UNITED STATES | ||
SECURITIES AND EXCHANGE COMMISSION | ||
WASHINGTON, D.C. 20549 | ||
FORM 8-K |
CURRENT REPORT | ||
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||
July 6, 2015 | ||
(Date of Report) | ||
July 1, 2015 | ||
(Date of Earliest Event Reported) | ||
Sotheby's | ||
(Exact name of registrant as specified in its charter) | ||
Delaware | 1-9750 | 38-2478409 |
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
1334 York Avenue | ||
New York, NY | 10021 | |
(Address of principal executive offices) | (Zip Code) | |
(212) 606-7000 | ||
(Registrant's telephone number, including area code) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: | |||||
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | ||||
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | ||||
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | ||||
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
• | As of the Payment Date in July 2020 (five years from the inception of the Loan Agreement), the Loan-to-Value (“LTV”) Ratio may not exceed 65% (the “Maximum LTV”) based on the then-outstanding principal balance of the Loan. If the LTV Ratio exceeds the Maximum LTV, Borrower may, at its option, post cash or a letter of credit or pay down the Loan without any prepayment penalty or premium, in an amount that will cause the LTV Ratio not to exceed the Maximum LTV. |
• | At all times during the term of the Loan, the Debt Yield will not be less than 8.5% (the “Minimum Debt Yield”). If the Debt Yield falls below the Minimum Debt Yield, Borrower has the option to post cash or a letter of credit or prepay the Loan without any prepayment penalty or premium, in an amount that will cause the Loan to achieve the Minimum Debt Yield. |
• | The Loan Agreement contains a cash sweep if Sotheby’s corporate credit rating from Standard & Poor’s Rating Services is downgraded to “BB-”, a requirement to deposit a certain amount of debt service reserves if the rating is downgraded to “B+” or “B”, and a pay down of the Loan such that the LTV Ratio is at most 65% if the rating is downgraded to lower than “B”. |
• | At all times during the term of the Loan, Sotheby’s will, subject to the cure period set forth in the Loan Agreement and in the Guaranty, maintain a net worth of at least $425 million, tested annually by Agent. If, however, Sotheby's fails to maintain the required minimum net worth, it will have 60 days after notice from Agent to cure such default. |
Exhibit No. | Description of Exhibit |
10.1 | Loan Agreement, dated as of July 1, 2015, among 1334 York, LLC, as Borrower, HSBC Bank USA, National Association, as Agent, HSBC Bank USA, National Association and Industrial and Commercial Bank of China, Limited, New York Branch, as Lenders and collectively, as Lead Arranger, and the other Lenders from time to time a party thereto. |
10.2 | Guaranty of Recourse Carveouts, dated as of July 1, 2015, by Sotheby’s, as Guarantor, for the benefit of HSBC Bank USA, National Association, as Agent. |
10.3 | Environmental Indemnity Agreement, dated as of July 1, 2015, between 1334 York, LLC and Sotheby’s, in favor of HSBC Bank USA, National Association, as Agent. |
SOTHEBY'S | |||
By: | Jonathan Olsoff | ||
Jonathan Olsoff | |||
Senior Vice President, | |||
Worldwide General Counsel and Corporate | |||
Secretary | |||
Date: | July 6, 2015 |
Exhibit No. | Description of Exhibit |
10.1 | Loan Agreement, dated as of July 1, 2015, among 1334 York, LLC, as Borrower, HSBC Bank USA, National Association, as Agent, HSBC Bank USA, National Association and Industrial and Commercial Bank of China, Limited, New York Branch, as Lenders and collectively, as Lead Arranger, and the other Lenders from time to time a party thereto. |
10.2 | Guaranty of Recourse Carveouts, dated as of July 1, 2015, by Sotheby’s, as Guarantor, for the benefit of HSBC Bank USA, National Association, as Agent. |
10.3 | Environmental Indemnity Agreement, dated as of July 1, 2015, between 1334 York, LLC and Sotheby’s, in favor of HSBC Bank USA, National Association, as Agent. |