CONFIDENTIAL — SUBJECT TO ATTORNEY-CLIENT PRIVILEGE
CALDERWOOD & HARKNESS LLP Attorneys at Law
125 Broad Street New York, New York 10004 Telephone: (212) 555-7800 Facsimile: (212) 555-7801 www.calderwoodharkness.com
June 3, 2024
VIA ELECTRONIC DELIVERY AND OVERNIGHT COURIER
Crescent Harbor Bank, N.A. (as Administrative Agent)
Attention: Priya Nair, Director, Data Center & Digital Infrastructure Lending
1200 Harbor Point Drive Charlotte, North Carolina 28202
Re: Insurance Compliance Certificate — Ironhaven Data Centers LLC — Senior Secured Term Loan B Credit Agreement dated May 15, 2024 (the "Credit Agreement")
C&H Matter No.: 1043-00001 / Billing Code: IHDC-TLB-2024 Crescent Harbor Deal Reference: CHB-LF-2024-0287
Dear Ms. Nair:
cc: (via electronic delivery)
Catherine Ellsworth, Esq. Blackthorn & Sundial Software 51 West 52nd Street New York, New York 10019
William Hargrove Pinnacle Trust Company, N.A. 101 Constitution Avenue NW Washington, D.C. 20001
Jonathan Pryce-Williams, Esq. General Counsel & Secretary Ironhaven Data Centers LLC 4500 Dominion Ridge Boulevard, Suite 300 Ashburn, Virginia 20147
Natasha Greenfeld VP Treasury & Capital Markets Ironhaven Data Centers LLC 4500 Dominion Ridge Boulevard, Suite 300 Ashburn, Virginia 20147
From: Daniel Obi, Lead Associate, Banking & Finance, Calderwood & Harkness LLP
PART ONE: COVER MEMORANDUM
I. Purpose and Context
Calderwood & Harkness LLP ("Calderwood & Harkness" or "C&H") serves as borrower's counsel to Ironhaven Data Centers LLC, a Delaware limited liability company ("IHDC" or the "Borrower"), in connection with the $950,000,000 Senior Secured Term Loan B Credit Agreement dated as of May 15, 2024 (as it may be amended, restated, supplemented, or otherwise modified from time to time, the "Credit Agreement"), among IHDC (as Borrower), Ironhaven Frankfurt GmbH, a German limited liability company organized under the laws of the Federal Republic of Germany (the "Co-Borrower"), Ironhaven Holdings Inc., a Delaware corporation (the "Parent Guarantor"), Crescent Harbor Bank, N.A. (as Administrative Agent), Pinnacle Trust Company, N.A. (as Collateral Agent), and the several lenders from time to time party thereto (the "Lenders").
The purpose of this memorandum is to transmit the Insurance Compliance Certificate executed as of the date hereof by Calloway & Strand Insurance Brokers, Inc. ("Calloway & Strand" or the "Insurance Broker"), the duly appointed insurance broker for IHDC and its subsidiaries. The Insurance Compliance Certificate is being delivered as a condition precedent to the initial funding on the Closing Date, which is scheduled for June 3, 2024. Specifically, the Certificate satisfies the insurance conditions precedent set forth in Section 4.01(k) (Insurance Conditions Precedent) of the Credit Agreement, which requires the delivery, on or prior to the Closing Date, of a certificate from the Borrower's insurance broker confirming that all insurance coverages required by Article VI, Section 6.06 (Insurance Covenants) of the Credit Agreement are in full force and effect and that appropriate endorsements have been obtained in favor of the Collateral Agent for the benefit of the Secured Parties.
The Closing Date deliverable package, of which this memorandum and the enclosed Insurance Compliance Certificate form a part, is being delivered simultaneously with the other conditions precedent documents, including the legal opinions, officer's certificates, and collateral documents required under Section 4.01 of the Credit Agreement. Calderwood & Harkness is making this delivery in its capacity as borrower's counsel and at the direction of IHDC's General Counsel, Jonathan Pryce-Williams, and VP Treasury & Capital Markets, Natasha Greenfeld.
II. Summary of Review
In connection with the preparation and delivery of the enclosed Insurance Compliance Certificate, Calderwood & Harkness has undertaken the following review and confirms the following matters:
1. Review of Certificate and Underlying Documentation. Calderwood & Harkness has reviewed the Insurance Compliance Certificate in its entirety, together with the underlying insurance policies, binders, certificates of insurance, and endorsements referenced therein and attached as appendices to the Certificate. We have confirmed that the descriptions of coverages, limits, deductibles, policy periods, named insureds, and loss payee/additional insured designations set forth in Schedule A to the Certificate are consistent with the corresponding provisions of the underlying insurance documentation as furnished to us by Calloway & Strand and by IHDC's internal risk management team.
2. Coverage for Both Campuses. We have confirmed that all required insurance coverages are in place for both (a) the Virginia campus known as "Ironhaven Ashburn I," located at 4500–4550 Dominion Ridge Boulevard, Ashburn, Loudoun County, Virginia 20147, consisting of approximately 142 acres across two parcels (Tax Parcel Nos. 087-27-1234 and 087-27-1235), with Phase I development targeting 60 MW of critical IT load capacity at an estimated construction cost of $475,000,000, and (b) the Frankfurt campus known as "Ironhaven Frankfurt I," located at Hanauer Landstraße 188, 60314 Frankfurt am Main, Germany (Grundbuch von Frankfurt am Main-Ost, Blatt 54321, Flur 12, Flurstück 789), consisting of approximately 18.7 hectares, with Phase I development targeting 40 MW of critical IT load capacity at an estimated construction cost of €253,571,429 (approximately $275,000,000 at the reference exchange rate of EUR/USD 1.0846).
3. Loss Payee and Additional Insured Designations. We have confirmed that Pinnacle Trust Company, N.A. (as Collateral Agent for the benefit of the Secured Parties under the Credit Agreement) is named as loss payee and/or mortgagee, as applicable, on all property, builder's risk, and business interruption insurance policies, and as additional insured on all general liability and umbrella/excess liability policies. With respect to the German campus policies, Pinnacle Trust Company, N.A. is designated as Security Trustee acting through its London branch, consistent with the terms of the German Parallel Debt and Security Trust Agreement dated as of May 15, 2024. Additionally, Crescent Harbor Bank, N.A. (as Administrative Agent) is named as additional insured on the commercial general liability and umbrella/excess liability policies. These designations are consistent with the requirements of Sections 6.06(c) and 6.06(d) of the Credit Agreement and with the applicable security documents, including the Deed of Trust, Assignment of Leases and Rents, Security Agreement, and Fixture Filing recorded in Loudoun County, Virginia.
4. Coverage Amounts, Deductibles, and Policy Terms. We have confirmed that the coverage amounts, deductibles, self-insured retentions, and policy terms for each policy listed on Schedule A to the Certificate meet or exceed the minimum requirements specified in the insurance covenants set forth in Section 6.06 of the Credit Agreement. In particular, we note that (a) the builder's risk policies provide full replacement cost coverage for Phase I construction at each campus, (b) the commercial property policies are written on a replacement cost basis, (c) the general liability and umbrella policies provide the required minimum per-occurrence and aggregate limits, and (d) the business interruption policies provide indemnity periods of not less than twelve (12) months with coverage amounts sufficient to cover projected gross rental income from anchor tenants, including Stratos Cloud Services, Inc. (Virginia campus) and Euronova Digital GmbH (Frankfurt campus).
5. Carrier Financial Strength Ratings. We have confirmed that all policies are issued by insurance carriers with financial strength ratings of at least "A-" (Excellent) from A.M. Best Company, Inc. (or an equivalent independent rating agency), as required by Section 6.06(a) of the Credit Agreement. Several carriers maintain ratings in excess of this minimum, with certain policies placed with carriers rated "A+" (Superior).
6. Cancellation Notice Provisions. We have confirmed that each policy provides for at least thirty (30) days' prior written notice to the Collateral Agent before any cancellation, non-renewal, or material modification of coverage, with a minimum of ten (10) days' notice in the case of cancellation due to non-payment of premiums, consistent with the requirements of Section 6.06(e) of the Credit Agreement.
7. Waiver of Subrogation and Primary/Non-Contributory Endorsements. We have confirmed the inclusion of waiver of subrogation endorsements on all property, builder's risk, and business interruption policies in favor of the Administrative Agent, the Collateral Agent, and the Lenders, as well as primary and non-contributory endorsements on the commercial general liability and umbrella/excess liability policies with respect to the additional insureds named thereunder.
III. Enclosures
Enclosed herewith, please find the following documents:
1. Insurance Compliance Certificate of Calloway & Strand Insurance Brokers, Inc. — Original executed version, bearing the signature of Patricia Calloway, Managing Director, dated as of June 3, 2024, together with Schedule A (Summary of Insurance Policies) incorporated therein.
2. Appendix 1: Copies of Insurance Binders/Certificates of Insurance — Copies of the certificates of insurance and/or binders for each of the eight (8) insurance policies listed on Schedule A, including builder's risk insurance (Virginia and Frankfurt campuses), commercial property insurance (Virginia and Frankfurt campuses), commercial general liability insurance, umbrella/excess liability insurance, and business interruption insurance (Virginia and Frankfurt campuses), each bearing the Closing Date of June 3, 2024 and reflecting the coverages, limits, deductibles, and endorsements described in the Certificate.
3. Appendix 2: Endorsement Documentation — Copies of all endorsements naming Pinnacle Trust Company, N.A. as Collateral Agent (with respect to domestic policies) and as Security Trustee through its London branch (with respect to German-law policies) as loss payee/mortgagee and/or additional insured, together with waiver of subrogation endorsements, primary and non-contributory endorsements, and 30-day notice of cancellation endorsements.
IV. Conclusion
Based on our review of the Insurance Compliance Certificate and the underlying insurance documentation, we are satisfied that the insurance conditions precedent set forth in Section 4.01(k) of the Credit Agreement have been satisfied. We note that the ongoing insurance covenants set forth in Section 6.06 of the Credit Agreement will require IHDC and its subsidiaries to maintain these coverages throughout the term of the Credit Agreement (maturing June 3, 2031) and to deliver annual insurance compliance certificates within thirty (30) days of each policy renewal. Calloway & Strand has acknowledged these ongoing obligations in Section 5.3 of the Certificate.
Should you have any questions regarding the enclosed materials or require any additional information, please do not hesitate to contact the undersigned at (212) 555-7812 or daniel.obi@calderwoodharkness.com, or the supervising partner, Stephanie Okafor, at (212) 555-7805 or stephanie.okafor@calderwoodharkness.com.
We appreciate your cooperation in bringing this transaction to a successful closing.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Name: Daniel Obi
Title: Lead Associate, Banking & Finance
Reviewed by: ________
Name: Stephanie Okafor
Title: Partner, Banking & Finance
Enclosures (as described above)
PART TWO
INSURANCE COMPLIANCE CERTIFICATE
of
CALLOWAY & STRAND INSURANCE BROKERS, INC.
INSURANCE COMPLIANCE CERTIFICATE
Certificate Reference Number: CS-IHDC-2024-0603
Date: June 3, 2024
Issued by:
Calloway & Strand Insurance Brokers, Inc. 200 Liberty Street, Suite 1400 New York, New York 10281 Telephone: (212) 555-4200 Facsimile: (212) 555-4201
Addressed to:
Crescent Harbor Bank, N.A. (as Administrative Agent under the Credit Agreement defined below) 1200 Harbor Point Drive Charlotte, North Carolina 28202
Pinnacle Trust Company, N.A. (as Collateral Agent under the Credit Agreement defined below) 101 Constitution Avenue NW Washington, D.C. 20001
Each of the Lenders party to the Credit Agreement defined below
RECITALS
A. Reference to Credit Agreement. Reference is hereby made to that certain Senior Secured Term Loan B Credit Agreement dated as of May 15, 2024 (as it 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 ("IHDC" or the "Borrower"), Ironhaven Frankfurt GmbH, a limited liability company organized under the laws of the Federal Republic of Germany (Gesellschaft mit beschränkter Haftung) (the "Co-Borrower"), Ironhaven Holdings Inc., a Delaware corporation (the "Parent Guarantor"), Crescent Harbor Bank, N.A., a national banking association (the "Administrative Agent"), Pinnacle Trust Company, N.A., a national trust company (the "Collateral Agent"), and the several financial institutions from time to time party thereto as lenders (collectively, the "Lenders"). The total facility amount under the Credit Agreement is Nine Hundred Fifty Million Dollars ($950,000,000), consisting of (i) a USD Tranche in the principal amount of Six Hundred Seventy-Five Million Dollars ($675,000,000) and (ii) a EUR Sub-Tranche in the principal amount of Two Hundred Fifty-Three Million Five Hundred Seventy-One Thousand Four Hundred Twenty-Nine Euros (€253,571,429) (approximately Two Hundred Seventy-Five Million Dollars ($275,000,000) equivalent at a reference exchange rate of EUR/USD 1.0846). The CUSIP number assigned to the Credit Agreement is 46283LAA5. Capitalized terms used but not defined in this Certificate shall have the meanings ascribed to them in the Credit Agreement.
B. Role of Calloway & Strand. Calloway & Strand Insurance Brokers, Inc. ("Calloway & Strand" or the "Broker") is the duly appointed insurance broker for IHDC and its subsidiaries, including the Co-Borrower, in connection with the placement of builder's risk insurance, commercial property insurance, commercial general liability insurance, umbrella/excess liability insurance, and business interruption insurance for the data center campuses known as "Ironhaven Ashburn I" (located in Ashburn, Loudoun County, Virginia) and "Ironhaven Frankfurt I" (located in Frankfurt am Main, Germany). Calloway & Strand has served as insurance broker for IHDC and its affiliates since the formation of the Ironhaven platform in 2022. The key contact at Calloway & Strand with respect to the insurance program described herein is Patricia Calloway, Managing Director, who may be reached at (212) 555-4210 or pcalloway@calloway-strand.com.
C. Purpose. This Insurance Compliance Certificate (this "Certificate") is delivered pursuant to Section 4.01(k) (Insurance Conditions Precedent) of the Credit Agreement as a condition precedent to the initial funding under the Credit Agreement on the Closing Date, which is June 3, 2024. The purpose of this Certificate is to certify that all insurance required by Section 6.06 (Insurance Covenants) of the Credit Agreement is in full force and effect as of the Closing Date, that coverage amounts, types, deductibles, and policy terms meet or exceed the minimum requirements specified in the Credit Agreement, and that appropriate endorsements have been obtained in favor of the Collateral Agent (for the benefit of the Secured Parties) as loss payee, mortgagee, and additional insured, as applicable.
SECTION 1: CERTIFICATION OF COMPLIANCE
1.1 General Certification
Calloway & Strand hereby certifies that, as of the date hereof, it has reviewed the insurance requirements set forth in Section 6.06 (Insurance Covenants) of the Credit Agreement and confirms that the Borrower and the Co-Borrower maintain the insurance policies described on Schedule A hereto (collectively, the "Policies"), each of which complies in all material respects with the requirements of the Credit Agreement. In conducting this review, Calloway & Strand has examined (a) the original or certified copies of each Policy, (b) all binders, declarations pages, and certificates of insurance for each Policy, (c) all endorsements, riders, and amendments to each Policy, and (d) the relevant provisions of the Credit Agreement, including without limitation Section 6.06 and the related definitions in Article I thereof. Based on this review, and subject to the limitations set forth in Section 5.2 of this Certificate, Calloway & Strand makes the specific certifications set forth below.
1.2 Specific Certifications
Calloway & Strand specifically certifies the following with respect to each of the Policies described on Schedule A:
(a) Policies in Full Force and Effect. All insurance policies listed on Schedule A are in full force and effect as of the Closing Date (June 3, 2024). No Policy has been suspended, revoked, or terminated, and no Policy is subject to any pending dispute between the named insured and the applicable insurer that could result in a suspension, revocation, or termination of coverage.
(b) Premiums Paid. All premiums due and payable as of the Closing Date with respect to each Policy have been paid in full. There are no outstanding premium balances, and no insurer has issued any notice of intent to cancel any Policy for non-payment of premiums. The aggregate annual premium for the insurance program described on Schedule A, as of the Closing Date, is approximately $4,875,000 (inclusive of all domestic and international policy premiums, broker fees, and applicable taxes).
(c) No Cancellation or Modification Notices. As of the date hereof, no notice of cancellation, non-renewal, or material modification has been received by the Borrower, the Co-Borrower, or Calloway & Strand with respect to any Policy, and to the best of Calloway & Strand's knowledge, no insurer has indicated an intention to cancel, non-renew, or materially modify any Policy.
(d) Coverage Meets Credit Agreement Minimums. The coverage amounts, types of coverage, deductibles, self-insured retentions, and policy terms for each Policy meet or exceed the minimum requirements specified in Section 6.06 of the Credit Agreement and the related definitions and schedules thereof. In particular, (i) all property and builder's risk policies are written on a full replacement cost basis without coinsurance penalties, (ii) all deductibles and self-insured retentions are within the maximum amounts permitted by the Credit Agreement, and (iii) all policies include the specific coverages and sub-limits required by the Credit Agreement, including flood, earthquake, terrorism, and equipment breakdown coverages, as applicable.
(e) Carrier Financial Strength Ratings. All Policies are issued by insurance carriers with a financial strength rating of at least "A-" (Excellent) by A.M. Best Company, Inc. (or, with respect to non-U.S. carriers, an equivalent rating from Standard & Pelvoran Financial Services LLC or another internationally recognized insurance rating agency acceptable to the Administrative Agent). The specific financial strength ratings for each carrier are set forth on Schedule A.
(f) Cancellation Notice Provisions. Each Policy provides for at least thirty (30) days' prior written notice to the Collateral Agent (and, where applicable, the Administrative Agent) before any cancellation, non-renewal, or material modification of coverage, with a minimum of ten (10) days' prior written notice in the event of cancellation due to non-payment of premiums. These notice provisions are incorporated into the Policies by endorsement or, where mandated by applicable law or regulation, by operation of the policy terms.
1.3 Loss Payee / Additional Insured Endorsements
Calloway & Strand certifies that each applicable property, builder's risk, and business interruption Policy includes an endorsement naming Pinnacle Trust Company, N.A. (as Collateral Agent for the benefit of the Secured Parties under the Credit Agreement) as follows:
(i) Loss Payee / Mortgagee. Pinnacle Trust Company, N.A., as Collateral Agent (with respect to domestic Policies) and as Security Trustee, acting through its London branch (with respect to German-law Policies), is named as loss payee and/or mortgagee, as applicable, under the standard mortgagee clause (or its international equivalent, including the Hypothekengläubigerklausel under German insurance practice) on all property insurance, builder's risk insurance, and business interruption insurance Policies. The standard mortgagee clause provides that the interest of the Collateral Agent / Security Trustee shall not be invalidated by any act, neglect, or default of the Borrower, the Co-Borrower, or any other named insured, and that the insurer will pay insurance proceeds in accordance with the terms of the clause regardless of any breach of policy conditions by the named insured.
(ii) Additional Insured. Pinnacle Trust Company, N.A., as Collateral Agent / Security Trustee, and Crescent Harbor Bank, N.A., as Administrative Agent, are each named as additional insured under all commercial general liability and umbrella/excess liability Policies. The additional insured endorsements provide coverage to the Collateral Agent and the Administrative Agent for liability arising out of or in connection with the operations, premises, and activities of the Borrower, the Co-Borrower, and the Parent Guarantor at the insured locations.
All endorsements referenced in this Section 1.3 are in the forms previously reviewed and approved by the Administrative Agent (through its counsel, Blackthorn & Sundial Software) and the Collateral Agent (through its internal insurance review team), copies of which are attached as Appendix 2 to this Certificate.
1.4 Compliance with Deed of Trust and German Security Documents
In addition to satisfying the insurance requirements of the Credit Agreement, the endorsements and coverages described herein and on Schedule A also satisfy the insurance requirements of the following security documents:
(a) Virginia Campus Security Documents. The Deed of Trust, Assignment of Leases and Rents, Security Agreement, and Fixture Filing dated as of May 15, 2024, made by Ironhaven Data Centers LLC (as Grantor) for the benefit of Pinnacle Trust Company, N.A. (as Collateral Agent), recorded in the Clerk's Office of the Circuit Court of Loudoun County, Virginia, covering the real property and improvements located at 4500–4550 Dominion Ridge Boulevard, Ashburn, Loudoun County, Virginia 20147 (Tax Parcel Nos. 087-27-1234 and 087-27-1235, comprising approximately 142 acres), including all existing structures, improvements under construction, fixtures, equipment, and personal property located thereon. The mortgagee/loss payee endorsements on the Virginia campus Policies name Pinnacle Trust Company, N.A. as Collateral Agent, consistent with the requirements of the Deed of Trust.
(b) Frankfurt Campus Security Documents. The German Parallel Debt and Security Trust Agreement (Parallelverpflichtung und Sicherheitentreuhandvertrag) dated as of May 15, 2024, among Ironhaven Frankfurt GmbH (as Security Provider), Pinnacle Trust Company, N.A. (as Security Trustee, acting through its London branch), and the Administrative Agent, together with the related German-law security documents, including the land charge (Grundschuld) registered in favor of Pinnacle Trust Company, N.A. (London branch) against the Frankfurt campus parcel at Hanauer Landstraße 188, 60314 Frankfurt am Main, Germany (Grundbuch von Frankfurt am Main-Ost, Blatt 54321, Flur 12, Flurstück 789, comprising approximately 18.7 hectares). The loss payee endorsements on the Frankfurt campus Policies name Pinnacle Trust Company, N.A. as Security Trustee (London branch), consistent with the requirements of the German Parallel Debt and Security Trust Agreement and the related security instruments.
SECTION 2: INSURED PROPERTIES
2.1 Virginia Campus — "Ironhaven Ashburn I"
The Virginia campus, known as "Ironhaven Ashburn I," is located at 4500–4550 Dominion Ridge Boulevard, Ashburn, Loudoun County, Virginia 20147. The campus is situated on two contiguous parcels of land identified as Tax Parcel No. 087-27-1234 and Tax Parcel No. 087-27-1235 in the records of Loudoun County, Virginia, with a combined land area of approximately 142 acres. The campus is located within the Loudoun County data center corridor, one of the world's largest concentrations of hyperscale and enterprise data center capacity, and benefits from proximity to multiple fiber interconnection points and dual-feed utility power infrastructure.
The Phase I development of the Virginia campus consists of the construction of a purpose-built data center facility with an aggregate critical IT load capacity of approximately 60 megawatts (MW), including associated electrical infrastructure (substations, switchgear, uninterruptible power supply systems, backup generators), mechanical cooling systems, network infrastructure, and administrative and support facilities. The estimated total construction cost for Phase I is Four Hundred Seventy-Five Million Dollars ($475,000,000), inclusive of hard construction costs, soft costs, contingency reserves, and pre-operational expenditures. Construction commenced in April 2024, with substantial completion expected in the fourth quarter of 2025.
The named insured on all Virginia campus Policies is Ironhaven Data Centers LLC. Property coverage for the Virginia campus includes coverage for all existing structures, improvements under construction, fixtures, equipment (including critical power and cooling infrastructure), personal property, and materials in transit or stored off-site in connection with the Phase I construction. The pre-lease letter of intent for the Virginia campus has been executed with Stratos Cloud Services, Inc., a major cloud services provider, for approximately 30 MW of critical IT load capacity at an annual base rent of $14,400,000 under a five-year initial term with renewal options.
2.2 Frankfurt Campus — "Ironhaven Frankfurt I"
The Frankfurt campus, known as "Ironhaven Frankfurt I," is located at Hanauer Landstraße 188, 60314 Frankfurt am Main, Germany. The campus is situated on a single parcel of land identified in the Grundbuch von Frankfurt am Main-Ost, Blatt 54321, Flur 12, Flurstück 789, with a total land area of approximately 18.7 hectares. The campus is located within the Frankfurt data center market, a key European interconnection hub and the home of the DE-CIX internet exchange, one of the world's largest internet exchange points by peak traffic.
The Phase I development of the Frankfurt campus consists of the construction of a purpose-built data center facility with an aggregate critical IT load capacity of approximately 40 megawatts (MW), including associated electrical infrastructure, mechanical cooling systems, network infrastructure, and administrative and support facilities. The estimated total construction cost for Phase I is Two Hundred Fifty-Three Million Five Hundred Seventy-One Thousand Four Hundred Twenty-Nine Euros (€253,571,429), approximately equivalent to Two Hundred Seventy-Five Million Dollars ($275,000,000) at the reference exchange rate of EUR/USD 1.0846. Construction commenced in May 2024, with substantial completion expected in the first quarter of 2026.
The named insured on all Frankfurt campus Policies is Ironhaven Frankfurt GmbH. Property coverage for the Frankfurt campus includes coverage for all site improvements, structures under construction, fixtures, equipment (including critical power and cooling infrastructure), and materials in transit or stored off-site. The pre-lease letter of intent for the Frankfurt campus has been executed with Euronova Digital GmbH, a European cloud and managed services provider, for approximately 20 MW of critical IT load capacity at an annual base rent of €9,800,000 under a seven-year initial term with renewal options.
SECTION 3: SCHEDULE A — SUMMARY OF INSURANCE POLICIES
The following is a summary of all insurance policies currently maintained by the Borrower and the Co-Borrower in compliance with the insurance requirements of the Credit Agreement. This Schedule A is incorporated by reference into, and forms an integral part of, this Certificate. In the event of any discrepancy between the summary information set forth below and the actual terms and conditions of the underlying Policies, the terms and conditions of the underlying Policies shall control.
Policy 1: Builder's Risk Insurance — Virginia Campus
Policy 2: Builder's Risk Insurance — Frankfurt Campus
Policy 3: Commercial Property Insurance — Virginia Campus
Policy 4: Commercial Property Insurance — Frankfurt Campus
Policy 5: Commercial General Liability Insurance
Policy 6: Umbrella / Excess Liability Insurance
Policy 7: Business Interruption Insurance — Virginia Campus
Policy 8: Business Interruption Insurance — Frankfurt Campus
SECTION 4: ADDITIONAL ENDORSEMENTS AND PROVISIONS
4.1 Mortgagee / Loss Payee Endorsement
Each property, builder's risk, and business interruption Policy listed on Schedule A includes a standard mortgagee clause endorsement (or, with respect to the German-law Policies, the international equivalent thereof, including the Hypothekengläubigerklausel), naming Pinnacle Trust Company, N.A. as Collateral Agent (with respect to domestic Policies) and as Security Trustee, acting through its London branch (with respect to German-law Policies), as loss payee and/or mortgagee for the benefit of the Secured Parties under the Credit Agreement.
The standard mortgagee clause provides, among other things, that:
(a) The interest of the Collateral Agent / Security Trustee in the applicable Policy shall not be invalidated by any act, neglect, omission, or default of the Borrower, the Co-Borrower, or any other named insured, including but not limited to any increase in hazard, change in occupancy, vacancy, or failure to comply with policy conditions;
(b) In the event of any loss or damage covered by the Policy, the insurer shall pay the Collateral Agent / Security Trustee as its interest may appear, notwithstanding any breach of policy conditions by the named insured;
(c) The insurer shall provide the Collateral Agent / Security Trustee with at least thirty (30) days' prior written notice of cancellation, non-renewal, or material modification of coverage (ten (10) days in the case of cancellation for non-payment of premiums);
(d) Loss proceeds in excess of Five Hundred Thousand Dollars ($500,000) (or the Euro equivalent) per occurrence shall be payable jointly to the Collateral Agent / Security Trustee and the applicable Named Insured, and shall be applied in accordance with the terms of the Credit Agreement and the applicable security documents (including the Deed of Trust and the German Parallel Debt and Security Trust Agreement); and
(e) The insurer reserves the right to deny coverage to the named insured while preserving coverage to the Collateral Agent / Security Trustee under the standard mortgagee clause, subject to the named insured's right to cure any breach of policy conditions.
4.2 Notice of Cancellation
All Policies listed on Schedule A contain provisions (whether by endorsement, policy form, or operation of applicable law) requiring the insurer to provide at least thirty (30) calendar days' prior written notice to the Collateral Agent (and, where applicable, the Administrative Agent) before any cancellation, non-renewal, or material modification of the applicable Policy. In the event of cancellation due to non-payment of premiums, the minimum notice period is ten (10) calendar days.
Such notices are to be delivered by the insurer to:
Pinnacle Trust Company, N.A. (as Collateral Agent / Security Trustee)
Attention: Insurance Compliance Unit
101 Constitution Avenue NW Washington, D.C. 20001
Email: insurance.notices@pinnacletrust.com
With a copy to:
Crescent Harbor Bank, N.A. (as Administrative Agent)
Attention: Priya Nair, Director, Data Center & Digital Infrastructure Lending
1200 Harbor Point Drive Charlotte, North Carolina 28202
Email: priya.nair@crescentharbor.com
4.3 Waiver of Subrogation
All property, builder's risk, and business interruption Policies listed on Schedule A include a waiver of subrogation endorsement in favor of each of (a) the Administrative Agent, (b) the Collateral Agent / Security Trustee, (c) the Lenders, and (d) their respective officers, directors, employees, agents, and affiliates (collectively, the "Waiver Beneficiaries"). Pursuant to these endorsements, the applicable insurer agrees to waive any and all rights of subrogation, recovery, or contribution against the Waiver Beneficiaries with respect to any claim, loss, cost, or expense arising out of or in connection with an insured peril, whether or not such claim, loss, cost, or expense is caused in whole or in part by the negligence or fault of any Waiver Beneficiary. The waiver of subrogation endorsements are effective as of the inception date of each applicable Policy and shall remain in effect throughout the policy period unless the Policy is cancelled or non-renewed in accordance with its terms and the applicable notice provisions.
4.4 Primary and Non-Contributory Endorsement
The commercial general liability Policy (Policy No. CGL-2024-IHDC-005) and the umbrella/excess liability Policy (Policy No. UMB-2024-IHDC-006) each include a primary and non-contributory endorsement with respect to the additional insureds named thereunder (i.e., Pinnacle Trust Company, N.A. as Collateral Agent / Security Trustee and Crescent Harbor Bank, N.A. as Administrative Agent). Pursuant to these endorsements, the coverage afforded to the additional insureds under such Policies shall be primary to, and shall not seek contribution from, any other insurance maintained by or available to the additional insureds, regardless of whether such other insurance is described as primary, contributing, excess, contingent, or otherwise. The additional insureds' own insurance policies, if any, shall be deemed excess of and non-contributing with the coverage provided under the Policies. This provision applies solely to claims arising out of or in connection with the operations, premises, and activities of the Borrower, the Co-Borrower, and the Parent Guarantor at the insured locations described herein.
SECTION 5: REPRESENTATIONS AND ACKNOWLEDGMENTS
5.1 Broker's Representations
Calloway & Strand represents and warrants to the Administrative Agent, the Collateral Agent, and the Lenders as follows:
(a) Licensing and Authority. Calloway & Strand is a duly organized and validly existing corporation under the laws of the State of New York and is duly licensed as an insurance broker in the State of New York, the Commonwealth of Virginia, and all other jurisdictions in which it is required to be licensed in connection with the placement of the insurance program described in this Certificate. Calloway & Strand is also authorized to place insurance in the Federal Republic of Germany through its affiliate, Calloway & Strand (Europe) GmbH, a licensed insurance intermediary registered with the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin).
(b) Authorization. Calloway & Strand has been duly authorized by IHDC, acting through its General Counsel, Jonathan Pryce-Williams, and its VP Treasury & Capital Markets, Natasha Greenfeld, to issue this Certificate on behalf of IHDC and its subsidiaries, including the Co-Borrower.
(c) Accuracy of Information. All information contained in this Certificate, including the information set forth on Schedule A and in the appendices hereto, is true, correct, and complete in all material respects as of the date hereof, based on the Policies placed by Calloway & Strand and the documentation in Calloway & Strand's files as of the date hereof. Calloway & Strand has not knowingly omitted any material information regarding the insurance program that would be relevant to the Administrative Agent, the Collateral Agent, or the Lenders in assessing compliance with the insurance requirements of the Credit Agreement.
(d) No Material Claims. As of the date hereof, Calloway & Strand is not aware of any pending or threatened material insurance claims under any of the Policies, nor is it aware of any circumstances that would reasonably be expected to give rise to a material claim under any Policy.
5.2 Limitations. This Certificate is subject to the following limitations, which are set forth for the information and protection of the addressees hereof:
(a) Sole Benefit. This Certificate is issued for the sole benefit of the Administrative Agent, the Collateral Agent, and the Lenders under the Credit Agreement. No other person or entity shall be entitled to rely on the certifications, representations, or statements contained herein without the prior written consent of Calloway & Strand.
(b) No Amendment of Policies. This Certificate is provided for informational and certification purposes only and does not amend, extend, alter, or otherwise modify the terms, conditions, exclusions, or limitations of any Policy described herein. The descriptions of coverage set forth in this Certificate and on Schedule A are summaries only and are qualified in their entirety by reference to the actual terms and conditions of the underlying Policies. In the event of any conflict between the descriptions contained in this Certificate and the terms and conditions of the underlying Policies, the terms and conditions of the underlying Policies shall control in all respects.
(c) No Guarantee of Coverage. Calloway & Strand does not guarantee that any particular claim will be covered by any Policy. The determination of whether a particular loss or claim is covered by a Policy is subject to the terms, conditions, exclusions, and limitations of the applicable Policy and to the applicable insurer's claims adjustment and coverage determination process. Calloway & Strand shall have no liability to the Administrative Agent, the Collateral Agent, or the Lenders for any coverage determination made by an insurer.
(d) Basis of Information. The certifications and representations contained herein are based on the information available to Calloway & Strand as of the date hereof, including the Policies, binders, certificates of insurance, endorsements, and other documentation in Calloway & Strand's files. Calloway & Strand has not independently verified all information provided to it by IHDC, the Co-Borrower, or the insurance carriers, and has relied in good faith on the accuracy of such information.
5.3 Ongoing Obligations
Calloway & Strand acknowledges its understanding that the Credit Agreement requires the Borrower and its subsidiaries to maintain the insurance coverages described in this Certificate, and to comply with the insurance covenants set forth in Section 6.06 of the Credit Agreement, throughout the term of the Credit Agreement, which matures on June 3, 2031. In connection therewith, Calloway & Strand agrees as follows:
(a) Renewal Notifications. Calloway & Strand will use commercially reasonable efforts to provide the Collateral Agent (with copies to the Administrative Agent) with copies of renewal policies, binders, or certificates of insurance at least fifteen (15) days prior to the scheduled expiration of any Policy listed on Schedule A, to the extent that renewal documentation is available from the applicable insurer at such time.
(b) Annual Insurance Compliance Certificates. Calloway & Strand will cooperate with IHDC in the preparation and delivery of annual insurance compliance certificates, which are required to be delivered to the Administrative Agent and the Collateral Agent within thirty (30) days of each annual policy renewal, certifying continued compliance with the insurance requirements of the Credit Agreement.
(c) Material Changes. Calloway & Strand will promptly notify the Collateral Agent and the Administrative Agent in writing of any material change in the insurance program maintained by IHDC and its subsidiaries, including but not limited to (i) any cancellation, non-renewal, or material modification of a Policy, (ii) any material reduction in coverage limits or increase in deductibles or self-insured retentions, (iii) any change in insurance carrier that results in the applicable Policy being issued by a carrier with a financial strength rating below "A-" (Excellent), or (iv) any material insurance claim in excess of $1,000,000 (or the Euro equivalent) under any Policy.
(d) Cooperation. Calloway & Strand will reasonably cooperate with the Administrative Agent, the Collateral Agent, and their respective advisors in connection with any review or audit of the insurance program maintained by IHDC and its subsidiaries, including by providing access to relevant policy documentation and endorsements upon reasonable request.
SECTION 6: EXECUTION
This Insurance Compliance Certificate has been duly executed and delivered as of the date first written above by the undersigned, who is a duly authorized officer of Calloway & Strand Insurance Brokers, Inc. and who has the authority to bind Calloway & Strand with respect to the certifications, representations, and acknowledgments contained herein.
CALLOWAY & STRAND INSURANCE BROKERS, INC.
By: ________
Name: Patricia Calloway
Title: Managing Director
Date: June 3, 2024
Address:
200 Liberty Street, Suite 1400 New York, New York 10281 Telephone: (212) 555-4210
Email: pcalloway@calloway-strand.com
APPENDIX 1
CERTIFICATES OF INSURANCE / BINDERS
Appendix 1 to this Insurance Compliance Certificate consists of copies of the certificates of insurance and/or binders for each of the eight (8) insurance policies listed on Schedule A (Section 3) of this Certificate. Each certificate of insurance or binder bears the Closing Date of June 3, 2024, and reflects the coverages, limits, deductibles, named insureds, loss payee/mortgagee designations, additional insured designations, and endorsements described in this Certificate and on Schedule A.
The following certificates of insurance / binders are enclosed:
1. Policy No. BRV-2024-IHDC-001 — Builder's Risk Insurance, Virginia Campus — Certificate of Insurance issued by Harborview Underwriters, Inc.
2. Policy No. BRF-2024-IHDC-002 — Builder's Risk Insurance, Frankfurt Campus — Certificate of Insurance (Versicherungsbestätigung) issued by Rheinland Versicherung AG
3. Policy No. CPV-2024-IHDC-003 — Commercial Property Insurance, Virginia Campus — Certificate of Insurance issued by Northpoint Casualty & Surety Company
4. Policy No. CPF-2024-IHDC-004 — Commercial Property Insurance, Frankfurt Campus — Certificate of Insurance (Versicherungsbestätigung) issued by Rheinland Versicherung AG
5. Policy No. CGL-2024-IHDC-005 — Commercial General Liability Insurance — Certificate of Insurance issued by Atlantic Shield Insurance Group, Ltd.
6. Policy No. UMB-2024-IHDC-006 — Umbrella / Excess Liability Insurance — Certificate of Insurance issued by Summit Excess & Surplus Lines, Inc.
7. Policy No. BIV-2024-IHDC-007 — Business Interruption Insurance, Virginia Campus — Certificate of Insurance issued by Northpoint Casualty & Surety Company
8. Policy No. BIF-2024-IHDC-008 — Business Interruption Insurance, Frankfurt Campus — Certificate of Insurance (Versicherungsbestätigung) issued by Rheinland Versicherung AG
Note: The certificates of insurance and binders enclosed in this Appendix 1 are provided for informational purposes and as evidence of coverage. They do not amend, extend, or alter the terms of the underlying Policies. In the event of any discrepancy between a certificate of insurance or binder and the underlying Policy, the terms of the underlying Policy shall control.
APPENDIX 2
ENDORSEMENT DOCUMENTATION
Appendix 2 to this Insurance Compliance Certificate consists of copies of the endorsements obtained in connection with the insurance program described herein. All endorsements are effective as of June 3, 2024 (the Closing Date) and apply to the Policies identified on Schedule A (Section 3) of this Certificate.
The following endorsements are enclosed:
A. Loss Payee / Mortgagee Endorsements
1. Standard Mortgagee Clause Endorsement — Policy No. BRV-2024-IHDC-001 (Builder's Risk, Virginia Campus) — naming Pinnacle Trust Company, N.A. as Collateral Agent as loss payee / mortgagee.
2. Standard Mortgagee Clause Endorsement (Hypothekengläubigerklausel) — Policy No. BRF-2024-IHDC-002 (Builder's Risk, Frankfurt Campus) — naming Pinnacle Trust Company, N.A. as Security Trustee (London branch) as loss payee.
3. Standard Mortgagee Clause Endorsement — Policy No. CPV-2024-IHDC-003 (Commercial Property, Virginia Campus) — naming Pinnacle Trust Company, N.A. as Collateral Agent as loss payee / mortgagee.
4. Standard Mortgagee Clause Endorsement (Hypothekengläubigerklausel) — Policy No. CPF-2024-IHDC-004 (Commercial Property, Frankfurt Campus) — naming Pinnacle Trust Company, N.A. as Security Trustee (London branch) as loss payee.
5. Loss Payee Endorsement — Policy No. BIV-2024-IHDC-007 (Business Interruption, Virginia Campus) — naming Pinnacle Trust Company, N.A. as Collateral Agent as loss payee.
6. Loss Payee Endorsement — Policy No. BIF-2024-IHDC-008 (Business Interruption, Frankfurt Campus) — naming Pinnacle Trust Company, N.A. as Security Trustee (London branch) as loss payee.
B. Additional Insured Endorsements
7. Additional Insured Endorsement — Policy No. CGL-2024-IHDC-005 (Commercial General Liability) — naming Pinnacle Trust Company, N.A. as Collateral Agent / Security Trustee and Crescent Harbor Bank, N.A. as Administrative Agent as additional insureds.
8. Additional Insured Endorsement — Policy No. UMB-2024-IHDC-006 (Umbrella / Excess Liability) — naming Pinnacle Trust Company, N.A. as Collateral Agent / Security Trustee and Crescent Harbor Bank, N.A. as Administrative Agent as additional insureds.
C. Waiver of Subrogation Endorsements
9. Waiver of Subrogation Endorsement — Policy No. BRV-2024-IHDC-001 (Builder's Risk, Virginia Campus) — waiving subrogation rights against the Administrative Agent, Collateral Agent, and Lenders.
10. Waiver of Subrogation Endorsement — Policy No. BRF-2024-IHDC-002 (Builder's Risk, Frankfurt Campus) — waiving subrogation rights against the Administrative Agent, Collateral Agent / Security Trustee, and Lenders.
11. Waiver of Subrogation Endorsement — Policy No. CPV-2024-IHDC-003 (Commercial Property, Virginia Campus) — waiving subrogation rights against the Administrative Agent, Collateral Agent, and Lenders.
12. Waiver of Subrogation Endorsement — Policy No. CPF-2024-IHDC-004 (Commercial Property, Frankfurt Campus) — waiving subrogation rights against the Administrative Agent, Collateral Agent / Security Trustee, and Lenders.
13. Waiver of Subrogation Endorsement — Policy No. BIV-2024-IHDC-007 (Business Interruption, Virginia Campus) — waiving subrogation rights against the Administrative Agent, Collateral Agent, and Lenders.
14. Waiver of Subrogation Endorsement — Policy No. BIF-2024-IHDC-008 (Business Interruption, Frankfurt Campus) — waiving subrogation rights against the Administrative Agent, Collateral Agent / Security Trustee, and Lenders.
D. Primary and Non-Contributory Endorsements
15. Primary and Non-Contributory Endorsement — Policy No. CGL-2024-IHDC-005 (Commercial General Liability) — providing that coverage for additional insureds is primary and non-contributory with respect to any other insurance maintained by or available to such additional insureds.
16. Primary and Non-Contributory Endorsement — Policy No. UMB-2024-IHDC-006 (Umbrella / Excess Liability) — providing that coverage for additional insureds is primary and non-contributory with respect to any other insurance maintained by or available to such additional insureds.
E. Notice of Cancellation Endorsements
17. 30-Day Notice of Cancellation Endorsement — Policy No. BRV-2024-IHDC-001 (Builder's Risk, Virginia Campus) — requiring 30 days' prior written notice to the Collateral Agent before cancellation or material modification (10 days for non-payment of premiums).
18. 30-Day Notice of Cancellation Endorsement — Policy No. BRF-2024-IHDC-002 (Builder's Risk, Frankfurt Campus) — requiring 30 days' prior written notice to the Security Trustee (London branch) before cancellation or material modification (10 days for non-payment of premiums).
19. 30-Day Notice of Cancellation Endorsement — Policy No. CPV-2024-IHDC-003 (Commercial Property, Virginia Campus) — requiring 30 days' prior written notice to the Collateral Agent before cancellation or material modification (10 days for non-payment of premiums).
20. 30-Day Notice of Cancellation Endorsement — Policy No. CPF-2024-IHDC-004 (Commercial Property, Frankfurt Campus) — requiring 30 days' prior written notice to the Security Trustee (London branch) before cancellation or material modification (10 days for non-payment of premiums).