NON-COMPETITION AND NON-SOLICITATION AGREEMENT
Dated as of January 22, 2024
by and between
SOLARA DIGITAL INFRASTRUCTURE FUND VI LP
a Delaware limited partnership
and
SIENNA WHITFIELD
NON-COMPETITION AND NON-SOLICITATION AGREEMENT
This Non-Competition and Non-Solicitation Agreement (this "Agreement") is made and entered into as of January 22, 2024 (the "Agreement Date"), by and between:
Solara Digital Infrastructure Fund VI LP, a Delaware limited partnership ("Buyer" or "Fund VI"), with its principal office at 1200 Market Street, Suite 3400, Wilmington, DE 19801, acting by and through its general partner, Solara Fund VI GP LLC, a Delaware limited liability company; and
Sienna Whitfield, an individual residing in San Francisco, California ("Executive").
Buyer and Executive are each referred to herein as a "Party" and collectively as the "Parties."
RECITALS
WHEREAS, Solara Digital Infrastructure Fund VI LP, a Delaware limited partnership ("Buyer"), Stratos Merger Sub Inc., a Delaware corporation and a wholly owned subsidiary of Buyer ("Merger Sub"), and Cloudium Technologies plc, a public limited company incorporated under the laws of England and Wales (Company No. 09734521) ("Cloudium" or the "Company"), have entered into that certain Agreement and Plan of Merger, dated as of January 22, 2024 (as amended, restated, supplemented, or otherwise modified from time to time, the "Merger Agreement"), pursuant to which Merger Sub will merge with and into Cloudium in a reverse triangular merger, with Cloudium surviving as a wholly owned subsidiary of Buyer (the "Merger");
WHEREAS, the aggregate deal value of the Merger is Six Billion Eight Hundred Million Dollars ($6,800,000,000), representing approximately Thirty-Six Dollars and Ninety-Two Cents ($36.92) per share of Cloudium common stock (Nasdaq: CLDM), based upon approximately 184,200,000 shares of Cloudium common stock issued and outstanding as of the date hereof;
WHEREAS, Executive currently serves as the Chief Financial Officer of Cloudium Technologies plc, with the Company's United States headquarters located at 600 Townsend Street, Suite 800, San Francisco, California 94103, and its registered office located at 45 Broadwick Street, London W1F 0DB, United Kingdom;
WHEREAS, Executive, by virtue of her position as Chief Financial Officer of the Company, has had access to, and currently possesses, extensive confidential and proprietary information regarding the business, operations, customers, employees, technology, trade secrets, financial condition, and strategic plans of the Company and its direct and indirect subsidiaries, including without limitation Cloudium Technologies UK Ltd. (Company No. 11287456), Cloudium Technologies India Pvt. Ltd. (Bangalore, Karnataka, India), and Cloudium Solutions GmbH (Berlin, Germany) (each, a "Subsidiary" and, together with the Company, the "Company Group");
WHEREAS, the Company is a leading provider of cloud-native enterprise resource planning ("ERP"), customer-relationship management ("CRM"), and business-intelligence ("BI") software-as-a-service ("SaaS") solutions serving mid-market and enterprise customers across multiple industries and geographies, with approximately 6,800 employees globally and annual recurring revenue of approximately One Billion Seven Hundred Forty Million Dollars ($1,740,000,000) as of December 31, 2023;
WHEREAS, Buyer would not have entered into the Merger Agreement absent Executive's agreement to the restrictive covenants contained herein, and the Parties acknowledge that the restrictions set forth in this Agreement are a material inducement to Buyer's willingness to consummate the Merger and to pay the merger consideration contemplated by the Merger Agreement;
WHEREAS, Executive will receive substantial benefits in connection with the consummation of the Merger, including, without limitation, the merger consideration payable in respect of her shares of Cloudium common stock and other equity securities, the acceleration or settlement of equity-based awards, and the opportunity for continued employment with the surviving entity following the Closing, all of which constitute adequate, independent, and sufficient consideration for the covenants and agreements of Executive set forth herein;
WHEREAS, this Agreement is being executed and delivered simultaneously with, and as a condition to, the execution and delivery of the Merger Agreement, and the obligations of the Parties hereunder are subject to the occurrence of the Closing (as defined below); and
WHEREAS, capitalized terms used but not otherwise defined herein shall have the respective meanings ascribed to such terms in the Merger Agreement.
NOW, THEREFORE, in consideration of the foregoing recitals, the mutual covenants and agreements set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
ARTICLE I — DEFINITIONS
Section 1.1 — Defined Terms
As used in this Agreement, the following terms shall have the meanings set forth below:
"Affiliate" means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common control with, such Person. For purposes of this definition, "control" (including, with correlative meanings, the terms "controlled by" and "under common control with") means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract, or otherwise.
"Business" means the business of developing, marketing, licensing, selling, supporting, or hosting cloud-native enterprise resource planning (ERP), customer-relationship management (CRM), and/or business-intelligence (BI) software-as-a-service solutions for mid-market and enterprise customers, including all business activities conducted by the Company and any of its Subsidiaries as of the date hereof and as of the Closing Date. For the avoidance of doubt, the Business shall include, without limitation, the development and commercialization of data analytics platforms, artificial intelligence and machine learning capabilities integrated into or offered in conjunction with the foregoing SaaS solutions, and the provision of implementation, training, and professional services related thereto.
"Closing" means the closing of the Merger as defined in the Merger Agreement. The Closing occurred on July 9, 2024, and a Certificate of Merger was filed with the Secretary of State of the State of Delaware at 11:59 PM Eastern Time on such date.
"Closing Date" means the date on which the Closing occurs.
"Company Group" means the Company and each of its direct and indirect Subsidiaries, including, without limitation, Cloudium Technologies UK Ltd. (Company No. 11287456), Cloudium Technologies India Pvt. Ltd. (Bangalore, Karnataka, India), and Cloudium Solutions GmbH (Berlin, Germany), and, following the Closing, their respective successors and assigns.
"Competing Enterprise" means any Person (other than any member of the Company Group, Buyer, or any of their respective Affiliates) that engages in, or owns or controls a material interest in any Person that engages in, the Business in any part of the Restricted Territory. Without limiting the generality of the foregoing, a Person shall be deemed to "own or control a material interest" in another Person if such Person holds, directly or indirectly, a ten percent (10%) or greater equity or economic interest in such other Person, or has the right to appoint or elect one or more members of such other Person's board of directors or equivalent governing body.
"Confidential Information" means all non-public, confidential, or proprietary information relating to the business, operations, customers, technology, products, intellectual property, financial condition, employees, or strategic plans of the Company Group, Buyer, or any of their respective Affiliates, whether in written, oral, electronic, visual, or other form, and whether or not marked or designated as "confidential." Without limiting the foregoing, Confidential Information shall include trade secrets, customer lists, customer data, annual recurring revenue and revenue metrics, pricing strategies, discount schedules, product roadmaps, source code, software architecture and design documentation, algorithms, marketing plans and campaign strategies, financial projections and budgets, employee compensation information, organizational charts, merger and acquisition strategies, and any information received from third parties subject to obligations of confidentiality. Notwithstanding the foregoing, Confidential Information shall not include information that: (a) is or becomes generally available to the public other than as a result of Executive's breach of this Agreement or any other confidentiality obligation owed to the Company Group or Buyer; (b) was known to Executive on a non-confidential basis prior to her employment with the Company Group, as demonstrated by written records; (c) was independently developed by Executive without use of or reference to any Confidential Information, as demonstrated by written records; or (d) is required to be disclosed by applicable law, rule, regulation, or valid legal process, provided that Executive shall give prompt written notice of such requirement to Buyer (to the extent permitted by applicable law) and shall cooperate with Buyer in seeking a protective order or other appropriate remedy to limit such disclosure.
"Effective Date" means the Closing Date.
"Key Customer" means any Person that: (a) is or was a customer of any member of the Company Group at any time during the twelve (12) month period immediately preceding the Closing Date; or (b) any Person with whom any member of the Company Group has been in active negotiations regarding a prospective customer relationship at any time during such twelve (12) month period. For the avoidance of doubt, Key Customers include, without limitation, Aegis Federal Solutions Inc. (which maintained a customer relationship with the Company Group generating approximately Eighty-Four Million Dollars ($84,000,000) in annual recurring revenue as of the date hereof), and each other customer identified on Schedule A to the Merger Agreement.
"Key Supplier" means any Person that is or was a supplier, vendor, licensor, or service provider to any member of the Company Group pursuant to a contract with annual payments or fees in excess of One Million Dollars ($1,000,000) at any time during the twelve (12) month period immediately preceding the Closing Date. Without limiting the foregoing, Key Suppliers include, without limitation, Helix Data Systems GmbH and each other supplier, vendor, licensor, or service provider identified on Schedule B to the Merger Agreement.
"Person" means any individual, corporation, limited liability company, partnership (whether general or limited), joint venture, trust, estate, association, unincorporated organization, governmental authority or agency, or other entity of any kind.
"Restricted Employee" means any Person who: (a) is employed by, or is an independent contractor or consultant to, any member of the Company Group as of the Closing Date; or (b) was so employed by, or engaged as an independent contractor or consultant to, any member of the Company Group at any time during the six (6) month period immediately preceding the Closing Date. For purposes of this definition, the term shall include employees, independent contractors, and consultants at all levels, including executive officers, senior management, software engineers, product managers, sales personnel, and customer success professionals.
"Restricted Period" means the period commencing on the Closing Date and ending on the second (2nd) anniversary of the Closing Date (i.e., through and including July 9, 2026).
"Restricted Territory" means worldwide; provided, however, that if any court of competent jurisdiction determines that a worldwide restriction is unenforceable as applied to Executive under the circumstances, then the Restricted Territory shall mean (a) the United States of America (including all fifty states, the District of Columbia, and all territories and possessions thereof), (b) the United Kingdom of Great Britain and Northern Ireland, (c) the Federal Republic of Germany, (d) the Republic of India, and (e) each other country in which the Company Group derived revenue at any time during the twelve (12) month period immediately preceding the Closing Date, as set forth on Schedule C to the Merger Agreement.
ARTICLE II — NON-COMPETITION
Section 2.1 — Non-Competition Covenant
During the Restricted Period, Executive shall not, directly or indirectly, whether as an employee, officer, director, manager, partner, consultant, advisor, agent, independent contractor, owner, member, stockholder, lender, guarantor, or in any other capacity whatsoever:
(a) engage in, assist, or have any active interest in any Competing Enterprise anywhere within the Restricted Territory;
(b) own, manage, operate, control, finance, or participate in the ownership, management, operation, control, or financing of any Competing Enterprise anywhere within the Restricted Territory; or
(c) provide services that are the same as or substantially similar to the services that Executive provided to the Company Group during the twenty-four (24) months preceding the Closing Date (including, without limitation, financial management, strategic planning, investor relations, capital markets advisory, mergers and acquisitions support, financial reporting, treasury management, and other executive-level functions) to any Competing Enterprise anywhere within the Restricted Territory.
For the avoidance of doubt, the restrictions in this Section 2.1 shall apply regardless of whether Executive's participation in a Competing Enterprise is compensated or uncompensated, and regardless of whether Executive holds a formal title or position with such Competing Enterprise. Executive acknowledges that the Business is conducted on a global basis, that the Company Group's customers and prospects are located throughout the Restricted Territory, and that a worldwide restriction is reasonable and necessary to protect the legitimate business interests of Buyer and the Company Group, including the goodwill acquired in connection with the Merger.
Section 2.2 — Permitted Activities
Notwithstanding the restrictions set forth in Section 2.1, the following activities shall not constitute a breach of this Article II:
(a) Passive Investments. Executive may own, directly or indirectly, not more than two percent (2%) of the outstanding equity securities of any publicly traded company that constitutes or is an Affiliate of a Competing Enterprise, provided that (i) such securities are listed on a national securities exchange or traded on a nationally recognized over-the-counter market, (ii) such investment is purely passive, and (iii) Executive does not otherwise participate in the management, operations, or governance of such entity, whether as a director, officer, advisor, consultant, or otherwise.
(b) Charitable and Civic Activities. Executive may serve on the boards of directors or advisory boards of charitable organizations, educational institutions, or civic organizations, provided that such service does not interfere with Executive's compliance with the covenants set forth in this Agreement and does not involve Executive in activities that would otherwise constitute a violation of this Article II.
(c) Post-Restricted Period Activities. Following the expiration of the Restricted Period (as the same may be extended pursuant to Section 9.2), Executive shall be free to engage in any lawful activity, subject to the continuing obligations of Executive under Article V (Confidentiality), Article VI (Non-Disparagement), and Article VII (Intellectual Property and Work Product) of this Agreement.
ARTICLE III — NON-SOLICITATION OF EMPLOYEES AND SERVICE PROVIDERS
Section 3.1 — Employee Non-Solicitation
During the Restricted Period, Executive shall not, directly or indirectly, whether on her own behalf or on behalf of any other Person:
(a) solicit, recruit, hire, engage, or otherwise attempt to persuade any Restricted Employee to leave his or her employment or engagement with the Company Group, Buyer, or any of their respective Affiliates;
(b) encourage, induce, or attempt to encourage or induce any Restricted Employee to terminate, modify, or otherwise alter his or her employment or engagement relationship with the Company Group, Buyer, or any of their respective Affiliates; or
(c) hire, retain, or engage (whether as an employee, independent contractor, consultant, or otherwise) any Restricted Employee, or cause or assist any other Person to do any of the foregoing.
Executive acknowledges that the Company Group's employees and service providers represent a critical asset of the Company Group, that Executive has developed significant relationships with such individuals in the course of her tenure as Chief Financial Officer, and that the restrictions set forth in this Section 3.1 are reasonable and necessary to protect the legitimate business interests of Buyer and the Company Group.
Section 3.2 — Exceptions to Employee Non-Solicitation
Notwithstanding the restrictions set forth in Section 3.1, the following activities shall not constitute a breach of this Article III:
(a) General Solicitations. General solicitations of employment that are not specifically directed at Restricted Employees, including, without limitation, public job postings, advertisements placed in newspapers, trade publications, or on websites of general circulation (including, without limitation, Westmark Health IT, Indeed, and similar employment platforms), and the use of executive search firms or recruiting agencies, in each case so long as Executive does not direct, encourage, or instruct such firms or agencies to target or solicit Restricted Employees specifically.
(b) Former Employees and Service Providers. The solicitation or hiring of any individual who ceased his or her employment or engagement with the Company Group, Buyer, or their Affiliates more than six (6) months prior to the first date of any solicitation or hiring activity by or on behalf of Executive with respect to such individual.
ARTICLE IV — NON-SOLICITATION OF CUSTOMERS AND SUPPLIERS
Section 4.1 — Customer Non-Solicitation
During the Restricted Period, Executive shall not, directly or indirectly, whether on her own behalf or on behalf of any other Person:
(a) solicit, induce, or attempt to solicit or induce any Key Customer to cease doing business with the Company Group, Buyer, or any of their respective Affiliates;
(b) solicit, induce, or attempt to solicit or induce any Key Customer to reduce the amount or scope of business that such Key Customer conducts with the Company Group, Buyer, or any of their respective Affiliates; or
(c) solicit, induce, or attempt to solicit or induce any Key Customer to divert, redirect, or transfer any business from the Company Group, Buyer, or any of their respective Affiliates to any Competing Enterprise or to any other Person that is not a member of the Company Group, Buyer, or their Affiliates.
Executive acknowledges that the relationships between the Company Group and its Key Customers are among the most valuable assets being acquired by Buyer in the Merger, that Executive has had significant contact with and knowledge of many Key Customers by virtue of her role as Chief Financial Officer, and that the restrictions set forth in this Section 4.1 are reasonable and necessary to protect the legitimate business interests of Buyer and the Company Group, including the goodwill associated with such customer relationships.
Section 4.2 — Supplier Non-Solicitation
During the Restricted Period, Executive shall not, directly or indirectly, whether on her own behalf or on behalf of any other Person:
(a) solicit, induce, or attempt to solicit or induce any Key Supplier to cease doing business with the Company Group, Buyer, or any of their respective Affiliates; or
(b) solicit, induce, or attempt to solicit or induce any Key Supplier to alter, modify, or terminate the terms of its relationship with the Company Group, Buyer, or any of their respective Affiliates in a manner adverse to the interests of the Company Group, Buyer, or their Affiliates, including, without limitation, by increasing prices, reducing service levels, or imposing more restrictive terms.
Executive acknowledges that the Company Group's relationships with its Key Suppliers are critical to the ongoing operation of the Business and that disruption of such relationships could cause material harm to Buyer and the Company Group.
ARTICLE V — CONFIDENTIALITY
Section 5.1 — Confidentiality Obligations
Executive acknowledges that, by virtue of her service as Chief Financial Officer of Cloudium, she has had and will continue to have access to Confidential Information of the Company Group, Buyer, and their respective Affiliates. Executive further acknowledges that the Confidential Information is valuable and proprietary, that the unauthorized disclosure or use of such information would cause irreparable harm to Buyer and the Company Group, and that the protection of such Confidential Information is essential to the preservation of the value of the Business acquired by Buyer in the Merger.
Accordingly, Executive shall not, at any time (whether during or after the Restricted Period), directly or indirectly, use, disclose, publish, communicate, or otherwise make available to any third party any Confidential Information for any purpose, except:
(a) in connection with the proper performance of Executive's duties and responsibilities to the Company Group, Buyer, or their respective successors and assigns during Executive's employment;
(b) as required by applicable law, rule, regulation, or valid legal process (including, without limitation, a subpoena, civil investigative demand, or order of a court or governmental authority of competent jurisdiction), provided that Executive shall, to the extent permitted by applicable law, (i) give prompt written notice to Buyer of such requirement prior to any disclosure, (ii) reasonably cooperate with Buyer in seeking a protective order or other appropriate remedy to limit or prevent such disclosure, and (iii) disclose only that portion of the Confidential Information that is legally required to be disclosed; or
(c) with the prior written consent of Buyer, which consent may be granted or withheld in Buyer's sole discretion.
Executive's obligations under this Section 5.1 shall survive the expiration or termination of this Agreement and shall continue in perpetuity with respect to trade secrets (to the extent protected as such under applicable law) and for a period of five (5) years following the termination of Executive's employment with the Company Group with respect to all other Confidential Information.
Section 5.2 — Return of Materials
Upon the termination of Executive's employment with the Company Group for any reason (whether voluntary or involuntary), or at any time upon Buyer's written request, Executive shall promptly (and in any event within ten (10) business days):
(a) return to the Company Group all documents, records, files, notes, memoranda, reports, correspondence, data, computer files, software, hardware, access devices, keys, access cards, and other materials (in any form or medium, whether physical or electronic) containing, reflecting, or derived from Confidential Information that are in Executive's possession, custody, or control; and
(b) permanently delete and destroy all electronic copies of Confidential Information stored on any personal devices, cloud storage accounts, email accounts, or other systems owned or controlled by Executive, and provide written certification of such deletion and destruction to Buyer upon request.
Notwithstanding the foregoing, Executive may retain (i) personal copies of documents reflecting Executive's own compensation, benefits, and tax records, and (ii) copies of this Agreement and any other agreements between Executive and the Company Group or Buyer.
Section 5.3 — Defend Trade Secrets Act Notice
In accordance with the Defend Trade Secrets Act of 2016 (18 U.S.C. § 1833(b)), Executive is hereby notified as follows:
An individual shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that: (a) is made (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (b) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.
An individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual: (a) files any document containing the trade secret under seal; and (b) does not disclose the trade secret, except pursuant to court order.
Nothing in this Agreement is intended to conflict with, or shall be construed as conflicting with, the protections provided by 18 U.S.C. § 1833(b) or any other applicable whistleblower protection law. Furthermore, nothing in this Agreement shall prohibit or restrict Executive from (a) reporting possible violations of law or regulation to any governmental agency or regulatory authority, including the Securities and Exchange Commission, the Department of Justice, the Commodity Futures Trading Commission, the Equal Employment Opportunity Commission, or any other federal, state, or local governmental agency, (b) making disclosures protected under the whistleblower provisions of applicable law, or (c) cooperating with any investigation conducted by any governmental agency. Executive shall not be required to notify Buyer of any such report, disclosure, or cooperation.
ARTICLE VI — NON-DISPARAGEMENT
Section 6.1 — Executive Non-Disparagement
During the Restricted Period and for a period of two (2) years following the expiration of the Restricted Period (i.e., through July 9, 2028), Executive shall not make or publish, or cause to be made or published, any statement, whether written or oral, including, without limitation, through any social media platform, website, blog, podcast, interview, or public forum, that disparages, defames, or casts in a negative light the Company Group, Buyer, any of their respective Affiliates, or any of their respective current or former officers, directors, partners, members, managers, employees, agents, products, services, or business practices.
Section 6.2 — Buyer Non-Disparagement
During the same period described in Section 6.1, Buyer shall instruct its senior officers (defined for purposes of this Section 6.2 as the Managing Partner and the partners and principals of Buyer's general partner, Solara Fund VI GP LLC) not to make or publish, or cause to be made or published, any statement, whether written or oral, that disparages or defames Executive. The Parties acknowledge and agree that this obligation shall not restrict statements made in good faith by any Person in connection with (a) legal proceedings, arbitrations, or mediations, (b) regulatory inquiries or investigations, (c) internal investigations conducted by or on behalf of Buyer or the Company Group, or (d) routine business discussions and performance evaluations conducted in the ordinary course.
Section 6.3 — Exceptions
Nothing in this Article VI shall restrict or impede either Party from:
(a) complying with any applicable law, rule, regulation, or valid legal process, including responding to a subpoena, civil investigative demand, or order of a court or governmental authority of competent jurisdiction;
(b) providing truthful testimony or statements in any judicial, arbitral, administrative, or regulatory proceeding, including depositions, hearings, trials, and governmental investigations;
(c) making truthful statements in connection with the enforcement of any right under this Agreement, the Merger Agreement, or any other agreement between the Parties; or
(d) making truthful statements to any governmental authority in connection with any report, filing, or disclosure required by applicable law.
ARTICLE VII — INTELLECTUAL PROPERTY AND WORK PRODUCT
Section 7.1 — Assignment of Work Product
Executive acknowledges and agrees that all inventions, discoveries, developments, improvements, innovations, works of authorship (including, without limitation, software code, documentation, manuals, specifications, presentations, and training materials), designs, logos, trademarks, trade secrets, methods, processes, techniques, formulas, algorithms, data compilations, and all other intellectual property or proprietary rights (whether or not patentable, copyrightable, or otherwise protectable) that were or are created, conceived, developed, or reduced to practice by Executive, solely or jointly with others, during the course of Executive's employment with the Company Group and relating to the Business or resulting from the use of the Company Group's resources, facilities, or Confidential Information (collectively, "Work Product") shall be and remain the sole and exclusive property of the Company Group (or its successors and assigns). To the extent any Work Product constitutes a "work made for hire" under the United States Copyright Act (17 U.S.C. § 101 et seq.), Executive acknowledges that such Work Product is a work made for hire owned by the Company Group. To the extent any Work Product does not qualify as a work made for hire, Executive hereby irrevocably assigns, transfers, and conveys to the Company Group all of Executive's right, title, and interest (including all intellectual property rights) in and to such Work Product.
Executive hereby waives and agrees never to assert any and all moral rights (including, without limitation, rights of attribution, integrity, disclosure, and withdrawal, and any other rights that may be known as or referred to as "droit moral" or similar rights) that Executive may have in or with respect to any Work Product, to the fullest extent permitted by applicable law.
Section 7.2 — Cooperation
Executive agrees to cooperate fully with the Company Group, Buyer, and their respective Affiliates, successors, and assigns, both during and after Executive's employment, in connection with the prosecution, defense, maintenance, and enforcement of any intellectual property rights relating to any Work Product, including, without limitation:
(a) executing and delivering all applications, assignments, declarations, oaths, and other documents and instruments as may be reasonably necessary to vest, perfect, confirm, record, or enforce the Company Group's rights in and to any Work Product;
(b) providing truthful testimony and making appearances as may be reasonably necessary in connection with any legal or administrative proceeding relating to any Work Product; and
(c) performing such other acts as may be reasonably requested by Buyer or the Company Group to carry out the purposes of this Article VII.
Buyer shall reimburse Executive for reasonable out-of-pocket expenses incurred in connection with Executive's cooperation obligations under this Section 7.2, provided that Executive obtains Buyer's prior written approval for any expenses in excess of Five Thousand Dollars ($5,000). If Executive's cooperation is requested after the termination of Executive's employment, Buyer shall compensate Executive at a reasonable hourly rate for time spent in excess of eight (8) hours per calendar quarter.
ARTICLE VIII — REPRESENTATIONS AND WARRANTIES
Section 8.1 — Executive's Representations
Executive hereby represents and warrants to Buyer as follows:
(a) No Conflicts. The execution, delivery, and performance by Executive of this Agreement does not and will not (i) conflict with, result in a breach of, or constitute a default under any agreement, contract, commitment, obligation, or arrangement (whether written or oral) to which Executive is a party or by which Executive is bound, including, without limitation, any prior non-competition, non-solicitation, or confidentiality agreement, (ii) violate any order, judgment, injunction, award, or decree of any court, arbitrator, or governmental or regulatory body binding on Executive, or (iii) violate any applicable law, rule, or regulation.
(b) Legal Counsel. Executive has had a full and adequate opportunity to consult with independent legal counsel of Executive's own choosing regarding the terms, conditions, and legal effect of this Agreement, and Executive has either consulted with such counsel or voluntarily elected not to do so.
(c) Understanding and Assent. Executive has carefully read and fully understands each and every provision of this Agreement, has had a reasonable period of time to consider its terms, and voluntarily agrees to be bound by the terms and conditions set forth herein. Executive acknowledges that she is executing this Agreement of her own free will, without coercion, duress, or undue influence.
(d) Reasonableness of Restrictions. Executive acknowledges and agrees that the restrictive covenants set forth in this Agreement, including the restrictions on competition, solicitation, and use of Confidential Information, are reasonable in scope, duration, and geographic extent, and are necessary to protect the legitimate business interests of Buyer and the Company Group, including, without limitation, the goodwill of the Business, the value of the Confidential Information, and the stability of the Company Group's workforce and customer and supplier relationships.
(e) Adequate Consideration. Executive acknowledges and agrees that the merger consideration payable in respect of Executive's shares of Cloudium common stock and other equity securities, the treatment of Executive's equity-based awards in connection with the Merger, and the opportunity for continued employment with the surviving entity following the Closing constitute adequate, independent, and sufficient consideration for Executive's covenants and agreements contained in this Agreement.
Section 8.2 — Buyer's Representations
Buyer hereby represents and warrants to Executive as follows:
(a) Organization and Good Standing. Buyer is a limited partnership duly organized, validly existing, and in good standing under the laws of the State of Delaware. Buyer's general partner, Solara Fund VI GP LLC, is a limited liability company duly organized, validly existing, and in good standing under the laws of the State of Delaware.
(b) Authority. Buyer has full limited partnership power and authority to execute, deliver, and perform this Agreement and to consummate the transactions contemplated hereby. The execution, delivery, and performance of this Agreement by Buyer have been duly authorized by all necessary action on the part of Buyer, including all necessary action by its general partner, Solara Fund VI GP LLC.
(c) Enforceability. This Agreement has been duly executed and delivered by Buyer and constitutes the legal, valid, and binding obligation of Buyer, enforceable against Buyer in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and similar laws affecting creditors' rights generally, and subject to general principles of equity (whether considered in a proceeding in equity or at law).
(d) No Conflicts. The execution, delivery, and performance of this Agreement by Buyer does not and will not conflict with, result in a breach of, or constitute a default under (i) the organizational documents of Buyer or its general partner, (ii) any agreement, contract, or instrument to which Buyer is a party or by which Buyer is bound, or (iii) any applicable law, rule, regulation, order, or decree.
ARTICLE IX — REMEDIES
Section 9.1 — Equitable Relief
Executive acknowledges and agrees that the covenants and agreements contained in Articles II, III, IV, and V of this Agreement are essential to protect the legitimate business interests of Buyer and the Company Group, that such covenants and agreements are supported by adequate consideration, and that a breach or threatened breach by Executive of any of the provisions of Articles II, III, IV, or V would cause irreparable injury and harm to Buyer and the Company Group that would not be adequately compensable by an award of money damages alone. Accordingly, in addition to all other remedies available at law or in equity (including, without limitation, the recovery of damages), Buyer and the Company Group shall be entitled to seek and obtain temporary, preliminary, and permanent injunctive relief, specific performance, and other equitable remedies to enforce the provisions of this Agreement from any court of competent jurisdiction, without the necessity of (a) posting any bond or other security (which Executive hereby waives), (b) proving actual damages, or (c) proving that money damages would be an inadequate remedy. Executive agrees not to raise as a defense or objection to the granting of such relief that Buyer or the Company Group has an adequate remedy at law.
Section 9.2 — Extension of Restricted Period
If Executive violates any of the restrictive covenants set forth in Articles II, III, or IV of this Agreement, the Restricted Period applicable to such covenant shall automatically be extended by a period of time equal to the duration of such violation, commencing on the date such violation is cured or ceases, so that the applicable restrictive covenants operate for their full intended duration. The determination of the duration of any violation shall be made by a court of competent jurisdiction or by agreement of the Parties.
Section 9.3 — Cumulative Remedies
The rights and remedies provided in this Article IX and elsewhere in this Agreement shall be cumulative and in addition to (and not in lieu of or exclusive of) any and all other rights and remedies that may be available to Buyer or the Company Group at law, in equity, or otherwise, including, without limitation, claims for breach of contract, misappropriation of trade secrets, tortious interference, unfair competition, and any other applicable cause of action. No exercise of, or failure to exercise, any right or remedy shall constitute a waiver of any other right or remedy.
ARTICLE X — GENERAL PROVISIONS
Section 10.1 — Effectiveness and Termination
This Agreement shall become effective upon the Closing (the "Effective Date"). In the event the Merger Agreement is terminated in accordance with its terms prior to the Closing, this Agreement shall automatically terminate and be of no further force or effect, and neither Party shall have any obligation or liability to the other Party under this Agreement. For the avoidance of doubt, the obligations of the Parties under this Agreement that by their terms survive the expiration of the Restricted Period (including, without limitation, the obligations under Article V (Confidentiality), Article VI (Non-Disparagement), and Article VII (Intellectual Property and Work Product)) shall continue in full force and effect in accordance with their respective terms following the expiration of the Restricted Period.
Section 10.2 — Severability / Judicial Modification
The Parties intend that the covenants and agreements contained in this Agreement shall be deemed to be a series of separate covenants and agreements, each of which is independent of the others. If any provision of this Agreement, or the application thereof to any Person or circumstance, is found by any court of competent jurisdiction to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision hereof or the application of such provision to any other Person or circumstance, and this Agreement shall be construed as if such invalid, illegal, or unenforceable provision had never been contained herein. In particular, if any court of competent jurisdiction determines that the Restricted Period is too long, that the Restricted Territory is too broad, or that the scope of prohibited activities is too extensive, the Parties intend that such court shall have the authority and is hereby expressly authorized and directed to reform and modify the offending provision (and only to the minimum extent necessary) to render it valid, legal, and enforceable to the maximum extent permitted under applicable law, and to enforce such provision as so reformed and modified. The Parties acknowledge that they have carefully considered the scope of the restrictions contained herein and agree that such restrictions are reasonable and necessary to protect the legitimate business interests of Buyer and the Company Group.
Section 10.3 — Governing Law
This Agreement shall be governed by, and construed and enforced in accordance with, the internal laws of the State of Delaware, without giving effect to any choice of law or conflict of law rules or principles (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware.
Section 10.4 — Dispute Resolution / Jurisdiction
Any action, suit, or proceeding arising out of, relating to, or in connection with this Agreement or the transactions contemplated hereby, including any action seeking equitable relief under Article IX, shall be brought exclusively in the Court of Chancery of the State of Delaware (or, if the Court of Chancery of the State of Delaware declines to accept jurisdiction over any such action, suit, or proceeding, any state court of the State of Delaware or any federal court of the United States of America sitting in the State of Delaware). Each Party hereby irrevocably and unconditionally (a) submits to the exclusive personal jurisdiction of such courts for the purpose of any such action, suit, or proceeding, (b) agrees not to commence any such action, suit, or proceeding except in such courts, (c) waives, and agrees not to assert, by way of motion, as a defense, or otherwise, in any such action, suit, or proceeding, any claim that such Party is not subject personally to the jurisdiction of such courts, that its property is exempt or immune from attachment or execution, that such action, suit, or proceeding is brought in an inconvenient forum, that the venue of such action, suit, or proceeding is improper, or that this Agreement or the subject matter hereof may not be enforced in or by such courts, and (d) agrees that service of process in any such action, suit, or proceeding may be made by delivery of a copy of such process by hand delivery, overnight courier, or certified mail (return receipt requested) to such Party at the address set forth in Section 10.9, and such service shall be deemed effective upon receipt.
Section 10.5 — Waiver of Jury Trial
EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING, CLAIM, OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF, RELATING TO, OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, OR THE ACTIONS OF EITHER PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE, OR ENFORCEMENT HEREOF. EACH PARTY (A) CERTIFIES THAT NO REPRESENTATIVE OF THE OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF ANY ACTION OR PROCEEDING, SEEK TO ENFORCE THE FOREGOING WAIVER, AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTY HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.5.
Section 10.6 — Entire Agreement
This Agreement, together with the Merger Agreement and the other agreements, documents, instruments, and certificates contemplated thereby (collectively, the "Transaction Documents"), constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings, negotiations, discussions, representations, and warranties (whether written or oral) between the Parties relating to the restrictive covenants and other matters set forth herein. For the avoidance of doubt, this Agreement does not supersede or limit any obligations of Executive under any separate employment agreement, offer letter, equity award agreement, or similar agreement with the Company Group or Buyer, except to the extent that any restrictive covenant provisions in such agreements are expressly superseded by the provisions of this Agreement.
Section 10.7 — Amendment and Waiver
No amendment, modification, supplement, restatement, or waiver of any provision of this Agreement shall be valid or effective unless set forth in a written instrument duly executed by both Parties (or, in the case of a waiver, by the Party granting such waiver). No failure or delay by either Party in exercising any right, power, privilege, or remedy under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power, privilege, or remedy preclude any other or further exercise thereof or the exercise of any other right, power, privilege, or remedy. The rights and remedies provided in this Agreement are cumulative and are not exclusive of any rights or remedies provided by law.
Section 10.8 — Assignment
Executive may not assign, delegate, or otherwise transfer this Agreement or any of Executive's rights or obligations hereunder without the prior written consent of Buyer, and any attempted assignment, delegation, or transfer in violation of this Section 10.8 shall be null and void. Buyer may assign this Agreement, in whole or in part, without Executive's consent, to (a) any Affiliate of Buyer, (b) any successor in interest (whether by merger, consolidation, acquisition, or otherwise) to all or substantially all of the business or assets of Buyer or the Company Group to which this Agreement relates, or (c) any lender to or investor in Buyer or any of its Affiliates, in each case as collateral security for the obligations of Buyer or its Affiliates. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns.
Section 10.9 — Notices
All notices, requests, demands, consents, waivers, and other communications required or permitted under this Agreement shall be in writing and shall be deemed duly given and effective (a) when delivered by hand, (b) one (1) business day after being sent by nationally recognized overnight courier service (with charges prepaid and written confirmation of delivery), or (c) three (3) business days after being sent by certified mail, return receipt requested, postage prepaid, in each case to the applicable Party at the following address (or at such other address as such Party may designate by written notice to the other Party in accordance with this Section 10.9):
If to Buyer:
Solara Digital Infrastructure Fund VI LP c/o Solara Digital GP LLC 1200 Market Street, Suite 3400 Wilmington, DE 19801
Attention: Marcus Elliston, Managing Partner
Telephone: (302) 555-4800
Email: melliston@solaradigital.com
With a copy (which shall not constitute notice) to:
Calderwood & Harkness LLP 599 Lexington Avenue New York, NY 10022
Attention: Harrison Wexford
Telephone: (212) 555-7200
Email: hwexford@calderwoodharkness.com
If to Executive:
Sienna Whitfield At the address on file with the Company
With a copy (which shall not constitute notice) to Executive's counsel, if designated by Executive in a written notice delivered to Buyer in accordance with this Section 10.9.
Section 10.10 — Counterparts
This Agreement may be executed in two (2) or more counterparts (including by facsimile or electronic transmission in portable document format (.pdf)), each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. Signatures delivered by facsimile or electronic transmission shall be deemed to be original signatures for all purposes.
Section 10.11 — Third-Party Beneficiaries
The members of the Company Group (including the Company as the surviving entity in the Merger), the Affiliates of Buyer, and their respective successors and assigns are intended to be, and shall be deemed, express third-party beneficiaries of this Agreement and shall be entitled to enforce the provisions hereof directly against Executive to the same extent as if they were parties hereto. Except as expressly set forth in this Section 10.11, nothing in this Agreement, express or implied, is intended to or shall confer upon any Person other than the Parties and the express third-party beneficiaries identified herein any rights, benefits, or remedies of any nature whatsoever under or by reason of this Agreement.
Section 10.12 — Relationship to Merger Agreement
The Parties acknowledge and agree that this Agreement is entered into pursuant to and in connection with the Merger Agreement and is an integral part of the transactions contemplated thereby. Nothing in this Agreement shall be construed to limit, modify, supersede, or otherwise affect the rights and obligations of the Parties under the Merger Agreement or any other Transaction Document, including, without limitation, the indemnification provisions of Article IX of the Merger Agreement. For informational purposes, the indemnification provisions of the Merger Agreement provide for, among other things, (a) a general indemnification cap equal to fifteen percent (15%) of the aggregate deal value (approximately One Billion Twenty Million Dollars ($1,020,000,000)), (b) an escrow fund in the amount of eight percent (8%) of the aggregate deal value (approximately Five Hundred Forty-Four Million Dollars ($544,000,000)) to be held by Cobalt Trust Company, as escrow agent, pursuant to the Escrow Agreement dated as of the Closing Date, (c) a tipping basket of zero point seventy-five percent (0.75%) of the aggregate deal value (approximately Fifty-One Million Dollars ($51,000,000)), and (d) a survival period of eighteen (18) months following the Closing Date (expiring on January 9, 2026) with respect to general representations and warranties. The foregoing description is provided for reference purposes only and is qualified in its entirety by reference to the full text of the Merger Agreement.
Section 10.13 — Construction
This Agreement has been negotiated by the Parties hereto and their respective legal counsel. In the event of any ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties, and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any provision of this Agreement. The headings and captions in this Agreement are for convenience of reference only and shall not affect the interpretation or construction of this Agreement. As used in this Agreement, (a) the words "include," "includes," and "including" shall be deemed to be followed by the phrase "without limitation," (b) the word "or" is not exclusive, (c) the words "herein," "hereof," "hereby," "hereto," and "hereunder" refer to this Agreement as a whole, and (d) unless the context otherwise requires, references to articles, sections, and subsections refer to articles, sections, and subsections of this Agreement.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the Parties have executed this Non-Competition and Non-Solicitation Agreement as of the date first written above.
SOLARA DIGITAL INFRASTRUCTURE FUND VI LP
By: Solara Fund VI GP LLC, its General Partner
By: ________
Name: Marcus Elliston
Title: Managing Partner
Date: January 22, 2024
EXECUTIVE:
________________________________________
Sienna Whitfield
Date: January 22, 2024
ACKNOWLEDGMENT
STATE OF DELAWARE
COUNTY OF NEW CASTLE
On this 22nd day of January, 2024, before me, the undersigned notary public, personally appeared Marcus Elliston, known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument, and acknowledged to me that he executed the same in his capacity as Managing Partner of Solara Fund VI GP LLC, the general partner of Solara Digital Infrastructure Fund VI LP, and that by his signature on the instrument, the entity upon behalf of which the person acted executed the instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal on the date set forth above.
________________________________________
Notary Public, State of Delaware Name (printed): ______ My Commission Expires: ____
[SEAL]
STATE OF CALIFORNIA
CITY AND COUNTY OF SAN FRANCISCO
On this 22nd day of January, 2024, before me, the undersigned notary public, personally appeared Sienna Whitfield, known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument, and acknowledged to me that she executed the same in her individual capacity, and that by her signature on the instrument, the person executed the instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal on the date set forth above.
________________________________________