Contract analysis

Section 1.1 — Defined Terms As used in this Agreement, the following terms shall have the meanings set forth below: "Agent" means Ironclad National Bank, N.A., a national banking association, having its principal office at 277 Park Avenue, New York, New York 10172, acting in its capacity as administrative agent for the Lenders under the Loan Agreement, together with its successors and assigns in such capacity. "Borro

Section 1.2 — Rules of Construction The rules of construction set forth in Section 1.2 of the Loan Agreement are hereby incorporated by reference into this Agreement and shall apply to this Agreement as if fully set forth herein. Without limiting the generality of the foregoing: (a) all dollar amounts referenced in this Agreement are in lawful currency of the United States of America; (b) the term "including" (and co

ARTICLE 2 — ESTABLISHMENT OF RESERVE ACCOUNTS

Section 2.1 — Interest Reserve

Section 2.1(a) — Establishment and Initial Deposit. On or prior to the Closing Date, Borrower shall establish and maintain with Agent (or Agent's designee) a segregated Eligible Account titled "Hudson Yards West Mortgage LLC — Interest Reserve Account" (the "Interest Reserve Account"). The Interest Reserve Account shall be maintained at a Qualified Institution and shall at all times be subject to a DACA in favor of A

Section 2.1(b) — Monthly Disbursements from Interest Reserve. On each Payment Date occurring during the Interest Reserve Period, Agent shall disburse from the Interest Reserve Account an amount equal to the Monthly Debt Service Amount for the applicable Interest Period, and Agent shall apply such disbursement directly to the payment of interest (and, if applicable following the Conversion Date, principal and interest

Section 2.1(c) — Replenishment. During the Interest Reserve Period, Agent shall, not less frequently than once per calendar quarter, evaluate the adequacy of the remaining balance in the Interest Reserve Account by reference to then-current forward Term SOFR curves (as published by a nationally recognized financial data service selected by Agent in its reasonable discretion), the projected remaining Loan disbursement

Section 2.1(d) — Excess Funds; Termination. Upon the earliest to occur of (i) the Interest Reserve Termination Date, (ii) the date on which the Property has achieved the Leasing Threshold and the Debt Service Coverage Ratio equals or exceeds 1.20x for two (2) consecutive calendar quarters (as certified by Borrower and confirmed by Agent), and (iii) the date of prepayment or repayment in full of the Loan, any funds re

Section 2.1(e) — Investment of Funds. Funds on deposit in the Interest Reserve Account shall, at Borrower's written direction delivered to Agent from time to time, be invested in Permitted Investments; provided, however, that (x) Agent shall have the right to approve the specific Permitted Investment selected by Borrower (such approval not to be unreasonably withheld, conditioned, or delayed), (y) the maturity date o

Section 2.2 — Tax and Insurance Escrow

Section 2.2(a) — Establishment. On or prior to the Closing Date, Borrower shall establish and maintain with Agent a segregated Eligible Account titled "Hudson Yards West Mortgage LLC — Tax and Insurance Escrow Account" (the "Tax and Insurance Escrow Account"). The Tax and Insurance Escrow Account shall be maintained at a Qualified Institution and shall at all times be subject to a DACA in favor of Agent, substantiall

Section 2.2(b) — Initial Deposits. On the Closing Date, Borrower shall make the following initial deposits into the Tax and Insurance Escrow Account: Tax Escrow Subaccount: Borrower shall deposit an amount equal to one-twelfth (1/12th) of the estimated annual real estate taxes for the Property (as shown on the most recent tax bill issued by the New York City Department of Finance, or, during the construction period p

Section 2.2(c) — Monthly Deposits. Commencing on the first Payment Date following the Closing Date and continuing on each Payment Date thereafter during the term of the Loan, Borrower shall deposit into the Tax Escrow Subaccount an amount equal to one-twelfth (1/12th) of the annual real estate taxes for the Property as reasonably estimated by Agent. Agent shall adjust the monthly deposit amount annually upon receipt

Section 2.2(d) — Disbursements. Subject to the provisions of this Section 2.2(d), Agent shall disburse funds from the Tax Escrow Subaccount directly to the New York City Department of Finance (or other applicable taxing authority) not later than thirty (30) days prior to the date on which any installment of real estate taxes, assessments, water and sewer charges, or other governmental charges with respect to the Prop

Section 2.2(e) — Adjustments; Shortfalls; Surpluses. Agent shall perform an annual reconciliation of each subaccount of the Tax and Insurance Escrow Account within thirty (30) days after Agent's receipt of final tax bills from the New York City Department of Finance and final insurance invoices or premium statements from the applicable insurers or Castleton Insurance Brokerage, Inc. If such reconciliation reveals tha

Section 2.2(f) — Tax Protests. Borrower reserves the right, at Borrower's sole cost and expense, to contest any real property tax assessment, valuation, or levy affecting the Property by appropriate proceedings diligently conducted in good faith; provided, however, that: (i) Borrower shall deliver written notice to Agent of Borrower's intention to initiate or continue any such contest not less than thirty (30) days p

Section 2.3 — Replacement Reserve

Section 2.3(a) — Establishment. On or prior to the Closing Date (or, at Agent's election, on or prior to the date that is twelve (12) months prior to the commencement of monthly deposits as described in Section 2.3(b) below), Borrower shall establish and maintain with Agent a segregated Eligible Account titled "Hudson Yards West Mortgage LLC — Replacement Reserve Account" (the "Replacement Reserve Account"). The Repl

Section 2.3(b) — Initial Deposit; Commencement of Monthly Deposits. No initial deposit shall be required on the Closing Date with respect to the Replacement Reserve Account, given that the improvements on the Property will consist entirely of new construction that is not expected to require capital repairs or replacements during the initial years following completion. Monthly deposits to the Replacement Reserve Accou

Section 2.3(c) — Permitted Disbursements. Disbursements from the Replacement Reserve Account shall be made by Agent upon delivery by Borrower of a Replacement Reserve Disbursement Request, substantially in the form of Exhibit B attached hereto, together with the following supporting documentation: (i) a reasonably detailed description of the capital repair, replacement, or improvement for which the disbursement is re

Section 2.3(d) — Cap on Accumulation. The maximum balance required to be accumulated in the Replacement Reserve Account shall be capped at $\\\\\\\\\\\\ (to be inserted based on the initial Property Condition Assessment delivered to Agent on or prior to the Closing Date and the estimated useful life of the building systems). Once the balance in the Replacement Reserve Account (including accrued investment income) equ

Section 2.3(e) — Annual PCA Update. Borrower shall deliver to Agent an updated Property Condition Assessment (a "PCA") prepared by Trident Structural Engineers, P.C. (or another qualified professional engineer approved by Agent, such approval not to be unreasonably withheld, conditioned, or delayed) not less frequently than once every three (3) years following the date of issuance of the first TCO for the Property. E

Section 2.4 — Tenant Improvement / Leasing Commission Reserve

Section 2.4(a) — Establishment. On or prior to the Closing Date, Borrower shall establish and maintain with Agent a segregated Eligible Account titled "Hudson Yards West Mortgage LLC — TI/LC Reserve Account" (the "TI/LC Reserve Account"). The TI/LC Reserve Account shall be maintained at a Qualified Institution and shall at all times be subject to a DACA in favor of Agent, substantially in the form of Exhibit A attach

Section 2.4(b) — Initial Deposit; Commencement of Monthly Deposits. On the Closing Date, Borrower shall deposit (or cause to be deposited from Loan proceeds, to the extent provided in the Loan Agreement) an amount equal to $\\\\\\\\\\\\ into the TI/LC Reserve Account, such amount having been determined based on the approved leasing plan and underwritten tenant improvement and leasing commission budget reviewed and ap

Section 2.4(c) — Permitted Disbursements. Disbursements from the TI/LC Reserve Account shall be made by Agent upon delivery by Borrower of a TI/LC Disbursement Request, substantially in the form of Exhibit C attached hereto, together with the following supporting documentation: (i) a fully executed lease or lease amendment with respect to the applicable tenant space, which lease or lease amendment has been approved (

Section 2.4(d) — Rollover and Reallocation. If the Property achieves the Leasing Threshold (85% economic occupancy) on or before the Leasing Threshold Deadline of September 15, 2029, any funds remaining in the TI/LC Reserve Account in excess of $\\\\\\\\\\\\ (such amount being equal to the estimated tenant improvement and leasing commission costs for anticipated near-term lease expirations, renewals, and new leasing

Section 2.5 — General Provisions Applicable to All Reserve Accounts

Section 2.5(a) — Account Control. All Reserve Accounts shall be subject to a Deposit Account Control Agreement (each, a "DACA") in favor of Agent, substantially in the form of Exhibit A attached hereto. Each DACA shall be executed and delivered by Borrower, Agent, and the applicable depository bank on or prior to the Closing Date (or, in the case of the Replacement Reserve Account, on or prior to the date on which su

Section 2.5(b) — Security Interest. Borrower hereby grants to Agent, for the benefit of the Lenders, a first-priority, continuing security interest in all Reserve Accounts and all funds, instruments, investment property, financial assets, and cash and non-cash proceeds thereof, including all investment income and gains earned thereon, as additional collateral for the Obligations under the Loan Agreement. This securit

Section 2.5(c) — No Trust Relationship. The relationship between Borrower and Agent with respect to the Reserve Accounts is solely that of debtor and secured party, and Agent is not a trustee, fiduciary, or escrow agent with respect to any Reserve Account or the funds deposited therein. Agent shall have no liability to Borrower or any other person for investment losses on Permitted Investments, for fluctuations in in

Section 2.5(d) — Statements. Agent shall provide Borrower with monthly statements for each Reserve Account, within fifteen (15) Business Days after the end of each calendar month, showing: (i) the opening balance of such Reserve Account as of the first day of such calendar month; (ii) all deposits received during such calendar month; (iii) all investment income earned and credited during such calendar month; (iv) all

Section 2.5(e) — Commingling Prohibited. Funds in the Reserve Accounts shall not be commingled with the general funds of Agent, any Lender, or any depository bank, or with the funds of any other borrower, depositor, or customer of Agent or such depository bank. Each Reserve Account shall at all times be a segregated Eligible Account, maintained in the name of Borrower and subject to the exclusive control of Agent pur

Section 2.5(f) — OFAC / AML Compliance. Funds on deposit in the Reserve Accounts shall at all times be subject to the anti-money laundering, sanctions, and Office of Foreign Assets Control ("OFAC") compliance provisions set forth in the Loan Agreement, including, without limitation, Borrower's representations and covenants that neither Borrower, nor any of its direct or indirect owners, nor any person or entity for w

ARTICLE 3 — CASH MANAGEMENT WATERFALL AND INTERACTION WITH RESERVE ACCOUNTS

Section 3.1 — Lockbox and Cash Management The parties acknowledge and agree that operating revenues from the Property shall be collected and managed in accordance with that certain Cash Management Agreement of even date herewith, among Borrower, Agent, and the depository bank named therein (as amended, restated, supplemented, or otherwise modified from time to time, the "Cash Management Agreement"). Pursuant to the C

Section 3.2 — Priority of Application During Construction Period During the construction period (i.e., the period from the Closing Date through the date of Substantial Completion of the improvements on the Property), Loan proceeds and other funds available to Borrower shall be applied in the following order of priority:

1. Operating Expenses and Ground Rent. First, to the payment of operating expenses of the Property and Ground Rent in the amount of $4,200,000 per annum (or such adjusted amount as may be applicable under the Ground Lease), as and when due;

2. Debt Service. Second, to the payment of the Monthly Debt Service Amount, which shall be funded from the Interest Reserve Account in accordance with Section 2.1(b) hereof during the Interest Reserve Period;

3. Tax and Insurance Escrow Deposits. Third, to required monthly deposits to the Tax and Insurance Escrow Account (including both the Tax Escrow Subaccount and the Insurance Escrow Subaccount) in accordance with Section 2.2(c) hereof;

4. TI/LC Reserve Deposits. Fourth, to required monthly deposits to the TI/LC Reserve Account in accordance with Section 2.4(b) hereof;

5. Construction Disbursements. Fifth, to construction disbursements in accordance with the Building Loan Agreement and the Project Loan Agreement, subject to all conditions precedent to disbursement set forth therein; and

6. Remaining Funds. Sixth, any remaining funds shall be held in the Cash Management Account or applied as directed by Agent in accordance with the Loan Documents.

Section 3.3 — Priority of Application During Operating Period Following Substantial Completion of the improvements on the Property (and issuance of the first TCO), operating revenues of the Property shall be applied in the following order of priority:

1. Operating Expenses and Ground Rent. First, to the payment of operating expenses of the Property (including property management fees, utilities, insurance deductibles, and ordinary repairs and maintenance) and Ground Rent as and when due;

2. Debt Service. Second, to the payment of the Monthly Debt Service Amount from operating revenues (and no longer from the Interest Reserve Account, unless the Interest Reserve Period has not yet expired and the Interest Reserve Account still has a positive balance);

3. Tax and Insurance Escrow Deposits. Third, to required monthly deposits to the Tax and Insurance Escrow Account in accordance with Section 2.2(c) hereof;

4. Replacement Reserve Deposits. Fourth, to required monthly deposits to the Replacement Reserve Account in accordance with Section 2.3(b) hereof (commencing twelve (12) months after the first TCO);

5. TI/LC Reserve Deposits. Fifth, to required monthly deposits to the TI/LC Reserve Account in accordance with Section 2.4(b) hereof;

6. Cash Sweep Amounts. Sixth, if a Cash Sweep Trigger Event (as defined in Section 3.4 below) has occurred and is continuing, all remaining Excess Cash Flow shall be swept into the Cash Sweep Subaccount and held as additional collateral in accordance with Section 3.4 hereof; and

7. Excess Cash Flow — Release to Borrower. Seventh, the balance of any Excess Cash Flow remaining after application in accordance with the foregoing priorities shall be released to Borrower (or as Borrower may direct in writing), subject to (a) no Event of Default then existing, and (b) Borrower's compliance with all financial covenants set forth in the Loan Agreement, including, without limitation, a Debt Service Co

Section 3.4 — Cash Sweep Trigger A "Cash Sweep Trigger Event" shall be deemed to have occurred and be continuing if: (a) the combined Debt Service Coverage Ratio (tested quarterly on a trailing twelve-month basis, in accordance with the methodology set forth in the Loan Agreement) falls below 1.10x, or (b) an Event of Default exists under the Loan Agreement or any other Loan Document. Upon the occurrence and during t

ARTICLE 4 — COVENANTS OF BORROWER

Section 4.1 — Timely Deposits Borrower covenants and agrees that it shall make all required deposits to the Reserve Accounts on or before the applicable Payment Date (or such other date as is specified in this Agreement), in each case in immediately available funds. Failure by Borrower to make any required deposit to any Reserve Account within