1043-00002 · Ironhaven Data Centers LLC · Equity & Sponsor

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MEMORANDUM

PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT

FROM: Cynthia Ho, Lead Associate, Real Estate, Calderwood & Harkness LLP

TO: Douglas Fairchild, Responsible Partner, Real Estate, Calderwood & Harkness LLP Priya Dasgupta, Chief Financial Officer, Ironhaven Data Centers LLC

CC: Angela Fontaine, Billing Partner, Calderwood & Harkness LLP Grace Nakamura, Working Associate, Calderwood & Harkness LLP Leonard Castellano, Executive Vice President — Development, Ironhaven Data Centers LLC Julian Hargrove, Managing Partner, Ridgeline Capital Management LLC

DATE: July 2025

RE: Equity Funding Mechanics and Draw Sequencing — Stonebridge Data Center Campus ($600,000,000 Project)

Matter No.: 1043-00002 Ridgeline Fund IV Investment ID: RCP-IV-2025-DC-07 Summit Loan Commitment Reference: CL-2025-VA-04418

This memorandum has been prepared concurrently with the term sheet analysis period. The target date for delivery of the Construction Loan Commitment Letter from Summit National Bank, N.A. is August 1, 2025. This memorandum is protected by the attorney-client privilege and constitutes attorney work product. It is intended solely for the named recipients and should not be disclosed to any third party without the prior written consent of Calderwood & Harkness LLP.

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I. Executive Summary

The purpose of this memorandum is to analyze the mechanics by which the $210,000,000 equity commitment from Ridgeline Capital Partners Fund IV, LP ("Ridgeline Fund IV" or the "Sponsor") will be funded into the Stonebridge Data Center Campus project (the "Project") alongside the $390,000,000 senior secured construction loan facility (the "Construction Loan"), ensuring compliance with lender conditions precedent and optimal sequencing of capital deployment across the approximately 36-month draw period.

The key takeaway from our analysis is as follows: the Construction Loan Agreement, as currently contemplated in the term sheet from Summit National Bank, N.A. ("Summit"), requires that a minimum of twenty-five percent (25%) of total equity — calculated as $52,500,000 — be contributed to the borrower, Stonebridge Campus Holdings LLC (the "Borrower"), before the first loan advance may be requested. Total equity of $210,000,000 represents 35.0% of the $600,000,000 total Project budget, and total debt of $390,000,000 represents 65.0%. The capital stack reconciliation is straightforward: $210,000,000 (equity) + $390,000,000 (debt) = $600,000,000 (total Project cost).

The successful deployment of this capital structure requires careful coordination across three principal agreements:

(i) the Equity Contribution Agreement between Ridgeline Fund IV (through its intermediate entities) and Ironhaven Data Centers LLC ("IHDC"), which governs the timing, amount, and conditions under which equity capital is called and contributed;

(ii) the Construction Loan Agreement with Summit National Bank, N.A. (as Administrative Agent) and the co-lenders in the lending syndicate (Cascade Commercial Lending Corp. and Harborview Trust Company), which establishes the conditions precedent to each loan advance, the loan-to-cost ratio covenant, and the interplay between equity and debt funding; and

(iii) the Operating Agreement of Stonebridge Campus Holdings LLC, which governs the internal mechanics of capital contributions, distributions, and member rights at the borrower level.

We have been coordinating, and expect to continue coordinating, with lender's counsel at Redmond & Calloway LLP (Victor Redmond, lead partner) on the negotiation of draw mechanics, equity contribution certification requirements, and the form and substance of the equity commitment side letter to be delivered for the benefit of the lending syndicate.

As discussed in greater detail below, we recommend a hybrid draw-sequencing approach that front-loads a significant portion of equity through the pre-closing land acquisition phase, satisfying the lender's 25% minimum equity condition through the natural sequencing of Project expenditures, while deploying the remaining equity pro rata with debt draws during the construction period. This approach balances lender protections with Ridgeline Fund IV's capital call management considerations and minimizes unnecessary interest carry during the early stages of the Project.

II. Project Capital Structure Overview

A. Total Project Budget Recap

The total Project budget for the Stonebridge Data Center Campus is $600,000,000. This budget has been developed by Ironhaven Data Centers LLC in coordination with Kestrel Infrastructure Advisors, LLC (Diane Prescott, Principal) serving as owner's representative, and reflects the Guaranteed Maximum Price ("GMP") established under the Engineering, Procurement, and Construction ("EPC") Agreement with Titan-McAllister Construction Group ("TMCG") for the hard construction costs, together with detailed estimates for all other Project cost categories. The budget is broken down as follows:

The land acquisition budget of $77,900,000 is composed of two parcels:

• Stonebridge Parcel: $58,500,000 for approximately 62.0 acres, reflecting a per-acre acquisition cost of approximately $943,548 per acre. This parcel constitutes the primary development site and will accommodate all four data center buildings and the associated power infrastructure.

• Meridian Parcel: $19,400,000 for approximately 19.4 acres, reflecting a per-acre acquisition cost of approximately $1,000,000 per acre. This adjacent parcel provides the additional acreage necessary for the substation site, stormwater management facilities, and future expansion optionality.

The entitlements, proffers, and soft costs budget of $14,200,000 includes estimated proffers of approximately $2,400,000, based on a proffer rate of $5.00 per square foot applied to the total gross floor area of 480,000 square feet. This line item also encompasses legal fees, architectural and engineering consultant costs, environmental consulting, title and survey costs, the Construction Loan arrangement fee, and other pre-development and transactional soft costs.

The EPC hard costs of $412,000,000 are subject to the GMP established under the EPC Agreement with TMCG and contemplate the construction of four data center buildings at an average cost of $103,000,000 per building. Total designed capacity is 480,000 square feet (120,000 square feet per building), yielding an approximate hard-cost basis of approximately $858 per square foot.

The power infrastructure budget of $61,000,000 encompasses all electrical infrastructure costs, including the critical $18,500,000 line extension contribution payable to Vantage Power Cooperative ("VPC") for the extension of high-voltage transmission infrastructure to the Project site, as well as on-site switchgear, transformers, backup generation, and related distribution infrastructure.

The contingency and reserves budget of $34,900,000 provides a buffer of approximately 5.8% against total Project costs.

Reconciliation: $77,900,000 + $14,200,000 + $412,000,000 + $61,000,000 + $34,900,000 = $600,000,000.

B. Capital Stack

The capital stack for the Project is structured as follows:

Equity Source and Structure. The equity commitment of $210,000,000 originates from Ridgeline Capital Partners Fund IV, LP, a Delaware limited partnership managed by Ridgeline Capital Management LLC (Julian Hargrove, Managing Partner). Ridgeline Fund IV has a total committed capital base of approximately $3.8 billion, of which the $210,000,000 commitment to the Stonebridge Data Center Campus represents approximately 5.5% of total fund commitments. Capital flows from Ridgeline Fund IV through a chain of intermediate holding entities: Ridgeline Fund IV contributes capital to RCP Digital Holdings LLC, a Delaware limited liability company, which in turn contributes capital to Ironhaven Data Centers LLC, the operating platform entity.

Ridgeline Fund IV holds a 92% equity interest in IHDC through RCP Digital Holdings LLC. The remaining 8% equity interest in IHDC is held by Ironhaven Management Incentive Pool LLC, which serves as the vehicle for management carried interest and co-investment allocations for the IHDC management team. As discussed further in Section IV.B below, confirmation is needed regarding whether the incentive pool participants have co-investment obligations proportionate to their interest or whether Ridgeline Fund IV funds 100% of the contributed capital.

Debt Source and Syndicate Structure. The senior secured construction loan facility of $390,000,000 will be provided by a syndicate of three lenders, with Summit National Bank, N.A. serving as Administrative Agent. The syndicate commitments are allocated as follows:

Reconciliation: $180,000,000 + $130,000,000 + $80,000,000 = $390,000,000.

C. Entity Flow of Funds

The flow of capital into the Project follows a defined chain of entities, which has been structured to satisfy both Ridgeline Fund IV's internal fund governance requirements and the lender's single-purpose entity requirements for the Borrower:

Ridgeline Capital Partners Fund IV, LP (Delaware limited partnership; the equity source) ↓ Capital contribution RCP Digital Holdings LLC (Delaware LLC; intermediate holding entity) ↓ Capital contribution Ironhaven Data Centers LLC (Delaware LLC; operating platform / guarantor) ↓ Capital contribution Stonebridge Campus Holdings LLC (Virginia LLC; the Borrower — single-purpose entity)

All equity contributions flow through IHDC into the Borrower entity. IHDC serves as the direct member and sole equity holder of Stonebridge Campus Holdings LLC, as well as the guarantor under the Completion Guaranty and Payment Guaranty to be delivered in connection with the Construction Loan. Stonebridge Campus Holdings LLC is a to-be-formed single-purpose Virginia limited liability company that will be wholly owned by IHDC. The Borrower's Operating Agreement will contain customary single-purpose entity covenants, including separateness covenants, an independent director requirement, and restrictions on additional indebtedness, all as required by the lending syndicate.

Loan proceeds from the Construction Loan will be advanced directly to Stonebridge Campus Holdings LLC by the lenders through Summit National Bank, N.A., as Administrative Agent. Loan proceeds and equity contributions will be deposited into segregated accounts maintained by the Borrower, with disbursements made in accordance with the approved Project budget and draw schedule.

It is critical that the entity flow of funds be well-documented and that each intermediate entity's organizational documents authorize the capital contributions contemplated by the Equity Contribution Agreement. We recommend that Calderwood & Harkness review and, if necessary, amend the operating agreements of RCP Digital Holdings LLC and IHDC to ensure that the capital call mechanics are consistent with the draw sequencing provisions discussed in this memorandum.

III. Construction Loan — Key Conditions Relevant to Equity Funding

A. Minimum Equity Contribution Before First Draw

The term sheet for the Construction Loan Agreement provides that at least twenty-five percent (25%) of total committed equity must be contributed to the Borrower and evidenced in the Borrower's accounts before the first loan advance may be requested. This is a standard lender requirement designed to ensure that the equity sponsor has meaningful "skin in the game" before the lending syndicate begins funding.

The calculation of the minimum equity contribution is as follows:

25% × $210,000,000 = $52,500,000

This amount must be evidenced as contributed capital in the Borrower's bank accounts, accompanied by a certification from the Borrower (executed by an authorized officer of IHDC as the Borrower's managing member) delivered to Summit National Bank, N.A. The certification will need to include bank statements or other evidence satisfactory to the lender demonstrating that the $52,500,000 has been irrevocably contributed to the Borrower as equity capital and is available for deployment toward Project costs.

With respect to timing, the minimum equity contribution must be funded before the construction loan closing, which is currently targeted for October 15, 2025, or at a minimum, before the first draw request is submitted to Summit. Given the significant operational advantages of having the Construction Loan facility available for draws immediately upon issuance of the Notice to Proceed ("NTP") to TMCG — currently targeted for November 1, 2025 — we recommend that the initial $52,500,000 equity contribution be funded at or before the construction loan closing date. This approach eliminates any gap between NTP issuance and the availability of loan draws.

As discussed in detail in Section V.A below, the natural sequencing of Project expenditures — specifically, the pre-closing land acquisition costs — will result in equity contributions well in excess of the $52,500,000 minimum being funded before the construction loan closing, thereby satisfying this condition precedent without requiring a separate, dedicated equity funding event.

B. Loan-to-Cost Ratio Covenant

The Construction Loan Agreement will include a loan-to-cost ("LTC") ratio covenant requiring that the ratio of drawn loan proceeds to total Project costs not exceed 65% at any measurement date. At the top of the capital stack, the LTC ratio is precisely at the covenant boundary:

$390,000,000 ÷ $600,000,000 = 65.0%

This means the Project has zero headroom on the LTC covenant at the fully-drawn level. Any cost overrun that increases the total Project budget without a corresponding increase in equity contributions would cause the LTC ratio to exceed 65%, triggering a covenant violation. For example, a $10,000,000 cost overrun would increase total Project costs to $610,000,000, resulting in an LTC ratio of 63.9% only if the additional $10,000,000 were funded entirely from equity. If, however, the cost overrun were funded from contingency that had already been assumed as part of the $600,000,000 budget, no adjustment would be necessary; but if the overrun exceeded the contingency, additional equity would be required.

The implication for draw sequencing is significant. Equity must be deployed in a manner that keeps the drawn loan amount at or below 65% of total costs incurred at each measurement date throughout the construction period. If debt is drawn faster than equity during any period, the LTC ratio at that measurement point could exceed 65%, even if the overall capital stack remains within covenant when fully deployed.

Recommendation: We recommend building a sequencing cushion into the draw schedule by slightly front-loading equity relative to debt in the early draw periods. This approach creates LTC headroom in the initial months of construction, which can be consumed in later periods if the draw pace shifts. As discussed in Section V below, the pre-closing land acquisition — funded entirely from equity — naturally creates substantial LTC headroom at the outset of the construction period.

C. Equity-First vs. Pro-Rata Draw Mechanics

There are two common approaches to sequencing equity and debt draws in a construction financing:

(i) Equity-First Approach: Under this approach, all equity is contributed to the Borrower before any loan draws are made. The equity sponsor funds the initial tranche of Project costs — up to the full amount of the equity commitment — and the lender begins funding only after the equity has been fully deployed. This approach maximizes lender protection by ensuring that the sponsor has fully committed its capital before the lender begins to bear risk, and it minimizes the lender's exposure at every stage of the Project.

(ii) Pro-Rata Approach: Under this approach, equity and debt are drawn down simultaneously on a percentage basis matching the capital stack. For each dollar of Project costs funded, 35 cents comes from equity and 65 cents comes from debt. This approach is more borrower-friendly because it spreads the equity contributions over the full construction period, reducing the J-curve effect on the sponsor's invested capital and aligning the timing of equity deployment with the timing of project cash flows. It also results in a consistent LTC ratio throughout the construction period.

Summit's proposed term sheet contemplates a hybrid approach, which combines elements of both methods. Specifically, the term sheet provides for:

(a) An initial equity-first tranche of $52,500,000 (representing 25% of total committed equity), to be contributed before the first loan draw; followed by

(b) Pro-rata draws at a 35% equity / 65% debt ratio for the remaining Project costs after the initial equity tranche has been deployed.

We have analyzed each approach and believe the hybrid approach is the optimal structure for the following reasons:

• Full Equity-First: While this approach maximizes lender protection, it would require Ridgeline Fund IV to fund the entire $210,000,000 equity commitment before any loan draws are made. This would significantly increase the equity J-curve, burden Ridgeline Fund IV with large early-stage capital calls, and result in substantial deployed capital sitting in the Borrower's accounts earning below-market returns while construction costs ramp up. We do not recommend this approach.

• Pro-Rata: A pure pro-rata approach is more borrower-friendly and maintains a consistent LTC ratio throughout the construction period. However, it does not satisfy Summit's requirement for a 25% initial equity contribution before the first loan draw. A pure pro-rata approach is unlikely to be accepted by the lending syndicate.

• Hybrid (Recommended): The hybrid approach satisfies the lender's minimum equity condition while allowing the bulk of equity to be drawn pro rata with debt during the construction period. It balances the lender's need for initial equity cushion with the sponsor's interest in efficient capital deployment. Moreover, as discussed in Section V.A, the pre-closing land acquisition naturally satisfies (and exceeds) the initial equity-first tranche requirement, meaning the hybrid approach imposes no practical burden beyond what the Project's natural sequencing already requires.

Under the hybrid approach, after the initial $52,500,000 equity tranche is contributed, the remaining equity and debt are drawn as follows:

Remaining equity: $210,000,000 − $52,500,000 = $157,500,000 Remaining debt: $390,000,000 Total remaining to fund: $157,500,000 + $390,000,000 = $547,500,000

Pro-rata split of remaining draws: $157,500,000 ÷ $547,500,000 = 28.77% equity; $390,000,000 ÷ $547,500,000 = 71.23% debt.

Note that the effective equity/debt split for the remaining draws (28.77% / 71.23%) differs from the overall capital stack ratio (35% / 65%) because the initial equity-first tranche front-loads equity. This is a standard feature of the hybrid approach and will need to be clearly documented in both the Construction Loan Agreement draw mechanics provisions and the Equity Contribution Agreement to avoid confusion during the monthly draw process. We will work with Redmond & Calloway to confirm the precise methodology for calculating the equity contribution requirement for each draw period.

D. Conditions Precedent to Each Draw

Each draw request submitted by the Borrower to Summit National Bank, N.A. must be accompanied by the following documentation:

(i) Architect/Engineer Certification of Work in Place — A certification from the Project architect or engineer of record confirming the percentage of completion of the work for which the draw is being requested and that the work has been performed in substantial conformance with the approved plans and specifications.

(ii) Title Date-Down Endorsement — A title date-down endorsement from Fidelitas Title & Escrow, Inc. / Sovereign Title Insurance Company confirming that no new liens, encumbrances, or title exceptions have been recorded against the Project since the last endorsement (or since the initial title policy date, for the first draw).

(iii) Lien Waiver Packages — Conditional and unconditional lien waivers from TMCG and all subcontractors and material suppliers for the current and prior draw periods, as applicable, in compliance with Virginia lien waiver requirements.

(iv) Updated Budget and Cost-to-Complete Analysis — A current budget showing actual costs incurred to date, amounts drawn to date (from both equity and debt sources), and a cost-to-complete estimate demonstrating that the remaining available funds (undrawn equity plus undrawn loan proceeds plus contingency) are sufficient to complete the Project.

(v) Confirmation of No Default or Event of Default — A bring-down certification from the Borrower confirming that no default or event of default has occurred and is continuing under the Construction Loan Agreement, the Completion Guaranty, the Payment Guaranty, or any other loan document.

(vi) Evidence of Equity Contribution Compliance — Evidence that the Borrower's equity contribution obligations for the applicable draw period have been met, including bank statements or wire transfer confirmations demonstrating receipt of the required equity funds.

Construction Budget Monitoring. Kestrel Infrastructure Advisors, LLC (Diane Prescott, Principal) will serve as the owner's representative and will be responsible for reviewing and certifying the construction budget, monitoring cost-to-complete projections, and coordinating with the Borrower and the lending syndicate on draw request documentation. Kestrel's role is critical to ensuring that draw requests are processed efficiently and that the LTC covenant is monitored on a real-time basis.

Lender's Independent Construction Monitor. Summit's term sheet indicates that the lending syndicate will require the appointment of an independent construction monitor at the Borrower's expense. The identity and scope of the construction monitor's engagement will need to be approved by Summit, and we anticipate that the construction monitor's reports will be a required deliverable with each draw request. We recommend that IHDC and Kestrel proactively identify and propose a construction monitor acceptable to both the Borrower and the lending syndicate.

Draw Period. The Construction Loan has a draw period of 36 months from the date of the first advance, running approximately from November 2025 through November 2028. This provides adequate runway for the 24-month construction duration currently contemplated in the EPC Agreement, with an additional 12-month buffer for delays.

E. Interest Rate and Carrying Costs During Draw Period

The interest rate on the Construction Loan will be Term SOFR + 285 basis points, with a SOFR floor of 0.50%. Based on current market conditions (Term SOFR approximately 4.30% as of the date of this memorandum), the effective interest rate would be approximately 7.15% per annum. We note that the SOFR floor of 0.50% is not currently operative but would become relevant in a materially lower interest rate environment.

In addition to interest on drawn amounts, the Borrower will be responsible for an unused commitment fee of 0.50% per annum on undrawn commitments. During the early stages of the draw period, when a significant portion of the $390,000,000 facility remains undrawn, this fee will represent a meaningful carrying cost. For example, if only $50,000,000 has been drawn at the end of the first quarter, the unused commitment fee on the remaining $340,000,000 would be approximately $1,700,000 annualized, or approximately $425,000 per quarter.

Interest and fees during the construction period may be capitalized (i.e., added to the outstanding loan balance) or paid from the carry guaranty. The Carry Guaranty / Payment Guaranty from Ironhaven Data Centers LLC covers interest, fees, and carrying costs during the draw and construction period, providing the lending syndicate with recourse to IHDC for debt service during the pre-revenue phase of the Project.

The draw sequencing strategy has a direct and material impact on total interest costs during the construction period. Front-loading equity — as occurs naturally through the pre-closing land acquisition — means that a larger portion of early-stage Project costs are funded from equity rather than debt, thereby reducing the outstanding loan balance in the early months and, consequently, reducing cumulative interest charges. By contrast, a pure pro-rata approach would result in higher loan draws in the early months and correspondingly higher cumulative interest charges over the full draw period. We estimate that the hybrid approach described in this memorandum — in which approximately $82,000,000 of equity is deployed before the first loan draw — will result in interest savings of approximately $2.5 million to $3.5 million over the construction period compared to a hypothetical pure pro-rata approach, depending on the actual pace of draw requests and prevailing SOFR rates.

F. Arrangement Fee

The lending syndicate will charge an arrangement fee of 1.00% of the total facility commitment, calculated as follows:

$390,000,000 × 1.00% = $3,900,000

The arrangement fee is due and payable at the construction loan closing, currently targeted for October 15, 2025. This fee will be funded from equity or treated as a soft cost within the $14,200,000 entitlements and soft costs budget line. We recommend that the arrangement fee be allocated to the soft costs budget line to ensure proper accounting treatment and to maintain consistency with the Project budget approved by the lending syndicate. The arrangement fee is a one-time, non-refundable payment and does not reduce the available commitment under the Construction Loan facility.

IV. Equity Contribution Agreement — Key Provisions

A. Commitment Amount and Source

The total equity commitment for the Stonebridge Data Center Campus is $210,000,000, to be sourced from Ridgeline Capital Partners Fund IV, LP. As noted above, Ridgeline Fund IV has a total committed capital base of approximately $3.8 billion, and the $210,000,000 commitment to this Project represents approximately 5.5% of total fund commitments. The Equity Contribution Agreement will govern the terms under which IHDC (on behalf of the Borrower) may call capital from Ridgeline Fund IV (through the intermediate entity chain) and the obligations of Ridgeline Fund IV to fund such capital calls.

Prior to the execution of the Construction Loan Agreement, we anticipate that Summit National Bank will require a side letter from Ridgeline Fund IV delivered directly to the lending syndicate, confirming (a) the total available committed but uncalled capital of Ridgeline Fund IV, (b) the net worth and financial capacity of Ridgeline Fund IV to fund the $210,000,000 equity commitment, (c) the absence of any side letters or other arrangements that would limit or subordinate the Stonebridge commitment relative to other fund commitments, and (d) compliance with the change of control provisions described in Section VI below. The form of this side letter will need to be negotiated with Redmond & Calloway LLP and is likely to be a condition precedent to the construction loan closing.

We recommend that IHDC request from Ridgeline Fund IV's counsel (or directly from Julian Hargrove) a current summary of Ridgeline Fund IV's unfunded commitment capacity and any contractual limitations on capital calls (such as investment pacing limitations, concentration limits, or side letter provisions that could affect the timing or amount of capital calls for the Stonebridge investment).

B. Capital Call Mechanics

Capital calls will be issued by IHDC (Priya Dasgupta, CFO) to Ridgeline Fund IV through RCP Digital Holdings LLC. The capital call process must be coordinated with the Construction Loan draw timeline to ensure that equity funds are available in the Borrower's accounts at the time each draw request is submitted to Summit.

Typical capital call notice periods for institutional private equity funds range from 10 to 15 business days advance notice. The Construction Loan draw process typically allows 5 to 10 business days for lender processing of each draw request (including review of draw documentation, construction monitor sign-off, and internal credit approvals). These two timelines must be carefully aligned to avoid a scenario in which a draw request is submitted to Summit before the corresponding equity capital call has been funded.

Recommendation: We recommend establishing a 15-business-day advance capital call notice period in the Equity Contribution Agreement, with draw requests submitted to Summit concurrently with the issuance of capital call notices to Ridgeline Fund IV. Under this framework, the capital call would be issued on approximately Day 1 of the monthly draw cycle, the draw request would be submitted to Summit on the same date, equity funds would be received from Ridgeline Fund IV by approximately Day 15, and Summit would process the draw request and advance loan proceeds by approximately Day 10–15. This sequencing ensures that equity funds are on deposit in the Borrower's accounts at or before the time the lender completes its review and is ready to advance loan proceeds.

We note that this sequencing requires discipline in the monthly budgeting and draw preparation process. Kestrel Infrastructure Advisors, as owner's representative, will play a critical role in preparing the monthly draw package sufficiently in advance to allow IHDC to issue timely capital call notices.

Management Incentive Pool Co-Investment. As noted in Section II.B, the Ironhaven Management Incentive Pool LLC holds an 8% equity interest in IHDC. It must be confirmed whether the profits-interest holders in the incentive pool have co-investment obligations — i.e., whether they are required to contribute capital proportionate to their 8% interest alongside Ridgeline Fund IV's capital calls — or whether Ridgeline Fund IV funds 100% of contributed capital, with the incentive pool's 8% interest representing a pure carried interest or profits allocation. This distinction has implications for both the Equity Contribution Agreement and the Borrower's Operating Agreement. If the incentive pool holders are not required to co-invest, the Equity Contribution Agreement should reflect that Ridgeline Fund IV is the sole source of the $210,000,000 equity commitment. If co-investment is required, separate capital call mechanics for the incentive pool participants may need to be established.

C. Failure to Fund Provisions

The Equity Contribution Agreement must address default remedies in the event that Ridgeline Fund IV fails to timely fund a capital call. This is a critical provision because a failure to fund equity has cascading consequences for the Construction Loan:

• Failure to Satisfy Conditions Precedent: Each draw request under the Construction Loan requires evidence that the Borrower's equity contribution obligations for that draw period have been met. If equity funds are not available when the draw request is submitted, the lender will decline to advance loan proceeds, potentially halting construction and causing delay-related claims by TMCG under the EPC Agreement.

• LTC Covenant Breach: If equity is not contributed on schedule, the ratio of drawn debt to total costs could exceed 65%, triggering a covenant violation under the Construction Loan Agreement.

• Cross-Default Risk: A failure to fund equity that results in a default under the Construction Loan Agreement would constitute a cross-default under the Completion Guaranty and Payment Guaranty, potentially accelerating the entire loan and exposing IHDC (and, indirectly, Ridgeline Fund IV) to significant liability.

Recommendation: We recommend negotiating a 5-business-day cure period in the Equity Contribution Agreement before any failure to fund triggers a notification to the lending syndicate. This cure period provides a brief window for Ridgeline Fund IV to remedy a delayed capital call without immediately escalating the matter to the lender level. However, we note that the cure period must be carefully coordinated with the draw request timeline to ensure that a 5-business-day delay in equity funding does not cause a corresponding delay in the lender's advance.

The Completion Guaranty from IHDC serves as a backstop for project completion in the event of an equity shortfall. Under the Completion Guaranty, IHDC will guarantee to the lending syndicate that the Project will be completed in accordance with the approved plans and budget, including by funding any equity shortfall not covered by Ridgeline Fund IV's capital contributions. We will need to confirm that the Completion Guaranty is drafted to cover equity shortfall scenarios and that IHDC has sufficient resources (or recourse to Ridgeline Fund IV) to perform under the guaranty if called upon.

D. Lender Benefit / Third-Party Beneficiary Rights

Summit National Bank and the syndicate lenders will almost certainly require either third-party beneficiary status under the Equity Contribution Agreement or a direct equity commitment letter from Ridgeline Fund IV. The purpose of this requirement is to give the lending syndicate the ability to enforce the equity commitment directly against Ridgeline Fund IV, rather than relying solely on IHDC's contractual rights under the Equity Contribution Agreement.

There are two principal approaches:

(a) Third-Party Beneficiary Clause: The Equity Contribution Agreement includes an express provision designating the lending syndicate (or Summit as Administrative Agent) as a third-party beneficiary of Ridgeline Fund IV's commitment to fund capital calls. This approach is administratively simpler but may raise issues regarding the scope of lender enforcement rights and the interplay with the fund's limited partnership agreement.

(b) Separate Side Letter / Direct Equity Commitment Letter: Ridgeline Fund IV delivers a separate letter agreement directly to Summit, in which it confirms its equity commitment, makes representations regarding its financial capacity, and covenants to fund capital calls in accordance with the Equity Contribution Agreement. This approach provides a cleaner enforcement mechanism for the lender and is the more common structure in institutional construction financings.

We anticipate that Summit (through Redmond & Calloway) will require the separate side letter approach. We will coordinate with Ridgeline Fund IV's counsel and Julian Hargrove to prepare the appropriate documentation.

Additionally, the Pledge Agreement — under which IHDC will pledge 100% of its membership interests in Stonebridge Campus Holdings LLC to Summit as Administrative Agent as collateral for the Construction Loan — must be coordinated with the Equity Contribution Agreement to ensure that the lender's security interest in the Borrower's equity is not impaired by any provisions of the Equity Contribution Agreement or the Borrower's Operating Agreement. We will review the Pledge Agreement and the Borrower's Operating Agreement in tandem to confirm consistency.

V. Recommended Draw Sequencing Schedule

A. Pre-Closing Equity Deployment (Land Acquisition Phase)

The first significant equity deployment will occur during the land acquisition phase, which is currently targeted for completion on September 15, 2025 — approximately one month before the construction loan closing date of October 15, 2025. Because the Construction Loan facility will not yet be available at the time of land acquisition, the entire $77,900,000 land cost must be funded from equity.

The total land cost of $77,900,000 (Stonebridge Parcel: $58,500,000 + Meridian Parcel: $19,400,000) is composed of earnest money deposits already funded from IHDC operating capital, plus the balance payable at closing:

Earnest Money Deposits:

• Stonebridge Parcel: $2,925,000 (5% of $58,500,000), paid in two tranches:

• First tranche of $1,462,500 deposited at PSA execution on April 15, 2025.

• Second tranche of $1,462,500 deposited at due diligence expiration on July 14, 2025.

• Meridian Parcel: $970,000 (5% of $19,400,000), deposited at PSA execution on April 22, 2025.

• Total earnest money deposits: $3,895,000.

Remaining Land Cost at Closing:

$77,900,000 − $3,895,000 = $74,005,000, payable at closing on September 15, 2025.

In addition to land acquisition costs, IHDC has incurred and will continue to incur pre-closing entitlement, consultant, and legal costs from the matter opening date (March 12, 2025) through the construction loan closing date. These costs — including architectural and engineering design fees, environmental consulting (Pendleton Environmental Associates), zoning and land use counsel, title and survey costs, and our legal fees — are estimated at approximately $3,000,000 to $5,000,000 and will be funded entirely from equity.

Accordingly, the total estimated equity deployed before the construction loan closing is:

~$77,900,000 (land acquisition) + ~$4,000,000 (soft costs) ≈ $81,900,000

This amount significantly exceeds the $52,500,000 minimum equity condition required by the Construction Loan Agreement, thereby satisfying the lender's condition precedent well in advance of the first draw request. This is a favorable outcome from a deal structuring perspective, as it eliminates the need for a separate, dedicated equity "pre-funding" event and naturally aligns the equity deployment schedule with the Project's actual expenditure timeline.

We note, however, that the $81,900,000 in pre-closing equity represents approximately 39% of the total $210,000,000 equity commitment, which means that a disproportionate share of equity is deployed before the Construction Loan facility is available. This increases the equity J-curve for Ridgeline Fund IV during the pre-construction phase. We recommend discussing this dynamic with Julian Hargrove to confirm that Ridgeline Fund IV's capital call schedule and internal liquidity management can accommodate the pre-closing equity deployment.

B. Construction Loan Closing (October 15, 2025)

At the construction loan closing, currently targeted for October 15, 2025, the following milestones should be achieved:

• Total equity contributed to date: Approximately $82,000,000 (consisting of $77,900,000 for land acquisition, $3,895,000 in earnest money deposits previously funded, and approximately $4,000,000 in pre-development soft costs). This amount exceeds the 25% minimum equity requirement of $52,500,000 by approximately $29,500,000, providing substantial initial headroom on the LTC covenant.

• Arrangement fee payment: $3,900,000 payable to Summit National Bank, N.A. at closing.

• Construction Loan facility available for draws: Upon satisfaction of all conditions precedent to the initial advance (including delivery of the equity contribution certification, title insurance policy, survey, environmental reports, organizational documents, legal opinions, and all other closing deliverables), the $390,000,000 Construction Loan facility will become available for draw requests.

Following the construction loan closing, the remaining capital to be deployed is:

• Remaining equity: $210,000,000 − ~$82,000,000 = ~$128,000,000

• Remaining debt: $390,000,000 (no debt drawn at closing)

• Total remaining to fund: ~$128,000,000 + $390,000,000 = ~$518,000,000

During the construction period, the remaining equity and debt will be drawn pro rata based on the methodology described in Section III.C above, with equity representing approximately 24.7% and debt representing approximately 75.3% of each subsequent draw (reflecting the fact that the initial equity-first tranche has already been contributed, skewing the remaining draws toward a higher debt percentage). However, as noted, the overall LTC ratio at full deployment remains 65.0%.

C. Construction Period Draw Schedule (November 2025 — November 2027)

The Notice to Proceed ("NTP") under the EPC Agreement with Titan-McAllister Construction Group is currently targeted for November 1, 2025, approximately two weeks after the construction loan closing. The EPC Agreement contemplates a 24-month construction duration from NTP through Substantial Completion of all four data center buildings, with Building A targeted for Substantial Completion by August 1, 2027 and Buildings B through D targeted for Substantial Completion by November 1, 2027.

Draw Cycle. We recommend establishing a monthly draw cycle aligned with TMCG's monthly application for payment under the EPC Agreement. TMCG will submit its monthly pay application to Kestrel Infrastructure Advisors for review and approval, and the approved amount will form the basis for the Borrower's monthly draw request to Summit. The monthly draw request will include both the EPC hard cost component and any other Project costs incurred during the applicable month (e.g., power infrastructure costs, consultant fees, insurance premiums, and other soft costs).

Pro-Rata Equity/Debt Split. Each monthly draw will be funded on a pro-rata basis, with equity and debt funding their respective shares of the approved monthly costs. After the pre-closing equity tranche has been accounted for, the effective split for each remaining draw period will be approximately 24.7% equity / 75.3% debt, although the exact percentages may vary slightly from month to month depending on the mix of costs incurred and the cumulative LTC ratio.

Illustrative Monthly Draw Schedule. The following table provides an illustrative overview of the expected draw cadence during the construction period. Actual amounts will vary based on construction progress and TMCG's monthly pay applications:

Note: This table is illustrative only and reflects estimated costs based on the current Project budget and construction schedule. Actual draw amounts will be determined based on approved monthly pay applications and actual costs incurred. The cumulative LTC ratio is calculated as cumulative debt drawn divided by cumulative total costs funded (equity + debt).

Retainage. The EPC Agreement provides for retainage of 10% of each monthly progress payment until the Project reaches 50% completion, at which point retainage is reduced to 5% for subsequent progress payments. Retainage is held by the Borrower (or deposited into a segregated retainage escrow account) and is not released to TMCG until Substantial Completion of each building. From a draw perspective, retainage does not reduce the amount of the monthly draw request — the full amount of the approved pay application is drawn from both equity and debt sources, with the retainage portion held in the Borrower's retainage account rather than disbursed to TMCG.

Power Infrastructure Costs. The $61,000,000 power infrastructure budget will be drawn during the early-to-mid construction phase, with the $18,500,000 line extension contribution to Vantage Power Cooperative payable in accordance with the terms of the Line Extension Agreement. The substation energization target is June 1, 2027, and power infrastructure expenditures will be sequenced accordingly. We will coordinate with Leonard Castellano (EVP Development) and VPC to confirm the payment schedule for the line extension contribution and ensure that it is reflected in the monthly draw projections.

D. Contingency and Reserve Draws

The contingency and reserves budget of $34,900,000 is intended to cover cost overruns, approved change orders, and unforeseen conditions that arise during construction. Draws on the contingency budget will be subject to the following protocols:

(i) Contingency draws will be made only upon documented cost overruns or approved change orders, with supporting documentation submitted to the lending syndicate as part of the monthly draw package.

(ii) Each contingency draw must be tested against the 65% LTC covenant to ensure that the additional expenditure, when combined with cumulative debt draws, does not cause the LTC ratio to exceed 65%. If a contingency draw would cause a covenant breach, additional equity must be contributed by Ridgeline Fund IV to maintain compliance.

(iii) We recommend maintaining the contingency budget in a segregated sub-account at the Borrower level, separate from the operating disbursement account and the equity contribution account. This segregation provides transparency for the lending syndicate and facilitates covenant monitoring.

(iv) As a default assumption, contingency draws should be treated as equity-funded unless the lending syndicate expressly approves debt-funded contingency draws. This conservative approach ensures that the LTC covenant is not inadvertently breached by contingency expenditures.

If actual construction costs track at or below the GMP, a portion of the contingency budget may remain undrawn at Substantial Completion. Unused contingency may be available to offset post-completion lease-up costs or may be released to the Borrower, subject to the terms of the Construction Loan Agreement.

VI. Change of Control Considerations Affecting Equity Funding

The Construction Loan Agreement, as contemplated in the current term sheet, includes a mandatory prepayment trigger upon any change of control of the Borrower (Stonebridge Campus Holdings LLC) or the guarantor (Ironhaven Data Centers LLC). A "change of control" is defined as any transfer, assignment, or other disposition of equity interests in the Borrower or the guarantor that results in Ridgeline Capital Partners Fund IV, LP (directly or indirectly) ceasing to hold at least 51% of the equity interests in the Borrower or the guarantor.

This provision has several important implications for equity funding and potential future restructuring:

(a) Intermediate Entity Restructuring. Any restructuring of the equity contribution chain — specifically, the Ridgeline Fund IV → RCP Digital Holdings LLC → IHDC → Stonebridge Campus Holdings LLC chain — during the construction period could trigger the mandatory prepayment provision if the restructuring results in Ridgeline Fund IV ceasing to hold at least 51% indirect ownership of the Borrower. Even administrative or tax-driven restructurings (such as the insertion of an additional intermediate entity) should be reviewed against the change of control definition before implementation.

(b) Co-Investor Admission. If Ridgeline Fund IV seeks to bring in co-investors or sell down a portion of its interest in the Project during the construction period, careful analysis will be required to ensure that Ridgeline Fund IV retains at least 51% indirect ownership of the Borrower. For example, if Ridgeline Fund IV currently holds 92% of IHDC through RCP Digital Holdings LLC, it could potentially sell up to 41 percentage points (reducing its interest to 51%) without triggering the change of control provision. However, this analysis must account for the interaction between the ownership percentages at each level of the entity chain and the overall indirect ownership calculation.

(c) Management Incentive Pool. The 8% interest held by Ironhaven Management Incentive Pool LLC must be monitored to ensure that any changes to the incentive pool structure — such as additional issuances of profits interests, conversion of profits interests to capital interests, or admission of new incentive pool participants — do not inadvertently dilute Ridgeline Fund IV's indirect ownership below the 51% threshold.

We also note that the EPC Agreement with Titan-McAllister Construction Group contains a separate change of control provision. Under Section 14.3 of the EPC Agreement, TMCG has a consent right (not to be unreasonably withheld, conditioned, or delayed) with respect to any change of control of the "project owner entity" (defined as Stonebridge Campus Holdings LLC). While this provision is less restrictive than the Construction Loan's mandatory prepayment trigger — in that it requires only TMCG's consent rather than triggering an automatic mandatory prepayment — it nonetheless represents an additional hurdle that must be cleared before any equity restructuring.

Recommendation: Any equity restructuring during the construction period should be pre-cleared with both Summit (and the syndicate lenders, through Redmond & Calloway LLP) and TMCG before implementation, to avoid inadvertently triggering a mandatory prepayment event or requiring contractor consent. We recommend that IHDC and Ridgeline Fund IV adopt a moratorium on equity restructuring activity during the construction period absent compelling strategic or tax reasons, and that any proposed restructuring be reviewed by Calderwood & Harkness before execution.

VII. Maturity, Extension, and Stabilization Considerations

A. Loan Maturity and Extension

The Construction Loan has an initial maturity date of 48 months from the construction loan closing date. Based on the target closing date of October 15, 2025, the initial maturity would be approximately October 15, 2029.

The term sheet provides for one 12-month extension option, which would extend the maturity to approximately October 15, 2030. The conditions for exercising the extension option are to be negotiated but are expected to include, at minimum: (a) satisfaction of a minimum debt service coverage ratio ("DSCR") test at the time of extension, (b) no default or event of default under the loan documents, (c) payment of an extension fee (amount to be negotiated, typically 0.25%–0.50% of the outstanding balance), and (d) delivery of updated financial projections and tenant lease status reports.

The draw period is 36 months from the first advance, running from approximately November 2025 through November 2028. No new advances may be made after the expiration of the draw period.

The current construction schedule targets Substantial Completion of Building A by August 1, 2027 and Substantial Completion of Buildings B through D by November 1, 2027. Assuming construction is completed on schedule, Substantial Completion will occur approximately 24 months after NTP — well within the 36-month draw period. This provides a meaningful buffer for construction delays without jeopardizing the availability of remaining loan proceeds.

Following Substantial Completion, there will be a post-completion / lease-up period of approximately 24 months (from November 2027 to October 2029) before the initial maturity date. This period is critical for achieving stabilization and either refinancing the Construction Loan with permanent financing or exercising the extension option.

B. DSCR at Stabilization

The Construction Loan Agreement will include a minimum DSCR covenant at stabilization of ≥ 1.25x. The stabilization target is Q2 2028 (approximately six months after Substantial Completion), defined as the date on which the Project has achieved an occupancy level of at least 85% leased.

Once the Project achieves stabilization, IHDC may seek to refinance the Construction Loan with a permanent financing facility or a term loan at more favorable terms, reflecting the reduced risk profile of a stabilized, income-producing data center asset. Equity funding mechanics should account for the possibility that additional equity may be required during the post-completion period if lease-up is slower than projected and the DSCR covenant cannot be satisfied with projected rental income alone. In that scenario, Ridgeline Fund IV may need to fund an additional equity contribution (beyond the $210,000,000 committed amount) to support the Borrower's compliance with the DSCR covenant.

We recommend that the Equity Contribution Agreement include a provision addressing the potential need for post-construction equity contributions to support DSCR compliance, including the terms under which such contributions would be called and funded.

C. Estimated Annual Carrying Costs Post-Construction

Once the data center campus is operational, the Borrower will incur significant ongoing carrying costs that will factor into the DSCR calculation and must be reflected in the tenant lease structures (typically as pass-through charges). Key carrying costs include:

• Utility Demand Charges: Estimated annual utility demand charges at full load capacity: 120,000 kW × $8.42/kW/month × 12 months = $12,124,800 per year. These charges are based on VPC's current tariff schedule and are subject to adjustment upon rate case proceedings.

• Loudoun County Equipment Tax: The Loudoun County, Virginia personal property tax on computer equipment and data processing equipment is levied at a rate of $1.25 per $100 of assessed value on IT equipment. The actual tax burden will depend on the assessed value of tenant-owned equipment deployed at the facility, and the tax obligation will typically be passed through to tenants under the data center lease agreements.

These ongoing costs, together with real property taxes, insurance, management fees, and capital reserve contributions, will form the denominator of the DSCR calculation and must be carefully modeled in the Project's financial projections. We will coordinate with Priya Dasgupta and Fielding & Associates to ensure that the DSCR projections submitted to the lending syndicate accurately reflect these carrying costs.

VIII. Tax and Accounting Coordination

Equity contributions to Stonebridge Campus Holdings LLC will be structured as capital contributions under the Borrower's Operating Agreement, with corresponding adjustments to the capital accounts and tax basis of the contributing member (IHDC). It is essential to maintain accurate tax basis tracking for Ridgeline Fund IV's investment, including the allocation of pre-development costs, capitalized interest during construction, and the tax treatment of the arrangement fee and other transactional costs.

We recommend coordination with Fielding & Associates, CPAs (Robert Fielding, CPA), who serve as the tax advisor to IHDC, on the following matters:

(i) Treatment of Pre-Development Costs: Costs incurred prior to the commencement of construction — including legal fees, architectural and engineering design costs, environmental consulting, and earnest money deposits — must be properly characterized for tax purposes. Under Section 263A of the Internal Revenue Code, certain pre-development costs may be required to be capitalized and allocated to the cost basis of the constructed improvements rather than deducted currently.

(ii) Capitalization of Interest During Construction: Interest and fees incurred on the Construction Loan during the construction period must be capitalized under Section 263A and added to the depreciable basis of the data center buildings. The timing and amount of equity contributions affect the total interest capitalized, because front-loading equity reduces the outstanding loan balance and, consequently, the amount of interest incurred during the construction period.

(iii) Allocation of Soft Costs: The $14,200,000 soft costs budget includes items that may be allocated to different depreciable asset classes or may be deductible as current expenses. Proper allocation requires coordination between the tax advisor and the project accounting team.

Cost Segregation Study. A cost segregation study should be commissioned upon the commencement of construction to identify components of the data center buildings that may be reclassified from 39-year nonresidential real property to shorter depreciable lives (e.g., 5-year, 7-year, or 15-year property). Based on industry benchmarks for data center construction, we estimate that approximately $45,000,000 of the hard construction costs may be reclassified to shorter depreciable lives, resulting in significant accelerated depreciation deductions for Ridgeline Fund IV. The timing of equity contributions affects the tax basis computations underlying the cost segregation analysis, as the total capitalized cost of the improvements (including capitalized interest and allocated soft costs) forms the basis for the depreciation schedule.

Virginia Data Center Sales Tax Exemption. The Commonwealth of Virginia provides a sales and use tax exemption for data center equipment under Va. Code § 58.1-609.3(18). To qualify for the exemption, the Project must demonstrate a minimum capital investment of $150,000,000 over a five-year period and the creation of at least 50 new jobs (with a minimum compensation threshold). The equity funding timeline must support the demonstration of capital investment thresholds within the required measurement period. Based on the current Project budget and construction schedule, the $600,000,000 total investment will far exceed the $150,000,000 minimum, and we do not anticipate difficulty satisfying this condition. However, the timing of expenditures must be documented to support the application for the exemption.

The estimated sales tax savings from the exemption are substantial. Assuming approximately $300,000,000 of qualifying equipment purchases at Virginia's combined state and local sales tax rate of 5.3%, the estimated savings are approximately $15,900,000 over the life of the Project. We recommend that the application for the sales tax exemption be filed promptly upon commencement of construction, and that IHDC maintain detailed records of qualifying expenditures to support future audits by the Virginia Department of Taxation.

We will coordinate with Sylvia Hartwell (Calderwood & Harkness, Tax Department) and Fielding & Associates on these tax and accounting matters and will provide a separate memorandum addressing the tax structuring considerations in greater detail.

IX. Risk Factors and Mitigation Strategies

A. Construction Cost Overrun Risk

The GMP of $412,000,000 established under the EPC Agreement with Titan-McAllister Construction Group provides a contractual ceiling on hard construction costs, subject to certain carve-outs. However, several categories of cost increases are not covered by the GMP and could require additional capital beyond the approved Project budget:

• Owner-Directed Changes: Changes to the scope, design, or specifications directed by the Borrower (or its tenants) that are not contemplated by the original contract documents will result in change orders that are additive to the GMP.

• Unforeseen Site Conditions: The Phase II Environmental Site Assessment prepared by Pendleton Environmental Associates identified potential residual pesticide contamination in the Stonebridge Parcel's northwest quadrant, encompassing approximately 4.2 acres. While the current remediation cost estimate is within the contingency budget, further investigation may reveal more extensive contamination requiring additional remediation expenditures.

• Force Majeure Events: The EPC Agreement includes a force majeure provision that may entitle TMCG to extensions of time and, in certain limited circumstances, additional compensation for costs arising from events beyond the contractor's reasonable control (including severe weather, governmental actions, and supply chain disruptions).

The contingency budget of $34,900,000 provides a buffer of approximately 5.8% against total Project costs. This contingency level is consistent with industry standards for institutional data center development projects but may be insufficient to absorb a major cost overrun arising from unforeseen site conditions or significant scope changes.

If cost overruns exceed the contingency budget, additional equity will be required to maintain the LTC covenant at or below 65%. In that scenario, Ridgeline Fund IV would be called upon to fund additional capital beyond the $210,000,000 committed amount, or IHDC would be required to perform under the Completion Guaranty, which backstops any funding shortfall to ensure project completion. We recommend that the Equity Contribution Agreement include a mechanism for incremental capital calls in excess of the committed amount, subject to Ridgelin

MEMORANDUM
PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT
FROM: Cynthia Ho, Lead Associate, Real Estate, Calderwood & Harkness LLP
TO: Douglas Fairchild, Responsible Partner, Real Estate, Calderwood & Harkness LLP Priya Dasgupta, Chief Financial Officer, Ironhaven Data Centers LLC
CC: Angela Fontaine, Billing Partner, Calderwood & Harkness LLP Grace Nakamura, Working Associate, Calderwood & Harkness LLP Leonard Castellano, Executive Vice President — Development, Ironhaven Data Centers LLC Julian Hargrove, Managing Partner, Ridgeline Capital Management LLC
DATE: July 2025
RE: Equity Funding Mechanics and Draw Sequencing — Stonebridge Data Center Campus ($600,000,000 Project)
Matter No.: 1043-00002 Ridgeline Fund IV Investment ID: RCP-IV-2025-DC-07 Summit Loan Commitment Reference: CL-2025-VA-04418
This memorandum has been prepared concurrently with the term sheet analysis period. The target date for delivery of the Construction Loan Commitment Letter from Summit National Bank, N.A. is August 1, 2025. This memorandum is protected by the attorney-client privilege and constitutes attorney work product. It is intended solely for the named recipients and should not be disclosed to any third party without the prior written consent of Calderwood & Harkness LLP.
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I. Executive Summary
The purpose of this memorandum is to analyze the mechanics by which the $210,000,000 equity commitment from Ridgeline Capital Partners Fund IV, LP ("Ridgeline Fund IV" or the "Sponsor") will be funded into the Stonebridge Data Center Campus project (the "Project") alongside the $390,000,000 senior secured construction loan facility (the "Construction Loan"), ensuring compliance with lender conditions precedent and optimal sequencing of capital deployment across the approximately 36-month draw period.
The key takeaway from our analysis is as follows: the Construction Loan Agreement, as currently contemplated in the term sheet from Summit National Bank, N.A. ("Summit"), requires that a minimum of twenty-five percent (25%) of total equity — calculated as $52,500,000 — be contributed to the borrower, Stonebridge Campus Holdings LLC (the "Borrower"), before the first loan advance may be requested. Total equity of $210,000,000 represents 35.0% of the $600,000,000 total Project budget, and total debt of $390,000,000 represents 65.0%. The capital stack reconciliation is straightforward: $210,000,000 (equity) + $390,000,000 (debt) = $600,000,000 (total Project cost).
The successful deployment of this capital structure requires careful coordination across three principal agreements:
(i) the Equity Contribution Agreement between Ridgeline Fund IV (through its intermediate entities) and Ironhaven Data Centers LLC ("IHDC"), which governs the timing, amount, and conditions under which equity capital is called and contributed;
(ii) the Construction Loan Agreement with Summit National Bank, N.A. (as Administrative Agent) and the co-lenders in the lending syndicate (Cascade Commercial Lending Corp. and Harborview Trust Company), which establishes the conditions precedent to each loan advance, the loan-to-cost ratio covenant, and the interplay between equity and debt funding; and
(iii) the Operating Agreement of Stonebridge Campus Holdings LLC, which governs the internal mechanics of capital contributions, distributions, and member rights at the borrower level.
We have been coordinating, and expect to continue coordinating, with lender's counsel at Redmond & Calloway LLP (Victor Redmond, lead partner) on the negotiation of draw mechanics, equity contribution certification requirements, and the form and substance of the equity commitment side letter to be delivered for the benefit of the lending syndicate.
As discussed in greater detail below, we recommend a hybrid draw-sequencing approach that front-loads a significant portion of equity through the pre-closing land acquisition phase, satisfying the lender's 25% minimum equity condition through the natural sequencing of Project expenditures, while deploying the remaining equity pro rata with debt draws during the construction period. This approach balances lender protections with Ridgeline Fund IV's capital call management considerations and minimizes unnecessary interest carry during the early stages of the Project.
II. Project Capital Structure Overview
A. Total Project Budget Recap
The total Project budget for the Stonebridge Data Center Campus is $600,000,000. This budget has been developed by Ironhaven Data Centers LLC in coordination with Kestrel Infrastructure Advisors, LLC (Diane Prescott, Principal) serving as owner's representative, and reflects the Guaranteed Maximum Price ("GMP") established under the Engineering, Procurement, and Construction ("EPC") Agreement with Titan-McAllister Construction Group ("TMCG") for the hard construction costs, together with detailed estimates for all other Project cost categories. The budget is broken down as follows:
The land acquisition budget of $77,900,000 is composed of two parcels:
• Stonebridge Parcel: $58,500,000 for approximately 62.0 acres, reflecting a per-acre acquisition cost of approximately $943,548 per acre. This parcel constitutes the primary development site and will accommodate all four data center buildings and the associated power infrastructure.
• Meridian Parcel: $19,400,000 for approximately 19.4 acres, reflecting a per-acre acquisition cost of approximately $1,000,000 per acre. This adjacent parcel provides the additional acreage necessary for the substation site, stormwater management facilities, and future expansion optionality.
The entitlements, proffers, and soft costs budget of $14,200,000 includes estimated proffers of approximately $2,400,000, based on a proffer rate of $5.00 per square foot applied to the total gross floor area of 480,000 square feet. This line item also encompasses legal fees, architectural and engineering consultant costs, environmental consulting, title and survey costs, the Construction Loan arrangement fee, and other pre-development and transactional soft costs.
The EPC hard costs of $412,000,000 are subject to the GMP established under the EPC Agreement with TMCG and contemplate the construction of four data center buildings at an average cost of $103,000,000 per building. Total designed capacity is 480,000 square feet (120,000 square feet per building), yielding an approximate hard-cost basis of approximately $858 per square foot.
The power infrastructure budget of $61,000,000 encompasses all electrical infrastructure costs, including the critical $18,500,000 line extension contribution payable to Vantage Power Cooperative ("VPC") for the extension of high-voltage transmission infrastructure to the Project site, as well as on-site switchgear, transformers, backup generation, and related distribution infrastructure.
The contingency and reserves budget of $34,900,000 provides a buffer of approximately 5.8% against total Project costs.
Reconciliation: $77,900,000 + $14,200,000 + $412,000,000 + $61,000,000 + $34,900,000 = $600,000,000.
B. Capital Stack
The capital stack for the Project is structured as follows:
Equity Source and Structure. The equity commitment of $210,000,000 originates from Ridgeline Capital Partners Fund IV, LP, a Delaware limited partnership managed by Ridgeline Capital Management LLC (Julian Hargrove, Managing Partner). Ridgeline Fund IV has a total committed capital base of approximately $3.8 billion, of which the $210,000,000 commitment to the Stonebridge Data Center Campus represents approximately 5.5% of total fund commitments. Capital flows from Ridgeline Fund IV through a chain of intermediate holding entities: Ridgeline Fund IV contributes capital to RCP Digital Holdings LLC, a Delaware limited liability company, which in turn contributes capital to Ironhaven Data Centers LLC, the operating platform entity.
Ridgeline Fund IV holds a 92% equity interest in IHDC through RCP Digital Holdings LLC. The remaining 8% equity interest in IHDC is held by Ironhaven Management Incentive Pool LLC, which serves as the vehicle for management carried interest and co-investment allocations for the IHDC management team. As discussed further in Section IV.B below, confirmation is needed regarding whether the incentive pool participants have co-investment obligations proportionate to their interest or whether Ridgeline Fund IV funds 100% of the contributed capital.
Debt Source and Syndicate Structure. The senior secured construction loan facility of $390,000,000 will be provided by a syndicate of three lenders, with Summit National Bank, N.A. serving as Administrative Agent. The syndicate commitments are allocated as follows:
Reconciliation: $180,000,000 + $130,000,000 + $80,000,000 = $390,000,000.
C. Entity Flow of Funds
The flow of capital into the Project follows a defined chain of entities, which has been structured to satisfy both Ridgeline Fund IV's internal fund governance requirements and the lender's single-purpose entity requirements for the Borrower:
Ridgeline Capital Partners Fund IV, LP (Delaware limited partnership; the equity source) ↓ Capital contribution RCP Digital Holdings LLC (Delaware LLC; intermediate holding entity) ↓ Capital contribution Ironhaven Data Centers LLC (Delaware LLC; operating platform / guarantor) ↓ Capital contribution Stonebridge Campus Holdings LLC (Virginia LLC; the Borrower — single-purpose entity)
All equity contributions flow through IHDC into the Borrower entity. IHDC serves as the direct member and sole equity holder of Stonebridge Campus Holdings LLC, as well as the guarantor under the Completion Guaranty and Payment Guaranty to be delivered in connection with the Construction Loan. Stonebridge Campus Holdings LLC is a to-be-formed single-purpose Virginia limited liability company that will be wholly owned by IHDC. The Borrower's Operating Agreement will contain customary single-purpose entity covenants, including separateness covenants, an independent director requirement, and restrictions on additional indebtedness, all as required by the lending syndicate.
Loan proceeds from the Construction Loan will be advanced directly to Stonebridge Campus Holdings LLC by the lenders through Summit National Bank, N.A., as Administrative Agent. Loan proceeds and equity contributions will be deposited into segregated accounts maintained by the Borrower, with disbursements made in accordance with the approved Project budget and draw schedule.
It is critical that the entity flow of funds be well-documented and that each intermediate entity's organizational documents authorize the capital contributions contemplated by the Equity Contribution Agreement. We recommend that Calderwood & Harkness review and, if necessary, amend the operating agreements of RCP Digital Holdings LLC and IHDC to ensure that the capital call mechanics are consistent with the draw sequencing provisions discussed in this memorandum.
III. Construction Loan — Key Conditions Relevant to Equity Funding
A. Minimum Equity Contribution Before First Draw
The term sheet for the Construction Loan Agreement provides that at least twenty-five percent (25%) of total committed equity must be contributed to the Borrower and evidenced in the Borrower's accounts before the first loan advance may be requested. This is a standard lender requirement designed to ensure that the equity sponsor has meaningful "skin in the game" before the lending syndicate begins funding.
The calculation of the minimum equity contribution is as follows:
25% × $210,000,000 = $52,500,000
This amount must be evidenced as contributed capital in the Borrower's bank accounts, accompanied by a certification from the Borrower (executed by an authorized officer of IHDC as the Borrower's managing member) delivered to Summit National Bank, N.A. The certification will need to include bank statements or other evidence satisfactory to the lender demonstrating that the $52,500,000 has been irrevocably contributed to the Borrower as equity capital and is available for deployment toward Project costs.
With respect to timing, the minimum equity contribution must be funded before the construction loan closing, which is currently targeted for October 15, 2025, or at a minimum, before the first draw request is submitted to Summit. Given the significant operational advantages of having the Construction Loan facility available for draws immediately upon issuance of the Notice to Proceed ("NTP") to TMCG — currently targeted for November 1, 2025 — we recommend that the initial $52,500,000 equity contribution be funded at or before the construction loan closing date. This approach eliminates any gap between NTP issuance and the availability of loan draws.
As discussed in detail in Section V.A below, the natural sequencing of Project expenditures — specifically, the pre-closing land acquisition costs — will result in equity contributions well in excess of the $52,500,000 minimum being funded before the construction loan closing, thereby satisfying this condition precedent without requiring a separate, dedicated equity funding event.
B. Loan-to-Cost Ratio Covenant
The Construction Loan Agreement will include a loan-to-cost ("LTC") ratio covenant requiring that the ratio of drawn loan proceeds to total Project costs not exceed 65% at any measurement date. At the top of the capital stack, the LTC ratio is precisely at the covenant boundary:
$390,000,000 ÷ $600,000,000 = 65.0%
This means the Project has zero headroom on the LTC covenant at the fully-drawn level. Any cost overrun that increases the total Project budget without a corresponding increase in equity contributions would cause the LTC ratio to exceed 65%, triggering a covenant violation. For example, a $10,000,000 cost overrun would increase total Project costs to $610,000,000, resulting in an LTC ratio of 63.9% only if the additional $10,000,000 were funded entirely from equity. If, however, the cost overrun were funded from contingency that had already been assumed as part of the $600,000,000 budget, no adjustment would be necessary; but if the overrun exceeded the contingency, additional equity would be required.
The implication for draw sequencing is significant. Equity must be deployed in a manner that keeps the drawn loan amount at or below 65% of total costs incurred at each measurement date throughout the construction period. If debt is drawn faster than equity during any period, the LTC ratio at that measurement point could exceed 65%, even if the overall capital stack remains within covenant when fully deployed.
Recommendation: We recommend building a sequencing cushion into the draw schedule by slightly front-loading equity relative to debt in the early draw periods. This approach creates LTC headroom in the initial months of construction, which can be consumed in later periods if the draw pace shifts. As discussed in Section V below, the pre-closing land acquisition — funded entirely from equity — naturally creates substantial LTC headroom at the outset of the construction period.
C. Equity-First vs. Pro-Rata Draw Mechanics
There are two common approaches to sequencing equity and debt draws in a construction financing:
(i) Equity-First Approach: Under this approach, all equity is contributed to the Borrower before any loan draws are made. The equity sponsor funds the initial tranche of Project costs — up to the full amount of the equity commitment — and the lender begins funding only after the equity has been fully deployed. This approach maximizes lender protection by ensuring that the sponsor has fully committed its capital before the lender begins to bear risk, and it minimizes the lender's exposure at every stage of the Project.
(ii) Pro-Rata Approach: Under this approach, equity and debt are drawn down simultaneously on a percentage basis matching the capital stack. For each dollar of Project costs funded, 35 cents comes from equity and 65 cents comes from debt. This approach is more borrower-friendly because it spreads the equity contributions over the full construction period, reducing the J-curve effect on the sponsor's invested capital and aligning the timing of equity deployment with the timing of project cash flows. It also results in a consistent LTC ratio throughout the construction period.
Summit's proposed term sheet contemplates a hybrid approach, which combines elements of both methods. Specifically, the term sheet provides for:
(a) An initial equity-first tranche of $52,500,000 (representing 25% of total committed equity), to be contributed before the first loan draw; followed by
(b) Pro-rata draws at a 35% equity / 65% debt ratio for the remaining Project costs after the initial equity tranche has been deployed.
We have analyzed each approach and believe the hybrid approach is the optimal structure for the following reasons:
• Full Equity-First: While this approach maximizes lender protection, it would require Ridgeline Fund IV to fund the entire $210,000,000 equity commitment before any loan draws are made. This would significantly increase the equity J-curve, burden Ridgeline Fund IV with large early-stage capital calls, and result in substantial deployed capital sitting in the Borrower's accounts earning below-market returns while construction costs ramp up. We do not recommend this approach.
• Pro-Rata: A pure pro-rata approach is more borrower-friendly and maintains a consistent LTC ratio throughout the construction period. However, it does not satisfy Summit's requirement for a 25% initial equity contribution before the first loan draw. A pure pro-rata approach is unlikely to be accepted by the lending syndicate.
• Hybrid (Recommended): The hybrid approach satisfies the lender's minimum equity condition while allowing the bulk of equity to be drawn pro rata with debt during the construction period. It balances the lender's need for initial equity cushion with the sponsor's interest in efficient capital deployment. Moreover, as discussed in Section V.A, the pre-closing land acquisition naturally satisfies (and exceeds) the initial equity-first tranche requirement, meaning the hybrid approach imposes no practical burden beyond what the Project's natural sequencing already requires.
Under the hybrid approach, after the initial $52,500,000 equity tranche is contributed, the remaining equity and debt are drawn as follows:
Remaining equity: $210,000,000 − $52,500,000 = $157,500,000 Remaining debt: $390,000,000 Total remaining to fund: $157,500,000 + $390,000,000 = $547,500,000
Pro-rata split of remaining draws: $157,500,000 ÷ $547,500,000 = 28.77% equity; $390,000,000 ÷ $547,500,000 = 71.23% debt.
Note that the effective equity/debt split for the remaining draws (28.77% / 71.23%) differs from the overall capital stack ratio (35% / 65%) because the initial equity-first tranche front-loads equity. This is a standard feature of the hybrid approach and will need to be clearly documented in both the Construction Loan Agreement draw mechanics provisions and the Equity Contribution Agreement to avoid confusion during the monthly draw process. We will work with Redmond & Calloway to confirm the precise methodology for calculating the equity contribution requirement for each draw period.
D. Conditions Precedent to Each Draw
Each draw request submitted by the Borrower to Summit National Bank, N.A. must be accompanied by the following documentation:
(i) Architect/Engineer Certification of Work in Place — A certification from the Project architect or engineer of record confirming the percentage of completion of the work for which the draw is being requested and that the work has been performed in substantial conformance with the approved plans and specifications.
(ii) Title Date-Down Endorsement — A title date-down endorsement from Fidelitas Title & Escrow, Inc. / Sovereign Title Insurance Company confirming that no new liens, encumbrances, or title exceptions have been recorded against the Project since the last endorsement (or since the initial title policy date, for the first draw).
(iii) Lien Waiver Packages — Conditional and unconditional lien waivers from TMCG and all subcontractors and material suppliers for the current and prior draw periods, as applicable, in compliance with Virginia lien waiver requirements.
(iv) Updated Budget and Cost-to-Complete Analysis — A current budget showing actual costs incurred to date, amounts drawn to date (from both equity and debt sources), and a cost-to-complete estimate demonstrating that the remaining available funds (undrawn equity plus undrawn loan proceeds plus contingency) are sufficient to complete the Project.
(v) Confirmation of No Default or Event of Default — A bring-down certification from the Borrower confirming that no default or event of default has occurred and is continuing under the Construction Loan Agreement, the Completion Guaranty, the Payment Guaranty, or any other loan document.
(vi) Evidence of Equity Contribution Compliance — Evidence that the Borrower's equity contribution obligations for the applicable draw period have been met, including bank statements or wire transfer confirmations demonstrating receipt of the required equity funds.
Construction Budget Monitoring. Kestrel Infrastructure Advisors, LLC (Diane Prescott, Principal) will serve as the owner's representative and will be responsible for reviewing and certifying the construction budget, monitoring cost-to-complete projections, and coordinating with the Borrower and the lending syndicate on draw request documentation. Kestrel's role is critical to ensuring that draw requests are processed efficiently and that the LTC covenant is monitored on a real-time basis.
Lender's Independent Construction Monitor. Summit's term sheet indicates that the lending syndicate will require the appointment of an independent construction monitor at the Borrower's expense. The identity and scope of the construction monitor's engagement will need to be approved by Summit, and we anticipate that the construction monitor's reports will be a required deliverable with each draw request. We recommend that IHDC and Kestrel proactively identify and propose a construction monitor acceptable to both the Borrower and the lending syndicate.
Draw Period. The Construction Loan has a draw period of 36 months from the date of the first advance, running approximately from November 2025 through November 2028. This provides adequate runway for the 24-month construction duration currently contemplated in the EPC Agreement, with an additional 12-month buffer for delays.
E. Interest Rate and Carrying Costs During Draw Period
The interest rate on the Construction Loan will be Term SOFR + 285 basis points, with a SOFR floor of 0.50%. Based on current market conditions (Term SOFR approximately 4.30% as of the date of this memorandum), the effective interest rate would be approximately 7.15% per annum. We note that the SOFR floor of 0.50% is not currently operative but would become relevant in a materially lower interest rate environment.
In addition to interest on drawn amounts, the Borrower will be responsible for an unused commitment fee of 0.50% per annum on undrawn commitments. During the early stages of the draw period, when a significant portion of the $390,000,000 facility remains undrawn, this fee will represent a meaningful carrying cost. For example, if only $50,000,000 has been drawn at the end of the first quarter, the unused commitment fee on the remaining $340,000,000 would be approximately $1,700,000 annualized, or approximately $425,000 per quarter.
Interest and fees during the construction period may be capitalized (i.e., added to the outstanding loan balance) or paid from the carry guaranty. The Carry Guaranty / Payment Guaranty from Ironhaven Data Centers LLC covers interest, fees, and carrying costs during the draw and construction period, providing the lending syndicate with recourse to IHDC for debt service during the pre-revenue phase of the Project.
The draw sequencing strategy has a direct and material impact on total interest costs during the construction period. Front-loading equity — as occurs naturally through the pre-closing land acquisition — means that a larger portion of early-stage Project costs are funded from equity rather than debt, thereby reducing the outstanding loan balance in the early months and, consequently, reducing cumulative interest charges. By contrast, a pure pro-rata approach would result in higher loan draws in the early months and correspondingly higher cumulative interest charges over the full draw period. We estimate that the hybrid approach described in this memorandum — in which approximately $82,000,000 of equity is deployed before the first loan draw — will result in interest savings of approximately $2.5 million to $3.5 million over the construction period compared to a hypothetical pure pro-rata approach, depending on the actual pace of draw requests and prevailing SOFR rates.
F. Arrangement Fee
The lending syndicate will charge an arrangement fee of 1.00% of the total facility commitment, calculated as follows:
$390,000,000 × 1.00% = $3,900,000
The arrangement fee is due and payable at the construction loan closing, currently targeted for October 15, 2025. This fee will be funded from equity or treated as a soft cost within the $14,200,000 entitlements and soft costs budget line. We recommend that the arrangement fee be allocated to the soft costs budget line to ensure proper accounting treatment and to maintain consistency with the Project budget approved by the lending syndicate. The arrangement fee is a one-time, non-refundable payment and does not reduce the available commitment under the Construction Loan facility.
IV. Equity Contribution Agreement — Key Provisions
A. Commitment Amount and Source
The total equity commitment for the Stonebridge Data Center Campus is $210,000,000, to be sourced from Ridgeline Capital Partners Fund IV, LP. As noted above, Ridgeline Fund IV has a total committed capital base of approximately $3.8 billion, and the $210,000,000 commitment to this Project represents approximately 5.5% of total fund commitments. The Equity Contribution Agreement will govern the terms under which IHDC (on behalf of the Borrower) may call capital from Ridgeline Fund IV (through the intermediate entity chain) and the obligations of Ridgeline Fund IV to fund such capital calls.
Prior to the execution of the Construction Loan Agreement, we anticipate that Summit National Bank will require a side letter from Ridgeline Fund IV delivered directly to the lending syndicate, confirming (a) the total available committed but uncalled capital of Ridgeline Fund IV, (b) the net worth and financial capacity of Ridgeline Fund IV to fund the $210,000,000 equity commitment, (c) the absence of any side letters or other arrangements that would limit or subordinate the Stonebridge commitment relative to other fund commitments, and (d) compliance with the change of control provisions described in Section VI below. The form of this side letter will need to be negotiated with Redmond & Calloway LLP and is likely to be a condition precedent to the construction loan closing.
We recommend that IHDC request from Ridgeline Fund IV's counsel (or directly from Julian Hargrove) a current summary of Ridgeline Fund IV's unfunded commitment capacity and any contractual limitations on capital calls (such as investment pacing limitations, concentration limits, or side letter provisions that could affect the timing or amount of capital calls for the Stonebridge investment).
B. Capital Call Mechanics
Capital calls will be issued by IHDC (Priya Dasgupta, CFO) to Ridgeline Fund IV through RCP Digital Holdings LLC. The capital call process must be coordinated with the Construction Loan draw timeline to ensure that equity funds are available in the Borrower's accounts at the time each draw request is submitted to Summit.
Typical capital call notice periods for institutional private equity funds range from 10 to 15 business days advance notice. The Construction Loan draw process typically allows 5 to 10 business days for lender processing of each draw request (including review of draw documentation, construction monitor sign-off, and internal credit approvals). These two timelines must be carefully aligned to avoid a scenario in which a draw request is submitted to Summit before the corresponding equity capital call has been funded.
Recommendation: We recommend establishing a 15-business-day advance capital call notice period in the Equity Contribution Agreement, with draw requests submitted to Summit concurrently with the issuance of capital call notices to Ridgeline Fund IV. Under this framework, the capital call would be issued on approximately Day 1 of the monthly draw cycle, the draw request would be submitted to Summit on the same date, equity funds would be received from Ridgeline Fund IV by approximately Day 15, and Summit would process the draw request and advance loan proceeds by approximately Day 10–15. This sequencing ensures that equity funds are on deposit in the Borrower's accounts at or before the time the lender completes its review and is ready to advance loan proceeds.
We note that this sequencing requires discipline in the monthly budgeting and draw preparation process. Kestrel Infrastructure Advisors, as owner's representative, will play a critical role in preparing the monthly draw package sufficiently in advance to allow IHDC to issue timely capital call notices.
Management Incentive Pool Co-Investment. As noted in Section II.B, the Ironhaven Management Incentive Pool LLC holds an 8% equity interest in IHDC. It must be confirmed whether the profits-interest holders in the incentive pool have co-investment obligations — i.e., whether they are required to contribute capital proportionate to their 8% interest alongside Ridgeline Fund IV's capital calls — or whether Ridgeline Fund IV funds 100% of contributed capital, with the incentive pool's 8% interest representing a pure carried interest or profits allocation. This distinction has implications for both the Equity Contribution Agreement and the Borrower's Operating Agreement. If the incentive pool holders are not required to co-invest, the Equity Contribution Agreement should reflect that Ridgeline Fund IV is the sole source of the $210,000,000 equity commitment. If co-investment is required, separate capital call mechanics for the incentive pool participants may need to be established.
C. Failure to Fund Provisions
The Equity Contribution Agreement must address default remedies in the event that Ridgeline Fund IV fails to timely fund a capital call. This is a critical provision because a failure to fund equity has cascading consequences for the Construction Loan:
• Failure to Satisfy Conditions Precedent: Each draw request under the Construction Loan requires evidence that the Borrower's equity contribution obligations for that draw period have been met. If equity funds are not available when the draw request is submitted, the lender will decline to advance loan proceeds, potentially halting construction and causing delay-related claims by TMCG under the EPC Agreement.
• LTC Covenant Breach: If equity is not contributed on schedule, the ratio of drawn debt to total costs could exceed 65%, triggering a covenant violation under the Construction Loan Agreement.
• Cross-Default Risk: A failure to fund equity that results in a default under the Construction Loan Agreement would constitute a cross-default under the Completion Guaranty and Payment Guaranty, potentially accelerating the entire loan and exposing IHDC (and, indirectly, Ridgeline Fund IV) to significant liability.
Recommendation: We recommend negotiating a 5-business-day cure period in the Equity Contribution Agreement before any failure to fund triggers a notification to the lending syndicate. This cure period provides a brief window for Ridgeline Fund IV to remedy a delayed capital call without immediately escalating the matter to the lender level. However, we note that the cure period must be carefully coordinated with the draw request timeline to ensure that a 5-business-day delay in equity funding does not cause a corresponding delay in the lender's advance.
The Completion Guaranty from IHDC serves as a backstop for project completion in the event of an equity shortfall. Under the Completion Guaranty, IHDC will guarantee to the lending syndicate that the Project will be completed in accordance with the approved plans and budget, including by funding any equity shortfall not covered by Ridgeline Fund IV's capital contributions. We will need to confirm that the Completion Guaranty is drafted to cover equity shortfall scenarios and that IHDC has sufficient resources (or recourse to Ridgeline Fund IV) to perform under the guaranty if called upon.
D. Lender Benefit / Third-Party Beneficiary Rights
Summit National Bank and the syndicate lenders will almost certainly require either third-party beneficiary status under the Equity Contribution Agreement or a direct equity commitment letter from Ridgeline Fund IV. The purpose of this requirement is to give the lending syndicate the ability to enforce the equity commitment directly against Ridgeline Fund IV, rather than relying solely on IHDC's contractual rights under the Equity Contribution Agreement.
There are two principal approaches:
(a) Third-Party Beneficiary Clause: The Equity Contribution Agreement includes an express provision designating the lending syndicate (or Summit as Administrative Agent) as a third-party beneficiary of Ridgeline Fund IV's commitment to fund capital calls. This approach is administratively simpler but may raise issues regarding the scope of lender enforcement rights and the interplay with the fund's limited partnership agreement.
(b) Separate Side Letter / Direct Equity Commitment Letter: Ridgeline Fund IV delivers a separate letter agreement directly to Summit, in which it confirms its equity commitment, makes representations regarding its financial capacity, and covenants to fund capital calls in accordance with the Equity Contribution Agreement. This approach provides a cleaner enforcement mechanism for the lender and is the more common structure in institutional construction financings.
We anticipate that Summit (through Redmond & Calloway) will require the separate side letter approach. We will coordinate with Ridgeline Fund IV's counsel and Julian Hargrove to prepare the appropriate documentation.
Additionally, the Pledge Agreement — under which IHDC will pledge 100% of its membership interests in Stonebridge Campus Holdings LLC to Summit as Administrative Agent as collateral for the Construction Loan — must be coordinated with the Equity Contribution Agreement to ensure that the lender's security interest in the Borrower's equity is not impaired by any provisions of the Equity Contribution Agreement or the Borrower's Operating Agreement. We will review the Pledge Agreement and the Borrower's Operating Agreement in tandem to confirm consistency.
V. Recommended Draw Sequencing Schedule
A. Pre-Closing Equity Deployment (Land Acquisition Phase)
The first significant equity deployment will occur during the land acquisition phase, which is currently targeted for completion on September 15, 2025 — approximately one month before the construction loan closing date of October 15, 2025. Because the Construction Loan facility will not yet be available at the time of land acquisition, the entire $77,900,000 land cost must be funded from equity.
The total land cost of $77,900,000 (Stonebridge Parcel: $58,500,000 + Meridian Parcel: $19,400,000) is composed of earnest money deposits already funded from IHDC operating capital, plus the balance payable at closing:
Earnest Money Deposits:
• Stonebridge Parcel: $2,925,000 (5% of $58,500,000), paid in two tranches:
• First tranche of $1,462,500 deposited at PSA execution on April 15, 2025.
• Second tranche of $1,462,500 deposited at due diligence expiration on July 14, 2025.
• Meridian Parcel: $970,000 (5% of $19,400,000), deposited at PSA execution on April 22, 2025.
• Total earnest money deposits: $3,895,000.
Remaining Land Cost at Closing:
$77,900,000 − $3,895,000 = $74,005,000, payable at closing on September 15, 2025.
In addition to land acquisition costs, IHDC has incurred and will continue to incur pre-closing entitlement, consultant, and legal costs from the matter opening date (March 12, 2025) through the construction loan closing date. These costs — including architectural and engineering design fees, environmental consulting (Pendleton Environmental Associates), zoning and land use counsel, title and survey costs, and our legal fees — are estimated at approximately $3,000,000 to $5,000,000 and will be funded entirely from equity.
Accordingly, the total estimated equity deployed before the construction loan closing is:
~$77,900,000 (land acquisition) + ~$4,000,000 (soft costs) ≈ $81,900,000
This amount significantly exceeds the $52,500,000 minimum equity condition required by the Construction Loan Agreement, thereby satisfying the lender's condition precedent well in advance of the first draw request. This is a favorable outcome from a deal structuring perspective, as it eliminates the need for a separate, dedicated equity "pre-funding" event and naturally aligns the equity deployment schedule with the Project's actual expenditure timeline.
We note, however, that the $81,900,000 in pre-closing equity represents approximately 39% of the total $210,000,000 equity commitment, which means that a disproportionate share of equity is deployed before the Construction Loan facility is available. This increases the equity J-curve for Ridgeline Fund IV during the pre-construction phase. We recommend discussing this dynamic with Julian Hargrove to confirm that Ridgeline Fund IV's capital call schedule and internal liquidity management can accommodate the pre-closing equity deployment.
B. Construction Loan Closing (October 15, 2025)
At the construction loan closing, currently targeted for October 15, 2025, the following milestones should be achieved:
• Total equity contributed to date: Approximately $82,000,000 (consisting of $77,900,000 for land acquisition, $3,895,000 in earnest money deposits previously funded, and approximately $4,000,000 in pre-development soft costs). This amount exceeds the 25% minimum equity requirement of $52,500,000 by approximately $29,500,000, providing substantial initial headroom on the LTC covenant.
• Arrangement fee payment: $3,900,000 payable to Summit National Bank, N.A. at closing.
• Construction Loan facility available for draws: Upon satisfaction of all conditions precedent to the initial advance (including delivery of the equity contribution certification, title insurance policy, survey, environmental reports, organizational documents, legal opinions, and all other closing deliverables), the $390,000,000 Construction Loan facility will become available for draw requests.
Following the construction loan closing, the remaining capital to be deployed is:
• Remaining equity: $210,000,000 − ~$82,000,000 = ~$128,000,000
• Remaining debt: $390,000,000 (no debt drawn at closing)
• Total remaining to fund: ~$128,000,000 + $390,000,000 = ~$518,000,000
During the construction period, the remaining equity and debt will be drawn pro rata based on the methodology described in Section III.C above, with equity representing approximately 24.7% and debt representing approximately 75.3% of each subsequent draw (reflecting the fact that the initial equity-first tranche has already been contributed, skewing the remaining draws toward a higher debt percentage). However, as noted, the overall LTC ratio at full deployment remains 65.0%.
C. Construction Period Draw Schedule (November 2025 — November 2027)
The Notice to Proceed ("NTP") under the EPC Agreement with Titan-McAllister Construction Group is currently targeted for November 1, 2025, approximately two weeks after the construction loan closing. The EPC Agreement contemplates a 24-month construction duration from NTP through Substantial Completion of all four data center buildings, with Building A targeted for Substantial Completion by August 1, 2027 and Buildings B through D targeted for Substantial Completion by November 1, 2027.
Draw Cycle. We recommend establishing a monthly draw cycle aligned with TMCG's monthly application for payment under the EPC Agreement. TMCG will submit its monthly pay application to Kestrel Infrastructure Advisors for review and approval, and the approved amount will form the basis for the Borrower's monthly draw request to Summit. The monthly draw request will include both the EPC hard cost component and any other Project costs incurred during the applicable month (e.g., power infrastructure costs, consultant fees, insurance premiums, and other soft costs).
Pro-Rata Equity/Debt Split. Each monthly draw will be funded on a pro-rata basis, with equity and debt funding their respective shares of the approved monthly costs. After the pre-closing equity tranche has been accounted for, the effective split for each remaining draw period will be approximately 24.7% equity / 75.3% debt, although the exact percentages may vary slightly from month to month depending on the mix of costs incurred and the cumulative LTC ratio.
Illustrative Monthly Draw Schedule. The following table provides an illustrative overview of the expected draw cadence during the construction period. Actual amounts will vary based on construction progress and TMCG's monthly pay applications:
Note: This table is illustrative only and reflects estimated costs based on the current Project budget and construction schedule. Actual draw amounts will be determined based on approved monthly pay applications and actual costs incurred. The cumulative LTC ratio is calculated as cumulative debt drawn divided by cumulative total costs funded (equity + debt).
Retainage. The EPC Agreement provides for retainage of 10% of each monthly progress payment until the Project reaches 50% completion, at which point retainage is reduced to 5% for subsequent progress payments. Retainage is held by the Borrower (or deposited into a segregated retainage escrow account) and is not released to TMCG until Substantial Completion of each building. From a draw perspective, retainage does not reduce the amount of the monthly draw request — the full amount of the approved pay application is drawn from both equity and debt sources, with the retainage portion held in the Borrower's retainage account rather than disbursed to TMCG.
Power Infrastructure Costs. The $61,000,000 power infrastructure budget will be drawn during the early-to-mid construction phase, with the $18,500,000 line extension contribution to Vantage Power Cooperative payable in accordance with the terms of the Line Extension Agreement. The substation energization target is June 1, 2027, and power infrastructure expenditures will be sequenced accordingly. We will coordinate with Leonard Castellano (EVP Development) and VPC to confirm the payment schedule for the line extension contribution and ensure that it is reflected in the monthly draw projections.
D. Contingency and Reserve Draws
The contingency and reserves budget of $34,900,000 is intended to cover cost overruns, approved change orders, and unforeseen conditions that arise during construction. Draws on the contingency budget will be subject to the following protocols:
(i) Contingency draws will be made only upon documented cost overruns or approved change orders, with supporting documentation submitted to the lending syndicate as part of the monthly draw package.
(ii) Each contingency draw must be tested against the 65% LTC covenant to ensure that the additional expenditure, when combined with cumulative debt draws, does not cause the LTC ratio to exceed 65%. If a contingency draw would cause a covenant breach, additional equity must be contributed by Ridgeline Fund IV to maintain compliance.
(iii) We recommend maintaining the contingency budget in a segregated sub-account at the Borrower level, separate from the operating disbursement account and the equity contribution account. This segregation provides transparency for the lending syndicate and facilitates covenant monitoring.
(iv) As a default assumption, contingency draws should be treated as equity-funded unless the lending syndicate expressly approves debt-funded contingency draws. This conservative approach ensures that the LTC covenant is not inadvertently breached by contingency expenditures.
If actual construction costs track at or below the GMP, a portion of the contingency budget may remain undrawn at Substantial Completion. Unused contingency may be available to offset post-completion lease-up costs or may be released to the Borrower, subject to the terms of the Construction Loan Agreement.
VI. Change of Control Considerations Affecting Equity Funding
The Construction Loan Agreement, as contemplated in the current term sheet, includes a mandatory prepayment trigger upon any change of control of the Borrower (Stonebridge Campus Holdings LLC) or the guarantor (Ironhaven Data Centers LLC). A "change of control" is defined as any transfer, assignment, or other disposition of equity interests in the Borrower or the guarantor that results in Ridgeline Capital Partners Fund IV, LP (directly or indirectly) ceasing to hold at least 51% of the equity interests in the Borrower or the guarantor.
This provision has several important implications for equity funding and potential future restructuring:
(a) Intermediate Entity Restructuring. Any restructuring of the equity contribution chain — specifically, the Ridgeline Fund IV → RCP Digital Holdings LLC → IHDC → Stonebridge Campus Holdings LLC chain — during the construction period could trigger the mandatory prepayment provision if the restructuring results in Ridgeline Fund IV ceasing to hold at least 51% indirect ownership of the Borrower. Even administrative or tax-driven restructurings (such as the insertion of an additional intermediate entity) should be reviewed against the change of control definition before implementation.
(b) Co-Investor Admission. If Ridgeline Fund IV seeks to bring in co-investors or sell down a portion of its interest in the Project during the construction period, careful analysis will be required to ensure that Ridgeline Fund IV retains at least 51% indirect ownership of the Borrower. For example, if Ridgeline Fund IV currently holds 92% of IHDC through RCP Digital Holdings LLC, it could potentially sell up to 41 percentage points (reducing its interest to 51%) without triggering the change of control provision. However, this analysis must account for the interaction between the ownership percentages at each level of the entity chain and the overall indirect ownership calculation.
(c) Management Incentive Pool. The 8% interest held by Ironhaven Management Incentive Pool LLC must be monitored to ensure that any changes to the incentive pool structure — such as additional issuances of profits interests, conversion of profits interests to capital interests, or admission of new incentive pool participants — do not inadvertently dilute Ridgeline Fund IV's indirect ownership below the 51% threshold.
We also note that the EPC Agreement with Titan-McAllister Construction Group contains a separate change of control provision. Under Section 14.3 of the EPC Agreement, TMCG has a consent right (not to be unreasonably withheld, conditioned, or delayed) with respect to any change of control of the "project owner entity" (defined as Stonebridge Campus Holdings LLC). While this provision is less restrictive than the Construction Loan's mandatory prepayment trigger — in that it requires only TMCG's consent rather than triggering an automatic mandatory prepayment — it nonetheless represents an additional hurdle that must be cleared before any equity restructuring.
Recommendation: Any equity restructuring during the construction period should be pre-cleared with both Summit (and the syndicate lenders, through Redmond & Calloway LLP) and TMCG before implementation, to avoid inadvertently triggering a mandatory prepayment event or requiring contractor consent. We recommend that IHDC and Ridgeline Fund IV adopt a moratorium on equity restructuring activity during the construction period absent compelling strategic or tax reasons, and that any proposed restructuring be reviewed by Calderwood & Harkness before execution.
VII. Maturity, Extension, and Stabilization Considerations
A. Loan Maturity and Extension
The Construction Loan has an initial maturity date of 48 months from the construction loan closing date. Based on the target closing date of October 15, 2025, the initial maturity would be approximately October 15, 2029.
The term sheet provides for one 12-month extension option, which would extend the maturity to approximately October 15, 2030. The conditions for exercising the extension option are to be negotiated but are expected to include, at minimum: (a) satisfaction of a minimum debt service coverage ratio ("DSCR") test at the time of extension, (b) no default or event of default under the loan documents, (c) payment of an extension fee (amount to be negotiated, typically 0.25%–0.50% of the outstanding balance), and (d) delivery of updated financial projections and tenant lease status reports.
The draw period is 36 months from the first advance, running from approximately November 2025 through November 2028. No new advances may be made after the expiration of the draw period.
The current construction schedule targets Substantial Completion of Building A by August 1, 2027 and Substantial Completion of Buildings B through D by November 1, 2027. Assuming construction is completed on schedule, Substantial Completion will occur approximately 24 months after NTP — well within the 36-month draw period. This provides a meaningful buffer for construction delays without jeopardizing the availability of remaining loan proceeds.
Following Substantial Completion, there will be a post-completion / lease-up period of approximately 24 months (from November 2027 to October 2029) before the initial maturity date. This period is critical for achieving stabilization and either refinancing the Construction Loan with permanent financing or exercising the extension option.
B. DSCR at Stabilization
The Construction Loan Agreement will include a minimum DSCR covenant at stabilization of ≥ 1.25x. The stabilization target is Q2 2028 (approximately six months after Substantial Completion), defined as the date on which the Project has achieved an occupancy level of at least 85% leased.
Once the Project achieves stabilization, IHDC may seek to refinance the Construction Loan with a permanent financing facility or a term loan at more favorable terms, reflecting the reduced risk profile of a stabilized, income-producing data center asset. Equity funding mechanics should account for the possibility that additional equity may be required during the post-completion period if lease-up is slower than projected and the DSCR covenant cannot be satisfied with projected rental income alone. In that scenario, Ridgeline Fund IV may need to fund an additional equity contribution (beyond the $210,000,000 committed amount) to support the Borrower's compliance with the DSCR covenant.
We recommend that the Equity Contribution Agreement include a provision addressing the potential need for post-construction equity contributions to support DSCR compliance, including the terms under which such contributions would be called and funded.
C. Estimated Annual Carrying Costs Post-Construction
Once the data center campus is operational, the Borrower will incur significant ongoing carrying costs that will factor into the DSCR calculation and must be reflected in the tenant lease structures (typically as pass-through charges). Key carrying costs include:
• Utility Demand Charges: Estimated annual utility demand charges at full load capacity: 120,000 kW × $8.42/kW/month × 12 months = $12,124,800 per year. These charges are based on VPC's current tariff schedule and are subject to adjustment upon rate case proceedings.
• Loudoun County Equipment Tax: The Loudoun County, Virginia personal property tax on computer equipment and data processing equipment is levied at a rate of $1.25 per $100 of assessed value on IT equipment. The actual tax burden will depend on the assessed value of tenant-owned equipment deployed at the facility, and the tax obligation will typically be passed through to tenants under the data center lease agreements.
These ongoing costs, together with real property taxes, insurance, management fees, and capital reserve contributions, will form the denominator of the DSCR calculation and must be carefully modeled in the Project's financial projections. We will coordinate with Priya Dasgupta and Fielding & Associates to ensure that the DSCR projections submitted to the lending syndicate accurately reflect these carrying costs.
VIII. Tax and Accounting Coordination
Equity contributions to Stonebridge Campus Holdings LLC will be structured as capital contributions under the Borrower's Operating Agreement, with corresponding adjustments to the capital accounts and tax basis of the contributing member (IHDC). It is essential to maintain accurate tax basis tracking for Ridgeline Fund IV's investment, including the allocation of pre-development costs, capitalized interest during construction, and the tax treatment of the arrangement fee and other transactional costs.
We recommend coordination with Fielding & Associates, CPAs (Robert Fielding, CPA), who serve as the tax advisor to IHDC, on the following matters:
(i) Treatment of Pre-Development Costs: Costs incurred prior to the commencement of construction — including legal fees, architectural and engineering design costs, environmental consulting, and earnest money deposits — must be properly characterized for tax purposes. Under Section 263A of the Internal Revenue Code, certain pre-development costs may be required to be capitalized and allocated to the cost basis of the constructed improvements rather than deducted currently.
(ii) Capitalization of Interest During Construction: Interest and fees incurred on the Construction Loan during the construction period must be capitalized under Section 263A and added to the depreciable basis of the data center buildings. The timing and amount of equity contributions affect the total interest capitalized, because front-loading equity reduces the outstanding loan balance and, consequently, the amount of interest incurred during the construction period.
(iii) Allocation of Soft Costs: The $14,200,000 soft costs budget includes items that may be allocated to different depreciable asset classes or may be deductible as current expenses. Proper allocation requires coordination between the tax advisor and the project accounting team.
Cost Segregation Study. A cost segregation study should be commissioned upon the commencement of construction to identify components of the data center buildings that may be reclassified from 39-year nonresidential real property to shorter depreciable lives (e.g., 5-year, 7-year, or 15-year property). Based on industry benchmarks for data center construction, we estimate that approximately $45,000,000 of the hard construction costs may be reclassified to shorter depreciable lives, resulting in significant accelerated depreciation deductions for Ridgeline Fund IV. The timing of equity contributions affects the tax basis computations underlying the cost segregation analysis, as the total capitalized cost of the improvements (including capitalized interest and allocated soft costs) forms the basis for the depreciation schedule.
Virginia Data Center Sales Tax Exemption. The Commonwealth of Virginia provides a sales and use tax exemption for data center equipment under Va. Code § 58.1-609.3(18). To qualify for the exemption, the Project must demonstrate a minimum capital investment of $150,000,000 over a five-year period and the creation of at least 50 new jobs (with a minimum compensation threshold). The equity funding timeline must support the demonstration of capital investment thresholds within the required measurement period. Based on the current Project budget and construction schedule, the $600,000,000 total investment will far exceed the $150,000,000 minimum, and we do not anticipate difficulty satisfying this condition. However, the timing of expenditures must be documented to support the application for the exemption.
The estimated sales tax savings from the exemption are substantial. Assuming approximately $300,000,000 of qualifying equipment purchases at Virginia's combined state and local sales tax rate of 5.3%, the estimated savings are approximately $15,900,000 over the life of the Project. We recommend that the application for the sales tax exemption be filed promptly upon commencement of construction, and that IHDC maintain detailed records of qualifying expenditures to support future audits by the Virginia Department of Taxation.
We will coordinate with Sylvia Hartwell (Calderwood & Harkness, Tax Department) and Fielding & Associates on these tax and accounting matters and will provide a separate memorandum addressing the tax structuring considerations in greater detail.
IX. Risk Factors and Mitigation Strategies
A. Construction Cost Overrun Risk
The GMP of $412,000,000 established under the EPC Agreement with Titan-McAllister Construction Group provides a contractual ceiling on hard construction costs, subject to certain carve-outs. However, several categories of cost increases are not covered by the GMP and could require additional capital beyond the approved Project budget:
• Owner-Directed Changes: Changes to the scope, design, or specifications directed by the Borrower (or its tenants) that are not contemplated by the original contract documents will result in change orders that are additive to the GMP.
• Unforeseen Site Conditions: The Phase II Environmental Site Assessment prepared by Pendleton Environmental Associates identified potential residual pesticide contamination in the Stonebridge Parcel's northwest quadrant, encompassing approximately 4.2 acres. While the current remediation cost estimate is within the contingency budget, further investigation may reveal more extensive contamination requiring additional remediation expenditures.
• Force Majeure Events: The EPC Agreement includes a force majeure provision that may entitle TMCG to extensions of time and, in certain limited circumstances, additional compensation for costs arising from events beyond the contractor's reasonable control (including severe weather, governmental actions, and supply chain disruptions).
The contingency budget of $34,900,000 provides a buffer of approximately 5.8% against total Project costs. This contingency level is consistent with industry standards for institutional data center development projects but may be insufficient to absorb a major cost overrun arising from unforeseen site conditions or significant scope changes.
If cost overruns exceed the contingency budget, additional equity will be required to maintain the LTC covenant at or below 65%. In that scenario, Ridgeline Fund IV would be called upon to fund additional capital beyond the $210,000,000 committed amount, or IHDC would be required to perform under the Completion Guaranty, which backstops any funding shortfall to ensure project completion. We recommend that the Equity Contribution Agreement include a mechanism for incremental capital calls in excess of the committed amount, subject to Ridgelin

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