JRY CORPORATION & others [Note 1] vs. EDWARD G. LEROUX, JR., & others. [Note 2]

GREANEY, C.J. This appeal involves the ownership of the Boston Red Sox baseball club. The case was heard by a judge of the Superior Court sitting without a jury, who, after a seven-day trial, entered a comprehensive memorandum of decision consisting of seventy-eight pages of findings of fact and thirty-five

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pages of legal analysis. The parties have cross-appealed from the judgment entered pursuant to the memorandum.

The judge's findings of fact are not disputed in any material respect. See Mass.R.Civ.P. 52(a), 365 Mass. 816 (1974); Building Inspector of Lancaster v. Sanderson, 372 Mass. 157, 160 (1977). We shall not attempt to summarize the findings except as they become relevant to particular issues. We provide at this point the following general outline.

The Boston Red Sox baseball club (BRS) is owned by a Massachusetts limited partnership formed pursuant to G. L. c. 109 by an agreement dated May 23, 1978, and amended on October 4, 1980, and September 1, 1982. The three general partners of BRS are Haywood C. Sullivan, Edward G. LeRoux, Jr., and JRY Corporation (JRY), a Delaware corporation with a principal place of business in Dedham (JRY is wholly owned by Jean R. Yawkey). The limited partners of BRS include Ball One, Incorporated (Ball One), a corporation owned by Rogers Badgett; Strike One, Incorporated (Strike One), a corporation owned by both LeRoux and Badgett; Albert F. Curran; and Jean R. Yawkey and John L. Harrington as trustees of the Jean R. Yawkey Trust. [Note 3] These same general and limited partners also control New England Associates (NEA), a Massachusetts limited partnership formed pursuant to an agreement dated August 1, 1982. [Note 4] The NEA partnership essentially mirrors the provisions of the BRS partnership. [Note 5]

The principal antagonists in this dispute are the Yawkey-Sullivan interests (Yawkey group) on the one hand, and the

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LeRoux-Badgett-Curran interests (LeRoux group) on the other. Starting in 1981, serious differences of opinion arose between the two groups over the management of the team and its associated enterprises. These problems centered at first on differing philosophies as to how the BRS partnership should be managed but soon evolved into harsh personality conflicts as well. The disagreements festered throughout 1982 and into 1983 when a series of moves and countermoves by the parties led members of the LeRoux group: (a) to put forth, on June 6, 1983, amendments to the partnership agreements designed to restructure management of the enterprises, and (b) to sign, on May 2, 1983, a letter with one David G. Mugar concerning the possible sale of the interests held by LeRoux and Badgett in BRS and NEA to Mugar. Those events precipitated actions seeking a declaration of the rights of the parties, the trial of which led the judge to restore the status quo existing prior to the June 6 amendments.

The appeals raise three broad issues: (1) whether the judge correctly ruled that the amendments to the partnership agreements put forth by the limited partners in the LeRoux group on June 6, 1983 (June 6 amendments) were invalid; (2) whether the limited partners who proposed the amendments are subject to the involuntary withdrawal provisions of the agreements; and (3) whether LeRoux's actions, in negotiating with Mugar, trigged other provisions of the agreements which would permit his general partnership interests to be bought out by JRY and Sullivan.

1. The Validity of the June 6, 1983, Amendments. The first question concerns the judge's ruling that the June 6 amendments are invalid. The pertinent provisions of the amendments are contained in the Appendix to this opinion at Appendix I. We conclude that the judge's ruling is sound.

(a) Background facts. Due to growing hostility and discontent within the partnerships, Badgett (through Ball One and Strike One), LeRoux (through Strike One), and Curran decided to take unilateral action to change the management and control of BRS and NEA partnerships. These parties (amending limited partners) control a majority of the thirty limited partnership

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units in each of the two partnerships. [Note 6] Prior to June 6, 1983, amendments to the agreements were prepared by counsel for the amending limited partners which purported to alter the existing control and operation of the partnerships by placing their management under the exclusive control of one managing general partner. LeRoux was designated as this managing general partner. The judge found that the June 6 amendments were ineffective on procedural grounds and also substantively invalid because they exceeded the power of amendment conferred upon the limited partners. The LeRoux group disputes these determinations.

(b) Procedural invalidity. In enacting the June 6 amendments, the amending limited partners relied on Section 5.8(b) of the partnership agreements as authority for their actions. See Appendix II. Section 5.8(b), however, is expressly limited by Section 5.8(c) of the agreement (see Appendix II), which provides that the rights described in Section 5.8(b) cannot be exercised until counsel for the partnerships has delivered opinions, see Section 5.8(c)(1) and (2), Appendix II, concluding that the exercise of such rights will not result in the loss of any limited partner's limited liability or adversely affect the partnerships' tax status. (Other ways of satisfying the requirement set forth in Section 5.8(c)(1) and (2) were not met and hence are not involved in this case.)

From the outset of the formation of the partnerships, Curran, although a limited partner, had served as general counsel of BRS. He had also served, on occasion, as personal counsel to LeRoux. With the intensification of hostilities within the partnerships, Curran decided, at a meeting of all the general partners held on May 21, 1983, to resign as general counsel. The previous day Sullivan and Harrington (the latter being associated with the Yawkey group), had asked Curran to restrict his activities or to resign as general counsel due to the possible conflicts of interest he faced. Curran resigned voluntarily, realizing that, as a limited partner, he potentially faced serious

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conflicts of interest, especially if litigation developed, because of his close ties with LeRoux and his interest as a limited partner in having the agreements amended. Curran realized that his interests conflicted with the interests of the Yawkey group whom he also represented as legal counsel. Curran also apparently recognized that any conflict of interest on his part would be exacerbated if he was asked, as general counsel, to deliver the opinions required by Section 5.8(c) as a prerequisite to amendment of the agreements.

On June 1, 1983, the LeRoux group, acting independently and without the knowledge of the other general partners, retained Mr. Samuel Adams as counsel to the partnership. No vote was taken by the other general partners to approve or ratify this appointment. Mr. Adams was made aware of the amendments being prepared by the limited partners and immediately began working on the opinions to be provided by counsel called for in Section 5.8(c), which he delivered on June 6, 1983. The letters expressed "no opinion regarding the validity or enforceability of the Amendment[s]," but did conclude that the rights granted by Section 5.8(b)(1) of the BRS agreement, if exercised, would not result in the loss of any limited partner's limited liability or adversely affect the partnership's tax status.

Despite these opinion letters, the requirements of Section 5.8(c) were not met. Section 5.1(d) of the partnership agreements (see Appendix III) vests the general partners, upon the majority vote, with the sole power "to employ such . . . attorneys . . . necessary or appropriate to carry out the business of the partnership." Since Mr. Adams' appointment was not approved by a majority of the general partners as required by Section 5.1(d), he never lawfully became the partnerships' general counsel. His opinion letters thus failed to fulfill the obligatory requirements of Section 5.8(c).

To circumvent this conclusion, the LeRoux group argues that LeRoux's unilateral appointment of Mr. Adams was valid since the other general partners (JRY and Sullivan), had violated their fiduciary duties by seeking Curran's resignation in bad faith in order to frustrate the limited partners' right to amend the agreements. The short answer to the argument is

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found in the judge's findings (which are supported by the evidence) that Curran's resignation was voluntary and was not brought about by a violation of any fiduciary duty owed the LeRoux group by the Yawkey group. [Note 7] The failure of proper compliance with Section 5.8(c) is decisive of the amendments' validity and renders unnecessary discussion of the other procedural infirmities involved in their passage.

(c) Substantive invalidity. Discussion of this aspect of the June 6 amendments is necessary to set the stage for consideration in part 2 of this opinion of the agreements' involuntary withdrawal provisions. The starting point of the analysis requires focus on Sections 5.8(a) and (b) of the agreements set forth in Appendix II. Section 5.8(a) purports on its face to ban interference by the limited partners in any manner with the general partners' control, conduct, or operations of the partnerships. Section 5.8(b), on the other hand, gives the limited partners, upon their majority vote, certain rights of amendment, reserving other decisions (identified in Section 5.8[d], see Appendix II), for their unanimous approval.

The judge ruled that the June 6 amendments violated the restrictions imposed by Section 5.8(a). The LeRoux group contends that the judge's ruling gives an unduly broad construction to Section 5.8(a). They argue that the section's provisions only restrict amendments by the limited partners which directly involve them in the day-to-day control of the partnerships' affairs and that Section 5.8(b) confers virtually unfettered authority on the limited partners to amend the agreements. We are not persuaded by these contentions.

It is the usual rule that a contract must be interpreted as a whole, King Features Syndicate, Inc. v. Cape Cod Bdcst. Co., Inc., 317 Mass. 652, 654 (1945), and construed so as to give a

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reasonable meaning to each of its provisions, McMahon v. Monarch Life Ins. Co., 345 Mass. 261, 264 (1962). "One who is genuinely searching for the meaning of a document containing two unconditional provisions, one immediately following the other, would favor a reading which reconciles them. Thus, if they produce conflict when both are read as unconditional statements but consistency when one is read as qualifying the other, the latter reading, if otherwise reasonable, would be favored." Kates v. St. Paul Fire & Marine Ins. Co., 509 F. Supp. 477, 485 (D. Mass. 1981).

Adhering to these principles, we view Section 5.8(a) as intended (as its language plainly indicates) to restrict the limited partners from taking any action which would interfere "in any manner with, the control, conduct or operations of the Partnership[s] and [their] business" by the general partners. [Note 8] This interpretation is supported by examination of Section 5.8(b) in light of Section 5.8(d), which provides that certain amendments to the agreements may only be made by unanimous limited partner approval. The latter amendments are identified in Section 5.8(d) as those which: (1) increase the liability of the limited partners; (2) change their capital contributions; (3) alter the rights and interests of the limited partners in net profits and losses; and (4) alter their rights upon dissolution. We think Section 5.8(d), requiring unanimity among the limited partners as to decisions which affect their fundamental rights, was meant (in the context of the agreements) to set outside limits on the amendment authority of the limited partners. Since a unanimous vote of the limited partners is required to affect their basic rights it would be unreasonable, in the absence of much more specific language showing an intentional

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departure from the usual structure of limited partnerships, to interpret Section 5.8(b) to permit a change in the fundamental rights of the general partners by a majority vote of the limited partners. [Note 9] We conclude that Section 5.8(a) places an umbrella over the power of amendment stated in Section 5.8(b), that the provisions of the latter, when read in conjunction with Section 5.8(d), are intended only to confer upon the limited partners the power to amend the agreements by majority vote to affect their rights inter se, and then at most only in respects which do not impinge significantly upon the essential interests of the general partners, and that Section 5.8(d) further restricts this power by requiring a unanimous vote of the limited partners for certain specified amendments. The other arguments by the LeRoux group do not persuade us that Section 5.8(b) should be given any broader interpretation. [Note 10]

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In planning their moves, the limited partners apparently recognized that they lacked authority to change Section 5.8(a), and consequently that a different method of gaining control had to be devised. That method involved formulating amendments which named LeRoux as "Managing General Partner," provided that any successor to LeRoux in that office similarly be appointed by a majority in interest of the limited partners, and conferred upon LeRoux the exclusive right to manage virtually all phases of the partnerships' business. [Note 11] As a result of the amendments, the majority general partner vote now needed to conduct business would no longer be required and the views of the other general partners (JRY and Sullivan) would become strictly advisory. [Note 12] The machinery constructed by the amendments, seen for what it really is, displaces control of the enterprises through majority vote of the general partners and substitutes control by a single general partner (LeRoux), who in turn is subject to control by the limited partners comprising the LeRoux group. What the LeRoux group once characterized as "a drastic change in management" is strictly forbidden by Section 5.8(a). Having so concluded, we have no need to examine the other arguments concerning the substantive invalidity of the amendments.

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2. Involuntary Withdrawal. The next cluster of issues concerns whether the amending limited partners (Strike One, Ball One and Curran) are subject to the involuntary withdrawal provisions of Section 8.3(a) (see Appendix IV) and whether LeRoux should be allowed to vote on such withdrawal. The judge concluded that the limited partners' conduct did not provide grounds for involuntary withdrawal. He perceived "a meaningful distinction . . . between what the amending limited partners attempted to do and what the effect of their actions, if valid, would be" (emphasis in judge's decision). Based on that distinction, the judge decided that the conduct of the limited partners would bring into play the involuntary withdrawal provisions only if the amendments were valid. [Note 13] He further reasoned that the limited partners should be afforded the right to seek to amend the agreements and litigate the validity of their amendments so long as they acted in good faith and with reasonable cause to believe that the amendments were valid. We conclude, however, that Section 8.3(a) is applicable.

Sections 8.3(a) and 5.8(a) are cognate and connected and have the joint effect of permitting the general partners to remove any limited partner who interferes with the general partners' broad and exclusive rights to manage the enterprise. There is no requirement in either Section 5.8(a) or in Section 8.3(a) that, before the agreements' withdrawal provisions are triggered, the actions therein proscribed be undertaken by the limited partners in bad faith or with an unreasonable belief that they were valid. Instead, the pertinent language of Section 8.3(a) focuses on the occurrence of a specified event ("interference . . . in the management of Partnership affairs") and establishes that fact as the condition to its operation. The amending limited partners are deemed to have been aware of the section's restrictions and they mounted their coup, suddenly and without specific warning or discussion with the general partners other than LeRoux, in the face of its explicit language. Doubtless some tolerance

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should be afforded limited partners who seek to exercise permitted rights of amendment. The limited partners (who are experienced businessmen) should have realized, however, that their conduct was not permitted by the agreements, and, perhaps, that the amendments were not legally authorized. We see no reason why they should be relieved from the consequences of their actual conduct by judicial rewriting of Section 8.3(a) of the agreements to express exculpatory standards of good faith or reasonableness. [Note 14]

There was actual interference in the partnerships' management as proscribed by Sections 5.8(a) and 8.3(a). The actions of the amending limited partners went far beyond the drafting of amendments and their proposal to the general partners. The facts found by the judge establish that the limited partners, in disregard of the rights of JRY and Sullivan and without the latters' knowledge, actually took over management of the club and maintained control until the issuance of a preliminary injunction. In this respect, the amending limited partners began assuming managerial prerogatives even prior to putting forth the amendments by making contact with Mr. Adams to engage him as counsel to the partnerships and by inquiry of one Richard O'Connell whether he was available to become "manager" of BRS. Continuing along these lines, the amending limited partners, relying on the amendments as effective in all respects, hired Mr. Adams as counsel for the partnerships, appointed LeRoux managing general partner, hired O'Connell as the new general manager, informed the BRS staff that LeRoux was in charge, and introduced the new management at a press conference

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attended by members of the national and local news media. [Note 15] Moreover, on June 6 LeRoux authorized and directed the treasurer of the Red Sox, without consulting anyone in the Yawkey group, to draw a sizeable check payable to Mr. Adams or his law firm. These actions strike us as the precise sort of interference proscribed by Section 5.8(a), which invokes for the general partners the rights (and for the limited partners the consequences) provided by Section 8.3(a). [Note 16]

We come then to the question whether involuntary withdrawal can be accomplished without LeRoux's vote since the first paragraph of Section 8.3 (see Appendix IV) requires the unanimous consent of the general partners to effect an involuntary withdrawal. The judge concluded that, even assuming that the limited partners' actions constituted grounds for involuntary withdrawal, LeRoux retained his right to vote. The judge reasoned that, despite LeRoux's connections with the amending limited partners, he had not violated any fiduciary duty owed to the other general partners. We disagree.

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LeRoux, as a general partner of BRS and NEA, owed to the other general partners a duty of utmost good faith and loyalty. See Cardullo v. Landau, 329 Mass. 5, 8 (1952); DeCotis v. D'Antona, 350 Mass. 165, 168 (1966); Donahue v. Rodd Electrotype Co., 367 Mass. 578, 593 (1975). That rigorous duty received its classic formulation by Chief Judge Cardozo in Meinhard v. Salmon, 249 N.Y. 458, 463-464 (1928), in these terms: "[C]opartners, owe to one another, while the enterprise continues, the duty of the finest loyalty. Many forms of conduct permissible in a workaday world for those acting at arm's length, are forbidden to those bound by fiduciary duties. . . . Not honesty alone, but the punctilio of an honor the most sensitive, is then the standard of behavior." This strict fiduciary duty restricts the actions of partners so that they "may not act out of avarice, expediency or self-interest in abrogation of their duty of loyalty to the other [partners]." Donahue, 367 Mass. at 593. General authorities on the fiduciary duties of partners also repeat the principles. See Crane & Bromberg, Partnership Section 68 (1968); Beane, The Fiduciary Relationship of a Partner, 5 J. Corp. Law 483 (1980); Note, Fiduciary Duties of Partners, 48 Iowa L. Rev. 902 (1963). In the corporate area (where generally speaking a somewhat less strict fiduciary duty is involved, see the Donahue case at 593-594), it has been held that "[w]here [a] director's duty of loyalty to the corporation is in conflict with his self-interest the court will vigorously scrutinize the situation." American Discount Corp. v. Kaitz, 348 Mass. 706, 711 (1965). See Sagalyn v. Meekins, Packard & Wheat Inc., 290 Mass. 434, 439 (1935); Winchell v. Plywood Corp., 324 Mass. 171, 177-178 (1949). A finding of disabling conflict does not depend upon a finding of fraud. See the Sagalyn case, 290 Mass. at 439.

In American Discount Corp. v. Kaitz, supra, one William Leventhal, while treasurer of American Discount, improperly dissipated corporate assets. In a vote taken by the board of directors to hire counsel to institute an action against the corporation's auditors, Leventhal voted in the negative, thereby helping to defeat the measure. In holding that Leventhal's vote must be disqualified, the court stated: "Simply analyzed, the

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situation is revealed to be one of a clear conflict of interest. By his conduct Leventhal had brought himself into an antagonistic position to that of the corporation. It was in Discount's interest that an action be brought to repair the damage to its assets charged against the defendants. It was in Leventhal's interest that his conduct not be disclosed, and that its consequences be kept concealed. It thus stands emphasized that in his vote against hiring counsel Leventhal in substance was voting against the bringing of an action based upon his own shortcomings. In the very interest of fairness it was manifestly unjust for him to take a stand against redressing the wrongs for which he was mainly responsible." 348 Mass. at 711.

LeRoux's conduct amounted, as has been noted, to far more than proposals for restructure of the partnerships and the frank discussion of those proposals with the other general and limited partners. His plans, once perfected, were not presented, as would be permissible, merely for discussion in an appropriate fashion, perhaps supplemented (in the event of disagreement) by a request (pursuant to G. L. c. 231A) for declaratory relief as to their propriety, but were designed to confront the general partners with a fait accompli, announced in a flamboyant manner, which went substantially beyond acceptable behavior. By his conduct LeRoux violated fiduciary duties owed the other general partners. LeRoux has always maintained very close associations with the amending limited partners, [Note 17] and there is no doubt that he purposely aligned his interests with them to strip the other general partners of their management rights. As discussed, the amendments were destructive of the rights reserved to the general partners. The amendments would have acted to the benefit of the amending limited partners and would

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have equally tended to LeRoux's financial advantage. [Note 18] The actions taken by LeRoux were direct and adverse to the interests of the other general partners to whom he owed a duty of strict loyalty. See Winchell v. Plywood Corp., 324 Mass. at 177-178. In the circumstances, and following the rule of the Kaitz case, LeRoux could not be expected to vote objectively on the question of withdrawal and it would be manifestly unjust to the other general partners to allow him to do so. [Note 19]

3. The Mugar Letter and Section 7.4(b) Buy-out Provisions. The final question concerns whether the so-called "Mugar letter" constituted an "attempt to sell" LeRoux's general partnership interests. Under Section 7.4(b) of the agreements (see Appendix V), an attempt to sell would have enabled JRY and Sullivan, if they so desired, to purchase LeRoux's general partnership interest.

The facts are as follows. Dating as far back as the spring of 1982, LeRoux and Badgett had made known to JRY and Sullivan that they wished to sell their interests in the partnerships. This desire was reaffirmed at a meeting of the general partners held on December 12, 1982. Through the efforts of a Red Sox player, a meeting was arranged between David G. Mugar, Harrington, and Sullivan on January 27, 1983. (Mugar in July or August, 1982, had had several discussions with the player about acquiring an interest in the Red Sox.) At the January 27 meeting Mugar expressed an interest in purchasing a BRS general partnership interest. Sullivan and Harrington

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indicated that a partnership interest would probably become available within a year. Although he did not have a clear recollection of the matter, Mugar believed it was LeRoux's general partnership interest that was being discussed.

On April 12, 1983, a few weeks after seeing an article in a local newspaper in which Mugar was identified as having an interest in buying into the Red Sox, LeRoux made contact with Mugar. Mugar expressed a desire to purchase LeRoux's general partnership interest. Negotiations followed between Mugar, LeRoux and Badgett culminating in the "Mugar letter."

This letter, signed by Mugar and addressed to Badgett and LeRoux, indicated that some negotiations had taken place and set a price of $1,000,000 for each BRS limited partnership interest and $5,000,000 for LeRoux's general partnership interest. The letter added, however, that both of these prices were "subject to such adjustments for pro-rated and similar items as we may agree upon." The letter went on to note that Mugar needed "additional time and information to reach a final decision" whether to purchase those interests. The letter stated that "the purpose of this letter is to confirm that you have granted me the exclusive right to negotiate with you for the purchase of such interests . . . upon the following terms and conditions, and if we reach agreement as a result of such negotiations, the exclusive right to purchase such interests" (emphasis supplied). The letter detailed some terms and conditions that the parties had agreed upon and gave Mugar the exclusive right, through May 31, 1983, "to elect to purchase the entire limited partnership in the Red Sox" and NEA owned by Ball One and Strike One, as well as LeRoux's general partnership interest. This right, however, was expressly made "[s]ubject to our arriving at [the] definitive Purchase and Sale agreement described below which is mutually acceptable to you [LeRoux and Badgett] and to me [Mugar]." In consideration of what was described as the "Exclusive Right to Negotiate," Mugar stated, "I am paying you an aggregate Deposit of $100,000, which will be applied on account of the purchase price if the purchases and sales contemplated hereby are consummated." The deposit was to be returned upon the occurrence

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of any one of a number of specified conditions, one of which required that all the terms of sale be "reasonably satisfactory" to Mugar. The letter concluded by stating an understanding that Badgett and LeRoux would not negotiate with anyone else during the agreed negotiation period and also asked for confidentiality, with certain exceptions, such as disclosure to the other general partners in order to obtain their consent to any sale. Both LeRoux and Badgett signed a counterpart of this letter under the legend "Confirmed and Agreed to." Mugar never paid the deposit required by the letter, nor were any subsequent agreements ever reached. The Mugar letter was shown to Sullivan and Harrington on May 6, 1983, during a meeting with Mugar at Fenway Park.

On May 10, 1983, JRY and Sullivan struck back by each sending a letter to LeRoux entitled "Acceptance of Offer to Purchase Edward G. LeRoux, Jr.'s General Partnership Interest". Both claimed that they had received notice (in the form of the Mugar letter) of LeRoux's "desire and attempt to sell or otherwise dispose of his entire interest as a General Partner in BRS and in New England Associates." These letters (which are identical) describe the Mugar letter as "a written option to purchase agreement", and claim that it made applicable their Section 7.4(b) purchase rights. On May 20, 1983, LeRoux's attorneys delivered to JRY and Sullivan copies of a letter advising LeRoux that the Yawkey group's May 10 letters were of no effect.

The question whether the Mugar letter triggered rights conferred by Section 7.4(b) requires measuring the effect of the letter against the imprecise words "attempts to sell" chosen by the parties as the foundation fact for a buy-out. [Note 20]

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The provision's history supplies some insight into its meaning. As previously noted, see note, 20, supra, the original version of Section 7.4(b) of the BRS agreement called for buy-out if a general partner did anything which expressed a "desire[] to . . . sell" his general partnership interests. In 1982, however, the provision was amended, see note 20, supra, to insert an "or" at an important point and to add after the word "or" and before the verb "sell" the words "attempts to." These changes significantly altered the meaning of the provision and furnish some indication that the parties, by adopting the changes, wished to impose a higher threshold on the exercise of compelled buy-out rights. By the changes, we think the general partners granted each other reasonable latitude to ascertain, through contact and negotiation with prospective purchasers, the fair market value of a general partnership interest. The revised provision would also appear to contemplate enough negotiations between the partner who is thinking of selling and any prospective purchaser to reach some definitive statement of terms. That statement would allow the remaining general partners to decide intelligently whether they desired either (a) to allow the sale to be consummated and to accept the purchaser as a new general partner under the assignment and transfer provisions of Section 7.4(a), [Note 21] or (b) to exercise their buy-out rights. In either alternative, it would be important to all parties to establish the fair market value of a general partnership interest.

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As we have said in a slightly different context "Until the documents are signed and delivered the game is not over. Businessmen would be undesirably inhibited in their dealings if expressions of intent and the exchange of drafts were taken as legally binding agreements." Tull v. Mister Donut Dev. Corp., 7 Mass. App. Ct. 626, 632 (1979).

The Mugar letter, in our view, did not go beyond the stage of testing the waters. The letter clearly does not create a binding purchase and sale agreement since several important terms are left to future agreement. Before an enforceable agreement arises "[a]ll [its] essential terms . . . must be definite and certain so that the intention of the parties may be discovered, the nature and extent of their obligations ascertained, and their rights determined." Cygan v. Megathlin, 326 Mass. 732, 733-734 (1951), and cases cited. For the same reasons, the letter does not satisfy the requirements for a binding option to purchase. See Lucey v. Hero Intl. Corp., 361 Mass. 569, 574 (1972). For example, the letter failed to specify the time and manner of payment, made the purchase price "subject to such adjustment for pro-rated and similar items as we may agree upon," without identifying the items subject to adjustment, and required all the terms to be "reasonably satisfactory" to Mugar. Nor does it manifest the attributes usually associated with a right of first refusal. Compare Callaghan v. Hawkes, 121 Mass. 298 (1876); Seward v. Weeks, 360 Mass. 410 (1971). Thus, we do not have a situation where "the terms of the agreement had been well rounded out and the formal agreement, as Mr. Justice Holmes so aptly characterized it, remained to be executed as a mere `additional wheel in the machinery.' . . . In this case the machine was lacking some of its most vital parts." Blair v. Cifrino, 355 Mass. 706, 710 (1969), quoting from Drummond v. Crane, 159 Mass. 577, 579 (1893). The letter is what it purports to be, the grant by LeRoux and Badgett to Mugar, for a period of thirty days, of an "Exclusive Right to Negotiate" for the sale of LeRoux and Badgett's partnership interests. In so doing, the letter, and the acts leading up to it, did nothing more than place the parties in a state of "imperfect negotiation," Rosenfield v. United States Trust Co.,

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290 Mass. 210, 217 (1935), and constituted "an initiatory step . . . not an act by which [the parties to it] meant [finally] to be bound." Benton v. Springfield Y.M.C.A., 170 Mass. 534, 537 (1898).

There is some force in the argument that a final and enforceable purchase and sale agreement, definite option or right of first refusal may not be needed to bring into effect the buy-out provisions contained in Section 7.4(b). The language under study may have been clumsily drafted or purposely left ambiguous in order to permit the parties some room to shop around. We conclude that the latter is the more likely, and that the tentative steps involving negotiation represented by the Mugar letter are insufficient to compel a forced sale of LeRoux's general partnership interests. [Note 22] We need not venture any further to resolve the final issue in the case.

4. Disposition. The judgment is a comprehensive and detailed four-page declaration of the rights of the parties. Our review necessitates that part VI of the judgment be vacated and that part VII be supplemented. [Note 23] The judgment is modified by striking part VI

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thereof and substituting the following: "VI. As to the Plaintiffs' Second Counterclaim: (1) The defendants Ball One, Strike One and Curran have interfered in the management of the BRS and NEA by their adoption of and their conduct in carrying out the Amendments; (2) The general partners, if they so desire, may effect, within a reasonable time, the involuntary withdrawal of Ball One, Strike One and Curran from BRS and NEA pursuant to Section 8.3 of the partnership agreements, since those limited partners have engaged in proscribed interference in the management of the partnerships; (3) LeRoux is not to participate in the deliberations or vote on any resolution of the general partners to effect involuntary withdrawal; and (4) The plaintiffs' second counterclaim is otherwise dismissed." In addition there is to be added to part VII of the judgment the following: "VII(1)(A) The Mugar letter, however, shall be admitted as evidence of the fair market value of general and limited partnership interests in any appraisal or arbitration proceedings conducted pursuant to the various provisions of the agreements." As so modified and supplemented the judgment is affirmed. Each party is to bear his or its costs of appeal.

So ordered.

APPENDIX.

I

JUNE 6, 1983, AMENDMENTS TO THE BRS PARTNERSHIP AGREEMENT

"The Partnership Agreement is hereby amended in accordance with Section 5.8(b)(1) thereof as follows:

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"1. Article I is hereby amended by adding the following defined term: "`Managing General Partner' means Edward G. LeRoux, Jr. of 3026 Pinetree, Winter Haven, Florida 33880, or his successor as provided in Section 5.1(b)."

[There next follows a series of Amendments deleting the words "General Partners" wherever they appear in the agreement and substituting the words "Managing General Partner" (e.g. Edward G. LeRoux, Jr.) in their place. These substitutions had the effect of transferring the numerous substantial powers over control and management of the partnership's affairs from all the general partners to LeRoux as the new managing general partner.]

Section 5.1 Management of Partnership Business.

"(a) Except as otherwise expressly provided herein, the Managing General Partner shall have the exclusive right to manage the business of the Partnership and is hereby authorized to take any action of any kind to do anything and everything it deems necessary or desirable in connection with the business of the Partnership. Except as otherwise expressly provided herein, no General Partner other than the Managing General Partner shall have any control over the business of the Partnership.

"(b) In the event of the death, dissolution or any other event resulting in the inability of the existing Managing General Partner to perform its duties hereunder, a new Managing General Partner may be selected from the remaining General Partners by a majority in interest of the Limited Partners. Any such new Managing General Partner shall succeed to and assume all rights, duties and obligations of the Managing General Partner as provided in this Agreement."

Section 5.2 General Manager

"(a) The Managing General Partner shall appoint a general manager (the "Manager") who will have the exclusive right to exercise the Managing General Partner's authority to manage the Partnership's business. Except as otherwise expressly provided herein, the Manager is hereby authorized to take any action of any kind and to do anything and everything it deems necessary or desirable to manage, conduct and operate the Partnership's business without the consent of the General Partners, and the General Partners shall not interfere with, or exercise any control over, the Manager, provided, however, that the General Partners may, by unanimous agreement only, (i) overrule any business decision made by the Manager or any action or inaction by the Manager as to any matter in connection with business of the Partnership and (ii) cause the Manager to make any business decision or to take any action in connection with the Partnership's business as may be specified by such unanimous agreement."

[There follows an extensive specification of the duties of the club's "manager" which involve control over all phases of the day-to-day operations of the club. For purposes of this appeal the June 6 amendments made identical changes in the NEA partnership.]

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II.

Section 5.8 Rights and Obligations of the Limited Partners

"(a) The Limited Partners shall take no part in, or interfere in any manner with, the control, conduct or operations of the Partnership and its business. The Limited Partners shall have no right or authority to act for or bind the Partnership.

"(b) The Limited Partners shall have the right, exercisable by written notice to the General Partners, by a vote of a majority in interest of the Limited Partners to:

(1) Amend the Agreement, subject, however, to the provisions of subsection (d) of this Section 5.8. The General Partners shall cause to be prepared an instrument amending this Agreement, which instrument shall contain the substance of the amendment made to this Agreement by the Limited Partners pursuant to the provisions of this Section 5.8(b)(1) and, if, required, to cause to be prepared and filed an amended Certificate reflecting the provisions of such amendment;

(2) Approve or disapprove of any sale (other than a sale or other disposition of any or all of the assets of the Partnership by any mortgagee, pledgee or secured party) of all or substantially all of the assets of the Partnership.

"(c) None of the rights described in subsection (b) of this Section 5.8 may be exercised until such time as the conditions set forth in both (1) and (2), below, have occurred:

(1) A judicial determination is obtained that neither the grant nor the exercise of such rights will result in the loss of any Limited Partners's limited liability, or counsel for the Partnership has delivered an opinion to the Partnership and to the Limited Partners to that effect; and

(2) That the grant or exercise of such rights will not adversely affect the tax status of the Partnership as a partnership for Federal income tax purposes and a favorable ruling to that effect has been obtained from the Internal Revenue Service, or counsel for the Partnership has delivered an opinion to the Partnership and to the Limited Partners to that effect.

"(d) The unanimous consent of the Limited Partners shall be required to amend the Agreement, if the effect of such amendment would be to increase the liability of the Limited Partners or to change (i) the Capital Contributions required of the Limited Partners, (ii) their right and interest in the Net Profits and Net Losses of the Partnership, or (iii) their rights upon dissolution and liquidation of the Partnership."

III.

Section 5.1 Authority of General Partners "Except as otherwise specifically provided . . . all decisions representing any matter set forth herein, or otherwise affecting or arising out of the conduct

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of the business of the Partnership, shall be made by a majority vote of the General Partners. The General Partners shall have the exclusive right and full authority to manage, conduct and operate the Partnership's business. Without limiting the foregoing, the General Partners shall be authorized: . . .

"(d) To employ such agents, employees, managers, accountants, attorneys, consultants and other persons necessary or appropriate to carry out the business of the Partnership and to pay such fees, salaries, wages, expenses and other compensation to such persons as they shall, in their sole discretion, determine."

IV.

Section 8.3 Involuntary Withdrawal of a Limited Partner "By unanimous consent, the General Partners may, in their discretion, effect the involuntary withdrawal of a Limited Partner from the Partnership upon the occurrence of any of the following events:

"(a) The unauthorized interference by such Limited Partner in the management of Partnership affairs [Other grounds for involuntary withdrawal are omitted]."

V.

Section 7.4 Assignment of a General Partner's Interest (Original version in the BRS Agreement)

"(b) In the event any General Partner desires to retire, withdraw, transfer, assign, sell, exchange or otherwise dispose of all or any part of his General Partner interest in the Partnership, or in the event of the death of an individual General Partner, the applicable interest of such General Partner (the Transferring General Partner) shall automatically be deemed to be offered for purchase to the remaining General Partner(s), at their option, [for a price and upon terms thereafter designated]."

Section 7.4 Assignment of a General Partner's Interest (As Amended by Second Amendment to the BRS Agreement)

"(b) In the event any General Partner desires to retire, withdraws, or attempts to transfer, assign, sell, exchange or otherwise dispose of all or any part of his General Partner interest in this Partnership or in the Boston Red Sox Baseball Club, or in the event of the death of an individual General Partner, the applicable interest of such General Partner (the Transferring General Partner) shall automatically be deemed to be offered for purchase to the remaining General Partner(s), at their option, [for a price and upon terms thereafter designated]."