Contract analysis

I. Executive Summary The purpose of this memorandum is to outline a comprehensive compliance plan for the Second Request issued by the Federal Trade Commission ("FTC") on May 29, 2023, in connection with the proposed acquisition of one hundred percent (100%) of the outstanding capital stock of Pinnacle Cloud Systems, Inc. ("Pinnacle" or the "Target") by Solara Digital Infrastructure Fund IV LP ("Fund IV"), or its des

II. Background on the Transaction A. Transaction Structure The acquirer in the Transaction is Solara Digital Infrastructure Fund IV LP ("Fund IV"), a Delaware limited partnership with $4.2 billion in committed capital. Fund IV is part of the broader Solara Digital Infrastructure LP ("Solara") platform, a Delaware-based private equity sponsor with approximately $14.7 billion in total assets under management across fou

1. Horizontal Overlap in Portfolio Analytics: Both Pinnacle and Meridian offer portfolio analytics functionality to institutional asset managers. The FTC is concerned that the acquisition would reduce the number of independent competitors in the cloud-based portfolio analytics and performance attribution market, potentially leading to higher prices, reduced innovation, or diminished service quality for institutional

2. Vertical Foreclosure Concerns: The FTC has indicated interest in examining whether the post-merger entity could leverage the integration of Meridian's OMS/EMS platform with Pinnacle's analytics data to foreclose competing analytics providers (by denying them access to order flow data necessary for accurate analytics) or competing OMS providers (by making Pinnacle's analytics functionality available exclusively or

III. Overview of the Second Request A. Scope and Specifications The Second Request issued by the FTC on May 29, 2023, contains forty-seven (47) specifications issued by the Bureau of Competition, Mergers IV Division. The specifications follow the FTC's standard Second Request format but have been tailored to address the specific competitive concerns arising from the Pinnacle-Meridian overlap and the vertical integrat

IV. Compliance Team and Roles A. Calderwood & Harkness LLP Engagement Team Calderwood & Harkness's team for the Second Request compliance effort will consist of the following professionals, each with defined responsibilities: Howard Bellamy — Responsible Partner & Billing Partner. Mr. Bellamy will serve as the lead partner on the engagement, with overall responsibility for compliance strategy, direct communications w

V. Custodian Identification The identification of appropriate custodians — the individuals whose documents and communications will be collected, reviewed, and produced in response to the Second Request — is a critical threshold step in the compliance process. The custodian list must be sufficiently inclusive to capture all responsive documents that a reasonable search would locate, while avoiding unnecessary over-col

VI. Document Collection Methodology A. Data Sources Comprehensive collection from all identified custodians will encompass the following data sources: Email. Email is expected to constitute the largest single category of collected documents. For Solara GP / Fund IV custodians, we will collect from the Strathmore Data Systems / Outlook environment that serves as the primary email platform, including any archived mailb

1. Sales Transaction Data: Detailed transaction-level sales data for Pinnacle and Meridian analytics products, including contract values, effective dates, renewal dates, customer identifiers, and product descriptions.

2. Pricing Data: Pricing schedules, discount matrices, list prices, and realized prices for all analytics-related products and services offered by Pinnacle and Meridian.

3. Customer Lists: Comprehensive customer lists for Pinnacle and Meridian, including customer name, industry classification, contract value, product modules subscribed, contract start and end dates, and any customer overlap identification.

4. Win/Loss Data: Records of competitive situations in which Pinnacle or Meridian competed for the same customer or contract, including the identity of the winning vendor, the competing vendors, and any available reason codes or feedback regarding the outcome.

5. Market Share Estimates: Any internal estimates, analyses, or assessments of market share for Pinnacle, Meridian, or their competitors in portfolio analytics, performance attribution, order management, or related product categories.

6. Financial Data: Revenue, cost, and profitability data for Pinnacle and Meridian, broken down by product line, customer segment, and geographic region, for the relevant period.

7. Product Feature Matrices: Detailed product feature comparison matrices reflecting the functionality of Pinnacle's and Meridian's analytics products relative to competing products. Coordination with Pinnacle's counsel at HPS is essential for the structured data submissions, as several specifications (particularly customer lists, win/loss data, and product feature matrices) will require jointly formatted submissions

VII. Privilege Review Framework The privilege review process is among the most time-intensive and legally consequential aspects of Second Request compliance. Documents protected by the attorney-client privilege or the work product doctrine must be identified, withheld from production, and logged on a privilege log with sufficient specificity to allow FTC staff to assess the validity of each privilege claim. Given the