Contract analysis

I. Executive Summary This memorandum analyzes the limited recourse sponsor guaranty to be provided by Solara Digital Infrastructure LP ("Solara" or "SDILP"), a Delaware limited partnership, in connection with the $200,000,000 senior secured term loan facility (the "Facility") to be arranged by Brindoval National Bank, N.A. ("Brindoval") to finance the acquisition (the "Acquisition") of Meridian Cloud Solutions Inc. (

II. Transaction Background A. Transaction Structure Overview Solara, acting through Fund IV (which has $1.65 billion in committed capital, of which approximately $740 million has been deployed as of March 2026), is acquiring 100% of the issued and outstanding equity interests of Meridian from the Target's existing shareholders. Solara is a leading mid-market private equity firm focused on digital infrastructure, ente

III. Market Practice for PE Sponsor Guaranties in Acquisition Financings A. General Market Context In sponsor-backed leveraged buyout and acquisition financings, it is well-established market practice that the private equity sponsor — whether structured as the management company, the general partner entity, or the fund-level limited partnership — does not provide a full recourse guaranty of the borrower's payment and

2. Environmental Indemnities. In traditional leveraged finance transactions — particularly those involving real estate assets, manufacturing facilities, or other businesses with significant physical plant — sponsor guaranties routinely include a guaranty of the borrower's and target's environmental remediation and compliance obligations. The rationale is that environmental liabilities can be significant and may survi

3. Certain Specific Representations. Sponsor guaranties frequently cover the accuracy of certain fundamental representations made by the sponsor in the loan documents, such as representations regarding the sponsor's due organization, authority and capacity to execute the guaranty, absence of conflicts, and enforceability. These representations are within the sponsor's sole knowledge and control, and it is reasonable

4. Transfer Restrictions / SPE Covenants. In some transactions, particularly those involving single-purpose entity ("SPE") borrowers (as is the case here, where Acquisition Sub was formed solely for the purpose of the Acquisition), the sponsor guaranty covers compliance with the SPE covenants applicable to the borrower, such as requirements that the borrower maintain separateness from its affiliates, observe entity f

5. Bankruptcy / Insolvency Carve-Outs. A particularly significant carve-out — and one that is the subject of frequent negotiation — involves "springing recourse" triggered by voluntary bankruptcy filings by the borrower or by sponsor interference with the lender's exercise of remedies. The theory is that a sponsor should not be able to use its control over the borrower to frustrate the lender's rights by directing th

6. Post-Closing Obligations. Where the credit agreement imposes post-closing obligations on the borrower — for example, delivery of deposit account control agreements, landlord consents, intellectual property security agreements, or foreign subsidiary equity pledges within specified periods following closing — the sponsor may be asked to guaranty timely performance of these obligations. The rationale is that the lend

IV. Analysis of Proposed Sponsor Guaranty Scope A. Brindoval's Expected Position Based on the initial Term Sheet received on March 21, 2026, the Term Sheet references "Solara Digital Infrastructure LP (as sponsor guarantor, limited recourse)" as a guarantor under the Facility but does not further specify the scope of the limited recourse guaranty. This is typical for indicative term sheets, which generally identify t

1. Bad Boy / Fraud Carve-Outs. The sponsor guaranty should cover losses directly resulting from the following categories of sponsor conduct: (a) Actual fraud (not constructive fraud) by the sponsor or its controlled affiliates in connection with the transaction, including the making of the loan, the execution of the loan documents, and the performance of the sponsor's obligations thereunder; (b) Intentional and mater

2. Voluntary Bankruptcy / Insolvency Interference. The sponsor guaranty should cover losses arising from the following events: (a) The sponsor causing or directing the Borrower or any downstream guarantor to file a voluntary petition for relief under Title 11 of the United States Code or any other applicable bankruptcy, insolvency, or similar debtor-relief statute; (b) The sponsor colluding with third parties to file

3. Certain Fundamental Representations. The sponsor guaranty should include a guaranty that the following fundamental representations made by the sponsor in the loan documents are true and accurate as of the closing date and as of each date on which they are deemed repeated: (a) Due organization and valid existence — Solara Digital Infrastructure LP is duly organized, validly existing, and in good standing under the

4. Post-Closing Deliverable Obligations. If the credit agreement contains post-closing covenants requiring the delivery of items within specified periods following the closing date — such as deposit account control agreements, intellectual property security agreements, landlord consents for leased properties, landlord estoppels, foreign subsidiary equity pledges, and evidence of insurance — the sponsor may be asked t

5. Environmental Indemnities. In traditional leveraged finance transactions, particularly those involving real estate, manufacturing, energy, and other sectors with significant physical plant and environmental exposure, sponsor guaranties routinely include a guaranty of the borrower's and target's environmental remediation and compliance obligations. The rationale is that environmental liabilities — including liabili

1. Payment Guaranty of Facility Obligations. Under no circumstances should the sponsor guaranty cover the payment of principal ($200,000,000), interest (at the rate of Adjusted Term SOFR + 475 bps, with a SOFR floor of 1.00% and a CSA of 10 bps), fees (including the arrangement fee of $3,000,000 and the structuring fee of $500,000), or any other monetary obligations of the Borrower under the credit agreement. A payme

2. Financial Covenant Performance Guaranty. The Term Sheet includes a springing Total Net Leverage covenant at 7.50x, tested quarterly only when the revolving credit facility (if any) is drawn more than 35% of commitments. The sponsor should not guaranty compliance with this financial covenant or indemnify the lenders for any losses arising from a breach thereof. A financial covenant guaranty would convert what is es

3. Operating Covenant Compliance. The credit agreement will contain customary negative covenants applicable to the Borrower and the downstream guarantors, including limitations on: indebtedness, liens, restricted payments (including dividends and distributions), investments, asset sales, affiliate transactions, fundamental changes (mergers, consolidations, and dissolutions), and restrictive agreements. These covenant

4. Indemnification for Losses Arising from Target's Pre-Closing Liabilities. Any pre-closing liabilities of Meridian — including liabilities arising from tax matters, employment disputes, intellectual property infringement claims, data privacy violations, or other matters predating the closing of the Acquisition — should be addressed through the appropriate transaction documents. Specifically: • The acquisition agree

V. Structural and Drafting Considerations A. Identity of Guarantor Entity The guarantor entity under the sponsor guaranty should be Solara Digital Infrastructure LP (EIN 84-3291057; DE SOS File No. 7294185) only. This is the entity identified in the Term Sheet as the sponsor guarantor, and it is the appropriate entity given its role as the management company and investment adviser for the Solara fund complex. The fol

VI. Comparison to Precedent Transactions A detailed comparable transaction analysis for the SaaS leveraged finance market is being separately prepared by the Banking & Finance team and will be circulated under separate cover. For purposes of this memorandum, we have reviewed the sponsor guaranty structures in five recent comparable SaaS acquisition financings from Q3 2025 through Q1 2026, summarized below: Analysis.