Contract analysis

I. Introduction We write to advise you that Calderwood & Harkness LLP ("C&H") has substantially completed negotiations of the principal economic and structural terms of the $675,000,000 financing for the Hudson Yards West project (the "Project") on behalf of Metropolitan Transit Development Corp. ("MTDC"). As you know, those negotiations have proceeded on parallel tracks with Ironclad National Bank, N.A. ("Ironclad")

II. Transaction Overview The Project consists of a mixed-use, transit-oriented development to be constructed at 450 West 34th Street, New York, New York 10001, on the tax lots designated as Block 729, Lots 1, 5, 12, and 15 in the Borough of Manhattan (collectively, the "Project Site"). The Project Site is held pursuant to a ground lease from the New York City Economic Development Corporation ("NYCEDC") to MTDC, recor

III. Summary of Senior Mortgage Loan Terms Set forth below is a summary of the principal terms of the senior mortgage construction-to-permanent loan as negotiated to date. A. Loan Amount and Purpose The senior mortgage loan will be in the principal amount of $475,000,000 (the "Senior Loan"). The Senior Loan is structured as a construction-to-permanent facility, meaning that the initial advances will fund construction

I. Title Insurance A lender's title insurance policy will be issued by Sentinel Title & Escrow Company in the form of an ALTA 2006 lender's policy, in the amount of $475,000,000, insuring the first priority lien of the mortgage on the Mortgage Borrower's leasehold interest. The title commitment is identified as Commitment No. STN-2025-MH-04178. We are in the process of reviewing the title commitment and the underlyin

IV. Summary of Mezzanine Loan Terms Set forth below is a summary of the principal terms of the mezzanine loan as negotiated to date. A. Loan Amount The mezzanine loan will be in the principal amount of $200,000,000 (the "Mezzanine Loan"). B. Lender. The lender under the Mezzanine Loan is Granite Peak Capital Partners, LP, a Delaware limited partnership. Granite Peak is an institutional debt fund focused on commercial

V. Guaranty / Recourse Carve-Outs A. Agreed Framework MTDC has agreed in principle to provide a guaranty of customary "bad-boy" (non-recourse carve-out) obligations in favor of both Ironclad (with respect to the Senior Loan) and Granite Peak (with respect to the Mezzanine Loan) (each, a "Guaranty" and collectively, the "Guaranties"). The Guaranties will be direct obligations of MTDC, supported by MTDC's balance sheet

1. Full-Recourse Triggers (Springing Full Recourse to MTDC) These are events that, if they occur, would convert the entire outstanding loan balance (of the applicable loan) to full personal recourse against MTDC under the Guaranty. In other words, upon the occurrence of a full-recourse trigger, MTDC would be liable for repayment of the entire outstanding principal balance, plus accrued interest and any other amounts

2. Loss Carve-Outs (Recourse for Losses) These are events or circumstances in respect of which MTDC would be liable under the Guaranty for the actual losses sustained by the lenders as a result of the specified act or omission, rather than for the full outstanding loan balance. The following loss carve-out events are currently under discussion and are largely settled as consistent with market-standard terms: (i) Frau

3. Cap on Aggregate Exposure Both Ironclad and Granite Peak have proposed that the Guaranties be uncapped — meaning that MTDC's aggregate exposure under the Guaranties would not be subject to any dollar limitation. This is a common lender position, particularly for full-recourse triggers. However, given MTDC's status as a government instrumentality with fiduciary obligations to the public and heightened public accoun

VI. Additional Open Client Decisions In addition to the guaranty scope issues discussed in Section V, the following open items require MTDC's direction. A. Insurance Coverage Levels

1. Current Requirement. Under the Senior Term Sheet, Ironclad requires the Mortgage Borrower to maintain builder's risk insurance at full replacement cost during the construction period. Castleton Insurance Brokerage ("Castleton") (Brian Jessup, lead broker) has procured builder's risk coverage through Fortis Indemnity Insurance Co. in the amount of $500,000,000, which exceeds the lender's minimum requirement and pro

2. Open Item. Ironclad's draft insurance schedule, which was circulated on April 22, 2025, also requires the following coverages: (a) Commercial General Liability ("CGL") Insurance: Minimum limits of $50,000,000 per occurrence and $100,000,000 aggregate, including products/completed operations coverage, contractual liability, and broad form property damage; (b) Terrorism / TRIA Coverage: Coverage under the Terrorism

1. Senior Loan Extensions. As discussed in Section III.E above, the Senior Loan will include two one-year extension options. The Senior Term Sheet provides for an extension fee to be paid in connection with the exercise of each option, but the amount of the fee has not been finally agreed. Ironclad's current position is an extension fee of 0.25% of the then-outstanding principal balance for each extension period. Ass

2. Mezzanine Loan Extensions. The Mezzanine Term Sheet is silent on extension fees. However, in informal discussions during the April 28, 2025 negotiation session, Granite Peak indicated that it may seek an extension fee of 0.50% of the then-outstanding principal balance for any extension of the Mezzanine Loan. We note that the Mezzanine Loan maturity is co-terminus with the Senior Loan, and that the extension of the

VII. Other Negotiated Terms of Note (For Information) For MTDC's awareness, we provide below a brief summary of other material terms that are settled or substantially agreed and that do not require MTDC direction at this time. We include these items so that MTDC has a complete picture of the current state of the negotiation. Construction Milestones. Substantial completion of the Project is projected for December 15,

VIII. Requested Actions and Timeline In order to maintain the targeted closing date of June 15, 2025, we respectfully request that MTDC take the following actions:

1. Recourse Carve-Out Guaranty Direction (Section V.B). Provide direction on the scope of the recourse carve-out guaranty, specifically: (a) MTDC's position on springing full-recourse triggers, including whether SPE covenant violations should be included (and, if so, under what limitations); (b) MTDC's position on the inclusion of transfer-restriction violations as a loss carve-out; and (c) whether MTDC wishes to pro

2. Extension Fee Amounts (Section VI.B). Confirm MTDC's final position on extension fee amounts for both the Senior Loan and the Mezzanine Loan, including whether MTDC would accept a split-fee structure for the Senior Loan extensions and MTDC's position on Granite Peak's informal request for a mezzanine extension fee.

3. Insurance Coverage Instructions (Section VI.A). Confirm MTDC's insurance coverage instructions, including: (a) whether to negotiate the CGL limits down from $50,000,000/$100,000,000 to market-standard levels; (b) MTDC's position on terrorism self-insurance in light of the lenders' policy requirements; and (c) authorization for Castleton to bind the flood excess layer at an estimated annual premium of $75,000.

4. Board Approval (Section V.B). Advise whether the guaranty scope (including any aggregate cap) will require MTDC Board of Directors approval and, if so, the earliest available board meeting date at which such authorization can be obtained.

5. SPE Borrower Entity Formation (Section II). Confirm the identities and Employer Identification Numbers for the Mortgage Borrower and the Mezzanine Borrower once formed. We can assist with the formation process and the preparation of the organizational documents, and will coordinate with Sylvia Hartwell on tax matters related to the SPE structure. C&H requires direction on items 1 through 3 no later than May 9, 202

IX. Confidentiality Note This letter and its contents are attorney-client privileged and confidential, prepared in connection with Calderwood & Harkness LLP's engagement as outside counsel to Metropolitan Transit Development Corp. in the Hudson Yards West financing transaction. The information contained herein reflects attorney work product and the substance of legal advice rendered by C&H to MTDC. This letter should

X. Closing We appreciate the opportunity to serve as counsel to MTDC on this significant transaction. The Hudson Yards West financing is proceeding on schedule, and we are confident that with timely direction on the open items identified above, we can maintain the June 15, 2025 closing timeline. We remain available to discuss any of the foregoing at your convenience by telephone, video conference, or in person. In ad