Contract analysis

I. Executive Summary and Purpose A. Purpose of This Memorandum The purpose of this memorandum is to assess the readiness of Calloway-Briggs Renewables Inc. ("CBR" or the "Company"), a Delaware corporation headquartered at 4200 Ridgeline Parkway, Suite 1100, Austin, Texas 78746, to undertake a proposed initial public offering (the "IPO") of approximately $600,000,000 of its common stock, par value $0.001 per share (th

1. Corporate Governance and Board Composition

2. Board Committee Structure and Charters

3. Financial Reporting and Internal Controls (SOX)

4. Disclosure Controls and Procedures

6. Code of Conduct and Ethics

7. Executive Compensation and Equity Plans

8. Regulatory and Exchange Compliance

9. Related-Party Transactions Remediation

10. Other Public-Company Infrastructure The balance of this memorandum addresses each workstream in turn, identifies applicable legal requirements, assesses the Company's current state of readiness, provides our recommendations, and establishes a specific timeline and set of action items for remediation.

II. Company Overview and Current Organizational Structure A. Entity Structure CBR is organized as a Delaware C-corporation (EIN: 83-4027615). The Company's registered agent is Capitol Statutory Services, Inc., located at 1209 Orange Street, Wilmington, Delaware 19801. The Company's corporate structure is organized in a multi-tiered holding-company format that is typical for utility-scale renewable energy platforms, w

III. Corporate Governance — Board Composition and Independence A. NYSE Listing Standards — Independent Director Requirements

Section 303A of the NYSE Listed Company Manual requires that listed companies maintain a majority of independent directors on their boards. Under the NYSE rules, a director qualifies as "independent" only if the board affirmatively determines that the director has no material relationship with the listed company, either directly or as a partner, shareholder, or officer of an organization that has a relationship with

1. Confirm Board Composition. The Company should confirm the composition of the Board at the time of listing. If the controlled-company exemption is available and the Company elects to rely upon it, no additional independent director appointments are required. However, we recommend that the Company consider voluntarily expanding the Board by one or two additional independent directors to strengthen governance optics

2. Prepare IPO Charter and Bylaws. Calderwood & Harkness will prepare an Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws (collectively, the "IPO Charter Documents") for adoption in connection with the IPO. The IPO Charter Documents should include the following governance provisions: (a) A classified board structure with three classes of directors, each serving staggered three-year te

3. Timeline. Board composition should be finalized before the S-1 filing. Drafts of the IPO Charter Documents are to be circulated by March 28, 2022.

IV. Board Committee Structure and Charter Requirements A. Audit Committee

1. Applicable Requirements Both the NYSE Listed Company Manual (Section 303A.07) and SEC Rule 10A-3 under the Exchange Act require that listed companies maintain an audit committee composed entirely of independent directors. The audit committee must have at least three members, each of whom must be "financially literate" (as determined by the board in its business judgment), and at least one member must qualify as an

2. Proposed Composition We propose the following composition for the Audit Committee: All three proposed members are independent under both the NYSE independence standards and the heightened independence standards applicable to audit committee members under SEC Rule 10A-3. Based on our review of Mr. Okoro's background — which includes over 20 years of experience in financial services, including service as Chief Finan

3. Audit Committee Charter Calderwood & Harkness will draft the Audit Committee Charter, which must address the following areas at a minimum: (a) The committee's purpose and authority, including its role as the sole body responsible for the appointment, compensation, retention, and oversight of the work of the Company's independent registered public accounting firm (Ashford & Pemberton LLP); (b) Oversight of the Comp

4. Required Board Action A resolution of the Board of Directors is required to formally establish the Audit Committee, adopt its charter, and designate Warren Okoro as the audit committee financial expert. This resolution should be adopted prior to the filing of the S-1 registration statement. B. Compensation Committee

Section 303A.05 of the NYSE Listed Company Manual requires that listed companies maintain a compensation committee composed entirely of independent directors. As noted above, this requirement is subject to the controlled-company exemption. If the Company relies on the controlled-company exemption, the compensation committee need not be fully independent, although the phase-in rules described in Section III.B above wo

2. Proposed Composition We propose the following composition for the Compensation Committee: All three proposed members satisfy the independence requirements under both the NYSE listing standards and SEC Rule 10C-1. We recommend that the Company comply fully with compensation committee independence requirements at the time of listing, regardless of whether the controlled-company exemption is available.

3. Compensation Committee Charter Calderwood & Harkness will draft the Compensation Committee Charter, which must address the following areas: (a) The committee's purpose and authority with respect to establishing the Company's executive compensation philosophy and determining the compensation of the Company's executive officers; (b) Administration of the Company's equity compensation plans, including the 2022 Omnibu

4. Required Board Action A resolution of the Board of Directors is required to formally establish the Compensation Committee and adopt its charter. This resolution should be adopted prior to the filing of the S-1 registration statement. C. Nominating and Corporate Governance Committee

Section 303A.04 of the NYSE Listed Company Manual requires that listed companies maintain a nominating and corporate governance committee composed entirely of independent directors. Like the compensation committee independence requirement, this requirement is subject to the controlled-company exemption.

2. Proposed Composition We propose the following composition for the Nominating and Corporate Governance Committee: We note that Hugh Pemberton is not independent for purposes of the NYSE listing standards, as he is affiliated with Pinnacle Vista Capital Partners III, LP. If the Company relies on the controlled-company exemption, Mr. Pemberton's service on the Nominating and Corporate Governance Committee is permissi

3. Nominating and Corporate Governance Committee Charter Calderwood & Harkness will draft the Nominating and Corporate Governance Committee Charter, which must address the following areas: (a) The committee's purpose and authority with respect to identifying and evaluating individuals qualified to become Board members; (b) Development and recommendation to the Board of corporate governance policies and guidelines; (c

4. Required Board Action A resolution of the Board of Directors is required to formally establish the Nominating and Corporate Governance Committee and adopt its charter. This resolution should be adopted prior to the filing of the S-1 registration statement. D. Timeline and Action Items Committee charters will be filed as exhibits to the S-1 registration statement or, if permitted, incorporated by reference and post

V. Financial Reporting and Internal Controls — Sarbanes-Oxley Compliance A. SOX Section 404 — Internal Control over Financial Reporting

1. Current State Assessment SOX Section 404 requires public companies to include in their annual reports (a) a management assessment of the effectiveness of the company's internal control over financial reporting (Section 404(a)) and (b) an attestation report from the company's independent registered public accounting firm on the effectiveness of internal control over financial reporting (Section 404(b)). CBR current

2. Emerging Growth Company Status and SOX Exemptions CBR qualifies as an "emerging growth company" ("EGC") under the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"). The JOBS Act defines an EGC as a company with total annual gross revenue of less than $1.235 billion during its most recently completed fiscal year. CBR's fiscal year 2021 revenue of $487.3 million is well below this threshold. As an EGC, th

3. Key Risk Areas for Internal Controls Based on our review of the Company's financial statements, business model, and organizational structure, we have identified the following areas as presenting heightened risk for purposes of internal controls over financial reporting: Revenue Recognition. The Company's revenue streams derive principally from power purchase agreements ("PPAs"), which involve variable consideratio

4. Recommended SOX 404 Timeline We recommend the following phased approach to SOX 404 readiness: We recommend that the Company engage a qualified third-party consultant to assist with the SOX 404 readiness project, particularly during Phases 1 and 2, and that the Company establish an internal audit function (either through dedicated internal hires or an outsourced or co-sourced arrangement) to support ongoing testing

Section 302 of the Sarbanes-Oxley Act requires the Chief Executive Officer and Chief Financial Officer of a public company to provide personal certifications in each quarterly report on Form 10-Q and annual report on Form 10-K. These certifications require each certifying officer to state, among other things, that: (a) He or she has reviewed the report; (b) Based on his or her knowledge, the report does not contain a

VI. Disclosure Controls and Procedures A. Requirement Rule 13a-15(a) under the Exchange Act requires that every issuer that has a class of securities registered under Section 12 of the Exchange Act maintain "disclosure controls and procedures" (as defined in Rule 13a-15(e)) designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Exchange Act is: (a)

1. Establish a Disclosure Committee We recommend that the Company establish a Disclosure Committee (the "Disclosure Committee") to serve as the principal internal body responsible for assisting the CEO and CFO in fulfilling their obligations under the disclosure controls and procedures requirements. The Disclosure Committee should be composed of senior executives and functional-area leaders who collectively have visi

2. Disclosure Committee Charter Calderwood & Harkness will draft a Disclosure Committee Charter defining the scope of the committee's responsibilities, its membership, meeting cadence, and reporting protocols. The charter should address, at a minimum, the following matters: (a) The committee's role in assisting the CEO and CFO with their Section 302 certification obligations; (b) Procedures for the systematic identif

3. Sub-Certification Protocols We recommend the implementation of a quarterly sub-certification process pursuant to which business-unit and functional-area leaders complete questionnaires designed to surface potentially material information from their respective areas of responsibility. These questionnaires should be designed to elicit information regarding, among other things: (a) Material changes in the business, o

4. Coordination with Investor Relations Advisors The Company should coordinate closely with Broadmark Strategic Communications Inc. (Jason Eklund, Managing Director) on all investor relations communications, including press releases, earnings releases, investor presentations, and analyst-day events. Broadmark should be integrated into the Disclosure Committee's processes and should receive Regulation FD training to e

5. Earnings Release and Quiet-Period Protocols We recommend that the Company establish a pre-announcement quiet period during which the Company's directors, officers, and other authorized spokespersons refrain from participating in investor conferences, one-on-one meetings with analysts or investors, and other communications that could involve the discussion of the Company's financial results or outlook. Our recommen

VII. Insider Trading Policy and Section 16 Compliance A. Insider Trading Policy

1. Current State CBR currently has no insider trading policy. As a private company, the Company has not been subject to the public-market insider trading prohibitions that apply to reporting companies and their insiders. However, upon the IPO, all directors, officers, employees, and consultants of the Company will be subject to the prohibitions on insider trading under Section 10(b) of the Exchange Act and Rule 10b-5

2. Key Policy Elements The insider trading policy must address the following matters: Prohibition on Trading on Material Nonpublic Information (MNPI). The policy must clearly prohibit all directors, officers, employees, and consultants from purchasing or selling the Company's securities, or tipping others, while in possession of material nonpublic information about the Company or its business, operations, or prospect

3. Timeline. A draft of the insider trading policy will be circulated by April 1, 2022. The policy should be adopted by the Board of Directors before the S-1 filing. B. Section 16 Compliance

1. Section 16 Reporting Requirements

Section 16(a) of the Exchange Act requires every director, officer (as defined in SEC Rule 16a-1(f)), and beneficial owner of more than 10% of a class of equity securities registered under Section 12 of the Exchange Act to file reports with the SEC disclosing their beneficial ownership of, and transactions in, the company's equity securities. The required reports are: (a) Form 3 (Initial Statement of Beneficial Owner