EXHIBIT 10(k)
[SOTHEBY'S LETTERHEAD]
August 18, 1988
York Avenue Development, Inc.
0000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Xxxxxxx York Avenue Associates, Inc.
000 Xxxx Xxxx Xxxx Xxxx
Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000-0200
Attention: Xxxxxx X. Xxxxxx
Gentlemen:
We refer to the Financing and Guarantee Agreement (the "Agreement"),
dated as of October 1, 1987, among Sotheby's, Inc. ("Sotheby's"), York
Avenue Development, Inc. ("York") and Taubman York Avenue Associates, Inc.
("Taubman") with respect to the proposed construction of a mixed-use tower
at 0000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx (the "Project"), and each of us
agrees as follows:
1. If Xxxx is unable to obtain third party financing, as may be
required in connection with the pre-development and construction phases of
the Project, Sotheby's shall have the right (but not the obligation) to
loan York all funds which are otherwise unavailable through such third
party financing, and York shall (but, in each case, only with the prior
written approval of Taubman, which may be withheld by Xxxxxxx for any
reason or for no reason) borrow such funds from Sotheby's. In the case of
any such borrowing from Sotheby's, Xxxx shall pay interest to Xxxxxxx's at
a rate equal to not more than Sotheby's "cost of funds" provided such rate
is acceptable to Taubman in its sole and absolute judgment. If all of the
terms and conditions of such loans from Sotheby's to York are acceptable to
Xxxxxxx, in its sole and absolute judgment, Taubman shall guarantee the
repayment of such loans.
2. If Taubman loans funds to York under the Agreement, Xxxx has
agreed to pay interest on such loans at the rate of one percent in excess
of The Chase Manhattan Bank's prime commercial lending rate.
Notwithstanding this agreed upon interest rate, if, in lieu of York
obtaining financing from an institutional lender or, as provided in
paragraph 1 of this letter, from Sotheby's in connection with the
construction phase of the Project, Taubman loans funds to York for the
construction of the Project and such funds were borrowed by Xxxxxxx for the
purpose of loaning such borrowed funds to York for the construction of the
Project, York shall pay interest on such loans from Taubman at a rate equal
to Xxxxxxx'x "cost of funds".
3. For the purpose of this letter, "cost of funds" means all costs
to Taubman or Sotheby's, as the case may be, of obtaining such funds from a
third party including, without limitation, interest, fees, premiums,
penalties, taxes and attorney's fees and disbursements.
York Avenue Development, Inc.
Taubman York Avenue Associates, Inc.
August 18, 1988
Page 2
The Agreement, except as hereby modified, is in all respects ratified
and confirmed and remains in full force and effect.
Very truly yours,
Agreed to: SOTHEBY'S, INC.
YORK AVENUE DEVELOPMENT, INC. By: /s/Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx,
By: /s/Xxxxxxx X. Xxxxxxx President
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Xxxxxxx X. Xxxxxxx
President
Dated: August 18, 1988
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TAUBMAN YORK AVENUE ASSOCIATES, INC.
By: /s/Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx,
President
Dated: August 18, 1988
