CRESCENT HARBOR BANK, N.A. 1200 Harbor Point Drive Charlotte, North Carolina 28202
February 28, 2024
CONFIDENTIAL
Ironhaven Data Centers LLC 4500 Dominion Ridge Boulevard, Suite 300 Ashburn, Virginia 20147
Attention: Marcus Delaine, Chief Executive Officer
Rebecca Sung, Chief Financial Officer Natasha Greenfeld, VP, Treasury & Capital Markets
cc: Jonathan Pryce-Williams, General Counsel & Secretary, Ironhaven Data Centers LLC
cc: Thornfield Capital Partners, LP 800 Park Avenue, 22nd Floor New York, NY 10021
Attention: Elena Castillo, Partner, Head of Digital Infrastructure
Re: Commitment Letter — $950,000,000 Senior Secured Term Loan B Credit Facility
Deal Reference: CHB-LF-2024-0287
Ladies and Gentlemen:
1. Introduction and Commitment
Crescent Harbor Bank, N.A. ("Crescent Harbor," "CHB," or the "Commitment Party") is pleased to set forth the terms and conditions upon which it is willing to act as Sole Lead Arranger and Sole Bookrunner, and to serve as Administrative Agent, in connection with a senior secured term loan B credit facility in an aggregate principal amount of Nine Hundred Fifty Million Dollars ($950,000,000) (the "Term Loan" or the "Facility") for the benefit of Ironhaven Data Centers LLC, a Delaware limited liability company (the "Borrower" or "IHDC"), and Ironhaven Frankfurt GmbH, a German Gesellschaft mit beschränkter Haftung (the "Co-Borrower" or "IHDC Frankfurt," and together with the Borrower, the "Borrowers").
This Commitment Letter is delivered in furtherance of the Mandate Letter executed on February 12, 2024 between Crescent Harbor and IHDC (the "Mandate Letter"), and the terms hereof supersede any conflicting provisions of the Mandate Letter. Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to them in the Summary of Terms and Conditions attached hereto as Exhibit A (the "Term Sheet"). In the event of any conflict between the terms of this Commitment Letter and the Term Sheet, the terms of this Commitment Letter shall control.
The Commitment Party hereby commits to provide the entire $950,000,000 Facility on the terms and subject to the conditions described herein and in the Term Sheet, subject to: (a) syndication of the Facility as described in Section 3 hereof; (b) the satisfaction (or waiver by Crescent Harbor in its sole discretion) of the conditions precedent set forth in Exhibit B attached hereto; and (c) the negotiation, execution, and delivery of definitive documentation (including, without limitation, the Credit Agreement, the Guarantee Agreement, the Security Documents, and all ancillary documentation) consistent with the terms set forth herein and in the Term Sheet, in form and substance satisfactory to Crescent Harbor and its counsel, Blackthorn & Sundial Software.
It is understood that, upon completion of the syndication process described in Section 3 below, Crescent Harbor shall retain Two Hundred Million Dollars ($200,000,000) of the aggregate commitment as a Lender under the Facility. Until such time as the syndication is completed and the definitive Credit Agreement is executed, Crescent Harbor underwrites the full $950,000,000 commitment.
Pinnacle Trust Company, N.A. shall serve as Collateral Agent and Security Trustee with respect to the Facility, both in the domestic context (for all United States collateral) and, through its London branch (Pinnacle Trust Company, London Branch), for the German-law security package, which shall be structured under a parallel-debt mechanism (Parallelschuld) customary for German-law secured credit facilities.
The Facility and the definitive Credit Agreement shall be governed by the laws of the State of New York, without regard to principles of conflicts of law (other than Sections 5-1401 and 5-1402 of the New York General Obligations Law). The German-law security documents relating to the assets of IHDC Frankfurt (including, without limitation, the Grundschuld, the Globalzession, the Kontoverpfändung, the Sicherungsübereignung, and the Security Purpose Agreement) shall be governed by German law. The parallel-debt and security trust provisions shall be governed as set forth in the definitive documentation.
2. Roles and Titles
The following roles and titles shall apply in connection with the Facility:
Crescent Harbor reserves the right, in consultation with the Borrower, to appoint additional co-managers or co-arrangers from among the Lenders who participate in the syndication, to the extent Crescent Harbor determines such appointments would facilitate the successful syndication of the Facility. Any such appointment shall be subject to the prior consent of the Borrower, which consent shall not be unreasonably withheld, conditioned, or delayed. Notwithstanding any such appointment, Crescent Harbor shall retain the senior-most title and role as Sole Lead Arranger and Sole Bookrunner, and shall have the sole right to manage the books, determine allocations, and run the syndication process.
The following key personnel at Crescent Harbor have been assigned to the Facility and shall serve as the Borrower's primary points of contact in connection therewith:
Martin Gallagher, Managing Director, Leveraged & Structured Finance — Deal Lead
Priya Nair, Director, Data Center & Digital Infrastructure Lending — Sector Coverage
Thomas Beckett, Vice President, Loan Operations & Agency Services — Agency and Operations
3. Syndication
3.1 Syndication Strategy
Crescent Harbor intends to syndicate portions of the Facility to a group of institutional lenders, which may include domestic and international commercial banks, credit funds, insurance company lenders, CLO vehicles, and other institutional investors customarily participating in term loan B facilities. The target syndication timeline contemplates a launch of the syndication process on or about March 15, 2024, with the objective of receiving binding commitments from syndicate lenders by April 19, 2024.
The Borrower and the Sponsor acknowledge and agree that they shall cooperate with and assist Crescent Harbor in connection with the syndication of the Facility, including by (a) making senior management of the Borrower and the Sponsor available for lender meetings, presentations, and calls at reasonable times and upon reasonable notice; (b) providing such information as may be reasonably requested by Crescent Harbor for inclusion in the Confidential Information Memorandum (as defined below) or for distribution to prospective lenders; (c) using commercially reasonable efforts to ensure that the syndication benefits from the existing lending and investment relationships of the Borrower and the Sponsor; and (d) not taking any action that would, or would reasonably be expected to, adversely affect the syndication of the Facility.
Without limiting the foregoing, the Borrower agrees that, during the syndication period (from the date hereof through the completion of syndication), neither the Borrower nor any of its subsidiaries shall syndicate, issue, or incur any debt (other than ordinary course trade payables and draws under the existing super-senior revolving credit facility) without the prior written consent of Crescent Harbor, if such debt would reasonably be expected to impair the syndication of the Facility.
3.2 Confidential Information Memorandum
Crescent Harbor shall prepare, with the review and assistance of the Borrower's counsel, Calderwood & Harkness LLP, a Confidential Information Memorandum (the "CIM") for distribution to prospective lenders in connection with the syndication. The CIM shall contain customary business, financial, industry, and technical information relating to the Borrower, the Co-Borrower, the Parent Guarantor, the Sponsor, the data center campuses, the pre-lease arrangements, and the market opportunity, as well as a summary of the terms and conditions of the Facility.
The Borrower shall, and shall cause its subsidiaries and affiliates to, cooperate fully with Crescent Harbor in the preparation of the CIM, including by providing all information reasonably requested by Crescent Harbor. The Borrower shall review and approve the CIM prior to its distribution, and shall certify in writing that the information contained therein that has been provided by or on behalf of the Borrower and its subsidiaries is accurate and complete in all material respects and does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein, in light of the circumstances under which they were made, not misleading. The Borrower acknowledges that Crescent Harbor will be relying on such certification in distributing the CIM to prospective lenders.
Calderwood & Harkness LLP shall provide a 10b-5-style negative assurance letter, addressed to Crescent Harbor and the prospective Lenders, in connection with the CIM, in form and substance customary for transactions of this type and reasonably satisfactory to Crescent Harbor and Blackthorn & Sundial Software.
3.3 Ticking Fee During Syndication
From the date of syndication launch (anticipated to be March 15, 2024) until the Closing Date, a ticking fee equal to 0.25% per annum shall accrue on all undrawn commitments under the Facility. The ticking fee shall be calculated on the basis of a 360-day year and actual days elapsed, and shall be payable in full on the Closing Date. For the avoidance of doubt, the ticking fee shall accrue on the entire undrawn commitment amount of $950,000,000 (or, following completion of syndication, on each Lender's portion of the undrawn commitment) until such time as the Facility is funded on the Closing Date.
3.4 Market Flex Provisions
Crescent Harbor reserves the right, in consultation with the Borrower, to modify the pricing, structure, and terms of the Facility to the extent reasonably determined by Crescent Harbor to be advisable or necessary in order to ensure the successful syndication of the Facility (collectively, "Market Flex"). The Market Flex provisions set forth below may be exercised by Crescent Harbor, in its reasonable discretion and in good faith, at any time prior to the completion of the syndication process, subject to the limitations set forth herein.
Pricing Flex. Crescent Harbor shall have the right to increase the applicable margin on the Facility by up to fifty (50) basis points, from the initial level of Term SOFR + 425 basis points to a maximum of Term SOFR + 475 basis points with respect to the USD Tranche, and correspondingly from EURIBOR + 425 basis points to a maximum of EURIBOR + 475 basis points with respect to the EUR Sub-Tranche.
OID Flex. Crescent Harbor shall have the right to increase the original issue discount on the Facility by up to fifty (50) basis points, from the initial issue price of 99.50 to a minimum issue price of 99.00 (i.e., a maximum aggregate OID of 100 basis points). Such increase would reduce the net proceeds to the Borrower accordingly.
SOFR Floor Flex. Crescent Harbor shall have the right to increase the SOFR floor applicable to the USD Tranche by up to fifty (50) basis points, from the initial floor of 0.50% to a maximum floor of 1.00%. Correspondingly, the EURIBOR floor applicable to the EUR Sub-Tranche may be increased from 0.00% to a maximum of 0.50%.
Structural Flex. Crescent Harbor shall have the right to (a) reallocate commitments between the USD Tranche and the EUR Sub-Tranche, (b) adjust the amortization schedule within a range of 0.50% to 1.50% per annum of the original principal amount, (c) modify the Excess Cash Flow sweep percentages or the Net Leverage Ratio step-down thresholds applicable to such sweep, and (d) make other structural modifications to the Facility, in each case to the extent reasonably determined by Crescent Harbor to be necessary to facilitate the successful syndication of the Facility.
Financial Covenant Flex. Crescent Harbor shall have the right to tighten the maximum Net Leverage Ratio by up to 0.25x (from 6.00x to 5.75x) and/or increase the minimum Interest Coverage Ratio by up to 0.25x (from 2.00x to 2.25x), in each case to the extent reasonably determined by Crescent Harbor to be necessary to facilitate the successful syndication of the Facility.
All Market Flex provisions shall be exercised by Crescent Harbor in good faith and only to the extent reasonably determined by Crescent Harbor to be necessary for the successful completion of the syndication. Prior to exercising any Market Flex, Crescent Harbor shall provide the Borrower with not less than three (3) business days' prior written notice specifying the nature and extent of the proposed modification. For the avoidance of doubt, the Borrower shall not have a right of approval or veto over any exercise of Market Flex within the parameters set forth above.
The Market Flex provisions set forth in this Section 3.4 are strictly confidential as between Crescent Harbor and the Borrower and shall not be disclosed to any prospective Lender, syndicate member, or other third party under any circumstances. Without limiting the generality of Section 10 (Confidentiality), the Borrower acknowledges that any breach of the confidentiality of the Market Flex provisions could materially impair the syndication process and agrees that the restrictions of this paragraph are reasonable and necessary.
4. Conditions Precedent to Commitment
The commitment of Crescent Harbor to fund the Facility on the Closing Date is subject to the satisfaction (or waiver by Crescent Harbor in its sole discretion) of the conditions precedent set forth in detail in Exhibit B attached hereto and incorporated herein by reference (the "Conditions Precedent"). For convenience of reference, the following is a summary of the key Conditions Precedent; provided that this summary is qualified in its entirety by reference to Exhibit B:
(a) Completion of due diligence (including environmental, title, and appraisal diligence) in a manner satisfactory to Crescent Harbor and its counsel, Blackthorn & Sundial Software;
(b) Absence of a Material Adverse Effect (as defined in the Term Sheet) with respect to the Borrower and its subsidiaries, taken as a whole, since September 30, 2023;
(c) Negotiation, execution, and delivery of the Credit Agreement and all related loan documents and security documents (both domestic and German-law), in form and substance satisfactory to Crescent Harbor and Blackthorn & Sundial Software;
(d) Receipt of all legal opinions from counsel to the Borrower (Calderwood & Harkness LLP and Wendt Falkenberg Rechtsanwälte PartG mbB) and such other legal opinions as may be customary or reasonably required;
(e) Completion of OFAC, sanctions, and KYC screening for all Lenders, all Loan Parties, and their respective beneficial owners and related persons, as applicable;
(f) Receipt of evidence of insurance meeting the requirements to be set forth in the Credit Agreement, with Pinnacle Trust Company, N.A. named as loss payee and additional insured, as applicable;
(g) Receipt of MAI appraisals, title insurance commitments and policies, ALTA/NSPS surveys, and Phase I and Phase II environmental site assessments for both campuses;
(h) Delivery of pro forma financial statements (including the Pro Forma Capitalization set forth in the Term Sheet), a solvency certificate signed by the Chief Financial Officer of the Borrower, and an Officer's Closing Certificate;
(i) Repayment in full of the existing mezzanine notes held by Greystone Mezzanine Fund II, LP in the aggregate principal amount of $130,000,000 (plus all accrued and unpaid PIK interest thereon), and release and termination of all liens securing such mezzanine notes;
(j) Receipt by the Borrower of an equity contribution of not less than $410,000,000 from Thornfield Infrastructure Fund III, LP (or its designated affiliate), in form and substance satisfactory to the Administrative Agent; and
(k) Recording and perfection of all security interests contemplated by the Security Documents, including the filing of UCC-1 financing statements, the recording of the Deed of Trust in Loudoun County, Virginia, the filing of the Grundschuld with the Grundbuchamt in Frankfurt am Main, and the completion of all other filings, registrations, and recordings necessary to create and perfect first-priority liens (subject to customary permitted liens) on all collateral.
5. Use of Proceeds
The proceeds of the Term Loan shall be used by the Borrowers solely for the following purposes:
The proceeds allocated to the Frankfurt campus construction shall be funded through the EUR Sub-Tranche and converted at the spot EUR/USD exchange rate on the Closing Date. Any difference between the assumed exchange rate (1.0846) and the actual spot rate on the Closing Date shall result in a corresponding adjustment to the dollar-equivalent amount allocated to the Frankfurt campus, with such difference to be applied to working capital and general corporate purposes (if the dollar-equivalent amount decreases) or funded from other available sources (if the dollar-equivalent amount increases).
No portion of the proceeds of the Facility shall be used, directly or indirectly, (a) to purchase or carry any "margin stock" within the meaning of Regulations T, U, or X of the Board of Governors of the Federal Reserve System, or (b) in violation of applicable law, including without limitation the Foreign Corrupt Practices Act of 1977, as amended, or any applicable sanctions laws or regulations administered by OFAC, the European Union, the United Kingdom Office of Financial Sanctions Implementation, or the German Federal Financial Supervisory Authority (BaFin).
6. Fees
The fees payable by the Borrower in connection with the Facility are set forth in detail in the separate Fee Letter of even date herewith (the "Fee Letter"), executed by Crescent Harbor and the Borrower. The following is a summary of the principal fee elements; provided that this summary is qualified in its entirety by reference to the Fee Letter:
Arrangement Fee: An arrangement fee equal to 1.50% of the aggregate commitments under the Facility (i.e., $950,000,000 × 1.50% = $14,250,000), payable in full in immediately available funds on the Closing Date.
Administrative Agent Fee: An annual administrative agent fee of $175,000 per annum, payable by the Borrower to Crescent Harbor (as Administrative Agent) annually in advance, commencing on the Closing Date.
Collateral Agent Fee: An annual collateral agent fee of $200,000 per annum in the aggregate, payable by the Borrower to Pinnacle Trust Company, N.A. (as Collateral Agent), consisting of (i) $125,000 per annum for domestic collateral agent services and (ii) $75,000 per annum for services as German security trustee through its London branch. Such fee shall be payable annually in advance, commencing on the Closing Date.
Upfront Fee / Original Issue discount: An upfront fee of fifty (50) basis points, structured as an original issue discount, with the Facility funded at an issue price of 99.50. The aggregate upfront fee is $950,000,000 × 0.50% = $4,750,000, effectively funded through the discount, resulting in net proceeds to the Borrower of $945,250,000.
Ticking Fee: A ticking fee of 0.25% per annum on all undrawn commitments from the date of syndication launch (anticipated to be March 15, 2024) through the Closing Date, payable on the Closing Date, as described in Section 3.3 above.
All fees are non-refundable when paid, and are not subject to set-off or counterclaim. The Fee Letter is an integral part of this Commitment Letter and the terms thereof are incorporated herein by reference.
7. Information Requirements
The Borrower shall provide (or cause to be provided) to Crescent Harbor the following information in connection with the Facility:
(a) Annual Financial Statements: Audited consolidated financial statements of the Borrower and its subsidiaries for the most recently completed fiscal year, prepared in accordance with GAAP and audited by Ashford & Mercer LLP (or such other nationally recognized independent public accounting firm as may be reasonably acceptable to Crescent Harbor);
(b) Quarterly Financial Statements: Unaudited consolidated financial statements of the Borrower and its subsidiaries for each fiscal quarter, certified by the Chief Financial Officer of the Borrower;
(c) Pro Forma Financial Projections: Pro forma financial projections for the Borrower and its subsidiaries covering the period through the Maturity Date, including pro forma income statements, balance sheets, cash flow statements, and capital expenditure budgets, in form and substance reasonably satisfactory to Crescent Harbor;
(d) Environmental Reports: Phase I and Phase II environmental site assessments for both the Virginia campus and the Frankfurt campus, prepared by Greenline Environmental Solutions, Inc. (or such other nationally recognized environmental consulting firm as may be reasonably acceptable to Crescent Harbor), in form and substance satisfactory to Crescent Harbor;
(e) Appraisals: MAI appraisals prepared by Meridian Valuation Group, LLC (or such other nationally recognized appraisal firm as may be reasonably acceptable to Crescent Harbor) for both the Virginia campus and the Frankfurt campus, in form and substance satisfactory to Crescent Harbor;
(f) Title Reports and Surveys: Commitment for title insurance and ALTA/NSPS surveys for the Virginia campus, together with title reports and land registry extracts for the Frankfurt campus;
(g) Insurance Certificates: Evidence of insurance coverage meeting the requirements to be set forth in the Credit Agreement, together with certificates from Calloway & Strand Insurance Brokers, Inc. (or such other broker or insurer as may be reasonably acceptable to Crescent Harbor);
(h) Organizational Documents: Copies of the organizational documents of all Loan Parties, including the certificate of formation and limited liability company agreement of IHDC, the certificate of incorporation and bylaws of Ironhaven Holdings Inc., and the Gesellschaftsvertrag and Handelsregisterauszug of IHDC Frankfurt;
(i) Material Contracts: Copies of all material contracts of the Borrower and its subsidiaries, including without limitation: (A) the pre-lease letter of intent with Stratos Cloud Services, Inc. for 30 MW at the Virginia campus ($14.4 million annual rent, 5-year term); (B) the pre-lease letter of intent with Euronova Digital GmbH for 20 MW at the Frankfurt campus (€9.8 million annual rent, 7-year term); and (C) all construction contracts, engineering procurement and construction (EPC) contracts, utility service agreements, and interconnection agreements related to either campus.
The Borrower and the Sponsor shall make management of the Borrower and the Sponsor available for lender presentations, due diligence sessions, and meetings at reasonable times and upon reasonable notice. The key contacts for such purposes shall be Marcus Delaine (Chief Executive Officer), Rebecca Sung (Chief Financial Officer), and Elena Castillo (Partner, Head of Digital Infrastructure, Thornfield Capital Partners, LP).
8. Representations and Warranties of the Borrower
The Borrower represents and warrants to Crescent Harbor as of the date hereof, and shall be deemed to repeat each such representation and warranty as of the Closing Date, as follows:
(a) Organization and Good Standing. The Borrower is a limited liability company duly organized, validly existing, and in good standing under the laws of the State of Delaware, with its principal place of business and headquarters located at 4500 Dominion Ridge Boulevard, Suite 300, Ashburn, Virginia 20147. The Co-Borrower is a Gesellschaft mit beschränkter Haftung duly organized and validly existing under the laws of the Federal Republic of Germany, registered with the Amtsgericht Frankfurt am Main under HRB 129457. The Parent Guarantor, Ironhaven Holdings Inc., is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware. Each Loan Party is duly qualified and authorized to do business in each jurisdiction where the nature of its business or the ownership of its properties requires such qualification.
(b) Power and Authority. The Borrower has full power, authority, and legal right to execute, deliver, and perform its obligations under this Commitment Letter, the Fee Letter, and each other document to which it is or will be a party in connection with the Facility, and has taken all necessary limited liability company action to authorize the execution, delivery, and performance thereof.
(c) No Conflict. The execution, delivery, and performance by the Borrower of this Commitment Letter and the other documents contemplated hereby do not and will not (i) conflict with or violate the organizational documents of any Loan Party, (ii) conflict with or violate any material agreement or instrument to which any Loan Party is a party or by which any Loan Party or its assets may be bound, or (iii) violate any applicable law, rule, regulation, order, judgment, or decree of any governmental authority having jurisdiction over any Loan Party.
(d) No Material Litigation. There is no action, suit, investigation, or proceeding pending or, to the knowledge of the Borrower, threatened against the Borrower, the Co-Borrower, the Parent Guarantor, or any of their respective subsidiaries before any court, arbitral tribunal, or governmental authority that would reasonably be expected to have a Material Adverse Effect.
(e) Accuracy of Information. All financial information and other data that has been or will be made available by or on behalf of the Borrower to Crescent Harbor in connection with the Facility is, and when delivered will be, accurate and complete in all material respects and does not, and when delivered will not, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein, in light of the circumstances under which they were made, not misleading.
(f) Investment Company Act. None of the Borrower, the Co-Borrower, or the Parent Guarantor is, or upon the consummation of the transactions contemplated hereby will become, an "investment company" or a company "controlled" by an "investment company," as such terms are defined in the Investment Company Act of 1940, as amended.
(g) OFAC and Sanctions Compliance. None of the Borrower, the Co-Borrower, the Parent Guarantor, their respective officers, directors, or, to the Borrower's knowledge, any of their employees or agents is a person or entity that is, or is owned or controlled by persons or entities that are, (i) the target of any sanctions administered or enforced by the U.S. Department of the Treasury's Office of Foreign Assets Control ("OFAC"), the U.S. Department of State, the United Nations Security Council, the European Union (including pursuant to Council Regulation (EU) No 269/2014), the United Kingdom's Office of Financial Sanctions Implementation ("OFSI"), or any other relevant sanctions authority, or (ii) located, organized, or resident in a country or territory that is, or whose government is, the subject of comprehensive territorial sanctions (currently including Cuba, Iran, North Korea, Syria, and the Crimea, Donetsk, and Luhansk regions of Ukraine). None of the Borrower, the Co-Borrower, the Parent Guarantor, or their respective subsidiaries is in violation of, or has within the preceding five (5) years been in violation of, any applicable anti-money laundering laws, including the German Geldwäschegesetz (GwG) and the U.S. Bank Secrecy Act, or any anti-corruption laws, including the Foreign Corrupt Practices Act of 1977, as amended, and the UK Bribery Act 2010.
9. Indemnification
The Borrower agrees to indemnify and hold harmless Crescent Harbor, its affiliates (including Pinnacle Trust Company, N.A., solely in its capacity as Collateral Agent), and their respective officers, directors, employees, agents, advisors, controlling persons, successors, and assigns (each, an "Indemnified Party") from and against any and all losses, claims, damages, liabilities, costs, and expenses (including, without limitation, reasonable and documented fees, disbursements, and other charges of counsel, and costs of investigation) (collectively, "Losses") to which any such Indemnified Party may become subject, insofar as such Losses arise out of, result from, or are related to (a) this Commitment Letter, the Fee Letter, the Facility, or any of the transactions contemplated hereby or thereby, (b) any breach by the Borrower or any of its affiliates of any representation, warranty, or covenant set forth in this Commitment Letter, or (c) the use or intended use of the proceeds of the Facility.
Notwithstanding the foregoing, the Borrower shall have no obligation to indemnify any Indemnified Party to the extent that any such Losses are determined by a final, non-appealable judgment of a court of competent jurisdiction to have resulted from the gross negligence, bad faith, or willful misconduct of such Indemnified Party.
The indemnification obligations of the Borrower under this Section 9 shall survive the termination or expiration of this Commitment Letter, the closing of the Facility, and the repayment of all obligations under the Credit Agreement, and shall remain in full force and effect regardless of whether the transactions contemplated hereby are consummated.
10. Confidentiality
This Commitment Letter and its contents (including, without limitation, the Term Sheet, the Market Flex provisions set forth in Section 3.4, and the Fee Letter) are confidential and may not be disclosed by the Borrower or any of its affiliates to any third party without the prior written consent of Crescent Harbor, except for disclosure:
(a) to the Borrower's officers, directors, employees, legal counsel (including Calderwood & Harkness LLP and Wendt Falkenberg Rechtsanwälte PartG mbB), accountants (including Ashford & Mercer LLP), and financial advisors, in each case who have a need to know such information in connection with the transactions contemplated hereby and who are informed of the confidential nature of such information and agree to treat it as confidential;
(b) to Thornfield Capital Partners, LP and its affiliates (including Thornfield Infrastructure Fund III, LP and Thornfield Capital Management LLC), and their respective officers, directors, employees, and advisors, in each case on a need-to-know basis;
(c) as required by applicable law, regulation, legal process, or by order of any governmental authority or regulatory body (provided that, to the extent permitted by law, the Borrower shall provide Crescent Harbor with prior written notice of any such required disclosure and shall cooperate with Crescent Harbor to obtain confidential treatment or a protective order); and
(d) to prospective lenders in connection with the syndication of the Facility, subject to such prospective lenders' execution and delivery of customary confidentiality agreements or "click-through" confidentiality undertakings in form and substance reasonably satisfactory to Crescent Harbor.
Notwithstanding the foregoing or anything else contained herein, the Market Flex provisions set forth in Section 3.4 of this Commitment Letter shall not be disclosed to any prospective Lender, syndicate member, rating agency (other than as contemplated by Section B.10 of Exhibit B), or any other third party under any circumstances, except as may be required by applicable law or legal process (and subject to the notice and cooperation obligations set forth in clause (c) above).
11. Expenses
Whether or not the Closing occurs, the Borrower agrees to pay or reimburse Crescent Harbor for all reasonable and documented out-of-pocket costs and expenses incurred by Crescent Harbor in connection with the Facility, including, without limitation:
(a) the fees and expenses of Blackthorn & Sundial Software, as counsel to the Administrative Agent and the Lenders, incurred in connection with the negotiation, preparation, execution, and delivery of this Commitment Letter, the Fee Letter, the Credit Agreement, the Security Documents, and all other definitive documentation, and in connection with the provision of legal opinions and the rendering of legal advice related thereto;
(b) syndication expenses, including the costs of printing, production, and distribution of the Confidential Information Memorandum, lender presentations, and related marketing materials;
(c) filing and recording fees, including fees for the filing of UCC-1 financing statements, the recording of the Deed of Trust in Loudoun County, Virginia, the filing of the Grundschuld with the Grundbuchamt in Frankfurt am Main, and any other applicable filings or recordings;
(d) due diligence costs, including the costs of environmental assessments, appraisals, title searches, surveys, and lien searches, to the extent not directly engaged and paid for by the Borrower; and
(e) search fees, including the costs of UCC, federal tax lien, judgment, and litigation searches in all applicable jurisdictions.
The Borrower acknowledges that the fees and expenses of Blackthorn & Sundial Software are subject to a separate engagement between Crescent Harbor and Blackthorn & Sundial Software, and that estimated fees have not been fixed as of the date hereof. The Borrower agrees that the Lenders' counsel fees shall be funded by the Borrower at or prior to the Closing Date. The obligation of the Borrower to pay or reimburse expenses pursuant to this Section 11 shall survive the termination or expiration of this Commitment Letter.
12. Termination and Expiration
This Commitment Letter shall expire at 5:00 p.m. (New York City time) on March 8, 2024, unless prior to such time the Borrower has countersigned and returned to Crescent Harbor an executed copy of this Commitment Letter, together with a countersigned copy of the Fee Letter.
If this Commitment Letter is duly countersigned and returned by the Borrower, the commitments of Crescent Harbor hereunder shall terminate automatically and without further action upon the earliest to occur of the following:
(a) the Closing Date, at which point the commitment evidenced by this Commitment Letter shall be superseded by the commitments set forth in the definitive Credit Agreement;
(b) June 30, 2024 (the "Outside Date"), if the Closing has not occurred on or prior to such date (provided that the Outside Date may not be extended without the prior written agreement of Crescent Harbor);
(c) written notice of termination delivered by the Borrower to Crescent Harbor; or
(d) the occurrence of a Material Adverse Effect with respect to the Borrower and its subsidiaries, taken as a whole, as determined by Crescent Harbor in its reasonable discretion.
The termination of the commitments hereunder shall not affect the obligations of the Borrower under Sections 6 (Fees, to the extent accrued), 9 (Indemnification), 10 (Confidentiality), 11 (Expenses), or 13 (Governing Law and Jurisdiction), each of which shall survive such termination in accordance with their respective terms.
13. Governing Law and Jurisdiction
This Commitment Letter shall be governed by and construed in accordance with the laws of the State of New York, without regard to principles of conflicts of law (other than Sections 5-1401 and 5-1402 of the New York General Obligations Law).
Each of the parties hereto hereby irrevocably and unconditionally submits to the exclusive jurisdiction of the federal courts of the United States of America located in the Southern District of New York, and the state courts of the State of New York located in the Borough of Manhattan, New York City, in any action or proceeding arising out of or relating to this Commitment Letter, the Fee Letter, or the transactions contemplated hereby or thereby. Each party waives any objection to venue in such courts and any right it may have to transfer or remove such action or proceeding to another court.
EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS COMMITMENT LETTER, THE FEE LETTER, THE FACILITY, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
14. Miscellaneous
Entire Agreement. This Commitment Letter (together with the Fee Letter and the Term Sheet attached hereto as Exhibit A) constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, negotiations, and understandings, oral or written, between the parties with respect thereto. For the avoidance of doubt, the Mandate Letter of February 12, 2024 is hereby superseded to the extent of any conflict with the terms of this Commitment Letter.
Amendments and Waivers. No amendment, modification, supplement, or waiver of any provision of this Commitment Letter shall be effective unless set forth in a writing signed by each of the parties hereto. No failure or delay by any party in exercising any right, power, or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power, or privilege.
Assignment. Crescent Harbor may not assign its commitment hereunder, in whole or in part, without the prior written consent of the Borrower, except that Crescent Harbor may assign portions of its commitment to other Lenders in connection with the syndication of the Facility as contemplated by Section 3 hereof. The Borrower may not assign any of its rights or obligations hereunder without the prior written consent of Crescent Harbor.
Counterparts; Electronic Execution. This Commitment Letter may be executed in one or more counterparts, each of which shall be deemed an original and all of which, taken together, shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page of this Commitment Letter by facsimile transmission, by electronic mail in "portable document format" (.pdf) form, or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document shall be effective as delivery of an original executed counterpart hereof and shall be deemed to constitute valid and effective execution and delivery of this Commitment Letter. Each party hereto agrees that the electronic signatures appearing on this Commitment Letter are the same as handwritten signatures for the purposes of validity, enforceability, and admissibility.
No Fiduciary Duty; Arm's-Length Transaction. The Borrower acknowledges and agrees that (a) Crescent Harbor is acting solely as a lender, arranger, and agent in connection with the Facility and not as a financial advisor or fiduciary to the Borrower or any of its affiliates; (b) neither Crescent Harbor nor any of its affiliates has any obligation to the Borrower or its affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the Fee Letter; (c) Crescent Harbor and its affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Borrower, and Crescent Harbor has no obligation to disclose any of such interests to the Borrower; and (d) Crescent Harbor has not provided and will not provide any legal, accounting, regulatory, or tax advice in connection with the Facility, and the Borrower has consulted its own legal, accounting, regulatory, and tax advisors to the extent it has deemed appropriate.
Notices. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given when (a) delivered by hand, (b) sent by electronic mail (with confirmation of receipt), or (c) one business day after deposit with a nationally recognized overnight courier, addressed as follows:
If to Crescent Harbor:
Crescent Harbor Bank, N.A. 1200 Harbor Point Drive Charlotte, North Carolina 28202
Attention: Martin Gallagher, Managing Director, Leveraged & Structured Finance
Email: m.gallagher@crescentharbor.com
If to the Borrower:
Ironhaven Data Centers LLC 4500 Dominion Ridge Boulevard, Suite 300 Ashburn, Virginia 20147
Attention: Natasha Greenfeld, VP, Treasury & Capital Markets
Email: n.greenfeld@ironhavendc.com
with a copy to:
Jonathan Pryce-Williams, General Counsel & Secretary Ironhaven Data Centers LLC 4500 Dominion Ridge Boulevard, Suite 300 Ashburn, Virginia 20147
Email: j.pryce-williams@ironhavendc.com
Either party may change its address for purposes of this Section by notice to the other party in accordance with this provision.
[Remainder of this page intentionally left blank. Signature pages follow.]
If the foregoing correctly sets forth our agreement, please indicate your acceptance of the terms and conditions of this Commitment Letter and the Fee Letter by signing and returning to us executed counterparts of this Commitment Letter and the Fee Letter no later than 5:00 p.m. (New York City time) on March 8, 2024.
We look forward to working with you on this important transaction.
Very truly yours,
CRESCENT HARBOR BANK, N.A.
By: ________
Name: Martin Gallagher
Title: Managing Director, Leveraged & Structured Finance
Date: February 28, 2024
ACCEPTANCE AND AGREEMENT
The undersigned hereby accept and agree to the terms and conditions set forth in this Commitment Letter and in the Fee Letter of even date herewith. The undersigned further confirm that the representations and warranties set forth in Section 8 are true, correct, and complete in all material respects as of the date hereof.
IRONHAVEN DATA CENTERS LLC
By: ________
Name: Marcus Delaine
Title: Chief Executive Officer
Date: February 28, 2024
IRONHAVEN DATA CENTERS LLC
By: ________
Name: Rebecca Sung
Title: Chief Financial Officer
Date: February 28, 2024
ACKNOWLEDGMENT
For Sponsor information purposes only; Thornfield Capital Partners, LP is not a party to this Commitment Letter and assumes no obligations hereunder.
The undersigned hereby acknowledges receipt of this Commitment Letter and confirms its awareness of the terms and conditions set forth herein, including the equity contribution requirements set forth in Section 4 and Exhibit B.
THORNFIELD CAPITAL PARTNERS, LP
By: Thornfield Capital Management LLC, its General Partner
By: ________
Name: Elena Castillo
Title: Partner, Head of Digital Infrastructure
Date: February 28, 2024
EXHIBIT A
Summary of Terms and Conditions
(Term Sheet)
This Term Sheet is part of the Commitment Letter dated February 28, 2024 (the "Commitment Letter") from Crescent Harbor Bank, N.A. to Ironhaven Data Centers LLC. Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Commitment Letter. This Term Sheet is intended as a summary of the principal terms and conditions of the Facility and is not intended to be an exhaustive description of all the terms and conditions thereof, which terms and conditions shall be set forth in the definitive Credit Agreement and related documentation.
A.1 Parties.
A.2 Facility. Type: Senior Secured Term Loan B
Aggregate Commitments: $950,000,000
Currency: United States Dollars ("USD"), with a Euro ("EUR")-denominated sub-tranche, as follows:
Maturity: Seven (7) years from the Closing Date. Based on an anticipated Closing Date of June 3, 2024, the anticipated Maturity Date would be June 3, 2031.
Delayed Draw: The Facility contemplates a delayed-draw structure. Signing of the definitive Credit Agreement is anticipated to occur on or about May 15, 2024, with funding to occur on the Closing Date upon the satisfaction (or waiver) of all conditions precedent set forth in Exhibit B to the Commitment Letter. The Closing Date is currently targeted for June 3, 2024.
A.3 Interest Rate
USD Tranche:
Base Rate: Term SOFR (as administered by CME Group Benchmark Administration Limited, based on the forward-looking Secured Overnight Financing Rate) for interest periods of one, three, or six months (at the election of the Borrower; one-month to be the default period).
Applicable Margin: 4.25% (425 basis points) per annum.
All-in Rate: Term SOFR + 4.25%
SOFR Floor: 0.50% per annum
EUR Sub-Tranche:
Base Rate: EURIBOR (Euro Interbank Offered Rate, as administered by the European Money Markets Institute) for interest periods of one, three, or six months (at the election of the Borrower).
Applicable Margin: 4.25% (425 basis points) per annum.
All-in Rate: EURIBOR + 4.25%
EURIBOR Floor: 0.00% per annum
Default Rate: Upon the occurrence and during the continuance of any Event of Default, all outstanding obligations shall bear interest at an additional 2.00% per annum above the otherwise applicable rate.
Interest Payment Dates: For Term SOFR loans, interest shall be payable quarterly in arrears. For EURIBOR loans, interest shall be payable at the end of each applicable interest period; provided that if any interest period exceeds three months, interest shall be payable at least quarterly. Interest shall be calculated on the basis of a 360-day year and actual days elapsed.
A.4 Original Issue discount
Issue Price: 99.50 (i.e., a discount of 50 basis points from par)
OID Amount: $950,000,000 × 0.50% = $4,750,000
Net Proceeds to Borrower: $950,000,000 × 99.50% = $945,250,000
A.5 Amortization. The Term Loan shall amortize at a rate of 1.00% per annum of the original principal amount, payable in equal quarterly installments as follows: