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WALCOTT PARTNERS, L.P.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
April 14, 1998
Xxxxxxx X. Xxxxxx
000 Xxxx Xxxx
Xxxxxxxxxx, Xxx Xxxx 00000
Re: Letter Agreement relating to Unit Option (Non-Assignable) to Purchase
Units of Boston Celtics Limited Partnership in the name of Xxxxxxx X.
Xxxxxx, dated December 31, 1993 (as amended on January 8, 1998)
Dear Xx. Xxxxxx:
This letter agreement (the "Letter Agreement") memorializes the following
agreements between Walcott Partners, L.P. ("Walcott") and you ("Xxxxxx")
relating to the Unit Option (Non-Assignable) to Purchase Units of Boston Celtics
Limited Partnership ("BCLP") in the name of Xxxxxxx X. Xxxxxx, dated
December 31, 1993 (as amended by the Agreement and Release between Xxxxxx and
BCLP, dated January 8, 1998) (the "Unit Option"), a copy of which is attached
hereto as Exhibit A. Capitalized terms used but not defined in this Letter
Agreement have the meanings given them in the Unit Option.
Xxxxxx and Walcott agree as follows:
1. OPTION EXERCISE. Not later than May 26, 1998, Xxxxxx shall exercise
the Unit Option in full by giving written notice to BCLP pursuant to the
terms of the Unit Option. In such notice, Xxxxxx shall specify (a) that
June 1, 1998 (the "Option Exercise Date") is the date of exercise and (b)
that he will purchase, pursuant to the Unit Option, 250,000 BCLP Units at a
price of $8.50 per Unit, for a total purchase price of $2,125,000 (the
"Purchase Price"). The 250,000 BCLP Units so purchased, and any Castle
Creek Interests (as defined in the Agreement and Plan of Reorganization
among BCLP, Boston Celtics Limited Partnership II, Castle Creek Partners,
L.P., Celtics Limited Partnership, Celtics, Inc., BCLP II GP, Inc., Castle
Creek GP, Inc., Boston Celtics Corporation, and Celtics Capital
Corporation, dated as of April 14, 1998, a copy of which is attached to
this Agreement as Exhibit B (the "Plan")) distributed with respect to these
Units in the Reorganization (as defined in the Plan), are referred to
herein collectively as the "Option Units."
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2. SECURED LOAN. On the Option Exercise Date, (i) Walcott shall lend to
Xxxxxx an amount (the "First Loan Amount") equal to the sum of (a) the
Purchase Price and (b) 37% of the difference between the Purchase Price and
the fair market value (as defined in the Unit Option, measured as of the
Option Exercise Date) of the Option Units in connection with his exercise
of the Unit Option (the "Loan") by transferring to BCLP on Xxxxxx'x behalf,
upon receipt of the Walcott Note (as defined herein) executed by Xxxxxx,
the First Loan Amount in immediately available funds, and (ii) Xxxxxx shall
execute a promissory note in favor of Walcott (the "Walcott Note"), the
form of which is attached to this Agreement as Exhibit C, and grant therein
to Walcott a first-priority security interest in the Option Units and all
proceeds therefrom (the "Xxxxxxx Xxxx"). The Loan will be due and payable
on the earlier of (a) the date on which Xxxxxx sells the Option Units
(subject to the terms and provisions of this Agreement) and (b) April 15,
1999. No interest will be charged by Walcott on the Loan. The Loan will be
recourse to Xxxxxx. Xxxxxxx and Xxxxxx agree that the Walcott Note shall be
a "security agreement" under the provisions of Article 8 of the Delaware
Uniform Commercial Code (Del. Code Xxx., Title 6, Subtitle I), and that the
security interest granted thereby shall be a "purchase money security
interest" under the provisions of Article 9 of the Delaware Uniform
Commercial Code. Xxxxxx agrees to effect his pledge to Walcott of the
Option Units by directing BCLP's transfer agent to deliver the Option Units
to Walcott at such location, or to such third-party holder, as Walcott
directs, along with duly executed instruments of transfer or assignment in
blank, in form and substance satisfactory to Walcott, in order further to
perfect Walcott's security interest therein. Walcott and Xxxxxx agree to
take all reasonable steps necessary to effectuate such pledge of the Option
Units, in compliance with all applicable laws and regulations.
3. XXXXXX'X COVENANTS. In consideration of the Loan, Xxxxxx agrees to the
following covenants for the periods stated:
(a) Xxxxxx shall hold the Option Units for a period of seven months
from the Option Exercise Date, PROVIDED, that if the Call (as defined
herein) is exercised pursuant to the terms of this Agreement, Xxxxxx shall
sell the Option Units in accordance with the Call.
(b) In connection with the Reorganization (as defined in the Plan),
Xxxxxx shall take all necessary actions to (i) vote the Option Units in
favor of the Reorganization, and (ii) elect to receive a distribution
consisting entirely of Castle Creek Units in the Distribution (as defined
in the Plan) with respect to the Option Units. If Walcott at any time
should possess voting authority with respect to the Option Units, then
Walcott shall vote the Option Units in accordance with the preceding
sentence.
4. THE CALL.
(a) Xxxxxx agrees to grant BCLP the right (the "Call") to purchase
all of the Option Units on any day in which Federal Reserve member banks
are open in Wilmington, Delaware ("Business Day"), from the date of this
Letter Agreement through March 31,
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1999, for a purchase price (without set-off, deduction or counterclaim)
(the "Call Price") consisting of:
(x) payable on the date of exercise of the Call, cash in an
amount equal to fair market value (as defined in the Unit
Option, measured as of the Option Exercise Date) of the Option
Units, plus
(y) payable on January 15, 2004, cash in an amount equal to
(i) the aggregate amount of interest paid by BCLP from the date
of this Letter Agreement until January 10, 2004 with respect to
$5,000,000 in aggregate principal amount of Subordinated
Debentures (as defined in the Plan) and (ii) the aggregate
amount of distributions paid by BCLP II (as defined in the Plan)
from the date of this Letter Agreement until January 10, 2004
with respect to 250,000 BCLP II Units (as defined in the Plan).
(b) Immediately upon exercise of the Call, Xxxxxx shall direct BCLP
to wire such portion of the Call Price to Walcott (without set-off,
deduction or counterclaim) that is equal to the amount of the Walcott Note.
Walcott, on receipt of payment in full of all amounts due under the Walcott
Note, shall release the Xxxxxxx Xxxx on the Option Units and deliver the
Option Units to BCLP, along with duly executed instruments of transfer or
assignment in blank, in form and substance satisfactory to Walcott. Xxxxxx
shall cause the Option Units to be delivered to BCLP free and clear of all
liens and encumbrances, except for the Xxxxxxx Xxxx, the release of which
is provided for in the preceding sentence. Payments to Walcott and to
Xxxxxx will be to the accounts specified in writing by such persons to
BCLP.
(c) In connection with and upon consummation of the Reorganization,
the Call will be transferred from BCLP to Castle Creek without any action
by Xxxxxx or Walcott.
(d) If the Call is not exercised on or before March 31, 1999, then
on April 15, 1999, (i) Xxxxxx shall repay the Loan in full, (ii) Walcott
shall lend Xxxxxx an amount (the "New Loan Amount") equal to the Fair
Market Value (as defined in the Unit Option, measured as of the Option
Exercise Date) of the Option Units (the "New Loan") upon receipt from
Xxxxxx an executed promissory note in favor of Walcott (the "New Walcott
Note"), the form of which is attached to this Agreement as Exhibit D, and
(iii) Xxxxxx shall xxxxx to Xxxxxxx a first-priority security interest in
the Option Units and all proceeds therefrom. The New Loan will otherwise be
non-recourse to Xxxxxx. The New Loan will be due and payable on April 15,
2004. No interest will be charged by Walcott on the New Loan.
5. ADJUSTMENTS. If after the completion of the Reorganization but before
the expiration of the Call, any split or combination is made in the BCLP II
Units or Castle Creek Interests, then the Call Price will be adjusted
appropriately to reflect each such split or combination.
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6. CONDITION. The obligations of Xxxxxx in paragraph 3 of this Letter
Agreement are expressly conditioned upon the consummation and completion of
the Reorganization. If the Reorganization has not been consummated and
completed on or before March 31, 1999, then (i) the Loan shall be extended
such that it shall be due and payable on January 10, 2004, (ii) the First
Loan Amount shall be increased such that the total amount due under the
Loan equals the sum of (a) the Purchase Price and (b) 50% of the difference
between the Purchase Price and the fair market value (as defined in the
Unit Option, measured as of the Option Exercise Date) of the Option Units
(the "Increased Loan Amount"), (iii) Walcott shall lend to Xxxxxx an amount
(the "Difference Amount") equal to the difference between the Increased
Loan Amount and the Loan Amount by transferring the Difference Amount to
Xxxxxx in immediately available funds and (iv) the Call shall be
exercisable by BCLP on any Business Day prior to January 10, 2004 at a
price consisting of (x) payable on the date of exercise of the Call, cash
in an amount equal to fair market value (as defined in the Unit Option,
measured as of the Option Exercise Date) of the Option Units, PLUS (y)
payable on January 15, 2004, cash in an amount equal to the aggregate
amount of distributions paid by BCLP from the date of exercise of the Call
until January 10, 2004 with respect to 250,000 BCLP Units.
7. NOTICES. Any notices or communications ("Notices") permitted or
required under this Letter Agreement shall be deemed sufficiently given if
hand-delivered, or by overnight delivery service or facsimile transmission,
or sent postage prepaid by registered or certified mail, return receipt
requested to the addresses of the parties first set forth above, or to such
other address as either party may notify the other of in writing. Unless a
Notice delivered by facsimile transmission is transmitted on other than a
Business Day, in which case it shall be conclusively deemed to be delivered
on the next Business Day thereafter, all Notices delivered by facsimile
transmission shall be conclusively deemed to be delivered and received on
the date on which such facsimile is transmitted. With respect to notices
given by facsimile, the sending party shall take reasonable precautions to
ensure that such facsimile notice has been received. Notices delivered by
overnight delivery service shall be conclusively deemed to be delivered and
received on the third Business Day after such Notice is timely deposited
with such overnight delivery service. Notices mailed by registered or
certified mail shall be conclusively deemed to be delivered on the tenth
Business Day after they have been mailed.
8. BINDING EFFECT; ASSIGNMENT. This Letter Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the
parties hereto and their respective heirs, successors and permitted
assigns, but neither this Letter Agreement nor any of the rights, interests
or obligations hereunder shall be assigned by any party hereto without the
prior written consent of the other parties. Except as to the provisions of
Section 4 with respect to Castle Creek, this Letter Agreement is not
intended to confer upon any other person except the parties hereto, their
successors and permitted assigns any rights or remedies hereunder.
9. FURTHER ASSURANCES. Xxxxxx and Xxxxxxx agree that at any time and from
time to time, upon written request, they shall execute and deliver such
further documents and do such further acts and things as may be reasonably
requested in order to effectuate the
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purposes of this Letter Agreement and the Walcott Note and the
transactions contemplated hereby and thereby. Without limitation of the
foregoing, at Walcott's request, Xxxxxx shall (i) perform such acts as may
be necessary or advisable in the opinion of Walcott or that Walcott may
request to assure the attachment, perfection and first priority of
Walcott's security interest in the Option Units, to exercise the rights and
remedies of Walcott hereunder or under the Walcott Note or to carry out the
intent of this Agreement, and (ii) execute and deliver at any time and from
time to time all supplemental documentation that Walcott may request, in
form and substance acceptable to Walcott.
10. COUNTERPARTS. This Letter Agreement may be executed simultaneously in
one or more counterparts, each of which shall be deemed an original, but
all of which shall constitute one and the same instrument.
11. HEADINGS. The headings contained in this Letter Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Letter Agreement.
12. SEVERABILITY. If any term or provision specified herein is held by a
court or arbitral panel of competent jurisdiction to be in violation of any
applicable local, state or federal ordinance, statute, law, administrative
or judicial decision, or public policy, and if such court or arbitral panel
should declare such term or provision to be illegal, invalid, unlawful,
void, violable, or unenforceable as written, then such provision shall be
given full force and effect to the fullest possible extent that it is
legal, valid and enforceable, and the remainder of the terms and provisions
herein shall be construed as if such illegal, invalid, unlawful, void,
voidable or unenforceable term or provision was not contained herein, but
only to the extent that giving effect to such provision and the remainder
of the terms and provisions hereof shall be in accordance with the intent
of the parties.
13. GOVERNING LAW. THIS LETTER AGREEMENT SHALL BE GOVERNED UNDER THE LAWS
OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAWS
PROVISIONS THEREOF.
14. WAIVER. The failure of any party at any time or times to enforce or
require performance of any provision hereof shall in no way operate as a
waiver or affect the right of such party at a later time to enforce the
same. No waiver by any party of any condition or the breach of any term or
provision of this Letter Agreement, whether by conduct or otherwise, in any
one or more instances, shall be deemed to be or construed as a further or
continuing waiver of any such condition or breach, or a waiver of any other
condition or of any breach of any other term or provision of this letter
agreement.
15. SPECIFIC PERFORMANCE; REMEDIES. Each of the parties acknowledges that
it would be irreparably damaged in the event that any of the provisions of
this Letter Agreement within the reasonable control of Xxxxxx or Xxxxxxx,
as the case may be, are not performed in accordance with their specific
terms or are otherwise breached, and that monetary damages would not
provide an adequate remedy in such event. Accordingly, it is agreed that
each of Xxxxxx or Walcott, as the case may be, shall be entitled to
injunctive relief to
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prevent breaches of the provisions of this Letter Agreement within the
reasonable control of Walcott or Xxxxxx, as the case may be, and on
compliance with all its obligations hereunder, specifically to enforce the
terms and provisions hereof in any action instituted in any court of the
United States or any state thereof having subject matter jurisdiction.
16. ENTIRE AGREEMENT. This Letter Agreement and all the Exhibits attached
hereto, and all other securities and documents referred to herein,
constitute the entire understanding of the parties hereto concerning the
subject matter hereof, and supersedes all previous agreements and
understandings, oral and written, between the parties with respect to such
subject matter. No modification of this Letter Agreement or waiver of the
terms, conditions, warranties, representations and rights hereunder will be
binding on either party unless signed in writing by such party or its
representative.
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If the foregoing accurately reflects our understandings and
agreements, please so indicate by signing below, whereupon this Letter Agreement
shall constitute a binding agreement between the parties hereto.
WALCOTT PARTNERS, L.P.
By: DRAYCOTT, INC.
Its: General Partner
By: /s/ Xxxx X. Xxxxxx
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Xxxx X. Xxxxxx
Chief Executive Officer
SO AGREED:
By: /s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
