Interim Funding Agreement
INTERIM FUNDING AGREEMENT
THIS INTERIM FUNDING AGREEMENT, entered into as of April ___, 2022 (“Agreement”), is entered into by and between the CITY OF ALAMEDA, a charter city and municipal corporation (“City”); FIVE KEYS SCHOOLS AND PROGRAMS, a California non-profit 501(c)(3) corporation (“Five Keys”); and DIGNITYMOVES, a California non-profit 501(c)(3) corporation (“DignityMoves”) with the foregoing entities collectively referred to herein as “the Parties,” is made with reference to the following:
RECITALS
A. The City is a charter city and municipal corporation duly organized and validly existing under the laws of the State of California with the power to carry on its business as it is now being conducted under the statutes of the State of California.
B. The City, Five Keys, DignityMoves and the Successor Agency to the City’s Community Improvement Commission (“SACIC”) have been jointly awarded an approximately $12.2 million grant from the State of California’s Project Homekey Round 2 fund (“Homekey”) for the purpose of building an interim supportive housing development for unhoused individuals (“Project”). The Project is to be constructed on a currently vacant parcel owned or to be owned by the City located at 2530 5th Street, commonly referred to as the “Bottle Parcel.”
C. The State Housing and Community Development Department (“HCD”) will allocate the portion of the grant intended to cover Project construction costs (approximately $ 9,225,536) to Five Keys, who will distribute all of such funds related to the construction to DignityMoves, as the Project’s development manager, in response to construction draw requests from DignityMoves. HCD will allocate the remaining portion of the grant intended to cover ongoing post-construction Project operational and maintenance costs (approximately $3,025,844) to the City. Five Keys will act as the primary Project operator after construction and will be supervised by the City in that role.
D. Although HCD has already informed the City, Five Keys, DignityMoves and SACIC of the $12.2 million Homekey grant award, it has not yet disbursed any portion of those funds. Additionally, pursuant to non-negotiable Homekey regulatory requirements, the City must ensure that the Project is constructed and fully operational within eight (8) months of the Homekey award or risk losing a significant portion of the award tied to the aggressive timeline. The City therefore seeks to ensure that a portion of the Project construction costs be immediately available to Five Keys and DignityMoves, so that construction is not delayed pending HCD’s disbursement of the funds.
Interim Funding Agreement
AGREEMENT
NOW, THEREFORE, in consideration of the forgoing, which are incorporated herein by reference, and for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties agree as follows:
1. FUNDS ADVANCED BY CITY TO FIVE KEYS.
In exchange for the execution of this Agreement and a promissory note executed by FiveKeys (as Borrower), City agrees to advance to Five Keys $2,000,000 to fund both hard and soft costs related to construction of the Project (“Permitted Costs”). The funds shall be promptly paid by City to Five Keys upon the execution of this Agreement by all Parties and execution and delivery to the City of the promissory note described herein (the “Promissory Note”).
2. REPAYMENT OF FUNDS TO CITY.
Five Keys shall repay to City any and all funds that are advanced by City to Five Keys pursuant to this Agreement. The repayment shall be pursuant to the Promissory Note, the form of which is attached as Exhibit A.
3. USE OF FUNDS.
All funds advanced by the City pursuant to this Agreement shall be used to fund Permitted Costs. DignityMoves will serve as the development manager for the general contractor for the Project. As DignityMoves incurs Permitted Costs, it shall make written requests for reimbursement (“Draw Request”) to Five Keys, which Draw Request shall specify the amount requested, the purpose of the funds and be accompanied by such evidence of incurrence of the cost as requested by Five Keys. Five Keys shall disburse the applicable portion of the funds to DignityMoves. Prior to any disbursement to DignityMoves, Five Keys shall ensure that DignityMoves has complied with the City’s Project Stabilization Agreements.
4. HOLD HARMLESS.
To the fullest extent permitted by law, Five Keys shall indemnify, defend (with counsel acceptable to the indemnified parties) and hold harmless, City, its City Council, boards, commissions, officials, employees, agents and volunteers ( collectively, “Indemnitees”) as well as DignityMoves from and against any and all loss, damages, liability, obligations, claims, suits, judgments, costs and expenses whatsoever, including reasonable attorney’s fees and costs of litigation (“Claims”), arising from or in any manner connected to Five Keys’ performance of its obligations under this Agreement. Five Keys shall not have any obligations to indemnify Indemnitees or DignityMoves for any loss or damage found to have resulted from the negligence or the willful misconduct of the Indemnitees or DignityMoves, City. In the event the Claims are caused in part by the negligence of the Indemnitees or DignityMoves, the indemnification by Five Keys shall be prorated based on the extent of the liability of the such parties.
To the fullest extent permitted by law, DignityMoves shall indemnify, defend (with counsel acceptable to the City) and hold harmless Five Keys and the Indemnitees from and against any and all Claims arising from or in any manner connected to DignityMoves’ Interim Funding Agreement
performance of its obligations under this Agreement. DignityMoves shall not have any obligations to indemnify Indemnitees or Five Keys if the loss or damage is found to have resulted from the negligence or the willful misconduct of Five Keys or the Indemnitees. In the event the Claims are caused in part by the negligence of Five Keys or the Indemnitees, the indemnification by DignityMoves shall be prorated based on the extent of the liability of such parties.
The defense and indemnification obligations of this Agreement are undertaken in addition to, and shall not in any way be limited by, the insurance obligations contained in this Agreement. Five Keys’ and DignityMoves’ obligations to indemnify, defend and hold harmless each other and Indemnities shall ex pressly survive the expiration or early termination of this Agreement.
5. DEFAULT.
In the event Five Keys or DignityMoves fails or refuses to perform any of the provisions in this Agreement that party shall be deemed in default in the performance of this Agreement and the City may elect to immediately terminate the Agreement. The termination of this Agreement pursuant to this Section shall be considered an event of default under the Promissory Note. The obligation of the parties under this Section shall survive the expiration or early termination of this Agreement.
6. ATTORNEYS’ FEES.
In the event of the bringing of any action or suit by a party hereto against the other party by reason of any breach of any covenants, conditions, obligation or provision arising out of this Agreement, the prevailing party shall be entitled to recover from the non - prevailing party all of its costs and expenses of the action or suit, including reasonable attorney’s fees, experts’ fees, all court costs and other costs of action incu rred by the prevailing party in connection with the prosecution or defense of such action and enforcing or establishing its rights hereunder (whether or not such action is prosecuted to a judgment).
7. GENERAL PROVISIONS.
This Agreement shall be interpreted under, and enforced by the laws of the State of California without regard to any choice of law rules which may direct the application of laws of another jurisdiction. Any suits brought pursuant to this Agreement shall b e filed with the courts of the County of Alameda, State of California. A waiver by the City of any breach of any term, covenant, or condition contained herein shall not be deemed to be a waiver of any subsequent breach of the same or any other term, coven ant, or condition contained herein, whether of the same or a different character. The Recitals and exhibit are a material part of this Agreement and are expressly incorporated herein. This Agreement represents the full and complete understanding of every kind or nature whatsoever between the parties hereto, and all preliminary negotiations and agreements of whatsoever kind or nature are merged herein. No verbal agreement or implied covenant shall be held to vary the provisions hereof. Any modification of this Agreement will be effective only by written execution signed by all parties. This Agreement may be executed in any number of counterparts (including by fax, PDF, DocuSign, or other Interim Funding Agreement
electronic means), each of which shall be deemed an original, but a ll of which shall constitute one and the same instrument. By signing this Agreement, signatory warrants and represents that they executed this Agreement in their authorized capacity and that by their signature on this Agreement, they or the entity upon be half of which they acted, executed this Agreement.
IN WITNESS WHEREOF, the parties have each caused this Agreement to be duly executed on its behalf as of the Effective Date.
CITY OF ALAMEDA,
a municipal corporation
By: _______________________
Name: Eric Levitt, City Manager
Recommended for approval:
By: __________________________
Lisa Nelson Maxwell
Community Development Director
Approved as to form:
By: ________________________
Elizabeth Mackenzie
Chief Assistant City Attorney
DIGNITYMOVES,
a California corporation
By _________________
Name: Elizabeth Funk, Chairman
FIVE KEYS SCHOOLS AND
PROGRAMS,
a California nonprofit public benefit
corporation
By ____________________________
Name: Steve Good, Chief Executive
Officer
Interim Funding Agreement
Exhibit A to Interim Funding Agreement
EXHIBIT A
CITY OF ALAMEDA
PROMISSORY NOTE
(Five Keys Schools and Programs to City of Alameda)
$2,000,000 April___, 2022
FOR VALUE RECEIVED, the undersigned, Five Keys Schools and Programs, a California non-profit corporation (the “Borrower”) hereby promises to pay to the order of the City of Alameda, a charter city and municipal corporation (the "Lender"), the principal amount of Two Million Dollars ($2,000,000), as set forth herein.
1. Borrower's Obligation. This promissory note (the "Note") evidences the Borrower's obligation to pay the Lender the total principal amount of Two Million Dollars ($2,000,000). The Borrower shall use the proceeds of the loan in that same amount provided by the Lender to finance hard and soft costs related to the construction of the interim supportive housing for unhoused individuals to be developed at the real property located at 2350 5th Street, commonly known as the “Bottle Parcel” (the “Project”). The loan is intended to provide gap financing for the Project until the State of California disburses Homekey Round 2 grant funding to the Borrower, and is being made by the City pursuant to that certain Interim Funding Agreement dated of even date herewith entered into among the Lender, the Borrower and Dignity Moves, a California nonprofit corporation.
2. Interest. The principal balance of this Note shall not bear interest.
3. Term and Repayment Requirements. The term of this Note (the "Term"), shall commence on the date of this Note and shall expire on the date (the "Maturity Date") that is forty-five (45) days after the Borrower receives Homekey Round 2 grant funds in the amount of $_____ from the State of California Department of Housing and Community Development. Borrower shall repay the entire loan to the Lender in the amount of Two Million Dollars ($2,000,000) on or before the Maturity Date. Upon the expiration of the Term, all remaining amounts, if any, due under this Note shall be immediately due and payable. Notwithstanding the foregoing, the Borrower shall have the right to prepay all or a portion of the principal due under this Note without any charge or penalty.
4. Acceleration. Upon the occurrence of an Event of Acceleration under this Note, and in addition to any other rights and remedies that Lender may have, Lender shall have the right, at its sole and exclusive option, to declare this Note immediately due and payable. An Event of Acceleration includes the following:
Exhibit A to Interim Funding Agreement
(a) Borrower becoming insolvent or is not paying its debts as they become due.
(b) Borrower defaulting on the Interim Funding Agreement, which was entered into by Lender and Borrower on or about April ___, 2022.
5. Terms of Payment. All payments due under this Note shall be paid in currency of the United States of America, which at the time of payment is lawful for the payment of public and private debts.
6. Notice. All notices required or permitted in connection with this Note will be in writing and will be given to Lender at Alameda City Hall (City Manager’s Office) 2263 Santa Clara Avenue, Alameda, CA 94501 and to Borrower at 70 Oak Grove Street, San Francisco, CA 94107. Either party may change its address for notice by written notice to the other.
7. Delay in Repayment. Borrower agrees that if any amounts due under this Note are not paid when due, it shall also pay all costs and expenses of collection and reasonable attorney’s fees paid or incurred in connection with the collection or enforcement of this Note, whether or not suit is filed. If any action is brought to enforce the terms of this Note, the prevailing party shall be entitled to reasonable attorneys’ fees and costs.
8. Miscellaneous Provisions.
(a) This Note may not be changed orally, but only by an agreement in writing signed by the party against whom enforcement of any waiver, change, modification or discharge is sought with an approval action by the City Manager or Finance Director.
(b) This Note shall be governed by and construed in accordance with the laws of the State of California.
(c) If any provision of this Note is deemed unenforceable, the validity, legality and enforcement of the remaining provisions in this Note are not in any way affected or impaired hereby.
(d) Time is of the essence with respect to every provision of this Note.
[Signatures on following page]
Exhibit A to Interim Funding Agreement
IN WITNESS WHEREOF, the undersigned have executed this Promissory Note as of the date first written above.
BORROWER:
FIVE KEYS SCHOOLS AND PROGRAMS, a
California non-profit corporation
By: ______________________________
Steve Good,
Chief Executive Officer
Five Keys Schools and Programs
APPROVED AS TO FORM:
______________________
Yibin Shen, City Attorney
City of Alameda