AGREEMENT made [date] between ______________________, residing at
______________________________________________ (Party-1),
__________________________________, residing at
________________________________________________(Party-2), and
_________________________________________, residing at
__________________________________ (Party-3).
PREAMBLE
Simultaneously with the execution of this Agreement, Party-1 is lending the sum of five hundred thousand dollars ($500,000.00) to Party-2 and Party-3, which loan is evidenced by a promissory note due [date] (Promissory Note), dated the date hereof, and made jointly and severally by Messrs. Party-2 and Party-3 and payable to Party-1. The Promissory Note is secured by a security agreement of even date herewith (Security Agreement) creating a security interest in the partnership interests of Messrs. Party-2 and Party-3 in an Illinois limited partnership known as Sample Associates, L.P. (Collateral).
Party-2 is the sole general partner and Party-3 is the sole limited partner of an Illinois limited partnership known as Northwood Associates (Partnership), which partnership was formed pursuant to a partnership agreement dated [date]. The parties have agreed on the terms of an Amended and Restated Limited Partnership Agreement of Northwood Associates, an executed copy of which is annexed hereto as Exhibit A [omitted], which, among other things, provides for the admission of Party-1 to the Partnership as a Class A limited partner on his execution of the conversion right hereinafter provided for.
NOW, THEREFORE, it is agreed as follows:
ELECTION TO CONVERT
1. Party-1 may, at any time after the date of this Agreement and prior to the due date of the Promissory Note, elect to become a Class A limited partner in the Partnership under the terms of the Amended and Restated Limited Partnership Agreement of Northwood Associates annexed hereto as Exhibit A [omitted].
PROCEDURE FOR ELECTION
2. To implement the election, party-1 shall send a notice in writing to Party-2 and Party-3 at their addresses previously set forth, or at such other address of which either of them may notify him, and such election shall take effect and Party-1 shall become a Class A limited partner in the partnership on the third day following the mailing of the notice (Contribution Date). The term of the Partnership as reconstituted under the Amended and Restated Limited Partnership Agreement of Northwood Associates shall commence on the Contribution Date.
EXTINGUISHMENT OF NOTES, ETC.
3. On the Contribution Date, Party-1 shall be deemed to have made a capital contribution to the partnership in the amount of five hundred thousand dollars ($500,000.00), and the Promissory Note and Security Agreement shall be deemed canceled and extinguished. Any unpaid interest on the Promissory Note up to and including the Contribution Date shall be treated as part of the Class A limited partner's "Preferred Return" as set forth in the Amended and Restated Limited Partnership Agreement of Northwood Associates. On the Contribution Date, Party-1 shall return the Promissory Note and Security Agreement marked "Canceled" to Messrs. Party-2 and Party-3 and shall file such documents, including UCC-3 Termination Statements, as shall be required to extinguish his security interest in the Collateral.
MISCELLANEOUS
4. a. If any one or more of the provisions contained herein shall be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision hereof, and this Agreement shall be construed as if such invalid, illegal, or unenforceable provision had never been contained herein.
b. This Agreement may be executed in any number of counterparts, and each thereof shall be deemed to be an original and all such counterparts shall constitute but one and the same instrument.
c. This Agreement shall be construed and enforced in accordance with and governed by the laws of the State of Illinois applicable to agreements made and to be performed in the State of Illinois.
d. This Agreement represents the entire agreement between the parties with respect to the subject matter hereof and may not be amended or modified orally.
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed this [date].
[Signatures]
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