Agreement of Understanding Between Rampart
Properties Corporation and The New
Property Owner's Association of
Newport, Inc.
Presently. the New Property Owner's Association of Newport, Inc. (the "NPOAN) is
engaged in several litigation matters (the "NPOAN Claims") with the Chapter 7
Trustee (the "Trustee") appointed in Case No. 97-4083-H1-11 in The United States
Bankruptcy Court For the Southern District of Texas Houston Division ( the
"Court,), and in such matter, the Trustee has asserted various claims against
the NPOAN (the "Trustee Claims").
Rampart Properties Corporation (Rampart Properties Corporation or its transfer
and assigns, which are to be affiliates of Rampart Properties Corporation, shall
be hereinafter referred to as Rampart has entered into a Purchase and Sale
Agreement ( the "Purchase and Sale Agreement") with the, Trustee to purchase all
of the assets of the Estate free and clear of all liens, claims and encumbrances
in accordance with the Trustee's First Amended Liquidating Chapter 11 Plan (the
"Plan") The Trustee has also agreed to transfer to Rampart the Trustee Claims.
Until this date, the NPOAN has opposed the, Plan.
To induce the NPOAN to support the Plan, Rampart has agreed to, among other
things, settle and discharge the Trustee Claims.
To induce Rampart to consummate the purchase of the Estate with the Trustee,
NPOAN has agreed to among other things, settle and discharge the NPOAN Claims.
Now Therefore, for valuable consideration, the receipt and sufficiency of which
are hereby acknowledged Rampart and the NPOAN hereby agree as follows:
1. Each Rampart and the NPOAN agree to execute reasonable settlement documents
acceptable to each patty which mutually release, extinguish and discharge,
forever, each party from any and all past acts, obligations, ditties oi-
indebtedness in ;my way relating to the Trustee Claims or the NPOAN Claims as
applicable and which dismiss all on going litigation relating thereto, with
prejudice,
2. Rampart agrees to assign, set over and transfer all of its rights and
obligations relating to the collection of fixture property assessments and fees
for the entire Newport subdivision ("Newport") the plat of which is attached
hereto as Exhibit "A" (the Newport Plat"),which it has, if any, and the NPOAN
agrees to assume all obligations and duties arising on or after the effective
date of this agreement of Rampart and the previous developer in connection with
the security, improvement, maintenance, beautification and other matters
relating to the daily operation of the common areas of the subdivision. In this
regard, NPOAN agrees to operate and maintain Newport as a first class
subdivision in the suburban Houston, Texas market place. Without in any way
limiting the generality of the foregoing, NPOAN agrees to spend up to $150,000
as soon as is reasonably possible to improve, upgrade, maintain and bring into
good operating status and condition the following items:
a. The pumps, fountains and lighting located within the ponds at the
main entrance to Newport.
b. The pumps, skimmers, docking and finish of the swimming pool located
adjacent the golf club house and the landscaping and fencing associated
therewith.
c. The surface and netting of the tennis courts located adjacent the
golf club house and the landscaping and fencing associated therewith.
d. The small service parking located adjacent to the c and c ("b, c and
d shall be collectively referred to herein as the "Swimming Recreation Area"),
e. Grading and where appropriate resurfacing of the easements containing
road access to the San Jacinto River and to Lake Houston.
3. Notwithstanding any provisions to the contrary in paragraph 2 above, Rampart
shall maintain its rights, privileges and authority to enforce the collection of
all delinquent assessments and fee assigned to Rampart by the Trustee under the
terms of the Plan including, without limitation, the rights and powers of
foreclosure,
4. The NPOAN shall amend its bylaws to provide that as long as Rampart owns more
then 50 lots or more then 15 acres within Newport, Rampart shall be allowed to
appoint one board member to the board of directors of the NPOAN.
5. Rampart agrees to transfer to the NPOAN fee title where applicable or
alternatively all of its rights, title or interest it may have, if any, in and
to the real property or real property rights as applicable, delineated on the
Newport Plat and generally described as follows:
a. The Swimming Recreation Area;
b. The areas described as restricted recreational reserves; c The
easement rights relating to road access to the river and lake;
d. Any rights relating to access to or control over the horse stables
and boat storage areas; and e. Permanent easement rights to the ponds
located at the main entrance.
6. NPOAN agrees to pay to Rampart $850,000 plus interest (hereon upon the
following terms and conditions:
a. NPOAN shall execute a promissory note payable to the order of
Rampart in the original principal amount of $850,000. The note shall bear
interest at 10% per annum and shall be payable monthly based upon a full
amortization over 120 months. The monthly payments will consist of 119 monthly
payments of $11,286 with the final payment equal to the remaining outstanding
principal balance plus accrued and unpaid interest due at that time.
b. The note will be secured by a first lien deed of trust and purchase
money lien in and to all property and property rights transferred to
the NPOAN by Rampart as set forth in paragraph 5 above. In addition,
Rampart will be granted a collateral assignment of the NPOAN'S rights
to collect assessments from the Newport property owners.
7. In addition to the rights of Rampart to the existing delinquent accounts
referred to in paragraph 3, Rampart shall have the right to buy from the NPOAN
any and all past due claims which N'POAN may have against certain owners of
unimproved lots within Newport after the time NPOAN files a lien against their
property and prior to foreclosure. The purchase price shall be the amount of the
past due assessments. NPOAN agrees it will give Rampart written notice of its
intent to foreclose at least ten business days prior the initiation of such
proceedings. On any claims purchased by Rampart, NPOAN shall assign all rights
it may have in and to such claim to Rampart. Currently the NPOAN has assigned
several foreclosure matters to an attorney for collection on a contingency
basis. NPOAN agrees to assist Rampart in obtaining such matters from the
attorney and assigning such claims to Rampart. Rampart agrees to reimburse the
attorney a reasonable amount for his efforts to date.
8. Any lots or real property obtained by Rampart, now or in the future, shall
enjoy an indefinite waiver of fees and assessments of the NPOAN as long as such
lots or real property are owned by Rampart. Any builder to whom Rampart sells a
lot or lot shall have up to a 24 month deferral of fees and assessments of the
NPOAN. Such deferred fees or assessments shall be payable upon the sale of a lot
to a home buyer or a retail purchaser. Any retail purchaser shall be subject to
fees and assessments in accordance with the subdivision ordinances
9. The NPOAN agrees to allow users of the golf facilities, club house and other
facilities related thereto and their families access to the Swimming Recreation
Area for $1.00 per day per person.
10. Rampart and its officers and employees and each of their respective
immediate families, shall have unrestricted access to areas described in and of
paragraph 5 other than rights to the boat storage.
11. NPOAN agrees to join Rampart in a letter writing campaign, press releases
and other items announcing the resolution of existing litigation and a new
beginning for Newport. If requested by Rampart, the NPOAN will join Rampart with
the ongoing promotion of Newport upon terms reasonably satisfactory to both
parties.
12. By executing this agreement, each patty represents and warrants that it is
authorized to execute this document by all applicable laws and regulations and
that this document is enforceable against such party in accordance with the
terms hereof.
13. This document may be executed in any number of counterparts, each of which
shall be deemed an original but all of which shall be deemed one and the same
document. Facsimilie copies of a signature may be deemed an original for all
purposes,
14. Each Rampart and the NPOAN agree to execute whatever documents, instruments
and
agreements requested by the other party hereto which are reasonable necessary to
memorialiize and effectuate the terms and conditions of the parties set forth
herein.
15. 1-his agreement is contingent upon (i) settlement of the disputes betw6sh
the Trustee and the NPOAN regarding NPOAN's unsecured and administrative claims
and (ii) confirmation of the Plan.
16. Rampart and any successor builder or developer shall assign any all voting
rights they have in connection with the ownership of unimproved lots to the
NPOAN.
Executed this 21 st day of January, 1999.
New Property Owners Association of Newport Inc.
By: /s/ Darrell Guidry By: /s/ Jimmy R. Hembree
Name: Darrell Guidry Name: Jimmy R Hembree
By: /s/ Daniel J. Kasarzak By: /s/ Wilson B. Gravitt
Name Daniel J. Kasarzak Name Wilson B. Gravitt
Rampart Properties Corporation By: /s/ Shannon Spears
Shannon Spears
/s/ J. H. Carpenter Vice-President Director
J. H. Carpenter
President By: /s/ Erwin T. Walker
Erwin T. Walker, Director