01—Abstract
Summary
Summary of the 8-K filed June 21, 2024. Cited figures are marked; the original filing is the authoritative source.
Super Micro Computer, Inc. disclosed in this Form 8-K, filed June 21, 2024, that on June 14, 2024 it entered into a Master Colocation Services Agreement (MCSA) with 4701 Santa Fe, LLC (the Supplier) to lease data center space owned by the Supplier.
The MCSA is a master agreement of general terms, with each individual data center space to be documented in a separate service order specifying property and space details. Concurrently, the company entered into Service Order MCSA-001 with the Supplier to lease data center space in Vernon, California, covering 21 MW of a multi-tenanted facility for a term of 10 years. The company's aggregate financial obligation for the term of the service order is estimated at $600.0 milliona, including monthly recurring charges, power charges and other anticipated costs.
This obligation is disclosed under Item 2.03 as a direct financial obligation or off-balance sheet arrangement. The company also entered into a Sublicense with Lambda, Inc. to sublicense all of its rights and obligations for the Data Center Space.
Lambda assumes performance of the company's obligations under the MCSA and service order, pays the company the monthly recurring charges plus an additional monthly charge, and pays other charges directly to the Supplier. If the Supplier accelerates payments following a default and exercises remedies, the company may seek reimbursement from Lambda under the Sublicense.
02—Key points
Key Highlights
- Entered a Master Colocation Services Agreement with 4701 Santa Fe, LLC on June 14, 2024 to lease data center space owned by the Supplier.
- Service Order MCSA-001 covers 21 MW of multi-tenanted data center space in Vernon, California, for a 10-year term.
- Estimated aggregate financial obligation for the service order term is $600.0 million, including recurring, power and other anticipated costs.
- Sublicensed all rights and obligations for the Vernon data center space to Lambda, Inc., which assumes the company's obligations and pays recurring charges plus an additional monthly charge.
- Lambda pays the Supplier directly for other charges, while the company remains exposed to accelerated payments if the Supplier exercises remedies after a default, subject to its reimbursement right against Lambda.
- The obligation is disclosed under Item 2.03 as a direct financial obligation or off-balance sheet arrangement.
- Certain exhibits (MCSA, Service Order and Sublicense) have been redacted under Regulation S-K Item 601(b)(10).
03—Questions
Frequently Asked Questions
What did Super Micro Computer agree to in this filing?
The company entered into a Master Colocation Services Agreement and Service Order MCSA-001 with 4701 Santa Fe, LLC to lease 21 MW of data center space in Vernon, California, for a 10-year term.
What is the estimated financial commitment?
The aggregate financial obligation for the service order term is estimated at $600.0 million, including monthly recurring charges, power charges and other anticipated costs.
Who is responsible for the data center space now?
Under a concurrent Sublicense, Lambda, Inc. assumes all of the company's obligations, covenants and terms under the MCSA and Service Order, pays the recurring charges plus an additional monthly charge to the company, and pays other charges directly to the Supplier.
Does the company retain any risk?
Yes. The Supplier may accelerate payments upon a default under the MCSA or Service Order and exercise remedies. In that case, the company has a right to seek reimbursement for accelerated payments from Lambda under the Sublicense.
Why is this filing significant for investors?
The filing discloses a long-term, $600.0 million obligation for data center capacity, which is structured as a direct financial obligation or off-balance sheet arrangement under Item 2.03, with its economics partly passed to Lambda through the Sublicense.
04—Continue