HomeMy WebLinkAboutMO #2855MUNICIPAL ORDER NO. 2855
A MUNICIPAL ORDER APPROVING AN ENERGY PROJECT
ASSESSMENT DISTRICT (EPAD) PROGRAM FINANCING AGREEMENT,
NOTICE OF ASSESSMENT, AND FINAL ENERGY PROJECT NOTICE OF
ASSESSMENT FOR THE BLOCK MINING, INC. PACE FINANCING
PROJECT AND AUTHORIZING THE EXECUTION OF ALL DOCUMENTS
RELATED TO SAME
WHEREAS, pursuant to KRS Sections 65.205 — 65.209, the City of Paducah
created an Energy Project Assessment District ("EPAD") and authorized the establishment of an
EPAD Program by Ordinance No. 2023-05-8774; and
WHEREAS, the Board designated the entire jurisdictional boundaries of the City
as an EPAD; and
WHEREAS, Block Mining, Inc., ("Property Owner") owns property located at
5657 Commerce Drive ("Property"); and
WHEREAS the Property Owner has implemented an energy efficiency, water
conservation, and/or renewable energy improvement project on the Property; and
WHEREAS, the Property Owner has applied for inclusion in the EPAD Program
and meets all of the eligibility requirements and has obtained prior written consent from all
persons or entities, if any, that currently hold mortgage liens on the Property to subordinate their
liens to the PACE Agreement; and
WHEREAS, SPH Paducah, LLC, ("Lender") has agreed to make a loan to
Property Owner in the amount of Six Million Seven Hundred Thousand Six Hundred Forty -
Seven Dollars and Sixteen Cents ($6,700,647.16) ("Loan"); and
WHEREAS, the City of Paducah now wishes to approve the Property Owner's
Application for inclusion in the EPAD Program and authorize the execution of all documents
related to same.
NOW, THEREFORE, BE IT ORDERED BY THE CITY OF PADUCAH,
KENTUCKY:
SECTION 1. That the Board of Commissioners hereby authorizes the Mayor to
execute the EPAD Program Financing Agreement between the City of Paducah, Block Mining,
Inc. and SPH Paducah, LLC, as attached hereto and made part hereof (Exhibit 1).
SECTION 2. That the Board of Commissioners hereby authorizes the Mayor to
execute the Notice of Assessment and Approval of Final Energy Project Notice of Assessment
and all documents related to same as attached hereto and made part hereof (Exhibits 2 & 3).
SECTION 3. This Orders be ' 11 force and effect from and after the date
of its adoption.
George Bray, Mayor
ATTEST:
�mdsay Parish, �ty Clerk
Adopted by the Board of Commissioners, February 13, 2024
Recorded by Lindsay Parish, City Clerk, February 13, 2024
mo/EPAD PACE Financing Blockware Mining 5657 Commerce Drive
EXHIBIT NO. 1
EPAD PROGRAM FINANCING AGREEMENT
This EPAD Program Financing Agreement ("Agreement"), is made and entered into this
(� day of [], 2024 by and among the City of Paducah, Kentucky, a Kentucky
municipality (the "City"), Block Mining, Inc., a Delaware corporation, f/k/a Blockware Mining,
Inc. ("Property Owner" or "Borrower"), and SPH Paducah, LLC, a Georgia limited liability
company (together with its successors and assigns, "Lender"), and is made a part of that certain
PACE Agreement dated as of [ , 2024 by and between Property Owner and Lender,
such PACE Agreement hereafter referred to as the "PACE Agreement."
WITNESSETH:
WHEREAS, the General Assembly enacted KRS Sections 65.205 — 65.209 (the "Act")
authorizing urban county governments in Kentucky to establish a program to advance the
conservation and efficient use of energy and water resources by allowing for energy projects to be
financed by assessments imposed upon the real property being improved;
WHEREAS, the City created an Energy Project Assessment District ("EPAD") and
authorized the establishment of an EPAD Program when the Board of Commissioners of the City
("Board") enacted Ordinance No. 2023-05-8774 ("Ordinance");
WHEREAS, the Board designated the entire jurisdictional boundaries of the City as an
EPAD;
WHEREAS, the EPAD Program allows for eligible Property Owners to apply to the City
to participate in the EPAD Program;
WHEREAS, upon qualifying for the EPAD Program, an eligible Property Owner must
enter into an Agreement with the City and the Lender;
WHEREAS, the Property Owner is the Property Owner of certain real property located at
5657 Commerce Drive, in Paducah, Kentucky ("Property"), further described in Exhibit A
attached hereto and incorporated herein by reference;
WHEREAS, the Property Owner wants to implement an energy efficiency, water
conservation, and/or renewable energy improvement project on the Property ("Project") and has
applied to the City for inclusion in the EPAD Program;
WHEREAS, as certified in the Formal Program Application ("Application") attached
hereto as Exhibit B and incorporated herein by reference, the Property Owner meets all of the
eligibility requirements and has obtained prior written consent from all persons or entities, if any,
that currently hold mortgage liens on the Property to subordinate their liens to the PACE
Agreement;
WHEREAS, the City approved Property Owner's Application for inclusion in the EPAD
Program and, as such, Lender has agreed to make a loan to Property Owner in the amount of Six
Million Seven Hundred Thousand Six Hundred Forty -Seven Dollars and Sixteen Cents
($6,700,647.16) ("Loan"), as evidenced by the PACE Agreement and other Related Documents,
to be used to finance the Project; and
WHEREAS, the City has agreed to levy special assessments in order to pay down the Loan
and wishes to memorialize this arrangement by entering into this Agreement;
NOW, THEREFORE, for and in consideration of the making of the Loan, the City's
approval of the Project and the financing and collection arrangements between Lender, Property
Owner, and the City and other good and valuable consideration, receipt and sufficiency of which
are hereby acknowledged, LENDER, PROPERTY OWNER and the CITY agree as follows:
The above recitals are true and correct and are incorporated herein, in their entirety, by this
reference.
Defined Terms. The following capitalized terms used in this Agreement shall have the meanings
defined or referenced below, in the Recitals above, in the Act, or in the Ordinance:
"Annual Administrative Fee" means the annual amount charged by the Program Administrator to
administer the program, which shall equal 0.5% of the Installment Payment with a minimum
amount of $500.00 and a maximum amount of $1,000.00.
"Annual Assessment" means the amount that is due in a particular year as more fully described in
Section 5 hereof.
"Assessment Certification" shall have the meaning set forth in Section 5(d) hereof.
"City" means the City of Paducah, Kentucky.
"Collection Fee" means the annual fee charged by the entity collecting the Annual Assessment in
the amount of $500.00.
"County Clerk" means the McCracken County Clerk's Office.
"Disbursement Amount" shall have the meaning set forth in Section 6(a) hereof
"EPAD Assessment" means the aggregate amount of all Annual Assessments, which Annual
Assessments shall be levied by the City pursuant to KRS 65.207.
"Foreclosure Proceeds" means the proceeds resulting from the disposition of the Property by the
City in an in rem tax foreclosure.
"Installment Payment" means the annual amount of the Loan due in a particular year as more fully
described in Section 2 hereof.
"Liabilities" shall have the meaning set forth in Section 13(c) hereof.
"Loan" shall have the meaning set forth in the Recitals above.
"Loan Amount" means the outstanding amount of all principal under the PACE Agreement,
accrued but unpaid interest and any applicable penalties, costs, fees, charges, late payment charges,
default interest rate charges, prepayment premiums or administrative expenses related to the Loan.
"Maximum Disbursement Amount" shall have the meaning set forth in Section 6(a) hereof.
"PACE Agreement" shall have the meaning set forth in the Preamble above.
"Program Administrator" means Energize Kentucky LLC, a Kentucky limited liability company.
"Property" shall have the meaning set forth in the Recitals above.
"Related Document(s)" shall mean any instrument, agreement or document executed in connection
with the Loan by either the Borrower, the Lender or both.
Installment Payments. The Loan Amount shall be payable in Installment Payments, based on a
thirty-year amortization schedule. The Loan shall bear interest, including default interest, at the
rates set forth in the PACE Agreement and payments shall be due under the PACE Agreement as
more fully described therein and in Section 5 of this Agreement, ending upon payment in full of
the Loan Amount and all other charges, fees, commissions, penalties, expenses and other amounts
due under this Agreement, the PACE Agreement, and all other Related Documents or instruments.
The amounts of the Installment Payments are based on a Loan Amount of $6,700,647.16. The
Loan shall be fully amortized over the thirty-year term of the Loan, and shall be repaid pursuant
to the terms set forth in this Agreement, the PACE Agreement, and all other Related Documents
or instruments.
Consent to EPAD Assessment.
(a) By entering into this Agreement, the City hereby agrees to enforce the EPAD
Assessment and levy and impose the Annual Assessments in the same manner as the
property tax bill of the Property as provided in the Ordinance and in Section 5 below. Upon
execution of this Agreement, the City will cause the EPAD Assessment and Annual
Assessments to be recorded in the office of the County Clerk against the Property, as more
particularly described in the Ordinance.
(b) Property Owner hereby agrees and acknowledges that the Property is subject to the
EPAD Assessment and consents to the levy of the Annual Assessments. Property Owner
further agrees and acknowledges that Annual Assessments of the EPAD Assessment are a
lien on the Property as provided in the Act and the Ordinance and failure to pay the EPAD
Assessment may result in foreclosure of the Property in accordance with the terms of the
Ordinance and this Agreement.
Term. This Agreement shall remain in full force and in effect until the Loan Amount and all other
charges, fees, commissions, penalties, expenses and other amounts due under this Agreement and
the PACE Agreement have been paid in full.
Annual Assessments.
(a) During the term of this Agreement, the Annual Assessments will be issued separately
from, but in the same manner as, the property tax bill for the Property and collected as more
particularly described below.
(b) The Annual Assessment shall equal the sum of the Installment Payment, the Annual
Administrative Fee, and the Collection Fee.
(c) The estimated amount of the initial Annual Assessment is set forth in Exhibit C
attached hereto and incorporated herein by reference. That estimate is based on the assumptions
set forth in Exhibit C, including the assumption that the Maximum Disbursement Amount has been
disbursed to Borrower. The parties anticipate that some or all of the Loan proceeds will be
disbursed prior to July 1, 2024. The first year of collections for the Special Assessments will be
2025, so the 2026 assessment for the Property shall include the actual amount of the initial Annual
Assessment.
(d) Property Owner hereby agrees to pay the Annual Assessment bill for the Property
during the term of this Agreement in a timely fashion and in any event no later than
November 30`h as set forth in Section 7(a) hereof. Property Owner agrees that all property
tax bills in addition to the Annual Assessment, will be timely paid so as to avoid any default
or delinquency in such payment.
(e) In the event Property Owner fails to pay all or part of any Annual Assessment when
due, the parties hereto acknowledge and agree that (i) late payment charges and default
interest on the unpaid amounts of the Installment Payment shall accrue in favor of Lender
as set forth in the PACE Agreement, (ii) such late payment charges and default interest
shall be added to the EPAD Assessments and shall be included as part of the Annual
Assessments due thereafter unless and until all such accrued and unpaid default interest is
paid in full, and (iii) such default interest shall be in addition to any and all penalties and
interest that may be imposed by or accrue in favor of the City as a result of Property
Owner's failure to pay real estate or other property taxes or other assessments on the
Property. In addition, Annual Assessments shall continue to be issued in September of each
year notwithstanding Property Owner's failure to pay all or part of any past Annual
Assessment, such that the City shall continue to levy Annual Assessments, including
default interest to be paid to Lender, until either the Loan Amount, including all accrued
and unpaid interest, is paid in full or Lender has acquired title to the Property pursuant to
Section 8 or Section 9 of this Agreement.
(f) Property Owner hereby acknowledges and agrees that failure to pay any Annual
Assessment of the EPAD Assessments, like failure to pay any property taxes pertaining to
the Property, will result in penalties and interest accruing in favor of the City and/or the
Lender, as set forth more fully in this Agreement, the PACE Agreement, and all other
Related Documents or instruments. In addition, the City and Lender may have the right to
initiate a foreclosure action on the Property as a result of any delinquent Annual
Assessments of the EPAD Assessments, as set forth in Sections 8 and 9 below, as the City's
or Lender's sole remedy for failure to pay the EPAD Assessments, except as otherwise
expressly provided in the PACE Agreement. Neither the City nor Lender waive in any
respect any right each of them may have to seek personal liability for any other liens of any
kind or nature due to either of them by Property Owner.
Adjustments and Prepayment.
(a) Subject to the terms and conditions in the PACE Agreement, Lender agrees to disburse
to Property Owner an amount equal to the actual cost of the Project (the "Disbursement
Amount"); provided the Disbursement Amount shall not exceed Six Million Seven
Hundred Thousand Six Hundred Forty -Seven Dollars And Sixteen Cents ($6,700,647.16)
(the "Maximum Disbursement Amount'). If the Disbursement Amount is less than the
Loan Amount, Lender shall recalculate the Installment Payment amounts based on the
remaining amortization term and so notify the City and the Program Administrator. If any
payments have been made in excess of the amount disbursed, the City or the Program
Administrator, as appropriate, may make an appropriate refund by crediting the refund
amount against the next Annual Assessment of the EPAD Assessments.
(b) Property Owner may prepay the Loan in full, but not in part, by paying the outstanding
principal amount of the Loan together with all accrued and unpaid interest, penalties, fees and
other charges, plus any prepayment premium due Lender, all as more fully set forth in the PACE
Agreement. Lender shall certify to Property Owner and the Program Administrator the aggregate
amount due on the Loan, including principal, interest, and fees and any prepayment premium,
within thirty (30) days of receipt of a written request therefor from Property Owner.
(c) Without the prior written consent of Lender, which consent may be given or withheld
in Lender's sole reasonable discretion, the Loan may not be prepaid in part and, if such consent is
given, any such partial prepayment must be made in strict compliance with the terms and
conditions set forth in such written consent, which terms and conditions may include a prepayment
penalty. Any partial prepayment in violation of this provision will not be accepted by Lender.
Collection of Annual Assessments; Payments to Lender.
(a) The City hereby appoints the Program Administrator to collect the Annual
Assessments, including assessing penalties and charging interest, in accordance with the
Ordinance. The City will direct the Program Administrator to prepare the bill and mail such bill to
the Property Owner at the notice address listed in the PACE Agreement by November 1 of the
year, subject to this timeframe being changed by the Kentucky Department of Revenue. Property
Owner shall pay the Annual Assessment amount to the Program Administrator by November 30`h
in accordance with the Ordinance. Failure to pay the Annual Assessment to the Program
Administrator within such time frame shall result in the accrual of penalties as detailed in the
Ordinance.
(b) The City agrees to direct the Program Administrator to separately account for any
Annual Assessment payments collected or otherwise received for the Property. The City will direct
the Program Administrator to remit the collected Annual Assessment less the Annual
Administrative Fee and the Collection Fee to the Lender, or its heirs, successors or assigns,
separately from any other tax revenue remitted to the City and in accordance with the Ordinance
as in effect on the date of this Agreement. The City understands that it will receive a reconciliation
statement from the Program Administrator by January 15 of each year stating the amounts
collected.
(c) If the City receives the Annual Assessment, then the City shall remit to Lender, or its
heirs, successors or assigns, the Installment Payment amount.
Delinquent Annual Assessment; In Rem Foreclosure. If Property Owner becomes delinquent
in the payment of an Annual Assessment, upon filing with the county clerk, the real property tax
claim shall become a Certificate of Delinquency ("Certificate") which shall operate in the same
manner as a tax delinquency certificate. The collecting entity is entitled to receive a fee of up to
the statutory maximum (20% of the unpaid annual assessment amount) for their collection duties
which shall be added to the amount of the Certificate. Any time after the passage of one (1) year
and before the passage of eleven (11) years following the date when the taxes became delinquent,
any action to collect any amount due on a Certificate may be brought at any time. The collecting
entity may begin foreclosure or collection actions pursuant to statutory provisions and
requirements and shall have in addition to the remedies already provided, the right to distrain and
sell any property owned by the delinquent taxpayer, including that on which the lien attached due
to the delinquent taxes. Any property while owned by a delinquent taxpayer shall be subject to
foreclosure or execution in satisfaction of a judgment pursuant to an action in rem or an action in
personam, or both, to enforce the obligation. The covenants contained in this Agreement,
including, without limitation, this Section 8, shall be covenants running with the Property, and for
as long as any principal of, and interest on, the Loan is outstanding and secured, at least in part by
the EPAD assessment, the covenants contained in this Agreement, including without limitation,
this Section 8, shall be binding upon the Property, the Property Owner and every future owner of
the Property. Nothing in this Agreement shall be deemed to affect or impair the right of Lender to
enforce its PACE Agreement, Lien, and Related Documents against Borrower, including without
limitation the right of Lender to foreclose on its collateral or to purchase the Certificate. KRS
Chapter 134.
City Representations regarding Loan and Loan Documents. The City hereby represents to
Lender and to Property Owner that (i) it is and will be duly authorized under all applicable laws to
execute this Agreement, (ii) this Agreement is and will be the valid and legally enforceable
obligation of the City, enforceable in accordance with its terms except to the extent that
enforcement thereof may be subject to bankruptcy and other similar laws affecting creditors' rights
generally, and (iii) this Agreement and the dollar amount and all other terms and conditions of the
Loan as set forth herein, the PACE Agreement, and all other Related Documents and instruments
are in compliance with the provisions of the Act and the Ordinance. The City shall at all times, to
the extent permitted by law, defend, preserve and protect the EPAD Assessments created by this
Agreement and all the rights of Lender hereunder against all claims and demands of all other
persons whomsoever.
Other Obligations Payable from EPAD Assessments. The City will not issue or incur any
obligations payable from the proceeds of the EPAD Assessments nor voluntarily create or cause
to be created any debt, lien, pledge, assignment, encumbrance or other charge upon the EPAD
Assessments or the Annual Assessments, except for administrative fees and commissions as
provided in this Agreement and the fees, commissions, penalties, costs and other charges payable
for the collection of delinquent Annual Assessments provided in the Ordinance.
Re -Levy of Annual Assessment. If the City, omits to make, assess or collect any Annual
Assessment when it is required by this Agreement or by the Ordinance to have done so, or the
Program Administrator omits to collect any Annual Assessments at the direction of the City, then
the City shall take all necessary steps to cause a new Annual Assessment (equal in amount to those
not assessed, levied or collected plus interest and penalties, if any, thereon) to be levied against
the Property in addition to that Annual Assessment otherwise to be levied or assessed against the
Property. In no event shall Property Owner be liable for interest or penalties for sums not
accurately assessed if paid within sixty (60) days of receipt of notice of such non -assessment.
No Guaranty by the City of Repayment of Loan. The City does not assume any responsibility
for or guarantee in any manner whatsoever, in whole or in part, the repayment of the Loan between
Property Owner and Lender or the payment of the EPAD Assessment or any Annual Assessment.
In no event shall the City ever be required to expend its own funds directly or indirectly on the
Project.
Property Owner Responsibility; Indemnification.
(a) Property Owner acknowledges that the City has established the Program solely for the
purpose of facilitating loans arranged by eligible Property Owners located in the City for
the purpose of making energy-efficient renovations by treating principal and interest
repayments, fees and other charges for these loans as assessments administered through a
bill separate from, but in the same manner as, a tax bill for such properties. The Program
is a collection program only. Neither the City nor Lender nor any of their respective
officers, officials, agents, employees, attorneys or representatives are responsible for
selection, management or supervision of the Project or the Project's performance and,
further, will have no liability to Property Owner for any matters related to the Project and
its performance. Any issues related to performance of the Project should be discussed with
chosen contractors or installers, and the manufacturer or distributor of the Project.
(b) Property Owner acknowledges that, pursuant to the Ordinance, the Project shall
be permanently affixed to the Property and shall be transferred with the Property upon sale
or transfer of title.
(c) To the extent permitted by law, Property Owner shall indemnify, defend, protect and
hold harmless the City, Lender, the Program Administrator, and any and all officers, officials,
agents, employees, attorneys and representatives of the City, Lender, and the Program
Administrator (collectively, the "Indemnified Parties") from and against all losses, liabilities,
claims, damages, penalties, fines, forfeitures, costs and expenses (including all reasonable out-of-
pocket litigation costs and reasonable attorneys' fees) and any demands of any nature whatsoever
related directly or indirectly to, or arising out of or in connection with, any bodily injury or death
or property damage occurring in or upon the Property through any cause whatsoever from the
presence of Hazardous Substances (hereinafter defined) on the Property or arising out of any
circumstance that results in a material, adverse devaluation of the Property as the result of any act
or omission of the Property Owner (collectively, the "Liabilities"), regardless of whether such
Liabilities shall accrue or are discovered before or after the disbursement of the Loan Amount or
any portion thereof. "Hazardous Substance" means any substance, whether solid, liquid or gaseous
which is listed, defined or regulated as a "hazardous substance", "hazardous waste" or "solid
waste", or otherwise classified as hazardous or toxic, in or pursuant to any Environmental Law
(hereinafter defined), or which causes or poses a threat to cause a contamination on the Property
or any adjacent property or a hazard to the environment or to the health or safety of persons on the
Property. "Environmental Law" means any federal, state, county or municipal statute, ordinance,
regulation, rule, order, judgment, permit or decree or common law, now or hereafter in effect,
relating to pollution or protection of human health, safety or the environment (including but not
limited to ambient air, surface water, ground water, land surface or subsurface strata), or relating
to waste disposal, or relating to worker safety, emissions, discharges, releases or threatened
releases of Hazardous Substances or other environmental matters.
(d) The indemnity obligations described in this Section shall survive the disbursement of
the Loan Amount or any portion thereof, the payment of the Loan Amount in full, the transfer or
sale of the Property by Property Owner and the termination of this Agreement.
Lender to Notify the City of Transfer or Assignment. Lender shall send notice and new
contact/notice information to the City and the Program Administrator promptly upon the transfer
or assignment of the Loan to any heirs, successors or assignees.
Waiver of Claims.
(a) For and in consideration of the City's and Lender's execution and delivery of this
Agreement, Property Owner, for itself and for its assignees or successors -in -interest to the Property
and for any one claiming by, through or under Property Owner, hereby waives the right to recover
from the City, the Program Administrator, and Lender, and fully and irrevocably releases City, the
Program Administrator, and Lender from any and all claims, obligations, liabilities, causes of
action or damages including attorneys' fees and court costs, that Property Owner may now have
or hereafter acquire against any of the City and Lender, and accruing from or related to (i) this
Agreement, (ii) the disbursement of the Loan Amount, (iii) the levy and collection of the Annual
Assessments, (iv) the imposition of the lien of the EPAD Assessments, (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 resulting from the Project, (xii) the workmanship of any third parties,
and (xiii) any other matter with respect to the Program (the "Waived Claims"). This release
includes claims, obligations, liabilities, causes of action and damages of which Property Owner is
not presently aware or which Property Owner does not suspect to exist which, if known by Property
Owner, would materially affect Property Owner's release of City and the Lender. Notwithstanding
the foregoing, Property Owner's release under this Section shall not extend to Waived Claims
arising from the City's or the Program Administrator's, or Lender's intentional default, fraud or
willful misconduct.
(b) The waivers and releases by Property Owner contained in this Section shall survive the
disbursement of the Loan Amount or any portion thereof, the payment of the Loan Amount in full,
the transfer or sale of the Property by Property Owner and the termination of this Agreement.
Administrative Fees. The Annual Assessments shall include the Annual Administrative Fee due
to the Program Administrator and the Collection Fee due to the entity collecting the Annual
Assessments
Notices. All notices, requests, demands and other communications hereunder shall be given in
writing and shall be: (a) personally delivered; (b) sent by registered or certified mail, return receipt
requested, postage prepaid; or (c) sent to the parties at their respective addresses indicated herein
by private overnight mail courier service. The respective addresses to be used for all such notices,
demands or requests are as follows:
(a) If to Property Owner, to: Block Mining, Inc., 141 W. Jackson Blvd., Suite 1404,
Chicago, Illinois 60604, Attention: Michael Stoltzner or to such other person or address as
Property Owner shall furnish to Lender, the City, and the Program Administrator in
writing.
(b) If to Lender, to: SPH Paducah, LLC, One Alliance Center, 3500 Lenox Road, Suite 625,
Atlanta, Georgia 30326, Attention Kevin Cadin, Esq. or to such other person or address as Lender
shall furnish to Property Owner, the Program Administrator, and the City in writing.
(c) If to the City, to: City of Paducah, Kentucky, 300 South 5th Street, P.O. Box 2267,
Paducah, Kentucky 42002, Attention: Lindsay Parish or to such other person or address as the City
shall furnish to Property Owner, the Program Administrator, and Lender in writing.
(d) If to the Program Administrator, to: 2400 Chamber Center Drive, Suite 300, Ft. Mitchell,
Kentucky 41017, or to such other person or address as the Program Administrator shall furnish to
Property Owner, the City, and Lender in writing
If personally delivered, such communication shall be deemed delivered upon actual receipt (or
refusal to accept delivery); if sent by registered or certified mail, such communication shall be
deemed delivered upon actual receipt (or refusal to accept delivery); and if sent by overnight
courier pursuant to this Section, such communication shall be deemed delivered upon receipt. Any
party to this Agreement may change its address for the purposes of this Agreement by giving notice
thereof in accordance with this Section.
Supremacy. In the event of any conflict, inconsistency or ambiguity between the provisions of
this Agreement and the provisions of the PACE Agreement, the provisions of this Agreement shall
control.
Application Compliance. In applying for the Loan, Property Owner represents and warrants that
it has fully complied with the loan application process as set forth in the Ordinance.
Compliance with Laws. Lender and Property Owner hereby agree to comply with all applicable
federal, state and local laws, including lending and disclosure requirements and the provisions of
the Ordinance.
Counterparts. This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original and all of which together shall be deemed a single agreement.
Entire Agreement; Amendment. This Agreement constitutes the entire agreement and
understanding of the parties with respect to the subject matter set forth herein and this Agreement
supersedes any and all prior and contemporaneous oral or written agreements or understandings
between the parties relative thereto. No representation, promise, inducement, or statement of
intention has been made by the parties that is not embodied in this Agreement. This Agreement
cannot be amended, modified, or supplemented in any respect except by a subsequent written
agreement duly executed by all of the parties hereto.
Severability. If any one or more of the provisions of this Agreement shall be found to be invalid,
illegal or unenforceable in any respect or to any extent, such finding shall not affect the validity,
legality or enforceability of the remaining provisions of this Agreement.
Transferability. Lender and the City agree that this Agreement shall run with the land and that
upon any transfer of the Property, "Property Owner" shall become the transferee and if such
transfer is accomplished in compliance with the requirements of this Agreement, the PACE
Agreement, and all other Related Documents or instruments, the transferor shall be released from
any obligation or liability hereunder.
Governing Law. This Agreement shall be governed by and construed in accordance with the laws
of the Commonwealth of Kentucky. In the event of any proceedings regarding this Agreement, the
Parties agree that the venue shall be the state courts of Kentucky or the U.S. District Court for the
Eastern District of Kentucky, Frankfort Division. All parties expressly consent to personal
jurisdiction and venue in such Court for the limited and sole purpose of proceedings relating to
this Agreement or any rights or obligations arising thereunder. Service of process may be
accomplished by following the procedures prescribed by law.
Headings. The headings and captions of the sections in this Agreement are incorporated only for
reference and are not to be read or construed into this Agreement.
Authority. The parties, by execution of this Agreement, do hereby warrant and represent that they
are qualified to do business in the Commonwealth of Kentucky, and have full right, power and
authority to enter into this Agreement.
Successors. This Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective heirs, successors and assigns.
Errors and Omissions. The undersigned parties agree that if requested by either Lender or the
City, in their respective sole reasonable discretion, it/they will fully cooperate and adjust for
clerical errors on any or all documents, agreements and instruments related to the Project and/or
the Loan as deemed necessary. Further, the undersigned parties will comply with all such requests
within thirty (30) days of same being made.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their
officers and officials thereunto duly authorized as of the date first written above.
Approved as to Form and Legality:
City of Paducah, Kentucky
City Attorney
CITY OF PADUCAH, KENTUCKY
By:_
Name:
Title:
LENDER: SPH PADUCAH, LLC
By:_
Name:
Title:
PROPERTY OWNER: BLOCK
MINING, INC.
By:
Name:
Title:
EXHIBIT A
Property Description
Parcel Information:
ID: 075-00-00-147.06
Property Address: 5657 Commerce Drive, Paducah, KY 42001
Tract 1, containing 5.080 acres as shown on Wavier of Subdivision Plat for Paducah -McCracken County Industrial
Development Authority of record in Plat Section "M", page 1591, in the McCracken County Court Clerk's Office.
Being part of the same property conveyed to Paducah -McCracken County Industrial Development Authority, abody
politic and corporate established pursuant to the laws of the Commonwealth of Kentucky by deed dated July 2, 1998
in Deed Book 875, page 28 and re-recorded on July 28, 1998 in Deed Book 897, page 303, and by Deed of Correction
dated November 13, 1997 of record in Deed Book 882, page 186, and deed dated July 2, 1997 of record in Deed
Book 875, page 32, and re-recorded July 28, 1998 of record in Deed Book 897, page 307, all in the McCracken
County Court Clerk's Office.
EXHIBIT B
Formal Program Application
[See Attached]
EXHIBIT C
Assessment Schedule
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EXHIBIT NO. 2
Notice of Assessment
PROPERTY ADDRESS: 5657 Commerce Drive, Paducah, KY 42001
PIDN: 075-00-00-147.06
The undersigned official is charged with the duty of collecting real property taxes of the
City of Paducah, Kentucky (the City) with an office at 300 South 51h Street, P.O. Box 2267,
Paducah, Kentucky 42002, for and on behalf of the City acting under Kentucky Revised Statutes
Section 65.205 through 65.209, inclusive, as amended (the Act), and under Ordinance No. 2023-
05-8774 (the Program Ordinance), and HEREBY LEVIES AN ASSESSMENT AGAINST
AND LIEN UPON certain real property as described more particularly in the attached Attachment
A (the Property) owned by Block Mining, Inc., a Delaware corporation, f/k/a Blockware Mining,
Inc. (the Owner), and situated in the City to pay the costs of an "energy project" (as defined in the
Act) made or to be made on the Property.
The amount and repayment of the levy and lien, as determined by the Owner, verified by
the City are as follows: an installment payment plan is in effect for payment of the assessment,
and the installments are calculated in order to repay the principal amount of $6,700,647.16 with
interest at an annual fixed rate equal to 8.80% plus any capitalized interest (the Installment
Amount), an annual administrative fee to Energize Kentucky of 0.5% of the Installment Amount
with a minimum amount of $500.00 and a maximum amount of $1,000.00, an annual collection
fee to the special assessment collection entity in the amount of $500.00, or any additional fees and
expenses payable under the petition for assessments and the related EPAD Program Financing
Agreement (the Tri -Party Agreement) between the City, the Owner, and SPH Paducah, LLC, a
Georgia limited liability company (the Investor) and the PACE Agreement (the PACE
Agreement) between the Owner and the Investor. The installments described above and their due
dates are stated on the attached Attachment B.
Interest and other charges shall be charged upon unpaid installments that become due and
payable in the same manner as other delinquent property tax bills. The City shall pay such portion
of the penalty and interest described in the preceding sentence to the Investor as may be available
under law to be paid to the Investor.
When all of the installment of the assessments have been paid in full and satisfied, a release
of this Notice of Assessment shall be filed in the McCracken County, Kentucky Records.
This Notice of Assessment constitutes a certificate of lien and is filed under the Act to
evidence a lien for the assessments imposed on the Property for the benefits conferred upon the
Property by the energy project constructed on the Property. Under the Act, the assessments,
together with any interest and penalties, shall constitute a first and prior lien against the Property
from the date on which this Notice of Assessment is recorded until paid. Under the Act, the lien
shall have the same priority status as a lien for any other state or local ad valorem tax upon the
Property. The lien and the assessments have been assigned by the City to the Investor to secure
the financing provided by it to the Owner.
The portion of this Notice of Assessment which constitutes a notice of the levy of the
assessment and notice of installment payment of assessments is filed under the provisions of the
Act, the Program Ordinance, and the Kentucky Revised Statutes, as amended.
[Signature Page Follows]
By order of the City, I have executed this Notice of Assessment.
Name:
Title:
STATE OF
): SS
Ci 111 kirweT
Dated at Paducah, Kentucky this _ day of , 2024.
Received for Record: 2024
Recorded in the McCracken County, Kentucky Real Estate
Records at Volume _, Page
The foregoing Notice of Assessment was acknowledged before me this _ day of
, 2024 by , the of City of
Paducah, Kentucky on behalf of the City.
Notary Public
My Commission Expires:
This instrument was prepared by:
Colin Kalvas, Esq.
Bricker Graydon LLP
100 South Third St.
Columbus, Ohio 43215
ATTACHMENT A
to
NOTICE OF ASSESSMENT
Property
ID: 075-00-00-147.06
Property Address: 5657 Commerce Drive, Paducah, KY 42001
Tract 1, containing 5.080 acres as shown on Wavier of Subdivision Plat for Paducah -McCracken County Industrial
Development Authority of record in Plat Section "M', page 1591, in the McCracken County Court Clerks Office.
Being part of the same property conveyed to Paducah -McCracken County Industrial Development Authority, a body
politic and corporate established pursuant to the laws of the Commonwealth of. Kentucky by deed dated July 2, 1998
in Deed Book 875, page 28 and re-recorded on July 28, 1998 in Deed Book 897, page 303, and by Deed of Correction
dated November 13, 1997 of record in Deed Book 882, page 186, and deed dated July 2, 1997 of record in Deed
Book 675,. page 32, and re-recorded July 28, 1998 of record in Deed Book 897, page 307, all in the McCracken
County Court Clerks Office.
ATTACHMENT B
to
NOTICE OF ASSESSMENT
Installment Schedule
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EXHIBIT NO. 3
APPROVAL OF FINAL ENERGY PROJECT NOTICE OF ASSESSMENT
As set forth in Kentucky Revised Statutes Section 65.205-65.209 (the Act), the Kentucky
General Assembly has authorized counties of Kentucky to establish a program to advance the
conservation and efficient use of energy and water resources by allowing for energy projects to be
financed by assessments imposed upon the real property being improved.
The City of Paducah, Kentucky (the City) created an Energy Project Assessment District
(EPAD) and authorized the establishment of an EPAD Program when the City enacted Ordinance
No. 2023-058774 (EPAD Ordinance).
Block Mining, Inc., f/k/a Blockware Mining, Inc. (the Owner), as the owner of certain real
property located within the City, has identified certain real property owned by the Owner located
at 5657 Commerce Drive in the City, with parcel ID 075-00-00-147.06 (the Property), as an
appropriate property for an energy project.
The Owner has submitted to City (1) a final, complete Formal Program Application (the
Application), (2) a form of EPAD Program Financing Agreement (the EPAD Agreement)
between the City, the Owner, and SPH Paducah, LLC (the Investor), and (3) a form of Notice of
Assessment (the Notice of Assessment) for filing written notice of assessments on the Property
and agreement to acquire, construct, equip, improve, and install an "energy improvement" within
the meaning of the Act on the Property (the Energy Project).
As provided in the EPAD Ordinance, the City approved the Energy Project and the forms
of the EPAD Agreement and the Notice of Assessment at its February 13, 2024 public meeting.
As authorized by the City, the final list of assessments to be collected by the City in connection
with the Energy Project has been provided to the City, a copy of which is attached to this Approval
as Exhibit A. The final list of assessments is included in the final form of the Notice of
Assessment, a copy of which is now on file with the City. As authorized by the City, the final list
of assessments and the final forms of the EPAD Agreement and the Notice of Assessments are
hereby approved, and the City, in cooperation with the Owner and the Investor, shall cause the
Notice of Assessment with the final list of assessments to be filed of in the real property records
of the City, all in accordance with the City's approval, the EPAD Agreement, the EPAD
Ordinance, and the Act.
[Signature Page Follows]
By order of the City, I have executed this Approval of Final Energy Project Notice of
Assessment on 2024.
George Bray, Mayor
City of Paducah, Kentucky
ATTEST:
Lindsay Parish, City Clerk
EXHIBIT A
FINAL LIST OF ASSESSMENTS
(see attached)
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