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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 13D/A
UNDER THE SECURITIES EXCHANGE ACT OF 1934
AMENDMENT NO. 2
BOSTON CELTICS LIMITED PARTNERSHIP
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(Name of Issuer)
Limited Partnership Units
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(Title of Class of Securities)
100576107
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(CUSIP number)
Paul E. Gaston
33 East 63rd Street
New York, NY 10021
(212) 644-3800
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(Name, address and telephone number of person
authorized to receive notices and communications)
April 14, 1998
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(Date of event which requires filing of this statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Note. Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
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CUSIP No. 100576107 SCHEDULE 13D/A Page 2 of 11 Pages
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1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
DRAYCOTT, INC.
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
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3. SEC USE ONLY
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4. SOURCE OF FUNDS*
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5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) [ ]
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6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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7. SOLE VOTING POWER
1,320,000
NUMBER OF -------------------------------------------------------
SHARES 8. SHARED VOTING POWER
BENEFICIALLY
OWNED BY 250,000
EACH -------------------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON
WITH: 1,320,000
-------------------------------------------------------
10. SHARED DISPOSITIVE POWER
0
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11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,570,000
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12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
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13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
28.1%
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14. TYPE OF REPORTING PERSON*
CO
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
(Page 2 of 11 Pages)
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CUSIP No. 100576107 SCHEDULE 13D/A Page 3 of 11 Pages
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1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
WALCOTT PARTNERS, L.P.
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
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3. SEC USE ONLY
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4. SOURCE OF FUNDS*
OO
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5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) [ ]
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6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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7. SOLE VOTING POWER
1,320,000
NUMBER OF -------------------------------------------------------
SHARES 8. SHARED VOTING POWER
BENEFICIALLY
OWNED BY 250,000
EACH -------------------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON
WITH: 1,320,000
-------------------------------------------------------
10. SHARED DISPOSITIVE POWER
0
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11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,570,000
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12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
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13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
28.1%
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14. TYPE OF REPORTING PERSON*
PN
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
(Page 3 of 11 Pages)
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CUSIP No. 100576107 SCHEDULE 13D/A Page 4 of 11 Pages
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1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
PAUL E. GASTON
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [X]
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3. SEC USE ONLY
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4. SOURCE OF FUNDS*
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5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) [ ]
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6. CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.A.
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7. SOLE VOTING POWER
1,811,900
NUMBER OF -------------------------------------------------------
SHARES 8. SHARED VOTING POWER
BENEFICIALLY
OWNED BY 250,000
EACH -------------------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON
WITH: 1,811,900
-------------------------------------------------------
10. SHARED DISPOSITIVE POWER
0
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11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,061,900
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12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
1,000
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13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
36.8%
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14. TYPE OF REPORTING PERSON*
IN
================================================================================
*SEE INSTRUCTIONS BEFORE FILLING OUT!
(Page 4 of 11 Pages)
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This amendment is being filed in connection with an agreement between
Stephen C. Schram and Walcott Partners, L.P. ("Walcott"), dated as of April 14,
1998 (the "Letter Agreement"), the proposed reorganization (the
"Reorganization") of Boston Celtics Limited Partnership ("BCLP") and the
acquisition of additional BCLP Units by Paul E.Gaston. The Reorganization is
described in a Registration Statement on Form S-4 (the "Registration Statement")
of BCLP, Boston Celtics Limited Partnership II ("BCLP II") and Castle Creek
Partners, L.P. ("Castle Creek") (File No. 333-50367), as amended.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
As reported in the Schedule 13D dated January 31, 1993, as filed
February 10, 1993, the Units reported thereby were originally issued to Don F.
Gaston, the father of Paul E. Gaston, on December 11, 1986 in exchange for his
contribution to BCLP of a certain undivided interest in the assets and
liabilities of the Boston Celtics franchise of the National Basketball
Association. On April 24, 1990, Don F. Gaston transferred 2,062,300 Units
without consideration to himself and his wife and Paul E. Gaston's mother, Paula
B. Gaston, as co-owners. On or about January 31, 1993, Don F. Gaston and Paula
B. Gaston contributed 1,300,000 Units to Walcott. Paul E. Gaston is the sole
stockholder, sole director and sole officer of Draycott, Inc. ("Draycott"), the
1% corporate general partner of Walcott. Paul E. Gaston also owns a 14% limited
partnership interest in Walcott. and Paul E. Gaston is the co-trustee of a trust
for the benefit of, among others, his children, which owns a 10% limited
partnership interest in Walcott.
On February 5, 1996, Don F. Gaston and Paula B. Gaston, as co-owners,
contributed 20,000 Units to Walcott. As a result, Walcott owns an aggregate of
1,320,000 Units.
On or about October 1, 1996, Paul E. Gaston was issued 234,886 Restricted
Units which contain significant restrictions as to vesting and transferability.
Mr. Gaston elected to receive these Restricted Units in lieu of a $3,658,363
cash incentive compensation payment to which he was entitled. Based upon a
written report received from an independent employee benefits consultant, a
Committee of the Board of Directors of Celtics, Inc. (the General Partner of the
Partnership) authorized and approved the award of these Restricted Units to Paul
E. Gaston at a discount from the closing price for the Units of the Partnership
on the New York Stock Exchange on June 28, 1996. These Restricted Units were
deemed to have been issued to Mr. Gaston as of June 28, 1996.
On April 25, 1996, Paul E. Gaston purchased 1,000 Units in the open market
at a price of $23.98 per Unit.
On April 22, 1996, Paul E. Gaston, as custodian for each of his 3 minor
children under the Uniform Gift to Minors Act, purchased 1,000 Units each for
his 3 minor children (as aggregate of 3,000 Units) in the open market at a price
of $23.46 per Unit. On the same date, Dana Halsey Gaston, the wife of Paul E.
Gaston, purchased 1,000 Units in the open market at a price of $23.46 per Unit.
With respect to the Units purchased by his wife, Mr. Gaston has neither sole nor
shares voting or investment authority and specifically disclaims beneficial
ownership of those Units.
On February 11, 1994, Paul E. Gaston, as custodian for each of his 3 minor
children under the Uniform Gift to Minors Act, purchased 1,000 Units each for
his 3 minor children (an aggregate of 3,000 Units) in the open market at a price
of $20.81 per Unit.
The funds used to purchase the Units described above which were acquired by
means of open market purchases consisted of personal funds of the individuals
who either made the purchase or on whose behalf the purchase was made.
Item 3 of Schedule 13D is hereby amended by adding the information set
forth below to the information previously disclosed therein.
(Page 5 of 11 Pages)
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No cash consideration has been paid by Walcott in connection with the
parties entering into the Letter Agreement described in Item 4 below. Walcott
intends to use a combination of cash on hand and borrowed funds to fund the
loans described in Item 6 below.
On May 8, 1998, Paul E. Gaston purchased 14 Units in the open market at a
price of $19.75 per Unit.
ITEM 4. PURPOSE OF TRANSACTION
The transfer of Units from Don F. Gaston and Paula B. Gaston to Walcott
reported in Schedule 13D as originally filed was undertaken in connection with a
restructuring of certain of the businesses owned or operated by or for the
benefit of the Gaston family.
Filed as an exhibit thereto and incorporated herein by reference is a
Merger Agreement dated as of December 8, 1992 (the "Merger Agreement') among
Boston Celtics Communications Limited Partnership ("BCCLP"), the Partnership,
BCCLP Holding Corporation ("Holdings"), a newly formed corporation wholly owned
by the Partnership, and BCCLP Acquisition Limited Partnership ("Acquisition"), a
newly formed Delaware limited partnership in which the 99% limited partnership
interest is held by Holdings and the 1% general partnership interest is held by
Celtics Communications, Inc., which also serves as the general partner of BCCLP
("CCI" or the "BCCLP General Partner").
Pursuant to the Merger Agreement, Acquisition was merged with and into
BCCLP (the "Merger") and BCCLP became the surviving partnership. Upon the
consummation of the Merger, (i) holders of the 5,935,000 issued and outstanding
limited partnership units in BCCLP ("BCCLP Units") were entitled to receive
$2.40 per unit in cash, without interest (the "Merger Price"), (ii) the 99%
limited partnership interest in Acquisition held by the Partnership, through
Holdings, was converted into a 99% limited partnership interest in BCCLP and
(iii) the BCCLP General Partner continued to hold the 1% general partnership
interest in BCCLP. Accordingly, after the Merger, BCCLP was owned 99% by the
Partnership, through its corporate subsidiary Holdings, and 1% by the BCCLP
General Partner.
Upon consummation of the Merger, the 99% limited partnership interest in
BCCLP came to be held indirectly by the Partnership, in which Don F. Gaston,
Alan N. Cohen and Paul R. Dupee, Jr. (the "Principal Partnership Unitholders")
and certain of their affiliates in turn held approximately 56.4% of the
partnership interests, and the 1% general partnership interest in BCCLP
continued to be held by BCCLP General Partner, which was wholly owned by the
Principal Partnership Unitholders or their affiliates. Accordingly, the
Principal Partnership Unitholders held an indirect interest in BCCLP equal to
approximately 57.4% following the Merger.
The BCCLP Units were registered under the Exchange Act. Upon consummation
of the Merger, such registration was intended to be terminated upon application
of BCCLP to the Securities and Exchange Commission (the "Commission").
Termination of registration of the BCCLP Units under the Exchange Act would
relieve BCCLP of the obligations theretofore imposed on it to prepare and file
financial statements and other reports under the Exchange Act and to comply with
the proxy rules of Regulation 14A under Section 14 of the Exchange Act. In
addition, BCCLP's officers, directors and Unitholders owning 10% or more of the
BCCLP Units would be relieved of the reporting requirements and "short swing"
trading liability under Section 16 of the Exchange Act. BCCLP indicated that it
intended to apply for termination of registration under the Exchange Act as soon
as practicable after the Merger.
The Board of Directors of both Celtics, Inc., the corporate general partner
of the partnership, and CCI voted to approve the Merger Agreement, subject to
certain conditions. Paul E. Gaston is a director of Celtics, Inc. and Celtics
Communications, Inc. as well as Boston Celtics Corporation and BCCLP Holding
Corporation.
The Units and/or Restricted Units, as the case may be, acquired by Walcott,
Paul E. Gaston (individually and as custodian for his 3 minor children under the
Uniform Gift to Minors Act) and Dana Halsey Gaston were acquired for investment
purposes.
(Page 6 of 11 Pages)
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Item 4 of Schedule 13D is hereby amended by adding the information set
forth below to the information previously disclosed therein.
On April 14, 1998, Walcott entered into the Letter Agreement with Schram.
In the Letter Agreement, Schram, among other things, (i) agreed to exercise
certain options (the "Unit Option") to acquire 250,000 BCLP Units on June 1,
1998, (ii) agreed to vote the BCLP Units acquired upon such exercise (the
"Option Units") in favor of the Reorganization, (iii) agreed to elect to receive
a distribution consisting entirely of limited partnership interests in Castle
Creek with respect to the Option Units in connection with the Reorganization,
and (iv) granted BCLP a call option (the "Call") with respect to the Option
Units. In connection with consummation of the Reorganization, the Call will be
transferred from BCLP to Castle Creek without any action by Schram or Walcott.
Walcott, Paul E. Gaston and their affiliates have executed consents with
respect to all of their BCLP Units in favor of the Reorganization. The consent
executed by Schram pursuant to the Letter Agreement, when combined with the
consents delivered by Walcott, Paul E. Gaston and their affiliates and other
Unit holders with whom they have relationships, achieved the vote required to
approve the Reorganization.
Except as set forth above and elsewhere in this Schedule 13D/A, Draycott,
Walcott and Paul E. Gaston have no present plans or intentions that relate to or
would result in any of the transactions described in clauses (a) through (j) of
Item 4 of Schedule 13D. Draycott's, Walcott's and Paul E. Gaston's intentions
with respect to BCLP and the Units are subject to change, and each retains its
right to modify its plans with respect to the transactions described in this
Item 4, to acquire or dispose of securities of BCLP and to formulate plans and
proposals that could result in the occurrence of any such events.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
Item 5 of Schedule 13D is hereby amended and restated as follows.
(a) As the general partner of Walcott, Draycott may be deemed to be the
beneficial owner of certain of the Units owned by Walcott. As the sole
stockholder, sole director and sole officer of Draycott, the general partner of
Walcott, and as a limited partner and the co-trustee of a trust for the benefit
of his children that is a limited partner of Walcott, Paul E. Gaston may be
deemed to be the beneficial owner of certain of the Units held by Walcott. As of
April 14, 1998, Walcott beneficially owns 1,570,000 Units, which represent
approximately 28.1% of the outstanding Units. This report shall not be deemed an
admission for purposes of Section 13, or otherwise that Paul E. Gaston or
Draycott are beneficial owners of the Units owned by Walcott.
In addition, Mr. Gaston beneficially owns an additional 491,900 Units,
representing approximately 8.8% of the outstanding Units, comprised of 484,886
Restricted Units (containing significant restrictions as to vesting and
transferability) owned by him individually, 1,014 Units also owned by him
individually, and 6,000 Units which he holds as custodian for each of his minor
children under the Uniform Gift to Minors Act.
Accordingly, as of April 14, 1998, Mr. Gaston may be deemed to beneficially
own an aggregate of 2,061,900 Units, representing approximately 36.8% of the
outstanding Units.
(b) As the sole stockholder, officer and director of Draycott, the
corporate general partner of Walcott, Paul E. Gaston, through Draycott, has the
sole voting and dispositive power with respect to 1,320,000 Units beneficially
owned by Walcott and shared voting power with respect to 250,000 Units
beneficially owned by Walcott.
(c) On May 8, 1998, Paul E. Gaston purchased 14 Units in the open market
at a price of $19.75 per Unit. Other than the Letter Agreement, neither Draycott
nor Walcott has effected any transaction involving BCLP Units during the past 60
days.
(Page 7 of 11 Pages)
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(d) None
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
SECURITIES OF THE ISSUER
On December 31, 1993, BCLP granted an option to Paul E. Gaston to acquire
250,000 Units at a price of $16.25 per Unit, less all cash distributions per
Unit made by BCLP from July 31, 1993 to the date of exercise. The option for
these 250,000 Units became exercisable in installments as follows:
Aggregate Amount of
Period Option Exercisable
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June 30, 1994 - June 29, 1995 1%
June 30, 1995 - June 29, 1996 60%
June 30, 1996 - June 29, 1997 80%
June 30, 1997 - December 31, 2003 100%
This option expires 10 years from the date of grant. In addition to exercising
the right to purchase Units pursuant to the option, Mr. Gaston may exercise a
Unit Appreciation Right, entitling him to receive an amount equal to the excess
of the fair market value of a Unit, determined on the date of exercise, over the
exercise price of the related option on the date the Unit Appreciation Right was
granted, in which event options for an equivalent number of Units will be
canceled. In the sole discretion of Celtics, Inc., BCLP's general partner,
payments of amounts payable pursuant to Unit Appreciation Rights may be made
solely in Units, solely in cash, or in a combination of cash and Units. A copy
of the Unit Option Dated December 31, 1993 To Purchase Units Of Boston Celtics
Limited Partnership between Mr. Gaston and BCLP is attached hereto as Exhibit 3
and is specifically incorporated herein by reference.
Item 6 of Schedule 13D is hereby amended by adding the information set
forth in the following paragraph to the information previously disclosed
therein.
On June 30, 1997, Mr. Gaston elected to exchange his options to purchase
250,000 BCLP Units for 250,000 restricted Units, which vest after ten years and
contain certain significant restrictions as to transferability but are entitled
to receive distributions.
On August 10, 1995, BCLP redeemed an aggregate of 758,444 Units
beneficially owned by Alan Cohen and his son and daughter and, in addition, the
interest of Alan Cohen in Celtics, Inc., which is the sole general partner of
BCLP, was acquired by Walcott. The Units acquired by BCLP from Alan Cohen and
his son and daughter have been classified as treasury Units. In addition, Alan
Cohen resigned as an officer and director of Celtics, Inc.
BCLP and Mr. Gaston entered into a letter agreement dated June 28, 1996
pursuant to which Mr. Gaston was permitted to elect to acquire Restricted Units
of BCLP, containing significant restrictions as to vesting (continuous
employment with BCLP or its subsidiaries or affiliates for 10 years) and
transferability (no sale, assignment, transfer, pledge, hypothecation, etc. for
10 years, except under certain limited circumstances), as set forth therein, in
lieu of a $3,658,363 cash incentive compensation payment which Mr. Gaston was
entitled to receive. By means of a letter dated June 28, 1996, Mr. Gaston
exercise his right to receive Restricted Units in lieu of the cash incentive
compensation payment to which he was entitled. (See Item 3 as amended above).
The letter agreement provides that during the term thereof, Mr. Gaston (as
holder of the Restricted Units) shall have all of the
(Page 8 of 11 Pages)
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rights of a holder of Units, including the right to vote and receive
distributions. The letter agreement also provides that in the event of his death
or a "Change of Control" (as defined therein) of the Partnership, Mr. Gaston (or
his authorized designees) shall have the right to sell all or a portion of the
Restricted Units to BCLP on the terms and conditions set forth in the letter
agreement. The letter agreement and Mr. Gaston's letter dated June 28, 1996
exercising his rights thereunder are attached hereto as Exhibits 4 and 5 and are
specifically incorporated herein by reference.
On November 30, 1996, BCLP, through its indirect wholly owned subsidiary,
Celtics Capital Corporation, acquired an aggregate of 780,000 Units beneficially
owned by Paul R. Dupee, Jr. and an entity which is an affiliate of Mr. Dupee
and, in addition, the interest of Paul R. Dupee, Jr. in Celtics, Inc. was
acquired by Walcott. The Units acquired by Celtics Capital Corporation from Mr.
Dupee and his affiliate were purchased from Celtics Capital Corporation by BCLP
on June 30, 1997, and have been classified as treasury Units. In addition, Paul
R. Dupee, Jr. resigned as an officer and director of Celtics, Inc.
As a result of the transaction described above, Walcott owns 100% of
Celtics, Inc. Paul E. Gaston is the Chairman of the Board and a Director of
Celtics, Inc. Mr. Gaston is also the sole stockholder, sole director and sole
officer of Draycott, which is the general partner of Walcott.
Item 6 of Schedule 13D is hereby amended by adding the information set
forth below to the information previously disclosed therein.
On April 14, 1998, Walcott and Schram entered into the Letter Agreement, in
which Schram (i) agreed to exercise the Unit Option on June 1, 1998, (ii) agreed
to vote the Option Units in favor of the Reorganization, (iii) agreed to elect
to receive a distribution consisting entirely of limited partnership interests
in Castle Creek with respect to the Option Units in connection with the
Reorganization, and (iv) granted the Call to BCLP. Also in the Letter Agreement,
Walcott (i) agreed to loan to Schram, on June 1, 1998, an amount sufficient to
cover the exercise price of the Unit Option and taxes payable by Schram in
connection with his exercise of the Unit Option (the "First Loan"), (ii) agreed
that, if the Call is not exercised on or before March 31, 1999, then it would
loan to Schram, on April 15, 1999, an amount equal to the fair market value (as
defined in the Unit Option, measured as of June 1, 1998) of the Option Units
(the "New Loan") (at which time Schram would repay the First Loan in full), and
(iii) agreed that, if the Reorganization is not consummated or completed on or
before March 31, 1999, then it would extend and increase the amount due under
the First Loan, and loan to Schram the difference between the increased loan
amount and the original loan amount. The First Loan will be full recourse to
Schram and will be secured by the Option Units. The New Loan will be
non-recourse to Schram and will be secured by the Option Units.
The Call is exercisable until March 31, 1999 for a purchase price
consisting of (i) 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 June
1, 1998) of the Option Units, plus (ii) payable on January 15, 2004, cash in an
amount equal to (x) the aggregate amount of interest paid by BCLP from April 14,
1998 until January 10, 2004 with respect to $5,000,000 in aggregate principal
amount of Subordinated Debentures (as defined in the Registration Statement) and
(y) the aggregate amount of distributions paid by BCLP II from April 14, 1998
until January 10, 2004 with respect to 250,000 BCLP II Units (as defined in the
Registration Statement). If the Call is not exercised on or before March 31,
1999, then on April 15, 1999, (i) Schram will repay the First Loan in full and
(ii) Walcott will extend to Schram the New Loan. If the Reorganization is not
consummated or completed on or before March 31, 1999, then the Call will be
exercisable until 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 June 1, 1998) 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.
In connection with and upon consummation of the Reorganization, the Call
will be transferred from BCLP to Castle Creek without any action by Schram or
Walcott.
(Page 9 of 11 Pages)
<PAGE> 10
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
1. Merger Agreement, dated as of December 8. 1992, among Boston Celtics
Communications Limited Partnership, Boston Celtics Limited Partnership,
BCCLP Holding Corporation and BCCLP Acquisition Limited Partnership.*
2. Agreement, dated as of February 10, 1993, by and between Paul E.
Gaston, Walcott Partners, L.P. and Draycott, Inc. relating to filing of
Schedule 13D.*
3. Unit Option, dated December 31, 1993, the purchase Units of Boston
Celtics Limited Partnership.**
4. Letter Agreement, dated June 28, 1996, between Paul E. Gaston and
Boston Celtics Limited Partnership.**
5. Letter, dated June 28, 1996, from Paul E. Gaston to Celtics, Inc., in
its capacity as general partner of Boston Celtics Limited
Partnership.**
6. Letter Agreement, dated April 14, 1998, between Walcott Partners, L.P.
and Stephen C. Schram.+
--------------------
* Incorporated by reference from Schedule 13D, filed on February 10,
1993.
** Incorporated by reference from Schedule 13D/A, filed on May 30, 1997.
+ Filed herewith.
(Page 10 of 11 Pages)
<PAGE> 11
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: June 10, 1998
/s/ Paul E. Gaston
-------------------------------
Paul E. Gaston
WALCOTT PARTNERS, L.P.
By: Draycott, Inc.
Its: General Partner
/s/ Paul E. Gaston
-------------------------------
By: Paul E. Gaston
Its: President
DRAYCOTT, INC.
/s/ Paul E. Gaston
-------------------------------
By: Paul E. Gaston
Its: President
<PAGE> 1
WALCOTT PARTNERS, L.P.
33 East 63rd Street
New York, New York 10021
April 14, 1998
Stephen C. Schram
548 Alda Road
Mamaroneck, New York 10543
Re: Letter Agreement relating to Unit Option (Non-Assignable) to Purchase
Units of Boston Celtics Limited Partnership in the name of Stephen C.
Schram, dated December 31, 1993 (as amended on January 8, 1998)
Dear Mr. Schram:
This letter agreement (the "Letter Agreement") memorializes the following
agreements between Walcott Partners, L.P. ("Walcott") and you ("Schram")
relating to the Unit Option (Non-Assignable) to Purchase Units of Boston Celtics
Limited Partnership ("BCLP") in the name of Stephen C. Schram, dated
December 31, 1993 (as amended by the Agreement and Release between Schram 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.
Schram and Walcott agree as follows:
1. OPTION EXERCISE. Not later than May 26, 1998, Schram shall exercise
the Unit Option in full by giving written notice to BCLP pursuant to the
terms of the Unit Option. In such notice, Schram 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."
<PAGE> 2
2. SECURED LOAN. On the Option Exercise Date, (i) Walcott shall lend to
Schram 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 Schram's behalf,
upon receipt of the Walcott Note (as defined herein) executed by Schram,
the First Loan Amount in immediately available funds, and (ii) Schram 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 "Walcott Lien"). The Loan will be due and payable
on the earlier of (a) the date on which Schram 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 Schram. Walcott and Schram agree that the Walcott Note shall be
a "security agreement" under the provisions of Article 8 of the Delaware
Uniform Commercial Code (Del. Code Ann., 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. Schram 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 Schram agree to
take all reasonable steps necessary to effectuate such pledge of the Option
Units, in compliance with all applicable laws and regulations.
3. SCHRAM'S COVENANTS. In consideration of the Loan, Schram agrees to the
following covenants for the periods stated:
(a) Schram 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, Schram shall
sell the Option Units in accordance with the Call.
(b) In connection with the Reorganization (as defined in the Plan),
Schram 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) Schram 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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<PAGE> 3
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, Schram 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 Walcott Lien 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. Schram
shall cause the Option Units to be delivered to BCLP free and clear of all
liens and encumbrances, except for the Walcott Lien, the release of which
is provided for in the preceding sentence. Payments to Walcott and to
Schram 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 Schram or Walcott.
(d) If the Call is not exercised on or before March 31, 1999, then
on April 15, 1999, (i) Schram shall repay the Loan in full, (ii) Walcott
shall lend Schram 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
Schram 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) Schram shall grant to Walcott a first-priority security interest in
the Option Units and all proceeds therefrom. The New Loan will otherwise be
non-recourse to Schram. 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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<PAGE> 4
6. CONDITION. The obligations of Schram 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 Schram an amount
(the "Difference Amount") equal to the difference between the Increased
Loan Amount and the Loan Amount by transferring the Difference Amount to
Schram 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. Schram and Walcott 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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<PAGE> 5
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, Schram 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 Schram or Walcott,
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 Schram 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 Schram, 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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<PAGE> 7
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/ Paul E. Gaston
--------------------------
Paul E. Gaston
Chief Executive Officer
SO AGREED:
By: /s/ Stephen C. Schram
-------------------------
Stephen C. Schram
