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PACE LENDER CONTRACT

THIS PACE LENDER CONTRACT (the “Contract”) is made as of the ____ day of

_______________, 20__, by and between Travis County, Texas (“Travis County”) and

________________________ (“Lender”).

RECITALS

A. Travis County has established a program to facilitate the financing by property

owners of water and energy conserving improvements for commercial, industrial, agricultural,

and large multifamily residential (5 or more dwelling units) real property (the “PACE

Program”) pursuant to Resolution No. ____________________________, dated

__________________, 2015, adopted by the Travis County Commissioners Court in accordance

with the provisions of the Property Assessed Clean Energy Act (the “PACE Act”), Texas Local

Government Code, Chapter 399. The Travis County Commissioners Court has designated the

entire territory within Travis County’s jurisdiction as a region within which the authorized

County official named below and the owners of such real property may enter into written

contracts to impose assessments on the property to repay the financing of qualified

improvements.

B. Property Owner is the legal and record owner of the tract of qualified commercial,

industrial, agricultural, or large multifamily residential real property within Travis County’s

jurisdiction located at ____________________________________,______________________,

Texas, and more fully described in Exhibit A attached hereto and made a part hereof (the

“Property”).

C. Pursuant to Application number __________________, Property Owner has

applied to Travis County to participate in the PACE Program by installing or modifying on the

Property certain permanent improvements intended to decrease water or energy consumption or

demand, which are or will be fixed to the Property as “qualified improvements”, as defined in

Section 399.002 of the PACE Act. 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 Travis County have signed a PACE Owner Contract, a copy

of which is attached hereto as Exhibit B and made a part hereof (the “Owner Contract”), in

which Property Owner has agreed to the imposition by Travis County of an assessment on the

Property (the “Assessment”) secured by an assessment lien to repay the Property Owner’s

financing for the Project, as permitted by the PACE Act and set forth in the Notice Of

Contractual Assessment Lien Pursuant to Property Assessed Clean Energy Act, a copy of which

is attached hereto as Exhibit C and made a part hereof. Unless otherwise expressly provided in

this Contract, all terms used herein will have the same meanings ascribed to them in the Owner

Contract.

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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 D 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 Contract is entered into between Travis County and Lender as required by

Section 399.006 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 this

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 Contract, as

shown by the copy attached hereto as Exhibit E and made a part hereof.

AGREEMENT

NOW, THEREFORE, the parties do hereby agree as follows:

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 D. In consideration for the Financing

provided or to be provided by Lender for the Project, and subject to the terms and conditions of

this Contract, Travis County agrees to maintain and continue the Assessment for the benefit of

Lender until the Financing, all contractual interest 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 and to release the Assessment upon notice from Lender of such payment. Travis County

agrees to enforce the assessment lien against the Property for the benefit of Lender in the event

of a default by Property Owner. Travis County will have no obligation to repurchase the

Assessment 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.

2. Installments. The Assessment, including the amount financed and contractual

interest, is due and payable in installments as set forth in the Financing Documents. 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 has been paid in

full, Travis County’s rights under the Owner Contract will cease and terminate, and upon notice

from Lender Travis County will execute and record a release of the Assessment and the Owner

Contract.

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:

• 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 Administration small business investment company;

• Any publicly traded entity; or

• Any private entity that:

o Has a minimum net worth of $5 million;

o 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;

o Can provide independent certification as to availability of funds; and

○ 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, Travis County, and the PACE Program Administrator 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 Financing Documents attached hereto

as Exhibit D; and

explicit written assumption of all of Lender’s obligations under this Contract.

Upon written notice to Travis County, Property Owner, and the PACE Program Administrator of

an assignment or transfer of the right to receive the installments that meets all of these

conditions, Travis County will execute a release of Lender making such assignment from this

Contract, and all of the obligations of the Lender under this Contract accruing after the date of

the assignment will be assumed by and transferred to such assignee or transferee. 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.

4. Financing. 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.

5. Lien Priority and Enforcement. As provided in the PACE 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 1% for each

month or portion of a month the installment remains unpaid. Subject to the limitation set

out in paragraph 10 below, penalties and interest payable under this paragraph will be

retained by Travis County to compensate it for the cost of enforcing the Assessment.

(b) The Assessment, together with any penalties and interest thereon,

(1) is a first and prior lien against the Property from the date on which the

Notice of Contractual Assessment Lien Pursuant to Property Assessed Clean Energy Act

is filed in the Official Public Records of Travis County, as provided by Section 399.013

of the PACE Act, until the Assessment and any penalties and interest are paid; and

(2) 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.

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 will

be transferred to the succeeding owner without recourse on Travis County or the PACE

Program Administrator, 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 assessment lien will be enforced by Travis County

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, Travis County 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.

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 attached hereto

as Exhibit D. Unless otherwise specifically undertaken by or on behalf of the PACE Program

Administrator in the Financing Documents, Lender will be responsible for all servicing duties

other than those specifically undertaken by Travis County in this Contract.

(b) Remittances. Each of the parties covenants and agrees promptly to remit to the

other party any payments incorrectly received by such party with respect to the Assessment after

the execution of this Contract.

installment of the Assessment as specified in the Financing Documents, Lender agrees to take at

least the following steps to collect the delinquent installment:

(1) Mail a written notice of delinquency and demand for payment to the Owner by both

certified mail, return receipt requested, and first class mail and

(2) Mail a second notice of delinquency to the 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 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 Travis County in writing of a

default by the Owner, and upon receipt of such notice, Travis County agrees that the Authorized

County Official 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) Final Payment and Release. When the Assessment has been satisfied and paid in

full, together with all interest provided under the Financing Documents and all costs, fees,

penalties, and interest applicable under the PACE Act and payable to Lender or Travis County,

Travis County’s rights under the PACE Owner Contract will cease and terminate, and upon

notice of such payment from Lender, Travis County will execute and record a release of the

Assessment and the Owner Contract.

(e) Limitations on Travis County’s Actions. Without the prior written consent of

Lender, Travis County will not enter into any amendment or modification of or deviation from

the Owner Contract. Travis County 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.

(f) Limitations of Travis County’s Obligations. Travis County undertakes to perform

only such duties as are specifically set forth in this Contract, and no implied duties on the part of

Travis County are to be read into this Contract. Travis County will not be deemed to have a

fiduciary or other similar relationship with Lender. Travis County may request written

instructions for action from Lender and refrain from taking action until it receives satisfactory

written instructions. Travis County will have no liability to any person for following such

instructions, regardless of whether they are to act or refrain from acting.

(e) Costs. No provisions of this Contract will require Travis County to expend or risk

its own funds or otherwise incur any financial liability in the performance of any of its duties

hereunder.

7. Lender’s Warranties and Representations. With respect to this Contract, Lender

hereby warrants and represents that on the date on which Lender executes this 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 Contract and the

Financing Documents;

(b) Lender has independently and without reliance upon Travis County 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;

communication from, or any warranty or representation by Travis County or any agent or

employee of Travis County, express or implied, concerning the financial condition of the

Property Owner or the tax or economic benefits of an investment in the Assessment.

8. Written Contract Required by the PACE Act. This Contract constitutes a written

contract between Travis County and Lender, as required under Section 399.006 of the PACE

Act.

9. Miscellaneous.

(a) Binding Effect. This Contract is binding upon and shall inure to the benefit of the

parties hereto and their respective heirs, representatives, successors, and assigns.

(b) 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.

GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS

OF THE STATE OF TEXAS (WITHOUT REGARD TO THE CONFLICT OF LAWS

PRINCIPLES OF SUCH STATE), INCLUDING ALL MATTERS OF CONSTRUCTION,

VALIDITY AND PERFORMANCE.

(d) Entire Agreement. This 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.

(e) Captions. Section titles are for convenience of reference only and shall not be of any

legal effect.

(f) Counterparts. This Contract may be executed in any number of counterparts, 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.

10. 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 Travis County

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 interest payable to Travis County and Lender exceeds

the usury limit, interest payable to Travis County will be reduced and any interest in excess of

the usury limit will be credited to the amount payable to Travis County or refunded. This

provision overrides any conflicting provisions in this Contract.

11. Certification. Travis County certifies that the PACE Program has been duly

adopted and is in full force and effect on the date of this Contract. Property Owner has

represented to Lender and Travis County 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. Travis

County has not assigned or transferred any interest in the Assessment or the PACE Owner

Contract.

12. Special Provisions. (to be added as necessary)

IN WITNESS WHEREOF, the parties hereto have caused this Contract to be executed as

of the date first above written.

LENDER: TRAVIS COUNTY, TEXAS

By: By:

Name: Bruce Elfant, Travis County Tax

Assessor-Collector

Address:

P.O. Box 149328

____________________________________ Austin, Texas 78714-9328

Title: _______________________________ AUTHORIZED COUNTY OFFICIAL

EXHIBIT A

PROPERTY DESCRIPTION

EXHIBIT B

OWNER CONTRACT

EXHIBIT C

NOTICE OF CONTRACTUAL ASESSMENT LIEN

PURSUANT TO PROPERTY ASSESSED CLEAN ENERGY ACT

EXHIBIT D

FINANCING DOCUMENTS

EXHIBIT E

MORTGAGE HOLDER(S) CONSENT

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