All,
I hope this message finds you well. I am writing to circulate a proposed agenda for our negotiation call scheduled for Friday, April 10, 2026 at 2:00 PM EDT, at which the parties will discuss the remaining open points on the term sheet for the $200,000,000 Senior Secured Term Loan Facility to be provided by Brindoval National Bank, N.A., as Lead Arranger and Administrative Agent, to Solara Digital Acquisition Holdings LLC in connection with Solara's proposed acquisition of Meridian Cloud Solutions Inc.
As background, Calderwood & Harkness delivered our initial markup of the term sheet on March 28, Broadwick & Thayer returned a counter-markup on April 4, and we circulated our second markup redline yesterday, April 7. I would ask that all participants review that second markup in advance of Friday's call. The purpose of this email is to set forth a proposed agenda so that we can prepare accordingly and make the most efficient use of our time together.
**PROPOSED AGENDA**
**1. Adjusted EBITDA Definition and Add-Backs**
(a) Scope and cap on EBITDA add-backs. The borrower's position remains that pro forma cost savings and synergy add-backs should be capped at 25% of LTM Adjusted EBITDA, and we would like to discuss the basis for Brindoval's proposed broader formulation.
(b) Treatment of non-recurring and transaction-related expenses, including the classification methodology and any temporal limitations on add-back eligibility.
(c) Pro forma adjustments for Permitted Acquisitions and dispositions — mechanics for giving effect to such transactions in the EBITDA calculation on a trailing four-quarter basis.
**2. Excess Cash Flow Sweep Mechanics**
(a) ECF sweep percentages: 50% / 25% / 0%, with step-downs at Total Net Leverage ≤ 4.50x and ≤ 3.50x, respectively.
(b) Netting of voluntary prepayments. The borrower's position is that voluntary prepayments of the term loan made during the applicable fiscal year should reduce the ECF sweep obligation dollar-for-dollar, and we would like to confirm Brindoval's agreement on this point.
(c) Definition of Excess Cash Flow — specifically, the treatment of capital expenditures (funded vs. financed), working capital adjustments, and cash restructuring charges as permitted deductions.
(d) First ECF sweep calculation period: fiscal year ending December 31, 2026 — confirm this is agreed.
**3. Market Flex Provisions**
(a) Cap on Brindoval's market flex rights. The borrower proposes a cap of +37.5 bps on the applicable spread and +37.5 bps on OID, versus Brindoval's current proposal of +50 bps on each. For reference, the current pricing stands at Adjusted Term SOFR + 475 bps (SOFR floor of 1.00%, CSA of 10 bps) with OID of 2.00%.
(b) Structural flex — whether Brindoval retains the right to add a revolving credit facility tranche, modify the amortization schedule (currently 1.0% per annum, or $500,000 per quarter), or make other structural changes, and any limitations on such rights.
(c) Coordination with the commitment letter and fee letter discussions being run in parallel.
**4. Reporting Covenants — SaaS-Specific Metrics**
(a) Monthly ARR reporting, to be delivered within 30 days of each month-end — scope and definition of Annual Recurring Revenue for reporting purposes.
(b) Additional SaaS operating metrics: net revenue retention rate, gross and net customer churn, average contract value, and customer concentration data. The open question is whether these should be elevated to covenant-level reporting requirements or treated as information-only deliverables provided at the borrower's discretion.
(c) Standard financial reporting deliverables — annual audited financial statements (120 days post fiscal year-end), quarterly unaudited financial statements (60 days post quarter-end), and the annual operating budget (60 days post fiscal year-end). We believe these are agreed based on the last exchange and would like to confirm.
**5. Collateral Package — Intellectual Property and Deposit Accounts**
(a) IP security interest: scope of software source code, patents, and trademarks to be pledged, and required filings with the United States Patent and Trademark Office.
(b) Deposit account control agreements: identification of which deposit accounts are subject to DACA requirements and the parameters of any excluded operating account carve-outs.
(c) Equity pledges: 100% of the equity interests of domestic subsidiaries and 65% of the voting equity interests of first-tier foreign subsidiaries — we believe this is agreed and would like to confirm.
(d) Excluded assets: treatment of immaterial intellectual property and contracts containing enforceable anti-assignment provisions.
**6. Other Open Items (Time Permitting)**
(a) Permitted Indebtedness and Permitted Liens basket sizing.
(b) Builder basket mechanics.
(c) Equity cure rights — number of permitted cures (per fiscal year and over the life of the facility), cure amount limitations, and required notice periods.
(d) Springing Total Net Leverage covenant at 7.50x, tested only when the revolving credit facility (if applicable) is drawn in excess of 35% of commitments — confirm this is agreed as a covenant-lite structure for purposes of the term loan.
(e) Asset sale mandatory prepayment: $2,500,000 annual de minimis basket and a 365-day reinvestment period with a 180-day extension — confirm acceptance per the Broadwick & Thayer counter-markup dated April 4.
**7. Timeline and Path to Execution**
(a) Target execution date of April 18, 2026 for both the term sheet and the commitment letter.
(b) Discussion of remaining turn(s) of the term sheet needed to reach final agreed form.
(c) Coordination of commitment letter and fee letter finalization on the same timeline.
**DIAL-IN DETAILS**
Conference Line: (646) 555-0187 Passcode: 904 227 6381#
Please plan for a call duration of approximately 60 to 90 minutes.
* * *
If any participant wishes to add items to the agenda, please flag them for me by end of day Thursday, April 9, so that I can circulate a revised version in advance of the call. On the borrower side, Philip Hartmann will lead the discussion. I understand that Catherine Hartwell and Thomas Wilder will lead for the lender side, respectively.
Thank you all for the continued collaborative effort on this transaction. We look forward to a productive discussion on Friday.
Best regards,
Lisa Morrow Lead Associate Calderwood & Harkness LLP One Liberty Plaza, 44th Floor New York, NY 10006 Direct: (212) 555-4738 Email: lmorrow@calderwoodharkness.com Matter No. 1041-00002