1015-00001 · Graymont Brothers Inc · Transaction Documents/Underwriting

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PRIVILEGED AND CONFIDENTIAL

CALDERWOOD & HARKNESS LLP 599 Lexington Avenue New York, New York 10022

Telephone: (212) 558-4000 Facsimile: (212) 558-3588 www.calderwoodharkness.com

DRAFT — SUBJECT TO COMPLETION

C&H Matter No. 1015-00001

[●], 2022

To the Several Underwriters Named in Schedule I to the Underwriting Agreement Referred to Below, care of:

Hargrove Keating & Co. 383 Madison Place New York, New York 10017

Attention: Oliver Marchetti, Managing Director, Equity Capital Markets

Linden Pratt Securities LLC 200 Vesey Street, 40th Floor New York, New York 10281

Attention: Rebecca Innes, Managing Director, Equity Capital Markets

Graymont Brothers Inc. 555 California Street, Suite 3200 San Francisco, California 94104

Attention: Kenneth Sato, Managing Director, Equity Capital Markets

Barfield Stuart & Co. 101 Federal Street Boston, Massachusetts 02110

Crane Whitley Capital LLC 600 Travis Street, Suite 4400 Houston, Texas 77002

Re: Initial Public Offering of Common Stock of Calloway-Briggs Renewables Inc. (proposed NYSE ticker symbol: "CBRI")

Ladies and Gentlemen:

I. Introduction

We have acted as counsel to Calloway-Briggs Renewables Inc., a Delaware corporation (the "Company" or "CBR"), in connection with the proposed initial public offering (the "Offering") of shares of common stock, par value $0.01 per share (the "Common Stock"), of the Company. This letter is furnished to you in connection with (a) the Registration Statement on Form S-1 (File No. 333-[●]; SEC CIK 0001948372) filed by the Company under the Securities Act of 1933, as amended (the "Securities Act"), with the Securities and Exchange Commission (the "Commission"), including the confidential draft registration statement initially submitted to the Commission on April 11, 2022 (EDGAR Accession No. 0001948372-22-000001), as amended by Amendment No. 1 filed with the Commission on May 20, 2022 (EDGAR Accession No. 0001948372-22-000002) and Amendment No. 2 filed with the Commission on June 10, 2022 (EDGAR Accession No. 0001948372-22-000003), and as further amended by the amendment filed on [●], 2022 pursuant to which the Commission declared the Registration Statement effective (collectively, the "Registration Statement"); and (b) the final prospectus dated [●], 2022, filed with the Commission pursuant to Rule 424(b) under the Securities Act (the "Prospectus"). The Registration Statement and the Prospectus are referred to herein collectively as the "Disclosure Documents."

This letter is delivered to you pursuant to Section [●] of the Underwriting Agreement dated [●], 2022 (the "Underwriting Agreement") among the Company, Pinnacle Vista Capital Partners III, LP, a Delaware limited partnership (the "Selling Stockholder"), and the several underwriters named in Schedule I thereto (the "Underwriters"), for whom Hargrove Keating & Co. is acting as representative (the "Representative"), as a condition to the obligations of the Underwriters at the closing of the Offering (the "Closing"). Capitalized terms used but not defined herein have the meanings ascribed to them in the Underwriting Agreement.

II. Scope of Engagement and Participation

In connection with the preparation of the Registration Statement and the Prospectus, and in rendering the negative assurance set forth below, we have, among other things:

(a) participated in conferences and discussions with officers and employees of the Company, including Garrett Calloway, Chairman of the Board of Directors and Chief Executive Officer; Elaine Briggs, President, Development; Marcus Yoon, Chief Financial Officer; Sandra Haverford, General Counsel and Corporate Secretary; Priya Anand, Senior Vice President, Finance and Treasurer; and other members of the Company's senior management and operating personnel regarding the business, operations, financial condition, and prospects of the Company and regarding the contents and accuracy of the Disclosure Documents;

(b) participated in conferences and discussions with representatives of the Selling Stockholder, Pinnacle Vista Capital Partners III, LP, and its counsel, Whitfield Archer & Doss LLP, regarding the Selling Stockholder's participation in the Offering and the information concerning the Selling Stockholder set forth in the Disclosure Documents;

(c) participated in conferences and discussions with representatives of the Underwriters and counsel to the Underwriters, Prescott, Danforth & Yee LLP, regarding the terms of the Offering, the structure of the Underwriting Agreement, and the contents and accuracy of the Disclosure Documents;

(d) participated in conferences and discussions with representatives of the Company's independent registered public accounting firm, Ashford & Pemberton LLP (Gregory Sondheim, Lead Engagement Partner), regarding the Company's financial statements, related financial disclosures, and the audit procedures performed by Ashford & Pemberton LLP in connection with the financial statements included in the Registration Statement;

(e) participated in conferences and discussions with representatives of the Company's tax advisor, Kessler McBride & Associates LLP, regarding certain tax matters relating to the Company's tax-equity partnership structures and the related disclosures in the Disclosure Documents;

(f) reviewed the confidential draft registration statement on Form S-1 (the "DRS-1") initially submitted to the Commission on April 11, 2022, and all subsequent amendments thereto, including Amendment No. 1 filed May 20, 2022, Amendment No. 2 filed June 10, 2022, and the final pre-effective amendment filed on [●], 2022;

(g) reviewed the Commission's comment letters to the Company dated May 6, 2022 (containing 18 comments, constituting the first round of Commission review) and June 3, 2022 (containing 7 comments, constituting the second round of Commission review), and participated in the preparation of the Company's response letters dated May 20, 2022 and June 10, 2022, respectively;

(h) reviewed successive drafts of the Prospectus, including the preliminary prospectus and the final Prospectus, and participated in the drafting, revision, and review process with respect thereto;

(i) reviewed certain corporate records, documents, and certificates furnished to us by the Company, including the Company's amended and restated certificate of incorporation and amended and restated bylaws, each as proposed to be in effect upon the closing of the Offering, minutes of meetings and records of actions by written consent of the Board of Directors and committees thereof, and corporate organizational documents and records;

(j) conducted legal due diligence in connection with the Offering across the following workstreams: corporate organization and governance, regulatory and governmental permitting, environmental compliance, material contracts and commercial agreements, pending and threatened litigation, employment and labor matters, insurance coverage, outstanding indebtedness and financing arrangements, intellectual property, real property (including land leases, easements, and rights-of-way), and tax matters; and

(k) made inquiries of certain officers and employees of the Company regarding the accuracy and completeness of the information set forth in the Disclosure Documents and whether any events have occurred since the date of the Prospectus that would require amendment or supplementation of the Disclosure Documents.

We did not participate in the preparation of the financial statements, the notes thereto, or the schedules or other financial, statistical, or accounting data included in the Disclosure Documents, and we have not been asked to, and we have not undertaken to, independently verify the accuracy or completeness of such financial information. Our role in the preparation of the Disclosure Documents was limited to rendering legal advice and assisting in the preparation and review of the non-financial portions of the Disclosure Documents.

III. Limitations and Qualifications

A. Nature of Negative Assurance

This letter is not an opinion of law. It is a letter of negative assurance, sometimes referred to as a "10b-5 letter" or a "negative assurance letter," based on the procedures described herein. The negative assurance set forth in this letter is given in reliance upon, and is subject to, the limitations and qualifications set forth in this Section III. No inference should be drawn from the fact that we are furnishing this letter that we have independently verified or are making any representation or warranty, express or implied, regarding the accuracy, completeness, or fairness of the information contained in the Disclosure Documents.

B. Scope Limitations

We have not independently verified the accuracy, completeness, or fairness of the statements contained in the Disclosure Documents, and we do not assume any responsibility for such accuracy, completeness, or fairness. Our role in the preparation of the Registration Statement and the Prospectus was limited to acting as legal counsel to the Company, and such role did not include conducting an audit or review of the Company's financial statements or financial data, performing any procedures with respect to the Company's accounting records, or undertaking any independent investigation of the factual matters set forth in the Disclosure Documents beyond the procedures described in Section II above.

In furnishing this letter, we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals, the conformity to originals of all documents submitted to us as copies, and the accuracy and completeness of all corporate records, certificates, documents, and other information provided to us by the Company and its representatives. We have also assumed that the individuals who participated in conferences and discussions with us and who provided information to us were competent and duly authorized to do so on behalf of the Company and, where applicable, on behalf of the Selling Stockholder.

C. Financial Statements and Financial Data Carve-Out

The negative assurance expressed herein does not extend to, and we express no view with respect to:

(i) the audited consolidated financial statements of the Company and its subsidiaries for the fiscal years ended December 31, 2019, December 31, 2020, and December 31, 2021, and the unaudited interim consolidated financial data for the quarter ended March 31, 2022, in each case included in the Registration Statement and the Prospectus, including the notes and schedules thereto;

(ii) any other financial, statistical, accounting, or numerical data (including tabular data, per-share data, and ratios) derived from or based upon the Company's accounting records or financial statements, or included in the Disclosure Documents;

(iii) the report of Ashford & Pemberton LLP, the Company's independent registered public accounting firm, included in the Registration Statement;

(iv) any pro forma financial information, financial projections, or forward-looking financial data included in the Disclosure Documents; and

(v) information and data relating to the HLBV (Hypothetical-Liquidation-at-Book-Value) methodology and related accounting for tax-equity partnerships, except to the extent of our review of the narrative disclosure thereof in the Disclosure Documents, which review was conducted in coordination with Ashford & Pemberton LLP and Kessler McBride & Associates LLP and was limited to the non-financial, narrative aspects of such disclosure.

D. Other Carve-Outs

The negative assurance expressed herein also does not extend to, and we express no view with respect to:

(i) information contained in the Prospectus under the caption "Experts" regarding Ashford & Pemberton LLP and Greenridge Environmental Sciences LLC, which information was furnished by or on behalf of such parties;

(ii) information and statements of fact relating to parties other than the Company that were furnished by or on behalf of such parties for inclusion in the Disclosure Documents, including (A) information regarding the Underwriters and the terms of the underwriting arrangements set forth under the caption "Underwriting" in the Prospectus, and (B) information regarding the Selling Stockholder, Pinnacle Vista Capital Partners III, LP, to the extent such information was furnished by or on behalf of the Selling Stockholder or its counsel, Whitfield Archer & Doss LLP.

IV. Negative Assurance

Based on and subject to the foregoing (including the limitations and qualifications set forth in Section III above), and having regard to the nature and limitations of our engagement and the procedures undertaken by us as described in Section II above, we advise you that:

No facts have come to the attention of the attorneys in this firm who have participated in the preparation of the Registration Statement and the Prospectus and in the Offering (including Jennifer Kwon, Partner; Theodore Langston, Partner; Brendan Walsh, Special Counsel; Natasha Forbes, Senior Associate; and Leonard Cross, Associate) that cause such attorneys to believe that:

(a) the Registration Statement (including the information deemed to be part of the Registration Statement at the time of effectiveness pursuant to Rule 430A under the Securities Act), as of the date and time of its effectiveness under the Securities Act, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading (within the meaning of Section 11 of the Securities Act); or

(b) the Prospectus (as amended or supplemented, if applicable), as of its date and as of the date hereof (the Closing Date), contained or contains any untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading (within the meaning of Section 12(a)(2) of the Securities Act).

V. Description of Key Disclosure Documents Reviewed

In connection with the preparation of this letter, we reviewed, among other things, the following principal sections and disclosures of the Registration Statement and the Prospectus:

(a) Prospectus Summary. The business overview section describing the Company's operations as a utility-scale renewable energy company, and the summary of the terms of the Offering, including an aggregate offering of approximately $600,000,000 (including the 15% overallotment option); a midpoint initial public offering price of $22.00 per share; 23,713,636 shares offered in the base offering (comprised of shares offered by the Company and shares offered by the Selling Stockholder); 27,272,727 total shares offered assuming full exercise of the underwriters' overallotment option; and approximately 123,713,636 shares of Common Stock expected to be outstanding immediately after the Offering (or 127,272,727 shares assuming full exercise of the overallotment option).

(b) Risk Factors. The risk factor disclosures, including risks relating to the renewable energy industry generally; regulatory and permitting risks applicable to the Company's solar, wind, and battery storage projects; risks relating to the Company's reliance on tax-equity financing structures and the availability and monetization of investment tax credits (ITCs) and production tax credits (PTCs) under the Internal Revenue Code; leverage risks associated with the Company's indebtedness; and controlled-company risks arising from Pinnacle Vista Capital Partners III, LP's expected continued ownership of a majority of the Company's outstanding Common Stock following the Offering.

(c) Use of Proceeds. The intended use of the net proceeds of the Offering, including approximately $200 million to repay in full the outstanding Term Loan B facility with Veltrano National Bank, N.A.; approximately $100 million to fund construction costs of the Cimarron Solar project (a 350 MW solar photovoltaic generating facility and 150 MW/600 MWh battery energy storage system in Lea County, New Mexico); and approximately $71.7 million for general corporate purposes, including working capital and potential future acquisitions.

(d) Capitalization and Dilution. The description of the Company's capitalization on a historical and as-adjusted basis giving effect to the Offering and the application of the net proceeds therefrom, and the dilution to new investors purchasing shares of Common Stock in the Offering.

(e) Business. The description of the Company's business, including its 3.8 GW operating portfolio across 22 utility-scale renewable energy projects located in Texas, New Mexico, Arizona, California, and Oklahoma; its 1.4 GW of projects currently under construction; and its 6.2 GW development pipeline.

(f) Management and Board of Directors; Executive Compensation. The disclosure regarding the Company's directors, executive officers, and corporate governance, including the biographical information of each director and executive officer, the composition and responsibilities of the committees of the Board of Directors, and the Company's executive compensation programs and policies, including the 2022 Omnibus Equity Incentive Plan (with a share reserve of 12,727,273 shares of Common Stock) and the 2022 Employee Stock Purchase Plan (with a share reserve of 2,545,455 shares of Common Stock).

(g) Principal and Selling Stockholders. The disclosure regarding the security ownership of the Company's principal stockholders and the Selling Stockholder, including the sale by the Selling Stockholder, Pinnacle Vista Capital Partners III, LP, of 6,818,182 shares of Common Stock (representing approximately $150,000,000 at the assumed midpoint initial public offering price of $22.00 per share) in the Offering.

(h) Certain Relationships and Related-Party Transactions. The disclosure regarding certain relationships and related-party transactions, including the management-services agreement between the Company and Pinnacle Vista Capital Partners III, LP, providing for an annual management fee of $2.4 million, which agreement will terminate upon the consummation of the Offering.

(i) Description of Capital Stock; Description of Indebtedness. The description of the Company's authorized and outstanding capital stock, including the provisions of the Company's amended and restated certificate of incorporation and amended and restated bylaws, and the description of the Company's material indebtedness.

(j) Shares Eligible for Future Sale. The disclosure regarding the shares of Common Stock that will be eligible for future sale following the Offering, including the 180-day lock-up period applicable to the Company, the Selling Stockholder, the Company's directors and executive officers, and certain other stockholders, and the analysis of the availability of the exemption from registration under Rule 144 under the Securities Act.

(k) Material U.S. Federal Income Tax Consequences. The disclosure regarding the material U.S. federal income tax consequences of the purchase, ownership, and disposition of shares of Common Stock acquired in the Offering.

(l) Underwriting. The disclosure regarding the underwriting arrangements for the Offering, including the 5.50% gross underwriting discount; the allocation of shares among the Underwriters; the lock-up arrangements; and the stabilization, short-selling, and penalty bid provisions.

VI. Reliance and Benefit

This letter is furnished to the Underwriters solely for their benefit in connection with the Offering and is not to be used, quoted, circulated, referred to, or relied upon by any other person or for any other purpose without the prior written consent of Calderwood & Harkness LLP. Without limiting the generality of the foregoing, this letter may not be filed with or furnished to any governmental agency or other regulatory body, or to any other person, and no person other than the addressees hereof is entitled to rely on this letter or the negative assurance set forth herein. This letter does not create any attorney-client relationship between Calderwood & Harkness LLP and any Underwriter.

VII. Governing Law

This letter shall be governed by, and construed in accordance with, the laws of the State of New York, without regard to the conflict-of-laws principles thereof.

VIII. No Ongoing Obligation

We assume no obligation to update, revise, or supplement this letter after the date hereof to reflect any facts or circumstances that may hereafter come to our attention, or any changes in applicable law or regulation that may hereafter occur, after the date hereof. The negative assurance expressed herein is given as of the date hereof and speaks only as of such date. We expressly disclaim any obligation to inform the addressees hereof, or any other person, of any developments occurring after the date hereof that might affect the negative assurance expressed herein or any matter set forth in this letter.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Jennifer Kwon, Partner

cc: Sandra Haverford, General Counsel & Corporate Secretary, Calloway-Briggs Renewables Inc. cc: Prescott, Danforth & Yee LLP (Attention: Margaret Yee) cc: Whitfield Archer & Doss LLP (Attention: Christine Navarro)

PRIVILEGED AND CONFIDENTIAL
CALDERWOOD & HARKNESS LLP 599 Lexington Avenue New York, New York 10022
Telephone: (212) 558-4000 Facsimile: (212) 558-3588 www.calderwoodharkness.com
DRAFT — SUBJECT TO COMPLETION
C&H Matter No. 1015-00001
[●], 2022
To the Several Underwriters Named in Schedule I to the Underwriting Agreement Referred to Below, care of:
Hargrove Keating & Co. 383 Madison Place New York, New York 10017
Attention: Oliver Marchetti, Managing Director, Equity Capital Markets
Linden Pratt Securities LLC 200 Vesey Street, 40th Floor New York, New York 10281
Attention: Rebecca Innes, Managing Director, Equity Capital Markets
Graymont Brothers Inc. 555 California Street, Suite 3200 San Francisco, California 94104
Attention: Kenneth Sato, Managing Director, Equity Capital Markets
Barfield Stuart & Co. 101 Federal Street Boston, Massachusetts 02110
Crane Whitley Capital LLC 600 Travis Street, Suite 4400 Houston, Texas 77002
Re: Initial Public Offering of Common Stock of Calloway-Briggs Renewables Inc. (proposed NYSE ticker symbol: "CBRI")
Ladies and Gentlemen:
I. Introduction
We have acted as counsel to Calloway-Briggs Renewables Inc., a Delaware corporation (the "Company" or "CBR"), in connection with the proposed initial public offering (the "Offering") of shares of common stock, par value $0.01 per share (the "Common Stock"), of the Company. This letter is furnished to you in connection with (a) the Registration Statement on Form S-1 (File No. 333-[●]; SEC CIK 0001948372) filed by the Company under the Securities Act of 1933, as amended (the "Securities Act"), with the Securities and Exchange Commission (the "Commission"), including the confidential draft registration statement initially submitted to the Commission on April 11, 2022 (EDGAR Accession No. 0001948372-22-000001), as amended by Amendment No. 1 filed with the Commission on May 20, 2022 (EDGAR Accession No. 0001948372-22-000002) and Amendment No. 2 filed with the Commission on June 10, 2022 (EDGAR Accession No. 0001948372-22-000003), and as further amended by the amendment filed on [●], 2022 pursuant to which the Commission declared the Registration Statement effective (collectively, the "Registration Statement"); and (b) the final prospectus dated [●], 2022, filed with the Commission pursuant to Rule 424(b) under the Securities Act (the "Prospectus"). The Registration Statement and the Prospectus are referred to herein collectively as the "Disclosure Documents."
This letter is delivered to you pursuant to Section [●] of the Underwriting Agreement dated [●], 2022 (the "Underwriting Agreement") among the Company, Pinnacle Vista Capital Partners III, LP, a Delaware limited partnership (the "Selling Stockholder"), and the several underwriters named in Schedule I thereto (the "Underwriters"), for whom Hargrove Keating & Co. is acting as representative (the "Representative"), as a condition to the obligations of the Underwriters at the closing of the Offering (the "Closing"). Capitalized terms used but not defined herein have the meanings ascribed to them in the Underwriting Agreement.
II. Scope of Engagement and Participation
In connection with the preparation of the Registration Statement and the Prospectus, and in rendering the negative assurance set forth below, we have, among other things:
(a) participated in conferences and discussions with officers and employees of the Company, including Garrett Calloway, Chairman of the Board of Directors and Chief Executive Officer; Elaine Briggs, President, Development; Marcus Yoon, Chief Financial Officer; Sandra Haverford, General Counsel and Corporate Secretary; Priya Anand, Senior Vice President, Finance and Treasurer; and other members of the Company's senior management and operating personnel regarding the business, operations, financial condition, and prospects of the Company and regarding the contents and accuracy of the Disclosure Documents;
(b) participated in conferences and discussions with representatives of the Selling Stockholder, Pinnacle Vista Capital Partners III, LP, and its counsel, Whitfield Archer & Doss LLP, regarding the Selling Stockholder's participation in the Offering and the information concerning the Selling Stockholder set forth in the Disclosure Documents;
(c) participated in conferences and discussions with representatives of the Underwriters and counsel to the Underwriters, Prescott, Danforth & Yee LLP, regarding the terms of the Offering, the structure of the Underwriting Agreement, and the contents and accuracy of the Disclosure Documents;
(d) participated in conferences and discussions with representatives of the Company's independent registered public accounting firm, Ashford & Pemberton LLP (Gregory Sondheim, Lead Engagement Partner), regarding the Company's financial statements, related financial disclosures, and the audit procedures performed by Ashford & Pemberton LLP in connection with the financial statements included in the Registration Statement;
(e) participated in conferences and discussions with representatives of the Company's tax advisor, Kessler McBride & Associates LLP, regarding certain tax matters relating to the Company's tax-equity partnership structures and the related disclosures in the Disclosure Documents;
(f) reviewed the confidential draft registration statement on Form S-1 (the "DRS-1") initially submitted to the Commission on April 11, 2022, and all subsequent amendments thereto, including Amendment No. 1 filed May 20, 2022, Amendment No. 2 filed June 10, 2022, and the final pre-effective amendment filed on [●], 2022;
(g) reviewed the Commission's comment letters to the Company dated May 6, 2022 (containing 18 comments, constituting the first round of Commission review) and June 3, 2022 (containing 7 comments, constituting the second round of Commission review), and participated in the preparation of the Company's response letters dated May 20, 2022 and June 10, 2022, respectively;
(h) reviewed successive drafts of the Prospectus, including the preliminary prospectus and the final Prospectus, and participated in the drafting, revision, and review process with respect thereto;
(i) reviewed certain corporate records, documents, and certificates furnished to us by the Company, including the Company's amended and restated certificate of incorporation and amended and restated bylaws, each as proposed to be in effect upon the closing of the Offering, minutes of meetings and records of actions by written consent of the Board of Directors and committees thereof, and corporate organizational documents and records;
(j) conducted legal due diligence in connection with the Offering across the following workstreams: corporate organization and governance, regulatory and governmental permitting, environmental compliance, material contracts and commercial agreements, pending and threatened litigation, employment and labor matters, insurance coverage, outstanding indebtedness and financing arrangements, intellectual property, real property (including land leases, easements, and rights-of-way), and tax matters; and
(k) made inquiries of certain officers and employees of the Company regarding the accuracy and completeness of the information set forth in the Disclosure Documents and whether any events have occurred since the date of the Prospectus that would require amendment or supplementation of the Disclosure Documents.
We did not participate in the preparation of the financial statements, the notes thereto, or the schedules or other financial, statistical, or accounting data included in the Disclosure Documents, and we have not been asked to, and we have not undertaken to, independently verify the accuracy or completeness of such financial information. Our role in the preparation of the Disclosure Documents was limited to rendering legal advice and assisting in the preparation and review of the non-financial portions of the Disclosure Documents.
III. Limitations and Qualifications
A. Nature of Negative Assurance
This letter is not an opinion of law. It is a letter of negative assurance, sometimes referred to as a "10b-5 letter" or a "negative assurance letter," based on the procedures described herein. The negative assurance set forth in this letter is given in reliance upon, and is subject to, the limitations and qualifications set forth in this Section III. No inference should be drawn from the fact that we are furnishing this letter that we have independently verified or are making any representation or warranty, express or implied, regarding the accuracy, completeness, or fairness of the information contained in the Disclosure Documents.
B. Scope Limitations
We have not independently verified the accuracy, completeness, or fairness of the statements contained in the Disclosure Documents, and we do not assume any responsibility for such accuracy, completeness, or fairness. Our role in the preparation of the Registration Statement and the Prospectus was limited to acting as legal counsel to the Company, and such role did not include conducting an audit or review of the Company's financial statements or financial data, performing any procedures with respect to the Company's accounting records, or undertaking any independent investigation of the factual matters set forth in the Disclosure Documents beyond the procedures described in Section II above.
In furnishing this letter, we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals, the conformity to originals of all documents submitted to us as copies, and the accuracy and completeness of all corporate records, certificates, documents, and other information provided to us by the Company and its representatives. We have also assumed that the individuals who participated in conferences and discussions with us and who provided information to us were competent and duly authorized to do so on behalf of the Company and, where applicable, on behalf of the Selling Stockholder.
C. Financial Statements and Financial Data Carve-Out
The negative assurance expressed herein does not extend to, and we express no view with respect to:
(i) the audited consolidated financial statements of the Company and its subsidiaries for the fiscal years ended December 31, 2019, December 31, 2020, and December 31, 2021, and the unaudited interim consolidated financial data for the quarter ended March 31, 2022, in each case included in the Registration Statement and the Prospectus, including the notes and schedules thereto;
(ii) any other financial, statistical, accounting, or numerical data (including tabular data, per-share data, and ratios) derived from or based upon the Company's accounting records or financial statements, or included in the Disclosure Documents;
(iii) the report of Ashford & Pemberton LLP, the Company's independent registered public accounting firm, included in the Registration Statement;
(iv) any pro forma financial information, financial projections, or forward-looking financial data included in the Disclosure Documents; and
(v) information and data relating to the HLBV (Hypothetical-Liquidation-at-Book-Value) methodology and related accounting for tax-equity partnerships, except to the extent of our review of the narrative disclosure thereof in the Disclosure Documents, which review was conducted in coordination with Ashford & Pemberton LLP and Kessler McBride & Associates LLP and was limited to the non-financial, narrative aspects of such disclosure.
D. Other Carve-Outs
The negative assurance expressed herein also does not extend to, and we express no view with respect to:
(i) information contained in the Prospectus under the caption "Experts" regarding Ashford & Pemberton LLP and Greenridge Environmental Sciences LLC, which information was furnished by or on behalf of such parties;
(ii) information and statements of fact relating to parties other than the Company that were furnished by or on behalf of such parties for inclusion in the Disclosure Documents, including (A) information regarding the Underwriters and the terms of the underwriting arrangements set forth under the caption "Underwriting" in the Prospectus, and (B) information regarding the Selling Stockholder, Pinnacle Vista Capital Partners III, LP, to the extent such information was furnished by or on behalf of the Selling Stockholder or its counsel, Whitfield Archer & Doss LLP.
IV. Negative Assurance
Based on and subject to the foregoing (including the limitations and qualifications set forth in Section III above), and having regard to the nature and limitations of our engagement and the procedures undertaken by us as described in Section II above, we advise you that:
No facts have come to the attention of the attorneys in this firm who have participated in the preparation of the Registration Statement and the Prospectus and in the Offering (including Jennifer Kwon, Partner; Theodore Langston, Partner; Brendan Walsh, Special Counsel; Natasha Forbes, Senior Associate; and Leonard Cross, Associate) that cause such attorneys to believe that:
(a) the Registration Statement (including the information deemed to be part of the Registration Statement at the time of effectiveness pursuant to Rule 430A under the Securities Act), as of the date and time of its effectiveness under the Securities Act, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading (within the meaning of Section 11 of the Securities Act); or
(b) the Prospectus (as amended or supplemented, if applicable), as of its date and as of the date hereof (the Closing Date), contained or contains any untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading (within the meaning of Section 12(a)(2) of the Securities Act).
V. Description of Key Disclosure Documents Reviewed
In connection with the preparation of this letter, we reviewed, among other things, the following principal sections and disclosures of the Registration Statement and the Prospectus:
(a) Prospectus Summary. The business overview section describing the Company's operations as a utility-scale renewable energy company, and the summary of the terms of the Offering, including an aggregate offering of approximately $600,000,000 (including the 15% overallotment option); a midpoint initial public offering price of $22.00 per share; 23,713,636 shares offered in the base offering (comprised of shares offered by the Company and shares offered by the Selling Stockholder); 27,272,727 total shares offered assuming full exercise of the underwriters' overallotment option; and approximately 123,713,636 shares of Common Stock expected to be outstanding immediately after the Offering (or 127,272,727 shares assuming full exercise of the overallotment option).
(b) Risk Factors. The risk factor disclosures, including risks relating to the renewable energy industry generally; regulatory and permitting risks applicable to the Company's solar, wind, and battery storage projects; risks relating to the Company's reliance on tax-equity financing structures and the availability and monetization of investment tax credits (ITCs) and production tax credits (PTCs) under the Internal Revenue Code; leverage risks associated with the Company's indebtedness; and controlled-company risks arising from Pinnacle Vista Capital Partners III, LP's expected continued ownership of a majority of the Company's outstanding Common Stock following the Offering.
(c) Use of Proceeds. The intended use of the net proceeds of the Offering, including approximately $200 million to repay in full the outstanding Term Loan B facility with Veltrano National Bank, N.A.; approximately $100 million to fund construction costs of the Cimarron Solar project (a 350 MW solar photovoltaic generating facility and 150 MW/600 MWh battery energy storage system in Lea County, New Mexico); and approximately $71.7 million for general corporate purposes, including working capital and potential future acquisitions.
(d) Capitalization and Dilution. The description of the Company's capitalization on a historical and as-adjusted basis giving effect to the Offering and the application of the net proceeds therefrom, and the dilution to new investors purchasing shares of Common Stock in the Offering.
(e) Business. The description of the Company's business, including its 3.8 GW operating portfolio across 22 utility-scale renewable energy projects located in Texas, New Mexico, Arizona, California, and Oklahoma; its 1.4 GW of projects currently under construction; and its 6.2 GW development pipeline.
(f) Management and Board of Directors; Executive Compensation. The disclosure regarding the Company's directors, executive officers, and corporate governance, including the biographical information of each director and executive officer, the composition and responsibilities of the committees of the Board of Directors, and the Company's executive compensation programs and policies, including the 2022 Omnibus Equity Incentive Plan (with a share reserve of 12,727,273 shares of Common Stock) and the 2022 Employee Stock Purchase Plan (with a share reserve of 2,545,455 shares of Common Stock).
(g) Principal and Selling Stockholders. The disclosure regarding the security ownership of the Company's principal stockholders and the Selling Stockholder, including the sale by the Selling Stockholder, Pinnacle Vista Capital Partners III, LP, of 6,818,182 shares of Common Stock (representing approximately $150,000,000 at the assumed midpoint initial public offering price of $22.00 per share) in the Offering.
(h) Certain Relationships and Related-Party Transactions. The disclosure regarding certain relationships and related-party transactions, including the management-services agreement between the Company and Pinnacle Vista Capital Partners III, LP, providing for an annual management fee of $2.4 million, which agreement will terminate upon the consummation of the Offering.
(i) Description of Capital Stock; Description of Indebtedness. The description of the Company's authorized and outstanding capital stock, including the provisions of the Company's amended and restated certificate of incorporation and amended and restated bylaws, and the description of the Company's material indebtedness.
(j) Shares Eligible for Future Sale. The disclosure regarding the shares of Common Stock that will be eligible for future sale following the Offering, including the 180-day lock-up period applicable to the Company, the Selling Stockholder, the Company's directors and executive officers, and certain other stockholders, and the analysis of the availability of the exemption from registration under Rule 144 under the Securities Act.
(k) Material U.S. Federal Income Tax Consequences. The disclosure regarding the material U.S. federal income tax consequences of the purchase, ownership, and disposition of shares of Common Stock acquired in the Offering.
(l) Underwriting. The disclosure regarding the underwriting arrangements for the Offering, including the 5.50% gross underwriting discount; the allocation of shares among the Underwriters; the lock-up arrangements; and the stabilization, short-selling, and penalty bid provisions.
VI. Reliance and Benefit
This letter is furnished to the Underwriters solely for their benefit in connection with the Offering and is not to be used, quoted, circulated, referred to, or relied upon by any other person or for any other purpose without the prior written consent of Calderwood & Harkness LLP. Without limiting the generality of the foregoing, this letter may not be filed with or furnished to any governmental agency or other regulatory body, or to any other person, and no person other than the addressees hereof is entitled to rely on this letter or the negative assurance set forth herein. This letter does not create any attorney-client relationship between Calderwood & Harkness LLP and any Underwriter.
VII. Governing Law
This letter shall be governed by, and construed in accordance with, the laws of the State of New York, without regard to the conflict-of-laws principles thereof.
VIII. No Ongoing Obligation
We assume no obligation to update, revise, or supplement this letter after the date hereof to reflect any facts or circumstances that may hereafter come to our attention, or any changes in applicable law or regulation that may hereafter occur, after the date hereof. The negative assurance expressed herein is given as of the date hereof and speaks only as of such date. We expressly disclaim any obligation to inform the addressees hereof, or any other person, of any developments occurring after the date hereof that might affect the negative assurance expressed herein or any matter set forth in this letter.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Jennifer Kwon, Partner
cc: Sandra Haverford, General Counsel & Corporate Secretary, Calloway-Briggs Renewables Inc. cc: Prescott, Danforth & Yee LLP (Attention: Margaret Yee) cc: Whitfield Archer & Doss LLP (Attention: Christine Navarro)

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