PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT
This memorandum is protected by the attorney-client privilege and the work product doctrine. It is prepared in anticipation of litigation and for the purpose of providing legal advice to the client. It should not be disclosed to any third party without the prior written consent of Calderwood & Harkness LLP and the client.
CALDERWOOD & HARKNESS LLP Internal Memorandum
TO: Douglas Fairchild, Responsible Partner, Real Estate Practice Group
FROM: Cynthia Ho, Lead Associate, Real Estate Practice Group
DATE: August 1, 2025
RE: Change of Control Provisions Across Loan Documents — Coordination with EPC Agreement and Large Load Service Agreement — Stonebridge Data Center Campus
MATTER NO.: 1043-00002
CLIENT: Ironhaven Data Centers LLC
I. Executive Summary
The purpose of this memorandum is to analyze and cross-reference the change of control provisions across the three principal project agreements governing the Stonebridge Data Center Campus development — the Construction Loan Agreement, the Engineering, Procurement, and Construction ("EPC") Agreement, and the Large Load Service Agreement ("LLSA") — in order to identify definitional inconsistencies, potential conflicts, and operational risks arising from the interaction of those provisions, and to recommend harmonization strategies for discussion with the client and negotiation with the relevant counterparties.
The Stonebridge Data Center Campus (the "Project" or the "Campus") is a $600,000,000 ground-up data center development located in Loudoun County, Virginia, comprising approximately 96 MW of critical IT load distributed across four purpose-built data center buildings on an 81.4-acre campus. The campus footprint is composed of the 62.0-acre Stonebridge Parcel, which will house the data center buildings, central utility plant, and structured parking, and the 19.4-acre Meridian Parcel, which will accommodate the dedicated 230kV/34.5kV electrical substation and related infrastructure. Together, the two parcels form the entirety of the Project site.
The capital stack for the Project consists of (a) $210,000,000 in equity (approximately 35% of total project cost), contributed by Ridgeline Capital Partners Fund IV, LP through the ownership chain described in detail in Section II below — specifically, Ridgeline Fund IV → RCP Digital Holdings LLC → Ironhaven Data Centers LLC → Stonebridge Campus Holdings LLC — and (b) $390,000,000 in senior secured construction debt (approximately 65% of total project cost), to be extended by a syndicate of three institutional lenders led by Summit National Bank, N.A. as Administrative Agent. The borrower entity, Stonebridge Campus Holdings LLC, is a to-be-formed single-purpose Virginia limited liability company that will be wholly owned by Ironhaven Data Centers LLC ("IHDC") and will hold title to both campus parcels.
Each of the three principal agreements — the Construction Loan Agreement, the EPC Agreement, and the LLSA — contains change of control provisions. However, these provisions differ materially in at least five critical dimensions: (a) the definition of what constitutes a "change of control"; (b) the triggering ownership threshold; (c) the parties whose ownership or control is tested; (d) the consequences of a triggering event; and (e) the availability of cure, consent, or waiver mechanisms. As described in detail in this memorandum, these differences create a meaningful risk of conflicting obligations and, more critically, a risk that an inadvertent or permissible transfer under one agreement could trigger acceleration, termination, or default cascading across the entire project documentation suite — potentially jeopardizing the full $600,000,000 development.
Based on the analysis set forth herein, I recommend the following harmonization strategy:
• Definitional alignment: Negotiate, to the extent feasible, a uniform definition of "change of control" across all three agreements, or at minimum ensure that the EPC Agreement and LLSA definitions are no more restrictive than the Construction Loan Agreement definition.
• Reciprocal notice provisions: Require cross-notification among counterparties when a change of control is triggered, consented to, or waived under any one agreement.
• Threshold alignment: Align the triggering thresholds across agreements to ensure that a transfer permitted under the Construction Loan Agreement does not inadvertently constitute a trigger under the EPC Agreement or LLSA.
• Pre-clearance and standing consents: Obtain standing consents from Titan-McAllister Construction Group, LLC ("TMCG") and Vantage Power Cooperative ("VPC") for any future sponsor-level transfers that comply with the Construction Loan Agreement's change of control covenant — specifically, transfers where Ridgeline Capital Partners Fund IV, LP retains at least 51% indirect ownership of the Borrower.
• Lender step-in protections: Confirm that lender enforcement of collateral assignments is expressly carved out from the change of control definitions in the EPC Agreement and LLSA.
These recommendations and the supporting analysis are discussed at length below. This memorandum should be reviewed and discussed with the client team — specifically Marcus Thorne (CEO, IHDC), Priya Dasgupta (CFO, IHDC), and Julian Hargrove (Managing Partner, Ridgeline Capital Management LLC) — before we advance any proposed revisions to counterparties.
II. Background: Project Ownership Structure
An accurate understanding of the ownership chain is essential to the change of control analysis, because the three agreements test ownership at different levels of the organizational structure. The relevant entities, their jurisdictions of formation, and their roles in the Project are described below.
A. Ridgeline Capital Partners Fund IV, LP
Ridgeline Capital Partners Fund IV, LP ("Ridgeline Fund IV" or the "Fund") is a Delaware limited partnership with approximately $3.8 billion in committed capital. The Fund is managed by its general partner, Ridgeline Capital Management LLC, a Delaware limited liability company. Julian Hargrove serves as Managing Partner of Ridgeline Capital Management LLC and has ultimate decision-making authority over investment and disposition decisions at the Fund level, subject to the Fund's limited partnership agreement and advisory committee approval requirements for transactions exceeding specified thresholds. Ridgeline Fund IV is the ultimate equity sponsor of the Project, and its ownership position is the primary focus of the Construction Loan Agreement's change of control analysis.
Ridgeline Fund IV holds a 92% equity interest in IHDC through its wholly owned intermediate holding company, RCP Digital Holdings LLC, a Delaware limited liability company formed for the purpose of holding the Fund's data center platform investments. RCP Digital Holdings LLC has no independent operations, employees, or assets other than its membership interests in IHDC.
B. Ironhaven Management Incentive Pool LLC
The remaining 8% equity interest in IHDC is held by Ironhaven Management Incentive Pool LLC ("IMIP LLC"), a Delaware limited liability company through which IHDC management (principally CEO Marcus Thorne, CFO Priya Dasgupta, and EVP Development Leonard Castellano) holds carried interest and co-investment positions in the IHDC platform. The IMIP LLC interests are subject to customary vesting schedules, forfeiture provisions, and transfer restrictions, and are subordinated to the Fund's preferred return under the IHDC operating agreement. These management interests, while relatively small in percentage terms, are relevant to the change of control analysis insofar as transfers within the management incentive pool could theoretically interact with certain change of control definitions if not properly excluded.
C. Ironhaven Data Centers LLC
Ironhaven Data Centers LLC ("IHDC") is a Delaware limited liability company headquartered at 44680 Prentice Drive, Suite 200, Ashburn, Virginia 20147. IHDC serves as the portfolio company and development platform for Ridgeline Fund IV's data center investments in the Northern Virginia market. IHDC's executive team comprises CEO Marcus Thorne, CFO Priya Dasgupta, and EVP Development Leonard Castellano. IHDC currently operates three existing data center facilities in Northern Virginia with a combined critical IT load of approximately 42 MW. The Stonebridge Campus will represent a significant expansion of IHDC's operating portfolio, more than tripling the platform's total capacity upon full build-out.
IHDC is the sole member of the Borrower entity (Stonebridge Campus Holdings LLC), the guarantor under the Completion Guaranty and Carry Guaranty, and the party primarily responsible for development oversight, construction management, and lease-up of the Campus.
D. Stonebridge Campus Holdings LLC
Stonebridge Campus Holdings LLC (the "Borrower") is a to-be-formed single-purpose Virginia limited liability company that will serve as the project-level entity for the Stonebridge Data Center Campus. The Borrower will be wholly owned by IHDC and will hold title to both the Stonebridge Parcel and the Meridian Parcel. It will be the counterparty under each of the three principal agreements at issue in this memorandum: the Construction Loan Agreement (as Borrower), the EPC Agreement (as Owner), and the LLSA (as Customer). Consistent with customary construction lending requirements, the Borrower's operating agreement will contain single-purpose entity covenants, including restrictions on indebtedness, activities, and organizational changes.
E. Ownership Chain Summary
For purposes of the change of control analysis, the ownership chain is as follows:
Ridgeline Capital Partners Fund IV, LP (Delaware LP)
↓ 92% (through RCP Digital Holdings LLC, Delaware LLC)
Ironhaven Data Centers LLC (Delaware LLC)
↓ 100%
Stonebridge Campus Holdings LLC (to-be-formed Virginia LLC — the "Borrower")
The 8% management interest held through IMIP LLC is outside the primary ownership chain between the Fund and the Borrower, but is relevant to the analysis as noted in subsequent sections.
The Ridgeline Fund IV Investment ID for the Stonebridge Campus is RCP-IV-2025-DC-07.
III. Change of Control Provisions — Construction Loan Agreement
A. Relevant Agreement
The Construction Loan Agreement (the "Credit Agreement" or "Loan Agreement") is among Stonebridge Campus Holdings LLC, as Borrower, Summit National Bank, N.A., as Administrative Agent, and three institutional lenders, as follows:
The Loan Commitment Reference is CL-2025-VA-04418. Lender's counsel is Redmond & Calloway LLP, with Victor Redmond serving as lead partner on the engagement.
Key economic terms of the facility include the following:
• Interest Rate: Term SOFR plus 285 basis points, subject to a SOFR floor of 0.50%.
• Unused Commitment Fee: 0.50% per annum on undrawn commitments.
• Arrangement Fee: 1.00% of total facility ($3,900,000), payable at closing.
• Draw Period: 36 months from closing.
• Maturity: 48 months from closing, with one 12-month extension option (subject to satisfaction of extension conditions, including achievement of minimum leasing thresholds and DSCR tests).
• Loan-to-Cost Ratio: Not to exceed 65%.
• DSCR Requirement: Minimum 1.25x at stabilization (relevant to extension conditions and permanent financing take-out).
• Minimum Equity Contribution: $52,500,000 (representing 25% of the total $210,000,000 equity commitment) must be contributed by IHDC and funded into the Project before the first draw under the facility.
The Credit Agreement is currently in advanced draft form, with the most recent markup dated July 22, 2025. The parties are targeting an October 15, 2025 closing date.
B. Definition of "Change of Control"
The Credit Agreement defines "Change of Control" as follows (paraphrasing the current draft, as the final negotiated language is not yet settled):
"Change of Control" means any event, transaction, or series of related transactions (whether by merger, consolidation, transfer, issuance, or otherwise) as a result of which Ridgeline Capital Partners Fund IV, LP ceases to own, directly or indirectly, at least fifty-one percent (51%) of the aggregate equity interests (whether measured by economic interest, voting interest, or otherwise) in (a) the Borrower or (b) the Guarantor.
Several features of this definition are critical to the analysis:
First, the definition looks through the entire ownership chain. It is not limited to IHDC's direct ownership of the Borrower (which, absent a structural change, will remain at 100%). Rather, it tests the indirect ownership of the ultimate sponsor — Ridgeline Capital Partners Fund IV, LP — through however many intermediate entities may exist. Because Ridgeline Fund IV currently holds its interest in IHDC through RCP Digital Holdings LLC, a transfer at the RCP Digital Holdings LLC level (e.g., Ridgeline Fund IV selling all or a portion of its interest in RCP Digital Holdings to a third party) would be captured by this definition.
Second, the definition captures transfers at the Ridgeline Fund IV level itself, including transfers of limited partnership interests in the Fund by its limited partners, removal or replacement of the Fund's general partner (Ridgeline Capital Management LLC), or any restructuring of the Fund that results in the Fund ceasing to exist or to hold the requisite ownership interest.
Third, the 51% threshold is measured by reference to "aggregate equity interests (whether measured by economic interest, voting interest, or otherwise)." This broad formulation means that the threshold is tested across multiple dimensions of ownership — a party cannot avoid the trigger by retaining 51% of voting interests while transferring economic interests below the threshold, or vice versa.
Fourth, the definition tests ownership in both the Borrower and the Guarantor (IHDC). Because IHDC is the sole member of the Borrower, and because the Guarantor obligations under the Completion Guaranty and Carry Guaranty run from IHDC, a transfer that reduces Ridgeline Fund IV's indirect interest in IHDC below 51% would trigger the provision even if the Borrower's direct ownership structure remains unchanged.
C. Consequence of Triggering
The Credit Agreement treats a Change of Control as a mandatory prepayment event, not merely an Event of Default. Upon the occurrence of a Change of Control, the entire outstanding principal balance of the facility, together with all accrued and unpaid interest, fees (including any prepayment premium, if applicable), and other amounts owing under the Loan Documents, becomes immediately due and payable without notice, demand, or further action by the Administrative Agent or any Lender.
This is a critical distinction. Unlike an Event of Default, which typically requires a notice from the Administrative Agent and may be subject to cure periods (ranging from 5 to 30 days depending on the nature of the default), the mandatory prepayment trigger upon a Change of Control is automatic. There is no cure period. There is no mechanism within the Credit Agreement for the Borrower to seek a waiver or consent from the Required Lenders in advance of a contemplated transfer — short of a formal amendment to the Credit Agreement itself, which would require the affirmative vote of Lenders holding at least 66⅔% of the total commitments and, in certain circumstances, the consent of each Lender (unanimity requirement).
The practical consequence of this structure is severe: if a Change of Control occurs — whether voluntarily or involuntarily — the Borrower would be obligated to repay the entire outstanding balance of the construction loan immediately. During active construction, the outstanding balance could range from $50,000,000 (early draws) to the full $390,000,000 (approaching completion). In either scenario, the Borrower would almost certainly lack the liquidity to satisfy a mandatory prepayment obligation of this magnitude, making the Change of Control trigger functionally equivalent to an event of default leading to enforcement.
D. Collateral Implications
The obligations under the Credit Agreement are secured by a comprehensive collateral package, including:
• A first-priority deed of trust on both the Stonebridge Parcel and the Meridian Parcel, recorded in Loudoun County, Virginia;
• An assignment of leases and rents covering all current and future tenant leases at the Campus;
• A pledge of 100% of the membership interests in the Borrower (Stonebridge Campus Holdings LLC), granted by IHDC pursuant to a separate Pledge Agreement;
• A collateral assignment of the EPC Agreement and all architect, engineer, and consultant agreements;
• A collateral assignment of the LLSA;
• A collateral assignment of all permits, approvals, entitlements, and governmental authorizations related to the Project;
• A security interest in all personal property, equipment, and fixtures located on the Project site; and
• An assignment of insurance proceeds and condemnation awards.
If a mandatory prepayment trigger occurs and the Borrower is unable to satisfy its repayment obligation, the Administrative Agent (on behalf of the Lender syndicate) would have the right to enforce all elements of the collateral package. Of particular relevance to this memorandum, the lender's enforcement of the collateral assignments of the EPC Agreement and the LLSA could create cascading consequences under those agreements. If the change of control definitions in the EPC Agreement and LLSA do not include proper carve-outs for lender enforcement, TMCG and VPC could assert that the lender's assumption of the Borrower's contractual position — whether through foreclosure, UCC disposition, or other enforcement — itself constitutes a change of control under the EPC Agreement or LLSA, thereby entitling those counterparties to withhold consent, terminate, or assert other rights. This circular dynamic is the principal risk that this memorandum seeks to address.
E. Related Provisions
Several ancillary loan documents reinforce and interact with the Change of Control covenant:
Pledge Agreement. The Pledge Agreement, pursuant to which IHDC pledges 100% of its membership interests in the Borrower to Summit National Bank, N.A. as Administrative Agent, reinforces the Change of Control covenant by giving the lender a direct enforcement path at the Borrower equity level. Upon an Event of Default (including a mandatory prepayment trigger resulting from a Change of Control), the Administrative Agent may exercise remedies under the Pledge Agreement, including disposition of the pledged membership interests under Article 9 of the Uniform Commercial Code as enacted in Virginia and Delaware.
Completion Guaranty and Carry Guaranty. IHDC serves as Guarantor under both a Completion Guaranty (guaranteeing that the Project will be completed in accordance with the approved plans and specifications, on budget and on schedule) and a Carry Guaranty (guaranteeing payment of interest, taxes, insurance, and operating expenses during the construction period). The guaranteed obligations under both guaranties accelerate concurrently with the acceleration of the loan upon a Change of Control. Accordingly, a Change of Control would not only trigger repayment of the loan, but would also crystallize IHDC's guaranty obligations in full.
Side Letter from Ridgeline Fund IV. The current draft of the loan documentation includes a side letter from Ridgeline Capital Partners Fund IV, LP (addressed to Summit National Bank, N.A. as Administrative Agent) containing representations regarding the Fund's available committed capital, its intent to fund the full $210,000,000 equity commitment, and its agreement to comply with the Change of Control provisions of the Credit Agreement. This side letter, while helpful, does not currently extend to the Change of Control provisions in the EPC Agreement or LLSA — a gap that should be addressed as discussed in Section VII.H below.
F. Key Observations
Several observations regarding the Credit Agreement's Change of Control provision are worth highlighting for purposes of the cross-agreement harmonization analysis:
First, the 51% threshold is measured at the Ridgeline Fund IV level (ultimate sponsor), not at the IHDC level. This means that even if IHDC continues to be the 100% direct owner of the Borrower, and even if IHDC's management team remains unchanged, a disposition by Ridgeline Fund IV of its interest in RCP Digital Holdings LLC (which holds the Fund's 92% stake in IHDC) to a level below 51% would trigger mandatory prepayment of the entire $390,000,000 facility. As a practical matter, this means that fund-level portfolio decisions by Ridgeline — including partial dispositions, secondary market sales of fund interests by LPs, or even a wind-down of the Fund — could inadvertently trigger the covenant.
Second, the management incentive pool (the 8% held by IMIP LLC) is not relevant to the threshold calculation at the Ridgeline Fund IV level, because the definition tests ownership by the Fund, not by all equity holders in the aggregate. However, if the management incentive pool were expanded significantly (e.g., through new co-investment allocations or promote distributions) such that Ridgeline Fund IV's indirect interest in the Borrower fell below 51%, the Change of Control could be triggered even without any affirmative transfer by the Fund. This scenario is unlikely given the current 92%/8% split but should be monitored.
Third, the definition does not distinguish between voluntary transfers (e.g., a negotiated sale by the Fund) and involuntary transfers (e.g., a fund wind-down mandated by the limited partnership agreement, a regulatory action, or an LP-level transfer resulting from the bankruptcy of a limited partner). This creates exposure to events that are outside the Borrower's or IHDC's direct control.
IV. Change of Control Provisions — EPC Agreement
A. Relevant Agreement
The EPC Agreement is between Stonebridge Campus Holdings LLC (as "Owner") and Titan-McAllister Construction Group, LLC ("TMCG," as "Contractor"). TMCG is a nationally recognized design-build contractor with significant experience in data center construction in the Northern Virginia market. TMCG's key executives for the Project include Raymond Okafor, President, and Michelle Tran, Senior Vice President, Data Center Programs. Ms. Tran serves as the primary commercial contact for negotiation of the EPC Agreement.
The EPC Agreement is structured as a guaranteed maximum price ("GMP") contract with the following key parameters:
• GMP: $412,000,000.
• Scope: Design and construction of four data center buildings (Buildings A through D), each approximately 120,000 square feet of shell space and designed for 24 MW of critical IT load per building; a central utility plant; site civil work (grading, utilities, stormwater management); and structured parking.
• Total Gross Floor Area: Approximately 480,000 square feet.
• Cost Metrics: Approximately $858.33 per square foot of gross floor area; approximately $4,291,667 per MW of critical IT load.
• Construction Duration: 24 months from the issuance of a Notice to Proceed ("NTP"), with the target NTP date of November 1, 2025.
• Substantial Completion Milestones: Building A — August 1, 2027; Buildings B, C, and D — November 1, 2027.
• Liquidated Damages for Delay: $125,000 per calendar day per building, capped at 10% of the per-building GMP allocation. Assuming an equal allocation of the GMP across four buildings ($103,000,000 per building), the per-building liquidated damages cap is $10,300,000.
• Retainage: 10% of each progress payment until 50% completion of the work, reducing to 5% of each progress payment thereafter.
• Performance Bond: 100% of GMP ($412,000,000), issued by Great Basin Surety & Insurance Corp.
• Payment Bond: 100% of GMP ($412,000,000), issued by Great Basin Surety & Insurance Corp.
• Contractor Insurance: TMCG carries $150,000,000 per-occurrence commercial general liability coverage through Pinnacle Indemnity Insurance Co. and $50,000,000 builder's risk coverage through Great Basin Surety & Insurance Corp.
The EPC Agreement is currently in an advanced negotiation stage, with the parties targeting execution on or about October 20, 2025, five days after the anticipated construction loan closing.
B. Change of Control — Owner Side
The EPC Agreement contains a change of control provision applicable to the Owner entity (Stonebridge Campus Holdings LLC). Under this provision, TMCG has a right to consent — not to be unreasonably withheld, conditioned, or delayed — to any change of control of the project owner entity.
The precise definition and triggering threshold for "change of control" in the EPC Agreement context have not been finalized. Based on preliminary drafts and typical industry practice for data center EPC contracts, the definition is expected to track one of several formulations:
(a) Any transfer of "controlling" equity interests in the Owner entity;
(b) Any transfer resulting in any single party or group of related parties other than the current controlling party acquiring a "majority" (i.e., more than 50%) of the equity interests in the Owner; or
(c) Any change in the identity of the party that "controls" the Owner, with "control" defined by reference to the power to direct the management and policies of the entity.
The key issue for harmonization purposes is that the EPC Agreement's change of control definition may use a different threshold and test a different level of the ownership chain than the Construction Loan Agreement's definition. For example:
• If the EPC Agreement tests "controlling interest" in Stonebridge Campus Holdings LLC at the direct ownership level, a transfer at the Ridgeline Fund IV level would not trigger the EPC provision — because IHDC would continue to be the 100% direct owner of the Borrower. This would create a scenario where the loan's Change of Control is triggered (at the Fund level) but the EPC's is not.
• Conversely, if the EPC Agreement uses a broader definition that looks through the ownership chain to the "ultimate controlling party," the test could potentially be triggered at a lower threshold than the loan's 51% test — for example, if the EPC defines change of control as any change in the party that "controls" the Owner (without specifying a percentage threshold), a reduction of Ridgeline Fund IV's interest from 92% to 55% could be argued to constitute a change of control under the EPC (because the locus of practical control may shift) even though it does not trigger the loan covenant.
Until the EPC Agreement's change of control definition is finalized, the precise scope of the mismatch cannot be determined. However, the direction of the risk is clear: any definitional mismatch creates the possibility that a single transfer event will trigger consequences under one agreement but not the other, or trigger different consequences under each agreement simultaneously.
Consequences of a trigger. If TMCG's consent is required but not obtained prior to a change of control, the failure to obtain consent could constitute an Owner default under the EPC Agreement. Depending on the EPC Agreement's default and termination provisions, this could give TMCG the right to:
(a) Suspend performance of the work pending resolution;
(b) Terminate the EPC Agreement for Owner default; and/or
(c) Pursue damages, including lost profits on the remaining scope of work.
Any of these actions — even a temporary work suspension — would have severe consequences for the Project. A work stoppage during active construction of a $412,000,000 data center campus would result in schedule delays, cost overruns, disruption to the subcontractor workforce, and potential loss of the construction window for weather-sensitive activities (site civil, structural steel erection, roofing). Moreover, a default under the EPC Agreement would itself constitute a breach of the Borrower's covenants under the Construction Loan Agreement — specifically, the covenant to maintain the EPC contract in full force and effect — thereby triggering an independent Event of Default under the Credit Agreement and potentially accelerating the loan.
C. Change of Control — Contractor Side
The EPC Agreement also contains a change of control provision running in the other direction: the Owner has a termination right upon a change of control of TMCG (Titan-McAllister Construction Group, LLC). This provision protects the Owner and, by extension, the construction lenders against a mid-construction change in the contractor's management, financial backing, or technical capabilities — risks that are particularly acute in the context of a specialized data center construction project where TMCG was selected on the basis of its specific team, track record, and bonding capacity.
The definition of change of control on the contractor side is expected to focus on direct ownership and control of TMCG itself — i.e., any transfer of a controlling interest in TMCG, or any change in the management or operational control of TMCG. This provision is less directly relevant to the harmonization analysis (which is principally concerned with the Owner-side provisions), but it should be reviewed to confirm that it is reciprocal and provides adequate protection.
D. Key Observations
Several observations regarding the EPC Agreement's change of control provisions are pertinent to the harmonization analysis:
First, the consent standard — "not to be unreasonably withheld, conditioned, or delayed" — is significantly softer than the Construction Loan Agreement's mandatory prepayment trigger. Under the EPC Agreement, a change of control does not automatically result in termination or default; rather, it triggers a consent process in which TMCG must act reasonably. This is a more manageable framework, but it is not without risk. Even if TMCG's withholding of consent would be objectively unreasonable, a contested consent during active construction is highly disruptive. The practical reality is that TMCG's cooperation during construction is essential, and a disputed change of control scenario could lead to work stoppages, schedule slippages, and significant liquidated damages exposure ($125,000 per day per building, up to $10,300,000 per building).
Second, the collateral assignment of the EPC Agreement to Summit National Bank, N.A. as Administrative Agent is a standard feature of construction financing. This assignment must be properly structured to ensure that it does not itself trigger the EPC Agreement's change of control provision. Specifically, the EPC Agreement should include:
(a) An express acknowledgment by TMCG of the collateral assignment of the EPC Agreement to the Administrative Agent;
(b) A right of the Administrative Agent to cure Owner defaults under the EPC Agreement within a specified cure period following notice;
(c) A carve-out from the change of control definition for any transfer resulting from the Administrative Agent's enforcement of its remedies under the collateral assignment, deed of trust, pledge agreement, or other security documents; and
(d) An agreement by TMCG to enter into a new contract (or to continue performing under the existing EPC Agreement) with any successor entity designated by the Administrative Agent following enforcement.
These protections are customary in construction lending for institutional-quality projects, and TMCG should be familiar with them from prior transactions. However, they must be specifically negotiated and documented — they will not be implied by operation of law.
Third, the performance bond and payment bond issued by Great Basin Surety & Insurance Corp. (each in the amount of $412,000,000) are critical project protections. The surety's obligations under the bonds are typically conditioned on the continued validity of the underlying EPC Agreement. If a change of control of the Owner entity triggers a default or termination of the EPC Agreement, Great Basin could assert that its bonding obligations are discharged. This risk must be addressed by confirming that the bonds include provisions addressing Owner-side changes of control and that the surety's obligations survive any change in the identity of the Owner, or at minimum that there is a clear process for reissuance of the bonds in favor of a successor Owner.
V. Change of Control Provisions — Large Load Service Agreement (LLSA)
A. Relevant Agreement
The Large Load Service Agreement (the "LLSA") is between Stonebridge Campus Holdings LLC (as "Customer") and Vantage Power Cooperative ("VPC"), a Virginia electric cooperative organized under the Virginia Electric Cooperative Act (Code of Virginia § 56-209 et seq.). VPC is the exclusive electric utility provider in the service territory that encompasses the Stonebridge Data Center Campus.
The LLSA governs the provision of electric service to the Campus and establishes the material terms of the power supply relationship, including:
• Contracted Demand: 120 MVA (representing 96 MW of critical IT load plus an allowance for mechanical systems, cooling, lighting, and site overhead).
• Term: 10 years, commencing upon energization of the primary 230kV/34.5kV substation on the Meridian Parcel.
• Demand Charge: $8.42 per kW per month during years 1 through 5, escalating at 2.5% per annum commencing in year 6. At full contracted demand, the estimated annual demand charge is approximately $12,124,800.
• Energy Charge: PJM Interconnection day-ahead locational marginal price ("LMP") pass-through, without markup.
• Line Extension Contribution: IHDC will contribute $18,500,000 to VPC for the design and construction of the dedicated 230kV/34.5kV substation and associated transmission infrastructure on the Meridian Parcel. This contribution is payable in installments tied to construction milestones.
• Substation Ownership: Following construction, the substation and all associated equipment will be owned and operated by VPC. Access and use rights will be governed by a separate Substation Easement Agreement encumbering the Meridian Parcel.
• VPC Service Application No.: LSA-2025-0091.
The LLSA is in active negotiation. VPC's in-house counsel and rate department are reviewing the current draft.
B. Change of Control Provision
The LLSA is expected to contain assignment restrictions and/or change of control provisions that require VPC's consent for (a) any assignment of the LLSA by the Customer to a third party and/or (b) any change of control of the Customer entity. Electric cooperatives, including VPC, commonly include such protective provisions in large load service agreements, driven by several concerns:
Credit quality. VPC is committing significant capital — principally the substation infrastructure, which is partially funded by the Customer's $18,500,000 line extension contribution but which VPC will own and maintain for the long term — on the basis of the Customer's creditworthiness and the financial backing of the Customer's sponsors. A change of control that results in a less creditworthy party assuming the Customer's obligations could expose VPC to the risk that the Campus is not fully energized, that demand charges are not paid, or that the substation investment is stranded.
Demand commitment. The LLSA locks in a 120 MVA contracted demand for 10 years. VPC's system planning, transmission investment, and power supply procurement are based on this commitment. A change of control that results in a change in the Project's scope, timeline, or development program could materially impact VPC's ability to serve its other customers and manage its system load.
Regulatory and cooperative governance considerations. As a member-owned cooperative, VPC has governance obligations to its existing members. The provision of large load service to a data center campus at the contracted rates may have been approved by VPC's board of directors on the basis of specific representations regarding the Customer and its sponsors. A change of control could raise questions about whether the board approval extends to a successor entity.
The precise definition and triggering threshold for "change of control" under the LLSA have not been finalized. Based on preliminary discussions and VPC's standard form provisions, the LLSA's change of control definition is expected to focus on the direct owner of the Customer entity — i.e., IHDC's ownership of Stonebridge Campus Holdings LLC — rather than looking through the ownership chain to the ultimate sponsor (Ridgeline Fund IV). This would create a materially different trigger point than the Construction Loan Agreement, which tests ownership at the Fund level.
The consequences of an unconsented change of control under the LLSA are also not fully defined in the current draft, but may include one or more of the following:
(a) A right of VPC to terminate the LLSA upon notice;
(b) A right of VPC to demand additional security deposits or credit support from the Customer or its new sponsors;
(c) A re-evaluation of the Customer's creditworthiness and potential modification of the demand charge or other commercial terms; and/or
(d) Forfeiture of the Customer's rights under the line extension contribution arrangement.
C. Key Observations
The LLSA presents several unique considerations that distinguish it from the Construction Loan Agreement and EPC Agreement in the change of control context:
First, the $18,500,000 line extension contribution represents a substantial, largely unrecoverable investment by the Customer. If VPC terminates the LLSA due to an unconsented change of control, the Customer would lose not only its power supply — which is essential to the operation of a data center and for which there is no alternative provider in VPC's exclusive service territory — but would also potentially forfeit the entire line extension contribution, with no refund mechanism currently contemplated in the LLSA draft. The loss of the LLSA would effectively render the Campus inoperable and would constitute a total loss of the Project's value.
Second, the LLSA is among the contracts collaterally assigned to Summit National Bank, N.A. under the Construction Loan Agreement's collateral package. The collateral assignment of the LLSA to the Administrative Agent must include VPC's express consent and acknowledgment. Critically, the change of control definition in the LLSA must carve out the Administrative Agent's enforcement of the collateral assignment — including any foreclosure on the Borrower's membership interests, UCC disposition of collateral, or appointment of a receiver — from the definition of a change of control event. Without this carve-out, a lender enforcement action could trigger VPC's termination right under the LLSA, destroying the very asset the lender is seeking to protect.
Third, the 10-year term of the LLSA significantly exceeds the construction loan maturity (48 months, plus one 12-month extension option, for a maximum of 60 months). This means that the LLSA's change of control provisions will survive well beyond the construction loan period and will be relevant to:
(a) Any future permanent financing or refinancing of the Project following construction loan maturity;
(b) Any disposition of the Project by Ridgeline Fund IV during the Fund's investment period or upon fund wind-down; and
(c) Any future capital markets transactions, joint ventures, or recapitalizations involving the Project or the IHDC platform.
The long tail of the LLSA makes harmonization of its change of control provisions with the loan and EPC provisions particularly important, as the LLSA will govern the power supply relationship through multiple potential ownership transitions over the life of the Project.
Fourth, the dedicated 230kV/34.5kV substation on the Meridian Parcel, while owned by VPC post-construction, is physically located on property held by the Borrower (subject to the Substation Easement Agreement). In a termination scenario, VPC would retain ownership of the substation and the easement rights, but the practical question of whether VPC would continue to deliver power through the substation to a successor customer entity — or would de-energize the substation and effectively strand the Campus — is a matter that should be addressed in the LLSA and the Substation Easement Agreement.
VI. Comparative Analysis: Change of Control Definitions Across Agreements
A. Summary Table
The following table provides a side-by-side comparison of the change of control provisions across the three principal agreements:
B. Identified Conflicts and Gaps
Based on the foregoing analysis, the following specific conflicts, gaps, and risks have been identified:
1. Definitional Mismatch — Level of Ownership Tested
The most fundamental inconsistency across the three agreements is the level of the ownership chain at which the change of control test is applied. The Construction Loan Agreement tests indirect ownership at the Ridgeline Fund IV level — the ultimate sponsor, sitting three levels above the Borrower in the organizational chain. By contrast, the EPC Agreement and LLSA are expected to test ownership at the project entity level (Stonebridge Campus Holdings LLC) or, at most, at the IHDC level — one or two levels above the Borrower, but below the Fund level.
This mismatch creates two distinct risk scenarios:
Scenario A — Fund-level transfer triggers loan but not EPC/LLSA. Ridgeline Fund IV sells a portion of its interest in RCP Digital Holdings LLC, reducing its indirect ownership of the Borrower from 92% to 48%. This triggers the Construction Loan Agreement's mandatory prepayment obligation (because the Fund's interest has fallen below 51%), but does not trigger the EPC or LLSA change of control provisions (because IHDC remains the 100% direct owner of the Borrower). The result is that the loan is accelerated — with all of the cascading collateral enforcement consequences described above — even though the EPC contractor and utility provider have no independent concern about the change.
Scenario B — Entity-level transfer triggers EPC/LLSA but not loan. IHDC admits a new member or co-investor at the IHDC level, diluting Ridgeline Fund IV's indirect interest from 92% to 60% but keeping it above the 51% loan threshold. If the EPC or LLSA defines change of control as any change in the party that "controls" the Owner, and if "control" is determined by reference to practical control rather than a fixed percentage threshold, this transaction could arguably trigger the EPC and/or LLSA provisions without triggering the loan covenant. The Owner would then need to obtain consent from TMCG and/or VPC for a transaction that the lenders have not objected to.
2. Threshold Mismatch
Even if all three agreements test ownership at the same level, the numerical thresholds may differ. The Construction Loan Agreement uses a 51% threshold. The EPC Agreement may use 50%, "majority," or "controlling interest" — terms that could be interpreted differently depending on applicable law and the specific drafting. The LLSA's threshold is not yet defined. A transfer reducing Ridgeline Fund IV's indirect interest from 92% to 55% would not trigger the loan covenant (51% threshold) but might or might not trigger the EPC or LLSA provisions depending on whether their definitions use a 50% threshold (not triggered) or a "controlling interest" test (potentially triggered, depending on interpretation).
3. Consequence Mismatch
The three agreements impose fundamentally different consequences upon a change of control trigger. The Construction Loan Agreement imposes the most severe consequence: mandatory prepayment and acceleration of the entire $390,000,000 facility, with no cure and no consent mechanism. The EPC Agreement imposes a consent requirement with a reasonableness qualifier — a significant but manageable commercial process. The LLSA's consequences are not yet fully defined but may range from a consent requirement to outright termination.
This asymmetry creates the risk of disjointed obligations. For example, if a particular transfer triggers the EPC Agreement's consent requirement but not the Construction Loan Agreement's mandatory prepayment (because the transfer falls below the EPC threshold but above the loan threshold), the Borrower would be required to seek TMCG's consent for a transaction that the lenders have no objection to — and TMCG's unreasonable withholding of consent could itself constitute an Owner default under the EPC Agreement, which would in turn breach the Borrower's covenants under the Construction Loan Agreement and trigger a loan Event of Default through a different pathway.
4. Cascading Default Risk
The most dangerous scenario involves a cascading sequence of defaults triggered by a single change of control event. The mechanism is as follows:
(a) A change of control occurs that triggers the Construction Loan Agreement's mandatory prepayment obligation.
(b) The Borrower is unable to satisfy the mandatory prepayment (as is almost certain during active construction).
(c) The Administrative Agent exercises remedies under the collateral package, including enforcement of the collateral assignments of the EPC Agreement and LLSA — i.e., the lender steps into the Borrower's shoes under those contracts.
(d) If the EPC Agreement and LLSA do not properly carve out lender enforcement from their change of control definitions, TMCG and VPC could assert that the lender's assumption of the contracts itself constitutes a new change of control under those agreements.
(e) TMCG withholds consent (or asserts a right to terminate) under the EPC Agreement; VPC exercises its termination right under the LLSA.
(f) The lender is left holding a partially constructed data center campus with no contractor and no power supply — a stranded asset.
This circular dynamic — in which the lender's enforcement of its collateral triggers the very provisions that destroy the value of that collateral — is the quintessential "circular trap" that proper documentation should prevent. The remedy is straightforward: the change of control definitions in the EPC Agreement and LLSA must expressly exclude transfers resulting from lender enforcement, and both TMCG and VPC must acknowledge and consent to the collateral assignments. But these protections must be specifically negotiated and documented; they will not arise by default.
5. Permitted Transfers
The Construction Loan Agreement is expected to include a set of "permitted transfer" exceptions that allow certain categories of transfers without triggering the Change of Control covenant. Based on preliminary discussions with lender's counsel, the permitted transfer exceptions are expected to include:
(a) Transfers among Ridgeline Fund IV and its affiliates (including transfers between Ridgeline Fund IV and other Ridgeline-managed funds or co-investment vehicles);
(b) Transfers of limited partnership interests in Ridgeline Fund IV by its limited partners (passive LP-level transfers);
(c) Changes in the composition of the management incentive pool (i.e., adjustments to the interests held by IMIP LLC, up to the existing 8% allocation);
(d) Collateral assignments to the construction lenders and enforcement thereof; and
(e) Estate planning, trust, and similar transfers by individual fund participants that do not result in a change of effective control.
These exceptions, while appropriate for the lending relationship, are not currently reflected in the EPC Agreement or the LLSA. A transfer that qualifies as a "permitted transfer" under the Construction Loan Agreement — and is therefore expressly authorized by the lenders — could nonetheless trigger the change of control provisions in the EPC Agreement or LLSA if those agreements do not contain parallel exceptions. This would create the anomalous result that a transfer sanctioned by the project's senior secured creditor is challenged by a trade contractor or utility provider.
6. Lack of Reciprocal Notice
Currently, none of the three agreements contains a mechanism requiring the Borrower to notify counterparties under the other agreements when a change of control event is triggered, consented to, or waived. This creates a risk that a counterparty learns of a change of control only after the fact — potentially after the transfer has been completed and the cure window (if any) has expired. Late discovery could exacerbate the counterparty's response, particularly in the case of TMCG (which may be more inclined to withhold consent if it perceives that the Owner attempted to circumvent the consent process) and VPC (which may demand more onerous credit protections if it views the change as having been effected without transparency).