Exhibit 10.3

 

TERMINATION AGREEMENT AND RELEASE

 

This TERMINATION AGREEMENT AND RELEASE (this “Agreement”), dated as of May 25,
2016, is by and among New York REIT, Inc., a Maryland corporation (the
“Company”), New York Recovery Operating Partnership, L.P., a Delaware limited
partnership (the “Operating Partnership” and together with the Company, the
“NYRT Parties”), New York Recovery Properties, LLC, a Delaware limited liability
company (the “Manager”), and New York Recovery Advisors, LLC, a Delaware limited
liability company (the “Advisor” and together with the Manager, the “AR Capital
Parties” and the AR Capital Parties together with the NYRT Parties, the
“Parties” and individually, a “Party”).

 

W I T N E S S E T H:

 

WHEREAS, the Company, the Operating Partnership and the Advisor are party to
that certain Seventh Amended and Restated Advisory Agreement dated as of
June 26, 2015, as amended by that certain Amendment No. 1 dated as of April 25,
2016 (as may be amended, modified or supplemented from time to time, the “Giants
Advisory Agreement”), which terminates by its terms on closing (the “Closing”
and the date of the Closing, the “Closing Date”) of the transactions pursuant to
that certain Master Combination Agreement, dated as of May 25, 2016, by and
among the Company, the Operating Partnership, JBG Properties Inc., JBG/Operating
Partners, L.P. and their affiliates named therein (the “Master Combination
Agreement”);

 

WHEREAS, the Company, American Realty Capital New York City REIT, Inc., a
Maryland Corporation, and American Realty Capital New York City REIT II, Inc., a
Maryland Corporation are party to that certain Amended and Restated Investment
Opportunity Allocation Agreement, dated as of July 9, 2015 (the “Investment
Allocation Agreement”), which terminates, as to the Company, by its terms on the
termination of the Giants Advisory Agreement, which terminates by its terms on
the Closing;

 

WHEREAS, the Company, the Operating Partnership and the Manager are party to
that certain Amended and Restated Management Agreement dated as of September 2,
2010 (as may be amended, modified or supplemented from time to time, the
“Property Management Agreement”);

 

WHEREAS, the Company and the Advisor are party to that certain Tax Indemnity
Agreement dated as of December 31, 2013, and that certain Tax Indemnity
Agreement dated as of December 28, 2012 (each as amended, modified or
supplemented from time to time, collectively the “Tax Indemnification
Agreements”);

 

WHEREAS, the Parties wish to terminate the Property Management Agreement and the
Tax Indemnification Agreements and reaffirm the termination of the Giants
Advisory Agreement and Investment Allocation Agreement all as of the Closing
Date on the terms, and subject to the conditions, set forth in this Agreement;

 

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WHEREAS, the Parties wish to affirm that all annual or incentive compensation
owed to employees of the Advisor for the fiscal year 2015 shall be fully paid on
or prior to the Closing Date; and

 

WHEREAS, the AR Capital Parties have in their possession certain furniture,
fixtures and other equipment used in connection with their respective businesses
(the “FF&E”).

 

NOW, THEREFORE, in consideration of the premises and covenants contained herein
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Parties, intending to be legally bound,
hereby agree as follows:

 

1.             Termination of the Property Management Agreement.  Each of the
NYRT Parties and the Manager hereby agrees and acknowledges that, effective as
of the Closing Date, the Property Management Agreement is hereby irrevocably and
unconditionally terminated in its entirety and shall be of no further force or
effect, and each party thereto shall have no further rights, liabilities or
obligations of any nature thereunder; provided, however, that (i) Sections 5.4
and 6.2 of the Property Management Agreement shall survive such termination and
(ii) the Manager shall be entitled to receive all compensation which may be due
to it under the Property Management Agreement up to the Closing Date, which
compensation shall be fully paid by the NYRT Parties on or prior to the Closing
Date, provided, further, that this Agreement shall constitute any prior written
notice required under the Property Management Agreement.

 

2.             Termination of Giants Advisory Agreement.  Each of the NYRT
Parties and the Advisor hereby acknowledges and agrees that, effective as of the
Closing Date, the Giants Advisory Agreement is irrevocably and unconditionally
terminated in its entirety by its terms upon the Closing and shall be of no
further force or effect, and each party thereto shall have no further rights,
liabilities or obligations of any nature thereunder; provided, however, that the
provisions of Sections 8, 15 and 19 through 31 (inclusive) of the Giants
Advisory Agreement shall survive the termination of the Giants Advisory
Agreement; provided, further, that this Agreement shall constitute any prior
written notice required under Section 17 of the Giants Advisory Agreement.

 

3.             Waiver of Amounts Related to Master Combination Agreement
Transactions.  Each of the NYRT Parties and the Advisor hereby agrees and
acknowledges that no amounts shall be payable to the Advisor under the Giants
Advisory Agreement solely as a result of the transactions contemplated by the
Master Combination Agreement.  Notwithstanding the 30-day period set forth in
Section 19(a) of the Giants Advisory Agreement, the NYRT Parties shall pay to
the Advisor, on or prior to the Closing Date, all amounts accrued and owing to
the Advisor under the Giants Advisory Agreement through the Closing Date.

 

4.             Payment by Advisor of Fiscal Year 2015 Bonus.  The Advisor shall
pay in full all annual, incentive and retention compensation owed to employees
of the Advisor for the fiscal year 2015 (the “2015 Compensation”) on or prior to
the Closing Date.  Other than the 2015 Compensation, the Advisor hereby
represents and warrants to the NYRT Parties that there is no written agreement
between the Advisor and any of the Covered Employees (as defined in that certain
Omnibus Waiver and Release Agreement, dated as of the date hereof, by and among,
the

 

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ARC Advisory Services, LLC and the other parties thereto) providing for
guaranteed annual, incentive or retention compensation for the fiscal year 2016.

 

5.             Termination of Investment Allocation Agreement.  Each of the
Company and the Advisor hereby acknowledges and agrees that the Investment
Allocation Agreement shall terminate, as to the Company, by its terms on the
termination of the Giants Advisory Agreement, which terminates by its terms on
the Closing, and neither the Company nor the Advisor shall have any further
rights, liabilities or obligations of any nature under the Investment Allocation
Agreement.

 

6.             Termination of the Tax Indemnification Agreements.  The Company
and the Advisor each hereby agrees and acknowledges that effective as of the
Closing Date, each Tax Indemnification Agreement is hereby irrevocably and
unconditionally terminated in its entirety (requiring no further action on the
part of the parties thereto), with no further force or effect, and each party
thereto shall have no further rights, liabilities or obligations of any nature
thereunder provided, further, that this Agreement shall constitute any prior
written notice required under the Tax Indemnification Agreements.

 

7.             Vesting of Advisor Employee Equity Awards.  The Parties hereby
agree and acknowledge that any and all unvested restricted stock of the Company
granted to the employees of the Advisor that are outstanding immediately prior
to the Closing shall, automatically upon the Closing and without any required
action on the part of the holder thereof, cease to be subject to any forfeiture
or vesting conditions.

 

8.             Mutual Release of Claims. Effective as of the Closing Date,
except as otherwise provided in this Agreement:

 

(a)   each of the AR Capital Parties, on its own behalf and on behalf of each of
its Affiliates and their respective predecessors, successors and assigns (in
their respective capacities as such) (collectively with the AR Capital Parties,
the “AR Capital Releasors”), does hereby fully and forever waive, release,
acquit and discharge each of the NYRT Parties, each of their Affiliates, and the
respective predecessors, successors and assigns of the foregoing (in their
respective capacities as such) (collectively with the NYRT Parties, the “NYRT
Releasors”), jointly and individually, of and from any and all controversies,
claims, suits, judgments, promises, demands, debts, rights, obligations,
liabilities, losses, costs, expenses, fees, causes of action and liabilities
whatsoever of the AR Capital Releasors, in each case, whether liquidated or
unliquidated, fixed or contingent, matured or unmatured, asserted or unasserted,
known or unknown, foreseen or unforeseen, existing as of the Closing Date or
arising thereafter, in law, equity, or otherwise brought by way of demand,
complaint, cross-claim, counterclaim, third-party claim or otherwise
(collectively, the “Claims”), in each case to the extent (i) arising out of or
relating to the Giants Advisory Agreement, the Investment Allocation Agreement,
or the Property Management Agreement or the Tax Indemnification Agreements and
(ii) not arising out of or relating to criminal acts or willful misconduct of
the NYRT Parties (such Claims, the “AR Capital Released Claims”).

 

(b)   each of the NYRT Parties, on behalf of itself and its Affiliates and the
other NYRT Releasors, does hereby fully and forever waive, release, acquit and
discharge each

 

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of the AR Capital Releasors, jointly and individually, of and from any and all
Claims of the NYRT Releasors to the extent (i) arising out of or relating to the
Giants Advisory Agreement, the Investment Allocation Agreement, or the Property
Management Agreement or the Tax Indemnification Agreements and (ii) not arising
out of or relating to criminal acts or willful misconduct of the AR Capital
Parties (such Claims, the “NYRT Released Claims”).

 

“Affiliate” shall mean, with respect to any person, any other person directly or
indirectly controlling, controlled by, or under common control with such person.
For purposes of this definition, “control” (including, with correlative
meanings, the terms “controlled by” and “under common control with”), as applied
to any person, means the possession, directly or indirectly, of the power to
vote a majority of the securities having voting power for the election of
directors or managers (or other persons acting in similar capacities) of such
person or otherwise to direct or cause the direction of the management and
policies of such person through the ownership of voting securities, by contract
or otherwise; provided, however that for purposes of this Section 4, (i) no NYRT
Party shall be deemed to be an “Affiliate” of any AR Capital Party and (ii) no
AR Capital Party shall be deemed to be an “Affiliate” of any NYRT Party.

 

9.             Covenant Not to Sue.

 

(a)   Each AR Capital Party, on behalf of itself and each of its respective AR
Capital Releasors, (i) represents and warrants that no such AR Capital Releasor
has pledged, assigned or otherwise transferred to any person all or any portion
of any AR Capital Released Claims (or any Claims that, but for any such pledge,
assignment or transfer, would constitute AR Capital Released Claims) or any
rights or entitlements with respect thereto; (ii) covenants and agrees, to the
extent permitted by applicable law, that no such AR Capital Releasor shall,
either individually or in concert with another person or group of persons,
maintain or cause to be maintained any action, in any capacity whatsoever,
against any of the NYRT Releasors based upon any of the AR Capital Released
Claims; and (iii) shall indemnify and hold harmless each of the NYRT Releasors
from and against any and all losses incurred by any of the NYRT Releasors, by
reason of any breach of any of the representations, warranties, covenants or
agreements in clause (i) or (ii) of this Section 5(a).

 

(b)   Each NYRT Party, on behalf of itself and each of its respective NYRT
Releasors, (i) represents and warrants that no such NYRT Releasor has pledged,
assigned or otherwise transferred to any person all or any portion of any NYRT
Released Claims (or any Claims that, but for any such pledge, assignment or
transfer, would constitute NYRT Released Claims) or any rights or entitlements
with respect thereto; (ii) covenants and agrees, to the extent permitted by
applicable law, that no such NYRT Releasor shall, either individually or in
concert with another person or group of persons, maintain or cause to be
maintained any action, in any capacity whatsoever, against any of the AR Capital
Releasors based upon any of the NYRT Released Claims; and (iii) shall indemnify
and hold harmless each of the AR Capital Releasors from and against any and all
losses incurred by any of the AR Capital Releasors, by reason of any breach of
any of the representations, warranties, covenants or agreements in clause (i) or
(ii) of this Section 5(b).

 

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10.          FF&E.  Effective as of the Closing Date, each NYRT Party hereby
transfers to the AR Capital Parties any and all of such NYRT Party’s right,
title and interest in and to all of the FF&E.

 

11.          Counterparts. This Agreement may be executed in counterparts
(including by facsimile or other electronic transmission), each one of which
shall be deemed an original and all of which together shall constitute one and
the same Agreement.

 

12.          Governing Law.  This Agreement shall be governed by, interpreted
under, and construed and enforced in accordance with, the Law of the State of
New York, not taking into account any rules of conflicts of laws that would
cause the application of the laws of any other jurisdiction.

 

13.          Severability.  If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction or other authority
to be invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.

 

14.          Further Assurances.  Each Party shall execute and deliver such
additional documents as may be reasonably requested by any other Party to
consummate the transactions contemplated by this Agreement.

 

15.          Parties in Interest.  Nothing in this Agreement shall create or be
deemed to create any third party beneficiary rights in any person not a party to
this Agreement.

 

16.          Entire Agreement.  This Agreement constitutes the entire agreement
and understanding among the Parties in respect of the subject matter hereof and
thereof and supersedes all prior and contemporaneous arrangements, agreements
and understandings, both oral and written, whether in term sheets, presentations
or otherwise among the Parties, or between any of them, with respect to the
subject matter hereof and thereof.

 

17.          Headings.  The headings and captions herein are inserted for
convenience of reference only and are not intended to govern, limit or aid in
the construction of any term or provision hereof.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date first written above.

 

 

NEW YORK REIT, INC.

 

 

 

By:

/s/ Michael A. Happel

 

 

Name:Michael A. Happel

 

 

Title: Chief Executive Officer and President

 

 

 

 

 

NEW YORK RECOVERY OPERATING PARTNERSHIP, L.P.

 

 

 

By:

/s/ Michael A. Happel

 

 

Name: Michael A. Happel

 

 

Title: Chief Executive Officer and President

 

 

 

 

 

NEW YORK RECOVERY PROPERTIES, LLC

 

 

 

By:

/s/ Michael A. Happel

 

 

Name: Michael A. Happel

 

 

Title: Chief Executive Officer and President

 

 

 

 

 

NEW YORK RECOVERY ADVISORS, LLC

 

 

 

By:

/s/ Michael A. Happel

 

 

Name: Michael A. Happel

 

 

Title: Chief Executive Officer and President

 

Signature page to Termination Agreement and Release

 

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