Dated as of May 24, 2000
Xx. Xxxxxxxx xx Xxxxxx Xxxxxxxxx
President of Global Banking and Financial Services
FleetBoston Financial Corporation
Xxx Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Re: Purchase of Residence at [ ], New York, New York ("Property")
Dear Xxxxxxxx:
This letter will confirm the terms by which FleetBoston Financial Corporation
("FBF") will provide you mortgage financing and reimbursement of certain costs
in connection with the purchase of the Property.
Terms of Mortgage Loan
The principal terms of our note and mortgage to you are:
1. FBF will loan you an amount not to exceed $4,500,000, to purchase the
Property (the "Loan"). You will be responsible for the cost of any and all
improvements to the Property. FBF will continue your existing loan on an
interest-free basis on the property located at [ ], Brookline,
Massachusetts for a period not to exceed six months from the date of
closing on the Property, but in no event later than the date the Brookline
property is sold, at which time the loan on the Brookline, Massachusetts
property will become immediately due and payable. The foregoing provisions
relating to the Brookline, Massachusetts property shall be deemed to be an
amendment to the letter agreement dated as of August 15, 1997 relating to
such property.
2. The Loan is due and payable on August 15, 2011, except as provided below
(which date, howsoever determined, is the maturity date).
3. Except as provided below, the Loan will be interest-free.
4. Interest will be payable on and after the date that you cease to perform
substantial services for FBF or its affiliates. You will not be
responsible for interest for any prior period. You will be treated as
performing substantial services as long as you are a full-time employee.
In case of your death or permanent disability (as set forth in Paragraph 6
hereof), you will be deemed solely for purposes of this paragraph to be
performing substantial services for six months from the date of death or
permanent disability.
5. You have an obligation to repay the outstanding amount of the Loan plus
accrued interest and other charges relating to the Loan, if any, on or
before the maturity date as determined herein.
6. If your employment terminates other than for "cause", including
termination by you with "good reason" or by reason of death, "disability"
or "change of control", the maturity date shall be one (1) year from (i)
the date of your death or (ii) the date your employment otherwise
terminates, but not later than August 15, 2011. Notwithstanding the
foregoing, if you voluntarily terminate your employment at any time for
other than "good reason", the maturity date of the Loan shall be ninety
(90) days after the date of termination of your employment. The terms
"cause", "good reason" and "disability" shall be defined as such terms are
defined in your employment agreement with FBF. The term "change of
control" shall be defined as such term is defined in your change of
control agreement with FBF.
7. If your employment terminates at any time for cause, you will be
responsible for interest accrued from the date interest commences to
accrue as provided in Paragraph 4 and the outstanding principal balance of
the Loan and any charges thereon. The maturity date will be the date your
employment terminates for cause.
8. If you intend to sell the Property within the first five years following
the date of this letter and prior to satisfaction of the Loan, you must
notify FBF in writing prior to listing the Property with a broker, or
otherwise offering it to the public. Within ten business days of receiving
this notice, FBF may, but shall not be obligated to, submit a written
offer specifying the price and other terms of purchase. Within fifteen
days of receipt, you must accept or reject FBF's offer which at that time
will lapse if not accepted. If FBF declines to offer to purchase the
Property or if you decline FBF's offer, you may then list the Property for
sale to the public. FBF may submit offers at any time which you may
consider.
9. Before you accept an offer for the Property from a third party within the
first five years following the date of this letter and prior to
satisfaction of the Loan, you must permit FBF to submit an offer within
three days of your notifying FBF and permit FBF to purchase the Property
at a price not less than the price offered by the third party assuming all
other terms are comparable.
10. In the event you cease performing substantial services and wish to retain
ownership of the Property or if you wish to repay the Loan, you shall
repay the outstanding principal balance of the Loan plus accrued interest
and other charges relating to the Loan, if any. You must advise FBF of
your intention to retain ownership of the Property or to repay the Loan
not less than sixty days from the earlier of the maturity date or the date
you intend to repay the Loan.
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11. Notwithstanding any other provision of this letter to the contrary:
(a) if the Property is sold within the first five years following the
date of this letter, for a net sales price less than the purchase
price of the Property (exclusive of the cost of any improvements
made by you to the Property), the first $1,000,000 of any such
deficit between purchase price and net sales price shall be
reimbursed to you by FBF and the balance of any such deficit shall
be borne by you. Net sales price shall mean the net proceeds to you
from the sale of the Property after all closing expenses;
(b) if the Loan is repaid within the first five years following the date
of this letter and at the time of repayment the fair market value of
the Property is less than the purchase price of the Property
(exclusive of the cost of any improvements made by you to the
Property), the first $1,000,000 of any such deficit between purchase
price and fair market value shall be reimbursed to you by FBF and
the balance of any such deficit shall be borne by you. The fair
market value of the Property shall be determined by a qualified
appraiser selected by the American Arbitration Association (New York
office); the appraiser's determination shall be final and the costs
of such appraisal shall be shared equally by you and FBF.
12. FBF will have the right to call the loan at the end of five (5) years from
the date of this letter after giving sixty (60) days prior notice of its
intention to call the Loan during which period of time you and FBF may
renegotiate the provisions of the Loan.
Reimbursement of Expenses
As provided in the FBF Executive Relocation Policy, FBF will either pay directly
or reimburse you for acquisition expenses (lender's title examination and
insurance, engineering inspection fee, legal, appraisal, escrow, mansion tax,
mortgage recording tax, recording fees, title closer gratuity, and other
standard fees, etc.) incurred by you to purchase the Property. In addition, FBF
will either pay directly or reimburse you for the first six months of rental
expense following your relocation to New York City and all brokerage commissions
relating to your proposed Xxxxx Parc rental. FBF will also either pay directly
or reimburse you for all selling expenses including brokerage commissions
relating to the sale of the Brookline property.
Operating Expenses of Property
You will bear all costs of operating, repairing and maintaining the Property
(including real estate taxes, assessments and condominium expenses) including
the costs for household help (and related payroll taxes and benefits),
insurance, and utilities (including water and sewer charges).
Furnishings
You will be responsible for the cost to furnish the Property and for any
improvements that are not part of the real estate.
-3-
Tax and Loss Protection
The parties intent is to have the Loan on the Property qualify as an
employer-relocation mortgage loan and the parties agree to take all steps
necessary to make it qualify as such. If the Internal Revenue Service claims
imputed interest on the loan relating to the Property and so long as you have
taken all steps necessary based on the advice of a mutually acceptable tax
advisor to cause the loan to qualify as an employer-relocation mortgage loan,
FBF will reimburse you for the cost of such imputed interest together with a
gross-up thereon.
If you agree with the terms of this letter, please sign both copies and return
one copy to me. This letter will thereupon be a Massachusetts instrument under
seal and will be maintained in the books and records of FBF.
Very truly yours,
FleetBoston Financial Corporation
By: /s/ M. XXXX XXXXXXX
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X. Xxxx Xxxxxxx
Executive Vice-President
Agreed and Accepted as of the date
set forth above:
/s/ XXXXXXXX XX XXXXXX XXXXXXXXX
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Xxxxxxxx xx Xxxxxx Xxxxxxxxx
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