ex10_292.htm


    
      

    

    Exhibit
      10.29.2

     

    
      Assisted
        Living Facility
        Lease

       

      This
        lease (hereafter "Lease") is made and entered into this 28th day of September,
        2005 ("Effective Date") by and between General Residential Corporation, a
        Delaware Corporation (hereafter "Lessor") and Summerville at Cobbco, Inc.,
        a
        California Corporation (hereafter "Lessee").

       

      WITNESSETH:

      That
        for
        and in consideration of the rental hereinafter reserved, and of the mutual
        covenants, agreements, and conditions hereinafter contained, Lessor does
        hereby
        lease, let, and demise unto Lessee and Lessee does hereby take, accept, and
        rent
        from Lessor, those certain premises (hereinafter referred to as the "Premises"
        or the "Facility") situated in the City of Whittier, County of Los Angeles,
        State of California, now commonly know as Summerville at Whittier, 10615
        Jordan
        Road, CA 90603 and more particularly described in Schedule A– Legal
        Description attached hereto and made a part hereof together with all
        easements, rights and appurtenances relating to the land and improvements
        and
        all fixtures and trade fixtures used in connection there with; together with
        all
        furnishings, equipment, supplies, inventory, and personal property located
        on or
        used in connection with the Premises and more particularly described in Schedule B Inventory,
        and any replacements thereof, including intangibles belonging to the
        Lessor and used in connection with the Premises, such as trademarks, trade
        names, trade styles, service marks, and similar items.

       

      This
        Lease is made for the term and upon the covenants and agreements hereinafter
        expressed.

       

      ARTICLE
        I:     TERM

      1.01.
        The
        term of this Lease shall commence upon October 1, 2005, (Commencement Date"
        or
        "Commencement").

      1.02.
        The
        initial term of this Lease ("Initial Term") shall, except as hereinafter
        provided, end at 11:59 pm on the 30th
        day of September,
        2030 or twenty-five (25) years from the Commencement Date. As used herein,
        "Lease Year" means any twelve (12) month period that commences on the
        Commencement Date, or any anniversary of the Commencement Date.

       

      ARTICLE
        II:     RENTAL

      2.01.
        During the first year of the Lease Term, Lessee shall pay to Lessor as rent
        for
        the Premises an amount equal to $204,000 per year in equal monthly installments
        of $17,000. From the second year to the fifth year of the Lease term, the
        monthly installments will be as follow:

       

      
        	 	
                Year
                  2:

              	
                $18,500

              
	 	
                Year
                  3:

              	
                $20,000

              
	 	
                Year
                  4:

              	
                $22,000

              
	 	
                Year
                  5:

              	
                $24,000

              


      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      2.02.
        Effective on the 6th-year anniversary date of the Commencement Date (i.e.
        beginning the 61st
        full month) and
        thereafter on each subsequent anniversary date during the Term hereof, including
        any extensions, the rent then in effect shall be increased by the percentage
        increase of the Consumer Price Index for all Urban Consumers for the Los
        Angeles, Bureau of Statistics as reported for the month prior ("CPI"); provided,
        however than in no event shall the percentage increase be less than 2.5%
        nor
        greater than 5.5% for any one year.

      2.03.
        The
        rent for periods of tenancy of less than a month are to be calculated at
        a
        pro-rated daily rate. Rent is due and payable on the first (1st) day of each
        month, and each of the above rental amounts shall be paid on or before the
        ninth
        (9th) day
        of each
        such month in order to avoid imposition of a late charge. Any payment of
        rental
        amounts received by Lessor after the ninth (9th) day
        of any
        month shall incur a late charge equal to five percent (5%) of the rental
        amount
        then due, in order to compensate Lessor by this liquidated damage amount
        for
        damages suffered by reason of the late receipt of the rent amount from the
        Lessee. In addition, any payments still outstanding as of the fifteenth (15th)
        day of any
        month, including any late charges imposed, shall accrue interest in favor
        of
        Lessor in an amount equal to ten percent (10%) per annum until paid in
        full.

      2.04.
        Upon the Commencement Date of the Lease, Lessee shall pay. to Lessor first
        month's rent in the amount of $17,000.

      2.05.
        Upon the Commencement Date of the Lease, Lessee shall pay to Lessor a deposit
        in
        the amount of $150,000 ("Security Deposit") to ensure the faithful performance
        of the terms and conditions of the Lease. Lessor may deposit the Security
        Deposit in its general account and is under no obligation to pay Lessee interest
        thereon. Provided Lessee is not in default pursuant to Article XX, Lessee
        may
        apply the security deposit towards the rent as follows:

      


       

      


      
        	 	
                October 
                  2006:

              	
                $17,000

              
	 	
                November
                  2006:

              	
                $17,000

              
	 	
                October
                  2007:

              	
                $18,500

              
	 	
                November
                  2007:

              	
                $18,500

              
	 	
                October
                  2008:

              	
                $20,000

              
	 	
                November
                  2008:

              	
                $20,000

              
	 	
                October
                  2009:

              	
                $22,000

              
	 	
                November
                  2009:

              	
                $17,000

              


      

       

      2.06.
        Payments of rental hereunder are to be made to:

       

      General
        Residential Corporation

       

       11437
        Dona Pegita Drive

      Studio
        City, CA 91604-4340

      Attention:
        Herbert Wolas

      


      or
        to
        such other person or entity and at such other place as shall be designated
        in
        writing by notice given to Lessee, at least ten (10) days prior to next ensuing
        rental payment date. At the request of Lessor, payment will be made by wire
        transfer.

      2.07.
        Whenever Lessee shall be prevented in whole or in material part from the
        free,
        uninterrupted and unimpeded enjoyment of the use of the Premises, and fixtures
        therein, by reason of default of the Lessor, or by reason of Lessor's making
        any
        repairs, alterations, extensions or additions to the Premises, (but this
        shall
        not imply an obligation for Lessor to make any repairs except as otherwise
        provided herein), or by reason of condemnation or by reason of any casualty
        or
        by reason of eminent domain proceedings, or by any taking or repair occasioned
        thereby, then and in such cases, Lessee shall be allowed an abatement of
        rent
        and other charges payable hereunder in whole or part based upon the duration
        and
        the extent of such interrupted enjoyment. In the event Lessee receives any
        insurance proceeds pertaining to a loss covered under this paragraph, Lessor
        shall be entitled to be paid from said proceeds in an amount equal to the
        monthly rent then due.


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      ARTICLE
        III:     POSSESSION

      3.01.
        Lessee agrees that it is taking the property in "as is" condition.

      3.02.
        The
        Lessor agrees that the Lessee, upon paying the rental and performing the
        covenants of this Lease, may quietly have, hold and enjoy the Premises during
        the Term.

      3.03.
        Lessee shall not assume any of Lessor's duties, debts, liabilities, or
        obligations of any kind or nature and the consummation of the transaction
        contemplated herein shall not cause, effect or constitute the assumption
        by
        Lessee of any duties, debts, liabilities, or obligations of Lessor, which
        shall
        be and remain the sole and exclusive obligation of Lessor.

       

      ARTICLE
        IV:     REPRESENTATIONS
        AND WARRANTIES OF
        LESSOR

      4.01.
        Lessor hereby represents and warrants to Lessee that the statements set forth
        in
        this Article IV are true and correct in all respects as of the Effective
        Date,
        as of the Commencement Date of this Lease and at all times during the Term
        of
        this Lease.

      4.02.
        Organization and
        Qualification. Lessor is a Delaware Corporation that is duly organized,
        validly existing and in good standing under the laws of the State of Delaware.
        Lessor has the full power and authority to carry on the business in which
        it is
        engaged, to own the Premises, and to execute and deliver and perform under
        this
        Lease.

      4.03.
        Absence of Undisclosed
        Liabilities. Lessor has no debts, liabilities or obligations (whether
        absolute, accrued, contingent or otherwise) of any material nature whatsoever
        arising out of or relating to the Premises.

      4.04.
        Absence of Changes
        or
        Events. Solely with respect to the Premises, lessor has not:

      (i)          mortgaged,
        pledged or subjected to lien, charge, security interest
        or any other encumbrance or restriction on the Premises, or amended any similar
        document currently in effect with respect to such matters.

      (ii)         sold,
        transferred, leased to others or otherwise disposed of any material asset,
        or
        canceled or compromised any material debt or claim, or waived or released
        any
        right of substantial value;

      (iii)        received
        any notice of termination of any contract, lease or other agreement or suffered
        any damage, destruction or loss (whether or not covered by insurance) which,
        in
        any case or in the aggregate, has had or may have a Material Adverse Impact
        on
        the assets, operations or prospects of the Facility;

      (iv)        instituted,
        settled or agreed to settle any litigation, action or proceeding before any
        court or governmental body relating to the Facility;

      (v)         entered
        into any agreement or made any commitment to take any of the types of action
        described in subparagraphs (i) through (iv) above.

      4.05.
        Title to and Condition
        of Premises: Leases. Lessor agrees to furnish to the Lessee, at Lessee's
        cost, a preliminary title report that evidences Lessor's good and marketable
        title to the Premises, which is subject to no leases, subleases, agreements,
        encumbrances, liens or defects in title other than those disclosed in Schedule D — Liens
and
        Encumbrances attached hereto, such documents to be dated as of the
        Effective Date.

      4.06.
        Brokers, Finders,
        etc.
All negotiations relating to this Lease and the transactions contemplated
        hereby have been carried on without the intervention of any person acting
        on
        behalf of the Lessor in such manner as to give rise to any claim against
        Lessee
        for any brokerage or finder's commission, fee or similar
        compensation.

      4.07.
        Representative.  Lessor
        hereby:


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      (i)          acknowledges
        that Herbert Wolas is the manager of the Lessor and shall act as the
        representative of Lessor for the Term of the Lease (subject to this Section
        4.07);

      (ii)         authorizes
        Lessee to act upon the direction of Herbert Wolas as if such direction was
        given
        unanimously by Lessor; and

      


      (iii)        agrees
        that Lessor shall give Lessee ten (10) days prior written
        notice, in accordance with Article XXII hereto, if Lessor replaces Herbert
        Wolas
        as the manager and appoints a new manager.

       

      ARTICLE
        V:     REPRESENTATIONS
        AND WARRANTIES
        LESSEE

      Lessee
        represents and warrants to Lessor that the following statements are true
        and
        correct in all respects as of the Effective Date, the Commencement Date and
        during the Term hereof:

      5.01.
        Organization_
        Standing
        and Qualification. Lessee is a corporation duly organized, validly
        existing and in good standing under the laws of the State of California,
        with
        full power and authority to carry on its business as now conducted, to lease
        or
        own and hold the Premises used by it in its business and to perform its
        obligations under this Lease. Lessee is qualified and in good standing to
        transact business in California.

      5.02.
        Brokers, Finders,
        etc.
All negotiations relating to this Lease and the transactions contemplated
        hereby have been carried on by Lessee without the intervention of any person
        acting on behalf of Lessee in such manner as to give rise to any valid claim
        against Lessor for any brokerage or finder's commission, fee or similar
        compensation.

      5.03.
        Litigation. There is no legal action, suit, arbitration, governmental
        investigation or other legal or administrative proceeding, nor any order,
        decree
        or judgment in progress, pending or in effect, or to the knowledge of Lessee
        threatened, against or relating to Lessee in connection with or relating
        to the
        transactions contemplated by this Lease, and Lessee does not know, or have
        any
        reason to be aware, of any basis for the same.

       

      ARTICLE
        VI:     PRE
        AND POST CLOSING
        COVENANTS

      6.01.
        No Publicity.
        Neither Lessor nor Lessee shall make public announcement with respect
        to
        this Lease or the transactions contemplated hereby without the express prior
        written consent of the other party. Each party shall hold in confidence,
        and
        shall cause all of their officers, directors, employees, trustees and agents
        hold in confidence, the terms of this Lease and the transactions contemplated
        hereby.

      6.02.
        Assisted Living
        Licensure. Lessee shall be responsible for maintaining its assisted
        living license, in Lessee's name, for the Facility.

       

      ARTICLE
        VII:     HOLDING
        OVER

      7.01.
        Lessee shall have the option to hold over beyond the expiration date of this
        Lease unless Lessor shall, at least ninety (90) days before said expiration
        date, have given Lessee notice of its intention to terminate this Lease on
        said
        expiration date.

      7.02.
        If
        such notice is not given and Lessee elects to hold over, Lessee shall become
        a
        tenant from year to year upon the same terms as herein provided, until the
        tenancy shall be terminated at the end of any year by the giving of at least
        ninety (90) days written notice by either party hereto to the other, stating
        the
        intention of the party giving such notice to so terminate the
        tenancy.

      


      ARTICLE
        VIII:    USE OF
        PREMISES

      8.01.
        The
        Premises may be used by the Lessee for the purpose of conducting any lawful
        business or enterprise, including, but not limited to, related to the housing,
        feeding and care of senior citizens including without limitation
        Alzheimer's/dementia care and/or assisted living.


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      8.02.
        Lessee agrees that it will conduct its business on the Premises in a lawful
        manner and in compliance with all governmental laws, rules, regulations,
        and
        orders, and that Lessee will at its own cost and expense comply with all
        such
        governmental laws, rules, regulations, and orders as may be applicable to
        the
        business of Lessee conducted on the Premises.

      8.03.
        If
        at any time after the Commencement Date until expiration or sooner termination
        of this Lease, Lessee is prohibited by any federal, state or municipal law,
        rule
        or regulation from operating the Premises as provided herein, Lessee shall
        have
        the right to terminate this Lease upon 30 days written notice to Lessor,
        whereupon this Lease shall terminate 30 days after the date of such notice
        when
        Lessee surrenders possession of the Premises to Lessor; provided, however,
        that
        no such prohibition caused by Lessee's negligence or willful misconduct,
        or the
        gross negligence or willful misconduct of its employees or officers shall
        relieve Lessee of its obligations under this Lease.

       

      ARTICLE
        IX:     EXTENSION

      9.01.
        Whenever Lessee shall be prevented from the free, uninterrupted, and unimpeded
        enjoyment of the use of the Premises and the fixtures therein by reason of
        default of the Lessor, or by reason of Lessors making any repairs, alterations,
        extensions, or additions to the Premises, the fixtures therein, or the building
        of which the same are a part, or by reason of condemnations, casualty, or
        eminent domain proceeding, or any taking or repair occasioned thereby, or
        any
        other reason beyond the control of Lessee, then, and in each and all such
        cases,
        Lessee shall have the right of extensions, which right shall be cumulative
        and
        additional to any other rights given in such cases by this Lease or the law.
        The
        right of extension shall give Lessee the right (which shall be exercised
        at
        least ninety (90) days before the conclusion of the term) to add any such
        period
        or periods of loss of such enjoyment, or the aggregate of all such periods,
        to
        the Term of this Lease. If any of the matter and things enumerated in the
        first
        sentence of this paragraph occur during the last year of the Term, and
        materially interfere with Lessee's enjoyment of the Premises, Lessee may
        terminate this Lease upon thirty (30) days notice to Lessor,

      9.02.
        In
        the event that Lessee shall be in material default in the terms of this Lease
        at
        the time any notice of extension is required or offered to be given, this
        Lease
        shall (upon notice from Lessor), at Lessor's option, be terminated, and of
        no
        further force and effect, at the expiration of the then-current
        term.

       

      ARTICLE
        X:     RIGHT
        OF FIRST
        OFFER

      10.01.
        Lessor shall not, at any time prior to the expiration of the term of the
        Lease,
        as
        it may be extended, make the Premises, or any interest therein, available
        for
sale
        to
        third parties without first giving written notice thereof to Lessee ("Notice
        of
        Sale").

      10.02
        The
        Notice of Sale shall include the terms under which Lessor is willing to sell
        the
        Premises to Lessee.

      10.03
        For
        a period of fifteen (15) business days after receipt by Lessee of the Notice
        of
        Sale, Lessee shall have the right to give written notice to Lessor of Lessee's
        exercise of Lessee's right to purchase the Premises, or the interest to be
        sold,
        on the same terms, price and conditions set forth in the Notice of Sale.
        If
        Lessor does not receive written notice of Lessee's exercise of the right
        of
        first offer herein granted within said fifteen (15) business day period,
        there
        shall be a conclusive presumption that Lessee has elected not to exercise
        Lessee's right of first offer hereunder, and Lessor may sell the Premises,
        or
        the interest proposed to be sold, to any third party or parties. If Lessee
        declines to exercise its right of first offer after receipt of the Notice
        of
        Sale, and, thereafter, Lessor and any prospective third party purchaser modify
        by more than 5% (i) the sales price, (ii) the amount of the down payment,
        or
        (iii) interest charged, or in the event that the sale is not consummated
        within
        270 days after the date of the Notice of Sale, then Lessee's right of first
        offer shall be reinstated as of the occurrence of any of the aforementioned
        events.


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      ARTICLE
        XI:     UTILITIES

      11.01.
        Lessee covenants to pay during the Term all utilities, including without
        limitation, metered electric, water, and gas charges, and all telephone,
        television, cable, garbage removal charges in connection with its occupancy
        and
        use of the Premises.

       

      ARTICLE
        XII:     COVENANTS
        AGAINST LIENS;
        TAXES

      12.01.
        Throughout the Term, all real and personal property taxes on the Premises
        and
        the fixtures and equipment in the Premises shall be assessed to and paid
        (before
        delinquency) by the Lessee_ However, Lessee shall not be responsible for
        paying
        that portion of any increased property taxes that results solely from a sale
        or
        refinance of the Premises by Lessor. Lessee will be responsible for any
        penalties that may occur due to any delinquencies with respect to payment
        of
        taxes for which its responsible. In the event any payments under this Article
        become delinquent and are paid by Lessor, Lessee shall be responsible to
        reimburse Lessor for all such payments made, together with interest at the
        rate
        of ten percent (10%) per annum which Lessee shall include with the following
        month's rent.

      12.02.
        Lessee covenants that it will not, during the Term, suffer or permit any
        lien to
        be attached to or upon the Premises, or any portion thereof, by reason of
        any
        act or omission on the part of Lessee, and hereby agrees to save and hold
        harmless Lessor from or against any such lien or claim of lien. In the event
        any
        such lien does attach or any claim of lien is made against the Premises which
        may be occasioned by any act or omission upon the part of Lessee, and shall
        not
        be released within fifteen (15) days after notice from Lessor to Lessee to
        do
        so, Lessor may (but this shall not be deemed to impose an obligation upon
        Lessor
        to do so) pay and discharge the same and relieve the Premises from any such
        lien, and Lessee agrees to repay and reimburse Lessor, upon demand, for or
        on
        account of any amount which may be paid by Lessor in discharging such lien
        or
        claim, together, but not limiting the same to the payment of any fees, costs,
        and/or charges in connection with any legal actions which may have been brought
        together with interest at the rate of ten percent (10%) per annum from the
        date
        of the expenditure by Lessor to the date of repayment by Lessee: provided,
        however, that if Lessee desires to contest the validity or correctness of
        any
        such lien it may do so provided that is shall first furnish Lessor with a
        good
        and sufficient bond within said 15 day period indemnifying Lessor against
        any
        loss, liability or damages, on account thereof.

      12.03.
        Lessor agrees that if it fails to pay any assessments or any interest,
        principal, costs or other charges upon any Mortgage or other lien or encumbrance
        affecting the Premises and to which this Lease may be subordinate when any
        of
        the same become due, or if Lessor fails to perform any covenant and/or agreement
        in this Lease contained on the part of the Lessor to be performed, then and
        in
        any such event or events, the Lessee, after the continuance of any such failure
        or default for fifteen (15) days after notice in writing thereof is given
        by the
        Lessee to the Lessor may (but this shall not be deemed to impose an obligation
        upon Lessee to do so) pay said assessments, interest, principal, costs and
        other
        charges and cure such defaults all on behalf of and at the expense of the
        Lessor, and do all necessary work and make all necessary payments in connection
        therewith including but not limiting the same to the payment of any fees,
        costs
        and/or charges in connection with any legal actions which may have been brought,
        and the Lessor agrees to pay to the Lessee forthwith the amount so paid by
        the
        Lessee, together with interest thereon at the rate of ten percent (10%) per
        annum, and agrees that the Lessee may withhold all or a portion of rental
        payments and other payments thereafter becoming due to the Lessor pursuant
        to
        the provisions of this Lease or any extensions thereof and may apply the
        same to
        the payment of such indebtedness of the Lessor to the Lessee until such
        indebtedness is fully paid with interest thereon as herein provided. However,
        if
        Lessor desires to contest the validity or correctness of any such lien it
        may do
        so, provided that it shall first furnish Lessee with a good and sufficient
        bond
        within said 15 day period indemnifying Lessee against any loss, liability,
        or
        damage on account thereof.


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      ARTICLE
        XIII:     REPAIRS

      13.01.
        Lessee shall keep the Premises including the fixtures, trade fixtures, and
        equipment in good condition and repair, excepting for obsolescence, ordinary
        physical depreciation, and ordinary wear and tear. Lessee shall replace any
        portion of the Premises or the personal property which have exhausted their
        useful life with comparable quality improvements for personal property
        items.

      13.02.
        Lessor at all reasonable times shall have the right to post and keep posted
        on
        the Premises statutory notices of non-responsibility which Lessor may deem
        to be
        necessary for the protection of Lessor and said Premises from mechanics'
        liens
        or liens of a similar natures. Lessee shall give Lessor thirty (30) days
        prior
        written notice of all construction proposed to be undertaken by Lessee, in
        order
        to permit Lessor to post such notices of non-responsibility.

      13.03.
        Lessee shall have the right at any time to make such non-structural additions,
        repairs, alterations, changes, or improvements, in or to the Premises as
        Lessee
        may deem necessary, proper or expedient in the operation of the Premises,
        without Lessor's approval so long as the value of such work shall not exceed
        two
        hundred thousand dollars ($200,000) provided always, that no work done by
        Lessee
        shall adversely affect the structural strength of said building; and provided
        further, that Lessee shall pay promptly for all such work done by it or upon
        its
        order. Lessor shall have reasonable advance notice for all structural or
        non-structural changes in excess of two hundred thousand dollars ($200,000)
        in
        value and Lessor agrees not to unreasonably withhold approval.

      13.04.
        Lessor hereby reserves the right for itself or its duly authorized agents
        and
        representatives at all reasonable times during business hours of Lessee to
        enter
        upon the Premises for the purposes of inspecting the same or to show the
        same to
        any prospective purchaser, and for the purpose of making any necessary repairs
        to or upon the Premises, but such right shall be exercised reasonably and
        so as
        to cause the least possible inconvenience to Lessee, and so as not to
        unreasonably interfere with its business.

      13.05.
        Lessee shall, at the end of the Term, or of any extensions thereof, or at
        any
        other termination of this Lease, surrender the Premises together with any
        personal property belonging to Lessor, and alterations made thereto, in good
        order, repair, and condition, except for damage caused by obsolescence, ordinary
        physical deprecation, or ordinary wear and tear.

      13.06.
        This Article XIII is subject and subordinate to Article XIV of this
        Lease.

       

      ARTICLE
        XIV:     DAMAGE
        BY
        CASUALTY

      14.01.
        If
        the Premises, or the building of which they are a part, shall be destroyed
        or
        damaged from any cause other than ordinary wear and tear, ordinary physical
        deprecation, obsolescence, or normally uninsurable casualty, Lessee shall
        forthwith repair, restore and rebuild the same with all reasonable dispatch
        and
        diligence including restorations and repair of all fixtures and equipment
        from
        insurance proceeds made available for that purpose in accordance with section
        15.01.


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      14.02.
        Anything in this Article XIV to the contrary notwithstanding, if, by reason
        of
        any of the causes referred to in paragraph 14.01 hereof, the Premises or
        the
        building of which the same are a part shall be destroyed or damaged at any
        time
        prior to the last twelve (12) months of the Term and is not completely restored
        within a period of one year from and after the date of the casualty or if
        such
        damage or destruction occur during the last twelve (12) months of the Term
        and
        the Premises or the building of which the same are a part is not completely
        restored within a period of ninety (90) days from and after the date of the
        casualty, this Lease may be terminated upon written notice by Lessee to Lessor.
        Upon such termination Lessee shall be relieved from all liabilities hereunder
        except the liability to pay rent up to the date of such damage or destruction
        and any accrued charges, costs, and expenses required to be paid by Lessee
        hereunder, including the costs of restoring the premises.

       

      ARTICLE
        XV:     INSURANCE

      15.01.
        Lessee agrees that it will, throughout the Term of this Lease, maintain or
        provide to be maintained in force fire insurance with extended coverage
        endorsement attached, to the extent of at least the full insurable replacement
        value thereof to current code (less deductible) on the Premises, and on all
        fixtures, trade fixtures, and equipment therein on which Lessor is legal
        owner
        and for loss of rents for at least twelve (12) months following any such
        insurable loss, in good and solvent insurance companies. The policies evidencing
        such fire and extended coverage insurance shall, by endorsement or otherwise,
        provide that the proceeds of such insurance shall be deposited with the first
        mortgagee or holder of a first deed of trust if it be an institutional lender
        named in a loss payable endorsement attached to the policy, or, in the absence
        of such attachment, in any bank or trust company agreed on by Lessor and
        Lessee,
        to constitute a trust fund for the repair, restoration, and rebuilding as
        provided in Article XIV of this Lease, to be withdrawn only on architect's
        certificates to pay for such work of repair, restoration, and rebuilding.
        The
        provisions of this paragraph shall not be deemed to prevent the attachment
        of
        the usual form of mortgagee clause to any first insurance policy carried
        by the
        Lessor on the Premises.

      15.02.
        Lessor and Lessee each hereby release the other, its officers, and employees,
        and waive any claim against the other, its officers, and employees, for damages
        to or destruction of each other's property, real or personal, caused by fire
        or
        any risk enumerated in a standard form of fire insurance policy and extended
        coverage endorsement, whether due to the negligence of either Lessor or Lessee,
        or otherwise.

      15.03.
        Lessee agrees that it will at all times during the Term of this Lease maintain
        or provide to be maintained in force general and professional liability
        insurance with responsible companies in such amounts and against such risks
        as
        is customarily maintained by operators of similar properties in the same
        general
        area, based on industry norms (currently $1 million per occurance and $3
        million
        aggregate coverage per policy year).

      15.04.
        Lessee agrees that it will at all times during the Term of this Lease maintain
        or provide to be maintained in force insurance for liability in connection
        with
        the ownership and/or operation of motor vehicles by Lessee or its
        employees.

      15.05_
        Lessee shall cause to be issued or provided to Lessor, at any time upon request,
        appropriate certificates of insurance evidencing compliance with the foregoing
        covenants. Such certificates shall provide that if the insurance is canceled
        or
        materially changes during the policy period, the insurance carrier shall
        notify
        the party to whom such certificate is addressed thirty (30) days prior to
        the
        effective date of cancellations or material change.


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


       

      ARTICLE
        XVI:     ASSIGNMENT
        AND
        SUBLETTING

      16.01.
        Lessee shall have the right to sublease, assign or transfer this Lease, the
        Premises or any part thereof for any lawful purpose permitted under this
        Lease
        with the previous written consent of the Lessor first had and obtained, such
        consent of Lessor not to be unreasonably withheld. Lessor's approval of
        assignment or transfer shall be deemed to remove Lessee from any liability
        under
        this Lease during the Term. However, Lessor's consent may be reasonably withheld
        if the proposed assignee does not provide adequate evidence of ability and
        capital to properly operate the Premises and business in question.

      16.02.
        This Lease binds, applies to and inures to the benefit of, as the case may
        be,
        the heirs, executors, administrators, successors, and assignees of the Lessor
        and the heirs, executors, administrators, successors and assignees of the
        Lessee.

       

      ARTICLE
        XVII:     EMINENT
        DOMAIN

      17.01.
        If
        any significant or material part of the Premises shall be taken under the
        power
        of eminent domain, then and in any such events, Lessee may, by giving written
        notice to Lessor within sixty (60) days after such taking, terminate this
        Lease
        as of the date of such notice. In the event that Lessee elects not to exercise
        such right within said sixty (60) day period, then Lessor shall make such
        repairs and alterations as may be necessary to restore the affected portion
        of
        the Premises as nearly as practicable to complete units of like quality and
        character as existed just prior to such taking. The rent from and after any
        such
        taking shall be abated equitably to and as a result of the effect of the
        condemnation.

      17.02.
        The condemnation award shall belong solely to the Lessor. However, Lessee
        shall
        have the right to claim any compensation as may be separately awarded or
        receivable by Lessee in Lessee's own right on account of any cost or loss
        Lessee
        may suffer for the removal of its furniture, fixtures or equipment, the loss
        of
        the unamortized value of the improvements made by Lessee under this Lease,
        Lessee's lost profits due to the condemnation, or any other element of special
        damage separately recoverable by the Lessee.

       

      ARTICLE
        XVIII:     DISPUTES
        BETWEEN
        PARTIES

      Notwithstanding
        anything to the contrary contained in this Lease, in any action, arbitration,
        or
        other proceeding between the parties hereto arising out of or relating to
        this
        Lease, the prevailing party in such action shall be entitled to its costs
        and
        expenses incurred, including reasonable attorneys' fees, in addition to such
        other relief as may be awarded.

       

      ARTICLE
        XIX:     PERMITS
        AND
        LICENSES

      19.01.
        Lessor hereby irrevocably constitutes and appoints Lessee its
        attorney-in­fact with full power of substitution to apply for and secure any
        building permit or permission of any duly constituted authority for the purpose
        of doing any of the things which Lessee is required or permitted to do under
        the
        provisions of this Lease. Before exercising any authority to act for the
        Lessor
        as attorney-in-fact hereunder, Lessee shall give at least 5 business days
        prior
        written notice thereof to the Lessor and shall specify in said notice the
        act or
        actions intended to be taken under such authority, and shall submit for Lessor's
        approval all plans and specifications Lessee is required to submit to the
        duly
        constituted authority.


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      19.02.
        Lessee agrees to indemnify and save harmless Lessor from loss or damage by
        reason of any appointment or authority granted in this Article XIX or by
        reason
        of any such applications or consent.

       

      ARTICLE
        XX:     DEFAULT

      The
        occurrence of any of the following shall constitute an "Event of Default"
        by the
        party failing to perform its obligations hereunder or committing an act of
        bankruptcy or similar acts, as further provided in this Article XX:

      20.01.
        Lessee or Lessor shall fail to make or cause to be made any payment required
        to
        be made hereunder and such failure shall continue for a period of 30 days
        after
        written notice thereof labeled "Notice of Default".

      20.02.
        Lessee or Lessor shall fail to keep, observe or perform any agreement, term
        or
        provision of this Lease, and such failure shall continue for a period of
        30 days
        after written notice thereof, labeled "Notice of Default", and shall have
        been
        given to the defaulting party by the other party hereto, which notice shall
        specify the event or events constituting the default, or if the matter alleged
        to be in default is not one which, by its nature, can be cured within thirty
        (30) days, then defaulting party shall have a reasonable length of time as
        judged by the nature of the matter, to cure the default; provided, however,
        that
        defaulting party must have commenced its efforts to cure within the thirty
        (30)
        day cure period and must diligently pursue its efforts to cure, and further
        provided that the other party shall not be deemed to be in violation of this
        Lease, and no Event of Default shall have occurred, if defaulting party is
        prevented from performing any of its obligations hereunder for any reason
        beyond
        its control, including without limitation, strikes, shortages, war, acts
        of God,
        acts of the other party hereto or its officers, directors, employees or agents,
        or any change of law, regulation or rule of federal, state or local government
        or agency thereof.

      20.03.
        Lessee or Lessor, as the case may be, shall be dissolved or shall apply for
        or
        consent to the appointment of a receiver, trustee or liquidator of all or
        a
        substantial part of its assets, file a voluntary petition in bankruptcy,
        or
        admit in writing its inability to pay its debts as they become due, make
        a
        general assignment for the benefit of creditors, file or have filed against
        it,
        a petition or an answer seeking reorganization or arrangement with creditors
        or
        taking advantage of any insolvency law; or an order, judgment or decree shall
        be
        entered by a court of competent jurisdiction, on the application of a creditor,
        adjudicating Lessee or Lessor a bankrupt or insolvent or approving a petition
        seeking reorganization of Lessee or Lessor , or appointing a receiver, trustee
        or liquidator of Lessee or Lessor or all or a substantial part of its assets
        and
        such order shall remain undismissed, undischarged or unbonded for a period
        of 60
        days.

       

      ARTICLE
        XXI:     REMEDIES
        UPON
        DEFAULT

      21.01.
        Upon the determination of an Event of Default, the non-defaulting party may,
        at
        its discretion, without limiting its exercise of any right or remedy at law
        or
        in equity that it may have by reason of such default:

      (i)              
        Maintain this Lease in full force and effect and recover monetary charges
        or
        payments as they become due without terminating Lessee's right to
        possession.

      (ii)             
        Terminate Lessee's right to possession by any lawful means in which case
        this
        Lease shall terminate and Lessee shall immediately surrender possession of
        the
        Premises to Lessor. In such event, the non-defaulting party shall be entitled
        to
        recover from the defaulting party all damages incurred by reason of such
        default
        and any other right or remedy available to it under applicable law subject
        to
        this Lease.


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      21.02.
        In
        the event of Lessee's default, all of Lessee's fixtures, furniture, equipment,
        improvements and additions, alterations, and other personal property shall
        remain a part of the Premises and in that event, and continuing during the
        length of said default, Lessor shall have the right to take the exclusive
        possession of same and to use same, rent or charge free, until all defaults
        are
        cured or, at its option, at any time during the Term of this Lease, to require
        Lessee to forthwith remove same.

      21.03.
        The non-defaulting party shall be under no obligations to observe or perform
        any
        covenant of this Lease on its part to be observed or performed that accrues
        after the date of any default by the other party hereunder, provided that
        once
        the default has been cured, such party shall no longer be relieved from said
        obligations and liabilities.

       

      ARTICLE
        XXII:     NOTICES

      22.01.
        Any notices, demands, and the like, which are required to be given hereunder
        or
        which either party hereto may desire to give to the other shall be given
        in
        writing by personal delivery, by mailing the same by certified United States
        mail, return receipt requested, postage prepaid, or via prepaid private express
        mail service, or via facsimile transmission addressed to the Lessor
        at

      


      General
        Residential Corporation

       

      11437
        Dona Pegita Drive Studio City, CA 91604-4340

       

      Fax
        #:
        (323) 654-2809

      Attention:
        Herbert Wolas

      


       

      or
        to
        Lessee care of:

       

      Summerville
        Senior Living, Inc.

      3000
        Executive Parkway, Suite 530 San Ramon, CA 94583

      Fax
        # :
        (925) 866-8506

      Attention:
        Granger Cobb, President/CEO

       

      or
        to
        such other addresses as the respective parties may from time to time designate
        by notice given as provided in this Lease.

      22.02.
        If
        the Lessor be more than one person or entity, notice by Lessee or payment
        by
        Lessee to any one of them is notice or payment to all. If the Lessor be more
        than one person or entity, Lessee may act on notice from any Lessor, and
        in the
        case of conflicting notices may recognize any one of them as valid and disregard
        the others. If Lessor collectively forms a single partnership, corporation
        or
        limited liability company, Lessee may act on any notice given by any officer,
        partner, member or agent of such corporation, partnership or limited liability
        company, but may treat any notice in such case as of no effect unless signed
        by
        the President or a Vice-President of the corporation, a partner in the
        partnership or the manager of a limited liability company.

       

      ARTICLE
        XXIII:     SHORT FORM
        LEASE

      23.01.
        As
        soon as possible after the execution and delivery of this Lease, the parties
        hereto agree to execute a short form of Lease attached as Schedule E — Short
Form
        of Lease
for recording. This Lease and such short form shall be construed together
        as one instrument.


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      23.02.
        This Lease and such short form Lease are the only agreements between the
        parties
        hereto. All negotiations and oral agreements acceptable to both parties are
        included herein.

       

      ARTICLE
        XXIV:     INDEMNIFICATION

      24.01.
        Lessee will indemnify and defend Lessor and save it harmless from and against
        any and all claims, actions, damages, liability, and expense (including without
        limitation attorney's fees) in connection with the loss of life, bodily injury
        or damage to Premises or business arising from any cause whats0ever occurring
        during the Term, except the willful misconduct or gross negligence of Lessor
        or
        its officers, directors, employees, or agents. Lessor will indemnify and
        defend
        Lessee and save it harmless from and against any and all claims, actions,
        damages, liability and expense (including without limitation attorneys fees)
        in
        connection with the loss of life, bodily injury or damage to Premises or
        business arising from any cause whatsoever occurring prior to the Commencement
        Date, except the willful misconduct or gross negligence of Lessee or its
        officers, directors, employees or agents. The provisions of this Article
        XXIV
        shall expressly survive termination of this Lease

      24.02.
        Notwithstanding anything to the contrary herein contained, Lessor and Lessee
        do
        mutually each release and discharge the other from all suits, claims, and
        damages whatsoever for loss or damage to the Premises of the other (and their
        respective officers, directors, shareholders, agents, employees, contractors,
        or
        tenants) arising from an insured casualty or peril, caused by or occurring
        through or as a result of any acts or omissions, whether negligent or otherwise,
        of the parties or their respective officers, directors, shareholders, agents,
        employees, contractors, or tenants.

       

      ARTICLE
        XXV:     MISCELLANEOUS
        PROVISIONS

      25.01.
        Whenever in this Lease any words of obligations or duty regarding either
        of the
        parties are used, such words shall have the same force and effect as though
        in
        the express form of covenants. Whenever appropriate from the context, the
        use of
        any gender shall include any other or all genders, and the singular number
        shall
        include the plural, and the plural shall include the singular.

      25.02.
        The captions heading the various articles of this Lease are for convenience
        and
        identification only, and shall not be deemed to limit or define the contents
        of
        their respective paragraphs.

      25.03.
        The waiver by either party of any breach of any term, covenant, or condition
        herein contained shall not be deemed to be a waiver of such term, covenant,
        or
        condition or any subsequent breach of the same, or any other term, covenant,
        or
        conditions herein contained. The subsequent acceptance of rent hereunder
        by
        Lessor shall not be deemed to be waiver of any preceding breach of Lessee
        of any
        term, covenant, or conditions of this Lease, other than the failure of Lessee
        to
        pay the particular rent so accepted, regardless of Lessor's knowledge of
        such
        preceding breach at the time of acceptance of such rent. No covenant, term,
        or
        conditions of this Lease shall be deemed to have been waived by either party
        unless such waiver be in writing and signed by that party.

      25.04.
        Lessee may make any payment or give any notice to Lessor, despite any succession
        or assignments, and be protected in so doing, until it has written notice
        from
        Lessor. If there be conflicting claims to money payable by Lessee under this
        Lease, or reasonable doubt as to whom the money is payable, Lessee may discharge
        its obligations to pay by depositing such money in the bank or trust company
        in
        the county in which the Premises is located, to abide the litigation of any
        such
        matters, but Lessee need not recognize any such adverse claims, and may pay
        the
        money to Lessor. All sums payable hereunder by either party to the other
        are
        payable in lawful money of the United States of America

      25.05.
        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
        regulation or other causes without fault and beyond the control of the party
        obligated (financial inability excepted) performance of such acts shall be
        excused for the period of the delay and the period for the performance of
        any
        such acts shall be extended for a period equivalent to the period of such
        delay.


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      25.06.
        Any provision of this Lease calling for interest to be paid on any amounts
        of
        money owed to either party shall not be deemed to be invalid in the event
        that
        the rate stated in the Lease is deemed to be usurious under the laws of the
        State of California then in effect. In such event, the maximum rate of interest
        which can be charged under the Lease shall not exceed the maximum rate allowable
        by the law at the time of the event giving rise to the interest
        change.

      25.07.
        This Lease may be executed in counterparts, by facsimile signature. 25.08.
        The
        following schedules are attached hereto and by this reference made a part
        hereof.

      Schedule
        A — Legal Description

      Schedule
        B - Inventory

      Schedule
        C - Liabilities

      Schedule
        D - Liens and Encumbrances

      Schedule
        E - Short Form Lease

       

      ARTICLE
        XXVI:     ARBITRATION

      Either
        party may request arbitration of any matter in dispute under this Lease,
        upon
        which the following procedures shall apply. The party desiring such arbitration
        shall give notice to the other party. The parties shall select a mutually
        agreed
        upon arbitrator. If the parties cannot mutually agree upon an arbitrator,
        each
        party shall, within ten (10) days thereafter appoint an arbitrator, and advise
        the other party of the arbitrator so appointed. A third arbitrator shall,
        within
        ten (10) days following the appointment of the two (2) arbitrators, be appointed
        by the two arbitrators so appointed or by the American Arbitration Association
        (herein called the "AAA"), if the two arbitrators are unable to agree on
        the
        third arbitrator. If either party fails to appoint an arbitrator the arbitrator
        appointed by the other party shall resolve such dispute or make the
        determination in question. Any arbitrator(s) appointed shall be experienced
        in
        the issue with which the arbitration is concerned and shall have been actively
        engaged in such field for a period of at least ten (10) years before the
        date of
        his appointment as arbitrator hereunder. All arbitrators chosen or appointed
        shall (a) be sworn fairly and impartially to perform their respective duties
        as
        such arbitrator and (b) not be an employee or past employee of Lessor or
        Lessee
        or of any other person, partnership, corporation or other form of business
        or
        legal association or entity that controls, is controlled by or is under common
        control with Lessor or Lessee. Within sixty (60) days after the appointment
        of
        such arbitrator(s), such arbitrator(s) shall determine the matter which is
        the
        subject of the arbitration and shall issue a written opinion. The decision
        of
        the arbitrator(s) shall be conclusively binding upon the parties, and judgment
        upon the decision may be entered in any court having jurisdiction. Lessor
        and
        Lessee shall each pay fifty (50%) percent of the fees and expenses of the
        arbitrator(s) appointed. The losing party shall reimburse the prevailing
        party
        for the reasonable counsel fees and disbursements incurred by the prevailing
        party in connection with such arbitration.

       

      ARTICLE
        XXVII:     GOVERNING
        LAW

      This
        Lease was negotiated in the State of California, which state the parties
        agree
        has a substantial relationship to the parties and to the transaction embodied
        hereby. This Lease and the obligations arising hereunder shall be governed
        by,
        and construed in accordance with, the laws of the State of California applicable
        to contracts made and performed in such state (without regard to principles
        of
        conflict laws) and any applicable law of the United States of America. To
        the
        fullest extent permitted by law, Lessor and Lessee hereby unconditionally
        and
        irrevocably waive any claim to assert that the law of any other jurisdiction
        governs this Lease. Any legal suit, action or proceeding against Lessor or
        Lessee arising out of or relating to this Lease may be instituted in any
        federal
        or state court in the County of Los Angeles, and State of California, and
        Lessor
        and Lessee waive any objections which they may now or hereinafter have based
        on
        venue and/or forum non conveniens of any such suit, action or proceeding,
        and
        Lessor and Lessee hereby irrevocably submit to the jurisdiction of any such
        court in any suit, action or proceeding.

       

      [signatures
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      SCHEDULE
        E


       

      IT
        WITNESS WHEREOF, the parties hereto have executed this Lease the day and
        year
        first above written.

      
        	 	
                LESSOR;

              
	 	 
	 	
                General
                  Residential Corporation

              
	 	 
	 	
                By:
                  /s/ Granger Cobb

              
	 	
                Name:
                  Granger Cobb

              
	 	
                Its:
                  President, CEO

              
	 	 
	 	
                LESSEE:

              
	 	 
	 	
                Summerville
                  at Cobbco, Inc.

              
	 	 
	 	
                By:
                  /s/ Granger Cobb

              
	 	
                Name:
                  Granger Cobb

              
	 	
                Its:
                  President, CEO

              


      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      SHORT
        FORM LEASE

      Memorandum
        of
        Lease

      


      Under
        date of September 28, 2005,

      General
        Residential Corporation, a Delaware Corporation, (hereafter "Lessor") and
        Summerville at Cobbco, Inc., a California Corporation (hereafter "Lessee")
        entered into a lease dated as of September 28 , 2005
        (the
        "Lease"), which provides, among other things, that in consideration of the
        rent
        therein reserved and upon the terms, conditions, covenants, and provisions
        set
        forth at length therein, Lessor leases, lets, and demises to Lessee and Lessee
        takes, accepts and rents from. Lessor, for the term set forth in the Lease,
        those certain premises (hereinafter referred to as the "Premises" or the
        "Facility") situated in the City of Whittler, County of Los Angeles, State
        of
        California, now commonly know as Summerville at Whittler, 10615 Jordan Road,
        California 90603 and more particularly described in Schedule A — Legal
        Description attached hereto and made a part hereof, together with all
        easements, rights and appurtenances relating to the land and improvements
        and
        all fixtures used in connection there with; together with all furnishings,
        equipment, supplies, inventory, and personal property located on or used
        in
        connection with the Premises.

      The
        Lease
        was made upon the terms, conditions, covenants, and provisions set forth
        at
        length therein, including, without limitation, the right of first offer for
        Lessee to purchase the Premises, which terms, conditions, covenants, and
        provisions are hereby incorporated herein with the same force and effect
        as if
        set out at length herein. In witness hereof, the parties have executed this
        Memorandum of Lease as of the day and year first above written.

       

      
        	 	
                LESSOR:

              
	 	
                General
                  Residential Corporation

              
	 	
                By:
                  /s/ Herbert Wolas

              
	 	
                Name:
                  Herbert Wolas

              
	 	
                Its:
                  Authorized Agent

              
	 	
                LESSEE:

              
	 	
                Summerville
                  at Cobbco, Inc.

              
	 	
                By:
                  /s/ Granger Cobb

              
	 	
                Name:
                  Granger Cobb

              
	 	
                Its:
                  President, CEO