Exhibit 10.3

 

PLEDGE AND SECURITY AGREEMENT (OPERATING LEASE)

 

Dated as of December 20, 2016

 

by

 

ARC NY120W5701 TRS MEZZ II, LLC, as Pledgor

 

in favor of

 

COLUMN FINANCIAL, INC., as Agent

 

 

 

 

 

 

 

PLEDGE AND SECURITY AGREEMENT (OPERATING LEASE)

 

THIS PLEDGE AND SECURITY AGREEMENT (OPERATING LEASE) (together with all
extensions, renewals, modifications, substitutions and amendments hereof, this
“Agreement”), dated as of December 20, 2016, is made by ARC NY120W5701 TRS MEZZ
II, LLC, a Delaware limited liability company, having its principal place of
business at c/o New York REIT, Inc., 405 Park Avenue, New York, New York 10022
(together with its successors and permitted assigns, “Pledgor”), in favor of
COLUMN FINANCIAL, INC., a Delaware corporation, having an address at 11 Madison
Avenue, New York, New York 10010 as agent for the benefit of Lender (defined
below) (together with its successors and permitted assigns, in such capacity,
“Agent”). Capitalized terms used but not otherwise defined herein shall have the
meanings assigned to such terms in the Loan Agreement (defined below).

 

RECITALS

 

WHEREAS, Lender is making a loan in the principal amount of FIVE HUNDRED MILLION
AND NO/100 DOLLARS ($500,000,000.00) (the “Loan”) to the entities listed on
Schedule I attached hereto (individually and/or collectively, together with
their successors and permitted assigns, “Borrower”) pursuant to that certain
Loan Agreement among Borrower, certain other borrower parties, Column Financial,
Inc. a Delaware corporation (together with its successors and permitted assigns,
“Initial Lender”), and the other lenders party thereto from time to time
(together with Initial Lender and their respective successors and/or permitted
assigns, individually and/or collectively as the context may require, “Lender”)
and Agent, and acknowledged and agreed to by ARC NY120W5701 TRS, LLC, a Delaware
limited liability company (“Issuer”) (solely with respect to certain terms and
conditions specified therein), dated of even date herewith (as amended,
supplemented or otherwise modified from time to time, the “Loan Agreement”),
which Loan is evidenced by the Note and secured by, among other things, the
Security Instruments encumbering Borrower’s interest in the Properties;

 

WHEREAS, Borrower and Issuer are parties to that certain Operating Lease dated
as of November 18, 2013 (as assigned and amended, the “Operating Lease”)
pursuant to which Issuer operates the Property known as the Viceroy Hotel;

 

WHEREAS, Pledgor is the legal and beneficial owner of 100% of the issued and
outstanding limited liability company interests in Issuer; and

 

WHEREAS, it is a condition precedent to Lender making the Loan to Borrower under
the Loan Agreement that Pledgor shall have executed and delivered this Agreement
to Agent for the benefit of Lender as additional security for Borrower’s
obligations and liabilities under the Loan Agreement.

 

NOW, THEREFORE, in consideration of the premises and to induce Lender to make
the Loan under the Loan Agreement, and other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, Pledgor hereby
agrees with Agent as follows:

 

 

 

 

1.            Defined Terms. As used in this Agreement, the following terms have
the meanings set forth in or incorporated by reference below:

 

“Agent” has the meaning ascribed to such term in the introductory paragraph.

 

“Agreement” has the meaning ascribed to such term in the introductory paragraph.

 

“Article 8 Matter” has the meaning ascribed to such term in Section 19(b)
hereof.

 

“Borrower” has the meaning ascribed to such term in the Recitals.

 

“Code” means the Uniform Commercial Code from time to time in effect in the
State of New York.

 

“Collateral” means the Pledged Collateral and all Proceeds thereof.

 

“Debt” has the meaning ascribed to such term in the Loan Agreement.

 

“Initial Lender” has the meaning ascribed to such term in the Recitals.

 

“Issuer” has the meaning ascribed to such term in the Recitals.

 

“Lender” has the meaning ascribed to such term in the Recitals.

 

“Loan” has the meaning ascribed to such term in the Recitals.

 

“Loan Agreement” has the meaning ascribed to such term in the Recitals.

 

“Loan Documents” has the meaning ascribed to such term in the Loan Agreement.

 

“Note” has the meaning ascribed to such term in the Loan Agreement.

 

“Pledged Collateral” has the meaning ascribed to such term in Section 2 of this
Agreement.

 

“Pledged Securities” means the limited liability company interests of Pledgor in
Issuer listed on Schedule II hereto, together with all certificates evidencing
ownership of such interests, and all claims, powers, privileges, benefits,
remedies, voting rights, options or rights of any nature whatsoever of Pledgor
with respect to such interest which currently exist or may be issued or granted
by Issuer to Pledgor while this Agreement is in effect, including, without
limitation, the certificates evidencing such interest which have been delivered
to Agent on behalf of Lender pursuant to Section 3 hereof.

 

“Pledgor” has the meaning ascribed to such term in the introductory paragraph.

 

2

 

 

“Proceeds” means all “proceeds” as such term is defined in Section 9-102(a)(64)
of the Code in effect in the State of New York on the date hereof, and, in any
event, shall include, without limitation, all dividends or other income from the
Pledged Securities, collections thereon or distributions with respect thereto,
and all of Pledgor’s right, title and interest in all distributions, monies,
fees and compensation payable with respect to the Pledged Securities, as well as
(i) all contract rights, general intangibles, claims, powers, privileges,
benefits and remedies of Pledgor relating to the foregoing and (ii) all cash or
non-cash proceeds of any of the foregoing.

 

“Security Act” has the meaning ascribed to such term in Section 10(a) hereof.

 

“Security Instruments” has the meaning ascribed to such term in the Loan
Agreement.

 

“Special Damages” has the meaning ascribed to such term in Section 18(j) hereof.

 

“UCC-1 Financing Statements” has the meaning ascribed to such term in Section 12
hereof.

 

Terms used herein but not otherwise defined herein shall have the respective
meanings ascribed to them in the Loan Agreement.

 

(i)          The words “hereof”, “herein” and “hereunder” and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and section, subsection,
schedule and exhibit references are to this Agreement unless otherwise
specified.

 

(ii)         The word “including” when used in this Agreement shall be deemed to
be followed by the words “but not limited to.”

 

2.            Pledge; Grant of Security Interest. Pledgor hereby pledges and
grants to Agent for the benefit of Lender, as collateral security for the prompt
and complete payment and performance when due (whether at the stated maturity,
by acceleration or otherwise) of the Debt, a first priority security interest in
all of Pledgor’s right, title and interest to and under, in each case, whether
now owned or existing, or hereafter acquired or arising in the following
(collectively, the “Pledged Collateral”):

 

(a)          all Pledged Securities;

 

(b)          all securities, security certificates, moneys or property
representing the Pledged Securities, or representing dividends or interest on
any of the Pledged Securities, or representing a distribution in respect of the
Pledged Securities, or resulting from a split-up, revision, reclassification or
other like change of the Pledged Securities or otherwise received in exchange
therefor, and any subscription warrants, rights or options issued to the holders
of, or otherwise in respect of, the Pledged Securities;

 

3

 

 

(c)          all right, title and interest of Pledgor in, to and under any
policy of insurance payable by reason of loss or damage to the Pledged
Securities and any other Collateral;

 

(d)          all “accounts”, “deposit accounts”, “general intangibles”,
“instruments”, “securities” and “investment property” (in each case as defined
in the Code) constituting or relating to the foregoing; and

 

(e)          all Proceeds of any of the foregoing property of Pledgor
(including, without limitation, any proceeds of insurance thereon).

 

3.             Certificates and Powers. Concurrently with the execution and
delivery of this Agreement, Pledgor shall deliver to Agent on behalf of Lender
each original certificate evidencing the Pledged Securities (which certificates
shall constitute “security certificates” (as defined in the Code)), together
with an undated limited liability company membership power covering each such
certificate duly executed in blank.

 

4.             Representations and Warranties. Pledgor represents and warrants
as of the date hereof that:

 

(a)          no authorization, consent of or notice to any other Person
(including, without limitation, any member, owner, partner or creditor of
Pledgor and/or Issuer) that has not been obtained, is required in connection
with the execution, delivery, performance, validity or enforceability of this
Agreement including, without limitation, the assignment and transfer by Pledgor
of any of the Pledged Collateral to Lender or the subsequent transfer thereof by
Lender pursuant to the terms hereof;

 

(b)          all of the certificates representing the Pledged Securities have
been duly and validly issued and are fully paid and nonassessable and have been
delivered to Agent concurrently herewith;

 

(c)          the Pledged Securities constitute all the issued and outstanding
limited liability company interests in the Issuer;

 

(d)          Pledgor is the record and beneficial owner of, and has good title
to, the Pledged Securities set forth on Schedule II attached hereto free and
clear of any and all Liens or options in favor of, or claims of, any other
Person, except the Lien created by this Agreement, and the Pledged Securities
have not previously been assigned, sold, transferred, pledged or encumbered
(except pursuant to this Agreement);

 

(e)          upon delivery to Agent of the limited liability company
certificates evidencing the Pledged Securities and the filing of UCC-1 Financing
Statements, to the extent required by law, the Lien granted pursuant to this
Agreement will constitute a valid, perfected first priority Lien on the Pledged
Securities and related proceeds, enforceable as such against all creditors of
Pledgor and any Persons purporting to purchase any Pledged Securities and
related proceeds from Pledgor, free from any adverse claim;

 

4

 

 

(f)          upon the filing of the UCC-1 Financing Statements referred to in
Section 12 of this Agreement with the Delaware Secretary of State, the Lien
granted pursuant to this Agreement will constitute a valid, perfected, first
priority Lien on the Collateral (other than the Pledged Securities and related
Proceeds) in such jurisdictions, enforceable as such against all creditors of
Pledgor and any Persons purporting to purchase any such other Collateral from
Pledgor;

 

(g)          the principal place of business and chief executive office of
Pledgor is located at 106 York Road, Jenkintown, PA 19046;

 

(h)          the exact name of Pledgor is as identified in the introductory
paragraph of this Agreement;

 

(i)          Pledgor is, and at all times has been, organized exclusively under
the laws of the State of Delaware;

 

(j)          there currently exist no certificates, instruments or writings
representing the Pledged Securities other than the certificates delivered to
Agent and to the extent that in the future there exist any such certificates,
instruments or writings, Pledgor shall deliver all such certificates,
instruments or writings to Lender together with the undated limited liability
company membership powers executed in blank; and

 

(k)          The Pledged Securities (i) are “securities” (within the meaning of
Sections 8-102(a)(15) and 8-103 of the Code), (ii) are “financial assets”
(within the meaning of Section 8-102(a)(9) of the Code) and (iii) are not
credited to a “securities account” (within the meaning of Section 8-501(a) of
the Code). The operating agreement of Issuer and the certificates evidencing the
Pledged Securities each shall at all times state that the Pledged Securities are
“securities” as such term is defined in Article 8 of the Code.

 

5.             Covenants. Pledgor covenants and agrees with Lender that, from
and after the date of this Agreement until the Debt (exclusive of any
indemnification or other obligations which are expressly stated in any of the
Loan Documents to survive satisfaction of the Note) is paid in full:

5

 

 

(a)          Acknowledgement of Parties. If Pledgor shall, as a result of its
ownership of the Pledged Securities, become entitled to receive or shall receive
any limited liability company interest certificate (including, without
limitation, any certificate representing a dividend or a distribution in
connection with any reclassification, increase or reduction of capital or any
certificate issued in connection with any reorganization), option or rights,
whether in addition to, in substitution of, as a conversion of, or in exchange
for any of the Pledged Securities, or otherwise in respect thereof, Pledgor
shall accept the same as Lender’s agent, hold the same in trust for Lender and
deliver the same forthwith to Lender in the exact form received, duly endorsed
by Pledgor to Lender, if required, together with an undated limited liability
company power covering such certificate duly executed in blank and with, if
Lender so requests, signature guaranteed, to be held by Lender hereunder as
additional security for the Debt. Any sums paid upon or in respect of the
Pledged Securities upon the liquidation or dissolution of Issuer shall be paid
over to Lender, to be held by it hereunder as additional security for the Debt
and distributed in accordance with the provisions of the Loan Agreement, and in
case any distribution of capital shall be made on or in respect of the Pledged
Securities or any property shall be distributed upon or with respect to the
Pledged Securities in each case pursuant to (a) any such liquidation or
dissolution of Issuer, or (b) recapitalization or reclassification of the
capital of Issuer or pursuant to the reorganization thereof, in violation of the
provisions of the Loan Documents, then in such case the property so distributed
shall be delivered to Lender, to be held by it, subject to the terms hereof, as
additional security for the Debt and distributed in accordance with the
provisions of the Loan Agreement; provided, however, that nothing in this
paragraph shall be deemed to limit or restrict Borrower’s rights to release the
Release Property and/or prepay the Loan pursuant to the Loan Documents, and
provided further that after any such release is conducted in accordance with the
Loan Documents, any excess proceeds generated from any such release and Transfer
of the Release Property shall be retained by Borrower and may be distributed by
Borrower at its discretion, and shall not be paid over to Lender.  If any sums
of money or property so paid or distributed in respect of the Pledged Securities
shall be received by Pledgor and are required to be delivered to Lender as
provided above, Pledgor shall deliver the same forthwith to Lender, and, until
such money or property is paid or delivered to Lender, hold such money or
property in trust for Lender, segregated from other funds of Pledgor, as
additional security for the Debt (with any excess funds being promptly returned
to Pledgor upon the indefeasible payment in full of the Debt).  Pledgor shall
cause Issuer, by its signature to the Acknowledgement and Consent, a form of
which is attached hereto as Exhibit A, to agree that it will notify Lender
promptly of the occurrence of any events described in this section.
Notwithstanding the foregoing, if no such event described above entitling Lender
to receive such sums or property has occurred, then such distributions shall be
made in the normal course of business of Issuer in accordance with Section 7
hereof.

 

(b)          Negative Covenants. Without the prior written consent of Lender,
Pledgor shall not, directly or indirectly (i) except as expressly permitted in
the Loan Agreement, vote to enable, or take any other action to permit Issuer to
issue any additional limited liability company interests or to issue any other
securities convertible into or granting the right to purchase or exchange for
any limited liability company interests in Issuer, (ii) except as permitted by
the Loan Agreement, sell, assign, transfer, exchange or otherwise dispose of, or
grant any option with respect to, the Collateral, or (iii) except as expressly
permitted by the Loan Agreement, create, incur, authorize or permit to exist any
Lien or option in favor of, or any claim of any Person with respect to, any of
the Collateral, or any interest therein, except for the Lien provided for by
this Agreement. Pledgor will not create, incur or permit to exist any Lien
(other than Permitted Encumbrances), or options in favor of, or claim on or to
the Collateral, will defend, at its sole cost and expense, the Collateral
against, and will take all such other action as is reasonably necessary to
remove, any Lien or claim on or to the Collateral, other than the Liens created
hereby and any Permitted Encumbrances, and will defend, at its sole cost and
expense, the right, title and interest of Lender in, to and under the Collateral
against the claims and demands of all Persons whomsoever, subject to the
Permitted Encumbrances.

 

6

 

 

(c)          Filing. At any time and from time to time, upon the written request
of Lender, and at the sole expense of Pledgor, Pledgor shall promptly and duly
give, execute, deliver, file and/or record such further instruments and
documents and take such further actions as Lender may reasonably request for the
purposes of obtaining, creating, perfecting, validating or preserving the full
benefits of this Agreement and of the rights and powers herein granted
including, without limitation, filing UCC Financing Statements or UCC-3
continuation statements, provided that the amount of the Debt or the obligations
of Pledgor hereunder or under the Loan Documents shall not be materially
increased thereby or the rights of Pledgor hereunder or under the Loan Documents
shall not be materially decreased thereby. Pledgor hereby authorizes Lender to
file any such financing statement or continuation statement without the
signature of Pledgor to the extent permitted by law. If any amount payable under
or in connection with any of the Collateral shall be or become evidenced by any
promissory note, other instrument or chattel paper, such note, instrument or
chattel paper shall be promptly delivered to Lender, duly endorsed in a manner
satisfactory to Lender, to be held as Collateral pursuant to this Agreement.

 

(d)          Further Identification of Pledged Securities. Pledgor will furnish
to Lender from time to time statements and schedules further identifying and
describing the Pledged Securities and such other reports in connection with the
Pledged Securities as Lender may reasonably request, all in reasonable detail.

 

(e)          Changes in Name and Location. Except as expressly permitted in the
Loan Agreement, Pledgor will not, unless (i) it shall have given thirty (30)
days’ prior written notice to such effect to Lender and (ii) all action
reasonably necessary in Lender’s opinion to protect and perfect the Liens and
security interests intended to be created hereunder with respect to the Pledged
Securities, including, without limitation, the delivery of such opinions of
counsel as may be reasonably required by Lender, shall have been taken, (A)
change the location of its chief executive office or principal place of business
from that specified in Section 4(g) hereof, or (B) change its name, identity or
corporate organization, or (C) reorganize or reincorporate under the laws of
another jurisdiction.

 

(f)          Indemnity. Pledgor shall pay, and save Lender harmless from, any
and all liabilities with respect to, or resulting from any delay in paying, any
and all stamp, excise, sales or other taxes which may be payable or determined
to be payable with respect to any of the Collateral or in connection with any of
the transactions contemplated by this Agreement excluding any income or
franchise taxes imposed on Lender.

 

7

 

 

(g)          UCC Article 8. The Pledged Securities (i) shall continue to be
“securities” (within the meaning of Sections 8-102(a)(15) and 8-103 of the
Code), (ii) shall continue to be “financial assets” (within the meaning of
Section 8-102(a)(9) of the Code) and (iii) shall not be credited to a
“securities account” (within the meaning of Section 8-501(a) of the Code). The
operating agreement of Issuer and the certificates evidencing the Pledged
Securities each shall at all times state that the Pledged Securities are
“securities” as such term is defined in Article 8 of the Code.

 

6.             Certain Understandings of Parties; Control of Pledged Collateral;
Registration of Pledge, Etc.

 

(a)          The parties acknowledge and agree that all of the Pledged
Securities are “certificated”, are “securities” governed by Article 8 of the
Code and, during the term of this Agreement, the Pledged Securities are and will
be deemed securities and certificated securities under Article 8 and Article 9
of the Code, including without limitation, Section 102(a)(5) of the Code.
Pledgor covenants and agrees that (i) the Pledged Securities are not and will
not be dealt in or traded on securities exchanges or securities markets and (ii)
the Pledged Securities are not and will not be “investment company securities”
within the meaning of Section 8-103 of the Code, and (iii) the Pledged
Securities constitute “certificated securities” within the meaning of Section
8-102(a)(14) of the Code.

 

(b)          Notwithstanding the foregoing, to better assure the perfection of
the security interest of Lender in the Pledged Securities concurrently with the
execution and delivery of this Agreement, and subsequently from time to time
upon Lender’s written request following Lender’s transfer of all or any portion
of the Loan subject to the terms of the Loan Agreement and all applicable laws,
Pledgor shall send written instructions in the form of Exhibit B hereto to the
Issuer, and shall cause the Issuer to, and the Issuer shall, deliver to Lender
the Confirmation Statement and Instruction Agreement in the form of Exhibit C
hereto pursuant to which the Issuer will confirm that it has registered the
pledge effected by this Agreement on its books and agrees to comply with the
instructions of Lender in respect of the Pledged Securities without further
consent of Pledgor or any other Person. Notwithstanding anything in this
paragraph, neither the written instructions nor the Confirmation Statement and
Instruction Agreement shall be construed as expanding the rights of Lender to
give instructions with respect to the Collateral beyond such rights set forth in
this Agreement.

 

7.             Cash Dividends; Voting Rights. Subject to Section 8 hereof and
the provisions of the Loan Agreement, and unless an Event of Default shall have
occurred and be continuing, Pledgor shall be permitted to receive, use and/or
distribute all limited liability company interest distributions or cash
dividends, as applicable, paid in the normal course of business of the Issuer
and to exercise all voting and limited liability company interests with respect
to the Pledged Securities, provided that no vote shall be cast or right
exercised which, in Lender’s reasonable judgment, would result in any violation
of any provision of the Loan Agreement, the Note, this Agreement or any other
Loan Documents.

 

8

 

 

8.             Rights of Lender.

 

(a)          If an Event of Default shall occur and be continuing, Lender shall
have the right to receive any and all income, cash dividends, distributions,
proceeds or other property received or paid in respect of the Pledged Securities
and the other Collateral and make application thereof to the Debt, in such order
as Lender, in its sole discretion, may elect, subject to and in accordance with
the Loan Documents. If an Event of Default shall occur and be continuing, then
all such Pledged Securities at Lender’s option, shall be registered in the name
of Lender or its nominee (if not already so registered), and Lender or its
nominee may thereafter exercise (i) all voting, and limited liability company
interests of Pledgor pertaining to the Pledged Securities, including, without
limitation, all rights to control the Issuer (including the right to remove
and/or replace directors and managers) pursuant to and in accordance with such
voting and beneficial interests and other rights of Pledgor or as set forth in
the organizational documents of the Issuer and (ii) any and all rights of
conversion, exchange, and subscription and any other rights, privileges or
options pertaining to such Pledged Securities as if it were the absolute owner
thereof (including, without limitation, the right to exchange at its discretion
any and all of the Pledged Securities upon the merger, consolidation,
reorganization, recapitalization or other fundamental change in the
organizational structure of Issuer, or upon the exercise by Pledgor or Lender of
any right, privilege or option pertaining to such Pledged Securities, and in
connection therewith, the right to deposit and deliver any and all of the
Pledged Securities with any committee, depositary, transfer agent, registrar or
other designated agency upon such terms and conditions as it may determine), all
without liability except to account for property actually received by it and
except to the extent arising out of Lender’s gross negligence or willful
misconduct, but Lender shall have no duty to exercise any such right, privilege
or option and shall not be responsible for any failure to do so or delay in so
doing.

 

(b)          The rights of Lender under this Agreement shall not be conditioned
or contingent upon the pursuit by Lender of any right or remedy against Pledgor
or against any other Person which may be or become liable in respect of all or
any part of the Debt or against any other security therefor, guarantee thereof
or right of offset with respect thereto. Lender shall not be liable for any
failure to demand, collect or realize upon all or any part of the Collateral or
for any delay in doing so, nor shall it be under any obligation to sell or
otherwise dispose of any Collateral upon the request of Pledgor or any other
Person or to take any other action whatsoever with regard to the Collateral or
any part thereof.

 

(c)          Upon satisfaction in full of the Debt and payment of all amounts
owed on the Note (exclusive of any indemnification or other obligations which
are expressly stated in any of the Loan Documents to survive satisfaction of the
Note), Lender’s rights under this Agreement shall automatically terminate and
Lender, at Pledgor’s cost and expense, shall execute and deliver to Pledgor, or
shall authorize Pledgor to file, UCC-3 termination statements or similar
documents and agreements to terminate (or, upon Pledgor’s request to assign) all
of Lender’s rights under this Agreement and all other Loan Documents and upon
request, Lender shall, or shall cause Agent to, deliver the certificates
evidencing the Pledged Securities and any limited liability powers to Pledgor.

 

9

 

 

(d)          Pledgor also authorizes Lender, at any time and from time to time,
to execute, in connection with the sale provided for in Sections 9 or 10 hereof,
any endorsements, assignments or other instruments of conveyance or transfer
with respect to the Collateral.

 

(e)          The powers conferred on Lender hereunder are solely to protect
Lender’s interest in the Collateral and shall not impose any duty upon Lender to
exercise any such powers. Lender shall be accountable only for amounts that it
actually receives as a result of the exercise of such powers, and neither it nor
any of its officers, directors, employees or Lenders shall be responsible to
Pledgor for any act or failure to act hereunder, except for its or their gross
negligence or willful misconduct.

 

(f)          If Pledgor fails to perform or comply with any of its agreements
contained herein and Lender, as provided for by the terms of this Agreement,
shall itself perform or comply, or otherwise cause performance or compliance,
with such agreement, the reasonable expenses of Lender incurred in connection
with such performance or compliance, together with interest at the Default Rate
if such expenses are not paid on demand, shall be payable by Pledgor to Lender
on demand and shall constitute obligations secured hereby.

 

9.             Remedies.   (a)   If an Event of Default shall occur and be
continuing, Lender may, in addition to all other rights and remedies granted in
this Agreement and in any other instrument or agreement securing, evidencing or
relating to the Debt:

 

(i)    exercise all rights and remedies of a secured party under the Code
(whether or not said Code is in effect in the jurisdiction where the rights and
remedies are asserted) and such additional rights and remedies to which a
secured party is entitled under the laws in effect in any jurisdiction where any
rights and remedies hereunder may be asserted, including, without limitation,
the right, to the maximum extent permitted by law, to exercise all voting,
consensual and other powers of ownership pertaining to the Collateral as if
Lender were the sole and absolute owner thereof (and Pledgor agrees to take all
such action as may be appropriate to give effect to such right);

 

(ii)    make any reasonable compromise or settlement deemed desirable with
respect to any of the Collateral and may extend the time of payment, arrange for
payment in installments, or otherwise modify the terms of, any of the
Collateral; and

 

(iii)    in its discretion, in its name or in the name of Pledgor or otherwise,
demand, sue for, collect, direct payment of or receive any money or property at
any time payable or receivable on account of or in exchange for any of the
Collateral, but shall be under no obligation to do so.

 

10

 

 

(b)    Without limiting the generality of the foregoing, Lender, upon the
occurrence and during the continuance of an Event of Default, without demand of
performance or other demand, presentment, protest, advertisement or notice of
any kind (except any notice required by law referred to below or otherwise
required hereby) to or upon Issuer, Pledgor or any other Person (all and each of
which demands, presentments, protests, advertisements and notices, or other
defenses, are hereby waived to the extent permitted under applicable law), may
in such circumstances forthwith collect, receive, appropriate and realize upon
the Pledged Collateral, or any part thereof, and/or may forthwith sell, assign,
give option or options to purchase or otherwise dispose of and deliver the
Collateral or any part thereof (or contract to do any of the foregoing), in one
or more parcels at public or private sale or sales, in the over-the-counter
market, at any exchange, broker’s board or office of Lender or elsewhere upon
such terms and conditions as it may deem advisable and at such prices as it may
deem best in its sole discretion, for cash or on credit or for future delivery
without assumption of any credit risk. Upon the occurrence and during the
continuance of an Event of Default, Lender shall have the right, without notice
or publication, to adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at the time and place fixed for such
sale, and any such sale may be made at any time or place to which the same may
be adjourned without further notice. Lender shall have the right upon any such
public sale or sales, and, to the extent permitted by law, upon any such private
sale or sales, to purchase the whole or any part of the Collateral so sold, free
of any right or equity of redemption of Pledgor, which right or equity of
redemption is hereby waived or released. Lender shall apply any Proceeds from
time to time held by it and the net proceeds of any such collection, recovery,
receipt, appropriation, realization or sale, after deducting all reasonable
costs and expenses of every kind incurred therein or incidental to the care or
safekeeping of any of the Collateral or in any way relating to the Collateral or
the rights of Lender hereunder, including, without limitation, reasonable
attorneys’ fees and disbursements, to the payment in whole or in part of the
Debt, in such order as Lender may elect, and only after such application and
after the payment by Lender of any other amount required by any provision of
law, including, without limitation, Sections 9-610 and 9-615 of the Code, shall
Lender be required to account for the surplus, if any, to Pledgor. To the extent
permitted by applicable law, Pledgor waives all claims, damages and demands it
may acquire against Lender arising out of the exercise by Lender of any of its
rights hereunder, except for any claims, damages and demands it may have against
Lender arising from the willful misconduct or gross negligence of Lender or its
affiliates, or any agents or employees of the foregoing. If any notice of a
proposed sale or other disposition of Collateral shall be required by law, such
notice shall be deemed reasonable and proper if given at least ten (10) days
before such sale or other disposition.

 

(c)    Notwithstanding anything herein to the contrary, if an Event of Default
shall be continuing, Lender shall be entitled to exercise its rights under
Section 8 hereof to register the Pledged Securities in the name of Lender or its
nominee (if not already so registered) or Section 9 hereof to collect, receive,
appropriate and realize upon the Collateral only upon the expiration of a period
of ten (10) business days commencing on the date on which notice of such
intention to exercise any of such rights shall have been given by Lender to
Pledgor in accordance with Section 18(e), which notice may, at Lender’s option,
be included within any notice furnished by Lender to Pledgor under Section 10.6
of the Loan Agreement.

 

11

 

 

(d)    The rights, powers, privileges and remedies of Lender under this
Agreement are cumulative and shall be in addition to all rights, powers,
privileges and remedies available to Lender at law or in equity. All such
rights, powers and remedies shall be cumulative and may be exercised
successively or concurrently without impairing the rights of Lender hereunder.

 

10.         Private Sales.   (a)    Pledgor recognizes that Lender may be unable
to effect a public sale of any or all of the Pledged Securities, by reason of
certain prohibitions contained in the Securities Act of 1933 (the “Securities
Act”), as amended, and applicable state securities laws or otherwise, and may be
compelled to resort to one or more private sales thereof to a restricted group
of purchasers which will be obliged to agree, among other things, to acquire
such securities for their own account for investment and not with a view to the
distribution or resale thereof. Pledgor acknowledges and agrees that any such
private sale may result in prices and other terms less favorable to Lender than
if such sale were a public sale and, notwithstanding such circumstances, agrees
that any such private sale shall not be deemed by Pledgor to have been made in a
commercially unreasonable manner solely by virtue of being a private sale.
Lender shall be under no obligation to delay a sale of any of the Pledged
Securities for the period of time necessary to permit Issuer or Pledgor to
register such securities for public sale under the Securities Act, or under
applicable state securities laws, even if Issuer or Pledgor would agree to do
so.

 

(b)          After and during the continuation of an Event of Default, Pledgor
further shall use its reasonable efforts to do or cause to be done all such
other acts as may be reasonably necessary to make any sale or sales of all or
any portion of the Pledged Securities pursuant to this Section 10 valid and
binding and in compliance with any and all other requirements of applicable law.
Pledgor further agrees that a breach of any of the covenants contained in this
Section 10 will cause irreparable injury to Lender, that Lender has no adequate
remedy at law in respect of such breach and, as a consequence, that each and
every covenant contained in this Section 10 shall be specifically enforceable
against Pledgor, and Pledgor hereby waives and agrees not to assert any defenses
against an action for specific performance of such covenants except for a
defense that no Event of Default has occurred and is continuing under the Loan
Agreement.

 

(c)          Lender shall not incur any liability as a result of the sale of any
Collateral, or any part thereof, at any private sale conducted in a commercially
reasonable manner in accordance with applicable law, it being agreed that some
or all of the Collateral is or may be of one or more types that threaten to
decline speedily in value and that are not customarily sold in a recognized
market. Pledgor hereby waives any claims against Lender arising by reason of the
fact that the price at which any of the Collateral may have been sold at such a
private sale was less than the price which might have been obtained at a public
sale or was less than the aggregate amount of the Debt, even if Lender accepts
the first offer received and does not offer any Collateral to more than one
offeree, provided that Lender has acted in a commercially reasonable manner in
conducting such private sale in accordance with applicable law.

 

12

 

 

11.           Limitation on Duties Regarding Collateral. Lender’s sole duty with
respect to the custody, safekeeping and physical preservation of the Collateral
in its possession, under Section 9-207 of the Code or otherwise, shall be to
deal with it in the same manner as Lender deals with similar securities and
property for its own account. Neither Lender nor any of its directors, officers,
employees or agents shall be liable for failure to demand, collect or realize
upon any of the Collateral or for any delay in doing so or shall be under any
obligation to sell or otherwise dispose of any Collateral upon the request of
Pledgor or otherwise; provided that Lender’s actions or failure to act do not
amount to gross negligence or willful misconduct.

 

12.           Financing Statements; Other Documents. Pledgor hereby authorizes
Lender to file UCC-1 Financing Statements and amendments thereto (“UCC-1
Financing Statements”) as Lender shall reasonably determine with respect to the
Collateral, including, without limitation, one or more financing statements
describing the collateral covered thereby as “all assets or personal property of
the debtor” or words of similar effect. Pledgor agrees to deliver any other
document or instrument which Lender may reasonably request with respect to the
Collateral for the purposes of obtaining or preserving the full benefits of this
Agreement and of the rights and powers herein granted. Without limiting the
generality of the foregoing, Pledgor hereby authorizes the filing of UCC-1
Financing Statements (and amendments of financing statements and continuation
statements) that name the Pledgor as debtor and the Lender as secured party and
that cover all personal property or all assets of the Pledgor. Pledgor also
hereby ratifies the filing of any such UCC-1 Financing Statements (or amendments
of financing statements or continuation statements) that were filed prior to the
execution hereof.

 

13.           Attorney-in-Fact. Without limiting any rights or powers granted by
this Agreement to Lender, upon the occurrence and during the continuance of an
Event of Default as a result of which Lender has accelerated the Maturity Date,
Lender is hereby appointed, which appointment as attorney-in-fact is irrevocable
and coupled with an interest, the attorney-in-fact of Pledgor for the purpose of
carrying out the provisions of this Agreement and taking any action and
executing any instruments which Lender may deem necessary or advisable during
the continuance of an Event of Default to accomplish the purposes hereof
including, without limitation:

 

(a)          to ask, demand, collect, sue for, recover, compromise, receive and
give acquittance and receipts for moneys due and to become due under or in
respect of any of the Collateral;

 

(b)          to receive, endorse and collect any drafts or other instruments,
documents and chattel paper in connection with clause (a) above;

 

(c)          to file any claims or take any action or institute any proceedings
that the Lender may deem necessary or desirable for the collection of any of the
Collateral or otherwise to enforce the rights of Lender, with respect to any of
the Collateral; and

 

13

 

 

(d)          to execute, in connection with the sale provided for in Sections 9
or 10 hereof, any endorsement, assignments, or other instruments of conveyance
or transfer with respect to the Collateral.

 

If so requested by Lender, Pledgor shall ratify and confirm any such sale or
transfer by executing and delivering to Lender at Pledgor’s expense all proper
deeds, bills of sale, instruments of assignment, conveyance of transfer and
releases as may be designated in any such request. Following the repayment of
the Debt, Lender shall execute such documentation as is reasonable and customary
to evidence the termination of the power to act as attorney-in-fact for Pledgor.

 

14.           Additional Covenants of Pledgor Relating to Affirmative Covenants
of Issuer. Pledgor covenants and agrees with Lender that, from and after the
date of this Agreement until the Debt (exclusive of any indemnification or other
obligations which are expressly stated in any of the Loan Documents to survive
satisfaction of the Note) is paid in full, (i) Pledgor shall take and shall
cause Issuer to take any and all actions either necessary or reasonably
requested by Lender to ensure their complete compliance with Section 4.1.30 of
the Loan Agreement, (ii) Issuer shall take such actions as are required by or to
comply with the terms of the Loan Documents, in each case, applicable to it, and
shall not take any actions that violate any such documents, and (iii) Issuer
shall not apply amounts disbursed to the Issuer pursuant to the requirements of
the Loan in a manner contrary to the requirements of the Loan Documents.

 

15.           Additional Covenants of Pledgor Relating to Negative Covenants of
Issuer. Pledgor covenants and agrees with Lender that, from and after the date
of this Agreement until the Debt (exclusive of any indemnification or other
obligations which are expressly stated in any of the Loan Documents to survive
satisfaction of the Note) is paid in full, Pledgor shall take and shall cause
Issuer to take any action to ensure Issuer’s compliance with Section 5.2 of the
Loan Agreement.

 

16.           Intentionally Omitted.

 

17.           Indemnity. Pledgor agrees to indemnify Lender from and against any
and all losses, damages (but not special, punitive, incidental or consequential
damages), costs or expenses of any kind or nature (including reasonable
attorney’s fees) of Lender resulting from the enforcement of this Agreement,
other than such losses, damages, costs or expenses resulting from Lender’s gross
negligence or willful misconduct.

 

18.           Miscellaneous.

 

(a)          Severability. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

 

14

 

 

(b)          Headings. The headings used in this Agreement are for convenience
of reference only and are not to affect the construction hereof or be taken into
consideration in the interpretation hereof.

 

(c)          No Waiver; Cumulative Remedies. Lender shall not by any act (except
by a written instrument pursuant to Section 18(d) hereof), delay, indulge, omit
or otherwise be deemed to have waived any right or remedy hereunder or to have
acquiesced in any default or in any breach of any of the terms and conditions
hereof. No failure to exercise, nor any delay in exercising, on the part of
Lender, any right, power or privilege hereunder shall operate as a waiver
thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. A waiver by Lender of any right or
remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy which Lender would otherwise have on any future occasion. The
rights, remedies, powers and privileges herein provided are cumulative, may be
exercised singly or concurrently and are not exclusive of any rights, remedies,
powers or privileges provided by law.

 

(d)          Waivers and Amendments; Successors and Assigns. None of the terms
or provisions of this Agreement may be waived, amended, or otherwise modified
except by a written instrument executed by the party against which enforcement
of such waiver, amendment, or modification is sought. This Agreement shall be
binding upon and shall inure to the benefit of Pledgor and the respective
permitted successors and assigns of Pledgor and shall inure to the benefit of
Lender and its successors and assigns; provided no Pledgor shall have any right
to assign its rights hereunder, and any attempted assignment by Pledgor shall be
null and void. The rights of Lender under this Agreement shall automatically be
transferred to any permitted transferee to which Lender transfers the Note and
Loan Agreement.

 

(e)          Notices. All notices, consents, approvals and requests required or
permitted hereunder shall be delivered in accordance with Section 10.6 of the
Loan Agreement and the following:

 

  If to Pledgor: c/o New York REIT, Inc.     405 Park Avenue     New York, New
York 10022     Attention:  Legal Department         with a copy to: Arnold &
Porter LLP     399 Park Avenue     New York, NY 10022     Attention:  John
Busillo, Esq.

 

15

 

 

(f)            Governing Law.

 

(i)          THIS AGREEMENT WAS NEGOTIATED IN THE STATE OF NEW YORK, AND MADE BY
PLEDGOR AND ACCEPTED BY LENDER IN THE STATE OF NEW YORK, AND THE PROCEEDS OF THE
NOTE SECURED HEREBY WERE DISBURSED FROM THE STATE OF NEW YORK, WHICH STATE THE
PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND TO THE
UNDERLYING TRANSACTION EMBODIED HEREBY, AND IN ALL RESPECTS, INCLUDING, WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE, THIS AGREEMENT AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE AND ANY APPLICABLE LAW
OF THE UNITED STATES OF AMERICA. TO THE FULLEST EXTENT PERMITTED BY LAW, PLEDGOR
HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW
OF ANY OTHER JURISDICTION GOVERNS THIS AGREEMENT AND THE NOTE, AND THIS
AGREEMENT AND THE NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK INCLUDING SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW.

 

(ii)         ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER OR PLEDGOR
ARISING OUT OF OR RELATING TO THIS AGREEMENT MAY AT LENDER’S OPTION BE
INSTITUTED IN ANY FEDERAL OR STATE COURT IN THE CITY OF NEW YORK, COUNTY OF NEW
YORK, PURSUANT TO SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW, AND
PLEDGOR WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR HEREAFTER HAVE BASED ON VENUE
AND/OR FORUM NON CONVENIENS OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND PLEDGOR
HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUIT,
ACTION OR PROCEEDING. PLEDGOR DOES HEREBY DESIGNATE AND APPOINT:

 

CORPORATION SERVICE COMPANY (CSC)
1180 AVENUE OF THE AMERICAS, SUITE 210
NEW YORK, NEW YORK 10036

 

16

 

 

AS ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY
AND ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING IN
ANY FEDERAL OR STATE COURT IN NEW YORK, NEW YORK, AND AGREES THAT SERVICE OF
PROCESS UPON SAID AGENT AT SAID ADDRESS AND WRITTEN NOTICE OF SAID SERVICE
MAILED OR DELIVERED TO PLEDGOR IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN
EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON PLEDGOR IN ANY SUCH SUIT, ACTION
OR PROCEEDING IN THE STATE OF NEW YORK. PLEDGOR (I) SHALL GIVE PROMPT NOTICE TO
LENDER OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT HEREUNDER, (II) MAY AT ANY
TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE AUTHORIZED AGENT WITH AN
OFFICE IN NEW YORK, NEW YORK (WHICH SUBSTITUTE AGENT AND OFFICE SHALL BE
DESIGNATED AS THE PERSON AND ADDRESS FOR SERVICE OF PROCESS), AND (III) SHALL
PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF ITS AUTHORIZED AGENT CEASES TO HAVE AN
OFFICE IN NEW YORK, NEW YORK OR IS DISSOLVED WITHOUT LEAVING A SUCCESSOR.

 

(g)           Agents. Lender may employ agents and attorneys-in-fact in
connection herewith and shall not be responsible for their actions except for
the gross negligence or willful misconduct of any such agents or
attorneys-in-fact selected by it in good faith. Each Lender, by the Loan
Agreement, has irrevocably appointed and authorized Agent to take such action as
contractual representative on such Lender’s behalf and to exercise such powers
under this Agreement as are specifically delegated to Lender by the terms hereof
and of the Loan Agreement, together with such powers as are reasonably
incidental thereto, all pursuant to and as more particularly set forth in the
Loan Agreement, which is incorporated herein by reference. All references to
“Lender” herein shall mean “Lender” or “Agent on behalf of Lender”, as the
context may require.

 

(h)           Irrevocable Authorization and Instruction to Issuer. Pledgor
hereby authorizes and instructs Issuer and any servicer of the Loan to comply
with any instruction received by it from Lender in writing that (i) states that
an Event of Default has occurred and is continuing and (ii) is otherwise in
accordance with the terms of this Agreement, without any other or further
instructions from Pledgor, and Pledgor agrees that Issuer and any servicer shall
be fully protected in so complying.

 

(i)           Counterparts. This Agreement may be executed in any number of
counterparts and all the counterparts taken together shall be deemed to
constitute one and the same instrument.

 

17

 

 

(j)           WAIVER OF JURY TRIAL. PLEDGOR AND LENDER EACH HEREBY AGREES TO
WAIVE ITS RIGHTS TO A JURY TRIAL ON ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT,
OR ANY DEALINGS BETWEEN PLEDGOR AND LENDER. THE SCOPE OF THIS WAIVER IS INTENDED
TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT
AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING WITHOUT
LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER
COMMON LAW AND STATUTORY CLAIMS. PLEDGOR AND LENDER EACH ACKNOWLEDGES THAT THIS
WAIVER IS A MATERIAL INDUCEMENT TO LENDER TO ENTER INTO A BUSINESS RELATIONSHIP
WITH PLEDGOR. PLEDGOR REPRESENTS AND WARRANTS THAT IT HAS REVIEWED THIS WAIVER
WITH ITS LEGAL COUNSEL, AND THAT SUCH WAIVER IS KNOWINGLY AND VOLUNTARILY GIVEN
FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING
THAT IT MAY NOT BE MODIFIED, EITHER ORALLY OR IN WRITING, AND THE WAIVER SHALL
APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, REPLACEMENTS, REAFFIRMATIONS,
SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT, OR ANY OTHER DOCUMENTS OR
AGREEMENTS RELATING TO THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. IN THE
EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS CONCLUSIVE EVIDENCE OF A
WRITTEN CONSENT TO A TRIAL BY THE COURT.

 

(k)          Acknowledgment and Consent. Pledgor shall cause Issuer to execute
and deliver to Lender an Acknowledgment and Consent with respect to this
Agreement in the form of Exhibit C attached hereto in connection with the
execution and delivery of this Agreement.

 

(l)          Joint and Several Liability. If Pledgor consists of one or more
person or party, the obligations and liabilities of each such person or party
hereunder shall be joint and several.

 

19.           Irrevocable Proxy. (a) Solely with respect to Article 8 Matters
(hereinafter defined), Pledgor hereby irrevocably grants and appoints Lender,
from the date of this Agreement until the termination of this Agreement in
accordance with its terms, as Pledgor’s true and lawful proxy, for and in
Pledgor’s name, place and stead to vote the Pledged Securities, whether directly
or indirectly, beneficially or of record, now owned or hereafter acquired, with
respect to Article 8 Matters. The proxy granted and appointed in this Section
19(a) shall include the right to sign Pledgor’s name to any consent, certificate
or other document relating to an Article 8 Matter and the Pledged Securities
that applicable law may permit or require, to cause the Pledged Securities to be
voted in accordance with the preceding sentence. Pledgor hereby represents and
warrants that there are no other proxies and powers of attorney with respect to
an Article 8 Matter and the Pledged Securities that Pledgor may have granted or
appointed that are in still in effect as of the date hereof. Other than as
permitted herein or in the Loan Agreement, Pledgor will not give a subsequent
proxy or power of attorney or enter into any other voting agreement with respect
to the Pledged Securities with respect to any Article 8 Matter and any attempt
to do so with respect to an Article 8 Matter shall be void and of no effect.

 

18

 

 

(b)          As used herein, “Article 8 Matter” means any action, decision,
determination or election by Issuer or their member(s) that its membership
interests or other equity interests, or any of them, cease to be, a “security”
as defined in and governed by Article 8 of the Code, and all other matters
directly related to any such action, decision, determination or election.

 

(c)          The proxies and powers granted by Pledgor pursuant to this
Agreement are coupled with an interest and are given to secure the performance
of the Pledgor’s obligations under the Loan Documents.

 

[SIGNATURES COMMENCE ON THE FOLLOWING PAGE]

 

19

 

 

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized officers as of the date set forth above.

 

OPERATING PLEDGOR:

 

ARC NY120W5701 TRS MEZZ II, LLC, a Delaware limited liability company

 

By: ARC NY120W5701 TRS Mezz, LLC, a Delaware limited liability company

 

By: New York Recovery Operating Partnership, L.P., a Delaware limited
partnership

 

By: New York REIT, Inc., a Maryland corporation

 

By: /s/ Michael Ead                                      
Name: Michael Ead
Title: Authorized Signatory

 

[Signature Page to Pledge and Security Agreement (Operating Lessee)]

 

 

AGENT:

 

COLUMN FINANCIAL, INC., a Delaware corporation

 

By: /s/ N. Dante LaRocca_______________
Name: N. Dante LaRocca
Title: Authorized Signatory

 

[Signature Page to Pledge and Security Agreement (Operating Lessee)]

 

 

 

SCHEDULE I
To Pledge Agreement

 

BORROWER

 

ARC NY22936001, LLC, a Delaware limited liability company

ARC NY21618001, LLC, a Delaware limited liability company

ARC NY333W3401, LLC, a Delaware limited liability company

ARC NY350BL001, LLC, a Delaware limited liability company

ARC NYBLKST002, LLC, a Delaware limited liability company

ARC NYCTGRG001, LLC, a Delaware limited liability company

ARC NYWSHST001, LLC, a Delaware limited liability company

ARC NYGRNAV001, LLC, a Delaware limited liability company

ARC NYW42ST001, LLC, a Delaware limited liability company

ARC NY120W5701, LLC, a Delaware limited liability company

ARC NY24549W17, LLC, a Delaware limited liability company

50 Varick LLC, a New York limited liability company

 

 

 

 

SCHEDULE II
To Pledge Agreement

 

DESCRIPTION OF PLEDGED SECURITIES

 

Owner  Issuer     Class of Membership
Interest/Stock Certificate
Number  Percentage
 of Interests  ARC NY120W5701 TRS MEZZ II, LLC  ARC NY120W5701 TRS, LLC  Limited
liability company interests   100%

 

 

 

 

EXHIBIT A

 

INSTRUCTION TO REGISTER PLEDGE
FOR ISSUER

 

[             ], 2016

 

To:          ARC NY120W5701 TRS, LLC

405 Park Avenue
New York, New York 10022
Attention: Michael Ead

 

In accordance with the requirements of that certain Pledge and Security
Agreement, dated as the date hereof (as amended, supplemented or otherwise
modified from time to time, the “Pledge Agreement”; defined terms used herein as
therein defined), made by ARC NY120W5701 TRS MEZZ II, LLC, a Delaware limited
liability company (“Pledgor”), in favor of COLUMN FINANCIAL, INC., a Delaware
corporation, as agent for Lender (together with its successors and permitted
assigns, in such capacity, “Agent”), you are hereby instructed, notwithstanding
your and our understanding that the limited liability company interests,
partnership interests and shares of stock described below are a “security” under
the Uniform Commercial Code, as a precaution in the event that such interest was
nevertheless held not to be a security and to better assure the perfection of
the security interest of Lender in such interests, to register the pledge of the
following interests in the name of Lender as follows:

 

The 100% limited liability company interests of the undersigned in the Issuer as
listed on Schedule II to the Pledge Agreement, including, without limitation,
all of the following property now owned or at any time hereafter acquired by
Pledgor or in which Pledgor now has or at any time in the future may acquire any
right, title or interest:

 

(a)          all additional limited liability company or partnership interests
or shares of stock of, or other equity interests in, the Issuer and options,
warrants, and other rights hereafter acquired by Pledgor in respect of such
limited liability company interests, partnership interests, shares of stock or
other equity interests, as applicable (whether in connection with any capital
increase, recapitalization, reclassification, or reorganization of the Issuer or
otherwise) (all such limited liability company interests, partnership interests,
shares of stock and other equity interests, including those described on
Schedule II to the Pledge Agreement, and all such options, warrants and other
rights being hereinafter collectively referred to as the “Pledged Securities”);

 

(b)          all certificates, instruments, or other writings representing or
evidencing the Pledged Securities, and all accounts and general intangibles
arising out of, or in connection with, the Pledged Securities;

 

Exhibit A

 

 

(c)          any and all moneys or property due and to become due to Pledgor nor
or in the future in respect of the Pledged Securities, or to which Pledgor may
now or in the future be entitled to in its capacity as a member of the Issuer,
whether by way of a dividend, distribution, return of capital, or otherwise;

 

(d)          all other claims which Pledgor now has or may in the future acquire
in its capacity as a member of the Issuer against the Issuer and its property;

 

(e)          all rights of Pledgor under the operating agreement of the Issuer
(and all other agreements, if any, to which Pledgor is a party from time to time
which relate to its ownership of the Pledged Securities), including, without
limitation, all voting and consent rights of Pledgor arising thereunder or
otherwise in connection with Pledgor’s ownership of the Pledged Securities; and

 

(f)          to the extent not otherwise included, all Proceeds of any or all of
the foregoing.

 

You are hereby further authorized and instructed to execute and deliver to Agent
(for the benefit of Lender) a Confirmation Statement and Instruction Agreement,
substantially in the form of Exhibit B to the Pledge Agreement and, to the
extent provided more fully therein, to comply with the instructions of Lender in
respect of the Pledged Collateral without further consent of, or notice to, the
undersigned. Notwithstanding anything in this paragraph, this instruction shall
not be construed as expanding the rights of Lender to give instructions with
respect to the Pledged Collateral beyond such rights set forth in the Pledge
Agreement.

 

Exhibit A

 

 

  Very truly yours,       [                 ]       By:       Name:     Title:

 

Exhibit A

 

 

  AGENT:       COLUMN FINANCIAL, INC., a Delaware corporation       By:      
Name:     Title:

 

Exhibit A

 

 

EXHIBIT B

 

CONFIRMATION STATEMENT AND INSTRUCTION AGREEMENT FOR ISSUER

 

[            ], 2016

 

To:Column Financial, Inc.
11 Madison Avenue
New York, New York 10010
Attention: N. Dante LaRocca and Sarah Nelson

 

Pursuant to the requirements of that certain Pledge and Security Agreement,
dated the date hereof (as amended, supplemented or otherwise modified from time
to time, the “Pledge Agreement”; defined terms used herein as therein defined),
made by ARC NY120W5701 TRS MEZZ II, LLC, a Delaware limited liability company
(“Pledgor”), in favor of COLUMN FINANCIAL, INC., a Delaware corporation, as
agent for Lender (together with its successors and permitted assigns, in such
capacity, “Agent”), this Confirmation Statement and Instruction Agreement
relates to the Pledged Securities issued by Issuer.

 

The Pledged Securities are not (i) “investment company securities” (within the
meaning of Section 8-103 of the Code) or (ii) dealt in or traded on securities
exchanges or in securities markets.

 

The Pledged Securities are “securities” (within the meaning of Sections
8-102(a)(15) and 8-103 of the Code), and therefore, for purposes of perfecting
the security interest of Lender therein, the Issuer agrees as follows:

 

On the date hereof the registered owner of 100% of the limited liability company
interests of ARC NY120W5701 TRS, LLC is ARC NY120W5701 TRS MEZZ II, LLC;

 

The registered pledgee of the Pledged Securities is:

 

Column Financial, Inc.
Taxpayer I.D. Number: 58-2061106

 

There are no liens of the undersigned on the Pledged Securities or any adverse
claims thereto for which the Issuer has a duty under Section 8-403 of the Code
other than the liens of Agent for the benefit of Lender. The Issuer has by
book-entry registered the Pledged Securities in the name of the registered
pledgee on or before the date hereof. No other pledge is currently registered on
the books and records of the Issuer with respect to the Pledged Securities.

 

Until the Debt is paid in full, the Issuer agrees to: (i) to the extent provided
for in the Pledge Agreement and other Loan Documents, comply with the
instructions of Lender sent in accordance with Section 18(h) of the Pledge
Agreement, without any further consent from Pledgor or any other Person, in
respect of the Pledged Securities; and (ii) disregard any request made by
Pledgor or any other Person which contravenes such instructions of Lender with
respect to the Pledged Securities. Notwithstanding anything in this paragraph,
this Confirmation Statement and Instruction Agreement shall not be construed as
expanding the rights of Lender to give instructions with respect to the Pledged
Securities beyond such rights set forth in the Pledge Agreement.

 

Dated: [            ], 2016

 

[Signatures follow on the next page]

 

Exhibit B

 

  

  Very truly yours,       ARC NY120W5701 TRS, LLC, a Delaware limited liability
company       By:       Name:     Title:

 

[Signatures continue on next Page]

 

Exhibit B

 

  

ACKNOWLEDGED AND AGREED:

 

AGENT:

 

COLUMN FINANCIAL, INC.,

a Delaware corporation

 

By:     Name:   Title:  

 

Exhibit B

 

 

EXHIBIT C

 

ACKNOWLEDGMENT AND CONSENT

 

Issuer hereby acknowledges receipt of a copy of the Pledge and Security
Agreement (the “Pledge Agreement”; defined terms used herein as therein
defined), dated as of December 20, 2016, made by ARC NY120W5701 TRS MEZZ II,
LLC, a Delaware limited liability company (“Pledgor”) in favor of COLUMN
FINANCIAL, INC., a Delaware corporation, as agent for Lender (together with its
successors and permitted assigns, in such capacity, “Agent”), and agrees that
Pledgor is bound thereby. Issuer agrees to notify Agent for the benefit of
Lender promptly in writing of the occurrence of any of the events described in
Section 5(a) of the Pledge Agreement.

 

Dated as of [            ], 2016

 

[Signatures follow on next page]

 

Exhibit C

 

 

  ISSUER:       ARC NY120W5701 TRS, LLC       By:       Name:     Title:

 

Exhibit C