Contract analysis

Section 1.1 — Defined Terms As used in this Agreement, the following terms shall have the meanings set forth below. Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the ERCOT Protocols or, if not defined in the ERCOT Protocols, the meanings commonly understood in the electric utility industry. "Agreement" means this Interconnection Agreement, including all exhibits,

Section 1.2 — Rules of Interpretation In interpreting this Agreement, the following rules of construction shall apply unless the context otherwise requires: (a) References to the ERCOT Protocols and PUCT Substantive Rules mean the versions of such protocols and rules in effect as of the Effective Date, as subsequently amended, supplemented, or replaced in accordance with applicable governing procedures. (b) The headi

Section 2.1 — Purpose This Agreement establishes the terms and conditions under which the Generating Facility, a 50 MW / 200 MWh lithium iron phosphate (LFP) Battery Energy Storage System, will be interconnected to the ERCOT transmission system at the Point of Interconnection located at the Western Permian 138 kV Substation in Ector County, Texas. This Agreement sets forth the respective rights and obligations of eac

Section 2.2 — Generating Facility Description The Generating Facility comprises the following principal components and characteristics: (a) Technology: Lithium Iron Phosphate (LFP) battery energy storage system. (b) Nameplate Capacity: 50 MW (power capacity) / 200 MWh (energy capacity), providing a discharge duration of approximately 4 hours at full nameplate power capacity. (c) Battery Modules: Harmon-Dietrich Model

Section 2.3 — Exclusivity This Agreement governs solely the physical interconnection of the Generating Facility to the ERCOT transmission system at the POI. Nothing in this Agreement conveys, grants, or implies any right to transmission service, transmission capacity, or any other transmission-related service. IC acknowledges and agrees that it must separately arrange for any required Qualified Scheduling Entity ("QS

ARTICLE 3 — INTERCONNECTION FACILITIES AND POINT OF INTERCONNECTION

Section 3.1 — Point of Interconnection The Point of Interconnection is located at the Western Permian 138 kV Substation, Ector County, Texas, as depicted on the one-line diagram set forth in Exhibit B and more particularly described in Exhibit A. The interconnection voltage at the POI shall be 138 kV. The POI represents the physical point at which the IC's Interconnection Facilities connect to the TDSP's transmission

Section 3.2 — IC's Interconnection Facilities IC shall design, engineer, procure, construct, own, and maintain the following Interconnection Facilities at IC's sole cost and expense: (a) On-Site Main Power Step-Up Transformer: A step-up transformer rated for the full output of the Generating Facility, stepping voltage from 34.5 kV (medium-voltage collection system) to 138 kV (transmission voltage) for delivery to the

Section 3.3 — TDSP's Interconnection Facilities Oncor shall design, engineer, procure, and construct modifications, additions, or extensions to the Western Permian 138 kV Substation and associated transmission facilities necessary to accept the interconnection of the Generating Facility at the POI (the "TDSP Interconnection Facilities"), including without limitation: (a) A new 138 kV line position at the Western Perm

Section 3.4 — Demarcation Point The demarcation point between IC's Interconnection Facilities and TDSP's Interconnection Facilities is located at the point of change of ownership at the POI, as depicted on the one-line diagram set forth in Exhibit B. The demarcation point is the physical point at which IC's Gen-Tie Line terminates and connects to Oncor's equipment at the Western Permian 138 kV Substation. Each Party

Section 3.5 — Design Review and Approval IC shall submit detailed engineering designs and specifications for IC's Interconnection Facilities (including the Gen-Tie Line, step-up transformer, protective relaying, metering, SCADA, and communications equipment) to Oncor for review and approval at least ninety (90) days prior to the commencement of construction of such Interconnection Facilities. Oncor shall complete its

Section 4.1 — Scope of Network Upgrades The Interconnection Study completed in August 2022 under ERCOT Queue No. INR-22-03347 identified certain Network Upgrades to the TDSP's existing transmission facilities that are necessary to reliably accommodate the interconnection of the Generating Facility at the POI. The scope of the required Network Upgrades is described in detail in Exhibit D attached hereto. The Network U

Section 4.2 — Cost Responsibility The estimated cost of the Network Upgrades identified in the Interconnection Study is Two Million Eight Hundred Thousand Dollars ($2,800,000). IC shall be solely responsible for the payment of all costs of the Network Upgrades, as determined in the Interconnection Study and subject to adjustment for actual costs upon completion of construction. IC shall pay such amounts to Oncor in a

Section 4.3 — Payment Schedule for Network Upgrades IC shall make advance payments to Oncor for the estimated cost of the Network Upgrades in the following installments: (a) First Installment (50%): One Million Four Hundred Thousand Dollars ($1,400,000), due and payable within thirty (30) days after the Effective Date of this Agreement (on or before January 1, 2023). (b) Second Installment (25%): Seven Hundred Thousa

Section 4.4 — Construction of Network Upgrades Oncor shall use Reasonable Efforts to design, engineer, procure, and construct the Network Upgrades in a timely manner and to complete such Network Upgrades by the target completion date of July 1, 2023, so as to be available for testing and Energization on or before the In-Service Date. Oncor shall provide IC with periodic written updates on the progress of construction

Section 4.5 — Refund of Network Upgrade Costs IC may be eligible for refunds or credits related to Network Upgrade costs to the extent provided by the ERCOT Protocols and applicable PUCT rules in effect from time to time, subject to the specific terms, conditions, and timelines set forth therein. The availability and amount of any such refunds or credits shall be determined by ERCOT and/or the PUCT in accordance with

ARTICLE 5 — MILESTONES AND SCHEDULE

Section 5.1 — Key Milestones The following milestones shall apply to the design, construction, commissioning, and commercial operation of the Generating Facility and the Network Upgrades. The Parties shall use Reasonable Efforts to achieve each milestone by the corresponding target date: The target dates set forth above are good-faith estimates based on information available as of the Effective Date. The Parties ackn

Section 5.2 — Milestone Reporting IC shall provide Oncor with written progress reports at least monthly regarding the status of design, engineering, procurement, and construction of IC's Interconnection Facilities and the Generating Facility. Such reports shall include a summary of work completed during the preceding reporting period, a description of any deviations from the milestone schedule, and an updated forecas

Section 5.3 — Extensions Either Party may request a reasonable extension of one or more milestone dates due to Force Majeure events, regulatory delays, permitting delays, or other circumstances beyond the requesting Party's reasonable control. Any such request shall be submitted in writing and shall describe the cause of the delay, the anticipated duration of the delay, and the mitigation measures being undertaken. T

Section 5.4 — Consequences of IC Delay If IC fails to achieve the In-Service Date within twelve (12) months after the target In-Service Date (i.e., by July 15, 2024) for reasons not excused by Force Majeure or delay caused by Oncor, Oncor may terminate this Agreement upon sixty (60) days' prior written notice to IC. In the event of such termination, IC shall forfeit any advance payments previously made to Oncor for N

ARTICLE 6 — CONSTRUCTION AND TESTING

Section 6.1 — Construction Standards All Interconnection Facilities, including the Gen-Tie Line, the on-site step-up transformer, protective relaying, metering, SCADA, communications, and grounding systems, shall be designed, engineered, procured, and constructed in strict accordance with Good Utility Practice, Applicable Laws, NERC Reliability Standards, ERCOT Protocols, Oncor's technical requirements and specificat

Section 6.2 — Inspection Rights Oncor shall have the right, but not the obligation, to inspect IC's Interconnection Facilities during all phases of construction and at any time prior to initial Energization. Oncor shall provide IC with reasonable advance notice of any planned inspection, except that no advance notice shall be required in the event of an emergency or safety concern. IC shall provide Oncor's inspectors

Section 6.3 — Commissioning Tests Prior to the initial Energization of the Generating Facility, IC and Oncor shall jointly perform the Commissioning Tests described in Exhibit C attached hereto. The Commissioning Tests are designed to verify the proper design, installation, calibration, and functionality of all Interconnection Facilities and to confirm that the Generating Facility can be safely and reliably interconn

Section 6.4 — Energization Initial Energization of the Generating Facility shall occur only after the satisfaction of all of the following conditions: (a) Successful completion and acceptance of all Commissioning Tests as described in Section 6.3 and Exhibit C, with results satisfactory to both Parties and in compliance with all applicable standards. (b) Oncor's written confirmation that all TDSP Interconnection Faci

Section 6.5 — Trial Operation Following the initial Energization of the Generating Facility, IC may operate the Generating Facility on a trial basis for a period not exceeding ninety (90) days (or such other period as the ERCOT Protocols may require for new energy storage resources) for purposes of additional testing, commissioning, performance verification, and optimization prior to achieving Commercial Operation. D

ARTICLE 7 — OPERATIONS AND MAINTENANCE

Section 7.1 — IC's Obligations IC shall operate and maintain the Generating Facility and IC's Interconnection Facilities in accordance with Good Utility Practice, Applicable Laws, ERCOT Protocols, NERC Reliability Standards, and the terms and conditions of this Agreement, throughout the term of this Agreement. Without limiting the generality of the foregoing, IC's operations and maintenance responsibilities include:

Section 7.2 — Oncor's Obligations Oncor shall operate and maintain the TDSP Interconnection Facilities and the Network Upgrades, as well as the transmission system at and beyond the POI, in accordance with Good Utility Practice, Applicable Laws, NERC Reliability Standards, and the ERCOT Protocols. Oncor shall maintain the Western Permian 138 kV Substation and all Oncor-owned equipment at the POI in a condition suitab

Section 7.3 — Coordination The Parties shall coordinate all scheduled outages, maintenance activities, and testing of Interconnection Facilities and Network Upgrades with reasonable advance written notice to the other Party (not less than thirty (30) days for planned outages, except in the case of emergencies requiring more immediate action). Each Party shall make commercially reasonable efforts to schedule planned o

Section 7.4 — Emergency Operations In the event of an emergency affecting the reliability, security, or safety of the ERCOT transmission system, including but not limited to transmission system faults, equipment failures, extreme weather events, or grid emergencies declared by ERCOT, Oncor may disconnect, de-energize, or curtail the Generating Facility without prior notice to IC, provided that Oncor shall notify IC o

Section 7.5 — Modifications to the Generating Facility IC shall not materially modify the Generating Facility, including without limitation any changes to the nameplate capacity (MW or MWh), operating voltage, equipment type, or operating characteristics, without prior written notice to Oncor and, where required by the ERCOT Protocols, submission of a modification request and completion of any required modification s

Section 8.1 — Metering Equipment Revenue metering equipment shall be installed at the POI in accordance with Oncor's metering specifications and ERCOT metering requirements. IC shall bear the cost of the initial procurement, installation, and commissioning of all revenue metering equipment. The metering equipment shall be of revenue-grade quality and shall be capable of measuring both energy injections (discharging o

Section 8.2 — Metering Accuracy and Testing All metering equipment shall meet or exceed the accuracy standards set forth in ANSI C12 and any additional accuracy requirements specified by Oncor or the ERCOT Protocols. Oncor shall have the right to test and inspect the metering equipment at least annually and at any other time upon reasonable request by either Party. If metering equipment is found to be inaccurate beyo

Section 8.3 — Metering Data Metering data collected at the POI shall be made available to ERCOT, IC, and Oncor in accordance with the ERCOT Protocols and Oncor's standard metering data procedures. Oncor shall provide IC with access to metering data on a timely basis for purposes of settlement, billing, and operational monitoring. IC shall have the right, at IC's sole cost and expense, to install check meters or backu

Section 9.1 — IC's Insurance Requirements IC shall procure and maintain, at its sole cost and expense, the following insurance coverages during the term of this Agreement, with insurance carriers rated "A-" or better by A.M. Best Company (or an equivalent rating by another nationally recognized rating agency): (a) Commercial General Liability ("CGL") Insurance: Minimum limits of Two Million Dollars ($2,000,000) per o

Section 9.2 — Oncor's Insurance Oncor shall maintain insurance in types and amounts consistent with Good Utility Practice for a transmission and distribution service provider of similar size and scope of operations in the State of Texas. Oncor shall maintain, at a minimum, commercial general liability, workers' compensation, and employer's liability insurance in amounts consistent with its obligations under this Agre

Section 9.3 — Evidence of Insurance Each Party shall provide the other Party with certificates of insurance evidencing the coverages required under this Article upon request and at least thirty (30) days prior to the Energization Date. Each Party shall provide the other Party with at least thirty (30) days' advance written notice of any cancellation, non-renewal, or material change in the required insurance coverages

ARTICLE 10 — BILLING AND PAYMENT

Section 10.1 — Invoicing Oncor shall invoice IC for Network Upgrade costs, TDSP Interconnection Facility costs, and any other charges due from IC to Oncor under this Agreement, in accordance with the payment schedule set forth in Section 4.3 and as otherwise provided in this Agreement. Each invoice shall contain reasonable detail and supporting documentation sufficient to enable IC to verify the amounts invoiced. Onc

Section 10.2 — Payment Terms All invoices issued under this Agreement are due and payable within thirty (30) days of IC's receipt of such invoice. Payments shall be made by wire transfer of immediately available funds to the account designated by Oncor (or IC, as the case may be) in writing. All payments shall be in United States dollars.

Section 10.3 — Disputed Invoices IC may dispute any invoice or any portion thereof by providing Oncor with written notice of the dispute within thirty (30) days of receipt of the invoice. Such notice shall set forth the specific items disputed and the basis for the dispute in reasonable detail. IC shall pay the undisputed portion of any invoice in full in accordance with Section 10.2 pending resolution of the dispute

Section 10.4 — Interest on Late Payments Any amounts due and payable under this Agreement that are not paid when due (after expiration of any applicable cure period) shall accrue interest from the due date until paid at the lesser of (a) one and one-half percent (1.5%) per month (18% per annum) or (b) the maximum rate of interest permitted by the laws of the State of Texas. Interest shall be calculated on the basis o

ARTICLE 11 — REPRESENTATIONS AND WARRANTIES

Section 11.1 — Mutual Representations Each Party represents and warrants to the other Party, as of the Effective Date, that: (a) It is duly organized, validly existing, and in good standing under the laws of its jurisdiction of formation and is qualified to do business in the State of Texas. (b) It has the requisite corporate, limited liability company, or other organizational authority and power to execute, deliver,

Section 11.2 — IC's Additional Representations IC further represents and warrants to Oncor, as of the Effective Date, that: (a) Lone Star Storage I, LLC is a Texas limited liability company, duly organized and validly existing under the laws of the State of Texas, and is a wholly owned subsidiary of Calloway-Briggs Renewables Inc., a Texas corporation (EIN: 82-3047591). IC's Employer Identification Number (EIN) is 88

ARTICLE 12 — DEFAULT AND REMEDIES

Section 12.1 — Events of Default An "Event of Default" or "Default" shall mean the occurrence of any of the following events with respect to a Party (the "Breaching Party"): (a) Payment Default: The Breaching Party fails to make any payment required under this Agreement when due, and such failure is not cured within thirty (30) days after the non-Breaching Party delivers written notice of such failure to the Breachin

Section 12.2 — Remedies Upon the occurrence and during the continuance of an Event of Default, the non-Breaching Party may, at its option, exercise any one or more of the following remedies: (a) Suspend its performance under this Agreement (other than payment obligations then due and owing) until the Default is cured. (b) Terminate this Agreement upon written notice to the Breaching Party, subject to the cure periods

Section 12.3 — Limitation of Liability NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR ANY CONSEQUENTIAL, INCIDENTAL, PUNITIVE, EXEMPLARY, SPECIAL, OR INDIRECT DAMAGES OF ANY KIND, INCLUDING WITHOUT LIMITATION LOST PROFITS, LOST REVENUES, LOSS OF BUSINESS OPPORTUNITY, LOSS OF USE, OR DIMINUTION IN VALUE, ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT, WHETHER BASED ON CONTRACT, TORT (INCLUDING NEGLIGENCE AN

Section 13.1 — Mutual Indemnification Each Party (in its capacity as "Indemnifying Party") shall indemnify, defend, and hold harmless the other Party and its affiliates, and their respective officers, directors, managers, members, employees, agents, and representatives (collectively, the "Indemnified Parties"), from and against any and all third-party claims, demands, actions, suits, proceedings, judgments, losses, d