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by the transfer to the Partnership of a 20 percent
interest in the $287,046 of purchase money mortgages
relating to the condominium units at 535 North Michigan
Avenue. Accordingly, after satisfying its share of the
cash capital contributions, The Holding Company's
remaining obligation to FWID is $88,387.46.
The Holding Company now should satisfy its
obligation for the cash contribution to the Partnership
by transferring $29,913.80 in cash to it. The Holding
Company should satisfy its obligation to FWID for the
transfer of the cash equivalents by paying FWID
$86,789.54. In addition, The Holding Company should
satisfy its responsibility for the balance of
$88,387.46 by signing a note for this amount payable to
FWID and pledging as security either third-party paper
or other acceptable collateral.
The note should provide for cash payments as the
Partnership realizes cash from the capital
contributions to it. I believe that you should discuss
the procedures regarding the issuance of the $88,387.46
secured note with Jim Wold or, in my absence, my
associate, Claire Pensyl.
The remaining item is, as noted above, for The
Holding Company to confirm its agreement to remit its
share of Partnership distribution to FWID. The Holding
Company's agreement is to remit distributions (a) only
after The Holding Company has received Partnership
distributions equal to The Holding Company's original
capital contribution of $262,500 and (b) then only in
an amount equal to 13.125 percent of the amount
realized by the Partnership from all the items shown on
Part II of Appendix A. The 13.125 percent equals The
Holding Company's share of all Partnership
distributions under Section 3.2 of the Agreement of
Limited Partnership.
In January 1985, approximately 6 months after the formation
of the partnership, TSG Holdings purchased additional interests
in the Frey partnership for $1,382,575, of which $241,950 was
payable to Holding Co. The purchase price was paid to Holding
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