ESCROW FUNDING CONFIRMATION
July 9, 2024
CONFIDENTIAL — ATTORNEY WORK PRODUCT
Re: Escrow Deposit in Connection with the Agreement and Plan of Merger, dated January 22, 2024, among Cloudium Technologies plc, Stratos Merger Sub Inc., and Solara Digital Infrastructure Fund VI LP (the "Merger Agreement")
Matter No.: 1041-00003
Prepared by: Calderwood & Harkness LLP 599 Lexington Avenue New York, NY 10022
Prepared for: Solara Digital Infrastructure Fund VI LP 1200 Market Street, Suite 3400 Wilmington, DE 19801
I. INTRODUCTION AND PURPOSE
This Escrow Funding Confirmation (this "Confirmation") serves as the official confirmation of the wire transfer of the Escrow Amount (as such term is defined in Section 2.8 of the Merger Agreement and Article I of the Escrow Agreement, each as defined below) to Cobalt Trust Company, in its capacity as Escrow Agent, in connection with the closing (the "Closing") of the merger contemplated by the Merger Agreement. This Confirmation has been prepared by Calderwood & Harkness LLP, as counsel to Solara Digital Infrastructure Fund VI LP ("Fund VI" or the "Depositor"), for the purpose of documenting the completion of the escrow deposit and providing a comprehensive record of the wire transfer details, the Escrow Agent's acknowledgment of receipt, and certain related matters.
This Confirmation references and should be read in conjunction with the Escrow Agreement, dated January 22, 2024 (effective as of the Closing Date), among Solara Digital Infrastructure Fund VI LP, in its capacity as depositor and buyer party, Cobalt Trust Company, a New York trust company, in its capacity as escrow agent (the "Escrow Agent"), and Douglas Pemberton, in his capacity as stockholder representative (the "Stockholder Representative") (collectively, the "Escrow Agreement"). Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the Merger Agreement or the Escrow Agreement, as applicable.
This Confirmation further confirms that the escrow deposit was made on July 9, 2024 (the "Closing Date"), in accordance with Section 2.8 of the Merger Agreement and Article II of the Escrow Agreement. Pursuant to Section 2.8 of the Merger Agreement, on the Closing Date, Fund VI (through its general partner, Solara Fund VI GP LLC) was required to cause to be deposited with the Escrow Agent the Escrow Amount in immediately available funds by wire transfer to the Indemnity Escrow Account, as a condition to and contemporaneously with the consummation of the Closing. The escrow deposit described herein satisfies that obligation in full.
The Escrow Amount deposited into the Indemnity Escrow Account serves as security for the indemnification obligations of the former stockholders of Cloudium Technologies plc ("Cloudium" or the "Company") under Article IX of the Merger Agreement. The Escrow Amount constitutes the primary source of recovery available to Fund VI and its affiliated indemnified parties (the "Buyer Indemnified Parties") for Losses (as defined in Section 9.2 of the Merger Agreement) arising from breaches of representations, warranties, covenants, and agreements of the Company and the former stockholders of Cloudium, subject to the terms, conditions, limitations, and procedures set forth in Article IX of the Merger Agreement and the Escrow Agreement.
II. WIRE TRANSFER DETAILS
A. Sending Party Information
The wire transfer of the Escrow Amount was initiated by and on behalf of the following sending party:
For the avoidance of doubt, Meridian Atlantic Bank, N.A. acted solely in its capacity as the depository institution from which the equity contribution was funded in connection with the wire transfer described herein, and not in its capacity as Administrative Agent under that certain Credit Agreement, dated as of July 9, 2024, among Stratos Merger Sub Inc. (as successor-by-merger to Cloudium Technologies plc), the lenders party thereto from time to time, and Meridian Atlantic Bank, N.A., as Administrative Agent and Collateral Agent (the "Credit Agreement"). The funding of the Escrow Amount was sourced entirely from the equity contribution made by Fund VI and did not constitute a borrowing under the Credit Agreement or any other debt facility.
B. Receiving Party Information (Escrow Agent)
The wire transfer of the Escrow Amount was directed to the following receiving party:
The escrow account designation referenced above is substantially consistent with the account naming conventions specified in Section 2.1 of the Escrow Agreement. Cobalt Trust Company has confirmed that the Indemnity Escrow Account was established and made available to receive the Escrow Amount prior to the initiation of the wire transfer on the Closing Date.
C. Wire Transfer Amount and Details
The following sets forth the specific details of the wire transfer of the Escrow Amount:
The Escrow Amount of $544,000,000.00 represents eight percent (8%) of the total enterprise value of the transaction of $6,800,000,000.00 (Six Billion Eight Hundred Million Dollars), as agreed upon by the parties to the Merger Agreement and reflected in Section 2.8 thereof. The wire transfer was initiated and completed via the Federal Reserve's Fedwire Funds Service, and the funds were received by Cobalt Trust Company in immediately available funds on the date and at the time specified above.
III. CONFIRMATION FROM COBALT TRUST COMPANY
A. Acknowledgment of Receipt
Cobalt Trust Company hereby provides written confirmation acknowledging receipt of the wire transfer of Five Hundred Forty-Four Million Dollars ($544,000,000.00) into the designated Indemnity Escrow Account (Account No. 4827-3391-0056) in connection with the Merger Agreement and the Escrow Agreement.
The funds were credited to the Indemnity Escrow Account at 10:12 AM ET on July 9, 2024. Cobalt Trust Company confirms that the Escrow Amount was received in immediately available funds via the Fedwire Funds Service, Federal Reference Number (IMAD) 20240709MMQFMP0B004823, and that such funds are freely available for investment and administration in accordance with the terms of the Escrow Agreement.
Cobalt Trust Company further confirms that it will hold and administer the Escrow Amount in accordance with, and subject to, the terms and conditions of the Escrow Agreement, dated January 22, 2024, among Solara Digital Infrastructure Fund VI LP, Cobalt Trust Company, and Douglas Pemberton, as Stockholder Representative. Cobalt Trust Company shall not disburse, release, or otherwise dispose of any portion of the Escrow Amount except in strict compliance with the provisions of the Escrow Agreement, including the joint written instruction requirements and the release schedule set forth therein.
B. Escrow Account Confirmation Details
The following confirms the status of the Indemnity Escrow Account as of the completion of the wire transfer:
Cobalt Trust Company confirms that, as of 10:12 AM ET on July 9, 2024, the balance in the Indemnity Escrow Account is Five Hundred Forty-Four Million Dollars ($544,000,000.00), representing the full Escrow Amount required under Section 2.8 of the Merger Agreement.
The Escrow Amount will be invested in accordance with the investment instructions set forth in Section 3.2 of the Escrow Agreement. As specified therein, the Escrow Agent shall invest and reinvest the Escrow Amount, at the written direction of Fund VI (with notice to the Stockholder Representative), in one or more of the following Permitted Investments: (i) direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America, in each case maturing within ninety (90) days of the date of acquisition thereof; (ii) money market funds rated at least AAAm by S&P Global Ratings or Aaa-mf by Moody's Investors Service that invest primarily in obligations described in clause (i); or (iii) such other investments as Fund VI and the Stockholder Representative may jointly direct in writing. Pending receipt of investment instructions, the Escrow Amount shall be held in the Cobalt Trust Company DDA Sweep Account, which invests in overnight repurchase agreements collateralized by U.S. Treasury obligations. All investment income earned on the Escrow Amount shall be credited to the Indemnity Escrow Account and shall be treated as part of the Escrow Amount for all purposes under the Escrow Agreement.
C. Reference to Escrow Agreement Terms
Cobalt Trust Company confirms that it will administer the Escrow Amount subject to the terms and conditions of the Escrow Agreement. Without limiting the foregoing, and for purposes of this Confirmation, Cobalt Trust Company acknowledges the following material terms governing the administration and release of the Escrow Amount:
Joint Written Instructions. No portion of the Escrow Amount (including any investment income thereon) shall be released from the Indemnity Escrow Account unless and until Cobalt Trust Company receives joint written instructions executed by both (a) an authorized representative of Fund VI and (b) the Stockholder Representative (Douglas Pemberton), or, alternatively, a final non-appealable order of a court of competent jurisdiction directing such release, in each case in accordance with Article IV of the Escrow Agreement.
Escrow Release Schedule. The Escrow Agreement provides for the following scheduled releases of the Escrow Amount:
First Release (12 Months Post-Closing). On July 9, 2025 (the "First Release Date"), fifty percent (50%) of the original Escrow Amount, equal to Two Hundred Seventy-Two Million Dollars ($272,000,000.00), shall be released from the Indemnity Escrow Account and distributed to the Paying Agent for further distribution to the former stockholders of Cloudium entitled thereto; provided, however, that the amount released on the First Release Date shall be reduced by the aggregate amount of all pending indemnification claims that have been properly noticed by Fund VI pursuant to Article IX of the Merger Agreement and Section 4.2 of the Escrow Agreement and that remain unresolved as of the First Release Date (such amount, the "First Release Holdback Amount"). The First Release Holdback Amount, if any, shall continue to be held in the Indemnity Escrow Account until the underlying claims are resolved in accordance with the dispute resolution procedures set forth in the Merger Agreement and the Escrow Agreement.
Second Release (18 Months Post-Closing). On January 9, 2026 (the "Second Release Date" and, together with the First Release Date, the "Scheduled Release Dates"), the entire remaining balance of the Escrow Amount (including any First Release Holdback Amount that has been released from pending claims, and any investment income earned thereon) shall be released from the Indemnity Escrow Account and distributed to the Paying Agent for further distribution to the former stockholders of Cloudium entitled thereto; provided, however, that the amount released on the Second Release Date shall be reduced by the aggregate amount of all pending indemnification claims that have been properly noticed by Fund VI pursuant to Article IX of the Merger Agreement and Section 4.2 of the Escrow Agreement and that remain unresolved as of the Second Release Date (such amount, the "Second Release Holdback Amount"). The Second Release Holdback Amount, if any, shall continue to be held in the Indemnity Escrow Account until the underlying claims are resolved.
Survival Period. The survival period for indemnification claims under Article IX of the Merger Agreement expires on January 9, 2026, which is eighteen (18) months following the Closing Date. Any indemnification claim properly noticed prior to the expiration of the survival period shall survive until final resolution, and the Escrow Agent shall reserve against the Escrow Amount with respect to such claim until it is resolved, regardless of whether the survival period has expired.
Claim Reservation. Claims that have been properly noticed by Fund VI in accordance with Section 9.4 of the Merger Agreement and Section 4.2 of the Escrow Agreement prior to the applicable Scheduled Release Date shall be reserved against and shall not be released on such Scheduled Release Date. The reserved amount with respect to each pending claim shall be equal to the estimated amount of Losses set forth in the applicable claim notice, unless a lesser amount is agreed to by Fund VI and the Stockholder Representative or determined by a court of competent jurisdiction. Upon resolution of a pending claim (whether by mutual agreement of Fund VI and the Stockholder Representative, arbitration, or final court order), the Escrow Agent shall distribute the applicable portion of the Escrow Amount in accordance with the joint written instructions or court order reflecting such resolution.
Cobalt Trust Company further acknowledges its role as Escrow Agent under the Escrow Agreement and as Paying Agent under Section 2.7 of the Merger Agreement, and confirms that it will discharge its duties under each such agreement in accordance with the terms thereof and applicable law.
D. Authorized Signatory of Cobalt Trust Company
The acknowledgment and confirmations set forth in this Section III are provided by the undersigned authorized signatory of Cobalt Trust Company:
COBALT TRUST COMPANY, as Escrow Agent
By: ________
Name: Laura Ng
Title: Vice President, Escrow Services
Date: July 9, 2024
IV. RECONCILIATION TO FUNDS FLOW
This Section IV provides a reconciliation of the Escrow Amount to the overall funds flow for the Closing, as set forth in the Final Funds Flow Memorandum dated July 8, 2024, prepared by Calderwood & Harkness LLP in coordination with counsel to the Company and the lending institutions (the "Funds Flow Memo"). The Funds Flow Memo was circulated to and approved by all relevant parties prior to the Closing Date and constitutes the definitive allocation of all payments to be made at or in connection with the Closing.
Total Funding Requirement. The total funding requirement for the Closing, as set forth in the Funds Flow Memo, is $7,188,944,048.00, comprised of the following components:
Sources of Funds. The total funding requirement was satisfied from the following sources:
Treatment of the Escrow Amount. The Escrow Amount of $544,000,000.00 was withheld from the aggregate merger consideration otherwise distributable to the non-rolling stockholders of Cloudium and was deposited directly into the Indemnity Escrow Account maintained by Cobalt Trust Company, as provided in Section 2.8 of the Merger Agreement. Accordingly, the Escrow Amount is included within the cash merger consideration line item of $6,183,944,048.00 set forth above; it was not separately funded but rather was carved out from the total cash merger consideration payable at Closing and redirected to the Indemnity Escrow Account in lieu of being distributed to the former stockholders. The net cash merger consideration actually distributed to the non-rolling stockholders at Closing (exclusive of the Escrow Amount) was $5,639,944,048.00.
The reconciliation set forth above is consistent with, and should be read in conjunction with, the Funds Flow Memo. Any discrepancies between this Confirmation and the Funds Flow Memo shall be resolved by reference to the Funds Flow Memo, which constitutes the controlling document with respect to the allocation and sequencing of Closing payments.
V. INTERPLAY WITH INDEMNIFICATION AND REPRESENTATION & WARRANTY INSURANCE
The Escrow Amount of $544,000,000.00 (representing 8% of the total enterprise value of $6,800,000,000.00) serves as the primary, first-dollar source of indemnification recourse available to the Buyer Indemnified Parties under Article IX of the Merger Agreement. The following summarizes certain key indemnification parameters and the interplay between the Escrow Amount and the representation and warranty insurance policy obtained by Fund VI in connection with the transaction:
General Indemnification Cap. The aggregate liability of the former stockholders of Cloudium for indemnification claims under Article IX of the Merger Agreement (other than claims arising from Special Indemnity Matters, as defined below) is subject to a cap of fifteen percent (15%) of the total enterprise value, equal to $1,020,000,000.00 (the "General Cap").
Indemnity Basket (Tipping Basket). The Buyer Indemnified Parties are not entitled to recover for Losses under Article IX of the Merger Agreement unless and until the aggregate amount of all Losses exceeds $51,000,000.00 (representing 0.75% of the total enterprise value), at which point the Buyer Indemnified Parties shall be entitled to recover all Losses from the first dollar (i.e., the basket is a "tipping" basket, not a true deductible). Individual claims in an amount less than $500,000.00 (the "De Minimis Threshold") shall not count toward the basket or otherwise be recoverable under Article IX.
Representation and Warranty Insurance. In connection with the Closing, Fund VI obtained a buyer-side representation and warranty insurance policy issued by Northfield Assurance Ltd. (Policy No. NFA-TRI-2024-00487, effective July 9, 2024) (the "R&W Insurance Policy"). The R&W Insurance Policy provides the following coverage:
• Total Coverage Amount: $680,000,000.00 in excess of the retention amount.
• Retention Amount: The retention under the R&W Insurance Policy is equal to the Escrow Amount of $544,000,000.00 (the "Retention"). The Retention serves as the self-insured layer that must be exhausted (or, in the case of the reduced retention described below, must be exceeded) before the R&W Insurance Policy responds to covered Losses.
• Retention Step-Down: The Retention drops down from $544,000,000.00 to $272,000,000.00 at the twelve (12)-month anniversary of the Closing Date (July 9, 2025), provided that, as of such date, there are no pending or threatened claims under the R&W Insurance Policy or under Article IX of the Merger Agreement.
• Policy Period: The R&W Insurance Policy is effective as of the Closing Date and remains in effect for a period of six (6) years from the Closing Date with respect to fundamental representations and three (3) years from the Closing Date with respect to all other representations, in each case subject to the specific terms and conditions of the R&W Insurance Policy.
Special Indemnity Matters. Certain indemnification obligations of the former stockholders are not subject to the General Cap, the basket, or the De Minimis Threshold. These "Special Indemnity Matters" include, without limitation: (a) claims arising from fraud or intentional misrepresentation; (b) claims arising from willful breach of any covenant or agreement contained in the Merger Agreement; (c) indemnification obligations with respect to taxes (including pre-closing tax liabilities, transfer taxes, and tax-related representations and covenants); and (d) certain specified litigation matters identified on Section 9.2(c) of the Disclosure Schedules to the Merger Agreement. Special Indemnity Matters are uncapped and may be recovered from the Escrow Amount, the R&W Insurance Policy (to the extent covered thereby), and/or directly from the former stockholders, as applicable.
The foregoing summary is provided for informational and cross-reference purposes only and is qualified in its entirety by the terms of the Merger Agreement, the Escrow Agreement, and the R&W Insurance Policy.
VI. RELATED CLOSING DOCUMENTS CROSS-REFERENCED
For purposes of providing a complete record of the Closing documentation relevant to the escrow deposit and the indemnification framework, the following documents are cross-referenced herein and should be consulted in connection with the administration of the Indemnity Escrow Account:
1. Merger Agreement — Execution Version, dated January 22, 2024, among Cloudium Technologies plc, Stratos Merger Sub Inc., and Solara Digital Infrastructure Fund VI LP (see in particular Section 2.8 — Escrow Deposit; Article IX — Indemnification).
2. Escrow Agreement — Execution Version, dated January 22, 2024 (effective as of the Closing Date, July 9, 2024), among Solara Digital Infrastructure Fund VI LP, Cobalt Trust Company, and Douglas Pemberton, as Stockholder Representative.
3. Stockholder Representative Agreement — Execution Version, dated January 22, 2024, by and among Douglas Pemberton and the stockholders of Cloudium Technologies plc signatory thereto (appointing Douglas Pemberton as Stockholder Representative with full power and authority to act on behalf of the former stockholders in connection with the Escrow Agreement and Article IX of the Merger Agreement).
4. Certificate of Merger, filed with the Secretary of State of the State of Delaware at 11:59 PM ET on July 9, 2024, evidencing the completion of the merger of Stratos Merger Sub Inc. with and into Cloudium Technologies plc, with Cloudium Technologies plc continuing as the surviving entity.
5. Final Funds Flow Memorandum, dated July 8, 2024, prepared by Calderwood & Harkness LLP, setting forth the detailed allocation and sequencing of all payments to be made at or in connection with the Closing.
6. R&W Insurance No-Claims Declaration, dated July 9, 2024, executed by Fund VI and delivered to Northfield Assurance Ltd. in connection with the binding of the R&W Insurance Policy.
7. R&W Insurance Final Policy (Northfield Assurance Ltd., Policy No. NFA-TRI-2024-00487, effective July 9, 2024), providing $680,000,000.00 in buyer-side representation and warranty insurance coverage in excess of the retention amount.
Copies of each of the foregoing documents are maintained in the closing binder for this transaction, which is on file with Calderwood & Harkness LLP (Matter No. 1041-00003) and available upon request.
VII. NOTICES AND CONTACT INFORMATION
All notices, requests, demands, claims, and other communications required or permitted to be delivered in connection with the Escrow Agreement and the matters described in this Confirmation shall be given in accordance with the notice provisions of Section 7.1 of the Escrow Agreement, which are summarized below for convenience:
For Fund VI (Depositor):
Solara Digital Infrastructure Fund VI LP c/o Solara Digital Infrastructure LP 1200 Market Street, Suite 3400 Wilmington, DE 19801
Attention: Marcus Elliston, Managing Partner; Priya Narasimhan, Co-Managing Partner & Chief Investment Officer
Telephone: (302) 555-7400
Email: melliston@solarainfra.com; pnarasimhan@solarainfra.com
with a copy (which shall not constitute notice) to:
Calderwood & Harkness LLP 599 Lexington Avenue New York, NY 10022
Attention: Harrison Wexford, Partner
Telephone: (212) 555-3200
Email: hwexford@calderwoodharkness.com
For Escrow Agent:
Cobalt Trust Company 100 Wall Street New York, NY 10005
Attention: Laura Ng, Vice President, Escrow Services
Telephone: (212) 555-8100
Email: lng@cobalttrust.com
For Stockholder Representative:
Douglas Pemberton, Stockholder Representative c/o Cloudium Technologies plc Address on file with the Escrow Agent Telephone: On file
Email: On file
All notices shall be in writing and shall be deemed given (a) when delivered by hand, (b) when sent by confirmed facsimile, (c) three (3) business days after being sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) business day after being sent by nationally recognized overnight courier service, in each case addressed to the party at the address set forth above (or at such other address as such party may designate by notice to the other parties in accordance with this section).
VIII. SIGNATURE / CONFIRMATION Block
By executing this Escrow Funding Confirmation below, each of the undersigned confirms the accuracy and completeness of the information set forth herein and acknowledges the receipt, deposit, and administration of the Escrow Amount in accordance with the terms of the Merger Agreement and the Escrow Agreement.
Acknowledgment by Solara Digital Infrastructure Fund VI LP
SOLARA DIGITAL INFRASTRUCTURE FUND VI LP
By: Solara Fund VI GP LLC, its General Partner
By: ________
Name: Marcus Elliston
Title: Managing Partner
Date: July 9, 2024
Acknowledgment by Cobalt Trust Company
COBALT TRUST COMPANY, as Escrow Agent
By: ________
Name: Laura Ng
Title: Vice President, Escrow Services
Date: July 9, 2024
Prepared / Reviewed by Calderwood & Harkness LLP
CALDERWOOD & HARKNESS LLP
By: ________
Name: Tiffany Rosenthal
Title: Lead Associate, Mergers & Acquisitions
Matter No.: 1041-00003
Date: July 9, 2024
APPENDIX A
Wire Transfer Confirmation Receipt (Sending Bank)
The following constitutes a reproduction of the wire transfer confirmation receipt issued by Meridian Atlantic Bank, N.A. in connection with the transfer of the Escrow Amount on July 9, 2024. The original receipt is maintained in the closing binder on file with Calderwood & Harkness LLP (Matter No. 1041-00003).
MERIDIAN ATLANTIC BANK, N.A. WIRE TRANSFER CONFIRMATION 383 Madison Avenue, New York, NY 10179
This wire transfer confirmation is issued by Meridian Atlantic Bank, N.A. for informational purposes. This confirmation is subject to the terms and conditions governing the originator's account and Meridian Atlantic Bank, N.A.'s wire transfer services agreement. Meridian Atlantic Bank, N.A. assumes no liability for errors in transmission or processing by intermediary or receiving financial institutions. For questions regarding this transfer, please contact your designated relationship manager.
APPENDIX B
Cobalt Trust Company Receipt Confirmation Letter
The following constitutes a reproduction of the formal receipt confirmation letter issued by Cobalt Trust Company on its letterhead in connection with the receipt of the Escrow Amount on July 9, 2024. The original letter is maintained in the closing binder on file with Calderwood & Harkness LLP (Matter No. 1041-00003).
COBALT TRUST COMPANY 100 Wall Street New York, NY 10005
July 9, 2024
Solara Digital Infrastructure Fund VI LP c/o Solara Digital Infrastructure LP 1200 Market Street, Suite 3400 Wilmington, DE 19801
Attention: Marcus Elliston, Managing Partner
Douglas Pemberton Stockholder Representative c/o Cloudium Technologies plc Address on file
Calderwood & Harkness LLP 599 Lexington Avenue New York, NY 10022
Attention: Harrison Wexford, Partner
Re: Receipt of Escrow Deposit — Cloudium Technologies plc Indemnity Escrow Account (Account No. 4827-3391-0056)
Ladies and Gentlemen:
Reference is made to the Escrow Agreement, dated as of January 22, 2024 (effective as of July 9, 2024, the "Closing Date"), among Solara Digital Infrastructure Fund VI LP ("Fund VI"), Cobalt Trust Company ("Cobalt Trust" or the "Escrow Agent"), and Douglas Pemberton, as Stockholder Representative (the "Escrow Agreement"). Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Escrow Agreement.
Cobalt Trust Company hereby confirms receipt of a wire transfer in the amount of Five Hundred Forty-Four Million Dollars ($544,000,000.00) (the "Escrow Amount") into the Indemnity Escrow Account designated as "Cloudium Technologies plc — Indemnity Escrow Account" (Account No. 4827-3391-0056) on July 9, 2024, at 10:12 AM ET (the "Deposit Time"). The Escrow Amount was received via the Fedwire Funds Service (Federal Reference Number / IMAD: 20240709MMQFMP0B004823) in immediately available funds.
As of the Deposit Time, the balance in the Indemnity Escrow Account is $544,000,000.00, representing the full Escrow Amount required to be deposited pursuant to Section 2.8 of the Agreement and Plan of Merger, dated January 22, 2024, among Cloudium Technologies plc, Stratos Merger Sub Inc., and Fund VI (the "Merger Agreement") and Article II of the Escrow Agreement.
Cobalt Trust Company confirms that the Escrow Amount has been deposited into the Indemnity Escrow Account and will be held, invested, and administered by Cobalt Trust Company in its capacity as Escrow Agent, in strict accordance with the terms and conditions of the Escrow Agreement. Without limiting the generality of the foregoing, Cobalt Trust Company confirms the following:
(a) The Escrow Amount will be invested in accordance with the investment instructions set forth in Section 3.2 of the Escrow Agreement, as directed in writing by Fund VI (with notice to the Stockholder Representative), in Permitted Investments as defined therein.
(b) No portion of the Escrow Amount will be released from the Indemnity Escrow Account except upon receipt of joint written instructions from Fund VI and the Stockholder Representative, or a final non-appealable order of a court of competent jurisdiction, in each case in accordance with the terms of the Escrow Agreement.
(c) Cobalt Trust Company acknowledges and will comply with the Escrow Release Schedule set forth in Section 4.1 of the Escrow Agreement, including the First Release on July 9, 2025 and the Second Release on January 9, 2026, subject in each case to any holdback amounts in respect of pending indemnification claims.
(d) Cobalt Trust Company acknowledges its role as Escrow Agent under the Escrow Agreement and as Paying Agent under Section 2.7 of the Merger Agreement.
This letter is being delivered to each of the addressees listed above for their records in connection with the Closing. Please do not hesitate to contact the undersigned with any questions regarding the Indemnity Escrow Account or the matters described herein.
Very truly yours,
COBALT TRUST COMPANY
By: ________
Name: Laura Ng
Title: Vice President, Escrow Services
Telephone: (212) 555-8100
Email: lng@cobalttrust.com
Date: July 9, 2024
CONFIDENTIAL. This Escrow Funding Confirmation and its appendices contain confidential and proprietary information of Solara Digital Infrastructure Fund VI LP and its affiliates. This document is intended solely for the use of the parties identified herein and their respective legal counsel. Any unauthorized use, disclosure, distribution, or reproduction of this document or any portion thereof is strictly prohibited. This document is subject to the attorney-client privilege and the work product doctrine to the fullest extent applicable.
Calderwood & Harkness LLP — Matter No. 1041-00003
| Field | Detail |
| Sending Entity | Solara Digital Infrastructure Fund VI LP |
| EIN | 87-4523190 |
| General Partner | Solara Fund VI GP LLC |
| Address | 1200 Market Street, Suite 3400, Wilmington, DE 19801 |
| Sending Bank | Meridian Atlantic Bank, N.A. |
| Bank Address | 383 Madison Avenue, New York, NY 10179 |
| Sending Account | Fund VI Operating Account |
| Field | Detail |
| Receiving Entity | Cobalt Trust Company |
| Contact | Laura Ng, Vice President, Escrow Services |
| Address | 100 Wall Street, New York, NY 10005 |
| Receiving Bank | Cobalt Trust Company, New York, NY |
| Escrow Account Name | Cloudium Technologies plc — Indemnity Escrow Account |
| Account Number | 4827-3391-0056 |
| ABA/Routing Number | 021-084-217 |
| SWIFT Code | COBTUS33 |
| Reference Line | Cloudium/Solara Indemnity Escrow — Merger Agreement dated 01/22/2024 |
| Field | Detail |
| Amount Transferred | $544,000,000.00 (Five Hundred Forty-Four Million Dollars and No Cents) |
| Percentage of Total Deal Value | 8% of $6,800,000,000 |
| Wire Initiation Date | July 9, 2024 |
| Wire Initiation Time | 9:47 AM ET |
| Wire Reference Number (Sending Bank) | FWT-2024-070924-88412 |
| Federal Reference Number (Fedwire IMAD) | 20240709MMQFMP0B004823 |
| Wire Completion / Credit Time | 10:12 AM ET, July 9, 2024 |
| Field | Detail |
| Escrow Account Name | Cloudium Technologies plc — Indemnity Escrow Account |
| Escrow Account Number | 4827-3391-0056 |
| Balance Following Deposit | $544,000,000.00 |
| Status | Funded — Immediately Available Funds |
| Use of Funds | Amount |
| Cash merger consideration to non-rolling stockholders | $6,183,944,048.00 |
| Transaction expenses (estimated) | $185,000,000.00 |
| Repayment of existing Cloudium indebtedness (Atlas Commercial Lending Corp.) | $820,000,000.00 |
| Total Uses | $7,188,944,048.00 |
| Source of Funds | Amount |
| Term Loan B (drawn at Closing from Meridian Atlantic Bank, N.A. as Administrative Agent) | $3,740,000,000.00 |
| Equity Contribution from Fund VI | $2,832,888,096.00 |
| Rollover Equity — Jonathan Hargrove (~$142,814,544) and Pinnacle Growth Ventures LLC (~$473,241,408) | $616,055,952.00 |
| Total Sources | $7,188,944,048.00 |
| Field | Detail |
| Confirmation Type | Outgoing Fedwire Funds Transfer |
| Originator | Solara Digital Infrastructure Fund VI LP |
| Originator Account | Fund VI Operating Account |
| Originator Address | 1200 Market Street, Suite 3400, Wilmington, DE 19801 |
| Beneficiary | Cobalt Trust Company — Cloudium Technologies plc Indemnity Escrow Account |
| Beneficiary Account No. | 4827-3391-0056 |
| Beneficiary Bank | Cobalt Trust Company, New York, NY |
| ABA/Routing No. | 021-084-217 |
| Amount | $544,000,000.00 |
| Currency | USD |
| Wire Reference Number | FWT-2024-070924-88412 |
| Fedwire IMAD | 20240709MMQFMP0B004823 |
| Date/Time Sent | July 9, 2024, 9:47 AM ET |
| Date/Time Accepted by Fedwire | July 9, 2024, 9:48 AM ET |
| Beneficiary Credit Time | July 9, 2024, 10:12 AM ET |
| Reference / OBI Line | Cloudium/Solara Indemnity Escrow — Merger Agreement dated 01/22/2024 |
| Status | COMPLETED |