Contract analysis

I. Executive Summary The purpose of this memorandum is to summarize and analyze the principal terms of the proposed $26,000,000 construction-to-term loan facility (the "Credit Facility" or the "Loan") between Lone Star Storage I, LLC (the "Borrower"), a wholly owned Texas limited liability company subsidiary of Calloway-Briggs Renewables Inc. ("CBR" or the "Guarantor"), and Brazos River National Bank, N.A. ("BRNB" or

II. Parties to the Credit Agreement A. Borrower. The Borrower under the Credit Agreement is Lone Star Storage I, LLC, a Texas limited liability company (EIN: 88-1623504). Lone Star Storage I, LLC was formed as a single-purpose project company for the express purpose of holding all Project assets, contracts, permits, and related rights. Its formation as an SPE is consistent with standard project finance structuring re

III. Credit Facility — Principal Terms A. Type and Amount The Credit Facility is structured as a construction-to-term loan facility, which means that upon satisfaction of specified conversion conditions (including achievement of Commercial Operation Date), the construction loan will automatically convert to a term loan without the need for a separate refinancing or a new credit agreement. This structure provides the

IV. Capital Structure Overview This section provides a summary of the total sources and uses of funds for the Project, including the relative contributions of debt and equity capital. A. Sources. The following table summarizes the sources of capital for the $40,000,000 Project: The total equity contribution of $14,000,000 is allocated between the two equity participants as follows: • CBR equity: $14,000,000 × 65% = $

V. Conditions Precedent to Initial Advance All conditions precedent set forth in the Credit Agreement must be satisfied (or waived in writing by BRNB) before the Lender is obligated to fund the first draw under the Credit Facility. The following is a summary of the material conditions precedent, organized by category. This list is not exhaustive, and the Credit Agreement contains additional administrative and procedu

1. EPC Agreement. Executed Engineering, Procurement, and Construction Agreement between Lone Star Storage I, LLC (as Owner) and Meridian Power Construction, Inc. (as EPC Contractor) — providing for the design, engineering, procurement, construction, testing, and commissioning of the 50 MW / 200 MWh LFP battery energy storage system on a fixed-price, date-certain basis. The Contract Price under the EPC Agreement is $3

2. Ground Lease. Executed Ground Lease between Permian Basin Land Holdings, LP (as Lessor; Marcus W. Eskridge, General Partner) and Lone Star Storage I, LLC (as Lessee) — providing for a 25-year initial term commencing December 1, 2022, with two 5-year renewal options (for a maximum aggregate term of 35 years). The leased premises consist of a 15-acre parcel, being a portion of Survey No. 42, Block 42, T-1-S, T&P RR

3. Subordination, Non-Disturbance and Attornment Agreement (SNDA) / Lessor Lien Waiver. Executed SNDA and Lessor Lien Waiver delivered by Permian Basin Land Holdings, LP in favor of BRNB, subordinating the Lessor's interest in the Ground Lease (and any landlord's lien) to the Lender's security interest and providing for non-disturbance and attornment in favor of the Lender (or any successor to the Borrower's leasehol

4. Interconnection Agreement. Executed Interconnection Agreement between Lone Star Storage I, LLC and Aldermere & Co. for the Western Permian 138 kV Substation, Ector County, Texas. The interconnection details are as follows: ERCOT Queue No. INR-22-03347; interconnection voltage 138 kV with on-site step-up transformer (34.5 kV to 138 kV); gen-tie line of approximately 1.2 miles from the Project site to the point of i

5. Independent Engineer's Report. A comprehensive technical report prepared by Norgate Technical Advisors, Inc. (Dr. Phillip S. Reardon, P.E., Lead Engineer), confirming the technical feasibility of the Project, the adequacy of the EPC Agreement (including the Contract Price, scope of work, and construction schedule), the suitability of the equipment specifications (including the LFP battery modules, PCS, BMS, and HV

6. Builder's Risk Insurance. Evidence of builder's risk insurance coverage in an amount not less than the full replacement value of the Project during construction, issued by Commonwealth Specialty Insurance Company, with a policy limit of $42,000,000. The policy must be placed through Kensington Risk Advisors, LLC (Dana J. Carwell, Lead Broker), and must name BRNB as loss payee and additional insured as required by

7. General Liability Insurance. Evidence of commercial general liability insurance coverage, issued by Pinnacle Mutual Assurance Corp., in amounts and with coverage terms satisfactory to BRNB. The policy must be placed through Kensington Risk Advisors, LLC and must name BRNB as additional insured.

8. Insurance Endorsements. All insurance policies required under the Credit Agreement must include endorsements naming BRNB as additional insured and/or loss payee, as applicable, and must contain provisions prohibiting cancellation, non-renewal, or material modification without not less than thirty (30) days' prior written notice to BRNB. D. Environmental.

9. Phase I Environmental Site Assessment. A Phase I Environmental Site Assessment (ESA) prepared in accordance with ASTM E1527-21 standards by Terranova Environmental Group, Inc. (Karen V. Albrecht, Lead Consultant), located at 4500 Greenville Avenue, Suite 220, Dallas, Texas 75206. The Phase I ESA must conclude that the 15-acre Project site is free of Recognized Environmental Conditions (RECs), Controlled Recognized

10. Leasehold Title Insurance Policy. A leasehold title insurance policy in the amount of $26,000,000 (matching the aggregate loan commitment), to be issued by Lone Star Abstract & Title Co., located at 312 North Texas Avenue, Odessa, Texas 79761. The policy must insure the Borrower's leasehold interest in the 15-acre Project site and BRNB's mortgage/deed of trust lien thereon, free and clear of all liens, encumbranc

11. Borrower's Counsel Opinion. A legal opinion from Calderwood & Harkness LLP (George Trujillo, Partner) addressed to BRNB and delivered at Financial Close, covering the following matters: (a) due organization, valid existence, and good standing of the Borrower and Guarantor under the laws of the State of Texas; (b) power and authority of the Borrower and Guarantor to execute, deliver, and perform the Credit Agreeme

12. Lender's Counsel Opinion. A standard lender's counsel confirmatory opinion from Archibald, Fenn & Shaw LLP (Robert C. Fenn, Partner) addressed to BRNB, confirming such matters as BRNB and its counsel deem appropriate. G. Corporate / Organizational

13. Organizational Documents. Certified copies of the certificate of formation and company agreement (or operating agreement) of Lone Star Storage I, LLC, and the certificate of formation (or articles of incorporation), bylaws, and any shareholder or governance agreements of Calloway-Briggs Renewables Inc.

14. Authorizing Resolutions. Board of directors resolutions (in the case of CBR) and member/manager resolutions or consents (in the case of Lone Star Storage I, LLC) authorizing the execution, delivery, and performance of the Credit Agreement and all related loan documents, certified by the secretary or an authorized officer of each entity.

15. Good Standing Certificates. Certificates of good standing (or certificates of existence/status) for CBR and Lone Star Storage I, LLC issued by the Texas Secretary of State, dated within thirty (30) days of Financial Close.

16. Incumbency Certificates. Incumbency certificates identifying the authorized signatories of CBR and Lone Star Storage I, LLC, together with specimen signatures, certified by the secretary or an authorized officer of each entity. H. Bonding.

17. Performance and Payment Bonds. Evidence of a performance bond and a payment bond, each in the amount of $31,200,000 (100% of the EPC Contract Price), issued by Ironclad Surety Corporation in favor of Lone Star Storage I, LLC under the EPC Agreement. The performance bond guarantees the EPC Contractor's performance of its obligations under the EPC Agreement, and the payment bond guarantees payment by the EPC Contra

18. Building Permit. Ector County Building Permit No. BP-2022-04517, issued October 28, 2022, authorizing the construction of the BESS facility on the Project site.

19. Stormwater Permit. Evidence of coverage under the Texas Commission on Environmental Quality (TCEQ) Stormwater General Permit TXR150000, together with a filed and approved Stormwater Pollution Prevention Plan (SWPPP), filed in November 2022. The SWPPP must comply with TCEQ requirements for construction activities disturbing one or more acres of land. J. Other.

20. Equity Contribution Evidence. Evidence satisfactory to BRNB that the full equity commitment has been funded or that arrangements satisfactory to the Lender are in place for the timely funding of equity contributions on a pro rata basis with loan draws. Specifically, CBR: $9,100,000; Ridgepoint Capital Partners, LP: $4,900,000.

21. Officer's Certificate. A certificate executed by an authorized officer of the Borrower and the Guarantor, confirming (a) that all representations and warranties set forth in the Credit Agreement are true and correct in all material respects as of the date of the initial advance, and (b) that no Default or Event of Default has occurred and is continuing or would result from the making of the initial advance.

22. Approved Construction Budget and Schedule. A detailed construction budget and schedule, approved by the Independent Engineer, setting forth the anticipated timing, sequencing, and cost of all construction activities, including milestones, draw request amounts and timing, and contingency allocations.

23. ERCOT Resource ID. Confirmation of ERCOT Resource ID assignment for the Project (designated LSBESS_01, currently pending final assignment). Final assignment of the Resource ID is required prior to energization and commercial operation, but evidence of the pending status and the queue position must be provided at Financial Close.

VI. Security Package The Credit Agreement and related security documents provide BRNB with a comprehensive security package, as summarized below. The security package is structured to give the Lender first-priority security interests in substantially all assets of the Borrower and the Project, together with a limited recourse guarantee from the Guarantor during the construction phase. A. First-Priority Lien on Projec

VII. Representations and Warranties (Summary) The Credit Agreement includes a comprehensive set of representations and warranties made by the Borrower and the Guarantor as of the date of the Credit Agreement and, with respect to certain representations, as of the date of each loan advance. The following is a summary of the principal representations; the complete text of each representation, including all materiality

VIII. Affirmative and Negative Covenants (Summary) A. Affirmative Covenants The Credit Agreement imposes the following affirmative covenants on the Borrower (and, where applicable, the Guarantor), among others: • Maintain the Borrower's existence and good standing under the laws of the State of Texas; • Comply in all material respects with all material Project contracts, including the EPC Agreement, the Equipment Sup

IX. Events of Default The Credit Agreement includes a customary set of events of default, the occurrence and continuation of which gives rise to the Lender's right to accelerate the outstanding obligations and exercise its remedies under the security documents. The following is a summary of the key events of default: • Payment Default. Failure to pay principal, interest, fees, or other amounts when due under the Cred

X. Governing Law and Dispute Resolution The Credit Agreement and all related loan documents are governed by and construed in accordance with the laws of the State of Texas, without regard to principles of conflicts of laws that would require the application of the laws of another jurisdiction. Jurisdiction and Venue. The Borrower, the Guarantor, and the Lender each irrevocably submit to the exclusive jurisdiction of

XI. Key Dates and Timeline The following table sets forth the key dates and milestones for the Credit Facility and the Project, based on current expectations and the terms of the Credit Agreement and EPC Agreement: We note that the period between the anticipated Credit Agreement signing (December 1, 2022) and Financial Close (February 10, 2023) prov