1015-00002 · Calloway-Briggs Renewables Inc · Correspondence

letter-to-lenders-counsel-ppa-status.docx DOCUMENT M&A / Corporate

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CALDERWOOD & HARKNESS LLP Attorneys at Law

1100 Louisiana Street, Suite 4500 Houston, Texas 77002

Telephone: (713) 555-8200 Facsimile: (713) 555-8201 www.calderwoodharkness.com

August 8, 2025

VIA EMAIL AND FIRST-CLASS MAIL

Philip Thornton, Esq. Whitfield Stroval & Cade LLP 51 West 52nd Street, 30th Floor New York, New York 10019

Re: Saguaro Flats Solar Project — Power Purchase Agreement Negotiation Status and Summary of Key Terms C&H Matter No. 1015-00002

Dear Mr. Thornton:

1. Introduction and Purpose

I am Helen Nakamura, Of Counsel in the Project Finance group at Calderwood & Harkness LLP. I am writing on behalf of our client, Calloway-Briggs Renewables Inc. ("CBR"), and its wholly owned subsidiary Saguaro Flats Solar LLC (the "Project Company"), in connection with the negotiation of the virtual power purchase agreement (the "PPA") for the Saguaro Flats Solar Project (the "Project").

As you are aware, Calderwood & Harkness represents CBR in its capacity as Seller's counsel in the negotiation of a twenty (20)-year virtual power purchase agreement with Meridian DataCore Solutions Inc. ("Meridian" or "Buyer"; Nasdaq: MDCS) for the full energy output and associated environmental attributes of the Project. The PPA is structured as a contract for differences settled against the ERCOT West Hub price, and is a critical foundational agreement for the overall financing and development of the Project.

The purpose of this letter is to provide Whitfield Stroval & Cade LLP ("WJC"), in its capacity as counsel to Tralvendo National Bank, N.A. ("Tralvendo"), acting as Administrative Agent and Lead Arranger for the one hundred eight million dollar ($108,000,000) senior secured construction-to-term loan facility (the "Credit Facility"), with a comprehensive update on the current status of PPA negotiations and a detailed summary of the principal commercial and legal terms of the PPA as currently negotiated. We are providing this summary at this time to facilitate Tralvendo's and the lender group's assessment of the bankability of the PPA and to enable WJC to commence its review of the PPA terms against customary lender requirements in advance of loan closing.

Our target date for execution of the PPA is September 15, 2025, with a target construction loan closing date of October 1, 2025. As set forth in the Credit Facility term sheet dated June 20, 2025, the execution and delivery of the PPA on terms satisfactory to the Administrative Agent and the Independent Engineer is a condition precedent to the first draw under the Credit Facility. Accordingly, lender bankability sign-off on the PPA is required prior to the loan closing date, and we are committed to working collaboratively with WJC and Tralvendo to ensure that the PPA meets all lender requirements within the project timeline.

This letter and the PPA negotiation are being overseen by Patricia Dunmore, Responsible Partner in our Energy & Infrastructure practice. I am coordinating all lender-related PPA matters and will serve as the primary point of contact for WJC on all issues relating to the form and substance of the PPA, the Lender Consent Agreement, and related bankability considerations. My colleague Brett Callahan, an associate in our Project Finance group, is also supporting this engagement and may be in contact with your team from time to time on specific drafting matters.

2. Parties to the PPA

2.1 Seller

The Seller under the PPA is Saguaro Flats Solar LLC, a Delaware limited liability company formed for the sole purpose of developing, constructing, owning, and operating the Project. The Project Company is one hundred percent (100%) owned and managed by Calloway-Briggs Renewables Inc., a Delaware corporation headquartered at 4200 Travis Street, Suite 1800, Houston, Texas 77002. The Project Company's registered agent is Capitol Registered Agents LLC, located at 850 New Burton Road, Suite 201, Dover, Delaware 19904. The Project Company's federal Employer Identification Number is 93-1284506.

CBR is an independent renewable energy developer and operator with an operating and under-construction portfolio of approximately 1.8 GW of solar photovoltaic and wind energy assets located across the ERCOT, SPP, and MISO wholesale electricity markets. CBR was founded in 2011 and has an established track record of developing, financing, and operating utility-scale renewable energy projects. For the fiscal year ended December 31, 2024, CBR reported consolidated revenue of approximately $312 million and adjusted EBITDA of approximately $118 million. CBR's corporate family rating as assigned by Pinnacle Ratings Group is BBB−.

CBR's majority equity sponsor is Ridgepoint Capital Partners LP, which holds approximately sixty-eight percent (68%) of CBR's common equity. Ridgepoint Capital Partners LP is a Houston-based infrastructure-focused private equity firm; its Managing Partner is Alan Driscoll. The remaining equity in CBR is held by management and other minority investors.

2.2 Buyer

The Buyer under the PPA is Meridian DataCore Solutions Inc., a Delaware corporation headquartered at 700 Lakeshore Parkway, Building C, Austin, Texas 78746. Meridian is a leading hyperscale and co-location data center operator with fourteen (14) campuses representing approximately 480 MW of critical IT load across Texas, Virginia, Ohio, and Nevada. Meridian is publicly traded on the Nasdaq Stock Market under the ticker symbol "MDCS," with a market capitalization of approximately $8.2 billion as of June 30, 2025. For the fiscal year ended December 31, 2024, Meridian reported revenue of approximately $2.1 billion and adjusted EBITDA of approximately $740 million. Meridian's corporate credit rating as assigned by Pinnacle Ratings Group is BBB.

Meridian is represented in the PPA negotiation by Hargrove & Linden LLP, an Austin, Texas-based law firm. The lead partner on the Buyer's side is Evelyn Crumveth.

3. Project Overview

Set forth below is a summary of the key characteristics and development status of the Saguaro Flats Solar Project:

Interconnection. The ERCOT Full Interconnection Study for the Project was completed on March 14, 2025, and the Large Generation Interconnection Agreement ("LGIA") was executed on May 15, 2025, between the Project Company and West Texas Wires LLC, the applicable transmission service provider. The Project holds Queue Position ERCOT-GI-2024-0437. The Project will interconnect at the Ft. Stockton 345 kV Substation. No material interconnection upgrades requiring third-party cost sharing have been identified in the interconnection study, and the estimated cost of Seller-funded interconnection facilities is included in the total estimated project cost set forth above.

Permits and Approvals. The Pecos County Conditional Use Permit for the Project was approved on February 10, 2025 (CUP-2025-012), authorizing the construction and operation of a utility-scale solar photovoltaic facility on the project site. The Project Company has submitted the required Stormwater Pollution Prevention Plan to the Texas Commission on Environmental Quality ("TCEQ") in accordance with the TCEQ Construction General Permit. No individual environmental permit is required for the Project based on the environmental assessments completed to date. Additional routine construction-phase permits (e.g., access road permits, building permits for inverter stations and the operations and maintenance building) will be obtained prior to Notice to Proceed.

Tax Credits. The Project is intended to qualify for the thirty percent (30%) Investment Tax Credit under Section 48 of the Internal Revenue Code of 1986, as amended, as extended and modified by the Inflation Reduction Act of 2022. Based on the estimated eligible project cost basis of approximately $142,500,000, the estimated ITC value is approximately $42,750,000. CBR intends to monetize the ITC through a tax equity partnership structure; however, tax equity arrangements are being negotiated separately and are not the subject of this letter. We note that the PPA must be structured and documented to preserve the Project's eligibility for the ITC, and we have been attentive to this requirement throughout the PPA negotiation.

4. Summary of Key PPA Terms

Set forth below is a summary of the principal commercial and legal terms of the PPA as currently negotiated between the parties. Where terms have been agreed, we have identified them as such. Where terms remain under negotiation or subject to open issues, cross-references to Section 5 of this letter are provided.

4.1 Contract Structure

The PPA is structured as a virtual (financial) power purchase agreement in the form of a contract for differences ("CfD"). Under this structure, no physical delivery of electricity occurs between Seller and Buyer. Instead, the parties settle financially on a monthly basis based on the difference between the fixed Contract Price and the applicable floating market reference price.

The designated Settlement Hub is the ERCOT West Hub. For each settlement period, the net settlement amount is calculated as the Contract Price minus the Hub Price, multiplied by the volume of energy generated and delivered to the ERCOT grid during such period. If the Contract Price exceeds the Hub Price, Buyer pays the difference to Seller. If the Hub Price exceeds the Contract Price, Seller pays the difference to Buyer. In all cases, Seller receives the spot settlement at the ERCOT West Hub from the market for the physical energy produced, and the CfD settlement provides Seller with a fixed revenue stream equal to the Contract Price for each MWh generated by the Project.

This virtual PPA structure is consistent with market-standard renewable energy procurement structures utilized by corporate offtakers in the ERCOT market and should be familiar to the lender group. We note that because the PPA is a financial instrument and does not involve physical delivery, the PPA does not create a firm delivery obligation, and generation risk is borne primarily by Seller (subject to the availability guarantee provisions discussed below).

4.2 Term

The PPA has a term of twenty (20) years commencing on the Commercial Operation Date (the "COD"). Based on the expected COD of April 1, 2027, the PPA is expected to expire on March 31, 2047.

The twenty-year term provides a contracted revenue stream that significantly exceeds the approximately 19.5-year tenor of the Credit Facility (including the approximately eighteen-month construction period and the eighteen-year amortizing term loan period), thereby ensuring that the PPA remains in effect through the final maturity date of the Credit Facility and providing a contractual tail of approximately six months. We will confirm with Tralvendo whether additional tail coverage is required or desirable from the lender group's perspective.

4.3 Contract Price and Escalation

The following pricing terms have been agreed between the parties:

• Initial Contract Price: $20.00 per MWh, fixed for Contract Years 1 through 5 (i.e., from COD through the fifth anniversary of COD).

• Annual Escalation: Beginning in Contract Year 6, the Contract Price escalates at a rate of 1.50% per annum, compounding annually. The escalation applies on each anniversary of the COD beginning with the sixth anniversary.

For reference, the escalated Contract Price at selected intervals over the PPA term is as follows:

Based on the P50 annual net generation estimate of 350,000 MWh per year, the aggregate nominal PPA value over the full twenty-year term is estimated at approximately $140,000,000, with an average annual contract value of approximately $7,000,000 per year. The total contracted volume at P50 over the PPA term is approximately 7,000,000 MWh, yielding a blended average contract price of approximately $20.00/MWh.

We believe these pricing terms are consistent with current market levels for long-term virtual PPAs with investment-grade corporate offtakers in the ERCOT West region and should provide a stable and predictable revenue stream to support the Credit Facility.

4.4 Credit Support

The parties have agreed in principle (subject to finalization of the Buyer credit support issue discussed in Section 5.3 below) on the following credit support framework:

Seller Credit Support. Seller shall deliver to Buyer an irrevocable standby letter of credit issued by Tralvendo National Bank, N.A. (or another financial institution meeting the requirements specified in the PPA) in the initial face amount of $7,000,000, which is equal to approximately one (1) year of estimated PPA revenues at P50 generation and Year 1 pricing. The Seller letter of credit amount reduces to $3,500,000 after the fifth (5th) anniversary of the COD, provided that no Seller Event of Default is then outstanding and no Seller Event of Default has occurred and is continuing as of such date. The letter of credit shall be maintained throughout the term of the PPA (subject to the step-down described above) and shall be in a form customary for project finance transactions of this nature.

We note that the Seller letter of credit to be issued by Tralvendo creates a potential credit concentration issue for Tralvendo, as Tralvendo serves as both the issuing bank for the Seller LC and the Administrative Agent under the Credit Facility. We will coordinate with Tralvendo and WJC to confirm that this arrangement is acceptable under Tralvendo's internal credit policies and the terms of the Credit Facility.

Buyer Credit Support. Seller has requested that Buyer deliver a direct corporate guaranty from Meridian DataCore Solutions Inc. in an amount capped at $14,000,000, which is equal to approximately two (2) years of estimated PPA revenues. The guaranty would guarantee Buyer's payment and performance obligations under the PPA. As discussed in greater detail in Section 5.3 below, Buyer has not yet agreed to provide this guaranty, and the Buyer credit support requirement remains an open negotiation item.

4.5 Governing Law and Dispute Resolution

The parties have agreed to the following governing law and dispute resolution provisions:

• Governing Law: The PPA shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to conflict-of-laws principles.

• Dispute Resolution: Any dispute arising out of or relating to the PPA shall first be subject to a thirty (30)-day negotiation period between designated senior representatives of the parties. If the dispute is not resolved within the negotiation period, either party may submit the dispute to binding arbitration administered by the American Arbitration Association ("AAA") under its Commercial Arbitration Rules in New York, New York, before a panel of three (3) arbitrators. Each party shall appoint one arbitrator, and the two party-appointed arbitrators shall appoint the third arbitrator, who shall serve as chairperson of the panel. The arbitral award shall be final and binding and may be entered and enforced in any court of competent jurisdiction.

• Injunctive Relief: Notwithstanding the arbitration provisions, either party may seek injunctive or other equitable relief in the Supreme Court of the State of New York, County of New York, or the United States District Court for the Southern District of New York, in each case without the requirement to post a bond or other security.

New York governing law and AAA arbitration are customary for virtual PPAs of this nature and should be consistent with the expectations of the lender group.

4.6 Insurance

The PPA requires Seller to procure and maintain the following insurance coverages throughout the construction and operating periods of the Project, with specific minimum coverage amounts and policy terms to be set forth in Exhibit E to the PPA:

• Builder's Risk Insurance (during the construction period)

• Commercial General Liability Insurance

• Property / All-Risk Insurance (during the operating period)

• Business Interruption Insurance

The insurance program for the Project is being arranged through Fieldstone Risk Advisors LLC as insurance broker. The builder's risk and property/all-risk policies are expected to be placed with Commonwealth Mutual Insurance Co., and the commercial general liability policy is expected to be placed with Ridgeway Casualty Group Inc. We will coordinate with Tralvendo and the Independent Engineer to confirm that the insurance coverages specified in Exhibit E of the PPA are consistent with the insurance requirements under the Credit Facility.

5. Open Negotiation Issues

While significant progress has been made in the PPA negotiations, a number of material commercial and legal issues remain open between the parties. We summarize the principal open issues below, together with an assessment of their relevance to the lender group's bankability review.

5.1 Availability Guarantee

The availability guarantee is one of the most significant commercial terms of the PPA and is of direct relevance to the lender group's assessment of revenue certainty and debt service coverage. The parties' respective positions on the key components of the availability guarantee are as follows:

Availability Threshold.

Seller's Current Position: Guaranteed availability of ≥ 95.0% on a rolling twelve (12)-month basis, measured as Available Hours ÷ Period Hours × 100. Exclusions from the availability calculation include hours attributable to Force Majeure events, curtailment events (both ERCOT-directed and economic curtailment), and scheduled maintenance up to a maximum of 200 hours per year.

Buyer's Position: Guaranteed availability of ≥ 97.0% on a rolling twelve (12)-month basis, with Buyer proposing a narrower set of exclusions (Buyer has resisted the exclusion of economic curtailment from the availability calculation; see Section 5.4 below).

Availability Liquidated Damages.

Seller's Position: Liquidated damages of 0.50% of trailing twelve (12)-month PPA revenues per each 1.0% shortfall below the guaranteed availability threshold. At Year 1 P50 pricing (approximately $7,000,000 in annual PPA revenue), this would equal approximately $35,000 per 1.0% of shortfall.

Buyer's Position: Liquidated damages of 1.00% of trailing twelve (12)-month PPA revenues per each 1.0% shortfall below the guaranteed availability threshold. At Year 1 P50 pricing, this would equal approximately $70,000 per 1.0% of shortfall.

Liquidated Damages Cap.

Seller's Position: Annual LD cap of 5.0% of trailing twelve (12)-month PPA revenues, or approximately $350,000 at Year 1 P50 pricing.

Buyer's Position: Annual LD cap of 10.0% of trailing twelve (12)-month PPA revenues, or approximately $700,000 at Year 1 P50 pricing.

Termination Trigger.

Seller's Position: Buyer may terminate the PPA if availability falls below 85.0% in any two (2) consecutive twelve (12)-month periods, and such shortfall remains uncured.

Buyer's Position: Buyer may terminate the PPA if availability falls below 90.0% in any single twelve (12)-month period, without a consecutive-period requirement.

Relevance to Lender Group. The availability guarantee structure directly affects the Project's revenue profile and, consequently, the debt service coverage ratio ("DSCR") projections under the Credit Facility. We understand that the Credit Facility requires a minimum DSCR covenant of 1.30x. Based on Calderwood & Harkness's preliminary analysis using P50 generation assumptions, Year 1 Contract Price ($20.00/MWh), estimated annual PPA revenues of approximately $7,000,000, and estimated annual debt service of approximately $5,200,000, the projected Year 1 DSCR is approximately 1.35x. Higher availability LD exposure (i.e., at the Buyer's proposed LD rate and cap) would reduce the revenue available for debt service and compress the DSCR cushion above the 1.30x covenant level. Similarly, a lower termination threshold (i.e., at the Buyer's proposed 90.0% single-period trigger) increases the risk that the PPA could be terminated as a result of a single operational event, which would constitute an event of default under the Credit Facility.

Calderwood & Harkness is currently analyzing the quantitative DSCR impact of each party's position on the availability guarantee under various generation scenarios (P50, P75, P90) and will provide the results of that analysis to WJC and Tralvendo in a supplemental memorandum.

In the interim, Calderwood & Harkness is exploring a compromise position with Buyer's counsel that would include the following terms:

• Availability threshold: 96.0% on a rolling twelve (12)-month basis

• Liquidated damages rate: 0.75% of trailing twelve (12)-month PPA revenues per 1.0% shortfall

• Liquidated damages cap: 7.5% of trailing twelve (12)-month PPA revenues per measurement period (approximately $525,000 at Year 1 P50 pricing)

• Termination trigger: Buyer may terminate if availability falls below 87.5% in any two (2) consecutive twelve (12)-month periods, uncured after a reasonable cure period

We respectfully request that Tralvendo and WJC provide feedback on the bankability of these proposed compromise ranges at your earliest convenience, and confirm whether the compromise position, if accepted by Buyer, would be satisfactory to the lender group for purposes of the bankability assessment.

5.2 Change of Control

Change of control provisions are a significant area of ongoing negotiation, with implications for both the Buyer's contractual rights and the lender group's collateral protection. The parties' respective positions are as follows:

Seller Change of Control.

Seller's Position: A 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 of the transferor constitutes a "change of control" of Seller. Seller is required to provide at least thirty (30) days' prior written notice to Buyer of any proposed change of control. Buyer may terminate the PPA only if the successor entity fails to meet the Minimum Credit Threshold, defined as either (a) tangible net worth of at least $100,000,000, or (b) an investment-grade credit rating (BBB− or equivalent) from a nationally recognized credit rating agency.

Buyer's Position: Any change of control of Seller (using the same definition) requires Buyer's prior written consent, which shall not be unreasonably withheld, conditioned, or delayed. In addition, Buyer has proposed a consent fee of $1,500,000 payable to Buyer upon any consented change of control. Buyer may terminate the PPA within sixty (60) days following receipt of Seller's change of control notice if Buyer does not consent to the proposed change of control.

Reciprocal Buyer Change of Control.

Seller has proposed that the PPA include a reciprocal change of control provision applicable to Buyer. Under Seller's proposal, if Buyer undergoes a change of control and the successor entity's credit rating falls below BBB− (or the successor entity is unrated), Seller may demand additional credit support in the form of an irrevocable standby letter of credit in an amount equal to twelve (12) months' estimated payments under the PPA (approximately $7,000,000), to be posted within thirty (30) days following the change of control. If the successor entity fails to post such additional credit support, Seller may terminate the PPA. This provision is intended to protect the Project's revenue stream and, by extension, the lender group's collateral in the event of a deterioration in the creditworthiness of the Buyer following a change of control.

Lender Dimension. We note that the Credit Facility term sheet includes provisions that are directly relevant to the change of control negotiations, specifically:

(i) The Credit Facility requires the prior written consent of the lenders (acting through the Administrative Agent) to any assignment of the PPA or any change of control of Seller, whether direct or indirect; and

(ii) The Credit Facility requires that the PPA include customary lender-consent-to-assignment provisions and lender step-in rights (which are addressed in the Lender Consent Agreement discussed in Section 6 below).

These lender requirements must be reflected in the PPA's change of control provisions and are being coordinated with Buyer's counsel. Calderwood & Harkness is working to ensure that any change of control provision in the PPA is consistent with and does not conflict with the lender consent requirements under the Credit Facility.

Equity Sponsor Considerations. We also wish to flag for WJC's and Tralvendo's awareness that the change of control provisions have significant implications for Ridgepoint Capital Partners LP, which holds approximately sixty-eight percent (68%) of CBR's common equity. Overly restrictive change of control provisions in the PPA — particularly provisions requiring Buyer consent with a consent fee, or provisions that could trigger PPA termination upon an equity transfer — may impede a future exit, recapitalization, or refinancing by the equity sponsor. Calderwood & Harkness is seeking to negotiate change of control provisions that preserve reasonable flexibility for the equity sponsor while satisfying both Buyer's legitimate creditworthiness concerns and the lender group's collateral protection requirements. We welcome the lender group's input on an appropriate framework that balances these objectives.

5.3 Buyer Corporate Guaranty

As noted in Section 4.4 above, Seller has requested that Buyer deliver a direct corporate guaranty from Meridian DataCore Solutions Inc. in an amount capped at $14,000,000 (equal to approximately two years of estimated PPA revenues). The guaranty would guarantee Buyer's payment obligations and material performance obligations under the PPA and would be in a form customary for virtual PPAs with corporate offtakers.

To date, Buyer has not agreed to provide any form of Buyer credit support and has proposed that the PPA contain no Buyer credit support requirement. Buyer's counsel has informally indicated that Meridian views its investment-grade credit rating (BBB) and public company status as providing adequate assurance of creditworthiness. Seller's position is that, notwithstanding Meridian's current credit profile, the twenty-year term of the PPA creates meaningful long-term counterparty credit risk that warrants some form of credit support, particularly in light of the lender group's reliance on PPA revenues as the primary source of debt service.

Calderwood & Harkness transmitted the form of corporate guaranty to Hargrove & Linden LLP under cover of a letter dated August 9, 2025, together with a memorandum setting forth the rationale for the Buyer credit support requirement. We expect to receive Buyer's counsel's substantive response in the coming weeks and will keep WJC and Tralvendo apprised of developments.

From the lender group's perspective, the presence or absence of Buyer credit support is a material consideration in the bankability assessment. We request that Tralvendo confirm whether the lender group would require Buyer credit support as a condition to loan closing, and if so, the minimum form and amount of credit support that would be acceptable.

5.4 Curtailment Risk Allocation

The parties have differing views on the allocation of economic and dispatch curtailment risk. Curtailment risk is a significant issue for solar projects in the ERCOT West region, given the increasing penetration of renewable generation and the potential for transmission congestion and negative pricing events at the ERCOT West Hub.

Calderwood & Harkness is currently negotiating provisions to address both (a) ERCOT-directed curtailment (i.e., curtailment ordered by the ERCOT system operator for reliability or congestion management reasons) and (b) economic curtailment (i.e., curtailment elected by the Project operator in response to negative or low wholesale prices at the settlement hub). The key issues under negotiation include the allocation of economic losses resulting from curtailment, the treatment of curtailed energy in the availability guarantee calculation, and the interaction of curtailment provisions with the force majeure clause.

We are continuing to develop our position on these issues and expect to provide a detailed update on the curtailment risk allocation provisions in a subsequent communication to WJC and Tralvendo. We anticipate that the lender group will have a particular interest in ensuring that the PPA adequately protects Seller's revenue stream from the adverse effects of prolonged curtailment.

5.5 Force Majeure

Certain definitional differences remain between the parties regarding the scope of force majeure events and their interaction with the availability guarantee calculation. In particular, the parties are negotiating (a) whether certain categories of events (including grid failures, transmission outages, and extreme weather events) should be included within the definition of force majeure, (b) the maximum duration of a force majeure event before either party may terminate the PPA, and (c) the extent to which force majeure hours are excluded from the availability guarantee measurement.

These negotiations are ongoing, and we expect to resolve the remaining force majeure issues in the course of the next round of drafting. We will provide WJC and Tralvendo with an updated summary of the force majeure provisions once agreed.

6. Lender Consent Agreement (Exhibit F)

We confirm that the PPA will include, as Exhibit F, a Form of Lender Consent Agreement (also referred to as a Consent to Collateral Assignment and Lender Direct Agreement) among Saguaro Flats Solar LLC (as Seller), Meridian DataCore Solutions Inc. (as Buyer), and Tralvendo National Bank, N.A. (as Administrative Agent for the benefit of the lender group under the Credit Facility).

The Lender Consent Agreement is a critical component of the financing structure and will include the following key provisions:

(a) Consent to Collateral Assignment. Buyer's acknowledgment of and consent to the collateral assignment of the PPA by Seller to the Administrative Agent for the benefit of the lender group, as security for Seller's obligations under the Credit Facility.

(b) Lender Cure Rights. Upon the occurrence of a Seller Event of Default under the PPA, the Administrative Agent shall have the right (but not the obligation) to cure such Seller Event of Default within a specified cure period following receipt of notice from Buyer. Buyer shall not exercise any termination rights under the PPA unless and until the lender cure period has expired without the Administrative Agent (or its designee) having effected a cure.

(c) Lender Step-In Rights. The Administrative Agent shall have the right, upon the occurrence of a Seller Event of Default, to assume Seller's obligations under the PPA directly or to designate a substitute entity (reasonably acceptable to Buyer) to assume such obligations in Seller's place. This step-in right is intended to preserve the PPA as a going-concern contract for the benefit of the lender group in the event of a Seller default or insolvency.

(d) Replacement PPA. In the event that the PPA is terminated as a result of a Seller Event of Default (notwithstanding the lender cure and step-in rights described above), Buyer shall be obligated to enter into a replacement PPA with the Administrative Agent (or its designee) on substantially similar terms as the terminated PPA, for the remaining term of the original PPA.

(e) Concurrent Notice. Buyer shall provide copies of all default notices, termination notices, and other material notices delivered to Seller under the PPA concurrently to the Administrative Agent at the address specified in the Lender Consent Agreement.

A standalone draft of the Lender Consent Agreement has been prepared by Calderwood & Harkness and is available for WJC's review and comment. We will transmit the draft Lender Consent Agreement to your office under separate cover within the next several business days. We respectfully request that Tralvendo and WJC review the draft and confirm whether it satisfies the lender group's requirements or identify any additional provisions or modifications that the lender group would require. Given the target PPA execution date of September 15, 2025, prompt review and feedback on the Lender Consent Agreement would be greatly appreciated.

7. Syndicate Lender Information

For reference, the lending syndicate under the Credit Facility comprises the following institutions and commitments:

The principal financial terms of the Credit Facility, as set forth in the term sheet, are as follows:

• Interest Rate (Term Loan Period): Term SOFR + 175 basis points

• Interest Rate (Construction Period): Term SOFR + 200 basis points

• Tenor: Approximately eighteen (18)-month construction period, followed by an eighteen (18)-year amortizing term loan, for a total tenor of approximately 19.5 years

Calderwood & Harkness's coordination on PPA-related matters is with Tralvendo in its capacity as Administrative Agent. We respectfully request confirmation from WJC that it will circulate PPA-related materials (including this letter, the draft Lender Consent Agreement, and any subsequent updates) to the syndicate members and their respective counsel as appropriate under the terms of the Credit Facility documentation. If any syndicate member has specific PPA bankability requirements or comments that differ from those of the Administrative Agent, we would appreciate receiving such comments through WJC as a single coordinated set of lender comments to the extent practicable.

8. Timeline and Next Steps

We summarize below the key milestones and next steps in the PPA negotiation and construction loan closing process:

We respectfully request that WJC provide any preliminary bankability comments on the PPA terms summarized in this letter at its earliest convenience, and no later than August 22, 2025, to allow adequate time for incorporation of any lender-required modifications into the PPA drafts before the target execution date. To the extent that Tralvendo or the lender group identifies any material bankability concerns that may require significant redrafting or renegotiation of PPA terms, early identification of such concerns will be critical to maintaining the project timeline.

We would also be pleased to schedule a conference call among Calderwood & Harkness (Helen Nakamura, Patricia Dunmore, and Brett Callahan), WJC (Philip Thornton and any other relevant team members), and the CBR project finance team (Derek Engstrom, Vice President — Project Finance) to discuss any lender-side concerns regarding the PPA terms, the Lender Consent Agreement, or any other bankability matters. Please let us know your availability during the week of August 11, 2025, and we will coordinate a mutually convenient time.

9. Confidentiality Notice

We note that the PPA terms, negotiation details, pricing information, and other commercial terms described in this letter are confidential and are subject to the confidentiality obligations set forth in (a) the Credit Facility term sheet dated June 20, 2025 (Section 12 — Confidentiality), and (b) the confidentiality provisions of the PPA negotiation framework agreed between the parties. Accordingly, we request that distribution of this letter and its contents be limited to the lender group (including the syndicate members identified in Section 7 above) and their respective legal, financial, and technical advisors who have a need to review the information in connection with the Credit Facility and the bankability assessment of the PPA.

Any broader distribution or disclosure of the information contained in this letter should not be made without the prior written consent of Calloway-Briggs Renewables Inc.

We look forward to working with you and the lender group to finalize the PPA on terms that meet bankability requirements and support the successful closing of the Credit Facility and the construction and operation of the Saguaro Flats Solar Project. Please do not hesitate to contact me or Patricia Dunmore with any questions or to discuss any of the matters addressed in this letter.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Helen Nakamura Of Counsel — Project Finance Group

1100 Louisiana Street, Suite 4500 Houston, Texas 77002 Telephone: (713) 555-8247

Email: h.nakamura@calderwoodharkness.com

cc:

Patricia Dunmore, Esq. — Calderwood & Harkness LLP Brett Callahan, Esq. — Calderwood & Harkness LLP Derek Engstrom — Calloway-Briggs Renewables Inc. Rachel Muñoz — Calloway-Briggs Renewables Inc. Diane Roessler — Tralvendo National Bank, N.A.

Enclosures: None enclosed with this letter.

Note: Draft Lender Consent Agreement (Form of Consent to Collateral Assignment and Lender Direct Agreement) to follow under separate cover.

Parameter	Detail
Project Name	Saguaro Flats Solar Project
Technology	Ground-mounted single-axis tracking solar photovoltaic
Nameplate Capacity	195 MWdc / 150 MWac (DC:AC ratio ≈ 1.30)
Location	Approximately 1,400 acres in Pecos County, Texas; FM Road 1776, approximately 12 miles southeast of Fort Stockton, TX 79735
Ground Lease	35-year ground lease with Redrock Mesa Ranch LP
EPC Contractor	Sunbelt Power Construction LLC
EPC Contract Type	Fixed-price turnkey EPC contract
EPC Contract Value	$142,500,000
Total Estimated Project Cost	Approximately $154,300,000 (comprised of $142.5M EPC costs plus approximately $11.8M in soft costs, land acquisition and lease expenses, interconnection costs, and reserve funding)
Capital Structure (Debt/Equity)	70% Debt / 30% Equity (Debt: $108,000,000; Equity: approximately $46,300,000)
Estimated Annual Net Generation (P50)	350,000 MWh per year, as estimated by Heliograph Energy Consulting LLC (independent energy yield assessor)
Independent Engineer	Gresham Engineering Advisors Inc., retained by Tralvendo National Bank, N.A. on behalf of the lender group
Expected Commercial Operation Date	April 1, 2027
Contract Year	Contract Price ($/MWh)
Year 1–5	$20.00
Year 6	$20.30
Year 10	~$21.55
Year 15	~$23.22
Year 20	~$25.02
Lender	Commitment
Tralvendo National Bank, N.A. (Lead Arranger & Administrative Agent)	$21,000,000
Osprey Commercial Lending Corp.	$36,000,000
Grandview Savings Bank, FSB	$27,000,000
Blue Prairie Capital Markets LLC	$24,000,000

Total Commitments	$108,000,000
Milestone	Target Date
Circulation of Seller's Revised Second Draft PPA (counter-redline) to Hargrove & Linden LLP	On or about August 11, 2025
Target resolution of open issues (availability guarantee, change of control)	August 18, 2025
WJC / Tralvendo preliminary bankability comments due	August 22, 2025
Target PPA execution	September 15, 2025
Target construction loan closing	October 1, 2025
Target Notice to Proceed issuance to Sunbelt Power Construction LLC	October 15, 2025
Expected Commercial Operation Date	April 1, 2027

CALDERWOOD & HARKNESS LLP Attorneys at Law
1100 Louisiana Street, Suite 4500 Houston, Texas 77002
Telephone: (713) 555-8200 Facsimile: (713) 555-8201 www.calderwoodharkness.com
August 8, 2025
VIA EMAIL AND FIRST-CLASS MAIL
Philip Thornton, Esq. Whitfield Stroval & Cade LLP 51 West 52nd Street, 30th Floor New York, New York 10019
Re: Saguaro Flats Solar Project — Power Purchase Agreement Negotiation Status and Summary of Key Terms C&H Matter No. 1015-00002
Dear Mr. Thornton:
1. Introduction and Purpose
I am Helen Nakamura, Of Counsel in the Project Finance group at Calderwood & Harkness LLP. I am writing on behalf of our client, Calloway-Briggs Renewables Inc. ("CBR"), and its wholly owned subsidiary Saguaro Flats Solar LLC (the "Project Company"), in connection with the negotiation of the virtual power purchase agreement (the "PPA") for the Saguaro Flats Solar Project (the "Project").
As you are aware, Calderwood & Harkness represents CBR in its capacity as Seller's counsel in the negotiation of a twenty (20)-year virtual power purchase agreement with Meridian DataCore Solutions Inc. ("Meridian" or "Buyer"; Nasdaq: MDCS) for the full energy output and associated environmental attributes of the Project. The PPA is structured as a contract for differences settled against the ERCOT West Hub price, and is a critical foundational agreement for the overall financing and development of the Project.
The purpose of this letter is to provide Whitfield Stroval & Cade LLP ("WJC"), in its capacity as counsel to Tralvendo National Bank, N.A. ("Tralvendo"), acting as Administrative Agent and Lead Arranger for the one hundred eight million dollar ($108,000,000) senior secured construction-to-term loan facility (the "Credit Facility"), with a comprehensive update on the current status of PPA negotiations and a detailed summary of the principal commercial and legal terms of the PPA as currently negotiated. We are providing this summary at this time to facilitate Tralvendo's and the lender group's assessment of the bankability of the PPA and to enable WJC to commence its review of the PPA terms against customary lender requirements in advance of loan closing.
Our target date for execution of the PPA is September 15, 2025, with a target construction loan closing date of October 1, 2025. As set forth in the Credit Facility term sheet dated June 20, 2025, the execution and delivery of the PPA on terms satisfactory to the Administrative Agent and the Independent Engineer is a condition precedent to the first draw under the Credit Facility. Accordingly, lender bankability sign-off on the PPA is required prior to the loan closing date, and we are committed to working collaboratively with WJC and Tralvendo to ensure that the PPA meets all lender requirements within the project timeline.
This letter and the PPA negotiation are being overseen by Patricia Dunmore, Responsible Partner in our Energy & Infrastructure practice. I am coordinating all lender-related PPA matters and will serve as the primary point of contact for WJC on all issues relating to the form and substance of the PPA, the Lender Consent Agreement, and related bankability considerations. My colleague Brett Callahan, an associate in our Project Finance group, is also supporting this engagement and may be in contact with your team from time to time on specific drafting matters.
2. Parties to the PPA
2.1 Seller
The Seller under the PPA is Saguaro Flats Solar LLC, a Delaware limited liability company formed for the sole purpose of developing, constructing, owning, and operating the Project. The Project Company is one hundred percent (100%) owned and managed by Calloway-Briggs Renewables Inc., a Delaware corporation headquartered at 4200 Travis Street, Suite 1800, Houston, Texas 77002. The Project Company's registered agent is Capitol Registered Agents LLC, located at 850 New Burton Road, Suite 201, Dover, Delaware 19904. The Project Company's federal Employer Identification Number is 93-1284506.
CBR is an independent renewable energy developer and operator with an operating and under-construction portfolio of approximately 1.8 GW of solar photovoltaic and wind energy assets located across the ERCOT, SPP, and MISO wholesale electricity markets. CBR was founded in 2011 and has an established track record of developing, financing, and operating utility-scale renewable energy projects. For the fiscal year ended December 31, 2024, CBR reported consolidated revenue of approximately $312 million and adjusted EBITDA of approximately $118 million. CBR's corporate family rating as assigned by Pinnacle Ratings Group is BBB−.
CBR's majority equity sponsor is Ridgepoint Capital Partners LP, which holds approximately sixty-eight percent (68%) of CBR's common equity. Ridgepoint Capital Partners LP is a Houston-based infrastructure-focused private equity firm; its Managing Partner is Alan Driscoll. The remaining equity in CBR is held by management and other minority investors.
2.2 Buyer
The Buyer under the PPA is Meridian DataCore Solutions Inc., a Delaware corporation headquartered at 700 Lakeshore Parkway, Building C, Austin, Texas 78746. Meridian is a leading hyperscale and co-location data center operator with fourteen (14) campuses representing approximately 480 MW of critical IT load across Texas, Virginia, Ohio, and Nevada. Meridian is publicly traded on the Nasdaq Stock Market under the ticker symbol "MDCS," with a market capitalization of approximately $8.2 billion as of June 30, 2025. For the fiscal year ended December 31, 2024, Meridian reported revenue of approximately $2.1 billion and adjusted EBITDA of approximately $740 million. Meridian's corporate credit rating as assigned by Pinnacle Ratings Group is BBB.
Meridian is represented in the PPA negotiation by Hargrove & Linden LLP, an Austin, Texas-based law firm. The lead partner on the Buyer's side is Evelyn Crumveth.
3. Project Overview
Set forth below is a summary of the key characteristics and development status of the Saguaro Flats Solar Project:
Interconnection. The ERCOT Full Interconnection Study for the Project was completed on March 14, 2025, and the Large Generation Interconnection Agreement ("LGIA") was executed on May 15, 2025, between the Project Company and West Texas Wires LLC, the applicable transmission service provider. The Project holds Queue Position ERCOT-GI-2024-0437. The Project will interconnect at the Ft. Stockton 345 kV Substation. No material interconnection upgrades requiring third-party cost sharing have been identified in the interconnection study, and the estimated cost of Seller-funded interconnection facilities is included in the total estimated project cost set forth above.
Permits and Approvals. The Pecos County Conditional Use Permit for the Project was approved on February 10, 2025 (CUP-2025-012), authorizing the construction and operation of a utility-scale solar photovoltaic facility on the project site. The Project Company has submitted the required Stormwater Pollution Prevention Plan to the Texas Commission on Environmental Quality ("TCEQ") in accordance with the TCEQ Construction General Permit. No individual environmental permit is required for the Project based on the environmental assessments completed to date. Additional routine construction-phase permits (e.g., access road permits, building permits for inverter stations and the operations and maintenance building) will be obtained prior to Notice to Proceed.
Tax Credits. The Project is intended to qualify for the thirty percent (30%) Investment Tax Credit under Section 48 of the Internal Revenue Code of 1986, as amended, as extended and modified by the Inflation Reduction Act of 2022. Based on the estimated eligible project cost basis of approximately $142,500,000, the estimated ITC value is approximately $42,750,000. CBR intends to monetize the ITC through a tax equity partnership structure; however, tax equity arrangements are being negotiated separately and are not the subject of this letter. We note that the PPA must be structured and documented to preserve the Project's eligibility for the ITC, and we have been attentive to this requirement throughout the PPA negotiation.
4. Summary of Key PPA Terms
Set forth below is a summary of the principal commercial and legal terms of the PPA as currently negotiated between the parties. Where terms have been agreed, we have identified them as such. Where terms remain under negotiation or subject to open issues, cross-references to Section 5 of this letter are provided.
4.1 Contract Structure
The PPA is structured as a virtual (financial) power purchase agreement in the form of a contract for differences ("CfD"). Under this structure, no physical delivery of electricity occurs between Seller and Buyer. Instead, the parties settle financially on a monthly basis based on the difference between the fixed Contract Price and the applicable floating market reference price.
The designated Settlement Hub is the ERCOT West Hub. For each settlement period, the net settlement amount is calculated as the Contract Price minus the Hub Price, multiplied by the volume of energy generated and delivered to the ERCOT grid during such period. If the Contract Price exceeds the Hub Price, Buyer pays the difference to Seller. If the Hub Price exceeds the Contract Price, Seller pays the difference to Buyer. In all cases, Seller receives the spot settlement at the ERCOT West Hub from the market for the physical energy produced, and the CfD settlement provides Seller with a fixed revenue stream equal to the Contract Price for each MWh generated by the Project.
This virtual PPA structure is consistent with market-standard renewable energy procurement structures utilized by corporate offtakers in the ERCOT market and should be familiar to the lender group. We note that because the PPA is a financial instrument and does not involve physical delivery, the PPA does not create a firm delivery obligation, and generation risk is borne primarily by Seller (subject to the availability guarantee provisions discussed below).
4.2 Term
The PPA has a term of twenty (20) years commencing on the Commercial Operation Date (the "COD"). Based on the expected COD of April 1, 2027, the PPA is expected to expire on March 31, 2047.
The twenty-year term provides a contracted revenue stream that significantly exceeds the approximately 19.5-year tenor of the Credit Facility (including the approximately eighteen-month construction period and the eighteen-year amortizing term loan period), thereby ensuring that the PPA remains in effect through the final maturity date of the Credit Facility and providing a contractual tail of approximately six months. We will confirm with Tralvendo whether additional tail coverage is required or desirable from the lender group's perspective.
4.3 Contract Price and Escalation
The following pricing terms have been agreed between the parties:
• Initial Contract Price: $20.00 per MWh, fixed for Contract Years 1 through 5 (i.e., from COD through the fifth anniversary of COD).
• Annual Escalation: Beginning in Contract Year 6, the Contract Price escalates at a rate of 1.50% per annum, compounding annually. The escalation applies on each anniversary of the COD beginning with the sixth anniversary.
For reference, the escalated Contract Price at selected intervals over the PPA term is as follows:
Based on the P50 annual net generation estimate of 350,000 MWh per year, the aggregate nominal PPA value over the full twenty-year term is estimated at approximately $140,000,000, with an average annual contract value of approximately $7,000,000 per year. The total contracted volume at P50 over the PPA term is approximately 7,000,000 MWh, yielding a blended average contract price of approximately $20.00/MWh.
We believe these pricing terms are consistent with current market levels for long-term virtual PPAs with investment-grade corporate offtakers in the ERCOT West region and should provide a stable and predictable revenue stream to support the Credit Facility.
4.4 Credit Support
The parties have agreed in principle (subject to finalization of the Buyer credit support issue discussed in Section 5.3 below) on the following credit support framework:
Seller Credit Support. Seller shall deliver to Buyer an irrevocable standby letter of credit issued by Tralvendo National Bank, N.A. (or another financial institution meeting the requirements specified in the PPA) in the initial face amount of $7,000,000, which is equal to approximately one (1) year of estimated PPA revenues at P50 generation and Year 1 pricing. The Seller letter of credit amount reduces to $3,500,000 after the fifth (5th) anniversary of the COD, provided that no Seller Event of Default is then outstanding and no Seller Event of Default has occurred and is continuing as of such date. The letter of credit shall be maintained throughout the term of the PPA (subject to the step-down described above) and shall be in a form customary for project finance transactions of this nature.
We note that the Seller letter of credit to be issued by Tralvendo creates a potential credit concentration issue for Tralvendo, as Tralvendo serves as both the issuing bank for the Seller LC and the Administrative Agent under the Credit Facility. We will coordinate with Tralvendo and WJC to confirm that this arrangement is acceptable under Tralvendo's internal credit policies and the terms of the Credit Facility.
Buyer Credit Support. Seller has requested that Buyer deliver a direct corporate guaranty from Meridian DataCore Solutions Inc. in an amount capped at $14,000,000, which is equal to approximately two (2) years of estimated PPA revenues. The guaranty would guarantee Buyer's payment and performance obligations under the PPA. As discussed in greater detail in Section 5.3 below, Buyer has not yet agreed to provide this guaranty, and the Buyer credit support requirement remains an open negotiation item.
4.5 Governing Law and Dispute Resolution
The parties have agreed to the following governing law and dispute resolution provisions:
• Governing Law: The PPA shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to conflict-of-laws principles.
• Dispute Resolution: Any dispute arising out of or relating to the PPA shall first be subject to a thirty (30)-day negotiation period between designated senior representatives of the parties. If the dispute is not resolved within the negotiation period, either party may submit the dispute to binding arbitration administered by the American Arbitration Association ("AAA") under its Commercial Arbitration Rules in New York, New York, before a panel of three (3) arbitrators. Each party shall appoint one arbitrator, and the two party-appointed arbitrators shall appoint the third arbitrator, who shall serve as chairperson of the panel. The arbitral award shall be final and binding and may be entered and enforced in any court of competent jurisdiction.
• Injunctive Relief: Notwithstanding the arbitration provisions, either party may seek injunctive or other equitable relief in the Supreme Court of the State of New York, County of New York, or the United States District Court for the Southern District of New York, in each case without the requirement to post a bond or other security.
New York governing law and AAA arbitration are customary for virtual PPAs of this nature and should be consistent with the expectations of the lender group.
4.6 Insurance
The PPA requires Seller to procure and maintain the following insurance coverages throughout the construction and operating periods of the Project, with specific minimum coverage amounts and policy terms to be set forth in Exhibit E to the PPA:
• Builder's Risk Insurance (during the construction period)
• Commercial General Liability Insurance
• Property / All-Risk Insurance (during the operating period)
• Business Interruption Insurance
The insurance program for the Project is being arranged through Fieldstone Risk Advisors LLC as insurance broker. The builder's risk and property/all-risk policies are expected to be placed with Commonwealth Mutual Insurance Co., and the commercial general liability policy is expected to be placed with Ridgeway Casualty Group Inc. We will coordinate with Tralvendo and the Independent Engineer to confirm that the insurance coverages specified in Exhibit E of the PPA are consistent with the insurance requirements under the Credit Facility.
5. Open Negotiation Issues
While significant progress has been made in the PPA negotiations, a number of material commercial and legal issues remain open between the parties. We summarize the principal open issues below, together with an assessment of their relevance to the lender group's bankability review.
5.1 Availability Guarantee
The availability guarantee is one of the most significant commercial terms of the PPA and is of direct relevance to the lender group's assessment of revenue certainty and debt service coverage. The parties' respective positions on the key components of the availability guarantee are as follows:
Availability Threshold.
Seller's Current Position: Guaranteed availability of ≥ 95.0% on a rolling twelve (12)-month basis, measured as Available Hours ÷ Period Hours × 100. Exclusions from the availability calculation include hours attributable to Force Majeure events, curtailment events (both ERCOT-directed and economic curtailment), and scheduled maintenance up to a maximum of 200 hours per year.
Buyer's Position: Guaranteed availability of ≥ 97.0% on a rolling twelve (12)-month basis, with Buyer proposing a narrower set of exclusions (Buyer has resisted the exclusion of economic curtailment from the availability calculation; see Section 5.4 below).
Availability Liquidated Damages.
Seller's Position: Liquidated damages of 0.50% of trailing twelve (12)-month PPA revenues per each 1.0% shortfall below the guaranteed availability threshold. At Year 1 P50 pricing (approximately $7,000,000 in annual PPA revenue), this would equal approximately $35,000 per 1.0% of shortfall.
Buyer's Position: Liquidated damages of 1.00% of trailing twelve (12)-month PPA revenues per each 1.0% shortfall below the guaranteed availability threshold. At Year 1 P50 pricing, this would equal approximately $70,000 per 1.0% of shortfall.
Liquidated Damages Cap.
Seller's Position: Annual LD cap of 5.0% of trailing twelve (12)-month PPA revenues, or approximately $350,000 at Year 1 P50 pricing.
Buyer's Position: Annual LD cap of 10.0% of trailing twelve (12)-month PPA revenues, or approximately $700,000 at Year 1 P50 pricing.
Termination Trigger.
Seller's Position: Buyer may terminate the PPA if availability falls below 85.0% in any two (2) consecutive twelve (12)-month periods, and such shortfall remains uncured.
Buyer's Position: Buyer may terminate the PPA if availability falls below 90.0% in any single twelve (12)-month period, without a consecutive-period requirement.
Relevance to Lender Group. The availability guarantee structure directly affects the Project's revenue profile and, consequently, the debt service coverage ratio ("DSCR") projections under the Credit Facility. We understand that the Credit Facility requires a minimum DSCR covenant of 1.30x. Based on Calderwood & Harkness's preliminary analysis using P50 generation assumptions, Year 1 Contract Price ($20.00/MWh), estimated annual PPA revenues of approximately $7,000,000, and estimated annual debt service of approximately $5,200,000, the projected Year 1 DSCR is approximately 1.35x. Higher availability LD exposure (i.e., at the Buyer's proposed LD rate and cap) would reduce the revenue available for debt service and compress the DSCR cushion above the 1.30x covenant level. Similarly, a lower termination threshold (i.e., at the Buyer's proposed 90.0% single-period trigger) increases the risk that the PPA could be terminated as a result of a single operational event, which would constitute an event of default under the Credit Facility.
Calderwood & Harkness is currently analyzing the quantitative DSCR impact of each party's position on the availability guarantee under various generation scenarios (P50, P75, P90) and will provide the results of that analysis to WJC and Tralvendo in a supplemental memorandum.
In the interim, Calderwood & Harkness is exploring a compromise position with Buyer's counsel that would include the following terms:
• Availability threshold: 96.0% on a rolling twelve (12)-month basis
• Liquidated damages rate: 0.75% of trailing twelve (12)-month PPA revenues per 1.0% shortfall
• Liquidated damages cap: 7.5% of trailing twelve (12)-month PPA revenues per measurement period (approximately $525,000 at Year 1 P50 pricing)
• Termination trigger: Buyer may terminate if availability falls below 87.5% in any two (2) consecutive twelve (12)-month periods, uncured after a reasonable cure period
We respectfully request that Tralvendo and WJC provide feedback on the bankability of these proposed compromise ranges at your earliest convenience, and confirm whether the compromise position, if accepted by Buyer, would be satisfactory to the lender group for purposes of the bankability assessment.
5.2 Change of Control
Change of control provisions are a significant area of ongoing negotiation, with implications for both the Buyer's contractual rights and the lender group's collateral protection. The parties' respective positions are as follows:
Seller Change of Control.
Seller's Position: A 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 of the transferor constitutes a "change of control" of Seller. Seller is required to provide at least thirty (30) days' prior written notice to Buyer of any proposed change of control. Buyer may terminate the PPA only if the successor entity fails to meet the Minimum Credit Threshold, defined as either (a) tangible net worth of at least $100,000,000, or (b) an investment-grade credit rating (BBB− or equivalent) from a nationally recognized credit rating agency.
Buyer's Position: Any change of control of Seller (using the same definition) requires Buyer's prior written consent, which shall not be unreasonably withheld, conditioned, or delayed. In addition, Buyer has proposed a consent fee of $1,500,000 payable to Buyer upon any consented change of control. Buyer may terminate the PPA within sixty (60) days following receipt of Seller's change of control notice if Buyer does not consent to the proposed change of control.
Reciprocal Buyer Change of Control.
Seller has proposed that the PPA include a reciprocal change of control provision applicable to Buyer. Under Seller's proposal, if Buyer undergoes a change of control and the successor entity's credit rating falls below BBB− (or the successor entity is unrated), Seller may demand additional credit support in the form of an irrevocable standby letter of credit in an amount equal to twelve (12) months' estimated payments under the PPA (approximately $7,000,000), to be posted within thirty (30) days following the change of control. If the successor entity fails to post such additional credit support, Seller may terminate the PPA. This provision is intended to protect the Project's revenue stream and, by extension, the lender group's collateral in the event of a deterioration in the creditworthiness of the Buyer following a change of control.
Lender Dimension. We note that the Credit Facility term sheet includes provisions that are directly relevant to the change of control negotiations, specifically:
(i) The Credit Facility requires the prior written consent of the lenders (acting through the Administrative Agent) to any assignment of the PPA or any change of control of Seller, whether direct or indirect; and
(ii) The Credit Facility requires that the PPA include customary lender-consent-to-assignment provisions and lender step-in rights (which are addressed in the Lender Consent Agreement discussed in Section 6 below).
These lender requirements must be reflected in the PPA's change of control provisions and are being coordinated with Buyer's counsel. Calderwood & Harkness is working to ensure that any change of control provision in the PPA is consistent with and does not conflict with the lender consent requirements under the Credit Facility.
Equity Sponsor Considerations. We also wish to flag for WJC's and Tralvendo's awareness that the change of control provisions have significant implications for Ridgepoint Capital Partners LP, which holds approximately sixty-eight percent (68%) of CBR's common equity. Overly restrictive change of control provisions in the PPA — particularly provisions requiring Buyer consent with a consent fee, or provisions that could trigger PPA termination upon an equity transfer — may impede a future exit, recapitalization, or refinancing by the equity sponsor. Calderwood & Harkness is seeking to negotiate change of control provisions that preserve reasonable flexibility for the equity sponsor while satisfying both Buyer's legitimate creditworthiness concerns and the lender group's collateral protection requirements. We welcome the lender group's input on an appropriate framework that balances these objectives.
5.3 Buyer Corporate Guaranty
As noted in Section 4.4 above, Seller has requested that Buyer deliver a direct corporate guaranty from Meridian DataCore Solutions Inc. in an amount capped at $14,000,000 (equal to approximately two years of estimated PPA revenues). The guaranty would guarantee Buyer's payment obligations and material performance obligations under the PPA and would be in a form customary for virtual PPAs with corporate offtakers.
To date, Buyer has not agreed to provide any form of Buyer credit support and has proposed that the PPA contain no Buyer credit support requirement. Buyer's counsel has informally indicated that Meridian views its investment-grade credit rating (BBB) and public company status as providing adequate assurance of creditworthiness. Seller's position is that, notwithstanding Meridian's current credit profile, the twenty-year term of the PPA creates meaningful long-term counterparty credit risk that warrants some form of credit support, particularly in light of the lender group's reliance on PPA revenues as the primary source of debt service.
Calderwood & Harkness transmitted the form of corporate guaranty to Hargrove & Linden LLP under cover of a letter dated August 9, 2025, together with a memorandum setting forth the rationale for the Buyer credit support requirement. We expect to receive Buyer's counsel's substantive response in the coming weeks and will keep WJC and Tralvendo apprised of developments.
From the lender group's perspective, the presence or absence of Buyer credit support is a material consideration in the bankability assessment. We request that Tralvendo confirm whether the lender group would require Buyer credit support as a condition to loan closing, and if so, the minimum form and amount of credit support that would be acceptable.
5.4 Curtailment Risk Allocation
The parties have differing views on the allocation of economic and dispatch curtailment risk. Curtailment risk is a significant issue for solar projects in the ERCOT West region, given the increasing penetration of renewable generation and the potential for transmission congestion and negative pricing events at the ERCOT West Hub.
Calderwood & Harkness is currently negotiating provisions to address both (a) ERCOT-directed curtailment (i.e., curtailment ordered by the ERCOT system operator for reliability or congestion management reasons) and (b) economic curtailment (i.e., curtailment elected by the Project operator in response to negative or low wholesale prices at the settlement hub). The key issues under negotiation include the allocation of economic losses resulting from curtailment, the treatment of curtailed energy in the availability guarantee calculation, and the interaction of curtailment provisions with the force majeure clause.
We are continuing to develop our position on these issues and expect to provide a detailed update on the curtailment risk allocation provisions in a subsequent communication to WJC and Tralvendo. We anticipate that the lender group will have a particular interest in ensuring that the PPA adequately protects Seller's revenue stream from the adverse effects of prolonged curtailment.
5.5 Force Majeure
Certain definitional differences remain between the parties regarding the scope of force majeure events and their interaction with the availability guarantee calculation. In particular, the parties are negotiating (a) whether certain categories of events (including grid failures, transmission outages, and extreme weather events) should be included within the definition of force majeure, (b) the maximum duration of a force majeure event before either party may terminate the PPA, and (c) the extent to which force majeure hours are excluded from the availability guarantee measurement.
These negotiations are ongoing, and we expect to resolve the remaining force majeure issues in the course of the next round of drafting. We will provide WJC and Tralvendo with an updated summary of the force majeure provisions once agreed.
6. Lender Consent Agreement (Exhibit F)
We confirm that the PPA will include, as Exhibit F, a Form of Lender Consent Agreement (also referred to as a Consent to Collateral Assignment and Lender Direct Agreement) among Saguaro Flats Solar LLC (as Seller), Meridian DataCore Solutions Inc. (as Buyer), and Tralvendo National Bank, N.A. (as Administrative Agent for the benefit of the lender group under the Credit Facility).
The Lender Consent Agreement is a critical component of the financing structure and will include the following key provisions:
(a) Consent to Collateral Assignment. Buyer's acknowledgment of and consent to the collateral assignment of the PPA by Seller to the Administrative Agent for the benefit of the lender group, as security for Seller's obligations under the Credit Facility.
(b) Lender Cure Rights. Upon the occurrence of a Seller Event of Default under the PPA, the Administrative Agent shall have the right (but not the obligation) to cure such Seller Event of Default within a specified cure period following receipt of notice from Buyer. Buyer shall not exercise any termination rights under the PPA unless and until the lender cure period has expired without the Administrative Agent (or its designee) having effected a cure.
(c) Lender Step-In Rights. The Administrative Agent shall have the right, upon the occurrence of a Seller Event of Default, to assume Seller's obligations under the PPA directly or to designate a substitute entity (reasonably acceptable to Buyer) to assume such obligations in Seller's place. This step-in right is intended to preserve the PPA as a going-concern contract for the benefit of the lender group in the event of a Seller default or insolvency.
(d) Replacement PPA. In the event that the PPA is terminated as a result of a Seller Event of Default (notwithstanding the lender cure and step-in rights described above), Buyer shall be obligated to enter into a replacement PPA with the Administrative Agent (or its designee) on substantially similar terms as the terminated PPA, for the remaining term of the original PPA.
(e) Concurrent Notice. Buyer shall provide copies of all default notices, termination notices, and other material notices delivered to Seller under the PPA concurrently to the Administrative Agent at the address specified in the Lender Consent Agreement.
A standalone draft of the Lender Consent Agreement has been prepared by Calderwood & Harkness and is available for WJC's review and comment. We will transmit the draft Lender Consent Agreement to your office under separate cover within the next several business days. We respectfully request that Tralvendo and WJC review the draft and confirm whether it satisfies the lender group's requirements or identify any additional provisions or modifications that the lender group would require. Given the target PPA execution date of September 15, 2025, prompt review and feedback on the Lender Consent Agreement would be greatly appreciated.
7. Syndicate Lender Information
For reference, the lending syndicate under the Credit Facility comprises the following institutions and commitments:
The principal financial terms of the Credit Facility, as set forth in the term sheet, are as follows:
• Interest Rate (Term Loan Period): Term SOFR + 175 basis points
• Interest Rate (Construction Period): Term SOFR + 200 basis points
• Tenor: Approximately eighteen (18)-month construction period, followed by an eighteen (18)-year amortizing term loan, for a total tenor of approximately 19.5 years
Calderwood & Harkness's coordination on PPA-related matters is with Tralvendo in its capacity as Administrative Agent. We respectfully request confirmation from WJC that it will circulate PPA-related materials (including this letter, the draft Lender Consent Agreement, and any subsequent updates) to the syndicate members and their respective counsel as appropriate under the terms of the Credit Facility documentation. If any syndicate member has specific PPA bankability requirements or comments that differ from those of the Administrative Agent, we would appreciate receiving such comments through WJC as a single coordinated set of lender comments to the extent practicable.
8. Timeline and Next Steps
We summarize below the key milestones and next steps in the PPA negotiation and construction loan closing process:
We respectfully request that WJC provide any preliminary bankability comments on the PPA terms summarized in this letter at its earliest convenience, and no later than August 22, 2025, to allow adequate time for incorporation of any lender-required modifications into the PPA drafts before the target execution date. To the extent that Tralvendo or the lender group identifies any material bankability concerns that may require significant redrafting or renegotiation of PPA terms, early identification of such concerns will be critical to maintaining the project timeline.
We would also be pleased to schedule a conference call among Calderwood & Harkness (Helen Nakamura, Patricia Dunmore, and Brett Callahan), WJC (Philip Thornton and any other relevant team members), and the CBR project finance team (Derek Engstrom, Vice President — Project Finance) to discuss any lender-side concerns regarding the PPA terms, the Lender Consent Agreement, or any other bankability matters. Please let us know your availability during the week of August 11, 2025, and we will coordinate a mutually convenient time.
9. Confidentiality Notice
We note that the PPA terms, negotiation details, pricing information, and other commercial terms described in this letter are confidential and are subject to the confidentiality obligations set forth in (a) the Credit Facility term sheet dated June 20, 2025 (Section 12 — Confidentiality), and (b) the confidentiality provisions of the PPA negotiation framework agreed between the parties. Accordingly, we request that distribution of this letter and its contents be limited to the lender group (including the syndicate members identified in Section 7 above) and their respective legal, financial, and technical advisors who have a need to review the information in connection with the Credit Facility and the bankability assessment of the PPA.
Any broader distribution or disclosure of the information contained in this letter should not be made without the prior written consent of Calloway-Briggs Renewables Inc.
We look forward to working with you and the lender group to finalize the PPA on terms that meet bankability requirements and support the successful closing of the Credit Facility and the construction and operation of the Saguaro Flats Solar Project. Please do not hesitate to contact me or Patricia Dunmore with any questions or to discuss any of the matters addressed in this letter.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Helen Nakamura Of Counsel — Project Finance Group
1100 Louisiana Street, Suite 4500 Houston, Texas 77002 Telephone: (713) 555-8247
Email: h.nakamura@calderwoodharkness.com
cc:
Patricia Dunmore, Esq. — Calderwood & Harkness LLP Brett Callahan, Esq. — Calderwood & Harkness LLP Derek Engstrom — Calloway-Briggs Renewables Inc. Rachel Muñoz — Calloway-Briggs Renewables Inc. Diane Roessler — Tralvendo National Bank, N.A.
Enclosures: None enclosed with this letter.
Note: Draft Lender Consent Agreement (Form of Consent to Collateral Assignment and Lender Direct Agreement) to follow under separate cover.
Parameter | Detail
Project Name | Saguaro Flats Solar Project
Technology | Ground-mounted single-axis tracking solar photovoltaic
Nameplate Capacity | 195 MWdc / 150 MWac (DC:AC ratio ≈ 1.30)
Location | Approximately 1,400 acres in Pecos County, Texas; FM Road 1776, approximately 12 miles southeast of Fort Stockton, TX 79735
Ground Lease | 35-year ground lease with Redrock Mesa Ranch LP
EPC Contractor | Sunbelt Power Construction LLC
EPC Contract Type | Fixed-price turnkey EPC contract
EPC Contract Value | $142,500,000
Total Estimated Project Cost | Approximately $154,300,000 (comprised of $142.5M EPC costs plus approximately $11.8M in soft costs, land acquisition and lease expenses, interconnection costs, and reserve funding)
Capital Structure (Debt/Equity) | 70% Debt / 30% Equity (Debt: $108,000,000; Equity: approximately $46,300,000)
Estimated Annual Net Generation (P50) | 350,000 MWh per year, as estimated by Heliograph Energy Consulting LLC (independent energy yield assessor)
Independent Engineer | Gresham Engineering Advisors Inc., retained by Tralvendo National Bank, N.A. on behalf of the lender group
Expected Commercial Operation Date | April 1, 2027
Contract Year | Contract Price ($/MWh)
Year 1–5 | $20.00
Year 6 | $20.30
Year 10 | ~$21.55
Year 15 | ~$23.22
Year 20 | ~$25.02
Lender | Commitment
Tralvendo National Bank, N.A. (Lead Arranger & Administrative Agent) | $21,000,000
Osprey Commercial Lending Corp. | $36,000,000
Grandview Savings Bank, FSB | $27,000,000
Blue Prairie Capital Markets LLC | $24,000,000
Total Commitments | $108,000,000
Milestone | Target Date
Circulation of Seller's Revised Second Draft PPA (counter-redline) to Hargrove & Linden LLP | On or about August 11, 2025
Target resolution of open issues (availability guarantee, change of control) | August 18, 2025
WJC / Tralvendo preliminary bankability comments due | August 22, 2025
Target PPA execution | September 15, 2025
Target construction loan closing | October 1, 2025
Target Notice to Proceed issuance to Sunbelt Power Construction LLC | October 15, 2025
Expected Commercial Operation Date | April 1, 2027

CALDERWOOD & HARKNESS LLP Attorneys at Law

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