1041-00001 · Thorngate Capital Partners · Closing

final-invoice-summary-closing-letter.docx DOCUMENT Antitrust

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CONFIDENTIAL — ATTORNEY-CLIENT PRIVILEGED

CALDERWOOD & HARKNESS LLP Attorneys at Law

1900 K Street NW, Suite 800 Washington, DC 20006 Telephone: (202) 555-7400 Facsimile: (202) 555-7401 www.calderwoodharkness.com

January 26, 2024

VIA ELECTRONIC MAIL AND HAND DELIVERY

Graham A. Whitfield Founding Partner & Chief Executive Officer Solara Digital Infrastructure GP LLC

Sandra K. Levinson Co-Managing Partner & Chief Investment Officer Solara Digital Infrastructure GP LLC

Solara Digital Infrastructure LP 200 Tatnall Street, Suite 1400 Wilmington, DE 19801

Re: Final Invoice Summary and Matter Closing — Second Request Compliance, FTC File No. 231-0487

In the Matter of: Solara Digital Infrastructure Fund IV LP / Pinnacle Cloud Systems, Inc.

Our Matter No.: 1041-00001

Reference: Engagement Letter dated May 30, 2023

Dear Mr. Whitfield and Ms. Levinson:

1. Purpose and Engagement Closure Confirmation

We write to transmit the final invoice summary for the above-referenced matter and to confirm the formal closure of our engagement in connection with this representation. This letter serves as a comprehensive record of the services rendered, fees and costs incurred, and the disposition of the matter, and should be retained for your files alongside the enclosed invoices and supporting documentation.

As you will recall, Calderwood & Harkness LLP was retained by Solara Digital Infrastructure LP ("Solara" or the "Client") pursuant to the Engagement Letter dated May 30, 2023 (the "Engagement Letter"), executed by Mr. Whitfield on behalf of Solara Digital Infrastructure GP LLC, acting in its capacity as general partner of Solara Digital Infrastructure LP. The scope of that engagement was defined as the representation of Solara in connection with compliance with the Second Request for Additional Information and Documentary Material ("Second Request") issued by the Federal Trade Commission ("FTC" or the "Commission") on May 29, 2023, in FTC File No. 231-0487, relating to Solara Digital Infrastructure Fund IV LP's ("Fund IV") proposed acquisition of all of the outstanding capital stock of Pinnacle Cloud Systems, Inc. ("Pinnacle" or "PCS").

We are pleased to confirm that the FTC allowed the statutory waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), to expire without challenge on January 19, 2024, thereby clearing the transaction from an antitrust standpoint. No enforcement action was taken by the Commission, and no conditions, consent decree, or other remedial measures were imposed.

In light of the expiration of the waiting period and the completion of all associated work, the effective date of matter closure is January 19, 2024. The total duration of the engagement spanned from May 30, 2023, through January 19, 2024, a period of 235 calendar days measured from the date of Second Request issuance through the date of antitrust clearance. Post-clearance administrative work, including the preparation of this letter and the final invoice, has been completed through the date of this letter.

2. Summary of Services Rendered

Set forth below is a brief recapitulation of the scope of work performed by Calderwood & Harkness across the duration of the engagement. This summary is intended to provide a consolidated record of the principal workstreams and milestones for your internal files and is not intended to be an exhaustive description of every task performed during the representation.

2.1 Second Request Strategy and Compliance Planning

Immediately upon receipt of the Second Request, Calderwood & Harkness developed a comprehensive compliance strategy designed to address all 47 specifications set forth in the FTC's Second Request. This strategy encompassed the identification of responsive custodians and data sources, the sequencing of document collection and review efforts, the design of search methodologies and relevance criteria, and the development of a structured data response plan for each of the quantitative data specifications.

A central element of our compliance planning involved close and ongoing coordination with Hargrove, Pelletier & Stein LLP ("HPS"), outside counsel to Pinnacle Cloud Systems, Inc. and the Sellers named in the Stock Purchase Agreement, including the Sellers' Representative, Thorngate Capital Partners LP. Our primary points of contact at HPS were Catherine A. Pelletier, partner, and David L. Morrissette, senior associate. This coordination was essential to ensure consistency across the parallel compliance efforts on both the buyer and seller sides of the transaction, to avoid duplicative productions, and to present a unified advocacy position to FTC Staff.

Additionally, Calderwood & Harkness coordinated extensively with client personnel at Solara Digital Infrastructure GP LLC, Solara Digital Infrastructure Fund IV LP, and Meridian Workflow Solutions, Inc. ("Meridian"), a portfolio company of Fund IV whose operations were relevant to the FTC's competitive analysis. This coordination included the identification of key custodians, the facilitation of document collections, the preparation of custodians for potential investigational hearings (none of which were ultimately scheduled by the FTC), and the collection and verification of structured business data for the quantitative data specifications.

2.2 Custodian Identification and Document Collection

Calderwood & Harkness, working in close consultation with client management, identified a total of 18 custodians on the Solara side of the transaction whose files were determined to be potentially responsive to one or more specifications of the Second Request. Of these 18 custodians, 12 were drawn from the management and investment team of Solara GP and Fund IV, including investment professionals, operating partners, and members of the firm's data infrastructure sector team. The remaining 6 custodians were drawn from the management team of Meridian Workflow Solutions, Inc., whose business operations in the enterprise workflow automation and cloud-based infrastructure management segments were identified by FTC Staff as potentially overlapping with certain business lines of Pinnacle Cloud Systems.

Document collections were conducted across a broad range of data sources, including corporate email systems (Strathmore Data Systems and Crestline Software), shared network drives, internal messaging platforms (including Meridian Solutions and Northgate Data Systems), personal devices (laptops and mobile phones) of certain custodians, and cloud-based document repositories (including Aldermere Systems, Hollowell Health IT, and Fenmore Services Inc. accounts). The collections were designed to capture all potentially responsive materials within the time period specified by the Second Request, which extended back five years from the date of issuance.

The aggregate collection yielded approximately 1,240,000 documents. Calderwood & Harkness engaged and oversaw Keymark Document Solutions LLC ("Keymark"), an e-discovery services provider, for the processing, de-duplication, filtering, and hosting of the collected documents in a Crestline Technologies review environment. Daniel S. Fong served as Keymark's Project Manager on this engagement. Through the application of de-duplication protocols, date filtering, file-type exclusions, and negotiated search term protocols, the initial collection of approximately 1,240,000 documents was reduced to a review set of approximately 487,000 documents, representing a reduction of approximately 60.7%.

2.3 Document Review and Production

Calderwood & Harkness supervised a comprehensive responsiveness and privilege review of the approximately 487,000 documents comprising the review set. The review was conducted using a combination of technology-assisted review ("TAR") methodologies for initial prioritization and human review for final responsiveness and privilege determinations. A team of 22 contract review attorneys, staffed and managed by Keymark Document Solutions LLC, performed the first-level review under the direct supervision of Calderwood & Harkness attorneys, principally Elliot Nguyen and Monica Reyes. Quality control sampling and second-level review were conducted by Calderwood & Harkness attorneys to ensure the accuracy and consistency of the review coding.

The document review and production effort resulted in the production of approximately 196,300 documents to FTC Staff, bearing Bates numbers SDILP-2R-000001 through SDILP-2R-196300. All productions were made in accordance with the FTC's production specifications and the agreed-upon Electronic Document Production Specifications negotiated with FTC Staff at the outset of the compliance process.

In addition to the narrative document productions, Calderwood & Harkness prepared and submitted 7 structured data submissions responsive to the FTC's data specifications. These structured data submissions encompassed: (i) historical sales data for Meridian's relevant product lines; (ii) pricing data and discount schedules; (iii) customer lists and contract terms; (iv) win/loss data for competitive bids and contract renewals; (v) market share estimates and competitive landscape analyses; (vi) historical and projected financial data, including revenue, cost, and margin information; and (vii) product feature matrices comparing the capabilities of Meridian's and Pinnacle's respective offerings. These data submissions covered both the Pinnacle and Meridian businesses and were prepared in close coordination with client finance and business development personnel.

2.4 Privilege Review and Logging

An integral component of the document review process was the identification and withholding of documents protected by the attorney-client privilege, the work product doctrine, or the joint defense / common interest privilege. Calderwood & Harkness prepared and maintained a detailed privilege log in full compliance with the FTC's privilege log requirements. The final privilege log comprised 4,872 entries, categorized as follows:

• Attorney-client privilege: 3,641 entries (74.8% of all withheld documents)

• Work product doctrine: 894 entries (18.4% of all withheld documents)

• Joint defense / common interest privilege: 337 entries (6.8% of all withheld documents)

Early in the engagement, Calderwood & Harkness negotiated and executed a Clawback / Non-Waiver Agreement with FTC Staff, dated June 9, 2023. This agreement, structured to conform with the principles set forth in Federal Rule of Evidence 502(d), provided important protections against the inadvertent waiver of privilege in the context of the large-volume production, ensuring that any inadvertently produced privileged materials could be recovered without waiver of the underlying privilege.

FTC Staff conducted two rounds of privilege challenges during the course of the investigation, both of which were successfully defended by Calderwood & Harkness:

• First Privilege Challenge (November 8, 2023): FTC Staff challenged 214 entries on the privilege log, contesting the applicability of the asserted privileges on various grounds, including the crime-fraud exception, the business advice exclusion, and assertions that certain communications involved non-attorney participants to whom the privilege did not extend. Calderwood & Harkness prepared detailed written responses and supporting declarations. All 214 challenged entries were sustained, and no withheld documents were required to be produced.

• Second Privilege Challenge (December 1, 2023): FTC Staff submitted a second, narrower challenge targeting 47 entries on the privilege log, primarily focusing on documents reflecting communications with Meridian management that FTC Staff argued were principally business rather than legal in nature. Calderwood & Harkness again prepared detailed responses supported by supplemental declarations and representative privilege descriptions. All 47 challenged entries were sustained in full.

As a result of these outcomes, no documents withheld on the basis of privilege were produced to the FTC at any point during the investigation.

2.5 Substantial Compliance Certification

Calderwood & Harkness prepared and filed Solara's Substantial Compliance Certification on September 22, 2023, which was 116 calendar days from the date of Second Request issuance. The certification was accompanied by a supporting declaration executed by Howard Bellamy, Responsible Partner, attesting to the scope and completeness of the compliance efforts undertaken and the production of all responsive, non-privileged materials identified through a diligent and thorough search of the files and records of all identified custodians. The certification of substantial compliance initiated the running of the statutory waiting period under the HSR Act.

2.6 Supplemental Production

Following the filing of the Substantial Compliance Certification, FTC Staff issued a series of 8 supplemental document requests, commonly referred to as "pull-forward" requests, on October 27, 2023. These supplemental requests sought production of documents created or received by certain custodians during the period between the close of the initial collection window and the date of the supplemental request, as well as documents from certain narrowly defined additional sources identified by FTC Staff during the course of their investigation.

Calderwood & Harkness coordinated the collection, review, and production of responsive materials in response to all 8 supplemental requests. The supplemental production was completed on November 17, 2023, within the timeframe agreed upon with FTC Staff.

2.7 Economic Submission and Advocacy

A significant component of Calderwood & Harkness's representation involved the preparation and submission of an Economic Submission, commonly referred to as a "White Paper," in support of the argument that the proposed acquisition would not substantially lessen competition in any relevant market and that the transaction should be cleared without challenge. The Economic Submission was prepared and filed on November 3, 2023, and was authored by Dr. Arvind Chakrabarti, Senior Economist in Calderwood & Harkness's Economic Consulting practice. The legal framing and advocacy narrative of the Economic Submission were developed by Howard Bellamy and Monica Reyes.

The Economic Submission presented detailed quantitative and qualitative analyses addressing market definition, competitive effects, entry conditions, efficiencies, and the absence of likely competitive harm. The submission drew upon the structured data produced during the compliance process, publicly available market data, and independent economic modeling conducted by Dr. Chakrabarti and his team.

Following the filing of the Economic Submission, Calderwood & Harkness conducted an advocacy presentation to FTC Bureau of Competition staff in the Mergers IV Division on December 7, 2023. The presentation was led by Howard Bellamy and included presentations by Dr. Chakrabarti on the economic analyses and by Monica Reyes on the documentary record. The advocacy presentation provided an opportunity for a substantive dialogue with FTC Staff regarding the competitive implications of the transaction and the evidentiary record.

Subsequently, Calderwood & Harkness participated in a Senior Staff briefing at the FTC on December 19, 2023, at which Howard Bellamy presented a summary of the key arguments in favor of clearance to senior officials in the Bureau of Competition. This briefing represented the final substantive engagement with the Commission prior to the expiration of the waiting period on January 19, 2024.

3. Fee and Cost Summary

Set forth below is a summary of the fees and costs incurred in connection with this engagement. Detailed monthly invoices, broken down by timekeeper and expense category, have been transmitted separately under cover of this letter.

3.1 Calderwood & Harkness LLP Legal Fees

The following table sets forth the professional fees billed by Calderwood & Harkness on this matter, organized by timekeeper:

Total Calderwood & Harkness LLP Legal Fees: $5,740,000.00

Please note that this total encompasses all professional time billed from the date of engagement commencement on May 30, 2023, through the date of matter closure on January 19, 2024, as well as post-clearance administrative work performed through the date of this letter, including the preparation of this closing summary, the reconciliation of final invoices, and the coordination of file disposition matters.

3.2 E-discovery Vendor Costs (Keymark Document Solutions LLC)

Calderwood & Harkness engaged Keymark Document Solutions LLC ("Keymark") as the e-discovery vendor on this matter, subject to the terms and conditions set forth in the Engagement Letter and the separate Vendor Services Agreement between Keymark and Calderwood & Harkness dated June 2, 2023. The details of the Keymark engagement are as follows:

Vendor: Keymark Document Solutions LLC Project Manager: Daniel S. Fong Office: 7600 Leesburg Pike, Suite 320, Falls Church, VA 22043

Services Provided:

• Document processing and ingestion into Crestline Technologies review environment

• Crestline Technologies hosting and platform administration throughout the review period

• De-duplication, near-duplicate identification, and filtering protocols

• Contract review attorney staffing (22 contract review attorneys for first-level responsiveness and privilege review)

• Production formatting, Bates numbering, and delivery to FTC Staff in accordance with FTC production specifications

• Data analytics and reporting in support of TAR validation and quality control

Total Keymark Document Solutions LLC Vendor Costs: $1,820,000.00

3.3 Total Solara-Side Second Request Compliance Costs

The total costs incurred by Solara in connection with the Second Request compliance engagement are summarized in the table below:

Please note that these figures represent Solara-side costs only and do not include any fees, costs, or expenses incurred by Pinnacle Cloud Systems, Inc. or the Sellers in connection with their parallel Second Request compliance efforts, which were handled independently by Hargrove, Pelletier & Stein LLP pursuant to a separate engagement. Any allocation of compliance costs as between the parties to the transaction should be addressed in accordance with the applicable provisions of the Stock Purchase Agreement.

Additionally, please note that the HSR Act filing fee of $450,000.00, which was paid by Fund IV on April 28, 2023, in connection with the initial HSR filing, was incurred prior to the commencement of this engagement and is not included in the totals set forth above.

3.4 Invoice Detail

Detailed monthly invoices covering the entire engagement period have been transmitted separately under cover of this letter. These invoices provide a complete breakdown of professional fees by timekeeper, hours, and task description, as well as itemized disbursements and pass-through vendor costs, for each monthly billing period.

The final invoice, Invoice No. SC-80023-0487-014, covers the billing period from January 1, 2024, through January 26, 2024, and reflects the final professional fees and costs incurred in connection with the engagement, including the post-clearance administrative work described above.

All prior invoices covering billing periods through December 31, 2023, have been paid in full, and we gratefully acknowledge the timely payment of all such invoices throughout the engagement.

Payment of the final invoice is requested within 30 calendar days of the date of this letter, in accordance with the payment terms set forth in Section 6 of the Engagement Letter. Payment should be directed to the account identified on the face of the enclosed invoice, or by check made payable to Calderwood & Harkness LLP and delivered to the attention of the undersigned at the address set forth above.

4. Matter Outcome Summary

As noted above, the FTC allowed the statutory waiting period under the HSR Act to expire on January 19, 2024, without taking any enforcement action, issuing any complaint, or seeking any injunctive relief with respect to the proposed acquisition. No conditions, divestitures, behavioral remedies, consent orders, or other restrictions were imposed by the Commission.

The expiration of the waiting period means that the antitrust condition set forth in Section 7.1(b) of the Stock Purchase Agreement dated April 14, 2023 (the "SPA"), by and among Solara Digital Infrastructure Fund IV LP (as Buyer), PCS Acquisition Corp. (as Merger Sub), Pinnacle Cloud Systems, Inc. (as the Company), Thorngate Capital Partners LP (as Sellers' Representative), and the Sellers named therein, has been satisfied in full. As a result, the proposed transaction — the acquisition of 100% of the outstanding capital stock of Pinnacle Cloud Systems, Inc. at an enterprise value of approximately $1.63 billion, consisting of approximately $1.19 billion in cash consideration and approximately $440 million in rollover equity to be contributed by certain members of Pinnacle management and the Sellers — may proceed to closing, subject to the satisfaction or waiver of the remaining conditions to closing set forth in the SPA.

We note that the Outside Date under the SPA is April 14, 2024, with an automatic three-month extension to July 14, 2024, in the event that the antitrust closing condition were the sole unsatisfied condition as of the initial Outside Date. Given that the antitrust condition has now been satisfied and the initial Outside Date is approximately 78 days from the date of this letter, there is adequate remaining time for the parties to satisfy all remaining conditions and consummate the closing within the contractual timeframe.

5. Document Retention and File Disposition

Calderwood & Harkness will retain all matter files, both paper and electronic, in accordance with the firm's standard Document Retention Policy, a copy of which was provided with the Engagement Letter. Engagement files retained by the firm include, without limitation, work product memoranda, internal and external correspondence, production records and indices, privilege logs and supporting documentation, economic analyses and underlying data prepared by Dr. Chakrabarti, advocacy materials, and copies of all filings and submissions made to the FTC during the course of the engagement.

The Client may request copies of any matter files at any time by contacting the undersigned or Monica Reyes. Files will be provided in electronic format unless paper copies are specifically requested, and any costs associated with the reproduction and delivery of such files will be billed to the Client at cost.

With respect to the e-discovery materials, the Keymark Document Solutions LLC Crestline Technologies database containing the full document universe — including collected documents, processed files, review coding, production sets, and associated metadata — will be maintained by Keymark for a period of 12 months following matter closure (i.e., through January 19, 2025), after which the data will be either returned to the Client in a mutually agreed-upon format or securely destroyed, at the Client's direction. Ongoing hosting charges during the 12-month retention period will be billed by Keymark directly to the Client in accordance with the terms of the Vendor Services Agreement. We strongly recommend that the Client coordinate directly with Daniel S. Fong at Keymark (telephone: (703) 555-2240; email: dfong@keymarkdocsolutions.com) regarding any ongoing data hosting needs, data export or return preferences, or instructions for data destruction at the conclusion of the retention period.

Calderwood & Harkness will continue to maintain the confidentiality of all privileged materials, work product, and confidential client information consistent with the firm's professional obligations under the applicable rules of professional conduct and the terms of the Engagement Letter. Nothing in this matter closing letter affects or diminishes the firm's ongoing obligations of confidentiality with respect to information obtained during the course of the representation.

6. Acknowledgments and Closing Remarks

On behalf of the entire Calderwood & Harkness team, I want to express our sincere appreciation for the confidence that Solara and its management team placed in our firm throughout this engagement. Second Request compliance is an intensive and demanding process, and the successful outcome in this matter is a testament to the collaborative and constructive working relationship between our respective teams.

We wish to acknowledge, in particular, the outstanding cooperation and responsiveness of the client personnel at Solara Digital Infrastructure GP LLC, Solara Digital Infrastructure Fund IV LP, and Meridian Workflow Solutions, Inc. throughout the compliance process. The contributions of Priya N. Raghavan, Chief Executive Officer of Meridian, and her team were invaluable in facilitating the collection of responsive materials and the preparation of the structured data submissions relating to Meridian's business operations. The efficiency and quality of the compliance effort were significantly enhanced by the professionalism and dedication of the client team.

We also wish to recognize the effective and collegial coordination with Catherine A. Pelletier, David L. Morrissette, and the team at Hargrove, Pelletier & Stein LLP, who represented Pinnacle Cloud Systems and the Sellers throughout the parallel compliance process. The alignment and coordination between the buyer-side and seller-side compliance efforts contributed meaningfully to the successful resolution of this investigation.

As we close this engagement, please be aware that Calderwood & Harkness remains available to assist with any post-clearance matters that may arise, including any matters relating to antitrust-related covenants or representations in the SPA, any coordination with Briarcliff National Bank, N.A. (Karen P. Aldridge, Relationship Manager) regarding antitrust-related closing conditions under the $825 million senior secured term loan facility, or any other matters where the involvement of antitrust counsel may be needed in connection with the closing or post-closing integration of the transaction. Any such services would be provided under a separate engagement and billing arrangement.

Should you have any questions regarding the enclosed invoices, this closing summary, or any other aspect of the engagement, please do not hesitate to contact me directly at (202) 555-7418 or hbellamy@calderwoodharkness.com, or Monica Reyes at (202) 555-7433 or mreyes@calderwoodharkness.com.

We congratulate Solara on this successful outcome and wish you well as the transaction proceeds to closing.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Howard Bellamy Responsible Partner & Billing Partner Antitrust & Competition Group Calderwood & Harkness LLP 1900 K Street NW, Suite 800 Washington, DC 20006 Telephone: (202) 555-7418

Email: hbellamy@calderwoodharkness.com

Enclosures:

1. Final Invoice (Invoice No. SC-80023-0487-014, covering January 1–26, 2024)

2. Cumulative Fee and Cost Summary (detail by month and timekeeper, May 2023 – January 2024)

3. Keymark Document Solutions LLC Final Vendor Invoice

cc:

Monica Reyes, Associate, Antitrust & Competition Group, Calderwood & Harkness LLP Elliot Nguyen, Associate, Antitrust & Competition Group, Calderwood & Harkness LLP Tamara J. Westbrook, Of Counsel, Litigation Technology & E-discovery, Calderwood & Harkness LLP Dr. Arvind Chakrabarti, Senior Economist, Calderwood & Harkness Economic Consulting

Timekeeper	Title / Role	Hourly Rate	Principal Responsibilities
Howard Bellamy	Responsible Partner & Billing Partner, Antitrust & Competition	$1,650/hr	Strategic direction of the engagement; all communications with FTC Staff, including Second Request negotiations, privilege challenge responses, and advocacy; preparation of the Substantial Compliance Certification and supporting declaration; authorship of legal framing for the Economic Submission; leadership of the advocacy presentation and Senior Staff briefing
Monica Reyes	Lead Associate, Antitrust & Competition (Year 7)	$1,050/hr	Day-to-day management of compliance workstreams; supervision of privilege review and preparation of privilege log; preparation of written responses to both rounds of FTC Staff privilege challenges; coordination with Dr. Chakrabarti on the Economic Submission; coordination with HPS on parallel compliance matters
Elliot Nguyen	Working Associate, Antitrust & Competition (Year 4)	$825/hr	Supervision of the document review team and quality control protocols; coordination with custodians regarding document collections and data verification; management of supplemental production requests and pull-forward collections; preparation of structured data submissions
Tamara J. Westbrook	Of Counsel, Litigation Technology & E-discovery	$975/hr	Design and implementation of the e-discovery protocol; management of the Keymark vendor relationship; oversight of collection methodology, processing workflows, and Crestline Technologies review environment configuration; TAR protocol development and validation
Dr. Arvind Chakrabarti	Senior Economist, Calderwood & Harkness Economic Consulting	$1,200/hr	Economic analysis in support of clearance advocacy; authorship of the Economic Submission / White Paper, including market definition analysis, competitive effects assessment, entry and expansion analysis, and efficiencies evaluation; preparation and delivery of economic portions of the advocacy presentation
Category	Amount
Calderwood & Harkness LLP legal fees	$5,740,000.00
Keymark Document Solutions LLC vendor costs	$1,820,000.00
Total Solara-side compliance costs	$7,560,000.00

CONFIDENTIAL — ATTORNEY-CLIENT PRIVILEGED
CALDERWOOD & HARKNESS LLP Attorneys at Law
1900 K Street NW, Suite 800 Washington, DC 20006 Telephone: (202) 555-7400 Facsimile: (202) 555-7401 www.calderwoodharkness.com
January 26, 2024
VIA ELECTRONIC MAIL AND HAND DELIVERY
Graham A. Whitfield Founding Partner & Chief Executive Officer Solara Digital Infrastructure GP LLC
Sandra K. Levinson Co-Managing Partner & Chief Investment Officer Solara Digital Infrastructure GP LLC
Solara Digital Infrastructure LP 200 Tatnall Street, Suite 1400 Wilmington, DE 19801
Re: Final Invoice Summary and Matter Closing — Second Request Compliance, FTC File No. 231-0487
In the Matter of: Solara Digital Infrastructure Fund IV LP / Pinnacle Cloud Systems, Inc.
Our Matter No.: 1041-00001
Reference: Engagement Letter dated May 30, 2023
Dear Mr. Whitfield and Ms. Levinson:
1. Purpose and Engagement Closure Confirmation
We write to transmit the final invoice summary for the above-referenced matter and to confirm the formal closure of our engagement in connection with this representation. This letter serves as a comprehensive record of the services rendered, fees and costs incurred, and the disposition of the matter, and should be retained for your files alongside the enclosed invoices and supporting documentation.
As you will recall, Calderwood & Harkness LLP was retained by Solara Digital Infrastructure LP ("Solara" or the "Client") pursuant to the Engagement Letter dated May 30, 2023 (the "Engagement Letter"), executed by Mr. Whitfield on behalf of Solara Digital Infrastructure GP LLC, acting in its capacity as general partner of Solara Digital Infrastructure LP. The scope of that engagement was defined as the representation of Solara in connection with compliance with the Second Request for Additional Information and Documentary Material ("Second Request") issued by the Federal Trade Commission ("FTC" or the "Commission") on May 29, 2023, in FTC File No. 231-0487, relating to Solara Digital Infrastructure Fund IV LP's ("Fund IV") proposed acquisition of all of the outstanding capital stock of Pinnacle Cloud Systems, Inc. ("Pinnacle" or "PCS").
We are pleased to confirm that the FTC allowed the statutory waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), to expire without challenge on January 19, 2024, thereby clearing the transaction from an antitrust standpoint. No enforcement action was taken by the Commission, and no conditions, consent decree, or other remedial measures were imposed.
In light of the expiration of the waiting period and the completion of all associated work, the effective date of matter closure is January 19, 2024. The total duration of the engagement spanned from May 30, 2023, through January 19, 2024, a period of 235 calendar days measured from the date of Second Request issuance through the date of antitrust clearance. Post-clearance administrative work, including the preparation of this letter and the final invoice, has been completed through the date of this letter.
2. Summary of Services Rendered
Set forth below is a brief recapitulation of the scope of work performed by Calderwood & Harkness across the duration of the engagement. This summary is intended to provide a consolidated record of the principal workstreams and milestones for your internal files and is not intended to be an exhaustive description of every task performed during the representation.
2.1 Second Request Strategy and Compliance Planning
Immediately upon receipt of the Second Request, Calderwood & Harkness developed a comprehensive compliance strategy designed to address all 47 specifications set forth in the FTC's Second Request. This strategy encompassed the identification of responsive custodians and data sources, the sequencing of document collection and review efforts, the design of search methodologies and relevance criteria, and the development of a structured data response plan for each of the quantitative data specifications.
A central element of our compliance planning involved close and ongoing coordination with Hargrove, Pelletier & Stein LLP ("HPS"), outside counsel to Pinnacle Cloud Systems, Inc. and the Sellers named in the Stock Purchase Agreement, including the Sellers' Representative, Thorngate Capital Partners LP. Our primary points of contact at HPS were Catherine A. Pelletier, partner, and David L. Morrissette, senior associate. This coordination was essential to ensure consistency across the parallel compliance efforts on both the buyer and seller sides of the transaction, to avoid duplicative productions, and to present a unified advocacy position to FTC Staff.
Additionally, Calderwood & Harkness coordinated extensively with client personnel at Solara Digital Infrastructure GP LLC, Solara Digital Infrastructure Fund IV LP, and Meridian Workflow Solutions, Inc. ("Meridian"), a portfolio company of Fund IV whose operations were relevant to the FTC's competitive analysis. This coordination included the identification of key custodians, the facilitation of document collections, the preparation of custodians for potential investigational hearings (none of which were ultimately scheduled by the FTC), and the collection and verification of structured business data for the quantitative data specifications.
2.2 Custodian Identification and Document Collection
Calderwood & Harkness, working in close consultation with client management, identified a total of 18 custodians on the Solara side of the transaction whose files were determined to be potentially responsive to one or more specifications of the Second Request. Of these 18 custodians, 12 were drawn from the management and investment team of Solara GP and Fund IV, including investment professionals, operating partners, and members of the firm's data infrastructure sector team. The remaining 6 custodians were drawn from the management team of Meridian Workflow Solutions, Inc., whose business operations in the enterprise workflow automation and cloud-based infrastructure management segments were identified by FTC Staff as potentially overlapping with certain business lines of Pinnacle Cloud Systems.
Document collections were conducted across a broad range of data sources, including corporate email systems (Strathmore Data Systems and Crestline Software), shared network drives, internal messaging platforms (including Meridian Solutions and Northgate Data Systems), personal devices (laptops and mobile phones) of certain custodians, and cloud-based document repositories (including Aldermere Systems, Hollowell Health IT, and Fenmore Services Inc. accounts). The collections were designed to capture all potentially responsive materials within the time period specified by the Second Request, which extended back five years from the date of issuance.
The aggregate collection yielded approximately 1,240,000 documents. Calderwood & Harkness engaged and oversaw Keymark Document Solutions LLC ("Keymark"), an e-discovery services provider, for the processing, de-duplication, filtering, and hosting of the collected documents in a Crestline Technologies review environment. Daniel S. Fong served as Keymark's Project Manager on this engagement. Through the application of de-duplication protocols, date filtering, file-type exclusions, and negotiated search term protocols, the initial collection of approximately 1,240,000 documents was reduced to a review set of approximately 487,000 documents, representing a reduction of approximately 60.7%.
2.3 Document Review and Production
Calderwood & Harkness supervised a comprehensive responsiveness and privilege review of the approximately 487,000 documents comprising the review set. The review was conducted using a combination of technology-assisted review ("TAR") methodologies for initial prioritization and human review for final responsiveness and privilege determinations. A team of 22 contract review attorneys, staffed and managed by Keymark Document Solutions LLC, performed the first-level review under the direct supervision of Calderwood & Harkness attorneys, principally Elliot Nguyen and Monica Reyes. Quality control sampling and second-level review were conducted by Calderwood & Harkness attorneys to ensure the accuracy and consistency of the review coding.
The document review and production effort resulted in the production of approximately 196,300 documents to FTC Staff, bearing Bates numbers SDILP-2R-000001 through SDILP-2R-196300. All productions were made in accordance with the FTC's production specifications and the agreed-upon Electronic Document Production Specifications negotiated with FTC Staff at the outset of the compliance process.
In addition to the narrative document productions, Calderwood & Harkness prepared and submitted 7 structured data submissions responsive to the FTC's data specifications. These structured data submissions encompassed: (i) historical sales data for Meridian's relevant product lines; (ii) pricing data and discount schedules; (iii) customer lists and contract terms; (iv) win/loss data for competitive bids and contract renewals; (v) market share estimates and competitive landscape analyses; (vi) historical and projected financial data, including revenue, cost, and margin information; and (vii) product feature matrices comparing the capabilities of Meridian's and Pinnacle's respective offerings. These data submissions covered both the Pinnacle and Meridian businesses and were prepared in close coordination with client finance and business development personnel.
2.4 Privilege Review and Logging
An integral component of the document review process was the identification and withholding of documents protected by the attorney-client privilege, the work product doctrine, or the joint defense / common interest privilege. Calderwood & Harkness prepared and maintained a detailed privilege log in full compliance with the FTC's privilege log requirements. The final privilege log comprised 4,872 entries, categorized as follows:
• Attorney-client privilege: 3,641 entries (74.8% of all withheld documents)
• Work product doctrine: 894 entries (18.4% of all withheld documents)
• Joint defense / common interest privilege: 337 entries (6.8% of all withheld documents)
Early in the engagement, Calderwood & Harkness negotiated and executed a Clawback / Non-Waiver Agreement with FTC Staff, dated June 9, 2023. This agreement, structured to conform with the principles set forth in Federal Rule of Evidence 502(d), provided important protections against the inadvertent waiver of privilege in the context of the large-volume production, ensuring that any inadvertently produced privileged materials could be recovered without waiver of the underlying privilege.
FTC Staff conducted two rounds of privilege challenges during the course of the investigation, both of which were successfully defended by Calderwood & Harkness:
• First Privilege Challenge (November 8, 2023): FTC Staff challenged 214 entries on the privilege log, contesting the applicability of the asserted privileges on various grounds, including the crime-fraud exception, the business advice exclusion, and assertions that certain communications involved non-attorney participants to whom the privilege did not extend. Calderwood & Harkness prepared detailed written responses and supporting declarations. All 214 challenged entries were sustained, and no withheld documents were required to be produced.
• Second Privilege Challenge (December 1, 2023): FTC Staff submitted a second, narrower challenge targeting 47 entries on the privilege log, primarily focusing on documents reflecting communications with Meridian management that FTC Staff argued were principally business rather than legal in nature. Calderwood & Harkness again prepared detailed responses supported by supplemental declarations and representative privilege descriptions. All 47 challenged entries were sustained in full.
As a result of these outcomes, no documents withheld on the basis of privilege were produced to the FTC at any point during the investigation.
2.5 Substantial Compliance Certification
Calderwood & Harkness prepared and filed Solara's Substantial Compliance Certification on September 22, 2023, which was 116 calendar days from the date of Second Request issuance. The certification was accompanied by a supporting declaration executed by Howard Bellamy, Responsible Partner, attesting to the scope and completeness of the compliance efforts undertaken and the production of all responsive, non-privileged materials identified through a diligent and thorough search of the files and records of all identified custodians. The certification of substantial compliance initiated the running of the statutory waiting period under the HSR Act.
2.6 Supplemental Production
Following the filing of the Substantial Compliance Certification, FTC Staff issued a series of 8 supplemental document requests, commonly referred to as "pull-forward" requests, on October 27, 2023. These supplemental requests sought production of documents created or received by certain custodians during the period between the close of the initial collection window and the date of the supplemental request, as well as documents from certain narrowly defined additional sources identified by FTC Staff during the course of their investigation.
Calderwood & Harkness coordinated the collection, review, and production of responsive materials in response to all 8 supplemental requests. The supplemental production was completed on November 17, 2023, within the timeframe agreed upon with FTC Staff.
2.7 Economic Submission and Advocacy
A significant component of Calderwood & Harkness's representation involved the preparation and submission of an Economic Submission, commonly referred to as a "White Paper," in support of the argument that the proposed acquisition would not substantially lessen competition in any relevant market and that the transaction should be cleared without challenge. The Economic Submission was prepared and filed on November 3, 2023, and was authored by Dr. Arvind Chakrabarti, Senior Economist in Calderwood & Harkness's Economic Consulting practice. The legal framing and advocacy narrative of the Economic Submission were developed by Howard Bellamy and Monica Reyes.
The Economic Submission presented detailed quantitative and qualitative analyses addressing market definition, competitive effects, entry conditions, efficiencies, and the absence of likely competitive harm. The submission drew upon the structured data produced during the compliance process, publicly available market data, and independent economic modeling conducted by Dr. Chakrabarti and his team.
Following the filing of the Economic Submission, Calderwood & Harkness conducted an advocacy presentation to FTC Bureau of Competition staff in the Mergers IV Division on December 7, 2023. The presentation was led by Howard Bellamy and included presentations by Dr. Chakrabarti on the economic analyses and by Monica Reyes on the documentary record. The advocacy presentation provided an opportunity for a substantive dialogue with FTC Staff regarding the competitive implications of the transaction and the evidentiary record.
Subsequently, Calderwood & Harkness participated in a Senior Staff briefing at the FTC on December 19, 2023, at which Howard Bellamy presented a summary of the key arguments in favor of clearance to senior officials in the Bureau of Competition. This briefing represented the final substantive engagement with the Commission prior to the expiration of the waiting period on January 19, 2024.
3. Fee and Cost Summary
Set forth below is a summary of the fees and costs incurred in connection with this engagement. Detailed monthly invoices, broken down by timekeeper and expense category, have been transmitted separately under cover of this letter.
3.1 Calderwood & Harkness LLP Legal Fees
The following table sets forth the professional fees billed by Calderwood & Harkness on this matter, organized by timekeeper:
Total Calderwood & Harkness LLP Legal Fees: $5,740,000.00
Please note that this total encompasses all professional time billed from the date of engagement commencement on May 30, 2023, through the date of matter closure on January 19, 2024, as well as post-clearance administrative work performed through the date of this letter, including the preparation of this closing summary, the reconciliation of final invoices, and the coordination of file disposition matters.
3.2 E-discovery Vendor Costs (Keymark Document Solutions LLC)
Calderwood & Harkness engaged Keymark Document Solutions LLC ("Keymark") as the e-discovery vendor on this matter, subject to the terms and conditions set forth in the Engagement Letter and the separate Vendor Services Agreement between Keymark and Calderwood & Harkness dated June 2, 2023. The details of the Keymark engagement are as follows:
Vendor: Keymark Document Solutions LLC Project Manager: Daniel S. Fong Office: 7600 Leesburg Pike, Suite 320, Falls Church, VA 22043
Services Provided:
• Document processing and ingestion into Crestline Technologies review environment
• Crestline Technologies hosting and platform administration throughout the review period
• De-duplication, near-duplicate identification, and filtering protocols
• Contract review attorney staffing (22 contract review attorneys for first-level responsiveness and privilege review)
• Production formatting, Bates numbering, and delivery to FTC Staff in accordance with FTC production specifications
• Data analytics and reporting in support of TAR validation and quality control
Total Keymark Document Solutions LLC Vendor Costs: $1,820,000.00
3.3 Total Solara-Side Second Request Compliance Costs
The total costs incurred by Solara in connection with the Second Request compliance engagement are summarized in the table below:
Please note that these figures represent Solara-side costs only and do not include any fees, costs, or expenses incurred by Pinnacle Cloud Systems, Inc. or the Sellers in connection with their parallel Second Request compliance efforts, which were handled independently by Hargrove, Pelletier & Stein LLP pursuant to a separate engagement. Any allocation of compliance costs as between the parties to the transaction should be addressed in accordance with the applicable provisions of the Stock Purchase Agreement.
Additionally, please note that the HSR Act filing fee of $450,000.00, which was paid by Fund IV on April 28, 2023, in connection with the initial HSR filing, was incurred prior to the commencement of this engagement and is not included in the totals set forth above.
3.4 Invoice Detail
Detailed monthly invoices covering the entire engagement period have been transmitted separately under cover of this letter. These invoices provide a complete breakdown of professional fees by timekeeper, hours, and task description, as well as itemized disbursements and pass-through vendor costs, for each monthly billing period.
The final invoice, Invoice No. SC-80023-0487-014, covers the billing period from January 1, 2024, through January 26, 2024, and reflects the final professional fees and costs incurred in connection with the engagement, including the post-clearance administrative work described above.
All prior invoices covering billing periods through December 31, 2023, have been paid in full, and we gratefully acknowledge the timely payment of all such invoices throughout the engagement.
Payment of the final invoice is requested within 30 calendar days of the date of this letter, in accordance with the payment terms set forth in Section 6 of the Engagement Letter. Payment should be directed to the account identified on the face of the enclosed invoice, or by check made payable to Calderwood & Harkness LLP and delivered to the attention of the undersigned at the address set forth above.
4. Matter Outcome Summary
As noted above, the FTC allowed the statutory waiting period under the HSR Act to expire on January 19, 2024, without taking any enforcement action, issuing any complaint, or seeking any injunctive relief with respect to the proposed acquisition. No conditions, divestitures, behavioral remedies, consent orders, or other restrictions were imposed by the Commission.
The expiration of the waiting period means that the antitrust condition set forth in Section 7.1(b) of the Stock Purchase Agreement dated April 14, 2023 (the "SPA"), by and among Solara Digital Infrastructure Fund IV LP (as Buyer), PCS Acquisition Corp. (as Merger Sub), Pinnacle Cloud Systems, Inc. (as the Company), Thorngate Capital Partners LP (as Sellers' Representative), and the Sellers named therein, has been satisfied in full. As a result, the proposed transaction — the acquisition of 100% of the outstanding capital stock of Pinnacle Cloud Systems, Inc. at an enterprise value of approximately $1.63 billion, consisting of approximately $1.19 billion in cash consideration and approximately $440 million in rollover equity to be contributed by certain members of Pinnacle management and the Sellers — may proceed to closing, subject to the satisfaction or waiver of the remaining conditions to closing set forth in the SPA.
We note that the Outside Date under the SPA is April 14, 2024, with an automatic three-month extension to July 14, 2024, in the event that the antitrust closing condition were the sole unsatisfied condition as of the initial Outside Date. Given that the antitrust condition has now been satisfied and the initial Outside Date is approximately 78 days from the date of this letter, there is adequate remaining time for the parties to satisfy all remaining conditions and consummate the closing within the contractual timeframe.
5. Document Retention and File Disposition
Calderwood & Harkness will retain all matter files, both paper and electronic, in accordance with the firm's standard Document Retention Policy, a copy of which was provided with the Engagement Letter. Engagement files retained by the firm include, without limitation, work product memoranda, internal and external correspondence, production records and indices, privilege logs and supporting documentation, economic analyses and underlying data prepared by Dr. Chakrabarti, advocacy materials, and copies of all filings and submissions made to the FTC during the course of the engagement.
The Client may request copies of any matter files at any time by contacting the undersigned or Monica Reyes. Files will be provided in electronic format unless paper copies are specifically requested, and any costs associated with the reproduction and delivery of such files will be billed to the Client at cost.
With respect to the e-discovery materials, the Keymark Document Solutions LLC Crestline Technologies database containing the full document universe — including collected documents, processed files, review coding, production sets, and associated metadata — will be maintained by Keymark for a period of 12 months following matter closure (i.e., through January 19, 2025), after which the data will be either returned to the Client in a mutually agreed-upon format or securely destroyed, at the Client's direction. Ongoing hosting charges during the 12-month retention period will be billed by Keymark directly to the Client in accordance with the terms of the Vendor Services Agreement. We strongly recommend that the Client coordinate directly with Daniel S. Fong at Keymark (telephone: (703) 555-2240; email: dfong@keymarkdocsolutions.com) regarding any ongoing data hosting needs, data export or return preferences, or instructions for data destruction at the conclusion of the retention period.
Calderwood & Harkness will continue to maintain the confidentiality of all privileged materials, work product, and confidential client information consistent with the firm's professional obligations under the applicable rules of professional conduct and the terms of the Engagement Letter. Nothing in this matter closing letter affects or diminishes the firm's ongoing obligations of confidentiality with respect to information obtained during the course of the representation.
6. Acknowledgments and Closing Remarks
On behalf of the entire Calderwood & Harkness team, I want to express our sincere appreciation for the confidence that Solara and its management team placed in our firm throughout this engagement. Second Request compliance is an intensive and demanding process, and the successful outcome in this matter is a testament to the collaborative and constructive working relationship between our respective teams.
We wish to acknowledge, in particular, the outstanding cooperation and responsiveness of the client personnel at Solara Digital Infrastructure GP LLC, Solara Digital Infrastructure Fund IV LP, and Meridian Workflow Solutions, Inc. throughout the compliance process. The contributions of Priya N. Raghavan, Chief Executive Officer of Meridian, and her team were invaluable in facilitating the collection of responsive materials and the preparation of the structured data submissions relating to Meridian's business operations. The efficiency and quality of the compliance effort were significantly enhanced by the professionalism and dedication of the client team.
We also wish to recognize the effective and collegial coordination with Catherine A. Pelletier, David L. Morrissette, and the team at Hargrove, Pelletier & Stein LLP, who represented Pinnacle Cloud Systems and the Sellers throughout the parallel compliance process. The alignment and coordination between the buyer-side and seller-side compliance efforts contributed meaningfully to the successful resolution of this investigation.
As we close this engagement, please be aware that Calderwood & Harkness remains available to assist with any post-clearance matters that may arise, including any matters relating to antitrust-related covenants or representations in the SPA, any coordination with Briarcliff National Bank, N.A. (Karen P. Aldridge, Relationship Manager) regarding antitrust-related closing conditions under the $825 million senior secured term loan facility, or any other matters where the involvement of antitrust counsel may be needed in connection with the closing or post-closing integration of the transaction. Any such services would be provided under a separate engagement and billing arrangement.
Should you have any questions regarding the enclosed invoices, this closing summary, or any other aspect of the engagement, please do not hesitate to contact me directly at (202) 555-7418 or hbellamy@calderwoodharkness.com, or Monica Reyes at (202) 555-7433 or mreyes@calderwoodharkness.com.
We congratulate Solara on this successful outcome and wish you well as the transaction proceeds to closing.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Howard Bellamy Responsible Partner & Billing Partner Antitrust & Competition Group Calderwood & Harkness LLP 1900 K Street NW, Suite 800 Washington, DC 20006 Telephone: (202) 555-7418
Email: hbellamy@calderwoodharkness.com
Enclosures:
1. Final Invoice (Invoice No. SC-80023-0487-014, covering January 1–26, 2024)
2. Cumulative Fee and Cost Summary (detail by month and timekeeper, May 2023 – January 2024)
3. Keymark Document Solutions LLC Final Vendor Invoice
cc:
Monica Reyes, Associate, Antitrust & Competition Group, Calderwood & Harkness LLP Elliot Nguyen, Associate, Antitrust & Competition Group, Calderwood & Harkness LLP Tamara J. Westbrook, Of Counsel, Litigation Technology & E-discovery, Calderwood & Harkness LLP Dr. Arvind Chakrabarti, Senior Economist, Calderwood & Harkness Economic Consulting
Timekeeper | Title / Role | Hourly Rate | Principal Responsibilities
Howard Bellamy | Responsible Partner & Billing Partner, Antitrust & Competition | $1,650/hr | Strategic direction of the engagement; all communications with FTC Staff, including Second Request negotiations, privilege challenge responses, and advocacy; preparation of the Substantial Compliance Certification and supporting declaration; authorship of legal framing for the Economic Submission; leadership of the advocacy presentation and Senior Staff briefing
Monica Reyes | Lead Associate, Antitrust & Competition (Year 7) | $1,050/hr | Day-to-day management of compliance workstreams; supervision of privilege review and preparation of privilege log; preparation of written responses to both rounds of FTC Staff privilege challenges; coordination with Dr. Chakrabarti on the Economic Submission; coordination with HPS on parallel compliance matters
Elliot Nguyen | Working Associate, Antitrust & Competition (Year 4) | $825/hr | Supervision of the document review team and quality control protocols; coordination with custodians regarding document collections and data verification; management of supplemental production requests and pull-forward collections; preparation of structured data submissions
Tamara J. Westbrook | Of Counsel, Litigation Technology & E-discovery | $975/hr | Design and implementation of the e-discovery protocol; management of the Keymark vendor relationship; oversight of collection methodology, processing workflows, and Crestline Technologies review environment configuration; TAR protocol development and validation
Dr. Arvind Chakrabarti | Senior Economist, Calderwood & Harkness Economic Consulting | $1,200/hr | Economic analysis in support of clearance advocacy; authorship of the Economic Submission / White Paper, including market definition analysis, competitive effects assessment, entry and expansion analysis, and efficiencies evaluation; preparation and delivery of economic portions of the advocacy presentation
Category | Amount
Calderwood & Harkness LLP legal fees | $5,740,000.00
Keymark Document Solutions LLC vendor costs | $1,820,000.00
Total Solara-side compliance costs | $7,560,000.00

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