Contract analysis

I. Purpose and Background The purpose of this memorandum is to provide the Solara deal team with a comprehensive practical guide to the indemnification claim procedures established under Article IX of the Agreement and Plan of Merger (the "Merger Agreement"), dated January 22, 2024, among Cloudium Technologies plc, a public limited company organized under the laws of England and Wales ("Cloudium" or the "Target"), St

II. Overview of the Indemnification Framework A. Indemnifying Parties and Indemnified Parties Under Article IX of the Merger Agreement, indemnification runs from the former stockholders of Cloudium Technologies plc (collectively, the "Indemnifying Parties") to Solara Digital Infrastructure Fund VI LP and its affiliates, including the surviving corporation (Cloudium, as it exists post-merger) and its direct and indire

III. Financial Thresholds and Limitations The Merger Agreement establishes a tiered system of financial thresholds that govern the availability and extent of indemnification for breaches of general representations and warranties. Understanding the interaction among these thresholds is essential for the Solara deal team to assess the recoverability of any identified losses. A. De Minimis Threshold

Section 9.5(a) of the Merger Agreement provides that individual claims (or a series of related claims arising from the same or substantially similar facts or circumstances) with aggregate losses below $500,000 are excluded entirely from the indemnification framework. These sub-threshold claims do not count toward the basket and are not recoverable under the general indemnification provisions, regardless of whether th

Section 9.5(b) of the Merger Agreement establishes a basket of $51,000,000, which represents 0.75% of the $6,800,000,000 deal value. The aggregate amount of all qualifying indemnifiable losses (i.e., losses that individually exceed the $500,000 de minimis threshold) must exceed $51,000,000 before any indemnification obligation of the Indemnifying Parties arises under the general indemnification provisions. Critically

Section 9.5(c) of the Merger Agreement caps the maximum aggregate indemnification obligation of the Indemnifying Parties for breaches of general representations and warranties at 15% of the deal value, which equals $1,020,000,000. This cap represents the ceiling on Solara's contractual indemnification recovery for general claims. The general indemnification cap does not apply to the following categories of losses, wh

IV. Uncapped / Special Indemnities As noted above, certain categories of losses are not subject to the de minimis threshold, the basket, or the general indemnification cap. These are referred to as "Uncapped" or "Special" indemnities under the Merger Agreement and represent categories of risk that were deemed sufficiently significant during the negotiation process to warrant unlimited indemnification coverage (subjec

V. Escrow Mechanics A. Escrow Fund At the closing on July 9, 2024, an aggregate amount of $544,000,000 — representing 8% of the $6,800,000,000 deal value — was deposited with Cobalt Trust Company as the escrow agent. This deposit was confirmed by wire confirmation received on the Closing Date. The contact at Cobalt Trust Company for escrow-related matters is Laura Ng, Vice President, Escrow Services, located at 100 W

VI. Notice Requirements and Claim Procedures A. Notice to Stockholder Representative Stockholder Representative. Douglas Pemberton has been appointed as the Stockholder Representative under the Stockholder Representative Agreement dated January 22, 2024. Mr. Pemberton served as the Independent Board Chair of Cloudium Technologies plc prior to the closing of the Transaction and was selected by the requisite vote of Cl

1. Description of the Claim. A description of the claim in reasonable detail, including the nature of the alleged breach and the specific factual basis for the claim. The description should identify the representation, warranty, or covenant that has been breached and the circumstances giving rise to the breach.

2. Identification of Applicable Provisions. Identification of the specific section(s) of the Merger Agreement (and, where applicable, the disclosure schedules) that have been breached or that form the basis for the claim.

3. Estimated Amount of Losses. The estimated amount of losses, if reasonably determinable at the time of notice. If the amount of losses is not yet reasonably determinable, the notice must include a statement to that effect, together with a description of the basis for the claim and the reasons why the amount is not yet ascertainable. In such cases, Solara should update the estimated loss amount as additional informa

4. Supporting Documentation. Copies of any supporting documentation available at the time of notice, including but not limited to correspondence, contracts, reports, analyses, and other materials that are relevant to the claim. While the Merger Agreement does not require that all supporting documentation be included at the time of initial notice, providing available documentation at the outset strengthens the claim a

5. Categorization of the Claim. A statement as to whether the claim is asserted as (a) a general indemnification claim subject to the de minimis threshold, basket, and general cap, or (b) an uncapped or special indemnity claim (i.e., fraud, willful breach, tax indemnity, or specified litigation matter).

6. R&W Insurance Status. A statement as to whether a corresponding claim is being or will be submitted under the R&W insurance policy issued by Northfield Assurance (Policy No. NFA-TRI-2024-00487), and the status of any such submission. We recommend that all claim notices be drafted or reviewed by Calderwood & Harkness prior to submission to ensure compliance with the form and content requirements of the Merger Agree

VII. Claims Against Rollover Participants As noted in Section II.A above, Jonathan Hargrove and Pinnacle Growth Ventures LLC (Evelyn Carmichael, Managing Member; 777 Third Avenue, 28th Floor, New York, NY 10017) participated in the Transaction as rollover equity investors. Under the terms of their respective Rollover Agreements (execution versions, dated January 22, 2024), both Mr. Hargrove and Pinnacle Growth Ventur

1. First: Solara's first recourse is to the escrow fund held by Cobalt Trust Company ($544,000,000 at closing).

2. Second: To the extent that the escrow fund is insufficient to fully satisfy Solara's indemnifiable losses (whether because the escrow has been partially released or because losses exceed the escrow balance), Solara may pursue direct claims against the rollover participants — Mr. Hargrove and Pinnacle Growth Ventures — up to their respective pro rata shares of the general indemnification cap.

3. Third: For losses in excess of the retention, Solara may submit claims under the R&W insurance policy issued by Northfield Assurance (discussed in Section VIII below). Notice and Timing. Claims against the rollover participants follow the same notice and timing procedures as claims against the escrow and the Stockholder Representative, as described in Section VI above. In addition to delivering claim notices to th

VIII. R&W Insurance — Claim Submission Procedures A. Policy Overview In connection with the Transaction, Solara obtained a buyer-side representation and warranty insurance policy from Northfield Assurance Ltd. The key parameters of the policy are summarized below: The R&W policy is a direct contract between Solara (as the named insured) and Northfield Assurance Ltd. (as the insurer). It is not a guarantee or surety o

1. A description of the loss event and the relevant representation(s) or warranty(ies) that have been or are alleged to have been breached;

2. The estimated loss amount, if reasonably determinable, or a statement that the amount is not yet ascertainable with a description of the basis for the claim;

3. Copies of the indemnification claim notice delivered to the Stockholder Representative and the escrow agent;

4. Copies of any supporting documentation relevant to the claim;

5. Confirmation that the retention has been exceeded or is expected to be exceeded, together with a summary of the amounts incurred or expected to be incurred toward the retention; and

6. Any other information reasonably requested by Northfield Assurance in connection with its evaluation of the claim. Timing and Late Notice. While the R&W policy requires prompt notice, late notice does not automatically vitiate coverage. However, if Northfield Assurance can demonstrate that it was prejudiced by the delay in receiving notice — for example, if the delay impaired its ability to investigate the claim,

IX. Recommended Internal Protocols for Solara A. Claim Identification and Tracking Given the eighteen-month survival period and the complex interplay among the contractual indemnification provisions, the escrow, the rollover participant obligations, and the R&W insurance policy, we strongly recommend that the Solara deal team implement a structured claim identification and tracking process. Designated Claim Coordinat