How does a preferred equity investor fund a data centre platform in stages?
Macquarie agreed to invest up to $450m of preferred equity in the Applied Digital platform that owns its Ellendale campus. It paid $112.5m at the first closing and also received common units equal to 7.5% of the platform. Two further tranches of $168.75m each are tied to particular buildings. Macquarie must fund a tranche only once the platform has closed the construction financing for that building, within the leverage policy. Applied Digital had to put in at least $500m of its own equity first. No closing can happen while any data centre lease or the financing is in default. Each closing has its own outside date. For in-house teams: staged equity is only as certain as the debt it waits for, so line up the construction loan timetable with the equity outside dates.
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What the filed contracts say
Contract
What the filed wording says
Macquarie–Applied Digital unit purchase agreement
At the first closing the investor paid $112.5m for preferred units and received common units equal to 7.5% of the fully diluted common equity.
Macquarie–Applied Digital unit purchase agreement
Each later tranche of $168.75m is due only once the platform closes the construction financing for that building.
Macquarie–Applied Digital unit purchase agreement
No closing while there is a default under any data centre lease or the construction or bridge financing.
Macquarie–Applied Digital unit purchase agreement
The sponsor must have put in at least $500m of equity before the first closing.
Macquarie–Applied Digital unit purchase agreement
Each closing has its own outside date: 31 October 2025, 31 December 2025 and 31 March 2026.
The filed wording
(a) At the Initial Closing, subject to the terms and conditions of this Agreement: (i) The Purchaser agrees to purchase from the Issuer, and the Issuer agrees to sell and issue to the Purchaser, an aggregate amount of One Hundred Twelve Thousand Five Hundred (112,500) Preferred Units at a price per unit equal to the Preferred Price Per Unit, representing an aggregate consideration of One Hundred Twelve Million Five Hundred Thousand Dollars ($112,500,000), free and clear of any Encumbrances other than restrictions on transfer under the A&R LLC Agreement and applicable state and federal securities Laws. The Preferred Units issued to the Purchaser pursuant to this Section 1.1(a)(i) shall be referred to in this Agreement as the “Initial Purchased Units”. (ii) The Purchaser agrees to accept from the Issuer, and the Issuer agrees to issue to the Purchaser, such number of Common Units representing, in the aggregate, seven and one half percent (7.5%) of the fully diluted common equity of the Issuer as of immediately following the Initial Closing, free and clear of any Encumbrances other than restrictions on transfer under the A&R LLC Agreement and applicable state and federal securities Laws. The Common Units issued to the Purchaser pursuant to this Section 1.1(a)(ii) shall be referred to in this Agreement as the “Issued Units.” … (b) If the Issuer consummates the Specified Financing with respect to ELN Building 02 on terms substantially consistent with those set forth on Schedule 6 hereto and otherwise in compliance with the terms and conditions set forth in Section 6.15 (Leverage Policy) of the A&R LLC Agreement (including, for the avoidance of doubt, the Specified Cure Period) within the Additional Financing Period, the Issuer shall promptly deliver written notice thereof (the “First Additional Closing Notice”) to the Purchaser and APLD. If the Issuer delivers the First Additional Closing Notice, then, at the First Additional Closing, subject to the terms and conditions of this Agreement, the Purchaser agrees to purchase from the Issuer, and the Issuer agrees to sell and issue to the Purchaser, an aggregate amount of One Hundred Sixty-Eight Thousand Seven Hundred Fifty (168,750) Preferred Units, at a price per unit equal to the Preferred Price Per Unit, representing an aggregate consideration of One Hundred Sixty-Eight Million Seven Hundred Fifty Thousand Dollars ($168,750,000) … For the avoidance of doubt, the Purchaser shall have no obligation hereunder to acquire any of the First Additional Purchased Units unless and until the conditions set forth in Section 1.3(b) have been satisfied, including consummation of the Specified Financing with respect to ELN Building 02 on terms substantially consistent with those set forth on Schedule 6 hereto and otherwise in compliance with the terms set forth in Section 6.15 (Leverage Policy) of the A&R LLC Agreement (including, for the avoidance of doubt, the Specified Cure Period) within the Additional Financing Period and delivery of the First Additional Closing Notice in accordance with this Section 1.1(b).
Macquarie preferred equity in Applied Digital’s HPC platform: amended and restated unit purchase agreement (up to $450m), section 1.1(a) and (b) · 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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