PRIVILEGED AND CONFIDENTIAL ATTORNEY WORK PRODUCT
INTERNAL MEMORANDUM
TO: Philip Hartmann, Responsible Partner, Banking & Finance, Calderwood & Harkness LLP
FROM: Lisa Morrow, Lead Associate, Banking & Finance; Marcus Leung, Working Associate, Banking & Finance
DATE: April 14, 2026
RE: Commitment Letter Analysis — Market Flex Provisions and Closing Conditionality; $200,000,000 Senior Secured Term Loan Facility — Solara Digital Acquisition Holdings LLC (Borrower) / Brindoval National Bank, N.A. (Lead Arranger and Administrative Agent)
Matter No.: 1041-00002
Client No.: CL-081273
Client: Solara Digital Infrastructure LP / Solara Digital Acquisition Holdings LLC
I. EXECUTIVE SUMMARY
This memorandum presents our analysis of the initial draft commitment letter received from Brindoval National Bank, N.A. ("Brindoval" or the "Lead Arranger"), transmitted by its outside counsel, Broadwick & Thayer LLP (lead partner: Catherine Hartwell; senior associate: James Okoro), in connection with the proposed $200,000,000 Senior Secured Term Loan Facility (the "Facility") to be extended to Solara Digital Acquisition Holdings LLC (the "Borrower"). The Facility will finance the acquisition by Solara Digital Infrastructure LP ("Solara" or the "Sponsor"), acting through Solara Digital Infrastructure Fund IV LP ("Fund IV"), of 100% of the outstanding equity interests of Meridian Cloud Solutions Inc. ("Meridian" or the "Target"), at an enterprise value of $315,000,000 (the "Acquisition").
The commitment letter, dated April 8, 2026, contemplates Brindoval acting as Sole Lead Arranger, Sole Bookrunner, and Administrative Agent for the Facility. Brindoval would underwrite the full $200,000,000 commitment amount, with an expressed intention to syndicate down to a $75,000,000 hold position. The anticipated syndication structure includes Harborstone Capital Partners LLC at $50,000,000, Pinnacle Ridge Credit Fund II LP at $40,000,000, and an additional $35,000,000 to be allocated among other lenders to be identified during the syndication process.
The transaction's sources and uses are as follows:
Sources:
Uses:
The target execution date for the commitment letter is April 18, 2026. As drafted, the commitment letter would expire 45 days following execution — i.e., on June 2, 2026. The target closing and funding date for the Acquisition and the Facility is June 30, 2026.
This memorandum addresses six key areas that we believe require particular attention and, in several cases, further negotiation prior to execution:
(1) Market flex provisions, including spread and OID caps, structural flex, and related mechanics;
(2) SunGard closing conditions and alignment with the acquisition agreement;
(3) Scope of Specified Representations that serve as conditions to funding;
(4) Material Adverse Effect definition and carve-outs;
(5) Commitment letter expiration timeline and extension mechanics; and
(6) Comparison to recent sponsor-backed SaaS commitment letters for market benchmarking.
Overall Recommendation. The commitment letter is broadly consistent with prevailing market practice for sponsor-backed SaaS acquisition financings. However, several provisions require modification to adequately protect Solara's interests and to ensure that the commitment letter does not contain conditions or terms that are more restrictive than those in the acquisition agreement. The most significant areas requiring negotiation are: (a) reducing the market flex caps to the +37.5 basis point levels agreed upon during the April 10 negotiation call, (b) eliminating the condition requiring accuracy of all credit agreement representations (which is inconsistent with the limited conditionality framework), (c) adding missing carve-outs to the Material Adverse Effect definition, and (d) extending the commitment letter expiration period to provide adequate runway through the targeted closing date. Our detailed recommendations and proposed negotiation strategy are set forth in the sections that follow.
II. BACKGROUND AND TRANSACTION SUMMARY
A. The Sponsor
Solara Digital Infrastructure LP is a Delaware limited partnership with its principal offices at 1700 Market Street, Suite 2400, Wilmington, Delaware 19801. Solara was co-founded by Viktor Strand and Nadia Okafor and is focused on growth equity and leveraged buyout investments in the digital infrastructure, cloud computing, and enterprise software sectors. Priya Vasudeva serves as Solara's General Counsel, and Derek Raines serves as Chief Financial Officer.
Solara manages approximately $4.8 billion in total assets under management across three flagship funds and related co-investment vehicles. The current fund — Solara Digital Infrastructure Fund IV LP — has $1.65 billion in committed capital, of which approximately $740 million has been deployed as of March 2026. Fund IV will serve as the primary equity investor in the Acquisition, contributing $130,000,000 in cash equity (representing approximately 41.3% of the enterprise value). The Borrower entity, Solara Digital Acquisition Holdings LLC, is a newly formed Delaware limited liability company and will be a wholly owned subsidiary of Fund IV. The Borrower's Delaware Secretary of State filing (File No. 7531209) is pending, and an Employer Identification Number (EIN: 93-4718206) has been applied for and is pending assignment by the Internal Revenue Service.
B. The Target
Meridian Cloud Solutions Inc. is a Delaware corporation headquartered at 450 Technology Parkway, Suite 800, Austin, Texas 78759. Meridian was founded by Jason Tremblay, who currently serves as Chief Executive Officer. Margaret "Maggie" Cho serves as Chief Financial Officer and Rohan Deshpande serves as Chief Technology Officer.
Meridian operates a cloud-native software-as-a-service ("SaaS") platform that provides portfolio analytics, risk reporting, investor reporting, and data aggregation tools to mid-market asset managers, registered investment advisors ("RIAs"), and family offices. The platform is designed to serve the specific needs of firms managing between $500 million and $10 billion in assets under management and has developed a loyal and growing customer base in this segment. The key financial metrics for Meridian are as follows:
C. Acquisition Structure
The Acquisition involves the purchase of 100% of the outstanding equity interests of Meridian from the existing shareholders: Ashford Ventures Partners LLC (approximately 52%), Jason Tremblay (approximately 28%), and management and other employees (approximately 20%). As part of the transaction, Jason Tremblay will roll over approximately $20,000,000 of his proceeds into equity of the Borrower or a related acquisition subsidiary, providing continued alignment with the management team post-closing.
The total purchase price is $315,000,000, representing a valuation of approximately 16.84x LTM Adjusted EBITDA. On a leverage basis, the $200,000,000 Facility represents approximately 10.70x Debt/LTM EBITDA and approximately 3.21x Debt/ARR. The equity contribution of $130,000,000 (together with the $20,000,000 Tremblay rollover, though such rollover is not included in the sources and uses analysis above as it relates to seller-side proceeds allocation) represents approximately 41.3% of the enterprise value, which is consistent with prevailing equity contribution requirements for sponsor-backed SaaS leveraged acquisitions.
D. Advisors and Professionals
The transaction involves the following advisors and professional firms:
On the lender side, Brindoval's internal deal reference number is CNB-TLF-2026-0389. Thomas Wilder, Managing Director in Brindoval's Technology Leveraged Finance group, serves as the coverage banker, and Sandra Fleischer, Senior Vice President in Brindoval's Credit Risk department, serves as the assigned credit officer.
E. Negotiation Timeline
The negotiation of the commitment letter and related term sheet has proceeded as follows:
• March 21, 2026: Initial term sheet received from Brindoval.
• March 28, 2026: Calderwood & Harkness first markup of the term sheet delivered to Broadwick & Thayer.
• April 4, 2026: Broadwick & Thayer counter-markup returned.
• April 7–14, 2026: Second markup and negotiation calls (including the April 10 call at which the +37.5 bps flex compromise was reached).
• April 18, 2026 (Target): Execution of final agreed term sheet, concurrent with execution of the commitment letter and fee letter.
The broader transaction timeline envisions a due diligence period running from approximately April 21 through May 30, 2026, an execution-ready draft of the definitive credit agreement targeted for May 22, credit agreement signing targeted for June 16, and closing and funding targeted for June 30, 2026.
III. MARKET FLEX PROVISIONS
A. Overview of Brindoval's Market Flex Rights as Drafted
The commitment letter, as currently drafted, grants Brindoval, in its capacity as Sole Lead Arranger and Sole Bookrunner, the right to modify certain pricing and structural terms of the $200,000,000 Facility in order to facilitate successful syndication. These provisions — commonly referred to as "market flex" — are standard features of commitment letters where the lead arranger intends to syndicate all or a portion of its underwritten commitment to other lenders. The purpose of market flex is to give the arranger flexibility to adjust terms in response to syndication market conditions, investor feedback, and pricing demands from potential participants.
The specific flex rights set forth in the current draft of the commitment letter are as follows:
Interest Rate Spread Flex. Brindoval has the right to increase the Adjusted Term SOFR spread by up to +50 basis points, from the base spread of SOFR + 475 basis points to a maximum of SOFR + 525 basis points. This increase would apply to the entire outstanding principal of the Facility and would constitute a permanent change to the borrower's ongoing interest cost.
Original Issue discount (OID) Flex. Brindoval has the right to increase the OID by up to an additional 50 basis points, from the base OID of 2.00% to a maximum of 2.50%. At the base OID of 2.00%, the borrower's net proceeds from the $200,000,000 Facility would be $196,000,000. If full OID flex were exercised, net proceeds would be reduced to $195,000,000.
Structural Flex. Brindoval has the right to make structural modifications to the Facility to facilitate syndication, including the right to add a revolving credit facility or to modify the amortization schedule. The structural flex provision as currently drafted is broadly worded and does not contain express limitations on the scope of permitted modifications.
The commitment letter also provides that the SOFR floor of 1.00% and the SOFR credit spread adjustment of 10 basis points remain unchanged under any exercise of flex rights. The default rate (an additional 200 basis points over the then-applicable interest rate) is likewise not subject to flex.
B. Analysis of Market Flex Caps
The +50 basis point cap on spread flex and the +50 basis point cap on OID flex are at the wider end of current market practice for sponsor-backed SaaS acquisition financings. Based on our review of comparable transactions in Q3 2025 through Q1 2026 (discussed in greater detail in Section VIII below), flex caps have typically fallen in the range of +25 basis points to +50 basis points on spread and +25 basis points to +50 basis points on OID, with median figures clustering around +37.5 basis points on spread and between +25 and +37.5 basis points on OID. The Brindoval draft, at +50 basis points on both, positions the borrower at the maximum end of the observed range, which we do not believe is warranted given Brindoval's own positive internal assessment of syndication prospects (as communicated by Thomas Wilder during the March 28 call) and the generally favorable market conditions for SaaS credits in the current lending environment.
The economic impact of the flex provisions, if fully exercised, is meaningful and warrants careful attention:
Spread Flex Impact. If Brindoval exercises the full +50 basis point spread flex (increasing the spread from SOFR + 475 bps to SOFR + 525 bps), the incremental annual interest cost on the $200,000,000 principal balance would be $1,000,000 per year. Over the seven-year term of the Facility (assuming no prepayments), the aggregate incremental interest cost attributable to full spread flex exercise would be approximately $7,000,000 on an undiscounted basis.
OID Flex Impact. If Brindoval exercises the full +50 basis point OID flex (increasing the OID from 2.00% to 2.50%), the additional upfront cost to the borrower would be $1,000,000, reducing net proceeds from $196,000,000 to $195,000,000. This would effectively reduce the amount of cash available at closing, potentially requiring a corresponding increase in the equity contribution or a reduction in cash to the balance sheet.
Combined Maximum Flex Cost. If both the full spread flex and full OID flex are exercised, the combined maximum additional cost to the borrower would be approximately $1,000,000 upfront plus $1,000,000 per year in incremental interest expense.
April 10 Negotiation Call Compromise. We note that the April 10 negotiation call between Philip Hartmann and Lisa Morrow (for Calderwood & Harkness) and Catherine Hartwell and James Okoro (for Broadwick & Thayer), with Thomas Wilder and Sandra Fleischer of Brindoval participating, produced a verbal agreement to reduce the flex caps to +37.5 basis points on both spread and OID. This compromise should be memorialized in the commitment letter, replacing the +50 basis point caps in the current draft. Under the compromised flex caps:
• Maximum spread: SOFR + 512.5 bps (base of 475 bps + 37.5 bps flex)
• Maximum OID: 2.375% (base of 2.00% + 0.375% flex)
• Maximum annual incremental interest cost (spread flex): $750,000
• Maximum additional OID cost: $750,000
• Combined maximum flex cost: approximately $750,000 upfront + $750,000/year
This represents a meaningful reduction in the borrower's maximum flex exposure — approximately $250,000 per year in interest savings and $250,000 in reduced upfront costs relative to the current draft — and brings the commitment letter in line with the median of the comparable set.
C. Structural Flex Concerns
The structural flex provision in the Brindoval draft is, in our view, overly broad and warrants significant narrowing. As currently drafted, the provision grants Brindoval the right to "make such modifications to the terms and structure of the Credit Facility as the Lead Arranger may determine in its reasonable judgment to be necessary or advisable to facilitate a successful syndication," including without limitation the right to "add one or more revolving credit facilities" or to "modify the amortization schedule." This language, while typical as a starting point in initial arranger drafts, provides Brindoval with discretion that could, if exercised without constraint, materially alter the economics and covenants of the Facility in ways that are adverse to the borrower.
We recommend that the structural flex provision be limited such that Brindoval may not, without the borrower's prior written consent, make modifications that would:
(i) Increase the aggregate principal amount of the borrower's debt obligations above $200,000,000;
(ii) Shorten the maturity date of the Facility below the currently contemplated date of June 30, 2033 (seven years from the expected closing date);
(iii) Increase mandatory amortization above 1.0% per annum of the original principal amount of the Facility ($2,000,000 per year, payable in equal quarterly installments of $500,000), which is the current term sheet provision;
(iv) Impose any new financial maintenance covenants beyond the springing Total Net Leverage covenant at 7.50x (tested only when revolving credit facility utilization exceeds 35% of the revolving commitment, if a revolving facility is added as part of structural flex); or
(v) Modify the prepayment provisions (including the call protection schedule) in a manner adverse to the borrower.
In addition, we recommend that any exercise of structural flex that would add a revolving credit facility be subject to separate agreement on the terms of such revolving facility, including the revolving commitment amount, availability conditions, pricing, and any commitment fees. The addition of a revolving facility should not be a unilateral arranger right but should require the borrower's consent with respect to the material terms thereof.
D. Recommendations on Market Flex
Based on the foregoing analysis, our recommendations with respect to the market flex provisions are as follows:
Primary Recommendation. Replace the +50 basis point flex caps on both spread and OID with +37.5 basis point caps, consistent with the verbal compromise reached during the April 10 negotiation call. This brings the commitment letter to the median of the comparable set and reflects the parties' existing understanding.
Secondary Recommendation. Add a sunset provision to the market flex rights. Specifically, the flex rights should expire upon the earlier of (a) successful completion of the syndication of the Facility (defined as the closing of primary syndication assignments to co-lenders) or (b) 90 calendar days following the closing date. This prevents Brindoval from exercising flex rights well after the syndication process has concluded or well into the term of the Facility.
Structural Flex Limitations. Narrow the structural flex provision as described in Section III.C above, including express prohibitions on increasing aggregate debt, shortening maturity, increasing amortization, or adding new financial maintenance covenants.
Consultation and Notice. Require that Brindoval consult with the borrower on a commercially reasonable efforts basis before exercising any flex rights, and provide at least 5 business days' prior written notice to the borrower before any flex exercise becomes effective. This notice requirement will allow the borrower and its counsel to assess the impact of the proposed flex exercise and, if appropriate, raise concerns or propose alternatives.
IV. SUNGARD CLOSING CONDITIONS AND ALIGNMENT WITH ACQUISITION AGREEMENT
A. Overview of SunGard Provisions
The commitment letter incorporates "SunGard" limited conditionality provisions — a market standard framework, named for the precedent-setting 2005 SunGard Data Systems leveraged buyout, that limits the conditions to funding under the commitment letter to a specified, enumerated set of conditions intended to mirror, but not exceed, the conditions to closing under the acquisition agreement. The purpose of SunGard limited conditionality is to provide the borrower and the sponsor with "financing certainty" — i.e., assurance that if the acquisition closes, the committed financing will be funded, subject only to a narrow and defined set of conditions that the borrower can satisfy or that are within the borrower's reasonable control.
The conditions precedent to funding set forth in the current draft of the Brindoval commitment letter are as follows:
(1) Execution of Definitive Credit Agreement. The borrower and Brindoval (as Administrative Agent) shall have executed and delivered a definitive credit agreement consistent in all material respects with the term sheet attached to the commitment letter.
(2) Closing of the Acquisition. The Acquisition shall close substantially concurrently with the funding of the Facility, in accordance with the terms of the definitive acquisition agreement, without giving effect to any amendment, modification, or waiver thereof that is materially adverse to the interests of the lenders, unless consented to by Brindoval.
(3) Accuracy of Specified Representations. The Specified Representations (as discussed in Section V below) shall be true and correct in all material respects as of the closing date.
(4) Absence of a Material Adverse Effect. No Material Adverse Effect (as discussed in Section VI below) shall have occurred since December 31, 2025.
(5) Delivery of Customary Closing Deliverables. The borrower shall have delivered customary closing deliverables, including organizational documents, officer's certificates, secretary's certificates, legal opinions (from Calderwood & Harkness LLP as borrower's counsel), lien search results, and evidence of insurance.
(6) Execution and Delivery of Security Documents; Perfection. The borrower and the guarantors shall have executed and delivered the security agreement, the pledge agreement, and any other security documents, and all steps necessary to perfect first-priority security interests in the collateral shall have been completed.
(7) Receipt of Financial Statements. The borrower shall have delivered to Brindoval: (a) audited financial statements of Meridian for fiscal years 2025 and 2024, prepared in accordance with GAAP and audited by Whitfield & Sable LLP, accompanied by unqualified audit opinions; and (b) unaudited interim financial statements for the most recently completed fiscal quarter and fiscal year-to-date period for which such statements are available.
(8) Payment of Fees and Expenses. The borrower shall have paid all fees and expenses due and payable on the closing date, including the arrangement fee (1.50% of the aggregate commitment, or $3,000,000), the structuring fee ($500,000), the OID (2.00% of the aggregate commitment, or $4,000,000), and Brindoval's reasonable and documented out-of-pocket expenses, including the fees and disbursements of Broadwick & Thayer LLP as lender's counsel.
(9) Solvency Certificate. The borrower shall have delivered a solvency certificate from the Chief Financial Officer of the borrower (or, if the borrower's CFO has not yet been designated, from the CFO of Solara Digital Infrastructure LP), certifying that after giving effect to the Acquisition, the incurrence of the Facility, and the other transactions contemplated by the commitment letter and the acquisition agreement, the borrower and its subsidiaries (on a consolidated basis) are solvent.
B. Alignment Analysis with Acquisition Agreement Conditions
The fundamental principle underlying SunGard limited conditionality is that the conditions to the lender's obligation to fund must not be more restrictive than the conditions to the buyer's obligation to close the acquisition. If the purchase agreement would permit (or require) the buyer to close notwithstanding the non-satisfaction of a particular condition, the commitment letter should not separately provide the lender with a basis to decline funding based on the same circumstance. Any gap between the acquisition agreement conditions and the commitment letter conditions creates a risk that the borrower could be obligated to close the acquisition without the committed financing in place — the precise risk that SunGard limited conditionality is designed to eliminate.
We have identified the following areas of potential misalignment between the conditions in the Brindoval draft and the expected conditions in the acquisition agreement:
Regulatory Approvals. The commitment letter as drafted broadly conditions funding on the receipt of "all regulatory approvals necessary for the consummation of the Acquisition and the operation of the business of the Borrower and its subsidiaries following the Closing Date." This language is significantly broader than the expected acquisition agreement condition, which, based on our discussions with Richard Fontaine at Alderton Paige LLP (who is leading the drafting of the acquisition agreement), is expected to condition closing only on (a) expiration or early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (to the extent applicable based on the parties' sizes, the transaction size, and applicable filing thresholds), and (b) the absence of any governmental order, injunction, or decree that would prohibit or restrain the consummation of the Acquisition. We recommend that the commitment letter be conformed to match the acquisition agreement's formulation of this condition, eliminating the broad reference to "all regulatory approvals" and instead referencing HSR Act clearance (if required) and the absence of prohibitive governmental orders.
Financial Statements. The commitment letter conditions funding on delivery of audited financial statements and unaudited interim financial statements. While this is a standard condition, the draft does not specify with precision which financial statements are required or confirm that the condition is satisfied by delivery of the financial statements that are currently available. Whitfield & Sable LLP has already issued unqualified audit opinions on Meridian's FY 2025 and FY 2024 financial statements, and those audited financials are in the borrower's possession. We recommend specifying that the financial statement condition is satisfied by delivery of (a) the existing FY 2025 and FY 2024 audited financial statements (which have already been prepared and issued), and (b) the most recently available quarterly unaudited financial statements (expected to be Q1 2026 unaudited financials). The condition should expressly state that no separate "bring-down" audit, re-audit, or additional compilation is required as a condition to funding. This clarification is important because any ambiguity in the financial statement condition could be invoked by the lender as a basis to delay or decline funding.
Collateral Perfection. The draft requires "perfection of all security interests" as a condition to funding. This formulation is problematic because certain perfection steps — in particular, the filing of intellectual property security agreements with the United States Patent and Trademark Office, the execution of landlord waivers and estoppels, the establishment of deposit account control agreements with all depository banks, and the perfection of security interests in the equity of any foreign subsidiaries — may not be capable of completion at or prior to closing due to third-party processing times, the need for counterparty cooperation, or other practical constraints. We recommend that the collateral perfection condition be limited to those perfection steps that can reasonably be completed at or prior to closing, including:
(a) Filing of UCC-1 financing statements with the Delaware Secretary of State;
(b) Delivery of stock certificates (if any) and executed stock powers for pledged equity interests in domestic subsidiaries;
(c) Execution of deposit account control agreements with respect to the borrower's primary operating accounts (to the extent the depository banks have provided their standard form agreements in advance of closing); and
(d) Delivery of executed intellectual property security agreements (with filing to be made promptly following closing).
All other perfection steps — including, without limitation, the filing of IP security agreements with the USPTO, the execution of landlord waivers with respect to leased properties, the perfection of security interests in equity of any foreign subsidiaries, and the establishment of control agreements for additional deposit accounts — should be subject to a customary post-closing perfection period of 60 to 90 days following the closing date, as further discussed in our recommendations below.
C. Financing Cooperation Covenant
An important element of the overall financing structure is the financing cooperation covenant that will be included in the acquisition agreement. Based on Lisa Morrow's email correspondence with Richard Fontaine at Alderton Paige LLP on April 9, 2026, the acquisition agreement will include a covenant obligating Meridian and its management team — including Jason Tremblay (CEO), Maggie Cho (CFO), and Rohan Deshpande (CTO) — to cooperate with Solara's financing efforts during the period between signing and closing. This cooperation is expected to include:
• Providing financial information, data, and projections reasonably requested by the lenders or the lead arranger;
• Participating in lender presentations, management meetings, and due diligence sessions;
• Facilitating access to Meridian's properties, books, and records;
• Providing customary authorization letters and representation letters to auditors;
• Assisting in the preparation of an information memorandum or confidential information package for syndication purposes; and
• Using commercially reasonable efforts to obtain estoppel certificates, consents, and other third-party deliverables required in connection with the financing.
These obligations will be subject to customary limitations, including limitations on the scope of management time required, expense reimbursement provisions, and carve-outs for privileged or competitively sensitive information.
We recommend that the commitment letter expressly cross-reference the acquisition agreement's financing cooperation covenant as the mechanism through which Brindoval will obtain the information and cooperation it requires, rather than imposing a separate, potentially broader information undertaking directly on the borrower. The current draft of the commitment letter includes an information undertaking that requires the borrower to "provide such financial and other information as the Lead Arranger may reasonably request in connection with the syndication of the Facility." While this language is not unreasonable on its face, it could be read to impose obligations that extend beyond — or are duplicative of — the financing cooperation covenant in the acquisition agreement, creating potential confusion and conflicting obligations. Tying the commitment letter's information provisions to the acquisition agreement's financing cooperation covenant provides a cleaner, more predictable framework.
D. Recommendations on SunGard Provisions
Based on the foregoing analysis, our recommendations with respect to the SunGard limited conditionality provisions are as follows:
1. Conform all conditions to funding to the acquisition agreement. Every condition to the lender's obligation to fund under the commitment letter should have a corresponding condition in the acquisition agreement that is no less favorable to the buyer than the commitment letter condition is to the borrower. Any condition in the commitment letter that does not have a corresponding condition in the acquisition agreement — or that is more restrictive than the corresponding condition — should be eliminated or conformed. This is the fundamental principle of limited conditionality and must be preserved.
2. Narrow the regulatory approval condition. Replace the broad reference to "all regulatory approvals" with a specific reference to HSR Act clearance (if applicable) and the absence of prohibitive governmental orders, consistent with the expected acquisition agreement formulation.
3. Clarify the financial statement condition. Specify that the condition is satisfied by delivery of the existing FY 2025 and FY 2024 audited financials and the most recently available quarterly unaudited financials, with no separate bring-down audit or re-audit required.
4. Narrow the information undertaking. Cross-reference the acquisition agreement's financing cooperation covenant as the primary mechanism for information delivery and cooperation, and eliminate any stand-alone information undertaking in the commitment letter that would impose broader obligations.
5. Permit post-closing perfection. Limit the perfection condition to steps that can be completed at or prior to closing, and provide a 60-to-90-day post-closing perfection period for specified items (foreign subsidiary equity, IP filings, landlord waivers, and certain deposit account control agreements).
6. Include an express Specified Representations limitation. Include an express provision stating that the only representations the accuracy of which is a condition to funding are the "Specified Representations" (as enumerated) and the "Specified Acquisition Agreement Representations" (as defined by reference to the acquisition agreement). This is discussed further in Section V.
V. SCOPE OF SPECIFIED REPRESENTATIONS
A. Brindoval's Draft Approach
Under the SunGard limited conditionality framework, the accuracy of representations is a condition to funding only with respect to a defined, enumerated list of "Specified Representations." These are the representations that are so fundamental to the transaction and the lender's credit decision that their inaccuracy should excuse the lender from its obligation to fund. All other representations — while they will be included in the definitive credit agreement and will be relevant for ongoing compliance, events of default, and other purposes — are not conditions to the closing of the financing.
The commitment letter as drafted by Brindoval lists the following as "Specified Representations":
(i) Organizational existence and good standing of the borrower and each guarantor;
(ii) Power and authority to enter into the loan documents;
(iii) Due authorization, execution, and delivery of the loan documents;
(iv) No conflicts between the loan documents and the organizational documents of the borrower and each guarantor;
(v) Compliance with Federal Reserve margin regulations (Regulations T, U, and X);
(vi) Status under the Investment Company Act of 1940;
(vii) Compliance with the Office of Foreign Assets Control ("OFAC") sanctions programs, the Foreign Corrupt Practices Act and other anti-corruption laws, and applicable anti-money laundering laws (including the Bank Secrecy Act and the USA PATRIOT Act);
(viii) Use of proceeds (confirming that loan proceeds will be used solely to finance the Acquisition, pay transaction fees and expenses, and fund cash to the balance sheet of the borrower);
(ix) Solvency of the borrower and its subsidiaries (on a consolidated basis, after giving effect to the Acquisition and the incurrence of the Facility); and
(x) Creation, validity, and perfection of security interests granted under the security documents.
In addition to the Specified Representations, the Brindoval draft also defines a category of "Specified Acquisition Agreement Representations" — i.e., representations made by Meridian (or its shareholders) in the acquisition agreement, the accuracy of which is a condition to Solara's obligation to close the Acquisition under the acquisition agreement. The concept is that if the buyer is entitled to walk away from the acquisition because certain acquisition agreement representations are inaccurate, the lender should also be entitled to decline to fund. Conversely, if the buyer is required to close the acquisition notwithstanding an inaccuracy in a representation, the lender should also be required to fund.
B. Analysis and Market Practice
The list of Specified Representations enumerated in the Brindoval draft is generally consistent with market practice for sponsor-backed SaaS acquisition financings. The ten categories of Specified Representations identified above are standard and are included in virtually all limited conditionality commitment letters in the current market. We do not recommend adding to or subtracting from this list.
However, there is a significant issue with the Brindoval draft that must be addressed. In addition to the Specified Representations and the Specified Acquisition Agreement Representations, the draft includes a separate closing condition requiring that "all representations and warranties set forth in the Credit Agreement shall be true and correct in all material respects as of the Closing Date." This provision is fundamentally inconsistent with the limited conditionality framework. The entire purpose of the Specified Representations construct is to narrow the universe of representations that serve as conditions to funding. Conditioning funding on the accuracy of all credit agreement representations effectively nullifies this construct and converts the commitment letter from a limited conditionality commitment into a full conditionality commitment. This is out of market for sponsor-backed acquisition financings and was not present in any of the five comparable commitment letters we reviewed.
This issue is likely the result of precedent-driven drafting by Broadwick & Thayer rather than a deliberate negotiating position by Brindoval, but regardless of its origin, it must be struck. We anticipate that Catherine Hartwell's team will agree to this deletion once the inconsistency is raised, but we should be prepared to make the argument forcefully if there is resistance.
Bring-Down Standard. The bring-down standard for the Specified Acquisition Agreement Representations should be materiality-qualified — i.e., the Specified Acquisition Agreement Representations need only be accurate to the extent that their inaccuracy, individually or in the aggregate, would not constitute a Material Adverse Effect. This mirrors the customary bring-down standard for the buyer's closing condition under the acquisition agreement and ensures that the commitment letter does not impose a more demanding accuracy standard than the acquisition agreement itself. The current draft does not clearly specify the bring-down standard for Specified Acquisition Agreement Representations, and we should add this clarification.
C. Recommendations.
1. Strike the "all representations" condition. Delete the closing condition requiring accuracy of "all representations and warranties set forth in the Credit Agreement." Limit the representation accuracy condition to the enumerated Specified Representations and the Specified Acquisition Agreement Representations only.
2. Specify the bring-down standard. Confirm that the bring-down standard for Specified Acquisition Agreement Representations mirrors the bring-down standard for the corresponding representations in the acquisition agreement (i.e., accuracy except to the extent that any inaccuracy would not constitute a Material Adverse Effect).
3. Add customary materiality qualifiers. For each Specified Representation that is not already qualified by a materiality standard, add a "true and correct in all material respects" qualifier. This is consistent with market practice and avoids a scenario in which a minor, immaterial inaccuracy in a Specified Representation could serve as a technical basis for Brindoval to decline funding.
VI. MATERIAL ADVERSE EFFECT DEFINITION AND CARVE-OUTS
A. Brindoval's Draft MAE Definition
The commitment letter defines "Material Adverse Effect" (or "MAE") as:
"any event, change, circumstance, occurrence, effect, or condition that, individually or in the aggregate, has had or would reasonably be expected to have a material adverse effect on: (a) the business, operations, assets, liabilities (including contingent liabilities), financial condition, or results of operations of [Meridian] and its subsidiaries, taken as a whole, or (b) the ability of the Borrower and the Guarantors to perform their respective material obligations under the Loan Documents."
This definition is bipartite, addressing both (a) the condition of the target's business and (b) the ability of the borrower to perform under the loan documents. The first prong is the primary substantive prong and is the one that typically drives MAE disputes in leveraged acquisition financings. The second prong is narrower and is generally relevant only in circumstances where the borrower entity itself (as distinguished from the target) is unable to meet its obligations.
B. Analysis of Carve-Outs
The MAE definition's practical scope is determined primarily by the carve-outs — i.e., the categories of events, changes, or conditions that are expressly excluded from the definition and therefore cannot constitute or contribute to a Material Adverse Effect. The breadth of the carve-outs directly affects the risk allocation between the lender and the borrower: broader carve-outs protect the borrower by ensuring that general market or industry disruptions do not give the lender a basis to decline funding, while narrower carve-outs protect the lender by preserving its ability to invoke the MAE condition in a wider range of circumstances.
The Brindoval draft includes the following carve-outs:
(i) Changes in general economic conditions in the United States or globally;
(ii) Changes in conditions in the financial, banking, or securities markets generally;
(iii) Changes in applicable law or regulations, or in authoritative interpretations thereof, or changes in GAAP or other applicable accounting standards;
(iv) Changes or conditions generally affecting the SaaS, cloud computing, or technology industry in which Meridian operates;
(v) Acts of war (whether or not declared), armed hostilities, sabotage, terrorism, or military actions, or any escalation or worsening thereof; natural disasters, including earthquakes, hurricanes, tornados, floods, or other natural calamities; and
(vi) Effects resulting from the public announcement or pendency of the Acquisition itself, including any impact on relationships with customers, suppliers, employees, or partners attributable to the identity of the buyer.
While these carve-outs cover several important categories, the Brindoval draft omits a number of carve-outs that are now standard in sponsor-backed acquisition financings and that we expect will be included in the acquisition agreement's MAE definition. The missing carve-outs are:
(vii) Actions at Lender's Request. Changes or effects resulting from actions taken by the borrower, any guarantor, or Meridian at the written request of, or with the prior written consent of, Brindoval or any of the lenders should be excluded. It would be inequitable for the lender to invoke an MAE that it caused or to which it affirmatively consented.
(viii) Seasonal Fluctuations. Seasonal fluctuations in Meridian's business, operations, or financial results that are consistent with historical patterns and prior periods should be excluded. SaaS businesses often experience predictable seasonal variation in bookings, renewals, and cash flows, and such variation should not give rise to an MAE finding.
(ix) Pandemics and Public Health Emergencies. Since 2020, it has become standard practice — and, in the sponsor-backed acquisition market, virtually universal — to include a carve-out for the effects of pandemics, epidemics, disease outbreaks, and public health emergencies, including any actions taken by governmental authorities in response thereto (such as quarantines, shelter-in-place orders, or business closure mandates). The omission of this carve-out from the Brindoval draft is a notable departure from market practice.
(x) Failure to Meet Projections. The failure of Meridian to meet any internal budgets, projections, forecasts, or estimates of revenue, earnings, or other financial metrics, in and of itself, should not constitute a Material Adverse Effect. This carve-out is important because it prevents the lender from arguing that a shortfall against a projection or forecast — which is inherently uncertain and forward-looking — constitutes an MAE. The carve-out customarily includes a proviso that the underlying facts or circumstances giving rise to the failure to meet projections are not themselves excluded from the MAE definition (i.e., the exclusion applies only to the fact of the missed projection, not to the root cause, which may independently constitute an MAE if it is not otherwise carved out).
(xi) Changes in Credit, Financial, or Capital Markets. While carve-out (ii) in the Brindoval draft references changes in "financial, banking, or securities markets," it does not expressly reference changes in credit markets, interest rates, or the availability of financing generally. We recommend broadening this carve-out to expressly include changes in credit markets and prevailing interest rates, which could affect the borrower's cost of capital or refinancing prospects but should not give rise to an MAE determination.
Disproportionate Impact Exception. A critical element of the MAE carve-out framework is the "disproportionate impact" exception. Under this exception, the general carve-outs described above do not apply to the extent that the relevant event, change, or condition has a disproportionate adverse impact on Meridian and its subsidiaries relative to other similarly situated companies operating in the SaaS, cloud computing, or technology industry. For example, a general downturn in the SaaS industry would ordinarily be carved out under carve-out (iv), but if that downturn affected Meridian significantly more than its peers, the disproportionate impact could still constitute an MAE. The disproportionate impact exception is standard market practice and is present in all five of the comparable commitment letters we reviewed. It is absent from the Brindoval draft and must be added.
C. Alignment with Acquisition Agreement MAE
Consistent with the overarching principle of limited conditionality, the MAE definition in the commitment letter should be no more restrictive than the MAE definition in the acquisition agreement. If the acquisition agreement provides that a certain category of events cannot constitute an MAE for purposes of the buyer's closing condition, then the same category of events should not constitute an MAE for purposes of the lender's funding condition. Any asymmetry between the two definitions creates the risk of a "financing gap" — a scenario in which the buyer is required to close the acquisition (because no MAE has occurred under the acquisition agreement) but the lender is entitled to decline funding (because an MAE has occurred under the narrower commitment letter definition).
We recommend one of two approaches to ensure alignment:
Approach 1: Cross-Reference. The commitment letter could define "Material Adverse Effect" by reference to the acquisition agreement — e.g., "'Material Adverse Effect' shall have the meaning set forth in the Acquisition Agreement." This is the cleanest approach and eliminates any possibility of definitional divergence, but it requires the acquisition agreement to have been executed (or at least substantially finalized) before the commitment letter is signed. Given the current timeline (commitment letter execution targeted April 18; acquisition agreement execution expected in June), this approach may require a mechanism allowing the MAE definition to be updated upon execution of the acquisition agreement.
Approach 2: Parallel Language. Alternatively, the commitment letter could contain its own MAE definition, drafted to be substantively identical to the expected acquisition agreement definition. This requires close coordination with Alderton Paige LLP (Richard Fontaine) to ensure that the definitions remain aligned as the acquisition agreement is negotiated and finalized. If this approach is used, the commitment letter should include a provision stating that to the extent the MAE definition in the definitive credit agreement is more favorable to the borrower than the MAE definition in the acquisition agreement, the commitment letter MAE definition shall be deemed to have been amended to conform to the acquisition agreement definition.
We recommend coordination with Richard Fontaine at Alderton Paige to determine which approach is preferable given the current state of the acquisition agreement negotiations. In either case, the substantive content of the MAE definition — including all of the carve-outs and the disproportionate impact exception discussed above — should be consistent across both agreements.
D. Recommendations.
1. Add the missing carve-outs. Add carve-outs (vii) through (xi) as described above: actions at the lender's request, seasonal fluctuations, pandemics and public health emergencies, failure to meet projections (with the underlying-cause proviso), and changes in credit/financial/capital markets.
2. Add the disproportionate impact exception. Include a provision that the general carve-outs do not apply to the extent the relevant change or condition has a disproportionately adverse effect on Meridian relative to similarly situated companies in the SaaS/technology industry.
3. Align the MAE definition with the acquisition agreement. Implement either the cross-reference approach or the parallel language approach described above, in coordination with Alderton Paige LLP.
4. Test the MAE only as of the closing date. Ensure that the MAE condition is tested only as of the closing date — not as of the commitment letter date or any interim date. The current draft is ambiguous on this point, referencing events that have occurred "since December 31, 2025." We recommend clarifying that the MAE condition looks to changes since December 31, 2025 that have had or would reasonably be expected to have a material adverse effect as of the closing date.
VII. COMMITMENT LETTER EXPIRATION AND EXTENSION MECHANICS
A. Expiration Date and Calculation
The commitment letter provides that the commitment will expire 45 calendar days following the execution date. Based on the target execution date of April 18, 2026, the calculated expiration date is June 2, 2026.
The target closing and funding date for the Acquisition and the Facility is June 30, 2026. This means that, under the current draft, the commitment letter would expire 28 days before the target closing date. If the Acquisition does not close by June 2, 2026, Brindoval's commitment would lapse absent an extension, leaving the borrower without committed financing for the Acquisition.
B. Extension Mechanics as Drafted
The Brindoval draft addresses extensions in only the most general terms. Specifically, the draft provides that the commitment may be extended "in the sole and absolute discretion of the Lead Arranger." The borrower has no right to extend the commitment unilaterally, and no automatic extension mechanism is included. Additionally, no fee is specified in connection with any extension — the draft is silent on whether Brindoval would charge an extension fee and, if so, in what amount.
This formulation provides the borrower with no meaningful extension protection. If the acquisition timeline experiences any delay — even a modest one — the borrower would be entirely dependent on Brindoval's willingness to extend the commitment voluntarily, with no leverage or contractual entitlement.
C. Risk Analysis
The 45-day commitment period is at the short end of market practice. Based on our review of the five comparable commitment letters discussed in Section VIII, commitment periods in recent sponsor-backed SaaS acquisition financings have ranged from 45 to 90 days, with a median of approximately 60 days. Several of the comparables featured commitment periods of 75 days or longer.
The tightness of the 45-day window is further illustrated by the transaction's anticipated timeline:
As the table illustrates, the commitment letter would expire on June 2, just three days after the expected completion of due diligence and approximately two weeks before the targeted credit agreement signing. This leaves virtually no margin for error. If any element of the transaction timeline slips — for example, due to delays in the HSR review process, seller disclosure schedule revisions, ongoing credit agreement negotiations with Broadwick & Thayer, or issues identified during the final phase of due diligence — the commitment could expire before the borrower is in a position to close.
The key risk is straightforward: if the commitment expires and Brindoval declines to extend (or agrees to extend only on modified terms — for example, with wider flex or additional conditions), the borrower could find itself without committed financing at a critical stage of the acquisition process. This could jeopardize the transaction, create leverage for the lender to extract unfavorable concessions, or force the sponsor to seek alternative financing on less favorable terms under time pressure.
D. Recommendations. Primary Recommendation: Extend to 75 Days. We recommend extending the commitment letter expiration to 75 calendar days from execution — i.e., to July 2, 2026. This would provide a 2-day cushion beyond the June 30 target closing date and would be consistent with the duration seen in several of the comparables. A 75-day commitment period remains well within the range of market practice and reflects the inherent complexity of this transaction, including the size of the facility, the syndication structure, and the multi-party acquisition agreement.
Alternative Recommendation: 45 Days Plus Borrower Extension Right. If Brindoval is unwilling to agree to a 75-day commitment period, we recommend retaining the 45-day base period but adding a borrower-initiated extension right of up to 30 additional calendar days (extending the commitment to a maximum of July 2, 2026). This extension right would be exercisable by the borrower upon delivery of written notice to Brindoval at least 5 business days prior to the then-applicable expiration date. If Brindoval insists on an extension fee as a condition to the borrower's extension right, we recommend negotiating the fee to 0.125% of the aggregate commitment amount (i.e., $250,000), which is at the lower end of fees observed in comparable transactions. Payment of the extension fee should be the sole condition to exercise of the extension right — the extension should not be subject to the satisfaction of any additional conditions or to Brindoval's consent.
Consistent Terms During Extension. In either case, the commitment letter should expressly provide that during any extension period, Brindoval's commitment remains fully in force and effect on the same terms and conditions as set forth in the commitment letter, including pricing, market flex caps, conditionality, and all other provisions. Brindoval should not be permitted to use the extension as an opportunity to renegotiate the terms of the commitment.
Termination Notice. We further recommend that any expiration or termination of the commitment letter by Brindoval — whether at the expiration of the stated term or based on a claimed failure of a condition precedent — be subject to at least 10 business days' prior written notice to the borrower, specifying in reasonable detail the basis for the claimed expiration or termination. This notice requirement would give the borrower an opportunity to cure any condition failure or to challenge Brindoval's determination before the commitment lapses.
Coordination with Solara. Before including these recommendations in our markup of the commitment letter, we should discuss them with Priya Vasudeva and Derek Raines at Solara to confirm the sponsor's preference between the 75-day expiration approach and the 30-day extension right approach. There may be strategic considerations — including Solara's relationship with Brindoval and the dynamics of the fee negotiation — that inform which approach to prioritize.
VIII. COMPARISON TO RECENT SPONSOR-BACKED SaaS COMMITMENT LETTERS
A. Methodology. To assess the market positioning of the Brindoval commitment letter, we reviewed five comparable sponsor-backed SaaS acquisition commitment letters from Q3 2025 through Q1 2026. The comparables were selected based on the following criteria: (a) each involved the leveraged acquisition of a SaaS or cloud-based software company by a financial sponsor; (b) enterprise values ranged from $200 million to $500 million; (c) term loan facilities ranged from $125 million to $300 million; and (d) the commitment letter included a limited conditionality (SunGard) framework with specified representations, market flex, and a negotiated MAE definition.
A detailed analysis of the comparables, including a comprehensive discussion of pricing, leverage levels, covenant packages, and syndication structures, is set forth in the separate SaaS Leverage Market Comparison memorandum prepared by Marcus Leung (dated April 11, 2026). This section provides a focused comparison of commitment letter–specific terms.
B. Summary Comparison Table