1015-00002 · Calloway-Briggs Renewables Inc · Analysis & Advice

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PRIVILEGED AND CONFIDENTIAL — ATTORNEY-CLIENT COMMUNICATION

MEMORANDUM

TO: Rachel Muñoz, General Counsel, Calloway-Briggs Renewables Inc. Janet Okafor, SVP, Origination & Commercial, Calloway-Briggs Renewables Inc.

FROM: Brett Callahan, Lead Associate, Energy & Infrastructure, Calderwood & Harkness LLP Patricia Dunmore, Responsible Partner, Energy & Infrastructure, Calderwood & Harkness LLP

DATE: August 5, 2025

RE: Saguaro Flats Solar PPA — Analysis of Meridian DataCore Solutions Inc.'s Change of Control Proposals

Matter No.: 1015-00002

I. Executive Summary

The purpose of this memorandum is to analyze the competing change of control proposals in the Power Purchase Agreement (the "PPA") between Saguaro Flats Solar LLC ("Seller") and Meridian DataCore Solutions Inc. ("Buyer" or "Meridian") for the 150 MWac Saguaro Flats Solar Project located in Pecos County, Texas (the "Project"). This memorandum is intended to provide our analysis, market-practice benchmarking, and recommended negotiating positions to guide the client team's response to Buyer's redline.

On August 1, 2025, Buyer's outside counsel, Hargrove & Linden LLP (lead partner Evelyn Crumveth), delivered a comprehensive redline of the PPA that materially departs from Seller's initial form circulated on July 14, 2025. Among the numerous open issues raised in the redline, the change of control provisions represent one of the most commercially significant points of divergence. As discussed in detail below, the disagreements fall along three critical dimensions:

(1) Consent vs. Notice Mechanism. Buyer seeks to replace Seller's notice-only change of control mechanism with a prior written consent requirement, granting Buyer a subjective veto right over any ownership transition at the Seller level.

(2) Imposition of a Consent Fee. Buyer proposes a $1,500,000 fee payable by Seller to Buyer upon each change of control event for which Buyer grants consent — a provision that is unusual in the renewables PPA market and appears designed as a value extraction mechanism.

(3) Scope and Duration of Buyer's Termination Right. Buyer's redline expands and untethers the termination right from any objective creditworthiness standard, replacing the Minimum Credit Threshold test with a broad subjective consent right coupled with a 60-day termination window.

This memorandum also addresses Seller's reciprocal change of control protections applicable to Buyer — protections that Buyer's redline has deleted entirely — and the critical interaction between the PPA change of control provisions and Tralvendo National Bank, N.A.'s lender-consent requirements under the $108,000,000 construction-to-term loan facility for the Project.

Based on our analysis of market practice, the financial and strategic implications for Calloway-Briggs Renewables Inc. ("CBR") and its equity sponsor Ridgepoint Capital Partners LP ("Ridgepoint"), and the requirements of the Project's lender group, we recommend a compromise framework that balances the parties' legitimate interests:

• Notice plus objective creditworthiness test as the default mechanism: Seller provides 30-day prior written notice, and the change of control proceeds without Buyer consent so long as the successor entity satisfies the Minimum Credit Threshold (tangible net worth ≥ $100,000,000 or investment-grade credit rating).

• No consent fee. The proposed $1,500,000 fee should be rejected in its entirety. If Buyer insists on some compensation mechanism, Seller should consider, at most, reimbursement of Buyer's reasonable, documented out-of-pocket costs capped at $50,000.

• Buyer consent required only if the successor entity fails to satisfy the Minimum Credit Threshold, with a cure mechanism permitting Seller to arrange substitute credit support before any termination right vests.

The target date for resolution of open issues on change of control and availability is August 18, 2025, in order to meet the September 15, 2025 PPA execution target and the October 1, 2025 construction loan closing with Tralvendo National Bank.

II. Background

A. The Transaction

The PPA is structured as a 20-year virtual (financial) power purchase agreement, operating as a contract for differences settling at the ERCOT West Hub node. Under the PPA, Seller will deliver energy from the Project into the ERCOT grid, and the parties will settle financially based on the difference between the contract price and the prevailing ERCOT West Hub real-time settlement price for each settlement interval. The aggregate nominal contract value over the 20-year term is approximately $140,000,000.

The contract price is set at $20.00 per MWh on a fixed basis for years 1 through 5 of the delivery term. Beginning in year 6, the contract price escalates at a rate of 1.50% per annum on a compounding basis through the expiration of the PPA in year 20. This escalation structure was the product of extensive negotiations during the term sheet phase and reflects a compromise between Seller's original proposal of a 2.00% escalator and Buyer's initial counter of a flat, unescalated price.

The Project — the Saguaro Flats Solar Project — is a ground-mounted, single-axis tracking solar photovoltaic generation facility with a nameplate capacity of 195 MWdc and an AC interconnection capacity of 150 MWac. The Project is situated on approximately 1,400 acres of leased ranchland along FM Road 1776 in Pecos County, Texas, within the ERCOT West Load Zone. The site benefits from excellent solar insolation characteristics typical of the Permian Basin region, with an estimated annual P50 net energy production of approximately 350,000 MWh per year, as determined by Heliograph Energy Consulting LLC in its independent energy assessment dated March 2025.

The expected commercial operation date ("COD") is April 1, 2027, with a delivery term commencing on the COD and expiring on March 31, 2047 — a full 20-year period. The PPA includes standard COD milestone provisions, including a guaranteed COD deadline of October 1, 2027, with delay liquidated damages accruing thereafter.

Seller is Saguaro Flats Solar LLC, a Delaware limited liability company formed as a special-purpose entity to own and operate the Project. Saguaro Flats Solar LLC is 100% owned, directly, by Calloway-Briggs Renewables Inc. Buyer is Meridian DataCore Solutions Inc., a Delaware corporation publicly traded on the Nasdaq Stock Market under the ticker symbol "MDCS," with an approximate market capitalization of $8.2 billion as of June 2025.

The PPA is governed by New York law. All disputes arising under or relating to the PPA are to be resolved through binding arbitration administered by the American Arbitration Association ("AAA") in New York, New York, under the AAA's Commercial Arbitration Rules, with a three-arbitrator panel.

B. Ownership Structure and Equity Sponsor

CBR is a Delaware corporation headquartered at 4200 Travis Street, Suite 1800, Houston, Texas 77002. CBR serves as the parent company and development platform for a portfolio of utility-scale renewable energy assets across multiple wholesale electricity markets.

CBR's primary equity sponsor is Ridgepoint Capital Partners LP, a Houston-based infrastructure private equity fund. Ridgepoint currently holds approximately 68% of CBR's outstanding common equity. The remaining 32% is held by CBR's management team, early-stage investors, and employee equity plan participants. Ridgepoint's Managing Partner is Alan Driscoll, who also serves on CBR's board of directors and its investment committee.

CBR has assembled a significant portfolio of operating and development-stage renewable energy assets, totaling approximately 1.8 GW of solar and wind capacity across the ERCOT, SPP, and MISO interconnections. The company was founded in 2011 and has grown both organically and through acquisition. For the fiscal year ended December 31, 2024, CBR reported consolidated revenues of approximately $312 million and consolidated EBITDA of approximately $118 million. CBR maintains a corporate family rating of BBB− from Pinnacle Ratings Group, reflecting its stable cash flow profile and manageable leverage.

Ridgepoint's 68% equity stake in CBR creates a natural and foreseeable likelihood of a future change of control event at the CBR level — and, by extension, at the Saguaro Flats Solar LLC level. Private equity sponsors such as Ridgepoint typically target investment exit horizons of five to seven years, and Ridgepoint's initial investment in CBR dates to 2019. Potential exit paths include a secondary sale of Ridgepoint's equity stake to another infrastructure fund, an initial public offering of CBR, or a strategic merger or acquisition involving CBR. Each of these scenarios could constitute a "Change of Control" under the PPA's definition, depending on how the resulting ownership restructuring is structured.

This context is critical to the change of control negotiation. A restrictive change of control provision in the PPA — particularly one requiring Buyer's subjective consent and imposing a substantial consent fee — could materially impair CBR's and Ridgepoint's ability to realize full exit value for their investment in CBR and the Project. Prospective acquirers in a sale process will closely scrutinize the PPA's change of control provisions, and provisions that introduce counterparty consent risk will result in value discounts or, in some cases, may deter potential bidders entirely. The importance of this issue to CBR's and Ridgepoint's broader strategic interests cannot be overstated.

C. Buyer's Profile

Meridian DataCore Solutions Inc. is a leading hyperscale and co-location data center operator headquartered in Reston, Virginia. Meridian operates 14 data center campuses across the United States, with an aggregate critical IT load capacity of approximately 480 MW. Meridian's facilities serve a diverse customer base of enterprise cloud computing providers, financial services firms, government agencies, and technology companies.

Meridian is publicly traded on the Nasdaq Stock Market under the ticker symbol "MDCS." For the fiscal year ended December 31, 2024, Meridian reported revenues of approximately $2.1 billion and EBITDA of approximately $740 million. Meridian maintains a corporate credit rating of BBB from Pinnacle Ratings Group, reflecting the company's strong cash flow generation, high contract renewal rates, and growing demand for data center capacity driven by artificial intelligence workloads and cloud computing expansion.

The key Buyer personnel involved in the PPA transaction include:

• Thomas Vellinger, Chief Executive Officer

• Priya Chandrasekaran, Chief Financial Officer

• Nathan Gilroy, Senior Vice President, Energy & Sustainability

• Amara Osei, Vice President, Procurement & Contracts

• Victor Langford, Deputy General Counsel

Meridian's interest in the Saguaro Flats PPA is driven by the company's publicly announced commitment to match 100% of its electricity consumption with renewable energy sources by 2030. The Saguaro Flats PPA would represent a significant component of Meridian's renewable energy procurement portfolio and is one of several PPAs Meridian is currently negotiating across ERCOT and PJM.

D. Project Finance Context

The Project's capital structure relies on a senior secured construction-to-term loan facility in the aggregate principal amount of $108,000,000 (the "Credit Facility"). The Credit Facility is being arranged by Tralvendo National Bank, N.A., a national banking association headquartered in Dallas, Texas, which will serve as Administrative Agent and Lead Arranger. The key contact at Tralvendo is Diane Roessler, Director in Tralvendo's Project Finance group.

The Credit Facility will be syndicated among the following lenders, with the following hold amounts:

The total estimated Project cost is approximately $154.3 million, consisting of a $142.5 million fixed-price turnkey EPC contract with Sunbelt Power Construction LLC and approximately $11.8 million in soft costs (development fees, permitting, interconnection, legal, insurance, and contingency). The resulting debt-to-equity ratio is approximately 70/30, which is consistent with market-standard leverage for utility-scale solar projects with contracted revenue streams.

The Credit Facility's interest rates are set at Term SOFR plus 175 basis points during the term loan period and Term SOFR plus 200 basis points during the construction period. The minimum Debt Service Coverage Ratio ("DSCR") covenant is 1.30x, and the Project is projected to achieve a DSCR of approximately 1.35x at P50 production levels and Year 1 contract pricing — providing adequate but not excessive cushion above the covenant threshold.

The lender group is represented by Whitfield Stroval & Cade LLP, a New York law firm specializing in project finance. The lead partner at Whitfield Stroval is Philip Thornton, who has been involved in preliminary discussions regarding the PPA form and lender consent requirements.

Critically for purposes of this memorandum, the draft Tralvendo credit agreement contains several provisions that intersect directly with the PPA's change of control clause:

(a) Prior Lender Consent to Change of Control. The credit agreement requires Seller to obtain the prior written consent of Tralvendo (acting on behalf of the Required Lenders) before consummating any change of control of Seller, whether by transfer of equity interests, merger, consolidation, or otherwise.

(b) PPA Protections Covenant. The credit agreement includes a covenant requiring that the PPA contain customary lender-consent-to-assignment provisions and step-in rights provisions, permitting the lender group (or its designee) to assume the PPA in the event of a Seller default and foreclosure on the Project.

(c) Material Contract Amendments. The credit agreement prohibits Seller from amending, modifying, waiving, or terminating the PPA (or consenting to any amendment, modification, waiver, or termination) without prior lender consent.

These lender requirements establish an independent, parallel consent framework that operates alongside any Buyer consent rights in the PPA itself. As discussed in Section V.D below, the existence of the lender consent framework is relevant to the analysis of whether an additional Buyer consent gate is necessary or appropriate.

III. Seller's Position on Change of Control (As Proposed in First Draft, July 14, 2025)

This section summarizes the change of control provisions as they appear in Seller's initial draft PPA circulated to Buyer's counsel on July 14, 2025. These provisions were drafted by our firm in consultation with CBR's commercial team, with input from Helen Nakamura (Of Counsel, Project Finance) regarding bankability considerations and alignment with the anticipated Tralvendo credit agreement terms.

A. Definition of Change of Control

Under Seller's draft, "Change of Control" is defined as a direct or indirect transfer, assignment, sale, pledge, or other disposition (whether in a single transaction or in a series of related transactions) of more than 50% of the equity interests in Saguaro Flats Solar LLC to any person or entity that is not an Affiliate of Seller. The definition is intentionally structured to capture both direct equity transfers (e.g., a sale of membership interests in Saguaro Flats Solar LLC) and indirect equity transfers (e.g., a sale of a controlling interest in CBR, which would result in an indirect change in the ownership of Saguaro Flats Solar LLC).

The term "Affiliate" is defined by reference to the concept of common control: a person or entity that, directly or indirectly, controls, is controlled by, or is under common control with, the relevant party. "Control" is defined as the direct or indirect ownership of 50% or more of the voting securities or equity interests of an entity, or the power to direct the management and policies of such entity by contract or otherwise.

This definition is deliberately calibrated to exclude from the change of control trigger any intra-group reorganizations, transfers to affiliated entities within the CBR corporate family, and minority stake sales that do not result in a change in the controlling ownership of the Seller entity. It is a standard formulation used in utility-scale renewable energy PPAs and is consistent with the definitions used in the Tralvendo credit agreement.

B. Notice Requirement

Under Seller's draft, Seller is required to provide Buyer with 30 calendar days' prior written notice of any Change of Control. The notice must identify the successor entity and provide reasonable information regarding the successor's financial condition and creditworthiness, including, to the extent available, the successor's most recent audited financial statements, any applicable credit rating from a nationally recognized rating agency, and a certification of the successor's tangible net worth.

Importantly, Seller's draft does not require Buyer's consent to or approval of the Change of Control. The notice mechanism is informational in nature, designed to ensure that Buyer has adequate advance knowledge of any ownership transition and sufficient information to evaluate the creditworthiness of the successor entity. This approach reflects the view — widely shared in the utility-scale renewable energy market — that a notice-based mechanism, coupled with an objective credit test (discussed below), provides Buyer with meaningful protections while preserving Seller's transactional flexibility.

C. Buyer Termination Right

Seller's draft does not grant Buyer a general right to terminate the PPA upon a Change of Control. Rather, Buyer's termination right is narrowly tailored and arises only in a specific circumstance: where the successor entity fails to meet the "Minimum Credit Threshold."

The Minimum Credit Threshold is defined as satisfaction of at least one of the following two criteria:

(i) Tangible Net Worth Test: The successor entity has a tangible net worth ("TNW") of not less than $100,000,000, as demonstrated by its most recent audited financial statements or, if audited financial statements are not available, a certification from the successor's chief financial officer; or

(ii) Credit Rating Test: The successor entity maintains an investment-grade credit rating of BBB− or higher from a nationally recognized rating agency, such as Pinnacle Ratings Group, S&P Global Ratings, Moody's Investors Service, or Fitch Ratings.

If the successor entity meets the Minimum Credit Threshold, the PPA continues in full force and effect following the Change of Control, and Buyer has no termination right. The PPA simply flows through to the successor entity (or to the reconstituted Seller entity, as applicable) without interruption.

If, however, the successor entity fails to satisfy either prong of the Minimum Credit Threshold, Buyer may elect to terminate the PPA by delivering written notice of termination within 30 days of receiving Seller's Change of Control notice. This termination right is designed to protect Buyer against a scenario in which a Change of Control results in the Seller entity being controlled by a financially weak or uncreditworthy successor — a scenario that could impair Buyer's confidence in the long-term performance and financial stability of its PPA counterparty.

The $100,000,000 TNW threshold was set at a level intended to be meaningful but not exclusionary. It reflects the financial scale necessary to support the obligations of a 150 MWac solar project with annual revenues of approximately $7,000,000, while recognizing that many legitimate infrastructure investors and asset owners would readily satisfy this threshold. The investment-grade credit rating alternative provides flexibility for entities that may not have $100 million in tangible net worth but are nonetheless creditworthy by virtue of their overall financial profile and market standing.

D. No Consent Fee

Seller's draft does not include any consent fee, transfer fee, change of control fee, or similar monetary payment payable by Seller to Buyer in connection with a Change of Control. The omission is intentional and reflects CBR's and our firm's view that such fees are not market standard in utility-scale renewable energy PPAs, are not justified by any identifiable administrative cost or economic harm to Buyer, and would create perverse economic incentives that discourage the maintenance of the PPA through ownership transitions.

E. Rationale. The Seller's change of control framework is grounded in the following principles:

Market Standard. The notice-plus-objective-credit-test approach reflects the prevailing market standard in utility-scale solar PPAs, particularly in corporate offtake transactions where the buyer is a creditworthy corporate entity (as opposed to a regulated utility). Our review of recent PPA precedents across ERCOT, PJM, and CAISO markets confirms that the clear trend in corporate renewable energy procurement is toward notice-based mechanisms with objective credit thresholds, rather than subjective consent-based regimes.

Preservation of Seller Flexibility. The 20-year PPA term virtually guarantees that one or more ownership transitions will occur during the life of the contract. CBR's equity sponsor, Ridgepoint, is a private equity fund with a finite investment horizon. Future ownership changes — whether through a Ridgepoint exit, a CBR corporate restructuring, or a Project-level asset sale — are foreseeable and should not be subject to Buyer's subjective approval. A notice-based mechanism ensures that Seller and its equity sponsors retain the ability to execute ownership transitions efficiently, subject to the important safeguard of the Minimum Credit Threshold.

Bankability. The Seller's proposed change of control framework is consistent with the requirements of the Tralvendo credit agreement and the expectations of the Project's lender group. Lenders focus on the creditworthiness of the successor entity and the continuity of the PPA revenue stream, both of which are addressed by the Minimum Credit Threshold test. An overly restrictive Buyer consent right could, paradoxically, create bankability concerns by introducing execution risk into future ownership transitions that might otherwise proceed smoothly.

Proportionality. The Seller's framework is proportionate to the risk that the change of control provision is designed to address — namely, the risk that a Change of Control results in a financially inadequate successor controlling the Seller entity and the Project. The Minimum Credit Threshold directly targets this risk. A subjective consent right, by contrast, gives Buyer leverage that extends well beyond legitimate credit protection concerns and into the realm of commercial opportunism.

IV. Buyer's Position on Change of Control (As Proposed in Buyer's Redline, August 1, 2025)

Buyer's redline, delivered by Evelyn Crumveth of Hargrove & Linden LLP on August 1, 2025, proposes fundamental changes to the change of control framework. This section summarizes and analyzes each element of Buyer's counter-proposal.

A. Consent Requirement

Buyer's redline replaces Seller's notice-only mechanism with a requirement that any Change of Control of Seller (using the same definition — transfer of more than 50% of direct or indirect equity interests in Saguaro Flats Solar LLC to a non-Affiliate of Seller) requires Buyer's prior written consent.

The redline states that Buyer's consent shall "not to be unreasonably withheld, conditioned, or delayed." However, the redline provides no enumeration, definition, or guidance as to what constitutes "reasonable" or "unreasonable" withholding of consent. There are no objective criteria, no safe harbors, and no examples of circumstances in which withholding would be deemed per se unreasonable. The standard is left entirely open-ended, giving Buyer significant practical discretion to condition, delay, or withhold consent based on considerations that may extend well beyond the creditworthiness of the successor entity — including, potentially, strategic or competitive considerations, dissatisfaction with unrelated aspects of the PPA relationship, or a desire to extract concessions in connection with the consent process.

The practical effect of this consent mechanism is to give Buyer a subjective veto right — qualified only by a reasonableness standard that, in the event of a dispute, would need to be adjudicated through the PPA's dispute resolution process. As discussed in Section V.E below, this creates meaningful litigation and arbitration risk that could delay or frustrate a time-sensitive sale transaction.

B. Consent Fee

In addition to the consent requirement, Buyer proposes a consent fee of $1,500,000, payable by Seller to Buyer upon each Change of Control event for which Buyer grants consent. The fee is structured as a condition to the effectiveness of Buyer's consent — meaning that even if Buyer affirmatively consents to the Change of Control, the consent does not become effective until Seller pays the $1,500,000 fee.

No justification or rationale for the $1,500,000 fee amount is provided in the redline or in any accompanying correspondence from Hargrove & Linden. The fee does not appear to be tied to any identifiable cost that Buyer would incur in connection with evaluating or processing a Change of Control — such as legal fees, credit analysis costs, or administrative expenses. Rather, the fee appears to function as a value extraction mechanism, designed to capture a portion of the economic value inherent in the PPA each time an ownership transition occurs at the Seller level.

The fee is payable on a per-event basis, meaning that multiple Change of Control events during the 20-year PPA term would result in multiple $1,500,000 payments. Given the likelihood of at least two ownership transitions during the PPA term (see Section V.C below), the cumulative fee exposure could reach $3,000,000 or more.

C. Termination Right

Under Buyer's redline, if Buyer does not consent to a proposed Change of Control, Buyer may terminate the PPA by delivering written notice of termination within 60 calendar days of receiving Seller's Change of Control notice. This represents a materially broader and more extended termination right than what Seller proposed in its initial draft.

The breadth of this termination right is notable in two respects. First, the termination right is not tethered to any objective creditworthiness threshold. Under Seller's draft, Buyer's termination right arises only if the successor fails the Minimum Credit Threshold — a bright-line, objectively verifiable standard. Under Buyer's redline, the termination right arises whenever Buyer withholds consent, regardless of the successor's financial profile. Buyer could, in theory, withhold consent (and thereby trigger the termination right) even if the successor is a well-capitalized, investment-grade entity that exceeds the Minimum Credit Threshold by a wide margin.

Second, the 60-day termination window proposed by Buyer is twice the length of the 30-day window in Seller's draft. A 60-day window creates an extended period of uncertainty during which the PPA's continued existence is in question — uncertainty that could have cascading effects on the sale process, financing arrangements, and the Project's operations. During this 60-day period, prospective acquirers would face significant execution risk, which would likely be reflected in reduced bid prices or additional contractual protections demanded by the acquirer.

D. Removal of Minimum Credit Threshold

Perhaps the most consequential element of Buyer's redline is the complete deletion of the Minimum Credit Threshold test. Seller's draft tied Buyer's termination right to the failure of the successor entity to meet an objective, verifiable financial standard (TNW ≥ $100,000,000 or investment-grade credit rating). Buyer's redline removes this standard entirely and replaces it with the subjective consent mechanism described above.

The practical effect of this deletion is significant. Under Seller's draft, a Change of Control involving a successor that meets the Minimum Credit Threshold is, in essence, a non-event from the PPA's perspective — the PPA continues without interruption, and Buyer has no leverage to extract concessions, fees, or other benefits. Under Buyer's redline, every Change of Control — regardless of the successor's financial strength — becomes a consent event that gives Buyer leverage, creates execution risk, and triggers the $1,500,000 fee.

This shift from an objective to a subjective standard is the core substantive disagreement between the parties on the change of control issue, and it is the issue on which we recommend focusing the negotiation.

V. Comparative Analysis

A. Market Practice in Utility-Scale Solar PPAs

Industry practice on change of control provisions in utility-scale solar PPAs varies by market segment, counterparty type, and transaction vintage, but the clear trend — particularly in corporate offtake PPAs involving creditworthy corporate buyers — is toward notice-plus-objective-credit-test models rather than subjective consent-based regimes.

Our review of approximately 25 recent precedent transactions across the ERCOT, PJM, CAISO, and SPP markets (including both CBR's own portfolio precedents and precedents obtained through industry contacts and public filings) reveals the following patterns:

• Notice-Only with Credit Test: Approximately 16 of 25 precedent PPAs (64%) use a notice-based mechanism with an objective creditworthiness test (typically tangible net worth, credit rating, or both), with Buyer's consent required only if the successor fails the credit test. This is the model adopted in Seller's initial draft.

• Consent-Based (Qualified by Reasonableness): Approximately 6 of 25 precedent PPAs (24%) require Buyer consent, qualified by a "not to be unreasonably withheld" standard, but without a consent fee. Several of these PPAs include an enumeration of factors that constitute "reasonable" withholding, providing greater clarity than Buyer's open-ended formulation.

• Consent-Based (Unqualified or Sole Discretion): Approximately 3 of 25 precedent PPAs (12%) give Buyer an unqualified consent right or a consent right exercisable in Buyer's "sole discretion." These are predominantly older-vintage PPAs (pre-2020) involving utility buyers subject to regulatory oversight, where the change of control provision was driven by regulatory considerations rather than commercial negotiation.

Notably, consent-based change of control provisions are more common in PPAs with utility buyers subject to state public utility commission oversight, where regulatory frameworks may require the utility to demonstrate to its regulator that the PPA counterparty is a responsible and creditworthy entity. In corporate offtake PPAs — such as the Meridian PPA — the regulatory rationale for consent-based provisions is absent, and the prevailing market practice reflects a recognition that objective credit tests provide adequate protection without the transactional friction and execution risk associated with subjective consent rights.

The $1,500,000 consent fee proposed by Buyer is unusual in the renewables PPA market. Of the 25 precedent transactions we reviewed, none included a consent fee or transfer fee payable by Seller to Buyer in connection with a change of control. While consent fees are sometimes seen in commercial real estate leases and certain types of franchise agreements, they are not an established feature of the renewable energy PPA market, and we are not aware of any identifiable transaction cost or administrative burden that would justify a fee of this magnitude.

Finally, the 60-day termination window proposed by Buyer is longer than is typical even in consent-based regimes. Among the precedent PPAs that include a Buyer termination right upon change of control, the more common window is 30 days from the date of Buyer's receipt of the Change of Control notice or, in some cases, 30 days from the date Buyer receives all reasonably requested information regarding the successor entity.

B. Financial Impact of Consent Fee

The financial impact of the proposed $1,500,000 consent fee merits careful quantitative analysis.

At P50 production levels of 350,000 MWh per year and a blended average contract price of approximately $20.00/MWh (reflecting the weighted average of the fixed and escalated price periods), the PPA is projected to generate annual revenues to Seller of approximately $7,000,000 per year. On this basis, the $1,500,000 consent fee represents approximately 21.4% of a single year's estimated PPA revenue — a substantial proportion by any measure.

Over the 20-year PPA term, if two or more ownership transitions occur at the Seller level — a realistic scenario given Ridgepoint's private equity investment horizon and the likelihood of subsequent ownership changes by any successor — the cumulative consent fee exposure could reach $3,000,000 or more. At a 7.0% discount rate, the present value of two consent fee payments occurring in years 5 and 12 of the PPA term (illustrative timing assumptions) would be approximately $2,085,000, representing a meaningful reduction in the net present value of the PPA to Seller.

Moreover, the consent fee creates a perverse economic incentive: it effectively penalizes Seller for maintaining the PPA in force through ownership transitions, rather than terminating the PPA prior to a change of control and leaving Buyer without a contracted renewable energy source. From a policy perspective, a rational PPA framework should incentivize continuity and stability, not penalize it.

The fee also has implications for the Project's economics at the project finance level. To the extent the consent fee reduces cash available for debt service in the year in which it is payable, it could stress the Project's DSCR covenant compliance, particularly given the relatively thin projected cushion of approximately 1.35x at P50 against a 1.30x minimum covenant. While this would depend on the timing of any Change of Control relative to the Project's debt amortization schedule, it represents an additional risk factor that the lender group would likely flag in its review of the PPA.

C. Impact on Ridgepoint Capital Partners LP Exit

The change of control provisions have direct and material implications for Ridgepoint's ability to execute an exit from its 68% equity position in CBR during the PPA term.

Ridgepoint holds 68% of CBR's common equity and, as a private equity sponsor, will seek to realize a return on its investment through a liquidity event during the PPA term. Ridgepoint's initial investment in CBR dates to 2019, placing the fund within or approaching its targeted hold period of five to seven years. Depending on market conditions and Ridgepoint's fund-level liquidity requirements, a Ridgepoint exit transaction could occur as early as 2026 or 2027 — contemporaneous with or shortly following the Project's COD.

The potential exit paths available to Ridgepoint include:

(a) Secondary Sale: A sale of Ridgepoint's 68% equity stake in CBR (or a controlling portion thereof) to another infrastructure-focused private equity fund, pension fund, or sovereign wealth fund. This is the most common exit path for infrastructure PE investments and would likely constitute a Change of Control under the PPA definition.

(b) Initial Public Offering: An IPO of CBR, in which Ridgepoint would sell down its equity stake through a public offering process. Depending on the structure of the IPO and the resulting post-IPO ownership, this could constitute a Change of Control if Ridgepoint's post-IPO stake falls below 50% and no single Affiliate entity acquires a controlling position.

(c) Strategic Merger or Acquisition: A sale of CBR (or its assets, including Saguaro Flats Solar LLC) to a strategic buyer such as a utility, independent power producer, or larger renewable energy platform. This would almost certainly constitute a Change of Control.

Under a consent-based regime, each of these exit paths would require Meridian's prior written consent, introducing a significant element of execution risk into the sale process. Prospective acquirers — whether financial sponsors, strategic buyers, or public market investors — will conduct thorough due diligence on the PPA and will price the change of control risk accordingly. If PPA continuation is subject to Buyer's subjective consent, acquirers will either discount their bids to reflect the risk that Buyer withholds consent (or extracts concessions as a condition to consent), or they will require CBR to obtain Buyer consent as a condition precedent to closing, potentially extending transaction timelines and creating additional points of negotiation.

The $1,500,000 consent fee compounds this issue by directly reducing exit proceeds. In a competitive auction or bilateral sale process, the consent fee represents a transaction cost that will be borne by either Seller or the acquirer — in either case, it reduces the aggregate value available to the parties and creates friction that serves no legitimate commercial purpose.

By contrast, an objective credit threshold approach provides deal certainty to prospective acquirers. So long as the successor entity meets the Minimum Credit Threshold — a standard that any credible infrastructure investor, strategic buyer, or post-IPO public company would readily satisfy — the PPA continues in full force and effect without interruption, without consent, and without fees. This certainty is a valuable feature of the PPA from a marketability and exit-planning perspective.

D. Lender Considerations

The interaction between the PPA's change of control provisions and the Tralvendo credit agreement is a critical dimension of this analysis.

As noted in Section II.D above, the Tralvendo credit agreement requires Seller to obtain the prior written consent of Tralvendo (acting on behalf of the Required Lenders) before consummating any Change of Control of Seller. This lender consent requirement operates independently of any Buyer consent right in the PPA and reflects the lenders' interest in ensuring the ongoing creditworthiness and operational capability of the entity that controls the Project — the primary collateral securing the $108,000,000 loan facility.

If Buyer's consent-based proposal is accepted, the result would be a dual consent gate structure in which any Change of Control would require the separate consent of both (i) Buyer and (ii) the lender group. This dual-gate structure increases the complexity, timeline, and execution risk associated with any future ownership transition. A prospective acquirer would need to navigate two independent consent processes, each with its own timeline, conditions, and potential for delay or objection. In a time-sensitive transaction — such as a competitive auction with defined bid deadlines — the burden of obtaining dual consents could be prohibitive.

It is important to note, however, that lenders and Buyer have different — and in some respects aligned — interests with respect to the change of control provision. Lenders are primarily concerned with the creditworthiness of the Seller entity and the continuity of the PPA revenue stream, which is the primary source of cash flow supporting debt service. An objective credit threshold test in the PPA addresses this concern directly by ensuring that any successor entity meets defined financial criteria. Lenders would likely support an objective credit test approach, as it provides a clear and predictable framework that facilitates — rather than impedes — ownership transitions, while maintaining minimum credit standards.

Additionally, the lender group's independent protections provide a significant layer of security that partially mitigates the need for an overly restrictive Buyer change of control provision. The Lender Consent Agreement (to be attached to the PPA as Exhibit F) provides the lender group with:

(a) Step-in rights permitting the lenders (or their designee, including a foreclosure purchaser) to assume the PPA and cure any Seller defaults in the event of a foreclosure on the Project;

(b) Cure rights giving the lenders a defined period (typically 60 to 90 days) to cure any Seller default under the PPA before Buyer may exercise termination rights; and

(c) New PPA rights requiring Buyer to enter into a new PPA on substantially identical terms with any foreclosure purchaser or lender designee, subject to certain conditions.

These protections ensure that even in a worst-case scenario — Seller default and lender foreclosure — the PPA revenue stream is preserved and the Project continues to operate for Buyer's benefit. The existence of these independent lender protections reduces the marginal benefit of an additional Buyer consent gate on change of control.

E. Reasonableness Standard — Litigation Risk

While the "not to be unreasonably withheld, conditioned, or delayed" standard is a familiar and facially balanced contractual formulation, its application in the change of control context introduces meaningful ambiguity and potential for disputes.

The core problem is that "reasonableness" in the context of a consent right is an inherently subjective and fact-intensive determination. Buyer may view its withholding of consent as reasonable based on a range of considerations — the successor's creditworthiness, operational track record, industry reputation, competitive relationships, or even broader strategic concerns about the direction of the Project under new ownership. Seller, on the other hand, may view the same withholding as pretextual or motivated by considerations unrelated to the successor's ability to perform the PPA obligations.

If Buyer withholds consent and Seller believes the withholding is unreasonable, the dispute would need to be resolved through the PPA's dispute resolution mechanism. Under the PPA's dispute resolution clause, the parties are first required to engage in good-faith negotiations for a period of 30 days. If the negotiations fail to resolve the dispute, either party may initiate binding arbitration before the AAA in New York, New York, under the AAA's Commercial Arbitration Rules, with a panel of three arbitrators.

While AAA arbitration is generally a well-functioning dispute resolution mechanism, it is not instantaneous. From the filing of a demand for arbitration through the selection of arbitrators, briefing, hearing, and issuance of an award, the process typically takes nine to eighteen months, depending on the complexity of the dispute and the arbitrators' availability. During this period, the Change of Control transaction would be in limbo — the PPA's status would be uncertain, the acquirer's rights would be unclear, and the lender group would likely be unable to consent to the transaction until the arbitration is resolved.

In a time-sensitive sale process — which most PE exit transactions are — a nine-to-eighteen-month arbitration timeline could be fatal to the transaction. Prospective acquirers will not wait indefinitely for a dispute with a PPA counterparty to be resolved, and competing investment opportunities will not remain available. The risk of delay and uncertainty alone is sufficient reason to prefer an objective credit test over a subjective consent standard.

An objective credit test eliminates this dispute risk entirely by providing a bright-line, self-executing standard. The question of whether the successor meets the Minimum Credit Threshold can be determined definitively by reference to audited financial statements and credit rating reports — verifiable, objective data that leave no room for subjective interpretation or dispute. This is a significant structural advantage of the Seller's proposed approach.

VI. Reciprocal Buyer Change of Control Protections

A. Seller's Proposal for Buyer Change of Control

In Seller's initial draft PPA dated July 14, 2025, Seller included a reciprocal change of control provision applicable to Buyer. Under this provision, if Meridian DataCore Solutions Inc. undergoes a Change of Control (using the same definitional framework — transfer of more than 50% of direct or indirect equity interests to a non-Affiliate), and if the successor entity's credit rating from Pinnacle Ratings Group (or an equivalent nationally recognized rating agency) falls below BBB−, Seller may demand that the successor provide additional credit support in the form of an irrevocable standby letter of credit in an amount equal to 12 months' estimated PPA payments, approximately $7,000,000.

If the successor entity fails to deliver the required letter of credit within 30 calendar days of Seller's written demand, Seller may terminate the PPA by delivering written notice of termination to Buyer. This termination right is intended to protect Seller against the risk that a Buyer Change of Control results in Seller being contractually bound to a counterparty that lacks the financial capacity to honor its settlement obligations under the PPA over the remaining term.

B. Buyer's Redline Response

Buyer's redline dated August 1, 2025 deleted the reciprocal Buyer change of control provision in its entirety. The redline does not include any replacement language, alternative formulation, or modified version of the reciprocal provision. The deletion is uncommented in the redline, and no explanation or justification was provided in Hargrove & Linden's cover correspondence.

Based on our preliminary discussions with Victor Langford (Buyer's Deputy General Counsel), Buyer's position appears to be that Meridian's current investment-grade credit rating (BBB from Pinnacle Ratings Group) and substantial market capitalization (approximately $8.2 billion) make a reciprocal change of control provision unnecessary. Buyer's view, as we understand it, is that Meridian's creditworthiness is self-evident and that a reciprocal LC demand right imposes an unwarranted burden on any successor to Meridian.

C. Analysis. While Meridian's current credit profile is undeniably strong, the relevant analytical framework must account for the 20-year PPA term. A credit rating of BBB and a market capitalization of $8.2 billion reflect Meridian's financial condition as of mid-2025. Over the next two decades, economic conditions, industry dynamics, competitive pressures, and management quality could change materially. The reciprocal change of control provision is not premised on a judgment that Meridian is currently uncreditworthy — it is premised on the recognition that, over a 20-year period, credit conditions may deteriorate, and Seller needs contractual protections to address that contingency.

The data center industry, while currently experiencing robust demand driven by cloud computing, artificial intelligence, and digital infrastructure expansion, faces evolving technology and competitive risks that could impair the creditworthiness of individual operators over a multi-decade horizon. These risks include:

• Technological disruption in computing architectures that could reduce demand for traditional data center space;

• Increased competition from hyperscale cloud providers (such as Ridgeway Industries, Crestline Systems, and Aldermere Technologies) that may choose to build owned capacity rather than lease from co-location operators;

• Regulatory and environmental risks, including carbon pricing, water usage restrictions, and energy efficiency mandates that could increase operating costs;

• Interest rate and capital markets risks that could impair the ability of capital-intensive data center operators to refinance existing indebtedness.

Reciprocal change of control protections are standard in long-term PPAs and are essential for bankability. The Tralvendo lender group relies on the creditworthiness of both PPA counterparties — Seller and Buyer — to support the revenue projections and cash flow models underpinning the $108,000,000 loan facility. The PPA revenue stream is only as reliable as the Buyer's ability and willingness to honor its financial settlement obligations. If a Buyer Change of Control results in a successor with a sub-investment-grade credit profile, the lender group's credit analysis and underwriting assumptions would be undermined, potentially triggering adverse consequences under the credit agreement (including, potentially, a mandatory prepayment or covenant default).

We strongly recommend insisting on retention of the reciprocal Buyer change of control provision, including the $7,000,000 LC demand right. This is not a provision on which Seller should make significant concessions, as it directly affects the bankability of the PPA and the lender group's willingness to close the Credit Facility on the anticipated terms.

It should be noted that Seller has separately requested a Buyer corporate guaranty from Meridian capped at $14,000,000 (equal to approximately two years of estimated PPA revenues). This guaranty, which is the subject of separate negotiations, is intended to provide general credit support for Buyer's PPA obligations throughout the term. The change of control LC demand right is an additional, situation-specific credit protection triggered only in the event of a Buyer Change of Control coupled with credit deterioration — it is not a substitute for the corporate guaranty, and both provisions serve distinct and complementary protective functions.

VII. Recommended Compromise Position

Based on the foregoing analysis, we recommend the following compromise framework for the change of control provisions. This framework is designed to address Buyer's legitimate interest in counterparty credit quality while preserving Seller's (and Ridgepoint's) need for transactional flexibility and exit optionality.

A. Core Framework

We recommend retaining a notice-based mechanism as the default, with Buyer consent required only in limited, objectively defined circumstances. The specific mechanics would be as follows:

Notice Requirement. Seller provides Buyer with 30 calendar days' prior written notice of any Change of Control. The notice must identify the successor entity and include reasonable information regarding the successor's financial condition and creditworthiness, including (i) the successor's most recent audited financial statements (or, if unavailable, unaudited financial statements certified by the successor's chief financial officer), (ii) any applicable credit rating from a nationally recognized rating agency, and (iii) a certification of the successor's tangible net worth.

Objective Credit Test. If the successor entity satisfies the Minimum Credit Threshold — defined as (a) tangible net worth of not less than $100,000,000, or (b) an investment-grade credit rating of BBB− or higher from Pinnacle Ratings Group or an equivalent nationally recognized rating agency — the Change of Control proceeds without Buyer consent, and the PPA continues in full force and effect.

Buyer Consent as a Fallback. If the successor entity fails to satisfy the Minimum Credit Threshold, Buyer's prior written consent is required. In this scenario, Buyer's consent is not to be unreasonably withheld, conditioned, or delayed, and the PPA should include an enumeration of factors that Buyer may reasonably consider in evaluating the successor, including (i) the successor's financial condition and operating history, (ii) the successor's experience in owning and operating renewable energy assets, and (iii) any pending litigation, regulatory proceedings, or bankruptcy filings involving the successor.

Substitute Credit Support Option. If the successor fails the Minimum Credit Threshold and Buyer's consent is required, Seller may alternatively propose substitute credit support to address Buyer's concerns. This substitute credit support could include an irrevocable standby letter of credit from a creditworthy financial institution, a corporate guaranty from a creditworthy parent entity, or a cash collateral deposit, in each case in an amount and on terms reasonably acceptable to Buyer. If Seller provides such substitute credit support, Buyer's consent is deemed given and the PPA continues in full force and effect.

This framework preserves the bright-line, self-executing character of Seller's original proposal for the vast majority of Change of Control scenarios — those involving creditworthy successors — while introducing a reasonable consent gate only for the narrow circumstance in which the successor fails to meet defined financial criteria. The fallback consent mechanism, supplemented by the substitute credit support option, provides Buyer with meaningful protection in the event of a Change of Control to a sub-threshold successor, while ensuring that Seller retains a pathway to consummate the transaction by addressing Buyer's credit concerns directly.

B. No Consent Fee

We recommend rejecting the $1,500,000 consent fee in its entirety. As discussed in Section V.B above, the fee is not market standard in the renewable energy PPA market, is not tied to any identifiable cost or economic harm to Buyer, and creates perverse economic incentives that penalize legitimate ownership transitions.

If Buyer insists on some form of monetary compensation in connection with the consent process, the most that Seller should consider offering is reimbursement of Buyer's reasonable, documented out-of-pocket costs actually incurred in evaluating the successor entity, including legal fees and credit analysis costs. Any such reimbursement should be subject to a hard cap of $50,000 per Change of Control event. This amount is sufficient to cover the reasonable costs of a legal review and financial analysis of the successor entity, without creating the perverse incentives associated with a $1,500,000 consent fee.

The justification for rejecting the consent fee should be presented to Buyer's counsel firmly but constructively. We recommend framing the rejection in terms of market practice and proportionality, emphasizing that: (i) consent fees are not a feature of the utility-scale solar PPA market and would set an adverse precedent for both parties' future transactions; (ii) the fee is disproportionate to any cost or burden that Buyer would incur in connection with a Change of Control; and (iii) the fee creates economic incentives that are misaligned with the parties' shared interest in the long-term continuity and stability of the PPA.

C. Termination Right

Under the recommended compromise framework, Buyer's termination right would be structured as follows:

Trigger. The termination right arises only if (i) the successor entity fails to satisfy the Minimum Credit Threshold, (ii) Buyer's consent is required as a result, and (iii) Buyer withholds consent, with such withholding determined (through the dispute resolution process, if necessary) to be reasonable.

Termination Window. If the above conditions are met, Buyer may terminate the PPA by delivering written notice of termination within 30 calendar days of the date on which Buyer's withholding of consent is determined to be final. We recommend the 30-day window proposed in Seller's original draft, rather than the 60-day window proposed by Buyer. A 30-day window is consistent with market practice and provides Buyer with adequate time to assess its options while limiting the period of uncertainty for Seller and the sale transaction.

Cure Mechanism. Critically, we recommend that the termination right be subject to a cure mechanism. Specifically, Seller should have a period of 60 calendar days from the date of Buyer's delivery of its notice of intent to terminate within which to arrange for the successor entity to provide substitute credit support meeting the Minimum Credit Threshold (e.g., an irrevocable standby LC, a corporate guaranty from a creditworthy parent, or a cash deposit). If Seller successfully provides such substitute credit support within the 60-day cure period, Buyer's termination right lapses, and the PPA continues in full force and effect.

The cure mechanism is an essential feature of the compromise framework. It ensures that Buyer's termination right is truly a last resort — available only when the successor fails the credit test, Buyer reasonably withholds consent, and Seller is unable to arrange substitute credit support to address Buyer's concerns within a reasonable period. This structure maximizes the likelihood that the PPA survives any Change of Control event, which serves the interests of both parties (and of the lender group).

D. Reciprocal Buyer Change of Control

We recommend maintaining the reciprocal Buyer change of control provision as drafted in Seller's initial form, without modification. The specific mechanics are as follows:

(i) If Buyer (Meridian DataCore Solutions Inc.) undergoes a Change of Control and the successor entity's credit rating from Pinnacle Ratings Group (or an equivalent nationally recognized rating agency) falls below BBB−, Seller may demand that the successor provide an irrevocable standby letter of credit in the amount of $7,000,000 (equal to approximately 12 months' estimated PPA payments).

(ii) The successor entity must deliver the LC within 30 calendar days of Seller's written demand.

(iii) If the successor entity fails to deliver the LC within the 30-day period, Seller may terminate the PPA by delivering written notice of termination.

As discussed in Section VI.C above, this provision is essential to the bankability of the PPA and to the lender group's credit analysis. We recommend presenting this as a non-negotiable item, framed as a bankability requirement driven by the Tralvendo lender group's underwriting standards rather than as a Seller preference. This framing may reduce Buyer resistance, as it shifts the justification from Seller's commercial interests to the lender group's institutional requirements.

E. Lender Coordination

The PPA's change of control provision should be expressly coordinated with the lender consent requirements under the Tralvendo credit agreement. Specifically, we recommend the following provisions:

Cross-Reference. The PPA should include a clear cross-reference stating that, in addition to any consent or notice requirements under the PPA itself, Seller's obligations under its project finance credit agreement may require Seller to obtain the prior written consent of its lenders before consummating any Change of Control.

Seller Covenant. The PPA should include a covenant by Seller that it will not consummate a Change of Control without first obtaining all required consents under its project finance credit agreement and the Lender Consent Agreement (attached as Exhibit F to the PPA). This covenant provides Buyer with contractual assurance that the lender consent process has been completed, adding an additional layer of protection without requiring Buyer to independently verify Seller's compliance with its lending arrangements.

Dual-Protection Structure. The recommended approach creates a comprehensive, dual-protection structure:

• Buyer Protection: The objective credit test ensures that any successor entity meets defined financial criteria. If the successor fails the test, Buyer has consent rights, and Seller has the opportunity to cure through substitute credit support.

• Lender Protection: The lender consent requirement ensures that the lender group independently evaluates and approves any Change of Control, with a focus on the successor's creditworthiness, operational capability, and compliance with the credit agreement's covenants.

Together, these two layers of protection provide comprehensive safeguards for both Buyer and the lender group without subjecting Seller to duplicative subjective consent gates. The objective credit test for Buyer and the lender

PRIVILEGED AND CONFIDENTIAL — ATTORNEY-CLIENT COMMUNICATION
MEMORANDUM
TO: Rachel Muñoz, General Counsel, Calloway-Briggs Renewables Inc. Janet Okafor, SVP, Origination & Commercial, Calloway-Briggs Renewables Inc.
FROM: Brett Callahan, Lead Associate, Energy & Infrastructure, Calderwood & Harkness LLP Patricia Dunmore, Responsible Partner, Energy & Infrastructure, Calderwood & Harkness LLP
DATE: August 5, 2025
RE: Saguaro Flats Solar PPA — Analysis of Meridian DataCore Solutions Inc.'s Change of Control Proposals
Matter No.: 1015-00002
I. Executive Summary
The purpose of this memorandum is to analyze the competing change of control proposals in the Power Purchase Agreement (the "PPA") between Saguaro Flats Solar LLC ("Seller") and Meridian DataCore Solutions Inc. ("Buyer" or "Meridian") for the 150 MWac Saguaro Flats Solar Project located in Pecos County, Texas (the "Project"). This memorandum is intended to provide our analysis, market-practice benchmarking, and recommended negotiating positions to guide the client team's response to Buyer's redline.
On August 1, 2025, Buyer's outside counsel, Hargrove & Linden LLP (lead partner Evelyn Crumveth), delivered a comprehensive redline of the PPA that materially departs from Seller's initial form circulated on July 14, 2025. Among the numerous open issues raised in the redline, the change of control provisions represent one of the most commercially significant points of divergence. As discussed in detail below, the disagreements fall along three critical dimensions:
(1) Consent vs. Notice Mechanism. Buyer seeks to replace Seller's notice-only change of control mechanism with a prior written consent requirement, granting Buyer a subjective veto right over any ownership transition at the Seller level.
(2) Imposition of a Consent Fee. Buyer proposes a $1,500,000 fee payable by Seller to Buyer upon each change of control event for which Buyer grants consent — a provision that is unusual in the renewables PPA market and appears designed as a value extraction mechanism.
(3) Scope and Duration of Buyer's Termination Right. Buyer's redline expands and untethers the termination right from any objective creditworthiness standard, replacing the Minimum Credit Threshold test with a broad subjective consent right coupled with a 60-day termination window.
This memorandum also addresses Seller's reciprocal change of control protections applicable to Buyer — protections that Buyer's redline has deleted entirely — and the critical interaction between the PPA change of control provisions and Tralvendo National Bank, N.A.'s lender-consent requirements under the $108,000,000 construction-to-term loan facility for the Project.
Based on our analysis of market practice, the financial and strategic implications for Calloway-Briggs Renewables Inc. ("CBR") and its equity sponsor Ridgepoint Capital Partners LP ("Ridgepoint"), and the requirements of the Project's lender group, we recommend a compromise framework that balances the parties' legitimate interests:
• Notice plus objective creditworthiness test as the default mechanism: Seller provides 30-day prior written notice, and the change of control proceeds without Buyer consent so long as the successor entity satisfies the Minimum Credit Threshold (tangible net worth ≥ $100,000,000 or investment-grade credit rating).
• No consent fee. The proposed $1,500,000 fee should be rejected in its entirety. If Buyer insists on some compensation mechanism, Seller should consider, at most, reimbursement of Buyer's reasonable, documented out-of-pocket costs capped at $50,000.
• Buyer consent required only if the successor entity fails to satisfy the Minimum Credit Threshold, with a cure mechanism permitting Seller to arrange substitute credit support before any termination right vests.
The target date for resolution of open issues on change of control and availability is August 18, 2025, in order to meet the September 15, 2025 PPA execution target and the October 1, 2025 construction loan closing with Tralvendo National Bank.
II. Background
A. The Transaction
The PPA is structured as a 20-year virtual (financial) power purchase agreement, operating as a contract for differences settling at the ERCOT West Hub node. Under the PPA, Seller will deliver energy from the Project into the ERCOT grid, and the parties will settle financially based on the difference between the contract price and the prevailing ERCOT West Hub real-time settlement price for each settlement interval. The aggregate nominal contract value over the 20-year term is approximately $140,000,000.
The contract price is set at $20.00 per MWh on a fixed basis for years 1 through 5 of the delivery term. Beginning in year 6, the contract price escalates at a rate of 1.50% per annum on a compounding basis through the expiration of the PPA in year 20. This escalation structure was the product of extensive negotiations during the term sheet phase and reflects a compromise between Seller's original proposal of a 2.00% escalator and Buyer's initial counter of a flat, unescalated price.
The Project — the Saguaro Flats Solar Project — is a ground-mounted, single-axis tracking solar photovoltaic generation facility with a nameplate capacity of 195 MWdc and an AC interconnection capacity of 150 MWac. The Project is situated on approximately 1,400 acres of leased ranchland along FM Road 1776 in Pecos County, Texas, within the ERCOT West Load Zone. The site benefits from excellent solar insolation characteristics typical of the Permian Basin region, with an estimated annual P50 net energy production of approximately 350,000 MWh per year, as determined by Heliograph Energy Consulting LLC in its independent energy assessment dated March 2025.
The expected commercial operation date ("COD") is April 1, 2027, with a delivery term commencing on the COD and expiring on March 31, 2047 — a full 20-year period. The PPA includes standard COD milestone provisions, including a guaranteed COD deadline of October 1, 2027, with delay liquidated damages accruing thereafter.
Seller is Saguaro Flats Solar LLC, a Delaware limited liability company formed as a special-purpose entity to own and operate the Project. Saguaro Flats Solar LLC is 100% owned, directly, by Calloway-Briggs Renewables Inc. Buyer is Meridian DataCore Solutions Inc., a Delaware corporation publicly traded on the Nasdaq Stock Market under the ticker symbol "MDCS," with an approximate market capitalization of $8.2 billion as of June 2025.
The PPA is governed by New York law. All disputes arising under or relating to the PPA are to be resolved through binding arbitration administered by the American Arbitration Association ("AAA") in New York, New York, under the AAA's Commercial Arbitration Rules, with a three-arbitrator panel.
B. Ownership Structure and Equity Sponsor
CBR is a Delaware corporation headquartered at 4200 Travis Street, Suite 1800, Houston, Texas 77002. CBR serves as the parent company and development platform for a portfolio of utility-scale renewable energy assets across multiple wholesale electricity markets.
CBR's primary equity sponsor is Ridgepoint Capital Partners LP, a Houston-based infrastructure private equity fund. Ridgepoint currently holds approximately 68% of CBR's outstanding common equity. The remaining 32% is held by CBR's management team, early-stage investors, and employee equity plan participants. Ridgepoint's Managing Partner is Alan Driscoll, who also serves on CBR's board of directors and its investment committee.
CBR has assembled a significant portfolio of operating and development-stage renewable energy assets, totaling approximately 1.8 GW of solar and wind capacity across the ERCOT, SPP, and MISO interconnections. The company was founded in 2011 and has grown both organically and through acquisition. For the fiscal year ended December 31, 2024, CBR reported consolidated revenues of approximately $312 million and consolidated EBITDA of approximately $118 million. CBR maintains a corporate family rating of BBB− from Pinnacle Ratings Group, reflecting its stable cash flow profile and manageable leverage.
Ridgepoint's 68% equity stake in CBR creates a natural and foreseeable likelihood of a future change of control event at the CBR level — and, by extension, at the Saguaro Flats Solar LLC level. Private equity sponsors such as Ridgepoint typically target investment exit horizons of five to seven years, and Ridgepoint's initial investment in CBR dates to 2019. Potential exit paths include a secondary sale of Ridgepoint's equity stake to another infrastructure fund, an initial public offering of CBR, or a strategic merger or acquisition involving CBR. Each of these scenarios could constitute a "Change of Control" under the PPA's definition, depending on how the resulting ownership restructuring is structured.
This context is critical to the change of control negotiation. A restrictive change of control provision in the PPA — particularly one requiring Buyer's subjective consent and imposing a substantial consent fee — could materially impair CBR's and Ridgepoint's ability to realize full exit value for their investment in CBR and the Project. Prospective acquirers in a sale process will closely scrutinize the PPA's change of control provisions, and provisions that introduce counterparty consent risk will result in value discounts or, in some cases, may deter potential bidders entirely. The importance of this issue to CBR's and Ridgepoint's broader strategic interests cannot be overstated.
C. Buyer's Profile
Meridian DataCore Solutions Inc. is a leading hyperscale and co-location data center operator headquartered in Reston, Virginia. Meridian operates 14 data center campuses across the United States, with an aggregate critical IT load capacity of approximately 480 MW. Meridian's facilities serve a diverse customer base of enterprise cloud computing providers, financial services firms, government agencies, and technology companies.
Meridian is publicly traded on the Nasdaq Stock Market under the ticker symbol "MDCS." For the fiscal year ended December 31, 2024, Meridian reported revenues of approximately $2.1 billion and EBITDA of approximately $740 million. Meridian maintains a corporate credit rating of BBB from Pinnacle Ratings Group, reflecting the company's strong cash flow generation, high contract renewal rates, and growing demand for data center capacity driven by artificial intelligence workloads and cloud computing expansion.
The key Buyer personnel involved in the PPA transaction include:
• Thomas Vellinger, Chief Executive Officer
• Priya Chandrasekaran, Chief Financial Officer
• Nathan Gilroy, Senior Vice President, Energy & Sustainability
• Amara Osei, Vice President, Procurement & Contracts
• Victor Langford, Deputy General Counsel
Meridian's interest in the Saguaro Flats PPA is driven by the company's publicly announced commitment to match 100% of its electricity consumption with renewable energy sources by 2030. The Saguaro Flats PPA would represent a significant component of Meridian's renewable energy procurement portfolio and is one of several PPAs Meridian is currently negotiating across ERCOT and PJM.
D. Project Finance Context
The Project's capital structure relies on a senior secured construction-to-term loan facility in the aggregate principal amount of $108,000,000 (the "Credit Facility"). The Credit Facility is being arranged by Tralvendo National Bank, N.A., a national banking association headquartered in Dallas, Texas, which will serve as Administrative Agent and Lead Arranger. The key contact at Tralvendo is Diane Roessler, Director in Tralvendo's Project Finance group.
The Credit Facility will be syndicated among the following lenders, with the following hold amounts:
The total estimated Project cost is approximately $154.3 million, consisting of a $142.5 million fixed-price turnkey EPC contract with Sunbelt Power Construction LLC and approximately $11.8 million in soft costs (development fees, permitting, interconnection, legal, insurance, and contingency). The resulting debt-to-equity ratio is approximately 70/30, which is consistent with market-standard leverage for utility-scale solar projects with contracted revenue streams.
The Credit Facility's interest rates are set at Term SOFR plus 175 basis points during the term loan period and Term SOFR plus 200 basis points during the construction period. The minimum Debt Service Coverage Ratio ("DSCR") covenant is 1.30x, and the Project is projected to achieve a DSCR of approximately 1.35x at P50 production levels and Year 1 contract pricing — providing adequate but not excessive cushion above the covenant threshold.
The lender group is represented by Whitfield Stroval & Cade LLP, a New York law firm specializing in project finance. The lead partner at Whitfield Stroval is Philip Thornton, who has been involved in preliminary discussions regarding the PPA form and lender consent requirements.
Critically for purposes of this memorandum, the draft Tralvendo credit agreement contains several provisions that intersect directly with the PPA's change of control clause:
(a) Prior Lender Consent to Change of Control. The credit agreement requires Seller to obtain the prior written consent of Tralvendo (acting on behalf of the Required Lenders) before consummating any change of control of Seller, whether by transfer of equity interests, merger, consolidation, or otherwise.
(b) PPA Protections Covenant. The credit agreement includes a covenant requiring that the PPA contain customary lender-consent-to-assignment provisions and step-in rights provisions, permitting the lender group (or its designee) to assume the PPA in the event of a Seller default and foreclosure on the Project.
(c) Material Contract Amendments. The credit agreement prohibits Seller from amending, modifying, waiving, or terminating the PPA (or consenting to any amendment, modification, waiver, or termination) without prior lender consent.
These lender requirements establish an independent, parallel consent framework that operates alongside any Buyer consent rights in the PPA itself. As discussed in Section V.D below, the existence of the lender consent framework is relevant to the analysis of whether an additional Buyer consent gate is necessary or appropriate.
III. Seller's Position on Change of Control (As Proposed in First Draft, July 14, 2025)
This section summarizes the change of control provisions as they appear in Seller's initial draft PPA circulated to Buyer's counsel on July 14, 2025. These provisions were drafted by our firm in consultation with CBR's commercial team, with input from Helen Nakamura (Of Counsel, Project Finance) regarding bankability considerations and alignment with the anticipated Tralvendo credit agreement terms.
A. Definition of Change of Control
Under Seller's draft, "Change of Control" is defined as a direct or indirect transfer, assignment, sale, pledge, or other disposition (whether in a single transaction or in a series of related transactions) of more than 50% of the equity interests in Saguaro Flats Solar LLC to any person or entity that is not an Affiliate of Seller. The definition is intentionally structured to capture both direct equity transfers (e.g., a sale of membership interests in Saguaro Flats Solar LLC) and indirect equity transfers (e.g., a sale of a controlling interest in CBR, which would result in an indirect change in the ownership of Saguaro Flats Solar LLC).
The term "Affiliate" is defined by reference to the concept of common control: a person or entity that, directly or indirectly, controls, is controlled by, or is under common control with, the relevant party. "Control" is defined as the direct or indirect ownership of 50% or more of the voting securities or equity interests of an entity, or the power to direct the management and policies of such entity by contract or otherwise.
This definition is deliberately calibrated to exclude from the change of control trigger any intra-group reorganizations, transfers to affiliated entities within the CBR corporate family, and minority stake sales that do not result in a change in the controlling ownership of the Seller entity. It is a standard formulation used in utility-scale renewable energy PPAs and is consistent with the definitions used in the Tralvendo credit agreement.
B. Notice Requirement
Under Seller's draft, Seller is required to provide Buyer with 30 calendar days' prior written notice of any Change of Control. The notice must identify the successor entity and provide reasonable information regarding the successor's financial condition and creditworthiness, including, to the extent available, the successor's most recent audited financial statements, any applicable credit rating from a nationally recognized rating agency, and a certification of the successor's tangible net worth.
Importantly, Seller's draft does not require Buyer's consent to or approval of the Change of Control. The notice mechanism is informational in nature, designed to ensure that Buyer has adequate advance knowledge of any ownership transition and sufficient information to evaluate the creditworthiness of the successor entity. This approach reflects the view — widely shared in the utility-scale renewable energy market — that a notice-based mechanism, coupled with an objective credit test (discussed below), provides Buyer with meaningful protections while preserving Seller's transactional flexibility.
C. Buyer Termination Right
Seller's draft does not grant Buyer a general right to terminate the PPA upon a Change of Control. Rather, Buyer's termination right is narrowly tailored and arises only in a specific circumstance: where the successor entity fails to meet the "Minimum Credit Threshold."
The Minimum Credit Threshold is defined as satisfaction of at least one of the following two criteria:
(i) Tangible Net Worth Test: The successor entity has a tangible net worth ("TNW") of not less than $100,000,000, as demonstrated by its most recent audited financial statements or, if audited financial statements are not available, a certification from the successor's chief financial officer; or
(ii) Credit Rating Test: The successor entity maintains an investment-grade credit rating of BBB− or higher from a nationally recognized rating agency, such as Pinnacle Ratings Group, S&P Global Ratings, Moody's Investors Service, or Fitch Ratings.
If the successor entity meets the Minimum Credit Threshold, the PPA continues in full force and effect following the Change of Control, and Buyer has no termination right. The PPA simply flows through to the successor entity (or to the reconstituted Seller entity, as applicable) without interruption.
If, however, the successor entity fails to satisfy either prong of the Minimum Credit Threshold, Buyer may elect to terminate the PPA by delivering written notice of termination within 30 days of receiving Seller's Change of Control notice. This termination right is designed to protect Buyer against a scenario in which a Change of Control results in the Seller entity being controlled by a financially weak or uncreditworthy successor — a scenario that could impair Buyer's confidence in the long-term performance and financial stability of its PPA counterparty.
The $100,000,000 TNW threshold was set at a level intended to be meaningful but not exclusionary. It reflects the financial scale necessary to support the obligations of a 150 MWac solar project with annual revenues of approximately $7,000,000, while recognizing that many legitimate infrastructure investors and asset owners would readily satisfy this threshold. The investment-grade credit rating alternative provides flexibility for entities that may not have $100 million in tangible net worth but are nonetheless creditworthy by virtue of their overall financial profile and market standing.
D. No Consent Fee
Seller's draft does not include any consent fee, transfer fee, change of control fee, or similar monetary payment payable by Seller to Buyer in connection with a Change of Control. The omission is intentional and reflects CBR's and our firm's view that such fees are not market standard in utility-scale renewable energy PPAs, are not justified by any identifiable administrative cost or economic harm to Buyer, and would create perverse economic incentives that discourage the maintenance of the PPA through ownership transitions.
E. Rationale. The Seller's change of control framework is grounded in the following principles:
Market Standard. The notice-plus-objective-credit-test approach reflects the prevailing market standard in utility-scale solar PPAs, particularly in corporate offtake transactions where the buyer is a creditworthy corporate entity (as opposed to a regulated utility). Our review of recent PPA precedents across ERCOT, PJM, and CAISO markets confirms that the clear trend in corporate renewable energy procurement is toward notice-based mechanisms with objective credit thresholds, rather than subjective consent-based regimes.
Preservation of Seller Flexibility. The 20-year PPA term virtually guarantees that one or more ownership transitions will occur during the life of the contract. CBR's equity sponsor, Ridgepoint, is a private equity fund with a finite investment horizon. Future ownership changes — whether through a Ridgepoint exit, a CBR corporate restructuring, or a Project-level asset sale — are foreseeable and should not be subject to Buyer's subjective approval. A notice-based mechanism ensures that Seller and its equity sponsors retain the ability to execute ownership transitions efficiently, subject to the important safeguard of the Minimum Credit Threshold.
Bankability. The Seller's proposed change of control framework is consistent with the requirements of the Tralvendo credit agreement and the expectations of the Project's lender group. Lenders focus on the creditworthiness of the successor entity and the continuity of the PPA revenue stream, both of which are addressed by the Minimum Credit Threshold test. An overly restrictive Buyer consent right could, paradoxically, create bankability concerns by introducing execution risk into future ownership transitions that might otherwise proceed smoothly.
Proportionality. The Seller's framework is proportionate to the risk that the change of control provision is designed to address — namely, the risk that a Change of Control results in a financially inadequate successor controlling the Seller entity and the Project. The Minimum Credit Threshold directly targets this risk. A subjective consent right, by contrast, gives Buyer leverage that extends well beyond legitimate credit protection concerns and into the realm of commercial opportunism.
IV. Buyer's Position on Change of Control (As Proposed in Buyer's Redline, August 1, 2025)
Buyer's redline, delivered by Evelyn Crumveth of Hargrove & Linden LLP on August 1, 2025, proposes fundamental changes to the change of control framework. This section summarizes and analyzes each element of Buyer's counter-proposal.
A. Consent Requirement
Buyer's redline replaces Seller's notice-only mechanism with a requirement that any Change of Control of Seller (using the same definition — transfer of more than 50% of direct or indirect equity interests in Saguaro Flats Solar LLC to a non-Affiliate of Seller) requires Buyer's prior written consent.
The redline states that Buyer's consent shall "not to be unreasonably withheld, conditioned, or delayed." However, the redline provides no enumeration, definition, or guidance as to what constitutes "reasonable" or "unreasonable" withholding of consent. There are no objective criteria, no safe harbors, and no examples of circumstances in which withholding would be deemed per se unreasonable. The standard is left entirely open-ended, giving Buyer significant practical discretion to condition, delay, or withhold consent based on considerations that may extend well beyond the creditworthiness of the successor entity — including, potentially, strategic or competitive considerations, dissatisfaction with unrelated aspects of the PPA relationship, or a desire to extract concessions in connection with the consent process.
The practical effect of this consent mechanism is to give Buyer a subjective veto right — qualified only by a reasonableness standard that, in the event of a dispute, would need to be adjudicated through the PPA's dispute resolution process. As discussed in Section V.E below, this creates meaningful litigation and arbitration risk that could delay or frustrate a time-sensitive sale transaction.
B. Consent Fee
In addition to the consent requirement, Buyer proposes a consent fee of $1,500,000, payable by Seller to Buyer upon each Change of Control event for which Buyer grants consent. The fee is structured as a condition to the effectiveness of Buyer's consent — meaning that even if Buyer affirmatively consents to the Change of Control, the consent does not become effective until Seller pays the $1,500,000 fee.
No justification or rationale for the $1,500,000 fee amount is provided in the redline or in any accompanying correspondence from Hargrove & Linden. The fee does not appear to be tied to any identifiable cost that Buyer would incur in connection with evaluating or processing a Change of Control — such as legal fees, credit analysis costs, or administrative expenses. Rather, the fee appears to function as a value extraction mechanism, designed to capture a portion of the economic value inherent in the PPA each time an ownership transition occurs at the Seller level.
The fee is payable on a per-event basis, meaning that multiple Change of Control events during the 20-year PPA term would result in multiple $1,500,000 payments. Given the likelihood of at least two ownership transitions during the PPA term (see Section V.C below), the cumulative fee exposure could reach $3,000,000 or more.
C. Termination Right
Under Buyer's redline, if Buyer does not consent to a proposed Change of Control, Buyer may terminate the PPA by delivering written notice of termination within 60 calendar days of receiving Seller's Change of Control notice. This represents a materially broader and more extended termination right than what Seller proposed in its initial draft.
The breadth of this termination right is notable in two respects. First, the termination right is not tethered to any objective creditworthiness threshold. Under Seller's draft, Buyer's termination right arises only if the successor fails the Minimum Credit Threshold — a bright-line, objectively verifiable standard. Under Buyer's redline, the termination right arises whenever Buyer withholds consent, regardless of the successor's financial profile. Buyer could, in theory, withhold consent (and thereby trigger the termination right) even if the successor is a well-capitalized, investment-grade entity that exceeds the Minimum Credit Threshold by a wide margin.
Second, the 60-day termination window proposed by Buyer is twice the length of the 30-day window in Seller's draft. A 60-day window creates an extended period of uncertainty during which the PPA's continued existence is in question — uncertainty that could have cascading effects on the sale process, financing arrangements, and the Project's operations. During this 60-day period, prospective acquirers would face significant execution risk, which would likely be reflected in reduced bid prices or additional contractual protections demanded by the acquirer.
D. Removal of Minimum Credit Threshold
Perhaps the most consequential element of Buyer's redline is the complete deletion of the Minimum Credit Threshold test. Seller's draft tied Buyer's termination right to the failure of the successor entity to meet an objective, verifiable financial standard (TNW ≥ $100,000,000 or investment-grade credit rating). Buyer's redline removes this standard entirely and replaces it with the subjective consent mechanism described above.
The practical effect of this deletion is significant. Under Seller's draft, a Change of Control involving a successor that meets the Minimum Credit Threshold is, in essence, a non-event from the PPA's perspective — the PPA continues without interruption, and Buyer has no leverage to extract concessions, fees, or other benefits. Under Buyer's redline, every Change of Control — regardless of the successor's financial strength — becomes a consent event that gives Buyer leverage, creates execution risk, and triggers the $1,500,000 fee.
This shift from an objective to a subjective standard is the core substantive disagreement between the parties on the change of control issue, and it is the issue on which we recommend focusing the negotiation.
V. Comparative Analysis
A. Market Practice in Utility-Scale Solar PPAs
Industry practice on change of control provisions in utility-scale solar PPAs varies by market segment, counterparty type, and transaction vintage, but the clear trend — particularly in corporate offtake PPAs involving creditworthy corporate buyers — is toward notice-plus-objective-credit-test models rather than subjective consent-based regimes.
Our review of approximately 25 recent precedent transactions across the ERCOT, PJM, CAISO, and SPP markets (including both CBR's own portfolio precedents and precedents obtained through industry contacts and public filings) reveals the following patterns:
• Notice-Only with Credit Test: Approximately 16 of 25 precedent PPAs (64%) use a notice-based mechanism with an objective creditworthiness test (typically tangible net worth, credit rating, or both), with Buyer's consent required only if the successor fails the credit test. This is the model adopted in Seller's initial draft.
• Consent-Based (Qualified by Reasonableness): Approximately 6 of 25 precedent PPAs (24%) require Buyer consent, qualified by a "not to be unreasonably withheld" standard, but without a consent fee. Several of these PPAs include an enumeration of factors that constitute "reasonable" withholding, providing greater clarity than Buyer's open-ended formulation.
• Consent-Based (Unqualified or Sole Discretion): Approximately 3 of 25 precedent PPAs (12%) give Buyer an unqualified consent right or a consent right exercisable in Buyer's "sole discretion." These are predominantly older-vintage PPAs (pre-2020) involving utility buyers subject to regulatory oversight, where the change of control provision was driven by regulatory considerations rather than commercial negotiation.
Notably, consent-based change of control provisions are more common in PPAs with utility buyers subject to state public utility commission oversight, where regulatory frameworks may require the utility to demonstrate to its regulator that the PPA counterparty is a responsible and creditworthy entity. In corporate offtake PPAs — such as the Meridian PPA — the regulatory rationale for consent-based provisions is absent, and the prevailing market practice reflects a recognition that objective credit tests provide adequate protection without the transactional friction and execution risk associated with subjective consent rights.
The $1,500,000 consent fee proposed by Buyer is unusual in the renewables PPA market. Of the 25 precedent transactions we reviewed, none included a consent fee or transfer fee payable by Seller to Buyer in connection with a change of control. While consent fees are sometimes seen in commercial real estate leases and certain types of franchise agreements, they are not an established feature of the renewable energy PPA market, and we are not aware of any identifiable transaction cost or administrative burden that would justify a fee of this magnitude.
Finally, the 60-day termination window proposed by Buyer is longer than is typical even in consent-based regimes. Among the precedent PPAs that include a Buyer termination right upon change of control, the more common window is 30 days from the date of Buyer's receipt of the Change of Control notice or, in some cases, 30 days from the date Buyer receives all reasonably requested information regarding the successor entity.
B. Financial Impact of Consent Fee
The financial impact of the proposed $1,500,000 consent fee merits careful quantitative analysis.
At P50 production levels of 350,000 MWh per year and a blended average contract price of approximately $20.00/MWh (reflecting the weighted average of the fixed and escalated price periods), the PPA is projected to generate annual revenues to Seller of approximately $7,000,000 per year. On this basis, the $1,500,000 consent fee represents approximately 21.4% of a single year's estimated PPA revenue — a substantial proportion by any measure.
Over the 20-year PPA term, if two or more ownership transitions occur at the Seller level — a realistic scenario given Ridgepoint's private equity investment horizon and the likelihood of subsequent ownership changes by any successor — the cumulative consent fee exposure could reach $3,000,000 or more. At a 7.0% discount rate, the present value of two consent fee payments occurring in years 5 and 12 of the PPA term (illustrative timing assumptions) would be approximately $2,085,000, representing a meaningful reduction in the net present value of the PPA to Seller.
Moreover, the consent fee creates a perverse economic incentive: it effectively penalizes Seller for maintaining the PPA in force through ownership transitions, rather than terminating the PPA prior to a change of control and leaving Buyer without a contracted renewable energy source. From a policy perspective, a rational PPA framework should incentivize continuity and stability, not penalize it.
The fee also has implications for the Project's economics at the project finance level. To the extent the consent fee reduces cash available for debt service in the year in which it is payable, it could stress the Project's DSCR covenant compliance, particularly given the relatively thin projected cushion of approximately 1.35x at P50 against a 1.30x minimum covenant. While this would depend on the timing of any Change of Control relative to the Project's debt amortization schedule, it represents an additional risk factor that the lender group would likely flag in its review of the PPA.
C. Impact on Ridgepoint Capital Partners LP Exit
The change of control provisions have direct and material implications for Ridgepoint's ability to execute an exit from its 68% equity position in CBR during the PPA term.
Ridgepoint holds 68% of CBR's common equity and, as a private equity sponsor, will seek to realize a return on its investment through a liquidity event during the PPA term. Ridgepoint's initial investment in CBR dates to 2019, placing the fund within or approaching its targeted hold period of five to seven years. Depending on market conditions and Ridgepoint's fund-level liquidity requirements, a Ridgepoint exit transaction could occur as early as 2026 or 2027 — contemporaneous with or shortly following the Project's COD.
The potential exit paths available to Ridgepoint include:
(a) Secondary Sale: A sale of Ridgepoint's 68% equity stake in CBR (or a controlling portion thereof) to another infrastructure-focused private equity fund, pension fund, or sovereign wealth fund. This is the most common exit path for infrastructure PE investments and would likely constitute a Change of Control under the PPA definition.
(b) Initial Public Offering: An IPO of CBR, in which Ridgepoint would sell down its equity stake through a public offering process. Depending on the structure of the IPO and the resulting post-IPO ownership, this could constitute a Change of Control if Ridgepoint's post-IPO stake falls below 50% and no single Affiliate entity acquires a controlling position.
(c) Strategic Merger or Acquisition: A sale of CBR (or its assets, including Saguaro Flats Solar LLC) to a strategic buyer such as a utility, independent power producer, or larger renewable energy platform. This would almost certainly constitute a Change of Control.
Under a consent-based regime, each of these exit paths would require Meridian's prior written consent, introducing a significant element of execution risk into the sale process. Prospective acquirers — whether financial sponsors, strategic buyers, or public market investors — will conduct thorough due diligence on the PPA and will price the change of control risk accordingly. If PPA continuation is subject to Buyer's subjective consent, acquirers will either discount their bids to reflect the risk that Buyer withholds consent (or extracts concessions as a condition to consent), or they will require CBR to obtain Buyer consent as a condition precedent to closing, potentially extending transaction timelines and creating additional points of negotiation.
The $1,500,000 consent fee compounds this issue by directly reducing exit proceeds. In a competitive auction or bilateral sale process, the consent fee represents a transaction cost that will be borne by either Seller or the acquirer — in either case, it reduces the aggregate value available to the parties and creates friction that serves no legitimate commercial purpose.
By contrast, an objective credit threshold approach provides deal certainty to prospective acquirers. So long as the successor entity meets the Minimum Credit Threshold — a standard that any credible infrastructure investor, strategic buyer, or post-IPO public company would readily satisfy — the PPA continues in full force and effect without interruption, without consent, and without fees. This certainty is a valuable feature of the PPA from a marketability and exit-planning perspective.
D. Lender Considerations
The interaction between the PPA's change of control provisions and the Tralvendo credit agreement is a critical dimension of this analysis.
As noted in Section II.D above, the Tralvendo credit agreement requires Seller to obtain the prior written consent of Tralvendo (acting on behalf of the Required Lenders) before consummating any Change of Control of Seller. This lender consent requirement operates independently of any Buyer consent right in the PPA and reflects the lenders' interest in ensuring the ongoing creditworthiness and operational capability of the entity that controls the Project — the primary collateral securing the $108,000,000 loan facility.
If Buyer's consent-based proposal is accepted, the result would be a dual consent gate structure in which any Change of Control would require the separate consent of both (i) Buyer and (ii) the lender group. This dual-gate structure increases the complexity, timeline, and execution risk associated with any future ownership transition. A prospective acquirer would need to navigate two independent consent processes, each with its own timeline, conditions, and potential for delay or objection. In a time-sensitive transaction — such as a competitive auction with defined bid deadlines — the burden of obtaining dual consents could be prohibitive.
It is important to note, however, that lenders and Buyer have different — and in some respects aligned — interests with respect to the change of control provision. Lenders are primarily concerned with the creditworthiness of the Seller entity and the continuity of the PPA revenue stream, which is the primary source of cash flow supporting debt service. An objective credit threshold test in the PPA addresses this concern directly by ensuring that any successor entity meets defined financial criteria. Lenders would likely support an objective credit test approach, as it provides a clear and predictable framework that facilitates — rather than impedes — ownership transitions, while maintaining minimum credit standards.
Additionally, the lender group's independent protections provide a significant layer of security that partially mitigates the need for an overly restrictive Buyer change of control provision. The Lender Consent Agreement (to be attached to the PPA as Exhibit F) provides the lender group with:
(a) Step-in rights permitting the lenders (or their designee, including a foreclosure purchaser) to assume the PPA and cure any Seller defaults in the event of a foreclosure on the Project;
(b) Cure rights giving the lenders a defined period (typically 60 to 90 days) to cure any Seller default under the PPA before Buyer may exercise termination rights; and
(c) New PPA rights requiring Buyer to enter into a new PPA on substantially identical terms with any foreclosure purchaser or lender designee, subject to certain conditions.
These protections ensure that even in a worst-case scenario — Seller default and lender foreclosure — the PPA revenue stream is preserved and the Project continues to operate for Buyer's benefit. The existence of these independent lender protections reduces the marginal benefit of an additional Buyer consent gate on change of control.
E. Reasonableness Standard — Litigation Risk
While the "not to be unreasonably withheld, conditioned, or delayed" standard is a familiar and facially balanced contractual formulation, its application in the change of control context introduces meaningful ambiguity and potential for disputes.
The core problem is that "reasonableness" in the context of a consent right is an inherently subjective and fact-intensive determination. Buyer may view its withholding of consent as reasonable based on a range of considerations — the successor's creditworthiness, operational track record, industry reputation, competitive relationships, or even broader strategic concerns about the direction of the Project under new ownership. Seller, on the other hand, may view the same withholding as pretextual or motivated by considerations unrelated to the successor's ability to perform the PPA obligations.
If Buyer withholds consent and Seller believes the withholding is unreasonable, the dispute would need to be resolved through the PPA's dispute resolution mechanism. Under the PPA's dispute resolution clause, the parties are first required to engage in good-faith negotiations for a period of 30 days. If the negotiations fail to resolve the dispute, either party may initiate binding arbitration before the AAA in New York, New York, under the AAA's Commercial Arbitration Rules, with a panel of three arbitrators.
While AAA arbitration is generally a well-functioning dispute resolution mechanism, it is not instantaneous. From the filing of a demand for arbitration through the selection of arbitrators, briefing, hearing, and issuance of an award, the process typically takes nine to eighteen months, depending on the complexity of the dispute and the arbitrators' availability. During this period, the Change of Control transaction would be in limbo — the PPA's status would be uncertain, the acquirer's rights would be unclear, and the lender group would likely be unable to consent to the transaction until the arbitration is resolved.
In a time-sensitive sale process — which most PE exit transactions are — a nine-to-eighteen-month arbitration timeline could be fatal to the transaction. Prospective acquirers will not wait indefinitely for a dispute with a PPA counterparty to be resolved, and competing investment opportunities will not remain available. The risk of delay and uncertainty alone is sufficient reason to prefer an objective credit test over a subjective consent standard.
An objective credit test eliminates this dispute risk entirely by providing a bright-line, self-executing standard. The question of whether the successor meets the Minimum Credit Threshold can be determined definitively by reference to audited financial statements and credit rating reports — verifiable, objective data that leave no room for subjective interpretation or dispute. This is a significant structural advantage of the Seller's proposed approach.
VI. Reciprocal Buyer Change of Control Protections
A. Seller's Proposal for Buyer Change of Control
In Seller's initial draft PPA dated July 14, 2025, Seller included a reciprocal change of control provision applicable to Buyer. Under this provision, if Meridian DataCore Solutions Inc. undergoes a Change of Control (using the same definitional framework — transfer of more than 50% of direct or indirect equity interests to a non-Affiliate), and if the successor entity's credit rating from Pinnacle Ratings Group (or an equivalent nationally recognized rating agency) falls below BBB−, Seller may demand that the successor provide additional credit support in the form of an irrevocable standby letter of credit in an amount equal to 12 months' estimated PPA payments, approximately $7,000,000.
If the successor entity fails to deliver the required letter of credit within 30 calendar days of Seller's written demand, Seller may terminate the PPA by delivering written notice of termination to Buyer. This termination right is intended to protect Seller against the risk that a Buyer Change of Control results in Seller being contractually bound to a counterparty that lacks the financial capacity to honor its settlement obligations under the PPA over the remaining term.
B. Buyer's Redline Response
Buyer's redline dated August 1, 2025 deleted the reciprocal Buyer change of control provision in its entirety. The redline does not include any replacement language, alternative formulation, or modified version of the reciprocal provision. The deletion is uncommented in the redline, and no explanation or justification was provided in Hargrove & Linden's cover correspondence.
Based on our preliminary discussions with Victor Langford (Buyer's Deputy General Counsel), Buyer's position appears to be that Meridian's current investment-grade credit rating (BBB from Pinnacle Ratings Group) and substantial market capitalization (approximately $8.2 billion) make a reciprocal change of control provision unnecessary. Buyer's view, as we understand it, is that Meridian's creditworthiness is self-evident and that a reciprocal LC demand right imposes an unwarranted burden on any successor to Meridian.
C. Analysis. While Meridian's current credit profile is undeniably strong, the relevant analytical framework must account for the 20-year PPA term. A credit rating of BBB and a market capitalization of $8.2 billion reflect Meridian's financial condition as of mid-2025. Over the next two decades, economic conditions, industry dynamics, competitive pressures, and management quality could change materially. The reciprocal change of control provision is not premised on a judgment that Meridian is currently uncreditworthy — it is premised on the recognition that, over a 20-year period, credit conditions may deteriorate, and Seller needs contractual protections to address that contingency.
The data center industry, while currently experiencing robust demand driven by cloud computing, artificial intelligence, and digital infrastructure expansion, faces evolving technology and competitive risks that could impair the creditworthiness of individual operators over a multi-decade horizon. These risks include:
• Technological disruption in computing architectures that could reduce demand for traditional data center space;
• Increased competition from hyperscale cloud providers (such as Ridgeway Industries, Crestline Systems, and Aldermere Technologies) that may choose to build owned capacity rather than lease from co-location operators;
• Regulatory and environmental risks, including carbon pricing, water usage restrictions, and energy efficiency mandates that could increase operating costs;
• Interest rate and capital markets risks that could impair the ability of capital-intensive data center operators to refinance existing indebtedness.
Reciprocal change of control protections are standard in long-term PPAs and are essential for bankability. The Tralvendo lender group relies on the creditworthiness of both PPA counterparties — Seller and Buyer — to support the revenue projections and cash flow models underpinning the $108,000,000 loan facility. The PPA revenue stream is only as reliable as the Buyer's ability and willingness to honor its financial settlement obligations. If a Buyer Change of Control results in a successor with a sub-investment-grade credit profile, the lender group's credit analysis and underwriting assumptions would be undermined, potentially triggering adverse consequences under the credit agreement (including, potentially, a mandatory prepayment or covenant default).
We strongly recommend insisting on retention of the reciprocal Buyer change of control provision, including the $7,000,000 LC demand right. This is not a provision on which Seller should make significant concessions, as it directly affects the bankability of the PPA and the lender group's willingness to close the Credit Facility on the anticipated terms.
It should be noted that Seller has separately requested a Buyer corporate guaranty from Meridian capped at $14,000,000 (equal to approximately two years of estimated PPA revenues). This guaranty, which is the subject of separate negotiations, is intended to provide general credit support for Buyer's PPA obligations throughout the term. The change of control LC demand right is an additional, situation-specific credit protection triggered only in the event of a Buyer Change of Control coupled with credit deterioration — it is not a substitute for the corporate guaranty, and both provisions serve distinct and complementary protective functions.
VII. Recommended Compromise Position
Based on the foregoing analysis, we recommend the following compromise framework for the change of control provisions. This framework is designed to address Buyer's legitimate interest in counterparty credit quality while preserving Seller's (and Ridgepoint's) need for transactional flexibility and exit optionality.
A. Core Framework
We recommend retaining a notice-based mechanism as the default, with Buyer consent required only in limited, objectively defined circumstances. The specific mechanics would be as follows:
Notice Requirement. Seller provides Buyer with 30 calendar days' prior written notice of any Change of Control. The notice must identify the successor entity and include reasonable information regarding the successor's financial condition and creditworthiness, including (i) the successor's most recent audited financial statements (or, if unavailable, unaudited financial statements certified by the successor's chief financial officer), (ii) any applicable credit rating from a nationally recognized rating agency, and (iii) a certification of the successor's tangible net worth.
Objective Credit Test. If the successor entity satisfies the Minimum Credit Threshold — defined as (a) tangible net worth of not less than $100,000,000, or (b) an investment-grade credit rating of BBB− or higher from Pinnacle Ratings Group or an equivalent nationally recognized rating agency — the Change of Control proceeds without Buyer consent, and the PPA continues in full force and effect.
Buyer Consent as a Fallback. If the successor entity fails to satisfy the Minimum Credit Threshold, Buyer's prior written consent is required. In this scenario, Buyer's consent is not to be unreasonably withheld, conditioned, or delayed, and the PPA should include an enumeration of factors that Buyer may reasonably consider in evaluating the successor, including (i) the successor's financial condition and operating history, (ii) the successor's experience in owning and operating renewable energy assets, and (iii) any pending litigation, regulatory proceedings, or bankruptcy filings involving the successor.
Substitute Credit Support Option. If the successor fails the Minimum Credit Threshold and Buyer's consent is required, Seller may alternatively propose substitute credit support to address Buyer's concerns. This substitute credit support could include an irrevocable standby letter of credit from a creditworthy financial institution, a corporate guaranty from a creditworthy parent entity, or a cash collateral deposit, in each case in an amount and on terms reasonably acceptable to Buyer. If Seller provides such substitute credit support, Buyer's consent is deemed given and the PPA continues in full force and effect.
This framework preserves the bright-line, self-executing character of Seller's original proposal for the vast majority of Change of Control scenarios — those involving creditworthy successors — while introducing a reasonable consent gate only for the narrow circumstance in which the successor fails to meet defined financial criteria. The fallback consent mechanism, supplemented by the substitute credit support option, provides Buyer with meaningful protection in the event of a Change of Control to a sub-threshold successor, while ensuring that Seller retains a pathway to consummate the transaction by addressing Buyer's credit concerns directly.
B. No Consent Fee
We recommend rejecting the $1,500,000 consent fee in its entirety. As discussed in Section V.B above, the fee is not market standard in the renewable energy PPA market, is not tied to any identifiable cost or economic harm to Buyer, and creates perverse economic incentives that penalize legitimate ownership transitions.
If Buyer insists on some form of monetary compensation in connection with the consent process, the most that Seller should consider offering is reimbursement of Buyer's reasonable, documented out-of-pocket costs actually incurred in evaluating the successor entity, including legal fees and credit analysis costs. Any such reimbursement should be subject to a hard cap of $50,000 per Change of Control event. This amount is sufficient to cover the reasonable costs of a legal review and financial analysis of the successor entity, without creating the perverse incentives associated with a $1,500,000 consent fee.
The justification for rejecting the consent fee should be presented to Buyer's counsel firmly but constructively. We recommend framing the rejection in terms of market practice and proportionality, emphasizing that: (i) consent fees are not a feature of the utility-scale solar PPA market and would set an adverse precedent for both parties' future transactions; (ii) the fee is disproportionate to any cost or burden that Buyer would incur in connection with a Change of Control; and (iii) the fee creates economic incentives that are misaligned with the parties' shared interest in the long-term continuity and stability of the PPA.
C. Termination Right
Under the recommended compromise framework, Buyer's termination right would be structured as follows:
Trigger. The termination right arises only if (i) the successor entity fails to satisfy the Minimum Credit Threshold, (ii) Buyer's consent is required as a result, and (iii) Buyer withholds consent, with such withholding determined (through the dispute resolution process, if necessary) to be reasonable.
Termination Window. If the above conditions are met, Buyer may terminate the PPA by delivering written notice of termination within 30 calendar days of the date on which Buyer's withholding of consent is determined to be final. We recommend the 30-day window proposed in Seller's original draft, rather than the 60-day window proposed by Buyer. A 30-day window is consistent with market practice and provides Buyer with adequate time to assess its options while limiting the period of uncertainty for Seller and the sale transaction.
Cure Mechanism. Critically, we recommend that the termination right be subject to a cure mechanism. Specifically, Seller should have a period of 60 calendar days from the date of Buyer's delivery of its notice of intent to terminate within which to arrange for the successor entity to provide substitute credit support meeting the Minimum Credit Threshold (e.g., an irrevocable standby LC, a corporate guaranty from a creditworthy parent, or a cash deposit). If Seller successfully provides such substitute credit support within the 60-day cure period, Buyer's termination right lapses, and the PPA continues in full force and effect.
The cure mechanism is an essential feature of the compromise framework. It ensures that Buyer's termination right is truly a last resort — available only when the successor fails the credit test, Buyer reasonably withholds consent, and Seller is unable to arrange substitute credit support to address Buyer's concerns within a reasonable period. This structure maximizes the likelihood that the PPA survives any Change of Control event, which serves the interests of both parties (and of the lender group).
D. Reciprocal Buyer Change of Control
We recommend maintaining the reciprocal Buyer change of control provision as drafted in Seller's initial form, without modification. The specific mechanics are as follows:
(i) If Buyer (Meridian DataCore Solutions Inc.) undergoes a Change of Control and the successor entity's credit rating from Pinnacle Ratings Group (or an equivalent nationally recognized rating agency) falls below BBB−, Seller may demand that the successor provide an irrevocable standby letter of credit in the amount of $7,000,000 (equal to approximately 12 months' estimated PPA payments).
(ii) The successor entity must deliver the LC within 30 calendar days of Seller's written demand.
(iii) If the successor entity fails to deliver the LC within the 30-day period, Seller may terminate the PPA by delivering written notice of termination.
As discussed in Section VI.C above, this provision is essential to the bankability of the PPA and to the lender group's credit analysis. We recommend presenting this as a non-negotiable item, framed as a bankability requirement driven by the Tralvendo lender group's underwriting standards rather than as a Seller preference. This framing may reduce Buyer resistance, as it shifts the justification from Seller's commercial interests to the lender group's institutional requirements.
E. Lender Coordination
The PPA's change of control provision should be expressly coordinated with the lender consent requirements under the Tralvendo credit agreement. Specifically, we recommend the following provisions:
Cross-Reference. The PPA should include a clear cross-reference stating that, in addition to any consent or notice requirements under the PPA itself, Seller's obligations under its project finance credit agreement may require Seller to obtain the prior written consent of its lenders before consummating any Change of Control.
Seller Covenant. The PPA should include a covenant by Seller that it will not consummate a Change of Control without first obtaining all required consents under its project finance credit agreement and the Lender Consent Agreement (attached as Exhibit F to the PPA). This covenant provides Buyer with contractual assurance that the lender consent process has been completed, adding an additional layer of protection without requiring Buyer to independently verify Seller's compliance with its lending arrangements.
Dual-Protection Structure. The recommended approach creates a comprehensive, dual-protection structure:
• Buyer Protection: The objective credit test ensures that any successor entity meets defined financial criteria. If the successor fails the test, Buyer has consent rights, and Seller has the opportunity to cure through substitute credit support.
• Lender Protection: The lender consent requirement ensures that the lender group independently evaluates and approves any Change of Control, with a focus on the successor's creditworthiness, operational capability, and compliance with the credit agreement's covenants.
Together, these two layers of protection provide comprehensive safeguards for both Buyer and the lender group without subjecting Seller to duplicative subjective consent gates. The objective credit test for Buyer and the lender

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