ex10_283.htm


    
      

    

    Exhibit
      10.28.3

     

    AMENDED
      AND RESTATED LEASE AGREEMENT

     

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

     

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

     

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

     

    C.          Tenant
      is experienced in the management and operation of residential care facilities
      for the elderly (as defined in California Health and Safety Code, Division
      22,
      Chapter 23.2, $I569.2).

     

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

     

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

     

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


     

    
      	
               

            	
              1.

            	
              PREMISES

            


    

     

    Subject
      to the terms and conditions of this Lease, Landlord hereby leases to Tenant,
      and
      Tenant, hereby leases from Landlord, that certain real property described in
      Exhibit "A" attached hereto, which is improved with and currently licensed
      and
      operating as a three hundred fifty-two (352) bed residential care facility
      for
      the elderly, and certain personal property located thereon, or hereafter located
      thereon (collectively, the "Premises"). The-Premises
      is located
      at 20801 Devonshire Street, Chatsworth, Los Angeles County, California, and
      is
      commonly known as Chatsworth Gardens.

     

    
      	
               

            	
              2.

            	
              TERM

            


    

     

    The
      term
      of this Lease (the "Term") shall be for nineteen (19) years and eleven (11)
      months, commencing on November 1, 1994, and terminating on September 30,
      2014.

     

    
      	
            	
              3.
                

            	RENT


    

     

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


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    3.1.1
      The
      monthly rent for each of the initial eleven (11) months of the Term, through
      September 30, 1994, shall be Seventy-Nine Thousand Three Hundred Dollars
      ($79,300.00).

     

    3.1.2
      Commencing on October 1, 1995, and thereafter,on the yearly anniversary date
      of
      such date throughout the remainder of the Term, the monthly rental shall
      increase, but never decrease, as calculated on the basis of the Consumer Price
      Index, All Urban Wage Earners and Cleridal Workers, All Items, published by
      the
      U. S. Department of Labor, Bureau of Statistics for the Los Angeles/Long
      Beach/Anaheim Metropolitan Area (the "Index"), as follows:

     

    (a)          The
      Index published as of September 1, 1994, shall be considered the "Base
      Index";

     

    (b)         The
      monthly rental shall be adjusted upward, but not downward, by an amount equal
      to
      sixty percent (601) of the increase, if any, in the Index as of the last month
      prior to such adjustment over the Base Index (for instance, for the adjustment
      to occur on October 1, 1995, the Base Index would be compared to the Index
      for
      September 1, 1995); provided, however, the monthly rent shall not increase
      in
      any lease year by more than four percent (4%) nor less than two and one-half
      percent (2-1/2%).

     

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

     

    3.2
      The
      parties agree that the monthly rent for the initial one (1) month of the Term,
      due November 1, 1994, shall be deferred; that is, not payable on its usual
      due
      date, but rather 'paid to Landlord in sixty (60) monthly payments of One
      Thousand Three Hundred Twenty-Two Dollars ($1,322.00), commencing on January
      1,
      1995, and ending with the payment on December 1, 1999. Each such payment shall
      be deemed additional rent, in addition to monthly rent and all other sums due
      under this Lease. Tenant covenants that it shall expend such deferred rent
      amount for capital improvements to the Premises; which expenditures shall be
      approved in advance by Landlord in its reasonable discretion and shall be
      accounted for in writing by Tenant to Landlord. This one time deferral shall
      include only the monthly rent due November 1, 1994, not the additional rent,
      impound payments or other sums due under this Lease for November 1, 1994 or
      any
      other date.

     

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

     

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

     

    3.5
      Tenant acknowledges that late payment by Tenant to Landlord of rent will cause
      Landlord to incur costs 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 encumbranca(s) affecting the
      Premises. Therefore, if any installment of rent is not received by Landlord
      within ten (10) days after its due date, Tenant shall pay to Landlord an
      additional sum equal to five percent (5%) of the overdue rent as a late charge.
      The parties agree that this late charge represents a fair and reasonable
      estimate of the costs that Landlord will incur by reason of late payment by
      Tenant. Acceptance of any late charge shall not constitute a waiver of Tenant's
      default with respect to the overdue amount, nor prevent Landlord from exercising
      any of the other rights and remedies available to Landlord hereunder, at law
      or
      in equity.


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

    


    
      	
            	
              4.

            	
              REAL
                ESTATE AND PERSONAL PROPERTY TAXES

            


    

     

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

     

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

     

    Upon
      the
      commencement of the Term, an impound account for the payment of real estate
      taxes shall be established and maintained by Landlord, as set forth below.
      Concurrent with each payment of monthly rental and in addition thereto, Tenant
      shall pay to Landlord's a sum (the "Funds") equal to one-twelfth (1/12) of
      the
      yearly real estate taxes and assessments, as may be adjusted from time to time.
      Any funds received by Landlord shall be held in an institution chosen by
      Landlord, in its sole discretion, provided the deposits of which are insured
      by
      a federal or state agency. Landlord shall be permitted to commingle the Funds
      with its own funds or the funds of other tenants of Landlord, as Landlord shall
      determine in its sole discretion. Landlord shall apply the Funds to pay the
      real
      estate taxes for the Premises; provided Landlord shall only be obligated to
      make
      such payment of Funds to the extent that Tenant pays the Funds to Landlord.
      Landlord shall not charge for the holding or handling of Funds.


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Landlord
      shall pay interest on the Funds actually held by Landlord based upon a rate
      equal to the then-existing average interest rate for thirty (30) day
      certificates of deposit as published by the Wall Street Journal. The prompt
      payment of the Funds shall be a material covenant of Tenant under this Lease,
      and shall constitute additional, rent hereunder. Landlord shall provide to
      Tenant an annual accounting of the Funds showing credits and debits to the
      Funds
      and the purpose for which each debit to the Funds was made. If the amount of
      the
      Funds held by Landlord, together with the future monthly installments of Funds
      payable prior to the due dates of real estate taxes, shall exceed the amount
      required to pay said real estate taxes as they fall due, at Landlord's option,
      such excess shall either be repaid to Tenant or credited to Tenant on monthly
      installments of Funds. If the amount of the Funds held by Landlord shall be
      insufficient to pay real estate taxes, as they fall due, Tenant shall
      immediately pay to Landlord any amount necessary to make up the deficiency
      in
      one or more payments, as Landlord may require. In the event that the Premises
      is
      transferred by Landlord to another party, which transfer results in an increase
      in the real estate taxes, Tenant shall not be responsible for the payment of
      such additional real estate taxes. Notwithstanding the foregoing, the initial
      impound payments by Tenant, commencing November 1, 1994, shall be utilized
      for
      the second (2nd) installment payment of real estate taxes for 1994-95, and,
      in
      addition thereto, Tenant shall be responsible for the timely payment of the
      first (1st) installment payment of real estate taxes for 1994-95 directly to
      the
      applicable taxing agency.

     

    
      	
            	
              5.

            	
              SECURITY
                DEPOSIT.

            


    

     

    5.1
      Tenant has heretofore deposited with Landlord a total of Two Hundred Thousand
      Dollars ($200,000.00) as a refundable security deposit (the "Security Deposit"),
      and not as prepaid rent. Landlord is not required to keep the Security Deposit
      separate from Landlord's other accounts and no trust relationship is created
      with respect to the Security Deposit. In no event shall the Security Deposit
      be
      in lieu of, constitute, or excuse Tenant from paying any portion of the
      above-referenced rental, additional rent, or of any other sums 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 the Leased Premises or any other action
      which Landlord may at any time institute for the breach of this Lease. No
      interest shall accrue or be payable by Landlord on the Security
      Deposit.

     

    5.2
      Landlord may, at Landlord's option, apply all or any part of the Security
      Deposit to any unpaid rent, additional rent, or any other sums due from Tenant
      under this Lease, or to cure any other defaults of Tenant hereunder. Upon
      expiration of the Term of this Lease, and provided Tenant is not then in default
      under this Lease, or no event has occurred which could give rise to a default
      with the giiring of notice and/or the passage of time, Landlord shall -return
      that portion of the Security Deposit to Tenant which has not been so applied
      by
      Landlord. Should all or any portion of the Security Deposit be so applied by
      Landlord, Tenant shall, upon the written demand of Landlord promptly remit
      to
      Landlord a sufficient amount of cash 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 such demand
      shall constitute a material default and breach under this Lease.

     

    5.3
      As a
      further part hereof, Tenant acknowledges that security deposits have been
      delivered by Tenant pursuant to each of the Other Leases (as defined in Section
      13 of this Lease), in addition of the Security Deposit herein. In the event
      that
      the Security Deposit herein has been depleted, then Landlord shall be expressly
      permitted and authorized, but not obligated, to apply funds from the security
      deposits of any or all of the Other Leases to replenish the Security Deposit
      under this Lease. Such application of security deposits from any of the Other
      Leases shall in no manner limit or waive Tenant's obligation under this Lease
      to
      replenish the Security Deposit herein, and likewise shall further require Tenant
      to immediately replenish the security deposit(s) applied from any of the Other
      Leases. Upon the expiration of this Lease, if any of the security deposit(s)
      provided for in the Other Leases are subject to the replenishment as provided
      in
      this Section 5 or said Other Lease, and further provided that Tenant would
      otherwise be entitled to the return of all or a portion of the Security Deposit,
      the Security Deposit herein shall be transferred to the Other Leases in the
      amount(s) necessary to replenish said security deposit(s), and only the balance
      of the Security Deposit after such transfer, if any, shall be returned to
      Tenant. Likewise, if one or more of the Other Leases shall expire, and the
      Security Deposit herein shall be subject to replenishment as provided above,
      any
      portion of the security deposit(s) for such Other Leases shall be transferred
      to
      the Security Deposit to replenish same, and only the balance thereof, if any,
      shall be returned to Tenant. Tenant expressly agrees and acknowledges that
      any
      transfer of funds between the Security Deposit and the security deposit(s)
      of
      any or all of the Other Leases pursuant to the provisions of this Section 5.3
      shall be deemed a good faith retention of such funds by Landlord. Tenant further
      acknowledges and agrees to waive any and all of the provisions of California
      Civil Code Section 1950.7, or successor provision, which shall in any manner
      conflict with this Section 5.3.


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
            	
              6.

            	
              USE

            


    

     

    6.1
      Tenant shall use the facility for a residential care facility for the elderly,
      and for no other use without Landlord's prior written consent, which may • be
      withheld in Landlord's sole discretion.

     

    6.2
      Tenant's use of the Premises as provided in this Lease shall be in accordance
      with the following:

     

    6.2.1
      Tenant shall not do, bring or keep anything in, or about the Premises that
      will
      cause a cancellation of any insurance covering the Premises, and Tenant shall
      comply with all requirements imposed by any such insurance company.

     

    6.2.2
      Tenant shall cause the Premises to be and remain licensed and certified by
      the
      applicable state and/or local governmental agencies as a licensed residential
      care facility for the elderly, and shall maintain such license(s) and
      certifications during the Term. At Tenant's sole expense, Tenant shall cause
      the
      Premises to conform to the requirements and provisions as the licensed facility
      including, without limitation, the obligation at Tenant's sole cost to alter,
      maintain, replace or restore the Premises.
      or any part
      thereof in compliance and conformity with all laws relating to the condition,
      use or occupancy of the Premises as the licensed facility during the
      Term.

     

    6.2.3
      Tenant shall not use the Premises in any manner that will constitute waste,
      nuisance to the Premises, or cause unreasonable annoyance to owners or occupants
      of adjacent properties.

     

    6.2.4
      Tenant shall not do anything on the Premises that will cause damage to the
      Premises or any part thereof. No machinery, apparatus or other appliance shall
      be used or operated in, on or about the Premises that will in any manner injure
      the Premises or any part thereof.

     

    6.2.5
      Tenant shall pay all payrolls promptly when due respecting all personnel at
      the
      Premises and shall file all governmental reports required pursuant thereto
      (including, without limitation, payroll tax returns), and shall pay such taxes
      promptly and before delinquency.


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    6.2.6
      Tenant shall not release, use, generate, manufacture, store or dispose of on,
      under or about the Premises or transfer to or from the Premises any flammable
      explosives, radioactive materials, hazardous wastes, toxic substances or related
      materials (collectively "hazardous substances"). There is excluded from this
      prohibition hazardous substances of the type commonly used in residential care
      facilities for the elderly in California, subject to the condition that they
      are
      used, stored, and disposed of in accordance with applicable laws. As used in
      this Lease, hazardous substances shall include, but not be limited to,
      substances defined' as "hazardous substances," "hazardous materials," or "toxic
      substances" in the Comprehensive Environmental Response, Compensation and
      Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq.; the
      Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq.; the
      Resource Conservation and Recovery Act, 42 U.S.C. Section 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, at 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, at seq.; Hazardous Waste Disposal Land Use Law, Health
      and Safety Code Section 25220, et seq.; Safe Drinking Water and Toxic
      Enforcement Act of 1986 ("Prop 65"), Health and Safety Code.Section 25249.5,
      et
      seq.; Hazardous Substances Underground Storage Tank Law, Health and Safety
      Code
      Section 25280, et seq.; Air Resources Law, Health and Safety Code Section 39000,
      et seq., Hazardous Materials Release Response Plans and Inventory, Health and
      Safety Code Sections 25500-25541; Toxic Pits-Cleanup Act, Health and Safety
      Code
      Section 25208, et seq.; and those materials and,
      substances of a
      similar nature regulated or restricted under any other laws of the United
      States, the State of California or any other governmental agency having
      jurisdiction over the Premises now existing or hereafter adopted, and in
      regulations adopted and publications promulgated pursuant to said
      laws.

     

    6.2.7
      Tenant shall comply with, and the leasehold created by this Lease is subject
      to,
      all covenants, conditions, restrictions, easements and rights of way affecting
      the Premises.

     

    6.2.8
      Tenant shall furnish any bond which may be required by law in connection with
      residents' trust funds and the accounting therefor. Tenant shall be fully
      responsible for such trust funds, and agrees to indemnify and hold harmless
      Landlord from any loss regarding same.

     

    
      	
            	
              7.

            	
              ALTERATIONS

            


    

     

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

     

    
      	
            	
              8.

            	
              MAINTENANCE
                AND REPAIRS

            


    

     

    8.1
      Except as provided in Section 8.2 below, 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, plate glass, wiring, plumbing, heat and air conditioning
      units, the parking and service areas, the landscaping, the approaches thereto
      and appurtenances thereof, including all adjacent sidewalks and alleys. Except
      as provided in Section 8.2 below, Tenant's obligation to maintain the Premises
      shall specifically include, without limitation, the obligation to make any
      and
      all repairs and to repaint and/or re-stain all painted areas as required.
      Landlord shall not have any responsibility to maintain the Premises or any
      part
      thereof including, without limitation, any structural maintenance, repair,
      replacement or restoration. Tenant waives all rights under any laws which may
      provide for Tenant's right to make repairs and to then deduct from rents the
      expenses of such repairs.


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    8.2
      Except as provided in Section 8.3 below, Landlord shall, during the Term, at
      its
      sole cost and expense, keep in good repair and maintain the roof and exterior
      surface of the Premises in good condition and repair. Landlord's obligations
      for
      maintenance and repair shall be limited to the particular obligations of this
      Section 8.2; all other maintenance and repair obligations relating to the
      Premises shall belong to Tenant under Section 8.1 above. Landlord's obligation
      to maintain the exterior surface of the Premises shall include, without
      limitation, the obligation to make any and all repairs and to repaint and/or
      restain, as applicable, the painted portions of the exterior surface. Upon
      the
      occurrence of the events described in Section 8.3 below, all obligations of
      Landlord hereunder shall shift to Tenant. In the event that Tenant becomes
      aware
      of the need to repair the roof and/or exterior surface of the Premises (prior
      to
      the assumption by Tenant of the responsibility for maintenance of the roof
      pursuant to Section 7.3 below), Tenant shall notify Landlord in writing of
      the
      specific details of such need(s). In the event that Landlord fails to repair,
      or
      commences to repair (and prosecutes diligently to completion), such needs within
      ten (10) days after receipt of the written notice, and damages are thereafter
      suffered to the Premises and /or Tenant's personal property as the direct and
      consequential result of such failure to repair, then Landlord shall be liable
      to
      Tenant for the amount of such damages which exceed Tenant's recovery of
      insurance proceeds for such damage. Such damage shall be subject to reasonable
      proof and verification being provided to Landlord. The foregoing shall represent
      Landlord's only potential area of liability for maintenance and repair of the
      Premises under this Lease.

     

     8.3
      Landlord shall have the option, in its sole discretion and at its sole cost
      and
      expense, to re-roof the Premises and/or to repaint the exterior of the Premises.
      In the event that Landlord causes such work to be performed during the Term,
      then immediately thereafter, and throughout the remainder of the Term, Tenant
      shall assume, at its sole cost and expense, the obligation to keep in good
      repair and maintain the roof and/or the exterior surface of the Premises,
      respectively, along with and in comparable condition with other portions of
      the
      Premises as required of Tenant in Section 8.1 above. Upon such assumption:
      (a)
      Landlord's obligation to repair and maintain the roof and/or exterior surface
      of
      the Premises under Section 8.2 above shall cease and terminate and (b) Landlord
      shall cause to be assigned to Tenant any applicable warranty for the new
      roof.

     

    8.4
      Tenant shall, at its sole cost and expense, during the Term, keep and maintain
      all the personal property including furniture, fixtures and equipment, in good
      working order, condition and repair. Tenant shall have the right to install
      on
      the Premises any and all equipment and fixtures which Tenant desires to install
      thereon and which are necessary or convenient to or Tenant's use of the Premises
      as permitted herein, without the consent of Landlord.  All such
      property so installed by Tenant shall remain Tenant's property (other than
      replacements for personal property as provided below) and, provided Tenant
      is
      not in default hereunder, may be removed by Tenant as provided in this Lease.
      Tenant shall not remove any personal property owned by Landlord which was leased
      to Tenant as part of the Premises and/or replacements thereof or any part
      thereof from the Premises, without the prior written consent of Landlord. Tenant
      shall purchase and replace with substitutes of equal or higher quality any
      worn
      out or broken items of personal property required to be on the Premises for
      continued licensing and/or certification as the same may occur from time to
      time
      throughout the Term at Tenant's sole cost and expense. Such items being replaced
      by Tenant shall become the property of Landlord. Tenant agrees, upon written
      request from Landlord, to execute any and all documents necessary to assist
      Landlord to fully evidence Landlord's ownership of the personal
      property.


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    8.5
      Tenant shall, throughout the Term of this Lease, make all repairs, alterations,
      replacements and additions to the Premises required by law and/or as necessary
      to obtain and maintain licensing and certification as a licensed residential
      care facility for the elderly.

     

    8.6
      By
      entering upon the Premises, Tenant shall be deemed to have accepted the Premises
      as being in good and sanitary order, condition and repair.

     

    
      	
            	
              9.

            	
              COMPLIANCE
                WITH LAWS

            


    

     

    Tenant
      shall, at his sole cost and expense, comply with all of the requirements of
      all
      municipal, state and federal authorities now in force or which may hereafter
      be
      in force pertaining to the use of the Premises, and shall faithfully observe
      in
      said use all municipal ordinances and State and Federal statutes now in force
      or
      which shall hereinafter be in force. The judgment of any court of competent
      jurisdiction, the ruling of any

    administrative
      proceeding, or the admission of Tenant, in any action, or proceeding against
      Tenant, whether Landlord be a party thereto or not, that Tenant has violated
      any
      such regulation, order or statute in said use, shall be conclusive of that
      fact
      as between the Landlord and Tenant. It is agreed and understood by and between
      Landlord and Tenant that, in order to conduct the business proposed for the
      Premises, the State of California shall issue and be responsible for renewing
      a
      license to allow Tenant to conduct a residential care facility for the elderly.
      In the event of the cancellation or rescinding of said license, Tenant agrees
      that this action shall constitute a material default under this
      Lease.

     

    
      	
            	
              10.

            	
              INDEMNIFICATION
                OF LANDLORD

            


    

     

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

     

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

     

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


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
            	
              11.

            	
              INSURANCE

            


    

     

    11.1
      During the entire Term, the Tenant shall, at its sole cost and expense, but
      for
      the mutual benefit of Landlord and Tenant, maintain general public liability
      insurance against claims for personal injury, death or property damage occurring
      in, upon or about the Premises and on any sidewalks directly adjacent to the
      Premises. The limitation of liability of such insurance shall be not lass than
      One Million Dollars ($1,000,000) in respect to injury or death of one person
      and
      to the limit of not less than Two Million Dollars ($2,000,000.00) in respect
      to
      any one accident and to the limit of not less than Five Hundred Thousand Dollars
      ($500,000.00) in respect to property damage. All such policies of insurance
      shall be issued in the name of Tenant and Landlord and for the mutual and joint
      benefit and protection of the parties, and such policies of insurance or copies
      thereof shall be delivered to the Landlord. Each insurance policy shall provide
      that such policy cannot be canceled, modified or reduced in scope without thirty
      (30) days' prior written notice to Landlord and to any superior lessor,
      mortgagee or trust deed holder of whom the insurer has been notified in
      writing.

     

    11.2
      During the entire term, Tenant shall, at its cost and expense, maintain fire
      and
      extended coverage insurance throughout the Term of this Lease in an amount
      equal
      to the replacement value of the Premises (exclusive of foundation and excavation
      costs) of the building and improvements hereby demised, as determined by
      Landlord in its sole discretion. The proceeds of said, policy shall be payable
      to Landlord and Tenant as their respective interests may appear. Tenant agrees
      that upon Landlord's request, it will procure a mortgagee's loss payable
      endorsement to said policy, provided that any policy proceeds paid to such
      mortgagee shall be available for reconstruction in accordance with the terms
      of
      this Lease. It is further understood and agreed that Tenant hereby waives any
      right of recovery from Landlord, its officers or employees for any loss or
      damage (including consequential loss) resulting from any of the perils insured
      against in the standard form fire insurance policy with extended coverage
      endorsement.

     

    11.3
      In
      the event that the Premises are damaged or destroyed by fire or other casualty,
      but the Premises not thereby rendered untenantable in whole or in part, Landlord
      shall cause such damage or destruction to be repaired at its cost and expense
      (in excess of any insurance proceeds paid pursuant to such damage or
      destruction), and the monthly rent provided here shall not be abated during
      the
      repair period as to any portion of the Premises, including without limitation,
      the portion rendered untenantable. The cost of any repair required as the result
      of the negligence of Tenant shall be paid by Tenant.

     

    11.4
      In
      the event that the Premises are damaged or destroyed by fire or other casualty,
      and the Premises shall be rendered untenantable either in whole or in part,
      Landlord shall have the option to repair the damage and destruction at its
      cost
      and expense (in excess of any insurance proceeds therefor), in which case the
      monthly rent provided hereunder shall not be abated during the repair period
      as
      to any portion of the Premises, including, without limitation, the portion
      rendered untenantable. Landlord may, however, in the event of any damage or
      destruction, and at Landlord's election, terminate this Lease by giving Tenant
      written notice of Landlord's election within sixty (60) days following the
      date
      of such damage or destruction, and in such event this Lease shall terminate
      on
      the date of such notice and rent shall be prorated as of the date of expiration
      of coverage under the business interruption insurance in place. The cost of
      any
      repairs,
      required as a result
      of the negligence of Tenant shall be paid by Tenant. To the extent applicable,
      Tenant hereby waives any provisions of the California Civil Code with respect
      to
      any damage to, or destruction of, the Premises or the building in which the
      Premises are located, the rights of Tenant in the case of any such case of
      any
      such damage or destruction being governed by the provisions of this
      Lease.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    11.5
      During the entire Term, Tenant, at its sole cost and expense, shall maintain
      business interruption insurance or loss of income insurance for a coverage
      period satisfactory to Landlord, but not less than six (6) months. Landlord
      shall be named in such policy as the irrevocable assignee of all proceeds of
      such policy.

     

    
      	
            	
              12.

            	
              ASSIGNMENT
                AND SUBLETTING

            


    

     

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

     

    
      	
            	
              13.

            	
              DEFAULT

            


    

     

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


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

     

    
      	
            	
              14.

            	
              FREE
                FROM LIENS

            


    

     

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

     

    
      	
            	
              15.

            	
              ABANDONMENT

            


    

     

    Tenant
      shall not vacate or abandon the Premises at any time during the Term; and if
      Tenant shall abandon, vacate or surrender the Premises or be dispossessed by
      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,
      except such property as may be mortgaged to Landlord.


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
            	
              16.

            	
              SIGNS;
                AUCTIONS

            


    

     

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

     

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

     

    
      	
            	
              17.

            	
              UTILITIES

            


    

     

    Tenant
      shall pay before delinquency all charges for water, gas, heat, electricity,
      power, telephone service, trash collection and all other services and utilities
      used in, 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.

     

    
      	
            	
              18.

            	
              ENTRY
                AND INSPECTION

            


    

     

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

     

    
      	
            	
              19.

            	
              INSOLVENCY
                OF TENANT

            


    

     

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

     

    
      	
            	
              20.

            	
              SURRENDER
                OF LEASE

            


    

     

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


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
            	
              21.

            	
              HOLD
                OVER

            


    

     

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

     

    
      	
            	
              22.

            	
              PRESERVATION
                OF RESIDENTS' RECORDS

            


    

     

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

     

    
      	
            	
              23.

            	
              RESIDENT
                CARE: CENSUS

            


    

     

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

     

    
      	
            	
              24.

            	
              FINANCIAL
                STATEMENT

            


    

     

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

     

    
      	
            	
              25.

            	
              ATTORNEYS'
                FEES

            


    

     

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

     

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

     

    
      	
            	
              26.

            	
              NOTICES

            


    

     

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


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              TO
                LANDLORD

            	
              TO
                TENANT

            
	
              Chatsworth
                Royale

            	
              Pacifica
                Manor, Inc.

            
	
              5150
                Overland Avenue

            	
              11141
                West Washington Boulevard

            
	
              Culver
                City, California 90230

            	
              Culver
                City, California 90232

            
	
              Attention:
                Warren Breslow

            	
              Attention:

            	
              Jerry
                Agam

            
	 	 	
              President

            


    

     

     

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


     

    
      	
            	
              27.

            	
              SUCCESSORS
                IN INTEREST

            


    

     

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

     

    
      	
            	
              28.

            	
              FORCE
                MAJEURE

            


    

     

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

     

    
      	
            	
              29.

            	
              PARTIAL
                INVALIDITY

            


    

     

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

     

    
      	
            	
              30.

            	
              MARGINAL
                CAPTIONS

            


    

     

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

     

    
      	
            	
              31.

            	
              TIME

            


    

     

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

     

    
      	
            	
              32.

            	
              SUBORDINATION,
                ATTORNMENT

            


    

     

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

     

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


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

     

    
      	
            	
              33.

            	
              BROKERAGE

            


    

     

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

     

    
      	
            	
              34.

            	
              WARRANTIES

            


    

     

    LANDLORD
      HAS MADE NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, NOR DOES LANDLORD
      MAKE ANY HEREIN REGARDING THE CONDITION OF THE PREMISES OR ANY PART THEREOF,
      INCLUDING, WITHOUT LIMITATION, THE PREMISES' FITNESS FOR ANY PARTICULAR USE
      OR
      OCCUPANCY. LANDLORD FURTHER HEREBY SPECIFICALLY DISCLAIMS ANY REPRESENTATIONS
      AND/OR WARRANTIES, BOTH EXPRESS AND IMPLIED IN LAW, WITH RESPECT TO THE
      CONDITION, HABITABILITY, OR SUITABILITY OF THE PREMISES, OR ANY PART THEREOF,
      FOR THE USE AND PURPOSES PERMITTED HEREUNDER OR ANY OTHER PURPOSE, AND LANDLORD
      DOES NOT REPRESENT OR WARRANT THAT THE PREMISES OR ANY PART THFRFOF COMPLIES
      WITH ANY LAWS RELATING TO THE USES AND OCCUPANCY THEREOF. TENANT FULLY
      UNDERSTANDS THAT THERE MAY BE CERTAIN REPAIRS AND ALTERATIONS REQUIRED FOR
      THE
      CONTINUED LICENSING AND/OR CERTIFICATION OF THE PREMISES, AND TENANT SHALL
      BE
      FULLY RESPONSIBLE FOR THE COST OF AND FOR EFFECTUATING ANY AND ALL ALTERATIONS,
      REPAIRS AND REPLACEMENTS REQUIRED TO BE MADE FOR THE CONTINUED LICENSING AND
      CERTIFICATION OF THE PREMISES, AS WELL AS ALL ALTERATIONS AND REPLACEMENTS
      REQUIRED TO MAINTAIN AND PRESERVE THE PREMISES IN THE CONDITION CALLED FOR
      HEREIN. THE PARTIES HEREBY ACKNOWLEDGE THAT LANDLORD IS NOT RESPONSIBLE FOR,
      AND
      TENANT SHALL HOLD LANDLORD HARMLESS IN CONNECTION WITH, ANY SUCH REPAIRS,
      REPLACEMENTS, AND ALTERATIONS TO THE PREMISES FOR ANY REASON
      WHATSOEVER.

     

    Initials
      of Tenant   /s/ JA

     

     

    
      	
            	
              35.

            	
              RIGHT
                OF FIRST REFUSAL

            


    

     

    In
      consideration of this Lease, Paragraph 30 of the Amendment to the Prior Lease,
      entitled "Right of First Refusal," is hereby expressly-deleted
      and
      terminated upon the execution of this Lease; and, as a part thereof, Tenant
      waives and relinquishes all rights and/or interest in the Premises created
      thereby. In place thereof, Landlord hereby grants to Tenant a right of first
      refusal as set forth in Subsection 35.1 immediately below.

     

    35.1
      During the Term of this Lease, in the event that Landlord shall decide to sell
      the Premises, Tenant shall have a right of first refusal to match the terms
      of
      any offer of a third party to purchase the Premises from Landlord, on the
      following terms and conditions:


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

     

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

     

    
      	
            	
              36.

            	
              NOVATION

            


    

     

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

     

     

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

     

    


    
      	
              “LANDLORD”

            	
              “TENANT”

            
	 	 	 	 
	
              CHATSWORTH
                ROYALE,  a California

            	 	 
	
              limited
                partnership

            	
              /s/
                Jerry  Agam

            
	 	 	
              Jerry
                Agam,  an individual

            
	 	 	 	 
	
              By:

            	
              /s/
                Warren Breslow

            	
              PACIFICA
                MANOR, INC.,   a

            
	 	
              Warren
                Breslow,   as Trustee

            	
              California
                corporation

            
	 	
              of
                The Warren L.  Breslow

            	 	 
	 	
              Trust,   a
                General Partner

            	 	 
	 	 	 	 
	 	 	
              By:

            	
              /s/
                Jerry Agam

            
	 	 	 	
              Jerry
                Agam,   President