Contract analysis

I. Executive Summary The purpose of this memorandum is to evaluate the timing interrelationship among three critical-path events in the development of the Stonebridge Data Center Campus located in unincorporated Loudoun County, Virginia: (1) the Zoning Map Amendment / Zoning Modification ("ZMOD") approval by the Loudoun County Board of Supervisors, currently targeted for the October 2025 hearing cycle; (2) the land c

II. Background — Project Timeline and Sequencing A. The Stonebridge Data Center Campus The Stonebridge Data Center Campus (the "Project") is a planned hyperscale data center development with a total project budget of approximately $600,000,000. The campus is designed to deliver 96 MW of critical IT load across four purpose-built data center buildings, designated Buildings A through D, each rated at 24 MW of critical

III. Zoning Modification (ZMOD) Process and Timeline Analysis A. Current Zoning and Required Entitlement The Stonebridge Parcel and the Meridian Parcel are currently zoned PD-IP (Planned Development – Industrial Park) under the Loudoun County Zoning Ordinance. The PD-IP zoning district permits a range of industrial, office, and commercial uses, but data center use is not a by-right use within the PD-IP district. Rath

1. Pre-Application Conference. A pre-application conference with the Loudoun County Department of Planning and Zoning was requested by letter submitted in April 2025. This conference is intended to familiarize County staff with the proposed project and to identify any threshold issues or concerns that should be addressed in the formal application. The pre-application conference is advisory only and does not bind the

2. Application Filing. The formal ZMOD application is targeted for filing on May 30, 2025. The application will be filed with the Department of Planning and Zoning and is expected to be assigned Docket No. ZMOD-2025-0038. The application will include the concept development plan, the proffer statement, the traffic impact analysis, the noise impact study, the fiscal impact analysis, and all other supporting documentat

3. Staff Completeness Review. Following submission, County staff will conduct a completeness review to determine whether the application contains all required materials and information. This review typically takes two to four weeks. If the application is determined to be incomplete, the applicant will be required to supplement the submission, which could add additional time to the process.

4. Referral Agency Review Period. Once the application is accepted as complete, it is referred to various County and state agencies for review and comment. Referral agencies typically include the Loudoun County Department of Transportation and Capital Infrastructure, the Loudoun County Fire and Rescue Department, the Virginia Department of Transportation (VDOT), the Loudoun Water Authority, and other relevant agencie

5. Staff Report Preparation. Following completion of the referral agency review, the Department of Planning and Zoning staff prepares a comprehensive staff report analyzing the application's conformance with the Comprehensive Plan, the Zoning Ordinance, and applicable County policies. The staff report includes a recommendation to the Planning Commission (typically a recommendation to approve, approve with conditions,

6. Planning Commission Public Hearing and Recommendation. The application is scheduled for a public hearing before the Loudoun County Planning Commission. The Planning Commission conducts the hearing, receives public comment, and issues a recommendation to the Board of Supervisors. The Planning Commission's recommendation is advisory and is not binding on the Board of Supervisors. The Planning Commission typically me

7. Board of Supervisors Public Hearing and Action. Following the Planning Commission's recommendation, the application is scheduled for a public hearing before the Board of Supervisors. The Board of Supervisors conducts the hearing, receives public comment, and takes action on the application — either approving, denying, or deferring the application. The Loudoun County Board of Supervisors typically meets on the firs

1. Community Opposition. Data center development in Loudoun County has generated increasing community concern in recent years, particularly regarding noise, traffic, visual impact, and the concentration of data center facilities in certain areas. The Project site is located in proximity to residential communities, and organized community opposition could result in requests for additional public hearings, the submissi

2. Supplemental Study Requests. County staff or referral agencies may request supplemental studies beyond those included in the initial application, such as additional traffic counts, updated noise modeling, or a supplemental fiscal impact analysis. Each supplemental study request could add four to eight weeks to the review timeline.

3. Scheduling Congestion. The Board of Supervisors' hearing calendar is shared among all pending land use applications in the County. If multiple ZMOD applications or other significant land use matters are pending in the same hearing cycle, the Stonebridge application may be deferred to a subsequent meeting date to accommodate the Board's calendar.

4. Conditions Imposed by the Board. Even if the Board of Supervisors is generally supportive of the application, the Board may impose conditions requiring further negotiation of the proffer statement or modifications to the concept development plan. If such conditions are imposed at the hearing, the matter may be deferred to allow the applicant to revise the application and return for a subsequent hearing.

5. Deferral to Subsequent Meeting Cycle. The Board of Supervisors has the discretion to defer action on any application to a subsequent meeting cycle without specifying a date certain for reconsideration. This is not uncommon, particularly for large-scale projects or projects that generate significant public comment. Based on these risk factors, our realistic assessment is as follows: if the ZMOD application is filed

IV. Impact on Land Closings (September 15, 2025) A. PSA Provisions — Zoning Contingency Analysis The threshold question for the land closings is whether the Stonebridge PSA and the Meridian PSA contain any zoning contingency, condition precedent, or other contractual mechanism that conditions the buyer's obligation to close on the receipt of ZMOD approval. If such a contingency exists, IHDC would have a contractual b

1. Stonebridge PSA (Blackthorn Realty Group, Inc.) The Stonebridge PSA was executed on April 15, 2025, with Blackthorn Realty Group, Inc. as seller. Seller's counsel is Whitfield, Poole & Stratton LLP (Harrison Poole). The purchase price is $58,500,000. The agreement provides for a ninety-day due diligence period expiring on July 14, 2025. During the due diligence period, IHDC has the right to terminate the PSA for a

2. Meridian PSA (Meridian Acres LLC) The Meridian PSA was executed on April 22, 2025, with Meridian Acres LLC (managed by Theodore Ashford) as seller. Seller's counsel is Dunleavy & Dunmore Benefits Consulting, PLLC (Fiona Dunleavy). The purchase price is $19,400,000. The agreement provides for a seventy-five-day due diligence period expiring on July 7, 2025. The earnest money deposit under the Meridian PSA is $970,0

1. PSA Amendment — Zoning Contingency Extension The preferred mitigation strategy is to negotiate amendments to both the Stonebridge PSA and the Meridian PSA that add a closing condition precedent requiring ZMOD approval (or, at a minimum, a favorable Planning Commission recommendation) before the buyer's closing obligation matures. Under this approach, the closing date would be extended from September 15, 2025 to a

2. Conditional Closing An alternative approach would be for IHDC to close on September 15, 2025 as scheduled but negotiate a contractual right to unwind the transaction (a "rescission right") if the ZMOD is denied within a specified period following closing — for example, within 120 days of closing. This approach has significant drawbacks and is unlikely to be acceptable to the sellers. From the sellers' perspective,

3. Staged Closing A third approach would be to close on the Stonebridge Parcel (the primary 62.0-acre parcel) on September 15, 2025 as scheduled and defer the closing on the Meridian Parcel (the secondary 19.4-acre parcel) until after ZMOD approval is obtained. This approach limits IHDC's pre-ZMOD exposure to $58,500,000 rather than the full $77,900,000 — a reduction of $19,400,000. However, the Meridian Parcel is cr

4. Accept Risk and Close as Scheduled Finally, IHDC may determine that the risk of ZMOD denial is sufficiently low to justify proceeding with the land closings on September 15, 2025 as scheduled, without any contractual modifications. This determination would be based on the following factors: • Location in the established data center corridor. The Project site is located within Loudoun County's well-known data cente

V. Impact on Construction Loan Closing (October 15, 2025) A. Construction Loan Overview The construction financing for the Project is being structured as a $390,000,000 senior secured construction loan facility (the "Construction Loan"). The Construction Loan represents approximately 65% of the total project cost of $600,000,000, with the remaining 35% ($210,000,000) funded from Ridgeline Fund IV equity. The key term

1. Equity Exposure on Land Costs. The delay in the construction loan closing means that IHDC bears the full cost of the land acquisition ($77,900,000) from equity capital until the loan closes and reimburses the land costs through the initial draw. If the delay extends for two to three months (i.e., the construction loan does not close until January or February 2026), IHDC's equity will be deployed in the land for an

2. Cascade to EPC and NTP. The EPC contract execution with Titan-McAllister is targeted for October 20, 2025, five days after the construction loan closing target. The EPC contract is expected to be a condition precedent to the construction loan closing, and the construction loan closing is a practical prerequisite to EPC execution (since IHDC will need the committed financing in place before committing to a $412,000

3. VPC Substation Timeline. A delay in the construction loan closing may also delay the execution of the LLSA with Vantage Power Cooperative and the commencement of VPC's substation construction on the Meridian Parcel. The substation has a target energization date of June 1, 2027, and the substation construction period is approximately eighteen months. Any delay in commencing substation construction could push the en

4. Impact on the 10-Year LLSA Term. The LLSA is structured as a ten-year contract with a defined term commencement date tied to the energization of the substation. If the energization date is delayed, the commencement of the ten-year term is also delayed, which may have implications for IHDC's long-term power procurement strategy and the economics of the LLSA.

5. Carrying Costs. During any delay period, IHDC will incur carrying costs on the unimproved land, including but not limited to: (a) interest on any bridge financing obtained to fund the land acquisition; (b) property taxes on the Stonebridge Parcel and the Meridian Parcel; (c) insurance costs for the unimproved parcels; and (d) consultant retainers and professional fees for the project team during the delay period.

6. Arrangement Fee. The arrangement fee for the Construction Loan is $3,900,000 (1.00% of the $390,000,000 facility). It must be confirmed whether this fee is payable at the time of the commitment letter execution or at the loan closing. If payable at commitment, IHDC will have deployed $3,900,000 in fees before the loan closes. In addition, it should be confirmed whether the commitment letter includes a commitment e

1. Flexible Closing Date in Commitment Letter The most effective mitigation strategy is to negotiate the commitment letter (Summit Loan Commitment Reference: CL-2025-VA-04418) to provide for a closing date that is the later of (a) October 15, 2025 and (b) thirty (30) days following the date on which the ZMOD is approved by the Board of Supervisors, subject to an outside date of no later than March 31, 2026. This appr

2. Bifurcated Closing Structure An alternative approach is to propose a two-phase closing structure for the Construction Loan: (i) Phase I Closing (Land Financing). An initial closing securing the deed of trust on the Stonebridge Parcel and the Meridian Parcel and funding the reimbursement of IHDC's equity investment in the land acquisition ($77,900,000). The Phase I closing would be conditioned only on title, enviro

3. Bridge Financing or Sponsor Equity Bridge If the Construction Loan closing is delayed beyond October 2025, Ridgeline Fund IV may need to fund the land closings entirely from its equity commitment. The total equity commitment for the Project is $210,000,000, and the total land cost is $77,900,000, which represents approximately 37% of the equity commitment. Ridgeline Fund IV is a $3.8 billion fund, and the $210,000

4. Coordinate with EPC Contractor If the Construction Loan closing is delayed, the EPC contract execution and Notice to Proceed will also be delayed. IHDC should coordinate with Titan-McAllister Construction Group, LLC (Michelle Tran, project executive) to assess the implications of a delayed NTP. Key questions for TMCG include: • Does the GMP of $412,000,000 have a validity period? If so, what is the expiration date

VI. Interrelationship with EPC and Power Agreements A. EPC Agreement — Change of Control and Timing The EPC Agreement with Titan-McAllister Construction Group, LLC is being negotiated on a guaranteed maximum price basis, with a GMP of $412,000,000. The EPC Agreement includes standard change of control provisions, which are relevant to the overall project structure: • TMCG Consent Right. TMCG has a right to consent (n

VII. Recommended Course of Action Based on the analysis set forth in this memorandum, we recommend the following course of action, organized into immediate steps, secondary steps, and a fallback position. A. Immediate Steps

1. Obtain Realistic ZMOD Timeline Assessment. Engage Thomas Ashcroft (Ashcroft & Wynn, P.C.) and Alan Mercer (Cornerstone Land Use Consulting, LLC) to provide a written assessment of the realistic ZMOD approval timeline, including whether an October 2025 Board of Supervisors hearing remains achievable or whether a November 2025 or December 2025 hearing is more likely based on current Board of Supervisors hearing sche

2. Review PSAs and Prepare Amendments. Review the Stonebridge PSA and the Meridian PSA in detail to confirm the precise closing conditions and whether any zoning-related contingency or condition precedent currently exists in either agreement. If no zoning contingency exists (as we preliminarily believe), prepare draft amendments to both PSAs adding a closing condition precedent tied to ZMOD approval and/or extending

3. Negotiate Flexible Closing Mechanics in the Commitment Letter. In connection with the negotiation of the Construction Loan commitment letter (target: August 1, 2025; Summit Loan Commitment Reference: CL-2025-VA-04418), include specific language providing for a flexible closing date tied to ZMOD approval, with an adequate outside date of no later than March 31, 2026. This language should be introduced early in the