Can the sponsor put money in, or take it out, between equity closings?
If there is an emergency, or construction spend is needed sooner than budgeted, Applied Digital may advance money on two business days’ notice, or use up to $20m a year of the platform’s cash. That applies only when the platform cannot draw its debt or Macquarie’s commitment, and the advances earn no units and no return. In the other direction, for 30 months Applied Digital may borrow platform cash to develop its own pipeline, up to the lesser of $100m and 20% of its contributions. The loan bears interest at the platform’s average cost of debt, paid monthly in cash and never in kind. It matures on 6 April 2028, or earlier if the redemption or put right is exercised. For in-house teams: on the sponsor side, these clauses keep a project moving between closings; on the investor side, cap and date any cash that leaves the platform.
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What the filed contracts say
Contract
What the filed wording says
APLD HPC TopCo 2 LLC agreement
In an emergency, or for construction spend needed early, the sponsor may advance money on two business days’ notice, or use up to $20m a year of platform cash.
APLD HPC TopCo 2 LLC agreement
Only when the platform cannot draw its debt or the investor’s commitment.
APLD HPC TopCo 2 LLC agreement
Sponsor advances earn no units and no return.
APLD HPC TopCo 2 LLC agreement
For 30 months the sponsor may borrow platform cash for its own pipeline, up to the lesser of $100m and 20% of its contributions.
APLD HPC TopCo 2 LLC agreement
Interest is the platform’s average cost of debt, paid in cash, never in kind.
APLD HPC TopCo 2 LLC agreement
The loan matures on 6 April 2028, or earlier if the redemption or put right is exercised.
The filed wording
3.05 Specified Funding Event. (a) In the event of (1) an Emergency or (2) the Members reasonably determining that capital is needed for construction capital expenditures which are reasonably expected to be included in a budget for a future calendar year that, based on the reasonable judgement of the Company in good faith, are required or necessary to be funded within the current calendar year (each circumstance under clause (1) and clause (2), a “Specified Funding Event”), then, alternatively to any rights set forth under Section 3.04(f)(vi) and within the time needed to fund such construction capital expenditures (provided, that the Company is not able to draw from any existing Indebtedness (including the Construction Financing) or pursuant to Macquarie Investor’s commitment under Sections 3.04(c), 6.11 and 6.12), APLD Holdings shall be entitled to, upon two (2) Business Days’ notice to the Macquarie Investor, (i) advance to the Company any amounts required to fund any Specified Funding Event (“APLD Specified Funding”), and/or (ii) cause the Company to use any Adjusted Distributable Cash in the aggregate amount of up to Twenty Million Dollars ($20,000,000) per calendar year to fund any such Specified Funding Event (“Company Cash Specified Funding” and together with any APLD Specified Funding, each a “Specified Funding”). … (d) For the avoidance of doubt, no Units shall be issued and no interest, rate of return or other similar payment shall be due to APLD Holdings in connection with the funding of any APLD Specified Funding pursuant to this Section 3.05.
APLD HPC TopCo 2 amended and restated LLC agreement (Macquarie preferred units, Applied Digital common units), section 3.05 · 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.
