ex10_287.htm


    
      

    

    Exhibit
      10.28.7

     

    
      BROOKHURST
        ROYALE/Summerville

       

      


       

      LEASE
        AGREEMENT

      (Existing
        Facilities)

       

      THIS
        LEASE AGREEMENT (this "Lease") is made and entered into as of the 1st
day
        of March,
        2005, by and between BROOKHURST ROYALE, LLC, a California limited liability
        company ("Landlord"), and SUMMERVILLE 13, LLC, a Delaware limited liability
        company ("Tenant"), with reference to the following facts and
        circumstances:

       

      A.          WHEREAS,
        Landlord owns the "Premises" hereinafter described.

       

      B.          WHEREAS,
        Tenant is experienced in the management and operation of residential care
        facilities for the elderly, as defined in California Health & Safety Code,
        Division 2, Chapter 23.2, Section 1569.2, and related California statutes
        and
        regulations.

       

      C.          WHEREAS,
        Tenant desires to lease the Premises from Landlord and Landlord desires to
        lease
        the Premises to Tenant pursuant to the provisions of this Lease, for the
        purpose
        of Tenant's operation of a duly licensed residential care facility for the
        elderly (including Alzheimer's care) (an "RCFE").

       

      D.          WHEREAS,
        Landlord is entering into this Lease in reliance upon the particular skills,
        knowledge and experience of Tenant in the operation of an RCFE.

       

      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 receipt and sufficiency of which is hereby acknowledged, the parties
        hereto
        do hereby agree as follows:

       

      1.          LEASE
        OF
        PREMISES.  Subject to the terms and conditions of this Lease,
Landlord
        hereby leases to Tenant, and Tenant hereby leases from Landlord, for the
        Term
        (as defined below) that certain real property described in Exhibit "A" attached
        hereto, which has been improved with an approximately one hundred seventeen
        (117) unit RCFE, and related personal property (as described in Paragraph
        10
        below) (collectively, the "Premises"). The Premises are located at 15302
        Brookhurst, Westminster, California, and shall be commonly known as "Brookhurst
        Royale."

       

      2.          TERM
        .The term of
        this Lease (the "Term") shall be for twenty (20) years, commencing on May
        1,
        2005; provided that Tenant has received authorization from the California
        Department of Social Services Community Care Licensing to operate the Premises
        ("Commencement Date"), and expiring on April 30, 2025.

       

      3.          MONTHLY
        RENT. Tenant
        shall pay to Landlord rental for the Premises, without
        deduction, set off, prior notice or demand, as follows:

       

      3.1          Monthly
        Rent. Subject
        to adjustment under Paragraph 4 below, Tenant shall
        pay
        to Landlord monthly rent (the "Monthly Rent") in the amount set forth below
        commencing on May 1, 2005. The Monthly Rent set forth below shall be due
        and
        payable in advance on the first day of each month. Concurrently with the
        payment
        of Monthly Rent, Tenant shall deliver to Landlord rent rolls and occupancy
        statements for the prior monthly period.


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        	
                Monthly
                  Period

              	 	
                Monthly
                  Rent

              
	 	 	 
	
                May
                  2005 through October

              	 	
                $65,00

              
	
                2005
                  November 2005 through

              	 	
                0

              
	
                April
                  2006 May 2006 through

              	 	
                $70,00

              
	
                October
                  2006 November

              	 	
                0

              
	
                2006
                  through April 2007

              	 	
                $75,00

              


      

      


       

      3.2          Rent
        Payment Address, Late
        Payment Charge. All Monthly Rent and other
        charges payable by Tenant to Landlord hereunder (collectively, any "Payment")
        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. Landlord shall have the right at its election
        at any
        time during the Term of this Lease to require any and all Payments to be
        made by
        direct payment from Tenant's bank account, and Tenant shall execute and provide
        any documentation necessary to authorize such direct payment. Tenant
        acknowledges that late payment by Tenant to Landlord of any Payment will
        cause
        Landlord to incur costs not 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 Payment is not received by Landlord within seven
        (7)
        calendar days after its due date, Tenant shall pay to Landlord a late charge
        equal to six percent (6%) of such late Payment. The parties agree that this
        late
        charge represents a fair and reasonable estimate of the costs that Landlord
        will
        incur by reason of any late Payment by Tenant. Acceptance of any late charge
        shall not constitute a waiver of Tenant's default with respect to the late
        Payment, nor prevent Landlord from exercising any of the other rights and
        remedies available to Landlord hereunder, at law or in equity.

       

      3.3          Monthly
        Rent "Triple Net" to
        Landlord.  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
        each
        month during the Term (unless 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, except to the extent expressly provided herein.
        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), license fees and
        obligations of every kind and nature whatsoever relating to the use and/or
        operation of the Premises by Tenant which may accrue or become due during
        or out
        of the Term shall be paid by Tenant, and Tenant shall indemnify, defend and
        hold
        Landlord harmless from and against any liability for the same.


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      4.       MONTHLY
        RENT
        ADJUSTMENTS.

       

      4.1          CPI
        Adjustment.

       

      (a)          Commencing
        May 1, 2007, and annually thereafter throughout the remainder
        of the Term, the Monthly Rent then payable hereunder shall be adjusted,
        compounded annually, by the increase, if any, in the Consumer Price Index
        published by the Bureau of Labor Statistics of the United States Department
        of
        Labor for All Urban Consumers (1982-84=100) "All Items," Los Angeles-
        Riverside-Orange County, California (the "CPI"), which adjustments shall
        be
        subject to the limitations hereinafter set forth. The adjustments to the
        Monthly
        Rent provided for herein shall be calculated as follows: for each adjustment,
        the Monthly Rent payable immediately prior to the adjustment shall be multiplied
        by a fraction, the numerator of which shall be the CPI for the calendar month
        that is three (3) months prior to the lease year for which the adjustment
        is
        being calculated (in each case the "Comparison Index"), and the denominator
        of
        which shall be the CPI for the calendar month that is three (3) months prior
        to:
        (a) May 1, 2006, in the case of the first year of the first adjustment, or
        (b)
        the date on which the immediately preceding adjustment was calculated in
        the
        case of the subsequent adjustments (in either case, the "Base Index"). The
        sum
        so calculated shall constitute the adjusted Monthly Rent; provided,
        however, that the
        Monthly Rent shall not be decreased as a result of any adjustment, and no
        annual
        adjustment shall cause the Monthly Rent in effect prior to the adjustment
        to
        increase by less than three percent (3%) or more than six percent (6%) per
        annum.

       

      (b)          The
        following sample calculation is set forth for illustration purposes only,
        and
        is based upon the assumption that the commencement date of the Lease would
        be
        May 1, 2005, the CPI for February, 2006 will be 200 (the Base Index for the
        first adjustment), the CPI for February, 2007 will be 208 (the Comparison
        Index
        for the first adjustment and the Base Index for the second adjustment), the
        CPI
        for February, 2008 will be 213 (the Comparison Index for the second adjustment
        and the Base Index for the third adjustment), and the CPI for February, 2009
        will be 227 (the Comparison Index for the third adjustment and the Base Index
        for the fourth adjustment); then, based upon such assumptions:

       

      (i)  
        the adjusted Monthly Rent as of May 1, 2007 (the date upon which the first
        adjustment would take effect) would be $83,200.00 ($80,000.00 x 208/200 =
        $83,200.00);

       

      (ii)  
        the adjusted Monthly Rent as of May 1, 2008 (the date upon which the second
        adjustment would take effect) would be $85,696.00 ($83,200.00 x 213/208 =
        $85,200 -­however, the second adjustment would trigger the three percent
        (3%) minimum increase limitation because the foregoing CPI calculation would
        otherwise produce an adjustment less than the annual 3% minimum increase,
        therefore the substituted calculation would be as follows: $83,200.00 x 1.03
        =
        $85,696); and

       

      (iii) 
        the adjusted Monthly Rent as of May 1, 2009 (the date upon which the third
        adjustment would take effect) would be $90,837.76 ($85,696.00 x 227/213 =
        $91,328.60 -- however, the third adjustment would trigger the six percent
        (6%)
        CPI increase limitation because the foregoing CPI calculation would otherwise
        produce an adjustment in excess of the limitation, therefore the substituted
        calculation would be as follows: $85,696.00 x 1.06 =
        $90,837.76).


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


       

      (c)       Pending
        receipt of the required CPI index and determination of the actual adjustment,
        Tenant shall pay to Landlord an estimated adjusted Monthly Rent, as reasonably
        determined by Landlord by reference to the then available CPI figures. Any
        overpayment by Tenant shall be credited against the next installment of Monthly
        Rent due, and any underpayment shall be due and payable by Tenant within
        five
        (5) business days after determination of the adjustment. Landlord's failure
        to
        request payment of an estimated or actual adjustment shall not constitute
        a
        waiver of the right to any adjustment provided for in this Lease. In the
        event
        that the compilation and/or publication of the CPI shall be transferred to
        any
        other governmental department, bureau or agency, or shall be discontinued
        or
        materially changed, then the index most nearly the same as the discontinued
        or
        materially changed index, as determined by Landlord, shall be used to calculate
        the Monthly Rent adjustments contemplated hereunder.

       

      5.         SECURITY
        DEPOSIT.  Upon execution of this Lease, Tenant shall deliver
to
        Landlord (i) the sum of Four Hundred Fifty Thousand Dollars ($450,000) by
        wire
        transfer or cashier's check and (ii) commencing on May I, 2007 through and
        including February 1, 2010, in advance on a monthly basis, the sum of $3,000,
        until such time as the additional deposits shall reach a total of $100,000
        (collectively, the "Security Deposit"), as security for Tenant's prompt payment
        and performance of all of Tenant's obligations hereunder (and not as prepaid
        rent). Landlord shall not be required to keep the Security Deposit separate
        from
        Landlord's other accounts and no trust relationship shall be created with
        respect to the Security Deposit. In no event shall the Security Deposit be
        in
        lieu of or excuse Tenant from paying any portion of the Monthly Rent or any
        other Payment due and payable by Tenant hereunder at any time during the
        Term of
        this Lease. The taking 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 possession
        of the Premises or any other right or remedy that Landlord may at any time
        exercise upon Tenant's Default or breach of this Lease. No interest shall
        be
        payable by Landlord on the Security Deposit. Without waiving any of Landlord's
        rights or remedies hereunder, at law or in equity, Landlord may, at Landlord's
        option, apply all or any part of the Security Deposit to any unpaid Monthly
        Rent
        or other Payment due and payable by Tenant from time to time under this Lease
        (including but not limited to late charges), or to cure any other Default
        or
        breach of Tenant hereunder (including, but not limited to, the cost of
        maintenance and repair of the Premises). Upon the expiration of the Term
        of this
        Lease and Tenant's prompt surrender of possession of the Premises in accordance
        with the terms of this Lease, and provided that Tenant is not then in default
        hereunder (and/or no event has occurred which, with the giving of notice
        or the
        passage of time, could give rise to a default hereunder), Landlord shall
        return
        any portion of the Security Deposit to Tenant that has not been so applied
        by
        Landlord. Should all or any portion of the Security Deposit be so applied
        by
        Landlord at any time from time to time during the Term of this Lease, Tenant
        shall, upon the written request of Landlord promptly remit to Landlord an
        amount
        sufficient to restore 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 Landlord's written request therefor shall constitute
        a
        material default of Tenant under this Lease.

       

      6.      REAL
        ESTATE AND PERSONAL
        PROPERTY TAXES.  In addition to all Payments
        or other charges payable by Tenant hereunder, Tenant shall promptly pay all
        real
        estate taxes, levies and assessments imposed, levied upon or assessed against
        the Premises throughout the Term of this Lease. 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
        (including, without limitation, any increases thereto occasioned by any sale
        or
        transfer of ownership thereof), but shall not include personal income taxes,
        inheritance taxes or franchise taxes levied against the Landlord. In addition,
        throughout the Term of this Lease, 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. Tenant shall reimburse
        Landlord for real estate taxes paid directly by Landlord, which reimbursement
        shall be on or before the later of: (i) ten (10) days prior to the date
        delinquencies would be assessed by the taxing authority on such tax, if unpaid;
        or (ii) five (5) business days after written notice from Landlord to Tenant
        of
        the amount of Tenant's required tax reimbursement.


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      7.         INSURANCE.

       

      7.1          Throughout
        the entire Term hereof, Tenant shall, at its sole cost and expense, but for
        the
        mutual benefit of Landlord and Tenant, maintain general public liability
        insurance (including professional liability coverage) 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 Three Million Dollars ($3,000,000.00) in respect to any one accident
        and to the limit of not less than Two Million Dollars ($2,000,000.00) in
        respect
        to property damage.

       

      7.2          Throughout
        the entire Term of this Lease, Tenant shall, at its cost and expense,
        maintain fire and extended coverage insurance in an amount equal to the full
        replacement value of the Premises (exclusive of foundation and excavation
        costs), as such value shall be determined or revised by Landlord in its
        reasonable discretion from time to time. 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, Tenant shall 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, as amended or supplemented by any subordination,
        non-disturbance and attornment agreement executed by and between Tenant and
        such
        mortgagee. In addition, Tenant, at its own cost, shall either by separate
        policy
        or, at Landlord's option, by endorsement to a policy already carried, maintain
        insurance coverage on all Standard Furnishings, as well as any personal property
        owned by Landlord or Tenant and kept in, on or about the Premises, which
        insurance shall be full replacement cost coverage with a deductible not to
        exceed $25,000 per occurrence, and the proceeds of such insurance shall be
        used
        by Tenant solely for the replacement of Standard Furnishings and other personal
        property of Landlord or Tenant kept in, on or about the Premises. It is further
        understood and agreed that Tenant hereby waives any right of recovery from
        Landlord, its principals, agents and/or employees for any loss or damage
        (including consequential loss) resulting from any of the perils that would
        have
        been insured against in the insurance policies to be maintained by Tenant
        hereunder (except if caused by the gross negligence or willful misconduct
        of
        Landlord or its agents, employees or contractors), whether or not such coverage
        is actually in place at the time of such loss.

       

      7.3          Throughout
        the entire Term of this Lease, Tenant, at its sole cost and expense,
        shall maintain rental interruption insurance for the benefit of Landlord
        and
        business interruption or loss of income insurance on its own behalf for a
        coverage period of at least twelve (12) months. Landlord shall be named as
        an
        additional insured and all proceeds of such policy shall be paid jointly
        to
        Landlord and Tenant. Without limitation, such policy shall be maintained
        at
        coverage levels sufficient to perform all of the continuing monetary obligations
        of Tenant under this Lease.

       

      7.4
        Throughout the entire Term of this Lease, Tenant, at its sole cost and expense,
        shall maintain workers' compensation insurance in the amount required by
        statute, together with employer's liability coverage with a liability amount
        not
        less than One Million Dollars ($1,000,000) per occurrence.


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      7.5          All
        such policies of insurance to be maintained by Tenant hereunder shall
be
        issued
        in the name of Tenant and shall name Landlord, Royale Management Co., LLC
        and
        Landlord's lender (if any) as an additional insured, and Tenant shall promptly
        deliver copies of all such policies of insurance to 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. If Tenant fails to provide evidence of insurance after
        five
        (5) business days written notice from Landlord, Landlord shall have the right,
        but not the obligation, to place such insurance and the cost thereof shall
        be
        reimbursed by Tenant to Landlord as additional rent hereunder within two
        (2)
        business days of notice to Tenant of the cost thereof. Tenant's failure to
        maintain any of the insurance coverage to be maintained by Tenant hereunder
        or
        to reimburse Landlord for the cost thereof shall constitute a material default
        of Tenant under this Lease in accordance with the terms of Section 18
        below.

       

      8.         IMPOUND
        PAYMENTS. At
        Landlord's option or upon Tenant's request, Landlord
        may, at any time, establish an impound account and require that Tenant pay
        into
        such account, in advance on a monthly basis, an estimated amount sufficient
        in
        Landlord's reasonable judgment to cover all real and personal property taxes
        and
        all insurance premiums for insurance to be maintained by Tenant with respect
        to
        the Premises (such monthly payments being referred to hereinafter as "Impound
        Payments"). All Impound Payments received by Landlord shall be held in an
        institution chosen by Landlord, in its sole discretion, provided that the
        deposits of such institution are insured by a federal or state agency. Landlord
        shall be permitted to commingle any such Impound Payments with its own funds
        or
        the funds of other tenants of Landlord (or Landlord's affiliates), as Landlord
        shall determine in its sole discretion. Landlord shall apply the Impound
        Payments toward payment of the real estate taxes, personal property taxes
        and
        insurance premiums otherwise payable by Tenant hereunder; provided, however,
        that Landlord shall only be obligated to so apply the Impound Payments
        to
        the extent of the balance of Impound Payments actually received by Landlord
        from
        Tenant. Any Impound Payments received or held by Landlord hereunder shall
        not
        bear interest for Tenant's benefit. Upon Landlord's exercise of its option
        to
        collect such Impound Payments from Tenant, Tenant's prompt payment of such
        Impound Payments to Landlord shall be a material covenant of Tenant and
        additional rent under this Lease. Landlord shall provide to Tenant an annual
        accounting of any Impound Payments received by Landlord, reflecting all credits
        and debits to the balance of the Impound Payments and the purpose for which
        each
        debit to such balance was made. If the balance of the Impound Payments held
        by
        Landlord, together with the future monthly Impound Payments payable by Tenant
        prior to the due dates of real estate taxes, personal property taxes and
        insurance premiums shall exceed the amount required to pay said real estate
        taxes, personal property taxes and insurance premiums as they fall due, at
        Landlord's option, such excess may either be repaid to Tenant or credited
        toward
        the next monthly Impound Payment(s) due from Tenant. If the balance of the
        Impound Payments held by Landlord, together with the future monthly Impound
        Payments payable by Tenant prior to the due dates of real estate taxes, personal
        property taxes and insurance premiums shall be insufficient to pay real estate
        taxes, personal property taxes and insurance premiums as they fall due, Tenant
        shall pay to Landlord any amount necessary to make up the deficiency within
        three (3) business days of Landlord's request.

       

      9.    UTILITIES. 
        Tenant shall contract directly for and pay before delinquency all charges
        relating to water, gas, heat, electricity, power, telephone service, trash
        collection and all other services and utilities used in, upon 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,
        unless such interruption is caused by the gross negligence or willful misconduct
        of Landlord or its agents, employees or contractors.


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      10.          STANDARD
        FURNISHINGS. Landlord
        has
        provided and/or installed all standard furnishings, fixtures and equipment
        reasonably necessary for the operation of an RCFE. Tenant acknowledges and
        agrees that all standard furnishings, fixtures and equipment and vehicles
        currently at the Premises have been provided by Landlord and are as more
        particularly described on Exhibit "B" attached hereto and shown on a video
        taken, _________ 2005 hereby incorporated herein and made a part hereof
        (collectively, the "Standard Furnishings"). Tenant acknowledges and agrees
        to
        timely make all payments to NBR International Leasing Co. in connection with
        the
        2003 Starcraft Starlite Van License No. 5037KWD ("Vehicle"). Notwithstanding
        the
        foregoing, title to the Vehicle shall remain with Landlord and such vehicle
        (or
        comparable replacement thereof) shall be returned to Landlord at the expiration
        or earlier termination of this Lease. Tenant hereby acknowledges that the
        Standard Furnishings provided by Landlord are of such nature and quality
        as are
        customarily found in similar facilities owned by Landlord (or Landlord's
        affiliates) and leased to other operators.

       

      11.          USE

       

      11.1
        Use. Tenant
        shall use the facility for the operation of a licensed RCFE, and for no other
        purpose whatsoever without Landlord's prior written consent, which consent
        may
        be withheld in Landlord's sole and absolute discretion. Tenant shall not
        do,
        bring or keep anything in, on or about the Premises that will cause a
        cancellation of any insurance maintained by either Landlord or Tenant with
        respect to the Premises or any personal property located or used thereon,
        and
        Tenant shall comply with all requirements imposed by the insurance companies
        issuing such insurance. Tenant shall not use the Premises in any manner that
        will constitute waste of the Premises or a nuisance or unreasonable annoyance
        to
        owners or occupants of adjacent properties. 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. 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. Tenant shall comply with,
        and
        the leasehold created by this Lease shall at all times be subject to, all
        covenants, conditions, restrictions, easements and rights of way affecting
        the
        Premises or the real property on which the Premises are located. At Landlord's
        request, Tenant shall furnish any bond which may be required by law in
        connection with the holding of any funds from residents, including resident's
        trust funds, and an accounting therefor. Tenant shall be fully responsible
        for
        such funds, and agrees to indemnify, defend and hold Landlord harmless from
        and
        against any losses, liabilities, costs or expenses arising in connection
        therewith. 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.

       

      11.2
Licensing;
        Continuous
        Operation. Tenant
        shall
        cause the Premises to be and remain
        licensed and certified by the applicable federal, state and/or local
        governmental agencies as an RCFE, and shall maintain such license(s) and
        certifications in good standing throughout the Term of this Lease. Provided
        that
        Tenant is given access to the current Executive Director and receives a copy
        of
        the most recent licensing application, then within ten (10) days of the
        execution of this Lease, Tenant shall, at Tenant's expense, promptly file
        and
        diligently pursue a complete application with the California Department of
        Health Services for a license to operate an RCFE on the Premises. Tenant's
        failure to timely file such application shall constitute a material default
        of
        Tenant under this Lease. Tenant and Coogan Management Co., LLC shall enter
        into
        an interim management agreement to allow Tenant to utilize the existing RCFE
        license for a period not to exceed four (4) months.


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Tenant
        shall promptly forward copies to Landlord of any and all notices received
        by
        Tenant from any applicable federal, state and/or local governmental licensing
        agency with respect to the status of Tenant's license to operate an RCFE
        on the
        Premises. From and after Tenant's acceptance of possession of the Premises
        and
        at Tenant's sole cost and expense, Tenant shall continuously operate the
        Premises as an RCFE without interruption throughout the Term hereof (subject
        to
        reasonable periods relating to casualty, condemnation, force majeure or
        renovations), and Tenant shall cause the Premises to comply with any and
        all
        requirements and/or regulations governing the operation of an RCFE, including,
        without limitation, Tenant's obligations to comply with Applicable Laws and
        maintain and repair the Premises, as hereinafter set forth. Tenant's failure
        to
        provide Landlord, within five (5) business days of Tenant's receipt thereof,
        with copies of any notice(s) received by Tenant from any applicable federal,
        state and/or local governmental licensing agency with respect to the status
        of
        Tenant's license to operate an RCFE on the Premises, or Tenant's failure
        to
        continuously operate (subject to reasonable periods relating to casualty,
        condemnation, force majeure or renovations) an RCFE on the Premises throughout
        the Term of this Lease (whether voluntarily, by decree of any licensing agency
        or by operation of law) shall each independently constitute a material default
        hereunder in accordance with the terms of Section 18, and shall, at Landlord's
        option by written notice to Tenant, immediately terminate this
        Lease.

       

      11.3
        Hazardous
        Substances. 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 other materials that are or may be hazardous or injurious
        to
        the environment or to persons or property (collectively "hazardous substances").
        Excluded from this prohibition are hazardous substances of the type commonly
        used in an RCFE in California, subject to the condition that all such substances
        used by Tenant on the Premises are used, stored, and disposed of in accordance
        with all Applicable Laws (as such term is defined in Paragraph 13 below).
        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 6901, 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 2601, 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 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, et 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 or similar 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 thereto.


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      12.          MAINTENANCE
        AND REPAIR;
        CAPITAL IMPROVEMENTS; SURRENDER.

       

      12.1
        Maintenance of
        Premises.Tenant shall, during the Term, at its sole 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, the roof, plate glass, wiring, plumbing, heat and air conditioning
        units, parking and service areas, landscaping, elevator and the approaches
        thereto and appurtenances thereof, including all adjacent sidewalks and alleys.
        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 reasonably required by Landlord. Tenant
        acknowledges that Tenant's maintenance and repair obligations hereunder shall
        include replacement of carpet, paint and wallpaper at the expiration of their
        useful life if replacement has not previously been required hereunder.
        Notwithstanding the foregoing, all carpet in the Premises shall have been
        replaced within the last 3 years prior to the termination of this Lease,
        whether
        by expiration of the Term or otherwise. Landlord shall not have any
        responsibility to maintain the Premises or any part thereof, whether structural
        or non-structural, interior or exterior. Tenant hereby waives all rights
        under
        any applicable law, rule or ordinance that provides or allows for Tenant's
        right
        to make repairs and deduct the cost of such repairs from the Monthly Rent
        or any
        other Payment due and payable by Tenant hereunder. Landlord reserves and
        retains
        the right to lease the roof and exterior portions of the Premises (provided
        such
        lease does not materially interfere with Tenant's signage rights pursuant
        to
        Section 23.2) to third parties for the installation of satellite dishes,
        antenna, billboards, among other things and Tenant shall not be entitled
        to any
        abatement of Monthly Rent and/or any portion of the revenue from such leases;
        provided, Tenant shall have the right to reasonably approve: (i) the type
        of
        materials and method of attachment, (ii) the cosmetic impact of any attachment
        such that it will not negatively impact the marketability of the Premises,
        and
        (iii) the content, so that no disreputable or competitive advertisements
        are
        installed. Furthermore, Landlord shall be responsible for any damage and
        any
        ongoing required maintenance directly caused by such installation.

       

      12.2
        Maintenance of
        Personal Property. 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 repair, including, without
        limitation, all repairs, alterations, replacements and additions to the Premises
        required by law and/or as necessary to obtain and maintain licensing for
        the
        operation of the Premises as an RCFE and all Standard Furnishings located
        on the
        Premises at the commencement of the Term (as more particularly described
        on
        Exhibit "B" and shown on the video referenced in Paragraph 10 above). Tenant
        shall have the right to install on the Premises any and all additional equipment
        and fixtures that Tenant desires to install thereon and which are necessary
        or
        convenient to Tenant's use of the Premises as permitted herein, without
        Landlord's consent, provided that Tenant shall provide Landlord with a detailed
        description of all of such additional equipment (as well as any subsequent
        replacements thereto) so that such additional equipment may be distinguished
        from the Standard Furnishings to be surrendered by Tenant to Landlord upon
        the
        expiration or sooner termination of this Lease. All such additional property
        so
        installed by Tenant shall remain Tenant's property and, provided Tenant is
        not
        in default hereunder, may be removed by Tenant from the Premises. Tenant
        shall
        not remove any of the Standard Furnishings installed by Landlord and/or any
        replacements or substitutions therefor, or any part thereof, from the Premises,
        without the prior written consent of Landlord. As a part of Tenant's maintenance
        obligations hereunder, Tenant shall purchase and replace, with substitutes
        of
        equal or higher quality, any worn out or broken items of Standard Furnishings
        throughout the Term at Tenant's sole cost and expense. Such items being replaced
        by Tenant, to the extent that they are in substitution for items originally
        provided by Landlord, shall immediately become the property of Landlord.
        Tenant
        agrees to periodically provide Landlord with a detailed list of all such
        replacements or substitutions, and upon written request from Landlord, to
        execute any and all documents necessary to fully evidence Landlord's ownership
        of all such personal property


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      12.3
        Capital Improvement
        Fund. During every twelve (12) month period commencing May 1, 2005,
        Tenant shall complete at least $40,000 of capital improvements at the Premises.
        On or before May 1, 2006 and annually thereafter, Tenant shall deliver to
        Landlord: (i) a schedule with detailed descriptions and documentation reasonably
        satisfactory to Landlord evidencing the amount of capital improvements completed
        in the prior 12-month period commencing May 1; (ii) if such amount is less
        than
        $40,000, cash equal to the difference between $40,000 and the total of the
        documented, completed capital improvements; and (iii) requests (if any) for
        disbursement from the Capital Improvement Fund in accordance with the terms
        and
        provisions of this Section 12.3. Such funds shall be held by Landlord in
        a
        "Capital Improvement Fund", which shall not bear interest for the benefit
        of
        Tenant. If Tenant completes more than $40,000 of capital improvements at
        the
        Premises during a 12-month period commencing May 1, Tenant shall be entitled,
        upon prior written request to Landlord and subject to Landlord's reasonable
        approval, to either (1) withdraw funds (to the extent such funds have been
        deposited by Tenant in prior years) from the Capital Improvement Fund to
        cover
        the costs in excess of $40,000 incurred by Tenant for capital improvements
        to
        the Premises; provided, further each such withdrawal request shall be for
        a
        minimum of $5,000 and each item comprising such request shall be for a minimum
        of $1,000, or (2) to the extent insufficient funds exist in the Capital
        Improvement Funds, Tenant shall be entitled to a "Capital Improvement Credit",
        which may be carried forward and applied against the required $40,000 of
        capital
        improvements to be completed in a subsequent 12-month period.

       

      12.4
        Surrender.Tenant
        hereby acknowledges and agrees that upon the commencement date of the Term
        hereof, the Premises are a fully-equipped and furnished facility in a manner
        consistent with a fully licensable facility for operation as an RCFE. As
        an
        express and material condition precedent to Landlord's agreement to enter
        into
        this Lease, and as a material element of consideration hereunder, Tenant
        hereby
        agrees and covenants that Tenant shall surrender possession of the Premises
        to
        Landlord upon the expiration or any sooner termination of this Lease in good
        and
        complete condition, equivalent to or better than the condition as of the
        date
        Lessee first took possession of the Premises at the commencement of the Lease
        and fully operable and leasable as an RCFE, and, as a part thereof, Tenant
        shall
        also surrender possession of and return to Landlord, in good and complete
        condition and repair (equivalent to or better than the condition at the
        commencement of the Term) all Standard Furnishings installed on the Premises
        at
        the commencement of the Term (as more particularly described on Exhibit "B"
        and
        shown on the video referenced in Paragraph 10 above), and any and all
        replacements and substitutions therefor, all of which shall be and remain
        the
        property of Landlord.

       

      13.          COMPLIANCE
        WITH LAWS
        Tenant shall, at Tenant's sole cost and expense, comply with all municipal,
        state and federal laws, ordinances, rules, regulations, orders or directives
        in
        force or promulgated during the Term hereof as the same shall apply to the
        Premises, Tenant's use thereof, and Tenant's operation of an RCFE (collectively,
        all "Applicable Laws"). In light of the length of the Term of this Lease,
        it is
        the express intention and understanding of Landlord and Tenant that Tenant
        shall
        bear full responsibility for any and all measures necessary or appropriate
        in
        order to cause the Premises and Tenant's operation of the RCFE to comply
        with
        all Applicable Laws throughout the entire Term hereof, to the same extent
        as if
        Tenant were the owner of the Premises. 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
        relating to the Premises or Tenant's use thereof or business thereon, shall
        be
        conclusive of that fact as between the Landlord and Tenant, and shall, subject
        to Section 18, at Landlord's option, terminate this Lease. It is agreed and
        understood by and between Landlord and Tenant that, in order to conduct the
        business proposed for the Premises, the State of California shall issue and
        renew a license to allow Tenant to operate an RCFE. Any termination or
        conditional or provisional reissuance of such license shall constitute a
        material default under this Lease, subject to Section 18. In the event that
        any
        investigation, litigation, accusation, or other administrative or legal action
        or proceeding (collectively, "Action") is initiated or threatened by a public
        agency against Tenant and/or the Premises, within five (5) business days
        after
        Tenant becomes aware or receives written notice of such Action, Tenant shall
        give written notice to Landlord of such Action and shall concurrently and
        thereafter deliver to Landlord copies of all written materials and/or documents
        regarding such Action.


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      14.          ALTERATIONS.
        Tenant
        shall not make, or suffer to be made, any alterations or additions to the
        Premises, or any part thereof, without the prior written consent of Landlord,
        and any such 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. To the extent that Tenant shall desire to make any
        alterations or additions to the Premises, Tenant shall submit to Landlord
        for
        Landlord's review and approval, detailed plans and specifications for the
        proposed alterations or additions. Any such alterations or additions approved
        by
        Landlord shall be constructed by a contractor selected by Tenant but approved
        by
        Landlord, shall be constructed in a good and workmanlike manner and of good
        and
        sufficient materials, in accordance with the plans and specifications approved
        by Landlord, and in accordance with all Applicable Laws. Tenant shall be
        responsible for obtaining and complying with the terms and provisions of
        any
        permits or approvals required in connection with any alterations or additions
        to
        the Premises constructed by Tenant. Tenant shall, promptly upon completion
        of
        any such alterations or improvements to the Premises deliver to Landlord
        all
        as-built plans and specifications therefor. Landlord may, but shall not be
        obligated to, condition Landlord's consent to any alterations or additions
        to
        the Premises costing $10,000 or more upon Tenant's delivery of a lien and
        completion bond in an amount equal to one hundred fifty percent (150%) of
        the
        estimated cost of the proposed alterations or additions to the Premises.
        In any
        case, Tenant shall keep the Premises free from any liens arising out of any
        work
        performed, material furnished, or obligation incurred by Tenant, whether
        in
        connection with any alterations or additions to the Premises or
        otherwise.

       

      15.         DAMAGE
        AND
        DESTRUCTION.

       

      15.1
        In
        the event that any portion of the Premises shall be damaged or destroyed
        by fire
        or other casualty, but the Premises are not thereby rendered untenantable
        in
        whole or in part, Landlord shall cause such damage or destruction to be repaired
        at Landlord's cost and expense (in excess of any insurance proceeds paid
        in
        connection with such damage or destruction, all of which proceeds shall be
        promptly paid or made available to Landlord), and the Monthly Rent and all
        other
        Payments provided for under this Lease shall not be abated during the repair
        period as to any portion of the Premises, including, without limitation,
        the
        portion rendered untenantable, but only to the extent that the repair period
        does not exceed the period for which coverage is to be provided under the
        business interruption insurance to be maintained by Tenant (whether or not
        such
        insurance is actually in place). Notwithstanding the foregoing, Tenant shall
        be
        solely responsible for the cost of any repair to or restoration of the Premises
        required as the result of the negligence or willful misconduct of Tenant
        or
        Tenant's employees, agents or invitees.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      15.2
        In
        the event that the Premises are damaged or destroyed by fire or other casualty,
        and the Premises or any substantial portion thereof shall be rendered
        untenantable, Landlord shall have the option to: (a) repair the damage at
        Landlord's cost and expense (in excess of any insurance proceeds paid in
        connection with such damage or destruction, all of which proceeds shall be
        promptly paid or made available to Landlord), in which case the Monthly Rent
        and
        all other Payments provided under this Lease shall not be abated during the
        repair period as to any portion of the Premises, including, without limitation,
        the portion rendered untenantable, but only to the extent that the repair
        period
        does not exceed the period for which coverage is to be provided under the
        business interruption insurance to be maintained by Tenant (whether or not
        such
        insurance is actually in place) or (b) terminate this Lease upon thirty (30)
        days prior written notice to Tenant of Landlord's election to do so. If Landlord
        elects to terminate this Lease, all Monthly Rent and other Payments and
        obligations hereunder shall be prorated as of the date upon which the coverage
        to be provided under the business interruption insurance to be maintained
        by
        Tenant does expire or would have expired (whether or not such insurance is
        actually in place). Notwithstanding the foregoing, in the event that Landlord
        elects not to repair such damage to the Premises, Tenant shall have the option
        to elect to not to have the Lease terminate, but instead to bear the cost
        of all
        such repairs, subject to the following conditions: (a) Tenant shall notify
        Landlord of such decision in writing within thirty (30) days after receipt
        of
        notice that Landlord has elected to terminate the Lease; (b) all repairs
        to be
        performed by Tenant shall be performed in accordance with the provisions
        of
        Paragraph 14 above (governing Tenant's construction of alterations and additions
        to the Premises); (c) all repairs and or restorations so constructed shall
        immediately become a part of the Premises and the property of Landlord; and
        (d)
        Tenant shall diligently pursue and cause all such repairs to be completed
        as
        soon as possible, but in no event later than six (6) months after the date
        upon
        which Tenant elects to perform such repairs. In the event that Tenant shall
        elect to proceed with such repairs in accordance with the immediately preceding
        sentence, Landlord and Tenant agree that: (i) Landlord shall make available
        all
        insurance proceeds paid or payable to Landlord in connection with such damage
        or
        destruction, and (ii) any and all cost and expense of such repairs in excess
        of
        the foregoing insurance proceeds shall be solely Tenant's
        obligation.

       

      Notwithstanding
        any contrary provision of this Lease or the unavailability of insurance
        proceeds, Tenant shall be solely responsible for the cost of any repairs
        required as a result of the negligence or willful misconduct of Tenant or
        Tenant's employees, agents or invitees. To the extent applicable, Tenant
        hereby
        waives any provisions of any California statute, rule, or ordinance or law
        governing the respective obligations of landlords and tenants in the event
        of
        any damage to or destruction of leased premises, and Landlord and Tenant
        agree
        that the respective rights and obligations of Landlord and Tenant in the
        case of
        any such damage or destruction shall be governed by the provisions of this
        Lease.

       

      16.          WAIVER
        AND
        INDEMNIFICATION. 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 on or after the Commencement
        Date, other than the gross negligence or willful misconduct of Landlord or
        Landlord's partners, principals, agents, employees, contractors, attorneys
        and
        their respective successors, heirs and assigns. Except to the extent directly
        caused by the gross negligence or willful misconduct of Landlord or Landlord's
        partners, principals, agents, employees, contractors, attorneys and their
        respective successors, heirs and assigns, Tenant hereby agrees to indemnify,
        defend (with counsel reasonably satisfactory to Landlord), protect and hold
        Landlord and Landlord's partners, principals, agents, employees, contractors,
        attorneys and their respective successors, heirs and assigns free and harmless
        from and against any and all costs, losses, liabilities or expenses of any
        nature whatsoever to the extent arising, whether directly or indirectly on
        or
        after the Commencement Date, and (a) relating in any manner to Tenant's
        occupancy, use, operation, maintenance or repair of the Premises, (b) arising
        in
        connection with any damage to or destruction of the Premises or any personal
        property thereon or any person therein during the Term hereof for any reason,
        (c) resulting from any failure of Tenant to maintain the Premises as a licensed
        RCFE at any time during the Term of this Lease, (d) arising in connection
        with
        any Actions concerning the Premises, Tenant or Tenant's business, and/or
        (e)
        arising as a result of or in connection with the presence of any hazardous
        substances on, about or under the Premises, but specifically excluding any
        conditions existing prior to the Commencement Date. All indemnification
        obligations set forth in this paragraph and elsewhere in this Lease shall
        survive the expiration or any sooner termination of this Lease.


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      17.          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 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 and absolute discretion
        of
        Landlord. Any prospective assignee or sublessee shall have both financial
        experience and operating experience for an RCFE. In connection with any such
        proposed assignment, Tenant shall deliver to Landlord the financial statement
        and experience resume of any potential new lessee, together with any other
        information requested by Landlord. A change in control or ownership of Tenant
        (or Tenant's operating entity, if Tenant is an individual or individuals)
        shall
        constitute an assignment requiring Landlord's consent. Any transfer, on a
        cumulative basis, of more than twenty-five percent (25%) of the voting control
        and/or equity ownership of Tenant (or Tenant's operating entity, if Tenant
        is an
        individual or individuals) shall constitute a "change in control" of Tenant
        for
        purposes of this Paragraph.

       

      Notwithstanding
        anything to the contrary hereinabove, Tenant may assign the Lease to Summerville
        Senior Living, Inc., a Delaware corporation ("SSL") or its affiliates, without
        Landlord's consent, and a subsequent change of control of SSL shall not require
        Landlord's consent; provided that in each instance Tenant pays to Landlord
        any
        and all costs incurred (including in-house counsel costs and expenses) in
        connection with review and documentation of such assignment. Landlord's consent
        to one assignment, subletting or occupation shall not be deemed to be Landlord's
        consent to any subsequent assignment, subletting or occupation. Landlord's
        consent to an assignment, subletting or occupation or a transfer permitted
        without Landlord's consent hereunder shall not in any event release the original
        named Tenant (or any successor tenant) from liability for the continued
        performance of all of the terms and provisions on the part of Tenant to be
        kept
        and performed hereunder, unless Landlord specifically and in writing releases
        the original named Tenant (or any successor tenant, as the case may be) from
        said liability.

       

      Notwithstanding
        the foregoing, any private or public offering involving all or substantially
        all
        of the assets of Tenant, SSL or its affiliates shall be a permitted transfer
        under the Lease which does not require Landlord's consent. The original named
        Tenant, SSL or its affiliate shall be released from liability for the continued
        performance of all of the terms and provisions on the part of Tenant to be
        kept
        and performed hereunder, provided the new tenant after such private or public
        offering has a current net worth, calculated in accordance with generally
        accepted accounting principles, consistently applied, greater than Fifteen
        Million Dollars ($15,000,000.00).


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Any
        assignment or subletting (for which Landlord's consent is required) without
        the
        prior written consent of Landlord shall be void and shall, at the option
        of
        Landlord, terminate this Lease. In the event that Tenant (or any successor
        tenant) assigns this Lease or sublets the Premises (subject to Landlord's
        consent rights as set forth in this Lease, if required), and if any
        consideration or rent payable to such Tenant in connection with said assignment
        or subletting (in whatever form, including,
        without
        limitation, any down payment or bonus payment, any transfer fee or
        consultation fee, or any consideration or payment for goodwill inherent in
        Tenant's conduct of its business at the Premises) is greater than the rent
        to be
        paid by Tenant to Landlord under this Lease during the period of time which
        said
        assignment or subletting remains in effect (such excess, hereinafter the
        "Excess
        Consideration"), then Tenant shall pay to Landlord, as additional rent under
        this Lease, one half (1/2) of such Excess Consideration immediately as and
        when
        such Excess Consideration is payable to Tenant. In the event of a subletting
        of
        only a portion of the Premises, in calculating whether any Excess Consideration
        will be generated by such subletting, the rent payable under the Lease shall
        be
        prorated according to the square footage involved in order to reflect the
        rent
        applicable to the space sublet. This Section 17 shall not apply to the
        subleasing of space to RCFE ancillary service providers, such as beauty shop
        operators, therapy providers, health care providers, and the like.
        Notwithstanding anything to the contrary hereinabove, this Excess Consideration
        shall not apply with respect to any transfer for which Landlord's consent
        is not
        required pursuant to this Section 17.

       

      18.  DEFAULT

       

      18.1
        Notwithstanding anything to the contrary in this Lease, only the

       

      occurrence
        of any one of the following events shall constitute a "Default" hereunder
        by
        Tenant:

       

      (a)          The
        failure by Tenant to make any payment of rent or of any other payment required
        to be made by Tenant under this Lease within five (5) business days after
        Landlord delivers to Tenant written notice that the same is due and
        payable.

       

      (b)          The
        failure by Tenant to observe or perform any of the other covenants or conditions
        of this Lease to be observed or performed by Tenant within thirty (30) days
        after Landlord delivers written notice thereof to Tenant; provided, however,
        that if the nature of Tenant's obligation is such that more than thirty (30)
        days are reasonably required for its performance, then Tenant shall not be
        deemed to be in default if it commences performance within such thirty (30)
        day
        period and thereafter diligently prosecute the same to completion.

       

      In
        the
        event that a Default occurs under this Lease, then in addition to any other
        rights or remedies of Landlord hereunder or at law or in equity, Landlord
        shall
        have the immediate right of reentry and may remove all persons and property
        from
        the Premises, using any legal proceedings that may be available, 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 reenter,
        as
        herein provided, or should Landlord take possession of the Premises 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 terms and conditions as Landlord
        in
        Landlord's sole discretion may deem advisable, with the right to make
        alterations and repairs to the Premises.


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      18.2
        Upon
        such reletting: (a) Tenant shall be immediately liable to pay to Landlord,
        in
        addition to any other obligations of Tenant to Landlord hereunder, the cost
        and
        expenses of such reletting (and any related alterations to or repairs of
        the
        Premises) 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
        the
        Term, exceeds the amount agreed to be paid as rent for the Premises for the
        period of such reletting, or (b) at the option of Landlord, rents received
        by
        such Landlord from such reletting shall be applied as follows: (i) first,
        to the
        payment of any obligations of Tenant to Landlord other than the Monthly Rent
        and
        other Payments called for hereunder; (ii) second, to the payment of any costs
        and expenses of such reletting and of any related alterations and/or repairs;
        (iii) third, to the payment of Monthly Rent and other Payments due and unpaid
        hereunder; and the residue, if any, shall be held by Landlord and applied
        in
        payment of future obligations of Tenant as the same may become due and payable
        hereunder. If Tenant has been credited with any rental payments to be received
        by such reletting under option (a), and such rental payments shall not be
        promptly paid to Landlord by the successor occupant of the of the Premises,
        or
        if such rental payments received from reletting under option (b) during any
        month shall be less than the obligations of Tenant to be paid during that
        month
        hereunder, then in such case, Tenant shall promptly pay any such deficiency
        to
        Landlord on a monthly basis.

       

      18.3
        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 intention be given to Tenant or unless the termination thereof
        be
        decreed by a court of competent jurisdiction. Notwithstanding any reletting
        without termination, Landlord may at any time thereafter elect to terminate
        this
        Lease for such previous Default.

       

      18.4
        Should Landlord at any time elect to terminate this Lease for any Default,
        in
        addition to any other remedies Landlord may have hereunder or at law or in
        equity, Landlord may recover from Tenant all damages incurred by Landlord
        by
        reason of such Default, 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 other charges equivalent to rentals and charges reserved
        in this Lease for the remainder of the Term of this Lease over the then
        reasonable rental value of the Premises for the remainder of the Term, all
        of
        which amounts shall be immediately due and payable from Tenant to
        Landlord.

       

      18.5
        Notwithstanding anything to the contrary set forth herein, at Landlord's
        option,
        any Default of Tenant hereunder shall constitute a default under all other
        leases between Landlord (or Landlord's affiliates) and Tenant (or Tenant's
        parent or affiliates, including, but not limited to, Summerville Investors,
        LLC
        and Summerville Senior Living, Inc. (or SSL's subsidiaries or affiliates)
        from
        and after a transfer to SSL pursuant to Section 17 above) (collectively,
        the
        "Related Party Leases"), and vice versa, and to that end, Tenant hereby agrees
        that all Related Party Leases shall be and hereby are amended to reflect
        that
        any default of Tenant following applicable cure periods, respectively or
        collectively, thereunder shall constitute a Default of Tenant under this
        Lease.
        As used herein, the term "Related Party Leases" shall also mean and refer
        to any
        and all subsequent leases entered into by and between Landlord (and/or its
        affiliates) and Tenant (and/or its affiliates). Tenant hereby agrees to execute
        and to cause any affiliate of Tenant executing any future lease with Landlord
        or
        Landlord's affiliate to promptly execute and deliver to Landlord an amendment
        to
        the Lease and/or such Related Party Lease effectuating the cross-default
        provision set forth in this paragraph.

       

      As
        used
        herein, the term "Related Party Leases" shall mean and refer, without
        limitation, to this Lease and to each of the following leases (including
        any
        amendments thereto or restatements thereof) from and after a transfer to
        SSL
        pursuant to Section 17 above, a transfer of this Lease to a parent or affiliate
        of the then tenants set forth below, and/or a transfer of the lessee's interest
        under the following leases to a parent or affiliate of the then tenant under
        this Lease:


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      (i)                 that
        certain Amended and Restated Lease Agreement dated as of November 1, 1994,
        between Landlord's affiliate, ALHAMBRA ROYALE, a California limited partnership,
        as landlord and JERRY AGAM, an individual, and PACIFIC MANOR, INC., a California
        corporation, collectively as tenant, for premises located at 1 E. Commonwealth,
        Alhambra, California, as amended by that certain Amendment to Lease Agreement
        and Consent Agreement dated August 28, 1998, by and among ALHAMBRA ROYALE,
        a
        California limited partnership, as landlord, PACIFICA MANOR, INC., a California
        corporation, and JERRY AGAM, collectively as Original Tenant, and COBBCO
        INC.,
        as New Tenant pursuant to which landlord consented to the assignment and
        assumption of the Lease by Summerville at Cobbco, Inc., provided that Original
        Tenant remains liable for the performance of Tenant's obligations under the
        Amended and Restated Lease Agreement;

       

      (ii)                 that
        certain Amended and Restated Lease Agreement dated as of November 1, 1994,
        between Landlord's affiliate, CHATSWORTH ROYALE, a California limited
        partnership, as landlord and JERRY AGAM, an individual, and PACIFIC MANOR,
        INC.,
        a California corporation, collectively as tenant, for premises located at
        20801
        Devonshire Street, Chatsworth, California, as amended by that certain Amendment
        to Lease Agreement and Consent Agreement dated August 28, 1998, by and among
        CHATSWORTH ROYALE, a California limited partnership, as landlord, PACIFICA
        MANOR, INC., a California corporation, and JERRY AGAM, collectively as Original
        Tenant, and COBBCO INC., as New Tenant pursuant to which landlord consented
        to
        the assignment and assumption of the Lease by Summerville at Cobbco, Inc.,
        provided that Original Tenant remains liable for the performance of Tenant's
        obligations under the Amended and Restated Lease Agreement; and

       

      (iii)
        that certain Amended and Restated Lease Agreement dated as of November 1,
        1994,
        between Landlord's affiliate, CLAIREMONT ROYALE, a California limited
        partnership, as landlord and JERRY AGAM, an individual, and PACIFIC MANOR,
        INC.,
        a California corporation, collectively as tenant, for premises located at
        5219
        Clairemont Mesa Boulevard, San Diego, California, as amended by that certain
        Amendment to Lease Agreement and Consent Agreement dated August, 1998, by
        and
        among CLAIREMONT ROYALE, a California limited partnership, as landlord, PACIFICA
        MANOR, INC., a California corporation, and JERRY AGAM, collectively as Original
        Tenant, and COBBCO INC., as New Tenant pursuant to which landlord consented
        to
        the assignment and assumption of the Lease by Summerville at Cobbco, Inc.,
        provided that Original Tenant remains liable for the performance of Tenant's
        obligations under the Amended and Restated Lease Agreement.

       

      18.6
        Landlord shall be in default under this Lease if Landlord fails to perform
        any
        material obligation required to be performed by Landlord under this Lease
        within
        thirty (30) days after the receipt of notice thereof from Tenant; provided,
        however, that if the nature of such default is such that the same cannot
        reasonably be cured within such thirty (30) day period, Landlord shall not
        be
        deemed to be in default if Landlord shall within such period commence such
        cure
        and thereafter diligently prosecute the same to completion. Upon any such
        material default by Landlord, Tenant may exercise such rights and remedies
        as
        are provided in this Lease or at law or in equity.


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
         

        19.  
            SUBORDINATION,
          ATTORNMENT;
          ESTOPPELS. This Lease and all rights of Tenant herein shall be and remain
          subject and subordinate to the lien or charge of any mortgage or deed of
          trust
          in favor of any bank, insurance company or other lending institution, now
          or
          hereafter in force and encumbering the land and/or 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 modifications, supplements and
          advances made or hereafter to be made upon the security thereof. Tenant
          shall
          promptly execute and deliver any writing reasonably required by Landlord
          or any
          mortgagee or lender of Landlord to evidence such subordination, provided
          that
          such writing also includes commercially customary nondisturbance provisions
          reasonably acceptable to Tenant. In the event that 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 Landlord encumbering the Premises, Tenant
          shall attorn to the purchaser upon any such foreclosure or sale and recognize
          such purchaser as the Landlord under this Lease. 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 Landlord, Tenant
          shall
          execute and deliver to Landlord an estoppel statement in form and content
          reasonably satisfactory to Landlord or any prospective mortgagee, lender
          or
          purchaser confirming the primary terms of this Lease and certifying, among
          other
          things, that this Lease is in full force and effect (if such be the case)
          and
          that Tenant has no offsets, claims or defenses whatsoever under this Lease,
          other than those expressly set forth in such estoppel statement. Landlord
          shall
          use commercially reasonable efforts to obtain a Subordination and Nondisturbance
          Agreement from Union Bank of California, N.A. Within ten (10) days after
          request
          therefor by Tenant, Landlord shall execute and deliver to Tenant an estoppel
          statement in form and content reasonably satisfactory to Tenant confirming
          the
          primary terms of this Lease and certifying, among other things, that this
          Lease
          is in full force and effect (if such be the case).

         

      

      20.         CONDEMNATION.
If
        the
        Premises or any part thereof are taken by eminent domain or sold under the
        threat of exercise of such power, this Lease shall terminate as to the part
        so
        taken effective as of the date upon which the condemning authority takes
        title
        or possession, whichever is earlier. If more than twenty-five percent (25%)
        of
        the of the floor area of the Premises is taken by condemnation, Tenant may,
        at
        Tenant's option, terminate this Lease by forwarding written notice to Landlord
        not less than five (5) days after Tenant receives written notice of such
        condemnation from Landlord or the condemning authority. If Tenant does not
        elect
        (or fails to timely notify Landlord of Tenant's election) to terminate this
        Lease pursuant this paragraph, this Lease shall remain in full force and
        effect
        as to the portion of the Premises remaining, except that the Monthly Rent
        shall
        be reduced in the same proportion as the area of the portion of the Premises
        taken bears to the area of the entire Premises before the taking, provided,
        however, that no reduction of Monthly Rent shall occur if the only portion
        of
        the Premises taken is land upon which there is no building. Any award or
        payment
        made in connection with the exercise or threat of exercise of the power of
        eminent domain as to all or any portion of the Premises shall be the property
        of
        Landlord, whether such award shall be made as compensation for diminution
        in
        value of the leasehold or for the taking of the fee, or as severance damages;
        provided, however, that Tenant shall be entitled to any compensation separately
        awarded to Tenant for Tenant's relocation expenses and/or loss of the trade
        fixtures owned by Tenant, which trade fixtures Tenant would have had a right
        to
        remove upon the expiration or other termination of this Lease. In the event
        that
        this Lease is not terminated by reason of such condemnation, Landlord shall,
        to
        the extent of its net severance damages received (over and above the legal
        fees,
        costs and expenses incurred by Landlord in connection with the condemnation),
        promptly repair any damages to the Premises occasioned by such condemnation,
        except to the extent that Tenant has been separately reimbursed therefor
        by the
        condemning authority. Tenant shall be responsible for the payment of any
        amount
        in excess of such net severance damages required to complete such
        repair.


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      21.         COVENANT
        OF TENANT.
Landlord and Tenant agree and acknowledge that Brookhurst Royale has
        been
        financed by the issuance of Westminster Redevelopment Agency Variable Rate
        Demand Multifamily Housing Revenue Bonds (Brookhurst Royale Senior Assisted
        Living Project) 2000 Series A and 2000 Series A-S, and that this Lease is
        subject to the certain restrictions more fully set forth in the following
        agreements: (i) Section 3, 4, 5, 6 and 7 of the Regulatory Agreement and
        Declaration of Restrictive Covenants dated as of December 1, 2000 by and
        among
        Westminster Redevelopment Agency, State Street Bank and Trust Companyof
        California, N.A. and Brookhurst Royale, LLC; (ii) Exhibit A to CDLAC Resolution
        No. 00­140 adopted on September 14, 2000; and (iii) Section 10.13 of the
        Reimbursement Agreement dated as of December 1, 2000 by and between Union
        Bank
        of California, N.A. and Brookhurst Royale, LLC.

       

      Tenant
        covenants that it shall comply with all of the duties and obligations of
        the
        Owner under the above-referenced agreements, including, but not limited to,
        delivering to Landlord monthly low income reports in the required form, and
        Tenant acknowledges and agrees that the Westminster Redevelopment Agency
        is a
        third party beneficiary of this covenant and the Westminster Redevelopment
        Agency is entitled to enforce this covenant against Tenant.

       

      Landlord
        and Tenant also acknowledge and agree that before this Lease can be operative
        the consent, in writing, by the following entities may be required: Union
        Bank
        of California, N.A., Westminster Redevelopment Agency and State Street Bank
        and
        Trust Company of California, N.A.. Landlord shall use commercially reasonable
        efforts to obtain any necessary consents.

       

      22.          NOTICES. 
        Wherever in this Lease it shall be required or permitted that notice
or
        demand
        be given or served by either party to this Lease to or on the other party,
        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 postage prepaid, by
        registered or certified mail, return receipt requested, or via recognized
        overnight courier, addressed as follows (or to such other address(es) as
        the
        parties may subsequently designate in writing):

       

      If
        to
        Landlord:

       

      Brookhurst
        Royale, LLC

      5150
        Overland Avenue

      Culver
        City, California 90230

        
        Attention: Mr. Warren Breslow and Assistant General Counsel

       

      If
        to
        Tenant:

      Summerville
        13, LLC

      3000
        Executive Parkway, Suite 530 San Ramon, California 94583

      Attention:
        Mr. Granger Cobb

      Tel.
        No.:
        (925) 866-1999

      Fax
        No.:
        (925) 866-8463

       

      23.          MISCELLANEOUS.

       

      23.1
        Abandonment.
Tenant
        shall not vacate or abandon the Premises at any time during the
        Term (except for reasonable periods relating to casualty, condemnation, force
        majeure or renovations). In the event that Tenant shall abandon, vacate or
        surrender the Premises or be dispossessed by process 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.


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


       

      23.2
        Signs. Tenant
        may affix and maintain upon the exterior (including those parts of the interior
        visible from the exterior) of the Premises only such signs, advertising,
        placards, names, insignia, trademarks and descriptive material as shall comply
        with all Applicable Laws and shall have been approved by Landlord in advance
        as
        to size, type, color, location, copy, nature and display qualities.
        Notwithstanding the foregoing, under no circumstances shall Tenant be entitled
        to affix any sign to the roof of the Premises.

       

      23.3
        Entry and Inspection.
        Tenant shall permit Landlord and Landlord's agents, employees and
        contractors to enter onto and upon the Premises upon one (1) business days
        written notice and at all reasonable times for the purpose of inspecting
        the
        same, for the purpose of exercising any right of Landlord hereunder, for
        the
        purpose of posting notices of  non-responsibility for alterations,
        additions or repairs, or for the purpose of placing upon the Premises any
        usual
        or ordinary "For Sale" signs. In addition, at any time within six (6) months
        prior to the expiration of he Term of this Lease, Landlord may enter onto
        the
        Premises for the purpose of posting "For Lease" signs and exhibiting the
        Premises to prospective Tenants. Landlord shall be permitted to exercise
        all
        such entry rights without any abatement of Monthly Rent or other charges,
        and
        without any liability to Tenant for any loss of quiet enjoyment of the Premises
        thereby occasioned; provided, however, that (a) Landlord shall use reasonable
        efforts to minimize interference with the operation of Tenant's business,
        and
        (b) Landlord shall indemnify Tenant for damage or injury to the extent directly
        caused by Landlord, its employees, agents, representatives, or
        contractors.

       

      23.4
        Insolvency of
        Tenant.
Tenant agrees that, in the event that all or substantially all of
        Tenant's assets are placed in the hands of a receiver or trustee, and in
        the
        event that 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 Tenant under such bankruptcy 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 Landlord's 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. Landlord, at Landlord's
        option, may require Tenant to cooperate in connection with and coordinate
        the
        removal of residents of the Premises to satisfy the state or governmental
        agencies.

       

      23.5
        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 subleases or subtenancies
        or
        may, at the option of Landlord, operate as an assignment to Landlord of any
        or
        all of such subleases or subtenancies.

       

      23.6
        Holding Over.
        Upon the expiration of the Term or any sooner termination of this
        Lease,
        whether by lapse of time, cancellation, forfeiture, or otherwise, Tenant
        shall
        immediately surrender possession of the Premises and all Standard Furnishings
        as
        provided under Paragraph 12.4 above, and Tenant hereby acknowledges that
        Tenant
        shall have no right to holdover without the prior written consent of Landlord.
        In the event that Tenant shall holdover without Landlord's consent, then
        in that
        case, Tenant shall be responsible for paying to Landlord (in addition to
        any
        other sums payable hereunder or damages arising as a result of such holdover)
        Monthly Rent for the duration of such holdover period in an amount equal
        to one
        hundred fifty percent (150%) of the Monthly Rent payable at the time of the
        expiration or termination of this Lease. Notwithstanding the foregoing, Tenant
        agrees to fully cooperate with Landlord in turning possession and operation
        of
        the Premises over to Landlord (or to any successor tenant) so as to assure
        the
        uninterrupted care of all residents of the Premises.


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      23.7
        Noncompetition. 
        Each of Landlord and Tenant acknowledges that the other
        party or its affiliates currently own or in the future may own RCFE and/or
        apartment complexes within fifteen (15) miles of the Premises.

       

      23.8
        Preservation of
        Residents' Records; Service; Census. Tenant
        shall
        preserve all resident records as required by Applicable Laws and promptly
        deliver the same to Landlord (or at Landlord's direction, to the successor
        tenant) upon the expiration or sooner termination of this Lease. Tenant shall
        take all reasonable and appropriate steps to maintain the highest level of
        quality resident care and services, and to promote and maintain a high resident
        census at the Premises consistent with all Applicable Laws and ethical standards
        governing the operation of an RCFE.

       

      23.9
        Financial
        Statements. Tenant shall promptly provide to Landlord, within thirty (30)
        days after the end of each fiscal quarter, or within ten (10) days after
        Landlord's request therefor (provided that such additional requests shall
        be
        made no more frequently than once per quarter), copies of Tenant's current
        rent
        roll, financial statements and operating statements for the Premises, including
        a current profit and loss statement and balance sheet. In addition, Tenant
        shall
        promptly provide to Landlord any other personal or financial information
        about
        Tenant or the Premises which may be requested by Landlord or any existing
        or
        prospective purchaser, mortgagee or lender of the Premises (provided that
        such
        additional requests shall be made no more frequently than once per
        quarter).

       

      23.10
        Construction.
        It is acknowledged that all parties have had the opportunity to consult
        their respective attorneys concerning the terms and provisions of this Lease.
        This Lease has been jointly negotiated and drafted. The language of this
        Lease
        shall be construed as a whole according to its fair meaning and not strictly
        for
        or against any of the parties.

       

      23.11
        Attorneys'
        Fees.  In the event the Landlord retains an attorney to enforce
        any right or remedy of Landlord hereunder, then in addition to any other
        damages
        or relief to which Landlord may be entitled, Tenant shall promptly reimburse
        Landlord for all reasonable attorneys' fees and costs (including the reasonably
        allocable cost of in-house counsel) incurred by Landlord in connection with
        such
        enforcement, whether or not any legal action is filed. In the event of any
        litigation, or other enforcement proceeding regarding the terms and provisions
        of this Lease, the prevailing party shall be entitled to recovery of all
        expenses incurred in connection therewith, including, without limitation,
        reasonable attorneys' fees and costs (including the reasonably allocable
        cost of
        in-house counsel), costs of investigation, travel expenses, trial and appellate
        court costs and deposition and trial transcript expenses.

       

      23.12
        Authority; Successors
        and Assigns. The execution of this Lease has been authorized by all
        necessary action on the part of Tenant and Landlord. Each individual who
        has
        executed this Lease on behalf of Tenant or Landlord in his or her respective
        capacities has the right, power, legal capacity and authority to execute,
        deliver and perform this Lease on behalf of Tenant or Landlord. Subject to
        the
        provisions concerning assignment, all of the terms and provisions of this
        Lease
        shall be binding upon and inure to the benefit of the heirs, successors,
        executors, administrators and assigns of the parties hereto.


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      23.13
        Severability. If
        any term,
        covenant, condition or provision of this Lease is
        held
        by a court of competent jurisdiction to be invalid, void or unenforceable,
        such
        term shall be stricken and the remainder of the provisions hereof shall remain
        in full force and effect and shall in no way be affected, impaired or
        invalidated thereby.

       

      23.14
        Captions. The
        various headings, captions and numbers used in this Lease
        are
        used for convenience only and shall not be used in the interpretation of
        this
        Lease.

       

      23.15
        Time. Time
        is
        of the essence to all of the terms and provisions of this Lease.

       

      23.16
        Brokers. Landlord
        and
        Tenant each hereby represent and warrant to the
        other
        that neither party has had any dealings with any person, firm, broker or
        finder
        in connection with the negotiation of this Lease and/or the consummation
        of the
        transaction contemplated hereby other than JCH Consulting Group, Inc. (whose
        commission Landlord shall pay), and that no other person, firm, broker or
        finder
        is entitled to any commission, fee or other compensation in connection herewith.
        Landlord and Tenant each hereby agree to indemnify, defend, protect and hold
        the
        other, and such party's agents, employees, attorneys, and their respective
        successors and assigns free and harmless from and against liability for
        compensation or charges which may be claimed by any such person, firm, broker
        or
        finder by reason of any actions of or dealings with the indemnifying
        party.

       

      23.17
        Governing
        Law.  This Lease shall be governed and construed in accordance with
        the laws of the State of California.

       

      23.18
        Inducement
        Recapture.  Any agreement by Landlord for free, abated or
        deferred rent or other charges applicable to the Premises, or for the giving
        or
        paying by Landlord to or for Tenant of any cash or other bonus, inducement
        or
        consideration for Tenant's entering into this Lease (collectively, any
        "Inducement Provisions") shall be deemed conditioned upon Tenant's full and
        faithful performance of all of the terms, covenants and conditions of this
        Lease
        to be performed or observed by Tenant. Upon the occurrence of any Default
        hereunder by Tenant, any such Inducement Provisions shall automatically be
        deemed deleted from this Lease and of no further force or effect, and any
        rent,
        other charge, bonus, inducement or consideration previously abated, deferred,
        given or paid by Landlord under such Inducement Provisions shall be immediately
        due and payable by Tenant to Landlord as additional rent hereunder,
        notwithstanding any subsequent cure of said breach by Tenant. The acceptance
        by
        Landlord of rent or the cure of the Default that initiated the operation
        of this
        paragraph shall not be deemed a waiver by Landlord of the provisions of this
        paragraph unless specifically so stated in writing by Landlord at the time
        of
        such acceptance.

       

      23.19
        Waiver. No
        waiver by Landlord of any provision of this Lease shall be
        deemed
        a waiver of any other provision hereof or any subsequent breach by Tenant
        of the
        same or any other provision. Landlord's consent to or approval of any act
        or
        omission by Tenant shall not be deemed to render unnecessary the obtaining
        of
        Landlord's consent or approval with respect to any subsequent act or omission
        by
        Tenant. The acceptance of Monthly Rent or any other Payment from Tenant
        hereunder shall not be deemed a waiver of any preceding breach or default
        of
        Tenant with respect to any provision hereof, other than the failure of Tenant
        to
        pay the particular rent so accepted, regardless of Landlord's knowledge of
        any
        preceding breach or default at the time that such Monthly Rent or other Payment
        is accepted. No waiver by Tenant of any provision of this Lease shall be
        deemed
        a waiver of any other provision hereof or any subsequent breach by Landlord
        of
        the same or any other provision. Tenant's consent to or approval of any act
        or
        omission by Landlord shall not be deemed to render unnecessary the obtaining
        of
        Tenant's consent or approval with respect to any subsequent act or omission
        by
        Landlord.


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      23.20
        Payments Constituting
        Rent.  All Monthly Rent and any other Payments due and payable by
        Tenant hereunder (excluding only the security deposit) shall be deemed to
        be
        rent hereunder.

       

      23.21
        Joint and
        Several.  If the Tenant hereunder is comprised of more than
one
        (1)
        individual or entity, the liability of each such individual or entity hereunder
        shall be joint and several.

       

      23.22
        Mediation;
        Arbitration.  Except with regard to any claim,  counterclaim,
        dispute, and other matter relating to the payment of rent from Tenant to
        Landlord under this Lease, Landlord and Tenant agree that any and all other
        claims, counterclaims, disputes, and other matters in question between them
        shall be sent to mediation administered by JAMS/Endispute under its mediation
        rules before a single mediator, prior to either of them initiating a demand
        for
        arbitration pursuant to this section. All expenses of mediation shall be
        borne
        by the parties equally; however, each party shall bear the expense of its
        own
        counsel, experts, witnesses, and preparation and presentation of proofs.
        Except
        with regard to any claim, counterclaim, dispute, and other matter relating
        to
        the payment of rent from Tenant to Landlord under this Lease, Landlord and
        Tenant agree that, if and to the extent that any other claim, counterclaim,
        dispute or other matter in question between them cannot be resolved through
        mediation, then the matter shall be settled by arbitration before a single
        arbitrator of JAMS/Endispute in their Santa Monica, California office in
        accordance with the then prevailing rules of JAMS/Endispute for arbitration
        of
        commercial disputes. The parties hereto shall mutually select such single
        arbitrator. If the parties are not able to agree upon a single arbitrator,
        the
        parties shall request that the arbitration administrator of JAMS/Endispute
        select the single arbitrator. Notwithstanding the foregoing, nothing contained
        in this section shall be deemed to limit or restrict Landlord's rights to
        file
        and prosecute an unlawful detainer action under California Code of Civil
        Procedure Sections 1161 et. seq.


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      23.23
        NO WARRANTIES
        BY
        LANDLORD. TENANT HAS THOROUGHLY INSPECTED THE PREMISES AND HEREBY ACCEPTS
        POSSESSION OF THE PREMISES IN THEIR CONDITION "AS-IS" AS OF THE COMMENCEMENT
        OF
        THIS LEASE, WITHOUT REPRESENTATION OR WARRANTY, WHETHER EXPRESS OR IMPLIED,
        FROM
        LANDLORD OR ANY THIRD PARTY CONCERNING THE CONDITION OF THE PREMISES OR ANY
        PART
        THEREOF, INCLUDING, WITHOUT LIMITATION, THE PREMISES' FITNESS FOR ANY PARTICULAR
        USE OR OCCUPANCY. LANDLORD HEREBY FURTHER 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 AND PURPOSES PERMUTED HEREUNDER OR ANY OTHER PURPOSE,
        AND
        LANDLORD DOES NOT REPRESENT OR WARRANT THAT THE PREMISES OR ANY PART THEREOF
        COMPLIES WITH ANY LAWS RELATING TO THE USE 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 AS AN RCFE, AND
        TENANT
        SHALL BE FULLY RESPONSIBLE FOR THE COST OF AND FOR EFFECTUATING ANY AND ALL
        SUCH
        ALTERATIONS, REPAIRS AND REPLACEMENTS REQUIRED TO BE MADE FOR THE CONTINUED
        LICENSING AND CERTIFICATION OF THE PREMISES AS AN RCFE, AS WELL AS ALL
        ALTERATIONS AND REPLACEMENTS REQUIRED TO MAINTAIN AND PRESERVE THE PREMISES
        IN
        THE CONDITION CALLED FOR HEREUNDER. THE PARTIES HEREBY ACKNOWLEDGE THAT LANDLORD
        IS NOT RESPONSIBLE FOR, AND TENANT SHALL INDEMNIFY, DEFEND AND HOLD LANDLORD
        HARMLESS FROM AND AGAINST ALL LIABILITY, COST OR EXPENSE IN CONNECTION WITH
        ANY
        SUCH REPAIRS, REPLACEMENTS, AND/OR ALTERATIONS TO THE PREMISES FOR ANY REASON
        WHATSOEVER. THE INDEMNIFICATION OBLIGATIONS OF TENANT HEREUNDER AND ELSEWHERE
        UNDER THIS LEASE SHALL SURVIVE ANY EXPIRATION OR TERMINATION OF THIS
        LEASE.

       

      23.24
        Tenant shall, so long as no Default occurs during the Term, peaceably and
        quietly have, hold and enjoy the Premises subject to the terms of this Lease
        without interference by any persons lawfully claiming by or through
        Landlord.

       

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

      


       

      
        	 	
                “Landlord”

              
	 	 	 
	 	
                BROOKHURST
                  ROYALE, LLC,

              
	 	
                a
                  California limited liability company

              
	 	 	 
	 	
                By:

              	
                /s/
                  Warren L. Breslow

              
	 	 	
                Warren
                  L. Breslow,
                  Trustee of the

              
	 	 	
                Warren
                  L. Breslow Trust, a managing member

              
	 	 
	 	
                “Tenant”

              
	 	 	 
	 	
                SUMMERVILLE
                  13, LLC,

              
	 	
                a
                  Delaware limited liability company

              
	 	 	 
	 	
                By:

              	
                /s/
                  Granger Cobb

              
	 	 	
                Granger
                  Cobb, President