<PAGE>

                                                                   EXHIBIT 10.67
Recording Requested By And
When Recorded  Mail To:

James R. Andrews, Esq.
Gilchrist & Rutter Professional Corporation
1299 Ocean Avenue, Suite 900
Santa Monica, CA  90401-1000



              AMENDED AND RESTATED ASSIGNMENT OF LEASES AND RENTS
              ---------------------------------------------------


     THIS AMENDED AND RESTATED ASSIGNMENT OF LEASES AND RENTS ("ASSIGNMENT") is
made as of September 29, 1997, by HEARTHSIDE SKILLED NURSING FACILITY, LLC, a
Delaware limited liability company, having its principal place of business at
31105 Rancho Viejo Road, No. 5, San Juan Capistrano, California 92675
("ASSIGNOR"), to G&L REALTY PARTNERSHIP, L.P., a Delaware limited partnership,
having an office at 439 North Bedford Drive, Beverly Hills, California 90210
("ASSIGNEE").

     This Assignment amends and completely restates that certain Assignment of
Leases and Rents dated August 28, 1997 executed by assignor in favor of
Assignee, pursuant to the terms of an agreement dated August 29, 1997 between
Assignor and Assignee concerning modification of loan documents.


                                  WITNESSETH:

     THAT Assignor for good and valuable consideration, receipt whereof is
hereby acknowledged, hereby grants, transfer and absolutely and unconditionally
assigns to Assignee the entire lessor's interest in and to all current and
future leases, and other agreements affecting the use, enjoyment, or occupancy
of all or any part of the land, more particularly described in Exhibit A annexed
                                                               ---------        
hereto and made a part hereof, together with the buildings, structures,
fixtures, additions, enlargements, extensions, modifications, repairs,
replacements and improvements now or hereafter located thereon (hereinafter
collectively referred to as the "PROPERTY").

     TOGETHER WITH all other leases and other agreements affecting the use,
enjoyment or occupancy of any part of the Property now or hereafter made
affecting the Property or any portion thereof, together with any extensions or
renewals of the same, this Assignment of other present and future leases and
present and future agreements being effective without further or supplemental
assignment;

                                      -1-
<PAGE>
 
     The leases and other agreements described above together with all other
present and future leases and present and future agreements and any extension or
renewal of the same are hereinafter collectively referred to as the "LEASES";

     TOGETHER WITH all accounts, deposits, rents, income, issues, revenues,
receipts, insurance proceeds and profits arising from the Leases and renewals
thereof and together with all rents, income, issues and profits (including, but
not limited to, all oil and gas or other mineral royalties and bonuses) from the
use, enjoyment and occupancy of the Property, or the sale, lease, sublease,
license, concession or other grant of right to use or occupy any portion
thereof, vending machine proceeds, and any compensation received for the
rendering of services by Assignor (hereinafter collectively referred to as the
"RENTS").

     THIS ASSIGNMENT is made in consideration of that certain loan made by
Assignee to Assignor evidenced by that certain amended and restated note made by
Assignor to Assignee, dated the date hereof, in the principal sum of One Million
Nine Hundred Thirty-Four Thousand Three Hundred Twenty-Five Dollars and No Cents
($1,934,325.00) (the "NOTE"), and secured by that certain amended and restated
deed of trust, security agreement, and fixture filing with assignment of rents
and agreements given by Assignor to Assignee, dated the date hereof covering the
Property and intended to be duly recorded (the "SECURITY INSTRUMENT").

     The principal sum, interest and all other sums due and payable under the
Note and Security Instrument are hereinafter collectively referred to as the
"DEBT".  This Assignment, the Note, the Security Instrument and any other
documents now or hereafter executed by Assignor and/or others and by or in favor
of Assignee which evidences, secures or guarantees all or any portion of the
payments due under the Note or otherwise is executed and/or delivered in
connection with the Note and the Security Instrument are hereinafter referred to
as the "LOAN DOCUMENTS".

     ASSIGNOR WARRANTS that (A) Assignor is the sole owner of the entire
lessor's interest in the Leases; (B) the Leases are valid, enforceable and in
full force and effect and have not been altered, modified or amended in any
manner whatsoever; (C) none of the Rents have been assigned or otherwise pledged
or hypothecated; (D) none of the Rents have been collected for more than two (2)
months in advance; (E) Assignor has full power and authority to execute and
deliver this Assignment and the execution and delivery of this Assignment has
been duly authorized and does not conflict with or constitute a default under
any law, judicial order or other agreement affecting Assignor or the Property;
(F) the premises demised under the Leases have been completed and the tenants
under the Leases have accepted the same and have taken possession of the same on
a rent-paying basis; and (G) there exist on offsets or defenses to the payment
of any portion of the Rents.

     ASSIGNOR COVENANTS with Assignee that Assignor (A) shall observe and
perform all the obligations imposed upon the lessor under the Leases and shall
not do or permit to be done anything to impair the value of the Leases as
security for the Debt; (B) shall promptly send copies to Assignee of all notices
of default which Assignor shall send or

                                      -2-
<PAGE>
 
receive thereunder; (C) shall enforce all of the terms, covenants and conditions
contained in the Leases upon the part of the lessee thereunder to be observed
and performed, short of termination thereof; (D) shall not collect any of the
Rents more than one (1) month in advance; (E) shall not execute any other
assignment of the lessor's interest in the Leases or the Rents; (F) shall
deliver to Assignee, upon request, tenant estoppel certificates from each
commercial tenant at the Property in form and substance reasonably satisfactory
to Assignee, provided that Assignor shall not be required to deliver such
certificates more frequently than two (2) times in any calendar year; and (G)
shall execute and deliver at the request of Assignee all such further
assurances, confirmations and assignments in connection with the Property as
Assignee shall from time to time require.

     ASSIGNOR FURTHER COVENANTS with Assignee that Assignor shall not, without
the prior consent of Assignee (i) enter into any Lease of all or any part of the
Property in excess of 5% of gross leasable area rentable square feet (a "MAJOR
LEASE"), (ii) cancel, terminate, abridge or otherwise modify the terms of any
Major Lease, or accept a surrender thereof, (iii) consent to any transfer,
assignment of or subletting under any Major Lease, (iv) cancel, terminate,
abridge or otherwise modify any guaranty of any Major Lease or the terms
thereof, (v) accept prepayments of installments of Rents for a period of more
than one (1) month in advance or (vi) further assign the whole or any part of
the Leases or the Rents.  In addition to the foregoing, Assignor shall not, (i)
lease all or any part of the Property, (ii) cancel, terminate, abridge or
otherwise modify the terms of any Lease, or accept a surrender thereof, (iii)
consent to any transfer, assignment of or subletting under any Lease not in
accordance with its terms or (iv) cancel, terminate, abridge or otherwise modify
any guaranty of any Lease or the terms thereof unless such actions are exercised
for a commercially reasonable purpose in an arms-length transaction on market
rate terms.

     ASSIGNOR FURTHER COVENANTS with Assignee that (A) all Leases shall provide
that the tenant agrees to attorn to Assignee; (B) none of the Leases shall
contain any option to purchase, any right of first refusal to lease or purchase,
or any right to terminate the lease term (except in the event of the destruction
of all or substantially all of the Property); (C) Leases executed after the date
hereof shall not contain any provisions which adversely affect the Property or
which might adversely affect the rights of the Assignee, and (D) each tenant
shall conduct business only in that portion of the Property covered by its
lease.  Upon request, Assignor shall furnish Assignee with executed copies of
all Leases.

     THIS ASSIGNMENT is made on the following terms, covenants and conditions:

     1.    PRESENT ASSIGNMENT.  Assignor does hereby absolutely and
           ------------------                                      
unconditionally assign to Assignee Assignor's right, title and interest in all
current and future Leases and Rents, it being intended by Assignor that this
assignment constitutes a present, absolute and unconditional assignment and not
an assignment for additional security only.  Such assignment to Assignee shall
not be construed to bind Assignee to the performance of any of the covenants,
conditions, or provisions contained in any such Lease or otherwise to impose any
obligation upon Assignee.  Assignor agrees to execute and deliver to Assignee
such additional instruments, in form and substance satisfactory to Assignee, as
may hereinafter be

                                      -3-
<PAGE>
 
requested by Assignee to further evidence and confirm said assignment.
Nevertheless, subject to the terms of this paragraph, Assignee grants to
Assignor a revocable license to operate and manage the Property and to collect
the Rents.  Assignor shall hold the Rents, or a portion thereof, sufficient to
discharge all current sums due on the Debt for use in the payment of such sums.
Upon an Event of Default (as defined in the Security Instrument), the license
granted to Assignor herein shall automatically be revoked by Assignee and
Assignee shall immediately be entitled to receive and apply all Rents, whether
or not Assignee enters upon and takes control of the Property.  Assignee and
Trustee (as defined in the Security Instrument) are hereby granted and assigned
by Assignor the right, at its option, upon the revocation of the license granted
herein to enter upon the Property in person, by agent or by court-appointed
received to collect the Rents.  Any Rents collected after the revocation of the
license herein granted may be applied toward payment of the Debt in such
priority and proportion as Assignee, in its discretion, shall deem proper.

     2.    REMEDIES OF ASSIGNEE.  Upon or at any time after an Event of Default,
           --------------------                                                 
Assignee may, at its option, without waiving such Event of Default, without
notice and without regard to the adequacy of the security for the Debt, either
in person or by agent, with or without bringing any action or proceeding, or by
a receiver appointed by a court, take possession of the Property and have, hold,
manage, lease and operate the Property on such terms and for such period of time
as Assignee may deem proper and either with or without taking possession of the
Property in its own name, demand, sue for or otherwise collect and receive all
Rents, including those past due and unpaid, with full power to make from time to
time all alterations, renovations, repairs or replacements thereto or thereof as
may seem proper to Assignee and may apply the Rents to the payment of the
following in such order and proportion as Assignee in its sole discretion may
determine, any law, custom or use to the contrary notwithstanding:  (a) all
expenses of managing and securing the Property, including, without being limited
thereto, the salaries, fees and wages of a managing agent and such other
employees or agents a Assignee may deem necessary or desirable and all expenses
of operating and maintaining the Property, including, without being limited
thereto, all taxes, charges, claims, assessments, water charges, sewer rents and
any other liens, and premiums for all insurance which Assignee may deem
necessary or desirable, and the cost of all alterations, renovations, repairs or
replacements, and all expenses incident to taking and retaining possession of
the Property; and (b) the Debt, together with all costs and attorneys' fees.  In
addition to the rights which Assignee may have herein, upon the occurrence of an
Event of Default, Assignee, at its option, may either require Assignor to pay
monthly in advance to Assignee, or any receiver appointed to collect the Rents,
the fair and reasonable rental value for the use and occupation of such part of
the Property as may be in possession of Assignor or require Assignor to vacate
and surrender possession of the Property to Assignee or to such receiver and, in
default thereof, Assignor may be evicted by summary proceedings or otherwise.
Additionally, Assignee shall have the right to establish a lock box for the
deposit of all Rents and other receivables of Assignor relating to the Property.
For purposes of paragraphs 1 and 2 hereof, Assignor grants to assignee its
irrevocable power of attorney, coupled with an interest, to take any and all of
the aforementioned actions and any or all other actions designated by Assignee
for the proper management and preservation of the Property.  The exercise by
Assignee of the option

                                      -4-
<PAGE>
 
granted it in this paragraph and the collection of the Rents and the application
thereof as herein provided shall not be considered a waiver of any default by
Assignor under the Note, the Security Instrument, the Leases, this Assignment or
the other Loan Documents.

     3.    NO LIABILITY OF ASSIGNOR.  Assignee shall not be liable for any loss
           ------------------------                                            
sustained by Assignor resulting from Assignee's failure to let the Property
after an Event of Default or from any other act or omission of Assignee in
managing the Property after an Event of Default.  Assignee shall not be
obligated to perform or discharge any obligation, duty or liability under the
Leases or under or by reason of this Assignment and Assignor shall, and hereby
agrees, to indemnify Assignee for, and to hold Assignee harmless from, any and
all liability, loss or damage which may or might be incurred under the Leases or
under or by reason of this Assignment and from any and all claims and demands
whatsoever, including the defense of any such claims and demands whatsoever,
including the defense of any such claims or demands which may be asserted
against Assignee by reason of any alleged obligations and undertakings on its
part to perform or discharge any of the terms, covenants or agreements contained
in the Leases.  Should Assignee incur any such liability, the amount thereof,
including costs, expenses and attorneys' fees, shall be secured hereby and by
the Security Instrument and the other Loan Documents and Assignor shall
reimburse Assignee therefor immediately upon demand and upon the failure of
Assignor so to do Assignee may, at its option, declare all sums secured hereby,
the Note, the Security Instrument and the other Loan Documents immediately due
and payable.  This Assignment shall not operate to place any obligation or
liability for the control, care, management or repair of the Property upon
Assignee, for the carrying out of any of the terms and conditions of the Leases;
nor shall it operate to make Assignee responsible or liable for any waste
committed on the Property by the tenants or any other parties, or for any
dangerous or defective condition of the Property, including, without limitation,
the presence of any Hazardous Substances (as defined in the Security
Instrument), or for any negligence in the management, upkeep, repair or control
of the Property resulting in loss or injury or death to any tenant, licensee,
employee or stranger.

     4.    NOTICE TO LESSEES.  Assignor hereby authorized and directs the
           -----------------                                             
tenants named in the Leases or any other or future tenants or occupants of the
Property upon receipt from Assignee of written notice to the effect that the
Assignee is then the holder of the Note and that a default exists hereunder or
under this Assignment, the Note, the Security Instrument or the other Loan
Documents to pay over to Assignee all rents and to continue to do so until
otherwise notified by Assignee.

     5.    OTHER SECURITY.  Assignee may take or release other security for the
           --------------                                                      
payment of the Debt, may release any party primarily or secondarily liable
therefor and may apply any other security held by it to the reduction or
satisfaction of the Debt without prejudice to any of its rights under this
Assignment.

     6.    OTHER REMEDIES.  Nothing contained in this Assignment and no act done
           --------------                                                       
or omitted by Assignee pursuant to the power and rights granted to Assignee
hereunder shall be deemed to be a waiver by Assignee of its rights and remedies
under the Note, the Security

                                      -5-
<PAGE>
 
Instrument or the other Loan Documents and this Assignment is made and accepted
without prejudice to any of the rights and remedies possessed by Assignee under
the terms thereof.  The right of Assignee to collect the Debt and to enforce any
other security therefor held by it may be exercised by Assignee either prior to,
simultaneously with, or subsequent to any action taken by it hereunder.

     7.    NO MORTGAGEE IN POSSESSION.  Nothing herein contained shall be
           --------------------------                                    
construed as constituting Assignee a "mortgagee in possession" in the absence of
the taking of actual possession of the Property by Assignee.  In the exercise of
the powers herein granted Assignee, no liability shall be asserted or enforced
against Assignee, all such liability being expressly waived and released by
Assignor.

     8.    CONFLICT OF TERMS.  In case of any conflict between the terms of this
           -----------------                                                    
Assignment and the terms of the Security Instrument, the terms of the Security
Instrument shall prevail.

     9.    NO ORAL CHANGE. This Assignment and any provisions hereof may not be
           --------------                                                      
modified, amended, waived, extended, changed, discharged or terminated orally,
or by any act  or failure to act on the part of Assignor or Assignee, but only
by an agreement in writing signed by the party against whom the enforcement of
any modification, amendment, waiver, extension, change, discharge or termination
is sought.

     10.   CERTAIN DEFINITIONS.  Unless the content clearly indicates a contrary
           -------------------                                                  
intent or unless otherwise specifically provided herein, words used in this
Assignment may be used interchangeable in singular or plural form and the word
"ASSIGNOR" shall mean each Assignor and any subsequent owner or owners of the
Property or any part thereof or any interest therein, the word "ASSIGNEE" shall
mean Assignee and any subsequent holder of the Note, the word "NOTE" shall mean
the Note and any other evidence of indebtedness secured by the Security
Instrument, the word "PERSON" shall include an individual, corporation,
partnership, trust, unincorporated association, government, governmental
authority, and any other entity, the word "PROPERTY" shall include any portion
of the Property and any interest therein; whenever the context may require, any
pronouns used herein shall include the corresponding masculine, feminine or
neuter forms; and the singular form of nouns and pronouns shall include the
plural and vice versa.

     11.   NON-WAIVER.  The failure of Assignee to insist upon strict
           ----------                                                
performance of any term shall not be deemed to be a waiver of any term of this
Assignment.  Assignor shall not be relieved of Assignor's obligations hereunder
by reason of (i) failure of Assignee to comply with any request of Assignor or
any other party to take any action to enforce any of the provisions hereof or of
the Security Instrument, the Note or the other Loan Documents, (ii) the release
regardless of consideration, of the whole or any part of the Property, or (iii)
any agreement or stipulation by Assignee extending the time of payment or
otherwise modifying or supplementing the terms of this Assignment, the Note, the
Security Instrument or the other Loan Documents.  Assignee may resort for the
payment of the Debt to any other security held by Assignee in such order and
manner as Assignee, in its discretion, may elect.

                                      -6-
<PAGE>
 
Assignee may take any action to recover the Debt, or any portion thereof, or to
enforce any covenant hereof without prejudice to the right of Assignee
thereafter to enforce its rights under this Assignment.  The rights of Assignee
under this Assignment shall be separate, distinct and cumulative and none shall
be given effect to the exclusion of the others.  No act of Assignee shall be
construed as an election to proceed under any one provision herein to the
exclusion of any other provisions.

     12.   INAPPLICABLE PROVISIONS.  If any term, covenant or condition of this
           -----------------------                                             
Assignment is held to be invalid, illegal or unenforceable in any respect, this
Assignment shall be construed without such provision.

     13.   DUPLICATE ORIGINALS.  This Assignment may be executed in any number
           -------------------                                                
of duplicate originals and each such duplicate original shall be deemed to be an
original.

     14.   GOVERNING LAW.  This Assignment shall be governed and construed in
           -------------                                                     
accordance with the laws of the state in which the real property encumbered by
the Security Instrument is located.

     15.   TERMINATION OF ASSIGNMENT.  Upon payment in full of the Debt and the
           -------------------------                                           
delivery and recording of a satisfaction, release, reconveyance or discharge of
the Security Instrument duly executed by Assignee, this Assignment shall become
and be void and of no effect.

     16.   WAIVER OF JURY TRIAL.  ASSIGNOR HEREBY AGREES NOT TO ELECT A TRIAL BY
           --------------------                                                 
JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY
JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH
REGARD TO THIS ASSIGNMENT, THE SECURITY INSTRUMENT OR THE OTHER LOAN DOCUMENTS
OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION THEREWITH.
THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY
ASSIGNOR, AND IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE
AS TO WHICH THE RIGHT TO TRIAL BY JURY WOULD OTHERWISE ACCRUE.  ASSIGNEE IS
HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS
CONCLUSIVE EVIDENCE OF THIS WAIVER BY ASSIGNOR.

                                      -7-
<PAGE>
 
     THIS ASSIGNMENT shall inure to the benefit of Assignee and any subsequent
holder of the Note and shall be binding upon Assignor, and Assignor's heirs,
executors, administrators, successors and assigns and any subsequent owner of
the Property.

     Assignor has executed this instrument the day and year first above written.

                          ASSIGNOR:

                          HEARTHSIDE SKILLED NURSING CENTER, LLC,
                          a Delaware limited liability company


                          By: /s/ Johann Keil
                             ---------------------------------------
                             Name: JOHANN KEIL
                                  ----------------------------------
                             Title: Member
                                   ---------------------------------

                                      -8-
<PAGE>
 
                     CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT


State of California       )
                          ) ss.
County of Los Angeles     )



     On Sept, 29, 1997 (date) before me, Helen Nelson (name and title "Notary
Public"), personally appeared Johann Keil (name of signer(s)), personally known
to me (or proved to me on the basis of satisfactory evidence) to be the
person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.

WITNESS my hand and official seal.




/s/ Helen Nelson
------------------------ 
(signature of Notary)               (seal of Notary)

                                      -9-
<PAGE>
 
                                   EXHIBIT A
                                   ---------

                               LEGAL DESCRIPTION
                               -----------------


     PARCEL 1:  Lot 1, Block 6, BOULEVARD PARK ADDITION, Coos County, Oregon,
     Except the West 50 feet thereof.

     PARCEL 2:  Lot 2 and the West 50 feet of Lot 1, Block 6, BOULEVARD PARK
     ADDITION, Coos County, Oregon.

     Real Property Tax Account No.:  64345.00 and 64345.02
     Assessors Parcel No.:  T25-R13-S22DB Tax Lot 2300 and 2301
     Property Address disclosed by Coos County Tax Roll:
                                                              2625 Koosbay Blvd.
                                                              Coos Bay, OR 97420

                                      A-1