PROJECT LOAN AGREEMENT
dated as of
June 15, 2025
among
HUDSON YARDS WEST MORTGAGE LLC, a Delaware limited liability company, as Borrower,
IRONCLAD NATIONAL BANK, N.A., a national banking association, as Administrative Agent,
and
THE LENDERS PARTY HERETO FROM TIME TO TIME
Project: 450 West 34th Street, New York, New York 10001
Senior Mortgage Loan: $475,000,000
This Project Loan Agreement, together with the Building Loan Agreement of even date herewith among the same parties, evidences the full $475,000,000 Senior Mortgage Loan. The Building Loan Agreement and this Project Loan Agreement are separate agreements securing separate obligations under separate mortgages, but are cross-defaulted and cross-collateralized as described herein.
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RECITALS
WHEREAS, Borrower is the holder of a leasehold interest in certain real property located at 450 West 34th Street, New York, New York (Block 729, Lots 1, 5, 12, 15, Borough of Manhattan) pursuant to that certain Ground Lease dated June 1, 2020, between NYC Economic Development Corporation ("NYCEDC"), as ground lessor, and Metropolitan Transit Development Corp. ("MTDC" or "Sponsor"), as ground lessee, recorded in the Office of the City Register of the City of New York as CRFN 2020000198762, and subsequently subleased and assigned to Borrower pursuant to certain sublease and assignment documents delivered in connection therewith;
WHEREAS, Borrower intends to develop on the Property a mixed-use project consisting of commercial office space, retail space, and transit-infrastructure improvements (the "Project"), with a total project cost of approximately Nine Hundred Twenty Million Dollars ($920,000,000);
WHEREAS, the Lenders have agreed to provide a senior mortgage loan in the aggregate principal amount of Four Hundred Seventy-Five Million Dollars ($475,000,000) (the "Senior Mortgage Loan"), which is being advanced in two tranches: (a) a building loan (the "Building Loan") evidenced by the Building Loan Agreement dated as of the date hereof among Borrower, Agent, and the Lenders, and (b) a project loan (the "Project Loan") evidenced by this Agreement, each secured by a separate mortgage on the Property, in accordance with Sections 2 and 22 of the Lien Law of the State of New York;
WHEREAS, the Project Loan is being made to finance costs and expenses of the Project other than costs of "improvement" within the meaning of Section 2(4) of the New York Lien Law, including, without limitation: land acquisition costs, interest reserves, financing costs, origination fees, title and recording charges, legal fees, real estate taxes and insurance during construction, ground rent during construction, development management fees, marketing and leasing costs, and other soft costs as more particularly set forth in the Project Budget attached hereto as Exhibit A;
WHEREAS, simultaneously herewith, Borrower and Agent are entering into the Building Loan Agreement, the Building Loan Mortgage, the Project Loan Mortgage, the Guaranty of Recourse Obligations, the Completion Guaranty, the Environmental Indemnity, the Cash Management Agreement, the Assignment of Contracts, the Pledge Agreement, and the other Loan Documents;
WHEREAS, the Project Loan and the Building Loan are cross-defaulted and cross-collateralized, with separate mortgages recorded to preserve lien priority under the New York Lien Law; and
WHEREAS, the Mezzanine Loan in the amount of Two Hundred Million Dollars ($200,000,000) is being provided by Granite Peak Capital Partners, LP to Hudson Yards West Mezzanine LLC, subject to the terms and conditions of the Mezzanine Intercreditor Agreement executed simultaneously herewith;
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1 — DEFINITIONS AND INTERPRETATION
Section 1.1 — Definitions
As used in this Agreement, the following terms shall have the meanings set forth below:
"Advance" means each disbursement of Project Loan proceeds made by Agent on behalf of the Lenders to or for the account of Borrower pursuant to this Agreement.
"Agent" means Ironclad National Bank, N.A., a national banking association, in its capacity as administrative agent for the Lenders under this Agreement and the other Loan Documents, and any successor administrative agent appointed in accordance with Section 13.5.
"Appraisal" means the appraisal of the Property prepared by Broadstreet Appraisal Group, Inc. (File No. BAG-25-1092) dated April 1, 2025, a copy of which has been delivered to Agent, determining an as-stabilized appraised value of One Billion Twenty-Five Million Dollars ($1,025,000,000), and any updates or replacements thereof obtained in accordance with the terms of this Agreement.
"Assignment of Contracts" means the Assignment of Contracts, Licenses, Permits, and Approvals executed by Borrower in favor of Agent, dated as of the date hereof, assigning to Agent (as additional security) Borrower's right, title, and interest in and to the GMP Contract, architect's agreements, development agreements, management agreements, permits, and other project contracts.
"Borrower" means Hudson Yards West Mortgage LLC, a Delaware limited liability company.
"Building Loan" means the building loan in the principal amount allocated to costs of "improvement" (within the meaning of Lien Law Section 2(4)) made pursuant to the Building Loan Agreement, which, together with this Project Loan, constitutes the Senior Mortgage Loan in the aggregate principal amount of Four Hundred Seventy-Five Million Dollars ($475,000,000).
"Building Loan Agreement" means the Building Loan Agreement dated as of the date hereof among Borrower, Agent, and the Lenders, as the same may be amended, restated, supplemented, or otherwise modified from time to time.
"Building Loan Budget" means the budget for "improvement" costs (within the meaning of Lien Law Section 2(4)) attached as an exhibit to the Building Loan Agreement, as the same may be modified from time to time with the prior written consent of Agent.
"Building Loan Mortgage" means the Building Loan Mortgage, Assignment of Leases and Rents, Security Agreement, and Fixture Filing, dated as of the date hereof, made by Borrower in favor of Agent (for the benefit of the Lenders), encumbering the Property and securing the Building Loan, recorded simultaneously herewith in the Office of the City Register of the City of New York, as the same may be amended, restated, supplemented, or otherwise modified from time to time.
"Building Loan Note" means the promissory note or notes evidencing the Building Loan, executed by Borrower in favor of the Lenders, substantially in the form attached to the Building Loan Agreement.
"Business Day" means any day other than a Saturday, a Sunday, or a day on which commercial banks in New York, New York are authorized or required by law, regulation, or executive order to close. If a payment or action is required to be made or taken on a day that is not a Business Day, such payment or action shall be made or taken on the next succeeding Business Day, with interest continuing to accrue during such extension.
"Cash Management Agreement" means the Cash Management Agreement dated as of the date hereof among Borrower, Agent, and the Cash Management Bank, governing the lockbox account, the cash management account, and the application of revenues from the Property, as the same may be amended, restated, supplemented, or otherwise modified from time to time.
"Cash Management Bank" means Ironclad National Bank, N.A., in its capacity as the depository bank under the Cash Management Agreement.
"Cash Sweep" means the sweep of excess cash flow during a Cash Sweep Period as described in Section 4.6.
"Cash Sweep Period" means any period during which a Cash Sweep Trigger is in effect, commencing on the date Agent delivers notice thereof to Borrower and continuing until such Cash Sweep Trigger has been cured for two (2) consecutive calendar quarters.
"Cash Sweep Trigger" means the occurrence of any of the following: (i) the combined DSCR falling below 1.10x for any testing period, or (ii) the occurrence and continuance of an Event of Default.
"Closing Date" means June 15, 2025.
"Combined Loan" or "Senior Mortgage Loan" means, collectively, the Building Loan and the Project Loan, in the aggregate principal amount of Four Hundred Seventy-Five Million Dollars ($475,000,000).
"Commitment" means, as to each Lender, such Lender's commitment to make Advances of the Project Loan in the amount set forth opposite such Lender's name on Schedule 2.1, as the same may be reduced or terminated in accordance with this Agreement.
"Completion Guaranty" means the Completion Guaranty dated as of the date hereof, executed by MTDC in favor of Agent (for the benefit of the Lenders), guaranteeing the lien-free completion of the Project in accordance with the Plans and Specifications.
"Construction Consultant" means, initially, Trident Structural Engineers, P.C. (Dr. Rajesh Banerjee, PE, principal), or such replacement construction consultant as Agent may designate from time to time.
"Contractor" means Cobalt Construction Group, Inc., the general contractor engaged by Borrower under the GMP Contract, or any replacement general contractor approved in writing by Agent.
"Cure Contribution" has the meaning set forth in Section 10.4.
"DSCR" means the Debt Service Coverage Ratio, defined as Net Operating Income for the applicable trailing twelve-month period (or such shorter period as may be annualized in accordance with the terms hereof) divided by total debt service (including interest and any scheduled amortization) for the same period on the Combined Loan (and, if tested on a combined basis, the Mezzanine Loan), as determined by Agent. The minimum DSCR covenant under this Agreement is 1.20x.
"Debt Yield" means the ratio of annualized Net Operating Income to the aggregate outstanding principal balance of the Combined Loan, expressed as a percentage. The minimum Debt Yield covenant under this Agreement is 8.0%.
"Default Rate" means a rate per annum equal to the Interest Rate then in effect plus four percent (4.00%) (i.e., 400 basis points).
"Eligible Assignee" means any Person that is (a) a Lender, (b) an affiliate of a Lender, (c) a commercial bank, savings institution, insurance company, pension fund, or other institutional investor that is regularly engaged in the business of making or holding commercial real estate loans, or (d) any other Person approved by Agent (such approval not to be unreasonably withheld), in each case, other than Borrower, any Guarantor, or any of their respective affiliates.
"Environmental Indemnity" means the Environmental Indemnity Agreement dated as of the date hereof, executed by Borrower and MTDC in favor of Agent (for the benefit of the Lenders).
"Environmental Laws" means all federal, state, and local laws, statutes, ordinances, rules, regulations, and orders relating to pollution, protection of the environment, natural resources, or human health and safety, including, without limitation, the Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C. §9601 et seq.), the Resource Conservation and Recovery Act (42 U.S.C. §6901 et seq.), the Toxic Substances Control Act (15 U.S.C. §2601 et seq.), and corresponding state and local laws.
"Environmental Report" means the Phase I Environmental Site Assessment prepared by Apex Environmental Consultants, Inc. (Project No. AEC-NY-25-0337) dated March 20, 2025, together with any updates, supplements, or Phase II assessments delivered to Agent.
"Event of Default" has the meaning set forth in Article 10.
"Exit Fee" means the fee payable upon prepayment or repayment described in Section 2.8.
"Extension Options" means the two successive one-year extension options described in Section 2.6.
"Final Extended Maturity Date" means June 15, 2031, being the last day of the second Extension Option period.
"First Extension Maturity Date" means June 15, 2030, being the last day of the first Extension Option period.
"GAAP" means generally accepted accounting principles in the United States, consistently applied.
"GMP Contract" means the Guaranteed Maximum Price Contract (No. CCG-HYW-2025-001) dated as of the date hereof between Borrower and Cobalt Construction Group, Inc., as the same may be amended, modified, or supplemented from time to time with the prior written consent of Agent. The guaranteed maximum price thereunder is Four Hundred Twelve Million Dollars ($412,000,000).
"Governmental Authority" means the United States of America, the State of New York, the City of New York, NYCEDC, the New York City Transit Authority, and any other federal, state, municipal, or local governmental authority, agency, department, commission, board, bureau, or instrumentality having or asserting jurisdiction over the Property or the transactions contemplated by this Agreement.
"Ground Lease" means that certain Ground Lease dated June 1, 2020, between NYCEDC, as ground lessor, and MTDC, as ground lessee, recorded in the Office of the City Register of the City of New York as CRFN 2020000198762, as assigned and subleased to Borrower, and as the same may be amended, restated, supplemented, or otherwise modified from time to time with the prior written consent of Agent.
"Ground Lessor" means NYCEDC, in its capacity as ground lessor under the Ground Lease.
"Ground Rent" means the annual ground rent payable under the Ground Lease in the amount of Four Million Two Hundred Thousand Dollars ($4,200,000) per annum, subject to adjustment based on changes in the Consumer Price Index every five (5) years as provided in the Ground Lease.
"Guarantor" or "Sponsor" means Metropolitan Transit Development Corp., an Illinois government instrumentality.
"Guaranty" means, collectively, the Guaranty of Recourse Obligations and the Completion Guaranty, each dated as of the date hereof, executed by MTDC in favor of Agent (for the benefit of the Lenders).
"Hazardous Materials" means any substance, material, or waste that is regulated, classified, or otherwise characterized under any Environmental Law as hazardous, toxic, a contaminant, a pollutant, or words of similar meaning or regulatory effect, including, without limitation, petroleum and petroleum products, asbestos and asbestos-containing materials, polychlorinated biphenyls, lead-based paint, radon, and mold.
"Initial Maturity Date" means June 15, 2029.
"Interest Period" means each period commencing on the first day of a calendar month and ending on the last day of such calendar month; provided, however, that if Borrower elects (with Agent's prior written approval) a three-month Interest Period, each such period shall commence on the first day of a calendar quarter and end on the last day of such calendar quarter.
"Interest Rate" means a rate per annum equal to Term SOFR (determined for Interest Periods of one (1) month, unless Borrower has elected three (3)-month Interest Periods with Agent's prior written approval) plus four and one-quarter percent (4.25%) (i.e., 425 basis points); provided that Term SOFR shall not be deemed to be less than the SOFR Floor for purposes of calculating the Interest Rate.
"Interest Reserve" means the portion of the Project Loan allocated to fund capitalized interest payments during the construction period, as set forth in the applicable line item of the Project Budget.
"Interest-Only Period" means the period from the Closing Date through the Maturity Date (as such date may be extended pursuant to Section 2.6), during which Borrower is required to make monthly interest-only payments and no scheduled amortization of principal is required.
"Leasing Threshold" means eighty-five percent (85%) economic occupancy of the leasable area of the Project.
"Lenders" means Ironclad National Bank, N.A., Ridgeline Savings Bank, Atlas Mutual Insurance Company, Commonwealth Trust Company, Harborview Federal Savings Bank, and Meridian Pacific Bank, and their respective successors and permitted assigns; and "Lender" means any one of them.
"Lien Law" means the Lien Law of the State of New York, as the same may be amended from time to time.
"Loan Documents" means, collectively, this Agreement, the Building Loan Agreement, the Project Loan Note, the Building Loan Note, the Project Loan Mortgage, the Building Loan Mortgage, the Guaranty, the Cash Management Agreement, the Environmental Indemnity, the Assignment of Contracts, the Pledge Agreement, the Mezzanine Intercreditor Agreement, and all other documents, instruments, and agreements executed and delivered by Borrower, Guarantor, or any other Person in connection with the Senior Mortgage Loan, as any of the foregoing may be amended, restated, supplemented, or otherwise modified from time to time.
"LTV Covenant" means the maximum combined loan-to-value ratio of seventy percent (70.0%), tested annually or as otherwise provided in Section 12.2.
"Material Adverse Effect" means any event, circumstance, condition, or change that, individually or in the aggregate, has had or could reasonably be expected to have a material adverse effect on (a) the business, operations, property, condition (financial or otherwise), or prospects of Borrower or the Property, (b) the ability of Borrower or Guarantor to perform any material obligation under any Loan Document, (c) the validity or enforceability of any Loan Document, (d) the rights and remedies of Agent or any Lender under any Loan Document, or (e) the lien priority of the Project Loan Mortgage or the Building Loan Mortgage.
"Maturity Date" means the Initial Maturity Date, as such date may be extended by the valid exercise of the Extension Options pursuant to Section 2.6; provided that the Maturity Date shall in no event be later than the Final Extended Maturity Date.
"Mezzanine Borrower" means Hudson Yards West Mezzanine LLC, a Delaware limited liability company, being the direct parent of Borrower and the direct or indirect subsidiary of MTDC.
"Mezzanine Intercreditor Agreement" means the Intercreditor Agreement dated as of the date hereof among Agent, Granite Peak Capital Partners, LP, Borrower, and Mezzanine Borrower, governing the respective rights and obligations of the holders of the Senior Mortgage Loan and the Mezzanine Loan, as the same may be amended, restated, supplemented, or otherwise modified from time to time.
"Mezzanine Loan" means the mezzanine loan in the principal amount of Two Hundred Million Dollars ($200,000,000) made by Granite Peak Capital Partners, LP to Mezzanine Borrower, secured by the pledge of Mezzanine Borrower's membership interest in Borrower, as more fully described in the Mezzanine Intercreditor Agreement.
"Mezz Lender" means Granite Peak Capital Partners, LP, a Delaware limited partnership, and its successors and assigns in its capacity as lender under the Mezzanine Loan.
"MTDC" means Metropolitan Transit Development Corp., an Illinois government instrumentality.
"Net Operating Income" or "NOI" means, for any applicable period, the total revenues from the Property (including base rent, percentage rent, escalation income, parking revenue, and other operating income, but excluding security deposits, prepaid rent for future periods, and non-recurring items) minus total operating expenses for the Property (including real estate taxes, insurance, utilities, management fees, repairs and maintenance, ground rent, and other customary operating expenses, but excluding depreciation, amortization, capital expenditures, debt service, income taxes, and non-cash charges), all as determined by Agent in accordance with GAAP and customary commercial real estate accounting practices.
"NYCEDC" means NYC Economic Development Corporation, a New York not-for-profit corporation.
"NYCTA" means the New York City Transit Authority, an agency of the Metropolitan Transportation Authority.
"Origination Fee" means the origination fee in the aggregate amount of Four Million Seven Hundred Fifty Thousand Dollars ($4,750,000) (being 1.00% of the aggregate principal amount of the Senior Mortgage Loan), as described in Section 2.7.
"Payment Date" means the first (1st) Business Day of each calendar month during the term of this Agreement, commencing on the first (1st) Business Day of the calendar month following the Closing Date.
"Permitted Encumbrances" means the liens and encumbrances listed on Schedule 1.1, together with any other encumbrances that may be expressly permitted or approved in writing by Agent from time to time.
"Person" means any individual, corporation, limited liability company, partnership, joint venture, trust, estate, unincorporated organization, governmental authority, or other entity.
"Plans and Specifications" means the architectural and engineering plans and specifications for the Project, as approved by Agent and all applicable Governmental Authorities, together with all amendments and modifications thereto approved in writing by Agent.
"Pledge Agreement" means the Pledge and Security Agreement dated as of the date hereof executed by Mezzanine Borrower in favor of Mezz Lender, pledging Mezzanine Borrower's membership interest in Borrower as security for the Mezzanine Loan, subject to the terms and conditions of the Mezzanine Intercreditor Agreement.
"Potential Default" means any event, condition, or circumstance that, with the giving of notice or the passage of time, or both, would constitute an Event of Default.
"Pro Rata Share" means, as to each Lender, the percentage obtained by dividing such Lender's Commitment by the aggregate Commitments of all Lenders, as set forth on Schedule 2.1.
"Project" means the mixed-use development to be constructed on the Property, consisting of approximately 1,200,000 square feet of commercial office space, approximately 75,000 square feet of retail space, and transit-infrastructure improvements, all in accordance with the Plans and Specifications and the ULURP Approval.
"Project Budget" means the budget for non-improvement costs to be funded from the Project Loan, attached hereto as Exhibit A, as the same may be modified from time to time with the prior written consent of Agent, subject to Section 9.6.
"Project Loan" means the loan made by the Lenders to Borrower under this Agreement in the aggregate principal amount of the Project Loan Amount, being that portion of the Senior Mortgage Loan allocated to costs other than costs of "improvement" within the meaning of Lien Law Section 2(4).
"Project Loan Amount" means the aggregate principal amount of the Project Loan as set forth in the Project Budget, being that portion of the Four Hundred Seventy-Five Million Dollars ($475,000,000) Senior Mortgage Loan allocated to non-improvement costs. The Project Loan Amount, together with the Building Loan amount, shall equal the aggregate principal amount of the Senior Mortgage Loan.
"Project Loan Mortgage" means the Project Loan Mortgage, Assignment of Leases and Rents, Security Agreement, and Fixture Filing, dated as of the date hereof, made by Borrower in favor of Agent (for the benefit of the Lenders), encumbering the Property and securing the Project Loan, recorded simultaneously herewith in the Office of the City Register of the City of New York, as the same may be amended, restated, supplemented, or otherwise modified from time to time.
"Project Loan Note" means the promissory note or notes evidencing the Project Loan executed by Borrower in favor of the Lenders, substantially in the form of Exhibit B attached hereto.
"Projected Substantial Completion Date" means December 15, 2027.
"Property" means the real property located at 450 West 34th Street, New York, New York 10001 (Block 729, Lots 1, 5, 12, and 15, Borough of Manhattan, City of New York), together with all buildings, improvements, structures, and fixtures now or hereafter erected thereon, and all rights, privileges, easements, hereditaments, and appurtenances thereunto belonging or appertaining, including Borrower's leasehold interest under the Ground Lease.
"Required Lenders" means, at any time, Lenders holding at least sixty-six and two-thirds percent (66⅔%) of the aggregate outstanding Commitments (or, after all Commitments have been terminated, of the aggregate outstanding principal balance of the Project Loan).
"SOFR" means the Term SOFR Reference Rate as published by CME Group Benchmark Administration Limited (or any successor administrator selected by Agent), for the applicable Interest Period; provided that if the Term SOFR Reference Rate is not published or is unavailable, SOFR shall be determined in accordance with the SOFR Successor Rate Provisions set forth in Exhibit G.
"SOFR Floor" means one percent (1.00%) per annum.
"SOFR Successor Rate Provisions" means the benchmark replacement and transition provisions set forth in Exhibit G, substantially consistent with the Alternative Reference Rates Committee (ARRC) recommended fallback language.
"Sponsor Equity" means the equity contribution of Two Hundred Million Dollars ($200,000,000) made or to be made by MTDC (directly or through its wholly-owned subsidiaries) to or for the benefit of Borrower in connection with the Project.
"Substantial Completion" means "Substantial Completion" as defined in the GMP Contract, including, without limitation, the completion of all material construction work in accordance with the Plans and Specifications such that the Project is ready for occupancy and use for its intended purpose, subject only to punch-list items that do not materially interfere with such occupancy and use. The Projected Substantial Completion Date is December 15, 2027.
"TCO" means a Temporary Certificate of Occupancy issued by the New York City Department of Buildings with respect to the Project or any portion thereof. The projected date for issuance of the first TCO is March 15, 2028.
"Title Company" means Sentinel Title & Escrow Company.
"Title Policy" means the ALTA 2006 Mortgagee Title Insurance Policy (or policies) in the aggregate amount of Four Hundred Seventy-Five Million Dollars ($475,000,000), allocated between the Building Loan Mortgage and the Project Loan Mortgage, issued by Sentinel Title & Escrow Company (Commitment No. STN-2025-MH-04178), insuring the lien of the Project Loan Mortgage and the Building Loan Mortgage as valid first-priority leasehold mortgage liens on the Property, subject only to the Permitted Encumbrances, together with all endorsements required by Agent.
"Transit Infrastructure Grant" means the grant in the amount of Forty-Five Million Dollars ($45,000,000) from the New York City Transit Authority (NYCTA) to Borrower (or MTDC, as applicable) for the construction of transit-infrastructure improvements at or adjacent to the Property.
"ULURP Approval" means, collectively, the approval of the New York City Planning Commission dated September 12, 2023 (Application No. C 230415 ZSM), and the approval of the New York City Council dated October 25, 2023, each relating to the special permits, zoning text amendments, and other land use actions required for the Project.
"Zoning Opinion" means the zoning and land use opinion letter delivered by Hargrove & Linden, P.C. (Raymond Cho, Esq.) dated April 15, 2025, confirming the zoning compliance of the Project with all applicable zoning resolutions and the ULURP Approval.
All capitalized terms used but not otherwise defined in this Agreement shall have the meanings ascribed to such terms in the Building Loan Agreement.
Section 1.2 — Rules of Interpretation
In this Agreement, unless the context otherwise requires:
(a) Headings and captions are included for convenience of reference only and shall not be considered in interpreting or construing this Agreement.
(b) The singular includes the plural and vice versa, and words importing one gender include the other genders.
(c) The word "including" (and its correlatives, such as "include" and "includes") means "including, without limitation."
(d) References to Sections, Articles, Exhibits, and Schedules are to the Sections, Articles, Exhibits, and Schedules of this Agreement unless otherwise specified.
(e) References to any statute, law, regulation, or order shall be deemed to include references to such statute, law, regulation, or order as amended, supplemented, restated, or reenacted from time to time, including any successor provisions and all rules and regulations promulgated thereunder.
(f) Accounting terms not specifically defined herein shall be construed in accordance with GAAP.
(g) References to "days" mean calendar days unless specifically stated as "Business Days."
(h) References to "dollars" or "$" mean the lawful currency of the United States of America.
(i) All references to times of day are to New York City time unless otherwise specified.
(j) The words "hereof," "herein," "hereunder," "hereto," and similar terms refer to this Agreement as a whole and not to any particular provision.
(k) References to any agreement, document, or instrument mean such agreement, document, or instrument as amended, restated, supplemented, or otherwise modified from time to time in accordance with its terms and, where applicable, the terms of this Agreement.
(l) The word "or" is not exclusive.
(m) The parties hereto have participated jointly in the negotiation and drafting of this Agreement, and no rule of construction against the drafter shall be applied in interpreting this Agreement.
Section 1.3 — New York Lien Law Compliance
(a) This Agreement constitutes a "project loan" and not a "building loan" within the meaning of Article 2 of the Lien Law of the State of New York. The Project Loan evidenced by this Agreement is made to finance costs and expenses of the Project that do not constitute costs of "improvement" as defined in Section 2(4) of the Lien Law.
(b) No proceeds of the Project Loan shall be used to pay for, or applied toward, any costs of "improvement" as defined in Section 2(4) of the Lien Law. All costs of "improvement" shall be funded solely from the Building Loan pursuant to the Building Loan Agreement.
(c) Borrower acknowledges and agrees that the necessity of maintaining separate funds for building loan and project loan disbursements is a material inducement to the Lenders' agreement to make the Senior Mortgage Loan. Borrower shall at all times maintain separate books, records, and accounts for the receipt and disbursement of Project Loan funds and Building Loan funds, in strict compliance with the Lien Law.
(d) This Agreement, together with the Building Loan Agreement, shall be filed in the Office of the Clerk of the County of New York in compliance with Section 22 of the Lien Law prior to or simultaneously with the recording of the Project Loan Mortgage in the Office of the City Register of the City of New York.
(e) The Project Loan Mortgage is a separate and distinct lien from the Building Loan Mortgage. The recording of two separate mortgage instruments is being undertaken to preserve the respective lien priorities of the Building Loan Mortgage and the Project Loan Mortgage under the Lien Law.
(f) Borrower shall deliver to Agent, for filing, a verified statement (the "Borrower's Lien Law Affidavit") containing the information required by Lien Law Section 22, substantially in the form of Exhibit F attached hereto.
Section 1.4 — Relationship to Building Loan Agreement
(a) The Project Loan and the Building Loan are separate obligations of Borrower, evidenced by separate promissory notes and secured by separate mortgages on the Property. Notwithstanding such separation, the Project Loan and the Building Loan are cross-defaulted, such that an Event of Default under the Building Loan Agreement shall constitute an Event of Default hereunder, and an Event of Default hereunder shall constitute an "Event of Default" under the Building Loan Agreement.
(b) The Project Loan and the Building Loan are cross-collateralized, such that the Project Loan Mortgage secures the obligations under this Agreement and the Building Loan Mortgage secures the obligations under the Building Loan Agreement; provided that such cross-collateralization shall not be deemed to impair the separate lien status of the Project Loan Mortgage and the Building Loan Mortgage under the Lien Law.
(c) The aggregate outstanding principal amount under this Agreement and the Building Loan Agreement shall not at any time exceed Four Hundred Seventy-Five Million Dollars ($475,000,000).
(d) Agent administers both the Project Loan and the Building Loan, and all references herein to Agent's rights, powers, and obligations shall be construed to give effect to Agent's concurrent administration of both facilities.
(e) In the event of any conflict or inconsistency between the provisions of this Agreement and the provisions of the Building Loan Agreement, (i) the provisions of this Agreement shall govern and control with respect to all matters relating to the Project Loan, and (ii) the provisions of the Building Loan Agreement shall govern and control with respect to all matters relating to the Building Loan. With respect to matters that apply equally to the Project Loan and the Building Loan (including, without limitation, representations, warranties, covenants, and events of default that are stated on a combined basis), the more restrictive provision shall govern.
(f) Representations, warranties, covenants, and events of default set forth in this Agreement are made and apply on a combined basis with the Building Loan Agreement unless otherwise expressly specified. Borrower acknowledges that compliance with the covenants and conditions of both this Agreement and the Building Loan Agreement is required, and that a breach of any covenant or condition under either agreement shall constitute a default under both agreements.
ARTICLE 2 — THE PROJECT LOAN
Section 2.1 — Project Loan Commitment
(a) Subject to the terms and conditions of this Agreement, each Lender severally (and not jointly) agrees to make its Pro Rata Share of Advances of the Project Loan to Borrower, from time to time during the period from the Closing Date to the Maturity Date, in an aggregate principal amount not to exceed such Lender's Commitment as set forth on Schedule 2.1 attached hereto. The aggregate Commitments of all Lenders under this Agreement shall not exceed the Project Loan Amount.
(b) The Lenders making the Senior Mortgage Loan constitute the following syndicate:
(i) Ironclad National Bank, N.A. — Lead Arranger, Sole Bookrunner, and Administrative Agent;
(ii) Ridgeline Savings Bank — Co-Lender;
(iii) Atlas Mutual Insurance Company — Co-Lender;
(iv) Commonwealth Trust Company — Co-Lender;
(v) Harborview Federal Savings Bank — Co-Lender; and
(vi) Meridian Pacific Bank — Co-Lender.
(c) Each Lender's Commitment shall be allocated proportionally between the Building Loan and the Project Loan in the same ratio that the Building Loan amount bears to the Project Loan Amount, such that each Lender's aggregate commitment under both the Building Loan Agreement and this Agreement equals such Lender's Pro Rata Share of the total Four Hundred Seventy-Five Million Dollar ($475,000,000) Senior Mortgage Loan.
(d) Amounts repaid or prepaid under the Project Loan may not be reborrowed. Each Advance, once repaid, permanently reduces the Commitments by the amount of such repayment.
Section 2.2 — Project Loan Note
(a) The Project Loan shall be evidenced by one or more promissory notes (collectively, the "Project Loan Note") executed by Borrower and payable to the order of each Lender in the principal amount of such Lender's Commitment under this Agreement. Each Project Loan Note shall be substantially in the form of Exhibit B attached hereto.
(b) Each Lender is hereby authorized to record on the schedule attached to its Project Loan Note (or in its internal records) the date and amount of each Advance made to Borrower and each payment of principal received by such Lender, which records shall be prima facie evidence of the amounts owed; provided that the failure to make any such notation shall not affect the obligations of Borrower hereunder or under the Project Loan Note.
Section 2.3 — Purpose and Use of Proceeds
(a) The proceeds of the Project Loan shall be used solely for the following purposes, as itemized in the Project Budget attached hereto as Exhibit A, and for no other purpose:
(i) Land acquisition costs, including costs associated with the acquisition of the leasehold interest under the Ground Lease, allocated at One Hundred Eighty-Five Million Dollars ($185,000,000);
(ii) Interest reserve — capitalized interest during the construction period (the "Interest Reserve"), to fund interest payments on the Project Loan and the Building Loan during the Interest-Only Period;
(iii) Origination fees, including the Project Loan allocable portion of the aggregate Origination Fee of Four Million Seven Hundred Fifty Thousand Dollars ($4,750,000);
(iv) Title insurance premiums, recording and filing charges, and mortgage recording taxes payable in connection with the recording of the Project Loan Mortgage and the Building Loan Mortgage in the Office of the City Register of the City of New York;
(v) Legal fees and expenses, including fees of Borrower's counsel (Calderwood & Harkness LLP), Agent's counsel (Clearfield & Associates LLP), and local counsel (Hargrove & Linden, P.C.);
(vi) Appraisal, environmental, and engineering costs, including fees of Broadstreet Appraisal Group, Inc., Apex Environmental Consultants, Inc., and Trident Structural Engineers, P.C.;
(vii) Real estate taxes and assessments on the Property during the construction period;
(viii) Insurance premiums during the construction period, including builder's risk insurance (Fortis Indemnity Insurance Co.) and general liability insurance;
(ix) Ground rent payments during the construction period under the Ground Lease (Four Million Two Hundred Thousand Dollars ($4,200,000) per annum);
(x) Financing fees, commitment fees, unused line fees, and similar charges incurred in connection with the Senior Mortgage Loan;
(xi) Accounting and auditing fees, including fees of Whitfield Albrecht & Co. LLP;
(xii) Organizational and formation costs of Borrower and other special purpose entities established in connection with the Project;
(xiii) Marketing, leasing commissions, and tenant improvement allowances, to the extent such costs do not constitute costs of "improvement" within the meaning of Lien Law Section 2(4);
(xiv) Development management fees payable to MTDC or its affiliates, in amounts approved by Agent;
(xv) Working capital and operating deficits during the construction period and initial lease-up period; and
(xvi) Other soft costs set forth in the Project Budget.
(b) No proceeds of the Project Loan shall be applied to the payment of any cost of "improvement" within the meaning of Section 2(4) of the Lien Law. All costs of improvement shall be funded exclusively from the Building Loan under the Building Loan Agreement. Borrower shall maintain such records, accounts, and documentation as are necessary to demonstrate compliance with this requirement at all times.
Section 2.4 — Interest Rate
(a) Rate. The outstanding principal balance of the Project Loan shall bear interest at a rate per annum equal to Term SOFR (determined for Interest Periods of one (1) month, unless Borrower shall have elected, with Agent's prior written approval, Interest Periods of three (3) months) plus four and one-quarter percent (4.25%) per annum (425 basis points). The Interest Rate shall be reset on the first day of each Interest Period based on the Term SOFR rate then in effect.
(b) SOFR Floor. For purposes of calculating the Interest Rate, Term SOFR shall not be deemed to be less than one percent (1.00%) per annum (the "SOFR Floor"). In the event that the applicable Term SOFR rate is less than the SOFR Floor on any date of determination, Term SOFR shall be deemed to be the SOFR Floor for purposes of this Agreement.
(c) Default Rate. Upon and during the continuance of an Event of Default, the outstanding principal balance of the Project Loan (and, to the extent permitted by applicable law, all past-due interest and other amounts) shall bear interest at the Default Rate, which is equal to the Interest Rate otherwise in effect plus four percent (4.00%) per annum (400 basis points). Interest at the Default Rate shall accrue from and including the date of the occurrence of the Event of Default until such Event of Default is cured or waived, or all obligations are paid in full.
(d) Interest Periods. Unless Borrower shall have elected (with Agent's prior written approval) three-month Interest Periods, each Interest Period shall consist of one (1) calendar month, commencing on the first day of such calendar month and ending on the last day of such calendar month. The Interest Period applicable to the initial Advance shall commence on the Closing Date and end on the last day of the calendar month in which the Closing Date occurs.
(e) Day Count. Interest on the Project Loan shall be calculated on the basis of a 360-day year for the actual number of days elapsed in each Interest Period (actual/360).
(f) SOFR Replacement. In the event that Term SOFR ceases to be published or is otherwise unavailable, the Interest Rate shall be determined in accordance with the SOFR Successor Rate Provisions set forth in Exhibit G attached hereto, which provisions are substantially consistent with the ARRC recommended fallback language for syndicated business loans.
(g) Separate Calculation. Interest on the Project Loan and interest on the Building Loan shall be calculated separately based on the respective outstanding principal balances of each; provided that interest on both shall be payable on the same Payment Dates.
Section 2.5 — Term; Maturity Date
(a) The initial term of the Project Loan shall be four (4) years from the Closing Date, commencing on June 15, 2025 and maturing on June 15, 2029 (the "Initial Maturity Date"), unless earlier terminated or accelerated in accordance with the terms hereof or extended pursuant to Section 2.6.
(b) Subject to Section 2.6, all outstanding principal, accrued and unpaid interest, fees, and all other amounts owing under this Agreement and the other Loan Documents shall be due and payable in full on the Maturity Date. No extension of the Maturity Date shall be effective unless all conditions precedent to such extension set forth in Section 2.6 have been satisfied in full.
Section 2.6 — Extension Options
Borrower shall have the right to extend the Maturity Date for two (2) successive periods of one (1) year each, subject to the satisfaction of all of the following conditions precedent with respect to each such extension:
First Extension (extending the Initial Maturity Date from June 15, 2029 to June 15, 2030):
(a) No Event of Default or Potential Default shall exist as of the date of the extension request or the date on which the extension becomes effective.
(b) Substantial Completion shall have been achieved on or before December 15, 2028 (being the date that is six (6) months prior to the Initial Maturity Date).
(c) The combined DSCR (calculated on a trailing twelve-month basis, or, if sufficient operating history is not available, on a projected basis as certified by Borrower and approved by Agent in its reasonable discretion) shall not be less than 1.20x.
(d) The combined LTV (aggregate outstanding principal of the Building Loan and the Project Loan divided by the appraised value of the Property) shall not be greater than 70.0%.
(e) The combined Debt Yield (annualized NOI divided by the aggregate outstanding principal of the Combined Loan) shall not be less than 8.0%.
(f) Borrower shall have paid to Agent, for the pro rata benefit of the Lenders, an extension fee equal to twenty-five one-hundredths of one percent (0.25%) of the outstanding principal balance of the Combined Loan as of the effective date of such extension.