Contract analysis

I. Purpose This memorandum provides a preliminary assessment of the potential financial and operational exposure faced by Dunmore Energy Holdings Ltd. ("DEH") and its wholly owned subsidiary, Dunmore Fuel Supply, Inc. ("DFS"), in connection with the bid-rigging investigation initiated by the Office of the Attorney General of the State of Meridian, Antitrust Division. The investigation was formally announced to DEH an

II. Background A. The Investigation On August 22, 2025, the Attorney General of the State of Meridian, the Honorable Carolyn Fisk, acting through the Antitrust Division of the Attorney General's Office, issued CID No. AG-ANT-2025-04172 to DEH and DFS. The Antitrust Division is led by Derek Montague, Senior Assistant Attorney General and Division Chief, and the investigation is being handled by Alicia Brennan, Assista

III. Statutory Framework The Attorney General's investigation is grounded in the Meridian Antitrust Act, codified at Meridian Code Annotated § 75-21-1 et seq. The relevant provisions of the statute are summarized below.

Section 75-21-1 sets forth the general prohibition against anticompetitive agreements, providing that "every contract, combination, or conspiracy in restraint of trade or commerce" within the State of Meridian is unlawful. This provision serves as the analogue to Section 1 of the federal Sherman Antitrust Act, 15 U.S.C. § 1, and has been consistently interpreted by Meridian courts to reach the same categories of cond

Section 75-21-3 specifically proscribes bid rigging in connection with public procurement. This provision expressly prohibits agreements among competitors to manipulate the competitive bidding process for public contracts, and it applies both to agreements to allocate winning bids and to the submission of sham or complementary bids designed to create the appearance of competition. Section 75-21-3 provides an independ

Section 75-21-37 provides for the imposition of civil penalties by the Attorney General, as discussed further in Section IV.A below.

Section 75-21-9 creates a private right of action for treble damages, providing that "any person injured in his business or property by reason of a violation" of the Act may recover three times the actual damages sustained, plus reasonable attorneys' fees and costs of suit. This provision is the analogue to Section 4 of the federal Clayton Act, 15 U.S.C. § 15, and is discussed further in Section IV.B below.

Section 75-21-39 authorizes the Attorney General to issue Civil Investigative Demands when the Attorney General has "reason to believe" that a violation of the Act has occurred or is occurring. The CID power is broadly drafted and permits the AG to compel the production of documents, written answers to interrogatories, and oral testimony. The "reason to believe" standard is a relatively low threshold — it does not re

IV. Categories of Exposure A. Civil Penalties (§ 75-21-37) Under Section 75-21-37 of the Meridian Antitrust Act, the Attorney General is authorized to seek civil penalties of up to $1,000,000 per violation in any action brought to enforce the Act. The statute defines a "violation" broadly to encompass each act or agreement in restraint of trade, which affords the Attorney General substantial discretion in determining

Section 75-21-9 of the Meridian Antitrust Act provides that "any person injured in his business or property by reason of a violation" of the Act may recover treble the actual damages sustained, together with reasonable attorneys' fees and costs of suit. This provision creates a substantial exposure that is, in our assessment, the single largest financial risk presented by the investigation. The most likely plaintiff

Section 6.01(h) of the Credit Agreement requires DEH to notify the administrative agent within fifteen (15) business days of becoming aware of any "Litigation Event." The Credit Agreement defines a "Litigation Event" as any governmental investigation, litigation, or proceeding (including any antitrust investigation, regulatory inquiry, or enforcement action) that could reasonably be expected to result in liability to

V. Exposure Summary Table The following table summarizes the categories and ranges of potential direct financial exposure identified in this memorandum: These figures do not include: (a) litigation costs, including attorneys' fees, expert witness fees, forensic consulting costs, and e-discovery vendor fees, which could be substantial given the scope of the document review and the complexity of the economic analysis r

VI. Preliminary Defense Assessment Based on our preliminary review of the CID and the limited documentation we have reviewed to date, we have identified the following potential defense theories and strategic considerations. We emphasize that this assessment is preliminary and will be refined as the document review progresses and as we develop a more complete understanding of the factual record. A. Independent Pricing

VII. Next Steps Based on the analysis set forth in this memorandum, we recommend the following immediate actions:

1. Lender Notification. DEH should transmit the required notification to Craig Underhill, Managing Director, Pinnacle National Bank, N.A., immediately. Calderwood & Harkness will prepare a draft notification letter for review by Patricia Aldridge and signature by Deepa Narayan, CFO. Given the urgency of this matter and the possibility that the contractual notification deadline has already passed, we recommend a targe

2. Document Collection and Preservation. DEH and DFS should continue the document collection and preservation activities initiated pursuant to the litigation-hold memorandum issued by Calderwood & Harkness on September 3, 2025. Forensic imaging of the email accounts, hard drives, and mobile devices of the key custodians (Kinloch, Ochoa, and Prescott) is scheduled to be performed by Brindoval Analytics LLC, with proje

3. Forensic Economist Engagement. We recommend that DEH authorize the engagement of Dr. Lawrence Voss of Kensington Economic Advisors LLC to serve as a consulting expert on the statistical and economic aspects of the investigation. Dr. Voss's initial scope of work would include a review of the publicly available bidding data, a preliminary assessment of the AG's statistical theory, and the development of an alternati

4. Joint-Defense Coordination. With the Client's prior authorization, we recommend exploring the possibility of entering into a joint-defense agreement with co-respondents' counsel — Whitfield, Strauss & DeVane LLP (Gregory Whitfield, lead partner) for Galloway and Archer Colby LLP (Diane Colby, lead partner) for Ridgeline. A joint-defense arrangement could facilitate the sharing of factual and legal analysis, reduce

5. Individual Liability Assessment. We recommend assessing whether the investigation may implicate individual liability for any current or former DEH or DFS executives, particularly Terry Kinloch, Sandra Ochoa, and Nolan Prescott. If there is a reasonable prospect that any of these individuals could face personal civil or criminal liability, they should be advised of their right to retain separate counsel, and DEH sh

6. Insurance Coverage Evaluation. DEH's legal and risk-management teams, in consultation with Calderwood & Harkness, should review DEH's directors-and-officers ("D&O") liability insurance policies, general liability insurance policies, and any specialized professional-liability or government-contracts insurance coverage to determine whether any of these policies provide coverage for the costs of defending the antitru

7. Federal Follow-On Monitoring. We will monitor for any indications that the U.S. Department of Justice Antitrust Division, other state attorneys general, or federal agencies (such as the U.S. Department of Transportation or the General Services Administration) may be initiating parallel investigations or enforcement actions. If there are indications of federal interest, the strategic posture of the defense may need

8. Follow-Up Meeting. We recommend scheduling a follow-up meeting with Patricia Aldridge and Malcolm Haverford at the earliest convenient date to discuss this assessment and to receive strategic direction from the Client regarding the issues identified herein. We suggest a meeting during the week of September 22, 2025, either in person at DEH's Houston headquarters or by secure videoconference.

VIII. Conclusion The Meridian Attorney General's bid-rigging investigation presents substantial financial, operational, and reputational risks to DEH and DFS. Total direct financial exposure from civil penalties and treble damages ranges from approximately $94.79 million to $150.43 million, with an additional $446 million in revenue at risk from potential debarment over a five-year period. The risk of parallel federa