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Item 17(c)
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."
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
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(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.
Walcott 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, 1999, for a
purchase price (without set-off, deduction or counterclaim) (the "Call
Price") consisting of:
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(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.
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
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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 purposes of this
Letter Agreement and the Walcott Note and the transactions contemplated
hereby and thereby. Without limitation of the foregoing, at
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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
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entitled to injunctive relief to 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
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