HomeMy WebLinkAboutOrd 6661 01/10/2023 Creating A Pace Area And Establishing The Illinois Finance Authority Property Assessed Clean Energy Program For Recording Owners Of Property That, From Time To Time,May Voluntarily Request The Levy Special AssessmentORDINANCE NO. 6661
AN ORDINANCE CREATING A PACE AREA AND ESTABLISHING
THE ILLINOIS FINANCE AUTHORITY PROPERTY ASSESSED CLEAN ENERGY
PROGRAM FOR RECORD OWNERS OF PROPERTY THAT, FROM TIME TO TIME,
MAY VOLUNTARILY REQUEST THE LEVY OF SPECIAL ASSESSMENTS TO
SECURE THE FINANCING OR REFINANCING OF THEIR PACE PROJECTS;
AUTHORIZING PROGRAM ADMINISTRATORS TO ACT THEREUNDER;
DESIGNATING THE ILLINOIS FINANCE AUTHORITY AS THE SOLE ISSUER OF
BONDS AND NOTES; AND APPROVING RELATED MATTERS
WHEREAS, the Village of Mount Prospect, a duly organized and validly existing
village under the Constitution and the laws of the State of Illinois (the "Governmental remit"), is a
home rule unit of local government of the State of Illinois, and is authorized pursuant to the
Property Assessed Clean Energy Act, 50 ILCS 50/1 et seq., as amended (the "PACE Act"), to
create a "PACE area" (as defined in the PACE Act) and establish a "property assessed clean energy
program" or "program" (as defined in the PACE Act) to facilitate access to capital used by "record
owners" (as defined in the PACE Act) of "property" (as defined in the PACE Act) for the financing
or refinancing of "energy projects" (as defined in the PACE Act); and
WHEREAS, the Illinois Finance Authority, a body politic and corporate duly
organized and validly existing under and by virtue of the laws of the State of Illinois (the
"Authority"), is authorized to issue bonds or notes in accordance with the PACE Act and pursuant
to subsection (d) of Section 825-65 of the Illinois Finance Authority Act, 20 ILCS 3501/801-1 et
seq., to fund "PACE Projects" (as defined in the Illinois Finance Authority Act, and energy
projects, which are known as "PACE Projects" herein), which bonds or notes will be secured, in
part, by "assessments" (as defined in the PACE Act) levied on properties benefitted by PACE
Projects as voluntarily requested by the record owners pursuant to "assessment contracts" (as
defined in the PACE Act); and
WHEREAS, pursuant to Section 10 of the PACE Act, the Governmental Unit may
establish a program administered by either one or more than one "program administrator" (as
defined in the PACE Act) for a PACE area on behalf of or at the discretion of the Governmental
Unit, and under such program, the Governmental Unit, from time to time, may assign such
assessment contracts to "permitted assignees" (as defined in the PACE Act), including the
Authority, without competitive bidding or the solicitation of requests for proposals or requests for
qualifications to fund PACE Projects; and
WHEREAS, in order to lessen the burdens on counties and municipalities
throughout Illinois that may desire to create PACE areas and establish property assessed clean
energy programs, to attract "capital providers" (as defined in the PACE Act) to purchase bonds or
notes issued by the Authority to fund PACE Projects throughout Illinois, and to assist record
owners in the financing or refinancing of PACE Projects throughout Illinois, the Authority,
pursuant to its Resolution 2022 -0412 -GP 10, authorized the formation of Illinois C -PACE Open
Market Initiative, d/b/a C -PACE Open Market Initiative, an Illinois not-for-profit corporation and
component unit of the Authority (the "C -PACE Oren Market Initiative"), to administer a
nonpartisan, nonpolitical property assessed clean energy program for interested "governmental
units" (as defined in the PACE Act) throughout Illinois (the "Illinois Finance ALIthority PACE
Program") for the benefit of a statewide, open market in which the "governing body" (as defined
in the PACE Act) of each governmental unit may create a PACE area and establish the Illinois
Finance Authority PACE Program pursuant to the procedures provided in Section 15 of the PACE
Act by the adoption of an ordinance or resolution; and
WHEREAS, as further described in the report of the Illinois Finance Authority
PACE Program described below and attached hereto, the Authority shall be the sole issuer of any
bonds or notes to finance or refinance PACE Projects of record owners that have applied and have
been approved for such financing or refinancing under the Illinois Finance Authority PACE
Program, and any such bonds or notes purchased by capital providers or any interim financing
provided by a "warehouse fund" (as defined in the PACE Act) prior to the issuance of such bonds
or notes shall not be general obligations of the State of Illinois or any governmental unit including
the Governmental Unit; and
WHEREAS, in consideration of the Governmental Unit's desire to avoid the need
to devote the time and resources necessary to develop and implement a property assessed clean
energy program with the features of the Illinois Finance Authority PACE Program and to otherwise
be required to issue bonds or notes to finance or refinance PACE Projects and incur the related
compliance or accounting obligations, the Governmental Unit now desires to create a PACE area,
to establish the Illinois Finance Authority PACE Program as a property assessed clean energy
program for such PACE area that shall be administered on behalf of the Governmental Unit at all
times by the C -PACE Open Market Initiative, to facilitate access to capital from more than one
program administrator, and to benefit from the Authority issuing all bonds and notes to finance or
refinance PACE Projects approved under the Illinois Finance Authority PACE Program in a
statewide, open market; and
WHEREAS, in furtherance of its participation in such statewide, open market, the
Governmental Unit now desires to delegate to the C -PACE Open Market Initiative, among other
things, the discretion to consider and approve capital providers or their affiliates as participants in
the Illinois Finance Authority PACE Program to act as program administrators on a non-exclusive
basis, for their own account and for the account of others of their choosing, to originate financings
or refinancings of PACE Projects, to purchase or arrange for the purchases of the related bonds or
notes issued by the Authority, to provide or arrange any related interim financing by a warehouse
fund prior to the issuance of such bonds or notes, and to provide or arrange for the administration
and servicing of such PACE Projects.
NOW, THEREFORE, BE IT ORDAINED BY THE MAYOR AND BOARD
OF TRUSTEES OF THE MOUNT PROSPECT, ILLINOIS, ACTING IN THE EXERCISE
OF THEIR HOME RULE POWERS AS FOLLOWS:
Section 1. Incorporation of the Recitals. The Governmental Unit hereby
finds that all of the statements contained in the recitals to this Ordinance are true, correct and
complete and are hereby incorporated by reference thereto and are made a part hereof.
Section 2. Authorization of More than One Program Administrator.
a. The Governmental Unit hereby authorizes the Illinois C -PACE Open Market
Initiative to act as a program administrator (the "Program Sponsor" or the "PACEArea
Administrator") for the Illinois Finance Authority PACE Program on behalf of the
Governmental Unit on the terms and pursuant to the conditions set forth in this Ordinance,
including the report of the Illinois Finance Authority PACE Program, as provided herein
and therein.
b. The duties of the PACE Area Administrator are to act as a liaison to the
Governmental Unit and its residents, taxpayers, and other interested persons as further
described in the report of the Illinois Finance Authority PACE Program, to prescribe the
terms and conditions whereby the Governmental Unit can facilitate access to capital from
more than one program administrator, and to consider and approve capital providers or
their affiliates to act as program administrators for one or more PACE Projects (each, a
`"P C',E Proiect Administrator) under the Illinois Finance Authority PACE Program at the
discretion of the Governmental Unit, which discretion is hereby delegated by the
Governmental Unit to the PACE Area Administrator. Each PACE Project Administrator
shall be authorized, on a non-exclusive basis, for its own account and for the account of
others of its choosing, to originate financings or refinancings of PACE Projects, to purchase
or arrange for the purchases of the related bonds or notes issued by the Authority, to provide
or arrange any related interim financing by a warehouse fund prior to the issuance of such
bonds or notes, and to provide or arrange for the administration and servicing of such PACE
Projects.
c. Upon approval by the PACE Area Administrator to act as a program
administrator for the Illinois Finance Authority PACE Program, each PACE Project
Administrator shall be deemed to have agreed to perform the duties and obligations set
forth in this Ordinance, including the duties and obligations set forth in the report of the
Illinois Finance Authority PACE Program, as provided herein and therein, and any other
duties or obligations necessary, appropriate, or desirable in connection with the Illinois
Finance Authority PACE Program as the PACE Area Administrator may prescribe from
time to time, as such duties and obligations are allocated among the Governmental Unit,
the PACE Area Administrator, and the PACE Project Administrator, in each case, at the
PACE Project Administrator's sole cost and expense.
d. The Illinois Finance Authority PACE Program shall terminate at such time as
the Authority ceases to issue bonds or notes to fund PACE Projects, as evidenced by the
notice hereinafter provided. The PACE Area Administrator, as a component unit of the
Authority, shall use its best efforts to provide at least sixty (60) calendar days prior written
notice thereof to the Governmental Unit and provide at least thirty (30) calendar days prior
written notice thereof to each PACE Project Administrator. The Governmental Unit may
terminate or suspend the Illinois Finance Authority PACE Program at any time, for any
reason or no reason, after giving written notice thereof to the PACE Area Administrator at
least sixty (60) calendar days before the termination or suspension is to be effective. Upon
receiving such written notice from the Governmental Unit, the PACE Area Administrator
shall give written notice thereof to any PACE Project Administrator at least thirty (30)
calendar days before the termination or suspension is to be effective. The termination or
suspension of the Illinois Finance Authority PACE Program shall not relieve the PACE
Area Administrator and any PACE Project Administrator of their respective obligations
incurred before such termination or suspension and that are required to be performed
thereafter, all of which shall survive.
e. Without limiting the right of the PACE Area Administrator to approve, deny,
terminate, or suspend any PACE Project Administrator at its discretion, the Governmental
Unit reserves the right to terminate or suspend any PACE Project Administrator at any
time, for any reason or no reason, after giving written notice thereof to the PACE Area
Administrator at least sixty (60) calendar days before the termination or suspension is to
be effective. Upon receiving such written notice from the Governmental Unit, the PACE
Area Administrator shall give written notice thereof to the PACE Project Administrator at
least thirty (30) calendar days before the termination or suspension is to be effective. The
termination or suspension of any PACE Project Administrator shall not relieve such PACE
Project Administrator of its obligations incurred before such termination or suspension and
that are required to be performed thereafter, all of which shall survive.
Section 3. Designation of Illinois Finance Authority as Sole Issuer of Bonds
or Notes; Creation of the PACE Area; Report of the Illinois Finance Authority PACE
Program.
a. The Governmental Unit hereby finds that the financing or refinancing of PACE
Projects in a statewide, open market is a valid public purpose that furthers essential public
and governmental purposes, including, but not limited to, reduced energy costs and
greenhouse gas emissions, enhanced water quality and conservation, economic stimulation
and development, improved property resiliency and valuation, and increased employment.
b. The Governmental Unit intends to facilitate access to capital from more than
one PACE Project Administrator as approved by the PACE Area Administrator and other
capital providers or their designated transferees as approved by the Authority to provide
funds for PACE Projects, which will be repaid by assessments on the properties benefitted
with the agreement of the record owners.
c. The Governmental Unit hereby designates the Authority to be the sole issuer of
any bonds or notes under the Illinois Finance Authority PACE Program and hereby
authorizes the Authority to assist record owners with any interim financing to be provided
by a warehouse fund prior to the issuance of such bonds or notes under the Illinois Finance
Authority PACE Program, in each case to fund PACE Projects approved under the Illinois
Finance Authority PACE Program. The PACE Area Administrator may act as the PACE
Project Administrator for one or more PACE Projects funded by interim financing provided
by a warehouse fund established by the Governmental Unit or the Authority, if applicable,
under the Illinois Finance Authority PACE Program.
d. The Governmental Unit hereby creates a PACE area for the Illinois Finance
Authority PACE Program that shall be coterminous with the entire corporate limits of the
Governmental Unit (the "PACE Arca") for the benefit of a statewide, open market.
e. The C-PACE Open Market Initiative has prepared the report of the Illinois
Finance Authority PACE Program attached hereto as Exhibit A (as amended,
supplemented, or modified from time to time by the PACE Area Administrator, the
"Prpg,rarn Ike tart") in conformity with the PACE Act, setting forth, inter alia, the types of
PACE Projects that may be financed or refinanced, or interim financed pursuant to this
Ordinance. The Program Report is hereby incorporated by reference thereto and made a
part hereof. The Governmental Unit hereby approves the Program Report. The Program
Report shall be made available for public inspection by the Governmental Unit in a manner
deemed prudent in its sole discretion and shall be posted and reasonably made available at
all times by the Illinois Finance Authority PACE Program on the following website:
www.IFApace.com. The PACE Area Administrator shall provide the Governmental Unit
at least thirty (30) calendar days prior written notice of the effective date of any
amendment, supplement, or modification of the Program Report.
Section 5. No Public Hearing; Program Established. The Governmental
Unit hereby finds that no public hearing shall be required in connection with the adoption or
amendment of the Illinois Finance Authority PACE Program and hereby establishes the Illinois
Finance Authority PACE Program in accordance with this Ordinance and the Program Report.
Section 6. Assessment Contracts and Assignment Agreements.
a. The Governmental Unit shall impose an assessment only pursuant to the terms
of a recorded assessment contract with the record owner of the property to be assessed, the
form of which shall be in substantially the form of Appendix A to the Program Report
(each, an "Assessment Contract"). The form of Assessment Contract enclosed as
Appendix A to the Program Report is hereby approved by the Governmental Unit.
b. The Governmental Unit shall assign Assessment Contracts pursuant to certain
assignment agreements with the Authority as collateral for the financing or refinancing, or
interim financing, of PACE Projects, the form of which shall be in substantially the form
of Appendix B to the Program Report (each, an "Assi ,,nnient A ire "). The form of
Assignment Agreement enclosed as Appendix B to the Program Report is hereby approved
by the Governmental Unit.
c. Any one of the Village Manager, Finance Director, or any person duly
appointed by the Governmental Unit to serve in such offices on an interim basis or
otherwise authorized to act as provided by an ordinance or resolution of the Governmental
Unit, acting singly (each, an "Authorized Officer"), is hereby authorized to execute and
deliver Assessment Contracts with record owners meeting the requirements set forth in the
PACE Act and the Program Report and execute and deliver related Assignment
Agreements with the Authority, in each case with such changes, deletions, and insertions
as shall be approved by an Authorized Officer and such other supporting documents and
instruments as may be necessary or appropriate to carry out and comply with the provisions
of each Assessment Contract and Assignment Agreement. The execution and delivery of
such Assessment Contracts, Assignment Agreements, other contracts, agreements,
documents, and instruments shall be conclusive evidence of the approval of the forms,
terms and provisions thereof, including, without limitation, any changes, deletions, or
insertions to the forms of documents now before the Governmental Unit, by an Authorized
Officer executing the same and by the Governmental Unit.
d. Prior to the PACE Area Administrator submitting an Assessment Contract to
an Authorized Officer for execution, the applicable PACE Project Administrator shall (i)
make the determination that the property to be assessed is entirely within the PACE Area,
(ii) have received evidence of all the enumerated items in Section 25(c) of the PACE Act
and Section 25(d) of the PACE Act, and (iii) deliver to the PACE Area Administrator a
written certification as to the matters set forth in clauses (i) and (ii) and a representation
and warranty that such PACE Project Administrator as a program administrator of the
Illinois Finance Authority PACE Program is in compliance with its duties and obligations
hereunder (the "Compliance Certificate"). The Compliance Certificate shall be in form
and substance acceptable to the PACE Area Administrator. The Governmental Unit
authorizes and directs the PACE Area Administrator to receive each Compliance
Certificate on its behalf from PACE Project Administrators and, upon receipt, to deliver
each Compliance Certificate to the Governmental Unit.
e. Without limiting the generality of the first sentence of Section 6(d), if
applicable, the Governmental Unit authorizes and directs the applicable PACE Project
Administrator to receive on its behalf the copies or other proof of the notices to, and written
consents of, any mortgage holders, pursuant to Section 25(d) of the PACE Act, for the
record owner to enter into the assessment contract, and to deliver copies thereof to the
PACE Area Administrator together with the Compliance Certificate for further delivery to
the Governmental Unit.
f. Upon execution and delivery of any Assessment Contract and related
Assignment Agreement, and prior to any funding, the applicable PACE Project
Administrator shall file or cause to be filed such Assessment Contract and such Assignment
Agreement for recording with the Office of the Recorder of Deeds in Cook County.
g. Without limiting the generality of the first sentence of Section 6(d), if
applicable, the Governmental Unit authorizes and directs that the applicable PACE Project
Administrator receive on its behalf the written confirmation from the record owner,
pursuant to Section 25(c)(8) of the PACE Act, that the PACE Project was properly
acquired, constructed, installed, or modified and is operating as intended (the "Completion
Certificate"), and to deliver a copy thereof to the Governmental Unit, and, if requested, to
the PACE Area Administrator. The failure of the PACE Project Administrator to deliver
a copy of any Completion Certificate to the Governmental Unit or the PACE Area
Administrator shall not be deemed to impair the related Assessment Contract or any
funding thereunder.
Section 7. Additional Actions. Each Authorized Officer is hereby authorized
without any further approval to:
a. negotiate, execute, and deliver such other supporting documents as may be
necessary or appropriate to implement the Illinois Finance Authority PACE Program; and
b. ratify amendments, modifications, or supplements to the Program Report from
time to time as requested by the PACE Area Administrator to the extent such amendments,
modifications, or supplements comply with the parameters and requirements set forth in
the PACE Act and this Ordinance.
Section 8. Governmental Unit Fees. In consideration of its execution and
delivery of any Assessment Contracts, Assignment Agreements, or other supporting documents as
may be necessary or appropriate to implement the Illinois Finance Authority PACE Program, any
record owner entering into an Assessment Contract with the Governmental Unit shall pay or cause
to be paid a fee of one hundred fifty dollars ($150) to the Governmental Unit, payable on or before
the closing date of any related financing or refinancing, or interim financing, that has been
approved under the Illinois Finance Authority PACE Program, unless such fee is otherwise waived
by the Governmental Unit on a case-by-case basis. The applicable PACE Project Administrator
shall be responsible for collecting and remitting such fee to the Governmental Unit.
Section 9. Reservation of Rights for Other Programs. The Governmental
Unit reserves the right to:
a. create PACE areas and establish related property assessed clean energy
programs other than the PACE Area and the Illinois Finance Authority PACE Program to
be administered by other for-profit entities or not-for-profit entities or the Governmental
Unit, as determined by the governing body, pursuant to one or more separate ordinances or
resolutions to be considered or previously considered and approved or adopted, as the case
may be, at one or more meetings of the Governmental Unit; and
b. issue "PACE Bonds" (as defined in the PACE Act) to fund PACE Projects
pursuant to the rights and powers vested in the Governmental Unit by the PACE Act if
such PACE Projects have been approved under any property assessed clean energy
program established by the Governmental Unit other than the Illinois Finance Authority
PACE Program.
Section 10. Reserved.'
Section 11. Amendments. The Governmental Unit acknowledges the
importance of uniformity and consistency of the Illinois Finance Authority PACE Program in a
statewide, open market. Therefore, the Governmental Unit agrees to consider in good faith any
amendment, supplement, or modification of this Ordinance or the Program Report proposed by
the PACE Area Administrator or the Authority and not to make any amendment, supplement, or
modification to this Ordinance or the Program Report proposed by the Governmental Until unless
and until approved in writing by the PACE Area Administrator or the Authority, which approvals
will not be unreasonably withheld.
Section 12. Enactment. The provisions of this Ordinance are hereby declared
to be separable and if any section, phrase, or provision shall for any reason be declared by a court
of competent jurisdiction to be invalid or unenforceable, such declaration shall not affect the
validity or enforceability of the remainder of the sections, phrases, and provisions hereof. All
ordinances, orders, and resolutions and parts thereof in conflict herewith are to the extent of such
conflict hereby repealed, and this Ordinance shall take effect and be in full force immediately upon
its adoption. No provision of the Mount Prospect Village Code or violation of any provision of
the said Code shall be deemed to impair the validity of this Ordinance or the instruments authorized
by this Ordinance or to impair the security for or payment of the instruments authorized by this
Ordinance; provided further, however, that the foregoing shall not be deemed to affect the
availability of any other remedy or penalty for any violation of any provision of the Mount Prospect
Village Code.
Section 13. This Ordinance shall become effective upon its passage and
approval.
AYES: Filippone, Gens, Matuszak, Saccotelli, Zadel
NAYS: None
ABSENT: Rogers
PASSED and APPROVED this 10th day of Janu;
ATTEST:
� V.
Karen M. Agoranost
Village Clerk
EXHIBIT A
Report of the Illinois Finance Authority PACE Program (including Appendix A and B)
OPEN MARKETANITIATIVE,
Property Assessed Clean Energy
Program Report
Printed by authority of the State of Illinois, 10/11/2022, published electronically only
MADE POSSIBLE IN PART BY DSS ADVISORS LLC
AND THE GENEROUS SUPPORT OF THE FOLLOWING:
ENVIRONMENTAL LAW & POLICY CENTER
KATTEN MUCHIN ROSENMAN LLP
� �IIMu AS
SMART ENERGY DESIGN ASSISTANCE CENTER
AT THE UNIVERSITY OF ILLINOIS, URBANA-CHAMPAIGN
FOLEY & LARDNER LLP
ffil'i"m
FOLEY i LARDNER LLP
11
Preface to the Program Report by the Illinois Finance Authority
Commercial Property Assessed Clean Energy ("C -PACE") financing can be used by owners and
developers of commercial properties to finance or refinance eligible improvements in connection
with renovations of existing buildings and new construction, in each case up to 25% of the value
of the property. Eligible improvements generally include fixtures, products, systems, equipment,
devices, and materials intended for energy efficiency, renewable energy, resiliency, or water use;
electric vehicle charging stations are eligible improvements too. C -PACE financing has features
that make it very attractive as an alternative or a supplement to existing types of commercial real
estate financing. For example, C -PACE financing is non-recourse to the record owner and
assignable upon transfer of the property. While these features may be found in conduit mortgage
loans included in commercial mortgage-backed securities (often referred to as CMBS loans or
CMBS financing), they are not common in either traditional bank financing or mezzanine
financing, which is often used to finance significant new commercial real estate construction or
deep energy retrofit projects. C -PACE financing also has attractive features that are not
available with any other type of commercial real estate financing. C -PACE financing does not
accelerate upon a default (payment or otherwise), permits terms of up to 40 years, and allows
financing of up to 100% of all project and closing costs. All capitalized terms in this Preface not
otherwise defined have the meanings set forth in the accompanying Program Report.
C -PACE financing is secured by a voluntary special assessment on the benefited property that is
represented by an assessment contract between the record owner and the Governmental Unit.
The special assessment is senior to all mortgages and other private liens on such property and is
pari passu to other real estate taxes and assessments. The lien priority and preferences of C -
PACE financing is the primary reason why capital providers are willing to provide up to 100%
financing that is non-recourse, non -callable in the event of default, and assignable in the event of
a transfer of the property. Interest on C -PACE financing is usually fixed throughout the term,
although that is not required by the PACE Act, and is generally well below the rates charged by
mezzanine lenders and equipment lenders. Under the PACE Act, the assessment contract must
be recorded, and serves as collateral for C -PACE financing, similar to a recorded commercial
mortgage serving as collateral for a commercial real estate loan. C -PACE financing to fund
PACE Projects occurs through the issuance of conduit debt obligations (such as bonds or notes),
similar to other special assessment financing programs in Illinois.
Despite these attractive features and plentiful amounts of capital from providers enthusiastic to
consider environmental, social, and governance factors alongside financial factors in the
investment decision-making process, the use of C -PACE financing in Illinois has been limited to
date. Counties and municipalities have informed the Illinois Finance Authority of their desire to
avoid the need to devote the time and resources necessary to develop and implement a property
assessed clean energy program with the features of the Illinois Finance Authority PACE Program
and to otherwise be required to issue bonds or notes to finance or refinance PACE Projects and
incur the related compliance or accounting obligations. Additionally, capital providers have
informed the Authority of their desire for a fair and competitive statewide, open market
sponsored by an independent, neutral program administrator. Finally, record owners have
informed the Authority of their desire to minimize the program administration and governmental
fees associated with C -PACE financing.
iii
The Authority has observed that the lack of market activity is also because C -PACE financing
under existing property assessed clean energy programs is not uniform throughout Illinois, and
under such programs, capital providers cannot administer and service their own C -PACE
financing originations. Moreover, under existing property assessed clean energy programs,
program administrators are tasked with roles and responsibilities that are typically performed by
capital providers, such as marketing, establishing processes for contractors, statutory
underwriting, processing applications, billing and collecting, and enforcement. This structure, a
vestige of the C -PACE financing market's earliest days, is both cumbersome and costly. Similar
to commercial mortgage lenders, the Authority believes capital providers in the C -PACE
financing market should instead facilitate access to capital by performing these activities for their
own account or others of their choosing, with their own resources, and within appropriate
guidelines.
In consideration of these factors, the Illinois Finance Authority has standardized the structure,
implementation, and delivery of C -PACE financing in Illinois to lessen the burdens on counties
and municipalities throughout Illinois that may desire to create PACE areas and establish
property assessed clean energy programs, to attract capital providers to purchase bonds or notes
issued by the Authority to fund PACE Projects throughout Illinois, and to assist record owners in
the financing or refinancing of PACE Projects throughout Illinois. The nonpartisan, nonpolitical
Illinois Finance Authority PACE Program intends to achieve these objectives in the PACE Area
created by the Governmental Unit by applying the structure of the commercial mortgage industry
to better align the roles and responsibilities of the C -PACE financing market. The Illinois
Finance Authority PACE Program allows capital providers to not only originate C -PACE
financings in a statewide, open market sponsored by an independent, neutral program
administrator but also allows capital providers to administer and service PACE Projects directly
or through affiliates in the capacity of PACE Project Administrators, for their own account or
others of their choosing. Record owners will benefit from lower C -PACE financing costs amid
the resulting fairness and competition among capital providers, at no cost to the Governmental
Unit.
All parties will also benefit from the Authority's vast experience in the issuance of conduit debt
obligations, which each year amounts to billions of dollars of long-term investment in voluntary
projects of private -sector borrowers in Illinois. As a statewide conduit issuer of bonds and notes,
the Authority's uniform C -PACE financing documents for all PACE Projects will simplify due
diligence in the asset-backed securities market for capital providers in contrast to a fragmented
market of numerous county and municipal issuers of conduit debt obligations throughout Illinois.
Accordingly, the Authority elected to leverage these competitive advantages to achieve vertical
integration and economies of scale in local markets such as the PACE Area by forming the C -
PACE Open Market Initiative, an Illinois not-for-profit corporation and component unit of the
Authority, to offer an independent, neutral program administrator in the capacity of PACE Area
Administrator to the Governmental Unit and its residents and taxpayers, at no cost to the
Governmental Unit.
The goals of the C -PACE Open Market Initiative are to spur investment in energy efficiency and
water conservation, and to stimulate growth of renewable energy and resilient building design
throughout Illinois.
- Brad R. Fletcher
IV
Introduction.......... ............. .................... ....................................... ......................................... 2
Purposeof the Program Report ......................................................... ...... ........... ........ --- ...... 2
ProgramDescription................. .....................................................................................,., 2
Program Roles and Responsibilities ........ ...........................................,.., ........................... ...,.. 3
Marketingand Education ......................... ........ . ................................................................... 6
Eligibility... ................... ................ ............... ..... ..................................................................... 6
Quality Assurance and Antifraud............... ................. ---- ................. a...,...... .................. ............ 7
Program Underwriting Guidelines ...................... ..... ...............,,...... ........... ......... .,,........ --- ... 8
ProgramApplication Process.......... .... .................... ..................... ............. ...... .................... ...... 10
Forms of Assessment Contract and Assignment Agreement....,.„....„........................................... 11
Planof Finance ......................... .............. ................. ...... ........................................„ ,......,.... 12
Billingand Collecting .............................. ................................................................... ......... 13
UserFees.................................................... .................. ..........................-- .......... 14
Appendices
A. Form of Assessment Contract
B. Form of Assignment Agreement
7
This Program Report was approved by the Governmental Unit by adopting the ordinance to
which this Program Report accompanies (the "PACE + r iliall "). All terms defined in the
PACE Ordinance will, for all purposes of this Program Report, have the meanings specified
therein unless the context otherwise requires.
The PACE Ordinance meets the requirements of Section 15 of the PACE Act. The
Governmental Unit created the PACE Area to make financing and refinancing opportunities
available to any record owner of property that voluntarily requests the levy of a special
assessment to secure the financing or refinancing of a proposed PACE Project pursuant to an
assessment contract.
111urpose of die Repeort
As required by the PACE Act, the Program Report contains a basic summary of the Illinois
Finance Authority PACE Program and its statewide, open market architecture. The Illinois
Finance Authority PACE Program is sometimes referred to, or marketed as, the "IFA PACE
Program„ or the "I FA....ML111ici �a�pic:. :PAC[,; Prc� cram" or the "IFA Count —Advantage 1?AC1r
Program").
The Governmental Unit is establishing the nonpartisan, nonpolitical IFA PACE Program to
accelerate private investment in PACE Projects affixed to existing and newly constructed
commercial, industrial, non-residential agricultural, and multi -family (5 or more units) properties
in the PACE Area, at no cost to the Governmental Unit. The IFA PACE Program is distinctly
different from any existing property assessed clean energy program that has been launched by a
county or municipality in Illinois. Under the IFA PACE Program, the Governmental Unit is
participating in a statewide, open market of PACE areas administered by the C -PACE Open
Market Initiative as the independent, neutral program administrator, referred to as the PACE
Area Administrator. The PACE Area Administrator, among other things, acts as a liaison to the
Governmental Unit and its residents, taxpayers, and other interested persons. Record owners,
meanwhile, are afforded the opportunity to work with capital providers of their own choosing as
PACE Project Administrators and to assemble the team of professionals desired for any potential
PACE Project (e.g., architects, engineers, energy auditors, appraisers, contractors, bond counsel,
trustees, title companies).
The IFA PACE Program is appealing because its neutrality among capital providers avoids the
conflicts of interest that exist under certain other existing property assessed clean energy
programs throughout Illinois. Under the IFA PACE Program, capital providers or their affiliates
will administer and service their respective PACE Projects as PACE Project Administrators.
This feature eliminates the additional program administration fees otherwise charged by affiliates
of competing capital providers or other third parties that have secured or will endeavor to secure
an exclusive role as program administrator for a county or municipality. As a result, the IFA
PACE Program incentivizes competition to lower costs and improve service for record owners.
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Additionally, in their capacity as PACE Project Administrators, capital providers can fairly
manage existing and future relationships with record owners without the risks associated with
sharing business intelligence with affiliates of competing capital providers that have secured an
exclusive role as program administrator for a county or municipality.
The statewide, open market architecture of the IFA PACE Program also offers what no other
property assessed clean energy program in Illinois can offer: uniformity; the financing or
refinancing of all PACE Projects regardless of location is undertaken by a single issuer of bonds
or notes. The Illinois Finance Authority has statewide authorization to issue bonds and notes to
fund PACE Projects located in any PACE area, thus doing away with any issuance of bonds or
notes by the Governmental Unit. In turn, the Governmental Unit and its fellow counties and
municipalities enjoy the benefit of not incurring any related conduit debt compliance or
accounting obligations. The simplification of a single conduit issuer with statewide
authorization to fund PACE Projects attracts capital providers that desire a standardized,
efficient, and affordable way to facilitate access to capital for record owners, further reducing
legal and financing costs for such record owners.
Under the IFA PACE Program, the Governmental Unit always retains its prerogatives as set
forth in the PACE Act and the PACE Ordinance, including the right to establish other property
assessed clean energy programs and to issue its own bonds or notes under such other programs.
Program Roles and Responsibilities
The roles and responsibilities of the Governmental Unit, the Authority, the PACE Area
Administrator, the PACE Project Administrators, and the capital providers under the IFA PACE
Program are described below.
Governmental Unit
Pursuant to the PACE Ordinance, any one of the Authorized Officers set forth therein, acting
singly, on behalf of the Governmental Unit, may execute and deliver an assessment contract and
related assignment agreement assigning the assessment contract to the Authority as collateral for
the financing or refinancing, or interim financing, of a PACE Project.
Illinois Finance Authority
Pursuant to the PACE Ordinance, the Governmental Unit has designated the Authority as the
sole conduit issuer of bonds and notes to fund any PACE Projects approved under the IFA PACE
Program.
The Authority is a body politic and corporate created under the laws of the State of Illinois (the
"State"). The Authority was created under the Illinois Finance Authority Act, 20 ILCS
3501/801-1 et seq., as amended from time to time (the "AuthorityAct"), which consolidated
seven of the State's previously existing financing authorities. Under the Authority Act, the
Authority may not have outstanding at any time bonds or notes for PACE Projects in an
aggregate principal amount exceeding $2,000,000,000 (subject to change, from time to time, by
acts of the State Legislature). Pursuant to the Authority Act, the Authority is governed by up to
15 Members appointed by the Governor with the advice and consent of the State Senate. The
Members receive no compensation for the performance of their duties but are entitled to
reimbursement for all necessary expenses incurred in connection with the performance of such
duties.
Members of the Authority consider and approve capital providers to purchase or arrange for the
purchases of bonds or notes issued by the Authority, and to provide or arrange any related
interim financing by warehouse funds prior to the issuance of such bonds or notes, in each case
to fund PACE Projects approved under the IFA PACE Program.
Meetings of the Authority are conducted in accordance with the Open Meetings Act, 5 ILCS
120/1 et seq., as amended (the "O ems Meetings Act"). An annual schedule of regular meetings
of the Authority and all notices, agenda, meeting details, and minutes of each regular or special
meeting are posted on the following website:a
PACE Area Administrator
Pursuant to the PACE Ordinance, the Governmental Unit has authorized the PACE Area
Administrator to act as the program administrator to manage day-to-day operations of the IFA
PACE Program. The PACE Area Administrator will be responsible for administering and
implementing the IFA PACE Program, including: processing requests for financing or
refinancing, or interim financing; coordinating among record owners, counsel, the Authority,
capital providers, PACE Project Administrators, contractors, and other professionals; interfacing
with the Governmental Unit on the execution and delivery of assessment contracts and
assignment agreements; and reporting and arranging for any required reporting to the
Governmental Unit that may be requested from time to time. The PACE Area Administrator will
also act as liaison to the community of the Governmental Unit and will conduct, alone or in
conjunction with others, appropriate marketing and education activities.
Pursuant to the PACE Ordinance, the Governmental Unit also has delegated to the PACE Area
Administrator the discretion to determine which capital providers (or their affiliates) will be
authorized to act as PACE Project Administrators. The eligibility requirements of, and the
terms and conditions for, a capital provider (or its affiliate) to participate in the IFA PACE
Program as a PACE Project Administrator are set forth in a standard form of Master
Participation Agreement. The Master Participation Agreement is supplemented by the IFA
PACE Program Handbook of Supplemental Information and Requirements (as amended,
supplemented, or modified from time to time, the "PACE l landbook"). The PACE Area
Administrator considers and approves PACE Project Administrators, and, if approved, the PACE
Area Administrator and the PACE Project Administrator enter into the Master Participation
Agreement. The form of Master Participation Agreement is available from the PACE Area
Administrator upon request. The PACE Handbook is posted on the following website:
Members of the Authority also serve as the Board of Directors of the PACE Area Administrator.
The Directors receive no compensation for the performance of their duties but are entitled to
reimbursement for all necessary expenses incurred in connection with the performance of such
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duties. Meetings of the PACE Area Administrator are conducted in accordance with the Open
Meetings Act. All notices, agenda, meeting details, and minutes of each regular or special
meeting are posted on the following website .w.. ww, i l l�i.co[ /elm e (1cc ess.
PACE Projekt Administrators
Pursuant to the PACE Ordinance, and upon approval of the PACE Area Administrator, PACE
Project Administrators are authorized to act as program administrators of the IFA PACE
Program. PACE Project Administrators are authorized, on a non-exclusive basis, for their own
account and for the account of others of their choosing, to originate financings or refinancings of
PACE Projects, to purchase or arrange for the purchases of the related bonds or notes issued by
the Authority, and to provide or arrange any related interim financing by warehouse funds prior
to the issuance of such bonds or notes. They are also responsible for providing or arranging for
the provision of administrative and servicing responsibilities of such PACE Projects.
Upon entering into the Master Participation Agreement with the PACE Area Administrator, each
PACE Project Administrator agrees to perform at its sole cost and expense the duties and
obligations set forth in the PACE Ordinance, including this Program Report, the Master
Participation Agreement, and the PACE Handbook, as provided herein and therein.
The Governmental Unit reserves the right to terminate or suspend any PACE Project
Administrator at any time, for any reason or no reason, after giving written notice thereof to the
PACE Area Administrator at least 60 calendar days before the termination or suspension is to be
effective. Upon receiving such written notice from the Governmental Unit, the PACE Area
Administrator shall give written notice thereof to the PACE Project Administrator at least 30
calendar days before the termination or suspension is to become effective.
Ca ital Providers
Capital providers (or their designated transferee(s)) purchase bonds or notes issued by the
Authority and provide or arrange any related interim financing by warehouse funds prior to the
issuance of such bonds or notes, in each case to fund PACE Projects approved under the IFA
PACE Program.
Capital providers must be institutional "accredited investors" (as defined in Rule 501(a) of
Regulation D promulgated under the Securities Act of 1933, as amended) or "qualified
institutional buyers" (as defined in Rule 144A promulgated under the Securities Act of 1933, as
amended).
To be an approved capital provider of the IFA PACE Program, Members of the Authority
consider and approve authorizing resolutions in meetings conducted in accordance with the Open
Meetings Act. Each authorizing resolution of the Authority for the purchase of bonds or notes
by a capital provider or its designated transferee(s) remains in effect for up to three years
following the date of adoption to ensure efficient and timely funding of PACE Projects,
consistent with market expectations. Interested capital providers should contact Authority staff.
A list of approved capital providers is posted on the following website: www.IFA
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Given the statewide, open market architecture of the IFA PACE Program, it is anticipated that
PACE Project Administrators will conduct marketing on behalf of the IFA PACE Program in
their target markets to originate and fund PACE Projects for their own account or the account of
others of their choosing. All marketing materials used by PACE Program Administrators in
connection with the IFA PACE Program must acknowledge that its services are offered through,
or in association with, the Governmental Unit and the Authority (and upon request by the
Authority, the C -PACE Open Market Initiative).
The Authority and PACE Area Administrator endeavor to provide technical assistance with
respect to the marketing of the IFA PACE Program and educating the community regarding the
financing and administration of PACE Projects, as may be reasonably requested by the
Governmental Unit and its residents, taxpayers, and other interested persons from time to time.
The Authority has posted education materials and contact information on the following website:
VVERMJ'mee,com.
Supplemental information regarding resources available to record owners subjecting properties
to the IFA PACE Program by Federal or State agencies, including without limitation, the U.S.
Department of Energy, the U.S. Department of Housing and Urban Development, the U.S.
Department of the Treasury, the Illinois Department of Commerce and Economic Opportunity,
the Illinois Department of Natural Resources, the Illinois Environmental Protection Agency,
regional councils, or economic development corporations may be published from time to time in
the PACE Handbook.
Any financing or refinancing, or interim financing, of a PACE Project approved under the IFA
PACE Program must be accompanied by a written opinion from a nationally recognized
municipal bond counsel in form and substance acceptable to the Authority.
Eligible Improvements
Each type of improvement as prescribed in the PACE Act qualifies for financing or refinancing,
or interim financing, under the IFA PACE Program.
Any of the following types of improvements qualify as PACE Projects under the PACE Act:
• Alternative energy improvements (i.e., electric vehicle charging stations)
• Energy efficiency improvements
• Renewable energy improvements
• Resiliency improvements
• Water use improvements
Pursuant to the PACE Act, the Governmental Unit may exercise discretion to make eligible any
energy efficiency improvement, resiliency improvement, or water use improvement that is
intended as a utility or other cost -savings measure but is not otherwise specifically enumerated in
the PACE Act.
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All eligible improvements must be affixed to an eligible property.
Ell lible Properties
Each type of property as prescribed in the PACE Act qualifies for financing or refinancing, or
interim financing, under the IFA PACE Program.
Any of the following types of privately -owned properties located in the PACE Area qualifies for
financing or refinancing under the PACE Act:
• Commercial
• Industrial
• Non-residential agricultural
• Multi -family (of 5 or more units)
• Any property owned by a not-for-profit entity
Eligible Use of Proceeds
The amount of any financing or refinancing, or interim financing, of a PACE Project approved
under the IFA PACE Program may include any and all of the following: the cost of materials and
labor necessary for acquisition, construction, installation, or modification of the PACE Project,
permit fees, inspection fees, application and administrative fees, financing fees, reserves,
capitalized interest, costs of billing the assessment, and all other fees, costs, and expenses that
may be incurred by the record owner pursuant to the acquisition, construction, installation, or
modification of the PACE Project, and the costs of issuance of bonds or notes issued by the
Authority on a specific or pro rata basis, as determined by the Governmental Unit, as evidenced
by its execution of the assessment contract, and may also include a prepayment premium.
While records owners and PACE Project Administrators may choose any licensed contractor or
contractors, each licensed contractor must sign a written acknowledgement that the applicable
PACE Project Administrator will not authorize final payment to the contractor or contractors
until the Governmental Unit has received the Completion Certificate from the record owner that
the PACE Project was properly acquired, constructed, installed, or modified and is operating as
intended; provided, however, that the contractor or contractors retain all legal rights and
remedies in the event there is a disagreement with the record owner. The PACE Project
Administrator is authorized to receive such Completion Certificate on behalf of the
Governmental Unit. The Completion Certificate shall be in substantially the form attached to the
PACE Handbook.
Quality Assurance and Antifraud
Quality assurance protocols serve to prevent improper or low -quality construction, installation,
or modification of PACE Projects and protect against fraud and abuse of the IFA PACE
Program.
All work requiring a license under any applicable law to acquire, construct, install, or modify a
PACE Project shall be performed by a licensed contractor that has agreed to adhere to a set of
7
terms and conditions through a process established by the applicable PACE Project
Administrator.
Each PACE Project Administrator shall institute quality assurance protocols. Despite the
presence of these protocols and procedures, responsibility for the successful operation of any
PACE Project is that of the record owner and its registered professionals. None of the
Governmental Unit, the Authority, the PACE Area Administrator, the PACE Project
Administrator, capital provider, trustee, servicer, or any of their respective directors, managers,
officers, employees, advisors, or agents shall have any liability for the acquisition, construction,
installation, modification, and operation of any eligible PACE Project.
Program Underwriting Guidelines
Each PACE Project Administrator is likely to have underwriting requirements separate and apart
from the underwriting guidelines prescribed by the IFA PACE Program. At a minimum, each
PACE Project Administrator shall determine that a PACE Project meets the following program
underwriting guidelines, in addition to those guidelines prescribed in the PACE Handbook and
the PACE Act, which will be evidenced by the Compliance Certificate described hereafter. At
no time will the PACE Area Administrator be a party to negotiations of any proposed financing
and assessment between a record owner and the PACE Project Administrator.
Record Owners
In addition to the eligibility requirements described herein, a record owner must be current on all
mortgage debt on the applicable property and the record owner must not have filed for
bankruptcy in the last two years.
Properties/Assets
Pursuant to the PACE Act, the following characteristics disqualify any eligible property from
participating in the IFA PACE Program:
• Any delinquent taxes, special assessments, or water or sewer charges on the property; or
• Any delinquent assessments on the property under a property assessed clean energy
program; or
• Any notices of default or other evidence of property -based debt delinquency have been
recorded and not cured; or
• The property is an asset in a current bankruptcy proceeding.
Each PACE Project Administrator must have further received evidence of whether there are any
involuntary liens on the applicable property, including, but not limited to, construction or
mechanics liens, lis pendens or judgments against the record owner, environmental proceedings,
or eminent domain proceedings. PACE Project Administrators and capital providers (or their
designated transferee(s)) have discretion to evaluate the risk, if any, such involuntary liens pose
to the financing and assessment of the applicable PACE Project.
Senior Lender Consent
Each record owner shall provide to the mortgage holders of any existing mortgages encumbering
or otherwise secured by the applicable property a notice of the record owner's intent to enter into
an assessment contract with the Governmental Unit, together with the maximum principal
amount to be financed or refinanced and the maximum annual assessment necessary to repay that
amount, along with an additional request that the mortgage holders of any existing mortgages
consent to the record owner subjecting the property to the IFA PACE Program. The
Governmental Unit or applicable PACE Project Administrator shall be provided with a copy or
other proof of those notices and the written consent of the mortgage holder for the record owner
enter into the assessment contract which acknowledges that (i) the existing mortgage or
mortgages for which the consent was received will be subordinate to the assessment contract and
the lien created thereby and (ii) the Governmental Unit and its permitted assignees can foreclose
the property if the assessment is not paid.
Maximum Assessment Amount/Lien-to-Value
The aggregate amount that may be financed or refinanced, or interim financed, under one or
more assessment contracts for any property located in the PACE Area must not exceed 25% of
the value of the property as further described below under the caption "Property Valuation" and
in accordance with guidelines set forth in the PACE Handbook.
Useful Life
The term of an assessment shall not exceed the useful life of the PACE Project financed or
refinanced under an assessment contract. For any assessment contract financing or refinancing
multiple improvements or multiple PACE Projects with varying useful lives, the term of an
assessment shall not exceed the longest useful life of any singular improvement or PACE
Project. The expected useful life of each improvement or PACE Project shall be determined by
the PACE Project Administrator based on industry standards and manufacturers' warranties.
Repayment Periods/Maturity
Under the IFA PACE Program, the term of an assessment cannot exceed 40 years. In addition,
pursuant to the Authority Act, the final maturity of any bonds or notes issued by the Authority
cannot exceed 40 years.
Interest Rates
The interest rate or rates that will be charged pursuant to any assessment contract will be
determined by negotiation between a record owner and the PACE Project Administrator. Interest
rates are typically fixed for the term of the assessment contract. There is no prohibition under
the PACE Act or the IFA PACE Program for an assessment contract to provide for a variable
rate of interest.
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Credit Enhancement
Bonds and notes issued by the Authority to fund PACE Projects shall never be general
obligations of the Governmental Unit, the State, or the Authority but shall be secured by the
payments under one or more assessment contracts on the respective, benefited properties located
within the PACE Area and, if applicable, revenue sources or reserves established by the
Authority (at the request of PACE Project Administrators) from proceeds of bonds or notes or
other lawfully available funds. In addition, bonds or notes issued by the Authority may be
secured by municipal bond insurance, letters of credit, or public or private guarantees or sureties
as may be arranged from time to time by a PACE Project Administrator.
]Pliroprami A]ppflcatiomi Process
For any record owner located in the PACE Area to obtain financing or refinancing, or interim
financing, of a PACE Project, the IFA PACE Program requires a property valuation, an executed
terra sheet, in application that has been approved by the Authority, and a Compliance Certificate
from the PACE Project Administrator. The PACE Act further requires an energy audit in certain
circumstances.
Energy Audit
An evaluation of the existing water or energy use and a modeling of expected monetary savings
are required for any proposed energy efficiency improvement, renewable energy improvement,
or water use improvement, unless the water use improvement is undertaken to improve water
quality. Record owners may work with PACE Project Administrators to satisfy this statutory
requirement.
Smart Energy Design Assistance Center, an applied research program at the University of Illinois
at Urbana -Champaign ("SEDAC"), provides technical assistance to help building managers,
owners, and administrators make their facilities more energy efficient. SEDAC's mission is to
decrease the energy footprint of the state of Illinois and beyond. Record owners and PACE
Project Administrators may select SEDAC to complete the evaluation and modeling of their
respective PACE Project. More information is posted on the following website:
Property Valuation
Each record owner must demonstrate the value of the applicable property for any prospective
financing or refinancing, or interim financing, of a PACE Project. Such value may be
determined by the greater of the following:
• the value of the property as determined by the office of the county assessor; or
• the value of the property as estimated in an appraisal report prepared or co-signed by a
general real estate appraiser certified by the State.
Values determined by township assessors, multi -township assessors, county supervisors of
assessments, boards of review, and boards of appeals are not specifically enumerated in the
PACE Act as acceptable for any prospective financing or refinancing, or interim financing, of a
10
PACE Project. Each PACE Project Administrator may establish requirements for an acceptable
appraisal report, including maximum terms of validity, in addition to those set forth above.
Capital Provider Term Sheet
Each record owner must have an executed term sheet with a capital provider. For any
prospective PACE Project that lacks a commitment from a capital provider for financing or
refinancing, record owners are encouraged to visit wNvw.11 Apice.xo���i for a listing of approved
capital providers and their respective contact information.
Autbority Application
Capital providers that have executed a term sheet with a record owner must complete and apply
to the Authority for the proposed financing or refinancing, or interim financing, of the PACE
Project. Application forms are posted on the following website:w.CF pace.com.
The Authority generally processes applications within 10 business days following the submission
of a completed application. Upon approval by the Authority, such application will be deemed
approved by the PACE Area Administrator.
Compliance Certificate
The PACE Project Administrator must undertake the following actions prior to the PACE Area
Administrator submitting an assessment contract and assignment agreement to an Authorized
Officer for execution:
i. make the determination that the property to be assessed is entirely within the PACE Area;
ii. have received evidence of all the enumerated items in Section 25(c) of the PACE Act and
Section 25(d) of the PACE Act; and
iii. execute and deliver to the PACE Area Administrator a Compliance Certificate as to the
matters set forth in clauses (i) and (ii) and a representation and warranty that such PACE
Project Administrator is in compliance with its duties and obligations as a program
administrator of the IFA PACE Program. The Compliance Certificate shall be in
substantially the form attached to the PACE Handbook.
Upon receipt of the PACE Project Administrator's Compliance Certificate, the PACE Area
Administrator will facilitate the execution and delivery of the applicable assessment contract and
related assignment agreement by any one of the Authorized Officers. PACE Project
Administrators are encouraged to provide the Governmental Unit a reasonable amount of time
for such execution and delivery to occur prior to the scheduled closing of any financing or
refinancing, or interim financing, of a PACE Project approved under the IFA PACE Program.
I orms of Assessment C,onlract and Assignment Agreement
Each assessment contract between the Governmental Unit and any record owner located in the
PACE Area will be in substantially the form attached hereto as Appendix. A. Each related
assignment agreement between the Governmental Unit and the Authority assigning the
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assessment contract to the Authority as collateral for any financing or refinancing, and interim
financing, will be in substantially the form attached hereto as A r�cndi B.
The exhibit and schedules included with each assessment contract will reflect the actual terms
and conditions governing that particular financing or refinancing and assessment as agreed
between the record owner and the PACE Project Administrator. The form of the body of the
assessment contract is standardized and will not be subject to change.
Each PACE Project Administrator will record or cause to be recorded each assessment contract
and related assignment agreement with the applicable county clerk or county recorder in which
the applicable property is located as a lien on such property, until the assessment, including any
interest, penalty, and prepayment fee, is paid in full. The lien has the same priority as real estate
property taxes and other special assessment liens.
Pursuant to each standardized assessment contract, each record owner agrees to indemnify,
defend, protect, and hold harmless the participants in the IFA PACE Program, including the
Governmental Unit, from and against all losses, liabilities, claims, damages (including
consequential damages), penalties, fines, forfeitures, costs and expenses (including all out-of-
pocket litigation costs and attorney's fees) and any demands of any nature related directly or
indirectly to, or arising out of or in connection with (i) the record owner's participation in the
IFA PACE Program, (ii) the assessment and the assessment obligations, (iii) the PACE Project,
or (iv) any other fact, circumstance or event related to the subject matter of such assessment
contract, regardless of whether such claims accrue before or after the date of its execution.
Plan of Finance
Execution and delivery of an assessment contract and related assignment agreement by an
Authorized Officer and the satisfaction or waiver of all conditions is required to consummate any
financing or refinancing, or interim financing, of a PACE Project approved under the IFA PACE
Program.
Lora -Terra fin ancin
To fund a PACE Project with long-term financing, the Authority will issue bonds or notes to be
purchased by a capital provider (or its designated transferee(s)).
With limited exceptions, each bond and note financing is structured as a direct purchase by the
capital provider that originated the financing or refinancing of the related PACE Project (or
PACE Projects in the case of pooled financings). Any transfer of bonds or notes is conditioned
upon the receipt by the Authority of an investor letter substantially in the form approved by the
Authority or with such changes thereto as are agreed upon by the Authority.
Record owners or PACE Project Administrator may also arrange for an underwriter or placement
agent to facilitate the public offering or limited public offering of the Authority's bonds or notes
to fund a PACE Project. Such financing structures in the capital markets can add legal costs due
to the additional marketing documents that must be crafted to facilitate the sale of the bonds or
notes to long-term investors.
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Any proceeds of any bond or note issued by the Authority and used by a record owner to fund
the acquisition, construction, installation, or modification of a PACE Project at closing must
comply with the prevailing wage requirements and reporting obligations of the State (just as with
any bond or note otherwise issued by a county or municipality).
Interirn Financing
To fund a PACE Project with interim financing provided by a warehouse fund established by a
capital provider, the Authority will assign the assessment contract to the applicable capital
provider or its transferee as collateral for such interim financing for up to 36 months pursuant to
a Master Warehouse Agreement. Upon re -assignment of the assessment contract, the Authority
will issue bonds or notes to refinance any interim financing that has been provided by such
warehouse fund.
Pursuant to the PACE Act, the Governmental Unit or the Authority may also establish a
warehouse fund to assist record owners with the interim financing of one or more PACE
Projects. Any proceeds of any warehouse fund established by the Governmental Unit or the
Authority and used by a record owner to fund the acquisition, construction, installation, or
modification of a PACE Project at closing must comply with the prevailing wage requirements
and reporting obligations of the State.
Billing and Collecting
Assessments may be included in the regular property tax bills of the county in which a property
is located or the Governmental Unit, the PACE Project Administrator, or third -party servicer
may bill and collect the assessment amount.
Payment received by mail and postmarked on or before any required due date is not delinquent.
From and after the due date of any installment of an assessment, an additional rate of interest of
1 1/2% per month may be imposed with respect to the delinquent amount of such installment,
which shall be payable to the applicable capital provider, PACE Project Administrator, or third -
party servicer as set forth in the applicable bill.
IFA Municipal Choice PACE Program
For assessments imposed by municipalities, it is anticipated that each capital provider or PACE
Project Administrator will directly bill and collect assessments to record owners or indirectly bill
and collect assessments through a third -party servicer to record owners. As a result, capital
providers keep 100% of any default interest and always have the legal option to pursue a default
remedy through either the regular county tax sale process or through an accelerated judicial
foreclosure under the State's Municipal Code.
If an assessment becomes delinquent during any year, the applicable capital provider, PACE
Project Administrator, or third -party servicer shall, on or before the date in such year required by
the county in which the PACE area is located, make a report in writing to the general office of
the county in which the applicable property subject to the assessment is situated and authorized
by the general revenue laws of this State to apply for judgment and sell lands for taxes due the
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county and the State, of the assessments or installments thereof the applicable capital provider,
PACE Project Administrator, or third -party servicer has billed for and not received as required
under the applicable bill, including any interest or penalties that may be due as set forth in the
applicable assessment contract.
Such report shall be certified by the applicable capital provider, PACE Project Administrator, or
third -party servicer and shall include statements that (i) the report contains true and correct list of
delinquent assessments that the capital provider, PACE Project Administrator, or third -party
servicer has not received as required by the applicable bill and (ii) an itemization of the amount
of the delinquent assessment, including interest and penalties, if applicable. The report of the
applicable capital provider, PACE Project Administrator, or third -party servicer, when so made,
shall be prima facie evidence that all requirements of the law in relation to making the report
have been complied with and that the assessments or the matured installments thereof, and the
interest thereon, and the interest accrued on installments not yet matured, mentioned in the
report, are due and unpaid.
Upon proper filing of such report, at the direction of the applicable capital provider, PACE
Project Administrator, or third -party servicer, the PACE Act mandates that the county collector
shall enforce the collection of the assessments in the manner provided by law.
[FA founty Advantage PACE Program
For assessments imposed by counties, please refer to the PACE Handbook for any billing and
collecting preferences as the county collector of the county in which the applicable property is
located may elect to bill and collect assessments with the regular property tax bills of the county.
User Fees
At no time will the PACE Area Administrator be a party to negotiations of any proposed
financing and assessment fees between a record owner and the PACE Project Administrator.
The fees and costs described below, which may be added to the assessment, are anticipated to be
in excess of the closing costs and the costs of issuance of the bonds or notes issued by the
Authority, including, without limitation, bond counsel fees, PACE Project Administrator fees,
capital provider fees, reserves, trustee fees, title insurance fees, capitalized interest, and prepaid
servicing fees.
Governmental Unit
The PACE Ordinance prescribes the fee payable to the Governmental Unit for entering into an
assessment contract with any record owner, payable on or before the closing date of any related
financing or refinancing that has been approved under the IFA PACE Program, unless such fee is
otherwise waived by the Governmental Unit on a case-by-case basis. The applicable PACE
Project Administrator shall be responsible for collecting and remitting such fee to the
Governmental Unit.
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Illinois finance Authority
The PACE Handbook prescribes the fee payable to the Authority for any financing or
refinancing, or interim financing, of a PACE Project.
PACE Area Administrator
The PACE Handbook prescribes the fee payable to the PACE Area Administrator for any
financing or refinancing, or interim financing, of a PACE Project.
As of the date hereof, services of the PACE Area Administrator are free of charge.
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APPENDIX A
Form of Assessment Contract
THIS INSTRUMENT WAS PREPARED BY;
RETURN TO:
(THE ABOVE SPACE FOR RECORDER'S USE ONLY)
[INSERT NAME OF VILLAGE/CITY/COUNTY/TOWN], ILLINOIS
PACE PROGRAM
ASSESSMENT CONTRACT
THIS ASSESSMENT CONTRACT (this "Contract"), dated as of the Effective Date (as
defined below), is by and between the [INSERT NAME], Illinois, a [village/city/county/town]
duly organized and validly existing under the Constitution and the laws of the State of Illinois
(the "Governmental Unit"), and the person or persons as the titleholder or owner of the beneficial
interest set forth on Exiiibit A (the "Record Owner") in the property described on ExIijbit . (the
"Property").
RECITALS
WHEREAS, the Governmental Unit has conducted the proceedings required by Section
15 of the Property Assessed Clean Energy Act, 50 ILCS 50/1 et seq. (the "Act"), and established
a property assessed clean energy program (the "PACE Program") within the jurisdictional
boundaries of the Governmental Unit (the "PACE Area") to allow the financing or refinancing of
certain "energy projects" (as defined in the Act), funded through the sale of bonds, subject to the
Act or alternatively, through the sale of bonds pursuant to subsection (d) of Section 825-65 of the
Illinois Finance Authority Act, 20 ILCS 3501/801-1 et seq. (the "Authority Act") and the Act,
which bonds will be secured through the levy of certain special assessments pursuant to
"assessment contracts" (as defined in the Act) on property (as defined in the Act) benefitted by
such energy projects;
WHEREAS, the Act provides that a "record owner" (as defined in the Act) of property
within the PACE Area may apply to the Governmental Unit or its "program administrator" (as
defined in the Act) to facilitate access to capital to provide funding for an energy project and that
the Governmental Unit may enter into an assessment contract with a record owner of property to
finance or refinance one or more energy projects on the property, which assessment contract
4877-0143-2067.2
provides for the repayment of the financed amount of the cost of an energy project through
assessments on the property benefitted;
WHEREAS, the Property is located in the PACE Area established by the Governmental
Unit as of the last date entered with the signatures of the parties below (the "Effective Date");
WHEREAS, the Record Owner has requested the Governmental Unit enter into this
Contract and the Governmental Unit has verified the information required by Section 25(c) of the
Act as further described herein;
WHEREAS, [INSERT NAME AND CORPORATE DESIGNATION OF PROGRAM
ADMINISTRATOR], is authorized to act as a program administrator (together with any
successors thereto, the "Program Administrator") for the PACE Program as it pertains to this
Contract;
WHEREAS, the Record Owner has completed an application (the "PACE Project
Application") for financing under the PACE Program ("PACE Funding") for the energy project,
including the acquisition, construction, installation, and modification thereof, described
in Exhibit A (the "Project") and has satisfied the PACE Program requirements, including without
limitation, obtaining a written consent from any and all holders of mortgages recorded against
the Property, and the Program Administrator has issued an approval of the Record Owner's
PACE Project Application, all in accordance with the PACE Program guidelines administered
by the Program Administrator with respect to the PACE Program and in effect on the Effective
Date (the "Program Guidelines");
WHEREAS, the Program Administrator and the Record Owner may request that the
Illinois Finance Authority, a body politic and corporate duly organized and validly existing under
and by virtue of the laws of the State of Illinois (the "Authority"), finance or refinance the
Project through the sale of bonds pursuant to subsection (d) of Section 825-65 of the Authority
Act, and if applicable, that a Warehouse Fund (as defined in the Act) provide interim financing
prior to the issuance of bonds by the Authority; and
WHEREAS, pursuant to the Act, the Governmental Unit and the Record Owner desire to
enter into this Contract, pursuant to which the Record Owner will agree to pay the assessment in
order to finance or refinance the Project and the Governmental Unit may agree to assign this
Contract in furtherance of providing financing for the Project.
NOW, THEREFORE, in consideration of the foregoing and the material covenants
hereinafter contained, the Record Owner and the Governmental Unit formally covenant, agree
and bind themselves and their successors and assigns as follows:
AGREEMENT
Section 1. Purpose. The Record Owner and the Governmental Unit are entering into
this Contract for the purpose of financing or refinancing the Project.
Section 2. The Property. This Contract relates to the Property. The Record Owner
has provided to the Governmental Unit sufficient evidence that the Record Owner is the
K
titleholder or owner of the beneficial interest in the Property and possesses all legal authority
necessary to execute this Contract.
Section 3. Assessment Bonds; Installment; Pre a ru,ent; Collection.
(a) The Assessment. The Record Owner hereby freely and willingly agrees that a
special assessment (the "Assessment") in the amount specified in Schedule I (the "Assessment
Amount") shall be levied by the Governmental Unit on the Property pursuant to the Act. The
Assessment Amount includes an amount to pay all or a portion of the costs of (i) the Project,
(ii) the Program Fees (including costs of issuance of Bonds and, if applicable, closing under the
Warehouse Fund), Capital Provider Fees and Other Fees if so specified in Schedule 1, (iii)
capitalized interest on Bonds or, if applicable, the Warehouse Fund, if so specified in S"ched.ul_l,
and (iv) funding any required debt service reserve or other reserve, if so specified in Schedule I.
(collectively, the "Financing Purposes"). The Record Owner acknowledges and agrees that the
Assessment Amount does not exceed the special benefit conferred on the Property by the
Financing Purposes thereon.
(b) Bonds. The Governmental Unit hereby determines that bonds, which may be
serial bonds, term bonds or both, shall be issued (i) by the Governmental Unit pursuant to the
Act or (ii) upon assignment of this Contract to the Authority, by the Authority pursuant to the
Authority Act, all in accordance with the Act (the "Bonds") and shall be secured by the
Assessment to pay the cost of the Financing Purposes, and that, if applicable, interim financing
prior to the issuance of Bonds may be provided through a Warehouse Fund by assignment of this
Contract thereto.
(c) Interest; Assessment Installments. Interest on the Assessment Amount shall begin
to run from the date the Bonds are issued or, if applicable, interim financing from the Warehouse
Fund is issued, and shall be computed at the rate specified in Schedule 1. The payment of the
Assessment shall be in annual installments of the Assessment Amount and the interest thereon
(the "Assessment Installments") as set forth in Schedule I.
(d) Collection. The annual Assessment Installment, plus the Assessment
Administrative Fee (the "Annual Assessment Amount") coming due in any year shall be payable
in the same manner and at the same time and in the same installments as the general taxes on the
Property are payable or as otherwise provided in Schedule I attached hereto, and have the same
priority, become delinquent at the same time and in the same proportionate amounts as the
general taxes on the Property, and bear the penalties and interest after delinquency as set forth in
the Act. The Annual Assessment Amount may be included in the regular property tax bills of the
county in which the Property is located or the Governmental Unit, the Program Administrator or
another third party may bill and collect the Annual Assessment Amount. Property Owner
represents that all mortgagees to the Property have, in advance of the Effective Date, been
provided notice of the imposition of the Assessment and have consented to the Assessment and
Annual Assessment Amount in the amounts described on Schedule I.
(e) Assessment Administrative Fees. In addition to the Assessment Installments, the
Governmental Unit or any Assignee (as defined below) may (or may direct the Program
Administrator or another third party on behalf of the Governmental Unit or any such Assignee,
3
as the case may be, to), in accordance with the Act, add thereto amounts in order to pay for the
costs of collecting the Assessment (including any and all costs of enforcement, including
foreclosure or other remedies for default on the Assessment), the administration of the
Assessment, the administration of the Bonds or the Warehouse Fund, other administrative costs
and any amounts the Record Owner may owe for indemnification as set forth in Section 12
hereto (the "Assessment Administrative Fee"). Schedule I shows the estimated scheduled
Assessment Administrative Fees, however such estimated Assessment Administrative Fees
might increase if the costs of collecting the Assessment or administering the Program increase.
The Record Owner agrees to pay actual scheduled Assessment Administrative Fees, which may
be higher than such estimates, as well as any other Assessment Administrative Fees.
(f) Prepayment of the Assessment. The Assessment Amount may be prepaid, in
whole or in any amount at least equal to the minimum set forth in Schedule 1, at any time upon
the payment of (i) the amount of any delinquent Annual Assessment Amounts, together with any
interest and penalties accrued to the date of prepayment, plus (ii) the whole or, subject to the
minimum amount set forth in Schedule 1, a portion of the unpaid non -delinquent Assessment
Amount (the "Assessment Prepayment Amount"), plus (iii) interest on the Assessment
Prepayment Amount to the redemption date occurring at least [30] days following the date the
prepayment is made, plus (iv) an amount equal to the redemption premium, if any, set forth on
Schedule 1, plus (v) a reasonable fee, if charged by the Governmental Unit or any Assignee or
the Program Administrator or another third party on its behalf, for the cost of administering the
prepayment, if applicable, and the redemption of Bonds, plus (vi) any other due and outstanding
or accrued Assessment Administrative Fees.
(g) No Reduction or Offset. The Record Owner hereby acknowledges and agrees that
the Assessment will not be subject to reduction, offset or credit of any kind in the event that the
Project fails to perform in any way or for any reason.
(h) No Acceleration; Survival. Amounts due under the Assessment will not
accelerate upon a default or late payment or enforcement of remedies under this Contract and the
Assessment, the lien thereof and the obligation to pay Assessment Obligations when they
become due shall survive any such event and continue until paid in full.
Section 4. Record Owner's Representations and Warranties
The Record Owner represents and warrants to the Governmental Unit and each Assignee,
which representations and warranties shall be true and correct as of the Effective Date and at all
times thereafter as follows:
(a) Organization and Authority. The Record Owner, if a legal entity, is duly
organized, validly existing and in good standing in the state of its organization and with authority
to do business under the laws of the State of Illinois. The Record Owner has all necessary power
and authority to own the Property and to conduct its business and enter into the transactions
contemplated hereby. The Record Owner has the right to enter into and perform this Contract,
and the execution, delivery and performance of this Contract and each and every document
specified in the List of Documents contained in Exhibit A executed in connection herewith
(collectively, the "Transaction Documents") have been duly authorized, executed and delivered
0
and constitute valid and binding obligations of the Record Owner, each enforceable in
accordance with its terms, and will not violate any applicable law or result in the creation of a
lien against the Property except as contemplated by this Contract.
(b) Financial Statements. All financial statements delivered to the Governmental
Unit or the Program Administrator are true and correct, have been prepared in accordance with
United States generally accepted accounting principles consistently applied, fairly represent the
financial condition of the Record Owner as of the date thereof, and no material adverse change
has occurred in the financial condition presented therein since such date.
(c) No Litigation. There are no actions, suits or proceedings pending or, to the
knowledge of the Record Owner, threatened, against or affecting it or the Property which could
materially adversely affect the Record Owner, its financial condition, the Property or the
construction of the Project or the Record Owner's ability to satisfy its obligations under this
Contract and any of the Transaction Documents, if applicable except as noted in Schedule If
attached herein.
(d) Title. The Record Owner has good and insurable title to the Property. Except as
set forth on Schedule 11 ("Permitted Liens"), there are no involuntary liens on the Property,
including, but not limited to, construction or mechanics liens, lis pendens or judgments against
the Record Owner, environmental proceedings, or eminent domain proceedings.
(e) Property -Based Debt; Taxes. The Record Owner is not in default, and has
received no notices of default, under any property -based debt that has not been otherwise cured.
The Record Owner is current on all mortgage debt on the Property, has not had an Insolvency
Event in the last two (2) years from the Effective Date, and the Property is not the subject of any
Insolvency Event. There are no delinquent taxes, special assessments, or water or sewer charges
on the Property. There are no delinquent assessments on the Property in a property assessed
clean energy program (including the Program).
(f) Compliance With Laws. The Record Owner has complied with, and will continue
to comply with, all applicable statutes, regulations and ordinances in connection with the
Property and construction of the Project. All permits, consents, approvals and authorizations
required to be issued by any governmental body (collectively, the "Permits") necessary for (a)
the construction of the Project in accordance with the plans and specifications (together, the
"Plans") submitted by the Record Owner; (b) the construction, connection and operation of all
utilities necessary to service the Project; and (c) the construction and use of all roadways,
driveways, curb cuts and other vehicular or other access to and egress from the Project, as shown
on the Plans either (i) have been obtained, are valid, are in full force and effect and have been
complied with by the Record Owner in all respects; or (ii) will be obtained, will be valid, will be
in full force and effect prior to the initiation of construction of the Project, and Record Owner
will be in compliance therewith in all respects prior to any "permitted assignee" (as defined in
the Act), including any bond trustee or "capital provider" (as defined in the Act) to which this
Contract has been assigned (the "Assignee") disbursing any Bond proceeds or interim financing
provided by a Warehouse Fund, if applicable. Construction of the Project in accordance with the
Plans will comply with applicable zoning, use, building or other applicable codes, laws,
regulations, ordinances and Permits and any restrictive covenants affecting the Property.
5
(g) Approval of Plans and Budgets. Any Plans submitted will be a true and accurate
reflection of the Project (when completed) and have been approved as required by all
governmental bodies or agencies having jurisdiction over the Project or will be approved prior to
the first disbursement request. The budget for construction of the Project (the "Budget") is an
accurate current budget of all costs necessary to construct the Project in accordance with the
Plans and is attached to the construction contract(s) to which the Record Owner is a party and
described on C xhibit A pertaining to the construction and installation of the Project (the
"Construction Contract"). The cost of construction of the Project is not expected to exceed the
cost therefor set forth in the Budget. The Record Owner is responsible for any costs in excess of
the Budget.
(h) Contractors. All work requiring a license under any applicable law to acquire,
construct, install, or modify the Project has been and will be performed by licensed contractors
that have agreed to adhere to the Governmental Unit's or the Program Administrator's terms and
conditions. All such contractors have signed a written acknowledgment that the Governmental
Unit or its Program Administrator will not authorize final payment to such contractor until the
Governmental Unit or the Program Administrator has received written confirmation from the
Record Owner that the Project was properly acquired, constructed, installed or modified and is
operating as intended.
(i) Mortgage Holder Consent. The Record Owner represents and warrants that the
Record Owner has (i) disclosed to the Governmental Unit or the Program Administrator, the
identities of all persons, if any, that hold mortgage liens against the Property (whether recorded
or unrecorded) that may be affected by the Assessment; (ii) has obtained and delivered to the
Governmental Unit or the Program Administrator the written consent of all such persons to the
Assessment, which consent complies with the requirements of the Act; and (iii) to the Record
Owner's knowledge, no such consent has been withdrawn or revoked.
0) Insurance. The Record Owner has provided to the Governmental Unit or the
Program Administrator satisfactory evidence of current insurance policies on the Property. Such
policies shall meet the specifications set forth in accordance with the Program Guidelines but,
notwithstanding such specifications, to the extent Bonds are issued under the Authority Act, the
Authority and any Bond Trustee, and, to the extent any interim financing is provided, any
Warehouse Fund shall be named as an additional insured (mortgagee/loss payee) on all insurance
policies required hereunder.
(k) PACE Project Application. All representations, warranties, statements, exhibits,
instruments and other documents contained in or included as a part of the PACE Project
Application are true, correct and complete as of the Effective Date. The Project constitutes an
"energy project" and the Property constitutes "property" as each term is defined in the Act.
(1) No Impairment. No fraud, error, omission, misrepresentation, negligence or
similar occurrence with respect to the Property, Plans, Budget, Construction Contract or Project
has taken place on the part of the Record Owner or any other person, including, without
limitation, any appraiser, title company, closing or settlement agent, realtor, builder or developer
or any other party involved in the Property, Plans, Budget, Construction Contract or Project, that
would impair in any way the rights of the Governmental Unit, any Assignee or any Warehouse
Cel
Fund in the Property, Plans, Budget, Construction Contract or Project or that violated applicable
law.
(m) Environmental Matters. Except as shown on Schedule III attached hereto (the
"Environmental Schedule"), there are no underground storage tanks located on the Property;
there is no past or present non-compliance with environmental laws, or with permits issued
pursuant thereto, in connection with the Property (which has not been fully remediated in
accordance with environmental laws); there is no environmental remediation required (or
anticipated to be required) with respect to the Property; and Record Owner does not know of,
and has not received, any written or oral notice or other communication from any person
(including but not limited to a governmental entity) relating to hazardous substances or
remediation thereof, of possible liability of any person pursuant to any environmental law, other
environmental conditions in connection with the Property, or any actual or potential
administrative or judicial proceedings in connection with the foregoing.
(n) Property Value. The aggregate amount to be financed or refinanced hereunder
and any other assessment contract related to the Property does not exceed 25% in relation to the
greater of (i) the value of the Property as determined by the office of the applicable county
assessor; or (ii) the value of the Property as determined by an appraisal conducted by a licensed
appraiser.
Section 5. Record Owner Covenants
The Record Owner hereby covenants and agrees as follows:
(a) Maintenance of Property. The Record Owner shall, at all times, maintain the
Property and, after construction, the Project. The Record Owner shall pay when due all taxes,
assessments (including the Assessment), water charges, sewer charges and all other charges
levied on or against the Property, and upon written request, submit to the Governmental Unit or
any Assignee or any third party acting on their behalf official receipts evidencing such payments.
(b) Construction Start and Completion. The Record Owner shall commence
construction of the Project and shall diligently proceed with construction of the Project in
accordance with the approved Plans and Budget and in a good, substantial and workmanlike
manner in accordance with the Construction Contract and all applicable laws, ordinances, codes,
rules and regulations. [Construction of the Project shall be completed on or prior to the Outside
Completion Date as defined in Exhibit A]*.
(c) Protection Against Liens. Except for any Permitted Liens, the Record Owner
shall promptly pay and discharge all claims for labor performed and material and services
furnished in connection with construction of the Project, and take all other steps necessary to
prevent the assertion of claims or liens either against the Property or the Project, other than (i)
the claims and lien provided herein, (ii) liens, if any, for taxes imposed by any governmental
authority not yet due or delinquent, and (iii) such other title and survey exceptions as the
Drafting Note: The bracketed language can be removed for refinancings of completed Projects, or to the extent an
Outside Completion Date is not required by a capital provider.
7
Governmental Unit (or its Assignee, as applicable) or any Assignee or any third party acting on
their behalf has approved or may approve in writing in its sole discretion.
(d) Periodic Reports/Certifications. Upon request by the Governmental Unit or any
Assignee or any third party acting on their behalf during the period construction of the Project
begins on the Property until the Project has been accepted as completed pursuant to the terms of
the Construction Contract, the Record Owner shall provide to the Governmental Unit or any
Assignee or any third party acting on their behalf a written statement, certified as true, correct
and complete, setting forth the status of the Project, including an updated schedule for
completion of construction of the Project. Such certification shall be in such form and with such
detail as the Governmental Unit or any Assignee or any third party acting on their behalf shall
specify and may be included in completion certificate(s) as set forth in the Program Guidelines.
(e) Notice of Claims; Adverse Matters. The Record Owner shall promptly notify the
Governmental Unit or any Assignee or any third party acting on their behalf in writing of any
potential Insolvency Event and all pending or threatened litigation or other matters that may
materially and adversely affect the Property or Record Owner's ability to meet its obligations
under the Transaction Documents or otherwise with respect to the Financing Purposes.
"Insolvency Event" shall mean the Record Owner has (i) consented to the appointment of a
conservator or receiver or liquidator in any insolvency, bankruptcy, readjustment of debt,
marshalling of assets and liabilities or similar proceeding relating to the Record Owner or
relating to all or substantially all of such Record Owner's property, (ii) failed to pay its debts as
they become due and such failure has not been cured within thirty (30) days of the event; (iii)
admitted in writing its inability to pay its debts as they become due, (iv) filed a petition to take
advantage of any applicable insolvency or reorganization statute, (v) made an assignment for the
benefit of its creditors, (vi) filed against it a petition for involuntary bankruptcy or some other
involuntary insolvency proceeding which is not dismissed within thirty (30) days, or (vii)
voluntarily suspended payment of its obligations.
(f) Waiver and Release of Claims Against Governmental Unit, the Program
Administrator, the Authority and Related Parties. For and in consideration of the Governmental
Unit's execution and delivery of this Contract and the Authority and, if applicable, the
Warehouse Fund providing capital to finance the Project, Record Owner (for itself and for any
successor -in -interest to the Property and for anyone claiming by, through or under Record
Owner, including without limitation, heirs, personal representatives, mortgagees and transferees),
hereby waive the right to recover from the Governmental Unit, the Authority, the Warehouse
Fund, any other Assignee, the Program Administrator and another third party acting on behalf of
the Governmental Unit, the Authority, the Warehouse Fund and any other Assignee, any owner
of the Bonds, any bond trustee, any placement agent and any and all members, officers, officials,
agents, employees, attorneys and representatives of any of them, as well as their successors and
assigns (collectively, the "Financing Parties"), and fully and irrevocably release the Financing
Parties from, any and all claims, obligations, liabilities, causes of action, set -offs or damages
(including attorneys' fees and court costs), that Record Owner may now have or hereafter
acquire against any of the Financing Parties and accruing from or related to (i) this Contract, (ii)
the disbursement of Bond proceeds or interim financing provided by a Warehouse Fund, if
applicable, (iii) the levy and collection of the Assessment, (iv) the imposition of the lien of the
Assessment, (v) the performance of the Project, (vi) the Project, (vii) any damage to or
diminution in value of the Property that may result from construction or installation of the
Project, (viii) any injury or death that may result from the construction or installation of the
Project, (ix) the selection of manufacturer(s), dealer(s), supplier(s), contractor(s) and/or
installer(s), and their action or inaction with respect to the Project, (x) the merchantability and
fitness for any particular purpose, use or application of the Project, (xi) the amount of energy
savings, energy production, water conservation or other performance outcomes resulting from
the Project or any assured performance guaranty, (xii) the workmanship of any third parties
under any agreements including, without limitation, any Construction Contract, and (xiii) any
other matter with respect to the PACE Program (collectively, the "Liabilities").
This release includes claims, obligations, liabilities, causes of action and damages of
which the Record Owner is not presently aware or which the Record Owner does not suspect to
exist which, if known by the Record Owner, would materially affect Record Owner's release of
the Financing Parties. Notwithstanding the foregoing, Record Owner's releases under this
Section shall not extend to Liabilities arising from any Financing Parties willful misconduct.
The Record Owner acknowledges that the Financing Parties established the PACE Program
solely for the purpose of facilitating financing of energy projects arranged by owners of
commercial property located in the PACE Area. The Financing Parties are not responsible for
the selection, management and/or supervision of the Project, the Project's performance, the
Construction Contracts or any assumed performance guaranty. Any issues related to
performance of the Project should be discussed with chosen contractors, installers, manufacturers
and/or distributors involved with the Project. The waivers and releases by Record Owner
contained in this Section shall survive the disbursement of any Bond proceeds, interim financing
provided by a Warehouse Fund, if applicable, or any portion thereof, the transfer or sale of the
Property by Record Owner and the termination of this Contract.
Notwithstanding the foregoing or anything to the contrary contained in this Contract, the
waiver and release provided for in this Section shall not bar the Record Owner, its successors -in -
interest to the Property, from bringing an equitable action against the Governmental Unit for
specific performance of its duties and obligations under this Contract, or to enjoin or prevent the
violation of this Contract thereby, it being understood and agreed, however, that the Financing
Parties shall not be liable for money damages or costs of such equitable proceeding except
insofar and to the extent such Liabilities arise from their willful misconduct.
(g) Energy Assessment.
(i) To the extent the Project consists of an energy efficiency improvement,
renewable energy improvement or water use improvement (each as defined in the Act,
and except for a water use improvement that is undertaken for water quality), the Record
Owner must obtain an assessment and analysis of the energy and/or water conservation
impacts for the Project, as applicable (an "Energy Assessment"). The Energy Assessment
must assess the existing water and/or energy use of relevant systems, or code baseline
usage in the case of new construction and include a modeling of expected monetary
savings to be achieved by the Project. To implement this provision, the Record Owner
shall obtain an Energy Assessment from a qualified provider approved by the Program
Administrator. The cost of the Energy Assessment, as well as the cost of any other third -
z
party review of the Energy Assessment, may be included in the Assessment Amount
(defined in Schedule ).
(ii) Upon completion of the Project, the Record Owner shall submit a post -
construction report to the Governmental Unit or the Program Administrator in a form
provided by the Program Administrator. This report shall contain:
(1) A statement that Project has been completed in accordance
with the Plans and the Transaction Documents, and that the systems are
performing as expected; and
(2) Identification and discussion of any substitutions,
compromises, or variances between the final Plans and Transaction
Documents with the as -built conditions of the Project.
(h) Property Transfers. The Record Owner covenants that it will provide the
Governmental Unit, any Assignee, the Program Administrator and the capital provider notice of
any sale or transfer of interest to fee title in the Property after the Effective Date concurrently
with such transfer or sale, and no later than three (3) business days thereafter.
Section 6. Lien; Foreclosure.
(a) Lien. The Assessment, in the amount of the Assessment Amount, the interest
thereon, the Assessment Administrative Fees, any other amounts due and payable by the Record
Owner under this Contract and the Act, and any interest and penalties allowable on any past -due
amounts thereof and any indemnification and reimbursement obligations (collectively, the
"Assessment Obligations"), shall constitute a lien against the Property until it is paid, which lien
shall be coequal to and independent of the lien for general taxes.
(b) Foreclosure. The Record Owner acknowledges and agrees that if any portion of
the Assessment Obligations is not paid when due, the Governmental Unit shall have all rights
and remedies for such non-payment as it does with respect to delinquent property taxes and other
delinquent special assessments as set forth in Article 9 of the Illinois Municipal Code, including
the lien, sale, and foreclosure remedies described in that Article ("Enforcement Remedy"). Any
Assignee shall have and possess the delegable powers and rights at law or in equity as the
Governmental Unit would have with respect to an Enforcement Remedy with regard to (i) the
precedence and priority of liens evidenced by this Contract, (ii) the accrual of interest, and (iii)
the fees and expenses of collection, and shall have the right to enforce such liens through an
Enforcement Remedy. The Record Owner acknowledges that the Assignee may obligate itself,
through a covenant with the owners of the Bonds, to exercise an Enforcement Remedy with
respect to enforcement of delinquent Assessment Obligations under circumstances specified in
such covenant.
Section 7. Financing or Refinancing, , of the Pro"ect. The parties hereby agree that
the net proceeds of the Bonds or interim financing provided by a Warehouse Fund, if applicable,
allocable to the Assessment shall be used to finance or refinance the Project.
T
Section 8. Term• Contract Runs with the Land; Division.
(a) Except as otherwise set forth in this Contract, this Contract shall expire upon the
final payment or prepayment of the Assessment.
(b) This Contract establishes rights and obligations that are for the benefit of the
Property and, therefore, such rights and obligations run with the land.
(c) The obligation to pay the Assessment Obligations is an obligation of the Property
and no agreement or action of the Record Owner shall be competent to impair in any way the
rights of the Governmental Unit or the Program Administrator or the rights of any Assignee,
including, but not limited to, the right to pursue judicial foreclosure of the Assessment lien or the
right to enforce the collection of the Assessment Obligations or any installment thereof against
the Property.
(d) In the event the Property is divided while the Assessment remains unpaid, the
unpaid installments of the Assessment Obligations shall be segregated and apportioned by the
Governmental Unit or the Assignee or the Program Administrator or a third party acting on its
behalf in accordance with a method selected by it in its good faith judgment.
Section 9. Recordation of Documents. The Governmental Unit or the Assignee or
the Program Administrator or other third party acting on its behalf shall record or cause to be
recorded in the office of the County Recorder this Contract and any other documents required by
applicable law or any Assignee to be recorded.
Section 10. Notice. The Record Owner shall provide written notice to any subsequent
purchaser of the Property, or a portion thereof, of the obligation to pay the Assessment.
Section 11. Waivers Acknowledgment and Contract.
(a) Since the Assessment is voluntary and imposed, in accordance with the Act,
pursuant to this Contract, the Record Owner hereby waives any requirements otherwise
applicable to special assessments under any other provision of Illinois law, for notice or public
hearing.
(b) The Record Owner hereby waives its right to appeal or contest the Assessment or
to file any lawsuit or other proceeding to challenge the Assessment or any aspect of the
proceedings of the Governmental Unit undertaken in connection with the PACE Program. The
Record Owner hereby agrees that the Record Owner and its successors in interest to fee title in
the Property shall be solely responsible for the installation, operation and maintenance of the
Project. The Record Owner hereby acknowledges that the Record Owner and its successors in
interest to fee title in the Property will be responsible for payment of the Assessment regardless
of whether the Project is properly installed, operated, maintained or performs as expected.
(c) The Record Owner hereby agrees that the Governmental Unit is entering into this
Contract solely for the purpose of assisting the Record Owner with the financing or refinancing
of the Project, and that neither the Governmental Unit, any Assignee, the Program Administrator
nor any third party acting on its behalf has any responsibility of any kind for, and shall have no
11
liability arising out of, the installation, operation, financing, refinancing, maintenance or
performance of the Project. The Record Owner hereby certifies to the Governmental Unit that
the Governmental Unit has complied with the provisions of Section 25 of the Act. The Record
Owner hereby waives the right to recover from and fully and irrevocably releases the Financing
Parties from any and all losses, liabilities, claims, damages (including consequential damages),
penalties, fines, forfeitures, costs and expenses (including all reasonable out-of-pocket litigation
costs and reasonable attorney's fees), relating to the subject matter of this Contract that the
Record Owner may now have or hereafter acquire against the Financing Parties.
Section 12. Indemnification.
(a) The Record Owner agrees to indemnify, defend, protect, and hold harmless the
Financing Parties from and against all losses, Liabilities, claims, damages (including
consequential damages), penalties, fines, forfeitures, costs and expenses (including all out-of-
pocket litigation costs and attorney's fees) and any demands of any nature (collectively
"Claims") related directly or indirectly to, or arising out of or in connection with (i) the Record
Owner's participation in the PACE Program, (ii) the Assessment and the Assessment
Obligations, (iii) the Project, or (iv) any other fact, circumstance or event related to the subject
matter of this Contract, regardless of whether such Claims accrue before or after the Effective
Date.
(b) The provisions of this Section shall survive the termination of this Contract and
payment in full of the Assessment Obligations.
Section 13. 'Right to Inspect .Property. The Record Owner hereby grants the
Governmental Unit or any Assignee, the Program Administrator or any third party acting on its
behalf, or any owner of the Bonds or any third party acting on its behalf, and their respective
agents and representatives the right to enter at any reasonable time, upon reasonable notice, to
inspect the Project. The Record Owner further hereby grants such persons the right to examine
and copy any documentation relating to the Project.
Section 14. PACE Project Application. The Record Owner hereby represents and
warrants to the Governmental Unit, each Assignee and the Program Administrator, that the
information set forth in the PACE Project Application submitted to the Governmental Unit or the
Program Administrator in connection with its request for PACE Funding is true and correct as of
the Effective Date, and that the representations set forth in the PACE Project Application with
respect to the Property and the Record Owner are true and correct as of the Effective Date as if
made on the Effective Date.
Section 15. Amendment. This Contract may be modified or amended only by the
written agreement of the Governmental Unit (or its Assignee, as applicable) and the Record
Owner and the consent of the Assignee, if any.
Section 16. Bindin Effect; Assignment. This Contract inures to the benefit of and is
binding upon the Governmental Unit and the Record Owner and its respective successors and
assigns. The Governmental Unit has the right to assign any or all of its rights and obligations
under this Contract without the consent of the Record Owner. Each of the Authority (either
12
directly or via an intermediate assignment), any bond trustee (either directly or via an
intermediate assignment), the Warehouse Fund or any other Assignee shall be a "permitted
assignee" (as defined in the Act) for any purpose hereunder.
Section 17. Exhibits. Exhibit A, Schedule 1, S chedule lel and Schedule III attached to
this Contract are incorporated into this Contract by this reference as if set forth in their entirety in
this Contract.
Section 18. Severability. If any provision of this Contract is held invalid or
unenforceable by any court of competent jurisdiction, such holding will not invalidate or render
unenforceable any other provision of this Contract.
Section 19. Corrective Instruments. The Governmental Unit (or its Assignee, as
applicable) and the Record Owner, with the consent of the Assignee, if any, shall, from time to
time, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered,
such supplements hereto and such further instruments as may reasonably be required in order to
carry out the expressed intention of this Contract; provided, however, the prior written consent of
the Authority shall be obtained in connection with any such amendment or supplement if Bonds
are issued through the Authority, pursuant to subsection (d) of Section 825-65 of the Authority
Act; provided, further, however, if applicable, the prior written consent of the Warehouse Fund
shall be obtained in connection with any such amendment or supplement if funding by the
Warehouse Fund is outstanding.
Section 20. Governing Law: Venue. This Contract shall be construed in accordance
with and governed by the laws of the State of Illinois applicable to contracts made and performed
in the State of Illinois. This Contract shall be enforceable in the State of Illinois, and any action
arising hereunder shall (unless waived by the Governmental Unit in writing) be filed and
maintained in the Circuit Court of [INSERT GOVERNMENTAL UNIT'S PREFERRED
COUNTY] County; provided, however, that if Bonds are issued through the Authority, such
action shall be filed and maintained in the Circuit Court of Cook County; provided, however,
that actions to foreclose delinquent installments of the Assessment shall be filed and maintained
in the Circuit Court of the County identified in Exhibit A.
Section 21. Counterparts. This Contract may be executed in several counterparts,
each of which is an original and all of which constitutes one and the same instrument.
Section 22. Electronic Signatures.
(a) The parties hereto acknowledge and agree that this Contract may be executed by
one or more electronic means ("Electronic Signatures"). Each party hereto agrees that Electronic
Signatures provided by such party shall constitute effective execution and delivery of this
Contract by such party to all other parties to or relying on this Contract. Each party hereto
agrees that Electronic Signatures shall constitute complete and satisfactory evidence of the intent
of such party to be bound by those signatures and by the terms and conditions of this Contract as
signed. Each party hereto agrees that Electronic Signatures shall be deemed to be original
signatures for all purposes.
13
(b) Each party hereto agrees to accept Electronic Signatures provided by any and all
other parties to this Contract as (i) full and sufficient intent by such parties to be bound
hereunder, (ii) effective execution and delivery of this Contract, and (iii) constituting this
Contract an original for all purposes, without the necessity for any manually signed copies to be
provided, maintained or to exist for back up or for any other purpose.
(c) If Electronic Signatures are used to execute this Contract, each party hereto
hereby accepts the terms of, and intends and does sign, this Contract by its Electronic Signature
hereto.
Section 23. Transaction Documents.
(a) The Record Owner acknowledges and agrees that the entire agreement between
Record Owner and the Governmental Unit includes the Transaction Documents.
(b) By executing this Contract, the Record Owner acknowledges and agrees that:
(i) The Record Owner has had sufficient time to review and has reviewed each
of the Transaction Documents and has had the opportunity to ask any questions of the
Governmental Unit, the Program Administrator, or the Assignee that Record Owner may
have regarding such Transaction Documents;
(ii) The Record Owner acknowledges receipt of and has reviewed, understands
and agrees to each and every additional requirement and term contained in the Program
Guidelines; and
(iii) The Record Owner has reviewed, understands, agrees to and affirms each
and every representation and warranty contained in the Record Owner's PACE
Application and the Program Guidelines.
Section 24. Execution and Return of Contract. The Record Owner must execute and
return this Contract to the Governmental Unit or the Program Administrator at the address set
forth in the "Notice Information" section of Exhibit A so that it is received by the Governmental
Unit or the Program Administrator not later than the expiration date set forth on Exhibit A. If the
Record Owner fails to return this Contract so executed to the Governmental Unit or the Program
Administrator by the expiration date, the Governmental Unit reserves the right to require the
Record Owner to enter into a new Contract. The signature of each person signing as or on behalf
of the Record Owner must be notarized by a duly licensed notary unless executed by Electronic
Signatures.
[Signature Pages Follow]
14
IN WITNESS WHEREOF, the Governmental Unit and the Record Owner have caused
this Contract to be executed in their respective names by their duly authorized representatives, all
as of the Effective Date.
Record Owner:
[INSERT FORMAL NAME OF RECORD OWNER]
By:
Name:
Title:
STATE OF )
COUNTY OF
I, , a notary public in and for said County, in the State
aforesaid, DO HEREBY CERTIFY THAT m the
of _ , a personally known to me to be the
same person whose name is subscribed to the foregoing instrument as such ro
appeared before me this day in person and acknowledged that signed and delivered the said
instrument, pursuant to authority given by said , as a. own free and
voluntary act, and as the free and voluntary act of the municipal corporation for the uses and
purposes therein set forth.
GIVEN under my hand and notarial seal as of
My Commission Expires: (SEAL)
15
Notary Public
IN WITNESS WHEREOF, the Governmental Unit and the Record Owner have caused
this Contract to be executed in their respective names by their duly authorized representatives, all
as of the Effective Date.
Governmental Unit: Authorized
Signatory
Name (Please Print)
Signature
STATE OF ILLINOIS)
COUNTY OF COOK )
Date of Execution
I, , a notary public in and for said County, in the State
aforesaid, DO HEREBY CERTIFY THAT „ the
of the Governmental Unit, a [village/city/county/town] duly organized and validly
existing under the Constitution and the laws of the State of Illinois, personally known to me to be
the same person whose name is subscribed to the foregoing instrument as such
appeared before me this day in person and acknowledged that signed and delivered the said
instrument, pursuant to authority given by said municipal corporation, as own free and
voluntary act, and as the free and voluntary act of the municipal corporation for the uses and
purposes therein set forth.
GIVEN under my hand and notarial seal as of
My Commission Expires: (SEAL)
16
Notary Public
EXHIBIT A
RECORD OWNER, DESCRIPTION OF PROPERTY, DESCRIPTION OF PROJECT,
TRANSACTION DOCUMENTS, OUTSIDE COMPLETION DATE, IDENTIFICATION
OF CIRCUIT COURT, NOTICE INFORMATION AND EXPIRATION DATE
Record Owner: [INSERT FORMAL NAME OF RECORD OWNER]
Description of Pro ert :
[INSERT COMMON PROPERTY STREET ADDRESS]
PINS: [TO BE COMPLETED]
County: [INSERT COUNTY IN WHICH PROPERTY IS LOCATED]
Description,, of Project:
The Project consists of the following (check all that apply):
Energy Efficiency Improvement
Water Use Improvement
Resiliency Improvement
Transaction Documents:
[To be Completed]
Outside Completion Date: [To be inserted]
Identification of Circuit Court for Foreclosure Actions:
Expiration Bate: []
Notice Information:
If to PACK Prorarrt:
A-1
Alternative Energy Improvement
Renewable Energy Improvement
With a copyto
If to Record Owner:
Wil- r -t c; -y Loa
A-2
.Legal Description:
[INSERT FORMAL PROPERTY LEGAL DESCRIPTION]
A-3
SCHEDULEI
TERMS OF ASSESSMENT AND SCHEDULE OF ANNUAL ASSESSMENT AMOUNTS,
INCLUDING PRINCIPAL, INTEREST AND ESTIMATED ASSESSMENT
ADMINISTRATIVE FEES
Terms of the Assessment
Closing Date: [ ]
Redemption Dates: [June 1 and December 1]
Interest Rate: �]
Term: [_]
Prepayment: The Assessment may be prepaid, in whole or in part, as described in Section 3(f)
of this Contract and as set forth below:
(i) In the event the Project is completed and the full amount of the Assessment
was not utilized to complete the Project such that there are excess proceeds on deposit
with respect to the Project remaining after such completion of the Project, then, such
excess funds shall be applied as a prepayment of the Assessment and, if applicable, the
Bonds shall be redeemed in accordance with the applicable Bond documents. Such
prepayment shall not reduce the amount of the Annual Assessment Installments as set
forth in Schedule I attached hereto except for the last Annual Assessment Installments to
the extent necessary to reflect the application of such prepayment to such last
installments. Notwithstanding anything to the contrary contained in this Contract or any
of the exhibits or schedules to this Contract, the payment of such excess funds as
provided in the first sentence of this clause (i) shall not be subject to any of the
requirements of Section 3(f) of this Contract, and it shall not be required that any such
payment be made on any particular date, any such payment be subject to a minimum
amount or the Minimum Prepayment Amount, or that there be any Redemption Premium
paid in connection therewith, as a result thereof or as a condition thereto.
(ii) In the event the Record Owner makes a Prepayment of the Assessment and
the Property constitutes more than one parcel (i.e., more than one PINs), the Program
Administrator in consultation with the Governmental Unit shall have the right to apply
the Assessment Prepayment Amount to one or more of such parcels as determined by the
Program Administrator and the Governmental Unit in their sole and absolute discretion
such that the Assessment Amount with respect to the parcel or parcels to which the
Program Administrator in consultation with the Governmental Unit applies the
Assessment Prepayment Amount shall be reduced by the portion of the Assessment
Prepayment Amount applied to such parcel or parcels.
Minimum Prepayment Amount: $[ ]
RedemptionTerms:
S-1
1L4 fad Dale ....... � r�r�rrrr .....
The Assessment
Annual Assessment Amount: The "Annual Assessment Amount" is the Assessment
Installment and Assessment Administrative Fees collectible under this Contract in a given
calendar year, and as estimated pursuant to the Schedule of Annual Assessment Amounts below.
Assessment Administrative Fees: The "Assessment Administrative Fees" means, as set forth
in Section 3(e) of this Contract, all amounts necessary in order to pay for the costs of collecting
the Assessment (including any and all costs of enforcement, including foreclosure or other
remedies for default on the Assessment), the administration of the Assessment, the
administration of the Bonds or the Warehouse Fund, other administrative costs and any amounts
the Record Owner may owe for indemnification as set forth in Section 12 hereto.
Assessment Amount: The initial amount of the Assessment (the "Assessment Amount") that is
the total of all costs, fees, and expenses eligible for financing, as set forth in the chart below and
described as follows: the cost of the Project ("Project Cost"), including the cost of materials and
labor necessary for installation, permit fees, inspection fees, and other eligible costs, fees and
expenses related to the acquisition, construction, installation, or modification of the Project;
program administrative fees ("Program Fees), including the costs and fees of the Program or
other fees that may be charged to the Record Owner in connection with the application for PACE
Funding, the execution of this Contract, the costs of issuance of Bonds by the Governmental Unit
or the Authority and the provision of interim financing by the Warehouse Fund; other third -party
fees, costs, and expenses ("Other Fees") that may be incurred by or charged to the Record Owner
in connection with the execution of this Contract, the issuance of Bonds and the provision of
interim financing, including property specific legal reviews and recording fees; prepaid interest
that is capitalized ("Capitalized Interest"); a debt service reserve, if required ("Debt Service
Reserve"); and any fees charged by any capital provider purchasing the Bonds upon issuance and
Warehouse Fund ("Capital Provider Fees).
Project Cost
[ ]
Program Fees
Other Fees
[�
Capitalized Interest
Debt Service Reserve (if required)
[
Capital Provider Fees
$t ]
Assessment Amount
[The Assessment shall be allocated among the PINs in the [years and] amounts as set forth
S-2
below][in an amendment to this Schedule I which shall be executed when the Bonds are issued
or interim financing is provided].12 Record Owner consents and agrees to the allocation of the
Assessment as set forth below and further agrees that Record Owner shall not have the right to
subdivide any parcels of the Property, whether identified by PIN herein or otherwise, without
first either (a) prepaying the Assessment in full in accordance with the terms of this Contract, or
(b) obtaining the prior written consent of the owners of the Bonds or the Warehouse Fund, as the
case may be, which consent may be withheld in their sole and absolute discretion.
Assessment Installment: Each "Assessment Installment" is the annual amount of the
Assessment Amount and the interest thereon due under this Contract as further set forth in the
Schedule of Annual Assessment Amounts below.
Assessment Obligations: The "Assessment Obligations" include the Assessment Amount, any
Assessment Administrative Fees, all Assessment Installments, any interest and penalties
allowable on due but unpaid Annual Assessment Amounts, and any other amounts due and
payable by the Record Owner under this Contract.
Schedule of Annual Assessment Amounts: The anticipated schedule of Annual Assessment
Amounts due under this Contract is set forth below.
2 Drafting Note: This bracketed language, or a variation thereof, should be used for Properties comprised of more
than one tax parcel or PIN, and should be deleted for Properties comprised of only one tax parcel.
S-3
*Subject to change as set forth in Section 3(e) of this Contract.
3 Drafting Note: This table should be repeated for multi -PIN or tax parcel properties. It may be removed for single -
Pin or tax parcel properties.
S-4
SCHEDULE II
DISCLOSURES AND EXCEPTIONS; PERMITTED LIENS
[TO BE COMPLETED BY RECORD OWNER, IF ANY]
S-5
SCHEDULE III
ENVIRONMENTAL SCHEDULE
[ __ _ � OMPLETED BY RECORD OWNER, IF ANY]
TO BEC _ ���. � ... .....� .... .... .... �.. � .... ......
S-6
APPENDIX B
Form of Assignment Agreement
(THE ABOVE SPACE FOR RECORDER'S USE
ONLY)
ASSIGNMENT AGREEMENT
This ASSIGNMENT AGREEMENT (this "IFA Assignment") is made and entered into
effective as of [INSERT DATE], 20[_] (the "Effective Date"), by and between [INSERT
NAME OF GOVERNMENTAL UNIT], a [village/city/county/town] duly organized and validly
existing under the Constitution and the laws of the State of Illinois (the "Governmental Unit")
and the ILLINOIS FINANCE AUTHORITY, a body politic and corporate created and existing
under and by virtue of the laws of the State of Illinois (along with its successors and assigns, the
"Authority," and, together with the Governmental Unit, each a "Party" and collectively the
"Parties").
RECITALS
WHEREAS, [Insert Name of Property Owner], a [Insert Corporate Designation] (the
"Property Owner") is the owner of certain real property located at [Insert Street Address of
Property] ("Property").
WHEREAS, the Property Owner has applied to the Governmental Unit for assistance in
financing or refinancing a certain "energy project" (as defined in the Property Assessed Clean
Energy Act, 50 ILCS 50/1 et seq., as amended (the "PACE Act")) at the Property (the "Project").
WHEREAS, [INSERT NAME OF PROGRAM ADMINISTRATOR], a [INSERT COR-
PORATE DESIIGNATION], is authorized to act as a program administrator (together with any
successors thereto, the "Program Administrator") to administer its property assessed clean ener-
gy program (the "PACE Program") within its jurisdictional boundaries (the "PACE Area").
WHEREAS, to finance or refinance the Project, the Governmental Unit and the Property
Owner have entered into that certain Assessment Contract dated as of [INSERT DATE], 20[_]
("PACE Contract") pursuant to which, inter alia, (i) the Governmental Unit, through the Pro-
gram Administrator, has agreed to arrange financing for the Project through the issuance of
bonds, (ii) the Property Owner has agreed to repay such financing by consenting to the imposi-
tion of an annual assessment on the Property payable in installments ("Assessment Install-
ments"), and has agreed to pay certain administrative expenses ("Assessment Administrative
Fees"), (iii) the Property Owner has consented to the assignment of the PACE Contract to secure
any bonds issued to finance the Project, and (iv) the Governmental Unit has agreed to impose
such assessment and to direct that the Assessment Installments be paid directly to the Govern-
mental Unit or its designee.
WHEREAS, the Governmental Unit and the Property Owner have requested that the Au-
thority provide financing for the Project, and the Authority has agreed to provide such financing
by issuing revenue bonds secured by the PACE Contract (the "Bonds") pursuant to a Master In-
denture (the "Indenture") dated as of [ _ _] among the Authority, [INSERT NAME
OF BANK], as trustee (the "Trustee") and [INSERT NAME OF CAPITAL PROVIDER] (the
"Capital Provider") and lend the proceeds of such Bonds to the Property Owner in one or more
advances to pay, or to reimburse the Property Owner for payment of, the costs of the Project,
subject to the terms and conditions contained in the PACE Contract and the Indenture, and as
authorized pursuant to [Resolution ], (the "PACE Bond Resolution") of the Au-
thority authorizing the sale of Bonds to the Capital Provider or its Designated Transferee as de-
fined in the Indenture.
WHEREAS, interim financing through a warehouse fund to be provided by the Capital
Provider or the Authority (the "Interim Financing") may be utilized prior to the issuance of the
Bonds, and the Authority has approved the use of interim financing pursuant to Resolution No.
2019-0910-CF08.
WHEREAS, as one condition, among others, to issuing the Bonds and, if applicable, uti-
lizing Interim Financing, and lending the proceeds thereof, the Authority requires the Govern-
mental Unit to assign, and the Governmental Unit wishes to assign, all of its rights, title and in-
terest (reserving to itself only the "Reserved Rights" specified herein) in the PACE Contract, in-
cluding the right to receive Assessment Installments and Assessment Administrative Fees from
the Property Owner, to the Authority, subject to and upon the terms and conditions set forth here-
in, and the Property Owner has consented to such pledge and assignment.
WHEREAS, one condition among others to any Interim Financing provided by the Capi-
tal Provider, if applicable, is for the Authority to assign to the Capital Provider its rights, title and
interest, other than Reserved Rights, in the PACE Contract until such time as the Bonds are is-
sued.
-2-
WHEREAS, pursuant to the Indenture, as security for the Bonds, the Authority will
pledge and assign to the Trustee all of its right, title and interest in and to the PACE Contract
(other than certain "Authority Reserved Rights" as defined therein), including the right to receive
and apply the Assessment Installments, and certain other funds, property and collateral, collec-
tively defined as the "Security" in the Indenture, and the Property Owner has consented to such
pledge and assignment.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing, the mutual promises hereinafter
set forth, and for other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged by the parties, the Governmental Unit and the Authority agree as follows:
Section 1. 'Assignment and Assain tion of PACE Contract. The Governmental
Unit hereby assigns to the Authority all of the Governmental Unit's right, title and interest in and
to the PACE Contract, other than its rights to indemnification and payment of Governmental
Unit's costs and expenses, and any rights and obligations of the Governmental Unit to pursue an
"Enforcement Remedy" (as defined in Section 6(b) of the PACE Contract) which may be non -
delegable as a matter of law, as set forth in the PACE Contract (the "Reserved Rights"). The
Authority hereby assumes, as of the date hereof, and agrees to perform or cause to be performed
all of the Governmental Unit's obligations under the PACE Contract from and after the date
hereof, subject to its right to assign such obligations pursuant to an assignment of the PACE
Contract.
Section 2. GovernmentalUnit's Representations and Warranties,- Disclaimer.
(a) Representations and Warranties. The Governmental Unit hereby repre-
sents and warrants that, as of the date of this IFA Assignment:
(i) It is a Governmental Unit duly organized and validly existing un-
der the Constitution and the laws of the State of Illinois and has all
necessary power and authority to enter into this IFA Assignment
and to assign its rights under the PACE Contract, other than Re-
served Rights, to the Authority pursuant hereto;
(ii) The execution and delivery of this IFA Assignment and the Gov-
ernmental Unit's undertakings herein, including assignment of the
Governmental Unit's rights under the PACE Contract, other than
Reserved Rights, to the Authority pursuant hereto, have been duly
authorized by all necessary action on the part of the Governmental
-3-
Unit and will not contravene or violate the Governmental Unit's
municipal or county authority;
(iii) The Governmental Unit has not previously assigned or transferred
any of its rights under the PACE Contract.
(iv) This IFA Assignment and the PACE Contract constitute the legal,
valid and binding obligations of the Governmental Unit enforcea-
ble in accordance with their respective terms and, upon infor-
mation and belief, the PACE Contract constitutes the legal, valid
and binding obligation of the Property Owner, enforceable in ac-
cordance with its terms; except in either case as the enforcement
thereof may be limited by bankruptcy, insolvency, reorganization,
arrangement, fraudulent conveyance, moratorium and other laws
relating to or affecting creditors' rights, and to the application of
equitable principles;
(v) The execution, delivery and performance by the Governmental
Unit of this IFA Assignment and the transactions contemplated
hereby: (A) do not contravene any provisions of law applicable to
the Governmental Unit; and (B) do not conflict and are not incon-
sistent with, and will not result (with or without the giving of no-
tice or passage of time or both) in the breach of or constitute a de-
fault or require any consent under any applicable court or adminis-
trative order or any credit agreement, indenture, mortgage, pur-
chase agreement, deed of trust, security agreement, lease, guaran-
tee or other instrument to which the Governmental Unit or its
property maybe subject, or the PACE Act; and
(vi) There is no action, suit, proceeding, inquiry or investigation, at law
or in equity, before or by any court, governmental agency, public
board or body, pending or, to its knowledge threatened, against the
Governmental Unit seeking to restrain or enjoin or in any way con-
testing the validity or enforceability of this IFA Assignment or the
PACE Contract.
(b) Disclaimer. Except as set forth in this Section 2, the Governmental Unit
(i) has not heretofore made, nor does it make by this IFA Assignment, any representa-
tions or warranties with respect to the Property, including any warranty of title or any en-
vironmental matters, and (ii) makes no representation or warranty in connection with, and
assumes no responsibility with respect to, the solvency, financial condition or statements
of the Property Owner, or with respect to the performance or observance by the Property
Owner of its obligations under the PACE Contract.
Section 3. Authority's, Representations. The Authority represents that, as of the
date of this IFA Assignment, it is a body politic and corporate created and existing under and by
virtue of the laws of the State of Illinois and has full power and authority to enter into and to per-
form its obligations under this IFA Assignment; and when executed and delivered by the respec-
tive parties thereto, this IFA Assignment will constitute the legal, valid and binding obligations
of the Authority enforceable in accordance with their respective terms, except as the enforcement
thereof may be limited by bankruptcy, insolvency, reorganization, arrangement, fraudulent con-
veyance, moratorium and other laws relating to or affecting creditors' rights, to the application of
equitable principles, to the exercise of judicial discretion in appropriate cases and to the limita-
tion on legal remedies against the Authority.
Section 4. Consideration. The Governmental Unit acknowledges and agrees that the
assumption by the Authority of the Governmental Unit's obligations under the PACE Contract
and the issuance of the Bonds and the loan to the Property Owner are of substantial benefit to the
Governmental Unit as a source of liquidity and financing or refinancing of the Project, and con-
stitute good, valuable, fair and adequate consideration for the Governmental Unit's assignment
as contemplated herein.
Section 5. Delivery of Documents.
(a) As a condition to the Governmental Unit's performance of its obligations
under this IFA Assignment, the Authority shall have delivered to the Governmental Unit
an original of this IFA Assignment, in recordable form, duly executed by the Authority.
(b) As a condition to the Authority's performance of its obligations with re-
spect to this IFA Assignment, the Governmental Unit shall have delivered to the Authori-
ty all of the following, in form and substance reasonably satisfactory to the Authority:
(i) a certified true and correct copy of the PACE Contract, in recordable form, bearing the
original signature(s) of the Property Owner and the Governmental Unit and (ii) an origi-
nal of this IFA Assignment, in recordable form, duly executed by the Governmental Unit.
(c) As a condition to each Party's performance of its obligations under this
IFA Assignment, all of the Authority's, the Governmental Unit's and the Property Own-
er's respective representations and warranties contained in the PACE Contract and this
IFA Assignment, as applicable, shall be true and correct on the date of the execution of
this IFA Assignment.
-5-
Section 6. Recording of Documents. Upon the execution of this IFA Assignment
by both Parties hereto, the Governmental Unit shall direct the Program Administrator to record
this IFA Assignment in the office of the Recorder for the County in which the Property is situat-
ed.
Section 7. Acknowledgement and Consent to Further Assi nment. By execution
of this IFA Assignment, the Governmental Unit hereby acknowledges and consents to any as-
signment of the PACE Contract by the Authority, subject to the Reserved Rights and any reas-
signment of the PACE Contract.
Section 8. Successors and. Assigns. This IFA Assignment shall be binding on, and
inure to the benefit of, the parties hereto, their respective successors in interest, and their respec-
tive assigns.
Section 9. Governing Law; Submission to Jurisdiction. This IFA Assignment
shall be governed exclusively by and construed in accordance with the internal laws of the State
of Illinois applicable to contracts to be wholly performed therein. This IFA Assignment shall be
enforceable in the State of Illinois, and any action arising hereunder shall (unless waived by the
Authority in writing) be filed and maintained in the Circuit Court of Illinois, County of Cook.
Section 10. No Effect on PACE Contract. Nothing in this IFA Assignment, express
or implied, is intended to or shall be construed to modify, expand, or limit in any way the terms
of the PACE Contract. To the extent that any provision of this IFA Assignment conflicts or is
inconsistent with the terms of the PACE Contract, the PACE Contract will govern. All terms not
defined herein shall be given the meaning ascribed to such terms in the Indenture.
Section 11. Amendment. This IFA Assignment may not be modified or amended,
except in writing executed by both Parties.
Section 12. Severabilli. If any provision of this IFA Assignment is declared void or
unenforceable by any court or government authority, the remaining provisions of this IFA As-
signment shall be effective and shall control.
Section 13. Entire Agreement. This IFA Assignment constitutes the entire agree-
ment between the parties with respect to the subject matter hereof. This IFA Assignment super-
sedes and replaces any prior or contemporaneous oral or written understandings, agreements, or
representations between the parties.
Section 14. recitals. The provisions set forth in the Recitals are made a part of this
Assignment and are incorporated by reference into the terms hereof.
a Me
Section 15. 'Counterparts. This IFA Assignment may be executed in any number of
counterparts, each of which will be deemed an original, but all of which taken together will constitute
one single agreement between the parties. Signatures sent digitally will be deemed to be original sig-
natures for all purposes.
[Signature Page Follows.]
-7-
IN WITNESS WHEREOF, the parties hereto have caused this IFA Assignment to be ex-
ecuted as of the day and year first above written.
Governmental Unit:
Date:
,, [Title]
Signature
Month/Day/Year
STATE OF
COUNTY OF )
I, _ , a notary public in and for said County, in the State
aforesaid, DO HEREBY CERTIFY THAT the
_ of , a personally known to me to be the
same person whose name is subscribed to the foregoing instrument as such ,
appeared before me this day in person and acknowledged that signed and delivered the said
instrument, pursuant to authority given by said. , as own free and
voluntary act, and as the free and voluntary act of the municipal corporation for the uses and
purposes therein set forth.
GIVEN under my hand and notarial seal as of
Notary Public
My Commission Expires: (SEAL)
IN WITNESS WHEREOF, the parties hereto have caused this IFA Assignment to be ex-
ecuted as of the day and year first above written.
Authority:
Date:
Executive Director
Signature
Month/Day/Year
STATE OF ILLINOIS)
COUNTY OF COOK )
I, _ , a notary public in and for said County, in the State
aforesaid, DO HEREBY CERTIFY THAT the
...-- of µµµwww „ a , personally known to me to be the
same person whose name is subscribed to the foregoing instrument as such
appeared before me this day in person and acknowledged that signed and delivered the said
instrument, pursuant to authority given by said ............... .._.. as own free and
voluntary act, and as the free and voluntary act of the municipal corporation for the uses and
purposes therein set forth.
GIVEN under my hand and notarial seal as of
Notary Public
My Commission Expires: (SEAL)