ESCROW AGREEMENT
(Virginia Campus Construction)
$475,000,000
Dated as of June 3, 2024
among
IRONHAVEN DATA CENTERS LLC, a Delaware limited liability company, as Depositor,
CRESCENT HARBOR BANK, NATIONAL ASSOCIATION, a national banking association, as Administrative Agent,
and
PINNACLE TRUST COMPANY, N.A., a national trust company, as Escrow Agent
TABLE OF CONTENTS
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CONFIDENTIAL — This document is being furnished solely to the parties hereto and their respective legal counsel in connection with the transactions described herein. This document shall not be reproduced or distributed to any other person without the prior written consent of the Administrative Agent.
ESCROW AGREEMENT
(Virginia Campus Construction)
This ESCROW AGREEMENT (this "Agreement") is made and entered into as of June 3, 2024 (the "Effective Date"), by and among:
(1) IRONHAVEN DATA CENTERS LLC, a Delaware limited liability company (the "Depositor" or "IHDC"), with its principal office at 4500 Dominion Ridge Boulevard, Suite 300, Ashburn, Virginia 20147;
(2) CRESCENT HARBOR BANK, NATIONAL ASSOCIATION, a national banking association (the "Administrative Agent" or "CHB"), with its principal office at 1200 Harbor Point Drive, Charlotte, North Carolina 28202, acting in its capacity as Administrative Agent under the Credit Agreement (as defined below); and
(3) PINNACLE TRUST COMPANY, N.A., a national trust company (the "Escrow Agent"), with its principal office at 101 Constitution Avenue NW, Washington, D.C. 20001.
The Depositor, the Administrative Agent, and the Escrow Agent are sometimes referred to herein individually as a "Party" and collectively as the "Parties."
RECITALS
A. Credit Agreement. Reference is hereby made to that certain Senior Secured Term Loan B Credit Agreement, dated as of May 15, 2024 (as the same may be amended, restated, supplemented, or otherwise modified from time to time, the "Credit Agreement"), among Ironhaven Data Centers LLC, a Delaware limited liability company (in its capacity as Borrower), Ironhaven Frankfurt GmbH, a German limited liability company organized under the laws of the Federal Republic of Germany (in its capacity as Co-Borrower), Ironhaven Holdings Inc., a Delaware corporation (in its capacity as Parent Guarantor), Crescent Harbor Bank, National Association (in its capacity as Administrative Agent), Pinnacle Trust Company, N.A. (in its capacity as Collateral Agent), and the several financial institutions from time to time party thereto as Lenders (the "Lenders"). The Credit Agreement bears CUSIP No. 46283LAA5, provides for aggregate commitments of Nine Hundred Fifty Million Dollars ($950,000,000), and is governed by the laws of the State of New York.
B. Use of Proceeds / Virginia Campus. Pursuant to the terms of the Credit Agreement, a portion of the proceeds of the Term Loan — specifically, Four Hundred Seventy-Five Million Dollars ($475,000,000) from the USD Tranche of Six Hundred Seventy-Five Million Dollars ($675,000,000) — is designated for the development and construction of the data center campus known as "Ironhaven Ashburn I" (the "Virginia Campus"), located at 4500–4550 Dominion Ridge Boulevard, Ashburn, Loudoun County, Virginia 20147, situated on approximately one hundred forty-two (142) acres across two parcels identified as Tax Parcel Nos. 087-27-1234 and 087-27-1235 in the Loudoun County land records. Phase I of the Virginia Campus is designed to deliver approximately sixty (60) megawatts of critical IT load capacity, with an estimated Phase I completion date of the fourth quarter of calendar year 2025 (Q4 2025).
C. Escrow Requirement. The Credit Agreement requires, as a condition precedent to the initial funding of the Term Loan on the Closing Date (June 3, 2024), the establishment of an escrow account for the controlled disbursement of construction funds allocated to the Virginia Campus, such escrow account to be administered by Pinnacle Trust Company, N.A. in its capacity as Escrow Agent, on the terms and subject to the conditions set forth in this Agreement.
D. Purpose. The Parties wish to set forth the terms and conditions governing the deposit, investment, and disbursement of the Escrowed Funds (as defined herein) in connection with Phase I construction of the Virginia Campus, including the procedures by which the Depositor may request disbursements, the conditions precedent to each such disbursement, the role and protections afforded to the Escrow Agent, and the circumstances under which this Agreement shall terminate.
E. Sponsor / Ownership. IHDC is a direct wholly owned subsidiary of Ironhaven Holdings Inc., a Delaware corporation, which is in turn wholly owned by Thornfield Capital Partners, LP, acting through Thornfield Infrastructure Fund III, LP (vintage 2021), a Delaware limited partnership. Thornfield Capital Partners, LP's equity contribution to the overall transaction is Four Hundred Ten Million Dollars ($410,000,000), which has been funded or is being funded concurrently with the Closing Date draw under the Credit Agreement.
F. Anchor Tenant. IHDC has entered into a binding pre-lease letter of intent with Stratos Cloud Services, Inc., a Delaware corporation, for thirty (30) megawatts of critical IT load at the Virginia Campus, under a five (5)-year initial term, at an annual base rent of Fourteen Million Four Hundred Thousand Dollars ($14,400,000), which letter of intent forms part of the collateral package securing the obligations under the Credit Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:
ARTICLE I — DEFINITIONS
Section 1.1 — Defined Terms
As used in this Agreement, the following terms shall have the meanings set forth below:
"Administrative Agent" means Crescent Harbor Bank, National Association, a national banking association, in its capacity as Administrative Agent under the Credit Agreement, together with its successors and assigns in such capacity.
"Agreement" means this Escrow Agreement, including all exhibits, schedules, and attachments hereto, as the same may be amended, restated, supplemented, or otherwise modified from time to time in accordance with the terms hereof.
"Adjusted EBITDA" has the meaning ascribed to such term in the Credit Agreement.
"Business Day" means any day that is not a Saturday, Sunday, or a day on which banking institutions are authorized or obligated by law or executive order to close in New York, New York, Charlotte, North Carolina, or Washington, D.C.
"Closing Date" means June 3, 2024, the date on which the initial funding under the Credit Agreement occurs and the Escrowed Funds are deposited into the Escrow Account.
"Collateral Agent" means Pinnacle Trust Company, N.A., a national trust company, in its separate capacity as Collateral Agent under the Credit Agreement and the related security documents (including, without limitation, the US Security Agreement and the Collateral Agent Appointment Agreement), together with its successors and assigns in such capacity. For the avoidance of doubt, the Collateral Agent is acting in a capacity separate and distinct from its capacity as Escrow Agent under this Agreement.
"Construction Budget" means the detailed, itemized budget for Phase I construction of the Virginia Campus, a copy of which is attached hereto as Exhibit A and incorporated herein by reference, reflecting total budgeted costs of Four Hundred Seventy-Five Million Dollars ($475,000,000), as the same may be amended from time to time with the prior written approval of the Administrative Agent.
"Construction Consultant" or "Independent Engineer" means Greenline Environmental Solutions, Inc. (Dr. Ramon Quelibo, Principal Engineer), an independent engineering and environmental consulting firm retained by the Depositor and approved by the Administrative Agent, or such replacement consultant or independent engineer as may be approved by the Administrative Agent in writing from time to time.
"Construction Contract" means, collectively, the general construction contract or contracts entered into by the Depositor for Phase I development of the Virginia Campus, including all amendments, change orders, and supplements thereto.
"Credit Agreement" has the meaning set forth in Recital A of this Agreement, and refers to the Senior Secured Term Loan B Credit Agreement, dated as of May 15, 2024, bearing CUSIP No. 46283LAA5, as the same may be amended, restated, supplemented, or otherwise modified from time to time.
"DACA" means the Deposit Account Control Agreement, dated as of the Closing Date, among the Depositor, the Escrow Agent (as depositary bank), and the Collateral Agent, granting the Collateral Agent a first-priority perfected security interest in the Escrow Account.
"Depositor" means Ironhaven Data Centers LLC, a Delaware limited liability company, together with its successors and permitted assigns.
"Disbursement Request" means a written request from the Depositor to the Escrow Agent for release of Escrowed Funds, substantially in the form of Exhibit B attached hereto, duly executed by an authorized officer of the Depositor identified in Exhibit C.
"Effective Date" has the meaning set forth in the preamble of this Agreement.
"Escrow Account" means the segregated, interest-bearing escrow account established and maintained by the Escrow Agent pursuant to Section 2.1 of this Agreement.
"Escrow Agent" means Pinnacle Trust Company, N.A., a national trust company, in its capacity as Escrow Agent under this Agreement, together with its successors and assigns in such capacity.
"Escrow Agent Fee" means the fee payable to the Escrow Agent as set forth in Section 7.1 hereof, which fee forms part of the overall Collateral Agent fee structure of Two Hundred Thousand Dollars ($200,000) per annum as described in the Collateral Agent Appointment Agreement.
"Escrowed Funds" means the aggregate amount of Four Hundred Seventy-Five Million Dollars ($475,000,000) deposited into the Escrow Account on the Closing Date, together with all interest, dividends, and investment earnings accrued thereon, less any amounts theretofore disbursed from the Escrow Account in accordance with the terms of this Agreement.
"Event of Default" has the meaning ascribed to such term in the Credit Agreement.
"Lenders" means the several financial institutions from time to time party to the Credit Agreement as lenders, which as of the Closing Date consist of the following: (a) Crescent Harbor Bank, N.A. (commitment: $200,000,000); (b) Ridgeline National Bank (commitment: $175,000,000); (c) Marlowe Asset Management Meridian Capital, LLC (commitment: $150,000,000); (d) Atlas Peak Credit Partners, LP (commitment: $125,000,000); (e) NordBrücke AG (commitment: $150,000,000); (f) Pacific Rim Institutional Lending Corp. (commitment: $75,000,000); and (g) Osprey Insurance Capital, Ltd. (commitment: $75,000,000), together with their respective successors and assigns.
"Permitted Investments" has the meaning set forth in Section 2.4 of this Agreement.
"Phase I" means the first phase of construction, development, and initial equipping of the Virginia Campus, targeting approximately sixty (60) megawatts of critical IT load capacity, with an estimated completion date in Q4 2025, as more particularly described in the Construction Budget.
"Project" means the development, construction, equipping, and initial operation of the Virginia Campus, including all phases thereof (but, for purposes of this Agreement, primarily referring to Phase I).
"Required Lenders" has the meaning ascribed to such term in the Credit Agreement (i.e., Lenders holding more than fifty percent (50%) of the aggregate outstanding commitments and funded loans under the Credit Agreement).
"Signing Date" means May 15, 2024, the date on which the Credit Agreement was executed and delivered by the parties thereto.
"Stop Notice" has the meaning set forth in Section 3.6(a) of this Agreement.
"Virginia Campus" or "Property" means the real property located at 4500–4550 Dominion Ridge Boulevard, Ashburn, Loudoun County, Virginia 20147, comprising approximately one hundred forty-two (142) acres across two parcels identified as Tax Parcel Nos. 087-27-1234 and 087-27-1235 in the Loudoun County land records, together with all improvements, fixtures, and appurtenances thereto, now existing or hereafter constructed.
Section 1.2 — Credit Agreement Definitions
Capitalized terms used but not otherwise defined in this Agreement shall have the meanings ascribed to such terms in the Credit Agreement, including, without limitation, the following: "Adjusted EBITDA," "Net Leverage Ratio," "Consolidated Total Net Debt," "Change of Control," "Excess Cash Flow," "Material Adverse Effect," "Sanctioned Country," "Sanctioned Person," "Subsidiary," "Guarantor," "Obligations," "Maturity Date," and "Pro Forma Basis." In the event of any conflict between a definition set forth in this Agreement and the corresponding definition set forth in the Credit Agreement, the definition set forth in this Agreement shall control for purposes hereof.
Section 1.3 — Rules of Construction
Unless the context otherwise requires: (a) headings and captions are for convenience of reference only and shall not affect the interpretation of this Agreement; (b) words in the singular include the plural, and words in the plural include the singular; (c) the word "including" (and with correlative meaning, "include" and "includes") means including without limiting the generality of any description preceding such word; (d) the word "or" is not exclusive; (e) references to "Articles," "Sections," "Exhibits," and "Schedules" refer to articles and sections of, and exhibits and schedules to, this Agreement unless otherwise specified; (f) references to any statute, rule, or regulation include amendments, re-enactments, and successor legislation; (g) references to any agreement or instrument include all amendments, restatements, supplements, and modifications thereto; (h) all references to time of day shall mean the time in New York, New York, unless otherwise specified; and (i) the words "herein," "hereof," "hereunder," and words of similar import refer to this Agreement as a whole and not to any particular provision hereof.
ARTICLE II — ESTABLISHMENT OF ESCROW ACCOUNT; DEPOSIT
Section 2.1 — Establishment of Escrow Account
(a) On or prior to the Closing Date, the Escrow Agent shall establish and maintain a segregated, interest-bearing escrow account (the "Escrow Account") at its offices in Washington, D.C. The Escrow Account shall be titled:
"Pinnacle Trust Company, N.A., as Escrow Agent for Ironhaven Data Centers LLC — Virginia Campus Construction Escrow"
(b) The Escrow Account shall at all times be maintained separate and apart from the Escrow Agent's own funds and from any other escrow, trust, fiduciary, or custodial accounts maintained by the Escrow Agent for any other purpose or on behalf of any other person. The Escrow Agent shall not commingle the Escrowed Funds with any other funds.
(c) The Escrow Agent hereby confirms that the Escrow Account has been established in accordance with this Section 2.1 and that the Escrow Account is ready to receive the deposit of Escrowed Funds on the Closing Date.
Section 2.2 — Deposit of Escrowed Funds
(a) On the Closing Date (June 3, 2024), the sum of Four Hundred Seventy-Five Million Dollars ($475,000,000) shall be deposited into the Escrow Account by wire transfer of immediately available funds from the Administrative Agent out of the proceeds of the Term Loan draw under the Credit Agreement. The wire transfer shall be made in accordance with the wire transfer instructions for the Escrow Account set forth in Exhibit D attached hereto.
(b) The Parties acknowledge and agree that the deposit into the Escrow Account is consistent with the Funds Flow Memorandum dated as of the Closing Date and delivered in connection with the closing of the Credit Agreement. The sources and uses reflected in the Funds Flow Memorandum include, among others: (i) net Term Loan proceeds of approximately Nine Hundred Forty-Five Million Two Hundred Fifty Thousand Dollars ($945,250,000) (reflecting the gross Term Loan commitments of $950,000,000 less a fifty (50) basis point original issue discount); and (ii) the Thornfield equity contribution of Four Hundred Ten Million Dollars ($410,000,000). The Four Hundred Seventy-Five Million Dollar ($475,000,000) Virginia Campus escrow deposit is a specified use of proceeds under the Funds Flow Memorandum.
(c) Immediately upon receipt of the wire transfer described in Section 2.2(a), the funds so deposited shall constitute "Escrowed Funds" for all purposes of this Agreement and shall be held, invested, and disbursed solely in accordance with the terms and conditions of this Agreement.
(d) The Escrow Agent shall promptly confirm receipt of the deposit in writing (which may be by electronic mail) to the Depositor and the Administrative Agent upon the crediting of such funds to the Escrow Account.
Section 2.3 — Escrow Account as Collateral
(a) The Parties acknowledge and agree that the Escrow Account and all Escrowed Funds deposited therein, including all investment earnings thereon, constitute "Collateral" as defined in the US Security Agreement, dated as of May 15, 2024, among the Depositor, Ironhaven Holdings Inc. (as Parent Guarantor), and Pinnacle Trust Company, N.A. (as Collateral Agent), and under the Credit Agreement.
(b) The Collateral Agent (Pinnacle Trust Company, N.A., acting in its separate capacity as Collateral Agent under the Credit Agreement and the related security documents) has a first-priority perfected security interest in the Escrow Account, all Escrowed Funds, and all proceeds thereof, pursuant to: (i) the US Security Agreement; (ii) the Deposit Account Control Agreement (DACA) executed concurrently herewith among the Depositor, the Escrow Agent (as depositary bank), and the Collateral Agent; and (iii) applicable provisions of the Uniform Commercial Code as in effect in the relevant jurisdictions. The Escrow Agent acknowledges the existence of such security interest and agrees to comply with the terms of the DACA.
(c) For the avoidance of doubt, the collateral package securing the obligations under the Credit Agreement also includes, without limitation: (i) the Deed of Trust, Security Agreement, Assignment of Leases and Rents, and Fixture Filing encumbering the Virginia Campus parcels (Tax Parcel Nos. 087-27-1234 and 087-27-1235), recorded in the Loudoun County Circuit Court Clerk's office; (ii) pledges of the equity interests in the Depositor and certain of its subsidiaries; (iii) security interests in personal property, equipment, and intellectual property; and (iv) an assignment of the Stratos Cloud Services, Inc. pre-lease letter of intent and related lease receivables. Nothing in this Agreement shall be construed to limit, modify, or impair the Collateral Agent's rights under such broader collateral package.
Section 2.4 — Investment of Escrowed Funds
(a) Pending disbursement in accordance with Article III, the Escrowed Funds shall be invested and reinvested solely in one or more of the following categories of investments (each, a "Permitted Investment"):
(i) direct obligations of the United States of America, or obligations the timely payment of principal and interest on which is fully and unconditionally guaranteed by the United States of America (including United States Treasury bills, notes, and bonds);
(ii) certificates of deposit or time deposits issued by Crescent Harbor Bank, N.A. or any other commercial bank organized under the laws of the United States or any state thereof, or any branch thereof, the long-term unsecured debt obligations of which (or the parent holding company of which) are rated at least A-1 by Standard & Pelvoran Financial Services LLC ("S&P") or P-1 by Moody's Investors Service, Inc. ("Moody's") at the time of investment;
(iii) money market mutual funds that invest exclusively in obligations described in clauses (i) and (ii) above, and that are rated at least AAAm by S&P or Aaa-mf by Moody's;
(iv) commercial paper issued by corporations organized under the laws of any state of the United States or of the District of Columbia, rated at least A-1 by S&P or P-1 by Moody's at the time of acquisition, with maturities not exceeding ninety (90) days from the date of purchase.
(b) The Escrowed Funds shall be invested at the written direction of the Depositor (which direction may be standing or specific and may be delivered by electronic mail from an authorized signatory of the Depositor identified on Exhibit C). In the absence of written investment instructions from the Depositor, the Escrow Agent shall invest the Escrowed Funds in Permitted Investments of the type described in clause (a)(iii) above, as selected by the Escrow Agent in its reasonable discretion.
(c) All interest, dividends, and other investment earnings on the Escrowed Funds shall be credited to the Escrow Account and shall constitute part of the Escrowed Funds for all purposes of this Agreement.
(d) The Depositor shall bear all risk of loss with respect to the investment of the Escrowed Funds in Permitted Investments. The Escrow Agent shall have no liability whatsoever for any losses, depreciation, or diminution in value resulting from any investment of the Escrowed Funds made in accordance with this Section 2.4, including, without limitation, losses arising from market conditions, interest rate fluctuations, or defaults by issuers of instruments constituting Permitted Investments.
(e) The Escrow Agent shall liquidate Permitted Investments as and when necessary to fund disbursements from the Escrow Account in accordance with Article III. The Escrow Agent shall not be liable for any loss or penalty resulting from the early liquidation or redemption of any Permitted Investment.
(f) Tax Reporting. All investment income earned on the Escrowed Funds shall be for the account of the Depositor for federal, state, and local income tax purposes. The Escrow Agent shall report all interest and investment income earned on the Escrowed Funds to the Internal Revenue Service on IRS Form 1099 (or such other applicable form) under the name and taxpayer identification number of the Depositor (Ironhaven Data Centers LLC, EIN: 84-3291057). The Depositor shall furnish to the Escrow Agent a completed IRS Form W-9 (or applicable successor form) on or prior to the Closing Date and shall update such form as reasonably requested by the Escrow Agent.
ARTICLE III — DISBURSEMENT OF ESCROWED FUNDS
Section 3.1 — Conditions to Disbursement
No disbursement of Escrowed Funds shall be made by the Escrow Agent unless and until all of the following conditions have been satisfied with respect to such disbursement:
(a) Disbursement Request. The Escrow Agent shall have received a duly executed Disbursement Request from an authorized officer of the Depositor, substantially in the form of Exhibit B attached hereto. For purposes of this Agreement, the authorized officers of the Depositor who are empowered to execute and deliver Disbursement Requests are:
(i) Marcus Delaine, Chief Executive Officer;
(ii) Rebecca Sung, Chief Financial Officer;
(iii) Jonathan Pryce-Williams, General Counsel & Secretary; and
(iv) Natasha Greenfeld, Vice President, Treasury & Capital Markets,
each as identified on the specimen signature pages set forth in Exhibit C hereto, or such other person(s) as may be designated from time to time by written notice from the Depositor to the Escrow Agent and the Administrative Agent (which notice shall include specimen signatures of such person(s)).
(b) Administrative Agent Approval. The Escrow Agent shall have received written approval (which may be delivered by electronic mail) from the Administrative Agent (Crescent Harbor Bank, N.A., Attention: Thomas Beckett, Vice President, Loan Operations & Agency Services, or Priya Nair, Director, Data Center & Digital Infrastructure Lending), or the Administrative Agent shall be deemed to have given its approval in accordance with the provisions of Section 3.3 hereof.
(c) No Event of Default. No Event of Default, and no event or condition which, with the giving of notice, the lapse of time, or both, would constitute an Event of Default, shall have occurred and be continuing under the Credit Agreement as of the date of the Disbursement Request and as of the date of the proposed disbursement. The Escrow Agent shall be entitled to rely on the certifications contained in the Disbursement Request and the Administrative Agent's written approval (or deemed approval) as conclusive evidence that this condition has been satisfied, absent the Escrow Agent's receipt of a Stop Notice or other written notice to the contrary from the Administrative Agent.
(d) Compliance Certificate. If a quarterly compliance certificate has been delivered by the Depositor to the Administrative Agent pursuant to the Credit Agreement since the date of the last disbursement from the Escrow Account (or, in the case of the first disbursement, since the Closing Date), such compliance certificate shall demonstrate compliance with the following financial covenants:
(i) the Maximum Net Leverage Ratio of 6.00 to 1.00, tested on a trailing four-quarter basis; and
(ii) the Minimum Interest Coverage Ratio of 2.00 to 1.00, tested on a trailing four-quarter basis.
(e) Capital Expenditure Limitation. The requested disbursement, together with all prior disbursements from the Escrow Account and all other capital expenditures incurred by the Depositor and its subsidiaries during the applicable fiscal year, shall not cause aggregate capital expenditures for such fiscal year to exceed the following limits:
(i) for fiscal year 2024: Three Hundred Twenty-Five Million Dollars ($325,000,000); or
(ii) for fiscal year 2025 and each fiscal year thereafter: Two Hundred Fifty Million Dollars ($250,000,000);
in each case, subject to a carry-forward of up to twenty-five percent (25%) of any unused capital expenditure capacity from the immediately preceding fiscal year, as provided in the Credit Agreement.
(f) Insurance. The Depositor shall have provided evidence satisfactory to the Administrative Agent (which evidence may be in the form of a certificate from Calloway & Strand Insurance Brokers, Inc. (Attention: Patricia Calloway, Principal)) that all required insurance coverage is in full force and effect in compliance with the insurance requirements set forth in the Credit Agreement, including, without limitation: (i) builder's risk insurance; (ii) commercial property insurance; (iii) commercial general liability insurance; (iv) business interruption insurance; and (v) such other insurance as may be required under the Credit Agreement. Each such policy shall name Pinnacle Trust Company, N.A. (in its capacity as Collateral Agent) as loss payee and additional insured, as applicable.
(g) Title Endorsement. If the aggregate amount of disbursements from the Escrow Account since the date of the most recent title bring-down endorsement (or, in the case of the first such endorsement, since the issuance of the original ALTA Lender's Title Insurance Policy on the Closing Date) exceeds Ten Million Dollars ($10,000,000), the Depositor shall have caused Keystone Title Guaranty Company (Attention: Raymond Hobbs, Vice President) to deliver to the Administrative Agent and the Collateral Agent a date-down endorsement to the ALTA Lender's Title Insurance Policy (Policy No. to be assigned; insured amount: $475,000,000) confirming that, as of a date no earlier than five (5) Business Days prior to the date of the Disbursement Request: (i) there are no intervening liens, encumbrances, defects, or exceptions affecting the Virginia Campus parcels other than those reflected on the original policy or previously approved by the Administrative Agent; and (ii) the insured lien remains a valid first-priority lien on the Virginia Campus parcels.
(h) Lien Waiver / Mechanic's Lien Protection. The Depositor shall have delivered to the Administrative Agent partial or conditional lien waivers from all general contractors, subcontractors, material suppliers, and other parties who have performed work on or supplied materials to the Virginia Campus and whose work or materials were covered, in whole or in part, by prior disbursements from the Escrow Account, in form and substance reasonably satisfactory to the Administrative Agent. Nothing in this Section 3.1(h) shall require the Depositor to deliver final or unconditional lien waivers until full and final payment has been made with respect to the applicable contract or purchase order.
Section 3.2 — Form and Content of Disbursement Requests
Each Disbursement Request submitted by the Depositor pursuant to this Article III shall be substantially in the form of Exhibit B and shall include each of the following:
(a) the aggregate dollar amount of the requested disbursement;
(b) a detailed description of the construction costs to be paid with the proceeds of such disbursement, with specific reference to the applicable line item(s) in the Construction Budget (Exhibit A), including a statement of the amount allocated to each such line item;
(c) the legal name of each payee to which disbursement funds are to be remitted, together with complete wire transfer instructions for each such payee (including bank name, ABA routing number, account number, and reference information);
(d) a certification by the authorized officer executing the Disbursement Request that:
(i) the requested disbursement is for costs actually incurred or due and payable in connection with Phase I construction of the Virginia Campus and is consistent with the Construction Budget;
(ii) no Event of Default, and no event or condition which, with the giving of notice, the lapse of time, or both, would constitute an Event of Default, has occurred and is continuing under the Credit Agreement;
(iii) the representations and warranties of the Depositor set forth in the Credit Agreement and this Agreement are true and correct in all material respects as of the date of such Disbursement Request (except to the extent such representations and warranties expressly relate to an earlier date, in which case they are true and correct in all material respects as of such earlier date);
(iv) after giving effect to the requested disbursement, the aggregate of all disbursements from the Escrow Account (including the requested disbursement) does not exceed Four Hundred Seventy-Five Million Dollars ($475,000,000);
(e) copies of invoices, contractor payment applications (AIA G702/G703 or equivalent), purchase orders, and/or other supporting documentation for the costs to be paid with the requested disbursement, as the Administrative Agent may reasonably require; and
(f) if requested by the Administrative Agent in writing (whether generally or with respect to a specific Disbursement Request), a certificate from the Independent Engineer (Greenline Environmental Solutions, Inc., Dr. Ramon Quelibo, Principal Engineer) confirming the percentage of completion of Phase I construction as of the date of such certificate and certifying that the requested disbursement is consistent with the Construction Budget and the actual progress of construction.
Section 3.3 — Administrative Agent Approval Process
(a) Promptly upon receipt of a Disbursement Request and all supporting documentation required under Section 3.2, the Escrow Agent shall forward a copy of such Disbursement Request and supporting documentation to the Administrative Agent (to the extent not already delivered by the Depositor directly to the Administrative Agent).
(b) The Administrative Agent shall have five (5) Business Days after its receipt of a complete Disbursement Request and all supporting documentation to approve or object to such Disbursement Request. The Administrative Agent shall deliver its approval or objection in writing (which may be by electronic mail) to the Escrow Agent and the Depositor.
(c) If the Administrative Agent does not respond within such five (5) Business Day period (i.e., does not deliver either an approval or a written objection to the Escrow Agent within such period), the Administrative Agent shall be deemed to have approved the Disbursement Request, and the Escrow Agent shall be entitled to proceed with the disbursement as if written approval had been received.
(d) The Administrative Agent may object to a Disbursement Request only on reasonable grounds, including, without limitation: (i) inconsistency of the requested disbursement with the Construction Budget; (ii) the existence of an Event of Default or an event or condition which, with the giving of notice, the lapse of time, or both, would constitute an Event of Default; (iii) the failure of the Depositor to satisfy one or more of the conditions to disbursement set forth in Section 3.1; (iv) a material discrepancy between the supporting documentation and the amounts or descriptions set forth in the Disbursement Request; or (v) the receipt by the Administrative Agent of information indicating that the Phase I construction is materially behind schedule or materially over budget. Any objection by the Administrative Agent shall set forth in reasonable detail the basis for such objection.
(e) If the Administrative Agent objects to a Disbursement Request, the Depositor and the Administrative Agent shall use commercially reasonable efforts to resolve such objection within ten (10) Business Days following the date of the Administrative Agent's written objection. The Depositor may submit a revised Disbursement Request addressing the Administrative Agent's objection, which revised request shall be treated as a new Disbursement Request for purposes of the approval process under this Section 3.3. Any disputes between the Depositor and the Administrative Agent regarding a Disbursement Request that cannot be resolved by mutual agreement shall be resolved in accordance with the dispute resolution provisions of the Credit Agreement, which provisions are governed by the laws of the State of New York and which provide for the exclusive jurisdiction of the courts of the State of New York sitting in the Borough of Manhattan and the United States District Court for the Southern District of New York.
Section 3.4 — Mechanics of Disbursement
(a) Upon satisfaction of all conditions set forth in Section 3.1 (including receipt of Administrative Agent approval or deemed approval pursuant to Section 3.3), the Escrow Agent shall disburse the requested amount from the Escrow Account by wire transfer of immediately available funds to the payee(s) identified in the Disbursement Request within two (2) Business Days following the later of: (i) the date on which the Escrow Agent receives the Administrative Agent's written approval (or the date on which approval is deemed given); and (ii) the date on which the Escrow Agent receives all documentation required to process the wire transfer(s).
(b) The Escrow Agent shall maintain complete and accurate records of each disbursement made from the Escrow Account, including the date of disbursement, the amount disbursed, the identity of each payee, the applicable Construction Budget line item(s) to which such disbursement relates, and the corresponding Disbursement Request number.
(c) No single disbursement from the Escrow Account shall be in an amount less than One Million Dollars ($1,000,000); provided, however, that if the remaining balance of Escrowed Funds in the Escrow Account is less than One Million Dollars ($1,000,000), a disbursement of the full remaining balance shall be permitted (subject to satisfaction of all other conditions to disbursement set forth in this Article III).
(d) The Escrow Agent shall promptly confirm each disbursement in writing (which may be by electronic mail) to the Depositor and the Administrative Agent, specifying the date, amount, and payee of such disbursement and the remaining balance of Escrowed Funds in the Escrow Account after giving effect to such disbursement.
Section 3.5 — Frequency of Disbursements
Disbursement Requests may be submitted by the Depositor no more frequently than twice per calendar month. The Escrow Agent shall not be obligated to process more than two (2) Disbursement Requests in any calendar month. This limitation on frequency shall not apply to the final disbursement of remaining Escrowed Funds under Section 3.7.
Section 3.6 — Withholding of Disbursement
Notwithstanding any other provision of this Agreement, the Escrow Agent shall not make any disbursement from the Escrow Account if:
(a) the Escrow Agent has received written notice from the Administrative Agent that an Event of Default has occurred and is continuing under the Credit Agreement, and the Administrative Agent has directed the Escrow Agent to suspend all disbursements from the Escrow Account pending further written instructions from the Administrative Agent (such notice, a "Stop Notice"). A Stop Notice shall remain in effect until the earlier of: (i) receipt by the Escrow Agent of a written notice from the Administrative Agent that the Event of Default has been cured or waived and that disbursements may resume; or (ii) receipt by the Escrow Agent of a joint written instruction from the Depositor and the Administrative Agent directing the Escrow Agent to resume disbursements;
(b) the Escrow Agent has received conflicting instructions from the Depositor and the Administrative Agent with respect to the disbursement of Escrowed Funds, in which case the Escrow Agent shall have no obligation to act and may proceed in accordance with Section 6.4 (Interpleader) of this Agreement; or
(c) the Escrow Agent has been served with or has received notice of any court order, injunction, attachment, garnishment, or other legal process issued by a court of competent jurisdiction, or any order, directive, or instruction issued by a governmental authority having jurisdiction over the Escrow Agent, which prohibits, restrains, or restricts the disbursement of the Escrowed Funds or any portion thereof.
Section 3.7 — Final Disbursement / Release of Remaining Funds
(a) Upon substantial completion of Phase I construction of the Virginia Campus, the Depositor shall deliver to the Escrow Agent and the Administrative Agent: (i) a written certification from an authorized officer of the Depositor certifying that Phase I construction has been substantially completed in accordance with the Construction Budget and applicable plans and specifications; (ii) a certificate from the Independent Engineer (Greenline Environmental Solutions, Inc.) confirming substantial completion and identifying any remaining punch-list items; and (iii) such other evidence of completion as the Administrative Agent may reasonably require.
(b) Following receipt of the Administrative Agent's written approval of the certifications described in Section 3.7(a) (which approval shall not be unreasonably withheld, conditioned, or delayed), any remaining Escrowed Funds in the Escrow Account (including all accrued and undisbursed investment earnings) shall be released to the Depositor or applied as directed by the Depositor in writing, subject to the terms and conditions of the Credit Agreement.
(c) Notwithstanding the foregoing, if the remaining balance of Escrowed Funds in the Escrow Account after substantial completion of Phase I construction exceeds Five Million Dollars ($5,000,000), the Administrative Agent may, in its sole discretion, require that such excess be:
(i) applied as a mandatory prepayment of the Term Loan in accordance with the mandatory prepayment provisions of the Credit Agreement (including the applicable mandatory prepayment waterfall and any prepayment premium, if applicable); or
(ii) retained in the Escrow Account (or transferred to a cash collateral account maintained by the Collateral Agent) as cash collateral securing the obligations under the Credit Agreement, to be released to the Depositor at such time as the Administrative Agent may determine, in its reasonable discretion, that such cash collateral is no longer required.
(d) For the avoidance of doubt, no release of remaining Escrowed Funds to the Depositor under this Section 3.7 shall be made if an Event of Default has occurred and is continuing under the Credit Agreement, unless otherwise directed in writing by the Administrative Agent.
ARTICLE IV — REPRESENTATIONS AND WARRANTIES
Section 4.1 — Representations and Warranties of the Depositor
The Depositor hereby represents and warrants to the Administrative Agent and the Escrow Agent, as of the Closing Date and as of the date of each Disbursement Request, as follows:
(a) Organization and Good Standing. The Depositor is a limited liability company duly organized, validly existing, and in good standing under the laws of the State of Delaware, and is duly qualified and authorized to do business in the Commonwealth of Virginia and each other jurisdiction where such qualification is required for the conduct of its business as presently conducted, except where the failure to be so qualified would not reasonably be expected to have a Material Adverse Effect.
(b) Authority and Authorization. The Depositor has full limited liability company power and authority to execute, deliver, and perform its obligations under this Agreement. The execution, delivery, and performance of this Agreement have been duly authorized by all necessary limited liability company action on the part of the Depositor, including, without limitation, approval by the managing member or the board of managers of the Depositor, and no further action or consent is required.
(c) No Conflict. The execution, delivery, and performance of this Agreement by the Depositor do not and will not: (i) violate or conflict with the certificate of formation, limited liability company agreement, or other organizational documents of the Depositor; (ii) violate or conflict with any provision of the Credit Agreement or any other Loan Document (as defined in the Credit Agreement) to which the Depositor is a party; (iii) violate any applicable law, rule, regulation, order, judgment, or decree of any court or governmental authority binding on the Depositor or its assets; or (iv) result in the creation or imposition of any lien, charge, or encumbrance on the assets of the Depositor (other than the security interests created under the Credit Agreement and the related security documents).
(d) Binding Obligation. This Agreement has been duly executed and delivered by the Depositor and constitutes the legal, valid, and binding obligation of the Depositor, enforceable against the Depositor in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, and similar laws affecting creditors' rights generally and to general principles of equity (whether applied in a proceeding at law or in equity).
(e) Escrowed Funds as Loan Proceeds. The Escrowed Funds constitute proceeds of the Term Loan drawn under the Credit Agreement and are subject to the collateral and security arrangements established pursuant to the Credit Agreement, the US Security Agreement, the DACA, and the other Loan Documents. The Depositor acknowledges that the Collateral Agent has a first-priority perfected security interest in the Escrow Account and the Escrowed Funds.
(f) Accuracy of Information. All information provided by the Depositor in connection with Disbursement Requests, including, without limitation, the certifications, supporting documentation, invoices, and payment applications, will be true, correct, and complete in all material respects as of the date on which such information is provided.
(g) Sanctions Compliance. Neither the Depositor nor any of its directors, officers, employees, agents, or affiliates is: (i) a person listed on the Specially Designated Nationals and blocked Persons List maintained by the Office of Foreign Assets Control of the United States Department of the Treasury ("OFAC"); (ii) a person operating, organized, or resident in a Sanctioned Country; or (iii) otherwise a target of sanctions administered by OFAC, the European Union (including pursuant to Council Regulation (EU) No. 269/2014, as amended), the United Kingdom's Office of Financial Sanctions Implementation ("UK OFSI"), or any other applicable sanctions authority. No Escrowed Funds will be disbursed to or for the benefit of any Sanctioned Person, or used for any purpose prohibited by OFAC regulations, EU sanctions, or UK OFSI sanctions.
Section 4.2 — Representations and Warranties of the Administrative Agent
The Administrative Agent hereby represents and warrants to the Depositor and the Escrow Agent, as of the Closing Date, as follows:
(a) Organization and Authority. Crescent Harbor Bank, National Association is a national banking association duly organized, validly existing, and in good standing under the laws of the United States, with full corporate power and authority to execute, deliver, and perform its obligations under this Agreement and to act as Administrative Agent under the Credit Agreement.
(b) Authorization. The execution, delivery, and performance of this Agreement have been duly authorized by all necessary corporate action on the part of the Administrative Agent, and no further action, consent, or approval is required for the Administrative Agent to perform its obligations hereunder.
(c) Binding Obligation. This Agreement has been duly executed and delivered by the Administrative Agent and constitutes the legal, valid, and binding obligation of the Administrative Agent, enforceable against the Administrative Agent in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, and similar laws affecting creditors' rights generally and to general principles of equity.
Section 4.3 — Representations and Warranties of the Escrow Agent
The Escrow Agent hereby represents and warrants to the Depositor and the Administrative Agent, as of the Closing Date, as follows:
(a) Organization and Good Standing. Pinnacle Trust Company, N.A. is a national trust company duly organized, validly existing, and in good standing under the laws of the United States, with full corporate trust power and authority to execute, deliver, and perform its obligations under this Agreement and to serve as Escrow Agent hereunder.
(b) Authorization. The execution, delivery, and performance of this Agreement have been duly authorized by all necessary corporate action on the part of the Escrow Agent, and no further action, consent, or approval is required for the Escrow Agent to perform its obligations hereunder.
(c) No Conflict. The execution, delivery, and performance of this Agreement by the Escrow Agent do not and will not violate or conflict with: (i) the charter, articles of association, bylaws, or other organizational documents of the Escrow Agent; (ii) any applicable law, rule, regulation, order, judgment, or decree of any court or governmental authority binding on the Escrow Agent; or (iii) any agreement or instrument to which the Escrow Agent is a party or by which it or its assets are bound.
(d) Compliance with Anti-Money Laundering and Sanctions Laws. The Escrow Agent has implemented and maintains policies and procedures designed to ensure compliance with the Bank Secrecy Act, the USA PATRIOT Act, and the regulations administered by OFAC, and the Escrow Agent is in compliance in all material respects with all applicable anti-money laundering laws and sanctions requirements.
ARTICLE V — COVENANTS
Section 5.1 — Depositor Covenants
The Depositor hereby covenants and agrees, for the benefit of the Administrative Agent, the Lenders, and the Escrow Agent, that, so long as any Escrowed Funds remain in the Escrow Account:
(a) Monthly Construction Progress Reports. The Depositor shall provide to the Administrative Agent, no later than the fifteenth (15th) day of each calendar month, a written construction progress report for the immediately preceding calendar month, covering Phase I construction at the Virginia Campus. Each such report shall include, at a minimum: (i) a summary of construction activities during the reporting period; (ii) percentage of completion by major line item in the Construction Budget; (iii) a comparison of actual costs incurred to date against the Construction Budget; (iv) a summary of any material delays, cost overruns, or other deviations from the construction schedule or budget; (v) an updated estimate of the Phase I completion date; and (vi) photographs of the construction site.
(b) Insurance Compliance. The Depositor shall maintain, or cause to be maintained, all insurance coverage required under the Credit Agreement, including builder's risk, commercial property, commercial general liability, and business interruption insurance, in the amounts, with the carriers, and on the terms specified in the Credit Agreement. The Depositor shall cause its insurance broker, Calloway & Strand Insurance Brokers, Inc. (Patricia Calloway, Principal), to deliver to the Administrative Agent, on or prior to each anniversary of the Closing Date and promptly upon any material change in coverage, a compliance certificate confirming that all required insurance is in full force and effect.
(c) Prompt Notification. The Depositor shall promptly (and in any event within three (3) Business Days) notify the Administrative Agent and the Escrow Agent in writing of: (i) the occurrence of any Event of Default or any event or condition which, with the giving of notice, the lapse of time, or both, would constitute an Event of Default; (ii) any material deviation from the Construction Budget, which for purposes of this covenant means any deviation exceeding ten percent (10%) of any individual line item in the Construction Budget; and (iii) any material change in the expected completion date of Phase I (currently estimated as Q4 2025), including any delay of more than sixty (60) days from the then-current estimated completion date.
(d) Independent Engineer Inspections. The Depositor shall cause the Independent Engineer (Greenline Environmental Solutions, Inc., Dr. Ramon Quelibo, Principal Engineer) to conduct periodic site inspections of the Virginia Campus construction at least once per calendar quarter, and to deliver written inspection reports to the Administrative Agent within fifteen (15) days following each such inspection. Each inspection report shall address the progress of construction, compliance with the Construction Budget and construction schedule, quality of workmanship and materials, and any material issues or concerns identified by the Independent Engineer.
(e) Legal and Regulatory Compliance. The Depositor shall comply, and shall cause its contractors and subcontractors to comply, with all applicable federal, state, and local laws, rules, and regulations in connection with Phase I construction of the Virginia Campus, including, without limitation: (i) environmental laws and regulations (the Depositor acknowledges that Phase I and Phase II environmental site assessments of the Virginia Campus have been conducted by Greenline Environmental Solutions, Inc. and that the Depositor shall promptly remediate any environmental conditions identified therein); (ii) the Virginia Uniform Statewide Building Code and all applicable building, fire, and safety codes; (iii) zoning ordinances and land use approvals issued by Loudoun County; (iv) the Occupational Safety and Health Act and implementing regulations; and (v) all applicable prevailing wage and labor laws.
(f) Use of Funds. The Depositor shall not request or direct any disbursement of Escrowed Funds for costs that are not directly related to Phase I construction of the Virginia Campus, as reflected in the Construction Budget. Without limiting the foregoing, Escrowed Funds shall not be used to pay dividends, distributions, management fees, or other amounts to the Depositor's direct or indirect equity holders, or to fund operations, acquisitions, or capital expenditures unrelated to the Virginia Campus.
(g) Financial Covenant Compliance. The Depositor shall comply with all financial covenants under the Credit Agreement when tested, including: (i) the Maximum Net Leverage Ratio of 6.00 to 1.00; (ii) the Minimum Interest Coverage Ratio of 2.00 to 1.00; and (iii) the annual capital expenditure limitations set forth in Section 3.1(e) hereof. The Depositor shall deliver to the Administrative Agent all quarterly and annual compliance certificates required under the Credit Agreement within the time periods specified therein.
Section 5.2 — Administrative Agent Covenants
The Administrative Agent hereby covenants and agrees that, so long as any Escrowed Funds remain in the Escrow Account:
(a) Good Faith and Reasonableness. The Administrative Agent shall act in good faith and in a commercially reasonable manner in reviewing, approving, or objecting to Disbursement Requests submitted by the Depositor. The Administrative Agent shall not unreasonably withhold, delay, or condition its approval of any Disbursement Request that satisfies the conditions set forth in Article III.
(b) Prompt Notice of Default. The Administrative Agent shall promptly notify the Escrow Agent in writing of: (i) the occurrence and continuance of any Event of Default under the Credit Agreement; and (ii) the issuance of any Stop Notice directing the Escrow Agent to suspend disbursements from the Escrow Account.
(c) Notice of Amendments. The Administrative Agent shall promptly notify the Escrow Agent in writing of any termination of, or any amendment or modification to, the Credit Agreement that materially affects the rights or obligations of any Party under this Agreement, including, without limitation, any amendment to the conditions to disbursement, the financial covenants, or the mandatory prepayment provisions.
Section 5.3 — Escrow Agent Covenants
The Escrow Agent hereby covenants and agrees that, so long as any Escrowed Funds remain in the Escrow Account:
(a) Segregation of Funds. The Escrow Agent shall maintain the Escrow Account and all Escrowed Funds separate and apart from all other accounts maintained by the Escrow Agent, including its own proprietary accounts and all other escrow, trust, fiduciary, and custodial accounts.
(b) Investment Compliance. The Escrow Agent shall invest and reinvest the Escrowed Funds solely in Permitted Investments as provided in Section 2.4 hereof.
(c) Monthly Account Statements. The Escrow Agent shall deliver to the Depositor and the Administrative Agent, no later than the tenth (10th) Business Day of each calendar month, a written account statement for the Escrow Account for the immediately preceding calendar month, setting forth: (i) the opening balance of the Escrow Account; (ii) all deposits, credits, and investment earnings; (iii) all disbursements; (iv) all investment transactions; and (v) the closing balance of the Escrow Account.
(d) Compliance with Instructions. The Escrow Agent shall act solely in accordance with the written instructions received pursuant to this Agreement. The Escrow Agent shall not take any action with respect to the Escrow Account or the Escrowed Funds except as expressly authorized or required by this Agreement.
ARTICLE VI — ESCROW AGENT PROVISIONS
Section 6.1 — Duties and Responsibilities
(a) The Escrow Agent is acting solely as a stakeholder and agent under this Agreement. The Escrow Agent is not a party to, and is not bound by, the Credit Agreement or any other Loan Document (except to the extent that specific provisions thereof are expressly incorporated herein by reference). The Escrow Agent shall have no duty or obligation to monitor or enforce compliance with the Credit Agreement, the Construction Contract, or any other agreement among the Parties or any third party.
(b) The Escrow Agent shall have no duty to inquire into or determine the validity, accuracy, or completeness of any document, notice, instruction, certification, or other communication delivered to it under this Agreement. The Escrow Agent shall be entitled to rely, and shall be fully protected in relying, upon any writing, instrument, certificate, notice, direction, instruction, or signature that it in good faith believes to be genuine and to have been signed, executed, or delivered by an authorized person or persons.
(c) The Escrow Agent shall have no responsibility for the adequacy or sufficiency of any Disbursement Request or supporting documentation, and shall not be obligated to independently verify the accuracy of any statements, certifications, or representations contained therein.
(d) The Escrow Agent may act through agents, attorneys, and custodians and shall not be responsible for the negligence or misconduct of any such agent, attorney, or custodian appointed with reasonable care.
Section 6.2 — Liability Limitations
(a) The Escrow Agent shall not be liable for any act or omission taken or suffered in good faith and in accordance with this Agreement, except to the extent that a final, non-appealable judgment of a court of competent jurisdiction determines that such act or omission constituted willful misconduct, gross negligence, or fraud on the part of the Escrow Agent.
(b) The Escrow Agent shall not be responsible for, and shall incur no liability with respect to: (i) the sufficiency, accuracy, or completeness of any Disbursement Request, supporting documentation, or other information or instruction furnished to it under this Agreement; (ii) the form, execution, validity, value, or genuineness of any document, agreement, or instrument deposited with or delivered to it; (iii) any depreciation or loss of value of the Escrowed Funds or any Permitted Investment; (iv) any act or omission of any other Party to this Agreement; or (v) any delay in the performance of its duties caused by circumstances beyond its reasonable control, including acts of God, war, terrorism, civil unrest, fire, flood, power outage, telecommunications failure, or governmental action.
(c) The Escrow Agent shall have no obligation to determine whether any conditions precedent to disbursement set forth in Section 3.1 (other than the receipt of the required Disbursement Request and Administrative Agent approval or deemed approval) have been satisfied, and shall be entitled to rely conclusively on the certifications and approvals delivered to it in determining whether to effect a disbursement.
(d) In no event shall the Escrow Agent be liable for any indirect, incidental, consequential, special, punitive, or exemplary damages, including lost profits or lost business opportunities, regardless of the form of action and whether or not such damages were foreseeable.
Section 6.3 — Indemnification of Escrow Agent
(a) The Depositor shall indemnify, defend, and hold harmless the Escrow Agent and its directors, officers, employees, agents, and affiliates (each, an "Escrow Agent Indemnitee") from and against any and all losses, liabilities, claims, demands, damages, penalties, fines, costs, and expenses (including reasonable and documented attorneys' fees and disbursements) (collectively, "Losses") arising out of or in connection with this Agreement or the Escrow Agent's performance hereunder, except to the extent that such Losses are finally determined by a court of competent jurisdiction (by judgment that is not subject to further appeal) to have resulted directly from the Escrow Agent Indemnitee's willful misconduct, gross negligence, or fraud.