Contract analysis

I. Executive Summary and Purpose This memorandum analyzes the working-capital true-up procedures under Section 2.7 of the Agreement and Plan of Merger, dated January 22, 2024 (the "Merger Agreement"), by and among Cloudium Technologies plc, a Delaware corporation ("Cloudium" or the "Company"), Stratos Merger Sub Inc., a Delaware corporation and indirect wholly owned subsidiary of Solara Digital Infrastructure Fund VI

II. Overview of Purchase Price Adjustment Mechanism (Section 2.7) A. Structure of the Adjustment The Merger Agreement employs a customary post-closing purchase price adjustment mechanism designed to ensure that the aggregate merger consideration reflects the actual financial condition of Cloudium and its subsidiaries as of the Effective Time, rather than the estimates that were necessarily relied upon at closing. The

1. Closing Working Capital. Closing Working Capital is defined as the net current assets minus the net current liabilities of Cloudium and its subsidiaries as of the Effective Time, calculated in accordance with the accounting principles, policies, practices, procedures, methodologies, and definitions specified in the Merger Agreement and the accompanying accounting principles schedule (the "Accounting Principles").

2. Closing Cash. Closing Cash is defined as the aggregate amount of unrestricted cash and cash equivalents held by Cloudium and its subsidiaries as of the Effective Time, determined on a consolidated basis. At closing, Cloudium estimated Closing Cash at approximately $180,000,000. The final determination of Closing Cash must account for all cash held across Cloudium's global operations, including cash held by its sub

3. Closing Indebtedness. Closing Indebtedness is defined as all outstanding indebtedness of Cloudium and its subsidiaries as of immediately prior to the Effective Time, net of any amounts repaid at or in connection with the closing. The existing Cloudium debt facility consisted of a term loan in the principal amount of $620,000,000 and a revolving credit facility in the committed amount of $200,000,000, both under a

4. Transaction Expenses. Transaction Expenses are defined as all unpaid transaction expenses of Cloudium and its subsidiaries as of the Effective Time. Transaction expenses include, without limitation, all fees, costs, and expenses incurred by or on behalf of the Company in connection with the negotiation, execution, and consummation of the Merger, including advisory fees, legal fees, financing costs, insurance costs

III. Estimated Closing Statement A. Delivery at Closing In accordance with Section 2.6 of the Merger Agreement, Cloudium delivered the Estimated Closing Statement to Fund VI on July 8, 2024, one business day prior to the closing date. The Estimated Closing Statement was prepared by Cloudium's finance team under the direction of Sienna Whitfield, the Company's Chief Financial Officer, and set forth Cloudium's good-fai

IV. Final Closing Statement — Preparation and Delivery Timeline A. Obligation to Prepare Under Section 2.7 of the Merger Agreement, Fund VI (as the ultimate parent of the surviving entity following the Merger) is responsible for causing the preparation and delivery of a final closing statement (the "Final Closing Statement") setting forth the final, actual amounts of each of the four adjustment components — Closing W

Section 2.7 of the Merger Agreement requires delivery of the Final Closing Statement to the Stockholder Representative within 90 calendar days following the closing date. The closing date is July 9, 2024. Accordingly, the Final Closing Statement must be delivered to Douglas Pemberton, in his capacity as Stockholder Representative, no later than: October 7, 2024 This deadline is a firm contractual obligation and shoul

V. Review Period and Objection Procedures A. Stockholder Representative's Review Period Upon receipt of the Final Closing Statement, the Stockholder Representative (Douglas Pemberton) has a review period — which, under Section 2.7 of the Merger Agreement, is 30 calendar days — within which to examine the Final Closing Statement and all supporting documentation and to submit written objections, if any. Assuming that t

VI. Dispute Resolution Procedures A. Negotiation Period In the event that the Stockholder Representative delivers a timely Dispute Notice, Section 2.7 of the Merger Agreement provides that the parties — Fund VI and the Stockholder Representative — must first attempt to resolve the disputed items through good-faith negotiation. The negotiation period is typically 30 calendar days from the date on which Fund VI receive

VII. Payment of Adjustment Amount A. Determination of Final Adjustment Once the Final Closing Statement becomes final and binding — whether through deemed acceptance (no Dispute Notice), negotiated resolution, or Accounting Referee determination — the purchase price adjustment amount is calculated as the net aggregate of the following components: (a) Working Capital Adjustment: The difference between the actual Closi

VIII. Key Accounting and Definitional Considerations A. Accounting Principles Consistency A foundational principle of the purchase price adjustment mechanism is that the Final Closing Statement must be prepared using the same accounting principles, policies, practices, procedures, and methodologies — including IFRS as historically applied by Cloudium and as audited by Harwell & Dobson LLP — that were used in the prep

IX. Coordination with Escrow and Indemnification Framework A. Escrow Fund At closing on July 9, 2024, $544,000,000 was deposited into an escrow account with Cobalt Trust Company, N.A. (the "Escrow Agent"), as confirmed by wire transfer on the closing date. Laura Ng, Vice President, Escrow Services, at Cobalt Trust Company serves as the primary contact for the escrow account. The escrow fund was established pursuant t