Contract analysis

I. Executive Summary The purpose of this memorandum is to evaluate four principal acquisition structures for the proposed acquisition of Cloudium Technologies plc ("Cloudium" or the "Target") by Solara Digital Infrastructure Fund VI LP ("Fund VI"), and to provide a recommendation as to the optimal structure based on the transaction's specific commercial, regulatory, tax, financing, and operational considerations. The

II. Background and Key Transaction Parameters A. Parties. Buyer. The buyer is Solara Digital Infrastructure Fund VI LP, a Delaware limited partnership formed for the purpose of making investments in digital infrastructure, enterprise software, and technology-enabled services businesses. Fund VI's general partner is Solara Fund VI GP LLC, a Delaware limited liability company. Solara's headquarters are located at 1200

1. Cloudium Technologies plc (parent entity; incorporated in England and Wales; Company No. 09734521; registered office at 45 Broadwick Street, London W1F 0DB, UK). The parent entity holds the equity interests in each of the subsidiaries described below and conducts its US operations primarily through its San Francisco headquarters. The parent employs approximately 2,800 employees in the United States across engineer

2. Cloudium Technologies UK Ltd. (Company No. 11287456; registered at 45 Broadwick Street, London W1F 0DB, United Kingdom). The UK subsidiary employs approximately 1,200 people in London and Manchester and serves as the primary operating entity for Cloudium's EMEA sales, customer success, and professional services operations. For the fiscal year ending September 30, 2023, Cloudium UK reported revenue of approximately

3. Cloudium Technologies India Pvt. Ltd. (incorporated in Bangalore, Karnataka, India). The Indian subsidiary employs approximately 2,400 people and serves as Cloudium's primary center for research and development, quality assurance, and customer support. This entity holds certain Indian intellectual property registrations and is party to intercompany service agreements with the parent entity.

4. Cloudium Solutions GmbH (incorporated in Berlin, Germany). The German subsidiary employs approximately 400 people and is responsible for sales and customer success operations in the DACH region (Germany, Austria, and Switzerland). The entity is party to customer agreements with German, Austrian, and Swiss enterprise customers and holds certain local regulatory authorizations. A detailed organizational chart of Clo

1. Master SaaS Agreement with Aegis Federal Solutions Inc. Aegis Federal is a US government contractor and one of Cloudium's largest enterprise customers, contributing approximately $84,000,000 in ARR. The Master SaaS Agreement between Cloudium and Aegis Federal contains a provision requiring the prior written consent of Aegis Federal for any "change of control" of Cloudium, broadly defined to include any transaction

2. Technology License Agreement with Helix Data Systems GmbH (Frankfurt). Cloudium has a technology license agreement with Helix Data Systems GmbH pursuant to which Cloudium licenses certain proprietary data analytics and machine learning algorithms integrated into Cloudium's business-intelligence product suite. The Helix Data license contains a termination-for-change-of-control clause that provides Helix Data with t

3. Existing Credit Agreement with Atlas Commercial Lending Corp. As noted above, the existing credit agreement contains a change of control provision requiring mandatory prepayment of all outstanding indebtedness. This provision will be triggered regardless of structure, and the repayment obligation has been accounted for in the sources and uses analysis.

4. Other Contracts. Our diligence review has identified numerous additional customer, vendor, and IP license agreements containing change of control notification or consent requirements of varying scope and materiality. A comprehensive analysis of these provisions is being prepared and will be delivered in a separate Issue-Specific Diligence Memorandum on Change of Control Provisions (targeted for circulation on Janu

III. Analysis of Structural Alternatives A. Option 1: Reverse Triangular Merger (Recommended)

1. Description of Mechanics. Under a reverse triangular merger structure, Fund VI would cause the formation of a new Delaware corporation — to be incorporated as Stratos Merger Sub Inc. ("Merger Sub") — as a direct, wholly owned subsidiary of Fund VI. Merger Sub would be formed for the sole purpose of effectuating the merger and would have no assets, liabilities, or operations other than those incident to its formati

2. Advantages. Contract Preservation. The most significant advantage of the reverse triangular merger for this transaction is the preservation of Cloudium's legal identity. Because Cloudium survives as the same legal entity after the merger, all of its contracts, licenses, permits, and regulatory authorizations continue by operation of law. There is no assignment or novation of contracts to a new entity; Cloudium rem

3. Disadvantages. While the reverse triangular merger is our recommended structure, it is not without certain disadvantages that should be acknowledged and considered: Stockholder Approval Required. The reverse triangular merger requires approval by the stockholders of Cloudium at a duly called special meeting. Cloudium will be required to file a proxy statement (or, as a foreign private issuer, potentially a combine

4. Key Structural Considerations Specific to This Transaction. Cloudium's Incorporation in England and Wales. A threshold issue that warrants careful analysis is the fact that Cloudium is incorporated in England and Wales as a public limited company, even though it is listed on Nasdaq and has significant US operations. The reverse triangular merger would be effected under the DGCL because Merger Sub is a Delaware cor

Section 203 of the DGCL (Business Combination Statute). DGCL § 203 restricts certain business combinations between a Delaware corporation and an "interested stockholder" (generally defined as a person or group owning 15% or more of the corporation's outstanding voting stock) for a period of three years following the date on which the interested stockholder became such. Pinnacle Growth Ventures LLC holds approximately

1. Description of Mechanics. Under a forward triangular merger structure, Fund VI would form Merger Sub as a new Delaware corporation (in the same manner as in the reverse triangular merger). However, instead of Merger Sub merging with and into Cloudium, the merger would proceed in the opposite direction: Cloudium would merge with and into Merger Sub. At the effective time of the merger, Merger Sub would be the survi

2. Advantages. The forward triangular merger shares certain structural advantages with the reverse triangular merger: Structural Familiarity. The forward triangular merger is a recognized and well-established merger structure under the DGCL and is familiar to sophisticated market participants, including lenders, financial advisors, and institutional investors. Like the reverse triangular merger, it is effected throug

3. Disadvantages — and Why It Is Not Recommended. Despite its structural familiarity, the forward triangular merger suffers from several critical disadvantages that render it unsuitable for this transaction: Critical Deficiency — Loss of Target's Legal Identity. The most significant disadvantage of the forward triangular merger is that Cloudium ceases to exist as a legal entity upon consummation of the merger. While

4. Conclusion. For the reasons set forth above, the forward triangular merger is inferior to the reverse triangular merger for this transaction. The critical deficiency — the loss of Cloudium's legal identity and the resulting need to assign or novate every contract, license, permit, and regulatory authorization — creates unacceptable operational risk and transactional complexity. Combined with the less favorable tax

1. Description of Mechanics. Under an asset purchase structure, Fund VI (or a newly formed acquisition vehicle) would purchase substantially all of the assets of Cloudium and its subsidiaries through one or more asset purchase agreements. The acquisition vehicle would assume only those liabilities expressly identified and agreed upon in the asset purchase agreements, and Cloudium would retain all excluded assets (if

2. Advantages. The asset purchase structure offers certain theoretical advantages: Selective Acquisition of Assets and Liabilities. The principal advantage of an asset purchase is the buyer's ability to selectively acquire desired assets and assume only specified liabilities. The buyer can "cherry-pick" the assets it wants — contracts, intellectual property, equipment, real property — and leave behind assets it does

3. Disadvantages — and Why It Is Not Recommended. Notwithstanding the theoretical advantages, the asset purchase structure is entirely impractical for this transaction for the following reasons: Massive Third-Party Consent Burden. In an asset purchase, every material contract, license, lease, and permit must be individually assigned from the seller (Cloudium) to the buyer (the acquisition vehicle). Unlike a merger —

4. Conclusion. For the reasons set forth above, the asset purchase structure is entirely impractical for this transaction. The scale of the transaction ($6.8 billion), the global nature of Cloudium's operations (four countries), the volume of contracts requiring assignment, the double taxation burden, the incompatibility with the committed debt financing, and the operational disruption inherent in an asset-by-asset t

1. Description of Mechanics — Two-Step Tender Offer. Under a two-step tender offer structure, Fund VI (or Merger Sub) would commence a cash tender offer directly to Cloudium's stockholders for all outstanding shares of Cloudium common stock at $36.92 per share. The tender offer would be conducted in accordance with the SEC's tender offer rules under Regulation 14D and Regulation 14E of the Securities Exchange Act of

2. Description of Mechanics — One-Step Tender Offer. As an alternative, if DGCL § 251(h) is available, the tender offer and back-end merger could be structured as a single, integrated transaction. Under Section 251(h), if the merger agreement expressly provides for it and the acquirer obtains at least the percentage of shares that would be required to approve the merger at a stockholder meeting, the back-end merger m

3. Advantages. Potentially Faster Timeline. The primary advantage of a tender offer structure is speed. Under SEC rules, a tender offer must remain open for a minimum of 20 business days (approximately four calendar weeks). This is significantly faster than the proxy solicitation process required for a one-step merger, which typically takes three to four months (including preparation, SEC review, and mailing of the p