1015-00002 · Calloway-Briggs Renewables Inc · Correspondence

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CONFIDENTIAL

CALDERWOOD & HARKNESS LLP Attorneys at Law

1100 Louisiana Street, Suite 4500 Houston, Texas 77002

Patricia Dunmore Partner, Energy & Infrastructure Tel: (713) 554-8200

Fax: (713) 554-8201

pdunmore@calderwoodharkness.com

August 11, 2025

VIA ELECTRONIC MAIL AND HAND DELIVERY

Evelyn Crumveth, Esq. Hargrove & Linden LLP 300 Congress Avenue, Suite 2200 Austin, Texas 78701

Re: Power Purchase Agreement — Saguaro Flats Solar LLC and Meridian DataCore Solutions Inc. Saguaro Flats Solar Project — 150 MWac Solar Photovoltaic Facility, Pecos County, Texas Calderwood & Harkness Matter No. 1015-00002

Dear Evelyn:

Transmittal of Second Draft PPA

On behalf of our client, Calloway-Briggs Renewables Inc. ("CBR"), and its wholly owned project subsidiary, Saguaro Flats Solar LLC ("Seller"), we are pleased to transmit the following enclosed documents for the review and consideration of Meridian DataCore Solutions Inc. ("Buyer") and its counsel:

1. Seller's Revised Draft Power Purchase Agreement (Second Draft), dated August 11, 2025 (the "Second Draft"), between Saguaro Flats Solar LLC, as Seller, and Meridian DataCore Solutions Inc., as Buyer; and

2. Redline Comparison of the Second Draft against Seller's initial form Power Purchase Agreement circulated on July 14, 2025 (the "First Draft"), showing all changes made by Seller in connection with this revision.

The Second Draft reflects Seller's responses to the Buyer's redline of the First Draft, which we received from Hargrove & Linden on August 1, 2025. We have carefully reviewed and considered each of the revisions and comments set forth in Buyer's redline and have endeavored to address the principal areas of concern in a manner that balances the commercial expectations of both parties while preserving the fundamental risk allocation inherent in the transaction.

As you are aware, the PPA remains structured as a twenty (20)-year virtual (financial) power purchase agreement, operating as a contract for differences settling against the ERCOT West Hub locational price. The expected Commercial Operation Date for the Saguaro Flats Solar Project is April 1, 2027. None of the fundamental structural elements of the PPA have been altered in the Second Draft, and the transaction continues to be organized on the terms discussed between the parties' respective business teams over the course of the past several months.

This letter is intended to provide an overview of the key movements reflected in the Second Draft, to identify the remaining open items that will require further discussion between the parties, and to propose next steps for advancing the PPA toward execution. We address each of these topics in turn below.

Summary of Key Movements

I. Availability Guarantee (Article VIII)

The availability guarantee threshold was — and remains — a principal area of divergence between the parties. We appreciate Buyer's focus on ensuring robust availability commitments from the Seller, and we have given careful consideration to Buyer's proposed revision in this regard.

In the First Draft, Seller proposed a guaranteed availability of not less than ninety-five percent (≥ 95.0%) on a rolling twelve (12)-month basis. Buyer's redline revised this threshold upward to not less than ninety-seven percent (≥ 97.0%) on the same rolling twelve (12)-month measurement basis.

In the Second Draft, Seller has moved to a guaranteed availability of not less than ninety-six percent (≥ 96.0%) on a rolling twelve (12)-month basis. This revised position represents a meaningful compromise on the part of Seller and reflects market benchmarks for utility-scale solar photovoltaic power purchase agreement transactions of comparable size and technology in the ERCOT market. We believe that a 96.0% availability guarantee appropriately balances the Buyer's expectation of high system availability against the practical operational realities of a 150 MWac solar PV facility, including the effects of routine equipment maintenance, inverter cycling, and other operational considerations that are standard in projects of this type.

The measurement methodology for the availability guarantee remains unchanged from the First Draft: Available Hours divided by Period Hours, multiplied by one hundred (Available Hours ÷ Period Hours × 100), expressed as a percentage. The calculation continues to exclude (i) Force Majeure hours, (ii) curtailment hours (whether resulting from economic or reliability curtailment by the grid operator), and (iii) scheduled maintenance hours, subject to a cap of two hundred (200) hours of scheduled maintenance per contract year. We note that Buyer's redline did not propose changes to this measurement methodology, and accordingly Seller has treated this element as agreed for purposes of the Second Draft.

II. Availability Liquidated Damages (Section 8.3)

Closely related to the availability guarantee threshold is the question of the applicable liquidated damages rate and cap for periods in which Seller fails to achieve the guaranteed availability level. The parties' respective positions on this issue are summarized as follows:

LD Rate. In the First Draft, Seller proposed an availability liquidated damages rate of zero point five zero percent (0.50%) of trailing twelve (12)-month revenue for each one percent (1.0%) shortfall below the guaranteed availability threshold. Buyer's redline revised this rate to one point zero zero percent (1.00%) of trailing twelve (12)-month revenue per one percent (1.0%) shortfall. In the Second Draft, Seller has moved to zero point seven five percent (0.75%) of trailing twelve (12)-month revenue per one percent (1.0%) shortfall — a midpoint compromise that we believe represents a commercially reasonable outcome and is consistent with the range of availability LD rates observed in recent comparable transactions.

LD Cap. In the First Draft, Seller proposed an annual cap on availability liquidated damages equal to five percent (5.0%) of trailing twelve (12)-month revenues. Buyer's redline proposed increasing this cap to ten percent (10.0%) of trailing twelve (12)-month revenues. In the Second Draft, Seller has moved to a cap of seven and one-half percent (7.5%) of trailing twelve (12)-month revenues — again reflecting a midpoint position intended to demonstrate Seller's willingness to move toward resolution on this issue.

Buyer Termination Trigger. In the First Draft, Seller proposed that Buyer would have a termination right only in the event that the Facility's actual availability falls below eighty-five percent (85.0%) in any two (2) consecutive rolling twelve (12)-month measurement periods. Buyer's redline proposed a significantly more aggressive termination trigger: the right to terminate the PPA if actual availability falls below ninety percent (90.0%) in any single twelve (12)-month measurement period. In the Second Draft, Seller has revised its position to provide a Buyer termination right if actual availability falls below eighty-seven and one-half percent (< 87.5%) in any two (2) consecutive twelve (12)-month measurement periods, provided that such shortfall remains uncured following the expiration of any applicable cure period set forth in Article XVI. This revision moves meaningfully in Buyer's direction on the threshold level while preserving the consecutive-period measurement framework that Seller believes is essential to avoiding termination in response to isolated, non-recurring operational disruptions.

We welcome further dialogue on the remaining gap between the parties on each of these availability-related provisions, as discussed in the open items section below.

III. Change of Control of Seller (Section 17.2)

The change of control provisions applicable to Seller were another area of significant divergence in Buyer's redline, and we have given these provisions careful attention in the Second Draft.

In the First Draft, Seller defined a "change of control" as the transfer of more than fifty percent (50%) of the direct or indirect equity interests in Saguaro Flats Solar LLC to a person or entity that is not an Affiliate (as defined in the PPA) of CBR. The First Draft provided that any such change of control would require thirty (30) days' prior written notice to Buyer, with Buyer having a termination right only in the event that the successor entity fails to satisfy the Minimum Credit Threshold — defined as either (a) a tangible net worth of not less than one hundred million dollars ($100,000,000), or (b) an investment-grade credit rating (BBB− or equivalent or higher) from a nationally recognized statistical rating organization.

Buyer's redline substantially revised this framework to provide that any change of control of Seller would require Buyer's prior written consent (not to be unreasonably withheld, conditioned, or delayed), together with a consent fee of one million five hundred thousand dollars ($1,500,000) payable by Seller per change of control event, and a sixty (60)-day termination right exercisable by Buyer in the event that Buyer does not provide such consent.

In the Second Draft, Seller has adopted a hybrid approach intended to address the core credit quality concern underlying Buyer's position while preserving the notice-based framework and avoiding the imposition of a consent fee, which Seller has not accepted. Specifically, the Second Draft provides as follows:

(a) A change of control of Seller that results in the successor entity satisfying the Minimum Credit Threshold requires only thirty (30) days' prior written notice to Buyer, with no consent requirement and no consent fee.

(b) A change of control of Seller in which the successor entity fails to satisfy the Minimum Credit Threshold requires Buyer's prior written consent, which consent shall not be unreasonably withheld, conditioned, or delayed. No consent fee is payable in connection with any such consent.

(c) In the event that Buyer reasonably withholds consent pursuant to clause (b) above, and the change of control has not been abandoned within sixty (60) days following Buyer's notice of objection, Buyer shall have the right to terminate the PPA upon thirty (30) additional days' written notice.

Seller believes this hybrid approach directly addresses Buyer's legitimate interest in ensuring that any successor to Seller has adequate creditworthiness to support Seller's obligations under the PPA, while avoiding the imposition of a consent fee that is not market-standard in transactions of this type and that creates unnecessary friction in connection with routine portfolio management and corporate restructuring activities.

We also note an important practical consideration: the change of control provisions in the PPA must be coordinated with, and acceptable to, the Seller's lender group. Tralvendo National Bank, N.A., in its capacity as Administrative Agent for the one hundred eight million dollar ($108,000,000) construction-to-term loan facility for the Saguaro Flats Solar Project, will require that the PPA include customary lender consent-to-assignment provisions and step-in rights. The change of control framework in the PPA cannot create a scenario in which Buyer's consent rights or termination rights impair the lender's ability to exercise its remedies with respect to the project collateral or to effect a change of control of Seller in connection with a foreclosure or deed-in-lieu transaction. Seller's proposed hybrid framework is designed to accommodate these lender coordination considerations, and we would welcome a discussion of this interaction on our next call.

IV. Reciprocal Buyer Change of Control (Section 17.3)

The Second Draft maintains Seller's request for reciprocal change of control protections applicable to Buyer. As proposed in the First Draft, if Buyer undergoes a change of control and the successor entity's credit rating falls below BBB− (or the equivalent from any nationally recognized statistical rating organization), Seller may demand that Buyer (or its successor) provide additional credit support in the form of an irrevocable standby letter of credit from a qualified issuing bank in an amount equal to twelve (12) months' estimated payments under the PPA, which Seller estimates at approximately seven million dollars ($7,000,000) based on the initial contract price and P50 generation assumptions. In the event that such additional credit support is not posted within thirty (30) business days following Seller's demand, Seller shall have the right to terminate the PPA.

We note that Buyer's redline deleted this provision in its entirety. Seller respectfully requests that Buyer reconsider this deletion. The reciprocal change of control protection is appropriate in the context of a twenty-year financial PPA under which Buyer's ongoing payment obligations represent a significant component of the Seller's (and the lender group's) expected revenue stream. The provision is narrowly tailored to address only those change of control scenarios that result in a material deterioration of the counterparty's creditworthiness, and the credit support mechanism (a letter of credit) is the least burdensome form of collateral reasonably available. We believe that the principle of reciprocity supports the inclusion of this provision and would welcome a discussion of Buyer's specific concerns.

V. Other Key Revisions Reflected in the Second Draft

In addition to the matters discussed above, the Second Draft reflects the following revisions and clarifications:

Curtailment Risk Allocation. Seller has revised the curtailment risk allocation provisions to address certain of Buyer's comments regarding the treatment of economic curtailment versus reliability curtailment and the allocation of settlement obligations during curtailment periods. The specific section references and the substance of these revisions are best addressed in detail on our next call, and we have flagged the relevant provisions in the redline for ease of reference.

Force Majeure. Seller has revised the force majeure definitions in Article XIV to provide additional clarity regarding the interaction between force majeure exclusions and the availability guarantee measurement methodology set forth in Article VIII. These revisions are intended to ensure consistency between the two articles and to address certain ambiguities identified in Buyer's redline. We believe these changes are responsive to Buyer's comments, though certain details of the force majeure definition remain open for further discussion as noted below.

Buyer Corporate Guaranty. Seller has maintained its request for a corporate guaranty from Meridian DataCore Solutions Inc. in favor of Seller, capped at fourteen million dollars ($14,000,000). This cap is calculated as the equivalent of approximately two (2) years of estimated annual PPA revenues, based on an initial contract price of $20.00/MWh and estimated P50 annual generation of 350,000 MWh. We note that Buyer's redline deleted the guaranty requirement in its entirety, and this item remains open. Seller considers the corporate guaranty an essential component of the credit support package and a condition to Seller's willingness to enter into the PPA, particularly in light of the twenty-year term and the financial settlement structure of the transaction.

Seller's Credit Support. The terms of Seller's credit support obligation — specifically, the irrevocable standby letter of credit from Tralvendo National Bank, N.A. in the amount of seven million dollars ($7,000,000), reducing to three million five hundred thousand dollars ($3,500,000) after the fifth (5th) anniversary of the Commercial Operation Date, subject to no Seller default at the time of reduction — remain unchanged from the First Draft. We note that Buyer accepted these terms in its redline, and accordingly Seller has treated this element as agreed.

Contract Price. The contract price of twenty dollars ($20.00) per MWh (fixed for contract years one through five), with a one and one-half percent (1.50%) per annum compounding escalator applicable beginning in contract year six and continuing through contract year twenty, has been confirmed as agreed between the parties. No changes to the pricing provisions have been made in the Second Draft.

Governing Law and Dispute Resolution. The governing law (State of New York, without regard to conflicts of law principles) and dispute resolution provisions (binding arbitration pursuant to the Commercial Arbitration Rules of the American Arbitration Association, before a panel of three (3) arbitrators, with the seat of arbitration in New York, New York) have been confirmed as agreed between the parties. No changes to these provisions have been made in the Second Draft.

Remaining Open Items

For ease of reference, the following is a numbered summary of the principal issues that remain unresolved and will require further discussion between the parties:

1. Availability Guarantee Threshold — Seller's current position is ≥ 96.0% on a rolling twelve (12)-month basis; Buyer's last stated position was ≥ 97.0%.

2. Availability LD Rate — Seller's current position is 0.75% of trailing twelve (12)-month revenue per 1.0% shortfall; Buyer's last stated position was 1.00%.

3. Availability LD Cap — Seller's current position is 7.5% of trailing twelve (12)-month revenues; Buyer's last stated position was 10.0%.

4. Availability Termination Trigger — The applicable threshold level and measurement period (single versus consecutive twelve (12)-month periods) remain under discussion.

5. Change of Control — The consent-versus-notice framework, including Seller's rejection of the $1,500,000 consent fee proposed by Buyer and the hybrid approach proposed in the Second Draft.

6. Reciprocal Buyer Change of Control Protections — Buyer's redline deleted Seller's proposed provision; Seller has maintained the provision in the Second Draft and requests Buyer's reconsideration.

7. Buyer Corporate Guaranty — Seller has maintained its request for a $14,000,000 capped corporate guaranty from Meridian DataCore Solutions Inc.; Buyer has not agreed to this requirement.

8. Curtailment Risk Allocation — The specific treatment of economic curtailment versus reliability curtailment and the corresponding impact on settlement payments remain under discussion.

9. Force Majeure Definition — Certain details of the force majeure definition, including specific exclusions and qualifying events, require further alignment between the parties.

Lender Consent Agreement

The form of Lender Consent Agreement, which is attached to the PPA as Exhibit F, remains included in the Second Draft in the form previously circulated. As you are aware, Seller is separately engaged in discussions with counsel to the lender group — specifically, Philip Thornton of Whitfield Stroval & Cade LLP — regarding the lender's comments on the consent-to-assignment and step-in provisions set forth in Exhibit F. Those discussions are ongoing, and any revisions to Exhibit F resulting from those discussions will be circulated to Buyer's counsel as updates when available. We do not anticipate that lender comments will require material changes to the body of the PPA, but we will of course flag any such issues promptly if they arise.

Proposed Next Steps

In light of the number and significance of the remaining open items, we propose scheduling a negotiation call among counsel and the parties' respective business teams during the week of August 18, 2025. That week represents the target date for resolution of the open issues relating to availability and change of control, which we view as the most commercially significant of the remaining open items.

We suggest that the following individuals participate in the call:

From the Seller Side:

• Patricia Dunmore, Calderwood & Harkness LLP

• Brett Callahan, Calderwood & Harkness LLP

• Rachel Muñoz, General Counsel, Calloway-Briggs Renewables Inc.

• Janet Okafor, SVP, Origination & Commercial, Calloway-Briggs Renewables Inc.

From the Buyer Side:

• Evelyn Crumveth, Hargrove & Linden LLP

• Ryan Matsuda, Hargrove & Linden LLP

• Buyer's business representatives (to be identified by Buyer's counsel)

We wish to underscore the urgency of advancing these discussions. The parties' target date for execution of the PPA is September 15, 2025. Timely execution of the PPA is a condition precedent to the closing of the construction-to-term loan facility with Tralvendo National Bank, N.A., which is currently targeted for October 1, 2025. Following the loan closing, Seller intends to issue the full Notice to Proceed under its engineering, procurement, and construction agreement with Sunbelt Power Construction LLC on or about October 15, 2025. Any material delay in the PPA execution timeline may have cascading effects on the construction financing closing and the overall project development schedule.

We respectfully request that Buyer's counsel confirm availability for the proposed negotiation call during the week of August 18, 2025, and identify any additional items that Buyer wishes to add to the agenda for discussion.

Reservation of Rights

The circulation of the enclosed Second Draft and this cover letter does not constitute a waiver of any rights, remedies, or positions of Seller, CBR, or any of their affiliates under the PPA, at law, or in equity. All terms and provisions set forth in the Second Draft remain subject to final agreement by both parties, approval by CBR's management and board, and execution of the PPA in definitive form by duly authorized representatives of both Seller and Buyer. Neither this letter nor the Second Draft shall be construed as creating any binding obligation on the part of Seller or CBR unless and until the PPA is fully executed and delivered by both parties.

Confidentiality

We remind you that the enclosed documents, including the Second Draft and the accompanying redline, are confidential and are subject to the mutual non-disclosure obligations set forth in the Mutual Non-Disclosure Agreement dated March 22, 2025, between CBR and Meridian DataCore Solutions Inc. We request that distribution of these materials be limited to those individuals within Buyer's organization and its advisors who have a need to know and who are bound by appropriate confidentiality obligations.

We appreciate your continued engagement on this transaction and look forward to productive discussions with you and Buyer's business team in the coming weeks. Please do not hesitate to contact me or Brett Callahan with any questions regarding the Second Draft or the matters discussed in this letter.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Patricia Dunmore Partner, Energy & Infrastructure

1100 Louisiana Street, Suite 4500 Houston, Texas 77002 Tel: (713) 554-8200 pdunmore@calderwoodharkness.com

Enclosures:

1. Seller's Revised Draft Power Purchase Agreement (Second Draft), dated August 11, 2025 — Saguaro Flats Solar LLC and Meridian DataCore Solutions Inc.

2. Redline Comparison — Second Draft vs. Seller's First Draft (July 14, 2025)

cc:

Rachel Muñoz, General Counsel, Calloway-Briggs Renewables Inc. Janet Okafor, SVP, Origination & Commercial, Calloway-Briggs Renewables Inc. Brett Callahan, Calderwood & Harkness LLP David Stanton, Calderwood & Harkness LLP

CONFIDENTIAL
CALDERWOOD & HARKNESS LLP Attorneys at Law
1100 Louisiana Street, Suite 4500 Houston, Texas 77002
Patricia Dunmore Partner, Energy & Infrastructure Tel: (713) 554-8200
Fax: (713) 554-8201
pdunmore@calderwoodharkness.com
August 11, 2025
VIA ELECTRONIC MAIL AND HAND DELIVERY
Evelyn Crumveth, Esq. Hargrove & Linden LLP 300 Congress Avenue, Suite 2200 Austin, Texas 78701
Re: Power Purchase Agreement — Saguaro Flats Solar LLC and Meridian DataCore Solutions Inc. Saguaro Flats Solar Project — 150 MWac Solar Photovoltaic Facility, Pecos County, Texas Calderwood & Harkness Matter No. 1015-00002
Dear Evelyn:
Transmittal of Second Draft PPA
On behalf of our client, Calloway-Briggs Renewables Inc. ("CBR"), and its wholly owned project subsidiary, Saguaro Flats Solar LLC ("Seller"), we are pleased to transmit the following enclosed documents for the review and consideration of Meridian DataCore Solutions Inc. ("Buyer") and its counsel:
1. Seller's Revised Draft Power Purchase Agreement (Second Draft), dated August 11, 2025 (the "Second Draft"), between Saguaro Flats Solar LLC, as Seller, and Meridian DataCore Solutions Inc., as Buyer; and
2. Redline Comparison of the Second Draft against Seller's initial form Power Purchase Agreement circulated on July 14, 2025 (the "First Draft"), showing all changes made by Seller in connection with this revision.
The Second Draft reflects Seller's responses to the Buyer's redline of the First Draft, which we received from Hargrove & Linden on August 1, 2025. We have carefully reviewed and considered each of the revisions and comments set forth in Buyer's redline and have endeavored to address the principal areas of concern in a manner that balances the commercial expectations of both parties while preserving the fundamental risk allocation inherent in the transaction.
As you are aware, the PPA remains structured as a twenty (20)-year virtual (financial) power purchase agreement, operating as a contract for differences settling against the ERCOT West Hub locational price. The expected Commercial Operation Date for the Saguaro Flats Solar Project is April 1, 2027. None of the fundamental structural elements of the PPA have been altered in the Second Draft, and the transaction continues to be organized on the terms discussed between the parties' respective business teams over the course of the past several months.
This letter is intended to provide an overview of the key movements reflected in the Second Draft, to identify the remaining open items that will require further discussion between the parties, and to propose next steps for advancing the PPA toward execution. We address each of these topics in turn below.
Summary of Key Movements
I. Availability Guarantee (Article VIII)
The availability guarantee threshold was — and remains — a principal area of divergence between the parties. We appreciate Buyer's focus on ensuring robust availability commitments from the Seller, and we have given careful consideration to Buyer's proposed revision in this regard.
In the First Draft, Seller proposed a guaranteed availability of not less than ninety-five percent (≥ 95.0%) on a rolling twelve (12)-month basis. Buyer's redline revised this threshold upward to not less than ninety-seven percent (≥ 97.0%) on the same rolling twelve (12)-month measurement basis.
In the Second Draft, Seller has moved to a guaranteed availability of not less than ninety-six percent (≥ 96.0%) on a rolling twelve (12)-month basis. This revised position represents a meaningful compromise on the part of Seller and reflects market benchmarks for utility-scale solar photovoltaic power purchase agreement transactions of comparable size and technology in the ERCOT market. We believe that a 96.0% availability guarantee appropriately balances the Buyer's expectation of high system availability against the practical operational realities of a 150 MWac solar PV facility, including the effects of routine equipment maintenance, inverter cycling, and other operational considerations that are standard in projects of this type.
The measurement methodology for the availability guarantee remains unchanged from the First Draft: Available Hours divided by Period Hours, multiplied by one hundred (Available Hours ÷ Period Hours × 100), expressed as a percentage. The calculation continues to exclude (i) Force Majeure hours, (ii) curtailment hours (whether resulting from economic or reliability curtailment by the grid operator), and (iii) scheduled maintenance hours, subject to a cap of two hundred (200) hours of scheduled maintenance per contract year. We note that Buyer's redline did not propose changes to this measurement methodology, and accordingly Seller has treated this element as agreed for purposes of the Second Draft.
II. Availability Liquidated Damages (Section 8.3)
Closely related to the availability guarantee threshold is the question of the applicable liquidated damages rate and cap for periods in which Seller fails to achieve the guaranteed availability level. The parties' respective positions on this issue are summarized as follows:
LD Rate. In the First Draft, Seller proposed an availability liquidated damages rate of zero point five zero percent (0.50%) of trailing twelve (12)-month revenue for each one percent (1.0%) shortfall below the guaranteed availability threshold. Buyer's redline revised this rate to one point zero zero percent (1.00%) of trailing twelve (12)-month revenue per one percent (1.0%) shortfall. In the Second Draft, Seller has moved to zero point seven five percent (0.75%) of trailing twelve (12)-month revenue per one percent (1.0%) shortfall — a midpoint compromise that we believe represents a commercially reasonable outcome and is consistent with the range of availability LD rates observed in recent comparable transactions.
LD Cap. In the First Draft, Seller proposed an annual cap on availability liquidated damages equal to five percent (5.0%) of trailing twelve (12)-month revenues. Buyer's redline proposed increasing this cap to ten percent (10.0%) of trailing twelve (12)-month revenues. In the Second Draft, Seller has moved to a cap of seven and one-half percent (7.5%) of trailing twelve (12)-month revenues — again reflecting a midpoint position intended to demonstrate Seller's willingness to move toward resolution on this issue.
Buyer Termination Trigger. In the First Draft, Seller proposed that Buyer would have a termination right only in the event that the Facility's actual availability falls below eighty-five percent (85.0%) in any two (2) consecutive rolling twelve (12)-month measurement periods. Buyer's redline proposed a significantly more aggressive termination trigger: the right to terminate the PPA if actual availability falls below ninety percent (90.0%) in any single twelve (12)-month measurement period. In the Second Draft, Seller has revised its position to provide a Buyer termination right if actual availability falls below eighty-seven and one-half percent (< 87.5%) in any two (2) consecutive twelve (12)-month measurement periods, provided that such shortfall remains uncured following the expiration of any applicable cure period set forth in Article XVI. This revision moves meaningfully in Buyer's direction on the threshold level while preserving the consecutive-period measurement framework that Seller believes is essential to avoiding termination in response to isolated, non-recurring operational disruptions.
We welcome further dialogue on the remaining gap between the parties on each of these availability-related provisions, as discussed in the open items section below.
III. Change of Control of Seller (Section 17.2)
The change of control provisions applicable to Seller were another area of significant divergence in Buyer's redline, and we have given these provisions careful attention in the Second Draft.
In the First Draft, Seller defined a "change of control" as the transfer of more than fifty percent (50%) of the direct or indirect equity interests in Saguaro Flats Solar LLC to a person or entity that is not an Affiliate (as defined in the PPA) of CBR. The First Draft provided that any such change of control would require thirty (30) days' prior written notice to Buyer, with Buyer having a termination right only in the event that the successor entity fails to satisfy the Minimum Credit Threshold — defined as either (a) a tangible net worth of not less than one hundred million dollars ($100,000,000), or (b) an investment-grade credit rating (BBB− or equivalent or higher) from a nationally recognized statistical rating organization.
Buyer's redline substantially revised this framework to provide that any change of control of Seller would require Buyer's prior written consent (not to be unreasonably withheld, conditioned, or delayed), together with a consent fee of one million five hundred thousand dollars ($1,500,000) payable by Seller per change of control event, and a sixty (60)-day termination right exercisable by Buyer in the event that Buyer does not provide such consent.
In the Second Draft, Seller has adopted a hybrid approach intended to address the core credit quality concern underlying Buyer's position while preserving the notice-based framework and avoiding the imposition of a consent fee, which Seller has not accepted. Specifically, the Second Draft provides as follows:
(a) A change of control of Seller that results in the successor entity satisfying the Minimum Credit Threshold requires only thirty (30) days' prior written notice to Buyer, with no consent requirement and no consent fee.
(b) A change of control of Seller in which the successor entity fails to satisfy the Minimum Credit Threshold requires Buyer's prior written consent, which consent shall not be unreasonably withheld, conditioned, or delayed. No consent fee is payable in connection with any such consent.
(c) In the event that Buyer reasonably withholds consent pursuant to clause (b) above, and the change of control has not been abandoned within sixty (60) days following Buyer's notice of objection, Buyer shall have the right to terminate the PPA upon thirty (30) additional days' written notice.
Seller believes this hybrid approach directly addresses Buyer's legitimate interest in ensuring that any successor to Seller has adequate creditworthiness to support Seller's obligations under the PPA, while avoiding the imposition of a consent fee that is not market-standard in transactions of this type and that creates unnecessary friction in connection with routine portfolio management and corporate restructuring activities.
We also note an important practical consideration: the change of control provisions in the PPA must be coordinated with, and acceptable to, the Seller's lender group. Tralvendo National Bank, N.A., in its capacity as Administrative Agent for the one hundred eight million dollar ($108,000,000) construction-to-term loan facility for the Saguaro Flats Solar Project, will require that the PPA include customary lender consent-to-assignment provisions and step-in rights. The change of control framework in the PPA cannot create a scenario in which Buyer's consent rights or termination rights impair the lender's ability to exercise its remedies with respect to the project collateral or to effect a change of control of Seller in connection with a foreclosure or deed-in-lieu transaction. Seller's proposed hybrid framework is designed to accommodate these lender coordination considerations, and we would welcome a discussion of this interaction on our next call.
IV. Reciprocal Buyer Change of Control (Section 17.3)
The Second Draft maintains Seller's request for reciprocal change of control protections applicable to Buyer. As proposed in the First Draft, if Buyer undergoes a change of control and the successor entity's credit rating falls below BBB− (or the equivalent from any nationally recognized statistical rating organization), Seller may demand that Buyer (or its successor) provide additional credit support in the form of an irrevocable standby letter of credit from a qualified issuing bank in an amount equal to twelve (12) months' estimated payments under the PPA, which Seller estimates at approximately seven million dollars ($7,000,000) based on the initial contract price and P50 generation assumptions. In the event that such additional credit support is not posted within thirty (30) business days following Seller's demand, Seller shall have the right to terminate the PPA.
We note that Buyer's redline deleted this provision in its entirety. Seller respectfully requests that Buyer reconsider this deletion. The reciprocal change of control protection is appropriate in the context of a twenty-year financial PPA under which Buyer's ongoing payment obligations represent a significant component of the Seller's (and the lender group's) expected revenue stream. The provision is narrowly tailored to address only those change of control scenarios that result in a material deterioration of the counterparty's creditworthiness, and the credit support mechanism (a letter of credit) is the least burdensome form of collateral reasonably available. We believe that the principle of reciprocity supports the inclusion of this provision and would welcome a discussion of Buyer's specific concerns.
V. Other Key Revisions Reflected in the Second Draft
In addition to the matters discussed above, the Second Draft reflects the following revisions and clarifications:
Curtailment Risk Allocation. Seller has revised the curtailment risk allocation provisions to address certain of Buyer's comments regarding the treatment of economic curtailment versus reliability curtailment and the allocation of settlement obligations during curtailment periods. The specific section references and the substance of these revisions are best addressed in detail on our next call, and we have flagged the relevant provisions in the redline for ease of reference.
Force Majeure. Seller has revised the force majeure definitions in Article XIV to provide additional clarity regarding the interaction between force majeure exclusions and the availability guarantee measurement methodology set forth in Article VIII. These revisions are intended to ensure consistency between the two articles and to address certain ambiguities identified in Buyer's redline. We believe these changes are responsive to Buyer's comments, though certain details of the force majeure definition remain open for further discussion as noted below.
Buyer Corporate Guaranty. Seller has maintained its request for a corporate guaranty from Meridian DataCore Solutions Inc. in favor of Seller, capped at fourteen million dollars ($14,000,000). This cap is calculated as the equivalent of approximately two (2) years of estimated annual PPA revenues, based on an initial contract price of $20.00/MWh and estimated P50 annual generation of 350,000 MWh. We note that Buyer's redline deleted the guaranty requirement in its entirety, and this item remains open. Seller considers the corporate guaranty an essential component of the credit support package and a condition to Seller's willingness to enter into the PPA, particularly in light of the twenty-year term and the financial settlement structure of the transaction.
Seller's Credit Support. The terms of Seller's credit support obligation — specifically, the irrevocable standby letter of credit from Tralvendo National Bank, N.A. in the amount of seven million dollars ($7,000,000), reducing to three million five hundred thousand dollars ($3,500,000) after the fifth (5th) anniversary of the Commercial Operation Date, subject to no Seller default at the time of reduction — remain unchanged from the First Draft. We note that Buyer accepted these terms in its redline, and accordingly Seller has treated this element as agreed.
Contract Price. The contract price of twenty dollars ($20.00) per MWh (fixed for contract years one through five), with a one and one-half percent (1.50%) per annum compounding escalator applicable beginning in contract year six and continuing through contract year twenty, has been confirmed as agreed between the parties. No changes to the pricing provisions have been made in the Second Draft.
Governing Law and Dispute Resolution. The governing law (State of New York, without regard to conflicts of law principles) and dispute resolution provisions (binding arbitration pursuant to the Commercial Arbitration Rules of the American Arbitration Association, before a panel of three (3) arbitrators, with the seat of arbitration in New York, New York) have been confirmed as agreed between the parties. No changes to these provisions have been made in the Second Draft.
Remaining Open Items
For ease of reference, the following is a numbered summary of the principal issues that remain unresolved and will require further discussion between the parties:
1. Availability Guarantee Threshold — Seller's current position is ≥ 96.0% on a rolling twelve (12)-month basis; Buyer's last stated position was ≥ 97.0%.
2. Availability LD Rate — Seller's current position is 0.75% of trailing twelve (12)-month revenue per 1.0% shortfall; Buyer's last stated position was 1.00%.
3. Availability LD Cap — Seller's current position is 7.5% of trailing twelve (12)-month revenues; Buyer's last stated position was 10.0%.
4. Availability Termination Trigger — The applicable threshold level and measurement period (single versus consecutive twelve (12)-month periods) remain under discussion.
5. Change of Control — The consent-versus-notice framework, including Seller's rejection of the $1,500,000 consent fee proposed by Buyer and the hybrid approach proposed in the Second Draft.
6. Reciprocal Buyer Change of Control Protections — Buyer's redline deleted Seller's proposed provision; Seller has maintained the provision in the Second Draft and requests Buyer's reconsideration.
7. Buyer Corporate Guaranty — Seller has maintained its request for a $14,000,000 capped corporate guaranty from Meridian DataCore Solutions Inc.; Buyer has not agreed to this requirement.
8. Curtailment Risk Allocation — The specific treatment of economic curtailment versus reliability curtailment and the corresponding impact on settlement payments remain under discussion.
9. Force Majeure Definition — Certain details of the force majeure definition, including specific exclusions and qualifying events, require further alignment between the parties.
Lender Consent Agreement
The form of Lender Consent Agreement, which is attached to the PPA as Exhibit F, remains included in the Second Draft in the form previously circulated. As you are aware, Seller is separately engaged in discussions with counsel to the lender group — specifically, Philip Thornton of Whitfield Stroval & Cade LLP — regarding the lender's comments on the consent-to-assignment and step-in provisions set forth in Exhibit F. Those discussions are ongoing, and any revisions to Exhibit F resulting from those discussions will be circulated to Buyer's counsel as updates when available. We do not anticipate that lender comments will require material changes to the body of the PPA, but we will of course flag any such issues promptly if they arise.
Proposed Next Steps
In light of the number and significance of the remaining open items, we propose scheduling a negotiation call among counsel and the parties' respective business teams during the week of August 18, 2025. That week represents the target date for resolution of the open issues relating to availability and change of control, which we view as the most commercially significant of the remaining open items.
We suggest that the following individuals participate in the call:
From the Seller Side:
• Patricia Dunmore, Calderwood & Harkness LLP
• Brett Callahan, Calderwood & Harkness LLP
• Rachel Muñoz, General Counsel, Calloway-Briggs Renewables Inc.
• Janet Okafor, SVP, Origination & Commercial, Calloway-Briggs Renewables Inc.
From the Buyer Side:
• Evelyn Crumveth, Hargrove & Linden LLP
• Ryan Matsuda, Hargrove & Linden LLP
• Buyer's business representatives (to be identified by Buyer's counsel)
We wish to underscore the urgency of advancing these discussions. The parties' target date for execution of the PPA is September 15, 2025. Timely execution of the PPA is a condition precedent to the closing of the construction-to-term loan facility with Tralvendo National Bank, N.A., which is currently targeted for October 1, 2025. Following the loan closing, Seller intends to issue the full Notice to Proceed under its engineering, procurement, and construction agreement with Sunbelt Power Construction LLC on or about October 15, 2025. Any material delay in the PPA execution timeline may have cascading effects on the construction financing closing and the overall project development schedule.
We respectfully request that Buyer's counsel confirm availability for the proposed negotiation call during the week of August 18, 2025, and identify any additional items that Buyer wishes to add to the agenda for discussion.
Reservation of Rights
The circulation of the enclosed Second Draft and this cover letter does not constitute a waiver of any rights, remedies, or positions of Seller, CBR, or any of their affiliates under the PPA, at law, or in equity. All terms and provisions set forth in the Second Draft remain subject to final agreement by both parties, approval by CBR's management and board, and execution of the PPA in definitive form by duly authorized representatives of both Seller and Buyer. Neither this letter nor the Second Draft shall be construed as creating any binding obligation on the part of Seller or CBR unless and until the PPA is fully executed and delivered by both parties.
Confidentiality
We remind you that the enclosed documents, including the Second Draft and the accompanying redline, are confidential and are subject to the mutual non-disclosure obligations set forth in the Mutual Non-Disclosure Agreement dated March 22, 2025, between CBR and Meridian DataCore Solutions Inc. We request that distribution of these materials be limited to those individuals within Buyer's organization and its advisors who have a need to know and who are bound by appropriate confidentiality obligations.
We appreciate your continued engagement on this transaction and look forward to productive discussions with you and Buyer's business team in the coming weeks. Please do not hesitate to contact me or Brett Callahan with any questions regarding the Second Draft or the matters discussed in this letter.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Patricia Dunmore Partner, Energy & Infrastructure
1100 Louisiana Street, Suite 4500 Houston, Texas 77002 Tel: (713) 554-8200 pdunmore@calderwoodharkness.com
Enclosures:
1. Seller's Revised Draft Power Purchase Agreement (Second Draft), dated August 11, 2025 — Saguaro Flats Solar LLC and Meridian DataCore Solutions Inc.
2. Redline Comparison — Second Draft vs. Seller's First Draft (July 14, 2025)
cc:
Rachel Muñoz, General Counsel, Calloway-Briggs Renewables Inc. Janet Okafor, SVP, Origination & Commercial, Calloway-Briggs Renewables Inc. Brett Callahan, Calderwood & Harkness LLP David Stanton, Calderwood & Harkness LLP

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