Cascade Corporate Services Inc. Exchange Agent Services Department 6201 15th Avenue Brooklyn, NY 11219
Re: Cloudium Technologies plc — Letter of Transmittal Distribution Instructions and Exchange Agent Coordination Matter No. 1041-00003
Dear Sir or Madam:
We write on behalf of our client, Solara Digital Infrastructure Fund VI LP ("Fund VI"), in connection with Fund VI's acquisition of Cloudium Technologies plc, a Delaware corporation ("Cloudium" or the "Company"). The purpose of this letter is to provide Cascade Corporate Services Inc. ("Cascade") with instructions regarding its role as transfer agent and exchange agent under that certain Agreement and Plan of Merger, dated as of January 22, 2024 (the "Merger Agreement"), by and among Cloudium Technologies plc, Stratos Merger Sub Inc., a Delaware corporation and wholly owned subsidiary of Fund VI ("Merger Sub"), and Solara Digital Infrastructure Fund VI LP. Closing of the transactions contemplated by the Merger Agreement is anticipated to occur on July 9, 2024, with the Certificate of Merger to be filed with the Secretary of State of the State of Delaware at an effective time of 11:59 PM Eastern Time on July 9, 2024 (the "Effective Time"). Distribution of the Letter of Transmittal to former stockholders of Cloudium should commence promptly following the Effective Time — specifically, on July 10, 2024, as described in detail below.
I. BACKGROUND ON THE TRANSACTION
The Merger Agreement provides for a reverse triangular merger under the Delaware General Corporation Law (the "DGCL") pursuant to which Merger Sub will merge with and into Cloudium, with Cloudium surviving the merger as a wholly owned subsidiary of Fund VI (the "Merger"). Cloudium is currently listed on the Nasdaq Global Select Market under the ticker symbol "CLDM." As of the date of signing of the Merger Agreement, there were approximately 184,200,000 shares of Cloudium common stock, par value $0.001 per share (the "Shares"), issued and outstanding.
Following the Effective Time, Cloudium common stock will be delisted from Nasdaq (a Form 25 is expected to be filed on July 10, 2024), and each outstanding Share (other than Rollover Shares (as defined below), Dissenting Shares (as defined below), and shares held in treasury or owned by Fund VI, Merger Sub, or any of their respective subsidiaries, which will be cancelled without consideration) will be converted into the right to receive $36.92 per Share in cash, without interest (the "Per Share Merger Consideration"). The total deal value of the transaction is approximately $6,800,000,000.
II. DISTRIBUTION INSTRUCTIONS FOR LETTER OF TRANSMITTAL
Cascade is hereby instructed to mail the Letter of Transmittal, in the final form attached to this letter as Exhibit D to the Merger Agreement (and enclosed herewith), to all holders of record of Shares as of immediately prior to the Effective Time. Mailing shall commence on July 10, 2024.
Each Letter of Transmittal mailing shall be accompanied by the following:
1. Instructions for surrendering stock certificates (or, in the case of book-entry shares, instructions for book-entry transfer) in exchange for the Per Share Merger Consideration of $36.92 per Share;
2. A pre-addressed return envelope addressed to Cascade Corporate Services Inc., 6201 15th Avenue, Brooklyn, NY 11219; and
3. Information regarding the exchange process, including a description of the documentation required for a valid submission, consisting of: (a) a properly completed and duly signed Letter of Transmittal; (b) stock certificates representing the Shares to be surrendered (or, in the case of book-entry shares, an agent's message), or, in the case of lost, stolen, or destroyed certificates, an affidavit of loss together with a surety bond or indemnity as described in Section V below; and (c) a properly completed IRS Form W-9 or, for non-U.S. holders, the applicable IRS Form W-8 series form.
Cascade shall use its records as registrar for Cloudium common stock to compile the distribution list for the mailing. We request that Cascade confirm the completeness and accuracy of its stockholder records prior to commencing distribution. For beneficial holders holding Shares in street name through the Depository Trust Company ("DTC"), Cascade shall coordinate with DTC for book-entry transfer procedures in the customary manner.
III. EXCHANGE AGENT MECHANICS AND PROCEDURES
Upon receipt of a properly completed and duly signed Letter of Transmittal, together with surrendered stock certificates (or book-entry confirmation via agent's message from DTC), Cascade shall process and pay the Per Share Merger Consideration of $36.92 per Share to the surrendering stockholder. Payment shall be made by check or wire transfer, as elected by the surrendering stockholder in the Letter of Transmittal.
Prior to processing any payment, Cascade shall verify the completeness of each submission, confirming receipt of all of the following:
(a) A properly completed and duly signed Letter of Transmittal;
(b) Stock certificates representing the Shares to be exchanged (or, for book-entry shares, an agent's message from DTC; or, for lost, stolen, or destroyed certificates, an affidavit of loss and surety bond or indemnity as described in Section V below); and
(c) A valid, properly completed IRS Form W-9 (or, for non-U.S. holders, the applicable IRS Form W-8 series form).
No interest shall accrue or be paid on the Per Share Merger Consideration, regardless of the date of surrender or the date of payment.
Withholding. Cascade shall apply backup withholding under Section 3406 of the Internal Revenue Code of 1986, as amended, to any payment with respect to which a valid IRS Form W-9 has not been provided by the surrendering stockholder. Cascade shall also apply any other applicable withholding (including under Sections 1441, 1442, or 1445 of the Code) as instructed by Calderwood & Harkness LLP or counsel to the surviving entity from time to time.
IV. ROLLOVER SHARE HANDLING
Certain Shares are subject to rollover agreements and will NOT be exchanged for the Per Share Merger Consideration (such shares, the "Rollover Shares"). The Rollover Shares are held by the following persons:
1. Jonathan Hargrove (Chief Executive Officer of Cloudium): Mr. Hargrove holds 7,736,400 Shares and is rolling over 50% of such Shares (i.e., 3,868,200 Shares, representing approximately $142,814,544 in value). The remaining 3,868,200 Shares held by Mr. Hargrove will be cashed out at the Per Share Merger Consideration of $36.92 per Share.
2. Pinnacle Growth Ventures LLC: Pinnacle Growth Ventures LLC holds 21,367,200 Shares and is rolling over 60% of such Shares (i.e., 12,820,320 Shares, representing approximately $473,241,408 in value). The remaining 8,546,880 Shares held by Pinnacle Growth Ventures LLC will be cashed out at the Per Share Merger Consideration of $36.92 per Share.
Cascade shall NOT process cash payments for any Rollover Shares. The Rollover Shares will be cancelled at the Effective Time and converted into equity interests in the surviving entity pursuant to separate rollover agreements between the applicable rollover holders and Fund VI. A schedule identifying the specific Rollover Shares and rollover holders will be provided to Cascade prior to the Effective Time. Upon receipt of such schedule, Cascade shall segregate and separately track all Rollover Shares in its records.
For the non-rollover portions of Mr. Hargrove's and Pinnacle Growth Ventures LLC's holdings, Cascade shall process cash payments at $36.92 per Share in the ordinary course upon receipt of a properly completed Letter of Transmittal and the other documentation described in Section III above.
V. LOST, STOLEN, OR DESTROYED CERTIFICATES
In the case of any stock certificate that has been lost, stolen, or destroyed, Cascade shall follow its customary procedures, requiring the surrendering stockholder to provide an affidavit of loss and a surety bond or indemnity in form and substance reasonably satisfactory to both Cascade and the surviving entity, as a condition to the payment of the Per Share Merger Consideration with respect to the Shares formerly represented by such certificate.
VI. APPRAISAL / DISSENTING SHARES
Stockholders who have properly demanded appraisal rights under Section 262 of the DGCL and who have not withdrawn such demand or otherwise lost their appraisal rights shall NOT receive the Per Share Merger Consideration (shares held by such stockholders, "Dissenting Shares"). Cascade shall NOT process payments for any Shares identified as Dissenting Shares.
Calderwood & Harkness LLP will provide Cascade with a list of any known dissenting stockholders promptly after the Effective Time. Please note that an Appraisal Rights Notice will be distributed to stockholders on July 10, 2024. A copy of the form of Appraisal Rights Notice is enclosed herewith for reference.
VII. FUNDING AND SOURCE OF MERGER CONSIDERATION
The aggregate merger consideration payable to non-rolling stockholders is approximately $6,183,944,048 and will be funded at closing through a combination of equity contributions from Fund VI and proceeds of the Term Loan B credit facility.
Please note that Cobalt Trust Company (100 Wall Street, New York, NY 10005) is serving as escrow agent for the $544,000,000 indemnity escrow established under the Merger Agreement. This escrow is separate from the exchange fund and does not affect or relate to Cascade's exchange agent role.
Cascade will receive the exchange fund — in an amount sufficient to pay the aggregate Per Share Merger Consideration for all Shares entitled to cash consideration — via wire transfer on or promptly following the closing date. Wire instructions will be confirmed under separate cover. Upon receipt of the exchange fund, Cascade shall hold such funds in a segregated account for the benefit of former stockholders of Cloudium, pending surrender and exchange in accordance with the terms of the Merger Agreement and these instructions.
VIII. COORDINATION WITH OTHER PARTIES
For Cascade's reference, the following parties are involved in the transaction. Cascade's coordination responsibilities, if any, are noted:
- Cobalt Trust Company (100 Wall Street, New York, NY 10005) — Escrow agent for the indemnity escrow. Separate function. No coordination is needed from Cascade on escrow matters.
- Blackthorn Proxy Advisors LLC (105 Madison Avenue, New York, NY 10016) — Proxy solicitor retained by Cloudium for the stockholder vote. Their engagement concludes at closing. No ongoing coordination is needed.
- Ridgeway Phelps & Sato LLP (375 Park Avenue, New York, NY 10152; Attention: Catherine Answorth) — Counsel to Cloudium. Cascade may receive parallel instructions from target's counsel. In the event of any conflict between instructions received from Ridgeway Phelps & Sato LLP and the instructions set forth herein, please contact Calderwood & Harkness LLP immediately before taking any action.
- Nadia Chowdhury, General Counsel of Cloudium — Ms. Chowdhury may contact Cascade regarding stockholder records and related matters. Please coordinate with Ms. Chowdhury as needed.
IX. TIMING AND DEADLINES
The following is a summary of key dates and action items:
- Closing: July 9, 2024 - Effective Time: 11:59 PM Eastern Time on July 9, 2024 - Commencement of mailing of Letters of Transmittal: July 10, 2024 - Filing of Form 25 (Nasdaq delisting): July 10, 2024 - Distribution of Appraisal Rights Notice: July 10, 2024
We request that Cascade confirm to Calderwood & Harkness LLP when the mailing of the Letters of Transmittal has been completed. In addition, Cascade is requested to acknowledge receipt of the exchange fund wire transfer and confirm that the segregated account has been established.
X. CONTACT INFORMATION
Please direct any questions regarding these instructions or the exchange process to:
Andrew Fitzpatrick Calderwood & Harkness LLP 599 Lexington Avenue New York, NY 10022 Telephone: (212) 558-3400 Email: afitzpatrick@calderwoodharkness.com
or
Tiffany Rosenthal Calderwood & Harkness LLP 599 Lexington Avenue New York, NY 10022 Telephone: (212) 558-3275 Email: trosenthal@calderwoodharkness.com
XI. ENCLOSURES
The following documents are enclosed with or referenced in this letter:
1. Final form of Letter of Transmittal (Exhibit D to the Merger Agreement) 2. Schedule of rollover shares and rollover holders (to be provided prior to the Effective Time) 3. Wire instructions for exchange fund transfer (to be confirmed under separate cover) 4. Form of Appraisal Rights Notice (for reference)
* * *
We kindly request that Cascade confirm receipt of this letter and its readiness to proceed with the exchange agent functions described herein at your earliest convenience. Time is of the essence given the anticipated closing date of July 9, 2024.
Very truly yours,
Andrew Fitzpatrick Calderwood & Harkness LLP 599 Lexington Avenue New York, NY 10022 Matter No. 1041-00003
Enclosures (as noted above)
cc: Tiffany Rosenthal, Calderwood & Harkness LLP Harrison Wexford, Calderwood & Harkness LLP