Contract analysis

I. Executive Summary This memorandum sets forth our analysis of the application of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (SI 2006/246), as amended (the "TUPE Regulations" or "TUPE"), to the workforce of Cloudium Technologies UK Ltd. ("Cloudium UK") in the context of the proposed acquisition of Cloudium Technologies plc ("Cloudium" or the "Company") by Solara Digital Infrastructure F

II. Transaction Structure and Relevance to UK Employment Law A. Overview of the Transaction Solara Digital Infrastructure Fund VI LP, a Delaware limited partnership managed by Solara Digital Infrastructure LP, proposes to acquire all of the outstanding shares of common stock of Cloudium Technologies plc, a Delaware corporation that is publicly traded on the Nasdaq Global Select Market under the ticker symbol "CLDM."

III. TUPE Analysis A. Overview of TUPE 2006 The Transfer of Undertakings (Protection of Employment) Regulations 2006 (SI 2006/246) (the "TUPE Regulations") implement the European Union's Acquired Rights Directive (Council Directive 2001/23/EC) into UK domestic law. Although the United Kingdom withdrew from the European Union on January 31, 2020, and the transition period ended on December 31, 2020, the TUPE Regulatio

IV. Related UK Employment Law Considerations Even though TUPE does not apply to the Transaction, a number of other UK employment law considerations are relevant to Solara's acquisition and post-closing ownership of Cloudium UK. We address these below. A. Unfair Dismissal and Redundancy Protections UK employees benefit from general statutory protections against unfair dismissal under the Employment Rights Act 1996 (th

V. UK Pension Considerations A. Defined Contribution Arrangements Cloudium Technologies UK Ltd. operates a group personal pension plan on a defined contribution basis, in compliance with the automatic enrolment requirements introduced by the Pensions Act 2008 and the Employers' Duties (Implementation) Regulations 2010. Under these requirements, Cloudium UK is obligated to automatically enrol all eligible jobholders i

VI. UK Working Time and Employment Regulatory Compliance Our diligence review of Cloudium UK's HR policies, employee handbook, and related documentation maintained in the data room has confirmed that Cloudium UK maintains policies and practices that are generally compliant with applicable UK employment legislation, including: (a) the Working Time Regulations 1998 (SI 1998/1833), including compliance with the 48-hour

VII. Interaction with CMA Review Process The acquisition of Cloudium Technologies plc by Fund VI is expected to be subject to review by the UK Competition and Markets Authority (the "CMA") under the merger control provisions of the Enterprise Act 2002. A merger notification (anticipated CMA Case No. ME/7184/24) is expected to be submitted to the CMA on or about February 12, 2024. The filing will address the competiti

VIII. Recommendations Based on the analysis set forth in this memorandum, we make the following recommendations:

1. TUPE — No Action Required at This Stage. No TUPE notification or consultation obligations are triggered by the share-level acquisition contemplated by the Transaction. The reverse triangular merger does not constitute a "relevant transfer" under either Regulation 3(1)(a) or Regulation 3(1)(b) of the TUPE Regulations. No further action is required at this stage with respect to TUPE compliance in connection with the

2. Post-Closing Restructuring — Engage Counsel Early. Any post-closing reorganization or integration activity affecting Cloudium UK's business operations, employees, or legal entity structure must be assessed for TUPE applicability before implementation. This includes any contemplated intra-group transfers of business functions, outsourcing of activities currently performed in-house, or entity rationalization exercis

3. Change-of-Control Payments — Quantify and Budget. Solara should quantify all UK employee change-of-control payments and enhanced termination benefits that will be triggered upon closing of the Transaction. These include accelerated vesting of equity awards, cash retention bonuses, and enhanced severance entitlements for senior UK employees with change-of-control provisions in their employment contracts. The aggreg

4. Employee Communications — Prepare and Coordinate. Coordinated employee communications should be prepared for the UK workforce, to be issued promptly after the public announcement of the Transaction on January 23, 2024. The messaging should emphasize continuity of employment, the absence of any immediate changes to terms and conditions of employment, and Solara's commitment to the continued success and growth of Cl

5. Key Employee Retention — Consider UK-Specific Arrangements. Solara should consider implementing UK-specific retention arrangements for senior Cloudium UK employees, in addition to the group-level non-competition and non-solicitation agreements being executed by Jonathan Hargrove and Sienna Whitfield at signing. Retention mechanisms could include retention bonuses, revised equity incentive awards under a new manage

6. Pension — Confirm Ongoing Compliance. No defined benefit pension exposure has been identified. Solara should confirm that Cloudium UK's automatic enrolment obligations and defined contribution pension arrangements are maintained in compliance with the Pensions Act 2008 and associated regulations following the closing. If any post-closing restructuring results in a change of employer for UK employees, the new emplo

7. Collective Consultation — Plan for Contingency. If any redundancy program or material workforce reduction is contemplated in connection with post-closing integration or restructuring, Solara must ensure compliance with the collective consultation requirements under Part IV, Chapter II of TULRCA 1992. Given the size of Cloudium UK's workforce (approximately 1,200 employees), any program involving the proposed dismi

8. Merger Agreement Protections — Confirm Comprehensive Representations. We recommend that Article IV (Seller's Representations and Warranties) of the Merger Agreement include comprehensive employee-related representations and warranties covering, at a minimum: (a) compliance by Cloudium and its subsidiaries (including Cloudium UK) with applicable employment laws in all material respects; (b) a complete and accurate

IX. Appendices and Cross-References Appendix A List of Cloudium UK Senior Employees with Change-of-Control Provisions in Employment Contracts A redacted summary of the senior UK employees whose employment agreements contain change-of-control provisions is maintained on file with Calderwood & Harkness LLP. The full list, including names, titles, key contract terms, estimated change-of-control payment amounts, and copi