What happens to the GPUs when the colocation contract ends?
If the contract ends after a default, the provider wants its hall back and the lender wants its servers. The filed contracts give the customer a set time to remove its equipment, then let the provider remove, store or dispose of it. Enovum must use reasonable efforts not to dispose of servers without the consent of a lender with a recorded lien that it has been told about. Vernon charges holdover at up to double the last monthly rate.
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What the filed contracts say
Contract
What the filed wording says
Enovum / Nscale MSA
The customer has 60 days to remove its equipment. After that, Enovum may disconnect, remove and store it at the customer’s cost.
Enovum / Nscale MSA
Enovum may then dispose of it, but must use reasonable efforts not to without the consent of a lender with a recorded lien it has been told about, and must let entitled third parties in to remove it.
Vernon colocation MCSA
The customer must remove everything and restore the space when the term ends.
Vernon colocation MCSA
Staying on is holdover: 150% of the last monthly rate for two months, then 200%.
Supermicro / Lambda sublicense
Lambda’s holdover is 200% from the first month, plus Supermicro’s losses, including what it owes the provider.
The filed wording
within sixty (60) days of expiration or the earlier termination of this Agreement, Customer shall remove all of its equipment and other personal property (which shall include any hardware or software licensed by Customer from a third party) from the Facility. If Customer fails to remove its equipment or other personal property within such sixty (60) day period, or such extension date as may be mutually agreed by the Parties, then Enovum may, at Customer’s expense and with prior notice to Customer, disconnect, remove and store Customer’s equipment or other personal property in a location that will reasonably prevent any damage to such Customer’s equipment or other personal property.
Each extract is quoted from the contract as filed with the SEC, checked against the filed text when it was added; “…” marks words left out. Filers redact commercial terms, so a [***] or [*] is the filer's, not ours. The summaries describe the wording, not how a court would read it, and each contract's defined terms and other clauses can change the effect. General information drawn from public filings. It is not legal advice on any transaction, and using this page does not create a lawyer-client relationship. Views are personal.
InfraCompute Weekly
The week in compute finance, read from the filings.
Deals, terms and the clauses behind them, for the people financing data centres, GPU clouds and the power behind them. By Randeep Bubbra.
