATION

      

      
        


      

      
        It
          is the
          intent of the parties hereto that a novation of the Prior Lease occur upon
          execution of this Lease, and that the Prior Lease shall be extinguished
          hereby,
          effective November 1, 1994.

      

      
        


      

      
         

      

      
        


      

      
        IN
          WITNESS WHEREOF, the parties have duly executed this Lease as of the day
          and
          year first above written.

      

      
        


      

      
        	
                “LANDLORD” 

              	 	
                “TENANT” 

              
	 	 	 	 	 
	
                ALHAMBRA
                  ROYALE,  

              	 	 	 
	a
                California limited partnership  	 	
                /s/
                  Jerry Agam 

              
	 	 	 	
                Jerry Agam,
                  an individual 

              
	 	 	 	 	 
	
                By: 

              	/s/
                Warren Breslow 	 	
                PACIFICA
                  MANOR, INC., 

              
	 	
                Warren Breslow,
                  as Trustee

              	 	
                A
California
                  corporation  

              
	 	
                of
                  The Warren L. Breslow

              	 	 	 
	 	
                Trust,  a
                  General Partner

              	 	 	 
	 	 	 	
                By

              	
                /s/
                  Jerry Agam

              
	 	 	 	 	
                Jerry Agam,
                  President.

              


      

      
        
 

      

      
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