2021-007 - Evidencing the City's Intent to Establish a PACE ProgramRESOLUTION NO. 2021-007
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PARIS, TEXAS
EVIDENCING THE CITY'S INTENT TO ESTABLISH A PACE PROGRAM.
FOR THE CITY, MAKING OTHER FINDINGS AND PROVISIONS
RELATED TO THE SUBJECT; AND DECLARING AN EFFECTIVE DATE.
WHEREAS, The 83rd Regular Session of the Texas Legislature enacted the Property
Assessed Clean Energy Act, Texas Local Government Code Chapter 399 (the "PACE Act'j,
which allows the governing body of a local government, including City of Paris, Texas (the
"City"), to designate an area of the territory of the local government as a region within which
an authorized representative of the local government ("Authorized Representative") and the
record owners of commercial, industrial, and large multifamily residential (5 or more
dwelling units) real property may enter into written contracts to impose assessments on the
property to repay the financing by the owners of permanent improvements fixed to the
property intended to decrease water or energy consumption or demand; and
WHEREAS, the installation or modification by property owners of qualified energy or
water saving improvements to commercial, industrial, agricultural, and large multifamily
residential real property in the City will further the goals of energy and water conservation
without cost to the public; and
WHEREAS, the City Council finds that financing energy and water conserving projects
through contractual assessments (`PACE frnancing'3 furthers essential government
purposes, including but not limited to, economic development, reducing energy
consumption and costs, and conserving water resources; and
WHEREAS, the City Council, subject to the public hearing scheduled as provided
below, at which the public may comment on the proposed program and the report issued
contemporaneously with this resolution, finds that it is convenient and advantageous to (i)
establish a pilot program under the PACE Act in connection with the Paris Lakes Medical
Center ("Pilot Project") and (ii) expand the program beyond the Pilot Project whereby the
Authorized Representative and the record owners of qualified real property may enter into
PACE financing arrangements:
THEREFORE, be it resolved by the City Council of the City of Paris, Texas that:
Section 1. The Recitals to this Resolution are true and correct and are
incorporated into this Order for all purposes.
Section 2. City hereby adopts this Resolution of Intent and finds that financing
qualified projects through contractual assessments pursuant to the PACE Act is a valid public
purpose.
Section 3. City intends to make contractual assessments to repay PACE financing
for qualified energy or water conserving projects available to owners of commercial,
industrial, agricultural, and large multifamily residential real property. The program is to be
called "City of Paris, Texas Property Assessed Clean Energy Program," ("PACE program'.
Section 4. The following types of projects are qualified projects for PACE
financing that may be subject to such contractual assessments: Projects that (a) involve the
installation or modification of a permanent improvement fixed to privately owned
commercial, industrial, or agricultural real property or residential real property with five (5)
or more dwelling units, and (b) are intended to decrease energy or water consumption or
demand, including a product, device, or interacting group of products or devices on the
customer's side of the meter that uses energy technology to generate electricity, provide
thermal energy, or regulate temperature.
An assessment may not be imposed to repay the financing of facilities for
undeveloped lots or lots undergoing development at the time of the assessment or the
purchase or installation of products or devices not permanently fixed to real property.
Section 5. The boundaries of the entire geographic area within City's jurisdiction
are the boundaries of the region where PACE financing and assessments can occur.
Section 6. Financing for qualified projects under the PACE program will be
provided by qualified third -party lenders chosen by the owners. Such lenders may execute
written contracts with the Authorized Representative to service the assessments, as
required by the PACE Act. The contracts will provide for the lenders to determine the
financial ability of owners to fulfill the financial obligations to be repaid through
assessments, advance the funds to owners on such terms as are agreed between the lenders
and the owners for the installation or modification of qualified projects, and service the debt
secured by the assessments, directly or through a servicer, by collecting payments from the
owners pursuant to contracts executed between the lenders and the owners. The lender
contracts will provide that City will maintain and continue the assessments for the benefit of
such lenders and enforce the assessment lien for the benefit of a lender in the event of a
default by an owner. City will not, at this time, provide financing of any sort for the PACE
program.
Section 7. For the Pilot Project, City will work with the lender for the Pilot Project
to handle administrative requirements. After the Pilot Project is established, City may
contract with a qualified organization to be the independent third -party program
administrator.
Section 8. The report on the proposed PACE program prepared as provided by
Tex. Local Gov't Code Sec. 399.009, is available for public inspection on the Internet website
of City (iym f) ; j� ) and in the office of the City at 150 1st St. SE, Paris, Texas 75460
and is incorporated in this resolution and made a part hereof for all purposes.
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Section 9. The City Council will hold a public hearing on the proposed PACE
program and report on March 22, 2021 at 5:30 p.m. in the City Council Chamber located at
107 E. Kaufman Street, Paris, Texas 75460.
PASSED AND APPROVED this 22nd day of February, 2021.
Ellis, City Clerk
APPROVED AT TO FORM:
;pi anie H. Harris, City Attorney
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,� ro
Clifford,M
Steve J. .D., Mayor
R.iir,ii�OR'I'FOR .P.IlRoposiiiA.iii.) PACE PROGRAM
IkEpoivii�, REQUIRED By MP.',XA.,SI...ocAi,OV ERNMENT.'COIDE SECT1110N 399.009
FOR PRO11POSEWPHE C11117Y OF PAR.III.S,TX
PROPERTY AsSESSED C.IXAN ENKIRGV(PACE) P11ROCMAM
'1711'ns Report is adopted. by the City Council for the City ofParis, Texas ("City") Property
Assessed Clean. Energy (PACE) program (the ",PA(,`.E frogram") ir). accordance with, the
requirements of the Property AssessedClean Energy Act (the as set Iorth iri. Texas
Local Governinent Code Chapter 399.
City and its constituents benefit when existing buildings are modiFied aw.d new buildings
on developed. lots are built with new techriology and equipment that increases energy efficiency
and reduces water consurription, As described in t1his Report, City is establishing the commercial
PACE Prograin to crtcourage private sector iTINestment in. energy efficiency and water
COTISMation. The PACE Prograim will. be offered to procity owner's onn as strictly voluntary basis
and will nainimize the use of any putfflc fun(Is or rresourcs.
Ai.fthorized under the PAC Act enacted in 2013, the PACE 1Program is an. innovative
financing progran"i that, enables private sector owri.ers of pn.vately owned commercial, industrial,
and multifarn ily residential properties with five or n.-.mre dwellit-ig units to obta rri. low cost,
long-term loans to I'my fbr water conservation, energy efficiency improvements, and renewable
energy retrofits, PACE loans provide up to 100% financing of all pro.ject costs, with little or i:io
up -front out of -pocket cost to the owner. The 201.5 legislative session streamlined the process,,
L,oans made under the PACE Program will. be secured by assessments or). the property that
are voluntarily i.ryiposed by the owner. Assessments may be arnortized over the projected Il.ile of
the improverneants . The annual utility cost savings derived. frorn improvements financed. with
PACE loans are intended to ex.ceed the arnount of the annual assessi.,.Yiient payments. When
succ,,essful, these iniprovements are dble to generate positive cassli. flow uponinstallation because
the debt strvice will be less thzm. the savings.
PACE assess-inents are tied tcu the property and follow -title from one owner to tbe next.
Each owner is responsible only filar payrnent of the assessments accruing dUriT'Ilg itS period of
ownership. Whcn the property is sold, the payment obligatiori, for the rernaining balance of the
assessm.o.,,nt is transfel"red autornati(;.ally to the next owner. As as result, the program. will In
property owners overcorne market barriers which oftcn discourage investrnent in energy efficiency
and water conservation ini.1provernents.
City intends to begin its PACE Progjarn. with a pilot pr(:nject in connection with. the
developinent, of the Paris Lakes Medical Center (t1w "IIiIot.1`Irqject"),, The Pilot Project is expected.
ton include a new five story, 114 ---bed hospital. containing approximately 198,000 square feet of
space, feati.iring (a) as surgical su ite with, six operating rooms supported by an 18 bed prep and post. -
anesthesia care unit, (l-)) 80 rnedical/surgical patient beds, (c) a cardiac catheterization lab suite
with two catheterization labs supported. by 18 preparation arld recovery roarns, and 14entical
cardiac, coronary, or cardiovascular unit beds, (d) ail eight -bed critical[ care unit, and (e) an imaging
suite with radio fluoroscopy, CT, MRI, ultrasound, EKG, PFT, and nuclear medicine. The hospital
will feature the latest, state-of-the-art medical technology and equipment, all private suites with
upscale room accommodations including custom flooring and trim, flat screen televisions, private
baths, wireless intemet and room service dining. The overall design concept will emphasize an
atmosphere of hospitality, nurturing and safety throughout the hospital. Patient room design will
provide distinct areas to accommodate patients' families and staff with an overall emphasis on
safety. Staff areas are designed to allow for quick and easy access to patients throughout the
hospital. The hospital is to be built on a developed lot in accordance with the requirements of the
PACE Act.
Additionally, City intends to establish infrastructure to broaden the PACE Program to other
property owners within its boundaries, which may include delegation of authority and
responsibility for administering the PACE Program to a qualified, third party administrator, which
will further the goal of implementation the PACE Program on terms in a manner that minimizes
the use of public funds or resources.
SECTION 1. ELIGIBLE PROPERTIES.
"Eligible Properties " include commercial, industrial, and multifamily residential
properties with five or more dwelling units. Government, residential properties encompassing less
than five units, and undeveloped property and property undergoing development at the time of the
assessment are not Eligible Properties.
The City PACE Program is a strictly voluntary program. While initially focused on the
Pilot Project, City intends for financing under the PACE Program to eventually be available to all
private -sector owners of Eligible Properties located within the City PACE Program.
SECTION 2. QUALIFIED IMPROVEMENTS.
PACE financing may be used to pay for permanent improvements intended to decrease
water or energy consumption or demand, including a product, device, or interacting group of
products or devices on the customer's side of the meter that use energy technology to generate
electricity, provide thermal energy, or regulate temperature ("Qualified Improvements") to Eligible
Properties. Under the PACE Act, products or devices that are not permanently fixed to real
property are not considered to be Qualified Improvements.
Typical examples of qualified improvements include:
• HVAC upgrades;
• High efficiency chillers, boilers, and furnaces;
• High efficiency water heating systems;
• Energy management systems and controls;
• Renewable energy systems; Mechanical system modernization;
• High efficiency lighting upgrades;
• Building enclosure/envelope improvements;
• Water conservation systems;
• Combustion and burner upgrades;
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• Fuel switching;
• Heat recovery and steam traps;
• Wastewater recovery and reuse systems;
• Systems to capture and use alternate, on-site sources of water (A/C condensate, rainwater,
reverse osmosis reject water, foundation drain water, etc.);
• On-site improvements to accommodate the use of municipally reclaimed water;
• Water management systems and controls (indoor and outdoor);
• Switching from water cooled systems to air or geothermal cooled systems; and
• High efficiency irrigation equipment
SECTION 3. BENEFITS OF PACE TO PROPERTY OWNERS.
The PACE Program will enable owners of Eligible Properties to overcome traditional
barriers to capital investments in energy efficiency and water conservation improvements, such as
unattractive returns on investment, split incentives between landlords and tenants, and uncertainty
of recouping the investment upon sale of the property.
By financing Qualified Improvements through the program, property owners may achieve
utility cost savings that exceed the amount of the assessment and reduce their exposure to utility
price volatility. As a result, the value of the property will be enhanced, and the owner will only
be obligated to pay the assessment installments that accrue during its period of ownership of the
property. Additionally, by investing in energy efficiency and water conservation with PACE
financing, property owners may also qualify for various rebate, tax credit, and incentive programs
offered by utility providers and state or federal governmental authorities to encourage these types
of investments.
SECTION 4. BENEFITS OF PACE TO THE CITY.
The City has a large contingent of aging building stock, some of which is 100 years old or
older, most of which would benefit greatly from eligible improvements and the benefits that PACE
has to offer. Moreover, to the extent that new buildings meeting the eligibility requirements of the
PACE Act can be made more energy and water efficient, the City benefits in the ways highlighted
below.
Among other things, projects financed through PACE will:
• Enable property owners and occupants to save substantial amounts in utility costs
• Reduce demand on the electricity grid
• Mitigate greenhouse gas emissions associated with energy generation
• Enhance the value and efficiency of existing buildings
• Boost the local economy by creating new job opportunities for laborers and new
business opportunities for contractors, engineers, commercial lenders, professionals,
and equipment vendors and manufactures
• Increase business retention and expansion in the PACE region by enabling cost
effective energy and water saving updates to existing property
• Improve productivity through optimized energy usage
• Support the State's water conservation plan
• Better enable City to meet its water conservation goals
By creating new investment opportunities, PACE will stimulate employment growth and
economic development in City. Improvements financed through PACE will reduce energy and
water consumption, thereby helping the local water utility, local energy, and other utility providers
and their customers achieve critical energy and water conservation goals. For communities facing
potential nonattainment levels under the Clean Air Act, PACE provides a very real opportunity to
dramatically reduce building energy consumption and the emissions associated with energy
generation. PACE Programs will also improve the quality of the County's commercial and
industrial building stock. The benefits of PACE for City are magnified by the fact that PACE
Programs can be established with minimal support from the local government and, once
established, can be self-sustaining.
City intends for the PACE Program to be self-sustaining because it will be primarily funded
by fees paid by the lenders and/or property owners in connection with the projects. Furthermore,
because the PACE Program is tax neutral, it achieves all of the benefits listed in this Report without
imposing a burden on City's general fund.
The 84th Texas Legislature added a provision that explicitly shields City and its employees
from liability resulting from administering a PACE Program. I
SECTION 5. THE BENEFITS OF PACE To LENDERS.
PACE loans are attractive to lenders because they are very secure investments. Like a
property tax lien, the assessment lien securing the PACE loan has priority over other liens on the
property. Therefore, the risk of loss from non-payment of a PACE loan is low compared to most
other types of loans. PACE assessments provide lenders with an attractive new product to assist
existing and new customers in addressing an almost universal pent-up demand for needed
commercial and industrial property equipment modernization. In order to protect the interests of
holders of existing mortgage loans on the property, the PACE Act requires their written consent
to the PACE assessment as a condition to obtaining a PACE loan.
ITX. Local Gov't Code §399.019.
SECTION 6. THE BENEFITS OF PACE TO CONTRACTORS, ENGINEERS, AND MANUFACTURERS.
PACE loans provide attractive sources of financing for water and energy saving retrofits
and upgrades, thereby encouraging property owners to make substantial investments in existing
commercial and industrial buildings. As a result, PACE will unlock business opportunities for
contractors, engineers, and manufacturers throughout the commercial and industrial sectors.
SECTION 7. ADMINISTRATION OF THE PACE PROGRAM.
Under the PACE Act, the establishment and operation of the program are considered to be
governmental functions. The PACE Act further authorizes City to enter into a contract with a third
party to provide administrative services for the PACE Program (the "Program Administrator ").
For the Pilot Project, Grayson Path, City Manager (or his successor or designee), is
designated as the initial "Authorized Representative" of the City for the PACE Program, and will
have the authority to enter into written contracts on behalf of City with property owners and lenders
in connection with the PACE Program. City will require the lender for the Pilot Project to agree
to handle all ongoing administrative requirements of City with respect to the Pilot Project.
Going forward, City may delegate administration of the PACE Program to a qualified
organization that can administer the program at no cost to City ("Program Administrator"). The
Program Administrator will be funded by transaction fees paid by the parties, charitable grants or
other sources of revenue. The Program Administrator will not receive compensation or
reimbursement from City. City may contract with the Program Administrator to provide
administrative services. City may designate the Program Administrator as the Authorized
Representative of City with the authority to enter into written contracts on behalf of City with
property owners and lenders in connection with the PACE Program, which will further reduce
administrative burdens on City staff.
SECTION S. ELIGIBLE LENDERS.
The PACE Act does not set criteria for financial institutions or investors to be PACE
lenders. City will follow best practices of other PACE Programs by recommending that lenders
be:
• Any federally insured depository institution such as a bank, savings bank, savings and
loan association and federal or state credit union;
• Any insurance company authorized to conduct business in one or more states;
• Any registered investment company, registered business development company, or a
Small Business;
• Small business investment company;
0 Any publicly traded entity; or
• Any private entity that:
O Has a minimum net worth of $5 million; and
Has at least three years' experience in business or industrial lending or commercial
real estate lending (including multifamily lending), or has a lending officer that has
at least three years' experience in business or industrial lending or commercial real
estate lending; and
0 Can provide independent certification as to availability of funds; and
All lenders must have the ability to carry out, either directly or through a servicer, the
bookkeeping and customer service work necessary to manage the assessment accounts.
Any lender can participate in the PACE Program as long as it is a financially stable entity
with the ability to carry out, either directly or through a servicer, the bookkeeping and customer
service work necessary to manage the assessment accounts. The property owner, not City,
Authorized Representative, or the Program Administrator, selects the lender.
The Authorized Representative, or the Program Administrator, as applicable, will not
guarantee or imply that funding will automatically be provided from a third -party lender, imply or
create any approval, endorsement or certification of, or responsibility for, any lender; or create any
type of express or implied favoritism for any eligible lender.
SECTION 9. REQUIRED COMPONENTS OF THE PACE PROGRAM.
As required under Section 399.009 of the PACE Act, the following describes all aspects of
the PACE Program:
(a) Map of Region. A map of the boundaries of the region included in the
program is attached to this Report as Exhibit 1. The region encompasses the City limits..
(b) Form Contract with Owner. A form contract between City and the record
owner of the Eligible Property is attached as Exhibit 2. It specifies the terms of the
assessment under the PACE Program and the financing to be provided by an eligible lender
of the property owner's choosing.
(c) Form Contract with Lender. A form contract between City and the eligible
lender chosen by a property owner is attached to this Report as Exhibit„ 3. It specifies the
financing and servicing of the debt through assessments.
(d) Qualified Improvement. The following types of projects are qualified
improvements that may be subject to contractual assessments under the PACE Program:
Projects that (1) involve the installation or modification of a permanent
improvement fixed to privately owned commercial, industrial or residential real
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property with five (5) or more dwelling units;2 and (2) are intended to decrease
energy or water consumption or demand by installing a product, device, or
interacting group of products or devices on the customer's side of the meter that
uses energy technology to generate electricity, provide thermal energy, or regulate
temperature.3
A sample list of potential Qualified Improvements appears in Section 2 above.
The PACE Program may not be used to finance improvements to undeveloped lots
or lots undergoing development at the time of the assessment, or for the purchase or
installation of products or devices not permanently fixed to real property.4
(e) Authorized Representative. For the Pilot Project, Grayson Path, City
Manager (or his successor or designee), is designated as the "Authorized Representative"
authorized to enter into written contracts on behalf of City with property owners and
lenders. For future PACE projects, City may designate a Program Administrator as the
"Authorized Representative," and may delegate all or some official administrative
responsibilities, like the execution of individual contracts with property owner and lenders,
to the Program Administrator.5 This relationship will be monitored and maintained by the
City Manager, or his/her designee.
(f) Plans for Insuring Sufficient Capital. Lenders will extend loans to finance
Qualified Improvements. Financing documents executed between owners and lenders will
impose a contractual assessment on Eligible Property to repay the owner's financing of the
Qualified Improvements. The lenders will ensure that property owners demonstrate the
financial ability to fulfill the financial obligations to be repaid through contractual
assessments.
(g) No Use of Bonds or Public Funds. City does not intend to issue bonds or
use any other public monies to fund PACE projects. Property owners will obtain all
financing from the eligible lenders they choose.
(h) Limit on Length of Loan. One of the statutory requirements for a PACE
loan is that the assessment payment period cannot exceed the useful life of the Qualified
Improvement that is the basis for the loan and assessment. As part of the application
process, the property owners will submit a third -party review showing the water or energy
baseline conditions and the projected water or energy savings. This review will aid the
2 TX. Local Gov't Code §399.002(5).
3 TX. Local Gov't Code §399.002(3).
4 TX. Local Gov't Code §399.004.
5 HB 3187 was signed into law on June 16, 2015. It authorizes City to delegate administration of the Pace
program to a third -party "representative".
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Authorized Representative in making a determination that the period of the requested
assessment does not exceed the useful life of the Qualified Improvement.
(i) Application Process.
(1) Pilot Project. For the Pilot Project, the initial Authorized
Representative will work together with the lender and property owner for the Pilot Project
to establish that the Pilot Project is eligible for PACE Financing under Texas law. City
will use the Pilot Project to gain better understanding of such eligibility requirements and
to set expectations and requirements for the future expansion of the PACE Program
contemplated in this report.
(2) Expansion Projects. Once access to the PACE Program has been
expanded as contemplated in this report, the City anticipates instituting an application
process substantially as described below. The Authorized Representative and/or Program
Administrator will accept applications from property owners seeking to finance Qualified
Improvements under the program. Each application must be accompanied by any required
application fees and must include:
(A) A description of the specific Qualified Improvements to be
installed or modified on the property,
(B) A description of the specific real property to which the qualified
improvements will be permanently fixed, and
(C) The total amount of financing, including any transaction costs, to
be repaid through assessments.
Based on this information, the Authorized Representative may issue a
preliminary letter indicating that, subject to verification of all requirements at closing, the
proposed project appears to meet program requirements. Based on this preliminary letter,
the property owner may initiate an independent third -party review of the project and
submit the project to eligible lenders for approval of financing.
Once the above processes are completed, the property owner will submit
the application to the Authorized Representative to obtain preliminary approval. The
property owner is expected to produce the following documentation prior to closing on the
PACE loan:
(A) A Report conducted by a qualified, independent third party,
showing water or energy baseline conditions and the projected
water or energy savings, or the amount of renewable energy
generated attributable to the project;
(B) Such financial information about the owner and the property as the
lender chosen by the owner deems necessary to determine that the
owner has demonstrated the financial ability to fulfill the financial
obligations to be paid through assessments; and
(C) All other information required by the Authorized Representative.
0) Financial Eligibility Requirements. The Authorized Representative will
determine whether the owner, the property and the improvements are eligible for financing
under the program. The eligible lender chosen by the owner will determine whether the
owner has demonstrated the financial ability to repay the financial obligations to be
collected through contractual assessments. The statutory method6 for ensuring such a
demonstration of financial ability must be based on appropriate underwriting factors,
including the following:
(1) verification that the person requesting to participate in the program
is the legal record owner of the benefitted property,
(2) the applicant is current on mortgage and property tax payments,
(3) the applicant is not insolvent or in bankruptcy proceedings,
(4) the title of the benefitted property is not in dispute; and
(5) there is an appropriate ratio of the amount of the assessment to the
assessed value of the property.
(k) Mortgage Holder Notice and Consent. As a condition to the execution of a
written contract between the Authorized Representative and the property owner imposing
an assessment under the program, the holder of any mortgage lien on the property must be
given notice of the owner's intention to participate in the program on or before the 30th
day before the date the contract is executed, and the owner must obtain the written consent
of all mortgage holders.7
(1) Imposition of Assessment. The Authorized Representative will enter into a
written contract with the property owner, only after:
(1) The property owner delivers to the Authorized Representative
written consent of all mortgage lien holders;
(2) The Authorized Representative's determination that the owner and
the property are eligible to participate in the program, that the proposed
improvements are reasonably likely to decrease energy or water consumption or
6 TX. Local Gov't Code §399.009(b).
7 TX. Local Gov't Code §399.010.
demand, and that the period of the requested assessment does not exceed the useful
life of the Qualified Improvements; and
(3) The eligible lender notifies the Authorized Representative that the
owner has demonstrated the financial ability to fulfill the financial obligations to
be repaid through contractual assessments.
The contract will impose a contractual assessment on the owner's Eligible Property
to repay the lender's financing of the Qualified Improvements. The eligible lender will file
"A Notice of Contractual Assessment Lien," in substantially the form in Exhibit 4 attached
hereto in the Official Public Records of Lamar County, depending on where the Eligible
Property is located, as notice to the public of the assessment, from the date of filing. The
contract and the notice must contain the amount of the assessment, the legal description of
the property, the name of the property owner, and a reference to the statutory assessment
lien provided under the PACE Act.
(m) Collection of Assessments. The execution of the written contract between
the Authorized Representative and the property owner and recording of the Notice of
Contractual Assessment Lien incorporate the terms of the financing documents executed
between the property owner and with the lender to repay the financing secured by the
assessment. The third -party lender will advance financing to the owner, and the terms for
repayment will be such terms as are agreed between the lender and the owner. Under the
form lender contract attached as Exhibit 3, the lender or a designated servicer will agree to
service the debt secured by the assessment.
With funds from the lender, the property owner can purchase directly the equipment
and materials for the Qualified Improvement and contract directly, including through lease,
power purchase agreement, or other service contract, for the installation or modification of
the Qualified Improvements. Alternatively, the lender may make progress payments to the
property owner as the Qualified Improvement is installed.
The lender will receive the owner's assessment payments to repay the debt and
remit to the Authorized Representative any administrative fees. The lender will have the
right to assign or transfer the right to receive the installments of the debt secured by the
assessment, provided all of the following conditions are met:
(1) The assignment or transfer is made to an eligible lender, as defined
above; and
(2) The property owner and the Authorized Representative are notified
in writing of the assignment or transfer and the address to which payment of the
future installments should be mailed at least 30 days before the next installment is
due according to the schedule for repayment of the debt; and
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(3) The assignee or transferee of the right to receive the payments
executes an explicit written assumption of all of lender's obligations under the
lender contract.
(n) Verification Review. After a Qualified Improvement is completed, the
Authorized Representative will require the property owner to provide verification by a
qualified independent third -party reviewer that the Qualified Improvement was properly
completed and is operating as intended.$ The verification report conclusively establishes
that the improvement is a Qualified Improvement and the project is qualified under the
PACE Program.
(o) Marketing and Education Services. City may subsequently enter into
agreements with one or more other local governments or non-profit organizations that
promote energy and water conservation and/or economic development to provide
marketing and education services for the PACE Program.
(p) Quality Assurance and Antifraud Measures. The Authorized
Representative will institute quality assurance and antifraud measures for the Program.
The Authorized Representative will review each PACE application for completeness and
supporting documents through independent review and verification procedures. The
application and required attachments will identify and supply the information necessary to
ensure that the property owner, the property itself, and the proposed project all satisfy
PACE Program underwriting and technical standard requirements. Measures will be put
in place to provide safeguards, including a review of the energy and water savings baseline
and certification of compliance with the technical standards manual from an independent
third -party reviewer (ITPR), who must be a registered professional engineer, before the
project can proceed. This review will include a site visit, report, and a letter from the ITPR
certifying that he or she has no financial interest in the project and is an independent
reviewer. After the construction of the project is complete, an ITPR will conduct a final
site inspection and determine whether the project was completed and is operating properly.
The reviewer's certification will also include a statement that the reviewer is qualified and
has no financial interest in the project.
(q) Delinquency. Under the terms of the form lender contract attached as
Exhibit 3, if a property owner fails to pay an agreed installment when due on the PACE
assessment, the lender will agree to take at least the following steps to collect the delinquent
installment:
(1) Mail to the owner a written notice of delinquency and demand for
payment by both certified mail (return receipt requested) and first-class mail, and
TX. Local Gov't Code §399.011.
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(2) Mail to the owner a second notice of delinquency and demand for
payment by both certified mail (return receipt requested) and first class mail, at
least 30 days after the date of the first notice if the delinquency is continuing.
If the owner fails to cure the delinquency within 30 days after mailing the second
notice of delinquency, the lender may notify the Authorized Representative of the owner's
default. Pursuant to Texas Local Government Code Section 399.014(c), the Authorized
Representative will initiate steps for City to enforce the assessment lien in the same manner
as a property tax lien against real property may be enforced, to the extent the enforcement
is consistent with Section 50, Article XVI, of the Texas Constitution. Delinquent
installments will incur penalties and interest in the same manner and at the same rate as
delinquent property taxes, according to Texas Local Government Code
Section 399.014(d), and such statutory penalties and interest will be due to City to offset
the cost of collection.
In no event will the total amount of interest on the Assessment, including statutory
interest payable to City and contractual interest payable to the lender under the financing
documents, exceed the maximum amount or rate of nonusurious interest that may be
contracted for, charged, or collected under Texas law (the "usury limit"). If the total
amount of interest payable to City and the lender exceeds the usury limit, the interest
payable to City will be reduced, and any interest in excess of the usury limit will be credited
to the amount payable to City or refunded. If City files suit to enforce collection, City may
also recover costs and expenses, including attorney's fees, in a suit to collect a delinquent
installment of an assessment in the same manner and at the same rate as in suit to collect a
delinquent property tax. If a delinquent installment of an assessment is collected after the
filing of a suit, City will remit to the lender the net amount of the delinquent installments
and contractual interest collected and remit to the Authorized Representative the amount
of any administrative fees collected but will retain any statutory penalties, interest, and
attorney's fees collected.
-12-
EXHIBIT 1
MAP OF CITY/COUNTY PACE REGION
EXHIBIT 2
FORM OWNER CONTRACT
EXMBIT 3
FORM LENDER CONTRACT
EXISIT 4
FORM NOTICE OF CONTRACTUAL ASSESSMENT LIEN
PURSUANT TO PROPERTY ASSESSED CLEAN ENERGY ACT
a
3
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_ ............. _...............
_. .
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PACE OWNER CONTRACT
THIS PROPERTY ASSESSED CLEAN ENERGY ("PACE") OWNER CONTRACT ( "Owner
Contract") is made as of the day of by and between the City of
Paris, Texas ( "Local Government"), and. ("Property Owner" )•
RECITALS
A. The Property Assessed Clean Energy Act ( "PACE Act"), Texas Local Government
Code Chapter 399, authorizes the governing body of a local government to establish a program
and designate a region within the local government's jurisdiction within which an authorized
representative of the local government may enter into written contracts with the record owners of
commercial, industrial, agricultural, and large multifamily residential (5 or more dwelling units)
real property to impose assessments on the property to finance the cost of permanent improvements
fixed to the property intended to decrease water or energy consumption or demand.
B. Local Government has established a program under the PACE Act pursuant to a
dated , adopted by the (the
"PACE Program"), and has designated ( "Authorized
Representative ") as the representative authorized to enter into the Assessment, Owner Contract
and Lender Contract described herein, and has designated the entire territory within the -.... m„ �m
of jurisdiction as a region ( "Region ") within which the Authorized Representative and
the record owners of such real property may enter into written contracts to impose assessments to
repay the financing by owners of qualified improvements on the owner's property pursuant to the
PACE Program.
C. Property Owner is the legal and record owner of the qualified "real property," as
defined in Section 399.002 of the PACE Act, within the Region located at
Texas (the "Property").
D. Pursuant to Application number , Property Owner has applied to
Local Government to participate in the PACE Program by installing or modifying on the Property
certain permanent improvements which are intended to decrease water or energy consumption or
demand, and which are or will be fixed to the Property as "qualified improvements," as defined in
Section 399.002 of the PACE Act (the "Qualified Improvements"). The installation or
modification of such Qualified Improvements on the Property will be a "qualified project" as
defined in Section 399.002 of the PACE Act (the "Project"). Property Owner has requested that
Local Government enter into this Owner Contract pursuant to the PACE Act and the PACE
Program and has requested Local Government to impose an assessment (the "Assessment ") on the
Property as set forth in the Notice Of Contractual Assessment Lien Pursuant To Property Assessed
Clean Energy Act to be filed in the in the Official Public Records of [Larimer County], Texas (the
"Notice of Contractual Assessment Lien"), a copy of which is attached hereto as Exhibit A and
made a part hereof, to repay the financing of such Qualified Improvements. The Property,
Report.Ex.2.Mode1 Owner Contract (City of Paris TX) 4843-1515-0812 v2.docx
3614567
Qualified Improvements and Assessment are more fully described in the Notice of Contractual
Assessment Lien.
E. The financing of such Qualified Improvements will be provided to Property Owner
by _ e ("Lender"), a qualified lender selected by Property Owner,
pursuant to a written contract executed by Lender and Local Government as required by
Section 399.006(c) of the PACE Act and by the PACE Program (the "Lender Contract"). The
financing will include only those costs and fees for which an assessment may be imposed under
the PACE Act. Local Government has agreed to maintain and continue the Assessment for the
benefit of Lender until such financing is repaid in full and to release the Assessment upon notice
from Lender of such payment, or foreclose the lien securing the Assessment for the benefit of
Lender upon notice from Lender of a default by Property Owner,
F. As required by Section 399.010 of the PACE Act, Property Owner notified the
holder(s) of any mortgage liens on the Property at least thirty (30) days prior to the date of this
Owner Contract of Property Owner's intention to participate in the PACE Program. The written
consent of each mortgage holder to the Assessment was obtained prior to the date of this Owner
Contract and is attached hereto as Exhibit B and made a part hereof.
AGREEMENT
The parties agree as follows:
Section 1. Imposition of Assessment. In consideration for the financing advanced or
to be advanced to Property Owner by Lender for the Project under the PACE Program pursuant to
the Lender Contract, Property Owner hereby requests and agrees to the imposition by Local
Government of the Assessment in the amount of $ , as set forth in the Notice of
Contractual Assessment Lien, including all interest, fees, penalties, costs, and other sums due
under and/or authorized by the PACE Act, PACE Program and the financing documents between
Property Owner and Lender (the "Financing Documents") which are described or listed on
Exhibit C attached hereto and made a part hereof by reference. Property Owner promises and
agrees to pay such amount and interest to Local Government, in care of or as directed by Lender,
in satisfaction of the Assessment imposed pursuant to the Owner Contract and the PACE Act.
Accordingly, Local Government hereby imposes the Assessment on the Property to secure the
payment of such amount, in accordance with the requirements of the PACE Program and the
provisions of the PACE Act.
Section 2. Maintenance and Enforcement of Assessment. In consideration for
Lender's agreement to advance financing to Property Owner for the Project pursuant to the
Financing Documents, Local Government agrees to maintain and continue the Assessment on the
Property for the benefit of Lender until the Assessment, including all interest, fees, penalties, costs,
and other sums due under and/or authorized by the PACE Act, PACE Program and the Financing
Documents are paid in full, and to release the Assessment upon notice from Lender of such
payment. Local Government agrees to undertake reasonable efforts to enforce the Assessment
against the Property for the benefit of Lender in the event of a default by Property Owner.
-2-
Section 3. Installments. The Assessment, including the amount financed and
contractual interest, is due and payable in installments as set forth in the Notice of Contractual
Assessment Lien and the Financing Documents. The Assessment shall include: (a) an application
fee paid by Property Owner to Authorized Representative at loan closing, and (b) a recurring
administration fee paid by Property Owner to the Authorized Representative. The recurring
administration fee amount shall be collected by Lender and paid to the Authorized Representative
within thirty (30) days of receipt by Lender. The amounts due to the Authorized Representative
are identified in Exhibit C hereto. As required by Section 399.009(a)(8) of the PACE Act, the
period during which such installments are payable does not exceed the useful life of the Project.
When the Assessment together with any prepayment premium, and/or default penalties and
interest, if any, has been paid in full, Local Government's rights under this Owner Contract will
cease and terminate Upon notice from Lender that all amounts owing have been paid in full, Local
Government will execute a release of the Assessment and this Owner Contract. Thereafter, the
Authorized Representative will record the release.
Section 4. Assignment of Right to Receive Installments. Lender will have the right to
assign or transfer the right to receive the installments of the financing secured by the Assessment,
provided all of the following conditions are met:
(a) The assignment or transfer is made to a qualified lender as defined in the Lender
Contract;
(b) Property Owner and Authorized Representative are notified in writing of the
assignment or transfer and the address to which payment of the future installments should be
mailed at least 30 days before the next installment is due according to the payment schedule
included in the Notice of Contractual Assessment Lien and the Financing Documents; and
(c) The assignee or transferee of the right to receive the payments executes an explicit
written assumption of all of Lender's rights and obligations under the Lender Contract related to
the receipt of the Installments or the enforcement of the assessment lien and provides a copy of
such assumption to Property Owner and Authorized Representative.
Lender may assign or transfer the right to receive the Installments or the right to require
enforcement of the assessment lien separately. Upon written notice to Property Owner and
Authorized Representative of an assignment or transfer of the right to receive the installments that
meets all of these conditions, the assignor shall be released of all of the obligations of the Lender
under such Lender Contract accruing after the date of the assignment assumed by and transferred
to such assignee or transferee and all of such obligations shall be assumed by and transferred to
the assignee. Any attempt to assign or transfer the right to receive the installments that does not
meet all of these conditions is void.
Section 5. Lien Priority and Enforcement. Pursuant to Section 399.014 of the PACE
Act,
(a) Delinquent installments of the Assessment will incur interest and penalties in the
same manner and in the same amount as delinquent property taxes, viz., a delinquent installment
incurs a penalty of 6% of the amount of the installment for the first calendar month it is delinquent
plus I% for each additional month or portion of a month the installment remains unpaid prior to
July 1 of the year in which it becomes delinquent. However, an installment delinquent on July 1
incurs a total penalty of 12% of the amount of the delinquent installment without regard to the
number of months it has been delinquent. A delinquent installment will also accrue interest at the
rate of 1 % for each month or portion of a month that the installment remains unpaid. Statutory
penalties and statutory interest payable under this paragraph will be retained by Local Government
to compensate it for the cost of enforcing the Assessment. Additional interest at any default rate
imposed by Lender pursuant to the Financing Documents, along with any other fees and charges
that become due pursuant to the Financing Documents may be assessed by Lender and retained by
Lender.
(b) The Assessment, together with any penalties and interest thereon,
(i) is a first and prior lien against the Property from the date on which the
Notice of Contractual Assessment Lien is filed in the Official Public
Records of Lamar County, Texas as provided by Section 399.014 of the
PACE Act, until the financing secured by the Assessment and any penalties
and interest are paid; and
(ii) such lien has the same priority status as a lien for any other ad valorem tax,
pursuant to Section 399.014(a)(2) of the PACE Act.
(c) The lien created by the Assessment runs with the land, and according to
Section 399.014(b) of the PACE Act, any portion of the Assessment that has not yet become due
is not eliminated by foreclosure of. (i) a property tax lien, or (ii) the lien for any past due portion
of the Assessment. In the event of a sale or transfer of the Property by Property Owner, the
obligation for the Assessment and the Property Owner's obligations under the Financing
Documents will be transferred to the succeeding owner without recourse on Local Government
and with recourse on Property Owner only for any unpaid installments of the Assessment that
became due during Property Owner's period of ownership.
(d) In the event of a default by Property Owner in payment of the installments called
for by the Financing Documents, the lien created by the Assessment will be enforced by Local
Government in the same manner according to Texas Tax Code Secs. 33.41 to 34.23 that a property
tax lien against real property may be enforced by a local government, to the extent the enforcement
is consistent with Section 50, Article XVI, Texas Constitution.
(e) In a suit to collect a delinquent installment of the Assessment, Local Government
will be entitled to recover costs and expenses, including attorney's fees in the amount of 15% of
the total amount of the delinquent installment, penalties, and interest due, in the same manner
according to Texas Tax Code Sec. 33.48 as in a suit to collect a delinquent property tax. Lender
shall be entitled to any additional sums due to it under the Financing Documents in connection
with a suit to collect a delinquent installment of the Assessment.
-4-
(f) After written notice of the Assessment is recorded in the real property records of
the county in which the Property is located as provided under Section 399.013 of the PACE Act,
the lien created by the Assessment may not be contested on the basis that the improvement is not
a "qualified improvement" or the project is not a "qualified project," as such terms are defined in
Section 399.002 of the PACE Act.
Section 6. Written Contract Required by PACE Act. This Owner Contract constitutes
a written contract for the Assessment between the Property Owner and Local Government as
required by Section 399.005 of the PACE Act. The Notice of Contractual Assessment Lien will
be recorded in the Official Public Records of Lamar County, Texas as notice of the contractual
Assessment, in accordance with the requirements of Section 399.013 of the PACE Act.
Section 7. Qualified Improvements. Property Owner agrees that all improvements
purchased, constructed and/or installed through financing obtained pursuant to this Owner
Contract shall be permanently affixed to the Property and will transfer with the Property to the
transferee in the event of and sale or assignment of the Property.
Section 8. Water or Energy Savings. For so long as the Assessment encumbers the
Property, Property Owner agrees on or before January 31 st of each year, to report to Authorized
Representative the water or energy savings realized through the Project in accordance with the
reporting requirements established by the Local Government.
Section 9. Construction and Definitions. This Owner Contract is to be construed in
accordance with and with reference to the PACE Program and PACE Act. Terms used herein, and
not otherwise defined herein, shall have the meanings ascribed to them in: (a) the PACE Program,
and/or (b) the PACE Act.
Section 10. Binding Effect. This Owner Contract inures to the benefit of Local
Government and is binding upon Property Owner, its heirs, successors, and assigns.
Section 11. Notices. All notices and other communications required or permitted by
this Owner Contract shall be in writing and mailed by certified mail, return receipt requested,
addressed to the other party at its address shown below the signature of such party or at such other
address as such party may from time to time designate in writing to the other party, and shall be
effective from the date of receipt.
Section 12. Governing Law. This Owner Contract shall in all respects be governed by
and construed in accordance with the laws of the State of Texas.
Section 13. Entire Agreement. This Owner Contract constitutes the entire agreement
between Local Government and Property Owner with respect to the subject matter hereof and may
not be amended or altered in any manner except by a document in writing executed by both parties.
Section 14. Further Assurances. Property Owner further covenants and agrees to do,
execute and deliver, or cause to be done, executed, and delivered all such further acts for
implementing the intention of this Owner Contract as may be reasonably necessary or required.
-5-
Section 15. Captions. Paragraph and section titles are for convenience of reference only
and shall not be of any legal effect.
Section 16. Interest. Interest and penalties in the event of default, as provided above,
are explicitly authorized by Section 399.014(d) of the PACE Act. However, in no event will the
total amount of interest on the Assessment, including statutory interest payable to Local
Government and contractual interest payable to Lender under the Financing Documents, exceed
the maximum amount or rate of nonusurious interest that may be contracted for, charged, or
collected under Texas law (the "usury limit"). If the total amount of interest payable to Local
Government and Lender exceeds the usury limit, the interest payable to Local Government will be
reduced and any interest in excess of the usury limit will be credited to the amount payable to
Local Government or refunded. This provision overrides any conflicting provisions in this Owner
Contract.
Section 17. Counterparts. This Owner Contract may be executed in any number of
counterparts, each counterpart may be delivered originally or by electronic transmission, all of
which when taken together shall constitute one agreement binding on the parties, notwithstanding
that all parties are not signatories to the same counterpart.
Section 18. Costs. No provisions of this Owner Contract will require Local
Government to expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder.
Section 19. Construction Terms. If the Lender Contract includes requirements related
to construction of the Project and disbursement of Financing, such requirements are set forth in
Exhibit D attached hereto and incorporated herein by reference. Such requirements may include,
among other things, (a) the disbursement schedule and (b) any holdback amount to be funded
following verification of final project completion.
M
EXECUTED effective as Of , 20
PROPERTY OWNER:
LIM
Name:
Title:
Address:
Signature Page to PACE Owner Contract
EXECUTED effective as of 20
CITY OF PARIS, TEXAS:
By: AUTHORIZED REPRESENTATIVE Pursuant to
Tex. Local Gov't Code §399.006(b)
0
Name:
Title:
Address:
Signature Page to PACE Owner Contract
EXHIBIT A
NOTICE OF CONTRACTUAL ASSESSMENT LIEN
PURSUANT TO
PROPERTY ASSESSED CLEAN ENERGY ACT
EXHIBIT B
MORTGAGE HOLDER(S) CONSENT
EXHIBIT C
FINANCING DOCUMENTS
ASSESSMENT PAYMENT SCHEDULE
PACE LENDER CONTRACT
THIS PROPERTY ASSESSED CLEAN ENERGY ( "PACE ") LENDER CONTRACT (the "Lender
Contract") is made as of theday of , , by and between the City
"
of Paris, Texas ("Local Government") and ("Lender").
RECITALS
A. The Property Assessed Clean Energy Act ( "PACE Act "), Texas Local Government
Code Chapter 399, authorizes the governing body of a local government to establish a program
and designate a region within the local government's jurisdiction within which an authorized
representative of the local government may enter into written contracts with the record owners of
commercial, industrial, agricultural, and large multifamily residential (5 or more dwelling units)
real property to impose assessments on the property to finance the cost of permanent improvements
fixed to the property intended to decrease water or energy consumption or demand.
B. Local Government has established a program under the PACE Act pursuant to a
dated , adopted by the ___
(the "PACE Program"), and has designated
( "Authorized Representative") as the representative authorized to enter into the Assessment,
Owner Contract and Lender Contract described herein, and has designated the entire territory
within the m., of...... ................. I'll jurisdiction as a region ( "Region ") within which the
Authorized Representative anthe record owners of such real property may enter into written
contracts to impose assessments to repay the financing by owners of qualified improvements on
the owner's property pursuant to the PACE Program.
C. ( "Property Owner") desires to participate in the PACE
Program with respect to certain real property located at
Texas (the "Property") in connection with installing or modifying on the Property certain
permanent improvements which are intended to decrease water or energy consumption or demand,
and which are or will be fixed to the Property as "qualified improvements," as defined in
Section 399.002 of the PACE Act (the "Qualified Improvements"). The installation or
modification of such Qualified Improvements on the Property will be a "qualified project" as
defined in Section 399.002 of the PACE Act (the "Project").
D. Property Owner and Local Government have entered into a written contract as
required by Section 399.005 of the PACE Act, a copy of which is attached hereto as Exhibit A and
made a part hereof (the "Owner Contract"), in which Property Owner has requested that Local
Government impose an assessment (the "Assessment") on the Property as set forth in the Notice
Of Contractual Assessment Lien Pursuant To Property Assessed Clean Energy Act to be filed in
the in the Official Public Records of ,,,,, 11—, Texas (the "Notice of Contractual
Assessment Lien "), a copy of which is attached to the Owner Contract as Exhibit A, to repay the
financing of such Qualified Improvements. The Property, Qualified Improvements and
Assessment are more fully described in the Notice of Contractual Assessment Lien.
Report.Ex.3.Mode1 Lender Contract.docx
3614567
E. Financing for the Project (the "Financing") will be provided to Property Owner by
Lender in accordance with financing documents described in, or copies of which are included as,
Exhibit B attached hereto and made a part hereof (the "Financing Documents "). Such Financing
includes only those costs and fees for which an assessment may be imposed under the PACE Act.
This Lender Contract is entered into between Local Government and Lender as required by
Section 399.006(c) of the PACE Act to provide for repayment of the Financing secured by the
Assessment.
F. As required by Section 399.010 of the PACE Act, Property Owner notified the
holder(s) of any mortgage liens on the Property at least thirty (30) days prior to the date of the
Owner Contract of Property Owner's intention to participate in the PACE Program. The written
consent of each mortgage lien holder to the Assessment was obtained prior to the date of the Owner
Contract, as shown by the copy of such consent(s) attached as Exhibit B to the Owner Contract.
AGREEMENT
The parties agree as follows:
Section 1. Maintenance and Enforcement of Assessment. Lender agrees to provide the
Financing for the Project in the total amount of $, according to the terms set out
in the Financing Documents attached hereto as Exhibit B. In consideration for the Financing
provided or to be provided by Lender for the Project, and subject to the terms and conditions of
this Lender Contract, Local Government agrees to maintain and continue the Assessment for the
benefit of Lender until the Financing, all contractual interest, any prepayment premium, additional
penalties and interest imposed by the Lender under the Financing Documents according to the
Financing Documents, and any statutory penalties, interest, attorney's fees, or costs accrued in the
event of default are paid in full. Local Government will not release the Assessment until which
time Lender notifies Local Government that all amounts owing have been paid in full. Local
Government shall not sell, assign or transfer the Assessment or the assessment lien against the
Property to any third party without the prior written consent of the Lender. Promptly following
written notice to Local Government from Lender, Local Government agrees to enforce the
assessment lien against the Property for the benefit of Lender in the event of a default by Property
Owner. Local Government shall have no obligation to repurchase the assessment and no liability
to Lender should there be a default or ari event of default in the payment thereof or should there
be any other loss or expense suffered by Lender or under any other circumstances. Lender and
Local Government acknowledge and agree that amounts collected as proceeds of the Assessment
are intended to be "special revenues" as defined in Section 902(2) of the United States Bankruptcy
Code. The foregoing is a statement of intent and not a guaranty or assurance that such proceeds
will be treated as "special revenues."
Section 2. Installments. The Assessment, including the amount financed and
contractual interest, is due and payable to Lender in installments as set forth in the Notice of
Contractual Assessment Lien and Financing Documents. The Assessment shall include: (1) an
application fee paid by Property Owner to Authorized Representative at loan closing, and (2) a
recurring administration fee paid by Property Owner to the Authorized Representative. The
recurring administration fee amount shall be collected by Lender and paid to the Authorized
-2-
Representative within thirty (30) days of receipt by Lender. The amounts due to the Authorized
Representative are identified in Exhibit B hereto. As required by Section 399.009(a)(8) of the
PACE Act, the period during which such installments are payable does not exceed the useful life
of the Project. When the Assessment together with any prepayment premium, and/or default
penalties and interest, if any, has been paid in full, Local Government's rights under this Owner
Contract will cease and terminate. Upon notice from Lender that all amounts owing have been
paid in full, Local Government will execute a release of the Assessment and this Owner Contract.
Thereafter, the Lender will record the release.
Section 3. Assignment of Right to Receive Installments. Lender will have the right to
assign or transfer the right to receive the installments of the Assessment, provided all of the
following conditions are met:
(a) The assignment or transfer is made to a qualified lender, which may be one of the
following:
(i) Any federally insured depository institution such as a bank, savings bank,
savings and loan association and federal or state credit union;
(ii) Any insurance company authorized to conduct business in one or more
states;
(iii) Any registered investment company, registered business development
company, or a Small Business Administration small business investment
company;
(iv) Any publicly traded entity; or
(v) Any private entity that:
(A) Has a minimum net worth of $5 million;
(B) Has at least three years' experience in business or industrial lending
or commercial real estate lending (including multifamily lending), or has a lending
officer that has at least three years' experience in business or industrial lending or
commercial real estate lending;
(C) Can provide independent certification as to availability of funds; and
(D) Has the ability to carry out, either directly or through a servicer, the
bookkeeping and customer service work necessary to manage the assessment
accounts.
(b) Property Owner and Authorized Representative are notified in writing of the
assignment or transfer and the address to which payment of the future installments should be
M
mailed at least 30 days before the next installment is due according to the payment schedule
included in the Financing Documents; and
(c) The assignee or transferee of the right to receive the installments executes an
explicit written assumption of all of Lender's obligations under this Lender Contract. Upon written
notice to Property Owner and Authorized Representative of an assignment or transfer of the right
to receive the installments that meets all of these conditions, the assignor shall be released of all
of the obligations of the Lender under this Lender Contract accruing after the date of the
assignment and all of such obligations shall be assumed by and transferred to the assignee. Any
attempt to assign or transfer the right to receive the installments of the Assessment that does not
meet all of these conditions is void.
Section 4. Financing Responsibility. Lender assumes full responsibility for
determining the financial ability of the Property Owner to repay the Financing and for advancing
the funds as set forth in the Financing Documents and performing Lender's obligations and
responsibilities thereunder. In the event the assessment lien on the Property is enforced by
foreclosure as provided below, Lender will have no further obligations to Property Owner with
respect to the Installments that were the subject of the foreclosure, but Lender will retain the rights
to enforcement of the lien for any Installments that are not eliminated by the foreclosure, and the
succeeding owner of the Property will be subject to such lien.
Section 5. Lien Priority and Enforcement. As provided in the Owner Contract and
Section 399.014 of the PACE Act:
(a) Delinquent installments of the Assessment incur interest and penalties in the same
manner and in the same amount as delinquent property taxes, viz., a delinquent installment incurs
a penalty of 6% of the amount of the installment for the first calendar month it is delinquent plus
1 % for each additional month or portion of a month the installment remains unpaid prior to July 1
of the year in which it becomes delinquent. However, an installment delinquent on July 1 incurs
a total penalty of 12% of the amount of the delinquent installment without regard to the number of
months it has been delinquent. A delinquent installment also accrues interest at the rate of I% for
each month or portion of a month the installment remains unpaid. Statutory penalties and statutory
interest payable under this paragraph will be retained by Local Government to compensate it for
the cost of enforcing the Assessment. Additional interest at any default rate imposed by Lender
pursuant to the Financing Documents, along with any other fees and charges that become due
pursuant to the Financing Documents may be assessed by Lender and retained by Lender.
(b) The Assessment, together with any penalties and interest thereon,
(i) is a first and prior lien against the Property from the date on which the
Notice of Contractual Assessment Lien is filed in the Official Public
Records of Lamar County, Texas, as provided by Section 399.014 of the
PACE Act, until the Assessment and any penalties and interest are paid; and
(ii) such lien has the same priority status as a lien for any other ad valorem tax,
pursuant to Section 399.014(a)(2) of the PACE Act.
i
(c) The lien created by the Assessment runs with the land, and any portion of the
Assessment that has not yet become due is not eliminated by foreclosure of a property tax lien,
according to Section 399.014(b) of the PACE Act. In the event of a sale or transfer of the Property
by Property Owner, the obligation for the Assessment and the Property Owner's obligations under
the Financing Documents will be transferred to the succeeding owner without recourse on Local
Government or the Authorized Representative and with recourse on Property Owner only for any
unpaid installments of the Assessment that became due during Property Owner's period of
ownership.
(d) In the event of a default by Property Owner in payment of the installments called
for by the Financing Documents, the lien created by the Assessment will be enforced by Local
Government in the same manner according to Texas Tax Code Secs. 33.41 to 34.23 that a property
tax lien against real property may be enforced by a local government, to the extent the enforcement
is consistent with Section 50, Article XVI, Texas Constitution.
(e) In a suit to collect a delinquent installment of the Assessment, Local Government
will be entitled to recover costs and expenses, including attorney's fees in the amount of 15% of
the total amount of the delinquent installment, penalties, and interest due, in the same manner
according to Texas Tax Code Sec. 33.48 as in a suit to collect a delinquent property tax. Lender
shall be entitled to any additional sums due to it under the Financing Documents in connection
with a suit to collect a delinquent installment of the Assessment.
(f) After written notice of the Assessment is recorded in the real property records of
the county in which the Property is located as provided under Section 399.013 of the PACE Act,
the lien created by the Assessment may not be contested on the basis that the improvement is not
a "qualified improvement" or the project is not a "qualified project," as such terms are defined in
Section 399.002 of the PACE Act.
Section 6. Servicing and Enforcement of Assessment.
(a) Servicing,, The Assessment payments will be billed, collected, received, and
disbursed in accordance with the procedures set out in the Financing Documents. Lender will be
responsible for all servicing duties other than those specifically undertaken by Local Government
in this Lender Contract.
(b) Remittances. Each of the parties covenants and agrees to promptly remit to the
other party any payments incorrectly received by such party with respect to the Assessment after
the execution of this Lender Contract.
(c) Default and Enforcement. In the event of a default in payment of any installment
of the Assessment as specified in the Financing Documents, Lender agrees to take at least the
following steps to collect the delinquent installment:
(i) Mail a written notice of delinquency and demand for payment to the
Property Owner by both certified mail, return receipt requested, and first
class mail; and
-5-
(ii) Mail a second notice of delinquency to the Property Owner by both certified
mail, return receipt requested, and first class mail at least 30 days after the
date of the first notice if the delinquency is continuing.
If the Property Owner fails to cure the delinquency within 30 days after the mailing of the
second notice of delinquency, the Lender or its designated servicer may notify the Authorized
Representative who will certify to the Local Government in writing of a default by the Property
Owner, and upon receipt of such certification and after doing its own due diligence, Authorized
Representative will enforce the assessment lien for the benefit of Lender pursuant to Tex. Local
Gov't Code Sec. 399.014(c), in the same manner as a property tax lien against real property may
be enforced, to the extent the enforcement is consistent with Section 50, Article XVI, Texas
Constitution.
(d) Priority. If the assessment lien is enforced by foreclosure or collected through a
bankruptcy or similar proceeding, the assessment balance and any interest or penalties on the
assessment will have the same priority status as a lien for any other ad valorem tax, pursuant to
Sec. 399.014(a)(2) of the PACE Act.
(e) Final Patent and Release. When the Assessment has been satisfied and paid in
full, together with all interest and prepayment premiums, if any, provided under the Financing
Documents and all costs, fees, penalties, and interest applicable under the PACE Act and payable
to Lender or Local Government, Local Government's rights under the Owner Contract will cease
and terminate. Upon notice from Lender that all amounts owing have been paid in full, Local
Government will execute a release of the Assessment and the Owner Contract. Thereafter, the
[Authorized Representative] 1 will record the Release.
(f) Limitations on Local Government's Actions. Without theprior written consent of
Lender, Local Government will not enter into any amendment or modification of or deviation from
the Owner Contract. Local Government will not institute any legal action with respect to the
Owner Contract, the Assessment, or the assessment lien without the prior written request of
Lender.
(g) Limitations of Local Government's Obligations. Local Government undertakes to
perform only such duties as are specifically set forth in this Lender Contract, and no implied duties
on the part of Local Government are to be read into this Lender Contract. Local Government will
not be deemed to have a fiduciary or other similar relationship with Lender. Local Government
may request written instructions for action from Lender and refrain from taking action until it
receives satisfactory written instructions. Local Government will have no liability to any person
for following such instructions, regardless of whether they are to act or refrain from acting.
(h) Costs. No provisions of this Lender Contract will require Local Government to
expend or risk its own funds or otherwise incur any financial liability in the performance of any of
its duties hereunder.
1 NTD: City to confirm if it wants to record the Releases.
M
Section 7. Lender's Warranties and Representations. With respect to this Lender
Contract, Lender hereby warrants and represents that on the date on which Lender executes this
Lender Contract:
(a) Lender is a qualified lender under the PACE Program, as defined in
paragraph 3(a) above, and is fully qualified under the PACE Program to enter into this Lender
Contract and the Financing Documents;
(b) Lender has independently and without reliance upon Local Government
conducted its own credit evaluation, reviewed such information as it has deemed adequate and
appropriate, and made its own analysis of the Owner Contract, the Project, and Property Owner's
financial ability to perform the financial obligations set out in the Financing Documents; and
(c) Lender has not relied upon any investigation or analysis conducted by, advice
or communication from, or any warranty or representation by Local Government or any agent or
employee of Local Government, express or implied, concerning the financial condition of the
Property Owner or the tax or economic benefits of an investment in the Assessment.
Section 8. Written Contract Required by the PACE Act. This Lender Contract
constitutes a written contract between Local Government and Lender, as required under
Section 399.006(c) of the PACE Act.
Section 9. Construction and Definitions. This Lender Contract is to be construed in
accordance with and with reference to the PACE Program and PACE Act. Terms used herein, and
not otherwise defined herein, shall have the meanings ascribed to them in: (1) the Notice of
Contractual Assessment Lien, (2) the Owner Contract, (3) the PACE Program, and/or (4) the
PACE Act.
Section 10. Binding Effect. This Lender Contract is binding upon and shall inure to the
benefit of the parties hereto and their respective heirs, representatives, successors, and assigns.
Section 11. Notices. All notices and other communications required or permitted
hereunder shall be in writing and mailed by certified mail, return receipt requested, addressed to
the other party at the address stated below the signature of such party or at such other address as
such party may from time to time designate in writing to the other party, and shall be effective
from the date of receipt.
Section 12. Governing Law. This Owner Contract shall in all respects be governed by
and construed in accordance with the laws of the State of Texas.
Section 13. Entire Agreement. This Lender Contract constitutes the entire agreement
between the parties with respect to the subject matter hereof and shall not be amended or altered
in any manner except by a document in writing executed by both parties.
Section 14. Captions. Paragraph and section titles are for convenience of reference only
and shall not be of any legal effect.
-7-
Section 15. Counterparts. This Lender Contract may be executed in any number of
counterparts, each counterpart may be delivered originally or by electronic transmission, all of
which when taken together shall constitute one agreement binding on the parties, notwithstanding
that all parties are not signatories to the same counterpart.
Section 16. Interest. Interest and penalties in the event of default, as provided above,
are explicitly authorized by Section 399.014(d) of the PACE Act. However, in no event will the
total amount of interest on the Assessment, including statutory interest payable to Local
Government and Contractual Interest payable to Lender under the Financing Documents, exceed
the maximum amount or rate of nonusurious interest that may be contracted for, charged, or
collected under Texas law (the "usury limit"). If the total amount of interest payable to Local
Government and Contractual Interest payable to Lender exceeds the usury limit, interest payable
to Local Government will be reduced and any interest in excess of the usury limit will be credited
to the amount payable to Local Government or refunded. This provision overrides any conflicting
provisions in this Lender Contract.
Section 17. Certification. Local Government certifies that the PACE Program has been
duly adopted and is in full force and effect on the date of this Lender Contract. Property Owner
has represented to Lender and Local Government that the Project is a "qualified project" as defined
in the PACE Program and Section 399.002 of the PACE Act. The Assessment has been imposed
on the Property as a lien in accordance with the PACE Owner Contract and the PACE Act. Local
Government has not assigned or transferred any interest in the Assessment or the PACE Owner
Contract.
Section 18. Construction Terms. If this Lender Contract includes requirements related
to construction of the Project and disbursement of Financing, such requirements are set forth in
Exhibit C attached hereto and incorporated herein by reference. Such requirements may include,
among other things, (1) the disbursement schedule and (2) any holdback amount to be funded
following verification of final project completion.
EXECUTED effective as of .20
Woulm.,
By: �
Name:
Title:
Address:
[Signature Page to PACE Lender Contract]
EXECUTED effective as of 20
CITY OF PARIS, TEXAS
By: AUTHORIZED REPRESENTATIVE Pursuant to
Tex. Local Gov't Code §399.006(b)
Lm
Name:
Title:
Address:
[Signature Page to PACE Lender Contract]
EXHIBIT A
OWNER CONTRACT
EXHIBIT B
FINANCING DOCUMENTS
ASSESSMENT PAYMENT SCHEDULE
Assessment Total:
Payment Schedule:
Project Completion Date:
DATE
PURPOSE
PACE LENDER CONTRACT
THIS PROPERTY ASSESSED CLEAN ENERGY ("PACE") LENDER CONTRACT (the "Lender
Contract") is made as of the day of , by and between the City
of Paris, Texas ( "Local Government") and ("Lender").
RECITALS
A. The Property Assessed Clean Energy Act ( "PACE Act"), Texas Local Government
Code Chapter 399, authorizes the governing body of a local government to establish a program
and designate a region within the local government's jurisdiction within which an authorized
representative of the local government may enter into written contracts with the record owners of
commercial, industrial, agricultural, and large multifamily residential (5 or more dwelling units)
real property to impose assessments on the property to finance the cost of permanent improvements
fixed to the property intended to decrease water or energy consumption or demand.
B. Local Government has established a program under the PACE Act pursuant to a
dated _......... _ adopted by the
(the "PACE Program"), and has designated
( "Authorized Representative") as the representative authorized to enter into the Assessment,
Owner Contract and Lender Contract described herein, and has designated the entire territory
within the ®_ _ of-'— "" " -- jurisdiction as a region ( "Region ") within which the
Authorized Representative and theecord owners of such real property may enter into written
contracts to impose assessments to repay the financing by owners of qualified improvements on
the owner's property pursuant to the PACE Program.
C. ( "Property Owner") desires to participate in the PACE
Program with respect to certain real property located at
, ,
Texas (the "Property ") in connection with installing or modifying on the Property certain
permanent improvements which are intended to decrease water or energy consumption or demand,
and which are or will be fixed to the Property as "qualified improvements," as defined in
Section 399.002 of the PACE Act (the "Qualified Improvements"). The installation or
modification of such Qualified Improvements on the Property will be a "qualified project" as
defined in Section 399.002 of the PACE Act (the "Project").
D. Property Owner and Local Government have entered into a written contract as
required by Section 399.005 of the PACE Act, a copy of which is attached hereto as Exhibit A and
made a part hereof (the "Owner Contract"), in which Property Owner has requested that Local
Government impose an assessment (the "Assessment") on the Property as set forth in the Notice
Of Contractual Assessment Lien Pursuant To Property Assessed Clean Energy Act to be filed in
the in the Official Public Records of , Texas (the "Notice of Contractual
Assessment Lien "), a copy of which is attached to the Owner Contract as Exhibit A, to repay the
financing of such Qualified Improvements. The Property, Qualified Improvements and
Assessment are more fully described in the Notice of Contractual Assessment Lien.
Report.Ex.3.Mode1 Lender Contract.docx
3614567
E. Financing for the Project (the "Financing") will be provided to Property Owner by
Lender in accordance with financing documents described in, or copies of which are included as,
Exhibit B attached hereto and made a part hereof (the "Financing Documents "). Such Financing
includes only those costs and fees for which an assessment may be imposed under the PACE Act.
This Lender Contract is entered into between Local Government and Lender as required by
Section 399.006(c) of the PACE Act to provide for repayment of the Financing secured by the
Assessment.
F. As required by Section 399.010 of the PACE Act, Property Owner notified the
holder(s) of any mortgage liens on the Property at least thirty (30) days prior to the date of the
Owner Contract of Property Owner's intention to participate in the PACE Program. The written
consent of each mortgage lien holder to the Assessment was obtained prior to the date of the Owner
Contract, as shown by the copy of such consent(s) attached as Exhibit B to the Owner Contract.
AGREEMENT
The parties agree as follows:
Section 1. Maintenance and Enforcement of Assessment. Lender agrees to provide the
Financing for the Project in the total amount of $ , according to the terms set out
in the Financing Documents attached hereto as Exhibit B. In consideration for the Financing
provided or to be provided by Lender for the Project, and subject to the terms and conditions of
this Lender Contract, Local Government agrees to maintain and continue the Assessment for the
benefit of Lender until the Financing, all contractual interest, any prepayment premium, additional
penalties and interest imposed by the Lender under the Financing Documents according to the
Financing Documents, and any statutory penalties, interest, attorney's fees, or costs accrued in the
event of default are paid in full. Local Government will not release the Assessment until which
time Lender notifies Local Government that all amounts owing have been paid in full. Local
Government shall not sell, assign or transfer the Assessment or the assessment lien against the
Property to any third party without the prior written consent of the Lender. Promptly following
written notice to Local Government from Lender, Local Government agrees to enforce the
assessment lien against the Property for the benefit of Lender in the event of a default by Property
Owner. Local Government shall have no obligation to repurchase the assessment and no liability
to Lender should there be a default or an event of default in the payment thereof or should there
be any other loss or expense suffered by Lender or under any other circumstances. Lender and
Local Government acknowledge and agree that amounts collected as proceeds of the Assessment
are intended to be "special revenues" as defined in Section 902(2) of the United States Bankruptcy
Code. The foregoing is a statement of intent and not a guaranty or assurance that such proceeds
will be treated as "special revenues."
Section 2. Installments. The Assessment, including the amount financed and
contractual interest, is due and payable to Lender in installments as set forth in the Notice of
Contractual Assessment Lien and Financing Documents. The Assessment shall include: (1) an
application fee paid by Property Owner to Authorized Representative at loan closing, and (2) a
recurring administration fee paid by Property Owner to the Authorized Representative. The
recurring administration fee amount shall be collected by Lender and paid to the Authorized
-2-
Representative within thirty (30) days of receipt by Lender. The amounts due to the Authorized
Representative are identified in Exhibit B hereto. As required by Section 399.009(a)(8) of the
PACE Act, the period during which such installments are payable does not exceed the useful life
of the Project. When the Assessment together with any prepayment premium, and/or default
penalties and interest, if any, has been paid in full, Local Government's rights under this Owner
Contract will cease and terminate. Upon notice from Lender that all amounts owing have been
paid in full, Local Government will execute a release of the Assessment and this Owner Contract.
Thereafter, the Lender will record the release.
Section 3. Assignment of Right to Receive Installments. Lender will have the right to
assign or transfer the right to receive the installments of the Assessment, provided all of the
following conditions are met:
(a) The assignment or transfer is made to a qualified lender, which may be one of the
following:
(i) Any federally insured depository institution such as a bank, savings bank,
savings and loan association and federal or state credit union;
(ii) Any insurance company authorized to conduct business in one or more
states;
(iii) Any registered investment company, registered business development
company, or a Small Business Administration small business investment
company;
(iv) Any publicly traded entity; or
(v) Any private entity that:
(A) Has minimum net worth of $5 million;
(B) Has at least three years' experience in business or industrial lending
or commercial real estate lending (including multifamily lending), or has a lending
officer that has at least three years' experience in business or industrial lending or
commercial real estate lending;
(C) Can provide independent certification as to availability of funds; and
(D) Has the ability to carry out, either directly or through a servicer, the
bookkeeping and customer service work necessary to manage the assessment
accounts.
(b) Property Owner and Authorized Representative are notified in writing of the
assignment or transfer and the address to which payment of the future installments should be
M
mailed at least 30 days before the next installment is due according to the payment schedule
included in the Financing Documents; and
(c) The assignee or transferee of the right to receive the installments executes an
explicit written assumption of all of Lender's obligations under this Lender Contract. Upon written
notice to Property Owner and Authorized Representative of an assignment or transfer of the right
to receive the installments that meets all of these conditions, the assignor shall be released of all
of the obligations of the Lender under this Lender Contract accruing after the date of the
assignment and all of such obligations shall be assumed by and transferred to the assignee. Any
attempt to assign or transfer the right to receive the installments of the Assessment that does not
meet all of these conditions is void.
Section 4. Financing Responsibility. Lender assumes full responsibility for
determining the financial ability of the Property Owner to repay the Financing and for advancing
the funds as set forth in the Financing Documents and performing Lender's obligations and
responsibilities thereunder. In the event the assessment lien on the Property is enforced by
foreclosure as provided below, Lender will have no further obligations to Property Owner with
respect to the Installments that were the subject of the foreclosure, but Lender will retain the rights
to enforcement of the lien for any Installments that are not eliminated by the foreclosure, and the
succeeding owner of the Property will be subject to such lien.
Section 5. Lien Priority and Enforcement. As provided in the Owner Contract and
Section 399.014 of the PACE Act:
(a) Delinquent installments of the Assessment incur interest and penalties in the same
manner and in the same amount as delinquent property taxes, viz., a delinquent installment incurs
a penalty of 6% of the amount of the installment for the first calendar month it is delinquent plus
1% for each additional month or portion of a month the installment remains unpaid prior to July 1
of the year in which it becomes delinquent. However, an installment delinquent on July 1 incurs
a total penalty of 12% of the amount of the delinquent installment without regard to the number of
months it has been delinquent. A delinquent installment also accrues interest at the rate of I% for
each month or portion of a month the installment remains unpaid. Statutory penalties and statutory
interest payable under this paragraph will be retained by Local Government to compensate it for
the cost of enforcing the Assessment. Additional interest at any default rate imposed by Lender
pursuant to the Financing Documents, along with any other fees and charges that become due
pursuant to the Financing Documents may be assessed by Lender and retained by Lender.
(b) The Assessment, together with any penalties and interest thereon,
(i) is a first and prior lien against the Property from the date on which the
Notice of Contractual Assessment Lien is filed in the Official Public
Records of Lamar County, Texas, as provided by Section 399.014 of the
PACE Act, until the Assessment and any penalties and interest are paid; and
(ii) such lien has the same priority status as a lien for any other ad valorem tax,
pursuant to Section 399.014(a)(2) of the PACE Act.
(c) The lien created by the Assessment runs with the land, and any portion of the
Assessment that has not yet become due is not eliminated by foreclosure of a property tax lien,
according to Section 399.014(b) of the PACE Act. In the event of a sale or transfer of the Property
by Property Owner, the obligation for the Assessment and the Property Owner's obligations under
the Financing Documents will be transferred to the succeeding owner without recourse on Local
Government or the Authorized Representative and with recourse on Property Owner only for any
unpaid installments of the Assessment that became due during Property Owner's period of
ownership.
(d) In the event of a default by Property Owner in payment of the installments called
for by the Financing Documents, the lien created by the Assessment will be enforced by Local
Government in the same manner according to Texas Tax Code Secs. 33.41 to 34.23 that a property
tax lien against real property may be enforced by a local government, to the extent the enforcement
is consistent with Section 50, Article XVI, Texas Constitution.
(e) In a suit to collect a delinquent installment of the Assessment, Local Government
will be entitled to recover costs and expenses, including attorney's fees in the amount of 15% of
the total amount of the delinquent installment, penalties, and interest due, in the same manner
according to Texas Tax Code Sec. 33.48 as in a suit to collect a delinquent property tax. Lender
shall be entitled to any additional sums due to it under the Financing Documents in connection
with a suit to collect a delinquent installment of the Assessment.
(f) After written notice of the Assessment is recorded in the real property records of
the county in which the Property is located as provided under Section 399.013 of the PACE Act,
the lien created by the Assessment may not be contested on the basis that the improvement is not
a "qualified improvement" or the project is not a "qualified project," as such terms are defined in
Section 399.002 of the PACE Act.
Section 6. Servicing and Enforcement of Assessment.
(a) Servicing. The Assessment payments will be billed, collected, received, and
disbursed in accordance with the procedures set out in the Financing Documents. Lender will be
responsible for all servicing duties other than those specifically undertaken by Local Government
in this Lender Contract.
(b) Remittances. Each of the parties covenants and agrees to promptly remit to the
other party any payments incorrectly received by such party with respect to the Assessment after
the execution of this Lender Contract.
(c) Default and Enforcement. In the event of a default in payment of any installment
of the Assessment as specified in the Financing Documents, Lender agrees to take at least the
following steps to collect the delinquent installment:
(i) Mail a written notice of delinquency and demand for payment to the
Property Owner by both certified mail, return receipt requested, and first
class mail; and
-5-
(ii) Mail a second notice of delinquency to the Property Owner by both certified
mail, return receipt requested, and first class mail at least 30 days after the
date of the first notice if the delinquency is continuing.
If the Property Owner fails to cure the delinquency within 30 days after the mailing of the
second notice of delinquency, the Lender or its designated servicer may notify the Authorized
Representative who will certify to the Local Government in writing of a default by the Property
Owner, and upon receipt of such certification and after doing its own due diligence, Authorized
Representative will enforce the assessment lien for the benefit of Lender pursuant to Tex. Local
Gov't Code Sec. 399.014(c), in the same manner as a property tax lien against real property may
be enforced, to the extent the enforcement is consistent with Section 50, Article XVI, Texas
Constitution.
(d) Priority If the assessment lien is enforced by foreclosure or collected through a
bankruptcy or similar proceeding, the assessment balance and any interest or penalties on the
assessment will have the same priority status as a lien for any other ad valorem tax, pursuant to
Sec. 399.014(a)(2) of the PACE Act.
(e) Final Pa aient and Release. When the Assessment has been satisfied and paid in
full, together with all interest and prepayment premiums, if any, provided under the Financing
Documents and all costs, fees, penalties, and interest applicable under the PACE Act and payable
to Lender or Local Government, Local Government's rights under the Owner Contract will cease
and terminate. Upon notice from Lender that all amounts owing have been paid in full, Local
Government will execute a release of the Assessment and the Owner Contract. Thereafter, the
[Authorized Representative] 1 will record the Release.
(f) Limitations on Local Government's Actions. Without the prior written consent of
Lender, Local Government will not enter into any amendment or modification of or deviation from
the Owner Contract. Local Government will not institute any legal action with respect to the
Owner Contract, the Assessment, or the assessment lien without the prior written request of
Lender.
(g) Limitations of Local „Government's Obligations. Local Government undertakes to
perform only such duties as are specifically set forth in this Lender Contract, and no implied duties
on the part of Local Government are to be read into this Lender Contract. Local Government will
not be deemed to have a fiduciary or other similar relationship with Lender. Local Government
may request written instructions for action from Lender and refrain from taking action until it
receives satisfactory written instructions. Local Government will have no liability to any person
for following such instructions, regardless of whether they are to act or refrain from acting.
(h) Costs. No provisions of this Lender Contract will require Local Government to
expend or risk its own funds or otherwise incur any financial liability in the performance of any of
its duties hereunder.
1 NTD: City to confirm if it wants to record the Releases.
rom
Section 7. Lender's Warranties and Representations. With respect to this Lender
Contract, Lender hereby warrants and represents that on the date on which Lender executes this
Lender Contract:
(a) Lender is a qualified lender under the PACE Program, as defined in
paragraph 3(a) above, and is fully qualified under the PACE Program to enter into this Lender
Contract and the Financing Documents;
(b) Lender has independently and without reliance upon Local Government
conducted its own credit evaluation, reviewed such information as it has deemed adequate and
appropriate, and made its own analysis of the Owner Contract, the Project, and Property Owner's
financial ability to perform the financial obligations set out in the Financing Documents; and
(c) Lender has not relied upon any investigation or analysis conducted by, advice
or communication from, or any warranty or representation by Local Government or any agent or
employee of Local Government, express or implied, concerning the financial condition of the
Property Owner or the tax or economic benefits of an investment in the Assessment.
Section 8. Written Contract Required by the PACE Act. This Lender Contract
constitutes a written contract between Local Government and Lender, as required under
Section 399.006(c) of the PACE Act.
Section 9. Construction and Definitions. This Lender Contract is to be construed in
accordance with and with reference to the PACE Program and PACE Act. Terms used herein, and
not otherwise defined herein, shall have the meanings ascribed to them in: (1) the Notice of
Contractual Assessment Lien, (2) the Owner Contract, (3) the PACE Program, and/or (4) the
PACE Act.
Section 10. Binding Effect. This Lender Contract is binding upon and shall inure to the
benefit of the parties hereto and their respective heirs, representatives, successors, and assigns.
Section 11. Notices. All notices and other communications required or permitted
hereunder shall be in writing and mailed by certified mail, return receipt requested, addressed to
the other party at the address stated below the signature of such party or at such other address as
such party may from time to time designate in writing to the other party, and shall be effective
from the date of receipt.
Section 12. Governing Law. This Owner Contract shall in all respects be governed by
and construed in accordance with the laws of the State of Texas.
Section 13. Entire Agreement. This Lender Contract constitutes the entire agreement
between the parties with respect to the subject matter hereof and shall not be amended or altered
in any manner except by a document in writing executed by both parties.
Section 14. Captions. Paragraph and section titles are for convenience of reference only
and shall not be of any legal effect.
-7-
Section 15. Counterparts. This Lender Contract may be executed in any number of
counterparts, each counterpart may be delivered originally or by electronic transmission, all of
which when taken together shall constitute one agreement binding on the parties, notwithstanding
that all parties are not signatories to the same counterpart.
Section 16. Interest. Interest and penalties in the event of default, as provided above,
are explicitly authorized by Section 399.014(d) of the PACE Act. However, in no event will the
total amount of interest on the Assessment, including statutory interest payable to Local
Government and Contractual Interest payable to Lender under the Financing Documents, exceed
the maximum amount or rate of nonusurious interest that may be contracted for, charged, or
collected under Texas law (the "usury limit"). If the total amount of interest payable to Local
Government and Contractual Interest payable to Lender exceeds the usury limit, interest payable
to Local Government will be reduced and any interest in excess of the usury limit will be credited
to the amount payable to Local Government or refunded. This provision overrides any conflicting
provisions in this Lender Contract.
Section 17. Certification. Local Government certifies that the PACE Program has been
duly adopted and is in full force and effect on the date of this Lender Contract. Property Owner
has represented to Lender and Local Government that the Project is a "qualified project" as defined
in the PACE Program and Section 399.002 of the PACE Act. The Assessment has been imposed
on the Property as a lien in accordance with the PACE Owner Contract and the PACE Act. Local
Government has not assigned or transferred any interest in the Assessment or the PACE Owner
Contract.
Section 18. Construction Terms. If this Lender Contract includes requirements related
to construction of the Project and disbursement of Financing, such requirements are set forth in
Exhibit C attached hereto and incorporated herein by reference. Such requirements may include,
among other things, (1) the disbursement schedule and (2) any holdback amount to be funded
following verification of final project completion.
EXECUTED effective as of 20.
LENDER:
By:
Name:
Title:
Address:
[Signature Page to PACE Lender Contract]
EXECUTED effective as of .20
CITY OF PARIS, TEXAS
By: AUTHORIZED REPRESENTATIVE Pursuant to
Tex. Local Gov't Code §399.006(b)
In
Name:
Title:
Address:
[Signature Page to PACE Lender Contract]
EXHIBIT A
OWNER CONTRACT
EXHIBIT B
FINANCING DOCUMENTS
ASSESSMENT PAYMENT SCHEDULE
Assessment Total:
Payment Schedule:
Project Completion Date: