Item 1.01. Entry into a Material Definitive Agreement.
The Purchase Agreement
On September 14, 2017, New York REIT, Inc.
(the “Company”), through a wholly owned subsidiary (the “Seller”), entered into a Membership Interest Purchase
Agreement (the “Purchase Agreement”) with WWP JV LLC (the “Purchaser”), pursuant to which the Purchaser
agreed to purchase 48.7% of the membership interests (the “Acquired Interests”) in WWP Holdings, LLC (“WWP”)
from the Seller, the indirect owner of the Worldwide Plaza property (the “Property”), a mixed use building located
on Eighth Avenue between 49th and 50th Streets in Manhattan containing approximately 2.05 million rentable square feet, including
approximately 1.8 million rentable square feet of office space.
The Purchaser is a joint venture between
SL Green Realty Corp. (“SLG”) and a private equity fund sponsored by RXR Realty LLC (“RXR”). Following
the closing of the acquisition of the Acquired Interests (the “Closing”), the Seller would own 50.1% of the membership
interests in WWP, the Purchaser would own 48.7% of the membership interests in WWP and WWP Sponsor, LLC, a legacy owner of WWP
(the “Comfort Member”) would continue to own the 1.2% of the membership interests in WWP it currently owns.
The description of the Purchase Agreement,
as well as certain agreements that are exhibits thereto, in this Current Report on Form 8-K is a summary and is qualified in its
entirety by the complete terms of the Purchase Agreement (including certain exhibits thereto), a copy of which is attached as Exhibit
10.1 to this Current Report on Form 8-K and incorporated by reference herein.
Purchase Price
The purchase price of the Acquired Interests
is expected to be approximately $255.7 million, representing the product of (i) $1.725 billion (the agreed-to value of the Property)
minus
the outstanding principal amount of any Qualified Financing (as defined below), which is expected to be $1.2 billion,
multiplied
by (ii) 48.7%, subject to certain customary real estate prorations which survive for 12 months and certain customary
adjustments. In connection with the execution of the Purchase Agreement, the Purchaser deposited a $50.0 million down payment (the
“Down Payment”) into escrow with a title company, which will be credited against the purchase price if the Closing
occurs and may be retained by the Seller if the Closing does not occur for certain reasons described in more detail below.
Proceeds of a Qualified Financing, and
cash from the release of the loan reserves held under the mortgage and mezzanine loans currently encumbering the Property which
have an outstanding principal balance of $875.0 million (the “Existing Loans”) in excess of the amounts required to
be paid to defease the Existing Loans will be distributed pro rata to the Seller and the Comfort Member immediately prior to Closing.
Qualified Financing
The Purchaser has agreed to use commercially
reasonable efforts to arrange for one or more new mortgage and/or mezzanine loan financings meeting, among other things, certain
principal amount and term qualifications (a “Qualified Financing”), the proceeds from which would be used to effectuate
the defeasance of the Existing Loans and pay all related fees, costs and expenses and certain costs and expenses related to the
closing of the Qualified Financing. The amount required to be paid to defease the Existing Loans is estimated, based on current
interest rates, to be $116.5 million if defeased on or before November 3, 2017, the date the Closing is scheduled to occur, subject
to certain adjournment rights described in more detail below. As of the date hereof, the Purchaser has received a term sheet from
an institutional lender for a potential Qualified Financing with aggregate mortgage and potential mezzanine indebtedness of approximately
$1.2 billion.
Closing and Termination
The Closing is scheduled to occur on or
before November 3, 2017, subject to the waiver and satisfaction of various closing conditions and the Purchaser’s right to
adjourn such Closing by up to 90 days, subject to the terms of the Purchase Agreement. The Seller also has the right to adjourn
the Closing under certain circumstances. The Purchase Agreement may be terminated by the mutual written consent of Seller and Purchaser
or by either party if the Closing does not occur by February 2, 2018.
The Seller’s obligation to close
is subject to satisfaction of, among other conditions, the defeasance of the Existing Loans and the consummation of a Qualified
Financing. The Purchaser’s obligation to close is subject to satisfaction of, among other conditions, receipt of certain
tenant estoppels and the satisfaction of the conditions to the defeasance of the Existing Loans (other than solely on account of
Purchaser’s failure to consummate a Qualified Financing).
If the Purchaser is unable to timely satisfy
the conditions to the Seller’s obligations to close as a result of a default by the Purchaser under the Purchase Agreement,
the Purchase Agreement may be terminated by either party. The Seller retains the Deposit if the transactions contemplated by the
Purchase Agreement are not completed because the Purchaser defaults in its obligation to consummate the transactions contemplated
by the Purchase Agreement. The Seller also retains the Deposit if the transactions contemplated by the Purchase Agreement are not
completed because a Qualified Financing cannot be obtained, other than as a result of a default by the Seller under the Purchase
Agreement.
The Consent Agreement
On September 14, 2017, the Seller and the
Comfort Member entered into a consent agreement (the “Consent Agreement”), pursuant to which the Comfort Member has
agreed to consent to the admission of the Purchaser as a member of WWP and the amendment and restatement of the limited liability
company agreement of WWP in an agreed form (as so amended and restated, the “LLC Agreement”).
The description of the Consent Agreement
in this Current Report on Form 8-K is a summary and is qualified in its entirety by the complete terms of the Consent Agreement,
a copy of which is attached as Exhibit 10.2 to this Current Report on Form 8-K and incorporated by reference herein.
The WWP LLC Agreement
Management of WWP
Under the LLC Agreement, the Purchaser
will be the administrative member and will have the authority to operate WWP in accordance with the annual business plan and annual
budget, except for certain major decisions which must be approved by the board of managers of WWP (the "Board of Managers"),
including at least one manager appointed by Seller (provided, however, that certain Operational Major Decisions (as defined in
the LLC Agreement) may be approved with the consent of Seller and Purchaser. The Comfort Member will not have any representation
on the Board of Managers and will only have rights as a member of WWP with respect to certain limited items.
Pursuant to the LLC Agreement, if a Key
Person Event (as defined in the LLC Agreement) occurs and is not cured, the Seller will lose consent rights relating to property-level
major decisions, including approval of the annual budget. A Key Person Event would occur if Wendy Silverstein (or her replacement)
is not actively involved in the performance of her duties on behalf of the Seller. A Key Person Event can be cured if a replacement
is appointed with the consent of the Purchaser within 90 days of occurrence of the applicable Key Person Event.
Capital Contributions
As more fully described in the LLC Agreement,
each of the Purchaser and the Seller (but not the Comfort Member) will be required to contribute its pro rata share of the capital
required in accordance with the initial budget and business plan and in connection therewith the Seller has agreed to reserve amounts
needed to satisfy these capital requirements. If the Seller fails to contribute its share of the initial budget and business plan,
it will lose consent rights relating to property-level major decisions, including approval of the annual budget.
Transfer of Membership Interests
Membership interests in WWP held by the
Purchaser or the Seller may not, directly or indirectly, be transferred or sold without consent of the other member, subject to
certain conditions and exceptions, including an indirect transfer of not more than 49% of the member’s membership interest,
provided that the transferee has no right to participate in the management or operations of WWP or any decision or consent rights
exercisable by the transferor, and that the Seller may sell its membership interest, in whole but not in part, subject to the Purchaser’s
right of first offer.
The Comfort Member will have a right to
require WWP to repurchase the Comfort Member’s 1.2% membership interests at fair market value, subject to the terms of, and
as further set forth in, the LLC Agreement. If this right is exercised, the Purchaser will contribute the capital required to fund
the repurchase and its membership interests in WWP would increase by the amount of the membership interests repurchased. The Comfort
Member does not otherwise have the right to directly or indirectly transfer its membership interests without the consent of the
Seller and the Purchaser (subject to certain exceptions for indirect transfers).
Forced Sale
In accordance with procedures as more fully
described in the LLC Agreement, on the 51 month anniversary of the Closing (subject to extension to the 60 month anniversary by
the Seller upon notice to the Purchaser given no later than the 48 month anniversary of Closing), either the Seller or the Purchaser
may elect to cause WWP to market and sell the Property.
Certain Distributions
Prior to distributions to the Seller, the
Purchaser will be entitled to distributions from WWP with respect to, among other things, certain transfer taxes with respect to
which the Seller agreed to indemnify the Purchaser and certain other amounts due arising out of the Purchase Agreement.
Plan of Liquidation Amendment
The Company’s plan of liquidation,
which provides that, as part of liquidating the Company, the Company could take actions to preserve the value of the Company’s
assets, was amended (the “Plan of Liquidation Amendment”), as permitted under the plan of liquidation approved by the
shareholders, to clarify that the Company can consummate the transactions contemplated by the Purchase Agreement which are designed
to preserve the value of WWP through this transaction. In reaching this conclusion, the Company’s board of directors consulted
with its independent counsel and received advice from management and independent financial advisors on the transaction.
The description of the Plan of Liquidation
Amendment in this Current Report on Form 8-K is a summary and is qualified in its entirety by the complete terms of Plan of Liquidation
Amendment, a copy of which is attached as Exhibit 2.1 to this Current Report on Form 8-K and incorporated by reference herein.
The Property Management and Leasing
Agent
Following the Closing, an affiliate of
SLG and/or RXR will serve as the exclusive property manager and leasing agent for the Property pursuant to a property management
and leasing agreement and will be obligated to assist the Purchaser in the preparation of the annual business plan.