CLOSING MEMORANDUM — PRIVILEGED AND CONFIDENTIAL
CALDERWOOD & HARKNESS LLP 125 Broad Street New York, NY 10004
June 3, 2024
Matter Number: 1043-00001
Billing Code: IHDC-TLB-2024
Re: $950,000,000 Senior Secured Term Loan B Credit Facility — Ironhaven Data Centers LLC
Crescent Harbor Deal Reference: CHB-LF-2024-0287
CUSIP: 46283LAA5
Prepared by: Daniel Obi, Lead Associate, and Lisa Morrow, Working Associate, under the supervision of Stephanie Okafor, Responsible Partner, Banking & Finance Group
Distribution:
Calderwood & Harkness LLP: Stephanie Okafor, Philip Hartmann, Daniel Obi, Lisa Morrow, Sylvia Hartwell
Ironhaven Data Centers LLC: Jonathan Pryce-Williams, Natasha Greenfeld, Rebecca Sung
Thornfield Capital Partners, LP: Elena Castillo, Graham Ashworth
This memorandum is prepared for internal and client use only and is subject to attorney-client privilege and work-product protection. Distribution beyond the persons identified above requires prior written authorization from the Responsible Partner.
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I. Executive Summary
This Closing Memorandum summarizes the material terms, documents, parties, conditions precedent, funds flow, and post-closing items relating to the $950,000,000 Senior Secured Term Loan B Credit Facility (the "Facility" or "Term Loan B") extended to Ironhaven Data Centers LLC, a Delaware limited liability company (the "Borrower" or "IHDC"), and Ironhaven Frankfurt GmbH, a German limited liability company (Gesellschaft mit beschränkter Haftung) (the "Co-Borrower" or "IHDC Frankfurt"), pursuant to the Senior Secured Term Loan B Credit Agreement dated as of May 15, 2024 (the "Credit Agreement"), among the Borrower, the Co-Borrower, Ironhaven Holdings Inc., a Delaware corporation (the "Parent Guarantor" or "Holdings"), Crescent Harbor Bank, N.A., as Administrative Agent, Sole Lead Arranger, and Sole Bookrunner (the "Administrative Agent" or "Crescent Harbor"), Pinnacle Trust Company, N.A., as Collateral Agent and Security Trustee (the "Collateral Agent"), and the several Lenders from time to time party thereto.
The Borrower is headquartered at 4500 Dominion Ridge Boulevard, Suite 300, Ashburn, Virginia 20147. The Co-Borrower is registered at Hanauer Landstraße 188, 60314 Frankfurt am Main, Germany (registered with the commercial register of the local court (Amtsgericht) of Frankfurt am Main under HRB 129457).
The Parent Guarantor, Ironhaven Holdings Inc., is the direct owner of 100% of the membership interests in IHDC and has guaranteed all obligations of the Borrower and the Co-Borrower under the Credit Agreement pursuant to the Guarantee Agreement dated as of May 15, 2024.
The transaction was sponsored by Thornfield Capital Partners, LP (the "Sponsor"), acting through Thornfield Infrastructure Fund III, LP (vintage 2021; total committed capital of $4.8 billion). The Sponsor provided an equity contribution of $410,000,000 at closing through Thornfield Infrastructure Fund III, LP, which indirectly owns 100% of the equity interests in Holdings.
Crescent Harbor Bank, N.A. served as the Administrative Agent, Sole Lead Arranger, and Sole Bookrunner for the Facility. Crescent Harbor's principal office is located at 1200 Harbor Point Drive, Charlotte, NC 28202. Pinnacle Trust Company, N.A., located at 101 Constitution Avenue NW, Washington, D.C. 20001, served as the domestic Collateral Agent and, through its London branch, as the German-law Security Trustee under a parallel-debt structure.
Calderwood & Harkness LLP served as United States counsel to the Borrower. Wendt Falkenberg Rechtsanwälte PartG mbB served as German local counsel to the Borrower. Blackthorn & Sundial Software served as United States counsel to the Administrative Agent and the Lenders, and Blackthorn & Sundial Software (Frankfurt office) served as German counsel to the Administrative Agent and the Lenders.
The proceeds of the Facility are being used to (a) fund the development, construction, and initial operation of two hyperscale data-center campuses — "Ironhaven Ashburn I" in Loudoun County, Virginia and "Ironhaven Frankfurt I" in Frankfurt am Main, Germany, (b) refinance existing mezzanine notes held by Greystone Mezzanine Fund II, LP, (c) pay transaction fees and expenses, and (d) provide working capital and general corporate funds.
The Facility is structured as two tranches: a USD Tranche in the aggregate principal amount of $675,000,000 and a EUR Sub-Tranche in the aggregate principal amount of €253,571,429 (approximately $275,000,000 at the Closing Date spot rate of EUR/USD 1.0846).
The signing of the Credit Agreement and the closing and funding of the Facility were not simultaneous. The Credit Agreement was executed on May 15, 2024 (the "Signing Date"), and the closing and initial funding occurred on June 3, 2024 (the "Closing Date" or "Funding Date"), upon the satisfaction of all conditions precedent set forth in the Credit Agreement.
The Credit Agreement is governed by the laws of the State of New York. The German-law security documents are governed by German law.
The Facility matures on June 3, 2031, which is seven years from the Closing Date.
II. Key Transaction Dates
The following timeline sets forth the key dates in the origination, syndication, execution, and closing of the Facility:
The 19-day period between the Signing Date and the Closing Date was required to complete certain conditions precedent that could not be satisfied prior to signing, including the filing and perfection of certain UCC financing statements, delivery of the updated title insurance commitment and final ALTA survey, finalization of the German notarized Grundschuld documents, confirmation of the Greystone payoff amount and preparation of the payoff letter, and completion of the final insurance compliance review.
III. Summary of Key Terms
A. Facility Terms
The following summarizes the principal economic and structural terms of the Facility as set forth in the Credit Agreement:
Facility Type: Senior Secured Term Loan B Credit Facility.
Aggregate Commitments: $950,000,000, consisting of:
(a) USD Tranche: $675,000,000; and
(b) EUR Sub-Tranche: €253,571,429, which is approximately $275,000,000 based on the Closing Date spot rate of EUR/USD 1.0846.
Interest Rate:
(a) USD Tranche: Term SOFR (as published by the CME Group Benchmark Administration Limited) plus a margin of 425 basis points per annum, subject to a SOFR floor of 0.50%.
(b) EUR Sub-Tranche: EURIBOR (as published by the European Money Markets Institute) plus a margin of 425 basis points per annum, subject to a EURIBOR floor of 0.00%.
Interest is payable quarterly in arrears on the last business day of each March, June, September, and December, with the first interest payment date being September 3, 2024. The interest rate applicable to the USD Tranche as of the Closing Date is SOFR (5.33%) + 4.25% = 9.58% per annum. The interest rate applicable to the EUR Sub-Tranche as of the Closing Date is EURIBOR (3.795%) + 4.25% = 8.045% per annum.
Original Issue discount (OID): 99.50, representing an OID of 50 basis points. Net proceeds to the Borrower after OID: $945,250,000 ($950,000,000 × 99.50%). The aggregate OID of $4,750,000 was netted from the Lenders' funding amounts on a pro rata basis.
Amortization: 1.00% per annum of the original aggregate principal amount of the Facility, payable quarterly (0.25% per quarter). The aggregate quarterly amortization payment is $2,375,000, allocated as follows:
(a) USD Tranche quarterly amortization: $1,687,500 ($675,000,000 × 0.25%); and
(b) EUR Sub-Tranche quarterly amortization: €633,928.57 (€253,571,429 × 0.25%).
The first quarterly amortization payment is due on September 3, 2024. Amortization payments are due on the first business day of each March, June, September, and December thereafter until the Maturity Date. The balance of the outstanding principal is due and payable on the Maturity Date.
Mandatory Prepayment from Excess Cash Flow: The Credit Agreement requires mandatory prepayment from a portion of the Borrower's annual Excess Cash Flow (as defined in the Credit Agreement), commencing with the fiscal year ending December 31, 2025. The applicable percentage is:
(a) 75% of Excess Cash Flow, if the Net Leverage Ratio as of the last day of the applicable fiscal year is greater than 4.50x;
(b) 50% of Excess Cash Flow, if the Net Leverage Ratio as of the last day of the applicable fiscal year is equal to or less than 4.50x but greater than 3.50x; and
(c) 25% of Excess Cash Flow, if the Net Leverage Ratio as of the last day of the applicable fiscal year is equal to or less than 3.50x.
Call Protection: The Facility is subject to a 101 soft call premium for a period of six months following the Closing Date. Any voluntary prepayment of the Term Loan B made on or prior to December 3, 2024 is required to be accompanied by a prepayment premium equal to 1.00% of the principal amount prepaid. After December 3, 2024, the Term Loan B may be voluntarily prepaid at par without premium or penalty.
Change of Control: Upon the occurrence of a Change of Control (as defined in the Credit Agreement), the Borrower is required to make a mandatory prepayment of 101% of the aggregate outstanding principal amount of the Facility, plus all accrued and unpaid interest and fees. A "Change of Control" is triggered if Thornfield Capital Partners, LP (or its affiliates, including Thornfield Capital Management LLC and Thornfield Infrastructure Fund III, LP) ceases to hold, directly or indirectly, more than 50% of the voting equity interests in Ironhaven Holdings Inc.
Maturity Date: June 3, 2031.
B. Financial Covenants (Springing / Maintenance)
The Credit Agreement contains the following financial maintenance covenants, tested on a quarterly basis commencing with the fiscal quarter ending September 30, 2024:
1. Maximum Net Leverage Ratio: The Consolidated Total Net Debt to Consolidated Adjusted EBITDA ratio shall not exceed 6.00 to 1.00 as of the last day of any fiscal quarter. "Consolidated Total Net Debt" means all funded indebtedness for borrowed money of the Borrower and its consolidated subsidiaries, minus Unrestricted Cash and Cash Equivalents (not to exceed $100,000,000 for netting purposes). "Consolidated Adjusted EBITDA" is calculated on a trailing four-quarter (LTM) basis and includes customary add-backs for non-cash charges, one-time transaction expenses, and pro forma adjustments for acquisitions, dispositions, and construction milestones.
2. Minimum Interest Coverage Ratio: The Consolidated Adjusted EBITDA to Consolidated Cash Interest Expense ratio shall not be less than 2.00 to 1.00 as of the last day of any fiscal quarter. "Consolidated Cash Interest Expense" includes all cash interest paid or accrued on all funded indebtedness of the Borrower and its consolidated subsidiaries during the applicable measurement period, excluding amortization of OID and deferred financing costs.
3. Maximum Capital Expenditure: Aggregate capital expenditures of the Borrower and its consolidated subsidiaries shall not exceed:
(a) $325,000,000 for the fiscal year ending December 31, 2024; and
(b) $250,000,000 per annum for each fiscal year ending December 31, 2025 and thereafter.
Unused amounts under the annual capital expenditure basket may be carried forward to the immediately following fiscal year in an amount not to exceed 25% of the unused basket for the prior fiscal year. Carried-forward amounts shall be deemed used after the current year's basket is fully utilized.
C. Pro Forma Capitalization at Closing
The following summarizes the pro forma capitalization of the Borrower and its consolidated subsidiaries as of the Closing Date, after giving effect to the incurrence of the Facility, the equity contribution, and the payoff of the existing mezzanine indebtedness:
The pro forma Net Leverage Ratio of 5.35x at closing is below the 6.00x maximum covenant level by approximately 0.65 turns, providing a modest but adequate cushion. The Borrower's management team projects that the Net Leverage Ratio will decrease as EBITDA grows following the completion and lease-up of Phase I of both campuses.
IV. Parties and Lender Syndicate
A. Loan Parties
Ironhaven Data Centers LLC ("IHDC" or the "Borrower") is a Delaware limited liability company formed on March 22, 2019. IHDC's Employer Identification Number (EIN) is 84-3291057. IHDC is the primary operating entity and the direct owner and operator of the Ironhaven Ashburn I campus in Loudoun County, Virginia. IHDC is also the sole quotaholder (Gesellschafter) of Ironhaven Frankfurt GmbH. Key management personnel of IHDC include:
• Marcus Delaine — Chief Executive Officer
• Rebecca Sung — Chief Financial Officer
• Jonathan Pryce-Williams — General Counsel and Secretary
Ironhaven Frankfurt GmbH ("IHDC Frankfurt" or the "Co-Borrower") is a German limited liability company (Gesellschaft mit beschränkter Haftung) registered with the commercial register (Handelsregister) of the local court (Amtsgericht) of Frankfurt am Main under registration number HRB 129457. IHDC Frankfurt's registered office is located at Hanauer Landstraße 188, 60314 Frankfurt am Main, Germany. IHDC Frankfurt's German tax identification number (Steuernummer) is 045/127/98321, and its EU VAT identification number (Umsatzsteuer-Identifikationsnummer) is DE347891205. IHDC Frankfurt is the owner and developer of the Ironhaven Frankfurt I campus. The Managing Directors (Geschäftsführer) of IHDC Frankfurt are Marcus Delaine and Katarina Bremer.
Ironhaven Holdings Inc. ("Holdings" or the "Parent Guarantor") is a Delaware corporation incorporated on February 14, 2019. Holdings' EIN is 84-3291044. Holdings is the direct owner of 100% of the membership interests in IHDC and the ultimate domestic parent entity of the Ironhaven corporate group. Holdings has executed the Guarantee Agreement and the Equity Interest Pledge Agreement in connection with the Facility.
Thornfield Capital Partners, LP (the "Sponsor") is the indirect equity owner of the Borrower through Thornfield Infrastructure Fund III, LP (vintage 2021; committed capital of $4.8 billion). The general partner of Thornfield Infrastructure Fund III, LP is Thornfield Capital Management LLC. The Sponsor's key personnel involved in the transaction are:
• David Thornfield — Founder and Managing Partner
• Elena Castillo — Partner, Infrastructure
• Graham Ashworth — Vice President, Infrastructure
B. Administrative Agent
Crescent Harbor Bank, N.A. ("Crescent Harbor") served as the Administrative Agent for the Facility and also acted as Sole Lead Arranger and Sole Bookrunner in connection with the syndication of the Facility. Crescent Harbor's principal office is located at 1200 Harbor Point Drive, Charlotte, NC 28202. Crescent Harbor holds a $200,000,000 commitment under the Facility, representing 21.05% of the aggregate commitments. Crescent Harbor also serves as the issuer and administrative agent under the existing $100,000,000 Super-Senior Revolving Credit Facility. Key contacts at Crescent Harbor include:
• Martin Gallagher — Managing Director, Leveraged Finance
• Priya Nair — Director, Leveraged Finance
• Thomas Beckett — Vice President, Loan Operations
C. Collateral Agent / Security Trustee
Pinnacle Trust Company, N.A. ("Pinnacle Trust") served as the domestic Collateral Agent under the US security documents and, through its London branch, as the German-law Security Trustee (Sicherheitentreuhänder) under the parallel-debt structure established for the benefit of the Secured Parties in connection with the German security package. Pinnacle Trust's principal office is located at 101 Constitution Avenue NW, Washington, D.C. 20001. The annual fee for Pinnacle Trust's services is $200,000, consisting of $125,000 for its domestic Collateral Agent role and $75,000 for its German Security Trustee role. The key contact at Pinnacle Trust is:
• William Hargrove — Senior Vice President, Corporate Trust
D. Syndicate Lenders — Commitment Schedule
The Facility was syndicated to seven institutional lenders. The following table sets forth the final allocation of commitments among the Lenders:
Note: The entire commitment of NordBrücke AG ($150,000,000) has been allocated to the EUR Sub-Tranche, reflecting NordBrücke AG's preference for euro-denominated exposure and its role as the Frankfurt Escrow Bank under the Frankfurt Campus Construction Escrow Agreement. The remaining €103,571,429 of the EUR Sub-Tranche commitment (approximately $112,321,429 at the Closing Date spot rate) has been allocated among the other Lenders on a pro rata basis, with the balance of each such Lender's commitment allocated to the USD Tranche.
Key contacts at each Lender are as follows:
• Sarah Dalmqvist — Managing Director, Ridgeline National Bank
• Robert Jennings — Partner, Marlowe Asset Management Meridian Capital, LLC
• Christine Fahey — Senior Portfolio Manager, Atlas Peak Credit Partners, LP
• Dr. Stefan Kleinhans — Director, Structured Finance, NordBrücke AG
• James Tanaka — Senior Vice President, Pacific Rim Institutional Lending Corp.
• Fiona Abernathy — Head of Credit Investments, Osprey Insurance Capital, Ltd.
E. Third-Party Advisors and Service Providers
The following third-party advisors and service providers were engaged in connection with the Facility:
Borrower's Counsel (US): Calderwood & Harkness LLP, 125 Broad Street, New York, NY 10004. The Calderwood & Harkness team consisted of:
• Stephanie Okafor — Partner, Banking & Finance (Responsible Partner)
• Daniel Obi — Lead Associate, Banking & Finance
• Lisa Morrow — Working Associate, Banking & Finance
• Sylvia Hartwell — Tax Specialist, Tax
Borrower's German Local Counsel: Wendt Falkenberg Rechtsanwälte PartG mbB, Frankfurt am Main, Germany. The Wendt Falkenberg team consisted of:
• Dr. Lukas Wendt — Partner
• Julia Falkenberg — Partner
Agent's / Lenders' Counsel (US): Blackthorn & Sundial Software. The Blackthorn & Brightmoor Systems US team consisted of:
• Catherine Ellsworth — Partner, Banking & Finance
• Derek Huang — Senior Associate, Banking & Finance
Agent's / Lenders' German Counsel: Blackthorn & Sundial Software (Frankfurt office). The Blackthorn & Brightmoor Systems Frankfurt team was led by:
• Maximilian Roth — Partner, Banking & Finance
Insurance Broker: Calloway & Strand Insurance Brokers, Inc. — Patricia Calloway, Principal.
Title Insurance: Keystone Title Guaranty Company — Raymond Hobbs, Senior Underwriter.
Independent Auditor: Ashford & Mercer LLP — Angela Whitfield, Engagement Partner.
Environmental Consultant: Greenline Environmental Solutions, Inc. — Dr. Ramon Quelibo, Principal Consultant.
Appraiser: Meridian Valuation Group, LLC — Howard Finch, MAI, Principal.
Rating Agency (Private): Sentinel Ratings International, LLC — Lorraine Dupont, Senior Analyst.
Existing Mezzanine Lender (refinanced): Greystone Mezzanine Fund II, LP.
V. Documents Executed and Delivered at Signing (May 15, 2024)
The following documents were executed and/or delivered by the applicable parties on or prior to the Signing Date of May 15, 2024. Certain documents were delivered in connection with the satisfaction of conditions precedent to the execution and delivery of the Credit Agreement. All documents are listed numerically and are cross-referenced to the master document index in Section XV of this memorandum.
A. Credit Agreement and Core Loan Documents
1. Senior Secured Term Loan B Credit Agreement — Dated as of May 15, 2024, among Ironhaven Data Centers LLC, as Borrower, Ironhaven Frankfurt GmbH, as Co-Borrower, Ironhaven Holdings Inc., as Parent Guarantor, Crescent Harbor Bank, N.A., as Administrative Agent, Sole Lead Arranger, and Sole Bookrunner, Pinnacle Trust Company, N.A., as Collateral Agent, and the Lenders party thereto. The Credit Agreement is governed by the laws of the State of New York and consists of 247 pages (including schedules and exhibits). The Credit Agreement bears CUSIP number 46283LAA5. Principal terms include the interest rate provisions described in Section III.A above (SOFR + 425 bps for the USD Tranche; EURIBOR + 425 bps for the EUR Sub-Tranche), the financial covenants described in Section III.B above (maximum Net Leverage Ratio of 6.00x, minimum Interest Coverage Ratio of 2.00x, and capital expenditure limitations), the mandatory prepayment provisions upon a Change of Control at 101%, affirmative and negative covenants customary for senior secured term loan B facilities, events of default (including cross-defaults to the Super-Senior Revolving Credit Facility), and detailed representations and warranties relating to, among other matters, OFAC compliance, anti-corruption laws (FCPA and UK Bribery Act 2010), and absence of sanctioned person status.
2. Guarantee Agreement — Dated as of May 15, 2024, by Ironhaven Holdings Inc. in favor of Crescent Harbor Bank, N.A., as Administrative Agent for the benefit of the Secured Parties. The Guarantee Agreement provides an unconditional, irrevocable guaranty of all obligations of the Borrower and the Co-Borrower under the Credit Agreement and the other Loan Documents. The Guarantee Agreement is governed by the laws of the State of New York.
3. First Lien / Super-Senior Intercreditor Agreement — Dated as of May 15, 2024, among Ironhaven Data Centers LLC, Crescent Harbor Bank, N.A. (in its capacities as Term Loan Agent under the Credit Agreement and as Revolver Agent under the existing $100,000,000 Super-Senior Revolving Credit Facility dated as of September 15, 2023), and Pinnacle Trust Company, N.A., as Collateral Agent. The Intercreditor Agreement establishes the relative priority of the Term Loan B obligations and the Super-Senior Revolving Credit Facility obligations with respect to the shared collateral. Under the Intercreditor Agreement, the Super-Senior Revolving Credit Facility ranks senior to the Term Loan B in respect of enforcement proceeds from shared collateral, up to the cap of $100,000,000 in principal (plus accrued interest, fees, and expenses).
4. Promissory Notes — Individual promissory notes were executed by the Borrower in favor of each of the seven Lenders in their respective committed amounts as set forth in the commitment schedule in Section IV.D above. Each promissory note is dated May 15, 2024, and evidences the obligation of the Borrower to repay the principal amount of such Lender's commitment, together with interest and other amounts due under the Credit Agreement.
B. US Security and Collateral Documents
5. US Pledge and Security Agreement — Dated as of May 15, 2024, by Ironhaven Data Centers LLC and Ironhaven Holdings Inc., as Grantors, in favor of Pinnacle Trust Company, N.A., as Collateral Agent for the benefit of the Secured Parties. The US Pledge and Security Agreement grants a first-priority security interest (subject to certain permitted liens) in substantially all personal property assets of the Grantors, including, without limitation, accounts receivable, chattel paper, commercial tort claims (to the extent identified), deposit accounts, documents, equipment, fixtures, general intangibles (including payment intangibles and software), goods, instruments, intellectual property, inventory, investment property, letter-of-credit rights, and supporting obligations. The US Pledge and Security Agreement is governed by the laws of the State of New York.
6. Equity Interest Pledge Agreement — Dated as of May 15, 2024, consisting of two related pledges:
(i) Holdings Pledge: Ironhaven Holdings Inc. pledging 100% of the membership interests in Ironhaven Data Centers LLC (represented by Unit Certificate No. 001) to Pinnacle Trust Company, N.A., as Collateral Agent; and
(ii) IHDC Pledge: Ironhaven Data Centers LLC pledging 100% of the equity interests (shares / Geschäftsanteile) in Ironhaven Frankfurt GmbH to Pinnacle Trust Company, N.A., as Collateral Agent. The pledge of the IHDC Frankfurt equity interests is subject to the parallel notarized German share pledge described below in Section V.C.
7. Deed of Trust, Assignment of Leases and Rents, Security Agreement, and Fixture Filing — Dated as of May 15, 2024, by Ironhaven Data Centers LLC, as Grantor, to Commonwealth Deed Trustee, LLC, as Trustee, for the benefit of Pinnacle Trust Company, N.A., as Beneficiary. The Deed of Trust encumbers the real property constituting the Virginia campus, consisting of two parcels identified as Tax Parcel Nos. 087-27-1234 and 087-27-1235, comprising approximately 142 acres in Loudoun County, Virginia. The Deed of Trust also constitutes an assignment of all leases, rents, issues, and profits from the Virginia campus and a security agreement covering all fixtures and personal property located thereon. The Deed of Trust was recorded with the Loudoun County Circuit Court Clerk's Office.
8. Environmental Indemnity Agreement — Dated as of May 15, 2024, by Ironhaven Data Centers LLC in favor of Pinnacle Trust Company, N.A., as Collateral Agent. The Environmental Indemnity Agreement provides an indemnity against environmental liabilities and losses arising out of or relating to the Virginia campus, including costs of remediation, claims by governmental authorities under CERCLA, RCRA, the Virginia Waste Management Act, and other applicable environmental laws.
9. Deposit Account Control Agreements (DACAs) — Dated as of May 15, 2024, executed by Ironhaven Data Centers LLC, Pinnacle Trust Company, N.A. (as Secured Party), and the applicable depository banks, granting control over IHDC's deposit accounts. DACAs were executed for the following accounts:
(a) IHDC operating account at Crescent Harbor Bank, N.A. (Account No. xxxxxx4782);
(b) IHDC construction disbursement account at Crescent Harbor Bank, N.A. (Account No. xxxxxx4783);
(c) IHDC payroll and benefits account at Crescent Harbor Bank, N.A. (Account No. xxxxxx4784); and
(d) IHDC tax reserve account at Crescent Harbor Bank, N.A. (Account No. xxxxxx4785).
All DACAs are "springing" control agreements, meaning that the Collateral Agent's exclusive control is activated only upon the delivery of a notice of exclusive control following the occurrence of an Event of Default under the Credit Agreement.
10. Intellectual Property Security Agreement — Dated as of May 15, 2024, by Ironhaven Data Centers LLC in favor of Pinnacle Trust Company, N.A., as Collateral Agent. The intellectual Property Security Agreement grants a first-priority security interest in all of IHDC's intellectual property assets, including trademarks (and applications), patents (and applications), copyrights (and applications), domain names, and related licenses. Notices of the security interest were filed with the United States Patent and Trademark Office (USPTO) and the United States Copyright Office.
11. Collateral Agent Appointment Agreement — Dated as of May 15, 2024, among Crescent Harbor Bank, N.A. (as Administrative Agent), the Lenders, and Pinnacle Trust Company, N.A. (as Collateral Agent). The Collateral Agent Appointment Agreement appoints Pinnacle Trust as the Collateral Agent for the Secured Parties and sets forth the Collateral Agent's duties, rights, indemnification, and compensation. Annual fees under the agreement are $125,000 for domestic Collateral Agent services and $75,000 for German Security Trustee services, totaling $200,000 per annum.
C. German Security and Collateral Documents
12. German Parallel Debt and Security Trust Agreement (*Sicherheitentreuhandvertrag*) — Dated as of May 15, 2024, among Ironhaven Frankfurt GmbH, Pinnacle Trust Company, N.A. (acting through its London branch, as Security Trustee), and the Lenders party to the Credit Agreement. The Parallel Debt Agreement creates a separate, independent obligation (abstraktes Schuldversprechen) of IHDC Frankfurt in favor of the Security Trustee in an amount equal to the aggregate of all secured obligations under the Credit Agreement. This parallel debt serves as the secured claim (gesicherte Forderung) to which all German-law security interests are accessory, as required under German law for the valid creation and enforcement of the German collateral package.
13. German Land Charge Agreement (*Grundschuldbestellungsurkunde*) — Notarized on May 15, 2024, by the notary public (Notar) in Frankfurt am Main. The Grundschuld is a non-accessory land charge (Buchgrundschuld) in the amount of €275,000,000 plus a one-time ancillary performance (einmalige Nebenleistung) of 20% per annum, encumbering the Frankfurt campus parcel registered in the Land Register (Grundbuch) of Frankfurt am Main-Ost, Sheet (Blatt) 54321, Cadastral District (Flur) 12, Plot (Flurstück) 789, comprising approximately 18.7 hectares. The Grundschuld instrument includes a submission to immediate enforcement (Unterwerfung unter die sofortige Zwangsvollstreckung) pursuant to Section 800 of the German Code of Civil Procedure (ZPO). Filing with the Grundbuchamt was submitted on May 16, 2024. (See Post-Closing Item No. 1 regarding registration confirmation.)
14. German Global Assignment of Receivables (*Globalzession*) — Dated as of May 15, 2024, by Ironhaven Frankfurt GmbH in favor of Pinnacle Trust Company, N.A. (as Security Trustee). The Globalzession covers all present and future receivables of IHDC Frankfurt arising from its business operations, including receivables under data center lease agreements, service contracts, and intercompany receivables. The assignment is by way of security (sicherungshalber) and is linked to the security purpose agreement.
15. German Account Pledge Agreement (*Kontoverpfändung*) — Dated as of May 15, 2024, by Ironhaven Frankfurt GmbH in favor of Pinnacle Trust Company, N.A. (as Security Trustee). The Account Pledge Agreement covers all bank accounts of IHDC Frankfurt maintained with NordBrücke AG, including the operating account and the construction escrow account. Notifications of the pledge (Verpfändungsanzeige) were delivered to NordBrücke AG, and NordBrücke AG acknowledged the pledge in writing.
16. German Security Transfer of Movable Assets (*Sicherungsübereignungsvertrag*) — Dated as of May 15, 2024, by Ironhaven Frankfurt GmbH in favor of Pinnacle Trust Company, N.A. (as Security Trustee). The security transfer covers all movable assets (bewegliche Sachen) located at the Frankfurt campus, including servers, networking equipment, power distribution units, cooling systems, generators, and other tangible personal property. The transfer is by way of security and is subject to the security purpose agreement. IHDC Frankfurt retains possession as bailee (Besitzmittler).
17. German Share Pledge Agreement (*Anteilsverpfändungsvertrag*) — Notarized on May 15, 2024, by the notary public in Frankfurt am Main. Ironhaven Data Centers LLC, as the sole quotaholder of IHDC Frankfurt, pledged 100% of the shares (Geschäftsanteile) in IHDC Frankfurt (registered under HRB 129457) to Pinnacle Trust Company, N.A. (as Security Trustee). The share pledge includes all rights appurtenant to the shares, including dividend rights and voting rights (exercisable by the pledgor absent an enforcement event). The notarized share pledge was submitted to the commercial register for annotation.
18. German Security Purpose Agreement (*Sicherungszweckerklärung*) — Dated as of May 15, 2024, by Ironhaven Frankfurt GmbH and Ironhaven Data Centers LLC in favor of Pinnacle Trust Company, N.A. (as Security Trustee). The Security Purpose Agreement is the overarching declaration linking all German-law security interests (Grundschuld, Globalzession, Kontoverpfändung, Sicherungsübereignung, and Anteilsverpfändung) to the parallel debt and defining the circumstances under which the Security Trustee may enforce the German security.
D. Legal Opinions (Delivered at Signing)
19. Calderwood & Harkness Legal Opinion — NY/DE Law — Dated May 15, 2024. Opinion letter delivered by Calderwood & Harkness LLP addressed to Crescent Harbor Bank, N.A. (as Administrative Agent), Pinnacle Trust Company, N.A. (as Collateral Agent), and the Lenders. The opinion covers the following matters: (a) due organization and good standing of IHDC under Delaware law and Ironhaven Holdings Inc. under Delaware law; (b) due authorization, execution, and delivery of the Credit Agreement and other Loan Documents by IHDC and Holdings; (c) enforceability of the Credit Agreement, the Guarantee Agreement, and the US security documents against IHDC and Holdings in accordance with their terms, subject to customary enforceability exceptions (bankruptcy, insolvency, equitable principles); (d) no conflicts with organizational documents, applicable law, or material agreements; and (e) perfection of security interests under the Uniform Commercial Code as in effect in the State of New York and the State of Delaware, including the first-priority status of the pledges of membership interests and equity interests.
20. Calderwood & Harkness Supplemental Opinion — US Regulatory — Dated May 15, 2024. Supplemental opinion letter addressing: (a) the absence of registration requirements under the Investment Company Act of 1940, as amended, with respect to the Borrower, the Co-Borrower, Holdings, and the Facility; (b) compliance of the Credit Agreement with the margin regulation requirements of Regulations T, U, and X of the Board of Governors of the Federal Reserve System (confirming that no proceeds of the Facility will be used to purchase or carry margin stock); and (c) usury analysis confirming that the interest rates and fees charged under the Credit Agreement do not violate applicable usury laws of the State of New York or the State of Virginia.
21. Calderwood & Harkness Virginia Law Opinion — Dated May 15, 2024. Opinion letter addressing: (a) the enforceability of the Deed of Trust, Assignment of Leases and Rents, Security Agreement, and Fixture Filing under the laws of the Commonwealth of Virginia; (b) the sufficiency of the Deed of Trust for recording in the Clerk's Office of the Circuit Court of Loudoun County, Virginia; (c) the creation of a valid lien on the Virginia campus parcels (Tax Parcel Nos. 087-27-1234 and 087-27-1235); and (d) Virginia documentary stamp tax and grantor's tax analysis.
22. Calderwood & Harkness Tax Opinion — Dated May 15, 2024. Prepared by Sylvia Hartwell, Tax Specialist. The tax opinion addresses the following matters: (a) the characterization of the Term Loan B as indebtedness (rather than equity) for United States federal income tax purposes; (b) the withholding tax analysis under Sections 871 and 881 of the Internal Revenue Code of 1986, as amended, with respect to interest payments to NordBrücke AG (a German corporation eligible for reduced withholding under the United States–Germany income tax treaty) and Osprey Insurance Capital, Ltd. (a Bermuda entity potentially subject to full 30% withholding, mitigated by the portfolio interest exemption under Section 881(c)); and (c) treaty benefits analysis, including the application of the limitation on benefits provisions of the applicable treaties. The opinion concludes that, provided the applicable IRS Forms W-8BEN-E are valid and current, NordBrücke AG is entitled to a reduced withholding rate of 0% on interest payments under the United States–Germany Income Tax Treaty, and Osprey Insurance Capital, Ltd. is eligible for the portfolio interest exemption subject to compliance with the requirements of Section 881(c).
23. Wendt Falkenberg Legal Opinion — German Law — Dated May 15, 2024. Opinion letter delivered by Wendt Falkenberg Rechtsanwälte PartG mbB, Frankfurt am Main, addressed to Crescent Harbor Bank, N.A. (as Administrative Agent), Pinnacle Trust Company, N.A. (as Security Trustee), and the Lenders. The opinion covers: (a) the due incorporation and existence of IHDC Frankfurt as a GmbH under German law; (b) the corporate capacity and authority of IHDC Frankfurt to enter into the Credit Agreement and the German security documents; (c) the enforceability of the German security documents under German law; (d) the creation and perfection of the Grundschuld upon registration in the Grundbuch (subject to the pending registration); and (e) the validity of the notarized share pledge.
E. Sanctions, KYC, and Regulatory Compliance Documents
24. Form of Lender KYC / OFAC Compliance Certificate — Executed by each of the seven Lenders (Crescent Harbor Bank, N.A.; Ridgeline National Bank; Marlowe Asset Management Meridian Capital, LLC; Atlas Peak Credit Partners, LP; NordBrücke AG; Pacific Rim Institutional Lending Corp.; and Osprey Insurance Capital, Ltd.) prior to the Signing Date. Each certificate contains representations and warranties that the Lender is not a Sanctioned Person, is not acting on behalf of a Sanctioned Person, and is in compliance with all applicable sanctions laws and regulations, including those administered by OFAC, the European Union, and the United Nations Security Council.
25. Borrower Beneficial Ownership Certification (FinCEN CDD Rule) — Executed by Jonathan Pryce-Williams, General Counsel, on behalf of Ironhaven Data Centers LLC, in compliance with the Beneficial Ownership Requirements for Legal Entity Customers under 31 C.F.R. § 1010.230 (the "CDD Rule"). The certification identifies the beneficial owners holding 25% or more of the equity interests in IHDC and the individual with significant responsibility for managing IHDC.
26. IHDC Frankfurt Transparenzregister Filing Confirmation — Confirmation of the filing by IHDC Frankfurt with the German Transparenzregister (Transparency Register) maintained by the Bundesanzeiger Verlag, in compliance with Section 20 of the German Anti-Money Laundering Act (Geldwäschegesetz, "GwG"). The filing identifies the beneficial owners of IHDC Frankfurt.
27. Lender Sanctions Representations Side Letter — Osprey Insurance Capital, Ltd. — Dated May 15, 2024. Enhanced sanctions representations, warranties, and indemnity letter executed by Osprey Insurance Capital, Ltd. in favor of the Borrower and the Administrative Agent. The side letter was required due to Osprey's status as a Bermuda-organized entity with a UK-person nexus (Fiona Abernathy, Head of Credit Investments, is a UK person). The side letter provides enhanced representations regarding compliance with OFAC (SDN List and Sectoral Sanctions Identifications List), EU Sanctions Regulation (Council Regulation (EU) No 269/2014), and the UK Office of Financial Sanctions Implementation (OFSI) sanctions regime. Osprey has also provided an indemnity in favor of the Borrower and the Administrative Agent for any losses arising from a breach of the sanctions representations.
28. IRS Form W-8BEN-E Package — Collected from NordBrücke AG and Osprey Insurance Capital, Ltd. prior to the Signing Date. Each Form W-8BEN-E confirms the non-U.S. status of the respective Lender and claims treaty eligibility (NordBrücke AG) or the portfolio interest exemption (Osprey Insurance Capital, Ltd.) for purposes of reduced or zero withholding on U.S.-source interest payments under the Credit Agreement. The forms were reviewed by Sylvia Hartwell (Calderwood & Harkness LLP) and confirmed to be complete and facially valid.
F. Corporate / Organizational Documents and Certificates
29. Secretary's / Officer's Certificate — IHDC — Executed by Jonathan Pryce-Williams, General Counsel and Secretary of Ironhaven Data Centers LLC, dated May 15, 2024. The certificate attests to the following: (a) incumbency of authorized officers (Marcus Delaine, CEO; Rebecca Sung, CFO; Jonathan Pryce-Williams, GC); (b) attached certified copies of the Certificate of Formation (as amended) and the Second Amended and Restated Limited Liability Company Agreement of IHDC; (c) attached resolutions of the Board of Managers of IHDC authorizing the entry into the Credit Agreement and the other Loan Documents, the borrowing of up to $950,000,000, and the granting of security interests in IHDC's assets; and (d) specimen signatures of authorized signatories.
30. Board Resolutions — Ironhaven Holdings Inc. — Resolutions of the Board of Directors of Ironhaven Holdings Inc., adopted by unanimous written consent dated May 14, 2024, authorizing (a) the execution and delivery of the Guarantee Agreement, (b) the execution and delivery of the Equity Interest Pledge Agreement (pledging 100% of IHDC membership interests), and (c) the performance by Holdings of its obligations under the Guarantee Agreement and the other Loan Documents to which it is a party.
31. Shareholder Resolutions — IHDC Frankfurt GmbH — Resolutions of Ironhaven Data Centers LLC, as the sole quotaholder (Alleingesellschafter) of IHDC Frankfurt, adopted by written resolution (Gesellschafterbeschluss) dated May 14, 2024, authorizing (a) IHDC Frankfurt's entry into the Credit Agreement as Co-Borrower, (b) the execution and delivery of the German security documents (including the Grundschuld, the Globalzession, the Kontoverpfändung, the Sicherungsübereignung, the Anteilsverpfändung, and the Sicherungszweckerklärung), and (c) the performance by IHDC Frankfurt of its obligations under the Credit Agreement and the German Loan Documents.
32. Organizational Documents Package — Certified copies of the following organizational documents were delivered to the Administrative Agent and the Collateral Agent:
(a) IHDC — Certificate of Formation (as filed with the Delaware Secretary of State on March 22, 2019, as amended); Second Amended and Restated Limited Liability Company Agreement dated February 1, 2024;
(b) Ironhaven Holdings Inc. — Certificate of Incorporation (as filed with the Delaware Secretary of State on February 14, 2019, as amended); Amended and Restated Bylaws adopted March 15, 2024;
(c) IHDC Frankfurt — Handelsregisterauszug (commercial register extract) dated May 10, 2024, confirming registration under HRB 129457; Gesellschaftsvertrag (articles of association) in the current registered version.
33. Good Standing Certificates — The following good standing certificates were obtained and delivered:
(a) Ironhaven Data Centers LLC — Certificate of Good Standing from the Delaware Secretary of State dated May 13, 2024;
(b) Ironhaven Data Centers LLC — Certificate of Good Standing (Certificate of Existence) from the Virginia State Corporation Commission dated May 13, 2024;
(c) Ironhaven Holdings Inc. — Certificate of Good Standing from the Delaware Secretary of State dated May 13, 2024.
G. Escrow Agreements
34. Escrow Agreement — Virginia Campus Construction — Dated as of May 15, 2024, among Ironhaven Data Centers LLC, Crescent Harbor Bank, N.A. (as Administrative Agent), and Pinnacle Trust Company, N.A. (as Escrow Agent). The Virginia Campus Construction Escrow Agreement provides for the deposit of $475,000,000 from the USD Tranche into an escrow account at Pinnacle Trust for the purpose of funding Phase I construction costs of the Ironhaven Ashburn I campus. Disbursements from the escrow account require delivery of a construction draw certificate by the Borrower, approved by the Administrative Agent, together with evidence of construction progress and satisfaction of specified milestone conditions. The escrow funds are invested in permitted investments (government money market funds) pending disbursement.
35. Escrow Agreement — Frankfurt Campus Construction — Dated as of May 15, 2024, among Ironhaven Frankfurt GmbH, Crescent Harbor Bank, N.A. (as Administrative Agent), and NordBrücke AG (as Frankfurt Escrow Bank). The Frankfurt Campus Construction Escrow Agreement provides for the deposit of €253,571,429 from the EUR Sub-Tranche into an escrow account at NordBrücke AG for the purpose of funding Phase I construction costs of the Ironhaven Frankfurt I campus. Disbursement conditions parallel those of the Virginia Campus Construction Escrow Agreement, with the additional requirement of compliance with applicable German building permit (Baugenehmigung) conditions.
VI. Documents Executed and Delivered at Closing (June 3, 2024)
The following documents were executed and/or delivered on the Closing Date of June 3, 2024, in satisfaction of the conditions precedent to the initial borrowing under the Credit Agreement.
A. Closing Certificates
36. Officer's Closing Certificate — IHDC — Executed by Jonathan Pryce-Williams, General Counsel and Secretary of Ironhaven Data Centers LLC, dated June 3, 2024. The Officer's Closing Certificate certifies that (a) all representations and warranties of the Borrower, the Co-Borrower, and the Parent Guarantor contained in the Credit Agreement and the other Loan Documents are true and correct in all material respects as of the Closing Date (or, in the case of representations and warranties qualified by materiality, true and correct in all respects), (b) no Default or Event of Default has occurred and is continuing or would result from the borrowing on the Closing Date, (c) all conditions precedent to the initial borrowing set forth in Section 4.01 and Section 4.02 of the Credit Agreement have been satisfied, and (d) the proceeds of the initial borrowing will be applied solely as set forth in the Credit Agreement.
37. Solvency Certificate — Executed by Rebecca Sung, Chief Financial Officer of Ironhaven Data Centers LLC, dated June 3, 2024. The Solvency Certificate certifies the solvency of IHDC and its subsidiaries on a consolidated basis after giving pro forma effect to the transactions consummated on the Closing Date, including the incurrence of the Term Loan B, the equity contribution, and the payoff of the Greystone mezzanine indebtedness. The certificate confirms that (a) the fair value of the assets of the Borrower and its subsidiaries, on a consolidated basis, exceeds their debts and liabilities (including contingent liabilities), (b) the present fair saleable value of the assets of the Borrower and its subsidiaries, on a consolidated basis, is not less than the amount that will be required to pay the probable liability on their debts and other liabilities as they become absolute and matured, (c) the Borrower and its subsidiaries, on a consolidated basis, are able to pay their debts and liabilities as they become absolute and matured, and (d) the Borrower and its subsidiaries, on a consolidated basis, do not have unreasonably small capital with which to conduct their business.
B. Payoff and Lien Release
38. Payoff Letter — Greystone Mezzanine Fund II, LP — Dated June 3, 2024, executed by Greystone Mezzanine Fund II, LP. The payoff letter confirms the total payoff amount required to discharge in full all obligations of IHDC under the Mezzanine Note Purchase Agreement dated April 4, 2023, and the related mezzanine notes (CUSIP: 39817MAB3). The total payoff amount is $132,708,333.33, calculated as follows:
The payoff letter includes (a) wire transfer instructions for the payoff wire to Greystone Mezzanine Fund II, LP's designated account at Greaves Bancorp, (b) an authorization and instruction from Greystone to IHDC and the Collateral Agent to file UCC-3 termination statements and other lien releases, and (c) a confirmation that, upon receipt of the payoff amount, Greystone will have no further claims against IHDC or its subsidiaries. The payoff amount was wired on June 3, 2024, and receipt was confirmed by Greystone.
39. UCC-3 Termination Statement and Lien Release — Greystone — UCC-3 termination statement filed with the Delaware Secretary of State on June 3, 2024, terminating the UCC-1 financing statement filed by Greystone Mezzanine Fund II, LP as Secured Party against Ironhaven Data Centers LLC as Debtor. The termination statement terminates all liens and security interests held by Greystone in the assets of IHDC. Filing confirmation from the Delaware Secretary of State is pending (see Post-Closing Item No. 5).
C. Insurance and Title
40. Insurance Compliance Certificate — Calloway & Strand — Dated June 3, 2024, executed by Patricia Calloway, Principal, Calloway & Strand Insurance Brokers, Inc. The certificate confirms that the following insurance policies are in full force and effect and meet the requirements of Section 6.07 of the Credit Agreement:
(a) Builder's risk insurance — covering Phase I construction at both the Virginia and Frankfurt campuses, with coverage limits not less than the full replacement cost of the work in progress;
(b) Property insurance — covering existing improvements and equipment at the Virginia campus;
(c) Commercial general liability insurance — with per-occurrence limits of not less than $25,000,000 and aggregate limits of not less than $50,000,000;
(d) Business interruption insurance — covering loss of rental income for a period of not less than 18 months.
Pinnacle Trust Company, N.A. has been named as loss payee and additional insured on all property, builder's risk, and business interruption insurance policies, and as additional insured on the commercial general liability insurance policy.
41. ALTA Lender's Title Insurance Policy — Keystone Title Guaranty Company — Dated June 3, 2024, issued by Keystone Title Guaranty Company (Raymond Hobbs, Senior Underwriter) in favor of Pinnacle Trust Company, N.A. (as Collateral Agent). The ALTA Lender's Title Insurance Policy insures the first-priority lien of the Deed of Trust on the Virginia campus parcels (Tax Parcel Nos. 087-27-1234 and 087-27-1235, Loudoun County, Virginia) in the coverage amount of $475,000,000. The policy is subject to the standard exceptions and the Schedule B exceptions identified in the title commitment, none of which were determined to be objectionable. The policy includes the following endorsements: ALTA 3.1 (Zoning), ALTA 9 (Comprehensive), ALTA 17 (Access and Entry), ALTA 22 (Location), ALTA 25 (Same as Survey), ALTA 28.1 (Easement — Damage or Enforced Removal), and ALTA 35 (Minerals and Other Subsurface Substances).
D. Borrowing Request
42. Borrowing Request — Dated June 3, 2024, executed by Rebecca Sung, Chief Financial Officer of Ironhaven Data Centers LLC. The Borrowing Request was delivered to the Administrative Agent pursuant to Section 2.03 of the Credit Agreement and requests the drawdown of the full aggregate commitments under the Facility as follows:
(a) USD Tranche: $675,000,000, to be funded in U.S. dollars by wire transfer to IHDC's operating account at Crescent Harbor Bank, N.A.; and
(b) EUR Sub-Tranche: €253,571,429, to be funded in euros by wire transfer to IHDC Frankfurt's escrow account at NordBrücke AG.
The Borrowing Request certifies that all conditions precedent to the borrowing set forth in the Credit Agreement have been satisfied and that no Default or Event of Default has occurred and is continuing.
E. UCC Filings (Confirmed Filed)
43. UCC-1 Financing Statements — The following UCC-1 financing statements were filed and confirmed prior to the Closing Date:
(a) Delaware Secretary of State — IHDC as Debtor: UCC-1 financing statement naming Ironhaven Data Centers LLC as Debtor and Pinnacle Trust Company, N.A. as Secured Party; filed on May 17, 2024; covering all assets of the Debtor; filing receipt confirmed;
(b) Delaware Secretary of State — Holdings as Debtor: UCC-1 financing statement naming Ironhaven Holdings Inc. as Debtor and Pinnacle Trust Company, N.A. as Secured Party; filed on May 17, 2024; covering all assets of the Debtor, including equity interests in IHDC; filing receipt confirmed;
(c) Loudoun County Circuit Court — Fixture Filing: UCC-1 financing statement filed as a fixture filing in the Clerk's Office of the Circuit Court of Loudoun County, Virginia, naming Ironhaven Data Centers LLC as Debtor and Pinnacle Trust Company, N.A. as Secured Party; filed on May 20, 2024; covering all fixtures located on Tax Parcel Nos. 087-27-1234 and 087-27-1235; filing receipt confirmed.