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PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT

MEMORANDUM

From: Tiffany Rosenthal, Calderwood & Harkness LLP

To: Harrison Wexford, Calderwood & Harkness LLP

CC: Andrew Fitzpatrick, Calderwood & Harkness LLP; Beatrice Holloway, Calderwood & Harkness LLP

Date: November 22, 2023

Re: Applicability of Section 203 of the Delaware General Corporation Law (Business Combination Statute) to the Proposed Acquisition of Cloudium Technologies plc by Solara Digital Infrastructure Fund VI LP; Analysis of Analogous UK Provisions

Matter No.: 1041-00003

I. Executive Summary

The purpose of this memorandum is to analyze whether Section 203 of the Delaware General Corporation Law, Title 8, Chapter 1, Subchapter VI (the "DGCL" or "Delaware Code") — Delaware's anti-takeover business combination statute — applies to or otherwise impedes the proposed acquisition of Cloudium Technologies plc ("Cloudium" or the "Company") by Solara Digital Infrastructure Fund VI LP ("Fund VI" or the "Buyer"). In the proposed transaction, Stratos Merger Sub Inc. ("Merger Sub"), a Delaware corporation and wholly owned subsidiary of Fund VI, will merge with and into Cloudium in a reverse triangular merger, with Cloudium surviving as a wholly owned subsidiary of Fund VI (the "Merger" or the "Transaction").

Bottom-line conclusion: DGCL § 203 does not apply to Cloudium because Cloudium is incorporated under the laws of England and Wales, not under the laws of the State of Delaware. Section 203, by its express statutory terms, governs only corporations organized under the DGCL — that is, Delaware corporations. Cloudium Technologies plc, an English public limited company registered under Company No. 09734521 with Companies House, is not a Delaware corporation and therefore falls entirely outside the scope of the statute. The fact that Cloudium's common stock is listed on the Nasdaq Global Select Market (ticker: CLDM), that Cloudium maintains significant US operations, or that certain of Cloudium's stockholders are US-domiciled entities does not alter this analysis.

With respect to Stratos Merger Sub Inc., which is a Delaware corporation (incorporated January 8, 2024, DE File No. 7923841), Section 203 is likewise inapplicable in substance. Merger Sub is a newly formed shell entity with no stockholders other than Fund VI, no operating history, and no assets beyond minimal capitalization. Fund VI has been the sole stockholder of Merger Sub since its date of incorporation, and the board of directors of Merger Sub (constituted by Fund VI designees) has approved the merger agreement. Accordingly, the "interested stockholder" restrictions that form the operative core of Section 203 have no application to the Merger as it relates to Merger Sub.

Additionally, this memorandum addresses whether UK law contains any statutory equivalent to DGCL § 203 that might restrict or delay the Transaction. The Companies Act 2006 of England and Wales does not contain a moratorium-style anti-takeover statute equivalent to Section 203. The UK Takeover Code, administered by the Takeover Panel, regulates takeover offers for certain UK-incorporated public companies but operates on a fundamentally different framework focused on procedural protections for target shareholders rather than restrictions on business combinations with significant stockholders. Based on our preliminary assessment, the UK Takeover Code is unlikely to apply to Cloudium given its Nasdaq-only listing and US-centered management, though we recommend obtaining written confirmation from UK counsel. No analogous UK statutory obstacle to the Transaction has been identified.

Overall conclusion: There is no Section 203 impediment to the Transaction. No analogous UK statutory obstacle has been identified. Specific practical recommendations are set forth in Section V below.

II. Background

A. Transaction Overview

Solara Digital Infrastructure LP, a Delaware limited partnership with headquarters at 1200 Market Street, Suite 3400, Wilmington, Delaware 19801 ("Solara" or the "Sponsor"), is a private equity platform focused on digital infrastructure, cloud computing, and enterprise technology investments. Through its investing fund, Solara Digital Infrastructure Fund VI LP, a Delaware limited partnership (EIN 87-4523190, vintage 2022, with approximately $12.4 billion in committed capital), Solara proposes to acquire all of the outstanding common stock of Cloudium Technologies plc for aggregate consideration of approximately $6,800,000,000 (approximately $36.92 per share, based on 184,200,000 shares of Cloudium common stock outstanding as of the date hereof). This memorandum refers to Solara Digital Infrastructure Fund VI LP as "Fund VI" throughout.

The proposed Transaction is structured as a reverse triangular merger under the DGCL: Stratos Merger Sub Inc., a newly formed Delaware corporation and wholly owned subsidiary of Fund VI, will merge with and into Cloudium, with Cloudium surviving as a wholly owned subsidiary of Fund VI. In the Merger, each share of Cloudium common stock (other than shares held by rollover investors, shares held by the Company as treasury shares, and dissenting shares) will be converted into the right to receive $36.92 in cash, without interest, subject to customary adjustments.

The key deal participants and their respective roles are as follows:

• Marcus Elliston, Founder and Managing Partner of Solara, leads Solara's investment committee and will serve as the principal investment decision-maker for the Transaction.

• Priya Narasimhan, Co-Managing Partner and Chief Investment Officer of Solara, oversees Fund VI's portfolio construction and will co-lead the post-closing integration and governance of the surviving entity.

• Jonathan Hargrove, Chief Executive Officer of Cloudium and holder of approximately 4.2% of the outstanding shares of Cloudium common stock (7,736,400 shares), will roll over approximately 50% of his equity interest into the surviving entity, representing rollover equity of approximately $142,814,544. Mr. Hargrove is expected to continue as Chief Executive Officer of the surviving entity following the closing.

• Pinnacle Growth Ventures LLC ("Pinnacle"), a Delaware limited liability company with offices at 777 Third Avenue, 28th Floor, New York, New York 10017, is a growth equity firm that holds approximately 11.6% of the outstanding shares of Cloudium common stock (21,367,200 shares). Pinnacle was an original Series B investor in Cloudium and has participated in subsequent financing rounds. Pinnacle currently holds two seats on Cloudium's board of directors. Pinnacle's Managing Member is Evelyn Carmichael. Pinnacle will roll over approximately 60% of its equity interest into the surviving entity, representing rollover equity of approximately $473,241,408.

The combined rollover amount attributable to Mr. Hargrove and Pinnacle is approximately $616,055,952.

Cloudium's board of directors is chaired by Douglas Pemberton, an independent director based in London. Cloudium's Chief Financial Officer is Sienna Whitfield, and its General Counsel is Nadia Chowdhury.

Target's counsel in connection with the Transaction is Ridgeway Phelps & Sato LLP, with Catherine Answorth leading the New York office engagement and Alistair Fenn leading the London office engagement. Calderwood & Harkness LLP represents Solara and Fund VI as buyer's counsel in connection with the Transaction.

B. Cloudium's Jurisdiction of Incorporation and Listing

Cloudium Technologies plc is incorporated as a public limited company under the laws of England and Wales pursuant to the Companies Act 2006. Cloudium is registered with Companies House under Company Number 09734521, and its registered office is located at 45 Broadwick Street, London W1F 0DB, United Kingdom. Cloudium was originally incorporated as a private limited company and was re-registered as a public limited company in connection with its initial public offering on the Nasdaq Global Select Market.

Cloudium maintains its principal US headquarters at 600 Townsend Street, Suite 800, San Francisco, California 94103. Cloudium has approximately 6,800 employees globally, with significant operations in both the United States and the United Kingdom.

Cloudium's common stock is listed on the Nasdaq Global Select Market under the ticker symbol "CLDM." Cloudium is a "foreign private issuer" for purposes of the Securities Exchange Act of 1934, as amended, although it files annual reports on Form 20-F and furnishes current reports on Form 6-K with the US Securities and Exchange Commission ("SEC"). As discussed in further detail below, Cloudium is not incorporated in Delaware and does not constitute a "domestic corporation" under Delaware law.

This distinction — between the place of incorporation and the place of listing or principal operations — is critical to the Section 203 analysis, as the statute's applicability turns exclusively on the law under which a corporation is organized, not on where its shares trade or where it conducts its principal business.

C. Merger Sub

Stratos Merger Sub Inc. is a Delaware corporation that was incorporated on January 8, 2024, and is registered with the Delaware Secretary of State under File Number 7923841. Merger Sub's registered office is located at 1209 Orange Street, Wilmington, Delaware 19801 (c/o Crowne Albany Corporation, registered agent).

Fund VI is the sole stockholder of Merger Sub. Merger Sub was formed solely for the purpose of effectuating the reverse triangular merger contemplated by the Transaction. Merger Sub has no operating history, no employees, no material assets (other than de minimis capitalization of $100, consisting of 100 shares of common stock, par value $0.01 per share, all held by Fund VI), and no stockholders other than Fund VI. At no time has any person or entity other than Fund VI held any equity interest in Merger Sub.

D. Significant Stockholders of Cloudium

For purposes of the Section 203 analysis, the following significant stockholders of Cloudium are identified:

• Jonathan Hargrove (CEO): holds approximately 7,736,400 shares of Cloudium common stock, representing approximately 4.2% of the 184,200,000 shares outstanding.

• Pinnacle Growth Ventures LLC: holds approximately 21,367,200 shares of Cloudium common stock, representing approximately 11.6% of the 184,200,000 shares outstanding. Pinnacle is a Delaware limited liability company managed by Evelyn Carmichael, its Managing Member. Pinnacle holds two seats on Cloudium's board of directors.

Neither Solara nor Fund VI currently holds, or has at any time held, any shares of Cloudium common stock or any other equity interest in Cloudium. Neither Solara nor Fund VI is an existing stockholder of Cloudium. This fact is relevant to, but ultimately unnecessary for, the Section 203 analysis, as discussed in Section III below.

III. Analysis of DGCL § 203

A. Statutory Framework of Section 203

Section 203 of the Delaware General Corporation Law is an anti-takeover statute that restricts certain "business combinations" between a "corporation" (as defined in the statute) and an "interested stockholder" for a period of three years following the date on which the stockholder became an interested stockholder, unless one of three enumerated exceptions is satisfied. The statute was enacted in 1988 in response to a wave of hostile takeover activity and is designed to protect Delaware corporations and their stockholders from coercive two-tier acquisition strategies and other transactions in which a significant stockholder could extract disproportionate value at the expense of minority stockholders.

The key defined terms under Section 203 are as follows:

"Corporation." As used in Section 203, the term "corporation" refers to a corporation organized under the laws of the State of Delaware — that is, a corporation formed and existing pursuant to the DGCL. See 8 Del. C. § 203(a) (providing that Section 203 "shall not be applicable to a corporation that does not have a class of voting stock that is . . . listed on a national securities exchange" or held of record by more than 2,000 stockholders, but making clear in its operative provisions that the statute governs the internal affairs of Delaware corporations). The Delaware Supreme Court has consistently held that the internal affairs doctrine governs the applicability of the DGCL, including Section 203, to corporations based on their state of incorporation, not their place of business or listing. See VantagePoint Venture Partners 1996 v. Examen, Inc., 871 A.2d 1108 (Del. 2005).

"Interested Stockholder." Section 203(c)(5) defines an "interested stockholder" as any person (other than the corporation and any direct or indirect majority-owned subsidiary of the corporation) that (i) is the owner of 15% or more of the outstanding voting stock of the corporation, or (ii) is an affiliate or associate of the corporation and was the owner of 15% or more of the outstanding voting stock of the corporation at any time within the three-year period immediately prior to the date on which it is sought to be determined whether such person is an interested stockholder. The 15% threshold is measured as of the relevant determination date.

"Business Combination." Section 203(c)(3) defines "business combination" broadly to include: (i) any merger or consolidation of the corporation (or any direct or indirect majority-owned subsidiary of the corporation) with the interested stockholder; (ii) any sale, lease, exchange, mortgage, pledge, transfer, or other disposition of assets of the corporation to or with the interested stockholder having an aggregate market value equal to 10% or more of the corporation's consolidated assets, aggregate market value of outstanding stock, or consolidated net income; (iii) any transaction resulting in the issuance or transfer of stock of the corporation to the interested stockholder; (iv) any transaction involving the corporation that has the effect of increasing the proportionate share of stock of any class or series of the corporation owned by the interested stockholder; and (v) the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges, or other financial benefits provided by or through the corporation.

Three Exceptions. Section 203(a) provides three exceptions under which a business combination between a corporation and an interested stockholder may proceed notwithstanding the three-year moratorium:

1. Prior Board Approval (§ 203(a)(1)): The board of directors of the corporation approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder prior to the date the stockholder became an interested stockholder.

2. 85% Ownership Threshold (§ 203(a)(2)): Upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced (excluding shares held by directors who are also officers and shares held by employee stock plans in which participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer).

3. Subsequent Board and Supermajority Stockholder Approval (§ 203(a)(3)): On or subsequent to the date the stockholder became an interested stockholder, the business combination is approved by the board of directors and authorized at an annual or special meeting of stockholders (not by written consent) by the affirmative vote of at least 66⅔% of the outstanding voting stock not owned by the interested stockholder.

Opt-Out Mechanism. A Delaware corporation may elect not to be governed by Section 203 by adopting an express provision in its original certificate of incorporation, or by amending its certificate of incorporation or bylaws by a vote of a majority of the outstanding voting stock. Any such amendment to the bylaws or certificate of incorporation is not effective until 12 months after its adoption and does not apply to any business combination between the corporation and any person who became an interested stockholder at or prior to the time of such adoption. See 8 Del. C. § 203(b)(3).

B. Application to Cloudium Technologies plc

The threshold question in determining whether Section 203 applies to the proposed Transaction as it relates to Cloudium Technologies plc is whether Cloudium is a "corporation" within the meaning of the statute — that is, whether Cloudium is organized under the laws of the State of Delaware.

As set forth in Section II.B above, Cloudium Technologies plc is a public limited company incorporated under the Companies Act 2006 of England and Wales. Cloudium is registered with Companies House under Company Number 09734521. Cloudium is not now, nor has it ever been, incorporated in the State of Delaware. Cloudium does not maintain a certificate of incorporation on file with the Delaware Secretary of State. Cloudium is not organized under, and does not derive its corporate existence from, the DGCL.

Because Section 203 by its express terms applies only to corporations organized under the DGCL, the statute has no application to Cloudium Technologies plc. This conclusion follows directly from the text of the statute and is consistent with the well-established internal affairs doctrine under Delaware law, which provides that the internal affairs of a corporation — including the rights and obligations of stockholders and the governance mechanisms applicable to business combinations — are governed by the law of the state of incorporation. See Edgar v. MITE Corp., 457 U.S. 624, 645 (1982); VantagePoint Venture Partners 1996 v. Examen, Inc., 871 A.2d 1108, 1113 (Del. 2005) ("It is now well established that only the law of the state of incorporation governs and determines issues relating to a corporation's internal affairs.").

Accordingly, Section 203 does not restrict or delay the proposed Merger with respect to Cloudium, regardless of whether any stockholder of Cloudium — including Pinnacle Growth Ventures LLC (at 11.6%) or Jonathan Hargrove (at 4.2%) — would otherwise qualify as an "interested stockholder" under the statute. The statute simply does not apply.

It bears emphasis that this conclusion is not affected by the fact that Cloudium's shares are listed on the Nasdaq Global Select Market, that Cloudium has significant US operations centered at its San Francisco headquarters, that approximately 6,800 employees work for Cloudium globally, or that a substantial majority of Cloudium's revenue is generated in the United States. The place of incorporation, not the place of listing, operations, or management, controls the applicability of DGCL § 203. The Delaware courts have consistently applied the internal affairs doctrine without regard to where a corporation's business is physically conducted or where its securities are traded.

C. Application to Stratos Merger Sub Inc.

Because Stratos Merger Sub Inc. is a Delaware corporation (DE File No. 7923841), it is technically within the scope of Section 203. However, Section 203 is inapplicable in substance to Merger Sub for several independent and reinforcing reasons.

First, Fund VI has been the sole stockholder of Merger Sub since its date of incorporation on January 8, 2024. Fund VI did not acquire its ownership interest in Merger Sub through a market transaction or through any transaction that could cause Fund VI to be classified as an "interested stockholder" that crossed the 15% threshold at some point subsequent to Merger Sub's formation. Rather, Fund VI formed Merger Sub as a wholly owned subsidiary and has been its sole stockholder at all times. The concept of an "interested stockholder" under Section 203 presupposes a person who acquires 15% or more of the outstanding voting stock of an already-existing corporation with pre-existing stockholders. Here, there are no pre-existing stockholders, no minority holders whose interests the statute is designed to protect, and no scenario in which Fund VI "became" an interested stockholder within the meaning of Section 203(c)(5). Fund VI has always been the only stockholder.

Second, Merger Sub has no other stockholders, no operating history, no employees, and no material assets other than de minimis capitalization of $100. The policy concerns that animate Section 203 — protecting minority stockholders of Delaware corporations from coercive or self-dealing transactions with large blockholders — are simply not present in the context of a newly formed, single-purpose acquisition vehicle.

Third, in the reverse triangular merger structure, Merger Sub merges with and into Cloudium (not the reverse). Merger Sub is the disappearing entity. After the effective time of the Merger, Merger Sub will cease to exist as a separate corporate entity. The surviving entity — Cloudium — is an English public limited company. Thus, the "business combination" at issue, to the extent it involves Merger Sub, is a combination between Merger Sub and its sole stockholder (Fund VI), which is inherently and necessarily authorized by the party whose protection the statute is designed to afford.

Fourth, and in any event, the board of directors of Merger Sub — which consists entirely of Fund VI designees — has approved the merger agreement. This approval satisfies the first exception under Section 203(a)(1), which permits a business combination where the board of directors approved the business combination (or the transaction resulting in the person becoming an interested stockholder) prior to the date such person became an interested stockholder. Because Fund VI was the sole stockholder from the moment of incorporation and the board approved the merger agreement prior to any relevant determination date, the exception is satisfied even under a hypothetical application of the statute.

For all of these independent reasons, Section 203 poses no impediment to the Merger through Stratos Merger Sub Inc.

D. Relevance of Pinnacle Growth Ventures and Jonathan Hargrove

We have separately considered whether the stockholding positions of Pinnacle Growth Ventures LLC and Jonathan Hargrove in Cloudium raise any issues under Section 203.

As discussed in Section III.B above, Section 203 is inapplicable to Cloudium because Cloudium is not a Delaware corporation. However, even if Section 203 were hypothetically applicable to Cloudium — which, for the avoidance of doubt, it is not — neither Pinnacle nor Hargrove would constitute an "interested stockholder" under the statute. Pinnacle holds approximately 11.6% of the outstanding shares of Cloudium common stock, and Hargrove holds approximately 4.2%. Both of these holdings fall below the 15% threshold required to trigger "interested stockholder" status under Section 203(c)(5). Neither holder, individually or in combination (and there is no basis to aggregate their holdings under the statute), owns 15% or more of the outstanding voting stock of Cloudium.

Furthermore, post-closing, Pinnacle and Hargrove will each roll over a portion of their equity interest into the surviving entity. Specifically, Hargrove will roll over approximately 50% of his equity interest (approximately $142,814,544 in value), and Pinnacle will roll over approximately 60% of its equity interest (approximately $473,241,408 in value), for a combined rollover amount of approximately $616,055,952. This rollover occurs at or after the effective time of the Merger, at which point the surviving entity will be wholly owned by Fund VI (subject to the rollover equity interests). The rollover equity will represent a minority interest in the surviving entity (a private company), not continued public stockholdings in a Delaware corporation. Section 203 issues would not arise in connection with the rollover for the independent reason that the surviving entity is not a Delaware corporation, and the rollover occurs in the context of a negotiated transaction approved by all relevant parties.

Accordingly, the stockholding positions of Pinnacle and Hargrove present no issues under Section 203.

IV. Analysis of Analogous UK Provisions

A. No UK Statutory Equivalent to DGCL § 203

UK company law, as principally codified in the Companies Act 2006, does not contain a moratorium-style anti-takeover statute equivalent to DGCL § 203. There is no UK statutory provision that restricts business combinations between a UK company and a stockholder holding 15% or more (or any other specified threshold) of the company's voting stock. The UK corporate governance framework is based on fundamentally different principles, emphasizing shareholder empowerment and board neutrality (particularly in the takeover context) rather than the defensive mechanisms characteristic of Delaware anti-takeover law.

The principal UK regulatory mechanism governing takeover activity is the UK Takeover Code (formally, the City Code on Takeovers and Mergers), which is administered by the Takeover Panel. The Takeover Code focuses on procedural protections for target shareholders, including mandatory offer obligations, equal treatment requirements, and information disclosure standards. It does not, however, impose restrictions on business combinations with significant stockholders of the type contemplated by DGCL § 203. The Takeover Code and its potential applicability to the Transaction are discussed in Sections IV.B and IV.D below.

B. UK Takeover Code Considerations

The UK Takeover Code applies to offers for companies that satisfy certain jurisdictional conditions. Specifically, the Takeover Code applies to offers for: (i) companies incorporated in the United Kingdom, the Channel Islands, or the Isle of Man that have their securities admitted to trading on a regulated market in the United Kingdom or an EEA state; and (ii) public companies and certain private companies incorporated in the United Kingdom, the Channel Islands, or the Isle of Man that are considered to have their central place of management and control in any of those jurisdictions, even if their securities are not admitted to trading on a regulated market.

Cloudium Technologies plc is incorporated in England and Wales, satisfying the first limb of the jurisdictional test. However, Cloudium's shares are listed on the Nasdaq Global Select Market — a US national securities exchange — and are not admitted to trading on any regulated market in the United Kingdom or an EEA state. Accordingly, the Takeover Code will not apply to Cloudium on the basis of a UK/EEA listing.

The question therefore turns on whether the Takeover Code applies to Cloudium on the alternative basis that its central place of management and control is in the United Kingdom, the Channel Islands, or the Isle of Man. This determination requires a fact-specific analysis, and the following considerations are relevant:

Factors favoring UK-centered management and control:

• Cloudium's registered office is located at 45 Broadwick Street, London W1F 0DB, United Kingdom.

• Cloudium's board chair, Douglas Pemberton, is an independent director based in the United Kingdom.

• Cloudium operates a significant UK subsidiary, Cloudium Technologies UK Ltd. (Company No. 11287456), which employs approximately 1,200 people in London and Manchester and generated revenue of approximately £312,000,000 (approximately $390,000,000) for the fiscal year ended September 30, 2023.

• Certain board meetings are held in London.

Factors favoring US-centered management and control:

• Cloudium's principal US headquarters is located at 600 Townsend Street, Suite 800, San Francisco, California 94103.

• Cloudium's Chief Executive Officer (Jonathan Hargrove), Chief Financial Officer (Sienna Whitfield), and General Counsel (Nadia Chowdhury) are all US-based.

• Cloudium is listed on the Nasdaq Global Select Market and is subject to US securities law reporting obligations, including SEC filings on Form 20-F and Form 6-K.

• Cloudium's public-company governance is centered in the United States, with its principal investor relations, financial reporting, and regulatory compliance functions conducted from San Francisco.

• A majority of Cloudium's global revenue is generated in the United States.

• The principal operational decision-making authority resides with the US-based executive management team.

Preliminary Assessment. Based on the foregoing factors, our preliminary assessment is that the UK Takeover Code is unlikely to apply to Cloudium. The central place of management and control of the Company appears to be in the United States, given the US-based executive management team, the Nasdaq listing, the SEC reporting obligations, and the US-centered operational decision-making. The presence of the registered office in London and the UK-based board chair, while relevant, do not appear to outweigh the substantial US-centered management factors. However, we note that this determination involves a degree of judgment and is ultimately within the purview of the Takeover Panel.

We recommend that the Transaction team coordinate with UK counsel — specifically, Albright & Kerr LLP (lead: Fiona McAllister) and Ridgeway Phelps & Sato LLP London (lead: Alistair Fenn) — to confirm in writing that the UK Takeover Code does not apply to Cloudium or, if it is determined that the Code does apply, to assess the implications for the Transaction structure.

We note further that if the Takeover Code were found to apply, the Transaction structure — a reverse triangular merger effected under the DGCL rather than a UK scheme of arrangement under Part 26 of the Companies Act 2006 or a contractual takeover offer under the Takeover Code — could raise additional procedural considerations. In particular, the Takeover Panel might require that the Transaction be structured in a manner consistent with the Code's procedural requirements, including compliance with the offer timetable, mandatory offer rules, and information disclosure obligations. However, because Cloudium's stockholders will vote on the Merger via a proxy statement process under US securities law (SEC Definitive Proxy Statement, Schedule 14A), and the Merger itself is effected under the DGCL, the US-law framework is expected to govern the mechanics of the Transaction. The interaction between the DGCL merger process and the Takeover Code, if the Code were found to apply, would need to be separately analyzed by UK counsel.

Recommendation: Obtain written confirmation from Ridgeway Phelps & Sato LLP (London) and/or a formal ruling from the Takeover Panel that the Code does not apply, or has been disapplied, with respect to the Transaction. If such confirmation cannot be obtained prior to signing, the merger agreement should include appropriate conditions and termination rights to address the risk that the Takeover Panel could assert jurisdiction.

C. Companies Act 2006 — Part 26 (Schemes of Arrangement) and Part 28 (Takeovers)

Part 26 — Schemes of Arrangement. Part 26 of the Companies Act 2006 (Sections 895–901) provides a court-supervised statutory mechanism by which a company may propose a compromise or arrangement with its creditors or members (stockholders). In the acquisition context, a Part 26 scheme of arrangement is frequently used as an alternative to a contractual takeover offer to effect the acquisition of a UK public company. A scheme requires, among other things, court approval, class meetings of affected stockholders, and the affirmative vote of a majority in number representing 75% in value of the stockholders present and voting in each class.

Part 26 is not directly relevant to the Transaction as currently structured. The Transaction is structured as a Delaware-law reverse triangular merger, not as a UK scheme of arrangement. The decision to use a reverse triangular merger structure rather than a UK scheme was made in consultation with the Transaction team and is documented in the Preliminary Structuring Memorandum dated October 18, 2023. Among the factors supporting this structural choice were (i) the avoidance of the procedural complexity and timeline associated with a UK court-supervised process, (ii) the ability to use the DGCL merger framework with which Fund VI and its counsel are familiar, and (iii) the absence of a UK/EEA listing that would otherwise necessitate compliance with UK procedural requirements.

Part 28 — Takeovers. Part 28 of the Companies Act 2006 (Sections 942–992) provides the statutory framework for the regulation of takeover offers in the United Kingdom. Part 28 largely implements the EU Takeover Directive (Directive 2004/25/EC) and establishes the authority of the Takeover Panel and the legal framework for the Takeover Code. The applicability analysis for Part 28 is coextensive with the analysis set forth in Section IV.B above regarding the Takeover Code.

No provisions in the Companies Act 2006 — whether in Part 26, Part 28, or elsewhere — impose a Delaware § 203-style moratorium on business combinations between a UK company and a stockholder that has exceeded a specified ownership threshold. UK company law does not contain any equivalent to the "interested stockholder" concept or the three-year business combination restriction.

D. UK City Code on Takeovers — Mandatory Offer Rule (Rule 9)

Rule 9 of the UK Takeover Code (the "Mandatory Offer Rule") provides that any person who, together with persons acting in concert, acquires an interest in shares carrying 30% or more of the voting rights of a company to which the Code applies must make a mandatory cash offer to the holders of all remaining equity share capital and voting non-equity share capital of the company. The mandatory offer must be in cash (or accompanied by a cash alternative) at the highest price paid by the offeror or any person acting in concert during the 12 months prior to the announcement of the offer.

The Mandatory Offer Rule would only be relevant to the Transaction if the UK Takeover Code were determined to apply to Cloudium, which, as analyzed in Section IV.B above, is unlikely based on our preliminary assessment. If the Code were to apply, Fund VI's acquisition of 100% of Cloudium's outstanding shares would necessarily trigger the Rule 9 threshold. However, as the Transaction contemplates the acquisition of all outstanding shares of Cloudium common stock (subject to rollover elections), the structural outcome of the Transaction is functionally equivalent to a mandatory offer. The principal procedural implications of Rule 9, if applicable, would relate to the timing, disclosure, and pricing requirements of the offer rather than any substantive restriction on the Transaction itself.

As noted above, we recommend that this analysis be confirmed with UK counsel.

E. Companies Act 2006 — Sections 895–901 (Cross-Border Considerations)

As a brief supplementary note, if the Transaction were alternatively structured as a UK scheme of arrangement under Sections 895–901 of the Companies Act 2006, additional procedural requirements would apply, including the need for court sanction, the convening of class meetings of Cloudium's stockholders, and compliance with the Companies Act 2006's requirements for the circulation of explanatory statements and scheme documentation. The reverse triangular merger structure under Delaware law avoids these requirements, which is consistent with the recommendation set forth in the Preliminary Structuring Memorandum dated October 18, 2023.

To the extent that any cross-border merger considerations arise under the Companies (Cross-Border Mergers) Regulations 2007 (SI 2007/2974) or the successor provisions thereof, we note that these regulations generally apply to mergers between EEA-registered companies and do not apply to a merger between a Delaware corporation and an English public limited company effected under the DGCL. However, we recommend that UK counsel confirm that no cross-border merger filing or approval requirement applies to the Transaction.

Conclusion on UK Provisions: No provision of UK law — whether in the Companies Act 2006, the UK Takeover Code, or otherwise — imposes a moratorium or restriction on business combinations analogous to DGCL § 203. The UK Takeover Code is unlikely to apply, though written confirmation from UK counsel is recommended.

V. Practical Recommendations

Based on the analysis set forth in this memorandum, we recommend the following actions in connection with the Transaction:

1. No Section 203 Filings, Waivers, or Board Resolutions Required. No filings with the Delaware Secretary of State, no waivers from Cloudium's board of directors, and no board resolutions specifically addressing Section 203 are required in connection with the Transaction. Because Section 203 is inapplicable to Cloudium (as a non-Delaware entity) and poses no impediment to the Merger through Merger Sub (as a newly formed wholly owned subsidiary of Fund VI whose board has approved the transaction), no affirmative Section 203 compliance measures are necessary.

2. Merger Agreement Representations and Covenants. The merger agreement need not contain representations or covenants from Cloudium related to compliance with DGCL § 203, as the statute is inapplicable to a non-Delaware entity. However, we recommend that the merger agreement include (a) a representation from Merger Sub that its board of directors has duly approved the merger agreement and the transactions contemplated thereby, and (b) a representation from Merger Sub that Section 203 of the DGCL is inapplicable to, or has been satisfied with respect to, the Merger. These representations provide additional comfort to all parties and are consistent with customary practice in transactions involving Delaware merger subsidiaries.

3. UK Takeover Code Confirmation. The Transaction team should coordinate with Albright & Kerr LLP (lead: Fiona McAllister) and Ridgeway Phelps & Sato LLP London (lead: Alistair Fenn) to confirm in writing that the UK Takeover Code does not apply to Cloudium, or, in the alternative, that the Code has been disapplied with respect to the Transaction. If formal confirmation from the Takeover Panel is deemed advisable, the request should be submitted sufficiently in advance of the anticipated signing date to avoid delays in execution. If confirmation cannot be obtained prior to signing, the merger agreement should include appropriate conditions, representations, or termination rights to address the risk that the Takeover Panel could assert jurisdiction after signing.

4. Review of Cloudium's Articles of Association. As a matter of due diligence, we recommend that the Transaction team request from target's counsel (Ridgeway Phelps & Sato LLP) a copy of Cloudium's current articles of association and confirm whether the articles contain any anti-takeover provisions analogous to DGCL § 203, such as restrictions on business combinations or transactions with significant stockholders, poison pill provisions, or other defensive mechanisms. This request is consistent with Item 2.4 of the Preliminary Due Diligence Request List sent to Cloudium's counsel on September 10, 2023, and should be specifically flagged for follow-up if not already received.

5. No Analogous UK Statutory Obstacle Identified; Change of Control Provisions. No analogous UK statutory provision has been identified that would restrict the Merger or impose a moratorium on business combinations with significant stockholders of Cloudium. However, certain of Cloudium's commercial contracts may contain change of control provisions that could be triggered by the Transaction and that may require consent from counterparties. The analysis of these change of control provisions is outside the scope of this memorandum and is addressed separately in the Issue-Specific Diligence Memo — Change-of-Control Provisions dated January 8, 2024. We recommend that the Transaction team review the findings of that memo in conjunction with this analysis to ensure that all potential impediments to closing have been identified and addressed.

VI. Conclusion

Based on the foregoing analysis, our conclusions are as follows:

First, DGCL § 203 is inapplicable to Cloudium Technologies plc because Cloudium is incorporated under the laws of England and Wales, not under the laws of the State of Delaware. Section 203, by its express terms, governs only corporations organized under the DGCL. Cloudium's listing on the Nasdaq Global Select Market, its US operations, and the US-domicile of certain of its stockholders do not alter this result.

Second, DGCL § 203 poses no impediment to the Merger through Stratos Merger Sub Inc. Although Merger Sub is a Delaware corporation, Fund VI has been its sole stockholder since incorporation, Merger Sub has no other stockholders or operating history, and the board of Merger Sub has approved the merger agreement. The "interested stockholder" restrictions of Section 203 are therefore inapplicable in substance, and the prior board approval exception under Section 203(a)(1) is independently satisfied.

Third, neither Pinnacle Growth Ventures LLC (at 11.6%) nor Jonathan Hargrove (at 4.2%) holds 15% or more of the outstanding voting stock of Cloudium, and therefore neither would constitute an "interested stockholder" even under a hypothetical application of the statute.

Fourth, UK law contains no direct statutory equivalent to DGCL § 203. The UK Takeover Code likely does not apply to Cloudium given Cloudium's Nasdaq-only listing and US-centered management, but we recommend obtaining written confirmation from UK counsel and/or the Takeover Panel. No provision of the Companies Act 2006 imposes a moratorium or business combination restriction analogous to Section 203.

Fifth, no affirmative action items under DGCL § 203 — including filings, waivers, board resolutions, or stockholder approvals — are required in connection with the Transaction.

We are available to discuss this analysis and the practical recommendations set forth herein at your convenience.

Prepared by:

________________________________________

Tiffany Rosenthal Lead Associate, Mergers & Acquisitions Calderwood & Harkness LLP 599 Lexington Avenue New York, NY 10022

Reviewed by:

________________________________________

Harrison Wexford Responsible Partner, Mergers & Acquisitions Calderwood & Harkness LLP 599 Lexington Avenue New York, NY 10022

This memorandum is a privileged and confidential attorney work product prepared by Calderwood & Harkness LLP for the exclusive use of the addressees identified above. It is not intended to be, and should not be, relied upon by any other person or entity. This memorandum does not constitute legal advice and is subject to revision as additional facts are developed and as the transaction structure evolves.

PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT
MEMORANDUM
From: Tiffany Rosenthal, Calderwood & Harkness LLP
To: Harrison Wexford, Calderwood & Harkness LLP
CC: Andrew Fitzpatrick, Calderwood & Harkness LLP; Beatrice Holloway, Calderwood & Harkness LLP
Date: November 22, 2023
Re: Applicability of Section 203 of the Delaware General Corporation Law (Business Combination Statute) to the Proposed Acquisition of Cloudium Technologies plc by Solara Digital Infrastructure Fund VI LP; Analysis of Analogous UK Provisions
Matter No.: 1041-00003
I. Executive Summary
The purpose of this memorandum is to analyze whether Section 203 of the Delaware General Corporation Law, Title 8, Chapter 1, Subchapter VI (the "DGCL" or "Delaware Code") — Delaware's anti-takeover business combination statute — applies to or otherwise impedes the proposed acquisition of Cloudium Technologies plc ("Cloudium" or the "Company") by Solara Digital Infrastructure Fund VI LP ("Fund VI" or the "Buyer"). In the proposed transaction, Stratos Merger Sub Inc. ("Merger Sub"), a Delaware corporation and wholly owned subsidiary of Fund VI, will merge with and into Cloudium in a reverse triangular merger, with Cloudium surviving as a wholly owned subsidiary of Fund VI (the "Merger" or the "Transaction").
Bottom-line conclusion: DGCL § 203 does not apply to Cloudium because Cloudium is incorporated under the laws of England and Wales, not under the laws of the State of Delaware. Section 203, by its express statutory terms, governs only corporations organized under the DGCL — that is, Delaware corporations. Cloudium Technologies plc, an English public limited company registered under Company No. 09734521 with Companies House, is not a Delaware corporation and therefore falls entirely outside the scope of the statute. The fact that Cloudium's common stock is listed on the Nasdaq Global Select Market (ticker: CLDM), that Cloudium maintains significant US operations, or that certain of Cloudium's stockholders are US-domiciled entities does not alter this analysis.
With respect to Stratos Merger Sub Inc., which is a Delaware corporation (incorporated January 8, 2024, DE File No. 7923841), Section 203 is likewise inapplicable in substance. Merger Sub is a newly formed shell entity with no stockholders other than Fund VI, no operating history, and no assets beyond minimal capitalization. Fund VI has been the sole stockholder of Merger Sub since its date of incorporation, and the board of directors of Merger Sub (constituted by Fund VI designees) has approved the merger agreement. Accordingly, the "interested stockholder" restrictions that form the operative core of Section 203 have no application to the Merger as it relates to Merger Sub.
Additionally, this memorandum addresses whether UK law contains any statutory equivalent to DGCL § 203 that might restrict or delay the Transaction. The Companies Act 2006 of England and Wales does not contain a moratorium-style anti-takeover statute equivalent to Section 203. The UK Takeover Code, administered by the Takeover Panel, regulates takeover offers for certain UK-incorporated public companies but operates on a fundamentally different framework focused on procedural protections for target shareholders rather than restrictions on business combinations with significant stockholders. Based on our preliminary assessment, the UK Takeover Code is unlikely to apply to Cloudium given its Nasdaq-only listing and US-centered management, though we recommend obtaining written confirmation from UK counsel. No analogous UK statutory obstacle to the Transaction has been identified.
Overall conclusion: There is no Section 203 impediment to the Transaction. No analogous UK statutory obstacle has been identified. Specific practical recommendations are set forth in Section V below.
II. Background
A. Transaction Overview
Solara Digital Infrastructure LP, a Delaware limited partnership with headquarters at 1200 Market Street, Suite 3400, Wilmington, Delaware 19801 ("Solara" or the "Sponsor"), is a private equity platform focused on digital infrastructure, cloud computing, and enterprise technology investments. Through its investing fund, Solara Digital Infrastructure Fund VI LP, a Delaware limited partnership (EIN 87-4523190, vintage 2022, with approximately $12.4 billion in committed capital), Solara proposes to acquire all of the outstanding common stock of Cloudium Technologies plc for aggregate consideration of approximately $6,800,000,000 (approximately $36.92 per share, based on 184,200,000 shares of Cloudium common stock outstanding as of the date hereof). This memorandum refers to Solara Digital Infrastructure Fund VI LP as "Fund VI" throughout.
The proposed Transaction is structured as a reverse triangular merger under the DGCL: Stratos Merger Sub Inc., a newly formed Delaware corporation and wholly owned subsidiary of Fund VI, will merge with and into Cloudium, with Cloudium surviving as a wholly owned subsidiary of Fund VI. In the Merger, each share of Cloudium common stock (other than shares held by rollover investors, shares held by the Company as treasury shares, and dissenting shares) will be converted into the right to receive $36.92 in cash, without interest, subject to customary adjustments.
The key deal participants and their respective roles are as follows:
•  Marcus Elliston, Founder and Managing Partner of Solara, leads Solara's investment committee and will serve as the principal investment decision-maker for the Transaction.
•  Priya Narasimhan, Co-Managing Partner and Chief Investment Officer of Solara, oversees Fund VI's portfolio construction and will co-lead the post-closing integration and governance of the surviving entity.
•  Jonathan Hargrove, Chief Executive Officer of Cloudium and holder of approximately 4.2% of the outstanding shares of Cloudium common stock (7,736,400 shares), will roll over approximately 50% of his equity interest into the surviving entity, representing rollover equity of approximately $142,814,544. Mr. Hargrove is expected to continue as Chief Executive Officer of the surviving entity following the closing.
•  Pinnacle Growth Ventures LLC ("Pinnacle"), a Delaware limited liability company with offices at 777 Third Avenue, 28th Floor, New York, New York 10017, is a growth equity firm that holds approximately 11.6% of the outstanding shares of Cloudium common stock (21,367,200 shares). Pinnacle was an original Series B investor in Cloudium and has participated in subsequent financing rounds. Pinnacle currently holds two seats on Cloudium's board of directors. Pinnacle's Managing Member is Evelyn Carmichael. Pinnacle will roll over approximately 60% of its equity interest into the surviving entity, representing rollover equity of approximately $473,241,408.
The combined rollover amount attributable to Mr. Hargrove and Pinnacle is approximately $616,055,952.
Cloudium's board of directors is chaired by Douglas Pemberton, an independent director based in London. Cloudium's Chief Financial Officer is Sienna Whitfield, and its General Counsel is Nadia Chowdhury.
Target's counsel in connection with the Transaction is Ridgeway Phelps & Sato LLP, with Catherine Answorth leading the New York office engagement and Alistair Fenn leading the London office engagement. Calderwood & Harkness LLP represents Solara and Fund VI as buyer's counsel in connection with the Transaction.
B. Cloudium's Jurisdiction of Incorporation and Listing
Cloudium Technologies plc is incorporated as a public limited company under the laws of England and Wales pursuant to the Companies Act 2006. Cloudium is registered with Companies House under Company Number 09734521, and its registered office is located at 45 Broadwick Street, London W1F 0DB, United Kingdom. Cloudium was originally incorporated as a private limited company and was re-registered as a public limited company in connection with its initial public offering on the Nasdaq Global Select Market.
Cloudium maintains its principal US headquarters at 600 Townsend Street, Suite 800, San Francisco, California 94103. Cloudium has approximately 6,800 employees globally, with significant operations in both the United States and the United Kingdom.
Cloudium's common stock is listed on the Nasdaq Global Select Market under the ticker symbol "CLDM." Cloudium is a "foreign private issuer" for purposes of the Securities Exchange Act of 1934, as amended, although it files annual reports on Form 20-F and furnishes current reports on Form 6-K with the US Securities and Exchange Commission ("SEC"). As discussed in further detail below, Cloudium is not incorporated in Delaware and does not constitute a "domestic corporation" under Delaware law.
This distinction — between the place of incorporation and the place of listing or principal operations — is critical to the Section 203 analysis, as the statute's applicability turns exclusively on the law under which a corporation is organized, not on where its shares trade or where it conducts its principal business.
C. Merger Sub
Stratos Merger Sub Inc. is a Delaware corporation that was incorporated on January 8, 2024, and is registered with the Delaware Secretary of State under File Number 7923841. Merger Sub's registered office is located at 1209 Orange Street, Wilmington, Delaware 19801 (c/o Crowne Albany Corporation, registered agent).
Fund VI is the sole stockholder of Merger Sub. Merger Sub was formed solely for the purpose of effectuating the reverse triangular merger contemplated by the Transaction. Merger Sub has no operating history, no employees, no material assets (other than de minimis capitalization of $100, consisting of 100 shares of common stock, par value $0.01 per share, all held by Fund VI), and no stockholders other than Fund VI. At no time has any person or entity other than Fund VI held any equity interest in Merger Sub.
D. Significant Stockholders of Cloudium
For purposes of the Section 203 analysis, the following significant stockholders of Cloudium are identified:
•  Jonathan Hargrove (CEO): holds approximately 7,736,400 shares of Cloudium common stock, representing approximately 4.2% of the 184,200,000 shares outstanding.
•  Pinnacle Growth Ventures LLC: holds approximately 21,367,200 shares of Cloudium common stock, representing approximately 11.6% of the 184,200,000 shares outstanding. Pinnacle is a Delaware limited liability company managed by Evelyn Carmichael, its Managing Member. Pinnacle holds two seats on Cloudium's board of directors.
Neither Solara nor Fund VI currently holds, or has at any time held, any shares of Cloudium common stock or any other equity interest in Cloudium. Neither Solara nor Fund VI is an existing stockholder of Cloudium. This fact is relevant to, but ultimately unnecessary for, the Section 203 analysis, as discussed in Section III below.
III. Analysis of DGCL § 203
A. Statutory Framework of Section 203
Section 203 of the Delaware General Corporation Law is an anti-takeover statute that restricts certain "business combinations" between a "corporation" (as defined in the statute) and an "interested stockholder" for a period of three years following the date on which the stockholder became an interested stockholder, unless one of three enumerated exceptions is satisfied. The statute was enacted in 1988 in response to a wave of hostile takeover activity and is designed to protect Delaware corporations and their stockholders from coercive two-tier acquisition strategies and other transactions in which a significant stockholder could extract disproportionate value at the expense of minority stockholders.
The key defined terms under Section 203 are as follows:
"Corporation." As used in Section 203, the term "corporation" refers to a corporation organized under the laws of the State of Delaware — that is, a corporation formed and existing pursuant to the DGCL. See 8 Del. C. § 203(a) (providing that Section 203 "shall not be applicable to a corporation that does not have a class of voting stock that is . . . listed on a national securities exchange" or held of record by more than 2,000 stockholders, but making clear in its operative provisions that the statute governs the internal affairs of Delaware corporations). The Delaware Supreme Court has consistently held that the internal affairs doctrine governs the applicability of the DGCL, including Section 203, to corporations based on their state of incorporation, not their place of business or listing. See VantagePoint Venture Partners 1996 v. Examen, Inc., 871 A.2d 1108 (Del. 2005).
"Interested Stockholder." Section 203(c)(5) defines an "interested stockholder" as any person (other than the corporation and any direct or indirect majority-owned subsidiary of the corporation) that (i) is the owner of 15% or more of the outstanding voting stock of the corporation, or (ii) is an affiliate or associate of the corporation and was the owner of 15% or more of the outstanding voting stock of the corporation at any time within the three-year period immediately prior to the date on which it is sought to be determined whether such person is an interested stockholder. The 15% threshold is measured as of the relevant determination date.
"Business Combination." Section 203(c)(3) defines "business combination" broadly to include: (i) any merger or consolidation of the corporation (or any direct or indirect majority-owned subsidiary of the corporation) with the interested stockholder; (ii) any sale, lease, exchange, mortgage, pledge, transfer, or other disposition of assets of the corporation to or with the interested stockholder having an aggregate market value equal to 10% or more of the corporation's consolidated assets, aggregate market value of outstanding stock, or consolidated net income; (iii) any transaction resulting in the issuance or transfer of stock of the corporation to the interested stockholder; (iv) any transaction involving the corporation that has the effect of increasing the proportionate share of stock of any class or series of the corporation owned by the interested stockholder; and (v) the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges, or other financial benefits provided by or through the corporation.
Three Exceptions. Section 203(a) provides three exceptions under which a business combination between a corporation and an interested stockholder may proceed notwithstanding the three-year moratorium:
1.  Prior Board Approval (§ 203(a)(1)): The board of directors of the corporation approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder prior to the date the stockholder became an interested stockholder.
2.  85% Ownership Threshold (§ 203(a)(2)): Upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced (excluding shares held by directors who are also officers and shares held by employee stock plans in which participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer).
3.  Subsequent Board and Supermajority Stockholder Approval (§ 203(a)(3)): On or subsequent to the date the stockholder became an interested stockholder, the business combination is approved by the board of directors and authorized at an annual or special meeting of stockholders (not by written consent) by the affirmative vote of at least 66⅔% of the outstanding voting stock not owned by the interested stockholder.
Opt-Out Mechanism. A Delaware corporation may elect not to be governed by Section 203 by adopting an express provision in its original certificate of incorporation, or by amending its certificate of incorporation or bylaws by a vote of a majority of the outstanding voting stock. Any such amendment to the bylaws or certificate of incorporation is not effective until 12 months after its adoption and does not apply to any business combination between the corporation and any person who became an interested stockholder at or prior to the time of such adoption. See 8 Del. C. § 203(b)(3).
B. Application to Cloudium Technologies plc
The threshold question in determining whether Section 203 applies to the proposed Transaction as it relates to Cloudium Technologies plc is whether Cloudium is a "corporation" within the meaning of the statute — that is, whether Cloudium is organized under the laws of the State of Delaware.
As set forth in Section II.B above, Cloudium Technologies plc is a public limited company incorporated under the Companies Act 2006 of England and Wales. Cloudium is registered with Companies House under Company Number 09734521. Cloudium is not now, nor has it ever been, incorporated in the State of Delaware. Cloudium does not maintain a certificate of incorporation on file with the Delaware Secretary of State. Cloudium is not organized under, and does not derive its corporate existence from, the DGCL.
Because Section 203 by its express terms applies only to corporations organized under the DGCL, the statute has no application to Cloudium Technologies plc. This conclusion follows directly from the text of the statute and is consistent with the well-established internal affairs doctrine under Delaware law, which provides that the internal affairs of a corporation — including the rights and obligations of stockholders and the governance mechanisms applicable to business combinations — are governed by the law of the state of incorporation. See Edgar v. MITE Corp., 457 U.S. 624, 645 (1982); VantagePoint Venture Partners 1996 v. Examen, Inc., 871 A.2d 1108, 1113 (Del. 2005) ("It is now well established that only the law of the state of incorporation governs and determines issues relating to a corporation's internal affairs.").
Accordingly, Section 203 does not restrict or delay the proposed Merger with respect to Cloudium, regardless of whether any stockholder of Cloudium — including Pinnacle Growth Ventures LLC (at 11.6%) or Jonathan Hargrove (at 4.2%) — would otherwise qualify as an "interested stockholder" under the statute. The statute simply does not apply.
It bears emphasis that this conclusion is not affected by the fact that Cloudium's shares are listed on the Nasdaq Global Select Market, that Cloudium has significant US operations centered at its San Francisco headquarters, that approximately 6,800 employees work for Cloudium globally, or that a substantial majority of Cloudium's revenue is generated in the United States. The place of incorporation, not the place of listing, operations, or management, controls the applicability of DGCL § 203. The Delaware courts have consistently applied the internal affairs doctrine without regard to where a corporation's business is physically conducted or where its securities are traded.
C. Application to Stratos Merger Sub Inc.
Because Stratos Merger Sub Inc. is a Delaware corporation (DE File No. 7923841), it is technically within the scope of Section 203. However, Section 203 is inapplicable in substance to Merger Sub for several independent and reinforcing reasons.
First, Fund VI has been the sole stockholder of Merger Sub since its date of incorporation on January 8, 2024. Fund VI did not acquire its ownership interest in Merger Sub through a market transaction or through any transaction that could cause Fund VI to be classified as an "interested stockholder" that crossed the 15% threshold at some point subsequent to Merger Sub's formation. Rather, Fund VI formed Merger Sub as a wholly owned subsidiary and has been its sole stockholder at all times. The concept of an "interested stockholder" under Section 203 presupposes a person who acquires 15% or more of the outstanding voting stock of an already-existing corporation with pre-existing stockholders. Here, there are no pre-existing stockholders, no minority holders whose interests the statute is designed to protect, and no scenario in which Fund VI "became" an interested stockholder within the meaning of Section 203(c)(5). Fund VI has always been the only stockholder.
Second, Merger Sub has no other stockholders, no operating history, no employees, and no material assets other than de minimis capitalization of $100. The policy concerns that animate Section 203 — protecting minority stockholders of Delaware corporations from coercive or self-dealing transactions with large blockholders — are simply not present in the context of a newly formed, single-purpose acquisition vehicle.
Third, in the reverse triangular merger structure, Merger Sub merges with and into Cloudium (not the reverse). Merger Sub is the disappearing entity. After the effective time of the Merger, Merger Sub will cease to exist as a separate corporate entity. The surviving entity — Cloudium — is an English public limited company. Thus, the "business combination" at issue, to the extent it involves Merger Sub, is a combination between Merger Sub and its sole stockholder (Fund VI), which is inherently and necessarily authorized by the party whose protection the statute is designed to afford.
Fourth, and in any event, the board of directors of Merger Sub — which consists entirely of Fund VI designees — has approved the merger agreement. This approval satisfies the first exception under Section 203(a)(1), which permits a business combination where the board of directors approved the business combination (or the transaction resulting in the person becoming an interested stockholder) prior to the date such person became an interested stockholder. Because Fund VI was the sole stockholder from the moment of incorporation and the board approved the merger agreement prior to any relevant determination date, the exception is satisfied even under a hypothetical application of the statute.
For all of these independent reasons, Section 203 poses no impediment to the Merger through Stratos Merger Sub Inc.
D. Relevance of Pinnacle Growth Ventures and Jonathan Hargrove
We have separately considered whether the stockholding positions of Pinnacle Growth Ventures LLC and Jonathan Hargrove in Cloudium raise any issues under Section 203.
As discussed in Section III.B above, Section 203 is inapplicable to Cloudium because Cloudium is not a Delaware corporation. However, even if Section 203 were hypothetically applicable to Cloudium — which, for the avoidance of doubt, it is not — neither Pinnacle nor Hargrove would constitute an "interested stockholder" under the statute. Pinnacle holds approximately 11.6% of the outstanding shares of Cloudium common stock, and Hargrove holds approximately 4.2%. Both of these holdings fall below the 15% threshold required to trigger "interested stockholder" status under Section 203(c)(5). Neither holder, individually or in combination (and there is no basis to aggregate their holdings under the statute), owns 15% or more of the outstanding voting stock of Cloudium.
Furthermore, post-closing, Pinnacle and Hargrove will each roll over a portion of their equity interest into the surviving entity. Specifically, Hargrove will roll over approximately 50% of his equity interest (approximately $142,814,544 in value), and Pinnacle will roll over approximately 60% of its equity interest (approximately $473,241,408 in value), for a combined rollover amount of approximately $616,055,952. This rollover occurs at or after the effective time of the Merger, at which point the surviving entity will be wholly owned by Fund VI (subject to the rollover equity interests). The rollover equity will represent a minority interest in the surviving entity (a private company), not continued public stockholdings in a Delaware corporation. Section 203 issues would not arise in connection with the rollover for the independent reason that the surviving entity is not a Delaware corporation, and the rollover occurs in the context of a negotiated transaction approved by all relevant parties.
Accordingly, the stockholding positions of Pinnacle and Hargrove present no issues under Section 203.
IV. Analysis of Analogous UK Provisions
A. No UK Statutory Equivalent to DGCL § 203
UK company law, as principally codified in the Companies Act 2006, does not contain a moratorium-style anti-takeover statute equivalent to DGCL § 203. There is no UK statutory provision that restricts business combinations between a UK company and a stockholder holding 15% or more (or any other specified threshold) of the company's voting stock. The UK corporate governance framework is based on fundamentally different principles, emphasizing shareholder empowerment and board neutrality (particularly in the takeover context) rather than the defensive mechanisms characteristic of Delaware anti-takeover law.
The principal UK regulatory mechanism governing takeover activity is the UK Takeover Code (formally, the City Code on Takeovers and Mergers), which is administered by the Takeover Panel. The Takeover Code focuses on procedural protections for target shareholders, including mandatory offer obligations, equal treatment requirements, and information disclosure standards. It does not, however, impose restrictions on business combinations with significant stockholders of the type contemplated by DGCL § 203. The Takeover Code and its potential applicability to the Transaction are discussed in Sections IV.B and IV.D below.
B. UK Takeover Code Considerations
The UK Takeover Code applies to offers for companies that satisfy certain jurisdictional conditions. Specifically, the Takeover Code applies to offers for: (i) companies incorporated in the United Kingdom, the Channel Islands, or the Isle of Man that have their securities admitted to trading on a regulated market in the United Kingdom or an EEA state; and (ii) public companies and certain private companies incorporated in the United Kingdom, the Channel Islands, or the Isle of Man that are considered to have their central place of management and control in any of those jurisdictions, even if their securities are not admitted to trading on a regulated market.
Cloudium Technologies plc is incorporated in England and Wales, satisfying the first limb of the jurisdictional test. However, Cloudium's shares are listed on the Nasdaq Global Select Market — a US national securities exchange — and are not admitted to trading on any regulated market in the United Kingdom or an EEA state. Accordingly, the Takeover Code will not apply to Cloudium on the basis of a UK/EEA listing.
The question therefore turns on whether the Takeover Code applies to Cloudium on the alternative basis that its central place of management and control is in the United Kingdom, the Channel Islands, or the Isle of Man. This determination requires a fact-specific analysis, and the following considerations are relevant:
Factors favoring UK-centered management and control:
•  Cloudium's registered office is located at 45 Broadwick Street, London W1F 0DB, United Kingdom.
•  Cloudium's board chair, Douglas Pemberton, is an independent director based in the United Kingdom.
•  Cloudium operates a significant UK subsidiary, Cloudium Technologies UK Ltd. (Company No. 11287456), which employs approximately 1,200 people in London and Manchester and generated revenue of approximately £312,000,000 (approximately $390,000,000) for the fiscal year ended September 30, 2023.
•  Certain board meetings are held in London.
Factors favoring US-centered management and control:
•  Cloudium's principal US headquarters is located at 600 Townsend Street, Suite 800, San Francisco, California 94103.
•  Cloudium's Chief Executive Officer (Jonathan Hargrove), Chief Financial Officer (Sienna Whitfield), and General Counsel (Nadia Chowdhury) are all US-based.
•  Cloudium is listed on the Nasdaq Global Select Market and is subject to US securities law reporting obligations, including SEC filings on Form 20-F and Form 6-K.
•  Cloudium's public-company governance is centered in the United States, with its principal investor relations, financial reporting, and regulatory compliance functions conducted from San Francisco.
•  A majority of Cloudium's global revenue is generated in the United States.
•  The principal operational decision-making authority resides with the US-based executive management team.
Preliminary Assessment. Based on the foregoing factors, our preliminary assessment is that the UK Takeover Code is unlikely to apply to Cloudium. The central place of management and control of the Company appears to be in the United States, given the US-based executive management team, the Nasdaq listing, the SEC reporting obligations, and the US-centered operational decision-making. The presence of the registered office in London and the UK-based board chair, while relevant, do not appear to outweigh the substantial US-centered management factors. However, we note that this determination involves a degree of judgment and is ultimately within the purview of the Takeover Panel.
We recommend that the Transaction team coordinate with UK counsel — specifically, Albright & Kerr LLP (lead: Fiona McAllister) and Ridgeway Phelps & Sato LLP London (lead: Alistair Fenn) — to confirm in writing that the UK Takeover Code does not apply to Cloudium or, if it is determined that the Code does apply, to assess the implications for the Transaction structure.
We note further that if the Takeover Code were found to apply, the Transaction structure — a reverse triangular merger effected under the DGCL rather than a UK scheme of arrangement under Part 26 of the Companies Act 2006 or a contractual takeover offer under the Takeover Code — could raise additional procedural considerations. In particular, the Takeover Panel might require that the Transaction be structured in a manner consistent with the Code's procedural requirements, including compliance with the offer timetable, mandatory offer rules, and information disclosure obligations. However, because Cloudium's stockholders will vote on the Merger via a proxy statement process under US securities law (SEC Definitive Proxy Statement, Schedule 14A), and the Merger itself is effected under the DGCL, the US-law framework is expected to govern the mechanics of the Transaction. The interaction between the DGCL merger process and the Takeover Code, if the Code were found to apply, would need to be separately analyzed by UK counsel.
Recommendation: Obtain written confirmation from Ridgeway Phelps & Sato LLP (London) and/or a formal ruling from the Takeover Panel that the Code does not apply, or has been disapplied, with respect to the Transaction. If such confirmation cannot be obtained prior to signing, the merger agreement should include appropriate conditions and termination rights to address the risk that the Takeover Panel could assert jurisdiction.
C. Companies Act 2006 — Part 26 (Schemes of Arrangement) and Part 28 (Takeovers)
Part 26 — Schemes of Arrangement. Part 26 of the Companies Act 2006 (Sections 895–901) provides a court-supervised statutory mechanism by which a company may propose a compromise or arrangement with its creditors or members (stockholders). In the acquisition context, a Part 26 scheme of arrangement is frequently used as an alternative to a contractual takeover offer to effect the acquisition of a UK public company. A scheme requires, among other things, court approval, class meetings of affected stockholders, and the affirmative vote of a majority in number representing 75% in value of the stockholders present and voting in each class.
Part 26 is not directly relevant to the Transaction as currently structured. The Transaction is structured as a Delaware-law reverse triangular merger, not as a UK scheme of arrangement. The decision to use a reverse triangular merger structure rather than a UK scheme was made in consultation with the Transaction team and is documented in the Preliminary Structuring Memorandum dated October 18, 2023. Among the factors supporting this structural choice were (i) the avoidance of the procedural complexity and timeline associated with a UK court-supervised process, (ii) the ability to use the DGCL merger framework with which Fund VI and its counsel are familiar, and (iii) the absence of a UK/EEA listing that would otherwise necessitate compliance with UK procedural requirements.
Part 28 — Takeovers. Part 28 of the Companies Act 2006 (Sections 942–992) provides the statutory framework for the regulation of takeover offers in the United Kingdom. Part 28 largely implements the EU Takeover Directive (Directive 2004/25/EC) and establishes the authority of the Takeover Panel and the legal framework for the Takeover Code. The applicability analysis for Part 28 is coextensive with the analysis set forth in Section IV.B above regarding the Takeover Code.
No provisions in the Companies Act 2006 — whether in Part 26, Part 28, or elsewhere — impose a Delaware § 203-style moratorium on business combinations between a UK company and a stockholder that has exceeded a specified ownership threshold. UK company law does not contain any equivalent to the "interested stockholder" concept or the three-year business combination restriction.
D. UK City Code on Takeovers — Mandatory Offer Rule (Rule 9)
Rule 9 of the UK Takeover Code (the "Mandatory Offer Rule") provides that any person who, together with persons acting in concert, acquires an interest in shares carrying 30% or more of the voting rights of a company to which the Code applies must make a mandatory cash offer to the holders of all remaining equity share capital and voting non-equity share capital of the company. The mandatory offer must be in cash (or accompanied by a cash alternative) at the highest price paid by the offeror or any person acting in concert during the 12 months prior to the announcement of the offer.
The Mandatory Offer Rule would only be relevant to the Transaction if the UK Takeover Code were determined to apply to Cloudium, which, as analyzed in Section IV.B above, is unlikely based on our preliminary assessment. If the Code were to apply, Fund VI's acquisition of 100% of Cloudium's outstanding shares would necessarily trigger the Rule 9 threshold. However, as the Transaction contemplates the acquisition of all outstanding shares of Cloudium common stock (subject to rollover elections), the structural outcome of the Transaction is functionally equivalent to a mandatory offer. The principal procedural implications of Rule 9, if applicable, would relate to the timing, disclosure, and pricing requirements of the offer rather than any substantive restriction on the Transaction itself.
As noted above, we recommend that this analysis be confirmed with UK counsel.
E. Companies Act 2006 — Sections 895–901 (Cross-Border Considerations)
As a brief supplementary note, if the Transaction were alternatively structured as a UK scheme of arrangement under Sections 895–901 of the Companies Act 2006, additional procedural requirements would apply, including the need for court sanction, the convening of class meetings of Cloudium's stockholders, and compliance with the Companies Act 2006's requirements for the circulation of explanatory statements and scheme documentation. The reverse triangular merger structure under Delaware law avoids these requirements, which is consistent with the recommendation set forth in the Preliminary Structuring Memorandum dated October 18, 2023.
To the extent that any cross-border merger considerations arise under the Companies (Cross-Border Mergers) Regulations 2007 (SI 2007/2974) or the successor provisions thereof, we note that these regulations generally apply to mergers between EEA-registered companies and do not apply to a merger between a Delaware corporation and an English public limited company effected under the DGCL. However, we recommend that UK counsel confirm that no cross-border merger filing or approval requirement applies to the Transaction.
Conclusion on UK Provisions: No provision of UK law — whether in the Companies Act 2006, the UK Takeover Code, or otherwise — imposes a moratorium or restriction on business combinations analogous to DGCL § 203. The UK Takeover Code is unlikely to apply, though written confirmation from UK counsel is recommended.
V. Practical Recommendations
Based on the analysis set forth in this memorandum, we recommend the following actions in connection with the Transaction:
1.  No Section 203 Filings, Waivers, or Board Resolutions Required. No filings with the Delaware Secretary of State, no waivers from Cloudium's board of directors, and no board resolutions specifically addressing Section 203 are required in connection with the Transaction. Because Section 203 is inapplicable to Cloudium (as a non-Delaware entity) and poses no impediment to the Merger through Merger Sub (as a newly formed wholly owned subsidiary of Fund VI whose board has approved the transaction), no affirmative Section 203 compliance measures are necessary.
2.  Merger Agreement Representations and Covenants. The merger agreement need not contain representations or covenants from Cloudium related to compliance with DGCL § 203, as the statute is inapplicable to a non-Delaware entity. However, we recommend that the merger agreement include (a) a representation from Merger Sub that its board of directors has duly approved the merger agreement and the transactions contemplated thereby, and (b) a representation from Merger Sub that Section 203 of the DGCL is inapplicable to, or has been satisfied with respect to, the Merger. These representations provide additional comfort to all parties and are consistent with customary practice in transactions involving Delaware merger subsidiaries.
3.  UK Takeover Code Confirmation. The Transaction team should coordinate with Albright & Kerr LLP (lead: Fiona McAllister) and Ridgeway Phelps & Sato LLP London (lead: Alistair Fenn) to confirm in writing that the UK Takeover Code does not apply to Cloudium, or, in the alternative, that the Code has been disapplied with respect to the Transaction. If formal confirmation from the Takeover Panel is deemed advisable, the request should be submitted sufficiently in advance of the anticipated signing date to avoid delays in execution. If confirmation cannot be obtained prior to signing, the merger agreement should include appropriate conditions, representations, or termination rights to address the risk that the Takeover Panel could assert jurisdiction after signing.
4.  Review of Cloudium's Articles of Association. As a matter of due diligence, we recommend that the Transaction team request from target's counsel (Ridgeway Phelps & Sato LLP) a copy of Cloudium's current articles of association and confirm whether the articles contain any anti-takeover provisions analogous to DGCL § 203, such as restrictions on business combinations or transactions with significant stockholders, poison pill provisions, or other defensive mechanisms. This request is consistent with Item 2.4 of the Preliminary Due Diligence Request List sent to Cloudium's counsel on September 10, 2023, and should be specifically flagged for follow-up if not already received.
5.  No Analogous UK Statutory Obstacle Identified; Change of Control Provisions. No analogous UK statutory provision has been identified that would restrict the Merger or impose a moratorium on business combinations with significant stockholders of Cloudium. However, certain of Cloudium's commercial contracts may contain change of control provisions that could be triggered by the Transaction and that may require consent from counterparties. The analysis of these change of control provisions is outside the scope of this memorandum and is addressed separately in the Issue-Specific Diligence Memo — Change-of-Control Provisions dated January 8, 2024. We recommend that the Transaction team review the findings of that memo in conjunction with this analysis to ensure that all potential impediments to closing have been identified and addressed.
VI. Conclusion
Based on the foregoing analysis, our conclusions are as follows:
First, DGCL § 203 is inapplicable to Cloudium Technologies plc because Cloudium is incorporated under the laws of England and Wales, not under the laws of the State of Delaware. Section 203, by its express terms, governs only corporations organized under the DGCL. Cloudium's listing on the Nasdaq Global Select Market, its US operations, and the US-domicile of certain of its stockholders do not alter this result.
Second, DGCL § 203 poses no impediment to the Merger through Stratos Merger Sub Inc. Although Merger Sub is a Delaware corporation, Fund VI has been its sole stockholder since incorporation, Merger Sub has no other stockholders or operating history, and the board of Merger Sub has approved the merger agreement. The "interested stockholder" restrictions of Section 203 are therefore inapplicable in substance, and the prior board approval exception under Section 203(a)(1) is independently satisfied.
Third, neither Pinnacle Growth Ventures LLC (at 11.6%) nor Jonathan Hargrove (at 4.2%) holds 15% or more of the outstanding voting stock of Cloudium, and therefore neither would constitute an "interested stockholder" even under a hypothetical application of the statute.
Fourth, UK law contains no direct statutory equivalent to DGCL § 203. The UK Takeover Code likely does not apply to Cloudium given Cloudium's Nasdaq-only listing and US-centered management, but we recommend obtaining written confirmation from UK counsel and/or the Takeover Panel. No provision of the Companies Act 2006 imposes a moratorium or business combination restriction analogous to Section 203.
Fifth, no affirmative action items under DGCL § 203 — including filings, waivers, board resolutions, or stockholder approvals — are required in connection with the Transaction.
We are available to discuss this analysis and the practical recommendations set forth herein at your convenience.
Prepared by:
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Tiffany Rosenthal Lead Associate, Mergers & Acquisitions Calderwood & Harkness LLP 599 Lexington Avenue New York, NY 10022
Reviewed by:
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Harrison Wexford Responsible Partner, Mergers & Acquisitions Calderwood & Harkness LLP 599 Lexington Avenue New York, NY 10022
This memorandum is a privileged and confidential attorney work product prepared by Calderwood & Harkness LLP for the exclusive use of the addressees identified above. It is not intended to be, and should not be, relied upon by any other person or entity. This memorandum does not constitute legal advice and is subject to revision as additional facts are developed and as the transaction structure evolves.

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