ROLLOVER AGREEMENT
Execution Version
January 22, 2024
ROLLOVER AGREEMENT
This ROLLOVER AGREEMENT (this "Agreement") is entered into as of January 22, 2024, by and between:
(1) Solara Digital Infrastructure Fund VI LP, a Delaware limited partnership ("Parent" or "Fund VI"); and
(2) Jonathan Hargrove, an individual ("Rollover Participant").
Each of Parent and the Rollover Participant is sometimes referred to herein individually as a "Party" and collectively as the "Parties."
RECITALS
WHEREAS, Parent, Stratos Merger Sub Inc., a Delaware corporation and a direct, wholly owned subsidiary of Parent ("Merger Sub"), and Cloudium Technologies plc, a public limited company incorporated under the laws of England and Wales (Company Number 09734521) (the "Company" or "Cloudium"), have entered into that certain Agreement and Plan of Merger, dated as of January 22, 2024 (as it may be amended, supplemented, or modified from time to time in accordance with its terms, the "Merger Agreement"), pursuant to which Merger Sub will merge with and into the Company (the "Merger"), with the Company surviving the Merger as a wholly owned subsidiary of Parent;
WHEREAS, the Merger is structured as a reverse triangular merger under the General Corporation Law of the State of Delaware (the "DGCL"), and pursuant to the Merger Agreement, at the Effective Time (as defined in the Merger Agreement), each share of common stock, par value $0.001 per share, of the Company (the "Company Common Stock") issued and outstanding immediately prior to the Effective Time will be converted into the right to receive $36.92 per share in cash, without interest (the "Per Share Merger Consideration"), except as otherwise provided in the Merger Agreement and in this Agreement;
WHEREAS, the Company's shares of Company Common Stock are listed on the Nasdaq Global Select Market under the ticker symbol "CLDM," and as of the date hereof, there are 184,200,000 shares of Company Common Stock issued and outstanding;
WHEREAS, the Rollover Participant is the Chief Executive Officer of the Company and is the beneficial owner (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended) of 7,736,400 shares of Company Common Stock, representing approximately 4.2% of the outstanding shares of Company Common Stock (such shares, the "Total Rollover Participant Shares");
WHEREAS, as a condition to, and as a material inducement for, Parent's willingness to enter into the Merger Agreement and to consummate the transactions contemplated thereby, the Rollover Participant has agreed to contribute a portion of his Total Rollover Participant Shares to Parent (or a designated subsidiary thereof) in exchange for equity interests in the Surviving Entity (as defined herein), on the terms and subject to the conditions set forth in this Agreement;
WHEREAS, concurrently with the execution and delivery of this Agreement, the Rollover Participant is entering into a Voting and Support Agreement, dated as of the date hereof, in favor of Parent (the "Voting and Support Agreement"), pursuant to which the Rollover Participant has agreed, among other things, to vote all of his shares of Company Common Stock in favor of the approval of the Merger Agreement and the transactions contemplated thereby and against any competing proposal;
WHEREAS, concurrently with the execution and delivery of this Agreement, Pinnacle Growth Ventures LLC, a Delaware limited liability company, is entering into a separate Rollover Agreement with Parent, dated as of the date hereof (the "Pinnacle Rollover Agreement"), with respect to a portion of its shares of Company Common Stock; and
WHEREAS, capitalized terms used and not otherwise defined herein shall have the respective meanings ascribed to such terms in the Merger Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants, agreements, representations, and warranties set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, 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:
"Cash-Out Shares" means the number of shares of Company Common Stock constituting the Total Rollover Participant Shares minus the Rollover Shares, being 3,868,200 shares of Company Common Stock (representing 50% of the 7,736,400 Total Rollover Participant Shares), which shares shall be converted into the right to receive the Per Share Merger Consideration at the Closing in accordance with the terms of the Merger Agreement.
"Closing" means the closing of the Merger as defined in, and pursuant to, the Merger Agreement.
"Closing Date" means the date on which the Closing occurs. The target Closing Date is on or before June 30, 2024 (the "Outside Date" under the Merger Agreement).
"Code" means the Internal Revenue Code of 1986, as amended from time to time, and the rules and regulations promulgated thereunder.
"Effective Time" means the effective time of the Merger as set forth in the Certificate of Merger filed with the Secretary of State of the State of Delaware in accordance with the DGCL and the Merger Agreement, which shall be 11:59 p.m. Eastern Time on the Closing Date, or such other time as may be agreed by the parties to the Merger Agreement and specified in the Certificate of Merger.
"Equity Commitment Letter" means the Equity Commitment Letter, dated as of January 22, 2024, from Parent to Merger Sub, pursuant to which Parent has committed to provide equity financing in the aggregate amount of $2,832,888,096 to fund the Merger and the transactions contemplated by the Merger Agreement, subject to the terms and conditions set forth therein.
"Governing Documents" means the limited partnership agreement, operating agreement, stockholders' agreement, or other similar organizational or governance documents governing the Surviving Entity or the holding vehicle through which the Rollover Equity Interests are issued, as applicable, in each case as delivered to the Rollover Participant in accordance with Section 2.2 hereof.
"Merger Agreement" has the meaning set forth in the Recitals.
"Per Share Merger Consideration" means $36.92 per share of Company Common Stock in cash, without interest, as set forth in the Merger Agreement.
"Rollover Contribution" means the contribution, assignment, transfer, and delivery of the Rollover Shares by the Rollover Participant to Parent (or its designated subsidiary) immediately prior to the Effective Time, in accordance with the terms and conditions of this Agreement.
"Rollover Equity Interests" means the equity interests in the Surviving Entity (or a holding entity designated by Parent in accordance with the terms hereof) to be received by the Rollover Participant in exchange for the Rollover Contribution, as more fully described in Section 2.2 and Exhibit A hereto.
"Rollover Percentage" means 50% of the Total Rollover Participant Shares.
"Rollover Shares" means 3,868,200 shares of Company Common Stock (being 50% of the 7,736,400 Total Rollover Participant Shares), as further described on Schedule A hereto.
"Rollover Value" means the aggregate value of the Rollover Shares, calculated as the product of (a) the number of Rollover Shares (3,868,200) multiplied by (b) the Per Share Merger Consideration ($36.92), which equals approximately $142,814,544.
"Securities Act" means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
"Surviving Entity" means Cloudium Technologies plc, as the surviving corporation in the Merger, which will become a wholly owned subsidiary of Parent immediately following the Effective Time.
"Total Rollover Participant Shares" means the 7,736,400 shares of Company Common Stock beneficially owned by the Rollover Participant as of the date hereof, as set forth on Schedule A hereto.
Section 1.2 — Other Definitional Provisions
Unless the context otherwise requires, (a) words importing the singular include the plural and vice versa, (b) words importing any gender include each other gender, (c) references to any statute, rule, or regulation include any amendments, modifications, or successors thereto, (d) references to "dollars" or "$" are to United States dollars, (e) references to "business days" mean any day other than a Saturday, Sunday, or a day on which commercial banks in New York, New York or Wilmington, Delaware are authorized or required by law to close, and (f) the words "include," "includes," and "including" shall be deemed to be followed by the phrase "without limitation."
ARTICLE II — ROLLOVER CONTRIBUTION
Section 2.1 — Agreement to Contribute Rollover Shares
(a) At or immediately prior to the Effective Time, the Rollover Participant shall contribute, assign, transfer, convey, and deliver to Parent (or to such subsidiary of Parent as Parent may designate by written notice to the Rollover Participant delivered no later than five (5) business days prior to the Closing Date) all of the Rollover Participant's right, title, and interest in and to the Rollover Shares, consisting of 3,868,200 shares of Company Common Stock, free and clear of all liens, claims, pledges, security interests, charges, options, encumbrances, and restrictions of any kind or nature whatsoever (other than restrictions under applicable federal and state securities laws and, to the extent applicable, the Voting and Support Agreement). Such contribution shall be made by delivery of a duly executed stock power in the form attached hereto as Schedule B, together with such other instruments of transfer as Parent may reasonably request to effect the valid transfer of the Rollover Shares.
(b) The Rollover Contribution shall occur immediately prior to the Effective Time and shall be conditioned upon the substantially simultaneous consummation of the Merger. In no event shall the Rollover Participant be required to consummate the Rollover Contribution unless and until all conditions to the Closing under the Merger Agreement (other than those conditions that by their nature are to be satisfied at the Closing, each of which shall be capable of being satisfied at the Closing) have been satisfied or waived.
(c) For the avoidance of doubt, the Rollover Shares shall not be converted into the right to receive the Per Share Merger Consideration or any other cash or non-cash consideration payable under the Merger Agreement. Instead, the Rollover Participant shall receive the Rollover Equity Interests as set forth in Section 2.2. The Rollover Shares shall be excluded from the shares of Company Common Stock that are converted into the Per Share Merger Consideration at the Effective Time, and neither the Company, the exchange agent, nor any other person shall be obligated to pay the Per Share Merger Consideration with respect to the Rollover Shares.
Section 2.2 — Issuance of Rollover Equity Interests
(a) In consideration of, and in exchange for, the Rollover Contribution, at the Effective Time (or as promptly as practicable thereafter), Parent (or its designated subsidiary) shall issue to the Rollover Participant the Rollover Equity Interests, which shall have a fair value equal to the Rollover Value (approximately $142,814,544), determined on the basis of the Per Share Merger Consideration of $36.92 per Rollover Share. The Rollover Equity Interests shall represent equity interests in the Surviving Entity or a holding vehicle established by Parent in connection with the Merger, and such equity interests shall be valued on a dollar-for-dollar basis at the same price per share as the Per Share Merger Consideration.
(b) The Rollover Equity Interests shall be in the form of limited partnership interests, membership interests, or common equity interests (including, without limitation, Class A limited partnership interests or Class B common units) in the Surviving Entity or a holding vehicle designated by Parent, as determined by Parent in its sole and absolute discretion; provided, however, that the economic terms of such Rollover Equity Interests (including, without limitation, valuation, distribution rights, and liquidation preferences) shall be consistent with the terms set forth in this Agreement and in the Rollover Equity Interests Term Sheet attached hereto as Exhibit A.
(c) Parent shall deliver, or cause to be delivered, to the Rollover Participant final copies of the Governing Documents governing the entity in which the Rollover Equity Interests are to be issued no later than five (5) business days prior to the Closing Date. The Governing Documents shall be reasonably consistent in all material respects with the economic terms set forth in this Agreement and in Exhibit A hereto, and shall contain such other terms and conditions as are customary for private equity-sponsored portfolio company governance arrangements. The Rollover Participant shall have a reasonable opportunity to review the Governing Documents and to consult with his legal and financial advisors regarding the terms thereof.
(d) Parent shall cause the issuance of the Rollover Equity Interests to be duly reflected in the books and records of the issuing entity and shall deliver to the Rollover Participant such certificates, unit certificates, or other evidence of ownership as may be customary or required under the applicable Governing Documents.
Section 2.3 — Treatment of Cash-Out Shares
(a) The Cash-Out Shares, consisting of 3,868,200 shares of Company Common Stock (being the balance of the Total Rollover Participant Shares that are not subject to the Rollover Contribution), shall be treated in all respects in the same manner as all other shares of Company Common Stock held by stockholders of the Company under the Merger Agreement. At the Effective Time, each Cash-Out Share shall be converted into the right to receive the Per Share Merger Consideration of $36.92 per share in cash, without interest, resulting in aggregate cash proceeds to the Rollover Participant of approximately $142,814,544 with respect to the Cash-Out Shares.
(b) The cash merger consideration payable in respect of the Cash-Out Shares shall be paid in accordance with the terms and procedures set forth in the Merger Agreement, including through the exchange procedures administered by Cascade Corporate Services Inc., acting as exchange agent and transfer agent (the "Exchange Agent"). The Rollover Participant shall comply with all applicable exchange procedures, including the delivery of a duly completed and validly executed letter of transmittal and such other documents as may be required by the Exchange Agent.
(c) The Rollover Participant acknowledges that the aggregate consideration to be received by him in connection with the Merger and the transactions contemplated hereby shall consist of (i) the Rollover Equity Interests having a value of approximately $142,814,544 (in respect of the Rollover Shares) and (ii) cash of approximately $142,814,544 (in respect of the Cash-Out Shares), for an aggregate value of approximately $285,629,088 with respect to all 7,736,400 Total Rollover Participant Shares.
Section 2.4 — Tax Treatment
(a) The Parties intend that the Rollover Contribution shall be treated for U.S. federal income tax purposes as a contribution of property by the Rollover Participant to the Surviving Entity (or Parent's designated subsidiary) in exchange for an equity interest therein, and that such exchange shall qualify as a tax-free contribution under Section 351 of the Code or, to the extent applicable, as part of a reorganization under Section 368(a)(2)(E) of the Code (a "reverse triangular merger" reorganization). The Parties acknowledge that the intended tax treatment has been analyzed by Leonard Cross, specialist tax partner at Calderwood & Harkness LLP, and by Glenmore Thornton LLP, tax advisors to Parent, and that such analysis supports the qualification of the Rollover Contribution under the foregoing provisions of the Code, subject to the customary assumptions and limitations set forth therein.
(b) Each Party shall file all tax returns, schedules, and reports with respect to the Rollover Contribution in a manner consistent with the intended tax treatment set forth in this Section 2.4, and neither Party shall take any position on any tax return, in any tax proceeding, or otherwise that is inconsistent with such intended treatment, unless otherwise required by a final determination (within the meaning of Section 1313(a) of the Code) of a taxing authority.
(c) Nothing in this Section 2.4 shall be construed as a representation or guarantee by either Party that the Rollover Contribution will qualify for tax-free treatment under the Code. The Rollover Participant acknowledges and agrees that he has been advised to consult with his own tax advisors regarding the tax consequences of the Rollover Contribution and the receipt of the Rollover Equity Interests, and that neither Parent nor any of its affiliates, advisors, or representatives has made or is making any representation or warranty regarding the tax treatment of the transactions contemplated hereby.
Section 2.5 — Withholding
(a) Parent (or the Surviving Entity, or any other applicable withholding agent) shall be entitled to deduct and withhold from the Rollover Equity Interests, the cash merger consideration payable in respect of the Cash-Out Shares, or any other amounts otherwise payable or issuable to the Rollover Participant pursuant to this Agreement, such amounts as may be required to be deducted and withheld under the Code, or any provision of applicable state, local, or foreign tax law, with respect to such payment or issuance. To the extent that amounts are so deducted and withheld and remitted to the applicable taxing authority, such amounts shall be treated for all purposes of this Agreement as having been paid or issued to the Rollover Participant.
(b) In order to reduce or eliminate any required withholding, the Rollover Participant shall deliver to Parent a properly completed and duly executed IRS Form W-9 (or any successor form) no later than five (5) business days prior to the Closing Date, together with such other tax forms or certifications as Parent may reasonably request.
ARTICLE III — REPRESENTATIONS AND WARRANTIES OF THE ROLLOVER PARTICIPANT
The Rollover Participant hereby represents and warrants to Parent as follows:
Section 3.1 — Ownership of Shares
(a) The Rollover Participant is the sole record and beneficial owner (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended) of the Total Rollover Participant Shares, consisting of 7,736,400 shares of Company Common Stock, free and clear of all liens, pledges, security interests, charges, claims, options, proxies, voting trusts or agreements, equitable interests, encumbrances, and restrictions of any kind or nature whatsoever, other than (i) restrictions imposed under applicable federal and state securities laws and (ii) restrictions arising under the Voting and Support Agreement.
(b) Except for the Total Rollover Participant Shares, the Rollover Participant does not beneficially own any shares of Company Common Stock or any securities convertible into or exchangeable or exercisable for shares of Company Common Stock. No person other than the Rollover Participant has any right to acquire, vote, or direct the disposition of any of the Total Rollover Participant Shares, and there are no outstanding options, warrants, rights, calls, commitments, or agreements of any character to which the Rollover Participant is a party or by which he is bound relating to the purchase, sale, pledge, or other disposition of any of the Total Rollover Participant Shares (other than this Agreement and the Voting and Support Agreement).
Section 3.2 — Authority; Binding Effect
The Rollover Participant has full legal capacity, power, and authority to execute and deliver this Agreement, to perform his obligations hereunder, and to consummate the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by the Rollover Participant and constitutes a legal, valid, and binding obligation of the Rollover Participant, enforceable against him in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and similar laws of general applicability relating to or affecting the rights of creditors generally, and subject to general equitable principles, whether considered in a proceeding in equity or at law (collectively, the "Bankruptcy and Equity Exceptions").
Section 3.3 — No Conflicts
(a) The execution, delivery, and performance by the Rollover Participant of this Agreement, and the consummation of the transactions contemplated hereby (including the Rollover Contribution), do not and will not (i) violate or conflict with any law, statute, rule, regulation, order, judgment, injunction, or decree of any governmental authority applicable to the Rollover Participant or his Total Rollover Participant Shares, (ii) result in a breach of, or constitute a default (or an event which, with the giving of notice or lapse of time or both, would constitute a default) under, any contract, agreement, indenture, instrument, or obligation to which the Rollover Participant is a party or by which the Rollover Participant or any of his Total Rollover Participant Shares are bound, or (iii) result in the creation or imposition of any lien, claim, pledge, security interest, charge, or encumbrance upon any of the Total Rollover Participant Shares.
(b) No consent, approval, authorization, permit, or order of, or filing, registration, or notification with, any governmental authority or any other third party is required in connection with the execution, delivery, and performance by the Rollover Participant of this Agreement or the consummation of the Rollover Contribution, except as may be required under applicable federal and state securities laws and regulations.
Section 3.4 — Accredited Investor Status
The Rollover Participant is an "accredited investor" within the meaning of Rule 501(a) of Regulation D promulgated under the Securities Act. The Rollover Participant has such knowledge and experience in financial and business matters that he is capable of evaluating the merits and risks of an investment in the Rollover Equity Interests.
Section 3.5 — Investment Intent
(a) The Rollover Equity Interests are being acquired by the Rollover Participant for his own account, for investment purposes only, and not with a view to, or in connection with, any distribution, resale, or other disposition thereof in violation of the Securities Act or any applicable state securities laws. The Rollover Participant does not have any present plan, intention, or arrangement to sell, transfer, assign, pledge, hypothecate, or otherwise dispose of the Rollover Equity Interests, in whole or in part.
(b) The Rollover Participant acknowledges and understands that the Rollover Equity Interests have not been, and will not be, registered under the Securities Act or under any state securities laws, and that the Rollover Equity Interests may not be sold, transferred, offered for sale, pledged, hypothecated, or otherwise disposed of except pursuant to an effective registration statement under the Securities Act and in compliance with applicable state securities laws, or pursuant to an applicable exemption from the registration requirements of the Securities Act and such state securities laws. The Rollover Participant further acknowledges that the certificates or other instruments evidencing the Rollover Equity Interests, if any, will bear appropriate restrictive legends reflecting the foregoing.
Section 3.6 — Sophistication and Due Diligence
(a) The Rollover Participant, in his capacity as the Chief Executive Officer of the Company, has substantial knowledge of and familiarity with the business, operations, financial condition, properties, prospects, and affairs of the Company and its subsidiaries, including, without limitation, Cloudium Technologies UK Ltd. (incorporated in England and Wales), Cloudium Technologies India Pvt. Ltd. (incorporated in India), and Cloudium Solutions GmbH (incorporated in Germany). The Rollover Participant has had full access to, and has reviewed, the books and records of the Company and its subsidiaries to the extent he deemed necessary or appropriate in connection with his decision to enter into this Agreement and to consummate the Rollover Contribution.
(b) The Rollover Participant has had the opportunity to ask questions of, and receive answers from, representatives of Parent regarding the terms and conditions of the Rollover Equity Interests, the Surviving Entity, and the transactions contemplated by this Agreement, and has received such information as he has deemed necessary or appropriate to evaluate the merits and risks of the Rollover Contribution and the receipt of the Rollover Equity Interests.
Section 3.7 — No Reliance
The Rollover Participant acknowledges and agrees that, in entering into this Agreement and consummating the transactions contemplated hereby, he is not relying upon, and has not relied upon, any representation, warranty, statement, advice, or information of or from Parent, Merger Sub, or any of their respective affiliates, directors, officers, employees, agents, advisors, or representatives, other than the representations and warranties expressly set forth in Article IV of this Agreement and in the Merger Agreement. Without limiting the generality of the foregoing, the Rollover Participant acknowledges that neither Parent nor any of its affiliates or representatives has made any representation or warranty regarding any projected or forecasted financial results or performance of the Surviving Entity or the Company following the Merger.
Section 3.8 — Tax Advisors
The Rollover Participant acknowledges that he has had the opportunity to consult with, and has been advised to consult with, his own independent tax, legal, and financial advisors regarding the U.S. federal, state, local, and non-U.S. tax consequences of the Rollover Contribution, the receipt of the Rollover Equity Interests, the receipt of the Per Share Merger Consideration with respect to the Cash-Out Shares, and the other transactions contemplated by this Agreement. The Rollover Participant is not relying on Parent, Merger Sub, or any of their respective affiliates, advisors, or representatives for any tax advice or guidance regarding the transactions contemplated hereby.
ARTICLE IV — REPRESENTATIONS AND WARRANTIES OF PARENT
Parent hereby represents and warrants to the Rollover Participant as follows:
Section 4.1 — Organization and Existence
Parent is a limited partnership duly organized, validly existing, and in good standing under the laws of the State of Delaware. The general partner of Parent is Solara Fund VI GP LLC, a Delaware limited liability company. Parent's employer identification number is 87-4523190. The principal office of Parent is located at 1200 Market Street, Suite 3400, Wilmington, Delaware 19801. Parent has all requisite limited partnership power and authority to own, lease, and operate its properties and assets and to carry on its business as currently conducted.
Section 4.2 — Authority; Binding Effect
(a) Parent has full limited partnership power and authority to execute and deliver this Agreement, to perform its obligations hereunder, and to consummate the transactions contemplated hereby. The execution, delivery, and performance of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all necessary limited partnership action on the part of Parent, including all requisite approvals and authorizations by Solara Fund VI GP LLC, in its capacity as the general partner of Parent.
(b) This Agreement has been duly and validly executed and delivered by Parent and constitutes a legal, valid, and binding obligation of Parent, enforceable against Parent in accordance with its terms, subject to the Bankruptcy and Equity Exceptions.
Section 4.3 — No Conflicts
The execution, delivery, and performance by Parent of this Agreement, and the consummation of the transactions contemplated hereby, do not and will not (a) violate, conflict with, or result in a breach of any provision of the limited partnership agreement or certificate of limited partnership of Parent, (b) violate or conflict with any law, statute, rule, regulation, order, judgment, injunction, or decree of any governmental authority applicable to Parent, or (c) result in a breach of, or constitute a default under, any material contract, agreement, indenture, instrument, or obligation to which Parent is a party or by which Parent is bound.
Section 4.4 — Issuance of Rollover Equity Interests
The Rollover Equity Interests, when issued and delivered by Parent (or its designated subsidiary) to the Rollover Participant in accordance with the terms of this Agreement, will be duly authorized, validly issued, and fully paid (to the extent such concepts are applicable to the type of equity interest being issued), and will be free and clear of all liens, claims, pledges, security interests, charges, encumbrances, and restrictions of any kind, except as set forth in the applicable Governing Documents and except for restrictions imposed under applicable federal and state securities laws.
ARTICLE V — COVENANTS
Section 5.1 — Restrictions on Transfer of Rollover Shares
(a) From the date hereof until the earlier of (i) the Effective Time and (ii) the termination of this Agreement in accordance with its terms, the Rollover Participant shall not, directly or indirectly, sell, transfer, assign, pledge, hypothecate, gift, encumber, or otherwise dispose of (including by merger, consolidation, or other operation of law), or enter into any contract, option, agreement, arrangement, or understanding with respect to the sale, transfer, assignment, pledge, hypothecation, gift, encumbrance, or other disposition of, any of the Rollover Shares, or any interest therein, other than pursuant to this Agreement or the Voting and Support Agreement.
(b) Without limiting the generality of Section 5.1(a), the Rollover Participant shall not, during the period specified therein, enter into any hedging, swap, short sale, forward, put, call, cap, collar, floor, or other derivative transaction, or any other transaction or series of transactions, with respect to the Rollover Shares that would have the purpose or effect of, directly or indirectly, transferring to any third party any economic consequence of ownership of the Rollover Shares, in whole or in part, whether any such transaction is to be settled by delivery of the Rollover Shares, in cash, or otherwise.
(c) Any purported transfer, sale, assignment, pledge, hypothecation, encumbrance, or other disposition of the Rollover Shares in violation of this Section 5.1 shall be null and void and of no force and effect, and Parent shall not be required to recognize any such transfer or disposition.
Section 5.2 — Restrictions on Transfer of Cash-Out Shares
From the date hereof until the Effective Time, the Rollover Participant shall not, directly or indirectly, sell, transfer, assign, pledge, hypothecate, gift, encumber, or otherwise dispose of the Cash-Out Shares, or any interest therein, or enter into any agreement, arrangement, or understanding with respect to the disposition of the Cash-Out Shares, except that the Cash-Out Shares may be surrendered for exchange at the Effective Time in accordance with the terms and procedures set forth in the Merger Agreement and the exchange procedures established by the Exchange Agent. For the avoidance of doubt, the restrictions set forth in this Section 5.2 shall not prohibit the Rollover Participant from surrendering the Cash-Out Shares to the Exchange Agent in connection with the Closing.
Section 5.3 — Further Assurances
(a) Each Party shall, from time to time following the date hereof, upon the reasonable request of the other Party, execute and deliver, or cause to be executed and delivered, such additional documents, instruments, certificates, and other assurances as may be reasonably necessary or desirable to effectuate the Rollover Contribution and the other transactions contemplated by this Agreement, including, without limitation, stock powers, irrevocable assignments, instruments of transfer, and such other transfer documents as Parent may reasonably request in connection with the transfer of the Rollover Shares.
(b) The Rollover Participant shall cooperate with Parent and its counsel, Calderwood & Harkness LLP, in connection with any regulatory filings, consents, approvals, or authorizations required in connection with the Rollover Contribution, including, without limitation, any filings required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, or any other applicable antitrust or competition law, and any filings required under applicable securities laws and regulations.
(c) Without limiting the generality of the foregoing, the Rollover Participant shall promptly furnish to Parent such information and documents as Parent may reasonably request in connection with the preparation and filing of any regulatory or governmental filings relating to the Merger, the Rollover Contribution, or the other transactions contemplated hereby.
Section 5.4 — Voting and Support Agreement
The Parties acknowledge and agree that, concurrently with the execution and delivery of this Agreement, the Rollover Participant has entered into the Voting and Support Agreement, dated as of the date hereof, with Parent, pursuant to which the Rollover Participant has agreed, among other things, to vote all 7,736,400 of his Total Rollover Participant Shares in favor of the approval of the Merger Agreement and the transactions contemplated thereby and against any competing proposal, superior proposal, or alternative acquisition proposal (as such terms are defined in the Merger Agreement). The obligations of the Rollover Participant under the Voting and Support Agreement are separate from and in addition to his obligations under this Agreement, and nothing in this Agreement shall limit or modify the Rollover Participant's obligations under the Voting and Support Agreement.
Section 5.5 — Confidentiality
(a) The Rollover Participant shall keep confidential and shall not disclose to any person, without the prior written consent of Parent, the terms and conditions of this Agreement, the Rollover Equity Interests, the Governing Documents, and all negotiations and discussions relating to the foregoing, except (i) as required by applicable law, regulation, or legal process (including, without limitation, the disclosure requirements of the Securities and Exchange Commission), (ii) to the Rollover Participant's legal, tax, financial, and investment advisors who have a need to know such information and who are bound by obligations of confidentiality, and (iii) as mutually agreed in writing by the Parties.
(b) The confidentiality obligations set forth in this Section 5.5 shall survive the Closing and shall remain in effect for a period of two (2) years following the Closing Date.
Section 5.6 — Cooperation with Tax Filings
(a) The Rollover Participant shall cooperate in good faith with Parent and its advisors, including Glenmore Thornton LLP, in connection with the determination and allocation of the purchase price for U.S. federal income tax purposes under Section 1060 of the Code and the Treasury Regulations promulgated thereunder, and in connection with the preparation and filing of all tax returns and reports relating to the Rollover Contribution and the transactions contemplated hereby.
(b) The Rollover Participant shall deliver to Parent a properly completed and duly executed IRS Form W-9 (Request for Taxpayer Identification Number and Certification) no later than five (5) business days prior to the Closing Date, and shall promptly provide such additional tax-related certifications, forms, and information as Parent may reasonably request.
(c) The obligations of the Rollover Participant under this Section 5.6 shall survive the Closing and shall remain in effect until the expiration of the applicable statute of limitations (including any extensions thereof) with respect to the tax matters described herein.
Section 5.7 — Non-Competition and Non-Solicitation
The Parties acknowledge and agree that, concurrently with the execution and delivery of this Agreement, the Rollover Participant is executing and delivering a Non-Competition and Non-Solicitation Agreement, dated as of the date hereof, with Parent (the "Non-Competition Agreement"), pursuant to which the Rollover Participant has agreed, among other things, to certain non-competition and non-solicitation restrictions following the Closing. The obligations of the Rollover Participant under the Non-Competition Agreement are separate from and in addition to his obligations under this Agreement, and nothing in this Agreement shall limit or modify the Rollover Participant's obligations under the Non-Competition Agreement.
ARTICLE VI — CONDITIONS PRECEDENT
Section 6.1 — Conditions to the Obligations of Both Parties
The obligation of each Party to consummate the Rollover Contribution shall be subject to the satisfaction (or, to the extent permitted by applicable law, waiver by the Party entitled to the benefit thereof) of each of the following conditions:
(a) Merger Agreement Not Terminated. The Merger Agreement shall not have been validly terminated in accordance with its terms.
(b) Conditions to Closing Under the Merger Agreement. All conditions to the Closing set forth in the Merger Agreement shall have been satisfied or waived (other than those conditions that by their nature are to be satisfied at the Closing, but subject to the requirement that each such condition shall be capable of being satisfied at the Closing).
(c) No Legal Impediment. No law, statute, rule, regulation, order, injunction, judgment, or decree of any court or governmental authority of competent jurisdiction shall be in effect that prohibits, restrains, enjoins, or makes illegal the consummation of the Rollover Contribution or any of the other transactions contemplated by this Agreement.
Section 6.2 — Conditions to the Obligations of Parent
The obligation of Parent to consummate the Rollover Contribution and to issue the Rollover Equity Interests shall be subject to the satisfaction (or waiver by Parent) of each of the following additional conditions:
(a) Representations and Warranties. The representations and warranties of the Rollover Participant set forth in Article III of this Agreement shall be true and correct in all material respects (or, in the case of representations and warranties that are qualified by materiality, in all respects) as of the date hereof and as of the Closing Date as though made on and as of the Closing Date (except to the extent that any such representation or warranty expressly relates to an earlier date, in which case as of such earlier date).
(b) Performance of Covenants. The Rollover Participant shall have performed and complied in all material respects with all covenants, agreements, and obligations required to be performed or complied with by him under this Agreement on or prior to the Closing Date.
(c) Delivery of Stock Powers. The Rollover Participant shall have delivered to Parent (or its designated subsidiary) duly executed stock powers or other instruments of transfer, in the form attached hereto as Schedule B or in such other form as Parent may reasonably require, with respect to all of the Rollover Shares, together with all share certificates (if any) representing the Rollover Shares or, in the case of book-entry shares, appropriate instructions to the Company's transfer agent to effect the transfer of the Rollover Shares.
(d) IRS Form W-9. The Rollover Participant shall have delivered to Parent a properly completed and duly executed IRS Form W-9.
Section 6.3 — Conditions to the Obligations of the Rollover Participant
The obligation of the Rollover Participant to consummate the Rollover Contribution shall be subject to the satisfaction (or waiver by the Rollover Participant) of each of the following additional conditions:
(a) Representations and Warranties. The representations and warranties of Parent set forth in Article IV of this Agreement shall be true and correct in all material respects (or, in the case of representations and warranties that are qualified by materiality, in all respects) as of the date hereof and as of the Closing Date as though made on and as of the Closing Date (except to the extent that any such representation or warranty expressly relates to an earlier date, in which case as of such earlier date).
(b) Performance of Covenants. Parent shall have performed and complied in all material respects with all covenants, agreements, and obligations required to be performed or complied with by it under this Agreement on or prior to the Closing Date.
(c) Delivery of Governing Documents. Parent shall have delivered, or caused to be delivered, to the Rollover Participant final copies of the Governing Documents governing the entity through which the Rollover Equity Interests are to be issued, in the form to be executed at or prior to the Closing, no later than five (5) business days prior to the Closing Date.
ARTICLE VII — TERMINATION
Section 7.1 — Termination Events
This Agreement shall automatically terminate and be of no further force or effect upon the earliest to occur of the following:
(a) the valid termination of the Merger Agreement in accordance with its terms (including, without limitation, any termination in connection with which the Company is required to pay the termination fee of $221,000,000 or Parent is required to pay the reverse termination fee of $374,000,000, in each case as provided in the Merger Agreement);
(b) the mutual written consent of Parent and the Rollover Participant to terminate this Agreement; or
(c) the Effective Time (at which point the Rollover Contribution shall have been consummated and the provisions of this Agreement shall survive only to the extent set forth in Section 7.2).
Section 7.2 — Effect of Termination
(a) Upon the termination of this Agreement pursuant to Section 7.1(a) or Section 7.1(b), this Agreement shall thereupon become void and of no further force or effect, and no Party shall have any further liability or obligation hereunder, except that (i) Article VIII (Miscellaneous) shall survive any such termination and shall remain in full force and effect, and (ii) nothing herein shall relieve any Party from liability for any willful and material breach of this Agreement occurring prior to such termination.
(b) Upon the termination of this Agreement pursuant to Section 7.1(c) (i.e., at the Effective Time), the representations, warranties, covenants, and agreements that by their terms are intended to survive the Closing or that expressly apply to periods following the Closing (including, without limitation, Section 5.5 (Confidentiality) and Section 5.6 (Cooperation with Tax Filings)) shall survive the Closing for the applicable periods specified therein (or, if no period is specified, for a period of eighteen (18) months following the Closing Date). Article VIII (Miscellaneous) shall also survive the Closing and the termination of this Agreement. All other provisions of this Agreement shall terminate at the Effective Time and shall be of no further force or effect.
ARTICLE VIII — MISCELLANEOUS
Section 8.1 — Notices
All notices, requests, demands, claims, consents, waivers, and other communications required or permitted to be given hereunder shall be in writing and shall be deemed to have been duly given (a) when delivered by hand, (b) one (1) business day after being sent by nationally recognized overnight courier service (with written confirmation of delivery), or (c) when sent by email (with confirmation of receipt, which may include read receipt or reply email confirming receipt), in each case to the applicable Party at the following address (or at such other address as such Party shall have specified by like notice given to the other Party):
If to Parent:
Solara Digital Infrastructure Fund VI LP c/o Solara Digital GP LLC 1200 Market Street, Suite 3400 Wilmington, Delaware 19801
Attention: Marcus Elliston, Managing Partner
Priya Narasimhan, Co-Managing Partner & Chief Investment Officer
with a copy (which shall not constitute notice) to:
Calderwood & Harkness LLP 599 Lexington Avenue New York, New York 10022
Attention: Harrison Wexford
Tiffany Rosenthal
If to the Rollover Participant:
Jonathan Hargrove [Address on file with the Company]
with a copy (which shall not constitute notice) to:
Ridgeway Phelps & Sato LLP 375 Park Avenue New York, New York 10152
Attention: Catherine Answorth
Section 8.2 — Governing Law
This Agreement, and all claims, controversies, and causes of action (whether in contract, tort, or otherwise) arising out of or relating to this Agreement, shall be governed by and construed in accordance with the internal laws of the State of Delaware, without giving effect to any choice or conflict of law provision or rule (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 8.3 — Jurisdiction and Venue
Each Party irrevocably and unconditionally (a) submits to the exclusive jurisdiction of 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 a particular matter, any federal court sitting in the State of Delaware, or if no such federal court has jurisdiction, any other state court of the State of Delaware) for the purposes of any action, suit, or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby, (b) agrees not to commence any such action, suit, or proceeding except in such courts, (c) waives, and agrees not to plead or to make, any objection to the laying of venue of any such action, suit, or proceeding in any such court, (d) waives and agrees not to plead or to make any claim that any such action, suit, or proceeding brought in any such court has been brought in an inconvenient forum, and (e) agrees that service of process may be made in any manner permitted by the rules of the applicable court or by personal delivery, nationally recognized overnight courier, or registered or certified mail (return receipt requested), postage prepaid, at the address specified in Section 8.1.
Section 8.4 — Waiver of Jury Trial
EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING, CLAIM, OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE ROLLOVER CONTRIBUTION, OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE OF THE OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT SEEK TO ENFORCE THE FOREGOING WAIVER IN THE EVENT OF ANY SUCH ACTION, SUIT, OR PROCEEDING, (B) SUCH PARTY HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS SET FORTH IN THIS SECTION 8.4.
Section 8.5 — Entire Agreement
This Agreement, together with the Merger Agreement, the Voting and Support Agreement, the Non-Competition Agreement, the Governing Documents, and the Equity Commitment Letter, and all schedules, exhibits, annexes, and other attachments hereto and thereto, constitutes the entire agreement of the Parties with respect to the subject matter hereof and thereof and supersedes all prior and contemporaneous agreements, negotiations, representations, warranties, understandings, and discussions of the Parties, whether written or oral, with respect to such subject matter. There are no representations, warranties, covenants, or agreements between the Parties with respect to the subject matter hereof other than those expressly set forth or referred to in this Agreement.
Section 8.6 — Amendment and Waiver
(a) This Agreement may not be amended, modified, supplemented, or restated except by a written instrument duly executed by each of the Parties. No provision of this Agreement may be waived except by a written instrument signed by the Party against whom enforcement of such waiver is sought.
(b) No failure or delay by any Party in exercising any right, power, or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power, or privilege. The rights and remedies herein provided are cumulative and not exclusive of any rights or remedies provided by law.
Section 8.7 — Assignment
Neither Party may assign, delegate, or otherwise transfer any of its rights or obligations under this Agreement without the prior written consent of the other Party; provided, however, that Parent may assign any or all of its rights under this Agreement to any wholly owned subsidiary or affiliate of Parent (including, without limitation, the Surviving Entity or Solara Digital Co-Invest VI-A LP) without the prior written consent of the Rollover Participant, provided that no such assignment shall relieve Parent of any of its obligations hereunder. Any purported assignment in violation of this Section 8.7 shall be null and void. Subject to the foregoing, this Agreement shall be binding upon and inure to the benefit of the Parties and their respective heirs, executors, administrators, personal representatives, successors, and permitted assigns.
Section 8.8 — Severability
If any term, provision, covenant, or restriction of this Agreement is held by a court of competent jurisdiction or other governmental authority to be invalid, illegal, void, or unenforceable, the remainder of the terms, provisions, covenants, and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired, or invalidated, so long as the economic and legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any Party. Upon such determination that any term, provision, covenant, or restriction is invalid, illegal, void, or unenforceable, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible.
Section 8.9 — Specific Performance
The Parties acknowledge and agree that irreparable harm would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached, and that monetary damages would not be an adequate remedy for such breach or non-performance. Accordingly, each Party shall be entitled to seek an injunction or injunctions, specific performance, and other equitable relief to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof, in each case in accordance with Section 8.3, without proof of actual damages and without the necessity of posting a bond or other security (any requirement for which is hereby waived). Such remedies shall be in addition to, and not in lieu of, any other remedies available to such Party at law or in equity.
Section 8.10 — Third-Party Beneficiaries
This Agreement is for the sole benefit of the Parties hereto and their respective permitted successors and assigns, and nothing herein, express or implied, is intended to or shall confer upon any other person or entity any legal or equitable right, benefit, interest, or remedy of any nature whatsoever under or by reason of this Agreement; provided, however, that the Company (Cloudium Technologies plc) is hereby designated and shall be an intended third-party beneficiary of Section 2.1 (Agreement to Contribute Rollover Shares) and Section 5.1 (Restrictions on Transfer of Rollover Shares), and shall have the right to enforce such provisions as if a party hereto.
Section 8.11 — Expenses
Except as otherwise expressly provided in this Agreement or the Merger Agreement, each Party shall bear and pay its own costs, fees, and expenses (including legal, accounting, financial advisory, and other professional fees and expenses) incurred in connection with the negotiation, preparation, execution, delivery, and performance of this Agreement and the consummation of the transactions contemplated hereby.
Section 8.12 — Counterparts; Electronic Signatures
This Agreement may be executed in one or more counterparts, and by the different Parties in separate counterparts, each of which when executed shall be deemed to be an original, but all of which taken together shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Agreement by facsimile, portable document format (PDF), or other electronic means (including Brightwater Software or similar e-signature platforms) shall be effective as delivery of a manually executed counterpart of this Agreement, and each such electronic signature shall be deemed an original signature for all purposes.
Section 8.13 — Interpretation
(a) The headings and captions contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.
(b) References in this Agreement to "Sections," "Articles," "Schedules," and "Exhibits" are to the sections, articles, schedules, and exhibits of this Agreement, unless the context otherwise requires.
(c) The word "including" (and with correlative meaning, "include" and "includes") means "including, without limitation."
(d) This Agreement shall be construed without regard to any presumption or rule of construction requiring construction or interpretation against the Party drafting or causing any instrument to be drafted.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the Parties have executed this Rollover 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: Authorized Signatory
By: ________
Name: Priya Narasimhan
Title: Authorized Signatory
ROLLOVER PARTICIPANT
________________________________________
Jonathan Hargrove, individually