1041-00003 · Solara Digital Infrastructure LP · Post-Closing

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PRIVILEGED AND CONFIDENTIAL — ATTORNEY-CLIENT PRIVILEGE / ATTORNEY WORK PRODUCT

MEMORANDUM

TO: Marcus Elliston, Founder & Managing Partner, Solara Digital Infrastructure LP Priya Narasimhan, Co-Managing Partner & CIO, Solara Digital Infrastructure LP

CC: Harrison Wexford, Responsible Partner, Calderwood & Harkness LLP Beatrice Holloway, Billing Partner, Calderwood & Harkness LLP Leonard Cross, Specialist Partner (Tax), Calderwood & Harkness LLP

FROM: Tiffany Rosenthal, Lead Associate, Calderwood & Harkness LLP Andrew Fitzpatrick, Working Associate, Calderwood & Harkness LLP

DATE: July 15, 2024

RE: Post-Closing Corporate Restructuring and Integration — Acquisition of Cloudium Technologies plc by Solara Digital Infrastructure Fund VI LP

MATTER NO.: 1041-00003

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I. Executive Summary

The purpose of this memorandum is to outline the recommended corporate restructuring steps, subsidiary reorganization actions, intercompany agreement framework, and post-closing corporate governance matters arising from the successful closing of the acquisition of Cloudium Technologies plc ("Cloudium" or the "Company") by Solara Digital Infrastructure Fund VI LP ("Fund VI") through the reverse triangular merger with Stratos Merger Sub Inc. ("Merger Sub"). This memorandum is intended to serve as a comprehensive roadmap for the post-closing integration workstreams that fall within the purview of Calderwood & Harkness LLP ("C&H") as lead transaction counsel, and to facilitate coordination with the broader advisory team.

The Certificate of Merger was filed with the Delaware Secretary of State at 11:59 PM ET on July 9, 2024 (the "Closing Date"), thereby consummating the merger in accordance with the terms and conditions of the Agreement and Plan of Merger dated January 22, 2024, as amended (the "Merger Agreement"). Upon the effectiveness of the Merger, Merger Sub merged with and into Cloudium Technologies plc, with Cloudium surviving the merger as a wholly owned subsidiary of Fund VI. The surviving corporation retains its identity as a public limited company incorporated under the laws of England and Wales (company no. 09734521).

The current post-closing corporate structure is as follows: Cloudium Technologies plc, as the surviving corporation, is now owned by Fund VI (a Delaware limited partnership, EIN 87-4523190), with the co-investment vehicle Solara Digital Co-Invest VI-A LP ("Co-Invest VI-A") having contributed $425,000,000 as part of the aggregate equity contribution to the transaction. Fund VI and Co-Invest VI-A together constitute the principal equity investors in the surviving entity.

In addition to the institutional equity, two rollover equity participants hold equity interests in the surviving entity alongside Fund VI: (i) Jonathan Hargrove, the former Chief Executive Officer of Cloudium, who rolled approximately $142,814,544 of equity value, representing 50% of his 7,736,400 shares of Cloudium common stock at the merger consideration of $36.92 per share; and (ii) Pinnacle Growth Ventures LLC ("Pinnacle"), a growth equity fund managed by Evelyn Carmichael (Managing Member), which rolled approximately $473,241,408 of equity value, representing 60% of its 21,367,200 shares of Cloudium common stock at $36.92 per share. Together, the rollover equity participants hold minority equity interests in the surviving entity with an aggregate rollover value of approximately $616,055,952.

With respect to capital markets matters, Cloudium common stock, which previously traded on the Nasdaq Global Select Market under the ticker symbol "CLDM," was delisted effective July 10, 2024, following the filing of Form 25 (Notification of Removal from Listing and/or Registration under Section 12(b) of the Securities Exchange Act of 1934) with the Securities and Exchange Commission (the "SEC"). Form 15 (Certification and Notice of Termination of Registration under Section 12(g) of the Securities Exchange Act of 1934 or Suspension of Duty to File Reports under Sections 13 and 15(d) of the Securities Exchange Act of 1934) was subsequently filed on July 30, 2024, to effectuate the deregistration of Cloudium's equity securities and the suspension of its reporting obligations under the Exchange Act.

The total enterprise value of the transaction was $6,800,000,000. The debt financing package consisted of a $3,740,000,000 Term Loan B facility funded at closing and a $500,000,000 Revolving Credit Facility that remained undrawn as of the Closing Date, each arranged under a Credit Agreement dated July 9, 2024, with Meridian Atlantic Bank, N.A. as Administrative Agent and Ironclad Capital Markets LLC as Co-Arranger. In connection with the closing, $820,000,000 of existing indebtedness owed by Cloudium to Atlas Commercial Lending Corp. was repaid in full and all related security interests were terminated. An amount equal to $544,000,000 was deposited into an indemnification escrow account with Cobalt Trust Company, N.A. (the "Escrow Agent"), with the first release of escrow funds scheduled for July 9, 2025 (50% of the escrow amount, net of pending claims), and the second release and final survival period expiration scheduled for January 9, 2026.

This memorandum addresses the following principal workstreams: (a) the re-domestication of Cloudium Technologies plc from England and Wales to the State of Delaware; (b) subsidiary reorganization, including the establishment of an intermediate holding company structure and the rationalization of the existing subsidiary chain; (c) the negotiation and implementation of intercompany agreements governing the flow of services, intellectual property licenses, funding, and data among the parent entity and its subsidiaries; (d) post-closing corporate governance matters, including board and officer appointments, stockholder governance, and subsidiary governance; (e) the equity structure of the surviving entity, including rollover equity, management incentive equity, and capitalization matters; (f) financing-related integration matters, including compliance with the Credit Agreement, updates to the collateral and guarantee package, and UCC filing considerations; and (g) a recommended timeline and priority action items organized by phase.

We note at the outset that the tax implications of each restructuring step described herein are significant and multifaceted. We recommend that all tax-sensitive matters be coordinated with Leonard Cross of C&H's tax practice and with the Glenmore Thornton LLP advisory team, specifically Richard Okamura (Transaction Tax) and Vanessa Liu (Financial Due Diligence). A separate Tax Memorandum — Post-Closing Integration Tax Considerations was prepared by Leonard Cross and circulated on July 12, 2024, and this memorandum cross-references that analysis where appropriate.

II. Current Post-Closing Corporate Structure

A. Organizational Chart Description

The post-closing organizational structure of the Cloudium group, as it exists immediately following the closing of the Merger, is described below. A graphical organizational chart is attached as Appendix A to this memorandum.

Sponsor Platform. Solara Digital Infrastructure LP, a Delaware limited partnership, serves as the sponsor platform and investment management firm. The general partner of Solara Digital Infrastructure LP is Solara Digital GP LLC, a Delaware limited liability company. Marcus Elliston and Priya Narasimhan serve as the managing partners of the Solara platform. As of the date of this memorandum, Solara manages approximately $38 billion in assets under management across six flagship infrastructure-focused private equity funds, with a particular emphasis on digital infrastructure, data center, cloud computing, and enterprise software investments.

Investing Fund. Solara Digital Infrastructure Fund VI LP ("Fund VI") is a Delaware limited partnership with a 2022 vintage and $12.4 billion in committed capital. Fund VI serves as the primary investing vehicle for the Cloudium acquisition. The general partner of Fund VI is Solara Fund VI GP LLC, a Delaware limited liability company, which exercises investment discretion and management authority over Fund VI's portfolio.

Co-Investment Vehicle. Solara Digital Co-Invest VI-A LP ("Co-Invest VI-A") is a Delaware limited partnership formed to facilitate co-investment alongside Fund VI in the Cloudium transaction. The general partner of Co-Invest VI-A is Solara Fund VI GP LLC, the same entity that serves as the general partner of Fund VI. Co-Invest VI-A contributed $425,000,000 to the equity capitalization of the transaction as part of the total equity contribution by the Solara-affiliated investors.

Rollover Equity Holders. Two pre-closing equity holders of Cloudium elected to roll a portion of their equity into the post-closing surviving entity pursuant to Rollover Agreements executed concurrently with the Merger Agreement on January 22, 2024. Jonathan Hargrove, the former Chief Executive Officer of Cloudium and a continuing member of management post-closing, rolled approximately $142,814,544 of equity value (representing 50% of his 7,736,400 shares of Cloudium common stock at the per-share merger consideration of $36.92). Pinnacle Growth Ventures LLC, a growth equity fund controlled by Evelyn Carmichael (Managing Member), rolled approximately $473,241,408 of equity value (representing 60% of its 21,367,200 shares at the same per-share price). Hargrove and Pinnacle collectively hold minority equity interests in the surviving entity alongside Fund VI and Co-Invest VI-A.

Surviving Corporation. Cloudium Technologies plc is the surviving corporation following the reverse triangular merger. Cloudium remains incorporated as a public limited company under the laws of England and Wales, with company number 09734521 at Companies House. Its registered office is located at 45 Broadwick Street, London W1F 0DB, United Kingdom. Cloudium's principal US headquarters are located at 600 Townsend Street, Suite 800, San Francisco, California 94103. The Company's US Employer Identification Number (EIN) is 83-2196754.

First-Tier Subsidiaries. Cloudium Technologies plc directly owns three operating subsidiaries:

(i) Cloudium Technologies UK Ltd. — a private limited company incorporated under the laws of England and Wales (company no. 11287456), with its registered office at 45 Broadwick Street, London W1F 0DB. Cloudium Technologies UK Ltd. employs approximately 1,200 employees across offices in London and Manchester and generated revenue of £312,000,000 (approximately $390,000,000 at an exchange rate of $1.25 per British pound) for the fiscal year ended September 30, 2023. The UK subsidiary serves as the principal operating entity for Cloudium's European customer base and houses a portion of the Company's engineering and product development teams.

(ii) Cloudium Technologies India Pvt. Ltd. — a private limited company organized under the laws of India, with its principal office in Bangalore, Karnataka. The India subsidiary employs approximately 2,400 personnel, the substantial majority of whom are engaged in research and development, software engineering, quality assurance, and customer support functions. The India subsidiary serves as the Company's primary offshore development center and is critical to the Company's cost structure and product innovation capabilities.

(iii) Cloudium Solutions GmbH — a limited liability company (Gesellschaft mit beschränkter Haftung) organized under the laws of Germany, with its principal office in Berlin. Cloudium Solutions GmbH employs approximately 400 personnel focused on sales, customer success, and professional services for the DACH (Germany, Austria, and Switzerland) market.

Total Global Headcount. As of the Closing Date, Cloudium and its subsidiaries employ approximately 6,800 individuals worldwide across the United States, the United Kingdom, India, and Germany.

Business Description. Cloudium is a provider of cloud-native enterprise resource planning (ERP), customer relationship management (CRM), and business-intelligence software-as-a-service (SaaS) solutions. The Company's platform serves mid-market and large enterprise customers across a range of industries, including financial services, healthcare, manufacturing, and technology.

Key Financial Metrics. For the last twelve months ("LTM") ended as of the Closing Date, Cloudium generated approximately $1,620,000,000 in revenue and approximately $405,000,000 in EBITDA (as adjusted for certain non-recurring and transaction-related items). The Company's annual recurring revenue ("ARR") as of December 31, 2023, was approximately $1,740,000,000, reflecting strong subscription-based revenue momentum and a net revenue retention rate in excess of 115%.

B. Post-Merger Debt Structure

The acquisition was financed in part through a senior secured credit facility established pursuant to a Credit Agreement dated as of July 9, 2024 (the "Credit Agreement"), among Cloudium Technologies plc, as Borrower, Meridian Atlantic Bank, N.A. ("Meridian Atlantic"), as Administrative Agent and Collateral Agent, Ironclad Capital Markets LLC ("Ironclad"), as Co-Arranger, and the several lenders party thereto from time to time. The principal terms of the Credit Agreement are summarized below.

Term Loan B Facility. The Credit Agreement provides for a term loan facility in an aggregate principal amount of $3,740,000,000 (the "Term Loan B" or "TLB"), which was fully funded on the Closing Date. The Term Loan B bears interest at a rate equal to the Secured Overnight Financing Rate ("SOFR") plus a margin of 325 basis points per annum. The Term Loan B has a maturity date of July 9, 2031, and is subject to customary amortization of 1% per annum (payable quarterly at 0.25% of the original principal amount) with the remaining balance due at maturity.

Revolving Credit Facility. The Credit Agreement also provides for a revolving credit facility in an aggregate commitment amount of $500,000,000 (the "Revolving Facility" or "RCF"), which was undrawn as of the Closing Date. The Revolving Facility bears interest at SOFR plus a margin of 275 basis points per annum on drawn amounts and is subject to a commitment fee of 0.375% per annum on the undrawn portion of the commitments. The Revolving Facility matures on July 9, 2029. Importantly, the Revolving Facility is subject to a springing financial covenant that becomes operative when the aggregate revolving credit utilization exceeds 40% of total revolving commitments (i.e., $200,000,000); when triggered, the Borrower must maintain a First Lien Net Leverage Ratio not exceeding 5.00:1.00, tested as of the last day of each fiscal quarter.

Total Net Leverage Covenant. The Credit Agreement includes a maintenance covenant requiring the Borrower to maintain a Total Net Leverage Ratio not exceeding 6.50:1.00, which is subject to step-downs over a three-year period to 5.00:1.00. This covenant is tested quarterly as of the last day of each fiscal quarter.

Guarantee and Collateral. The obligations under the Credit Agreement are supported by a Guarantee and Collateral Agreement dated as of July 9, 2024 (the "Guarantee and Collateral Agreement"), pursuant to which certain of Cloudium's domestic subsidiaries and material foreign subsidiaries have guaranteed the Borrower's obligations and pledged substantially all of their assets, including equity interests in Cloudium's subsidiaries, to secure the obligations under the Credit Agreement. An Intercreditor Agreement dated as of July 9, 2024, governs the relative priorities of the liens securing the various facilities.

Lenders' Counsel. Winthrop & Hale LLP, led by Christine Novak, serves as counsel to Meridian Atlantic in its capacity as Administrative Agent and to the syndicate of lenders. The primary business contact at Meridian Atlantic is Graham Whitaker, Managing Director, Leveraged Finance.

Integration Note. Any restructuring steps contemplated in this memorandum, including the re-domestication of Cloudium Technologies plc, the formation of intermediate holding companies, the execution of intercompany agreements, and the reorganization of subsidiary ownership chains, must be carefully evaluated for compliance with the covenants, conditions, and restrictive provisions of the Credit Agreement. In particular, the Credit Agreement contains restrictions on mergers, consolidations, and other fundamental changes, asset dispositions, investments (including intercompany investments), restricted payments, and the incurrence of additional indebtedness. Coordination with Winthrop & Hale LLP and Meridian Atlantic will be required at each stage of the restructuring process.

III. Re-Domestication: Conversion of Cloudium Technologies plc to Cloudium Inc.

A. Rationale

Cloudium Technologies plc is currently incorporated as a public limited company under the laws of England and Wales. Following the successful completion of the going-private transaction and the delisting of Cloudium's common stock from the Nasdaq Global Select Market, there is no longer a commercial or regulatory justification for maintaining the plc corporate form. The plc designation is associated with publicly traded entities in the United Kingdom and carries with it a range of statutory obligations and governance requirements that are unnecessary — and in many respects burdensome — for a privately held, PE-owned portfolio company.

Specifically, maintaining the UK plc structure imposes the following ongoing obligations and costs: (i) Companies House filing requirements, including the annual confirmation statement, filings of accounts, and notifications of changes to directors, officers, and persons with significant control; (ii) statutory audit requirements under Part 16 of the Companies Act 2006, which mandate an independent audit of the plc's financial statements by an auditor registered with a recognized supervisory body in the United Kingdom (currently Harwell & Dobson LLP, engagement partner Martin Chisholm); (iii) compliance with the UK Corporate Governance Code and related governance requirements applicable to public companies, including requirements related to board composition, committee structures, and executive remuneration disclosures; and (iv) ongoing maintenance of a registered office in England and Wales, a company secretary (if required), and compliance with the plc minimum share capital requirements under the Companies Act.

Re-domestication of Cloudium to the State of Delaware will achieve several strategic objectives. First, it will simplify the corporate governance framework by subjecting the surviving entity to the Delaware General Corporation Law ("DGCL"), which is widely regarded as the most flexible and well-developed body of corporate law in the United States and is the preferred jurisdiction for private equity-backed portfolio companies. Second, re-domestication will align Cloudium's corporate domicile with the existing Solara organizational structure: Fund VI, Solara Fund VI GP LLC, Co-Invest VI-A, and the Solara platform entities are all Delaware entities. Third, re-domestication will enable the use of simplified merger mechanics under the DGCL for future add-on acquisitions, which is a core element of Solara's value-creation strategy for the Cloudium platform. Fourth, re-domestication will reduce ongoing UK compliance costs, including statutory audit fees, Companies House filing fees, and the administrative burden associated with dual-jurisdiction governance.

For all of the foregoing reasons, we recommend that the re-domestication of Cloudium from a UK plc to a Delaware corporation be pursued as a priority post-closing workstream.

B. Proposed Mechanics

The re-domestication of Cloudium Technologies plc from England and Wales to Delaware involves a multi-step process that requires coordination between US and UK legal requirements. We have identified the following potential path, subject to further analysis by Albright & Kerr LLP (Fiona McAllister, lead partner) on the English law components and by this firm on the Delaware law aspects.

Step 1 — UK Deregistration / Cross-Border Conversion. As a threshold matter, we will evaluate the available mechanisms under the Companies Act 2006 for effectuating the departure of Cloudium Technologies plc from the UK corporate registry. There are several potential approaches:

(a) Re-registration as a Private Company. The Companies Act 2006 (Part 7) permits a public limited company to re-register as a private company limited by shares. This would be accomplished by special resolution of the shareholders (here, Fund VI as sole stockholder) and filing of an application for re-registration with Companies House. Re-registration as a private limited company would eliminate the plc-specific requirements (including minimum share capital and certain governance obligations) and serve as a preliminary step toward the cross-border conversion.

(b) Cross-Border Conversion / Continuation. Depending on the status of the UK's implementation of the EU Cross-Border Mergers Directive (Directive 2005/56/EC, as amended by Directive 2019/2121/EU) and applicable post-Brexit UK legislation, a direct cross-border conversion or continuation of Cloudium Technologies plc into a Delaware corporation may be available. We note that the UK's departure from the European Union has introduced uncertainty regarding the availability of certain cross-border corporate restructuring mechanisms previously available under EU law, and this question requires careful analysis by Albright & Kerr.

(c) Alternative Structures. If a direct cross-border conversion is not available or practical under current UK law, an alternative approach would involve: (i) re-registration of the plc as a UK private limited company; (ii) formation of a new Delaware corporation ("Cloudium Inc."); (iii) a merger or scheme of arrangement pursuant to which Cloudium Technologies Ltd. (the re-registered entity) merges with and into Cloudium Inc., with Cloudium Inc. surviving; and (iv) dissolution or striking-off of the UK entity following completion of the merger and transfer of all assets and liabilities.

Step 2 — Formation of New Delaware Holding Entity. A new Delaware corporation, to be named "Cloudium Inc." (or such other name as may be determined by the parties), will be formed by filing a Certificate of Incorporation with the Delaware Secretary of State. Alternatively, if the DGCL Section 388 domestication procedure is available and advisable (Section 388 permits the domestication of a non-United States entity as a corporation organized under Delaware law), the conversion may be effectuated as a single-step domestication without the need for a separate formation and merger. The Certificate of Incorporation and Bylaws of the surviving corporation adopted on the Closing Date (July 9, 2024) would be superseded by the organizational documents of Cloudium Inc.

Step 3 — Merger or Conversion. The operative transaction would be effected as either: (a) a cross-border merger of Cloudium Technologies plc (or Cloudium Technologies Ltd., if re-registered) into Cloudium Inc. under Delaware law (DGCL Section 252 for mergers with foreign corporations, or Section 256 for mergers with joint-stock associations), in each case together with any applicable UK law provisions governing the merger of a UK company with a foreign entity; or (b) a domestication of Cloudium Technologies plc under DGCL Section 388, if legally and practically available. In either case, Cloudium Inc. would be the surviving entity and would succeed to all of the assets, liabilities, rights, and obligations of Cloudium Technologies plc by operation of law.

Step 4 — Assumption of Obligations. Upon the effectiveness of the re-domestication, Cloudium Inc. would assume all obligations of Cloudium Technologies plc, including without limitation: (i) all obligations under the Credit Agreement, the Guarantee and Collateral Agreement, and the Intercreditor Agreement, which assumption will require the prior written consent of Meridian Atlantic Bank, N.A. as Administrative Agent (and potentially the requisite lender vote under the Credit Agreement's amendment provisions) — coordination with Graham Whitaker at Meridian Atlantic and Christine Novak at Winthrop & Hale LLP will be required; (ii) all rollover equity obligations, including the equity interests held by Hargrove and Pinnacle, which will transfer or be assumed by operation of law or pursuant to the terms of the applicable Rollover Agreements; (iii) all intercompany notes and obligations existing between Cloudium Technologies plc and its subsidiaries; and (iv) all contractual obligations under material commercial agreements, vendor contracts, customer agreements, and other arrangements to which Cloudium Technologies plc is a party.

We have engaged Albright & Kerr LLP (Fiona McAllister, lead partner) to provide English law advice on the UK-side steps of the re-domestication, including the re-registration, cross-border conversion mechanics, Companies House filings, and any English court approvals that may be required. The tax implications of the re-domestication will be analyzed in coordination with Leonard Cross of C&H and the Glenmore Thornton LLP team (Richard Okamura, Transaction Tax; Vanessa Liu, Financial Due Diligence), as described in further detail in Section III.C below.

C. Key Tax Considerations

The re-domestication of Cloudium Technologies plc from England and Wales to the State of Delaware raises significant tax considerations in both jurisdictions. While a comprehensive tax analysis is being prepared by Leonard Cross in coordination with Glenmore Thornton LLP, we highlight the following key issues for purposes of this integration memorandum.

UK Tax Implications. The migration of Cloudium Technologies plc's corporate domicile and tax residence from the United Kingdom to the United States may trigger a UK exit charge. Under UK tax law, a company that ceases to be resident in the United Kingdom for tax purposes is generally deemed to have disposed of all of its assets at market value immediately before the cessation of UK residence, potentially giving rise to chargeable gains subject to UK corporation tax. The exposure will depend on whether Cloudium Technologies plc holds assets with unrealized gains and the extent to which those gains are attributable to the UK. In addition, stamp duty or stamp duty reserve tax implications may arise in connection with any share or asset transfers executed as part of the re-domestication. These matters are under review by Leonard Cross and Richard Okamura, with input from Albright & Kerr on the UK statutory framework.

US Tax Implications. From a US federal income tax perspective, the re-domestication must be evaluated to determine whether it qualifies as a tax-free reorganization under Section 368 of the Internal Revenue Code of 1986, as amended (the "Code"), or whether it triggers a deemed disposition of Cloudium Technologies plc's assets for US tax purposes. Section 367 of the Code imposes specific requirements on cross-border reorganizations and may treat certain transfers of assets from a foreign corporation to a domestic corporation as taxable events unless specific exceptions apply. The analysis will also consider the potential application of the anti-inversion rules under Section 7874 of the Code, although we note that the direction of the re-domestication (inbound to the United States) generally favors favorable treatment. Coordination between Leonard Cross and Richard Okamura is ongoing, and we expect preliminary conclusions within three to four weeks.

Transfer Pricing Implications. Any restructuring of intellectual property ownership or intercompany arrangements undertaken in connection with or as a result of the re-domestication must comply with applicable transfer pricing rules, including the OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations, the US transfer pricing rules under Section 482 of the Code and the Treasury Regulations thereunder, and the UK/US income tax treaty provisions. These considerations are addressed in further detail in Sections IV.F and V of this memorandum.

Cross-Reference. We cross-reference the Tax Memorandum — Post-Closing Integration Tax Considerations dated July 12, 2024, prepared by Leonard Cross, which provides a more detailed analysis of the tax considerations arising from the re-domestication and related restructuring steps.

D. Credit Agreement Considerations

The re-domestication of the Borrower is a matter of significant concern under the Credit Agreement and will require careful coordination with Meridian Atlantic and the lender group.

The Credit Agreement contains a covenant restricting fundamental changes, including mergers, consolidations, and similar transactions involving the Borrower. The re-domestication — whether structured as a cross-border merger, a domestication, or a series of transactions resulting in a change in the Borrower's jurisdiction of incorporation — will likely fall within the scope of this restrictive covenant and require the prior written consent of the Administrative Agent and, depending on the specific provision, the Required Lenders (typically defined as lenders holding more than 50% of the aggregate outstanding commitments and loans).

In addition, we must evaluate whether the re-domestication constitutes a "Change of Control" as defined in the Credit Agreement. A Change of Control event would trigger a mandatory prepayment obligation under the Credit Agreement, requiring the Borrower to offer to prepay all outstanding term loans at par (plus accrued interest). While the re-domestication does not involve any change in the ultimate ownership or control of the Borrower (Fund VI will remain the sole stockholder of Cloudium Inc., just as it is currently the sole stockholder of Cloudium Technologies plc), the technical definition of "Change of Control" in the Credit Agreement may be triggered by a change in the identity or jurisdiction of incorporation of the Borrower entity. We are reviewing the precise language of the Change of Control definition and will provide a supplemental analysis.

To mitigate these risks, we recommend obtaining written confirmation from Meridian Atlantic Bank, N.A., in its capacity as Administrative Agent, that the proposed re-domestication transaction constitutes a permitted transaction under the Credit Agreement, or, if necessary, obtaining an amendment or waiver from the Required Lenders authorizing the re-domestication. This process should be initiated promptly, as lender consent timelines can be unpredictable and may require several weeks to complete.

Finally, the collateral and guarantee structure documented in the Guarantee and Collateral Agreement references Cloudium Technologies plc as the Borrower. Following the re-domestication, it will be necessary to execute a supplement or amendment to the Guarantee and Collateral Agreement to substitute Cloudium Inc. as the Borrower and to update all references throughout the collateral documentation. Similarly, UCC financing statements and other lien perfection filings will need to be updated to reflect the new debtor name, as discussed in further detail in Section VIII.C of this memorandum.

E. Contractual Considerations

Beyond the Credit Agreement, the re-domestication may trigger consent, notification, or review requirements under Cloudium's material commercial contracts, technology licenses, and other agreements. We recommend a comprehensive review of all such agreements, with particular focus on the following:

Aegis Federal Solutions Inc. Master SaaS Agreement. This is Cloudium's largest single customer contract, representing approximately $84,000,000 in annual recurring revenue. A change-of-control consent was obtained from Aegis Federal Solutions Inc. in connection with the closing of the Merger. However, we must evaluate whether the re-domestication — which involves a change in the Borrower's jurisdiction of incorporation and, potentially, a change in the legal identity of the contracting party — triggers a separate consent or notification requirement under the Master SaaS Agreement. Given the significance of this customer relationship, we recommend proactive engagement with Aegis to confirm that the re-domestication does not give rise to any contractual concerns. In addition, if Cloudium holds any FedRAMP authorization or is in the process of obtaining such authorization, the change in jurisdiction of incorporation must be evaluated for its impact on any applicable government security requirements.

Helix Data Systems GmbH Technology License Agreement. Cloudium is party to a Technology License Agreement with Helix Data Systems GmbH, pursuant to which Cloudium licenses certain data analytics technologies that are integrated into its SaaS platform. A change-of-control consent was obtained from Helix in connection with the Merger. We must evaluate whether the scope of that consent extends to the re-domestication, or whether a separate consent or notification is required. The Technology License Agreement should be reviewed for any provisions addressing changes in the licensee's jurisdiction of incorporation, corporate form, or legal identity.

Other Material Contracts. All other material customer contracts, vendor agreements, partnership arrangements, and government authorizations should be reviewed for jurisdiction-of-incorporation triggers, assignment provisions, and change-of-party clauses. We will work with Nadia Chowdhury, General Counsel of Cloudium, to identify and catalog these agreements and to coordinate any required consents or notifications. A summary of the current consent status for key contracts is set forth in Appendix D (Key Contract Consent Status Matrix).

F. Recommended Timeline

Subject to regulatory and lender consent timelines, we target completion of the re-domestication within 90 to 120 days following the Closing Date — i.e., by approximately October to November 2024. The key milestones are as follows:

• Preliminary English Law Analysis (Weeks 1–3): Engagement of Albright & Kerr LLP to analyze the available mechanisms for the UK-side steps of the re-domestication, including re-registration of the plc as a private company, cross-border conversion mechanics, and Companies House filing requirements.

• Delaware Formation and Filings (Weeks 2–3, concurrent): Formation of Cloudium Inc. as a new Delaware corporation (or preparation of domestication filings under DGCL Section 388, as applicable); preparation of the Certificate of Incorporation and Bylaws for the new entity.

• Lender Consent Process (Weeks 2–8, concurrent): Initiation of discussions with Meridian Atlantic Bank, N.A. (Graham Whitaker) and Winthrop & Hale LLP (Christine Novak) regarding lender consent for the re-domestication; preparation and submission of formal consent request; negotiation of any required amendments or waivers.

• Tax Analysis and Structuring (Weeks 1–6, concurrent): Completion of tax analysis by Leonard Cross and Glenmore Thornton LLP regarding UK exit charge exposure, US inbound reorganization treatment, and optimal structuring of the re-domestication; finalization of tax elections and filings.

• Execution of Conversion/Merger Documents (Weeks 7–10): Following receipt of all necessary approvals and consents, preparation and execution of the definitive conversion or merger documents; filing with the Delaware Secretary of State and Companies House; closing of the re-domestication.

• Post-Completion Filings and Updates (Weeks 10–14): Update of all corporate records, bank accounts, tax registrations, regulatory filings, and contractual references to reflect the new Cloudium Inc. entity; update of UCC filings and collateral documents.

We emphasize that this timeline is subject to the pace of lender consent and English law regulatory approvals, which may extend the overall process. We will provide regular updates to the Solara deal team as the workstream progresses.

IV. Subsidiary Reorganization

A. Overview and Objectives

In addition to the re-domestication of the parent entity, we recommend a rationalization of the subsidiary structure of the Cloudium group in order to achieve tax efficiency, operational simplicity, and alignment with Solara's standard portfolio-company holding structure. Solara has historically organized its portfolio companies through a tiered holding company structure that separates operating activities from intellectual property ownership and treasury functions, and we believe that a similar approach is appropriate for Cloudium.

As described in Section II.A, Cloudium currently has three direct operating subsidiaries: Cloudium Technologies UK Ltd. (United Kingdom), Cloudium Technologies India Pvt. Ltd. (India), and Cloudium Solutions GmbH (Germany). These subsidiaries are held directly by Cloudium Technologies plc (and, following the re-domestication, will be held directly by Cloudium Inc.). The current structure is flat and does not incorporate any intermediate holding entities.

The principal objectives of the subsidiary reorganization are as follows:

(i) Establish Intermediate Holding Company Structure. The insertion of one or more intermediate holding companies between the re-domesticated US parent (Cloudium Inc.) and the operating subsidiaries will create additional flexibility for future acquisitions, dispositions, and refinancings, and will facilitate the optimization of intercompany royalty and service-fee flows for transfer pricing purposes.

(ii) Consolidate US Operations. Following the re-domestication, all US-based operations of the Cloudium group should be consolidated under Cloudium Inc. as the Delaware parent entity, with appropriate internal allocations of revenue, costs, and personnel.

(iii) Optimize Intercompany Flows. The establishment of a purpose-designed holding and IP structure will enable the Cloudium group to optimize the flow of royalties, management fees, and service charges among the parent and subsidiaries, in compliance with applicable transfer pricing rules and tax treaty provisions.

B. Proposed Intermediate Holding Company

We recommend the formation of an intermediate holding company to be interposed between Cloudium Inc. (the re-domesticated US parent) and one or more of the European operating subsidiaries. The proposed entity, provisionally designated as "Cloudium Holdings Ltd." (or a similar name to be determined), would be incorporated as a UK private limited company and would serve as the direct holding company for Cloudium Technologies UK Ltd. and, potentially, Cloudium Solutions GmbH.

The formation of a UK intermediate holding company is consistent with the existing operational footprint of the Cloudium group in the United Kingdom and leverages the UK's extensive network of double taxation treaties, its participation exemption for qualifying dividends received from subsidiaries, and its substantial shareholding exemption for gains on disposals of qualifying shareholdings.

As an alternative, we note that an Irish or Luxembourg intermediate holding company may offer certain advantages for IP-holding purposes, including favorable effective tax rates on royalty income, access to the EU Interest and Royalties Directive (for intra-EU payments), and established holding company regimes. However, these structures must be carefully evaluated in light of the OECD Base Erosion and Profit Shifting ("BEPS") framework, the EU Anti-Tax Avoidance Directives, and the applicable Controlled Foreign Corporation ("CFC") rules under US tax law (Subpart F and GILTI). We recommend that Leonard Cross and Richard Okamura conduct a comparative analysis of these options as part of the broader transfer pricing and tax structuring workstream.

The transfer of Cloudium Technologies UK Ltd. shares and Cloudium Solutions GmbH shares into the intermediate holding company would be accomplished through intra-group share transfers. The tax implications of these transfers — including UK stamp duty, German real estate transfer tax (if applicable to the GmbH's assets), and any capital gains exposure — must be analyzed in each relevant jurisdiction.

C. India Subsidiary Considerations

Cloudium Technologies India Pvt. Ltd. is a strategically important subsidiary, employing approximately 2,400 individuals in Bangalore, Karnataka, who perform critical research and development, software engineering, quality assurance, and customer support functions. The India subsidiary represents a significant portion of the Company's global workforce and is central to its product development and cost-efficiency strategy.

We must evaluate whether the India subsidiary should be maintained as a direct subsidiary of Cloudium Inc. (following the re-domestication) or whether an intermediate holding entity should be inserted between the US parent and the India subsidiary. An intermediate holding entity could offer certain tax planning benefits, depending on the applicable treaty network and withholding tax rates on dividends, royalties, and service fees paid from India.

From a regulatory perspective, the India subsidiary reorganization must be evaluated under India's foreign direct investment ("FDI") regulations administered by the Reserve Bank of India ("RBI") under the Foreign Exchange Management Act, 1999 ("FEMA"). As noted in the C&H Memorandum dated December 10, 2023, no FDI approval was required for the downstream change in control resulting from the Merger. However, we must confirm that any subsequent subsidiary reorganization — such as the interposition of an intermediate holding entity or the transfer of the India subsidiary's shares — does not require additional FEMA or RBI approvals.

Indian tax implications are also a significant consideration. The transfer of shares in an Indian company by a non-resident transferor to another non-resident transferee is generally subject to Indian capital gains tax under Section 9 of the Income Tax Act, 1961, read with the "indirect transfer" provisions introduced by the Finance Act, 2012. The applicability of the India-US or India-UK double taxation avoidance agreement must be evaluated to determine whether any treaty relief is available. We will coordinate this analysis with Leonard Cross and Richard Okamura.

With respect to competition law, no filing was required with the Competition Commission of India ("CCI") in connection with the Merger based on the India subsidiary's turnover (per the prior analysis conducted during the pre-closing regulatory workstream). We will confirm that the subsidiary reorganization does not alter this conclusion.

D. Germany Subsidiary Considerations

Cloudium Solutions GmbH is a German limited liability company with approximately 400 employees in Berlin, focused on sales, customer success, and professional services for the DACH market. The Germany subsidiary reorganization involves considerations across multiple regulatory and legal disciplines.

Foreign Investment Screening. Germany's foreign direct investment screening regime under the Foreign Trade and Payments Ordinance (Außenwirtschaftsverordnung, or "AWV") was evaluated in connection with the Merger. As noted in the C&H Memorandum dated December 8, 2023, no notification obligation was identified. We will confirm that the subsidiary reorganization — including any change in the direct shareholder of Cloudium Solutions GmbH resulting from the interposition of an intermediate holding company — does not trigger a new notification or approval requirement under the AWV.

Tax Implications. The transfer of Cloudium Solutions GmbH shares from Cloudium Inc. (or Cloudium Technologies plc, if the transfer occurs prior to re-domestication) to an intermediate holding company will have German corporate tax and trade tax implications that must be evaluated. Germany generally taxes gains on the disposal of shares in a GmbH, although certain participation exemption provisions may be available. In addition, real estate transfer tax (Grunderwerbsteuer) may be triggered if Cloudium Solutions GmbH holds German real property, depending on the percentage of shares transferred and applicable exemptions.

Employment Law. German employment law requires that works councils (Betriebsräte), if established, be informed and consulted in connection with organizational changes that may affect employees. We must determine whether a works council exists at Cloudium Solutions GmbH and, if so, the scope of any information and consultation obligations arising from the subsidiary reorganization. Even in the absence of a formal works council, German law may impose certain notification obligations in connection with changes to the corporate structure of an employer entity.

E. UK Subsidiary Considerations

Cloudium Technologies UK Ltd. is the largest of Cloudium's subsidiaries by revenue, generating £312,000,000 (approximately $390,000,000) for the fiscal year ended September 30, 2023, and employing approximately 1,200 individuals across London and Manchester. The subsidiary reorganization raises several UK-specific legal considerations.

TUPE (Transfer of Undertakings — Protection of Employment). As noted in the Issue-Specific Diligence Memo dated January 10, 2024, the Transfer of Undertakings (Protection of Employment) Regulations 2006 ("TUPE") apply to transfers of undertakings — that is, transfers of a business or part of a business as a going concern from one employer to another. Internal corporate reorganizations that involve only a change in the ownership of shares in the employing entity (without any transfer of the business itself to a new employer) should not trigger TUPE. However, if the subsidiary reorganization involves any restructuring of business functions, personnel assignments, or service lines among group entities, TUPE may be implicated. Additionally, employee information and consultation obligations under TUPE may arise even in the absence of a relevant transfer, if the reorganization involves measures that affect employees (such as changes to terms and conditions of employment or organizational reporting structures).

Collective Consultation. If the organizational restructuring results in the redundancy of 20 or more employees at a single establishment within a 90-day period, the UK employer is required to undertake collective consultation with appropriate employee representatives under Section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992. While we do not currently anticipate any redundancies in connection with the subsidiary reorganization, this obligation should be monitored as plans develop.

Companies House Filings. Changes to the corporate structure of Cloudium Technologies UK Ltd. will require filings with Companies House, including updates to the company's register of members (reflecting any change in the identity of its shareholder), updated particulars of directors, and updated confirmation statements (the annual return equivalent). If Cloudium Technologies UK Ltd. is transferred into an intermediate holding company, the change in shareholder must be reflected in the register of members and the PSC register.

F. Tax-Efficient IP Structure

The intellectual property portfolio of the Cloudium group is a critical asset and a key driver of value. Currently, ownership of the Company's intellectual property is likely split among Cloudium Technologies plc (which holds the core SaaS platform technology, trademarks, and trade names), and the subsidiaries (which may own or co-own certain IP developed locally). Post-closing, we recommend a comprehensive evaluation of the IP ownership structure with the objective of centralizing IP ownership in an appropriate entity to optimize royalty flows, maximize the utilization of R&D tax credits, and ensure compliance with transfer pricing requirements.

The potential approaches include: (i) centralizing IP ownership in the re-domesticated US parent (Cloudium Inc.), which would allow the US entity to license IP to the subsidiaries in exchange for arm's-length royalties, generating deductible royalty expenses in the subsidiary jurisdictions and taxable royalty income in the United States (where the income may be eligible for the Foreign-Derived Intangible Income ("FDII") deduction under Section 250 of the Code); (ii) establishing an IP-holding subsidiary in a jurisdiction with a favorable IP regime (such as Ireland, Luxembourg, or the Netherlands), subject to BEPS and CFC constraints; or (iii) maintaining the existing IP ownership structure with appropriate intercompany license agreements to ensure transfer pricing compliance.

Any migration of IP to a new entity will require a formal valuation of the transferred IP at arm's-length prices, in compliance with the OECD Transfer Pricing Guidelines, the US transfer pricing regulations under Section 482 of the Code and Treasury Regulation Section 1.482, the UK Transfer of Intangible Property rules under the Taxation (International and Other Provisions) Act 2010 ("TIOPA 2010"), and the German transfer pricing rules under the Foreign Tax Act (Außensteuergesetz, "AStG"). The valuation analysis will be conducted by Glenmore Thornton LLP in coordination with Leonard Cross.

We cross-reference the Tax Memorandum — Post-Closing Integration Tax Considerations dated July 12, 2024, for a more detailed discussion of the IP structure alternatives and their respective tax implications.

G. Timeline

The subsidiary reorganization workstream should commence after the re-domestication is completed, or in parallel to the extent that certain steps are independent of the re-domestication. The key milestones are as follows:

• Intermediate Holding Company Formation: Target completion within 60 days after the re-domestication is finalized (approximately December 2024/January 2025), including entity formation, intra-group share transfers, and associated regulatory and tax filings.

• IP Migration Analysis and Planning: The transfer pricing study and IP migration analysis should be initiated within 90 to 120 days post-closing (October/November 2024), with execution of any IP transfers targeted for 6 to 12 months post-closing (January to July 2025), subject to the completion of the transfer pricing benchmark study.

• Subsidiary Governance Updates: Updates to subsidiary boards of directors, corporate registry filings, and beneficial ownership registers should be completed within the first 30 to 60 days post-closing and maintained on an ongoing basis as restructuring steps are implemented.

V. Intercompany Agreements

A. Overview

Following the closing of the Merger and the implementation of the restructuring steps described in Sections III and IV, the Cloudium group will require a comprehensive framework of intercompany agreements to govern the flow of goods, services, intellectual property licenses, and funding among the parent entity (Cloudium Inc., following re-domestication) and its operating subsidiaries. These intercompany agreements serve both an operational purpose — establishing clear terms for the provision of services, allocation of costs, and licensing of intellectual property within the group — and a critical tax-compliance purpose, as they form the documentary foundation for the group's transfer pricing positions in each relevant jurisdiction.

The intercompany agreement framework should be designed to withstand scrutiny by the tax authorities in the United States (Internal Revenue Service), the United Kingdom (His Majesty's Revenue and Customs), India (Central Board of Direct Taxes), and Germany (Bundeszentralamt für Steuern), each of which has robust transfer pricing audit programs and documentation requirements. We recommend that the intercompany agreements be finalized concurrently with the transfer pricing benchmark study being conducted by Glenmore Thornton LLP, to ensure that all pricing terms are consistent with the arm's-length standard.

B. Intercompany Loan Agreements

A portion of the equity contribution made by Fund VI into the surviving corporation at closing — totaling $2,832,888,096 in aggregate equity invested by Fund VI and Co-Invest VI-A, net of the rollover equity — may be re-characterized or restructured as intercompany debt for tax-efficiency purposes. Specifically, the re-domesticated US parent (Cloudium Inc.) may lend a portion of its available capital to one or more of its subsidiaries in the form of intercompany loans, generating interest income for the US parent and corresponding interest deductions for the subsidiary borrowers.

The structuring of intercompany debt must take into account the thin-capitalization and interest-limitation rules in each relevant jurisdiction:

(i) United States (Section 163(j)). The Tax Cuts and Jobs Act of 2017 imposed a limitation on the deductibility of business interest expense under Section 163(j) of the Code. For taxable years beginning after December 31, 2021, the deduction for business interest expense is limited to the sum of business interest income plus 30% of the taxpayer's adjusted taxable income ("ATI"), with ATI calculated without the add-back for depreciation, amortization, and depletion. This limitation applies at the US entity level and must be modeled based on projected earnings.

(ii) United Kingdom (Corporate Interest Restriction). The UK Corporate Interest Restriction ("CIR") rules, effective for periods beginning on or after April 1, 2017, limit the amount of net interest expense that a group may deduct against UK taxable profits. The basic rule limits the UK group's net interest deductions to the greater of (a) 30% of UK-taxable EBITDA or (b) the group ratio (i.e., the ratio of the worldwide group's net interest expense to worldwide group EBITDA). The CIR rules must be carefully modeled for the Cloudium UK entities.

(iii) Germany (Earnings Stripping). German tax law limits the deduction of net interest expense to 30% of EBITDA under Section 4h of the German Income Tax Act (Einkommensteuergesetz, "EStG"), subject to certain exceptions for standalone companies and groups. The interaction between the German earnings stripping rules and the proposed intercompany debt structure must be evaluated.

(iv) India (Section 94B). India's thin-capitalization rules under Section 94B of the Income Tax Act, 1961, limit the deduction of interest on debt from associated enterprises to 30% of EBITDA. Interest expense in excess of this limit may be carried forward for up to eight assessment years.

Any intercompany loans must bear interest at an arm's-length rate, determined through a benchmark analysis of comparable lending transactions, taking into account the creditworthiness of the borrower, the loan amount, the tenor, the currency, and other relevant terms. The terms of the intercompany loans must also be coordinated with the requirements of the Credit Agreement, which may restrict the incurrence of intercompany indebtedness by the Borrower and its subsidiaries or require that such indebtedness be subordinated to the senior secured obligations under the Credit Agreement.

C. IP License Agreements

Intercompany intellectual property license agreements will be required between the IP-owning entity (to be determined based on the outcome of the IP migration analysis described in Section IV.F) and each operating subsidiary that utilizes the Cloudium intellectual property in its operations. The IP license agreements will govern the terms on which each subsidiary is authorized to use, sublicense, and commercialize the licensed intellectual property within its designated territory and business scope.

The key categories of intellectual property to be covered by the license agreements include: (i) the Cloudium SaaS platform technology, including source code, object code, APIs, and related technical documentation; (ii) the "Cloudium" trademarks, trade names, logos, and associated brand assets; (iii) customer lists, customer data (subject to applicable data protection requirements), and customer relationship information; and (iv) proprietary algorithms, data analytics tools, machine learning models, and related know-how.

Royalty rates under the IP license agreements must be set at arm's-length levels, consistent with the OECD Transfer Pricing Guidelines and applicable domestic transfer pricing rules. Glenmore Thornton LLP will conduct a benchmark study to identify comparable uncontrolled transactions and establish a defensible royalty rate range for each category of licensed IP.

D. Management Services / Shared Services Agreements

A management services agreement (or shared services agreement) should be executed between the parent entity (Cloudium Inc.) and each subsidiary, governing the provision of corporate support functions from the parent to the subsidiaries. These functions typically include finance and accounting, legal and compliance, human resources, information technology, corporate strategy, and investor relations.

The pricing methodology for management services should follow the OECD Guidelines for low-value-adding intra-group services, which generally permit a cost-plus methodology with a modest markup (typically 5% on a cost-plus basis). For higher-value services, a more detailed functional and comparability analysis may be required. The allocation keys (e.g., headcount, revenue, asset base) should be documented and applied consistently across all participating entities.

We note that the Transition Services Agreement executed on January 22, 2024 in connection with the Merger Agreement may provide interim coverage for certain intercompany service arrangements during the post-closing transition period. We recommend reviewing the scope and duration of the Transition Services Agreement to ensure continuity of services until the permanent intercompany agreements are in place.

E. Data Processing Agreements

The transfer of personal data among the Cloudium group entities across international borders triggers obligations under applicable data protection laws, most significantly the General Data Protection Regulation (Regulation (EU) 2016/679, "GDPR") and the UK General Data Protection Regulation (the UK GDPR, as retained and amended following Brexit). Intercompany data processing agreements ("DPAs") are required wherever one group entity processes personal data on behalf of another group entity.

For transfers of personal data from the UK and German subsidiaries to the US parent or the Indian subsidiary, the group must implement appropriate transfer mechanisms. Standard Contractual Clauses ("SCCs") adopted by the European Commission (and, for UK transfers, the UK International Data Transfer Agreement or UK Addendum to the EU SCCs) are the most commonly used mechanism for legitimizing cross-border data transfers from the EU/UK to third countries that have not received an adequacy finding. As of the date of this memorandum, the United States does not have a general adequacy finding from the UK, although the EU-US Data Privacy Framework may provide a basis for certain transfers. The status of the UK adequacy decision and the applicability of the Data Privacy Framework must be evaluated in detail by the data privacy team.

With respect to India, the Digital Personal Data Protection Act 2023 ("DPDPA") was enacted on August 11, 2023, and introduces requirements for the processing and cross-border transfer of personal data. While the implementing rules under the DPDPA have not yet been fully promulgated as of the date of this memorandum, the Cloudium group should prepare for compliance with the DPDPA's requirements regarding data localization, consent, and cross-border transfer restrictions.

F. Cost-Sharing / R&D Agreements

The India subsidiary's significant research and development activities (approximately 2,4

PRIVILEGED AND CONFIDENTIAL — ATTORNEY-CLIENT PRIVILEGE / ATTORNEY WORK PRODUCT
MEMORANDUM
TO: Marcus Elliston, Founder & Managing Partner, Solara Digital Infrastructure LP Priya Narasimhan, Co-Managing Partner & CIO, Solara Digital Infrastructure LP
CC: Harrison Wexford, Responsible Partner, Calderwood & Harkness LLP Beatrice Holloway, Billing Partner, Calderwood & Harkness LLP Leonard Cross, Specialist Partner (Tax), Calderwood & Harkness LLP
FROM: Tiffany Rosenthal, Lead Associate, Calderwood & Harkness LLP Andrew Fitzpatrick, Working Associate, Calderwood & Harkness LLP
DATE: July 15, 2024
RE: Post-Closing Corporate Restructuring and Integration — Acquisition of Cloudium Technologies plc by Solara Digital Infrastructure Fund VI LP
MATTER NO.: 1041-00003
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I. Executive Summary
The purpose of this memorandum is to outline the recommended corporate restructuring steps, subsidiary reorganization actions, intercompany agreement framework, and post-closing corporate governance matters arising from the successful closing of the acquisition of Cloudium Technologies plc ("Cloudium" or the "Company") by Solara Digital Infrastructure Fund VI LP ("Fund VI") through the reverse triangular merger with Stratos Merger Sub Inc. ("Merger Sub"). This memorandum is intended to serve as a comprehensive roadmap for the post-closing integration workstreams that fall within the purview of Calderwood & Harkness LLP ("C&H") as lead transaction counsel, and to facilitate coordination with the broader advisory team.
The Certificate of Merger was filed with the Delaware Secretary of State at 11:59 PM ET on July 9, 2024 (the "Closing Date"), thereby consummating the merger in accordance with the terms and conditions of the Agreement and Plan of Merger dated January 22, 2024, as amended (the "Merger Agreement"). Upon the effectiveness of the Merger, Merger Sub merged with and into Cloudium Technologies plc, with Cloudium surviving the merger as a wholly owned subsidiary of Fund VI. The surviving corporation retains its identity as a public limited company incorporated under the laws of England and Wales (company no. 09734521).
The current post-closing corporate structure is as follows: Cloudium Technologies plc, as the surviving corporation, is now owned by Fund VI (a Delaware limited partnership, EIN 87-4523190), with the co-investment vehicle Solara Digital Co-Invest VI-A LP ("Co-Invest VI-A") having contributed $425,000,000 as part of the aggregate equity contribution to the transaction. Fund VI and Co-Invest VI-A together constitute the principal equity investors in the surviving entity.
In addition to the institutional equity, two rollover equity participants hold equity interests in the surviving entity alongside Fund VI: (i) Jonathan Hargrove, the former Chief Executive Officer of Cloudium, who rolled approximately $142,814,544 of equity value, representing 50% of his 7,736,400 shares of Cloudium common stock at the merger consideration of $36.92 per share; and (ii) Pinnacle Growth Ventures LLC ("Pinnacle"), a growth equity fund managed by Evelyn Carmichael (Managing Member), which rolled approximately $473,241,408 of equity value, representing 60% of its 21,367,200 shares of Cloudium common stock at $36.92 per share. Together, the rollover equity participants hold minority equity interests in the surviving entity with an aggregate rollover value of approximately $616,055,952.
With respect to capital markets matters, Cloudium common stock, which previously traded on the Nasdaq Global Select Market under the ticker symbol "CLDM," was delisted effective July 10, 2024, following the filing of Form 25 (Notification of Removal from Listing and/or Registration under Section 12(b) of the Securities Exchange Act of 1934) with the Securities and Exchange Commission (the "SEC"). Form 15 (Certification and Notice of Termination of Registration under Section 12(g) of the Securities Exchange Act of 1934 or Suspension of Duty to File Reports under Sections 13 and 15(d) of the Securities Exchange Act of 1934) was subsequently filed on July 30, 2024, to effectuate the deregistration of Cloudium's equity securities and the suspension of its reporting obligations under the Exchange Act.
The total enterprise value of the transaction was $6,800,000,000. The debt financing package consisted of a $3,740,000,000 Term Loan B facility funded at closing and a $500,000,000 Revolving Credit Facility that remained undrawn as of the Closing Date, each arranged under a Credit Agreement dated July 9, 2024, with Meridian Atlantic Bank, N.A. as Administrative Agent and Ironclad Capital Markets LLC as Co-Arranger. In connection with the closing, $820,000,000 of existing indebtedness owed by Cloudium to Atlas Commercial Lending Corp. was repaid in full and all related security interests were terminated. An amount equal to $544,000,000 was deposited into an indemnification escrow account with Cobalt Trust Company, N.A. (the "Escrow Agent"), with the first release of escrow funds scheduled for July 9, 2025 (50% of the escrow amount, net of pending claims), and the second release and final survival period expiration scheduled for January 9, 2026.
This memorandum addresses the following principal workstreams: (a) the re-domestication of Cloudium Technologies plc from England and Wales to the State of Delaware; (b) subsidiary reorganization, including the establishment of an intermediate holding company structure and the rationalization of the existing subsidiary chain; (c) the negotiation and implementation of intercompany agreements governing the flow of services, intellectual property licenses, funding, and data among the parent entity and its subsidiaries; (d) post-closing corporate governance matters, including board and officer appointments, stockholder governance, and subsidiary governance; (e) the equity structure of the surviving entity, including rollover equity, management incentive equity, and capitalization matters; (f) financing-related integration matters, including compliance with the Credit Agreement, updates to the collateral and guarantee package, and UCC filing considerations; and (g) a recommended timeline and priority action items organized by phase.
We note at the outset that the tax implications of each restructuring step described herein are significant and multifaceted. We recommend that all tax-sensitive matters be coordinated with Leonard Cross of C&H's tax practice and with the Glenmore Thornton LLP advisory team, specifically Richard Okamura (Transaction Tax) and Vanessa Liu (Financial Due Diligence). A separate Tax Memorandum — Post-Closing Integration Tax Considerations was prepared by Leonard Cross and circulated on July 12, 2024, and this memorandum cross-references that analysis where appropriate.
II. Current Post-Closing Corporate Structure
A. Organizational Chart Description
The post-closing organizational structure of the Cloudium group, as it exists immediately following the closing of the Merger, is described below. A graphical organizational chart is attached as Appendix A to this memorandum.
Sponsor Platform. Solara Digital Infrastructure LP, a Delaware limited partnership, serves as the sponsor platform and investment management firm. The general partner of Solara Digital Infrastructure LP is Solara Digital GP LLC, a Delaware limited liability company. Marcus Elliston and Priya Narasimhan serve as the managing partners of the Solara platform. As of the date of this memorandum, Solara manages approximately $38 billion in assets under management across six flagship infrastructure-focused private equity funds, with a particular emphasis on digital infrastructure, data center, cloud computing, and enterprise software investments.
Investing Fund. Solara Digital Infrastructure Fund VI LP ("Fund VI") is a Delaware limited partnership with a 2022 vintage and $12.4 billion in committed capital. Fund VI serves as the primary investing vehicle for the Cloudium acquisition. The general partner of Fund VI is Solara Fund VI GP LLC, a Delaware limited liability company, which exercises investment discretion and management authority over Fund VI's portfolio.
Co-Investment Vehicle. Solara Digital Co-Invest VI-A LP ("Co-Invest VI-A") is a Delaware limited partnership formed to facilitate co-investment alongside Fund VI in the Cloudium transaction. The general partner of Co-Invest VI-A is Solara Fund VI GP LLC, the same entity that serves as the general partner of Fund VI. Co-Invest VI-A contributed $425,000,000 to the equity capitalization of the transaction as part of the total equity contribution by the Solara-affiliated investors.
Rollover Equity Holders. Two pre-closing equity holders of Cloudium elected to roll a portion of their equity into the post-closing surviving entity pursuant to Rollover Agreements executed concurrently with the Merger Agreement on January 22, 2024. Jonathan Hargrove, the former Chief Executive Officer of Cloudium and a continuing member of management post-closing, rolled approximately $142,814,544 of equity value (representing 50% of his 7,736,400 shares of Cloudium common stock at the per-share merger consideration of $36.92). Pinnacle Growth Ventures LLC, a growth equity fund controlled by Evelyn Carmichael (Managing Member), rolled approximately $473,241,408 of equity value (representing 60% of its 21,367,200 shares at the same per-share price). Hargrove and Pinnacle collectively hold minority equity interests in the surviving entity alongside Fund VI and Co-Invest VI-A.
Surviving Corporation. Cloudium Technologies plc is the surviving corporation following the reverse triangular merger. Cloudium remains incorporated as a public limited company under the laws of England and Wales, with company number 09734521 at Companies House. Its registered office is located at 45 Broadwick Street, London W1F 0DB, United Kingdom. Cloudium's principal US headquarters are located at 600 Townsend Street, Suite 800, San Francisco, California 94103. The Company's US Employer Identification Number (EIN) is 83-2196754.
First-Tier Subsidiaries. Cloudium Technologies plc directly owns three operating subsidiaries:
(i) Cloudium Technologies UK Ltd. — a private limited company incorporated under the laws of England and Wales (company no. 11287456), with its registered office at 45 Broadwick Street, London W1F 0DB. Cloudium Technologies UK Ltd. employs approximately 1,200 employees across offices in London and Manchester and generated revenue of £312,000,000 (approximately $390,000,000 at an exchange rate of $1.25 per British pound) for the fiscal year ended September 30, 2023. The UK subsidiary serves as the principal operating entity for Cloudium's European customer base and houses a portion of the Company's engineering and product development teams.
(ii) Cloudium Technologies India Pvt. Ltd. — a private limited company organized under the laws of India, with its principal office in Bangalore, Karnataka. The India subsidiary employs approximately 2,400 personnel, the substantial majority of whom are engaged in research and development, software engineering, quality assurance, and customer support functions. The India subsidiary serves as the Company's primary offshore development center and is critical to the Company's cost structure and product innovation capabilities.
(iii) Cloudium Solutions GmbH — a limited liability company (Gesellschaft mit beschränkter Haftung) organized under the laws of Germany, with its principal office in Berlin. Cloudium Solutions GmbH employs approximately 400 personnel focused on sales, customer success, and professional services for the DACH (Germany, Austria, and Switzerland) market.
Total Global Headcount. As of the Closing Date, Cloudium and its subsidiaries employ approximately 6,800 individuals worldwide across the United States, the United Kingdom, India, and Germany.
Business Description. Cloudium is a provider of cloud-native enterprise resource planning (ERP), customer relationship management (CRM), and business-intelligence software-as-a-service (SaaS) solutions. The Company's platform serves mid-market and large enterprise customers across a range of industries, including financial services, healthcare, manufacturing, and technology.
Key Financial Metrics. For the last twelve months ("LTM") ended as of the Closing Date, Cloudium generated approximately $1,620,000,000 in revenue and approximately $405,000,000 in EBITDA (as adjusted for certain non-recurring and transaction-related items). The Company's annual recurring revenue ("ARR") as of December 31, 2023, was approximately $1,740,000,000, reflecting strong subscription-based revenue momentum and a net revenue retention rate in excess of 115%.
B. Post-Merger Debt Structure
The acquisition was financed in part through a senior secured credit facility established pursuant to a Credit Agreement dated as of July 9, 2024 (the "Credit Agreement"), among Cloudium Technologies plc, as Borrower, Meridian Atlantic Bank, N.A. ("Meridian Atlantic"), as Administrative Agent and Collateral Agent, Ironclad Capital Markets LLC ("Ironclad"), as Co-Arranger, and the several lenders party thereto from time to time. The principal terms of the Credit Agreement are summarized below.
Term Loan B Facility. The Credit Agreement provides for a term loan facility in an aggregate principal amount of $3,740,000,000 (the "Term Loan B" or "TLB"), which was fully funded on the Closing Date. The Term Loan B bears interest at a rate equal to the Secured Overnight Financing Rate ("SOFR") plus a margin of 325 basis points per annum. The Term Loan B has a maturity date of July 9, 2031, and is subject to customary amortization of 1% per annum (payable quarterly at 0.25% of the original principal amount) with the remaining balance due at maturity.
Revolving Credit Facility. The Credit Agreement also provides for a revolving credit facility in an aggregate commitment amount of $500,000,000 (the "Revolving Facility" or "RCF"), which was undrawn as of the Closing Date. The Revolving Facility bears interest at SOFR plus a margin of 275 basis points per annum on drawn amounts and is subject to a commitment fee of 0.375% per annum on the undrawn portion of the commitments. The Revolving Facility matures on July 9, 2029. Importantly, the Revolving Facility is subject to a springing financial covenant that becomes operative when the aggregate revolving credit utilization exceeds 40% of total revolving commitments (i.e., $200,000,000); when triggered, the Borrower must maintain a First Lien Net Leverage Ratio not exceeding 5.00:1.00, tested as of the last day of each fiscal quarter.
Total Net Leverage Covenant. The Credit Agreement includes a maintenance covenant requiring the Borrower to maintain a Total Net Leverage Ratio not exceeding 6.50:1.00, which is subject to step-downs over a three-year period to 5.00:1.00. This covenant is tested quarterly as of the last day of each fiscal quarter.
Guarantee and Collateral. The obligations under the Credit Agreement are supported by a Guarantee and Collateral Agreement dated as of July 9, 2024 (the "Guarantee and Collateral Agreement"), pursuant to which certain of Cloudium's domestic subsidiaries and material foreign subsidiaries have guaranteed the Borrower's obligations and pledged substantially all of their assets, including equity interests in Cloudium's subsidiaries, to secure the obligations under the Credit Agreement. An Intercreditor Agreement dated as of July 9, 2024, governs the relative priorities of the liens securing the various facilities.
Lenders' Counsel. Winthrop & Hale LLP, led by Christine Novak, serves as counsel to Meridian Atlantic in its capacity as Administrative Agent and to the syndicate of lenders. The primary business contact at Meridian Atlantic is Graham Whitaker, Managing Director, Leveraged Finance.
Integration Note. Any restructuring steps contemplated in this memorandum, including the re-domestication of Cloudium Technologies plc, the formation of intermediate holding companies, the execution of intercompany agreements, and the reorganization of subsidiary ownership chains, must be carefully evaluated for compliance with the covenants, conditions, and restrictive provisions of the Credit Agreement. In particular, the Credit Agreement contains restrictions on mergers, consolidations, and other fundamental changes, asset dispositions, investments (including intercompany investments), restricted payments, and the incurrence of additional indebtedness. Coordination with Winthrop & Hale LLP and Meridian Atlantic will be required at each stage of the restructuring process.
III. Re-Domestication: Conversion of Cloudium Technologies plc to Cloudium Inc.
A. Rationale
Cloudium Technologies plc is currently incorporated as a public limited company under the laws of England and Wales. Following the successful completion of the going-private transaction and the delisting of Cloudium's common stock from the Nasdaq Global Select Market, there is no longer a commercial or regulatory justification for maintaining the plc corporate form. The plc designation is associated with publicly traded entities in the United Kingdom and carries with it a range of statutory obligations and governance requirements that are unnecessary — and in many respects burdensome — for a privately held, PE-owned portfolio company.
Specifically, maintaining the UK plc structure imposes the following ongoing obligations and costs: (i) Companies House filing requirements, including the annual confirmation statement, filings of accounts, and notifications of changes to directors, officers, and persons with significant control; (ii) statutory audit requirements under Part 16 of the Companies Act 2006, which mandate an independent audit of the plc's financial statements by an auditor registered with a recognized supervisory body in the United Kingdom (currently Harwell & Dobson LLP, engagement partner Martin Chisholm); (iii) compliance with the UK Corporate Governance Code and related governance requirements applicable to public companies, including requirements related to board composition, committee structures, and executive remuneration disclosures; and (iv) ongoing maintenance of a registered office in England and Wales, a company secretary (if required), and compliance with the plc minimum share capital requirements under the Companies Act.
Re-domestication of Cloudium to the State of Delaware will achieve several strategic objectives. First, it will simplify the corporate governance framework by subjecting the surviving entity to the Delaware General Corporation Law ("DGCL"), which is widely regarded as the most flexible and well-developed body of corporate law in the United States and is the preferred jurisdiction for private equity-backed portfolio companies. Second, re-domestication will align Cloudium's corporate domicile with the existing Solara organizational structure: Fund VI, Solara Fund VI GP LLC, Co-Invest VI-A, and the Solara platform entities are all Delaware entities. Third, re-domestication will enable the use of simplified merger mechanics under the DGCL for future add-on acquisitions, which is a core element of Solara's value-creation strategy for the Cloudium platform. Fourth, re-domestication will reduce ongoing UK compliance costs, including statutory audit fees, Companies House filing fees, and the administrative burden associated with dual-jurisdiction governance.
For all of the foregoing reasons, we recommend that the re-domestication of Cloudium from a UK plc to a Delaware corporation be pursued as a priority post-closing workstream.
B. Proposed Mechanics
The re-domestication of Cloudium Technologies plc from England and Wales to Delaware involves a multi-step process that requires coordination between US and UK legal requirements. We have identified the following potential path, subject to further analysis by Albright & Kerr LLP (Fiona McAllister, lead partner) on the English law components and by this firm on the Delaware law aspects.
Step 1 — UK Deregistration / Cross-Border Conversion. As a threshold matter, we will evaluate the available mechanisms under the Companies Act 2006 for effectuating the departure of Cloudium Technologies plc from the UK corporate registry. There are several potential approaches:
(a) Re-registration as a Private Company. The Companies Act 2006 (Part 7) permits a public limited company to re-register as a private company limited by shares. This would be accomplished by special resolution of the shareholders (here, Fund VI as sole stockholder) and filing of an application for re-registration with Companies House. Re-registration as a private limited company would eliminate the plc-specific requirements (including minimum share capital and certain governance obligations) and serve as a preliminary step toward the cross-border conversion.
(b) Cross-Border Conversion / Continuation. Depending on the status of the UK's implementation of the EU Cross-Border Mergers Directive (Directive 2005/56/EC, as amended by Directive 2019/2121/EU) and applicable post-Brexit UK legislation, a direct cross-border conversion or continuation of Cloudium Technologies plc into a Delaware corporation may be available. We note that the UK's departure from the European Union has introduced uncertainty regarding the availability of certain cross-border corporate restructuring mechanisms previously available under EU law, and this question requires careful analysis by Albright & Kerr.
(c) Alternative Structures. If a direct cross-border conversion is not available or practical under current UK law, an alternative approach would involve: (i) re-registration of the plc as a UK private limited company; (ii) formation of a new Delaware corporation ("Cloudium Inc."); (iii) a merger or scheme of arrangement pursuant to which Cloudium Technologies Ltd. (the re-registered entity) merges with and into Cloudium Inc., with Cloudium Inc. surviving; and (iv) dissolution or striking-off of the UK entity following completion of the merger and transfer of all assets and liabilities.
Step 2 — Formation of New Delaware Holding Entity. A new Delaware corporation, to be named "Cloudium Inc." (or such other name as may be determined by the parties), will be formed by filing a Certificate of Incorporation with the Delaware Secretary of State. Alternatively, if the DGCL Section 388 domestication procedure is available and advisable (Section 388 permits the domestication of a non-United States entity as a corporation organized under Delaware law), the conversion may be effectuated as a single-step domestication without the need for a separate formation and merger. The Certificate of Incorporation and Bylaws of the surviving corporation adopted on the Closing Date (July 9, 2024) would be superseded by the organizational documents of Cloudium Inc.
Step 3 — Merger or Conversion. The operative transaction would be effected as either: (a) a cross-border merger of Cloudium Technologies plc (or Cloudium Technologies Ltd., if re-registered) into Cloudium Inc. under Delaware law (DGCL Section 252 for mergers with foreign corporations, or Section 256 for mergers with joint-stock associations), in each case together with any applicable UK law provisions governing the merger of a UK company with a foreign entity; or (b) a domestication of Cloudium Technologies plc under DGCL Section 388, if legally and practically available. In either case, Cloudium Inc. would be the surviving entity and would succeed to all of the assets, liabilities, rights, and obligations of Cloudium Technologies plc by operation of law.
Step 4 — Assumption of Obligations. Upon the effectiveness of the re-domestication, Cloudium Inc. would assume all obligations of Cloudium Technologies plc, including without limitation: (i) all obligations under the Credit Agreement, the Guarantee and Collateral Agreement, and the Intercreditor Agreement, which assumption will require the prior written consent of Meridian Atlantic Bank, N.A. as Administrative Agent (and potentially the requisite lender vote under the Credit Agreement's amendment provisions) — coordination with Graham Whitaker at Meridian Atlantic and Christine Novak at Winthrop & Hale LLP will be required; (ii) all rollover equity obligations, including the equity interests held by Hargrove and Pinnacle, which will transfer or be assumed by operation of law or pursuant to the terms of the applicable Rollover Agreements; (iii) all intercompany notes and obligations existing between Cloudium Technologies plc and its subsidiaries; and (iv) all contractual obligations under material commercial agreements, vendor contracts, customer agreements, and other arrangements to which Cloudium Technologies plc is a party.
We have engaged Albright & Kerr LLP (Fiona McAllister, lead partner) to provide English law advice on the UK-side steps of the re-domestication, including the re-registration, cross-border conversion mechanics, Companies House filings, and any English court approvals that may be required. The tax implications of the re-domestication will be analyzed in coordination with Leonard Cross of C&H and the Glenmore Thornton LLP team (Richard Okamura, Transaction Tax; Vanessa Liu, Financial Due Diligence), as described in further detail in Section III.C below.
C. Key Tax Considerations
The re-domestication of Cloudium Technologies plc from England and Wales to the State of Delaware raises significant tax considerations in both jurisdictions. While a comprehensive tax analysis is being prepared by Leonard Cross in coordination with Glenmore Thornton LLP, we highlight the following key issues for purposes of this integration memorandum.
UK Tax Implications. The migration of Cloudium Technologies plc's corporate domicile and tax residence from the United Kingdom to the United States may trigger a UK exit charge. Under UK tax law, a company that ceases to be resident in the United Kingdom for tax purposes is generally deemed to have disposed of all of its assets at market value immediately before the cessation of UK residence, potentially giving rise to chargeable gains subject to UK corporation tax. The exposure will depend on whether Cloudium Technologies plc holds assets with unrealized gains and the extent to which those gains are attributable to the UK. In addition, stamp duty or stamp duty reserve tax implications may arise in connection with any share or asset transfers executed as part of the re-domestication. These matters are under review by Leonard Cross and Richard Okamura, with input from Albright & Kerr on the UK statutory framework.
US Tax Implications. From a US federal income tax perspective, the re-domestication must be evaluated to determine whether it qualifies as a tax-free reorganization under Section 368 of the Internal Revenue Code of 1986, as amended (the "Code"), or whether it triggers a deemed disposition of Cloudium Technologies plc's assets for US tax purposes. Section 367 of the Code imposes specific requirements on cross-border reorganizations and may treat certain transfers of assets from a foreign corporation to a domestic corporation as taxable events unless specific exceptions apply. The analysis will also consider the potential application of the anti-inversion rules under Section 7874 of the Code, although we note that the direction of the re-domestication (inbound to the United States) generally favors favorable treatment. Coordination between Leonard Cross and Richard Okamura is ongoing, and we expect preliminary conclusions within three to four weeks.
Transfer Pricing Implications. Any restructuring of intellectual property ownership or intercompany arrangements undertaken in connection with or as a result of the re-domestication must comply with applicable transfer pricing rules, including the OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations, the US transfer pricing rules under Section 482 of the Code and the Treasury Regulations thereunder, and the UK/US income tax treaty provisions. These considerations are addressed in further detail in Sections IV.F and V of this memorandum.
Cross-Reference. We cross-reference the Tax Memorandum — Post-Closing Integration Tax Considerations dated July 12, 2024, prepared by Leonard Cross, which provides a more detailed analysis of the tax considerations arising from the re-domestication and related restructuring steps.
D. Credit Agreement Considerations
The re-domestication of the Borrower is a matter of significant concern under the Credit Agreement and will require careful coordination with Meridian Atlantic and the lender group.
The Credit Agreement contains a covenant restricting fundamental changes, including mergers, consolidations, and similar transactions involving the Borrower. The re-domestication — whether structured as a cross-border merger, a domestication, or a series of transactions resulting in a change in the Borrower's jurisdiction of incorporation — will likely fall within the scope of this restrictive covenant and require the prior written consent of the Administrative Agent and, depending on the specific provision, the Required Lenders (typically defined as lenders holding more than 50% of the aggregate outstanding commitments and loans).
In addition, we must evaluate whether the re-domestication constitutes a "Change of Control" as defined in the Credit Agreement. A Change of Control event would trigger a mandatory prepayment obligation under the Credit Agreement, requiring the Borrower to offer to prepay all outstanding term loans at par (plus accrued interest). While the re-domestication does not involve any change in the ultimate ownership or control of the Borrower (Fund VI will remain the sole stockholder of Cloudium Inc., just as it is currently the sole stockholder of Cloudium Technologies plc), the technical definition of "Change of Control" in the Credit Agreement may be triggered by a change in the identity or jurisdiction of incorporation of the Borrower entity. We are reviewing the precise language of the Change of Control definition and will provide a supplemental analysis.
To mitigate these risks, we recommend obtaining written confirmation from Meridian Atlantic Bank, N.A., in its capacity as Administrative Agent, that the proposed re-domestication transaction constitutes a permitted transaction under the Credit Agreement, or, if necessary, obtaining an amendment or waiver from the Required Lenders authorizing the re-domestication. This process should be initiated promptly, as lender consent timelines can be unpredictable and may require several weeks to complete.
Finally, the collateral and guarantee structure documented in the Guarantee and Collateral Agreement references Cloudium Technologies plc as the Borrower. Following the re-domestication, it will be necessary to execute a supplement or amendment to the Guarantee and Collateral Agreement to substitute Cloudium Inc. as the Borrower and to update all references throughout the collateral documentation. Similarly, UCC financing statements and other lien perfection filings will need to be updated to reflect the new debtor name, as discussed in further detail in Section VIII.C of this memorandum.
E. Contractual Considerations
Beyond the Credit Agreement, the re-domestication may trigger consent, notification, or review requirements under Cloudium's material commercial contracts, technology licenses, and other agreements. We recommend a comprehensive review of all such agreements, with particular focus on the following:
Aegis Federal Solutions Inc. Master SaaS Agreement. This is Cloudium's largest single customer contract, representing approximately $84,000,000 in annual recurring revenue. A change-of-control consent was obtained from Aegis Federal Solutions Inc. in connection with the closing of the Merger. However, we must evaluate whether the re-domestication — which involves a change in the Borrower's jurisdiction of incorporation and, potentially, a change in the legal identity of the contracting party — triggers a separate consent or notification requirement under the Master SaaS Agreement. Given the significance of this customer relationship, we recommend proactive engagement with Aegis to confirm that the re-domestication does not give rise to any contractual concerns. In addition, if Cloudium holds any FedRAMP authorization or is in the process of obtaining such authorization, the change in jurisdiction of incorporation must be evaluated for its impact on any applicable government security requirements.
Helix Data Systems GmbH Technology License Agreement. Cloudium is party to a Technology License Agreement with Helix Data Systems GmbH, pursuant to which Cloudium licenses certain data analytics technologies that are integrated into its SaaS platform. A change-of-control consent was obtained from Helix in connection with the Merger. We must evaluate whether the scope of that consent extends to the re-domestication, or whether a separate consent or notification is required. The Technology License Agreement should be reviewed for any provisions addressing changes in the licensee's jurisdiction of incorporation, corporate form, or legal identity.
Other Material Contracts. All other material customer contracts, vendor agreements, partnership arrangements, and government authorizations should be reviewed for jurisdiction-of-incorporation triggers, assignment provisions, and change-of-party clauses. We will work with Nadia Chowdhury, General Counsel of Cloudium, to identify and catalog these agreements and to coordinate any required consents or notifications. A summary of the current consent status for key contracts is set forth in Appendix D (Key Contract Consent Status Matrix).
F. Recommended Timeline
Subject to regulatory and lender consent timelines, we target completion of the re-domestication within 90 to 120 days following the Closing Date — i.e., by approximately October to November 2024. The key milestones are as follows:
• Preliminary English Law Analysis (Weeks 1–3): Engagement of Albright & Kerr LLP to analyze the available mechanisms for the UK-side steps of the re-domestication, including re-registration of the plc as a private company, cross-border conversion mechanics, and Companies House filing requirements.
• Delaware Formation and Filings (Weeks 2–3, concurrent): Formation of Cloudium Inc. as a new Delaware corporation (or preparation of domestication filings under DGCL Section 388, as applicable); preparation of the Certificate of Incorporation and Bylaws for the new entity.
• Lender Consent Process (Weeks 2–8, concurrent): Initiation of discussions with Meridian Atlantic Bank, N.A. (Graham Whitaker) and Winthrop & Hale LLP (Christine Novak) regarding lender consent for the re-domestication; preparation and submission of formal consent request; negotiation of any required amendments or waivers.
• Tax Analysis and Structuring (Weeks 1–6, concurrent): Completion of tax analysis by Leonard Cross and Glenmore Thornton LLP regarding UK exit charge exposure, US inbound reorganization treatment, and optimal structuring of the re-domestication; finalization of tax elections and filings.
• Execution of Conversion/Merger Documents (Weeks 7–10): Following receipt of all necessary approvals and consents, preparation and execution of the definitive conversion or merger documents; filing with the Delaware Secretary of State and Companies House; closing of the re-domestication.
• Post-Completion Filings and Updates (Weeks 10–14): Update of all corporate records, bank accounts, tax registrations, regulatory filings, and contractual references to reflect the new Cloudium Inc. entity; update of UCC filings and collateral documents.
We emphasize that this timeline is subject to the pace of lender consent and English law regulatory approvals, which may extend the overall process. We will provide regular updates to the Solara deal team as the workstream progresses.
IV. Subsidiary Reorganization
A. Overview and Objectives
In addition to the re-domestication of the parent entity, we recommend a rationalization of the subsidiary structure of the Cloudium group in order to achieve tax efficiency, operational simplicity, and alignment with Solara's standard portfolio-company holding structure. Solara has historically organized its portfolio companies through a tiered holding company structure that separates operating activities from intellectual property ownership and treasury functions, and we believe that a similar approach is appropriate for Cloudium.
As described in Section II.A, Cloudium currently has three direct operating subsidiaries: Cloudium Technologies UK Ltd. (United Kingdom), Cloudium Technologies India Pvt. Ltd. (India), and Cloudium Solutions GmbH (Germany). These subsidiaries are held directly by Cloudium Technologies plc (and, following the re-domestication, will be held directly by Cloudium Inc.). The current structure is flat and does not incorporate any intermediate holding entities.
The principal objectives of the subsidiary reorganization are as follows:
(i) Establish Intermediate Holding Company Structure. The insertion of one or more intermediate holding companies between the re-domesticated US parent (Cloudium Inc.) and the operating subsidiaries will create additional flexibility for future acquisitions, dispositions, and refinancings, and will facilitate the optimization of intercompany royalty and service-fee flows for transfer pricing purposes.
(ii) Consolidate US Operations. Following the re-domestication, all US-based operations of the Cloudium group should be consolidated under Cloudium Inc. as the Delaware parent entity, with appropriate internal allocations of revenue, costs, and personnel.
(iii) Optimize Intercompany Flows. The establishment of a purpose-designed holding and IP structure will enable the Cloudium group to optimize the flow of royalties, management fees, and service charges among the parent and subsidiaries, in compliance with applicable transfer pricing rules and tax treaty provisions.
B. Proposed Intermediate Holding Company
We recommend the formation of an intermediate holding company to be interposed between Cloudium Inc. (the re-domesticated US parent) and one or more of the European operating subsidiaries. The proposed entity, provisionally designated as "Cloudium Holdings Ltd." (or a similar name to be determined), would be incorporated as a UK private limited company and would serve as the direct holding company for Cloudium Technologies UK Ltd. and, potentially, Cloudium Solutions GmbH.
The formation of a UK intermediate holding company is consistent with the existing operational footprint of the Cloudium group in the United Kingdom and leverages the UK's extensive network of double taxation treaties, its participation exemption for qualifying dividends received from subsidiaries, and its substantial shareholding exemption for gains on disposals of qualifying shareholdings.
As an alternative, we note that an Irish or Luxembourg intermediate holding company may offer certain advantages for IP-holding purposes, including favorable effective tax rates on royalty income, access to the EU Interest and Royalties Directive (for intra-EU payments), and established holding company regimes. However, these structures must be carefully evaluated in light of the OECD Base Erosion and Profit Shifting ("BEPS") framework, the EU Anti-Tax Avoidance Directives, and the applicable Controlled Foreign Corporation ("CFC") rules under US tax law (Subpart F and GILTI). We recommend that Leonard Cross and Richard Okamura conduct a comparative analysis of these options as part of the broader transfer pricing and tax structuring workstream.
The transfer of Cloudium Technologies UK Ltd. shares and Cloudium Solutions GmbH shares into the intermediate holding company would be accomplished through intra-group share transfers. The tax implications of these transfers — including UK stamp duty, German real estate transfer tax (if applicable to the GmbH's assets), and any capital gains exposure — must be analyzed in each relevant jurisdiction.
C. India Subsidiary Considerations
Cloudium Technologies India Pvt. Ltd. is a strategically important subsidiary, employing approximately 2,400 individuals in Bangalore, Karnataka, who perform critical research and development, software engineering, quality assurance, and customer support functions. The India subsidiary represents a significant portion of the Company's global workforce and is central to its product development and cost-efficiency strategy.
We must evaluate whether the India subsidiary should be maintained as a direct subsidiary of Cloudium Inc. (following the re-domestication) or whether an intermediate holding entity should be inserted between the US parent and the India subsidiary. An intermediate holding entity could offer certain tax planning benefits, depending on the applicable treaty network and withholding tax rates on dividends, royalties, and service fees paid from India.
From a regulatory perspective, the India subsidiary reorganization must be evaluated under India's foreign direct investment ("FDI") regulations administered by the Reserve Bank of India ("RBI") under the Foreign Exchange Management Act, 1999 ("FEMA"). As noted in the C&H Memorandum dated December 10, 2023, no FDI approval was required for the downstream change in control resulting from the Merger. However, we must confirm that any subsequent subsidiary reorganization — such as the interposition of an intermediate holding entity or the transfer of the India subsidiary's shares — does not require additional FEMA or RBI approvals.
Indian tax implications are also a significant consideration. The transfer of shares in an Indian company by a non-resident transferor to another non-resident transferee is generally subject to Indian capital gains tax under Section 9 of the Income Tax Act, 1961, read with the "indirect transfer" provisions introduced by the Finance Act, 2012. The applicability of the India-US or India-UK double taxation avoidance agreement must be evaluated to determine whether any treaty relief is available. We will coordinate this analysis with Leonard Cross and Richard Okamura.
With respect to competition law, no filing was required with the Competition Commission of India ("CCI") in connection with the Merger based on the India subsidiary's turnover (per the prior analysis conducted during the pre-closing regulatory workstream). We will confirm that the subsidiary reorganization does not alter this conclusion.
D. Germany Subsidiary Considerations
Cloudium Solutions GmbH is a German limited liability company with approximately 400 employees in Berlin, focused on sales, customer success, and professional services for the DACH market. The Germany subsidiary reorganization involves considerations across multiple regulatory and legal disciplines.
Foreign Investment Screening. Germany's foreign direct investment screening regime under the Foreign Trade and Payments Ordinance (Außenwirtschaftsverordnung, or "AWV") was evaluated in connection with the Merger. As noted in the C&H Memorandum dated December 8, 2023, no notification obligation was identified. We will confirm that the subsidiary reorganization — including any change in the direct shareholder of Cloudium Solutions GmbH resulting from the interposition of an intermediate holding company — does not trigger a new notification or approval requirement under the AWV.
Tax Implications. The transfer of Cloudium Solutions GmbH shares from Cloudium Inc. (or Cloudium Technologies plc, if the transfer occurs prior to re-domestication) to an intermediate holding company will have German corporate tax and trade tax implications that must be evaluated. Germany generally taxes gains on the disposal of shares in a GmbH, although certain participation exemption provisions may be available. In addition, real estate transfer tax (Grunderwerbsteuer) may be triggered if Cloudium Solutions GmbH holds German real property, depending on the percentage of shares transferred and applicable exemptions.
Employment Law. German employment law requires that works councils (Betriebsräte), if established, be informed and consulted in connection with organizational changes that may affect employees. We must determine whether a works council exists at Cloudium Solutions GmbH and, if so, the scope of any information and consultation obligations arising from the subsidiary reorganization. Even in the absence of a formal works council, German law may impose certain notification obligations in connection with changes to the corporate structure of an employer entity.
E. UK Subsidiary Considerations
Cloudium Technologies UK Ltd. is the largest of Cloudium's subsidiaries by revenue, generating £312,000,000 (approximately $390,000,000) for the fiscal year ended September 30, 2023, and employing approximately 1,200 individuals across London and Manchester. The subsidiary reorganization raises several UK-specific legal considerations.
TUPE (Transfer of Undertakings — Protection of Employment). As noted in the Issue-Specific Diligence Memo dated January 10, 2024, the Transfer of Undertakings (Protection of Employment) Regulations 2006 ("TUPE") apply to transfers of undertakings — that is, transfers of a business or part of a business as a going concern from one employer to another. Internal corporate reorganizations that involve only a change in the ownership of shares in the employing entity (without any transfer of the business itself to a new employer) should not trigger TUPE. However, if the subsidiary reorganization involves any restructuring of business functions, personnel assignments, or service lines among group entities, TUPE may be implicated. Additionally, employee information and consultation obligations under TUPE may arise even in the absence of a relevant transfer, if the reorganization involves measures that affect employees (such as changes to terms and conditions of employment or organizational reporting structures).
Collective Consultation. If the organizational restructuring results in the redundancy of 20 or more employees at a single establishment within a 90-day period, the UK employer is required to undertake collective consultation with appropriate employee representatives under Section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992. While we do not currently anticipate any redundancies in connection with the subsidiary reorganization, this obligation should be monitored as plans develop.
Companies House Filings. Changes to the corporate structure of Cloudium Technologies UK Ltd. will require filings with Companies House, including updates to the company's register of members (reflecting any change in the identity of its shareholder), updated particulars of directors, and updated confirmation statements (the annual return equivalent). If Cloudium Technologies UK Ltd. is transferred into an intermediate holding company, the change in shareholder must be reflected in the register of members and the PSC register.
F. Tax-Efficient IP Structure
The intellectual property portfolio of the Cloudium group is a critical asset and a key driver of value. Currently, ownership of the Company's intellectual property is likely split among Cloudium Technologies plc (which holds the core SaaS platform technology, trademarks, and trade names), and the subsidiaries (which may own or co-own certain IP developed locally). Post-closing, we recommend a comprehensive evaluation of the IP ownership structure with the objective of centralizing IP ownership in an appropriate entity to optimize royalty flows, maximize the utilization of R&D tax credits, and ensure compliance with transfer pricing requirements.
The potential approaches include: (i) centralizing IP ownership in the re-domesticated US parent (Cloudium Inc.), which would allow the US entity to license IP to the subsidiaries in exchange for arm's-length royalties, generating deductible royalty expenses in the subsidiary jurisdictions and taxable royalty income in the United States (where the income may be eligible for the Foreign-Derived Intangible Income ("FDII") deduction under Section 250 of the Code); (ii) establishing an IP-holding subsidiary in a jurisdiction with a favorable IP regime (such as Ireland, Luxembourg, or the Netherlands), subject to BEPS and CFC constraints; or (iii) maintaining the existing IP ownership structure with appropriate intercompany license agreements to ensure transfer pricing compliance.
Any migration of IP to a new entity will require a formal valuation of the transferred IP at arm's-length prices, in compliance with the OECD Transfer Pricing Guidelines, the US transfer pricing regulations under Section 482 of the Code and Treasury Regulation Section 1.482, the UK Transfer of Intangible Property rules under the Taxation (International and Other Provisions) Act 2010 ("TIOPA 2010"), and the German transfer pricing rules under the Foreign Tax Act (Außensteuergesetz, "AStG"). The valuation analysis will be conducted by Glenmore Thornton LLP in coordination with Leonard Cross.
We cross-reference the Tax Memorandum — Post-Closing Integration Tax Considerations dated July 12, 2024, for a more detailed discussion of the IP structure alternatives and their respective tax implications.
G. Timeline
The subsidiary reorganization workstream should commence after the re-domestication is completed, or in parallel to the extent that certain steps are independent of the re-domestication. The key milestones are as follows:
• Intermediate Holding Company Formation: Target completion within 60 days after the re-domestication is finalized (approximately December 2024/January 2025), including entity formation, intra-group share transfers, and associated regulatory and tax filings.
• IP Migration Analysis and Planning: The transfer pricing study and IP migration analysis should be initiated within 90 to 120 days post-closing (October/November 2024), with execution of any IP transfers targeted for 6 to 12 months post-closing (January to July 2025), subject to the completion of the transfer pricing benchmark study.
• Subsidiary Governance Updates: Updates to subsidiary boards of directors, corporate registry filings, and beneficial ownership registers should be completed within the first 30 to 60 days post-closing and maintained on an ongoing basis as restructuring steps are implemented.
V. Intercompany Agreements
A. Overview
Following the closing of the Merger and the implementation of the restructuring steps described in Sections III and IV, the Cloudium group will require a comprehensive framework of intercompany agreements to govern the flow of goods, services, intellectual property licenses, and funding among the parent entity (Cloudium Inc., following re-domestication) and its operating subsidiaries. These intercompany agreements serve both an operational purpose — establishing clear terms for the provision of services, allocation of costs, and licensing of intellectual property within the group — and a critical tax-compliance purpose, as they form the documentary foundation for the group's transfer pricing positions in each relevant jurisdiction.
The intercompany agreement framework should be designed to withstand scrutiny by the tax authorities in the United States (Internal Revenue Service), the United Kingdom (His Majesty's Revenue and Customs), India (Central Board of Direct Taxes), and Germany (Bundeszentralamt für Steuern), each of which has robust transfer pricing audit programs and documentation requirements. We recommend that the intercompany agreements be finalized concurrently with the transfer pricing benchmark study being conducted by Glenmore Thornton LLP, to ensure that all pricing terms are consistent with the arm's-length standard.
B. Intercompany Loan Agreements
A portion of the equity contribution made by Fund VI into the surviving corporation at closing — totaling $2,832,888,096 in aggregate equity invested by Fund VI and Co-Invest VI-A, net of the rollover equity — may be re-characterized or restructured as intercompany debt for tax-efficiency purposes. Specifically, the re-domesticated US parent (Cloudium Inc.) may lend a portion of its available capital to one or more of its subsidiaries in the form of intercompany loans, generating interest income for the US parent and corresponding interest deductions for the subsidiary borrowers.
The structuring of intercompany debt must take into account the thin-capitalization and interest-limitation rules in each relevant jurisdiction:
(i) United States (Section 163(j)). The Tax Cuts and Jobs Act of 2017 imposed a limitation on the deductibility of business interest expense under Section 163(j) of the Code. For taxable years beginning after December 31, 2021, the deduction for business interest expense is limited to the sum of business interest income plus 30% of the taxpayer's adjusted taxable income ("ATI"), with ATI calculated without the add-back for depreciation, amortization, and depletion. This limitation applies at the US entity level and must be modeled based on projected earnings.
(ii) United Kingdom (Corporate Interest Restriction). The UK Corporate Interest Restriction ("CIR") rules, effective for periods beginning on or after April 1, 2017, limit the amount of net interest expense that a group may deduct against UK taxable profits. The basic rule limits the UK group's net interest deductions to the greater of (a) 30% of UK-taxable EBITDA or (b) the group ratio (i.e., the ratio of the worldwide group's net interest expense to worldwide group EBITDA). The CIR rules must be carefully modeled for the Cloudium UK entities.
(iii) Germany (Earnings Stripping). German tax law limits the deduction of net interest expense to 30% of EBITDA under Section 4h of the German Income Tax Act (Einkommensteuergesetz, "EStG"), subject to certain exceptions for standalone companies and groups. The interaction between the German earnings stripping rules and the proposed intercompany debt structure must be evaluated.
(iv) India (Section 94B). India's thin-capitalization rules under Section 94B of the Income Tax Act, 1961, limit the deduction of interest on debt from associated enterprises to 30% of EBITDA. Interest expense in excess of this limit may be carried forward for up to eight assessment years.
Any intercompany loans must bear interest at an arm's-length rate, determined through a benchmark analysis of comparable lending transactions, taking into account the creditworthiness of the borrower, the loan amount, the tenor, the currency, and other relevant terms. The terms of the intercompany loans must also be coordinated with the requirements of the Credit Agreement, which may restrict the incurrence of intercompany indebtedness by the Borrower and its subsidiaries or require that such indebtedness be subordinated to the senior secured obligations under the Credit Agreement.
C. IP License Agreements
Intercompany intellectual property license agreements will be required between the IP-owning entity (to be determined based on the outcome of the IP migration analysis described in Section IV.F) and each operating subsidiary that utilizes the Cloudium intellectual property in its operations. The IP license agreements will govern the terms on which each subsidiary is authorized to use, sublicense, and commercialize the licensed intellectual property within its designated territory and business scope.
The key categories of intellectual property to be covered by the license agreements include: (i) the Cloudium SaaS platform technology, including source code, object code, APIs, and related technical documentation; (ii) the "Cloudium" trademarks, trade names, logos, and associated brand assets; (iii) customer lists, customer data (subject to applicable data protection requirements), and customer relationship information; and (iv) proprietary algorithms, data analytics tools, machine learning models, and related know-how.
Royalty rates under the IP license agreements must be set at arm's-length levels, consistent with the OECD Transfer Pricing Guidelines and applicable domestic transfer pricing rules. Glenmore Thornton LLP will conduct a benchmark study to identify comparable uncontrolled transactions and establish a defensible royalty rate range for each category of licensed IP.
D. Management Services / Shared Services Agreements
A management services agreement (or shared services agreement) should be executed between the parent entity (Cloudium Inc.) and each subsidiary, governing the provision of corporate support functions from the parent to the subsidiaries. These functions typically include finance and accounting, legal and compliance, human resources, information technology, corporate strategy, and investor relations.
The pricing methodology for management services should follow the OECD Guidelines for low-value-adding intra-group services, which generally permit a cost-plus methodology with a modest markup (typically 5% on a cost-plus basis). For higher-value services, a more detailed functional and comparability analysis may be required. The allocation keys (e.g., headcount, revenue, asset base) should be documented and applied consistently across all participating entities.
We note that the Transition Services Agreement executed on January 22, 2024 in connection with the Merger Agreement may provide interim coverage for certain intercompany service arrangements during the post-closing transition period. We recommend reviewing the scope and duration of the Transition Services Agreement to ensure continuity of services until the permanent intercompany agreements are in place.
E. Data Processing Agreements
The transfer of personal data among the Cloudium group entities across international borders triggers obligations under applicable data protection laws, most significantly the General Data Protection Regulation (Regulation (EU) 2016/679, "GDPR") and the UK General Data Protection Regulation (the UK GDPR, as retained and amended following Brexit). Intercompany data processing agreements ("DPAs") are required wherever one group entity processes personal data on behalf of another group entity.
For transfers of personal data from the UK and German subsidiaries to the US parent or the Indian subsidiary, the group must implement appropriate transfer mechanisms. Standard Contractual Clauses ("SCCs") adopted by the European Commission (and, for UK transfers, the UK International Data Transfer Agreement or UK Addendum to the EU SCCs) are the most commonly used mechanism for legitimizing cross-border data transfers from the EU/UK to third countries that have not received an adequacy finding. As of the date of this memorandum, the United States does not have a general adequacy finding from the UK, although the EU-US Data Privacy Framework may provide a basis for certain transfers. The status of the UK adequacy decision and the applicability of the Data Privacy Framework must be evaluated in detail by the data privacy team.
With respect to India, the Digital Personal Data Protection Act 2023 ("DPDPA") was enacted on August 11, 2023, and introduces requirements for the processing and cross-border transfer of personal data. While the implementing rules under the DPDPA have not yet been fully promulgated as of the date of this memorandum, the Cloudium group should prepare for compliance with the DPDPA's requirements regarding data localization, consent, and cross-border transfer restrictions.
F. Cost-Sharing / R&D Agreements
The India subsidiary's significant research and development activities (approximately 2,4

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