1031-00004 · Hudson Yards West Mortgage LLC · Engagement

staffing-budget-memo.docx DOCUMENT Real Estate

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CALDERWOOD & HARKNESS LLP

MEMORANDUM

I. Engagement Overview

On February 12, 2025, this firm opened an engagement on behalf of Metropolitan Transit Development Corp. ("MTDC") in connection with the financing of a large-scale, mixed-use transit-oriented development located at 450 West 34th Street, New York, NY 10001, known as the "Hudson Yards West Project." The total project cost for the Hudson Yards West Project is approximately $920,000,000. Calderwood & Harkness LLP ("C&H") has been retained to represent MTDC in its capacity as sponsor and borrower in connection with the arrangement and documentation of a $675,000,000 construction financing. The financing is structured in two tiers:

(a) a $475,000,000 senior mortgage loan, for which Ironclad National Bank, N.A. will serve as administrative agent and lead arranger; and

(b) a $200,000,000 mezzanine loan, to be provided by Granite Peak Capital Partners, LP as sole mezzanine lender.

The scope of this engagement encompasses the full range of borrower-side legal services customary for a construction financing of this magnitude, including but not limited to: review and negotiation of all loan documents for both tiers of the capital stack, formation of special-purpose borrower entities, title and survey review, due-diligence coordination, opinion-letter oversight, intercreditor agreement negotiation, cash-management structuring, and closing logistics. As part of the engagement scope, C&H will oversee the formation of two Delaware special-purpose entity ("SPE") borrower vehicles — Hudson Yards West Mortgage LLC and Hudson Yards West Mezzanine LLC — each structured with appropriate SPE separateness covenants and independent-director provisions as required by the respective lenders.

The target date for first-draft distribution of all principal loan documents is May 1, 2025. The target closing date is June 15, 2025, which is timed to coincide with the commencement of construction activities for the Hudson Yards West Project. The overall engagement duration is estimated at approximately four months from the date of opening through closing, with post-closing administrative wind-down (including recording confirmations, opinion-letter delivery, and closing-binder assembly) expected to continue through approximately mid-July 2025.

Opposing counsel on this matter has been identified as follows:

• Senior Lender's Counsel: Clearfield & Associates LLP, represented by Harrison Whitmore (Partner).

• Mezzanine Lender's Counsel: Voss Richter & Baines LLP ("VRB"), represented by Natasha Ivanovic (Partner).

• Local Zoning/Land Use Counsel: Hargrove & Linden, P.C., represented by Raymond Cho, has been engaged separately by MTDC to handle all zoning, land-use, and ULURP-related matters and to render the zoning opinion required by the lenders at closing.

The principal client contacts for this engagement are as follows:

• Lydia Okafor — General Counsel, MTDC (primary legal contact; responsible for engagement oversight and outside-counsel guidelines compliance)

• Marcus Jennings — Vice President, Real Estate Development, MTDC (project-level business contact; point person on development milestones, construction-budget matters, and contractor coordination)

• Priya Subramanian — Chief Financial Officer, MTDC (financial contact; responsible for sources-and-uses, draw-request mechanics, financial covenant modeling, and funds-flow coordination)

Day-to-day project coordination from the MTDC side will be handled by Connor McBride, Project Director, who will serve as the operational liaison between the MTDC deal team and C&H for scheduling, document exchange, and status reporting purposes.

II. Staffing Plan

A. Core Deal Team — Assignments & Roles

The staffing plan set forth below is designed to provide MTDC with a cohesive, senior-led team possessing deep experience in complex construction financings, transit-oriented development projects, and multi-tranche capital structures. Each team member's role, principal responsibilities, and anticipated engagement profile are described in detail.

1. Douglas Fairchild — Partner, Real Estate (Responsible Partner)

Douglas Fairchild will serve as the Responsible Partner on this engagement and will maintain overall supervisory authority for the quality and strategic direction of the legal work product delivered to MTDC. His responsibilities include, without limitation:

• Overall engagement supervision and client relationship management, including periodic status updates to Lydia Okafor and the MTDC executive team;

• Strategic advice on deal structure, including the allocation of risks between the senior and mezzanine tranches, the design of intercreditor mechanics, and the identification and mitigation of ground-lease-related risks that may affect lender collateral positions;

• Review of, and sign-off on, all critical-path documents, specifically the senior mortgage loan agreement, the mezzanine loan agreement, and the intercreditor agreement, prior to each round of distribution to opposing counsel;

• Lead role in negotiations with lenders' counsel on material open points, including default and cure mechanics, cash-sweep triggers, DSCR and LTV covenant calibration, extension conditions, transfer restrictions, guarantor liability scope, and "bad boy" guaranty carve-outs;

• Attendance at all principal negotiation sessions (whether conducted in person or by videoconference) and personal attendance at the closing; and

• Engagement with senior client leadership on strategic decisions requiring business judgment, including those relating to deal economics, risk allocation, and go/no-go determinations on material open points.

Mr. Fairchild's engagement is anticipated to be front-loaded during the initial structuring phase (weeks 1 through 4), when fundamental deal-structure decisions are made and the term-sheet framework is finalized, and then closing-intensive during the final two weeks of the engagement. During the mid-cycle period encompassing document drafting and routine diligence activities, his involvement will be lighter and concentrated on periodic document reviews and strategic guidance as needed.

2. Angela Fontaine — Partner, Real Estate (Billing Partner)

Angela Fontaine will serve as Billing Partner and will be responsible for the financial administration and management of this engagement. In addition to her administrative role, Ms. Fontaine will carry substantive responsibility for several important work streams. Her responsibilities include:

• Budget oversight, billing administration, and matter-level financial management, including monthly accrual reporting, invoice preparation and review, and compliance with MTDC's outside-counsel guidelines and purchase-order requirements;

• Substantive responsibility for all SPE formation documents, including certificates of formation, limited liability company agreements (incorporating SPE separateness covenants, springing-member provisions, and independent-director requirements), and qualifications to do business in the State of New York for each of Hudson Yards West Mortgage LLC and Hudson Yards West Mezzanine LLC;

• Substantive responsibility for organizational authority documentation, including board and member resolutions, incumbency certificates, and good-standing certifications;

• Primary drafting and negotiation responsibility for the guaranty and indemnity instruments, including the recourse carve-out guaranty, the environmental indemnity agreement, and any completion guaranty required by the lenders;

• Secondary review of the senior mortgage loan agreement and the mezzanine loan agreement, with particular attention to financial covenants, reserve requirements, and draw-request mechanics;

• Coordination with Hargrove & Linden, P.C. (Raymond Cho) regarding the scope and assumptions of the zoning opinion, and with Sentinel Title regarding title commitment review, survey matters, and endorsement requirements;

• Service as the primary liaison with the MTDC finance team (Priya Subramanian) on all matters relating to sources-and-uses reconciliation, construction draw mechanics, interest-reserve sizing, and financial covenant modeling (including DSCR, LTV, and debt-yield thresholds); and

• Oversight of engagement economics, including timely communication to the Staffing Committee regarding any material deviations from the preliminary budget.

3. Grace Nakamura — Senior Associate, Real Estate (Lead Associate)

Grace Nakamura, a senior associate in her eighth year of practice, will serve as Lead Associate and will be the primary driver of day-to-day deal execution. Ms. Nakamura's practice is concentrated in commercial real estate finance, and she has served as lead associate on seven comparable construction-financing transactions within the past three years. Her responsibilities include:

• Day-to-day deal management, serving as the primary point of contact for opposing counsel (Harrison Whitmore at Clearfield and Natasha Ivanovic at VRB) and for internal deal-team members, and ensuring timely responsiveness on all action items;

• First-pen drafting of MTDC's (borrower's) comments to the senior mortgage loan agreement, the mezzanine loan agreement, the pledge and security agreement (mezzanine-tier), and all related ancillary documents, including, without limitation, the mortgage, the assignment of leases and rents, the environmental indemnity, the cash-management agreement, the deposit account control agreements, the assignment of construction contracts, and the assignment of plans and specifications;

• Preparation, coordination, and ongoing management of the master closing checklist, the due-diligence tracker, and the comprehensive document matrix, ensuring that all deliverables are tracked against target dates and that responsible parties are clearly identified;

• Review and mark-up of the intercreditor and co-lender agreement, the cash management agreement, and all deposit account control agreements, with attention to waterfall mechanics, cure rights, purchase options, and default-trigger alignment between the senior and mezzanine tiers;

• Oversight of third-party opinion letters, including coordination with C&H's opinion committee regarding the scope and form of the borrower's counsel opinion, review of lender's counsel opinion drafts, and coordination with Hargrove & Linden regarding the zoning opinion;

• Review and analysis of the title commitment (STN-2025-MH-04178) issued by Sentinel Title, including evaluation of all Schedule B exceptions, identification of required curative actions, negotiation of endorsement requirements, and review of the ALTA survey for compliance with lender requirements;

• Management of all pre-closing and closing logistics, including preparation of signature packages, bring-down certifications and compliance certificates, the closing memorandum, and the funds-flow memorandum;

• Coordination with Cobalt Construction Group ("CCG") and MTDC's construction team regarding the assignment-of-contracts collateral, review of the guaranteed-maximum-price ("GMP") construction contract (CCG-HYW-2025-001) for lender-required provisions (including lender-as-additional-insured, collateral-assignment-consent, and step-in rights), and negotiation of any required amendments or side letters to the GMP contract; and

• Supervision of Rafael Dominguez on all assignments delegated to the working-associate level.

Ms. Nakamura's engagement will be sustained and intensive throughout all phases of the transaction, with peak hours anticipated during the document-preparation phase (Phase 2) and the negotiation-and-finalization phase (Phase 3).

4. Rafael Dominguez — Associate, Real Estate (Working Associate)

Rafael Dominguez, a fourth-year associate in the Real Estate department, will serve as the Working Associate on this engagement. Mr. Dominguez has contributed to multiple real estate finance transactions and has developed particular proficiency in entity-formation work, due-diligence coordination, and closing mechanics. His responsibilities include:

• Drafting of all SPE formation documents, including certificates of formation filed with the Delaware Secretary of State, limited liability company agreements for each of Hudson Yards West Mortgage LLC and Hudson Yards West Mezzanine LLC (in coordination with Angela Fontaine), and applications for qualification to do business in the State of New York filed with the New York Department of State;

• First-level review and abstracting of the ground lease between the New York City Economic Development Corporation ("NYCEDC") and MTDC (recorded at CRFN 2020000198762), with particular attention to mortgagee-consent requirements, recognition-agreement provisions, casualty and condemnation clauses, assignment restrictions, and estoppel-certificate requirements, as well as review of all existing encumbrances of record;

• Preparation, assembly, and tracking of all due-diligence deliverables required by the lenders, including but not limited to organizational documents, evidence of authority (board and member resolutions), certificates of good standing, insurance certificates and binders, environmental reports (Phase I Environmental Site Assessment, report number AEC-NY-25-0337), the appraisal (Bainbridge Appraisal Group, report number BAG-25-1092), the property condition assessment ("PCA"), seismic assessments (if applicable), flood-zone certifications, and zoning compliance materials;

• Drafting of officer's certificates, secretary's certificates, incumbency certificates, borrower's closing certificates, and solvency certificates as required by the loan documents;

• Preparation of UCC-1 financing statements and fixture filings, and coordination with Sentinel Title on the recording and filing of all instruments in the applicable filing offices (New York City Register / ACRIS and the Delaware Secretary of State);

• Document management responsibilities, including maintenance of the C&H deal room and external-facing virtual data room, strict version control over all loan documents and ancillary instruments, and maintenance of distribution logs documenting all transmissions of drafts to opposing counsel and the client;

• Legal research assignments as directed by Grace Nakamura, including research on provisions of the New York Real Property Actions and Proceedings Law ("RPAPL"), New York City mortgage recording tax calculations and exemptions, Delaware LLC law (including issues relating to SPE separateness covenants, springing-member mechanics, and independent-director qualifications), and lender requirements for bankruptcy-remoteness and non-consolidation opinions; and

• General support for the deal team across all phases, including pre-closing and closing assistance.

5. Sylvia Hartwell — Partner, Tax (Tax Specialist)

Sylvia Hartwell, a partner in the firm's Tax department, will serve as the Tax Specialist on this engagement, providing advice on all tax-related aspects of the transaction. Ms. Hartwell has extensive experience advising on the tax dimensions of complex real estate financings in the New York metropolitan area. Her responsibilities include:

• Tax structuring advice on the formation and capitalization of the SPE borrower entities (Hudson Yards West Mortgage LLC and Hudson Yards West Mezzanine LLC), including the tax characterization of capital contributions, the treatment of intercompany advances, and the implications of the organizational structure for federal and state tax purposes;

• Detailed review and analysis of New York City mortgage recording tax treatment and optimization strategies, including coordination of filings through ACRIS (Automated City Register Information System), calculation of applicable rates on the $475,000,000 senior mortgage, and analysis of eligibility for a Consolidation, Extension, and Modification Agreement ("CEMA") structure if any existing mortgage on the property can be consolidated to reduce mortgage recording tax exposure;

• Analysis of New York City transfer tax (including Real Property Transfer Tax, or "RPTT") implications, if applicable to any aspect of the transaction;

• Advice regarding the status and implications of any New York City real property tax exemption or abatement applications (including ICAP, Article 11, or other programs) that may be relevant to the Hudson Yards West Project, and the integration of any such exemption or abatement into the financial covenants and representations in the loan agreements;

• Review of all tax-related provisions in the senior mortgage loan agreement and the mezzanine loan agreement, including provisions relating to tax gross-ups, withholding-tax obligations, FATCA compliance, SOFR-related tax matters (including transition provisions from legacy benchmark rates), and tax-indemnity clauses;

• Analysis of MTDC's tax-exempt-instrumentality status (to the extent applicable) and the implications of such status for borrower-level tax obligations and lender-side regulatory and tax considerations; and

• Brief closing review to confirm that all tax-related deliverables have been satisfied and that the closing mechanics (including ACRIS recording and mortgage recording tax payment) are properly structured.

Ms. Hartwell's engagement is anticipated to be concentrated during weeks 2 through 6 of the transaction (approximately February 24 through March 28, 2025), during which the structuring decisions with the greatest tax impact will be made and the tax-structure memorandum will be prepared. Thereafter, her involvement will consist of periodic consultations as tax-related issues arise in the document-negotiation process, followed by a brief review of closing-related tax items in the days immediately preceding the target closing date.

B. Support Staff & Resources

One paralegal will be assigned from the Real Estate paralegal pool to support the deal team. The assigned paralegal will be responsible for document management (including maintenance of the physical and virtual deal rooms), closing binder assembly, preparation and submission of ACRIS filings, Secretary of State filings, UCC filings, and general deal-room administration tasks. The estimated paralegal commitment for this engagement is 80 to 120 hours, distributed across all phases of the transaction with peak utilization expected during the closing and post-closing phases.

In addition, the staffing plan contemplates the potential need for one additional junior associate drawn from the Real Estate group during the closing week (estimated June 11–15, 2025) to assist with signature-page coordination, escrow-instruction preparation, and post-closing filing logistics. The estimated commitment for this additional resource, if activated, is approximately 20 to 40 hours. This contingency resource will be drawn from the department's general availability and will not be included in the preliminary budget unless and until the need is confirmed and the resource is formally activated. Any such activation will be communicated to the Staffing Committee in advance.

III. Hourly Rates & Estimated Hours

A. Standard Billing Rates (2025)

The following table sets forth the standard billing rates for each timekeeper assigned to this engagement, reflecting Calderwood & Harkness's published rate schedule for calendar year 2025:

These rates reflect C&H's standard published rates for 2025 and are consistent with the rates communicated to MTDC at the time of engagement. As of the date of this memorandum, no alternative-fee arrangement, blended rate, fixed fee, or success-based fee structure has been discussed with the client for this engagement. It should be noted, however, that MTDC's outside-counsel guidelines (a copy of which has been requested from Lydia Okafor but not yet received in final form) may require a rate holdback or volume discount. Ms. Okafor has provided a preliminary indication that standard rates are acceptable given the existing institutional relationship between C&H and MTDC, but this should be confirmed upon receipt and review of the final outside-counsel guidelines. Any rate accommodation will be reflected in an updated budget and communicated to the Staffing Committee promptly.

B. Estimated Hours by Phase

The following section presents estimated hours for each timekeeper organized by phase of the transaction. These estimates are based on comparable construction-financing engagements handled by the Real Estate department, adjusted for the specific characteristics of the Hudson Yards West Project, including the two-tier capital structure, the ground-lease overlay, and the anticipated complexity of intercreditor negotiations.

Phase 1 — Engagement Set-Up, Structuring & SPE Formation (February 12 – March 14, 2025)

Phase 1 encompasses all activities necessary to launch the engagement and establish the structural framework for the financing. Key activities during this phase include: completion of the firm's conflict-clearance process (including laterals review and cross-border screening); finalization and execution of the engagement letter with MTDC; formation and organization of the two Delaware SPE borrower entities (Hudson Yards West Mortgage LLC and Hudson Yards West Mezzanine LLC), including preparation of certificates of formation, limited liability company agreements with full SPE separateness covenant packages, designation of independent directors, and applications for qualification to do business in the State of New York; initial analysis of the senior and mezzanine term sheets to identify material structural issues, open business points, and departures from market norms; participation in initial structuring calls with MTDC, the senior lender, and the mezzanine lender; preparation of a tax-structure memorandum by Sylvia Hartwell addressing SPE capitalization, mortgage recording tax exposure and optimization strategies, and RPTT considerations; initial review and abstracting of the ground lease (CRFN 2020000198762); and placement of orders for the title search, survey, and related diligence items, together with a preliminary review of materials received.

Phase 2 — Due Diligence & Document Preparation (March 15 – April 30, 2025)

Phase 2 is the most intensive drafting and diligence phase of the engagement. Activities during this period include: comprehensive review of the title commitment issued by Sentinel Title (commitment number STN-2025-MH-04178), including analysis of all Schedule B-I requirements and Schedule B-II exceptions, identification of curative items, and negotiation of endorsement requirements (including comprehensive, zoning, survey, access, contiguity, and environmental-lien endorsements as applicable); review of the ALTA/NSPS survey for compliance with the lenders' survey requirements and identification of any boundary, encroachment, or easement issues; review of the Phase I Environmental Site Assessment prepared by the environmental consultant (report number AEC-NY-25-0337), with escalation to the client of any recognized environmental conditions requiring further investigation or remediation; review of the appraisal prepared by Bainbridge Appraisal Group (report number BAG-25-1092) for consistency with the lenders' valuation requirements and covenant compliance; coordination with Hargrove & Linden, P.C. (Raymond Cho) regarding the scope, assumptions, and qualifications of the zoning opinion, and review of draft zoning opinion deliverables; assembly and review of all organizational due-diligence materials, including formation documents, operating agreements, good-standing certificates, and evidence of authority for MTDC, its affiliates, and the SPE borrower entities; first-pen drafting of borrower's comments to all loan documents for both tiers of the capital stack (senior mortgage loan agreement, mezzanine loan agreement, pledge and security agreement, mortgage, assignment of leases and rents, environmental indemnity, recourse carve-out guaranty, completion guaranty, cash-management agreement, deposit account control agreements, and ancillary documents); initial review and analysis of the intercreditor agreement as circulated by senior lender's counsel; review of insurance specifications with MTDC's insurance broker, Castleton Risk Advisors, to ensure compliance with lender requirements; review of the GMP construction contract with Cobalt Construction Group (contract number CCG-HYW-2025-001) for lender-required provisions; and structuring and documentation of the cash-management and lockbox arrangements, including waterfall mechanics and trigger events.

Phase 3 — Negotiation & Document Finalization (May 1 – June 10, 2025)

Phase 3 encompasses the full negotiation cycle for all transaction documents. This period is expected to be the most demanding from a partner-level standpoint, as material open points are resolved through direct engagement with lenders' counsel. Key activities include: iterative negotiation rounds with Clearfield & Associates (Harrison Whitmore) on the senior loan documents and with Voss Richter & Baines (Natasha Ivanovic) on the mezzanine loan documents; turn-by-turn mark-ups of all principal agreements and ancillary instruments; participation in scheduled negotiation sessions, whether conducted in person at C&H offices or by videoconference; resolution of open business points escalated from the drafting process, including negotiation of financial covenant levels (DSCR, LTV, and debt-yield thresholds), cash-sweep and cash-trap trigger mechanics, extension-option conditions, transfer-restriction carve-outs, and the scope of recourse carve-out guaranty triggers; detailed negotiation and finalization of the intercreditor agreement, including cure rights, purchase-option mechanics, standstill periods, default-trigger alignment, and casualty/condemnation allocation; finalization of guaranty and indemnity instruments; coordination of opinion-letter scope, forms, and qualifications with C&H's opinion committee and with lenders' counsel; pre-closing title updates and bring-down searches ordered from Sentinel Title; and preparation of closing checklists reflecting final document inventory and outstanding deliverables.

Phase 4 — Closing & Post-Closing (June 11 – July 15, 2025)

Phase 4 covers all closing and post-closing activities necessary to consummate the financing and complete the engagement. Key activities include: final execution of the closing checklist, confirming satisfaction or waiver of all conditions precedent to funding; attendance at pre-closing meetings and the closing itself, to be conducted at Sentinel Title's offices at 140 Broadway, New York, NY; collection and coordination of all signature pages (original and counterpart), including management of any escrow-signature arrangements; preparation and coordination of the funds-flow memorandum and real-time coordination with all parties (including lenders, title company, and MTDC treasury) on funding mechanics and wire-transfer logistics; recording of the mortgage, any consolidation or modification instruments, and assignments through ACRIS, including calculation and payment of applicable New York City and New York State mortgage recording taxes; filing of UCC-1 financing statements with the Delaware Secretary of State and UCC fixture filings with the New York City Register; delivery of all opinion letters (borrower's counsel opinion, local counsel zoning opinion, tax opinion) to the lenders; procurement and distribution of recording confirmations and filed-stamped copies of all recorded instruments; assembly and distribution of closing binders (physical and electronic) to all parties; and final engagement wrap-up, including deactivation of the virtual data room, archiving of the matter file, and preparation of the final invoice.

C. Total Estimated Hours — Summary

The following table summarizes the aggregate estimated hours and fees for each timekeeper across all four phases of the engagement:

These estimates carry a ±15% variability margin, yielding a potential fee range of approximately $1,388,000 to $1,878,000. Variability is driven principally by the following factors: (a) the complexity and duration of the intercreditor negotiation between Ironclad National Bank and Granite Peak Capital Partners; (b) lender-side document turnaround times, which are outside C&H's control and can compress or extend the negotiation cycle; and (c) the scope and nature of title and environmental exceptions requiring resolution, which may necessitate additional legal analysis, curative work, or endorsement negotiations. The budget will be monitored on an ongoing basis, and any material deviation will be communicated to the Staffing Committee and to the client promptly.

IV. Preliminary Budget

A. Estimated Professional Fees

Based on the staffing plan and estimated hours set forth in Section III above, the total estimated professional fees for the engagement are $1,633,125. This estimate is subject to a ±15% variability margin based on the factors identified above, yielding an estimated fee range of approximately $1,388,000 to $1,878,000. The midpoint estimate of $1,633,125 represents the department's best current assessment of the likely fee outcome assuming a transaction proceeding on a customary timeline and without unusual complications beyond those identified in Section VI below.

B. Estimated Disbursements

In addition to professional fees, the following disbursement categories are anticipated in connection with this engagement:

Disbursement estimates are based on C&H's experience with comparable transactions and are subject to adjustment as actual costs are incurred. All disbursements will be billed at cost.

C. Total Preliminary Budget

The preliminary budget set forth above does not include the following categories of costs and expenses, which are either borne directly by MTDC or billed under separate engagements:

(a) Fees of local zoning and land use counsel (Hargrove & Linden, P.C.), which are the subject of a separate engagement between MTDC and that firm;

(b) Title insurance premiums, escrow fees, and related charges payable to Sentinel Title in connection with the issuance of the lender's title insurance policy and any owner's policy;

(c) New York City and New York State mortgage recording taxes, which on the $475,000,000 senior mortgage loan will constitute a significant closing cost for the client (estimated at applicable combined rates);

(d) Appraisal, environmental, engineering, and other third-party consultant fees (including fees of Bainbridge Appraisal Group, the Phase I ESA consultant, and any property condition assessment or seismic consultant); and

(e) Any post-closing litigation, workout, enforcement, or additional-phase services that may be required following the closing of the financing, which would be scoped and budgeted separately if and when such services are requested.

D. Billing Arrangements

Billing for this engagement will proceed on C&H's standard monthly-cycle basis, with invoices rendered within approximately fifteen days following the close of each calendar month. Payment terms are net thirty (30) days from the date of invoice, consistent with C&H's standard billing policies.

MTDC's outside-counsel guidelines may require the use of purchase-order numbers, specific invoice formats, or an invoice-approval workflow. C&H will comply with all such requirements; a copy of MTDC's current outside-counsel guidelines has been requested from Lydia Okafor for review and implementation. Upon receipt, the billing team will confirm compliance and make any necessary adjustments to the invoicing process.

With respect to trust or retainer deposits, it should be confirmed whether MTDC will advance an initial retainer to be held in C&H's client trust account and applied against invoices as rendered, or whether billing will proceed on an open-account basis consistent with the existing institutional relationship between C&H and MTDC. Given the established nature of the client relationship and MTDC's creditworthiness as a quasi-public development corporation, an open-account arrangement is the expected approach, but this should be confirmed with Lydia Okafor.

V. Key Milestones & Staffing Intensity

The following table aligns the principal deal milestones with target dates and identifies the timekeepers expected to be at peak utilization during each milestone period. This schedule will be maintained by Grace Nakamura and updated as the transaction progresses.

The milestone schedule assumes that MTDC, the lenders, and all third-party consultants perform on the timelines set forth above. Material delays in term-sheet execution, lender credit-committee approval, title delivery, or third-party report delivery may shift subsequent milestones and affect staffing intensity and budget.

VI. Risk & Scope Considerations

The following items have been identified as potential risk factors that could result in the engagement exceeding the preliminary budget or requiring adjustments to the staffing plan. Each item is accompanied by an assessment of the potential impact on estimated hours and fees.

1. Intercreditor Complexity. Senior/mezzanine intercreditor negotiations have the potential to be among the most time-intensive aspects of this transaction. Ironclad National Bank, N.A. and Granite Peak Capital Partners, LP have not previously been in an intercreditor relationship on a transaction of this scale, and the absence of established precedent between these two institutions may result in protracted negotiations over cure rights, purchase-option mechanics, standstill periods, default-trigger alignment, and subordination provisions. The budget includes a reasonable allowance for intercreditor work, but an additional buffer of 30–60 hours (principally Fairchild and Nakamura time) should be anticipated if negotiations extend beyond two full rounds of mark-ups.

2. Ground Lease Lender-Consent. The NYCEDC ground lease, executed June 1, 2020 and recorded at CRFN 2020000198762, requires a mortgagee consent and recognition agreement as a condition to the grant of a leasehold mortgage. Negotiations with NYCEDC's legal counsel regarding the form and substance of the recognition agreement, as well as any required amendments or supplements to the ground lease, may add 30 to 50 hours across the team (principally Nakamura, Fontaine, and Dominguez time). This work is included in the current estimates at the lower end of this range, but the upper end would push the engagement past the midpoint of the variability band.

3. NYC Mortgage Recording Tax. The combined New York City and New York State mortgage recording tax on a $475,000,000 senior mortgage represents a significant closing cost for MTDC. If any existing mortgage is of record on the property and is eligible for consolidation under a CEMA structure, the resulting reduction in mortgage recording tax exposure could yield substantial savings for the client. A CEMA-eligibility analysis would require coordination between Sylvia Hartwell and Angela Fontaine with Sentinel Title and may add 10 to 20 hours of incremental work if a CEMA is pursued. Given the potential magnitude of mortgage recording tax savings, this analysis is expected to be worthwhile, but the additional hours should be tracked and reported.

4. ULURP Conditions / Restrictive Declaration Compliance. ULURP approval for the Hudson Yards West Project was granted under application number C 230415 ZSM on October 25, 2023. The ULURP approval may be subject to a restrictive declaration recorded against the property, the terms of which may impose ongoing obligations and conditions on the development. The lenders may require acknowledgment of, and compliance with, the terms of any such restrictive declaration as a condition to closing. While Hargrove & Linden, P.C. will serve as primary counsel on ULURP and restrictive-declaration matters, C&H will be required to review and integrate any relevant restrictive-declaration provisions into the loan documents, including representations, covenants, and events of default. This integration work is factored into the current estimates at a baseline level, but may require additional effort depending on the complexity of the restrictive-declaration requirements.

5. Rating Agency Interaction. If Pinnacle Ratings Group (engagement reference PRG-MTDC-A-2024-1187) requires supplemental information, legal memoranda, or C&H participation in rating-agency presentations in connection with the financing, the resulting effort is estimated at an additional 10 to 15 hours, primarily Douglas Fairchild and Angela Fontaine time. As of the date of this memorandum, no such request has been received, and the preliminary budget does not include an allocation for this contingency.

6. Scope Creep. The preliminary budget is predicated on an assumption of two full rounds of loan-document mark-ups per tier (i.e., two rounds of borrower's comments followed by two rounds of lender's responses on each of the senior and mezzanine document sets). If the negotiation requires additional rounds — whether due to the complexity of open points, changes in the lenders' credit-committee requirements, or modifications to the underlying business terms — professional fees will increase correspondingly. Angela Fontaine, as Billing Partner, will provide an updated estimate to the Staffing Committee and to the client at the midpoint of the engagement (anticipated on or about April 15, 2025) reflecting actual progress against the budget and any revised projections.

VII. Approvals

The staffing plan and preliminary budget set forth in this memorandum are submitted for review and approval by the Real Estate Department Staffing Committee. Upon internal approval, the final budget will be communicated to MTDC (Lydia Okafor, General Counsel) in accordance with Calderwood & Harkness's client-communication protocols for engagements exceeding $1,000,000 in estimated professional fees.

Submitted by:

________________________________________

Angela Fontaine Partner — Billing Partner

Date: February 14, 2025

Approved — Responsible Partner:

________________________________________

Douglas Fairchild Partner

Date: ________

Approved — Department Chair / Staffing Committee:

________________________________________

Name: ________

Title: ________

Date: ________

Note: The final budget will be communicated to MTDC (Lydia Okafor, General Counsel) upon receipt of internal approval, consistent with Calderwood & Harkness LLP's client-communication protocols for engagements with estimated professional fees in excess of $1,000,000. This memorandum is intended solely for internal administrative use and is not to be distributed outside the firm.

TO:	Real Estate Department — Staffing Committee
FROM:	Angela Fontaine, Partner
DATE:	February 14, 2025
RE:	Staffing Plan & Preliminary Budget — Metropolitan Transit Development Corp. / Hudson Yards West Financing (Matter No. 1031-00004)
CONFIDENTIAL:	Attorney Work Product / Internal Administrative Use Only
Timekeeper	Title	2025 Standard Rate ($/hr)
Douglas Fairchild	Partner	$1,850
Angela Fontaine	Partner	$1,750
Sylvia Hartwell	Partner (Tax)	$1,800
Grace Nakamura	Senior Associate (8th year)	$1,250
Rafael Dominguez	Associate (4th year)	$875
Paralegal (TBA)	Paralegal	$425
Timekeeper	Estimated Hours
Fairchild	25
Fontaine	30
Hartwell	35
Nakamura	50
Dominguez	60
Paralegal	15
Phase 1 Total	215
Timekeeper	Estimated Hours
Fairchild	35
Fontaine	55
Hartwell	20
Nakamura	160

Dominguez	130
Paralegal	40
Phase 2 Total	440
Timekeeper	Estimated Hours
Fairchild	60
Fontaine	45
Hartwell	15
Nakamura	180
Dominguez	100
Paralegal	25
Phase 3 Total	425
Timekeeper	Estimated Hours
Fairchild	30
Fontaine	25
Hartwell	10
Nakamura	80
Dominguez	55
Paralegal	40
Phase 4 Total	240
Timekeeper	Total Est. Hours	Rate ($/hr)	Est. Fees ($)
Douglas Fairchild	150	$1,850	$277,500
Angela Fontaine	155	$1,750	$271,250
Sylvia Hartwell	80	$1,800	$144,000
Grace Nakamura	470	$1,250	$587,500
Rafael Dominguez	345	$875	$301,875

Paralegal (TBA)	120	$425	$51,000
TOTALS	1,320	—	$1,633,125
Category	Estimated Amount
ACRIS recording fees (mortgages, assignments, UCC fixture filings)	$15,000
Secretary of State filings (DE formation, NY qualification)	$2,500
UCC search and filing fees	$3,000
Travel & working meals (closing-period, Sentinel Title office)	$4,000
Document reproduction, binding, courier services	$5,000
Deal-room platform (external-facing virtual data room)	$3,500
Miscellaneous (overnight delivery, long-distance, etc.)	$2,000
Total Estimated Disbursements	$35,000
Component	Amount
Professional Fees	$1,633,125
Disbursements	$35,000
Total Estimated Budget	$1,668,125
Milestone	Target Date	Peak Timekeepers
Engagement open / conflict clearance	Feb 12, 2025	Fontaine, Dominguez
SPE formation (HYW Mortgage LLC, HYW Mezzanine LLC)	Feb 28, 2025	Fontaine, Dominguez, Hartwell
Senior term sheet executed	Feb 28, 2025	Fairchild, Nakamura
Mezzanine term sheet executed	Mar 7, 2025	Fairchild, Nakamura
Title search ordered / due diligence launch	Mar 15, 2025	Nakamura, Dominguez
Phase I ESA delivered	Mar 20, 2025	Dominguez (review)
Appraisal delivered	Apr 1, 2025	Fontaine (review)
Zoning opinion delivered	Apr 15, 2025	Fontaine, Nakamura
First draft loan documents distributed	May 1, 2025	All — heavy drafting push

Negotiation rounds	May 1 – Jun 10, 2025	Fairchild, Nakamura (peak)
Pre-closing / closing	Jun 11 – Jun 15, 2025	All timekeepers
Post-closing wrap-up	Jun 16 – Jul 15, 2025	Nakamura, Dominguez, Paralegal

CALDERWOOD & HARKNESS LLP
MEMORANDUM
I. Engagement Overview
On February 12, 2025, this firm opened an engagement on behalf of Metropolitan Transit Development Corp. ("MTDC") in connection with the financing of a large-scale, mixed-use transit-oriented development located at 450 West 34th Street, New York, NY 10001, known as the "Hudson Yards West Project." The total project cost for the Hudson Yards West Project is approximately $920,000,000. Calderwood & Harkness LLP ("C&H") has been retained to represent MTDC in its capacity as sponsor and borrower in connection with the arrangement and documentation of a $675,000,000 construction financing. The financing is structured in two tiers:
(a) a $475,000,000 senior mortgage loan, for which Ironclad National Bank, N.A. will serve as administrative agent and lead arranger; and
(b) a $200,000,000 mezzanine loan, to be provided by Granite Peak Capital Partners, LP as sole mezzanine lender.
The scope of this engagement encompasses the full range of borrower-side legal services customary for a construction financing of this magnitude, including but not limited to: review and negotiation of all loan documents for both tiers of the capital stack, formation of special-purpose borrower entities, title and survey review, due-diligence coordination, opinion-letter oversight, intercreditor agreement negotiation, cash-management structuring, and closing logistics. As part of the engagement scope, C&H will oversee the formation of two Delaware special-purpose entity ("SPE") borrower vehicles — Hudson Yards West Mortgage LLC and Hudson Yards West Mezzanine LLC — each structured with appropriate SPE separateness covenants and independent-director provisions as required by the respective lenders.
The target date for first-draft distribution of all principal loan documents is May 1, 2025. The target closing date is June 15, 2025, which is timed to coincide with the commencement of construction activities for the Hudson Yards West Project. The overall engagement duration is estimated at approximately four months from the date of opening through closing, with post-closing administrative wind-down (including recording confirmations, opinion-letter delivery, and closing-binder assembly) expected to continue through approximately mid-July 2025.
Opposing counsel on this matter has been identified as follows:
•  Senior Lender's Counsel: Clearfield & Associates LLP, represented by Harrison Whitmore (Partner).
•  Mezzanine Lender's Counsel: Voss Richter & Baines LLP ("VRB"), represented by Natasha Ivanovic (Partner).
•  Local Zoning/Land Use Counsel: Hargrove & Linden, P.C., represented by Raymond Cho, has been engaged separately by MTDC to handle all zoning, land-use, and ULURP-related matters and to render the zoning opinion required by the lenders at closing.
The principal client contacts for this engagement are as follows:
•  Lydia Okafor — General Counsel, MTDC (primary legal contact; responsible for engagement oversight and outside-counsel guidelines compliance)
•  Marcus Jennings — Vice President, Real Estate Development, MTDC (project-level business contact; point person on development milestones, construction-budget matters, and contractor coordination)
•  Priya Subramanian — Chief Financial Officer, MTDC (financial contact; responsible for sources-and-uses, draw-request mechanics, financial covenant modeling, and funds-flow coordination)
Day-to-day project coordination from the MTDC side will be handled by Connor McBride, Project Director, who will serve as the operational liaison between the MTDC deal team and C&H for scheduling, document exchange, and status reporting purposes.
II. Staffing Plan
A. Core Deal Team — Assignments & Roles
The staffing plan set forth below is designed to provide MTDC with a cohesive, senior-led team possessing deep experience in complex construction financings, transit-oriented development projects, and multi-tranche capital structures. Each team member's role, principal responsibilities, and anticipated engagement profile are described in detail.
1. Douglas Fairchild — Partner, Real Estate (Responsible Partner)
Douglas Fairchild will serve as the Responsible Partner on this engagement and will maintain overall supervisory authority for the quality and strategic direction of the legal work product delivered to MTDC. His responsibilities include, without limitation:
•  Overall engagement supervision and client relationship management, including periodic status updates to Lydia Okafor and the MTDC executive team;
•  Strategic advice on deal structure, including the allocation of risks between the senior and mezzanine tranches, the design of intercreditor mechanics, and the identification and mitigation of ground-lease-related risks that may affect lender collateral positions;
•  Review of, and sign-off on, all critical-path documents, specifically the senior mortgage loan agreement, the mezzanine loan agreement, and the intercreditor agreement, prior to each round of distribution to opposing counsel;
•  Lead role in negotiations with lenders' counsel on material open points, including default and cure mechanics, cash-sweep triggers, DSCR and LTV covenant calibration, extension conditions, transfer restrictions, guarantor liability scope, and "bad boy" guaranty carve-outs;
•  Attendance at all principal negotiation sessions (whether conducted in person or by videoconference) and personal attendance at the closing; and
•  Engagement with senior client leadership on strategic decisions requiring business judgment, including those relating to deal economics, risk allocation, and go/no-go determinations on material open points.
Mr. Fairchild's engagement is anticipated to be front-loaded during the initial structuring phase (weeks 1 through 4), when fundamental deal-structure decisions are made and the term-sheet framework is finalized, and then closing-intensive during the final two weeks of the engagement. During the mid-cycle period encompassing document drafting and routine diligence activities, his involvement will be lighter and concentrated on periodic document reviews and strategic guidance as needed.
2. Angela Fontaine — Partner, Real Estate (Billing Partner)
Angela Fontaine will serve as Billing Partner and will be responsible for the financial administration and management of this engagement. In addition to her administrative role, Ms. Fontaine will carry substantive responsibility for several important work streams. Her responsibilities include:
•  Budget oversight, billing administration, and matter-level financial management, including monthly accrual reporting, invoice preparation and review, and compliance with MTDC's outside-counsel guidelines and purchase-order requirements;
•  Substantive responsibility for all SPE formation documents, including certificates of formation, limited liability company agreements (incorporating SPE separateness covenants, springing-member provisions, and independent-director requirements), and qualifications to do business in the State of New York for each of Hudson Yards West Mortgage LLC and Hudson Yards West Mezzanine LLC;
•  Substantive responsibility for organizational authority documentation, including board and member resolutions, incumbency certificates, and good-standing certifications;
•  Primary drafting and negotiation responsibility for the guaranty and indemnity instruments, including the recourse carve-out guaranty, the environmental indemnity agreement, and any completion guaranty required by the lenders;
•  Secondary review of the senior mortgage loan agreement and the mezzanine loan agreement, with particular attention to financial covenants, reserve requirements, and draw-request mechanics;
•  Coordination with Hargrove & Linden, P.C. (Raymond Cho) regarding the scope and assumptions of the zoning opinion, and with Sentinel Title regarding title commitment review, survey matters, and endorsement requirements;
•  Service as the primary liaison with the MTDC finance team (Priya Subramanian) on all matters relating to sources-and-uses reconciliation, construction draw mechanics, interest-reserve sizing, and financial covenant modeling (including DSCR, LTV, and debt-yield thresholds); and
•  Oversight of engagement economics, including timely communication to the Staffing Committee regarding any material deviations from the preliminary budget.
3. Grace Nakamura — Senior Associate, Real Estate (Lead Associate)
Grace Nakamura, a senior associate in her eighth year of practice, will serve as Lead Associate and will be the primary driver of day-to-day deal execution. Ms. Nakamura's practice is concentrated in commercial real estate finance, and she has served as lead associate on seven comparable construction-financing transactions within the past three years. Her responsibilities include:
•  Day-to-day deal management, serving as the primary point of contact for opposing counsel (Harrison Whitmore at Clearfield and Natasha Ivanovic at VRB) and for internal deal-team members, and ensuring timely responsiveness on all action items;
•  First-pen drafting of MTDC's (borrower's) comments to the senior mortgage loan agreement, the mezzanine loan agreement, the pledge and security agreement (mezzanine-tier), and all related ancillary documents, including, without limitation, the mortgage, the assignment of leases and rents, the environmental indemnity, the cash-management agreement, the deposit account control agreements, the assignment of construction contracts, and the assignment of plans and specifications;
•  Preparation, coordination, and ongoing management of the master closing checklist, the due-diligence tracker, and the comprehensive document matrix, ensuring that all deliverables are tracked against target dates and that responsible parties are clearly identified;
•  Review and mark-up of the intercreditor and co-lender agreement, the cash management agreement, and all deposit account control agreements, with attention to waterfall mechanics, cure rights, purchase options, and default-trigger alignment between the senior and mezzanine tiers;
•  Oversight of third-party opinion letters, including coordination with C&H's opinion committee regarding the scope and form of the borrower's counsel opinion, review of lender's counsel opinion drafts, and coordination with Hargrove & Linden regarding the zoning opinion;
•  Review and analysis of the title commitment (STN-2025-MH-04178) issued by Sentinel Title, including evaluation of all Schedule B exceptions, identification of required curative actions, negotiation of endorsement requirements, and review of the ALTA survey for compliance with lender requirements;
•  Management of all pre-closing and closing logistics, including preparation of signature packages, bring-down certifications and compliance certificates, the closing memorandum, and the funds-flow memorandum;
•  Coordination with Cobalt Construction Group ("CCG") and MTDC's construction team regarding the assignment-of-contracts collateral, review of the guaranteed-maximum-price ("GMP") construction contract (CCG-HYW-2025-001) for lender-required provisions (including lender-as-additional-insured, collateral-assignment-consent, and step-in rights), and negotiation of any required amendments or side letters to the GMP contract; and
•  Supervision of Rafael Dominguez on all assignments delegated to the working-associate level.
Ms. Nakamura's engagement will be sustained and intensive throughout all phases of the transaction, with peak hours anticipated during the document-preparation phase (Phase 2) and the negotiation-and-finalization phase (Phase 3).
4. Rafael Dominguez — Associate, Real Estate (Working Associate)
Rafael Dominguez, a fourth-year associate in the Real Estate department, will serve as the Working Associate on this engagement. Mr. Dominguez has contributed to multiple real estate finance transactions and has developed particular proficiency in entity-formation work, due-diligence coordination, and closing mechanics. His responsibilities include:
•  Drafting of all SPE formation documents, including certificates of formation filed with the Delaware Secretary of State, limited liability company agreements for each of Hudson Yards West Mortgage LLC and Hudson Yards West Mezzanine LLC (in coordination with Angela Fontaine), and applications for qualification to do business in the State of New York filed with the New York Department of State;
•  First-level review and abstracting of the ground lease between the New York City Economic Development Corporation ("NYCEDC") and MTDC (recorded at CRFN 2020000198762), with particular attention to mortgagee-consent requirements, recognition-agreement provisions, casualty and condemnation clauses, assignment restrictions, and estoppel-certificate requirements, as well as review of all existing encumbrances of record;
•  Preparation, assembly, and tracking of all due-diligence deliverables required by the lenders, including but not limited to organizational documents, evidence of authority (board and member resolutions), certificates of good standing, insurance certificates and binders, environmental reports (Phase I Environmental Site Assessment, report number AEC-NY-25-0337), the appraisal (Bainbridge Appraisal Group, report number BAG-25-1092), the property condition assessment ("PCA"), seismic assessments (if applicable), flood-zone certifications, and zoning compliance materials;
•  Drafting of officer's certificates, secretary's certificates, incumbency certificates, borrower's closing certificates, and solvency certificates as required by the loan documents;
•  Preparation of UCC-1 financing statements and fixture filings, and coordination with Sentinel Title on the recording and filing of all instruments in the applicable filing offices (New York City Register / ACRIS and the Delaware Secretary of State);
•  Document management responsibilities, including maintenance of the C&H deal room and external-facing virtual data room, strict version control over all loan documents and ancillary instruments, and maintenance of distribution logs documenting all transmissions of drafts to opposing counsel and the client;
•  Legal research assignments as directed by Grace Nakamura, including research on provisions of the New York Real Property Actions and Proceedings Law ("RPAPL"), New York City mortgage recording tax calculations and exemptions, Delaware LLC law (including issues relating to SPE separateness covenants, springing-member mechanics, and independent-director qualifications), and lender requirements for bankruptcy-remoteness and non-consolidation opinions; and
•  General support for the deal team across all phases, including pre-closing and closing assistance.
5. Sylvia Hartwell — Partner, Tax (Tax Specialist)
Sylvia Hartwell, a partner in the firm's Tax department, will serve as the Tax Specialist on this engagement, providing advice on all tax-related aspects of the transaction. Ms. Hartwell has extensive experience advising on the tax dimensions of complex real estate financings in the New York metropolitan area. Her responsibilities include:
•  Tax structuring advice on the formation and capitalization of the SPE borrower entities (Hudson Yards West Mortgage LLC and Hudson Yards West Mezzanine LLC), including the tax characterization of capital contributions, the treatment of intercompany advances, and the implications of the organizational structure for federal and state tax purposes;
•  Detailed review and analysis of New York City mortgage recording tax treatment and optimization strategies, including coordination of filings through ACRIS (Automated City Register Information System), calculation of applicable rates on the $475,000,000 senior mortgage, and analysis of eligibility for a Consolidation, Extension, and Modification Agreement ("CEMA") structure if any existing mortgage on the property can be consolidated to reduce mortgage recording tax exposure;
•  Analysis of New York City transfer tax (including Real Property Transfer Tax, or "RPTT") implications, if applicable to any aspect of the transaction;
•  Advice regarding the status and implications of any New York City real property tax exemption or abatement applications (including ICAP, Article 11, or other programs) that may be relevant to the Hudson Yards West Project, and the integration of any such exemption or abatement into the financial covenants and representations in the loan agreements;
•  Review of all tax-related provisions in the senior mortgage loan agreement and the mezzanine loan agreement, including provisions relating to tax gross-ups, withholding-tax obligations, FATCA compliance, SOFR-related tax matters (including transition provisions from legacy benchmark rates), and tax-indemnity clauses;
•  Analysis of MTDC's tax-exempt-instrumentality status (to the extent applicable) and the implications of such status for borrower-level tax obligations and lender-side regulatory and tax considerations; and
•  Brief closing review to confirm that all tax-related deliverables have been satisfied and that the closing mechanics (including ACRIS recording and mortgage recording tax payment) are properly structured.
Ms. Hartwell's engagement is anticipated to be concentrated during weeks 2 through 6 of the transaction (approximately February 24 through March 28, 2025), during which the structuring decisions with the greatest tax impact will be made and the tax-structure memorandum will be prepared. Thereafter, her involvement will consist of periodic consultations as tax-related issues arise in the document-negotiation process, followed by a brief review of closing-related tax items in the days immediately preceding the target closing date.
B. Support Staff & Resources
One paralegal will be assigned from the Real Estate paralegal pool to support the deal team. The assigned paralegal will be responsible for document management (including maintenance of the physical and virtual deal rooms), closing binder assembly, preparation and submission of ACRIS filings, Secretary of State filings, UCC filings, and general deal-room administration tasks. The estimated paralegal commitment for this engagement is 80 to 120 hours, distributed across all phases of the transaction with peak utilization expected during the closing and post-closing phases.
In addition, the staffing plan contemplates the potential need for one additional junior associate drawn from the Real Estate group during the closing week (estimated June 11–15, 2025) to assist with signature-page coordination, escrow-instruction preparation, and post-closing filing logistics. The estimated commitment for this additional resource, if activated, is approximately 20 to 40 hours. This contingency resource will be drawn from the department's general availability and will not be included in the preliminary budget unless and until the need is confirmed and the resource is formally activated. Any such activation will be communicated to the Staffing Committee in advance.
III. Hourly Rates & Estimated Hours
A. Standard Billing Rates (2025)
The following table sets forth the standard billing rates for each timekeeper assigned to this engagement, reflecting Calderwood & Harkness's published rate schedule for calendar year 2025:
These rates reflect C&H's standard published rates for 2025 and are consistent with the rates communicated to MTDC at the time of engagement. As of the date of this memorandum, no alternative-fee arrangement, blended rate, fixed fee, or success-based fee structure has been discussed with the client for this engagement. It should be noted, however, that MTDC's outside-counsel guidelines (a copy of which has been requested from Lydia Okafor but not yet received in final form) may require a rate holdback or volume discount. Ms. Okafor has provided a preliminary indication that standard rates are acceptable given the existing institutional relationship between C&H and MTDC, but this should be confirmed upon receipt and review of the final outside-counsel guidelines. Any rate accommodation will be reflected in an updated budget and communicated to the Staffing Committee promptly.
B. Estimated Hours by Phase
The following section presents estimated hours for each timekeeper organized by phase of the transaction. These estimates are based on comparable construction-financing engagements handled by the Real Estate department, adjusted for the specific characteristics of the Hudson Yards West Project, including the two-tier capital structure, the ground-lease overlay, and the anticipated complexity of intercreditor negotiations.
Phase 1 — Engagement Set-Up, Structuring & SPE Formation (February 12 – March 14, 2025)
Phase 1 encompasses all activities necessary to launch the engagement and establish the structural framework for the financing. Key activities during this phase include: completion of the firm's conflict-clearance process (including laterals review and cross-border screening); finalization and execution of the engagement letter with MTDC; formation and organization of the two Delaware SPE borrower entities (Hudson Yards West Mortgage LLC and Hudson Yards West Mezzanine LLC), including preparation of certificates of formation, limited liability company agreements with full SPE separateness covenant packages, designation of independent directors, and applications for qualification to do business in the State of New York; initial analysis of the senior and mezzanine term sheets to identify material structural issues, open business points, and departures from market norms; participation in initial structuring calls with MTDC, the senior lender, and the mezzanine lender; preparation of a tax-structure memorandum by Sylvia Hartwell addressing SPE capitalization, mortgage recording tax exposure and optimization strategies, and RPTT considerations; initial review and abstracting of the ground lease (CRFN 2020000198762); and placement of orders for the title search, survey, and related diligence items, together with a preliminary review of materials received.
Phase 2 — Due Diligence & Document Preparation (March 15 – April 30, 2025)
Phase 2 is the most intensive drafting and diligence phase of the engagement. Activities during this period include: comprehensive review of the title commitment issued by Sentinel Title (commitment number STN-2025-MH-04178), including analysis of all Schedule B-I requirements and Schedule B-II exceptions, identification of curative items, and negotiation of endorsement requirements (including comprehensive, zoning, survey, access, contiguity, and environmental-lien endorsements as applicable); review of the ALTA/NSPS survey for compliance with the lenders' survey requirements and identification of any boundary, encroachment, or easement issues; review of the Phase I Environmental Site Assessment prepared by the environmental consultant (report number AEC-NY-25-0337), with escalation to the client of any recognized environmental conditions requiring further investigation or remediation; review of the appraisal prepared by Bainbridge Appraisal Group (report number BAG-25-1092) for consistency with the lenders' valuation requirements and covenant compliance; coordination with Hargrove & Linden, P.C. (Raymond Cho) regarding the scope, assumptions, and qualifications of the zoning opinion, and review of draft zoning opinion deliverables; assembly and review of all organizational due-diligence materials, including formation documents, operating agreements, good-standing certificates, and evidence of authority for MTDC, its affiliates, and the SPE borrower entities; first-pen drafting of borrower's comments to all loan documents for both tiers of the capital stack (senior mortgage loan agreement, mezzanine loan agreement, pledge and security agreement, mortgage, assignment of leases and rents, environmental indemnity, recourse carve-out guaranty, completion guaranty, cash-management agreement, deposit account control agreements, and ancillary documents); initial review and analysis of the intercreditor agreement as circulated by senior lender's counsel; review of insurance specifications with MTDC's insurance broker, Castleton Risk Advisors, to ensure compliance with lender requirements; review of the GMP construction contract with Cobalt Construction Group (contract number CCG-HYW-2025-001) for lender-required provisions; and structuring and documentation of the cash-management and lockbox arrangements, including waterfall mechanics and trigger events.
Phase 3 — Negotiation & Document Finalization (May 1 – June 10, 2025)
Phase 3 encompasses the full negotiation cycle for all transaction documents. This period is expected to be the most demanding from a partner-level standpoint, as material open points are resolved through direct engagement with lenders' counsel. Key activities include: iterative negotiation rounds with Clearfield & Associates (Harrison Whitmore) on the senior loan documents and with Voss Richter & Baines (Natasha Ivanovic) on the mezzanine loan documents; turn-by-turn mark-ups of all principal agreements and ancillary instruments; participation in scheduled negotiation sessions, whether conducted in person at C&H offices or by videoconference; resolution of open business points escalated from the drafting process, including negotiation of financial covenant levels (DSCR, LTV, and debt-yield thresholds), cash-sweep and cash-trap trigger mechanics, extension-option conditions, transfer-restriction carve-outs, and the scope of recourse carve-out guaranty triggers; detailed negotiation and finalization of the intercreditor agreement, including cure rights, purchase-option mechanics, standstill periods, default-trigger alignment, and casualty/condemnation allocation; finalization of guaranty and indemnity instruments; coordination of opinion-letter scope, forms, and qualifications with C&H's opinion committee and with lenders' counsel; pre-closing title updates and bring-down searches ordered from Sentinel Title; and preparation of closing checklists reflecting final document inventory and outstanding deliverables.
Phase 4 — Closing & Post-Closing (June 11 – July 15, 2025)
Phase 4 covers all closing and post-closing activities necessary to consummate the financing and complete the engagement. Key activities include: final execution of the closing checklist, confirming satisfaction or waiver of all conditions precedent to funding; attendance at pre-closing meetings and the closing itself, to be conducted at Sentinel Title's offices at 140 Broadway, New York, NY; collection and coordination of all signature pages (original and counterpart), including management of any escrow-signature arrangements; preparation and coordination of the funds-flow memorandum and real-time coordination with all parties (including lenders, title company, and MTDC treasury) on funding mechanics and wire-transfer logistics; recording of the mortgage, any consolidation or modification instruments, and assignments through ACRIS, including calculation and payment of applicable New York City and New York State mortgage recording taxes; filing of UCC-1 financing statements with the Delaware Secretary of State and UCC fixture filings with the New York City Register; delivery of all opinion letters (borrower's counsel opinion, local counsel zoning opinion, tax opinion) to the lenders; procurement and distribution of recording confirmations and filed-stamped copies of all recorded instruments; assembly and distribution of closing binders (physical and electronic) to all parties; and final engagement wrap-up, including deactivation of the virtual data room, archiving of the matter file, and preparation of the final invoice.
C. Total Estimated Hours — Summary
The following table summarizes the aggregate estimated hours and fees for each timekeeper across all four phases of the engagement:
These estimates carry a ±15% variability margin, yielding a potential fee range of approximately $1,388,000 to $1,878,000. Variability is driven principally by the following factors: (a) the complexity and duration of the intercreditor negotiation between Ironclad National Bank and Granite Peak Capital Partners; (b) lender-side document turnaround times, which are outside C&H's control and can compress or extend the negotiation cycle; and (c) the scope and nature of title and environmental exceptions requiring resolution, which may necessitate additional legal analysis, curative work, or endorsement negotiations. The budget will be monitored on an ongoing basis, and any material deviation will be communicated to the Staffing Committee and to the client promptly.
IV. Preliminary Budget
A. Estimated Professional Fees
Based on the staffing plan and estimated hours set forth in Section III above, the total estimated professional fees for the engagement are $1,633,125. This estimate is subject to a ±15% variability margin based on the factors identified above, yielding an estimated fee range of approximately $1,388,000 to $1,878,000. The midpoint estimate of $1,633,125 represents the department's best current assessment of the likely fee outcome assuming a transaction proceeding on a customary timeline and without unusual complications beyond those identified in Section VI below.
B. Estimated Disbursements
In addition to professional fees, the following disbursement categories are anticipated in connection with this engagement:
Disbursement estimates are based on C&H's experience with comparable transactions and are subject to adjustment as actual costs are incurred. All disbursements will be billed at cost.
C. Total Preliminary Budget
The preliminary budget set forth above does not include the following categories of costs and expenses, which are either borne directly by MTDC or billed under separate engagements:
(a) Fees of local zoning and land use counsel (Hargrove & Linden, P.C.), which are the subject of a separate engagement between MTDC and that firm;
(b) Title insurance premiums, escrow fees, and related charges payable to Sentinel Title in connection with the issuance of the lender's title insurance policy and any owner's policy;
(c) New York City and New York State mortgage recording taxes, which on the $475,000,000 senior mortgage loan will constitute a significant closing cost for the client (estimated at applicable combined rates);
(d) Appraisal, environmental, engineering, and other third-party consultant fees (including fees of Bainbridge Appraisal Group, the Phase I ESA consultant, and any property condition assessment or seismic consultant); and
(e) Any post-closing litigation, workout, enforcement, or additional-phase services that may be required following the closing of the financing, which would be scoped and budgeted separately if and when such services are requested.
D. Billing Arrangements
Billing for this engagement will proceed on C&H's standard monthly-cycle basis, with invoices rendered within approximately fifteen days following the close of each calendar month. Payment terms are net thirty (30) days from the date of invoice, consistent with C&H's standard billing policies.
MTDC's outside-counsel guidelines may require the use of purchase-order numbers, specific invoice formats, or an invoice-approval workflow. C&H will comply with all such requirements; a copy of MTDC's current outside-counsel guidelines has been requested from Lydia Okafor for review and implementation. Upon receipt, the billing team will confirm compliance and make any necessary adjustments to the invoicing process.
With respect to trust or retainer deposits, it should be confirmed whether MTDC will advance an initial retainer to be held in C&H's client trust account and applied against invoices as rendered, or whether billing will proceed on an open-account basis consistent with the existing institutional relationship between C&H and MTDC. Given the established nature of the client relationship and MTDC's creditworthiness as a quasi-public development corporation, an open-account arrangement is the expected approach, but this should be confirmed with Lydia Okafor.
V. Key Milestones & Staffing Intensity
The following table aligns the principal deal milestones with target dates and identifies the timekeepers expected to be at peak utilization during each milestone period. This schedule will be maintained by Grace Nakamura and updated as the transaction progresses.
The milestone schedule assumes that MTDC, the lenders, and all third-party consultants perform on the timelines set forth above. Material delays in term-sheet execution, lender credit-committee approval, title delivery, or third-party report delivery may shift subsequent milestones and affect staffing intensity and budget.
VI. Risk & Scope Considerations
The following items have been identified as potential risk factors that could result in the engagement exceeding the preliminary budget or requiring adjustments to the staffing plan. Each item is accompanied by an assessment of the potential impact on estimated hours and fees.
1. Intercreditor Complexity. Senior/mezzanine intercreditor negotiations have the potential to be among the most time-intensive aspects of this transaction. Ironclad National Bank, N.A. and Granite Peak Capital Partners, LP have not previously been in an intercreditor relationship on a transaction of this scale, and the absence of established precedent between these two institutions may result in protracted negotiations over cure rights, purchase-option mechanics, standstill periods, default-trigger alignment, and subordination provisions. The budget includes a reasonable allowance for intercreditor work, but an additional buffer of 30–60 hours (principally Fairchild and Nakamura time) should be anticipated if negotiations extend beyond two full rounds of mark-ups.
2. Ground Lease Lender-Consent. The NYCEDC ground lease, executed June 1, 2020 and recorded at CRFN 2020000198762, requires a mortgagee consent and recognition agreement as a condition to the grant of a leasehold mortgage. Negotiations with NYCEDC's legal counsel regarding the form and substance of the recognition agreement, as well as any required amendments or supplements to the ground lease, may add 30 to 50 hours across the team (principally Nakamura, Fontaine, and Dominguez time). This work is included in the current estimates at the lower end of this range, but the upper end would push the engagement past the midpoint of the variability band.
3. NYC Mortgage Recording Tax. The combined New York City and New York State mortgage recording tax on a $475,000,000 senior mortgage represents a significant closing cost for MTDC. If any existing mortgage is of record on the property and is eligible for consolidation under a CEMA structure, the resulting reduction in mortgage recording tax exposure could yield substantial savings for the client. A CEMA-eligibility analysis would require coordination between Sylvia Hartwell and Angela Fontaine with Sentinel Title and may add 10 to 20 hours of incremental work if a CEMA is pursued. Given the potential magnitude of mortgage recording tax savings, this analysis is expected to be worthwhile, but the additional hours should be tracked and reported.
4. ULURP Conditions / Restrictive Declaration Compliance. ULURP approval for the Hudson Yards West Project was granted under application number C 230415 ZSM on October 25, 2023. The ULURP approval may be subject to a restrictive declaration recorded against the property, the terms of which may impose ongoing obligations and conditions on the development. The lenders may require acknowledgment of, and compliance with, the terms of any such restrictive declaration as a condition to closing. While Hargrove & Linden, P.C. will serve as primary counsel on ULURP and restrictive-declaration matters, C&H will be required to review and integrate any relevant restrictive-declaration provisions into the loan documents, including representations, covenants, and events of default. This integration work is factored into the current estimates at a baseline level, but may require additional effort depending on the complexity of the restrictive-declaration requirements.
5. Rating Agency Interaction. If Pinnacle Ratings Group (engagement reference PRG-MTDC-A-2024-1187) requires supplemental information, legal memoranda, or C&H participation in rating-agency presentations in connection with the financing, the resulting effort is estimated at an additional 10 to 15 hours, primarily Douglas Fairchild and Angela Fontaine time. As of the date of this memorandum, no such request has been received, and the preliminary budget does not include an allocation for this contingency.
6. Scope Creep. The preliminary budget is predicated on an assumption of two full rounds of loan-document mark-ups per tier (i.e., two rounds of borrower's comments followed by two rounds of lender's responses on each of the senior and mezzanine document sets). If the negotiation requires additional rounds — whether due to the complexity of open points, changes in the lenders' credit-committee requirements, or modifications to the underlying business terms — professional fees will increase correspondingly. Angela Fontaine, as Billing Partner, will provide an updated estimate to the Staffing Committee and to the client at the midpoint of the engagement (anticipated on or about April 15, 2025) reflecting actual progress against the budget and any revised projections.
VII. Approvals
The staffing plan and preliminary budget set forth in this memorandum are submitted for review and approval by the Real Estate Department Staffing Committee. Upon internal approval, the final budget will be communicated to MTDC (Lydia Okafor, General Counsel) in accordance with Calderwood & Harkness's client-communication protocols for engagements exceeding $1,000,000 in estimated professional fees.
Submitted by:
________________________________________
Angela Fontaine Partner — Billing Partner
Date: February 14, 2025
Approved — Responsible Partner:
________________________________________
Douglas Fairchild Partner
Date: ________
Approved — Department Chair / Staffing Committee:
________________________________________
Name: ________
Title: ________
Date: ________
Note: The final budget will be communicated to MTDC (Lydia Okafor, General Counsel) upon receipt of internal approval, consistent with Calderwood & Harkness LLP's client-communication protocols for engagements with estimated professional fees in excess of $1,000,000. This memorandum is intended solely for internal administrative use and is not to be distributed outside the firm.
TO: | Real Estate Department — Staffing Committee
FROM: | Angela Fontaine, Partner
DATE: | February 14, 2025
RE: | Staffing Plan & Preliminary Budget — Metropolitan Transit Development Corp. / Hudson Yards West Financing (Matter No. 1031-00004)
CONFIDENTIAL: | Attorney Work Product / Internal Administrative Use Only
Timekeeper | Title | 2025 Standard Rate ($/hr)
Douglas Fairchild | Partner | $1,850
Angela Fontaine | Partner | $1,750
Sylvia Hartwell | Partner (Tax) | $1,800
Grace Nakamura | Senior Associate (8th year) | $1,250
Rafael Dominguez | Associate (4th year) | $875
Paralegal (TBA) | Paralegal | $425
Timekeeper | Estimated Hours
Fairchild | 25
Fontaine | 30
Hartwell | 35
Nakamura | 50
Dominguez | 60
Paralegal | 15
Phase 1 Total | 215
Timekeeper | Estimated Hours
Fairchild | 35
Fontaine | 55
Hartwell | 20
Nakamura | 160
Dominguez | 130
Paralegal | 40
Phase 2 Total | 440
Timekeeper | Estimated Hours
Fairchild | 60
Fontaine | 45
Hartwell | 15
Nakamura | 180
Dominguez | 100
Paralegal | 25
Phase 3 Total | 425
Timekeeper | Estimated Hours
Fairchild | 30
Fontaine | 25
Hartwell | 10
Nakamura | 80
Dominguez | 55
Paralegal | 40
Phase 4 Total | 240
Timekeeper | Total Est. Hours | Rate ($/hr) | Est. Fees ($)
Douglas Fairchild | 150 | $1,850 | $277,500
Angela Fontaine | 155 | $1,750 | $271,250
Sylvia Hartwell | 80 | $1,800 | $144,000
Grace Nakamura | 470 | $1,250 | $587,500
Rafael Dominguez | 345 | $875 | $301,875
Paralegal (TBA) | 120 | $425 | $51,000
TOTALS | 1,320 | — | $1,633,125
Category | Estimated Amount
ACRIS recording fees (mortgages, assignments, UCC fixture filings) | $15,000
Secretary of State filings (DE formation, NY qualification) | $2,500
UCC search and filing fees | $3,000
Travel & working meals (closing-period, Sentinel Title office) | $4,000
Document reproduction, binding, courier services | $5,000
Deal-room platform (external-facing virtual data room) | $3,500
Miscellaneous (overnight delivery, long-distance, etc.) | $2,000
Total Estimated Disbursements | $35,000
Component | Amount
Professional Fees | $1,633,125
Disbursements | $35,000
Total Estimated Budget | $1,668,125
Milestone | Target Date | Peak Timekeepers
Engagement open / conflict clearance | Feb 12, 2025 | Fontaine, Dominguez
SPE formation (HYW Mortgage LLC, HYW Mezzanine LLC) | Feb 28, 2025 | Fontaine, Dominguez, Hartwell
Senior term sheet executed | Feb 28, 2025 | Fairchild, Nakamura
Mezzanine term sheet executed | Mar 7, 2025 | Fairchild, Nakamura
Title search ordered / due diligence launch | Mar 15, 2025 | Nakamura, Dominguez
Phase I ESA delivered | Mar 20, 2025 | Dominguez (review)
Appraisal delivered | Apr 1, 2025 | Fontaine (review)
Zoning opinion delivered | Apr 15, 2025 | Fontaine, Nakamura
First draft loan documents distributed | May 1, 2025 | All — heavy drafting push
Negotiation rounds | May 1 – Jun 10, 2025 | Fairchild, Nakamura (peak)
Pre-closing / closing | Jun 11 – Jun 15, 2025 | All timekeepers
Post-closing wrap-up | Jun 16 – Jul 15, 2025 | Nakamura, Dominguez, Paralegal

CALDERWOOD & HARKNESS LLP

MEMORANDUM

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