~~ !:~~~,~,~'"Community Redevelopment Agencyof the CITY OF LOS ANGELES

DATE / DEe 6 2007FilE CODE /

354 South Spring Street / Suite 800Los Angeles! California 90013-1258

T 213 977 1600/ F 213 977 1665

www.crala.org

CRA File No. 5181 ./Council District: 4 AND 13 V

Contact Person: Mayra Rivera

(213) 977-1755Honorable Council of the City of Los AngelesJohn Ferraro Council Chamber200 N. Spring StreetRoom 340, City HallLos Angeles, CA. 90012

Attention: Alan Alietl, Office of the City Clerk

COUNCIL TRANSMITTAL:Transmitted herewith, is a Board Memorandum adopted by the Agency Board onDecember 6, 2007, for City Council review and approval in accordance with the"Community Redevelopment Agency Oversight Ordinance" entitled:

VARIOUS ACTIONS RELATED TO:BUDGET AMENDMENT AND AUTHORIZATION TO EXECUTE A SERVICEREPAYMENT CONDITIONAL GRANT AGREEMENT WITH TRAVELERS AIDSOCIETY OF LOS ANGELES IN THE AMOUNT OF $864,000 FOR THE ACQUISITIONOF A REPLACEMENT SOCIAL SERVICE FACILITY LOCATED AT 1507-1509WINONA BOULEVARD IN THE EAST HOLL YWOOD/BEVERL Y-NORMANDIEDISASTER ASSISTANCE PROJECT AREA

HOLL YWOOD/CENTRAL REGION (CD4 AND CD13)

RECOMMENDATIONThat City Council approve(s) recommendation(s) on the attached Board Memorandum.

ENVIRONMENTAL REVIEWThe rehabilitation of the HVAC system is categorically exempt from the CaliforniaEnvironmental Quality Act ("CEQA") pursuant to Article Vi! 1 a (4) to the CRMLA CEQAGuidelines.

FISCAL IMPACT STATEMENTThere is no fiscal impact to the City's Genera! Fund, as a result of this action.

¿i--spv. ,- -Cecilia V. Estolano, Chief Executive Officer

~~

.e 0 7 2007

HOUSING. COMMUNITY &ECONOMIC DEVELOPMENT

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cc: Alan Alietti, Office of the City Clerk (Original & 3 Copies on 3-hole punch)Lisa Johnson Smith, Nancy Duong, Office of the CAOPaul Smith, Ivania Sobalvarro, Office of the CLAHelmi Hisserich, Office of the MayorNoreen Vincent, Office of the City AttorneyCouncil President Eric Garcetti, Council District 13Councilmember Tom LaBonge, Council District 4

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, /THE COMMUNITY REDeVELOPMENT AGENCY OF THE CITY OF LOS ANGELES, CALIFORNIA

MEMORANDUMi I

DATE: DECEMBER 6, 2007 EB6990

TO: CRMLA BOARD OF COMMISSIONERS

FROM: CECILIA V. ESTOLANO, CHIEF EXECUTIVE OFFICER

RESPONSIBLEPARTIES: LESLIE LAMBERT, REGIONAL ADMINISTRATOR

MAYRA RIVERA, ASSISTANT PROJECT MANAGER

SUBJECT: BUDGET AMENDMENT AND AUTHORIZATION TO EXECUTE A SERVICEREPAYMENT CONDITIONAL GRANT AGREEMENT WITH TRAVELERSAID SOCIETY OF LOS ANGELES IN THE AMOUNT OF $864,000 FOR THEACQUISITION OF A REPLACEMENT SOCIAL SERVICE FACILITYLOCATED AT 1507-1509 WINONA BOULEVARD IN THE EASTHOLL YWOOD/BEVERL Y-NORMANDIE DISASTER ASSISTANCE PROJECTAREAHOLL YWOOD/CENTRAL REGION (CD 4 AND13)

LOAN COMMITTEE: APPROVED BY LOAN COMMITTEE ON NOVEMBER 21, 2007

RECOMMENDATIONS

That the CRMLA Board of Commissioners, subject to City Council review and approval:

1) Authorize the Chief Executive Officer or designee to execute a Service RepaymentConditional Grant Agreement with Travelers Aid Society of Los Angeles (TASLA) in theamount of $864,000 to provide funding for the acquisition of a replacement social servicefacility located at 1507-1509 Winona Boulevard.

2) Authorize the Chief Executive Officer or designee to execute any subordination

agreement subordinating the CRMLA's deed of trust securing the above-referencedservice repayment conditional grant to a lender's deed of trust.

3) Arnend the FY08 Budget and Work Program to transfer $864,000 from budgeted lineitem "Public Improvements" to budgeted line item "Development Opportunities".

SUMMARY

The recommended action will provide funding in the amount of $864,000 to Travelers AidSociety of Los Angeles (TASLA) for a portion of acquisition costs associated with TASLA'spurchase of a replacement facility so that T ASLA can continue providing social services tohomeless, runaway youth (15-25 years), adults, and families. The CRlLA funds will beprovided through a service repayment conditional grant that is secured by a deed of trust andamortized over 10 years. Each year, with respect to 10% of the conditional grant amount, theservice provision condition of the conditional grant will be deemed satisfied if TASLA providesthe agreed-upon level and quality of social services during that year.

SERVICE REPAYMENT GRAI.(T - TRAVELERS AID SOCIETY 2

TASLA was previously located in the Hollywood Redevelopment Project Area at the CRlLAowned property located at 1720 North Gower Street in Los Angeles. The CRlLA owned-property at 1720 North Gower Street is now contemplated to be used as the potential site for aproposed supportive housing project known as Villas(gGower. At the time of discussingrelocation options, TASLA opted to move to the East Hollywood Project Area. On September 7,2007, TASLA and the CRMLA agreed on an all-inclusive amount of $20,000 for any applicablerelocation benefit, fixture and equipment, loss of goodwill, and other similar expenses/benefits.TASLA is now in escrow to purchase the property located at 1507-1509 Winona Boulevard anddesires that the CRlLA assist with a portion of the acquisition costs.

The purchase price for 1507-1509 Winona Boulevard is $1,180,000. TASLA has obtained aloan with EastWest Bank in the amount of $335,000 ($316,000 for acquisition and $19,000 forHVAC repairs) at a fixed rate of 8.99% for a period of 30 years. EastWest Bank has a firstpriority lien created by a Deed of Trust on the property and will require subordination of theCRMLA's deed of trust securing the conditional grant.

TASLA revised its Scope of Services since the closing of their Drop In Center, Teen Canteen, atthe 1720 North Gower Street location. TASLA will be increasing the amount and quality ofservices at the new facility at the 1507-1509 Winona Boulevard location. TASLA offerstransportation assistance plus social casework. They have established formal, strategiccollaborations with local agencies where a high volume of homeless youth, adults, and familiesand those at risk for homelessness already attend to receive multiple services in one location.TASLA already has placed a dedicated caseworker at PATH RHC to serve homeless adults andfamilies. Similarly, TASLA will place dedicated caseworkers in local venues to providespecialized expertise in the area of helping stranded people to return to their home communitiesor to obtain stability in the areas of food, clothing, shelter, as well as to obtain needed medical,mental health, legal, and other supports. TASLA will place dedicated caseworkers at PATHRHC (a second caseworker), Social Services at Blessed Sacrament, and at First PresbyterianChurch of Hollywood. In this way, TASLA will increase the services it provides in Hollywoodalong with the direct social services it provides at 1507-09 Winona Boulevard. TASLA hasserved Hollywood since 1983. It is the only agency in Hollywood specializing in helping peopleto return to their horne communities or to find safe housing, medical, mental health, substanceabuse, legal, or other services to improve their lives. TASLA helped people to return homeduring the Katrina disaster. TASLA is the premiere agency helping stranded travelers who haveno resources and nowhere else to turn for help. TASLA is a member of a network of 50agencies nationwide (Travelers Aid International) helping stranded people.

TASLA's Operational hours are Monday through Friday, 8:30am to 5:00pm.

CRA/LA staff recognizes TASLA's long history of providing much-needed services to homeless,runaway youth, adults and families. In addition, the CRMLA recognizes that this nonprofit hasnot generated and is not expected to generate income in excess of operating expenses andthere is no foreseeable means of generatrng funds in the near future. !n accordance with

Section iV of CRMLA's Conditional Grant Policy, it is recommended that a service repaymentconditional grant be made to T ASLA. The CRMLA staff believes that it is in the best interest ofthe City of Los Angeles to ensure that TASLA continues to provide its services to homeless,runaway youth, individual and families

The conditional grant will be evidenced by a Promissory Note secured by a subordinate deed oftrust recorded against the Winona Boulevard property.

SERVICE REPAYMENl GRANT - TRAVELERS AID SOCiETY 3

RE

Initial Action

SOURCE OF FUNDS

East Hollywood/Beverly-Normandie Earthquake Disaster Assistance Bond Proceeds Series C.

PROGRAM AND BUDGET IMPACT

The recommended action supports the delivery of social services for special needs populations,including low-income individuals and families. Adequate funds are available in the FY08 workprogram budget for EB6990 for this action. There is no impact to the City's General Fund.

ENVIRONMENTAL REVIEW

The rehabilitation of the HVAC system is categorically exempt from the California EnvironmentalQuality Act ("CEQA") pursuant to Article VI11 a (4) fo the CRMLA CEQA Guidelines.

BACKGROUND

TASLA is a nonprofit corporation that has strong name recognition with the social servicecommunity, as it has been a nonprofit for 85 years, providing youth services for almost 25 yearsin Hollywood. TASLA is the only social services agency that assists youth, adults, and familiesto return to their home communities by providing social casework and transportation assistance.TASLA serves individuals and families who are primarily homeless or at-risk for homelessness,including the traveling public (many of whom arrive in Hollywood in crisis with literally noresources and nowhere to turn for assistance except to TASLA) and are often mentally ill;victims of crime, runaways, abandoned, frail and elderly, victims of domestic violence,repatriated citizens, people seeking political asylum; or families undergoing a health or financialcrisis while in transit. TASLA provides case management services with a goal of improving thelives of people who need crisis intervention; emergency services consisting of food vouchers;transportation assistance locally to attend appointments (e.g. medical/mental health, publicservices, employment, housing or to return to family/community or origin); counseling; guidance;support; reassurance and education; and information resources/referrals to other agencies andservices throughout the community that can appropriately and specifically best meet clients'needs.

TASLA showed a budget surplus in June 2007 of $45,795. However, by September 2007,TASLA had incurred an operating loss of $141,000 resulting in an aggregate deficit of over$95,000. This resulted from a loss of United Way core funding of $155,850. In addition, othercontributions from foundations and corporations have been lower than expected. Currently,T ASLA's monthly expenditures on average exceed revenues by more than $5,000.

The Executive Board members of the Travelers Aid Society of Los Angeles are: MasonShayan, President (Principal, LA Rent-a-Car), UA Garred Sexton, M.D., First Vice President(retired American Airlines executive, physician), Sheila Okabayashi, Second Vice President(Principal, Integrated Solutions Design Group), James Wallace, Secretary-Treasurer (Attorneyat Law (retired)), Mollyanne George (Community Activist/Retired Teacher), Hunt Lowry(Roserock Productions), Terry Marcellino (Corporate Outreach, Woodcraft Rangers), and PaulE. Hollombe, LCSW, Executive Director & Assistant Secretary-Treasurer.

SERVICE REPAYMENT Gkr\NT - TRAVELERS AID SOCIETY 4

City Council members Tom LaBonge and Eric Garcetti support the proposed Project.

Los Angeles County Supervisor Zev Yaroslavsky supports the proposed project.

EQUAL OPPORTUNITY AND AFFIRMATIVE ACTION

Travelers Aid Society of Los Angeles and any alternative contractor will be bound by theCRMLA's Equal Opportunity and Affirmative Action policies and the CRlLA's Living Wage,Worker Retention, Equal Benefits and Contractor Responsibilities policies as applicable.

Cecilia V. EstolanoChief Executive Officer

e n F. WassermanCh' f Operating Officer

There is no conflct of interest known to me, which exists with regard to any CRA/LA offcer oremployee concerning these actions.

Attachment A: Map

ATTACHMENT "A"Site Map PROJECT SITE

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TRAVELERS AID SOCIETY OF LOS ANGELES, CALIFORNIACONDITIONAL GRANT AGREEMENT

(Ten-Year Service Repayment Loan)($864,000)

(Loan # 876006-001)

BY AND BETWEEN

THE COMMUNITY REDEVELOPME:\T AGE"CYOF

THE CITY OF LOS ANGELES, CALIFORNIA

AND

TRA VELERS AID SOCIETY OF LOS ANGELES, CALIFOR1'\IA,a California non-profit Corporation

Date: December 6, 2007

Travelers Aid Conditional Grant Agreement. md 11-27-07

i

Table of ContentsRECITALS 2ARTICLE l. DEFINITIONS 4ARTICLE 2. EXHIBITS 7ARTICLE 3. TERMS OF LOAN 73 . 1 LOAN 73 . 2 AMOUNT OF LOAN 73 . 3 TERM OF LOAN 83.4 USE OF FUNDS 83 . 5 PREPAYMENT OF LOAN 83.6 COLLATERAL 83.7 TITLE AND TITLE INSURACE 83.8 RECORDING 83 . 9 REPAYMENT OF CRA/LA LOAN 9ARTICLE 4. LOAN DISBURSEMENT 94.1 DISBURSEMENT OF LOAN PROCEEDS 94.2 AMOUNT OF DISBURSEMENT 104.3 CONDITIONS PRECEDENT TO DISBURSEMENT 10

ARTICLE 5. RECORDS, AUDITS, TAXES AND MISCELLANEOUS 115.1 RECORDS 115.2 INSPECTIONS 125.3 AUDITS 125.4 MECHAICS LIENS AND STOP NOTICES 125.5 BARRIERS TO THE DISABLED 125.6 LEAD-BASED PAINT 135.7 FEES, TAXES, AND OTHER LEVIES 135.8 DAMAGE TO THE DEVELOPMENT 13

ARTICLE 6. LABOR AND EMPLOYMENT REQUIREMENTS 136.1 EQUAL EMPLOYMENT OPPORTUNITY 136.2 AFFIRMATIVE OUTREACH IN EMPLOYMENT AND

CONTRACTING PROCEDURES, INCLUDING UTILIZATIONOF MINORITY, WOMEN AND OTHER BUSINESSES 14

6.3 UTILIZATION OF PROJECT AREA RESIDENTS 166.4 PREVAILING WAGES 206 . 5 CRA/LA' S LIVING WAGE, CONTRACTOR

RESPONSIBILITY, SERVICE WORKER RETENTION,AND EQUAL BENEFITS POLICIES 22

6.6 GENERAL INFûR~~TIONARTICLE 7. OPERATION OF DEVELOPMENT

7.1 OPERATION OF DEVELOPMENT7.2 LEASING THE DEVELOPMENT7.3 SITE USE RESTRICTIONS7.4 NONDISCRIMINATION7.5 FORM OF NONDISCRIMINATION

NONSEGREGATION CLAUSE7.6 TRASFER OF THE SITE

ARTICLE 8. INDEMNITY AND INSURACE8 . 1 INDEMNITY8 . 2 INSURACE COVERAGE

252525262626

AND2627282828

8.3 INSURACE ADVANCES 318.4 NON-LIABILITY OF OFFICIALS, EMPLOYEES& AGENTS 31

ARTICLE 9. HAZARDOUS MATERIALS 319.1 REPRESENTATIONS AND WARRATIES 319.2 NOTIFICATION TO CRA/LA 329.3 USE AND OPERATION OF SITE 329.4 REMEDIAL ACTIONS 329.5 ENVIRONMENTAL INDEMNITY 32

ARTICLE 10. DEFAULT AND REMEDIES 3210.1 EVENTS OF DEFAULT 3310.2 NOTICE OF DEFAULT AND OPPORTUNITY TO CURE 3410.3 CRA/LA'S REMEDIES 34

ARTICLE 11. GENERAL PROVISIONS 3611.1 TASLA'S WARRATIES 3611.2 MONITORING AND EVALUATION 3611.3 CONFLI CTS OF INTEREST 3611.4 POLITICAL ACTIVITY 3611.5 PUBLICITY 3611 . 6 TERM OF THI S AGREEMENT 3711.7 GOVERNING LAW 3711.8 STATUTORY REFERENCES 3711.9 TIME 3711.10 UNAVOIDABLE DELAY IN PERFORMACE 3711.11 CONSENTS AND APPROVALS 3711.12 NOTICES, DEMADS AND COMMUNICATIONS 3811.13 BINDING UPON SUCCESSORS 3811.14 RELATIONSHIP OF PARTIES 3811.15 ASSIGNMENT AND ASSUMPTION 3911.16 WAIVER 3911.17 INTEGRATION 3911 . 18 OTHER AGREEMENTS 3911.19 AMENDMENTS AND MODIFICATIONS 3911.20 SEVERABILITY 3911.21 COUNTERPARTS 3911.22 USE OF IMAGES 3911.23 LIMITED RECOURSE 40

EXHIBIT A "PURCHASE & SALE AGREEMENT" 42EXHIBIT B \~LEGAL DESCRIPTION" & SITE lJiAP" ~ ".~ATTACHMENT 1 TO EXHIBIT B 44EXHIBIT C "FORM OF AGREEMENT" 45EXHIBIT D "FORM OF DEED OF TRUST" 56ATTACHMENT 1 TO EXHIBIT D 72EXHIBIT E "ANUAL COMPLIANCE CERTIFICATE" 73EXHIBIT F "ELIGIBLE COSTS (BUDGET)" 75EXHIBIT G "EVIDENCE OF PROJECT FUNDS" 76EXHIBIT H "CRA/LA'S POLICY ON LIVING WAGE, CONTRACTOR

RESPONSIBILITY ORDINANCE, SERVICE WORKERRETENTION AND EQUAL BENEFITS ORDINANCE" 77

Travelers Aid Society of Los Angeles, California

CONDITIONAL GRANT AGREEMENT(Ten-Year Service Repayment Loan)

($864,000.0)

This Conditional Grant Agreement (Agreement) is made this 6th day of December, 2007,by and between the Community Redevelopment Agency of The City of Los Angeles, California,a public body, corporate and politic (the "CRA/LA"), and Travelers Aid Society of Los Angeles,California, a California non-profit corporation ("TASLA").

RECITALS

A. CRA/LA is charged, among other things, to promote the redevelopment ofunderutilized and blighted sites within the various project areas in the City of LosAngeles, ineluding the East Hollywood/Beverly-Normandie Disaster AssistanceProject Area (Project Area).

B. The enhancement and restoration of existing and new social service centers thatprovide needed services to homeless and runaway youths within the Project Areafurthers the goals of Project Area Redevelopment Plan and its Five-Year

Implementation Plan CRedevelopment Plan").

C. T ASLA currently operates such a social service center for homeless and runawayyouths (Service Center) on a CRA/LA owned parcel within the Project Area,which parcel is scheduled for redevelopment as a new supportive housing

development CHousing Development") requiring TASLA to relocate its ServiceCenter.

D. The CRA/LA desires to continue to have these services as well as enhancedservices available in such a Service Center within the Project Area and hasproposed to assist in relocating the Service Center from its currcnt location to anew site within the Project Area, which is in furthcranee of the RedevelopmentPlan.

Travelers Aid Conditional Grant Agreement. md i 1-27-07

E. T ASLA has entered into a Purchase and Sale Agreement (Exhibit A) to acquirethe parcel located at 1507-1509 Winona Avenue, Los Angeles CA 90027 APNNo. 5544015037 (the "Site") for the purchase price of One Million One HundredEighty Thousand Dollars ($ 1, i 80,000) for the purpose of relocating its ServiceCenter, which is more paricularly described in Exhibit B attached hereto (The

"Site").

F. The Site is approximately 3746 square feet in area and is currently developed with

an approximately 2954 square foot building that is currently used as a VacantDuplex. T ASLA wil be rehabilitating the building to accommodate its needsincluding new HV AC. The Site provides 4 parking spaces.

G. TASLA will be relocating its entire operation and staff to the Sitc, totaling 12employees, all of which will be Living Wage-compliant jobs.

H. TASLA has obtained private financing in thc amount of Threc Hundred Thirty-Five Thousand Dollars ($335,000) (the "East West Loan") and wishcs to borrowan additional Eight Hundred Sixty Four Thousand Dollars ($864,000) (the"Loan") from the CRALA to fund site acquisition for the relocation of TASLASocial Service Center. The East West loan shall be recorded prior to the CRALALoan and shall remain senior in priority to the Loan. The CRALA shall execute asubordination agreement to the East West Loan upon request.

L As a condition of the CRALA Loan, T ASLA shall execute, among other things,an Agreement Containing Covenants (Exhibit C), a Deed of Trust (ExhibitD),("Loan Documents") which Agrcement Containing Covenants and dccd oftrust shall be recordcd against the Site, in substantially the form attached hcreto asExhibits C and D. These instruments are intended as partial consideration for theservice repayment of CRALA's loan and its continuing intercst in the use,maintenance and continuation of the services provided by the Service Center, for aperiod of not less than ten (10) years, as well as to secure performance of othercovenants contained in thcse agreements.

J. It is anticipated that ten percent (10%) of the loan, along with corresponding

interest, be deemed repaid at the end of each full year of serv'ices, as verified bythe CRALA as set forth in Section 3.11, below and upon submission by T ASLAof the Yearly Compliance Certificate attached as Exhibit E setting forth theservice which T ASLA provided in the subject year and its anticipatcd scrvices forthc following year.

K. As partial consideration for the making of the loan, T ASLA shall execute anAgreement Containing Covenants, in the form attached hereto as Exhibit Crestricting the use of the property as a Social Service Center for a period of thirtyyears. (Note - The covcnant should run for 30 years not 10 or at least as long asthe project area is in existence - but that is a staff call)

Page 3

NOW THEREFORE, IN CONSIDERATION of the mutual agreements, obligations, andrepresentations, and in further consideration for the making of the Loan, T ASLA and theCRALA hereby agree as follows:

ARTICLE 1. DEFINITIONS

The following terms have the meanings and content set forth in this section whereverused in this Agreement, attached Exhibits, or documents incorporated into this Agreement byreference.

1.1 "AGREEMENT" means this Conditional Grant Agreement or Agreementcntered into between the CRA/LA and TASLA.

1.2 .." AGREEMENT CONTAINING COVENANTS" means the AgreementContaining Covenants recorded against the Site and attached hcreto as Exhibit C rcstricting theuse of the Site as a Social Service Center for a period of thirty (30) years.

1.3 "ANNUAL COMPLIANCE CERTIFICATE" means an affrmative statementin writing from TASLA to the CRALA that the project is in compliance with all rcquirementsset forth in this Agreemcnt regarding sitc use, maintenance and continuation of RequiredScrviccs during the i O-year compliance period, submitted annually no later than April 1 of eachyear, attached hereto as Exhibit E.

1.4 "BUDGET" means that budget for Dcvelopment Costs (primarily acquisition)attached as Exhibit F, which is hcrcby incorporated into this Agreement by this refcrcncc.

1.5 "BUSINESS DAY" means Monday through Friday, inclusive, excluding any dayof the year on which the CRA/LA or the City is required or authorizcd to close.

1.6 "CERTIFICATE OF COMPLETION" means that certificate issued to TASLAby the CRA/LA evidencing complction of the Development pursuant to the terms of thisAgreement.

1.7 "CITY" means the City of Los Angeles, California, a municipal Corporation.

1.8 "COMMUNITY REDEVELOPMENT LAW" means thc CommunityRedevclopment Law of the State of California (Health and Safety Code Section 33000, et scq.).

1.9 "CRALA" mcans The Community Redevelopment Agency of the City of LosAngeles, California, a public body, corporate and politic, exercising governmental functions andpowers, and organized and existing under Chapter 2 of the Community Redevelopment Law ofthe State of California and its authorized representatives, assigns, transferees, or successors-in-

Page 4

interest thereto. The principal offce of the CRALA is located at 354 South Spring Street, Suite800, Los Angeles, California 90013.

1.10 "DEED OF TRUST" is that deed of trust, assignment of rents, securityagreement and fixture filing, in the form of Exhibit D attached hereto, placed on the Site assecurity for the Loan by T ASLA as trustor with the CRALA as beneficiary, as well as anyamendments to, modifications of, and restatements of said deed of trust. The terms of the Deedof Trust are hereby incorporated into this Agreement by this reference.

1.11 "DEVELOPMENT" is defined in Recitals B and H.

1.12 "DEVELOPMENT COSTS" shall mean all costs which are incurred byT ASLA for thc acquisition, improvement, rehabilitation and dcvelopment of the Site inaccordance with this Agreement, including the Final Construction Documents approved by theCRALA, and shall include the following: acquisition cost and expenses; the ConstructionCosts; construction and design fees and gcneral development costs; architectural and engineeringcosts and fees; bridge and permanent financing costs, fees and "points" in connection with anyloan contemplated by this Agreement or otherwise approved by the CRALA; property taxes andassessments; security services; off-site improvements and pcrmits; building permits; utility fees;T ASLA fees, relocation expenses; insurance; legal and accounting fees; title and title insurance;escrow fees and closing costs; bonds; appraisals; tests to determine the condition of the Site; andsuch other costs, fees and expenses, as agreed to by the CRALA. Development Costs shall bedetermined on the basis of the Certified Statement of Costs.

1.13 "ELIGIBLE COSTS" means those Development Costs for which Loan proceedsmay be used as specified in the attached Budget (Exhibit F), which is hcreby incorporated intothis Agrecment by this rcference, and in the Budget as attached and any revisions to the Budgetthat are approved in writing by the CRALA. In addition, other items may be Eligible Costs ifapproved in writing by the CRALA.

1.14 "GAAP" shall mean generally accepted accounting principles consistentlymaintained and applied throughout the period indicated and consistent with thc prior financialpractice of the Person providing such financial information.

1.15 "HAZARDOUS MATERIALS" means any substance, material, waste,pollutant, or contaminant which is or becomes regulated by any local governental authority, theState of California, or the United States Governent, including, but not limited to, any materialor substance which is defined, regulated, or listed as "hazardous" or "extremely hazardous" ordefined, regulated or listed as a "hazardous substance," "hazardous waste," "hazardous material,""pollutant, ii "contaminant," "toxic substance," "extremely hazardous waste, It or "restrictedhazardous waste" under any federal, state or local environmental or health and safety laws andregulations, as may be amended from time to timc. Hazardous Materials include, but are notlimited to, petroleum and petroleum byproducts, flammable explosives, urea formaldehyde

insulation, polychlorinated biphcnyls, radioactive materials, asbestos, and lead. HazardousMaterials do not include substances that are used or consumed in the normal course of

Page 5

developing, operating, maintaining or occupying a commercial project, to the extent and degreethat such substances are stored, used, and disposed of in the manncr and in amounts that areconsistent with normal practice and legal standards.

1.16 "IMPROVEMENTS" means the 3746 square foot facility, associated parking,landscaping and othcr improvements.

1.17 "LOAN" or "CRALA LOAN" or "CONDITIONAL GRANTAGREEMENT" is the loan in the amount of Eight Hundred Sixty Four Thousand Dollars($864,000) made pursuant to this Agreement and as further defined herein.

1.18 "LOAN DOCUMENTS" are collectively the Agreement, the AgreementContaining Covenants, the Deed of Trust, the Promissory Note, and the Deed of Trust, as theymay be amended, modificd, or restated from time to time, along with all exhibits and attachmentsto these documents.

1.19 "MANAGEMENT REQUIREMENTS" shall mean the requirements formanaging the Development as set forth in the Agreement Containing Covenants.

1.20 "NET PROCEEDS" means the proceeds of a sale, transfer or refinancing of theDevelopment, less the amount required to pay in full all loans secured by the Site that havepriority over thc CRNLA Loan, including the CRNLA Loan, the reasonable costs of thetransaction incurred by T ASLA and repayment of the T ASLA's Equity, if any.

1.21 "NOTE" is that promissory note executed by TASLA in favor of the CRNLAevidencing the Loan, in the form of Exhibit D attached hereto, which is secured by the Deed ofTrust, as well as any amendments to, modifications of, or restatements of said promissory note.The terms ofthc Note are hereby incorporated into this Agreement by this reference.

1.22 "OPERATING EXPENSES" shall mean actual, approved reasonable andcustomary costs, fees and expenses directly attributable to the operation, recordkecping,maintenance, taxes and managcmcnt of the Development, including but not limited to: acommercially reasonable propcrty management fee; taxes and assessments; payroll and payrolltaxes for property employecs; insurance; security, painting, cleaning, repairs, and alterations;lanàscaping; sewer charges; utility charges; advertising, promotion and püblicity; cabletelevision, satellite and other similar services; office, janitorial, cleaning and building supplies;approved recreational amenities and supplies; purchase, repair, servicing and installation ofappliances, equipment, fixtures and furnishing; fire alar monitoring; fees and expenses ofaccountants, attorneys, consultants and other professionals.

1.23 "PAYMENT DATE" shall mean the date ninety (90) days after the end of the

first calendar year (or partial year) in which a Certificate of Occupancy is issued for theImprovements, and annually on such date thereafter, until the CRNLA Loan is repaid in full.

Page 6

1.24 "SERVICE REPAYMENT CREDIT" shall mean the amount of credit to bedeemed paid to the CRALA Loan as set forth in Section 3.11.

1.25 "SITE" consists of the real property located at 1507-1509 Winona Avenue, LosAngeles CA 90027 APN No.5544-0l5-037 (the "Site") and more particularly described in theattached Exhibit A, which is incorporated into this Agreement by this reference.

1.26 "TASLA" is Travelers Aid Society of Los Angeles, Inc., a California NonprofitCorporation. The term TASLA shall also include the TASLA's authorized representatives,assigns, transferees, or successors-in-interest thereto.

1.27 "T ASLA'S EQUITY" shall mean the portion of the Acquisition and/orDevelopment Costs paid by the T ASLA with funds other than those secured by a securityinstrument, which portion is equal to twenty-five thousand Dollars ($25,000).

1.28 "UNIFORM HAZARDOUS WASTE MANIFEST" shall refer to the State ofCalifornia Environmental Protection CRALA approved form documenting the transportationand proper disposal of hazardous wastes to a state classified hazardous waste disposal site.

ARTICLE 2. EXHIBITS

The following documents are attached to this Agreement and are incorporated in theAgreement by this reference as though fully set out in thc body of the Agreement:

A. Purchase and Sale Agreement

B. Legal Description and Site Map

C. Form of Agreement Containing Covenants

D. Form of Deed of TrustE. Anual Compliance Certificate

F. Eligible Costs (Budget)

G. TASLA Evidence of Project FundingH. CRALA's Policy on Living Wage, Contractor Responsibility

Ordinance, Service Worker Retcntion and Equal BenefitsOrdinance

ARTICLE 3. TERMS OF LOAN

3.1 LOAN Thc CRALA agrces to provide a loan of funds to T ASLA under theterms and conditions of the Loan Documents. As set forth in Section 3.4 below, the proceeds ofthis Loan shall only be used by T ASLA to pay for Eligible Costs.

3.2 AMOUNT OF LOAN. On and subject to thc terms and conditions of the LoanDocuments, the CRA/LA agrees to make and T ASLA agrees to accept a loan in an amount not toexceed EIGHT HURED SIXTY FOUR THOUSAND DOLLARS ($864,000), evidenced by

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the Note in this amount and secured by the Deed of Trust recorded against the Site. The Noteshall bear simple interest at the rate of three percent (3%) per annum on the principal amountoutstanding from the date of disbursement until paid, or deemed paid by the CRALA.

3.3 TERM OF LOAN. The Loan shall be paid to the CRALA in annual installmentsin the form of Service Repaymcnt, beginning upon the issuance of a Certificate of Completionfor the Development, as set forth herein. Unless sooner due pursuant to the Loan Documents orthe Note, the principal of the Loan and all accrued interest thereon shall be due and payable onthe earliest of (a) ten years (10) from the date of the Note, (b) the date the Site is sold orrefinanced without prior written consent from the CRALA, or (c) an Event of Default byT ASLA, as defined in Section i i. i of this Agreement, which has not been cured as provided forin this Agrecmcnt (the "Term")

3.4 USE OF FUNDS. Loan proceeds may be used only for the Eligible Costs and inthe amount specified as Eligible Costs authorized by this Agrecment or that are approved inwriting by the CRALA. Notwithstanding the foregoing, the parties acknowlcdge that theprimary purpose of the Loan is to partially fund acquisition costs of the Site and may includesome necessar repairs such as to the HV AC unit. The parties further acknowledge that the Loanis madc from CRALA funds and that the use of the Loan proceeds is governed by and the Loanproceeds may only be used in accordancc with the Community Redevelopment Law.

3.5 PREPAYMENT OF LOAN. No prepayment penalty will be charged to TASLAfor payment of all or any portion of the Loan amount prior to the end of the Loan term describedherein. However, prepayment of the Loan shall not affect TASLA's obligations under theAgreemcnt Containing Covenants, all of which shall remain in full force and effect for the entireterm of that Agreement Containing Covenants.

3.6 COLLATERAL. As collateral for the Loan, TASLA shall provide CRA/LAexecuted Deed of Trust in the form attached as Exhibit D giving CRALA various securityinterests in the Site and an Agreement Containing Covenants. T ASLA shall deliver concurrentlywith the execution of thc Deed of Trust, the original executed Agrccment Containing Covcnantsand the Note in the forms attached as Exhibits C and D, which CRALA shall hold until theNote is paid in fulL. Said Deed of Trust and Agreement Containing Covenants shall be

subordinate to the East West Loan.

3.7 TITLE AND TITLE INSURANCE. TASLA warrants that it has obtained andmaintained good and marketable title to the Site. As a condition for closing the Loan, T ASLAshall obtain a CLTA lender's policy of title insurance naming CRALA as the insured withliability not less than the principal amount of the Loan, issued by an insurer satisfactory toCRA/LA, excepting only such defects, liens, encumbrances, and exceptions as are approved byCRALA, and containing such endorsements as CRALA may reasonably rcquire.

3.8 RECORDING. Upon closing datc, the title company shall record the AgreementContaining Covenants and the Deed of Trust with the Recorder for the County of Los Angeles,and shall deliver conformed copies of the recorded documents to the CRA/LA and TASLA.

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3.9 REPAYMENT OF CRA/LA LOAN. The Loan is a "Service RepaymentLoan". On or before April 1st of every calendar year starting the calendar year after the yearduring which the Certificate of Completion is issued and continuing through the Term or untilthe Loan is paid in full, whichever comes first (each a "Payment Date"), TASLA shall submit tothe CRNLA its Annual Compliance Certificate (Exhibit E) for the preceding year (prepared atthe Borrower's expense.) The CRNLA shall review and approve such statement, or requestrevisions, within 30 days after receipt. A Service Repayment Credit in an amount of up toEIGHTY SIX THOUSAND FOUR HUNDRED DOLLARS ($86,400) (l/IOTI of the loanbalance per year), plus yearly-accrued interest, shall be deemed paid on the CRNLA Loan uponcertification offull compliance with the Service Repayment obligation.

In the event that the CRA/LA determines as the result of its review that there was non-compliant use and/or non-compliance with Agency Policies, the CRA/LA may at its optionaccept other uses and a lessor but equivalent compliance, extend the payment term, grant crediton a prorated basis or dcmand cash payment. In lieu services shall only be accepted upon a clearshowing that the value to the Community or to the Project of the in lieu services was equal to orgreater than the deficient site use and compliancc with CRNLA's Policies. Thc CRNLAreserves the right to grant or deny any application for in lieu credit at its sole and absolutediscretion.

If Service Repayment Credits are not suffcient to pay in full thc Loan principal and allaccrued interest thereon by the end of the Term, or any extensions thereof, then the entire unpaidbalance of the Loan (principal and interest) shall be due and payable at that time in one lump sumpayment.

ARTICLE 4. LOAN DISBURSEMENT

4.1 DISBURSEMENT OF LOAN PROCEEDS. The Loan proceeds shall bedisburscd as follows upon satisfaction or waiver of each and all of thc conditions prcccdent todisbursement set forth in Section 4.3 below.

A. Acquisition. Up to EIGHT HUNDRED SIXTY FOUR THOUSAND DOLLARS($864,000.00) shall be disbursed to the TASLA to fund acquisition of theirreplacement social services facility.

CRNLA must approve all other requests for payment prior to disbursement ofLoan proceeds for payment of any other Eligible Costs. Funds used foracquisition will bc approved by execution of this Agreement and are subjcct toCRA/LA recordation of loan documents, and loan and disbursement preparationin concurrence with the acquisition closing, if applicable.

Requests for disbursements regarding site construction, capital maintenance,improvements, rchabilitation and related work will be approved only on the basis

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of site inspections by the CRNLA's designees confirming that the expenses are inconformity with the attached Budget (Exhibit F) and this Agreement.

Acquisition funds require wiring and other instructions, subject to all conditions andrequirements in the Agreement, including but not limited to the successful acquisition of the Siteand recordation of all financing instruments.

4.2 AMOUNT OF DISBURSEMENT. Loan proceeds shall be disbursed up to theamount of the Loan only for items that are shown as Eligible Costs. Disbursemcnt of Loanproceeds shall be made pursuant to Section 4.1 of this Agreement. Any change in individualitems listed as Eligible Costs shall requirc the prior written request of T ASLA and thc writtenconsent of the CRA/LA. However, the CRNLA's obligations shall in no event excecd the Loanamount specified in this Agrcement. Any costs above this amount necessary for thc completionof the Development shall be the sole rcsponsibility ofTASLA.

4.3 CONDITIONS PRECEDENT TO DISBURSEMENT. The CRNLA shall notbe obligated to make any disbursements of Loan proceeds or take any other action under theLoan Documents unless and until each of the following conditions precedent has been satisfied:

1. There exists no Event of Default, both under thc Acquisition and Devclopment

Loan and as defincd in Section 11.1 of this Agreement, nor any act, failure,omission or condition that would constitute an Event of Default.

2. TASLA has executed and delivered to the CRNLA all documents, instruments,and policies required under the Loan Documents in a form acceptable to theCRNLA, including but not limited to the Note and Deed of Trust.

3. T ASLA has delivered to the CRNLA all documents relating to T ASLA'scorporate authorization of the Loan, including: copies of all resolutions or othernecessary actions takcn by T ASLA to authorize the cxccution of this Agreemcntand the Loan Documents; a certificate of status of T ASLA issued by theCalifornia Secretary of State.

4. The Deed of Trust has been recorded against the Site in the Los Angeles CountyRecûrder's Office.

5. T ASLA has delivered or shall be prepared to deliver to CRNLA a CLT A lender'spolicy of title insurance as required above.

6. TASLA has provided and delivered to the CRNLA a certificate of insurance orcopy of the insurancc policy, which policy shall be satisfactory to the CRA/LA, asrequired by Section 9.2 below.

7. T ASLA will deliver to the CRNLA an environmental assessment prepared by aqualified engineer acceptable to the CRNLA relating to the presence of

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Hazardous Materials in, on or around the Site, and confirming that all HazardousMaterials described in such assessment wil be removed or mitigated inaccordance with law, and that the condition of the Site will not result in liabilityfor cleanup of the Site by TASLA or the CRNLA under applicable law.

8. Subject to execution of Agreement, TASLA shall submit a copy of the closure

report prepared by a qualified hazardous material consultant who is independentof the abatement contractor for the remediation of the asbestos-containing

building materials. The closure report shall be submitted to the CRNLA forreview and approval within fourteen (14) calendar days from the completion ofthe remediation work. Executed copies of all Uniform Hazardous Waste

Manifests documenting thc removal and disposal of hazardous waste from the Siteshall be furnished along with the appropriate certificates.

The closure report shall contain but not be limited to a description of the

remediation work performed, approval or acceptance of the remediation by thcregulatory agencies, copies of all notifications, permits, manifests, abatement

contractor's license and certificate, and any other documents evidencing that thematerials wcre properly removed, transported, and disposed of according toapplicable Federal, State, and Local laws and regulations.

9. TASLA has complied with all reporting requirements set forth in this Agreement.

10. T ASLA has submitted to CRNLA evidence of funding commitment for thedcvelopment of projcct (Exhibit G), in an amount suffcient, when combincd with theLoan, to continue providing social services.

ARTICLE 5. RECORDS, AUDITS, TAXS AND MISCELANEOUS

5.1 RECORDS. TASLA shall be accountable to the CRA/LA for all funds disbursedto TASLA pursuant to the Loan Documents. TASLA agrees to maintain records that accuratclyand fully show the date, amount, purpose, and payee of all expenditures drawn from Loan funds,and to keep all invoices, receipts, and other documents related to expenditures from said Loanfunds for not less than four (4) years after completion of the Development as evidenced by therecording of a Ccrtificate of Completion. Records must be kept accurate and current. TheCRNLA shall notify TASLA of any records it deems insuffcient. TASLA shall have 15CRNLA in said notice, or, if more than i 5 days shall be reasonably necessary to correct thedeficiency, T ASLA shall begin to correct the deficiency within i 5 days and correct the deficiencyas soon as reasonably possible.

T ASLA shall promptly comply with all rcquiremcnts or conditions of the LoanDocuments relating to notices, extensions, and other events required to be reported or requested.TASLA shall promptly supply, upon the request of the CRNLA, any and all information anddocumentation which involves the Development and cooperate with the CRNLA in thedevelopment of the Development.

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5.2 INSPECTIONS. TASLA shall permit and facilitate, and require its contractorsto permit and facilitate, observation and inspection at the job site by the CRNLA and by publicauthorities during reasonable business hours upon prior written notice for the purposes ofdetermining compliance with this Agreement.

5.3 AUDITS. TASLA shall make available for cxamination at reasonableintervals and during normal business hours to the CRNLA upon prior written notice all books,accounts, reports, files, and other papers or property with respect to all matters covered by theseLoan Documents and related to all Eligible Costs, and shall permit the CRNLA to audit,cxamine, and make excerpts or transcripts from such records. The CRNLA may make audits ofany conditions relating to this Loan including any other aspect of T ASLA's conduct inconnection with the Development, including, but not limit cd to, the quality and suitability of anyPlans and Specifications, the supervision of construction work, and the qualifications, financialcondition, and performance of all architects, engineers, contractors, subcontractors, suppliers,consultants, and property managers. Any review or inspection undertaken by CRNLA withreference to the Development is solely for the purpose of determining whether T ASLA isproperly discharging its obligations to the CRNLA, and should not bc relied upon by TASLA orby any third parties as a warranty or rcprcsentation by the CRNLA as to thc quality of the designor construction of the Development.

5.4 MECHANICS LIENS AND STOP NOTICES. If any claim of lien is filedagainst the Site or a stop notice affecting the Loan is served on the CRNLA or any other lenderor other third party in connection with the Development, T ASLA shall, within 20 days of suchfiling or service, either pay and fully discharge the lien or stop notice, effect the release ofamount, or provide the CRNLA with other assurance satisfactory to the CRAA that the claimof lien or stop notice will be paid or discharged.

If T ASLA fails to discharge any licn, encumbrance, charge, or claim referred to herein,then in addition to any other right or remedy, the CRNLA may, but shall be under no obligationto, discharge such lien, encumbrance, charge, or claim at T ASLA's expensc. Alternatively, thesuch lien or stop notice by delivering to the CRNLA a surety bond in sufficient form andCRNLA may require T ASLA to immediatcly deposit with the CRNLA the amount ncccssary tosatisfy such lien or claim and any costs, pending resolution thereof. The CRNLA may use suchdcposit to satisfy any claim or lien that is adversely determined against TASLA.

T ASLA shall file a valid notice of cessation or Notice Of Completion upon cessation ofconstruction on the Development for a continuous period of 30 days or more, and take all otherreasonable steps to Íorestall the assertion ûf claÌ1ns of lien against the Site. T ASLA âuthûrIzcsthe CRNLA, but without any obligation, to record any notices of completion or cessation oflabor, or any other notice that the CRNLA deems necessary or desirable to protect its intercst inthe Devclopment and Site.

5.5 BARRERS TO THE DISABLED. The Dcvelopment shall be developed andthe Site shall be maintained, for the duration of the Agreement Containing Covenants, to comply

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with all applicable federal, state, and local requirements for access for disabled persons, as mayexist as of the Completion Date.

5.6 LEAD-BASED PAINT. TASLA and its contractors and subcontractors shall notuse lead-based paint in the construction or maintenance of the Site. T ASLA shall incorporate orcause to be incorporated this provision in all contracts and subcontracts for work performed onthe Development which involve the application of paint.

5.7 FEES, TAXES, AND OTHER LEVIES. T ASLA shall pay before they becomedelinquent all taxes, assessments, fees, Icvics or charges levied against or on account of the Siteor Development and shall pay as due all elaims for work done on or for services rendered ormaterial furnished to the Site. In the event that T ASLA wishes to contest the Icgality of any suchcharge, T ASLA shall pay undcr protest thc charge prior to delinquency in order to prevcnt anyinvoluntar lien on the Site.

5.8 DAMAGE TO THE DEVELOPMENT. If any improvements erected byTASLA on the Site is damaged or destroyed by an insurable cause, TASLA shall, at its cost andexpensc, diligently undertake to repair or restore said improvements consistent with the originalPlans and Specifications for the Developmcnt. Such work or repair shall bc commenced within120 days after the damage or loss occurs and shall be complete within one ycar thereafter. Allinsurance proceeds collected for such damage or dcstruction shall be applied to the cost of suchrepairs or restoration and, if such insurance proceeds shall be insuffcient for such purpose,TASLA shall make up the deficiency. TASLA shall not, by agreement or otherwise, permit anyother pary or lender to use insurance proceeds in a manner inconsistcnt with the terms of thisAgreement.

ARTICLE 6. LABOR AND EMPLOYMENT REOUIREMENTS

The parties acknowledge that the Provisions contained in Ariele 6 pertaining toconstruction labor requirements, specifically Sections 6.2, 6.3 and 6.4, are not applicable at thistime bccause the funds provided pursuant to this agreement are not to be used for constructionbut are to be used for acquisition of a developed Site. Notwithstanding, in the evcnt that the Siteis redcveloped by T ASLA during thc term of this Agreement, T ASLA shall comply with theAgency's construction labor requirements as follows:

6.1 EQUAL EMPLOYMENT OPPORTUNITY. TASLA, for itself and itssuccessors and assigns agrees that in the construction or maintenance or operation of the

Development:

(a) TASLA will not discriminate against any employee or applicant foremployment because of race, color, religion, national origin, scx, age, disability (actual orperceived), source of income, familial status, marital status, sexual orientation, creed, anccstry,medical condition, Acquired Immune Deficiency Syndromc (AIDS), acquired or perceived, orretaliation for having filed a discrimination complaint. T ASLA will take affrmative action toensure that applicants are employed, and that employees are treated during employment without

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regard to their race, color, religion, national origin, sex, age, disability (actual or perceived),

source of income, familial status, marital status, sexual orientation/preference, creed, ancestry,medical condition, Acquired Immune Deficiency Syndrome (AIDS), acquired or perceived, orretaliation for having filed a discrimination complaint. Such action shall include, but not belimited to, the following: employment, upgrading, demotion, or transfer; recruitment orrecruitment advertising, layoff or termination; rates of payor other forms of compensation; andselection for training, including apprenticeship. T ASLA agrees to post in conspicuous places,availablc to employees and applicants for employment, notices to be provided by the CRALAsetting forth the provisions of this nondiscrimination clause.

(b) TASLA will, in all solicitations or advertisements for employces placed byor on behalf of the T ASLA, state that all qualified applicants will receive consideration foremployment without regard to race, color, religion, national origin, sex, agc, disability (actual orperceivcd), source of income familial status, marital status, sexual orientation, creed, ancestry,medical condition, Acquired Immune Deficiency Syndrome (AmS), acquired or perccived, orretaliation for having filed a discrimination complaint.

(c) T ASLA will cause the foregoing provisions to be inserted in all contractsfor any work covered by this Agrcement so that such provisions will be binding upon eachcontractor and subcontractor, provided that the foregoing provisions shall not apply to contractsor subcontracts or deliverycn for standard commercial supplies or raw matcrials.

6.2 AFFIRMATIVE OUTREACH IN EMPLOYMENT AND CONTRACTINGPROCEDURES, INCLUDING UTILIZATION OF MINORITY, WOMEN AND OTHERBUSINESSES.

(a) T ASLA and the CRA/LA acknowledge and agree that it is the policy ofthe CRALA to promote and ensure economic advancement of minorities and women as well asother economically disadvantaged persons through employment and in the award of contracts andsubcontracts for construction in redevelopment project areas. TASLA shall use commerciallyreasonable efforts to cmploy or select employees, contractors and subcontractors posscssing thenecessary skill, cxpertise, cost level, licenses and/or certifications and cfficiency for thcdevelopment of the Improvemcnts.

(b) Utilization of Minority-Owned, and Women-Owned and Other Businesses

(M/W/OBE): The T ASLA shall use its best efforts to the greatest extent feasible to seek out andaward and require the award of contracts and subcontracts for dcvelopment of the Site tocontracting firms which are located or owned in substantial part by persons rcsiding in thePïûject Area, and to promote outreach to minority-o\vned, v..romen-owncd and other businesses.

This requirement applies to both the construction and operations phases of the Projcct. This

paragraph shall rcquire the commercially reasonablc efforts of the T ASLA and its contractors butshall not require the hiring of any person unless such person has the experience and ability, and,wherc necessary, the appropriatc trade union affliation, to qualify such person for the job.

(c) Community Outreach Plan.

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(I) Submission of Plan: By the datc set forth in a Schedule ofPerformancc to be determined at the time of such redevelopment, the T ASLA shall meet with theCRNLA's Office of Contract Compliance to hold a preconstruction meeting. During thepreconstruction mccting, the TASLA shall be provided with the policies and procedures of theCRAA regarding the outreach efforts, including the development of a Community OutreachPlan. The TASLA shall be provided samples of Community Outreach Plans, which have beenapproved by the CRNLA. Prior to commencing construction, the T ASLA shall submit to theCRNLA Chief Executive Officer or his/her designee, for approval, the Community OutreachPlan for the Project. Thc Community Outreach Plan shall set forth thc mcthods the T ASLA willuse to comply with this Section 7.2. Upon reccipt of the Community Outreach Plan, theCRNLA shall, within thirty (30) days, approve or disapprove the Community Outrcach Plan, orprovide to the T ASLA a statement of actions rcquircd to be taken in ordcr for the CommunityOutrcach Plan to be approved. If thc CRNLA fails to respond within such thirty (30) day period,the Community Outreach Plan shall be deemed disapproved by the CRNLA. The T ASLA shallnot commence construction unless the Community Outreach Plan has been approved by theCRNLA.

(2) Contcnts of the Community Outreach Plan: Thc CommunityOutreach Plan shall include, at a minimum:

1. Estimated total dollar amount (by trade) of all contracts andsubcontracts to be let by the TASLA or its prime contractor for the Commcrcial Improvements;

2. List of all proposed contractors that will be awarded a

contract by the T ASLA or the prime contractor(s);

3. Estimated dollar value of all proposed contracts;

4. Evidence ofM/WBE Certification of all firms listcd asMBE or WBE in the Plan (Firms purporting to be M/WBE do not requirc M/WBE Ccrtificationif their contract amount is less than Twenty Five Thousand Dollars ($25,000). Any firm forwhich the contract amount excccds Twenty Five Thousand Dollars ($25,000) and which is notcertified by the City of Los Angeles may not be considered an MBE or WBE for purposes of thisAgrecment);

5. Description of the actions to bc taken to meet the project

area resident and business utilization objectives.

6. Such other information and documcntation with respect to

thc foregoing objectives as the CRNLA may reasonably deem neccssary.

(d) General Information.

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(1) During the construction of the Improvements, the TASLA shallprovide to the CRALA such information and documentation as reasonably requested by theCRALA.

(2) The T ASLA shall monitor and enforce the affrmative outreach andequal opportunity requirements imposed by this Agreement. In the event the TASLA fails tomonitor or enforce these requirements the CRALA may declare the T ASLA in default of thisAgreement (subj ect to the notice and cure rights provided in this Agreement) and thereafterpursue any of the remedies available under this Agreement.

(3) The TASLA shall cause its prime contractor and subcontractors toconduct outreach to minority, women, and other business enterprises.

6.3 UTILIZATION OF PROJECT AREA LOWER INCOME RESIDENTSAND PROJECT AREA BUSINESSES.

The Developer, Contractor or bidder certifies and agrees that it shall implement aConstruction Local Hiring Program for the duration of construction on the project that shallinclude the following requirements:

A. Local Hiring Program

1. Community Area Resident Hiring Goal: Each quarter, 30% of allconstruction work hours shall be performed by Community Area Residents. ACommunity Area Resident means an individual who is a resident of the Cityof Los Angetes and whose primary place of residence is within three miles ofthe Projcct Area's border. The list of zip codes in which a Community AreaResident may live will be produced by the Community Redevelopment

CRAILA of the City of Los Angeles (CRALA).

2. Local Resident Hiring Goal: To the extcnt that the preceding 30% localhiring requirement is not feasible, despite the Developer or Contractor's

reasonable best efforts, thc Developer may fulfill the Community Area Hiringrequirement by filling the remaining hours with Local Residents. A LocalRcsident means an individual whose primary place of residence is within theCity and is vv'ithin the zip code containing at least part of one census tract \-'litha rate of unemployment in excess of 150% of the Los Angeles County

unemployment rate, as reported by the State of California EmploymentDevelopment Deparment. The list of zip codes in which a Local Residentmay live will be produced by the CRALA.

3. Local Low-Income Resident Hiring Goal: Each quarter, 10% of allconstruction work hours shall be performed by Local Low-Income Residentswith less than 4,000 hours of formal, indentured experience in the constructiontrades. The Local Low-Income Resident hours may count towards the 30%

Community Area and Local Hiring goals. Local Low-Income Resident means

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an individual whose primary place of residence is within the City of LosAngeles and who, at the time of commencing work on a project under a LocalHiring Program either (a) has a household income of less than 50% of theArea Median Income (AMI) or (b) faces at least one of the following barriersto employment: bcing homeless; being a custodial single parent; having aphysical or mental disability; receiving public assistance; lacking a GED orhigh school diploma; having a criminal record or other involvement with thecriminal justice system; or suffering from chronic unemployment. The statusof a Local Low-Income Resident will be certified by the Jobs Coordinator, anindependent third-party individual or entity with which the Developer orContractor works to facilitate implementation of the Local Hiringrequirements.

4. Limitations:

a. The employer retains authority in making individual hiring decisions.

b. Hours worked by permanent residents of states other than California donot count towards total work hours when calculating the hiringrequirements.

B. Requirements:

1. Maximizing Apprentices. Construction Employers will use the maximum

number of apprentices allowed by law.

2. Coordination with Unions, if applicable. Construction Employers will

inform any union with whom the Construction Employer has an agreementthat:

a. Each Construction Employer is required to give priority to Local Low-Income Residents and will promptly notify the CRA/LA's Manager ofPolicy Analysis, of any union that fails or refuses to refer Local Low-Income Residents for jobs on projects receiving CRNLA financialassistance.

b. Each Construction Employer will cover at least 50% of the union initiationfees for any Local Low-Income Individual hired as an apprentice by thatConstruction Employer. Fees may be paid over the initial two paychecksto ensure retention of a sponsored employee.

c. Each Construction Employer will sponsor any qualified entry-level LocalLow-Income Resident as a first period apprcnticc and will indicate this bysending a letter or form, as appropriate, to thc relevant union or

apprenticcship program expressing a commitmcnt to sponsor the LocalLow-Income Resident in question (e.g. hiring thc individual to enablehis/her entry into an Apprenticeship Program).

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3. Local Hiring Plan: The Developer or Contractor shall develop a Local Hiring

Plan that establishes the hiring process and approximate timetable to befollowed by the Developer/Contractor and Subcontractors for constructionhiring to achieve the overall requirements of the Local Hiring Program. TheLocal Hiring Plan must be approved by the CRNLA or Chief ExecutiveOffcer (CEO) before construction begins and will be approved within twoweeks of submittal by Developer or Contractor.

4. Pre-Construction Orientation: Prior to the commencement of construction,

and as soon as practicable in accordance with the Schedule of Performance,the Developer or Contractor shall contact the CRNLA to schedule a pre-construction orientation meeting with the general contractor and/or

subcontractors to explain the Local Hiring Program, record keeping andreporting requirements necessary for the evaluation of the Developer or

Contractor's compliance with the requirements as set forth in Section 6 of thisAttachment.

5. Periodic Local Hiring Report: Each month or quarter, depending on theLocal Hiring Plan, a report shall bc submitted to the designated staff person atthe CRA/LA detailing the number of (i) Community Area Residents, (ii) LocalResidents, (iii) Local Low-Income Residents, and (iv) all other City residentsor non-residcnts that have been hired by Contractor and/or each Subcontractor,the number and percentage of work hours that have been performed by eachcategory of worker for that specific reporting period and since the inception ofthe project, and the total aggregate number and pcrccntage of work hoursperformed by each category of worker. If rcquested by the CRNLA, theDeveloper shall require any contractor or subcontractor to provide copies ofcertified payroll records to verify the Local Hiring Report. All Local HiringReports should be sent to: Alexandra Paxton, Manager of Policy Analysis,CRNLA, 354 S. Spring Street, Suite 700, Los Angeles, CA 90013.

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6. Demonstration of Compliance:

a. If the Developer or Contractor has met or exceeded all Local Hiring Programtargets, the Developer or Contractor is in compliance.

b. If thc Developer or Contractor has not met or cxcccdcd all Local Hiring Programtargets but has satisfied each element of the list of activities below, the Developeror Contractor is in compliance:

i Develop and submit CRNLA-approved Local Hiring Plan before

construction begins;

ii Convene pre-bid and pre-construction meetings to educate the

construction manager and subcontractors;iii Obtain Letters of Assent to the Local Hiring Program terms from

each construction cmployer;iv Work with a Jobs Coordinator from the CRA/LA's pre-qualified

list of firms or comparable source.v Maintain detailed listings of all local recruitment sourcescontacted;vi Use and maintain documentation of use ofCRNLA-approved craftrequest forms;vii Maintain documentation of appropriate waiting period for

requested referrals and any lack of responses;viii Maintain documentation ofrcasons for not hiring referrcd

candidates from target populations, if any; andix Allow the CRNLA monitor prompt and willing access todocumentation of above activities.

7. Penalties:

a. The Developcr and Contractor shall ensure that all contractors andsubcontractors contractually agree to comply with terms of Local HireProgram.

b. The Developer or Contractor shall monitor and enforce the Local

Hiring Program requirements imposed on its contractors andsubcontractors, including withholding payments to those contractors orsubcontractors who violate these requirements.

c. In the event that the Developer or Contractor is out of compliance and

fails to monitor or enforce these requiremcnts against any contractor orsubcontractor, the Developer or Contractor shall be liablc for the fullamount of any liquidated damages, assessed at the average projcctwage for each hour that the project was short of the goal.

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d. The CRALA may withhold monies owed to the Developer orContractor, may impose penalties on the Developer or Contractor inthe amounts specified herein, and/or may declare the Devcloper orContractor non-responsible and be debarred from further contracts fora period of two years in conformance with the CRALA's Policy onContractor Responsibility.

The Developer or Contractor may appeal any penalties to a panel appointed by theCRALA Board.

6.4 PREVAILING WAGES.

(a) The T ASLA shall payor cause to be paid to all workers employed in connectionwith the prcdevelopment of the Site and Improvements, not Icss than the prevailing rates ofwages, as provided in the statutes applicable to CRALA public work contracts, includingwithout limitation Sections 33423-33426 of the California Health and Safety Code and Sections1770-1780 of the Cali fornia Labor Code, in accordance with the CRALA's "Policy on Paymentof Prevailing Wages By Private Redevelopers or TASLA-Participants" dated February 1986,attached hereto as Exhibit H and incorporated hercin by this reference. In addition to anyrestitution required by the CRALA's Policy and/or applicable law, any T ASLA or T ASLAdetermined by the CRALA to havc violated any provision of the CRA/LA's Policy, shallforthwith pay the following as a penalty to the CRALA or the State of California, if directed:

(1) Payment of less than prcvailing wages: Fifty Dollars ($50)per calendar day, or portion thereof, for each workcr paid less thanprevailing wagcs;

(2) Failure to provide all reasonably requested records and/orprovide access to job site or workers: Five Thousand Dollars($5,000) per day, or portion thereof.

(b) If the construction work covered undcr this Agreemcnt is financed in whole or in

part with assistance provided under a program of the U.S. Department of Housing and UrbanDevelopment or some other source of federal funding, the TASLA shall comply with or cause itsgeneral contractor and all subcontractors to comply with the requirements of the Davis-BaconAct (40 U.S.c. 276 et. seq.). The Davis-Bacon Act requires the payment of

wages to all laborcrs

and mechanics at a rate not less than the rninirriUlTI wage specified by the Secrctarj of Labor inperiodic wage rate determinations as described in thc Federal Labor Standards Provisions (HUD-4010). In the event both State Prevailing wages and Davis-Bacon Act wages will be rcquired, allworks shall be paid at the higher of the two wage rates.

(c) Prior to the commencement of construction, and as soon as practicable in

accordance with the Schedule of Performance, the T ASLA shall contact the CRALA to schedulea preconstruction orientation meeting with the T ASLA and with thc general contractor to explainsuch matters as the specific rates of wages to be paid to workers in conncction with thedevelopment of thc Improvements, preconstruction conference requirements, record keeping and

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reporting requirements necessary for the evaluation of the TASLA's compliance with this Section6.4.

(d) TASLA shall monitor and enforce the prevailing wage requirements imposed onits contractors and subcontractors, including withholding payments to those contractors orsubcontractors who violate these requirements. In the event that T ASLA fails to monitor orenforce thesc requircments against any contractor or subcontractor, T ASLA shall be liable for thcfull amount of any underpayment of wages, plus costs and attorneys' fees, as if T ASLA was thcactual employer, and the CRALA or the State Department of Industrial Relations may withholdmonies owed to the T ASLA, may impose penalties on T ASLA in the amounts specified herein,may take action directly against the contractor or subcontractor as permitted by law, and/or maydeclare the T ASLA in default of this Agreement (subject to the notice and cure rights provided inthis Agrccment) and thereafter pursue any of the remedies available under this Agreement.

(c) Any contractor or subcontractor who is at the time of bidding debarred by theLabor Commissioner pursuant to Section i 777.1 of the California Labor Code is ineligible to bidon the construction of the Improvements or to receive any contract or subcontract for workcovercd under this Agreement. The T ASLA agrees to include, or cause to be included, thisSection 6.4 in all bid specifications for work covered under this Agreement.

Any contractor or subcontractor who, at the time of the date of this Agreement, is listed inthe Lists of Parties Excluded From Federal Procurcmcnt or Nonprocurement Prob'Tams issued bythc U.S. General Services Administration pursuant to Section 3(a) of the Davis-Bacon Act isineligible to receive a contract for work covered under this Agreement, if the covered work isFederally funded in whole or in part.

Any contractor or subcontractor that is at thc time of bidding debarred or declared non-responsible under thc CRALA's Contractor Responsibility Policy or the City's ContractorResponsibility Ordinance is ineligible to bid on the construction of the Improvements or toreceive any contract or subcontract for work covered under this Agrccmcnt. Participant agrees toinclude, or cause to bc included, this Section 7.4 in all bid specifications for work covered underthis Agreement.

(I) T ASLA agrees to include, or cause to be included, the above provisions in all bidspecifications for work covered undcr this Agreement.

(g) TASLA shall indemnify, hotd harmless and defend (with counsel reasonablyacccptablc to thc CRA/LA) the CRALA and the City against any claim for damages,compensation, fines, penahies or other amounts arising out of the failure or alleged failure ûfanypcrson or entity (including T ASLA, its contractor and subcontractors) to pay prevailing wages asdetermined pursuant to Labor Codc Scctions 1720 ct seq. and implementing regulation or complywith the other applicable provisions of Labor Code Sections i 720 et seq. and implementingregulations of the Department of Industrial Relations in connection with construction of theimprovements or any other work undertaken or in connection with thc Site.

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(h) Prevailing Wages are not required to be paid on the constrction of the siteimprovements, including the two restaurant pads, parking, landscaping and related work, andexcludes all restaurant work.

6.5 CRALA'S LIVING WAGE, CONTRACTOR RESPONSIBILITY,SERVICE WORKER RETENTION, AND EQUAL BENEFITS POLICIES

All TASLAs and thcir subcontractors doing business with the CRNLA shall be rcquiredto comply with the CRALA's Living Wage, Contractor Responsibility, Service WorkerRetention, and Equal Benefits Policies, herein referred to as Exhibit H. The foregoing policiescan be viewed and downloaded at ww.crala.net. All references to "Contractor" in this sectionshall apply to T ASLA and its contractors and subcontractors. In addition, all references to "thisContract" shall mean "this Agrccment".

(A) Living Wage and Service Worker Rctention Policics

(1) Unless otherwisc exempt in accordance with the provisions of thcsePolicies, this Agreement is subject to the applicable provisions of the CRALA's Living WagcPolicy (LWP) and the CRALA's Service Contractor Worker Retention Policy (SCWRP), asamended from time to time.

(a) Payment of a minimum initial wage rate to employees as defined inthe L WP and as may be adjustcd each July i and provision of benefits as defined in the LWP.

(b) TASLA further pledges that it will compty with federal lawproscribing retaliation for union organizing and will not retaliate for activities related to theLWP. Contractor shall require each of its Subcontractors within the mcaning of the LWP topledgc to comply with the terms of federal law proscribing retaliation for union organizing.Contractor shall deliver the executcd pledges from each such subcontractor to thc CRALAwithin ninety (90) days of the execution of the Subcontract. Contractor's delivery of executcd

pledges from each such Subcontractor shall fully discharge the obligation of the Contractor tocomply with the provision in the L WP conccrning compliance with such fedcrallaw.

(c) The Contractor, whether an employer, as defined in thc LWP, or

aiiy other person employing individuals, shall not discharge, reduce in compensation, or

otherwise discriminate against any employee for complaining to the CRNLA with regard to thcemployer's compliance or anticipated compliancc with the LWP, for participating in proceedingsrelated to the LWP, for seeking to enforce his or her rights under the LWP by any lawful means,or otherwise asserting rights unàer the L\\/P. Contractor shall post the Notice of Prohibition

Against Rctaliation.

(d) Any Subcontract entered into by the Contractor relating to thisContract, to the extcnt allowed hereunder, shall be subject to the provisions of L WP and thcSCWR, and shall incorporate the "Living Wage Policy and Service Contractor WorkerRetention Policy" language.

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(e) Contractor shall comply with all rules, regulations and policiespromulgated by the designated administrative CRNLA, which may be amended from time totime.

(2) Under the provisions of the L WP and SCWR the CRNLAshall have the authority, under appropriate circumstances, to terminate this Contract and

otherwise pursue legal rcmedies that may be available if the CRNLA determines that the subjectContractor has violated provisions of the LWP and the SCWR.

(3) Where under the LWP the designated administrativeCRA/LA has determined (a) that the Contractor is in violation of the LWP in having failed to paysome or all of the living wage, and (b) that such violation has gone uncurcd, the CRA/LA in suchcircumstances may impound monics otherwise due the Contractor in accordance with thefollowing proccdures. Impoundment shall mean that from monics due the Contractor, theCRNLA may deduct the amount determined to be due and owing hy the Contractor to itsemployees. Such monies shall be placed in the holding account referred to in LWP and disposedof under proccdures therc described through final and binding arbitration. Whether the

Contractor is to continue work following an impoundment shall remain in the unfettereddiscretion of the CRA/LA. The Contractor may not elect to discontinue work either becausethere has been an impoundment or because of the ultimate disposition of the impoundment by thearbitrator.

(4) Earned Income Tax Credit. This Contract is subject to theprovision ofthc LWP requiring employers to inform employees making less than Twelve Dollars($12.00) per hour of their possiblc right to the federal Eared Incomc Tax Crcdit (EITC).Employers must further make available to employees the forms required to sccurc advancc EITCpayments from cmployers.

(B) Equal Benefits Policv

Unless otherwise exempted in accordance with thc provisions of the CRNLA's EqualBcnefits Policy (EBP) this Agrecment is subject to the provisions of the EBP as amended fromtime to time.

(I) During the performance of this Agreement, the Contractor certifies and

represents that it will comply with the EBP. The Contractor agrees to post thc followingstatement in conspicuous places at its place of business available to employees and applicants for

employment:"During the performance of a Contract with the CRNLA,

the Contractor will provide equal benefits to its employees withspouses and its cmployees with domestic partners. Additional

information about the EBP may be obtained from the Offce of thcCity Administrative Officer, Contractor Enforcement Section at(213) 978-7650."

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(2) The failure of the Contractor to comply with the EBP will be deemed to bea material breach of the Agreement.

(3) If the Contractor fails to comply with the EBP the CRALA may cancel,terminate or suspend the Agreement, in whole or in part, and all monies due or to become dueunder the Agreement may be retained by the CRALA. The CRALA may also pursue any andall other remedies at law or in equity for any breach.

(4) Failure to comply with the EBP may be used as evidence against theContractor in actions taken pursuant to the provisions of the CRALA's Contractor

Responsibility Policy.

(5) If thc Designated Administrative CRALA (DAA) determines that theContractor has sct up or used its Contracting entity for the purposc of evading the intent of thcEBP, the CRA/LA may tcrminate the Agreement on behalf of the CRALA. Violation of thisprovision may be used as evidence against the Contractor in actions taken pursuant to theprovisions of CRALA's Contractor Responsibility Policy.

(C) Contractor Responsibilitv Policy

Unless otherwise exempt in accordancc with the provisions ofthc CRA/LA's Policy, thisAgreement is subject to the provisions of the Contractor Responsibility Policy (CRP), whichrequires the Contractor to updatc its responses to the responsibility questionnaire within thirtycalcndar days after any change to the responses previously provided if such changc would affectContractor's fitness and ability to continue performing the Agreement. In accordance with thcprovisions of this Policy, by signing this Agreemcnt, the Contractor pledges, under penalty ofperjury, to comply with all applicable Federal, state and local laws in the performance of thisAgreement, including but not limited to, laws regarding health and safety, labor and employment,wage and hours, and licensing laws which affect employees. The Contractor further agrees to:

(I) Notify the CRALA within thirty calendar days after receiving notificationthat any governent CRALA has initiated an investigation which may result in a finding that theContractor is not in compliance with all applicable Federal, state and local laws in performanceof this Agreement;

(2) Notify the CRAIA within thirty calendar days of all findings by agovernment CRALA or court of competent jurisdiction that the Contractor has violated theprovisions of the CRP;

(3) Ensure that its subcontractor(s), as defined in the Policy, submit a PledgeofComp1iance to awarding authorities; and

(4) Ensure that its subcontractor(s), as defined in the CRP, comply with the

requirements of the Pledge of Compliance and the requirement to notify the CRALA within

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thirty calendar days after any governent eRALA or court of competent jurisdiction hasinitiated an investigation or has found that the subcontractor has violated the eRP in performanceof the subcontract.

The requirements for adherence to the above policies are outlined in Exhibit H attachedhercto.

6.6 GENERAL INFORMATION

1. During the construction of the Site, the T ASLA shall provide to the

eRALA such information and documentation as reasonably requestcd by the eRNLA.Information shall be limited to Eligible Costs, Project Schedule, Lcase Form and deal status.

2. T ASLA shall monitor and cnforce the affirmativc action and equalopportunity requircments imposed by this Agrccment. In the event the T ASLA fails to monitoror enforce these requirements the eRALA may declare the TASLA in default of this Agreementand pursue any of the rcmedies available under this Agreement.

3. As requested, thc eRALA shall provide such technical assistancenecessary to implement this Article 6.

ARTICLE 7. OPERATION OF DEVELOPMENT

7.1 OPERATION OF DEVELOPMENT. TASLA revised its Scope of Servicessince the closing of their drop in center, Teen Canteen. They are going to leverage the amountand quality of services. T ASLA offers transportation assistance plus social casework. Theyhave established formal, strategic collaborations with local agencies where a high volume ofhomeless youth, adults, and families and those at risk for homelessness already attend to receivemultiple services in one location. T ASLA already has placed a dedicated caseworker at PATHRHe to serve homeless adults and families. Similarly, TASLA will place dedicated caseworkersin local venues to provide specialized expertise in the area of helping stranded people to return totheir home communities or to obtain stability in the areas of food, clothing, shelter, as well as toobtain needed medical, mental health, legal, and other supports. TASLA will place dedicatedcaseworkers at PATH RHe (a second caseworker), Social Services at Blessed Sacrament, and atFirst Presbyterian Church of Holìywood. In this way, T ASLA wiìl increasc the services itprovidcs in Hollywood along with the direct social services it provides at 1507-09 Winona Blvd.,Los Angeles 90027. T ASLA has served Hollywood since 1983. It is the only agency inHollywood specializing in helping people to return to their home communities or to find safehousing, medical, mental health, substancc abuse, legal, or other services to improve their lives.T ASLA helped people to return home during the Katrina disaster. T ASLA is the premiereagency helping stranded travelers who have no resources and nowhere else to turn for help.TASLA is a member of a network of 50 agencies nationwide (Travelers Aid International)helping stranded people.

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7.2 LEASING THE DEVELOPMENT. TASLA shall not lease any portion of thedevelopment without the express written permission of the CRALA and shall submit itsproposed form of agreement for any approved lease to the CRALA for its review and approval.

7.3 SITE USE RESTRICTIONS. The approved use of the Site shall be maintainedfor a minimum of thirty (30) years from the date of the issuance of a ccrtificate of occupancy forthe Improvements, or date of execution of this Agreement as more fully set forth in theAgrecment Containing Covenants.

7.4 NONDISCRIMINATION. There shall be no discrimination against orsegregation of any person; or group of persons, on account of race, color, religion, nationalorigin, sex, age, disability (actual or perceived), source of income, familial status, marital status,sexual orientation, creed, ancestiy, medical condition, Acquired Immune Deficiency Syndrome(AIDS) acquired or perccived or retaliation for having filed a discrimination complaint, in thesale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Site, or any part thereof,

nor shall TASLA or any person claiming under or through TASLA establish or permit any suchpractice or practices of discrimination or segregation with reference to the sc1cction, location,number use or occupancy of tenants, lessees, subtenants, sublessees, or vendees of the Site.

7.5 FORM OF NONDISCRIMINATION AND NONSEGREGATIONCLAUSES. T ASLA shall refrain from restricting the use, rental, sale or lease of the Sitc on thebasis ofrace, color, religion, national origin, sex, age, disability (actual or perceived), source ofincome, familial status, martal status, sexual orientation, creed, ancestiy, medical condition,

Acquircd Immune Deficiency Syndrome (AIDS), acquired or perceived, or retaliation for havingfiled a discrimination complaint. All such deeds, leases or contracts shall contain or be subjcct tosubstantially the following nondiscrimination or nonsegregation clauses:

1. In deeds: "The grantee herein covenants by and for himself/herself, his/her heirs,

executors, administrators and assigns, and all persons claiming under or through him/her, thatthere shall be no discrimination against or segregation of, any person or group of persons onaccount of race, color, religion, national origin, sex, age, disability (actual or perceivcd), sourceof income, familial status, marital status, sexual orientation, creed, ancestiy, medical condition,Acquired Immune Deficiency Syndrome (AIS), acquired or perceived, or retaliation for havingfiled a discrimination complaint. The grantee wil take affrmative action to ensure thatapplicants are hired and that employees are treated during employment without regard to theirrace, color, religion, national origin, scx, age, disability (actual or perceived), source of income,familial status, martal status, sexual orientation/preference, creed, ancestiy, medical condition,Acquired Immune Deficiency Syndrome (AIDS), acquired or perceived, or retaliation for havingfiled a discrimination complaint in the sale, iease, subiease, transfer, use, occupancy, tenure orenjoyment of the land hcrein conveyed, nor shall the grantee himself/herself or any personclaiming under or through him/her, establish or permit any such practicc or practices ofdiscrimination or segregation with reference to the selection, location, number, use or occupancyof tenants, lessees, subtenants, sublessees or vcndees in the land herein conveyed. The foregoingcovenants shall run with the land."

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2. In leases: "The lessee herein covenants by and for himself/herself, his/her heirs,

executors, administrators and assigns, and all persons claiming under or through him/er, andthis leasc is madc and accepted upon and subject to the following conditions:

That there shall be no discrimination against or segregation of any person or group ofpersons, on account of race, color, religion, national origin, sex, age, disability (actual orperceivcd), source of income, familial status, marital status, sexual orientation, creed, ancestry,medical condition, Acquired Immune Deficiency Syndrome (AIDS), acquired or perceived orretaliation for having filed a discrimination complaint in the leasing, subleasing, transferring, use,occupancy, tenure or cnjoyment of the land herein leased nor shall the lessee himself/herself, orany person claiming under or through him/her, establish or permit any such practice or practicesof discrimination or segregation with reference to thc selection, location, number, use oroccupancy, of tenants, lessees, sublessees, subtenants, or vendees in thc land herein leased."

3. In contracts: "Therc shall be no discrimination against or segregation of any

person, or group of persons on account ofrace, color, religion, national origin, sex, age, disability(actual or perceived), source of income, familial status, marital status, sexual orientation, creed,ancestry, medical condition, Acquired Imune Deficicncy Syndrome (AIDS), acquired orperceived or retaliation for having fied a discrimination complaint in the sale, lease, sublease,transfer, use, occupancy, tenure or enjoyment of the land, nor shall the transfcree himself/herselfor any person claiming under or through him/her, establish or permit any such practice orpractices of discrimination or segregation with reference to the lessees, subtenants, sub

lessees or

vendces of the land."

TASLA shall not discriminate or segregate in the dcvclopment, construction, use, enjoyment,occupancy, convcyancc, lease, subleasc, or rental of any part of the Site on the basis of race,color, ancestry, national origin, religion, sex, sexual orientation, agc, disability (actual orperceived), source of income, familial status, marital status, sexual orientation, creed, ancestry,medical condition, Acquired Immune Deficiency Syndrome (AIS) or AIDS-related conditions(ARC), or any other arbitrary basis.

7.6 TRANSFER OF THE SITE. The qualifications and idcntity of T ASLA are ofparticular conccm to the CRALA. It is because of TASLA's demonstrated qualifications andidentity that the CRALA has entered into this Agreement with TASLA. Therefore, TASLAcovenants that it has not made or created, and agrees not to make or permit, any sale, assignent,conveyance, lcase, or other transfer of this Agreement, the Development, or the Site, or any partthereof, including the sale of any general or limited parnership interests, without the priorwritten consent of the CRALA. The CRA/LA may give its conscnt to a sale, transfer, orconveyance provided that an of the following conditions are rnet: (a) T ASLA is in compliancewith the Loan Documents, or the sale, transfer, or conveyancc will result in the cure of anyexisting violations of the Loan Documents; (b) the proposed transferee enters into a writtenassignent and assumption agreement, in a form and content reasonably satisfactory toCRALA's legal counsel, assuming all obligations of TASLA imposed by the AgreementContaining Covenants and other Loan Documents, and, if requested by CRALA, provides anopinion of such transferee's counsel to the effect that this Agreemcnt and the Agrcement

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Containing Covenants are valid, binding and enforceable obligations of such transferee, subjectto bankptcy and other standard limitations affecting creditor's rights; (c) the transfercedemonstrates to the CRALA's satisfaction that it is capable of and intends to own and operatethe Site in full compliancc with the Agreement Containing Covenants and the other LoanDocuments; (d) the transferee demonstrates one of the following: (1) the transferee has at leastthree year's experience in the operation and management of similar size Service Centers,without any record of material violations of discrimination restrictions or other state or federallaws or regulations or local governmental requirements applicable to such projects, or (2) thetransferee agrees to retain a property management firm with the experience and record describedin subclause I above, or (3) TASLA or its management company will continue to manage thcDevelopment for at least one year following such transfer and during such period will providetraining to the transfcrce and its manager in thc responsibilities relating to the providing of suchscrvices; ( e) the transferee does not have pending against it, and does not have a history ofsignificant and matcrial violations or complaints conccrning the construction, maintenance,

upkccp, operation and regulatory agrcement compliancc of any of its projects as idcntified by anylocal, state or federal regulatory agencies; and (1) the terms of the sale, transfer, or conveyanccshall not jeopardize the CRALA's security interest in the Site and is in full compliance with allstandards, including cligibility requirements and other conditions imposed by any fundingsources for the Development and the Loan.

ARTICLE 8. INDEMNITY AND INSURACE

8.1 INDEMNITY. Except for the gross, active negligence or willful misconduct ofthe CRA/LA, T ASLA undertakes and agrees to defend, indemnif', and hold harmless theCRALA and City ("lndemnitees") from and against all suits and causes of action, claims, losses,demands and expenses, including, but not limited to, attorneys' fees and costs of litigation,damage or liability of any nature whatsoever, arising in any manner by reason of or incident tothe performance of this Agreement on the part of T ASLA or any contractor or subcontractor ofT ASLA. T ASLA shall pay immediately upon the lndemnitees' demand any amounts owingunder this indcmnity. The duty of T ASLA to indemnify includes the duty to defend thelndemnitees or, at the lndcmnitces' choosing, to pay the lndemnitees' costs of its defense in anycourt action, administrative action, or other proceeding brought by any third party arising fromthe Development or the Site. The Indemnitecs may make all reasonable dccisions with respect toits representation in any legal proceeding, including, but not limited to, the selection of

attomey(s). TASLA's duty to indemnify the Lndemnitees shall survive the term of this Loan andthe reconveyance of the Deed of Trust.

8.2 INSURANCE COVERAGE. TASLA shall furnish or cause to be furnished tothc CRA/LA duplicate originals of the insurance pohcies, complete with additional insured andloss payec endorsements, as applicable pursuant to this Agreement. T ASLA shall, untilT AS LA's obligations under this Agreement are paid and discharged in full, maintain and keep infull force and effect any insurance required by the CRA/LA, issued by companies approved andregulated by the State Department oflnsurance including, with limitation:

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(1) General liability insurance, to protect against claims for damages due to bodily

injury, including death there from, suffered or alleged to be suffered by any person or personswhomsoever on or about the Site and the Improvements, or in connection with the operationthereof, resulting directly or indirectly from any acts or activities of the CRAA or T ASLA orany person acting for the CRALA or T ASLA, or under their respective control or direction, andalso to protect against claims for damages to any property of any person occurrng on or about theSite and the Improvements, or in connection with the operation thereof, caused directly orindirectly by or from acts or activities of the CRALA or T ASLA or its tenants or any personacting for the CRALA or TASLA, or under their respective control or direction. Such propertydamage and bodily injury insurance shall also provide for and protect the CRALA againstincurring any legal cost in defending claims for alleged loss. Such bodily injury and propertydamagc insurancc shall name both The Community Redevelopment CRALA of the City of LosAngeles, California and the City of Los Angeles as additional insureds. Such bodily injury andproperty damage insurancc shall be in minimum limits of One Million Dollars ($1,000,000) pcroccurrence with a $2,000,000 Million Dollar aggregate; provided, however, the limitation on thcamount of insurancc shall not limit the responsibility of the T ASLA to indemnify the CRA/LA orpay damagcs of injury to persons or property resulting from T ASLA's activities or the activitiesof any other person or persons for which T ASLA is otherwise responsible.

(2) Fire insurance in an amount not less than the full insurable valuc of theImprovements with extended coverage including fire, windstorm, flood, vandalism, maliciousmischief, earthquake (if commercially availablc at reasonable rates or as otherwise required),boiler and machinery if applicable, and other such perils customarily covered by an "All Risk"policy. The tcrm "full insurable value" as used above shall mean the actual replacement cost(excluding the cost of excavation, foundation and footings below the lowest floor and withoutdeduction for depreciation) of the Improvements immediately before such casualty or other loss,including thc cost of construction of thc Improvements, architectural and engineering fees, andinspection and supervision. To ascertain the amount of coverage required, T ASLA shall causethe full insurable value to be detcrmined from time to time by appraisal by the insurer, byagrcement between the CRALA and T ASLA or by an appraiser mutually acceptable to thcCRA/LA and TASLA, not less often than once every three years.

(3) Maintain or cause to be maintained workers' compensation insurance in statutory

limits and Employer's Liability in minimum limits of not less than One Million Dollars($1,000,000), issued by a responsible carrier authorized under the laws of the State of Californiato insure employers against liability for compensation under the workers' compensation laws nowin force in California, or any laws hereafter enacted as an amcndment or supplement thereto or inlieu thereof. Such workers' compensation insurance shall cover all persons employed by T ASLAand its contractors and subcontractors in connection with the Site and the 1u.prûvemcnts andshall cover claims for death, bodily injury, illncss, or disease made by, for or on behalf of any.person incurrng or suffering injury, death, illness or disease in connection with the Site or theImprovements or the operation thereof by TASLA.

(4) Professional liability insurance shall be required of architects and engineers hired toperform work on the Development in limits of

not less than One Million Dollars ($1,000,000).

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T ASLA shall ensure that insurance for architects and engineers is received by the CRALA priorto the commencement of any work on the Site.

(5) Automobile insurance coverage in minimum limits of not less than One Million

Dollars ($1,000,000) shall be required by TASLA and/or TASLA's contractors and sub-contractors hired to perform work on the Site for owned, hired, leased, and non-owned autos andshall be received by the CRALA prior to the commencement of any work being performed onSite.

(6) All required insurance policies shall not be subject to cancellation, reduction in

coveragc, or non-renewal except after notice in writing shall have been sent by registered mailaddressed to the CRAJLA not less than thirty (30) days prior to the effective date thereof (tendays for nonpayment of premiums). All policies where applicable must name The CommunityRcdevelopment CRALA of the City of Los Angeles, California and the City of Los Angcles asadditional insureds. The insurance policies or endorscments shall also contain a waiver ofsubrogation for the benefit of the CRAJLA and City of Los Angeles.

(7) All insurance provided under this Article 8 shall be for the benefit of T ASLA, the

CRA/LA and City. TASLA agrees to timely pay all premiums for such insurance and, at its solecost and expense, to comply and secure compliance with all insurance requirements necessary forthe maintenance of such insurance.

(8) T ASLA shall submit proof of insurance and applicable endorsements as proof ofinsurance required by this Section to the CRAJLA prior to disbursement of any portion of theLoan. At least thirty (30) days prior to expiration of any such policy, copies of renewal policiesshall be submitted to thc CRA/LA.

(9) All insurance herein provided for in this Agreement shall be effected under

policies issued by insurers of recognized responsibility, licensed or permitted to do business inthe State of California reasonably approved by the CRA/LA.

(10) If TASLA fails or refuses to procure or maintain insurance as requircd by thisAgreement, the CRALA shall have the right, at the CRALA's election, and upon ten (J 0) daysprior notice to T ASLA and all mortgagees entitled to notice, to procure and maintain suchinsurance, The premiums paid by the CRALA shall be added to the amount of

the Loan.

(11) Subject to the provisions of any other construction lender's and pcrmanent

lender's loan documents, all proceeds of insurance with respect to loss or damage to the

Improvements during the term of the Loan shall be payable, under the pïûvisiûns of the policy ofinsurance, jointly to TASLA and the CRA/LA, and said proceeds shall constitute a trust fund tobe used for the restoration, repair or rebuilding of the Improvements in accordance with plansand specifications approved in writing by the CRALA. To the extent that such proceeds cxceedthe cost of such restoration, repair or rebuilding, such proceeds shall be applicd to repay theLoan. During any period when a permanent loan is outstanding, such proceeds shall be dividedbetween the permanent lender and the CRAJLA in proportion to the balance of thcir respective

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loans. In the event of any fire or other casualty to the Development or eminent domain

proceedings resulting in condcmnation of the Development or any part thereof, the T ASLA shallhave the right to rebuild the Development, and to use all available insurance or condemnationproceeds therefore, provided that (a) such proceeds are sufficient to keep the Loan in balance andrebuild the Developmcnt in a manner that provides adequate security to CRALA for repaymentof the Loan or if such proceeds are insufficient then the T ASLA shall have funded anydeficiency, (b) thc CRALA shall have the right to approve plans and spccifications for any majorrebuilding and thc right to approve disbursements of insurance or condemnation proceeds forrebuilding under a construction escrow or similar arrangement, and (c) no material default thenexists under the Loan documents. If the casualty or condemnation affects only part of theDevelopment and total rebuilding is infeasible, then proceeds may be used for partial rebuildingand partial rcpayment of thc Loan in a manner that provides adequate security to the CRA/LA forrepayment of the remaining balancc of the Loan.

(12) The CRALA reserves the right at any time during the term of this Agreement to

changc the amounts and typcs of insurance requircd hereunder by giving the TASLA ninety (90)days written, advance notice of such change. If such change(s) should result in substantialadditional cost to the T ASLA, the CRALA agrces to negotiate additional compensationproportional to the increased benefit to the CRALA and City of Los Angeles.

8.3 INSURANCE ADVANCES. In the event TASLA fails to maintain the fullinsurance coverage required by this Agreement, the CRA/LA, after at least seven (7) businessdays prior notice to T ASLA, may, but shall be under no obligation to, takc out the requiredpolicies of insurance and pay the premiums on such policies. Any amount so advanced by theCRA/LA, togethcr with intcrest thereon from the date of such advance at the same rate ofindebtcdness as specified in thc Note (unless payment of such an interest rate woutd be contraryto applicable law, in which event such sums shall bear intcrest at the highest rate then allowcd byapplicable law), shall become an additional obligation of TASLA to the CRALA and shall besccured by the Deed of Trust.

8.4 NON-LIABILITY OF OFFICIALS, EMPLOYEES AND AGENTS. TheCRA/LA shall not bc personally liable to T ASLA for any obligation creatcd under the terms ofthese Loan Documents except in the case of actual fraud or willful misconduct by such person.

ARTICLE 9. HAZARDOUS MATERIALS

9.1 REPRESENTATIONS AND WARRNTIES. TASLA hereby represcnts andwarrants to thc best of its knowledge, as of the date of this Agreement and except as previouslydisclosed and acknowledged in writing by the eRA/LA or as disclosed by the reports based ûnenvironmental audit(s) performed on the Site and submitted to the CRALA, that, based onT ASLA's reasonable investigation and inquiry (a) the Site is not and has not been a site for theusc, generation, manufacture, transportation, storage, or disposal of Hazardous Materials; (b) theSite is in compliance with all applicable cnvironmental and health and safety laws, regulations,ordinances, administrative decisions, common law decisions (whether fcderal, state, or local)with respect to Hazardous Materials, including those relating to soil and groundwater conditions

Pagc3 i

("Hazardous Materials Laws"); (c) there are no claims or actions pending or threatened withrespect to the Site by any governental entity or CRNLA or any other person relating toHazardous Materials; and (d) there has been no release or thrcatened release of any HazardousMateriats on, under, or near the Site (including in the soil, surface water, or groundwater underthe Sitc) or any other occurrences or conditions on the Site or on any other real property thatcould cause the Site or any part thercof to bc classified as a "hazardous waste property" or as a"border zone property" under California Health and Safety Code Sections 25220, et seq., orregulations adopted therewith.

9.2 NOTIFICATION TO CRAA. TASLA shall promptly notify the CRNLA inwriting of any of the following: (a) the discovery of any concentration or amount of HazardousMaterials on or under the Site requiring notice to be given to any governcntal entity orCRNLA under Hazardous Materials Laws; (b) any knowledge by TASLA (after verification ofthe veracity of such knowledge to T ASLA's reasonable satisfaction) that thc Site does not complywith any Hazardous Materials Laws; (c) the receipt by T ASLA of written notice of anyHazardous Materials claims; (d) the discovery by TASLA of any occurrence or condition on theSite or on any real propcrty located within 2,000 fect of the Site that could causc the Site or anypart thereof to be designated as a "hazardous waste property" or as a "border zonc property"under California Health and Safety Code Scctions 25220, et seq., or regulations adoptedtherewith; and (e) any knowlcdge by TASLA of any pending claims based on any HazardousMaterial Laws in connection with the Site.

9.3 USE AND OPERATION OF SITE. Neither TASLA, nor any agent, employee,

or contractor of T ASLA, nor any authorized user of the Site shall use the Site or allow the Sitc tobe used for the generation, manufacture, storage, disposal, or release of Hazardous Materials.T ASLA shall compty and cause the Development to comply with Hazardous Matcrials Laws.

9.4 REMEDIAL ACTIONS. IfTASLA has actual knowledge of the presence of any

Hazardous Materials on or under the Site, T ASLA shall promptly take or cause its tenant toimmediately take, at no cost or expense to the CRNLA, all handling, treatmcnt, removal,storage, decontamination, cleanup, transport, disposal or othcr remedial action, if any, rcquiredby any Hazardous Materials Laws or by any orders or requirements of any governental entity

or

CRNLA or any judgment, consent decree, scttlemcnt or compromise with respect to anyHazardous Materials claims. The foregoing, however, shall be subject to T ASLA's right ofcontest below.

9.5 ENVIRONMENTAL INDEMNITY. TASLA shall dcfcnd, indemnify, and holdthe Indemnitees frec and harmless against any claims, demands, administrative actions, litigation,liabilities, losses, damages, response costs, anà penaìties, including all costs of legal prûceedingsand attorney's fees, that the Indemnitees may directly or indirectly sustain or suffer as aconsequence of any inaccuracy or breach of any representation, warranty, agreement, or covenantcontained in this Agrcement with respect to Hazardous Materials, or as a consequence of any use,generation, manufacture, storage, release, or disposal (whether or not T ASLA knew of same) ofany Hazardous Materials occurrng prior to or during TASLA's use or occupancy ofthc Site.

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ARTICLE 10. DEFAULT AND REMEDIES

10.1 EVENTS OF DEFAULT, The occurrence of any of the following events shallconstitute an "Event of Default" under this Agreement:

A. Monetarv. (1) TASLA's failure to pay when due any sums payable under the Noteor any advances made by the CRNLA under the Dced of Trust or this Agreement; (2) T ASLA'suse of Loan funds for costs other than Eligible Costs or for uses inconsistent with other terms andrestrictions in the Loan Documents; (3) T ASLA's failure to obtain and maintain the insurancecoverage required under this Agrecment; (4) T ASLA's failure to make any other payment orassessment due under the Loan Documents;

B. Construction. (I) T ASLA's substantial deviation in the work of construction

specified in the Plans and Specifications submitted to the CRALA, without the CRAA's priorwritten consent; (2) T ASLA's usc of defective or unauthorized materials or defectiveworkmanship in constructing the Development; (3) T ASLA's failure to commence or completeconstruction, without proper justification under the unavoidable delay provision of thisAgrecment, according to thc construction schedule specified in this Agreement; (4) any materialadverse change in the condition of T ASLA or thc Development or any other event that gives theCRALA reasonable cause to believe that the Development canot be substantially constructcdby the scheduled completion date according the terms of this Agreement; (5) the filing of anyclaim of licn against the Site or service on the CRNLA of any stop notice relating to the Loanand the continuance of the claim of lien or stop notice for 20 days after such fiing or servicewithout payment, discharge, or satisfaction as provided for in this Agreement; (6) T ÀSLA'sfailure to remedy any deficiencies in record keeping or failure to provide records to the CRA/LAupon the CRA/LA's request; (7) T ASLA's failure to substantially comply with any federal, state,or local laws or the CRA/LA policies governing construction, including but not limited toprovisions of this Agreement pertaining to prevailing wages, affrmative action and equalemployment opportunity, minority and female-owned business enterprises, disabled access, leadpaint, and Hazardous Materials; (8) T ASLA's failure to maintain insurance coverage as providedin Aricle 8;

C. Operation. (I) Discrimination by T ASLA on the basis of characteristics

prohibited by this Agreement or applicable law; (2) the imposition of any encumbrances or lienson the Site without the CRALA's prior written approval that are prohibited under this Agreementor that have the effect of reducing the priority of or invalidating the Deed of Trust; (3) TASLA's

failure to remedy any deficiencies in rccordkeeping or failure to providc records to the CRALAupon the CRALA's requcst; (4) TASLA's failure to maintain insurance coverage as provided inAricie 8; (5) any maierial aòverse change in the cünditiûn ûf T ASLA or the Development orpermanent financing or funding for thc Development that gives the CRALA reasonable cause tobelieve that thc Developmcnt cannot be operated according thc terms of the Loan Documents orthe Agreement Containing Covenants;

D. General performance of Loan obligations. Any substantial or continuous breach

by TASLA of any material obligations on TASLA imposed in the Loan Documents;

Page 33

E. General performanee of other obligations. Any substantial or continuous breach

by T ASLA of any material obligations on T ASLA imposed by any other agreements with respectto the financing, development, or operation of the Devetopment or the Site, whether or not theCRALA is a party to such agreement;

F. Representations and warranties. A determination by the CRALA that any of

T ASLA's representations or warranties made in the Loan Documents, any statements made to theCRALA by TASLA, or any certificates, documents, or schedules supplicd to the CRA/LA byTASLA were untrue in any material respect when made, or that TASLA concealed or failed todisclose a material fact from the CRALA;

G. Damage to Site. Material damage or destrction to the Site by fire or othercasualty, if T ASLA docs not take steps to reconstruct the Site as required by the LoanDocuments;

H. Bankptcy, dissolution, and insolvencv. TASLA's or any general partner ofT ASLA's or any Corporation controlling T ASLA's (l) filing for bankruptcy, dissolution, orreorganization, or failure to obtain a full dismissal of any such involuntary filing brought byanother party before the earlier of final relief or 60 days after the filing; (2) making a gcneralassignent for the benefit of creditors; (3) applying for the appointment of a receiver, trustee,custodian, or liquidator, or failure to obtain a full dismissal of any such involuntary applicationbrought by another party before the earlier of final relief or 60 days after the filing; (4)insolvency; (5) failure, inability or admission in writing of its inability to pay its debts as theybecome due; or

L Records. TASLA's failure to maintain accurate records in accordance withSection 5.1, including any substantial financial discrepancies revealed by an audit conducted bythc CRALA under Section 5.3.

10.2 NOTICE OF DEFAULT AND OPPORTUNITY TO CURE. For Events ofDefault pursuant to Section 11.1 above, the CRALA shall give written notice to T ASLA of anyEvent of Default by specifying: (a) the nature of the evcnt or deficiency giving rise to the Default,

(b) the action required to cure the deficicncy, if an action to cure is possible, and (c) a date, whichshall not be less than thirty (30) calendar days from the date of receipt of the notice or the datethe notice was refused, by which such action to cure must be taken.

10.3 CRALA'S REMEDIES. Upon the happening of an Event of Default by T ASLA

and a faiiure to cure saià Event of Default within the time specified in the notice of Event ofDefault (if a notice is required), the CRA/LA's obligation to disburse Loan proceeds shallterminate, and the CRALA may also, in addition to other rights and remedies permitted by theLoan Documents or applicable law, proceed with any or all of the following remedies in anyorder or combination the CRA/LA may choose in its sole discretion:

Page 34

A. Terminate this Agreement, in which event the entire principal amount outstandingand all accrued interest under the Note, as well as any other monies advanced to T ASLA by theeRAA under the Loan Documents including administrative costs, shall immediately becomedue and payable at the option of the eRAA;

B. Bring an action in equitable relief (1) seeking the specific performance by T ASLA

of the terms and conditions of the Loan Documents, and/or (2) enjoining, abating, or preventingany violation of said terms and conditions, and/or (3) seeking declaratory relief;

C. Accelerate the Loan, and demand immediate full payment of the principal amountoutstanding and all accrued interest under the Note, as well as any other monies advanced toT ASLA by the eRALA under the Loan Documents;

D. Enter the Site and take any actions necessary in its judgment to completeconstruction of the Developmcnt, including without limitation (I) making changes in the Plansand Specifications or other work or materials with respect to the Development, (2) entering into,modifying, or terminating any contractual arrangemcnts (subjcct to the eRALA's right at anytime to discontinue work without liability), and (3) taking any remedial actions with respect toHazardous Materials that the eRALA deems necessary to comply with Hazardous MaterialsLaws or to render the Site suitable for occupancy;

E. Seek appointment from a court of competent jurisdiction of a receiver with theauthority to complete construction as needed to preserve the eRAA's interest in seeing theDevelopment developed in a timely manner (including the authority to takc any remedial actionswith respect to Hazardous Materials that the eRALA or the receiver deems necessary to complywith Hazardous Materials Laws or to rcnder the Site suitable for occupancy);

F. Order immediate stoppage of construction and demand that any condition leading

to the Event of Default be corrected before construction may continue;

G.Default;

Disburse from Loan proceeds any amount necessar to cure any Monetary

H. Enter upon, take possession of, and manage the Site, either in person, by agent, orby a receiver appointed by a court, and collect rents and other amounts specified in theassignment of rents in the Deed of Trust and apply them to operate the Sitc or to pay off the Loan

or any advances made under the Loan Documents, as provided for by the Deed of Trust;

i. With respect to obligations set forth in the Loan Dûcüments, initiate and pursue

any private and/or judicial foreclosure action allowed under applicable law and the powcr of saleprovision in the Deed of Trust;

J.attached to

With respect to obligations set forth in the Note and Deed of Trust, which arethe Agreement as Exhibit D, initiate and pursue any private and/or judicial

Page 35

foreclosure action allowed under applicable law and the power of sale provision in the Deed ofTrust;

K. With respect to defaults under Hazardous Materials provisions herein, pursue therights and remedies permitted under California Civil Code Section 2929.5, and California Codeof Civil Procedure Sections 564, 726.5, and 736;

L. With respect to defaults by T ASLA under another loan obligation, advance funds

to cure such default on behalf of T ASLA, with any amount so advanced by CRNLA, togetherwith interest thereon from the date of such advance at the maximum rate specified in the Note,becoming an additional obligation ofTASLA to CRNLA secured by the Deed of Trust; or

M. Pursue any other remedy allowed at law or in equity.

Nothing in this section is intended or shall be construed as precluding the CRNLA fromproceeding with a non-judicial foreclosure under the power of sale contained in the Deed of Trustin the Event of Default by T ASLA. CRNLA's delay or failure to pursue any remedy above doesnot constitute a waiver of the right to pursue that remedy.

ARTICLE 11. GENERAL PROVISIONS

11.1 TASLA'S WARNTIES. TASLA represents and warrants (i) that it isfinancially capable and has access to professional advice and supportto the extent necessary toenable TASLA to fully comply with the terms of these Loan Documents and the AgreementContaining Covenants, and to otherwise carr out the Development, (2) that it is duly organized,validly existing and in good standing under the laws of the State of California, (3) that it has thefull power and authority to undertake the Development and to execute thc Loan Documents, and

(4) that the persons executing and delivering the Loan Documents are authorized the execute anddeliver such documents on behalf of TASLA.

11.2 MONITORING AND EVALUATION. Except as otherwise provided for in thisAgreement, TASLA shall maintain and submit records to the CRNLA within ten business daysof the CRNLA's request which clearly document TASLA's performance under each requirementof the Loan Documents. Requests shall be limited to a maximum of one (1) CRNLA requestevery six (6) months under the Operating Plan.

11.3 CONFLICTS OF INTEREST. No member, official or employee of the

CRNLA shall have any personal interest, direct or indirect, in this Agreement nor shall any suchmember, oîficial or employee participate in any decIsIûn relating tû the Agreement which affectshis or her personal interests or the interests of any Corporation, partnership or association inwhich he or she is, directly or indirectly, interested.

11.4 POLITICAL ACTIVITY. None of the funds, materials, property or services

contributed by the CRAA or T ASLA under this Agreement shall be used for any parisanpolitical activity or the election or defeat of any candidate for public offce.

Page 36

11.5 PUBLICITY. Any publicity generated by T ASLA for the Development duringthe term of this Loan and for one year thereafter shall make reference to the contribution of the

CRALA in making the Development possible. The words "The Community RedevelopmentCRALA of the City of Los Angeles" will be prominently displayed in any and all pieces ofpublicity, including but not limited to flyers, press releases, posters, signs, brochures, publicservice announcements, interviews, and newspaper aricles. T ASLA further agrees to cooperatewith authorized staff and offcials of the CRALA in any CRNLA-gencrated publicity orpromotional activities undertakcn with respect to the Development.

11.6 TERM OF THIS AGREEMENT. This Agrccment shall commence on the dateset forth above and remain in full force and effect throughout the longer of the tcrm of the Loan

or the Agreemcnt Containing Covenants.

11.7 GOVERNING LAW. The Loan Documents shall be interpreted undcr and begoverned by the laws of the State of California, except for those provisions relating to choice oflaw or those provisions preempted by federal law.

11.8 STATUTORY REFERENCES. All referenccs in the Loan Documents orAgreement Containing Covenants to particular statutes, regulations, ordinances, or resolutions ofthe United States, thc State of California, or the City of Los Angeles shall be deemcd to includethe same statute, regulation, ordinance, or resolution as hercafter amended or renumbered, or ifrepealed, to such other provisions as may thereafter govern the same subjcct as the provision towhich specific reference was made.

11.9 TIME. Time is of the essence in these Loan Documents.

1 1.0 UNAVOIDABLE DELAY IN PERFOR.1VANCE. The time for performance ofprovisions of this Agreement by either party shall be extended for a period equal to the period ofany delay directly affecting the Development or this Agrecment which is beyond the reasonablecontrol of either party and is caused by: war; insurrection; strikes; lock-outs; riots; floods;earthquakes; fires; casualties; acts of God; acts of a public enemy; epidemics; quarantinerestrictions; freight embargoes; lack of transportation; suits filed by third parties concerning orarising out of this Agreement; or unseasonable weather conditions. Any financial inability toperform on the part of the T AS LA shall not constitute an unavoidable delay for the purpose ofthis section, an no extension shall be available there for. An extension of

time for any of the

above-specified causes will bc deemed granted only if written notice by the party claiming such

extcnsion is sent to the othcr pary within twenty (20) calendar days from the commencement ofthe delay, and such cxtension of time is either accepted by the other party in writing, ûr is Dûtrejected in writing by the other party within ten (l0) calendar days of receipt of the notice. Timesof performance under this Agreement may also be extcnded for any cause for any

period of time

by the mutual written agreement of thc CRALA and T ASLA.

11.1 CONSENTS AND APPROVALS. Any consent or approval of the CRALA or

T ASLA required under the Loan Documents shall not be unreasonably withheld. Any approval

Page 37

required under the Loan Documents shall be in writing and executed by an authorizedrepresentative of the party granting the approval. Nothing contained in the Loan Documentsshall constitute conscnt by the City with respect to any of its discretionary actions.

11.12 NOTICES, DEMANDS AND COMMUNICATIONS. Unless otherwisespecified, all notices, requests, demands, directions, and other communications provided forhereunder and undcr any other Loan Documents (a "Notice") must be in writing and must bemailed, delivered, or sent by facsimile transmission to the appropriate party at its respectiveaddress set forth below or, as to any party, at any other address as may be dcsignated by it in awritten notice sent to the other parties in accordance with this Section 12.14. Any notice givenby facsimile transmission must bc confirmed within three (3) Business Days by 1ettcr mailed ordelivered to the appropriate party at its respective address. If any notice is given by mail it willbe effective three (3) Business Days after being deposited in the mails with first-class or airmailpostage prepaid; if given by facsimile transmission, when sent; or if givcn by personal delivery,when delivered.

CRALA: Thc Community Redcvelopment Agencyof the City of Los Angeles CRNLA354 South Spring Street, Suite 300Los Angeles, CA 90013Atln: Chief Executive OfficerFacsimile: (213) 977-1665Phone: (213) 977-1600

T ASLA: Travelers Aid Society of Los Angeles, California1720 N. Gower StreetLos Angeles, CA 90028Atln: Paul HollombeFacsimile: (323) 468-2505Phone: (323) 468-2500

With Copy To: Travelers Aid Society of Los Angeles, California1507-1509 Winona BoutevardLos Angeles, CA 90027Atln: Paul HollombeFacsimile: (323) 468-2505Phone: (323) 468-2500

11.13 BINDING UPON SUCCESSORS. All provisions of these Lûan Dûcumentsshall be binding upon and inure to the bencfit of the heirs, administrators, cxecutors, successors-in-interest, transferees (see Section 8.10 of Agreement), and assigns of each of the parties;provided, however, that this section does not waive the prohibition on assignment of thisAgreement by T ASLA without the CRA/LA's consent.

Page38

11.4 RELATIONSHIP OF PARTIES. The relationship ofTASLA and the CRALAfor this Development under this Agreement is and at all times shall remain solely that of a debtorand a creditor, and shall not be construed as a joint venture, equity venture, partnership, or anyother relationship. The CRALA neither undertakes nor assumes any responsibility or duty toTASLA (except as provided for hercin) or any third party with respect to the Development, theSite, or the Loan. Exccpt as the CRALA may specify in writing, TASLA shall have no authorityto act as an agent of the CRALA or to bind the CRALA to any obligation.

11.15 ASSIGNMENT AND ASSUMPTION. TASLA shall not assign any of itsinterests under this Agreement or the Loan Documents to any other party, except as specificallypcrmitted under the terms of the Loan Documents, without the prior written consent of theCRALA. Any unauthorized assignent shall be void.

11.16 WAIVER. Any waiver by the CRNLA of any obligation in these LoanDocuments must bc in writing. No waiver will be implied from any delay or failure by theCRNLA to take action on any breach or default of TASLA or to pursue any remedy allowcdunder the Loan Documents or applicable law. Any extension of time granted to TASLA toperform any obligation under the Loan Documents shall not operate as a waiver or rei case fromany of its obligations under the Loan Documents. Consent by the CRA/LA to any act oromission by T ASLA shall not be construed to be a conscnt to any other or subscquent act oromission or to waive the requirement for the CRALA's written conscnt to future waivers.

11.17 INTEGRATION. This Agrecment and the other Loan Documents, includingexhibits, executed by T ASLA for the Site, if any, contain the entire agreement of the parties andsupersede any and all prior negotiations.

11.18 OTHER AGREEMENTS. TASLA represents that it has not entered into anyagrecments that are inconsistent with the terms of the Loan Documents. T ASLA shall not enterinto any agrcements that are inconsistent with the terms of the Loan Documents without anexpress waiver by the CRAA in writing.

11.19 AMENDMENTS AND MODIFICATIONS. Any amendments or modificationsto the Loan Documents must be in writing, and shall be made only if executed by both TASLAand the CRALA.

11.20 SEVERABILITY. Every provision of this Agreement is intended to beseverable. If any provision of this Agreement shall be held invalid, ilegal, or unenforceable by acourt of competent jurisdiction, the validity, lcgality, and enforceability of the remainingprovisions shall not in any way be affected or impaired.

11.21 COUNTERPARTS. The Agreement may be executed in several counterparts, allof which shall be an original and all of which together shall constitute but one and the sameAgreement.

Page 39

11.22 USE OF IMAGES. TASLA hereby consents to and approves the use byCRNLA of images of the Developmcnt, its models, plans and other graphical representations ofthe Development and its varous elements in connection with websites, presentations, and otheruses required by any of such authorities or agencies in connection with the Development. Suchright to use the Development images shall not be assignable by the CRNLA to any other party(including, without limitation, any private party without the prior written consent of T ASLA).T ASLA shall obtain any rights and/or consents from any third paries necessary to provide theserights to the CRNLA.

11.23 LIMITED RECOURSE. The Loan is a limited recourse obligation ofTASLA.CRNLA's recovery against TASLA with respect to the Loan shall be limited solely to thc Sitc,except that TASLA may be personally liable to CRNLA for any losses or damages incurred bythe following matters: (a) fraud or willful misrepresentation; (b) material physical waste of theSite; (c) failure to pay property or othcr taxes, assessments or charges, which may create lienssenior to the lien of the Deed of Trust on all or any portion of the Site to the extent of such failurcto pay; (d) any material representation or warranty ofTASLA in the Loan Documents proving tohave been untrue when made; (e) failure to deliver any insurance or condemnation proceedsreceived by TASLA to CRNLA or to othcrwise apply such sums as rcquired undcr the Deed ofTrust to the extent of the insurance or condemnation proceeds not delivered; (f) failure to applyany rents, royalties, accounts, revenues, income, issues, profits and other benefits ("ProjectIncome") from the Site which are collected or received by TASLA during the period of anydefault to the payment of either (i) such indcbtedness or other sums or (2) the normal andnecessary operating and maintenance expenses of the Site to the cxtent such Project Income isnot applied as set forth herein; and (g) any breach by T AsLA of any covenant in the Deed ofTrust or the Agreement regarding Hazardous Materials.

¡signature page follows J

Page 40

IN WITNESS WHEREOF, the paries hereby have executed this Agreement as of thedate first above written.

CRAA:

THE COMMUNITY REDEVELOPMENTCRAA OF THE CITY OF LOS ANGELES,C¿ZBy: Cecilia V. EstolanoIts: Chief Executive Officer

Date: December 6, 2007

-

APPROVED AS TO FORM:ROCKARD J. DELGADILLO, CITY ATTORNEY

r,/rl" ,'~ Jr__-By: CRA/LA General Counsel

Date: \ ik !er; 2007

TASLA:

Travclcrs Aid Society of Los Angeles, Califonia, aCalifornia non-profit corporation

By:Name: Paul Hollombe, Executive Director

Its: Managing Member

Date:

Page 41

IN WITNESS WHEREOF, the paries hereby have executed this Agreement as of the date firstabove written.

CRAA:

THE COMMUITY REDEVELOPMENT AGENCY CRAA OF THE CITY OF LOSANGELES, CALIFORNA

By: Cecí ba V. Estolano

Its: Chief Executive OfficerDate: ,20

APPROVED AS TO FORM:ROCKARD J. DELGADILLO, CITY ATTORNY

By: CRNLA General Counsel

Date: 2007

T ASLA:

Travelers Aid Society of Los Angeles, California, a California non-profit corporationBy: Ú~Name: Paul Hollombe, Executive DirectorIts: Managing Member

~ J~i ;;"' 7,Date:

Page 41

EXHIBIT ATO AGREEMENT

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Marcus &Millichap

COUNTER OFFER (Seller)

THIS IS INTENDED TO BE A LEGALLY BINDING AGREEMENT. READ IT CAREFULLY.

The undersigned Seller, ACP 1509 Winona, L.LC ,makes the following Counter Offer to the offer contained in thePurchase Ag~ement executea ~y Travelers Aid Societýi of Los Anqeles _ as buyer on~Ëember :),2007 , relating to that certain real propert (the "f'ropert ') locted at 1507-1509 Winona Blvd., LosAngeles, CA 90027

TERMS AND CONDITIONS

Seller agrees to sell the Propert to Buyer on the terms and conditions set forth in the aforementioned PurchaseAgreement (Including addenda, if any) with the following exceptions, additions and modifications:

I. Title Company shall be Chicago Title Company - Mary Witty2. Only in the event the Buyer is unable to obtain 3'd party financing from a lender of its choice, then Seller

shall provide Seller Financing as provided for in paragraphs 3 and 6 with the following conditions andmoditìcations:

a. Buyer to provide Seller with written verification that it is unable to obtain 3'd party financing orthat its application for 3'd par financing has been declined;

b. Interest rate for year i shall be the most current Prime Rate as published in the Wall SI. Journal;c. Interest rate for year 2 shall be the Prime Rate, as published in the Wall SI. Journal in month i i

following the c lose of escrow, plus t %; andd. Interest rate for year 3 shall be the Prime Rate, as published in the Wall SI. Journal in month 23

following the close of escrow, plus 2%

3. The line "all correspondence relating to the property" in paragraph 26.1 shall be stricken.

THE BALANCE OF THE PAGE LEFT BLANK INTENTIONALLY

,Counll;r OtTer Seller - Winona 1 or 2 Buyets Initials~

Sellets InitialsCopyright Marcus & Millidiap 2006

The foregoing terms and conditions supersee and replac any inconsistent provisions in the referenced PurchaseAgreement. All other terms and condijions of said Purchase Agreement (including all terms and conditions related toAgent's commission) shall remain in full force and effct. The Purchase Agreement (including any previous CounterOffers or Amendments) and this Counter Offer, taken toether, shall constitute the entire agreement of the parties.

If this Counter Offer is not accepted in wring by Buyer and an executed copy personally delivered to Seller, orSte hen D. Stein or Alex Kozakov ,Seller's authorized agent, on or before se¡¡ember 11 ,, IS oun er r s a e nu an VOL, uyei s entre deposit shall be returned, and neither Sel er nor Buyer shãll

have any further rii¡hts or obligations hereunder. The date on which Buyer accepts this Counter Offer in writing shall bethe "effective date' of the Purchase Agreement ben Seller and Buyer. Seller hereby acknowledges receipt of an

:;L~~:COPY;7ffr. ADDRESS: On File with Agent

ACP 1509 Winona, LLC

DATE:~ 1"+ l 01-

Buyer accpts and agrees to the terms and condijions set forth in this Counter Offer and agrees to purchase the Properton the terms and conditions in the aforementioned Purchase Agreement as modified by the provisions of this CounterOfer. Buyer hereby acknowedges recipt of an execed copy of this Counter Offer.

BUYER: ADDRESS:

Travelers Aid Society ofLos Angeles

DATE:

AGENT: MARCUS & MILLICHAP REAL ESTATE INVESTMENT SERVICES

BY: ADDRESS: 915 Wilshire Blvd.,Suite 1700Los Angeles, CA 90017Stephen D. Stein

DATE:September 7, 2007

NO REPRE ENTA ION I HE LEGAL EFFEC 0 VAL DITY OF ANY PROVI ION FTHIS COUNTER OFFER. A REAL ESTATE BROKER IS QUALIFIED TO GIVE ADVICE ON REAL ESTATEMATTERS. IF YOU DESIRE LEGAL, FINANCIAL OR TAX ADVICE, CONSULT YOUR ATTORNEY, ACCOUNTANTOR TAX ADVISOR.

. CounterOffer Scllcr- Winona 2 of 2 Buyets Initials Sellets Inltals H:Copyright Marcus & Mìllidiap 2006

~9/06¡200i 15: 36 41 ~4a42,

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I COUNTER OFFER - BUYERAIR Commercial Real Estate Association

Dated: Septemer 10, 2007

By an Belw (Se): ACP 1509 Winona LLC(Buyt, Travelers Aid Societv of Los Anqeles

Address of Pro 1501-1509 Winona Blvd., Los Anqeles, CA 90027

(APN: 5544-015-037 )BU) e; and preen to Seler lhe"St Off and Agrel for Puas cA Rea Est da September 5, 2007rerdng the abfece PrEr an Par (Mrelnaer lh .Ofler). Ther, Sele exed an dii to Bu th "Conter Of. Sellda September 7, 2007 Full and co co d boh lIe Of an Ses Cote Offer am ali: heeb anincoat he by referen

1. Buy herac 8e Cote Ofer pr th Sele agre tollefolrO' chaiìnsa ConterOIJer

(Pk chec lhe apropiie boer bo)o Iníilepearinkch~eshBVbetnetoUieOffer.o Theeh amdela In th adenum ated he coli of pagrphslì The chaes ate set foi be.

""A. Paraqraph 2 of the Counter shall be modified as follows: Only in the

event that the Buver is unable to obtain 3rd party financinq from a lender of its choice.then Seller shali provide Seller Financinq as provided for in parqraphs 3 and 6 of the

Offer with the followinq conditions and modifications: l. Buyer to provide Seller withwritten verification from one lender of its choice that it is unable to obtain third partyfinancinq or that its application for third party financinq has been declined..8_:l_

::r ;:.~'~:..:~'; n;~;:~:;:~ :~'~:~i::h:: ~~:.:' æ::~':;~:~ :~:":;"~:, ;:':::_ '~;~~ :;a~..s.ll_.. 1:1uci....~n~. 2. The Seller Financinq terms shall remain. as stated in Paraqraph 6 inthe Offer dated Septembr 5, 2007.

e, The lanquaqe of Paraqraph 26.1 shall remain as stated in the Offer datedSeptemr 5, 2007 with the excePtion of the phrase "all correspondence relatinq to theproperty," which shall be modi fed as follows: ~all correspondence that specifically

relates to disclosures and contracts for the Property itself (such correspondence will not

include personal or financial information reqardinq the Sellers or its investors) .

c.

D.

NOTE: PARGRAPHS IN THE OFFER WHICH REQUIRE INITIA BY All PARTIES, BUT ARE NOT INITIAED BY Al PARTIES, AR EXCLUDED

FROM THE FlNAl AGREEMENT UNLESS SPECIFlCAl Y REFERED FOR INCLUSION IN THIS COUNTER OFFER.

2. REMAINING TERMS: All of th ler Iid coit cone in th Selien Count Ofer wh hav not be speic!y mod or dd

by this ColerOferarher ap byBuyr.

3. EXIRATIN: Thi Conter Ofer shan ~ir and be re~, wit furt l'ic, al5:oo pm on Wed. September 12, 2007 ,!.!!g I! is ~~ed ar i;jgr !:y8€!~ an!! fu!!y !l':eCi-!.ed c.o!s ac\!.ti r~ by B(.~s ~ Nicole Mih3.1kaprlos¡id tlma. Upoex, Buys De if an, shal be prptre. Th Conler Ofer ma bB exulin i:.

4. TIME: Time is of th es.6. BINDNG EFFECT: niis cote Offer, wtoo fuRy eiled by bo 8u êId Sell, an died an rec as speie ab shal be a

big cooct. NO REPRESENTATION OR RECOMENDA1l0N IS MADE BY THE AIR COMRCIA REA ESTATE ASSOIATION OR BY ANY

BROKER AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS AGREEMENT OR THE TRASACTION TO

PAGE 1 Of 3;

IITIS1;99. Am COMMERCIA REA ESTATE ASSOCIATION

IÑFORM COB-1-3E

WHICH IT RETES. THE PARTIES ARE ADVIED TO SEE ADVICE OF COUNSEL AS TO THE LEGA AND TAX CONSEQUENCES OF THIS

AGREEMENT

NOTE:

1. THIS FORM IS NOT FOR USE IN CONNECTION WIlH THE SA OF RESIDENTIA PROPERTY.2. IF EITHER PART IS A CORPORATION, IT IS RECOMENDED THAT THIS AGREEMENT BE SIGNED BY TWO OF ITS

CORPORATE OFFICERS.6. Thtlndlgne Buy ag 10 puha th& Pro on Il tel ar codiU state herein.

BROKER:

DAOH Commercial Real EstateBUYER:

Travelers Aid Society of Los Anqeles

Att: Nicole MihalkaTmr. Vice President

B,""Name Prited:

Tllte:Adres: 3'100 W. Olive Avenue, Suite 330Burbank, CA 91505

Tetep: ~J 333-2210Faclm~ (818)333-2211

Em~ nicole .rnihalka0Qvadaum, com

Fedl 10 No.;

'"D~Nae Prnted:T1t1ii

Address:on file with broker

Telphe:L-)on file with brokerFIiIm:(_JFader 10 No.:

7. ACCEPTANCE: Seler ac th fong Co Offer an ag IoseU the Proonthe ter ild co speed, an auBr 10 der a signe co to Buy.

BROKER

Marcus & MillichapSELLER

ACP 1509 Winona LLC

Nm:Alex Kozakov/stephen SteinTite:

B,D~NaePrinfedTille:Ad: 915 Wilshire Blvd.. Suite 1700

T~~(213J 607-5056Facmil( J8r~: akozov~marcusmillichap. comfe ID No.:

'""".NaPriledTiUe;

Ad'*

Telee:(--Famlle:L-)Fed JD No:

6. ACKNOWDGMEN OF RECEIPT: Bus agent heeb aoowedes th a co of the Conter Ofer ex by SaDer wi re on" -..

By:

NOICE: Tlie ronns are ofen moalfled to mol changin taulmmenlB of law and Industt nèii. Als wrte or can to ma sur YØl are

LdIßzng Uie most currri fo: AIR. Comercial Riii Eie AsIation, 800 W 6t Stre SUlle 80 Los Angeles, CA 907. Telepone No.

(213)&8-8777. Fu No.: (213) 687-616.I!pyrlgh 199.By AIR Comecil Real Este AslòiiUi;.

AU rihts resrved.

PAGE20F3

lNlAB INIIAS

FORM COß1-8BE01&9 -.AR COMMERCIA REAL ESTATE ASSOCIATION

No pa ofUies WO mir benpdud In iiform wl pelo Inwrln.

INITS

(ê99. AIR COMMERIA RE ESTATE ASOCIATION

PAGE30F3 IÑFORM Coa1-86E

Marcus &Millichap

COUNTER OFFER (Seller)

THIS IS INTENDED TO BE A LEGALLY BINDING AGREEMENT. READ IT CAREFULLY.

The undersigned Seller, ACP 1509 Winona, hLC , makes the following Counter Offer to the offer contained in thePurchase Agreement executed by Travelers Aid Societr. of Los Anqeles as buyer on September 5,2007 ,relating to that cerain real proprt (the "Propert) located at 1507-1509 Winona Blvd., LosAngeles, CA 90027

TERMS AND CONDITIONS

Seller agrees to sell the Propert to Buyer on the terms and conditions set forth in the aforementioned PurchaseAgreement (including addenda, if any) with the following exceptions, additions and modificatins:

I. Title Company shall be Chicago Title Company - Mary Witty2. Only in the event the Buyer is unable to obtain 3'd party financing from a lender of its choice, then Seller

shall provide Seller Financing as provided for in paragraphs 3 and 6 with the following conditions andmodifications:

a. Buyer to provide Seller with written verification that it is unable to obtain 3'd party financing orthat its application tor 3'd par financing has been declined;

b. Interest rate for year I shall be the most current Prime Rate as published in the Wall St. Journal;c. Interest rate for year 2 shall be the Pnme Rate, as published in the Wall St. Journal in month I I

following the close of escrow, plus I %; andd. Interest rate for year 3 shall be the Prime Rate, as published in the Wall St. Journal in month 23

following the close of escrow, plus 2%

3. The line "all correspondence relating to the property" in paragraph 26.1 shall be stricken.

THE BALANCE OF THE PAGE LEFT BLANK INTENTIONALLY

,Counter OlTer Seller - Winona i of 2 Buyet& Initial5 Seller's InitialsCopyright Marcus & Millìchup 2006

\0

The foregoing terms and conditions superse and replace any inconsistent provisions in the referenced PurchaseAgreement. All other terms and conditions of said Purchase Agreement (including all terms and conditions related toAgent's commission) shall remain in full force and eff. The Purchase Agreement (including any previous CounterOfters or Amendments) and this Counter Ofer, taken together, shall constitute the entire agreement of the parties.

If this Counter Offer is not accepted in wring by Buyer and an executed copy personally delivered to Seller, orStephen D. Stein or Alex Kozakov , Seller's authorized agent, on or before serember 11__,

2U07, thiS Counter Offr Shall be null and VOid, Buyer's entire deposit shall be returned,. and neither Sel er nor Buyer snailhave any further n~hts or obligations hereunder. The dale on which Buyer accepts this Counter Offer in writing shall bethe "effctive date' of the Purchase Agreement betwn Seller and Buyer. Seller hereby acknowledges receipt of an:::C~~:COPY:~~ffr. ADDRESS: On File with Agent

ACP 1509 Winona, LLC

DATE: 'l/i-Ioi

Buyer accpts and agrees to the terms and conditions set forth in this Counter Offer and agrees to purchase the Properton the terms and condUions in the aforementioned Purchase Agreement as modified by the provisions of this CounterOffer. Buyer hereby acnowledges recipt of an executed copy of this Counter Offer.

BUYER: ADDRESS:

Travelers Aid Society ofLos Angeles

DATE:

AGENT: MARCUS & MILLICHAP REAL ESTATE INVESTMENT SERVICES

BY: ADDRESS: 915 Wilshire Blvd.,Suite 1700Los Angeles, CA 90017Stephen D. Stein

DATE:September 7, 2007

ENTATION I E BY AGE A E LEGAL EFFECT 0 V L1DITY OF ANY PROVISION OFTHIS COUNTER OFFER. A REAL ESTATE BROKER IS QUALIFIED TO GIVE ADVICE ON REAL ESTATEMATTERS. IF YOU DESIRE LEGAL, FINANCIAL OR TAX ADVICE, CONSULT YOUR ATTORNEY, ACCOUNTANTOR TAX ADVISOR.

,CountcrOflèr Scllcr- Winona 2 of 2 Buyets Initials Sellor'.I.lIol. ItCopyright Marcus & Millichap 2006

STANDARD OFFER, AGREEMENT AND ESCROWINSTRUCTIONS FOR PURCHASE OF REAL ESTATE

(Non-Residential)AIR Commercial Real Estate Association

A~~~_~r 5, 2007(Date for Ref€fence Purpes)

1. Buyer.1.1 Traveler's Aid Society of Los Anqeles and/or Assiqnee(s) ,("Buyer")herby ofers 10 purchase the rea prpert, hereinaflef described, from the wmer therf ("Seller") (collectivey, the "Parties" or individually, a 'Par).throuh an escrow ("Escrow") to close aG 60 days afer the wave or exration of the Buyes Contingencies, ("Expeed ClosingDato") to be held by LandAerica Commercial Services/Lois McCauley ("Escrow Holder) v.ose address is915 Wilshire Blvd., Suite 2100, Los Anaeles, CA 90017_________________~_ _________~.._.__ ,PhoreNo._____.213-330-3025 ,Facsimi!eNo. __~___. ______upon the ters and condÎlrns sel forh in this agreeent ('Agreement). Buye shall have the right to assign Buys rights hereunder, but any suchassignment shall not relieve Buyer of Buyes obligations hern unless Seller expresly releases Buye.

1.2 The ter "Date of Agreement" as used herin shall be the date lNen by exution and delive (as defined in pagrah 20.2) of this document ora subsequent counterofer therto, Buy and Seller have reached agreeent in wrting lNereby Seller agree to sell, and Buyer agree to purchase, theProer upon terms accepted by both Pares.

2. Propert.

2.1 The real propert ("Propert") that is the subject of this offer consists of (inser a bref physica desciiption) An approximatel y2,954 square foot buildin5Ll~cated on approximately 3,746 square foot lot currently zoned

LAC2is located in the City of Los Anqeles

of CaliforniaAnqeles, CA 900J7

andisiegallydescribeas:~--t_k~_

, County of ~O_~_!'n_g_l; ~_ e_", ' Staleis commoly knov by the street address of _l.?9_l:_99__VUQon.a Blvd., Los_

~PN: 5544-015-037 ~2.2 if the legal description of the Pro is not coplete or is inaccurate, this Agreeent shall nol be invaid and the legal description shall be

completed or corrected to mee the reuirements of LandAmerica Commercial Services('Tltle Company"), which shall issue the title policy hernafter describe.

2.3 The Proer includes, at no additional cost to Buye, the peranent imprveents ther, including those items wtich pursuant to applicable laware a par of the propery, as well as the folli;ng items, if any, OMed by Seller and at preent locte on the Proper electrcal distrbution systems (pCMerpanel, bus ducting, conduits, disconnects, lighting fixtres); telephone distribution systems (lines, jacks and connections only); space heaer; heating.ventilating, air conditioning equipment ('HVAC"); air lines; fire sprnkler systems; securi and fire detection systems; caets; windQl congs; walcovrir.gs; and Q.0ne

_ ___________ ________ (collectiy, the "lmprovemerls').2.4 The fire sprnkler monitorO is owed by SeHer and included in the Purchase Price, 0 is leased by Seller, and Buyer will nee to negotiate a new

leae with the fire monitorng compay, 0 owership will be determined during Escro, or 0 llere is no fire sprinkler monitor.2.5 Except as proded in Parraph 2_3, lle Purchase Price doe not include Sellets peronal proper, furniture an furnishings, and

_n_(ine all of

wtich shall be reov by Seller prior to Closing.3. Purchase Price.

3.1 The purchase price ("Purchase Price") to be pad by Buy to Seller for the Properl shall be $1.!1- 8 0, OO.._. DOfolkms:

,payeas

(a) Cash dow payment, including lle Depit as defined in paragraph 4.3 (or if an aH cashtransactio,thePurchasePrice): $8?4-,..00.00(st_1-- ---b) A~.lOlri"as.deMifi:Ii!i.1,ifan"

(C1- Bu-shalHalæ-litltolhmplltte 8Ai1er assl:me the fellS' iii!: eiasliAg aeea(s) at- ------st ("tiilstliig Ðeedfs-~l;tiflll-eiinpremisse1) Aele(s) :"Enlsllit§: Nete:sl;'

(i) AA Daslili¡irJete("rlFSlllele') i1riaAllAl;18ia pÃiiei¡;aleelaiee-ad-tl.Clesirigefai:lireiEimalel).£aiel rirsl ~Iate is Ila'¡ale at tiAEillJ¡jiA¡i'Ateiestettleffeefefooaibae-lsauor ---

i

,'S/feifflaf_1--perlflirill,

_-----aum-uril-paaOtl-).

(ï) '\ D(istiii!l~16ti:("Seeeiid tlote'j ilri8AlJflpaid-ipabace-tllClesiAg efaiii:rei(jmalel:i. -$-=-=£aiE1£eeeriel rlete is Ilayaleat$ _ pel'flt;¡ri/l~esattlat:=~ "ti:eraflflIJml:ritilliaiEi(ans'elle------------- --fe-lba/arlieis ¡jIJeon-=-: ).

(Strie ifnot (d) Buye shall give Seller a dee of trst ("Purchase Money Deed of Trust) on the

app~cable) properl, to socure the promissOf nole of Buye to Seller described in pargraph 6("Purchase Money Note") in lle amount of: $316,000.00

Total Purchase Price: $1,180,000.00

PAGE 1 OF 8

INITIAS INITIAS

((2003. AIR COMMERCIAL REA ESTATE ASSOCIATION FORM OFA-6-a/06E

3.2 If Buye is taing ti to the Proer subjeçt to, or assuming, an Exsting Dee of Trust and such dee ri !rst peas the benefciary to demandpaymnt of fee induding, but not limited to, points, processing fee, and apprisal fees as a condition to the trsfer of Uie Proper, Buyer agre to paysuch fee up to a maxmum of 1.5% of the unpai principal balance of the applicable Exsting Note.4. Depoits.

4.1 0 Buye has deliveed to Broker a check in the sum of $ , payale to Escri: Holder, to be delived by Broer

to Escra Holder wihin 2 or business day afer both Pares hav eiæuted this Agreent and the eiæuted Agreeeft has be deliveed to Escrow

Holder, Q( I. within 2 or . business days afer both Pares have exeçuted this Agreemeft and the exeuted Agreent has be deliv to EscrowHolder Buye shall delivr to Escro Holder a check in the sum of $25, 000 . 00 If said check is net receive byEscrow Holder within said time peod thef Seller may elect to unilatelly teninate this trsactioo by givng wrtten notice of such election to Escro Holderwhereupo neither Par shall haw any furter liability to the other under this AgreefL. Should Buye and Seller not enter into an agremeft for purchaseand sale, Buyer's check or funds shall, upo request by Buy, be promptly returned to Buy.

4.2 Additional depit:

(a) Witin 5 business days afterthe Date of Agreeeft, Buye shall deposit with Escrow Holder the additonal sum of$ to be applied to the Purchase Price at the C!oing.- (b) wiI~'bi;¡~~~"d~ys afer the contingencies discussed in pagrah 9.1 (a) throgh (k) ar apprw oc waive, Buy shall depit with

Escrow Holder the addaioal sum of $ to be applied to the Purchase Price at the Closing.4.3 EsCWN Holer shall depit the funds depited witl it by Buye pursuant to pargraphs 4.1 and 4.2 (collectivey t/e "Deosit"), in a State or

Federally charered bank in an inlerest beng account v.ose tem is approprate and cosisleft with the timing requireefts of this trasaction. The interesttherefrom shall accrue to the benefi of Buye, who herby acknowedges that tler may be penalties or intert foieitures if the applicable ins!rmeit isredeemed prior to ils speifed maturity. Buyes Federal Tax Identication Number is . NOTE: Such inteest beangaccount cannet be opened until Buyes Federal Tax Ideflication Number is provded.5. FIRaRalRg CotlRg.-f~ab

e.1 TAis ofeFis-o.l.BbI)er sblaiiiRg from an iASIJFa66 semJlai j, fiiiaReiai iAstitli6ii or eler leii~.a-oomilmeiil 10 leiiil te BIJ¡er a slJmealJsl ki at leasl .'. at tAe PIJrehase Priee, SR temis reasBAall1 SBsBJltalle Ie Buye SlJeh lea ("'Ie. lea"") sliallbe seelJreilb'i a flrst ileBil

oflrust ar meFllle eA the PR3peFt,. If this A§resmllt l3f6iiles fer Sellerte eaw, baek-firi, then E:eller sAalllia 'e Ile rigAl Ie BfJlR3 e lAe lemis sf!he rJe Le8l. Sellershallliß''e 7 ilay from reeeipt-øHhe.€9If~ the I3rei6SeilleFfS efÜ'e riEl lsan 1~-disapl3F8.e efSlJeAfMai~Ie.lf Seller fals Ie AStit (sem Ilsliler, iR 'Fiii!!, sf lAe ilisal3l3ro 'i illiiA saiil 7 ilays jt..sh.be eSAsllJsi e1) I3feIJmeillAai Seller l1as81313re lòiltlielsmisatllierle LeaR.

e.2 8IJyer~eekJdiliplebI'AiRg lAe ~J~ LOO. If Bii,er shall fall te natll) Its Braker, ESGrow.Hoar allEl Seller, In ",ltlAIlwWn d6)s rolla ~nii the ()te of "'IlFeemeRL, that the Ne leaR Aas notneshallliii 60n6111s1 e~~ presiimed that BIJ~lIrh- obtaIned said Ne lean or has al ad this NlI liian aaAtlAllllA~.

!i.3 If, afr illJe ilili!leiiee, 8IJ,61 sAall Rstiol€f,-!:rcwHo-.llil' ,lfIiAg, ill'A Ile lime s¡:e6ifeil iiil3aisgra6.2 lieo.-IhalItfl.ebsaiil rle Lsai, Ilis A greemeiit shall Be temiiiisleil, aiiil 8IJyer sl1a1lbe eAlilleilte the I3rEl-fel-o Ile Ðei6Sil, I3IIJS aR'i il'terest eameilÜ'eiesA, less sl'l) ES6ff IlslEler anil Tile Ceml3aRj eaneellalÎeA fees anaeasls, ~.-spa,6. Seller Financing (Purchase Money Note). (Strie if not applicable)

6.1 if :~e!ler approv Buyes financials (see para,:Cjph 6.5) the Purchase Money Note shall provde for inteest on unpaid principal at the rae of*see followinq paraqraph % per annum, wi principal and inlerest paid asf 0 I low s t n t ere s ton I v; B a I I 0 0 n pay m e aj: due i nth r e e~ar~J.__Int_~rest rate for 1st year shall be at prime rate prevalant at ~_te of close of~~.c.rp.~! .not to exceed 8.75%; Interest rate for 2nd year shall be .?..t__..pXi!fe rate prevalantat the 11th month fOIl.~~i:qçl.C?_s.§'__c:f F:scrow, not to exceed 8.75%; Interest r:.a_t(Õ_._at tl1-ir-d_Yadr shall be at the prime rate prevalant at the 23rd month f9~J~~inq close of escrowpl~s 2 points, altoqether not to exceed 10.25%. The Purchasa.~9~ey~~te shall be draftedfor Buver's approval within twentv_(ld_ay~_l-o--l_aJlirig_._Date of l\qreement.The Purchase Money Nole and Purchase Money Dee of Trust shall be on the current fors commonly use by EscrON Holder, and bejunioc and suboinateonly to the Eiasting Note(s) andlOf the New Loan exressly called for by this Agræent.

6.2 The Purchase Morey Ndeandloc the Purchase Money Dee of Trust shall contain provisions rearing the followng (see also parrah 10.3 (b)):(a) Prepayment. Principal may be prepaid in ..ole or in par at any time INthout penalty, at the option of the Buye.(b) Late Charge. A late charge of 6% shall be paable with repect to any payment ri principal, intert, Of other charges, not made within 10 days

after it is due.(c) Dii On Sale. In theevet the Buye sells or transfer title to the Pro Of any poio thereof, t/ei the Seller may, al Seller's optior, reuire

the entire unpaid baance of said Note to be paid in fulL.6.3 If the Purchase Money Dee of Trust is to be sutxinate to other financing, Escro Holder shall, at Buyr's expense prepar and recor on Sellers

behal a request for notice of default and/or sale with regard to each morgage or dee of trst to which it INIl be subodinate.6.4 WARNING; CAUFORNIA LAW DOES NOT ALLOW DEFICIENCY JUDGEMENTS ON SELLER FINANCING. IF BUYER ULTIMATELY

DEFAULTS ON THE LOAN, SELLER'S SOLE REMEDY IS TO FORECLOSE ON THE PROPERTY.! 6.5 Sellers obligation 10 prvide finaning is contingenl upo Selers reasonable alprva of Buys finanial condition. Buye to provde a current

financial staement and copies of its Feder tax relurns for the last 3 yes to Seller within 10 days follO\ng the Date of Agreeent. Seller has 10 dayfolla.ng reeipt of such documentaion to satisfy itsel \\th regar to Buyes financial condition and to not Escrow Holer as to whether oc not Buyersfinancial condaion is acceptale. If Seller fails to noti Escro Holer, in wrting, of the disappruva of this contingency within sai lime peod, it shall beconclusive presumed that Seller has approv Buys financial condition. If Seller is not satsfied wi Buyes financial codition or if Buy fails 10 deliverlIe required documentation then Seller may not Escro Holder in wrng that Seller Financing will nol be available, and Buye shall hav the opti, wihin 10days of the receipt of such notce, to eier terinate th~ trsaction or to purchase the Prope without Seiler financing. If Bu~r fails to noti Escrow Holderwithin said time perod of its elecon to terinate t/is trsaction then Buyer shall be conclusivy preumed to have elected to purchase the Proper withoutSeiler financing. If Buyer elects to terminate, Buys Depit shall be refunded less Tille Company and Escrow Holder canceHation fee and costs, all ofwhich shall be Buyer's obligation7. Real Estate Brokers.

7.1 The followng rea estate broler(s) ("Brokers") and brokerge relationships eiasl in this tranactio and are consented to by the Pares(cheok the applicable boxes):I. Marcus and Mi i 1 ichap repreents Seller exclusively ("Sellets Broker");

I. DAUM Commercial Real Estate reresents Buy exclusivy ("Buyets Broker"); or

D represents both Seler and Buyer ("Dual Agency").

The Partes acknowedge lhat Brokers are the prouring cause of this AgreeenL See pargrah 24 regaring t/e nature of a rea estate agency relatioship.Buye shall use the servces of Buyes Brolef exclusively in connection with any and all negotiations and ofer witl rcspet to the Proer for a perod of 1year from the date insered for refefence purposes at t/e top of page 1.

7.2 Buye and Seiler each represent and waant to the other that he/she/t has had no dealings with anyperon, fimi, broker or finder in conection wit/thenegotialion of this Agreeent andloc the consummaton of the purchase and sale conlemplated hefein, other than the Broker named in paragraph 7.1, andno broke or other peron, fimi or entity, other lhan said Broker is/are entitled to any comission oc finders fee in connection with lhis trsaction as theresult of any deaings or acts of such Par. Buyer and Seller do each hereb agre to indemnif, defefd, protect and hold the oter harless from and againstany costs, expefses or liabilft for compensation, commission or charges which may be claimed by any broker, finder or other similar par, ot/er than saidnamed Broker by reaon of any deaings or act of the indemnifyng Par8. Escrow and Closing.

8.1 Upon acceptance hereo by Seller, this Agreeent, including any counteroffers incorpated hCfeln by the Pares, shall constitute not only lIeagreemenl of purchase and sale bet Buye and SeIlCf, but also instructions to Escro Holder for t/e consummaton of the Agreeent through theEscrow. Escrow Holder shall not prepare any furter escrow instrctions restating or ameiding the Agreeent unless speifically so instrcted by the Paresor a Broker herein. Subject to the reaonable approal of the Paries, Escrow Hdder may, how, include i1s standard general escrow provisions

PAGE 20F 8

INITIALS INITIAS

ê2003 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM OFA-6-8106E

8.2 As soon as practical afer the reeipt of this Agrement and any reevat ainterer, Escra. Holder shall ascerain th Date of Agreement asdefined in parraphs 1.2 and 20.2 and advise the Pares and Broker, in wring, of the dale ascened.

8.3 EsCro Holder is hery authored and instrcted to coduct the Escro in accodance v.th this Agreent, applicable law ard custom and

practice of the communit in which Escrow Holder is loated, including any reng reuirements of the Interal Revue Code. In the evt of a coflictbetwee the law of the stale wher the Pro is located ard the law of the state wher the Escrr Holder is locate, the law of the state wher the Prois loctedshall prevaiL.

8.4 Subject to satisfaction of the cotingencies hern described, Escro Holder shall close this esClO (the 'Closing') by recoring a gener wartydee (a grant dee in California) and the other documents required to be reced, and by disbursing the funds and documents in accordance wi thisAgreeent.

8.5 Buye and Seller shall each pay one-alf of the Escro HoIdets charges and Seller shall pay the usual reoring fee and any reuiredocumenta traisfer taes. Seller shall pay lIe premium for a stadard covage owets or joint protection poicy of tilfe insurace.

8.6 Escro Holder shall veri thai all of Buyr's contingencies have been satified or wa pri 10 Closing. The matter cotaned in parrahs 9.1subpara9rahs (b), (c), (d), (e), (g), (i), (n), and (0), 9.4, 9.5, 12, 13, 14,16,18,20,21,22, and 24 ar, hor, matter of agreeent bet the Paresonly and ar not instrctions to Escrl Holder.

8.7 If lIis transaction (s terinated for non-satsfacti and non-waiv of a Buyes Contingeny, as defned in paagraph 9.2, then neier of the Paresshall thereaer have any liability to the other under this Agreent, excet to lIe exØft of a brech of any afrmati\e covant or wanty in this Agreement.In the evet of such temination, Buyer shall be promptly refunded all funds deposited by Buy v.th Escra. Holder, less only Title Company and EscroHolder cancellation fees and cots, all cl which shall be Buys obligation. If this transaction is teiinated as a result of Seller's breach of this AgreeØftthen Seller shall pay the Title Company and Escrow Holder cacellatoi fees and costs.

8.8 The Closing shall occur on the Exted Closing Date, or as soa thereafter as the Escro is in condition for Closing; proded, however, that if theClosing doe not occur by the Expected Closing Date and said Date is not exended by mutual instructions of the Partes, a Pary nol then in defaull under thisAgreeent may notify the oter Par, Escro Holder, and Broer, in \/iting that, unless the Closing occurs willin 5 business days folla.ng said notice, theEscrow shall be deeed terinated v.thoot furter notice or instrcUois.

8.9 Excet as otherse proded hern, lIe termination of Escro shall not relieve or reeae eiher Par fro any obligaUon to pay Escrl Holder'sfee and costs or constitute a waver, release or dischare of any breah or defaull that has ocurred in the perorance of lIe ooligalons, agreents,covenants orwalies caitaned therein.

8.10 If thIs Escro is terinated for any reason other than Sellers breah or default, then at Sellets request, and as a condition to the return of Buyetsdepit, Buye shall within 5 day afer wrtten reuest delivr to Seller, at no charge, copies of all survys, engineeng studies, soil reps, maps, masterplans, feasibility studies and other similar ites prepared by or for Buy that pein to the Proper. Provided, howve, that Buye shall not be require todelive any such rep if the wrtten contract which Buyer enter into with the consultant who prear such re speifcally forbids lIe disseminaton ofthe rep to other.9. Conllngençles to ClosIng.

9.1 The Closing of this trasaction is contingent upon the satsfaction or waier of the followng contingencies. IF BUYER FAILS TO NOTIFYESCROW HOLDER, IN WRITING, OF THE DISAPPROVAL OF AN OF SAID CONTINGENCIES WIHIN THE TIME SPECIFIED THEREIN, IT SHALBE CONCLUSIVELY PRESUMED THAT BUYER HAS APPROVED SUCH ITEM, MATTER OR DOCUMENT. Buyes caidilional approv shall constitutedisapprov, unless provsion is made by the Seller wiin the lime specifed therefore by the Buy in such conditonal approv or by this Agreement,whichev is laler, for the satsfaction of the conditon imposed by the Buye. Escrow Holder shall promptly prode all Pares wi copies of any wrendisapprva orconditionaiapprova\vichitreceive_Wilh regard to subparagrahs (a)thr ough (I) the preprinted time periods shall colrolunless adiferenlnumber of days is inserted in the space proded.

(a) Disclosiire. Seller shall make to Buy, IIrogh Escrow, all of the applicable disclosures required by law (See AIR Commercial Rea EstateAssociation ("AIR") standard for entitled "Seller's Mardator Disclosure Statement" and prode Buy v.th a completed Proer Inforation Sheet("Propert Information Sheer) concering the Pro, duly executed by or on behalf of Seller in the current for or equivaent 10 that published by the AIRwiín 10 or ________ days followng the Date of Agreent. Buye has W- 30 days from the receipt of said disclosures to appro or disappro the mattdisclosed.

(b) Physical Inspectin. Buyer has 4G ~ days fro the recpt of the Pro Inforation Sheet or the Date of Agreeent, whichev is

later, to satisfy itel with regar to the physical aspets and size of the Proer.(c) Hazardus Substance Conditns Report. Buye has 30 or days from the receipt of the Properl Inforation Sheet or the Date of

Agreement, whicheve is later, to satisfy itself with regard 10 the enviromental aspets of the Proper. Seller recmends that Buye obtain a HaiousSubstance Conditions Rep concering lIe Properl and relevt adjoining propes. Any such report shall be paid for by Buyer. A 'HaurdousSubstance" for purpses of this Agreeent is defined as any substace whose nature andJor quanti of existence, use, manufacture, dispoal or effect,render it subject to Feder, stale or loc regulation, invetigaton, remediation or reovai as poentially injurious to public heath or weare. A "HazardousSubstClce Condition" for pUfJes of lIis Agreeent is defned as the existence on, under or relevatly adjacelto the Pro of a Haidous Substancethat wold reuire reediation and/or reovl under applicable Feder, state or iocal law_

(d) Soil Inspection. Buyer has 30 or ______. days fro the receipt of the Pro Inforatin Sheet or the Date of Agreent, v.ichever is later,to satsfy itself will regard to the conditon of the soils on the Proper. Seller remends that Buy obn a soil test recr. Any such repcr shail be pad forby Buye_ Seller shall prode Buyer copies of any soils rep that Seiler may hav within 10 days of the Date of Agreent.

(e) Governmental Approvals Buye has 30 or days from the Date of Agreeent to satsfy itself with regard to approvas and pe~sfrom govementa agencies or deparments which have or may hav juridiction ov the Pro and which Buye dee.s necessary a desiraæ in

connection with its intended use of the Pro, including, bu not limited to, perits and approls reuire wit repect to zoning, planning, building andsafety, fire, poice, handicappe and Ameicansllth Disabiiiles Acl requirements, trnspotion ard environmenta mater.

(f) Coodits of rille. Escra. Holder shall cause a curreit commitmØft for title insurance ("TItle CommItment' concering the Pro issued bythe TItle Company, as well as legible copies of a1i document refered to in the Tille Commitment ('UnderlyIng Douments"), and a scaled and dimensionedplot showng Ihe locat of any easements 10 be delivered to Buyer wihin 10 or day follcmng the Date of Agreent. Buyr has -W 30 days frothe rept of the Title Commitment, the Underng Documents and the plot plan 10 satisfy ilseif with regard to the condition of tille. The disappro by Buyeof any monetar Øfcumbrance, which by the ters of lIis Agreeent is not to remain against the Prop afer th Closing, shall not be considered a failure ofthis contingency, as Seller shall ha'o lIe obligatioo, at Sellers expe, to satisfy and reov such disappraed moneta encumbrace at or before theClosing.

(g) Survy. Buy has 30 or ~ days fro the receipt of the Title Commitmenl and Underying Documents 10 satisfy itself wi regard to any

ALTA title supplement based upo a surv prepared to Amercan Lard Title Association ("ALTA') stadards for an ows policy by a licensed surv~r,shcmng the legal description and bondary lines of the Prope, any eaemØfls ri recrd, and any improents, poles, strctures and things located v.thin10 feet of eiher side of the Proper boundar lines. Any such surv shall be prepared at Buyes direti and expØfse_ If Buyer has ootaied a surv andapproed the AL T A title supplement, Buy may elect wiin the peod allci for Buyes approva of a survey to have an AL TA extded covee a.etsform of title poicy, in which evert Buye shall pay any additonal prmium attbutable therto.

(h) Existing Leases and Tenancy Statements. Seler shall within 10 a _ day of the Date of A9reeent prode bol Buy ard EscroHolder wih legible copies of all leases, subleases a rental arangements (collectively. "Exlstlng Leases') afecting the Properl, and v.th a tenancystaterert ('Estoppel Certificate') in the latest form or equivent to that published by !he AIR, exeuted by Seller and/or each tenart and subtenant of theProer. Seller shall use its best efforts to have each tenant coplete and exeute an Estoppe Cerifcate. If aiy tenant fails a refuses to provide an EstoppeCercale then Seller shall complete and execute an Estopel Certcate for that tenancy. Buyer has 10 days fro the rept of said Existing Leases andEstoppel Certficates to satsfy itself wil regard to the Existing Leases and any other tenancy issues.

(i) Other Agreements. Seller shall within 10 or _ days of the Date of Agreemenl provide Buye wi legible copies of all other agreeents("other Agreements") know to Seller that will afecllle Proper after Closing. Buyr has 4.( 30 days from the reipt of said Other Agreents to satisfyitsel with regard to such Agreeents.

UJ Financing. If paragraph 5 hereo deaing with a financing contingency has not be stricken, the satisfaction or wair of such New Loancootingency.

(k) Existing Notes. If paragrah 3.1(c) has not ben strcken, Seller shall wiin 10 or day of the Date of AgreemØft prtNde Buye withlegible copies of the Existing Nots, Existing Dees of Trust and related agreeents (colectiy, "Loan Documents") 10 which the Prope will remainsubject afer the Closing. Escr(M Holder shali proptly request fr the holder of the Exsting Notes a benefciar statement ("Beneficiary Statement'confirming: (1) the amount of the unpaid principal balance, the current interest rate, and the date to which intert is paid, and (2) the nalure and amount of anyimpounds held by the benefciar in coonection with such loa_ Buyer has 10 or days from the rept of the Loa Documents and BeneficiarStatents to satisfy itself with regard to such financing_ Buyers obrigatiOl to close is conditioned upon Buye being able to purchase the Properl withoutacceleration or change in the terms of any Existing Notes or chares to Buy except as ctheise provded in this Agreeent or approed by BUyer, prtNded,

PAGE30F8

INITIALS INITIAS

(£003. AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM OFA-&-8106E

howve, Buyer shall pay Ihe tfnsfer fee refered to in parrah 3.2 hereof.(i) Pen;onaJ Proper. In the evet that any personal prop rs included in the Purchase Price, Buye has 10 Of _ ___ ____ day fro Ihe Date of

Agreeent to satisfy itself wi reard to the tille condit of such peronal proy. Seller reommends that Buyer obtan a UCC-1 repo. Any such rertshall be paid for by Buy. Seller shall prode Buye copies of any liens a- encumbrces afecting such peonal pro that it is aw of within 10 a-

_ days of the Date of Agreeent

(m) Destructin, Damage or Loss. Ther shaJl nol have occurre prior to the Closing, a destrction of, or damage or loss to, tte Proer or anypoion thereo, from any causev.atsoeer, v.ich wold cot mor Ihan $10,000.00 to repair 0. cure. If the cot of repair or cure is $10,000.00 or less, Sellershall reair or cure the loss prior to tte Closing. Buyer shall hav the option, wiin 10 day afer rept of wrttn notice of a loss costing more than$10,000.00 to repair or cure, to either terinate this Agreent or to purchase the Pro nolwhslading such loss, but wiout deduction or offset againstthe Purchase Price. If tte cost to repair or cure rs mor than $10,000.00, and Buyer doe not elec to teminate this Agreent, Buy shall be entied to anyinsurance procees applicable to such loss. Unless oteiwse noted in wrting, Escrow Holder shall assume no such destrction, damage or loss hasocurred pror to Closing.

(n) Materil Change. Buy shall hav 10 days followng receipt of wrtten notice of a Maleial Change wittin \.ich to satisfy itsel wi regar tosuch change. "Material Change" shall mea a change in the status of the use, occupancy, tenants, tille, or condition of the Proper that occurs after the-dateof this ofer an priOf 10 the Closing. Unless oIeise notied in wrting, Escro Holder shall assume that no Materal Change has occurre prior to tteClosing.

(0) Seier Petforance. The deliv of aJl documents and tte due peiormance by Seller of each and eve underaking and agreent to bepenormed by Seller under this Agreent

(p) Waffntis. That each repesentation and warnty of Seler hern be tre and corec as of the Crosing. Escnm Holder shail assume that ttiscondition has bee satisfied unless notified to the cilrary in wrting by any Par prior to tte Closing.

(q) Brokeraga Fee. Payment at Uie Closing of such brokerge fee as is speifed in ttis Agreeent or later Viten instrctions to Escro Holderexeuted by Seller and Broker ("Brokerage Fee"). It is agree by the Pares and Escrow Holder ttat Broker are a third pa beefciar of this Agreeentinsofar as the Brokerage Fee is concered, and that no change shaH be made with repect to the payment of the Broge Fee specified in itis Agreeent,wilhoutthewrltncosentofBroker.

9.2 All of the contingencies specified in subpargraphs (a) Uirough (p) of paagraph 9.1 ar for the beneft of, and may be waied by, Buyer. and may beelsewere herein reered 10 as "Buyer's ContingencIes."

9.3 If any of Buyer's Cootingencies or any other matt subject to Buyes apprl is disapproved as provded for herin in a timel manner("Disapproved Item"), Seller shall have the right wihin 10 day follong the reeipt of notice of Buyes disapprova to elect to cure such Disappro Itemprior to the Expected Closing Date ("Seller's Erectron"). Sellers failure to give to Buyer wiUiin such perod, wrtten nolce it Seller's commitment to cure suchDisapproed Item on or before the Exected Closiog Date shall be coclusivy presumed to be Sellers Election not to cure such Disapprve Item. If Sellerelects, eiher by wrtten notice or failure to give wrttn notice, oot to cure a Disapprove Item, Buy shall have the right, within 10 day after Sellers Erection toeither accept tilie to ite Proper subject to such Disapproved Item, or to terminate this Agreeent. Buyes failure to noti Seller in wrting of Buyes electionto accept title to Uie Proper subject to tte Disapproved Ilem without deduction or ofset shall constiute Buyes election to terminate this Agreeent. Unlesseiiress(y provded otherwse herein, Sellers right to cure shall not apply to Uie remediation of Hazdos Substance Conditions or to the FinancingContingency. Unless the Paries mutually instrct oterse. if the time perods for the satisfaction of cotingencies or for Sellers and Buys elections wouldexpire on a date aferthe Exected Closing Date, ite Exected Closing Date shall be deeed exnded for 3 business days foilolNng the expiration of: (al Iheapplicable contingency perod(s), (b) the perod within which the Seller may elect to cure the Disapprve item, or (c) if Seller elects nol to cure, I!e peodwiUiin which Buye may elect to procee witt this trnsaction, v.icheve is later.

9.4 Buyer understads and agre that until such time as all Buyes Contingencies have been satisfied or wave, Seler and/or its agents may solicit,entern and/or acct back-up ofer to purchase the Propery.

9.5 The Parties acknOYedge that exensive locl, slate and Federal legislation establish brod liabilit upon cmner and/or user of ræl prop for theinvestigaton and remediation of Hazardous Substace. The deterination of Uie e.stence of a Hazrdous Substace Condition and the evaluati of theimpact of such a condition are highly technical and bej-d the exerrse eX Broker. The Pares acknowedge that they have bee advsed by Broker toconsull their ow tehnical and regal exps wih repet to the posible presence of Hazdoos Substaces on the Pro or adjoining propees, andBuye and Seller are not relng upon any invetigation by Of statement of Broer wiUi respect thereto. The Pares hereby assume all reponsibility for tteimpact of such Hazarous Substance upo their repeti interts herein.

10. Documents Required at or Before Closing:10.1 Five days prOf to the Closing date Escrow Holder shaH obtain an updated Tite Commitent cocerning the Prop from the Tilie Company and

provde copies thereof to each of Ihe Parties.10.2 Seller shall delive to Escru Holder in time for deliver to Buye at the Closing

(a) Grat or general waranty dee, duly exeçuted and in recordabe form, cooveying fee title to the Pro to Buye.(b) If applicale, Ihe Benefciar Statements cocering Existing Note(s).(c) If applicable, the Exsting Leases and Other Agreeents together with duly executed assignments ther by Seller and Buy_ The assignment

of Exsting Leaes shall be on Ihemost recent Assignment and Assumption of Lessor's Interest in Lee for published by the AIR or its equivalent.(d) If applicable, Estopel Cercates exeçuted by Seller and/or the tenant(s) of the Proer.(e) An affdavi exute by Seller to the efect itat Seller is not a "foreign person" within the meaing of interal Reveue Code Seti 1445 or

succesor statutes. If Seller doe not prode such afdavt in form reasonably satisfactor to Buyer at leat 3 business days pror to the Closing, EscroHolder shall at the Crosing deduct from Seller's procees and remit to the Intemal Revnue Serce such sum as is required by applicable Federal law wihrespet lopurchases fror forign seller.

(f) If the Pro is locted in Califoria, an afdavi executed by SeHer to the efect that Seller is nol a "nonreident" win the meaing ofCalifornia Revenue and Tax Code Section 18662 or successor statutes. If Seller does nol proe such afdav in for reasonaby satisfacto to Buye atleat 3 business days pror to Uie Closing, Escrow Hoder shall at the Closing deduct fro Seller's procs and reit to the Frachise Tax Bord such sumasis required by such statute.

(g) If applicable, a bill of sale, duty exuted, conveng tilie to aiy included personal pry to Buy(h) if the Seller is a corpotion, a duly exeuted corpte resolution authoring th exeution of Ihis Agreeent and the sale of the Proper

10.3 Buye shall delive to Seller ttrough Escro:(a) The cash poon of the Purchase Price and such additional sums as ar require of Buye under this Agreeent shali be depited by Buy

wi EscrO" Holder, by federal funds wire trsfer, or any other metod acceptale to Escrow Holder in immediately colletable funds, no later than 2:00 P.M.on the business day prior to the Expeted Closing Date.

(b) If a Purchase Money Note and Purchase Money Dee of Trust ar called for by Uiis Agreemenl, Uie duly executed orginals of those documents,the Purchase Money Dee of Trust being in recOfdable for, togeter witt evdence of fire insurace on the improvements in the aTOlt ci the fullreplacement cot naming Seller as a mortgage loss paye, and a rea estate ta serce contract (at Buyes exse). assuring Seller of notce eX the status ofpayment of real prer tax during the life of the Purchase Mcnay Note.

(c) The.A.ssignmen! a'ld ,A.ssumption of Lessors Interest in Lease fcm speifed in paragraph 10_2(c) above, duiy executed by Buye.(d) Assumptirxs duty exeuted by Buy c( the obligations of Seller that accrue afer Closing under any Other Agreements.(e) If applicable, a \Iilten assumption duly executed by Buyr of tte loo documents wilh repect to Existing Noles.(f) If the Buy is a cooration, a duly executed corate resoluton autorzing the execution of this Agreeent aid Uie purchase of the Prort

10.4 At Closing, Escro Holder shall cause to be issued to Buyer a standard coverge (or ALTA exended, if eleced pursuant to 9.1(g)) owers formpolicy of tille insurance effective as of the Closing, issued by the Title Company in Ihe full anount of the Purchase Price. insuring tile to the Prop veted inBuye, subject onty to the exceptions approved by Buyer. In the evetlhere is a Purchase Money Deed of Trust in this trasaction, I!e policy oftille insuranceshall be a joint proection poicy insuring bath Buyer and Seller.IMPORTAN; IN A PURCHAE OR EXCHANGE OF REAL PROPERTY, IT MAY BE ADVISABLE TO OBTAIN TITLE INSURACE IN CONNECTIONWITH THE CLOSE OF ESCROW SINCE THERE MAY BE PRIOR RECORDED LIENS AND ENCUMBRACES WHICH AFFECT YOUR INTEREST INTHE PROPERTY BEING ACQUIRED. A NEW POLICY OF TITLE INSURACE SHOULD BE OBTAINED IN ORDER TO ENSURE YOUR INTEREST INTHE PROPERTY THAT YOU ARE ACQUIRING.11. Prorations and Adjustments.

11.1 Taxes. Applicable rea propery ta and special assessment bonds shail be proted throgh Escro as of the date of the Closing, based uponthe latest tax bil avalable. The Paries agree to prorte as of the Closing any taes assessed against Uie Prop by supplementa bill levi by reason ofevents occurrng prior to Uie Closing. Payment of the proated amount shall be made promptiy in cash upo recpt of a copy of any supplemental bill

1 í.2 Insurance. WARNING: Ary insurance \.ich Seller may have maintaned willtemínate on the Closing. Buyer is advised to obtain apprprateinsurance to cov the Propery.

11.3 Rentals, Interest and Expenses. Scheduled rentals, interest on Existing Notes, utilities, and oprating expenses shali be prorated as of the date ofClosing. The Pwties agree to promptly adjust betwee themselve outside of Escro any rerts receive after the Closing.

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11.4 Securi Depoit SIXUrity Depits hel by Seller shall be give to Buyer as a creit to the cash reuired of Buye at the Closing.11.5 Post CIoÛlg Matters. Any item to be proated thai is not deterined or deterinable at the. Closing shall be proptly adjusted by the Pares by

appriate cash payeit outside of the Escro i.en the amount due is deterined.11.6 Varitions n Exìsüng Nota Balances. In the evt that Buye is purchasing the Proer subject to an Existing Dee of Trust(s), and in the evet

that a Beneficiary statement as to the applicable Exsting Note(s) discloses thatlhe unpaid principa baance of such Exsting Note(s) at th closing will bemixe or less than the amount set fort in pagraph 3.1(c) her ("Existing Nole Variation"), then the Purchase Marey Note(s) shall be reduced orincreased by an amount equal to such Exsting Note Varati. If ther is to be no Purchase Marey Note, the cash require at the Cloing pel paragrcih 3.1(a)shall be reuced or increased by the amount d such Existing Note Varatoo.

11.7 Varioons in New Loan Balance. In the evet Buye is obtaning a New Loa and the amount ultimately obtaned excees the amount set fort inpargrah 5.1, thei the amount of the Purchase Marey Note, if any, shall be reduced by the amount of such exces.12. Represontatlons and WarrntIes of Seller and DIsclaimers.

12.1 SeUers waranties and reresentations shall survve the Closing ard delii.ry of the dee for a peod of 3 ye, and, are tre, mateal and reiedupon by Buyer and Broker in all respets. Seller hereby makes the foHewng warti and reresentations to Buy and Broer:

(a) Autori of Seller. Seller is the ower ct the Pro andfor has the full right, pu and authri to sell, covey and trsfer the Proper toBuye as provded herein, and to perorm Selers obligatons hereundef.

(b) Maintenance During Escro and Equipment Conditn At Cloing. Excet as otherNse prvided in paragrah 9.1 (m) her, Selier shallmaintan !he Proper until the Closing in its present condition, orinar we and tea excepted.

(c) Hazardous Subsfanceslrae Tanks. Seller has no knowedge, excet as otherwse disclosed to Buye in wrting, of the existence or priorexistence on the Proer of any Hazous Substance, nor of the exstence or prior existence of any abve or below grond storae tak.

(d) Compliance. Seller has no knowedge of any aspect or condition of the Pro wtich violates applicale law., rules, reulatons, codes orcoi.nants, conditions or restrctions, or d improveents or alertions made 10 the Pro withou a pemit whele one was required, or of any unfulflledorder or diretiv of any applicale govementa agency or casualty insurance company reuiring any invetigation, reediation, repair, maintenance orimpmi.ment be penored on the Pro.

(e) Changes in Agreements. Prior to the Closing, Seilei will not violate or mocif an Exsting Leae or Oth8l Agreeit, or creae any new leasesor otl8l agreents affecting the Proer, 'NthQU Buys written approv, i.ich appro will not be unreasonably withheld.

(f) Possessor Rights. Seller has no knoViedge that anyoe will, at the Closing, hav any right to posession of Ihe Proper, excet as disclosed bythis Agreeent or oUerse in WTting to Buye.

(g) Mechanics' Uens. The!e are no unsatisfied mechanics' or materal mens' lien rights COceming the Proper.(h) Actions, Suits or Proeedings. Seller has no knoW'edge of any actions, suits or proeedings peding or threatened before an commission,

bord, bureau, agency, aritrator, court or tribunal that wold afect the Propert or the right to occupy or utilize same.(i) Notice of Change. Seller will promptl notif Buye and Broker in wring of any Material Change (see pargraph 9.1(n)) afecting ite Proper

that beces know to Seil8l pror to the Closing.0) No Tenant Bankruptcy Proceedings. Seller has no notice or knovedge that any tenant of the Proer is the subject of a bankrptcy or

insolvecy preeing.(k) No Seller Bankruptcy Proceeding. Seller is not the subject d a bankruptcy, insolvecy or prooate proceeing.(I) Personal Propert. Seller has no knoWedge that anyoe will, at the Closing, have any right to possession of any peronai pro included in the

Purchase Price norknowfedge of any liens or encumbrances afecting such peronal pro, except as disclosed by this Agreeeit or otherse in writing toBuye.

12.2 Buyer hery acknawedges that, except as otherse stated in this Agreeeit, Buy is purchasing the Pro in it existing codition and will,by tte time called for herein, make or have waive all inspections of the Prort Buye believ ar necessar to protl its ow intert in, and its

contemplated use of, the Proper. The Paries acknowedge that, except as othefse state in this Agreent, no representaors, inducemeits, proises,agreents, assuraces, or or wrtten, concering the Proper, or any aspect of the ocupatonal safety and health laws, Hazrdous Substance law, or anyotter act, orinance or law, have bee made by eier Pary or Broer, or relied upo by either Par hereto.

12.3 In the evt that Buye leas that a Seller repreentation or warranty might be untrue prior to the Closing, and Buyer elects to purchase theProp anyy then, and in that evnt, Buye waives any right that it may have to bring an action or procing against SeHef or Broker rearding saidrepresentation orwaanty.

12.4 Ary enviromental reps, soils repor, survys, and other similar documents wtich were preared by third par consultants and provded toBuyer by Seller or Sellers representaes, have bee deliveed as an accommodation to Buy and without any repsentation or waty as to the

sufficiency, accuracy, completeness, andlor validit of said documents, all of which Buye relies on at its ow risk. Seller beiev said documents to beaccurate, but Buye is advised to retan approriate consultats to revew said documeits and investigate the Proper.13. PossessIon.

Possession of the Proprl shall be give to Buy at the Closing subjecttolhe rights d tenants under Exsting Leases.14. Buyets Entr.At any time during Uie Escr(I perod, Buye, and its agents and representatives, shall have Uie right at reaarabfe times and subject to rights of tenants, toente! upon the Properl for the purpose of making inspections and tests speified in this Agreeent No destrctii. testing shall be coducte, howve,without Sellers prior approv which sh~1 not be unreonably withheld. Followng any such aitr or v.k, unless otherse direted in wrting by Sellel, Buyershall retrn the Pro to the codition it was in prior to such entr or wok, including the reompaction or reov of any disrupted soil or materal as Sellermay reonabl direct. All such inspections and tests and any oter wo cooducted or materals furnished wih repect to the Proer by or for Buyer shal bepaid for by Buyer as and Vien due and Buye sheil indemnrt, defend, proect and hold harless Sellei and the Prop of and fram any and all claims,liabilities, losses, expses (including reooable a1tameys' fee), damages, including those for injury to peon or pro, arsing out of or relating to anysuch wor or materials IX the acts or omissions of Buye, its agents or employ in COnecti therh.15. Furter Douments and Assurancss.The Pares shall each, diligently and in goo fait, underke all actins and piedure resonably required to place the EsCl in condit for Closing asand when reuire by this Agreent. The Pares agree to prode all furter information, and to exute and deliver all furter documents, reonablyreuired by Escro Holdef or the Title Company.16. Atorneys' Fees.

If any Par or Broer brings an actior or proeeing (including arbiton) invoving the Pro wIeler founded in tor, contt or eqity, or to declae rightshereundel, Uie Previling Part (as hefear defined) in any such proceeing, action, or appealtherea, shall be ertitied to reasonabe attcmey' fee. Suchfee may be awded in the same suit or recoved in a separate suit, i.ether or not such -ation or proing is pursued to deision or judgmenl- The ter"Prevailng Part shall include, without limittion, a Pary or Broker who substatially obtains or defeats the reief sought, as the case may be, Viether bycomproise, setleent, judgment, or tte abandonment by the other Par IX Broer of its claim or defense. The allomeys' fee award shail nri be computedin accoance wih aiy cort fee schedule, but shall be such as to fuliy reimburse all atlorneys' fees resoablyiriurroo.17. Prior Agreements/Amendments.

;7.; This Agreeent supersedes any and aii pri agreements betwee Seller and Buyer rearding the Prop.17.2 Ameidmerts to this Agreeent ire efective only if made in wrting and executed by Buye and Seller

18. Broker's Rights.

18.1 If this sale is not cosummated due to the default of eittef the Buye or Selier, the defaulting Par shall be liable to and shall pay to Broer theBrokerage Fee that Broker wold have reei had the sale bee corsummated. If Buye is the defaulting part. payment of said Brokerage Fee is in additionto any obligation with respeçt to liquidate or other damages.

1'3. ~~~~;;~~n the Closing, Broker are authorii:ed to publicii:e the facts of this transaction19.1 Wheneve any Pary, Escrow Hoidef or Brokers herein shail desire to give or ser any notice, demand, request, approval, disapprova or other

communication, each such comunication shall be in writing and shall be deliveed pelsonally. by messengef or by mail, potage prepaid. to tte addres setfort in this Agreereitor by facsimile trasmission.

19.2 Serce of any such comunication shail be deemed made on the date of actual reipt if peronally deliveed. Any such communication sent byregular mail shail be deeed give 48 hours after the same is mailed. Communicatons sent by United States Exress Mail or ovight courier that guarateenext day delive shaJi be deeed delivered 24 hours aft8l delive of the same to the Posta Sefce or corier. Communicatons tras milled by facsimiletransmission shall be deeed deliv8led upo telephonic confrmation of receipt (confirmation rep from fax machine is sufcient), proded a copy is alsodeliveed via delive or maiL. If such comunication is receive on a Saturday, Sunday or legal holiday, it shall be deemed received or the nex business day.

19.3 Ary Par or Broker heleto may from time to time, by notice in wrting, designate a diferent addres to Viich, Of a diffeleit peron or additionalperons to whom, all communications are thereater to be made.20. Duration of Ofer.

20.1 If this ofef is not accepted by Seller on or before 5:00 P.M. according to the time standard applicable to the city of

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Los Anqeles on the date of Monday, September 10, 200~7__.it shall be deemed autoatcally reed.

20.2 The acceptance d Uiis offer, or of any subsequent counterffer hereto, that crees an agreent betwee the Pares as describe in pargraph1.2, shall be deeed made upon deliv to Uie oter Par or either Broker herein of a duly exeçuted wriing unconditionally acceting tte last outstadingoffer or counterer.21. LIQUIDATED DAMAGES. lThls Liouidated Damaoes DaraaraDh is aDDllcable onlv if Initialed bv bath Parties).THE PARTIES AGREE THAT IT WOULD BE IMPRACTICABLE OR EXREMELY DIFFICULT TO FIX, PRIO'R TO SIGNING THISAGREEMENT, THE ACTUAL DAMAGES WHICH WOULD BE SUFFERED BY SELLER IF BUYER FAILS TO PERFORM ITSOBLIGATIONS UNDER THIS AGREEMENT. THEREFORE, IF, AFTER THE SATISFACTION OR WAIVER OF ALLCONTINGENCIES PROVIDED FOR THE BUYER'S BENEFIT, BUYER BREACHES THIS AGREEMENT. SELLER SHALL BEENTITLED TO LIQUIDATED DAMAGES IN THE AMOUNT OF $25, O.QP_:.()_'l_. UPON PAYMENTOF SAID SUM TO SELLER, BUYER SHALL BE RELEASED FROM ANY FURTHER LIABILITY TO SELLER, AND ANY ESCROWCANCELLATION FEES AND TITLE COMPANY CHARGES SHALL BE PAlO BY SELLER.

Buyer Initals SellerlnlUals

22. ARBITRATION OF DISPUTES. (This Arbitration of Disputes paragraph is applicable only if initialed by both Parties.)22.1 ANY CONTROVERSY AS TO WHETHER SELLER IS ENTITLED TO THE LIQUIDATED DAMAGES ANDIOR BUYER IS

ENTITLED TO THE RETURN OF DEPOSIT MONEY, SHALL BE DETERMINED BY BINDING ARBITRATION BY, AND UNDER THECOMMERCIAL RULES OF THE AMERICAN ARBITRATION ASSOCIATION ("COMMERCIAL RULES"). ARBITRATION HEARINGSSHALL BE HELD IN THE COUNTY WHERE THE PROPERTY IS LOCATED. ANY SUCH CONTROVERSY SHALL BE ARBITRATEDBY 3 ARBITRATORS WHO SHALL BE IMPARTIAL REAL ESTATE BROKERS WITH AT LEAST 5 YEARS OF FULL TIMEEXPERIENCE IN BOTH THE AREA WHERE THE PROPERTY IS LOCATED AND THE TYPE OF REAL ESTATE THAT IS THESUBJECT OF THIS AGREEMENT. THEY SHALL BE APPOINTED UNDER THE COMMERCIAL RULES. THE ARBITRATORSSHALL HEAR AND DETERMINE SAID CONTROVERSY IN ACCORDANCE WITH APPLICABLE LAW, THE INTENTION OF THEPARTIES AS EXPRESSED IN THIS AGREEMENT AND ANY AMENDMENTS THERETO, AND UPON THE EVIDENCE PRODUCEDAT AN ARBITRATION HEARING. PRE-ARBITRATION DISCOVERY SHALL BE PERMITTED IN ACCORDANCE WITH THECOMMERCIAL RULES OR STATE LAW APPLICABLE TO ARBITRATION PROCEEDINGS. THE AWARD SHALL BE EXECUTEDBY AT LEAST 2 OF THE 3 ARBITRATORS, Bi: RENDERED WITHIN 30 DAYS AFTER THE CONCLUSION OF THE HEARING,AND MAY INCLUDE ATTORNEYS' FEES AND COSTS TO THE PREVAILING PARTY PER PARAGRAPH 16 HEREOF. JUDGMENTMAY BE ENTERED ON THE AWARD IN ANY COURT OF COMPETENT JURISDICTION NOTWITHSTANDING THE FAILURE OF APARTY DULY NOTIFIED OF THE ARBITRATION HEARING TO APPEAR THEREAT.

22.2 BUYER'S RESORT TO OR PARTICIPATION IN SUCH ARBITRATION PROCEEDINGS SHALL NOT BAR SUIT IN ACOURT OF COMPETENT JURISDICTION BY THE BUYER FOR DAMAGES AND/OR SPECIFIC PERFORMANCE UNLESS ANDUNTIL THE ARBITRATION RESULTS IN AN AWARD TO THE SELLER OF LIQUIDATED DAMGES, IN WHICH EVENT SUCHAWARD SHALL ACT AS A BAR AGAINST ANY ACTION BY BUYER FOR DAMAGES AND/OR SPECIFIC PERFORMANCE.

22.3 NOTICE: BY INITIALING IN THE SPACE BELOW YOU ARE AGREEING TO HAVE ANY DISPUTE ARISING OUT OF THEMATTERS INCLUDED IN THE "ARBITRATION OF DISPUTES" PROVISION DECIDED BY NEUTRA ARBITRATION ASPROVIDED BY CALIFORNIA LAW AND YOU ARE GIVING UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE DISPUTELITIGATED IN A COURT OR JURY TRIAL. BY INITIALING IN THE SPACE BELOW YOU ARE GIVING UP YOUR JUDICIALRIGHTS TO DISCOVERY AND APPEAL, UNLESS SUCH RIGHTS ARE SPECIFICALLY INCLUDED IN THE "ARBITRATION OFDISPUTES" PROVISION. IF YOU REFUSE TO SUBMIT TO ARBITRATION AFTER AGREEING TO THIS PROVISION, YOU MAYBE COMPELLED TO ARBITRATE UNDER THE AUTHORITY OF THE CALIFORNIA CODE OF CIVil PROCEDURE. YOURAGREEMENT TO THIS ARBITRATION PROVISION IS VOLUNTARY.

WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES ARISING OUT OF THE MATTERSINCLUDED IN THE "ARBITRATION OF DISPUTES" PROVISION TO NEUTRAL ARBITRATION.

Buyr Inftals Se/lerln/flats

23. MIscellaneous.

23.1 Binding Effect. This Agreeent shal be binding on the Paries v.Uiout reard to wheter or not parraphs 21 and 22 are initialed by bo oftte Pares. Pargrapls 21 and 22 are each incorpoated into this Agreent only if initialed by both Pares at Uie time ttal tte Agreent is exeuted.

23.2 Applicable Law. This Agreeent shall be govmed by, and pargraph 22.3 is amended to refer to, th law of the state in which tte Prop islocted.

23.3 Time of Essence. Time is of Uie essence of this Agreeent23.4 Counterparts. This Agreement may be exeuted by Buye and Seller in counterar, each of which shall be deeed an oiginal, and all of

which together shall constitute one and tte same instrumefl. Escrow Holder, afer verng that the conterars are ideflical except for the signatures, isautorzed and instructed to combine the signed signature pages on one of the counterpart, which shall then constiute the Agræmeft.

23.5 WaIver otJury TrIal. THE PARTIES HEREBY WAIE THEIR RESPECTIVE RIGHTS TO TRIA BY JURY IN ANY ACTION ORPROCEEDING INVOLVING THE PROPERTY OR ARISING OUT OF THIS AGREEMENT.

23.6 Conflct. Any connict betwee the printed prosions á this Agræment and the tyewller or handwllen provisions shall be cotroled

by the typtlef orhandwrtlen provisions.23.7 1031 Exchange. Both Seller and Buye agree to coote with eah otter in Uie event ttat eiter or bott v.sh to parcipate in a 1031 exchange.

Any partinflating an exchange shall bear ail costs of such exchange

24. Disclosures Regarding The Nature of a Real Estate Agency RelaUonshlp.24.1 The Paries and Brokers agree that their relationship(s) shall be gowrned by the principles sel for in the applicable seçtions of the California Civil

Cooe.assummarizedinpargrapl24.2.24.2 When enterng into a discussion v.tt a real estate agent regaring are estate transaction, a Buyr or SeHer should frCl the outsel understand

what ty of agency relationship or repreentation it has witt the agent or agents in the transaction. Buye and Seller acknovedge beng advised by UieBroker in this transaction, as follow:

(a) Seller's Agent. A Sellers agent under a listing agreElert with the SeHer acts as tte agent for tte Seller only. A Sellers agent or subagent hasthefollaing affmiativ obligations: (1) To the Seller: A fiduciar duty of utmost care, integrity, horesty, and loyaty in deaings wih the Seller. (2) To the Buyerand the Seller: a. Diligent execise of reasonable skills and care in penormance of the agenls duties. b. A duty of honest and fair dealing æd goo fai. c. Aduty to disclose all facts knCHn to tte agent materally affecting tte vaue or desirability of Uie proer that are not know to, or wittin the diligent attention andobservtion of, the Partes. An agent is not obigaled to revea to eiher Par any confidential inforation obtained from tte other Part v.ich does not invovethe affrmatiw duties set forh above.

(b) Buyer's Agent. A selling agent can, with a Buyes consent, agree to act as agerit for the Bu~ only. In these situations, Uie agent is not the

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~2003. AIR COMMERCIAL REA ESTATE ASSOCIATION FORM OFA-6-aI06E

Sellets agent, ewr if by agreeent the agent may receive copensation for serces rendered, eiller in full or in par from Ile Seller. An agent acting only fora Buyer has the followng afnnal obligatiais. (1) To the 8lyer: A fiduciary duty of utost care, integrity, honesty, and loyty in deaings wit the Buyer. (2)To the Buyer and the Seller: a. Diligent excise of reasonable skills and care in peance of Ile agenls duties. b. A duty of honest and fair deaing andgoo faill. c. A duty to disclose all facts knCM to Ile agent materially affecng Ile value or desirailit of Ile prop Ilat are not kncr to, or Yothin Iledilgent attention and obseition of, Ile Pares. An agent is not obligate to rev to eier Par any cofidentia inforation obtaned from the other Parwhich doe not invove the afnnatie dutes set forh abO'e.

(c) Agent Reprsenfng Both Sefler and Buyer. A rea estate agent, eiter acting directly or Ihrough one or mor associat licenses, ca legally beIhe agent of both lhe Seller and Ihe Buyer in a trasaction, but only Yolh lhe knowedge and consent of both the Seller and the Buy. (1) In a dual agencysituation, the agent has Ihe followng afrmati obigatons to both lhe Seller and the Buye: a. A fiduciar duty of ulmost car, integrity, honesty ard loty inthe deaings with eiher Seller or the Buye. b. Other duties to the Seller and lhe Buy as stated abve in lheir respetive sections (a) or (b) of this pargraph24.2. (2) In representing bot Seller and Buye, Ihe agent may not v.thoutthe exress perissio cl the repetive Par, discl05e to lhe other Par thatlleSeller will accept a price less than Ile listing price or that the Buye Yoll pay a price greaer Ihan lhe price ofered. (3) The abve duties of Ile agent in a realestate transaction do not relieve a Seller or Buye fro the responsibilit to prtectthelr a. intersts. Buyer and Seller should caefully red all agreeents toassure that lhey adequatel expres Ileir undertading of the trsacton. A real estate agent is a peon qualffed to advise about real estate. If legal or taadvce is desire,consullacopetentproessiooal.

(d) Furtrir Disclosures. Throghoot this trnsaction Buye and Seler may recei more Ilan OIe disclosure, depending upo th number of agentsassisting in Ile transaction. Buyer and Seller should each read its contents each time it is presented, cOlsiderng the reatioiship bet them and the realestate agent in Ihis transaction and that d~ciosure. Bro have no reponsibility will repet to any default or breach here by eier Par. The Paresagree that no lawuit or other legal proeeing involng any breach of duty, eror or omission relating to this transactilX may be broght against Brokei morthan one year after the Date r: Agreement and that the liability (including court costs and atOfneys' fee), of any Broker wih respect to any breach of duty,error or omission reating to this Agreent shall not excee Ihe fee reeive by such Broker pursuant to Ilis Agreent; proded, howeve, lhat lhe foregoinglimitation OI each Brokets liablit shall not be applicable to any gros negligence or Yollfl misconduct of such Broker.

24.3 Confienlial/nfoatin: Buye and Seller agree to identi to Broer as "Confidentiar any comunication or information giv Broker that is

coosidered by such Par to be confidential.25. Construction of Agreement. In construing this Agreeent, all headings ard tiUes are for the covejence of lhe Partes only and shall not becoisider a part of this Agreent. Wheneve reuired by the contex the singular shall include Ihe plural and vice \la. Unless olheise speffcallyindic:ted to lhe contrar, the wor "days" as used in this Agreent shall mea and refer to calendar day. This Agreement shall not be constred as ifprepared by one of lhe Pares, but rather accoring to its fair meaning as a whole, as if both Pares had prepared it.26 AddlUonal ProvIsIons:

Additional provisions of this offer, if any, are as follON or are attached hefeto by an addendum consisting of paragrahs __

through (If there are no additional provsions wrte "NONE".)

~L Not forqoinq_.the dislclosures..-lequired in this Aqreement, _t.h_e Seller shal1 submitto Buyer the_ followinq within ten (10) d¡;ys followinq d¿;te of Escrow t-he followinq i-t init_s--0ssession arid in relation t.()__~ Property:. copies of alL.utility bill_",_ expense

!:ep().l:ts, tax bill~__a.nd any ol:her ciocumentation_of bill or expens_~_ for the past twelve~~ths; copies of 7.005, 2006 and._r~~r-to-Date ~~ofit and Loss st?tements; warranties forbui~ginq improvements, utility inst~ilations, an~ services; environmental su~yeys orstudies; all__correspondence_ relatinG to the Property; c()ntracts; aGreenients; studie_s;

plans; records; and permi~s.

26.2 rh~_Auyer, at its sale discretio~, will have the riGht to obta~ financing from al~~der of i ts chaJc~ in lieu of Seller Finan~lnq referenced in Paraqraph 6 in any timeg~_r.inq this Escrow or durina the_ Seller FinancjTiq period.

!ATTENTION: NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE AIR COMMERCIA REA ESTATE ASSOCIATION OR BY ANY

L~~OKER AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF THlS AGREEMENT OR THE TRANSACTION TOIwHICH IT RELATES. THE PARTIES ARE URGED TO:

1. SEEK ADVICE OF COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS AGREEMENT.. RETAIN APPROPRTE CONSULTANTS TO REVIEW AND INVESTIGATE THE CONDITION OF THE PROPERTY. SAID INVESTIGATION

§~OULD INCLUDE BUT NOT BE LIMITED TO: THE POSSIBLE PRESENCE OF HAARDOUS SUBSTANCES, THE ZONING OF THE PROPERTY,HE INTEGRITY AND CONDITION OF ANY STRUCTURES AND OPERATING SYSTEMS, AND THE SUITABILIT OF THE PROPERTY FOR

BUYER'S INTENDED USE.

!wARNING: IF THE PROPERTY IS LOCATED IN A STATE OTHER THA CALIFORNIA CERTAIN PROVISIONS OF THIS AGREEMENT MAY NEEDIT-õ BE REVSED TO COMPLY WIH THE LAWS OF THE STATE IN WHICH THE PROPERTY IS LOCATED.

NOTE:i.2.

uFFiCERS.The undersigned Buyer offers and agrees to buy the Propert on the term and conditions slated and acknowledges receipt of a copy hereof.

THIS FORM IS NOT FOR USE IN CONNECTION WIH THE SALE OF RESIDENTIAL PROPERTY.IF THE BUYER IS A CORPORATION, IT IS RECOMMENDED THAT THIS AGREEMENT BE SIGNED BY TWO CORPORATE

PAGE70F8

INITIALS INITIAS

~003 - AIR COMMERCIAL REA ESTATE ASSOCIATION FORM OFA-S-8/06E

BROKER: BUYER:

RAl1~i-Commercia1,_ R_E:.§l Estate Traveler's Aid Society of Los Anq~E:~._and/or Assiqnee (s)

Attn: Nic:~ßihal~_aTite: Vice PresidentAddress:3400 W. Olive Avenue Suite 330Burbank, CA 91505Telephooe:(..) 333-2210Facsimile:(~)333-2211Em¡iil:nicole .miha1kaêdaumcommer_c),91.. s:g!!__ ___FederiDNo.

B,Dale:Name Printe:Tille:

Telephone:(_) Q0._t Ll.aFacsimile:( )

w.l_t-h-l-rok~______

B,Date:Name Printe:Title:

Address: on file wi th broker

Telephore(Facsimile:(_)Email: ----FederlD No.

27. Acceptance.

27.1 Seller accepts the foregoing offer to purchase Ihe Proprt and hereby agree 10 sell the Proer 10 Buyer ai the lers and coditons thereinspecifed.

27.2 Seller acknowedges thaI Broer have bee retained to locle a Buye and are the prouiing caise of the purchase and sale of the Pro setforth in Ihis Agreement. In consideraion of rea eslate brokerage sefce redere by Broer, Seller agree to pay Broker a real estale Brolæge Fee in asum equal to 5 % of the Purchase Price 10 be divded equally betwen SeHers Brder and Buyers Braoer. This Agreeenl shaH serve as anirrevoable instrucl¡oolo ÉscrOl Holder to pay such Brokee Fee to Broer out of the procees accnJing 10 the accounl of Seller at the Closing.

27.3 Seller ackno\\edges receipl ofa copy hereo and authorze Brokers 10 deliver a signed copy to Buyer.

NOTE: A PROPERTY INFORMATION SHEET IS REQUIRED TO BE DELIVERED TO BUYER BY SELLER UNDER THIS AGREEMENT.

BROKER: SELLER:

Marcus and Mi 11 ichap ACP 1509 Winona LLC

Attn: Ale~..zak0'vLSteve SteinHie:Address: 915 Wilshire Blvd., Suite 1700Los Anqeles, CA 90017Telephone:(£U) 607-5056Facsìmile:(_)_EmaiJ:akoz.~Ii?y.êrntìrcusmi -llichap. com

FederailD No.:

B,Dale:Name Prinled.Tille:

Telephone (

Facsimile:(I

I

B,Dale:

Name Prinled:Title:

Address:

Telephone:(__ _)Facsimile:( )Email:

FederailD No.:

NOTICE: These fonns are often modified to meet changing reiulrements gf law and industry needs, Alwiis wrile or call to make sure you areutilizing the most current form: AIR Commercial Real Estale Association, 800 W 6th Street, Suite 800, Los Angeles, CA 90017. Telephone No.

(213) 687-877. Fax No.: (213) 687-8616.

rg Copyright 2003 By AIR Commercial Real Estale Association.

All rights reserved.

No part of these works may be reproduced in any fonn without pennlsslon In wntfng.

PAGES OF 8

INITIALS INITALS

(92003 - AIR COMMERCIA REA ESTATE ASSOCIATION FORM OFA-6-8/06E

EXHIBIT BTO AGREEMENT

LEGAL DESCRITION AND SITE MAP

See Attached

SCHEDULE A

Order No: 76063543 AOI Your Ref: 9401610

1. The estate or interest in the land hereinafer described or referred to covered by tbi report is:

A FEE

2. Title to said estate or interest at the date bereof is vested in:

ACP 1509 WINONA LLC, A CAIFORNIA LIMITED LIABILITY COMPAN

ri ;.! Ji1-,

3. The land referred to in this report is situated in tbe State of Calorna, County of LOS ANGELES

and is described as follows:

THE NORTHERLY 50 FEET OF THE SOUTHERLY ILL FEET OF LOT 9 AN THE EATERLY 5FEET OF THE NORTHERLY 50 FEET OF THE SOUTHERLY ILL FEET OF LOT 10 OF WATERLOOPLACE, IN THE CITY OF LOS ANGELES, COUNY OF LOS ANGELES, STATE OFCALIFORNIA, AS PER MA RECORDED IN BOOK 9 PAGE 136 OF MAPS, IN THE OFFICE OFTHE COUN RECORDER OF SAID COUN.

PREA .10!31/97bk

ATTACHMENT "A"Site Map

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PROJECT SITE1507-09 Winona Blvd

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ATTACHMENT 1 TO EXHIBIT B

(LEGAL DESCRIPTION)

ASSESSOR'S IDENTIFICATION NUMBERS: 5544015037

COMMON ADDRESS:1507-1509 Winona BoulevardLos Angeles, CA 90027

BORROWER/OWNER: Travelers Aid Society of Los Angeles

Travelers Aid Society of Los Angeles, California, is a 501(c)(3), nonprofit corporation, whose headquarersis in Hollywood, California, providing counseling services to youths and adults, as well as HIV counselingand education, and emergency food and shelter, and volunteer services.

(J

EXHIBIT CFORM OF AGREEMENT CONTAING COVENANTS

(FORM OF AGREEMENT CONTAING COVENANTS)

NO FEE DOCUMENTRecording requested by andwhen recorded, mail to:

The Community Redevelopment Agencyof the City of Los Angeles, California

354 South Spring StreetLos Angeles, CA 90013Attn:~~i\.Iot?*~".\Q~

Assessor's Identification Number:

AGREEMENT CONTAINING COVENANTS AFFECTING REAL PROPERTY(Loan # 876006-001)

This AGREEMENT CONTAIING COVENANTS AFFECTING REAL PROPERTY ("CovenantAgreement") is made this 6th day of December, 2007, by and between the Community RedevelopmentAgency of the City of Los Angeles, a public body, corporate and politic (the "Agency"), and Travelers AidSociety of Los Angeles, California, a California non-profit corporation. ("Owner").

RECITALS

A. The Agency wishes to promote the redevelopment of its East Hollywoodleverly NormandieEarthquake Disaster Assistance Project Area through the establishment of a new social service facilityproviding aid and assistance to homeless and runaway youth in the Los Angeles community.

B. Owner has acquired the real property located at 1507-1509 Winona Boulevard, Los Angeles, CA90027 (as more particularly described in Exhibit A) (the "Property") for the operation of a Social ServiceCenter providing social services to homeless and runaway youths in the community.

C. Owner has received a loan of Agency tax increment fuds in the amount of Eight HundredSixty Four Thousand Dollars ($864,000.00) from the CRAA, for the acquisition of the Property ("CRA/ALoan").

D. As a condition of the Agency Loan, Owner shall execute, among other things, a Note, a Deedof Trust, and this Covenant Agreement, of which the Deed of Trust, and Covenant Agreement shall berecorded against the Property. These instruments are intended to secure Agency's continuing interest in theaffordability and habitability of the Project, as well as to secure performance of other covenants contained inthese agreements.

F. The purpose of this Covenant Agreement is to regulate and restrict the operation, ownership,and management of the Property. The covenants in this Covenant Agreement are intended to run with theland and be binding on Owner and Owner's successors for the full term of this Covenant Agreement.

NOW THEREFORE, IN CONSIDERATION of the mutual agreements, obligations, andrepresentations, and in further consideration for the aforementioned funding, Owner and Agency herebyagree as follows:

DEFINITIONS

The following terms have the meanings and content set forth in this section wherever used in thisCovenant Agreement or attached exhibits.

1. "CRAA" means the Community Redevetopment Agency of the City of Los Angeles,

California, a public body, corporate and politic, exercising governental functions and powers, andorganized and existing under Chapter 2 of the Community Redevelopment Law of the State of California andits authorized representatives, assigns, transfers, or successors-in-intercst thereto. The principal offce of

the

Agency is located at 354 South Spring Street, Suite 800, Los Angeles, California 90013.

2. "CRAA LOAN" is any loan of funds provided by the Agency to Owner for the Project.

3. "CITY" is the City of Los Angeles, a municipal corporation, and its offcers, offcials,directors, employees, agents and authorized representatives.

4. "DEED OF TRUST" means any deed of trust, assignment ofrents, and security agreement

placed on the Property as security for any Agency Loan and other obligations with Owner as trustor and theAgency as beneficiary, as well as any amendments to, modifications of, and restatements of said deed(s) oftrust.

5. "ELIGIBLE COSTS" means those costs for which Agency Loan proceeds may be used asspecified in the Loan Agreement, and any revisions to the Loan Agreement that are approved in writing bythe Agency. In addition, other items may be Eligible Costs if approved in writing by Agency.

6. "ELIGIBLE SERVICES" means transportation assistance; social casework; basic needssupports for families, adults, and children and other similar services.

7. "LOAN AGREEMENT" means the loan agreement(s) executed concurrently with thisCovenant Agreement by Owner and the Agency which governs the Agency Loan, as well as any amendmentsto, modifications of, or restatements of said loan agreement(s).

8. "LOAN DOCUMENTS" are collectively the Loan Agreement, Note, Deed of Trust, andthis Covenant Agreement as they may be amended, modified, or restated from time to time, along with allexhibits and attachments to these documents.

9. "NOTE" means any promissory note executed by Owner in favor of the Agency evidencing

any part of the Agency Loan, which is secured by the Deed of Trust, as well as any amendments to,

modifications of, or restatements of said promissory note.

10. "OWNER" is Travelers Aid Society of Los Angeles, California, a California non-profitcorporation and its authorized representatives, assigns, transferees, or successors-in-interest thereto.

11. "PROJECT" means the acquisition, rehabilitation, and operation of the Property for EligibleServices according to the terms of the Loan Agreement and the Covenant Agreement.

12. "PROPERTY" means the real property described in the attached Attachment 1, which ishereby incorporated into this Covenant Agreement by this reference, and any buildings or Improvements nowor hereafter situated on said real property.

OWNER'S OBLIGATIONS

13. COMPLIANCE WITH AGENCY LOAN DOCUMENTS. Owner's actions with respect tothe Property and the use of Agency Loan funds shall at all times be in full conformity with all of

the

requirements of the Loan Documents, including without limitation the Housing Management Requirements.In the event of any conflict between the terms of the Housing Management Requirements and this CovenantAgreement, the terms of this Covenant Agreement shall prevaiL.

14. TERM OF AGREElVíENT. This Covenant Agreernent shall cûmmence üpûn execution andshall remain in full force through January 1,2038 (approximately thirty (30) years from the date of

this

occupancy for the Improvements), regardless of any expiration of the term of any Agency Loan, any paymentor prepayment of any Agency Loan, any assignent of a Note, any reconveyance of a Deed of Trust, or anysale, assignment, transfer, or conveyance of the Property, unless terminated earlier by the Agency in writingor extended by the mutual consent of the parties. However, failure to record this Covenant Agreement or thecertificate by the Agency shall not relieve Owner of any of the obligations specified herein.

15. OPERATION OF PROPERTY. Owner and its agents shall operate and manage theProperty after completion in full conformance with the terms of the Covenant Agreement. Owner agrees tomaintain and operate the Property so as to provide Eligible Services in a decent, safe, and sanitar manerand in full compliance with all local and federal laws.

16. LEASING THE PROPERTY. Before leasing any portion of the Property, Owner shall

obtain written approval from the CRALA and shall submit its proposed lease for CRALA's review andapproval.

17. NONDISCRIMINATION. Owner shall not discriminate or segregate in the use, enjoyment,occupancy, conveyance, lease, sublease, or rental of the Property on the basis ofrace, color, ancestry,national origin, religion, sex, sexual preference, age, marital status, familial status, source of income,physical or mental disability (actual or perceived), Acquired Imune Deficiency Syndrome (AIDS) orAIDS-rclated conditions (ARC), or any other arbitrary basis.

PROPERTY MANAGEMENT

is. MANAGEMENT RESPONSIBILITIES. Owner is specifically responsible, subject to itsobligations herein, for all management functions with respect to the Property, including without limitationthe selection of clients, certification and recertification of eligibility for services, maintenance, landscaping,routine and extraordinary repairs, replacement of capital items, and security. The Agency shall have noresponsibility over management of the Property.

19 MANAGEMENT ENTITY. The Agency shall have the right to review and approve anyentity chosen by Owner for the management of any function of

the Property and the right to require a change

in the management agent at any time during the term of this Covenant Agreement. Any contracting of

management services by Owner shall not relieve Owner of its primar responsibilities for properperformance of management duties.

20. FINAL MANAGEMENT PLAN. At least ninety (90) calendar days prior to completion ofrehabilitation of the Project, Owner shall submit to the Agency for review and approval a plan for managingthe Property (the ¡¡Final Ivlanagement Plan"). The Plan shall address in detail the nature of the services to beprovided by the Owner and how the Owner plans to market the availability of Project to potential clients.

The Plan shall also address how the Owner plans to manage and maintain the Property, and shall includeappropriate financial information and documentation. Owner shall abide by the terms of this Plan in

marketing, managing, and maintaining the Property.

21. MAINTENANCE AND SECURITY. Owner shall at its own expense maintain the Propertyin good condition, in good repair, and in decent, safe, sanitary, habitable and tenantable living conditions forthe benefit of Project clients. Owner shall not commit or permit any waste on or to the Property, and shallprevent and/or rectify any physical deterioration of the Property. Owner shall provide adequate ongoingsecurity equipment and services for Project occupants. Owner shall maintain the Property in conformancewith all applicable state, federal, and local laws, ordinances, codes, and regulations and the FinalManagement Plan; but Owner's maintenance obligations shall not be limited only to the standards containedin these laws or the Final Managemcnt Plan.

In the event that Owner fails to maintain the Property in accordance with these standards and after atleast ten (10) business days prior notice to Owner, the Agency or the Agency's contractor or agent may, butshall be under no obligation to, enter upon the Property, make such repairs or replacements as are deemednecessar in the Agency's discretion, and provide for payment thereof. Any amount advanced by the Agencyto make such repairs, together with interest thereon from the date of such advance at the same rate ofindebtedness as specified in the Note (unless payment of such an interest rate would be contrar to applicablelaw, in which event such sums shall bear interest at the highest rate then allowed by applicable law), shallbecome an additional obligation of Owner to the Agency and shall be secured by any Deed of

Trust, if not

previously reconveyed.

22. INSPECTION AND RECORDS. Owner shall maintain records which clearly documentOwner's performance of its obligations to operate the Property under the terms of this Covenant Agreement.Owner shall submit any records"to the Agency within ten (10) business days of

the Agency's request. Owner

shall pcrmit the Agency to enter and inspect the Property for compliance with obligations under thisCovenant Agreement upon 24 hours advance notice to Owner or Owner's management agent of such visit bythe Agency, or such other notice or may be required by law. Owner's rental agreements with the tenants ofthe Project shall also provide for periodic inspection of

the Project units for health and safety reasons.

23. FEES, TAXS, AND OTHER LEVIES. Owner shall be responsible for payment of allfees, assessments, taxes, charges and levies imposed by any public authority or utility company with respectto the Property, and shall pay such charges prior to delinquency.

24. INSURACE COVERAGE. Owner shall cause to have in full force and effect during thetcrm of this Covenant Agreement insurance coverage as required by the Loan Agreement, which insurancerequirements hereby incorporateà by reference into this Cøvenant Abi eement.

25. PROPERTY DAMAGE OR DESTRUCTION. If any building or improvements erected byOwner on the Property shall be damaged or destroyed by an insurable cause, Owner shall, at its own cost andexpense, diligently repair or restore the Property consistent with the original Plans and Specifications for theProject. Such work or repair shall be commenced within one hundred twenty (120) days after the damage orloss occurs and shall be completed within one (i) year thereafter. All insurance proceeds collected for suchdamage or destruction shall be applied to the cost of such repairs or restoration and, if such insuranceproceeds shall be insuffcient for such purpose, Owner shall make up the deficiency. Owner shall not, byagreement or otherwise, permit any other party or lender to use insurance proceeds in a manner inconsistentwith the intent and/or language of this section and the Loan Agreement.

26. HAZAROUS MATERIALS Owner shall comply with all of the obligations contained in

any Loan Agreement with respect to Hazardous Materials.

GENERAL PROVISIONS

27. SUBORDINATION. This Covenant Agreement shall be subordinated in priority only to theliens and encumbrances approved by the Agency in the Loan Agreement or otherwise in writing by theAgency in its sole and absolute discretion, provided such subordination complies with the CommunityRedevelopment Law.

28. TRANSFER AND ENCUMBRANCE OF PROPERTY. During the term of this Covenant

Agreement, Owner shall not make or permit any sale, assignent, conveyance, lease, or transfer of theProperty or any par thereof, without the prior written consent of

the Agency. The Agency may give its

consent to a sale, transfer, or conveyance provided that all of the following conditions are met: (a) Developer

is in compliance with the Loan Documents, or the sale, transfer, or conveyance wil result in the cure of anyexisting violations of the Loan Documents; (b) the proposed transferee enters into a written assignment andassumption agreement, in a form and content reasonably satisfactory to Agency's legal counsel, assuming allobligations of Developer imposed by the Agreement Containing Covenants and other Loan Documents, and,if requested by Agency, provides an opinion of such transferee's counsel to the effect that this Agreement andthe Agreement Containing Covenants are valid, binding and enforceable obligations of such transferee,subject to bankruptcy and other standard limitations affecting creditor's rights; (c) the transferee demonstratesto the Agency's satisfaction that it is capable of and intends to own and operate the Site in full compliancewith the Agreement Containing Covenants and the other Loan Documents; (d) the transferee demonstratesone ofthe following: (i) the transferee or its property manager has at least three year's experience in theownership, operation and management of similar size rental housing projects, and at least one year'sexperience in the ownership, operation and management of

rental housing projects containing below-market-

rate units, without any record of material violations of discrimination restrictions or other state or federallaws or reguiations or iocal govemrnental requirements applicable to such projects, or (2) the transfereeagrees to retain a property management firm with the experience and record described in subclause i above,

or (3) Developer or its management company will continue to manage the Development for at least one yearfollowing such transfer and during such period will provide training to the transferee and its manager in theresponsibilities relating to the affordable units; (e) the transferee does not have pending against it, and doesnot have a history of significant and material building code violations or complaints concerning theconstruction, maintenance, upkeep, operation and regulatory agreement compliance of any of its projects asidentified by any local, state or federal regulatory agencies; and (I) the terms ofthe sale, transfer, orconveyance shall not jeopardize the Agency's security interest in the Site and is in full compliance with allstandards, including eligibility requirements and other conditions imposed by any funding sources for theDevelopment and the Loan.

During the term of this Covenant Agreement, Owner shall not engage in any financing or othertransaction creating any mortgage or other encumbrance or lien upon the Property (exccpt for any financingprovided by the Agency), without the prior written consent of the Agency. The Agency may give its consentto such financing if and to the extent necessary to maintain or improve the affordability or condition of theProperty.

29. DEFAULT AND REMEDIES In the event of any breach or violation of any agreement orobligation under this Covenant Agreement, or of any Event of Default as defined by any Loan Agreementwhich in any way pertains to or affects the continuing operation of the Property, and after the Agency hasgiven written notice to Owner and an opportunity to cure in the same time and manner provided for withrespect to Events of Default in said Loan Agreement, the Agency may proceed with any or all of the

following remedies:

A. Bring an action in equitable relief seeking the specific performance by Owner of the termsand conditions of this Covenant Agreement, and/or enjoining, abating, or preventing anyviolation of said terms and conditions, and/or seeking declaratory relief;

B. Enter upon, take possession of, and manage the Property, either in person, by agent, or bya receiver appointed by a court, and collect any rents, income, deposits, or reserves andapply them to operate the Property;

C. After notice provided for herein, make such repairs or replacements to the Property as arenecessary and provide for payment thereof;

D. Initiate and pursue any private and/or judicial foreclosure action allowed under applicablelaw and the power of sale provision in the Performance Deed of Trust;

~ Tl___,..._ ~_.. ~l-i.~_ -e~O.:H ..""i- +....i. ~.. t-t."" T rV.in A grp.pnipnto nrL. rUl::Ul; iliy ULU¡;l 1 111'CUY L)\'L .luiu! .l.l.l L.l.l.. .LVU.U ~.. .L....u...u~,..-"

F. Pursue any other remedy allowed at law or in equity.

30. NON-LIABILITY OF OFFICIALS, EMPLOYEES AND AGENTS. The Agency'soffcers, offcials, employees or agents shall not be personally liable to Owner for any obligation createdunder the terms of this Covenant Agreement except in the case of actual fraud or wilful misconduct by suchperson.

31. INDEMNITY. Notwithstanding the insurance coverage required herein, Owner shallindemnity and hold the Agency and City ("Indemnitees") free and harmless against any losses, damages,liabilities, claims, demands, judgments, actions, court costs, and legal or other expenses (including attorneys'fees) which the Indemnitees may incur as a direct or indirect consequence of(1) Owner's failurc to performany obligations as and when required by this Covenant Agreement; (2) any failure of any of Owner'srepresentations or warranties to be true and complete; or (3) any act or omission by Owner or any contractor,subcontractor, management agent, or supplier with respect to the Project or the Property, except where suchlosses are caused by the sole negligence or wilful misconduct of the Indemnitees. Owner shall pay

immediately upon the Indemnitees' demand any amounts owing under this indemnity. The duty of the

Owner to indemnify includes the duty to defend the Indemnitees in any court action, administrative action, orother proceeding brought by any third party arising from the Project or the Property. The Indemnitees maymake all reasonable decisions with respect to its/their representation in any legal proceeding, including, butnot limited to, the selection of attorney(s). Owner's duty to indemnity the Indemnitees shall survive the termof this Covenant Agreement.

32. GOVERNING LAW. This Covenant Agreement shall be interpreted under and be governedby the laws of the State of California, cxcept for those provisions relating to choice of law and thoseprovisions preempted by federal law.

33. COVENANT AGREEMENT CONTROLS. In the event that any provisions of this

Covenant Agreement and any Loan Agreement conflict, the terms of the Covenant Agreement shall control.

34. TIME. Time is of the essence in this Covenant Agreement.

35. CONSENTS AND APPROVALS. Any consent or approval of the Agency required under

this Covenant Agreement shall not be uneasonably withheld. Any approval must be in writing and executedby an authorized representative of the Agency.

-=

36. NOTICES, DEMANDS AND COMMUNICATIONS. Formal notices, demands andcommunications between Owner and the Agency shall be suffciently given and shall not be deemed givenunless dispatched by registered or certified mail, postage prepaid, return receipt requested, or deliveredpersonally, to the principal offces of Owner and the Agency as follows:

Agency:

Owner:

With CopyTo:

Community Redevelopment Agency of theCity of Los Angeles354 S. Spring Street, Suite 800Los Angeles, CA 90013Attention: Cecilia V. Estolano

Travelers Aid Society of Los Angeles, California1720 N. Gower StreetLos Angeles, CA 90028Attention: Paul Hollombe, Executive Director

Travelers Aid Society of Los Angeles, California1507-1509 Winona BoulevardLos Angeles, CA 90027Attn: Paul HollombeFacsimile: (323) 468-2505Phone: (323) 468-2500

37. BINDING UPON SUCCESSORS. All provisions ofthis Covenant Agreement shall bebinding upon and inure to the bcnefit of the heirs, administrators, executors, successors-in-interest,transferee, and assigns of Owner and the Agency, and shall run with the land for the full term of thisCovenant Agreement, regardless of any assignment, payment, prepayment, expiration, extinguishment of anyAgency Loan or Note, any reconveyance of any Deed of Trust, or any conveyance or transfer of the Property.Any successor-in-interest to Owner and any purchaser or transferee of the Property shall be subject to all ofthe duties and obligations imposed on Owner under this Covenant Agreement for the full term of thisCovenant Agreement. The term "Owner" as used in this Covenant Agreement shall include all such assigns,successors-in-interest, and transferee.

38. RELATIONSHIP OF PARTIES. The relationship of Owner and the Agency for thisProject during the term of this Covenant Agreement shall not be construed as ajoint venture, equity venture,or partnership. The Agency neither undertakes nor assumes any responsibility or duty to Owner or any thirdparty with respect to the operation of the Property or the actions of Owner. Except as the Agency mayspecify in writing, Owner shall have no authority to act as an agent of the Agency or to bind the Agency toany obligation.

39. WAIVER. Any waiver by the Agency of any obligation in this Covenant Agreement must bein writing. No waiver wiíí be impiied from any deiay or faiiure by the Agency to take action on any breachor default of Owner or to pursue any remedy allowed under this Covenant Agreement or applicable law. Any

extension of time granted to Owner to perform any obligation under this Covenant Agreement shall notoperate as a waiver or release from any of its obligations under this Covenant Agreement. Consent by theAgency to any act or omission by Owner shall not be construed to be a consent to any other or subsequent actor omission or to waive the requirement for the Agency's wrtten consent to future waivers.

40. OTHER AGREEMENTS. Owner represents that it has not entered into any agreements thatwould restrict or compromise its ability to comply with the terms of

this Covenant Agreement. Owner shall

not enter into any agreements that are inconsistent with the terms of this Covenant Agreement without anexpress waiver by the Agency in writing.

41. AMENDMENTS AND MODIFICATIONS. Any amendments or modifications to thisCovenant Agreement must be in writing, and shall be made only if executed by both Owner and the Agency.

42. SEVERABILITY. Every provision of this Covcnant Agreemcnt is intended to be severable.

If any provision of this Covenant Agreement shall be held invalid, illegal, or unenforceable by a court ofcompetent jurisdiction, the validity, legality, and enforceability of the remaining provisions shall not in anyway be affected or impaired.

¡signature page follows J

IN WITNESS WHEREOF, the Agency and the Owner have caused this Covenant Agreement to beexecuted by their duly authorized representatives.

Executed this 6th day of December, 2007

THE COMMUNITY REDEVELOPMENT AGENCYOFTH?J;;9~¿ .BY:~Name: CecrLlA y. £SloLA,J ()

Its: L~i~r £f.ti~è0-f Vç o'F~

APPROVED AS TO FORM AN LEGALITYROCKA J. DELGADILLO, City Attorney

By: /'/\ Q

Date 12 I L I "f")

Executed this "3 d day of ¡f"......&t2007

Travelers Aid Society of Los Angeles, a California Nonprofit

Corporation

¡1.t IV~./By:

Name: Paul Hollombe

Its: Executive Director

THIS DOCUMENT l-.1UST BE NOTARED FOR RECORDING

- -

EXHIBIT DTO AGREEMENT

(FORM OF DEED OF TRUST)

NO FEE DOCUMENT

Recording requested by andwhen recorded, mail to:

The Community Redevelopment Agencyof thc City of Los Angeles354 South Spring StreetLos Angeles, CA 90013Attn: Asset Management

DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTUREFILING

(Securing loan of $864,000.00)(Loan # 876006-001)

THIS DEED OF TRUST, ASSIGNMENT OF RENTS, SECURTY AGREEMENT AND FIXTURFILING ("Deed of Trust") is made this 6th day of December 2007, by Travelers Aid Society of

Los Angeles,

California, a California non-profit corporation ("Trustor"), to Lawyers Title Company, a CaliforniaCorporation, as trustee ("Trustee"), for the benefit of

the Community Redevelopment Agency CRAA of the

City of Los Angeles, a public body, corporate and politic ("Beneficiary"). This Deed of Trust is being

executed in order to secure Beneficiary's interest as a governental CRAA in ensuring both that publicfunds loaned for project development are repaid, and that commercial projects assisted by public funds aredeveloped and operated in a manner that is consistent with the public interest. Any capitalized term nototherwise defined herein shall have the meaning ascribed to such term in the Agreement (as defined inSection 2(A)).

GRANT IN TRUST

1. GRANT. Trustor, in consideration of the indebtedness referred to below, hereby irrevocablygrants and conveys to Trustee, IN TRUST, WITH POWER OF SALE, for the benefit and security ofBeneficiar, all of Trustor's interest in the property located at 1507-1509 Winona Avenue, Los Angeles, CA90027 and described in the attached Attachment 1, incorporated herein by this reference (the "Property");

TOGETHER WITH all interest, estates or other claims, both in law and in equity which Trustor nowhas or may hereafter acquire in the Property; all buildings, structures, fixtures, improvements, signs, andlandscaping now or hereafter erected or located on the Property, including all equipment and machinery usedfor supplying or distributing heating, cooling, electricity, gas, water, air, and light, all kitchen and laundryappliances such as washers, dryers, refrigerators, garbage disposals, ovens, ranges, dishwashers, all plumbingand bathroom fixtures, all security and access control equipment, fire prevention and extinguishmentequipment, elevators, floor coverings, window coverings, paneling, cabinets, (provided, however, thatTrustor shall have the right to remove, if necessar, such fixtures, furnishings, and equipment for the purposeofreplacement with similar items of the same quality perfonning the same functions, which replacementsshall themselves become part of this grant); all building material and equipment either now or hereafterdelivered to the Property and intended to be installed therein or any such material and equipment purchasedwith Loan proceeds whether or not located on the Property; all reservcs, accounts, deferred payments, andrefunds relating to development on the Property; all rents and income generated by the Property orimprovements thereon; all leases, subleases and rental agreements covering the Property or any portionthereof now existing or hereafter entered into, and all interests of Trustor in security deposits, advancerentals, accounts, or payments of similar nature with respect to such lcases, subleases, or rental agreements;all easements and rights-of-way appurtenant to the Property, including parking and recreational eascmcnts,and all intcrcsts of Trustor in any land lying within the right-of-way of any street, sidewalks, and areas ofland adjacent to or used in connection with the Property; all development rights and credits, air rights, waterrights, and oil, gas or mineral rights with respcct to the Property; all claims or demands with respect toinsurance proceeds, and all awards made for a taking by eminent domain; all interests and rights in anyprivate or governent grants, subsidies, loans, or other financing with respect to devclopment on theProperty; all interests in personal property used in and about the Property (except furniture and other personalproperty of occupants of dwelling units on the Property); all intangible property and rights relating to theProperty or operations on the Property, including trade names, goodwill, trademarks, and service marks; allgovernent pennits, approvals, and map rights related to construction on the Property; all architectural,structural, and mechanical plans, specifications, designs, studies, and data with respect to construction ofimprovements on the Property; all environmental tests, studies and reports with respect to the Property; allcurrent and future claims and rights of action of Trustor against prior T ASLAs and operators of the Property,e'g' , 0 i'"g propert-- 'T ¡\ ClT A.. ,._.. ____,.4.~_,. 4-e-,...-+.. n..r1 l"....o.. fa..a-lt'" ..r\..

"'" 1 t'lnh." o;rtviC'nrc -:nrt nthPrnino r 11 J iy lI\o.Ll-~ dllU Ui-\:ldiuio:, L 11dllL;: auu iVll11\... L"-U UL~i VV.lhJuiu..un,- ......\1...,...1.., ..u.. ..~u....third parties with respect to environmental or Hazardous Materials contamination and cleanup of

the Property

under any federal, state, or local ordinances, statutes, regulations, or administrative decisions or commonlaw.

To have and to hold the Property hereinbefore described together with appurtenances to the Trustee,its or his successors and assigns forever.

All of the foregoing, together with the Property, is herein referred to as the "Security."

OBLIGATIONS SECURED

2. OBLIGATIONS.obligations:

Trustor makes this grant for the purpose of securing the following

A. Repayment of the indebtedness of Trustor to Beneficiary, according to the terms ofthat certain Agreement of even date herewith executed between Trustor and Beneficiary forthis loan (the "Agreement", on fie at the offces of Beneficiary, which is hereby incorporatedinto this Deed of Trust by this reference), in the principal sum of Eight Hundred Sixty FourThousand Dollars ($864,000.00) with interest thereon (the "Loan") evidenced by that certainpromissory note of even date herewith executed by Borrower (the "Note," on file at the offcesof Beneficiar, which is hereby incorporated into this Deed of Trust by this reference) or asmuch as has been disbursed to Trustor therewith, along with any extensions, amendments,modifications, or renewals to the Note; and

B. Payment of any sums advanced by Beneficiary to protect the security and priority ofthis Deed of Trust; and

C. Payment of any sums advanced by Beneficiar following a breach of Trustor'sobligation to advance said sums and the expiration of any applicable cure period, with interestthercon as provided herein; and

D. Performance of every obligation, covenant or agreement of Trustor contained in this

Deed of Trust, the Note, and the Management Requirements, executed between Trustor andBeneficiary of even date herewith, including all modifications, extensions and renewals ofthese obligations; and

E. Performance of any other obligation or repayment of any other indebtedness of Trustortu Beneficiary', where such evidence of obligation or indebtedness specifically recites that it issecured by this Deed of Trust; and

F. Performance of any obligations of Trustor in any other agreements with respect tofinancing of the Project, as defined in the Covenant Agreement, or the Security the absence ofwhich should adversely affect Bcneficiary, whether or not Beneficiary is a party to suchagreements.

ABSOLUTE ASSIGNMENT OF RENTS AND RIGHT TO POSSESSION

3. ASSIGNMENT. Trustor hereby absolutely and unconditionally assigns to Beneficiary all ofthe rents, issues, profits, royalties, revenues, income and other benefits (collectively, the "Rents") derivedfrom the Property, whether now due, past due or to become due, and hereby gives to and confers uponBeneficiary, either directly or through a receiver, the right, power and authority, but not the obligation, tocollect the Rents, and to sue, either in the name of Trustor or Beneficiar, for all such Rents and to apply the

same to the indebtedness secured hereby in such ordcr as Beneficiar may determine in its sole discretion.This assignent of Rents is intended to create and shall be construed to create an absolute assignment toBeneficiary of all of Trustor's right, title and interest in the Rents; provided, however, so long as no defaultexists by Trustor in the payment of any indebtedness secured hereby, or in any other covenant containedherein, or in said note or notes or in any other document evidencing or securing such indebtedness, Trustorshall have the right to collect all Rents from the Property and to retain, use and enjoy the same. Upon theoccurrence of such a default, without the necessity of demand or other notice to Trustor or any other act toenforce Beneficiary's interest pursuant to this assignment, Trustor shall have no interest whatsoever in theRents that are received by Trustor after a dcfault, and all such Rents shall be received and held by Trustor inconstructive trust for Beneficiar and delivered promptly to Beneficiary, or to a court-appointed receiver forthe Property, without the necessity for further notice to, or demand upon, Trustor. Upon the occurrence ofsuch a default and at any time thereafter during the continuance thereof, Beneficiary may, at its option, sendany tenant of the Property a notice to the effect that: (a) a default has occurred; (b) Beneficiar has elected toexercise its rights under this assignment; and (c) such tenant is thereby directed to thereafter make allpayments of Rents to or for the benefit of Beneficiary or as Beneficiary shall direct. Any such tenant shall beentitled to rely upon any notice from Beneficiar and shall be protected with respect to any payment of

Rents

made pursuant to such notice, irrespective of whether a dispute exists between Trustor and Beneficiary withrespect to the existence of a default or the rights of Beneficiary hereunder. Any such tenant shall not be

required to investigate or determine the validity or accuracy of such notice or the validity or enforceability ofthis assignent. Trustor hereby agrees to indemnify, defend and hold any such tenant harmless from and

against any and all losses, claims, damages or liabilities arising from or related to any payment of Rents by

such tenant made in reliance on and pursuant to such notice.

4. ENFORCEMENT. Upon the happening of an Event of Default which remains uncured after

expiration aftne applicabìe cure period pursuant tû the terms ûfthe Agreement or other Loan Documents,and written notice to Trustor, Beneficiary may, in addition to other rights and remcdies permitted by the

Agreement, this Deed of Trust, or applicable law, (a) enter upon, take possession of, and manage theSecurity, either in person as a mortgagee-in-possession, by agent, or by a receiver appointed by a court, anddo any acts which it deems necessary or desirable to preserve the value, marketability or rentability of theSecurity, (b) collect all Rents, including those past due and unpaid, and apply the same to pay for the costsand expenses of operation of the Security, including attorneys' fees, and payoff any indebtedness secured bythis Deed of Trust, all in such order as Beneficiary may determine, (c) enter upon and take possession of the

Security, and complete construction of any improvements on the Security as provided for in the Plans andSpecifications approved under the Agreement or any modifications to the Plans and Specifications or theProject that Beneficiary in its sole discretion believes is appropriate, and/or (d) beneficiary may make, cancel,enforce, and modify leases and rental agreements, obtain and evict tenants, set and modifY rent terms, sue forrents due, enter into, modify, or terminate any contracts or agreements, or take any legal action, as it deemsnecessar with respcct to the Rents or to development or operation of the Security.

5. APPOINTMENT OF A RECEIVER. In any action to enforce this assignmcnt, Beneficiarymay apply for the appointment of a rcceiver to take possession of the Security and take whatever measuresare necessary to preserve and manage the Security for the benefit of Beneficiary and the public interest.

Trustor hereby consents to the appointment of a receiver. The receiver shall have all of the authority over the

Security that Beneficiary would have if Beneficiary took possession of the Security under this assignment as

a mortgagee-in-possession, including the right to collect and apply Rents and the right to completeconstruction of improvements.

6. NO WAIVER OF POWER OF SALE. The entering upon and taking possession of the

Security and the collection of Rents shall not cure or waive any default or notice of default hereunder orinvalidate any act done in response to such default or notice of dcfault and, notwithstanding the continuancein possession of the Security or the collection and application of Rents, Beneficiar shall be entitled to

exercise every right providcd for in this Deed of Trust or by law upon occurrence of any Event of Default,

including the right to exercise the power of sale.

COMMERCIAL CODE SECURITY AGREEMENT - UCC-L FILING

7. GRAT. This Deed of Trust is intended to be a security agreement and financing statementpursuant to the California Commercial Code for any of the items specified above as part of the Security

which under applicable law may be subject to a security interest pursuant to the Commercial Code, andTrustor hereby grants Beneficiary a security interest in said items. Beneficiary may file a copy of this Deedof Trust in the real estate records or other appropriate index as a financing statement for any of

the items

specified as par of the Security. Trustor shall execute and deliver to Beneficiary at Beneficiary's request any

financing statements, as well as extensions, renewals, and amendments thereof, and copies of this instrument

in such form as Beneñciar may require to perfect a security interest Vv'ith respect to said items. Trustor shallpay all costs of filing such financing statements and shall pay all reasonable costs of any record searches for

d

financing statements and releases. Without the prior written consent of Beneficiary, Trustor shall not createor permit any other security interest in said items.

8. REMEDIES. Upon occurrence of an Evcnt of Default by Trustor on any obligation oragreement in the Loan Documents, Beneficiary shall have the remedies of a secured party under theCommercial Code and at Beneficiary's option may also invoke the remedies provided for elsewhere in thisDeed of Trust with respect to said items. Beneficiar may proceed against the items of real property andpersonal property specified above separately or together and in any order whatsoever.

RIGHTS AND OBLIGATIONS OF TRUSTOR

9. PERFORMANCE OF SECURED OBLIGATION. Trustor shall promptly perform eachobligation secured by this Deed of Trust.

10. PAYMENT OF PRINCIPAL AND INTEREST. Trustor shall promptly pay when due theprincipal and interest on the indebtedness evidenced by the Note.

11. MAINTENANCE OF THE SECURITY. Trustor shall, at the Trustor's own expense,maintain and preserve the Security or cause the Security to be maintained and preserved in good condition, ingood repair, and in a decent, safe, sanitar, habitable and tenantable condition. Trustor shall not cause orpcrmit any violations of any laws, ordinances, regulations, covenants, conditions, restrictions, or equitableservitudes as they pertain to improvcments, alterations, maintenance or demolition on the Security. Trustorshall not commit or permit waste on or to the Security. Trustor shall not abandon the Sccurity. Beneficiaryshall have no rcsponsibility over maintenance of the Security. In the event Trustor fails to maintain theSecurity in accordance with the standards in this Deed of Trust, the Agreement, or the Covenant Agreement,Beneficiar, after at least seven (7) calendar days prior notice to Trustor and after any applicable cureperiods, may, but shall be under no obligation to, make such repairs or replacements as are necessary andprovide for payment thereof. Any amount so advanced by Beneficiary, together with interest thereon fromthe date of such advance at the same rate of indebtedness as specified in the Note (unless payment of such an

interest rate would be contrar to applicable law, in which event such sums shall bear interest at the highestrate then allowed by applicable law), shall become an additional obligation of Trustor to Beneficiary andshall be secured by this Deed of Trust.

12. INSPECTION OF THE SECURITY. Trustor shall permit Bcneficiary to enter and inspectthe Security for compliance with these obligations upon twenty four (24) hours advance notice of such visitby Beneficiary to Trustor or Trustor's management agent.

13. LIENS, ENCUMBRACES, AND CHARGES. Trustor shall discharge any lien orencumbrance not approved by Trustor in writing that may attain priority over this Deed of Trust, as providedfor in the Agreement.

14. DEFENSE AND NOTICE OF CLAIMS AND ACTIONS. Trustor shall appear in anddefend, at its own expense, any action or proceeding (whether initiated or defended by Beneficiary and/orTrustor) purporting to affect the Security and/or the rights of Beneficiar. Trustor shall give Beneficiar andTrustee prompt notice in writing ofthe assertion of any claim, of the filing of any action or proceeding and ofany condemnation offer or action with respect to the Security.

15. SUITS TO PROTECT THE SECURITY. Following reasonable notice to Trustor,Beneficiary shall have power to institute and maintain such suits and proceedings, at Trustor's expense, as itmay deem expedient (a) to prevent any impairment of the Security or the rights of Beneficiary, (b) to preserve

or protect its interest in the Security and in the Rents, and (c) to restrain the enforcement of or compliancewith any govemmentallegislation, regulation, or order, if the enforcement of or compliance with suchlegislation, regulation, or ordcr would impair the Security or be prejudicial to the interest of Beneficiary.

16. DAMAGE TO SECURITY. Trustor shall give Beneficiar and Trustee prompt notice inwriting of any damage to the Sccurity. If any building or improvements erected on the Propcrty is damagedor destroyed by an insurable cause, Trustor shall, at its cost and expense, repair or restore said buildings andimprovements consistent with the original plans and specifications. Such work or repair shall be commencedwithin one hundred twenty (120) days after thc damage or loss occurs and shall be complete within one (1)ycar thercafter. All insurance proceeds collected for such damagc or destruction shall be applied to the costof such repairs or restoration and, if such insurance proceeds shall be insufficient for such purpose, Trustorshall make up the deficicncy. Trustor shall not, by agreement or otherwise, permit any third pary to useinsurance proceeds in a manner inconsistent with the terms of

the Agreement.

17. TITLE. Trustor warrants that Trustor lawfully has legal title to the Security without anylimitation on the right to encumbcr.

18. GRANTING OF EASEMENTS. Trustor may not grant easements, licenses, rights-of-wayor other rights or privileges in the nature of easements with respect to the Security except, with Beneficiary'sapproval, Trustor may grant such easements, licenses, rights-of-way as are required for installation andmaintenance of public utilities including water, gas, electricity, sewer, cable television, telephone, or asrequired by law.

19. TAXES AND LEVIES. Trustor shall pay before they become delinquent all taxes,assessments, fees, levies or charges levieò against or on account ûfthe Pïûperty ûr Develûpmcnt (as definedin the Agreement) and shall pay as due all claims for work done on or for services rendered or material

furnished to the Property. In the event that Trustor wishes to contest the legality of any such charge,Beneficiary shall pay under protest the charge prior to delinquency in order to prevent any involuntar lien onthe Property.

20. INSURACE. Trustor shall provide such insurance as required under the Agreement and theCovenant Agreement. In the event Trustor fails to maintain the full insurance coverage required by this Deedof Trust, Beneficiary, after at least seven (7) business days prior notice to Trustor, may, but shall be under noobligation to, take out the required policies of insurance and pay the premiums on such policies. Any amountso advanced by Beneficiar, together with interest thereon from the date of such advance at the same rate ofindebtcdness as specified in the Note (unless payment of such an interest rate would be contrary to applicablelaw, in which event such sums shall bear interest at the highest rate then allowed by applicable law), shallbecome an additional obligation of Trustor to Beneficiary and shall be secured by this Deed of Trust. Trustor

shall not, by agreement or otherwise, permit any third pary to use insurance proceeds in a mannerinconsistent with the Agreement.

21. CONDEMNATION AND INSURANCE PROCEEDS. Imediately upon obtaining

knowledge of the institution of any proceedings for the condemnation or other taking of all or any portion ofthe Security, or knowledge of any casualty damage to the Security, or damage in any other manner, Trustorshall immediately notify Beneficiary thereof. Trustor hereby authorizes and empowers Beneficiary asattorney-in-fact for Trustor to make proof of loss, to adjust and compromise any claim under the insurancepolicies covering the Security, to appear in and prosecute any action arising from such insurance policies, tocollect and receive insurance proceeds, and to deduct there from Beneficiary's expcnses incurred in thecollection of such proceeds; provided, however, that nothing contained in this Section shall requireBeneficiar to incur any expense or take any action hereunder. Trustor hereby authorizes and empowersBeneficiary, at Beneficiar's option, as attorney-in-fact for Trustor, to commence, appear in and prosecute, inBeneficiary's or Trustor's name, any action or proceeding relating to any condemnation or other taking of allor any part of the Security, whether direct or indirect, and to settle or compromise any claim in connectionwith such condemnation or other taking. The proceeds of any award payment or claim for damages, direct orconsequential, in connection with any condemnation or other taking, whether direct or indirect, of

the

Security, or any par thereof, or for conveyances in lieu of the Security, or any part thereof, shall be paid toBeneficiary. The foregoing powers of attorney are coupled with an interest and are irrevocable. Beneficiaryshall release all insurance and condemnation proceeds to Trustor to be used to reconstruct the improvementson the Property provided that Beneficiary determines that such restoration, repair or rebuilding iseconomically feasible. If such insurance proceeds are insuffcient for such purposes, Trustor shall make upthe deficicncy. If the Security is subject to a partial condemnation or taking, then the proceeds received therefrom shall be applied to restore the Security taken, provided Beneficiary determines that such restoration iseconomically feasible and no default exists under the Note following the expiration of all applicable cureperiods. lfthe Securiiy is subject to a total cundeninatiûn, ûr if

Bencficiarj determines that restoration of the

Security is not feasible following a parial condemnation, or if a default exists then the proceeds from any

condemnation award or claim for damages shall be used first to repay all sums under the Note, with theexcess, if any, paid to Trustor. Beneficiary shall be under no obligation to question the amount of anycompensation, awards, proceeds, damages, claims, rights of action, and payments relating to condemnationor other taking of the Security or insured casualty affecting the Security, and may accept the same in theamount in which the same shall be paid. Trustor shall execute such further evidence of assignent of anyawards, proceeds damages or claims arising in connection with such condemnation or taking or suchinsurance as Beneficiary may require. Trustor shall not, by agreement or otherwise, permit any other pary orlender to use insurance or condemnation proceeds in a maner inconsistent with this Section.

22. ACCELERATION ON TRANSFER OF SECURITY; ASSUMPTION. In the event thatTrustor, without the prior written consent of the Beneficiary, except as permitted in the Agreement, sells,agrees to sell, transfers, or conveys its interest in the Security or any part thereof or interest therein,Beneficiary may at its option declare all sums secured by this Deed of Trust to be immediately due andpayable. This option shall not apply in case of:

A. the grant of a leasehold interest to qualifying households who will occupy Project unitsas provided for under the Loan Documents and the Covenant Agreement; or

B. sale or transfer of fixtures or personal property pursuant to the grant provisions in thisDeed of Trust.

Consent to one (I) sale or transfer shall not be deemed to be a waiver of the right to require suchconsent to future or successive transactions.

23. RECONVEYANCE BY TRUSTEE. This trust is intended to continue for the entire term ofthe Loan. Upon written request of Beneficiar stating that all sums secured by this Deed of Trust have been

paid and upon surrender of this Deed of Trust to Trustee for cancellation and retention, and upon payment byTrustor of Trustee's reasonable fees, Trustee shall reconvey the Security to Trustor, or to the person orpersons legally entitled thereto.

DEFAULT AND REMEDIES

24. EVENTS OF DEFAULT. Any of the events listed in the Agreement as an Event of Default

shall also constitute an Event of Default under this Deed of Trust, including, but not limited to, (1) Trustor's

failure to pay when due any sums payable under this Deed of Trust, the Note, or the Agreement; (2) Trustor'sfailure to observe or to perform any of its other covenants, agreements or obligations under this Deed ofTrust, the Covenant Agreement, the Note, or the Agreement; or (3) Trustor's failure to make any payment orperform any of its other covenants, agreements, or obligations under ai-iy ûther ai:ieement with respect to

financing for the Project or the Security, whether or not Beneficiary is a party to such agreement.

.

. .

Notwithstanding anything to the contrar set forth herein, any "Event of Default" described

hercinabove shall not constitute an "Event of Default" for the purposes of this Deed of Trust or any otherLoan Document if the defaulting party cures, corrects or remedies the Event of Default within (a) thirty (30)calendar days (ten (10) calendar days if the Event of Default is monetar) from receipt from the non-defaulting pary of notice pursuant to the terms of the Agreement, or (b) solely in the event of a non-monetary Event of Default, if such non-monetar default cannot be reasonably cured within thirty (30) days,such longer period as is necessary to cure such default, provided the defaulting party commences the curewithin the thirty (30) day period from receipt of the aforementioned notice and diligently prosecutes suchcure to completion.

25. ACCELERATION OF MATURITY. Upon the happening of an Event of Default whichhas not been cured within the times and in the manner provided in the Agreement, Beneficiar may declareall sums advanced to Trustor under the Note and this Deed of Trust immediately due and payable.

26. BENEFICIARY'S REMEDIES. Upon the happening ofan Event of Default which has notbeen cured within the times and in the manner provided in the Agreement, Beneficiar may, in addition toother rights and remedies permitted by the Agreement, the Note, or applicable law, proceed with any or all ofthe following remedies:

A. Enforce the assignent ofrents and right to possession as provided for in this Deed ofTrust, and/or seek appointment of a receiver to take over possession of the Security andcollect Rents;

B. Enter the Security and take any actions necessary in its judgment to complcte constructionon the Security as permitted under the Assignment of Development Rights executed byTrustor (on fie with Beneficiary) and the assignment ofrents and right to possession inthis Deed of Trust, either in person or through a receiver appointed by a court;

C. Disburse from Loan proceeds any amount necessary to cure any Monetary Default underthis Deed of Trust, tbe Agreement, or the Note;

D. Commence an action to foreclose this Deed of Trust pursuant to California Code of CivilProcedure Sections 725a, et seq., and/or seek appointment of a receiver from a court ofcompetent jurisdiction with the authority to protect Beneficiary's interests in the Security,including the authority to complete construction of improvements;

E. Deliver tû Trùstce a written declaration of Default and demand for sale, and a writtenNotice of Default and election to cause Trustor's interest in the Security to be sold, which

.

notice Trustee or Beneficiar shall duly fie for record in the Offcial Records of LosAngeles County, and exercise its power of sale as provided for below; or

F. Pursue any other rights and remedies allow at law or in equity.

27. FORECLOSURE BY POWER OF SALE. Should Beneficiary elect to foreclose byexercise of the power of sale contained in this Deed of Trust, Beneficiary shall notify Trustee and shalldeposit with Trustee this Deed of Trust (the deposit of which shall be deemed to constitute evidence that theunpaid sums disbursed under the Note are immediately due and payable), and such receipts and evidence ofany expenditures made that are additionally secured hereby as Trustee may require.

Upon receipt of such notice from Beneficiary, Trustee shall cause to be recorded, published anddelivered to Trustor such Notice of Default and Election to Sell as then required by law and by this Deed ofTrust. Trustee shall, without demand on Trustor, after lapse of such time as may then be required by law andafterrecordation of such Notice of Default and after Notice of Sale having been given as required by law, sellthe Security, at thc time and place of sale fixed by it in said Notice of Sale, whether as a whole or in separatelots or parcels or items as Trustee shall deem expedient and in such order as it may determine unlessspecified otherwise by Trustor, at public auction to the highest bidder for cash in lawful money of the ÙnitedStates payable at the time of sale. Trustee shall deliver to the purchaser its deed or deeds conveying theproperty so sold, but without any covenant or warranty, express or implied. The recitals in such deed of anymatters of facts shall be conclusive proof of the truthfulness thereof. Any person, including, withoutlimitation, Trustor, Trustee, or Beneficiary, may purchase at the sale.

Trustee may postpone sale of all or any portion of the propert by public announcement at such timeand place of sale, and from time to time thereafter, and without further notice make such sale at the timefixed by the last postponement, or may, in its discretion, give a new Notice of Sale.

After deducting all reasonable costs, fees and expenses of Trustee, including costs of evidence of titlein connection with such sale, Trustee shall apply the proceeds of sale as follows: (i) first, to the payment ofall sums then secured by this Deed of Trust, in such order and amounts as Beneficiar in its sole discretiondetermines, and (ii) the remainder, if any, to the person or persons legally entitled thereto.

28. REMEDIES CUMULATIVE. No right, power or remedy conferred upon or reserved toBeneficiary by this Deed of Trust is intended to be exclusive of any other rights, powers or remedies, buteach such right, power and remedy shall be cumulative and concurrent and shall be in addition to any otherright, power and remedy given hereunder or now or hereafter existing at law or in equity.

GENERA PROVISIONS

29. GOVERNING LAW. This Deed of Trust shall be interpreted under and governed by thelaws of the State of California, except for those provisions relating to choice oflaw and those provisionspreempted by federal law.

30. STATEMENT OF OBLIGATION. CRAA may collect a fee not to exceed the maximumallowable under applicable law for furnishing a statement of obligations as provided in the California CivilCode.

31. CONSENTS AND APPROVALS. Any consent or approval of Beneficiary required under

this Deed of Trust shall not be unreasonabty withheld.

32. TIME. Time is of the esscnce in this Deed of Trust.

33. NOTICES, DEMANDS AND COMMUNICATIONS. Formal notices, demands andcommunications between Trustor and Beneficiar shall be suffciently given and shall not be deemed givcnunless dispatched by registered or certified mail, postage prepaid, return receipt requested, or deliveredpersonally, to the principal offces of Trustor and Beneficiary as follows:

BENEFICIARY: Community Redevelopment CRALA of theCity of Los Angeles354 South Spring Street, Suite 800Los Angeles, CA 90013Attention: Chief Executive Offcer

TRUSTOR: Travelers Aid Society of Los Angeles, California, Inc.1720 North Gower StreetLos Angeles, CA 90028Attn: Paul HollombeFacsimile: 323-468-2505Phone: 323-468-2500

With Copy To: Travelers Aid Society of Los Angeles, California, Inc.1507- 1 509 Winona BoulevardLos Angeles, CA 90027Altn: Paul HoiiomheFacsimile: 323-468-2505 Phone: 323-468-2500

34. BINDING UPON SUCCESSORS. All provisions ofthis Deed of Trust shall be binding

upon and inure to the benefit of the heirs, administrators, executors, successors-in-interest, transferees, andassigns of Trustor, Trustee, and Beneficiary.

35. WAIVER. Any waiver by Beneficiar of any obligation of Trustor in this Deed of Trust must

be in writing. No waiver will be implied from any delay or failure by Beneficiary to take action on anybreach or default of Trustor or to pursue any remedy allowed under the Deed of Trust or applicable law. Anyextension of time granted to Trustor to perform any obligation under this Deed of Trust shall not operate as a

waiver or release Trustor from any of its obligations under this Deed of Trust. Consent by Beneficiar to any

act or omission by Trustor shall not be construed to be a consent to any other or subsequent act or omissionor to waive the requirement for Beneficiary's written consent to future waivers.

36. AMENDMENTS AND MODIFICATIONS. Any amendments or modifications to thisDeed of Trust must be in writing, and shall be made only if mutually agreed upon by Beneficiary and Trustor.

37. AGREEMENT CONTROLS. Ifthere is any contradiction between this instrument and theAgreement, the terms of the Agreement shall control, except that Trustor shall have no defense or claim thatthis instrument does not establish a valid lien on the Property or the Security.

38. DEFINITIONS. Capitalized terms not otherwise defined in this Deed of Trust shall have the

same meaning as defined terms in the Agreement.

39. PROOFS OF CLAIM. In the case of any receivership, insolvency, bankrptcy,reorganization, arrangement, adjustment, recomposition or other proceedings affecting Trustor, its creditorsor its property, Trustee, to the extent permitted by law, shall be entitled to fie such proofs of claim and otherdocuments as may be necessar or advisable in order to have the claims of

Beneficiary allowed in such

proceedings and for any additional amount which may become due and payable by Trustor hereunder aftersuch date.

40. SEVERABILITY. Every provision of this Deed of Trust is intended to be severable. If any

term or provision of this Deed of Trust is declared to be ilegal, invalid, or unenforceable by a court ofcompetent jurisdiction, the legality, validity, and enforceability of

the remaining provisions shall not be

affected. If the lien of this Deed of Trust is invalid or unenforceable as to any part of the debt, or if the lien is

invalid or unenforceable as to any part ofthe Security, the unsecured or parially secured portion of the debtand all payments made on the debt (whether voluntar or under foreclosure or other enforcement action ûi

procedure) shall be considered to have been first paid or applied to the payment of that portion of the debt

which is not secured or parially secured by the lien of this Deed of Trust.

41. SUBSTITUTION OF TRUSTEES. Beneficiar may from time to time appoint anothertrustee to act in the place and stead of Trustee or any successor. Upon such appointment and withoutconveyance, the successor trustee shall be vested with all title, powcrs, and duties conferred upon Trustec.Each such appointment and substitution shall be made by a written instrument executed by Beneficiarycontaining reference to this Deed of Trust and its place ofrecord, which when duly recorded in the LosAngeles County Offce of the Recorder shall be conclusive proof of proper appointment of the successortrustee.

42. ACCEPTANCE BY TRUSTEE. Trustee accepts this Trust when this Deed of Trust, dulyexecuted and acknowledged, is made public record as provided by law. Except as otherwise provided bylaw, the Trustee is not obligated to notify any party hereto of pending sale under this Deed of Trust or of any

action or proceeding in which Trustor, Beneficiary, or Trustee shall be a party unless brought by Trustee.

43. WAIVER OF MARSHALING AND CERTAIN RIGHTS. To the extent that Trustor maylawfully do so, Trustor hereby expressly waives any right pertaining to the marshaling of assets, theexemption of homestead, the administration of estates of decedents, or other matter to defeat, reduce or affectthe right of Beneficiary to sell the Securty for the collection of the Loan (without prior or different resort forcollection), or the right of Beneficiary to the payment of the Loan out of the proceeds of sale of the Securityin preference to every other person and claimant.

44. POWER OF ATTORNEY. Trustor hereby irrevocably appoints Beneficiary as Trustor'sattorney-in-fact (such CRNLA being coupled with an interest), and as such attorney-in-fact, Beneficiarymay, without the obligation to do so, in Beneficiar's name or in the name of Trustor, prepare, execute, file

and record financing statements, continuation statements, applications for registration and like papersnecessary to create, perfect or preserve any of Beneficiary's security interests and rights in or to any of the

Security, and upon an Event of Default hereunder, take any other action required of Trustor; provided,

however, that Beneficiary as such attorney-in-fact shall be accountable only for such funds as are actuallyreceived by Beneficiary.

45. SUBORDINATION. This Deed of Trust shall be senior to any other Deed of Trust recorded

against the Property, untess otherwise agreed to by Beneficiary in writing in accordance with the Agreement.

(signature page follows J

,

IN WITNESS WHEREOF, Trustor has executed this Deed of Trust as of the day and year first abovewritten.

Trustor:

Executed this 6th day of December, 2007Travelers Aid Society of Los Angeles, California, Inc.

By: ¿.(/~ By:

Name: Paul HoJlombe Name:

Its: Executive Director Its:

Date: ¡J~ 3D. .:-1 Date: .

,

Beneficiary:

Executed this ~ ~y of

f)uj ,2007

COMMUTY REDEVELOPMENT CRAA OF THECITY~~t7 _BY:~~~ -..Its:

APPROVED AS TO FORM AN LEGALITY:ROCKA J. DELGADILLO, City AttorneyTHE CITY OF LOS ANGELES

By:~._ 0,.--Deputy/Assistant City Attorney

Date: 1-:11.,1 cilTHIS DOCUMENT MUST BE NOTARIZED FOR RECORDING

STATE OF CALIFORNIA ) SS.COUNTY OF LOS ANGELES )

ATTACHMENT 1 TO EXHIBIT D

(LEGAL DESCRIPTION)

ASSESSOR'S IDENTIFICATION NUMBERS: 5544015037

COMMON ADDRESS:1507-1509 Winona BoulevardLos Angeles, CA 90027

BORROWER/OWNER: Travelers Aid Society of Los Angeles

Travelers Aid Society of Los Angeles, California, is a 50l(c)(3), nonprofit corporation, whose headquartcrsis in Hollywood, California, providing counseling services to youths and adults, as well as HIV counselingand education, and emergency food and shelter, and volunteer services.

(J

EXHIBIT ETO AGREEMENT

ANNUAL COMPLIANCE CERTIFICATE

TRAVELERS AID SOCIETY OF LOS ANGELES, CALIFORNIA

The Community Redevelopment Agency of the City of Los Angeles (CRALA)and

Travelers Aid Society of Los Angles, California, Inc. (T ASLA)

CRA Loan Number: 876006-001 Initial Year: 2008-2009

TASLA is required to provide this Annual Compliance Certificate (Certificate) to the CRALA no later thanApri11 of each year, for a ten (10) term, beginning April 1, 2008 and expiring Apri11, 2018.

Based on the Section 3.9 of the Agreement for 1507-1509 Winona Avenue, Los Angeles, CA 90027, theCRALA loan is forgivable at a rate of 10% per year, for ten (10) years, based on T ASLA's annualcompliance with the following terms:

1. T ASLA wil acquire the improved site located at the address above, for the purpose of relocating itsSocial Services Facility from 1720 North Gower Street, Los Angeles California to the Site and shallcontinue its social services at 1507-1509 Winona Boulevard.

2. TASLA will maintain improvements and premises in good condition.

3. T ASLA has maintained the following services for the year beginning on April 1, and endingon March 31 ,t 2 : (Provide specific details of the amount and type of services for eachreporting period including any changes to services.)

4. All TASLA employees at this Site are paid at or above the CRALA's Living Wage.

I hereby certify that the foregoing is true and correct.Date: ,t_~.f'7.;7

Travers Aid Society of Los Angeles California,

a California nonprofit corporation

By:Name:Its:

1~f~/" li t",, ..Ji'l ¿)1Tl'Pr-

EXHIBIT F

Eligible Costs (BUDGET)

Funds to be used for acquisition of Site.

See Attached

EAST WEST BANK

October 22. 2007

Travelers ¡\id Society of Los Angeles1720 N01ih GO\ì.cr Stn:eiLos Angeles. CA 9002S

"..~ ,"" .""" ~ __ ___:~. -1 "):---

Dear 1\-11 Hollombc:

\Vc arc pleased 1O issue this ¡;onmiltmem to extend a cft'dii I3Gility to you on the following tenns andc-ol1dinon~:

Borrowcr: TC1\'èiers :\id Society ofLüs AngelLs. CalifornL3

CrediT Facilìry Amount: S335.000 but not to exceed 60~'o of Bank's" I\s-Is" vahie as reilected by acurrent apprJlsJl and a minimum 1.35: 1.00 debt coverage ratio based on a30 year principal anior!iiation.

Purpose: To purchase ¡he real estate properTY located at 1507-1509 \\'inoiiaBoulc\-an-l Los Angelö. CA.

Pricm.g: A iì.\è"d Tate otS.99¡)/ri. The rate qumed is the rate currently offered onsimilar loans.

Loan Fee:Terms:

SJ~~¡ üCilic l1iJ.\imul1 lüan ~nioum. pJyabk at c1osing.

1vlontli1y payment otpnncipal and interest based on mnoniZ.tion ofiheloan amount over a ptriod or 30 y::ars wiLh balloon payment on ihemaninry date.

r'vlaturity Date: 1 I) years.

Prepa)l11Cnt Fl'e: The prepaym('nt fee IS YYo of the pnncipal balance 111 the tirst year and 1 °'0in the second year. The bOlTO\vcr has 8.n option to pay dO\\1110e principal

balance by' up to 101% in each of the first two years ,vithout penalty.

Collateral: A tìrst priority lien creared by a deed of trust and an assignment ofleases onland and improvements located aT 150i-1509 \Vinona Boulevard, LosAngeles. CA.

Guarantors: NOl1è.

:\ssumpiioJ1'Assignability "Nor permitted. This commitment is only being. made to you.

I ':'.ili :\xenue of die SU.rs. LDS Angdcs. Co\ -,'(I')iÍ7. Tc.L':j Il.ïl ::.J,)fj..lA h:x ?i¡(J.712 ':'i-,'f'x . N3.sdaq: E\ilBC

Costs:

Deposits:

Financial Covenants:

Reporting Covenants:

Conditions:

All cosl pcrtainíg to this facility including appraisaL. environmentalinvestigation and re\'iew. inspections. legal re\1CW, loan documentation andtitle insurance. shall be paid by the borrower. whether provided by theBank's in-house staff or independent third parties.

This proposal is made with the understanding tht all depository bankingscrvices of borrower and its affliatcd entitics wil be provided by East WestBank.

Borrower to maintain on an n annual basis a minimum Debt Sen;ccCoverage Ratio of not less than 1.35:1.00.

Borrower shall provide annual fiscal year-end 06130 audited financialstatements with an opinion saiis factory 10 Bank withi 180 days of eachfiscal year-end of Borrower and, quartcrly company prepared statementswiihin 90 days of the end ofihc cnd of such penod. certified by ihcPresident of Borrower. Borrower shall also provide a tax return for eachtaxable year within io days of actual fiing or the required filing date.whichever is sooner. togethcr wiih such oiher informtion as Bank mayrequire.

The funding of the credit facility is subjccllO the following conditions. allitems and documents to be satisfactory:

Execution and deliver to Bank of a promissory note. a busincss loanagreement. security documents. environmental indemnities. environmentalqucstionmiires, guaranties, subordination and intercreditor documents.assignments of constrctîon contracts. archilLcts contracts. licenses. andother intellectul prope, and other customary documents then required by

Bank for the credit facility descnbed in this commitment. containing thetenns and eonditions descnbed in this commitmnt. and such other tennsand conditions. representations and warrnties. and covenants as Bank mayrequire. The loan documents may contain customa reportng andfinancial covenants and other matters in addition to the matters specificallydescnbed in this commitmniletter. Evenls of default, as required by Bank,include without limitation, cross default to all indebtedness of Borrower forborrowed money. Copies of standard !òrms of documents are availableupon request.

All secunty documents, deeds OltrusL financing statements. fL\lur mings.and other securty documents as may be required by Ban shall have bencxeeuted and delivered and med or recorded, as appropnate.

Evidence of Bank's first pnonty perfected secunty interest in the collateraland a lender's loss payable endorsement respecting insurnce covering allcollateraL. Bank shall require an AL T A title insurce policy insurng thelien posiiion of any deeds oftrust secunng ihe eredit facility logether withsuch endorsements as Bank may request.

20f4

Resolutions, incumbency ccrtificates and other organizational andauthorizing documents from Borrower.

Opinions of Borrower's counsel, which shall include, but not be limìted to.opinions as to Borrower's corprate existencc.Borrower's power andauthority to enter into the loan and security documents referred to above,the validity. binding effect and enforceability of each of the loan andsecurty documents against Borrower, to the extent it is a par thereto. andthe perfection of Bank's liens and security interests in the real and peronalpropert collateral provided by Borrower.

Bank's legal counsel shall have reviewed and approved the underlyingdocumentation.

Casualty and liability insurance on the propert located at 1507-1509Winona Boulevard. Los Angeles. CA

Miscellaneous: Any material adverse change În Borrower's financial conditîon or the valueor perfection of Bank's liens or security interests in any collaterl wouldterminate Bank's commitment to fund under this conunitmettt lelter.

This commitment and any fuiure extension of credit shall be govemed byand constred in accordance with the laws of the State ofCalifomia.Legal jursdiction shall be with the cour of Los Angeles County.

Borrower hereby waives the right to any jury tral,

Good Faith Deposit: Borrower has paid &st West Bank a good faith deposit in the amount of$5,000 and $1'675.00 for Ùlc mte lock. tfBank and Borrower do notconsummate Ùle funding ofihe loan, then Bank will retin to Borrower thebalance of the deposit after deducting all costs and expenses actuallyincured by Bank. Such cosls include. but are not limited to: costs andexpenses incurred by appraisers or by auditors, fees. costs and expenses ofBank's legal counsel (insidc or outside, as applicable) for advising Bank orror preparng documents in connection wiih thc proposed loan: and filingand search fees. tf, however, Ban is willing to fud the loan to Borrowerin accordance with the ter orthîs commitment letter, and Borrowerdeclines and/or obtains the loan from another lending source. Bank shall beentitled to retain thc full amount of the deposit, irrespective of the amountof expenses incurred. lf the loan Îs funded, the amount of the deposit notused for expeses shall be refunded to Borrwer. The depsit wil not besegregated and may be commingled with other funds, and Borrower willnot be entitled to receive interest on said deposit.

30f4

This commitment Idler IS not meant to be, nor sh~ii it be construed as an attempt to dcline all of the tcniisand conditions orilie cr('rlit i~\ciliiy described above, Räther it is intended only to outline certain basic pointsof understanding: around which the legal documentation is to be structured, Further negotiations wiihin thegeneral scope ofthesc major ie1l1S shall not be precluded by the issuance otthis comniiiiiCIl¡ letter and itsaccepTance by' the Borrowcr.

The prO\"lSHmS otthi:' CnmiiilnlCiil lelter shall :surY1Ve the closing otthe loan l~lliijty cxci:pt as m~iy otherwise

bt' spccific::llysd lorth In the loan documems. In the cast ora conllict betwecn ¡hI. krms Olilic loandocuments and ¡his conimitnitl1t kner. the (ÇllT',S ofthè ~o2n documi:n\ .shall ¡ie\'aij oycr the lerms olthiscominiinicnt.

T'1i:: ciìmIlitIli'lii kiter GlInol be changed or icnninJII:'J. orally. All pnor Jgret:1len!s, lIIlGcrstandings_representJ.tioils, \\~liTamiL's. amI ncgoilJ.iìons. il any, \\-heihcr or no¡ in \\Tiiing. including âlìY proposal knerprè\iou':lY lSStlt:J by Bank. are hCli.:'by tlè'rged ¡m:o Thi.s commitment lètlèl.

Your acknO\\lcùgL'mclii olihis lener sh31ì coii:;iin.ne acceptance Oftlîè foregoing 1or11S and conditions.Unless a::ccp:cd or t~:niiin~lled, ihis commit1lènI .shall expire on NO\'eniber 09, 200i. If it is Jcccpicd. thiscommitment shJìl rt'IlJ.1I eticclI\'t unnl December 28, 200ï unless Bank agrees otherwise in wriiing. Bankshaii bun: no fì.rilit:r nblig~itioii liêreiinder J.fier tn3t datè.

Plcë.se illdi(.'~iit your acceptance by sigiiiig and rè11niing a copy otihis let1èl, on or beiè.ile November 09,2007.

Again. we oi\ EaS! \\'cst ß:ink arc pleased to present this Imm c.oniniitment to YOll and look forward to yourresponse.

/ì;";'", V, '0 À- fVir ¡\,i rfj .J I L/ J \.() I ~r,..~t".:.C'L(/~

Shen-y lvlosali:ieiCommercial LOí.ìn ülìlCL'l

1~111L--Siiicerely.

Keny TUTIclSenior RegIDI13ì Vice Presi(l:.'ii¡

ACCEPTED AND ,\GREED TO on j - ¿)/.J;. / r / .2007.

Ti-a\"e1crs Aid Socie!)' otLos Angeles. Califomis

/! /J O:'/'k/~. d"M.¿c¿ cftl~::!::/z-~:/'CBy: -r '., f¿

Kame: c..l-(/..e-L(/J(-' Ç'L',Title:

,",/¿6AL...J¿/C-6- /"

N .B. The eRA/LA'sthe balance.

$864,000 Service Repayment Loan Agreement will pick up

4of4

EXHIBIT GTO AGREEMENT

Evidence of Proj ect Funds

See Attached

~.~ CRAi~~,

d, C '- ,,OS ~:.;C;ê :-

DATE September!3_2007

,-'7"-~, s"¿"_' TëF:, %,:'~G6': F

_co; Cii,'~'~ ~ ~ 1:1:,'1,: www_cr¿ila_org

Paul Hollombe, Executive DirectorMason Shayan, PresidentTravelers' Aid Society of LA/een Canteen1720 Gower StreetHollywood, CA 90028

""--,l"CL

Dear Mr. Hollombe and Mr. Shayan:

This is to confirii that the staff of the Community Redevelopment of Los Angeles(CRMLA) will be submitting, to its Board of Commissioners (the "Board"), arecommendation to execute a Service Repayment Loan Agreement, in the amount of$864,000, with Travelers' Aid Society of Lleen Canteen for the purpose of assistingwith the purchase of a new facility for the Teen Canteen. As you know, Teen Canteenis being displaced as a result of the development of the Gower Villas Supportive

Housing Project. Upon approval by the Board, the action will be submitted to the LosAngeles City Council for action. We anticipate this process to take approximately sixty(60) days.

The terms of the Loan will call for repayment in the form of services to be rendered atthe new Teen Canteen site. The CRA/LA appreciates the value of these services andhopes to see their continuation in the Hollywood area.

Please contact me with any questions or concerns.~IY'~J/~;d j~ùl- V~-

Lkslie Lambert'Regional AdministratorCRlLA Hollywood/Central Region

EXHIBIT HTO AGREEMENT

LIVING WAGE POLICY, CONTRACTOR RESPONSIBILITY ORDINANCE, SERVICEWORKR RETENTION POLICY, EQUAL BENEFITS ORDINANCE

¡Please see attacheáj

.

COMPLIANCECITY OF LOS ANGELESDepartment of Public Works

Bureau of Contract AdministrationOlfice of Contract Compliance

1149 S. Broadway, 3'd Floor, Los Angeles, CA 90015Phone: (213) 847-1922 - Fax: (213) 847-2777

EQUAL BENEFITS ORDINANCE COMPLIANCE FORMYour company must be certified as complying with Los Angeles Administrative Code Section 10.8.2.1, EqualBenefits Ordinance, prior to the execution of a City agreement. This form must be returned to the Citv departmentawardina the aareement. If responding to a request tor bid/proposal, submit this form with the bid/proposal.

City Dept. Awarding Contract: G-flA I L. t1 Contact/Phone: 3)3-C¡(d -'JoSECTION 1. CONTACT INFORMATIONCompany Name: -rra.Ve.\U5 Ihd Sod e.ii ot' L. A" ""ks

Company Address: i 7- ~ 0 rJ MeIJer -r '-City: L.? ~p" State: C- Zip: aOÐ;¡r:Contact Person:' ?llvll~OIl¡)'l~ Phone: '?ó-?"¡b1(3 ,òÖ Fax: '3"d:.'I('ö'd",0 \"I am a one-person contractor, and I have no employees. DYes ~No (if you answered "Yes," go to Section 3)Approximate Number at Employees in the United States: I b- Fie s - t~

Are any ot your employees covered by a collective bargaining agreement or union trust fund? DYes j; No

SECTION 2. COMPLIANCE QUESTIONSHas your company previously submitted a Compliance Form and all supporting documentation? ll Yes D NoIf Yes, AND the benefits provided to vour emplovees have not chanced since that time, continue onto Section 3. IfNo, OR if the benefits provided to vour emplovees have chanced since that time, complete the rest of this form.

In the table below, check all benefits that your company currentlv provides to employees or to which youremployees have access. Provide information for each benefits carrier if vour employees have access tomore than one carrier. Note: some benefits are available or apply to employees because they have a spouse ordomestic partner to whom the benetit applies, such as bereavement leave that allows an employee time olfbecause of the death of a spouse or domestic partner; other benefits are provided directly to the spouse ordomestic parther, such as medical insurance that covers the spouse or domestic nartner as a dependent.

BENEFIT(S) YOUR This Benefi is This Benefit is Available/AppliesAvailable/Applies

to DomesticCOMPANY CURRENTLY Not Offered Available to to Spouses of Partners of

OFFERS to Employees Employees Employees Emolovees

1 Health Insurance lList Name of Carrier(s"Health Carrier 1: 0 0 0 0Health Carrier 2: 0 0 0 0Dadditional carriers on attachment.

2 Dental Insurance (List Name of Carrier(s"Dental Carrier 1: 0 0 0 0Dental Carrier 2: 0 0 0 0o additional carriers on attachment.

3 Vision Plan lList Name of Carrier's"Vision Carrier 1 : 0 0 0 0Vision CarriP. 2: 0 0 0 0

4 Pension/40i7Plans 0 0 U u5 Bereavement Leave 0 0 0 06 Familv Leave 0 0 0 07 Parental Leave 0 0 0 08 Emnloiiee Assistance Proaram 0 0 0 09 Relocation & Travel 0 0 0 0

10 Comoan" Discount Facilities & Events 0 0 0 011 Credit Union 0 0 0 012 Child Care 0 0 0 013 Other: 0 0 0 014 Other: 0 0 0 0

Form OCC/EBO-1 (Rev. 06/06)Page 1

l,

COMPLIANCE

YOU MUST SUBMIT SUPPORTING DOCUMENTATION TO VERIFY EACH BENEFIT MARKED. Without properdocumentation for each carrier and each benefit marked, your company cannot be certified as complying with theEBO. If documentation for a particular benetit does not exist, attach an explanation. Referto the "Documentation toVerify Compliance with the Equal Benefits Ordinance" fact sheet for more information on the type of documentationthat must be submitted to verify compliance with the EBO.

It in the Table in Section 2 you indicated that your company does not provide all benefits equally throughout itsentire operations to all your employees with spouses and employees with domestic partners of the same andditferent sex, you may:

o a. Request additional time to comply with the EBO. Provisional Compliance may be aranted to

Contractors who aaree to fullv complv with the EBO but need more time to incorporate the reauirements ofthe EBO into their operations. Submit the Application for Provisional Compliance (OCC/EBO-3) andsupporing documentation with this Compliance Form.

o b. Request to be allowed to comply with the EBO by providing affected employees with the cash

equivalent. Your company must aaree to provide employees with a cash eauivalent. In most cases, thecash equivalent is the amount ot money equivalent to what your company pays for spousal benefits that areunavailable for domestic partners, or vice versa. Submit a completed Application for Reasonable MeasuresDetermination (OCC/EBO-2) and supportina documentation with this Compliance Form.

o c. Comply on a Contract-by-Contract Basis. Compliance may be aranted on a contract-bv-contract basisfor those Contractors who have multiple locations in the U.S. but cannot complv with the EBO throuohoutthe Contractor's operations. Indicate below the compliance cateaory yOU are requestina:o Contractor has multiple operations located both within and outside City limits. Contractor will comply

with

the EBO only for the operation(s) located within City limits and for employee(s) located elsewhere in theUnited States who perform work relating to the City agreement. Supporting documentation for theaffected operation(s)/employees must be submitted.

o Contractor has no offices within City limits but does have (an) employee(s) working on the Cityagreement located elsewhere in the United States. Contractor will comply with the EBO only foremployee(s) located elsewhere in the United States who perform work relating to the City agreement.Supporting documentation for the affected employee(s) must be submitted.

SECTION 3. EXECUTE THE DECLARATION AND SUBMIT THE FORM TO THE AWARDING DEPARTMENT

This form must be returned to the City department awarding the agreement. If responding to a request forbid/proposal, submit this form with the bid/proposal to the awarding department. The awarding department willforward the form to the Department of Public Works, Bureau of Contract Administration, Ottce of ContractCompliance for review.

DECLARATION UNDER PENALTY OF PERJURYi declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct, andthat i am authorized to bind this entity contractually.

Executedthis '30 ~aYOf NIJJ~

!ltí ~~ /Signature

, in the year "; DOt, at to:; ~-t5(c¡,yI4

,c,(State)

1720 NORTH GOWER STREETMailing Address

PAUL HOLLOMBEName of Signatory (please print)

LOS ANGELES CA 90028City, State, Zip Code

EXECUTIVE DIRECTORTitle

95-1691323Federal lD Number

Form OCC/EBO-l (Rev. 06/06) Page 2

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SUBCONTRACTOR DOCCITY OF LOS ANGELES

Department of Public WorksBureau of Contract Administration

Offce of Contract Compliance1149 S. Broadway Street, 3'° Floor

Los Angeles, CA 90015Phone: (213) 847-1922 - Fax: (213) 847-2777

SUBCONTRACTOR'S DECLARATION OF COMPLIANCEService Contract Worker Retention Ordinance and the Living Wage Ordinance(Los Angeles Administrative Codes Sections 10.36 et seq. and 10.37 et seq.)

A subcontractor (including a sublessee, a sublicensee, or a service contractor to a City financial assistancerecipient) that works on or under the authority of an agreement subject to the Service Contractor WorkerRetention Ordinance (SCWRO) and Living Wage Ordinance (LWO) must comply with all applicable provisions ofthe Ordinances unless specifically approved for an exemption. In general, the SCWRO requires that, in case of asuccessor service contract, a successor prime contractor and its subcontractors shall retain for a 90-day transitionemployment period, certain employees who have been employed by the terminated prime contractor and itssubcontractor, if any, for the preceding 12 months or longer. The basic requirements of the LWO obligate primecontractors and subcontractors:

(a) To pay covered employees a wage no less than the minimum initial compensation of $9.39 per hour (adjustedJuly 1, 2006) with health benefits, as referred to in (c) below, or otherwise $10.64 per hour (adjusted July 1,2006). Such rates shall be adjusted annually and shall become effective July 1:

(b) To provide at least 12 compensated days off per year for sick leave, vacation or personal necessity at theemployee's request, and at ieast 10 additional days per year of uncompensated time off;

(c) Where so elected under (a) above, to pay at least $1.25 per hour per employee toward the provision of healthbenefits for the employees and their dependents:

(d) To inform employees making less than $12 per hour of their possible right to the federal Earned Income TaxCredit (EITC) and make available the forms required to secure advance EITC payments from the employer;

(e) To permit access to work sites for authorized City representatives to review the operation, payroll and relateddocuments, and to provide certified copies of the relevant records upon request by the City; and,

(f) Not to retaliate against any employee claiming non-compliance with the provisions of these Ordinances and tocomply with federal law prohibiting retaliation for union organizing.

A prime contractor is responsible for ensuring that each subcontractor complies with the SCWRO and LWO,including reporting requirements. As part of the reporting requirements, each subject subcontractor must sign andsubmit this Declaration of Compliance to the Office of Contract Compliance within 90 days of execution of thesubcontract. By signing this Declaration of Compliance, the subcontractor certifies that it will comply with allapplicable provisions of the SCWRO, LWO, and their implementing Rules and Regulations, including anyamendments or revisions to the Ordinances and Regulations.

If a subcontractor fails to complete and submit this form to the Offce of Contract Compliance, the primecontractor may be deemed to be in violation of the LWO and SCWRO for failng to ensure itssubcontractor's compliance with the Ordinances. This may result in withholding of payments due theprime contractor, or termination of the prime contractor's agreement with the City.

Check box oniv if appiicable: IJ; certitj under penalty of perjury that I do not have any employeesearning less than $15 per hour working on this City agreement.

Company Name Phone Number1720 N. St.. Los Angeles 323-468-250

Date

r 11Contract Number

-6\\Paul Hollombe Ex cu

Name of Prime Contractor

eRA/LA

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LOAiJ..

Form OCC/LW-5, Rev. 06/06

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CITY OF LOS ANGELES

PLEDGE OF COMPLIANCE WITH CONTRACTOR RESPONSIBILITY ORDINANCE

Los Angeles Administrative Code (LAAC) Section 10.40 et seq. (Contractor Responsibility Ordinance) providesthat, unless specifically exempt, City contractors working under service contracts of at least $25,000 and threemonths, contracts for the purchase of goods and products of at least $100,000, contracts for the purchase ofgarments of at least $25,000, and construction contracts of any amount; public lessees; public licensees; andcertain recipients of City financial assistance or City grant funds, shall comply with all applicable provisions ofthe Ordinance. Upon award of a City contract, public lease, public license, financial assistance or grant, thecontractor, public lessee, public licensee, City financial assistance recipient, or grant recipient, and any itssubcontractor(s), shall submit this Pledge of Compliance to the awarding authority.

The contractor agrees to comply with the Contractor Responsibility Ordinance and the following provisions:

(a) To comply with all federal, state, and local laws in the performance of the contract, including but not limited

to laws regarding health and safety, labor and employment, wage and hours, and licensing laws, whichaffect employees.

(b) To notify the awarding authority within 30 calendar days after receiving notification that any governmentalagency has initiated an investigation which may result in a finding that the contractor did not comply withany federal, state, or local law in the performance of the contract, including but not limited to laws regardinghealth and safety, labor and em ployment, wage and hours, and licensing laws, which affect em pi oyees.

(c) To notify the awarding authority within 30 calendar days of all findings by a governmental agency or courtof competent jurisdiction that the contractor has violated any federal, state, or local law in the performanceof the contract, including but not limited to laws regarding health and safety, labor and employment, wageand hours, and licensi ng laws which affect employees.

(d) If applicable, to provide the awarding authority, within 30 calendar days, updated responses to theResponsibility Questionnaire if any change occurs which would change any response contained within theResponsibility Questionnaire and such change would affect the contractor's fitness and ability to continuethe contract.

(e) To ensure that subcontractors working on the City agreement (including contractors or subcontractors of apublic lessee, licensee, sublessee, or sublicensee that perform or assist in performing services on theleased or licensed premises) shall comply with all federal, state, and local laws in the performance of thecontract, including but not limited to laws regarding health and safety, labor and employment, wage andhours, and licensing laws, which affect employees.

(f) To ensure that subcontractors working on the City agreement (including contractors or subcontractors of apublic lessee, licensee, sublessee, sublicensee that perform or assist in performing services on the leasedor licensed premises) submit a Pledge of Compl iance.

(g) To ensure that subcontractors working on the City agreement (including contractors or subcontractors of apublic lessee, licensee, sublessee, or sublicensee that perform or assist in performing services on theleased or licensed premises) shall comply with paragraphs (b) and (c).

Failure to complete and submit this form to the Awarding Authority may result in withholding ofpayments by the City Controller, or contract termination. 323-468-2500TRAVELERS AID SOCIETY OF LOS ANGELES, 1720 N. Gower St., LOb Angeles, CA 90028

Company Name, Address and Phone Number/1 JI A_A ./_jY4M ~ -

Signature of Offcer or Authorized Representative

11 /30/2007Date

PAUL HOLLOMBE, EXECUTIVE DIRECTOR

Print Name and Title of Offcer or Authorized Representative Löl.,,~ 67~òD(; - Òò I

Contract NumberCOMMNITY REDEVELOPMENT AGENCY, CITY OF LOS ANGELESAwarding City Department

SRIS/CRO-3. Pledge of Compliance (Rev. 5/25/04)