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MUNICIPAL ORDER NO. 1910
A MUNICIPAL ORDER OF THE CITY OF PADUCAH, KENTUCKY,
APPROVING THE SUBORDINATION AGREEMENT BETWEEN THE CITY
OF PADUCAH AND THE PADUCAH BANK AND TRUST COMPANY
REGARDING THE PROPERTY LOCATED AT 1611 MADISON STREET,
PADUCAH, KY
i
-� WHEREAS, on March 21, 2016, the City of Paducah conveyed a piece of
property more particularly described in Exhibit A to Michael Warren Hatton and wife, Tonie M.
Hatton (collectively, "Hatton"), located at 1611 Madison Street, Paducah, McCracken County,
Kentucky (the Property"); and
WHEREAS, the aforesaid deed of conveyance to Hatton contained certain
restrictions and conditions regarding Hatton's use and development of the Property and provided
for a possible forfeiture of title and reversion of title to the City; and
WHEREAS, Hatton desire to finance their rehabilitation and revitalization of the
Property with a construction loan from The Paducah Bank and Trust Company (hereinafter
"Paducah Bank") (the "Mortgage Loan"), secured by a mortgage dated May 9, 2016, encumbering
the Property in the principal amount of up to $222,700.00, which mortgage is of record in
Mortgage Book 1496, page 629, in the McCracken County Clerk's Office (the "Mortgage); and
WHEREAS, as a condition for providing the Mortgage Loan, Paducah Bank is
requiring that the Mortgage be first and superior upon the Property and that the Mortgage securing
the Mortgage Loan be superior to any right, title, or interest of the City in the Property reserved or
retained in the aforesaid deed from the City conveying the Property to the Hatton, to which the
City is agreeable.
NOW THEREFORE, BE IT ORDERED BY THE BOARD OF
COMMISSIONERS OF THE CITY OF PADUCAH, KENTUCKY, AS FOLLOWS:
SECTION 1. Recitals and Authorization. The City hereby authorizes and
approves the Subordination Agreement between the City and Paducah Bank (the "Agreement"),
in substantially the same form attached hereto as Exhibit A and made a part hereof. It is further
determined that it is necessary and desirable and in the best interest of the City to enter into the
Agreement for the purposes therein specified. The Mayor of the City is hereby authorized to
execute the Agreement, and all other documents and instruments of any kind to be executed or
delivered in connection with the Agreement, with such changes in the Agreement not
inconsistent with this Ordinance and not substantially adverse to the City as may be approved by
the official executing the same on behalf of the City or the City Manager. The approval of such
changes, and that such are not substantially adverse to the City, shall be conclusively evidenced
by the execution of the Agreement by the authorized official.
SECTION 2. Severability. If any section, paragraph or provision of this
Ordinance shall be held to be invalid or unenforceable for any reason, the invalidity or
unenforceability of such section, paragraph or provision shall not affect any of the remaining
provisions of this Ordinance.
SECTION 3. Compliance With Open Meetings s. The City Commission
hereby finds and determines that all formal actions relative to the adoption of this Order were
taken in an open meeting of this City Commission, and that all deliberations of this City
Commission and of its committees, if any, which resulted in formal action, were in meetings
open to the public, in full compliance with applicable legal requirements.
SECTION 4. Conflicts. All ordinances, resolutions, orders or parts thereof in
conflict with the provisions of this Order are, to the extent of such conflict, hereby repealed and
the provisions of this Order shall prevail and be given effect.
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SECTION 5. Effective Date. This Order shall be in full force and effect on and
after the date as approved by the Board of Commissioners of the City of Paducah, Kentucky.
ATTEST:
Tammara S. Sanderson, City Clerk
Adopted by the Board of Commissioners, June 7, 2016
Recorded by Tammara S. Sanderson, City Clerk, June 7, 2016
\mo\agree-subordination-1611 Madison
Prepared by denton law firm
may,
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EXHIBIT A
SUBORDINATION AGREEMENT
THIS SUBORDINATION AGREEMENT made and entered into on this the day of
June, 2016, by and between CITY OF PADUCAH, KENTUCKY, a Kentucky municipal
corporation of the home rule class (hereinafter "City"), of 300 South 5t' Street, Paducah, KY
42003, and THE PADUCAH BANK AND TRUST COMPANY (hereinafter "Paducah
Bank"), of 555 Jefferson Street, Paducah, KY 42001;
WITNESSETH:
WHEREAS, by deed dated March 21, 2016, of record in Deed Book 1318, page 459,
McCracken County Clerk's Office, City conveyed to Michael Warren Hatton and wife, Tonie M.
Hatton, (collectively "Hatton"), certain real property located at 1611 Madison Street, Paducah,
Kentucky (the "Property");
WHEREAS, the aforesaid deed contained certain restrictions and conditions regarding
Hatton' use and development of the Property and provided for a possible forfeiture of title and
reversion of title to the City, as follows:
"This conveyance is made on the condition that if Grantees, his or her heirs and
assigns, shall fail to immediately begin bonafide construction of improvements, as
approved by Grantor, on the above-described real estate, and said improvements are not
completed within 12 months from the date hereof, the real estate herein conveyed shall
revert to Grantor, its successors and assigns."
WHEREAS, Hatton financed their rehabilitation and revitalization of the Property with a
construction loan from The Paducah Bank and Trust Company (hereinafter "Paducah Bank") (the
"Mortgage Loan"), secured by a mortgage dated May 9, 2016, encumbering the Property in the
principal amount of up to $222,700.00, which mortgage is of record in Mortgage Book 1496, page
629, in the McCracken County Clerk's Office (the "Mortgage"); and
WHEREAS, as a condition for providing the Mortgage Loan, Paducah Bank is requiring
that the Mortgage be first and superior mortgage upon the Property and that the Mortgage securing
the Mortgage Loan be superior to any right, title, or interest of the City in the Property reserved or
retained in the aforesaid deed from the City conveying the Property to the Hatton, to which the
City is agreeable;
NOW, THEREFORE, in consideration of the premises, and to induce Paducah Bank to
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make the Mortgage Loan to Hatton, and for other good and valuable consideration, City and
Paducah Bank agree as follows:
1. City hereby subordinates City's entire right, title, and interest in and to the
Property to the lien of the Mortgage, and any renewal, extension, or refinancing of the Mortgage
Loan, and to the right, title, and interest of Paducah Bank in and to the Property, as fully and
with the same effect as if the Mortgage had been duly executed and recorded and the principal of
the note secured by the Mortgage had been fully disbursed prior to the creation or retention of
City's right, title, or interest in the Property by virtue of the City's conveyance of the Property to
Hatton by the aforesaid deed.
2. It is further hereby agreed that City's aforesaid right, title and interest in the
Property shall be deemed automatically extinguished and of no further force and effect in the
event and at such time as the Property is sold through a Master Commissioner's Sale pursuant to
a foreclosure action to enforce the Mortgage, or any renewal, extension, or refinancing of the
Mortgage Loan; provided, however, that said right, title and interest of the City will not be
extinguished unless Paducah Bank gives City at least sixty (60) days advance written notice prior
to instituting foreclosure proceedings of any default by Hatton under the Mortgage, the Mortgage
Loan, or any renewal, extension, or refinancing of the Mortgage Loan, and allows City to cure
any such default.
3. The terms and conditions of this Subordination Agreement shall be binding upon
and redound to the benefit of the respective successors and assigns of the City and Paducah Bank,
including any assignee of one or both of the Mortgage, or any renewal, extension, or refinancing of
the Mortgage Loan.
4. The City agrees to take or cause to be taken such further action, including the
execution, delivery, and recording of such further documents, deeds, instruments, and consents as
reasonably may be requested hereafter by Paducah Bank in order to effect or provide notice of the
terms of this Subordination Agreement.
5. This Subordination Agreement shall be governed by and construed in accordance
with the laws of the Commonwealth of Kentucky.
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IN TESTIMONY WHEREOF, witness our signatures on this the day of June, 2016.
CITY OF PADUCAH, KENTUCKY
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THE PADUCAH BANK AND TRUST
COMPANY
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