CLOSING ESCROW AGREEMENT
dated as of June 15, 2025
Sentinel Title Commitment No. STN-2025-MH-04178
THIS CLOSING ESCROW AGREEMENT (this "Agreement") is made and entered into as of June 15, 2025, by and among:
(1) SENTINEL TITLE & ESCROW COMPANY, a New York corporation, having its principal office at 140 Broadway, 20th Floor, New York, New York 10005, Attention: Patricia Eng, Closing Officer (in such capacity, the "Escrow Agent");
(2) HUDSON YARDS WEST MORTGAGE LLC, a Delaware limited liability company, having its principal office c/o Metropolitan Transit Development Corp., 200 South Michigan Avenue, Suite 3100, Chicago, Illinois 60604 (the "Mortgage Borrower");
(3) HUDSON YARDS WEST MEZZANINE LLC, a Delaware limited liability company, having its principal office c/o Metropolitan Transit Development Corp., 200 South Michigan Avenue, Suite 3100, Chicago, Illinois 60604 (the "Mezzanine Borrower," and together with Mortgage Borrower, each individually a "Borrower" and collectively, the "Borrowers");
(4) IRONCLAD NATIONAL BANK, N.A., a national banking association organized under the laws of the United States of America, having its principal office at 277 Park Avenue, New York, New York 10172, in its capacity as administrative agent for the Senior Lenders (in such capacity, the "Agent" or the "Senior Lender"); and
(5) GRANITE PEAK CAPITAL PARTNERS, LP, a Delaware limited partnership, having its principal office at 9 West 57th Street, Suite 4200, New York, New York 10019 (the "Mezzanine Lender," and together with the Senior Lender, each individually a "Lender" and collectively, the "Lenders").
The Escrow Agent, the Borrowers, and the Lenders are sometimes referred to herein individually as a "Party" and collectively as the "Parties."
This Agreement is entered into with reference to Sentinel Title & Escrow Company Commitment No. STN-2025-MH-04178, issued in connection with the transactions described herein.
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RECITALS
WHEREAS, Mortgage Borrower and Senior Lender are parties to that certain Senior Mortgage Loan Agreement of even date herewith (as the same may be amended, restated, supplemented, or otherwise modified from time to time, the "Senior Loan Agreement"), pursuant to which Senior Lender has agreed to make a mortgage loan to Mortgage Borrower in the original principal amount of Four Hundred Seventy-Five Million and No/100 Dollars ($475,000,000.00) (the "Senior Loan"), which Senior Loan is to be secured by, among other things, a first-priority mortgage lien on certain real property commonly known as 450 West 34th Street, New York, New York 10001, designated for real property tax purposes as Block 729, Lots 1, 5, 12, and 15, Borough of Manhattan, County of New York, State of New York, and more particularly described in the Senior Loan Agreement (the "Property");
WHEREAS, Mezzanine Borrower and Mezzanine Lender are parties to that certain Mezzanine Loan Agreement of even date herewith (as the same may be amended, restated, supplemented, or otherwise modified from time to time, the "Mezzanine Loan Agreement"), pursuant to which Mezzanine Lender has agreed to make a mezzanine loan to Mezzanine Borrower in the original principal amount of Two Hundred Million and No/100 Dollars ($200,000,000.00) (the "Mezzanine Loan"), which Mezzanine Loan is to be secured by, among other things, a first-priority pledge of one hundred percent (100%) of the membership interests in Mortgage Borrower held by Mezzanine Borrower;
WHEREAS, the total combined financing to be provided under the Senior Loan and the Mezzanine Loan is Six Hundred Seventy-Five Million and No/100 Dollars ($675,000,000.00), which combined financing, together with equity contributions and other sources, is expected to fund total project costs of approximately Nine Hundred Twenty Million and No/100 Dollars ($920,000,000.00);
WHEREAS, the Parties desire that the Escrow Agent hold in escrow certain documents and funds relating to the closing of the Senior Loan and the Mezzanine Loan (together, the "Loans") and disburse such documents and funds upon the satisfaction or waiver of the conditions set forth herein;
WHEREAS, the Escrow Agent has agreed to act in such capacity, subject to and in accordance with the terms and conditions set forth in this Agreement;
WHEREAS, in addition to acting as Escrow Agent hereunder, Sentinel Title & Escrow Company is acting as title insurer under its Commitment for Title Insurance No. STN-2025-MH-04178, dated as of May 2, 2025 (the "Title Commitment"), and the Parties hereby acknowledge and consent to such dual role, it being understood and agreed that the Escrow Agent's obligations in its capacity as title insurer shall be governed solely by the Title Commitment and the title insurance policies issued thereunder, and this Agreement shall not limit or expand such obligations; and
WHEREAS, the simultaneous closing of the Senior Loan and the Mezzanine Loan is a condition to each Lender's obligation to fund, and the Parties accordingly desire to establish an escrow arrangement to facilitate such simultaneous closing.
NOW, THEREFORE, in consideration of the foregoing premises, the mutual covenants and agreements set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:
ARTICLE 1 — DEFINITIONS
Section 1.1 — Defined Terms. As used in this Agreement, the following terms shall have the meanings set forth below. Capitalized terms used but not otherwise defined in this Agreement shall have the meanings ascribed to such terms in the Senior Loan Agreement or, if not defined therein, in the Mezzanine Loan Agreement.
"Agreement" has the meaning set forth in the preamble to this Agreement.
"Agent" has the meaning set forth in the preamble to this Agreement.
"Borrower" and "Borrowers" have the meanings set forth in the preamble to this Agreement.
"Borrower Closing Conditions" has the meaning set forth in Section 4.3 of this Agreement.
"Business Day" means any day other than a Saturday, Sunday, or any other day on which national banking associations in the City of New York, State of New York, are authorized or required by law, regulation, or executive order to be closed for regular banking business.
"Closing" means the simultaneous closing of both the Senior Loan and the Mezzanine Loan, to be effectuated by the disbursement of Escrow Deposits in accordance with Article 5 of this Agreement upon the satisfaction or waiver of the Closing Conditions set forth in Article 4.
"Closing Authorization" means the written authorization delivered by or on behalf of each Party to the Escrow Agent pursuant to Section 4.4, substantially in the form attached hereto as Exhibit A.
"Closing Conditions" means the Mutual Closing Conditions, the Lender Closing Conditions, and the Borrower Closing Conditions, collectively, as set forth in Article 4 of this Agreement.
"Closing Date" means the date on which all Closing Conditions have been satisfied or waived in accordance with Article 4 and on which the Escrow Agent disburses the Escrow Deposits in accordance with Article 5. The Parties are targeting June 15, 2025 as the Closing Date; provided, however, that the actual Closing Date may occur on such later date as may be agreed by the Parties, subject in all events to the Outside Closing Date.
"Closing Documents" means all documents deposited with the Escrow Agent pursuant to Article 3 of this Agreement.
"Document Escrow" means the escrow established for the holding of Closing Documents in the Document Escrow Account.
"Document Escrow Account" has the meaning set forth in Section 2.1 of this Agreement.
"Escrow Deposits" means, collectively, the Closing Documents and the Escrow Funds deposited with the Escrow Agent pursuant to this Agreement.
"Escrow Funds" means all cash and immediately available funds deposited with the Escrow Agent pursuant to Article 2 of this Agreement.
"Escrow Period" means the period commencing upon the first deposit of any Escrow Deposits into escrow hereunder and ending on the earlier to occur of (a) the Closing or (b) the termination of this Agreement in accordance with Article 7.
"Funding Escrow" means the escrow established for the holding of Escrow Funds in the Funding Escrow Account.
"Funding Escrow Account" has the meaning set forth in Section 2.1 of this Agreement.
"GMP Contract" means that certain Guaranteed Maximum Price Construction Contract by and between Mortgage Borrower and Cobalt Construction Group, Inc., bearing Contract No. CCG-HYW-2025-001, with a guaranteed maximum price of Four Hundred Twelve Million and No/100 Dollars ($412,000,000.00), together with all schedules, exhibits, addenda, change orders, and amendments thereto.
"Ground Lease" means that certain ground lease affecting the Property, recorded in the Office of the City Register of the City of New York under City Register File Number ("CRFN") 2020000198762, together with all amendments and modifications thereto.
"Lender Closing Conditions" has the meaning set forth in Section 4.2 of this Agreement.
"Lenders" has the meaning set forth in the preamble to this Agreement.
"Mezzanine Borrower" has the meaning set forth in the preamble to this Agreement.
"Mezzanine Lender" has the meaning set forth in the preamble to this Agreement.
"Mezzanine Loan" has the meaning set forth in the recitals to this Agreement.
"Mezzanine Loan Agreement" has the meaning set forth in the recitals to this Agreement.
"Mezzanine Loan Documents" has the meaning ascribed to such term in the Mezzanine Loan Agreement.
"Mezzanine Title Policy" means the mezzanine/UCC title insurance policy in the amount of Two Hundred Million and No/100 Dollars ($200,000,000.00) to be issued by the Escrow Agent, in its capacity as title insurer, in connection with the Mezzanine Loan.
"Mortgage Borrower" has the meaning set forth in the preamble to this Agreement.
"MTDC" means Metropolitan Transit Development Corp., the sole member of each of Mortgage Borrower and Mezzanine Borrower and the guarantor and sponsor under the Loan Documents.
"Mutual Closing Conditions" has the meaning set forth in Section 4.1 of this Agreement.
"Outside Closing Date" means July 31, 2025, or such later date as may be agreed to in writing by all of the Parties.
"Permitted Exceptions" has the meaning ascribed to such term in the Senior Loan Agreement.
"Property" has the meaning set forth in the recitals to this Agreement.
"Senior Lender" has the meaning set forth in the preamble to this Agreement.
"Senior Loan" has the meaning set forth in the recitals to this Agreement.
"Senior Loan Agreement" has the meaning set forth in the recitals to this Agreement.
"Senior Loan Documents" has the meaning ascribed to such term in the Senior Loan Agreement.
"Title Commitment" has the meaning set forth in the recitals to this Agreement.
"Title Policy" means the ALTA 2006 Lender's Title Insurance Policy in the amount of Four Hundred Seventy-Five Million and No/100 Dollars ($475,000,000.00) to be issued by the Escrow Agent, in its capacity as title insurer, insuring the priority of the Senior Mortgage, subject only to Permitted Exceptions.
"Wiring Instructions" means the wire transfer instructions set forth on Exhibit D attached hereto, as the same may be updated in writing by the applicable payee from time to time in accordance with Section 9.1.
Section 1.2 — Rules of Construction. Unless the context otherwise requires: (a) words importing the singular include the plural and vice versa; (b) references to "Articles," "Sections," "Exhibits," and "Schedules" are to articles, sections, exhibits, and schedules of and to this Agreement; (c) the words "herein," "hereof," "hereunder," and words of similar import refer to this Agreement as a whole and not to any particular provision hereof; (d) the words "include," "includes," and "including" shall be deemed to be followed by the phrase "without limitation"; (e) references to any document or agreement shall be deemed to include references to such document or agreement as amended, restated, supplemented, or otherwise modified from time to time in accordance with its terms; and (f) references to any Party shall include such Party's successors and permitted assigns.
ARTICLE 2 — ESTABLISHMENT OF ESCROW; DEPOSIT OF FUNDS
Section 2.1 — Escrow Accounts.
(a) Promptly upon the execution and delivery of this Agreement, the Escrow Agent shall establish and maintain two (2) segregated, federally insured escrow accounts at Ironclad National Bank, N.A. (ABA Routing No. 021-003-178), as follows:
(i) a "Document Escrow Account" for the receipt, holding, and safekeeping of all Closing Documents deposited with the Escrow Agent pursuant to Article 3 of this Agreement; and
(ii) a "Funding Escrow Account" (Account Name: Sentinel Title & Escrow Company — Hudson Yards West Funding Escrow; Account Number: to be inserted upon establishment) for the receipt, holding, and disbursement of all Escrow Funds deposited with the Escrow Agent pursuant to this Article 2.
(b) The Funding Escrow Account shall be an interest-bearing account. All interest accrued on Escrow Funds held in the Funding Escrow Account shall accrue for the account of the depositing party (and, if Escrow Funds are deposited by more than one party, shall be allocated among such depositing parties on a pro rata basis based upon the respective amounts deposited by each such party), unless otherwise directed by joint written instruction signed by all Parties. Interest shall be reported as income of the depositing party for federal, state, and local income tax purposes, and the Escrow Agent shall issue appropriate tax information reporting forms in accordance with Section 9.13 of this Agreement.
(c) The Parties acknowledge and agree that deposits in the Funding Escrow Account in excess of the applicable Federal Deposit Insurance Corporation ("FDIC") insurance limits may not be insured by the FDIC. To the extent that Escrow Funds deposited hereunder exceed the then-applicable FDIC insurance limits, the Escrow Agent shall not be liable for any loss of Escrow Funds resulting from the failure, insolvency, or closure of the depository institution, except to the extent caused by the Escrow Agent's gross negligence or willful misconduct. The Parties may, by joint written instruction, direct the Escrow Agent to invest Escrow Funds in obligations of the United States government or other permitted investments as the Parties may mutually agree; provided, however, that any such investment shall be subject to the prior written approval of all Parties and the Escrow Agent.
Section 2.2 — Deposit of Escrow Funds by Senior Lender.
On or before the Closing Date, the Senior Lender shall cause to be wired to the Funding Escrow Account immediately available funds in an aggregate amount equal to Four Hundred Seventy-Five Million and No/100 Dollars ($475,000,000.00), representing the gross proceeds of the Senior Loan; provided, however, that the Senior Origination Fee in the amount of Four Million Seven Hundred Fifty Thousand and No/100 Dollars ($4,750,000.00) (representing 1.00% of the original principal amount of the Senior Loan) may, at the Senior Lender's election and in accordance with the terms of the Senior Loan Agreement, be netted from the Senior Loan proceeds at funding. In the event that the Senior Origination Fee is netted at funding, the Senior Lender shall wire to the Funding Escrow Account the net amount of Four Hundred Seventy Million Two Hundred Fifty Thousand and No/100 Dollars ($470,250,000.00), and the approved closing statement shall reflect such netting arrangement. Alternatively, if the Senior Origination Fee is funded and immediately returned, the Senior Lender shall wire the full gross amount of Four Hundred Seventy-Five Million and No/100 Dollars ($475,000,000.00) to the Funding Escrow Account, and the Senior Origination Fee shall be disbursed to the Senior Lender as part of the disbursement waterfall set forth in Section 5.1 of this Agreement.
Section 2.3 — Deposit of Escrow Funds by Mezzanine Lender.
On or before the Closing Date, the Mezzanine Lender shall cause to be wired to the Funding Escrow Account immediately available funds in an aggregate amount equal to Two Hundred Million and No/100 Dollars ($200,000,000.00), representing the gross proceeds of the Mezzanine Loan; provided, however, that the Mezzanine Origination Fee in the amount of Three Million and No/100 Dollars ($3,000,000.00) (representing 1.50% of the original principal amount of the Mezzanine Loan) may, at the Mezzanine Lender's election and in accordance with the terms of the Mezzanine Loan Agreement, be netted from the Mezzanine Loan proceeds at funding. In the event that the Mezzanine Origination Fee is netted at funding, the Mezzanine Lender shall wire to the Funding Escrow Account the net amount of One Hundred Ninety-Seven Million and No/100 Dollars ($197,000,000.00), and the approved closing statement shall reflect such netting arrangement. Alternatively, if the Mezzanine Origination Fee is funded and immediately returned, the Mezzanine Lender shall wire the full gross amount of Two Hundred Million and No/100 Dollars ($200,000,000.00) to the Funding Escrow Account, and the Mezzanine Origination Fee shall be disbursed to the Mezzanine Lender as part of the disbursement waterfall set forth in Section 5.1 of this Agreement.
Section 2.4 — Deposit of Borrower Equity and Other Funds.
On or before the Closing Date, the Borrowers (or MTDC on behalf of the Borrowers) shall cause to be wired to the Funding Escrow Account the following:
(a) an equity contribution of not less than Two Hundred Million and No/100 Dollars ($200,000,000.00) from MTDC, representing MTDC's required equity investment in the Project;
(b) any required closing cost adjustments, prorations, and credits as set forth on the approved closing statement, including, without limitation, prorations of real estate taxes, ground lease rent, utility charges, and other customary items;
(c) title insurance premiums payable in connection with the issuance of (i) the Title Policy (ALTA 2006 Lender's Title Insurance Policy) in the amount of Four Hundred Seventy-Five Million and No/100 Dollars ($475,000,000.00) insuring the lien of the Senior Mortgage and (ii) the Mezzanine Title Policy (mezzanine/UCC title insurance policy) in the amount of Two Hundred Million and No/100 Dollars ($200,000,000.00);
(d) all recording taxes, mortgage recording taxes payable under Sections 253 and 253-a of the New York State Tax Law and applicable local law, and any transfer taxes payable in connection with the closing of the Loans and the recordation of the mortgage and related instruments;
(e) all recording and filing fees payable to the Office of the New York County Clerk and such other filing offices as may be required; and
(f) all other sums required to be paid by the Borrowers under the approved closing statements, including, without limitation, escrow fees, legal fees, appraisal fees, environmental report fees, survey fees, insurance premiums, construction consultant fees, and any other third-party costs and expenses.
The Parties acknowledge that the New York City Economic Development Corporation ("NYCEDC") is expected to disburse a New York City Transit Infrastructure Grant in the amount of Forty-Five Million and No/100 Dollars ($45,000,000.00) (the "Infrastructure Grant") in connection with the Project. To the extent that the Infrastructure Grant is channeled through the escrow established hereunder, the Borrowers shall cause NYCEDC to wire such funds to the Funding Escrow Account on or before the Closing Date, and the Escrow Agent shall disburse such funds in accordance with the approved closing statement. To the extent that the Infrastructure Grant is disbursed directly by NYCEDC to the Borrowers or to a third-party payee outside of this escrow arrangement, such direct disbursement shall not constitute a condition to Closing under this Agreement, and the Escrow Agent shall have no responsibility or liability with respect thereto.
Section 2.5 — Good Faith Deposit.
The Parties acknowledge that, as of the date of this Agreement, no separate earnest money or good faith deposit has been tendered into escrow. To the extent that any earnest money or good faith deposit was previously tendered by the Borrowers to either Lender in connection with the negotiation of the Loan Documents, such deposit shall be applied at Closing in accordance with the terms of the applicable Loan Document under which it was tendered and shall be reflected as a credit on the approved closing statement. The Escrow Agent shall have no responsibility with respect to any such deposit unless and until it is deposited into the Funding Escrow Account.
Section 2.6 — Confirmation of Deposits.
(a) The Escrow Agent shall confirm receipt of each wire transfer of Escrow Funds to all Parties (or their respective counsel) by email and telephonic notice within two (2) hours of receipt during normal business hours (9:00 a.m. to 5:00 p.m. Eastern Time on Business Days), or promptly upon the commencement of the next Business Day if such wire transfer is received outside of normal business hours.
(b) The Escrow Agent shall not be required to accept checks, drafts, or other non-immediately-available funds in satisfaction of any Party's obligation to deposit Escrow Funds hereunder. Any funds tendered in a form other than a wire transfer of immediately available funds may be rejected by the Escrow Agent without liability.
(c) The Escrow Agent shall provide each Party (or its counsel) with a written accounting of all Escrow Funds on deposit in the Funding Escrow Account, including accrued interest, promptly upon the request of any Party and, in any event, not less frequently than at the time of Closing or termination.
ARTICLE 3 — DEPOSIT OF CLOSING DOCUMENTS
Section 3.1 — Documents to Be Deposited by Borrowers.
On or before the Closing Date, the Borrowers shall deposit with the Escrow Agent in the Document Escrow Account the following Closing Documents, each duly executed and delivered (where execution is required) and in form and substance satisfactory to the applicable Lender and its counsel:
(a) Senior Loan Documents. Executed counterparts of the following Senior Loan Documents (to the extent required to be executed by Mortgage Borrower or MTDC):
(i) Mortgage Note, in the original principal amount of Four Hundred Seventy-Five Million and No/100 Dollars ($475,000,000.00), payable to the order of the Senior Lender;
(ii) Building Loan Mortgage and Security Agreement, to be recorded in the Office of the City Register of the City of New York, encumbering the Property and granting to the Senior Lender a first-priority mortgage lien thereon;
(iii) Project Loan Mortgage and Security Agreement, to be recorded in the Office of the City Register of the City of New York, encumbering the Property and granting to the Senior Lender a first-priority mortgage lien thereon;
(iv) Assignment of Leases and Rents, to be recorded in the Office of the City Register of the City of New York, assigning to the Senior Lender all of Mortgage Borrower's right, title, and interest in and to the leases, rents, and profits of the Property;
(v) UCC-1 Financing Statements (fixtures filing), to be filed with the Office of the City Register of the City of New York as a fixture filing with respect to the Property;
(vi) Environmental Indemnity Agreement, executed by Mortgage Borrower and MTDC, as guarantor, in favor of the Senior Lender;
(vii) Guaranty of Recourse Obligations, executed by MTDC in favor of the Senior Lender;
(viii) Cash Management Agreement, executed by Mortgage Borrower, the Senior Lender, and the applicable depository institution;
(ix) Borrower's Certificate, certifying the accuracy and completeness of the representations and warranties of Mortgage Borrower set forth in the Senior Loan Agreement as of the Closing Date;
(x) Organizational documents and formation certificates for Hudson Yards West Mortgage LLC, including: (A) Certificate of Formation filed with the Delaware Secretary of State; (B) Operating Agreement (as amended); (C) Certificate of Good Standing from the Delaware Secretary of State, dated not more than thirty (30) days prior to the Closing Date; (D) Certificate of Authority to transact business in the State of New York, together with a Certificate of Good Standing from the New York Department of State, dated not more than thirty (30) days prior to the Closing Date; and (E) incumbency certificates and resolutions authorizing the execution, delivery, and performance of the Senior Loan Documents; and
(xi) such other Senior Loan Documents as may be required under the Senior Loan Agreement to be delivered by Mortgage Borrower or MTDC as a condition to closing.
(b) Mezzanine Loan Documents. Executed counterparts of the following Mezzanine Loan Documents (to the extent required to be executed by Mezzanine Borrower or MTDC):
(i) Mezzanine Note, in the original principal amount of Two Hundred Million and No/100 Dollars ($200,000,000.00), payable to the order of the Mezzanine Lender;
(ii) Mezzanine Pledge and Security Agreement, granting to the Mezzanine Lender a first-priority security interest in one hundred percent (100%) of the membership interests in Mortgage Borrower held by Mezzanine Borrower;
(iii) Mezzanine Guaranty, executed by MTDC in favor of the Mezzanine Lender;
(iv) Mezzanine Environmental Indemnity Agreement, executed by Mezzanine Borrower and MTDC, as guarantor, in favor of the Mezzanine Lender;
(v) Organizational documents and formation certificates for Hudson Yards West Mezzanine LLC, including: (A) Certificate of Formation filed with the Delaware Secretary of State; (B) Operating Agreement (as amended); (C) Certificate of Good Standing from the Delaware Secretary of State, dated not more than thirty (30) days prior to the Closing Date; (D) Certificate of Authority to transact business in the State of New York, together with a Certificate of Good Standing from the New York Department of State, dated not more than thirty (30) days prior to the Closing Date; and (E) incumbency certificates and resolutions authorizing the execution, delivery, and performance of the Mezzanine Loan Documents; and
(vi) such other Mezzanine Loan Documents as may be required under the Mezzanine Loan Agreement to be delivered by Mezzanine Borrower or MTDC as a condition to closing.
(c) Ground Lease Documents.
(i) A certified true copy of the executed Ground Lease, as recorded in the Office of the City Register of the City of New York under CRFN 2020000198762, together with all amendments, modifications, and supplements thereto;
(ii) An estoppel certificate from NYCEDC, as ground lessor, dated not more than thirty (30) days prior to the Closing Date, certifying, among other things, that the Ground Lease is in full force and effect, no defaults exist thereunder (or specifying any defaults), and confirming the current annual ground rent and the remaining term of the Ground Lease;
(iii) Required ground lessor consents to financing, including NYCEDC's consent to the granting of the Building Loan Mortgage, the Project Loan Mortgage, and the Assignment of Leases and Rents;
(iv) A subordination, non-disturbance, and attornment agreement or recognition agreement, as applicable, in form and substance satisfactory to the Senior Lender and the Mezzanine Lender, executed by NYCEDC as ground lessor; and
(v) Such other Ground Lease-related documents as may be required under the Senior Loan Agreement or the Mezzanine Loan Agreement.
(d) Construction Documents.
(i) A fully executed copy of the GMP Contract (Contract No. CCG-HYW-2025-001) by and between Mortgage Borrower and Cobalt Construction Group, Inc., with a guaranteed maximum price of Four Hundred Twelve Million and No/100 Dollars ($412,000,000.00), together with all schedules, exhibits, and addenda thereto;
(ii) Contractor's consent to assignment of the GMP Contract in favor of the Senior Lender, executed by Cobalt Construction Group, Inc.;
(iii) Performance bond and payment bond, each in an amount not less than the guaranteed maximum price under the GMP Contract, issued by a surety company satisfactory to the Senior Lender and naming the Senior Lender and the Mezzanine Lender as dual obligees;
(iv) Certificate of builder's risk insurance in an amount not less than Five Hundred Million and No/100 Dollars ($500,000,000.00), issued by Fortis Indemnity Insurance Company, naming the Senior Lender and the Mezzanine Lender as additional insureds and loss payees, as their interests may appear; and
(v) Construction budget and construction schedule approved by the Senior Lender.
(e) Property Management Agreement. A fully executed copy of the Property Management Agreement by and between Mortgage Borrower and Evergreen Property Management LLC, in form and substance satisfactory to the Senior Lender and the Mezzanine Lender, together with a subordination of management fees in favor of the Lenders.
(f) Legal Opinions.
(i) An opinion of Calderwood & Harkness LLP, counsel to the Borrowers (attention: Douglas Fairchild), addressed to the Lenders, covering enforceability of the Loan Documents, due authorization and execution by the Borrowers and MTDC, absence of conflicts with organizational documents and applicable law, single-purpose entity status of Mortgage Borrower and Mezzanine Borrower, and true sale/non-consolidation matters, in form and substance satisfactory to the Lenders and their respective counsel; and
(ii) An opinion of Hargrove & Linden, P.C., local counsel to the Borrowers (attention: Raymond Cho), addressed to the Lenders, covering New York zoning and land use matters, including confirmation that: (A) the Uniform Land Use Review Procedure ("ULURP") approval (Application No. C 230415 ZSM) obtained from the New York City Planning Commission on September 12, 2023, and approved by the New York City Council on October 25, 2023, remains in full force and effect and has not been modified, revoked, or appealed; and (B) the Property is zoned for its intended use and the proposed construction and operation of the improvements comply with all applicable zoning and land use regulations.
(g) Title Documents.
(i) An executed owner's title affidavit, in form satisfactory to the Escrow Agent as title insurer, covering mechanics' liens, parties in possession, survey matters, and such other matters as may be customarily required; and
(ii) A gap indemnity agreement, executed by the Borrowers and MTDC in favor of the Escrow Agent as title insurer, indemnifying the Escrow Agent against any liens, encumbrances, or other matters arising during the gap period between the effective date of the Title Commitment and the date of recording of the mortgage instruments.
(h) Survey. A current ALTA/NSPS Land Title Survey of the Property, prepared and certified by a licensed surveyor in the State of New York, meeting the 2021 Minimum Standard Detail Requirements for ALTA/NSPS Land Title Surveys, including Table A optional survey items as specified by the Lenders, and certified to the Borrowers, the Lenders, and the Escrow Agent as title insurer.
(i) Tax and Financial Documents.
(i) MTDC's audited financial statements for the fiscal year ended December 31, 2024, prepared in accordance with generally accepted accounting principles, audited by Whitfield Albrecht & Co. LLP;
(ii) Evidence of MTDC's credit rating of A– (stable outlook) from Pinnacle Ratings Group (identifier PRG-MTDC-A-2024-1187), together with a letter from Pinnacle Ratings Group confirming that such rating has not been downgraded, withdrawn, or placed on negative watch as of the Closing Date;
(iii) Projected stabilized net operating income schedule for the Property, projecting stabilized annual net operating income of Fifty-Eight Million Two Hundred Thousand and No/100 Dollars ($58,200,000.00); and
(iv) Such other financial and tax information as may be required under the Senior Loan Agreement or the Mezzanine Loan Agreement.
(j) Environmental Reports. A Phase I Environmental Site Assessment of the Property prepared by Apex Environmental (Project No. AEC-NY-25-0337, dated March 20, 2025) in accordance with ASTM Standard E1527-21, together with a reliance letter addressed to the Senior Lender and the Mezzanine Lender (and their respective successors and assigns) authorizing such parties to rely upon the Phase I ESA as if they were the original client thereof.
(k) Appraisal. An appraisal report of the Property prepared by Broadstreet Appraisal Group (File No. BAG-25-1092, dated April 1, 2025) in accordance with the Uniform Standards of Professional Appraisal Practice ("USPAP") and the requirements of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 ("FIRREA"), together with a reliance letter addressed to the Senior Lender and the Mezzanine Lender (and their respective successors and assigns) authorizing such parties to rely upon the appraisal report. The appraisal shall conclude that the as-stabilized value of the Property is not less than One Billion Twenty-Five Million and No/100 Dollars ($1,025,000,000.00).
(l) Insurance Certificates.
(i) Certificates of insurance evidencing all insurance coverages required under the Senior Loan Agreement and the Mezzanine Loan Agreement, including general liability, property, umbrella/excess, workers' compensation, and professional liability coverages, each naming the Lenders as additional insureds and/or loss payees, as applicable;
(ii) A certificate of builder's risk insurance in an amount not less than Five Hundred Million and No/100 Dollars ($500,000,000.00), issued by Fortis Indemnity Insurance Company, with the Lenders named as additional insureds and loss payees, as their interests may appear; and
(iii) A casualty insurance broker's letter from Castleton Insurance Brokerage (attention: Brian Jessup), confirming the adequacy and compliance of all insurance coverages with the requirements of the Loan Documents.
(m) Structural/Property Condition Report. A property condition report prepared by Trident Structural Engineers, P.C. (attention: Dr. Rajesh Banerjee), assessing the structural integrity and physical condition of the existing improvements on the Property (if any) and the adequacy of the proposed construction plans, together with a reliance letter addressed to the Senior Lender and the Mezzanine Lender (and their respective successors and assigns) authorizing such parties to rely upon such report.
(n) Closing Statement. A closing statement, executed by the Borrowers, setting forth all sources and uses of funds, prorations, adjustments, and credits in connection with the Closing.
(o) Other Documents. Any other documents, instruments, agreements, certificates, or opinions required under the Senior Loan Agreement or the Mezzanine Loan Agreement to be delivered by the Borrowers or MTDC as a condition to the closing of the Loans.
Section 3.2 — Documents to Be Deposited by Senior Lender.
On or before the Closing Date, the Senior Lender shall deposit with the Escrow Agent in the Document Escrow Account the following Closing Documents:
(a) Executed counterparts of all Senior Loan Documents required to be executed by the Senior Lender, including the Senior Loan Agreement, the Cash Management Agreement, and such other instruments and agreements as require the Senior Lender's execution;
(b) A Senior Lender's closing certificate, certifying that: (i) the representations and warranties of the Senior Lender set forth in the Senior Loan Agreement are true and correct as of the Closing Date; (ii) the Senior Lender has satisfied all conditions to funding on its part to be satisfied; and (iii) the Senior Lender has authorized the funding of the Senior Loan;
(c) Lender authorization and incumbency certificates, certifying the names, titles, and specimen signatures of the officers of Ironclad National Bank, N.A. authorized to execute the Senior Loan Documents on behalf of the Senior Lender, together with copies of corporate resolutions or other authorizing documentation; and
(d) A closing statement executed by the Senior Lender, setting forth the Senior Lender's funds to be disbursed, origination fees, and other amounts in connection with the closing of the Senior Loan.
Section 3.3 — Documents to Be Deposited by Mezzanine Lender.
On or before the Closing Date, the Mezzanine Lender shall deposit with the Escrow Agent in the Document Escrow Account the following Closing Documents:
(a) Executed counterparts of all Mezzanine Loan Documents required to be executed by the Mezzanine Lender, including the Mezzanine Loan Agreement and such other instruments and agreements as require the Mezzanine Lender's execution;
(b) A Mezzanine Lender's closing certificate, certifying that: (i) the representations and warranties of the Mezzanine Lender set forth in the Mezzanine Loan Agreement are true and correct as of the Closing Date; (ii) the Mezzanine Lender has satisfied all conditions to funding on its part to be satisfied; and (iii) the Mezzanine Lender has authorized the funding of the Mezzanine Loan;
(c) Authorization and incumbency certificates for Granite Peak Capital Partners, LP, certifying the names, titles, and specimen signatures of the authorized representatives of the general partner of the Mezzanine Lender authorized to execute the Mezzanine Loan Documents on behalf of the Mezzanine Lender, together with copies of partnership resolutions, partnership agreement excerpts, or other authorizing documentation; and
(d) A closing statement executed by the Mezzanine Lender, setting forth the Mezzanine Lender's funds to be disbursed, origination fees, and other amounts in connection with the closing of the Mezzanine Loan.
Section 3.4 — Documents to Be Deposited by Escrow Agent.
On or before the Closing Date, the Escrow Agent shall deposit in the Document Escrow Account (or otherwise make available for the Closing) the following documents:
(a) Pro forma title insurance policies, as follows:
(i) a pro forma ALTA 2006 Lender's Title Insurance Policy (the "Title Policy") in the amount of Four Hundred Seventy-Five Million and No/100 Dollars ($475,000,000.00), insuring the first-priority lien of the Building Loan Mortgage and the Project Loan Mortgage upon the Property, subject only to Permitted Exceptions, together with all endorsements required by the Senior Lender, including, without limitation, ALTA 9-06 (Restrictions, Encroachments, Minerals), ALTA 3.1-06 (Zoning — Completed Structure), ALTA 28.1-06 (Easement), ALTA 35-06 (Minerals and Other Subsurface Substances), and such other endorsements as the Senior Lender may reasonably require; and
(ii) a pro forma mezzanine/UCC title insurance policy (the "Mezzanine Title Policy") in the amount of Two Hundred Million and No/100 Dollars ($200,000,000.00), insuring the validity and priority of the Mezzanine Lender's security interest in the membership interests in Mortgage Borrower, in form and substance satisfactory to the Mezzanine Lender;
(b) A marked-up copy of the Title Commitment (No. STN-2025-MH-04178) reflecting the satisfaction of all requirements set forth therein and the deletion of all standard exceptions to be removed in accordance with the Senior Loan Agreement;
(c) Payoff letters and UCC termination statements (UCC-3 filings) for any existing liens, encumbrances, or security interests affecting the Property or the membership interests in Mortgage Borrower, to the extent applicable, together with recording-ready satisfaction or discharge instruments; and
(d) Recording instructions, including cover sheets and recording transmittal forms for submission to the Office of the City Register of the City of New York (ACRIS) and the Office of the New York County Clerk, and filing instructions for the Delaware Secretary of State and the New York Department of State, as applicable.
Section 3.5 — Gap Period Documents.
In the event that the Closing does not occur on the initially targeted Closing Date of June 15, 2025 and the Escrow Period is extended, the following documents may need to be re-dated, re-certified, or supplemented, and the applicable depositing party shall be obligated to provide such updated documents to the Escrow Agent prior to the rescheduled Closing Date:
(a) Good standing certificates from the Delaware Secretary of State and the New York Department of State for each Borrower and MTDC (to be dated not more than thirty (30) days prior to the rescheduled Closing Date);
(b) Bring-down certificates of representations and warranties from the Borrowers and the Lenders;
(c) Updated continuation or endorsement of the Title Commitment to extend the effective date thereof;
(d) Updated ALTA/NSPS survey, to the extent any material changes to the Property have occurred since the date of the initial survey;
(e) Updated insurance certificates, to the extent any policies have been renewed or modified since the date of the initial certificates;
(f) Updated estoppel certificate from NYCEDC, if the initial estoppel certificate would be more than thirty (30) days old as of the rescheduled Closing Date;
(g) Updated or reaffirmed legal opinions, to the extent required by the Lenders or their respective counsel; and
(h) Such other updated or supplemental documents as any Party may reasonably require to confirm the continued accuracy and validity of the Closing Documents as of the rescheduled Closing Date.
ARTICLE 4 — CONDITIONS TO CLOSING AND RELEASE FROM ESCROW
Section 4.1 — Mutual Closing Conditions.
The obligation of the Escrow Agent to release the Escrow Deposits in accordance with Article 5 is subject to the satisfaction (or written waiver by all Parties) of each of the following conditions precedent (collectively, the "Mutual Closing Conditions"):
(a) Deposit of Closing Documents. All Closing Documents listed in Sections 3.1 through 3.4 of this Agreement shall have been deposited in the Document Escrow Account, fully executed (where execution is required), and in form and substance acceptable to all Parties and their respective counsel.
(b) Deposit of Escrow Funds. All Escrow Funds required to be deposited pursuant to Article 2 of this Agreement shall have been deposited in the Funding Escrow Account and confirmed by the Escrow Agent in accordance with Section 2.6.
(c) No Litigation or Injunction. No action, suit, proceeding, or investigation shall have been commenced, and no injunction, order, decree, or ruling shall have been issued by any court, governmental authority, or regulatory body, that would prevent, prohibit, restrain, or materially impair the consummation of the Closing or the transactions contemplated hereby or by the Loan Documents.
(d) No Material Adverse Change. No material adverse change shall have occurred in the physical condition, title, zoning, environmental condition, or value of the Property since the date of the Senior Loan Agreement that would, in the reasonable judgment of either Lender, materially and adversely affect the Property or the security for the Loans.
(e) Recording and Filing Fees, Taxes, and Premiums. All recording and filing fees, transfer taxes, mortgage recording taxes (including taxes payable under Sections 253 and 253-a of the New York State Tax Law), and title insurance premiums required to be paid in connection with the Closing shall have been funded and deposited in the Funding Escrow Account.
Section 4.2 — Lender Closing Conditions.
In addition to the Mutual Closing Conditions, the obligation of the Escrow Agent to release the Escrow Deposits is subject to the satisfaction (or written waiver by the applicable Lender) of each of the following conditions precedent for the benefit of the Lenders (collectively, the "Lender Closing Conditions"):
(a) Title. The Escrow Agent, in its capacity as title insurer, shall be prepared and irrevocably committed to issue (i) the Title Policy in the amount of Four Hundred Seventy-Five Million and No/100 Dollars ($475,000,000.00), insuring the first-priority lien of the Senior Mortgage upon the Property, free and clear of all liens, encumbrances, and exceptions other than Permitted Exceptions, and (ii) the Mezzanine Title Policy in the amount of Two Hundred Million and No/100 Dollars ($200,000,000.00), insuring the validity, perfection, and priority of the Mezzanine Lender's security interest in the pledged membership interests, free and clear of all liens, encumbrances, and exceptions other than Permitted Exceptions, and each such policy shall include all endorsements required by the applicable Lender.
(b) Survey. The ALTA/NSPS survey deposited with the Escrow Agent pursuant to Section 3.1(h) shall have been reviewed and approved by the Lenders and shall not disclose any material survey exceptions or encroachments beyond Permitted Exceptions.
(c) Appraisal Confirmation. The appraisal report prepared by Broadstreet Appraisal Group (File No. BAG-25-1092) shall confirm an as-stabilized appraised value of the Property of not less than One Billion Twenty-Five Million and No/100 Dollars ($1,025,000,000.00), and the following loan-to-value tests shall be satisfied on a pro forma basis:
(i) the Senior Loan-to-Value ratio shall not exceed 46.34% (calculated as the original principal amount of the Senior Loan divided by the as-stabilized appraised value); and
(ii) the Combined Loan-to-Value ratio shall not exceed 65.85% (calculated as the sum of the original principal amounts of the Senior Loan and the Mezzanine Loan divided by the as-stabilized appraised value).
(d) Environmental. The Phase I Environmental Site Assessment prepared by Apex Environmental (Project No. AEC-NY-25-0337, dated March 20, 2025) shall be acceptable to the Lenders and shall not identify any recognized environmental conditions, controlled recognized environmental conditions, or other environmental concerns that would require further investigation or remediation, unless such conditions have been adequately addressed to the reasonable satisfaction of the Lenders.
(e) Zoning Opinion. The zoning and land use opinion of Hargrove & Linden, P.C. (attention: Raymond Cho) shall confirm that: (i) the Property is zoned for its intended use; (ii) the proposed construction and operation of the improvements comply with all applicable zoning and land use regulations; and (iii) the ULURP approvals (New York City Planning Commission approval dated September 12, 2023, and New York City Council approval dated October 25, 2023, Application No. C 230415 ZSM) remain in full force and effect, have not been modified, revoked, superseded, or appealed, and are not subject to any pending legal challenge.
(f) Insurance. All insurance coverages required under the Senior Loan Agreement and the Mezzanine Loan Agreement shall be in full force and effect as of the Closing Date, including, without limitation, builder's risk insurance in an amount not less than Five Hundred Million and No/100 Dollars ($500,000,000.00) issued by Fortis Indemnity Insurance Company, with the Lenders named as additional insureds and/or loss payees, as their interests may appear, and the casualty insurance broker's letter from Castleton Insurance Brokerage (attention: Brian Jessup) shall have been delivered and shall confirm compliance of all coverages with the requirements of the Loan Documents.
(g) Legal Opinions. The opinions of Borrower's counsel (Calderwood & Harkness LLP, attention: Douglas Fairchild) and local counsel (Hargrove & Linden, P.C., attention: Raymond Cho) described in Section 3.1(f) shall have been received, and each such opinion shall be in form and substance satisfactory to the Lenders and to the Lenders' respective counsel (Clearfield & Associates LLP, attention: Harrison Whitmore, counsel to the Senior Lender; and Voss Richter & Baines LLP, attention: Natasha Ivanovic, counsel to the Mezzanine Lender).
(h) Organizational. Evidence satisfactory to the Lenders that each of Hudson Yards West Mortgage LLC and Hudson Yards West Mezzanine LLC has been validly formed and is in good standing under the laws of the State of Delaware and is duly qualified and in good standing in the State of New York, including: (i) certificates of good standing from the Delaware Secretary of State and the New York Department of State, each dated not more than thirty (30) days prior to the Closing Date; (ii) certified copies of the operating agreements of each Borrower; and (iii) confirmation that the organizational documents of each Borrower include the special purpose entity provisions required by the Lenders and that such provisions are in full force and effect.
(i) Construction. The following construction-related conditions shall have been satisfied: (i) the GMP Contract (Contract No. CCG-HYW-2025-001) with Cobalt Construction Group, Inc. shall have been fully executed and delivered; (ii) performance and payment bonds shall have been issued and delivered; (iii) the contractor's consent to assignment shall have been executed and delivered by Cobalt Construction Group, Inc.; and (iv) the construction budget and construction schedule shall have been reviewed and approved by the Senior Lender and the Senior Lender's construction consultant.
(j) Ground Lease. The following Ground Lease-related conditions shall have been satisfied: (i) the estoppel certificate from NYCEDC shall have been received, confirming that the Ground Lease is in full force and effect and no defaults exist thereunder (or specifying the nature of any asserted defaults); (ii) NYCEDC's consent to the granting of the mortgage and the assignment of leases and rents shall have been obtained; and (iii) a subordination, non-disturbance, and attornment agreement or recognition agreement, as applicable, shall have been executed and delivered by NYCEDC in form and substance satisfactory to the Lenders.
(k) Financial Covenants. The following financial covenants shall have been tested and satisfied on a pro forma basis as of the Closing Date:
(i) the Combined Loan-to-Value ratio shall not exceed 70.0%; and