Contract analysis

1. Parties 1.1 Calloway-Briggs Renewables Inc. ("CBR") Full Legal Name: Calloway-Briggs Renewables Inc. Entity Type: Corporation organized and existing under the laws of the State of Texas. Principal Office: 2300 Travis Street, Suite 4200, Houston, TX 77006. Business Description: CBR is a privately held renewable energy development company headquartered in Houston, Texas. CBR is engaged in the development, constructi

2. Transaction Overview CBR and Lumen Ridge propose to form a 50/50 joint venture (the "Joint Venture" or "JV") for the purpose of co-developing, constructing, financing, owning, and operating a portfolio of utility-scale solar energy generation projects located in Texas and the Desert Southwest region of the United States (collectively, the "Projects" and each individually, a "Project"). The Joint Venture will be st

3. Joint Venture Entity Name: Solstice Plateau Energy Holdings LLC (the "Company" or the "JV Entity"). Entity Type: Limited liability company to be newly formed and organized under the Delaware Limited Liability Company Act (6 Del. C. § 18-101 et seq.). Tax Classification: The Company will be classified as a partnership for United States federal income tax purposes under the default classification rules applicable to

4. Capitalization and Capital Contributions 4.1 Total Equity Commitment The aggregate equity commitment of the Parties to the Company shall be Three Hundred Million Dollars ($300,000,000), to be contributed as follows: • CBR Commitment: One Hundred Fifty Million Dollars ($150,000,000). • Lumen Ridge Commitment: One Hundred Fifty Million Dollars ($150,000,000). Each Party's aggregate equity commitment represents its p

5. Project Portfolio CBR will contribute to the Company its existing pipeline of eight (8) utility-scale solar development projects with an aggregate nameplate DC capacity of approximately 1,200 MW (the "Project Portfolio"). The Project Portfolio is summarized in the table below: The geographic distribution of the Project Portfolio is as follows: • Texas: Five (5) Projects with an aggregate nameplate capacity of appr

6. Project-Level Debt Financing Lumen Ridge shall be primarily responsible for arranging non-recourse project-level debt financing for the Joint Venture's Projects. The Parties anticipate the following general terms for such financing, which remain subject to negotiation with potential lending institutions and final approval by the Management Committee: (a) Anticipated Credit Facility. A senior secured project financ

7. Governance 7.1 Management Committee The Company shall be governed by a Management Committee (the "Management Committee") in accordance with the terms and provisions to be set forth in the LLC Agreement. The Company shall be a "manager-managed" limited liability company under the Delaware LLC Act. The Management Committee shall have the following composition: (a) The Management Committee shall consist of six (6) me

8. Development and Construction Management CBR shall serve as the exclusive development and construction manager for all Projects within the Joint Venture portfolio, pursuant to a Development and Construction Management Agreement (the "DCMA") to be negotiated and executed by CBR (or a designated affiliate thereof) and the Company at or prior to Closing. The DCMA shall set forth the scope of CBR's development and cons

9. Distribution Waterfall Distributable cash of the Company (as defined in the LLC Agreement) shall be distributed to the members in accordance with the following distribution waterfall: Tier 1 — Pari Passu Return of Capital and Preferred Return. First, all distributable cash shall be distributed pari passu to CBR and Lumen Ridge (50% / 50%) until each member has received cumulative distributions sufficient to provid

10. Tax Matters The Parties have agreed to the following principal tax-related terms for the Joint Venture, which shall be reflected in the LLC Agreement: Partnership Representative. CBR shall serve as the "partnership representative" of the Company (within the meaning of Section 6223 of the Internal Revenue Code of 1986, as amended (the "Code")) for each taxable year. CBR shall act through its designated individual,

Section 704(c) Method. The Company shall apply the "remedial allocation method" described in Treasury Regulations Section 1.704-3(d) with respect to the contributed property (i.e., the Project Portfolio). The Project Portfolio has an agreed book value for capital account purposes of $90,000,000 (equal to the Agreed Valuation) and an anticipated aggregate adjusted tax basis of approximately $34,200,000, resulting in a

11. Transfer Restrictions and Exit Provisions 11.1 Lock-Up Period Neither member shall directly or indirectly sell, transfer, assign, pledge, encumber, or otherwise dispose of (each, a "Transfer") all or any portion of its membership interest in the Company during the three (3)-year period commencing on the Closing date (the "Lock-Up Period"), except for Transfers to Permitted Transferees. For purposes of this Sectio

12. Conditions to Closing The obligation of each Party to consummate the transactions contemplated by this Term Sheet and the definitive agreements shall be subject to the satisfaction or waiver of the following conditions precedent at or prior to Closing: (a) Definitive Agreements. The negotiation, execution, and delivery of mutually acceptable definitive transaction documents, including, without limitation: (i) the

13. Due Diligence Each Party shall have the right to conduct customary due diligence on the other Party and on the Project Portfolio. Due diligence shall commence promptly following execution of this Term Sheet and shall be conducted in accordance with the following terms: (a) Scope. Due diligence shall cover, among other things, the following areas: (i) corporate and organizational matters of each Party, including f

14. Regulatory Approvals The Parties have identified the following regulatory considerations related to the proposed transactions: Hart-Scott-Rodino Act. An HSR Act filing with the U.S. Federal Trade Commission and the Antitrust Division of the U.S. Department of Justice will be required in connection with the formation of the Joint Venture. The Parties shall make such filing promptly following execution of this Term

15. Exclusivity [BINDING] This Section 15 is intended to be legally binding upon the Parties. From the date hereof through the earlier of (a) the execution of definitive agreements governing the transactions contemplated by this Term Sheet and (b) December 31, 2023 (such period, the "Exclusivity Period"), CBR shall not, and shall cause its directors, officers, employees, agents, advisors, and other representatives no

16. Confidentiality [BINDING] This Section 16 is intended to be legally binding upon the Parties. The terms and existence of this Term Sheet, and all discussions, negotiations, correspondence, and information exchanged between the Parties in connection herewith, are and shall remain confidential and subject to the terms of the Mutual Non-Disclosure Agreement between CBR and Lumen Ridge dated September 18, 2023 (the "

17. Expenses [BINDING] This Section 17 is intended to be legally binding upon the Parties. Each Party shall bear its own costs and expenses (including, without limitation, the fees and expenses of legal counsel, financial advisors, accountants, consultants, and other advisors) incurred in connection with the negotiation, preparation, and execution of this Term Sheet, the due diligence process, the negotiation and pre

18. Governing Law [BINDING] This Section 18 is intended to be legally binding upon the Parties. This Term Sheet (including the binding provisions hereof set forth in Sections 15, 16, 17, and this Section 18) shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to the conflict-of-laws principles thereof that would result in the application of the laws of any other jur

19. Non-Binding Nature Except for the provisions of Section 15 (Exclusivity), Section 16 (Confidentiality), Section 17 (Expenses), and Section 18 (Governing Law), each of which is expressly intended to be legally binding upon the Parties, this Term Sheet is a statement of the Parties' current intentions with respect to the proposed Joint Venture and does not create any legally binding or enforceable obligations on th

20. Anticipated Timeline The Parties currently anticipate the following timeline for the proposed transactions. The dates set forth below are targets only and are not binding upon either Party. Actual timing may vary based on the progress of due diligence, regulatory approvals, negotiations, and other factors. The Parties shall use commercially reasonable efforts to adhere to the foregoing timeline, but acknowledge t