Contract analysis

I. Executive Summary This memorandum sets forth the results of our review and analysis of the ninety-nine (99) year ground lease (the "Ground Lease") executed as of June 1, 2020, by and between the New York City Economic Development Corporation ("NYCEDC"), as fee owner and landlord, and Metropolitan Transit Development Corp. ("MTDC"), as tenant, covering the real property located at 450 West 34th Street, New York, Ne

II. Description of the Ground Lease A. Basic Terms The following is a summary of the basic terms of the Ground Lease: The Premises consists of four contiguous tax lots aggregating approximately 132,500 square feet of lot area, situated on the west side of Tenth Avenue between West 33rd Street and West 34th Street, within the Hudson Yards Special District. The project contemplated under the Ground Lease is a large-sca

III. Ground Rent and Escalation Provisions A. Base Ground Rent Pursuant to Article 4 of the Ground Lease, MTDC is obligated to pay annual base ground rent to NYCEDC in the amount of Four Million Two Hundred Thousand Dollars ($4,200,000) per annum (the "Base Ground Rent"). The Base Ground Rent is payable in equal quarterly installments of $1,050,000 each, due on the first business day of each calendar quarter (i.e., J

Article 4, Section 4.05 of the Ground Lease provides for periodic escalation of the Base Ground Rent based on changes in the Consumer Price Index for All Urban Consumers (CPI-U), as published by the Bureau of Labor Statistics of the United States Department of Labor, for the New York-Newark-Jersey City, NY-NJ-PA Combined Statistical Area (the "CPI Index"). The key parameters of the escalation mechanism are as follows

1. Confirm with Ironclad how the debt yield covenant is calculated—specifically, whether it is calculated against the Senior Loan only ($475,000,000) or the combined loan amount ($675,000,000), and whether ground rent is deducted from NOI or treated separately.

2. Recommend that the loan documents define "Net Operating Income" to deduct ground rent as an operating expense above the debt service line, to ensure consistency in covenant testing.

3. Coordinate with Whitfield Albrecht to confirm that MTDC's stabilized NOI projections adequately account for the CPI-adjusted ground rent effective June 1, 2025.

IV. Leasehold Mortgage Consent Provisions A. General Mortgage Restriction

Article 8 of the Ground Lease ("Encumbrances") governs the creation of liens and security interests on the leasehold estate. Section 8.01 provides, as a general rule, that MTDC shall not mortgage, pledge, encumber, or otherwise hypothecate its leasehold interest in the Premises, or any portion thereof, without the prior written consent of NYCEDC. This is a standard restriction found in virtually all NYCEDC ground lea

Section 8.02 of the Ground Lease provides an important exception to the general mortgage restriction: the "deemed approval" mechanism. Under Section 8.02, NYCEDC's consent to a leasehold mortgage is deemed granted without the necessity of affirmative written approval if all of the following conditions are satisfied: (a) Institutional Lender Requirement. The proposed leasehold mortgage must be held by or on behalf of

V. Assignment and Transfer Restrictions A. Permitted Assignments

Article 9 of the Ground Lease governs the assignment, transfer, and subletting of the leasehold interest. Section 9.02 provides the general restriction: MTDC shall not assign, transfer, or otherwise dispose of the Ground Lease or the leasehold interest created thereby without the prior written consent of NYCEDC. However, Section 9.03 identifies the following categories of permitted assignments that do not require NYC

VI. Subletting Provisions A. Permitted Subletting

Article 10 of the Ground Lease governs subletting. Section 10.01 provides that MTDC may sublet all or any portion of the Premises for uses consistent with the Permitted Use (as defined in Article 3) without the prior written consent of NYCEDC, subject to the following conditions: (a) The sublease must be for a use that is consistent with the Permitted Use of the Premises under the Ground Lease and with all applicable

Section 10.02 of the Ground Lease requires MTDC to provide the following notices and reports to NYCEDC in connection with subletting: (a) Sublease Copies. MTDC shall deliver to NYCEDC a true and complete copy of each sublease (and any amendment, modification, or extension thereof) within thirty (30) days following execution. (b) Annual Rent Roll. MTDC shall deliver to NYCEDC, no later than January 31 of each calendar

VII. Existing SNDA — Review and Required Amendments A. Description of Existing SNDA Our title search has identified an existing Subordination, Non-Disturbance, and Attornment Agreement (the "Existing SNDA") recorded in the Office of the City Register of the City of New York at CRFN 2021000056473 (ACRIS). The Existing SNDA was executed on March 15, 2021, by and among: • NYCEDC, as landlord and fee owner; • MTDC, as te

1. Named Lender. The Existing SNDA names Sentinel Institutional Lending Group as the recognized leasehold mortgagee. The amended SNDA must name Ironclad National Bank, N.A., as Administrative Agent for the Senior Lenders, as the recognized leasehold mortgagee, together with its successors and assigns.

2. Syndication Protections. The Existing SNDA does not address loan syndication. The amended SNDA must confirm that the protections afforded to the leasehold mortgagee extend to all assignees, participants, and co-lenders in the Senior Loan syndicate, including Ridgeline Savings Bank, Atlas Mutual Insurance Company, Commonwealth Trust Company, Harborview Federal Savings Bank, and Meridian Pacific Bank, and any future

3. Extended Cure Periods. The cure periods in the Existing SNDA (fifteen (15) days for monetary defaults; sixty (60) days for non-monetary defaults) fall short of Ironclad's typical requirements. Ironclad requires: • For monetary defaults: thirty (30) days beyond the expiration of the tenant's cure period. • For non-monetary defaults: ninety (90) days beyond the expiration of the tenant's cure period, plus additional

4. New Lease Provisions. The Existing SNDA provides a ninety (90) day period within which the leasehold mortgagee must request a New Lease following Ground Lease termination. Ironclad typically requires a minimum of one hundred eighty (180) days to allow sufficient time to evaluate the situation, engage counsel, and determine whether to exercise the New Lease option. Additionally, the amended SNDA must confirm that:

5. Consent to Assignment of Leasehold Mortgage. The amended SNDA must provide that the leasehold mortgagee may assign, transfer, or participate its interest in the leasehold mortgage without the prior written consent of NYCEDC, subject only to the requirement that the assignee qualify as an Institutional Lender (as defined in the Ground Lease). This is critical for Ironclad's ability to syndicate, sell, or securitize

6. Casualty and Condemnation Proceeds. The Existing SNDA does not address the allocation or control of insurance or condemnation proceeds between the landlord, tenant, and leasehold mortgagee. The amended SNDA must provide that: • The leasehold mortgagee has the right to receive and control insurance proceeds arising from any casualty affecting the Premises, subject to the restoration obligations under the Ground Lea

7. Bankruptcy Protections. The amended SNDA must address NYCEDC's obligations in the event that the tenant becomes the subject of a proceeding under the United States Bankruptcy Code (11 U.S.C. § 101 et seq.), including: • NYCEDC's agreement not to seek termination of the Ground Lease without providing notice to the leasehold mortgagee and affording the leasehold mortgagee an opportunity to cure defaults and exercise

8. Mezzanine Lender Recognition. Granite Peak has indicated that it will require either (a) a separate SNDA between NYCEDC and Granite Peak (in its capacity as mezzanine lender), or (b) a "mezzanine intercreditor recognition" agreement pursuant to which NYCEDC acknowledges the existence of the mezzanine pledge and agrees to provide the following protections to Granite Peak: • Copies of all default notices under the G