When must a platform investor fund a new data centre, and what must be true when it does?
The LLC agreement lets Applied Digital and Macquarie each run other data centre businesses, and neither must offer a corporate opportunity to the platform except through a process that is redacted in the filing. When Macquarie accepts a new project, it funds its share in cash for new preferred units at $1,000 each, at the same time as Applied Digital funds its own share. Macquarie need not fund unless the project’s lease is in full force with no material default, the platform is not in material default on its debt, no trigger or step-in event is outstanding, and the platform is solvent. For in-house teams: these conditions mirror a lender’s drawstop, so check that the lease and debt documents will not trip them.
Randeep Bubbra | Lawyer | Making the next generation of infrastructure financeable · Firm profile ·
What the filed contracts say
Contract
What the filed wording says
APLD HPC TopCo 2 LLC agreement
Each member may compete, and need not offer a corporate opportunity to the platform, subject to the redacted opportunity process.
APLD HPC TopCo 2 LLC agreement
For an accepted project the investor funds its share in cash, for preferred units at $1,000 each.
APLD HPC TopCo 2 LLC agreement
The sponsor must fund its own share at the same time.
APLD HPC TopCo 2 LLC agreement
The project’s lease must be in full force with no material default.
APLD HPC TopCo 2 LLC agreement
The platform must not be in material default on its debt, must have no trigger or step-in event outstanding, and must be solvent.
The filed wording
each of APLD, APLD Holdings, Macquarie Investor and their respective Affiliates (each a “Business Opportunity Exempt Person”) has the right to, and shall have no duty (contractual, fiduciary or otherwise) not to, directly or indirectly engage in any business, business activity or line of business, including those that are the same or similar to those of the Company or any of its Subsidiaries or may be deemed to be Competing with the Company or any of its Subsidiaries by virtue of any equity ownership in the Company or service as the Members or otherwise; and in the event that any Business Opportunity Exempt Person acquires knowledge of a potential transaction or matter that would be generally recognized under Delaware law as a corporate opportunity for any of the Company and/or one or more of its Subsidiaries, on the one hand, and such Business Opportunity Exempt Person, on the other hand, except as set forth in Section 6.11(b), such Business Opportunity Exempt Person shall have no duty (contractual, fiduciary or otherwise) to communicate or present such corporate opportunity to the Company or any of its Subsidiaries, or to any Member, as the case may be, by virtue of any equity ownership in the Company or otherwise, and may pursue such corporate opportunity independent of the Company and the other Members, in which case, neither the Company nor any other Members shall have any right to any interest therein.
APLD HPC TopCo 2 amended and restated LLC agreement (Macquarie preferred units, Applied Digital common units), section 6.11(a) · Applied Digital 8-K, Exhibit 10.2
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.
