Contract analysis

I. Executive Summary Calderwood & Harkness LLP represents Calloway-Briggs Renewables Inc. ("CBR") in connection with the negotiation of a twenty-year virtual power purchase agreement (the "PPA") with Meridian DataCore Solutions Inc. ("Meridian" or "Buyer") for the output of the Saguaro Flats Solar Project (the "Project"), a 150 MWac (195 MWdc) ground-mounted single-axis tracking solar photovoltaic facility to be deve

II. Background — Project and Transaction Structure A. Project Overview The Saguaro Flats Solar Project is a utility-scale ground-mounted solar photovoltaic generation facility with a nameplate direct current ("DC") capacity of 195 MWdc and an alternating current ("AC") capacity of 150 MWac, yielding a DC-to-AC ratio of approximately 1.30. The facility will employ single-axis tracking technology, which is expected to

III. ITC Eligibility Analysis Under IRC § 48 A. Statutory Framework

Section 48 of the Internal Revenue Code provides an investment tax credit for certain "energy property" placed in service by the taxpayer during the taxable year. The ITC is a dollar-for-dollar reduction in the taxpayer's federal income tax liability, calculated as a percentage of the eligible basis of the energy property. The ITC has been a cornerstone of federal policy supporting the development of renewable energy

IV. Analysis of Virtual PPA / CfD Structure — Risk to ITC Qualification A. CfD Distinguished from Physical PPA and Sale-Leaseback The threshold question in analyzing the impact of the PPA on ITC eligibility is the proper characterization of the CfD structure for federal income tax purposes. The PPA between Saguaro Flats Solar LLC and Meridian is a virtual PPA — a financial settlement mechanism — and must be distingui

V. Prevailing Wage and Apprenticeship Requirements To qualify for the 30% ITC rate — rather than the 6% base rate — the Saguaro Flats Solar Project must satisfy the prevailing wage and apprenticeship requirements enacted by the Inflation Reduction Act under IRC § 48(a)(10) and (11), as further implemented by Treasury and IRS guidance, including Notice 2022-61 (initial guidance on prevailing wage and apprenticeship re

VI. Drafting Recommendations for the PPA Based on the analysis set forth in Sections III through V above, we recommend that the following provisions be incorporated into the Seller's Revised Draft PPA (Second Draft), targeted for circulation to Meridian's counsel (Hargreaves Winston LLP, attention Jennifer Aldric) on August 11, 2025. These provisions are designed to preserve Seller's tax ownership position, prevent r