1043-00002 · Ironhaven Data Centers LLC · Financing

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CALDERWOOD & HARKNESS LLP

Attorneys at Law

1701 Pennsylvania Avenue, N.W., Suite 900 Washington, D.C. 20006

MEMORANDUM

PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT

PREPARED IN ANTICIPATION OF LITIGATION AND FOR THE PURPOSE OF PROVIDING LEGAL ADVICE

TO: Douglas Fairchild, Responsible Partner, Real Estate — Calderwood & Harkness LLP Priya Dasgupta, Chief Financial Officer — Ironhaven Data Centers LLC Julian Hargrove, Managing Partner — Ridgeline Capital Management LLC

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

DATE: July 28, 2025

RE: Construction Loan Term Sheet Analysis and Comparison — Stonebridge Data Center Campus

MATTER NO.: 1043-00002

SUMMIT LOAN COMMITMENT REFERENCE: CL-2025-VA-04418

I. Executive Summary

The purpose of this memorandum is to provide a comprehensive legal and commercial analysis of the construction loan term sheet received from Summit National Bank, N.A. ("Summit") dated August 1, 2025 (target date for the commitment letter) proposing a $390,000,000 senior secured construction loan facility (the "Facility") to finance the ground-up development of the Stonebridge Data Center Campus in unincorporated Loudoun County, Virginia (the "Project"). This memorandum is intended to support the team's negotiation of the term sheet and, thereafter, the definitive loan documentation.

The total project budget is $600,000,000. The $390,000,000 Facility represents 65% of total project costs on a loan-to-cost basis, with the remaining $210,000,000 (35%) to be funded by equity contributions from Ridgeline Capital Partners Fund IV, LP ("Ridgeline Fund IV") through Ironhaven Data Centers LLC ("IHDC") and, ultimately, a to-be-formed borrower entity (Stonebridge Campus Holdings LLC).

Summit will serve as Administrative Agent and Lead Arranger. The Facility will be syndicated, with initial commitments allocated among Summit, Cascade Commercial Lending Corp. ("Cascade"), and Harborview Trust Company ("Harborview"). All three lenders are expected to execute the commitment letter concurrently.

Overall assessment: The term sheet reflects market-standard construction lending terms for a ground-up mission-critical data center campus with a well-capitalized institutional sponsor. Pricing sits in the middle of the market range, structural covenants are standard, and the collateral package is customary. That said, several provisions warrant negotiation — most notably the loan-to-cost covenant (which sits at zero headroom), the breadth of the change-of-control definition, the sequencing of the ZMOD condition to closing, and the level of the arrangement and unused commitment fees. These items are addressed in detail in Sections IV and VI below.

The target construction loan closing date is October 15, 2025, immediately following the September 15, 2025 land closings and coordinated with the Loudoun County Board of Supervisors' anticipated October 2025 ZMOD hearing.

This memorandum is organized into the following sections: (1) project and transaction context; (2) facility overview and summary of key terms; (3) detailed term-by-term analysis; (4) comparison with market terms; (5) priority negotiation points and recommendations; (6) coordination with other project agreements; (7) timeline and next steps; and (8) conclusion, followed by referenced appendices.

II. Project and Transaction Context

A. Project Overview

The Project — the "Stonebridge Data Center Campus" (the "Stonebridge Campus") — will be developed on assembled land at the intersection of Belmont Ridge Road and Stonebridge Boulevard in unincorporated Loudoun County, Virginia 20148, in the heart of the Ashburn/Data Center Alley submarket.

The developer and prospective borrower's parent is IHDC, a Delaware limited liability company headquartered at 44680 Prentice Drive, Suite 200, Ashburn, VA 20147. IHDC is a portfolio company of Ridgeline Fund IV, a Delaware limited partnership with approximately $3.8 billion in committed capital, managed by Ridgeline Capital Management LLC. Ridgeline Fund IV holds a 92% equity interest in IHDC indirectly through RCP Digital Holdings LLC, with the remaining 8% held by IHDC management through Ironhaven Management Incentive Pool LLC. The Ridgeline Fund IV internal investment identifier is RCP-IV-2025-DC-07.

IHDC has an existing operating platform consisting of three data center facilities aggregating approximately 42 MW of critical IT load, which will be a positive factor in credit underwriting and in negotiations regarding sponsor-friendly terms.

B. Project Scope

The Stonebridge Campus will be constructed on approximately 81.4 total acres, comprised of two adjoining parcels: the 62.0-acre Stonebridge Parcel and the 19.4-acre Meridian Parcel. When fully built, the campus will support 96 MW of critical IT load distributed across four purpose-built data center buildings (Buildings A through D), each rated at 24 MW and each providing approximately 120,000 gross square feet of floor area, for a total gross floor area of approximately 480,000 square feet.

Key project milestones currently reflected in the schedule are:

• Land closings (both parcels): September 15, 2025

• ZMOD approval (Loudoun County Board of Supervisors): October 2025 (target)

• EPC contract execution with Titan-McAllister Construction Group, LLC ("TMCG"): October 20, 2025, at a Guaranteed Maximum Price ("GMP") of $412,000,000

• Notice to Proceed to TMCG: November 1, 2025

• Substantial Completion, Building A: August 1, 2027

• Substantial Completion, Buildings B–D: November 1, 2027

C. Project Budget Summary

D. Capital Stack

III. Facility Overview — Key Terms Summary

The following table summarizes the material terms proposed in the Summit term sheet. Detailed narrative analysis of each term follows in Section IV.

Summary Table of Key Terms

Syndicate Composition.

IV. Detailed Term-by-Term Analysis

A. Borrower and Guarantor Structure

The Facility will be extended to a to-be-formed Virginia single-purpose entity, Stonebridge Campus Holdings LLC (the "Borrower"), which will be wholly owned by IHDC. The term sheet reflects, and we expect the definitive loan agreement to contain, customary single-purpose-entity ("SPE") requirements, including: separateness covenants (separate books, records, and financial statements; no commingling of assets); independent director or independent manager requirements; restrictions on incurring additional indebtedness beyond permitted exceptions; and limitations on dissolution, merger, or amendment of organizational documents without lender consent.

Formation of the Borrower and the finalization of its operating agreement to conform to lender-required SPE provisions must be completed prior to loan closing. A draft operating agreement is currently under preparation and will be circulated for lender counsel review no later than the second week of August 2025.

The guarantor will be IHDC (EIN: 84-3291057; Virginia State Corporation Commission Entity ID: S7491283). The term sheet contemplates a two-tier guaranty structure:

(a) A Completion Guaranty, under which IHDC will guarantee lien-free completion of the Stonebridge Campus in substantial accordance with approved plans and specifications and within the approved budget; and

(b) A Carry / Payment Guaranty, under which IHDC will guarantee payment of interest, fees, taxes, insurance, and other carrying costs of the Project during the draw period and construction period.

This two-tier structure is market-standard for institutionally sponsored data center construction loans. The Completion Guaranty typically burns off upon substantial completion (subject to lien-free delivery and receipt of a final certificate of occupancy for the applicable building), while the Carry Guaranty ordinarily survives until either stabilization or conversion to permanent financing.

Recommendation: Negotiate specific, objective burn-off triggers for the Completion Guaranty (e.g., lender's receipt of a final unconditional lien waiver from TMCG, receipt of all certificates of occupancy for Buildings A–D, and payment of all retainage). Confirm that any financial covenants imposed on IHDC as guarantor (typically a minimum tangible net worth and minimum liquidity) are achievable based on IHDC's current balance sheet. Coordinate with Priya Dasgupta to test compliance capacity against the current and pro forma IHDC balance sheet under a range of stress scenarios.

B. Facility Size and Syndicate Composition

The $390,000,000 Facility represents 65% of the $600,000,000 project budget on a loan-to-cost basis. The syndicate is composed of three lenders:

• Summit National Bank, N.A. holds $180,000,000 (46.15%) and, as Administrative Agent and Lead Arranger, holds the largest individual position. The relationship officer is Karen Ellsworth, Managing Director, Real Estate Finance.

• Cascade Commercial Lending Corp., an institutional lender based in Philadelphia, will commit $130,000,000 (33.33%). The relationship manager is David Rennick.

• Harborview Trust Company, a Connecticut-chartered trust company, will commit $80,000,000 (20.51%). The lending officer is Susan Applegate.

Arithmetic check: $180,000,000 + $130,000,000 + $80,000,000 = $390,000,000.

A three-bank syndicate is manageable for intercreditor purposes. Summit's near-majority hold as agent is favorable for administrative and decision-making efficiency, and it reduces the risk that any single co-lender can hold up routine consents. We will need to confirm voting thresholds and required-lender consent mechanics in the definitive loan agreement. Based on the term sheet, we expect "Required Lenders" to be defined at 66-2/3% of aggregate commitments (a customary threshold), with "unanimous lender" consent required for fundamental matters (extensions of maturity, reductions in principal or interest, releases of material collateral, and modifications of pro rata sharing provisions).

Lender's counsel is Redmond & Calloway LLP (lead partner Victor Redmond), 8300 Greensboro Drive, Suite 1100, McLean, VA 22102. Initial diligence lists and draft loan documentation are expected from Redmond & Calloway during the second and third weeks of August.

C. Interest Rate and Fees

1. Interest Rate. The proposed rate is Term SOFR + 285 basis points, with a SOFR floor of 0.50%. Interest is expected to be payable monthly in arrears on drawn balances.

SOFR + 285 bps sits within the competitive range for construction loans on data center projects of this scale and credit profile, which we currently see priced in the range of SOFR + 250 to SOFR + 325 bps for well-sponsored projects. The 0.50% SOFR floor is standard and is not binding at prevailing SOFR levels.

Recommendation: Attempt to negotiate the margin down to SOFR + 260–275 bps, citing (i) Ridgeline Fund IV's sponsor profile ($3.8 billion in committed capital and a strong track record of digital-infrastructure investments), (ii) IHDC's existing operating platform (three facilities aggregating 42 MW), and (iii) the depth and quality of the collateral package. Alternatively, negotiate a pricing step-down tied to construction completion (e.g., a 15–20 bps reduction upon substantial completion of Building A) or leasing milestones (e.g., a further step-down upon achieving 50% and 75% leased thresholds).

2. Arrangement Fee. The proposed arrangement fee is 1.00% of the Facility ($3,900,000), payable at closing.

1.00% is at the higher end of the market range for a three-bank syndicate. Typical arrangement fees for facilities of this size and structure range from 0.75% to 1.00%. We should target a reduction to 0.85%–0.90% ($3,315,000–$3,510,000), which would save between $390,000 and $585,000 at closing. This is a project-level cost that falls within the Entitlements & Soft Costs and Contingency lines of the project budget, and any reduction improves headroom on those budget lines.

3. Unused Commitment Fee. The proposed unused commitment fee is 0.50% per annum on undrawn commitments, payable quarterly.

This is standard for construction facilities. However, given the anticipated draw curve — which is heavily back-weighted, with most draws occurring in mid- and late-construction — the undrawn balance will remain substantial for a significant portion of the draw period. For illustrative purposes, if only $50,000,000 has been drawn six months after closing, the unused fee on the $340,000,000 undrawn balance for that six-month period would be approximately $340,000,000 × 0.50% × 0.5 = $850,000.

Recommendation: Negotiate a tiered fee structure (e.g., 0.375% for the first 12 months and 0.50% thereafter), or alternatively request that the fee be calculated on the "net commitment" after giving effect to an agreed-upon anticipated draw schedule.

D. Draw Period and Maturity

1. Draw Period. The proposed draw period is 36 months from first advance. Assuming first advance occurs shortly after loan closing on October 15, 2025 (following satisfaction of the equity-first condition and other conditions to first draw), the draw period would extend until approximately October 2028.

This provides approximately 12 months of buffer beyond the projected 24-month construction duration (NTP November 1, 2025 through Substantial Completion of Buildings B–D on November 1, 2027). The buffer accommodates phased draw sequencing, potential construction delays, retainage releases, and post-completion tenant-improvement draws. We will confirm alignment of the draw period with the EPC construction schedule (Exhibit C to the EPC Agreement) as part of definitive documentation.

2. Maturity. The proposed initial maturity is 48 months from closing (i.e., approximately October 15, 2029), with one 12-month extension option subject to conditions typically including (i) no default or event of default, (ii) payment of an extension fee, and (iii) satisfaction of minimum leasing or DSCR thresholds.

The initial 48-month maturity provides approximately 24 months post-substantial-completion for lease-up and stabilization. Stabilization is currently targeted for Q2 2028 (85% leased), which is well within the initial maturity. The one-year extension option, extending final maturity to approximately October 2030, provides additional runway if stabilization is delayed or if permanent-financing execution is timed to more favorable capital-markets conditions.

Recommendation: (i) Negotiate objective, achievable conditions for exercise of the extension option (avoid subjective "lender satisfaction" standards); (ii) cap the extension fee at 0.25% of then-outstanding principal; and (iii) confirm that the extension is exercisable at the Borrower's unilateral election upon satisfaction of the stated conditions and is not subject to any residual lender discretion.

E. Minimum Equity Contribution Before First Draw

The term sheet requires that at least 25% of the total equity commitment — i.e., $52,500,000 ($210,000,000 × 25%) — be contributed to the Borrower before the first advance.

This is a customary "equity first" condition that ensures the sponsor has material capital at risk before lender funds are deployed. The $52,500,000 minimum equity corresponds to approximately 8.75% of total project costs. As a practical matter, the land acquisition cost ($77,900,000 across both parcels) will constitute the primary initial equity deployment, since the land closings (September 15, 2025) precede the loan closing (October 15, 2025) by approximately one month.

We should confirm with Ridgeline that equity capital calls can be timed to align with (i) the land closings on September 15, 2025 and (ii) the closing conditions for first loan draw.

Recommendation: Confirm — expressly and in writing — that (i) land acquisition costs and closing costs funded prior to loan closing will be credited toward the $52,500,000 minimum equity threshold; (ii) earnest money deposits ($2,925,000 for Stonebridge and $970,000 for Meridian, totaling $3,895,000) count toward the threshold; and (iii) pre-closing soft costs (entitlements, consultants, and legal fees) count toward the threshold. This is critical to avoid a "double-equity" outcome in which Ridgeline is required to fund the land plus an additional $52,500,000 before any loan proceeds are made available.

Cross-reference to the Equity Contribution Agreement currently being negotiated with Ridgeline Fund IV: draw sequencing mechanics between equity and debt must be aligned across the two documents.

F. Financial Covenants

1. Loan-to-Cost Ratio (LTC). Maximum LTC: ≤ 65%. The current ratio is $390,000,000 ÷ $600,000,000 = 65.0% — exactly at the covenant threshold.

This is a critical issue. There is zero headroom on the LTC covenant. Any cost overrun that increases total project costs (whether attributable to EPC change orders, power-infrastructure costs, or other budget items) will push the ratio above 65% and cause a covenant breach, unless additional equity is contributed to bring the ratio back into compliance.

Recommendation: This item should be flagged for the client at the highest priority. Options include:

(a) Request an LTC covenant of ≤ 67% to create a 2% headroom cushion (equivalent to approximately $12,000,000 of cost-overrun tolerance);

(b) Alternatively, clarify the LTC calculation methodology to specify that the covenant is measured against the approved budget rather than against actual costs incurred, so that budgeted contingency line items ($34,900,000) function as a genuine cushion for the ratio;

(c) Confirm that application of contingency and reserve funds does not, in itself, increase the denominator (total project cost) for LTC calculation purposes; and

(d) Discuss with Priya Dasgupta and Julian Hargrove whether Ridgeline would consider committing to an equity top-up mechanism (an equity cure right) to cure any LTC breach arising from cost overruns.

2. Debt Service Coverage Ratio (DSCR). Minimum DSCR at stabilization: ≥ 1.25x, with stabilization defined as 85% leased (target Q2 2028).

A 1.25x threshold is standard for data center construction loans. The fact that the DSCR is measured only at stabilization (rather than throughout construction) is favorable, as it avoids ratio testing during the construction and initial lease-up periods when the Project will generate limited or no revenue.

We will need to model projected NOI against projected debt service to confirm achievability. As a preliminary point, estimated annual demand charges alone (utility costs payable to Vantage Power Cooperative under the Large Load Service Agreement) are approximately $12,124,800 per year — a material operating expense that will reduce NOI.

Recommendation: Confirm and negotiate the DSCR calculation methodology, including (i) whether NOI is measured on a trailing 12-month actual basis or on an annualized projection basis; (ii) whether debt service is calculated on actual interest paid or on a hypothetical amortizing basis (which is typically more borrower-adverse); and (iii) treatment of extraordinary or non-recurring items.

G. Collateral Package

The Facility will be secured by a comprehensive collateral package, expected to include:

• A first-priority deed of trust on both campus parcels (Stonebridge Parcel: Loudoun County Tax Map /95-4A-1///; Meridian Parcel: Tax Map /95-4A-2///), to be recorded in the Land Records of Loudoun County, Virginia;

• Assignment of leases and rents covering all future tenant leases at the Project;

• Pledge of 100% of the membership interests in Stonebridge Campus Holdings LLC by IHDC;

• Collateral assignment of the EPC Agreement with TMCG;

• Collateral assignment of architect agreements and other material design and consultant contracts;

• Collateral assignment of all permits and governmental approvals, including ZMOD approval, site plan approval, and building permits (subject to applicable Virginia law limitations on assignability of governmental approvals);

• Lender's title insurance policy in the amount of $390,000,000, to be issued by Sovereign Title Insurance Company through Fidelitas Title & Escrow, Inc.

This package is comprehensive but standard for construction facilities of this type. The collateral assignment of the EPC Agreement will require coordination with TMCG's consent rights, and the assignment of permits will need to comply with Virginia law and the terms of each individual permit and approval.

Recommendation: Ensure that the collateral assignment of the LLSA with Vantage Power Cooperative ("VPC") (VPC Service Application No. LSA-2025-0091) is included in the collateral package — the LLSA is arguably the single most critical project contract, since without power the Stonebridge Campus is not viable. Confirm that VPC's consent to collateral assignment has been (or can be) obtained, and negotiate a consent-and-recognition agreement with VPC in favor of the lenders.

Cross-reference: The EPC Agreement includes a change-of-control clause giving TMCG a consent right (not to be unreasonably withheld) over changes to the project owner entity. Confirm this consent right does not conflict with the lenders' remedies (foreclosure, transfer of the pledged membership interests upon default, or exercise of step-in rights). We anticipate negotiating a consent, agreement, and recognition agreement from TMCG at closing addressing these issues.

H. Change of Control Provision

The term sheet includes a mandatory prepayment trigger upon any "change of control" of the Borrower or Guarantor. The proposed definition of change of control is any transfer resulting in Ridgeline Fund IV (directly or indirectly) ceasing to hold at least 51% of the equity interests in Borrower or Guarantor.

The current equity chain is: Ridgeline Fund IV → RCP Digital Holdings LLC (92% of IHDC) → IHDC (100% of Stonebridge Campus Holdings LLC). Ridgeline's indirect interest in the Borrower is 92%, providing meaningful headroom above the 51% threshold. In principle, Ridgeline could sell up to approximately 41% of its indirect interest without triggering the mandatory prepayment; a full exit or majority sale, however, would trigger the provision.

Coordination is required across multiple project agreements:

• EPC Agreement: TMCG has a right to consent (not to be unreasonably withheld) to any change of control of the project owner entity; separately, the Owner has a corresponding termination right upon a change of control of TMCG.

• LLSA with VPC: We are reviewing whether the LLSA contains comparable transfer restrictions or consent requirements. If so, harmonization will be required across the three documents.

Recommendation: Negotiate the change-of-control definition to expressly exclude the following (each of which is customary in institutional construction loans):

(i) Internal reorganizations within the Ridgeline fund family that do not diminish Ridgeline's ultimate economic and voting control;

(ii) Transfers to affiliated Ridgeline successor funds or side-car vehicles that share substantially the same investors as Ridgeline Fund IV;

(iii) Transfers by Ridgeline in connection with a bona fide fund restructuring, GP-led secondary transaction, or similar liquidity event, provided that Ridgeline (or its affiliates) continues to control the general partner;

(iv) Transfers within the management incentive pool held through Ironhaven Management Incentive Pool LLC, so that ordinary-course management equity adjustments (promotions, terminations, vesting) do not inadvertently affect the calculation; and

(v) Transfers by operation of law (death, disability, or estate planning) affecting non-controlling management interests.

Cross-reference: A separate memorandum is being prepared on change-of-control coordination across the loan, EPC, and LLSA documents. That memorandum will be circulated the week of August 4, 2025.

I. Conditions Precedent to Closing and First Draw

Although the term sheet does not exhaustively enumerate conditions precedent, we expect the definitive loan agreement to include (at a minimum) the following conditions:

• Formation and capitalization of Stonebridge Campus Holdings LLC in a form satisfactory to the lender;

• Completion of the land acquisitions for both parcels;

• Minimum equity contribution of $52,500,000 (see Section IV.E above);

• Receipt of ZMOD approval from the Loudoun County Board of Supervisors (target: October 2025);

• Execution of the EPC Agreement with TMCG (target: October 20, 2025);

• Title insurance policies (lender's policy: $390,000,000) issued by Sovereign Title Insurance Company through Fidelitas Title & Escrow, Inc.;

• ALTA surveys of both parcels completed and certified to the lenders;

• Phase I Environmental Site Assessments (and Phase II ESA for the Stonebridge Parcel) completed by Pendleton Environmental Consulting with results satisfactory to the lender;

• Appraisals of both parcels and the Project as-completed prepared by Greystone Appraisal Partners, LLC (Janet Choi, MAI) supporting the loan amount and confirming valuation assumptions;

• Environmental indemnity agreement executed by IHDC;

• Completion and Carry Guaranties executed by IHDC;

• Legal opinion of Calderwood & Harkness LLP addressing customary matters (due formation, authorization, enforceability, no conflicts, and Virginia-law-specific issues);

• Evidence of insurance, including builder's risk ($412,000,000, Great Basin Surety & Insurance Corp.), CGL, and performance and payment bonds;

• Equity Contribution Agreement executed by Ridgeline Fund IV.

Analysis: The ZMOD approval timeline (October 2025 Board of Supervisors hearing) creates a sequencing risk. The loan closing is targeted for October 15, 2025, and ZMOD approval may not be received until later in October. If ZMOD approval is a hard closing condition, the loan closing may slip beyond October 15.

Recommendation: Negotiate a bifurcated conditions structure: distinguish conditions to closing from conditions to first advance, and require ZMOD approval only as a condition to first advance (not to closing itself). This preserves flexibility if the Board of Supervisors hearing is scheduled for late October and avoids downstream schedule slippage in the EPC contract execution and NTP.

J. Representations, Warranties, and Covenants (Anticipated)

The definitive loan agreement is expected to contain customary representations and warranties from the Borrower and Guarantor, including as to: due organization and authority; absence of material litigation; compliance with laws (including environmental laws, OFAC/AML regulations, and ERISA); accuracy of financial statements; absence of default; and completeness of disclosure.

Ongoing reporting covenants will include:

• Monthly draw reports, accompanied by lien waivers, sworn statements from TMCG, and inspecting engineer's certification;

• Quarterly financial statements of the Borrower and Guarantor;

• Annual audited financial statements of the Guarantor, prepared by Fielding & Associates, CPAs (audit partner Robert Fielding);

• Notices of material events (litigation, environmental matters, permit issues, material defaults under project agreements);

• Leasing reports and status of lease-up.

Affirmative and negative covenants will include: a budget covenant (total project costs not to exceed the approved budget without lender consent, subject to a customary de minimis reallocation basket among budget lines); a leasing covenant (major-lease approval rights below specified thresholds and for below-market economic terms); an insurance covenant (maintenance of all required coverages — cross-reference to the Insurance Requirements Compliance Matrix); and standard restrictions on additional debt, liens, distributions, affiliate transactions, and material amendments to project agreements.

K. Extension Option

The Facility includes one 12-month extension option, extending maturity from 48 months to 60 months from closing (approximately October 2029 to October 2030). Conditions to exercise are expected to include: (i) no default or event of default; (ii) payment of an extension fee; and (iii) satisfaction of minimum leasing or DSCR thresholds.

The extension option is important as a safety valve if lease-up takes longer than projected. The stabilization target of Q2 2028 (85% leased) should be achievable within the initial 48-month term, but market uncertainty — particularly around AI-driven demand cycles and hyperscaler leasing preferences — warrants the extension.

Recommendation: Negotiate clear, objective extension conditions; cap the extension fee at 0.25% of then-outstanding principal (approximately $975,000 at full draw); and confirm that the extension is exercisable by the Borrower's unilateral notice (given not less than 60 and not more than 180 days prior to initial maturity), subject to the stated conditions but not to any additional lender discretion.

V. Comparison with Market Terms

The following table compares the Summit term sheet against typical construction lending terms for data center projects in Northern Virginia (Ashburn/Loudoun County submarket), based on our recent market intelligence from comparable transactions closed in the last 12 months.

The pricing (spread) and structural covenants are competitive. The fees (arrangement fee and unused commitment fee) are at the higher end of the market range and represent the most quantitatively impactful areas for negotiation.

VI. Key Negotiation Points and Recommendations

A. Priority Negotiation Items

1. Interest Rate Spread. Negotiate the margin from SOFR + 285 bps down to SOFR + 260–275 bps, citing the sponsor profile, IHDC's operating track record, and collateral quality. Consider a pricing step-down tied to substantial completion or leasing milestones as an alternative structure.

2. Arrangement Fee. Reduce from 1.00% to 0.85%–0.90% ($3,315,000–$3,510,000), saving between $390,000 and $585,000 at closing.

3. LTC Headroom. Request either an LTC covenant of ≤ 67% or a calculation methodology that measures the ratio against the approved budget (rather than actual costs incurred) and excludes application of contingency reserves from the denominator. Given the zero-headroom problem at 65.0%, this is the single most important structural item to address.

4. Change of Control Definition. Negotiate carve-outs for internal Ridgeline reorganizations, affiliated fund transfers, bona fide fund restructurings, and management incentive pool adjustments (see Section IV.H above).

5. ZMOD Approval Sequencing. Permit ZMOD approval to be a condition to first advance rather than a condition to closing, avoiding the schedule risk arising from the October Board of Supervisors hearing.

6. Extension Option Terms. Cap the extension fee at 0.25% of outstanding principal; require objective conditions; ensure borrower-exercisable at Borrower's election.

B. Secondary Negotiation Items

1. Unused Commitment Fee Tiering. Negotiate a tiered structure (0.375% for the first 12 months; 0.50% thereafter) reflecting the back-weighted construction draw curve.

2. DSCR Calculation Methodology. Ensure clarity on trailing 12-month actual vs. annualized projected NOI; ensure debt service is measured on actual interest, not hypothetical amortizing basis.

3. Guaranty Burn-Off and Guarantor Covenants. Negotiate objective burn-off triggers for the Completion Guaranty; confirm guarantor financial covenants (net worth, liquidity) are achievable based on IHDC's balance sheet.

4. Intercreditor and Voting Thresholds. Confirm Required Lender definition (66-2/3% is customary); scope of "unanimous lender" matters should be narrow and limited to core economic and pro rata items.

5. Cure Rights. Ensure adequate cure periods for monetary defaults (customarily 10 business days) and non-monetary defaults (customarily 30 days, subject to extension for diligent efforts).

VII. Coordination with Other Project Agreements

The Facility does not exist in a vacuum; it must be harmonized with the other principal project agreements. The following coordination items should be tracked and confirmed in definitive documentation:

• EPC Agreement (TMCG): Collateral assignment must be coordinated with TMCG's change-of-control consent right. Lender step-in rights upon Borrower default must be negotiated into the EPC Agreement (typically via a consent, agreement, and recognition agreement from TMCG). TMCG's insurance requirements (Exhibit D to the EPC Agreement) must satisfy the lender's requirements, and any gaps must be reconciled.

• LLSA (VPC): The Large Load Service Agreement (VPC Service Application No. LSA-2025-0091) should be included in the collateral assignment. We must confirm VPC's consent to assignment, and review the LLSA for any independent change-of-control or transfer restrictions that could conflict with the loan documents.

• Equity Contribution Agreement (Ridgeline): The agreement must align with the lender's equity-first requirement ($52,500,000 minimum before first draw). Draw sequencing between equity and debt must be compatible with the lender's construction draw mechanics. Consider adding an express equity cure right to address the LTC covenant.

• Title Insurance (Fidelitas / Sovereign Title): Lender's policy in the amount of $390,000,000 to be issued concurrent with loan closing. Confirm coverage of construction disbursement endorsement, ALTA 32/33 series construction-loan endorsements, and mechanics' lien coverage under Virginia law.

• Appraisals (Greystone): Confirm that the independent appraisals by Janet Choi, MAI will meet the lender's requirements for FIRREA compliance, form, content, and timing.

• Environmental (Pendleton): Phase I ESAs on both parcels (target June 1, 2025) and the Phase II ESA on the Stonebridge Parcel (target July 1, 2025) — results must be "satisfactory to lender" per the standard condition. The potential residual pesticide contamination in the northwest quadrant (approximately 4.2 acres) of the Stonebridge Parcel may require additional analysis, an enhanced environmental indemnity, or a specific remediation plan approved by the lender.

• Insurance Program: Cross-reference the lender's insurance requirements with the builder's risk policy ($412,000,000, Great Basin Surety & Insurance Corp., $250,000 deductible), performance and payment bonds ($412,000,000 each, Great Basin), CGL ($150,000,000 per occurrence, Pinnacle Indemnity Insurance Co.), and the OCIP program being evaluated by Northgate Insurance Brokerage, LLC (William Keane, Senior Vice President).

VIII. Timeline and Next Steps

IX. Conclusion

The Summit term sheet provides a workable foundation for a $390,000,000 senior secured construction facility. Overall, the proposed terms are within the market range for a ground-up data center campus of this scale, backed by a well-capitalized institutional sponsor. Pricing is mid-market; structural covenants and collateral requirements are standard; and the syndicate composition is favorable for administrative efficiency.

The key areas warranting negotiation are (i) the interest rate spread, (ii) the arrangement fee, (iii) LTC covenant headroom (the most important structural issue given the zero-headroom problem), (iv) breadth of the change-of-control definition, and (v) sequencing of the ZMOD condition relative to closing.

We respectfully request the team's authorization to proceed with submission of term sheet comments to Karen Ellsworth at Summit and Victor Redmond at Redmond & Calloway LLP during the first week of August 2025. In advance of that submission, Cynthia Ho will schedule a coordination call with Priya Dasgupta and Julian Hargrove to align on negotiation priorities and confirm authority levels for principal-level trade-offs. Douglas Fairchild will be available to attend and provide partner-level oversight.

We are available to discuss any aspect of this memorandum at the team's convenience.

Appendices (Referenced)

• Appendix A: Copy of Summit Term Sheet dated August 1, 2025 (Commitment Reference CL-2025-VA-04418) — attached separately.

• Appendix B: Project Budget Summary and Capital Stack (as set forth in Section II above).

• Appendix C: Syndicate Commitment Allocations Summary.

• Appendix D: Key Milestone Dates Cross-Reference.

Calderwood & Harkness LLP Matter No. 1043-00002 PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT Prepared in anticipation of litigation and for the purpose of providing legal advice to the client. Do not distribute outside the addressees without prior authorization from the Responsible Partner.

Category	Amount
Land Acquisition	$77,900,000
Entitlements, Proffers & Soft Costs	$14,200,000
EPC Hard Costs (GMP)	$412,000,000
Power Infrastructure	$61,000,000
Contingency & Reserves	$34,900,000
Total	$600,000,000
Source	Amount	Percentage
Equity (Ridgeline Fund IV / IHDC)	$210,000,000	35.0%
Senior Secured Construction Loan	$390,000,000	65.0%
Total	$600,000,000	100.0%
Term	Proposed
Facility Size	$390,000,000
Facility Type	Senior Secured Construction Loan
Administrative Agent / Lead Arranger	Summit National Bank, N.A.
Borrower	Stonebridge Campus Holdings LLC (to-be-formed single-purpose Virginia LLC, wholly owned by IHDC)
Guarantor	Ironhaven Data Centers LLC (completion guaranty and carry guaranty)
Interest Rate	Term SOFR + 285 bps (2.85% margin)
SOFR Floor	0.50%
Unused Commitment Fee	0.50% per annum on undrawn commitments
Arrangement Fee	1.00% of Facility = $3,900,000
Draw Period	36 months from first advance
Maturity	48 months from closing, with one 12-month extension option (subject to conditions)
Collateral	First-priority deed of trust on campus parcels; assignment of leases and rents; pledge of borrower membership interests; assignment of EPC contract and architect agreements; assignment of permits
Minimum Equity Contribution Before First Draw	25% of total equity = $52,500,000

Loan-to-Cost Ratio Covenant	≤ 65%
Debt Service Coverage Ratio (at stabilization)	≥ 1.25x
Change of Control	Mandatory prepayment trigger upon any transfer resulting in Ridgeline Fund IV ceasing to hold at least 51% of the equity interests in borrower or guarantor
Lender	Commitment	% of Facility
Summit National Bank, N.A.	$180,000,000	46.15%
Cascade Commercial Lending Corp.	$130,000,000	33.33%
Harborview Trust Company	$80,000,000	20.51%
Total	$390,000,000	100.00%
Term	Summit Proposal	Market Range	Assessment
Spread	SOFR + 285 bps	SOFR + 250–325 bps	Mid-market
SOFR Floor	0.50%	0.00%–1.00%	Standard
Arrangement Fee	1.00%	0.75%–1.00%	High end
Unused Fee	0.50%	0.25%–0.50%	High end
Draw Period	36 months	24–36 months	Favorable
Maturity	48 months + 12-mo ext.	36–48 months + extension	Competitive
LTC	≤ 65%	60%–70%	Standard
DSCR	≥ 1.25x	1.20x–1.30x	Standard
Min. Equity Pre-Draw	25%	20%–30%	Standard
Action Item	Target Date	Responsible Party
Submit term sheet comments to Summit / Redmond & Calloway LLP	First week of August 2025	Calderwood & Harkness (C. Ho)
Construction loan commitment letter execution	August 1, 2025 (target)	Summit / IHDC
Complete negotiation of definitive loan agreement	September–October 2025	Calderwood & Harkness / Redmond & Calloway
Land closings (both parcels)	September 15, 2025	All parties
ZMOD approval	October 2025	Loudoun County Board of Supervisors
Construction loan closing	October 15, 2025	All parties

EPC contract execution	October 20, 2025	IHDC / TMCG
First equity contribution ($52.5M minimum)	Prior to first loan draw	Ridgeline / IHDC
Notice to Proceed issued to TMCG	November 1, 2025	Stonebridge Campus Holdings

CALDERWOOD & HARKNESS LLP
Attorneys at Law
1701 Pennsylvania Avenue, N.W., Suite 900 Washington, D.C. 20006
MEMORANDUM
PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT
PREPARED IN ANTICIPATION OF LITIGATION AND FOR THE PURPOSE OF PROVIDING LEGAL ADVICE
TO: Douglas Fairchild, Responsible Partner, Real Estate — Calderwood & Harkness LLP Priya Dasgupta, Chief Financial Officer — Ironhaven Data Centers LLC Julian Hargrove, Managing Partner — Ridgeline Capital Management LLC
FROM: Cynthia Ho, Lead Associate, Real Estate — Calderwood & Harkness LLP
DATE: July 28, 2025
RE: Construction Loan Term Sheet Analysis and Comparison — Stonebridge Data Center Campus
MATTER NO.: 1043-00002
SUMMIT LOAN COMMITMENT REFERENCE: CL-2025-VA-04418
I. Executive Summary
The purpose of this memorandum is to provide a comprehensive legal and commercial analysis of the construction loan term sheet received from Summit National Bank, N.A. ("Summit") dated August 1, 2025 (target date for the commitment letter) proposing a $390,000,000 senior secured construction loan facility (the "Facility") to finance the ground-up development of the Stonebridge Data Center Campus in unincorporated Loudoun County, Virginia (the "Project"). This memorandum is intended to support the team's negotiation of the term sheet and, thereafter, the definitive loan documentation.
The total project budget is $600,000,000. The $390,000,000 Facility represents 65% of total project costs on a loan-to-cost basis, with the remaining $210,000,000 (35%) to be funded by equity contributions from Ridgeline Capital Partners Fund IV, LP ("Ridgeline Fund IV") through Ironhaven Data Centers LLC ("IHDC") and, ultimately, a to-be-formed borrower entity (Stonebridge Campus Holdings LLC).
Summit will serve as Administrative Agent and Lead Arranger. The Facility will be syndicated, with initial commitments allocated among Summit, Cascade Commercial Lending Corp. ("Cascade"), and Harborview Trust Company ("Harborview"). All three lenders are expected to execute the commitment letter concurrently.
Overall assessment: The term sheet reflects market-standard construction lending terms for a ground-up mission-critical data center campus with a well-capitalized institutional sponsor. Pricing sits in the middle of the market range, structural covenants are standard, and the collateral package is customary. That said, several provisions warrant negotiation — most notably the loan-to-cost covenant (which sits at zero headroom), the breadth of the change-of-control definition, the sequencing of the ZMOD condition to closing, and the level of the arrangement and unused commitment fees. These items are addressed in detail in Sections IV and VI below.
The target construction loan closing date is October 15, 2025, immediately following the September 15, 2025 land closings and coordinated with the Loudoun County Board of Supervisors' anticipated October 2025 ZMOD hearing.
This memorandum is organized into the following sections: (1) project and transaction context; (2) facility overview and summary of key terms; (3) detailed term-by-term analysis; (4) comparison with market terms; (5) priority negotiation points and recommendations; (6) coordination with other project agreements; (7) timeline and next steps; and (8) conclusion, followed by referenced appendices.
II. Project and Transaction Context
A. Project Overview
The Project — the "Stonebridge Data Center Campus" (the "Stonebridge Campus") — will be developed on assembled land at the intersection of Belmont Ridge Road and Stonebridge Boulevard in unincorporated Loudoun County, Virginia 20148, in the heart of the Ashburn/Data Center Alley submarket.
The developer and prospective borrower's parent is IHDC, a Delaware limited liability company headquartered at 44680 Prentice Drive, Suite 200, Ashburn, VA 20147. IHDC is a portfolio company of Ridgeline Fund IV, a Delaware limited partnership with approximately $3.8 billion in committed capital, managed by Ridgeline Capital Management LLC. Ridgeline Fund IV holds a 92% equity interest in IHDC indirectly through RCP Digital Holdings LLC, with the remaining 8% held by IHDC management through Ironhaven Management Incentive Pool LLC. The Ridgeline Fund IV internal investment identifier is RCP-IV-2025-DC-07.
IHDC has an existing operating platform consisting of three data center facilities aggregating approximately 42 MW of critical IT load, which will be a positive factor in credit underwriting and in negotiations regarding sponsor-friendly terms.
B. Project Scope
The Stonebridge Campus will be constructed on approximately 81.4 total acres, comprised of two adjoining parcels: the 62.0-acre Stonebridge Parcel and the 19.4-acre Meridian Parcel. When fully built, the campus will support 96 MW of critical IT load distributed across four purpose-built data center buildings (Buildings A through D), each rated at 24 MW and each providing approximately 120,000 gross square feet of floor area, for a total gross floor area of approximately 480,000 square feet.
Key project milestones currently reflected in the schedule are:
• Land closings (both parcels): September 15, 2025
• ZMOD approval (Loudoun County Board of Supervisors): October 2025 (target)
• EPC contract execution with Titan-McAllister Construction Group, LLC ("TMCG"): October 20, 2025, at a Guaranteed Maximum Price ("GMP") of $412,000,000
• Notice to Proceed to TMCG: November 1, 2025
• Substantial Completion, Building A: August 1, 2027
• Substantial Completion, Buildings B–D: November 1, 2027
C. Project Budget Summary
D. Capital Stack
III. Facility Overview — Key Terms Summary
The following table summarizes the material terms proposed in the Summit term sheet. Detailed narrative analysis of each term follows in Section IV.
Summary Table of Key Terms
Syndicate Composition.
IV. Detailed Term-by-Term Analysis
A. Borrower and Guarantor Structure
The Facility will be extended to a to-be-formed Virginia single-purpose entity, Stonebridge Campus Holdings LLC (the "Borrower"), which will be wholly owned by IHDC. The term sheet reflects, and we expect the definitive loan agreement to contain, customary single-purpose-entity ("SPE") requirements, including: separateness covenants (separate books, records, and financial statements; no commingling of assets); independent director or independent manager requirements; restrictions on incurring additional indebtedness beyond permitted exceptions; and limitations on dissolution, merger, or amendment of organizational documents without lender consent.
Formation of the Borrower and the finalization of its operating agreement to conform to lender-required SPE provisions must be completed prior to loan closing. A draft operating agreement is currently under preparation and will be circulated for lender counsel review no later than the second week of August 2025.
The guarantor will be IHDC (EIN: 84-3291057; Virginia State Corporation Commission Entity ID: S7491283). The term sheet contemplates a two-tier guaranty structure:
(a) A Completion Guaranty, under which IHDC will guarantee lien-free completion of the Stonebridge Campus in substantial accordance with approved plans and specifications and within the approved budget; and
(b) A Carry / Payment Guaranty, under which IHDC will guarantee payment of interest, fees, taxes, insurance, and other carrying costs of the Project during the draw period and construction period.
This two-tier structure is market-standard for institutionally sponsored data center construction loans. The Completion Guaranty typically burns off upon substantial completion (subject to lien-free delivery and receipt of a final certificate of occupancy for the applicable building), while the Carry Guaranty ordinarily survives until either stabilization or conversion to permanent financing.
Recommendation: Negotiate specific, objective burn-off triggers for the Completion Guaranty (e.g., lender's receipt of a final unconditional lien waiver from TMCG, receipt of all certificates of occupancy for Buildings A–D, and payment of all retainage). Confirm that any financial covenants imposed on IHDC as guarantor (typically a minimum tangible net worth and minimum liquidity) are achievable based on IHDC's current balance sheet. Coordinate with Priya Dasgupta to test compliance capacity against the current and pro forma IHDC balance sheet under a range of stress scenarios.
B. Facility Size and Syndicate Composition
The $390,000,000 Facility represents 65% of the $600,000,000 project budget on a loan-to-cost basis. The syndicate is composed of three lenders:
• Summit National Bank, N.A. holds $180,000,000 (46.15%) and, as Administrative Agent and Lead Arranger, holds the largest individual position. The relationship officer is Karen Ellsworth, Managing Director, Real Estate Finance.
• Cascade Commercial Lending Corp., an institutional lender based in Philadelphia, will commit $130,000,000 (33.33%). The relationship manager is David Rennick.
• Harborview Trust Company, a Connecticut-chartered trust company, will commit $80,000,000 (20.51%). The lending officer is Susan Applegate.
Arithmetic check: $180,000,000 + $130,000,000 + $80,000,000 = $390,000,000.
A three-bank syndicate is manageable for intercreditor purposes. Summit's near-majority hold as agent is favorable for administrative and decision-making efficiency, and it reduces the risk that any single co-lender can hold up routine consents. We will need to confirm voting thresholds and required-lender consent mechanics in the definitive loan agreement. Based on the term sheet, we expect "Required Lenders" to be defined at 66-2/3% of aggregate commitments (a customary threshold), with "unanimous lender" consent required for fundamental matters (extensions of maturity, reductions in principal or interest, releases of material collateral, and modifications of pro rata sharing provisions).
Lender's counsel is Redmond & Calloway LLP (lead partner Victor Redmond), 8300 Greensboro Drive, Suite 1100, McLean, VA 22102. Initial diligence lists and draft loan documentation are expected from Redmond & Calloway during the second and third weeks of August.
C. Interest Rate and Fees
1. Interest Rate. The proposed rate is Term SOFR + 285 basis points, with a SOFR floor of 0.50%. Interest is expected to be payable monthly in arrears on drawn balances.
SOFR + 285 bps sits within the competitive range for construction loans on data center projects of this scale and credit profile, which we currently see priced in the range of SOFR + 250 to SOFR + 325 bps for well-sponsored projects. The 0.50% SOFR floor is standard and is not binding at prevailing SOFR levels.
Recommendation: Attempt to negotiate the margin down to SOFR + 260–275 bps, citing (i) Ridgeline Fund IV's sponsor profile ($3.8 billion in committed capital and a strong track record of digital-infrastructure investments), (ii) IHDC's existing operating platform (three facilities aggregating 42 MW), and (iii) the depth and quality of the collateral package. Alternatively, negotiate a pricing step-down tied to construction completion (e.g., a 15–20 bps reduction upon substantial completion of Building A) or leasing milestones (e.g., a further step-down upon achieving 50% and 75% leased thresholds).
2. Arrangement Fee. The proposed arrangement fee is 1.00% of the Facility ($3,900,000), payable at closing.
1.00% is at the higher end of the market range for a three-bank syndicate. Typical arrangement fees for facilities of this size and structure range from 0.75% to 1.00%. We should target a reduction to 0.85%–0.90% ($3,315,000–$3,510,000), which would save between $390,000 and $585,000 at closing. This is a project-level cost that falls within the Entitlements & Soft Costs and Contingency lines of the project budget, and any reduction improves headroom on those budget lines.
3. Unused Commitment Fee. The proposed unused commitment fee is 0.50% per annum on undrawn commitments, payable quarterly.
This is standard for construction facilities. However, given the anticipated draw curve — which is heavily back-weighted, with most draws occurring in mid- and late-construction — the undrawn balance will remain substantial for a significant portion of the draw period. For illustrative purposes, if only $50,000,000 has been drawn six months after closing, the unused fee on the $340,000,000 undrawn balance for that six-month period would be approximately $340,000,000 × 0.50% × 0.5 = $850,000.
Recommendation: Negotiate a tiered fee structure (e.g., 0.375% for the first 12 months and 0.50% thereafter), or alternatively request that the fee be calculated on the "net commitment" after giving effect to an agreed-upon anticipated draw schedule.
D. Draw Period and Maturity
1. Draw Period. The proposed draw period is 36 months from first advance. Assuming first advance occurs shortly after loan closing on October 15, 2025 (following satisfaction of the equity-first condition and other conditions to first draw), the draw period would extend until approximately October 2028.
This provides approximately 12 months of buffer beyond the projected 24-month construction duration (NTP November 1, 2025 through Substantial Completion of Buildings B–D on November 1, 2027). The buffer accommodates phased draw sequencing, potential construction delays, retainage releases, and post-completion tenant-improvement draws. We will confirm alignment of the draw period with the EPC construction schedule (Exhibit C to the EPC Agreement) as part of definitive documentation.
2. Maturity. The proposed initial maturity is 48 months from closing (i.e., approximately October 15, 2029), with one 12-month extension option subject to conditions typically including (i) no default or event of default, (ii) payment of an extension fee, and (iii) satisfaction of minimum leasing or DSCR thresholds.
The initial 48-month maturity provides approximately 24 months post-substantial-completion for lease-up and stabilization. Stabilization is currently targeted for Q2 2028 (85% leased), which is well within the initial maturity. The one-year extension option, extending final maturity to approximately October 2030, provides additional runway if stabilization is delayed or if permanent-financing execution is timed to more favorable capital-markets conditions.
Recommendation: (i) Negotiate objective, achievable conditions for exercise of the extension option (avoid subjective "lender satisfaction" standards); (ii) cap the extension fee at 0.25% of then-outstanding principal; and (iii) confirm that the extension is exercisable at the Borrower's unilateral election upon satisfaction of the stated conditions and is not subject to any residual lender discretion.
E. Minimum Equity Contribution Before First Draw
The term sheet requires that at least 25% of the total equity commitment — i.e., $52,500,000 ($210,000,000 × 25%) — be contributed to the Borrower before the first advance.
This is a customary "equity first" condition that ensures the sponsor has material capital at risk before lender funds are deployed. The $52,500,000 minimum equity corresponds to approximately 8.75% of total project costs. As a practical matter, the land acquisition cost ($77,900,000 across both parcels) will constitute the primary initial equity deployment, since the land closings (September 15, 2025) precede the loan closing (October 15, 2025) by approximately one month.
We should confirm with Ridgeline that equity capital calls can be timed to align with (i) the land closings on September 15, 2025 and (ii) the closing conditions for first loan draw.
Recommendation: Confirm — expressly and in writing — that (i) land acquisition costs and closing costs funded prior to loan closing will be credited toward the $52,500,000 minimum equity threshold; (ii) earnest money deposits ($2,925,000 for Stonebridge and $970,000 for Meridian, totaling $3,895,000) count toward the threshold; and (iii) pre-closing soft costs (entitlements, consultants, and legal fees) count toward the threshold. This is critical to avoid a "double-equity" outcome in which Ridgeline is required to fund the land plus an additional $52,500,000 before any loan proceeds are made available.
Cross-reference to the Equity Contribution Agreement currently being negotiated with Ridgeline Fund IV: draw sequencing mechanics between equity and debt must be aligned across the two documents.
F. Financial Covenants
1. Loan-to-Cost Ratio (LTC). Maximum LTC: ≤ 65%. The current ratio is $390,000,000 ÷ $600,000,000 = 65.0% — exactly at the covenant threshold.
This is a critical issue. There is zero headroom on the LTC covenant. Any cost overrun that increases total project costs (whether attributable to EPC change orders, power-infrastructure costs, or other budget items) will push the ratio above 65% and cause a covenant breach, unless additional equity is contributed to bring the ratio back into compliance.
Recommendation: This item should be flagged for the client at the highest priority. Options include:
(a) Request an LTC covenant of ≤ 67% to create a 2% headroom cushion (equivalent to approximately $12,000,000 of cost-overrun tolerance);
(b) Alternatively, clarify the LTC calculation methodology to specify that the covenant is measured against the approved budget rather than against actual costs incurred, so that budgeted contingency line items ($34,900,000) function as a genuine cushion for the ratio;
(c) Confirm that application of contingency and reserve funds does not, in itself, increase the denominator (total project cost) for LTC calculation purposes; and
(d) Discuss with Priya Dasgupta and Julian Hargrove whether Ridgeline would consider committing to an equity top-up mechanism (an equity cure right) to cure any LTC breach arising from cost overruns.
2. Debt Service Coverage Ratio (DSCR). Minimum DSCR at stabilization: ≥ 1.25x, with stabilization defined as 85% leased (target Q2 2028).
A 1.25x threshold is standard for data center construction loans. The fact that the DSCR is measured only at stabilization (rather than throughout construction) is favorable, as it avoids ratio testing during the construction and initial lease-up periods when the Project will generate limited or no revenue.
We will need to model projected NOI against projected debt service to confirm achievability. As a preliminary point, estimated annual demand charges alone (utility costs payable to Vantage Power Cooperative under the Large Load Service Agreement) are approximately $12,124,800 per year — a material operating expense that will reduce NOI.
Recommendation: Confirm and negotiate the DSCR calculation methodology, including (i) whether NOI is measured on a trailing 12-month actual basis or on an annualized projection basis; (ii) whether debt service is calculated on actual interest paid or on a hypothetical amortizing basis (which is typically more borrower-adverse); and (iii) treatment of extraordinary or non-recurring items.
G. Collateral Package
The Facility will be secured by a comprehensive collateral package, expected to include:
• A first-priority deed of trust on both campus parcels (Stonebridge Parcel: Loudoun County Tax Map /95-4A-1///; Meridian Parcel: Tax Map /95-4A-2///), to be recorded in the Land Records of Loudoun County, Virginia;
• Assignment of leases and rents covering all future tenant leases at the Project;
• Pledge of 100% of the membership interests in Stonebridge Campus Holdings LLC by IHDC;
• Collateral assignment of the EPC Agreement with TMCG;
• Collateral assignment of architect agreements and other material design and consultant contracts;
• Collateral assignment of all permits and governmental approvals, including ZMOD approval, site plan approval, and building permits (subject to applicable Virginia law limitations on assignability of governmental approvals);
• Lender's title insurance policy in the amount of $390,000,000, to be issued by Sovereign Title Insurance Company through Fidelitas Title & Escrow, Inc.
This package is comprehensive but standard for construction facilities of this type. The collateral assignment of the EPC Agreement will require coordination with TMCG's consent rights, and the assignment of permits will need to comply with Virginia law and the terms of each individual permit and approval.
Recommendation: Ensure that the collateral assignment of the LLSA with Vantage Power Cooperative ("VPC") (VPC Service Application No. LSA-2025-0091) is included in the collateral package — the LLSA is arguably the single most critical project contract, since without power the Stonebridge Campus is not viable. Confirm that VPC's consent to collateral assignment has been (or can be) obtained, and negotiate a consent-and-recognition agreement with VPC in favor of the lenders.
Cross-reference: The EPC Agreement includes a change-of-control clause giving TMCG a consent right (not to be unreasonably withheld) over changes to the project owner entity. Confirm this consent right does not conflict with the lenders' remedies (foreclosure, transfer of the pledged membership interests upon default, or exercise of step-in rights). We anticipate negotiating a consent, agreement, and recognition agreement from TMCG at closing addressing these issues.
H. Change of Control Provision
The term sheet includes a mandatory prepayment trigger upon any "change of control" of the Borrower or Guarantor. The proposed definition of change of control is any transfer resulting in Ridgeline Fund IV (directly or indirectly) ceasing to hold at least 51% of the equity interests in Borrower or Guarantor.
The current equity chain is: Ridgeline Fund IV → RCP Digital Holdings LLC (92% of IHDC) → IHDC (100% of Stonebridge Campus Holdings LLC). Ridgeline's indirect interest in the Borrower is 92%, providing meaningful headroom above the 51% threshold. In principle, Ridgeline could sell up to approximately 41% of its indirect interest without triggering the mandatory prepayment; a full exit or majority sale, however, would trigger the provision.
Coordination is required across multiple project agreements:
• EPC Agreement: TMCG has a right to consent (not to be unreasonably withheld) to any change of control of the project owner entity; separately, the Owner has a corresponding termination right upon a change of control of TMCG.
• LLSA with VPC: We are reviewing whether the LLSA contains comparable transfer restrictions or consent requirements. If so, harmonization will be required across the three documents.
Recommendation: Negotiate the change-of-control definition to expressly exclude the following (each of which is customary in institutional construction loans):
(i) Internal reorganizations within the Ridgeline fund family that do not diminish Ridgeline's ultimate economic and voting control;
(ii) Transfers to affiliated Ridgeline successor funds or side-car vehicles that share substantially the same investors as Ridgeline Fund IV;
(iii) Transfers by Ridgeline in connection with a bona fide fund restructuring, GP-led secondary transaction, or similar liquidity event, provided that Ridgeline (or its affiliates) continues to control the general partner;
(iv) Transfers within the management incentive pool held through Ironhaven Management Incentive Pool LLC, so that ordinary-course management equity adjustments (promotions, terminations, vesting) do not inadvertently affect the calculation; and
(v) Transfers by operation of law (death, disability, or estate planning) affecting non-controlling management interests.
Cross-reference: A separate memorandum is being prepared on change-of-control coordination across the loan, EPC, and LLSA documents. That memorandum will be circulated the week of August 4, 2025.
I. Conditions Precedent to Closing and First Draw
Although the term sheet does not exhaustively enumerate conditions precedent, we expect the definitive loan agreement to include (at a minimum) the following conditions:
• Formation and capitalization of Stonebridge Campus Holdings LLC in a form satisfactory to the lender;
• Completion of the land acquisitions for both parcels;
• Minimum equity contribution of $52,500,000 (see Section IV.E above);
• Receipt of ZMOD approval from the Loudoun County Board of Supervisors (target: October 2025);
• Execution of the EPC Agreement with TMCG (target: October 20, 2025);
• Title insurance policies (lender's policy: $390,000,000) issued by Sovereign Title Insurance Company through Fidelitas Title & Escrow, Inc.;
• ALTA surveys of both parcels completed and certified to the lenders;
• Phase I Environmental Site Assessments (and Phase II ESA for the Stonebridge Parcel) completed by Pendleton Environmental Consulting with results satisfactory to the lender;
• Appraisals of both parcels and the Project as-completed prepared by Greystone Appraisal Partners, LLC (Janet Choi, MAI) supporting the loan amount and confirming valuation assumptions;
• Environmental indemnity agreement executed by IHDC;
• Completion and Carry Guaranties executed by IHDC;
• Legal opinion of Calderwood & Harkness LLP addressing customary matters (due formation, authorization, enforceability, no conflicts, and Virginia-law-specific issues);
• Evidence of insurance, including builder's risk ($412,000,000, Great Basin Surety & Insurance Corp.), CGL, and performance and payment bonds;
• Equity Contribution Agreement executed by Ridgeline Fund IV.
Analysis: The ZMOD approval timeline (October 2025 Board of Supervisors hearing) creates a sequencing risk. The loan closing is targeted for October 15, 2025, and ZMOD approval may not be received until later in October. If ZMOD approval is a hard closing condition, the loan closing may slip beyond October 15.
Recommendation: Negotiate a bifurcated conditions structure: distinguish conditions to closing from conditions to first advance, and require ZMOD approval only as a condition to first advance (not to closing itself). This preserves flexibility if the Board of Supervisors hearing is scheduled for late October and avoids downstream schedule slippage in the EPC contract execution and NTP.
J. Representations, Warranties, and Covenants (Anticipated)
The definitive loan agreement is expected to contain customary representations and warranties from the Borrower and Guarantor, including as to: due organization and authority; absence of material litigation; compliance with laws (including environmental laws, OFAC/AML regulations, and ERISA); accuracy of financial statements; absence of default; and completeness of disclosure.
Ongoing reporting covenants will include:
• Monthly draw reports, accompanied by lien waivers, sworn statements from TMCG, and inspecting engineer's certification;
• Quarterly financial statements of the Borrower and Guarantor;
• Annual audited financial statements of the Guarantor, prepared by Fielding & Associates, CPAs (audit partner Robert Fielding);
• Notices of material events (litigation, environmental matters, permit issues, material defaults under project agreements);
• Leasing reports and status of lease-up.
Affirmative and negative covenants will include: a budget covenant (total project costs not to exceed the approved budget without lender consent, subject to a customary de minimis reallocation basket among budget lines); a leasing covenant (major-lease approval rights below specified thresholds and for below-market economic terms); an insurance covenant (maintenance of all required coverages — cross-reference to the Insurance Requirements Compliance Matrix); and standard restrictions on additional debt, liens, distributions, affiliate transactions, and material amendments to project agreements.
K. Extension Option
The Facility includes one 12-month extension option, extending maturity from 48 months to 60 months from closing (approximately October 2029 to October 2030). Conditions to exercise are expected to include: (i) no default or event of default; (ii) payment of an extension fee; and (iii) satisfaction of minimum leasing or DSCR thresholds.
The extension option is important as a safety valve if lease-up takes longer than projected. The stabilization target of Q2 2028 (85% leased) should be achievable within the initial 48-month term, but market uncertainty — particularly around AI-driven demand cycles and hyperscaler leasing preferences — warrants the extension.
Recommendation: Negotiate clear, objective extension conditions; cap the extension fee at 0.25% of then-outstanding principal (approximately $975,000 at full draw); and confirm that the extension is exercisable by the Borrower's unilateral notice (given not less than 60 and not more than 180 days prior to initial maturity), subject to the stated conditions but not to any additional lender discretion.
V. Comparison with Market Terms
The following table compares the Summit term sheet against typical construction lending terms for data center projects in Northern Virginia (Ashburn/Loudoun County submarket), based on our recent market intelligence from comparable transactions closed in the last 12 months.
The pricing (spread) and structural covenants are competitive. The fees (arrangement fee and unused commitment fee) are at the higher end of the market range and represent the most quantitatively impactful areas for negotiation.
VI. Key Negotiation Points and Recommendations
A. Priority Negotiation Items
1. Interest Rate Spread. Negotiate the margin from SOFR + 285 bps down to SOFR + 260–275 bps, citing the sponsor profile, IHDC's operating track record, and collateral quality. Consider a pricing step-down tied to substantial completion or leasing milestones as an alternative structure.
2. Arrangement Fee. Reduce from 1.00% to 0.85%–0.90% ($3,315,000–$3,510,000), saving between $390,000 and $585,000 at closing.
3. LTC Headroom. Request either an LTC covenant of ≤ 67% or a calculation methodology that measures the ratio against the approved budget (rather than actual costs incurred) and excludes application of contingency reserves from the denominator. Given the zero-headroom problem at 65.0%, this is the single most important structural item to address.
4. Change of Control Definition. Negotiate carve-outs for internal Ridgeline reorganizations, affiliated fund transfers, bona fide fund restructurings, and management incentive pool adjustments (see Section IV.H above).
5. ZMOD Approval Sequencing. Permit ZMOD approval to be a condition to first advance rather than a condition to closing, avoiding the schedule risk arising from the October Board of Supervisors hearing.
6. Extension Option Terms. Cap the extension fee at 0.25% of outstanding principal; require objective conditions; ensure borrower-exercisable at Borrower's election.
B. Secondary Negotiation Items
1. Unused Commitment Fee Tiering. Negotiate a tiered structure (0.375% for the first 12 months; 0.50% thereafter) reflecting the back-weighted construction draw curve.
2. DSCR Calculation Methodology. Ensure clarity on trailing 12-month actual vs. annualized projected NOI; ensure debt service is measured on actual interest, not hypothetical amortizing basis.
3. Guaranty Burn-Off and Guarantor Covenants. Negotiate objective burn-off triggers for the Completion Guaranty; confirm guarantor financial covenants (net worth, liquidity) are achievable based on IHDC's balance sheet.
4. Intercreditor and Voting Thresholds. Confirm Required Lender definition (66-2/3% is customary); scope of "unanimous lender" matters should be narrow and limited to core economic and pro rata items.
5. Cure Rights. Ensure adequate cure periods for monetary defaults (customarily 10 business days) and non-monetary defaults (customarily 30 days, subject to extension for diligent efforts).
VII. Coordination with Other Project Agreements
The Facility does not exist in a vacuum; it must be harmonized with the other principal project agreements. The following coordination items should be tracked and confirmed in definitive documentation:
• EPC Agreement (TMCG): Collateral assignment must be coordinated with TMCG's change-of-control consent right. Lender step-in rights upon Borrower default must be negotiated into the EPC Agreement (typically via a consent, agreement, and recognition agreement from TMCG). TMCG's insurance requirements (Exhibit D to the EPC Agreement) must satisfy the lender's requirements, and any gaps must be reconciled.
• LLSA (VPC): The Large Load Service Agreement (VPC Service Application No. LSA-2025-0091) should be included in the collateral assignment. We must confirm VPC's consent to assignment, and review the LLSA for any independent change-of-control or transfer restrictions that could conflict with the loan documents.
• Equity Contribution Agreement (Ridgeline): The agreement must align with the lender's equity-first requirement ($52,500,000 minimum before first draw). Draw sequencing between equity and debt must be compatible with the lender's construction draw mechanics. Consider adding an express equity cure right to address the LTC covenant.
• Title Insurance (Fidelitas / Sovereign Title): Lender's policy in the amount of $390,000,000 to be issued concurrent with loan closing. Confirm coverage of construction disbursement endorsement, ALTA 32/33 series construction-loan endorsements, and mechanics' lien coverage under Virginia law.
• Appraisals (Greystone): Confirm that the independent appraisals by Janet Choi, MAI will meet the lender's requirements for FIRREA compliance, form, content, and timing.
• Environmental (Pendleton): Phase I ESAs on both parcels (target June 1, 2025) and the Phase II ESA on the Stonebridge Parcel (target July 1, 2025) — results must be "satisfactory to lender" per the standard condition. The potential residual pesticide contamination in the northwest quadrant (approximately 4.2 acres) of the Stonebridge Parcel may require additional analysis, an enhanced environmental indemnity, or a specific remediation plan approved by the lender.
• Insurance Program: Cross-reference the lender's insurance requirements with the builder's risk policy ($412,000,000, Great Basin Surety & Insurance Corp., $250,000 deductible), performance and payment bonds ($412,000,000 each, Great Basin), CGL ($150,000,000 per occurrence, Pinnacle Indemnity Insurance Co.), and the OCIP program being evaluated by Northgate Insurance Brokerage, LLC (William Keane, Senior Vice President).
VIII. Timeline and Next Steps
IX. Conclusion
The Summit term sheet provides a workable foundation for a $390,000,000 senior secured construction facility. Overall, the proposed terms are within the market range for a ground-up data center campus of this scale, backed by a well-capitalized institutional sponsor. Pricing is mid-market; structural covenants and collateral requirements are standard; and the syndicate composition is favorable for administrative efficiency.
The key areas warranting negotiation are (i) the interest rate spread, (ii) the arrangement fee, (iii) LTC covenant headroom (the most important structural issue given the zero-headroom problem), (iv) breadth of the change-of-control definition, and (v) sequencing of the ZMOD condition relative to closing.
We respectfully request the team's authorization to proceed with submission of term sheet comments to Karen Ellsworth at Summit and Victor Redmond at Redmond & Calloway LLP during the first week of August 2025. In advance of that submission, Cynthia Ho will schedule a coordination call with Priya Dasgupta and Julian Hargrove to align on negotiation priorities and confirm authority levels for principal-level trade-offs. Douglas Fairchild will be available to attend and provide partner-level oversight.
We are available to discuss any aspect of this memorandum at the team's convenience.
Appendices (Referenced)
• Appendix A: Copy of Summit Term Sheet dated August 1, 2025 (Commitment Reference CL-2025-VA-04418) — attached separately.
• Appendix B: Project Budget Summary and Capital Stack (as set forth in Section II above).
• Appendix C: Syndicate Commitment Allocations Summary.
• Appendix D: Key Milestone Dates Cross-Reference.
Calderwood & Harkness LLP Matter No. 1043-00002 PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT Prepared in anticipation of litigation and for the purpose of providing legal advice to the client. Do not distribute outside the addressees without prior authorization from the Responsible Partner.
Category | Amount
Land Acquisition | $77,900,000
Entitlements, Proffers & Soft Costs | $14,200,000
EPC Hard Costs (GMP) | $412,000,000
Power Infrastructure | $61,000,000
Contingency & Reserves | $34,900,000
Total | $600,000,000
Source | Amount | Percentage
Equity (Ridgeline Fund IV / IHDC) | $210,000,000 | 35.0%
Senior Secured Construction Loan | $390,000,000 | 65.0%
Total | $600,000,000 | 100.0%
Term | Proposed
Facility Size | $390,000,000
Facility Type | Senior Secured Construction Loan
Administrative Agent / Lead Arranger | Summit National Bank, N.A.
Borrower | Stonebridge Campus Holdings LLC (to-be-formed single-purpose Virginia LLC, wholly owned by IHDC)
Guarantor | Ironhaven Data Centers LLC (completion guaranty and carry guaranty)
Interest Rate | Term SOFR + 285 bps (2.85% margin)
SOFR Floor | 0.50%
Unused Commitment Fee | 0.50% per annum on undrawn commitments
Arrangement Fee | 1.00% of Facility = $3,900,000
Draw Period | 36 months from first advance
Maturity | 48 months from closing, with one 12-month extension option (subject to conditions)
Collateral | First-priority deed of trust on campus parcels; assignment of leases and rents; pledge of borrower membership interests; assignment of EPC contract and architect agreements; assignment of permits
Minimum Equity Contribution Before First Draw | 25% of total equity = $52,500,000
Loan-to-Cost Ratio Covenant | ≤ 65%
Debt Service Coverage Ratio (at stabilization) | ≥ 1.25x
Change of Control | Mandatory prepayment trigger upon any transfer resulting in Ridgeline Fund IV ceasing to hold at least 51% of the equity interests in borrower or guarantor
Lender | Commitment | % of Facility
Summit National Bank, N.A. | $180,000,000 | 46.15%
Cascade Commercial Lending Corp. | $130,000,000 | 33.33%
Harborview Trust Company | $80,000,000 | 20.51%
Total | $390,000,000 | 100.00%
Term | Summit Proposal | Market Range | Assessment
Spread | SOFR + 285 bps | SOFR + 250–325 bps | Mid-market
SOFR Floor | 0.50% | 0.00%–1.00% | Standard
Arrangement Fee | 1.00% | 0.75%–1.00% | High end
Unused Fee | 0.50% | 0.25%–0.50% | High end
Draw Period | 36 months | 24–36 months | Favorable
Maturity | 48 months + 12-mo ext. | 36–48 months + extension | Competitive
LTC | ≤ 65% | 60%–70% | Standard
DSCR | ≥ 1.25x | 1.20x–1.30x | Standard
Min. Equity Pre-Draw | 25% | 20%–30% | Standard
Action Item | Target Date | Responsible Party
Submit term sheet comments to Summit / Redmond & Calloway LLP | First week of August 2025 | Calderwood & Harkness (C. Ho)
Construction loan commitment letter execution | August 1, 2025 (target) | Summit / IHDC
Complete negotiation of definitive loan agreement | September–October 2025 | Calderwood & Harkness / Redmond & Calloway
Land closings (both parcels) | September 15, 2025 | All parties
ZMOD approval | October 2025 | Loudoun County Board of Supervisors
Construction loan closing | October 15, 2025 | All parties
EPC contract execution | October 20, 2025 | IHDC / TMCG
First equity contribution ($52.5M minimum) | Prior to first loan draw | Ridgeline / IHDC
Notice to Proceed issued to TMCG | November 1, 2025 | Stonebridge Campus Holdings

CALDERWOOD & HARKNESS LLP

MEMORANDUM

MATTER NO.: 1043-00002

SUMMIT LOAN COMMITMENT REFERENCE: CL-2025-VA-04418

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