Contract analysis

From: "Douglas Fairchild" To: "Marcus Thorne" Cc: "Priya Dasgupta" Subject: Stonebridge Data Center Campus — Engagement Kickoff and Initial Workstreams

I hope this finds you both well. We are delighted to have been retained by Ironhaven Data Centers LLC in connection with the Stonebridge Data Center Campus development in Loudoun County, Virginia. The countersigned engagement letter dated March 12, 2025 has been received and processed, and we have opened firm Matter No. 1043-00002 for the representation.

As you know, the scope of our engagement encompasses Ironhaven's representation in connection with the approximately $600,000,000 ground-up data center campus development — including land assemblage from multiple sellers, entitlements and permitting, EPC contract negotiation, power procurement agreements, and project-level construction financing. We understand that Ridgeline Capital Partners Fund IV, LP, through RCP

Given the Virginia-centric nature of the project, much of the day-to-day team will be based in our Washington, DC office at 1900 K Street NW, with additional support from our New York office at 425 Lexington Avenue as the financing and EPC workstreams require. I will be spending the majority of my time on this matter out of DC.

What follows is a summary of our understanding of the project, an introduction to the Calderwood & Harkness team, and a detailed outline of the initial workstreams we intend to mobilize. I would welcome the opportunity to walk through all of this on a kickoff call early next week.

For the benefit of the full distribution and to confirm that our understanding is aligned, a brief recap of the project as we understand it:

The Stonebridge Campus is situated at the intersection of Belmont Ridge Road and Stonebridge Boulevard in unincorporated Loudoun County, Virginia. The campus encompasses approximately 81.4 acres across two parcels:

- **Stonebridge Parcel:** 62.0 acres, to be acquired from Blackthorn Realty Group, Inc. - **Meridian Parcel:** 19.4 acres, to be acquired from Meridian Acres LLC

The campus is designed for 96 MW of critical IT load across four data center buildings (Buildings A through D), each rated at 24 MW. The total project budget is $600,000,000, with a capital stack comprising $210,000,000 in equity (35%) from Ridgeline Fund IV through IHDC and a $390,000,000 senior secured construction loan facility (65%).

The target timeline, as we understand it, calls for land closings in September 2025, a construction loan closing in October 2025, and issuance of the Notice to Proceed in November 2025.

I want to introduce the team that will be working with Ironhaven on this matter:

- **Douglas Fairchild** (Responsible Partner) — I will provide overall strategic direction and handle key negotiations with lenders, counterparties, and co-counsel. I will serve as the primary point of contact for you, Marcus, and for the IHDC executive team.

- **Angela Fontaine** (Billing Partner) — Angela will oversee matter administration, budgeting, and billing. Please feel free to direct any billing-related questions to her directly.

- **Cynthia Ho** (Lead Associate) — Cynthia will serve as the day-to-day lead on all transactional workstreams, including PSA negotiations, the EPC contract, construction loan documentation, and power agreements. She will be the primary drafter and negotiator on the documentation and will be in frequent contact with Leonard and the broader project team.

- **Grace Nakamura** (Working Associate) — Grace will handle due diligence coordination (title, survey, environmental), insurance program review, easement documentation, and closing checklist management.

- **Sylvia Hartwell** (Specialist Partner, Tax) — Sylvia will advise on entity structuring and tax elections for the project SPE, Virginia data center sales tax exemption qualification under Va. Code § 58.1-609.3(18), cost segregation study planning, and Loudoun County equipment tax analysis. She will coordinate directly with Robert Fielding and the team at Fielding & Associates, CPAs, on these matters.

This is a strong group, and I am confident they will serve the project well.

**3. Initial Workstreams — Immediate Priorities**

I have organized our initial workstreams into six categories. Each is discussed below.

**A. Entity Formation — Stonebridge Campus Holdings LLC**

We will move promptly to form **Stonebridge Campus Holdings LLC** as a Virginia limited liability company, which will serve as the single-purpose borrower entity wholly owned by IHDC. This will be the entity that takes title to both parcels, enters into the EPC contract, and serves as borrower under the construction loan facility.

- Draft Articles of Organization for filing with the Virginia State Corporation Commission; - A comprehensive Operating Agreement incorporating single-purpose entity covenants and separateness provisions consistent with the requirements we anticipate from the lending syndicate; and - A Secretary's Certificate for IHDC certifying the authority of Marcus Thorne (CEO) and Priya Dasgupta (CFO) to execute transaction docu

We will circulate initial drafts of these documents for your review shortly after the kickoff call.

**B. Land Acquisition — PSA Negotiations**

We will commence negotiations on both Purchase and Sale Agreements in parallel:

- **Stonebridge Parcel (62.0 acres):** We will engage with Harrison Poole at Whitfield, Poole & Stratton LLP, counsel to Blackthorn Realty Group, Inc., to negotiate and finalize the PSA. The agreed purchase price is $58,500,000 (approximately $943,548 per acre). We are targeting PSA execution by mid-April 2025, with an earnest money deposit of $2,925,000 (5%) to be held by Fidelitas Title & Escrow, Inc. and a 90-day

- **Meridian Parcel (19.4 acres):** We will engage with Fiona Dunleavy at Dunleavy & Dunmore Benefits Consulting, PLLC, counsel to Meridian Acres LLC (Theodore Ashford, managing member), to negotiate the PSA. The agreed purchase price is $19,400,000 ($1,000,000 per acre). We are targeting execution by late April 2025, with an earnest money deposit of $970,000 (5%) and a 75-day due diligence period.

Total land acquisition cost across both parcels is $77,900,000, with both closings targeted for September 15, 2025. We will also prepare assignment mechanics so that the PSAs can be assigned from IHDC to Stonebridge Campus Holdings LLC prior to closing, ensuring that the SPE takes clean title.

We will mobilize the due diligence program immediately upon PSA execution, though we can begin certain advance coordination now:

- **Title:** We will order title commitments from Fidelitas Title & Escrow, Inc. (underwritten by Sovereign Title Insurance Company) for both parcels. The team will ultimately need owner's title policies in the amount of the respective purchase prices and a lender's policy for $390,000,000 in connection with the construction loan closing.

- **Survey:** We will commission ALTA/NSPS surveys from Lumen Ridge Engineering, PLLC (Carlos Esteban, PE), with a target completion date of June 15, 2025.

- **Environmental:** We will engage Pendleton Environmental Associates, Inc. (Dr. Renata Volkov) for Phase I Environmental Site Assessments on both parcels, targeting completion by June 1, 2025. I should note that we are aware of the Stonebridge Parcel's former agricultural use and the potential for residual pesticide contamination in the northwest quadrant of the parcel (approximately 4.2 acres). Depending on the Ph

- **Geotechnical:** We will coordinate with Brannigan Geotechnical Engineering, LLC (Neil Brannigan, PE) on the geotechnical investigation for the campus.

- **Appraisals:** We understand that Greystone Appraisal Partners, LLC (Janet Choi, MAI) will be preparing the independent MAI appraisals for the lender.

Grace Nakamura will serve as the central coordinator for all due diligence workstreams and will maintain a comprehensive tracking log.

The parcels are currently zoned PD-IP (Planned Development – Industrial Park). A Zoning Modification Application (ZMOD) will be required to authorize data center use under the Loudoun County Zoning Ordinance.

We have engaged **Ashcroft & Wynn, P.C.** (Thomas Ashcroft) in Leesburg as local zoning counsel to handle the ZMOD application and proffer negotiations with the County. Tom's office will coordinate closely with **Cornerstone Land Use Consulting, LLC** (Alan Mercer), IHDC's land use consultant, on the application narrative and community engagement strategy.

Key milestones on the entitlements timeline include:

- **ZMOD Filing Target:** May 30, 2025 (anticipated docket number ZMOD-2025-0038) - **Board of Supervisors Hearing and Approval:** October 2025 - **Estimated Proffer Obligation:** Approximately $2,400,000 ($5.00 per square foot × 480,000 square feet estimated gross floor area)

I want to flag an important sequencing consideration here: the land closings are targeted for September 15, 2025, which is ahead of the anticipated ZMOD approval in October. The team will need to analyze risk mitigation strategies carefully, including potential conditional closing mechanics, ZMOD-contingent provisions in the PSAs, or other structural protections. This will be an important topic for our kickoff call.

**E. Construction Financing — Preliminary Steps**

We understand that **Summit National Bank, N.A.** (Karen Ellsworth, Managing Director) is the lead arranger for the $390,000,000 senior secured construction facility, with **Cascade Commercial Lending Corp.** (David Rennick) and **Harborview Trust Company** (Susan Applegategate) as co-lenders in the syndicate. The lending syndicate is represented by **Redmond & Calloway LLP** (Victor Redmond).

Based on preliminary term sheet discussions, the key proposed terms we will be evaluating include:

- Pricing at SOFR + 285 bps - 36-month draw period - 48-month maturity with a 12-month extension option - Arrangement fee of 1.00% ($3,900,000) - Unused commitment fee of 0.50% - Loan-to-cost covenant of ≤ 65% - Minimum equity contribution of $52,500,000 (25% of the $210,000,000 equity commitment) prior to the first draw

We are targeting a commitment letter by August 1, 2025 and a loan closing by October 15, 2025. As we move into the loan documentation phase, we will need to carefully coordinate change of control provisions across the loan documents, the EPC contract, and the utility agreements to ensure consistency and to avoid inadvertent defaults.

**F. EPC and Power — Near-Term Planning**

We understand that negotiations with **Titan-McAllister Construction Group, LLC** (Raymond Okafor, President; Michelle Tran, SVP Data Center Programs) on the guaranteed maximum price EPC contract ($412,000,000) are advancing, with targeted execution by October 20, 2025 and NTP by November 1, 2025. **Kestrel Infrastructure Advisors, LLC** (Diane Prescott) is serving as owner's representative, and we look forward to co

Additionally, we will be reviewing the Large Load Service Agreement with **Vantage Power Cooperative** for the 120 MVA contracted demand and the associated $18,500,000 line extension contribution.

On the insurance front, we understand that **Northgate Insurance Brokerage, LLC** (William Keane) is placing the builder's risk, OCIP, and operational insurance programs. Our team will coordinate with Northgate to ensure that insurance requirements are properly harmonized across the EPC contract and the loan documents.

To keep the project on track, I would suggest the following immediate next steps:

1. **Kickoff Call:** I would like to schedule a kickoff call for early next week with the core IHDC team — Marcus, Leonard, and Priya — together with the C&H team, to walk through the workplan in detail, confirm priorities, and establish a regular cadence for status updates. My assistant will reach out to coordinate calendars.

2. **Consultant Introductions:** Leonard, it would be very helpful if you could coordinate introductions between our team and the project consultants — Kestrel, Cornerstone, Pendleton, Brannigan, and Lumen Ridge — so that the due diligence and entitlements workstreams can be immediately mobilized.

3. **Timeline and Checklist:** Following the kickoff call, Cynthia will circulate a preliminary timeline and milestone tracker, along with a master closing checklist framework, to ensure that all parties are working from a common set of deliverables and deadlines.

Marcus, Leonard — we are genuinely enthusiastic about the Stonebridge Campus project and confident in the team's ability to execute on what is, admittedly, an aggressive but achievable timeline. This is a significant and complex undertaking, and we are committed to bringing the full resources of the firm to bear in support of Ironhaven's objectives.

Please do not hesitate to reach out to me directly at any time. I am available by phone at (202) 555-4180 or by email at dfairchild@calderwoodharkness.com.

**Douglas Fairchild** Partner Calderwood & Harkness LLP

1900 K Street NW, Suite 800 Washington, DC 20006 Tel: (202) 555-4180

425 Lexington Avenue New York, NY 10017 Tel: (212) 555-7300