Which events outside the borrower’s control can put a development loan into default?
The $100m note makes it an event of default if anyone materially breaches, or if any party ends, a material project document. Those include the lease, the utility’s electric service agreement and other utility contracts, the construction contract including any guaranteed maximum price contract, and purchase orders for power equipment. A default by the utility or the builder can therefore default the loan. The loan is secured by a first priority construction mortgage with an assignment of rents and leases, and cross-defaults to other debt of $30m or more.
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What the filed contracts say
Contract
What the filed wording says
Macquarie $100m development note
A material breach by any party of, or the end of, any material project document is an event of default.
Macquarie $100m development note
Material project documents include the lease, the utility electric service agreement, other utility contracts, the construction contract including any GMP contract, and power equipment purchase orders.
Macquarie $100m development note
The loan is secured by a first priority construction mortgage with an assignment of rents and leases.
Macquarie $100m development note
It cross-defaults to other debt of $30m or more.
The filed wording
(f) (i) any Note Party shall fail to make any payment in respect of Indebtedness (except Indebtedness referenced in clause (d) of the definition thereof) in an aggregate principal amount of $30,000,000 or more … (m) (i) a material breach by any party to or material default under any Material Project Document has occurred after taking any applicable grace periods into account or (ii) a Material Project Document shall terminate or cease for any reason to be in full force and effect;
Macquarie development loan to Applied Digital (APLD DevCo), $100m, for a hyperscale campus before the lease, section 6(f) and (m) · Applied Digital 8-K, Exhibit 10.1
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.
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