Contract analysis

I. PURPOSE AND SCOPE OF MEMORANDUM This memorandum has been prepared by Calderwood & Harkness LLP ("C&H" or the "Firm") for the exclusive internal use of Metropolitan Transit Development Corp. ("MTDC") and its authorized officers and counsel. The purpose of this memorandum is to consolidate and summarize all conditions precedent to the closing of the two-tranche financing for the Hudson Yards West mixed-use developme

II. EXECUTIVE SUMMARY — STATUS OVERVIEW Set forth below is a high-level summary of the categories of conditions precedent to the closing of the Financing, together with the current status of each category as of June 1, 2025, and the party or parties primarily responsible for satisfaction of each condition. This summary is intended to provide MTDC's management team with a dashboard-level overview; the detailed analysi

III. CONDITIONS PRECEDENT TO CLOSING — SENIOR MORTGAGE LOAN The following conditions precedent must be satisfied (or waived by Ironclad in its sole discretion) on or before the Closing Date in order for the Senior Lenders to fund the Senior Mortgage Loan. These conditions are set forth primarily in Article V of the Senior Mortgage Loan Agreement and in the Clearfield closing checklist. Unless otherwise noted, all ref

1. Formation of HYW Mortgage LLC. The Mortgage Borrower is to be organized as "Hudson Yards West Mortgage LLC," a Delaware limited liability company formed for the sole purpose of owning the leasehold interest in the Project Site, entering into the Senior Mortgage Loan, and engaging in activities incidental thereto. A Certificate of Formation must be filed with the Delaware Secretary of State in accordance with the D

2. Operating Agreement of HYW Mortgage LLC. The Mortgage Borrower's limited liability company agreement (the "Mortgage Borrower Operating Agreement") must be delivered in form and substance satisfactory to Ironclad and Clearfield. Pursuant to Section 5.1(b)(ii) of the Loan Agreement, the Mortgage Borrower Operating Agreement must contain the following single-purpose entity ("SPE") covenants and provisions: (a) The Mo

3. Certificate of Good Standing — Delaware. The Mortgage Borrower must deliver to Ironclad a certificate of good standing (or certificate of status) issued by the Delaware Secretary of State, dated not more than ten (10) days prior to the Closing Date. Given the target Closing Date of June 15, 2025, the good standing certificate must be dated no earlier than June 5, 2025. C&H will order the good standing certificate

4. Qualification to Do Business in New York. HYW Mortgage LLC must be qualified (or authorized) to transact business in the State of New York by filing an Application for Authority with the New York Department of State pursuant to Section 802 of the New York Limited Liability Company Law. The application must be accompanied by a certificate of existence issued by the Delaware Secretary of State (which may be the same

5. MTDC Organizational Documents. As the indirect owner and control party of the Mortgage Borrower, and as the proposed guarantor under the Guaranty Agreement and Completion Guaranty, MTDC must deliver to Ironclad the following organizational documents: (a) Certified copies of MTDC's enabling or authorizing legislation, as enacted by the Illinois General Assembly, together with all amendments thereto, confirming MTDC

6. Incumbency Certificate. MTDC must deliver an incumbency certificate identifying the officers of MTDC authorized to execute the Loan Documents on behalf of MTDC, the Mortgage Borrower, and (to the extent applicable) the Mezzanine Borrower. The authorized officers to be named in the incumbency certificate are as follows: David Harrington (Executive Director), Priya Subramanian (Chief Financial Officer), Marcus Jenni

7. Non-Consolidation Opinion. C&H, as borrower's counsel, is required to deliver a non-consolidation opinion letter addressed to Ironclad and the Senior Lenders, confirming that, based on certain assumptions and subject to certain qualifications and limitations, a court exercising competent jurisdiction would not, in a properly presented and argued case, substantively consolidate the assets and liabilities of HYW Mor

1. ALTA Title Insurance Commitment. Ironclad requires delivery of an ALTA 2006 owner's and lender's title insurance commitment (Commitment No. STN-2025-MH-04178) issued by Sentinel Title & Escrow Company ("Sentinel Title") (Patricia Eng, Closing Officer), in the amount of $475,000,000, insuring Ironclad (as Agent for the Senior Lenders) that a valid first-priority leasehold mortgage lien will be placed upon the Proje

2. Title Search and Review of Schedule B Exceptions. The underlying title search was ordered by Sentinel Title on March 15, 2025, and the preliminary title commitment was received by C&H on or about April 5, 2025. C&H has been reviewing the Schedule B exceptions to the title commitment and is engaged in ongoing discussions with Clearfield regarding which exceptions are acceptable as "Permitted Exceptions" under the L

3. Required Title Endorsements. In addition to the base ALTA lender's title insurance policy, Ironclad requires the following endorsements to be issued as part of the final title policy: (a) ALTA 9-06 (Restrictions, Encroachments, Minerals) — insuring against loss arising from the existence of certain covenants, conditions, and restrictions, encroachments, and mineral reservations affecting the Project Site; (b) ALTA

4. ALTA/NSPS Land Title Survey. Ironclad requires delivery of a current ALTA/NSPS Land Title Survey of the Project Site, prepared by a licensed surveyor in the State of New York, dated not more than ninety (90) days prior to the Closing Date, and certified to Ironclad National Bank, N.A., Sentinel Title & Escrow Company, and Hudson Yards West Mortgage LLC. The survey must comply with the 2021 Minimum Standard Detail

5. Resolution of Title Exceptions; Payoff or Subordination of Existing Liens. All title exceptions that are not acceptable to Ironclad as "Permitted Exceptions" must be removed, cured, or insured over prior to the Closing Date. As of the date hereof, there are no known existing monetary liens on the leasehold interest in the Project Site (other than the lien of real property taxes, which are current). C&H has confirm

1. Zoning Opinion Letter. A zoning opinion letter dated April 15, 2025 (the "Zoning Opinion"), has been delivered by Hargrove & Linden, P.C. ("Hargrove & Linden"), through Raymond Cho, Esq., a partner at that firm specializing in New York City zoning and land use. The Zoning Opinion confirms that the proposed improvements to be constructed on the Project Site are permitted either as-of-right or pursuant to the Unifor

2. Evidence of ULURP Approval. The Project required ULURP approval for certain zoning actions, including a special permit and a zoning map amendment. The ULURP process was completed as follows: (a) The New York City Planning Commission ("CPC") approved the ULURP application on September 12, 2023 (Application No. C 230415 ZSM), following a public hearing and the recommendation of Manhattan Community Board 4. (b) The N

3. Satisfaction of ULURP Conditions. As noted above, the CPC and City Council approvals were granted subject to certain conditions, including conditions related to affordable housing set-aside commitments, public plaza and streetscape improvements, and certain design modifications. MTDC (through Connor McBride and the Project team) has confirmed that all conditions of the ULURP approval that must be satisfied prior t

4. Building Permits and NYC Department of Buildings Approvals. The commencement of construction on the Project Site requires the issuance of all applicable building permits, demolition permits (to the extent demolition of any existing improvements is required), and other approvals from the New York City Department of Buildings ("DOB"). MTDC filed the building permit application with the DOB prior to the date hereof,

5. NYCEDC Consent to Leasehold Mortgage. The Ground Lease between NYCEDC and MTDC requires the prior written consent of NYCEDC to any mortgage or encumbrance placed upon the leasehold interest. Accordingly, MTDC must obtain and deliver to Ironclad a consent letter from NYCEDC (or its designee) approving the execution and recording of the Leasehold Mortgage in favor of Ironclad (as Agent for the Senior Lenders). The c

6. No Pending Condemnation or Governmental Proceedings. MTDC must deliver a certificate confirming that, to the best of its knowledge after due inquiry, there is no pending or, to the best of MTDC's knowledge, threatened condemnation, eminent domain, or other governmental proceeding that would adversely affect the Project Site or any portion thereof. C&H will prepare this certificate for execution by an authorized of

7. SEQRA/CEQR Compliance. To the extent that any action in connection with the Project required environmental review under the New York State Environmental Quality Review Act ("SEQRA") or the City Environmental Quality Review ("CEQR") process, MTDC must deliver evidence that all applicable SEQRA/CEQR requirements have been satisfied. The ULURP application was subject to CEQR review, and a Negative Declaration was iss

1. Phase I Environmental Site Assessment. A Phase I Environmental Site Assessment ("Phase I ESA") was prepared by Apex Environmental Consultants, Inc. ("Apex Environmental") (Dr. Lena Kaur, Project Manager), bearing Project No. AEC-NY-25-0337 and dated March 20, 2025. The Phase I ESA was prepared in conformance with ASTM Standard E1527-21, Standard Practice for Environmental Site Assessments: Phase I Environmental Si

2. No Phase II ESA Required. Based on the findings of the Phase I ESA, which identified no RECs, no Phase II Environmental Site Assessment (subsurface investigation) is required. Ironclad has not indicated that it will require a Phase II ESA, and Clearfield has confirmed that the Phase I ESA is satisfactory to Ironclad in form and substance, subject to the delivery of the reliance letter.

3. Environmental Indemnity Agreement. HYW Mortgage LLC and MTDC (as guarantor) must execute and deliver at closing an Environmental Indemnity Agreement in favor of Ironclad (as Agent for the Senior Lenders), pursuant to which HYW Mortgage LLC and MTDC shall jointly and severally indemnify, defend, and hold harmless Ironclad and the Senior Lenders from and against any and all losses, liabilities, damages, costs, and e

4. NYC DEP Compliance. If required by Ironclad, MTDC shall deliver a compliance letter or confirmation from the New York City Department of Environmental Protection ("DEP") confirming that the Project Site is in compliance with all applicable DEP regulations, including regulations relating to stormwater management, sewer connections, and hazardous materials storage. As of the date hereof, Ironclad has not indicated t

1. Appraisal Report. An appraisal report has been prepared by Broadstreet Appraisal Group, Inc. ("Broadstreet") (Marcus Tolliver, MAI, Senior Appraiser), bearing File No. BAG-25-1092 and dated April 1, 2025 (the "Appraisal"). The Appraisal is addressed to Ironclad National Bank, N.A. and the Senior Lenders and provides an opinion of the as-stabilized fair market value of the Project in the amount of One Billion Twent

2. FIRREA and USPAP Compliance. The Appraisal complies with the requirements of FIRREA and USPAP, as confirmed by the appraiser's certification included in the Appraisal report. The Appraisal also complies with the Interagency Appraisal and Evaluation Guidelines issued by the federal banking regulatory agencies. Marcus Tolliver, the primary appraiser, is a certified general real estate appraiser licensed in the State

3. Loan-to-Value Ratios. Based on the appraised value of $1,025,000,000, the loan-to-value ratios at closing are as follows: (a) Senior LTV: $475,000,000 ÷ $1,025,000,000 = 46.34% (b) Combined LTV (Senior + Mezzanine): $675,000,000 ÷ $1,025,000,000 = 65.85% Both the Senior LTV and the Combined LTV are within the maximum Combined LTV covenant of 70.0% as set forth in Section 8.3(b) of the Senior Mortgage Loan Agreemen

4. Bring-Down or Update Letter. If Ironclad determines that the Appraisal requires updating prior to closing (e.g., due to changes in market conditions or the passage of time since the effective date of the Appraisal), Broadstreet has agreed to provide a bring-down or update letter within five (5) business days of any such request by Ironclad. As of the date hereof, Ironclad has not requested a bring-down letter, but

1. Builder's Risk Insurance. Builder's risk insurance (also known as course of construction insurance) must be obtained in an amount not less than Five Hundred Million Dollars ($500,000,000), representing the estimated full replacement cost of the improvements to be constructed on the Project Site. The builder's risk policy must be issued by Fortis Indemnity Insurance Co. ("Fortis"), which is an insurer with an A.M.

2. Commercial General Liability Insurance. Commercial general liability ("CGL") insurance must be obtained with minimum limits of $25,000,000 per occurrence and $50,000,000 in the aggregate, as required by Section 6.4(b) of the Loan Agreement. Ironclad must be named as an additional insured on the CGL policy. The CGL policy has been placed through Castleton and a binder has been received. Evidence of the final policy

3. Workers' Compensation and Employer's Liability Insurance. Workers' compensation insurance must be obtained in statutory limits as required by the New York Workers' Compensation Law, together with employer's liability insurance in amounts not less than $1,000,000 per accident / $1,000,000 per disease / $1,000,000 policy limit (or such higher limits as required by the Loan Agreement). This obligation applies both to

4. Flood Insurance. If the Project Site is determined to be located within a Federal Emergency Management Agency ("FEMA") Special Flood Hazard Area ("SFHA"), flood insurance must be obtained in the maximum amount available under the National Flood Insurance Program ("NFIP") or from a private insurer, as required by the Flood Disaster Protection Act of 1973 and the Loan Agreement. A FEMA flood zone determination has b

5. Terrorism/TRIA Coverage. Ironclad requires terrorism insurance coverage as defined in the Terrorism Risk Insurance Act of 2002 ("TRIA"), as amended and reauthorized. Terrorism coverage must be included in the builder's risk and property insurance policies and must provide coverage for "certified acts of terrorism" as defined under TRIA. Castleton has confirmed that terrorism coverage is included in the Fortis buil

6. ACORD Certificates and Evidence of Premium Payment. At closing, MTDC and HYW Mortgage LLC must deliver ACORD 25 (certificate of liability insurance), ACORD 28 (evidence of commercial property insurance), and ACORD 27 (evidence of property insurance) certificates for all required policies, together with all required endorsements (including additional insured endorsements, mortgagee endorsements, and waiver of subro

7. Insurance Consultant's Letter. Ironclad has requested that Castleton, as the insurance broker for the Project, deliver a broker's letter or insurance consultant's confirmation addressed to Ironclad and Granite Peak, confirming that all insurance policies obtained for the Project satisfy the minimum requirements of both the Senior Mortgage Loan Agreement and the Mezzanine Loan Agreement. Castleton (Jessup) has agre

1. Guaranteed Maximum Price (GMP) Construction Contract. An executed Guaranteed Maximum Price construction contract (Contract No. CCG-HYW-2025-001) must be delivered between HYW Mortgage LLC (as owner) and Cobalt Construction Group, Inc. ("Cobalt") (Frank DelVecchio, Chief Executive Officer), in the maximum amount of Four Hundred Twelve Million Dollars ($412,000,000) (the "GMP Contract"). The GMP Contract must be in

2. Assignment of GMP Contract. Ironclad requires a collateral assignment of the GMP Contract (the "Collateral Assignment of Construction Contract") as additional security for the Senior Mortgage Loan. The Collateral Assignment of Construction Contract must be executed by HYW Mortgage LLC and consented to by Cobalt. A Consent and Agreement of Contractor must be executed by Cobalt (through an authorized officer), confi

3. Construction Budget and Schedule. MTDC must deliver to Ironclad a detailed construction budget and construction schedule, approved by the MTDC Project team and by Ironclad's construction consultant (if applicable). The construction schedule must reflect the following key milestones: (a) Construction commencement: June 15, 2025 (the Closing Date); (b) Substantial completion: December 15, 2027 (approximately 30 mont

4. Property Condition Assessment / Structural Report. A property condition assessment and structural adequacy report has been prepared by Trident Structural Engineers, P.C. ("Trident") (Dr. Rajesh Banerjee, PE, Principal Engineer), confirming the structural adequacy of existing foundations (if any) and the suitability of site conditions for the proposed construction. The Trident report addresses geotechnical conditio

5. Payment and Performance Bonds or Alternative Security. The Loan Agreement contemplates that Cobalt will provide either (a) payment and performance bonds from a surety company acceptable to Ironclad, covering the full amount of the GMP Contract, or (b) alternative security acceptable to Ironclad in lieu of bonds, which may include a combination of construction reserve and retainage provisions in the Loan Agreement

6. Construction Consultant's Report. If required by Ironclad, an independent construction consultant must deliver a feasibility report confirming the adequacy of the construction budget, the reasonableness of the construction schedule, and the overall feasibility of the proposed construction. Ironclad has retained Apex Project Advisors, Inc. as its construction consultant, and the feasibility report is expected to be

7. Contractor and Subcontractor Insurance. Cobalt and all subcontractors must maintain insurance coverage as required by the GMP Contract and the Loan Agreement, including commercial general liability, workers' compensation, employer's liability, automobile liability, umbrella/excess liability, and professional liability (for design professionals). ACORD certificates for all required contractor and subcontractor insu

8. Architect's Certificate and Plans and Specifications. The architect of record for the Project (to be identified in the final GMP Contract) must deliver an architect's certificate confirming that the plans and specifications for the Project have been completed, reviewed, and approved by the architect, MTDC, and the DOB (to the extent reflected in the building permit application). A complete set of plans and specifi

1. Establishment of Accounts. The Mortgage Borrower must establish all accounts required by the Senior Mortgage Loan Agreement at Ironclad (or at another eligible institution approved by Ironclad). The required accounts are as follows: (a) Operating Account — for the receipt and disbursement of operating revenues and expenses; (b) Interest Reserve Account — to fund estimated interest payments during the construction

2. Pre-Funding of Interest Reserve. The interest reserve must be pre-funded at closing in an amount sufficient to cover estimated interest payments on the Senior Mortgage Loan during the construction period, which is projected to be approximately thirty (30) months (from June 15, 2025, to December 15, 2027). Interest on the Senior Mortgage Loan is calculated at a floating rate equal to Term SOFR (as determined in acc

3. Pre-Funding of Construction Contingency Reserve. The Loan Agreement requires the maintenance of a construction contingency reserve in an amount to be determined based on the approved construction budget and the recommendations of Ironclad's construction consultant. The contingency reserve is intended to cover cost overruns, change orders, and other unanticipated construction expenses. The amount of the contingency

4. Financial Covenants at Closing. The Loan Agreement contains certain financial covenants that will be tested on a periodic basis following the completion of construction and the stabilization of the Project. At closing, the Mortgage Borrower must confirm that the financing satisfies the following financial covenant thresholds on a pro forma basis: (a) Combined DSCR Covenant: Minimum 1.20x on a trailing twelve-month

5. Credit Rating of MTDC. Ironclad requires confirmation that the credit rating of MTDC assigned by the Pinnacle Ratings Group (the "Credit Rating") has not been downgraded, withdrawn, or placed on negative watch since the date of the commitment letter. The current Credit Rating is A– (Identifier PRG-MTDC-A-2024-1187), which was assigned on August 15, 2024. C&H has confirmed with Pinnacle Ratings Group that the Credi

I. Opinions of Counsel and Third-Party Reports The following legal opinions and third-party reports must be delivered at or prior to the Closing Date:

1. Borrower's Counsel Opinion Letter. C&H, as borrower's counsel, must deliver an opinion letter addressed to Ironclad and the Senior Lenders covering the following matters: (a) Due Authorization and Enforceability. That the Mortgage Borrower has been duly formed and is validly existing as a limited liability company under the laws of the State of Delaware; that the execution, delivery, and performance of the Loan Do

2. Zoning Opinion — Bring-Down or Reliance Letter. As described in Section III.C.1 above, the Zoning Opinion was delivered by Hargrove & Linden on April 15, 2025. A bring-down or reliance letter must be issued by Hargrove & Linden at closing, confirming that the conclusions expressed in the Zoning Opinion remain unchanged as of the Closing Date and that Ironclad and the Senior Lenders are entitled to rely thereon. C&

3. Tax Opinion. Sylvia Hartwell (Partner, Tax, Calderwood & Harkness LLP) will prepare a tax opinion or tax memorandum addressing any tax issues arising from MTDC's status as a tax-exempt public-benefit corporation organized under Illinois law and the implications of such status for the SPE borrower structure, including without limitation: (a) whether the income of HYW Mortgage LLC will be subject to federal, state,

4. Local Counsel Opinion. If required by Ironclad, a local counsel opinion may be delivered by a New York-qualified attorney (which may be an C&H attorney admitted in New York) regarding the due formation and qualification of HYW Mortgage LLC in the State of New York, and confirming that the Leasehold Mortgage is in recordable form and that the recording taxes and fees have been properly calculated. C&H is prepared t

5. Audited Financial Statements. The audited consolidated financial statements of MTDC for the fiscal year ended December 31, 2024 ("FY2024"), prepared by Whitfield Albrecht & Co. LLP ("Whitfield Albrecht") (Sandra Okonkwo, CPA, Engagement Partner), have been delivered to Ironclad and Granite Peak. The FY2024 audited financial statements reflect total operating revenue of $1,120,000,000 and net assets of $3,700,000,0

1. MTDC Equity Contribution. MTDC must demonstrate at or prior to closing that it has deposited, or is unconditionally prepared to deposit on the Closing Date, its required equity contribution of Two Hundred Million Dollars ($200,000,000) to the construction disbursement account at Ironclad. The equity contribution represents the difference between the total project cost of $920,000,000 and the sum of total Financing