Contract analysis

I. Executive Summary The purpose of this memorandum is to analyze and benchmark the termination fee and reverse termination fee negotiated in the draft Agreement and Plan of Merger (the "Merger Agreement") among Cloudium Technologies plc ("Cloudium" or the "Company"), Stratos Merger Sub Inc. ("Merger Sub"), and Solara Digital Infrastructure Fund VI LP ("Fund VI" or "Solara"). This analysis is prepared in advance of t

II. Transaction Background Parties Solara Digital Infrastructure LP is a Delaware limited partnership and one of the preeminent private equity sponsors focused on digital infrastructure and enterprise software investments. The firm manages approximately $38 billion in assets under management across multiple fund vintages. The investing entity for this transaction is Solara Digital Infrastructure Fund VI LP ("Fund VI"

III. Termination Fee Analysis A. Summary of Termination Fee Provisions Under Section 8.03(a) of the draft Merger Agreement, Cloudium is obligated to pay Fund VI a termination fee of $221,000,000 (the "Termination Fee"), representing 3.25% of the $6,800,000,000 aggregate deal value. The Termination Fee is payable upon the occurrence of any of the following triggering events: (i) Superior Proposal Termination. Cloudium

IV. Reverse Termination Fee Analysis A. Summary of Reverse Termination Fee Provisions Under Section 8.03(b) of the draft Merger Agreement, Fund VI is obligated to pay Cloudium a reverse termination fee of $374,000,000 (the "Reverse Termination Fee" or "RTF"), representing 5.5% of the $6,800,000,000 aggregate deal value. The Reverse Termination Fee is payable upon the occurrence of any of the following triggering even

V. Interplay with Limited Guarantee A. Structure of the Limited Guarantee Concurrent with the execution of the Merger Agreement, the parties anticipate the execution of a Limited Guarantee dated January 22, 2024 (the "Limited Guarantee") by and among Solara Fund VI GP LLC (the "Guarantor"), as general partner of Fund VI, and Cloudium Technologies plc (the "Beneficiary"). The material terms of the Limited Guarantee ar

VI. Interaction Between Termination Fee, Reverse Termination Fee, and Other Deal Protections A. No-Shop Provision and Fiduciary Out The Merger Agreement includes a no-shop provision effective from signing (January 22, 2024) pursuant to Section 6.05(a). From and after the execution of the Merger Agreement, Cloudium is prohibited from, directly or indirectly, (i) soliciting, initiating, proposing, or knowingly encourag

VII. Risk Assessment and Recommendations A. Termination Fee Risk to Cloudium Risk. If a Superior Proposal emerges during the pre-closing period and the Cloudium board exercises its fiduciary out to accept such Superior Proposal, Cloudium is obligated to pay the $221,000,000 Termination Fee to Fund VI. This liability represents a direct cost to Cloudium and, indirectly, to a successful topping bidder (which would typi

VIII. Conclusion Based on the foregoing analysis, we offer the following conclusions:

1. Termination Fee. The 3.25% Termination Fee ($221,000,000) is positioned at the midpoint of the market range for large-cap technology take-private transactions, is enforceable under Delaware law, and provides adequate deal protection for Solara without being preclusive to competing bids or impairing the Cloudium board's ability to exercise its fiduciary duties.

2. Reverse Termination Fee. The 5.5% Reverse Termination Fee ($374,000,000) is within the standard range for PE take-privates, appropriately compensates Cloudium for financing and closing risk, and is enforceable as a liquidated damages provision under Delaware law. The 1.69x RTF/TF ratio is consistent with the 1.5x to 2.0x band observed in comparable transactions.

3. Limited Guarantee. The Limited Guarantee from Fund VI GP LLC ($246,000,000) provides credit-worthy recourse for Cloudium while limiting fund-level exposure in a market-standard manner. The guarantee coverage — equal to the termination fee amount plus enforcement costs — is appropriate and consistent with prevailing practice.

4. Overall Deal Protection Framework. The interplay among the Termination Fee, Reverse Termination Fee, Limited Guarantee, no-shop provision, fiduciary out, and specific performance rights creates a balanced deal-protection framework that is consistent with Delaware law and current market practice. Each element complements the others, and the overall architecture appropriately allocates risk between the parties.

5. Recommendation for January 15 Negotiation Session. We recommend maintaining the current positions on both fees. The deal team should resist any further increase in the RTF or expansion of the Limited Guarantee to cover the full RTF amount. If Ridgeway Phelps seeks additional concessions, the team should emphasize that the current terms are at or above market median and reflect a fair, arm's-length negotiation. Any