1043-00002 · Ironhaven Data Centers LLC · Entitlements & Land Use

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PRIVILEGED & CONFIDENTIAL — ATTORNEY WORK PRODUCT

CALDERWOOD & HARKNESS LLP 1900 K Street NW, Suite 800 Washington, DC 20006

MEMORANDUM

Matter No.: 1043-00002

May 19, 2025

TO: Douglas Fairchild, Responsible Partner, Real Estate

FROM: Cynthia Ho, Lead Associate, Real Estate

RE: Stonebridge Data Center Campus — Conditional Zoning Approval: Impact on Land Closing and Construction Financing Timeline

CLIENT: Ironhaven Data Centers LLC

CC: Angela Fontaine (Billing Partner); Grace Nakamura (Working Associate); Leonard Castellano (EVP, Development, IHDC); Priya Dasgupta (CFO, IHDC)

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I. Executive Summary

The purpose of this memorandum is to evaluate the timing interrelationship among three critical-path events in the development of the Stonebridge Data Center Campus located in unincorporated Loudoun County, Virginia:

(1) the Zoning Map Amendment / Zoning Modification ("ZMOD") approval by the Loudoun County Board of Supervisors, currently targeted for the October 2025 hearing cycle;

(2) the land closings for the Stonebridge Parcel (62.0 acres) and the Meridian Parcel (19.4 acres), both currently targeted for September 15, 2025; and

(3) the construction loan closing with Summit National Bank, N.A., as Administrative Agent, together with Cascade Commercial Lending Corp. and Harborview Trust Company as co-lenders, under a $390,000,000 senior secured construction loan facility, currently targeted for October 15, 2025.

The core issue presented by the current project sequencing is that the land closings are targeted to occur approximately four to six weeks before the anticipated ZMOD approval by the Board of Supervisors. This means that Ironhaven Data Centers LLC ("IHDC") — or its wholly owned single-purpose borrower entity, Stonebridge Campus Holdings LLC (to be formed) — would take title to 81.4 acres of land currently zoned PD-IP (Planned Development – Industrial Park) without yet having obtained the zoning entitlements necessary to construct and operate a data center campus on the site. The aggregate land acquisition cost is $77,900,000, and this capital would be deployed from equity prior to certainty regarding the project's entitlement status.

Compounding this risk, the construction loan closing is scheduled to occur contemporaneously with or shortly after the anticipated ZMOD approval. The construction loan proceeds are intended, in part, to reimburse IHDC's equity investment in the land acquisition. If the Board of Supervisors hearing is delayed beyond October 2025, or if the ZMOD application is denied or approved subject to conditions requiring further negotiation, the construction loan closing will likewise be delayed. This creates cascading timing risks that affect not only the financing but also the EPC contract execution with Titan-McAllister Construction Group, LLC, the Notice to Proceed target, and the overall project delivery schedule.

This memorandum identifies and analyzes these risks in detail, examines the relevant contractual mechanisms in the Purchase and Sale Agreements ("PSAs") and the anticipated construction loan documents, and recommends a series of mitigation strategies for discussion with IHDC management and its equity sponsor, Ridgeline Capital Partners Fund IV, LP.

II. Background — Project Timeline and Sequencing

A. The Stonebridge Data Center Campus

The Stonebridge Data Center Campus (the "Project") is a planned hyperscale data center development with a total project budget of approximately $600,000,000. The campus is designed to deliver 96 MW of critical IT load across four purpose-built data center buildings, designated Buildings A through D, each rated at 24 MW of critical IT load. The site is located at the intersection of Belmont Ridge Road and Stonebridge Boulevard in unincorporated Loudoun County, Virginia 20148, within what is commonly referred to as Loudoun County's established "Data Center Alley" corridor.

The total campus acreage is 81.4 acres, assembled from two adjacent parcels:

• Stonebridge Parcel: 62.0 acres, to be acquired from Blackthorn Realty Group, Inc. pursuant to a Purchase and Sale Agreement dated April 15, 2025 (the "Stonebridge PSA"), for a purchase price of $58,500,000 (approximately $943,548 per acre).

• Meridian Parcel: 19.4 acres, to be acquired from Meridian Acres LLC (managed by Theodore Ashford) pursuant to a Purchase and Sale Agreement dated April 22, 2025 (the "Meridian PSA"), for a purchase price of $19,400,000 (approximately $1,000,000 per acre).

The developer of the Project is Ironhaven Data Centers LLC ("IHDC"), a Delaware limited liability company with its principal office at 44680 Prentice Drive, Suite 200, Ashburn, Virginia 20147. IHDC is a portfolio company of Ridgeline Capital Partners Fund IV, LP ("Ridgeline Fund IV"), a $3.8 billion infrastructure-focused private equity fund managed by Ridgeline Capital Management LLC. Julian Hargrove serves as Managing Partner of Ridgeline Capital Management LLC. IHDC's senior management team includes Marcus Thorne (Chief Executive Officer), Leonard Castellano (Executive Vice President, Development), and Priya Dasgupta (Chief Financial Officer).

For purposes of the construction financing, a single-purpose borrower entity — Stonebridge Campus Holdings LLC — will be formed as a Virginia limited liability company and will be wholly owned by IHDC. Both PSAs will be assigned to Stonebridge Campus Holdings LLC prior to closing, and Stonebridge Campus Holdings LLC will serve as the borrower under the construction loan facility. IHDC will serve as the guarantor, providing a completion guaranty and a carry guaranty in favor of the lender syndicate.

B. Key Milestones and Dates

The following table summarizes the key project milestones and target dates as currently contemplated:

The due diligence periods under the Stonebridge and Meridian PSAs expire on July 14, 2025 and July 7, 2025, respectively. Upon expiration of these periods (assuming IHDC does not terminate), the earnest money deposits become non-refundable under the terms of the respective agreements, and IHDC's obligation to close on the scheduled closing date becomes binding, subject only to satisfaction of the closing conditions set forth in the PSAs. This is a significant inflection point: once the due diligence periods expire, IHDC's earnest money is at risk, and the firm is effectively committed to the land acquisition regardless of the status of the ZMOD application.

C. The Sequencing Gap

The fundamental timing challenge is as follows: the land closings on September 15, 2025 are designed to precede the ZMOD approval by the Board of Supervisors in October 2025 by approximately four to six weeks. This sequencing was adopted because the sellers — Blackthorn Realty Group, Inc. and Meridian Acres LLC — required closing certainty within the timeframes set forth in the PSAs, and IHDC determined that it could not reasonably negotiate PSA closing dates that extended into the fourth quarter of 2025 without risking the loss of the parcels to competing buyers in the highly competitive Loudoun County data center land market.

However, the Board of Supervisors hearing date for the ZMOD application may not be calendared until the application has proceeded through the full review process, which includes staff completeness review, referral agency comments, Planning Commission recommendation, and public hearing scheduling. This process typically takes four to five months from the date of application filing, but delays of one to three months beyond that baseline are common, particularly for data center projects that generate community interest or concern.

The construction loan closing on October 15, 2025 is designed to follow the ZMOD approval, but the loan closing is conditioned on — among other things — the ZMOD approval being in hand. If the Board of Supervisors hearing is delayed beyond October 2025, or if the ZMOD is approved subject to conditions that require further negotiation or modification, the construction loan closing will be correspondingly delayed.

This creates what we refer to in this memorandum as the "gap risk": IHDC closes on $77,900,000 of land from equity capital before the ZMOD is approved, but the construction loan — which is intended to reimburse the land costs and fund construction — may not close if the ZMOD approval is delayed or denied. During the gap period, IHDC bears the full economic exposure on the land acquisition without the benefit of debt financing, and without certainty that the project will proceed as planned.

The following sections of this memorandum analyze this gap risk in detail and recommend strategies to mitigate it.

III. Zoning Modification (ZMOD) Process and Timeline Analysis

A. Current Zoning and Required Entitlement

The Stonebridge Parcel and the Meridian Parcel are currently zoned PD-IP (Planned Development – Industrial Park) under the Loudoun County Zoning Ordinance. The PD-IP zoning district permits a range of industrial, office, and commercial uses, but data center use is not a by-right use within the PD-IP district. Rather, data center use in the PD-IP district requires a Zoning Modification, commonly referred to as a "ZMOD," which must be approved by the Loudoun County Board of Supervisors following a public hearing process.

The ZMOD is the single most critical entitlement required for the Project. Without ZMOD approval, IHDC cannot construct, operate, or lease data center facilities on the site. There is no alternative zoning pathway — such as a special exception or variance — that would permit data center use on this property. Accordingly, ZMOD approval is a binary gate: if approved, the Project proceeds; if denied, the Project cannot proceed on this site under its current zoning designation, and IHDC would need to either re-apply (potentially with a modified application or a different zoning approach) or abandon the site entirely.

Local zoning counsel for the Project is Ashcroft & Wynn, P.C. (Thomas Ashcroft, principal), a well-established Loudoun County land use firm with extensive experience in data center entitlement matters. The land use consultant supporting the ZMOD application is Cornerstone Land Use Consulting, LLC (Alan Mercer, principal), which has prepared the concept development plan, the proffer statement, and the supporting studies for the application.

B. ZMOD Process Steps

The ZMOD approval process in Loudoun County involves the following sequential steps, each of which must be completed before the Board of Supervisors can take action on the application:

1. Pre-Application Conference. A pre-application conference with the Loudoun County Department of Planning and Zoning was requested by letter submitted in April 2025. This conference is intended to familiarize County staff with the proposed project and to identify any threshold issues or concerns that should be addressed in the formal application. The pre-application conference is advisory only and does not bind the County to any position on the merits of the application. We understand from Ashcroft & Wynn that the pre-application conference was productive, and County staff did not identify any fatal flaws in the proposed project concept.

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

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

4. Referral Agency Review Period. Once the application is accepted as complete, it is referred to various County and state agencies for review and comment. Referral agencies typically include the Loudoun County Department of Transportation and Capital Infrastructure, the Loudoun County Fire and Rescue Department, the Virginia Department of Transportation (VDOT), the Loudoun Water Authority, and other relevant agencies. The referral agency review period typically spans sixty to ninety days and is often the longest single phase of the ZMOD process.

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

6. Planning Commission Public Hearing and Recommendation. The application is scheduled for a public hearing before the Loudoun County Planning Commission. The Planning Commission conducts the hearing, receives public comment, and issues a recommendation to the Board of Supervisors. The Planning Commission's recommendation is advisory and is not binding on the Board of Supervisors. The Planning Commission typically meets twice per month, and the scheduling of the public hearing depends on the Commission's calendar and the volume of pending applications.

7. Board of Supervisors Public Hearing and Action. Following the Planning Commission's recommendation, the application is scheduled for a public hearing before the Board of Supervisors. The Board of Supervisors conducts the hearing, receives public comment, and takes action on the application — either approving, denying, or deferring the application. The Loudoun County Board of Supervisors typically meets on the first and third Tuesdays of each month. The specific date of the hearing within the October 2025 hearing calendar will dictate the precise date on which the ZMOD is considered.

It is important to note that the Board of Supervisors retains broad discretion to defer action on a ZMOD application to a subsequent meeting cycle if the Board determines that additional information is needed, if proffer negotiations are ongoing, or if scheduling constraints prevent adequate consideration of the application at the originally scheduled hearing.

C. Proffer Negotiations

As part of the ZMOD application, IHDC will submit a proffer statement committing to certain voluntary conditions in connection with the rezoning. Proffers are a critical component of the ZMOD process in Loudoun County and are typically expected by the Board of Supervisors as a condition of approval for large-scale development projects, particularly data center projects.

The estimated proffer amount for the Project is $2,400,000, calculated at $5.00 per square foot of gross floor area based on an estimated total gross floor area of 480,000 square feet across the four data center buildings. The proffer statement, as currently drafted by Ashcroft & Wynn and Cornerstone Land Use Consulting, addresses the following categories:

• Fiscal impact mitigation: A cash contribution to the County's general fund to offset the fiscal impacts of the data center development, including increased demand for public services and infrastructure;

• Transportation improvements: Contributions toward or construction of improvements to Belmont Ridge Road and Stonebridge Boulevard, including road widening, intersection improvements, and turn lane construction, as identified in the traffic impact analysis;

• Noise mitigation: Commitments to operational noise limits at the property boundary, installation of noise barriers or screening walls, and restrictions on nighttime mechanical equipment operation in accordance with the noise impact study; and

• Visual screening and landscaping: Commitments to enhanced landscaping buffers, perimeter screening walls, and architectural treatment of the building facades visible from public rights-of-way and adjacent residential properties.

Proffer negotiations are an iterative process that typically involves multiple rounds of discussion between the applicant's counsel, the County staff, and the Board of Supervisors member representing the relevant election district. Proffer negotiations may extend the ZMOD timeline if the Board of Supervisors or the Planning Commission staff requests modifications to the proffer statement — for example, increased proffer amounts, additional transportation improvements, more stringent noise limits, or enhanced visual screening requirements. Thomas Ashcroft has advised that the current proffer statement is consistent with recent data center ZMOD approvals in the County, but that the Board of Supervisors has shown increasing interest in higher proffer amounts and more robust mitigation commitments in recent cycles, and that revisions to the proffer statement should be anticipated.

D. Risk Factors for Delay

Based on our review of the ZMOD process and discussions with local zoning counsel and the land use consultant, we have identified the following risk factors that could delay the ZMOD approval beyond the October 2025 target:

1. Community Opposition. Data center development in Loudoun County has generated increasing community concern in recent years, particularly regarding noise, traffic, visual impact, and the concentration of data center facilities in certain areas. The Project site is located in proximity to residential communities, and organized community opposition could result in requests for additional public hearings, the submission of petitions to the Board of Supervisors, or political pressure on Board members to defer action on the application.

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

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

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

5. Deferral to Subsequent Meeting Cycle. The Board of Supervisors has the discretion to defer action on any application to a subsequent meeting cycle without specifying a date certain for reconsideration. This is not uncommon, particularly for large-scale projects or projects that generate significant public comment.

Based on these risk factors, our realistic assessment is as follows: if the ZMOD application is filed on May 30, 2025, a best-case approval timeline is approximately four to five months, which would place the Board of Supervisors hearing in October 2025, consistent with the current target. However, delays of one to three months beyond the best-case timeline are common in Loudoun County, which would push the ZMOD approval to November 2025, December 2025, or January 2026. We believe it is prudent to plan for a delay scenario of at least two months beyond the October 2025 target — i.e., to assume that ZMOD approval may not be obtained until December 2025 or January 2026.

IV. Impact on Land Closings (September 15, 2025)

A. PSA Provisions — Zoning Contingency Analysis

The threshold question for the land closings is whether the Stonebridge PSA and the Meridian PSA contain any zoning contingency, condition precedent, or other contractual mechanism that conditions the buyer's obligation to close on the receipt of ZMOD approval. If such a contingency exists, IHDC would have a contractual basis to defer closing until the ZMOD is approved. If no such contingency exists, IHDC is obligated to close on September 15, 2025 regardless of the status of the ZMOD application.

1. Stonebridge PSA (Blackthorn Realty Group, Inc.)

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

The earnest money deposit under the Stonebridge PSA totals $2,925,000, structured in two installments: $1,462,500 deposited at execution (April 15, 2025) and $1,462,500 deposited upon the expiration of the due diligence period (July 14, 2025). Following expiration of the due diligence period, the full $2,925,000 becomes non-refundable (subject to limited exceptions for seller's default or failure of title conditions), and IHDC's obligation to close on the scheduled closing date of September 15, 2025 becomes firm.

Our preliminary review of the Stonebridge PSA indicates that the agreement does not contain a zoning contingency or a condition precedent requiring ZMOD approval (or any other governmental approval) prior to closing. The closing conditions in the Stonebridge PSA are limited to customary title and survey matters, accuracy of seller's representations and warranties, and delivery of the deed and other closing documents. The absence of a zoning contingency reflects the negotiated position of the parties at the time of execution: Blackthorn was unwilling to accept a closing contingency tied to a governmental approval that was outside the seller's control and that could delay closing indefinitely.

If no zoning contingency exists, IHDC is obligated to close on September 15, 2025 regardless of the status of the ZMOD application. Failure to close on the scheduled date would constitute a default under the Stonebridge PSA, entitling Blackthorn to retain the earnest money deposit of $2,925,000 as liquidated damages (per Article 12 of the PSA) and, in certain circumstances, to pursue specific performance or additional remedies. We note that the liquidated damages provision in the Stonebridge PSA limits the seller's remedy to retention of the earnest money deposit in the event of buyer's default, which provides some contractual certainty regarding the maximum downside exposure.

As noted above, the Stonebridge PSA will be assigned from IHDC to Stonebridge Campus Holdings LLC (the single-purpose borrower entity) prior to closing, in accordance with the assignment provisions of the agreement. This assignment does not affect the closing obligation or the closing timeline; the assignee steps into the buyer's shoes and assumes all obligations under the PSA, including the obligation to close on September 15, 2025.

2. Meridian PSA (Meridian Acres LLC)

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

The earnest money deposit under the Meridian PSA is $970,000, deposited in a single installment at execution. Following expiration of the due diligence period on July 7, 2025, the earnest money becomes non-refundable (subject to limited exceptions), and IHDC's obligation to close on September 15, 2025 becomes firm.

As with the Stonebridge PSA, our preliminary review indicates that the Meridian PSA does not contain a zoning contingency or condition precedent requiring ZMOD approval prior to closing. The same analysis applies: IHDC is obligated to close on the scheduled date regardless of the ZMOD status, and failure to close would result in forfeiture of the $970,000 earnest money deposit as liquidated damages.

It is worth noting that the Meridian Parcel is particularly important to the Project because it is the intended site of the substation easement in favor of Vantage Power Cooperative ("VPC"), which will construct a dedicated electrical substation on the Meridian Parcel to serve the campus. The Meridian Parcel also provides additional building pad area and utility routing corridors. If the ZMOD is not approved, the utility of the Meridian Parcel for its intended purpose is significantly diminished, as the substation easement and utility infrastructure would serve no purpose without the data center campus.

B. Risk of Closing Without ZMOD Approval

If IHDC proceeds to close on both parcels on September 15, 2025 without ZMOD approval in hand, the following risks arise:

Entitlement Denial Risk. If the ZMOD is subsequently denied by the Board of Supervisors, IHDC will hold 81.4 acres of PD-IP zoned land purchased for an aggregate price of $77,900,000 that cannot be used for the intended data center campus. IHDC's only options would be to (a) re-apply for the ZMOD (which could take an additional six to twelve months and carries no guarantee of success), (b) pursue an alternative use for the property that is permitted under PD-IP zoning (such as industrial or office development), or (c) sell the property to a third party.

Valuation Impairment. The land was acquired at prices reflecting its anticipated entitlement for data center use — approximately $943,548 per acre for the Stonebridge Parcel and $1,000,000 per acre for the Meridian Parcel. These per-acre prices are consistent with the market for entitled or near-entitled data center land in the Loudoun County corridor. However, without data center entitlements, the property's market value under its PD-IP zoning designation would be significantly lower. Industrial and office land in the corridor is trading at substantially lower per-acre prices, and the gap between the acquisition price and the as-is residual value could represent tens of millions of dollars of impairment. A precise quantification of this residual value risk should be obtained from Greystone Appraisal Partners (Janet Choi, MAI) as part of the appraisal process.

Equity Capital at Risk. Equity capital of up to $77,900,000 (plus transaction closing costs, including transfer taxes, title insurance premiums, survey costs, and legal fees, estimated at approximately $1,500,000 in the aggregate) would be deployed prior to obtaining certainty regarding the Project's entitlement status. This represents approximately 37% of Ridgeline Fund IV's total equity commitment of $210,000,000 to the Project.

C. Mitigation Strategies for Land Closing

We have identified four potential mitigation strategies to address the risk of closing the land acquisitions prior to ZMOD approval. Each strategy is discussed below, together with an assessment of its feasibility and likely reception by the sellers.

1. PSA Amendment — Zoning Contingency Extension

The preferred mitigation strategy is to negotiate amendments to both the Stonebridge PSA and the Meridian PSA that add a closing condition precedent requiring ZMOD approval (or, at a minimum, a favorable Planning Commission recommendation) before the buyer's closing obligation matures.

Under this approach, the closing date would be extended from September 15, 2025 to a date that is thirty (30) days following the date on which the ZMOD is approved by the Board of Supervisors, subject to an outside date (i.e., a "drop-dead" date) no later than January 31, 2026. If the ZMOD is not approved by the outside date, either party would have the right to terminate the PSA, with the buyer receiving a refund of the earnest money deposit (or, depending on the negotiation, with the seller retaining a portion of the deposit as consideration for the extension).

We anticipate that the sellers — particularly Blackthorn Realty Group, Inc. — may resist this amendment. Blackthorn negotiated the September 15, 2025 closing date in reliance on receiving its purchase price by that date, and extending the closing to an uncertain future date tied to a governmental approval that is outside the seller's control may not be acceptable. To incentivize the sellers to agree to the extension, IHDC may need to offer one or more of the following concessions:

• Additional earnest money. An increase in the non-refundable earnest money deposit, in an amount sufficient to compensate the seller for the risk and opportunity cost of the extended closing period. For the Stonebridge PSA, an additional deposit of $1,000,000 to $2,000,000 may be necessary. For the Meridian PSA, an additional deposit of $500,000 may be appropriate.

• Non-refundable deposit. Conversion of a portion or all of the existing earnest money deposit to a non-refundable deposit (i.e., a "day one hard" deposit), with the non-refundable amount credited against the purchase price at closing.

• Per diem extension fee. A daily or monthly extension fee payable to the seller during the period between the original closing date and the actual closing date, to compensate the seller for the carrying costs and opportunity cost of holding the property off the market during the extension period.

We note that a draft First Amendment to the Stonebridge PSA has already been prepared as a contingency document. This draft should be reviewed and finalized, and a corresponding First Amendment to the Meridian PSA should be prepared. The PSA amendments should be presented to the sellers' respective counsel — Harrison Poole (Whitfield, Poole & Stratton LLP) for Blackthorn and Fiona Dunleavy (Dunleavy & Dunmore Benefits Consulting, PLLC) for Meridian Acres — as promptly as practicable, and ideally before the expiration of the due diligence periods on July 7 and July 14, 2025. Negotiating leverage is greatest during the due diligence period, when IHDC retains the right to terminate and receive a full refund of the earnest money.

2. Conditional Closing

An alternative approach would be for IHDC to close on September 15, 2025 as scheduled but negotiate a contractual right to unwind the transaction (a "rescission right") if the ZMOD is denied within a specified period following closing — for example, within 120 days of closing.

This approach has significant drawbacks and is unlikely to be acceptable to the sellers. From the sellers' perspective, a rescission right creates uncertainty regarding the permanence of the closing and the sellers' right to retain the purchase price. From IHDC's perspective, a post-closing rescission right creates title complications, including the need to reverse the conveyance, cancel the title insurance policy, and unwind any encumbrances placed on the property after closing (including, potentially, the construction loan deed of trust). We do not recommend this approach except as a last resort.

3. Staged Closing

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

However, the Meridian Parcel is critical to the Project for two reasons. First, the Meridian Parcel is the intended location of the substation easement in favor of VPC, which will construct a dedicated 120 MVA electrical substation on the Meridian Parcel to serve the campus. Without the Meridian Parcel in hand, the substation easement cannot be granted, and VPC cannot commence substation construction. The substation has a target energization date of June 1, 2027, and the substation construction timeline is approximately eighteen months; accordingly, any delay in granting the substation easement could jeopardize the energization date and, in turn, the overall project delivery schedule.

Second, the Meridian Parcel provides additional building pad area and utility routing corridors that are incorporated into the concept development plan submitted as part of the ZMOD application. If the Meridian Parcel is not acquired at the time of the ZMOD hearing, the Board of Supervisors may question the applicant's ability to deliver the project as depicted in the concept development plan, which could complicate the approval process.

For these reasons, a staged closing approach may be feasible from a risk management perspective but carries its own set of timing and logistical complications. We recommend discussing this option with Thomas Ashcroft (Ashcroft & Wynn) and Alan Mercer (Cornerstone Land Use Consulting) to determine whether the ZMOD application can be structured to accommodate a deferred acquisition of the Meridian Parcel.

4. Accept Risk and Close as Scheduled

Finally, IHDC may determine that the risk of ZMOD denial is sufficiently low to justify proceeding with the land closings on September 15, 2025 as scheduled, without any contractual modifications.

This determination would be based on the following factors:

• Location in the established data center corridor. The Project site is located within Loudoun County's well-known data center corridor, which is home to the highest concentration of data center facilities in the world. The County has a long track record of approving ZMOD applications for data center use in this corridor, and the local political and economic environment is generally supportive of data center development.

• Assessment of local counsel and land use consultant. Thomas Ashcroft (Ashcroft & Wynn) and Alan Mercer (Cornerstone Land Use Consulting) have assessed the ZMOD application as well-positioned for approval, based on the site's location, the quality of the application materials, and the consistency of the proposed use with the County's Comprehensive Plan and land use policies.

• Sufficient equity capital. Ridgeline Fund IV's equity commitment of $210,000,000 to the Project provides sufficient capital to fund the land closings from equity without reliance on the construction loan. Even if the construction loan closing is delayed, IHDC has the financial capacity to acquire the land parcels and carry the investment until the construction loan closes.

If IHDC elects to accept the risk and close as scheduled, this decision should be made at the appropriate level of authority within IHDC and Ridgeline. We recommend that the decision be discussed with Marcus Thorne (CEO, IHDC), Priya Dasgupta (CFO, IHDC), and Julian Hargrove (Managing Partner, Ridgeline Capital Management LLC), and that the decision be documented in a written direction from the client.

V. Impact on Construction Loan Closing (October 15, 2025)

A. Construction Loan Overview

The construction financing for the Project is being structured as a $390,000,000 senior secured construction loan facility (the "Construction Loan"). The Construction Loan represents approximately 65% of the total project cost of $600,000,000, with the remaining 35% ($210,000,000) funded from Ridgeline Fund IV equity. The key terms of the Construction Loan, as currently contemplated based on the term sheet discussions with Summit National Bank, N.A. ("Summit"), are as follows:

The Construction Loan will be secured by a first-priority deed of trust on both the Stonebridge Parcel and the Meridian Parcel, together with collateral assignments of all project contracts (including the EPC contract, the LLSA, and any leases or pre-lease agreements), a pledge of the equity interests in Stonebridge Campus Holdings LLC, and customary UCC filings on personal property and fixtures.

B. Conditions Precedent to Construction Loan Closing

Standard conditions precedent for a construction loan of this nature and magnitude will likely include, at a minimum, the following:

(a) Governmental Approvals. Receipt of all material governmental approvals required for the construction and operation of the Project, including the ZMOD approval, building permits (to the extent issuable at the time of loan closing), and any other discretionary approvals required by Loudoun County or state agencies. The ZMOD approval is the most critical governmental approval condition and is discussed in detail in Section V.C below.

(b) Title Insurance. Satisfactory title insurance commitments and title policies issued by Sovereign Title Insurance Company through Fidelitas Title & Escrow, Inc. (as the issuing agent), insuring the lender's deed of trust as a first-priority lien on the Project real property. The lender's title policy will have a coverage amount of $390,000,000 and will include all standard endorsements required by the lender, including ALTA 3.1 (zoning), ALTA 9 (comprehensive), ALTA 17 (access), and other customary endorsements. The zoning endorsement is of particular relevance here: the title insurer may be unwilling to issue a zoning endorsement confirming that the property is zoned for data center use until the ZMOD is approved.

(c) Environmental Reports. Satisfactory Phase I and Phase II Environmental Site Assessments from Pendleton Environmental Associates, Inc., confirming that the property is free of recognized environmental conditions ("RECs") or that any identified RECs have been adequately addressed or mitigated. We understand that the Phase I ESAs have been completed for both parcels and that a limited Phase II ESA is underway on the Stonebridge Parcel to investigate an area of potential concern identified in the Phase I report.

(d) EPC Contract. An executed engineering, procurement, and construction ("EPC") contract with Titan-McAllister Construction Group, LLC ("TMCG"), with a guaranteed maximum price ("GMP") of $412,000,000 and other terms satisfactory to the lender. The EPC contract is currently targeted for execution on October 20, 2025 — five days after the construction loan closing target — but the lender will likely require that the EPC contract be in final, execution-ready form and approved by the lender's counsel prior to the loan closing, even if formal execution is scheduled for a subsequent date.

(e) LLSA. An executed Large Load Service Agreement with Vantage Power Cooperative ("VPC"), providing for a contracted electrical demand of 120 MVA for a ten-year term. The VPC Service Application Number is LSA-2025-0091. The LLSA requires a line extension contribution of $18,500,000 from IHDC and provides for VPC to construct a dedicated substation on the Meridian Parcel.

(f) Appraisal. An "as completed" and "as stabilized" appraisal from Greystone Appraisal Partners, LLC (Janet Choi, MAI), reflecting a value that supports the loan-to-cost ("LTC") ratio covenant of no greater than 65%. The appraisal methodology is a critical consideration in this analysis, as discussed further in Section V.C below.

(g) Minimum Equity Contribution. A minimum equity contribution of $52,500,000 (representing 25% of the total equity commitment of $210,000,000) must be funded by the borrower before the first draw under the Construction Loan. This "equity first" requirement ensures that the sponsor has meaningful capital at risk before lender funds are disbursed.

(h) Change of Control. Representations and covenants confirming that Ridgeline Capital Partners Fund IV, LP holds at least 51% of the equity interests in both the borrower (Stonebridge Campus Holdings LLC) and the guarantor (IHDC), and that no change of control has occurred without the prior written consent of the Administrative Agent.

(i) Insurance. Satisfactory insurance coverage, including builder's risk insurance in the amount of $412,000,000 (matching the EPC GMP) through Great Basin Surety & Insurance Corp., with a $250,000 deductible, and commercial general liability, excess/umbrella, and other coverage lines as required by the loan agreement.

C. ZMOD Approval as a Condition Precedent — Analysis

The ZMOD approval is almost certainly a condition precedent to the Construction Loan closing. This is a fundamental point: Summit National Bank and its co-lenders will not fund a $390,000,000 construction loan facility for a project that lacks the zoning entitlements necessary to construct and operate data centers on the site. Without the ZMOD approval:

• The borrower cannot obtain building permits or commence construction;

• The lender cannot obtain a zoning endorsement on its title insurance policy confirming that the property is zoned for the intended use;

• The appraiser cannot value the property on an "as completed" or "as stabilized" basis for data center use, which is the valuation premise supporting the LTC covenant; and

• The lender has no assurance that the collateral — the real property — will be developed for the highest and best use that supports the loan amount.

We expect that the ZMOD approval condition will appear in the commitment letter as a condition precedent to closing and will be carried forward into the loan agreement as a condition precedent to the initial draw. There is no realistic basis on which IHDC can request that the lenders waive the ZMOD approval condition, and we would not recommend making such a request.

The critical question, therefore, is not whether the ZMOD approval is a condition precedent (it is), but rather how the loan documents can be structured to accommodate the possibility that the ZMOD approval may not be obtained by the October 15, 2025 target closing date. This is addressed in Section V.E below.

D. Consequences of Delayed Construction Loan Closing

If the ZMOD approval is delayed beyond October 2025, the construction loan closing will be correspondingly delayed. This delay produces the following cascading consequences:

1. Equity Exposure on Land Costs. The delay in the construction loan closing means that IHDC bears the full cost of the land acquisition ($77,900,000) from equity capital until the loan closes and reimburses the land costs through the initial draw. If the delay extends for two to three months (i.e., the construction loan does not close until January or February 2026), IHDC's equity will be deployed in the land for an extended period without the benefit of leverage.

2. Cascade to EPC and NTP. The EPC contract execution with Titan-McAllister is targeted for October 20, 2025, five days after the construction loan closing target. The EPC contract is expected to be a condition precedent to the construction loan closing, and the construction loan closing is a practical prerequisite to EPC execution (since IHDC will need the committed financing in place before committing to a $412,000,000 construction contract). Accordingly, a delay in the construction loan closing will delay EPC execution, which in turn delays the Notice to Proceed (target: November 1, 2025) and ultimately delays the substantial completion dates for all four buildings. Building A substantial completion is currently targeted for August 1, 2027, and Buildings B through D are targeted for November 1, 2027.

3. VPC Substation Timeline. A delay in the construction loan closing may also delay the execution of the LLSA with Vantage Power Cooperative and the commencement of VPC's substation construction on the Meridian Parcel. The substation has a target energization date of June 1, 2027, and the substation construction period is approximately eighteen months. Any delay in commencing substation construction could push the energization date beyond June 2027, which would directly impact the Project's ability to achieve power-on for the data center buildings.

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

5. Carrying Costs. During any delay period, IHDC will incur carrying costs on the unimproved land, including but not limited to: (a) interest on any bridge financing obtained to fund the land acquisition; (b) property taxes on the Stonebridge Parcel and the Meridian Parcel; (c) insurance costs for the unimproved parcels; and (d) consultant retainers and professional fees for the project team during the delay period. These carrying costs will erode the project's contingency and reserves budget, which is currently established at $34,900,000.

6. Arrangement Fee. The arrangement fee for the Construction Loan is $3,900,000 (1.00% of the $390,000,000 facility). It must be confirmed whether this fee is payable at the time of the commitment letter execution or at the loan closing. If payable at commitment, IHDC will have deployed $3,900,000 in fees before the loan closes. In addition, it should be confirmed whether the commitment letter includes a commitment expiration date (i.e., a date after which the lender's commitment terminates if the loan has not closed). If the commitment expires before the ZMOD is approved, IHDC may need to renegotiate the commitment or obtain a new commitment, potentially at less favorable terms.

E. Mitigation Strategies for Construction Loan Closing

1. Flexible Closing Date in Commitment Letter

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

This approach provides IHDC with the flexibility to close the Construction Loan promptly after ZMOD approval is obtained, even if the approval is delayed beyond October 2025, while giving the lenders certainty that the commitment will terminate on the outside date if the ZMOD has not been approved by that time.

The commitment letter should also include a provision tolling the commitment expiration date in the event that the ZMOD application is pending before the Board of Supervisors on the outside date (i.e., the application has been scheduled for a hearing but has not yet been acted upon). This tolling provision would prevent the commitment from expiring due to Board scheduling delays that are outside IHDC's control.

We recommend discussing this approach with Karen Ellsworth (Summit National Bank, N.A.) and Victor Redmond (Redmond & Calloway LLP) at the earliest opportunity, ideally in connection with the negotiation of the commitment letter in June and July 2025.

2. Bifurcated Closing Structure

An alternative approach is to propose a two-phase closing structure for the Construction Loan:

(i) Phase I Closing (Land Financing). An initial closing securing the deed of trust on the Stonebridge Parcel and the Meridian Parcel and funding the reimbursement of IHDC's equity investment in the land acquisition ($77,900,000). The Phase I closing would be conditioned only on title, environmental, and survey satisfaction — not on ZMOD approval. This would allow IHDC to obtain the benefit of leverage on the land investment and reduce its equity exposure during the pre-ZMOD period.

(ii) Phase II Closing (Construction Financing). A second closing releasing construction draws under the Construction Loan, conditioned on ZMOD approval, EPC contract execution, LLSA execution, and satisfaction of all other conditions precedent. The Phase II closing would occur promptly after ZMOD approval is obtained.

This approach allows the lenders to obtain their collateral position (the deed of trust on the land) earlier in the process and provides IHDC with a mechanism to reimburse its equity deployed for land costs before the ZMOD is approved. However, we assess that the lenders may resist this structure for several reasons.

First, the lenders may be unwilling to fund any draws — even for land reimbursement — without certainty that the project is entitled for data center use. The fundamental underwriting premise of the Construction Loan is that the property will be developed as a data center campus, and the loan amount is sized based on the total project cost of a data center development, not the value of unentitled PD-IP industrial land. Without the ZMOD approval, the lenders' collateral is raw land zoned for general industrial use, which would support a significantly lower loan amount.

Second, the appraisal supporting the LTC covenant (loan-to-cost ratio not exceeding 65%) is almost certainly premised on the property being entitled for data center use. An "as-is" appraisal of PD-IP zoned land would likely yield a value substantially below the loan amount, potentially putting the borrower in violation of the LTC covenant from the date of the Phase I closing.

For these reasons, we believe the bifurcated closing structure is worth exploring with the lenders but is unlikely to be accepted in its full form. A modified version — in which the lenders agree to close the entire loan and fund a single land reimbursement draw upon satisfaction of title, environmental, and survey conditions, with construction draws held in abeyance pending ZMOD approval — may be more palatable, but still faces the appraisal and LTC covenant concerns noted above.

3. Bridge Financing or Sponsor Equity Bridge

If the Construction Loan closing is delayed beyond October 2025, Ridgeline Fund IV may need to fund the land closings entirely from its equity commitment. The total equity commitment for the Project is $210,000,000, and the total land cost is $77,900,000, which represents approximately 37% of the equity commitment. Ridgeline Fund IV is a $3.8 billion fund, and the $210,000,000 commitment to the Stonebridge Project represents approximately 5.5% of total fund commitments. We believe the fund has sufficient committed but uncalled capital to fund the land closings without requiring a separate bridge facility, though this should be confirmed directly with Julian Hargrove and the fund's finance team.

As an alternative to funding entirely from equity, IHDC could consider obtaining a separate short-term bridge loan facility secured by the land parcels, to be retired upon the Construction Loan closing. This bridge facility would be a standalone credit facility, likely from a different lender or potentially from Summit itself, with a term of six to twelve months and an interest rate likely in the range of Term SOFR + 400–500 bps (reflecting the higher risk of an unentitled land loan). This bridge facility would introduce additional cost and complexity, including origination fees, legal fees for a separate loan closing, and the potential for a conflict or intercreditor issue with the Construction Loan lenders. We do not recommend this approach unless equity liquidity constraints make it necessary.

4. Coordinate with EPC Contractor

If the Construction Loan closing is delayed, the EPC contract execution and Notice to Proceed will also be delayed. IHDC should coordinate with Titan-McAllister Construction Group, LLC (Michelle Tran, project executive) to assess the implications of a delayed NTP.

Key questions for TMCG include:

• Does the GMP of $412,000,000 have a validity period? If so, what is the expiration date, and what happens if the NTP is not issued before the expiration of the validity period?

• If the NTP is delayed beyond November 1, 2025, does the GMP automatically escalate, or does TMCG have the right to re-price the GMP to reflect current material and labor costs?

• Is TMCG willing to hold its subcontractor pricing commitments during a delay period, and if so, for how long?

• Does the EPC Agreement include a reasonable validity period for the GMP and an NTP issuance outside date? If the NTP is not issued by the outside date, does TMCG have the right to terminate the EPC Agreement?

These questions should be addressed in the EPC contract negotiation (which is ongoing) and should be coordinated with the Construction Loan commitment letter negotiation to ensure consistency between the two sets of documents.

VI. Interrelationship with EPC and Power Agreements

A. EPC Agreement — Change of Control and Timing

The EPC Agreement with Titan-McAllister Construction Group, LLC is being negotiated on a guaranteed maximum price basis, with a GMP of $412,000,000. The EPC Agreement includes standard change of control provisions, which are relevant to the overall project structure:

• TMCG Consent Right. TMCG has a right to consent (not to be unreasonably withheld, conditioned, or delayed) to any change of control of the project owner entity (i.e., Stonebridge Campus Holdings LLC). This consent right is triggered by, among other things, a transfer of a majority of the equity interests in the project owner entity or a change in the managing member or managing partner of the project owner entity. Since Stonebridge Campus Holdings LLC will be wholly owned by IHDC, and IHDC is controlled by Ridgeline Fund IV, this consent right is not expected to be implicated by the current ownership structure. However, any future restructuring of the ownership chain — for example, a co-investor or joint venture partner at the project level — would require TMCG's consent.

• Owner Termination Right. The owner (Stonebridge Campus Holdings LLC) has a termination right upon a change of control of TMCG, which provides the owner with the ability to terminate the EPC Agreement if TMCG is acquired by or merged with another entity. This is a protective provision that ensures IHDC is not required to continue performance with a contractor that has undergone a material change in ownership, management, or financial condition.

The EPC contract execution is targeted for October 20, 2025 — five days after the Construction Loan closing target. If the Construction Loan closing is delayed, the EPC contract execution may need to be deferred as well, since IHDC will need committed financing in place before entering into a $412,000,000 construction contract. However, it is worth evaluating whether the EPC contract can be executed independently of the Construction Loan closing — i.e., whether IHDC has sufficient financial capacity (from its equity commitment) to support the EPC contract even before the Construction Loan closes.

Additionally, the Construction Loan collateral package includes a collateral assignment of the EPC contract, and the lender will require that the EPC contract be in a form approved by lender's counsel (Victor Redmond, Redmond & Calloway LLP) prior to the loan closing. This creates a chicken-and-egg dynamic: the lender wants an executed EPC contract as a condition to closing, and IHDC may want to defer EPC execution until the financing is in place. The typical resolution is for the EPC contract to be in final, execution-ready form at the time of the loan closing, with formal execution occurring concurrently with or immediately following the loan closing.

B. Large Load Service Agreement — Vantage Power Cooperative

The Large Load Service Agreement ("LLSA") with Vantage Power Cooperative ("VPC") is a critical infrastructure agreement for the Project. The LLSA provides for a contracted electrical demand of 120 MVA for a ten-year term, commencing on the substation energization date. The VPC Service Application Number is LSA-2025-0091.

The LLSA requires a line extension contribution of $18,500,000 from IHDC, payable in installments during the construction of the dedicated substation that VPC will build on the Meridian Parcel. The substation easement — a significant real property interest — must be granted by the owner of the Meridian Parcel in favor of VPC. This means that the Meridian Parcel closing must occur before the substation easement can be granted and before VPC can commence substation construction.

The substation has a target energization date of June 1, 2027. Based on VPC's construction timeline, the substation construction period is approximately eighteen months, which means that substation construction would need to commence no later than approximately December 2025 to achieve the June 2027 energization target. If the Meridian Parcel closing is delayed, or if the ZMOD approval is delayed (which could in turn delay the LLSA execution and the substation easement grant), the commencement of substation construction could be pushed beyond December 2025, jeopardizing the June 2027 energization date.

The implications of a delayed energization date are severe. The data center buildings cannot operate without utility power, and the entire construction schedule is premised on the substation being energized by June 1, 2027 — approximately two months before the Building A substantial completion target of August 1, 2027. If the substation energization is delayed, the buildings may be substantially complete but unable to receive power, resulting in a stranded asset until the substation is brought online.

We recommend that IHDC coordinate directly with VPC to understand the flexibility (if any) in the substation construction and energization timeline, and to determine whether VPC can begin preliminary engineering and procurement activities in advance of the LLSA execution and the substation easement grant, in order to preserve the June 2027 energization target.

VII. Recommended Course of Action

Based on the analysis set forth in this memorandum, we recommend the following course of action, organized into immediate steps, secondary steps, and a fallback position.

A. Immediate Steps

1. Obtain Realistic ZMOD Timeline Assessment. Engage Thomas Ashcroft (Ashcroft & Wynn, P.C.) and Alan Mercer (Cornerstone Land Use Consulting, LLC) to provide a written assessment of the realistic ZMOD approval timeline, including whether an October 2025 Board of Supervisors hearing remains achievable or whether a November 2025 or December 2025 hearing is more likely based on current Board of Supervisors hearing schedules, the status of the pre-application conference, and any preliminary indications from County staff regarding the likely pace of the application review. This assessment should be obtained by no later than June 15, 2025, in order to inform the due diligence period decisions and the commitment letter negotiations.

2. Review PSAs and Prepare Amendments. Review the Stonebridge PSA and the Meridian PSA in detail to confirm the precise closing conditions and whether any zoning-related contingency or condition precedent currently exists in either agreement. If no zoning contingency exists (as we preliminarily believe), prepare draft amendments to both PSAs adding a closing condition precedent tied to ZMOD approval and/or extending the closing date from September 15, 2025 to a date that is thirty (30) days following ZMOD approval, with an outside date of no later than January 31, 2026. These draft amendments should be circulated to the sellers' respective counsel for discussion before the expiration of the due diligence periods.

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

PRIVILEGED & CONFIDENTIAL — ATTORNEY WORK PRODUCT
CALDERWOOD & HARKNESS LLP 1900 K Street NW, Suite 800 Washington, DC 20006
MEMORANDUM
Matter No.: 1043-00002
May 19, 2025
TO: Douglas Fairchild, Responsible Partner, Real Estate
FROM: Cynthia Ho, Lead Associate, Real Estate
RE: Stonebridge Data Center Campus — Conditional Zoning Approval: Impact on Land Closing and Construction Financing Timeline
CLIENT: Ironhaven Data Centers LLC
CC: Angela Fontaine (Billing Partner); Grace Nakamura (Working Associate); Leonard Castellano (EVP, Development, IHDC); Priya Dasgupta (CFO, IHDC)
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I. Executive Summary
The purpose of this memorandum is to evaluate the timing interrelationship among three critical-path events in the development of the Stonebridge Data Center Campus located in unincorporated Loudoun County, Virginia:
(1) the Zoning Map Amendment / Zoning Modification ("ZMOD") approval by the Loudoun County Board of Supervisors, currently targeted for the October 2025 hearing cycle;
(2) the land closings for the Stonebridge Parcel (62.0 acres) and the Meridian Parcel (19.4 acres), both currently targeted for September 15, 2025; and
(3) the construction loan closing with Summit National Bank, N.A., as Administrative Agent, together with Cascade Commercial Lending Corp. and Harborview Trust Company as co-lenders, under a $390,000,000 senior secured construction loan facility, currently targeted for October 15, 2025.
The core issue presented by the current project sequencing is that the land closings are targeted to occur approximately four to six weeks before the anticipated ZMOD approval by the Board of Supervisors. This means that Ironhaven Data Centers LLC ("IHDC") — or its wholly owned single-purpose borrower entity, Stonebridge Campus Holdings LLC (to be formed) — would take title to 81.4 acres of land currently zoned PD-IP (Planned Development – Industrial Park) without yet having obtained the zoning entitlements necessary to construct and operate a data center campus on the site. The aggregate land acquisition cost is $77,900,000, and this capital would be deployed from equity prior to certainty regarding the project's entitlement status.
Compounding this risk, the construction loan closing is scheduled to occur contemporaneously with or shortly after the anticipated ZMOD approval. The construction loan proceeds are intended, in part, to reimburse IHDC's equity investment in the land acquisition. If the Board of Supervisors hearing is delayed beyond October 2025, or if the ZMOD application is denied or approved subject to conditions requiring further negotiation, the construction loan closing will likewise be delayed. This creates cascading timing risks that affect not only the financing but also the EPC contract execution with Titan-McAllister Construction Group, LLC, the Notice to Proceed target, and the overall project delivery schedule.
This memorandum identifies and analyzes these risks in detail, examines the relevant contractual mechanisms in the Purchase and Sale Agreements ("PSAs") and the anticipated construction loan documents, and recommends a series of mitigation strategies for discussion with IHDC management and its equity sponsor, Ridgeline Capital Partners Fund IV, LP.
II. Background — Project Timeline and Sequencing
A. The Stonebridge Data Center Campus
The Stonebridge Data Center Campus (the "Project") is a planned hyperscale data center development with a total project budget of approximately $600,000,000. The campus is designed to deliver 96 MW of critical IT load across four purpose-built data center buildings, designated Buildings A through D, each rated at 24 MW of critical IT load. The site is located at the intersection of Belmont Ridge Road and Stonebridge Boulevard in unincorporated Loudoun County, Virginia 20148, within what is commonly referred to as Loudoun County's established "Data Center Alley" corridor.
The total campus acreage is 81.4 acres, assembled from two adjacent parcels:
• Stonebridge Parcel: 62.0 acres, to be acquired from Blackthorn Realty Group, Inc. pursuant to a Purchase and Sale Agreement dated April 15, 2025 (the "Stonebridge PSA"), for a purchase price of $58,500,000 (approximately $943,548 per acre).
• Meridian Parcel: 19.4 acres, to be acquired from Meridian Acres LLC (managed by Theodore Ashford) pursuant to a Purchase and Sale Agreement dated April 22, 2025 (the "Meridian PSA"), for a purchase price of $19,400,000 (approximately $1,000,000 per acre).
The developer of the Project is Ironhaven Data Centers LLC ("IHDC"), a Delaware limited liability company with its principal office at 44680 Prentice Drive, Suite 200, Ashburn, Virginia 20147. IHDC is a portfolio company of Ridgeline Capital Partners Fund IV, LP ("Ridgeline Fund IV"), a $3.8 billion infrastructure-focused private equity fund managed by Ridgeline Capital Management LLC. Julian Hargrove serves as Managing Partner of Ridgeline Capital Management LLC. IHDC's senior management team includes Marcus Thorne (Chief Executive Officer), Leonard Castellano (Executive Vice President, Development), and Priya Dasgupta (Chief Financial Officer).
For purposes of the construction financing, a single-purpose borrower entity — Stonebridge Campus Holdings LLC — will be formed as a Virginia limited liability company and will be wholly owned by IHDC. Both PSAs will be assigned to Stonebridge Campus Holdings LLC prior to closing, and Stonebridge Campus Holdings LLC will serve as the borrower under the construction loan facility. IHDC will serve as the guarantor, providing a completion guaranty and a carry guaranty in favor of the lender syndicate.
B. Key Milestones and Dates
The following table summarizes the key project milestones and target dates as currently contemplated:
The due diligence periods under the Stonebridge and Meridian PSAs expire on July 14, 2025 and July 7, 2025, respectively. Upon expiration of these periods (assuming IHDC does not terminate), the earnest money deposits become non-refundable under the terms of the respective agreements, and IHDC's obligation to close on the scheduled closing date becomes binding, subject only to satisfaction of the closing conditions set forth in the PSAs. This is a significant inflection point: once the due diligence periods expire, IHDC's earnest money is at risk, and the firm is effectively committed to the land acquisition regardless of the status of the ZMOD application.
C. The Sequencing Gap
The fundamental timing challenge is as follows: the land closings on September 15, 2025 are designed to precede the ZMOD approval by the Board of Supervisors in October 2025 by approximately four to six weeks. This sequencing was adopted because the sellers — Blackthorn Realty Group, Inc. and Meridian Acres LLC — required closing certainty within the timeframes set forth in the PSAs, and IHDC determined that it could not reasonably negotiate PSA closing dates that extended into the fourth quarter of 2025 without risking the loss of the parcels to competing buyers in the highly competitive Loudoun County data center land market.
However, the Board of Supervisors hearing date for the ZMOD application may not be calendared until the application has proceeded through the full review process, which includes staff completeness review, referral agency comments, Planning Commission recommendation, and public hearing scheduling. This process typically takes four to five months from the date of application filing, but delays of one to three months beyond that baseline are common, particularly for data center projects that generate community interest or concern.
The construction loan closing on October 15, 2025 is designed to follow the ZMOD approval, but the loan closing is conditioned on — among other things — the ZMOD approval being in hand. If the Board of Supervisors hearing is delayed beyond October 2025, or if the ZMOD is approved subject to conditions that require further negotiation or modification, the construction loan closing will be correspondingly delayed.
This creates what we refer to in this memorandum as the "gap risk": IHDC closes on $77,900,000 of land from equity capital before the ZMOD is approved, but the construction loan — which is intended to reimburse the land costs and fund construction — may not close if the ZMOD approval is delayed or denied. During the gap period, IHDC bears the full economic exposure on the land acquisition without the benefit of debt financing, and without certainty that the project will proceed as planned.
The following sections of this memorandum analyze this gap risk in detail and recommend strategies to mitigate it.
III. Zoning Modification (ZMOD) Process and Timeline Analysis
A. Current Zoning and Required Entitlement
The Stonebridge Parcel and the Meridian Parcel are currently zoned PD-IP (Planned Development – Industrial Park) under the Loudoun County Zoning Ordinance. The PD-IP zoning district permits a range of industrial, office, and commercial uses, but data center use is not a by-right use within the PD-IP district. Rather, data center use in the PD-IP district requires a Zoning Modification, commonly referred to as a "ZMOD," which must be approved by the Loudoun County Board of Supervisors following a public hearing process.
The ZMOD is the single most critical entitlement required for the Project. Without ZMOD approval, IHDC cannot construct, operate, or lease data center facilities on the site. There is no alternative zoning pathway — such as a special exception or variance — that would permit data center use on this property. Accordingly, ZMOD approval is a binary gate: if approved, the Project proceeds; if denied, the Project cannot proceed on this site under its current zoning designation, and IHDC would need to either re-apply (potentially with a modified application or a different zoning approach) or abandon the site entirely.
Local zoning counsel for the Project is Ashcroft & Wynn, P.C. (Thomas Ashcroft, principal), a well-established Loudoun County land use firm with extensive experience in data center entitlement matters. The land use consultant supporting the ZMOD application is Cornerstone Land Use Consulting, LLC (Alan Mercer, principal), which has prepared the concept development plan, the proffer statement, and the supporting studies for the application.
B. ZMOD Process Steps
The ZMOD approval process in Loudoun County involves the following sequential steps, each of which must be completed before the Board of Supervisors can take action on the application:
1. Pre-Application Conference. A pre-application conference with the Loudoun County Department of Planning and Zoning was requested by letter submitted in April 2025. This conference is intended to familiarize County staff with the proposed project and to identify any threshold issues or concerns that should be addressed in the formal application. The pre-application conference is advisory only and does not bind the County to any position on the merits of the application. We understand from Ashcroft & Wynn that the pre-application conference was productive, and County staff did not identify any fatal flaws in the proposed project concept.
2. Application Filing. The formal ZMOD application is targeted for filing on May 30, 2025. The application will be filed with the Department of Planning and Zoning and is expected to be assigned Docket No. ZMOD-2025-0038. The application will include the concept development plan, the proffer statement, the traffic impact analysis, the noise impact study, the fiscal impact analysis, and all other supporting documentation required by the County's submission checklist.
3. Staff Completeness Review. Following submission, County staff will conduct a completeness review to determine whether the application contains all required materials and information. This review typically takes two to four weeks. If the application is determined to be incomplete, the applicant will be required to supplement the submission, which could add additional time to the process.
4. Referral Agency Review Period. Once the application is accepted as complete, it is referred to various County and state agencies for review and comment. Referral agencies typically include the Loudoun County Department of Transportation and Capital Infrastructure, the Loudoun County Fire and Rescue Department, the Virginia Department of Transportation (VDOT), the Loudoun Water Authority, and other relevant agencies. The referral agency review period typically spans sixty to ninety days and is often the longest single phase of the ZMOD process.
5. Staff Report Preparation. Following completion of the referral agency review, the Department of Planning and Zoning staff prepares a comprehensive staff report analyzing the application's conformance with the Comprehensive Plan, the Zoning Ordinance, and applicable County policies. The staff report includes a recommendation to the Planning Commission (typically a recommendation to approve, approve with conditions, or deny the application).
6. Planning Commission Public Hearing and Recommendation. The application is scheduled for a public hearing before the Loudoun County Planning Commission. The Planning Commission conducts the hearing, receives public comment, and issues a recommendation to the Board of Supervisors. The Planning Commission's recommendation is advisory and is not binding on the Board of Supervisors. The Planning Commission typically meets twice per month, and the scheduling of the public hearing depends on the Commission's calendar and the volume of pending applications.
7. Board of Supervisors Public Hearing and Action. Following the Planning Commission's recommendation, the application is scheduled for a public hearing before the Board of Supervisors. The Board of Supervisors conducts the hearing, receives public comment, and takes action on the application — either approving, denying, or deferring the application. The Loudoun County Board of Supervisors typically meets on the first and third Tuesdays of each month. The specific date of the hearing within the October 2025 hearing calendar will dictate the precise date on which the ZMOD is considered.
It is important to note that the Board of Supervisors retains broad discretion to defer action on a ZMOD application to a subsequent meeting cycle if the Board determines that additional information is needed, if proffer negotiations are ongoing, or if scheduling constraints prevent adequate consideration of the application at the originally scheduled hearing.
C. Proffer Negotiations
As part of the ZMOD application, IHDC will submit a proffer statement committing to certain voluntary conditions in connection with the rezoning. Proffers are a critical component of the ZMOD process in Loudoun County and are typically expected by the Board of Supervisors as a condition of approval for large-scale development projects, particularly data center projects.
The estimated proffer amount for the Project is $2,400,000, calculated at $5.00 per square foot of gross floor area based on an estimated total gross floor area of 480,000 square feet across the four data center buildings. The proffer statement, as currently drafted by Ashcroft & Wynn and Cornerstone Land Use Consulting, addresses the following categories:
• Fiscal impact mitigation: A cash contribution to the County's general fund to offset the fiscal impacts of the data center development, including increased demand for public services and infrastructure;
• Transportation improvements: Contributions toward or construction of improvements to Belmont Ridge Road and Stonebridge Boulevard, including road widening, intersection improvements, and turn lane construction, as identified in the traffic impact analysis;
• Noise mitigation: Commitments to operational noise limits at the property boundary, installation of noise barriers or screening walls, and restrictions on nighttime mechanical equipment operation in accordance with the noise impact study; and
• Visual screening and landscaping: Commitments to enhanced landscaping buffers, perimeter screening walls, and architectural treatment of the building facades visible from public rights-of-way and adjacent residential properties.
Proffer negotiations are an iterative process that typically involves multiple rounds of discussion between the applicant's counsel, the County staff, and the Board of Supervisors member representing the relevant election district. Proffer negotiations may extend the ZMOD timeline if the Board of Supervisors or the Planning Commission staff requests modifications to the proffer statement — for example, increased proffer amounts, additional transportation improvements, more stringent noise limits, or enhanced visual screening requirements. Thomas Ashcroft has advised that the current proffer statement is consistent with recent data center ZMOD approvals in the County, but that the Board of Supervisors has shown increasing interest in higher proffer amounts and more robust mitigation commitments in recent cycles, and that revisions to the proffer statement should be anticipated.
D. Risk Factors for Delay
Based on our review of the ZMOD process and discussions with local zoning counsel and the land use consultant, we have identified the following risk factors that could delay the ZMOD approval beyond the October 2025 target:
1. Community Opposition. Data center development in Loudoun County has generated increasing community concern in recent years, particularly regarding noise, traffic, visual impact, and the concentration of data center facilities in certain areas. The Project site is located in proximity to residential communities, and organized community opposition could result in requests for additional public hearings, the submission of petitions to the Board of Supervisors, or political pressure on Board members to defer action on the application.
2. Supplemental Study Requests. County staff or referral agencies may request supplemental studies beyond those included in the initial application, such as additional traffic counts, updated noise modeling, or a supplemental fiscal impact analysis. Each supplemental study request could add four to eight weeks to the review timeline.
3. Scheduling Congestion. The Board of Supervisors' hearing calendar is shared among all pending land use applications in the County. If multiple ZMOD applications or other significant land use matters are pending in the same hearing cycle, the Stonebridge application may be deferred to a subsequent meeting date to accommodate the Board's calendar.
4. Conditions Imposed by the Board. Even if the Board of Supervisors is generally supportive of the application, the Board may impose conditions requiring further negotiation of the proffer statement or modifications to the concept development plan. If such conditions are imposed at the hearing, the matter may be deferred to allow the applicant to revise the application and return for a subsequent hearing.
5. Deferral to Subsequent Meeting Cycle. The Board of Supervisors has the discretion to defer action on any application to a subsequent meeting cycle without specifying a date certain for reconsideration. This is not uncommon, particularly for large-scale projects or projects that generate significant public comment.
Based on these risk factors, our realistic assessment is as follows: if the ZMOD application is filed on May 30, 2025, a best-case approval timeline is approximately four to five months, which would place the Board of Supervisors hearing in October 2025, consistent with the current target. However, delays of one to three months beyond the best-case timeline are common in Loudoun County, which would push the ZMOD approval to November 2025, December 2025, or January 2026. We believe it is prudent to plan for a delay scenario of at least two months beyond the October 2025 target — i.e., to assume that ZMOD approval may not be obtained until December 2025 or January 2026.
IV. Impact on Land Closings (September 15, 2025)
A. PSA Provisions — Zoning Contingency Analysis
The threshold question for the land closings is whether the Stonebridge PSA and the Meridian PSA contain any zoning contingency, condition precedent, or other contractual mechanism that conditions the buyer's obligation to close on the receipt of ZMOD approval. If such a contingency exists, IHDC would have a contractual basis to defer closing until the ZMOD is approved. If no such contingency exists, IHDC is obligated to close on September 15, 2025 regardless of the status of the ZMOD application.
1. Stonebridge PSA (Blackthorn Realty Group, Inc.)
The Stonebridge PSA was executed on April 15, 2025, with Blackthorn Realty Group, Inc. as seller. Seller's counsel is Whitfield, Poole & Stratton LLP (Harrison Poole). The purchase price is $58,500,000. The agreement provides for a ninety-day due diligence period expiring on July 14, 2025. During the due diligence period, IHDC has the right to terminate the PSA for any reason and receive a refund of its earnest money deposit.
The earnest money deposit under the Stonebridge PSA totals $2,925,000, structured in two installments: $1,462,500 deposited at execution (April 15, 2025) and $1,462,500 deposited upon the expiration of the due diligence period (July 14, 2025). Following expiration of the due diligence period, the full $2,925,000 becomes non-refundable (subject to limited exceptions for seller's default or failure of title conditions), and IHDC's obligation to close on the scheduled closing date of September 15, 2025 becomes firm.
Our preliminary review of the Stonebridge PSA indicates that the agreement does not contain a zoning contingency or a condition precedent requiring ZMOD approval (or any other governmental approval) prior to closing. The closing conditions in the Stonebridge PSA are limited to customary title and survey matters, accuracy of seller's representations and warranties, and delivery of the deed and other closing documents. The absence of a zoning contingency reflects the negotiated position of the parties at the time of execution: Blackthorn was unwilling to accept a closing contingency tied to a governmental approval that was outside the seller's control and that could delay closing indefinitely.
If no zoning contingency exists, IHDC is obligated to close on September 15, 2025 regardless of the status of the ZMOD application. Failure to close on the scheduled date would constitute a default under the Stonebridge PSA, entitling Blackthorn to retain the earnest money deposit of $2,925,000 as liquidated damages (per Article 12 of the PSA) and, in certain circumstances, to pursue specific performance or additional remedies. We note that the liquidated damages provision in the Stonebridge PSA limits the seller's remedy to retention of the earnest money deposit in the event of buyer's default, which provides some contractual certainty regarding the maximum downside exposure.
As noted above, the Stonebridge PSA will be assigned from IHDC to Stonebridge Campus Holdings LLC (the single-purpose borrower entity) prior to closing, in accordance with the assignment provisions of the agreement. This assignment does not affect the closing obligation or the closing timeline; the assignee steps into the buyer's shoes and assumes all obligations under the PSA, including the obligation to close on September 15, 2025.
2. Meridian PSA (Meridian Acres LLC)
The Meridian PSA was executed on April 22, 2025, with Meridian Acres LLC (managed by Theodore Ashford) as seller. Seller's counsel is Dunleavy & Dunmore Benefits Consulting, PLLC (Fiona Dunleavy). The purchase price is $19,400,000. The agreement provides for a seventy-five-day due diligence period expiring on July 7, 2025.
The earnest money deposit under the Meridian PSA is $970,000, deposited in a single installment at execution. Following expiration of the due diligence period on July 7, 2025, the earnest money becomes non-refundable (subject to limited exceptions), and IHDC's obligation to close on September 15, 2025 becomes firm.
As with the Stonebridge PSA, our preliminary review indicates that the Meridian PSA does not contain a zoning contingency or condition precedent requiring ZMOD approval prior to closing. The same analysis applies: IHDC is obligated to close on the scheduled date regardless of the ZMOD status, and failure to close would result in forfeiture of the $970,000 earnest money deposit as liquidated damages.
It is worth noting that the Meridian Parcel is particularly important to the Project because it is the intended site of the substation easement in favor of Vantage Power Cooperative ("VPC"), which will construct a dedicated electrical substation on the Meridian Parcel to serve the campus. The Meridian Parcel also provides additional building pad area and utility routing corridors. If the ZMOD is not approved, the utility of the Meridian Parcel for its intended purpose is significantly diminished, as the substation easement and utility infrastructure would serve no purpose without the data center campus.
B. Risk of Closing Without ZMOD Approval
If IHDC proceeds to close on both parcels on September 15, 2025 without ZMOD approval in hand, the following risks arise:
Entitlement Denial Risk. If the ZMOD is subsequently denied by the Board of Supervisors, IHDC will hold 81.4 acres of PD-IP zoned land purchased for an aggregate price of $77,900,000 that cannot be used for the intended data center campus. IHDC's only options would be to (a) re-apply for the ZMOD (which could take an additional six to twelve months and carries no guarantee of success), (b) pursue an alternative use for the property that is permitted under PD-IP zoning (such as industrial or office development), or (c) sell the property to a third party.
Valuation Impairment. The land was acquired at prices reflecting its anticipated entitlement for data center use — approximately $943,548 per acre for the Stonebridge Parcel and $1,000,000 per acre for the Meridian Parcel. These per-acre prices are consistent with the market for entitled or near-entitled data center land in the Loudoun County corridor. However, without data center entitlements, the property's market value under its PD-IP zoning designation would be significantly lower. Industrial and office land in the corridor is trading at substantially lower per-acre prices, and the gap between the acquisition price and the as-is residual value could represent tens of millions of dollars of impairment. A precise quantification of this residual value risk should be obtained from Greystone Appraisal Partners (Janet Choi, MAI) as part of the appraisal process.
Equity Capital at Risk. Equity capital of up to $77,900,000 (plus transaction closing costs, including transfer taxes, title insurance premiums, survey costs, and legal fees, estimated at approximately $1,500,000 in the aggregate) would be deployed prior to obtaining certainty regarding the Project's entitlement status. This represents approximately 37% of Ridgeline Fund IV's total equity commitment of $210,000,000 to the Project.
C. Mitigation Strategies for Land Closing
We have identified four potential mitigation strategies to address the risk of closing the land acquisitions prior to ZMOD approval. Each strategy is discussed below, together with an assessment of its feasibility and likely reception by the sellers.
1. PSA Amendment — Zoning Contingency Extension
The preferred mitigation strategy is to negotiate amendments to both the Stonebridge PSA and the Meridian PSA that add a closing condition precedent requiring ZMOD approval (or, at a minimum, a favorable Planning Commission recommendation) before the buyer's closing obligation matures.
Under this approach, the closing date would be extended from September 15, 2025 to a date that is thirty (30) days following the date on which the ZMOD is approved by the Board of Supervisors, subject to an outside date (i.e., a "drop-dead" date) no later than January 31, 2026. If the ZMOD is not approved by the outside date, either party would have the right to terminate the PSA, with the buyer receiving a refund of the earnest money deposit (or, depending on the negotiation, with the seller retaining a portion of the deposit as consideration for the extension).
We anticipate that the sellers — particularly Blackthorn Realty Group, Inc. — may resist this amendment. Blackthorn negotiated the September 15, 2025 closing date in reliance on receiving its purchase price by that date, and extending the closing to an uncertain future date tied to a governmental approval that is outside the seller's control may not be acceptable. To incentivize the sellers to agree to the extension, IHDC may need to offer one or more of the following concessions:
• Additional earnest money. An increase in the non-refundable earnest money deposit, in an amount sufficient to compensate the seller for the risk and opportunity cost of the extended closing period. For the Stonebridge PSA, an additional deposit of $1,000,000 to $2,000,000 may be necessary. For the Meridian PSA, an additional deposit of $500,000 may be appropriate.
• Non-refundable deposit. Conversion of a portion or all of the existing earnest money deposit to a non-refundable deposit (i.e., a "day one hard" deposit), with the non-refundable amount credited against the purchase price at closing.
• Per diem extension fee. A daily or monthly extension fee payable to the seller during the period between the original closing date and the actual closing date, to compensate the seller for the carrying costs and opportunity cost of holding the property off the market during the extension period.
We note that a draft First Amendment to the Stonebridge PSA has already been prepared as a contingency document. This draft should be reviewed and finalized, and a corresponding First Amendment to the Meridian PSA should be prepared. The PSA amendments should be presented to the sellers' respective counsel — Harrison Poole (Whitfield, Poole & Stratton LLP) for Blackthorn and Fiona Dunleavy (Dunleavy & Dunmore Benefits Consulting, PLLC) for Meridian Acres — as promptly as practicable, and ideally before the expiration of the due diligence periods on July 7 and July 14, 2025. Negotiating leverage is greatest during the due diligence period, when IHDC retains the right to terminate and receive a full refund of the earnest money.
2. Conditional Closing
An alternative approach would be for IHDC to close on September 15, 2025 as scheduled but negotiate a contractual right to unwind the transaction (a "rescission right") if the ZMOD is denied within a specified period following closing — for example, within 120 days of closing.
This approach has significant drawbacks and is unlikely to be acceptable to the sellers. From the sellers' perspective, a rescission right creates uncertainty regarding the permanence of the closing and the sellers' right to retain the purchase price. From IHDC's perspective, a post-closing rescission right creates title complications, including the need to reverse the conveyance, cancel the title insurance policy, and unwind any encumbrances placed on the property after closing (including, potentially, the construction loan deed of trust). We do not recommend this approach except as a last resort.
3. Staged Closing
A third approach would be to close on the Stonebridge Parcel (the primary 62.0-acre parcel) on September 15, 2025 as scheduled and defer the closing on the Meridian Parcel (the secondary 19.4-acre parcel) until after ZMOD approval is obtained. This approach limits IHDC's pre-ZMOD exposure to $58,500,000 rather than the full $77,900,000 — a reduction of $19,400,000.
However, the Meridian Parcel is critical to the Project for two reasons. First, the Meridian Parcel is the intended location of the substation easement in favor of VPC, which will construct a dedicated 120 MVA electrical substation on the Meridian Parcel to serve the campus. Without the Meridian Parcel in hand, the substation easement cannot be granted, and VPC cannot commence substation construction. The substation has a target energization date of June 1, 2027, and the substation construction timeline is approximately eighteen months; accordingly, any delay in granting the substation easement could jeopardize the energization date and, in turn, the overall project delivery schedule.
Second, the Meridian Parcel provides additional building pad area and utility routing corridors that are incorporated into the concept development plan submitted as part of the ZMOD application. If the Meridian Parcel is not acquired at the time of the ZMOD hearing, the Board of Supervisors may question the applicant's ability to deliver the project as depicted in the concept development plan, which could complicate the approval process.
For these reasons, a staged closing approach may be feasible from a risk management perspective but carries its own set of timing and logistical complications. We recommend discussing this option with Thomas Ashcroft (Ashcroft & Wynn) and Alan Mercer (Cornerstone Land Use Consulting) to determine whether the ZMOD application can be structured to accommodate a deferred acquisition of the Meridian Parcel.
4. Accept Risk and Close as Scheduled
Finally, IHDC may determine that the risk of ZMOD denial is sufficiently low to justify proceeding with the land closings on September 15, 2025 as scheduled, without any contractual modifications.
This determination would be based on the following factors:
• Location in the established data center corridor. The Project site is located within Loudoun County's well-known data center corridor, which is home to the highest concentration of data center facilities in the world. The County has a long track record of approving ZMOD applications for data center use in this corridor, and the local political and economic environment is generally supportive of data center development.
• Assessment of local counsel and land use consultant. Thomas Ashcroft (Ashcroft & Wynn) and Alan Mercer (Cornerstone Land Use Consulting) have assessed the ZMOD application as well-positioned for approval, based on the site's location, the quality of the application materials, and the consistency of the proposed use with the County's Comprehensive Plan and land use policies.
• Sufficient equity capital. Ridgeline Fund IV's equity commitment of $210,000,000 to the Project provides sufficient capital to fund the land closings from equity without reliance on the construction loan. Even if the construction loan closing is delayed, IHDC has the financial capacity to acquire the land parcels and carry the investment until the construction loan closes.
If IHDC elects to accept the risk and close as scheduled, this decision should be made at the appropriate level of authority within IHDC and Ridgeline. We recommend that the decision be discussed with Marcus Thorne (CEO, IHDC), Priya Dasgupta (CFO, IHDC), and Julian Hargrove (Managing Partner, Ridgeline Capital Management LLC), and that the decision be documented in a written direction from the client.
V. Impact on Construction Loan Closing (October 15, 2025)
A. Construction Loan Overview
The construction financing for the Project is being structured as a $390,000,000 senior secured construction loan facility (the "Construction Loan"). The Construction Loan represents approximately 65% of the total project cost of $600,000,000, with the remaining 35% ($210,000,000) funded from Ridgeline Fund IV equity. The key terms of the Construction Loan, as currently contemplated based on the term sheet discussions with Summit National Bank, N.A. ("Summit"), are as follows:
The Construction Loan will be secured by a first-priority deed of trust on both the Stonebridge Parcel and the Meridian Parcel, together with collateral assignments of all project contracts (including the EPC contract, the LLSA, and any leases or pre-lease agreements), a pledge of the equity interests in Stonebridge Campus Holdings LLC, and customary UCC filings on personal property and fixtures.
B. Conditions Precedent to Construction Loan Closing
Standard conditions precedent for a construction loan of this nature and magnitude will likely include, at a minimum, the following:
(a) Governmental Approvals. Receipt of all material governmental approvals required for the construction and operation of the Project, including the ZMOD approval, building permits (to the extent issuable at the time of loan closing), and any other discretionary approvals required by Loudoun County or state agencies. The ZMOD approval is the most critical governmental approval condition and is discussed in detail in Section V.C below.
(b) Title Insurance. Satisfactory title insurance commitments and title policies issued by Sovereign Title Insurance Company through Fidelitas Title & Escrow, Inc. (as the issuing agent), insuring the lender's deed of trust as a first-priority lien on the Project real property. The lender's title policy will have a coverage amount of $390,000,000 and will include all standard endorsements required by the lender, including ALTA 3.1 (zoning), ALTA 9 (comprehensive), ALTA 17 (access), and other customary endorsements. The zoning endorsement is of particular relevance here: the title insurer may be unwilling to issue a zoning endorsement confirming that the property is zoned for data center use until the ZMOD is approved.
(c) Environmental Reports. Satisfactory Phase I and Phase II Environmental Site Assessments from Pendleton Environmental Associates, Inc., confirming that the property is free of recognized environmental conditions ("RECs") or that any identified RECs have been adequately addressed or mitigated. We understand that the Phase I ESAs have been completed for both parcels and that a limited Phase II ESA is underway on the Stonebridge Parcel to investigate an area of potential concern identified in the Phase I report.
(d) EPC Contract. An executed engineering, procurement, and construction ("EPC") contract with Titan-McAllister Construction Group, LLC ("TMCG"), with a guaranteed maximum price ("GMP") of $412,000,000 and other terms satisfactory to the lender. The EPC contract is currently targeted for execution on October 20, 2025 — five days after the construction loan closing target — but the lender will likely require that the EPC contract be in final, execution-ready form and approved by the lender's counsel prior to the loan closing, even if formal execution is scheduled for a subsequent date.
(e) LLSA. An executed Large Load Service Agreement with Vantage Power Cooperative ("VPC"), providing for a contracted electrical demand of 120 MVA for a ten-year term. The VPC Service Application Number is LSA-2025-0091. The LLSA requires a line extension contribution of $18,500,000 from IHDC and provides for VPC to construct a dedicated substation on the Meridian Parcel.
(f) Appraisal. An "as completed" and "as stabilized" appraisal from Greystone Appraisal Partners, LLC (Janet Choi, MAI), reflecting a value that supports the loan-to-cost ("LTC") ratio covenant of no greater than 65%. The appraisal methodology is a critical consideration in this analysis, as discussed further in Section V.C below.
(g) Minimum Equity Contribution. A minimum equity contribution of $52,500,000 (representing 25% of the total equity commitment of $210,000,000) must be funded by the borrower before the first draw under the Construction Loan. This "equity first" requirement ensures that the sponsor has meaningful capital at risk before lender funds are disbursed.
(h) Change of Control. Representations and covenants confirming that Ridgeline Capital Partners Fund IV, LP holds at least 51% of the equity interests in both the borrower (Stonebridge Campus Holdings LLC) and the guarantor (IHDC), and that no change of control has occurred without the prior written consent of the Administrative Agent.
(i) Insurance. Satisfactory insurance coverage, including builder's risk insurance in the amount of $412,000,000 (matching the EPC GMP) through Great Basin Surety & Insurance Corp., with a $250,000 deductible, and commercial general liability, excess/umbrella, and other coverage lines as required by the loan agreement.
C. ZMOD Approval as a Condition Precedent — Analysis
The ZMOD approval is almost certainly a condition precedent to the Construction Loan closing. This is a fundamental point: Summit National Bank and its co-lenders will not fund a $390,000,000 construction loan facility for a project that lacks the zoning entitlements necessary to construct and operate data centers on the site. Without the ZMOD approval:
• The borrower cannot obtain building permits or commence construction;
• The lender cannot obtain a zoning endorsement on its title insurance policy confirming that the property is zoned for the intended use;
• The appraiser cannot value the property on an "as completed" or "as stabilized" basis for data center use, which is the valuation premise supporting the LTC covenant; and
• The lender has no assurance that the collateral — the real property — will be developed for the highest and best use that supports the loan amount.
We expect that the ZMOD approval condition will appear in the commitment letter as a condition precedent to closing and will be carried forward into the loan agreement as a condition precedent to the initial draw. There is no realistic basis on which IHDC can request that the lenders waive the ZMOD approval condition, and we would not recommend making such a request.
The critical question, therefore, is not whether the ZMOD approval is a condition precedent (it is), but rather how the loan documents can be structured to accommodate the possibility that the ZMOD approval may not be obtained by the October 15, 2025 target closing date. This is addressed in Section V.E below.
D. Consequences of Delayed Construction Loan Closing
If the ZMOD approval is delayed beyond October 2025, the construction loan closing will be correspondingly delayed. This delay produces the following cascading consequences:
1. Equity Exposure on Land Costs. The delay in the construction loan closing means that IHDC bears the full cost of the land acquisition ($77,900,000) from equity capital until the loan closes and reimburses the land costs through the initial draw. If the delay extends for two to three months (i.e., the construction loan does not close until January or February 2026), IHDC's equity will be deployed in the land for an extended period without the benefit of leverage.
2. Cascade to EPC and NTP. The EPC contract execution with Titan-McAllister is targeted for October 20, 2025, five days after the construction loan closing target. The EPC contract is expected to be a condition precedent to the construction loan closing, and the construction loan closing is a practical prerequisite to EPC execution (since IHDC will need the committed financing in place before committing to a $412,000,000 construction contract). Accordingly, a delay in the construction loan closing will delay EPC execution, which in turn delays the Notice to Proceed (target: November 1, 2025) and ultimately delays the substantial completion dates for all four buildings. Building A substantial completion is currently targeted for August 1, 2027, and Buildings B through D are targeted for November 1, 2027.
3. VPC Substation Timeline. A delay in the construction loan closing may also delay the execution of the LLSA with Vantage Power Cooperative and the commencement of VPC's substation construction on the Meridian Parcel. The substation has a target energization date of June 1, 2027, and the substation construction period is approximately eighteen months. Any delay in commencing substation construction could push the energization date beyond June 2027, which would directly impact the Project's ability to achieve power-on for the data center buildings.
4. Impact on the 10-Year LLSA Term. The LLSA is structured as a ten-year contract with a defined term commencement date tied to the energization of the substation. If the energization date is delayed, the commencement of the ten-year term is also delayed, which may have implications for IHDC's long-term power procurement strategy and the economics of the LLSA.
5. Carrying Costs. During any delay period, IHDC will incur carrying costs on the unimproved land, including but not limited to: (a) interest on any bridge financing obtained to fund the land acquisition; (b) property taxes on the Stonebridge Parcel and the Meridian Parcel; (c) insurance costs for the unimproved parcels; and (d) consultant retainers and professional fees for the project team during the delay period. These carrying costs will erode the project's contingency and reserves budget, which is currently established at $34,900,000.
6. Arrangement Fee. The arrangement fee for the Construction Loan is $3,900,000 (1.00% of the $390,000,000 facility). It must be confirmed whether this fee is payable at the time of the commitment letter execution or at the loan closing. If payable at commitment, IHDC will have deployed $3,900,000 in fees before the loan closes. In addition, it should be confirmed whether the commitment letter includes a commitment expiration date (i.e., a date after which the lender's commitment terminates if the loan has not closed). If the commitment expires before the ZMOD is approved, IHDC may need to renegotiate the commitment or obtain a new commitment, potentially at less favorable terms.
E. Mitigation Strategies for Construction Loan Closing
1. Flexible Closing Date in Commitment Letter
The most effective mitigation strategy is to negotiate the commitment letter (Summit Loan Commitment Reference: CL-2025-VA-04418) to provide for a closing date that is the later of (a) October 15, 2025 and (b) thirty (30) days following the date on which the ZMOD is approved by the Board of Supervisors, subject to an outside date of no later than March 31, 2026.
This approach provides IHDC with the flexibility to close the Construction Loan promptly after ZMOD approval is obtained, even if the approval is delayed beyond October 2025, while giving the lenders certainty that the commitment will terminate on the outside date if the ZMOD has not been approved by that time.
The commitment letter should also include a provision tolling the commitment expiration date in the event that the ZMOD application is pending before the Board of Supervisors on the outside date (i.e., the application has been scheduled for a hearing but has not yet been acted upon). This tolling provision would prevent the commitment from expiring due to Board scheduling delays that are outside IHDC's control.
We recommend discussing this approach with Karen Ellsworth (Summit National Bank, N.A.) and Victor Redmond (Redmond & Calloway LLP) at the earliest opportunity, ideally in connection with the negotiation of the commitment letter in June and July 2025.
2. Bifurcated Closing Structure
An alternative approach is to propose a two-phase closing structure for the Construction Loan:
(i) Phase I Closing (Land Financing). An initial closing securing the deed of trust on the Stonebridge Parcel and the Meridian Parcel and funding the reimbursement of IHDC's equity investment in the land acquisition ($77,900,000). The Phase I closing would be conditioned only on title, environmental, and survey satisfaction — not on ZMOD approval. This would allow IHDC to obtain the benefit of leverage on the land investment and reduce its equity exposure during the pre-ZMOD period.
(ii) Phase II Closing (Construction Financing). A second closing releasing construction draws under the Construction Loan, conditioned on ZMOD approval, EPC contract execution, LLSA execution, and satisfaction of all other conditions precedent. The Phase II closing would occur promptly after ZMOD approval is obtained.
This approach allows the lenders to obtain their collateral position (the deed of trust on the land) earlier in the process and provides IHDC with a mechanism to reimburse its equity deployed for land costs before the ZMOD is approved. However, we assess that the lenders may resist this structure for several reasons.
First, the lenders may be unwilling to fund any draws — even for land reimbursement — without certainty that the project is entitled for data center use. The fundamental underwriting premise of the Construction Loan is that the property will be developed as a data center campus, and the loan amount is sized based on the total project cost of a data center development, not the value of unentitled PD-IP industrial land. Without the ZMOD approval, the lenders' collateral is raw land zoned for general industrial use, which would support a significantly lower loan amount.
Second, the appraisal supporting the LTC covenant (loan-to-cost ratio not exceeding 65%) is almost certainly premised on the property being entitled for data center use. An "as-is" appraisal of PD-IP zoned land would likely yield a value substantially below the loan amount, potentially putting the borrower in violation of the LTC covenant from the date of the Phase I closing.
For these reasons, we believe the bifurcated closing structure is worth exploring with the lenders but is unlikely to be accepted in its full form. A modified version — in which the lenders agree to close the entire loan and fund a single land reimbursement draw upon satisfaction of title, environmental, and survey conditions, with construction draws held in abeyance pending ZMOD approval — may be more palatable, but still faces the appraisal and LTC covenant concerns noted above.
3. Bridge Financing or Sponsor Equity Bridge
If the Construction Loan closing is delayed beyond October 2025, Ridgeline Fund IV may need to fund the land closings entirely from its equity commitment. The total equity commitment for the Project is $210,000,000, and the total land cost is $77,900,000, which represents approximately 37% of the equity commitment. Ridgeline Fund IV is a $3.8 billion fund, and the $210,000,000 commitment to the Stonebridge Project represents approximately 5.5% of total fund commitments. We believe the fund has sufficient committed but uncalled capital to fund the land closings without requiring a separate bridge facility, though this should be confirmed directly with Julian Hargrove and the fund's finance team.
As an alternative to funding entirely from equity, IHDC could consider obtaining a separate short-term bridge loan facility secured by the land parcels, to be retired upon the Construction Loan closing. This bridge facility would be a standalone credit facility, likely from a different lender or potentially from Summit itself, with a term of six to twelve months and an interest rate likely in the range of Term SOFR + 400–500 bps (reflecting the higher risk of an unentitled land loan). This bridge facility would introduce additional cost and complexity, including origination fees, legal fees for a separate loan closing, and the potential for a conflict or intercreditor issue with the Construction Loan lenders. We do not recommend this approach unless equity liquidity constraints make it necessary.
4. Coordinate with EPC Contractor
If the Construction Loan closing is delayed, the EPC contract execution and Notice to Proceed will also be delayed. IHDC should coordinate with Titan-McAllister Construction Group, LLC (Michelle Tran, project executive) to assess the implications of a delayed NTP.
Key questions for TMCG include:
• Does the GMP of $412,000,000 have a validity period? If so, what is the expiration date, and what happens if the NTP is not issued before the expiration of the validity period?
• If the NTP is delayed beyond November 1, 2025, does the GMP automatically escalate, or does TMCG have the right to re-price the GMP to reflect current material and labor costs?
• Is TMCG willing to hold its subcontractor pricing commitments during a delay period, and if so, for how long?
• Does the EPC Agreement include a reasonable validity period for the GMP and an NTP issuance outside date? If the NTP is not issued by the outside date, does TMCG have the right to terminate the EPC Agreement?
These questions should be addressed in the EPC contract negotiation (which is ongoing) and should be coordinated with the Construction Loan commitment letter negotiation to ensure consistency between the two sets of documents.
VI. Interrelationship with EPC and Power Agreements
A. EPC Agreement — Change of Control and Timing
The EPC Agreement with Titan-McAllister Construction Group, LLC is being negotiated on a guaranteed maximum price basis, with a GMP of $412,000,000. The EPC Agreement includes standard change of control provisions, which are relevant to the overall project structure:
• TMCG Consent Right. TMCG has a right to consent (not to be unreasonably withheld, conditioned, or delayed) to any change of control of the project owner entity (i.e., Stonebridge Campus Holdings LLC). This consent right is triggered by, among other things, a transfer of a majority of the equity interests in the project owner entity or a change in the managing member or managing partner of the project owner entity. Since Stonebridge Campus Holdings LLC will be wholly owned by IHDC, and IHDC is controlled by Ridgeline Fund IV, this consent right is not expected to be implicated by the current ownership structure. However, any future restructuring of the ownership chain — for example, a co-investor or joint venture partner at the project level — would require TMCG's consent.
• Owner Termination Right. The owner (Stonebridge Campus Holdings LLC) has a termination right upon a change of control of TMCG, which provides the owner with the ability to terminate the EPC Agreement if TMCG is acquired by or merged with another entity. This is a protective provision that ensures IHDC is not required to continue performance with a contractor that has undergone a material change in ownership, management, or financial condition.
The EPC contract execution is targeted for October 20, 2025 — five days after the Construction Loan closing target. If the Construction Loan closing is delayed, the EPC contract execution may need to be deferred as well, since IHDC will need committed financing in place before entering into a $412,000,000 construction contract. However, it is worth evaluating whether the EPC contract can be executed independently of the Construction Loan closing — i.e., whether IHDC has sufficient financial capacity (from its equity commitment) to support the EPC contract even before the Construction Loan closes.
Additionally, the Construction Loan collateral package includes a collateral assignment of the EPC contract, and the lender will require that the EPC contract be in a form approved by lender's counsel (Victor Redmond, Redmond & Calloway LLP) prior to the loan closing. This creates a chicken-and-egg dynamic: the lender wants an executed EPC contract as a condition to closing, and IHDC may want to defer EPC execution until the financing is in place. The typical resolution is for the EPC contract to be in final, execution-ready form at the time of the loan closing, with formal execution occurring concurrently with or immediately following the loan closing.
B. Large Load Service Agreement — Vantage Power Cooperative
The Large Load Service Agreement ("LLSA") with Vantage Power Cooperative ("VPC") is a critical infrastructure agreement for the Project. The LLSA provides for a contracted electrical demand of 120 MVA for a ten-year term, commencing on the substation energization date. The VPC Service Application Number is LSA-2025-0091.
The LLSA requires a line extension contribution of $18,500,000 from IHDC, payable in installments during the construction of the dedicated substation that VPC will build on the Meridian Parcel. The substation easement — a significant real property interest — must be granted by the owner of the Meridian Parcel in favor of VPC. This means that the Meridian Parcel closing must occur before the substation easement can be granted and before VPC can commence substation construction.
The substation has a target energization date of June 1, 2027. Based on VPC's construction timeline, the substation construction period is approximately eighteen months, which means that substation construction would need to commence no later than approximately December 2025 to achieve the June 2027 energization target. If the Meridian Parcel closing is delayed, or if the ZMOD approval is delayed (which could in turn delay the LLSA execution and the substation easement grant), the commencement of substation construction could be pushed beyond December 2025, jeopardizing the June 2027 energization date.
The implications of a delayed energization date are severe. The data center buildings cannot operate without utility power, and the entire construction schedule is premised on the substation being energized by June 1, 2027 — approximately two months before the Building A substantial completion target of August 1, 2027. If the substation energization is delayed, the buildings may be substantially complete but unable to receive power, resulting in a stranded asset until the substation is brought online.
We recommend that IHDC coordinate directly with VPC to understand the flexibility (if any) in the substation construction and energization timeline, and to determine whether VPC can begin preliminary engineering and procurement activities in advance of the LLSA execution and the substation easement grant, in order to preserve the June 2027 energization target.
VII. Recommended Course of Action
Based on the analysis set forth in this memorandum, we recommend the following course of action, organized into immediate steps, secondary steps, and a fallback position.
A. Immediate Steps
1. Obtain Realistic ZMOD Timeline Assessment. Engage Thomas Ashcroft (Ashcroft & Wynn, P.C.) and Alan Mercer (Cornerstone Land Use Consulting, LLC) to provide a written assessment of the realistic ZMOD approval timeline, including whether an October 2025 Board of Supervisors hearing remains achievable or whether a November 2025 or December 2025 hearing is more likely based on current Board of Supervisors hearing schedules, the status of the pre-application conference, and any preliminary indications from County staff regarding the likely pace of the application review. This assessment should be obtained by no later than June 15, 2025, in order to inform the due diligence period decisions and the commitment letter negotiations.
2. Review PSAs and Prepare Amendments. Review the Stonebridge PSA and the Meridian PSA in detail to confirm the precise closing conditions and whether any zoning-related contingency or condition precedent currently exists in either agreement. If no zoning contingency exists (as we preliminarily believe), prepare draft amendments to both PSAs adding a closing condition precedent tied to ZMOD approval and/or extending the closing date from September 15, 2025 to a date that is thirty (30) days following ZMOD approval, with an outside date of no later than January 31, 2026. These draft amendments should be circulated to the sellers' respective counsel for discussion before the expiration of the due diligence periods.
3. Negotiate Flexible Closing Mechanics in the Commitment Letter. In connection with the negotiation of the Construction Loan commitment letter (target: August 1, 2025; Summit Loan Commitment Reference: CL-2025-VA-04418), include specific language providing for a flexible closing date tied to ZMOD approval, with an adequate outside date of no later than March 31, 2026. This language should be introduced early in the comm

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