Contract analysis

I. Executive Summary The purpose of this memorandum is to provide a comprehensive analysis of the structure, enforceability, and key terms of (a) the Equity Commitment Letter (the "ECL") from Solara Digital Infrastructure Fund VI LP ("Fund VI") to Stratos Merger Sub Inc. ("Merger Sub") in the committed amount of $2,832,888,096, and (b) the Limited Guarantee (the "Limited Guarantee") from Solara Fund VI GP LLC (the "G

II. Transaction Funding Overview — Sources and Uses An understanding of the overall financing structure is essential context for the analysis of the ECL and Limited Guarantee. This Section sets forth the total funding requirement, the sources of funds, and the interplay among the various financing commitments. A. Total Funding Requirement The total funding requirement for the transaction, as set forth in the funds fl

1. Cash merger consideration to non-rolling stockholders: $6,183,944,048. This amount is derived from the headline deal value of $6,800,000,000 less the aggregate rollover equity of $616,055,952 contributed by Jonathan Hargrove and Pinnacle Growth Ventures LLC. Non-rolling stockholders of Cloudium will receive $36.92 per share in cash at closing, and the aggregate cash outlay for their shares constitutes the single l

2. Estimated transaction expenses: $185,000,000. This figure encompasses advisory fees (including fees payable to Osprey Bancroft & Co. as buyer's financial advisor, and to Brightwater National Bank and Pinnacle Capital Markets as Target's financial advisors), legal fees (including fees payable to Drummond & Fenwick LLP, to Ridgeway Phelps & Sato LLP as Target's counsel, and to Winthrop & Hale LLP as lenders' counsel

3. Existing Cloudium indebtedness to be repaid at closing: $820,000,000. This amount consists of $620,000,000 outstanding under the existing term loan and $200,000,000 drawn under the existing revolving credit facility. Both facilities are governed by the Credit Agreement dated March 15, 2021, among Cloudium Technologies plc, as borrower, Atlas Commercial Lending Corp., as administrative agent, and the lenders party

1. Term Loan B: $3,740,000,000. The Term Loan B is a seven-year senior secured term loan facility with a maturity date seven years following the closing date, bearing interest at the Secured Overnight Financing Rate (SOFR) plus 325 basis points per annum. Meridian Atlantic Bank, N.A. will serve as administrative agent and lead arranger. The Term Loan B is the single largest source of funds in the transaction and is c

2. Revolving Credit Facility: $500,000,000 in total capacity, with $0 expected to be drawn at closing. The revolving credit facility is included in the DCL as a committed facility available to the surviving entity following the closing. By not drawing on the revolver at closing, the transaction preserves $500,000,000 of immediately available post-closing liquidity for working capital purposes, seasonal fluctuations,

3. Equity Contribution from Fund VI: $2,832,888,096. This is the amount committed by Fund VI under the ECL and constitutes the subject of the detailed analysis set forth in Section III of this memorandum. The equity contribution includes $425,000,000 sourced from Solara Digital Co-Invest VI-A LP (the "Co-Invest Vehicle"), a co-investment vehicle established for Fund VI's limited partners. The Co-Invest Vehicle's obli

4. Rollover Equity: $616,055,952 in the aggregate, contributed by two rollover participants: • Jonathan Hargrove (CEO of Cloudium): Mr. Hargrove will roll over 50% of his 7,736,400 shares, representing 3,868,200 shares with a per-share value of $36.92, for an aggregate rollover equity contribution of approximately $142,814,544. The remaining 50% of his shares (3,868,200 shares) will be cashed out in the merger. • Pin

III. Equity Commitment Letter — Detailed Analysis This Section provides a detailed analysis of the material terms of the ECL, based on the January 12, 2024 execution-form draft. A. Parties Committing Party. The committing party under the ECL is Solara Digital Infrastructure Fund VI LP ("Fund VI"), a Delaware limited partnership (EIN: 87-4523190). Fund VI is a 2022-vintage infrastructure-focused private equity fund wi

1. Merger consideration. Funding the cash portion of the merger consideration payable to non-rolling stockholders of Cloudium at the effective time of the merger.

2. Transaction expenses. Funding estimated transaction expenses of $185,000,000, inclusive of all advisory, legal, financing, insurance, regulatory, and solicitation costs incurred in connection with the transactions contemplated by the Merger Agreement.

3. Payoff of existing indebtedness. Funding the payoff of Cloudium's existing indebtedness of $820,000,000 outstanding under the Credit Agreement dated March 15, 2021, with Atlas Commercial Lending Corp. as administrative agent, as required by the terms of the Merger Agreement.

4. Escrow deposit. Funding the $544,000,000 escrow deposit (representing 8% of the headline deal value) to be deposited with Cobalt Trust Company, N.A. as escrow agent, in connection with the representation and warranty insurance program and the indemnification provisions of the Merger Agreement. Any excess funds remaining after application to the foregoing purposes will be retained as balance-sheet cash of the survi

1. Closing. The ECL terminates upon the consummation of the merger and the funding of the full equity commitment amount, at which point Fund VI's obligation under the ECL has been fully performed.

2. Valid termination of the Merger Agreement. If the Merger Agreement is validly terminated in accordance with its terms (whether by mutual consent, by either party due to the failure to close by the Outside Date, or by either party for any other reason specified in Article VIII of the Merger Agreement), the ECL terminates concurrently.

3. Payment of the reverse termination fee. If the reverse termination fee of $374,000,000 becomes payable by Merger Sub to Cloudium under the Merger Agreement and is paid in full, the ECL terminates, as the transaction will not proceed to closing.

4. Outside Date. The ECL terminates on June 30, 2024 (the "Outside Date" as defined in the Merger Agreement), subject to any extension of the Outside Date agreed to by the parties to the Merger Agreement. Upon termination of the ECL, Fund VI has no further obligation to fund the equity contribution, and no party has any further rights or obligations under the ECL, except for those provisions that by their terms survi

I. Co-Investment Mechanics The Co-Investment Agreement (execution version dated January 22, 2024) governs the $425,000,000 co-investment from Solara Digital Co-Invest VI-A LP. The Co-Invest Vehicle is a separate Delaware limited partnership whose general partner is Solara Fund VI GP LLC (the same entity that serves as general partner of Fund VI), and its limited partners consist of a subset of Fund VI's institutional

IV. Limited Guarantee — Detailed Analysis This Section provides a detailed analysis of the material terms of the Limited Guarantee, based on the January 12, 2024 execution-form draft. A. Parties Guarantor. The guarantor under the Limited Guarantee is Solara Fund VI GP LLC, a Delaware limited liability company. As noted above, the Guarantor is the general partner of both Fund VI and the Co-Invest Vehicle. The Guaranto

1. Reverse termination fee. Payment of the reverse termination fee under Section 8.3 of the Merger Agreement, up to a maximum of $221,000,000.

2. Enforcement costs. Reimbursement of Cloudium's reasonable out-of-pocket enforcement costs incurred in enforcing the Limited Guarantee, up to a maximum of $25,000,000. The Limited Guarantee does not cover: • The equity commitment itself ($2,832,888,096) or any obligation of Fund VI under the ECL; • Specific performance of the obligation to consummate the closing; • Any obligation under the Merger Agreement or any a

1. Buyer's willful breach. If the Merger Agreement is terminated by Cloudium due to a willful and material breach by Merger Sub or Fund VI of any of their representations, warranties, covenants, or obligations under the Merger Agreement, and such breach is the proximate cause of the failure of the conditions to closing to be satisfied.

2. Failure to close (financing failure). If Merger Sub fails to consummate the closing at the time required under the Merger Agreement when all conditions to closing set forth in Article VII have been satisfied or waived (other than those conditions that by their nature are to be satisfied at closing, each of which is capable of being satisfied), and Cloudium has irrevocably confirmed that it is ready, willing, and a

3. Other triggering events. Other events specified in Section 8.3 of the Merger Agreement as giving rise to the reverse termination fee obligation, including certain terminations following a Buyer Intervening Event (as defined in the Merger Agreement). The Limited Guarantee is not triggered by termination events where the termination fee (payable by Cloudium to Fund VI) applies. Those events — which include Cloudium'

1. Closing. The Limited Guarantee terminates upon consummation of the merger, at which point the merger consideration has been paid and the guarantee is no longer needed.

2. Termination of the Merger Agreement (no RTF payable). If the Merger Agreement is terminated in circumstances where no reverse termination fee is payable (e.g., termination by mutual consent, termination by either party due to a failure to obtain regulatory approval, or termination by Fund VI/Merger Sub for a Target breach), the Limited Guarantee terminates concurrently, as there is no underlying obligation for the

3. Payment in full. If the guaranteed obligations have been paid in full (i.e., the reverse termination fee has been paid by Merger Sub or the Guarantor, and all enforcement costs have been reimbursed), the Limited Guarantee terminates.

4. Outside Date. The Limited Guarantee terminates on June 30, 2024 (the Outside Date), provided that no claim under the Limited Guarantee is then pending. If a claim is pending on the Outside Date, the Limited Guarantee continues in effect solely with respect to such pending claim until the final resolution thereof. H. Exclusivity of Remedy The Limited Guarantee includes a comprehensive "exclusive remedy" provision t

I. Governing Law and Jurisdiction The Limited Guarantee is governed by and construed in accordance with the laws of the State of Delaware, without giving effect to any choice-of-law or conflict-of-law rules. The parties have consented to the exclusive jurisdiction of the Court of Chancery of the State of Delaware (or, if that court declines jurisdiction, the Superior Court of the State of Delaware or the United State

V. Interplay Between ECL, Limited Guarantee, and Merger Agreement Remedies The ECL, the Limited Guarantee, and the remedies provisions of the Merger Agreement are designed to function as an integrated framework that allocates risk between the buyer side and the seller side of the transaction. This Section analyzes the interplay among these instruments and the options available to Cloudium in the event of a buyer-side

1. Specific performance. Under Section 10.12 of the Merger Agreement, Cloudium may seek an order of the Court of Chancery of the State of Delaware compelling Solara / Fund VI to cause the equity financing to be funded under the ECL and to cause Merger Sub to consummate the merger at the closing. This right of specific performance is discussed in detail in Section V.B below.

2. Reverse termination fee. If the Merger Agreement is terminated by Cloudium in circumstances that trigger the reverse termination fee under Section 8.3 of the Merger Agreement, Merger Sub is obligated to pay Cloudium $374,000,000 as liquidated damages. This amount is payable by Merger Sub (not Fund VI), although Fund VI's assets (to the extent contributed to Merger Sub) would be available to satisfy the payment.

3. Limited Guarantee. If the reverse termination fee is payable and Merger Sub does not pay, Cloudium may enforce the Limited Guarantee against Solara Fund VI GP LLC for up to $246,000,000 (consisting of up to $221,000,000 in respect of the reverse termination fee and up to $25,000,000 in respect of enforcement costs). Election of Remedies. The Merger Agreement requires Cloudium to elect between specific performance

1. All conditions to Merger Sub's obligation to close under Article VII of the Merger Agreement must have been satisfied or waived (other than those conditions that by their nature are to be satisfied at the closing itself, each of which must be capable of being satisfied at the closing).

2. The debt financing must be available to be funded at closing (i.e., all conditions to the lenders' funding obligations under the DCL must have been satisfied or waived, and the lenders must be prepared to fund the Term Loan B), or the marketing period specified in the Merger Agreement must have been completed.

3. Cloudium must have irrevocably confirmed in writing to Merger Sub and Fund VI that it is ready, willing, and able to consummate the closing if specific performance is granted. Delaware Law Support. Delaware law supports the enforceability of specific performance provisions in merger agreements, particularly in the context of sponsor-backed going-private transactions. The Delaware Court of Chancery has granted spec

VI. Delaware Law Considerations This Section addresses the key Delaware law considerations bearing on the enforceability of the ECL and the Limited Guarantee. A. Enforceability of the ECL Under Delaware law, an equity commitment letter is a binding contractual obligation, enforceable in accordance with its stated terms and subject to its stated conditions. The Delaware Court of Chancery has consistently enforced equi