King City City Council
April 22, 2025

Exhibit E

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.” The Department of Housing and Community Development, a public agency of the State of California (“Department” or “HCD”) 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
A. Capitalized terms used but not defined in these recitals are as defined in Section 2 of this Declaration.

B. The Department issued a Notice of Funding Availability (“NOFA”) for the Homekey Program, pursuant to California Health and Safety Code section 50675.1.3 ("Homekey Program"), on September 9, 2021 and amended it on January 14, 2022, May 5, 2022, and December 11, 2024. The NOFA incorporates by reference 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 Program”), as well as the MHP Final Guidelines, dated June 19, 2019, both as amended and in effect from time to time (“MHP Guidelines”).

C. 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."
D. Owner will own and operate the Property as Permanent Housing in accordance with the Program Requirements, as defined herein.

E. This Declaration is being recorded pursuant to Program Requirements that City cause the recordation of a fifty-five (55) year use restriction against the fee title to the Property.

NOW, THEREFORE, in consideration of the foregoing premises, the Department’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) “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. (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 adopted by HCD 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 in the State of California.
(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:
a. the NOFA;
b. the Homekey Program;
c. the MHP Program;
d. the MHP Guidelines;
e. the Uniform Multifamily Regulations (Cal. Code Regs., tit. 25, § 8300 et seq.), effective November 15, 2017, and as subsequently amended, except to the extent that any UMR provision would be inconsistent with the provisions of the NOFA (the “UMRs”); f. the American Rescue Plan Act of 2021 (Pub.L. No. 117-2) and all related federal guidance (“ARPA”); and
g. all applicable local, state, and federal law.
(l) “Target Population” means individuals and families who are Homeless, Chronically Homeless, or At Risk of Homelessness.

(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 term of this Declaration, which commences on the Effective Date of this Declaration and expires fifty-five (55) years from the date of issuance of the certificate of occupancy for the Development.
"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. During the Term, the forty-four (44) Units will be occupied by, or, if vacant, available for occupancy by the Target Population.

Owner shall use its best efforts to ensure that at least:
a. Fifteen (15) of the Units are restricted to occupancy by the Chronically Homeless; b. Fifteen percent (15%) of the Units will be accessible for persons with mobility disabilities; and c. Ten percent (10%) of the Units will be accessible for persons with hearing or vision disabilities.

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

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

(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”). 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 income-eligibility level.

3.5 Other Restrictions. To the extent Owner and/or City obtain additional funding for the acquisition or rehabilitation of the Property from non-HCD sources, and those non-HCD sources impose independent occupancy and tenant selection criteria (“Additional Occupancy Criteria”) on the Development, City and Owner covenant and agree as follows:
(i) City and Owner shall use their reasonable best efforts to ensure that such Additional Occupancy Criteria are, to the maximum extent reasonably possible, consistent with these Covenants in both their definition and implementation. (ii) If, during any period of time, there is any vacancy in the Development 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 this Declaration.

The terms of any and all agreements, documents, and instruments memorializing any such Additional Occupancy Criteria shall be consistent with this Section 3.5 and are otherwise subject to HCD’s prior reasonable written consent.

At all times during the term hereof, all such Additional Occupancy Criteria, and the agreements, documents, and instruments evidencing the same, shall be recorded, and shall be and remain subject and subordinate to this Declaration.

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 City with 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; 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 Department’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”).
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, Services Provider 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 socialemotional skills. vi. 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)
vii. Supportive Services goal outcomes include:

1. Ninety percent (90%) of tenants retain Permanent Housing after one year.

2. Eight percent (8%) of tenants obtain and maintain eligible benefits. Tenants increase their ability to live independently based on individualized goals in their ISP.

3. 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.

4. 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.
a. Owner shall not, except with both the Department’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 Department’s and City’s sole and absolute discretion.
b. If both the Department 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.a. 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 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 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 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, (a) 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; (b) 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 (c) no material breach or default then exists under any agreements between or among the Parties and the Department. 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 Department provided that the requirements in subsections (b) and (c) 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 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 Department, 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 Department, or their respective appointees, officers, officials, employees, members, agents, volunteers, or representatives. Notwithstanding the foregoing, the City and HCD 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 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 Department shall be entitled to enforce the same such rights, remedies, or damages as a beneficiary under this Declaration. The Department’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 Department and City may each enforce any provision of this Declaration jointly or independently.

a. 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 Department’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. b. Injunctive Relief. In pursuing specific performance of this Declaration, the Department 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.
c. Appointment of Receiver. In conjunction with any other remedy available at law or in equity, the Department 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.
d. Right to Advance & Enter. The Department 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. e. Interest. Any amounts not paid when incurred (e.g., protective advances, 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 such rate of interest exceed the lesser of: (a) ten percent (10%) per annum, or (b) 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 Department 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.
a. At any time during the Term of this Declaration and upon reasonable prior notice, the Department, 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 Department or City, Owner shall notify occupants of upcoming inspections in accordance with state law.
b. The Department 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.

c. The Department 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 Department’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:

14.1 Owner represents and warrants to the Department and City that: (a) Owner owns the Property and is able to support the operation of the Development in accordance with the Program Requirements and this Declaration; and (b) 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 Department that it has the full right and authority to enter into this Declaration.

14.3 Owner and City represent to each other and the Department 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 Department. Any such amendment, modification, waiver, or release must be executed by the Parties and the Department, be in recordable form, and be recorded in the Official Records of Monterey County upon full execution. The Department 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 Department 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
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/Declarant
::

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 Department that, to the best of his/her knowledge: (a) 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, (b) 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 (c) 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 Department that, to the best of his/her knowledge: (a) City is a validly formed municipal corporation in the State of California which has authority to execute and deliver this Declaration and to perform its obligations under its terms; and (b) such person is duly authorized to execute and deliver this Declaration on behalf of City.

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 Department. This Declaration shall be recorded, and shall remain, as a lien and encumbrance against the Property in first (1st) position senior to all deeds of trusts, mortgages, declarations, covenants, or liens of record on the Property.

23. HCD as Third-Party Beneficiary. Explicit references made to the Department or HCD throughout this Declaration shall not be construed or interpreted to in any way limit the rights and remedies of HCD, as a third-party beneficiary of this Declaration. HCD, 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.
a. Upon completion of the construction or rehabilitation of the Development, Owner shall submit a Homekey Program and Expenditure Report, as specified in Section 601 of the NOFA (the “Annual Report”), on January 31 of the calendar year following such completion, and on each January 31 thereafter for the next five (5) consecutive years. The Annual Report shall be in such form and contain such information as required by the Department in its sole and absolute discretion. The report shall contain, at minimum, all of the following:

1. The amount of funds expended for the Development;

2. Operating expenditures;

3. The location of any properties for which the funds are used;

4. The number and bed size of habitable housing units produced, or planned to be produced, using the funds;

5. The number and demographics of individuals housed, or likely to be housed, using the funds;

6. The racial and ethnic composition of the tenants and participants assisted;

7. The number of units, and the location of those units, for which operating subsidies have been, or are planned to be, capitalized using the funds. Detail of Supportive Services offered to tenants and participants;

8. The number and demographics of tenants and participants who moved out of the Development and whether the move was voluntary or involuntary;

9. The data shall detail the reason for the move and include returns to homelessness and engagement with voluntary moving on strategies;

10. Any lessons learned from the use of the funds;

11. The proposed development vision that identifies the financial and regulatory mechanisms to be used to maintain the long-term affordability of the Development;

12. The progress and status in securing any required entitlements, permits, environmental clearances; and,

13. The proposed timeline for the completion of the Development. b. Upon the Department’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.
c. Owner shall submit to the Department such periodic reports, updates, and information as deemed necessary by the Department to monitor compliance and perform Program evaluation. Any requested data or information shall be submitted in electronic format on a form provided by the Department.
d. 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. [PAGE INTENTIONALLY LEFT BLANK]
[SIGNATURES ON FOLLOWING PAGE]

IN WITNESS WHEREOF, Owner and City have caused this Declaration to be signed by their duly authorized representatives, as of the day and year first written above.

CITY: OWNER/DECLARANT:

City of King, a municipal corporation
By: ________________________
Steven Adams, City Manager
ATTEST:
_________________________
Erica Sonne, City Clerk
APPROVED AS TO FORM:

ALESHIRE & WYNDER, LLP
By: _____________________
Roy Santos, City Attorney
Housing Authority of the County of
Monterey, a California joint powers authority
By: _________________________
Its: _________________________

ALL SIGNATURES MUST BE NOTARIZED

STATE OF CALIFORNIA )
) ss.

COUNTY OF ____________ )
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.

STATE OF CALIFORNIA )
) ss.

COUNTY OF ____________ )
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
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.

EXHIBIT “A”

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

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EXHIBIT F

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 posthospitalization 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

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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 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 to ensure

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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:
i. The Award cannot be used for rental subsidies, operating costs, or services.

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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 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

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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 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.

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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 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.

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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 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.

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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, 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

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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 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

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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.
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).

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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 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.

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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 (federal, state or local) with commission of any of the offenses enumerated in clause (b) above; or (d) has within a threeyear 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,

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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.

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 nonrenewed 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

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(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 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

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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 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.

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For the Partner:

City of King
For the Alliance:

Santa Cruz-Monterey-Merced-San
Benito-Mariposa 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 must fulfill the payment preconditions below and provide documentation for review in

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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.

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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. 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.

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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.
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:
1 Housing Discrimination Under the Fair Housing Act | HUD.gov / U.S. Department of Housing and Urban Development (HUD)

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• 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 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

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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:
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.

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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 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 Medi-Cal 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

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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, 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
Benito-Mariposa Managed Medical
Care Commission, operating as Central
California Alliance for Health

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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

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• 212 S. Vanderhurst Avenue
King City, CA 93930
Description of Our Organization
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

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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 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:

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
CCAH2$5,178,680
Total $16,779.595
The CCAH funding will be allocated as follows:

City of King (property acquisition)$3,000,000
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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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.

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:

E. 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”).

F. 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”).

G. 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.

H. 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:

6. 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. 3 Signature lines intentionally omitted from Exhibit 3 for brevity

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7. PURCHASE PRICE; PAYMENT OF PURCHASE PRICE.

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

7.2 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.

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

8.1 Seller. Seller agrees that on or before 12:00 noon on the day preceding the Closing Date, Seller will provide all of the following:
f. 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.
g. A bill of sale of all Personal Property in the form attached hereto as Exhibit C (“Bill of Sale/Assignment”).
h. Any documents reasonably required by the Title Company to issue the Title Policy.
i. A Non-Foreign Affidavit as required by federal law.
j. Such funds and other items and instruments as may be necessary in order for the Title Company to comply with this Agreement.

8.2 Buyer. Buyer agrees that on or before 12:00 noon on the day preceding the Closing Date, Buyer will provide all of the following:
e. The Purchase Price.
f. 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. g. A Preliminary Change of Ownership Statement completed in the manner required by Monterey County (“PCOR”).

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h. 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.

8.3 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.

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

9.1 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”).

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

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

10. TITLE POLICY.

10.1 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.

5.2 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 pre-printed 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.

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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.

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.

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.

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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.

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:
f. 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. g. 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. h. 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,

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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.
i. 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).
j. 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.

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

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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.

11. CLOSING PROVISIONS.

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

11.2 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.

11.3 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.

11.4 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.

11.5 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.

13. 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

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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.

14. 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 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

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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.

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

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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.

12.3 Seller Released From Liability. Except to the extent of any breach or default by Seller with respect to the express representations, warranties, covenants and agreements of Seller contained within this Agreement, Buyer and anyone claiming by, through or under Buyer hereby waives its right to recover from and fully and irrevocably releases Seller, and its employees, officers, directors, managers, members, representatives, agents, servants, attorneys, affiliates, parent, subsidiaries, successors, assigns, and all persons, firms, corporations and organizations in its behalf ("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

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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 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

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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 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.

15.2 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

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17. GENERAL PROVISIONS.

17.1 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.

17.2 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.

17.3 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.

17.4 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.

17.5 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.

17.6 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.

17.7 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.

17.8 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.

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17.9 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.

17.10 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.

17.11 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.

17.12 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.

17.13 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.

17.14 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.

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

17.16 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

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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.

17.17 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.

17.18 Non-Federal Funds Limitation. Notwithstanding anything contained in this Agreement to the contrary, any indemnification of Buyer contained in this Agreement is limited to eligible non-federal, non-public housing assets available on the date the claim arises.

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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 Cruz-Monterey-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 fortyfive (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:

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

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(q) "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. (r) "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.
(s) "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.
(t) “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. (u) “Effective Date” means the date this Declaration is recorded in the Official Records of Monterey County.
(v) “Homeless” means individuals and families who are experiencing homelessness, as defined in Part 578.3 of Title 24 of the Code of Federal Regulations. (w) "HUD" means the United States Department of Housing and Urban Development. (x) "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.
(y) “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 to the extent that any UMR provision would be inconsistent with the provisions of the NOFA (the “UMRs”);

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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.
(z) “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.
(aa) “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. (bb) "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.
(cc) "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:
(f) 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)
G.
(g) 138% - 213% of FPL may qualify for modified adjusted gross income (MAGI) Medi-Cal during pregnancy
H.
(h) 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 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

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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 I.
(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 income-eligibility level.

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.

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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; (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”).

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(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)
(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.

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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 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

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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 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 "NonFederal 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 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

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"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 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.

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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 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.

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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:

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.

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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
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.

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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 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

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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:
(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

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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

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01222.0001/1052623.1 1
166966818.5
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 MediCal 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.

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 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.

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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.

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

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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 MediCal 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.

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 MediCal 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.

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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
threshold is based on
number of units in service
occupied by Medi-Cal
 Yes.
 No.

If “No,” Explain:

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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:

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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.”
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 6 Signature lines intentionally omitted from Exhibit 7 for brevity

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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 thirty-nine (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.”
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

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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 Medi-Cal 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 MediCal 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 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,

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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 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 government-sponsored programs (including without limitation any funds received or held by Partner with respect to

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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 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

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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 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 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.
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.
7 Housing Discrimination Under the Fair Housing Act | HUD.gov / U.S. Department of Housing and Urban Development (HUD)

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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:
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.
• 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.

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• 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 MediCal 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 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

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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 Medi-Cal 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.
• 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,

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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.

Item No. 11 (C)

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 HOMEKEY PROJECT SETTLEMENT

AGREEMENT
RECOMMENDATION:

It is recommended the City Council: 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 required by HCD; 3) approve the Declaration of Restrictive Covenants required by the Santa Cruz-Monterey-Merced-San Benito-Mariposa Managed Medical Care Commission; and 4) authorize the City Attorney to make nonsubstantive changes prior to execution if necessary.

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

CITY COUNCIL

CONSIDERATION OF HOMEKEY PROJECT SETTLEMENT AGREEMENT
APRIL 22, 2025
PAGE 2 OF 4
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 a settlement agreement has been reached with HCD to terminate the litigation which is attached as Exhibit 1.

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 supportive services. 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.

Under the terms of the Settlement Agreement, HCD will provide funding to assist with the acquisition and renovation costs. The City agrees to condition the transfer of the property to HACM upon their commitment to complete and operate the project under the terms and requirements of the Homekey program. The City also commits to an agreed upon Declaration of Restrictive Covenants found in Exhibit 2, which will place a 55-year deed restriction on the property establishing specific requirements for the project to serve low-income chronically homeless.

A second Declaration of Restrictive Covenants attached as Exhibit 3 is required by the Santa Cruz-Monterey-Merced-San Benito-Mariposa-Managed Medical Care Commission, who operates as the Central Coast Alliance for Health (CCAH). They are providing a major grant and require the deed restriction to ensure the project addresses their mission.

CITY COUNCIL

CONSIDERATION OF HOMEKEY PROJECT SETTLEMENT AGREEMENT
APRIL 22, 2025
PAGE 3 OF 4
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. Staff recommend City Council approve the settlement agreement contingent upon prior execution of the other funding agreements to ensure the funding is secured before any commitments are made.

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 the agreement;

3. Do not approve the agreement and direct staff to continue with the litigation; or

4. Provide staff other direction.

Exhibits:

1. Settlement Agreement

2. Declaration of Restrictive Covenants (HCD)

3. Declaration of Restrictive Covenants (CCAH)

SETTLEMENT AGREEMENT
(1130 Broadway St., King City, CA)
This Settlement Agreement (“Agreement”) is hereby entered into by and among the California Department of Housing and Community Development (“HCD”), the City of King, a municipal corporation (“King City”), Medalist Partners Asset-Based Private Credit Fund III CRE LLC, a Delaware limited liability company (“MP Credit”), and MP Broadway Street, LLC, a Delaware limited liability company (“MPB”). HCD, King City, MP Credit, and MPB may be individually referred to as “Party” and collectively referred to as “Parties.”

RECITALS
A. On or about January 9, 2024, HCD filed a lawsuit naming King City, MP Credit, 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 in which HCD alleges causes of action for breach of contract, fraud, quiet title, and declaratory relief (the “Lawsuit”); reference is hereby made to the Lawsuit and the pleadings filed therein for the alleged facts and circumstances giving rise to the Lawsuit and the various defenses of King City, MP Credit, and MPB asserted therein.

B. In connection with the Lawsuit, HCD caused to be recorded that certain Notice of Pendency of Action (Lis Pendens) as Instrument No. 2024004824 (the “Lis Pendens”) against that certain real property commonly referred to as 1130 Broadway Street in King City, California and more particularly described on Exhibit A attached hereto and incorporated herein by reference (the “Property”).

C. The Parties desire to settle their various disputes with respect to the Lawsuit as relates to the Property (the “Settlement”) and are entering this Agreement to evidence and effectuate such settlement.

D. All references to the Homekey program in this Agreement shall mean the grant program administered by HCD, in accordance with Health and Safety Code section 50675.1.3 and its implementing guidelines, in order to provide housing for individuals and families who are experiencing homelessness or who are at risk of homelessness (the “Target Population”).

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.

2. Effective Date. This Agreement is effective on the date of signature (and initialing of Section 4 below) of the last signatory to this Agreement (the “Effective Date”). Electronic signatures are acceptable provided they comply with UETA and ESIGN using qualified third-party providers such as DocuSign or AdobeSign. The Parties agree that future amendments, modifications and notices may be executed and delivered in PDF format or facsimile. This 11(C) Exhibit 1
Agreement is independently enforceable from any settlement of the Lawsuit unrelated to the Property.

3. Settlement Terms & Conditions. Any and all payments, dismissals, and releases, or other obligations or undertakings, by the Parties hereto are expressly conditioned upon the full and timely satisfaction of all of the terms and conditions precedent set forth below (collectively, the “Conditions Precedent”). All Conditions Precedent shall be satisfied by close of Escrow except for the following: subsections (h)(ii); (i)(ii) and (iii); (j); (k); and (l)(ii). (a) Closing of the Sale/Acquisition of the Property. MPB and King City have negotiated, executed, and delivered a formal Purchase and Sale Agreement with Joint Escrow Instructions, a true and correct copy of which is attached hereto as Exhibit B (the “PSA”) pursuant to which MPB will transfer and convey the Property to Housing Authority of the County of Monterey, a California Joint Powers Authority (the “Housing Authority”). Such PSA shall be and hereby is approved by HCD. In the event of a conflict between this Agreement and the PSA with respect to the acquisition of the Property, the terms of the PSA shall control. In all other circumstances, the terms of this Agreement shall control. The PSA shall be interpreted consistent with this Agreement, including the following terms:
(i) The price of the acquisition of the Property shall be $4,400,000 (the “Purchase Price”). An earnest money deposit equal to three percent of the Purchase Price shall be deposited into Escrow and the balance of the Purchase Price will be payable in cash at the Closing. Closing shall be contingent upon King City’s receipt of grants (the “Grants”) that King City shall use diligent efforts to secure prior to the Closing. HCD shall fund a maximum of $1,100,000 (the “HCD Purchase Contribution Amount”) in contribution toward the Purchase Price, but the same shall be paid as a partial reimbursement to King City in that amount post-closing in accordance with the terms of the Side Agreement (as defined in subsection (g) of this Section 3).
(ii) The Purchase Price funds shall be deposited into Escrow by King City delivering the Grants pursuant to escrow instructions setting forth such reasonable Closing conditions consistent with the terms of this Agreement, including without limitation the release of such funds and the recordation of the Restrictive Covenant (as defined in subsection (b)(ii) below) against the Property as contemplated below immediately following the recordation of the grant deed conveying the Property to the Housing Authority, with fee title insured by an owner’s ALTA title insurance policy in favor of the Housing Authority issued by Orange Coast Title Company as agent for Stewart Title Guaranty Company subject to (y) exceptions as approved by (or deemed to be approved by) King City as set forth in the PSA, and (z) the Restrictive Covenant. The Closing shall occur upon recordation of the grant deed to the Housing Authority immediately followed by the recordation of the Restrictive Covenant (the “Closing”).
(iii) The PSA shall contain provisions permitting King City to extend the Closing thereunder for an amount of time reasonably sufficient such that the California Department of Finance (“DOF”) shall have approved this Agreement and Settlement, as specified and described at subsection (n) below.
(iv) The PSA shall contain provisions permitting King City to assign the PSA to the Housing Authority prior to Closing or otherwise designate the Housing Authority to take title to the Property at Closing.

After the Closing, the Housing Authority shall own, develop, and operate the Property consistent with (x) this Agreement, (y) the Restrictive Covenant, and (z) the Side Agreement as defined in subsection (g) below. The Side Agreement will be consistent with, but shall, solely as between King City and HCD, supersede in its entirety, Homekey Standard Agreement 21-HK-17170 (the “Homekey Standard Agreement”). Upon conveyance of the Property to the Housing Authority as contemplated in Section 3(a) of this Agreement, and the satisfaction of all other conditions to the effectiveness of this Agreement, King City and HCD shall be released of any liability to one another under the Homekey Standard Agreement.

HCD shall have no monetary obligation to contribute to the Purchase Price other than the HCD Purchase Contribution Amount and shall not be subject to a claim for damages or specific performance by MPB or King City as it relates to payment of the balance of the Purchase Price for the Property into Escrow.
(b) Escrow. The transaction involving the acquisition, sale, conveyance and transfer of the Property will be conducted through an escrow opened with Chicago Title Company in California pursuant to the PSA (the “Escrow”). The following items must be executed and delivered into Escrow (the following list overlapping in part with certain deliveries enumerated in the PSA):
(i) A California grant deed in recordable form executed by MPB, and properly acknowledged conveying the Property to the Housing Authority (the “Grant Deed”); (ii) The restrictive covenant in recordable form required by the Homekey program, and which is now in final, fully executable form attached hereto as Exhibit C (the “Restrictive Covenant”), which shall be executed, acknowledged, and recorded against the Property as contemplated in subsection (f) below immediately following the recordation of the Grant Deed without any intervening monetary lien, trust deed or other monetary encumbrance. The Restrictive Covenant shall run with the Property and shall be enforceable against King City, the Housing Authority, and all subsequent owners of the Property during their ownership of the Property for the term set forth in the Restrictive Covenant;
(iii) Deposit by King City, the Housing Authority and HCD of three (3) executed original counterparts of the Side Agreement as set forth in subsection (g) below, and upon Closing, Escrow shall deliver a fully executed original of the Side Agreement to each of King City, HCD, and the Housing Authority;
(iv) Deposit by HCD of the Lis Pendens Withdrawal (as defined in subsection (l)(i) below) to be recorded at the Closing along with HCD’s escrow instructions relating to the recordation of the same; and
(v) Deposit by HCD of a copy of the DOF Approval (defined below). (c) Condition of Title.
(i) King City acknowledges receipt of a current preliminary report for the Property but, as set forth in the PSA, shall receive an updated preliminary report upon opening of escrow as set forth in the PSA. King City, MPB and HCD agree to cooperate in their review of the preliminary report and the exceptions reflected therein and work with the title company on a form of an ALTA owner’s policy of title insurance proforma for the Property, which shall be subject to King City’s approval as set forth in the PSA (such approved title proforma being the “Approved Proforma”). At Closing, fee title to the Property shall be conveyed to the Housing Authority subject only to those matters set forth in the Approved Proforma which shall specifically include the following requirements:
(A) All monetary liens and monetary encumbrances affecting title to the Property shall be either (i) removed from the title by MPB on or before Closing, or (ii) bonded over in accordance with California law to remove same from title, at MPB’s sole cost and expense, including without limitation all mechanic’s lien claims, sufficient to have the title company not show the item on the title policy.

All delinquent and/or defaulted property taxes, and the 2024-25 property taxes shall be paid current through and prorated as of the Closing. (B) HCD shall deliver the Lis Pendens Withdrawal to be recorded at Closing to remove the Lis Pendens from the title policy. (d) Closing Costs. All closing costs for the Escrow shall be apportioned between King City and MPB in accordance with California custom.
(e) Condition of Property. Subject to the terms and requirements of this Agreement and the PSA, the Housing Authority will acquire the Property in “as is” physical condition but free from all tenants, occupants or trespassers.
(f) Recordation of Restrictive Covenant. As set forth in the Restrictive Covenant (attached hereto as Exhibit C), the Restrictive Covenant, which shall be executed, acknowledged, and recorded through Escrow as set forth above, provides, among other things, as follows: (i) HCD shall be expressly named as an intended third-party beneficiary with the direct right, but not the obligation, to enforce all provisions of the covenant; (ii) the term shall run from recordation through the fifty-fifth (55th) anniversary of the issuance of the certificate of occupancy; and (iii) at all times, the Restrictive Covenant shall be senior to any and all monetary liens, deeds of trust or monetary encumbrances. Through Escrow, King City shall cause MPB to remove any title monetary encumbrance (e.g., claim, lien, mortgage, deed of trust or monetary restriction) which may negatively impact the priority of the Restrictive Covenant, and no monetary lien, claim, deed of trust, mortgage or monetary restriction or encumbrance shall be recorded or imposed against the Property at Closing. The Restrictive Covenant shall be subject only to those matters set forth in the Approved Proforma.
(g) Side Agreement. HCD, King City, and the Housing Authority shall execute and deliver through Escrow an agreement in the form attached as Exhibit D hereto (the “Side Agreement”), that provides for, among other things, all of the following: (i) the reimbursement by HCD of the HCD Purchase Contribution Amount post-Closing, (ii) the disbursement by HCD of a total of not more than $1,000,000.00 to King City, as designated payee, upon the satisfactory completion of construction/rehabilitation of the Property, as determined by HCD in its sole and reasonable discretion; (iii) the joint and several liability for performance thereunder by King City and the Housing Authority but with King City’s liability with respect to payment obligations capped at $2,100,000.00 and the Housing Authority indemnifying King City after the Housing Authority has recorded title with respect to the Restrictive Covenant and Homekey requirements; and (iv) their respective agreements, rights, and obligations with respect to the Property, including the post-Closing funding, ownership, and operation thereof. Three (3) fully executed originals of the Side Agreement shall have been delivered to Escrow for distribution as set forth in subsection (b)(iii) above.
(h) HCD Funding. Notwithstanding any of the other terms and conditions hereof, HCD’s overall funding obligation in connection with this transaction is limited to a maximum of $2,100,000 (“Total HCD Contribution”), to be allocated as follows: (i) $1,100,000 as the HCD Purchase Contribution Amount to be reimbursed to King City post-Closing under the Side Agreement; and (ii) $1,000,000 to King City to reimburse it for funds advanced to the Housing Authority for construction/rehabilitation under the Side Agreement. (i) Other Funding Obligations. Except for the Total HCD Contribution, King City and the Housing Authority shall fund all of the remaining project costs, fees and expenses, at their sole cost and expense, including but not limited to: (i) the $3,300,000 balance of the Purchase Price for the Property by obtaining the Grants; (ii) all other costs and expenses of constructing and rehabilitating the 45-unit project as contemplated by the Side Agreement in accordance with Homekey requirements and applicable law; and (iii) all costs and expenses of operating the project as contemplated by the Side Agreement, applicable law, and any funding agreements entered into to secure the funding for the acquisition, construction, and operation of the Property. (j) Conversion and Operation of the Property. Upon transfer of the Property to the Housing Authority, the Housing Authority shall thereafter be responsible for (i) the rehabilitation of the Property as contemplated by the Side Agreement, the Homekey program requirements, and applicable law (collectively the “Applicable Requirements”); (ii) causing the Property to be operated, leased up, and rented in accordance with the Applicable Requirements; and (iii) using its best efforts to secure project-based vouchers to ensure the continued viability of the completed project.
(k) Reporting Requirements. HCD hereby affirms and acknowledges that King City is not going to own, construct, and/or operate the Property for a material length of time; rather, the Property shall be owned, constructed and operated primarily by the Housing Authority following a transfer of fee title to the Housing Authority under the PSA. Pursuant to the Side Agreement, King City shall use its best efforts to ensure timely delivery to HCD of any reporting required under the Homekey program.
(l) Litigation.
(i) Removal of Lis Pendens. HCD shall deliver to Escrow (with a copy to the other Parties) a release of the Lis Pendens from the Property sufficient to cause the removal of the Lis Pendens from title to the Property which shall be recorded at Closing (the “Lis Pendens Withdrawal”).
(ii) Cooperation with Litigation. Following the transfer of the Property from MPB to the Housing Authority at Closing, the Parties will reasonably cooperate with HCD in the litigation as necessary to produce requested documents and to produce available witnesses to testify, upon reasonable request by HCD with respect to third parties and without HCD having to serve a subpoena; provided, that any such Party’s efforts to comply with such requests shall not result in unreasonable time or expense being expended by such Party. (iii) Litigation Standstill. From the Effective Date through the Closing of Escrow, the Parties: (A) shall refrain from initiating any action in the Lawsuit which is contrary to this Agreement including, but not limited to, serving any discovery or filing any motions, cross-complaints, or demurrers directed to any Party; provided, the foregoing shall not apply if a filing deadline is imposed by the relevant court and the failure to file any such required pleading could reasonably cause prejudice to such Party, and (B) shall not transfer, assign, encumber or otherwise alienate any of their respective rights, title, and interests in, to, and under the Lawsuit, this Agreement or the agreements contemplated herein. Each Party hereby represents and warrants to the other Parties that, as of the Effective Date, it has not assigned, transferred, encumbered, or otherwise alienated all or any portion of its respective rights, claims, or interests in, to, under, or with respect to the Lawsuit. (m) Housing Authority. King City hereby represents and warrants to HCD as follows:
(i) that it has obtained the Housing Authority’s acknowledgement of this Agreement; (ii) that the Housing Authority has secured grant funding, in conjunction with the County of Monterey, and is diligently attempting to obtain the grants to fund the acquisition, construction and operation of the Property; and (iii) the Housing Authority shall accept fee title to the Property from MPB in AS-IS condition as contemplated herein and, thereafter, construct and operate the Property, as contemplated by the Side Agreement.
(n) DOF Approval. HCD shall diligently pursue the written approval of the California Department of Finance (“DOF”) of this Agreement and all agreements contemplated hereby (including without limitation the PSA, the Restrictive Covenant, and the Side Agreement) (the “DOF Approval”). HCD shall provide a copy of the DOF Approval to all Parties and the Escrow promptly upon receipt of such approval.

4. Mutual Release. Subject to the satisfaction of all of the terms and conditions of this Agreement, and excepting and excluding only the rights and obligations created by this Agreement, and in consideration of the provisions of this Agreement but only effective as of the satisfaction of all of the Conditions Precedent, the Parties hereby fully release, acquit, and forever discharge each other, and their affiliates, members, partners, employees, appointees, officers, directors, representatives, attorneys, predecessors, and successors, individually, and collectively, (collectively, “Releasees”) from any and all actions, causes of action, obligations, disputes, costs, expenses, attorney fees, damages, losses, claims, debts, liabilities and demands of any character, nature and kind, known or unknown, suspected or unsuspected, filed or unfiled, including but not limited to all claims that have been or could have been, or could be, asserted against any of such Releasees, arising out of or relating solely to the disputes at issue in the Lawsuit and specifically relating to the Property up to the date of the transfer of fee title to the Property to the Housing Authority as contemplated by this Agreement (collectively, “Claims”). Notwithstanding the foregoing, under no circumstances shall Shangri-La Industries, LLC, Step Up on Second Street, Inc., or any of their respective affiliates, members, partners, employees, appointees, officers, directors, representatives, attorneys, predecessors, and successors be deemed to be Releasees.

Each Party understands that it may later discover claims or facts that may be different from, or in addition to, those that it or any other Party now knows or believes to exist regarding the Claims, and which, if known at the time of signing this Agreement, may have materially affected this Agreement and such Party’s decision to enter into it and grant the general release, acquittal and discharge contained in this Agreement. Nevertheless, the Parties intend to fully, finally, and forever settle and release all Claims, whether known or unknown, foreseen or unforeseen, or suspected or unsuspected, and the release, acquittal and discharge given herein is and will remain in effect as a complete release, acquittal and discharge notwithstanding the discovery or existence of such additional or different facts. The Parties hereby waive any right or Claim that might arise as a result of such different or additional claims or facts. Without limiting the generality of the foregoing, the Parties have been made aware of, and understand, the provisions of California Civil Code Section 1542 (“Section 1542”), which provides as follows, and each Party hereby fully waives any and all rights it may have thereunder:

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.

Initials:

HCD MP Credit MPB King City

5. Dismissal of Complaint. HCD will dismiss with prejudice the Lawsuit as against the Parties named as defendants in its Complaint within fifteen (15) days after the Closing and deliver copies to the other Parties.

6. Survival. All of the terms and conditions of this Agreement, including without limitation the releases, acquittals, discharges, and waivers contained in Section 4 above, shall survive the Closing.

7. Further Acts. The Parties agree to perform such further acts and to execute and deliver such further documents as may be reasonably necessary or appropriate to carry out the intent or provisions of this Agreement.

8. Successors. The Parties agree that they will not transfer, assign, encumber, or otherwise alienate all or any interest in this Agreement without the advance written consent of the other Parties. Subject to the foregoing, this Agreement shall bind and inure to the benefit of the successors of the Parties.

9. Construction.
(a) Each of the Parties has been represented by and has had an opportunity to consult independent legal counsel in connection with the negotiation, preparation, and execution of this Agreement. The Parties further agree that this Agreement is the product of their mutual preparation and, accordingly, it shall not be deemed to have been prepared or drafted by any one Party. The Parties further agree that any court or tribunal seeking to interpret this Agreement should construe it as the product of mutual preparation. Any rule of construction to the effect that ambiguities are to be construed against the drafting party (including, without limitation, California Civil Code Section 1654) shall not apply in interpreting this Agreement and is hereby waived by the Parties. (b) The Parties agree that all headings used in this Agreement are provided for convenience only and shall not be used to construe meaning or intent. The Parties further agree that, when used in this Agreement, the terms “must” and “shall” denote a mandatory contractual obligation and are not permissive.

10. Governing Law and Venue. This Agreement shall be construed in accordance with and governed by the law of the State of California, without giving effect to the conflict of law principles thereof. Venue for any dispute arising from this Agreement shall be the Superior Court of the County of Monterey.

11. Electronic Execution; Counterparts. This Agreement may be signed by the Parties in multiple counterparts, all of which shall be taken together as a single document. Electronic execution in compliance with UETA and ESIGN using qualified third-party providers such as DocuSign or AdobeSign is acceptable. After the execution of this Agreement, documents to be delivered under this Agreement may be by PDF or facsimile except for any documents which must be recorded which must be with wet signatures.

12. No Admission. It is expressly understood and agreed that this Agreement is entered solely for the purpose of avoiding the expense and inconvenience of further litigation and that this Agreement is not to be construed as an admission by any of the Parties of any liability whatsoever.

13. Modification, Amendment. No modification or amendment to this Agreement shall be effective unless it is express, in writing, and signed by all Parties to this Agreement.

14. 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.

15. Disclosure to the Public. All Parties consent to HCD’s and King City’s disclosure of this Agreement to the public pursuant to and as required by the California Public Records Act at Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code.

16. Fees and Expenses.
a. Fees Incurred for this Agreement. The Parties shall bear their own attorney fees and expenses incurred with respect to the matters that are the subject matter hereof including, without limitation, the negotiation and implementation of this Agreement, the Side Agreement, the Restrictive Covenant and the PSA. b. Future Dispute. In the event of any dispute, motion, action, litigation, or disagreement arising out of or relating to the terms and conditions of this Agreement and/or performance or enforcement thereof, the prevailing party shall be entitled to its reasonable attorney fees actually incurred, together with expert witness expenses, and other costs relating to any such proceeding or litigation unless the Court finds the dispute or disagreement on which the claim for fees and costs is based was in good faith.

17. Exhibits. Exhibit A, Exhibit B, Exhibit C, and Exhibit D attached hereto are incorporated herein by reference in full and made a part of this Agreement.

18. No Representations. Except as specifically set forth in this Agreement, the Parties agree that no promise, inducement, representation, or agreement not expressed in this Agreement has been made, and that the terms of this Agreement are contractual and not a mere recital.

19. Integration Clause. This Agreement contains the entire agreement of the Parties with respect to the Settlement and supersedes any prior written or oral agreements between or among them concerning the subject matter contained herein. There are no representations, agreements, arrangements, or understandings, oral or written, relating to the subject matter contained herein which are not fully expressed herein, in the PSA, in the Side Agreement or in the Restrictive Covenant.
[The remainder of this page is intentionally left blank.] [Signature Page to Settlement Agreement]
REMINDER: ALL PARTIES MUST INITIAL SECTION 4.

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the dates opposite their signatures below.

MP Credit: HCD:

MEDALIST PARTNERS ASSETBASED PRIVATE CREDIT FUND III

CRE LLC,
a Delaware limited liability company
By: ________________________
Name:

Title:

Dated: March ____, 2025

CALIFORNIA DEPARTMENT OF

HOUSING AND COMMUNITY
DEVELOPMENT, a public agency of
the State of California
By: ________________________
Dated: March ____, 2025
MPB: King City:

MP BROADWAY STREET, LLC,
a Delaware limited liability company
By: Medalist Partners Asset-Based Private
Credit Master Fund III-B, LP,
a Cayman Islands limited partnership,
its member
By: ______________________
Name:

Title:

Dated: March ____, 2025
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: March ____, 2025
Exhibit A
Legal Description of Property
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

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:

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.

Exhibit B
PSA
Exhibit C
Restrictive Covenant
Exhibit D
Side Agreement

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.” THE DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT, a public agency of the State of California (“Department” or “HCD”) 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
A. Capitalized terms used but not defined in these recitals are as defined in Section 2 of this Declaration.

B. The Department issued a Notice of Funding Availability (“NOFA”) for the Homekey Program, pursuant to California Health and Safety Code section 50675.1.3 ("Homekey Program"), on September 9, 2021 and amended it on January 14, 2022, May 5, 2022, and December 11, 2024. The NOFA incorporates by reference 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 Program”), as well as the MHP Final Guidelines, dated June 19, 2019, both as amended and in effect from time to time (“MHP Guidelines”).

C. 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 11(C) Exhibit 2

and one (1) manager’s unit (collectively, the “Development”). The Real Property and the Development are referred to in this Declaration as the "Property." D. Owner will own and operate the Property as Permanent Housing in accordance with the Program Requirements, as defined herein.

E. This Declaration is being recorded pursuant to Program Requirements that City cause the recordation of a fifty-five (55) year use restriction against the fee title to the Property.

NOW, THEREFORE, in consideration of the foregoing premises, the Department’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) “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.
(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 adopted by HCD 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.