1015-00001 · Graymont Brothers Inc · Debt & Lender Consents

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PRIVILEGED AND CONFIDENTIAL

CIMARRON SOLAR DEVELOPMENT LLC a New Mexico limited liability company

a wholly owned subsidiary of Calloway-Briggs Operating Company LLC, itself a wholly owned subsidiary of CBR Holdings LLC, itself a wholly owned subsidiary of Calloway-Briggs Renewables Inc.

c/o Calloway-Briggs Renewables Inc. 4200 Ridgeline Parkway, Suite 1100 Austin, TX 78746

June 3, 2022

Prairie Commercial Bank, N.A. 2200 Ross Avenue, Suite 3600 Dallas, TX 75201

Attention: Brent Hollowell, Senior Vice President, Project Finance

Via Email and Overnight Courier

Re: Notice Pursuant to Section 6.02(a)(vi) of the Credit Agreement, dated as of September 15, 2021 (as amended, restated, supplemented, or otherwise modified from time to time, the "Credit Agreement"), by and among Cimarron Solar Development LLC, as Borrower, the Lenders from time to time party thereto, and Prairie Commercial Bank, N.A., as Administrative Agent and a Lender — $143,000,000 Construction-to-Term Credit Facility (Conversion Date: March 2025) — Proposed Initial Public Offering of Common Stock of Calloway-Briggs Renewables Inc.

Dear Mr. Hollowell:

1. Introduction and Purpose of Notice

Cimarron Solar Development LLC, a New Mexico limited liability company (the "Borrower"), hereby delivers this letter as formal notice to Prairie Commercial Bank, N.A. ("Prairie Commercial" or the "Administrative Agent"), in its capacity as Administrative Agent under the Credit Agreement referenced above. Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the Credit Agreement.

This notice is being delivered pursuant to Section 6.02(a)(vi) of the Credit Agreement, which requires the Borrower to promptly notify the Administrative Agent of certain material events, transactions, or changes that may affect the Borrower, its assets, or its direct or indirect parent entities, and that could reasonably be expected to be of material interest to the Administrative Agent or the Lenders. The Borrower is also delivering this notice in satisfaction of any applicable requirements under Section 6.02(b) of the Credit Agreement regarding the provision of information concerning material corporate events affecting the organizational structure of the Borrower's parent entities.

The material event that is the subject of this notice is the proposed initial public offering (the "IPO" or the "Offering") of common stock of Calloway-Briggs Renewables Inc. ("CBR"), a Delaware corporation and the indirect parent company of the Borrower, on the New York Stock Exchange (the "NYSE"). A detailed description of the Offering, the organizational structure of the Borrower and its parent entities, the expected use of proceeds, and the anticipated impact (if any) on the Credit Agreement and the Borrower are set forth below.

2. Description of the Proposed Transaction

CBR proposes to conduct an initial public offering of shares of its common stock, par value $0.01 per share (the "Common Stock"), on the NYSE under the proposed ticker symbol "CBRI." The following is a summary of the material terms of the Offering as currently contemplated:

Aggregate Offering Size. The proposed aggregate offering size is approximately $600,000,000, inclusive of the full exercise of the underwriters' overallotment option (the "Greenshoe Option"). The base offering (before giving effect to the Greenshoe Option) is expected to be approximately $521,700,000, with the Greenshoe Option providing for the sale of additional shares representing approximately $78,300,000 (approximately 15% of the base offering).

Assumed Offering Price. The assumed midpoint offering price is $22.00 per share. The final offering price will be determined through the book-building process and will be subject to, among other things, prevailing market conditions, investor demand, and the agreement of CBR and the underwriters at the time of pricing.

Shares Offered. Based on the assumed midpoint offering price of $22.00 per share and assuming full exercise of the Greenshoe Option, the total number of shares of Common Stock to be offered and sold in the Offering is approximately 27,272,727 shares.

Primary and Secondary Shares. The Offering will consist of a combination of primary shares (newly issued shares sold by CBR) and secondary shares (existing shares sold by Pinnacle Vista Capital Partners III, LP ("Pinnacle Vista"), the majority pre-IPO stockholder of CBR), as follows:

(a) Primary Shares: Approximately 16,895,455 shares of Common Stock to be sold by CBR, generating estimated net proceeds to CBR of approximately $371,700,000 (before underwriting discounts, commissions, and offering expenses); and

(b) Secondary Shares: Approximately 6,818,182 shares of Common Stock to be sold by Pinnacle Vista, generating estimated gross proceeds to Pinnacle Vista of approximately $150,000,000. CBR will not receive any of the proceeds from the sale of secondary shares by Pinnacle Vista.

Underwriters. The following investment banks have been engaged as underwriters for the Offering:

Joint Book-Running Managers:

• Hargrove Keating & Co. (Lead-Left Book-Running Manager)

• Linden Pratt Securities LLC

• Graymont Brothers Inc.

Co-Managers:

• Barfield Stuart & Co.

• Crane Whitley Capital LLC

Registration Statement. CBR has confidentially submitted a draft registration statement on Form S-1 (SEC CIK No. 0001948372) to the Securities and Exchange Commission (the "SEC") pursuant to the provisions of the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"). CBR has received oral clearance from the SEC staff with respect to the draft registration statement, subject to the filing of a pricing amendment reflecting the final offering terms. CBR expects to file the public version of the registration statement shortly prior to the commencement of the roadshow for the Offering.

Conditions to Closing. The completion of the Offering remains subject to, among other things, prevailing market conditions, the final determination of the offering price, final approval by the Board of Directors of CBR, and execution of the underwriting agreement among CBR, Pinnacle Vista, and the underwriters. There can be no assurance that the Offering will be completed on the terms described herein, or at all.

3. Organizational and Corporate Structure

The following describes the corporate chain of ownership between CBR and the Borrower, from the top of the organizational structure downward:

(a) Calloway-Briggs Renewables Inc. — a corporation organized and existing under the laws of the State of Delaware, which is the proposed issuer of Common Stock in the IPO and the ultimate indirect parent entity of the Borrower;

(b) CBR Holdings LLC — a limited liability company organized and existing under the laws of the State of Delaware, which is a direct, wholly owned subsidiary of CBR;

(c) Calloway-Briggs Operating Company LLC — a limited liability company organized and existing under the laws of the State of Texas, which is a direct, wholly owned subsidiary of CBR Holdings LLC; and

(d) Cimarron Solar Development LLC — a limited liability company organized and existing under the laws of the State of New Mexico, which is a direct, wholly owned subsidiary of Calloway-Briggs Operating Company LLC, and which is the Borrower under the Credit Agreement.

The Borrower wishes to emphasize that, following the consummation of the IPO, the direct and indirect ownership chain between CBR and the Borrower will remain unchanged. CBR will continue to indirectly own 100% of the equity interests in the Borrower, through the same chain of wholly owned intermediate holding companies described above. The IPO will not result in any transfer, disposition, or encumbrance of the equity interests in the Borrower, any of its intermediate parent entities, or any of the assets of the Borrower.

For the Administrative Agent's records, the following additional information regarding CBR is provided: CBR is incorporated in the State of Delaware, with its principal executive offices located at 4200 Ridgeline Parkway, Suite 1100, Austin, TX 78746. CBR's registered agent in the State of Delaware is Capitol Statutory Services, Inc., 1209 Orange Street, Wilmington, DE 19801. CBR's Employer Identification Number is 83-4027615.

4. Pre-IPO and Post-IPO Ownership Structure of CBR

Set forth below is a summary of the ownership structure of CBR on a pre-IPO and post-IPO basis.

Pre-IPO Ownership of CBR. Immediately prior to the IPO (and after giving effect to a reclassification of CBR's outstanding equity securities into a single class of Common Stock), the fully diluted outstanding shares of Common Stock of CBR are expected to total 100,000,000 shares, held as follows:

Post-IPO Ownership of CBR — Base Offering (No Overallotment Exercise). Following the consummation of the IPO on the basis of the base offering (i.e., assuming no exercise of the Greenshoe Option), the total shares of Common Stock outstanding are expected to be approximately 123,713,636, comprised of the 100,000,000 pre-IPO shares plus approximately 23,713,636 newly issued primary shares. In the base offering scenario, Pinnacle Vista will sell approximately 6,818,182 secondary shares but will retain a significant ownership position in CBR.

Post-IPO Ownership of CBR — Full Overallotment Exercise. Assuming the full exercise of the Greenshoe Option, the total shares of Common Stock outstanding following the IPO are expected to be approximately 127,272,727. The additional shares issued or sold upon exercise of the Greenshoe Option would further dilute the pre-IPO holders' percentage ownership but would not affect the Borrower's position under the Credit Agreement. Pinnacle Vista will remain a significant stockholder of CBR following the IPO in either scenario and is expected to be subject to customary lock-up restrictions for a period of 180 days following the date of the final prospectus.

Information Regarding Pinnacle Vista. For the Administrative Agent's reference, Pinnacle Vista Capital Partners III, LP is a Delaware limited partnership. Its general partner is Pinnacle Vista Capital Management LLC, with principal offices at 900 Park Avenue, 38th Floor, New York, NY 10021. Pinnacle Vista is managed by Hugh Pemberton and Diane Kovac, Co-Founders and Managing Partners of Pinnacle Vista Capital Management LLC.

5. Use of Proceeds

CBR intends to use the estimated net proceeds from the sale of primary shares in the Offering as follows:

(a) Repayment of Corporate Indebtedness. Approximately $200,000,000 of the net proceeds will be used to repay a portion of CBR's outstanding indebtedness under its Term Loan B facility, for which Veltrano National Bank serves as Administrative Agent. The repayment of such indebtedness will reduce the overall leverage of CBR and its consolidated subsidiaries, including the Borrower.

(b) Funding of the Cimarron Solar Project. Approximately $100,000,000 of the net proceeds will be contributed, through the intermediate holding company chain described in Section 3 above, to the Borrower to fund the ongoing construction of the Cimarron Solar project — that is, the project that is financed in part by the Credit Agreement. The Borrower expects that this equity contribution will reduce its draw requirements under the Credit Agreement and further support the project's timely completion by the expected commercial operation date ("COD") of the first quarter of 2023 and the successful conversion of the construction-to-term facility by the Conversion Date of March 2025.

(c) General Corporate Purposes. Approximately $71,700,000 of the net proceeds will be used for general corporate purposes, which may include the development of additional renewable energy projects, working capital, and other operational needs of CBR and its subsidiaries.

The Borrower notes that the contribution of approximately $100,000,000 in IPO proceeds toward the Cimarron Solar project is expected to materially enhance the Borrower's financial position, improve its debt-to-equity ratio in the context of the project financing, and increase the likelihood of the Borrower's full compliance with all financial covenants under the Credit Agreement through the Conversion Date and beyond.

6. Impact on the Credit Agreement and the Borrower

The Borrower has carefully reviewed the terms and conditions of the Credit Agreement in connection with the proposed IPO and wishes to advise the Administrative Agent of the following:

No Event of Default or Covenant Breach. The Borrower believes that the consummation of the IPO will not constitute an Event of Default, a breach of any affirmative or negative covenant, a violation of any representation or warranty, or a default (whether or not an Event of Default) under the Credit Agreement. The IPO involves the issuance and sale of shares of Common Stock of CBR, the indirect ultimate parent entity of the Borrower, and does not involve any direct or indirect transfer, disposition, pledge, or encumbrance of the equity interests of the Borrower or any of its direct parent entities.

No Change in Borrower Ownership. The IPO does not involve a direct change in ownership of the Borrower. Following the IPO, Cimarron Solar Development LLC will continue to be 100% directly owned by Calloway-Briggs Operating Company LLC, and the full chain of indirect ownership through CBR Holdings LLC and CBR will remain intact. No interests in the Borrower are being offered or sold in connection with the IPO.

Change-of-Control Provisions. The Borrower acknowledges that the IPO will result in a change in the indirect ultimate parent entity's ownership structure, inasmuch as CBR will transition from a privately held corporation to a publicly traded company listed on the NYSE. However, the direct ownership chain below CBR will remain entirely unchanged. Based on the Borrower's review of the "Change of Control" definition set forth in Section 1.01 of the Credit Agreement, the Borrower's analysis is that the IPO does not trigger the Change of Control provisions of the Credit Agreement, as no person or group (other than existing holders and their affiliates) will acquire a controlling interest in CBR as a result of the Offering, and the direct and indirect ownership of the Borrower will remain unchanged. To the extent, however, that the Administrative Agent or any Lender takes a different view, this notice is intended to serve as the required notification under the applicable provisions of the Credit Agreement, and the Borrower welcomes the opportunity to discuss the matter with the Administrative Agent.

No Consent or Waiver Sought. The Borrower is not seeking a consent, waiver, or amendment of the Credit Agreement in connection with this notice. This letter is being delivered solely in compliance with the information and notice covenants set forth in Section 6.02 of the Credit Agreement.

Companion Notices. For the Administrative Agent's information, the Borrower notes the following companion communications being made in connection with the IPO:

(a) A separate consent request letter has been delivered by CBR to Veltrano National Bank, as Administrative Agent under CBR's corporate-level Term Loan B facility, requesting the consent and waiver of certain covenants in connection with the IPO. That consent request relates to the corporate-level credit facility and is not the subject of this notice.

(b) A separate notice letter substantially similar to this letter has also been delivered by Mesquite Wind Development LLC (a sister subsidiary of the Borrower) to Prairie Commercial Bank, N.A., in its capacity as Administrative Agent under the $165,000,000 construction-to-term credit facility for the Mesquite Wind project.

7. Cimarron Solar Project Status Update

The Borrower takes this opportunity to provide the Administrative Agent with a brief status update on the Cimarron Solar project (the "Project"), as follows:

As of the date of this letter, the Project remains on schedule and within budget. All material permits and governmental approvals necessary for the continued construction and operation of the Project have been obtained or are expected to be obtained in the ordinary course. Equipment procurement and delivery remain on track, and no material supply-chain disruptions have been experienced to date. The contribution of approximately $100,000,000 in IPO proceeds designated for the Project is expected to further enhance the Borrower's financial position, reduce the Borrower's aggregate draw requirements under the Credit Agreement, and support the Project's continued progress toward achievement of COD in the first quarter of 2023 and the timely conversion of the facility by March 2025.

8. Key Officers and Contacts

The following individuals are available to respond to any questions the Administrative Agent or the Lenders may have in connection with this notice or the proposed IPO:

Calloway-Briggs Renewables Inc.:

Priya Anand Senior Vice President, Finance & Treasurer Calloway-Briggs Renewables Inc. 4200 Ridgeline Parkway, Suite 1100 Austin, TX 78746 Telephone: (512) 555-4820

Email: panand@calloway-briggs.com

Sandra Haverford General Counsel & Corporate Secretary Calloway-Briggs Renewables Inc. 4200 Ridgeline Parkway, Suite 1100 Austin, TX 78746 Telephone: (512) 555-4835

Email: shaverford@calloway-briggs.com

Issuer's Outside Counsel:

Calderwood & Harkness LLP 599 Lexington Avenue New York, NY 10022

Attention: Jennifer Kwon, Partner

Telephone: (212) 555-7100

Email: jkwon@calderwoodharkness.com

Brendan Walsh, Associate Telephone: (212) 555-7142

Email: bwalsh@calderwoodharkness.com

C&H Matter No. 1015-00001

9. Reservation of Rights

The Borrower expressly reserves all of its rights, remedies, claims, and defenses under the Credit Agreement and under applicable law. This notice is being delivered solely for informational purposes pursuant to the applicable notice and information covenants set forth in Section 6.02 of the Credit Agreement and does not constitute, and shall not be construed as, (a) an admission by the Borrower of any obligation, liability, or default under the Credit Agreement, (b) a waiver, release, or modification of any right, remedy, claim, or defense of the Borrower under the Credit Agreement or under applicable law, or (c) a consent or agreement by the Borrower to any amendment, waiver, modification, or supplement of the Credit Agreement or any other Loan Document.

Nothing in this letter shall be deemed to create any obligation on the part of the Borrower beyond the obligations expressly set forth in the Credit Agreement. The Borrower's delivery of this notice shall not be construed as establishing any course of dealing or any precedent with respect to the provision of notices or information in connection with future transactions or events, except as may be expressly required by the terms of the Credit Agreement.

10. Request for Confirmation of Receipt

The Borrower respectfully requests that Prairie Commercial Bank, N.A., in its capacity as Administrative Agent, confirm receipt of this notice at its earliest convenience. Confirmation may be directed to:

Priya Anand, SVP, Finance & Treasurer Calloway-Briggs Renewables Inc. Telephone: (512) 555-4820

Email: panand@calloway-briggs.com

Brendan Walsh, Associate Calderwood & Harkness LLP Telephone: (212) 555-7142

Email: bwalsh@calderwoodharkness.com

We appreciate the Administrative Agent's continued cooperation in connection with the Credit Agreement and the Cimarron Solar project. Should you have any questions regarding the matters described in this notice or require any additional information, please do not hesitate to contact the undersigned or the individuals identified in Section 8 above.

Very truly yours,

CIMARRON SOLAR DEVELOPMENT LLC

By: Calloway-Briggs Operating Company LLC,

its Sole Member

By: ________

Name: Priya Anand

Title: Senior Vice President, Finance & Treasurer

(Authorized Signatory)

Date: ________

cc:

Sandra Haverford, General Counsel & Corporate Secretary, Calloway-Briggs Renewables Inc.

Priya Anand, SVP, Finance & Treasurer, Calloway-Briggs Renewables Inc.

Jennifer Kwon, Partner, Calderwood & Harkness LLP

Brendan Walsh, Associate, Calderwood & Harkness LLP

Enclosures: None.

Note: No enclosures are included with this informational notice. Copies of CBR's draft registration statement on Form S-1 (confidentially submitted to the SEC pursuant to the JOBS Act) are available upon request, subject to applicable confidentiality restrictions and the provisions of the JOBS Act governing confidential treatment of draft registration statements.

DRAFT — PRIVILEGED AND CONFIDENTIAL Prepared by Calderwood & Harkness LLP C&H Matter No. 1015-00001

Stockholder	Approximate Shares (Fully Diluted)	Approximate % Ownership
Pinnacle Vista Capital Partners III, LP	62,000,000	62.0%
Co-Founders (Garrett Calloway and Elaine Briggs) and Management	24,000,000	24.0%
Other Pre-IPO Holders (earlier-stage investors and employees)	14,000,000	14.0%
Total	100,000,000	100.0%
Parameter	Detail
Technology	Solar Photovoltaic (PV)
Nameplate Capacity	350 MW (DC)
Location	Doña Ana County, New Mexico
Construction Status	Under Construction
Expected Commercial Operation Date (COD)	Q1 2023
Credit Agreement Facility Size	$143,000,000
Facility Type	Construction-to-Term
Conversion Date	March 2025

PRIVILEGED AND CONFIDENTIAL
CIMARRON SOLAR DEVELOPMENT LLC a New Mexico limited liability company
a wholly owned subsidiary of Calloway-Briggs Operating Company LLC, itself a wholly owned subsidiary of CBR Holdings LLC, itself a wholly owned subsidiary of Calloway-Briggs Renewables Inc.
c/o Calloway-Briggs Renewables Inc. 4200 Ridgeline Parkway, Suite 1100 Austin, TX 78746
June 3, 2022
Prairie Commercial Bank, N.A. 2200 Ross Avenue, Suite 3600 Dallas, TX 75201
Attention: Brent Hollowell, Senior Vice President, Project Finance
Via Email and Overnight Courier
Re: Notice Pursuant to Section 6.02(a)(vi) of the Credit Agreement, dated as of September 15, 2021 (as amended, restated, supplemented, or otherwise modified from time to time, the "Credit Agreement"), by and among Cimarron Solar Development LLC, as Borrower, the Lenders from time to time party thereto, and Prairie Commercial Bank, N.A., as Administrative Agent and a Lender — $143,000,000 Construction-to-Term Credit Facility (Conversion Date: March 2025) — Proposed Initial Public Offering of Common Stock of Calloway-Briggs Renewables Inc.
Dear Mr. Hollowell:
1. Introduction and Purpose of Notice
Cimarron Solar Development LLC, a New Mexico limited liability company (the "Borrower"), hereby delivers this letter as formal notice to Prairie Commercial Bank, N.A. ("Prairie Commercial" or the "Administrative Agent"), in its capacity as Administrative Agent under the Credit Agreement referenced above. Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the Credit Agreement.
This notice is being delivered pursuant to Section 6.02(a)(vi) of the Credit Agreement, which requires the Borrower to promptly notify the Administrative Agent of certain material events, transactions, or changes that may affect the Borrower, its assets, or its direct or indirect parent entities, and that could reasonably be expected to be of material interest to the Administrative Agent or the Lenders. The Borrower is also delivering this notice in satisfaction of any applicable requirements under Section 6.02(b) of the Credit Agreement regarding the provision of information concerning material corporate events affecting the organizational structure of the Borrower's parent entities.
The material event that is the subject of this notice is the proposed initial public offering (the "IPO" or the "Offering") of common stock of Calloway-Briggs Renewables Inc. ("CBR"), a Delaware corporation and the indirect parent company of the Borrower, on the New York Stock Exchange (the "NYSE"). A detailed description of the Offering, the organizational structure of the Borrower and its parent entities, the expected use of proceeds, and the anticipated impact (if any) on the Credit Agreement and the Borrower are set forth below.
2. Description of the Proposed Transaction
CBR proposes to conduct an initial public offering of shares of its common stock, par value $0.01 per share (the "Common Stock"), on the NYSE under the proposed ticker symbol "CBRI." The following is a summary of the material terms of the Offering as currently contemplated:
Aggregate Offering Size. The proposed aggregate offering size is approximately $600,000,000, inclusive of the full exercise of the underwriters' overallotment option (the "Greenshoe Option"). The base offering (before giving effect to the Greenshoe Option) is expected to be approximately $521,700,000, with the Greenshoe Option providing for the sale of additional shares representing approximately $78,300,000 (approximately 15% of the base offering).
Assumed Offering Price. The assumed midpoint offering price is $22.00 per share. The final offering price will be determined through the book-building process and will be subject to, among other things, prevailing market conditions, investor demand, and the agreement of CBR and the underwriters at the time of pricing.
Shares Offered. Based on the assumed midpoint offering price of $22.00 per share and assuming full exercise of the Greenshoe Option, the total number of shares of Common Stock to be offered and sold in the Offering is approximately 27,272,727 shares.
Primary and Secondary Shares. The Offering will consist of a combination of primary shares (newly issued shares sold by CBR) and secondary shares (existing shares sold by Pinnacle Vista Capital Partners III, LP ("Pinnacle Vista"), the majority pre-IPO stockholder of CBR), as follows:
(a) Primary Shares: Approximately 16,895,455 shares of Common Stock to be sold by CBR, generating estimated net proceeds to CBR of approximately $371,700,000 (before underwriting discounts, commissions, and offering expenses); and
(b) Secondary Shares: Approximately 6,818,182 shares of Common Stock to be sold by Pinnacle Vista, generating estimated gross proceeds to Pinnacle Vista of approximately $150,000,000. CBR will not receive any of the proceeds from the sale of secondary shares by Pinnacle Vista.
Underwriters. The following investment banks have been engaged as underwriters for the Offering:
Joint Book-Running Managers:
•  Hargrove Keating & Co. (Lead-Left Book-Running Manager)
•  Linden Pratt Securities LLC
•  Graymont Brothers Inc.
Co-Managers:
•  Barfield Stuart & Co.
•  Crane Whitley Capital LLC
Registration Statement. CBR has confidentially submitted a draft registration statement on Form S-1 (SEC CIK No. 0001948372) to the Securities and Exchange Commission (the "SEC") pursuant to the provisions of the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"). CBR has received oral clearance from the SEC staff with respect to the draft registration statement, subject to the filing of a pricing amendment reflecting the final offering terms. CBR expects to file the public version of the registration statement shortly prior to the commencement of the roadshow for the Offering.
Conditions to Closing. The completion of the Offering remains subject to, among other things, prevailing market conditions, the final determination of the offering price, final approval by the Board of Directors of CBR, and execution of the underwriting agreement among CBR, Pinnacle Vista, and the underwriters. There can be no assurance that the Offering will be completed on the terms described herein, or at all.
3. Organizational and Corporate Structure
The following describes the corporate chain of ownership between CBR and the Borrower, from the top of the organizational structure downward:
(a) Calloway-Briggs Renewables Inc. — a corporation organized and existing under the laws of the State of Delaware, which is the proposed issuer of Common Stock in the IPO and the ultimate indirect parent entity of the Borrower;
(b) CBR Holdings LLC — a limited liability company organized and existing under the laws of the State of Delaware, which is a direct, wholly owned subsidiary of CBR;
(c) Calloway-Briggs Operating Company LLC — a limited liability company organized and existing under the laws of the State of Texas, which is a direct, wholly owned subsidiary of CBR Holdings LLC; and
(d) Cimarron Solar Development LLC — a limited liability company organized and existing under the laws of the State of New Mexico, which is a direct, wholly owned subsidiary of Calloway-Briggs Operating Company LLC, and which is the Borrower under the Credit Agreement.
The Borrower wishes to emphasize that, following the consummation of the IPO, the direct and indirect ownership chain between CBR and the Borrower will remain unchanged. CBR will continue to indirectly own 100% of the equity interests in the Borrower, through the same chain of wholly owned intermediate holding companies described above. The IPO will not result in any transfer, disposition, or encumbrance of the equity interests in the Borrower, any of its intermediate parent entities, or any of the assets of the Borrower.
For the Administrative Agent's records, the following additional information regarding CBR is provided: CBR is incorporated in the State of Delaware, with its principal executive offices located at 4200 Ridgeline Parkway, Suite 1100, Austin, TX 78746. CBR's registered agent in the State of Delaware is Capitol Statutory Services, Inc., 1209 Orange Street, Wilmington, DE 19801. CBR's Employer Identification Number is 83-4027615.
4. Pre-IPO and Post-IPO Ownership Structure of CBR
Set forth below is a summary of the ownership structure of CBR on a pre-IPO and post-IPO basis.
Pre-IPO Ownership of CBR. Immediately prior to the IPO (and after giving effect to a reclassification of CBR's outstanding equity securities into a single class of Common Stock), the fully diluted outstanding shares of Common Stock of CBR are expected to total 100,000,000 shares, held as follows:
Post-IPO Ownership of CBR — Base Offering (No Overallotment Exercise). Following the consummation of the IPO on the basis of the base offering (i.e., assuming no exercise of the Greenshoe Option), the total shares of Common Stock outstanding are expected to be approximately 123,713,636, comprised of the 100,000,000 pre-IPO shares plus approximately 23,713,636 newly issued primary shares. In the base offering scenario, Pinnacle Vista will sell approximately 6,818,182 secondary shares but will retain a significant ownership position in CBR.
Post-IPO Ownership of CBR — Full Overallotment Exercise. Assuming the full exercise of the Greenshoe Option, the total shares of Common Stock outstanding following the IPO are expected to be approximately 127,272,727. The additional shares issued or sold upon exercise of the Greenshoe Option would further dilute the pre-IPO holders' percentage ownership but would not affect the Borrower's position under the Credit Agreement. Pinnacle Vista will remain a significant stockholder of CBR following the IPO in either scenario and is expected to be subject to customary lock-up restrictions for a period of 180 days following the date of the final prospectus.
Information Regarding Pinnacle Vista. For the Administrative Agent's reference, Pinnacle Vista Capital Partners III, LP is a Delaware limited partnership. Its general partner is Pinnacle Vista Capital Management LLC, with principal offices at 900 Park Avenue, 38th Floor, New York, NY 10021. Pinnacle Vista is managed by Hugh Pemberton and Diane Kovac, Co-Founders and Managing Partners of Pinnacle Vista Capital Management LLC.
5. Use of Proceeds
CBR intends to use the estimated net proceeds from the sale of primary shares in the Offering as follows:
(a) Repayment of Corporate Indebtedness. Approximately $200,000,000 of the net proceeds will be used to repay a portion of CBR's outstanding indebtedness under its Term Loan B facility, for which Veltrano National Bank serves as Administrative Agent. The repayment of such indebtedness will reduce the overall leverage of CBR and its consolidated subsidiaries, including the Borrower.
(b) Funding of the Cimarron Solar Project. Approximately $100,000,000 of the net proceeds will be contributed, through the intermediate holding company chain described in Section 3 above, to the Borrower to fund the ongoing construction of the Cimarron Solar project — that is, the project that is financed in part by the Credit Agreement. The Borrower expects that this equity contribution will reduce its draw requirements under the Credit Agreement and further support the project's timely completion by the expected commercial operation date ("COD") of the first quarter of 2023 and the successful conversion of the construction-to-term facility by the Conversion Date of March 2025.
(c) General Corporate Purposes. Approximately $71,700,000 of the net proceeds will be used for general corporate purposes, which may include the development of additional renewable energy projects, working capital, and other operational needs of CBR and its subsidiaries.
The Borrower notes that the contribution of approximately $100,000,000 in IPO proceeds toward the Cimarron Solar project is expected to materially enhance the Borrower's financial position, improve its debt-to-equity ratio in the context of the project financing, and increase the likelihood of the Borrower's full compliance with all financial covenants under the Credit Agreement through the Conversion Date and beyond.
6. Impact on the Credit Agreement and the Borrower
The Borrower has carefully reviewed the terms and conditions of the Credit Agreement in connection with the proposed IPO and wishes to advise the Administrative Agent of the following:
No Event of Default or Covenant Breach. The Borrower believes that the consummation of the IPO will not constitute an Event of Default, a breach of any affirmative or negative covenant, a violation of any representation or warranty, or a default (whether or not an Event of Default) under the Credit Agreement. The IPO involves the issuance and sale of shares of Common Stock of CBR, the indirect ultimate parent entity of the Borrower, and does not involve any direct or indirect transfer, disposition, pledge, or encumbrance of the equity interests of the Borrower or any of its direct parent entities.
No Change in Borrower Ownership. The IPO does not involve a direct change in ownership of the Borrower. Following the IPO, Cimarron Solar Development LLC will continue to be 100% directly owned by Calloway-Briggs Operating Company LLC, and the full chain of indirect ownership through CBR Holdings LLC and CBR will remain intact. No interests in the Borrower are being offered or sold in connection with the IPO.
Change-of-Control Provisions. The Borrower acknowledges that the IPO will result in a change in the indirect ultimate parent entity's ownership structure, inasmuch as CBR will transition from a privately held corporation to a publicly traded company listed on the NYSE. However, the direct ownership chain below CBR will remain entirely unchanged. Based on the Borrower's review of the "Change of Control" definition set forth in Section 1.01 of the Credit Agreement, the Borrower's analysis is that the IPO does not trigger the Change of Control provisions of the Credit Agreement, as no person or group (other than existing holders and their affiliates) will acquire a controlling interest in CBR as a result of the Offering, and the direct and indirect ownership of the Borrower will remain unchanged. To the extent, however, that the Administrative Agent or any Lender takes a different view, this notice is intended to serve as the required notification under the applicable provisions of the Credit Agreement, and the Borrower welcomes the opportunity to discuss the matter with the Administrative Agent.
No Consent or Waiver Sought. The Borrower is not seeking a consent, waiver, or amendment of the Credit Agreement in connection with this notice. This letter is being delivered solely in compliance with the information and notice covenants set forth in Section 6.02 of the Credit Agreement.
Companion Notices. For the Administrative Agent's information, the Borrower notes the following companion communications being made in connection with the IPO:
(a) A separate consent request letter has been delivered by CBR to Veltrano National Bank, as Administrative Agent under CBR's corporate-level Term Loan B facility, requesting the consent and waiver of certain covenants in connection with the IPO. That consent request relates to the corporate-level credit facility and is not the subject of this notice.
(b) A separate notice letter substantially similar to this letter has also been delivered by Mesquite Wind Development LLC (a sister subsidiary of the Borrower) to Prairie Commercial Bank, N.A., in its capacity as Administrative Agent under the $165,000,000 construction-to-term credit facility for the Mesquite Wind project.
7. Cimarron Solar Project Status Update
The Borrower takes this opportunity to provide the Administrative Agent with a brief status update on the Cimarron Solar project (the "Project"), as follows:
As of the date of this letter, the Project remains on schedule and within budget. All material permits and governmental approvals necessary for the continued construction and operation of the Project have been obtained or are expected to be obtained in the ordinary course. Equipment procurement and delivery remain on track, and no material supply-chain disruptions have been experienced to date. The contribution of approximately $100,000,000 in IPO proceeds designated for the Project is expected to further enhance the Borrower's financial position, reduce the Borrower's aggregate draw requirements under the Credit Agreement, and support the Project's continued progress toward achievement of COD in the first quarter of 2023 and the timely conversion of the facility by March 2025.
8. Key Officers and Contacts
The following individuals are available to respond to any questions the Administrative Agent or the Lenders may have in connection with this notice or the proposed IPO:
Calloway-Briggs Renewables Inc.:
Priya Anand Senior Vice President, Finance & Treasurer Calloway-Briggs Renewables Inc. 4200 Ridgeline Parkway, Suite 1100 Austin, TX 78746 Telephone: (512) 555-4820
Email: panand@calloway-briggs.com
Sandra Haverford General Counsel & Corporate Secretary Calloway-Briggs Renewables Inc. 4200 Ridgeline Parkway, Suite 1100 Austin, TX 78746 Telephone: (512) 555-4835
Email: shaverford@calloway-briggs.com
Issuer's Outside Counsel:
Calderwood & Harkness LLP 599 Lexington Avenue New York, NY 10022
Attention: Jennifer Kwon, Partner
Telephone: (212) 555-7100
Email: jkwon@calderwoodharkness.com
Brendan Walsh, Associate Telephone: (212) 555-7142
Email: bwalsh@calderwoodharkness.com
C&H Matter No. 1015-00001
9. Reservation of Rights
The Borrower expressly reserves all of its rights, remedies, claims, and defenses under the Credit Agreement and under applicable law. This notice is being delivered solely for informational purposes pursuant to the applicable notice and information covenants set forth in Section 6.02 of the Credit Agreement and does not constitute, and shall not be construed as, (a) an admission by the Borrower of any obligation, liability, or default under the Credit Agreement, (b) a waiver, release, or modification of any right, remedy, claim, or defense of the Borrower under the Credit Agreement or under applicable law, or (c) a consent or agreement by the Borrower to any amendment, waiver, modification, or supplement of the Credit Agreement or any other Loan Document.
Nothing in this letter shall be deemed to create any obligation on the part of the Borrower beyond the obligations expressly set forth in the Credit Agreement. The Borrower's delivery of this notice shall not be construed as establishing any course of dealing or any precedent with respect to the provision of notices or information in connection with future transactions or events, except as may be expressly required by the terms of the Credit Agreement.
10. Request for Confirmation of Receipt
The Borrower respectfully requests that Prairie Commercial Bank, N.A., in its capacity as Administrative Agent, confirm receipt of this notice at its earliest convenience. Confirmation may be directed to:
Priya Anand, SVP, Finance & Treasurer Calloway-Briggs Renewables Inc. Telephone: (512) 555-4820
Email: panand@calloway-briggs.com
or
Brendan Walsh, Associate Calderwood & Harkness LLP Telephone: (212) 555-7142
Email: bwalsh@calderwoodharkness.com
We appreciate the Administrative Agent's continued cooperation in connection with the Credit Agreement and the Cimarron Solar project. Should you have any questions regarding the matters described in this notice or require any additional information, please do not hesitate to contact the undersigned or the individuals identified in Section 8 above.
Very truly yours,
CIMARRON SOLAR DEVELOPMENT LLC
By: Calloway-Briggs Operating Company LLC,
its Sole Member
By: ________
Name: Priya Anand
Title: Senior Vice President, Finance & Treasurer
(Authorized Signatory)
Date: ________
cc:
Sandra Haverford, General Counsel & Corporate Secretary, Calloway-Briggs Renewables Inc.
Priya Anand, SVP, Finance & Treasurer, Calloway-Briggs Renewables Inc.
Jennifer Kwon, Partner, Calderwood & Harkness LLP
Brendan Walsh, Associate, Calderwood & Harkness LLP
Enclosures: None.
Note: No enclosures are included with this informational notice. Copies of CBR's draft registration statement on Form S-1 (confidentially submitted to the SEC pursuant to the JOBS Act) are available upon request, subject to applicable confidentiality restrictions and the provisions of the JOBS Act governing confidential treatment of draft registration statements.
DRAFT — PRIVILEGED AND CONFIDENTIAL Prepared by Calderwood & Harkness LLP C&H Matter No. 1015-00001
Stockholder | Approximate Shares (Fully Diluted) | Approximate % Ownership
Pinnacle Vista Capital Partners III, LP | 62,000,000 | 62.0%
Co-Founders (Garrett Calloway and Elaine Briggs) and Management | 24,000,000 | 24.0%
Other Pre-IPO Holders (earlier-stage investors and employees) | 14,000,000 | 14.0%
Total | 100,000,000 | 100.0%
Parameter | Detail
Technology | Solar Photovoltaic (PV)
Nameplate Capacity | 350 MW (DC)
Location | Doña Ana County, New Mexico
Construction Status | Under Construction
Expected Commercial Operation Date (COD) | Q1 2023
Credit Agreement Facility Size | $143,000,000
Facility Type | Construction-to-Term
Conversion Date | March 2025

PRIVILEGED AND CONFIDENTIAL

CIMARRON SOLAR DEVELOPMENT LLC

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