1043-00001 · Ironhaven Holdings · Correspondence

markup-transmittal-letter-credit-agreement.docx DOCUMENT Finance & Banking

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CONFIDENTIAL

CALDERWOOD & HARKNESS LLP Attorneys at Law 125 Broad Street New York, NY 10004

Telephone: (212) 558-4000 Facsimile: (212) 558-3588

April 5, 2024

Catherine Ellsworth, Esq. Lead Partner, Finance Blackthorn & Sundial Software 51 West 52nd Street New York, NY 10019

Re: Senior Secured Term Loan B Credit Agreement — Ironhaven Data Centers LLC ($950,000,000) C&H Matter No.: 1043-00001 Crescent Harbor Deal Ref.: CHB-LF-2024-0287 CUSIP: 46283LAA5

Dear Catherine:

I. Purpose and Transmittal

On behalf of our client, Ironhaven Data Centers LLC ("IHDC" or the "Borrower"), and Ironhaven Frankfurt GmbH (the "Co-Borrower"), Calderwood & Harkness LLP encloses herewith the Borrower's mark-up (redline against the initial Agent's draft dated March 22, 2024) of the Senior Secured Term Loan B Credit Agreement (the "Credit Agreement") among IHDC (as Borrower), Ironhaven Frankfurt GmbH (as Co-Borrower), Ironhaven Holdings Inc. (as Parent Guarantor), Crescent Harbor Bank, N.A. (as Administrative Agent), Pinnacle Trust Company, N.A. (as Collateral Agent), and the Lenders party thereto from time to time.

Enclosed herewith please find: (i) a clean copy reflecting all of the Borrower's proposed changes to the Credit Agreement as of the date hereof; and (ii) a blackline/redline showing all such changes against the Agent's initial draft circulated on March 22, 2024. We have endeavored to ensure that the redline accurately and completely reflects each modification, deletion, and addition proposed by the Borrower, and we would ask that your team verify the accuracy of the blackline upon receipt.

We note that the enclosed mark-up has been prepared in close coordination with IHDC management, including Jonathan Pryce-Williams (General Counsel), Rebecca Sung (Chief Financial Officer), and Natasha Greenfeld (Vice President, Treasury & Capital Markets), as well as with the representatives of Thornfield Capital Partners, LP, specifically Elena Castillo (Managing Director) and Graham Ashworth (Principal). Each of the substantive commercial positions reflected in the mark-up has been reviewed and approved by the Borrower's management team and its sponsor.

Additionally, Calderwood & Harkness separately coordinated with Wendt Falkenberg Rechtsanwälte PartG mbB (Dr. Lukas Wendt, Partner) on all matters affecting the German Co-Borrower provisions, including the representations and covenants applicable to Ironhaven Frankfurt GmbH, the German-law security package references, and the parallel-debt structure contemplated by the financing. The positions reflected in the mark-up with respect to German-law matters are consistent with the advice received from Dr. Wendt and his team.

We set forth below a high-level summary of the principal changes proposed by the Borrower in the enclosed mark-up. Detailed comments are embedded directly in the redline. For ease of reference, we have organized the summary into the following categories corresponding to the relevant articles and sections of the Credit Agreement.

II. Summary of Key Changes

1. Definitions (Article I)

The Borrower proposes a number of modifications to the defined terms set forth in Article I of the Credit Agreement. The most significant of these are summarized below.

"Adjusted EBITDA." The Borrower proposes expanded add-backs to the definition of "Adjusted EBITDA" to reflect the construction-phase nature of the Borrower's current operations and the pipeline of contracted revenue that will contribute to EBITDA as the Virginia and Frankfurt campuses reach commercial operation. Specifically, the Borrower proposes that the definition permit add-backs for (a) pre-opening costs for data-center campuses under construction (including both the Virginia campus at Ashburn and the Frankfurt campus at Ironhaven Frankfurt I), which costs are one-time in nature and will cease upon commercial operation of the respective facilities; (b) non-recurring transaction costs and expenses incurred in connection with the negotiation, documentation, syndication, and closing of this financing, capped at $32,500,000 in the aggregate; and (c) projected revenue from executed letters of intent for data-center capacity, including specifically the Stratos Cloud Services, Inc. pre-lease for 30 MW of critical IT load at the Ironhaven Ashburn I facility, generating approximately $14,400,000 in annualized revenue, and the Euronova Digital GmbH pre-lease for 20 MW of critical IT load at the Ironhaven Frankfurt I facility, generating approximately €9,800,000 in annualized revenue. The Borrower proposes that any add-back for projected revenue from letters of intent be subject to a cap of 15% of pro forma Adjusted EBITDA, which the Borrower believes provides adequate protection to the Lenders while permitting the Borrower to receive appropriate credit for its contracted pipeline. These add-backs are consistent with precedent transactions in the data-center financing market and reflect the unique economics of hyperscale data-center development.

"Change of Control." The Borrower proposes narrowing the definition of "Change of Control" so that a change of control is triggered only when Thornfield Capital Partners, LP (or its controlled affiliates, including Thornfield Infrastructure Fund III, LP) ceases to hold, directly or indirectly, more than 50% of the total voting equity interests of Ironhaven Holdings Inc. The Agent's draft included a broader formulation that would have captured any change in "operational control" of the Borrower or any change in the composition of the board of directors of the Borrower or Ironhaven Holdings Inc. such that a majority of the directors were not individuals who were directors on the Closing Date or were nominated or approved by such individuals. The Borrower has deleted these additional prongs as inconsistent with market practice for sponsor-backed term loan B facilities, where the standard trigger is tied exclusively to equity ownership thresholds. The retention of the operational-control and board-composition prongs would unduly restrict the Sponsor's ability to manage the portfolio company in the ordinary course and could inadvertently trigger a mandatory prepayment event based on routine corporate governance changes.

"Consolidated Total Net Debt." The Borrower proposes that unrestricted cash and cash equivalents be deducted from Consolidated Total Debt without a cap in calculating Consolidated Total Net Debt. The Borrower currently projects unrestricted cash and cash equivalents of approximately $62.5 million at the anticipated Closing Date. The Agent's draft imposed a $50,000,000 cap on the amount of cash and cash equivalents that could be netted against Consolidated Total Debt for purposes of this calculation. The Borrower's position is that no such cap is market for term loan B facilities of this nature, and the imposition of a netting cap would artificially inflate the Borrower's reported leverage and potentially cause a technical covenant default during periods when the Borrower holds elevated cash balances in advance of major construction disbursements. We are not aware of any recent comparable transaction in the data-center space that includes a netting cap of this kind, and we would welcome the opportunity to discuss supporting precedent if the Agent disagrees with this position.

"Permitted Indebtedness." The Borrower proposes additional carve-outs from the definition of "Permitted Indebtedness" to accommodate operational needs of the Borrower and the Co-Borrower. These include: (a) intercompany loans from IHDC to Ironhaven Frankfurt GmbH, which are necessary for the on-lending of a portion of the term loan proceeds to fund the Frankfurt campus construction and related development costs; (b) capital lease obligations incurred in the ordinary course of business, not to exceed $25,000,000 in the aggregate at any time outstanding, which the Borrower expects to utilize for data-center equipment, mechanical and electrical systems, and related infrastructure; and (c) purchase money indebtedness not to exceed $15,000,000 in the aggregate at any time outstanding, which may be incurred in connection with the acquisition of generators, uninterruptible power supply systems, and other critical infrastructure components. A revised schedule of Permitted Indebtedness (proposed Schedule 7.01) is enclosed as Enclosure 3.

"Net Leverage Ratio." The Borrower proposes conforming changes to the definition of "Net Leverage Ratio" to reflect the revised definition of Consolidated Total Net Debt described above (i.e., removal of the cap on nettable cash and cash equivalents). No other changes to the methodology for calculating the Net Leverage Ratio are proposed.

2. Interest Rate Provisions (Article II)

SOFR Benchmark Rate. The Borrower accepts the Term SOFR benchmark rate plus an applicable margin of 425 basis points (4.25%) as agreed in the Commitment Letter dated February 28, 2024, among the Borrower, Crescent Harbor Bank, N.A., and the other Commitment Parties named therein. The Borrower has not proposed any change to the applicable margin or the benchmark rate.

SOFR Floor. The Borrower accepts the 0.50% SOFR floor as set forth in the Commitment Letter. No change is proposed.

EURIBOR Provisions (EUR Sub-Tranche). With respect to the Euro-denominated sub-tranche of the Term Loan B facility, the Borrower proposes conforming the EURIBOR fallback language to the form recommended by the Loan Market Association (the "LMA") rather than the ARRC-derived fallback language included in the Agent's draft. The LMA form is the prevailing standard in European leveraged finance transactions and is more appropriate for a facility that includes a Euro-denominated tranche originated and syndicated to European institutional investors. The Borrower's German counsel at Wendt Falkenberg has reviewed the proposed EURIBOR fallback language and confirms that it is consistent with the approach used in recent German-law governed credit facilities. The EURIBOR floor of 0.00% is accepted as agreed in the Commitment Letter.

Default Rate. The Borrower proposes reducing the default rate premium from 4.00% over the otherwise applicable interest rate (as proposed by the Agent) to 2.00% over the otherwise applicable interest rate. A 2.00% default rate premium is more consistent with recent comparable data-center financings, including the Tidewater Partners LLC term loan B (2023, default rate premium of 2.00%), the Vantage Data Centers term loan B (2023, default rate premium of 2.00%), and the Halcyon & Co. term loan (2022, default rate premium of 2.00%). The 4.00% premium proposed in the Agent's draft is, in the Borrower's experience, significantly above market for investment-grade-adjacent borrowers in the digital infrastructure sector.

Interest Period Selection. The Borrower proposes adding a 6-month interest period option in addition to the 1-month and 3-month interest period options included in the Agent's draft. The availability of a 6-month interest period provides the Borrower with additional flexibility in managing its interest expense and cash flow, particularly during the construction phase when cash disbursements may be lumpy and may not align well with shorter interest period cycles. The 6-month option is standard in most broadly syndicated term loan B facilities and is contemplated by the Commitment Letter.

EUR Sub-Tranche Amount. The EUR sub-tranche amount is confirmed at €253,571,429 (equivalent to $275,000,000 at an assumed EUR/USD spot rate of 1.0846, as established in the Commitment Letter). No change is proposed to the commitment allocations per lender. The Borrower notes that NordBrücke AG's $150,000,000 commitment has been allocated entirely to the Frankfurt sub-tranche (EUR sub-tranche), consistent with the syndication strategy discussed with Crescent Harbor Bank and the Borrower's preference for matching the currency of the loan with the currency of the underlying asset and revenue stream.

3. Amortization and Prepayment Provisions (Article II / Article III)

Scheduled Amortization. No change is proposed to the scheduled amortization of 1.00% per annum of the original aggregate principal amount of the Term Loans, payable in equal quarterly installments. This results in an aggregate quarterly amortization payment of $2,375,000 (calculated as 1.00% × $950,000,000 ÷ 4), allocated between the USD tranche (quarterly amount of $1,687,500) and the EUR sub-tranche (quarterly amount of €633,928.57). The Borrower accepts the amortization schedule as drafted.

Mandatory Prepayment — Excess Cash Flow. The Borrower accepts the 75% / 50% / 25% step-down structure for the annual Excess Cash Flow sweep, which steps down from 75% to 50% when the Net Leverage Ratio is less than or equal to 4.50x, and further steps down from 50% to 25% when the Net Leverage Ratio is less than or equal to 3.50x. However, the Borrower proposes two important modifications to the calculation of Excess Cash Flow. First, the Borrower proposes that capital expenditures funded from the Virginia and Frankfurt construction escrow accounts be excluded from the calculation of Excess Cash Flow, on the basis that such expenditures are funded from earmarked proceeds and do not represent discretionary cash flow available for debt service. Second, the Borrower proposes that amounts paid as scheduled amortization during the relevant fiscal year be deducted in calculating Excess Cash Flow, consistent with market practice and the principle that a borrower should not be penalized through the Excess Cash Flow sweep for making amortization payments that have already reduced the outstanding principal of the term loans.

Mandatory Prepayment — Change of Control. The Borrower accepts the mandatory prepayment obligation at 101% of outstanding principal plus accrued and unpaid interest upon the occurrence of a Change of Control, subject to the revised definition of "Change of Control" described in Section 1 above. As noted, the Borrower has proposed narrowing the Change of Control definition to focus exclusively on the equity ownership threshold, which is the appropriate trigger for a mandatory prepayment obligation of this kind.

Mandatory Prepayment — Asset Sales. The Borrower proposes that the reinvestment period for net cash proceeds from asset dispositions be extended from 12 months (as provided in the Agent's draft) to 18 months. The 18-month reinvestment period is appropriate given the long lead times associated with data-center development and construction, where site selection, permitting, design, and initial construction activities can easily extend beyond 12 months. The Borrower further proposes that net cash proceeds be eligible for reinvestment in data-center assets of like kind or quality, including the acquisition of new data-center sites, expansion of existing facilities, and investment in critical power and cooling infrastructure. In addition, the Borrower proposes a de minimis threshold of $10,000,000, below which no mandatory prepayment would be required from asset sale proceeds. The de minimis threshold is intended to avoid the administrative burden and expense of processing small mandatory prepayments that are immaterial in the context of a $950,000,000 facility.

Voluntary Prepayment — Soft Call Premium. The Borrower accepts the 101 soft call premium applicable to voluntary prepayments made within 6 months following the Closing Date (i.e., through December 3, 2024, based on an assumed Closing Date of June 3, 2024). However, the Borrower proposes that the soft call premium not apply to prepayments made from the proceeds of Excess Cash Flow sweeps or from insurance or condemnation proceeds. The rationale for this exclusion is that Excess Cash Flow sweeps are mandatory in nature and should not be subject to a premium that is designed to compensate lenders for voluntary early repayment, and insurance and condemnation proceeds represent involuntary recovery events that should not give rise to an additional cost to the Borrower.

OID. The original issue discount is confirmed at 99.50 (50 basis points discount), resulting in net proceeds to the Borrower of $945,250,000. No change is proposed.

4. Financial Covenants (Article VII)

Maximum Net Leverage Ratio. The Borrower accepts the 6.00x maximum Net Leverage Ratio covenant as the steady-state level. However, the Borrower proposes a covenant holiday for the first two testing periods (September 30, 2024 and December 31, 2024) in recognition of the construction-phase nature of the Virginia and Frankfurt campuses and the associated ramp-up period for EBITDA. During the construction phase, the Borrower expects to incur significant capital expenditures and pre-opening costs that will depress Adjusted EBITDA relative to the post-stabilization run rate, while the full principal amount of the Term Loans will be outstanding. As an alternative to the covenant holiday, the Borrower proposes that the Maximum Net Leverage Ratio be set at 6.50x for the first four fiscal quarters following the Closing Date (i.e., through the testing period ending June 30, 2025), stepping down to 6.00x thereafter. The Borrower notes that the current pro forma Net Leverage Ratio at closing is approximately 5.35x (based on $887,500,000 of Net Total Debt divided by $165,800,000 of Adjusted EBITDA for the LTM period ending March 31, 2024), providing adequate cushion under a 6.00x covenant but limited headroom during the construction ramp-up. The Borrower believes that either approach (a covenant holiday or an elevated threshold for the initial quarters) is reasonable and consistent with the economics of this transaction, and we are prepared to discuss the relative merits of each approach with the Agent and the Lenders.

Minimum Interest Coverage Ratio. The Borrower accepts the 2.00x Minimum Interest Coverage Ratio as the steady-state level. Consistent with the approach described above for the Net Leverage Ratio, the Borrower proposes the same covenant holiday for the first two testing periods, or in the alternative, that the Minimum Interest Coverage Ratio be set at 1.75x for the first four fiscal quarters following the Closing Date, stepping up to 2.00x thereafter.

First Testing Date. The Borrower notes that the Credit Agreement as currently drafted provides for quarterly financial covenant testing commencing as of September 30, 2024 (i.e., the first full fiscal quarter-end following the anticipated Closing Date of June 3, 2024). The Borrower proposes deferring the first testing date to December 31, 2024, to allow the Borrower a full two quarters of operations following closing before the financial covenants are first tested. This deferral is particularly important in light of the construction-phase dynamics described above and is consistent with the Borrower's proposal for a covenant holiday or elevated thresholds during the initial period.

Maximum Capital Expenditure. The Borrower proposes increasing the fiscal year 2024 capital expenditure cap from $325,000,000 (as set forth in the Agent's draft) to $375,000,000 to accommodate potential acceleration of the Virginia campus construction schedule. The Borrower has recently received preliminary indications from its general contractor, Drayton Corporation, that certain civil and structural work at the Ashburn campus may be advanced ahead of the original schedule, which would require front-loading a portion of the capital expenditure budget. The additional $50,000,000 of headroom is intended to provide the Borrower with the flexibility to capture these potential schedule efficiencies without triggering a covenant breach. The fiscal year 2025 and subsequent years' cap of $250,000,000 per year, with a 25% carry-forward of unused amounts from the prior fiscal year, is accepted as drafted.

Equity Cure Right. The Borrower proposes the addition of an equity cure provision to Article VII of the Credit Agreement. The equity cure right would permit Thornfield Capital Partners, LP (or its controlled affiliates) to make equity contributions to the Borrower (directly or through Ironhaven Holdings Inc.) that would be deemed added to Adjusted EBITDA for purposes of curing a financial covenant breach in any fiscal quarter in which such breach occurs. The equity cure right would be subject to the following limitations: (a) the equity cure right may be exercised no more than two times in any four consecutive fiscal quarters; (b) the equity cure right may be exercised no more than four times over the life of the facility; and (c) the minimum cure amount for any individual cure shall be $5,000,000. The Borrower has enclosed a proposed form of Equity Cure Notice as Enclosure 5. The equity cure right is a standard feature of sponsor-backed term loan B facilities and provides an important safety valve during the construction-phase transition, particularly given the tight covenant headroom discussed above. The Borrower notes that the equity cure right is intended to address temporary EBITDA shortfalls during the ramp-up period and is not intended to permit the Borrower to operate with a sustained covenant breach.

5. Representations and Warranties (Article IV)

Sanctions / OFAC Representation. The Borrower accepts the OFAC and sanctions representations substantially as drafted in the Agent's draft. The Borrower confirms that neither IHDC, Ironhaven Frankfurt GmbH, Ironhaven Holdings Inc., nor any of their respective directors or officers, is a Sanctioned Person (as defined in the Credit Agreement) or is located, organized, or resident in a Sanctioned Country. However, the Borrower proposes adding a knowledge qualifier ("to the knowledge of the Borrower, after due inquiry") with respect to representations regarding sub-contractors, downstream counterparties, tenants, and other third parties that are not under the direct control of the Borrower. The Borrower has conducted, and will continue to conduct, OFAC and sanctions screening of its material counterparties, but cannot reasonably make an unqualified representation with respect to the sanctions status of all such parties throughout the supply chain.

Anti-Money Laundering. The Borrower accepts the anti-money laundering representations as drafted. The Borrower notes for the record that IHDC has filed its beneficial ownership certification with FinCEN in accordance with the Corporate Transparency Act and applicable regulations, and Ironhaven Frankfurt GmbH has made its filing with the German Transparenzregister (transparency register) as required under the Geldwäschegesetz (GwG). Copies of each filing are available for review upon request.

Environmental Representations. The Borrower proposes qualifying the environmental representations set forth in the Credit Agreement with the phrase "in all material respects" and limiting the look-back period for environmental conditions and compliance history to five years from the Closing Date. The Borrower notes that Greenline Environmental Solutions, Inc. has completed Phase I environmental site assessments for both the Virginia campus (Ashburn site) and the Frankfurt campus, and that neither assessment identified any recognized environmental conditions (RECs) within the meaning of ASTM E1527-21. The Phase I reports are being furnished separately to the Administrative Agent and the Collateral Agent. The limitation to "in all material respects" and the five-year look-back period are consistent with the scope of the Phase I assessments and are appropriate given the nature of the properties (purpose-built data-center facilities on previously developed commercial land).

Material Contracts. The Borrower proposes that the threshold for disclosure of material contracts on the schedules to the Credit Agreement be raised from $5,000,000 in annual value (as proposed in the Agent's draft) to $10,000,000 in annual value. The lower threshold would require disclosure of a large number of routine vendor contracts, maintenance agreements, and service contracts that are not individually material to the Borrower's business or financial condition. The $10,000,000 threshold would ensure that truly material agreements — including the major pre-lease agreements, power purchase agreements, and construction contracts — are disclosed, while avoiding the administrative burden of cataloging immaterial arrangements.

Financial Statements. The Borrower confirms that audited financial statements of the Borrower and its consolidated subsidiaries prepared in accordance with GAAP, audited by Ashford & Mercer LLP, for the last twelve months ended September 30, 2023 (showing Revenue of $412,600,000; Adjusted EBITDA of $158,300,000; and Total Assets of $1,870,000,000) have been delivered to the Administrative Agent. These financial statements will be supplemented with unaudited interim financial statements for the period through March 31, 2024 (reflecting Adjusted EBITDA for the LTM period of $165,800,000), which will be delivered prior to the Closing Date. The Borrower expects that the interim financials will be available by no later than May 1, 2024, and will be circulated to the Agent and the Lenders promptly upon completion.

6. Negative Covenants (Article VI)

Restricted Payments. The Borrower proposes the addition of a builder basket permitting distributions to equityholders from retained Excess Cash Flow that is not swept pursuant to the annual Excess Cash Flow mandatory prepayment mechanism. The builder basket would accumulate on a cumulative basis commencing from the Closing Date and would be available for distributions only so long as no Event of Default has occurred and is continuing and the pro forma Net Leverage Ratio (after giving effect to the proposed distribution) does not exceed 5.00x. In addition, the Borrower proposes a general basket of $10,000,000 per fiscal year for tax distributions to Thornfield Infrastructure Fund III, LP (through Ironhaven Holdings Inc.) to cover the tax liabilities of Thornfield Infrastructure Fund III, LP and its partners attributable to the income of the Borrower and its subsidiaries that flows through to such partners under applicable tax law. Tax distributions of this kind are standard in sponsor-backed leveraged finance transactions involving pass-through entities and are necessary to ensure that the Sponsor and its limited partners are not required to fund tax liabilities out of pocket.

Indebtedness Covenant. In addition to the expanded Permitted Indebtedness baskets described in Section 1 above (intercompany loans, capital leases up to $25,000,000, and purchase money indebtedness up to $15,000,000), the Borrower proposes a general indebtedness basket of $20,000,000, permitting the Borrower and its subsidiaries to incur unsecured indebtedness not to exceed $20,000,000 in the aggregate at any time outstanding for general corporate purposes. The general basket provides the Borrower with flexibility to address unanticipated short-term financing needs without the necessity of seeking a consent or waiver from the Required Lenders.

Liens. The Borrower proposes customary permitted liens carve-outs, including: (a) liens securing purchase money indebtedness in an aggregate amount not to exceed $15,000,000 (consistent with the purchase money indebtedness basket described above); (b) deposits and pledges securing insurance obligations, workers' compensation obligations, and similar statutory requirements incurred in the ordinary course of business; (c) liens arising by operation of law, including mechanic's liens, materialmen's liens, warehousemen's liens, and similar liens arising in connection with the construction of the Virginia and Frankfurt data-center campuses, provided that such liens are discharged or bonded within 60 days of the date on which the Borrower becomes aware of such liens; and (d) existing liens disclosed on Schedule 6.02 to the Credit Agreement, which are limited to the existing UCC-1 financing statement filed by Greystone Mezzanine Fund II, LP against IHDC in the Delaware Secretary of State's office, which will be terminated at or prior to closing via a UCC-3 termination statement to be delivered by Greystone Mezzanine Fund II, LP. A revised schedule of Permitted Liens (proposed Schedule 6.02) is enclosed as Enclosure 4.

Investments. The Borrower proposes a general investments basket of $15,000,000, permitting the Borrower and its subsidiaries to make investments (including loans, advances, equity contributions, and acquisitions) not to exceed $15,000,000 in the aggregate at any time outstanding. In addition, the Borrower proposes that investments in wholly-owned subsidiaries of the Borrower (including Ironhaven Frankfurt GmbH) be permitted without limitation, to facilitate intercompany transfers of funds necessary to support the Frankfurt campus development and operations.

Asset Sales. The Borrower's position with respect to asset sales is addressed in Section 3 above in connection with the reinvestment right and the proposed 18-month reinvestment period.

Affiliate Transactions. The Borrower proposes that transactions with affiliates be permitted provided that such transactions are on terms no less favorable to the Borrower than would be obtained in a comparable arm's-length transaction with an unrelated third party. For transactions with affiliates involving aggregate consideration in excess of $5,000,000, the Borrower proposes that the arm's-length standard be satisfied by approval of the board of directors (or a committee thereof) of IHDC or Ironhaven Holdings Inc. Customary carve-outs are proposed for: (i) management fees payable to Thornfield Capital Partners, LP pursuant to the existing management services agreement (annual fee of $2,000,000 plus reimbursement of out-of-pocket expenses); (ii) intercompany transactions between the Borrower and its wholly-owned subsidiaries; and (iii) compensation and benefits arrangements with directors, officers, and employees approved by the board of directors.

7. Conditions Precedent to Closing (Article V)

The Borrower has reviewed the conditions precedent to closing set forth in Article V of the Credit Agreement and proposes the following modifications:

Appraisal. The Agent's draft requires MAI appraisals showing an appraised value of at least 1.50x the allocated loan amount for each campus. The Borrower proposes that the appraisal threshold be reduced to 1.25x the allocated loan amount. The Borrower notes that Meridian Valuation Group, LLC (Howard Finch, MAI, Senior Managing Director) has been engaged to prepare the appraisals and that preliminary indications of value support a combined appraised value well in excess of the 1.25x threshold. The 1.50x threshold proposed by the Agent is above market for construction-phase data-center facilities, where the appraised value necessarily reflects the "as-is" condition of the property during the construction period rather than the "as-stabilized" value upon completion and lease-up. A 1.25x threshold is more appropriate and consistent with recent comparable transactions.

Title Insurance. The Borrower confirms that Keystone Title Guaranty Company will issue an ALTA Lender's Title Insurance Policy (ALTA 2021 form) for the Virginia campus (Ashburn site) with coverage in the amount of $475,000,000 (representing the allocated loan amount for the Virginia campus). The Borrower proposes that standard title exceptions for utility easements, public road rights-of-way, and zoning conditions applicable to the property be treated as permitted exceptions under the Credit Agreement, provided that such exceptions do not, individually or in the aggregate, materially interfere with the Borrower's use and operation of the property as a data-center campus. Title insurance for the Frankfurt campus will be addressed through the German-law security package, as title insurance is not customary in German real estate transactions.

Insurance. The Borrower confirms that Calloway & Strand Insurance Brokers, Inc. (Patricia Calloway, Senior Vice President) is placing the required insurance program for both campuses, including builder's risk insurance (during the construction phase), commercial property insurance, general liability insurance, and business-interruption insurance. The Borrower proposes that the required coverage amounts for property insurance be set at full replacement cost of the insured improvements, rather than the loan amount as proposed in the Agent's draft. Replacement cost coverage is the standard in data-center financing and ensures that the collateral can be fully restored in the event of a total loss, regardless of the relationship between the replacement cost and the outstanding loan balance.

Environmental. The Borrower proposes that the Phase I environmental site assessments completed by Greenline Environmental Solutions, Inc. for both campuses be deemed sufficient to satisfy the environmental conditions precedent to closing. Phase II environmental site assessments should be required only if a Phase I assessment identifies recognized environmental conditions (RECs) within the meaning of ASTM E1527-21 that warrant further investigation. As noted above, neither of the Phase I assessments completed to date identified any RECs, and the Borrower does not believe that Phase II assessments are warranted or necessary.

German-Law Security. The Borrower notes that registration of the Grundschuld (non-accessory land charge) with the Frankfurt Grundbuchamt (land registry office), specifically the Grundbuch von Frankfurt am Main-Ost, Blatt 54321, Flur 12, Flurstück 789, may not be completed prior to the anticipated Closing Date of June 3, 2024, due to the processing times of the German land registry and the requirement for prior notarization of the Grundschuldbestellungsurkunde (land charge creation deed). The Borrower proposes that the Closing Date condition with respect to the German-law real estate security be satisfied by delivery of a notarized Grundschuldbestellungsurkunde executed before a German notary, together with evidence of the filing of the application for registration of the Grundschuld with the Grundbuchamt, with actual registration to be completed within 90 days following the Closing Date. This post-closing arrangement is customary in cross-border transactions involving German real property security, where registration timelines are outside the control of the parties, and is consistent with the approach recommended by Dr. Wendt at Wendt Falkenberg.

Legal Opinions. The Borrower confirms that the following legal opinions will be delivered at closing:

(a) Calderwood & Harkness LLP will deliver opinions covering (i) New York and Delaware law matters, including due authorization, enforceability of the Credit Agreement and related documents, and perfection of security interests under the Uniform Commercial Code; (ii) Virginia law matters, including enforceability of the Deed of Trust and related real property security documents; (iii) U.S. regulatory matters, including confirmation that the Borrower is not required to register as an investment company under the Investment Company Act of 1940, that the extension of credit does not violate the margin regulations of the Board of Governors of the Federal Reserve System (Regulations T, U, and X), and that the interest rate provisions of the Credit Agreement do not violate applicable usury laws; and (iv) U.S. federal income tax matters, including the characterization of the Term Loans as indebtedness for U.S. federal income tax purposes.

(b) Wendt Falkenberg Rechtsanwälte PartG mbB (Dr. Lukas Wendt and Julia Falkenberg) will deliver a German law opinion addressing (i) the capacity and due authorization of Ironhaven Frankfurt GmbH to enter into the Credit Agreement and the German security documents; (ii) the enforceability of the German security documents (including the Grundschuld, the account pledges, and the assignment of receivables by way of security); and (iii) the validity and enforceability of the parallel-debt structure under German law.

Solvency Certificate. The Borrower confirms that Rebecca Sung, in her capacity as Chief Financial Officer of IHDC, will deliver a solvency certificate at closing in the form attached to the Credit Agreement, certifying the solvency of the Borrower and its subsidiaries on a consolidated basis after giving effect to the transactions contemplated by the Credit Agreement, including the incurrence of the Term Loans and the grant of the security interests.

Lender KYC/Sanctions Compliance. The Borrower notes that the Credit Agreement as currently drafted requires each Lender to deliver an OFAC/sanctions compliance certificate prior to the initial funding of the Term Loans. The Borrower proposes that this requirement be structured as a condition to each individual Lender's obligation to fund its commitment, rather than as a condition to closing generally. Under this approach, the failure of a single Lender to deliver its OFAC/sanctions compliance certificate would not delay the closing for the other Lenders or the Borrower, but would instead result in a failure of that Lender's individual funding condition, with the defaulting Lender's commitment to be treated in accordance with the "defaulting lender" provisions of the Credit Agreement. The Borrower believes this approach is particularly appropriate in light of the enhanced due diligence currently being conducted on Osprey Insurance Capital, Ltd. (a Bermuda-domiciled entity) due to its UK-person nexus and the corresponding requirement for screening under the UK Office of Financial Sanctions Implementation (OFSI) sanctions regime in addition to OFAC screening. The Borrower does not wish the closing timeline for the entire facility to be held hostage to the completion of enhanced due diligence on a single Lender holding a $75,000,000 commitment.

8. Agency and Collateral Agent Provisions (Article IX / Article X)

Collateral Agent Fees. The Borrower notes the fee schedule for the Collateral Agent, Pinnacle Trust Company, N.A., consisting of $125,000 per annum as domestic collateral agent fee and $75,000 per annum as German security trustee fee, for a total annual fee of $200,000. The Borrower does not propose any change to these fees.

Collateral Agent Indemnification. The Borrower proposes that the Borrower's indemnification obligation to the Collateral Agent, as set forth in Article X of the Credit Agreement, be limited to losses, claims, damages, liabilities, and related expenses that do not arise from the Collateral Agent's own gross negligence, willful misconduct, or bad faith (as determined by a court of competent jurisdiction in a final, non-appealable judgment). The Agent's draft contains a broader indemnification that would require the Borrower to indemnify the Collateral Agent even in circumstances where the Collateral Agent's own conduct contributed to the loss. The Borrower's proposed limitation is standard in trust and agency arrangements and appropriately allocates risk between the Borrower and the Collateral Agent.

Parallel Debt Structure. The Borrower notes that the German security package utilizes a parallel-debt (Parallelschuld) structure, with Pinnacle Trust Company, N.A., acting through its London branch, serving as Security Trustee (Sicherheitentreuhänder) under the German Parallel Debt and Security Trust Agreement (Sicherheitentreuhandvertrag). The parallel-debt mechanism is necessary under German law to permit the creation of security interests in favor of a trustee acting for the benefit of the syndicate of Lenders, as German law does not recognize the concept of a security agent holding security for the benefit of undisclosed principals in the same manner as New York law. The Borrower proposes that Article IX of the Credit Agreement include express recognition of the parallel-debt mechanism and cross-references to the Sicherheitentreuhandvertrag, to ensure that the Credit Agreement and the German security documents are fully integrated and that the parallel debt is recognized as a valid and enforceable obligation of the Borrower and the Co-Borrower.

9. Intercreditor Provisions

The Borrower notes that the Credit Agreement must be consistent with the First Lien / Super-Senior Intercreditor Agreement (the "Intercreditor Agreement") among IHDC, Crescent Harbor Bank, N.A. (acting in its dual capacity as Administrative Agent under the Term Loan B facility and as Revolver Agent under the existing $100,000,000 Super-Senior Revolving Credit Facility dated October 15, 2023), and Pinnacle Trust Company, N.A. as Collateral Agent. The Intercreditor Agreement establishes the relative priorities, enforcement rights, and waterfall mechanics as between the Super-Senior Revolving Credit Facility and the Term Loan B facility, including the Super-Senior priority of the Revolving Credit Facility with respect to enforcement proceeds and the standstill provisions applicable to the Term Loan B Lenders.

The Borrower proposes the insertion of a cross-reference to the Intercreditor Agreement in Article XI of the Credit Agreement, together with a provision stating that the terms of the Credit Agreement are subject to the terms of the Intercreditor Agreement to the extent of any conflict or inconsistency. This ensures that the Intercreditor Agreement governs in the event of any conflict between the two agreements with respect to enforcement rights, priority of payments, or similar matters.

10. Miscellaneous / Boilerplate (Article XI)

Governing Law. The Borrower confirms that the Credit Agreement will be governed by and construed in accordance with the laws of the State of New York, without regard to conflicts-of-law principles. The German-law security documents (including the Grundschuldbestellungsurkunde, the account pledge agreements, the assignment agreements, and the Sicherheitentreuhandvertrag) will be governed by and construed in accordance with German law. No change is proposed with respect to governing law.

Assignment Provisions. The Borrower proposes that any assignment of Term Loans by a Lender to a third party require the prior written consent of the Borrower, which consent shall not be unreasonably withheld, conditioned, or delayed, unless (a) an Event of Default has occurred and is continuing at the time of the assignment, in which case no Borrower consent shall be required, or (b) the assignment is made to another Lender, an affiliate of a Lender, or an approved fund (as defined in the Credit Agreement), in which case no Borrower consent shall be required. The Borrower further proposes a minimum assignment threshold of $5,000,000, below which no assignment shall be permitted (other than assignments to affiliates of a Lender or approved funds), to prevent fragmentation of the lending syndicate and the associated administrative burden of dealing with a large number of small holders.

Disqualified Institution List. The Borrower proposes the inclusion of a "disqualified institution" provision in the assignment section of the Credit Agreement, pursuant to which the Borrower would designate a list of entities (and their affiliates) to which assignments of Term Loans would not be permitted. The disqualified institution list would include competitors of the Borrower in the data-center industry (including, without limitation, Westmark Group, Thackeray & Co., Halcyon & Co., Larkspur Group, and Vantage Data Centers LLC, and their respective affiliates), as well as any other entity that the Borrower designates in writing to the Administrative Agent from time to time. This provision is intended to protect the Borrower's confidential information and competitive position by preventing the Borrower's competitors from becoming Lenders under the facility and thereby gaining access to the Borrower's financial information, business plans, and other proprietary data that is shared with the Lender group.

Notices. The Borrower proposes updated notice addresses for all parties, as follows:

If to the Borrower: Ironhaven Data Centers LLC 4500 Dominion Ridge Boulevard, Suite 300 Ashburn, VA 20147

Attention: Jonathan Pryce-Williams, General Counsel

Telephone: (703) 555-8100

Email: jpryce-williams@ironhavendc.com

With a copy (which shall not constitute notice) to: Calderwood & Harkness LLP 125 Broad Street New York, NY 10004

Attention: Stephanie Okafor, Partner

Telephone: (212) 558-4000

Email: sokafor@calderwoodharkness.com

Notice addresses for the Administrative Agent, the Collateral Agent, and the Lenders are proposed as set forth in the redline.

III. Lender Commitment Confirmation

For reference, the Borrower notes the lender commitments as finalized upon the expected syndication closing on April 19, 2024:

The Borrower reserves the right to raise additional issues based on the final syndicate composition, including any concerns arising from the identity or regulatory status of the final Lender group as constituted upon the completion of syndication.

IV. Timeline and Next Steps

In order to maintain the target timeline for the execution and closing of the Credit Agreement, the Borrower respectfully requests that Blackthorn & Brightmoor Systems circulate its counter-mark-up by no later than April 18, 2024. This will permit the parties to target the following critical-path milestones:

• May 1, 2024: Circulation of the final form of the Credit Agreement to all Lenders for review

• May 15, 2024: Execution of the Credit Agreement by all parties

• June 3, 2024: Closing and initial funding of the Term Loans

The Borrower notes that the ticking fee of 0.25% per annum on the full $950,000,000 of undrawn commitments has been accruing since March 15, 2024, the date on which the syndication period commenced under the Commitment Letter. Prompt resolution of open issues is therefore in the mutual interest of all parties. Based on the assumed Closing Date of June 3, 2024, the ticking fee for the 80-day period from March 15 through June 3 is projected at approximately $527,778 (calculated as $950,000,000 × 0.0025 × 80/360).

The Borrower proposes scheduling a call among Calderwood & Harkness (Daniel Obi, Lead Associate, and Stephanie Okafor, Partner), Blackthorn & Brightmoor Systems (Catherine Ellsworth and Derek Huang), and Crescent Harbor Bank, N.A. (Martin Gallagher, Managing Director, and Priya Nair, Senior Vice President) during the week of April 8, 2024, to discuss the principal open points identified in this letter and in the enclosed mark-up. Please advise as to your team's availability, and we will coordinate scheduling.

German-law issues — including coordination on the parallel-debt structure, the timeline for notarization and registration of the Grundschuld, the form of the German security documents, and the scope of the German legal opinion — will be discussed separately among Lisa Morrow (Calderwood & Harkness, International Finance), Dr. Lukas Wendt and Julia Falkenberg (Wendt Falkenberg Rechtsanwälte PartG mbB), and Maximilian Roth (Blackthorn & Brightmoor Systems, Frankfurt office). We understand that Dr. Wendt is available for a call during the week of April 15, 2024, and we would ask that Maximilian Roth confirm his availability to Lisa Morrow directly.

V. Enclosures

The following documents are enclosed herewith:

Enclosure 1: Clean copy of the Borrower's mark-up of the Credit Agreement (dated April 5, 2024)

Enclosure 2: Redline/blackline of the Borrower's mark-up against the Agent's initial draft (dated March 22, 2024)

Enclosure 3: Revised schedule of Permitted Indebtedness (proposed Schedule 7.01)

Enclosure 4: Revised schedule of Permitted Liens (proposed Schedule 6.02)

Enclosure 5: Proposed form of Equity Cure Notice

This letter and the enclosed mark-up are transmitted on a without-prejudice basis and without waiver or prejudice to any rights, remedies, or positions of the Borrower, the Co-Borrower, the Parent Guarantor, or their respective affiliates under the Commitment Letter, the Credit Agreement, or otherwise. The Borrower expressly reserves all such rights, remedies, and positions. Nothing in this letter or the enclosed mark-up shall be deemed to constitute an agreement by the Borrower to any provision of the Credit Agreement as currently drafted by the Agent, except to the extent expressly stated herein.

Should you or any member of your team have any questions regarding the enclosed mark-up or the matters discussed in this letter, please do not hesitate to contact Daniel Obi (Lead Associate) at (212) 558-4127 or dobi@calderwoodharkness.com, or Stephanie Okafor (Responsible Partner) at (212) 558-4000 or sokafor@calderwoodharkness.com.

Courtesy copies of this letter and the enclosures are being sent simultaneously to Jonathan Pryce-Williams (IHDC), Natasha Greenfeld (IHDC), Martin Gallagher (Crescent Harbor Bank, N.A.), Priya Nair (Crescent Harbor Bank, N.A.), and Derek Huang (Blackthorn & Sundial Software).

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Daniel Obi Lead Associate, Banking & Finance 125 Broad Street New York, NY 10004 Telephone: (212) 558-4127

Email: dobi@calderwoodharkness.com

cc: (via email with enclosures)

Stephanie Okafor, Partner — Calderwood & Harkness LLP Jonathan Pryce-Williams, General Counsel — Ironhaven Data Centers LLC Natasha Greenfeld, VP, Treasury & Capital Markets — Ironhaven Data Centers LLC Rebecca Sung, Chief Financial Officer — Ironhaven Data Centers LLC Martin Gallagher, Managing Director — Crescent Harbor Bank, N.A. Priya Nair, Senior Vice President — Crescent Harbor Bank, N.A. Derek Huang, Partner — Blackthorn & Sundial Software Maximilian Roth, Partner — Blackthorn & Sundial Software (Frankfurt)

Lender	Commitment ($)	Percentage (%)
Crescent Harbor Bank, N.A.	$200,000,000	21.05%
Ridgeline National Bank	$175,000,000	18.42%
Marlowe Asset Management Meridian Capital, LLC	$150,000,000	15.79%
Atlas Peak Credit Partners, LP	$125,000,000	13.16%
NordBrücke AG	$150,000,000	15.79%
Pacific Rim Institutional Lending Corp.	$75,000,000	7.89%
Osprey Insurance Capital, Ltd.	$75,000,000	7.89%
Total	$950,000,000	100.00%

CONFIDENTIAL
CALDERWOOD & HARKNESS LLP Attorneys at Law 125 Broad Street New York, NY 10004
Telephone: (212) 558-4000 Facsimile: (212) 558-3588
April 5, 2024
Catherine Ellsworth, Esq. Lead Partner, Finance Blackthorn & Sundial Software 51 West 52nd Street New York, NY 10019
Re: Senior Secured Term Loan B Credit Agreement — Ironhaven Data Centers LLC ($950,000,000) C&H Matter No.: 1043-00001 Crescent Harbor Deal Ref.: CHB-LF-2024-0287 CUSIP: 46283LAA5
Dear Catherine:
I. Purpose and Transmittal
On behalf of our client, Ironhaven Data Centers LLC ("IHDC" or the "Borrower"), and Ironhaven Frankfurt GmbH (the "Co-Borrower"), Calderwood & Harkness LLP encloses herewith the Borrower's mark-up (redline against the initial Agent's draft dated March 22, 2024) of the Senior Secured Term Loan B Credit Agreement (the "Credit Agreement") among IHDC (as Borrower), Ironhaven Frankfurt GmbH (as Co-Borrower), Ironhaven Holdings Inc. (as Parent Guarantor), Crescent Harbor Bank, N.A. (as Administrative Agent), Pinnacle Trust Company, N.A. (as Collateral Agent), and the Lenders party thereto from time to time.
Enclosed herewith please find: (i) a clean copy reflecting all of the Borrower's proposed changes to the Credit Agreement as of the date hereof; and (ii) a blackline/redline showing all such changes against the Agent's initial draft circulated on March 22, 2024. We have endeavored to ensure that the redline accurately and completely reflects each modification, deletion, and addition proposed by the Borrower, and we would ask that your team verify the accuracy of the blackline upon receipt.
We note that the enclosed mark-up has been prepared in close coordination with IHDC management, including Jonathan Pryce-Williams (General Counsel), Rebecca Sung (Chief Financial Officer), and Natasha Greenfeld (Vice President, Treasury & Capital Markets), as well as with the representatives of Thornfield Capital Partners, LP, specifically Elena Castillo (Managing Director) and Graham Ashworth (Principal). Each of the substantive commercial positions reflected in the mark-up has been reviewed and approved by the Borrower's management team and its sponsor.
Additionally, Calderwood & Harkness separately coordinated with Wendt Falkenberg Rechtsanwälte PartG mbB (Dr. Lukas Wendt, Partner) on all matters affecting the German Co-Borrower provisions, including the representations and covenants applicable to Ironhaven Frankfurt GmbH, the German-law security package references, and the parallel-debt structure contemplated by the financing. The positions reflected in the mark-up with respect to German-law matters are consistent with the advice received from Dr. Wendt and his team.
We set forth below a high-level summary of the principal changes proposed by the Borrower in the enclosed mark-up. Detailed comments are embedded directly in the redline. For ease of reference, we have organized the summary into the following categories corresponding to the relevant articles and sections of the Credit Agreement.
II. Summary of Key Changes
1. Definitions (Article I)
The Borrower proposes a number of modifications to the defined terms set forth in Article I of the Credit Agreement. The most significant of these are summarized below.
"Adjusted EBITDA." The Borrower proposes expanded add-backs to the definition of "Adjusted EBITDA" to reflect the construction-phase nature of the Borrower's current operations and the pipeline of contracted revenue that will contribute to EBITDA as the Virginia and Frankfurt campuses reach commercial operation. Specifically, the Borrower proposes that the definition permit add-backs for (a) pre-opening costs for data-center campuses under construction (including both the Virginia campus at Ashburn and the Frankfurt campus at Ironhaven Frankfurt I), which costs are one-time in nature and will cease upon commercial operation of the respective facilities; (b) non-recurring transaction costs and expenses incurred in connection with the negotiation, documentation, syndication, and closing of this financing, capped at $32,500,000 in the aggregate; and (c) projected revenue from executed letters of intent for data-center capacity, including specifically the Stratos Cloud Services, Inc. pre-lease for 30 MW of critical IT load at the Ironhaven Ashburn I facility, generating approximately $14,400,000 in annualized revenue, and the Euronova Digital GmbH pre-lease for 20 MW of critical IT load at the Ironhaven Frankfurt I facility, generating approximately €9,800,000 in annualized revenue. The Borrower proposes that any add-back for projected revenue from letters of intent be subject to a cap of 15% of pro forma Adjusted EBITDA, which the Borrower believes provides adequate protection to the Lenders while permitting the Borrower to receive appropriate credit for its contracted pipeline. These add-backs are consistent with precedent transactions in the data-center financing market and reflect the unique economics of hyperscale data-center development.
"Change of Control." The Borrower proposes narrowing the definition of "Change of Control" so that a change of control is triggered only when Thornfield Capital Partners, LP (or its controlled affiliates, including Thornfield Infrastructure Fund III, LP) ceases to hold, directly or indirectly, more than 50% of the total voting equity interests of Ironhaven Holdings Inc. The Agent's draft included a broader formulation that would have captured any change in "operational control" of the Borrower or any change in the composition of the board of directors of the Borrower or Ironhaven Holdings Inc. such that a majority of the directors were not individuals who were directors on the Closing Date or were nominated or approved by such individuals. The Borrower has deleted these additional prongs as inconsistent with market practice for sponsor-backed term loan B facilities, where the standard trigger is tied exclusively to equity ownership thresholds. The retention of the operational-control and board-composition prongs would unduly restrict the Sponsor's ability to manage the portfolio company in the ordinary course and could inadvertently trigger a mandatory prepayment event based on routine corporate governance changes.
"Consolidated Total Net Debt." The Borrower proposes that unrestricted cash and cash equivalents be deducted from Consolidated Total Debt without a cap in calculating Consolidated Total Net Debt. The Borrower currently projects unrestricted cash and cash equivalents of approximately $62.5 million at the anticipated Closing Date. The Agent's draft imposed a $50,000,000 cap on the amount of cash and cash equivalents that could be netted against Consolidated Total Debt for purposes of this calculation. The Borrower's position is that no such cap is market for term loan B facilities of this nature, and the imposition of a netting cap would artificially inflate the Borrower's reported leverage and potentially cause a technical covenant default during periods when the Borrower holds elevated cash balances in advance of major construction disbursements. We are not aware of any recent comparable transaction in the data-center space that includes a netting cap of this kind, and we would welcome the opportunity to discuss supporting precedent if the Agent disagrees with this position.
"Permitted Indebtedness." The Borrower proposes additional carve-outs from the definition of "Permitted Indebtedness" to accommodate operational needs of the Borrower and the Co-Borrower. These include: (a) intercompany loans from IHDC to Ironhaven Frankfurt GmbH, which are necessary for the on-lending of a portion of the term loan proceeds to fund the Frankfurt campus construction and related development costs; (b) capital lease obligations incurred in the ordinary course of business, not to exceed $25,000,000 in the aggregate at any time outstanding, which the Borrower expects to utilize for data-center equipment, mechanical and electrical systems, and related infrastructure; and (c) purchase money indebtedness not to exceed $15,000,000 in the aggregate at any time outstanding, which may be incurred in connection with the acquisition of generators, uninterruptible power supply systems, and other critical infrastructure components. A revised schedule of Permitted Indebtedness (proposed Schedule 7.01) is enclosed as Enclosure 3.
"Net Leverage Ratio." The Borrower proposes conforming changes to the definition of "Net Leverage Ratio" to reflect the revised definition of Consolidated Total Net Debt described above (i.e., removal of the cap on nettable cash and cash equivalents). No other changes to the methodology for calculating the Net Leverage Ratio are proposed.
2. Interest Rate Provisions (Article II)
SOFR Benchmark Rate. The Borrower accepts the Term SOFR benchmark rate plus an applicable margin of 425 basis points (4.25%) as agreed in the Commitment Letter dated February 28, 2024, among the Borrower, Crescent Harbor Bank, N.A., and the other Commitment Parties named therein. The Borrower has not proposed any change to the applicable margin or the benchmark rate.
SOFR Floor. The Borrower accepts the 0.50% SOFR floor as set forth in the Commitment Letter. No change is proposed.
EURIBOR Provisions (EUR Sub-Tranche). With respect to the Euro-denominated sub-tranche of the Term Loan B facility, the Borrower proposes conforming the EURIBOR fallback language to the form recommended by the Loan Market Association (the "LMA") rather than the ARRC-derived fallback language included in the Agent's draft. The LMA form is the prevailing standard in European leveraged finance transactions and is more appropriate for a facility that includes a Euro-denominated tranche originated and syndicated to European institutional investors. The Borrower's German counsel at Wendt Falkenberg has reviewed the proposed EURIBOR fallback language and confirms that it is consistent with the approach used in recent German-law governed credit facilities. The EURIBOR floor of 0.00% is accepted as agreed in the Commitment Letter.
Default Rate. The Borrower proposes reducing the default rate premium from 4.00% over the otherwise applicable interest rate (as proposed by the Agent) to 2.00% over the otherwise applicable interest rate. A 2.00% default rate premium is more consistent with recent comparable data-center financings, including the Tidewater Partners LLC term loan B (2023, default rate premium of 2.00%), the Vantage Data Centers term loan B (2023, default rate premium of 2.00%), and the Halcyon & Co. term loan (2022, default rate premium of 2.00%). The 4.00% premium proposed in the Agent's draft is, in the Borrower's experience, significantly above market for investment-grade-adjacent borrowers in the digital infrastructure sector.
Interest Period Selection. The Borrower proposes adding a 6-month interest period option in addition to the 1-month and 3-month interest period options included in the Agent's draft. The availability of a 6-month interest period provides the Borrower with additional flexibility in managing its interest expense and cash flow, particularly during the construction phase when cash disbursements may be lumpy and may not align well with shorter interest period cycles. The 6-month option is standard in most broadly syndicated term loan B facilities and is contemplated by the Commitment Letter.
EUR Sub-Tranche Amount. The EUR sub-tranche amount is confirmed at €253,571,429 (equivalent to $275,000,000 at an assumed EUR/USD spot rate of 1.0846, as established in the Commitment Letter). No change is proposed to the commitment allocations per lender. The Borrower notes that NordBrücke AG's $150,000,000 commitment has been allocated entirely to the Frankfurt sub-tranche (EUR sub-tranche), consistent with the syndication strategy discussed with Crescent Harbor Bank and the Borrower's preference for matching the currency of the loan with the currency of the underlying asset and revenue stream.
3. Amortization and Prepayment Provisions (Article II / Article III)
Scheduled Amortization. No change is proposed to the scheduled amortization of 1.00% per annum of the original aggregate principal amount of the Term Loans, payable in equal quarterly installments. This results in an aggregate quarterly amortization payment of $2,375,000 (calculated as 1.00% × $950,000,000 ÷ 4), allocated between the USD tranche (quarterly amount of $1,687,500) and the EUR sub-tranche (quarterly amount of €633,928.57). The Borrower accepts the amortization schedule as drafted.
Mandatory Prepayment — Excess Cash Flow. The Borrower accepts the 75% / 50% / 25% step-down structure for the annual Excess Cash Flow sweep, which steps down from 75% to 50% when the Net Leverage Ratio is less than or equal to 4.50x, and further steps down from 50% to 25% when the Net Leverage Ratio is less than or equal to 3.50x. However, the Borrower proposes two important modifications to the calculation of Excess Cash Flow. First, the Borrower proposes that capital expenditures funded from the Virginia and Frankfurt construction escrow accounts be excluded from the calculation of Excess Cash Flow, on the basis that such expenditures are funded from earmarked proceeds and do not represent discretionary cash flow available for debt service. Second, the Borrower proposes that amounts paid as scheduled amortization during the relevant fiscal year be deducted in calculating Excess Cash Flow, consistent with market practice and the principle that a borrower should not be penalized through the Excess Cash Flow sweep for making amortization payments that have already reduced the outstanding principal of the term loans.
Mandatory Prepayment — Change of Control. The Borrower accepts the mandatory prepayment obligation at 101% of outstanding principal plus accrued and unpaid interest upon the occurrence of a Change of Control, subject to the revised definition of "Change of Control" described in Section 1 above. As noted, the Borrower has proposed narrowing the Change of Control definition to focus exclusively on the equity ownership threshold, which is the appropriate trigger for a mandatory prepayment obligation of this kind.
Mandatory Prepayment — Asset Sales. The Borrower proposes that the reinvestment period for net cash proceeds from asset dispositions be extended from 12 months (as provided in the Agent's draft) to 18 months. The 18-month reinvestment period is appropriate given the long lead times associated with data-center development and construction, where site selection, permitting, design, and initial construction activities can easily extend beyond 12 months. The Borrower further proposes that net cash proceeds be eligible for reinvestment in data-center assets of like kind or quality, including the acquisition of new data-center sites, expansion of existing facilities, and investment in critical power and cooling infrastructure. In addition, the Borrower proposes a de minimis threshold of $10,000,000, below which no mandatory prepayment would be required from asset sale proceeds. The de minimis threshold is intended to avoid the administrative burden and expense of processing small mandatory prepayments that are immaterial in the context of a $950,000,000 facility.
Voluntary Prepayment — Soft Call Premium. The Borrower accepts the 101 soft call premium applicable to voluntary prepayments made within 6 months following the Closing Date (i.e., through December 3, 2024, based on an assumed Closing Date of June 3, 2024). However, the Borrower proposes that the soft call premium not apply to prepayments made from the proceeds of Excess Cash Flow sweeps or from insurance or condemnation proceeds. The rationale for this exclusion is that Excess Cash Flow sweeps are mandatory in nature and should not be subject to a premium that is designed to compensate lenders for voluntary early repayment, and insurance and condemnation proceeds represent involuntary recovery events that should not give rise to an additional cost to the Borrower.
OID. The original issue discount is confirmed at 99.50 (50 basis points discount), resulting in net proceeds to the Borrower of $945,250,000. No change is proposed.
4. Financial Covenants (Article VII)
Maximum Net Leverage Ratio. The Borrower accepts the 6.00x maximum Net Leverage Ratio covenant as the steady-state level. However, the Borrower proposes a covenant holiday for the first two testing periods (September 30, 2024 and December 31, 2024) in recognition of the construction-phase nature of the Virginia and Frankfurt campuses and the associated ramp-up period for EBITDA. During the construction phase, the Borrower expects to incur significant capital expenditures and pre-opening costs that will depress Adjusted EBITDA relative to the post-stabilization run rate, while the full principal amount of the Term Loans will be outstanding. As an alternative to the covenant holiday, the Borrower proposes that the Maximum Net Leverage Ratio be set at 6.50x for the first four fiscal quarters following the Closing Date (i.e., through the testing period ending June 30, 2025), stepping down to 6.00x thereafter. The Borrower notes that the current pro forma Net Leverage Ratio at closing is approximately 5.35x (based on $887,500,000 of Net Total Debt divided by $165,800,000 of Adjusted EBITDA for the LTM period ending March 31, 2024), providing adequate cushion under a 6.00x covenant but limited headroom during the construction ramp-up. The Borrower believes that either approach (a covenant holiday or an elevated threshold for the initial quarters) is reasonable and consistent with the economics of this transaction, and we are prepared to discuss the relative merits of each approach with the Agent and the Lenders.
Minimum Interest Coverage Ratio. The Borrower accepts the 2.00x Minimum Interest Coverage Ratio as the steady-state level. Consistent with the approach described above for the Net Leverage Ratio, the Borrower proposes the same covenant holiday for the first two testing periods, or in the alternative, that the Minimum Interest Coverage Ratio be set at 1.75x for the first four fiscal quarters following the Closing Date, stepping up to 2.00x thereafter.
First Testing Date. The Borrower notes that the Credit Agreement as currently drafted provides for quarterly financial covenant testing commencing as of September 30, 2024 (i.e., the first full fiscal quarter-end following the anticipated Closing Date of June 3, 2024). The Borrower proposes deferring the first testing date to December 31, 2024, to allow the Borrower a full two quarters of operations following closing before the financial covenants are first tested. This deferral is particularly important in light of the construction-phase dynamics described above and is consistent with the Borrower's proposal for a covenant holiday or elevated thresholds during the initial period.
Maximum Capital Expenditure. The Borrower proposes increasing the fiscal year 2024 capital expenditure cap from $325,000,000 (as set forth in the Agent's draft) to $375,000,000 to accommodate potential acceleration of the Virginia campus construction schedule. The Borrower has recently received preliminary indications from its general contractor, Drayton Corporation, that certain civil and structural work at the Ashburn campus may be advanced ahead of the original schedule, which would require front-loading a portion of the capital expenditure budget. The additional $50,000,000 of headroom is intended to provide the Borrower with the flexibility to capture these potential schedule efficiencies without triggering a covenant breach. The fiscal year 2025 and subsequent years' cap of $250,000,000 per year, with a 25% carry-forward of unused amounts from the prior fiscal year, is accepted as drafted.
Equity Cure Right. The Borrower proposes the addition of an equity cure provision to Article VII of the Credit Agreement. The equity cure right would permit Thornfield Capital Partners, LP (or its controlled affiliates) to make equity contributions to the Borrower (directly or through Ironhaven Holdings Inc.) that would be deemed added to Adjusted EBITDA for purposes of curing a financial covenant breach in any fiscal quarter in which such breach occurs. The equity cure right would be subject to the following limitations: (a) the equity cure right may be exercised no more than two times in any four consecutive fiscal quarters; (b) the equity cure right may be exercised no more than four times over the life of the facility; and (c) the minimum cure amount for any individual cure shall be $5,000,000. The Borrower has enclosed a proposed form of Equity Cure Notice as Enclosure 5. The equity cure right is a standard feature of sponsor-backed term loan B facilities and provides an important safety valve during the construction-phase transition, particularly given the tight covenant headroom discussed above. The Borrower notes that the equity cure right is intended to address temporary EBITDA shortfalls during the ramp-up period and is not intended to permit the Borrower to operate with a sustained covenant breach.
5. Representations and Warranties (Article IV)
Sanctions / OFAC Representation. The Borrower accepts the OFAC and sanctions representations substantially as drafted in the Agent's draft. The Borrower confirms that neither IHDC, Ironhaven Frankfurt GmbH, Ironhaven Holdings Inc., nor any of their respective directors or officers, is a Sanctioned Person (as defined in the Credit Agreement) or is located, organized, or resident in a Sanctioned Country. However, the Borrower proposes adding a knowledge qualifier ("to the knowledge of the Borrower, after due inquiry") with respect to representations regarding sub-contractors, downstream counterparties, tenants, and other third parties that are not under the direct control of the Borrower. The Borrower has conducted, and will continue to conduct, OFAC and sanctions screening of its material counterparties, but cannot reasonably make an unqualified representation with respect to the sanctions status of all such parties throughout the supply chain.
Anti-Money Laundering. The Borrower accepts the anti-money laundering representations as drafted. The Borrower notes for the record that IHDC has filed its beneficial ownership certification with FinCEN in accordance with the Corporate Transparency Act and applicable regulations, and Ironhaven Frankfurt GmbH has made its filing with the German Transparenzregister (transparency register) as required under the Geldwäschegesetz (GwG). Copies of each filing are available for review upon request.
Environmental Representations. The Borrower proposes qualifying the environmental representations set forth in the Credit Agreement with the phrase "in all material respects" and limiting the look-back period for environmental conditions and compliance history to five years from the Closing Date. The Borrower notes that Greenline Environmental Solutions, Inc. has completed Phase I environmental site assessments for both the Virginia campus (Ashburn site) and the Frankfurt campus, and that neither assessment identified any recognized environmental conditions (RECs) within the meaning of ASTM E1527-21. The Phase I reports are being furnished separately to the Administrative Agent and the Collateral Agent. The limitation to "in all material respects" and the five-year look-back period are consistent with the scope of the Phase I assessments and are appropriate given the nature of the properties (purpose-built data-center facilities on previously developed commercial land).
Material Contracts. The Borrower proposes that the threshold for disclosure of material contracts on the schedules to the Credit Agreement be raised from $5,000,000 in annual value (as proposed in the Agent's draft) to $10,000,000 in annual value. The lower threshold would require disclosure of a large number of routine vendor contracts, maintenance agreements, and service contracts that are not individually material to the Borrower's business or financial condition. The $10,000,000 threshold would ensure that truly material agreements — including the major pre-lease agreements, power purchase agreements, and construction contracts — are disclosed, while avoiding the administrative burden of cataloging immaterial arrangements.
Financial Statements. The Borrower confirms that audited financial statements of the Borrower and its consolidated subsidiaries prepared in accordance with GAAP, audited by Ashford & Mercer LLP, for the last twelve months ended September 30, 2023 (showing Revenue of $412,600,000; Adjusted EBITDA of $158,300,000; and Total Assets of $1,870,000,000) have been delivered to the Administrative Agent. These financial statements will be supplemented with unaudited interim financial statements for the period through March 31, 2024 (reflecting Adjusted EBITDA for the LTM period of $165,800,000), which will be delivered prior to the Closing Date. The Borrower expects that the interim financials will be available by no later than May 1, 2024, and will be circulated to the Agent and the Lenders promptly upon completion.
6. Negative Covenants (Article VI)
Restricted Payments. The Borrower proposes the addition of a builder basket permitting distributions to equityholders from retained Excess Cash Flow that is not swept pursuant to the annual Excess Cash Flow mandatory prepayment mechanism. The builder basket would accumulate on a cumulative basis commencing from the Closing Date and would be available for distributions only so long as no Event of Default has occurred and is continuing and the pro forma Net Leverage Ratio (after giving effect to the proposed distribution) does not exceed 5.00x. In addition, the Borrower proposes a general basket of $10,000,000 per fiscal year for tax distributions to Thornfield Infrastructure Fund III, LP (through Ironhaven Holdings Inc.) to cover the tax liabilities of Thornfield Infrastructure Fund III, LP and its partners attributable to the income of the Borrower and its subsidiaries that flows through to such partners under applicable tax law. Tax distributions of this kind are standard in sponsor-backed leveraged finance transactions involving pass-through entities and are necessary to ensure that the Sponsor and its limited partners are not required to fund tax liabilities out of pocket.
Indebtedness Covenant. In addition to the expanded Permitted Indebtedness baskets described in Section 1 above (intercompany loans, capital leases up to $25,000,000, and purchase money indebtedness up to $15,000,000), the Borrower proposes a general indebtedness basket of $20,000,000, permitting the Borrower and its subsidiaries to incur unsecured indebtedness not to exceed $20,000,000 in the aggregate at any time outstanding for general corporate purposes. The general basket provides the Borrower with flexibility to address unanticipated short-term financing needs without the necessity of seeking a consent or waiver from the Required Lenders.
Liens. The Borrower proposes customary permitted liens carve-outs, including: (a) liens securing purchase money indebtedness in an aggregate amount not to exceed $15,000,000 (consistent with the purchase money indebtedness basket described above); (b) deposits and pledges securing insurance obligations, workers' compensation obligations, and similar statutory requirements incurred in the ordinary course of business; (c) liens arising by operation of law, including mechanic's liens, materialmen's liens, warehousemen's liens, and similar liens arising in connection with the construction of the Virginia and Frankfurt data-center campuses, provided that such liens are discharged or bonded within 60 days of the date on which the Borrower becomes aware of such liens; and (d) existing liens disclosed on Schedule 6.02 to the Credit Agreement, which are limited to the existing UCC-1 financing statement filed by Greystone Mezzanine Fund II, LP against IHDC in the Delaware Secretary of State's office, which will be terminated at or prior to closing via a UCC-3 termination statement to be delivered by Greystone Mezzanine Fund II, LP. A revised schedule of Permitted Liens (proposed Schedule 6.02) is enclosed as Enclosure 4.
Investments. The Borrower proposes a general investments basket of $15,000,000, permitting the Borrower and its subsidiaries to make investments (including loans, advances, equity contributions, and acquisitions) not to exceed $15,000,000 in the aggregate at any time outstanding. In addition, the Borrower proposes that investments in wholly-owned subsidiaries of the Borrower (including Ironhaven Frankfurt GmbH) be permitted without limitation, to facilitate intercompany transfers of funds necessary to support the Frankfurt campus development and operations.
Asset Sales. The Borrower's position with respect to asset sales is addressed in Section 3 above in connection with the reinvestment right and the proposed 18-month reinvestment period.
Affiliate Transactions. The Borrower proposes that transactions with affiliates be permitted provided that such transactions are on terms no less favorable to the Borrower than would be obtained in a comparable arm's-length transaction with an unrelated third party. For transactions with affiliates involving aggregate consideration in excess of $5,000,000, the Borrower proposes that the arm's-length standard be satisfied by approval of the board of directors (or a committee thereof) of IHDC or Ironhaven Holdings Inc. Customary carve-outs are proposed for: (i) management fees payable to Thornfield Capital Partners, LP pursuant to the existing management services agreement (annual fee of $2,000,000 plus reimbursement of out-of-pocket expenses); (ii) intercompany transactions between the Borrower and its wholly-owned subsidiaries; and (iii) compensation and benefits arrangements with directors, officers, and employees approved by the board of directors.
7. Conditions Precedent to Closing (Article V)
The Borrower has reviewed the conditions precedent to closing set forth in Article V of the Credit Agreement and proposes the following modifications:
Appraisal. The Agent's draft requires MAI appraisals showing an appraised value of at least 1.50x the allocated loan amount for each campus. The Borrower proposes that the appraisal threshold be reduced to 1.25x the allocated loan amount. The Borrower notes that Meridian Valuation Group, LLC (Howard Finch, MAI, Senior Managing Director) has been engaged to prepare the appraisals and that preliminary indications of value support a combined appraised value well in excess of the 1.25x threshold. The 1.50x threshold proposed by the Agent is above market for construction-phase data-center facilities, where the appraised value necessarily reflects the "as-is" condition of the property during the construction period rather than the "as-stabilized" value upon completion and lease-up. A 1.25x threshold is more appropriate and consistent with recent comparable transactions.
Title Insurance. The Borrower confirms that Keystone Title Guaranty Company will issue an ALTA Lender's Title Insurance Policy (ALTA 2021 form) for the Virginia campus (Ashburn site) with coverage in the amount of $475,000,000 (representing the allocated loan amount for the Virginia campus). The Borrower proposes that standard title exceptions for utility easements, public road rights-of-way, and zoning conditions applicable to the property be treated as permitted exceptions under the Credit Agreement, provided that such exceptions do not, individually or in the aggregate, materially interfere with the Borrower's use and operation of the property as a data-center campus. Title insurance for the Frankfurt campus will be addressed through the German-law security package, as title insurance is not customary in German real estate transactions.
Insurance. The Borrower confirms that Calloway & Strand Insurance Brokers, Inc. (Patricia Calloway, Senior Vice President) is placing the required insurance program for both campuses, including builder's risk insurance (during the construction phase), commercial property insurance, general liability insurance, and business-interruption insurance. The Borrower proposes that the required coverage amounts for property insurance be set at full replacement cost of the insured improvements, rather than the loan amount as proposed in the Agent's draft. Replacement cost coverage is the standard in data-center financing and ensures that the collateral can be fully restored in the event of a total loss, regardless of the relationship between the replacement cost and the outstanding loan balance.
Environmental. The Borrower proposes that the Phase I environmental site assessments completed by Greenline Environmental Solutions, Inc. for both campuses be deemed sufficient to satisfy the environmental conditions precedent to closing. Phase II environmental site assessments should be required only if a Phase I assessment identifies recognized environmental conditions (RECs) within the meaning of ASTM E1527-21 that warrant further investigation. As noted above, neither of the Phase I assessments completed to date identified any RECs, and the Borrower does not believe that Phase II assessments are warranted or necessary.
German-Law Security. The Borrower notes that registration of the Grundschuld (non-accessory land charge) with the Frankfurt Grundbuchamt (land registry office), specifically the Grundbuch von Frankfurt am Main-Ost, Blatt 54321, Flur 12, Flurstück 789, may not be completed prior to the anticipated Closing Date of June 3, 2024, due to the processing times of the German land registry and the requirement for prior notarization of the Grundschuldbestellungsurkunde (land charge creation deed). The Borrower proposes that the Closing Date condition with respect to the German-law real estate security be satisfied by delivery of a notarized Grundschuldbestellungsurkunde executed before a German notary, together with evidence of the filing of the application for registration of the Grundschuld with the Grundbuchamt, with actual registration to be completed within 90 days following the Closing Date. This post-closing arrangement is customary in cross-border transactions involving German real property security, where registration timelines are outside the control of the parties, and is consistent with the approach recommended by Dr. Wendt at Wendt Falkenberg.
Legal Opinions. The Borrower confirms that the following legal opinions will be delivered at closing:
(a) Calderwood & Harkness LLP will deliver opinions covering (i) New York and Delaware law matters, including due authorization, enforceability of the Credit Agreement and related documents, and perfection of security interests under the Uniform Commercial Code; (ii) Virginia law matters, including enforceability of the Deed of Trust and related real property security documents; (iii) U.S. regulatory matters, including confirmation that the Borrower is not required to register as an investment company under the Investment Company Act of 1940, that the extension of credit does not violate the margin regulations of the Board of Governors of the Federal Reserve System (Regulations T, U, and X), and that the interest rate provisions of the Credit Agreement do not violate applicable usury laws; and (iv) U.S. federal income tax matters, including the characterization of the Term Loans as indebtedness for U.S. federal income tax purposes.
(b) Wendt Falkenberg Rechtsanwälte PartG mbB (Dr. Lukas Wendt and Julia Falkenberg) will deliver a German law opinion addressing (i) the capacity and due authorization of Ironhaven Frankfurt GmbH to enter into the Credit Agreement and the German security documents; (ii) the enforceability of the German security documents (including the Grundschuld, the account pledges, and the assignment of receivables by way of security); and (iii) the validity and enforceability of the parallel-debt structure under German law.
Solvency Certificate. The Borrower confirms that Rebecca Sung, in her capacity as Chief Financial Officer of IHDC, will deliver a solvency certificate at closing in the form attached to the Credit Agreement, certifying the solvency of the Borrower and its subsidiaries on a consolidated basis after giving effect to the transactions contemplated by the Credit Agreement, including the incurrence of the Term Loans and the grant of the security interests.
Lender KYC/Sanctions Compliance. The Borrower notes that the Credit Agreement as currently drafted requires each Lender to deliver an OFAC/sanctions compliance certificate prior to the initial funding of the Term Loans. The Borrower proposes that this requirement be structured as a condition to each individual Lender's obligation to fund its commitment, rather than as a condition to closing generally. Under this approach, the failure of a single Lender to deliver its OFAC/sanctions compliance certificate would not delay the closing for the other Lenders or the Borrower, but would instead result in a failure of that Lender's individual funding condition, with the defaulting Lender's commitment to be treated in accordance with the "defaulting lender" provisions of the Credit Agreement. The Borrower believes this approach is particularly appropriate in light of the enhanced due diligence currently being conducted on Osprey Insurance Capital, Ltd. (a Bermuda-domiciled entity) due to its UK-person nexus and the corresponding requirement for screening under the UK Office of Financial Sanctions Implementation (OFSI) sanctions regime in addition to OFAC screening. The Borrower does not wish the closing timeline for the entire facility to be held hostage to the completion of enhanced due diligence on a single Lender holding a $75,000,000 commitment.
8. Agency and Collateral Agent Provisions (Article IX / Article X)
Collateral Agent Fees. The Borrower notes the fee schedule for the Collateral Agent, Pinnacle Trust Company, N.A., consisting of $125,000 per annum as domestic collateral agent fee and $75,000 per annum as German security trustee fee, for a total annual fee of $200,000. The Borrower does not propose any change to these fees.
Collateral Agent Indemnification. The Borrower proposes that the Borrower's indemnification obligation to the Collateral Agent, as set forth in Article X of the Credit Agreement, be limited to losses, claims, damages, liabilities, and related expenses that do not arise from the Collateral Agent's own gross negligence, willful misconduct, or bad faith (as determined by a court of competent jurisdiction in a final, non-appealable judgment). The Agent's draft contains a broader indemnification that would require the Borrower to indemnify the Collateral Agent even in circumstances where the Collateral Agent's own conduct contributed to the loss. The Borrower's proposed limitation is standard in trust and agency arrangements and appropriately allocates risk between the Borrower and the Collateral Agent.
Parallel Debt Structure. The Borrower notes that the German security package utilizes a parallel-debt (Parallelschuld) structure, with Pinnacle Trust Company, N.A., acting through its London branch, serving as Security Trustee (Sicherheitentreuhänder) under the German Parallel Debt and Security Trust Agreement (Sicherheitentreuhandvertrag). The parallel-debt mechanism is necessary under German law to permit the creation of security interests in favor of a trustee acting for the benefit of the syndicate of Lenders, as German law does not recognize the concept of a security agent holding security for the benefit of undisclosed principals in the same manner as New York law. The Borrower proposes that Article IX of the Credit Agreement include express recognition of the parallel-debt mechanism and cross-references to the Sicherheitentreuhandvertrag, to ensure that the Credit Agreement and the German security documents are fully integrated and that the parallel debt is recognized as a valid and enforceable obligation of the Borrower and the Co-Borrower.
9. Intercreditor Provisions
The Borrower notes that the Credit Agreement must be consistent with the First Lien / Super-Senior Intercreditor Agreement (the "Intercreditor Agreement") among IHDC, Crescent Harbor Bank, N.A. (acting in its dual capacity as Administrative Agent under the Term Loan B facility and as Revolver Agent under the existing $100,000,000 Super-Senior Revolving Credit Facility dated October 15, 2023), and Pinnacle Trust Company, N.A. as Collateral Agent. The Intercreditor Agreement establishes the relative priorities, enforcement rights, and waterfall mechanics as between the Super-Senior Revolving Credit Facility and the Term Loan B facility, including the Super-Senior priority of the Revolving Credit Facility with respect to enforcement proceeds and the standstill provisions applicable to the Term Loan B Lenders.
The Borrower proposes the insertion of a cross-reference to the Intercreditor Agreement in Article XI of the Credit Agreement, together with a provision stating that the terms of the Credit Agreement are subject to the terms of the Intercreditor Agreement to the extent of any conflict or inconsistency. This ensures that the Intercreditor Agreement governs in the event of any conflict between the two agreements with respect to enforcement rights, priority of payments, or similar matters.
10. Miscellaneous / Boilerplate (Article XI)
Governing Law. The Borrower confirms that the Credit Agreement will be governed by and construed in accordance with the laws of the State of New York, without regard to conflicts-of-law principles. The German-law security documents (including the Grundschuldbestellungsurkunde, the account pledge agreements, the assignment agreements, and the Sicherheitentreuhandvertrag) will be governed by and construed in accordance with German law. No change is proposed with respect to governing law.
Assignment Provisions. The Borrower proposes that any assignment of Term Loans by a Lender to a third party require the prior written consent of the Borrower, which consent shall not be unreasonably withheld, conditioned, or delayed, unless (a) an Event of Default has occurred and is continuing at the time of the assignment, in which case no Borrower consent shall be required, or (b) the assignment is made to another Lender, an affiliate of a Lender, or an approved fund (as defined in the Credit Agreement), in which case no Borrower consent shall be required. The Borrower further proposes a minimum assignment threshold of $5,000,000, below which no assignment shall be permitted (other than assignments to affiliates of a Lender or approved funds), to prevent fragmentation of the lending syndicate and the associated administrative burden of dealing with a large number of small holders.
Disqualified Institution List. The Borrower proposes the inclusion of a "disqualified institution" provision in the assignment section of the Credit Agreement, pursuant to which the Borrower would designate a list of entities (and their affiliates) to which assignments of Term Loans would not be permitted. The disqualified institution list would include competitors of the Borrower in the data-center industry (including, without limitation, Westmark Group, Thackeray & Co., Halcyon & Co., Larkspur Group, and Vantage Data Centers LLC, and their respective affiliates), as well as any other entity that the Borrower designates in writing to the Administrative Agent from time to time. This provision is intended to protect the Borrower's confidential information and competitive position by preventing the Borrower's competitors from becoming Lenders under the facility and thereby gaining access to the Borrower's financial information, business plans, and other proprietary data that is shared with the Lender group.
Notices. The Borrower proposes updated notice addresses for all parties, as follows:
If to the Borrower: Ironhaven Data Centers LLC 4500 Dominion Ridge Boulevard, Suite 300 Ashburn, VA 20147
Attention: Jonathan Pryce-Williams, General Counsel
Telephone: (703) 555-8100
Email: jpryce-williams@ironhavendc.com
With a copy (which shall not constitute notice) to: Calderwood & Harkness LLP 125 Broad Street New York, NY 10004
Attention: Stephanie Okafor, Partner
Telephone: (212) 558-4000
Email: sokafor@calderwoodharkness.com
Notice addresses for the Administrative Agent, the Collateral Agent, and the Lenders are proposed as set forth in the redline.
III. Lender Commitment Confirmation
For reference, the Borrower notes the lender commitments as finalized upon the expected syndication closing on April 19, 2024:
The Borrower reserves the right to raise additional issues based on the final syndicate composition, including any concerns arising from the identity or regulatory status of the final Lender group as constituted upon the completion of syndication.
IV. Timeline and Next Steps
In order to maintain the target timeline for the execution and closing of the Credit Agreement, the Borrower respectfully requests that Blackthorn & Brightmoor Systems circulate its counter-mark-up by no later than April 18, 2024. This will permit the parties to target the following critical-path milestones:
• May 1, 2024: Circulation of the final form of the Credit Agreement to all Lenders for review
• May 15, 2024: Execution of the Credit Agreement by all parties
• June 3, 2024: Closing and initial funding of the Term Loans
The Borrower notes that the ticking fee of 0.25% per annum on the full $950,000,000 of undrawn commitments has been accruing since March 15, 2024, the date on which the syndication period commenced under the Commitment Letter. Prompt resolution of open issues is therefore in the mutual interest of all parties. Based on the assumed Closing Date of June 3, 2024, the ticking fee for the 80-day period from March 15 through June 3 is projected at approximately $527,778 (calculated as $950,000,000 × 0.0025 × 80/360).
The Borrower proposes scheduling a call among Calderwood & Harkness (Daniel Obi, Lead Associate, and Stephanie Okafor, Partner), Blackthorn & Brightmoor Systems (Catherine Ellsworth and Derek Huang), and Crescent Harbor Bank, N.A. (Martin Gallagher, Managing Director, and Priya Nair, Senior Vice President) during the week of April 8, 2024, to discuss the principal open points identified in this letter and in the enclosed mark-up. Please advise as to your team's availability, and we will coordinate scheduling.
German-law issues — including coordination on the parallel-debt structure, the timeline for notarization and registration of the Grundschuld, the form of the German security documents, and the scope of the German legal opinion — will be discussed separately among Lisa Morrow (Calderwood & Harkness, International Finance), Dr. Lukas Wendt and Julia Falkenberg (Wendt Falkenberg Rechtsanwälte PartG mbB), and Maximilian Roth (Blackthorn & Brightmoor Systems, Frankfurt office). We understand that Dr. Wendt is available for a call during the week of April 15, 2024, and we would ask that Maximilian Roth confirm his availability to Lisa Morrow directly.
V. Enclosures
The following documents are enclosed herewith:
Enclosure 1: Clean copy of the Borrower's mark-up of the Credit Agreement (dated April 5, 2024)
Enclosure 2: Redline/blackline of the Borrower's mark-up against the Agent's initial draft (dated March 22, 2024)
Enclosure 3: Revised schedule of Permitted Indebtedness (proposed Schedule 7.01)
Enclosure 4: Revised schedule of Permitted Liens (proposed Schedule 6.02)
Enclosure 5: Proposed form of Equity Cure Notice
This letter and the enclosed mark-up are transmitted on a without-prejudice basis and without waiver or prejudice to any rights, remedies, or positions of the Borrower, the Co-Borrower, the Parent Guarantor, or their respective affiliates under the Commitment Letter, the Credit Agreement, or otherwise. The Borrower expressly reserves all such rights, remedies, and positions. Nothing in this letter or the enclosed mark-up shall be deemed to constitute an agreement by the Borrower to any provision of the Credit Agreement as currently drafted by the Agent, except to the extent expressly stated herein.
Should you or any member of your team have any questions regarding the enclosed mark-up or the matters discussed in this letter, please do not hesitate to contact Daniel Obi (Lead Associate) at (212) 558-4127 or dobi@calderwoodharkness.com, or Stephanie Okafor (Responsible Partner) at (212) 558-4000 or sokafor@calderwoodharkness.com.
Courtesy copies of this letter and the enclosures are being sent simultaneously to Jonathan Pryce-Williams (IHDC), Natasha Greenfeld (IHDC), Martin Gallagher (Crescent Harbor Bank, N.A.), Priya Nair (Crescent Harbor Bank, N.A.), and Derek Huang (Blackthorn & Sundial Software).
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Daniel Obi Lead Associate, Banking & Finance 125 Broad Street New York, NY 10004 Telephone: (212) 558-4127
Email: dobi@calderwoodharkness.com
cc: (via email with enclosures)
Stephanie Okafor, Partner — Calderwood & Harkness LLP Jonathan Pryce-Williams, General Counsel — Ironhaven Data Centers LLC Natasha Greenfeld, VP, Treasury & Capital Markets — Ironhaven Data Centers LLC Rebecca Sung, Chief Financial Officer — Ironhaven Data Centers LLC Martin Gallagher, Managing Director — Crescent Harbor Bank, N.A. Priya Nair, Senior Vice President — Crescent Harbor Bank, N.A. Derek Huang, Partner — Blackthorn & Sundial Software Maximilian Roth, Partner — Blackthorn & Sundial Software (Frankfurt)
Lender | Commitment ($) | Percentage (%)
Crescent Harbor Bank, N.A. | $200,000,000 | 21.05%
Ridgeline National Bank | $175,000,000 | 18.42%
Marlowe Asset Management Meridian Capital, LLC | $150,000,000 | 15.79%
Atlas Peak Credit Partners, LP | $125,000,000 | 13.16%
NordBrücke AG | $150,000,000 | 15.79%
Pacific Rim Institutional Lending Corp. | $75,000,000 | 7.89%
Osprey Insurance Capital, Ltd. | $75,000,000 | 7.89%
Total | $950,000,000 | 100.00%

CONFIDENTIAL

CALDERWOOD & HARKNESS LLP

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