Agenda packet, regular meeting, second session — King City City Council, April 22, 2025 (part 1 of 3)

AGENDA

REGULAR MEETING OF THE

CITY OF KING CITY COUNCIL
AND
Sitting as SUCCESSOR AGENCY OF

THE RDA FOR THE CITY OF KING
TUESDAY APRIL 22, 2025
6:00 P.M.

CITY HALL
212 S. VANDERHURST AVENUE
KING CITY, CALIFORNIA 93930
The City Council meeting will be conducted in hybrid in-person/virtual format.

To join the meeting virtually, please use the link below to join the Zoom meeting:
https://bit.ly/3e0zvaR
Meeting ID: 881 5287 9536
Or by telephone: 1-669-900-9128
Passcode: 052933
In compliance with the Americans with Disabilities Act, if you need special assistance to participate in a City meeting, Please contact the City Clerk's Office (831-386-5925) at least 48 hours prior to the Meeting to ensure that reasonable arrangements can be made to provide accessibility to the meeting.
* Please submit all correspondence for City Council PRIOR to the meeting with a copy to the City Clerk.

CALL TO ORDER
ROLL CALL:

Council Members Oscar Avalos, Robert Cullen, Carlos Victoria, Mayor Pro Tem Carlos DeLeon, and Mayor Mike LeBarre

FLAG SALUTE

CLOSED SESSION ANNOUNCEMENTS

SPECIAL PRESENTATIONS
Proclamation Welcoming West Coast Community Bank
5(A) MAYORS PROCLAMATION WELCOMING WEST COAST COMMUNITY BANK.PDF

PUBLIC COMMENT
Any member of the public may address the Council for a period not to exceed three minutes’ total on any item of interest within the jurisdiction of this Council that is not on the agenda. The Council will listen to all communications; however, in compliance with the Brown Act, the Council cannot act on items not on the agenda. Comments should be directed to the Council as a whole and not to any individual Council Member.

Slanderous, profane or personal remarks against any Council Member, staff member or member of the audience is not permitted.

COUNCIL COMMUNICATIONS & COMMITTEE REPORTS
Individual Council Members may comment on Council business, his or her Council

1. 2.

3. 4.

5. A.

Documents:

6. 7.
the Brown Act, the Council cannot act on items not on the agenda. Comments should be directed to the Council as a whole and not to any individual Council Member.

Slanderous, profane or personal remarks against any Council Member, staff member or member of the audience is not permitted.

COUNCIL COMMUNICATIONS & COMMITTEE REPORTS
Individual Council Members may comment on Council business, his or her Council activities, City operations, projects or other items of community interest. Council Members may also request staff to report back at a subsequent meeting on any matter or take action to direct staff to prepare a staff report for a future agenda.

Thank You Letters From The Mayor
7(A) COUNCIL COMMUNICATIONS LETTERS OF THANK YOU FROM THE MAYOR.PDF

STAFF COMMUNICATIONS
Comments presented by the City Manager, City Attorney or other staff on City business and/or announcements.

CONSENT AGENDA
The following items listed below are scheduled for consideration as a group. The recommendations for each item are noted. Members of the audience may speak on any item(s) listed on the Consent Agenda. Any Council Member, the City Manager, or the City Attorney may request that an item be withdrawn from the Consent Agenda to allow for full discussion. The Council may approve the remainder of the Consent Agenda on one motion. Items withdrawn from the Consent Agenda may be considered by separate motions at the conclusion of the discussion of each item.

Consideration: Meeting Minutes Of April 8, 2025 Council Meeting Recommendation: approve and file.
9(A) 04-08-2025 MINUTES_.PDF
Consideration: City Of King Check Register April 1 Through April 15, 2025 Recommendation: receive and file.
9(B) CITY OF KING CHECK REGISTER APRIL 1-15,2025.PDF
Consideration: King City Police Department Annual Report On Military Weapons For Reporting Period May 14, 2024 Through April 22, 2025
Recommendation: approve the King City Police Department Annual Report on Military Weapons.
9(C) KING CITY POLICE DEPARTMENT ANNUAL REPORT ON MILITARY WEAPONS.PDF

PUBLIC HEARINGS
Consideration : Appeal Of Planning Commission Denial Of A Design Change To Install Carports Instead Of Garages In The Mills Ranch Garden Apartments (Architectural Review Amendment Permit Case No. ARP24-000002)
Recommendation: City Council review the staff report and make a decision to approve or deny the appeal.

7. A.

Documents:

8. 9.

Documents:

10. A.

REGULAR BUSINESS
Consideration: Permanent Supportive Housing Project Funding Agreements Recommendation: 1) approve and authorize the Mayor to execute a funding agreement with the Santa Cruz-Monterey-Merced-San Benito-Mariposa-Managed Medical Care Commission for a grant of $3 million for acquisition of property at 1130 Broadway Street for the permanent supportive housing project; 2) approve and authorize the Mayor to execute a Novation Agreement with the Santa Cruz-Monterey-Merced-San Benito-Mariposa Managed Medical Care Commission and the Housing Authority of Monterey County (HACM); 3) appropriate, approve and authorize the Mayor to execute a funding agreement with HACM to provide funding in an amount up to $389,662 and loan of $1 million for construction costs to renovate the building and property at 1130 Broadway Street for the permanent supportive housing project; 4) approve and authorize the Mayor to execute a Side Agreement with the California Department of Housing and Community Development (HCD) and HACM for disbursement of funding from HCD to the City for repayment of the $1 million loan to HACM; 5) approve and authorize the City Manager to execute an Amendment to the Agreement with the County of Monterey for Encampment Resolution Funding (ERF) for an additional amount of $300,000 for acquisition of property at 1130 Broadway Street for the permanent supportive housing project; 6) authorize the City Manager and City Attorney to make non-substantive changes to the agreements as necessary in a form approved by the City Attorney; and 7) approve fee waivers in the amount of $420,000 for the permanent supportive housing project renovation improvements. 11(A) PERMANENT SUPPORTIVE HOUSING PROJECT FUNDING
AGREEMENT.PDF
Consideration: Permanent Supportive Housing Project Purchase And Sale Agreements Recommendation: 1) approve and authorize the Mayor to execute a purchase and sale agreement with MB Broadway Street, LLC for the acquisition of APN 026-401-020-000 for $4,400,000 contingent upon execution of the settlement agreement with the California Department of Housing and Community Development (HCD) and Medalist Partners Asset Based Private Credit Fund III CRE, LLC and the funding agreement with the Santa Cruz-Monterey-Merced-San Benito-Mariposa-Managed Medical Care Commission; 2) appropriate $3,300,000 from the grant from the Santa Cruz-MontereyMerced-San Benito-Mariposa-Managed Medical Care Commission and $1,100,000 from the HCD settlement agreement for the purchase; 3) approve and authorize the Mayor to execute a purchase and sale agreement for the sale of APN 026-401-020- 000 to the Housing Authority of Monterey County (HACM) for $1 for development and operation of a permanent supportive housing project for chronically homeless individuals; and 4) authorize the City Manager and City Attorney to make nonsubstantive changes as necessary in a form approved by the City Attorney. 11(B) PERMANENT SUPPORTIVE HOUSING PROJECT PURCHASE AND SALE AGREEMENTS.PDF

10. A.

Documents:

11. A.

Documents:

Documents:
individuals; and 4) authorize the City Manager and City Attorney to make non substantive changes as necessary in a form approved by the City Attorney. 11(B) PERMANENT SUPPORTIVE HOUSING PROJECT PURCHASE AND SALE AGREEMENTS.PDF
Consideration: Homekey Project Settlement Agreement
Recommendation: 1) approve and authorize the Mayor to execute a settlement agreement with the California Department of Housing and Community Development (HCD) and Medalist Partners Asset Based Private Credit Fund III CRE, LLC regarding litigation involving the King City Homekey Project at the property located at 1130 Broadway Street contingent upon execution of the funding agreement with the Santa Cruz-Monterey-Merced-San Benito-Mariposa-Managed Medical Care Commission, 2) approve the Declaration of Restrictive Covenants for the Homekey Project at 1130 Broadway Street; and 3) authorize the City Attorney to make non-substantive changes prior to execution if necessary.
11(C) HOMEKEY PROJECT SETTLEMENT AGREEMENT.PDF

CITY COUNCIL CLOSED SESSION
Announcement(s) of any reportable action(s) taken in Closed Session will be made in open session and repeated at the beginning of the next Regular City Council meeting as this portion of the meeting is not recorded.

ADJOURNMENT
The City of King is an equal opportunity provider and employer.

Documents:

12. 13.
5(A)
7(A)

Page 1 of 3 ends

City Council Meeting
April 8, 2025

1.__CALL TO ORDER:

Regular Meeting called to order at 6:00pm by Mayor LeBarre.

2.__ROLL CALL:

City Council: Mayor Mike LeBarre, Mayor Pro Tem Carlos DeLeon, Council member Carlos Victoria, Council member Rob Cullen, Council members Oscar Avalos City Staff: City Manager Steve Adams, City Attorney Roy Santos; City Clerk Erica Sonne

3.__FLAG SALUTE:

The flag salute was led by Mayor LeBarre.

4. CLOSED SESSION ANNOUNCEMENTS:

No reportable action from the last meeting.

5.__SPECIAL PRESENTATIONS:

None

6. PUBLIC COMMUNICATIONS:

Pastor Ken Reese spoke on the Blue Star Campaign where you display a blue start in support of the Police Department. He will be passing out blue stars at the vigil tomorrow night.

David Scaroni with SGH Holdings thanked the Planning Commission for the 5th 1-year extension. He spoke on a long-term renewal of the current CUP for a minimum of 10 years and that they had submitted their application with a check for this earlier today. He stated that there is no better or higher use for the property currently. He stated that they intend to fully execute their rights.

7. COUNCIL COMMUNICATIONS:

Council Member Avalos stated April 29th West Coast Community Bank will be holding their ribbon cutting.

Mayor Pro Tem DeLeon stated he had nothing to report tonight.

Council Member Victoria stated school’s Cafecito is tomorrow, dance this Friday, Medieval fair is this Friday, Day of the Child is April 30th 5-7p.m. He would like to see letters from the mayor sent to the agencies that helped cover City of King for the officers that were attending the funeral for Sgt. Kenedy.

He suggested lunch as well.

Council Member Cullen stated Saturday is the town-wide clean-up and the drop off. He thanked City Councilmember Avalos for attending the Solid Waste Authority Meeting in his absence.

Mayor LeBarre stated if the city council chambers are available, he would like to use that for his Monterey Bay Meeting 12:30pm-3pm. Last month on the 26th he had his update meeting with Speaker Rivas. They had a good conversation on the wastewater treatment plant. He attended Sgt. Kenedy’s funeral, and it was a very nice service. He will be attending Speaker Rivas legislative workshop in Sacramento tomorrow. 9(A)

Page 2 of 3 ends

8. CITY STAFF REPORTS AND COMMENTS:

City Manager Adams stated that the vigil for Sgt. Kenedy 5:30-7:30p.m.

City Attorney Santos had nothing to report this evening.

9. CONSENT
A. Consideration: Meeting Minutes of March 25, 2025 Council Meeting B. Consideration: City of King Check Register March 16, through March 31, 2025 C. Consideration: Meeting Minutes of March 25, 2025 Special Council Meeting D. Consideration: Declaration and Disposition of Surplus Property E. Consideration: King City Chamber of Commerce & Agriculture City-wide Yard Sale F. Consideration: Commission and Committee Appointments G. Consideration: City of King KCCP Payments for the Month of March 2025 Action: Motion to approve consent agenda items A- G by Victoria seconded by Avalos.

AYES: Council Members: LeBarre, DeLeon, Cullen, Victoria, Avalos NOES: Council Members:

ABSENT: Council Members:

ABSTAIN: Council Members:

10. PUBLIC HEARINGS:

None

11. REGULAR BUSINESS
A. Consideration: Housing Market Analysis
Community Development Director Liberto presented this item.

Alexis Wilmot with Zonda Advisory presented a powerpoint presentation of their findings.

Action: The City Council received the Housing Market Analysis from Zonda Advisory accepting it by a motion from Cullen and seconded by Avalos.

AYES: Council Members: LeBarre, DeLeon, Cullen, Victoria, Avalos NOES: Council Members:

ABSENT: Council Members:

ABSTAIN: Council Members:

The closed session items is being pulled from the meeting tonight and not being heard.

12. CITY COUNCIL CLOSED SESSION
A. Conference with Labor Negotiators
Pursuant to Government Code Section §54957
Agency Representative: Steven Adams
Employee Organization: KCCEA and Department Directors
ADJOURNMENT:

Mayor LeBarre adjourned the meeting at 6:51p.m.

Page 3 of 3 ends

Approved Signatures:

Mayor Mike LeBarre City Clerk, Erica Sonne
City of King City of King
Item No. 9(B)

REPORT TO THE CITY COUNCIL
DATE: APRIL 22, 2025
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: MIKE HOWARD, FINANCE DIRECTOR
RE: CONSIDERATION OF CITY OF KING CHECK REGISTER APRIL
1 THROUGH APRIL 15, 2025
RECOMMENDATION:

It is recommended City Council receive and file.

BACKGROUND:

At least once a month, the City Treasurer shall submit to the City Council, a copy of the invoices paid for the previous month.

DISCUSSION:

The purpose of this item is to provide the Council an opportunity to review and monitor ongoing expenditures. These documents are attached.

COST ANALYSIS:

There is no fiscal impact as a result of this action.

ENVIRONMENTAL REVIEW:

No Environmental Review required for this item.

ALTERNATIVES:

The following alternatives are provided for Council consideration:

1. Receive and file the report; or

2. Provide other direction to staff regarding requests for additional information.

4/15/2025 9:54:31 AM Page 1 of 6
Check Report
King City, CA By Check Number
Date Range: 04/01/2025 - 04/15/2025
Vendor Number Vendor Name Payment Date Payment Type Discount Amount Payment Amount Number Payable # Payable Type Post Date Payable Description Discount Amount Payable Amount Bank Code: POOL-WFB-POOL - WELLS FARGO BANK
Payment Type: EFT
CSGCON CSG CONSULTANTS INC 04/11/2025 EFT 0.00 10,786.50 10193 60758 Invoice 04/11/2025 Inspection Services 0.00 10,786.50 GIS GONZALES IRRIGATION SYSTEMS INC 04/11/2025 EFT 0.00 334.09 10194 KC127343 Invoice 04/11/2025 Repair Creek Bridge 0.00 130.00 KC127427 Invoice 04/11/2025 Race Pool Pump Repair 0.00 204.09 M.E. M E DESIGNS 04/11/2025 EFT 0.00 1,189.00 10195
5825 Invoice 04/11/2025 Slide Inspection 0.00 1,189.00
MAGICC NORMA L DOMINGUEZ 04/11/2025 EFT 0.00 5,760.00 10196 6024 Invoice 04/11/2025 Monarch Inn Homeless Shelter Cleaning Se… 0.00 5,760.00 ONLINES ONLINE SOLUTIONS LLC Citizenserve 04/11/2025 EFT 0.00 27,300.00 10197 5998 Invoice 04/11/2025 Citizen Serve User Subscription 0.00 27,300.00 PACIFIC CR PACIFIC CREST ENGINEERING INC 04/11/2025 EFT 0.00 2,250.00 10198 14815 Invoice 04/11/2025 Q1 2025 - Closed Landfill Services - MAR 2… 0.00 2,250.00 ROSSI BROS ROSSI BROS TIRE & AUTO SERVICE 04/11/2025 EFT 0.00 1,605.24 10199 s1B72404 Invoice 04/11/2025 New Tires PW Truck 0.00 1,415.28 s1B72492 Invoice 04/11/2025 Oil Change PW Truck 0.00 189.96 RRM DESIGN RRM DESIGN GROUP INC 04/11/2025 EFT 0.00 753.75 10200 0597-04-0225 Invoice 04/11/2025 KC Downtown Plaza Construction Doc. 0.00 753.75 SPECTRUMT SPECTRUM ENTERPRISE Charter Communication 04/11/2025 EFT 0.00 1,996.22 10201 113362301032125 Invoice 04/11/2025 Internet 0.00 1,996.22 TORO TORO PETROLEUM CORP 04/11/2025 EFT 0.00 1,356.43 10202 CL84759 Invoice 04/11/2025 Fuel 0.00 1,356.43
ZUMAR ZUMAR INDUSTRIES INC 04/11/2025 EFT 0.00 877.10 10203 50401 Invoice 04/11/2025 Replacement Stop Signs 0.00 877.10 Total EFT: 0.00 54,208.33
Check Report Date Range: 04/01/2025 - 04/15/2025
4/15/2025 9:54:31 AM Page 2 of 6
Vendor Number Vendor Name Payment Date Payment Type Discount Amount Payment Amount Number Payable # Payable Type Post Date Payable Description Discount Amount Payable Amount Payment Type: Regular
AFLAC AFLAC 04/11/2025 Regular 0.00 188.42 72577
INV0000610 Invoice 04/11/2025 PAYROLL DEDUCTION - INSURANCE 0.00 85.58 INV0000611 Invoice 04/11/2025 PAYROLL DEDUCTION - INSURANCE 0.00 102.84 ANTHEM BLU ANTHEM BLUE CROSS 04/11/2025 Regular 0.00 4,125.88 72578 CM0000007 Credit Memo 03/28/2025 HEALTH INSURANCE DEDUCTION 0.00 -109.00 INV0000589 Invoice 03/28/2025 HEALTH INSURANCE DEDUCTION 0.00 109.00 INV0000612 Invoice 04/11/2025 HEALTH INSURANCE DEDUCTION 0.00 4,125.88 CAL PERS R CAL PERS RETIREMENTSYSTEM 04/11/2025 Regular 0.00 36,273.62 72579 INV0000618 Invoice 04/11/2025 PERS PEPRA MISC EMPLOYER 0.00 6,338.69 INV0000619 Invoice 04/11/2025 PERS PEPRA MISC EMPLOYEE 0.00 6,242.05 INV0000620 Invoice 04/11/2025 PERS PEPRA SAFETY EMPLOYER 0.00 6,545.20 INV0000621 Invoice 04/11/2025 PERS PEPRA SAFETY EMPLOYEE 0.00 6,540.45 INV0000622 Invoice 04/11/2025 PERS MISC CLASSIC EMPLOYER 0.00 1,569.90 INV0000623 Invoice 04/11/2025 PERS MISC CLASSIC EMPLOYEE 0.00 907.79 INV0000624 Invoice 04/11/2025 PERS SAFETY CLASSIC EMPLOYER 0.00 5,633.51 INV0000625 Invoice 04/11/2025 PERS SAFTEY CLASSIC EMPLOYEE 0.00 2,496.03 CACHLDSUP CALIFORNIA STATE DISBURSEMENT UNIT 04/11/2025 Regular 0.00 522.00 72580 INV0000628 Invoice 04/11/2025 M. DILLON CHILD SUPPORT 0.00 522.00 K.C.P.O.A. K.C.P.O.A. 04/11/2025 Regular 0.00 825.00 72581 INV0000616 Invoice 04/11/2025 KCPOA UNION DUES 0.00 825.00 K.C.P.S.A. K.C.P.S.A. 04/11/2025 Regular 0.00 255.00 72582 CM0000008 Credit Memo 03/28/2025 KCPSA UNION DUES 0.00 -85.00 INV0000590 Invoice 03/28/2025 KCPSA UNION DUES 0.00 85.00 INV0000617 Invoice 04/11/2025 KCPSA UNION DUES 0.00 255.00 ICMA RETIR MISSION SQUARE-302397 04/11/2025 Regular 0.00 8,800.17 72583 INV0000607 Invoice 04/11/2025 EMPLOYER MATCH - ICMA DC 0.00 812.73 INV0000608 Invoice 04/11/2025 EMPLOYER MATCH - ICMA DC 0.00 639.27 INV0000609 Invoice 04/11/2025 EMPLOYER MATCH - ICMA DC 0.00 443.82 INV0000613 Invoice 04/11/2025 DEF COMP EMPLOYEE 0.00 4,438.84 INV0000614 Invoice 04/11/2025 DEF COMP EMPLOYEE 0.00 2,170.24 INV0000615 Invoice 04/11/2025 DEF COMP EMPLOYEE 0.00 295.27 SEIU SEIU LOCAL 521 04/11/2025 Regular 0.00 476.25 72584 INV0000626 Invoice 04/11/2025 SEIU UNION DUES 0.00 476.25 TODAYCASH Today Cash 04/11/2025 Regular 0.00 222.76 72585 INV0000627 Invoice 04/11/2025 Wage Assignment 0.00 222.76 KCTVHARD ALCANTAR HARDWARE INC 04/11/2025 Regular 0.00 246.10 72586 578521 Invoice 04/11/2025 Toilet WWTF 0.00 162.66
578848 Invoice 04/11/2025 1 For 1 Replacement Gloves / PPE 0.00 23.91 578941 Invoice 04/11/2025 Cleaning Supplies 0.00 59.53
ANDRALE ALEXUS ANDRADE 04/11/2025 Regular 0.00 150.00 72587 040525 Invoice 04/11/2025 Baseball Coaching 0.00 150.00 TRUJILLOA ALICIA TRUJILLO 04/11/2025 Regular 0.00 100.80 72588 031225 Invoice 04/11/2025 Rec. Softball 0.00 100.80
AMAZON AMAZON CAPITAL SERVICES INC 04/11/2025 Regular 0.00 687.72 72589 11QF-HN1D-3637 Invoice 04/11/2025 Softball 0.00 326.22
1KR4-7QL3-DJQ7 Invoice 04/11/2025 Flags 0.00 166.73
1LH1-47FD-DNGG Invoice 04/11/2025 Star Cutouts 0.00 19.32 1N6V-LY47-K9GW Invoice 04/11/2025 Keyboard Tray & Wrist Vest 0.00 49.45 1TCV-QR4M-6K… Invoice 04/11/2025 Screen for Ballpark 0.00 126.00 KEREZSI ANITA KEREZSI 04/11/2025 Regular 0.00 2,000.00 72590 Check Report Date Range: 04/01/2025 - 04/15/2025
4/15/2025 9:54:31 AM Page 3 of 6
Vendor Number Vendor Name Payment Date Payment Type Discount Amount Payment Amount Number Payable # Payable Type Post Date Payable Description Discount Amount Payable Amount King City - 25-2 Invoice 04/11/2025 SB 90 Admin 0.00 2,000.00 CARMEL FIR ART BLACK 04/11/2025 Regular 0.00 1,000.00 72591 125117 Invoice 04/11/2025 Fire Sprinkler System Insp. 0.00 250.00 125118 Invoice 04/11/2025 Fire Sprinkler System Insp. 0.00 250.00 125119 Invoice 04/11/2025 Fire Sprinkler System Insp. 0.00 250.00 125120 Invoice 04/11/2025 Fire Sprinkler System Insp. 0.00 250.00 AT&T - C AT&T Calnet 3 04/11/2025 Regular 0.00 78.35 72592 000023226510 Invoice 04/11/2025 Phone Service 0.00 39.31 000023284627 Invoice 04/11/2025 Phone Service 0.00 39.04 BENITEZ SECURITY BENITEZ SECURITY SERVICES 04/11/2025 Regular 0.00 5,376.00 72593 2706 Invoice 04/11/2025 Monarch Inn Security Services 0.00 2,688.00 2727 Invoice 04/11/2025 Monarch Inn Security Services 0.00 2,688.00 CNC ELECTR CLARK N CLEVENGER CNC ELECTRIC AND OUTDOOR POWER 04/11/2025 Regular 0.00 68.49 72594 7967 Invoice 04/11/2025 Equipment + Supplies 0.00 68.49 CNASUR CNA SURETY DIRECT BILL 04/11/2025 Regular 0.00 350.00 72595 053125 Invoice 04/11/2025 City Manager Bond 0.00 350.00 COASTAL COASTAL TRACTOR 04/11/2025 Regular 0.00 275.29 72596 IK08173 Invoice 04/11/2025 Mower Blades 0.00 275.29
DIMES MEDI DIMES MEDIA CORPORATION 04/11/2025 Regular 0.00 325.00 72597 2892 Invoice 04/11/2025 KRKC Ads 0.00 250.00
2771 Invoice 04/11/2025 KRKC Ads 0.00 75.00
SONNE/ERIC ERICA SONNE 04/11/2025 Regular 0.00 83.73 72598 040425 Invoice 04/11/2025 Supplies - PD 0.00 83.73
HERNANH HECTOR HERNANDEZ 04/11/2025 Regular 0.00 50.00 72599 032225 Invoice 04/11/2025 Baseball Coaching 0.00 50.00
GENERAL CO ICC CODIFICATION, INC General Code, LLC 04/11/2025 Regular 0.00 649.00 72600 PG000040724 Invoice 04/11/2025 Municipal Code Updates 0.00 649.00 PARAMOJU JULIA M HERNANDEZ 04/11/2025 Regular 0.00 279.50 72601 JAN-'MAR 2025 Invoice 04/11/2025 Jan-Mar. 2025 Contract Ser. Translate Cou… 0.00 279.50 KC IND KING CITY INDUSTRIAL SUPPLY 04/11/2025 Regular 0.00 988.93 72602 362314 Invoice 04/11/2025 Equipment Repair 0.00 88.20
362383 Invoice 04/11/2025 Trailer Repair 0.00 23.89
362399 Invoice 04/11/2025 Trailer Repair Supplies 0.00 43.94 362523 Invoice 04/11/2025 PPE 0.00 326.14
362590 Invoice 04/11/2025 Sewer Machine Repair 0.00 35.87 362651 Invoice 04/11/2025 Plug Sewer Machine 0.00 13.03 362665 Invoice 04/11/2025 Sewer Machine Repair 0.00 114.00 362817 Invoice 04/11/2025 Spray Field Repairs 0.00 227.84 362832 Invoice 04/11/2025 Spray Field Repair 0.00 128.98 362839 Credit Memo 04/11/2025 Spray Field Repair Credit 0.00 -12.96 CYPRESSW MILES CLIFFORD FARMER CYPRESS WATER SERVICE INC 04/11/2025 Regular 0.00 77,782.80 72603 25445 Invoice 04/11/2025 Wastewater Treatment - Aug 2024 0.00 10,988.60 25446 Invoice 04/11/2025 Wastewater Treatment Plant Operations -… 0.00 10,656.50 25447 Invoice 04/11/2025 Wastewater Treatment Plant Operations -… 0.00 12,812.30 25583 Invoice 04/11/2025 Wastewater Treatment Plant Operations -… 0.00 10,285.60 25584 Invoice 04/11/2025 Wastewater Treatment Plant Operations -… 0.00 10,471.10 25585 Invoice 04/11/2025 Wastewater Treatment Plant Operation - J… 0.00 11,615.70 25586 Invoice 04/11/2025 Wastewater Treatment Plant Operations -… 0.00 10,953.00 MOCO ELECT MO CO ELECTION DEPARTMENT 04/11/2025 Regular 0.00 18,304.32 72604 241118 Invoice 04/11/2025 Election Services 0.00 18,304.32 Check Report Date Range: 04/01/2025 - 04/15/2025
4/15/2025 9:54:31 AM Page 4 of 6
Vendor Number Vendor Name Payment Date Payment Type Discount Amount Payment Amount Number Payable # Payable Type Post Date Payable Description Discount Amount Payable Amount MO CO MAYO MONTEREY COUNTY MAYORS ASSOC % LEAGUE OF CALIFORNIA CITIES 04/11/2025 Regular 0.00 1,621.53 72605 2025 214 Invoice 04/11/2025 MCMA Annual Dues 0.00 1,621.53 PURE WATER PENINSULA PURE WATER INC 04/11/2025 Regular 0.00 44.70 72606 450444 Invoice 04/11/2025 Water Delivery Service 0.00 44.70 PAC PG&E 04/11/2025 Regular 0.00 119.86 72607
032725 Invoice 04/11/2025 Electricity 0.00 119.86
RAILPROS RAILPROS INC RAIL CONSULTING SERVICES 04/11/2025 Regular 0.00 7,508.43 72608 130090389 Invoice 04/11/2025 Jan 2025 - KC Temporary Platform 0.00 3,277.33 130090588 Invoice 04/11/2025 Feb 2025 - KC Temporary Platform 0.00 4,231.10 ROSE BACK ROSE BACKFLOW SERVICES 04/11/2025 Regular 0.00 375.00 72609 4751 Invoice 04/11/2025 Backflow Testing 0.00 375.00
SVSWA SALINAS VALLEY SOLID WASTE AUTHORITY 04/11/2025 Regular 0.00 4,925.89 72610 FY24-25-Q3 Invoice 04/11/2025 Refuse & Recycling Franchise Agreement … 0.00 4,925.89 SUN STREET SUN STREET CENTERS 04/11/2025 Regular 0.00 1,000.00 72611 KING-RKC-111 Invoice 04/11/2025 Cleaning Broadway March 2025 0.00 1,000.00 TWO TEAM C TWO TEAM CONSTRUCTION INC 04/11/2025 Regular 0.00 100,000.00 72612 22577 Invoice 04/11/2025 PP#4 - Visitor Center 0.00 100,000.00 TYLER TECH TYLER TECHNOLOGIES INC 04/11/2025 Regular 0.00 520.00 72613 025-503046 Invoice 04/11/2025 A R 0.00 520.00
U.S. BANCO US BANK EQUIPMENT FINANCE 04/11/2025 Regular 0.00 277.66 72614 550762181 Invoice 04/11/2025 Copier Lease 0.00 277.66
Total Regular: 0.00 276,878.20
Check Report Date Range: 04/01/2025 - 04/15/2025
4/15/2025 9:54:31 AM Page 5 of 6
Vendor Number Vendor Name Payment Date Payment Type Discount Amount Payment Amount Number Payable # Payable Type Post Date Payable Description Discount Amount Payable Amount Payment Type: Bank Draft
EDD EMPLOYMENT DEVELOPMENT DEPT. State of California 04/11/2025 Bank Draft 0.00 7,691.71 DFT0000160 INV0000629 Invoice 04/11/2025 CA STATE TAX WITHHOLDING 0.00 7,691.71 IRS INTERNAL REVENUE SERVICE 04/11/2025 Bank Draft 0.00 25,080.20 DFT0000161 INV0000630 Invoice 04/11/2025 SOCIAL SECURITY WITHHOLDING 0.00 25,080.20 EDD EMPLOYMENT DEVELOPMENT DEPT. State of California 04/11/2025 Bank Draft 0.00 2,310.14 DFT0000162 INV0000631 Invoice 04/11/2025 EFT STATE TAXES W/H 0.00 2,310.14 IRS INTERNAL REVENUE SERVICE 04/11/2025 Bank Draft 0.00 18,956.09 DFT0000163 INV0000632 Invoice 04/11/2025 PAYROLL FEDERAL WITHHOLDING 0.00 18,956.09 IRS INTERNAL REVENUE SERVICE 04/11/2025 Bank Draft 0.00 5,865.50 DFT0000164 INV0000633 Invoice 04/11/2025 MEDICARE WITHHOLDING 0.00 5,865.50 IRS INTERNAL REVENUE SERVICE 04/11/2025 Bank Draft 0.00 18.84 DFT0000165 INV0000634 Invoice 04/11/2025 SOCIAL SECURITY WITHHOLDING 0.00 18.84 IRS INTERNAL REVENUE SERVICE 04/11/2025 Bank Draft 0.00 4.40 DFT0000166 INV0000635 Invoice 04/11/2025 MEDICARE WITHHOLDING 0.00 4.40 Total Bank Draft: 0.00 59,926.88
Regular Checks
Manual Checks
Voided Checks
Discount
Payment
Payment Type Count
Bank Code POOL-WFB Summary
Bank Drafts
EFT's
38 0
0 7
11 0.00

0.00 0.00

0.00 0.00
56 0.00
Payment
276,878.20

0.00 0.00
59,926.88
54,208.33
391,013.41
Payable
Count
83 0
0 7
13 103
Check Report Date Range: 04/01/2025 - 04/15/2025
4/15/2025 9:54:31 AM Page 6 of 6
All Bank Codes Check Summary
Payment Type Discount
Payment
Count Payment
Payable
Count
Regular Checks
Manual Checks
Voided Checks
Bank Drafts
EFT's
38 0
0 7
11 0.00

0.00 0.00

0.00 0.00
56 0.00
276,878.20

0.00 0.00
59,926.88
54,208.33
391,013.41
83 0
0 7
13 103
Fund Name Period Amount
Fund Summary
999 Pooled Cash Fund 4/2025 391,013.41
391,013.41
Item: 9(C)

STAFF REPORT
DATE: April 22, 2025
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: JAMES HUNT, INTERIM CHIEF OF POLICE
RE: CONSIDERATION OF KING CITY POLICE DEPARTMENT

ANNUAL REPORT ON MILITARY WEAPONS FOR REPORTING
PERIOD MAY 15, 2024 THROUGH APRIL 22, 2025
RECOMMENDATION:

It is recommended City Council approve the King City Police Department Annual Report on Military Weapons.

BACKGROUND:

Assembly Bill 481, codified in Government Code sections 7070 through 7075, requires law enforcement agencies to have a “military equipment” use policy adopted by ordinance in place by May 1, 2022 in order to fund, acquire, or use any military equipment. As a result, on April 28, 2022, City Council approved Urgency Ordinance No. 809 authorizing the addition of Policy 708 titled “Military Equipment” to the King City Police Department Policy Manual and codifying it in King City Municipal Code Chapter 7.70 titled “Military Equipment.” Government Code section 7072 requires a law enforcement agency that receives approval for a military equipment use policy pursuant to Section 7071 to submit to the governing body an annual military equipment report for each type of military equipment approved by the governing body within one year of approval, and annually thereafter for as long as the military equipment is available for use. The law enforcement agency shall also make each annual military equipment report required by this section publicly available on its internet website for as long as the military equipment is available for use. The report shall include, at a minimum:
• A summary of how the military equipment was used and the purpose of its use.
• A summary of any complaints or concerns received concerning the military equipment.

CITY COUNCIL

CONSIDERATION OF KING CITY POLICE DEPARTMENT ANNUAL REPORT ON MILITARY WEAPONS FOR REPORTING PERIOD MAY 15, 2024
THROUGH APRIL 22, 2025
PAGE 2 OF 3
• The results of any internal audits, any information about violations of the military equipment use policy, and any actions taken in response. • The total annual cost for each type of military equipment, including acquisition, personnel, training, transportation, maintenance, storage, upgrade, and other ongoing costs, and from what source funds will be provided for the military equipment in the calendar year following submission of the annual military equipment report.
• The quantity possessed for each type of military equipment. • If the law enforcement agency intends to acquire additional military equipment in the next year, the quantity sought for each type of military equipment.

Additionally, within 30 days of submitting and publicly releasing an annual military equipment report pursuant to this section, the law enforcement agency shall hold at least one well-publicized and conveniently located community engagement meeting for the public to discuss and ask questions regarding the report and the agency’s use of military equipment.

DISCUSSION:

The King City Police Department held the community engagement meeting required per statute on March 19, 2025 at 5:30 PM in the Council Chambers.

The meeting was advertised on social media and was entered into the community calendar on the City of King website.

Pursuant to Government Code section 7072, the attached King City Police Department Memorandum (Attachment A) will serve as the King City Police Department annual report for military equipment use.

COST ANALYSIS:

There are no associated costs to approving the Annual Military Weapons Report. There are no plans for the purchase of additional military equipment during the next reporting period.

ENVIRONMENTAL REVIEW:

This matter is not a “project” for the purposes of the California Environmental Quality Act (CEQA) as it does not have the potential for resulting in either a direct physical change to the environment, or a reasonably foreseeable indirect physical change in the environment. No further action is required under CEQA for City Council action.

Revised 08/17/21
EXHIBIT 1

MILITARY WEAPONS REPORT
Date: April 22, 2025
TO: City Council
FR: Chief of Police James Hunt
RE: Annual Military Weapons Report May 15, 2024 – April 22, 2025 The King City Police Department possesses the following equipment in inventory that meets the definition of military equipment as described in Government Code section 7070.
• Skydio S2 Unmanned Aerial System (UAS)
• Skydio X2 Unmanned Aerial System (UAS)
• Remington 870 12-Guage Less Lethal Shotguns
• Colt AR-15 Patrol Rifles
• Colt M4 Patrol Rifles
• Bravo Company MFG BCM 750 AR-15 Patrol Rifles
Summary of Use and Purpose
Skydio S2 & X2 Unmanned Aerial Systems (UAS):

Purpose - To be deployed when its view would assist officers or incident commanders with the following situations, which include, but are not limited to:
• Major collision investigations.
• Search for missing persons.
• Natural disaster management.
• Crime scene photography.
• Public safety and life preservation missions.
• In response to specific requests from local, state or federal fire authorities for fire response and/or prevention.

Use – During this reporting period, the unmanned aerial systems were deployed on multiple missions including, but not limited to:
• Protect public safety by providing an aerial view of illegal fireworks during the Fourth of July. Assisted with fire prevention and enforcement actions. 415 Bassett Street
King City, CA 93930
Phone 831.385.4848
Fax 831.385.4976
Revised 08/17/21
• Enhance officer safety by providing an aerial view of residences during tactical operations, service of search warrants, and search for armed suspects.

Remington 870 12 – Gauge Less Lethal Shotguns:

Purpose - To limit the escalation of conflict where employment of lethal force is prohibited or undesirable.

Authorized Use: Situations for use of the less lethal weapon systems may include, but are not limited to:
• Self-destructive, dangerous and/or combative individuals. • Riot/crowd control and civil unrest incidents.
• Circumstances where a tactical advantage can be obtained. • Potentially vicious animals.
• Training exercises or approved demonstrations.

Use – During this reporting period, the Remington 870 12-Guage Less Lethal Shotguns were deployed for use in the service of search warrants and incidents involving potentially armed and/or physically resistive subjects. However, no less lethal beanbag rounds were actually discharged at an individual.

Colt AR-15/M4 & Bravo Company MFG BCM 750 AR-15 Patrol Rifles:

Purpose – Allows officers to address lethal threats and heavily armed individuals from greater distances with greater precision.

Authorized Use: Situations for use of patrol rifles may include, but are not limited to:
• Confronting persons known to be armed.
• Service of search and/or arrest warrants.
• Yard searches for wanted people fleeing the police.
• Active shooter situations at schools, business, residences, etc.

Use – During this reporting period, the Colt AR-15 patrol rifles were deployed during the service of multiple search warrants, when dealing with subjects know to be armed, and during searches for wanted individuals avoiding law enforcement contact. The Colt AR15 patrol rifles were displayed but not discharged. The Colt M4 patrol rifles were not deployed during this reporting period. Two (2) new Bravo Company MFG BCM 750 AR15 patrol rifles were received and placed in inventory pending arrival of a sling attachment.

Summary of Complaints
There were no citizen complaints concerning the use of military equipment.

Results of Internal Audits
Skydio S2 Unmanned Aerial System:

Revised 08/17/21
All UAS deployments are reviewed by the sergeant managing the UAS team for compliance with department policy. After review, all deployments were determined to be in policy.

Skydio X2 Unmanned Aerial System:

All UAS deployments are reviewed by the sergeant managing the UAS team for compliance with department policy. After review, all deployments were determined to be in policy.

Remington 870 12-Gauge Less Lethal Shotguns:

All use of force incidents are reviewed at each level in the chain of command. The Remington 870 12-Guage Less Lethal Shotguns were displayed during this reporting period but not discharged. Each time they were displayed, a use of force report was generated and reviewed by the chain of command. After review, all deployments were deemed to be within policy.

Colt AR-15/M4 & Bravo Company MFG BCM 750 AR-15 Patrol Rifles:

All use of force incidents are reviewed at each level in the chain of command. The Colt AR-15 patrol rifles were displayed during this reporting period but not discharged.

Anytime they were displayed, a use of force report was generated and reviewed by the chain of command. After review, all deployments were deemed to be within policy. The Colt M4 patrol rifles were not deployed during this reporting period.

Violations of the Military Equipment Use Policy
There were no violations of the military equipment policy and, subsequently, no actions taken.

Total Annual Cost
Skydio S2 & X2 Unmanned Aerial Systems (UAS):

No new drones were purchased during this reporting period and there were no maintenance or training costs.

The Police Department uses AXON Air to manage the UAS Program. This service allows real time livestreaming of UAS video, integration with AXON Evidence and comprehensive program management tools for both UAS systems. The total annual cost for this service is $11,726.

The total annual cost of the UAS program during this reporting period totaled approximately $11,726.

Revised 08/17/21

Remington 870 12-Gauge Less Lethal Shotguns:

No new Remington 870 Shotguns were purchased during this reporting period nor was any new less lethal projectile ammunition.

A total of 75 less lethal projectile rounds were used for training during this reporting period. The ammunition used came from existing inventory and had a monetary value of $675.

Approximately 10 hours of overtime were used during this reporting for less lethal shotgun training. The total cost of the overtime was approximately $767.

The total annual cost (projectile rounds + overtime) of the Remington Less Lethal Shotguns totaled approximately $1442.

Colt AR-15/M4 & Bravo Company MFG BCM 750 AR-15 Patrol Rifles.

No new rifle ammunition was purchased during this reporting period.

A total of 850 rifle rounds were used for training during this reporting period. The ammunition used came from existing inventory and had a monetary value of $510.

Approximately 6 hours of overtime were used during this reporting for patrol rifle training.

The total cost of the overtime was approximately $306.

The total cost of the Colt AR-1/M4 & Bravo Company MFG BCM 750 AR-015 Patrol Rifles for this reporting period was approximately $816.

Quantity Possessed
• One (1) Skydio S2 Unmanned Aerial System (UAS)
• One (1) Skydio X2 Unmanned Aerial System (UAS)
• Eight (8) Remington 870 12-Guage Less Lethal Shotguns • Seven (7) Colt AR-15 Patrol Rifles
• Two (2) Colt M4 Patrol Rifles
• Two (2) Bravo Company MFG BCM 750 AR-15 Patrol Rifles Future Military Equipment Purchases
The King City Police Department has no plans to purchase any new military equipment during this reporting period.

Item No. 10(A)

REPORT TO THE CITY COUNCIL
DATE: APRIL 22, 2025
TO: HONORABLE MAYOR AND CITY COUNCIL
FROM: DOREEN LIBERTO, AICP, COMMUNITY DEVELOPMENT DIRECTOR

MARK MCCAIN, BUILDING OFFICIAL
RE: APPEAL OF PLANNING COMMISSION DENIAL OF A DESIGN CHANGE

TO INSTALL CARPORTS INSTEAD OF GARAGES IN THE MILLS RANCH GARDEN APARTMENTS (ARCHITECTURAL REVIEW PERMIT CASE NO.

ARP24-000002).

RECOMMENDATION:

It is recommended the City Council review the staff report and make a decision to approve or deny the appeal.

BACKGROUND:

On August 30, 2005, the City Council approved the Mills Ranch Specific Plan (Specific Plan) and Mills Ranch Design Manual (Design Manual). The Specific Plan requires building forty (40) Affordable Apartment Units and are referred to as the Garden Apartments. The forty (40) units are divided up into five parcels (Parcel C, Parcel, D, Parcel E, Parcel F, and Parcel G) per recorded Tract Map 1463 (Phase 1) as noted in Figure 1. The Community Housing Improvement System and Planning Association, Inc., (“CHISPA”) will be constructing the forty (40) affordable housing units. On August 4, 2020, CHISPA received approval by the Planning Commission (Architectural Review Permit Case No. P20-000-004) for architectural design of the proposed Garden Apartments. The design at that time included sixteen (16) one-car garage spaces that included one (1) van accessible space. On March 5, 2024, the Planning Commission approved Architectural Review Amendment Case No. ARP23-000001 which approved an increase to the masonry wall fronting the courtyard to 48-inches in height for all five (5) parcels. During this meeting, the Planning Commission also reviewed and discussed the Applicant’s request to remove the garage doors to create carports instead of garage spaces. After the discussion, the Planning Commission moved to not approve the elimination of the garage doors.

CITY COUNCIL
APPEAL OF PLANNING COMMISSION DECISION REGARDINGAR AMEDMENT 24-000002 DESIGN CHANGE
APRIL 22, 2025
PAGE 2 OF 7
On November 26, 2024, CHISPA submitted a new Architectural Review Amendment application identifying further design analysis in support of a design change to build carport spaces instead of garage spaces for all five Garden Apartment parcels. On January X, 2025, at the applicant’s request, the new Architectural Review Amendment item was continued. On March 18, 2025, the Planning Commission considered the amendment. The Resolution to approve the amended Architectural Review Amendment failed to pass by a 3:2 vote. On March 24, 2025, Chispa was sent a letter regarding the Planning Commission determination. On April 4, 2025, Chispa (Appellant) appealed the Planning Commission denial. Municipal Code Section 2.12.050 (b) requires an appeal from any action of the Planning Commission be filed within fifteen (15) calendar days from the date of receipt of notice of action the Planning Commission.

Figure 1
DISCUSSION:

CITY COUNCIL
APPEAL OF PLANNING COMMISSION DECISION REGARDINGAR AMEDMENT 24-000002 DESIGN CHANGE
APRIL 22, 2025
PAGE 3 OF 7
The Mills Ranch Specific Plan (Specific Plan) and Mills Ranch Design Manual (Design Manual) require building forty (40) Affordable Apartment Units and are referred to as the Garden Apartments. The forty (40) units are divided up into five (5) parcels. The Mills Ranch Affordable Housing Program Agreement dated September 1, 2005 (Document No. 2006012630) requires that forty (40) units be available to low income households, all Garden Apartments. The City has included the forty (40) units in the Housing Element to meet the Regional Housing Needs Allocation (RHNA) numbers.

When comparing the Garden Apartment Lot Type to the other Lot Type Specifications (Lane Lots, Cottage Lots, Village, or Orchard) the Garden Apartments Lots are the only lot types without garage standards identified and only identify the number of spaces required as shown in Figure 2. The Specific Plan and Design Manual both require a minimum of fifteen (15) parking spaces per building. The Applicant is proposing no changes to the total count of sixteen (16) spaces which include one van accessible space.

It is important to note that the Specific Plan does not provide any specifications as to which type of parking is required, only the number of spaces to be provided by the project.

This allows for flexibility in the design as long as the necessary number of spaces are provided and that the design be a courtyard style setting with Spanish Revival Elevations.

As CHISPA advanced in the construction drawings they encountered a series of issues that could ultimately affect the overall design and accessibility of the buildings. The California Building Code requires certain materials to be added when building enclosed garage spaces. This then means that the parking spaces will need to be even further reduced in size, making it harder to park vehicles and open and close vehicle doors as compared to on Figure 3. As explained in Chispa’s appeal letter and attached as Exhibit 2, “We did not anticipate the cascade of design issues triggered by adding garage doors, given the small lot sizes, building code constraints, and the requirements for ADA access and electric car chargers.”
Since the project approval, the California Building Code has added a requirement for EV charging outlets for apartments. This requirement has made it more difficult to provide garages due to the increased parking space width needed to access the EV charging unit and access aisle. The California Building Code does not allow enclosed garage spaces to be larger than 1,000 square feet without fire-rated interior walls. These walls reduce the available square footage for parking. Additionally, adding garage doors creates an enclosure that requires internal fire-rated dividing walls, pursuant to the California Building Code. ADA access from the interior courtyard would require tenants to walk or roll wheelchairs across parking spaces. This path of travel would be complicated by the construction of interior walls.

CITY COUNCIL
APPEAL OF PLANNING COMMISSION DECISION REGARDINGAR AMEDMENT 24-000002 DESIGN CHANGE
APRIL 22, 2025
PAGE 4 OF 7
Figure 2
The tight space left to enter and exit a vehicle may result in an unusable space for vehicle parking. In turn may lead to more vehicles being parked on the streets and code enforcement cases for illegal garage conversions.

With the new State law that took effect January 1, 2025, it will further affect street parking due to restricting parking at intersections. The new law prohibits anyone from parking within 20 feet of the vehicle approach side of any marked or unmarked crosswalk or fifteen (15 feet)where a curb extension is present. Therefore, having usable parking spaces within the five parcels will result in a more functional design and conform with the overall intent of the space requirement in the Specific Plan.

CITY COUNCIL
APPEAL OF PLANNING COMMISSION DECISION REGARDINGAR AMEDMENT 24-000002 DESIGN CHANGE
APRIL 22, 2025
PAGE 5 OF 7
With the proposed amendment the Applicant proposes to install a trellis and landscaping to all five parcels as shown in the design on Figure 4. The parking spaces face in the rear of the property and a few on the side of the property. With the adjacent homes already built the visibility of the carports from street view will be minimal.

On March 18, 2025, the Planning Commission on a 3:2 vote did not support the design change from garage spaces to carport spaces. First, the majority of Planning Commissioners felt that the applicant should not have submitted plans in 2020 for garage doors if there was a possibility they could not be provided. Second, the majority of the Planning Commission felt that not providing garages would make the units look different from the market rate units.

Figure 3
Figure 4

CITY COUNCIL
APPEAL OF PLANNING COMMISSION DECISION REGARDINGAR AMEDMENT 24-000002 DESIGN CHANGE
APRIL 22, 2025
PAGE 6 OF 7
Appellant’s Reasons for Approving Appeal
The Appellant provided a list of reasons to grant their appeal, which is attached as Exhibit

2. The following is a summary of the reasons and staff’s responses.

1. New California Building Code Requirements. Since the project was approved in 2020, the Appellant states there are new California Building Code requirements.

These include adding fire-rated interior walls for garages larger than 1,000 square feet and EV charging stations.

Staff Response: This has been verified as correct by staff.

2. ADA Requirements Hampers Access.

Staff Response: This has been verified as correct by staff.

3. Garage Fan Requirements.

Staff Response: A mechanical system is required in the garage.

4. Construction Costs Adds Costs.

Staff Response: All the Code requirements add significant construction costs to the project.

5. Density Bonus Law. The Appellant identifies concessions that can be made by jurisdictions for affordable housing developments under the Density Bonus Law.

The Density Bonus Law (Cal. Government Code Sections 65915-65918) allows local jurisdictions tools to encourage the construction of affordable housing. Some of the concessions include waiver or reduction of development standards and increased densities.

Staff Response: Usually, a development project must be modified and/or reduce the number of units to comply with established objective design standards and other development regulations such as limits on building height, setback, parking, and on-site open space requirements. Concessions and incentives, as defined under State law, allow a developer to deviate from those design standards and/ or development regulations when such regulations potentially make the project economically infeasible for the developer to build. Incentives/concessions include “[a] reduction in site development standards or a modification of zoning code requirements or architectural design requirements … that result in identifiable and actual cost reductions, to provide for affordable housing costs.” [Gov. Code §65915(k)]

EXHIBIT 2

RESOLUTION NO. 2025-5036

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF KING DENYING THE APPEAL BY CHISPA AND UPHOLDING THE PLANNING COMMISSION’S DENIAL

TO AMEND ARCHITECTURAL PLANS TO OMIT GARAGE DOORS FROM PARKING SPACE AREAS (CASE NO. ARP24-000002)
WHEREAS, on March 28, 2005, the City Council (“Council”) certified the Final Subsequent Environmental Impact Report (“FS-EIR”) which analyzed the Mills Ranch Specific Plan; and
WHEREAS, on August 30, 2005, the Council and Planning Commission (“Commission”) held a joint public hearing to approve the Mills Ranch Specific Plan and Mills Ranch Design Manual, subject to Conditions of Approval (as amended by Resolution 05-05 to revise Condition 12c) and adopt Mitigation Measures; and WHEREAS, the Mills Ranch Specific Plan states that the architectural style, character and quality of the affordable housing will be indistinguishable from market rate housing in order to have them blend harmoniously into the overall fabric of the community; and
WHEREAS, on September 15 2005, the City of King entered into the Mills Ranch Affordable Housing Program Agreement which required forty (40) units be available to low income households, all shall be Garden Apartments, and as part of the City’s Inclusionary Housing Ordinance; and
WHEREAS, on August 4, 2020, the Commission approved Architectural Review (“AR”) Case No. P20-000-004 and Landscape Design Review Case No. LDR 2020-0001 for the Community Housing Improvement System and Planning Association, Inc., (“CHISPA”) Mills Ranch Affordable Housing Project, which includes forty (40) units on five (5) parcels with garages and garage doors (“Original Project”); and WHEREAS, on November 26, 2024, CHISPA submitted an Architectural Review Permit Amendment Case No. ARP24-000002, for a design change to install carport spaces instead of garage spaces in order to provide accessible parking spaces for all five (5) apartment parcels within the Mills Ranch Specific Plan Subdivision (“Amended Project”); and
WHEREAS, on March 18, 2025, the Commission after reviewing the staff report, and accepting public testimony, denied the Amended Project to not include garage doors for the parking spaces structures on a 3:2 vote because the request was not in substantial conformance with the Original 2020 approval and without the garage doors, would not provide a consistent architecture with market-rate houses; and WHERAS, on April 4, 2025, Chispa submitted an appeal for Council consideration of the Commission’s denial.

NOW, THEREFORE, BE IT HEREBY RESOLVED that the City Council of the City of King denies the Appeal to change the design to omit garage doors from the parking space area (Architectural Review Permit Amendment Case No. ARP24-000002) because without garage doors, the affordable units would be distinguishable from market rate EXHIBIT 3
housing and is inconsistent with the Mills Ranch Specific Plan and the August 4, 2020 Planning Commission approval.

This resolution was passed and adopted this 22ND day of April 2025, by the following vote:

AYES:

NAYS:

ABSENT:

ABSTAIN:

ATTEST
________________________________
ERICA SONNE, City Clerk

CITY OF KING
By: __________________________
MIKE LEBARRE, Mayor
APPROVED AS TO FORM:
_____________________________________
ROY SANTOS, City Attorney
Aleshire & Wynder, LLP
I, ______________________________, City Clerk of the City of King, California, DO HEREBY CERTIFY that the foregoing is a true and accurate copy of the Resolution passed and adopted by the City Council of the City of King on the date and by the vote indicated herein
RESOLUTION NO. 2025-5037

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF KING UPHOLDING THE APPEAL BY CHISPA OF THE PLANNING COMMISSION’S DENIAL TO AMEND

ARCHITECTURAL PLANS TO OMIT GARAGE DOORS FROM PARKING SPACE AREAS (CASE NO. ARP24-000002)
WHEREAS, on March 28, 2005, the City Council (“Council”) certified the Final Subsequent Environmental Impact Report (“FS-EIR”) which analyzed the Mills Ranch Specific Plan; and
WHEREAS, on August 30, 2005, the Council and Planning Commission (“Commission”) held a joint public hearing to approve the Mills Ranch Specific Plan and Mills Ranch Design Manual, subject to Conditions of Approval (as amended by Resolution 05-05 to revise Condition 12c) and Mitigation Measures; and WHEREAS, the Mills Ranch Specific Plan states that the architectural style, character and quality of the affordable housing will be indistinguishable from market rate housing in order to have them blend harmoniously into the overall fabric of the community; and
WHEREAS, on September 15 2005, the City of King entered into the Mills Ranch Affordable Housing Program Agreement which required forty (40) units on five (5) parcels be available to low income households, all shall be Garden Apartments, and as part of the City’s Inclusionary Housing Ordinance; and
WHEREAS, on August 4, 2020, the Commission approved Architectural Review (“AR”) Case No. P20-000-004 and Landscape Design Review Case No. LDR 2020-0001 for the CHISPA Mills Ranch Affordable Housing Project, which includes 40-units on five parcels (“Original Project”); and
WHEREAS, on March 5, 2024, the Commission approved an Architectural Review Amendment (ARP23-000001) to increase the courtyard masonry wall to forty-eight (48”) inches in height for all five (5) parcels; and
WHEREAS, on November 26, 2024, CHISPA submitted an Architectural Review Permit Amendment Case No. ARP24-000002, for a design change to install carport spaces instead of garage spaces in order to provide accessible parking spaces for all five (5) apartment parcels within the Mills Ranch Specific Plan Subdivision (“Amended Project”); and
WHEREAS, the site is zoned Planned Development/Specific Plan (“P-D/SP”) and is designated Planned Development (“PD”) in the General Plan Land Use map; and WHEREAS, the proposed amended architectural design complies with the Mills Ranch Specific Plan and Mills Ranch Design Manual; and
WHEREAS, on March 18, 2025, the Commission after reviewing the staff report, and accepting public testimony, denied the Amended Project to not include garage doors for the parking spaces structures on a 3:2 vote because the request was not in substantial conformance with the Original 2020 approval and without the garage doors, would not provide a consistent architecture with market-rate houses; and EXHIBIT 4
WHERAS, on April 4, 2025, Chispa submitted an appeal for Council consideration of the Commission’s denial; and
WHEREAS, on April 22, 2025, the Council considered all the evidence, including the staff report, staff presentation and public testimony, during the public hearing and upheld the appeal based on the following findings of fact:

1. The Amended Project includes design features that are provided in the Mills Ranch Specific Plan and Design Manual. The Amended Project will be built in substantial conformance with the courtyard apartment design in the Mills Ranch Design Manual, meet the required setbacks, parking and building height requirements and is similar to market-rate units in the Mills Ranch project.

2. The Amended Project includes the Original Project’s architectural style of Spanish Revival elevation that meets the architectural style, paint scheme and character as desired with the Mills Ranch Specific Plan which allows these apartments to meld harmoniously into the overall neighborhood and market-rate units.

3. The Amended Project is subject to conformance with the Mills Ranch Affordable Housing Program Agreement dated September 1, 2005 by the Developer and the City and other conditions of approval of the Original Project.

4. This project has already been environmentally assessed by the City. A Subsequent Focused Environmental Impact Report (“EIR”) was certified by City Council on March 28, 2005 for the Mills Ranch Subdivision. This project comprises a portion of the project that was originally assessed, or no substantial new information that was not previously known when the project was originally assessed. No further action under CEQA is required.

NOW, THEREFORE, BE IT HEREBY RESOLVED that the City Council of the City of King approves Architectural Review Permit Amendment Case No. ARP24-000002, approving the design change to install carport spaces instead of garage spaces to all five parcels of the Garden Apartments, in accordance with Exhibits 1, and all conditions of approval originally adopted for Architectural Review Case No. P20-000-004, as presented.

This resolution was passed and adopted this 22nd day of April 2025, by the following vote:

AYES:

NAYS:

ABSENT:

ABSTAIN:

ATTEST
________________________________
ERICA SONNE, City Clerk

REPORT TO THE CITY COUNCIL
DATE: APRIL 22, 2025
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: STEVEN ADAMS, CITY MANAGER
RE: CONSIDERATION OF PERMANENT SUPPORTIVE HOUSING

PROJECT FUNDING AGREEMENTS
RECOMMENDATION:

It is recommended the City Council: 1) approve and authorize the Mayor to execute a funding agreement with the Santa Cruz-Monterey-Merced-San BenitoMariposa-Managed Medical Care Commission for a grant of $3 million for acquisition of property at 1130 Broadway Street for the permanent supportive housing project; 2) approve and authorize the Mayor to execute a Novation Agreement with the Santa Cruz-Monterey-Merced-San Benito-Mariposa Managed Medical Care Commission and the Housing Authority of Monterey County (HACM); 3) appropriate, approve and authorize the Mayor to execute a funding agreement with HACM to provide funding in an amount up to $389,662 and loan of $1 million for construction costs to renovate the building and property at 1130 Broadway Street for the permanent supportive housing project; 4) approve and authorize the Mayor to execute a Side Agreement with the California Department of Housing and Community Development (HCD) and HACM for disbursement of funding from HCD to the City for repayment of the $1 million loan to HACM; 5) approve and authorize the City Manager to execute an Amendment to the Agreement with the County of Monterey for Encampment Resolution Funding (ERF) for an additional amount of $300,000 for acquisition of property at 1130 Broadway Street for the permanent supportive housing project; 6) authorize the City Manager and City Attorney to make non-substantive changes to the agreements as necessary in a form approved by the City Attorney; and 7) approve fee waivers in the amount of $420,000 for the permanent supportive housing project renovation improvements.

CITY COUNCIL

CONSIDERATION OF PERMANENT SUPPORTIVE HOUSING PROJECT

FUNDING AGREEMENTS
APRIL 22, 2025
PAGE 2 OF 5
BACKGROUND:

Due to low-income levels and a critical shortage of housing, King City has experienced a high amount of homelessness for a small community. A substantial number of homeless individuals formerly resided in encampments in the Salinas Riverbed area, which created issues regarding unsafe living conditions, environmental damage, public safety concerns, and fire hazards. In 2022, the encampments were displaced by a major fire, which included one death. The City has provided a number of temporary shelter options since that time.

A more extensive and permanent solution became possible with approval of a State Homekey Project grant in 2022. The Days Inn located at 1130 Broadway Street was selected as the site for conversion to a permanent supportive housing project. It was acquired by the City’s private developer partner, but the project was severely mismanaged by the developer and the property was ultimately lost to foreclosure. This led to a lawsuit filed by HCD against the City for violation of the terms of the grant agreement even though the City had not received any of the funding.

The City, along with the County of Monterey, Housing Authority of the County of Monterey (HACM) and other partner agencies refused to give up after so much progress had been made. Alternate funding strategies were developed to complete the Homekey project. The City is now ready to proceed with the project, and several funding agreements are recommended for approval to secure grants necessary to fully fund the project.

DISCUSSION:

To proceed with the project, HACM has agreed to assume the role of developer.

Staff have reached agreement on a purchase and sale agreement to acquire the property from the lender who foreclosed and took ownership of the property.

Medalist Partners Asset Based Private Credit Fund III CRE, LLC is the company who foreclosed on the property and is also a party to the settlement agreement.

A separate purchase and sale agreement is proposed to direct deed the property to HACM for a cost of $1.

HACM will renovate the property and contract with Step Up on Second Street, a non-profit service provider, to operate it and deliver services to the permanent housing residents. HACM will coordinate and provide property management services for the housing units, which will be leased to eligible participants. This holistic approach ensures that residents have the resources they need to succeed. HACM and Step Up on Second Street will also collaborate with other

CITY COUNCIL

CONSIDERATION OF PERMANENT SUPPORTIVE HOUSING PROJECT

FUNDING AGREEMENTS
APRIL 22, 2025
PAGE 3 OF 5
local service providers to deliver these essential services efficiently and effectively.

There are three major sources of funding for the project: 1) an Encampment Resolution Funding program (ERF) grant obtained from the State of California by the County of Monterey in partnership with HACM; 2) funding provided for property acquisition and construction from HCD under the terms of the settlement agreement; and 3) a grant approved by the Santa Cruz-Monterey-Merced-San Benito-Mariposa-Managed Medical Care Commission. They operate under the title of Central Coast Alliance for Health (CCAH). Commitments for several other funding sources have also been obtained to make up the remainder of the project budget.

The County has prepared agreements for the ERF grant with HACM for construction funds and with the City for funds to operate the Monarch interim shelter facility, which was previously approved by the City Council. An amendment to the County’s Agreement with the City is proposed to add $300,000 for property acquisition costs. CCAH has issued agreements with the City for funding for property acquisition and with HACM for additional funding for construction. They also require a Novation Agreement, which transfers the obligations under the grant to HACM once the City transfers the property to them.

In addition to the settlement agreement, HCD has proposed a Side Agreement to set forth the terms of disbursing the funding for construction costs.

Staff are proposing the City provide funding assistance for property acquisition closing costs, construction budget contingency funding and fee waivers. Fee waivers primarily involve development impact fees. Since the project involves remodel of an existing structure and no increase in square footage, there is some question whether development impact fees are required. Therefore, the City Council has discretion in determining whether they should be charged. The project budget includes estimated building permit fee costs to reimburse the City for direct costs that are incurred.

Staff also recommend the City provide HACM a $1 million no-interest bridge loan for the construction funding being provided by HCD. HACM is unable to up front the payment for that amount of expenditures. Under the funding agreement, once all other funding obtained is expended by HACM, they will invoice the City for additional construction costs incurred up to $1 million. The City will then be repaid by HCD once the project is completed.

Staff recommend the City Council approve agreements necessary to accept grant funding from CCAH, the disbursement agreement with HCD, and an agreement with HACM to provide City financial assistance for construction costs.

CITY COUNCIL

CONSIDERATION OF PERMANENT SUPPORTIVE HOUSING PROJECT

FUNDING AGREEMENTS
APRIL 22, 2025
PAGE 4 OF 5
Other agreements are concurrently being executed with HACM and other partner organizations for other funding sources. There are a total of 13 agreements that have been prepared, reviewed and coordinated to implement the overall project completion.

COST ANALYSIS:

The total project budget is $16,779,595, which includes acquisition, construction, and initial operating costs. The approved revenue sources include the following:

Encampment Resolution Funding Grant $6,134,596
CalAIM $450,000
COC HHAP 3 Grant $465,057
County of Monterey Health Department Funding $300,000
City of King PLHA and General Fund $389,662
HCD Funding Appropriation $2,100,000
City of King Fee Waivers $420,000
HACM Project Based Vouchers $1,341,600
CCAH $5,178,680
Total $16,779.595
Of the $389,662 provided by the City, $77,662 will be from PLHA grant funding, $75,000 from an allocation of funding from KCCP, and $237,000 will be from the General Fund unappropriated fund balance. However, $300,000 will be identified as contingency funds in the project construction budget and will only be used if needed after all other funds have been exhausted.

ENVIRONMENTAL REVIEW:

As a Homekey project, the permanent supportive housing project is exempt from CEQA under State law. NEPA review was previously prepared and approved for the project.

ALTERNATIVES:

The following alternatives have been identified for City Council consideration:

1. Approve staff’s recommendations;

2. Direct staff to modify terms of agreements and/or funding commitments;

3. Do not approve proceeding with the project; or

4. Provide staff other direction.

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LETTER OF AGREEMENT FOR THE ALLIANCE HOUSING FUND

SANTA CRUZ-MONTEREY-MERCED-SAN BENITO-MARIPOSA MANAGED MEDICAL CARE

COMMISSION
AND

CITY OF KING
This Letter of Agreement for the Alliance Housing Fund (“Agreement”), effective upon the date of the last signature (“Effective Date”), is entered into between Santa Cruz-Monterey-Merced-San Benito-Mariposa Managed Medical Care Commission, operating as Central California Alliance for Health (“Alliance”), and the City of King (“Partner”).

Recitals
Whereas, the Alliance has established the Alliance Housing Fund (“Alliance Housing Fund”) to offer awards to health care providers and community organizations to support efforts that advance the Alliance mission to provide accessible, quality health care guided by local innovation in the Alliance’s service area;
Whereas, the Alliance may award Alliance Housing Fund funds to Alliance contracted providers and non-contracted organizations;
Whereas, the Alliance has agreed to award Partner Alliance Housing Fund funds, contingent upon Partner’s performance as set forth herein, to be used by Partner for the purpose of performing the project described in the Statement of Work attached as Exhibit 1 (the "Project") and Partner desires to receive Alliance Housing Fund funds from the Alliance for performing the Project; Now Therefore, the Alliance and Partner agree that all funds awarded to Partner under the Alliance Housing Fund shall be subject to the terms and conditions of this Agreement.

1. Alliance Housing Fund Background. The Alliance established the Alliance Housing Fund to fund projects in the areas of permanent housing, recuperative care, and short-term post-hospitalization housing. The Alliance earned funds from the Housing and Homelessness Incentive Payment Program (“HHIP”), a voluntary incentive program that enabled Medi-Cal managed care plans (“MCPs”) to earn incentive funds for making progress in addressing homelessness and housing insecurity as social determinants of health. The Alliance shall utilize HHIP funds earned by the Alliance to fund the Alliance Housing Fund in a manner consistent with the terms of HHIP, any terms imposed as a condition of federal approval of HHIP, and any Department of Health Care Services (“DHCS”) guidance related to HHIP. The Alliance may also utilize funds from the Alliance’s Medi-Cal Capacity Grant Program (“MCGP”) to fund the Alliance Housing Fund as the Alliance deems appropriate. The Partner submitted a letter of intent (“Letter of Intent”) to the Alliance containing Partner’s gaps and needs information and certain modified terms from the letter of intent earlier submitted by the 11(A) Exhibit 1

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Housing Authority of the County of Monterey (“HACM”), which the Alliance relied upon in determining the terms of this Agreement, including but not limited to the terms of the Statement of Work attached to this Agreement as Exhibit 1 and hereby incorporated by reference (“SOW”). The actual amount of the funds awarded to Partner (“Award”) shall be determined by and contingent upon Partner’s completion of the Project as outlined in the SOW.

2. Statement of Work. Subject to the terms and conditions stated in this Agreement, the Alliance agrees to provide the Award to Partner for completing the Project described in the SOW. Partner represents and warrants to the Alliance that: (i) Partner’s performance under this Agreement shall be conducted with due diligence and in a competent, efficient, timely manner, and in full compliance with the highest professional standards of practice in the industry; (ii) if Partner’s work requires any licenses, Partner has, or will have prior to commencement, obtained all such licenses and all such licenses shall be in full force and effect during the Funding Term; (iii) the Project, when completed, will be in conformity with all of the requirements set forth in this Agreement and will be free of material errors or defects.

3. Liaison. The Alliance and Partner will each designate a liaison(s) to serve as a point of contact for activities performed related to this Agreement.

4. Utilization and Amount of Award. The amount of the Maximum Award shall be set forth in the SOW reflects the Project funding needs described in Partner’s Letter of Intent.

Partner acknowledges and agrees that the actual Award shall be granted in consideration of and on condition that Partner expends Award funds only for the purpose of performing its obligations as set forth in this Agreement. To the extent that Partner anticipates it will be unable to utilize or does not actually utilize any portion of the Award funds to perform the Project in conformance with the terms of this Agreement, the SOW, and the Project Plan, Partner shall notify the Alliance and return any such Award funds. Partner agrees to assume any obligation to furnish any additional funds that may be necessary to complete and maintain the Project described in this Agreement and the SOW. All costs accrued prior to the Effective Date are not eligible for reimbursement unless specifically provided for in the terms of the SOW.

5. Payment Schedule. The schedule for the payment of the Award is set forth in the SOW.

6. Payment Documentation. The timing, scope, and format of the documentation that Partner shall provide to the Alliance to request funds is set forth in the SOW. The Alliance reserves the right to request additional documentation as it deems necessary to validate the use of Award funds, either before or after use by Partner, and shall have the right at its sole discretion to withhold any payment pending any questions that it may have regarding the use of funds. The Alliance reserves the right to enter into a separate agreement with a third party

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to ensure that the covenants of this Agreement are met by the Partner, including but not limited to those of the SOW.

7. Recoupment. Should Partner only partially achieve certain Milestones despite Partner’s good faith attempt to complete the Milestones in their entirety, the Alliance may assess whether and to what extent partial payment is appropriate. If the Alliance determines that the Partner’s partial Milestone achievement effectively supports Project goals, then the Alliance may, at its sole discretion, award partial payment in an amount the Alliance deems appropriate for the Partner’s contribution to the Project goals. Notwithstanding the foregoing, the Alliance shall be under no obligation to award partial payments for incomplete Milestones.

It is at the Alliance’s sole discretion to determine if Partner must return part or all of any Award payment for partially-completed Project Milestones. Partner agrees to return any Award payments that Partner already received under this Agreement for incomplete Milestones as the Alliance may direct, even if such funds were properly used.

8. Disputed Amounts. The Alliance shall be permitted to withhold payment of any amounts for which the Alliance, in good faith, disputes or contests, including reducing such payment amounts by a recoupment consistent with the above terms. In the event of a good faith dispute pursuant to which the Alliance believes it is entitled to withhold or recoup payments, the Alliance may withhold payment of the disputed amount provided that, within thirty (30) calendar days following the Alliance’s receipt of the progress or final report which initiates the interim or final payment and which the Alliance in good faith deems to be in dispute, the Alliance shall notify Partner in writing with a detailed explanation stating the factual basis for the Alliance’s withholding or recoupment of payment. To contest such withheld amounts, Partner must, within ten (10) calendar days following receipt of the Alliance’s notice of disputed amounts, respond to the Alliance in writing with a detailed explanation stating the factual basis, if any, for Partner, in good faith, demanding payment on any amount in dispute. Parties shall negotiate in good faith to resolve the dispute before pursuing other available legal remedies.

9. Permissible Use of Funds. Award funds may only be used for the purpose of paying expenses that are actually incurred by Partner in carrying out the SOW and Project Plan during the 39-month period for which the Award has been provided, or during such other period of time as the Alliance may explicitly agree to in this Agreement or the final approved Project Plan. Expenses that may be funded by Alliance Housing Fund funds are those described in the final approved Project Plan. Partner is responsible for ensuring that actual expenditures are for eligible Project costs.
a. Funds may be used for capital expenditures only, which can include equipment and furnishings that are necessary for the delivery of care or equipment essential to the operation of the facility. However, funds cannot be used for the following purposes, and any amounts budgeted for such unapproved uses will be deducted from payment amounts awarded hereunder:

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i. The Award cannot be used for rental subsidies, operating costs, or services. ii. No part of the Award may be used to fund administrative services or other operating expenses of the Partner, regardless of whether such administrative services or other operating expenses would be utilized to support the completion of the Project.
iii. No part of the Award may be used to fund expenses related to religious activities, lobbying, or political action by the Partner. iv. Unless specifically provided for in the terms of the approved Project Plan or SOW, in the event that the Award provides funding for a project that was already in progress on the Effective Date, no part of the Award may be used to fund costs accrued for activities completed or costs incurred prior to the Effective Date.
v. Partner may not use Award funds to cover expenditures that have already been funded through other sources.
vi. All Project-related costs are site-specific, and must relate to, occur, or be used at the single proposed site that is contained in the Agreement.

10. Reporting. Partner shall provide the Alliance with two progress reports due upon completion of each Milestone Phase as indicated in the Payment Schedule set forth in the SOW. Partner shall also provide a final report due one (1) calendar year from the Implementation Phase Three Completion Date, but in any event no later than the end of the Funding Term. The reporting templates will be provided by the Alliance and available on the Alliance’s online incentives portal. Partner will submit the progress and final reports through the Alliance’s online incentives portal. Failure to submit these report(s) will be considered a material breach of this Agreement, may delay interim or final payments of the Award and may disqualify Partner from receiving future funding from the Alliance.

11. Evaluation and Monitoring. The Alliance may monitor and conduct evaluation of operations under this Agreement. This may include a visit from Alliance staff to observe the Partner’s operations related to the Project and the Award, discuss the Project and program activities with the Partner’s personnel, and review financial or other records and materials connected with the Project activities financed by the Award.

12. Corrective Action. While uncommon, there may be extraordinary and rare circumstances in which the Alliance deems it necessary or desirable to utilize a corrective action plan for modifying the Agreement terms to facilitate the Partner’s compliance with its terms, including adjustment of Milestones, the amount of the Award, completion documentation, and/or extension of completion dates. Partner shall promptly notify the

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Alliance if Partner anticipates it will not timely achieve any Milestones outlined in the SOW in their entirety, along with a written explanation and any documentation supporting the reasons for Partner’s delay. Circumstances within Partner’s control shall not in themselves be considered sufficient justification for granting a corrective action. Partner noncompliance with modified terms under a corrective action plan shall result in termination of this Agreement consistent with Sections 12 and 18, except to the extent that the Alliance elects to further modify the terms of the Agreement in accordance with the foregoing.

13. Bad Faith Recoupment. The Alliance reserves the right to request additional documentation as it deems necessary to validate Partner’s use of the Award, either before or after Partner’s use. If the Alliance reasonably determines that Partner is in breach of Partner’s implied covenant of good faith and fair dealing by failing to take reasonable steps to achieve Milestones or deliver the deliverables, then the Alliance may, in its sole discretion, recoup, withhold, or reduce all or part of any Award payment, as applicable.

14. Compliance with Other Obligations. Partner shall comply with laws and regulations and any regulatory agreements, commitments or undertakings that are imposed on Partner as a result of its receipt of funding from other sources pursuant to Sections 17, 21, 23, and the SOW.

15. Books and Records. Partner agrees to maintain satisfactory financial accounts, documents, and records in connection with the Award sufficient to fully document its compliance with all contractual, grant, and legal requirements, and to make such records available to the Alliance, the State of California, the United States Department of Health and Human Services, the Comptroller General of the United States, or as otherwise required by law. Partner also agrees to retain such financial accounts, documents and records for three (3) calendar years following termination of this Agreement. Partner agrees to maintain and make available for inspection by the Alliance accurate records of all of its costs, disbursements, and receipts with respect to its activities under this Agreement.

16. Funding Promotion. Any materials used to advertise, announce, or otherwise inform the public of the receipt of the funding provided for hereunder shall describe the funding and the work funded by the Alliance accurately, and in a way that conforms to the purpose statement in the SOW. Any such materials that mention or include information about the Alliance shall refer to the health plan as “Central California Alliance for Health (the Alliance)” on first usage and “the Alliance” thereafter. Any published list of funders who have supported activities related to this funding must include the Alliance. Funded organization must inform the public about the Alliance’s funding through the use of signage, acknowledgement in published materials, news media, social media, websites, or other public announcements, as applicable.

All materials produced in accordance with this Agreement (including but not limited to training curriculum, agendas, newsletters, flyers, brochures, reports, and videos, etc.) shall contain a statement that the material is funded through the Alliance. Funded organizations who receive funding for the purpose of constructing or renovating a building must

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memorialize Alliance financial support with a plaque. Funded organizations must refer to the Alliance’s Promotion Toolkit for Funded Partners for instruction on the required promotional verbiage, use of Alliance name and Alliance logo in promotional activities. If a funded organization wishes to execute promotional activities or communication not included in the toolkit, the funded organization must obtain written approval of communication materials promoting Alliance funding prior to engaging in these efforts or activities.

17. Legal Compliance.
a. Applicable Law. Partner shall perform its obligations under this Agreement at all times in strict accordance with all applicable federal, state, and local laws, including, but not limited to, Prevailing Wage Laws, equal opportunity laws, disability rights legislation, general procurement standards, contract work hours and safety standards, ordinances, regulations, HIPAA, and DHCS guidelines. Additionally, this is a publicly-funded Project and is subject to all state and local laws and regulations for public works, including, without limitation, California Labor Code Section 1720, et seq. and Public Contract Code § 1100 et seq. (“Prevailing Wage Laws”). Partner understands that such laws and regulations include exemptions that may apply to the Project, but Partner will assume responsibility for and indemnify the Alliance relating to such laws as such may be applicable to the Project.
b. Disallowed Funds. With respect to Award funds, if any, which are ultimately provided by the State or Federal government, Partner agrees that if Partner claims or receives payment from the Alliance for an eligible expense, payment, or reimbursement of which is later disallowed by the State or Federal government, Partner shall promptly refund the disallowed amount to the Alliance upon the Alliance’s request. At its option, the Alliance may offset all or any portion of the disallowed amount against any other payment due to Partner hereunder or under any other agreement. Any such offset with respect to a portion of the disallowed amount shall not release Partner from Partner's obligation hereunder to refund the remainder of the disallowed amount.

18. Term and Termination.
a. This Agreement shall be effective on the Effective Date and shall automatically expire thirty-nine (39) months after the Effective Date unless earlier terminated by the parties as permitted herein (“Funding Term”). This Funding Term accounts for the activity period to perform the Project activities and an additional three months for reporting and payment after completion of all Project Milestones as set forth in the SOW. b. The Alliance may terminate this Agreement for cause at any time upon written notice to Partner. Cause includes but is not limited to the following: (i) Partner fails to comply with the terms of this Agreement, including any failure to timely complete the Milestones or failure to satisfy the conditions precedent to disbursement of Award

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funds; (ii) Partner is unable to or is reasonably anticipated to be unable to complete the Project as set forth in the SOW; (iii) Partner ceases its plans to utilize or discontinues its utilization of the facility to serve Medi-Cal eligible recipients prior to reaching assigned capacity, or otherwise materially curtails operations necessary for completion of the Project; (iv) the Alliance determines that any material fact or representation made or furnished to the Alliance by Partner in connection with its application or Letter of Intent was untrue or misleading at the time that such fact or representation was made known to the Alliance, or subsequently becomes untrue or misleading; or (v) the Alliance discovers that Partner has concealed any material fact from the Alliance related to the Letter of Intent, this Agreement, or the Project. c. The Alliance may terminate this Agreement or cease providing payments hereunder in the event that the Alliance determines, in its sole discretion: (i) that further payments as set forth in this Agreement could violate laws or regulations, including laws or regulations in existence on the Effective Date that may have been clarified or subject to new or changed interpretation, or (ii) in the event of a natural disaster or other event that causes the Alliance to be unable to fulfill its commitment hereunder. d. This Agreement and the Alliance’s obligation to make further payment hereunder shall terminate immediately in the event that Partner ceases operations or in the event of Partner’s insolvency, which insolvency shall be considered to have occurred when Partner makes an assignment for the benefit of creditors, files a petition in bankruptcy, is adjudicated insolvent or bankrupt, if a receiver or trustee is appointed with respect to a substantial part of such other party's property, or a proceeding is commenced against it which will substantially impair Partner’s ability to complete the Project described in the SOW. The Alliance reserves the maximum rights it is entitled to under any law and under the terms of this Agreement to seek return of any payments made prior to Partner’s cessation of operations or insolvency, and to ensure that no funds provided pursuant to this Agreement, no matter when they were provided, shall be used for the purpose of paying Partner’s general creditors or for any purpose other than as specifically set forth in the SOW.

19. Effect of Termination. In the event of termination, this Agreement shall terminate and have no further force or effect with respect to either party as of the termination date, except that all obligations arising or accruing prior to termination, including requirements regarding the use or return of Award funds, shall be performed in accordance with the terms of this Agreement and shall survive termination. Termination or expiration of this Agreement shall not affect Partner’s obligations under Sections 6-9 and Sections 13-42 of this Agreement, Useful Life obligations in the SOW, the Exhibits, or any other obligation that, by its nature, is intended to survive termination or expiration of this Agreement. Upon any termination by the Alliance for cause, Partner shall return any unexpended Award funds to the Alliance within thirty (30) calendar days of the Alliance’s written notice of termination, unless the Alliance

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has approved an alternate arrangement in advance and in writing, as provided below. Such termination will not limit any other remedies that may be available to the Alliance under this Agreement, at law, or in equity.

20. Remedies.
a. In the event that Partner is unable to provide documentation evidencing that Partner utilized Award funds for the sole purpose of completing the Project in accordance with the SOW, Partner shall return such portions of the Award funds to the Alliance for which Partner is unable to provide supporting documentation within thirty (30) business days of the Alliance’s request.
b. In the event Partner fails to timely complete the Project Milestones set forth in the SOW, the Alliance may require Partner to return any Award funds that Partner has already received under this Agreement, even if such funds were properly used.

Partner’s specific obligation to return funds is further set forth in the SOW. c. In addition to any other provision of this Agreement, if the Alliance determines, in its sole discretion, that Partner has violated or failed to carry out any provision of this Agreement, including but not limited to failure to provide documentation provided for in Section 6 and Section 10 of this Agreement or in the SOW, the Alliance may, in addition to any other legal remedies it may have, refuse to make any further Award payments to Partner or on Partner’s behalf under this or any other grant agreement, and may demand the return of all or part of the Award funds previously received by Partner or any third-parties on Partner’s behalf, which Partner shall immediately pay to the Alliance. The Alliance may also avail itself of any other remedies available under the law.

21. Other Capital Implementation Terms and Conditions; Return of Funds. Partner agrees that its receipt of funds is conditioned on meeting the applicable requirements of this Section

21. To the extent that the requirements in this Section 21 are applicable to the Project funded under this Agreement, if Partner fails to meet any of these Section 21 requirements, the Alliance may withhold payment hereunder and may, in its sole discretion, exercise any available legal or equitable rights applicable to Partner’s return of Award funds received by Partner hereunder. Partner shall provide the Alliance with such documentation as the Alliance may request from time to time during the Funding Term that demonstrates to the satisfaction of the Alliance that Partner has satisfied and will satisfy all the applicable requirements set forth in this Section 21.
a. Additional Financial Commitments. Partner represents that the Award Amount received hereunder represents no more than 50% of total Project costs, and that the remaining 50% of funding necessary to complete the implementation of the Project will come from sources other than the Alliance, such as through third-party donations,

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in-kind products and/or services, cash or documented loans or lines of credit, and/or other state, local, or grant funding.
b. Proof of Ownership, Lease Agreement, or Intent to Purchase. Partner warrants and represents that it has secured long-term rights to use the site-specific facility described in the SOW for which the Maximum Award was determined, and provided the Alliance with proof of such rights by one of the following means:
i. Partner has furnished proof of its legal ownership of the land and/or facility to the Alliance; or
ii. Partner has secured a long-term lease agreement for the facility and provided a copy of the lease to the Alliance; or
iii. Partner has proposed funding for the acquisition of the land and/or the facility and provided a binding letter of intent to purchase the land and/or facility to the Alliance; or
iv. Partner has proposed funding for the acquisition of the land and/or the facility and provided the Alliance with final copies of Partner’s agreement(s) to purchase the land and/or facility and any ancillary documents, which Partner hereby warrants and represents that Partner shall execute concurrently with this Agreement. In the event that Partner fails to acquire the land and/or facility within 10 days of the Effective Date, the Alliance shall have the option, but not the obligation, to terminate this Agreement with immediate effect. Should the Alliance exercise such option to terminate, this Agreement shall be null and void and Partner shall immediately repay the full amount of all payments received under this Agreement; such termination shall in no event be deemed to constitute a waiver or release by the Alliance of any rights, claims, causes of action, damages, liabilities or demands, whether in law or in equity, against Partner, or to prejudice in any manner the Alliance’s rights. c. On-Site Services for Transitional/Permanent Supportive Housing. If Partner has received an Alliance Housing Fund Award for a permanent supportive housing project, Partner represents that medical and/or social supportive services will be available to medically fragile Medi-Cal residents with complex needs at the proposed site, which shall be funded by sources other than the Alliance Housing Fund or other Alliance grant programs.
d. Useful Life. Partner represents that the completed Project facility will serve Medi-Cal eligible individuals as set forth in this Agreement, including meeting the Minimum Medi-Cal Occupancy requirements defined in the SOW, for a period of not less than

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ten (10) years from the Implementation Phase Three Completion Date (“Useful Life”).

Provided that Partner operates the Project facility in compliance with all requirements set forth in this Agreement during the Useful Life, Partner will be subject to no repayment obligation. In the event the Project is not operated in compliance with the requirements in this Agreement at any time during the Useful Life, the Alliance reserves the right to recapture the total Award amount set forth in the SOW.

If the facility ceases to service Medi-Cal eligible individuals in accordance with this Agreement prior to the end of the Useful Life, Partner shall provide the Alliance with at least ninety (90) days advance notice prior to the date upon which the facility ceases to service Medi-Cal eligible individuals. In the event that the Partner ceases using the facility to serve Medi-Cal eligible individuals as required under this Agreement or reduces the availability of units for Medi-Cal eligible individuals below the required Minimum Medi-Cal Occupancy, Partner shall pay to the Alliance a prorated portion of the Award amount, as follows:
i. Less than Three Years. If Partner maintains the Minimum Medi-Cal Occupancy standard for less than three years after receipt of the final payment, Partner shall pay the Alliance an amount equal to 80% of the Award amount. ii. Less than Five Years. If Partner maintains the Minimum Medi-Cal Occupancy standard for three or more but less than five years after receipt of the final payment, Partner shall pay the Alliance an amount equal to 50% of the Award amount.
iii. Less than Seven Years. If Partner maintains the Minimum Medi-Cal Occupancy standard for five or more but less than seven years after receipt of the final payment, Partner shall pay the Alliance an amount equal to 20% of the Award amount.
iv. Less than Ten Years. Partner maintains the Minimum Medi-Cal Occupancy standard for seven or more but less than ten years after receipt of the final payment, Partner shall pay the Alliance an amount equal to 10% of the Award amount.
v. Waiver of Repayment Obligation. In the event that Partner fails to maintain the Minimum Medi-Cal Occupancy standard or fails to continue using the facility for the benefit of Medi-Cal eligible individuals during the Funding Term, the Alliance may waive all or some of Partner’s repayment obligation if the Alliance determines, in its sole discretion, that such failure is attributable to circumstances that are beyond Partner’s control.

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vi. Serving Medi-Cal Eligible Individuals at a Different Facility. The Alliance may waive Partner’s repayment obligation if Partner ceases to occupy the facility but continues to make the same number of Minimum Medi-Cal Occupancy units available to Medi-Cal eligible individuals without interruption at a different facility that has at least the capacity as the facility for which Partner has received an Award hereunder, and that is within the service area of the Alliance (i.e., the Counties of Mariposa, Merced, Monterey, San Benito, and Santa Cruz).
vii. Operation of Facility by Third Party. If Partner sells the facility or leases or subleases the facility to a third party or enters into any transaction through which Partner no longer owns or leases or has responsibility for and control of the operation of the facility as contemplated herein, Partner shall pay to the Alliance the applicable prorated amounts set forth in this Section 21 unless such third party agrees in writing to, and is deemed by the Alliance, in its sole discretion, to be qualified to continue serving Medi-Cal eligible individuals at Minimum Medi-Cal Occupancy levels under the same terms and conditions that Partner has agreed to as set forth herein. Partner shall provide the Alliance with at least ninety (90) days advance notice of a transaction described herein. viii. Sale of the Property and Operations by the Housing Authority of the County of Monterey. Nothing in this Agreement shall prohibit the Partner from selling the property to the Housing Authority of the County of Monterey to own, construct and operate the housing facility contemplated within this Agreement.

The Parties upon entering into this Agreement know, understand and hereby agree that Partner may sell the property to the Housing Authority of the County of Monterey to own, construct and operate the facility contemplated within this Agreement without violating or breaching this Agreement and without seeking additional or separate approval from the Alliance.

22. Taxes. Partner shall pay to the appropriate governmental authority, as and when due, any and all taxes, fees, assessments or other governmental charges, including possessory interest taxes and California sales and use taxes, levied upon or in connection with this Agreement, the Project, the Award, or any of the activities contemplated by this Agreement.

23. Compliance with Services Agreement. If Partner is a party to any other agreement(s) with the Alliance, Partner shall comply with all of the requirements in such agreement(s), including any nondiscrimination provisions.

24. Use of Subcontractors. As between Alliance and Partner, Partner shall be responsible for the acts, defaults and omissions of any subcontractor or its agents or employees as fully as if they were the acts, defaults or omissions of Partner. Partner shall ensure that its subcontractors comply with all of the terms of this Agreement, insofar as they apply to the

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subcontracted portion of the Project. All references herein to duties and obligations of Partner shall be deemed to pertain also to all subcontractors to the extent applicable. A breach by any subcontractor shall be deemed to be a breach hereunder. Nothing contained in this Agreement shall create any contractual relationship between any subcontractor and Alliance. Each subcontract shall incorporate all of the terms of this Agreement to the extent they apply to the subcontracted portion of the Project. Without limiting the scope of the foregoing, Partner shall ensure that each subcontract shall provide the Alliance, the audit and inspection rights set forth herein. Upon the request of Alliance, Partner shall promptly furnish to the Alliance true and correct copies of each subcontract permitted hereunder.

25. Liability of Alliance. THE ALLIANCE’S PAYMENT OBLIGATIONS UNDER THIS AGREEMENT SHALL BE LIMITED TO THE PAYMENT OF THE AWARD.

NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, IN NO

EVENT SHALL THE ALLIANCE BE LIABLE, REGARDLESS OF WHETHER ANY

CLAIM IS BASED ON CONTRACT OR TORT, FOR ANY SPECIAL,

CONSEQUENTIAL, INDIRECT OR INCIDENTAL DAMAGES, INCLUDING, BUT NOT

LIMITED TO, LOST PROFITS, ARISING OUT OF OR IN CONNECTION WITH THIS

AGREEMENT OR THE PROJECT PERFORMED IN CONNECTION WITH THIS AGREEMENT.

26. Indemnification. Partner, at its own expense, agrees to defend, indemnify, and hold harmless the Alliance and the Alliance’s affiliates, subsidiaries, directors, officers, employees, representatives, and agents from and against any and all liabilities, losses, costs, expenses (including, without limitation, attorneys' fees), damages, claims, suits, and/or demands (including, without limitation, those based on the injury to or death of any person or damage to property), directly or indirectly arising out of, or resulting from, (i) any act or omission of Partner related to any of its obligations performed hereunder, (ii) any breach of Partner’s representations or warranties set forth in this Agreement, and/or (iii) any actual or alleged infringement, misappropriation, or other violation of any third-party rights or any laws or regulations relating to Partner’s performance of its obligations under this Agreement.

27. Debarment and Suspension Certification. Partner hereby certifies that neither it nor any of its principals, owners, employees or subcontractors (a) is presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from participation in a covered transaction by any federal department or agency, or is excluded as the result of state or federal action from participation in any federally-funded health care program; (b) has within a three-year period preceding this Agreement been convicted of or had a civil judgment rendered against it or them for (i) commission of fraud or a criminal offense in connection with obtaining, attempting to obtain, or performing a public (federal, state or local) transaction or contract under a public transaction, (ii) violation of federal or state antitrust statutes or (iii) commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, or receiving stolen property; (c) is presently indicted for or otherwise criminally or civilly charged by a governmental entity

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(federal, state or local) with commission of any of the offenses enumerated in clause (b) above; or (d) has within a three-year period preceding this Agreement had one or more public transaction (federal, state or local) terminated for cause or default. (The terms "covered transaction", "debarred", “suspended", "ineligible" and "voluntarily excluded" have the meaning set out in the Definitions and Coverage sections of rules implementing Executive Order 12549.) Partner shall provide immediate written notice to the Alliance if at any time the foregoing certification becomes erroneous. Upon the request of the Alliance at any time during the term of this Agreement, Partner shall update and reissue such certification. Partner further agrees that it will obtain from all subcontractors to whom Partner subcontracts any portion of the Services, if any, such subcontractor's written certification of, and agreement to, the matters set forth in this paragraph, in a form acceptable to the Alliance.

28. Insurance. At all times during the Term and for such period of time thereafter as required for Partner to maintain Insurance Coverage with respect to all of the Services performed hereunder and all of Partner’s (and its employees’) acts and omissions in connection with this Agreement, Partner shall maintain in full force and effect the following types of insurance to insure against risks or liability (collectively, “Insurance Coverage”):
a. Commercial General Liability Insurance, including premises liability, products liability (if products are being provided), completed operations coverage, and contractual liability, with minimum limits of $1,000,000 per occurrence, $2,000,000 policy aggregate, including bodily injury (including death) and property damage, covering all of Partner’s operations under this Agreement (which insurance shall be provided on an “occurrence” form).
b. Commercial Automobile Liability Insurance, with minimum limits of $1,000,000 per occurrence, combined single limit, for bodily injury (including death) and property damage, covering all owned, non-owned and hired automobiles. c. Workers’ Compensation, with minimum limits as required by law, and Employer’s Liability insurance (if applicable) with the following minimum limits: (1) Bodily Injury by accident: $1,000,000 each accident; (2) Bodily Injury by disease:
$1,000,000 each employee; and (3) Bodily Injury by disease: $1,000,000 policy limit.

If, in any of the foregoing cases, Partner has procured a claims-made based policy (or policies) and such policy (or policies) are cancelled or not renewed, Partner agrees to exercise any option contained in said policy (or policies), or otherwise obtain tail coverage, that extends the reporting period for a period of at least four (4) years after the termination or expiration of this Agreement.

None of the foregoing requirements as to the type and limits of insurance to be maintained by Partner are intended to and should not be construed as limiting in any manner Partner’s obligations under this Agreement.

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Each of Partner’s insurance policies shall: (i) be issued by companies that have an A. M. Best rating of not less than “A-”, and are in a size category which is not lower than “VIII”; (ii) be primary and noncontributory with any of the Alliance’s insurance; (iii) add the Alliance as an additional insured (except workers compensation and errors and omissions coverages); and (iv) not be cancelled or non-renewed except upon at least thirty (30) days’ prior written notice to the Alliance. Upon or prior to the full execution of this Agreement, and upon expiration or renewal of any required certificate or endorsement, Partner shall provide to the Alliance certificates evidencing all insurance and endorsements required by this Section 28.

Certificates and endorsements shall be submitted electronically to: [email protected].

Notwithstanding anything else, if Partner fails to so provide the Alliance with any such certificates, the Alliance may withhold payment of any amounts that are otherwise due to Partner until up to thirty (30) calendar days after such certificates are provided to the Alliance, and/or terminate this Agreement immediately upon notice.

29. Conflict of Interest. Partner hereby certifies that it has read and is aware of the provisions of California Government Code Section 1090 et seq., the California Political Reform Act (California Government Code Section 81000 et seq.), and Title 22 California Code of Regulations (CCR) Section 53600 relating to conflict of interest of public officers and employees. Partner agrees that it is unaware of any financial or economic interest of any public officer or employee of the Alliance relating to this Agreement. Notwithstanding any other provision of this Agreement, it is further understood and agreed that if such financial interest does exist at the inception of this Agreement, the Alliance may immediately terminate this Agreement by giving written notice thereof.

30. Equitable Remedies. Partner acknowledges and agrees that the Alliance may suffer immediate, irreparable harm in the event Partner fails to comply with its obligations under this Agreement, and monetary damages may be inadequate to compensate the Alliance for such breach. Partner agrees that the Alliance will be entitled to seek a judicial temporary restraining order, preliminary injunction, or other equitable relief against Partner (without the requirement of posting a bond or other form of security) to enforce the terms of this Agreement.

31. Arbitration. Any controversy, dispute or claim of whatever nature and irrespective of the facts or circumstances or the legal theories advanced shall be resolved by binding arbitration at the request of either Party. A single neutral arbitrator shall be appointed. The arbitration shall be administered by JAMS and in accordance with the JAMS Comprehensive Arbitration Rules and Procedures. Such arbitration shall occur in Santa Cruz, California. The arbitrator shall apply California substantive law and federal substantive law where state law is preempted. The Federal Arbitration Act, 9 U.S.C. § 1-16, shall also apply. The arbitrator shall prepare in writing and provide to the Parties an award including factual findings and the legal reasons on which the award is based. The arbitrator may award compensatory damages as permitted by law, but exemplary or punitive damages shall not be awarded. The Parties shall divide equally the cost of the arbitration, including, but not limited to the arbitrator’s fee

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and any related administrative fees and charges. The Parties shall each bear their respective attorneys’ fees and costs incurred in the arbitration. The arbitration and any information obtained in connection with this Agreement or through discovery as set forth in this Section 31 shall be confidential and neither the Parties nor the arbitrator may disclose such information to third parties without the written consent of the Parties, except that the Parties may disclose such information as necessary to seek confirmation of the arbitration award, to enforce any judgment entered on account of the award or as otherwise is required by law; however, the Parties may make such disclosure as is necessary to their respective auditors, accountants, attorneys and insurers.

32. Independent Partners. The parties hereto are independent contractors and neither the Alliance nor Partner is an agent or employee of the other.

33. Taxpayer Identification Number and Certification. Upon execution of this Agreement, Partner shall complete and deliver to the Alliance the IRS Form W-9, Request for Taxpayer Identification and Certification.

34. Time is of the Essence. Time is of the essence with respect to Partner’s performance of the Services and delivery of the Deliverables. FAILURE TO SATISFY ANY ONE OF

THE PERFORMANCE MILESTONES WILL CONSTITUTE A BREACH OF THIS

AGREEMENT AND ENTITLES THE ALLIANCE TO MANDATE THE PARTNER TO RETURN TO THE ALLIANCE ANY AWARD FUNDS DISBURSED; IN ANY SUCH

INSTANCE, THE ALLIANCE MAY ALSO CANCEL THIS AGREEMENT WITHOUT OWING ANY DAMAGES OR OTHER PAYMENT TO PARTNER.

35. Governing Law. This Agreement shall be governed and interpreted in accordance with the laws of the State of California without regard to the conflicts of law provisions thereof that would require the application of the laws of any other state.

36. Severability. Except as explicitly stated otherwise in this Agreement, if any provision of this Agreement or the application thereof is held invalid, that invalidity shall not affect other provisions or applications of the Agreement which can be given effect without the invalid provision or application, and to this end the provisions of this Agreement are severable.

37. Waiver. No terms or provision hereof will be considered waived by either party, and no breach excused by either party, unless such waiver or consent is in writing and signed by the waiving party. No consent by either party to, or waiver of, a breach by either party, whether expressed or implied, will constitute consent to, waiver of, or excuse of any other, different, or subsequent breach by either party.

38. Assignment. This Agreement shall not be assigned by the Partner either in whole or in part except as explicitly set forth herein. However, this section shall not prohibit the Partner from assigning the requirements under this Agreement and/or this Agreement to the Housing

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Authority of the County of Monterey nor shall it require the Partner to receive additional approval from the Alliance to assign the requirements under this Agreement and/or this Agreement to the Housing Authority of the County of Monterey.

39. Successors; No Third-Party Beneficiaries. The terms of this Agreement shall be binding upon, and inure to the benefit of, the parties hereto and their successors and assigns.

Nothing in this Agreement, whether express or implied, shall be construed to give any person or entity any legal or equitable right, remedy or claim under or in respect of this Agreement or any covenants, conditions or provisions contained herein.

40. Order of Precedence. In the event of any express and unequivocal conflict or inconsistency between the provisions of any SOW and the provisions of this Agreement, the provisions of this Agreement will govern and control.

41. Entire Agreement. This Agreement shall supersede any prior oral or written understandings or communications between the parties and constitutes the entire agreement of the parties with respect to the subject matter hereof. This Agreement may not be amended or modified, except in writing signed by both parties.

42. Counterparts. This Agreement may be executed in separate counterparts, each of which shall be deemed to be an original, and all of which taken together constitute one and the same instrument. Telecopied or scanned signatures will be deemed to have the same effect as an original.

For the Partner:

City of King
For the Alliance:

Santa Cruz-Monterey-Merced-San BenitoMariposa Managed Medical Care Commission, operating as Central
California Alliance for Health
By: By:

Print Name: Print Name:

Title: Title:

Date Signed: Date Signed:

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EXHIBIT 1

STATEMENT OF WORK

ALLIANCE HOUSING FUND AWARD
This Statement of Work (“SOW”) is entered into pursuant to, and is governed by, that certain Letter of Agreement (“Agreement”) concurrently executed between Santa Cruz-Monterey-Merced-San Benito-Mariposa Managed Medical Care Commission, operating as Central California Alliance for Health (the “Alliance”), and King City (“Partner”), in which this SOW is fully incorporated.

This SOW sets forth additional terms and conditions that apply to Partner’s receipt of the Alliance Housing Fund Award described below. Any individual reference to the “Agreement” or “SOW” shall be deemed to include the terms of both the Agreement and SOW.

Project: King City, Days Inn, Permanent Supportive Housing project located at 1130 Broadway Street, in City of King, County of Monterey, State of California (“Project”)
Award Date: July 31, 2024
Partner Name: King City
Award: The actual amount of the Alliance Housing Fund funds awarded to Partner shall be determined commensurate with Partner’s achievement of the Project Milestones below and contingent upon Partner’s compliance with the terms of the Agreement in which this SOW is incorporated (“Award”).

Maximum Award: The Award amount shall not exceed $3,300,000.00 (“Maximum Award”)
Purpose of Project: To support the King City, Days Inn, Permanent Supportive Housing Project as described in this Agreement and the Letter of Intent dated [Insert], attached to this Agreement as Exhibit 2, that is or will be located at 1130 Broadway Street, King City, CA 93930, and to provide services to Medi-Cal eligible individuals currently experiencing homelessness.

A. PAYMENT PRECONDITIONS: The Alliance will not disburse any Award payments until this Agreement, including this SOW, has been fully executed and the Alliance has approved a Project Plan, as described below, and all required supporting documents. The Partner shall append applicable supporting documents to the Project Plan, all in form and substance acceptable to the Alliance. To ensure Project feasibility and financial sustainability, Partner

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must fulfill the payment preconditions below and provide documentation for review in accordance with the terms of this Agreement and SOW before receiving any Award funds.

All funds necessary to complete the full Project costs, including any pre-development, development, and post-development activities described in this Agreement and SOW must be committed during the Funding Period. It is mutually agreed that if the Partner does not appropriate sufficient funds to cover the full Project costs, the Alliance may immediately terminate the Agreement, and the Alliance shall have no liability to pay any Award funds whatsoever or to furnish any other considerations to Partner. Such termination will not limit any other remedies that may be available to the Alliance under this Agreement, at law, or in equity.
a. Project-Specific Contingencies: As condition precedents to receiving any Award funds payments, Partner must fulfill ALL of the following requirements:
i. Execution of Agreement between Partner and HACM. Partner must execute an agreement with the Housing Authority of Monterey County (“HACM”) to sell the Project land and/or facility to HACM with substantially the same terms contained in the purchase agreement provided to the Alliance pursuant to Section 21(b)(iv) and attached as Exhibit 3 (“HACM Agreement”). The Alliance hereby explicitly approves Partner’s execution of the HACM Agreement and Partner’s transfer of the Project land and/or facility to HACM thereunder for purposes of Section 21(d)(vii) of the Agreement, contingent upon HACM’s assumption of all of Partner’s obligations under this Agreement.
ii. Certification that Partner shall record a deed restriction against the Project site property with substantially the same terms contained in the Declaration of Restrictive Covenants provided to the Alliance pursuant to Section 21(b)(iv) and attached as Exhibit 4 (“Declaration”). Should Partner or any subsequent owner violate any portions of the Declaration applicable to this Agreement, Partner shall pay to the Alliance, either directly or through such subsequent owner, the full amount of the Award delivered to Partner hereunder. Partner assumes responsibility for ensuring the full amount of the Award is timely returned to the Alliance in the event of any such violation. iii. Novate Agreement to HACM. Enter into a novation agreement with HACM and the Alliance with substantially the same terms as set forth in the Novation and Amendment Agreement draft agreement attached to this Agreement as Exhibit 7 (“Novation Agreement”), transferring and assuming all of Partner’s rights and obligations to this Agreement. Following execution of such Novation Agreement, HACM shall be substituted for the City of King as Partner with respect to this Agreement.
b. Funding Sources: Partner will satisfy its obligation to cover the costs of the Project’s development, operations, and services as set forth in this Agreement by leveraging

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funding commitments, or other reasonable funding assurances, from other funding sources. Partner agrees that the Award is contingent upon Partner securing funding from such sources to cover the total cost of completing the Project and fulfilling Partner’s obligations under the Agreement, including the Useful Life activities. The Alliance’s obligation to make any disbursements of Award funds to Partner is subject at all times to Partner’s ongoing demonstration of its ability to cover the costs of the Project. Partner represents that Partner has secured funding for the Project as follows:
i. Non-Alliance funding sources:

1. HCD is committing $1,100,000 to the acquisition of the Project site B. PROJECT PLAN: For purposes of this Agreement, “Project Plan” shall mean a clear, precise, and detailed implementation schedule with an itemized budget for the Project, including a description of the work to be performed under each Milestone, corresponding completion dates, and corresponding costs. Partner shall prepare and submit a proposed Project Plan to the Alliance for approval in accordance with the Milestones below. The Alliance shall have ten (10) business days to review and, in its discretion, approve or raise objections to the proposed Project Plan. If the Alliance raises any such objections, Partner shall have three (3) business days to revise and resubmit a proposed Project Plan. The Alliance shall have no obligation to disburse any Award funds unless and until Partner submits a Project Plan acceptable to the Alliance. Upon acceptance, the Project Plan shall automatically become incorporated into and form an essential part of this Agreement, and the Award shall be conditioned upon Partner’s adherence to the deliverables schedule under the approved Project Plan.

C. PROJECT MILESTONES: In order to maintain continued eligibility to receive the Award funds hereunder, Partner must meet the following Project milestones (each, a “Milestone”):

ACQUISITION PHASES

1. Acquisition Phase One
a. Acquisition Phase One Milestones:
i. Execute Partner HACM Agreement
ii. Identify a property and location for the Project site. iii. Confirm acquisition process.
b. Acquisition Phase One Completion Date: Within ten (10) business days of Effective Date.
c. Deliverables: Documentation of Acquisition Phase One Milestones completion, including documentation of any applicable Payment Preconditions listed in Section A of this SOW, including copies of the fully executed Partner HACM Agreement. d. Deliverable Due Date: Within ten (10) business days of Effective Date.

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e. Payment Percentage: 90% of Maximum Award

2. Acquisition Phase Two
a. Acquisition Phase Two Milestones:
i. Demonstrate proof of Project site acquisition and transfer of ownership to HACM
• By May 15, 2025, Partner shall demonstrate that the site property has been acquired and transferred as described in this Agreement to HACM in accordance with the terms of this Agreement and the Partner HACM Agreement. The transfer of the Project site to HACM shall be considered pre-approved by the Alliance for the purpose of Section 21(d)(vii).
ii. Transfer Agreement to HACM
• No later than June 1, 2025, Partner shall enter into a Novation Agreement with HACM and the Alliance transferring and assigning all of Partner’s rights and obligations to and in this Agreement to HACM as of the date of transfer. Following execution of such Novation Agreement, HACM shall be substituted for Partner with respect to this Agreement and the term “Partner” shall be deemed to refer to HACM under this Agreement as of the effective date of the Novation Agreement.
b. Acquisition Phase 2 Completion Date: June 1, 2025.
c. Deliverables: Detailed documentation of Acquisition Phase Two Milestones completion, including a copy of the Project site’s bill of sale from owner to Partner, a copy of fully executed Novation Agreement, a copy of bill of sale of Project site from Partner to HACM, and timely submission of reports. d. Deliverable Due Date: June 1, 2025.
e. Payment Percentage: 10% of Maximum Award

IMPLEMENTATION PHASES

3. Implementation Phase One
a. Implementation Phase One Milestones:
i. Demonstrate proof of Project site ownership.
• Partner will demonstrate its ownership of the Project site located at 1130 Broadway Street, King City, CA 93930.
ii. Submit Project Plan
• Partner shall submit a proposed Project Plan to the Alliance for review and approval.
iii. Obtain design plans.
iv. Complete construction budget.

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b. Implementation Phase One Completion Date: Within ten (10) business days of Acquisition Phase 2 Completion Date.
c. Deliverables: Documentation of Implementation Phase One Milestones completion, including submission of proposed Project Plan and documentation of any applicable Payment Preconditions listed in Section A of this SOW.
d. Deliverable Due Date: Within ten (10) business days of Effective Date. e. Payment Percentage: 0% of Maximum Award

4. Implementation Phase Two
a. Implementation Phase Two Milestones:
i. Obtain general contractor bids.
ii. Sign general contractor contract.
iii. Begin Renovations
• Construction Start Date. In order to maintain eligibility for the interim payments provided for in this SOW, Partner must begin construction of the Project within twelve (12) months of the Effective Date (“Construction Start Date”).
b. Implementation Phase Two Completion Date: January 31, 2026.. c. Deliverables: Detailed documentation of Implementation Phase Two Milestones completion, including timely submission of reports.
d. Deliverable Due Date: January 31, 2026.
e. Payment Percentage: 0% of Maximum Award

5. Implementation Phase Three
a. Implementation Phase Three Milestones:
i. Establish Prioritization Process for Medi-Cal Eligible Individuals. By March 31, 2026, Partner will establish a process for prioritizing Medi-Cal eligible individuals for placement. All prioritization systems must be at all times in strict accordance with all applicable federal, state, and local laws, including the U.S. Department of Housing and Urban Development’s Fair Housing Act.1 Partner shall develop Project prioritization systems as follows:
• Permanent Supportive Housing. If all or a portion of the Project is for permanent supportive housing, the following shall apply to such permanent supportive housing units:
o Unless otherwise preapproved by the Alliance, Partner will develop referral protocols which prioritize placement of MediCal eligible individuals through the local Coordinated Entry System (“CES”). If Partner wishes to utilize a prioritization system other than CES, Partner may submit a request to utilize 1 Housing Discrimination Under the Fair Housing Act | HUD.gov / U.S. Department of Housing and Urban Development (HUD)

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a comparable system to the Alliance at least 30 days prior to implementation date. Any request to utilize a prioritization system other than CES must be delivered in writing by Partner and include a detailed narrative description of the prioritization system, justification for utilizing the non-CES system, and an attestation that the placement prioritization process complies with the terms of this Agreement and Medi-Cal eligibility income requirements.
o Should Partner include a request to utilize a non-CES system in Partner’s Implementation Phase 1 Milestone Project Plan deliverable, such non-CES system shall be considered approved under this Agreement upon the Alliance’s approval of the Project Plan
o Should requirements from other funding sources or other external constraints prevent Partner from using CES, Partner shall provide documentation to the Alliance evidencing such terms and conditions.
o Should Partner already have a prioritization system comparable to CES in place as of March 31, 2026 that Partner wishes to continue utilizing, then Partner shall adopt the following protocol unless otherwise agreed upon by the Alliance:
i. If Partner’s prioritization list already contains a queue, Partner will: validate listed individuals’ Medi-Cal
eligibility using income guidelines and submit validated prioritization list to the Alliance for approval.
ii. Once Partner’s prioritization list is exhausted, Partner will: identify other Medi-Cal eligible individuals
through the Partner’s alternative system, validate such individuals’ Medi-Cal eligibility using income
guidelines, and submit the validated prioritization list to the Alliance for approval.
iii. Once Partner’s prioritization list is exhausted, if Partner is not able to identify any additional Medi-Cal eligible individuals through the alternative system, Partner will:
utilize CES, validate such individuals’ Medi-Cal
eligibility using income guidelines, and submit
validated prioritization list to the Alliance for approval. • Non-Permanent Supportive Housing. If all or a portion of the Project is for uses other than permanent supportive housing (e.g., recuperative care and short-term post hospitalization housing), the following shall apply to such non-permanent supportive housing units:

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o Partner shall submit a proposed process of prioritization to the Alliance at least 30 days prior to implementing such process under this Agreement. Such proposal must be delivered in writing by Partner and include a detailed narrative description of the prioritization process, how such system will prioritize placement of Medi-Cal eligible individuals to meet Minimum Medi-Cal Occupancy requirements, and an attestation that the placement prioritization process complies with the terms of this Agreement and Medi-Cal eligibility income requirements. o Should Partner include a proposed process of prioritization in Partner’s Implementation Phase 1 Milestone Project Plan deliverable, such system shall be considered approved under this Agreement upon the Alliance’s approval of the Project Plan i. Complete Renovations.
• By July 31, 2027, Partner will complete the renovation of the Days Inn at 1130 Broadway Street, King City, CA, for the purpose of transitioning to permanent supportive housing.
ii. Obtain Certificate of Occupancy.
• By August 30, 2027, all permanent supportive housing units will be fully occupied, and meet Minimum Medi-Cal Occupancy.
iii. Establish Service Availability and Best Efforts Prioritization Outcomes. • By August 30, 2027, Partner will ensure that on-site case management services are available/provided and individual services plans are developed for all Medi-Cal eligible residents receiving case management services.
• By August 30, 2027, Partner shall use best efforts to achieve goal of:
original Medi-Cal eligible residents placed for Minimum Medi-Cal Occupancy remain housed at the Project.
b. Implementation Phase Three Completion Date: August 30, 2027. c. Deliverables: Detailed documentation of Implementation Phase Three Milestones completion, including timely submission of reports and, as applicable, validated prioritization lists.
d. Deliverable Due Date: August 30, 2027.
e. Payment Percentage: 0% of Maximum Award

6. Post Completion; Useful Life.
a. Useful Life Implementation. At all times during the Useful Life (i.e., 10 years following Implementation Phase Three Completion Date), Partner shall place MediCal residents as set forth in this Agreement consistent with Medi-Cal eligibility income requirements and the approved prioritization process. For this purpose, Partner agrees to provide the Alliance with an annual report which attests that Partner has maintained the Minimum Medi-Cal Occupancy requirement as set forth in this Agreement and

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SOW and has continued to comply with the terms of this Agreement. Partner agrees to submit a complete and accurate report to the Alliance by March 31st of each calendar year for the Useful Life of the Project, (i.e., 10 years following Implementation Phase Three Completion Date). The report shall be consistent with the format outlined in the Annual Attestation Template attached as Exhibit 6 to this Agreement. Partner also agrees to timely provide all information reasonably requested by the Alliance to validate Partner’s Annual Attestation responses. This Section C(6) of this SOW shall survive termination of the Agreement. b. Useful Life End Date:
c. Deliverables: Annual attestation.
d. Deliverable Due Date: March 31st of each calendar year during the Useful Life.

D. PROJECT DURATION. Partner shall have a period of 39 months from the Effective Date to complete all activities that were submitted for funding in the Letter of Intent approved by the Alliance on February 10, 2024, and all required reporting. Partner shall continue to house MediCal eligible individuals in accordance with this Agreement for no less than the Useful Life (i.e., 10 years following Implementation Phase Three Completion Date).

E. PAYMENT SCHEDULE. Payments shall be made to Partner by the Alliance according to the schedule provided below, subject to the Alliance’s receipt of all documentation reasonably required by the Alliance and Partner’s compliance with all of the terms of this Agreement:
a. Initial Payment. The initial payment shall not exceed ninety percent (90%) of the Maximum Award amount and shall be paid within thirty (30) business days of the Alliance’s actual receipt of a progress report from Partner indicating that all Acquisition Phase One Milestones have been completed.
b. Final Payment. The final payment of ten percent (10%) of the Maximum Award amount (or remaining balance per actual Project expenses) for the Milestones outlined above in this SOW shall not exceed ten percent (10%) of the Maximum Award amount. This payment shall be paid within thirty (30) business days of the Alliance’s receipt of all Acquisition Phase Deliverables, a progress report indicating that all Acquisition Phase Milestones of the Project have been completed, and all supporting documentation required herein and as the Alliance may reasonably request. The progress report will include a narrative, original Project budget versus actual expenses, and verification of Project expenses incurred since the previous payment, if any.

Progress report should include documentation demonstrating that the Acquisition Phases of the Project are complete (e.g., project management report, inspection report, permit, bill of sale, etc.).

F. DOCUMENTATION. Partner shall provide the Alliance with notice in the form requested by the Alliance of the Construction Start Date and the Implementation Phase Three Completion Date,

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and provide the Alliance with such further documentation as it may request to verify that Partner has actually begun and/or completed the Project as required under this SOW. Partner shall provide, within thirty (30) calendar days of the Alliance’s request, such progress, financial, operational, and other reports as the Alliance may from time-to-time request, in a form and substance satisfactory to the Alliance. Failure to provide requested documentation within the required time period shall be considered a material breach of this Agreement, and the Alliance may, at its discretion, terminate this Agreement for cause and recoup payment in accordance with the terms of this Agreement, and/or withhold any portion of the Award otherwise payable under this Agreement.

G. DISCRETION OF ALLIANCE. If Partner fails to meet the required Construction Start Date or the required Milestone Completion Dates and/or reporting deadlines, the Alliance shall have the discretion to withhold payments hereunder, as the case may be, and may, at its sole discretion, change or adjust any of the deadlines provided for herein, including requiring such additional documentation or changes as it shall determine to be reasonable and necessary for the completion of the Project under an alternative schedule.

H. ACTUAL COSTS. Payments shall be made for Partner’s actual costs incurred and reported in accordance with this Agreement. Under no circumstances shall payment exceed the amount of the Maximum Award.

For the Partner:

City of King
For the Alliance:

Santa Cruz-Monterey-Merced-San BenitoMariposa Managed Medical Care Commission, operating as Central
California Alliance for Health
By: By:

Print Name: Print Name:

Title: Title:

Date Signed: Date Signed:

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EXHIBIT 2

LETTER OF INTENT
April 14, 2025
Christy Celis Puga, MPH, CHES
Program Development Department
Central California Alliance for Health
[email protected]
Re: Letter of Intent for King City Permanent Supportive Housing Project Dear Ms. Puga:

The purpose of this letter is to express the City of King’s (the City) intent to utilize funding provided by the Central California Alliance for Health (CCAH) to purchase the former Days Inn property in King City for development by the Housing Authority for the County of Monterey (HACM) into a permanent supportive housing project for chronic homeless. The City is dedicated to ending homelessness in our community and has established a goal of serving as a model to demonstrate to other jurisdictions that it is possible for small communities to implement major projects to address homelessness. Our overall goal is to promote that the solution to homelessness is for every community to become involved and do their part.

Project Proposal
The proposed project involves purchasing a 45-unit former Days Inn hotel property in King City to ultimately provide permanent housing and support services for homeless individuals from King City and other areas of South Monterey County. Many of the clients previously resided in encampments along the Salinas Riverbed. The project will address the urgent need for permanent housing solutions for about 50 people. The City will coordinate the acquisition of the property and then transfer it to HACM, who will serve as the developer and owner. HACM will contract with Step Up on Second Street, another non-profit agency, to operate the facility and coordinate the support services.

Contact Information
• Steven Adams, City Manager
• [email protected]
• 831-386-5917
• 212 S. Vanderhurst Avenue
King City, CA 93930
Description of Our Organization

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King City is a small full-service city of approximately 14,000 people, located in the southern Salinas Valley of the California Central Coast in Monterey County. The City lies 155 miles south of San Francisco and 277 miles north of Los Angeles. King City is a disadvantaged and underserved community with a high level of poverty. About 90% of the population are minorities and a high percentage are non-English speakers. The primary industry in King City are businesses associated with agriculture. King City has also historically experienced a high level of youth violence due to gang activity.

Despite these challenges and limited resources, the City is proud to provide a high quality of life and level of service to the community. The City’s mission is “Meeting the needs of our entire community through caring, professional and responsive services.” A high priority is placed on developing creative solutions for those with unmet needs.

Statement of Need
Due to low-income levels and a critical shortage of housing, King City has experienced a high amount of homelessness for a small community. A substantial number of homeless individuals formerly resided in encampments in the Salinas Riverbed area, which created several issues regarding unsafe living conditions, environmental damage, public safety concerns, and fire hazards. A few years ago, the encampments were displaced by a major fire, which included one death. The City has provided a number of temporary shelter options since that time.

An exciting and more permanent solution became possible with approval of a State Homekey Project grant. The Days Inn located at 1130 Broadway Street was selected as the site for conversion to a permanent supportive housing project. It was acquired by the City’s private developer partner, but the project was severely mismanaged by the developer and the property was ultimately lost to foreclosure. The City, along with the County of Monterey, HACM, and other partner agencies refused to give up after so much progress had been made. Alternate funding strategies were developed to complete the Homekey project and address this critical need. The funding approved by CCAH was a critical component to enable the project to proceed.

Methodology and Achievable Solution
To address this need, HACM has assumed the role of developer. It is the City’s intent to enter into a purchase and sale agreement with the lender who foreclosed on the property and is now the owner.

The terms have been agreed upon, and the agreement is being finalized. It is the City’s intent to enter into a separate purchase and sale agreement to transfer the property to HACM. The property will be direct deeded to HACM for a cost of $1 under the terms of the purchase and sale agreement between the City and HACM. The City will also be executing a funding agreement for City financial assistance to HACM for construction costs. These agreements will include the requirements for completion and operation of the project as set forth by CCAH in the City’s funding agreement.

HACM will coordinate renovation of the property and contract with Step Up on Second Street, a nonprofit service provider, to operate it and deliver services to the permanent housing residents. HACM will coordinate and provide property management services for the housing units, which will be leased

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to eligible participants. This holistic approach ensures that residents have the resources they need to succeed. The HACM team and Step Up on Second Street will also collaborate with other local service providers to deliver these essential services efficiently and effectively.

The City is seeking $3,000,000.00 from the Alliance Housing Fund to allow the City to purchase and transfer the property to HACM so that HACM can move forward with construction.

Project Budget and Other Funding Sources
The total project budget is $16,779,595, which includes acquisition, construction, and initial operating costs. The combined approved revenue sources for the City and HACM include the following, with the City’s acquisition costs highlighted below:

City of King (property acquisition) $3,000,000
HACM $2,178,680
Total $5,178,680
Conclusion
We greatly appreciate the assistance of CCAH to make this project possible. We believe it will be effective in addressing the major portion of the City’s homeless population through a sustainable and long-term approach. As a small disadvantaged and underserved community, King City has tremendous needs and challenges. However, as a small community, the scale of its homeless population is also manageable. As a result, we believe King City can serve as an effective model and case study to demonstrate how individual communities can be successful in addressing homelessness through a collaborative and team approach.

Thank you for considering our letter of intent. We look forward to working in partnership with CCAH and ensuring that the CCAH investment is utilized in an efficient, productive and meaningful way. 2 The CCAH funds will be provided and allocated as two awards, under separate grants. The first grant in the amount of $3,000,000 will be granted to the City of King solely for property acquisition costs. The second grant in the amount of 2,178,680.21 will be granted to HACM.

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Sincerely,
Steven Adams
City Manager

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EXHIBIT 33

AGREEMENT FOR PURCHASE AND SALE

OF REAL PROPERTY AND JOINT ESCROW INSTRUCTIONS
THIS AGREEMENT FOR PURCHASE AND SALE OF REAL PROPERTY (“Agreement”) is made this ___ day of February 2025 (“Agreement Date”) by and between the CITY OF KING a California municipal entity (“Seller”), and HOUSING AUTHORITY OF THE COUNTY OF MONTEREY, a joint powers authority (“Buyer”).

R E C I T A L S:

A. Seller is the equitable owner of that certain improved real property located at 1130 Broadway Street, in the City of King, County of Monterey, State of California (APN 026-401-020- 000) more particularly described in Exhibit A-1 (“Property”) which is improved with a hotel building (“Building”).

B. Seller also agrees to transfer any and all tangible and intangible rights and items related in any way to the acquisition, use, development, design, construction, permitting and entitlement of the Property for the Building and all right, title and interest of Seller, if any, in and to all tangible personal property owned by Seller now existing and placed or installed on or about the Property and used in connection with the ownership, operation, management, maintenance and/or repair of the Property which are set forth on Exhibit A-2 (“Personal Property”).

C. The Property is currently vacant and being sold AS-IS and for the exclusive development of a permanent supportive housing project consistent with the Homekey project requirements as established by the State of California, Department of Housing and Community Development and all agreed upon requirements of any grant funding agency for the purchase, construction and operation of the permanent supportive housing project at the Property.

D. Seller desires to sell and Buyer desires to buy, the Property together with the Personal Property upon the terms and conditions more particularly set forth herein.

NOW, THEREFORE, in consideration of the mutual covenants set forth herein, the parties hereto agree as follows:

TERMS AND CONDITIONS:

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permanent supportive housing project consistent with the Homekey project requirements as established by the State of California, Department of Housing and Community Development and all agreed upon requirements of any grant funding agency for the purchase, construction and operation of the permanent supportive housing project at the Property. Further, the Buyer hereby agrees to comply with all covenants recorded upon the Property governing the use of the Property and/or relating to the development and operation of a permanent supportive housing project.

2. PURCHASE PRICE; PAYMENT OF PURCHASE PRICE.

2.1 Purchase Price. The purchase price for the Property is One Dollar ($1.00) (“Purchase Price”).

2.2 Payment of Purchase Price; Independent Contract Consideration. Buyer and Seller acknowledge and agree that the sum of One Dollar ($1.00) shall automatically, in all instances, and without the need for further notice or instruction, be deemed as Buyer’s lawful independent consideration of Seller’s execution of this Agreement and for Seller’s agreement to grant to Buyer the Due Diligence Period (hereinafter defined) with respect to Buyer’s investigation of the Property as herein provided. The parties have bargained for and expressly agree that the rights and obligations of each party contained in this Agreement constitute sufficient consideration for the other party’s execution, delivery and obligations under this Agreement, including without limitation, Buyer’s right to inspect and purchase the Property pursuant to this Agreement and all contingencies and conditions of Closing for the benefit of Buyer set forth in this Agreement. The Independent Contract Consideration shall be non-refundable to Buyer in all instances and shall be deemed fully earned by Seller, regardless of whether Buyer purchases the Property but shall be applicable to the Purchase Price at Closing.

3. CLOSING FUNDS AND DOCUMENTS REQUIRED FROM BUYER AND SELLER.

3.1 Seller. Seller agrees that on or before 12:00 noon on the day preceding the Closing Date, Seller will provide all of the following:
a. A copy of the Grant Deed for the Property issued in the name of the Buyer. The Grant Deed for the Property will be issued in the name of the Buyer as a condition of the close of escrow between the City of King and MP Broadway or the legal owner of the Property for the purchase of the Property prior to the sale to the Buyer contemplated in this Agreement.
b. A bill of sale of all Personal Property in the form attached hereto as Exhibit C (“Bill of Sale/Assignment”).
c. Any documents reasonably required by the Title Company to issue the Title Policy. d. A Non-Foreign Affidavit as required by federal law.
e. Such funds and other items and instruments as may be necessary in order for the

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Title Company to comply with this Agreement.

3.2 Buyer. Buyer agrees that on or before 12:00 noon on the day preceding the Closing Date, Buyer will provide all of the following:
a. The Purchase Price.
b. A Certificate of Acceptance in the form attached to the Grant Deed executed by Buyer (“Certificate of Acceptance”) and provided to the City of King prior to the close of escrow between the City of King and MP Broadway or the legal owner of the Property for the purchase of the Property. c. A Preliminary Change of Ownership Statement completed in the manner required by Monterey County (“PCOR”).
d. Such other items and instruments as may be necessary in order to comply with this Agreement or as reasonably requested by a title company if Buyer’s choosing (“Title Company”), if Buyer elects to obtain title insurance for its acquisition of the Property.

3.3 Recordation, Completion and Distribution of Documents. The Parties shall confirm that any documents signed in counterpart are matching documents and shall combine the signature pages thereof so as to create fully executed documents. The Parties shall mutually cooperate to cause the Grant Deed (with the Certificate of Acceptance attached) to be recorded.

4. CLOSING DATE; TIME IS OF ESSENCE; POSSESSION.

4.1 Closing Date. The transaction(s) contemplated by this Agreement shall close (“Closing”) within fifteen (15) days after satisfaction or waiver in writing of all Buyer’s Conditions Precedent (defined below) (the “Closing Date”).

4.2 Time is of Essence. The parties specifically agree that time is of the essence of this Agreement.

4.3 Possession. Upon the Closing, possession of the Property and Personal Property shall be delivered to Buyer.

5. TITLE POLICY.

5.1 Approval of Title. Seller has provided Buyer with a preliminary title report describing the state of title of the Property, together with legible copies of all exceptions and a map plotting all easements. With respect to all matters of title which can be removed by the payment of money affecting the Property, including but not limited to deeds of trust, mortgages, judgment liens, federal and state income tax liens, delinquent general and special real property taxes and assessments and similar monetary encumbrances (excluding any such items caused by Buyer) (“Monetary Liens”), Seller shall cause MP Broadway Street, LLC, a Delaware limited liability company (“MP Broadway”), the current legal owner of the Property to discharge any such Monetary Liens prior to or concurrently with the Closing except as otherwise specifically provided in this Agreement.

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5.1 Owner’s Title Policy. Seller will provide Buyer with an ALTA (non-extended) owner's policy of title insurance (“Owner’s Title Policy”) insuring title to the Property vested in Buyer, from a nationally recognized title company of Buyer’s choosing (the “Title Company”) containing only (i) non-delinquent real property taxes and assessments; (ii) exceptions approved by Buyer in accordance with Section 6.1; (iii) exceptions caused solely by the acts of Buyer, and (iv) the preprinted exceptions in the Owner’s Title Policy, subject to Seller’s delivery to Title Company of any owner’s title affidavit required by Title Company (collectively, the “Permitted Exceptions”). The cost of the Owner’s Title Policy shall be paid by Buyer. If Buyer elects to obtain an extended ALTA owner’s policy, Buyer shall be responsible to secure a survey at its own cost and expense which shall be delivered to the Title Company not less than ten (10) days prior to Closing and Buyer shall be responsible to pay for any additional premium. The Title Policy shall include extended coverage or endorsements that Buyer may request but at Buyer’s expense. Buyer’s election to obtain any such extended coverage and/or additional endorsements shall be at Buyer’s sole cost and expense and shall not be a condition to or otherwise delay the Closing.

7. DUE DILIGENCE AND DUE DILIGENCE PERIOD. For a period of fifteen (15) days following the Agreement Date (“Due Diligence Period”), Buyer shall have the right to perform any investigations or inspections (including, but not limited to, review of title) as Buyer may reasonably determine in order to assess its willingness to purchase the Property pursuant to the terms of this Agreement.

During the Due Diligence Period, Buyer and its agents may, at Buyer’s sole expense, conduct noninvasive tests and physical inspections of the property, including survey(s), building inspections and environmental site assessments desired by Buyer. Any invasive testing, including a Phase II inspection shall require Seller’s prior written consent, in Seller’s sole and absolute discretion. Buyer may also conduct such investigations with regard to the Materials, zoning, building codes, and availability of permits and approvals for its intended construction and use of the Property, as it deems prudent in its sole discretion. Prior to entry upon the Property, Buyer, and/or any of its consultants entering upon the Property, shall provide evidence to Seller that Buyer has procured and paid premiums for an all-risk public liability insurance policy written on a per occurrence and not claims made basis in a combined single limit of not less than ONE MILLION DOLLARS ($1,000,000.00) which insurance names Seller as additional insured. Buyer shall keep the Property free and clear of all mechanic liens, lis pendens and other liens arising out of the entry and work performed under this paragraph and shall maintain or assure maintenance of workers' compensation insurance (or state approved self-insurance) on all persons entering the Property in the amounts required by the State of California. Buyer shall promptly repair and restore the Property to the condition that it was in prior to those tests and inspections and shall indemnify, defend and hold Seller harmless from all damages, costs, loss, expense (including attorney fees) and liability resulting from Buyer’s activities, acts, and omissions on the Property, including, but not limited to, mechanic liens. Buyer’s indemnity obligations under this Section shall survive Closing and termination of this Agreement. At Closing, Buyer shall take the Property AS-IS.

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delivering written notice of termination to Seller and Escrow Agent (“Termination Notice”) on or before the expiration of the Due Diligence Period. Upon the timely delivery of such Termination Notice, this Agreement shall automatically terminate and be of no further force or effect and neither party shall have any further rights or obligations hereunder except for those obligations which expressly survive termination.

If Buyer approves the Property, Buyer shall deliver a written approval notice to Seller (“Approval Notice”) together with the Additional Deposit delivered to Escrow on or before the expiration of the Due Diligence Period. If Buyer fails to deliver the Approval Notice or Termination Notice, Buyer shall be deemed to have elected to approve Due Diligence and proceed with the Transaction.

7.4 NHD Report. Within five (5) days of the Agreement Date, Seller shall order (or shall cause MP Broadway to order) and deliver to Buyer and Seller a Natural Hazards Disclosure report for the Property issued by Disclosure Source (“NHD Report”) for Buyer’s approval. The cost of the NHD Report shall be paid by Seller or MP Broadway.

8. CONDITIONS PRECEDENT TO CLOSING.

8.1 Conditions to Buyer's Obligations. The obligations of Buyer under this Agreement are subject to the satisfaction or written waiver, in whole or in part, by Buyer of each of the following conditions precedent (collectively, “Buyer’s Conditions Precedent”):
(a) Buyer shall provide a Certificate of Acceptance in the form attached to the Grant Deed executed by Buyer and provided to the City of King prior to the close of escrow between the City of King and MP Broadway or the legal owner of the Property for the purchase of the Property.
(b) Title Company will issue the Owner’s Title Policy as specified in Section 6.2, if elected by Buyer.
(c) Seller is not in default of its obligations under this Agreement. (d) As of the Closing Date, Buyer shall have received all approvals, clearances, consents and commitments required from any judicial, governmental or regulatory entity to lawfully convey the Property from Seller to Buyer.

Notwithstanding anything in this Agreement to the contrary, in the event any Buyer’s Conditions Precedent is not satisfied as of the Closing Date, the Closing Date shall be extended for an additional reasonable period of time after the then scheduled Closing Date at Buyer’s option to provide Seller an opportunity to cure the same or to allow the satisfaction of such condition to occur. If the Closing Date is not so extended, or if such Buyer Closing Condition has not been satisfied after such extension, Buyer may grant additional extensions or notify Seller in writing that it elects to terminate this Agreement, whereupon this Agreement shall terminate, the Deposit shall be returned to Buyer and thereafter neither party shall have any further rights or obligations under this Agreement, except for the any obligations which survive such termination.

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8.2 Conditions to Seller's Obligations. The obligations of Seller under this Agreement are subject to the satisfaction or written waiver, in whole or in part, by Seller of the following conditions precedent (“Seller’s Conditions Precedent”):
(a) Buyer has delivered the Purchase Price to Seller.
(b) Buyer is not in default of its obligations under this Agreement.

9. REPRESENTATIONS AND WARRANTIES. Seller represents and warrants to Buyer that, to best of Seller’s knowledge, as of the Agreement Date and as of the Closing Date, that:
a. This Agreement has been duly authorized and executed on behalf of Seller and this Agreement constitutes a valid and binding agreement, enforceable in accordance with its terms.
b. Seller is not a party to any contract, agreement or commitment to sell, convey, assign, transfer, or otherwise dispose of any portion or portions of the Property. c. Seller represents that, except as provided in the Materials, to Seller’s knowledge: (i) the Property is not in breach of any environmental laws; and (ii) the Property is free of any Hazardous Materials that would trigger response or remedial action under any environmental laws or any existing common law theory based on nuisance or strict liability. This warranty is limited to matters of which Seller has current actual knowledge, and Buyer acknowledges that Seller has not made (nor will make) any affirmative investigation or inquiry as to environmental issues affecting the Property in connection with this Agreement. As used in this Agreement, the term “Hazardous Material” means any flammable items, explosives, radioactive materials, hazardous or toxic substances, material or waste or related materials, including any substance defined as or included in the definition of “hazardous substances”, “hazardous wastes”, “hazardous materials” or “toxic substances” now or subsequently regulated under any applicable federal, state or local laws or regulations, including without limitation petroleum-based products, paints, solvents, lead, cyanide, DDT, printing inks, acids, pesticides, ammonia compounds and other chemical products, asbestos, PCBs and similar compounds, and including any different products and materials which are subsequently found to have adverse effects on the environment or the health and safety of persons.
d. There is no litigation pending, threatened against or by Seller or the Property which relates to, or if decided adversely, could have a material adverse effect upon, the Property (including condemnation or similar proceedings).
e. The Property is not subject to any operating, maintenance, or repair contract or other agreements that will bind the Property or Buyer after the Closing.

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on and as of the date of this Agreement and at Closing and shall survive the Closing, until the date which is twelve (12) months after the Closing ("Survival Date") without the necessity of a separate written certificate regarding the same, whereupon such representations and warranties shall be of no further force or effect. Actual knowledge shall not be deemed to exist merely by assertion by Buyer of a claim that any of the foregoing persons should have known of such facts or circumstances, if such person did not have actual knowledge thereof.

The preceding notwithstanding, Seller shall promptly advise Buyer if Seller acquires any information following the Agreement Date which would make any of the representations and warranties set forth in this Section 9 above untrue; provided that it shall not be a breach of such representation or warranty if the information which renders the representation or warranty untrue was not known by Seller as of the Agreement Date. If Seller or Buyer acquires any information following the Agreement Date which would make any of the foregoing representations or warranties untrue, then, as Buyer’s sole and exclusive remedy, Buyer shall have the right, upon ten (10) business days written notice to Seller after learning of such information, to terminate this Agreement by delivery of written notice to Seller and, in the event of such termination, all rights and obligations under this Agreement shall cease and the Deposit (less the Independent Contract Consideration) shall be promptly returned to Buyer; provided, however, if Buyer fails to give written notice of termination within ten (10) business days after verifying such information, then Buyer shall not have the right to terminate this Agreement nor receive the return of the Deposit as provided in this paragraph above based on such representation or warranty that becomes untrue. If, prior to the Closing Date, Buyer becomes aware of any facts that make any of the representations or warranties set forth in Section 8 untrue, but Buyer nevertheless elects to close hereunder, then Buyer shall be deemed to have waived any claim against Seller based on such representation or warranty that Buyer knew was untrue as of the Closing Date. The provisions of the immediately preceding sentence shall survive the Closing.

10. CLOSING PROVISIONS.

10.1 General Closing Provisions. Seller shall deliver the Owner’s Title Policy to the Buyer.

10.2 Real Property Taxes; Utilities; Rent.
a. NO Real Property Tax Prorations.

Real property taxes shall not be prorated. After Closing, Seller shall have the right to recover any excess taxes paid directly by Seller. Buyer shall cooperate with any filing for a refund by Seller.
b. Utilities. Buyer and Seller shall
cause all utilities which are in the name of Seller to be transferred to the name of Buyer as of the Closing as soon thereafter as practicable. Seller shall be entitled to retain (and receive a refund) for any and all utility deposits which are held by the utility company.

10.3 Payment of Costs. No documentary transfer taxes shall be paid or charged to Seller based on the exemption set forth in R&T Code Section 11922 and no recording fees for the Grant Deed shall be payable pursuant to Government Code Section 27383.

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10.4 Information Report. The Parties shall prepare and file any required documentation by the Internal Revenue Service, pursuant to Internal Revenue Code Section 6045(e), regarding the real estate sales transaction contemplated by this Agreement, including without limitation, Internal Revenue Service Form 1099-B as such may be hereinafter modified or amended by the Internal Revenue Service, or as may be required pursuant to any regulation now or hereinafter promulgated by the Treasury Department with respect thereto. The Parties also agree that Buyer and Seller, their respective employees and attorneys may disclose to the Internal Revenue Service, whether pursuant to such Information Report or otherwise, any information regarding this Agreement or the transactions contemplated herein as such party reasonably deems to be required to be disclosed to the Internal Revenue Service by such party pursuant to Internal Revenue Code Section 6045(e), and further agree that neither Buyer nor Seller shall seek to hold any such party liable for the disclosure to the Internal Revenue Service of any such information.

10.5 No Withholding as Foreign Seller. Seller represents and warrants to Buyer that Seller is not, and as of the Closing will not be, a foreign person within the meaning of Internal Revenue Code Section 1445 or an out-of-state seller under California Revenue and Tax Code Section 18805 and that it will deliver to Buyer on or before the Closing a non-foreign affidavit on a standard form pursuant to Internal Revenue Code Section 1445(b)(2) and the Regulations promulgated thereunder and a California Form 590-RE.

11. RISK OF PHYSICAL LOSS. Prior to the Closing, no destruction of, or damage or loss to, the Property or any portion thereof, from any cause whatsoever, shall have occurred which would cost more than Two Hundred Fifty Thousand Dollars ($250,000.00) to repair or cure (“Damage Threshold”). If the cost of repair or cure is the Damage Threshold or less, Buyer shall have the option to either require Seller to repair or cure the loss prior to the Closing or provide any insurance proceeds applicable to such loss to Buyer at the Closing and assign Seller’s interest in any future insurance proceeds applicable to such damage, destruction or loss. Buyer shall have the option, within ten (10) days after receipt of written notice of a loss costing more than the Damage Threshold to repair or cure, to either terminate this Agreement or to purchase the Property notwithstanding such loss, but without deduction or offset against the Purchase Price. If the cost to repair or cure is more than the Damage Threshold, and Buyer does not elect to terminate this Agreement in the time and manner specified above, Buyer shall be entitled to any insurance proceeds applicable to such loss. Seller shall provide to Buyer as part of the due diligence items a copy of current insurance policy covering the Property.

12. DISCLAIMER OF WARRANTIES; AS-IS; RELEASE.

12.1. Disclaimer of Representations and Warranties by Seller. EXCEPT AS MAY BE EXPRESSLY PROVIDED IN THIS AGREEMENT AND SUBJECT TO SELLER’S EXPRESS

REPRESENTATIONS AND WARRANTIES MADE UNDER THIS AGREEMENT, NEITHER SELLER

NOR ANY OF ITS AGENTS, EMPLOYEES OR CONTRACTORS HAS MADE AND IS NOT NOW

MAKING, AND BUYER HAS NOT RELIED UPON AND WILL NOT RELY UPON (DIRECTLY OR

INDIRECTLY), ANY WARRANTIES OR REPRESENTATIONS OF ANY KIND OR CHARACTER,

EXPRESS OR IMPLIED, ORAL OR WRITTEN, PAST, PRESENT OR FUTURE, WITH RESPECT

TO THE PROPERTY, INCLUDING, BUT NOT LIMITED TO, WARRANTIES OR

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REPRESENTATIONS AS TO (A) MATTERS OF TITLE (OTHER THAN SELLER'S LIMITED

WARRANTY OF TITLE SET FORTH IN THE GRANT DEED), (B) ENVIRONMENTAL MATTERS

RELATING TO THE PROPERTY OR ANY PORTION THEREOF, (C) GEOLOGICAL CONDITIONS,

INCLUDING, WITHOUT LIMITATION, SUBSIDENCE, SUBSURFACE CONDITIONS, WATER

TABLE, UNDERGROUND WATER RESERVOIRS, WATER PERCOLATION, LIMITATIONS

REGARDING THE WITHDRAWAL OF WATER AND EARTHQUAKE FAULTS AND THE

RESULTING DAMAGE OF PAST AND/OR FUTURE EARTHQUAKES, (D) WHETHER, AND TO

THE EXTENT TO WHICH, THE PROPERTY OR ANY PORTION THEREOF IS AFFECTED BY ANY

STREAM (SURFACE OR UNDERGROUND), BODY OF WATER, FLOOD PRONE AREA, FLOOD

PLAIN, FLOODWAY OR SPECIAL FLOOD HAZARD, (E) DRAINAGE, (F) SOIL CONDITIONS,

INCLUDING THE EXISTENCE OF INSTABILITY, PAST SOIL REPAIRS, SOIL ADDITIONS OR

CONDITIONS OF SOIL FILL, OR SUSCEPTIBILITY TO LANDSLIDES, OR THE SUFFICIENCY OF

ANY UNDERSHORING, (G) ZONING TO WHICH THE PROPERTY OR ANY PORTION THEREOF

MAY BE SUBJECT, (H) THE AVAILABILITY OF ANY UTILITIES TO THE PROPERTY OR ANY

PORTION THEREOF INCLUDING, WITHOUT LIMITATION, WATER, SEWAGE, GAS AND

ELECTRIC, (I) USAGES OF ADJOINING PROJECTS, (J) ACCESS TO THE PROPERTY OR ANY

PORTION THEREOF, (K) THE VALUE, COMPLIANCE WITH THE PLANS, SIZE, LOCATION,

AGE, USE, DESIGN, QUALITY, DESCRIPTIONS, SUITABILITY, STRUCTURAL INTEGRITY,

OPERATION, TITLE TO, OR PHYSICAL OR FINANCIAL CONDITION OF THE PROPERTY OR

ANY PORTION THEREOF, (L) ANY INCOME, EXPENSES, CHARGES, LIENS,

ENCUMBRANCES, RIGHTS OR CLAIMS ON OR AFFECTING OR PERTAINING TO THE

PROPERTY OR ANY PART THEREOF, (M) THE PRESENCE OF HAZARDOUS MATERIALS IN

OR ON, UNDER OR IN THE VICINITY OF THE PROPERTY, (N) THE CONDITION OR USE OF

THE PROPERTY OR COMPLIANCE OF THE PROPERTY WITH ANY OR ALL PAST, PRESENT

OR FUTURE FEDERAL, STATE OR LOCAL ORDINANCES, RULES, REGULATIONS OR LAWS,

BUILDING, FIRE OR ZONING ORDINANCES, DISABILITY LAWS (INCLUDING AMERICANS

WITH DISABILITIES ACT AND THE FAIR HOUSING ACT), CODES OR OTHER SIMILAR LAWS, (O) THE EXISTENCE OR NON-EXISTENCE OF UNDERGROUND STORAGE TANKS, (P) ANY

OTHER MATTER AFFECTING THE STABILITY OR INTEGRITY OF THE PROPERTY, (Q) THE

POTENTIAL FOR FURTHER DEVELOPMENT OF THE PROPERTY, (R) THE EXISTENCE OF

VESTED LAND USE, ZONING OR BUILDING ENTITLEMENTS AFFECTING THE PROPERTY, (S) THE MERCHANTABILITY OF THE PROPERTY OR FITNESS OF THE PROPERTY FOR ANY

PARTICULAR PURPOSE (BUYER AFFIRMING THAT BUYER HAS NOT RELIED ON THE SKILL

OR JUDGMENT OF SELLER OR ANY OF ITS AGENTS, EMPLOYEES OR CONTRACTORS TO

SELECT OR FURNISH THE PROPERTY FOR ANY PARTICULAR PURPOSE, AND THAT SELLER

MAKES NO WARRANTY THAT THE PROPERTY IS FIT FOR ANY PARTICULAR PURPOSE) OR (T) TAX CONSEQUENCES (INCLUDING, BUT NOT LIMITED TO, THE AMOUNT, USE OR PROVISIONS RELATING TO ANY TAX CREDITS). EXCEPT FOR THE EXPRESS

REPRESENTATIONS AND WARRANTIES OF SELLER IN THIS AGREEMENT, BUYER FURTHER

ACKNOWLEDGES THAT ANY INFORMATION OF ANY TYPE WHICH BUYER HAS RECEIVED

OR MAY RECEIVE FROM SELLER OR ANY OF ITS AGENTS, EMPLOYEES OR CONTRACTORS

INCLUDING, WITHOUT LIMITATION, ANY ENVIRONMENTAL REPORTS AND SURVEYS, IS

FURNISHED ON THE EXPRESS CONDITION THAT BUYER SHALL MAKE AN INDEPENDENT

VERIFICATION OF THE ACCURACY OF SUCH INFORMATION, ALL SUCH INFORMATION BEING FURNISHED WITHOUT ANY REPRESENTATION OR WARRANTY WHATSOEVER.

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12.2 Sale "As Is". BUYER REPRESENTS THAT IT IS A KNOWLEDGEABLE,

EXPERIENCED AND SOPHISTICATED BUYER OF REAL ESTATE AND EXCEPT FOR THE

EXPRESS REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER CONTAINED

WITHIN THIS AGREEMENT, THAT IT HAS RELIED AND SHALL RELY SOLELY UPON (A) ITS

OWN EXPERTISE AND THAT OF BUYER'S CONSULTANTS IN PURCHASING THE PROPERTY,

AND (B) BUYER'S OWN KNOWLEDGE OF THE PROPERTY BASED ON ITS INVESTIGATIONS AND INSPECTIONS OF THE PROPERTY. BUYER HAS CONDUCTED, OR BY THE CLOSING

WILL HAVE HAD SUFFICIENT OPPORTUNITY TO CONDUCT, SUCH INSPECTIONS AND

INVESTIGATIONS OF THE PROPERTY AS BUYER DEEMED OR SHALL DEEM NECESSARY,

INCLUDING, BUT NOT LIMITED TO, THE PHYSICAL AND ENVIRONMENTAL CONDITIONS OF THE PROPERTY AND SHALL RELY UPON SAME. EXCEPT AS MAY BE EXPRESSLY

PROVIDED IN THIS AGREEMENT, UPON CLOSING, BUYER SHALL ASSUME THE RISK THAT

ADVERSE MATTERS, INCLUDING, BUT NOT LIMITED TO, ADVERSE PHYSICAL AND

ENVIRONMENTAL CONDITIONS, MAY NOT HAVE BEEN REVEALED BY BUYER'S INSPECTIONS AND INVESTIGATIONS. BUYER ACKNOWLEDGES AND AGREES THAT,

EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES OF SELLER IN THIS

AGREEMENT, UPON CLOSING, SELLER SHALL SELL AND CONVEY TO BUYER AND BUYER SHALL ACCEPT THE PROPERTY "AS IS, WHERE IS," WITH ALL FAULTS AND DEFECTS (LATENT AND APPARENT). EXCEPT FOR THE EXPRESS REPRESENTATIONS AND

WARRANTIES OF SELLER IN THIS AGREEMENT, BUYER FURTHER ACKNOWLEDGES AND

AGREES THAT THERE ARE NO ORAL AGREEMENTS, WARRANTIES OR

REPRESENTATIONS, COLLATERAL TO OR AFFECTING THE PROPERTY BY SELLER OR ANY AGENT, EMPLOYEE OR CONTRACTOR OF SELLER OR ANY THIRD PARTY. SELLER IS NOT

LIABLE OR BOUND IN ANY MANNER BY ANY ORAL OR WRITTEN STATEMENTS,

REPRESENTATIONS, OR INFORMATION PERTAINING TO THE PROPERTY FURNISHED BY

SELLER (EXCEPT AS REFERENCED UNDER OR EXPRESSLY SET FORTH BY THIS

AGREEMENT), ANY REAL ESTATE BROKER, CONTRACTOR, AGENT, EMPLOYEE, SERVANT

OR OTHER PERSON, UNLESS THE SAME ARE SPECIFICALLY SET FORTH IN THIS AGREEMENT. BUYER ACKNOWLEDGES THAT THE PURCHASE PRICE REFLECTS THE "AS IS" NATURE OF THIS SALE AND ANY FAULTS, LIABILITIES, DEFECTS OR OTHER ADVERSE MATTERS THAT MAY BE ASSOCIATED WITH THE PROPERTY. BUYER HAS FULLY

REVIEWED THE DISCLAIMERS AND WAIVERS SET FORTH IN THIS AGREEMENT WITH ITS COUNSEL AND UNDERSTANDS THE SIGNIFICANCE AND EFFECT THEREOF.

BUYER ACKNOWLEDGES AND AGREES THAT THE DISCLAIMERS AND OTHER AGREEMENTS SET FORTH IN THIS SECTION 12.2 ARE AN INTEGRAL PART OF THIS

AGREEMENT AND THAT SELLER WOULD NOT HAVE AGREED TO SELL THE PROPERTY TO

BUYER FOR THE PURCHASE PRICE WITHOUT THE DISCLAIMERS AND OTHER AGREEMENTS SET FORTH IN THIS SECTION 12.2.

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("Released Parties") from any and all claims, responsibility and/or liability that it may now have or hereafter acquire against any of the Released Parties for any costs, loss, liability, damage, expenses, demand, action or cause of action arising from or related to the condition (including any construction defects, errors, omissions or other conditions, latent or otherwise, and the presence in the soil, air, structures and surface and subsurface waters of materials or substances that have been or may in the future be determined to be Hazardous Materials (hereinafter defined) or otherwise toxic, hazardous, undesirable or subject to regulation and that may need to be specially treated, handled and/or removed from the Property under current or future federal, state and local laws regulations or guidelines), valuation, salability or utility of the Property, or its suitability for any purpose whatsoever.

This release includes claims of which Buyer is presently unaware or which Buyer does not presently suspect to exist which, if known by Buyer, would materially affect Buyer's release to Seller. In this connection and to the extent permitted by law, Buyer hereby agrees, represents and warrants that Buyer realizes and acknowledges that factual matters now unknown to it may have given or may hereafter give rise to causes of action, claims, demands, debts, controversies, damages, costs, losses and expenses which are presently unknown, unanticipated and unsuspected, and Buyer further agrees, represents and warrants that the waivers and releases herein have been negotiated and agreed upon in light of that realization and that Buyer nevertheless hereby intends to release, discharge and acquit Seller from any such unknown causes of action, claims, demands, debts, controversies, damages, costs, losses and expenses. With respect to the matters released herein, Buyer specifically waives the provision of California Civil Code Section 1542, which provides as follows:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR

OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR

HER FAVOR AT THE TIME OF EXECUTING THE RELEASE AND THAT, IF

KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER

SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY
Buyer has initialed this Section 12.3 to indicate his awareness and acceptance of each and every provision hereof.

Buyer’s Initials

13. NOTICES. All notices required or permitted under this Agreement shall be in writing and shall be served on the parties at the addresses set forth below. Any such notices shall, unless otherwise provided herein, be given or served (i) by depositing the same in the United States mail, postage paid, certified and addressed to the party to be notified, with return receipt requested, (ii) by overnight delivery using a nationally recognized overnight courier, or (iii) by personal delivery. Notice deposited in the mail in the manner hereinabove described shall be effective upon receipt or rejection of such notice. Notice given in any other manner shall be effective only if and when received (or rejected) by the party to be notified between the hours of 8:00 a.m. and 5:00 p.m. California time of any business day with delivery made after such hours to be deemed received the following business day. A party’s address may be changed by written notice to the other party; however, no notice of a change of address shall be effective until actual receipt of such notice. Copies of notices are for informational purposes only, and a failure to give or receive copies of any notice shall not be deemed a failure to give notice. Notices given by counsel to the Buyer shall be deemed given by Buyer and

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notices given by counsel to the Seller shall be deemed given by Seller.

To Buyer: Housing Authority of the County of Monterey
Attn: Zulieka Boykin
123 Rico Street
Salinas, CA 93907
With a copy to:

Fox Rothschild LLP
BNY Mellon Center
500 Grant Street, Suite 2500
Pittsburgh, PA 15219
Attn: Michael H. Syme, Esq.

Email: [email protected]
To Seller: City of King
212 S. Vanderhurst Ave.

King City, CA 93930
Attention: Steven Adams, City Manager
With a copy to: Aleshire & Wynder, LLP
2440 Tulare Street Suite 410
Fresno, CA 93721
Attention: Roy C. Santos, City Attorney

14. ADDITIONAL BUSINESS TERMS.

14.1 No Marketing of Property. So long as this Agreement is in effect, Seller agrees that it will not market the Property to any other party in any manner.

14.2 No Impairing of Title. Until the Closing, Seller shall not do anything which would impair Seller's title to the Property.

15. COMPLIANCE WITH EXISTING AGREEMENTS. The Buyer knowingly and voluntarily agrees to comply with the terms, conditions and/or requirements of the following agreements: (1) Settlement Agreement between the Seller and the California Department of Housing and Community Development (attached hereto as Exhibit D) (the “Settlement Agreement”); (2) the Restrictive Covenant Recorded upon the Property (attached hereto as Exhibit E); and (3) the Letter of Agreement for the Alliance Housing Fund entered into between Santa Cruz-Monterey-Merced-San Benito-Mariposa Managed Medical Care Commission (operating as Central California Alliance for Health) and the Seller (attached hereto as Exhibit F). Exhibits D, E and F are hereby incorporated into this Agreement by reference as if stated fulling within this Agreement. Further, the Buyer agrees to indemnify and hold harmless the Seller, its elected or appointed officials, employees and contractors from any claims, causes of action and/or liability, whether seeking monetary and/or equitable relief, arising from the alleged violation of the terms, conditions and/or requirements, as

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stated within the above referenced agreements which have been incorporated by reference within this Agreement, by the Buyer and/or its elected or appointed officials, employees, contractors and/or operators. In the event of any conflict or inconsistency between the the terms and conditions of this Agreement and the terms and conditions of the Settlement Agreement, the terms and conditions of the Settlement Agreement shall control.

15.1 Further Assurances. From and after the Closing, Seller shall cooperate with Buyer, provide any additional information or documentation, and execute any additional documentation reasonably required by Buyer in connection with Buyer’s ownership, use or development of the Property. The provisions of this Section 15.1 shall survive the Closing

16. GENERAL PROVISIONS.

16.1 Assignment. Neither party shall have the right to assign this Agreement or any interest or right hereunder without the prior written consent of the other party. Subject to the foregoing, this Agreement shall be binding upon and shall inure to the benefit of Buyer and Seller and their respective heirs, personal representatives, successors and assigns.

16.2 Attorney’s Fees. In any action between the parties hereto, seeking enforcement of any of the terms and provisions of this Agreement or in connection with the Property, the prevailing party in such action shall be entitled, to have and to recover from the other party its reasonable attorneys' fees and other reasonable expenses in connection with such action or proceeding, in addition to its recoverable court costs.

16.3 Interpretation; Governing Law. This Agreement shall be construed according to its fair meaning and as if prepared by both parties hereto. This Agreement shall be construed in accordance with the laws of the State of California in effect at the time of the execution of this Agreement. Titles and captions are for convenience only and shall not constitute a portion of this Agreement. As used in this Agreement, masculine, feminine or neuter gender and the singular or plural number shall each be deemed to include the others wherever and whenever the context so dictates.

16.4 No Waiver. No delay or omission by either party in exercising any right or power accruing upon the compliance or failure of performance by the other party under the provisions of this Agreement shall impair any such right or power or be construed to be a waiver thereof. A waiver by either party of a breach of any of the covenants, conditions or agreements hereof to be performed by the other party shall not be construed as a waiver of any succeeding breach of the same or other covenants, agreements, restrictions or conditions hereof.

16.5 Modifications. Any alteration, change or modification of or to this Agreement, in order to become effective, shall be made by written instrument or endorsement thereon and in each such instance executed on behalf of each party hereto.

16.6 Severability. If any term, provision, condition or covenant of this Agreement or the application thereof to any party or circumstances shall, to any extent, be held invalid or unenforceable, the remainder of this instrument, or the application of such term, provisions, condition or covenant to persons or circumstances other than those as to whom or which it is held invalid or

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unenforceable, shall not be affected thereby, and each term and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.

16.7 Merger. This Agreement and other documents incorporated herein by reference contain the entire understanding between the parties relating to the transaction contemplated hereby and all prior to contemporaneous agreements, understandings, representations and statements (including letters of intent), oral or written, are merged herein and shall be of no further force or effect.

16.8 Execution of Documents. The parties agree to execute such instructions to Title Company and such other instruments and to do such further acts as may be reasonably necessary to carry out the provisions of this Agreement.

16.9 Inducement. The making, execution and delivery of this Agreement by the parties hereto have been induced by no representations, statements, warranties or agreements other than those expressly set forth herein.

16.10 Relationship of Parties. Notwithstanding anything to the contrary contained herein, this Agreement shall not be deemed or construed to make the parties hereto partners or joint venturers, or to render either party liable for any of the debts or obligations of the other, it being the intention of the parties to merely create the relationship of Seller and Buyer with respect to the Property to be conveyed as contemplated hereby.

16.11 No Personal Liability. No member, official, employee, agent or contractor of Seller shall be personally liable to Buyer in the event of any default or breach by Seller or for any amount which may become due to Buyer or on any obligations under the terms of the Agreement.

16.12 Force Majeure. If either party is delayed or prevented from performing any act required in this Agreement by reason of any event beyond the reasonable control of either party, including without limitation, by labor disputes, pandemic, fire, unusual delay in deliveries, weather or acts of God, terrorism, delay in the issuance of permits or approvals, acts of governmental entities, unavoidable casualties or any other such causes beyond such party’s control, then the time herein fixed for completion of such obligation(s) shall be extended by the number of days that such party has been delayed.

16.13 Representation by Counsel. Each party hereto represents and agrees with each other that it has been represented by or had the opportunity to be represented by, independent counsel of its own choosing, and that it has had the full right and opportunity to consult with its respective attorney(s), that to the extent, if any, that it desired, it availed itself of this right and opportunity, that it or its authorized officers (as the case may be) have carefully read and fully understand this Agreement in its entirety and have had it fully explained to them by such party’s respective counsel, that each is fully aware of the contents thereof and its meaning, intent and legal effect, and that it or its authorized officer (as the case may be) is competent to execute this Agreement and has executed this Agreement free from coercion, duress or undue influence.

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Agreement may be electronically executed by the parties in accordance with the requirements of ESIGN and UETA by such third party providers such as DocuSign.

16.15 Exhibits. Exhibits A-1, A-2, B, C, D, E, and F are attached hereto and incorporated herein by reference.

16.16 1031 Exchange. In the event Seller so desires, Buyer agrees to cooperate with Seller in completing the sale of the Property as part of a tax deferred exchange pursuant to the provisions of Section 1031 of the Internal Revenue Code of 1986, as amended. Seller and Buyer agree to execute any and all additional documents as may be reasonably required in connection with such exchange; provided, however, that (a) the successful completion of any such exchange shall not delay the date of the Closing as provided for herein, (b) neither party shall be required to expend additional consideration or incur additional liabilities to the other party or to third parties as a result of any such exchange, (c) Buyer shall not be required to accept title to any other real estate; and (d) any documents to be executed in connection with any such exchange shall be delivered at least five (5) days prior to the Closing.

16.17 No Third-Party Beneficiaries. Except as otherwise expressly set forth herein, Seller and Buyer do not intend, and this Agreement shall not be construed, to create a third-party beneficiary status or interest in, nor give any third-party beneficiary rights or remedies to, any other person or entity not a Party to this Agreement.

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EXHIBIT 4
4 DECLARATION OF RESTRICTIVE COVENANTS

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

City of King
212 South Vanderhurst Avenue
King City, CA 93930
Attn: Steven Adams, City Manager
_________
APN(s) 026-401-020 SPACE ABOVE FOR RECORDER’S USE ONLY
Exempt from recording fees under Govt Code 6103 & 27383

DECLARATION OF RESTRICTIVE COVENANTS
This Declaration of Restrictive Covenants (“Declaration”), dated _________ ___, 2025 (“Declaration Date”) by the HOUSING AUTHORITY OF THE COUNTY OF MONTEREY, a California joint powers authority and its successors, assigns, and transferees (“Owner” or “Declarant”), is hereby made in favor of CITY OF KING, a municipal corporation (“City”). The Owner and City are jointly referred to herein as “Parties.” SANTA CRUZMONTEREY-MERCED-SAN BENITO-MARIPOSA MANAGED MEDICAL CARE COMMISSION, a public entity of the State of California, operating as Central California Alliance for Health (“Alliance”) is hereby made a third-party beneficiary of this Declaration with the direct right, but not the duty, to enforce this Declaration, in the exercise of its sole and absolute discretion, against the Parties in the event of the Parties’ breach, default, or other non-compliance under this Declaration.

RECITALS
Capitalized terms used but not defined in these recitals are as defined in Section 2 of this Declaration.
4 Signature lines intentionally omitted from Exhibit 4 for brevity

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The Alliance established the Alliance Housing Fund to fund projects in the areas of permanent housing, recuperative care, and short-term post-hospitalization housing that address homelessness and housing insecurity as social determinants of health (“Housing Fund Purpose”).

Owner has acquired title to and owns that certain real property located at 1130 Broadway Street, in City of King, County of Monterey, State of California (Assessor Parcel Number 026-401-020-000), as legally described on Exhibit A attached hereto and incorporated herein by reference ("Real Property"). As of the date of recordation of this Declaration, the Real Property is the site of a forty-five (45) unit hotel, which facility shall be rehabilitated to provide forty-four (44) units of Permanent Housing for the Target Population and one (1) manager’s unit (collectively, the “Development”). The Real Property and the Development are referred to in this Declaration as the "Property." Owner will own and operate the Property as Permanent Housing in accordance with the Program Requirements, as defined herein.

This Declaration is being recorded pursuant to Program Requirements that City cause the recordation of a fifteen (15) year use restriction against the fee title to the Property.

NOW, THEREFORE, in consideration of the foregoing premises, the Alliance’s contribution of additional funds towards the acquisition and construction of the Property and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Declarant hereby covenants, agrees and declares that the Property shall be owned, held, leased, encumbered, used, maintained, and transferred pursuant to the following restrictive covenants, conditions, restrictions, and limitations (“Covenants”). Such Covenants shall be binding upon all of Declarant’s successors, assigns and transferees to or of the Property, and upon all lessees, tenants, lenders, contractors, agents, and persons claiming an interest in the Property, or claiming an interest by or through any of the foregoing.

COVENANTS

1. Recitals. The recitals set forth above are hereby incorporated in full into and form a part of this Declaration.

2. Definitions. When used in this Declaration, the following terms have the following meanings:

A.
(a) “30% AMI Household" means a household whose Adjusted Income does not exceed 30% of Area Median Income.
(b) "Actual Household Size" means the actual number of persons in the applicable household.

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(c) "Adjusted Income" means with respect to the household occupying a Unit, the income from all persons in the household including nonrelated individuals, calculated using the methods to calculate income in accordance with the Homekey Program. (d) "Area Median Income" or “AMI” means the median gross yearly income, adjusted for Actual Household Size as specified herein, in City of King, California as published from time to time by HUD. In the event that such income determinations are no longer published, or are not updated for a period of at least eighteen (18) months, City shall provide other income determinations that are reasonably similar with respect to methods of calculation to those previously published by HUD. (e) "At Risk of Homelessness" means an individual or household that is at risk of homelessness, as defined in Part 578.3 of Title 24 of the Code of Federal Regulations. A household that is At Risk of Homelessness must qualify as a 30% AMI Household in order to be income-eligible for a Unit.
(f) “Chronically Homeless” means an individual or household that is chronically homeless as defined in accordance with Part 578.3 of Title 24 of the Code of Federal Regulations.
(g) “Effective Date” means the date this Declaration is recorded in the Official Records of Monterey County.
(h) “Homeless” means individuals and families who are experiencing homelessness, as defined in Part 578.3 of Title 24 of the Code of Federal Regulations. (i) "HUD" means the United States Department of Housing and Urban Development. (j) "Permanent Housing" means housing, dwellings, or other living accommodations where the landlord does not limit the tenant’s length of stay or restrict the tenant’s movements and where the tenant has a lease and is subject to the rights and responsibilities of tenancy pursuant to California Civil Code section 1940. (k) “Program Requirements” means all of the following:
i. the NOFA;
ii. the Homekey Program;
iii. the Housing Fund Purpose;
iv. the Uniform Multifamily Regulations (Cal. Code Regs., tit. 25, § 8300 et seq.), effective November 15, 2017, and as subsequently amended, except

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to the extent that any UMR provision would be inconsistent with the provisions of the NOFA (the “UMRs”);
v. the American Rescue Plan Act of 2021 (Pub.L. No. 117-2) and all related federal guidance (“ARPA”); and
vi. all applicable local, state, and federal law.
(l) “Target Population” means individuals and families who are Homeless, Chronically Homeless, or At Risk of Homelessness and with incomes that meet then-current Medi-Cal eligibility income requirements.
(m) “Supportive Services” means social, health, educational, income support, employment, and housing stability services and benefits; coordination of community building and educational activities; individualized needs assessment and case management; and individualized assistance with obtaining services and benefits. (n) "Term" means the 15-year term of this Declaration, which commences on either (i) the Effective Date of this Declaration, or (ii) the date of issuance of the certificate of occupancy, whichever occurs later in time.
(o) "Unit" means one (1) or all of forty-four (44) units in the Property. The manager unit at the Property is not considered a Unit.

3. Affordability and Occupancy Covenants.

3.1 Occupancy Requirements. For a period of not less than fifteen (15) years from the date of completion of the Project, Owner must restrict occupancy for at least 80% of the Units to the Target Population. The Medi-Cal income limits at the time this Restrictive Covenant is recorded are determined as follows:
(a) 0% – 138% of Federal Poverty Limit (“FPL”) qualifies for Medi-Cal (ex., for a family of four in 2024, 138% FPL is $43,056.00)
B.
(b) 138% - 213% of FPL may qualify for modified adjusted gross income (MAGI) Medi-Cal during pregnancy
C.
(c) Children (under 19 years of age) in a family with a household income of 266% or less qualify for Medi-Cal.

If a Unit is available but there is no person qualifying and ready to occupy under one of the foregoing specific groups, Owner may allow a member of one of the other Target Population groups to occupy that Unit. If a Unit is available but there is no person qualifying and ready

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to occupy the Unit under one of the foregoing specific groups or one of the other Target Population groups, then beginning sixty (60) days after such unit becomes available, Owner may allow an individual or household whose Adjusted Income does not exceed 50% of Area Median Income to occupy the Unit, so long as such individual or household meets the definition of Homeless or Chronically Homeless.

3.2 Accessibility. Owner shall comply with all applicable state and federal building codes and standards, as well as with all design and accessibility laws. Without limiting the generality of the foregoing, Owner shall further ensure that the Development is in compliance with the following housing and building accessibility requirements:
(a) California Building Code Chapters 11A and 11B;
(b) the Fair Housing Act (42 U.S.C. § 3601 et seq.) and its implementing regulations at 24 Code of Federal Regulations part 100, and the ANSI A117.11986 design and construction standard incorporated by reference at 24 Code of Federal Regulations part 100.201a;
(c) the Americans with Disabilities Act of 1990 (42 U.S.C. § 12101 et seq.) and its implementing regulations at 28 Code of Federal Regulations part 35 (Title II) and part 36 (Title III);
(d) Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. § 794) and its implementing regulations at 24 Code of Federal Regulations part 8; and D.
(e) the Uniform Federal Accessibility Standards (UFAS) at 24 Code of Federal Regulations part 40, or, in the alternative, the 2010 ADA Standards for Accessible Design.

3.3. Tenant Selection. Referrals to Units shall be made through the local Coordinated Entry System (“CES”), or another comparable prioritization system based on greatest need shall be used. All referral protocols for Units shall be developed in collaboration with the local Continuum of Care and implemented consistent with the Program Requirements.

3.4 Rent Standards. Rent limits for initial occupancy, and for each subsequent occupancy, of a Unit shall not exceed thirty percent (30%) of that Unit’s designated incomeeligibility level.

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4. Management Responsibility; Maintenance and Repair; Construction.

4.1 Management Responsibility. Owner is responsible for all management functions with respect to the Property. City shall have no direct responsibility over management of the Property other than its enforcement of this Declaration. Owner shall retain a professional property management company, approved by City in its reasonable discretion, to perform its management duties hereunder. Any change of the professional property management company shall be approved by City in its reasonable discretion.

Owner shall provide the contact information for the property management company. Owner shall cause the Property to be managed by an experienced management agent with an ability to operate residential facilities like the Property in a manner that will provide decent, safe, and sanitary housing. City hereby approves of Step Up on Second Street, Inc., a California nonprofit public benefit corporation, as the initial management agent for the Property. If City determines that the professional management company is not complying with the requirements of this Declaration with respect to the Property, City may demand that Owner retain a different professional management company.

4.2 Maintenance and Repair. Owner agrees at all times during the Term:
(a) To keep the Property in decent, safe, sanitary, tenantable condition and repair, and to permit no material waste thereof;
(b) Not to commit or suffer to be done or exist on or about the Property any condition causing the Property to become materially less valuable, except in accordance with these Covenants;
(c) Not to construct any buildings or improvements on the Property, other than the buildings and improvements contemplated as part of the Property; or add to, remove, demolish or structurally alter any buildings or improvements now or hereinafter located on the Property;
(d) To promptly repair, restore or rebuild any buildings or improvements on the Property that may be materially damaged or destroyed while subject to this Declaration;
(e) To comply with all applicable laws affecting the Property and all other Program Requirements, and not to suffer or permit any violations thereof, nor of any material covenant, condition or restriction affecting the Property; (f) To comply with the requirements of all covenants recorded against the Property provided same do not conflict with the terms of this Declaration;

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(g) Not to initiate or acquiesce in any change in any zoning or other land use or legal classification or entitlement which affects any of the Property without City's and the Alliance’s prior written consent; and
(h) Not to alter the use of all or any part of the Property without City’s prior written consent.

4.3 Supportive Services. Onsite Supportive Services will be provided by a services provider approved by City and Owner (“Services Provider”). (a) Supportive services will include, but are not limited to: Case management – case managers will connect tenants to all available services and work with tenants to develop an individualized service plan (“ISP”). Case managers will meet with tenants at least once per month or more, as outlined in the tenant’s ISP. (b) Behavioral health services – tenants will be linked to behavioral health services through the lead service provider, Services Provider or another community behavioral health agency. Services provided will include individual therapy, group therapy, and psychiatric medicine support.
(c) Physical health services – tenants will be linked to care through their primary care physician or a community health clinic. Supportive Services staff will help tenants access off-site resources for physical health care. (d) Assistance obtaining benefits and essential documentation – helping tenants access benefit programs including medical benefits, food assistance, financial aid, and disability income.
(e) Life skills for daily living, rehabilitation, and independence – life skills training including money management, time management, positive self-care and behavior, relationship building, and social-emotional skills. (f) Total Full-Time Equivalent (FTE) staff positions (half-time is 0.5). Case manager ratio is 15:1 for persons experiencing Chronic Homelessness and 25:1 for persons at-risk of homelessness. Supportive Services staffing will include:
* Vice President (.05 FTE, off-site)
* Director (.1 FTE, off-site)
* Program Manager (.2 FTE, on-site)
* Lead Service Coordinator (.5 FTE, on-site)
* Service Coordinator I (2 FTE, on-site)

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(g) Supportive Services goal outcomes include:
i. Ninety percent (90%) of tenants retain Permanent Housing after one year. ii. Eight percent (8%) of tenants obtain and maintain eligible benefits. Tenants increase their ability to live independently based on individualized goals in their ISP.
iii. Tenants’ independence and self-sufficiency will be tracked by the percentage decrease in accessing Supportive Services after one year.

Program goal is a twenty-five percent (25%) decrease in services use after one year.
iv. Tenants will be introduced to harm reduction practices. Program goal is increased use of harm reduction techniques in a tenant’s ISP.

4.4 Use of Funds. Owner shall use all funds received for constructing, rehabilitating, and operating the Development in accordance with the Program Requirements.

5. Restrictions on Sale, Encumbrance, and Other Acts.

5.1 Owner shall not, except with both the Alliance’s and City’s prior written consent, make any sale, encumbrance, hypothecation, assignment, refinancing, pledge, conveyance, or transfer (each a “Transfer”) of the Property, the Development, or of any portion thereof or interest therein, which consent may be conditioned or withheld in the Alliance’s and City’s sole and absolute discretion.

5.2 If both the Alliance and City determine, in their sole and absolute discretion, to grant their prior written consent for a Transfer of the Property, the Development, or of any portion thereof or interest therein, without limiting the generality of Section 5.1 above, such consent may impose terms and conditions, as necessary, to preserve or establish the fiscal integrity of the Property or the Development, or to ensure compliance with the Program Requirements.

6. Charges; Liens. Owner shall pay all real property taxes, assessments, liens and other charges, fines and impositions attributable to, levied against or encumbering the Property or the Development, by Owner making full and timely payment, when due, directly to the payee thereof. Owner shall promptly furnish to City all notices of such amounts due, and where Owner makes direct payments, Owner shall promptly furnish to City its receipts evidencing such payments. Owner shall fully and timely pay when due all encumbrances, charges, and liens on the Property or the Development, and shall make payments on notes or other obligations secured by an interest in the Property or in the Development, with

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interest in accordance with the terms thereof. Owner shall have the right to contest in good faith any claim or lien, or payment due thereunder, so long as Owner does so diligently and without prejudice to City.

7. Building Permits. Owner agrees not to apply for or accept any permits for the construction of improvements on the Property that are inconsistent with the lawful construction, rehabilitation, and/or operation of the Development in accordance with the Program Requirements and as approved by City.

8. Hazard and Liability Insurance and Condemnation; Indemnity.

8.1 Hazard and Liability Insurance and Condemnation.
(a) Owner shall keep the Property and the Development insured against loss by fire and such other hazards, casualties, liabilities and contingencies, and in such amounts and for such periods as reasonably required by City. During any construction, insurance shall include standard policies including builder’s risk coverage. All insurance policies and renewals thereof shall be issued by a carrier and in a form reasonably acceptable to City. Owner shall provide proof of such insurance to City at all times upon request by City. (b) In the event of any fire or other casualty to the Property or the Development, or eminent domain proceedings resulting in condemnation of the Property or the Development or any part thereof, Owner shall have the right to rebuild the Property or the Development, and to use all available insurance or condemnation proceeds therefor, provided that, as determined by City in its sole and absolute discretion, (i) such proceeds are sufficient to rebuild the Property or the Development in a manner that ensures continued operation of the Development in accordance with the terms of this Declaration and Program Requirements; (ii) all such proceeds will be held by City and distributed to pay for the reconstruction utilizing a disbursement control company which will require standard documentation for disbursement; and (iii) no material breach or default then exists under any agreements between or among the Parties and the Alliance. If the casualty or condemnation affects only part of the Property or the Development and if total rebuilding is infeasible, then the insurance or condemnation proceeds may be used for partial rebuilding and/or partial repayment of the amounts funded to the Property by the Alliance provided that the requirements in subsections (ii) and (iii) shall apply in the event of rebuilding.

City has the right but not the obligation to approve the plans and specifications for any major rebuilding, as well as the right but not the obligation to approve disbursements of insurance or condemnation proceeds for rebuilding under a construction escrow or similar arrangement. Any standard requirements of the

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City as a municipality shall apply such as approval of plans, building permits, etc.

8.2 Indemnity. Owner agrees for itself and its successors and assigns to indemnify, defend, and hold harmless City and the Alliance, and their respective appointees, officers, members, officials, employees, agents, volunteers, and representatives, from and against any loss, liability, claim, or judgment relating in any manner to the Property and this Declaration excepting only any such loss, liability, claim, or judgment to the extent arising out of the intentional wrongdoing or gross negligence of City or the Alliance, or their respective appointees, officers, officials, employees, members, agents, volunteers, or representatives. Notwithstanding the foregoing, the City and the Alliance acknowledge and agree that any obligation of Owner to hold harmless, defend, or indemnify hereunder shall be payable by Owner only out of Non-Federal Funds. For purposes of this Declaration, the term "Non-Federal Funds" means assets and funds that are not restricted by law or contract for use in government-sponsored programs (including without limitation any funds received or held by Owner with respect to Owner's public housing portfolio). Without limiting the foregoing, there shall be no recourse against (i) any public housing project of Owner; (ii) any operating receipts of Owner (as the terms "public housing project" and "operating receipts" are defined in the Annual Contributions Contract between Owner and the U.S. Department of Housing and Urban Development, as amended (the "ACC"), or in any amendments thereto); or (iii) any public housing operating reserves of Owner reflected in Owner’s annual operating budget required under the ACC. Owner’s obligations hereunder are limited to eligible non-public housing assets (e.g., Section 8 administrative fee reserves or other assets not subject to any Declaration of Trust and not acquired or merged with assets acquired with public housing funds under the United States Housing Act of 1937, as amended).

9. Covenants Run with the Land. The Property is held and hereafter shall be held, conveyed, hypothecated, encumbered, leased, rented, used and occupied subject to these Covenants. The foregoing Covenants are intended to constitute both equitable servitudes and covenants running with the land. Owner expressly acknowledges and agrees that the Covenants are reasonable restraints on Owner’s right to own, use, maintain, and transfer the Property and any estate or interest therein and are not and shall not be construed to be an unreasonable restraint on alienation. Each and every contract, deed or other instrument hereafter executed covering or conveying or encumbering the Property, or any portion thereof, shall be held conclusively to have been executed, delivered, and accepted subject to such Covenants, regardless of whether such Covenants are set forth in such contract, deed, or other instrument.

10. Binding Effect. Any purchaser, encumbrancer, or lessee of the Property or of any portion thereof or interest therein, by the acceptance of the deed, lease, mortgage, deed of trust, agreement, or other instrument, whether from Owner or from any subsequent owner

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of the Property, or by the signing of a contract or agreement to purchase the Property, shall by the acceptance of such deed, lease, mortgage, deed of trust, agreement, or other instrument, or by the signing of such contract or declaration, be deemed to have consented to and accepted all Covenants and obligations set forth in this Declaration.

11. Default, Remedies. A default under this Declaration shall entitle City to any and all rights, remedies, or damages available at law, in equity or otherwise, including, but not limited to, those that are specified below. The Alliance shall be entitled to enforce the same such rights, remedies, or damages as a beneficiary under this Declaration. The Alliance’s or City’s failure to exercise any specific right or remedy shall not be construed as a waiver of that or any right or remedy. The Alliance and City may each enforce any provision of this Declaration jointly or independently.

11.1 Specific Performance. The use, repair, and maintenance of the Property in support of the Development as contemplated by this Declaration is of a special and unique kind and character, so that a breach of any material provision of this Declaration by Owner would not have an adequate remedy at law. Therefore, this Declaration, and the Alliance’s and City’s rights and Owner’s obligations hereunder, may be enforced by an action for specific performance and such other equitable relief as is provided by the laws of the State of California.

11.2 Injunctive Relief. In pursuing specific performance of this Declaration, the Alliance and City shall be entitled to petition the court for injunctive relief to preserve their interests in the Property and their rights under this Declaration. Such injunctive relief may include a court order restraining actions that are inconsistent with the Covenants.

11.3 Appointment of Receiver. In conjunction with any other remedy available at law or in equity, the Alliance and City may apply to a court of competent jurisdiction for the appointment of a receiver to take over and operate the Property or the Development in accordance with the Program Requirements and this Declaration.

11.4 Right to Advance & Enter. The Alliance and City shall have the right to advance funds to pay any charges due to protect the Property including, but not limited to, real estate taxes or liens, and to enter the Property to perform any required maintenance and to recover the cost of same from Owner together with interest thereon as provided below.

11.5 Interest. Any amounts not paid when due (e.g., damages, attorney fees) shall bear interest thereon at four percent (4%) above the Reference Rate as charged by Bank of America, a national banking association, as of the date such sum was advanced by or otherwise due to a party and continuing until it is repaid in full, but in no event, shall

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such rate of interest exceed the lesser of: (i) ten percent (10%) per annum, or (ii) the maximum rate permitted by law.

All of the foregoing rights and remedies are in addition to and not in limitation of any and all other rights that City or the Alliance may have hereunder, at law, in equity or otherwise. All of the above rights and remedies shall be cumulative and non-exclusive to the maximum extent permitted by law.

12. Attorneys’ Fees. In the event of any litigation or other legal proceeding including, but not limited to, arbitration or mediation between the parties arising from this Declaration, the prevailing party will be entitled to recover, in addition to any other relief awarded or granted, its reasonable costs and expenses (including reasonable attorneys’ fees) incurred in the proceeding.

13. Review and Inspection.

13.1 At any time during the term of this Declaration and upon reasonable prior notice, the Alliance, City or either party’s designee may, but is not obligated to, enter and inspect the Property, and inspect all records pertaining to the construction, rehabilitation, operation, repair, and maintenance of the Property, subject to the rights of any tenants or occupants in the Property. Upon request by the Alliance or City, Owner shall notify occupants of upcoming inspections in accordance with state law.

13.2 The Alliance or City may, but is not obligated to, request any other information that it deems necessary to confirm compliance with this Declaration. Owner shall provide such requested information to the extent reasonable under the circumstances within fourteen (14) calendar days of written request for the information.

13.3 The Alliance and City shall not, by the fact of making or not making any entries or inspections, or by taking or failing to take any action in response thereto: (i) incur or undertake, or be deemed to incur or undertake, any obligation, duty, or liability whatsoever, whether to Owner or to any other person or entity; (ii) be deemed as approving or disapproving any matter, action, incident, or condition related to the Property or the Development; or (iii) be deemed as approving or disapproving any matter related to the compliance of the Property or the Development with the Program Requirements, this Declaration, or other applicable laws. In no event or circumstance shall the Alliance’s or City’s exercise or non-exercise of its discretion under this paragraph constitute, or be deemed or interpreted as constituting, any termination, limitation, alteration, or waiver of any right, benefit, or remedy under or with respect to this Property or this Declaration.

14. City and Owner Representations. As of the Effective Date:

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14.1 Owner represents and warrants to the Alliance and City that: (i) Owner owns the Property and is able to support the operation of the Development in accordance with the Program Requirements and this Declaration; and (ii) to Owner’s actual knowledge and belief, there are no agreements, contracts, covenants, conditions, or exclusions to which Owner is a party, or by which it is bound, which would, if enforced, prohibit or restrict the use of the Property in accordance with the terms of this Declaration.

14.2 Owner and City respectively represent and warrant to each other and the Alliance that it has the full right and authority to enter into this Declaration.

14.3 Owner and City represent to each other and the Alliance that this Declaration constitutes a valid and legally binding obligation on Owner and it is enforceable in accordance with its terms.

15. Amendment, Modification. This Declaration shall not be amended, modified, waived or released without the prior and express written consent of an authorized representative of both City and the Alliance. Any such amendment, modification, waiver, or release must be executed by the Parties and the Alliance, be in recordable form and recorded in the Official Records of Monterey County upon full execution. The Alliance and City may withhold, condition, or delay their consent to any such modification, amendment, waiver or release in their sole and absolute discretion. Any amendment, modification, waiver, or release without the prior and express written consent of the Alliance and City shall be null and void.

16. Notice. Any notice, report, or other communication required or permitted to be given hereunder shall be made in writing and shall be given by personal delivery, certified or registered mail, postage prepaid, return receipt requested, at the addresses specified below, or at such other addresses as may be specified in writing by the parties hereto. Any notice, report, or other communication required or permitted to be given hereunder shall also be given by electronic mail at the electronic mail addresses set forth below.

City: City of King City
212 South Vanderhurst Ave
King City, CA 93930
Attn: City Manager
Copy to: City of King City
212 South Vanderhurst Ave
King City, CA 93930
Attn: City Attorney

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Alliance: Central California Alliance for Health
1600 Green Hills Road, Suite 101
Scotts Valley, CA 95066-4691
Attn: Legal Services and Program Development
Owner/Declarant:

Copy to:

Housing Authority of the County of Monterey
Attn: Zulieka Boykin
123 Rico Street
Salinas, CA 93907
Email: [email protected]
Fox Rothschild LLP
BNY Mellon Center
500 Grant Street, Suite 2500
Pittsburgh, PA 15219
Attn: Michael H. Syme, Esq.

Email: [email protected]
The notice shall be deemed given three (3) business days after the date of mailing, or, if personally delivered, when received.

17. Construction. This Declaration shall be construed according to its fair meaning as if prepared by all parties to this Declaration. Headings used in this Declaration are provided for convenience only and shall not be used to construe meaning or intent. When used in this Declaration, the terms “must” and “shall” denote a mandatory contractual obligation and are not permissive.

18. Qualification; Authority.

18.1 Owner. Each individual executing this Declaration on behalf of Owner represents, warrants and covenants to City and the Alliance that, to the best of his/her knowledge: (i) Owner is a validly formed joint powers authority organized under the laws of the State of California which has authority to execute and deliver this Declaration and to perform any obligations under its terms, (ii) such person is duly authorized to execute and deliver this Declaration on behalf of Owner in accordance with authority granted under the organizational documents of such entity or by its governing body, and (iii) such entity is bound under the terms of this Declaration.

18.2 City. Each individual executing this Declaration on behalf of City represents, warrants and covenants to Owner and the Alliance that, to the best of his/her knowledge: (i) City is a validly formed municipal corporation in the State of California which has authority

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to execute and deliver this Declaration and to perform its obligations under its terms; (ii) such person is duly authorized to execute and deliver this Declaration on behalf of City in accordance with authority granted under the City resolution which approved this Declaration; and (iii) City is bound under the terms of this Declaration.

19. Severability. Every provision of this Declaration is intended to be severable. If any provision of this Declaration is held invalid, illegal, or unenforceable by a court of competent jurisdiction, the validity, legality, and enforceability of the remaining provisions shall not be affected or impaired.

20. Governing Law. This Declaration shall be governed by and interpreted under the laws of the State of California.

21. No Waiver. The failure of any party to enforce any term, covenant, or condition of this Declaration on the date it is to be performed shall not be construed as a waiver of that party’s right to enforce the same, or any other, term, covenant, or condition of this Declaration at any later date or as a waiver of any term, covenant, or condition of this Declaration. By its execution of this Declaration, City does not waive any breach or default by Owner under any other agreements to which City and Owner are parties.

22. Recordation of Declaration; Effective Date. Immediately upon execution of this Declaration, it shall be recorded in the Official Records of Monterey County. After recordation, City shall provide a conformed copy of the recorded Declaration to Owner and the Alliance. This Declaration shall be recorded, and shall remain, as a lien and encumbrance against the Property in second (2nd) position senior to all deeds of trusts, mortgages, declarations, covenants, or liens of record on the Property except for the Declaration of Restrictive Covenants concurrently executed between Owner and City, to which the Department of Housing and Community Development is a third-party beneficiary.

23. Alliance as Third-Party Beneficiary. Explicit references made to the Alliance throughout this Declaration shall not be construed or interpreted to in any way limit the rights and remedies of the Alliance, as a third-party beneficiary of this Declaration. The Alliance, as a third-party beneficiary of this Declaration, has the right, but not the obligation, to enforce any part of the Declaration.

24. Reporting Requirements.

24.1 Commencing with the Effective Date and annually thereafter for not less than ten (10) years following the full occupancy of the Development, Owner shall submit a signed written attestation (the “Annual Report”) to the Alliance. The Annual Report may be in any format and shall contain, at minimum, all of the following:

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(a) An attestation by Owner that Owner has continued to restrict occupancy for at least 80% of the Units to the Target Population in accordance with the Affordability and Occupancy Covenants set forth in Section 3.
(b) A summary of Owner’s current prioritization system for tenant selection. If Owner has changed its prioritization process since the previous Annual Report for any reason, Owner shall additionally provide a narrative description of how such prioritization process complies with the Occupancy Requirements described in Section 3.1.

24.2 Upon the Alliance’s request and as specified, Owner shall provide supplemental progress reports in connection with the development plan and any updates to the timeline for completion of the Development.

24.3 Owner shall submit to the Alliance such periodic reports, updates, and information as deemed necessary by the Alliance to monitor compliance and perform Program evaluation. Any requested data or information shall be submitted in electronic format on a form provided by the Alliance.

24.4 City shall use reasonable efforts, documented in writing, to ensure that Owner complies with the foregoing requirements.

25. Homeless Management Information System and Homeless Data Integration System. Owner shall support continuum of care participation in the statewide Homeless Data Integration System and disclose relevant data to the local Homeless Management Information System and other comparable data collection systems. All data shall be collected and disclosed in accordance with all federal and state privacy law. City shall use reasonable efforts, documented in writing, to ensure that Owner complies with the foregoing requirements.

26. Counterparts. This Declaration may be signed by the Parties and signatories hereto in identical counterparts with the same effect as if the signatures to each counterpart were upon a single instrument. All counterparts shall be deemed an original of this Declaration.

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EXHIBIT “A” OF DECLARATION OF RESTRICTIVE COVENANTS

LEGAL DESCRIPTION OF THE PROPERTY
That certain real property in City of King, County of Monterey, State of California legally described as follows:

APN/Parcel ID(s): 026-401-020
01222.0001/1050375.1
Letter of Agreement: Alliance Housing Fund Page 62 of 77 EXHIBIT 5

MEDI-CAL INCOME ELIGIBILITY PREFERENCE/COORDINATED ENTRY

KING CITY HOME KEY PROJECT
Partner agrees to restrict occupancy for at least 80% of the Project’s total units to individuals who meet the then-current Medi-Cal eligibility income requirements (“Medi-Cal Income Eligible”).

Once the Project units are fully occupied, Partner will give preference to Medi-Cal Income Eligible participants upon vacancy of a Project unit. Partner shall retain discretion to change the specific units reserved for Medi-Cal Income Eligible participants so long as the number of units occupied by Medi-Cal Income Eligible participants remains at 80% or more during the term of this Agreement assuming there are sufficient Medi-Cal Income Eligible participants to occupy 80% of the units.

To ensure that Medi-Cal Income Eligible participants are offered occupancy in any vacant unit at the site prior to an offer of occupancy being made to participants who exceed the Medi-Cal Income Eligibility guidelines at the time of program eligibility, Partner will adhere to the terms set forth in the Declaration of Restrictive Covenants between Partner and the City of King and follow prioritization process set forth below.

To expedite the housing process, the Monterey County Continuum of Care (CoC) will be notified by Partner through the Project facility’s management of the anticipated vacancy dates of any units before the unit is vacated. The CoC will have 30 days from the date of vacancy to provide referrals for occupancy. This will provide a window of 45-60 days for occupancy.

Step 1: All participants will be referred from the Coalition of Homeless Service Providers utilizing the Coordinated Assessment and Referral System, referred to as CARS. CARS serves all families and individuals who are homeless or at-risk of homelessness as defined under the federal HEARTH Act and its implementing regulations. These participants will be monitored/referred to through the HMIS system.

Step 1a: The potential residents are screened by the CoC and are rated using the Vulnerability Index. This is built into the “Homeless Management Information System” referred to as the HMIS system.

Step 1b: After the CoC has completed its assessment as outlined in the “Coordinated Assessment and Referral System Policies and Procedures Manual” they will refer several participants to the program based on the number of vacant units. For example, if one unit is vacant, they may refer 20 participants to the Partner. 01222.0001/1050375.1
Letter of Agreement: Alliance Housing Fund Page 63 of 77 Step 2: Partner receives the referrals through the HMIS system. Because Partner will implement a preference for “Medi-Cal Income Eligibility” the list of referrals will immediately be sorted to ensure that any participants that meet that criterion is placed at the top of the waiting list.5 Step 2a: Contact all referrals beginning with Medi-Cal Income Eligible households to begin the screening process. Coordinate with participant caseworkers and CoC to assist with document collection for eligibility determination.

Step 2b: Offer vacant unit to a Medi-Cal Income eligible participant and update CoC.

The implementation of the steps below will not remove the previously-referred Medi-Cal Income Eligible persons from future occupancy. Any Medi-Cal Income Eligible person who is referred through the HMIS but not selected for a particular unit will continue to remain on the list of referred individuals for the next available unit, so long as they do not fail to be eligible for a particular unit due to meeting any of the below ineligibility criteria, as may be reasonably updated by Partner from time to time (collectively, “Disqualifying Circumstances”):

1. Any household in which any member was evicted in the last three years from federally assisted housing for drug-related criminal activity.

2. A household in which any member is currently engaged in illegal use of drugs or for which the owner/agent has reasonable cause to believe that a member’s illegal use or pattern of illegal use of a drug may interfere with the health, safety, and right to peaceful enjoyment of the property by other residents.

3. Any household member if there is reasonable cause to believe that member’s behavior, from abuse or pattern of abuse of alcohol, may interfere with the health, safety, and right to peaceful enjoyment by other residents. The screening standards are based on behavior, not the condition of alcoholism or alcohol abuse.

4. Any household member who is subject to any state lifetime sex offender registration requirement (household member may be removed).

5. Criminal activities resulting in felony conviction involving violence, potential violence, destruction of property, human trafficking, terrorist activities, weapons charges or the illegal distribution or manufacture of a controlled substance including marijuana as defined in the Quality Work & Housing Responsibility Act (QWHRA). Applicants with this type of criminal history will be automatically denied. Partner will meet with the applicant and will consider extenuating circumstances if the conviction or exit from incarceration (whichever is later) occurred no less than fifteen (15) years before the date of application.

6. Criminal activities resulting in other felony convictions if the conviction or exit from incarceration occurred no less than ten (10) years before the date of application. 5 Step 2 Reference Point- 24 CFR § 960.206(a)(1); Notice PIH 2012-34: The PHA may establish a local preference for admission. The preference will be board approved and must be enforced to remain in compliance with HUD Rules and Regulations. All selections must have a clear audit trail. 01222.0001/1050375.1
Letter of Agreement: Alliance Housing Fund Page 64 of 77

7. A record of three or more separate instances where the applicant is involved in criminal activities resulting in felony conviction.

8. Criminal activities resulting in misdemeanor convictions involving violence, potential violence, destruction of property, human trafficking, terrorist activities, weapons charges or the illegal distribution or manufacture of a controlled substance within five (5) years of conviction or exit from incarceration, whichever is later.

9. Criminal activities resulting in other misdemeanor convictions within three (3) years of conviction or exit from incarceration, whichever is later.

10. A record of three (3) or more separate instances where the applicant is involved in criminal activities resulting in misdemeanor convictions where the last conviction or exit from incarceration is within five (5) years.

11. Sex Offender Registration: Applicant is currently subject to registration under a state sex offender registration program. If the owner/agent determines that a registered sex offender is part of the household, the owner/agent will allow the household to remove the sex offender from the application. Removal must be documented using a signed, notarized copy of the owner’s form. The household will have ten (10) business days to provide verification that the household member has alternative housing or that the household member has applied for alternative housing. Failure to provide such documentation will result in rejection of the application for all household members. In this case, the owner/agent reserves the right to monitor household composition after move-in. If the owner/agent discovers that a sex offender has moved in to the unit, assistance will be terminated and the household will be evicted in accordance with HUD requirements. Any assistance paid-in-error must be returned to HUD.

Persons who do not have documentation that they are a United States Citizen or Naturalized U.S.

Citizen may not receive any benefits from any federal resources that Partner provides, such as a project based voucher (PBV). So, while an individual who is not a US Citizen may be denied the ability to reside in a unit that is funded by PBV they may still be eligible to reside on site as long as there is a unit available that is not supported by PBV funding.

The following steps 3 through 5 are contingency protocol if steps 1 through 2 are not successful.

Step 3: If all referred participants from CARS that were Medi-Cal Income Eligible have been exhausted and did not receive an offer of occupancy for the current available unit for any reason that is a Disqualifying Circumstance, then Partner may screen the remaining referrals from the CoC that are not Medi-Cal Income Eligible.

Step 3a: The Partner will create a physical and electronic file detailing the efforts to house the Medi-Cal Income Eligible households with supporting documentation for recordkeeping purposes. This information will be provided for all audits, compliance reviews, and as supporting documentation for annual reporting required by Alliance. 01222.0001/1050375.1
Letter of Agreement: Alliance Housing Fund Page 65 of 77 Step 4: If all referred participants from CARS were not offered housing. The Partner may seek participants from our Homeless Set Aside Voucher Program (HSVP). These are participants that were previously referred to the Partner through CARS or other agencies and have been certified as “Homeless” for other housing opportunities. These participants would also be ranked by the Medi-Cal Income Eligibility preference before screening.

Step 4a: When the Medi-Cal Income Eligible participants from the selected pool are exhausted, the Partner may screen participants that exceed this income eligibility threshold.

Step 5: If all referred CARS participants and selected HSVP participants are not offered housing due to ineligibility or non-compliance the current available unit may be offered to participants that exceed the Medi-Cal Income Eligibility Threshold, provided that such individuals do not exceed 50% of the HUD AMI for the applicable area.
01222.0001/1050375.1
Letter of Agreement: Alliance Housing Fund Page 66 of 77 EXHIBIT 6

ANNUAL ATTESTATION TEMPLATE FOR

CENTRAL CALIFORNIA ALLIANCE FOR HEALTH HOUSING FUND
This Annual Attestation applies to Partner’s receipt of Housing Fund Award funds under the Letter of Agreement with the Santa Cruz-Monterey-Merced-San Benito-Mariposa Managed Medical Care Commission, operating as Central California Alliance for Health.

Project: King City, Days Inn, Permanent Supportive Housing project located at 1130 Broadway Street, in City of King, County of Monterey, State of California (“Project”)
Letter of Agreement
Effective Date:
[insert], 2025
Partner Name: [insert]
Minimum Medi-Cal
Eligible Individuals
Preference Threshold
Requirement:

Partner must restrict occupancy for at least 80% of the Project’s total units to individuals who meet the Medi-Cal income eligibility limits (“Minimum Medi-Cal Occupancy”).

Requirement
Type
Description of Requirement Partner Response
Minimum Medi-Cal
Occupancy
Partner must restrict occupancy
for at least the Minimum Medi-Cal
Occupancy levels specified above.

Please confirm Partner has
maintained Minimum Medi-Cal
Occupancy. If Partner failed to
meet Minimum Medi-Cal
Occupancy levels, please provide
good faith estimate of occupancy
by Medi-Cal eligible individuals
during the reporting year and
narrative explanation of Partner’s
failure to meet requirement.
• If Project was for
Permanent Supportive
Housing, minimum
 Yes.
 No.

If “No,” Explain:
01222.0001/1050375.1
Letter of Agreement: Alliance Housing Fund Page 67 of 77 threshold is based on
number of units in service
occupied by Medi-Cal
eligible individuals during
the reporting year.
• If Project was for
Recuperative Care or
Short-Term PostHospitalization Housing,
minimum threshold is
based on number of stays
by Medi-Cal eligible
individuals out of total
stays.

Prioritization
Process
Current prioritization process.

Please confirm use of approved
prioritization process. If Partner is
currently using a prioritization
process other than the process
approved by the Alliance, please
provide narrative description of
current process and how process
complies with Medi-Cal eligibility
income requirements in alignment
with the Letter of Agreement.
 Yes
 No.

If “No,” Explain:

By signing the below, Partner attests that the information above is true and correct, that Partner has continued to act in compliance with the Letter of Agreement, and that the Project facilities have continued to operate in alignment with the Letter of Agreement. In addition, Partner will provide all information reasonably requested by the Alliance to validate the above information or support any response to any government audits or inquiries related to the Letter of Agreement.

By:

Print Name:

Title:

Date Signed:
01222.0001/1050375.1
Letter of Agreement: Alliance Housing Fund Page 68 of 77 EXHIBIT 76

NOVATION AND AMENDMENT AGREEMENT FOR

ALLIANCE HOUSING FUND LETTER OF AGREEMENT
This Novation and Amendment Agreement, dated as of the last signature date below, is entered into by and among the City of King (“Assignor”), the Housing Authority of Monterey County (“Assignee”), and the Santa Cruz-Monterey-Merced-San Benito-Mariposa Managed Medical Care Commission, operating as Central California Alliance for Health (“Non-Assigning Party”).

1. Assigned Contract: Assignor and Non-Assigning Party are parties to that certain Letter of Agreement for the Alliance Housing Fund dated _____, 2025 (“Assigned Contract”).

2. Novation: The parties hereto agree that with respect to the Assigned Contract, Assignee shall be substituted for Assignor. As such, Assignee shall acquire all of the rights and obligations of Assignor as set forth therein as of the Effective Date.

3. Consideration: The transfer of rights and delegation of duties as set forth above shall serve as each party's respective consideration to the other party.

4. Release: Despite anything set forth to the contrary in the Assigned Contract, and subject to the terms hereof and the terms of the Assignment and Assumption Agreement, Assignee fully releases and forever discharges Assignor, along with Assignor's employees, agents, officers, directors, shareholders, affiliates, and representatives (collectively, the "Released Parties") from (i) Assignor's performance obligations as set forth in the Assigned Contract accruing on or after the Effective Date; and (ii) all claims, threatened claims, suits, debts, expenses, costs, deficiencies, damages, or demands that the Non-Assigning Party may have against any of the Released Parties to the extent arising out of the non-fulfillment of performance obligations set forth in the Assigned Contract on or after the Effective Date. However, this release shall not affect any rights or remedies that Assignor or Assignee may have against the other for obligations or liabilities that arose prior to the Effective Date. Without limitation on the foregoing, this release shall in no way affect the obligations required to be performed under the Assigned Contract before the Effective Date.

5. Consent and Acknowledgement by Non-Assigning Party: The Non-Assigning Party consents to Assignee’s transfer of all of Assignor’s rights and duties under the Assigned Contract to Assignee and acknowledges and agrees that Assignee is Assignor's successor-in-interest in and to the Assigned Contract. Assignee and Non-Assigning Party shall be fully bound by the terms of the Assigned Contract as if the Assignee were named as a party thereto.

6. Amendment. The Assigned Contract is hereby amended as follows:

A. The following sentence is added after the current last sentence in Section 1: “For purposes of this Agreement, “Medi-Cal eligible individuals” or “Medi-Cal eligible residents” shall mean individuals with incomes that meet the then-current Medi-Cal eligibility income limits, regardless of whether such individuals meet any other Medi-Cal eligibility requirements unrelated to income.”
6 Signature lines intentionally omitted from Exhibit 7 for brevity 01222.0001/1050375.1
Letter of Agreement: Alliance Housing Fund Page 69 of 77 B. The following paragraph is added after Section 1, as amended above:
“Combined Recoupment. The parties acknowledge that the Alliance is concurrently executing a Letter of Agreement with the Housing Authority of Monterey County (“HACM LOA”) in connection with HACM’s Project activities following Partner’s transfer of ownership of the Project’s real property to Partner. Under the HACM LOA, the Alliance will separately provide HACM with Alliance Housing Fund funds to renovate and operate the Project site property as set described in the Implementation Phases of the SOW in the amount of $2,178,680.21 (“Implementation Funds”). Upon transfer of the Project site property from Partner to HACM, the Alliance, Partner, and HACM shall immediately novate the Agreement to HACM under the Novation Agreement referenced in Section A of the SOW. Partner acknowledges that the Alliance is entering into the HACM LOA and paying the Implementation Funds to HACM for Partner’s benefit and at Partner’s request.

Partner agrees that Partner shall be further responsible for the Implementation Funds as the owner of such real property. To the extent that any recoupment, recapture, or repayment provisions apply to any default by Partner under this Agreement (including, without limitation, Partner’s Useful Life obligations), Partner agrees that such recoupment shall apply to the combined sum of the Implementation Funds set forth in the HACM LOA and the Award received by Partner under this Agreement (“Combined Award”), and any reference to the term “Award” or “Combined Award” in connection with the recoupment rights set forth in the HACM LOA or in this Agreement shall be deemed to refer to the Combined Award amount of $5,178,680.21 (= $2,178,680.21 Implementation Funds + $3,000,000.00 Award). For the avoidance of doubt, the Alliance’s recoupment rights set forth in the HACM LOA and this Agreement shall be non-duplicative.” C. The reference in Section 7 to Alliance’s right to “withhold any payment pending any questions that it may have regarding the use of funds” is hereby amended to be exercised by Alliance in its reasonable, rather than sole, discretion.

D. The reference in Section 8 to Alliance’s right to “ten (10) calendar days” is hereby amended to be “ten (10) business days”.

E. The following sentence is hereby added after the current last sentence in Section 11:
“Alliance shall provide Partner with at least 24 hours prior written notice of such visit and shall use its reasonable efforts not to disrupt Project activities.” F. Section 18(a) is hereby amended, superseded and replaced with the following: “a. This Agreement shall be effective on the Effective Date and shall automatically expire thirtynine (39) months after the Effective Date unless extended or earlier terminated by the parties as permitted herein (“Funding Term”). This Funding Term accounts for the activity period to perform the Project activities and an additional three months for reporting and payment after completion of all Project Milestones as set forth in the SOW.

Notwithstanding anything contained in this Agreement to the contrary, the effectiveness of this Agreement, and Partner’s obligations and liabilities under this Agreement are conditioned upon continuing availability of the Award. In the event that the Award ceases to be available through no fault of Partner, this Agreement shall automatically be deemed void and of no further force or effect, and Partner shall have no further obligations or liability under this Agreement, provided that Partner shall continue to use the Property for purposes consistent with public health and affordable housing.” 01222.0001/1050375.1
Letter of Agreement: Alliance Housing Fund Page 70 of 77 G. Section 18(b) is hereby amended, superseded and replaced with the following: “b. The Alliance may terminate this Agreement for cause at any time upon written notice to Partner.

Cause includes but is not limited to the following: (i) Partner fails to comply with the terms of this Agreement, including any failure to timely complete the Milestones or failure to satisfy the conditions precedent to disbursement of Award funds; (ii) Partner is unable to complete the Project as set forth in the SOW; (iii) Partner ceases its plans to utilize or discontinues its utilization of the facility to serve Medi-Cal eligible recipients prior to reaching assigned capacity, or otherwise materially curtails operations necessary for completion of the Project; (iv) the Alliance determines that any material fact or representation made or furnished to the Alliance by Partner in connection with its application or Letter of Intent was untrue or misleading at the time that such fact or representation was made known to the Alliance, or subsequently becomes untrue or misleading; or (v) the Alliance discovers that Partner has concealed any material fact from the Alliance related to the Letter of Intent, this Agreement, or the Project.” H. Section 18(c) is hereby amended, superseded and replaced with the following: “c. The Alliance may terminate this Agreement or cease providing payments hereunder in the event that the Alliance determines, in its reasonable discretion: (i) that further payments as set forth in this Agreement would violate laws or regulations, including laws or regulations in existence on the Effective Date that may have been clarified or subject to new or changed interpretation, or (ii) in the event of a natural disaster or other event that causes the Alliance to be unable to fulfill its commitment hereunder.”
I. Section 20(a) is hereby amended, superseded and replaced with the following: “a. In the event that Partner is unable to provide documentation evidencing that Partner utilized Award funds for the sole purpose of completing the Project in accordance with the SOW, Partner shall return such portions of the Award funds to the Alliance for which Partner is unable to provide supporting documentation within sixty (60) business days of the Alliance’s request.”
J. A new Section 20(d) is hereby added as follows: “d. Right to Cure. In the event Alliance believes Partner has breached any term of this Agreement relating to any Deliverable requirement under Section C of the SOW (PROJECT MILESTONES), prior to taking any action pursuant to Sections 17, 18, 19 or 20, Alliance shall provide Partner with thirty (30) days written notice of such failure or breach to cure the same. The Alliance may extend the time to cure at its sole discretion.”
K. Section 21(d) is hereby amended, superseded and replaced with the following:

Useful Life. Partner represents that the completed Project facility will serve Medi-Cal eligible individuals as set forth in this Agreement, including meeting the Minimum MediCal Occupancy requirements defined in the SOW, for a period of not less than ten (10) years from the Implementation Phase Three Completion Date (“Useful Life”).

Following completion, if the facility ceases to service Medi-Cal eligible individuals in accordance with this Agreement prior to the end of the Useful Life, Partner shall provide the Alliance with at least ninety (90) days advance notice prior to the date upon which the facility ceases to service Medi-Cal eligible individuals. In the event that the Partner ceases using the completed facility to serve Medi-Cal eligible individuals as required under this Agreement or reduces the availability of units for Medi-Cal eligible individuals below the 01222.0001/1050375.1
Letter of Agreement: Alliance Housing Fund Page 71 of 77 required Minimum Medi-Cal Occupancy, Partner shall pay to the Alliance a prorated portion of the Combined Award based on the number of units in compliance with the Minimum Medi-Cal Occupancy, as further set forth in the SOW. The amount of the Combined Award that shall be subject to repayment by Partner to the Alliance shall be capped at the following amounts (“Maximum Recapture”):
i. Less than Three Years. If Partner maintains the Minimum Medi-Cal Occupancy standard for less than three years after receipt of the final payment, Partner shall pay the Alliance an amount up to 80% of the Combined Award amount.
ii. Less than Five Years. If Partner maintains the Minimum Medi-Cal Occupancy standard for three or more but less than five years after receipt of the final payment, Partner shall pay the Alliance an amount up to 50% of the Combined Award amount.
iii. Less than Seven Years. If Partner maintains the Minimum Medi-Cal Occupancy standard for five or more but less than seven years after receipt of the final payment, Partner shall pay the Alliance an amount up to 20% of the Combined Award amount.
iv. Less than Ten Years. Partner maintains the Minimum Medi-Cal Occupancy standard for seven or more but less than ten years after receipt of the final payment, Partner shall pay the Alliance an amount up to 10% of the Combined Award amount.
v. Waiver of Repayment Obligation. In the event that Partner fails to maintain the Minimum Medi-Cal Occupancy standard or fails to continue using the facility for the benefit of Medi-Cal eligible individuals during the Funding Term, the Alliance may waive all or some of Partner’s repayment obligation if the Alliance determines, in its sole discretion, that such failure is attributable to circumstances that are beyond Partner’s control. vi. Serving Medi-Cal Eligible Individuals at a Different Facility. The Alliance may waive Partner’s repayment obligation if Partner ceases to occupy the facility but continues to make the same number of Minimum Medi-Cal Occupancy units available to Medi-Cal eligible individuals without interruption at a different facility that has at least the capacity as the facility for which Partner has received an Award hereunder, and that is within the service area of the Alliance (i.e., the Counties of Mariposa, Merced, Monterey, San Benito, and Santa Cruz).
vii. Operation of Facility by Third Party. If Partner sells the facility or leases or subleases the facility to a third party or enters into any transaction through which Partner no longer owns or leases or has responsibility for and control of the operation of the facility as contemplated herein, Partner shall pay to the Alliance the applicable prorated amounts set forth in this Section 22 unless such third party agrees in writing to, and is deemed by the Alliance, in its sole discretion, to be qualified to continue serving Medi-Cal eligible individuals at Minimum Medi-Cal Occupancy levels under the same terms 01222.0001/1050375.1
Letter of Agreement: Alliance Housing Fund Page 72 of 77 and conditions that Partner has agreed to as set forth herein. Partner shall provide the Alliance with at least ninety (90) days advance notice of a transaction described herein.

L. The following paragraph is hereby added the current last sentence of Section 26:
“Notwithstanding the foregoing, Alliance acknowledges and agrees that any obligation of Partner to hold harmless, defend, or indemnify herein shall be payable by Partner only out of Non-Federal Funds. For purposes of this Agreement, the term "Non-Federal Funds" means assets and funds that are not restricted by law or contract for use in governmentsponsored programs (including without limitation any funds received or held by Partner with respect to Partner’s public housing portfolio). Without limiting the foregoing, there shall be no recourse against (i) any public housing project of Partner; (ii) any operating receipts of Partner (as the terms "public housing project" and "operating receipts" are defined in the Annual Contributions Contract between Partner and the U.S. Department of Housing and Urban Development, as amended (the "ACC"), or in any amendments thereto); or (iii) any public housing operating reserves of Partner reflected in Partner’s annual operating budget required under the ACC. Partner’s obligations hereunder are limited to eligible non-public housing assets (e.g., Section 8 administrative fee reserves or other assets not subject to any Declaration of Trust and not acquired or merged with assets acquired with public housing funds under the United States Housing Act of 1937, as amended).”
M. The portion of Section C of Exhibit 1 (Statement of Work) entitled, “IMPLEMENTATION PHASES” is hereby amended, superseded and replaced with the following:

IMPLEMENTATION PHASES

4. Implementation Phase One
a. Implementation Phase One Milestones:
i. Demonstrate proof of Project site ownership.
ii. Obtain design plans.
iii. Complete construction budget and submit Project Plan b. Implementation Phase One Completion Date: Within fifteen (15) business days of Acquisition Phase Two Completion Date.
c. Deliverables: Documentation of Implementation Phase One Milestones completion, including submission of proposed Project Plan and documentation of any applicable Payment Preconditions listed in Section A of this SOW. d. Deliverable Due Date: Within fifteen (15) business days of Effective Date. e. Payment Percentage: 0% of Maximum Award

5. Implementation Phase Two
a. Implementation Phase Two Milestones:
i. Obtain general contractor bids.
ii. Sign general contractor contract.
iii. Begin Renovations
• Construction Start Date. In order to maintain eligibility for the interim payments provided for in this SOW, Partner must begin 01222.0001/1050375.1
Letter of Agreement: Alliance Housing Fund Page 73 of 77 renovation of the Project within twelve (12) months of the Effective Date (“Construction Start Date”).
b. Implementation Phase Two Completion Date: January 31, 2026 c. Deliverables: Detailed documentation of Implementation Phase Two Milestones completion, including timely submission of reports.
d. Deliverable Due Date: January 31, 2026.
e. Payment Percentage: 0% of Maximum Award

6. Implementation Phase Three
a. Implementation Phase Three Milestones:
i. Establish Prioritization Process for Medi-Cal Eligible Individuals.

By March 31, 2026, Partner will establish with the Alliance a process for prioritizing Medi-Cal eligible individuals for placement. All prioritization systems must be at all times in strict accordance with all applicable federal, state, and local laws, including the U.S. Department of Housing and Urban Development’s Fair Housing Act.7 Partner shall develop Project prioritization systems as follows:
• Permanent Supportive Housing. If all or a portion of the Project is for permanent supportive housing, the following shall apply to such permanent supportive housing units:
a. Unless otherwise preapproved by the Alliance, Partner will develop referral protocols which prioritize placement of Medi-Cal eligible individuals through the local Coordinated Entry System (“CES”). If Partner wishes to utilize a
prioritization system other than CES, Partner may submit a request to utilize a comparable system to the Alliance at least 30 days prior to implementation date. Any request to utilize a prioritization system other than CES must be delivered in writing by Partner and include a detailed narrative
description of the prioritization system, justification for utilizing the non-CES system, and an attestation that the placement prioritization process complies with the terms of this Agreement and Medi-Cal eligibility income
requirements.
b. Should Partner include a request to utilize a non-CES system in Partner’s Implementation Phase 1 Milestone Project Plan deliverable, such non-CES system shall be considered
approved under this Agreement upon the Alliance’s
approval of the Project Plan
c. Should requirements from other funding sources or other external constraints prevent Partner from using CES, Partner shall provide documentation to the Alliance evidencing such terms and conditions.
7 Housing Discrimination Under the Fair Housing Act | HUD.gov / U.S. Department of Housing and Urban Development (HUD)
01222.0001/1050375.1
Letter of Agreement: Alliance Housing Fund Page 74 of 77 d. Should Partner already have a prioritization system
comparable to CES in place that Partner wishes to continue utilizing as of the SOW Section C(3)(a)(i) due date above, then Partner shall adopt the following protocol unless
otherwise agreed upon by the Alliance:
i. If Partner’s prioritization list already contains a
queue, Partner will: validate listed individuals’
Medi-Cal eligibility using income guidelines and
submit validated prioritization list to the Alliance for approval.
ii. Once Partner’s prioritization list is exhausted,
Partner will: identify other Medi-Cal eligible
individuals through the Partner’s alternative system,
validate such individuals’ Medi-Cal eligibility using
income guidelines, and submit the validated
prioritization list to the Alliance for approval.
iii. Once Partner’s prioritization list is exhausted, if Partner is not able to identify any additional MediCal eligible individuals through the alternative system, Partner will: utilize CES, validate such
individuals’ Medi-Cal eligibility using income
guidelines, and submit validated prioritization list to the Alliance for approval.
• Non-Permanent Supportive Housing. If all or a portion of the Project is for uses other than permanent supportive housing (e.g., recuperative care and short-term post hospitalization housing), the following shall apply to such non-permanent supportive housing units:
a. Partner shall submit a proposed process of prioritization to the Alliance at least 30 days prior to implementing such process under this Agreement. Such proposal must be
delivered in writing by Partner and include a detailed
narrative description of the prioritization process, how such system will prioritize placement of Medi-Cal eligible
individuals to meet Minimum Medi-Cal Occupancy
requirements, and an attestation that the placement
prioritization process complies with the terms of this
Agreement and Medi-Cal eligibility income requirements. b. Should Partner include a proposed process of prioritization in Partner’s Implementation Phase 1 Milestone Project Plan deliverable, such system shall be considered approved under this Agreement upon the Alliance’s approval of the Project Plan
ii. Complete Renovations.
01222.0001/1050375.1
Letter of Agreement: Alliance Housing Fund Page 75 of 77 • By July 31, 2027, Partner will complete the renovation of the Days Inn at 1130 Broadway Street, King City, CA, for the purpose of transitioning to permanent supportive housing.
iii. Obtain Certificate of Occupancy.
• By August 30, 2027, all permanent supportive housing units will be fully occupied in compliance with the Minimum Medi-Cal
Occupancy requirement, with at least 80% of all residents comprised of individuals with incomes that meet the then-current Medi-Cal eligibility income limits. .
iv. Establish Service Availability and Best Efforts Prioritization Outcomes. • By August 30, 2027, Partner will ensure that on-site case management services are available/provided and individual services plans are developed for all residents eligible to receive Medi-Cal case management services.
• By August 30, 2027, Partner shall use best efforts to retain residency for Medi-Cal income eligible individuals originally housed in Project.
b. Implementation Phase Three Completion Date: August 30, 2027. c. Deliverables: Detailed documentation of Implementation Phase Three Milestones completion, including timely submission of reports and, as applicable, validated prioritization lists.
d. Deliverable Due Date: August 30, 2027.
e. Payment Percentage: 0% of Maximum Award

7. Post Completion; Useful Life.
a. Useful Life Implementation. At all times during the Useful Life (i.e., 10 years following Implementation Phase Three Completion Date), Partner shall place Medi-Cal income eligible residents as set forth in this Agreement consistent with Medi-Cal eligibility income requirements and the approved prioritization process.

For this purpose, Partner agrees to provide the Alliance with an annual report which attests that Partner has maintained the Minimum Medi-Cal Occupancy requirement as set forth in this Agreement and SOW and has continued to comply with the terms of this Agreement. Partner agrees to submit a complete and accurate report to the Alliance by March 31st of each calendar year for the Useful Life of the Project, (i.e., 10 years following Implementation Phase Three Completion Date). The report shall be consistent with the format outlined in the Annual Attestation Template attached as Exhibit 6 to this Agreement. Partner also agrees to timely provide all information reasonably requested by the Alliance to validate Partner’s Annual Attestation responses. This Section shall survive termination of the Agreement. b. Partner’s failure to meet the Minimum Medi-Cal Occupancy for one or more of the following reasons shall not be considered a violation of this Agreement, provided that Partner continues to be in compliance with all other terms of this Agreement and Partner gives Medi-Cal eligible individuals first priority for all next available units until the Minimum Medi-Cal Occupancy is reached:
i. A Medi-Cal income eligible individual ceases to meet the Medi-Cal income eligibility requirements after placement due to an increase in such 01222.0001/1050375.1
Letter of Agreement: Alliance Housing Fund Page 76 of 77 individual’s income or a decrease in the Medi-Cal eligibility income limits, and such change in status causes Medi-Cal eligible Occupancy to fall below the Minimum Medi-Cal Occupancy;
ii. Partner is unable to identify a Medi-Cal eligible individual qualified for placement in a vacated unit despite Partner’s best efforts for at least thirty (30) days, and Partner fills such unit in conformance with the terms of the Declaration of Restrictive Covenants attached to this Agreement as Exhibit 4 and using the process described in the Medi-Cal Income Eligibility Preference/Coordinated Entry document attached to this Agreement as Exhibit 5.
c. Proportionate Recapture Right. For purposes of this Agreement, i. “Maximum Recapture” shall mean the maximum amount of the Combined Award subject to repayment by Partner if Partner fails to meet the Minimum Medi-Cal Occupancy during the Useful Life. The Alliance’s recapture right shall be capped at the Maximum Recapture amounts, which shall be based on the number of years the Project continues to meet the Minimum MediCal Occupancy, as further described in Section 22(d) of the Agreement. ii. Proportionate Unit Compliance. If Partner fails to maintain the Minimum Medi-Cal Occupancy standard during the Useful Life, Partner shall pay the Alliance a portion of the applicable Maximum Recapture amount based on the number of units that are not in compliance with the Minimum Medi-Cal Occupancy requirement. This amount shall be a percentage which amount is equal to a fraction, the denominator of which is the Maximum Recapture amount, and the numerator of which is the total number of Project units that do not comply with the Minimum Medi-Cal Occupancy requirement. For illustration purposes:
• Example 1: If Partner only fills 40% of the total units with Medi-Cal income eligible residents (50% of Minimum Medi-Cal Occupancy) during the first three-year period following Project completion, the amount of the Combined Award subject to recapture shall be calculated as follows:
a. Maximum Recapture: 80% of $5,178,680.21 Combined
Award = $4,142,944.17
b. Proportionate to noncompliant portion of units: 50% of $4,142,944.17 = $2,071,472.08 subject to recapture.
• Example 2: If Partner only fills 40% of the total units with Medi-Cal income eligible residents (50% of Minimum Medi-Cal Occupancy) during the period between three and five years after Project completion, the amount of the Award subject to recapture shall be calculated as follows:
a. Maximum Recapture: 50% of $5,178,680.21 Combined
Award = $2,589.340.10.
b. Proportionate to noncompliant portion of units: 50% of $2,589.340.10 = $1,294,670.05 subject to recapture.
01222.0001/1050375.1
Letter of Agreement: Alliance Housing Fund Page 77 of 77 • Example 3: If Partner only fills 75% of the total units with Medi-Cal income eligible residents (93.75% of Minimum Medi-Cal
Occupancy) during the period between five and seven years after Project completion, the amount of the Award subject to recapture shall be calculated as follows:
a. Maximum Recapture: 20% of $5,178,680.21 Combined
Award = $1,035,736.04.
b. Proportionate to noncompliant portion of units: 6.25% of $1,035,736.04 = $64,733.50 subject to recapture.
• Example 4: If Partner only fills 60% of the total units with Medi-Cal income eligible residents (75% of Minimum Medi-Cal Occupancy) during the period between seven and ten years after Project completion, the amount of the Award subject to recapture shall be calculated as follows:
a. Maximum Recapture: 10% of $5,178,680.21 Combined
Award = $517,868.02
b. Divided by noncompliant portion of units: 25% of
$517,868.02 = $129,467.01 subject to recapture.
d. Useful Life End Date:
e. Deliverables: Annual attestation.
f. Deliverable Due Date: March 31st of each calendar year during the Useful Life. 169283933.5

NOVATION AND AMENDMENT AGREEMENT FOR

1. Assigned Contract: Assignor and Non-Assigning Party are parties to that certain Letter of Agreement for the Alliance Housing Fund dated _____, 2025 (“Assigned Contract”).

3. Consideration: The transfer of rights and delegation of duties as set forth above shall serve as each party's respective consideration to the other party.

6. Amendment. The Assigned Contract is hereby amended as follows:

A. The following sentence is added after the current last sentence in Section 1: “For purposes of this Agreement, “Medi-Cal eligible individuals” or “Medi-Cal eligible residents” shall mean individuals with incomes that meet the then-current Medi-Cal eligibility income limits, regardless of whether such individuals meet any other Medi-Cal eligibility requirements unrelated to income.”
B. The following paragraph is added after Section 1, as amended above:
“Combined Recoupment. The parties acknowledge that the Alliance is concurrently executing a Letter of Agreement with the Housing Authority of Monterey County (“HACM LOA”) in connection with HACM’s Project activities following Partner’s transfer of 11(A) Exhibit 2
169283933.5
ownership of the Project’s real property to Partner. Under the HACM LOA, the Alliance will separately provide HACM with Alliance Housing Fund funds to renovate and operate the Project site property as set described in the Implementation Phases of the SOW in the amount of $2,178,680.21 (“Implementation Funds”). Upon transfer of the Project site property from Partner to HACM, the Alliance, Partner, and HACM shall immediately novate the Agreement to HACM under the Novation Agreement referenced in Section A of the SOW. Partner acknowledges that the Alliance is entering into the HACM LOA and paying the Implementation Funds to HACM for Partner’s benefit and at Partner’s request.

D. The reference in Section 8 to Alliance’s right to “ten (10) calendar days” is hereby amended to be “ten (10) business days”.

Notwithstanding anything contained in this Agreement to the contrary, the effectiveness of this Agreement, and Partner’s obligations and liabilities under this Agreement are conditioned upon continuing availability of the Award. In the event that the Award ceases to be available through no fault of Partner, this Agreement shall automatically be deemed void and of no further force or effect, and Partner shall have no further obligations or liability under this Agreement, provided that Partner shall continue to use the Property for purposes consistent with public health and affordable housing.” G. Section 18(b) is hereby amended, superseded and replaced with the following: “b. The Alliance may terminate this Agreement for cause at any time upon written notice to Partner.

Cause includes but is not limited to the following: (i) Partner fails to comply with the terms of this Agreement, including any failure to timely complete the Milestones or failure to 169283933.5
satisfy the conditions precedent to disbursement of Award funds; (ii) Partner is unable to complete the Project as set forth in the SOW; (iii) Partner ceases its plans to utilize or discontinues its utilization of the facility to serve Medi-Cal eligible recipients prior to reaching assigned capacity, or otherwise materially curtails operations necessary for completion of the Project; (iv) the Alliance determines that any material fact or representation made or furnished to the Alliance by Partner in connection with its application or Letter of Intent was untrue or misleading at the time that such fact or representation was made known to the Alliance, or subsequently becomes untrue or misleading; or (v) the Alliance discovers that Partner has concealed any material fact from the Alliance related to the Letter of Intent, this Agreement, or the Project.” H. Section 18(c) is hereby amended, superseded and replaced with the following: “c. The Alliance may terminate this Agreement or cease providing payments hereunder in the event that the Alliance determines, in its reasonable discretion: (i) that further payments as set forth in this Agreement would violate laws or regulations, including laws or regulations in existence on the Effective Date that may have been clarified or subject to new or changed interpretation, or (ii) in the event of a natural disaster or other event that causes the Alliance to be unable to fulfill its commitment hereunder.”
I. Section 20(a) is hereby amended, superseded and replaced with the following: “a. In the event that Partner is unable to provide documentation evidencing that Partner utilized Award funds for the sole purpose of completing the Project in accordance with the SOW, Partner shall return such portions of the Award funds to the Alliance for which Partner is unable to provide supporting documentation within sixty (60) business days of the Alliance’s request.”
J. A new Section 20(d) is hereby added as follows: “d. Right to Cure. In the event Alliance believes Partner has breached any term of this Agreement relating to any Deliverable requirement under Section C of the SOW (PROJECT MILESTONES), prior to taking any action pursuant to Sections 17, 18, 19 or 20, Alliance shall provide Partner with thirty (30) days written notice of such failure or breach to cure the same. The Alliance may extend the time to cure at its sole discretion.”
K. Section 21(d) is hereby amended, superseded and replaced with the following:

Following completion, if the facility ceases to service Medi-Cal eligible individuals in accordance with this Agreement prior to the end of the Useful Life, Partner shall provide the Alliance with at least ninety (90) days advance notice prior to the date upon which the facility ceases to service Medi-Cal eligible individuals. In the event that the Partner ceases using the completed facility to serve Medi-Cal eligible individuals as required under this Agreement or reduces the availability of units for Medi-Cal eligible individuals below the required Minimum Medi-Cal Occupancy, Partner shall pay to the Alliance a prorated portion of the Combined Award based on the number of units in compliance with the Minimum Medi-Cal Occupancy, as further set forth in the SOW. The amount of the 169283933.5
Combined Award that shall be subject to repayment by Partner to the Alliance shall be capped at the following amounts (“Maximum Recapture”):
i. Less than Three Years. If Partner maintains the Minimum Medi-Cal Occupancy standard for less than three years after receipt of the final payment, Partner shall pay the Alliance an amount up to 80% of the Combined Award amount.
ii. Less than Five Years. If Partner maintains the Minimum Medi-Cal Occupancy standard for three or more but less than five years after receipt of the final payment, Partner shall pay the Alliance an amount up to 50% of the Combined Award amount.
iii. Less than Seven Years. If Partner maintains the Minimum Medi-Cal Occupancy standard for five or more but less than seven years after receipt of the final payment, Partner shall pay the Alliance an amount up to 20% of the Combined Award amount.
iv. Less than Ten Years. Partner maintains the Minimum Medi-Cal Occupancy standard for seven or more but less than ten years after receipt of the final payment, Partner shall pay the Alliance an amount up to 10% of the Combined Award amount.
v. Waiver of Repayment Obligation. In the event that Partner fails to maintain the Minimum Medi-Cal Occupancy standard or fails to continue using the facility for the benefit of Medi-Cal eligible individuals during the Funding Term, the Alliance may waive all or some of Partner’s repayment obligation if the Alliance determines, in its sole discretion, that such failure is attributable to circumstances that are beyond Partner’s control. vi. Serving Medi-Cal Eligible Individuals at a Different Facility. The Alliance may waive Partner’s repayment obligation if Partner ceases to occupy the facility but continues to make the same number of Minimum Medi-Cal Occupancy units available to Medi-Cal eligible individuals without interruption at a different facility that has at least the capacity as the facility for which Partner has received an Award hereunder, and that is within the service area of the Alliance (i.e., the Counties of Mariposa, Merced, Monterey, San Benito, and Santa Cruz).
vii. Operation of Facility by Third Party. If Partner sells the facility or leases or subleases the facility to a third party or enters into any transaction through which Partner no longer owns or leases or has responsibility for and control of the operation of the facility as contemplated herein, Partner shall pay to the Alliance the applicable prorated amounts set forth in this Section 22 unless such third party agrees in writing to, and is deemed by the Alliance, in its sole discretion, to be qualified to continue serving Medi-Cal eligible individuals at Minimum Medi-Cal Occupancy levels under the same terms and conditions that Partner has agreed to as set forth herein. Partner shall 169283933.5
provide the Alliance with at least ninety (90) days advance notice of a transaction described herein.

IMPLEMENTATION PHASES

3. Implementation Phase One
a. Implementation Phase One Milestones:
i. Demonstrate proof of Project site ownership.
ii. Obtain design plans.
iii. Complete construction budget and submit Project Plan b. Implementation Phase One Completion Date: Within fifteen (15) business days of Acquisition Phase Two Completion Date.
c. Deliverables: Documentation of Implementation Phase One Milestones completion, including submission of proposed Project Plan and documentation of any applicable Payment Preconditions listed in Section A of this SOW. d. Deliverable Due Date: Within fifteen (15) business days of Effective Date. e. Payment Percentage: 0% of Maximum Award

4. Implementation Phase Two
a. Implementation Phase Two Milestones:
i. Obtain general contractor bids.
ii. Sign general contractor contract.
iii. Begin Renovations

1. Construction Start Date. In order to maintain eligibility for the interim payments provided for in this SOW, Partner must begin 169283933.5
renovation of the Project within twelve (12) months of the Effective Date (“Construction Start Date”).
b. Implementation Phase Two Completion Date: January 31, 2026 c. Deliverables: Detailed documentation of Implementation Phase Two Milestones completion, including timely submission of reports.
d. Deliverable Due Date: January 31, 2026.
e. Payment Percentage: 0% of Maximum Award

5. Implementation Phase Three
a. Implementation Phase Three Milestones:
i. Establish Prioritization Process for Medi-Cal Eligible Individuals.

1. Permanent Supportive Housing. If all or a portion of the Project is for permanent supportive housing, the following shall apply to such permanent supportive housing units:
a. Unless otherwise preapproved by the Alliance, Partner will develop referral protocols which prioritize placement of Medi-Cal eligible individuals through the local Coordinated Entry System (“CES”). If Partner wishes to utilize a
prioritization system other than CES, Partner may submit a request to utilize a comparable system to the Alliance at least 30 days prior to implementation date. Any request to utilize a prioritization system other than CES must be delivered in writing by Partner and include a detailed narrative
description of the prioritization system, justification for utilizing the non-CES system, and an attestation that the placement prioritization process complies with the terms of this Agreement and Medi-Cal eligibility income
requirements.
b. Should Partner include a request to utilize a non-CES system in Partner’s Implementation Phase 1 Milestone Project Plan deliverable, such non-CES system shall be considered
approved under this Agreement upon the Alliance’s
approval of the Project Plan
c. Should requirements from other funding sources or other external constraints prevent Partner from using CES, Partner shall provide documentation to the Alliance evidencing such terms and conditions.
1 Housing Discrimination Under the Fair Housing Act | HUD.gov / U.S. Department of Housing and Urban Development (HUD)
169283933.5
d. Should Partner already have a prioritization system
comparable to CES in place that Partner wishes to continue utilizing as of the SOW Section C(3)(a)(i) due date above, then Partner shall adopt the following protocol unless
otherwise agreed upon by the Alliance:
i. If Partner’s prioritization list already contains a
queue, Partner will: validate listed individuals’
Medi-Cal eligibility using income guidelines and
submit validated prioritization list to the Alliance for approval.
ii. Once Partner’s prioritization list is exhausted,
Partner will: identify other Medi-Cal eligible
individuals through the Partner’s alternative system,
validate such individuals’ Medi-Cal eligibility using
income guidelines, and submit the validated
prioritization list to the Alliance for approval.
iii. Once Partner’s prioritization list is exhausted, if Partner is not able to identify any additional MediCal eligible individuals through the alternative system, Partner will: utilize CES, validate such
individuals’ Medi-Cal eligibility using income
guidelines, and submit validated prioritization list to the Alliance for approval.

2. Non-Permanent Supportive Housing. If all or a portion of the Project is for uses other than permanent supportive housing (e.g., recuperative care and short-term post hospitalization housing), the following shall apply to such non-permanent supportive housing units:
a. Partner shall submit a proposed process of prioritization to the Alliance at least 30 days prior to implementing such process under this Agreement. Such proposal must be
delivered in writing by Partner and include a detailed
narrative description of the prioritization process, how such system will prioritize placement of Medi-Cal eligible
individuals to meet Minimum Medi-Cal Occupancy
requirements, and an attestation that the placement
prioritization process complies with the terms of this
Agreement and Medi-Cal eligibility income requirements. b. Should Partner include a proposed process of prioritization in Partner’s Implementation Phase 1 Milestone Project Plan deliverable, such system shall be considered approved under this Agreement upon the Alliance’s approval of the Project Plan
ii. Complete Renovations.
169283933.5

1. By July 31, 2027, Partner will complete the renovation of the Days Inn at 1130 Broadway Street, King City, CA, for the purpose of transitioning to permanent supportive housing.
iii. Obtain Certificate of Occupancy.

1. By August 30, 2027, all permanent supportive housing units will be fully occupied in compliance with the Minimum Medi-Cal
Occupancy requirement, with at least 80% of all residents comprised of individuals with incomes that meet the then-current Medi-Cal eligibility income limits. .
iv. Establish Service Availability and Best Efforts Prioritization Outcomes.

1. By August 30, 2027, Partner will ensure that on-site case management services are available/provided and individual services plans are developed for all residents eligible to receive Medi-Cal case management services.

2. By August 30, 2027, Partner shall use best efforts to retain residency for Medi-Cal income eligible individuals originally housed in Project.
b. Implementation Phase Three Completion Date: August 30, 2027. c. Deliverables: Detailed documentation of Implementation Phase Three Milestones completion, including timely submission of reports and, as applicable, validated prioritization lists.
d. Deliverable Due Date: August 30, 2027.
e. Payment Percentage: 0% of Maximum Award

1. Example 1: If Partner only fills 40% of the total units with Medi-Cal income eligible residents (50% of Minimum Medi-Cal Occupancy) during the first three-year period following Project completion, the amount of the Combined Award subject to recapture shall be calculated as follows:
a. Maximum Recapture: 80% of $5,178,680.21 Combined
Award = $4,142,944.17
b. Proportionate to noncompliant portion of units: 50% of $4,142,944.17 = $2,071,472.08 subject to recapture.

2. Example 2: If Partner only fills 40% of the total units with Medi-Cal income eligible residents (50% of Minimum Medi-Cal Occupancy) during the period between three and five years after Project completion, the amount of the Award subject to recapture shall be calculated as follows:
a. Maximum Recapture: 50% of $5,178,680.21 Combined
Award = $2,589.340.10.
b. Proportionate to noncompliant portion of units: 50% of $2,589.340.10 = $1,294,670.05 subject to recapture.
169283933.5

3. Example 3: If Partner only fills 75% of the total units with Medi-Cal income eligible residents (93.75% of Minimum Medi-Cal
Occupancy) during the period between five and seven years after Project completion, the amount of the Award subject to recapture shall be calculated as follows:
a. Maximum Recapture: 20% of $5,178,680.21 Combined
Award = $1,035,736.04.
b. Proportionate to noncompliant portion of units: 6.25% of $1,035,736.04 = $64,733.50 subject to recapture.

4. Example 4: If Partner only fills 60% of the total units with Medi-Cal income eligible residents (75% of Minimum Medi-Cal Occupancy) during the period between seven and ten years after Project completion, the amount of the Award subject to recapture shall be calculated as follows:
a. Maximum Recapture: 10% of $5,178,680.21 Combined
Award = $517,868.02
b. Divided by noncompliant portion of units: 25% of
$517,868.02 = $129,467.01 subject to recapture.
d. Useful Life End Date:
e. Deliverables: Annual attestation.
f. Deliverable Due Date: March 31st of each calendar year during the Useful Life.

For the Assignor:

King City
For the Assignee
Housing Authority of
Monterey County
For the Non-Assigning Party:

Santa Cruz-Monterey-MercedSan Benito-Mariposa Managed
Medical Care Commission,
operating as Central California
Alliance for Health
By: By: By:

Print Name: Print Name: Print Name:

Title: Title: Title:

Date Signed: Date Signed: Date Signed:
169215429.2
168285925.3

FUNDING AGREEMENT
THIS FUNDING AGREEMENT (“Agreement”) is made this ___ day of ___ 2025 (“Agreement Date”) by and between the CITY OF KING a California municipal entity (“City”), and HOUSING AUTHORITY OF THE COUNTY OF MONTEREY, a joint powers authority (“Authority”), and jointly referred to herein as (“Parties”).

R E C I T A L S:

A. Both the City and Authority desire to expand housing for persons experiencing homelessness and/or at risk of homelessness, and who are at increased risk within the City of King and surrounding south Monterey County.

B. The City and Authority further desire to develop the property located at 1130 Broadway Street, King City, California 93930 into a permanent supportive housing community for those individuals who are currently homeless and/or at risk of homelessness.

C. The goal of ending homelessness helps eliminate unacceptable living conditions for the community’s most vulnerable population and benefits the community at-large by addressing social, health and environmental issues.

D. PLHA provides funding to local governments in California for housing-related projects and programs that assist in addressing the unmet housing needs of local communities.

E. PLHA is administered by the Department of Housing and Community Development (“HCD”) in accordance with Chapter 2.5 Commencing with § 50470) of Part 2 of Division 31 of the California Health and Safety Code (the “PLHA Statute”), the PLHA Guidelines adopted by HCD and dated October of 2019 (the “Guidelines”), the Notice of Funding Availability dated February 26, 2020 (the “NOFA”), and the Standard Agreement numbered 20-PLHA-15632 (the “Standard Agreement”), and any amendments to the aforementioned (the PLHA Statute, Guidelines, NOFA, and Standard Agreement being, collectively, the “PLHA Requirements”). PLHA provides funding to local governments in California for housing-related projects and programs that assist in addressing the unmet housing needs of local communities.

F. The City has received PLHA funding from HCD, a public entity of the State of California to increase housing opportunities, including to assist housing projects for individuals experiencing and/or at risk of homelessness.

G. As such, the City desires to provide the Authority with funding, including a portion of the City’s PLHA funding allocation, to assist in the construction/development of the permanent supportive housing project to be located at 1130 Broadway Street and the Authority wants to accept the PLHA funds provided by the City.

NOW, THEREFORE, in consideration of the mutual covenants set forth herein, the Parties hereto agree as follows:
11(A) EXHIBIT 3
1 168285925.3
TERMS AND CONDITIONS:

1. RECITALS. The foregoing recitals are a part of this Agreement.

2. FUNDING.

2.1 The City shall provide the Authority with $389,662 in funding for the construction/development of the permanent supportive housing project to be located at 1130 Broadway Street and more particularly described on Exhibit A attached hereto (the “Property”). Of this amount, $77,662 will be funds from the City’s PLHA allocation. Of the remaining amount, $300,000 will be allocated for the construction contingency budget for the renovation of the permanent supportive housing project facility at 1130 Broadway Street and shall not be paid to or utilized by the Authority unless and until there are renovation costs remaining after all other construction/renovation funding approved for the project has been exhausted.

2.2 The City shall also provide the Authority with a no interest forgiveable loan in the amount of $1,000,000. Funds shall be disbursed to Authority as invoices for construction costs are received and payment of all other construction/renovation funding sources paid to the Authority have been expended. Authority shall submit an invoice to the City along with copies of invoices for work completed. City shall pay Authority within fifteen (15) days of the Authority’s submission to City of such invoice and supporting invoices. City shall be reimbursed by HCD funds as set forth in the Settlement Agreement between the City and HCD (attached hereto as Exhibit B).

3. FUNDING REQUIREMENTS. As a condition of receiving the PLHA and other funding from the City, the Authority hereby agrees that it shall comply with: 1) all requirements provided by the State of California Department of Housing and Community Development for the funding of the acquisition, construction, development and/or operation of the permanent supportive housing project to be located at 1130 Broadway Street, including the PLHA Requirements; (2) all requirements provided by the Central California Alliance for Health for the funding of the acquisition, construction, development and/or operation of the permanent supportive housing project to be located at 1130 Broadway Street; (3) all restrictive covenants and/or deed restrictions recorded against the property located at 1130 Broadway Street, King City, California 93930; and (4) all other federal, state and local requirements governing the acquisition, construction, development and/or operation of the permanent supportive housing project to be located at 1130 Broadway Street.

4. MANDATED USE OF COORDINATED ENTRY

4.1 The Authority shall actively participate in and utilize the Lead Me Home Continuum of Care Coordinated Assessment and Referral Process (“CARS”) for all referrals and participant intake for programs covered under this Agreement. No individual or household may be served under this Agreement unless they have been referred through the CARS, except in cases where explicit written exception has been granted by the Coalition of Homeless Services Providers in accordance with CoC policies. The Authority shall:
a. Ensure all relevant project staff are trained on Coordinated Entry processes, policies, and tools.
b. Accept referrals exclusively from the Coordinated Entry System for all services covered under this Agreement.
1 168285925.3
c. Document any service denials and the reason for denial in the Homeless Management Information System (HMIS) or other approved system, in accordance with Coordinated Entry policies and procedures.
d. Comply with all data collection and reporting requirements related to Coordinated Entry, including timely updating of project openings and vacancies.

4.2 The Authority shall establish eligibility requirements within CARS, where:
a. Clients must be experiencing homelessness, consistent with 24 CFR 578.3; and
b. Client income must be at or below the current Medi-Cal income limits, except as otherwise expressly permitted;

4.3 The Authority shall establish prioritization strategies within CARS for:
a. Chronically Homeless individuals as defined in 24 CFR 578.3; and b. King City residents.

4.4 The Authority shall not modify prioritization criteria without prior written approval from the City of King, such approval not to be unreasonably withheld, conditioned or delayed, and shall apply prioritization consistently across all participants referred through Coordinated Entry.

4.5 The Authority shall retain documentation of eligibility determination for each participant and shall make such documentation available for review by the City of King and the Department of Housing and Community Development upon request.

5. COMPLIANCE WITH EXISTING AGREEMENTS. The Authority knowingly and voluntarily agrees to comply with the terms, conditions and/or requirements of the following agreements: (1) Settlement Agreement between the City and the California Department of Housing and Community Development (attached hereto as Exhibit B); (2) the Restrictive Covenants Recorded upon the Property (attached hereto as Exhibit C); and (3) the Letter of Agreement for the Alliance Housing Fund entered into between Santa Cruz-Monterey-Merced-San Benito-Mariposa Managed Medical Care Commission (operating as Central California Alliance for Health) and the City (attached hereto as Exhibit D). Exhibits B, C and D are hereby incorporated into this Agreement by reference as if stated fulling within this Agreement. Further, the Authority agrees to indemnify and hold harmless the City, its elected or appointed officials, employees and contractors from any claims, causes of action and/or liability, whether seeking monetary and/or equitable relief, arising from the alleged violation of the terms, conditions and/or requirements, as stated within the above referenced agreements which have been incorporated by reference within this Agreement, by the Authority and/or its elected or appointed officials, employees, contractors and/or operators. Notwithstanding the foregoing, the City acknowledges and agrees that any obligation of the Authority to hold harmless, defend, or indemnify hereunder shall be payable the Authority only out of Non-Federal Funds. For purposes of this Agreement, the term "Non-Federal Funds" means assets and funds that are not restricted by law or contract for use in government-sponsored programs (including without limitation any funds received or held by the Authority with respect to the Authority's public housing portfolio). Without limiting the foregoing, there shall be no recourse against (i) any public housing project of the Authority; (ii) any operating receipts of the Authority (as the terms "public housing project" and "operating receipts" are defined in the Annual Contributions Contract between the Authority and the U.S. Department of Housing and Urban Development, as amended (the "ACC"), 1 168285925.3
or in any amendments thereto); or (iii) any public housing operating reserves of the Authority reflected in the Authority’s annual operating budget required under the ACC. the Authority’s obligations hereunder are limited to eligible non-public housing assets (e.g., Section 8 administrative fee reserves or other assets not subject to any Declaration of Trust and not acquired or merged with assets acquired with public housing funds under the United States Housing Act of 1937, as amended).

6. NOTICES. All notices required or permitted under this Agreement shall be in writing and shall be served on the parties at the addresses set forth below. Any such notices shall, unless otherwise provided herein, be given or served (i) by depositing the same in the United States mail, postage paid, certified and addressed to the party to be notified, with return receipt requested, (ii) by overnight delivery using a nationally recognized overnight courier, or (iii) by personal delivery. Notice deposited in the mail in the manner hereinabove described shall be effective upon receipt or rejection of such notice. Notice given in any other manner shall be effective only if and when received (or rejected) by the party to be notified between the hours of 8:00 a.m. and 5:00 p.m. California time of any business day with delivery made after such hours to be deemed received the following business day. A party’s address may be changed by written notice to the other party; however, no notice of a change of address shall be effective until actual receipt of such notice. Copies of notices are for informational purposes only, and a failure to give or receive copies of any notice shall not be deemed a failure to give notice. Notices given by counsel to the City shall be deemed given by City and notices given by counsel to the Authority shall be deemed given by Authority.

Authority: Housing Authority of the County of Monterey
Attn: Zulieka Boykin
123 Rico Street
Salinas, CA 93907
With copies to: Fox Rothschild LLP
BNY Mellon Center
500 Grant Street, Suite 2500
Pittsburgh, PA 15219
Attn: Michael H. Syme, Esq.

Email: [email protected]
City: City of King
212 S. Vanderhurst Ave.

King City, CA 93930
Attention: Steven Adams, City Manager
With a copy to:

HCD
Aleshire & Wynder, LLP
2440 Tulare Street Suite 410
Fresno, CA 93721
Attention: Roy C. Santos, City Attorney
Permanent Local Housing Allocation Program
Department of Housing and Community Development
P.O. Box 952052
Sacramento, CA 94252-2052

7. GENERAL PROVISIONS.
1 168285925.3

7.1 Assignment. Neither party shall have the right to assign this Agreement or any interest or right hereunder without the prior written consent of the other party. Subject to the foregoing, this Agreement shall be binding upon and shall inure to the benefit of City and Authority and their respective heirs, personal representatives, successors and assigns.

7.2 Attorney’s Fees. In any action between the parties hereto, seeking enforcement of any of the terms and provisions of this Agreement, the prevailing party in such action shall be entitled, to have and to recover from the other party its reasonable attorneys' fees and other reasonable expenses in connection with such action or proceeding, in addition to its recoverable court costs.

7.3 Interpretation; Governing Law. This Agreement shall be construed according to its fair meaning and as if prepared by both parties hereto. This Agreement shall be construed in accordance with the laws of the State of California in effect at the time of the execution of this Agreement. Titles and captions are for convenience only and shall not constitute a portion of this Agreement. As used in this Agreement, masculine, feminine or neuter gender and the singular or plural number shall each be deemed to include the others wherever and whenever the context so dictates.

7.4 No Waiver. No delay or omission by either party in exercising any right or power accruing upon the compliance or failure of performance by the other party under the provisions of this Agreement shall impair any such right or power or be construed to be a waiver thereof. A waiver by either party of a breach of any of the covenants, conditions or agreements hereof to be performed by the other party shall not be construed as a waiver of any succeeding breach of the same or other covenants, agreements, restrictions or conditions hereof.

7.5 Modifications.

7.5.1 Generally. Any alteration, change or modification of or to this Agreement, in order to become effective, shall be made by written instrument or endorsement thereon and in each such instance executed on behalf of each party hereto.

7.5.2 HCD Consent to Modification. Notwithstanding any other provision of this Agreement, the City and Authority shall obtain the prior written consent of HCD for any modification of this Agreement to become effective. HCD’s consent under this section 6.5.2 shall not be unreasonably withheld.

7.6 Severability. If any term, provision, condition or covenant of this Agreement or the application thereof to any party or circumstances shall, to any extent, be held invalid or unenforceable, the remainder of this instrument, or the application of such term, provisions, condition or covenant to persons or circumstances other than those as to whom or which it is held invalid or unenforceable, shall not be affected thereby, and each term and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.

7.7 Merger. This Agreement and other documents incorporated herein by reference contain the entire understanding between the parties relating to the transaction contemplated hereby and all prior to contemporaneous agreements, understandings, representations and statements (including letters of intent), oral or written, are merged herein and shall be of no further force or effect.

7.8 Execution of Documents. The parties agree to execute such instructions, other instruments and to do such further acts as may be reasonably necessary to carry out the provisions of this Agreement.
1 168285925.3

7.9 Inducement. The making, execution and delivery of this Agreement by the parties hereto have been induced by no representations, statements, warranties or agreements other than those expressly set forth herein.

7.10 Relationship of Parties. Notwithstanding anything to the contrary contained herein, this Agreement shall not be deemed or construed to make the parties hereto partners or joint venturers, or to render either party liable for any of the debts or obligations of the other, it being the intention of the parties to merely create the relationship of City and Authority with respect to the execution of this Agreement.

7.11 No Personal Liability. No member, official, employee, agent or contractor of City shall be personally liable to Authority in the event of any default or breach by City or for any amount which may become due to Authority or on any obligations under the terms of the Agreement.

7.12 Force Majeure. If either party is delayed or prevented from performing any act required in this Agreement by reason of any event beyond the reasonable control of either party, including without limitation, by labor disputes, pandemic, fire, unusual delay in deliveries, weather or acts of God, terrorism, delay in the issuance of permits or approvals, acts of governmental entities, unavoidable casualties or any other such causes beyond such party’s control, then the time herein fixed for completion of such obligation(s) shall be extended by the number of days that such party has been delayed.

7.13 Representation by Counsel. Each party hereto represents and agrees with each other that it has been represented by or had the opportunity to be represented by, independent counsel of its own choosing, and that it has had the full right and opportunity to consult with its respective attorney(s), that to the extent, if any, that it desired, it availed itself of this right and opportunity, that it or its authorized officers (as the case may be) have carefully read and fully understand this Agreement in its entirety and have had it fully explained to them by such party’s respective counsel, that each is fully aware of the contents thereof and its meaning, intent and legal effect, and that it or its authorized officer (as the case may be) is competent to execute this Agreement and has executed this Agreement free from coercion, duress or undue influence.

7.14 Execution in Counterparts. This Agreement may be executed in several counterparts, and all so executed shall constitute one agreement binding on all parties hereto, notwithstanding that all parties are not signatories to the original or the same counterpart. This Agreement may be electronically executed by the parties in accordance with the requirements of ESIGN and UETA by such third party providers such as DocuSign.

7.15 Exhibits. Exhibits A, B and C are attached hereto and incorporated herein by reference.

7.16 No Third-Party Beneficiaries. Except as otherwise expressly set forth herein, City and Authority do not intend, and this Agreement shall not be construed, to create a third-party beneficiary status or interest in, nor give any third-party beneficiary rights or remedies to, any other person or entity not a Party to this Agreement.
[Signatures located on following page(s)]
1 168285925.3
IN WITNESS WHEREOF, the parties hereto have executed this Funding Agreement.

CITY OF KING
a California Municipal Entity
By: ________________________
Mike LeBarre, Mayor
_________________, 2024
APPROVED AS TO FORM:

Aleshire & Wynder, LLP
By:
________________________________
Roy C. Santos, City Attorney

MONTEREY COUNTY HOUSING AUTHORITY,
a joint powers authority
By: ________________________
________________________
ATTEST:
___________________________
_______________, Authority Secretary
APPROVED AS TO FORM:

By: ________________________________
, Authority Counsel
1 168285925.3

EXHIBIT A
1 168285925.3

EXHIBIT B
1 168285925.3

EXHIBIT C
1 168285925.3

EXHIBIT D
1 168285925.3

STATE OF CALIFORNIA )
) ss.

COUNTY OF MONTEREY )
On _________________, 2025 before me, ___________________________, a notary public, personally appeared _______________________________________________ who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.
_________________________________________
Notary Public
SEAL:

A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy or validity of that document.
1 SIDE AGREEMENT
(1130 Broadway St., King City, CA)
This Side Agreement (“Agreement”) dated _______, 2025 is hereby entered into by and among the California Department of Housing and Community Development (“HCD” or “Department”), the City of King, a municipal corporation (“King City”), and the Housing Authority of the County of Monterey, a joint powers authority (“HACM”). HCD, King City, and HACM may be individually referred to as “Party” and collectively referred to as “Parties.” King City and HACM may be referred to together as “Owner.”

RECITALS
A. On or about January 9, 2024, HCD filed a lawsuit naming King City and others as defendants in the Los Angeles County Superior Court matter captioned California Department of Housing and Community Development v. Shangri-La Industries LLC, et al., Case No. 24STCV00629, alleging causes of action for breach of contract, fraud, quiet title, and declaratory relief (the “Lawsuit”).

B. This Agreement relates to 1130 Broadway Street in King City, California and more particularly described on Exhibit A attached hereto and incorporated herein by reference (the “Property”).

C. Pursuant to the Settlement Agreement being entered into contemporaneously herewith by and among HCD, King City, Medalist Partners Asset-Based Private Credit Fund III CRE LLC (“MP Credit”), and MP Broadway Street, LLC (“MPB”) (the “Settlement Agreement”), HCD, King City, MP Credit, and MPB are settling their disputes under the Lawsuit with respect to the Property.

D. Among other things, under the Settlement Agreement, King City and MPB are contemporaneously herewith entering into that certain Agreement of Sale and Purchase and Joint Escrow Instructions (1130 Broadway Street, King City, CA 93930) (the “PSA”) pursuant to which King City is purchasing the Property, with title thereto being directly deeded by MPB to HACM at close of escrow thereunder. Once acquired by HACM, HACM shall develop and operate the Property as originally contemplated by that certain Homekey Standard Agreement 21-HK-17170 (“Homekey Agreement 17170”) consistent with the terms of this Agreement.

E. This Agreement governs King City’s and HACM’s ongoing obligations with respect to the Property and its construction, rehabilitation, and operation in accordance with the Homekey program and all Program Requirements. Solely as between King City and HCD, this Agreement supersedes Homekey Agreement 17170 and Homekey Agreement 17170 is terminated.

TERMS
NOW THEREFORE, for good and valuable consideration, including the mutual promises recited herein, the Parties agree as follows:

1. Recitals. The recitals to this Agreement are hereby incorporated into and made a part of this Agreement.
11(A) Exhibit 4
2 2. Effectiveness. This Agreement shall be effective on the date all of the following conditions have been satisfied (the “Effective Date”):
(A) Three (3) copies of this Agreement and the Settlement Agreement have been fully executed (which may be in counterpart) and delivered by each party to each of the other parties.
(B) HCD has obtained the California Department of Finance’s (“DOF”) written approval of this Agreement and the Settlement Agreement.

This Agreement may be executed with electronic signatures provided the signatories comply with UETA and ESIGN and use qualified third-party providers such as DocuSign or AdobeSign. The Parties agree that future amendments, modifications and notices may be provided and are effective in PDF format or facsimile. This Agreement is independently enforceable from any settlement of the Lawsuit unrelated to the Property.

Unless otherwise amended or modified pursuant to an express written instrument signed by all Parties in accordance with Section 12.k. hereof, this Agreement shall continue in effect for a period of fifteen (15) years following its Effective Date.

3. HCD Funding. As provided in the Settlement Agreement, HCD’s funding obligation is limited to a maximum of Two Million One Hundred Thousand Dollars ($2,100,000), with a maximum of One Million One Hundred Thousand Dollars ($1,100,000) intended by the Parties to be paid towards the purchase price under the PSA (“PSA Funding Amount”), and the remaining balance of One Million Dollars ($1,000,000) (“Construction Funding Amount”) intended by the Parties to be paid towards the post-closing construction costs as set forth below. Each such amount shall be paid by HCD, in accordance with this Agreement, only upon the timely satisfaction of all applicable conditions precedent, in two (2) separate installments as set forth below.

3.01 PSA Funding Amount ($1,100,000) – Property Acquisition. (a) Generally. The DOF requires that the Settlement Agreement, which includes the PSA, the Covenant Agreement, and this Agreement as exhibits, be executed and delivered by all applicable parties before it can initiate its review and approval process. Upon receipt of the above documents, the DOF shall have not less than thirty (30) days to review the matter and, if approved, shall promptly authorize HCD’s obligations under the Settlement Agreement. (b) King City’s Advance of Acquisition Funds. In order to avoid delaying close of escrow under the PSA, King City, in addition to funding the Three Million Three Hundred Thousand Dollars ($3,300,000) portion of the purchase price for the Property anticipated from grants as contemplated by the Settlement Agreement, will also advance the PSA Funding Amount portion of the purchase price so that the entire Four Million Four Hundred Thousand Dollars ($4,400,000) purchase price under the PSA is fully funded at close of escrow thereunder, subject only to HCD’s obligation to reimburse King City for the PSA Funding Amount which it advanced on behalf of HCD, as provided herein below in subsection (c). No interest shall accrue with respect to the PSA Funding Amount advanced by King City on behalf of HCD contemplated herein.

The Parties understand that King City’s $3,300,000.00 share of the acquisition funding is derived from grant funds issued by the Central California Alliance for Health (“CCAH”). 3 (c) Reimbursement by HCD. HCD shall reimburse King City the PSA Funding Amount no later than forty-five (45) days after the close of escrow under the PSA and upon the satisfaction of all of the following conditions precedent:
(i) To the extent the same have not already occurred as of the Effective Date hereof, the MOU (as defined in Section 7.b below), the Settlement Agreement, and the PSA shall have been fully executed and delivered;
(ii) Escrow has closed under the PSA and all Parties have performed their obligations, including, without limitation, all of the following:
(A) MPB has directly deeded the Property to HACM, and a copy of the duly recorded grant deed conveying the Property to HACM (the “Grant Deed”) is provided to HCD.
(B) The Declaration of Restrictive Covenants (in the form attached to the Settlement Agreement) (the “Covenant Agreement”) is recorded against the Property through the PSA escrow immediately following the recordation of the Grant Deed without any intervening lien or encumbrance and subject only to those matters set forth in the final Owner’s title insurance pro forma approved by MPB, HCD, City, and HACM, and a conformed copy of the duly recorded Covenant Agreement is provided to HCD. The Covenant Agreement shall run with the Property and shall be enforceable in accordance with its terms for the term of 55 years as set forth therein.
(C) HCD has been provided with a copy of the Owner’s policy of title insurance issued to HACM at the closing (which shall be consistent with the mutually approved Owner’s title insurance pro forma). (iii) All conditions precedent to the effectiveness of the Settlement Agreement have been satisfied.
(iv) King City is not in default under the PSA, the Settlement Agreement or this Agreement, and HACM is not in default under this Agreement. (v) King City has materially complied with its agreements in Section 3.01(d) below.
(d) PSA Requirements. With respect to the PSA, King City and HACM confirm and agree as follows:
(i) The PSA requires, as a condition to closing escrow, that MPB cause the Owner’s title policy to (w) show that all real estate taxes and assessments are paid current and are not delinquent and any current amounts are prorated to the closing, (x) not show any deeds of trust or mortgages; (y) not show any mechanics liens or other liens or monetary encumbrances; and (z) not show any lis pendens. (ii) HCD will be provided with all title reports and title insurance proformas and/commitments, and HCD shall have a reasonable opportunity to review. 4 (e) HCD Agreement. As required by the Settlement Agreement, HCD shall deliver the release of the Notice of Pendency of Action (Lis Pendens) as Instrument No. 2024004824 (the “Lis Pendens Withdrawal”) into the escrow.

3.02 Construction Funding Amount ($1,000,000) – Construction Project. HCD’s obligation under the Settlement Agreement to fund the Construction Funding Amount toward the costs of constructing and completing the Project shall be paid by HCD to King City as a reimbursement consistent with the terms of this Agreement no later than forty-five (45) days after the satisfaction of all of the following conditions precedent:
(i) The construction of the Project has been fully completed in accordance with all of the terms and conditions set forth in this Agreement, including without limitation:
(A) All costs, fees and expenses related thereto have been fully and timely paid and title to the Property and Project are free and clear of any and all liens, claims or encumbrances related thereto;
(B) A Notice of Completion has been duly recorded and the final Certificate of Occupancy has been issued for the Project; and (C) Occupancy of the Project by the Target Population has been achieved in accordance with the Covenant Agreement and this Agreement. (ii) All conditions precedent to the effectiveness of the Settlement Agreement have been satisfied; and
(iii) Neither King City nor HACM is in default under the PSA or this Agreement, and King City is not in default under the Settlement Agreement.

Other than the $1,000,000.00 Construction Funding Amount, except as otherwise expressly provided, HACM shall fund all other construction costs and short-term (one – two years) operational expenses.

4. Definitions. Any capitalized terms contained in this Agreement that are not defined below shall have the definitions set forth in the NOFA, the MHP Statutes, and the MHP Guidelines, as defined below. In the event of any conflict, the definitions in this Agreement and the NOFA are controlling.
a. “AMI” means Area Median Income.
b. “Assisted Unit” means a residential dwelling unit that is funded by or constructed pursuant to this Agreement and that is subject to rent, income, occupancy, and other restrictions in accordance with Program Requirements and this Agreement. c. “Chronically Homeless” is defined in accordance with Part 578.3 of Title 24 of the Code of Federal Regulations.
d. “Performance Milestones” means the indicators and metrics of progress and performance that are identified as such in Section 10 of this Agreement. The dates designated for their completion are “Milestone Completion Dates.” The Performance Milestones are also conditions precedent to HCD’s disbursement of the Construction Funding Amount, with the exception of the final Performance Milestone which provides 5 for annual reporting. The failure to satisfy any one of the Performance Milestones will constitute a breach of this Agreement and will entitle the Department to exercise any and all available remedies, including, without limitation, those in Section 11.a. of this Agreement without further disbursement of any remaining installments of settlement funding.
e. “Permanent Supportive Housing” means housing, dwellings, or other living accommodations that are occupied by the Target Population, and where the landlord does not limit the tenant’s length of tenancy, the landlord does not restrict the tenant’s movements, and the tenant has a lease and is subject to the rights and responsibilities of tenancy. Such housing is linked to onsite or offsite services that help the residents retain the housing, improve their health status, and maximize their ability to live and, when possible, work in the community.
f. “Program Requirements” means the following legal authority and Homekey program materials:
i. AB 140 (California Assembly Bill No. 140 (Chapter 111, Statutes of 2021) and, specifically, Health and Safety Code section 50675.1.3, which provides the statutory basis for Round 2 of the Homekey program; ii. The Multifamily Housing Program (Chapter 6.7 (commencing with Section 50675) of Part 2 of Division 31 of the Health and Safety Code) (the “MHP Statutes”);
iii. The Homekey Program Notice of Funding Availability for Round 2 issued on September 9, 2021, and as subsequently amended (the “NOFA”); iv. The Multifamily Housing Program Final Guidelines, dated June 19, 2019 (“MHP Guidelines”), as amended and in effect from time to time; and v. All other applicable law.
g. “Project” means the structure or set of structures located on the Property described herein which provides Permanent Supportive Housing for the Target Population. h. “Scope of Work” or “Work” means the work to be performed by the Owner, as described in Section 6 of this Agreement, in order to fulfill the purpose of this Agreement. i. “Supportive Services” means social, health, educational, income support, employment, and housing stability services and benefits; coordination of community building and educational activities; individualized needs assessment and case management; and individualized assistance with obtaining services and benefits. j. “Target Population” means individuals and families who are “homeless” or “at risk of homelessness,” as those terms are defined in Part 578.3 of Title 24 of the Code of Federal Regulations, and who are inherently impacted by or at increased risk for medical diseases or conditions due to the COVID-19 pandemic or other communicable diseases. The term “Target Population” also encompasses the subset of “Chronically Homeless,” as defined infra.
6 5. Project Narrative. HACM is acquiring, rehabilitating, and operating the former hotel, which is sited on the Property, in order to provide forty-four (44) units of Permanent Supportive Housing for the Target Population, and one (1) manager’s unit. Subject to the terms of the Covenant Agreement, HACM will specifically ensure that fifteen (15) units will be occupied by the Chronically Homeless and twenty-nine (29) units will be occupied by individuals and families who are at risk of homelessness. A unit mix chart appears on Exhibit B, which is attached hereto and incorporated herein by reference.

Units will be renovated to include an adaptable kitchenette (kitchen storage area can be removed to accommodate accessibility needs), new flooring, lighting, anti-slide/lift devices on windows, and furniture. Common areas will be renovated with new flooring, paint, and furniture. An existing area will be reconfigured for Supportive Services/property management office space, a community room, and computer center. New washers and dryers will be installed, and outdoor amenities improved to include a communal gathering space, dog park, and drought-tolerant landscape. The site will also be secured with on-site security, controlled access, and cameras.

The building will incorporate green building and resource efficient technologies to comply with the California Green Building Standards Code.

6. Scope of Work.
a. Prior to building renovations, new waste and sewer lines will be installed for the kitchenettes; additionally, interior non-structural, light demolition of the existing units will include removing flooring, all furnishings, and prepping for new plumbing.

Building interior upgrades will include the unit kitchenettes, new unit flooring, paint, LED lighting, and anti-slide/lift devices on applicable doors and windows. Smoke and carbon monoxide detectors will be installed, and furnishings provided including a drop leaf table with four chairs, dresser, twin bed and mattress, and Smart TV with digital TV antenna. Upgrades for accessible units will include, but are not limited to, siting, wider doorways, bathroom accommodations, visual fire alarm with strobe light, and a doorbell flasher.
b. Building exterior upgrades will include new roofing, painting, and monument signage.

Egress, emergency lighting, and accessible pathways will be upgraded to be building code compliant. The entire Property will be fenced and will provide secure pedestrian and vehicle access. The parking lot will be re-leveled, re-paved, and re-striped as necessary. The existing pool will be backfilled and renovated as a community space and dog park. Landscaping will be upgraded to meet drought-tolerant standards. c. The Property will include the following safety and security features: on-site security, controlled access, security cameras, prominent addresses, unit numbers, and escape plans.
d. Community amenity upgrades will include new coin-operated washers and dryers, Supportive Services/property management office space, a community room, and computer center. All common areas will be renovated including new flooring, paint, and furniture. All elevators and railings in interior corridors and common areas will be modernized or renovated to be building code compliant, if applicable. 7 e. On-site Supportive Services will be provided by Step Up on Second Street, Inc. (“Step Up”).
i. Supportive services will include, but are not limited to: Case management – case managers will connect tenants to all available services and work with tenants to develop an individualized service plan (“ISP”). Case managers will meet with tenants at least once per month or more, as outlined in the tenant’s ISP.
ii. Behavioral health services – tenants will be linked to behavioral health services through the lead service provider, Step Up, or another community behavioral health agency. Services provided will include individual therapy, group therapy, and psychiatric medicine support.
iii. Physical health services – tenants will be linked to care through their primary care physician or a community health clinic. Supportive Services staff will help tenants access off-site resources for physical health care. iv. Assistance obtaining benefits and essential documentation – helping tenants access benefit programs including medical benefits, food assistance, financial aid, and disability income.
v. Life skills for daily living, rehabilitation, and independence – life skills training including money management, time management, positive self-care and behavior, relationship building, and social-emotional skills. f. Total Full-Time Equivalent (FTE) staff positions (half-time is 0.5). Case manager ratio is 15:1 for persons experiencing Chronic Homelessness and 25:1 for persons at-risk of homelessness. Supportive Services staffing will include:
* Vice President (.05 FTE, off-site)
* Director (.1 FTE, off-site)
* Program Manager (.2 FTE, on-site)
* Lead Service Coordinator (.5 FTE, on-site)
* Service Coordinator I (2 FTE, on-site) Supportive Services outcomes include:
i. Ninety percent of tenants retain permanent housing after one year. ii. Eight percent of tenants obtain and maintain eligible benefits.

Tenants increase their ability to live independently based on individualized goals in their ISP.
iii. Tenants’ independence and self-sufficiency will be tracked by the percentage decrease in accessing Supportive Services after one year.

Program goal is a twenty-five percent decrease in services use after one year.
iv. Tenants will be introduced to harm reduction practices. Program goal is increased use of harm reduction techniques in a tenant’s ISP. g. HACM and King City represent and warrant to HCD that, as of the Effective Date: (i) they have enforceable funding commitments in the amount of $16,329,595.66, as set forth in further detail on Exhibit C, which is attached hereto and incorporated herein 8 by reference (the “Locality Funding”), (ii) based on their current commercially reasonable best estimates, the Locality Funding shall be sufficient to fully construct the Project and fund operations in the short term (for 1 to 2 years), all in accordance with Program Requirements, and (iii) HACM has committed to issuing rental assistance vouchers, subject only to continuing U.S. Department of Housing and Urban Development (“HUD”) funding.

Notwithstanding anything contained in this Agreement to the contrary, should the Locality Funding not be sufficient to cover the costs of the Scope of Work in full or any anticipated operational needs due to future circumstances beyond HACM’s control, then HACM shall have the right to phase, modify, or adjust the Scope of Work, subject to the following conditions precedent:
i. HACM demonstrates to King City and HCD, in writing, that it has identified the precise gap of necessary funding; that it has made best efforts to leverage local, state, federal, and philanthropic funding to fill that funding gap; and that such best efforts were ultimately unsuccessful;
ii. HACM’s proposed phasing plan, modifications, or adjustments are commercially reasonable in light of the circumstances;
iii. HACM meets and confers with King City and HCD to discuss its proposed phasing plan, modifications, or adjustments to its performance or phasing of the Scope of Work;
iv. HACM receives express written consent from King City and HCD to proceed with such proposed phasing plan, modifications, or adjustments, which consent shall not be unreasonably withheld, conditioned, or delayed; and v. In no event shall any such proposed phasing plan, modifications, or adjustments ultimately result in fewer than forty-four (44) Units of Permanent Supportive Housing for the Target Population and one (1) manager’s unit.

Notwithstanding anything contained in this Agreement to the contrary, with respect to the Scope of Work, HACM shall not be deemed to be in default under this Agreement, the Covenant Agreement, or the Program Requirements as long as HACM is in compliance with this Section

6.g.

7. Affordability and Occupancy.
a. Generally, the affordability and occupancy requirements (e.g., rent standards) for the Project are set forth in the Covenant Agreement. b. The Parties understand that, in connection with the funding being provided by CCAH, CCAH will impose additional occupancy restrictions (i.e., Medi-Cal eligibility) (“Additional Occupancy Criteria”). As a condition precedent to HCD’s disbursement of the PSA Funding Amount, King City and HACM shall have entered into an HCD-approved memorandum of understanding or some other agreement (“MOU”) with CCAH with respect to such Additional Occupancy Criteria. Such MOU shall provide for the following:
9 i. King City and HACM shall use their reasonable best efforts to ensure that the Additional Occupancy Criteria are, to the maximum extent reasonably possible, consistent with the Covenant Agreement in both their definition and
implementation.
ii. If, during any period of time, there is any vacancy in the Project because an insufficient number of prospective tenants qualify for Units under both the Homekey Target Population criteria and the Additional Occupancy Criteria, then the vacant Unit(s) shall be leased to those individuals and families that meet the Homekey Target Population definition under the Covenant Agreement.

The terms of the MOU are subject to HCD’s prior reasonable written consent. Such MOU shall be recorded, and it shall be and remain subject and subordinate to the Covenant Agreement.

8. Management and Maintenance.
a. Owner shall be responsible for all management functions relative to the Project, including marketing of Assisted Units, screening and selection of tenants, and processing of evictions and terminations. Owner shall ensure that the Project is managed by an entity that is actively in the business of managing low-income housing and that is in good business standing. Owner shall develop and implement a management plan that is consistent with Housing First best practices and that includes the following:
i. Owner’s tenant screening, selection and recertification policy and process;
ii. Owner’s written nondiscrimination policy; and
iii. Owner’s written reasonable accommodation policy, which shall comply with state and federal law, including California Code of Regulations, title 2, sections 12176 – 12185.
b. Owner is responsible for all repair and maintenance functions relative to the Project, including ordinary and routine maintenance; replacement of capital items; repair and maintenance of accessibility features; delivery and maintenance of accessibility features provided as a reasonable modification to residents with disabilities; and extraordinary and/or unforeseen repairs and replacement necessary to maintain the health and safety of the Project and its residents. Owner shall ensure maintenance of residential units and common areas in accordance with local health, building, and housing codes.

9. Reporting. Owner shall submit a Homekey Program and Expenditure Report, as specified in Section 601 of the NOFA and in the Covenant Agreement. Such reporting shall be submitted to the Department for five (5) years following the construction or rehabilitation Milestone 10 Completion Date. Such reporting will be due no later than January 31 for the prior calendar year of January 1 to December 31.

10. Performance Milestones. Owner shall promptly report its satisfaction of each Performance Milestone, in writing, to HCD. Owner may apply to HCD for an extension of any Milestone Completion Date based on good cause shown and best efforts and assurances from the Owner for timely completion of the remaining Performance Milestones. Any such extension shall be granted by HCD in its sole and absolute discretion. FAILURE TO SATISFY ANY ONE OF

THE PERFORMANCE MILESTONES WILL CONSTITUTE A BREACH OF THIS AGREEMENT.

Performance Milestones Milestone Completion Date
The Project’s escrow must be closed, and title to the
Property transferred to HACM. May 31, 2025
All construction or rehabilitation must be completed.

July 31, 2027
Notice of Completion for the Project received by
HCD. August 30, 2027
Certificate of Occupancy for the Project received
by HCD. September 30, 2027
Full occupancy by the Target Population must be
accomplished in accordance with the descriptions
and representations set forth in this Agreement.

December 31, 2027
Performance Milestone check-ins must be submitted
to the Department as requested by the Department. As requested by the Department.

A Homekey Program and Expenditure Report must
be submitted to the Department as specified and
described in this Agreement and the Covenant
Agreement.

January 31 – Each year for five (5)
years following the construction or
rehabilitation Milestone
Completion Date of this
Agreement.
11 11. General Terms and Conditions.
a. Termination for Cause. The Department may terminate its obligations to fund the Construction Funding Amount under this Agreement for cause at any time by giving at least fourteen (14) calendar days’ advance written notice to the Owner provided Owner does not cure such issue specified in the notice within the 14-day period. Such termination will not limit any remedies that may be available to the Department under this Agreement, at law, or in equity.

Cause shall consist of Owner’s breach of, or failure to satisfy, any of the terms or conditions of this Agreement or the Settlement Agreement. Cause includes, but is not limited to, the following:

A. Owner’s failure to satisfy the conditions precedent to disbursement or to expend the Construction Funding Amount, as specified herein.

B. Owner’s failure to timely satisfy each or any of the Performance Milestones in Section 10 of this Agreement.

C. Owner’s violation of any of the Program Requirements.

In the event of this or any other breach, violation, or default by the Owner, the Department may give written notice to the Owner to cure the breach, violation, or default. If the breach, violation, or default is not cured to the Department’s satisfaction within a reasonable time, as determined by the Department in its reasonable discretion, then the Department may declare a default under this Agreement, in which event, any funding and other obligations of HCD under this Agreement shall terminate, Owner shall return to HCD any unexpended funds disbursed to King City or HACM hereunder, HCD may seek repayment of any amounts previously disbursed by HCD hereunder and expended by King City and/or HACM, and seek and enforce any and all other rights and remedies that are available under this Agreement, at law, in equity or otherwise.

The constituent Parties comprising the Owner shall be jointly and severally liable for any payment and performance obligations hereunder, provided, however, in no event shall King City’s liability with respect to payment obligations exceed the amount of $2,100,000.00. b. Compliance with Prevailing Wage Law. Owner’s Project is subject to state and federal prevailing wage law, and Owner is expected to comply to the extent such law is specifically applicable.
c. Insurance. Owner shall obtain the insurance coverages identified in the NOFA. Owner shall maintain such insurance coverages for either the term of this Agreement or the term of any required restrictive covenant or regulatory agreement, whichever applicable term is longer. Owner shall name the State of California and the Department, as well as their respective appointees, officers, agents, and employees, as additional insureds on all such policies. Such policies shall provide for notice to the Department in the event of any lapse of coverage or insurance claim thereunder. Prior to disbursement of any funds, Owner shall provide evidence satisfactory to the Department of its compliance with these insurance requirements.

If Owner is self-insured, in whole or in part, as to any of the required types and levels of coverage, the Owner shall provide the Department with a written acknowledgment of its self-insured status prior to disbursement of any funds. If the Owner abandons its self-insured status at any time after 12 execution of this Agreement, the Owner shall immediately notify the Department, and shall promptly comply with the insurance coverage requirements under the Program. d. Relocation. Owner must comply with all applicable federal, state, and local relocation law. e. Adaptability and Accessibility. The Project shall comply with all applicable federal, state and local laws regarding adaptability and accessibility, including, without limitation, the requirements set forth in the NOFA.
f. Compliance with Title VI of the Civil Rights Act of 1964. Owner and any of its contractors, subcontractors, successors, transferees, and assignees shall comply with Title VI of the Civil Rights Act of 1964, which prohibits recipients of federal financial assistance from excluding from a program or activity, denying benefits of, or otherwise discriminating against a person on the basis of race, color, or national origin (42 U.S.C. § 2000d et seq.), as implemented by the U.S.

Department of the Treasury’s Title VI regulations, 31 CFR Part 22, which are herein incorporated by reference and made a part of this Agreement. Title VI also includes protection to persons with “Limited English Proficiency” in any program or activity receiving federal financial assistance, 42 U.S.C. § 2000d et seq., as implemented by the U.S. Department of the Treasury’s Title VI regulations, 31 CFR Part 22, and herein incorporated by reference and made a part of this Agreement.
g. Nondiscrimination. Statutes and regulations prohibiting discrimination are applicable to this Agreement and include, without limitation, the following:

A. Title VI of the Civil Rights Act of 1964 (42 U.S.C. § 2000d et seq.) and the U.S.

Department of the Treasury’s implementing regulations at 31 CFR Part 22; B. The Fair Housing Act, Title VIII of the Civil Rights Act of 1968 (42 U.S.C. § 3601 et seq.);
C. Section 504 of the Rehabilitation Act of 1973, as amended (29 U.S.C. § 794); D. The Age Discrimination Act of 1975, as amended (42 U.S.C. § 6101 et seq.); E. Title II of the Americans with Disabilities Act of 1990, as amended (42 U.S.C. § 12101 et seq.); and
F. The State of California nondiscrimination statutes, regulations, and standards set forth and identified in the NOFA.

Ownershall adopt a written nondiscrimination policy requiring that no person shall, on the grounds of race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, marital status, national origin, ancestry, familial status, source of income, disability, age, medical condition, genetic information, citizenship, primary language, immigration status (except where explicitly prohibited by federal law), arbitrary characteristics, and all other classes of individuals protected from discrimination under federal or state housing laws, individuals perceived to be a member of any of the preceding classes, or any individual or person associated with any of the preceding classes, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under, any program or activity funded in whole or in part with Agreement funds. h. Affirmative Fair Housing Marketing Plan and Fair Housing Compliance. Upon request by the Department, Owner shall develop and implement an affirmative fair housing marketing plan 13 that is satisfactory to the Department. Appropriate aspects of the initial plan shall be incorporated into the ongoing management plan to ensure positive outreach and informational efforts to those who are least likely to know about and apply for Permanent Supportive Housing. Owner is encouraged to refer to the guidelines for Affirmative Fair Housing Marketing Plans issued by HUD. Owner shall comply with all applicable state and federal fair housing laws. i. Acknowledgment of the Pet Friendly Housing Act of 2017. By executing this Agreement, Owner acknowledges that the Pet Friendly Housing Act of 2017 (Health & Saf. Code, § 50466) requires each housing development, if it is financed on or after January 1, 2018 pursuant to Division 31 of the Health and Safety Code, to authorize a resident of the housing development to own or otherwise maintain one or more common household pets within the resident’s dwelling unit, subject to applicable state laws and local governmental ordinances related to public health, animal control, and animal anticruelty.
j. Final Certificate of Occupancy. Owner shall provide a final certificate of occupancy (or an equivalent form of occupancy certification or approval) issued by the local agency having jurisdiction over such certificates.
k. Occupancy. The Assisted Units shall be occupied by the Target Population consistent with Section 7 of this Agreement, and such units shall be in decent, safe, and sanitary condition at the time of their occupancy. In addition, the Owner shall certify, upon occupancy, that it will employ the core components of Housing First (as set forth at Welfare and Institutions Code section 8255) as part of its property management plan and Supportive Services plan. l. Tenant Selection. Referrals to Assisted Units shall be made through the local Coordinated Entry System (“CES”). All referral protocols for Assisted Units shall be developed in collaboration with the local Continuum of Care and implemented consistent with the Program Requirements.
m. Participation in Statewide HDIS/HMIS. Owner shall support Continuum of Care participation in the statewide Homeless Data Integration System (“HDIS”). As required by and in accordance with state and federal law (including all applicable privacy law), Owner shall further disclose relevant data to the local Homeless Management Information System (“HMIS”) and comparable data collection systems.
n. Restrictions on Sales, Transfers, and Encumbrances. Owner shall not, for the term of the Covenant Agreement, sell, assign, transfer, or convey the Project, or any interest therein or portion thereof, without the express prior written approval of the Department. o. Retention, Inspection, and Audit of Records. Owner is responsible for maintaining records which fully disclose the activities funded by the Agreement. Owner shall retain all records for a period of five (5) years after the disbursement of the Agreement funds, unless a longer retention period is stipulated. If any litigation, claim, negotiation, audit, monitoring, inspection or other action commences during this required retention period, all records must be retained until a full and final resolution of the action.

The Department, as well as its appointees, employees, agents, and delegatees, shall have the right to review, obtain, and copy all records pertaining to performance under this Agreement. Owner shall provide any relevant information requested, and shall permit access to its premises, upon 14 reasonable notice and during normal business hours, for the purpose of interviewing employees and inspecting and copying books, records, accounts, and other relevant material.

At any time during the term of this Agreement, the Department may perform or cause to be performed a financial audit of any and all phases of the Project. At the Department’s request, the Owner shall provide, at its own expense, a financial audit prepared by a certified public accountant.

The audit shall be performed by a qualified state, local, independent, or Department auditor. Where an independent auditor is engaged, the audit services agreement shall include a clause which permits the Department to have access to the independent auditor’s relevant papers, records, and work product.

If there are audit findings, the Owner shall submit a detailed response to the Department for each audit finding. The Department will review the response. If the Department determines, in its sole and absolute discretion, that the response is satisfactory, the Department will conclude the audit process and notify the Owner in writing. If the Department determines, in its sole and absolute discretion, that the response is not satisfactory, the Department will contact the Owner, in writing, and explain the action required to cure any audit deficiencies. Such action could include the repayment of ineligible costs or other remediation.

If so directed by the Department upon the termination or expiration of this Agreement, the Owner shall deliver all records, accounts, documentation, and other materials that are relevant to this Agreement to the Department as depository.
p. Site Inspection. The Department reserves the right, upon reasonable notice, to inspect the Project to determine whether it meets the Program Requirements. Nothing in this subsection is intended to create or imply any obligation of the Department to inspect the Project. q. Compliance with State and Federal Laws, Rules, Guidelines, and Regulations. Owner agrees to comply with all state and federal laws, rules, guidelines, and regulations that are applicable to the Project, including those that pertain to construction, health and safety, labor, fair employment practices, and equal opportunity.
r. Survival of Obligations. The obligations of the Owner, as set forth in this Agreement, shall survive the termination or expiration of this Agreement. s. Litigation. Owner shall notify the Department immediately of any claim or action undertaken by or against it which affects or may affect this Agreement or the Department, and shall take such action with respect to the claim or action as is consistent with the terms of this Agreement, the Program Requirements, the interests of the Department, and the objectives of the Homekey Program.
t. Disputes. In the event of any conflict between this Agreement and any Owner documents or side agreements, this Agreement and the Program Requirements shall prevail, are applicable, and shall be enforceable by the Department even if the Department provided review or approval of such documents and side agreements.
u. Consent. The Parties agree that wherever the consent or approval of the Department or Owner is required under this Agreement, such consent or approval shall not be unreasonably withheld, conditioned, or delayed, unless the same is specified as being in that Party’s sole and absolute discretion, or other words of similar import.
15 v. Owner Performance. Owner shall remain liable to the Department for performance under this Agreement and compliance with all Program Requirements regardless of any Departmentapproved transfer or assignment of interest, or of any designation of a third party for the undertaking of all or any part of the Scope of Work.
w. Defense and Indemnification. Owner agrees to defend, indemnify, and hold harmless the Department, and its appointees, agents, employees, and officers, from any losses, damages, liabilities, claims, actions, judgments, court costs and legal or other expenses (including attorneys’ fees), which may arise in connection with Owner’s use of the Agreement funds; performance under this Agreement; and, as applicable, ownership, construction, and operation of the Project and Property. If any attorney, including the California Attorney General, is engaged by the Department to enforce, construe, or defend any provision of this paragraph, with or without the filing of any legal action or proceeding, Owner shall, individually or jointly, pay to the Department, immediately upon demand, the amount of all reasonable attorneys’ fees and costs incurred by the Department in connection therewith. Notwithstanding anything in this Agreement to the contrary, the parties to and beneficiaries of this Agreement acknowledge and agree that any obligation of Owner to hold harmless, defend, indemnify or guarantee hereunder shall be payable by HACM only out of Non-Federal Funds. For purposes of this Agreement, the term "Non-Federal Funds" means assets and funds that are not restricted by law or contract for use in government-sponsored programs (including without limitation any funds received or held by HACM with respect to HACM’s public housing portfolio). Without limiting the foregoing, there shall be no recourse against (i) any public housing project of HACM; (ii) any operating receipts of HACM (as the terms "public housing project" and "operating receipts" are defined in the Annual Contributions Contract between HACM and the U.S. Department of Housing and Urban Development, as amended (the "ACC"), or in any amendments thereto); or (iii) any public housing operating reserves of HACM reflected in HACM’s annual operating budget required under the ACC. HACM obligations hereunder are limited to eligible non-public housing assets (e.g., Section 8 administrative fee reserves or other assets not subject to any Declaration of Trust and not acquired or merged with assets acquired with public housing funds under the United States Housing Act of 1937, as amended).
x. Time Is of the Essence. Time is of the essence under this Agreement, and in the performance of every term, covenant, and obligation contained herein. y. Housing Authority Indemnification. HACM agrees to defend, indemnify, and hold harmless King City, and its appointees, agents, employees, and officers, from any losses, damages, liabilities, claims, actions, judgments, court costs and legal or other expenses (including attorneys’ fees), which may arise in connection with HACM’s ownership, construction and operation of the Property, performance under this Agreement and for all obligations which survive under the PSA.

If any attorney is engaged by King City to enforce, construe, or defend any provision of this Agreement, with or without the filing of any legal action or proceeding, Owner shall pay to King City, immediately upon demand, the amount of all attorneys’ fees and costs incurred by King City in connection therewith. Notwithstanding anything in this Agreement to the contrary, the Parties to and beneficiaries of this Agreement acknowledge and agree that any obligation of HACM to hold harmless, defend, indemnify or guarantee hereunder shall be payable by HACM only out of Non-Federal Funds. HACM obligations hereunder are limited to eligible non-public housing assets (e.g., Section 8 administrative fee reserves or other assets not subject to any Declaration of Trust 16 and not acquired or merged with assets acquired with public housing funds under the United States Housing Act of 1937, as amended).

12. Miscellaneous.
a. Entire Agreement; Severability. This Agreement and the Settlement Agreement constitute the entire agreement between the Parties with respect to the subject matter hereof. All prior representations, statements, negotiations, and undertakings with regard to the subject matter hereof are superseded hereby. If any term or provision of this Agreement or the application thereof to any person or circumstance shall, to any extent, be invalid or unenforceable, the remaining terms and provisions of this Agreement, or the application of such terms or provisions to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each term and provision of this Agreement shall be valid and enforced to the fullest extent permitted by law.
b. Waivers. No waiver of any breach, violation, or default under this Agreement shall be held to be a waiver of any other or subsequent breach or violation thereof or default thereunder. Failure by one Party to this agreement, at any time, to enforce the provisions of this Agreement or to require the Party’s(ies’) performance under this Agreement shall in no way be construed as a waiver of such provisions or performance, and it shall not affect the validity of this Agreement or such Party’s right to enforce this Agreement.
c. Captions. The captions used in this Agreement are inserted only as a matter of convenience and for reference and in no way define, limit or describe the scope or the intent of this Agreement. d. Governing Law. This Agreement shall be construed in accordance with and governed by the laws of the State of California, without giving effect to the conflict of law principals thereof. e. Construction. Each Party hereto acknowledges and agrees that it has had independent legal counsel review and participate in the drafting of this Agreement, and it hereby fully waives the application of any law, statute or rule of construction or interpretation, including without limitation California Civil Code section 1654, to the effect that any ambiguities are to be construed against the drafting party. The term “shall” as used in this Agreement means that the matter or obligation to be performed in conjunction with the use thereof is in all cases mandatory and obligatory. f. Assignment. Neither King City nor HACM may transfer, assign, encumber or otherwise alienate any right, title, interest or obligations in or under this Agreement, or any portion thereof or interest therein, whether directly or indirectly, without the express prior written consent of HCD, which consent may be withheld or conditioned in HCD’s sole and absolute discretion. g. Attorneys’ Fees. The prevailing party in any action to enforce or interpret this Agreement shall be entitled to reasonable attorneys’ fees and costs as determined by the court. h. Counterparts. This Agreement may be executed in one or more identical counterparts. i. Notice. Any notice required or desired to be given by any Party to this Agreement to the other(s) pursuant to or with respect to this Agreement shall be in writing and shall be given by any of the following methods: (i) personal service at the address set forth below, (ii) electronic transmission in the manner set forth below, or (iii) depositing such notice with an overnight courier or in the United States mail postage prepaid, addressed to the other as follows:
17 City: City of King
212 South Vanderhurst Ave
King City, CA 93930
Attn: City Manager
Copy to: City of King
212 South Vanderhurst Ave
King City, CA 93930
Attn: City Attorney
Department: Homekey Program
Department of Housing and
Community Development
P.O. Box 952052
Sacramento, CA 94252-2052
[email protected]
Owner:

Copy to:

Housing Authority of the County of Monterey
Attn: Zulieka Boykin
123 Rico Street
Salinas, CA 93907
Email:[email protected]
Fox Rothschild LLP
BNY Mellon Center
500 Grant Street, Suite 2500
Pittsburgh, PA 15219
Attn: Michael H. Syme, Esq.

Email: [email protected]
Any notice given by personal service shall be deemed given when received, as verified by a written receipt of delivery by the delivering agent or refusal thereof by the person to whom such notice is delivered. Any notice given by electronic transmission shall be deemed given when transmitted, as evidenced by a printed confirmation sheet; any notice given by overnight courier shall be deemed delivered on the next day following its deposit with such courier, and any notice given by regular mail shall be deemed to have been given on the third (3rd) business day after its deposit in the United States mail postage prepaid. Any party may, by written notice to the other in the manner aforesaid, change the address to which notices addressed to it shall thereafter be mailed. j. Exhibits. Exhibits A, B, and C are attached to this Agreement and are incorporated herein by reference and specifically made a part of this Agreement. k. Amendment, Modification. This Agreement may be amended or modified only by an express written instrument signed by all Parties.
18 l. Knowledge and Authority. Each of the Parties hereto warrants and represents that it has (a) intentionally, voluntarily, and knowingly made this Agreement, (b) read this Agreement, and understands all its terms, (c) the authority to make this Agreement, but HCD’s authority is contingent upon obtaining the DOF Approval; and (d) made this Agreement, with full knowledge of its significance, without relying upon any warranties or representations, except those set forth herein, by any of the other Parties or their attorneys. Each person who signs this Agreement represents and warrants that he or she has the authority and capacity to act on behalf of the Party for whom they are signing and to bind the Party and all who might claim through it to the terms of this Agreement.

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first above written.

King City: HCD:

City of King, a California municipal
corporation
By: ____________________
Mike LeBarre, Mayor
ATTEST
_______________________
Erica Sonne, City Clerk
APPROVED AS TO FORM:

ALESHIRE & WYNDER, LLP
By: ___________________
Roy Santos, City Attorney
Dated: ____________, 2025

CALIFORNIA DEPARTMENT OF

HOUSING AND COMMUNITY
DEVELOPMENT, a public agency of
the State of California
By: ________________________
Dated: ______________, 2025
HACM:

HOUSING AUTHORITY OF THE
COUNTY OF MONTEREY, a California
joint powers authority
By: ______________________
Its: ______________________
19 EXHIBIT A
(Legal Description of Property)
That certain real property in City of King, County of Monterey, State of California legally described as follows:

APN/Parcel ID(s): 026-401-020
20 EXHIBIT B
(Unit Mix Chart)
1130 Broadway Street
King City, CA 93930
County of Monterey
Assessor Parcel Number
(APN): 026-401-020-000
# of
Bedrooms Units
NonHomekey
Units
Assisted
Units
AMI Income
Limit
Restriction to Subset of Target
Population
Manager
Unit 1 0 1 N/A N/A
0 (Studio) 15 0 15 N/A Chronically Homeless
0 (Studio) 29 0 29 30% At Risk of Homelessness
Totals: 45 0 45
21 EXHIBIT C
(Locality Funding)
11 (A) EXHIBIT 5

Item No. 11 (B)

REPORT TO THE CITY COUNCIL
DATE: APRIL 22, 2025
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: STEVEN ADAMS, CITY MANAGER
RE: CONSIDERATION OF PERMANENT SUPPORTIVE HOUSING

PROJECT PURCHASE AND SALE AGREEMENTS
RECOMMENDATION:

It is recommended the City Council: 1) approve and authorize the Mayor to execute a purchase and sale agreement with MB Broadway Street, LLC for the acquisition of APN 026-401-020-000 for $4,400,000 contingent upon execution of the settlement agreement with the California Department of Housing and Community Development (HCD) and Medalist Partners Asset Based Private Credit Fund III CRE, LLC and the funding agreement with the Santa CruzMonterey-Merced-San Benito-Mariposa-Managed Medical Care Commission; 2) appropriate $3,300,000 from the grant from the Santa Cruz-Monterey-MercedSan Benito-Mariposa-Managed Medical Care Commission and $1,100,000 from the HCD settlement agreement for the purchase; 3) approve and authorize the Mayor to execute a purchase and sale agreement for the sale of APN 026-401- 020-000 to the Housing Authority of Monterey County (HACM) for $1 for development and operation of a permanent supportive housing project for chronically homeless individuals; and 4) authorize the City Manager and City Attorney to make non-substantive changes as necessary in a form approved by the City Attorney.

BACKGROUND:

CITY COUNCIL

CONSIDERATION OF PERMANENT SUPPORTIVE HOUSING PROJECT

PURCHASE AND SALE AGREEMENTS
APRIL 22, 2025
PAGE 2 OF 4
death. The City has provided a number of temporary shelter options since that time.

The City, along with the County of Monterey, Housing Authority of the County of Monterey (HACM) and other partner agencies refused to give up after so much progress had been made. Alternate funding strategies were developed to complete the Homekey project. The City is now ready to proceed with the project, and agreements for purchase and transfer of the property and a settlement agreement with HCD have been reached.

DISCUSSION:

To proceed with the project, HACM has agreed to assume the role of developer.

Staff have reached agreement on a purchase and sale agreement to acquire the property from the lender who foreclosed and took ownership of the property.

Medalist Partners Asset Based Private Credit Fund III CRE, LLC is the company who foreclosed on the property and is also a party to the settlement agreement.

They are currently operating as MB Broadway Street, LLC for ownership of the property.

The agreed upon purchase price is $4,400,00, which is above the appraised value. However, under the terms of the Settlement Agreement, HCD will provide most of the funding needed to cover the additional costs to move forward with the project at this time. Proceeding at this time rather than acquiring the property through eminent domain will save the City a substantial amount of funding through reduced legal costs and expenses to extend the interim homeless shelter program.

A separate purchase and sale agreement is proposed to direct deed the property to HACM for a cost of $1. The direct deed of the property will enable the City to transfer the property immediately to HACM through escrow. This will save valuable time to proceed with the project and will reduce escrow closing cost fees.

CITY COUNCIL

CONSIDERATION OF PERMANENT SUPPORTIVE HOUSING PROJECT

PURCHASE AND SALE AGREEMENTS
APRIL 22, 2025
PAGE 3 OF 4
HACM will renovate the property and contract with Step Up on Second Street, a non-profit service provider, to operate it and deliver services to the permanent housing residents. HACM will coordinate and provide property management services for the housing units, which will be leased to eligible participants. This holistic approach ensures that residents have the resources they need to succeed. HACM and Step Up on Second Street will also collaborate with other local service providers to deliver these essential services efficiently and effectively.

In compliance with the terms of the settlement and funding agreements, the purchase and sale agreement with HACM conditions the transfer of property upon their commitment to complete and operate the project under the terms and requirements of the Homekey program and agreement for CCAH funding. The City has also committed to agreed upon Declaration of Restrictive Covenants under the settlement and CCAH agreements, which will place a 55-year deed restriction on the property establishing specific requirements for the project to serve low-income chronically homeless. The CCAH Restrictive Covenant Agreement will also require a percentage of rooms to be rented to individuals with income levels meeting Medi-Cal eligibility requirements. The deed restrictions will be placed on the property prior to transfer of the property to HACM.

COST ANALYSIS:

The total project budget is $16,779,595, which includes acquisition, construction, and initial operating costs. The approved revenue sources include the following:

01222.0001/1044003.1 1
4901-5156-1995.10

AGREEMENT OF SALE AND PURCHASE

AND JOINT ESCROW INSTRUCTIONS
1130 Broadway Street, King City, CA 93930
This AGREEMENT OF SALE AND PURCHASE AND JOINT ESCROW
INSTRUCTIONS (the “Agreement”) is made and entered into as of April____, 2025 (“Agreement Date”), by and between MP BROADWAY STREET, LLC, a Delaware limited liability company (“Seller”), and CITY OF KING, a California municipal corporation (together with its permitted assigns, as defined in Section 12.2, “Buyer”).

ARTICLE 1
PURCHASE AND SALE; EFFECTIVE DATE

1.1 Agreement. In consideration of the mutual agreements contained in this Agreement and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Seller agrees to sell the “Property” to Buyer, and Buyer agrees to purchase the Property, for a purchase price equal to Four Million Four Hundred Thousand Dollars ($4,400,000) (“Purchase Price”) and upon the terms and conditions set forth in this Agreement.

For purposes hereof, “Property” means, collectively all of Seller’s right, title and interest in the Real Property, the Improvements, Intangible Personal Property, and the Tangible Personal Property, as such terms are defined below.
“Real Property” means that certain real property owned by Seller, located in the City of King, the County of Monterey, State of California (Assessor Parcel Number 026-401-020-000) as more particularly described on Exhibit A attached hereto, together with all tenements, hereditaments, easements, rights-of-way and appurtenances belonging or in any way appertaining to the same. “Improvements” means all buildings, structures, improvements and fixtures located on the Real Property.
“Intangible Personal Property” means all assignable intangible personal property, if any, now or through the date of Closing owned by Seller and arising out of or in connection with Seller’s ownership of the Real Property and the Tangible Personal Property, including (to the extent any such items exist and were acquired by Seller: (a) Seller’s rights to any plans, specifications and drawings relating to the Improvements, (b) to the extent assignable, any guaranties or warranties pertaining to the Property obtained by Seller, and (c) any transferable licenses, permits, authorizations, approvals and certificates of occupancy relating solely to the use, maintenance, occupancy and/or operation of the Real Property and the Tangible Personal Property, but expressly excluding any and all tort claims or causes of action which Seller or any of its affiliates may have that are related to the Property or in any way related to Seller’s ownership of the loan secured by the Property (including any guaranties granted in connection therewith) or, following the foreclosure of the security interest securing repayment of such loan, Seller’s ownership of the Property; provided, that the foregoing shall not include any causes of action that are released as part of the Settlement Agreement. “Tangible Personal Property” means, to the extent any such items exist and are owned and controlled by Seller, any fixtures, furniture, carpeting, draperies, appliances, building supplies, 11(B) EXHIBIT 1
01222.0001/1044003.1 2
4901-5156-1995.10
equipment, machinery, computer hardware, inventory, decorations, and landscaping, gardening, maintenance, communications, security and other equipment, and other tangible items of personal property owned by Seller and presently affixed, attached to, placed and situated at the Real Property and/or the Improvements and used exclusively in connection with the ownership, operation and occupancy of the Improvements.

The Intangible Personal Property and Tangible Personal Property are collectively referred to herein as the “Personal Property”.

1.2 Effective Date. This Agreement shall be effective (“Effective Date”) upon the last to occur of: (i) execution by both Parties, (ii) the Effective Date of that certain Settlement Agreement dated on or about the Agreement Date regarding the HCD Lawsuit (as defined in Section 6.1.4, below) which settlement agreement is by and among (a) the California Department of Housing and Community Development (“HCD”); (b) Buyer as “King City”; (c) Medalist Partners Asset-Based Private Credit Fund III CRE LLC, a Delaware limited liability company, as “MP Credit”, and (d) Seller as “MPB” (“Settlement Agreement”); and (iii) written approval by HCD as required by the Settlement Agreement.

ARTICLE 2

CONSIDERATION

2.1 Purchase Price. The Purchase Price to be paid by Buyer to Seller for the sale, transfer, assignment and conveyance of the Property is specified in Section 1.1 above. Buyer has no right to purchase, and Seller has no obligation to sell, less than all of the Property.

2.2 Deposit.

2.2.1 Delivery of Deposit. Not later than 5:00 pm Pacific Time on ) Business Days after the Effective Date, Buyer shall deliver an earnest money deposit equal to One Hundred Thirty-Two Thousand Dollars ($132,000) (“Deposit”) to Chicago Title Company, 1163 Fairway Drive, Suite 103, City of Industry, California 91789, Attention: Jessica Kuo, Email:

[email protected] (909) 895-8878 (“Escrow Holder”) in Good Funds as defined in Section 2.2.5.

Escrow (as defined in Section 4.1) shall be deemed opened only after (i) delivery to and acceptance by Escrow Holder of an executed copy of this Agreement; and (ii) the delivery of the Deposit to Escrow Holder.

2.2.2 Refundability of Deposit. Upon opening of Escrow, the Deposit shall be nonrefundable upon occurrence of a breach by Buyer (beyond any applicable notice and cure period) under this Agreement and the Deposit shall be released to Seller pursuant to Section 9.1. If the Escrow fails to close for any other reason and this Agreement is terminated as set forth herein, the Deposit shall be released as follows: (i) the Independent Consideration shall be released to Seller, and (ii) the balance shall be promptly returned to Buyer. Each party agrees to execute such documents as required by Escrow Holder to effect the foregoing.

2.2.3 Independent Consideration. Notwithstanding anything to the contrary contained herein, the Deposit being delivered by Buyer includes the amount of One Hundred Dollars ($100.00) as independent consideration for Seller’s performance under this Agreement (“Independent Consideration”), which shall be retained by Seller in all instances and shall not be applied to the Purchase Price at Closing.
01222.0001/1044003.1 3
4901-5156-1995.10

2.2.4 Disputes over Deposit. In the event Escrow Holder receives inconsistent instructions relating to the Deposit, Escrow Holder shall disregard all instructions received and at its option either (i) hold the Deposit until the dispute is mutually resolved by Seller and Buyer and Escrow Holder is advised of fact in writing signed by both Seller and Buyer, or Escrow Holder is otherwise instructed by a final non-appealable judgment of a court of competent jurisdiction, or (ii) interplead the Deposit into a court of competent jurisdiction (whereupon Escrow Holder shall be released and relieved of any and all liability and obligations hereunder from and after the date of such deposit). Other than solely in connection with the Closing hereunder, in no event shall Escrow Holder disburse the Deposit (or a portion thereof, as the case may be) to one party until at least ten (10) days after Escrow Holder has sent a copy of the demand notice of such party certifying the basis for its entitlement to receive the Deposit (or a portion thereof, as the case may be) to the other party, nor thereafter, if Escrow Holder shall have received a notice of objection from the other party setting forth the basis for objection to the delivery of the Deposit (or portion thereof, as the case may be).

2.2.5 Good Funds. All funds deposited in escrow shall be in “Good Funds” which means a wire transfer of immediately available funds, cashier’s or certified check drawn on or issued by the offices of a financial institution located in the State of California.

2.3 Balance of Purchase Price. Not later than two (2) Business Days prior to the scheduled close of escrow, the balance of the Purchase Price less the Deposit and the Grant Funds (defined in Section 2.5) (if the Grant Funds were deposited directly with Escrow Holder) plus any closing costs allocated to Buyer shall be deposited into escrow in Good Funds.

2.4 Closing Distribution. At Closing, the funds due to Seller shall be paid to Seller by wire transfer of immediately available federal funds.

2.5 Financing Contingency. Buyer’s obligations under this Agreement are subject to securing the funding as follows: (i) from HCD in the amount of One Million One Hundred Thousand Dollars ($1,100,000) as set forth in the Settlement Agreement (“HCD Contribution”), and (ii) public grant funds in the sum of Three Million Three Hundred Thousand Dollars ($3,300,000) (“Grant Funds”) issued by a public or quasi-public agency (“Grant Provider”).

2.6 Failure to Timely Deliver Deposit. If Buyer fails to timely deliver the Deposit to Escrow Holder pursuant to Section 2.2, such failure shall constitute a material default by Buyer and Escrow shall not be deemed opened, and Seller may terminate this Agreement by delivering written notice of such termination to Buyer and Escrow Holder.

ARTICLE 3

INSPECTION AND TITLE REVIEW

3.1 Buyer’s Inspections.

3.1.1 Inspections, Tests and Studies. Seller and Buyer acknowledge and agree that they have entered into that certain Access Agreement dated as of January 27, 2025 (the “Access Agreement”), which Access Agreement provides for and governs (i) Buyer’s access to the Property and the diligence activities Buyer may conduct thereon, and (ii) Buyer’s receipt of certain documents and Property Records (as defined herein) related to the Property. Reference is hereby made to the Access Agreement for the terms and limitations imposed upon Seller and Buyer in connection 01222.0001/1044003.1 4
4901-5156-1995.10
therewith, all of which are incorporated into this Section 3.1.1 in full. Upon execution of this Agreement, the Access Agreement shall continue to in effect to, through, and including the Closing Date, unless this Agreement is sooner terminated by Seller or Buyer in accordance with the terms of this Agreement, in which case the Access Agreement shall automatically terminate concurrently herewith. At such time as this Agreement is terminated for any reason, Buyer agrees, promptly following Seller’s request therefor, to deliver to Seller, at no material cost to Seller, copies of any and all reports, tests, studies and test results prepared by third parties which are obtained by Buyer or prepared by or on behalf of Buyer with respect to the Property, whether obtained prior to or after the Effective Date, including those involving the structural, geologic, environmental or other condition of the Property; provided, that the provision of any such third party reports, tests, studies and test results shall be without any warranty or representation regarding the truth, completeness, or accuracy of any such reports, tests, studies and test results. Notwithstanding anything herein to the contrary, Buyer shall have the right to terminate this Agreement at any time before 5:00 PM Pacific Time on the thirtieth (30th) day following the Effective Date if Buyer disapproves the condition of the Property (the “Approval Period”).

3.1.2 Buyer’s Delivery of Information to Seller. If this Agreement is terminated for any reason, Buyer agrees to promptly deliver to Seller, at no material cost to Seller, copies of any and all reports, tests, studies and test results prepared by third parties which are obtained by Buyer or prepared by or on behalf of Buyer with respect to the Property, whether obtained prior to or after the Effective Date, including those involving the structural, geologic, environmental or other condition of the Property (collectively, “Buyer’s Information”). Seller hereby acknowledges that Buyer has not made and does not make any warranty or representation regarding the truth, completeness, or accuracy of any Buyer’s Information nor any assurance that Seller can rely on the Buyer’s Information.

3.1.3 Natural Hazard Disclosure Report. Buyer hereby acknowledges that Seller has delivered to Buyer, and Buyer is in receipt of that certain California Commercial Disclosure Report dated February 6, 2025, Order Number 250206-00037, prepared by Disclosure Source NHD (“NHD Report”) and Buyer hereby acknowledges receipt of the NHD Report. Receipt of the NHD Report does not limit Buyer’s rights under Section 3.1.1.

3.1.4 California Required Plumbing Fixtures Disclosure. Seller makes no representation as to the status of any water-conserving plumbing fixtures as required by California Civil Code Section 1101.5(a). Seller will not install any such water-conserving plumbing fixtures prior to closing and Buyer agrees that, to the extent required, it shall be solely liable for the installation of such fixtures at the Property following the Closing as Buyer’s sole cost and expense. This disclosure complies with the requirements of California Civil Code Section 1101.5(e).

3.2 Document Review. Buyer acknowledges that, because (i) Seller obtained ownership of the Property through foreclosure, and (ii) the Property is not an operating asset, Seller has limited documents and records related to the Property including any and all notices from any governmental agency regarding the Property (excluding the HCD Lawsuit (as defined in Section 6.1.3, below)) (collectively, the “Property Records”) in its possession or control. Seller agrees to provide, or cause to be provided (through electronic means or otherwise) to Steven Adams at [email protected] all Property Records to Buyer within three (3) days of the Effective Date; provided, as the majority of the Property Records were created by a previous owner of the Property, Seller makes no representation whatsoever as to the accuracy or the completeness of such Property Records—in fact, 01222.0001/1044003.1 5
4901-5156-1995.10
Buyer expressly advises Seller that some of the Property Records created by such previous owner of the Property may be unreliable or incorrect in material respects. Seller has not undertaken any significant independent investigation as to the truth, accuracy or completeness of the Property Records and Seller is providing the Property Records, or making them available to Buyer, solely as an accommodation to Buyer.

3.3 Title and Survey.

3.3.1 Title and Survey Documents. Buyer acknowledges that Seller received the Property via trustee’s deed. Prior to the execution and delivery of this Agreement, Buyer received a copy of that certain Amended Preliminary Report for the Property prepared by Orange Coast Title Company, as agent for Stewart Title Company, 1551 N. Tustin Ave., Suite 840, Santa Ana, California 92705, Attention: Steve Fernando, Email: [email protected] (“Title Company”) as Order No. 150- 2402877-06 dated as of December 30, 2024 a copy of which is attached hereto as Exhibit B (“Title Report”). Buyer may, in its discretion, obtain and deliver to the Title Company an ALTA/ACSM survey of the Real Property (“ALTA Survey”). Any title exception(s) for discrepancies, conflicts in boundary lines, shortages in area, encroachments, easements or claims of easements and other matters which would be disclosed by a physical inspection of the Real Property and the Improvements or by an ALTA/ACSM survey of the Real Property (collectively, “Survey Exceptions”) will be Permitted Exceptions unless objected to by Buyer and subsequently removed from the Title Report. The issuance and receipt of such ALTA Survey and/or such ALTA Extended Coverage shall not be a Buyer Closing Condition or delay the Closing unless such matters are required by HCD and/or the Grant Funding Source.

3.3.2 Review of Title. Within three (3) Business Days of the Effective Date, Seller shall cause the Title Company to provide Buyer an updated Title Report. Buyer shall have ten (10 Business Days to review and provide written notice to Seller of any exceptions which it does not approve which shall provide reasonable detail as to the basis for each such objection and acceptable methods to cure each such objection (“Buyer Title Notice”); provided, however, Buyer hereby disapproves (i) any exception(s) for delinquent property taxes or supplemental taxes and supplemental taxes; (ii) that certain Notice of Pendency of Action (Lis Pendens) filed on February 12, 2024 as Document No. 2024004824 the Clerk-Recorder for Monterey County, California (“Official Records”) in connection with the HCD Lawsuit (as defined in Section 6.1.3, below) (the “HCD Lis Pendens”); (iii) the mechanic’s lien recorded by Bardovi Architects, (iv) the lis pendens recorded by Bardovi Architects, (v) the mechanic’s lien recorded by American Integrated Resources, Inc.); and (vi) exceptions disapproved by Buyer under Section 3.3.3 below (collectively, “Disapproved Exceptions”). Seller shall have five (5) Business Days after receipt of Buyer’s Title Notice to agree to cure each such objection, with such response to provide reasonably detail as to Seller’s anticipated method of curing each such objection (“Seller’s Title Response”). If Seller does not agree to cure a Disapproved Exception, Buyer shall have five (5) Business Days to notify Seller in writing (“Buyer’s Final Title Notice”) whether it agrees to accept such Disapproved Exception or to terminate this Agreement. Pursuant to the Settlement Agreement, HCD shall provide to Escrow Holder a release of the HCD Lis Pendens to be recorded at Closing.

3.3.3 Title Updates Following Final Approval Deadline. In the event the Title Company amends or updates the Title Report after the Effective Date (each, a “Title Report Update”), Seller shall promptly deliver or cause Title Company to deliver a copy of such Title Report Update to Buyer and Buyer may submit to Seller in writing (“Buyer’s Updated Title Objection 01222.0001/1044003.1 6
4901-5156-1995.10
Notice”) any objections to matters of title first raised by the Title Company in such Title Report Update and not previously known to Buyer or otherwise caused by Buyer (collectively, “Objections”) within four (4) Business Days after its receipt of such Title Report Update (each, a “Title Update Review Period”). Seller shall have one (1) Business Day following receipt of such Buyer’s Updated Title Objection Notice to deliver written notice (“Seller’s Updated Title Notice”) to Buyer as to whether Seller is willing to cure such Objections and if Seller elects to cure such Objections, Seller shall have the right to extend the Closing Date in order to effect such cure. If Seller fails to deliver such Seller’s Updated Title Notice, Seller shall be deemed to have notified Buyer that Seller is not willing to cure the Objections. If Seller is unable or unwilling or is deemed to be unwilling to cure all of the Objections, Buyer shall (as its sole and exclusive remedy) have one (1) Business Day following Buyer’s receipt of Seller’s Updated Title Notice (or, if no Seller’s Updated Title Notice is delivered, three (3) Business Days after the expiration of the period during which Seller was to deliver Seller’s Updated Title Notice) to terminate this Agreement in writing. Any Objections shall be deemed part of the Disapproved Exceptions.

3.3.4 Use of Purchase Price to Discharge Liens or Bond Over Same. At the Closing, Seller may, at Seller’s option, elect to pay off any liens with funds due to Seller at Closing to cause the removal from the public record by a statutory bond any such monetary exception which is a Disapproved Exception.

3.3.5 Title Policy. The Willingness of the Title Company, as agent for Stewart Title Company, to issue, upon the condition of the payment of the Title Company’s premium and the delivery of the documents referred to in Section 4.5 below, an ALTA standard Owner’s Policy of Title Insurance (referred to herein as the “Title Policy”) insuring Buyer’s interest as of the Closing in the Real Property in the amount of the Purchase Price, subject only to the title policy form’s standard conditions, exclusions from coverage and the Permitted Exceptions (as defined below), shall be a Buyer Closing Condition.

3.3.6 Permitted Exceptions. As used in this Agreement, the term “Permitted Exceptions” shall mean (a) all matters disclosed in the Title Report (including a general survey exceptions) or in any update, amendment, or change thereto, that (i) are not Disapproved Exceptions, or (ii) Seller has not expressly agreed in writing to cure; (b) the Use Restriction (as defined in Section

3.6 hereof); (c) non-delinquent real estate taxes and assessments; (d) all matters caused by Buyer or arising through Buyer; and (d) all other matters existing to which Buyer has consented in writing.

3.3.7. Buyer’s Right to Designate Vestee. Buyer shall have the right to require the vestee in the Grant Deed by the Housing Authority of the County of Monterey (“HACM”).

Accordingly, the Title Policy will be issued showing HACM as the insured under the Title Policy.

3.4 Inspection Obligations.

3.4.1 Buyer’s Responsibilities/Indemnity. Buyer’s obligations with respect to its inspections are more particularly set forth in the Access Agreement. Notwithstanding anything herein or in the Access Agreement to the contrary, Buyer shall indemnify, defend with counsel approved by Seller, protect and hold Seller and Seller’s respective agents, advisors, employees and contractors harmless from and against any and all liens, claims, losses, liabilities, damages, costs, causes of action and expenses (including reasonable attorneys’ fees and court costs) (collectively, “Claims”) arising out of or otherwise related to (a) Buyer’s investigations, inspections, tests and studies of the Property, 01222.0001/1044003.1 7
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and (b) any violation by Buyer or Buyer’s agents, consultants, contractors or representatives of the provisions of this Agreement or the Access Agreement; excluding, however, any Claims to the extent arising from the negligence or willful misconduct of Seller or any of Seller’s contractors, employees, representatives or agents. Notwithstanding the foregoing, such indemnification obligations shall not apply or extend to any Claims arising out of any mere discovery by Buyer or any of Buyer’s agents, consultants, contractors or representatives of any pre-existing adverse conditions at the Property, except to the extent a condition or matter on the Property (of which Buyer is aware or is identified in the Property Records) is exacerbated by the acts or omissions of Buyer or its agents, employees, or consultants. Notwithstanding anything herein or in the Access Agreement to the contrary, Buyer’s indemnity set forth in this Section 3.4.1 shall survive the Closing or earlier termination of this Agreement.

3.5 Cancellation of Service Contracts. On or before the Closing Date, Seller shall terminate any service, supply, maintenance, repair, construction and management contracts to which Seller is a party that relates to the Property (collectively, the “Service Contracts”); provided, that Buyer may advise Seller that it desires to assume certain Service Contracts from Seller, in which case, Seller will make reasonable efforts to transition any such Service Contracts to Buyer at Closing pursuant to the Bill of Sale as defined in Section 4.5.2. After Closing Seller shall remain solely liable under any Service Contracts which Buyer has not requested be assigned to Buyer.

3.6 Use Restriction. Buyer acknowledges and agrees that Seller is agreeing to sell the Property to Buyer on the express condition that, at Closing through Escrow, Seller and Buyer will record (or cause to be recorded) a Regulatory Agreement and Declaration of Restrictive Covenants substantially in the form attached to the Settlement Agreement (the “Use Restriction”) in the Official Records, immediately following recordation of the Deed, without intervening lien.

ARTICLE 4

ESCROW AND CLOSING

4.1 Escrow. Buyer and Seller shall open an escrow (“Escrow”) with Escrow Holder (as defined in Section 2.2.1) for the consummation of the transaction contemplated by this Agreement by delivering this Agreement executed by Buyer and Seller to Escrow Holder. Escrow shall only be responsible for the requirements in Article I, Article 2, Sections 3.1.3 and 3.3, Articles 4, 5 and 12.

Upon receipt of this Agreement executed by Buyer and Seller, Escrow Holder shall execute and date the acceptance Joinder attached hereto solely in order to evidence Escrow Holder’s agreement to act as Escrow Holder in accordance with the terms and provisions of this Agreement. This Agreement, together with such supplementary or further escrow instructions as Buyer and Seller shall mutually provide to Escrow Holder by written agreement, shall constitute the instructions to Escrow Holder for the Escrow. Buyer and Seller also agree to execute, if necessary, Escrow Holder’s standard general provisions but only to the extent such standard or pre-printed escrow instructions or general provisions are consistent with this Agreement (including Escrow Holder’s duties contained herein) and are reasonably acceptable to Seller and Buyer.

4.2 Close of Escrow. As used in this Agreement, the “Closing” shall mean the consummation of the purchase and sale transaction contemplated by this Agreement through Escrow.

The Closing shall occur after satisfaction of all conditions precedent as set forth in Sections 4.3 and

4.4 but not later than fifteen (15) days following expiration of the Approval Period (“Closing Date”), or any other date upon which Seller and Buyer mutually agree in writing, each in their sole discretion; 01222.0001/1044003.1 8
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provided, (i) Seller elects to extend the Closing Date pursuant to Section 4.3; or (ii) Seller shall not unreasonably withhold consent to an extension of the Closing Date of not more than thirty (30) days if reasonably required for Buyer to obtain the financing as set forth in Section 2.5 and consistent with the Settlement Agreement.

4.3 Conditions Precedent to the Closing for the Benefit of Buyer. The Closing and Buyer’s obligation to consummate the transaction contemplated by this Agreement are subject to the timely satisfaction or written waiver by the respective dates designated below of the following conditions precedent for Buyer’s benefit set forth below in this Section 4.3. The conditions precedent set forth below in this Section 4.3 are referred to collectively as the “Buyer Closing Conditions” and individually as a “Buyer Closing Condition.” The Buyer Closing Conditions must be satisfied or otherwise waived by Buyer in part or in whole by Buyer no later than the Closing Date.

4.3.1 Seller’s Deliveries. On or before the Closing Date, Seller shall have delivered to Escrow Holder the documents described in Section 4.5 below.

4.3.2 Funding. Buyer has received all funding as specified in Section 2.5 with such funding deposited into Escrow.

4.3.3 Use Restriction. The Deed and the Use Restriction have been executed, delivered into Escrow, and are in a position to be recorded in the Official Records by the Escrow Holder at the Closing. The Use Restriction will be recorded immediately following the recordation of the Deed, without intervening lien.

4.3.4 Side Agreement. Three (3) copies of that certain Side Agreement by and among HCD, Buyer as “King City”, and HACM, as contemplated by the Settlement Agreement, executed by each of HCD, Buyer and HACM, shall be deposited into Escrow.

4.3.5 Lis Pendens Removal. Escrow shall have received a release of the lis pendens filed under the HCD Lawsuit (as defined in Section 6.1.4) which was recorded on February 12, 2024 as Instrument No. 2024-4824 in the Official Records of Monterey County which can be recorded at Closing.

4.3.6 Property Condition. Buyer has approved the condition of the Property pursuant to Section 3.1.

4.3.7 Representations and Warranties. All representations and warranties of Seller contained in Section 6.1 of this Agreement shall be true and correct in all material respects as of the date made and as of the Closing Date with the same effect as if those representations and warranties were made at and as of the Closing Date.

4.3.8 Covenants. As of the Closing Date, Seller shall not be in material default in the performance of any material covenant or agreement to be performed by Seller under this Agreement or the Settlement Agreement.

4.3.9 Title Policy. As of the Closing Date, the Title Company shall be irrevocably committed to issue the Title Policy to Buyer (or vestee as applicable) as provided in Section 3.3.4 above and to provide any title insurance policy as may be required by HCD or the Grant Provider. 01222.0001/1044003.1 9
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4.3.10 DOF Approval. The California Department of Finance (“DOF”) has issued its written approval to HCD as required by the Settlement Agreement.

In the event any Buyer Closing Condition is not satisfied, the Closing Date shall be extended for up to fifteen (15) Business Days after the then scheduled Closing Date at Seller’s or Buyer’s option to provide Seller an opportunity to cure the same. If the Closing Date is not so extended, or if such Buyer Closing Condition has not been satisfied after such extension, Buyer or Seller may notify the other party in writing that it elects to terminate this Agreement, whereupon this Agreement shall terminate, the Deposit shall be returned to Buyer and thereafter neither party shall have any further rights or obligations under this Agreement, except for those obligations that expressly survive the termination of this Agreement. Buyer may waive any Buyer Closing Condition and proceed to Closing at Buyer’s option. The election by Buyer to proceed with the Closing and the disbursement of the Purchase Price shall be deemed Buyer’s waiver of any Buyer Closing Condition to the extent any such Buyer Closing Condition has not previously been expressly satisfied or waived.

4.4 Conditions Precedent to the Closing for the Benefit of Seller. The Closing and Seller’s obligations with respect to the transaction contemplated by this Agreement are subject to the timely satisfaction or written waiver by the respective dates designated below of the following conditions precedent for Seller’s benefit set forth below in this Section 4.4. The conditions precedent set forth below in this Section 4.4 are referred to collectively as the “Seller Conditions Precedent” and individually as a “Seller Condition Precedent.”

4.4.1 Buyer’s Deliveries. Buyer shall have delivered to Escrow Holder all of the funds and documents as provided in Section 2.2, Section 2.3 and in Section 4.6 of this Agreement.

4.4.2 Representations and Warranties. All representations and warranties of Buyer contained in this Agreement shall be true and correct in all material respects as of the date made and as of the Closing Date with the same effect as if those representations and warranties were made at and as of the Closing Date.

4.4.3 Covenants. As of the Closing Date, Buyer shall not be in material default in the performance of any covenant or agreement to be performed by Buyer under this Agreement or the Settlement Agreement.

4.5 Seller’s Deliveries. No later than the Business Day immediately preceding the Closing Date, Seller shall deliver to Escrow Holder the following:

4.5.1 Deed. A grant deed in the form attached as Exhibit C hereto for the Real Property, executed and acknowledged by Seller conveying Seller’s interest in the Real Property to Buyer or HACM, as applicable (“Deed”).

4.5.2 Bill of Sale and General Assignment. Two (2) original executed counterparts of the bill of sale and general assignment in the form attached as Exhibit D hereto (“Bill of Sale”), executed by Seller.

4.5.3 Non-Foreign Certificate. A signed certification from Seller as required by the Foreign Investors Real Property Tax Act, as amended, in the form attached as Exhibit E hereto (“FIRPTA Certificate”) executed by Seller.
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4.5.4 Form 593. A California Form 593 confirming Seller’s exemption from withholding executed by Seller.

4.5.5 Authority. Evidence of the existence, organization and authority of Seller and of the authority of the person executing documents on behalf of Seller reasonably satisfactory to the Title Company.

4.5.6 Title Affidavit. Seller’s customary “Owner’s Affidavit” with Title Company and such further instruments as may be reasonably required by Title Company to consummate the transactions hereunder, in form and substance satisfactory to Seller, duly executed by Seller.

4.5.7 Other Documents. Such other documents as may be reasonably required by Buyer to consummate the transactions contemplated herein (provided, however, no such additional document shall expand any obligation, covenant, representation or warranty of Seller or result in any new or additional obligation, covenant, representation or warranty of Seller under this Agreement beyond those expressly set forth in this Agreement).

4.6 Buyer’s Deliveries. No later than one (1) Business Day prior to the Closing Date, Buyer shall deliver to Escrow Holder the following:

4.6.1 Funds. All funds required to consummate the Escrow including the Purchase Price (net of the Grant Funds if the Grant Funds were deposited directly with Escrow Holder), plus all net prorations, closing costs and other funds required to be paid or provided by Buyer under this Agreement less the amount of the Deposit previously delivered to Escrow (all monies Buyer is required to deliver shall be delivered by wire transfer of immediately available funds to the account designated by Escrow Holder).

4.6.2 Bill of Sale and General Assignment. Two (2) original executed counterparts of the Bill of Sale executed by Buyer.

4.6.3 Authority. Evidence of the existence, organization and authority of Buyer and of the authority of the persons executing documents on behalf of Buyer reasonably satisfactory to the Title Company.

4.6.4 PCOR. A Preliminary Change of Ownership Statement shall be completed by Buyer (or the title nominee) in the manner required in Monterey County.

4.6.5 Certificate of Acceptance. A certificate of acceptance shall be executed by Buyer or the Authority as applicable to be attached to the Grant Deed.

4.6.6 Use Restriction. A fully executed original of the Use Restriction in recordable form for recordation at Closing as contemplated herein.

4.6.7 Other Documents. Such other documents as may be reasonably required to consummate this transaction.

4.7 Delivery of Possession. At Closing, Seller shall deliver possession of the Property to Buyer free from any occupants, tenants or trespassers and to deliver all Personal Property and any 01222.0001/1044003.1 11
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materials, items or any other portion of the Property (e.g., keys, equipment manuals, on-site equipment, etc.) to Buyer as of the Closing.

4.8 Closing Costs.

4.8.1 Seller’s Closing Costs. Seller shall pay (a) one-half (½) of the premium for the Title Policy ALTA standard coverage in amount of the Purchase Price, (b) the cost of any endorsements to the Title Policy requested by Seller and intended to address the Disapproved Exceptions or any other title objection(s) that Seller must cure pursuant to Section 3.3.3 hereof, (c) all legal and professional fees and fees of other consultants engaged by Seller, (d) one-half (½) of all Escrow fees and Escrow costs related to the purchase and sale of the Property (as opposed to any Escrow fees and costs related to any Buyer’s financing, all of which shall be paid by Buyer), (e) all recording fees related to Disapproved Exceptions; and (f) all county and city documentary fees and other transfer taxes assessed due to the recording of the Deed. NOTE: Transfer taxes are not applicable pursuant to R&T Code Section 11922.

4.8.2 Buyer’s Closing Costs. Buyer shall pay (a) one-half (½) of the premium for the Title Policy ALTA standard coverage in amount of the Purchase Price plusthe additional premium for an ALTA extended coverage owner’s title policy if requested by Buyer to the extent more than the Title Policy, (b) the cost of any endorsements to the Title Policy requested by Buyer except endorsements to the Title Policy requested by Seller and intended to address the Disapproved Exceptions or any other title objection(s) that Seller must cure pursuant to Section 3.3.3 hereof, (c) all legal and professional fees and fees of other consultants engaged by Buyer, (d) any and all additional Escrow fees and costs and any other costs and expenses whatsoever directly related to the Grants, if applicable; (e) one-half (½) of all Escrow fees and Escrow costs related to the purchase and sale of the Property (as opposed to any Escrow fees and costs related to any matters which Seller is obligated to remove from title), and (f) all costs for title insurance premiums, recording fees and other costs and expenses of the Grants, if applicable. NOTE: Buyer is exempt from recording fees for all documents which are recorded for the benefit of Buyer such as the Grant Deed pursuant to Govt Code Section 6103.

4.9 Real Estate Commissions. Seller represents and warrants to Buyer, and Buyer represents and warrants to Seller, that no broker or finder has been engaged by it, respectively, in connection with any of the transactions contemplated by this Agreement, or to its knowledge is in any way connected with any of such transactions. The provisions of this Section 4.9 shall survive the Closing. Seller and Buyer hereby agree to indemnify, defend and hold each other free and harmless from and against any and all commissions or other claims any broker(s) engaged by the indemnifying Party may assert in connection with the transactions contemplated by this Agreement.

ARTICLE 5

PRORATIONS

5.1 General. The items set forth below in this Article 5 are to be adjusted and prorated between Seller and Buyer as of 12:01 a.m. on the Closing Date (“Adjustment Time”) such that Buyer shall be deemed to own the Property, and, therefore, responsible for any expenses, for the entire day upon which the Closing occurs.
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5.2 Real Estate Taxes. Seller shall be responsible for the cost of any outstanding real estate/property taxes and all assessments relating in any way to the Property attributable to the time prior to the date on which the Closing shall occur and, thereafter, Buyer shall be responsible for all property taxes from and after the Closing. As such, real estate/property taxes and all assessments relating in any way to the Property will be prorated as of the Closing. The provisions of this Section

5.2 shall survive the Closing.

5.3 Excise, Transfer and Sales Taxes. Seller shall be responsible for the payment of all excise, transfer and use taxes imposed with respect to the conveyance of any personal property contemplated by this Agreement, if any. The provisions of this Section 5.3 shall survive the Closing.

5.4 Operating Expenses. As the Improvements are vacant, Buyer and Seller do not anticipate a need to prorate any utilities and/or other costs and expenses with respect to the operation and maintenance of the Property (“Operating Expenses”).

5.5 Utilities. Upon Closing all utilities shall be transferred to Buyer and Seller shall be solely responsible for all utility bills prior to Closing. After Closing, the parties shall cooperate with adjusting payments if applicable.

ARTICLE 6

REPRESENTATIONS AND WARRANTIES

6.1 Representations and Warranties of Seller. Seller represents and warrants to Buyer that the following matters are true and correct as of the Effective Date. Notwithstanding anything in the Agreement to the contrary, Seller is not making any representations or warranties, express or implied, with respect to the Property except as may be expressly and explicitly be provided in this Section 6.1 and then subject to all limitations set forth in this Section 6.1.

6.1.1 Valid Organization; Legal Power; Duly Authorized; Requisite Action.

Seller is a limited liability company duly organized and validly existing under the laws of the State of Delaware and authorized to conduct business in the State of California and is authorized to own its property and conduct its business in each jurisdiction where it is required to be so authorized. Seller has the legal power, right and authority to enter into this Agreement and the instruments referenced herein, and to consummate the transaction contemplated hereby. This Agreement is, and all the documents executed by Seller which are to be delivered to Buyer at the Closing will be, duly authorized, executed, and delivered by Seller, and are and will be legal, valid, and binding obligations of Seller (except as limited by applicable bankruptcy, insolvency, moratorium and other principles relating to or limiting the right of contracting parties generally). All requisite action (corporate, trust, partnership or otherwise) has been taken by Seller in connection with entering into this Agreement, the instruments referenced herein, and the consummation of the transaction contemplated hereby. No consent of any partner, shareholder, trustee, trustor, beneficiary, creditor, investor, judicial or administrative body, governmental authority or other party is required for Seller to consummate the transaction contemplated by this Agreement, which has not been obtained. The individuals executing this Agreement and the instruments referenced herein on behalf of Seller have the legal power, right, and actual authority to bind Seller to the terms and conditions hereof and thereof. 01222.0001/1044003.1 13
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6.1.2 Vacant Building. The Improvements are vacant and, to Seller’s knowledge, not subject to any leases and/or occupancy agreements for any space therein. Seller is not party to any leases and/or occupancy agreements for any space therein.

6.1.3 Documents. Seller has provided to Buyer all material and relevant nonprivileged Property Records in its possession or control and, to the extent such Property Records were procured, commissioned, or created by Seller or persons or professionals under Seller’s control, such Property Records are, to Seller’s knowledge, true, correct and complete.

6.1.4 Litigation. To Seller’s knowledge, other than (i) the lawsuit filed by HCD as Case No. 24STCV00629 filed in the Superior Court of the State of California, County of Los Angeles, against Shangri-La Industries LLC, et al. (“HCD Lawsuit”), (ii) certain actions of Buyer in furtherance of a taking of the Property by eminent domain, and (iii) any other matters disclosed on the Title Report or any Title Report Update, there is no pending or threatened action or proceeding pending against Seller or the Real Property that could reasonably be expected to prevent Seller from consummating the transactions that are the subject of this Agreement.

6.1.5 Prohibited Persons. Seller is not acting directly for or on behalf of any person named by the United States Treasury Department as a Specifically Designated National and Blocked Person, or for or on behalf of any person designated in Executive Order 13224 as a person who commits, threatens to commit, or supports terrorism. Seller is not engaged in the transaction contemplated by this Agreement directly or indirectly on behalf of, or facilitating such transaction directly or indirectly on behalf of, any such person.

6.1.6 Condemnation Proceedings. To Seller’s knowledge, Seller has not received written notice from a governmental authority of any condemnation or eminent domain proceedings or proceedings in the nature or in lieu thereof affecting the Property; provided, Buyer has, through its counsel, made overtures that a condemnation or eminent domain proceeding has been considered and, to Seller’s knowledge, Buyer may have taken steps in advancement thereof.

6.1.7 No Bankruptcy. There has not occurred at any time the making by Seller of any general assignment for the benefit of creditors, or the filing by Seller or against Seller of a petition to have Seller adjudged a bankrupt or of a petition for reorganization under any law relating to bankruptcy, or the appointment of a trustee or receiver to take possession of substantially all of the interest of Seller in the Property, or the attachment, execution or judicial seizure of substantially all the assets of Seller or the interests of Seller in the Property or any legal proceeding in which Seller is adjudicated as being, or stipulates to being, insolvent or unable to pay its debts as they come due.

6.2 Definition of Seller’s Knowledge. For purposes of this Agreement, whenever the phrase “to Seller’s knowledge” or words of similar import are used, they shall be deemed to refer to the present actual (as opposed to constructive or imputed) knowledge of LK Asset Advisors, Attn:

Edwin W. Leslie-Kubat, Email: [email protected] without any duty of investigation or inquiry whatsoever by such person. Buyer acknowledges that the foregoing individual named above is named solely for the purpose of defining and narrowing the scope of Seller’s knowledge and not for the purpose of imposing any liability on or creating any duties running from such individual to Buyer. Buyer covenants that Buyer will bring no action of any kind against such individual or any officer, director, member or shareholder of Seller arising out of the representations and warranties made by Seller in Section 6.1 above.
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6.3 Survival Period. The representations and warranties of Seller set forth in Section 6.1 above shall be deemed made as of the Effective Date and shall survive for one (1) year following the Closing (“Warranty Expiration Date”) and shall automatically expire upon the Warranty Expiration Date unless (i) Buyer notifies Seller in writing of each alleged breach and stating in reasonable detail the factual basis for such breach prior to the expiration of the Warranty Expiration Period and (ii) Buyer commences suit against Seller with respect to any alleged breach within sixty (60) calendar days after the Warranty Expiration Date (and, in the event any such suit is timely commenced by Buyer against Seller, shall survive thereafter only insofar as the subject matter of the alleged breach specified in such suit is concerned). If suit is not timely commenced by Buyer prior to the Warranty Expiration Date, then Seller’s representations and warranties shall thereafter be void and of no force or effect.

6.4 Intentionally Deleted.

6.5 Subsequent Changes. If Seller becomes aware of any fact or circumstance which would materially and adversely change one of its foregoing representations or warranties, then Seller will give notice of such changed fact or circumstance to Buyer, provided that, notwithstanding anything to the contrary contained in this Agreement and for all purposes hereunder a representation by Seller which is true and accurate in all material respects as of the Effective Date and thereafter becomes untrue or inaccurate in any material respect shall not be deemed to be a misrepresentation by Seller or constitute a basis for Buyer to terminate this Agreement unless such representation became untrue solely by reason of Seller’s default of its covenants under this Agreement pertaining to the period between the Effective Date and Closing (“Seller Default Caused Misrepresentation Qualification”). Upon the City Manager of Buyer becoming aware or having knowledge of, by any means, of any fact or circumstance which evidences a material breach by Seller of its representations or warranties contained herein or which would otherwise constitute a material breach thereof by Seller, which material breach is not cured by the Closing Date, Buyer, then, subject in all respects to the Seller Default Caused Misrepresentation Qualification, as its sole remedy, shall have the option of (i) waiving the breach of warranty or change, and proceeding with the Close of Escrow, or (ii) terminating this Agreement, in which event the Deposit and any other funds deposited by Buyer into the Escrow shall be returned to Buyer, and any other costs to be paid by Buyer in accordance with the terms of Section Error! Reference source not found. of this Agreement. Any such election shall b e made by Buyer not later than three (3) Business Days (but no later than the Closing Date) from Buyer becoming aware of such fact. If Buyer does not so elect to terminate this Agreement pursuant to this Section 6.5, then Buyer shall be deemed to have elected to waive its rights to terminate this Agreement pursuant to this Section 6.5, elected to acquire the Property on the terms set forth in this Agreement, and waived all remedies at law or in equity with respect to any representations or warranties resulting from the facts or circumstances disclosed by Seller in its notice to Buyer.

6.6 Seller Indemnity. Subject to Section 6.3, Seller shall, effective from and after the Closing Date, as the sole and exclusive obligation of Seller with respect to the representations and warranties of Seller set forth in Section 6.1 above, indemnify, defend and hold Buyer harmless from and against any actual, direct damages (including reasonable out-of-pocket attorneys’ fees and other legal costs but specifically excluding any consequential, speculative or punitive damages) which are incurred by Buyer after the Closing and prior to the Warranty Expiration Date and which Buyer can prove would not have been incurred but for any inaccuracy as of the Closing Date (but subject in all respects to Seller Default Caused Misrepresentation Qualification) in the representations and warranties of Seller set forth in the Section 6.1 above subject to Section 6.5 and Section 6.6. 01222.0001/1044003.1 15
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6.7 Representations and Warranties of Buyer. Buyer represents and warrants to Seller that the following matters are true and correct as of the Effective Date and will also be true and correct as of the Closing:

6.7.1 Valid Organization; Legal Power; Duly Authorized; Requisite Action.

Buyer is a California municipal corporation, duly organized and validly existing under the laws of the State of California and is authorized to own its property and conduct its business in each jurisdiction where it is required to be so authorized. Buyer has the legal power, right and authority to enter into this Agreement and the instruments referenced herein, and to consummate the transaction contemplated hereby. This Agreement is, and all the documents executed by Buyer which are to be delivered to Seller at the Closing will be, duly authorized, executed, and delivered by Buyer, and is and will be legal, valid, and binding obligations of Buyer (except as may be limited by applicable bankruptcy, insolvency, moratorium and other principles relating to or limiting the right of contracting parties generally).

ARTICLE 7

COVENANTS

7.1 Insurance. Until the Closing, Seller shall keep the Property insured against fire, vandalism and other loss, damage and destruction with the substantially same coverage, policy limits and deductible amounts as are currently maintained by Seller.

7.2 Operation of Property. Until the Closing, Seller shall maintain the Property in a safe and secure manner.

7.3 Capital Improvements. From and after the Effective Date, Seller shall not undertake, and shall not be obligated to undertake, any capital improvements or material alterations or renovations to the Property without Buyer’s consent.

7.4 New Contracts. From and after the Effective Date, Seller shall not enter into any new contract or other agreement, affecting the Property, which would survive the Closing and which would be binding upon Buyer, without the prior written consent of Buyer.

7.5 Further Assurances. From and after the Closing, the parties shall work in a reasonably diligent manner to cause the dismissal of Buyer and Seller from the HCD Lawsuit. The provisions of this Section 7.5 shall survive the Closing.

ARTICLE 8
“AS-IS” SALE

8.1 Disclaimer of Representations and Warranties by Seller. EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES EXPRESSLY MADE BY SELLER IN SECTION 6.1

OF THIS AGREEMENT, IT IS UNDERSTOOD AND AGREED THAT NEITHER SELLER NOR ANY OF SELLER’S AGENTS, EMPLOYEES OR CONTRACTORS HAS MADE AND IS NOT

NOW MAKING, AND BUYER HAS NOT RELIED UPON AND WILL NOT RELY UPON (DIRECTLY OR INDIRECTLY), ANY WARRANTIES OR REPRESENTATIONS OF ANY

KIND OR CHARACTER, EXPRESS OR IMPLIED, ORAL OR WRITTEN, PAST, PRESENT OR

FUTURE, WITH RESPECT TO THE PROPERTY, INCLUDING WARRANTIES OR 01222.0001/1044003.1 16
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REPRESENTATIONS AS TO HABITABILITY, MERCHANTABILITY OR FITNESS FOR A

PARTICULAR PURPOSE OR AS TO THE PHYSICAL, STRUCTURAL OR ENVIRONMENTAL CONDITION OF THE PROPERTY OR ITS COMPLIANCE WITH LAWS. BUYER FURTHER

ACKNOWLEDGES AND AGREES THAT, HAVING BEEN GIVEN THE OPPORTUNITY TO

INSPECT THE PROPERTY WITH QUALIFIED PERSONNEL AND REVIEW INFORMATION

AND DOCUMENTATION AFFECTING THE PROPERTY, BUYER IS RELYING SOLELY ON

ITS OWN INVESTIGATION OF THE PROPERTY AND REVIEW OF SUCH INFORMATION

AND DOCUMENTATION, AND NOT ON ANY INFORMATION PROVIDED OR TO BE PROVIDED BY SELLER. BUYER FURTHER ACKNOWLEDGES AND AGREES THAT ANY

INFORMATION MADE AVAILABLE TO BUYER OR PROVIDED OR TO BE PROVIDED BY

OR ON BEHALF OF SELLER WITH RESPECT TO THE PROPERTY WAS OBTAINED FROM

A VARIETY OF SOURCES AND THAT SELLER HAS NOT MADE ANY INDEPENDENT

INVESTIGATION OR VERIFICATION OF SUCH INFORMATION AND MAKES NO

REPRESENTATIONS AS TO THE ACCURACY OR COMPLETENESS OF SUCH INFORMATION. BUYER ACKNOWLEDGES THAT MANY OF THE PROPERTY RECORDS

WERE PREPARED BY OR OBTAINED FROM A PRIOR OWNER OF THE PROPERTY WHO MAY HAVE COMMITTED FRAUD. BUYER AGREES TO FULLY AND IRREVOCABLY

RELEASE SELLER FROM ANY AND ALL CLAIMS THAT BUYER MAY NOW HAVE OR

HEREAFTER ACQUIRE AGAINST SELLER FOR ANY COSTS, LOSS, LIABILITY, DAMAGE,

EXPENSE, DEMAND, ACTION OR CAUSE OF ACTION ARISING FROM SUCH

INFORMATION OR DOCUMENTATION, EXCEPT TO THE EXTENT ARISING OUT OF (I) A

BREACH BY SELLER OF A REPRESENTATION OR WARRANTY MADE HEREIN, (II) A

BREACH BY SELLER OF THIS AGREEMENT, ANY CLAIM ARISING FROM ANY ACT OF

FRAUD BY SELLER, OR (III) ANY THIRD-PARTY CLAIM FOR PERSONAL OR PROPERTY

DAMAGE ARISING PRIOR TO THE CLOSING AND NOT RESULTING FROM ACTS OR

OMISSIONS OF BUYER OR ANY OF ITS AGENTS TAKEN IN BREACH OF THIS AGREEMENT. BUYER SHALL ACCEPT THE PROPERTY “AS IS, WHERE IS,” WITH ALL FAULTS AND DEFECTS (LATENT AND APPARENT).

8.2 Buyer’s Release of Seller.

8.2.1 Seller Released From Liability. Subject only to Section 6.7 above, and those obligations of Seller hereunder which this Agreement specifically provides shall survive the Closing, Buyer, for itself and each of its employees, elected and appointed officials, representatives, agents, advisors, attorneys acting on Seller’s behalf (each, a “Buyer Party”), hereby waives any right to recover from and fully and irrevocably releases Seller and Seller’s employees, officers, directors, representatives, agents, advisors, attorneys, affiliates, parent, subsidiaries, successors and assigns, and all persons, firms, corporations and organizations acting on Seller’s behalf (“Seller Released Parties”) from any and all claims, responsibility and/or liability that Buyer or any other Buyer Party may now have or hereafter acquire against any of the Seller Released Parties for any costs, loss, liability, damage, expenses, demand, action or cause of action arising from or related in any way to the condition of the Property. This release includes claims of which Buyer or any other Buyer Party, is presently unaware or which Buyer does not presently suspect to exist which, if known by Buyer or any other Buyer Party would materially affect Buyer’s or any other Buyer Party’s release of the Seller Released Parties; provided, however, in no event shall the foregoing release by Buyer or any other Buyer Party include any claims relating to or arising from Seller’s fraud, negligence or willful misconduct. Buyer specifically waives the provision of any statute or principle of law, which provides otherwise with respect to the condition of the Property. 01222.0001/1044003.1 17
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BUYER EXPRESSLY WAIVES THE BENEFITS OF SECTION 1542 OF THE CALIFORNIA CIVIL CODE, WHICH PROVIDES AS FOLLOWS:
“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS

THAT THE CREDITOR OR RELEASING PARTY DOES NOT

KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT

THE TIME OF EXECUTING THE RELEASE AND THAT, IF

KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY

AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR
OR RELEASED PARTY.”
_____________ Buyer’s Initials

8.2.2 Claims Under Environmental Laws. As used herein, (a) “Environmental Laws” means the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C. Section 9601 et seq.), as amended, or the Resource Conservation and Recovery Act (42 U.S.C. Section 6902 et seq.), as amended, the applicable provisions of the California Public Health and Safety Code, as amended, or any similar federal, state or local law, ordinance, rule or regulation applicable to the Property, including any principles of common law or common law theories; and (b) “Hazardous Substances” means any hazardous, toxic or dangerous waste, substance or material, any pollutant or contaminant, or any substance which is toxic, explosive, corrosive, flammable, infectious, radioactive, carcinogenic, mutagenic or otherwise hazardous, or any substance which contains gasoline, diesel fuel or other petroleum hydrocarbons, polychlorinated biphenyls (PCBs), radon gas, urea formaldehyde or asbestos; and (c) “Unknown Environmental Liabilities” means future obligations to remediate Hazardous Substances which are located on or in any of the Property prior to the Closing, whether or not such Hazardous Substance is disclosed by any of the Property Records or the Buyer’s Information or any other source prior to the Closing.

8.3 Survival. The foregoing provisions of this Article 8, including the waivers and releases by Buyer, shall survive the Closing and the recordation of the Deed, and shall not be deemed merged into the Deed or other documents and instruments delivered at Closing.

ARTICLE 9

REMEDIES

9.1 Liquidated Damages; Seller’s Remedies. IN THE EVENT THE CLOSING DOES NOT OCCUR DUE TO BUYER’S BREACH, BUYER AND SELLER AGREE THAT IT WOULD

BE IMPRACTICAL AND EXTREMELY DIFFICULT TO ESTIMATE THE DAMAGES WHICH SELLER MAY SUFFER AS A RESULT THEREOF. THEREFORE, BUYER AND SELLER

HEREBY AGREE THAT A REASONABLE ESTIMATE OF THE TOTAL NET DETRIMENT

THAT SELLER WOULD SUFFER IF BUYER BREACHES THIS AGREEMENT AND FAILS TO

COMPLETE THE PURCHASE OF THE PROPERTY IS AND SHALL, EXCEPT AS

OTHERWISE PROVIDED HEREIN INCLUDING ANY INDEMNITY OBLIGATIONS, BE, AS SELLER’S SOLE AND EXCLUSIVE REMEDY (WHETHER AT LAW OR IN EQUITY), AND

AS THE FULL, AGREED AND LIQUIDATED DAMAGES FOR SUCH BREACH, AN AMOUNT EQUAL TO THE DEPOSIT. IN THE EVENT OF ANY SUCH BREACH BY BUYER, UNLESS

OTHERWISE SPECIFIED, UPON NOTICE FROM SELLER THIS AGREEMENT SHALL BE

TERMINATED AND NEITHER PARTY SHALL HAVE ANY FURTHER RIGHTS OR 01222.0001/1044003.1 18
4901-5156-1995.10

OBLIGATIONS HEREUNDER EXCEPT FOR ANY INDEMNITY OBLIGATIONS SPECIFIED

HEREIN, THE PARTIES ACKNOWLEDGE THAT THE PAYMENT OF SUCH LIQUIDATED

DAMAGES IS NOT INTENDED AS A FORFEITURE OR PENALTY AND IS NOT INTENDED TO CONSTITUTE LIQUIDATED DAMAGES TO SELLER.

Buyer Initials ______________ Seller Initials __________

9.2 Buyer’s Remedies. Upon Seller’s breach of this Agreement, Buyer shall have all remedies available at law or equity; provided, in no event shall Buyer be entitled to special, consequential, and/or punitive damages except for Seller’s fraud.

ARTICLE 10

CONDEMNATION

10.1 If, prior to Closing, any governmental authority or other entity having condemnation authority shall institute an eminent domain proceeding or take any steps preliminary thereto (including the giving of any direct or indirect notice of intent to institute such proceedings) with regard to a Material Portion of the Property (as defined below), and the same is not dismissed prior to the Closing Date, Buyer shall be entitled, as Buyer’s sole remedy, to terminate this Agreement upon written notice to Seller (a) within five (5) Business Days following notice by Seller to Buyer of such condemnation or the threatened condemnation or (b) on the Closing Date, whichever occurs first; provided, however, that Buyer shall have no right to terminate or renegotiate this Agreement if such eminent domain proceeding (or any steps preliminary thereto) shall be initiated as an alternative means to acquire the Property for the benefit of Buyer. If Buyer does not terminate this Agreement pursuant to the preceding sentence, Buyer shall be conclusively deemed to have elected to accept such condemnation and waives any right to terminate this Agreement as a result thereof provided that all condemnation proceeds shall be paid to Buyer. For purposes of this Section 10.1, a “Material Portion of the Property” shall mean that portion of the Real Property and Improvements which, if taken or condemned, would reduce the value of the entire Property subject to this Agreement by more than thirty percent (30%) of the Purchase Price. If Buyer elects to terminate this Agreement under this Section 10.1, the Deposit shall be returned to Buyer and thereafter neither party shall have any further rights or obligations under this Agreement. If Buyer waives (or is deemed to have waived) the right to terminate this Agreement as a result of such a condemnation, then despite such condemnation, Seller and Buyer shall proceed to Closing in accordance with the terms of this Agreement with no reduction in the Purchase Price, and Seller shall assign to Buyer at Closing, as part of the Intangible Personal Property, all of Seller’s right, title and interest in and to all proceeds resulting or to result from said condemnation.

As of the Effective Date, Buyer agrees to, and shall, toll any actions taken in furtherance of an eminent domain proceeding (or any steps preliminary thereto) until this Agreement the (i) Closing occurs; or (ii) this Agreement is terminated.

ARTICLE 11

CASUALTY DAMAGE
If, prior to the Closing, any of the Improvements are damaged by fire or other casualty (collectively, “Casualty”), promptly after Seller obtains actual knowledge of such Casualty, Seller shall deliver to Buyer written notice thereof (“Casualty Loss Notice”) together with Seller’s 01222.0001/1044003.1 19
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determination as to whether the damage constitutes a Material Damage (as defined below). For the purposes of this Article 11, “Material Damage” shall mean damage to the Improvements which is either (A) of such nature that the cost of restoring the Improvements to their condition prior to the Casualty will, in Seller’s reasonable determination, exceed thirty percent (30%) of the Purchase Price, whether or not such damage is covered by insurance or (B) uninsured and Seller does not elect to credit Buyer with an amount equal to the actual cost to repair such uninsured Casualty. If, prior to the Closing, the Improvements sustain Material Damage by a Casualty, Buyer may, at Buyer’s option, terminate this Agreement by delivering written notice thereof to Seller and Escrow Holder within the earlier of (a) five (5) Business Days after Buyer’s receipt of the Casualty Loss Notice or (b) the Closing Date. If the Improvements are damaged by a Casualty which is a Material Damage, and Buyer does not elect to terminate this Agreement or if Buyer fails to deliver written notice of termination within the time period set forth hereinabove for a Material Damage, then: (i) the parties shall proceed to close this transaction for the Purchase Price and in accordance with the other terms of this Agreement; and (ii) Seller shall assign to Buyer all of Seller’s rights in the resulting casualty insurance proceeds. If the Closing occurs after the Improvements are damaged by a Casualty which is not a Material Damage, then Seller shall reasonably cooperate with Buyer, at no cost or expense to Seller, to assist Buyer in collecting casualty insurance proceeds from Seller’s insurer. If Buyer elects to terminate this Agreement under this Article 11, the Deposit shall be returned to Buyer and neither party shall have any further rights or obligations under this Agreement. Notwithstanding the foregoing, HCD and the Grant Provider must consent to the foregoing at the Closing.

ARTICLE 12

MISCELLANEOUS

12.1 Entire Agreement. This Agreement contains the entire agreement of the parties hereto. There are no other agreements, oral or written, and this Agreement can be amended only by written agreement signed by the parties hereto.

12.2 No Assignment. Buyer may not assign its rights under this Agreement or to the Property at any time without the prior written consent of Seller, which consent may be withheld in Seller’s sole and absolute discretion, and any such assignment shall automatically be deemed null and void and a material default by Buyer hereunder; provided¸ that Buyer may, without Seller’s consent, assign this Agreement to a (i) special purpose entity established for the sole purpose of owning and operating the Property and controlled by or under common control with Buyer; or (ii) the Monterey County Housing Authority. Simultaneously with, and as a condition to the effectiveness of, any such assignment of this Agreement, Buyer shall assign the Access Agreement to any assignee of this Agreement. Further, Buyer shall provide Seller with notice of such permitted assignment at least three (3) days prior to the Closing Date which notice shall include a copy of the assignment agreement which shall provide that (i) the permitted assignee assumes all of Buyer’s obligations hereunder and under the Access Agreement, and (ii) that Buyer shall not be released with respect to any of its obligations or liabilities under this Agreement nor the Access Agreement.

12.3 Notices. Any notice, communication, request, reply or advice (collectively, “Notice”) provided for or permitted by this Agreement to be made or accepted by either party must be in writing.

Notice may, unless otherwise provided herein, be given or served (a) by delivering the same to such party in person, (b) by electronic mail, concurrently followed by a “hard” copy of same delivered to the party by personal delivery or overnight delivery pursuant to clauses (a) or (c) hereof (provided that no follow-up “hard copy” shall be required if and only if the receiving notice party confirms 01222.0001/1044003.1 20
4901-5156-1995.10
receipt and adequacy of the delivery by electronic mail), or (c) by nationally recognized overnight delivery service. Notices given in accordance with the foregoing shall be deemed given or sent (i) upon receipt in the case of clause (a) above, (ii) upon the sending of such transmission in the case of clause (b) above, and (iii) upon delivery (as confirmed by such overnight delivery service’s online tracking function) in the case of clause (c) above. For the purposes of notice, the addresses of Seller, Buyer are set forth below. Notices may be sent by the attorneys for the respective parties and each such Notice so served shall have the same force and effect as if sent by such party.

Buyer:

City of King
212 South Vanderhurst Avenue
King City, CA 93930
Attn: Steven Adams, City Manager
Email: [email protected]
With a copy to:

Aleshire & Wynder, LLP
2440 Tulare Street, Suite 410
Fresno, California 93721
Attn: Roy C. Santos, City Attorney
Email: [email protected]
Seller:

MP Broadway Street, LLC
747 Third Avenue, Suite 2902
New York, New York 10017
Attn: William Goldsmith
Email: [email protected]
With a copy to:

Foley & Lardner LLP
1000 Louisiana Street, Suite 2000
Houston, Texas 77002
Attn: Kevin P.M. Garland
Email: [email protected]

12.4 Time of the Essence. Time is of the essence in all things pertaining to the performance of this Agreement by each party including, without limitation, performing its closing obligations on the Closing Date.

12.5 Governing Law. This Agreement shall be construed in accordance with the laws of the State of California.

12.6 Business Days. If any date or any period provided for in this Agreement shall end on a day that is not a Business Day, the applicable date or period shall be extended to the first Business 01222.0001/1044003.1 21
4901-5156-1995.10
Day following such day. For the purposes of this Agreement, “Business Days” shall mean any day other than a Saturday, a Sunday or a Federal holiday on which banks are closed for business in Monterey County, California.

12.7 No Recordation. Without the prior written consent of Seller, there shall be no recordation of either this Agreement or any memorandum hereof or any affidavit pertaining hereto, and any such recordation shall constitute a material default hereunder by Buyer, whereupon this Agreement shall, at the option of Seller, terminate and be of no further force and effect.

12.8 Multiple Counterparts. This Agreement may be executed in multiple counterparts (each of which is to be deemed original for all purposes) and each signature page to this Agreement may be executed separately and then attached hereto.

12.9 Severability. If any provision of this Agreement or application to any party or circumstance shall be determined by any court of competent jurisdiction to be invalid and unenforceable to any extent, the remainder of this Agreement or the application of such provision to such person or circumstances, other than those as to which it is so determined invalid or unenforceable, shall not be affected thereby.

12.10 Third-Party Beneficiaries. Nothing contained in this Agreement shall under any circumstances whatsoever be deemed or construed, or be interpreted, as making any third party a beneficiary of any term or provision of this Agreement.

12.11 Further Actions. Buyer and Seller shall execute or cause to be executed all such instruments or agreements as may be reasonably necessary in order to carry out the purpose of this Agreement, and each party shall do all other acts reasonably necessary or reasonably requested by the other to carry out the intent and purpose of this Agreement.

12.12 Participation in Drafting. The language in all parts of this Agreement shall be in all cases construed simply according to its fair meaning and not strictly for or against any of the parties hereto. Seller and Buyer each acknowledge that they participated equally in the drafting of this Agreement and, accordingly, no court construing this Agreement shall construe it more stringently against one party than any other.

12.13 No Partnership/Fiduciary Relationship. The parties acknowledge and agree that the relationship created by this Agreement between Seller and Buyer is one of contract only, and that no partnership, joint venture or other fiduciary or quasi-fiduciary relationship is intended or in any way created hereby.

12.14 Exculpation.

12.14.1 Seller Exculpated Parties. Notwithstanding anything to the contrary contained herein, no direct or indirect member, partner, manager or other entity having a direct or indirect interest in, or management responsibility for Seller (a “Seller Parent”), and no officer, director, trustee, shareholder, employee or other representative of Seller or of a Seller Parent (collectively, inclusive of Seller Parents, the “Seller Exculpated Parties”), shall have any personal liability under this Agreement whatsoever, and no Seller Exculpated Party shall now or hereafter be deemed to have any personal liability for, or have otherwise guaranteed, any obligations or other actions of Seller hereunder or otherwise relating to the transaction contemplated hereby, except with 01222.0001/1044003.1 22
4901-5156-1995.10
respect to Buyer’s rights by statute to seek to recover proceeds of the Purchase Price actually distributed or paid by Seller to Seller’s partners. Except with respect to Buyer’s rights by statute to seek to recover proceeds of the Purchase Price actually distributed or paid by Seller to Seller’s partners, Buyer hereby irrevocably and unconditionally, now and forever (i) releases, remises, acquits and discharges each Seller Exculpated Party from and against any and all claims for relief, controversies, suits, actions, causes of action, liabilities, obligations, judgments, damages, expenses, claims, counterclaims, cross-claims or demands, in law or in equity, asserted or unasserted, express or implied, foreseen or unforeseen, real or imaginary, suspected or unsuspected, known or unknown, liquidated or non-liquidated, of any kind or nature or description whatsoever relating to this Agreement and transactions relating thereto, and (ii) covenants not to sue any Seller Exculpated Party on account of this Agreement or transactions relating thereto. The foregoing shall not limit Buyer’s right against Seller and against Seller Exculpated Parties to the extent that same received, directly or indirectly, any of the Purchase Price.

12.14.2 Buyer Exculpated Parties. No officials, officers, agents, consultants, representatives, attorneys, staff or employees of Buyer (collectively, the “Buyer Exculpated Parties”), shall have any personal liability under this Agreement whatsoever, and no Buyer Exculpated Party shall now or hereafter be deemed to have any liability for, or have otherwise guaranteed, any obligations or other actions of Buyer hereunder or otherwise relating to the transaction contemplated hereby. Seller, together with its successors and assigns, hereby irrevocably and unconditionally, now and forever (i) releases, remises, acquits and discharges each Buyer Exculpated Party from and against any and all claims for relief, controversies, suits, actions, causes of action, liabilities, obligations, judgments, damages, expenses, claims, counterclaims, cross-claims or demands, in law or in equity, asserted or unasserted, express or implied, foreseen or unforeseen, real or imaginary, suspected or unsuspected, known or unknown, liquidated or non-liquidated, of any kind or nature or description whatsoever relating to this Agreement and transactions relating thereto, and (ii) covenants not to sue any Buyer Exculpated Party on account of this Agreement or transactions relating thereto.

12.15 Electronic Signatures. Buyer and Seller agree that this Agreement may be executed electronically of electronic signatures using a system which complies with UETA and ESIGN such as DocuSign and AdobeSign. The parties understand that any document to be recorded in the Official Records of Monterey County may not be executed electronically.

12.16 Public Agency. Seller understands that Buyer is a public agency and accordingly this Agreement and the transaction is open to public scrutiny in accordance with California law.

12.17 Attorney’s Fees. In any action between the parties hereto, seeking enforcement of any of the terms and provisions of this Agreement or the Escrow, or in connection with the Property, the prevailing party in such action shall be entitled, to have and to recover from the other party its reasonable attorneys' fees and other reasonable expenses in connection with such action or proceeding, in addition to its recoverable court costs. [SIGNATURES ON FOLLOWING PAGE]
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4901-5156-1995.10
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first indicated above.

NOTE: BUYER AND SELLER, AS APPLICABLE MUST INITIAL SECTIONS 8.2.1 AND

9.1. SELLER: BUYER:

MP BROADWAY STREET, LLC,
a Delaware limited liability company
By: Medalist Partners Assset-Based Private
Credit Master Fund III-B, LP, a limited
partnership, its member
By: ______________________
Name:

Title:

City of King, a municipal corporation
By: _________________________
Mike LeBarre, Mayor
Dated: ___________, 2025
ATTEST:
__________________________
Erica Sonne, City Clerk
APPROVED AS TO FORM:

ALESHIRE & WYNDER, LLC
_________________________
Roy C. Santos, City Attorney
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4901-5156-1995.10

JOINDER BY ESCROW HOLDER
Chicago Title Insurance Company, referred to in this Agreement as the “Escrow Holder,” hereby acknowledges that it received this Agreement executed and delivered by Seller and Buyer on ______________, 2025 and accepts the obligations of and instructions for the Escrow Holder as set forth herein.

Dated: ______________, 2025
Chicago Title Insurance Company
By: ______________
Jessica Kuo, Escrow Officer
01222.0001/1044003.1 1
4901-5156-1995.10

EXHIBIT A

LEGAL DESCRIPTION OF REAL PROPERTY
The land referred to in this report is situated in the City of King City, the County of Monterey, State of California, and is described as follows:

Parcel One:

A portion of Section B of that certain Lot 125 of the Burbank and Devendorf Subdivision of the Rancho San Lorenzo as said Lot and Subdivision are shown on that certain Map filed in Volume 1 of Surveys, at Page 29, Records of Monterey County, particularly described as follows:

Beginning at the most Easterly corner of that certain parcel conveyed by Lenard M. Andrus, et al, to Ranch House Lanes, Inc., a corporation, by Deed dated January 4, 1961, and recorded January 24, 1961 in Volume 2116 of Official Records, at Page 221, Records of Monterey County, being a point in the Southeasterly boundary of that certain Parcel described in Deed from the State of California, to Lenard M. Andrus, et al, recorded January 13, 1960 in Volume 2020 of Official Records, at Page 15, Records of Monterey County; thence along the Northeasterly boundary of said Ranch House Lanes, Inc. Parcel, (1) North 15° 35’ 41” West, 176.82 feet; thence leaving the Northeasterly boundary of said Ranch House Lanes, Inc. Parcel, (2) North 74° 24’ 19” East, 86.48 feet; thence (3) North 15° 35’ 41” West, 320.00 feet; thence (3A) North 74° 24’ 19” East, 15.00 feet; thence (4) North 68° 59’ 16” East, 87.77 feet to a point in the Western boundary of that certain King City Cemetery property as described in the Deed recorded July 22, 1898 in Volume 55 of Deeds, at Page 199, Records of Monterey County; thence along said Western Cemetery boundary, (5) South 22° 01’ 57” East, 224.56 feet; thence (6) South 01° 15’ 30” East, 170.63 feet; thence (7) South 49° 38’ 32” East,

16.34 feet to the most Northerly corner of that certain parcel conveyed to the State of California, by Deed recorded in Volume 1644 of Official Records, at Page 293, Records of Monterey County; thence along the Northwesterly boundary of said State parcel (8) South 42° 51’ 19” West, 93.23 feet; thence (9) Along the arc of a circular curve to the right with a radius of 973.00 feet through a central angle of 6° 46’ 55”, a distance of 115.18 feet to the point of beginning.

Excepting therefrom that certain parcel of land conveyed from Hyatt Chalet Motels, Inc., a corporation, to Humble Oil and Refining Company, a corporation, by Deed dated November 1, 1965 and recorded December 22, 1965 in Reel 439 of Official Records, at Page 886.

Also excepting therefrom that land Deeded to the City of King, by Deed recorded April 10, 1995 in Reel 3216 of Official Records at Page 1599.

Parcel Two:

All that real property lying within the City of King, County of Monterey, State of California, being a portion of that certain Parcel 5 (Five) relinquished to the City of King as described in that “Relinquishment of Highway Right of Way in the City of King, Road 05-MON-101-39.3-41.2 Request No. 1742” recorded October 28, 1969 in Reel 626, at Page 879, Official Records of said County and as shown on State Highway Map Book No. 5, at Page 26, Records of said County, being more particularly described as follows:
01222.0001/1044003.1 2
4901-5156-1995.10
Beginning at the most Northeasterly terminus of that course shown as “S 42° 51’ 18” W 93.22” on said State Highway Map, said terminus being an angle point on the boundary of said Parcel 5; thence along the Northeasterly boundary of said Parcel 5 South 49° 37’ 00” East 46.50 feet to a point; thence leaving said boundary South 40° 16’ 00” West 44.50 feet to a point; thence South 1° 05’ 42” West

12.36 feet to a point; thence South 49° 25’ 58” West 36.77 feet to a point; thence North 36° 30’ 42” West 53.40 feet to a point on the Northwesterly boundary of said Parcel 5;,thence along said boundary North 42° 51’ 18” East 78.34 feet to the point of beginning.

Assessor's Parcel Numbers(s): 026-401-020-000
Exhibit B
01222.0001/1044003.1 1
4901-5156-1995.10

EXHIBIT B

TITLE REPORT
[ON FOLLOWING PAGES]
01222.0001/1044003.1 1
4901-5156-1995.10

EXHIBIT C

FORM OF GRANT DEED

FREE RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
______________________
______________________
______________________
______________________________________________________________________________

GRANT DEED
FOR VALUABLE CONSIDERATION, the receipt of which is hereby acknowledged, MP BROADWAY STREET, LLC, a Delaware limited liability company (“Grantor”) hereby grants to __________________________________ (“Grantee”), that real property in the City of King, County of Monterey, State of California, legally described on Exhibit A attached hereto and incorporated herein by reference (“Property”).

IN WITNESS WHEREOF, Grantor has caused this instrument to be executed on its behalf by its respective officers or agents hereunto as of the date first above written.

APN 026-401-020-000 (Space Above This Line for Recorder’s Office Use Only) THE UNDERSIGNED GRANTOR DECLARES:

Documentary Transfer Tax is: $-0- per R&T §11922
(Exempt from Recording Fee per Gov. Code §6103)
GRANTOR:

MP BROADWAY STREET, LLC, a
Delaware limited liability company
By: Medalist Partners Asset-Based Private
Credit Master Fund III-B, LP, a limited
partnership, its member
By: ______________________
Name:

Title:

Exhibit C
01222.0001/1044003.1 1
4901-5156-1995.10

CERTIFICATE OF ACCEPTANCE
This is to certify that the interest in real property conveyed by MP BROADWAY STREET, LLC, a Delaware limited liability company (“Grantor”) to the _______________ (“Grantee”), is hereby accepted by the undersigned officer and agent of Grantee and Grantee consents to the recording of the Grant Deed.

Signed and dated on _____________, 2025 at ______________, California

GRANTEE
_________________________
_________________________
By: ________________________
Its: _____________________
Not to be executed until Closing
01222.0001/1044003.1 1
4901-5156-1995.10

EXHIBIT A TO DEED

PROPERTY DESCRIPTION
The land referred to in this report is situated in the City of King City, the County of Monterey, State of California, and is described as follows:

Parcel One:

Also excepting therefrom that land Deeded to the City of King, by Deed recorded April 10, 1995 in Reel 3216 of Official Records at Page 1599.

Parcel Two:

Assessor's Parcel Numbers(s): 026-401-020-000
Exhibit D
01222.0001/1044003.1 1
4901-5156-1995.10

EXHIBIT D

FORM OF BILL OF SALE AND GENERAL ASSIGNMENT
This BILL OF SALE AND GENERAL ASSIGNMENT (“Bill of Sale”) is made and entered into as of _________________, 2025 (“Effective Date”) by and between MP BROADWAY STREET, LLC, a Delaware limited liability company (“Assignor”) and [BUYER], a [__________] (“Assignee”).

R E C I T A L S :

A. Assignor and Assignee entered into that certain Agreement of Sale and Purchase and Joint Escrow Instructions dated _____________, 2025 (“Agreement”) with respect to the sale and purchase of the “Property” described therein. All capitalized terms used herein shall have the meanings ascribed to such terms in the Agreement.

B. Assignor desires to assign and transfer to Assignee all of Assignor’s right, title and interest in and to the Personal Property, as such term is defined in the Agreement, and Assignee desires to accept such assignment and transfer of same.

NOW, THEREFORE, in consideration of the foregoing recitals and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Assignor and Assignee hereby agree as follows:

1. Assignment & Transfer. Assignor hereby assigns and transfers to Assignee all of Assignor’s right, title and interest in and to the Personal Property as of the Effective Date.

2. Acceptance. Assignee hereby accepts the above assignment and transfer of the Personal Property as of the Effective Date.

3. No Warranties. Assignee does hereby covenant with Assignor, and represents and warrants to Assignor, that Assignor is assigning and transferring all of the Personal Property to Assignee without any warranty of any kind or nature. Assignee on Assignee’s own behalf and on behalf of Assignee’s agents, members, partners, employees, representatives, successors and assigns hereby agrees that in no event or circumstance shall any of the members, partners, employees, representatives, officers, shareholders, directors or agents of Assignor have any personal liability under this Assignment, or to any of Assignee’s creditors, or to any other party in connection with the Property.

5. Counterparts. This Assignment may be executed in counterparts, each of which shall be deemed an original, and all of which taken together shall be deemed one document. [Signature Page Follows]
Exhibit D
01222.0001/1044003.1 2
4901-5156-1995.10
IN WITNESS WHEREOF, Assignor and Assignee have duly executed this Bill of Sale as of the day and year first above written.

ASSIGNEE: ASSIGNOR:
________________________
________________________
By: _____________________
Its: ______________________
MP BROADWAY STREET, LLC, a
Delaware limited liability company
By: Medalist Partners Asset-Based Private
Credit Master Fund III-B, LP, a limited
partnership, its member
By: ______________________
Name: _________________
Title:
4901-5156-1995.10

EXHIBIT E
FEDERAL TRANSFEROR’S CERTIFICATION OF NON-FOREIGN STATUS Section 1445 of the Internal Revenue Code provides that a transferee of a U.S. real property interest must withhold tax if the transferor is a foreign person, MP BROADWAY STREET, LLC, a Delaware limited liability company (“Seller”) is conveying a U.S. real property interest to [BUYER], a [_______________] (“Transferee”). For U.S. federal tax purposes (including Section 1445 of the Internal Revenue Code), the owner of a disregarded entity (which has legal title to a U.S. real property interest under local law) will be the transferor of the property and not the disregarded entity. ]Seller is a disregarded entity for federal income tax purposes, and therefore the entity with respect to Seller that is treated as the transferor for federal income tax purposes is [_________________], a [________________] (“Transferor”).] Effective as of [__________________], 2025, to inform Transferee that withholding of tax is not required upon disposition of a U.S. real property interest by Seller to Transferee, Transferor hereby certifies the following:

1. Transferor is not a foreign corporation, foreign partnership, foreign trust, or foreign estate (as those terms are defined in the Internal Revenue Code and Income Tax Regulations);

2. Transferor is not a disregarded entity for federal income tax purposes;

3. Transferor’s U.S. tax identification number is [_______]; and

4. Transferor’s office address is c/o [______________].

Transferor understands that this Certification may be disclosed to the Internal Revenue Service by Transferee and that any false statement contained herein could be punished by fine, imprisonment, or both.

Transferor understands that Transferee is relying on this Certification in determining whether withholding is required upon said transfer.
[Signature Page Follows]
4901-5156-1995.10
Under penalty of perjury the undersigned declare that they have examined this Certification and to the best of their knowledge and belief it is true, correct and complete, and they further declare that they have authority to sign this Certification on behalf of Transferor. “TRANSFEROR”
[ ],
By:

Name:

Title:
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AGREEMENT FOR PURCHASE AND SALE

OF REAL PROPERTY
THIS AGREEMENT FOR PURCHASE AND SALE OF REAL PROPERTY (“Agreement”) is made this ___ day of April 2025 (“Agreement Date”) by and between the CITY OF KING a California municipal entity (“Seller”), and HOUSING AUTHORITY OF THE COUNTY OF MONTEREY, a joint powers authority (“Buyer”).

R E C I T A L S:

D. Seller desires to sell and Buyer desires to buy, the Property together with the Personal Property upon the terms and conditions more particularly set forth herein.

NOW, THEREFORE, in consideration of the mutual covenants set forth herein, the parties hereto agree as follows:

TERMS AND CONDITIONS:

1. PURCHASE AND SALE OF PROPERTY. Pursuant to the terms and conditions of this Agreement, Buyer hereby agrees to purchase from Seller and Seller agrees to sell to Buyer, the Property in AS-IS condition except as otherwise specifically provided herein together with the Personal Property. Buyer hereby agrees to utilize the Property for the exclusive development of a permanent supportive housing project consistent with the Homekey project requirements as established by the State of California, Department of Housing and Community Development and all agreed upon requirements of any grant funding agency for the purchase, construction and operation of the permanent supportive housing project at the Property. Further, the Buyer hereby agrees to comply with all covenants recorded upon the Property governing the use of the Property and/or relating to the development and operation of a permanent supportive housing project.

2. PURCHASE PRICE; PAYMENT OF PURCHASE PRICE.

2.1 Purchase Price. The purchase price for the Property is One Dollar ($1.00) (“Purchase Price”).
11(B) Exhibit 2
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3. CLOSING FUNDS AND DOCUMENTS REQUIRED FROM BUYER AND SELLER.

3.2 Buyer. Buyer agrees that on or before 12:00 noon on the day preceding the Closing Date, Buyer will provide all of the following:
a. The Purchase Price.
b. A Certificate of Acceptance in the form attached to the Grant Deed executed by Buyer (“Certificate of Acceptance”), attached here to as Exhibit B and provided to the City of King prior to the close of escrow between the City of King and HACM or the legal owner of the Property for the purchase of the Property. c. A Preliminary Change of Ownership Statement completed in the manner required by Monterey County (“PCOR”).
d. Such other items and instruments as may be necessary in order to comply with this Agreement or as reasonably requested by a title company if Buyer’s choosing (“Title Company”), if Buyer elects to obtain title insurance for its acquisition of the Property. 01222.0001/1052623.1 3
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4. CLOSING DATE; TIME IS OF ESSENCE; POSSESSION.

4.2 Time is of Essence. The parties specifically agree that time is of the essence of this Agreement.

4.3 Possession. Upon the Closing, possession of the Property and Personal Property shall be delivered to Buyer.

5. TITLE POLICY.

During the Due Diligence Period, Buyer and its agents may, at Buyer’s sole expense, conduct noninvasive tests and physical inspections of the property, including survey(s), building inspections and 01222.0001/1052623.1 4
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environmental site assessments desired by Buyer. Any invasive testing, including a Phase II inspection shall require Seller’s prior written consent, in Seller’s sole and absolute discretion. Buyer may also conduct such investigations with regard to the Materials, zoning, building codes, and availability of permits and approvals for its intended construction and use of the Property, as it deems prudent in its sole discretion. Prior to entry upon the Property, Buyer, and/or any of its consultants entering upon the Property, shall provide evidence to Seller that Buyer has procured and paid premiums for an all-risk public liability insurance policy written on a per occurrence and not claims made basis in a combined single limit of not less than ONE MILLION DOLLARS ($1,000,000.00) which insurance names Seller as additional insured. Buyer shall keep the Property free and clear of all mechanic liens, lis pendens and other liens arising out of the entry and work performed under this paragraph and shall maintain or assure maintenance of workers' compensation insurance (or state approved self-insurance) on all persons entering the Property in the amounts required by the State of California. Buyer shall promptly repair and restore the Property to the condition that it was in prior to those tests and inspections and shall indemnify, defend and hold Seller harmless from all damages, costs, loss, expense (including attorney fees) and liability resulting from Buyer’s activities, acts, and omissions on the Property, including, but not limited to, mechanic liens. Buyer’s indemnity obligations under this Section shall survive Closing and termination of this Agreement. At Closing, Buyer shall take the Property AS-IS.

7.3 Buyer’s Termination Right. Buyer shall have the right at any time on or before the expiration of the Due Diligence Period to terminate this Agreement if, during the course of Buyer’s due diligence investigations of the Property, Buyer determines in its sole and absolute discretion that the Property is not acceptable to Buyer. Buyer may exercise its right to terminate by delivering written notice of termination to Seller and Escrow Agent (“Termination Notice”) on or before the expiration of the Due Diligence Period. Upon the timely delivery of such Termination Notice, this Agreement shall automatically terminate and be of no further force or effect and neither party shall have any further rights or obligations hereunder except for those obligations which expressly survive termination.

8. CONDITIONS PRECEDENT TO CLOSING.

8.1 Conditions to Buyer's Obligations. The obligations of Buyer under this Agreement are subject to the satisfaction or written waiver, in whole or in part, by Buyer of each of the following conditions precedent (collectively, “Buyer’s Conditions Precedent”):
(a) Buyer shall provide a Certificate of Acceptance in the form attached to the Grant Deed executed by Buyer and provided to the City of King prior to the close of escrow between the City of King and HACM or the legal owner of the Property for the purchase of the Property.
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(b) Title Company will issue the Owner’s Title Policy as specified in Section 6.2, if elected by Buyer.
(c) Seller is not in default of its obligations under this Agreement. (d) As of the Closing Date, Buyer shall have received all approvals, clearances, consents and commitments required from any judicial, governmental or regulatory entity to lawfully convey the Property from Seller to Buyer.

9. REPRESENTATIONS AND WARRANTIES. Seller represents and warrants to Buyer that, to best of Seller’s knowledge, as of the Agreement Date and as of the Closing Date, that:
a. This Agreement has been duly authorized and executed on behalf of Seller and this Agreement constitutes a valid and binding agreement, enforceable in accordance with its terms.
b. Seller is not a party to any contract, agreement or commitment to sell, convey, assign, transfer, or otherwise dispose of any portion or portions of the Property. c. Seller represents that, except as provided in the Materials, to Seller’s knowledge: (i) the Property is not in breach of any environmental laws; and (ii) the Property is free of any Hazardous Materials that would trigger response or remedial action under any environmental laws or any existing common law theory based on nuisance or strict liability. This warranty is limited to matters of which Seller has current actual knowledge, and Buyer acknowledges that Seller has not made (nor will make) any affirmative investigation or inquiry as to environmental issues affecting the Property in connection with this Agreement. As used in this Agreement, the term “Hazardous Material” means any flammable items, explosives, radioactive materials, hazardous or toxic substances, material or waste or related materials, including any substance defined as or included in the definition of “hazardous substances”, “hazardous wastes”, “hazardous materials” or “toxic substances” now or subsequently regulated under any applicable federal, state or local laws or regulations, including without limitation petroleum-based products, paints, solvents, lead, cyanide, DDT, printing inks, acids, pesticides, ammonia compounds and other chemical products, asbestos, PCBs and 01222.0001/1052623.1 6
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similar compounds, and including any different products and materials which are subsequently found to have adverse effects on the environment or the health and safety of persons.
d. There is no litigation pending, threatened against or by Seller or the Property which relates to, or if decided adversely, could have a material adverse effect upon, the Property (including condemnation or similar proceedings).
e. The Property is not subject to any operating, maintenance, or repair contract or other agreements that will bind the Property or Buyer after the Closing.

No representation, statement or warranty by Seller in this Agreement contains or will contain any untrue statements or omits, or will omit, a material fact necessary to make the statement of fact therein recited not misleading. The representations and warranties of Seller and any other representations and warranties of Seller contained elsewhere in this Agreement are true and correct on and as of the date of this Agreement and at Closing and shall survive the Closing, until the date which is twelve (12) months after the Closing ("Survival Date") without the necessity of a separate written certificate regarding the same, whereupon such representations and warranties shall be of no further force or effect. Actual knowledge shall not be deemed to exist merely by assertion by Buyer of a claim that any of the foregoing persons should have known of such facts or circumstances, if such person did not have actual knowledge thereof.

10. CLOSING PROVISIONS.

10.1 General Closing Provisions. Seller shall deliver the Owner’s Title Policy to the Buyer.

10.2 Real Property Taxes; Utilities; Rent.
a. NO Real Property Tax Prorations. Real property taxes shall not be prorated. After Closing, Seller shall have the right to recover any excess taxes paid directly by Seller.

Buyer shall cooperate with any filing for a refund by Seller. 01222.0001/1052623.1 7
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b. Utilities. Buyer and Seller shall cause all utilities which are in the name of Seller to be transferred to the name of Buyer as of the Closing as soon thereafter as practicable.

Seller shall be entitled to retain (and receive a refund) for any and all utility deposits which are held by the utility company.

12. DISCLAIMER OF WARRANTIES; AS-IS; RELEASE.

12.1. Disclaimer of Representations and Warranties by Seller. EXCEPT AS MAY BE EXPRESSLY PROVIDED IN THIS AGREEMENT AND SUBJECT TO SELLER’S EXPRESS

REPRESENTATIONS AND WARRANTIES MADE UNDER THIS AGREEMENT, NEITHER SELLER

NOR ANY OF ITS AGENTS, EMPLOYEES OR CONTRACTORS HAS MADE AND IS NOT NOW 01222.0001/1052623.1 8
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