Contract analysis

I. Executive Summary This memorandum sets forth our analysis of the Guaranteed Maximum Price ("GMP") contract (the "GMP Contract" or the "Contract") executed on December 20, 2025, between Harbor Point Development JV, LLC ("HP JV" or the "Owner") and Pinnacle General Contractors, Inc. ("Pinnacle" or the "Contractor"), a Maryland corporation whose chief executive officer is Raymond S. Muñoz, for the construction of the

II. Background and Transaction Context A. Joint Venture Structure Harbor Point Development JV, LLC ("HP JV") is a Delaware limited liability company organized for the purpose of acquiring, developing, constructing, leasing, and managing the Harbor Point Towers project. The JV is governed by an Operating Agreement that is expected to be executed concurrently with the JV Agreement on January 12, 2026. The membership st

III. Scope of Work and GMP Structure A. Scope Definition The GMP Contract encompasses all hard construction costs necessary for the construction of the Harbor Point Towers project, including the following principal categories of work: • Site preparation, demolition, and earthwork on the 8.2-acre waterfront parcel, including environmental remediation to the extent identified in the Phase I Environmental Site Assessmen

IV. Change Order Procedures A. Types of Change Orders The GMP Contract contemplates several categories of change orders, each with different risk allocations and pricing implications: Owner-Directed Changes. These are changes initiated by the Owner, typically involving discretionary scope additions, design modifications, or upgrades to finishes, fixtures, and equipment. Owner-directed changes increase the cost of the

V. Schedule Requirements A. Contract Time The GMP Contract establishes a contract time of approximately 30 months, with a target construction commencement date of March 1, 2026, and a scheduled substantial completion date of September 2028. These dates are consistent with the overall Project timeline and the financial projections in the JV pro forma. Definition of Substantial Completion. The definition of "substantia

VI. Liquidated Damages A. Delay Liquidated Damages The GMP Contract includes a liquidated damages provision under which Pinnacle is obligated to pay the Owner a specified amount for each day (or week) of delay beyond the scheduled substantial completion date. Liquidated damages serve as a pre-agreed estimate of the Owner's actual damages resulting from construction delay, which in the context of a large-scale develop

VII. Risk Allocation A. Warranties and Defect Liability General Warranty Period. The GMP Contract establishes a general warranty period during which Pinnacle warrants that all work is free from defects in materials and workmanship. The standard warranty period in the construction industry is one year from the date of substantial completion. For certain specialized building systems, longer warranty periods are customa