1015-00001 · Graymont Brothers Inc · Diligence

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MEMORANDUM

PRIVILEGED AND CONFIDENTIAL ATTORNEY-CLIENT PRIVILEGE / ATTORNEY WORK PRODUCT

This memorandum has been prepared by Calderwood & Harkness LLP at the request of and for the sole benefit of Calloway-Briggs Renewables Inc. in connection with the proposed initial public offering described herein. This memorandum is protected by the attorney-client privilege and the work-product doctrine. Any disclosure of this memorandum or its contents to third parties may result in a waiver of such privileges. Do not distribute without the express authorization of the Responsible Partner.

TO: Jennifer Kwon, Responsible Partner, Capital Markets, Calderwood & Harkness LLP

FROM: Brendan Walsh, Lead Associate, Capital Markets; Natasha Forbes, Working Associate, Capital Markets

DATE: April 25, 2022

RE: Calloway-Briggs Renewables Inc. — Proposed Initial Public Offering — Due Diligence Memorandum: Real Property and Land Rights

MATTER NO.: 1015-00001

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I. EXECUTIVE SUMMARY

This memorandum summarizes the findings of Calderwood & Harkness LLP's ("C&H") review of the real property interests, land leases, surface-use agreements, easements, rights-of-way, and related encumbrances for all material project sites owned or operated by Calloway-Briggs Renewables Inc. ("CBR" or the "Company") and its subsidiaries. This review was conducted in connection with the Company's proposed initial public offering (the "IPO" or the "Offering") of approximately $600,000,000 of shares of common stock on the New York Stock Exchange under the ticker symbol "CBRI." The S-1 registration statement (the "Registration Statement") is currently in preparation and is expected to be filed with the Securities and Exchange Commission in the coming weeks.

Scope of Review. Our review covers all operating projects in the Company's portfolio (aggregating approximately 3.8 GW of nameplate capacity across 22 projects located in Texas, New Mexico, Arizona, California, and Oklahoma), projects currently under construction (aggregating approximately 1.4 GW of nameplate capacity), and select development-stage pipeline projects. This memorandum focuses specifically on the seven material project sites identified in the draft S-1 Registration Statement, which collectively represent the core of CBR's operating and near-term revenue base. Pipeline projects, including those within the Company's 6.2 GW aggregate development pipeline, are addressed at a summary level only.

Overall Assessment. Based on our review, CBR holds its real property interests primarily through long-term ground leases, surface-use agreements, and easements rather than through fee-simple ownership. This is consistent with prevailing industry practice for utility-scale renewable energy projects, where the lease-based model provides developers with access to large tracts of land without the capital requirements of outright acquisition and allows landowners to retain underlying ownership and, in many cases, to continue concurrent agricultural uses. Title matters across the portfolio are generally clean, with customary permitted encumbrances typical of the jurisdictions and property types involved. Specific issues identified on a project-by-project basis are detailed in Section IV below.

All project-level special purpose vehicles ("SPVs") are 100%-owned through Calloway-Briggs Operating Company LLC, a Texas limited liability company ("CB Operating"), which is in turn wholly owned by CBR Holdings LLC, a Delaware limited liability company ("CBR Holdings"), which is wholly owned by CBR. This corporate structure is typical for renewable energy portfolios and facilitates project-level financing, tax-equity transactions, and operational isolation.

Key Findings. The principal findings of this memorandum include the following:

• Lease Renewal Options and Remaining Terms. All operating-project leases carry initial terms ranging from 25 to 40 years, with renewal options that generally extend potential occupancy to periods coterminous with or exceeding the expected useful economic life of the applicable project. The longest initial term in the portfolio is the 40-year state trust land lease at the Cimarron Solar project in Doña Ana County, New Mexico. The shortest initial terms are the 25-year leases at the Red Mesa Wind and Brazos Storage projects. A detailed lease-term summary table is provided in Section VI.F below.

• Pending Easement Acquisitions and Surface Waivers. For the two projects under construction — Mesquite Wind (Oldham County, Texas) and Cimarron Solar (Doña Ana County, New Mexico) — all material easement agreements have been executed. However, at Mesquite Wind, surface waiver agreements from two mineral estate owners covering approximately 2,400 acres remain outstanding. Negotiations are reported by CBR management to be ongoing and constructive, but the absence of executed waivers represents a residual risk that warrants disclosure in the Registration Statement risk factors.

• Federal and State Government Land Rights. Two projects involve real property interests on federal or state government land: Painted Rock Solar (Bureau of Land Management right-of-way grant in Maricopa County, Arizona) and Cimarron Solar (New Mexico State Land Office ground lease in Doña Ana County, New Mexico, and BLM right-of-way grant for the gen-tie transmission line). Government lease and right-of-way renewals are subject to governmental discretion and environmental review, presenting a risk that should be disclosed in the Registration Statement.

• Change-of-Control and Assignment Provisions. Certain land leases and easements in the portfolio contain consent-to-assignment or change-of-control provisions. The Cimarron Solar lease with the New Mexico State Land Office contains an assignment/change-of-control clause that may be triggered by the IPO. CBR management has confirmed that discussions with the New Mexico State Land Office are underway to obtain confirmation that the IPO, which does not alter SPV-level ownership, does not constitute a triggering event. Additionally, select private landowner leases across the portfolio require notice of a "change in control of lessee," and we recommend that estoppel certificates or written confirmations be obtained from key lessors prior to the public filing of the Registration Statement.

• Lender-Required Title Insurance and Estoppel Matters. Prairie Commercial Bank, N.A. ("Prairie Commercial"), the construction lender for the Mesquite Wind and Cimarron Solar projects, requires title insurance endorsements, lessor estoppel certificates, and updated ALTA surveys at both the construction-financing closing and the conversion closing. Veltrano National Bank ("Veltrano"), the corporate credit facility lender, holds security interests in the equity of project SPVs and maintains step-in rights. Cross-references to the Due Diligence Memorandum — Debt and Financing Arrangements (Document 27) and the Lender Consent Analysis (Documents 108–115) are provided where applicable.

Disclosure Recommendations. Based on our findings, we recommend the inclusion of specific risk factors in the Registration Statement addressing: (i) the Company's reliance on leased rather than owned land; (ii) mineral rights conflicts in Texas and Oklahoma; (iii) the discretionary nature of federal and state government lease and ROW renewals; (iv) potential triggering of change-of-control provisions by corporate transactions; and (v) environmental compliance conditions applicable to BLM and state land rights. We also recommend specific disclosures in the Business section and the Description of Indebtedness section of the Registration Statement, as detailed in Section VII below.

Documents Reviewed. Our review was based on the following categories of documents: responses to the Due Diligence Request List — Real Property / Leases (Document 15 of the due diligence request list), title commitments, owner's and lender's title insurance policies, ALTA/NSPS surveys, Phase I and Phase II environmental site assessments prepared by Greenridge Environmental Sciences LLC (under the supervision of Dr. Nadine Torres), recorded instruments obtained through county recorder searches, lease abstracts prepared by CBR's in-house legal team, and easement files provided by CBR's General Counsel, Sandra Haverford, and Senior Vice President of Project Development, Tomás Quintero. A complete index of documents reviewed is attached as Exhibit A.

II. METHODOLOGY AND SCOPE OF REVIEW

A. Document Sources

Our review of CBR's real property interests was based on the following categories of source materials:

1. Data Room Materials. CBR management provided access to an electronic data room containing real property documents organized by project. The data room was administered by CBR's General Counsel, Sandra Haverford, and Senior Vice President of Project Development, Tomás Quintero. Documents in the data room included executed lease agreements, amendments, supplements, and side letters; easement agreements; surface-use agreements; surface waiver agreements; title commitments and policies; ALTA surveys; correspondence with landowners, government agencies, and lenders; and internal lease abstract summaries. We accessed the data room beginning on February 14, 2022, and have continued to review supplemental materials uploaded through April 22, 2022.

2. Recorded Instruments. We obtained copies of recorded instruments through searches of the official records of the county recorders (or county clerks, as applicable) in the following jurisdictions: Pecos County, Texas; Custer County, Oklahoma; Maricopa County, Arizona; Nolan County, Texas; Fort Bend County, Texas; Oldham County, Texas; and Doña Ana County, New Mexico. These searches covered deeds, deeds of trust, leasehold mortgages, memoranda of lease, easement agreements, UCC fixture filings, and other instruments of record affecting the real property interests held by CBR's project-level SPVs. Our county recorder searches were current as of various dates in March and April 2022, as specified in the project-specific sections below.

3. Title Commitments and Title Insurance Policies. We reviewed the owner's and lender's title insurance policies issued in connection with project-financing closings, as well as title commitments issued for projects under construction. Title policies were issued by Chalvoro Title Insurance Company, Granite Harbor Indemnity Co., and Dunmore Insurance, depending on the project. We reviewed the legal descriptions, schedules of exceptions, and endorsements in each policy and commitment.

4. ALTA/NSPS Surveys. We reviewed ALTA/NSPS land title surveys prepared for each material project site. These surveys were prepared by licensed surveyors in the applicable jurisdictions and were certified to the applicable SPV entities, their title companies, and their lenders. We reviewed the surveys for encroachments, boundary discrepancies, easement locations, and other survey matters.

5. Phase I Environmental Site Assessments. Phase I environmental site assessments ("ESAs") for each material project site were prepared by Greenridge Environmental Sciences LLC under the supervision of Dr. Nadine Torres and in accordance with ASTM Standard E1527-13. We reviewed these assessments for recognized environmental conditions that could affect real property interests. Detailed analysis of environmental matters is provided in the separate Due Diligence Memorandum — Environmental (Document 29), and this memorandum cross-references that analysis where appropriate.

6. Lender Due Diligence Files. We reviewed real property due diligence files from project-finance closings with Prairie Commercial Bank, N.A. (construction-to-term facilities for Mesquite Wind and Cimarron Solar) and Veltrano National Bank (corporate credit facility). These files included lender title review memoranda, title objection letters, cure correspondence, and closing checklists, which provided useful reference points for confirming the resolution of title matters at prior closings.

B. Scope Limitations

The following limitations apply to the scope of this memorandum:

1. Material Projects Only. Our detailed project-by-project review is limited to the seven material project sites specifically identified in the draft S-1 Registration Statement: Solaris West, Red Mesa Wind, Painted Rock Solar, Pronghorn Wind, Brazos Storage, Mesquite Wind, and Cimarron Solar. CBR's portfolio includes 22 operating projects and a broader development pipeline; those additional projects were not the subject of detailed real property diligence for purposes of this memorandum.

2. Development Pipeline — Summary Level Only. Development-stage pipeline projects, including Silverleaf Wind (Irion County, Texas), Copper Basin Solar + Storage (Riverside County, California), and other projects in the Company's 6.2 GW aggregate development pipeline, are addressed in Section V of this memorandum at a summary level only. Full real property diligence will be required as those projects advance to construction financing and become material to the Company's operations and financial statements.

3. Reliance on Lease Abstracts. For routine lease terms — including rent payment schedules, notice provisions, insurance requirements, and maintenance obligations — we relied on lease abstracts prepared by CBR's in-house legal team. These abstracts were provided in the data room and were represented by Sandra Haverford to be accurate and current as of February 2022. We reviewed the original lease documents for key economic and structural provisions, including term, renewal options, assignment and change-of-control provisions, termination rights, lender consent and estoppel requirements, and co-tenancy or most-favored-nation clauses. A consolidated lease abstract summary is attached as Exhibit B.

4. No Independent Survey Work. We did not commission independent survey work for any project site. Our review of survey matters is based on existing ALTA/NSPS surveys provided by CBR in the data room. Those surveys were prepared at various dates in connection with project development and financing closings and may not reflect current conditions. We recommend that updated surveys be obtained for projects under construction (Mesquite Wind and Cimarron Solar) at the time of their respective conversion closings, as is required by Prairie Commercial Bank under the applicable credit agreements.

5. Mineral Title. We did not conduct an independent review of mineral title for any project site. Our analysis of mineral rights issues is based on the surface waiver agreements provided in the data room, representations of CBR management regarding the status of mineral ownership, and title policy exceptions relating to mineral reservations. A full mineral title search was beyond the scope of this engagement.

6. Reliance on Management Representations. Certain factual statements in this memorandum are based on representations made by CBR management, including Sandra Haverford and Tomás Quintero, in responses to our due diligence request list and in oral communications during management interview sessions. We have not independently verified all such representations.

III. CORPORATE STRUCTURE — REAL PROPERTY HOLDING ENTITIES

CBR holds its real property interests through a tiered structure of holding companies and project-level special purpose vehicles. The holding structure is summarized as follows:

Calloway-Briggs Renewables Inc. (Delaware corporation; the IPO issuer)

↓ 100% ownership

CBR Holdings LLC (Delaware limited liability company; intermediate holding entity)

↓ 100% ownership

Calloway-Briggs Operating Company LLC (Texas limited liability company; "CB Operating"; operational holding entity)

↓ 100% ownership (except where noted)

Project-Level SPVs (each holding the real property interests for a specific project)

Each project in the CBR portfolio is held through a separate special purpose vehicle that is the lessee, grantee, or permittee under the applicable real property instruments. This SPV structure serves several purposes: it provides liability isolation between projects, facilitates project-level financing and tax-equity transactions, satisfies lender requirements for bankruptcy-remote entities, and simplifies the administration of project-specific leases and permits.

The following table identifies the SPV entities holding real property interests for the seven material project sites addressed in this memorandum:

All of the foregoing SPVs are 100%-owned by CB Operating, which is 100%-owned by CBR Holdings, which is 100%-owned by CBR. There are no minority interest holders, joint venture partners, or co-investors at the SPV level, with the following exception:

Tax-Equity Structure at Solaris West. Solaris West Solar LLC is subject to a tax-equity partnership structure with Veltara Basin Financial LLC ("Veltara Basin"), a subsidiary of a major financial institution. Veltara Basin invested approximately $280 million in the tax-equity partnership in connection with the Solaris West project. Under the terms of the partnership agreement, Veltara Basin is allocated substantially all of the tax benefits (investment tax credits and accelerated depreciation) generated by the Solaris West project during the initial period, and the partnership is expected to "flip" in 2028, at which point CBR (through CB Operating) will acquire Veltara Basin's interest for a nominal purchase price. Importantly, the land interests — specifically, the ground lease and associated easements — are held by Solaris West Solar LLC in its capacity as lessee and grantee, and those interests are pledged to the tax-equity structure as part of the collateral package. The tax-equity flip in 2028 will not result in a change of lessee under the ground lease or a transfer of any real property interests. For a detailed analysis of the tax-equity structure and its implications, see the Due Diligence Memorandum — Tax Structure and Tax-Equity (Document 25) and the Due Diligence Memorandum — Debt and Financing Arrangements (Document 27).

Additionally, CBR Development Co. LLC, a Texas limited liability company wholly owned by CB Operating, holds land option agreements and preliminary lease agreements for development-stage pipeline projects. These interests are addressed at a summary level in Section V of this memorandum.

IV. PROJECT-BY-PROJECT ANALYSIS

A. Solaris West — Solar PV (450 MW), Pecos County, Texas

1. Project Overview

Solaris West is a 450 MW utility-scale solar photovoltaic project located in Pecos County, in the Permian Basin region of West Texas. The project is held through Solaris West Solar LLC, a Texas limited liability company that is 100%-owned by CB Operating (subject to the tax-equity partnership structure with Veltara Basin described in Section III above). The project achieved commercial operation ("COD") in the third quarter of 2020 and is currently operating. Financing for the project was provided through a tax-equity partnership with Veltara Basin Financial LLC (approximately $280 million invested) and through the corporate credit facility with Veltrano National Bank, which holds lender interests at the corporate level. The project sells energy and renewable energy credits under a long-term power purchase agreement, the terms of which are discussed in the Due Diligence Memorandum — Material Contracts (Document 20).

2. Land Interests

Primary Ground Lease. The core real property interest supporting the Solaris West project is a long-term ground lease with multiple private landowners covering approximately 3,200 acres of contiguous ranchland in Pecos County. The lease has an initial term of 30 years, commencing in 2018, with two successive 10-year renewal options exercisable at the lessee's discretion. Annual rent payments are made to the individual landowners on a per-acre basis, with escalation provisions tied to the Consumer Price Index ("CPI"), subject to a cap of 2.5% per annum. The lessee under the ground lease is Solaris West Solar LLC. Memoranda of lease have been recorded in the official records of Pecos County for each applicable parcel, providing constructive notice of the leasehold interest.

The ground lease contains standard provisions governing permitted uses (solar energy generation, energy storage, and related activities), maintenance obligations, insurance requirements, indemnification, default and remedies, and casualty and condemnation. The lessee has the right to remove all improvements and personal property upon lease termination, subject to site restoration obligations. The lease also contains provisions permitting the granting of leasehold mortgages and collateral assignments to lenders and tax-equity investors, subject to customary notice and cure rights in favor of the lenders.

Surface-Use Agreements. Supplemental surface-use agreements have been executed with adjacent landowners to provide access for roads, laydown areas, and temporary construction staging. The temporary construction easements associated with these agreements expired upon completion of construction and are no longer in effect. Permanent access easements for ongoing operation and maintenance ("O&M") activities remain in force.

Transmission Easement. A permanent easement has been obtained for the generation-tie ("gen-tie") transmission line connecting the project substation to the Electric Reliability Council of Texas ("ERCOT") interconnection point. The gen-tie line extends approximately 8 miles across privately owned land in Pecos County. The easement has a 30-year term with a renewal option that is coterminous with the ground lease, ensuring that the transmission corridor remains available for the duration of the project's operational life. The easement agreement provides for annual payments to the landowners along the corridor and includes provisions for the lessee's right to install, maintain, repair, and replace the transmission line and associated infrastructure.

Water Rights and Access. Solaris West Solar LLC holds a water supply agreement with a local water provider for panel-washing operations. Additionally, the project benefits from a non-exclusive access easement to a county road that provides primary ingress and egress to the project site. The water supply agreement is a standard commercial contract with annual renewal provisions and is not a significant component of the project's real property profile.

3. Title Status

An owner's title insurance policy was obtained in connection with the project financing closing, insuring Solaris West Solar LLC's leasehold interest in the approximately 3,200-acre project site. A lender's title insurance policy was simultaneously issued to Veltrano National Bank as part of the corporate credit facility security package. Both policies were issued by Chalvoro Title Insurance Company.

An ALTA/NSPS land title survey was prepared for the project site and certified as of 2019. The survey identified no material encroachments or boundary discrepancies. The survey depicted the location of the solar array, substation, gen-tie corridor, access roads, and other improvements in relation to the parcel boundaries, easements, and other features of the property.

Permitted encumbrances identified in the title policy include: (i) oil and gas mineral reservations (the mineral estate has been severed from the surface estate on all project parcels, as is typical in the Permian Basin); (ii) utility easements for existing electric distribution and telephone lines; and (iii) a county road right-of-way along the southern boundary of the project site. Surface waiver agreements have been obtained from the holders of the mineral interests on all project parcels, as discussed further below. All of the foregoing encumbrances are standard for properties in this region and do not materially affect the Company's use or enjoyment of the project site for solar energy operations.

4. Encumbrances and Liens

The following liens and encumbrances have been granted against the Solaris West project's real property interests:

• Deed of Trust / Leasehold Mortgage. A deed of trust encumbering the leasehold interest in the ground lease has been granted in favor of the tax-equity structure (Veltara Basin Financial LLC) and the corporate lenders. This instrument secures the obligations of Solaris West Solar LLC under the tax-equity partnership agreement and the corporate credit facility.

• UCC Filings. Uniform Commercial Code financing statements have been filed with the Texas Secretary of State and the Pecos County Clerk's office, perfecting security interests in the personal property located at the project site, including solar panels, inverters, racking systems, and related equipment.

All of the foregoing liens are permitted under the terms of the ground lease and were disclosed to and approved by the lessors at the time of the project financing closing.

5. Key Issues and Observations

Mineral Reservation Surface Waivers. The mineral estate has been severed from the surface estate on all parcels within the Solaris West project site, which is common in the Permian Basin region of West Texas. While severance of the mineral and surface estates does not in itself create a conflict — the mineral estate holder's right to access the surface for exploration and production is a recognized legal right under Texas law — the potential for future mineral development activity to interfere with solar operations represents a risk. To mitigate this risk, CBR has obtained surface waiver agreements from the current holders of the mineral interests on all project parcels. These waivers prohibit the mineral interest holders from conducting surface activities that would interfere with solar energy operations on the leased premises. We recommend that the existence and nature of these mineral reservations, and the reliance on surface waiver agreements, be disclosed as a risk factor in the Registration Statement. Specifically, the risk factor should address the possibility that future transfers or severances of mineral interests could introduce parties who are not bound by (or who may challenge) the existing waiver agreements, and that mineral development activity on adjacent tracts could potentially affect project operations. See Section VI.A for additional analysis.

Lease Renewal Options. The two 10-year renewal options available under the ground lease extend the potential occupancy period to 2068. This is sufficient to cover the expected useful life of the solar array (typically 30–35 years for utility-scale solar PV projects with potential repowering). The renewal options are exercisable at the lessee's sole discretion, subject to delivery of written notice to the lessors not less than 12 months prior to the expiration of the then-current term.

Tax-Equity Flip. The tax-equity partnership with Veltara Basin Financial LLC is expected to flip in 2028, at which point CBR (through CB Operating) will acquire Veltara Basin's partnership interest. This event will not affect the real property interests held by Solaris West Solar LLC, as the SPV will remain the lessee under the ground lease and the grantee under the associated easements throughout the flip transaction.

Overall Assessment. No material title defects have been identified with respect to the Solaris West project. The real property interests are adequate to support continued operations and are consistent with the representations made in the draft Registration Statement.

B. Red Mesa Wind — Onshore Wind (380 MW), Custer County, Oklahoma

1. Project Overview

Red Mesa Wind is a 380 MW onshore wind energy project located in Custer County, in western Oklahoma. The project is held through Red Mesa Wind Energy LLC, an Oklahoma limited liability company that is 100%-owned by CB Operating. The project achieved COD in the first quarter of 2019 and has been in continuous commercial operation since that date. The construction financing facility was fully repaid upon term conversion in 2020, and no project-level debt is currently outstanding. The equity interests in Red Mesa Wind Energy LLC are encumbered by the corporate credit facility with Veltrano National Bank.

2. Land Interests

Wind Lease Agreements. The Red Mesa Wind project site is assembled from multiple wind-energy lease agreements with approximately 45 private landowners covering approximately 28,000 acres in Custer County. The large acreage is typical of onshore wind projects, which require significant spacing between turbines to optimize energy capture and minimize wake effects. The wind leases have an initial term of 25 years (with the earliest leases commencing in approximately 2017) and provide for three successive 5-year renewal options exercisable at the lessee's discretion. Compensation to landowners is structured as a combination of per-turbine royalty payments (based on actual energy production) and annual minimum rent payments, ensuring that each participating landowner receives a baseline level of income regardless of production levels. The lessee under all wind leases is Red Mesa Wind Energy LLC. Memoranda of lease have been recorded in the Custer County Clerk's office for each leased parcel.

The wind leases contain provisions that are standard for the Oklahoma wind-energy industry, including permitted use clauses (wind energy generation, meteorological monitoring, transmission, and related activities), provisions for concurrent agricultural use (discussed below), setback requirements from residences and roads, decommissioning and site restoration obligations, and provisions permitting the granting of leasehold mortgages and collateral assignments to project lenders and tax-equity investors.

Access Easements. Permanent road and access easements have been obtained across both leased and non-leased parcels within and adjacent to the project site. These easements provide access for turbine maintenance, crane operations, and general O&M activities. The access easements run with the land and are coterminous with the wind lease terms.

Transmission Easement. An easement has been obtained for the 345-kV gen-tie line connecting the project substation to the Southwest Power Pool ("SPP") grid interconnection point. The gen-tie line extends approximately 12 miles across privately owned agricultural land in Custer County. The easement has a term that is coterminous with the wind leases and provides for annual payments to the affected landowners.

Meteorological Tower Easements. Permanent easements have been obtained for five meteorological monitoring towers located at various points across the project site. These easements permit the installation, operation, maintenance, and replacement of the meteorological towers and associated equipment. The met tower data is used for resource assessment, performance monitoring, and warranty compliance.

3. Title Status

Title opinions were obtained from local Oklahoma counsel at the project development stage, covering each parcel within the project site. These opinions were supplemented by owner's and lender's title insurance policies obtained at the construction-financing closing. The title policies were issued by Granite Harbor Indemnity Co..

ALTA/NSPS surveys were prepared for all turbine pad sites, the substation, the gen-tie transmission corridor, and the O&M facility. The surveys were certified to Red Mesa Wind Energy LLC, Granite Harbor Indemnity Co., and the construction lender (whose facility has since been repaid).

Permitted encumbrances identified in the title policies and title opinions include: (i) oil and gas mineral reservations, which are prevalent throughout western Oklahoma and are common on virtually all agricultural properties in Custer County; (ii) agricultural surface use rights, which coexist with wind operations as discussed below; (iii) county road rights-of-way; and (iv) utility easements for rural electric distribution and telephone lines. All permitted encumbrances are standard for properties in this region and do not materially interfere with wind energy operations.

The wind leases include express provisions for the concurrent agricultural use of the leased land. Landowners retain the right to conduct farming and grazing operations on all portions of the leased land not occupied by turbines, access roads, substations, and other project infrastructure. This coexistence model is standard practice in the Oklahoma wind-energy industry and reflects the fact that wind turbines occupy a relatively small physical footprint on the land surface, allowing the vast majority of the leased acreage to remain in agricultural production.

4. Encumbrances and Liens

No project-level debt is currently outstanding with respect to the Red Mesa Wind project. The construction financing facility was repaid in full upon term conversion in 2020, and the associated leasehold mortgage was released. Accordingly, there are no deeds of trust or leasehold mortgages currently encumbering the real property interests.

At the corporate level, the equity interests in Red Mesa Wind Energy LLC are encumbered by the corporate credit facility with Veltrano National Bank. However, this corporate-level lien encumbers the equity interests in the SPV entity rather than the underlying real property. Veltrano National Bank maintains certain step-in rights under the credit facility documentation that could allow it to exercise control over the SPV's real property interests in an enforcement scenario, but there are no direct real property liens in favor of Veltrano on the Red Mesa Wind leases or easements.

UCC financing statements remain on file with the Oklahoma Secretary of State and the Custer County Clerk, perfecting security interests in the wind turbines and related personal property installed at the project site. These filings are standard for wind-energy projects and do not affect the underlying real property interests.

5. Key Issues and Observations

Landowner Management Complexity. The Red Mesa Wind project involves wind lease agreements with approximately 45 individual private landowners. The management of this large number of leases — including royalty calculations, payment processing, compliance monitoring, correspondence, and coordination of concurrent agricultural uses — creates administrative complexity. CBR's in-house legal and land management teams are responsible for ongoing lease administration, and we understand from Sandra Haverford that the Company utilizes a proprietary lease management database to track compliance and payment obligations across the portfolio. While the number of individual landowners is significant, it is not unusual for a wind project of this scale, and CBR appears to have adequate systems and personnel in place to manage the associated obligations.

Landowner Succession / Probate Matter. We have identified one landowner succession issue at the Red Mesa Wind project. One of the participating landowners — whose leased parcel encompasses approximately 600 acres and hosts three turbine sites — is deceased, and the decedent's estate is currently in probate proceedings in Custer County District Court. CBR has been making royalty and rent payments to the duly appointed estate representative (personal representative of the estate), and title counsel has confirmed that the estate representative has authority to receive such payments and to administer the lease during the pendency of the probate proceedings. Upon completion of probate, the lease obligations will be assumed by the heirs or successors to the landowner's interest, as provided in the lease's successor-and-assigns provisions. While title counsel has confirmed that this matter does not present a material risk to CBR's leasehold interest, we recommend that it be monitored through completion of the probate proceedings and that CBR's legal team confirm the identity and contact information of the successor landowners upon distribution of the estate.

Mineral Reservations. As in Texas, mineral reservations are prevalent in Oklahoma, and the mineral and surface estates have been severed on many of the parcels within the Red Mesa Wind project site. The wind leases include surface damage provisions that require any mineral estate owner seeking to access the surface for exploration or production to compensate the lessee for any damage to project infrastructure and to avoid interference with wind operations. These provisions provide a degree of contractual protection, although they are enforceable only against parties who are bound by the wind lease or who have otherwise agreed to the restrictions. The general risk associated with mineral reservations is addressed in the recommended S-1 risk factors discussed in Section VI.A.

Lease Renewal Options. The three 5-year renewal options available under the wind leases extend the potential occupancy period to approximately 2057. This is generally sufficient to cover the expected useful life of modern onshore wind turbines (typically 25–30 years with potential life extension or repowering), although the shorter renewal increments (5 years rather than 10 years) provide somewhat less certainty of long-term occupancy compared to the longer renewal periods available at certain other projects in the portfolio.

Overall Assessment. No material title defects have been identified with respect to the Red Mesa Wind project. The landowner probate matter should be monitored but does not present a material risk. The real property interests are adequate to support continued operations.

C. Painted Rock Solar — Solar PV (320 MW), Maricopa County, Arizona

1. Project Overview

Painted Rock Solar is a 320 MW utility-scale solar photovoltaic project located in Maricopa County, Arizona, in the desert region west of Phoenix. The project is held through Painted Rock Solar LLC, an Arizona limited liability company that is 100%-owned by CB Operating. The project achieved COD in the fourth quarter of 2020 and has been in continuous commercial operation since that date.

2. Land Interests

The Painted Rock Solar project is assembled from a combination of federal land under a Bureau of Land Management ("BLM") right-of-way grant and adjacent private land under a long-term ground lease. This mixed-tenure structure is common for utility-scale solar projects in the American Southwest, where large tracts of suitable land are managed by federal agencies.

BLM Right-of-Way Grant. Approximately 1,800 acres of the project site are located on federal land managed by the BLM. Painted Rock Solar LLC holds a right-of-way ("ROW") grant issued under Title V of the Federal Land Policy and Management Act ("FLPMA"), 43 U.S.C. §§ 1761–1771, authorizing the construction, operation, and maintenance of a solar energy generation facility on the BLM-managed land. The ROW grant has a 30-year term commencing in 2019 and requires annual rental payments to the BLM calculated in accordance with the BLM's linear and acreage rent schedules, as adjusted periodically. The ROW grant was issued following completion of an environmental impact statement ("EIS") under the National Environmental Policy Act ("NEPA") and the issuance of biological opinions under the Endangered Species Act addressing potential impacts to the Sonoran desert tortoise and burrowing owl populations. Compliance with these environmental conditions is an ongoing obligation of the ROW grant holder. Cultural resources surveys were also completed, and no significant cultural resources were identified within the project footprint.

Private Ground Lease. Approximately 800 acres of adjacent private land are subject to a long-term ground lease with a single private landowner. The lease has an initial term of 30 years, commencing in 2019, with one 10-year renewal option exercisable at the lessee's discretion. The lessee is Painted Rock Solar LLC. Annual rent payments are structured on a per-acre basis with fixed escalation provisions. The lease terms are generally consistent with those of the Solaris West ground lease and other solar project leases in the CBR portfolio.

Transmission Easement (State Trust Land). An easement has been obtained across Arizona State Land Department trust land for the gen-tie line connecting the project substation to the Western Electricity Coordinating Council ("WECC") / California Independent System Operator ("CAISO") interconnection point. The gen-tie corridor crosses approximately 6 miles of state trust land. The easement has a 25-year term, commencing in 2019, with renewal provisions that are subject to the approval and rent re-valuation by the Arizona State Land Department. This shorter easement term (relative to the 30-year project lease and ROW grant) is noted as an issue below.

Access Roads. Easements over county roads and private parcels have been obtained for construction and O&M access. The primary access to the project site is via a county-maintained road, with the project's internal road network constructed and maintained by Painted Rock Solar LLC.

3. Title Status

Title insurance policies were obtained for the private lease parcels in connection with the project financing closing. The BLM ROW grant is not insurable through a standard title insurance policy, as the underlying land is federal property; however, the ROW grant itself is a valid and enforceable federal authorization that provides the grant holder with specified rights to use and occupy the federal land for the authorized purposes. The BLM ROW grant is subject to standard federal reservations and conditions, including reservations of mineral rights, rights of access for government purposes, and conditions relating to environmental compliance.

An ALTA/NSPS survey was prepared for the private land parcels and certified to Painted Rock Solar LLC, the title company, and the project lenders. For the BLM land, federal surveys and the environmental assessment documents serve as the spatial reference for the project footprint.

Permitted encumbrances on the private parcels include: (i) utility easements for existing distribution lines; (ii) a county road right-of-way; and (iii) prior agricultural use rights, which were terminated upon commencement of the solar lease and conversion of the land to solar energy use.

4. Encumbrances and Liens

A leasehold deed of trust has been granted on the private ground lease in favor of the project's lenders. With respect to the BLM ROW grant, federal law prohibits the granting of a direct security interest in federal land; however, the project lenders have taken a collateral assignment of the ROW grant to the extent permitted by law and BLM regulations. This collateral assignment provides the lenders with the right to step into the ROW grant holder's position in the event of a default, subject to BLM consent and applicable federal requirements.

At the corporate level, the equity interests in Painted Rock Solar LLC are encumbered by the corporate credit facility with Veltrano National Bank.

5. Key Issues and Observations

BLM ROW Renewal Risk. The BLM ROW grant has a 30-year term expiring in 2049. Upon expiration, renewal of the ROW grant is at the discretion of the BLM and will be subject to the environmental review requirements then in effect, which may include a new or supplemental NEPA analysis, updated biological opinions, and compliance with any new or amended regulations applicable to solar energy development on federal land. While the BLM has historically been supportive of renewable energy development and has established a programmatic framework for utility-scale solar development on BLM-managed lands, there is no guarantee that the ROW grant will be renewed on commercially acceptable terms or at all. This is a standard risk for renewable energy projects located on federal land and should be disclosed in the Registration Statement risk factors.

State Trust Land Transmission Easement — Shorter Term. The transmission easement across Arizona State Land Department trust land has a 25-year term expiring in 2044, which is 5 years shorter than the BLM ROW grant (expiring 2049) and the private ground lease (expiring 2049, with a renewal option extending to 2059). If the transmission easement is not renewed in 2044, the project would lose its interconnection pathway, effectively rendering the generation facilities unusable. The renewal process requires application to and approval by the Arizona State Land Department, which will conduct a re-valuation of the rent based on then-current market conditions. While the Arizona State Land Department has historically been supportive of renewable energy transmission infrastructure, the shorter easement term introduces a timing risk that should be monitored and, if appropriate, disclosed in the Registration Statement.

Environmental Compliance Obligations. The BLM ROW grant is conditioned on ongoing compliance with environmental mitigation measures, including desert tortoise translocation and monitoring protocols, burrowing owl avoidance and mitigation measures, and noxious weed management. Failure to comply with these conditions could result in suspension or termination of the ROW grant. These environmental compliance matters are addressed in detail in the Due Diligence Memorandum — Environmental (Document 29).

Overall Assessment. No material title defects have been identified on the private parcels. The BLM ROW grant and the state trust land transmission easement are valid and enforceable instruments that provide adequate real property rights for current operations. The principal risks relate to renewal of these government-granted interests upon expiration and ongoing environmental compliance, both of which are recommended for disclosure in the Registration Statement.

D. Pronghorn Wind — Onshore Wind (510 MW), Nolan County, Texas

1. Project Overview

Pronghorn Wind is a 510 MW onshore wind energy project — the largest single project in CBR's operating portfolio by nameplate capacity — located in Nolan County, Texas, in the heart of one of the most prolific wind-energy development regions in the United States. The project is held through Pronghorn Wind LLC, a Texas limited liability company that is 100%-owned by CB Operating. The project achieved COD in the second quarter of 2021 and has been in continuous commercial operation since that date. The project is financed through the corporate credit facility with Veltrano National Bank.

2. Land Interests

Wind Lease Agreements. The Pronghorn Wind project site is assembled from multiple wind-energy lease agreements with approximately 55 private landowners covering approximately 42,000 acres of ranchland and agricultural property in Nolan County. The wind leases have an initial term of 30 years, commencing in 2020, with two successive 10-year renewal options exercisable at the lessee's discretion. Compensation to landowners is structured as a combination of royalty payments based on actual energy production and minimum annual rent payments. The lessee under all wind leases is Pronghorn Wind LLC. Memoranda of lease have been recorded in the Nolan County Clerk's office for all leased parcels.

The wind leases include standard provisions for permitted uses, concurrent agricultural use (consistent with the Red Mesa Wind leases), setback requirements, decommissioning obligations, and lender consent and collateral assignment provisions.

Access and Road Easements. Permanent easements have been obtained for turbine access roads, crane paths, the O&M facility, and the project substation site. These easements provide the access necessary for routine operations and maintenance, major component replacements (which require heavy-lift cranes), and emergency response.

Transmission Easement. A perpetual easement has been obtained for the 345-kV gen-tie line connecting the project substation to the ERCOT interconnection point. The gen-tie line extends approximately 6 miles across two privately owned parcels. Notably, this transmission easement was granted on a perpetual basis (rather than for a fixed term), which is unusual for the CBR portfolio but highly favorable, as it eliminates renewal risk for the transmission corridor.

O&M Facility Lease. A separate lease has been obtained for the O&M building and warehouse facility located on approximately 5 acres adjacent to the project substation. This lease has a 20-year initial term, which is shorter than the wind lease terms. The O&M facility lease provides for a renewal option at the lessee's discretion, and the facility could be relocated if necessary (though relocation would involve expense and logistical disruption).

3. Title Status

Title insurance policies were obtained at the project-finance closing in connection with the construction facility provided by Veltrano National Bank as part of the corporate credit facility security package. Owner's and lender's title insurance policies were issued by Dunmore Insurance.

ALTA/NSPS surveys were prepared for all turbine pad sites, the substation, the gen-tie corridor, and the O&M facility. The surveys were certified to Pronghorn Wind LLC, Dunmore Insurance, and Veltrano National Bank.

Permitted encumbrances include: (i) oil and gas mineral reservations (with surface waivers obtained, consistent with the Solaris West approach); (ii) existing pipeline easements — two pipelines cross portions of the project area, as discussed below; (iii) county road rights-of-way; and (iv) utility easements for rural electric distribution and telephone lines.

4. Encumbrances and Liens

Leasehold mortgages and deeds of trust have been granted in favor of Veltrano National Bank as part of the corporate credit facility security package. UCC financing statements have been filed perfecting security interests in the wind turbines, towers, blades, nacelles, and related personal property.

5. Key Issues and Observations

Existing Pipeline Easements. Two existing pipeline easements cross portions of the Pronghorn Wind project area. These pipelines predate the wind leases and their associated easements are senior to the wind lease interests. However, CBR's engineering team confirmed that turbine setback requirements from the pipelines have been satisfied, and the ALTA surveys depict the pipeline corridors in relation to the turbine pad locations, confirming that there is no physical conflict between the pipeline infrastructure and the wind turbine installations. The pipeline easements are disclosed as permitted encumbrances in the title policies. While the pipelines do not present a current operational conflict, their presence limits the flexibility for future re-siting of turbines in connection with any potential repowering and should be disclosed in the Registration Statement as a permitted encumbrance that may affect the project.

Most-Favored-Nation Clause. The wind lease with the largest single landowner at the Pronghorn Wind project (whose leased parcel encompasses approximately 12,000 acres) includes a most-favored-nation ("MFN") clause. This clause requires CBR to offer the MFN landowner lease terms that are no less favorable than the most favorable terms offered to any other landowner in the project, measured across key economic terms (per-turbine royalty rate, minimum annual rent per acre, and signing bonus). CBR's in-house legal team has confirmed compliance with the MFN clause through the current period. We note that MFN clauses in wind leases can create upward pressure on lease costs over time if more favorable terms are offered to other landowners in connection with lease amendments, renewals, or new leases within the project area. CBR should continue to monitor compliance with the MFN clause and consider its implications in connection with any future lease modifications.

Surface Waivers. Surface waiver agreements have been obtained from the holders of mineral interests on all project parcels, consistent with the approach employed at the Solaris West project. The analysis of mineral reservation risks set forth in Section VI.A applies equally to the Pronghorn Wind project.

Lease Renewal Options. The two 10-year renewal options extend the potential occupancy period to approximately 2070, which is more than adequate for the expected useful life of the installed wind turbines and any potential repowering.

Overall Assessment. No material title defects have been identified with respect to the Pronghorn Wind project. The existing pipeline easements and the MFN clause are noted as items for ongoing monitoring but do not constitute material impediments to current operations.

E. Brazos Storage — Battery Energy Storage (200 MW / 800 MWh), Fort Bend County, Texas

1. Project Overview

Brazos Storage is a 200 MW / 800 MWh lithium-ion battery energy storage system ("BESS") project located in Fort Bend County, Texas, in the greater Houston metropolitan area. The project is held through Brazos Energy Storage LLC, a Texas limited liability company that is 100%-owned by CB Operating. The project achieved COD in the fourth quarter of 2021 and is currently operating, providing energy arbitrage, ancillary services, and grid reliability services to the ERCOT market. The project is financed through the corporate credit facility with Veltrano National Bank.

2. Land Interests

Ground Lease. The Brazos Storage project is situated on a single ground lease with one private landowner covering approximately 25 acres. The relatively compact footprint reflects the significantly lower land requirements of BESS projects compared to utility-scale solar and wind projects. The ground lease has an initial term of 25 years, commencing in 2020, with two successive 5-year renewal options exercisable at the lessee's discretion. Annual rent payments are fixed with CPI-based escalation provisions. The lessee is Brazos Energy Storage LLC. A memorandum of lease has been recorded in the Fort Bend County Clerk's office.

The ground lease contains standard provisions for permitted uses (battery energy storage, grid interconnection, and related activities), maintenance obligations, insurance, indemnification, default and remedies, and decommissioning/site restoration. The lessee has the right to remove all improvements and equipment upon lease termination.

Transmission Easement. An easement has been obtained for the interconnection line connecting the project to the ERCOT substation. The interconnection line extends approximately 2 miles. The easement has a 25-year term with a renewal option coterminous with the ground lease.

Construction Access Easement. A temporary construction access easement was obtained for construction staging and heavy equipment delivery. This easement expired upon COD and is no longer in effect.

3. Title Status

An owner's title insurance policy was obtained in connection with the project financing closing, insuring Brazos Energy Storage LLC's leasehold interest. A lender's title insurance policy was simultaneously issued to Veltrano National Bank. The policies were issued by Chalvoro Title Insurance Company.

An ALTA/NSPS survey was prepared for the project site. The survey identified no encroachments or boundary discrepancies. The battery enclosure, inverter stations, transformer, and associated infrastructure are located within the surveyed parcel boundaries with adequate setbacks.

Permitted encumbrances include: (i) a county road right-of-way along the northern boundary of the parcel; and (ii) a drainage easement running along the western boundary of the parcel. Fort Bend County is not a significant oil and gas area for surface impact purposes, and no mineral reservations were identified in the title search that would present a risk of surface-use conflict.

4. Encumbrances and Liens

A leasehold deed of trust has been granted in favor of Veltrano National Bank under the corporate credit facility. UCC financing statements have been filed with the Texas Secretary of State and the Fort Bend County Clerk, perfecting security interests in the battery systems, inverters, transformers, and related equipment.

5. Key Issues and Observations

Single Landowner — Simplified Lease Management. The compact project site and single-landowner structure significantly simplify lease management compared to the multi-landowner wind projects in the portfolio. There is a single lease to administer, a single rent payment to process, and a single relationship to maintain.

Drainage Easement. The drainage easement running along the western boundary of the project site has been reviewed in conjunction with the ALTA survey and CBR's engineering team. The drainage easement does not affect the battery enclosure footprint or any other project infrastructure, and CBR has confirmed that the easement corridor is not required for future expansion of the battery system. Accordingly, the drainage easement does not present a material concern.

Lease Term Adequacy. The 25-year initial lease term is the shortest in the CBR portfolio (tied with the Red Mesa Wind leases). However, the two 5-year renewal options extend the potential occupancy period to 2055, which is adequate given the expected useful life of lithium-ion battery systems (typically 15–20 years with potential for augmentation or replacement). The battery equipment may require replacement or augmentation during the lease term, and the lease permits the installation of replacement equipment.

Overall Assessment. No material title or encumbrance issues have been identified with respect to the Brazos Storage project. The real property profile is clean and straightforward.

F. Mesquite Wind — Onshore Wind (420 MW), Oldham County, Texas [Under Construction]

1. Project Overview

Mesquite Wind is a 420 MW onshore wind energy project located in Oldham County, Texas, in the Texas Panhandle. The project is held through Mesquite Wind Holdings LLC, a Texas limited liability company that is 100%-owned by CB Operating. The project is currently under construction and is expected to achieve COD in the third quarter of 2022. Construction financing is provided through a construction-to-term facility with Prairie Commercial Bank, N.A. in the amount of $165 million, with a term conversion date of December 2024. As a project under construction, the Mesquite Wind real property interests are subject to heightened scrutiny given the active construction activity, the outstanding construction lender requirements, and the pending completion conditions.

2. Land Interests

Wind Lease Agreements. The Mesquite Wind project site is assembled from multiple wind-energy lease agreements with approximately 30 private landowners covering approximately 35,000 acres of ranchland in Oldham County. The wind leases have an initial term of 30 years, with commencement dates varying (the earliest leases commenced in 2020). The leases provide for two successive 10-year renewal options exercisable at the lessee's discretion. Compensation is structured as production royalties plus minimum annual rent payments. The lessee under all wind leases is Mesquite Wind Holdings LLC. Memoranda of lease have been recorded in the Oldham County Clerk's office.

Access and Construction Easements. Permanent road easements have been obtained for long-term O&M access, including turbine access roads, crane paths, and laydown areas. Temporary construction easements have been obtained for batch roads, crane staging areas, and material laydown areas required during the construction period. The temporary construction easements expire 12 months following the achievement of COD.

Transmission Easement. An easement for the gen-tie line has been obtained, extending approximately 15 miles from the project substation to the ERCOT interconnection point. This is the longest gen-tie corridor in the CBR portfolio and crosses approximately 8 additional la

MEMORANDUM
PRIVILEGED AND CONFIDENTIAL ATTORNEY-CLIENT PRIVILEGE / ATTORNEY WORK PRODUCT
This memorandum has been prepared by Calderwood & Harkness LLP at the request of and for the sole benefit of Calloway-Briggs Renewables Inc. in connection with the proposed initial public offering described herein. This memorandum is protected by the attorney-client privilege and the work-product doctrine. Any disclosure of this memorandum or its contents to third parties may result in a waiver of such privileges. Do not distribute without the express authorization of the Responsible Partner.
TO: Jennifer Kwon, Responsible Partner, Capital Markets, Calderwood & Harkness LLP
FROM: Brendan Walsh, Lead Associate, Capital Markets; Natasha Forbes, Working Associate, Capital Markets
DATE: April 25, 2022
RE: Calloway-Briggs Renewables Inc. — Proposed Initial Public Offering — Due Diligence Memorandum: Real Property and Land Rights
MATTER NO.: 1015-00001
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I. EXECUTIVE SUMMARY
This memorandum summarizes the findings of Calderwood & Harkness LLP's ("C&H") review of the real property interests, land leases, surface-use agreements, easements, rights-of-way, and related encumbrances for all material project sites owned or operated by Calloway-Briggs Renewables Inc. ("CBR" or the "Company") and its subsidiaries. This review was conducted in connection with the Company's proposed initial public offering (the "IPO" or the "Offering") of approximately $600,000,000 of shares of common stock on the New York Stock Exchange under the ticker symbol "CBRI." The S-1 registration statement (the "Registration Statement") is currently in preparation and is expected to be filed with the Securities and Exchange Commission in the coming weeks.
Scope of Review. Our review covers all operating projects in the Company's portfolio (aggregating approximately 3.8 GW of nameplate capacity across 22 projects located in Texas, New Mexico, Arizona, California, and Oklahoma), projects currently under construction (aggregating approximately 1.4 GW of nameplate capacity), and select development-stage pipeline projects. This memorandum focuses specifically on the seven material project sites identified in the draft S-1 Registration Statement, which collectively represent the core of CBR's operating and near-term revenue base. Pipeline projects, including those within the Company's 6.2 GW aggregate development pipeline, are addressed at a summary level only.
Overall Assessment. Based on our review, CBR holds its real property interests primarily through long-term ground leases, surface-use agreements, and easements rather than through fee-simple ownership. This is consistent with prevailing industry practice for utility-scale renewable energy projects, where the lease-based model provides developers with access to large tracts of land without the capital requirements of outright acquisition and allows landowners to retain underlying ownership and, in many cases, to continue concurrent agricultural uses. Title matters across the portfolio are generally clean, with customary permitted encumbrances typical of the jurisdictions and property types involved. Specific issues identified on a project-by-project basis are detailed in Section IV below.
All project-level special purpose vehicles ("SPVs") are 100%-owned through Calloway-Briggs Operating Company LLC, a Texas limited liability company ("CB Operating"), which is in turn wholly owned by CBR Holdings LLC, a Delaware limited liability company ("CBR Holdings"), which is wholly owned by CBR. This corporate structure is typical for renewable energy portfolios and facilitates project-level financing, tax-equity transactions, and operational isolation.
Key Findings. The principal findings of this memorandum include the following:
• Lease Renewal Options and Remaining Terms. All operating-project leases carry initial terms ranging from 25 to 40 years, with renewal options that generally extend potential occupancy to periods coterminous with or exceeding the expected useful economic life of the applicable project. The longest initial term in the portfolio is the 40-year state trust land lease at the Cimarron Solar project in Doña Ana County, New Mexico. The shortest initial terms are the 25-year leases at the Red Mesa Wind and Brazos Storage projects. A detailed lease-term summary table is provided in Section VI.F below.
• Pending Easement Acquisitions and Surface Waivers. For the two projects under construction — Mesquite Wind (Oldham County, Texas) and Cimarron Solar (Doña Ana County, New Mexico) — all material easement agreements have been executed. However, at Mesquite Wind, surface waiver agreements from two mineral estate owners covering approximately 2,400 acres remain outstanding. Negotiations are reported by CBR management to be ongoing and constructive, but the absence of executed waivers represents a residual risk that warrants disclosure in the Registration Statement risk factors.
• Federal and State Government Land Rights. Two projects involve real property interests on federal or state government land: Painted Rock Solar (Bureau of Land Management right-of-way grant in Maricopa County, Arizona) and Cimarron Solar (New Mexico State Land Office ground lease in Doña Ana County, New Mexico, and BLM right-of-way grant for the gen-tie transmission line). Government lease and right-of-way renewals are subject to governmental discretion and environmental review, presenting a risk that should be disclosed in the Registration Statement.
• Change-of-Control and Assignment Provisions. Certain land leases and easements in the portfolio contain consent-to-assignment or change-of-control provisions. The Cimarron Solar lease with the New Mexico State Land Office contains an assignment/change-of-control clause that may be triggered by the IPO. CBR management has confirmed that discussions with the New Mexico State Land Office are underway to obtain confirmation that the IPO, which does not alter SPV-level ownership, does not constitute a triggering event. Additionally, select private landowner leases across the portfolio require notice of a "change in control of lessee," and we recommend that estoppel certificates or written confirmations be obtained from key lessors prior to the public filing of the Registration Statement.
• Lender-Required Title Insurance and Estoppel Matters. Prairie Commercial Bank, N.A. ("Prairie Commercial"), the construction lender for the Mesquite Wind and Cimarron Solar projects, requires title insurance endorsements, lessor estoppel certificates, and updated ALTA surveys at both the construction-financing closing and the conversion closing. Veltrano National Bank ("Veltrano"), the corporate credit facility lender, holds security interests in the equity of project SPVs and maintains step-in rights. Cross-references to the Due Diligence Memorandum — Debt and Financing Arrangements (Document 27) and the Lender Consent Analysis (Documents 108–115) are provided where applicable.
Disclosure Recommendations. Based on our findings, we recommend the inclusion of specific risk factors in the Registration Statement addressing: (i) the Company's reliance on leased rather than owned land; (ii) mineral rights conflicts in Texas and Oklahoma; (iii) the discretionary nature of federal and state government lease and ROW renewals; (iv) potential triggering of change-of-control provisions by corporate transactions; and (v) environmental compliance conditions applicable to BLM and state land rights. We also recommend specific disclosures in the Business section and the Description of Indebtedness section of the Registration Statement, as detailed in Section VII below.
Documents Reviewed. Our review was based on the following categories of documents: responses to the Due Diligence Request List — Real Property / Leases (Document 15 of the due diligence request list), title commitments, owner's and lender's title insurance policies, ALTA/NSPS surveys, Phase I and Phase II environmental site assessments prepared by Greenridge Environmental Sciences LLC (under the supervision of Dr. Nadine Torres), recorded instruments obtained through county recorder searches, lease abstracts prepared by CBR's in-house legal team, and easement files provided by CBR's General Counsel, Sandra Haverford, and Senior Vice President of Project Development, Tomás Quintero. A complete index of documents reviewed is attached as Exhibit A.
II. METHODOLOGY AND SCOPE OF REVIEW
A. Document Sources
Our review of CBR's real property interests was based on the following categories of source materials:
1. Data Room Materials. CBR management provided access to an electronic data room containing real property documents organized by project. The data room was administered by CBR's General Counsel, Sandra Haverford, and Senior Vice President of Project Development, Tomás Quintero. Documents in the data room included executed lease agreements, amendments, supplements, and side letters; easement agreements; surface-use agreements; surface waiver agreements; title commitments and policies; ALTA surveys; correspondence with landowners, government agencies, and lenders; and internal lease abstract summaries. We accessed the data room beginning on February 14, 2022, and have continued to review supplemental materials uploaded through April 22, 2022.
2. Recorded Instruments. We obtained copies of recorded instruments through searches of the official records of the county recorders (or county clerks, as applicable) in the following jurisdictions: Pecos County, Texas; Custer County, Oklahoma; Maricopa County, Arizona; Nolan County, Texas; Fort Bend County, Texas; Oldham County, Texas; and Doña Ana County, New Mexico. These searches covered deeds, deeds of trust, leasehold mortgages, memoranda of lease, easement agreements, UCC fixture filings, and other instruments of record affecting the real property interests held by CBR's project-level SPVs. Our county recorder searches were current as of various dates in March and April 2022, as specified in the project-specific sections below.
3. Title Commitments and Title Insurance Policies. We reviewed the owner's and lender's title insurance policies issued in connection with project-financing closings, as well as title commitments issued for projects under construction. Title policies were issued by Chalvoro Title Insurance Company, Granite Harbor Indemnity Co., and Dunmore Insurance, depending on the project. We reviewed the legal descriptions, schedules of exceptions, and endorsements in each policy and commitment.
4. ALTA/NSPS Surveys. We reviewed ALTA/NSPS land title surveys prepared for each material project site. These surveys were prepared by licensed surveyors in the applicable jurisdictions and were certified to the applicable SPV entities, their title companies, and their lenders. We reviewed the surveys for encroachments, boundary discrepancies, easement locations, and other survey matters.
5. Phase I Environmental Site Assessments. Phase I environmental site assessments ("ESAs") for each material project site were prepared by Greenridge Environmental Sciences LLC under the supervision of Dr. Nadine Torres and in accordance with ASTM Standard E1527-13. We reviewed these assessments for recognized environmental conditions that could affect real property interests. Detailed analysis of environmental matters is provided in the separate Due Diligence Memorandum — Environmental (Document 29), and this memorandum cross-references that analysis where appropriate.
6. Lender Due Diligence Files. We reviewed real property due diligence files from project-finance closings with Prairie Commercial Bank, N.A. (construction-to-term facilities for Mesquite Wind and Cimarron Solar) and Veltrano National Bank (corporate credit facility). These files included lender title review memoranda, title objection letters, cure correspondence, and closing checklists, which provided useful reference points for confirming the resolution of title matters at prior closings.
B. Scope Limitations
The following limitations apply to the scope of this memorandum:
1. Material Projects Only. Our detailed project-by-project review is limited to the seven material project sites specifically identified in the draft S-1 Registration Statement: Solaris West, Red Mesa Wind, Painted Rock Solar, Pronghorn Wind, Brazos Storage, Mesquite Wind, and Cimarron Solar. CBR's portfolio includes 22 operating projects and a broader development pipeline; those additional projects were not the subject of detailed real property diligence for purposes of this memorandum.
2. Development Pipeline — Summary Level Only. Development-stage pipeline projects, including Silverleaf Wind (Irion County, Texas), Copper Basin Solar + Storage (Riverside County, California), and other projects in the Company's 6.2 GW aggregate development pipeline, are addressed in Section V of this memorandum at a summary level only. Full real property diligence will be required as those projects advance to construction financing and become material to the Company's operations and financial statements.
3. Reliance on Lease Abstracts. For routine lease terms — including rent payment schedules, notice provisions, insurance requirements, and maintenance obligations — we relied on lease abstracts prepared by CBR's in-house legal team. These abstracts were provided in the data room and were represented by Sandra Haverford to be accurate and current as of February 2022. We reviewed the original lease documents for key economic and structural provisions, including term, renewal options, assignment and change-of-control provisions, termination rights, lender consent and estoppel requirements, and co-tenancy or most-favored-nation clauses. A consolidated lease abstract summary is attached as Exhibit B.
4. No Independent Survey Work. We did not commission independent survey work for any project site. Our review of survey matters is based on existing ALTA/NSPS surveys provided by CBR in the data room. Those surveys were prepared at various dates in connection with project development and financing closings and may not reflect current conditions. We recommend that updated surveys be obtained for projects under construction (Mesquite Wind and Cimarron Solar) at the time of their respective conversion closings, as is required by Prairie Commercial Bank under the applicable credit agreements.
5. Mineral Title. We did not conduct an independent review of mineral title for any project site. Our analysis of mineral rights issues is based on the surface waiver agreements provided in the data room, representations of CBR management regarding the status of mineral ownership, and title policy exceptions relating to mineral reservations. A full mineral title search was beyond the scope of this engagement.
6. Reliance on Management Representations. Certain factual statements in this memorandum are based on representations made by CBR management, including Sandra Haverford and Tomás Quintero, in responses to our due diligence request list and in oral communications during management interview sessions. We have not independently verified all such representations.
III. CORPORATE STRUCTURE — REAL PROPERTY HOLDING ENTITIES
CBR holds its real property interests through a tiered structure of holding companies and project-level special purpose vehicles. The holding structure is summarized as follows:
Calloway-Briggs Renewables Inc. (Delaware corporation; the IPO issuer)
↓ 100% ownership
CBR Holdings LLC (Delaware limited liability company; intermediate holding entity)
↓ 100% ownership
Calloway-Briggs Operating Company LLC (Texas limited liability company; "CB Operating"; operational holding entity)
↓ 100% ownership (except where noted)
Project-Level SPVs (each holding the real property interests for a specific project)
Each project in the CBR portfolio is held through a separate special purpose vehicle that is the lessee, grantee, or permittee under the applicable real property instruments. This SPV structure serves several purposes: it provides liability isolation between projects, facilitates project-level financing and tax-equity transactions, satisfies lender requirements for bankruptcy-remote entities, and simplifies the administration of project-specific leases and permits.
The following table identifies the SPV entities holding real property interests for the seven material project sites addressed in this memorandum:
All of the foregoing SPVs are 100%-owned by CB Operating, which is 100%-owned by CBR Holdings, which is 100%-owned by CBR. There are no minority interest holders, joint venture partners, or co-investors at the SPV level, with the following exception:
Tax-Equity Structure at Solaris West. Solaris West Solar LLC is subject to a tax-equity partnership structure with Veltara Basin Financial LLC ("Veltara Basin"), a subsidiary of a major financial institution. Veltara Basin invested approximately $280 million in the tax-equity partnership in connection with the Solaris West project. Under the terms of the partnership agreement, Veltara Basin is allocated substantially all of the tax benefits (investment tax credits and accelerated depreciation) generated by the Solaris West project during the initial period, and the partnership is expected to "flip" in 2028, at which point CBR (through CB Operating) will acquire Veltara Basin's interest for a nominal purchase price. Importantly, the land interests — specifically, the ground lease and associated easements — are held by Solaris West Solar LLC in its capacity as lessee and grantee, and those interests are pledged to the tax-equity structure as part of the collateral package. The tax-equity flip in 2028 will not result in a change of lessee under the ground lease or a transfer of any real property interests. For a detailed analysis of the tax-equity structure and its implications, see the Due Diligence Memorandum — Tax Structure and Tax-Equity (Document 25) and the Due Diligence Memorandum — Debt and Financing Arrangements (Document 27).
Additionally, CBR Development Co. LLC, a Texas limited liability company wholly owned by CB Operating, holds land option agreements and preliminary lease agreements for development-stage pipeline projects. These interests are addressed at a summary level in Section V of this memorandum.
IV. PROJECT-BY-PROJECT ANALYSIS
A. Solaris West — Solar PV (450 MW), Pecos County, Texas
1. Project Overview
Solaris West is a 450 MW utility-scale solar photovoltaic project located in Pecos County, in the Permian Basin region of West Texas. The project is held through Solaris West Solar LLC, a Texas limited liability company that is 100%-owned by CB Operating (subject to the tax-equity partnership structure with Veltara Basin described in Section III above). The project achieved commercial operation ("COD") in the third quarter of 2020 and is currently operating. Financing for the project was provided through a tax-equity partnership with Veltara Basin Financial LLC (approximately $280 million invested) and through the corporate credit facility with Veltrano National Bank, which holds lender interests at the corporate level. The project sells energy and renewable energy credits under a long-term power purchase agreement, the terms of which are discussed in the Due Diligence Memorandum — Material Contracts (Document 20).
2. Land Interests
Primary Ground Lease. The core real property interest supporting the Solaris West project is a long-term ground lease with multiple private landowners covering approximately 3,200 acres of contiguous ranchland in Pecos County. The lease has an initial term of 30 years, commencing in 2018, with two successive 10-year renewal options exercisable at the lessee's discretion. Annual rent payments are made to the individual landowners on a per-acre basis, with escalation provisions tied to the Consumer Price Index ("CPI"), subject to a cap of 2.5% per annum. The lessee under the ground lease is Solaris West Solar LLC. Memoranda of lease have been recorded in the official records of Pecos County for each applicable parcel, providing constructive notice of the leasehold interest.
The ground lease contains standard provisions governing permitted uses (solar energy generation, energy storage, and related activities), maintenance obligations, insurance requirements, indemnification, default and remedies, and casualty and condemnation. The lessee has the right to remove all improvements and personal property upon lease termination, subject to site restoration obligations. The lease also contains provisions permitting the granting of leasehold mortgages and collateral assignments to lenders and tax-equity investors, subject to customary notice and cure rights in favor of the lenders.
Surface-Use Agreements. Supplemental surface-use agreements have been executed with adjacent landowners to provide access for roads, laydown areas, and temporary construction staging. The temporary construction easements associated with these agreements expired upon completion of construction and are no longer in effect. Permanent access easements for ongoing operation and maintenance ("O&M") activities remain in force.
Transmission Easement. A permanent easement has been obtained for the generation-tie ("gen-tie") transmission line connecting the project substation to the Electric Reliability Council of Texas ("ERCOT") interconnection point. The gen-tie line extends approximately 8 miles across privately owned land in Pecos County. The easement has a 30-year term with a renewal option that is coterminous with the ground lease, ensuring that the transmission corridor remains available for the duration of the project's operational life. The easement agreement provides for annual payments to the landowners along the corridor and includes provisions for the lessee's right to install, maintain, repair, and replace the transmission line and associated infrastructure.
Water Rights and Access. Solaris West Solar LLC holds a water supply agreement with a local water provider for panel-washing operations. Additionally, the project benefits from a non-exclusive access easement to a county road that provides primary ingress and egress to the project site. The water supply agreement is a standard commercial contract with annual renewal provisions and is not a significant component of the project's real property profile.
3. Title Status
An owner's title insurance policy was obtained in connection with the project financing closing, insuring Solaris West Solar LLC's leasehold interest in the approximately 3,200-acre project site. A lender's title insurance policy was simultaneously issued to Veltrano National Bank as part of the corporate credit facility security package. Both policies were issued by Chalvoro Title Insurance Company.
An ALTA/NSPS land title survey was prepared for the project site and certified as of 2019. The survey identified no material encroachments or boundary discrepancies. The survey depicted the location of the solar array, substation, gen-tie corridor, access roads, and other improvements in relation to the parcel boundaries, easements, and other features of the property.
Permitted encumbrances identified in the title policy include: (i) oil and gas mineral reservations (the mineral estate has been severed from the surface estate on all project parcels, as is typical in the Permian Basin); (ii) utility easements for existing electric distribution and telephone lines; and (iii) a county road right-of-way along the southern boundary of the project site. Surface waiver agreements have been obtained from the holders of the mineral interests on all project parcels, as discussed further below. All of the foregoing encumbrances are standard for properties in this region and do not materially affect the Company's use or enjoyment of the project site for solar energy operations.
4. Encumbrances and Liens
The following liens and encumbrances have been granted against the Solaris West project's real property interests:
• Deed of Trust / Leasehold Mortgage. A deed of trust encumbering the leasehold interest in the ground lease has been granted in favor of the tax-equity structure (Veltara Basin Financial LLC) and the corporate lenders. This instrument secures the obligations of Solaris West Solar LLC under the tax-equity partnership agreement and the corporate credit facility.
• UCC Filings. Uniform Commercial Code financing statements have been filed with the Texas Secretary of State and the Pecos County Clerk's office, perfecting security interests in the personal property located at the project site, including solar panels, inverters, racking systems, and related equipment.
All of the foregoing liens are permitted under the terms of the ground lease and were disclosed to and approved by the lessors at the time of the project financing closing.
5. Key Issues and Observations
Mineral Reservation Surface Waivers. The mineral estate has been severed from the surface estate on all parcels within the Solaris West project site, which is common in the Permian Basin region of West Texas. While severance of the mineral and surface estates does not in itself create a conflict — the mineral estate holder's right to access the surface for exploration and production is a recognized legal right under Texas law — the potential for future mineral development activity to interfere with solar operations represents a risk. To mitigate this risk, CBR has obtained surface waiver agreements from the current holders of the mineral interests on all project parcels. These waivers prohibit the mineral interest holders from conducting surface activities that would interfere with solar energy operations on the leased premises. We recommend that the existence and nature of these mineral reservations, and the reliance on surface waiver agreements, be disclosed as a risk factor in the Registration Statement. Specifically, the risk factor should address the possibility that future transfers or severances of mineral interests could introduce parties who are not bound by (or who may challenge) the existing waiver agreements, and that mineral development activity on adjacent tracts could potentially affect project operations. See Section VI.A for additional analysis.
Lease Renewal Options. The two 10-year renewal options available under the ground lease extend the potential occupancy period to 2068. This is sufficient to cover the expected useful life of the solar array (typically 30–35 years for utility-scale solar PV projects with potential repowering). The renewal options are exercisable at the lessee's sole discretion, subject to delivery of written notice to the lessors not less than 12 months prior to the expiration of the then-current term.
Tax-Equity Flip. The tax-equity partnership with Veltara Basin Financial LLC is expected to flip in 2028, at which point CBR (through CB Operating) will acquire Veltara Basin's partnership interest. This event will not affect the real property interests held by Solaris West Solar LLC, as the SPV will remain the lessee under the ground lease and the grantee under the associated easements throughout the flip transaction.
Overall Assessment. No material title defects have been identified with respect to the Solaris West project. The real property interests are adequate to support continued operations and are consistent with the representations made in the draft Registration Statement.
B. Red Mesa Wind — Onshore Wind (380 MW), Custer County, Oklahoma
1. Project Overview
Red Mesa Wind is a 380 MW onshore wind energy project located in Custer County, in western Oklahoma. The project is held through Red Mesa Wind Energy LLC, an Oklahoma limited liability company that is 100%-owned by CB Operating. The project achieved COD in the first quarter of 2019 and has been in continuous commercial operation since that date. The construction financing facility was fully repaid upon term conversion in 2020, and no project-level debt is currently outstanding. The equity interests in Red Mesa Wind Energy LLC are encumbered by the corporate credit facility with Veltrano National Bank.
2. Land Interests
Wind Lease Agreements. The Red Mesa Wind project site is assembled from multiple wind-energy lease agreements with approximately 45 private landowners covering approximately 28,000 acres in Custer County. The large acreage is typical of onshore wind projects, which require significant spacing between turbines to optimize energy capture and minimize wake effects. The wind leases have an initial term of 25 years (with the earliest leases commencing in approximately 2017) and provide for three successive 5-year renewal options exercisable at the lessee's discretion. Compensation to landowners is structured as a combination of per-turbine royalty payments (based on actual energy production) and annual minimum rent payments, ensuring that each participating landowner receives a baseline level of income regardless of production levels. The lessee under all wind leases is Red Mesa Wind Energy LLC. Memoranda of lease have been recorded in the Custer County Clerk's office for each leased parcel.
The wind leases contain provisions that are standard for the Oklahoma wind-energy industry, including permitted use clauses (wind energy generation, meteorological monitoring, transmission, and related activities), provisions for concurrent agricultural use (discussed below), setback requirements from residences and roads, decommissioning and site restoration obligations, and provisions permitting the granting of leasehold mortgages and collateral assignments to project lenders and tax-equity investors.
Access Easements. Permanent road and access easements have been obtained across both leased and non-leased parcels within and adjacent to the project site. These easements provide access for turbine maintenance, crane operations, and general O&M activities. The access easements run with the land and are coterminous with the wind lease terms.
Transmission Easement. An easement has been obtained for the 345-kV gen-tie line connecting the project substation to the Southwest Power Pool ("SPP") grid interconnection point. The gen-tie line extends approximately 12 miles across privately owned agricultural land in Custer County. The easement has a term that is coterminous with the wind leases and provides for annual payments to the affected landowners.
Meteorological Tower Easements. Permanent easements have been obtained for five meteorological monitoring towers located at various points across the project site. These easements permit the installation, operation, maintenance, and replacement of the meteorological towers and associated equipment. The met tower data is used for resource assessment, performance monitoring, and warranty compliance.
3. Title Status
Title opinions were obtained from local Oklahoma counsel at the project development stage, covering each parcel within the project site. These opinions were supplemented by owner's and lender's title insurance policies obtained at the construction-financing closing. The title policies were issued by Granite Harbor Indemnity Co..
ALTA/NSPS surveys were prepared for all turbine pad sites, the substation, the gen-tie transmission corridor, and the O&M facility. The surveys were certified to Red Mesa Wind Energy LLC, Granite Harbor Indemnity Co., and the construction lender (whose facility has since been repaid).
Permitted encumbrances identified in the title policies and title opinions include: (i) oil and gas mineral reservations, which are prevalent throughout western Oklahoma and are common on virtually all agricultural properties in Custer County; (ii) agricultural surface use rights, which coexist with wind operations as discussed below; (iii) county road rights-of-way; and (iv) utility easements for rural electric distribution and telephone lines. All permitted encumbrances are standard for properties in this region and do not materially interfere with wind energy operations.
The wind leases include express provisions for the concurrent agricultural use of the leased land. Landowners retain the right to conduct farming and grazing operations on all portions of the leased land not occupied by turbines, access roads, substations, and other project infrastructure. This coexistence model is standard practice in the Oklahoma wind-energy industry and reflects the fact that wind turbines occupy a relatively small physical footprint on the land surface, allowing the vast majority of the leased acreage to remain in agricultural production.
4. Encumbrances and Liens
No project-level debt is currently outstanding with respect to the Red Mesa Wind project. The construction financing facility was repaid in full upon term conversion in 2020, and the associated leasehold mortgage was released. Accordingly, there are no deeds of trust or leasehold mortgages currently encumbering the real property interests.
At the corporate level, the equity interests in Red Mesa Wind Energy LLC are encumbered by the corporate credit facility with Veltrano National Bank. However, this corporate-level lien encumbers the equity interests in the SPV entity rather than the underlying real property. Veltrano National Bank maintains certain step-in rights under the credit facility documentation that could allow it to exercise control over the SPV's real property interests in an enforcement scenario, but there are no direct real property liens in favor of Veltrano on the Red Mesa Wind leases or easements.
UCC financing statements remain on file with the Oklahoma Secretary of State and the Custer County Clerk, perfecting security interests in the wind turbines and related personal property installed at the project site. These filings are standard for wind-energy projects and do not affect the underlying real property interests.
5. Key Issues and Observations
Landowner Management Complexity. The Red Mesa Wind project involves wind lease agreements with approximately 45 individual private landowners. The management of this large number of leases — including royalty calculations, payment processing, compliance monitoring, correspondence, and coordination of concurrent agricultural uses — creates administrative complexity. CBR's in-house legal and land management teams are responsible for ongoing lease administration, and we understand from Sandra Haverford that the Company utilizes a proprietary lease management database to track compliance and payment obligations across the portfolio. While the number of individual landowners is significant, it is not unusual for a wind project of this scale, and CBR appears to have adequate systems and personnel in place to manage the associated obligations.
Landowner Succession / Probate Matter. We have identified one landowner succession issue at the Red Mesa Wind project. One of the participating landowners — whose leased parcel encompasses approximately 600 acres and hosts three turbine sites — is deceased, and the decedent's estate is currently in probate proceedings in Custer County District Court. CBR has been making royalty and rent payments to the duly appointed estate representative (personal representative of the estate), and title counsel has confirmed that the estate representative has authority to receive such payments and to administer the lease during the pendency of the probate proceedings. Upon completion of probate, the lease obligations will be assumed by the heirs or successors to the landowner's interest, as provided in the lease's successor-and-assigns provisions. While title counsel has confirmed that this matter does not present a material risk to CBR's leasehold interest, we recommend that it be monitored through completion of the probate proceedings and that CBR's legal team confirm the identity and contact information of the successor landowners upon distribution of the estate.
Mineral Reservations. As in Texas, mineral reservations are prevalent in Oklahoma, and the mineral and surface estates have been severed on many of the parcels within the Red Mesa Wind project site. The wind leases include surface damage provisions that require any mineral estate owner seeking to access the surface for exploration or production to compensate the lessee for any damage to project infrastructure and to avoid interference with wind operations. These provisions provide a degree of contractual protection, although they are enforceable only against parties who are bound by the wind lease or who have otherwise agreed to the restrictions. The general risk associated with mineral reservations is addressed in the recommended S-1 risk factors discussed in Section VI.A.
Lease Renewal Options. The three 5-year renewal options available under the wind leases extend the potential occupancy period to approximately 2057. This is generally sufficient to cover the expected useful life of modern onshore wind turbines (typically 25–30 years with potential life extension or repowering), although the shorter renewal increments (5 years rather than 10 years) provide somewhat less certainty of long-term occupancy compared to the longer renewal periods available at certain other projects in the portfolio.
Overall Assessment. No material title defects have been identified with respect to the Red Mesa Wind project. The landowner probate matter should be monitored but does not present a material risk. The real property interests are adequate to support continued operations.
C. Painted Rock Solar — Solar PV (320 MW), Maricopa County, Arizona
1. Project Overview
Painted Rock Solar is a 320 MW utility-scale solar photovoltaic project located in Maricopa County, Arizona, in the desert region west of Phoenix. The project is held through Painted Rock Solar LLC, an Arizona limited liability company that is 100%-owned by CB Operating. The project achieved COD in the fourth quarter of 2020 and has been in continuous commercial operation since that date.
2. Land Interests
The Painted Rock Solar project is assembled from a combination of federal land under a Bureau of Land Management ("BLM") right-of-way grant and adjacent private land under a long-term ground lease. This mixed-tenure structure is common for utility-scale solar projects in the American Southwest, where large tracts of suitable land are managed by federal agencies.
BLM Right-of-Way Grant. Approximately 1,800 acres of the project site are located on federal land managed by the BLM. Painted Rock Solar LLC holds a right-of-way ("ROW") grant issued under Title V of the Federal Land Policy and Management Act ("FLPMA"), 43 U.S.C. §§ 1761–1771, authorizing the construction, operation, and maintenance of a solar energy generation facility on the BLM-managed land. The ROW grant has a 30-year term commencing in 2019 and requires annual rental payments to the BLM calculated in accordance with the BLM's linear and acreage rent schedules, as adjusted periodically. The ROW grant was issued following completion of an environmental impact statement ("EIS") under the National Environmental Policy Act ("NEPA") and the issuance of biological opinions under the Endangered Species Act addressing potential impacts to the Sonoran desert tortoise and burrowing owl populations. Compliance with these environmental conditions is an ongoing obligation of the ROW grant holder. Cultural resources surveys were also completed, and no significant cultural resources were identified within the project footprint.
Private Ground Lease. Approximately 800 acres of adjacent private land are subject to a long-term ground lease with a single private landowner. The lease has an initial term of 30 years, commencing in 2019, with one 10-year renewal option exercisable at the lessee's discretion. The lessee is Painted Rock Solar LLC. Annual rent payments are structured on a per-acre basis with fixed escalation provisions. The lease terms are generally consistent with those of the Solaris West ground lease and other solar project leases in the CBR portfolio.
Transmission Easement (State Trust Land). An easement has been obtained across Arizona State Land Department trust land for the gen-tie line connecting the project substation to the Western Electricity Coordinating Council ("WECC") / California Independent System Operator ("CAISO") interconnection point. The gen-tie corridor crosses approximately 6 miles of state trust land. The easement has a 25-year term, commencing in 2019, with renewal provisions that are subject to the approval and rent re-valuation by the Arizona State Land Department. This shorter easement term (relative to the 30-year project lease and ROW grant) is noted as an issue below.
Access Roads. Easements over county roads and private parcels have been obtained for construction and O&M access. The primary access to the project site is via a county-maintained road, with the project's internal road network constructed and maintained by Painted Rock Solar LLC.
3. Title Status
Title insurance policies were obtained for the private lease parcels in connection with the project financing closing. The BLM ROW grant is not insurable through a standard title insurance policy, as the underlying land is federal property; however, the ROW grant itself is a valid and enforceable federal authorization that provides the grant holder with specified rights to use and occupy the federal land for the authorized purposes. The BLM ROW grant is subject to standard federal reservations and conditions, including reservations of mineral rights, rights of access for government purposes, and conditions relating to environmental compliance.
An ALTA/NSPS survey was prepared for the private land parcels and certified to Painted Rock Solar LLC, the title company, and the project lenders. For the BLM land, federal surveys and the environmental assessment documents serve as the spatial reference for the project footprint.
Permitted encumbrances on the private parcels include: (i) utility easements for existing distribution lines; (ii) a county road right-of-way; and (iii) prior agricultural use rights, which were terminated upon commencement of the solar lease and conversion of the land to solar energy use.
4. Encumbrances and Liens
A leasehold deed of trust has been granted on the private ground lease in favor of the project's lenders. With respect to the BLM ROW grant, federal law prohibits the granting of a direct security interest in federal land; however, the project lenders have taken a collateral assignment of the ROW grant to the extent permitted by law and BLM regulations. This collateral assignment provides the lenders with the right to step into the ROW grant holder's position in the event of a default, subject to BLM consent and applicable federal requirements.
At the corporate level, the equity interests in Painted Rock Solar LLC are encumbered by the corporate credit facility with Veltrano National Bank.
5. Key Issues and Observations
BLM ROW Renewal Risk. The BLM ROW grant has a 30-year term expiring in 2049. Upon expiration, renewal of the ROW grant is at the discretion of the BLM and will be subject to the environmental review requirements then in effect, which may include a new or supplemental NEPA analysis, updated biological opinions, and compliance with any new or amended regulations applicable to solar energy development on federal land. While the BLM has historically been supportive of renewable energy development and has established a programmatic framework for utility-scale solar development on BLM-managed lands, there is no guarantee that the ROW grant will be renewed on commercially acceptable terms or at all. This is a standard risk for renewable energy projects located on federal land and should be disclosed in the Registration Statement risk factors.
State Trust Land Transmission Easement — Shorter Term. The transmission easement across Arizona State Land Department trust land has a 25-year term expiring in 2044, which is 5 years shorter than the BLM ROW grant (expiring 2049) and the private ground lease (expiring 2049, with a renewal option extending to 2059). If the transmission easement is not renewed in 2044, the project would lose its interconnection pathway, effectively rendering the generation facilities unusable. The renewal process requires application to and approval by the Arizona State Land Department, which will conduct a re-valuation of the rent based on then-current market conditions. While the Arizona State Land Department has historically been supportive of renewable energy transmission infrastructure, the shorter easement term introduces a timing risk that should be monitored and, if appropriate, disclosed in the Registration Statement.
Environmental Compliance Obligations. The BLM ROW grant is conditioned on ongoing compliance with environmental mitigation measures, including desert tortoise translocation and monitoring protocols, burrowing owl avoidance and mitigation measures, and noxious weed management. Failure to comply with these conditions could result in suspension or termination of the ROW grant. These environmental compliance matters are addressed in detail in the Due Diligence Memorandum — Environmental (Document 29).
Overall Assessment. No material title defects have been identified on the private parcels. The BLM ROW grant and the state trust land transmission easement are valid and enforceable instruments that provide adequate real property rights for current operations. The principal risks relate to renewal of these government-granted interests upon expiration and ongoing environmental compliance, both of which are recommended for disclosure in the Registration Statement.
D. Pronghorn Wind — Onshore Wind (510 MW), Nolan County, Texas
1. Project Overview
Pronghorn Wind is a 510 MW onshore wind energy project — the largest single project in CBR's operating portfolio by nameplate capacity — located in Nolan County, Texas, in the heart of one of the most prolific wind-energy development regions in the United States. The project is held through Pronghorn Wind LLC, a Texas limited liability company that is 100%-owned by CB Operating. The project achieved COD in the second quarter of 2021 and has been in continuous commercial operation since that date. The project is financed through the corporate credit facility with Veltrano National Bank.
2. Land Interests
Wind Lease Agreements. The Pronghorn Wind project site is assembled from multiple wind-energy lease agreements with approximately 55 private landowners covering approximately 42,000 acres of ranchland and agricultural property in Nolan County. The wind leases have an initial term of 30 years, commencing in 2020, with two successive 10-year renewal options exercisable at the lessee's discretion. Compensation to landowners is structured as a combination of royalty payments based on actual energy production and minimum annual rent payments. The lessee under all wind leases is Pronghorn Wind LLC. Memoranda of lease have been recorded in the Nolan County Clerk's office for all leased parcels.
The wind leases include standard provisions for permitted uses, concurrent agricultural use (consistent with the Red Mesa Wind leases), setback requirements, decommissioning obligations, and lender consent and collateral assignment provisions.
Access and Road Easements. Permanent easements have been obtained for turbine access roads, crane paths, the O&M facility, and the project substation site. These easements provide the access necessary for routine operations and maintenance, major component replacements (which require heavy-lift cranes), and emergency response.
Transmission Easement. A perpetual easement has been obtained for the 345-kV gen-tie line connecting the project substation to the ERCOT interconnection point. The gen-tie line extends approximately 6 miles across two privately owned parcels. Notably, this transmission easement was granted on a perpetual basis (rather than for a fixed term), which is unusual for the CBR portfolio but highly favorable, as it eliminates renewal risk for the transmission corridor.
O&M Facility Lease. A separate lease has been obtained for the O&M building and warehouse facility located on approximately 5 acres adjacent to the project substation. This lease has a 20-year initial term, which is shorter than the wind lease terms. The O&M facility lease provides for a renewal option at the lessee's discretion, and the facility could be relocated if necessary (though relocation would involve expense and logistical disruption).
3. Title Status
Title insurance policies were obtained at the project-finance closing in connection with the construction facility provided by Veltrano National Bank as part of the corporate credit facility security package. Owner's and lender's title insurance policies were issued by Dunmore Insurance.
ALTA/NSPS surveys were prepared for all turbine pad sites, the substation, the gen-tie corridor, and the O&M facility. The surveys were certified to Pronghorn Wind LLC, Dunmore Insurance, and Veltrano National Bank.
Permitted encumbrances include: (i) oil and gas mineral reservations (with surface waivers obtained, consistent with the Solaris West approach); (ii) existing pipeline easements — two pipelines cross portions of the project area, as discussed below; (iii) county road rights-of-way; and (iv) utility easements for rural electric distribution and telephone lines.
4. Encumbrances and Liens
Leasehold mortgages and deeds of trust have been granted in favor of Veltrano National Bank as part of the corporate credit facility security package. UCC financing statements have been filed perfecting security interests in the wind turbines, towers, blades, nacelles, and related personal property.
5. Key Issues and Observations
Existing Pipeline Easements. Two existing pipeline easements cross portions of the Pronghorn Wind project area. These pipelines predate the wind leases and their associated easements are senior to the wind lease interests. However, CBR's engineering team confirmed that turbine setback requirements from the pipelines have been satisfied, and the ALTA surveys depict the pipeline corridors in relation to the turbine pad locations, confirming that there is no physical conflict between the pipeline infrastructure and the wind turbine installations. The pipeline easements are disclosed as permitted encumbrances in the title policies. While the pipelines do not present a current operational conflict, their presence limits the flexibility for future re-siting of turbines in connection with any potential repowering and should be disclosed in the Registration Statement as a permitted encumbrance that may affect the project.
Most-Favored-Nation Clause. The wind lease with the largest single landowner at the Pronghorn Wind project (whose leased parcel encompasses approximately 12,000 acres) includes a most-favored-nation ("MFN") clause. This clause requires CBR to offer the MFN landowner lease terms that are no less favorable than the most favorable terms offered to any other landowner in the project, measured across key economic terms (per-turbine royalty rate, minimum annual rent per acre, and signing bonus). CBR's in-house legal team has confirmed compliance with the MFN clause through the current period. We note that MFN clauses in wind leases can create upward pressure on lease costs over time if more favorable terms are offered to other landowners in connection with lease amendments, renewals, or new leases within the project area. CBR should continue to monitor compliance with the MFN clause and consider its implications in connection with any future lease modifications.
Surface Waivers. Surface waiver agreements have been obtained from the holders of mineral interests on all project parcels, consistent with the approach employed at the Solaris West project. The analysis of mineral reservation risks set forth in Section VI.A applies equally to the Pronghorn Wind project.
Lease Renewal Options. The two 10-year renewal options extend the potential occupancy period to approximately 2070, which is more than adequate for the expected useful life of the installed wind turbines and any potential repowering.
Overall Assessment. No material title defects have been identified with respect to the Pronghorn Wind project. The existing pipeline easements and the MFN clause are noted as items for ongoing monitoring but do not constitute material impediments to current operations.
E. Brazos Storage — Battery Energy Storage (200 MW / 800 MWh), Fort Bend County, Texas
1. Project Overview
Brazos Storage is a 200 MW / 800 MWh lithium-ion battery energy storage system ("BESS") project located in Fort Bend County, Texas, in the greater Houston metropolitan area. The project is held through Brazos Energy Storage LLC, a Texas limited liability company that is 100%-owned by CB Operating. The project achieved COD in the fourth quarter of 2021 and is currently operating, providing energy arbitrage, ancillary services, and grid reliability services to the ERCOT market. The project is financed through the corporate credit facility with Veltrano National Bank.
2. Land Interests
Ground Lease. The Brazos Storage project is situated on a single ground lease with one private landowner covering approximately 25 acres. The relatively compact footprint reflects the significantly lower land requirements of BESS projects compared to utility-scale solar and wind projects. The ground lease has an initial term of 25 years, commencing in 2020, with two successive 5-year renewal options exercisable at the lessee's discretion. Annual rent payments are fixed with CPI-based escalation provisions. The lessee is Brazos Energy Storage LLC. A memorandum of lease has been recorded in the Fort Bend County Clerk's office.
The ground lease contains standard provisions for permitted uses (battery energy storage, grid interconnection, and related activities), maintenance obligations, insurance, indemnification, default and remedies, and decommissioning/site restoration. The lessee has the right to remove all improvements and equipment upon lease termination.
Transmission Easement. An easement has been obtained for the interconnection line connecting the project to the ERCOT substation. The interconnection line extends approximately 2 miles. The easement has a 25-year term with a renewal option coterminous with the ground lease.
Construction Access Easement. A temporary construction access easement was obtained for construction staging and heavy equipment delivery. This easement expired upon COD and is no longer in effect.
3. Title Status
An owner's title insurance policy was obtained in connection with the project financing closing, insuring Brazos Energy Storage LLC's leasehold interest. A lender's title insurance policy was simultaneously issued to Veltrano National Bank. The policies were issued by Chalvoro Title Insurance Company.
An ALTA/NSPS survey was prepared for the project site. The survey identified no encroachments or boundary discrepancies. The battery enclosure, inverter stations, transformer, and associated infrastructure are located within the surveyed parcel boundaries with adequate setbacks.
Permitted encumbrances include: (i) a county road right-of-way along the northern boundary of the parcel; and (ii) a drainage easement running along the western boundary of the parcel. Fort Bend County is not a significant oil and gas area for surface impact purposes, and no mineral reservations were identified in the title search that would present a risk of surface-use conflict.
4. Encumbrances and Liens
A leasehold deed of trust has been granted in favor of Veltrano National Bank under the corporate credit facility. UCC financing statements have been filed with the Texas Secretary of State and the Fort Bend County Clerk, perfecting security interests in the battery systems, inverters, transformers, and related equipment.
5. Key Issues and Observations
Single Landowner — Simplified Lease Management. The compact project site and single-landowner structure significantly simplify lease management compared to the multi-landowner wind projects in the portfolio. There is a single lease to administer, a single rent payment to process, and a single relationship to maintain.
Drainage Easement. The drainage easement running along the western boundary of the project site has been reviewed in conjunction with the ALTA survey and CBR's engineering team. The drainage easement does not affect the battery enclosure footprint or any other project infrastructure, and CBR has confirmed that the easement corridor is not required for future expansion of the battery system. Accordingly, the drainage easement does not present a material concern.
Lease Term Adequacy. The 25-year initial lease term is the shortest in the CBR portfolio (tied with the Red Mesa Wind leases). However, the two 5-year renewal options extend the potential occupancy period to 2055, which is adequate given the expected useful life of lithium-ion battery systems (typically 15–20 years with potential for augmentation or replacement). The battery equipment may require replacement or augmentation during the lease term, and the lease permits the installation of replacement equipment.
Overall Assessment. No material title or encumbrance issues have been identified with respect to the Brazos Storage project. The real property profile is clean and straightforward.
F. Mesquite Wind — Onshore Wind (420 MW), Oldham County, Texas [Under Construction]
1. Project Overview
Mesquite Wind is a 420 MW onshore wind energy project located in Oldham County, Texas, in the Texas Panhandle. The project is held through Mesquite Wind Holdings LLC, a Texas limited liability company that is 100%-owned by CB Operating. The project is currently under construction and is expected to achieve COD in the third quarter of 2022. Construction financing is provided through a construction-to-term facility with Prairie Commercial Bank, N.A. in the amount of $165 million, with a term conversion date of December 2024. As a project under construction, the Mesquite Wind real property interests are subject to heightened scrutiny given the active construction activity, the outstanding construction lender requirements, and the pending completion conditions.
2. Land Interests
Wind Lease Agreements. The Mesquite Wind project site is assembled from multiple wind-energy lease agreements with approximately 30 private landowners covering approximately 35,000 acres of ranchland in Oldham County. The wind leases have an initial term of 30 years, with commencement dates varying (the earliest leases commenced in 2020). The leases provide for two successive 10-year renewal options exercisable at the lessee's discretion. Compensation is structured as production royalties plus minimum annual rent payments. The lessee under all wind leases is Mesquite Wind Holdings LLC. Memoranda of lease have been recorded in the Oldham County Clerk's office.
Access and Construction Easements. Permanent road easements have been obtained for long-term O&M access, including turbine access roads, crane paths, and laydown areas. Temporary construction easements have been obtained for batch roads, crane staging areas, and material laydown areas required during the construction period. The temporary construction easements expire 12 months following the achievement of COD.
Transmission Easement. An easement for the gen-tie line has been obtained, extending approximately 15 miles from the project substation to the ERCOT interconnection point. This is the longest gen-tie corridor in the CBR portfolio and crosses approximately 8 additional la

MEMORANDUM

PRIVILEGED AND CONFIDENTIAL ATTORNEY-CLIENT PRIVILEGE / ATTORNEY WORK PRODUCT

MATTER NO.: 1015-00001

I. EXECUTIVE SUMMARY

II. METHODOLOGY AND SCOPE OF REVIEW

IV. PROJECT-BY-PROJECT ANALYSIS

Record

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