1015-00003 · Calloway-Briggs Renewables Inc · Transaction Documents

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After recording, return to: Calderwood & Harkness LLP 1000 Louisiana Street, Suite 5500 Houston, TX 77002

Attention: David Stanton

GROUND LEASE AGREEMENT

EXECUTION VERSION

Dated as of December 1, 2022

by and between

PERMIAN BASIN LAND HOLDINGS, LP a Texas limited partnership ("Lessor")

and

LONE STAR STORAGE I, LLC a Texas limited liability company ("Lessee")

Property: Approximately 15.0 Acres Ector County, Texas

GROUND LEASE AGREEMENT

This GROUND LEASE AGREEMENT (this "Lease" or "Ground Lease") is made and entered into as of December 1, 2022 (the "Effective Date"), by and between PERMIAN BASIN LAND HOLDINGS, LP, a Texas limited partnership ("Lessor"), and LONE STAR STORAGE I, LLC, a Texas limited liability company ("Lessee"). Lessor and Lessee are sometimes referred to herein individually as a "Party" and collectively as the "Parties."

RECITALS

A. Lessor is Permian Basin Land Holdings, LP, a Texas limited partnership, whose General Partner is Marcus W. Eskridge, with its principal office located at 1100 North Grant Avenue, Odessa, Texas 79761. Lessor is the fee simple owner of certain real property located in Ector County, Texas, more particularly described herein, comprising a portion of a larger tract of land held by Lessor in said county.

B. Lessee is Lone Star Storage I, LLC, a Texas limited liability company (EIN: 88-1623504), with its registered agent at CT Agents of Texas, LLC, 1999 Bryan Street, Suite 900, Dallas, Texas 75201, and managed by Calloway-Briggs Renewables Inc., a Texas corporation (EIN: 82-3047591), with its principal office at 2200 West Commerce Street, Suite 1400, Houston, Texas 77002. Lessee is a single-purpose project company formed for the sole purpose of holding all assets, contracts, and permits for the Lone Star Battery Storage Project (as defined below).

C. Lessee desires to lease from Lessor, and Lessor desires to lease to Lessee, an approximately 15.0-acre parcel (the "Premises") being a portion of a larger tract owned by Lessor, for the purpose of developing, constructing, owning, operating, maintaining, repairing, replacing, repowering, decommissioning, and removing a 50 MW / 200 MWh lithium iron phosphate (LFP) battery energy storage system (BESS), including all ancillary facilities, improvements, and equipment (the "Project," also referred to as the "Lone Star Battery Storage Project").

D. The Project site is located at approximately 4800 West University Boulevard, Odessa, Texas 79764 (nearest postal address), at approximate coordinates 31.85° N, 102.40° W, situated within the unincorporated area of Ector County, Texas.

E. Lessee has obtained or is in the process of obtaining all necessary permits and approvals for the Project, including Ector County Building Permit No. BP-2022-04517 (issued October 28, 2022) and Texas Commission on Environmental Quality ("TCEQ") Stormwater General Permit No. TXR150000, and intends to proceed diligently with the development, construction, and operation of the Project on the Premises.

F. Lessee's lender, Brazos River National Bank, N.A. ("Lender"), is providing a Twenty-Six Million Dollars ($26,000,000) construction-to-term loan facility to Lessee pursuant to a Credit Agreement dated as of December 1, 2022 (the "Credit Agreement"), and as a condition to such financing, Lender requires Lessor to deliver a Subordination, Non-Disturbance, and Attornment Agreement ("SNDA") and a lien waiver, each in form and substance acceptable to Lender and its counsel, as set forth herein and in Exhibit C attached hereto.

G. Lessor's counsel in connection with this Lease is Dunlap & Richter, PLLC (Howard F. Dunlap), 201 East 5th Street, Suite 800, Odessa, Texas 79761. Lessee's counsel in connection with this Lease is Calderwood & Harkness LLP (George Trujillo), 1000 Louisiana Street, Suite 5500, Houston, Texas 77002. Each Party acknowledges that it has had the opportunity to consult with its own legal counsel regarding the terms and conditions of this Lease.

NOW, THEREFORE, in consideration of the mutual covenants, agreements, representations, and warranties set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

ARTICLE 1 — DEFINITIONS

Section 1.1 Definitions. As used in this Lease, the following terms shall have the meanings set forth below. All capitalized terms used but not defined in this Section 1.1 shall have the meanings ascribed to them elsewhere in this Lease.

"Affiliate" means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common control with, such Person. For purposes of this definition, "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract, or otherwise, and "controlled" and "controlling" shall have correlative meanings. Without limiting the generality of the foregoing, Calloway-Briggs Renewables Inc. shall be deemed an Affiliate of Lessee.

"Applicable Law" means all federal, state, and local laws, statutes, regulations, rules, ordinances, codes, standards, permits, licenses, orders, judgments, decrees, directives, guidelines, and other governmental requirements, including, without limitation, those of the State of Texas, Ector County, the Public Utility Commission of Texas ("PUCT"), the Texas Commission on Environmental Quality ("TCEQ"), the Electric Reliability Council of Texas ("ERCOT"), the United States Environmental Protection Agency ("EPA"), and all other governmental authorities having jurisdiction over the Premises, the Project, or any Party.

"BESS" means the battery energy storage system to be constructed and operated on the Premises, consisting of a 50 MW / 200 MWh lithium iron phosphate (LFP) system, including all battery modules, containers, power conversion systems, battery management systems, thermal management systems, transformers, switchgear, metering equipment, control systems, and ancillary equipment and facilities.

"BMS" means the battery management system, including all hardware, software, sensors, and communications equipment used to monitor, control, and protect the BESS.

"Commencement Date" means December 1, 2022, the date on which the Term of this Lease commences.

"Commercial Operation Date" or "COD" means the date on which the Project achieves commercial operation as defined in and certified pursuant to the EPC Agreement; the expected COD is August 15, 2023; the Guaranteed COD under the EPC Agreement is September 1, 2023.

"Credit Agreement" means that certain Credit Agreement dated as of December 1, 2022, by and among Lessee, as borrower, and Brazos River National Bank, N.A., as administrative agent and lender, providing for a $26,000,000 construction-to-term loan facility, together with all amendments, modifications, supplements, restatements, refinancings, and replacements thereof.

"Development Period" means the period commencing on the Commencement Date and ending on the earlier of (i) the first anniversary of the Commencement Date, or (ii) the COD.

"Environmental Laws" means the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 ("CERCLA"), 42 U.S.C. §§ 9601 et seq.; the Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C. §§ 6901 et seq.; the Federal Water Pollution Control Act (Clean Water Act), 33 U.S.C. §§ 1251 et seq.; the Clean Air Act, 42 U.S.C. §§ 7401 et seq.; the Toxic Substances Control Act, 15 U.S.C. §§ 2601 et seq.; the Texas Solid Waste Disposal Act, TEX. HEALTH & SAFETY CODE ANN. §§ 361.001 et seq.; the Texas Water Code; all rules and regulations of TCEQ; and all other applicable federal, state, and local environmental statutes, regulations, rules, ordinances, codes, and orders, as each may be amended from time to time.

"EPC Agreement" means that certain Engineering, Procurement and Construction Agreement dated as of December 1, 2022, by and between Lessee and Meridian Power Construction, Inc., pursuant to which the EPC Contractor has agreed to design, engineer, procure, construct, test, and commission the Project for a Contract Price of $31,200,000, together with all amendments, modifications, and change orders thereto.

"EPC Contractor" means Meridian Power Construction, Inc., a Texas corporation, with its principal office at 8700 Shoal Creek Boulevard, Suite 300, Austin, Texas 78757.

"Equipment Supply Agreement" or "ESA" means that certain Equipment Supply Agreement dated as of December 1, 2022, by and between Lessee and Harmon-Dietrich Energy Solutions, LLC, pursuant to which Harmon-Dietrich Energy Solutions, LLC has agreed to supply HD-LFP-200E battery modules and related equipment for the Project, together with all amendments and modifications thereto.

"ERCOT" means the Electric Reliability Council of Texas, or any successor organization responsible for the independent operation of the electric grid in the ERCOT region of Texas.

"Event of Default" has the meaning set forth in Article 14 of this Lease.

"Force Majeure Event" has the meaning set forth in Section 16.1 of this Lease.

"Gen-Tie Line" means the approximately 1.2-mile overhead transmission line rated at 138 kV to be constructed by or on behalf of Lessee from the Project site on the Premises to the Point of Interconnection at the Western Permian 138 kV Substation, together with all poles, towers, conductors, insulators, guy wires, foundations, rights-of-way, easements, and associated facilities.

"Ground Lease" or "Lease" means this Ground Lease Agreement, including all Exhibits attached hereto, as it may be amended, modified, or supplemented from time to time in accordance with the terms hereof.

"Hazardous Materials" means any substance, material, or waste that is regulated, classified, or otherwise characterized under any Environmental Law as hazardous, toxic, radioactive, dangerous, or a pollutant or contaminant, including, without limitation, petroleum and petroleum products, asbestos-containing materials, polychlorinated biphenyls, lead-based paint, and per- and polyfluoroalkyl substances (PFAS).

"Improvements" means all structures, equipment, facilities, buildings, foundations, battery modules, containers, power conversion systems, inverters, battery management systems, thermal management (HVAC) systems, transformers (including the on-site 34.5 kV to 138 kV step-up transformer), switchgear, metering equipment, control buildings, fencing, security systems, access roads, parking areas, utility lines, drainage and stormwater management facilities, the Gen-Tie Line, and all other improvements, fixtures, and appurtenances placed on, in, over, or under the Premises by or on behalf of Lessee.

"Interconnection Agreement" means that certain Interconnection Agreement effective as of December 1, 2022, for the interconnection of the 50 MW BESS at the Western Permian 138 kV Substation, ERCOT Queue No. INR-22-03347, together with all amendments and modifications thereto.

"Lease Year" means each twelve (12)-month period commencing on the Commencement Date or on any anniversary of the Commencement Date during the Term.

"Lender" means Brazos River National Bank, N.A., a national banking association, with its principal office at 600 Main Street, Fort Worth, Texas 76102, together with its successors and assigns, and any replacement lender under the Credit Agreement or any refinancing thereof.

"Lender's Counsel" means Archibald, Fenn & Shaw LLP, 1700 Pacific Avenue, Suite 4000, Dallas, Texas 75201.

"Lessor" means Permian Basin Land Holdings, LP, a Texas limited partnership, together with its successors and permitted assigns.

"Lessee" means Lone Star Storage I, LLC, a Texas limited liability company, together with its successors and permitted assigns.

"Mineral Rights" means all oil, gas, hydrocarbons, and other minerals, whether solid, liquid, or gaseous, in, on, or under the Premises, together with all rights to explore for, develop, and produce such minerals, as reserved by Lessor under Article 5 of this Lease.

"Operating Period" means the period commencing on the day immediately following the end of the Development Period and continuing through the expiration or earlier termination of this Lease, including any Renewal Terms.

"Permitted Encumbrances" means (a) liens, easements, restrictions, and encumbrances set forth in the Title Commitment or otherwise approved by Lessee in writing; (b) the leasehold mortgage, deed of trust, and security interests granted by Lessee to Lender under the Credit Agreement; (c) real property taxes and assessments not yet due and payable; (d) zoning and land use regulations; and (e) any other encumbrances expressly approved by Lessee and Lender in writing.

"Permitted Use" has the meaning set forth in Section 4.1 of this Lease.

"Person" means any individual, corporation, limited liability company, partnership, limited partnership, joint venture, association, trust, governmental authority, or other entity.

"Point of Interconnection" or "POI" means the Western Permian 138 kV Substation located in Ector County, Texas, being the point at which the Project's Gen-Tie Line connects to the ERCOT transmission grid.

"Premises" means the approximately 15.0-acre parcel of land described in the metes and bounds legal description attached hereto as Exhibit A and depicted on the site plan attached hereto as Exhibit B, being a portion of a larger tract owned by Lessor, together with all rights, easements, privileges, and appurtenances pertaining thereto as set forth in this Lease.

"Project" means the Lone Star Battery Storage Project, a 50 MW / 200 MWh lithium iron phosphate (LFP) battery energy storage system to be developed, constructed, owned, operated, and maintained by Lessee on the Premises, including all Improvements.

"Removal Period" means the twelve (12)-month period following the expiration or earlier termination of this Lease during which Lessee shall remove the Improvements and restore the Premises in accordance with Article 20.

"Renewal Term" means each of the two (2) successive five (5)-year renewal terms described in Section 3.2 of this Lease.

"SNDA" means the Subordination, Non-Disturbance, and Attornment Agreement by and among Lessor, Lessee, and Lender, in the form attached hereto as Exhibit C.

"Substantial Completion" has the meaning ascribed to such term in the EPC Agreement.

"Survey" means the ALTA/NSPS Land Title Survey of the Premises prepared in accordance with the 2021 Minimum Standard Detail Requirements, as certified to Lessee, Lessor, Lender, and the Title Company.

"Term" means the Initial Term and any Renewal Terms, as defined in Article 3 of this Lease.

"Title Company" means Lone Star Abstract & Title Co., 312 North Texas Avenue, Odessa, Texas 79761.

"Total Project Value" means Forty Million Dollars ($40,000,000), representing the aggregate estimated cost of developing, constructing, and commissioning the Project, inclusive of all hard costs, soft costs, financing costs, and contingency reserves.

ARTICLE 2 — LEASE OF PREMISES

Section 2.1 Grant of Lease. Lessor hereby leases, demises, and lets to Lessee, and Lessee hereby leases from Lessor, the Premises, together with all rights, easements, privileges, and appurtenances thereto, for the Term and upon the terms and conditions set forth in this Lease. The Premises consist of approximately 15.0 acres of land, being a portion of Survey No. 42, Block 42, T-1-S, T&P RR Co. Survey, Ector County, Texas, as more particularly described in the metes and bounds legal description attached hereto as Exhibit A and depicted on the site plan attached hereto as Exhibit B. Lessee shall have the exclusive right to possess, use, and enjoy the Premises for the Permitted Use during the Term, subject to Lessor's reserved rights expressly set forth herein. This grant includes the right of Lessee, at its sole cost and expense, to develop, construct, install, own, operate, maintain, repair, replace, repower, decommission, and remove the Project and all Improvements on the Premises.

Section 2.2 Appurtenant Rights. In addition to the leasehold estate granted in Section 2.1, Lessor hereby grants to Lessee, for the benefit of the Premises and the Project, the following non-exclusive appurtenant rights over and across Lessor's adjacent property, which rights shall run with the Premises during the Term:

(a) Ingress and Egress. A non-exclusive easement for vehicular and pedestrian ingress and egress between the Premises and the nearest public right-of-way, over access roads to be mutually agreed upon by Lessor and Lessee and depicted on the site plan attached as Exhibit B, which easement shall be not less than thirty (30) feet in width. Lessee shall have the right, at its sole cost, to improve, grade, pave, and maintain such access roads as necessary for the construction and operation of the Project.

(b) Utility Corridors. A non-exclusive easement for the installation, construction, operation, maintenance, repair, replacement, and removal of underground and overhead utility lines, conduits, cables, pipes, and related facilities, including electrical distribution lines, water lines, fiber optic cables, and telecommunications facilities, necessary or useful for the operation of the Project.

(c) Drainage. A non-exclusive easement for stormwater drainage and the construction, operation, and maintenance of stormwater management facilities, including detention basins and drainage channels, as necessary to comply with TCEQ Stormwater General Permit No. TXR150000 and other Applicable Laws.

(d) Gen-Tie Line Easement. A non-exclusive easement for the construction, installation, operation, maintenance, repair, replacement, and removal of the Gen-Tie Line (approximately 1.2 miles of 138 kV overhead transmission line) across Lessor's property from the Premises to the Point of Interconnection at the Western Permian 138 kV Substation, which easement shall be not less than fifty (50) feet in width and shall be depicted on Exhibit B. Such easement shall include the right to install poles, towers, conductors, guy wires, foundations, and all associated facilities.

The easements granted in this Section 2.2 shall be appurtenant to and for the benefit of the Premises and shall continue for the duration of the Term, including any Renewal Terms, and for such additional time as may be reasonably necessary for Lessee to complete decommissioning and removal of the Improvements in accordance with Article 20. Lessee shall exercise such easement rights in a manner that minimizes interference with Lessor's use of its adjacent property, and Lessee shall promptly repair any damage to Lessor's adjacent property caused by Lessee's exercise of such easement rights.

Section 2.3 Quiet Enjoyment. Lessor covenants and warrants that Lessee, upon paying the rent and performing all of its obligations under this Lease, shall peacefully and quietly have, hold, and enjoy the Premises for the full Term without hindrance, molestation, or disturbance by Lessor or any Person claiming by, through, or under Lessor. Lessor shall defend Lessee's leasehold estate against all claims of any Person claiming paramount title to the Premises, and shall not take any action, or permit or suffer any action to be taken, that would interfere with Lessee's quiet enjoyment and use of the Premises for the Permitted Use.

Section 2.4 "As-Is" Condition. Lessee accepts the Premises in its present "as-is, where-is" condition, with all faults. Lessee acknowledges and agrees that it has conducted its own independent investigation and due diligence with respect to the physical, environmental, and legal condition of the Premises, including, without limitation, a Phase I Environmental Site Assessment and a Phase II Environmental Site Assessment performed by Terranova Environmental Group, Inc. (Lead Consultant: Karen V. Albrecht, 4500 Greenville Avenue, Suite 220, Dallas, Texas 75206), a geotechnical investigation, a boundary and topographic survey, and a title examination. Lessee is satisfied with the condition of the Premises and the results of its due diligence. Except as expressly set forth in this Lease, Lessor makes no representation or warranty of any kind, express or implied, with respect to the condition of the Premises, including any warranty of fitness for a particular purpose or merchantability.

ARTICLE 3 — TERM

Section 3.1 Initial Term. The initial term of this Lease (the "Initial Term") shall be twenty-five (25) years, commencing on December 1, 2022 (the "Commencement Date") and expiring at 11:59 p.m., Central Time, on December 1, 2047, unless sooner terminated or extended as provided herein. The Commencement Date shall not be subject to adjustment or deferral for any reason, including delays in the construction or commissioning of the Project.

Section 3.2 Renewal Options. Lessee shall have the option to extend the Term of this Lease for two (2) successive periods of five (5) years each (each, a "Renewal Term"), for a maximum total term of thirty-five (35) years, with the latest possible expiration date being December 1, 2057. Each Renewal Term shall automatically commence upon the expiration of the then-current Term unless Lessee fails to exercise its renewal option as provided herein. Lessee shall exercise each renewal option by delivering written notice of its election to Lessor not less than twelve (12) months prior to the expiration of the then-current Term. All terms, conditions, and provisions of this Lease shall apply during each Renewal Term with the same force and effect as during the Initial Term, except that the Base Rent during each Renewal Term shall be determined in accordance with Section 6.4. The exercise of each renewal option is expressly conditioned upon the following: (a) Lessee shall not be in default under any provision of this Lease at the time it delivers its renewal notice; and (b) Lessee shall not be in default under any provision of this Lease at the commencement of the applicable Renewal Term. If Lessee fails to timely deliver its renewal notice, or if Lessee is in default at the time of delivery or at the commencement of the Renewal Term (and such default has not been cured within any applicable cure period), the renewal option shall lapse and become null and void, and the Lease shall expire at the end of the then-current Term; provided, however, that Lender's cure rights under Article 13 shall apply.

Section 3.3 Holding Over. If Lessee remains in possession of the Premises after the expiration of the Term or any Renewal Term (including the period during which Lessee is completing decommissioning activities under Article 20), without having exercised a renewal option or otherwise extended this Lease, such holdover shall be deemed to create a month-to-month tenancy on the same terms and conditions as this Lease, except that (a) the Base Rent during any holdover period shall be one hundred fifty percent (150%) of the Base Rent in effect during the last month of the expired Term, and (b) such month-to-month tenancy may be terminated by either Party upon not less than sixty (60) days' prior written notice to the other Party. Nothing in this Section 3.3 shall be construed as Lessor's consent to any holdover by Lessee, and Lessee acknowledges that Lessor may suffer damages as a result of any holdover that are not fully compensated by the holdover rent.

ARTICLE 4 — PERMITTED USE

Section 4.1 Permitted Use. Lessee shall use and occupy the Premises solely for the purpose of developing, constructing, installing, owning, operating, maintaining, repairing, replacing, repowering, upgrading, decommissioning, and removing a battery energy storage system (BESS) facility, together with all related improvements, equipment, and facilities, including but not limited to the following (collectively, the "Permitted Use"):

(a) LFP battery modules and battery containers (including HD-LFP-200E modules supplied by Harmon-Dietrich Energy Solutions, LLC);

(b) Power conversion systems (inverters), including ten (10) 5 MW inverter units;

(d) Thermal management (HVAC) systems for battery container climate control;

(e) On-site step-up transformer (34.5 kV to 138 kV);

(f) Switchgear, protective relaying, and metering equipment;

(g) Control buildings, maintenance buildings, and operations centers;

(h) Perimeter fencing, gates, and security systems (including CCTV, access control, and fire detection and suppression systems);

(i) Access roads, parking areas, and laydown/staging areas;

(j) Stormwater management facilities, including detention basins and drainage improvements;

(k) The Gen-Tie Line (approximately 1.2 miles of 138 kV overhead transmission line from the Premises to the Point of Interconnection at the Western Permian 138 kV Substation);

(l) Underground and overhead utility lines, conduits, cables, and related infrastructure;

(m) Telecommunications equipment and SCADA (Supervisory Control and Data Acquisition) systems; and

(n) All other ancillary structures, equipment, facilities, and improvements necessary or useful for the development, construction, operation, maintenance, repair, replacement, repowering, or decommissioning of the Project.

The Permitted Use shall include, without limitation, the charging, discharging, storage, and dispatch of electrical energy; participation in ERCOT wholesale electricity markets, including energy, ancillary services, and capacity markets; the provision of grid services; and all activities necessary or incidental thereto.

Section 4.2 Compliance with Laws. Lessee shall comply with all Applicable Laws in connection with its use and occupancy of the Premises and the construction, operation, maintenance, and decommissioning of the Project, including, without limitation, all applicable ERCOT protocols, PUCT regulations, Ector County ordinances and building codes, TCEQ permits (including Stormwater General Permit No. TXR150000), zoning requirements, fire codes, the National Electrical Code, NFPA standards (including NFPA 855, Standard for the Installation of Stationary Energy Storage Systems), and all other applicable codes, standards, and regulations. Lessee shall obtain and maintain in full force and effect all permits, licenses, and approvals required by Applicable Law for the construction and operation of the Project, including Ector County Building Permit No. BP-2022-04517 (issued October 28, 2022).

Section 4.3 No Nuisance. Lessee shall not conduct or permit any activity on the Premises that constitutes a public or private nuisance or unreasonably interferes with Lessor's use and enjoyment of Lessor's adjacent properties. Lessee shall use commercially reasonable efforts to minimize noise, dust, vibration, and light pollution associated with the construction and operation of the Project, particularly during nighttime hours. Notwithstanding the foregoing, the Parties acknowledge that certain construction activities may temporarily increase noise levels and traffic in the vicinity of the Premises, and such temporary impacts during the Development Period shall not be deemed a nuisance.

ARTICLE 5 — MINERAL RIGHTS RESERVATION AND SURFACE USE

Section 5.1 Mineral Rights Reservation. Lessor hereby expressly reserves unto itself and its successors and assigns all mineral rights, including all oil, gas, hydrocarbons, and other minerals (whether solid, liquid, or gaseous), in, on, and under the Premises, together with all rights to explore for, develop, produce, and market such minerals (collectively, the "Mineral Rights"). Provided, however, that Lessor shall not, and shall not permit any third party to, conduct any surface mining operations, drilling operations, exploration activities, or any other mineral development or production operations on the surface of the Premises or within five hundred (500) feet of the boundaries of the Premises that would (a) interfere with, damage, or endanger the Improvements or any component thereof, (b) interfere with the construction, operation, or maintenance of the Project, (c) create any safety hazard for persons on the Premises, or (d) result in vibration, subsidence, or other surface disturbance on the Premises, without the prior written consent of Lessee, which consent may be withheld in Lessee's sole and absolute discretion. For the avoidance of doubt, nothing in this Section 5.1 shall restrict Lessor from exercising its Mineral Rights through directional drilling, horizontal drilling, or other subsurface access methods from locations on Lessor's property that are more than five hundred (500) feet from the boundaries of the Premises, provided that such operations do not interfere with, damage, or endanger the Improvements or the operation of the Project.

Section 5.2 Surface Use Restriction. Lessor's exercise of the reserved Mineral Rights shall at all times be subject to the following surface use restrictions, which shall be deemed a covenant running with the land for the duration of the Term:

(a) No drilling rigs, pump jacks, tank batteries, pipelines, flow lines, injection wells, disposal wells, compressor stations, or other mineral production or processing equipment or facilities shall be placed on the surface of the Premises without the prior written consent of Lessee.

(b) No roads or other access ways for mineral operations shall be constructed on the Premises without the prior written consent of Lessee.

(c) Lessor shall ensure that any mineral lessee, operator, or other third party exercising mineral rights in, on, or under the Premises is bound by the restrictions set forth in this Article 5 and acknowledges the existence of this Lease and the priority of Lessee's leasehold estate over any surface use rights associated with the Mineral Rights.

Section 5.3 Coordination. Lessor shall provide Lessee with not less than ninety (90) days' prior written notice of any proposed mineral exploration, development, or production activity on Lessor's adjacent lands within five hundred (500) feet of the boundaries of the Premises. Such notice shall include a reasonably detailed description of the proposed activity, including the location, nature, scope, expected duration, and potential impacts on the Premises and the Project. Lessee shall have the right to review and comment on such proposed activity, and the Parties shall cooperate in good faith to coordinate such activity so as to minimize interference with the Project. In the event of any conflict between Lessor's mineral operations on adjacent lands and the operation of the Project, Lessor shall use commercially reasonable efforts to modify or adjust its mineral operations so as to avoid or minimize any adverse impact on the Project.

ARTICLE 6 — RENT

Section 6.1 Lease Signing Payment. Upon execution of this Lease, Lessee shall pay to Lessor a one-time, non-refundable lease signing payment of Fifty Thousand Dollars ($50,000.00) (the "Signing Payment"). The Signing Payment represents consideration for Lessor's execution and delivery of this Lease and shall not be credited against, or applied as a prepayment of, any installment of Base Rent. The Signing Payment shall be payable by wire transfer of immediately available funds to the account designated by Lessor on or before the date of execution of this Lease.

Section 6.2 Development Period Rent. During the Development Period (Lease Year 1, commencing on the Commencement Date, December 1, 2022), Lessee shall pay to Lessor Base Rent in the amount of One Thousand Two Hundred Dollars ($1,200.00) per acre per year, calculated as follows:

$1,200.00 per acre × 15.0 acres = $18,000.00 per year

$18,000.00 ÷ 12 months = $1,500.00 per month

Development Period Base Rent shall be payable in equal monthly installments of One Thousand Five Hundred Dollars ($1,500.00) each, payable in advance on the first (1st) day of each calendar month during the Development Period. The first monthly installment of Development Period Base Rent shall be due and payable on December 1, 2022. If the Development Period commences or ends on a date other than the first or last day of a calendar month, the Base Rent for such partial month shall be prorated on a per diem basis.

Section 6.3 Operating Period Rent. During the Operating Period (commencing on the first day following the end of the Development Period and continuing through Lease Year 25, and during any Renewal Terms), Lessee shall pay to Lessor Base Rent in the amount of One Thousand Eight Hundred Dollars ($1,800.00) per acre per year for the first Lease Year of the Operating Period, calculated as follows:

$1,800.00 per acre × 15.0 acres = $27,000.00 per year

$27,000.00 ÷ 12 months = $2,250.00 per month

Operating Period Base Rent shall be payable in equal monthly installments of Two Thousand Two Hundred Fifty Dollars ($2,250.00) each, payable in advance on the first (1st) day of each calendar month during the first Lease Year of the Operating Period. The Base Rent for subsequent Lease Years during the Operating Period shall be as adjusted pursuant to Section 6.4. If the Operating Period commences or ends on a date other than the first or last day of a calendar month, the Base Rent for such partial month shall be prorated on a per diem basis.

Section 6.4 Annual Rent Escalation. Commencing on the second (2nd) anniversary of the start of the Operating Period and on each anniversary thereof throughout the remainder of the Term (including any Renewal Terms), the Base Rent shall increase by two percent (2.0%) over the Base Rent payable during the immediately preceding Lease Year, compounding annually. By way of illustration, if the first Lease Year of the Operating Period commences on December 1, 2023 with a Base Rent of $27,000.00 per year, the Base Rent for the Lease Year commencing December 1, 2024 shall be $27,000.00 × 1.02 = $27,540.00 per year, and the Base Rent for the Lease Year commencing December 1, 2025 shall be $27,540.00 × 1.02 = $28,090.80 per year, and so on for each subsequent Lease Year. Lessor shall provide Lessee with a written schedule of the adjusted Base Rent at least thirty (30) days prior to each anniversary, but the failure to provide such schedule shall not affect the obligation of Lessee to pay the escalated Base Rent.

Section 6.5 Late Payment. If any installment of Base Rent or any other amount due under this Lease is not received by Lessor within ten (10) days after the due date therefor, Lessee shall pay to Lessor a late charge of five percent (5%) of the overdue amount as liquidated damages for the administrative costs of processing and pursuing such late payment, and not as a penalty. In addition, all overdue amounts shall bear interest from the due date until paid at the lesser of (a) twelve percent (12%) per annum, or (b) the maximum rate of interest permitted by applicable Texas law. The acceptance of any late charge or interest by Lessor shall not constitute a waiver of any default or any right of Lessor hereunder.

Section 6.6 Payment Method. All payments of Base Rent and other amounts due under this Lease shall be made by wire transfer of immediately available funds or by automated clearing house (ACH) transfer to a bank account designated by Lessor in writing from time to time. Lessor shall provide Lessee with wire transfer instructions at least ten (10) days prior to the Commencement Date, and Lessor may change such instructions upon not less than thirty (30) days' prior written notice to Lessee. All payments shall be made in United States Dollars. No payment shall be deemed made until received in immediately available funds in the designated account.

Section 6.7 Net Lease. This Lease is intended to be, and shall be construed as, an absolute net lease. Except as expressly provided otherwise herein, Lessee shall be solely responsible for, and shall pay when due, all costs, expenses, taxes, assessments, insurance premiums, utility charges, maintenance costs, repair costs, and charges of every kind and nature whatsoever, whether foreseen or unforeseen, ordinary or extraordinary, that arise from or relate to the Premises, the Improvements, or the Project during the Term. It is the intent of the Parties that the Base Rent payable hereunder shall be absolutely net to Lessor, free of any offset, deduction, or charge of any kind, and that Lessor shall not be required to provide any services, perform any maintenance, make any repairs, or bear any costs or expenses of any kind with respect to the Premises, the Improvements, or the Project during the Term.

ARTICLE 7 — TAXES AND ASSESSMENTS

Section 7.1 Real Property Taxes. Lessee shall pay, before delinquency, all real property taxes, general and special assessments, levies, fees, and governmental charges of every kind and nature levied, assessed, or imposed against the Premises and the Improvements during the Term, whether assessed against Lessor or Lessee. Lessee shall furnish to Lessor, upon Lessor's reasonable request, evidence of the timely payment of all such taxes and assessments. If any tax or assessment is payable in installments, Lessee may pay such tax or assessment in installments as they become due; provided, however, that Lessee shall pay all installments that become due during the Term before delinquency. To the extent any real property tax or assessment relates to a tax year that includes a period before the Commencement Date or after the expiration or termination of this Lease, Lessee's obligation shall be prorated on a per diem basis. Lessor shall cooperate with Lessee in any efforts to obtain separate tax assessments for the Premises and the Improvements.

Section 7.2 Personal Property Taxes. Lessee shall be solely responsible for the payment of all taxes, assessments, and governmental charges levied or assessed against Lessee's personal property, equipment, trade fixtures, inventory, and other tangible and intangible personal property located on the Premises. Lessee shall file all required personal property tax returns and renditions in a timely manner.

Section 7.3 Tax Contest. Lessee shall have the right, at its sole cost and expense, to contest the validity or amount of any real or personal property tax or assessment levied or assessed against the Premises, the Improvements, or Lessee's personal property, in good faith by appropriate legal proceedings. During the pendency of any such contest, payment of the contested tax or assessment may be deferred or withheld by Lessee; provided, however, that (a) Lessee shall post any bond, escrow deposit, or other security required by Applicable Law or the taxing authority; (b) Lessee shall prosecute such contest diligently and in good faith; (c) Lessee shall pay, and indemnify and hold Lessor harmless from and against, all penalties, interest, costs, and expenses incurred by Lessor as a result of such contest; and (d) Lessee shall promptly pay the tax or assessment, together with all penalties and interest, if the contest is unsuccessful.

Section 7.4 Lessor's Taxes. Lessor shall be solely responsible for the payment of all income, franchise, or other taxes payable by Lessor with respect to rent or other amounts received by Lessor under this Lease. Lessee shall have no responsibility for any such taxes.

ARTICLE 8 — IMPROVEMENTS, ALTERATIONS, AND OWNERSHIP

Section 8.1 Right to Construct. Lessee shall have the right, at its sole cost and expense, to construct, install, erect, place, and maintain on the Premises all Improvements necessary or desirable for the Permitted Use, without the prior consent of Lessor. Such Improvements shall include, without limitation:

(a) The BESS, consisting of a 50 MW / 200 MWh lithium iron phosphate battery energy storage system utilizing HD-LFP-200E battery modules supplied by Harmon-Dietrich Energy Solutions, LLC pursuant to the Equipment Supply Agreement;

(b) Ten (10) 5 MW power conversion system (PCS) inverters;

(d) Thermal management (HVAC) systems for battery container climate control;

(e) Battery container enclosures and related structural systems;

(f) On-site step-up transformer (34.5 kV to 138 kV) and associated transformer pad;

(g) Medium- and high-voltage switchgear, protective relaying, and metering equipment;

(h) The Gen-Tie Line (approximately 1.2 miles of 138 kV overhead transmission line from the Premises to the Point of Interconnection at the Western Permian 138 kV Substation);

(i) Control buildings, maintenance buildings, and operations centers;

(j) Access roads, parking areas, and laydown/staging areas;

(k) Perimeter fencing (minimum six (6) feet in height with barbed wire top), gates, and security systems;

(l) Stormwater management facilities, including detention basins and drainage improvements;

(m) Underground and overhead utility lines, conduits, cables, and related infrastructure;

(n) Telecommunications equipment, SCADA systems, and fiber optic communications; and

(o) All other structures, equipment, facilities, and improvements necessary or useful for the development, construction, operation, maintenance, repair, replacement, repowering, or decommissioning of the Project.

Section 8.2 Construction Standards. All construction of Improvements on the Premises shall be performed in a good and workmanlike manner, using materials of good quality, in compliance with all Applicable Laws (including all building codes, zoning requirements, and environmental regulations), and in accordance with the plans and specifications set forth in the EPC Agreement between Lessee and Meridian Power Construction, Inc. (Contract Price: $31,200,000). Lessee shall obtain all required permits and approvals prior to commencing construction, including Ector County Building Permit No. BP-2022-04517 (issued October 28, 2022). Lessee shall provide Lessor with copies of all material permits and approvals upon request. Lessee shall ensure that the EPC Contractor and all subcontractors maintain all insurance coverages required by Applicable Law and by the EPC Agreement, including workers' compensation and commercial general liability insurance.

Section 8.3 Ownership of Improvements During Term. All Improvements placed on the Premises by or on behalf of Lessee shall remain the personal property of Lessee during the Term and shall not become fixtures or part of the realty, regardless of the manner in which such Improvements are attached to or incorporated into the Premises. The Parties intend that all Improvements shall be and remain severable from the Premises and shall not be deemed to merge with or become part of Lessor's fee estate. Lessor hereby waives any and all landlord's liens, statutory or otherwise, on the Improvements and on all equipment, personal property, and other assets of Lessee located on the Premises. Lessor further agrees to execute and deliver, promptly upon request by Lessee or Lender, any instruments, documents, or UCC financing statement amendments reasonably necessary to evidence or confirm Lessee's ownership of the Improvements and Lender's first-priority security interest therein.

Section 8.4 Removal of Improvements. Upon the expiration or earlier termination of this Lease, Lessee shall have the right and obligation, subject to Section 8.5, to remove all Improvements from the Premises within twelve (12) months following the end of the Term (the "Removal Period") and to restore the Premises to a condition reasonably similar to its condition as of the Commencement Date, ordinary wear and tear excepted, in accordance with Article 20. Lessee's obligation to remove the Improvements and restore the Premises shall survive the expiration or termination of this Lease. During the Removal Period, Lessee shall continue to have access to the Premises and the benefit of the easements granted in Section 2.2 for the purpose of completing such removal and restoration activities, and Lessee shall pay holdover rent in accordance with Section 3.3 for any month in which Lessee remains in possession of the Premises during the Removal Period.

Section 8.5 Lessor's Option to Retain Improvements. Notwithstanding Section 8.4, Lessor may elect, by delivering written notice to Lessee not less than ninety (90) days before the scheduled expiration of the Term (or promptly following any early termination), to retain some or all of the Improvements on the Premises. If Lessor elects to retain any Improvements, Lessee shall have no obligation to remove such retained Improvements, and title to such Improvements shall transfer to Lessor upon the expiration or termination of this Lease. Lessor shall accept such retained Improvements in their then-current "as-is, where-is" condition, with all faults, and Lessor shall release Lessee from all further liability with respect to the condition of such Improvements. Lessee shall execute and deliver such bills of sale, assignments, or other instruments as Lessor may reasonably request to evidence the transfer of title to the retained Improvements. If Lessor elects to retain only some of the Improvements, Lessee shall remove all Improvements not retained by Lessor in accordance with Section 8.4 and Article 20.

Section 8.6 Liens. Lessee shall keep the Premises free and clear of all liens, encumbrances, charges, and claims arising out of or in connection with work performed, services provided, or materials furnished to or for the Premises or the Project, other than Permitted Encumbrances (including the leasehold mortgage in favor of Lender under the Credit Agreement). If any mechanic's lien, materialmen's lien, or similar statutory lien is filed against the Premises, the Improvements, or the leasehold estate of Lessee, Lessee shall, within thirty (30) days after receiving notice of the filing of such lien, either (a) cause such lien to be released and discharged of record, or (b) post a bond or other security sufficient to cause such lien to be released or to fully protect Lessor's interest in the Premises, in either case in accordance with Applicable Law. If Lessee fails to release, discharge, or bond over such lien within said thirty (30)-day period, Lessor may, after giving Lessee ten (10) days' additional written notice, take such action as Lessor deems necessary to release or discharge such lien, and Lessee shall reimburse Lessor for all costs and expenses (including reasonable attorneys' fees) incurred by Lessor in connection therewith within thirty (30) days following demand.

ARTICLE 9 — INSURANCE

Section 9.1 Lessee's Insurance Obligations. Lessee shall maintain, or cause to be maintained, at its sole cost and expense, the following minimum insurance coverages throughout the Term:

(a) Builder's Risk Insurance. During the period of construction of the Project, a builder's risk insurance policy in an amount not less than the full replacement cost of the Improvements under construction, with a current policy limit of not less than Forty-Two Million Dollars ($42,000,000). The current builder's risk policy is placed with Commonwealth Specialty Insurance Company (policy limit: $42,000,000), through Kensington Risk Advisors, LLC (Lead Broker: Dana J. Carwell). Such policy shall cover all risks of physical loss or damage to the Improvements during construction, including fire, windstorm, flood (if applicable), theft, vandalism, earthquake, and transit perils. Upon achievement of COD, the builder's risk policy shall be replaced by the property insurance required under clause (c) below.

(b) Commercial General Liability Insurance. Commercial general liability (CGL) insurance, including premises and operations, products and completed operations, contractual liability, broad form property damage, and personal and advertising injury liability, with combined single limits of not less than Five Million Dollars ($5,000,000) per occurrence and Ten Million Dollars ($10,000,000) in the annual aggregate. The current CGL policy is placed with Pinnacle Mutual Assurance Corp. Such policy shall include coverage for explosion, collapse, and underground hazards (XCU) and pollution liability arising from sudden and accidental events.

(c) Property Insurance (Post-Construction). Upon achievement of COD and continuing throughout the Operating Period, all-risk property insurance covering the Improvements and all equipment and personal property of Lessee located on the Premises at full replacement cost value, including coverage for fire, windstorm, flood (if required by Lender or if the Premises are located in a Special Flood Hazard Area), earthquake, machinery breakdown, and electrical breakdown. Such policy shall include business interruption or loss of revenue coverage in an amount and for a waiting period acceptable to Lender.

(d) Environmental Liability Insurance. Pollution legal liability insurance providing coverage for third-party bodily injury and property damage, cleanup costs, and defense expenses arising from pollution conditions on, at, under, or migrating from the Premises, with limits of liability reasonably acceptable to Lessor and Lender. Such policy shall include coverage for both sudden and accidental releases and gradual pollution conditions.

(e) Workers' Compensation Insurance. Workers' compensation insurance as required by the laws of the State of Texas, including employer's liability insurance with limits of not less than One Million Dollars ($1,000,000) per accident, One Million Dollars ($1,000,000) per employee for disease, and One Million Dollars ($1,000,000) policy limit for disease.

(f) Automobile Liability Insurance. Commercial automobile liability insurance covering all owned, hired, and non-owned vehicles used in connection with the Project, with combined single limits of not less than One Million Dollars ($1,000,000) per accident for bodily injury and property damage.

All insurance policies required under this Section 9.1 shall be issued by insurance companies having an A.M. Best rating of not less than A- VII (or equivalent rating from Standard & Poor's or Moody's) and authorized to do business in the State of Texas. All policies shall be primary and non-contributing with respect to any insurance carried by Lessor. All policies shall provide that they may not be canceled or materially modified without at least thirty (30) days' prior written notice to Lessor and Lender (ten (10) days for non-payment of premium).

Section 9.2 Additional Insureds. Lessor (Permian Basin Land Holdings, LP) and Lender (Brazos River National Bank, N.A.) shall be named as additional insureds on all liability insurance policies maintained by Lessee under this Lease, including the CGL policy. Lessor and Lender shall be named as loss payees (or mortgagee loss payees, as applicable) on all property insurance and builder's risk insurance policies, as their interests may appear. All loss payee endorsements shall be in the standard mortgage clause form acceptable to Lender.

Section 9.3 Evidence of Insurance. Lessee shall deliver to Lessor and Lender certificates of insurance (on Acord 25 or Acord 28 forms, as applicable), together with copies of all endorsements naming Lessor and Lender as additional insureds and loss payees, evidencing the insurance coverages required under this Article 9. Such certificates and endorsements shall be delivered (a) prior to the Commencement Date, (b) annually thereafter on or before each policy renewal date, (c) promptly following any material change in coverage, and (d) upon the reasonable request of Lessor or Lender at any time. If Lessee fails to maintain the required insurance, Lessor may (but shall not be obligated to) obtain such insurance at Lessee's cost and expense, and Lessee shall reimburse Lessor for all premiums and costs within thirty (30) days following demand.

Section 9.4 Waiver of Subrogation. Lessor and Lessee each hereby waive all rights of recovery, claim, action, or cause of action against the other and the other's partners, members, officers, directors, agents, and employees for any loss or damage covered (or required to be covered) by any insurance policy maintained or required to be maintained by the waiving party under this Lease, to the extent of the proceeds received (or that would have been received had the required insurance been maintained) under such policy. Each Party shall cause each of its insurance policies to include a waiver of subrogation endorsement or clause by which the insurer waives all rights of subrogation against the other Party and its partners, members, officers, directors, agents, and employees.

Section 9.5 Lessor's Insurance. Lessor shall maintain property insurance on Lessor's adjacent property as Lessor deems appropriate in Lessor's sole discretion. Lessee shall have no responsibility for the cost or maintenance of any insurance coverage maintained by Lessor on property other than the Premises.

ARTICLE 10 — ENVIRONMENTAL MATTERS

Section 10.1 Lessor's Environmental Representations. Lessor represents and warrants to Lessee that, to the best of Lessor's actual knowledge after reasonable inquiry:

(a) No Hazardous Materials have been released, stored, generated, treated, or disposed of on, in, under, or about the Premises in violation of Environmental Laws, except as may have been disclosed in the Phase I and Phase II Environmental Site Assessments described in Section 10.3;

(b) No underground storage tanks, above-ground storage tanks, septic systems, or sumps are currently located on the Premises;

(c) There are no pending or, to Lessor's actual knowledge, threatened environmental claims, actions, suits, proceedings, or investigations by any governmental authority or third party relating to the Premises;

(d) Lessor has not received any notice of violation, order, directive, or request for information from any governmental authority with respect to any Environmental Law relating to the Premises; and

(e) The Premises are not listed on the National Priorities List (CERCLIS), the Texas Superfund Registry, or any other federal, state, or local list of contaminated or potentially contaminated sites.

The representations and warranties set forth in this Section 10.1 shall survive the execution and delivery of this Lease and shall be deemed restated as of the Commencement Date.

Section 10.2 Lessee's Environmental Obligations. Lessee shall comply with all Environmental Laws in connection with its use, occupancy, and operation of the Premises and the Project during the Term. Without limiting the generality of the foregoing:

(a) Lessee shall not release, discharge, store, generate, treat, transport, or dispose of any Hazardous Materials on, in, under, or about the Premises, except in compliance with all Environmental Laws and as customary and necessary for BESS operations, including, without limitation, battery electrolyte, coolants, thermal management fluids, lubricants, small quantities of cleaning solvents, and other materials used in the ordinary course of operation and maintenance of the Project;

(b) Lessee shall obtain and maintain all environmental permits required for the Project, including TCEQ Stormwater General Permit No. TXR150000, and shall comply with all terms and conditions thereof;

(c) Lessee shall implement and maintain a Stormwater Pollution Prevention Plan (SWPPP) and a Spill Prevention, Control, and Countermeasure (SPCC) plan, as required by Applicable Law;

(d) Lessee shall promptly notify Lessor and all appropriate governmental authorities of any release, spill, or discharge of Hazardous Materials on the Premises, and shall take all necessary remedial actions in compliance with Environmental Laws; and

(e) Upon the expiration or termination of this Lease, Lessee shall remove all Hazardous Materials brought onto the Premises by Lessee or its agents, contractors, or invitees, and shall remediate any contamination resulting from Lessee's activities on the Premises, in each case in accordance with Environmental Laws.

Section 10.3 Environmental Due Diligence. Lessee has caused a Phase I Environmental Site Assessment (conforming to ASTM E1527-21) and a Phase II Environmental Site Assessment of the Premises to be performed by Terranova Environmental Group, Inc. (Lead Consultant: Karen V. Albrecht), with offices at 4500 Greenville Avenue, Suite 220, Dallas, Texas 75206 (collectively, the "Environmental Reports"). The Phase I ESA identified no recognized environmental conditions (RECs), controlled recognized environmental conditions (CRECs), or historical recognized environmental conditions (HRECs) on the Premises. The Phase II ESA confirmed that no contamination above applicable screening levels is present on the Premises. Lessee has relied on such Environmental Reports in entering into this Lease, and Lessor has been provided copies of such Environmental Reports.

Section 10.4 Indemnification. Lessee shall indemnify, defend (with counsel reasonably acceptable to Lessor), and hold Lessor harmless from and against any and all claims, demands, actions, suits, proceedings, losses, damages, liabilities, penalties, fines, costs, and expenses (including reasonable attorneys' fees and consultant fees) arising from or in connection with (a) any Hazardous Materials introduced to, released on, or migrating from the Premises by Lessee or its agents, employees, contractors, subcontractors, or invitees during the Term, or (b) any breach of Lessee's obligations under this Article 10. Lessor shall indemnify, defend (with counsel reasonably acceptable to Lessee), and hold Lessee harmless from and against any and all claims, demands, actions, suits, proceedings, losses, damages, liabilities, penalties, fines, costs, and expenses (including reasonable attorneys' fees and consultant fees) arising from or in connection with any pre-existing environmental contamination on, in, or under the Premises that was present prior to the Commencement Date, to the extent such contamination was not caused by Lessee or its agents. The indemnification obligations of this Section 10.4 shall survive the expiration or termination of this Lease.

ARTICLE 11 — UTILITIES AND ACCESS

Section 11.1 Utilities. Lessee shall be solely responsible for obtaining, connecting, and paying for all utilities required for the construction and operation of the Project, including, without limitation, electricity, water, wastewater, natural gas (if applicable), and telecommunications. Lessee shall have the right, at its sole cost and expense, to install, construct, operate, maintain, repair, replace, and remove utility lines, conduits, cables, pipes, and related facilities on, over, and under the Premises and across Lessor's adjacent property pursuant to the easements granted in Section 2.2. All utility installations shall be performed in compliance with Applicable Laws and in a manner that minimizes disturbance to Lessor's adjacent property. Upon completion of any utility installation, Lessee shall restore Lessor's adjacent property to its pre-construction condition, to the extent reasonably practicable. Lessor shall have no obligation to provide or arrange for any utilities to the Premises.

Section 11.2 Access. Lessee and its authorized representatives, including, without limitation, its agents, employees, contractors (including the EPC Contractor, Meridian Power Construction, Inc., and the equipment supplier, Harmon-Dietrich Energy Solutions, LLC), subcontractors, invitees, consultants, and Lender's representatives (including Norgate Technical Advisors, Inc., as Independent Engineer, and Dr. Phillip S. Reardon, P.E., Lead Engineer) shall have the right of access to the Premises at all times, twenty-four (24) hours per day, seven (7) days per week, three hundred sixty-five (365) days per year, over and across Lessor's property via th

After recording, return to: Calderwood & Harkness LLP 1000 Louisiana Street, Suite 5500 Houston, TX 77002
Attention: David Stanton
GROUND LEASE AGREEMENT
EXECUTION VERSION
Dated as of December 1, 2022
by and between
PERMIAN BASIN LAND HOLDINGS, LP a Texas limited partnership ("Lessor")
and
LONE STAR STORAGE I, LLC a Texas limited liability company ("Lessee")
Property: Approximately 15.0 Acres Ector County, Texas
GROUND LEASE AGREEMENT
This GROUND LEASE AGREEMENT (this "Lease" or "Ground Lease") is made and entered into as of December 1, 2022 (the "Effective Date"), by and between PERMIAN BASIN LAND HOLDINGS, LP, a Texas limited partnership ("Lessor"), and LONE STAR STORAGE I, LLC, a Texas limited liability company ("Lessee"). Lessor and Lessee are sometimes referred to herein individually as a "Party" and collectively as the "Parties."
RECITALS
A. Lessor is Permian Basin Land Holdings, LP, a Texas limited partnership, whose General Partner is Marcus W. Eskridge, with its principal office located at 1100 North Grant Avenue, Odessa, Texas 79761. Lessor is the fee simple owner of certain real property located in Ector County, Texas, more particularly described herein, comprising a portion of a larger tract of land held by Lessor in said county.
B. Lessee is Lone Star Storage I, LLC, a Texas limited liability company (EIN: 88-1623504), with its registered agent at CT Agents of Texas, LLC, 1999 Bryan Street, Suite 900, Dallas, Texas 75201, and managed by Calloway-Briggs Renewables Inc., a Texas corporation (EIN: 82-3047591), with its principal office at 2200 West Commerce Street, Suite 1400, Houston, Texas 77002. Lessee is a single-purpose project company formed for the sole purpose of holding all assets, contracts, and permits for the Lone Star Battery Storage Project (as defined below).
C. Lessee desires to lease from Lessor, and Lessor desires to lease to Lessee, an approximately 15.0-acre parcel (the "Premises") being a portion of a larger tract owned by Lessor, for the purpose of developing, constructing, owning, operating, maintaining, repairing, replacing, repowering, decommissioning, and removing a 50 MW / 200 MWh lithium iron phosphate (LFP) battery energy storage system (BESS), including all ancillary facilities, improvements, and equipment (the "Project," also referred to as the "Lone Star Battery Storage Project").
D. The Project site is located at approximately 4800 West University Boulevard, Odessa, Texas 79764 (nearest postal address), at approximate coordinates 31.85° N, 102.40° W, situated within the unincorporated area of Ector County, Texas.
E. Lessee has obtained or is in the process of obtaining all necessary permits and approvals for the Project, including Ector County Building Permit No. BP-2022-04517 (issued October 28, 2022) and Texas Commission on Environmental Quality ("TCEQ") Stormwater General Permit No. TXR150000, and intends to proceed diligently with the development, construction, and operation of the Project on the Premises.
F. Lessee's lender, Brazos River National Bank, N.A. ("Lender"), is providing a Twenty-Six Million Dollars ($26,000,000) construction-to-term loan facility to Lessee pursuant to a Credit Agreement dated as of December 1, 2022 (the "Credit Agreement"), and as a condition to such financing, Lender requires Lessor to deliver a Subordination, Non-Disturbance, and Attornment Agreement ("SNDA") and a lien waiver, each in form and substance acceptable to Lender and its counsel, as set forth herein and in Exhibit C attached hereto.
G. Lessor's counsel in connection with this Lease is Dunlap & Richter, PLLC (Howard F. Dunlap), 201 East 5th Street, Suite 800, Odessa, Texas 79761. Lessee's counsel in connection with this Lease is Calderwood & Harkness LLP (George Trujillo), 1000 Louisiana Street, Suite 5500, Houston, Texas 77002. Each Party acknowledges that it has had the opportunity to consult with its own legal counsel regarding the terms and conditions of this Lease.
NOW, THEREFORE, in consideration of the mutual covenants, agreements, representations, and warranties set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
ARTICLE 1 — DEFINITIONS
Section 1.1 Definitions. As used in this Lease, the following terms shall have the meanings set forth below. All capitalized terms used but not defined in this Section 1.1 shall have the meanings ascribed to them elsewhere in this Lease.
"Affiliate" means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common control with, such Person. For purposes of this definition, "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract, or otherwise, and "controlled" and "controlling" shall have correlative meanings. Without limiting the generality of the foregoing, Calloway-Briggs Renewables Inc. shall be deemed an Affiliate of Lessee.
"Applicable Law" means all federal, state, and local laws, statutes, regulations, rules, ordinances, codes, standards, permits, licenses, orders, judgments, decrees, directives, guidelines, and other governmental requirements, including, without limitation, those of the State of Texas, Ector County, the Public Utility Commission of Texas ("PUCT"), the Texas Commission on Environmental Quality ("TCEQ"), the Electric Reliability Council of Texas ("ERCOT"), the United States Environmental Protection Agency ("EPA"), and all other governmental authorities having jurisdiction over the Premises, the Project, or any Party.
"BESS" means the battery energy storage system to be constructed and operated on the Premises, consisting of a 50 MW / 200 MWh lithium iron phosphate (LFP) system, including all battery modules, containers, power conversion systems, battery management systems, thermal management systems, transformers, switchgear, metering equipment, control systems, and ancillary equipment and facilities.
"BMS" means the battery management system, including all hardware, software, sensors, and communications equipment used to monitor, control, and protect the BESS.
"Commencement Date" means December 1, 2022, the date on which the Term of this Lease commences.
"Commercial Operation Date" or "COD" means the date on which the Project achieves commercial operation as defined in and certified pursuant to the EPC Agreement; the expected COD is August 15, 2023; the Guaranteed COD under the EPC Agreement is September 1, 2023.
"Credit Agreement" means that certain Credit Agreement dated as of December 1, 2022, by and among Lessee, as borrower, and Brazos River National Bank, N.A., as administrative agent and lender, providing for a $26,000,000 construction-to-term loan facility, together with all amendments, modifications, supplements, restatements, refinancings, and replacements thereof.
"Development Period" means the period commencing on the Commencement Date and ending on the earlier of (i) the first anniversary of the Commencement Date, or (ii) the COD.
"Environmental Laws" means the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 ("CERCLA"), 42 U.S.C. §§ 9601 et seq.; the Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C. §§ 6901 et seq.; the Federal Water Pollution Control Act (Clean Water Act), 33 U.S.C. §§ 1251 et seq.; the Clean Air Act, 42 U.S.C. §§ 7401 et seq.; the Toxic Substances Control Act, 15 U.S.C. §§ 2601 et seq.; the Texas Solid Waste Disposal Act, TEX. HEALTH & SAFETY CODE ANN. §§ 361.001 et seq.; the Texas Water Code; all rules and regulations of TCEQ; and all other applicable federal, state, and local environmental statutes, regulations, rules, ordinances, codes, and orders, as each may be amended from time to time.
"EPC Agreement" means that certain Engineering, Procurement and Construction Agreement dated as of December 1, 2022, by and between Lessee and Meridian Power Construction, Inc., pursuant to which the EPC Contractor has agreed to design, engineer, procure, construct, test, and commission the Project for a Contract Price of $31,200,000, together with all amendments, modifications, and change orders thereto.
"EPC Contractor" means Meridian Power Construction, Inc., a Texas corporation, with its principal office at 8700 Shoal Creek Boulevard, Suite 300, Austin, Texas 78757.
"Equipment Supply Agreement" or "ESA" means that certain Equipment Supply Agreement dated as of December 1, 2022, by and between Lessee and Harmon-Dietrich Energy Solutions, LLC, pursuant to which Harmon-Dietrich Energy Solutions, LLC has agreed to supply HD-LFP-200E battery modules and related equipment for the Project, together with all amendments and modifications thereto.
"ERCOT" means the Electric Reliability Council of Texas, or any successor organization responsible for the independent operation of the electric grid in the ERCOT region of Texas.
"Event of Default" has the meaning set forth in Article 14 of this Lease.
"Force Majeure Event" has the meaning set forth in Section 16.1 of this Lease.
"Gen-Tie Line" means the approximately 1.2-mile overhead transmission line rated at 138 kV to be constructed by or on behalf of Lessee from the Project site on the Premises to the Point of Interconnection at the Western Permian 138 kV Substation, together with all poles, towers, conductors, insulators, guy wires, foundations, rights-of-way, easements, and associated facilities.
"Ground Lease" or "Lease" means this Ground Lease Agreement, including all Exhibits attached hereto, as it may be amended, modified, or supplemented from time to time in accordance with the terms hereof.
"Hazardous Materials" means any substance, material, or waste that is regulated, classified, or otherwise characterized under any Environmental Law as hazardous, toxic, radioactive, dangerous, or a pollutant or contaminant, including, without limitation, petroleum and petroleum products, asbestos-containing materials, polychlorinated biphenyls, lead-based paint, and per- and polyfluoroalkyl substances (PFAS).
"Improvements" means all structures, equipment, facilities, buildings, foundations, battery modules, containers, power conversion systems, inverters, battery management systems, thermal management (HVAC) systems, transformers (including the on-site 34.5 kV to 138 kV step-up transformer), switchgear, metering equipment, control buildings, fencing, security systems, access roads, parking areas, utility lines, drainage and stormwater management facilities, the Gen-Tie Line, and all other improvements, fixtures, and appurtenances placed on, in, over, or under the Premises by or on behalf of Lessee.
"Interconnection Agreement" means that certain Interconnection Agreement effective as of December 1, 2022, for the interconnection of the 50 MW BESS at the Western Permian 138 kV Substation, ERCOT Queue No. INR-22-03347, together with all amendments and modifications thereto.
"Lease Year" means each twelve (12)-month period commencing on the Commencement Date or on any anniversary of the Commencement Date during the Term.
"Lender" means Brazos River National Bank, N.A., a national banking association, with its principal office at 600 Main Street, Fort Worth, Texas 76102, together with its successors and assigns, and any replacement lender under the Credit Agreement or any refinancing thereof.
"Lender's Counsel" means Archibald, Fenn & Shaw LLP, 1700 Pacific Avenue, Suite 4000, Dallas, Texas 75201.
"Lessor" means Permian Basin Land Holdings, LP, a Texas limited partnership, together with its successors and permitted assigns.
"Lessee" means Lone Star Storage I, LLC, a Texas limited liability company, together with its successors and permitted assigns.
"Mineral Rights" means all oil, gas, hydrocarbons, and other minerals, whether solid, liquid, or gaseous, in, on, or under the Premises, together with all rights to explore for, develop, and produce such minerals, as reserved by Lessor under Article 5 of this Lease.
"Operating Period" means the period commencing on the day immediately following the end of the Development Period and continuing through the expiration or earlier termination of this Lease, including any Renewal Terms.
"Permitted Encumbrances" means (a) liens, easements, restrictions, and encumbrances set forth in the Title Commitment or otherwise approved by Lessee in writing; (b) the leasehold mortgage, deed of trust, and security interests granted by Lessee to Lender under the Credit Agreement; (c) real property taxes and assessments not yet due and payable; (d) zoning and land use regulations; and (e) any other encumbrances expressly approved by Lessee and Lender in writing.
"Permitted Use" has the meaning set forth in Section 4.1 of this Lease.
"Person" means any individual, corporation, limited liability company, partnership, limited partnership, joint venture, association, trust, governmental authority, or other entity.
"Point of Interconnection" or "POI" means the Western Permian 138 kV Substation located in Ector County, Texas, being the point at which the Project's Gen-Tie Line connects to the ERCOT transmission grid.
"Premises" means the approximately 15.0-acre parcel of land described in the metes and bounds legal description attached hereto as Exhibit A and depicted on the site plan attached hereto as Exhibit B, being a portion of a larger tract owned by Lessor, together with all rights, easements, privileges, and appurtenances pertaining thereto as set forth in this Lease.
"Project" means the Lone Star Battery Storage Project, a 50 MW / 200 MWh lithium iron phosphate (LFP) battery energy storage system to be developed, constructed, owned, operated, and maintained by Lessee on the Premises, including all Improvements.
"Removal Period" means the twelve (12)-month period following the expiration or earlier termination of this Lease during which Lessee shall remove the Improvements and restore the Premises in accordance with Article 20.
"Renewal Term" means each of the two (2) successive five (5)-year renewal terms described in Section 3.2 of this Lease.
"SNDA" means the Subordination, Non-Disturbance, and Attornment Agreement by and among Lessor, Lessee, and Lender, in the form attached hereto as Exhibit C.
"Substantial Completion" has the meaning ascribed to such term in the EPC Agreement.
"Survey" means the ALTA/NSPS Land Title Survey of the Premises prepared in accordance with the 2021 Minimum Standard Detail Requirements, as certified to Lessee, Lessor, Lender, and the Title Company.
"Term" means the Initial Term and any Renewal Terms, as defined in Article 3 of this Lease.
"Title Company" means Lone Star Abstract & Title Co., 312 North Texas Avenue, Odessa, Texas 79761.
"Total Project Value" means Forty Million Dollars ($40,000,000), representing the aggregate estimated cost of developing, constructing, and commissioning the Project, inclusive of all hard costs, soft costs, financing costs, and contingency reserves.
ARTICLE 2 — LEASE OF PREMISES
Section 2.1 Grant of Lease. Lessor hereby leases, demises, and lets to Lessee, and Lessee hereby leases from Lessor, the Premises, together with all rights, easements, privileges, and appurtenances thereto, for the Term and upon the terms and conditions set forth in this Lease. The Premises consist of approximately 15.0 acres of land, being a portion of Survey No. 42, Block 42, T-1-S, T&P RR Co. Survey, Ector County, Texas, as more particularly described in the metes and bounds legal description attached hereto as Exhibit A and depicted on the site plan attached hereto as Exhibit B. Lessee shall have the exclusive right to possess, use, and enjoy the Premises for the Permitted Use during the Term, subject to Lessor's reserved rights expressly set forth herein. This grant includes the right of Lessee, at its sole cost and expense, to develop, construct, install, own, operate, maintain, repair, replace, repower, decommission, and remove the Project and all Improvements on the Premises.
Section 2.2 Appurtenant Rights. In addition to the leasehold estate granted in Section 2.1, Lessor hereby grants to Lessee, for the benefit of the Premises and the Project, the following non-exclusive appurtenant rights over and across Lessor's adjacent property, which rights shall run with the Premises during the Term:
(a) Ingress and Egress. A non-exclusive easement for vehicular and pedestrian ingress and egress between the Premises and the nearest public right-of-way, over access roads to be mutually agreed upon by Lessor and Lessee and depicted on the site plan attached as Exhibit B, which easement shall be not less than thirty (30) feet in width. Lessee shall have the right, at its sole cost, to improve, grade, pave, and maintain such access roads as necessary for the construction and operation of the Project.
(b) Utility Corridors. A non-exclusive easement for the installation, construction, operation, maintenance, repair, replacement, and removal of underground and overhead utility lines, conduits, cables, pipes, and related facilities, including electrical distribution lines, water lines, fiber optic cables, and telecommunications facilities, necessary or useful for the operation of the Project.
(c) Drainage. A non-exclusive easement for stormwater drainage and the construction, operation, and maintenance of stormwater management facilities, including detention basins and drainage channels, as necessary to comply with TCEQ Stormwater General Permit No. TXR150000 and other Applicable Laws.
(d) Gen-Tie Line Easement. A non-exclusive easement for the construction, installation, operation, maintenance, repair, replacement, and removal of the Gen-Tie Line (approximately 1.2 miles of 138 kV overhead transmission line) across Lessor's property from the Premises to the Point of Interconnection at the Western Permian 138 kV Substation, which easement shall be not less than fifty (50) feet in width and shall be depicted on Exhibit B. Such easement shall include the right to install poles, towers, conductors, guy wires, foundations, and all associated facilities.
The easements granted in this Section 2.2 shall be appurtenant to and for the benefit of the Premises and shall continue for the duration of the Term, including any Renewal Terms, and for such additional time as may be reasonably necessary for Lessee to complete decommissioning and removal of the Improvements in accordance with Article 20. Lessee shall exercise such easement rights in a manner that minimizes interference with Lessor's use of its adjacent property, and Lessee shall promptly repair any damage to Lessor's adjacent property caused by Lessee's exercise of such easement rights.
Section 2.3 Quiet Enjoyment. Lessor covenants and warrants that Lessee, upon paying the rent and performing all of its obligations under this Lease, shall peacefully and quietly have, hold, and enjoy the Premises for the full Term without hindrance, molestation, or disturbance by Lessor or any Person claiming by, through, or under Lessor. Lessor shall defend Lessee's leasehold estate against all claims of any Person claiming paramount title to the Premises, and shall not take any action, or permit or suffer any action to be taken, that would interfere with Lessee's quiet enjoyment and use of the Premises for the Permitted Use.
Section 2.4 "As-Is" Condition. Lessee accepts the Premises in its present "as-is, where-is" condition, with all faults. Lessee acknowledges and agrees that it has conducted its own independent investigation and due diligence with respect to the physical, environmental, and legal condition of the Premises, including, without limitation, a Phase I Environmental Site Assessment and a Phase II Environmental Site Assessment performed by Terranova Environmental Group, Inc. (Lead Consultant: Karen V. Albrecht, 4500 Greenville Avenue, Suite 220, Dallas, Texas 75206), a geotechnical investigation, a boundary and topographic survey, and a title examination. Lessee is satisfied with the condition of the Premises and the results of its due diligence. Except as expressly set forth in this Lease, Lessor makes no representation or warranty of any kind, express or implied, with respect to the condition of the Premises, including any warranty of fitness for a particular purpose or merchantability.
ARTICLE 3 — TERM
Section 3.1 Initial Term. The initial term of this Lease (the "Initial Term") shall be twenty-five (25) years, commencing on December 1, 2022 (the "Commencement Date") and expiring at 11:59 p.m., Central Time, on December 1, 2047, unless sooner terminated or extended as provided herein. The Commencement Date shall not be subject to adjustment or deferral for any reason, including delays in the construction or commissioning of the Project.
Section 3.2 Renewal Options. Lessee shall have the option to extend the Term of this Lease for two (2) successive periods of five (5) years each (each, a "Renewal Term"), for a maximum total term of thirty-five (35) years, with the latest possible expiration date being December 1, 2057. Each Renewal Term shall automatically commence upon the expiration of the then-current Term unless Lessee fails to exercise its renewal option as provided herein. Lessee shall exercise each renewal option by delivering written notice of its election to Lessor not less than twelve (12) months prior to the expiration of the then-current Term. All terms, conditions, and provisions of this Lease shall apply during each Renewal Term with the same force and effect as during the Initial Term, except that the Base Rent during each Renewal Term shall be determined in accordance with Section 6.4. The exercise of each renewal option is expressly conditioned upon the following: (a) Lessee shall not be in default under any provision of this Lease at the time it delivers its renewal notice; and (b) Lessee shall not be in default under any provision of this Lease at the commencement of the applicable Renewal Term. If Lessee fails to timely deliver its renewal notice, or if Lessee is in default at the time of delivery or at the commencement of the Renewal Term (and such default has not been cured within any applicable cure period), the renewal option shall lapse and become null and void, and the Lease shall expire at the end of the then-current Term; provided, however, that Lender's cure rights under Article 13 shall apply.
Section 3.3 Holding Over. If Lessee remains in possession of the Premises after the expiration of the Term or any Renewal Term (including the period during which Lessee is completing decommissioning activities under Article 20), without having exercised a renewal option or otherwise extended this Lease, such holdover shall be deemed to create a month-to-month tenancy on the same terms and conditions as this Lease, except that (a) the Base Rent during any holdover period shall be one hundred fifty percent (150%) of the Base Rent in effect during the last month of the expired Term, and (b) such month-to-month tenancy may be terminated by either Party upon not less than sixty (60) days' prior written notice to the other Party. Nothing in this Section 3.3 shall be construed as Lessor's consent to any holdover by Lessee, and Lessee acknowledges that Lessor may suffer damages as a result of any holdover that are not fully compensated by the holdover rent.
ARTICLE 4 — PERMITTED USE
Section 4.1 Permitted Use. Lessee shall use and occupy the Premises solely for the purpose of developing, constructing, installing, owning, operating, maintaining, repairing, replacing, repowering, upgrading, decommissioning, and removing a battery energy storage system (BESS) facility, together with all related improvements, equipment, and facilities, including but not limited to the following (collectively, the "Permitted Use"):
(a) LFP battery modules and battery containers (including HD-LFP-200E modules supplied by Harmon-Dietrich Energy Solutions, LLC);
(b) Power conversion systems (inverters), including ten (10) 5 MW inverter units;
(c) Battery management systems (BMS);
(d) Thermal management (HVAC) systems for battery container climate control;
(e) On-site step-up transformer (34.5 kV to 138 kV);
(f) Switchgear, protective relaying, and metering equipment;
(g) Control buildings, maintenance buildings, and operations centers;
(h) Perimeter fencing, gates, and security systems (including CCTV, access control, and fire detection and suppression systems);
(i) Access roads, parking areas, and laydown/staging areas;
(j) Stormwater management facilities, including detention basins and drainage improvements;
(k) The Gen-Tie Line (approximately 1.2 miles of 138 kV overhead transmission line from the Premises to the Point of Interconnection at the Western Permian 138 kV Substation);
(l) Underground and overhead utility lines, conduits, cables, and related infrastructure;
(m) Telecommunications equipment and SCADA (Supervisory Control and Data Acquisition) systems; and
(n) All other ancillary structures, equipment, facilities, and improvements necessary or useful for the development, construction, operation, maintenance, repair, replacement, repowering, or decommissioning of the Project.
The Permitted Use shall include, without limitation, the charging, discharging, storage, and dispatch of electrical energy; participation in ERCOT wholesale electricity markets, including energy, ancillary services, and capacity markets; the provision of grid services; and all activities necessary or incidental thereto.
Section 4.2 Compliance with Laws. Lessee shall comply with all Applicable Laws in connection with its use and occupancy of the Premises and the construction, operation, maintenance, and decommissioning of the Project, including, without limitation, all applicable ERCOT protocols, PUCT regulations, Ector County ordinances and building codes, TCEQ permits (including Stormwater General Permit No. TXR150000), zoning requirements, fire codes, the National Electrical Code, NFPA standards (including NFPA 855, Standard for the Installation of Stationary Energy Storage Systems), and all other applicable codes, standards, and regulations. Lessee shall obtain and maintain in full force and effect all permits, licenses, and approvals required by Applicable Law for the construction and operation of the Project, including Ector County Building Permit No. BP-2022-04517 (issued October 28, 2022).
Section 4.3 No Nuisance. Lessee shall not conduct or permit any activity on the Premises that constitutes a public or private nuisance or unreasonably interferes with Lessor's use and enjoyment of Lessor's adjacent properties. Lessee shall use commercially reasonable efforts to minimize noise, dust, vibration, and light pollution associated with the construction and operation of the Project, particularly during nighttime hours. Notwithstanding the foregoing, the Parties acknowledge that certain construction activities may temporarily increase noise levels and traffic in the vicinity of the Premises, and such temporary impacts during the Development Period shall not be deemed a nuisance.
ARTICLE 5 — MINERAL RIGHTS RESERVATION AND SURFACE USE
Section 5.1 Mineral Rights Reservation. Lessor hereby expressly reserves unto itself and its successors and assigns all mineral rights, including all oil, gas, hydrocarbons, and other minerals (whether solid, liquid, or gaseous), in, on, and under the Premises, together with all rights to explore for, develop, produce, and market such minerals (collectively, the "Mineral Rights"). Provided, however, that Lessor shall not, and shall not permit any third party to, conduct any surface mining operations, drilling operations, exploration activities, or any other mineral development or production operations on the surface of the Premises or within five hundred (500) feet of the boundaries of the Premises that would (a) interfere with, damage, or endanger the Improvements or any component thereof, (b) interfere with the construction, operation, or maintenance of the Project, (c) create any safety hazard for persons on the Premises, or (d) result in vibration, subsidence, or other surface disturbance on the Premises, without the prior written consent of Lessee, which consent may be withheld in Lessee's sole and absolute discretion. For the avoidance of doubt, nothing in this Section 5.1 shall restrict Lessor from exercising its Mineral Rights through directional drilling, horizontal drilling, or other subsurface access methods from locations on Lessor's property that are more than five hundred (500) feet from the boundaries of the Premises, provided that such operations do not interfere with, damage, or endanger the Improvements or the operation of the Project.
Section 5.2 Surface Use Restriction. Lessor's exercise of the reserved Mineral Rights shall at all times be subject to the following surface use restrictions, which shall be deemed a covenant running with the land for the duration of the Term:
(a) No drilling rigs, pump jacks, tank batteries, pipelines, flow lines, injection wells, disposal wells, compressor stations, or other mineral production or processing equipment or facilities shall be placed on the surface of the Premises without the prior written consent of Lessee.
(b) No roads or other access ways for mineral operations shall be constructed on the Premises without the prior written consent of Lessee.
(c) Lessor shall ensure that any mineral lessee, operator, or other third party exercising mineral rights in, on, or under the Premises is bound by the restrictions set forth in this Article 5 and acknowledges the existence of this Lease and the priority of Lessee's leasehold estate over any surface use rights associated with the Mineral Rights.
Section 5.3 Coordination. Lessor shall provide Lessee with not less than ninety (90) days' prior written notice of any proposed mineral exploration, development, or production activity on Lessor's adjacent lands within five hundred (500) feet of the boundaries of the Premises. Such notice shall include a reasonably detailed description of the proposed activity, including the location, nature, scope, expected duration, and potential impacts on the Premises and the Project. Lessee shall have the right to review and comment on such proposed activity, and the Parties shall cooperate in good faith to coordinate such activity so as to minimize interference with the Project. In the event of any conflict between Lessor's mineral operations on adjacent lands and the operation of the Project, Lessor shall use commercially reasonable efforts to modify or adjust its mineral operations so as to avoid or minimize any adverse impact on the Project.
ARTICLE 6 — RENT
Section 6.1 Lease Signing Payment. Upon execution of this Lease, Lessee shall pay to Lessor a one-time, non-refundable lease signing payment of Fifty Thousand Dollars ($50,000.00) (the "Signing Payment"). The Signing Payment represents consideration for Lessor's execution and delivery of this Lease and shall not be credited against, or applied as a prepayment of, any installment of Base Rent. The Signing Payment shall be payable by wire transfer of immediately available funds to the account designated by Lessor on or before the date of execution of this Lease.
Section 6.2 Development Period Rent. During the Development Period (Lease Year 1, commencing on the Commencement Date, December 1, 2022), Lessee shall pay to Lessor Base Rent in the amount of One Thousand Two Hundred Dollars ($1,200.00) per acre per year, calculated as follows:
$1,200.00 per acre × 15.0 acres = $18,000.00 per year
$18,000.00 ÷ 12 months = $1,500.00 per month
Development Period Base Rent shall be payable in equal monthly installments of One Thousand Five Hundred Dollars ($1,500.00) each, payable in advance on the first (1st) day of each calendar month during the Development Period. The first monthly installment of Development Period Base Rent shall be due and payable on December 1, 2022. If the Development Period commences or ends on a date other than the first or last day of a calendar month, the Base Rent for such partial month shall be prorated on a per diem basis.
Section 6.3 Operating Period Rent. During the Operating Period (commencing on the first day following the end of the Development Period and continuing through Lease Year 25, and during any Renewal Terms), Lessee shall pay to Lessor Base Rent in the amount of One Thousand Eight Hundred Dollars ($1,800.00) per acre per year for the first Lease Year of the Operating Period, calculated as follows:
$1,800.00 per acre × 15.0 acres = $27,000.00 per year
$27,000.00 ÷ 12 months = $2,250.00 per month
Operating Period Base Rent shall be payable in equal monthly installments of Two Thousand Two Hundred Fifty Dollars ($2,250.00) each, payable in advance on the first (1st) day of each calendar month during the first Lease Year of the Operating Period. The Base Rent for subsequent Lease Years during the Operating Period shall be as adjusted pursuant to Section 6.4. If the Operating Period commences or ends on a date other than the first or last day of a calendar month, the Base Rent for such partial month shall be prorated on a per diem basis.
Section 6.4 Annual Rent Escalation. Commencing on the second (2nd) anniversary of the start of the Operating Period and on each anniversary thereof throughout the remainder of the Term (including any Renewal Terms), the Base Rent shall increase by two percent (2.0%) over the Base Rent payable during the immediately preceding Lease Year, compounding annually. By way of illustration, if the first Lease Year of the Operating Period commences on December 1, 2023 with a Base Rent of $27,000.00 per year, the Base Rent for the Lease Year commencing December 1, 2024 shall be $27,000.00 × 1.02 = $27,540.00 per year, and the Base Rent for the Lease Year commencing December 1, 2025 shall be $27,540.00 × 1.02 = $28,090.80 per year, and so on for each subsequent Lease Year. Lessor shall provide Lessee with a written schedule of the adjusted Base Rent at least thirty (30) days prior to each anniversary, but the failure to provide such schedule shall not affect the obligation of Lessee to pay the escalated Base Rent.
Section 6.5 Late Payment. If any installment of Base Rent or any other amount due under this Lease is not received by Lessor within ten (10) days after the due date therefor, Lessee shall pay to Lessor a late charge of five percent (5%) of the overdue amount as liquidated damages for the administrative costs of processing and pursuing such late payment, and not as a penalty. In addition, all overdue amounts shall bear interest from the due date until paid at the lesser of (a) twelve percent (12%) per annum, or (b) the maximum rate of interest permitted by applicable Texas law. The acceptance of any late charge or interest by Lessor shall not constitute a waiver of any default or any right of Lessor hereunder.
Section 6.6 Payment Method. All payments of Base Rent and other amounts due under this Lease shall be made by wire transfer of immediately available funds or by automated clearing house (ACH) transfer to a bank account designated by Lessor in writing from time to time. Lessor shall provide Lessee with wire transfer instructions at least ten (10) days prior to the Commencement Date, and Lessor may change such instructions upon not less than thirty (30) days' prior written notice to Lessee. All payments shall be made in United States Dollars. No payment shall be deemed made until received in immediately available funds in the designated account.
Section 6.7 Net Lease. This Lease is intended to be, and shall be construed as, an absolute net lease. Except as expressly provided otherwise herein, Lessee shall be solely responsible for, and shall pay when due, all costs, expenses, taxes, assessments, insurance premiums, utility charges, maintenance costs, repair costs, and charges of every kind and nature whatsoever, whether foreseen or unforeseen, ordinary or extraordinary, that arise from or relate to the Premises, the Improvements, or the Project during the Term. It is the intent of the Parties that the Base Rent payable hereunder shall be absolutely net to Lessor, free of any offset, deduction, or charge of any kind, and that Lessor shall not be required to provide any services, perform any maintenance, make any repairs, or bear any costs or expenses of any kind with respect to the Premises, the Improvements, or the Project during the Term.
ARTICLE 7 — TAXES AND ASSESSMENTS
Section 7.1 Real Property Taxes. Lessee shall pay, before delinquency, all real property taxes, general and special assessments, levies, fees, and governmental charges of every kind and nature levied, assessed, or imposed against the Premises and the Improvements during the Term, whether assessed against Lessor or Lessee. Lessee shall furnish to Lessor, upon Lessor's reasonable request, evidence of the timely payment of all such taxes and assessments. If any tax or assessment is payable in installments, Lessee may pay such tax or assessment in installments as they become due; provided, however, that Lessee shall pay all installments that become due during the Term before delinquency. To the extent any real property tax or assessment relates to a tax year that includes a period before the Commencement Date or after the expiration or termination of this Lease, Lessee's obligation shall be prorated on a per diem basis. Lessor shall cooperate with Lessee in any efforts to obtain separate tax assessments for the Premises and the Improvements.
Section 7.2 Personal Property Taxes. Lessee shall be solely responsible for the payment of all taxes, assessments, and governmental charges levied or assessed against Lessee's personal property, equipment, trade fixtures, inventory, and other tangible and intangible personal property located on the Premises. Lessee shall file all required personal property tax returns and renditions in a timely manner.
Section 7.3 Tax Contest. Lessee shall have the right, at its sole cost and expense, to contest the validity or amount of any real or personal property tax or assessment levied or assessed against the Premises, the Improvements, or Lessee's personal property, in good faith by appropriate legal proceedings. During the pendency of any such contest, payment of the contested tax or assessment may be deferred or withheld by Lessee; provided, however, that (a) Lessee shall post any bond, escrow deposit, or other security required by Applicable Law or the taxing authority; (b) Lessee shall prosecute such contest diligently and in good faith; (c) Lessee shall pay, and indemnify and hold Lessor harmless from and against, all penalties, interest, costs, and expenses incurred by Lessor as a result of such contest; and (d) Lessee shall promptly pay the tax or assessment, together with all penalties and interest, if the contest is unsuccessful.
Section 7.4 Lessor's Taxes. Lessor shall be solely responsible for the payment of all income, franchise, or other taxes payable by Lessor with respect to rent or other amounts received by Lessor under this Lease. Lessee shall have no responsibility for any such taxes.
ARTICLE 8 — IMPROVEMENTS, ALTERATIONS, AND OWNERSHIP
Section 8.1 Right to Construct. Lessee shall have the right, at its sole cost and expense, to construct, install, erect, place, and maintain on the Premises all Improvements necessary or desirable for the Permitted Use, without the prior consent of Lessor. Such Improvements shall include, without limitation:
(a) The BESS, consisting of a 50 MW / 200 MWh lithium iron phosphate battery energy storage system utilizing HD-LFP-200E battery modules supplied by Harmon-Dietrich Energy Solutions, LLC pursuant to the Equipment Supply Agreement;
(b) Ten (10) 5 MW power conversion system (PCS) inverters;
(c) Battery management system (BMS), including all monitoring, control, and protection hardware and software;
(d) Thermal management (HVAC) systems for battery container climate control;
(e) Battery container enclosures and related structural systems;
(f) On-site step-up transformer (34.5 kV to 138 kV) and associated transformer pad;
(g) Medium- and high-voltage switchgear, protective relaying, and metering equipment;
(h) The Gen-Tie Line (approximately 1.2 miles of 138 kV overhead transmission line from the Premises to the Point of Interconnection at the Western Permian 138 kV Substation);
(i) Control buildings, maintenance buildings, and operations centers;
(j) Access roads, parking areas, and laydown/staging areas;
(k) Perimeter fencing (minimum six (6) feet in height with barbed wire top), gates, and security systems;
(l) Stormwater management facilities, including detention basins and drainage improvements;
(m) Underground and overhead utility lines, conduits, cables, and related infrastructure;
(n) Telecommunications equipment, SCADA systems, and fiber optic communications; and
(o) All other structures, equipment, facilities, and improvements necessary or useful for the development, construction, operation, maintenance, repair, replacement, repowering, or decommissioning of the Project.
Section 8.2 Construction Standards. All construction of Improvements on the Premises shall be performed in a good and workmanlike manner, using materials of good quality, in compliance with all Applicable Laws (including all building codes, zoning requirements, and environmental regulations), and in accordance with the plans and specifications set forth in the EPC Agreement between Lessee and Meridian Power Construction, Inc. (Contract Price: $31,200,000). Lessee shall obtain all required permits and approvals prior to commencing construction, including Ector County Building Permit No. BP-2022-04517 (issued October 28, 2022). Lessee shall provide Lessor with copies of all material permits and approvals upon request. Lessee shall ensure that the EPC Contractor and all subcontractors maintain all insurance coverages required by Applicable Law and by the EPC Agreement, including workers' compensation and commercial general liability insurance.
Section 8.3 Ownership of Improvements During Term. All Improvements placed on the Premises by or on behalf of Lessee shall remain the personal property of Lessee during the Term and shall not become fixtures or part of the realty, regardless of the manner in which such Improvements are attached to or incorporated into the Premises. The Parties intend that all Improvements shall be and remain severable from the Premises and shall not be deemed to merge with or become part of Lessor's fee estate. Lessor hereby waives any and all landlord's liens, statutory or otherwise, on the Improvements and on all equipment, personal property, and other assets of Lessee located on the Premises. Lessor further agrees to execute and deliver, promptly upon request by Lessee or Lender, any instruments, documents, or UCC financing statement amendments reasonably necessary to evidence or confirm Lessee's ownership of the Improvements and Lender's first-priority security interest therein.
Section 8.4 Removal of Improvements. Upon the expiration or earlier termination of this Lease, Lessee shall have the right and obligation, subject to Section 8.5, to remove all Improvements from the Premises within twelve (12) months following the end of the Term (the "Removal Period") and to restore the Premises to a condition reasonably similar to its condition as of the Commencement Date, ordinary wear and tear excepted, in accordance with Article 20. Lessee's obligation to remove the Improvements and restore the Premises shall survive the expiration or termination of this Lease. During the Removal Period, Lessee shall continue to have access to the Premises and the benefit of the easements granted in Section 2.2 for the purpose of completing such removal and restoration activities, and Lessee shall pay holdover rent in accordance with Section 3.3 for any month in which Lessee remains in possession of the Premises during the Removal Period.
Section 8.5 Lessor's Option to Retain Improvements. Notwithstanding Section 8.4, Lessor may elect, by delivering written notice to Lessee not less than ninety (90) days before the scheduled expiration of the Term (or promptly following any early termination), to retain some or all of the Improvements on the Premises. If Lessor elects to retain any Improvements, Lessee shall have no obligation to remove such retained Improvements, and title to such Improvements shall transfer to Lessor upon the expiration or termination of this Lease. Lessor shall accept such retained Improvements in their then-current "as-is, where-is" condition, with all faults, and Lessor shall release Lessee from all further liability with respect to the condition of such Improvements. Lessee shall execute and deliver such bills of sale, assignments, or other instruments as Lessor may reasonably request to evidence the transfer of title to the retained Improvements. If Lessor elects to retain only some of the Improvements, Lessee shall remove all Improvements not retained by Lessor in accordance with Section 8.4 and Article 20.
Section 8.6 Liens. Lessee shall keep the Premises free and clear of all liens, encumbrances, charges, and claims arising out of or in connection with work performed, services provided, or materials furnished to or for the Premises or the Project, other than Permitted Encumbrances (including the leasehold mortgage in favor of Lender under the Credit Agreement). If any mechanic's lien, materialmen's lien, or similar statutory lien is filed against the Premises, the Improvements, or the leasehold estate of Lessee, Lessee shall, within thirty (30) days after receiving notice of the filing of such lien, either (a) cause such lien to be released and discharged of record, or (b) post a bond or other security sufficient to cause such lien to be released or to fully protect Lessor's interest in the Premises, in either case in accordance with Applicable Law. If Lessee fails to release, discharge, or bond over such lien within said thirty (30)-day period, Lessor may, after giving Lessee ten (10) days' additional written notice, take such action as Lessor deems necessary to release or discharge such lien, and Lessee shall reimburse Lessor for all costs and expenses (including reasonable attorneys' fees) incurred by Lessor in connection therewith within thirty (30) days following demand.
ARTICLE 9 — INSURANCE
Section 9.1 Lessee's Insurance Obligations. Lessee shall maintain, or cause to be maintained, at its sole cost and expense, the following minimum insurance coverages throughout the Term:
(a) Builder's Risk Insurance. During the period of construction of the Project, a builder's risk insurance policy in an amount not less than the full replacement cost of the Improvements under construction, with a current policy limit of not less than Forty-Two Million Dollars ($42,000,000). The current builder's risk policy is placed with Commonwealth Specialty Insurance Company (policy limit: $42,000,000), through Kensington Risk Advisors, LLC (Lead Broker: Dana J. Carwell). Such policy shall cover all risks of physical loss or damage to the Improvements during construction, including fire, windstorm, flood (if applicable), theft, vandalism, earthquake, and transit perils. Upon achievement of COD, the builder's risk policy shall be replaced by the property insurance required under clause (c) below.
(b) Commercial General Liability Insurance. Commercial general liability (CGL) insurance, including premises and operations, products and completed operations, contractual liability, broad form property damage, and personal and advertising injury liability, with combined single limits of not less than Five Million Dollars ($5,000,000) per occurrence and Ten Million Dollars ($10,000,000) in the annual aggregate. The current CGL policy is placed with Pinnacle Mutual Assurance Corp. Such policy shall include coverage for explosion, collapse, and underground hazards (XCU) and pollution liability arising from sudden and accidental events.
(c) Property Insurance (Post-Construction). Upon achievement of COD and continuing throughout the Operating Period, all-risk property insurance covering the Improvements and all equipment and personal property of Lessee located on the Premises at full replacement cost value, including coverage for fire, windstorm, flood (if required by Lender or if the Premises are located in a Special Flood Hazard Area), earthquake, machinery breakdown, and electrical breakdown. Such policy shall include business interruption or loss of revenue coverage in an amount and for a waiting period acceptable to Lender.
(d) Environmental Liability Insurance. Pollution legal liability insurance providing coverage for third-party bodily injury and property damage, cleanup costs, and defense expenses arising from pollution conditions on, at, under, or migrating from the Premises, with limits of liability reasonably acceptable to Lessor and Lender. Such policy shall include coverage for both sudden and accidental releases and gradual pollution conditions.
(e) Workers' Compensation Insurance. Workers' compensation insurance as required by the laws of the State of Texas, including employer's liability insurance with limits of not less than One Million Dollars ($1,000,000) per accident, One Million Dollars ($1,000,000) per employee for disease, and One Million Dollars ($1,000,000) policy limit for disease.
(f) Automobile Liability Insurance. Commercial automobile liability insurance covering all owned, hired, and non-owned vehicles used in connection with the Project, with combined single limits of not less than One Million Dollars ($1,000,000) per accident for bodily injury and property damage.
All insurance policies required under this Section 9.1 shall be issued by insurance companies having an A.M. Best rating of not less than A- VII (or equivalent rating from Standard & Poor's or Moody's) and authorized to do business in the State of Texas. All policies shall be primary and non-contributing with respect to any insurance carried by Lessor. All policies shall provide that they may not be canceled or materially modified without at least thirty (30) days' prior written notice to Lessor and Lender (ten (10) days for non-payment of premium).
Section 9.2 Additional Insureds. Lessor (Permian Basin Land Holdings, LP) and Lender (Brazos River National Bank, N.A.) shall be named as additional insureds on all liability insurance policies maintained by Lessee under this Lease, including the CGL policy. Lessor and Lender shall be named as loss payees (or mortgagee loss payees, as applicable) on all property insurance and builder's risk insurance policies, as their interests may appear. All loss payee endorsements shall be in the standard mortgage clause form acceptable to Lender.
Section 9.3 Evidence of Insurance. Lessee shall deliver to Lessor and Lender certificates of insurance (on Acord 25 or Acord 28 forms, as applicable), together with copies of all endorsements naming Lessor and Lender as additional insureds and loss payees, evidencing the insurance coverages required under this Article 9. Such certificates and endorsements shall be delivered (a) prior to the Commencement Date, (b) annually thereafter on or before each policy renewal date, (c) promptly following any material change in coverage, and (d) upon the reasonable request of Lessor or Lender at any time. If Lessee fails to maintain the required insurance, Lessor may (but shall not be obligated to) obtain such insurance at Lessee's cost and expense, and Lessee shall reimburse Lessor for all premiums and costs within thirty (30) days following demand.
Section 9.4 Waiver of Subrogation. Lessor and Lessee each hereby waive all rights of recovery, claim, action, or cause of action against the other and the other's partners, members, officers, directors, agents, and employees for any loss or damage covered (or required to be covered) by any insurance policy maintained or required to be maintained by the waiving party under this Lease, to the extent of the proceeds received (or that would have been received had the required insurance been maintained) under such policy. Each Party shall cause each of its insurance policies to include a waiver of subrogation endorsement or clause by which the insurer waives all rights of subrogation against the other Party and its partners, members, officers, directors, agents, and employees.
Section 9.5 Lessor's Insurance. Lessor shall maintain property insurance on Lessor's adjacent property as Lessor deems appropriate in Lessor's sole discretion. Lessee shall have no responsibility for the cost or maintenance of any insurance coverage maintained by Lessor on property other than the Premises.
ARTICLE 10 — ENVIRONMENTAL MATTERS
Section 10.1 Lessor's Environmental Representations. Lessor represents and warrants to Lessee that, to the best of Lessor's actual knowledge after reasonable inquiry:
(a) No Hazardous Materials have been released, stored, generated, treated, or disposed of on, in, under, or about the Premises in violation of Environmental Laws, except as may have been disclosed in the Phase I and Phase II Environmental Site Assessments described in Section 10.3;
(b) No underground storage tanks, above-ground storage tanks, septic systems, or sumps are currently located on the Premises;
(c) There are no pending or, to Lessor's actual knowledge, threatened environmental claims, actions, suits, proceedings, or investigations by any governmental authority or third party relating to the Premises;
(d) Lessor has not received any notice of violation, order, directive, or request for information from any governmental authority with respect to any Environmental Law relating to the Premises; and
(e) The Premises are not listed on the National Priorities List (CERCLIS), the Texas Superfund Registry, or any other federal, state, or local list of contaminated or potentially contaminated sites.
The representations and warranties set forth in this Section 10.1 shall survive the execution and delivery of this Lease and shall be deemed restated as of the Commencement Date.
Section 10.2 Lessee's Environmental Obligations. Lessee shall comply with all Environmental Laws in connection with its use, occupancy, and operation of the Premises and the Project during the Term. Without limiting the generality of the foregoing:
(a) Lessee shall not release, discharge, store, generate, treat, transport, or dispose of any Hazardous Materials on, in, under, or about the Premises, except in compliance with all Environmental Laws and as customary and necessary for BESS operations, including, without limitation, battery electrolyte, coolants, thermal management fluids, lubricants, small quantities of cleaning solvents, and other materials used in the ordinary course of operation and maintenance of the Project;
(b) Lessee shall obtain and maintain all environmental permits required for the Project, including TCEQ Stormwater General Permit No. TXR150000, and shall comply with all terms and conditions thereof;
(c) Lessee shall implement and maintain a Stormwater Pollution Prevention Plan (SWPPP) and a Spill Prevention, Control, and Countermeasure (SPCC) plan, as required by Applicable Law;
(d) Lessee shall promptly notify Lessor and all appropriate governmental authorities of any release, spill, or discharge of Hazardous Materials on the Premises, and shall take all necessary remedial actions in compliance with Environmental Laws; and
(e) Upon the expiration or termination of this Lease, Lessee shall remove all Hazardous Materials brought onto the Premises by Lessee or its agents, contractors, or invitees, and shall remediate any contamination resulting from Lessee's activities on the Premises, in each case in accordance with Environmental Laws.
Section 10.3 Environmental Due Diligence. Lessee has caused a Phase I Environmental Site Assessment (conforming to ASTM E1527-21) and a Phase II Environmental Site Assessment of the Premises to be performed by Terranova Environmental Group, Inc. (Lead Consultant: Karen V. Albrecht), with offices at 4500 Greenville Avenue, Suite 220, Dallas, Texas 75206 (collectively, the "Environmental Reports"). The Phase I ESA identified no recognized environmental conditions (RECs), controlled recognized environmental conditions (CRECs), or historical recognized environmental conditions (HRECs) on the Premises. The Phase II ESA confirmed that no contamination above applicable screening levels is present on the Premises. Lessee has relied on such Environmental Reports in entering into this Lease, and Lessor has been provided copies of such Environmental Reports.
Section 10.4 Indemnification. Lessee shall indemnify, defend (with counsel reasonably acceptable to Lessor), and hold Lessor harmless from and against any and all claims, demands, actions, suits, proceedings, losses, damages, liabilities, penalties, fines, costs, and expenses (including reasonable attorneys' fees and consultant fees) arising from or in connection with (a) any Hazardous Materials introduced to, released on, or migrating from the Premises by Lessee or its agents, employees, contractors, subcontractors, or invitees during the Term, or (b) any breach of Lessee's obligations under this Article 10. Lessor shall indemnify, defend (with counsel reasonably acceptable to Lessee), and hold Lessee harmless from and against any and all claims, demands, actions, suits, proceedings, losses, damages, liabilities, penalties, fines, costs, and expenses (including reasonable attorneys' fees and consultant fees) arising from or in connection with any pre-existing environmental contamination on, in, or under the Premises that was present prior to the Commencement Date, to the extent such contamination was not caused by Lessee or its agents. The indemnification obligations of this Section 10.4 shall survive the expiration or termination of this Lease.
ARTICLE 11 — UTILITIES AND ACCESS
Section 11.1 Utilities. Lessee shall be solely responsible for obtaining, connecting, and paying for all utilities required for the construction and operation of the Project, including, without limitation, electricity, water, wastewater, natural gas (if applicable), and telecommunications. Lessee shall have the right, at its sole cost and expense, to install, construct, operate, maintain, repair, replace, and remove utility lines, conduits, cables, pipes, and related facilities on, over, and under the Premises and across Lessor's adjacent property pursuant to the easements granted in Section 2.2. All utility installations shall be performed in compliance with Applicable Laws and in a manner that minimizes disturbance to Lessor's adjacent property. Upon completion of any utility installation, Lessee shall restore Lessor's adjacent property to its pre-construction condition, to the extent reasonably practicable. Lessor shall have no obligation to provide or arrange for any utilities to the Premises.
Section 11.2 Access. Lessee and its authorized representatives, including, without limitation, its agents, employees, contractors (including the EPC Contractor, Meridian Power Construction, Inc., and the equipment supplier, Harmon-Dietrich Energy Solutions, LLC), subcontractors, invitees, consultants, and Lender's representatives (including Norgate Technical Advisors, Inc., as Independent Engineer, and Dr. Phillip S. Reardon, P.E., Lead Engineer) shall have the right of access to the Premises at all times, twenty-four (24) hours per day, seven (7) days per week, three hundred sixty-five (365) days per year, over and across Lessor's property via th

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