Document:

exv10w1

 

Exhibit 10.1

EXCHANGE AGREEMENT 

This EXCHANGE AGREEMENT is entered into as of the 1st day of July, 2006 by and among
PERFORMANCE HOME BUYERS LLC, an Ohio limited liability company (“Borrower”) and KENNETH O.
HUNTINGDON (“Lender”).

WHEREAS, effective as of the date hereof, Borrower has purchased certain real estate from Lender
pursuant to the terms of a certain Real Estate Purchase Agreement between Borrower and Lender
(“Purchase Agreement”), and in accordance with the terms of such Purchase Agreement, Borrower has
executed and delivered to Lender a Promissory Note with a face amount of $170,000.00 maturing July
1, 2011 (“Real Estate Note”).

WHEREAS, Borrower and Lender have agreed that Lender will transfer to Borrower $300,000.00 of
Subordinated Debt Units issued by Borrower, along with accrued interest of $57,312.33, in exchange
for a 6% Promissory Note with a face amount of $357,312.33 maturing on July 1, 2007 (“$357,312
Note”).

WHEREAS, Borrower and Lender have agreed that Lender will transfer to Borrower $200,000.00 of Class
B Preferred Units issued by Borrower, along with accrued but unpaid distributions of $78,000 in
exchange for a 6% Promissory Note with a face amount of $278,000.00 maturing on July 1, 2008
(“$278,000 Note”).

WHEREAS, Borrower and Lender have agreed that Lender will transfer to Borrower $250,000.00 of
Subordinated Debt Units issued by Borrower, along with accrued interest of $25,451.22 in exchange
for a 6% Promissory Note with a face amount of $275,451.22 maturing on July 1, 2009 (“$275,451
Note”).

WHEREAS, upon consummation of the transactions contemplated by the Purchase Agreement and this
Exchange Agreement, Lender will no longer own any Subordinated Debt Units or Class B Preferred
Units of Borrower, and Lender’s only interest in Borrower will be as the holder of the $170,000
Note, the $357,312 Note, the $278,000 Note and the $275,451 Note (collectively, the “Huntingdon
Notes”).

NOW THEREFORE, in consideration of the mutual promises, agreements, representations and warranties
set forth herein, the parties do hereby agree as follows:

     1. $357,312 Note. On the date hereof: (a) Borrower shall execute and deliver the
$357,312 Note to Lender; and (b) Lender shall deliver to Borrower the instruments evidencing the
$300,000 of Subordinated Debt Units, but such $300,000.00 of Subordinated Debt Units shall be null
and void without further act or deed regardless of whether Lender delivers the appropriate
instruments to Borrower.

     2. $278,000 Note. On the date hereof: (a) Borrower shall execute and deliver the
$278,000 Note to Lender; and (b) Lender shall deliver to Borrower the instruments evidencing the
$200,000.00 of Class B Preferred Units, along with accrued distributions, but such $200,000.00 of
Class B Preferred Units shall be null and void without further act or deed regardless of whether
Lender delivers the appropriate instruments to Borrower.

     3. $275,451 Note. On the date hereof: (a) Borrower shall execute and deliver the
$275,451.22 Note to Lender; and (b) Lender shall deliver to Borrower the instruments evidencing the
$50,000.00 of Subordinated Debt Units and the $200,000.00 of Subordinated Debt Units, but such
$50,000.00 of Subordinated Debt Units and $200,000.00 of Subordinated Debt Units shall be null and
void without further act or deed regardless of whether Lender delivers the appropriate instruments
to Borrower.

     4. Representations and Warranties. Lender hereby warrants and represents to Borrower
as follows:

          (a) The $300,000.00 of Subordinated Debt Units, $200,000.00 of Subordinated Debt Units, the
$50,000.00 of Subordinated Debt Units and the $200,000.00 of Class B Preferred Units, along with
accrued interest and distributions, referred to in this Agreement are the only debt or equity
interests which Lender owns in Borrower (collectively, the “Ownership Interests”).

 

 

          (b) Lender is the sole owner of the Ownership Interests, and Lender hold such Ownership
Interests free and clear of any liens or encumbrances. Lender has not transferred or attempted to
transfer such Ownership Interests to any person or entity, and there are no agreements or
restrictions which prevent the transfer of such Ownership Interests by Lender to Borrower.

     5. Release By Borrower. Other than as set forth in the Purchase Agreement, the Real
Estate Note, the Huntingdon Notes and this Agreement, the Borrower, on behalf of itself, and its
members, directors, officers, agents, affiliates, successors and assigns, hereby forever fully and
finally releases and discharges Lender, and his heirs and assigns, and any and all other persons
and entities in the employ of or acting as agent for them, of and from any and all actions, causes
of action, claims, demands, costs, loss of services, expenses, compensation, and any and all
incidental or consequential damage of whatsoever type or nature, whether legal or equitable, which
Borrower now or may in the future claim against Lender, including but not limited to any and all
claims, demands or causes of action, arising out of, either directly or indirectly, Lender’s
investment in or ownership of the Ownership Interests or any other any equity or debt securities
issued by Borrower.

     6. Release By Lender. Other than as set forth in the Purchase Agreement, the Real
Estate Note, the Huntingdon Notes and this Agreement, Lender, on behalf of himself, and his heirs,
and assigns, hereby forever fully and finally releases and discharges Borrower, and the members,
directors, officers, agents, affiliates, successors and assigns of Borrower, and any and all other
persons and entities in the employ of or acting as agent for them, of and from any and all actions,
causes of action, claims, demands, costs, loss of services, expenses, compensation, and any and all
incidental or consequential damage of whatsoever type or nature, whether legal or equitable, which
Lender now or may in the future claim against Borrower, including but not limited to any and all
claims, demands or causes of action, arising out of, either directly or indirectly, Lender’s
investment in or ownership of the Ownership interests or any equity or debt securities issued by
Borrower.

     7. Notices. Any notice required or permitted hereunder shall be made in writing and
delivered personally or sent by certified mail, postage prepaid with return receipt requested,
addressed to Lender at 404 Springwood, Hot Springs, Arkansas 71913; and to Borrower at 4130 Linden
Avenue, Suite 303, Dayton, Ohio 45423; or to such other address of which the parties may have given
written notice of to the other parties.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first set forth above.

	 	 	 	 	 	 	 	 	 
	LENDER:	 	 	 	BORROWER:	 	 
	KENNETH O. HUNTINGDON	 	 	 	PERFORMANCE HOME BUYERS LLC	 	 
	 	 	 	 	an Ohio limited liability company	 	 
	/s/ Kenneth O. Huntindon
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Kenneth O. Huntingdon
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ Peter E. Julian	 	 
	 

	 	 	 	 	 	 	 	 
	 	 	 	 	Print Name: Peter E. Julian	 	 
	 	 	 	 	Title: Chief Executive Officerexv10w2

 

Exhibit 10.2

$275,451 PROMISSORY NOTE

			
	$275,451.22
	 	July 1, 2006

Dayton, Ohio

FOR VALUE RECEIVED, including without limitation the exchange of certain Ownership Interests (as
defined in the Exchange Agreement between Borrower and Lender of even date herewith) for this Note,
Performance Home Buyers, LLC, an Ohio limited liability company (“Borrower”), promises to pay to
the order of Kenneth O. Huntingdon (“Lender”), the principal sum of Two Hundred Seventy Five
Thousand and Four Hundred and Fifty-one and 22/100 Dollars ($275,451.22) together with interest at
the rate of Six Percent (6%) per annum.

Interest only on this Note shall be payable by Borrower to Lender until the July 1, 2009 (“Maturity
Date”). On such Maturity Date, Borrower shall pay to Lender the full amount of interest and
principal due under this Note. Commencing on the date hereof and continuing thereafter on the
first day of each month through the Maturity Date, Borrower shall pay to Lender monthly interest in
the amount of $1,377.25 ($275,451.22 * 6% / 12).

Borrower shall have the right at any time to prepay without penalty any portion or all of the
principal and interest due under this Note. Payments shall be applied first to accrued interest
and then to principal. Lender may, at its option, accelerate this Note and declare the remaining
principal and interest on this Note immediately due and payable if any of the following conditions
of default occur:

	 	i.	 	Failure of the Borrower to make any payment required hereunder within ten (10)
days after receipt of written notice of any failure to pay;
	 
	 	ii.	 	The filing of any Chapter proceeding under the Bankruptcy Code with respect to
any of the Borrower, which in the case of an Involuntary proceeding is not removed
within sixty (60) days; or
	 
	 	iii.	 	Appointment of a receiver, or any marshaling of any assets of the Borrower for
the benefit of creditors; or
	 
	 	iv.	 	Sale of all or substantially all of the assets of the Borrower or cessation of
Borrower’s business.

The rights granted to the Lender are not exclusive but are in addition to all other rights accruing
to Lender in law or equity. Any failure of Lender to exercise these rights shall not operate as a
waiver of such right or any other rights under this Note.

To secure Borrower’s prompt and timely payment of this Note, each of the undersigned guarantors
(“Guarantors”), jointly and severally, individually and on behalf of himself and his heirs and
assigns, guarantees the full performance and full payment of all obligations to Lender herein
provided to be paid, kept, performed and observed by Borrower. It is agreed that Lender may pursue
its remedies under this guaranty with or without having taken any prior action against Borrower
under this Note. This guaranty is absolute and unconditional and shall be a continuing one without
in any way being affected by the bankruptcy or insolvency of Borrower, reimbursement, indemnity,
and other claim (including any claim, as that term is defined in the federal Bankruptcy Code, and
any amendments thereto) which the undersigned Guarantors may now have or later acquire against
Borrower arising from the existence or performance of such Guarantor’s obligations under this
Guaranty. Lender shall provide each Guarantor notice of any default of Borrower, or any
acceleration in the same manner and at the same time such notice is sent to Borrower. Borrower
shall notify each Guarantor of any default by Borrower and shall also forward to each Guarantor any
notice delivered by Lender to Borrower and/or any Guarantor.

Any notice required or permitted hereunder shall be made in writing and delivered personally or
sent by certified mail, postage prepaid with return receipt requested, addressed to Lender at 404
Springwood, Hot Springs, Arkansas 71913; and to Borrower or Guarantor(s) at 4130 Linden Avenue,
Suite 303, Dayton, Ohio 45423; or to such other

 

 

address of which the parties may have given written notice of to the other parties. Borrower shall
forward to each Guarantor any notice delivered by Lender to Borrower and/or any Guarantor.

	 	 	 	 	 	 	 	 	 
	 	 	 	 	BORROWER:	 	 
	 	 	 	 	PERFORMANCE HOME BUYERS LLC	 	 
	 	 	 	 	an Ohio limited liability company	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ Peter E. Julian	 	 
	 

	 	 	 	 	 	 	 	 
	 	 	 	 	Print Name: Peter E. Julian	 	 
	 	 	 	 	Title: Chief Executive Officer	 	 

GUARANTORS:

	 	 	 	 	 	 	 
	/s/ Peter E. Julian

	 	 	 	/s/ Wayne Hawkins	 	 
	 

	 	 	 	 	 	 
	Peter Julian

	 	 	 	Wayne Hawkins	 	 
	 
	 	 	 	 	 	 
	/s/ Randall Porter

	 	 	 	/s/ Mark Fitzgerald	 	 
	 

	 	 	 	 	 	 
	Randall Porter

	 	 
	 	Mark Fitzgerald

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