Contract analysis

From: Helen Nakamura <hnakamura@calderwoodharkness.com> To: Derek Engstrom <dengstrom@calloway-briggs.com> Cc: Patricia Dunmore <pdunmore@calderwoodharkness.com> Subject: Tralvendo / WJC Comments on Draft Lender Consent Agreement and PPA Change of Control Provisions — Saguaro Flats Solar Project [Matter No. 1015-00002]

I spoke earlier today with Philip Thornton at Whitfield Stroval & Cade and Diane Roessler at Tralvendo regarding their initial review of the draft Lender Consent and Direct Agreement (the "Lender Consent Agreement") that we circulated last week, as well as the change of control provisions in the Seller's Revised Second Draft PPA dated August 11, 2025. I wanted to get you a summary of their comments and flag a few ite

**1. Lender Consent Agreement — Summary of Comments**

*Overall,* Tralvendo and WJC are generally comfortable with the structure of the draft Lender Consent Agreement as a tri-party agreement among Saguaro Flats Solar LLC (Seller), Meridian DataCore Solutions Inc. (Buyer), and Tralvendo National Bank, N.A. (Administrative Agent). Their comments are focused on four areas:

*Step-In Cure Period.* The lenders are requesting that the cure period for the Administrative Agent to step into the Seller's position following a Seller event of default under the PPA be extended from 60 days (as currently drafted) to **90 days**. WJC's view is that 90 days is market standard for solar project finance transactions and is necessary to allow the lender group — which includes syndicate members Osprey C

*Notice Requirements.* The lenders want the PPA to require Buyer to deliver copies of any default notice, termination notice, or force majeure notice to the Administrative Agent **simultaneously** with delivery to Seller. The current PPA draft requires notice to the lender "promptly," which WJC views as insufficiently precise. They would accept either "simultaneously" or "concurrently." This is a straightforward chan

*Replacement PPA Right.* WJC has requested clarification that if the lender group exercises its step-in right and cures the Seller default, or if the original PPA is terminated, the Buyer is obligated to enter into a replacement PPA on substantially the same terms with a lender-designated successor entity, provided that successor meets the creditworthiness standards set forth in the PPA. This is conceptually consiste

*No Modification Without Consent.* The lenders require that no material amendment, modification, or waiver of the PPA be effective without the Administrative Agent's prior written consent. This is a standard lender protection and is already addressed in the credit agreement term sheet, but WJC wants it memorialized in the Lender Consent Agreement as an independent covenant running to the benefit of the Administrative

**2. Change of Control — Lender Position and PPA Interaction**

This is the area where I want to flag a potential strategic issue.

Tralvendo's credit agreement requires that any change of control of Seller (Saguaro Flats Solar LLC) — defined as a transfer of more than 50% of direct or indirect equity interests to a non-affiliate — receive the Administrative Agent's prior written consent. This is in addition to whatever consent or notice mechanism is ultimately negotiated with Meridian in the PPA.

As you know, the positions on change of control in the PPA negotiation are currently apart. Meridian's counsel at Hargrove & Linden (Evelyn Crumveth) has proposed that any change of control of Seller require Buyer's prior written consent (not to be unreasonably withheld), plus a $1,500,000 consent fee, with a 60-day termination right if Buyer does not consent. Our position in the Second Draft PPA is a notice-plus-obj

Here is the tension I want to flag: the lenders' position — requiring the Administrative Agent's prior written consent for any change of control — actually aligns more closely with Meridian's consent-based approach than with CBR's current notice-plus-credit-test proposal. If Tralvendo is going to require consent under the credit agreement regardless, CBR's ability to argue against a consent mechanism in the PPA is so

I also want to note that this has direct implications for Ridgepoint Capital Partners LP, which holds 68% of CBR common equity. Any future exit, recapitalization, or portfolio restructuring by Ridgepoint that results in a change of control of CBR — and, indirectly, of Saguaro Flats Solar LLC — would potentially require consent from both the Buyer (under the PPA, depending on how this is resolved) and the Administrati

Diane Roessler reiterated on today's call that the minimum DSCR covenant of 1.30x is a firm requirement. Tralvendo's independent engineer, Gresham Engineering Advisors Inc., is currently reviewing the PPA terms in conjunction with the P50 annual generation estimate of 350,000 MWh prepared by Heliograph Energy Consulting LLC to confirm projected debt service coverage at the initial contract price of $20.00/MWh and thr

At P50 production and Year 1 pricing, annual PPA revenue of approximately $7,000,000 against estimated annual debt service of approximately $5,200,000 yields a projected DSCR of approximately 1.35x. That clears the 1.30x covenant but with limited cushion. The lenders want to ensure that the availability guarantee threshold and LD structure in the final PPA do not create scenarios where net revenue — after payment of

- **Internal Strategy Call:** We should schedule a call this week (week of August 12) with you, Rachel, Patricia, and Brett to discuss how to address the lender comments — particularly the 90-day step-in cure period and the change of control consent dynamic outlined above.

- **Revised Lender Consent Agreement:** Brett and I will turn around a revised draft of the Lender Consent Agreement reflecting the Tralvendo/WJC comments within a week so WJC can circulate to the syndicate lenders for review.

- **PPA Negotiation Coordination:** The change of control issue needs to be coordinated with our broader PPA negotiation strategy before the target resolution date of August 18, 2025 for the open availability and change of control issues with Meridian. Patricia and Brett are working on the counter-positions for the upcoming negotiation call with Hargrove & Linden.

- **Buyer-Side Discussion on Lender Consent Agreement:** I will also need to engage directly with Evelyn Crumveth and Ryan Matsuda at Hargrove & Linden on the Lender Consent Agreement, since Meridian is a party to that agreement and will need to agree to the step-in, cure, and notice provisions. I would like to hold off on that outreach until after our internal call so we have aligned positions.

Please let me know your availability this week. I am in the office through Friday and available by phone at any time. For reference, the documents under discussion are the draft Lender Consent Agreement previously circulated and the PPA Seller's Revised Second Draft dated August 11, 2025.

**Helen Nakamura** Of Counsel, Project Finance Calderwood & Harkness LLP 1100 Louisiana Street, Suite 4500 Houston, TX 77002 Tel: (713) 555-4182

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