Contract analysis

I. Executive Summary This memorandum analyzes the application of Section 721(a) of the Internal Revenue Code of 1986, as amended (the "Code" or "IRC"), to the contributions of portfolio assets by four Legacy Offshore Vehicles (as defined below) to the newly formed Solara Consolidated Master Fund LP (the "Master Fund" or "Master Fund LP") in Steps 2 through 4 of the proposed multi-step reorganization (the "Reorganizat

II. Statement of Facts A. Solara and Its Fund Platform Solara Digital Infrastructure LP ("Solara" or "SDILP") is a Delaware limited partnership formed on March 17, 2014, with its principal office located at 1200 Market Street, Suite 3400, Wilmington, Delaware 19801. As of March 31, 2025, Solara manages approximately $14.7 billion in assets under management across its family of private equity fund vehicles. Solara is

1. Fund IV Complex (Vintage 2021; Final Close June 15, 2021) Solara Digital Partners Fund IV LP (EIN 85-2103748) is a Delaware limited partnership with a fund size of $4.2 billion, of which approximately 72% has been deployed as of the date hereof. Its general partner is Solara Digital Infrastructure GP LLC. U.S. taxable investors invest directly in Fund IV LP. Fund IV LP is not contributing assets to the Master Fund

2. Fund V Complex (Vintage 2023; Final Close September 30, 2023) Solara Digital Partners Fund V LP (EIN 88-3467219) is a Delaware limited partnership with a fund size of $5.6 billion, of which approximately 38% has been deployed as of the date hereof. Its general partner is Solara Digital Infrastructure GP LLC. U.S. taxable investors invest directly in Fund V LP. Fund V LP is not contributing assets to the Master Fun

I. Third-Party Advisors and Counsel The following third-party advisors and counsel are engaged in connection with the Reorganization and the PLR request: Calderwood & Harkness LLP (this firm) serves as U.S. tax counsel to Solara and is responsible for preparing and submitting the PLR request to the IRS. Lead associate Robert Jansen and working associate Garrett Simmons, under the supervision of responsible partner Le

III. Issues Presented This memorandum addresses the following issues:

1. Whether the contributions of portfolio assets by Solara Digital Partners Fund IV-A (Cayman) LP to the Master Fund LP in Step 2 of the Reorganization constitute tax-free contributions of property to a partnership under IRC § 721(a), such that no gain or loss is recognized by Fund IV-A Cayman or its partners.

2. Whether the contributions of portfolio assets by Solara Digital Partners Fund IV-B (Luxembourg) SCSp to the Master Fund LP in Step 3 of the Reorganization constitute tax-free contributions of property to a partnership under IRC § 721(a), such that no gain or loss is recognized by Fund IV-B Lux or its partners.

3. Whether the contributions of portfolio assets by Solara Digital Partners Fund V-A (Cayman) LP and Solara Digital Partners Fund V-B (Luxembourg) SCSp to the Master Fund LP in Step 4 of the Reorganization constitute tax-free contributions of property to a partnership under IRC § 721(a), such that no gain or loss is recognized by the contributing partnerships or their partners.

4. Whether the Master Fund LP takes a carryover basis in the contributed assets under IRC § 723.

5. Whether the contributing partnerships' holding periods in the contributed assets tack to the Master Fund LP under IRC § 1223(2).

6. Whether the aggregate liabilities assumed by the Master Fund LP in connection with the contributions affect the § 721(a) analysis, and the proper treatment of such liabilities under IRC § 752 (cross-reference to the companion § 752 memorandum).

IV. Short Answer / Conclusions Based on our analysis of the applicable statutory provisions, Treasury Regulations, IRS guidance, and relevant case law, we reach the following conclusions: First, all contributions of portfolio assets in Steps 2 through 4 of the Reorganization qualify as tax-free contributions of property to a partnership under IRC § 721(a). Each contribution satisfies the requirements of § 721(a) beca

V. Discussion and Legal Analysis A. General Rule of IRC § 721(a) — Nonrecognition on Contribution to Partnership

Section 721(a) of the Internal Revenue Code provides the foundational nonrecognition rule for contributions of property to partnerships: "No gain or loss shall be recognized to a partnership or to any of its partners in the case of a contribution of property to the partnership in exchange for an interest in the partnership." IRC § 721(a). The statute is broad in its application and reflects a deliberate Congressional

2. Policy Rationale The nonrecognition treatment afforded by § 721(a) reflects the aggregate theory of partnerships under Subchapter K of the Code. Under the aggregate theory, a partnership is viewed not as a separate entity but as an aggregation of its partners' interests. A contribution of property to a partnership is therefore treated as a mere change in the form of ownership — the contributing partner continues t

3. Scope — "Property" The term "property" for purposes of § 721(a) is construed broadly and includes virtually any asset or interest that can be the subject of a contribution to a partnership. Treasury Regulations § 1.721-1(a) confirms that § 721(a) applies to contributions of property, including money, and that the term "property" encompasses partnership interests, corporate stock, real property, personal property,

Section 721(a) requires that the contribution of property be made "in exchange for an interest in the partnership." This requirement ensures that the nonrecognition rule applies only to bona fide contributions to a partnership in a partner capacity, and not to transfers that are more properly characterized as sales, loans, or service-related payments. In the present case, each contributing Legacy Offshore Vehicle rec

1. Contributing Entity The contributing entity in Step 2 is Solara Digital Partners Fund IV-A (Cayman) LP, a Cayman Islands exempted limited partnership classified as a partnership for U.S. federal income tax purposes (EIN 98-6241503). Fund IV-A Cayman has been treated as a partnership for U.S. federal income tax purposes since its inception. As a Cayman Islands exempted limited partnership with two or more members,

2. Receiving Entity The receiving entity in Step 2 is Solara Consolidated Master Fund LP, a Delaware limited partnership to be formed on or about September 15, 2025. The Master Fund LP will be classified as a partnership for U.S. federal income tax purposes pursuant to a Form 8832 check-the-box election filed with the IRS effective as of September 15, 2025. As a Delaware limited partnership with two or more members,

3. Assets Contributed Fund IV-A Cayman will contribute all of its portfolio company interests to the Master Fund LP. These assets include, but are not limited to, the following: (a) A 60% equity interest in NovaBright Data Systems Inc. (a Delaware corporation engaged in the ownership and operation of Tier IV data centers across the mid-Atlantic and southeastern United States). The FMV of Fund IV-A Cayman's 60% intere

4. Consideration Received In exchange for the contribution of all of its portfolio company interests, Fund IV-A Cayman will receive a limited partnership interest in the Master Fund LP. The limited partnership interest will represent a percentage interest in the Master Fund LP determined by the ratio of the FMV of Fund IV-A Cayman's contributed assets to the aggregate FMV of all assets held by (and contributed to) th

5. Analysis. Section 721(a) applies to the contribution in Step 2 because each element of the statute is satisfied: (a) Property. Fund IV-A Cayman is contributing "property" within the meaning of § 721(a). The portfolio company interests — including equity interests in a Delaware corporation (NovaBright), a Delaware limited partnership (Thorngate), and other entities — are each "property" as that term is construed un

1. Contributing Entity The contributing entity in Step 3 is Solara Digital Partners Fund IV-B (Luxembourg) SCSp, a Luxembourg société en commandite spéciale (EIN 98-6241571; RCS number B 248193). Fund IV-B Lux is classified as a partnership for U.S. federal income tax purposes under Treasury Regulations § 301.7701-3. A Luxembourg SCSp is an "eligible entity" within the meaning of Treasury Regulations § 301.7701-3(a)

2. Receiving Entity The receiving entity in Step 3 is the same as in Step 2: Solara Consolidated Master Fund LP, a Delaware limited partnership classified as a partnership for U.S. federal income tax purposes. At the time of the Step 3 contribution (October 15, 2025), the Master Fund LP will already hold the portfolio company interests contributed by Fund IV-A Cayman in Step 2 (October 1, 2025).

3. Assets Contributed Fund IV-B Lux will contribute all of its portfolio company interests to the Master Fund LP. These assets include, but are not limited to, the following: (a) A 100% equity interest in Crestline Cloud Solutions LLC (a Delaware limited liability company treated as a disregarded entity for U.S. federal income tax purposes, engaged in the development and licensing of a cloud-based enterprise SaaS pla

4. Currency Considerations All amounts denominated in euros in connection with the Fund IV-B Lux and Fund V-B Lux contributions are converted to U.S. dollars at the 1.08 EUR/USD exchange rate, which is used uniformly throughout the Reorganization analysis. This exchange rate reflects the spot rate prevailing at the time of the preliminary valuation analysis and will be updated to reflect the actual spot rate on the d

Section 721(a) applies to the dollar-equivalent values of the contributed assets. No separate gain or loss under IRC § 988 arises in connection with the contribution of non-currency property (i.e., portfolio company interests) to the Master Fund LP. Section 988 gain or loss is relevant only to transactions involving "section 988 transactions" as defined in IRC § 988(c)(1), which generally include the disposition of n

5. Analysis. Section 721(a) applies to the contribution in Step 3 on the same basis as the analysis set forth in Section V.B.5 above with respect to Step 2. Fund IV-B Lux is contributing "property" (portfolio company interests) to a "partnership" (the Master Fund LP) "in exchange for an interest in the partnership" (a limited partnership interest in the Master Fund LP). Each element of § 721(a) is satisfied. Accordin

1. Fund V-A Cayman Contribution a. Contributing Entity. The contributing entity is Solara Digital Partners Fund V-A (Cayman) LP, a Cayman Islands exempted limited partnership classified as a partnership for U.S. federal income tax purposes (EIN 98-7891234; CIMA registration MF-89103). Fund V-A Cayman is an eligible entity under Treasury Regulations § 301.7701-3 with a default classification as a partnership. b. Asset

2. Fund V-B Luxembourg Contribution a. Contributing Entity. The contributing entity is Solara Digital Partners Fund V-B (Luxembourg) SCSp, a Luxembourg société en commandite spéciale classified as a partnership for U.S. federal income tax purposes (EIN 98-7891267; RCS number B 271056). The entity classification analysis for Fund V-B Lux is identical to the analysis set forth in Section V.C.1 above for Fund IV-B Lux.

1. General Principles A critical feature of the Reorganization is that each contributing entity is itself a partnership, and each contributing entity is contributing its assets to another partnership (the Master Fund LP). IRC § 721(a) applies equally to contributions by partnerships (acting as "partners") to other partnerships. There is no limitation in the statute or the Treasury Regulations that would restrict the

2. Tiered Partnership Considerations Following the completion of Steps 2 through 4, the result will be a tiered partnership structure: each Legacy Offshore Vehicle (as an upper-tier partnership) will hold a limited partnership interest in the Master Fund LP (the lower-tier partnership). The Master Fund LP will hold the portfolio company interests directly. The existing limited partners of each Legacy Offshore Vehicle

3. Substance of the Transaction The contributions in Steps 2 through 4 are bona fide contributions of property in exchange for partnership interests. The contributing partnerships are not acting as dealers, service providers, or disguised sellers in connection with the contributions. Each contributing Legacy Offshore Vehicle is contributing its entire portfolio of assets to the Master Fund LP in exchange for a limite

1. Section 721(b) — Investment Company Exception IRC § 721(b) provides that § 721(a) "shall not apply to gain realized on a transfer of property to a partnership which would be treated as an investment company (within the meaning of section 351(e)) if the partnership were incorporated." In other words, if the Master Fund LP, hypothetically treated as if it were a corporation, would be an "investment company" as defin