LENDER SANCTIONS REPRESENTATIONS AND INDEMNITY SIDE LETTER
Dated as of May 15, 2024
by and between
OSPREY INSURANCE CAPITAL, LTD.
a Bermuda exempted company
and
CRESCENT HARBOR BANK, N.A.
as Administrative Agent on behalf of itself and the Secured Parties
in connection with the
SENIOR SECURED TERM LOAN B CREDIT AGREEMENT
dated as of May 15, 2024
among
IRONHAVEN DATA CENTERS LLC, as Borrower
IRONHAVEN FRANKFURT GmbH, as Co-Borrower
IRONHAVEN HOLDINGS INC., as Parent Guarantor
CRESCENT HARBOR BANK, N.A., as Administrative Agent
PINNACLE TRUST COMPANY, N.A., as Collateral Agent
and
THE LENDERS PARTY THERETO
CUSIP: 46283LAA5
Osprey Commitment Amount: $75,000,000
(representing 7.89% of the aggregate $950,000,000 facility)
LENDER SANCTIONS REPRESENTATIONS AND INDEMNITY SIDE LETTER
This Lender Sanctions Representations and Indemnity Side Letter (this "Side Letter") is entered into as of May 15, 2024, by and between:
(1) OSPREY INSURANCE CAPITAL, LTD., a Bermuda exempted company organized under the laws of Bermuda, with its registered office at Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda ("Osprey"); and
(2) CRESCENT HARBOR BANK, N.A., a national banking association organized under the laws of the United States, acting in its capacity as Administrative Agent on behalf of itself and the Secured Parties (in such capacity, the "Administrative Agent") under the Credit Agreement (as defined below).
Osprey and the Administrative Agent are each referred to herein as a "Party" and collectively as the "Parties."
RECITALS
A. Reference is 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 (the "Borrower"), Ironhaven Frankfurt GmbH, a 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 (the "Collateral Agent"), and the several banks, financial institutions, and other entities from time to time party thereto as lenders (each, a "Lender" and collectively, the "Lenders"). Osprey is a Lender under the Credit Agreement and has committed to provide a term loan commitment in the aggregate principal amount of Seventy-Five Million Dollars ($75,000,000) (the "Osprey Commitment"), representing approximately 7.89% of the aggregate Nine Hundred Fifty Million Dollar ($950,000,000) facility.
B. The Credit Agreement provides financing for the development, construction, and initial operation of two hyperscale data-center campuses: (i) a campus located in Loudoun County, Virginia, United States (the "Virginia Campus"), and (ii) a campus located in Frankfurt am Main, Federal Republic of Germany (the "Frankfurt Campus"). The Parties acknowledge that the Frankfurt Campus nexus creates EU sanctions compliance obligations for the Lenders, the Borrower, the Co-Borrower, the Administrative Agent, and the Collateral Agent, and that all parties to the Credit Agreement have a material interest in ensuring that the syndicate composition does not give rise to any violation of applicable EU sanctions or related regulatory requirements, including those administered by the German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht, "BaFin").
C. Osprey is a Bermuda exempted company organized under the laws of Bermuda, with its registered office at Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda. As a Bermuda exempted company, Osprey is subject to the regulatory oversight of the Bermuda Monetary Authority and, as Bermuda is a British Overseas Territory, is generally subject to the application of United Kingdom sanctions regimes as extended or implemented in Bermuda.
D. The Parties recognize that certain of Osprey's key personnel, including Fiona Abernathy, Head of Credit Investments, are UK persons within the meaning of the UK sanctions regime administered by the Office of Financial Sanctions Implementation ("OFSI") of His Majesty's Treasury. This UK-person nexus subjects Osprey to enhanced sanctions scrutiny under the Sanctions and Anti-Money Laundering Act 2018 (the "SAMLA"), the Sanctions (EU Exit) Regulations, and related UK statutory instruments. The involvement of UK Persons in the decision-making, management, and administration of Osprey's participation in the Credit Agreement creates jurisdictional connections that require additional representations, warranties, and covenants to protect the interests of all parties to the Credit Agreement.
E. The Administrative Agent and the Lenders have requested, and Osprey has agreed to provide, enhanced sanctions representations, warranties, covenants, and indemnities supplementing those contained in the Credit Agreement, in order to address Osprey's multi-jurisdictional sanctions exposure under: (i) United States sanctions administered by the Office of Foreign Assets Control ("OFAC") of the U.S. Department of the Treasury, including the Specially Designated Nationals and blocked Persons List (the "SDN List"), the Sectoral Sanctions Identifications List (the "SSI List"), and any applicable executive orders; (ii) European Union sanctions, including Council Regulation (EU) No 269/2014, Regulation (EU) No 833/2014, and related regulations and decisions adopted by the Council of the European Union; and (iii) United Kingdom sanctions administered by OFSI under SAMLA and related statutory instruments, including the UK Sanctions List (the "OFSI Consolidated List").
F. This Side Letter is delivered pursuant to, and forms part of, the Credit Agreement and shall constitute a "Loan Document" for all purposes under the Credit Agreement and each other Loan Document. All obligations of Osprey hereunder shall be deemed obligations of a Lender under the Credit Agreement and shall be enforceable in accordance with the terms of the Credit Agreement and the other Loan Documents, subject to the specific terms and conditions set forth herein.
G. Calderwood & Harkness LLP, as counsel to the Borrower, has conducted sanctions screening and a UK/OFSI sanctions screening analysis in connection with Osprey's participation in the syndicate. The Administrative Agent, having reviewed the results of such screening and analysis, has required the execution and delivery of this Side Letter as a condition precedent to Osprey's participation in the syndicate and the funding of Osprey's Commitment under the Credit Agreement. Blackthorn & Sundial Software has acted as counsel to the Administrative Agent in connection with the preparation and negotiation of this Side Letter.
NOW, THEREFORE, in consideration of the mutual agreements, representations, warranties, covenants, and indemnities contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
SECTION 1: DEFINITIONS
1.1 Incorporation by Reference. Unless otherwise defined in this Side Letter, all capitalized terms used herein shall have the respective meanings assigned to such terms in the Credit Agreement dated as of May 15, 2024. In the event that a term is defined both in this Side Letter and in the Credit Agreement, the definition set forth in this Side Letter shall control for purposes of this Side Letter.
1.2 Applicable Sanctions Laws. "Applicable Sanctions Laws" means, collectively:
(a) all economic or financial sanctions or trade embargoes imposed, administered, or enforced by the Office of Foreign Assets Control ("OFAC") of the U.S. Department of the Treasury, including the International Emergency Economic Powers Act (50 U.S.C. §§ 1701–1706), the Trading with the Enemy Act (50 U.S.C. App. §§ 1–44), the SDN List, the SSI List, Executive Order 13224 (Blocking property and prohibiting transactions with persons who commit, threaten to commit, or support terrorism), Executive Order 13662 (Blocking property of additional persons contributing to the situation in Ukraine), and any other executive orders or regulations administered by OFAC, including those codified at 31 C.F.R. Parts 500–599;
(b) all economic or financial sanctions or restrictive measures imposed, administered, or enforced by the European Union, including Council Regulation (EU) No 269/2014 of 17 March 2014 concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine, Regulation (EU) No 833/2014 of 31 July 2014 concerning restrictive measures in view of Russia's actions destabilising the situation in Ukraine, and any other regulations, decisions, or common positions adopted by the Council of the European Union, and any national implementing measures of EU Member States;
(c) all economic or financial sanctions or restrictive measures imposed, administered, or enforced by the United Kingdom through OFSI under the Sanctions and Anti-Money Laundering Act 2018 and related statutory instruments, including the Russia (Sanctions) (EU Exit) Regulations 2019 (S.I. 2019/855) (as amended), the Iran (Sanctions) Regulations 2023 (S.I. 2023/1314), the Syria (Sanctions) (EU Exit) Regulations 2019 (S.I. 2019/792), the Democratic People's Republic of Korea (Sanctions) (EU Exit) Regulations 2019 (S.I. 2019/411), the UK Sanctions List as published and maintained by OFSI (the "OFSI Consolidated List"), and any other UK sanctions regulations or statutory instruments; and
(d) any other sanctions regime applicable to Osprey by reason of its jurisdiction of organization (Bermuda, as a British Overseas Territory), the jurisdictions in which Osprey operates, or the jurisdictions through which funds are transmitted in connection with the Credit Agreement or any Loan Document, including any sanctions regimes extended to Bermuda by Order in Council or other instrument of the United Kingdom.
1.3 Sanctioned Person. "Sanctioned Person" means any person that is:
(a) listed on, or directly or indirectly owned or controlled (within the meaning of applicable guidance issued by OFAC, the European Commission, or OFSI, as applicable) by a person listed on, the OFAC SDN List, the OFAC SSI List, the EU Consolidated Sanctions List (as maintained by the European Commission), or the OFSI Consolidated List of Financial Sanctions Targets;
(b) located, organized, or resident in a Sanctioned Country;
(c) an agency, instrumentality, or controlled entity of the government of a Sanctioned Country; or
(d) otherwise the target of any Applicable Sanctions Laws such that dealings with such person are prohibited or restricted under any Applicable Sanctions Laws.
For the avoidance of doubt, a person shall be deemed "owned or controlled" for purposes of this definition if such person is owned 50% or more, directly or indirectly, by a Sanctioned Person, or if a Sanctioned Person otherwise has the ability to direct or cause the direction of the management or policies of such person, in each case as determined in accordance with the ownership and control principles set forth in OFAC's "Revised Guidance on Entities Owned by Persons Whose Property and Interests in Property are blocked" (August 13, 2014), or any successor guidance, and analogous EU and UK guidance.
1.4 Sanctioned Country. "Sanctioned Country" means any country or territory that is, or whose government is, the subject of comprehensive territorial sanctions under Applicable Sanctions Laws, which, as of the date of this Side Letter, includes, without limitation:
(a) Cuba;
(b) the Islamic Republic of Iran;
(c) the Democratic People's Republic of Korea (North Korea);
(d) the Syrian Arab Republic (Syria);
(e) the Crimea region of Ukraine;
(f) the so-called Donetsk People's Republic region of Ukraine; and
(g) the so-called Luhansk People's Republic region of Ukraine.
The foregoing list shall be automatically updated to reflect any additions to or removals from the list of comprehensively sanctioned countries or territories under Applicable Sanctions Laws.
1.5 UK Person. "UK Person" means any person who is: (a) a United Kingdom national (including a British citizen, a British overseas territories citizen, a British overseas citizen, a British subject, or a British National (Overseas)); (b) a body incorporated or constituted under the law of any part of the United Kingdom (including England and Wales, Scotland, and Northern Ireland); or (c) a person who is domiciled in the United Kingdom, in each case within the meaning of UK sanctions legislation, including SAMLA and the Interpretation Act 1978, and including any person falling within the definition of "United Kingdom person" as used in any UK sanctions regulations or statutory instruments.
1.6 Osprey Beneficial Owners. "Osprey Beneficial Owners" means each person who, directly or indirectly (including through any chain of ownership or control), owns twenty-five percent (25%) or more of the equity interests in, or otherwise controls, Osprey Insurance Capital, Ltd. For purposes of this definition, "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of Osprey, whether through the ownership of voting securities, by contract, or otherwise, and shall include any person who serves as a general partner, managing member, trustee, or equivalent functionary with authority over the investment decisions of Osprey.
1.7 upstream Investors. "upstream Investors" means each person holding, directly or indirectly, more than ten percent (10%) economic interest in any fund, vehicle, managed account, separate account, or other investment structure through which Osprey participates in the Credit Agreement or through which Osprey sources the funds used to fulfill its Osprey Commitment. For the avoidance of doubt, the term "Upstream Investors" includes any limited partners, investors, policy holders, cedants, or other persons providing capital to Osprey or any fund or vehicle managed by Osprey or its affiliates, to the extent such persons hold more than a ten percent (10%) economic interest in the relevant fund, vehicle, or account.
SECTION 2: ENHANCED SANCTIONS REPRESENTATIONS AND WARRANTIES
Osprey hereby makes the following representations and warranties to the Administrative Agent (on behalf of itself and the Secured Parties), each of which is material and is being relied upon by the Administrative Agent, the Collateral Agent, the Borrower, the Co-Borrower, the Parent Guarantor, and each other Lender in connection with the Credit Agreement:
2.1 OFAC Representations
(a) Neither Osprey nor any of its Osprey Beneficial Owners is a Sanctioned Person or is located, organized, or resident in a Sanctioned Country. Osprey has verified the foregoing through a review of the OFAC SDN List and the OFAC SSI List, as most recently published as of the date hereof, and through such additional diligence as Osprey has deemed appropriate in the circumstances.
(b) No upstream Investor holding more than ten percent (10%) economic interest in Osprey, or in any fund, vehicle, or account through which Osprey participates in the Credit Agreement, is a Sanctioned Person. Osprey has conducted reasonable due diligence, including name-screening and, where applicable, enhanced due diligence procedures, to confirm the accuracy of the foregoing representation.
(c) Osprey is not, directly or indirectly, owned or controlled by, or acting on behalf of or at the direction of, any person that is a Sanctioned Person under any OFAC program, including any OFAC country-based sanctions program or any OFAC list-based sanctions program. No person that is a Sanctioned Person has any direct or indirect ownership interest in Osprey, or any right to receive any distribution, dividend, or payment from Osprey, in connection with Osprey's participation in the Credit Agreement.
(d) No funds used by Osprey in connection with its $75,000,000 Osprey Commitment or any funding thereunder have been derived from, and no such funds will be used to fund, any activity or transaction with a Sanctioned Person or in a Sanctioned Country in violation of any Applicable Sanctions Laws. Without limiting the generality of the foregoing, Osprey represents that the sources of funds used to fulfill the Osprey Commitment do not include any proceeds of any transaction or dealing with any Sanctioned Person or Sanctioned Country that would be prohibited under OFAC regulations.
2.2 EU Sanctions Representations
(a) Neither Osprey nor any of its directors, officers, or Osprey Beneficial Owners is listed on the EU Consolidated Sanctions List or is otherwise the target of EU restrictive measures under Council Regulation (EU) No 269/2014, Regulation (EU) No 833/2014, or any other regulation, decision, or common position of the Council of the European Union providing for economic or financial sanctions or restrictive measures. Osprey has screened its directors, officers, and Osprey Beneficial Owners against the EU Consolidated Sanctions List as maintained by the European Commission and has confirmed that no such person appears on such list.
(b) Osprey acknowledges the Frankfurt Campus nexus of the transaction and the fact that a portion of the proceeds of the Term Loan B facility will be advanced to, or for the benefit of, the Co-Borrower (Ironhaven Frankfurt GmbH) and deployed in the Federal Republic of Germany. Osprey represents that its participation in the EUR sub-tranche (to the extent of any allocated portion of Osprey's Commitment denominated in Euros) and in the aggregate $950,000,000 facility does not violate any EU sanctions, including any sectoral sanctions applicable to the data-center, technology, or infrastructure sectors, and that no EU-sanctioned person will receive, directly or indirectly, any benefit from the funding of the Osprey Commitment.
(c) Osprey has not knowingly engaged, and will not knowingly engage, in any transaction, dealing, or activity that would cause any Loan Party (including the Borrower, the Co-Borrower, or the Parent Guarantor), the Administrative Agent, the Collateral Agent (Pinnacle Trust Company, N.A.), or any other Lender to violate any EU sanctions or restrictive measures. Osprey acknowledges that a violation of EU sanctions by any member of the syndicate could have material adverse consequences for the Frankfurt Campus, the Co-Borrower, and the other parties to the Credit Agreement, and Osprey agrees to exercise reasonable care to prevent any such violation.
2.3 UK/OFSI Sanctions Representations
(a) Osprey acknowledges that Fiona Abernathy, Head of Credit Investments, and certain other key personnel of Osprey are UK Persons within the meaning of UK sanctions legislation, and that accordingly Osprey's activities in connection with the Credit Agreement and this Side Letter are subject to UK sanctions administered by OFSI. Osprey further acknowledges that, as a Bermuda exempted company (Bermuda being a British Overseas Territory), Osprey may be subject to UK sanctions as extended or implemented in Bermuda by Order in Council or equivalent instrument, and that this dual nexus (through UK Persons and through Bermuda's status as a British Overseas Territory) requires heightened sanctions compliance.
(b) Neither Osprey nor any UK Person employed by or associated with Osprey who is involved in the management, decision-making, or administration of Osprey's $75,000,000 Osprey Commitment under the Credit Agreement is a Sanctioned Person under UK sanctions. Osprey has verified the foregoing through a review of the OFSI Consolidated List of Financial Sanctions Targets as most recently published as of the date hereof.
(c) Osprey has conducted reasonable due diligence to confirm that no upstream Investor that is a UK Person is a Sanctioned Person under UK sanctions. Such due diligence has included, at a minimum, name-screening of all UK Person upstream Investors against the OFSI Consolidated List of Financial Sanctions Targets.
(d) Osprey's participation in the Credit Agreement does not violate any UK sanctions, including, without limitation: (i) the Russia (Sanctions) (EU Exit) Regulations 2019 (S.I. 2019/855) (as amended from time to time); (ii) the Iran (Sanctions) Regulations 2023 (S.I. 2023/1314); (iii) the Syria (Sanctions) (EU Exit) Regulations 2019 (S.I. 2019/792); (iv) the Democratic People's Republic of Korea (Sanctions) (EU Exit) Regulations 2019 (S.I. 2019/411); (v) the Cuba (Sanctions) (EU Exit) Regulations 2019 (S.I. 2019/354); or (vi) any other applicable UK sanctions regulations or statutory instruments. Osprey has satisfied itself, through its own legal analysis and consultation with its legal advisors, that its participation in the Credit Agreement and the funding of the Osprey Commitment are lawful under all applicable UK sanctions.
2.4 Anti-Money Laundering Representations
(a) Osprey is in compliance in all material respects with all applicable anti-money laundering laws and regulations, including, without limitation: (i) the Bermuda Proceeds of Crime Act 1997 (as amended) and the Bermuda Anti-Terrorism (Financial and Other Measures) Act 2004; (ii) the U.S. Bank Secrecy Act (31 U.S.C. §§ 5311–5332) and its implementing regulations, including 31 C.F.R. Chapter X; (iii) the USA PATRIOT Act (Title III of Pub. L. 107-56); and (iv) the UK Proceeds of Crime Act 2002 (as amended) and the UK Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (S.I. 2017/692) (as amended).
(b) Osprey has established and maintains policies, procedures, and internal controls reasonably designed to ensure ongoing compliance with all applicable anti-money laundering laws and Applicable Sanctions Laws. Such policies and procedures include, at a minimum, customer due diligence and know-your-customer procedures, transaction monitoring, suspicious activity reporting, sanctions screening, and employee training programs. Osprey's compliance program is subject to periodic review and testing by qualified compliance personnel or external advisors.
2.5 Accuracy and Repeatability
The representations and warranties set forth in this Section 2 are made by Osprey as of the date of this Side Letter (May 15, 2024) and shall be deemed repeated, with the same force and effect as if made on each such date, (a) on the Closing Date under the Credit Agreement (June 3, 2024), (b) on each date on which any borrowing or funding occurs under the Credit Agreement with respect to Osprey's Commitment, and (c) on each date on which any payment of principal, interest, fees, or other amounts is made by the Borrower or the Co-Borrower to Osprey or for Osprey's account under the Credit Agreement. Each such repeated representation and warranty shall be deemed to be made with reference to the facts and circumstances existing as of the date of such repetition.
SECTION 3: ENHANCED SANCTIONS COVENANTS
Osprey hereby covenants and agrees as follows:
3.1 Ongoing Compliance Covenant. Osprey covenants that, for so long as any obligations under the Credit Agreement remain outstanding (including any unfunded commitments, outstanding loans, accrued and unpaid interest, fees, indemnification obligations, or other amounts owing under the Credit Agreement or any other Loan Document), Osprey shall not become a Sanctioned Person and shall not knowingly permit any Osprey Beneficial Owner or upstream Investor (holding more than ten percent (10%) economic interest) to become a Sanctioned Person. In the event that any Osprey Beneficial Owner or upstream Investor becomes a Sanctioned Person, Osprey shall take all commercially reasonable steps to divest or cause the divestiture of such person's interest in Osprey or in the relevant fund, vehicle, or account, as promptly as practicable and in any event within sixty (60) calendar days of Osprey becoming aware of such designation, to the extent permitted by Applicable Sanctions Laws.
3.2 Screening Covenant. Osprey covenants that it will maintain and implement internal sanctions screening procedures reasonably designed to ensure that Osprey's participation in the Credit Agreement does not result in a violation of any Applicable Sanctions Laws. Such screening procedures shall include, at a minimum:
(a) periodic screening of Osprey's Osprey Beneficial Owners, upstream Investors (holding more than ten percent (10%) economic interest), directors, officers, and key personnel against the OFAC SDN List and SSI List, the EU Consolidated Sanctions List, and the OFSI Consolidated List of Financial Sanctions Targets, in each case no less frequently than quarterly and within five (5) business days following any update to such lists that is publicly announced by the relevant sanctions authority;
(b) screening of any proposed transferee or assignee of Osprey's interest in the Credit Agreement against the lists identified in clause (a) above prior to any assignment, sub-participation, or other transfer; and
(c) maintenance of records documenting the results of all sanctions screening conducted pursuant to this Section 3.2, which records shall be retained for a period of not less than five (5) years following the date of such screening and shall be made available to the Administrative Agent upon reasonable request.
3.3 Notification Covenant. Osprey shall promptly (and in any event within five (5) business days) notify the Administrative Agent in writing if any of the following events occurs:
(a) Osprey or any Osprey Beneficial Owner or any relevant upstream Investor (holding more than ten percent (10%) economic interest) becomes a Sanctioned Person or becomes the subject of any investigation, inquiry, enforcement action, or proceeding by OFAC, any EU sanctions authority (including the European Commission or any competent national authority of an EU Member State), OFSI, or any other governmental authority in connection with Applicable Sanctions Laws;
(b) Osprey becomes aware of any fact or circumstance that would cause any representation or warranty set forth in Section 2 of this Side Letter to be untrue or incorrect in any material respect;
(c) there is any material change in the identity of Osprey's Osprey Beneficial Owners, including any acquisition or disposition of a twenty-five percent (25%) or greater equity interest in Osprey, or any change in the identity of the UK Persons involved in the decision-making, management, or administration of Osprey's Osprey Commitment under the Credit Agreement; or
(d) Osprey receives any communication, directive, license, or guidance from OFAC, any EU sanctions authority, OFSI, or the Bermuda Monetary Authority that relates to or could reasonably be expected to affect Osprey's ability to perform its obligations under the Credit Agreement or this Side Letter.
Any notification provided pursuant to this Section 3.3 shall include a reasonably detailed description of the relevant facts and circumstances and the steps, if any, that Osprey has taken or proposes to take in response thereto.
3.4 Cooperation Covenant. Osprey will reasonably cooperate with the Administrative Agent and Calderwood & Harkness LLP (as Borrower's counsel) in connection with any ongoing sanctions due diligence, know-your-customer ("KYC") inquiries, or anti-money laundering compliance reviews, including:
(a) providing updated beneficial ownership information, organizational documents (including any amendments to Osprey's Memorandum of Association or Bye-laws), and sanctions screening certifications upon reasonable request;
(b) making available, upon reasonable prior notice during normal business hours, Osprey's compliance personnel (including, if applicable, Osprey's Chief Compliance Officer or General Counsel) for discussions or interviews relating to Osprey's sanctions compliance program;
(c) providing copies of any material correspondence with OFAC, any EU sanctions authority, OFSI, or the Bermuda Monetary Authority relating to sanctions compliance in connection with the Credit Agreement; and
(d) responding in good faith and in a timely manner to any reasonable written inquiries from the Administrative Agent or Calderwood & Harkness LLP regarding Osprey's sanctions compliance.
Nothing in this Section 3.4 shall require Osprey to disclose information that is protected by attorney-client privilege, attorney work product protection, or any similar legal privilege, or to violate any applicable law, regulation, or contractual obligation regarding confidentiality, provided that Osprey shall use reasonable efforts to provide the requested information in a manner that does not compromise such protections.
3.5 Use of Proceeds. Osprey covenants that no portion of any proceeds received by Osprey in connection with any assignment, sub-participation, participation, or other transfer (whether voluntary or involuntary) of its interest in the Credit Agreement will be paid to, or for the direct or indirect benefit of, any Sanctioned Person, and no such assignment, sub-participation, participation, or other transfer shall be made to a Sanctioned Person or to any person who would, at the time of such transfer, be in violation of any Applicable Sanctions Laws by reason of such transfer. Osprey shall include in any assignment, sub-participation, or transfer documentation provisions requiring the assignee, sub-participant, or transferee to make representations and warranties substantially equivalent to those set forth in Section 2 of this Side Letter.
SECTION 4: INDEMNIFICATION
4.1 Scope of Indemnity. Osprey agrees to indemnify, defend, and hold harmless each of the following persons (collectively, the "Indemnified Parties"):
(a) the Administrative Agent (Crescent Harbor Bank, N.A.) and its directors, officers, employees, agents, and affiliates;
(b) the Collateral Agent (Pinnacle Trust Company, N.A.) and its directors, officers, employees, agents, and affiliates;
(c) each other Lender under the Credit Agreement, including Ridgeline National Bank, Marlowe Asset Management Meridian Capital, LLC, Atlas Peak Credit Partners, LP, NordBrücke AG, and Pacific Rim Institutional Lending Corp., and each of their respective directors, officers, employees, agents, and affiliates;
(d) the Borrower (Ironhaven Data Centers LLC) and its directors, officers, managers, employees, agents, and affiliates;
(e) the Co-Borrower (Ironhaven Frankfurt GmbH) and its Geschäftsführer, officers, employees, agents, and affiliates; and
(f) the Parent Guarantor (Ironhaven Holdings Inc.) and its directors, officers, employees, agents, and affiliates;
from and against any and all losses, claims, damages, liabilities, penalties, fines, costs, and expenses (including reasonable and documented attorneys' fees and expenses, court costs, expert witness fees, and costs of investigation) actually incurred by any Indemnified Party arising out of or relating to:
(i) any breach of any representation, warranty, or covenant made by Osprey in this Side Letter, whether or not such breach is discovered at or after the Closing Date;
(ii) any sanctions violation attributable to Osprey's participation in the Credit Agreement, including any violation of OFAC regulations, EU sanctions (including Council Regulation (EU) No 269/2014 or Regulation (EU) No 833/2014), or UK/OFSI sanctions, whether or not Osprey had knowledge of such violation at the time of its occurrence;
(iii) any investigation, inquiry, enforcement action, civil or criminal proceeding, or administrative action by OFAC, any EU sanctions authority (including the European Commission or any competent national authority of an EU Member State), OFSI, the Bermuda Monetary Authority, BaFin, or any other governmental authority relating to Osprey's sanctions compliance or anti-money laundering compliance in connection with the Credit Agreement or any Loan Document; and
(iv) any claim by a third party (including any governmental authority, regulatory body, or private litigant) arising out of or relating to Osprey's sanctions status, the sanctions status of any Osprey Beneficial Owner or upstream Investor, or any allegation that Osprey's participation in the Credit Agreement constitutes or contributed to a violation of any Applicable Sanctions Laws.
4.2 Survival. The indemnification obligations of Osprey under this Section 4 shall survive (a) the termination of this Side Letter, (b) the repayment in full of all Obligations (as defined in the Credit Agreement) under the Credit Agreement, (c) the termination of the Credit Agreement, and (d) any assignment or transfer of Osprey's Commitment or outstanding loans under the Credit Agreement, in each case for a period of six (6) years following the date of the applicable termination, repayment, or transfer, or, in the case of any claim asserted prior to the expiration of such six-year period, until such claim has been finally resolved.
4.3 Limitations. Notwithstanding anything to the contrary in this Section 4, the indemnification obligations of Osprey hereunder shall not extend to any losses, claims, damages, liabilities, penalties, fines, costs, or expenses to the extent that such losses arise solely from the gross negligence or willful misconduct of the Indemnified Party seeking indemnification, as determined by a court of competent jurisdiction in a final, non-appealable judgment or order. For the avoidance of doubt, the burden of establishing that losses arose solely from the gross negligence or willful misconduct of the Indemnified Party shall rest with Osprey.
4.4 Indemnification Procedures. The following procedures shall govern any claim for indemnification under this Section 4:
(a) Notice. The Indemnified Party seeking indemnification shall promptly (and in any event within fifteen (15) business days of becoming aware of the relevant claim, investigation, or proceeding) provide written notice to Osprey describing in reasonable detail the nature of the claim and the facts giving rise thereto (a "Claim Notice"). The failure to provide timely notice shall not relieve Osprey of its indemnification obligations hereunder except to the extent that Osprey has been materially prejudiced by such failure.
(b) Defense. Upon receipt of a Claim Notice, Osprey shall have the right, at its own expense, to participate in (but not control) the defense of any third-party claim described in the Claim Notice. The Indemnified Party shall retain control of the defense of any such claim and shall select counsel of its choosing, provided that such counsel shall be reasonably acceptable to Osprey; provided, further, that the Indemnified Party shall keep Osprey reasonably informed of the progress of such defense and shall consult with Osprey in good faith regarding any material strategic decisions.
(c) Settlement. No settlement, compromise, or consent to the entry of any judgment with respect to any third-party claim subject to indemnification under this Section 4 shall be entered into without the prior written consent of Osprey (which consent shall not be unreasonably withheld, conditioned, or delayed); provided, however, that Osprey's consent shall not be required with respect to any settlement that (i) includes a complete and unconditional release of Osprey from all liability arising from such claim, and (ii) does not impose any non-monetary obligations or restrictions on Osprey.
(d) Cooperation. Each of the Indemnified Party and Osprey shall reasonably cooperate with the other in connection with the defense, negotiation, or settlement of any claim subject to indemnification under this Section 4, including by providing access to relevant documents, records, and personnel.
SECTION 5: REMEDIES UPON SANCTIONS BREACH
5.1 Right to Require Assignment. If any representation or warranty made by Osprey in Section 2 of this Side Letter is or becomes untrue in any material respect, or if Osprey breaches any covenant set forth in Section 3 of this Side Letter and such breach is not cured within ten (10) business days following written notice thereof from the Administrative Agent (or, if such breach is not capable of cure, immediately upon the occurrence thereof), then the Administrative Agent may, at the direction of the Required Lenders (as defined in the Credit Agreement), by written notice to Osprey, require Osprey to assign all of its rights and obligations under the Credit Agreement, including its $75,000,000 Osprey Commitment and all outstanding loans, accrued interest, and other amounts owing to Osprey, to one or more Eligible Assignees (as defined in the Credit Agreement) within thirty (30) calendar days of the date of such written notice (the "Forced Assignment Period"). Any such assignment shall be made at par plus accrued and unpaid interest and fees through the date of assignment, and shall be effected in accordance with the assignment and assumption procedures set forth in the Credit Agreement, including the execution and delivery of an Assignment and Assumption Agreement in the form attached to the Credit Agreement. Osprey shall bear all costs and expenses (including reasonable attorneys' fees) incurred in connection with any such forced assignment. If Osprey fails to complete the required assignment within the Forced Assignment Period, the Administrative Agent shall have the right (but not the obligation) to arrange for such assignment on Osprey's behalf, and Osprey irrevocably authorizes and empowers the Administrative Agent to execute any documents and take any actions reasonably necessary to effectuate such assignment.
5.2 Suspension of Funding. Notwithstanding anything to the contrary in the Credit Agreement, the Administrative Agent may, upon written notice to Osprey and the Borrower, suspend Osprey's obligation to fund any portion of its unfunded Commitment under the Credit Agreement (and the Borrower's right to draw from or request any borrowing funded by Osprey's Commitment) if the Administrative Agent has reasonable grounds to believe that funding from Osprey would result in a violation of any Applicable Sanctions Laws. Any such suspension shall remain in effect until the earlier of (a) the date on which the Administrative Agent (acting in good faith and in consultation with its legal counsel) determines that the grounds for suspension no longer exist, and (b) the date on which Osprey's Commitment is assigned to an Eligible Assignee pursuant to Section 5.1 or otherwise in accordance with the Credit Agreement. During any period of suspension, Osprey shall continue to be liable for all of its other obligations under the Credit Agreement and this Side Letter, and the suspension shall not constitute a waiver by the Administrative Agent or the Lenders of any rights or remedies with respect to any Event of Default or other breach.
5.3 No Limitation on Credit Agreement Remedies. The remedies set forth in this Side Letter, including the right to require assignment under Section 5.1 and the right to suspend funding under Section 5.2, are in addition to, and not in limitation of, any and all remedies available to the Administrative Agent, the Collateral Agent, or the Lenders under the Credit Agreement and the other Loan Documents, including any default or event of default provisions triggered by sanctions violations, any rights of acceleration, any rights to exercise remedies against the collateral, and any other rights or remedies available at law or in equity. The exercise of any remedy under this Side Letter shall not preclude the simultaneous or subsequent exercise of any other remedy under the Credit Agreement or at law or in equity.
SECTION 6: KYC AND BENEFICIAL OWNERSHIP DISCLOSURE
6.1 Initial Disclosure. Osprey confirms that, on or prior to the date of this Side Letter, it has delivered to the Administrative Agent and Calderwood & Harkness LLP (as Borrower's counsel) complete know-your-customer ("KYC") documentation, including:
(a) certified true copies of Osprey's constitutional documents, including its Memorandum of Association and Bye-laws, each as currently in effect, certified by the Secretary of Osprey;
(b) a current register of directors and officers of Osprey, certified by the Secretary of Osprey as of a date not more than thirty (30) days prior to the date hereof;
(c) identification of all Osprey Beneficial Owners (i.e., each person directly or indirectly owning twenty-five percent (25%) or more of the equity interests in Osprey), including the full legal name, jurisdiction of organization or nationality, and percentage of ownership of each such person;
(d) identification of all upstream Investors holding more than ten percent (10%) economic interest in any fund, vehicle, or account through which Osprey participates in the Credit Agreement, including the full legal name, jurisdiction of organization or nationality, and percentage of economic interest of each such person;
(e) copies of passports or equivalent government-issued identification documents for all natural person Osprey Beneficial Owners and all UK Persons involved in the management, decision-making, or administration of Osprey's participation in the Credit Agreement, in each case to the extent required by applicable KYC regulations and not prohibited by applicable privacy or data protection laws; and
(f) evidence of Osprey's regulatory status in Bermuda, including a certificate of compliance or equivalent document issued by the Bermuda Monetary Authority or the Bermuda Registrar of Companies, dated not more than thirty (30) days prior to the date hereof, confirming that Osprey is in good standing and is authorized to carry on business in Bermuda.
6.2 Ongoing Disclosure. Osprey covenants to provide updated KYC documentation to the Administrative Agent within thirty (30) days of any material change in the information previously disclosed pursuant to Section 6.1, including any change in Osprey Beneficial Owners, any change in the identity or ownership percentage of upstream Investors holding more than ten percent (10%) economic interest, any change in Osprey's directors or officers, any amendment to Osprey's constitutional documents, or any change in Osprey's regulatory status in Bermuda. In addition, and regardless of whether any material change has occurred, Osprey shall provide a comprehensive update of all KYC documentation described in Section 6.1 on an annual basis, on or prior to each anniversary of the Closing Date (June 3, 2024), commencing on June 3, 2025. Such annual update shall be accompanied by the Annual Sanctions Compliance Certificate in the form attached hereto as Exhibit A.
6.3 UK Person Identification. Osprey shall maintain a current and accurate list of all UK Persons who are involved in the decision-making, management, or administration of Osprey's participation in the Credit Agreement, including any UK Person who has authority to approve, authorize, or direct the funding or transfer of amounts under the Osprey Commitment. Such list shall include the name, role or title, and nationality or domicile of each such UK Person. Osprey shall provide such list to the Administrative Agent upon request and shall promptly update such list (and provide the updated list to the Administrative Agent) upon any change in the identity or status of any UK Person described therein. The initial list of UK Persons is set forth in the Osprey Beneficial Ownership and UK Person Identification Schedule attached hereto as Exhibit B.
SECTION 7: RELATIONSHIP TO CREDIT AGREEMENT
7.1 Loan Document Status. This Side Letter constitutes a "Loan Document" as defined in the Credit Agreement. All references in the Credit Agreement or any other Loan Document to the "Loan Documents" shall be deemed to include this Side Letter. Osprey's obligations under this Side Letter shall be enforceable in accordance with the terms and conditions of the Credit Agreement applicable to Loan Documents generally, including the provisions relating to governing law, jurisdiction, and enforcement.
7.2 Conflict Resolution. In the event of any conflict, inconsistency, or discrepancy between the provisions of this Side Letter and the provisions of the Credit Agreement with respect to Osprey's sanctions-related obligations, representations, warranties, covenants, or indemnities, the more restrictive provision shall govern. For purposes of this Section 7.2, a provision shall be deemed "more restrictive" if it imposes a greater obligation on Osprey, provides broader protections to the Indemnified Parties, or establishes a higher standard of compliance with Applicable Sanctions Laws.
7.3 Defined Terms. All capitalized terms used and not otherwise defined in this Side Letter shall have the respective meanings assigned to such terms in the Credit Agreement dated as of May 15, 2024. In the event that a defined term is amended or restated in the Credit Agreement after the date hereof, such amended or restated definition shall apply to this Side Letter unless the context otherwise requires or unless the use of such amended or restated definition would be inconsistent with the intent and purposes of this Side Letter.
7.4 No Amendment of Credit Agreement. This Side Letter does not amend, modify, waive, or supersede any provision of the Credit Agreement or any other Loan Document, except to the extent that this Side Letter supplements and enhances Osprey's sanctions-related representations, warranties, covenants, and indemnities as specifically set forth herein. All provisions of the Credit Agreement and the other Loan Documents remain in full force and effect, and nothing in this Side Letter shall be construed to diminish, limit, or otherwise affect the rights or obligations of any party under the Credit Agreement or any other Loan Document.
7.5 Related Agreements. Reference is made to the commitment letter dated February 28, 2024, among Crescent Harbor Bank, N.A. and the Borrower (the "Commitment Letter"), and the fee letter dated February 28, 2024, among Crescent Harbor Bank, N.A. and the Borrower (the "Fee Letter"), each in connection with the Credit Agreement. Osprey's upfront fee of 0.50% on its $75,000,000 Osprey Commitment (being $375,000, representing Osprey's pro rata share of the aggregate $4,750,000 original issue discount) shall not be affected, modified, or reduced by this Side Letter, and the execution and delivery of this Side Letter shall not give rise to any reduction, offset, or counterclaim with respect to such upfront fee or any other fees payable to or by Osprey under the Credit Agreement, the Commitment Letter, the Fee Letter, or any other Loan Document.
SECTION 8: MISCELLANEOUS PROVISIONS
8.1 Governing Law. This Side Letter and all claims, disputes, and controversies arising out of or relating to this Side Letter (whether in contract, tort, or otherwise) shall be governed by, and construed in accordance with, the laws of the State of New York, without regard to conflicts of laws principles that would result in the application of the laws of any other jurisdiction; provided, however, that the foregoing governing law provision shall not affect the determination of the applicability of any Applicable Sanctions Laws to Osprey, which shall be determined by reference to the sanctions regime of each relevant jurisdiction as described in Section 1.2 hereof.
8.2 Jurisdiction. Each Party irrevocably and unconditionally submits to the exclusive jurisdiction of (a) the courts of the State of New York sitting in the Borough of Manhattan, City of New York, and (b) the United States District Court for the Southern District of New York, for the purpose of any suit, action, or proceeding arising out of or relating to this Side Letter. Each Party irrevocably waives, to the fullest extent permitted by applicable law, any objection that it may now or hereafter have to the laying of venue in any such court, and any claim that any such suit, action, or proceeding has been brought in an inconvenient forum. Each Party agrees that a final judgment in any such suit, action, or proceeding shall be conclusive and may be enforced in any other jurisdiction by suit on the judgment or in any other manner provided by law. Osprey irrevocably designates and appoints Ashgrove Services Inc., 28 Liberty Street, New York, NY 10005, as its agent for service of process in any suit, action, or proceeding arising out of or relating to this Side Letter and agrees that service of process upon such agent shall constitute valid and effective service of process upon Osprey.
8.3 Waiver of Jury Trial. EACH PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO A TRIAL BY JURY IN ANY SUIT, ACTION, OR PROCEEDING ARISING OUT OF OR RELATING TO THIS SIDE LETTER OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT, OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (B) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) EACH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS SIDE LETTER BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 8.3.
8.4 Notices. All notices, requests, demands, consents, and other communications required or permitted to be given under this Side Letter shall be in writing and shall be deemed to have been duly given if (a) delivered personally, (b) sent by certified or registered mail, postage prepaid, return receipt requested, (c) sent by nationally recognized overnight courier service, or (d) sent by electronic mail (with confirmation of receipt), addressed as follows:
If to Osprey:
Osprey Insurance Capital, Ltd. Clarendon House 2 Church Street Hamilton HM 11, Bermuda
Attention: Fiona Abernathy, Head of Credit Investments
Email: f.abernathy@ospreyinsurancecapital.bm
If to the Administrative Agent:
Crescent Harbor Bank, N.A. 1200 Harbor Point Drive Charlotte, NC 28202
Attention: Martin Gallagher, Managing Director, Leveraged & Structured Finance
Email: martin.gallagher@crescentharbor.com
with a copy to:
Crescent Harbor Bank, N.A. 1200 Harbor Point Drive Charlotte, NC 28202
Attention: Thomas Beckett, Vice President, Loan Operations & Agency Services
Email: thomas.beckett@crescentharbor.com
with a copy to Borrower's Counsel:
Calderwood & Harkness LLP 125 Broad Street New York, NY 10004
Attention: Stephanie Okafor
Email: sokafor@calderwoodharkness.com
with a copy to Agent's Counsel:
Blackthorn & Sundial Software 51 West 52nd Street New York, NY 10019
Attention: Catherine Ellsworth
Email: cellsworth@blackthornsage.com
Any Party may change its address for purposes of this Section 8.4 by giving notice of such change to the other Parties in accordance with this Section 8.4. Notices delivered personally or by overnight courier shall be deemed given upon receipt. Notices sent by certified or registered mail shall be deemed given on the fifth (5th) business day after mailing. Notices sent by electronic mail shall be deemed given upon confirmation of receipt by the recipient.
8.5 Counterparts. This Side Letter may be executed in one or more counterparts, each of which shall be deemed an original and all of which, taken together, shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page of this Side Letter by facsimile or by electronic transmission (including in PDF, JPEG, or other electronic format) shall be effective as delivery of a manually executed counterpart of this Side Letter.
8.6 Amendments. This Side Letter may not be amended, modified, supplemented, or waived except by a written instrument signed by Osprey and the Administrative Agent; provided, however, that no amendment, modification, or supplement that would impose additional obligations on the Borrower, the Co-Borrower, or the Parent Guarantor (including any expansion of the indemnification obligations in Section 4 as they relate to the Borrower, the Co-Borrower, or the Parent Guarantor) shall be effective without the prior written consent of the Borrower. Any amendment, modification, supplement, or waiver made in accordance with this Section 8.6 shall be binding on all Parties.
8.7 Successors and Assigns. This Side Letter shall be binding upon and shall inure to the benefit of the Parties and their respective successors and permitted assigns. Any assignment by Osprey of its Commitment or outstanding loans under the Credit Agreement, whether in whole or in part, shall be subject to the condition that the assignee shall execute and deliver to the Administrative Agent a sanctions side letter in form and substance substantially similar to this Side Letter, or shall assume in writing all of Osprey's obligations under this Side Letter with respect to the assigned portion of the Commitment. No assignment or transfer by Osprey of its rights or obligations under this Side Letter shall release Osprey from its obligations hereunder unless (a) the assignee or transferee has executed and delivered a sanctions side letter or assumption agreement as described in the preceding sentence, and (b) the Administrative Agent has provided its written consent to such release (such consent not to be unreasonably withheld, conditioned, or delayed).
8.8 Severability. If any provision of this Side Letter is held to be illegal, invalid, or unenforceable by a court of competent jurisdiction, the legality, validity, and enforceability of the remaining provisions of this Side Letter shall not be affected or impaired thereby. The Parties shall negotiate in good faith to replace any illegal, invalid, or unenforceable provision with a legal, valid, and enforceable provision that, to the greatest extent possible, achieves the same economic, business, and legal objectives as the provision being replaced.
8.9 Entire Agreement. This Side Letter, together with the Credit Agreement and the other Loan Documents (including the Commitment Letter dated February 28, 2024, and the Fee Letter dated February 28, 2024), constitutes the entire agreement among the Parties with respect to the subject matter hereof and supersedes all prior agreements, understandings, negotiations, and discussions, whether oral or written, among the Parties with respect to such subject matter. There are no representations, warranties, covenants, conditions, or other agreements, express or implied, collateral, statutory, or otherwise, among the Parties with respect to the subject matter hereof, except as specifically set forth herein or in the Credit Agreement or the other Loan Documents.
IN WITNESS WHEREOF, the Parties have caused this Lender Sanctions Representations and Indemnity Side Letter to be duly executed and delivered as of the date first written above.
OSPREY INSURANCE CAPITAL, LTD. a Bermuda exempted company
By: ________
Name: Fiona Abernathy
Title: Head of Credit Investments
Date: ________
[Bermuda Exempted Company Seal Affixed]
Attested by: ________
Name: ________
Title: Secretary
CRESCENT HARBOR BANK, N.A. as Administrative Agent on behalf of itself and the Secured Parties
By: ________
Name: Martin Gallagher
Title: Managing Director, Leveraged & Structured Finance
Date: ________
ACKNOWLEDGED AND AGREED (as to Sections 4 and 7 of this Side Letter)
IRONHAVEN DATA CENTERS LLC as Borrower
By: ________
Name: Jonathan Pryce-Williams
Title: General Counsel & Secretary
Date: ________
EXHIBIT A
FORM OF ANNUAL SANCTIONS COMPLIANCE CERTIFICATE
Date: [__], 20[]
To: Crescent Harbor Bank, N.A., as Administrative Agent 1200 Harbor Point Drive Charlotte, NC 28202
Attention: Martin Gallagher, Managing Director, Leveraged & Structured Finance
Re: Annual Sanctions Compliance Certificate — Osprey Insurance Capital, Ltd. Senior Secured Term Loan B Credit Agreement dated May 15, 2024 (CUSIP: 46283LAA5) Lender Sanctions Representations and Indemnity Side Letter dated May 15, 2024