COMPLETION GUARANTY
Execution Version
Dated as of March 18, 2024
CONFIDENTIAL — THIS DOCUMENT CONTAINS MATERIAL NON-PUBLIC INFORMATION AND IS SUBJECT TO THE CONFIDENTIALITY PROVISIONS OF THE LOAN AGREEMENT
COMPLETION GUARANTY
March 18, 2024
THIS COMPLETION GUARANTY (this "Guaranty") is made as of March 18, 2024, by COBALT RIDGE CAPITAL PARTNERS, LP, a Delaware limited partnership ("Guarantor"), with its principal office at 300 Park Avenue South, 14th Floor, New York, New York 10010 (EIN: 82-6504391), acting by and through its sole general partner, COBALT RIDGE GP LLC, a Delaware limited liability company ("General Partner"), for the benefit of PINNACLE FEDERAL SAVINGS BANK, a federally chartered savings bank ("Lender"), with its principal office at 800 Constitution Avenue NW, Suite 550, Washington, D.C. 20001 (RSSD ID: 1038742).
RECITALS
A. The Loan. Lender has agreed to make a construction-to-permanent loan in the principal amount of Forty-Five Million and No/100 Dollars ($45,000,000.00) (the "Loan") to IRONHAVEN LOUDOUN EDGE LLC, a Virginia limited liability company formed as a single-purpose, bankruptcy-remote entity ("Borrower"; Virginia State Corporation Commission Entity ID: S9103284; EIN: 93-4178226; registered agent: Commonwealth Registered Agents Inc., 1021 E. Cary Street, Richmond, Virginia 23219), pursuant to that certain Construction Loan Agreement dated as of March 18, 2024 (as the same may be amended, restated, supplemented, or otherwise modified from time to time, the "Loan Agreement"), between Borrower and Lender.
B. The Note. The Loan is evidenced by that certain Promissory Note dated as of March 18, 2024, in the original principal amount of Forty-Five Million and No/100 Dollars ($45,000,000.00) (the "Note"), made by Borrower and payable to the order of Lender.
C. The Deed of Trust. The Loan is secured by, among other things, that certain Deed of Trust, Assignment of Leases and Rents, Security Agreement, and Fixture Filing dated as of March 18, 2024 (the "Deed of Trust"), executed by Borrower as grantor, for the benefit of Lender as beneficiary, encumbering the real property located at 44350 Prentice Drive, Ashburn, Loudoun County, Virginia 20147 (Tax Map Parcel No. 087-23-5571) (the "Property"), as more particularly described in Exhibit A attached hereto and incorporated herein by this reference, recorded or to be recorded in the Office of the Clerk of the Circuit Court of Loudoun County, Virginia. The Property consists of an approximately 3.2-acre parcel of land currently zoned PD-IP (Planned Development — Industrial Park) under the Loudoun County Revised 1993 Zoning Ordinance, together with all improvements now or hereafter erected thereon, all fixtures, appurtenances, easements, and rights appertaining thereto.
D. The Project. Borrower intends to construct on the Property a single-story, approximately 52,000 square foot data center facility with 4.5 megawatts (MW) of critical IT load capacity, N+1 redundancy on power and cooling systems, two separate utility feeds from Northgate Partners LLC, and on-site emergency diesel generation consisting of three (3) 2.5 MW diesel generators (collectively, 7.5 MW total backup capacity) (the "Project" or the "Loudoun Edge Facility"). The Project will be situated on the full 3.2-acre site and is designed and intended to serve as a Tier III equivalent colocation data center facility in the Ashburn, Virginia data center submarket.
E. The Construction Contract. Borrower has entered into a guaranteed maximum price construction contract dated as of February 15, 2024 (the "GMP Contract") with Marlowe Asset Management-Pacific Construction, Inc., a Virginia corporation ("Contractor"), with its principal office at 22600 Gateway Center Drive, Suite 300, Sterling, Virginia 20166 (president: Robert "Rob" Castellano), for construction of the Project at a guaranteed maximum price of Thirty-Three Million Seven Hundred Fifty Thousand and No/100 Dollars ($33,750,000.00). Performance and payment bonds in an aggregate penal sum of not less than $33,750,000.00 have been issued by Allegiance Bond & Casualty Co. in connection with the GMP Contract, with Lender named as a dual obligee thereunder.
F. Building Permit. Loudoun County Building Permit No. BLD-2024-001287 was issued on February 28, 2024, authorizing construction of the Project on the Property in accordance with the approved plans and specifications submitted to and approved by the Loudoun County Department of Building and Development.
G. Project Budget. The total project cost for the Project is Fifty-Seven Million and No/100 Dollars ($57,000,000.00), as set forth in the Approved Project Budget attached hereto as Exhibit B and incorporated herein by this reference, comprised of the following components:
H. Equity Contribution. Guarantor is providing a cash equity contribution to the Project in the amount of Twelve Million and No/100 Dollars ($12,000,000.00), representing approximately 21.1% of the total project cost of $57,000,000.00 (being the difference between the total project cost of $57,000,000.00 and the Loan amount of $45,000,000.00). Under the terms of the Loan Agreement, the equity contribution is required to be funded in full prior to the first construction draw under the Loan. Guarantor's equity has been funded into escrow with Meridian Surety & Title Company ("Escrow Agent") on March 22, 2024, and will be disbursed in accordance with the draw schedule set forth in the Loan Agreement on a "last-dollar-in" basis.
I. Loan-to-Cost and Loan-to-Value Ratios. The Loan represents a loan-to-cost ratio of approximately 78.9% ($45,000,000 ÷ $57,000,000). The as-stabilized appraised value of the Property (including the completed Project) is Seventy-Four Million Five Hundred Thousand and No/100 Dollars ($74,500,000.00), as determined by that certain appraisal report prepared by Graystone Appraisal Group LLC (David Huang, MAI, certified general real estate appraiser) dated February 12, 2024, resulting in a loan-to-value ratio (as-stabilized) of approximately 60.4% ($45,000,000 ÷ $74,500,000).
J. Inducement. Lender would not make the Loan to Borrower without receiving this Guaranty from Guarantor. Guarantor acknowledges and agrees that it derives substantial direct and indirect benefit from the making of the Loan by Lender to Borrower. By reason of Guarantor's direct and indirect ownership interest in Borrower (as more fully described herein), Guarantor's economic interests are advanced by the making of the Loan and the development and construction of the Project. In consideration of the foregoing, and as an inducement to Lender to make the Loan, Guarantor has agreed to execute and deliver this Guaranty for the benefit of Lender.
K. Loan Documents. The term "Loan Documents" means, collectively, the Loan Agreement, the Note, the Deed of Trust, the Assignment of Construction Contract, Plans, and Permits dated as of March 18, 2024 (the "Assignment of Construction Contract"), the Environmental Indemnity Agreement dated as of March 18, 2024 (the "Environmental Indemnity Agreement"), the Cash Management Agreement dated as of March 18, 2024 (the "Cash Management Agreement"), the Pledge Agreement dated as of March 18, 2024 (the "Pledge Agreement"), this Guaranty, and all other documents, instruments, and agreements executed and delivered in connection with the Loan, as any of the foregoing may be amended, restated, supplemented, or otherwise modified from time to time.
L. Borrower's Ownership. Borrower is a single-purpose, bankruptcy-remote Virginia limited liability company whose sole member is Ironhaven Data Centers LLC, a Virginia limited liability company (Virginia SCC Entity ID: S7842196; EIN: 84-3291057; headquarters at 1900 Dominion Tower, Suite 400, Tysons Corner, Virginia 22182) ("IHDC"). Guarantor holds an 82% membership interest in IHDC. Guarantor is a mid-market private equity fund (Fund III, vintage 2021, with $620,000,000 in committed capital and approximately $1,800,000,000 in assets under management), focused on digital infrastructure, telecommunications, and mission-critical real estate investments. The key principals of Guarantor are Marcus J. Kellner (Managing Partner and Co-Founder) and Priya Ramanathan (Partner, Head of Digital Infrastructure).
NOW, THEREFORE, in consideration of the foregoing recitals, the making of the Loan by Lender to Borrower, the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Guarantor hereby agrees as follows:
SECTION 1. DEFINITIONS
For purposes of this Guaranty, the following terms shall have the meanings set forth below. All capitalized terms used but not otherwise defined in this Guaranty shall have the meanings ascribed to such terms in the Loan Agreement.
"Approved Plans and Specifications" means the plans and specifications for the construction of the Project that have been reviewed and approved by both Lender and the Independent Engineer, as attached to or referenced in the Loan Agreement and as the same may be modified from time to time with the prior written approval of Lender and the Independent Engineer.
"Completion" or "Completion of Construction" means the satisfaction of each and all of the following conditions: (a) substantial completion of construction of the Project in all material respects in accordance with the Approved Plans and Specifications, the GMP Contract, and all applicable laws, codes, ordinances, rules, and regulations; (b) issuance by the Loudoun County Department of Building and Development of a final certificate of occupancy, or, if a final certificate of occupancy is not yet available, a temporary certificate of occupancy (a "COO"), permitting the lawful occupancy and use of the completed Loudoun Edge Facility as a data center; (c) delivery to Lender and the Independent Engineer of a final cost certification, certified by Borrower and the architect of record, setting forth the total costs of the Project and confirming that total costs do not exceed the Approved Project Budget (as the same may have been amended with Lender's approval); (d) delivery to Lender of final, unconditional lien waivers from Contractor and all subcontractors, materialmen, and material suppliers who performed work on or furnished materials for the Project; (e) delivery to Lender of an as-built survey of the Property and the improvements thereon, prepared by a surveyor licensed in the Commonwealth of Virginia, meeting the Minimum Standard Detail Requirements for ALTA/NSPS Land Title Surveys jointly established and adopted by the American Land Title Association and the National Society of Professional Surveyors, including Table A optional survey responsibilities and accuracies as specified in the Loan Agreement; and (f) delivery to Lender of written confirmation by the Independent Engineer that the Project has been completed in all material respects in accordance with the Approved Plans and Specifications, the GMP Contract, and the requirements of the Loan Agreement.
"Completion Date" means the earlier of (i) the date on which Completion is achieved as evidenced by satisfaction of all conditions set forth in the definition of Completion, or (ii) the Outside Completion Date.
"Environmental Laws" has the meaning ascribed to such term in the Environmental Indemnity Agreement dated as of March 18, 2024, executed by IHDC and Guarantor in favor of Lender, and shall include, without limitation, the Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C. §§ 9601 et seq.), the Resource Conservation and Recovery Act (42 U.S.C. §§ 6901 et seq.), the Clean Water Act (33 U.S.C. §§ 1251 et seq.), the Clean Air Act (42 U.S.C. §§ 7401 et seq.), the Toxic Substances Control Act (15 U.S.C. §§ 2601 et seq.), and all applicable Virginia state environmental statutes and regulations.
"Event of Default" has the meaning ascribed to such term in the Loan Agreement.
"GMP Contract" means that certain guaranteed maximum price construction contract dated as of February 15, 2024, between Borrower and Contractor, in the guaranteed maximum price amount of Thirty-Three Million Seven Hundred Fifty Thousand and No/100 Dollars ($33,750,000.00), as the same may be amended from time to time in accordance with the provisions of the Loan Agreement and with the prior written consent of Lender. A description of the GMP Contract is set forth in Exhibit C attached hereto and incorporated herein by this reference.
"Independent Engineer" means Whitmore & Associates, PC, a professional engineering firm organized under the laws of the Commonwealth of Virginia (James A. Whitmore, PE, principal), engaged by Lender to provide construction monitoring, inspection, and certification services in connection with the Project, or such other independent engineer as Lender may designate from time to time in its sole and absolute discretion.
"Loan Agreement" means that certain Construction Loan Agreement dated as of March 18, 2024, between Borrower and Lender, as the same may be amended, restated, supplemented, or otherwise modified from time to time.
"Loan Documents" has the meaning set forth in Recital K above.
"Outside Completion Date" means September 30, 2025, as such date may be extended in accordance with the terms of the Loan Agreement (subject to the payment of any applicable extension fee as set forth therein).
"Phase I ESA" means that certain Phase I Environmental Site Assessment of the Property dated February 16, 2024, prepared in accordance with ASTM E1527-21 standards, as delivered to Lender prior to the date hereof.
"Project" means the Loudoun Edge Facility, as more fully described in Recital D above.
"Property" means the real property located at 44350 Prentice Drive, Ashburn, Loudoun County, Virginia 20147 (Tax Map Parcel No. 087-23-5571), as more particularly described in Exhibit A attached hereto, together with all improvements, structures, and facilities now or hereafter constructed or placed thereon, and all appurtenances, easements, and rights belonging or appertaining thereto.
All other capitalized terms used in this Guaranty and not otherwise defined herein shall have the respective meanings ascribed to such terms in the Loan Agreement. In the event of any conflict between a definition set forth in this Guaranty and a definition of the same term set forth in the Loan Agreement, the definition set forth in this Guaranty shall control for purposes of this Guaranty.
SECTION 2. GUARANTY OF COMPLETION
2.1 Completion Obligation. Guarantor hereby unconditionally and irrevocably guarantees to Lender the full and complete lien-free Completion of Construction of the Project on or before the Outside Completion Date (September 30, 2025), in accordance with (a) the Approved Plans and Specifications, (b) the GMP Contract with Marlowe Asset Management-Pacific Construction, Inc., (c) all applicable federal, state, and local laws, codes, ordinances, rules, regulations, and governmental requirements (including, without limitation, the building codes and zoning ordinances of Loudoun County, Virginia, and the requirements of the Americans with Disabilities Act), and (d) the terms and conditions of the Loan Agreement and the other Loan Documents. Guarantor acknowledges that Completion of Construction is a material condition of Lender's agreement to make the Loan and that Lender is relying upon this Guaranty in making the Loan.
2.2 Cost Overrun Obligation. If at any time during the construction of the Project, the total actual project costs exceed the Approved Project Budget of Fifty-Seven Million and No/100 Dollars ($57,000,000.00), or if the guaranteed maximum price under the GMP Contract of Thirty-Three Million Seven Hundred Fifty Thousand and No/100 Dollars ($33,750,000.00) is exceeded for any reason whatsoever (whether by reason of change orders, unforeseen site conditions, material price escalation, force majeure events, or otherwise), Guarantor shall fund or cause to be funded, from sources other than Loan proceeds, all such excess costs necessary to achieve Completion of Construction. Guarantor's obligation to fund cost overruns shall be absolute and unconditional and shall not be subject to any right of reimbursement from Loan proceeds. Any cost overrun funding required hereunder shall be deposited by Guarantor with the Escrow Agent within ten (10) business days following written demand by Lender or the Independent Engineer, and such funds shall be disbursed in accordance with the draw procedures set forth in the Loan Agreement.
2.3 Lien-Free Completion. Guarantor guarantees that Completion of Construction shall be achieved free and clear of all mechanics' liens, materialmen's liens, judgment liens, and all other liens, encumbrances, claims, and charges arising out of or related to the construction of the Project. Without limiting the generality of the foregoing, Guarantor shall cause the timely delivery to Lender of final, unconditional lien waivers and releases from Contractor, all subcontractors, materialmen, and material suppliers who performed work on or furnished materials for the Project, in form and substance satisfactory to Lender. In the event that any mechanic's lien, materialman's lien, or other construction-related lien is filed or recorded against the Property, Guarantor shall cause such lien to be bonded off, discharged, released, or otherwise removed of record within thirty (30) days after Guarantor receives notice or otherwise becomes aware of the filing of such lien, or within such shorter period as may be required by the Loan Agreement.
2.4 Funding of Deficiencies. If at any time during the construction of the Project, the remaining undisbursed Loan proceeds, together with any remaining contingency funds, undisbursed equity contributions, and other available sources of funds, are determined by Lender or the Independent Engineer to be insufficient to achieve Completion of Construction in accordance with this Guaranty, Guarantor shall deposit with Meridian Surety & Title Company (as Escrow Agent and disbursement agent under the Loan Agreement) such additional funds as are necessary, in the reasonable judgment of Lender and the Independent Engineer, to complete the Project. Such deposit shall be made within fifteen (15) business days following Lender's written demand therefor, accompanied by reasonable supporting documentation from the Independent Engineer identifying the projected deficiency. The funds deposited by Guarantor pursuant to this Section 2.4 shall be disbursed in the same manner and subject to the same conditions as Loan proceeds under the Loan Agreement.
2.5 Continuation of Construction. If at any time during the construction of the Project (a) Borrower fails or ceases to prosecute construction of the Project diligently and continuously toward Completion in accordance with the construction schedule set forth in the Loan Agreement, (b) Contractor defaults under or abandons the GMP Contract, (c) Contractor becomes insolvent, makes a general assignment for the benefit of creditors, or becomes the subject of any proceeding under any bankruptcy, insolvency, or similar law, or (d) any other event occurs that, in Lender's reasonable judgment, threatens to prevent or materially delay Completion of Construction by the Outside Completion Date, Guarantor shall promptly take all actions necessary, at Guarantor's sole cost and expense, to ensure that Completion of Construction is achieved by the Outside Completion Date. Such actions may include, without limitation, the engagement of a replacement contractor (subject to Lender's prior written approval, which shall not be unreasonably withheld, conditioned, or delayed), the direct funding of construction costs, the procurement of replacement performance and payment bonds, and the prosecution of any available remedies under the GMP Contract or the performance and payment bonds issued by Allegiance Bond & Casualty Co. Guarantor shall keep Lender informed on a current basis of all actions taken pursuant to this Section 2.5.
2.6 Insurance Maintenance. Guarantor shall cause Borrower to maintain (or shall itself directly maintain, at Guarantor's sole cost and expense, if Borrower fails to do so) builder's risk insurance with Atlas Property & Casualty Insurance Company under Policy No. BRA-2024-00417, or a replacement policy from a carrier rated A- VII or better by A.M. Best Company, providing coverage of not less than Forty-Eight Million and No/100 Dollars ($48,000,000.00) (full replacement cost of the Project) at all times during the period of construction, from the date of commencement of construction through the date of Completion. Such builder's risk insurance shall name Lender as additional insured and loss payee (or mortgagee, as applicable) under a standard mortgage clause, shall be written on an "all-risk" or "special causes of loss" form, and shall comply in all respects with the insurance requirements set forth in the Loan Agreement and the Deed of Trust. Guarantor shall deliver or cause to be delivered to Lender certificates of insurance and copies of all endorsements evidencing such coverage promptly upon request.
SECTION 3. SCOPE AND NATURE OF GUARANTY
3.1 Limited Recourse. This Guaranty is a limited recourse guaranty. Guarantor's liability under this Guaranty is limited to the obligations expressly set forth herein, consisting of (a) the completion obligations set forth in Section 2 above, and (b) the Recourse Carve-Outs set forth in Section 4 below. Except as expressly provided herein, this Guaranty does not guarantee the repayment of the Loan, the payment of principal, interest, or any other amounts due under the Note, or the performance of any other obligations of Borrower under the Loan Documents. For the avoidance of doubt, the limitations on recourse set forth in this Section 3.1 are subject in all respects to the Recourse Carve-Outs set forth in Section 4 below, and the occurrence of any event described in Section 4 may result in Guarantor becoming fully and personally liable as provided therein.
3.2 Guaranty of Performance, Not Payment. This Guaranty is intended to be, and shall be construed as, a guaranty of performance — specifically, a guaranty of the timely Completion of Construction of the Project in accordance with the terms hereof — and not a guaranty of payment of the Loan indebtedness. Notwithstanding the foregoing, the parties acknowledge and agree that, to the extent Guarantor is required to fund cost overruns, construction deficiencies, or other amounts pursuant to Section 2 above in order to achieve Completion of Construction, Guarantor's obligation to make such payments is an integral part of the performance obligation guaranteed hereunder and shall be enforceable as such.
3.3 Absolute and Unconditional. Subject to the limited recourse provisions of Section 3.1 above, the obligations of Guarantor under this Guaranty are absolute, unconditional, and irrevocable, and shall not be released, diminished, impaired, or otherwise affected by any circumstance whatsoever, including, without limitation, any of the following:
(a) any amendment, modification, supplement, renewal, extension, acceleration, or other change in the terms of any of the Loan Documents, including, without limitation, any increase in the principal amount of the Loan, any change in the interest rate, or any extension of the maturity date;
(b) any extension of time for performance of any obligation of Borrower under the Loan Documents or any extension of the Outside Completion Date;
(c) any release, exchange, substitution, or impairment of any collateral securing the Loan, or any failure to perfect or maintain perfection of any lien or security interest in any such collateral;
(d) any bankruptcy, insolvency, reorganization, arrangement, assignment for the benefit of creditors, receivership, liquidation, dissolution, or similar proceeding affecting Borrower, Guarantor, or any other person or entity;
(e) any defense, set-off, counterclaim, or other right that Borrower may have or assert against Lender, whether arising under this Guaranty, any of the Loan Documents, or otherwise;
(f) any other act, omission, occurrence, or circumstance that might otherwise constitute a legal or equitable defense to, or discharge of, Guarantor's obligations under this Guaranty, whether similar or dissimilar to any of the foregoing;
(g) any release of, or grant of any indulgence or forbearance to, Borrower or any other guarantor of any obligation under the Loan Documents;
(h) the invalidity or unenforceability, in whole or in part, of any provision of any Loan Document; or
(i) any other event or circumstance that, but for this provision, would or might constitute or afford a legal or equitable discharge, release, or defense of a guarantor or surety, or that would or might limit recourse against Guarantor.
SECTION 4. RECOURSE CARVE-OUTS (FULL RECOURSE EVENTS)
Notwithstanding the limited recourse nature of this Guaranty as set forth in Section 3 above, Guarantor shall be fully and personally liable to Lender, on a recourse basis, for all losses, costs, damages, liabilities, claims, and expenses (including, without limitation, reasonable attorneys' fees and costs of collection) arising out of or related to any of the following events or circumstances (each, a "Recourse Carve-Out Event"):
4.1 Fraud. Any fraud or intentional misrepresentation by Borrower, Guarantor, IHDC, or any of their respective affiliates, officers, directors, members, partners, managers, employees, or agents, in connection with the Loan, the Loan Documents, or the Project, including, without limitation, any fraud or intentional misrepresentation contained in any application for the Loan, any financial statement, certificate, report, or other document delivered to Lender in connection with the Loan or the Project, or any draw request submitted under the Loan Agreement.
4.2 Misapplication of Funds. Any misapplication, misappropriation, diversion, or conversion of (a) Loan proceeds, (b) rents, issues, profits, or other revenues derived from the Property (including, without limitation, rents received under that certain Colocation Services Agreement dated as of January 22, 2024, between Borrower and Sentinel Cloud Services, Inc. for approximately 22,000 square feet of the Loudoun Edge Facility, and that certain Lease Agreement dated as of February 5, 2024, between Borrower and Ridgeline Federal Solutions LLC for approximately 16,000 square feet of the Loudoun Edge Facility), (c) insurance proceeds received in connection with any damage to or destruction of the Property or the Project, (d) condemnation awards or proceeds received in connection with any taking of all or any part of the Property, or (e) any other funds that, under the terms of the Loan Documents, should have been applied to the construction or operation of the Project, deposited into accounts subject to the Cash Management Agreement, or remitted to Lender.
4.3 Environmental Liability. Any and all losses, liabilities, damages, costs, and expenses (including, without limitation, investigation, remediation, and cleanup costs and reasonable attorneys' fees) arising from the presence, release, threatened release, disposal, or migration of any hazardous materials, hazardous substances, toxic substances, petroleum products, or other regulated materials on, at, under, about, or from the Property in violation of any Environmental Laws, whether such contamination existed prior to or arises after the date hereof; provided, however, that the obligations of Guarantor under this Section 4.3 shall be in addition to, and not in limitation of, the obligations of IHDC and Guarantor under the separate Environmental Indemnity Agreement dated as of March 18, 2024, executed by IHDC and Guarantor in favor of Lender.
4.4 Voluntary Bankruptcy. (a) Any voluntary filing by Borrower of a petition for relief under Title 11 of the United States Code (the "Bankruptcy Code") or under any state insolvency, receivership, assignment for the benefit of creditors, or similar law; (b) Borrower's consent to, acquiescence in, or failure to contest in a timely manner any involuntary petition filed against Borrower under the Bankruptcy Code or any state insolvency law; or (c) any action by Guarantor, Borrower, IHDC, or any affiliate, officer, director, member, partner, manager, or agent of any of the foregoing to cause, solicit, encourage, or facilitate the insolvency of Borrower or the filing of any such petition, or the appointment of a receiver, trustee, custodian, or liquidator for Borrower or its assets.
4.5 Violation of SPE Covenants. Any failure to maintain the single-purpose, bankruptcy-remote status of Borrower (Ironhaven Loudoun Edge LLC), as required by the Loan Agreement and the organizational documents of Borrower, including, without limitation, any failure to (a) maintain separateness of assets, bank accounts, books, records, and financial statements of Borrower from those of Guarantor, IHDC, or any other affiliate, (b) hold Borrower out to the public as a legal entity separate and distinct from any other entity, (c) maintain adequate capitalization of Borrower, (d) conduct the business of Borrower solely in the name of Borrower, (e) maintain at least one independent director or manager of Borrower as required by the Loan Agreement and Borrower's organizational documents, or (f) comply with any other separateness covenant or bankruptcy-remoteness requirement set forth in the Loan Agreement or Borrower's organizational documents.
4.6 Unauthorized Transfers. Any sale, conveyance, assignment, transfer, encumbrance, or other disposition of (a) the Property or any portion thereof or any interest therein, or (b) any direct or indirect membership interest in Borrower or any direct or indirect ownership interest in IHDC, in either case in violation of the transfer restrictions and "due-on-sale" provisions of the Loan Agreement, without the prior written consent of Lender.
4.7 Waste. Any act of physical waste committed on or with respect to the Property by Borrower, Guarantor, IHDC, Contractor, or any other person acting on behalf of or at the direction of Borrower or Guarantor, including, without limitation, the removal, demolition, or material alteration of any improvements on the Property (other than as contemplated by the Approved Plans and Specifications), the failure to maintain the Property in good condition and repair, or the commission of any act that materially and adversely affects the structural integrity, value, or utility of the Property.
In the event of the occurrence of any Recourse Carve-Out Event described in Section 4.4 or Section 4.5 above, the Loan shall become fully recourse to Guarantor, and Guarantor shall be personally liable for the entire outstanding principal balance of the Loan, together with all accrued and unpaid interest, fees, costs, and other amounts due and owing under the Loan Documents. In the event of the occurrence of any other Recourse Carve-Out Event described in this Section 4, Guarantor shall be personally liable for the actual losses, costs, damages, and expenses incurred by Lender as a result thereof.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF GUARANTOR
Guarantor hereby represents and warrants to Lender as of the date hereof, and such representations and warranties shall be deemed repeated as of the date of each construction draw under the Loan Agreement and as of the Completion Date, as follows:
5.1 Organization and Authority. Guarantor is a limited partnership duly organized, validly existing, and in good standing under the laws of the State of Delaware, and is duly qualified and authorized to do business in each jurisdiction where the nature of its business or the ownership or lease of its properties requires such qualification. Cobalt Ridge GP LLC, a Delaware limited liability company, is the sole general partner of Guarantor and is duly organized, validly existing, and in good standing under the laws of the State of Delaware. The General Partner has all requisite power and authority to execute, deliver, and perform this Guaranty on behalf of Guarantor, and to bind Guarantor to the obligations set forth herein.
5.2 Due Authorization. The execution, delivery, and performance of this Guaranty by Guarantor have been duly authorized by all necessary partnership action of Guarantor, including all requisite approvals of the General Partner and the Advisory Committee of Guarantor (to the extent required by the Amended and Restated Agreement of Limited Partnership of Guarantor dated as of May 14, 2021, as amended). The execution, delivery, and performance of this Guaranty by the General Partner on behalf of Guarantor have been duly authorized by all necessary limited liability company action of the General Partner. The persons executing this Guaranty on behalf of Guarantor have been duly authorized to do so.
5.3 No Conflicts. The execution, delivery, and performance of this Guaranty by Guarantor do not and will not (a) violate or conflict with the Amended and Restated Agreement of Limited Partnership of Guarantor, the Operating Agreement of the General Partner, or any other organizational or governing document of Guarantor or the General Partner, (b) violate any applicable law, statute, rule, regulation, order, judgment, decree, or writ of any governmental authority having jurisdiction over Guarantor or its assets, (c) result in a breach of, or constitute a default under, any agreement, instrument, indenture, mortgage, lease, or other contract to which Guarantor or the General Partner is a party or by which any of their respective properties or assets are bound, or (d) result in the creation or imposition of any lien, charge, or encumbrance upon any property or asset of Guarantor.
5.4 Enforceability. This Guaranty constitutes the legal, valid, and binding obligation of Guarantor, enforceable against Guarantor in accordance with its terms, subject only to (a) applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general applicability relating to or affecting creditors' rights generally, and (b) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).
5.5 Financial Condition. Guarantor has heretofore delivered to Lender true, correct, and complete copies of Guarantor's audited financial statements for the fiscal year ended December 31, 2023, and such other financial information as Lender has requested. Such financial statements have been prepared in accordance with generally accepted accounting principles consistently applied and fairly present in all material respects the financial condition and results of operations of Guarantor as of the dates and for the periods covered thereby. As of the date hereof, Guarantor is solvent, has adequate capital and liquidity to perform all of its obligations under this Guaranty, and no event has occurred that has caused or would reasonably be expected to cause a material adverse change in the financial condition, business, or operations of Guarantor since the date of such financial statements. Without limiting the generality of the foregoing, Guarantor represents and warrants that Fund III (vintage 2021) has Six Hundred Twenty Million and No/100 Dollars ($620,000,000) in committed capital and approximately One Billion Eight Hundred Million and No/100 Dollars ($1,800,000,000) in assets under management as of the date hereof, and has sufficient unfunded commitments and available capital to fulfill the obligations of Guarantor under this Guaranty.
5.6 Litigation. There is no action, suit, proceeding, investigation, or arbitration (whether or not purportedly on behalf of Guarantor) pending or, to Guarantor's knowledge, threatened against or affecting Guarantor, the General Partner, or any of their respective properties or assets before any court, arbitrator, or governmental agency that (a) involves or relates to this Guaranty, the Loan, or the Project, or (b) if determined adversely to Guarantor, would materially and adversely affect Guarantor's ability to perform its obligations under this Guaranty.
5.7 Ownership Interest. Guarantor, through its portfolio company, Ironhaven Data Centers LLC (IHDC), holds, directly or indirectly, an eighty-two percent (82%) membership interest in Borrower. IHDC is the sole member of Borrower (Ironhaven Loudoun Edge LLC). Guarantor's ownership interest in IHDC, and IHDC's ownership of Borrower, are accurately described in the organizational charts and ownership certifications delivered to Lender in connection with the Loan. No person or entity other than IHDC holds any direct or indirect equity interest in Borrower.
5.8 Equity Contribution. Guarantor has funded or caused to be funded the cash equity contribution of Twelve Million and No/100 Dollars ($12,000,000.00) into escrow with Meridian Surety & Title Company as of March 22, 2024, which amount represents approximately 21.1% of the total project cost of Fifty-Seven Million and No/100 Dollars ($57,000,000.00). The source of the equity contribution is committed capital of Fund III, and no portion of the equity contribution has been financed with the proceeds of any loan or credit facility secured by the Property or any interest in Borrower.
5.9 No Governmental Approvals. No consent, license, permit, approval, order, or authorization of, or registration, declaration, or filing with, any federal, state, local, or foreign governmental authority, regulatory body, or other agency is required in connection with the execution, delivery, or performance of this Guaranty by Guarantor, other than (a) those that have already been obtained or made as of the date hereof, and (b) routine filings and notices that may be required after the date hereof in the ordinary course of business, all of which Guarantor shall cause to be timely made.
SECTION 6. COVENANTS OF GUARANTOR
Guarantor covenants and agrees with Lender as follows:
6.1 Financial Reporting. Guarantor shall furnish or cause to be furnished to Lender the following financial information:
(a) Annual Audited Financial Statements. Within one hundred twenty (120) days after the end of each fiscal year of Guarantor, the audited financial statements of Guarantor for such fiscal year, prepared in accordance with generally accepted accounting principles consistently applied, audited by a nationally or regionally recognized independent certified public accounting firm reasonably acceptable to Lender, together with such firm's unqualified opinion thereon (or an opinion with qualifications acceptable to Lender in its reasonable discretion);
(b) Quarterly Unaudited Financial Statements. Within forty-five (45) days after the end of each fiscal quarter of Guarantor (other than the fourth fiscal quarter), the unaudited financial statements of Guarantor for such fiscal quarter, prepared in accordance with generally accepted accounting principles consistently applied (subject to normal year-end audit adjustments and the absence of footnotes), certified by an authorized representative of Guarantor as fairly presenting in all material respects the financial condition and results of operations of Guarantor as of the date and for the period covered thereby; and
(c) Other Information. Such other financial information, reports, and data regarding the financial condition, business, operations, or assets of Guarantor as Lender may from time to time reasonably request, within a reasonable period of time following such request.
6.2 Notice of Material Events. Guarantor shall promptly (and in any event within five (5) business days) notify Lender in writing of the occurrence of any of the following:
(a) any material adverse change in the financial condition, business, operations, or prospects of Guarantor or any material impairment of Guarantor's ability to perform its obligations under this Guaranty;
(b) any default or Event of Default under this Guaranty, or any event that, with the giving of notice or the lapse of time or both, would constitute a default or Event of Default under this Guaranty;
(c) the commencement or threatened commencement of any litigation, arbitration, governmental investigation, or other proceeding against Guarantor, the General Partner, Borrower, or IHDC that could reasonably be expected to materially and adversely affect Guarantor's ability to perform its obligations hereunder or the completion of the Project;
(d) any material change in the ownership, management, or control of Guarantor, the General Partner, or IHDC, including, without limitation, any change in the identity of the Managing Partner or any Partner of Guarantor, any change in the general partner of Guarantor, or any transfer or issuance of limited partnership interests in Guarantor representing ten percent (10%) or more of the aggregate limited partnership interests; and
(e) any casualty, condemnation, or other event affecting the Property or the Project that could reasonably be expected to delay Completion beyond the Outside Completion Date.
6.3 Preservation of Existence. Guarantor shall maintain its existence and good standing as a limited partnership under the laws of the State of Delaware and shall not dissolve, wind up, liquidate, merge with or into any other entity, or consolidate with any other entity, without the prior written consent of Lender. Guarantor shall cause the General Partner to maintain its existence and good standing as a limited liability company under the laws of the State of Delaware.
6.4 Compliance with Laws. Guarantor shall comply in all material respects with all applicable federal, state, and local laws, statutes, rules, regulations, orders, judgments, decrees, and other requirements of any governmental authority having jurisdiction over Guarantor, its business, or its properties.
6.5 Cooperation in Completion. Guarantor shall use commercially reasonable efforts to cooperate with Lender, the Independent Engineer (Whitmore & Associates, PC), Borrower, Contractor, and all other parties involved in the construction of the Project to facilitate the timely Completion of Construction of the Project on or before the Outside Completion Date. Without limiting the foregoing, Guarantor shall (a) cause Borrower and Contractor to provide Lender and the Independent Engineer with access to the Property and the Project site at all reasonable times for purposes of inspection and monitoring, (b) cause Borrower to submit timely draw requests in accordance with the Loan Agreement, (c) cause Borrower and Contractor to maintain accurate and complete construction records, and (d) participate in periodic construction progress meetings as reasonably requested by Lender or the Independent Engineer.
SECTION 7. WAIVERS BY GUARANTOR
7.1 General Waivers. Guarantor hereby unconditionally and irrevocably waives, to the fullest extent permitted by applicable law, each and all of the following:
(a) notice of acceptance of this Guaranty by Lender, it being acknowledged that this Guaranty is deemed accepted by Lender upon execution and delivery hereof;
(b) presentment for payment, demand for payment, notice of dishonor, protest, and notice of protest with respect to any obligation of Borrower under the Loan Documents;
(c) notice of any default or Event of Default under the Loan Documents, and notice of any action taken by Lender in connection therewith;
(d) any right to require Lender to proceed first against Borrower, to exhaust any security or collateral held for the Loan, or to pursue any other remedy before proceeding against Guarantor under this Guaranty, Guarantor hereby waiving all rights and defenses arising out of any suretyship or guarantor relationship, including, without limitation, any defense of marshaling and any right of exoneration;
(e) any defense based upon or arising out of any statute of limitations applicable to Guarantor's obligations under this Guaranty;
(f) any defense based upon or arising out of the release, exchange, substitution, or impairment of any collateral or security for the Loan, or Lender's failure to take, perfect, or maintain any lien or security interest in any such collateral;
(g) any defense arising from the disability, lack of capacity, death, dissolution, liquidation, insolvency, bankruptcy, or other incapacity of Borrower, Guarantor, or any other person or entity;
(h) until such time as the Loan has been repaid in full and all obligations of Guarantor under this Guaranty have been fully satisfied and performed, any and all rights of subrogation, contribution, reimbursement, exoneration, or indemnification that Guarantor may now or hereafter have against Borrower, any other guarantor, or any collateral securing the Loan, and any right to enforce any remedy that Lender now has or may hereafter have against Borrower or any other guarantor, and any benefit of, or right to participate in, any collateral or security now or hereafter held by Lender; and
(i) any and all rights and defenses available to Guarantor under Virginia Code §§ 49-25 and 49-26 (or any successor or replacement statutes thereto), and any and all other rights and defenses available to sureties and guarantors under the laws of the Commonwealth of Virginia or any other applicable jurisdiction.
7.2 Waiver of Subrogation. Without limiting the generality of Section 7.1(h) above, Guarantor hereby expressly waives, until all guaranteed obligations have been fully performed, all obligations under the Loan Documents have been fully satisfied, and the Loan has been repaid in full, any and all rights of subrogation against Borrower, IHDC, or any other person or entity, and any right of contribution from or against any other guarantor of any obligation under the Loan Documents. Guarantor agrees not to assert, enforce, or otherwise exercise any such right until such time as all of the foregoing conditions have been satisfied in full.
SECTION 8. LENDER'S RIGHTS AND REMEDIES
8.1 Enforcement. Upon (a) Borrower's failure to achieve Completion of Construction by the Outside Completion Date (September 30, 2025), (b) the occurrence of any Event of Default under the Loan Agreement that is directly or indirectly related to the construction or completion of the Project, or (c) any breach by Guarantor of its obligations under this Guaranty, Lender may, at its option and without prior notice to Guarantor (except as may be required by applicable law), demand that Guarantor immediately perform any or all of its obligations under this Guaranty, including, without limitation, the obligation to fund all amounts necessary to achieve Completion of Construction. Such demand may be made by written notice delivered to Guarantor in accordance with Section 12 of this Guaranty, and Guarantor shall comply with such demand within the time periods specified herein or, if no time period is specified, within fifteen (15) business days after receipt of such demand.
8.2 Remedies Cumulative. The rights and remedies of Lender under this Guaranty are cumulative and are in addition to, and not in lieu of, any and all other rights and remedies available to Lender under the Loan Documents, at law, in equity, or otherwise. Without limiting the generality of the foregoing, Lender's rights under this Guaranty are in addition to any rights Lender may have under the Deed of Trust, the Assignment of Construction Contract, the Environmental Indemnity Agreement, the Pledge Agreement, the performance and payment bonds issued by Allegiance Bond & Casualty Co., or any other security or credit support for the Loan.
8.3 No Election of Remedies. Lender's exercise or failure to exercise any right or remedy under this Guaranty, the Loan Documents, or otherwise, shall not preclude or limit Lender's exercise of any other right or remedy, and no single or partial exercise of any right or remedy shall preclude any further or other exercise of such right or remedy or any other right or remedy. No delay or omission by Lender in exercising any right or remedy shall operate as a waiver thereof, and no waiver of any right or remedy shall be effective unless made in writing and signed by Lender.
8.4 Right to Cure. Lender may, in its sole and absolute discretion, but shall not be obligated to, cure any default by Guarantor or Borrower related to Completion of Construction, including, without limitation, engaging contractors, ordering materials, paying suppliers, or taking any other action that Lender deems necessary or advisable to protect its interests in the Project and achieve Completion. Guarantor shall reimburse Lender on demand for all costs, expenses, and disbursements incurred by Lender in connection with any such cure, together with interest thereon at the default rate specified in the Note from the date of each such expenditure until the date of reimbursement. Any amounts not reimbursed by Guarantor within ten (10) business days after demand shall bear interest at the default rate and shall be deemed obligations guaranteed hereunder.
SECTION 9. RELEASE OF GUARANTY
9.1 Conditions for Release. Subject to Section 9.2 below, this Guaranty shall automatically terminate and be of no further force or effect upon the satisfaction of all of the following conditions (each a "Release Condition" and collectively, the "Release Conditions"):
(a) Achievement of Completion of Construction of the Project, as certified in writing by the Independent Engineer (Whitmore & Associates, PC) to Lender;
(b) Issuance by the Loudoun County Department of Building and Development of a final certificate of occupancy (or, if acceptable to Lender in its sole discretion, a temporary certificate of occupancy) for the Loudoun Edge Facility, permitting the lawful occupancy and use thereof as a data center;
(c) Delivery to Lender of final, unconditional lien waivers and releases from Marlowe Asset Management-Pacific Construction, Inc. and all subcontractors, materialmen, and material suppliers who performed work on or furnished materials for the Project, in form and substance satisfactory to Lender;
(d) Delivery to Lender of an as-built survey of the Property and the completed improvements thereon, prepared by a licensed surveyor and meeting the requirements of the Loan Agreement;
(e) Confirmation by Lender, in its reasonable discretion, that all Conversion Conditions under the Loan Agreement have been satisfied for the conversion of the Loan from a construction loan to a permanent loan, including, without limitation: (i) achievement of the seventy percent (70%) pre-leasing threshold, requiring that not less than 36,400 rentable square feet of the 52,000 square foot Loudoun Edge Facility be leased to creditworthy tenants under executed leases acceptable to Lender (as of the date hereof, the Project has achieved approximately 73.1% pre-leasing, consisting of the Sentinel Cloud Services, Inc. lease for approximately 22,000 square feet and the Ridgeline Federal Solutions LLC lease for approximately 16,000 square feet, totaling approximately 38,000 square feet); (ii) receipt by Lender of an updated as-stabilized appraisal confirming a loan-to-value ratio within the parameters required by the Loan Agreement; and (iii) satisfaction of all other conditions to conversion set forth in the Loan Agreement; and
(f) The absence of any outstanding Event of Default under the Loan Agreement or under this Guaranty.
Upon satisfaction of all Release Conditions, Lender shall, within thirty (30) days following written request from Guarantor accompanied by evidence of satisfaction of all Release Conditions, deliver to Guarantor a written release and discharge of this Guaranty in form reasonably acceptable to Guarantor and Lender.
9.2 Survival of Recourse Carve-Outs. Notwithstanding the provisions of Section 9.1 above, Guarantor's liability under the Recourse Carve-Outs set forth in Section 4 of this Guaranty shall survive the termination and release of this Guaranty and shall continue in full force and effect for the full remaining term of the Loan (including any extensions thereof) and thereafter with respect to any Recourse Carve-Out Event that occurred or arose during the term of the Loan, regardless of whether such event is discovered before or after the termination of this Guaranty. The survival provisions of this Section 9.2 shall not be subject to any statute of limitations defense to the extent permitted by applicable law.
SECTION 10. CONSENT TO MODIFICATIONS
10.1 Consent to Modifications. Guarantor hereby irrevocably consents to and agrees that its obligations under this Guaranty shall not be released, diminished, impaired, or otherwise affected by any of the following, and Guarantor hereby waives any defense that might otherwise arise therefrom:
(a) any amendment, modification, supplement, restatement, or replacement of any of the Loan Documents, including, without limitation, any increase in the principal amount of the Loan, any change in the interest rate or payment terms, any extension of the maturity date, or any modification of the construction draw procedures;
(b) any release, exchange, or substitution of any collateral or security for the Loan, or any failure to take, perfect, or maintain any lien or security interest in any collateral;
(c) any extension of the Outside Completion Date, whether by formal amendment to the Loan Agreement or by Lender's forbearance, subject to the payment by Borrower or Guarantor of any applicable extension fee (currently set at 0.50% of the loan commitment amount) as provided in the Loan Agreement;
(d) any change, modification, or revision to the Approved Project Budget, the Approved Plans and Specifications, or the construction schedule, in each case with Lender's prior written approval; or
(e) any substitution of, or replacement for, Contractor, whether by reason of Contractor's default, termination of the GMP Contract, or otherwise; provided that Lender has consented to such substitution or replacement in writing.
SECTION 11. INDEMNIFICATION
11.1 Indemnification. Guarantor shall indemnify, defend (with counsel reasonably acceptable to Lender), and hold harmless Lender and its officers, directors, employees, agents, representatives, successors, and assigns (each, an "Indemnified Party" and collectively, the "Indemnified Parties") from and against any and all claims, demands, actions, suits, proceedings, losses, liabilities, damages, judgments, penalties, fines, costs, and expenses (including, without limitation, reasonable attorneys' fees, court costs, expert witness fees, and costs of investigation) (collectively, "Losses") that any Indemnified Party may suffer, sustain, or incur, arising out of, resulting from, or relating to:
(a) the failure to achieve Completion of Construction by the Outside Completion Date (September 30, 2025), including, without limitation, any costs incurred by Lender in completing the Project or in engaging contractors, engineers, or other professionals to complete the Project;
(b) any breach of any representation, warranty, or covenant of Guarantor contained in this Guaranty; or
(c) the enforcement of this Guaranty or any action or proceeding brought by Lender to enforce its rights hereunder, to the extent Lender prevails in any material respect in such action or proceeding.
The indemnification obligations of Guarantor under this Section 11 shall survive the termination of this Guaranty (subject to Section 9.2 above) and shall be in addition to, and not in limitation of, any other indemnification or other obligations of Guarantor, Borrower, or IHDC under the Loan Documents.
SECTION 12. NOTICES
All notices, demands, requests, consents, approvals, and other communications required or permitted under this Guaranty shall be in writing and shall be deemed to have been duly given and received when (a) delivered personally, (b) delivered by a nationally recognized overnight courier service (with tracking capability), or (c) sent by certified mail, return receipt requested, postage prepaid, to the parties at the following addresses (or such other address as a party may designate by written notice to the other parties in accordance with this Section 12):
If to Guarantor:
Cobalt Ridge Capital Partners, LP 300 Park Avenue South, 14th Floor New York, New York 10010
Attention: Marcus J. Kellner, Managing Partner
with a copy (which shall not constitute notice) to:
Cobalt Ridge Capital Partners, LP 300 Park Avenue South, 14th Floor New York, New York 10010
Attention: Priya Ramanathan, Partner, Head of Digital Infrastructure
If to Lender:
Pinnacle Federal Savings Bank 800 Constitution Avenue NW, Suite 550 Washington, D.C. 20001
Attention: Thomas R. Whitfield, Senior Vice President, Technology & Data Center Lending
with a copy (which shall not constitute notice) to:
Pinnacle Federal Savings Bank 800 Constitution Avenue NW, Suite 550 Washington, D.C. 20001
Attention: Sandra Ng, Executive Vice President, Credit Administration
If to Lender's Counsel:
Hargrove, Liddell & Pace LLP 1750 K Street NW, Suite 900 Washington, D.C. 20006
Attention: Jonathan Breckinridge, Partner
If to Borrower's Counsel:
Calderwood & Harkness LLP 2001 M Street NW, Suite 1200 Washington, D.C. 20036
Attention: Angela Fontaine, Partner
Notices delivered personally or by overnight courier shall be effective upon receipt. Notices sent by certified mail shall be effective three (3) business days after the date of mailing. Any party may change its address for the receipt of notices by providing written notice of such change to the other parties in accordance with this Section 12.
SECTION 13. GOVERNING LAW; JURISDICTION; VENUE
13.1 Governing Law. This Guaranty shall be governed by, and construed and enforced in accordance with, the laws of the Commonwealth of Virginia, without giving effect to any choice of law or conflict of law rules or provisions (whether of the Commonwealth of Virginia or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the Commonwealth of Virginia.
13.2 Jurisdiction and Venue. Guarantor hereby irrevocably and unconditionally submits to the exclusive jurisdiction of (a) the courts of the Commonwealth of Virginia, including the Circuit Court of Loudoun County, Virginia, and (b) the United States District Court for the Eastern District of Virginia (Alexandria Division), for the purposes of any suit, action, or proceeding arising out of or relating to this Guaranty. Guarantor hereby irrevocably waives, to the fullest extent permitted by applicable law, any objection that it may now or hereafter have to the laying of venue of any such suit, action, or proceeding in any such court, and any claim that any such suit, action, or proceeding brought in any such court has been brought in an inconvenient forum. Guarantor agrees that a final judgment in any such suit, action, or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.
13.3 WAIVER OF JURY TRIAL. GUARANTOR AND LENDER EACH HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING, CLAIM, OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS GUARANTY, THE LOAN DOCUMENTS, THE LOAN, THE PROJECT, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE. GUARANTOR AND LENDER EACH HEREBY AGREE THAT ANY SUCH ACTION, SUIT, PROCEEDING, CLAIM, OR COUNTERCLAIM SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. EACH PARTY ACKNOWLEDGES THAT THIS WAIVER IS A MATERIA