Preview
FILED
2/9/2022 4:07 PM
FELICIA PITRE
DISTRICT CLERK
DALLAS CO., TEXAS
Martin Reyes DEPUTY
CAUSE NO. DC-20-09024
ROSCOE F. WHITE, III § IN THE DISTRICT COURT
§
Plaintiff and Counter-Defendant §
298" JUDICIAL DISTRICT
vs. §
FIRST UNITED BANK & TRUST §
COMPANY and ELAINE EDINGER DALLAS COUNTY, TEXAS
Defendants and Counter-Plaintiff §
DEFENDANT FIRST UNITED’S SECOND AMENDED MOTION FOR
SUMMARY JUDGMENT AND REQUEST FOR DECLARATORY JUDGMENT
TO THE HONORABLE JUDGE OF SAID COURT:
FIRST UNITED BANK AND TRUST COMPANY (hereinafter sometimes referred to as
“Defendant,” “Counter-Plaintiff,” or “First United”), files this its Second Amended Motion for
Summary Judgment and Request for Declaratory Relief against ROSCOE F. WHITE, II]; and in
support thereof would respectfully show the court the following:
INTRODUCTION
1 White executed a commercial promissory note, revolving line of credit loan
documents, and a first lien deed of trust covering a 9.339-acre tract owned by him. First United
subsequently executed a partial release covering 2.455 acres, leaving 6.884 acres subject to First
United’s Deed of Trust lien.
2. This case arises from White’s breach of those loan documents and First United’s
efforts to foreclose on White’s property.
3 Both parties seek a Declaratory Judgment concerning the validity and
enforceability of the deed of trust lien asserted by First United.
FIRST UNITED’S SECOND AMENDED MOTION FOR SUMMARY JUDGMENT AND
REQUEST FOR DECLARATORY RELIEF PAGE 1
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4 The questions of law presented to the Court are:
a) whether White defaulted as a matter of law; and
(2) whether First United valid deed of trust lien against White’s 6.884 acres was
extinguished because there was debt owing to First United on any debt
during April 2009.
These are questions of law for the Court that can be resolved by an order on this motion,
or upon the conclusion of the bench trial currently scheduled for June 29, 2021. First United
respectfully suggests that the questions presented in this motion can be accurately, efficiently and
cost effectively determined by a ruling on this motion.
SUMMARY OF ARGUMENT
2 White defaulted on his loan and owes First United $2,744,662.04 as of June 2, 2021
(consisting of $2,588,984.10 as the principal balance of the Note (including forced placed
insurance in the amount of $6,571.52); $146,296.42 in accrued and unpaid interest; and $2,810.00
in late charges, plus interest at the rate of 6.5 % per year with a per diem of $467.45546).
6 First United has a valid deed of trust lien on 6.884 acres owned by White. Such
Deed of Trust secured payment of both the commercial promissory note and any other debts,
obligations on liabilities owed by White to First United Bank.
d White argues that First United’s deed of trust lien was extinguished because his
loan had matured and had a zero balance on the date he signed Loan Modification #3. In doing
so, White ignores the guaranty obligation he owed to First United in connection with the Hickory
Creek loan.
FIRST UNITED’S SECOND AMENDED MOTION FOR SUMMARY JUDGMENT AND
REQUEST FOR DECLARATORY RELIEF PAGE 2
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8 On the December 2, 2008 agreed effective date of Loan Modification #3, the loan
had not matured; and on the April 29, 2009 execution date, the loan balance on the Hickory Creek
note guaranteed by White was $1,074,330.73.
9 Even assuming arguendo that White’s note had matured and had a zero balance on
the effective date of Loan Modification #3, First United nevertheless has a valid deed of trust lien
because White owed a debt and obligation to First United resulting from his guaranty of a note
executed by a third party, (“the Hickory Creek note.”). On the agreed effective date of Loan
Modification #3, the Hickory Creek note had a balance of $1,074,330.73.
LOAN HISTORY BETWEEN WHITE AND FIRST UNITED
ORIGINAL LOAN
10. Attached hereto as Exhibit 1 is a copy of a Commercial Promissory Note executed
by White on or about June 24, 2005, in the original principal amount of Three Million Dollars
($3,000,000.00) and payable to the order of First United. First United is the payee, owner, and
holder of this Note and is entitled to enforce it. The Note expressly provides that it is a revolving
line of credit and “if the amount reaches zero all collateral remains in full force and effect.”
11. To secure the debt created by the Commercial Promissory Note, White executed a
Commercial Deed of Trust, Security Agreement, Financing Statement and Assignment of Rents
(Exhibit 2). Importantly, the definition of indebtedness in the Commercial Deed of Trust includes
“other and additional notes, debts, obligations and liabilities of any kind or character of
Borrower now and hereafter existing and all renewals and extensions of such notes, debts,
obligations and liabilities.” White also executed a Loan Agreement (Exhibit 3), and a Revolving
Credit Addendum (Exhibit 4) which provides that “the note is a revolving line of credit.
Advances and credits will result in a fluctuating unpaid balance. Upon renewal, the same
terms and conditions as set forth in the note, and security documents will apply to the new
FIRST UNITED’S SECOND AMENDED MOTION FOR SUMMARY JUDGMENT AND
REQUEST FOR DECLARATORY RELIEF PAGE 3
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note.” These exhibits are incorporated in this Motion by reference as if copied herein verbatim
and for all purposes.
12. In connection with the making of the loan, White expressly represented to First
United Bank the property covered by the Deed of Trust was not his homestead. (See Exhibit 2).
13. In addition to representing to First United Bank that the property was not his
homestead, White has testified to this fact at least two times to this Court. Paragraph 10 of White’s
Original Petition specifically admits that at the time the loan was originally made the property was
not his homestead. (See Exhibit 23). White then confirmed this fact when he testified at the
Temporary Injunction hearing. (See Exhibit 22).
KEY LOAN MODIFICATIONS AND EXTENSIONS
14. Beginning September 15, 2006 and ending February 24, 2019, the parties entered
into a total of 17 Debt Modification Agreements. Loan modifications only alter those terms of the
original loan to which it refers, leaving intact those unmentioned portions of the original loan
agreement that are not inconsistent with the modification. San Felipe Rd. Ltd. P’ship v. Trafalgar
Holdings I, Ltd., 218 S.W.3d 137 (Tex.App-Hou. [14" Dist.] 2007, citing Boudreaux Civic Ass’n
vy. Cox, 882 S.W.2d 543 (Tex.App-Hou. [1* Dist.] 1994, no writ. The essential modification
agreements are attached hereto as Exhibit 5 and 6.
15. As modified by Exhibit 5, the loan was set to mature on February 1, 2009 (Exhibit
5). On April 29, 2009 White signed Exhibit 6 with an agreed effective date of December 2, 2008.
More specifically, the introductory paragraph of Exhibit 6 expressly states: “THIS
AGREEMENT (herein so called) is made and entered into as of the 2"4 day of December,
2008, by and between Lender and Borrower.” It also expressly states that “the note is secured
by a deed of trust lien dated June 24, 2005.
FIRST UNITED’S SECOND AMENDED MOTION FOR SUMMARY JUDGMENT AND
REQUEST FOR DECLARATORY RELIEF PAGE 4
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16. Between February 1, 2010 and February 24, 2019, the parties entered into 14
additional loan modification agreements (Loan Modification #s 4-17).
17. The maturity date under the 17" and last Modification Agreement was extended to
February 24, 2022 and is attached hereto as Exhibit 7. All exhibits are incorporated by reference
herein for all purposes.
DEBT IS SECURED BY DEED OF TRUST LIEN ON WHITE’S PROPERTY
18. The real property securing the revolving line of credit note was initially described
as a 9,339-acre tract commonly referred to as the 7161 Fisher Tract and the 7177 Fisher Tract.
(See Exhibit 2). The Commercial Deed of Trust given in connection with the line of credit loan
also secure as “other and additional notes, debts, obligations and liabilities of any kind or character
of Borrower now and hereafter existing and all renewals and extensions of such notes, debts.
obligations and liabilities.”
19. A partial Release of Lien was executed on February 23, 2012, releasing 2.455 acres
out of the 9.339-acre tract, leaving 6.884 acres subject to First United’s Deed of Trust Lien
(Exhibits 8 and 13).
PROCEDURAL HISTORY
20. As aresult of White’s default on the line of credit note, First United posted White’s
6.884 acres for foreclosure (Exhibit 10).
21. White then filed an application for injunctive relief seeking to enjoin First United
from foreclosing on his property and requested a Declaratory Judgment that First United’s deed of
trust lien was invalid. In his Original Complaint, White affirmatively stated that property was not
his homestead when it was pledged to First United.
FIRST UNITED’S SECOND AMENDED MOTION FOR SUMMARY JUDGMENT AND
REQUEST FOR DECLARATORY RELIEF PAGES
5612761v.1 1875/0092
22. The Court entered a temporary injunction enjoining the foreclosure of White’s
property.
23. First United filed a counterclaim against White for Breach of Contract/Suits on
Note, Fraud and for a declaration that its Deed of Trust lien is valid and enforceable.
FIRST UNITED IS ENTITLED TO A SUMMARY JUDGMENT AND
DECLARATORY JUDGMENT AS A MATTER OF LAW
24. First United seeks a judgment that White defaulted on the note obligation and that
its deed of trust lien is valid and enforceable.
25. First United is entitled to summary judgment on its breach of contract claim against
White because the undisputed facts, as established by the pleadings on file, the Affidavit of
Michael Albers, attached hereto as Exhibit 11, (“Albers Affidavit”), filed contemporaneously
herewith, and supporting summary judgment evidence and exhibits attached as exhibits to this
Motion, establish that there is no genuine issue of material fact and that White defaulted, he
received notice of the default (Exhibit 16), the debt was accelerated (Exhibit 17) and First United
has established its right to recover judgment against White for the amount due under loan.
26. First United is also entitled to a declaratory judgment that it has a valid and
enforceable deed of trust lien as the evidence establishes that the property covered by the Deed of
Trust was not White’s homestead at the time the lien was originally granted and the Deed of Trust
has remained in effect at all times since it was originally granted.
SUMMARY JUDGMENT EVIDENCE
Exhibit 1: 6/24/2005 Commercial Promissory Note and Revolving Line of Credit
executed by White
Exhibit 2: 6/24/2005 Commercial Deed of Trust, Security Agreement, Financing
Statement and Assignment of Rents executed by White
Exhibit 3: 6/24/2005 Loan Agreement executed by White
FIRST UNITED’S SECOND AMENDED MOTION FOR SUMMARY JUDGMENT AND
REQUEST FOR DECLARATORY RELIEF PAGE 6
5612761v.1 1875/0092
Exhibit 4 6/24/2005 Revolving Line of Credit executed by White
Exhibit 5 9/15/2007 Loan Modification #2 executed by White with maturity date
of February 1, 2009
Exhibit 6 4/29/2009 Loan Modification #3 executed by White with effective date
of December 2, 2008
Exhibit 7 12/24/2019 Loan Modification Agreement #17
Exhibit 8 2/23/2012 Partial Release of Lien
Exhibit 9 3/20/2020 First United’s Notice of Default and Intent to Accelerate
Exhibit 10. 6/12/2020 First United’s Notice of Substitute Trustee’s Sale
Exhibit 11 7/27/21 Affidavit of Michael Albers, Senior Vice President of First
United
Exhibit 12 7/27/21 Affidavit of Michael C. Wynne
Exhibit 13 3/26/21 Affidavit of Surveyor and attached Plat Map
Exhibit 14: 9/2/2005 Hickory Creek Commercial Promissory Note
Exhibit 15 9/1/2005 Hickory Creek Commercial Guaranty Agreement
Exhibit 16 6/4/2021 Notice of Default Letter
Exhibit 17 7/26/21 Acceleration Letter
Exhibit 18 6/2/21 Loan Statement
Exhibit 19 7/27/21 Affidavit of William Riley Nix
Exhibit 20 7/27/21 Affidavit of Jeffrey R. Seckel
Exhibit 21 11/03/21 Excerpts from Roscoe F. White, III Deposition
Exhibit 22 08/05/20 Excerpts of Roscoe F. White, III’s Testimony From
Temporary Injunction Hearing
Exhibit 23 07/02/20 Plaintiff's Verified Original Complaint
FIRST UNITED’S SECOND AMENDED MOTION FOR SUMMARY JUDGMENT AND
REQUEST FOR DECLARATORY RELIEF PAGE7
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DETAILED LOAN HISTORY
EX# DATE DOCUMENT / EVENT
1 6/24/05 Commercial Promissory Note
12/2/05 Maturity Date. Revolving line of credit. If amount owed reaches
zero all collateral remains in full force and effect.
2 6/24/05 Commercial Deed of Trust, Security Agr Financing Stmt and
Assignment of Rents between White, TRI-Properties Ltd and FUB&T.
Property securing note is described on Exhibit A as 9.339 acres.
Defines indebtedness to also include any other and additional notes,
debts, obligations and liabilities of any kind or character of Borrower
now and hereafter existing and all renewals and extensions of such
notes, debts, obligations, and liabilities. Defines Note as $3 million
note and all renewals, extensions and modifications and substitutions
for the note.
3 6/24/05 Loan Agreement between White and FUB&T. Refers to $3 Million
promissory note dated June 24, 2005. Borrower represents that he has
good title to properties with no encumbrances.
4 6/24/05 Revolving Credit Addendum to Commercial DOT, Security Agr, Fin
Stmt and Assignment of Rents dated 06/24/2005 Executed by White and
Tri-Properties Ltd in favor of FUB&T. Note is a revolving credit.
Advances and credits will result in a fluctuating unpaid balance. Upon
renewal, the same terms and conditions as set forth in note, and security
documents will apply to the new note. Same terms also apply to any notes
executed thereafter as long as a revolving credit agreement remains in
effect.
If note balance is zero, collateral securing note still in full force and
effect.
FIRST UNITED’S SECOND AMENDED MOTION FOR SUMMARY JUDGMENT AND
REQUEST FOR DECLARATORY RELIEF PAGE 8
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EX# DATE DOCUMENT / EVENT
9/2/05 Commercial Property Note 2187052
Hickory Creek, L.P. as Borrower
Effective: 09/02/2005
Maturity Date: 09/02/2008
Amount: $2,100,000.00
9/1/05 Commercial Guaranty Agreement
Hickory Creek, L.P. signed by Roscoe F. White, III
Effective: 09/01/2005
Amount: $2,100,000.00
9/15/06 Modification Agreement No. |
btw White, Tri -Properties, Ltd, and FUB&T
Maturity Date: 09/15/2007
Modification Agreement No, 2
btw White, Tri -Properties Ltd., and FUB&T
9/15/07 Maturity Date 02/01/2009
Eff. Modification Agreement No. 3
btw White, Tri-Properties Ltd. and FUB&T
12/02/08 Maturity Date: 02/01/2010
Refers to 6/24/05 $3 million note and that note is secured by deed of trust
lien dated 6/24/05 and loan agreement dated 6/24/05.
Renewing note and extending maturity date to 02/01/2010. Parties
Signed: acknowledge that outstanding principal balance of note is $0.00 (as of
4/29/09) subject to additional advances. Petition alleges this agreement
4/29/09 was entered into 2009.04.29, effective 2008.12.02 Parties agree that
afier the execution of the note (6/24/05), security documents and
statement of purpose, a substantial portion of the Property (9.339 acres)
has become White’s homestead. Parties agree that liens and security
interests shall continue until the Note and all indebtedness evidenced
thereby is paid in full.
2/1/10 Modification Agreement No. 4
Maturity Date 5/2/2010
5/2/10 Modification Agreement No. 5
Maturity Date: 05/02/2011
FIRST UNITED’S SECOND AMENDED MOTION FOR SUMMARY JUDGMENT AND
REQUEST FOR DECLARATORY RELIEF PAGE9
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EX# DATE DOCUMENT / EVENT
5/2/11 Modification Agreement No. 6
Maturity Date: 08/02/2011
8/2/11 Modification Agreement No. 7
Maturity Date: 11/02/2011
11/2/11 Modification Agreement No. 8
Maturity Date: 01/02/2012
1/2/12 Modification Agreement No. 9
Maturity Date: 01/02/2015
2/23/12 Partial Release of Lien
1/2/15 Modification Agreement No. 10
Maturity Date: 03/31/2015
3/30/15 Modification Agreement No. 11
Maturity Date: 04/30/2015
FIRST UNITED’S SECOND AMENDED MOTION FOR SUMMARY JUDGMENT AND
REQUEST FOR DECLARATORY RELIEF PAGE 10
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EX# DATE DOCUMENT / EVENT
4/30/15 Modification Agreement No. 12
Maturity Date: 07/30/2015
8/31/15 Modification Agreement No 13
7/30/15 Maturity Date: 09/30/2015
9/30/15 Modification Agreement No 14
Maturity Date: 09/30/2018
9/30/18 Modification Agreement No 15
Maturity Date: 12/24/2018
12/24/18 Modification Agreement No 16
Maturity Date: 02/24/2019
FIRST UNITED’S SECOND AMENDED MOTION FOR SUMMARY JUDGMENT AND
REQUEST FOR DECLARATORY RELIEF PAGE 11
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EX# DATE DOCUMENT / EVENT
7 2/24/19 Modification Agreement No. 17
Maturity Date: 02/24/2022
Refers to note secured by deed of trust lien dated 6/24/05. Described on
Exhibit A which refers to a 4.8-acre tract and a 2.0-acre tract also
secured by additional security as described in 6/24/05 loan agreement.
Recites that note matures on 2/24/19. Outstanding balance of
$2,659,473.99. Note renewed and maturity extended to 2/24/22. Monthly
payments of $20,649. Borrower represents that the Property (6.8 acres?)
is not part of Borrowers homestead. Liens and security interests shall
continue until the Note is paid in full. Borrower ratifies and affirms as
valid all security interests against the Property until the Note has been
paid in full. Except as modified herein, all terms of the Note and Security
Agreement remain unchanged and are expressly ratified and shall
continue in full force and effect.
9 3/20/20 First United’s Notice of Default and Intent to Accelerate
5/4/20 First United Payment Printout
10 6/12/20 Notice of Substitute Trustee’s Sale
LIEN VALID WHEN GRANTED
27. At the time White granted First United Bank a lien on the property, the property
was not his homestead. (See Exhibit 21, 22 and 23).
28. However, even in absence of such evidence, First United Bank would be entitled to
declaration that its lien is valid because the burden rests with a homestead claimant to establish the
existence of his homestead claim. Dominquez v. Casteneda, 163 SW3d 318, 330 (Tex.CivApp.
El Paso 2005). In light of White’s prior judicial admissions, he cannot meet his burden to create
a fact issue on this point.
29% If a lien is granted on non-homestead property, the lien is unaffected by the
borrower’s subsequent decision to convert the property from non-homestead property to
FIRST UNITED’S SECOND AMENDED MOTION FOR SUMMARY JUDGMENT AND
REQUEST FOR DECLARATORY RELIEF PAGE 12
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homestead property. Pappas v. Gounaris, 158 TEX 355, 311 SW2d 644,647 (Tex. 1963). A lien
validity is established at the time it is granted.
WHITE DEFAULTED
30. White defaulted in paying the amounts due under the Promissory Note and
breached the loan agreements by his failure to make the required payments under said loan
documents when due. Because of White’s default, and under the terms of the above-referenced
Promissory Note and Security Agreement and Loan Documents, First United declared said note
immediately due and payable and demanded payment of all sums due thereunder in letter dated
March 20, 2020. See Exhibit 9. First United subsequently attempted to foreclose on White’s
property See Exhibit 10. All are attached hereto and incorporated by reference for all purposes.
First United subsequently sent an amended Notice of Default letter to White (Exhibit 16) and
accelerated the debt (Exhibit 17).
LOAN BALANCE AFTER ALL PAYMENTS & CREDITS APPLIED
Sie All payments and credits have been applied to White’s loan account. As of June 2,
2021, the balance due under the loan documents (excluding attorney’s fees and collection costs)
was $2,744,662.04, with interest accruing in the amount of $467.45546 per day. This total consists
of $2,588,984.10 as the principal balance due on the Note (including forced placed insurance in
the amount of $6,571.52); $146,296.42 in accrued and unpaid interest; and $2,810.00 in late
charges, plus interest at the rate of 6.5 % per year. (See Exhibits 16, 17, and 18.)
BREACH OF CONTRACT/SUIT ON NOTE
S23 White defaulted on his loan and is in breach of his obligations to First United under
the terms of the contracts created by Exhibits 1-6, and 7.
FIRST UNITED’S SECOND AMENDED MOTION FOR SUMMARY JUDGMENT AND
REQUEST FOR DECLARATORY RELIEF PAGE 13
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DECLARATORY RELIEF
33. First United re-alleges and incorporates the previous paragraphs as though fully set
forth herein verbatim. First United brings this action against White pursuant to the Uniform
Declaratory Judgments Act, Chapter 37 of the TEXAS CIVIL PRACTICES & REMEDIES CODE for a
declaration of the rights, responsibilities, and obligations of the parties pursuant to the promissory
note, commercial deed of trust and security agreement, revolving credit addendum, and loan
modifications described above. More specifically, First United seeks a declaration that it has a
valid deed of trust lien covering White’s property.
WHITE’S ARGUMENT THAT FIRST UNITED DOES NOT HAVE A
VALID DEED OF TRUST LIEN HAS NO MERIT
34. The maturity date of Loan Modification #2 was February 1, 2009. (Exhibit 5).
Loan Modification #3 was signed on April 29, 2009, but the agreed effective date was December
2, 2008 (Exhibit 6). The crux of White’s argument is that when he signed Loan Modification #3
the loan under Loan Modification #2 had matured and had a zero balance and therefore, First
United’s lien was automatically extinguished despite the agreement of the parties. However,
White conveniently ignores the outstanding Hickory Creek loan which was cross-collateralized by
the Deed of Trust in making this claim.
FIRST UNITED HAS A VALID DEED OF TRUST LIEN BECAUSE THE
AGREED EFFECTIVE DATE OF LOAN MODIFICATION #3 WAS
PRIOR TO THE MATURITY DATE OF LOAN MODIFICATION #2
35. It is well settled law that parties to a contract may agree to give a contract a specific
effective date different from the execution date, and the effective date is controlling unless doing
so would prejudice a third party. The effective date of a contract is not the date of execution where
the contract expressly states that its terms are to take effect at an earlier date. “It is elemental that
”
contracting parties may agree to give retroactive effect... to their contracts as they may see fit.
FIRST UNITED’S SECOND AMENDED MOTION FOR SUMMARY JUDGMENT AND
REQUEST FOR DECLARATORY RELIEF PAGE 14
5612761v.1 1875/0092
Tauch V. Angel, 580 S.W.3d 808, (Tex.App.-Hou. [14" Dist.] 2019, citing Restatement (Second)
of Contracts, Williston on Contracts and Goldstein v. Ipswich Hosiery co., 104 Ga. App. 500,506
(122 SE2d 339) (1961).
36. When the parties executed Loan Modification #3 on April 29,2009, they expressly
agreed for its effective date to be December 2, 2008. It expressly states: “THIS AGREEMENT
(herein so called) is made and entered into as of the 2"! day of December 2008, by and
between Lender and Borrower.” White acknowledges that he agreed to the December 2, 2008
effective date. (See Exhibit 21). Accordingly, the Court Should give effect to the Parties
agreement.
FIRST UNITED HAS A VALID DEED OF TRUST LIEN BECAUSE
WHEN LOAN MODIFICATION #3 WAS SIGNED BY WHITE HE OWED
AN OBLIGATION AND LIABILITY TO FIRST UNITED
37. There is no contention (and certainly no evidence) in this case that the Deed of
Trust was released. Accordingly, to White’s theory, if the Court disregards the agreed loan #3
modification date, the loan would have matured on February 2, 2009 and on the date, nothing was
owed on the loan. In advancing this theory, White ignores that he had other debts and obligations
owed to First United which were cross collateralized by the Deed of Trust.
38. On or about September 2, 2005, a limited partnership called Hickory Creek, L.P.
executed a Commercial Promissory Note for $2,100,000.00 in favor of First United for a revolving
line of credit loan (See Exhibit 14). On or about September 1, 2005, White executed a Commercial
Guaranty Agreement guaranteeing the loan to Hickory Creek, L.P. (See Exhibit 15).
39. When Loan Modification #3 was signed by White, there was a loan balance of
$2,063,730.73 owed on the Hickory Creek loan, and White’s obligation to guarantee payment of
FIRST UNITED’S SECOND AMENDED MOTION FOR SUMMARY JUDGMENT AND
REQUEST FOR DECLARATORY RELIEF PAGE 15
5612761v.1 1875/0092
the Hickory Creek loan under his Commercial Guaranty Agreement was still in effect. (See
Exhibit 11).
40. The Deed of Trust executed by White in favor of First United on his $3 million
revolving line of credit loan expressly states that “its secures the $3,000,000.00 note and (d) other
and additional notes, debts, obligations and liabilities of any kind and character sesaeesees (See,
Exhibit 2, Deed of Trust, page 2, definition of indebtedness). Thus, even under White’s
defensive theory, the Deed of Trust was still in existence when Loan Modification #3 was signed.
At the time the loan modification was signed, White was liable to First United under the Hickory
Creek guaranty and, if nothing else, this obligation supported the Deed of Trust.
ATTORNEY’S FEES
41. First United re-alleges and incorporates the previous paragraphs as though fully
set forth herein verbatim.
42. White’s default and fraudulent conduct made it necessary for the Bank to place the
promissory note in question with the undersigned attorneys and agreed to pay the attorneys a
reasonable fee. The claims stated herein remain unpaid. Pursuant to Chapters 37 and 38 of the
TEXAS CIVIL PRACTICES & REMEDIES CODE, and pursuant to the loan documents, First United is
entitled to recover from White its reasonable attorney’s fees. Such fees were made necessary by
White’s breaches of the various contractual obligations described herein, and pursuant to the Texas
Declaratory Judgment Act. (See Wynne Affidavit - Exhibit 12, Nix Affidavit - Exhibit 19, and
Seckel Affidavit — Exhibit 20).
CONDITIONS PRECEDENT
43. All conditions precedent to First United’s recovery have been performed or have
occurred.
FIRST UNITED’S SECOND AMENDED MOTION FOR SUMMARY JUDGMENT AND
REQUEST FOR DECLARATORY RELIEF PAGE 16
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WHEREFORE, PREMISED CONSIDERED, First United Bank & Trust Company
prays that this Motion be granted and that it be awarded judgment against Defendant, Roscoe F.
White III for:
1) Judgment against Defendant, Roscoe F. White III, for $2,744,662.04 under the
Commercial Promissory Note (excluding attorney’s fees and collection costs) after
applying all credits and offsets, and a per diem of $467.45546 per day as of June 2,
2021;
2) A declaration that First United has a valid deed of trust lien covering White’s real
property commonly referred to as Fisher tract 7161 and Fisher tract 7177, and more
particularly described on the survey attached hereto as Exhibit 12, and is entitled
to foreclose on said property;
3) Judgment against Roscoe F. White III, for pre-judgment interest at the highest rate
allowed by law;
6) Judgment against Roscoe F. White III, for reasonable attorney’s fees incurred by
First United totaling $52,019.31.
7X Judgment against Roscoe F. White III, for all costs of court;
8) Judgment against Roscoe F. White III, for post-judgment interest at the highest rate
allowed by law; and
9) Such other and further relief, special or general, legal or equitable, as Plaintiff may
be shown to be justly entitled to receive.
FIRST UNITED’S SECOND AMENDED MOTION FOR SUMMARY JUDGMENT AND
REQUEST FOR DECLARATORY RELIEF PAGE 17
5612761v.1 1875/0092
Respectfully submitted,
/s/ Jeffrey R. Seckel [2022-02-09]
Jeff Seckel
McGuire, Craddock & Strother, P.C.
500 N. Akard Street, Suite 2200
Dallas, TX 75201
State Bar No. 17973200
Telephone: 214-954-6816
Telefax: 214-954-6800
jseckel@meslaw.com
Michael C. Wynne
WYNNE & SMITH
707 W. Washington Street
Sherman, TX 75092
State Bar No. 22110800
Telephone: 903.893.8177
Telefax: 903.892.0916
mwynne@wynnesmithlaw.com
ATTORNEYS FOR DEFENDANT AND
COUNTER-PLAINTIFF FIRST UNITED
BANK & TRUST COMPANY
CERTIFICATE OF SERVICE
I, Jeffrey R. Seckel, certify that on February 9, 2022, my office served the foregoing
document, via electronic service, facsimile or certified, return receipt requested or US Mail, on:
/s/ Jeffrey R. Seckel [2022-02-09]
JEFFREY R. SECKEL
FIRST UNITED’S SECOND AMENDED MOTION FOR SUMMARY JUDGMENT AND
REQUEST FOR DECLARATORY RELIEF PAGE 18
5612761v.1 1875/0092
loan 4-48 199.
COMMERCIAL PROMISSORY NOTE
ROSCOE F. WHITE, ID FIRST UNITED BANK AND TRUST
COMPANY
13455 Noe! Road, Suite 2300 P.O. Box 130
Dallas, Texas 75240 Durant, Oklahoma 74702-0130
Attention: Deborah Thomas
‘Beszater
called "Bocrovee") mamas
caled "reer
$3,000,000.00 June 24, 2005 December
2, 2005
Note Amount Effective Date Maturity Date
FOR VALUE RECEIVED, Borrower, jointly and severally if more than one, promises to payto
the order
of Lender (which term shall include all subsequent holders
of this Note) at its offices set forth
above or at such other address as Lender may from time to time designate, in lawful money of the United
States of America, the principal sum of MILLION AND 00/100 Dollars ($3,000,000.00),or
‘so much thereof as may be advenced and outstanding from time to time, with interest at the rate provided
below on the principal balance from time to time remaining unpaid, in the amounts, at the times and upon
the terms provided in this Note. This Note is performable in BRYAN County, Oklahoma.
REVOLVING LINE OF CREDIT, It is understood
that the indebtedness contemplated
by this
Note is a revolving credit, and that during the term of this Note (assuming no Event of Default under this
Note or any other Loan Document) the Lender may make advances at Borrower's request and Borrower
will make payments, all as provided herein, resulting in a fluctuating unpaid principal belance on the
indebtedness during the term of this Note, provided, however, that there will never be owed on this Note,
an amount greater than the principal sum of $3,000,000.00. If, by virtue of payments made on this Note,
the amount owed during its term reaches zero at any point, Borrower agrees that all collateral securing
this Note as described in the Loan Documents, shall remain in full force and effect to secure any advances
made thereafter and the Lender shall be fully entitled to rely on such collateral unless an appropriate
release of such collateral has been executed by the Lender,
If, at the maturity of this Note, the Lender elects to renew the indebtedness (it being understood that
there is no obligation on the part of the Lerider to do so), then the same terms and conditions as are set
forth herein concerning the revolving credit aspects of this Note will apply to such renewal, as long as this
revolving credit agreement remains in effect between Borrower and Lender, it being understood that the
‘Lender may terminate said arrangement at any time.
Borrower shall give Lender prior notice (in writing or by telephone) of cach request that Lender make an.
advance on this Note, in an amount and on the dates specified in such notice. Notice received by Lender
on or after 11:00 a.m, McKinney, Texas time, on the date specified, shall be deemed to be notice
specifying the next Business Day. Not later than 2,00 p.m., McKinney, Texas time, on the dates
specified, or deemed specified, subject to the terms and conditions of this Note and the other Loan
Documents, the Lender shall make available to the Borrower at the Lender's offices in McKinney, Texas,
the amount of such request by depositing same in Borrower's Operating Account at Lender.
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EX 1 Page 1 of 9
‘The transaction covered by this Note is not governed by Chapter 15 of the Texas Credit Code
INTEREST RATE, Interest shall accrue on the unpaid balance of this Note from time to time
outstanding which is not past due, calculated on a 360 day annual basis (the "Rate"), except as otherwise
provided herein, as follows:
The Jesser of (a) the Loan Rate (hereinafter defined) in effect from day to day or (b) the Highest
Lawful Rate (hereinafter defined) in effect from day to day. The term "Loan Rate" shall mean the sum of
one percent (L0%) and the Index as hereafter defined. The Loan Rate shall be subject to change daily
with changes in the Index.
Any change in either the Loan Rate or the Highest Lawful Rate shall, after Lender gives only such
notice as may be requited by applicable law or regulation, be effective for purposes of determining
the Rate as of the opening of business on the date of any such change.
The Index is The Wall Street Journal Prime Rate which is the highest rate shown as the base rate
on corporate loans posted by at least 75% of the nation’s 30 largest banks as published daily
in the
Money Rates Section of the Wall Street Journal.
The "Highest Lawful Rate" is the maximum lawful rate which maybe contracted for, charged,
taken, received, or reserved by Lender in accordance with the applicable laws of the State of
‘Oklahoma (or applicable United States federal law to the extent that it permits Lender to contract
for, charge, take, teccive or reserve a greater amount of interest than under Oklahoma law),
taking into account all charges made in connection with this loan which are treated as interest
under applicable law,
‘fat any time (i) the Loan Rate, (ii) interest on matured unpaid amounts, if applicable, as provided
for herein or in any of the other Loan Documents, together with (ili) all fees and charges, if any,
contracted for, charged, received, taken or reserved by Lender in connection with the loan
evidenced hereby which are treated as interest under applicable law (collectively, the "Charges”),
computed over the full term of this Note, exceed the Hij Lawful Rate, the rate of interest
payable hereunder, together with all Charges, shalt be limited to the Highest Lawful Rate;
provided, however, that any subsequent reduction in the Loan Rate shall not cause a reductionof
the rate of interest payable hereunder below the Highest Lawful Rate until the total amount of
interest earned hereunder, together with all Charges, equals the total amount of interest which
‘would have accrued at the Loan Rate if such interest rate had at all times been in effect. Changes
in the Loan Rate resulting from a change in the Index shall be subject to the provisions of this
paragraph.
PREPAYMENT. Borrower may prepay this Note in whole or in part at any time without being
required to pay any penalty or premium for such privilege. In the event a prepayment is made, such
payment shall be applied first against accrued but unpaid interest, then to the discharge of any expenses
for which the holder of this Note may be entitled to receive reimbursement under the terms of this Note
or under the terms of any other documents related thereto and lastly against the principal hereof, Any
partial prepayment shall not postpone the due date or change the amount of any subsequent installment
due hereunder.
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EX 1 Page 2 of 9
PAST DUE PAYMENTS. Lender may assess a charge of $10.00 times the number of days late
to cover cost of past due notices and other added expenses. In no event shal] the interest
rate and related
charges either before or after maturity be greater than permitted by law.
DISHONORED CHECK CHARGE. Lender may charge and collect a processing fee of $20.00
for each check given by Borrower to Lender as a payment on this loan which is dishonored.
PAYMENT TERMS. This Note shall be due and payable as follows:
Interest only, shallbe due and payable monthlyas it accrues, on the 2nd dayof each and every
calendar month, beginning July 2, 2005, and continuing regularly and monthly thereafter until
December 2, 2005, when the entire amount of principal and interest remaining unpaid, shall be then
due and payable.
THIS LOAN IS PAYABLE IN FULL AT MATURITY. BORROWER MUST REPAY THE
ENTIRE PRINCIPAL BALANCE OF THE LOAN AND UNPAID INTEREST THEN DUE. THE
LENDER IS UNDER NO OBLIGATION TO REFINANCE THE LOAN AT THAT TIME.
BORROWER WILL, THEREFORE, BE REQUIRED TO MAKE PAYMENT OUT OF OTHER
ASSETS THAT BORROWER MAY OWN, OR BORROWER WILL HAVE TO FIND A LENDER
WHICH MAY BE THE LENDER BORROWER HAS THIS LOAN WITH, WILLING TO LEND
BORROWER THE MONEY. IF BORROWER REFINANCES THIS LOAN AT MATURITY,
BORROWER WILL HAVE FO PAY SOME OR ALL OF THE CLOSING COSTS NORMALLY
ASSOCIATED WITH A NEW LOAN EVEN IF BORROWER OBTAINS REFINANCING FROM.
‘THE SAME LENDER, THIS LENDER WILL CONSIDER AN APPLICATION TO REFINANCE
‘THE BALLOON PAYMENT AT THE TIME PAYMENT IS DUE, ON THE SAME BASIS AS
ALL OTHER NEW MORTGAGE LOAN APPLICATIONS,
WAIVER. Except as otherwise expressly stated in any of the Loan Documents, Borrower
and any and all co-borrowers, éndorsers, guarantors, and sureties severally waive notice, notice of
intent to accelerate, notice of acceleration, demand, grace, presentment for payment, and protest and
agree that this Note and ail liens securing its payment may be extended and re-extended and the time
for payment extended and re-extended from time to time without notice to them or any of them, and
they severally agree that their liability on or with respect to this Note shall not be affected by any
release or change in any security at any time existing or by any failure to perfect or maintain
perfection of any security interest in such security.
TIME OF THE ESSENCE. 11 is agreed that time is of the essence in the performance of
this Note.
EVENTS OF DEFAULT. Each of the following events shall constitute an Event of Default:
1. Default in the timely payment of any installment of principal and interest or in the performance of
any covenant or provision of any Loan Document as hereafter defi
2. Borrower shall: (a) execute an assignment for the benefit of creditors or take any action in
furtherance thereof; or (b) admit in writing his inability to pay his debts generally as they become duc;
or (c) as a debtor, file a petition, case, proceeding, or other action pursuant to, or voluntarily
seek the
Poses
We
EX 1 Page3 of 9
benefit or benefits of any debtor relief law or take any action in furtherance thereof, or (d) seek,
acquiesce in, or suffer the appointment of a receiver, trustee, or custodian of Borrower, the Property
as herein defined, in whole or in part, or any significant portion of other property belonging to
Borrower that affects performance under this Note; or (¢) voluntarily become a party to any
proceeding seeking to effect a suspension or having the effect of suspending any of the rights of
‘Lender or the Trustee granted or referred to in the Loan Documents or take any action in furtherance
thereof.
3. The filing of a petition, case, proceeding, or other action against Borrower, as a debtor under any
debtor relief law; or seeking appointment of a receiver, trustee, or custodian of Borrower, or of any
property described in the Loan Documents or any part thereof, or of any significan t
portion of other
property belonging to Borrower, that affects its ability to perform under this Note, or seeking to
effect 2 suspension or having the
Preview
FILED 2/9/2022 4:07 PM FELICIA PITRE DISTRICT CLERK DALLAS CO., TEXAS Martin Reyes DEPUTY CAUSE NO. DC-20-09024 ROSCOE F. WHITE, III § IN THE DISTRICT COURT § Plaintiff and Counter-Defendant § 298" JUDICIAL DISTRICT vs. § FIRST UNITED BANK & TRUST § COMPANY and ELAINE EDINGER DALLAS COUNTY, TEXAS Defendants and Counter-Plaintiff § DEFENDANT FIRST UNITED’S SECOND AMENDED MOTION FOR SUMMARY JUDGMENT AND REQUEST FOR DECLARATORY JUDGMENT TO THE HONORABLE JUDGE OF SAID COURT: FIRST UNITED BANK AND TRUST COMPANY (hereinafter sometimes referred to as “Defendant,” “Counter-Plaintiff,” or “First United”), files this its Second Amended Motion for Summary Judgment and Request for Declaratory Relief against ROSCOE F. WHITE, II]; and in support thereof would respectfully show the court the following: INTRODUCTION 1 White executed a commercial promissory note, revolving line of credit loan documents, and a first lien deed of trust covering a 9.339-acre tract owned by him. First United subsequently executed a partial release covering 2.455 acres, leaving 6.884 acres subject to First United’s Deed of Trust lien. 2. This case arises from White’s breach of those loan documents and First United’s efforts to foreclose on White’s property. 3 Both parties seek a Declaratory Judgment concerning the validity and enforceability of the deed of trust lien asserted by First United. FIRST UNITED’S SECOND AMENDED MOTION FOR SUMMARY JUDGMENT AND REQUEST FOR DECLARATORY RELIEF PAGE 1 5612761v.1 1875/0092 4 The questions of law presented to the Court are: a) whether White defaulted as a matter of law; and (2) whether First United valid deed of trust lien against White’s 6.884 acres was extinguished because there was debt owing to First United on any debt during April 2009. These are questions of law for the Court that can be resolved by an order on this motion, or upon the conclusion of the bench trial currently scheduled for June 29, 2021. First United respectfully suggests that the questions presented in this motion can be accurately, efficiently and cost effectively determined by a ruling on this motion. SUMMARY OF ARGUMENT 2 White defaulted on his loan and owes First United $2,744,662.04 as of June 2, 2021 (consisting of $2,588,984.10 as the principal balance of the Note (including forced placed insurance in the amount of $6,571.52); $146,296.42 in accrued and unpaid interest; and $2,810.00 in late charges, plus interest at the rate of 6.5 % per year with a per diem of $467.45546). 6 First United has a valid deed of trust lien on 6.884 acres owned by White. Such Deed of Trust secured payment of both the commercial promissory note and any other debts, obligations on liabilities owed by White to First United Bank. d White argues that First United’s deed of trust lien was extinguished because his loan had matured and had a zero balance on the date he signed Loan Modification #3. In doing so, White ignores the guaranty obligation he owed to First United in connection with the Hickory Creek loan. FIRST UNITED’S SECOND AMENDED MOTION FOR SUMMARY JUDGMENT AND REQUEST FOR DECLARATORY RELIEF PAGE 2 5612761v.1 1875/0092 8 On the December 2, 2008 agreed effective date of Loan Modification #3, the loan had not matured; and on the April 29, 2009 execution date, the loan balance on the Hickory Creek note guaranteed by White was $1,074,330.73. 9 Even assuming arguendo that White’s note had matured and had a zero balance on the effective date of Loan Modification #3, First United nevertheless has a valid deed of trust lien because White owed a debt and obligation to First United resulting from his guaranty of a note executed by a third party, (“the Hickory Creek note.”). On the agreed effective date of Loan Modification #3, the Hickory Creek note had a balance of $1,074,330.73. LOAN HISTORY BETWEEN WHITE AND FIRST UNITED ORIGINAL LOAN 10. Attached hereto as Exhibit 1 is a copy of a Commercial Promissory Note executed by White on or about June 24, 2005, in the original principal amount of Three Million Dollars ($3,000,000.00) and payable to the order of First United. First United is the payee, owner, and holder of this Note and is entitled to enforce it. The Note expressly provides that it is a revolving line of credit and “if the amount reaches zero all collateral remains in full force and effect.” 11. To secure the debt created by the Commercial Promissory Note, White executed a Commercial Deed of Trust, Security Agreement, Financing Statement and Assignment of Rents (Exhibit 2). Importantly, the definition of indebtedness in the Commercial Deed of Trust includes “other and additional notes, debts, obligations and liabilities of any kind or character of Borrower now and hereafter existing and all renewals and extensions of such notes, debts, obligations and liabilities.” White also executed a Loan Agreement (Exhibit 3), and a Revolving Credit Addendum (Exhibit 4) which provides that “the note is a revolving line of credit. Advances and credits will result in a fluctuating unpaid balance. Upon renewal, the same terms and conditions as set forth in the note, and security documents will apply to the new FIRST UNITED’S SECOND AMENDED MOTION FOR SUMMARY JUDGMENT AND REQUEST FOR DECLARATORY RELIEF PAGE 3 5612761v.1 1875/0092 note.” These exhibits are incorporated in this Motion by reference as if copied herein verbatim and for all purposes. 12. In connection with the making of the loan, White expressly represented to First United Bank the property covered by the Deed of Trust was not his homestead. (See Exhibit 2). 13. In addition to representing to First United Bank that the property was not his homestead, White has testified to this fact at least two times to this Court. Paragraph 10 of White’s Original Petition specifically admits that at the time the loan was originally made the property was not his homestead. (See Exhibit 23). White then confirmed this fact when he testified at the Temporary Injunction hearing. (See Exhibit 22). KEY LOAN MODIFICATIONS AND EXTENSIONS 14. Beginning September 15, 2006 and ending February 24, 2019, the parties entered into a total of 17 Debt Modification Agreements. Loan modifications only alter those terms of the original loan to which it refers, leaving intact those unmentioned portions of the original loan agreement that are not inconsistent with the modification. San Felipe Rd. Ltd. P’ship v. Trafalgar Holdings I, Ltd., 218 S.W.3d 137 (Tex.App-Hou. [14" Dist.] 2007, citing Boudreaux Civic Ass’n vy. Cox, 882 S.W.2d 543 (Tex.App-Hou. [1* Dist.] 1994, no writ. The essential modification agreements are attached hereto as Exhibit 5 and 6. 15. As modified by Exhibit 5, the loan was set to mature on February 1, 2009 (Exhibit 5). On April 29, 2009 White signed Exhibit 6 with an agreed effective date of December 2, 2008. More specifically, the introductory paragraph of Exhibit 6 expressly states: “THIS AGREEMENT (herein so called) is made and entered into as of the 2"4 day of December, 2008, by and between Lender and Borrower.” It also expressly states that “the note is secured by a deed of trust lien dated June 24, 2005. FIRST UNITED’S SECOND AMENDED MOTION FOR SUMMARY JUDGMENT AND REQUEST FOR DECLARATORY RELIEF PAGE 4 5612761v.1 1875/0092 16. Between February 1, 2010 and February 24, 2019, the parties entered into 14 additional loan modification agreements (Loan Modification #s 4-17). 17. The maturity date under the 17" and last Modification Agreement was extended to February 24, 2022 and is attached hereto as Exhibit 7. All exhibits are incorporated by reference herein for all purposes. DEBT IS SECURED BY DEED OF TRUST LIEN ON WHITE’S PROPERTY 18. The real property securing the revolving line of credit note was initially described as a 9,339-acre tract commonly referred to as the 7161 Fisher Tract and the 7177 Fisher Tract. (See Exhibit 2). The Commercial Deed of Trust given in connection with the line of credit loan also secure as “other and additional notes, debts, obligations and liabilities of any kind or character of Borrower now and hereafter existing and all renewals and extensions of such notes, debts. obligations and liabilities.” 19. A partial Release of Lien was executed on February 23, 2012, releasing 2.455 acres out of the 9.339-acre tract, leaving 6.884 acres subject to First United’s Deed of Trust Lien (Exhibits 8 and 13). PROCEDURAL HISTORY 20. As aresult of White’s default on the line of credit note, First United posted White’s 6.884 acres for foreclosure (Exhibit 10). 21. White then filed an application for injunctive relief seeking to enjoin First United from foreclosing on his property and requested a Declaratory Judgment that First United’s deed of trust lien was invalid. In his Original Complaint, White affirmatively stated that property was not his homestead when it was pledged to First United. FIRST UNITED’S SECOND AMENDED MOTION FOR SUMMARY JUDGMENT AND REQUEST FOR DECLARATORY RELIEF PAGES 5612761v.1 1875/0092 22. The Court entered a temporary injunction enjoining the foreclosure of White’s property. 23. First United filed a counterclaim against White for Breach of Contract/Suits on Note, Fraud and for a declaration that its Deed of Trust lien is valid and enforceable. FIRST UNITED IS ENTITLED TO A SUMMARY JUDGMENT AND DECLARATORY JUDGMENT AS A MATTER OF LAW 24. First United seeks a judgment that White defaulted on the note obligation and that its deed of trust lien is valid and enforceable. 25. First United is entitled to summary judgment on its breach of contract claim against White because the undisputed facts, as established by the pleadings on file, the Affidavit of Michael Albers, attached hereto as Exhibit 11, (“Albers Affidavit”), filed contemporaneously herewith, and supporting summary judgment evidence and exhibits attached as exhibits to this Motion, establish that there is no genuine issue of material fact and that White defaulted, he received notice of the default (Exhibit 16), the debt was accelerated (Exhibit 17) and First United has established its right to recover judgment against White for the amount due under loan. 26. First United is also entitled to a declaratory judgment that it has a valid and enforceable deed of trust lien as the evidence establishes that the property covered by the Deed of Trust was not White’s homestead at the time the lien was originally granted and the Deed of Trust has remained in effect at all times since it was originally granted. SUMMARY JUDGMENT EVIDENCE Exhibit 1: 6/24/2005 Commercial Promissory Note and Revolving Line of Credit executed by White Exhibit 2: 6/24/2005 Commercial Deed of Trust, Security Agreement, Financing Statement and Assignment of Rents executed by White Exhibit 3: 6/24/2005 Loan Agreement executed by White FIRST UNITED’S SECOND AMENDED MOTION FOR SUMMARY JUDGMENT AND REQUEST FOR DECLARATORY RELIEF PAGE 6 5612761v.1 1875/0092 Exhibit 4 6/24/2005 Revolving Line of Credit executed by White Exhibit 5 9/15/2007 Loan Modification #2 executed by White with maturity date of February 1, 2009 Exhibit 6 4/29/2009 Loan Modification #3 executed by White with effective date of December 2, 2008 Exhibit 7 12/24/2019 Loan Modification Agreement #17 Exhibit 8 2/23/2012 Partial Release of Lien Exhibit 9 3/20/2020 First United’s Notice of Default and Intent to Accelerate Exhibit 10. 6/12/2020 First United’s Notice of Substitute Trustee’s Sale Exhibit 11 7/27/21 Affidavit of Michael Albers, Senior Vice President of First United Exhibit 12 7/27/21 Affidavit of Michael C. Wynne Exhibit 13 3/26/21 Affidavit of Surveyor and attached Plat Map Exhibit 14: 9/2/2005 Hickory Creek Commercial Promissory Note Exhibit 15 9/1/2005 Hickory Creek Commercial Guaranty Agreement Exhibit 16 6/4/2021 Notice of Default Letter Exhibit 17 7/26/21 Acceleration Letter Exhibit 18 6/2/21 Loan Statement Exhibit 19 7/27/21 Affidavit of William Riley Nix Exhibit 20 7/27/21 Affidavit of Jeffrey R. Seckel Exhibit 21 11/03/21 Excerpts from Roscoe F. White, III Deposition Exhibit 22 08/05/20 Excerpts of Roscoe F. White, III’s Testimony From Temporary Injunction Hearing Exhibit 23 07/02/20 Plaintiff's Verified Original Complaint FIRST UNITED’S SECOND AMENDED MOTION FOR SUMMARY JUDGMENT AND REQUEST FOR DECLARATORY RELIEF PAGE7 5612761v.1 1875/0092 DETAILED LOAN HISTORY EX# DATE DOCUMENT / EVENT 1 6/24/05 Commercial Promissory Note 12/2/05 Maturity Date. Revolving line of credit. If amount owed reaches zero all collateral remains in full force and effect. 2 6/24/05 Commercial Deed of Trust, Security Agr Financing Stmt and Assignment of Rents between White, TRI-Properties Ltd and FUB&T. Property securing note is described on Exhibit A as 9.339 acres. Defines indebtedness to also include any other and additional notes, debts, obligations and liabilities of any kind or character of Borrower now and hereafter existing and all renewals and extensions of such notes, debts, obligations, and liabilities. Defines Note as $3 million note and all renewals, extensions and modifications and substitutions for the note. 3 6/24/05 Loan Agreement between White and FUB&T. Refers to $3 Million promissory note dated June 24, 2005. Borrower represents that he has good title to properties with no encumbrances. 4 6/24/05 Revolving Credit Addendum to Commercial DOT, Security Agr, Fin Stmt and Assignment of Rents dated 06/24/2005 Executed by White and Tri-Properties Ltd in favor of FUB&T. Note is a revolving credit. Advances and credits will result in a fluctuating unpaid balance. Upon renewal, the same terms and conditions as set forth in note, and security documents will apply to the new note. Same terms also apply to any notes executed thereafter as long as a revolving credit agreement remains in effect. If note balance is zero, collateral securing note still in full force and effect. FIRST UNITED’S SECOND AMENDED MOTION FOR SUMMARY JUDGMENT AND REQUEST FOR DECLARATORY RELIEF PAGE 8 5612761v.1 1875/0092 EX# DATE DOCUMENT / EVENT 9/2/05 Commercial Property Note 2187052 Hickory Creek, L.P. as Borrower Effective: 09/02/2005 Maturity Date: 09/02/2008 Amount: $2,100,000.00 9/1/05 Commercial Guaranty Agreement Hickory Creek, L.P. signed by Roscoe F. White, III Effective: 09/01/2005 Amount: $2,100,000.00 9/15/06 Modification Agreement No. | btw White, Tri -Properties, Ltd, and FUB&T Maturity Date: 09/15/2007 Modification Agreement No, 2 btw White, Tri -Properties Ltd., and FUB&T 9/15/07 Maturity Date 02/01/2009 Eff. Modification Agreement No. 3 btw White, Tri-Properties Ltd. and FUB&T 12/02/08 Maturity Date: 02/01/2010 Refers to 6/24/05 $3 million note and that note is secured by deed of trust lien dated 6/24/05 and loan agreement dated 6/24/05. Renewing note and extending maturity date to 02/01/2010. Parties Signed: acknowledge that outstanding principal balance of note is $0.00 (as of 4/29/09) subject to additional advances. Petition alleges this agreement 4/29/09 was entered into 2009.04.29, effective 2008.12.02 Parties agree that afier the execution of the note (6/24/05), security documents and statement of purpose, a substantial portion of the Property (9.339 acres) has become White’s homestead. Parties agree that liens and security interests shall continue until the Note and all indebtedness evidenced thereby is paid in full. 2/1/10 Modification Agreement No. 4 Maturity Date 5/2/2010 5/2/10 Modification Agreement No. 5 Maturity Date: 05/02/2011 FIRST UNITED’S SECOND AMENDED MOTION FOR SUMMARY JUDGMENT AND REQUEST FOR DECLARATORY RELIEF PAGE9 5612761v.1 1875/0092 EX# DATE DOCUMENT / EVENT 5/2/11 Modification Agreement No. 6 Maturity Date: 08/02/2011 8/2/11 Modification Agreement No. 7 Maturity Date: 11/02/2011 11/2/11 Modification Agreement No. 8 Maturity Date: 01/02/2012 1/2/12 Modification Agreement No. 9 Maturity Date: 01/02/2015 2/23/12 Partial Release of Lien 1/2/15 Modification Agreement No. 10 Maturity Date: 03/31/2015 3/30/15 Modification Agreement No. 11 Maturity Date: 04/30/2015 FIRST UNITED’S SECOND AMENDED MOTION FOR SUMMARY JUDGMENT AND REQUEST FOR DECLARATORY RELIEF PAGE 10 5612761v.1 1875/0092 EX# DATE DOCUMENT / EVENT 4/30/15 Modification Agreement No. 12 Maturity Date: 07/30/2015 8/31/15 Modification Agreement No 13 7/30/15 Maturity Date: 09/30/2015 9/30/15 Modification Agreement No 14 Maturity Date: 09/30/2018 9/30/18 Modification Agreement No 15 Maturity Date: 12/24/2018 12/24/18 Modification Agreement No 16 Maturity Date: 02/24/2019 FIRST UNITED’S SECOND AMENDED MOTION FOR SUMMARY JUDGMENT AND REQUEST FOR DECLARATORY RELIEF PAGE 11 5612761v.1 1875/0092 EX# DATE DOCUMENT / EVENT 7 2/24/19 Modification Agreement No. 17 Maturity Date: 02/24/2022 Refers to note secured by deed of trust lien dated 6/24/05. Described on Exhibit A which refers to a 4.8-acre tract and a 2.0-acre tract also secured by additional security as described in 6/24/05 loan agreement. Recites that note matures on 2/24/19. Outstanding balance of $2,659,473.99. Note renewed and maturity extended to 2/24/22. Monthly payments of $20,649. Borrower represents that the Property (6.8 acres?) is not part of Borrowers homestead. Liens and security interests shall continue until the Note is paid in full. Borrower ratifies and affirms as valid all security interests against the Property until the Note has been paid in full. Except as modified herein, all terms of the Note and Security Agreement remain unchanged and are expressly ratified and shall continue in full force and effect. 9 3/20/20 First United’s Notice of Default and Intent to Accelerate 5/4/20 First United Payment Printout 10 6/12/20 Notice of Substitute Trustee’s Sale LIEN VALID WHEN GRANTED 27. At the time White granted First United Bank a lien on the property, the property was not his homestead. (See Exhibit 21, 22 and 23). 28. However, even in absence of such evidence, First United Bank would be entitled to declaration that its lien is valid because the burden rests with a homestead claimant to establish the existence of his homestead claim. Dominquez v. Casteneda, 163 SW3d 318, 330 (Tex.CivApp. El Paso 2005). In light of White’s prior judicial admissions, he cannot meet his burden to create a fact issue on this point. 29% If a lien is granted on non-homestead property, the lien is unaffected by the borrower’s subsequent decision to convert the property from non-homestead property to FIRST UNITED’S SECOND AMENDED MOTION FOR SUMMARY JUDGMENT AND REQUEST FOR DECLARATORY RELIEF PAGE 12 5612761v.1 1875/0092 homestead property. Pappas v. Gounaris, 158 TEX 355, 311 SW2d 644,647 (Tex. 1963). A lien validity is established at the time it is granted. WHITE DEFAULTED 30. White defaulted in paying the amounts due under the Promissory Note and breached the loan agreements by his failure to make the required payments under said loan documents when due. Because of White’s default, and under the terms of the above-referenced Promissory Note and Security Agreement and Loan Documents, First United declared said note immediately due and payable and demanded payment of all sums due thereunder in letter dated March 20, 2020. See Exhibit 9. First United subsequently attempted to foreclose on White’s property See Exhibit 10. All are attached hereto and incorporated by reference for all purposes. First United subsequently sent an amended Notice of Default letter to White (Exhibit 16) and accelerated the debt (Exhibit 17). LOAN BALANCE AFTER ALL PAYMENTS & CREDITS APPLIED Sie All payments and credits have been applied to White’s loan account. As of June 2, 2021, the balance due under the loan documents (excluding attorney’s fees and collection costs) was $2,744,662.04, with interest accruing in the amount of $467.45546 per day. This total consists of $2,588,984.10 as the principal balance due on the Note (including forced placed insurance in the amount of $6,571.52); $146,296.42 in accrued and unpaid interest; and $2,810.00 in late charges, plus interest at the rate of 6.5 % per year. (See Exhibits 16, 17, and 18.) BREACH OF CONTRACT/SUIT ON NOTE S23 White defaulted on his loan and is in breach of his obligations to First United under the terms of the contracts created by Exhibits 1-6, and 7. FIRST UNITED’S SECOND AMENDED MOTION FOR SUMMARY JUDGMENT AND REQUEST FOR DECLARATORY RELIEF PAGE 13 5612761v.1 1875/0092 DECLARATORY RELIEF 33. First United re-alleges and incorporates the previous paragraphs as though fully set forth herein verbatim. First United brings this action against White pursuant to the Uniform Declaratory Judgments Act, Chapter 37 of the TEXAS CIVIL PRACTICES & REMEDIES CODE for a declaration of the rights, responsibilities, and obligations of the parties pursuant to the promissory note, commercial deed of trust and security agreement, revolving credit addendum, and loan modifications described above. More specifically, First United seeks a declaration that it has a valid deed of trust lien covering White’s property. WHITE’S ARGUMENT THAT FIRST UNITED DOES NOT HAVE A VALID DEED OF TRUST LIEN HAS NO MERIT 34. The maturity date of Loan Modification #2 was February 1, 2009. (Exhibit 5). Loan Modification #3 was signed on April 29, 2009, but the agreed effective date was December 2, 2008 (Exhibit 6). The crux of White’s argument is that when he signed Loan Modification #3 the loan under Loan Modification #2 had matured and had a zero balance and therefore, First United’s lien was automatically extinguished despite the agreement of the parties. However, White conveniently ignores the outstanding Hickory Creek loan which was cross-collateralized by the Deed of Trust in making this claim. FIRST UNITED HAS A VALID DEED OF TRUST LIEN BECAUSE THE AGREED EFFECTIVE DATE OF LOAN MODIFICATION #3 WAS PRIOR TO THE MATURITY DATE OF LOAN MODIFICATION #2 35. It is well settled law that parties to a contract may agree to give a contract a specific effective date different from the execution date, and the effective date is controlling unless doing so would prejudice a third party. The effective date of a contract is not the date of execution where the contract expressly states that its terms are to take effect at an earlier date. “It is elemental that ” contracting parties may agree to give retroactive effect... to their contracts as they may see fit. FIRST UNITED’S SECOND AMENDED MOTION FOR SUMMARY JUDGMENT AND REQUEST FOR DECLARATORY RELIEF PAGE 14 5612761v.1 1875/0092 Tauch V. Angel, 580 S.W.3d 808, (Tex.App.-Hou. [14" Dist.] 2019, citing Restatement (Second) of Contracts, Williston on Contracts and Goldstein v. Ipswich Hosiery co., 104 Ga. App. 500,506 (122 SE2d 339) (1961). 36. When the parties executed Loan Modification #3 on April 29,2009, they expressly agreed for its effective date to be December 2, 2008. It expressly states: “THIS AGREEMENT (herein so called) is made and entered into as of the 2"! day of December 2008, by and between Lender and Borrower.” White acknowledges that he agreed to the December 2, 2008 effective date. (See Exhibit 21). Accordingly, the Court Should give effect to the Parties agreement. FIRST UNITED HAS A VALID DEED OF TRUST LIEN BECAUSE WHEN LOAN MODIFICATION #3 WAS SIGNED BY WHITE HE OWED AN OBLIGATION AND LIABILITY TO FIRST UNITED 37. There is no contention (and certainly no evidence) in this case that the Deed of Trust was released. Accordingly, to White’s theory, if the Court disregards the agreed loan #3 modification date, the loan would have matured on February 2, 2009 and on the date, nothing was owed on the loan. In advancing this theory, White ignores that he had other debts and obligations owed to First United which were cross collateralized by the Deed of Trust. 38. On or about September 2, 2005, a limited partnership called Hickory Creek, L.P. executed a Commercial Promissory Note for $2,100,000.00 in favor of First United for a revolving line of credit loan (See Exhibit 14). On or about September 1, 2005, White executed a Commercial Guaranty Agreement guaranteeing the loan to Hickory Creek, L.P. (See Exhibit 15). 39. When Loan Modification #3 was signed by White, there was a loan balance of $2,063,730.73 owed on the Hickory Creek loan, and White’s obligation to guarantee payment of FIRST UNITED’S SECOND AMENDED MOTION FOR SUMMARY JUDGMENT AND REQUEST FOR DECLARATORY RELIEF PAGE 15 5612761v.1 1875/0092 the Hickory Creek loan under his Commercial Guaranty Agreement was still in effect. (See Exhibit 11). 40. The Deed of Trust executed by White in favor of First United on his $3 million revolving line of credit loan expressly states that “its secures the $3,000,000.00 note and (d) other and additional notes, debts, obligations and liabilities of any kind and character sesaeesees (See, Exhibit 2, Deed of Trust, page 2, definition of indebtedness). Thus, even under White’s defensive theory, the Deed of Trust was still in existence when Loan Modification #3 was signed. At the time the loan modification was signed, White was liable to First United under the Hickory Creek guaranty and, if nothing else, this obligation supported the Deed of Trust. ATTORNEY’S FEES 41. First United re-alleges and incorporates the previous paragraphs as though fully set forth herein verbatim. 42. White’s default and fraudulent conduct made it necessary for the Bank to place the promissory note in question with the undersigned attorneys and agreed to pay the attorneys a reasonable fee. The claims stated herein remain unpaid. Pursuant to Chapters 37 and 38 of the TEXAS CIVIL PRACTICES & REMEDIES CODE, and pursuant to the loan documents, First United is entitled to recover from White its reasonable attorney’s fees. Such fees were made necessary by White’s breaches of the various contractual obligations described herein, and pursuant to the Texas Declaratory Judgment Act. (See Wynne Affidavit - Exhibit 12, Nix Affidavit - Exhibit 19, and Seckel Affidavit — Exhibit 20). CONDITIONS PRECEDENT 43. All conditions precedent to First United’s recovery have been performed or have occurred. FIRST UNITED’S SECOND AMENDED MOTION FOR SUMMARY JUDGMENT AND REQUEST FOR DECLARATORY RELIEF PAGE 16 5612761v.1 1875/0092 WHEREFORE, PREMISED CONSIDERED, First United Bank & Trust Company prays that this Motion be granted and that it be awarded judgment against Defendant, Roscoe F. White III for: 1) Judgment against Defendant, Roscoe F. White III, for $2,744,662.04 under the Commercial Promissory Note (excluding attorney’s fees and collection costs) after applying all credits and offsets, and a per diem of $467.45546 per day as of June 2, 2021; 2) A declaration that First United has a valid deed of trust lien covering White’s real property commonly referred to as Fisher tract 7161 and Fisher tract 7177, and more particularly described on the survey attached hereto as Exhibit 12, and is entitled to foreclose on said property; 3) Judgment against Roscoe F. White III, for pre-judgment interest at the highest rate allowed by law; 6) Judgment against Roscoe F. White III, for reasonable attorney’s fees incurred by First United totaling $52,019.31. 7X Judgment against Roscoe F. White III, for all costs of court; 8) Judgment against Roscoe F. White III, for post-judgment interest at the highest rate allowed by law; and 9) Such other and further relief, special or general, legal or equitable, as Plaintiff may be shown to be justly entitled to receive. FIRST UNITED’S SECOND AMENDED MOTION FOR SUMMARY JUDGMENT AND REQUEST FOR DECLARATORY RELIEF PAGE 17 5612761v.1 1875/0092 Respectfully submitted, /s/ Jeffrey R. Seckel [2022-02-09] Jeff Seckel McGuire, Craddock & Strother, P.C. 500 N. Akard Street, Suite 2200 Dallas, TX 75201 State Bar No. 17973200 Telephone: 214-954-6816 Telefax: 214-954-6800 jseckel@meslaw.com Michael C. Wynne WYNNE & SMITH 707 W. Washington Street Sherman, TX 75092 State Bar No. 22110800 Telephone: 903.893.8177 Telefax: 903.892.0916 mwynne@wynnesmithlaw.com ATTORNEYS FOR DEFENDANT AND COUNTER-PLAINTIFF FIRST UNITED BANK & TRUST COMPANY CERTIFICATE OF SERVICE I, Jeffrey R. Seckel, certify that on February 9, 2022, my office served the foregoing document, via electronic service, facsimile or certified, return receipt requested or US Mail, on: /s/ Jeffrey R. Seckel [2022-02-09] JEFFREY R. SECKEL FIRST UNITED’S SECOND AMENDED MOTION FOR SUMMARY JUDGMENT AND REQUEST FOR DECLARATORY RELIEF PAGE 18 5612761v.1 1875/0092 loan 4-48 199. COMMERCIAL PROMISSORY NOTE ROSCOE F. WHITE, ID FIRST UNITED BANK AND TRUST COMPANY 13455 Noe! Road, Suite 2300 P.O. Box 130 Dallas, Texas 75240 Durant, Oklahoma 74702-0130 Attention: Deborah Thomas ‘Beszater called "Bocrovee") mamas caled "reer $3,000,000.00 June 24, 2005 December 2, 2005 Note Amount Effective Date Maturity Date FOR VALUE RECEIVED, Borrower, jointly and severally if more than one, promises to payto the order of Lender (which term shall include all subsequent holders of this Note) at its offices set forth above or at such other address as Lender may from time to time designate, in lawful money of the United States of America, the principal sum of MILLION AND 00/100 Dollars ($3,000,000.00),or ‘so much thereof as may be advenced and outstanding from time to time, with interest at the rate provided below on the principal balance from time to time remaining unpaid, in the amounts, at the times and upon the terms provided in this Note. This Note is performable in BRYAN County, Oklahoma. REVOLVING LINE OF CREDIT, It is understood that the indebtedness contemplated by this Note is a revolving credit, and that during the term of this Note (assuming no Event of Default under this Note or any other Loan Document) the Lender may make advances at Borrower's request and Borrower will make payments, all as provided herein, resulting in a fluctuating unpaid principal belance on the indebtedness during the term of this Note, provided, however, that there will never be owed on this Note, an amount greater than the principal sum of $3,000,000.00. If, by virtue of payments made on this Note, the amount owed during its term reaches zero at any point, Borrower agrees that all collateral securing this Note as described in the Loan Documents, shall remain in full force and effect to secure any advances made thereafter and the Lender shall be fully entitled to rely on such collateral unless an appropriate release of such collateral has been executed by the Lender, If, at the maturity of this Note, the Lender elects to renew the indebtedness (it being understood that there is no obligation on the part of the Lerider to do so), then the same terms and conditions as are set forth herein concerning the revolving credit aspects of this Note will apply to such renewal, as long as this revolving credit agreement remains in effect between Borrower and Lender, it being understood that the ‘Lender may terminate said arrangement at any time. Borrower shall give Lender prior notice (in writing or by telephone) of cach request that Lender make an. advance on this Note, in an amount and on the dates specified in such notice. Notice received by Lender on or after 11:00 a.m, McKinney, Texas time, on the date specified, shall be deemed to be notice specifying the next Business Day. Not later than 2,00 p.m., McKinney, Texas time, on the dates specified, or deemed specified, subject to the terms and conditions of this Note and the other Loan Documents, the Lender shall make available to the Borrower at the Lender's offices in McKinney, Texas, the amount of such request by depositing same in Borrower's Operating Account at Lender. etwas veite\1O0eR oan agen Poot aE EX 1 Page 1 of 9 ‘The transaction covered by this Note is not governed by Chapter 15 of the Texas Credit Code INTEREST RATE, Interest shall accrue on the unpaid balance of this Note from time to time outstanding which is not past due, calculated on a 360 day annual basis (the "Rate"), except as otherwise provided herein, as follows: The Jesser of (a) the Loan Rate (hereinafter defined) in effect from day to day or (b) the Highest Lawful Rate (hereinafter defined) in effect from day to day. The term "Loan Rate" shall mean the sum of one percent (L0%) and the Index as hereafter defined. The Loan Rate shall be subject to change daily with changes in the Index. Any change in either the Loan Rate or the Highest Lawful Rate shall, after Lender gives only such notice as may be requited by applicable law or regulation, be effective for purposes of determining the Rate as of the opening of business on the date of any such change. The Index is The Wall Street Journal Prime Rate which is the highest rate shown as the base rate on corporate loans posted by at least 75% of the nation’s 30 largest banks as published daily in the Money Rates Section of the Wall Street Journal. The "Highest Lawful Rate" is the maximum lawful rate which maybe contracted for, charged, taken, received, or reserved by Lender in accordance with the applicable laws of the State of ‘Oklahoma (or applicable United States federal law to the extent that it permits Lender to contract for, charge, take, teccive or reserve a greater amount of interest than under Oklahoma law), taking into account all charges made in connection with this loan which are treated as interest under applicable law, ‘fat any time (i) the Loan Rate, (ii) interest on matured unpaid amounts, if applicable, as provided for herein or in any of the other Loan Documents, together with (ili) all fees and charges, if any, contracted for, charged, received, taken or reserved by Lender in connection with the loan evidenced hereby which are treated as interest under applicable law (collectively, the "Charges”), computed over the full term of this Note, exceed the Hij Lawful Rate, the rate of interest payable hereunder, together with all Charges, shalt be limited to the Highest Lawful Rate; provided, however, that any subsequent reduction in the Loan Rate shall not cause a reductionof the rate of interest payable hereunder below the Highest Lawful Rate until the total amount of interest earned hereunder, together with all Charges, equals the total amount of interest which ‘would have accrued at the Loan Rate if such interest rate had at all times been in effect. Changes in the Loan Rate resulting from a change in the Index shall be subject to the provisions of this paragraph. PREPAYMENT. Borrower may prepay this Note in whole or in part at any time without being required to pay any penalty or premium for such privilege. In the event a prepayment is made, such payment shall be applied first against accrued but unpaid interest, then to the discharge of any expenses for which the holder of this Note may be entitled to receive reimbursement under the terms of this Note or under the terms of any other documents related thereto and lastly against the principal hereof, Any partial prepayment shall not postpone the due date or change the amount of any subsequent installment due hereunder. har ceatetahih 00624 age Paga2 a EX 1 Page 2 of 9 PAST DUE PAYMENTS. Lender may assess a charge of $10.00 times the number of days late to cover cost of past due notices and other added expenses. In no event shal] the interest rate and related charges either before or after maturity be greater than permitted by law. DISHONORED CHECK CHARGE. Lender may charge and collect a processing fee of $20.00 for each check given by Borrower to Lender as a payment on this loan which is dishonored. PAYMENT TERMS. This Note shall be due and payable as follows: Interest only, shallbe due and payable monthlyas it accrues, on the 2nd dayof each and every calendar month, beginning July 2, 2005, and continuing regularly and monthly thereafter until December 2, 2005, when the entire amount of principal and interest remaining unpaid, shall be then due and payable. THIS LOAN IS PAYABLE IN FULL AT MATURITY. BORROWER MUST REPAY THE ENTIRE PRINCIPAL BALANCE OF THE LOAN AND UNPAID INTEREST THEN DUE. THE LENDER IS UNDER NO OBLIGATION TO REFINANCE THE LOAN AT THAT TIME. BORROWER WILL, THEREFORE, BE REQUIRED TO MAKE PAYMENT OUT OF OTHER ASSETS THAT BORROWER MAY OWN, OR BORROWER WILL HAVE TO FIND A LENDER WHICH MAY BE THE LENDER BORROWER HAS THIS LOAN WITH, WILLING TO LEND BORROWER THE MONEY. IF BORROWER REFINANCES THIS LOAN AT MATURITY, BORROWER WILL HAVE FO PAY SOME OR ALL OF THE CLOSING COSTS NORMALLY ASSOCIATED WITH A NEW LOAN EVEN IF BORROWER OBTAINS REFINANCING FROM. ‘THE SAME LENDER, THIS LENDER WILL CONSIDER AN APPLICATION TO REFINANCE ‘THE BALLOON PAYMENT AT THE TIME PAYMENT IS DUE, ON THE SAME BASIS AS ALL OTHER NEW MORTGAGE LOAN APPLICATIONS, WAIVER. Except as otherwise expressly stated in any of the Loan Documents, Borrower and any and all co-borrowers, éndorsers, guarantors, and sureties severally waive notice, notice of intent to accelerate, notice of acceleration, demand, grace, presentment for payment, and protest and agree that this Note and ail liens securing its payment may be extended and re-extended and the time for payment extended and re-extended from time to time without notice to them or any of them, and they severally agree that their liability on or with respect to this Note shall not be affected by any release or change in any security at any time existing or by any failure to perfect or maintain perfection of any security interest in such security. TIME OF THE ESSENCE. 11 is agreed that time is of the essence in the performance of this Note. EVENTS OF DEFAULT. Each of the following events shall constitute an Event of Default: 1. Default in the timely payment of any installment of principal and interest or in the performance of any covenant or provision of any Loan Document as hereafter defi 2. Borrower shall: (a) execute an assignment for the benefit of creditors or take any action in furtherance thereof; or (b) admit in writing his inability to pay his debts generally as they become duc; or (c) as a debtor, file a petition, case, proceeding, or other action pursuant to, or voluntarily seek the Poses We EX 1 Page3 of 9 benefit or benefits of any debtor relief law or take any action in furtherance thereof, or (d) seek, acquiesce in, or suffer the appointment of a receiver, trustee, or custodian of Borrower, the Property as herein defined, in whole or in part, or any significant portion of other property belonging to Borrower that affects performance under this Note; or (¢) voluntarily become a party to any proceeding seeking to effect a suspension or having the effect of suspending any of the rights of ‘Lender or the Trustee granted or referred to in the Loan Documents or take any action in furtherance thereof. 3. The filing of a petition, case, proceeding, or other action against Borrower, as a debtor under any debtor relief law; or seeking appointment of a receiver, trustee, or custodian of Borrower, or of any property described in the Loan Documents or any part thereof, or of any significan t portion of other property belonging to Borrower, that affects its ability to perform under this Note, or seeking to effect 2 suspension or having the