Document:

Exhibit 10.1

 

EXECUTION COPY

 

SETTLEMENT AGREEMENT

 

This Settlement
Agreement (this “Agreement”) is made and entered into as of October 23, 2016 by and among New York REIT, Inc.,
a Maryland corporation (the “Company”), and the entities and natural persons set forth on the signature page
hereto (collectively, “WW Investors”) (each of the Company and WW Investors is hereafter referred to as a “Party”
to this Agreement, and collectively as the “Parties”).

 

RECITALS

 

WHEREAS,
the Company and WW Investors have engaged in various discussions and communications concerning the Company’s business, financial
performance and strategic plans;

 

WHEREAS,
as of the date of this Agreement, WW Investors has a combined beneficial and economic ownership interest in shares of common stock
of the Company (the “Common Stock”) totaling, in the aggregate, 1,213,140 shares; and

 

WHEREAS,
as of the date of this Agreement, the Company and WW Investors have determined to come to an agreement with respect to the composition
of the Board of Directors of the Company (the “Board”) and certain other matters, as provided in this Agreement.

 

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

 

1.          Board Matters; 2016 Annual
Meeting.

 

(a)  Board Representation.

 

(i)  Effective
immediately upon the appointment of the New WW Appointees (as defined below) to the Board, WW Investors hereby irrevocably withdraws
and renounces any intention to nominate any person for election as a director at the 2016 annual meeting of stockholders of the
Company and any postponement or adjournment thereof (the “2016 Annual Meeting”).

 

     

     

    

 

(ii)  The
Company agrees that immediately following the execution of this Agreement, the Board and all applicable committees of the Board
shall take all necessary actions to (A) increase the size of the Board from six (6) members to nine (9) members, (ii) appoint to
the Board each of James Hoffmann (“Hoffmann”), Gregory Hughes (“Hughes” and together with
Hoffman, the “New WW Appointees”) and Craig T. Bouchard, and (iii) opt out of Section 3-803 of the Maryland
General Corporation Law, as amended (“Section 3-803”); provided that the Company may thereafter elect to be
subject to Section 3-803 conditioned upon the approval thereof by stockholders of the Company by the affirmative vote of at least
a majority of the votes cast on the matter by stockholders entitled to vote generally in the election of directors. So long as
WW Investors is not in breach of this Agreement, including, without limitation, Section 1(c)(vii) hereof (the “Requirements”),
(x) each New WW Appointee shall stand for election to the Board at the 2016 Annual Meeting, together with the Company’s other
nominees (as determined by the Nominating and Corporate Governance Committee of the Board, but subject to the approval of the Board,
at least eight (8) of whom will be independent, as defined in Section 303A.02 of the New York Stock Exchange Listed Company Manual
(the “NYSE Company Manual”)) and (y) if any New WW Appointee should resign from the Board or be rendered unable
to serve on the Board by reason of death or disability prior to the end of the Standstill Period (as defined below), then WW Investors
shall be entitled to recommend a replacement nominee to the Nominating and Corporate Governance Committee of the Board (the “Governance
Committee”) to fill the resulting vacancy, who shall meet the Governance Committee’s qualification and membership
requirements and applicable independence standards, including, without limitation, independence from WW Investors and its Affiliates
and Associates, and other requirements of the Exchange Act (as defined below), the rules and regulations of the SEC (as defined
below) and the listing standards for the New York Stock Exchange (or such other securities exchange on which the Common Stock shall
be principally listed or traded), and shall not serve on the board of directors or similar governing body of any entity that is
an Affiliate of or managed by WW Investors or any of its Affiliates or in which WW Investors or any of its Affiliates is not a
passive investor (any such replacement nominee appointed to the Board in accordance with this Section 1(a)(ii) shall be referred
to as a “Replacement Director”). The appointment of a Replacement Director to the Board shall be subject to
the recommendation of the Governance Committee and approval of the Board in their sole discretion, after exercising their duties
in good faith. In the event that the Governance Committee or the Board does not accept a person recommended by WW Investors as
a Replacement Director, WW Investors shall have the right to recommend additional replacements to fill the resulting vacancy, whose
appointment shall be subject to the recommendation of the Governance Committee and approval of the Board in accordance with the
procedures described above. Any such Replacement Director shall be deemed to be a New WW Appointee for all purposes under this
Agreement. The Company agrees that the number of directors on the Board shall not exceed nine (9) prior to the end of the Standstill
Period, except in the event that the Board is expanded or subject to expansion in connection with the consummation of an equity
financing that is approved by the Board.

 

(iii)  
The Company will, subject to continued compliance with the Requirements, recommend, support and solicit proxies for the election
of the New WW Appointees at the 2016 Annual Meeting in the same manner as for the Company’s other nominees at the 2016 Annual
Meeting, which meeting shall be held as soon as practicable. The Company shall use reasonable best efforts to hold the 2016 Annual
Meeting simultaneously with the stockholders’ meeting to vote upon the proposed plan of liquidation to sell all or substantially
all of the assets of the Company and New York Recovery Operating Partnership, L.P., the operating partnership of the Company (the
“Operating Partnership”), and to liquidate and dissolve the Company and the Operating Partnership (the “Plan
of Liquidation”); and, the definitive proxy statement for the 2016 Annual Meeting shall include a proposal to consider
the approval of the Plan of Liquidation.

 

(b)  Committee
Representation. Immediately following the execution of this Agreement, the Board will take all action necessary in furtherance
of (i) the appointment of Hoffman to the Audit Committee of the Board, and (ii) the appointment of Hughes to the Compensation Committee
of the Board. Such Committee appointments of Hoffman and Hughes shall continue so long as each of Hoffman and Hughes is a member
of the Board or as such appointment is otherwise consented to by Hoffman and/or Hughes, respectively; and, if Hoffman and/or Hughes
should resign from the Board or be rendered unable to serve on the Board by reason of death or disability prior to the end of the
Standstill Period while serving on either the Audit Committee or Compensation Committee, as applicable, then WW Investors shall
be entitled to designate a Replacement Director to such Committee(s). For the avoidance of doubt, the Board and applicable committees
of the Board may, but shall not be required to, consider either or both of the New WW Appointees for membership on any other committees
of the Board (including any committees of the Board formed after the date of this Agreement); provided, however, that in no event
shall either of the New WW Appointees serve on the Conflicts Committee of the Board or any other committee of the Board formed
for the purpose of evaluating proposals made by any person or entity to serve as the Company’s external advisor or manager
pursuant to the Company’s publicly announced request for proposals (the “RFP”). Until the expiration of
the Standstill Period (as defined below), if at least one (1) of the New WW Appointees remains on the Board, the Company shall
not establish an executive committee of the Board without the approval of such New WW Appointee or New WW Appointees if more than
one (1) of the New WW Appointees remains on the Board.

 

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(c)  Additional
Agreements.

 

(i)  WW
Investors agrees that it will cause its Affiliates and Associates to comply with the terms of this Agreement and shall be responsible
for any breach of this Agreement by any such Affiliate or Associate. As used in this Agreement, the terms “Affiliate”
and “Associate” shall have the respective meanings set forth in Rule 12b-2 promulgated by the Securities and Exchange
Commission (the “SEC”) under the Securities Exchange Act of 1934, as amended, or the rules or regulations promulgated
thereunder (the “Exchange Act”), and shall include all persons or entities that at any time during the term
of this Agreement become Affiliates or Associates of any person or entity referred to in this Agreement.

 

(ii)  Upon
execution of this Agreement, WW Investors hereby agrees that it will not, and that it will not permit any of its Affiliates or
Associates to, (A) nominate or recommend for nomination any person for election at the 2016 Annual Meeting, directly or indirectly,
(B) submit any proposal for consideration at, or bring any other business before, the 2016 Annual Meeting, directly or indirectly,
or (C) initiate, encourage or participate in any “vote no,” “withhold” or similar campaign with respect
to the 2016 Annual Meeting and/or the Plan of Liquidation, directly or indirectly. WW Investors shall not publicly or privately
encourage or support any other stockholder to take any of the actions described in this Section 1(c)(ii).

 

(iii)  WW
Investors agrees that it will appear in person or by proxy at the 2016 Annual Meeting and at each other meeting of stockholders
of the Company held prior to the expiration of the Standstill Period, and will vote all shares of Common Stock beneficially owned
by WW Investors (A) in favor of the Company’s nominees, and (B) otherwise in accordance with the Board’s recommendation,
including in favor of any other matter recommended for stockholder approval by the Board (including approval of the Plan of Liquidation).

 

(iv)  Prior
to the date of this Agreement, each New WW Appointee has submitted to the Company a fully completed copy of the Company’s
standard director and officer questionnaire and other reasonable and customary director onboarding documentation required by the
Company in connection with the appointment or election of new Board members, including a consent to be named as a nominee in the
Company’s proxy statement for the 2016 Annual Meeting and to serve as a director if elected.

 

(v)  WW
Investors agrees that the Board or any committee thereof, in the exercise of its duties, may recuse either of the New WW Appointees
from any Board or committee meeting or portion thereof at which the Board or any such committee is evaluating and/or taking action
with respect to the exercise of any of the Company’s rights or enforcement of any of the obligations under this Agreement.

 

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(vi)  The
New WW Appointees, in addition to all current directors, will be required to (A) comply with all policies, procedures, codes, rules,
standards and guidelines applicable to members of the Board, and (B) keep confidential all Company confidential information and
not disclose to any third parties discussions or matters considered in meetings of the Board or Board committees.

 

(vii)  From
the date of this Agreement until such time as the Company makes a public announcement that it has selected an external advisor
or manager pursuant to the RFP or, if WW Investors or an Affiliate thereof shall be selected by the Company to serve as the Company’s
external advisor or manager pursuant to the RFP, for so long as WW Investors serves in such capacity, WW Investors shall not sell
or agree to sell, through ordinary open market sale transactions or otherwise, through swap or hedging transactions or otherwise,
any shares of Common Stock or any derivatives relating to Common Stock; provided, however, that if (A) any person or entity other
than WW Investors, Winthrop Realty Partners, L.P. (“Winthrop”) or any Affiliate thereof is selected by the Company
to serve as the Company’s external advisor or manager pursuant to the RFP, following the public disclosure by the Company
thereof WW Investors may sell or agree to sell all or any portion of its shares of Common Stock or any derivatives relating to
Common Stock or (B) WW Investors, Winthrop or any Affiliate thereof is selected by the Company to serve as the Company’s
external advisor or manager pursuant to the RFP, WW Investors may sell or agree to sell shares of Common Stock or any derivatives
relating to Common Stock so long as WW Investors continues to maintain a combined beneficial and economic ownership interest in
at least 1,000,000 shares of Common Stock in the aggregate (the “Minimum Ownership Threshold”). The Minimum
Ownership Threshold shall be subject to equitable adjustment if any change in the outstanding shares of Common Stock shall occur
as a result of any reclassification, recapitalization, reorganization, stock split (including a reverse stock split) or combination,
exchange or readjustment of shares, or any stock dividend or stock distribution is declared. WW Investors shall promptly (and in
any event within five (5) business days) inform the Company in writing if at any time WW Investor’s aggregate ownership of
Common Stock decreases to less than the Minimum Ownership Threshold.

 

2.           Standstill Provisions. WW Investors agrees that, from the date of this Agreement until the
expiration of the Standstill Period, neither it nor any of its Affiliates or Associates shall, and it shall cause each of its
Affiliates and Associates not to, directly or indirectly, in any manner:

 

(a)  engage
in any solicitation of proxies or consents or become a “participant” in a “solicitation” (as such terms
are defined in Regulation 14A under the Exchange Act) of proxies or consents (including, without limitation, any solicitation of
consents that seeks to call a special meeting of stockholders), in each case, with respect to securities of the Company;

 

(b)  form,
join or in any way participate in any “group” (within the meaning of Section 13(d)(3) of the Exchange Act) with respect
to the Common Stock (other than a “group” that includes all or some of the entities or persons identified on Exhibit
A, but does not include any other entities or persons not identified on Exhibit A as of the date hereof); provided,
however, that nothing herein shall limit the ability of an Affiliate of WW Investors to join the “group” following
the execution of this Agreement, so long as any such Affiliate agrees to be bound by the terms and conditions of this Agreement;

 

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(c)  deposit
any Common Stock in any voting trust or subject any Common Stock to any arrangement or agreement with respect to the voting of
any Common Stock, other than any such voting trust, arrangement or agreement solely among the members of WW Investors and otherwise
in accordance with this Agreement;

 

(d)  seek,
or encourage any person or entity, to submit nominations in furtherance of a “contested solicitation” for the election
or removal of directors with respect to the Company or seek, encourage or take any other action with respect to the election or
removal of any directors;

 

(e)  (i) make
any proposal for consideration by stockholders at any annual or special meeting of stockholders of the Company, (ii) make any offer
or proposal (with or without conditions) with respect to any merger, acquisition, recapitalization, restructuring, disposition,
liquidation, dissolution or other business combination involving WW Investors and the Company, (iii) affirmatively solicit a third
party, on an unsolicited basis, to make an offer or proposal (with or without conditions) with respect to any merger, acquisition,
recapitalization, restructuring, disposition, liquidation, dissolution or other business combination involving the Company, or
publicly encourage, initiate or support any third party in making such an offer or proposal, (iv) publicly comment on any third
party proposal regarding any merger, acquisition, recapitalization, restructuring, disposition, liquidation, dissolution or other
business combination with respect to the Company by such third party prior to such proposal becoming public, or (v) call or seek
to call a special meeting of stockholders;

 

(f)  seek,
alone or in concert with others, representation on the Board, except as specifically permitted in Section 1;

 

(g)  seek to
advise, support, influence or knowingly encourage any person or entity with respect to the voting or disposition of any securities
of the Company at any annual or special meeting of stockholders, except in accordance with Section 1;

 

(h)  acquire,
announce an intention to acquire, offer or propose to acquire, or agree to acquire, directly or indirectly, by purchase or otherwise,
beneficial ownership of any voting stock of the Company that, together with any voting stock beneficially owned thereby, represents
in the aggregate in excess of 4.9% of the Company’s outstanding voting stock;

 

(i)  institute
any litigation against the Company, its directors or its officers, make any “books and records” demands against the
Company or make application or demand to a court or other person or entity for an inspection, investigation or examination of the
Company or its subsidiaries or Affiliates; provided, however, that nothing shall prevent WW Investors from bringing litigation
to enforce the provisions of this Agreement;

 

(j)  enter
into or maintain any economic, compensatory, pecuniary or other arrangements with any director or nominees for director of the
Company, other than the New WW Appointees;

 

(k)  other
than in ordinary open market sale transactions on the New York Stock Exchange in which the identity of the purchaser is not known
and in accordance with applicable securities laws and subject to Section 1(c)(vii) of this Agreement, sell or agree to sell, through
swap or hedging transactions or otherwise, any shares of Common Stock or any derivatives relating to Common Stock to any third
party;

 

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(l)  make any
request or submit any proposal to amend the terms of this Agreement other than through non-public communications with the Company
that would not be reasonably determined to trigger public disclosure obligations for any Party; or

 

(m)  enter
into any negotiations, discussions, agreement, arrangement or understanding with any person or entity concerning any of the foregoing
(other than this Agreement) or encourage or solicit any person or entity to undertake any of the foregoing activities.

 

For purposes of this Agreement, the term
“Standstill Period” means the period commencing on the date of this Agreement and ending on the later of (x)
December 31, 2017 and (y) the date that neither of the New WW Appointees continue to serve on the Board; provided, however, that
notwithstanding the foregoing, the Standstill Period shall terminate on the date that the Company files its definitive proxy statement
in respect of an annual meeting of the Company’s stockholders with the SEC if either of the New WW Appointees is not nominated
for election to the Board therein, unless the failure to be so nominated is due to the occurrence of an event with respect to a
New WW Appointee that would require disclosure in the Company’s definitive proxy statement pursuant to Item 401(f) of Regulation
S-K promulgated by the SEC.

 

3.            Representations
and Warranties of the Company. The Company represents and warrants to WW Investors that (a) the Company has the corporate power
and authority to execute this Agreement and to bind it thereto, and (b) this Agreement has been duly and validly authorized, executed
and delivered by the Company and constitutes a valid and binding obligation and agreement of the Company, and is enforceable against
the Company in accordance with its terms, except as enforcement thereof may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or similar laws generally affecting the rights of creditors and subject to general equity principles.

 

4.            Representations
and Warranties of WW Investors. Each of the WW Investors jointly and severally represent and warrant to the Company that (a)
as of the date hereof, each person and entity beneficially owns only the number of shares of voting stock of the Company as described
opposite its name on Exhibit A and, other than through the shares of voting stock beneficially owned as set forth on Exhibit
A, none of the WW Investors nor any Affiliate or Associate thereof has or may exercise any voting rights with respect to any
shares of the Company’s capital stock or beneficial ownership of or economic exposure to the Company’s voting stock
(e.g., through swaps, short sales or other derivative arrangements), (b) this Agreement has been duly and validly authorized, executed
and delivered by each of the WW Investors and constitutes a valid and binding obligation and agreement of each of the WW Investors,
enforceable against each of the WW Investors in accordance with its terms, except as enforcement thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or similar laws generally affecting the rights of creditors
and subject to general equity principles, (c) each of the WW Investors has the authority to execute this Agreement and to bind
it thereto, and (d) neither of the New WW Appointees is now nor has ever been party to any contract, agreement, arrangement, understanding,
employment or otherwise, with WW Investors or any of their respective Affiliates or Associates or, to the best of its/his knowledge,
the Company or any of its Affiliates or Associates, in any such case that would jeopardize such New WW Appointee’s status
as an independent director, including, without limitation, independence as related to WW Investors, its Affiliates and Associates
and as defined in Section 303A.02 of the NYSE Company Manual.

 

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5.            Press
Release. Promptly following the execution of this Agreement, the Company and WW Investors shall jointly issue a mutually agreeable
press release (the “Press Release”) announcing certain terms of this Agreement in the form attached hereto as
Exhibit B. Prior to the issuance of the Press Release and subject to the terms of this Agreement, neither the Company (including
the Board and any committee thereof) nor WW Investors shall issue any press release or make public announcement regarding this
Agreement or the matters contemplated hereby without the prior written consent of the other Party. During the Standstill Period,
neither the Company nor WW Investors nor either of the New WW Appointees shall make any public announcement or statement that is
inconsistent with or contrary to the terms of this Agreement.

 

6.            Specific
Performance. Each of WW Investors, on the one hand, and the Company, on the other hand, acknowledges and agrees that irreparable
injury to the other Party hereto would occur in the event any of the provisions of this Agreement was not performed in accordance
with its specific terms or was otherwise breached and that such injury would not be adequately compensable by the remedies available
at law (including the payment of money damages). It is accordingly agreed that WW Investors, on the one hand, and the Company,
on the other hand (the “Moving Party”), shall each be entitled to specific enforcement of, and injunctive relief
to prevent any violation (or threatened violation) of, the terms hereof, and the other Party hereto (a) will not take action, directly
or indirectly, in opposition to the Moving Party seeking such relief on the grounds that any other remedy or relief is available
at law or in equity, (b) agrees to waive any applicable right or requirement that a bond be posted by the Moving Party, and (c)
if such Moving Party is awarded a final unappealable judgment in its favor in connection with the enforcement of the terms of this
Agreement, the other Party shall reimburse the Moving Party for all of its reasonable and documented out-of-pocket costs incurred
pursing such final judgment. This Section 6 is not the exclusive remedy for any violation of this Agreement, but will be in addition
to all other remedies available at law or in equity.

 

7.            Expenses.
The Company shall, within thirty (30) days after the execution and delivery of this Agreement, reimburse WW Investors for its reasonable,
documented out-of-pocket fees and expenses (including legal expenses) incurred in connection with WW Investors’ involvement
at the Company including, but not limited to, the nomination of directors and the negotiation and execution of this Agreement;
provided that such reimbursement shall not exceed $700,000 in the aggregate; provided, however, that any fees and expenses that
relate to the RFP, the advisory agreement with the Company (either prior to or after the date of the RFP) any proposal by WW Investors,
Winthrop or any Affiliate thereof to serve as the Company’s external advisor or manager pursuant to the RFP or otherwise
or any announcements in respect thereof shall not be subject to reimbursement hereunder.

 

8.           Severability.
If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction 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. It is hereby stipulated and declared to be the intention of
the Parties that the Parties would have executed the remaining terms, provisions, covenants and restrictions without including
any of such which may be hereafter declared invalid, void or unenforceable. In addition, the Parties agree to use their reasonable
best efforts to agree upon and substitute a valid and enforceable term, provision, covenant or restriction for any of such that
is held invalid, void or enforceable by a court of competent jurisdiction.

 

9.            Notices.
Any notices, consents, determinations, waivers or other communications required or permitted to be given under the terms of this
Agreement must be in writing and will be deemed to have been delivered: (a) upon receipt, when delivered personally; (b) upon confirmation
of receipt, when sent by e-mail (provided such confirmation is not automatically generated); or (c) one (1) business day after
deposit with a nationally recognized overnight delivery service, in each case properly addressed to the Party to receive the same.
The addresses, facsimile numbers and e-mail addresses for such communications shall be:

 

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If to the Company:

 

New York REIT, Inc.

405 Park Avenue

New York, New York 10022

Attention:    Randolph C. Read

Email:    rcread@icmgi.com

 

with a copy (which shall not constitute
notice) to:

 

Proskauer Rose LLP

Eleven Times Square

New York, New York 10036

Attention:    Steven L. Lichtenfeld

E-mail:    SLichtenfeld@proskauer.com

 

If to WW Investors:

 

WW Investors LLC

Two Jericho Plaza

Suite 111-Wing A

Jericho, New York 11753

Email:    mashner@firstwinthrop.com

 

with a copy (which shall
not constitute notice) to:

 

Olshan Frome Wolosky LLP

65 East 55th Street

New York, New York 10022

Attention:        Steve Wolosky

  Aneliya Crawford

Email:   swolosky@olshanlaw.com

   acrawford@olshanlaw.com

 

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10.         Applicable
Law. This Agreement, and all claims or causes of actions (whether at law, in contract or in tort) that may be based upon, arise
out of or related to this Agreement or the negotiation, execution or performance of this Agreement, shall be governed by, and construed
in accordance with, the laws of the State of Maryland without giving effect to conflicts of laws principles (whether of the State
of Maryland or any other jurisdiction that would cause the application of the laws of any jurisdiction other than the State of
Maryland). All actions and proceedings arising out of or relating to this Agreement shall be heard and determined exclusively in
the courts of New York County, New York, or if jurisdiction over the matter is vested exclusively in federal courts, the United
States District Court for Southern District of New York, and the appellate courts to which orders and judgments thereof may be
appealed (the “Chosen Courts”). Each of the Parties hereby irrevocably and unconditionally (a) submits to the
exclusive jurisdiction of the Chosen Courts for the purpose of any action or proceeding arising out of or relating to this Agreement
brought by any Party, whether sounding in tort, contract or otherwise, (b) agrees not to commence any such action or proceeding
except in such courts, (c) agrees that any claim in respect of any such action or proceeding may be heard and determined in any
Chosen Court, (d) waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter
have to the laying of venue of any such action or proceeding, and (e) waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding. Each of the Parties agrees that a final judgment in any
such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law. Each Party irrevocably consents to service of process in the manner provided for notices in Section 9.
Nothing in this Agreement will affect the right of any Party to serve process in any other manner permitted by law. The Parties
acknowledge that nothing in this Agreement shall limit the exercise of any director’s duty as a director of the Company under
applicable law (including the New WW Appointees).

 

11.         Counterparts.
This Agreement may be executed in two or more counterparts, each of which shall be considered one and the same agreement and shall
become effective when counterparts have been signed by each of the Parties and delivered to the other Party (including by means
of electronic delivery or facsimile).

 

12.          Mutual
Non-Disparagement. Subject to applicable law, each of the Parties covenants and agrees that during the Standstill Period, neither
it nor any of its respective agents, subsidiaries, affiliates, successors, assigns, officers or directors, shall in any way publicly
criticize, disparage, call into disrepute or otherwise defame or slander the other Party or such other Party’s subsidiaries,
affiliates, successors, assigns, officers (including any current officer of a Party or a Party’s subsidiaries who no longer
serves in such capacity at any time following the execution of this Agreement), directors (including any current director of a
Party or a Party’s subsidiaries who no longer serves in such capacity at any time following the execution of this Agreement),
employees, advisors or managers (including, in the case of WW Investors, New York Recovery Advisors, LLC), stockholders, agents,
attorneys or representatives, or any of their businesses, in any manner that would reasonably be expected to damage the business
or reputation of such other Party, their businesses or their subsidiaries, affiliates, successors, assigns, officers (or former
officers), directors (or former directors), employees, stockholders, agents, attorneys or representatives.

 

13.          Securities
Laws. WW Investors acknowledges that it is aware, and will advise each of its representatives who are informed as to the matters
that are the subject of this Agreement, that the United States securities laws may prohibit any person or entity who has received
from an issuer material, non-public information from purchasing or selling securities of such issuer or from communicating such
information to any other person or entity under circumstances in which it is reasonably foreseeable that such person or entity
is likely to purchase or sell such securities.

 

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14.         Entire
Agreement; Amendment and Waiver; Successors and Assigns; Third Party Beneficiaries. This Agreement contains the entire understanding
of the Parties with respect to the subject matter of this Agreement. There are no restrictions, agreements, promises, representations,
warranties, covenants or undertakings between the Parties with respect to the subject matter of this Agreement other than those
expressly set forth herein. No modifications of this Agreement can be made except in writing signed by an authorized representative
of each the Company and WW Investors. No failure on the part of any Party to exercise, and no delay in exercising, any right, power
or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of such right, power or remedy
by such Party preclude any other or further exercise thereof or the exercise of any other right, power or remedy. All remedies
hereunder are cumulative and are not exclusive of any other remedies provided by law. The terms and conditions of this Agreement
shall be binding upon, inure to the benefit of, and be enforceable by the Parties hereto and their respective successors, heirs,
executors, legal representatives, and permitted assigns. No Party shall assign this Agreement or any rights or obligations hereunder
without, with respect to WW Investors, the prior written consent of the Company, and with respect to the Company, the prior written
consent of WW Investors. This Agreement is solely for the benefit of the Parties and is not enforceable by any other persons or
entities.

 

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IN WITNESS WHEREOF, this Agreement
has been duly executed and delivered by the duly authorized signatories of the Parties as of the date hereof.

 

	 	NEW YORK REIT, INC.
	 	 	 
	 	By:	/s/ Randolph C. Read
	 	 	Name: Randolph C. Read
	 	 	Title: Chairman

 

	 	WW INVESTORS LLC
	 	 	 
	 	By:	/s/ Michael L. Ashner
	 	 	Name: Michael L. Ashner
	 	 	Title: Manager and Member
	 	 	 
	 	/s/ Michael L. Ashner
	 	MICHAEL L. ASHNER
	 	 	 
	 	/s/ Steven Witkoff
	 	STEVEN WITKOFF

 

     

     

    

 

EXHIBIT A

 

	Stockholder	 	Shares of Common Stock
	 	 	 
	WW Investors LLC	 	80
	 	 	 
	Michael L. Ashner	 	
        1,057,100 and 6,000 shares held in spouse’s IRA

	 	 	 
	Steven Witkoff	 	149,960

 

     

     

    

 

EXHIBIT B

 

FORM OF PRESS RELEASE

 

[To be attached]ex10-1.htm

Exhibit 10.1

 

 

AMENDMENT NUMBER ONE

 

TO LOAN AND SECURITY AGREEMENT

 

by and between

 

 

 

 

NORTHWEST PIPE

 

and

 

PERMALOK CORPORATION

 

individually and collectively, as Borrower

 

 

 

 

and

 

Bank of America, N.A.,

 

as Agent and Lender

 

 

 

 

 

 

 

 Dated as of October 19, 2016

 

 

  

 

 

 

 

 

AMENDMENT NUMBER ONE

TO LOAN AND SECURITY AGREEMENT

 

 

THIS AMENDMENT NUMBER ONE TO LOAN AND SECURITY AGREEMENT (this “Amendment”) is made as of October 19, 2016 (the “Effective Date”), by and between NORTHWEST PIPE COMPANY, an Oregon corporation ("Borrower 1") and PERMALOK CORPORATION, a Missouri corporation ("Borrower 2" and together with Borrower 1, collectively "Borrowers"), "), the financial institutions party to this Agreement from time to time as Lenders, and BANK OF AMERICA, N.A., a national banking association, as agent for the Lenders ("Agent").

 

RECITALS

 

A.     Agent and Borrowers entered into that certain Loan and Security Agreement dated as of October 26, 2015 (the “Loan Agreement”) in connection with a revolving credit facility in an amount of up to Sixty Million Dollars ($60,000,000).

 

B.     Borrower 1 is in the process of executing the following transaction(s) (collectively, the “Transaction”): (i) on or about October 4, 2016, Borrower 1 sold the real estate consisting of and certain assets that were maintained at Borrower 1's Denver production facility (generally located at 6030 Washington Street, Denver, Colorado), which sale generated gross proceeds to Borrower 1 of $14,400,000 (ii) transferring certain Equipment located at Borrower 1's Denver production facility to Borrower 1's Adelanto production facility with a Value equal to $1,270,250 (the "Transferred Equipment") and (iii) selling or scrapping certain Equipment located at Borrower 1's Denver production facility with a Value equal to $1,614,100 (the "Liquidated Equipment"). 

 

C.     As required by the Loan Agreement, Borrowers have requested that Agent and Lender consent to the Transaction. 

 

D.     Agent and Lender are willing to consent to the Transaction and modify the Loan Agreement on the terms and conditions hereinafter set forth.

 

E.     Capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the Loan Agreement.

 

NOW, THEREFORE, for good and valuable consideration and in order to induce Agent and Lender to consent to the Transaction, Borrowers, Agent and Lender agree as follows:

 

1.     Consent. Agent and Lender hereby consent to the Transaction subject to satisfaction of the conditions to consent set forth in Section 2 below. 

 

2.     Conditions to Consent to Transaction. Agent’s and Lender’s consent provided in Section 1 hereof shall be effective on and as of the date hereof, provided the following conditions are satisfied as of such date:

 

(a)     No Default or Event of Default shall exist at the time of, or result from, the Transaction;

 

 

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(b)     The representations and warranties of each Obligor in the Loan Documents shall be true and correct in all material respects on the date of and upon giving effect to the closing of the Transaction except for those representations that expressly relate to an earlier date; 

 

(c)     No event shall have occurred or circumstances exist that has or could reasonably be expected to have a Material Adverse Effect; 

 

(d)     Net Proceeds from the Transaction have been or shall be deposited into a Deposit Account Borrower maintains with Agent unless otherwise consented to by Agent; and

 

(e)     Each of the conditions to modification of the Loan Agreement set forth in Section 4 hereof shall have been satisfied. 

 

3.     Loan Modifications.

 

(a)     The following defined terms as set forth in the Loan Agreement are hereby amended and replaced with the defined terms as set forth below:

 

Eligible Equipment: Equipment of a Borrower which Agent, in its discretion, determines to be Eligible Equipment and that is listed on an appraisal of Equipment acceptable to Agent completed during the 30 days prior to the Closing Date. Without limiting the discretion of the Agent to establish other criteria of ineligibility, Eligible Equipment shall not include any Equipment: (a) that is not legally owned by a Borrower; (b) that is not subject to the Agent's Liens, which are perfected as to such Equipment, or that are subject to any other Lien whatsoever other than Permitted Liens; (c) that is not in good working condition for its intended use or for sale; (d)  that is located outside the United States or at a location other than a place of business of a Borrower; or (e) that is located in a facility leased by a Borrower, if the lessor has not delivered to the Agent, if requested by the Agent, a landlord waiver in form and substance satisfactory to the Agent or if a Reserve for rents has not been established for Equipment at that location.  Borrowers, by including Equipment in any computation of the Borrowing Base, shall be deemed to represent and warrant to the Agent that such Equipment is not of the type described in any of (a) through (e) above, and if any Equipment at any time ceases to be Eligible Equipment, then such Equipment shall promptly be excluded from the calculation of Eligible Equipment. For avoidance of doubt, no Equipment acquired after the Closing Date or not reflected in an appraisal of Equipment acceptable to Agent completed during the 30 days prior to the Closing Date shall be treated as Eligible Equipment.

 

Equipment Formula Amount: the lesser of (a) $15,000,000; and (b) 85% of the NOLV Percentage of the Value of Eligible Equipment, in each case as reduced by the Value of Eligible Equipment sold, transferred or otherwise disposed of by Borrowers; provided, however, that the Equipment Formula Amount shall be subject to quarterly step-downs starting on the first day of the first full calendar quarter following the Closing Date and on the 1st day of each calendar quarter thereafter based on a level 10-year straight line amortization schedule. 

 

 

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Value: (a) for Inventory, its value (i) for raw materials, determined on the basis of the lower of cost or market calculated on average costing, (ii) for finished goods (other than CEEEB Inventory), determined on the basis of the lower of cost or market calculated on average costing calculated on a first-in, first-out basis, and (iii) for CEEEB Inventory, calculated using cost-to-cost percentage of completion method; in each case excluding any portion of cost attributable to intercompany profit among Borrowers and their Affiliates; (b) for Equipment, its value as expressed in the most recent appraisal of such Equipment received by and acceptable to Agent; and (b) for an Account, its face amount, net of any returns, rebates, discounts (calculated on the shortest terms), credits, allowances or Taxes (including sales, excise or other taxes) that have been or could be claimed by the Account Debtor or any other Person.

 

(b)     Section 5.2 of the Loan Agreement is hereby deleted and replaced with the following:

 

5.2     Repayment of Revolver Loans. Revolver Loans shall be due and payable in full on the Revolver Termination Date, unless payment is sooner required hereunder. Revolver Loans may be prepaid from time to time, without penalty or premium. Subject to Section 2.1.5, if an Overadvance exists at any time, Borrowers shall, on the sooner of Agent's demand or the first Business Day after any Borrower has knowledge thereof, repay Revolver Loans in an amount sufficient to reduce Revolver Usage to the Borrowing Base. If any Asset Disposition includes the disposition of Accounts or Inventory or Equipment and results in an Overadvance, Borrowers shall apply (i) so long as there is no Event of Default, Net Proceeds to repay Revolver Loans in an amount sufficient to eliminate such Overadvance and (ii) during the continuance of an Event of Default, Net Proceeds to repay Revolver Loans equal to the greater of (a) the net book value of such Accounts, Inventory and Equipment, or (b) the reduction in Borrowing Base resulting from the disposition.

 

(c)     Borrowing Base. As of the date hereof, Agent and Borrower agree to the following treatment with respect to the Borrowing Base:

 

(i)     Equipment Formula Amount. Prior to giving effect to the Transaction, the Equipment Formula Amount calculation as amortized to account for the quarterly steps-downs is presently calculated to be equal to $14,082,120. As of the date hereof, (A) the Equipment Formula Amount shall be reduced by 76.52% of the Value of the Liquidated Equipment (which Agent and Borrower have determined to be equal to $1,235,110) and (B) the Equipment Formula Amount shall be reduced by the Value of the Transferred Equipment except as follows: (x) the Transferred Equipment is otherwise Eligible Equipment and has been transferred to and received at the Adelanto production facility and (y) if the Transferred Equipment is otherwise Eligible Equipment but remains at the Denver production facility, the Equipment Formula Amount shall not be reduced unless such Transferred Equipment remains at the Denver production facility upon the expiration of that Lease Agreement dated October 4, 2016, by and between Borrower 1 and Prologis, L.P. respecting the Denver production facility (which Lease Agreement is set to expire on December 31, 2016 but is subject to two potential extensions of 30 days each). 

 

 

- 3 -

 

 

(ii)     Inventory Formula Amount. As of the date hereof, Agent will make the finished good CEEEB Inventory eligible under Inventory Formula Amount; provided, however, that until a new appraisal (in form and substance acceptable to Agent) of the CEEEB Inventory is received by Agent, the (b) competent of the definition of Inventory Formula Amount shall equal:

 

(b) the lesser of (i) $5,000,000 and (ii) 65% of the Value of Eligible CEEEB Inventory.

 

Following receipt of an acceptable appraisal of the CEEEB Inventory by Agent, the (b) competent of the definition of Inventory Formula Amount shall equal:

 

(b) the lesser of (i) $5,000,000; (ii) 65% of the Value of Eligible CEEEB Inventory; or (ii) 85% of the NOLV Percentage of the Value of Eligible CEEEB Inventory.

 

4.     Conditions to Loan Modification. The modifications to the Loan Documents set forth in Section 3 hereof shall be effective as of the date hereof subject to the satisfaction of the following conditions:

 

(a)     Delivery of Amendment. Each Borrower, Agent and each Lender shall have executed and delivered to Agent counterparts of this Amendment; 

 

(b)     Evidence of Authority. Agent shall have received the following, each in form and substance satisfactory to Agent and its legal counsel, such certificates of officers of the entities (other than Agent or any Lender) executing this Agreement as Agent may require as follows: (i) confirmation that there has been no change to any Borrower's formation documents, bylaws, limited liability company agreement or operating agreement since October 26, 2015; (ii) confirmation that each Borrower has taken such corporate or limited liability company action as may be necessary to authorize the execution, delivery and performance of the documents to which it is a party; and (iii) confirmation that each person signing on behalf of each Borrower has been duly authorized to do so;

 

(c)     No Default. No Default or Event of Default shall exist as of the date hereof;

 

(d)     Representations and Warranties. The representations and warranties of each Obligor in the Loan Documents shall be true and correct in all material respects as of the date hereof; and 

 

(e)     No Material Adverse Effect. No event shall have occurred or circumstances exist that has or could reasonably be expected to have a Material Adverse Effect.

 

5.     Reimbursement for Expenses. Borrowers shall promptly reimburse the Agent for all expenses incurred by the Agent in connection with this Amendment, including out-of-pocket expenses and reasonable attorneys’ fees.

 

 

- 4 -

 

 

6.     Representations and Warranties. Each Borrower represents and warrants to Lender and Agent as follows:

 

(a)     Representations and Warranties. After giving effect to this Amendment, all representations and warranties made in or in connection with the Loan Agreement as amended by this Amendment or any Loan Document related thereto are true, correct and accurate as of the date of this Amendment, as if made on the date of this Amendment (except to the extent any such representation or warranty is expressly stated to have been made as of a specific date, in which case such representation or warranty shall be true, correct and accurate as of such date).

 

(b)     Corporate Authority; Conflict. The execution, delivery and performance of this Amendment are within its corporate or limited liability company powers, have been duly authorized by all necessary action, and require no action by or in respect of, or filing with, any governmental body, agency or official, and the execution, delivery and performance by it do not contravene, or constitute a default under, any provision of applicable law or regulations or of its charter documents or any material agreement, judgment, injunction, order, decree or other instrument binding upon it.

 

(c)     Enforceability. This Amendment constitutes its valid and binding obligations, enforceable against it in accordance with its terms, except as enforceability may be subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors' remedies, and to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).

 

(d)     No Event of Default. After giving effect to this Amendment, no Default or Event of Default has occurred and is continuing as of the date of this Amendment.

 

(e)     Possible Claims and Defenses. No Borrower has claims or defenses against any Person that would or might affect (i) the enforceability of any provisions of the Loan Agreement, as modified by this Amendment (collectively, the “Amended Loan Agreement”), or (ii) the collectability of sums advanced by the Lenders pursuant to the Loan Agreement or the Amended Loan Agreement.

 

(f)     Litigation. There is no action, suit, investigation, litigation or proceeding affecting any Borrower pending or, to such Borrower’s knowledge, threatened before any court, governmental agency or arbitrator that purports to affect the legality, validity or enforceability of any Loan Document or the other transactions contemplated by the Loan Documents.

 

(g)     Certain Governmental Regulations. Each Borrower is exempt from registration as an “investment company”, or an “affiliated person” of, or “promoter” or “principal underwriter” for, an “investment company”; as such terms are defined in the Investment Company Act of 1940, as amended. 

 

(h)     Compliance with Laws. Each Borrower and the transactions contemplated by the Loan Documents comply with the requirements of all laws (including, without limitation, the Securities Act and the Securities Exchange Act of 1934, as amended, and the applicable rules and regulations thereunder, state securities law and “Blue Sky” laws and ERISA) applicable to it and its business.

 

 

- 5 -

 

 

(i)     No Defense; No Setoff. No Borrower has a defense, claim or setoff, legal or equitable, to the full payment and performance of the obligations to Agent or Lender under the Loan Documents as herein modified. 

 

7.     Waiver of Claims. Each Borrower does hereby release and discharge Agent, Lender, Issuing Bank and their respective successors, assigns, Affiliates, officers, directors, employees, representatives and advisors (collectively, the “Released Parties”) from all claims, demands, actions, causes of action, accounts, proceedings, suits, contracts, controversies, debts, liabilities, covenants, agreements, promises, sums of money and demands of any kind or nature whatsoever, in law or in equity, that such Borrower at any time had or may have or that its respective successors and assigns may have against any Released Party by reason of the Obligations, the Loan Agreement or the Loan Documents or of any act, cause, matter or thing whatsoever relating thereto up to and including the date hereof.

 

8.     General Terms.

 

(a)     This Amendment constitutes the entire agreement by and between Borrowers and Agent and Lender with respect to the modification of the Loan Agreement.

 

(b)     Except as expressly modified herein, the existing terms and conditions of all documents evidencing or securing the Loan Agreement are unchanged and are hereby expressly ratified by the undersigned.

 

(c)     This Amendment is a continuing obligation and shall be binding upon the parties hereto, and their respective successors, transferees and assigns, and shall inure to the benefit of and be enforceable by the parties hereto and their respective successors, transferees and assigns, provided however, notwithstanding any other provision to the contrary herein, neither party shall have the right to assign or otherwise transfer any of its rights, duties or obligations under this Amendment to any other person or entity without the prior written consent of the other party and any such assignment or transfer without such consent shall be deemed void and without any force or effect.

 

(d)     Any provision of this Amendment 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 or affecting the validity or enforceability of such provisions in any other jurisdiction.

 

(e)     No approval, waiver or consent under this Amendment shall be effective unless it is in writing and signed by the party making such approval, waiver or consent. Each approval, waiver or consent shall be effective only in the specific instance and for the specific purpose for which it was given.

 

(f)     Neither this Amendment nor any provisions hereof may be waived, modified, amended, discharged or terminated except by an instrument in writing signed by the party against whom the enforcement of such waiver, modification, amendment, discharge or termination is sought, and then only to the extent set forth in such instrument. 

 

 

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(g)     The Recitals to this Amendment are hereby incorporated herein by reference.

 

(h)     No provision of this Amendment is made or is to be construed for the benefit of any third party.

 

(i)     This Amendment may be executed in one or more counterparts, each of which will constitute an original, and all of which together will constitute a single original.

 

(j)     Any default by any Borrower under this Amendment shall constitute a default under the Loan Documents, and each of them, and any default by any Borrower under any Loan Document shall constitute a default under this Amendment.

 

(k)     Notwithstanding anything otherwise to the contrary in the Loan Agreement, this Amendment and the Loan Agreement shall be construed and enforced under the laws of the State of New York. In any action or proceeding to construe or enforce this Amendment or any of the Loan Documents, the prevailing party shall recover its costs and reasonable attorneys' fees including those incurred in any trial or arbitration proceeding, in any bankruptcy or receivership proceeding, and in any appeal therefrom.

 

 

[signatures appear on the following page(s)]

 

 

- 7 -

 

 

IN WITNESS WHEREOF, this Agreement has been executed and delivered as of the date set forth above.

 

	  	
BORROWERS:

	 	 
	 	
NORTHWEST PIPE COMPANY,

an Oregon corporation

	 	 
	 	 	 	 
	 	
By:
	 	 
	 	Printed Name: Robin Gantt
Title: Chief Financial Officer 
	 	 
	 	Address:
	 	
5721 SE Columbia Way
Suite 200
Vancouver, WA 98661-5991

Attn: Robin Gantt, Chief Financial Officer 

Facsimile: (360) 397-6257

 

 

  

	 	
PERMALOK CORPORATION,

	 	
a Missouri corporation

	 	 	 	 
	 	 	 	 
	 	
By:
	 	 
	 	Printed Name: Scott Montross 
Title: President 
	 	 
	 	Address:
	 	
5721 SE Columbia Way
Suite 200
Vancouver, WA 98661-5991

Attn: Scott Montross, President 
Facsimile: (360) 397-6257

 

 

Signature Page to Amendment Number One to Loan and Security Agreement

 

 

 

 

 

 
	  	
AGENT AND LENDERS:

	 	 
	 	
BANK OF AMERICA, N.A.,

as Agent and Lender

	 	 
	 	 	 	 
	 	
By:
	 	 
	 	
 
	
Gregory A. Jones

Senior Vice President
	 
	 	 
	 	Address:
	 	
400 4th Street
Mailcode: OR1-110-01-15
Lake Oswego, OR 97034
Attn: Gregory A. Jones
Facsimile: (503) 303-6076

 

 

Signature Page to Amendment Number One to Loan and Security Agreement

  

 

 

 

 

CONSENT OF GUARANTOR

 

THOMPSON TANK HOLDINGS, INC., an Oregon corporation, hereby consents to the foregoing Amendment Number One to Loan and Security Agreement and acknowledges and agrees that the Guarantied Obligations as defined in that certain General Continuing Guaranty dated as of October 26, 2015 by Guarantor include all Obligations now or hereafter arising under any Loan Document, as amended from time to time, including, without limitation, the Loan Agreement (which is referred to as the Credit Agreement within the General Continuing Guaranty) as amended by the foregoing Amendment Number One to Loan and Security Agreement. This consent from Guarantor is obtained out an abundance of caution only and is not required for either Amendment Number One to Loan and Security Agreement or any subsequent amendments to the Loan Documents.

 

	
 
	
THOMPSON TANK HOLDINGS, INC., an
Oregon corporation  

	
 
	
 
	
 

	
 
	
 
	
 

	
 
	
By:
	
 

	
 
	
 
	
Scott Montross, President 

 

 

Consent of Guarantor Signature Page to Amendment Number One to Loan and Security Agreement

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