Dear Michelle,
I hope this message finds you well. On behalf of Calderwood & Harkness LLP, in our capacity as outside counsel to Ironhaven Data Centers LLC ("IHDC") in connection with the Stonebridge Data Center Campus development (C&H Matter No. 1043-00002), I am writing to transmit our initial markup of the Engineering, Procurement, and Construction Agreement (the "EPC Agreement") between Stonebridge Campus Holdings LLC, a to-be-formed single-purpose Virginia limited liability company wholly owned by IHDC (the "Owner"), and Titan-McAllister Construction Group, LLC ("TMCG") for the ground-up development of the approximately $600,000,000 data center campus located at the intersection of Belmont Ridge Road and Stonebridge Boulevard, Loudoun County, Virginia.
Please find attached a redline Word document reflecting our initial markup against TMCG's form of EPC Agreement. This markup incorporates substantive input from IHDC's development team, including Leonard Castellano (EVP Development), as well as Kestrel Infrastructure Advisors, LLC (Diane Prescott, Engagement Lead), serving as Owner's representative on this project. We appreciate the constructive dialogue to date and believe the parties are well-positioned to move efficiently toward execution. That said, the markup addresses a number of significant issues that will benefit from focused discussion, and I have summarized the key comments by topic area below.
**Summary of Key Comments**
**1. Guaranteed Maximum Price (GMP)**
Our markup addresses the GMP of $412,000,000 for the full scope of work, which encompasses four data center buildings (Buildings A–D, each approximately 120,000 square feet of shell with 24 MW of critical IT load per building), the central utility plant, site civil work, and structured parking — totaling approximately 480,000 gross square feet and 96 MW of critical IT load across the campus. We have proposed language in the GMP provisions clarifying the per-building GMP allocation of $103,000,000 per building (4 × $103M = $412M) and confirming that the GMP constitutes a true ceiling inclusive of contractor's fee, general conditions, and contingency. For reference, these figures yield a cost of approximately $858.33 per square foot and approximately $4,291,667 per MW on a GMP basis, as reflected in our proposed revisions to the GMP schedule (Exhibit B).
We have also added language governing the sharing of any savings realized below the GMP. We would appreciate TMCG's position on the proposed savings split ratio so that we can finalize this provision.
**2. Scope of Work (Exhibit A)**
Our markup confirms that the scope of work includes the 2N diesel generator configuration for backup power in each building, with generators procured under the EPC contract and included within the GMP. We have requested additional specificity in the technical specifications with respect to MEP systems and commissioning protocols. In addition, we have incorporated provisions addressing design coordination between TMCG and the Owner's civil/site design engineer, Lumen Ridge Engineering, PLLC (Carlos Esteban, PE), to ensure alignment on civil and site work interfaces.
**3. Construction Schedule and Milestone Dates (Exhibit C)**
The EPC Agreement contemplates a 24-month construction duration from Notice to Proceed ("NTP") to Substantial Completion of the final building. Based on a targeted NTP date of November 1, 2025, the milestone dates are as follows:
- Substantial Completion — Building A: August 1, 2027 - Substantial Completion — Buildings B–D (phased): November 1, 2027
Our markup adds interim milestone dates to provide greater visibility into project progress. We request that TMCG confirm the critical path schedule and identify any long-lead procurement items that may affect the timeline. We have also flagged the need to coordinate the construction schedule with the substation energization by Vantage Power Cooperative, currently targeted for June 1, 2027, to ensure the schedule aligns with power availability for commissioning and initial operations.
**4. Liquidated Damages for Delay**
We have proposed a liquidated damages rate of $125,000 per calendar day per building for each day of delay beyond the applicable Substantial Completion date, with a per-building LD cap of 10% of the per-building GMP allocation ($103,000,000 × 10% = $10,300,000 per building). Our markup provides that LDs accrue independently for each building and that the cap applies on a per-building basis rather than in the aggregate across the campus. We have also included clarifying language regarding force majeure carve-outs and the interaction between delay LDs and the extension-of-time provisions to ensure internal consistency.
**5. Retainage**
Our proposed retainage structure provides for retention of 10% of each progress payment until 50% completion of the work, reduced to 5% thereafter. All retainage would be held in an interest-bearing escrow account. We have included a provision that retainage is not released on a building-by-building basis but rather upon Substantial Completion of the entire campus. We recognize, however, that TMCG may prefer a partial release mechanism tied to individual building Substantial Completion, and we have flagged this as an open negotiation point for discussion.
**6. Change Order Procedures**
We have tightened the change order provisions in several respects:
- All change order work requires written pre-authorization from the Owner before any work is performed on a change order basis. - We have proposed a cap on contractor's overhead and profit markup percentages for change order work. - The markup distinguishes among owner-directed changes, contractor-requested changes, and changes required by governmental authority or unforeseen conditions. - Any change order exceeding $250,000 requires concurrent notice to the construction lender, Summit National Bank, N.A., as Administrative Agent, consistent with the requirements of the Construction Loan Agreement.
**7. Change of Control Provisions**
The markup addresses the change of control clause in two respects:
- *Contractor Change of Control:* The Owner retains a termination right upon a change of control of TMCG, with "change of control" defined broadly to include any merger, consolidation, sale of substantially all assets, or transfer of a controlling equity interest in TMCG. - *Owner Change of Control:* We acknowledge TMCG's right to consent (not to be unreasonably withheld, conditioned, or delayed) to any change of control of the Owner entity. However, we have proposed narrowing the scope of that consent right to exclude certain permitted transfers, including (a) transfers among affiliates of Ridgeline Capital Partners Fund IV, LP and (b) transfers required by the construction lenders.
This is a key coordination point. The Construction Loan Agreement includes a mandatory prepayment trigger if Ridgeline Fund IV ceases to hold at least 51% of the equity interests in the borrower or guarantor, and we need to ensure the EPC change of control definition does not create inconsistencies or additional consent requirements that could impede lender-required transfers. We are addressing this in a separate internal analysis but welcome TMCG's input on your specific concerns in this area.
**8. Insurance Requirements (Exhibit D)**
Our markup confirms the following insurance and bonding requirements:
- Commercial general liability coverage: $150,000,000 per occurrence (Pinnacle Indemnity Insurance Co.) - Builder's risk policy: $412,000,000 (Great Basin Surety & Insurance Corp.), with a $250,000 per-occurrence deductible - Performance bond: 100% of GMP = $412,000,000 (Great Basin Surety & Insurance Corp.) - Payment bond: 100% of GMP = $412,000,000 (Great Basin Surety & Insurance Corp.)
We have added a requirement that certificates of insurance be provided within 10 business days of EPC execution and updated annually or upon policy renewal. All policies must name Stonebridge Campus Holdings LLC, Ironhaven Data Centers LLC, and Summit National Bank, N.A. (as Administrative Agent) as additional insureds.
Please also note that the Owner is currently evaluating the implementation of an Owner-Controlled Insurance Program ("OCIP") through Northgate Insurance Brokerage, LLC (William Keane). If an OCIP is implemented, corresponding adjustments to TMCG's insurance obligations and GMP credits would be required, and we would anticipate addressing those changes through a future amendment to the EPC Agreement.
**9. Other Notable Provisions**
- *Indemnification:* We have proposed mutual indemnification provisions with carve-outs for willful misconduct and gross negligence. TMCG's indemnification obligations would survive for 24 months following final completion. - *Dispute Resolution:* The markup proposes binding arbitration administered under Virginia law, seated in Loudoun County, Virginia, with an interim step requiring senior executive negotiation before arbitration may be commenced. - *Lender Rights:* We have added a provision allowing Summit National Bank, N.A. (as Administrative Agent) to exercise step-in rights under the EPC Agreement upon an event of default under the Construction Loan Agreement, consistent with the collateral assignment of contracts. This provision cross-references the Assignment of Contracts, Permits, and Approvals. - *Governing Law:* Commonwealth of Virginia.
**Proposed Next Steps**
Given the target execution date of October 20, 2025, and the NTP target of November 1, 2025, we would like to maintain an efficient negotiation timeline. We propose scheduling a working session within the next two weeks — either in person at TMCG's offices in Lanham, Maryland, or by video conference — to walk through the markup in detail. We would ask that TMCG's counsel review the attached markup and provide a consolidated response or counter-markup in advance of that session to allow for a productive discussion. Diane Prescott and the Kestrel team are available to address any technical scope or schedule questions that arise during the review.
We appreciate the collaborative and professional approach that you and the TMCG team have brought to this process, and we look forward to continuing to work together toward execution. Please do not hesitate to reach out if you have any questions in the interim.
Best regards,
**Cynthia Ho** Senior Associate Calderwood & Harkness LLP 1900 K Street NW, Suite 800 Washington, DC 20006 T: (202) 555-4718 E: cho@calderwoodharkness.com
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