1015-00003 · Calloway-Briggs Renewables Inc · Closing

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CONFIDENTIAL — ATTORNEY-CLIENT PRIVILEGED

CALDERWOOD & HARKNESS LLP Attorneys at Law 1000 Louisiana Street, Suite 5500 Houston, Texas 77002 Telephone: (713) 555-8200 Facsimile: (713) 555-8201 www.calderwoodharkness.com

February 10, 2023

Brazos River National Bank, N.A. 600 Main Street Fort Worth, Texas 76102

Attention: Angela P. Montrose

Senior Vice President, Energy Finance

With a copy to:

Archibald, Fenn & Shaw LLP 1700 Pacific Avenue, Suite 4000 Dallas, Texas 75201

Attention: Robert C. Fenn, Esq.

Re: $26,000,000 Construction-to-Term Loan Facility — Credit Agreement dated as of December 1, 2022, among Lone Star Storage I, LLC, as Borrower, Calloway-Briggs Renewables Inc., as Guarantor, and Brazos River National Bank, N.A., as Administrative Agent and Lender — Lone Star Battery Storage Project, Ector County, Texas

Calderwood & Harkness Matter No. 1015-00003

Ladies and Gentlemen:

We have acted as counsel to Calloway-Briggs Renewables Inc., a Texas corporation ("CBR"), and its wholly owned subsidiary, Lone Star Storage I, LLC, a Texas limited liability company (the "Borrower" or "Lone Star Storage" and, together with CBR, the "Opinion Parties"), in connection with the negotiation, execution, and delivery of the Loan Documents (as defined below) relating to the Lone Star Battery Storage Project, a 50 MW / 200 MWh lithium iron phosphate battery energy storage system located in Ector County, Texas (the "Project"). This opinion letter (this "Opinion") is delivered to you pursuant to Section 4.01(h) of the Credit Agreement (as defined below), which requires delivery of an opinion of borrower's and guarantor's counsel as a condition precedent to the Initial Advance and Financial Close under the Credit Agreement. This Opinion is delivered as of the date hereof.

Capitalized terms used but not otherwise defined herein have the meanings ascribed to them in the Credit Agreement.

I. DOCUMENTS EXAMINED

In connection with rendering the opinions set forth herein, we have examined originals, or copies certified or otherwise identified to our satisfaction, of the following documents:

A. Loan Documents

1. Credit Agreement, dated as of December 1, 2022 (the "Credit Agreement"), among Lone Star Storage I, LLC, as Borrower, Calloway-Briggs Renewables Inc., as Guarantor, and Brazos River National Bank, N.A., as Administrative Agent and Lender, providing for a $26,000,000 construction-to-term loan facility for the Project;

2. Collateral Assignment of Project Contracts, dated as of December 1, 2022 (the "Collateral Assignment"), by Lone Star Storage I, LLC, as Assignor, in favor of Brazos River National Bank, N.A., as Assignee and Administrative Agent, covering the rights and interests of the Borrower under (i) the EPC Agreement (as defined below), (ii) the Equipment Supply Agreement (as defined below), (iii) the Ground Lease (as defined below), and (iv) the Interconnection Agreement (as defined below);

3. Completion Guarantee, dated as of December 1, 2022 (the "Completion Guarantee"), by Calloway-Briggs Renewables Inc. in favor of Brazos River National Bank, N.A., constituting a limited recourse completion guarantee with respect to the construction and commissioning of the Project in accordance with the terms of the Credit Agreement;

4. Pledge Agreement, dated as of December 1, 2022 (the "Pledge Agreement"), by Calloway-Briggs Renewables Inc. in favor of Brazos River National Bank, N.A., pursuant to which CBR has pledged 100% of the membership interests in Lone Star Storage I, LLC to the Administrative Agent and Lender as collateral security for the obligations of the Borrower and the Guarantor under the Loan Documents; and

5. All other documents, instruments, certificates, and agreements executed and delivered in connection with the foregoing items 1 through 4 (collectively with items 1 through 4, the "Loan Documents").

B. Project Documents Reviewed

In addition to the Loan Documents, we have reviewed the following Project Documents:

1. Engineering, Procurement and Construction Agreement, dated as of December 1, 2022 (the "EPC Agreement"), between Lone Star Storage I, LLC and Meridian Power Construction, Inc., providing for the engineering, procurement, and construction of the Project on a fixed-price, date-certain basis for a contract price of $31,200,000;

2. Equipment Supply Agreement, dated as of December 1, 2022 (the "Equipment Supply Agreement"), between Lone Star Storage I, LLC and Harmon-Dietrich Energy Solutions, LLC, providing for the supply and delivery of battery modules, inverters, transformers, and associated balance-of-plant equipment for the Project for a contract price of $18,400,000;

3. Ground Lease Agreement, dated as of December 1, 2022 (the "Ground Lease"), between Permian Basin Land Holdings, LP, as Lessor, and Lone Star Storage I, LLC, as Lessee, covering an approximately 15-acre parcel of land being a portion of Survey No. 42, Block 42, T-1-S, T&P RR Co. Survey, Ector County, Texas, for an initial term of twenty-five (25) years commencing December 1, 2022; and

4. Interconnection Agreement, effective as of December 1, 2022 (the "Interconnection Agreement"), between Lone Star Storage I, LLC and Aldermere & Co., providing for interconnection of the Project to the ERCOT transmission grid at the Western Permian 138 kV Substation (ERCOT Queue No. INR-22-03347).

The EPC Agreement, Equipment Supply Agreement, Ground Lease, and Interconnection Agreement are referred to herein collectively as the "Project Documents."

C. Organizational and Corporate Documents Reviewed

We have also examined the following organizational and corporate documents:

1. The Certificate of Formation and Articles of Incorporation of Calloway-Briggs Renewables Inc., as filed with the Secretary of State of the State of Texas, together with all amendments thereto through the date hereof;

2. The Bylaws of Calloway-Briggs Renewables Inc., as currently in effect;

3. The Certificate of Formation of Lone Star Storage I, LLC, as filed with the Secretary of State of the State of Texas, together with all amendments thereto through the date hereof;

4. The Company Agreement (Operating Agreement) of Lone Star Storage I, LLC, as currently in effect, which names CBR as the sole member and manager of Lone Star Storage I, LLC;

5. Resolutions of the Board of Directors of Calloway-Briggs Renewables Inc. duly adopted at a meeting held on November 18, 2022, authorizing the execution and delivery of the Loan Documents and the Project Documents to which CBR is a party, and the consummation of the transactions contemplated thereby;

6. Resolutions adopted by written consent of the sole member of Lone Star Storage I, LLC, dated November 18, 2022, authorizing the execution and delivery of the Loan Documents and the Project Documents to which Lone Star Storage I, LLC is a party, and the consummation of the transactions contemplated thereby; and

7. Incumbency certificates for the officers and authorized signatories of CBR and Lone Star Storage I, LLC, including Sandra M. Briggs (President & Chief Operating Officer, CBR) and Raymond T. Calloway (Chairman & Chief Executive Officer, CBR).

D. Other Documents Reviewed

We have further examined the following additional documents, records, and materials:

1. A Certificate of Good Standing for Calloway-Briggs Renewables Inc. issued by the Secretary of State of the State of Texas, dated February 3, 2023 (within ten (10) days of the date hereof);

2. A Certificate of Good Standing (Certificate of Existence) for Lone Star Storage I, LLC issued by the Secretary of State of the State of Texas, dated February 2, 2023 (within ten (10) days of the date hereof);

3. Uniform Commercial Code lien search results for Lone Star Storage I, LLC conducted with the Office of the Secretary of State of the State of Texas and the Ector County Clerk's Office, each dated within thirty (30) days of the date hereof;

4. UCC-1 Financing Statement naming Lone Star Storage I, LLC as debtor and Brazos River National Bank, N.A. as secured party, prepared for filing with the Office of the Secretary of State of the State of Texas;

5. UCC-1 Financing Statement naming Calloway-Briggs Renewables Inc. as debtor (with respect to the pledged membership interests in Lone Star Storage I, LLC) and Brazos River National Bank, N.A. as secured party, prepared for filing with the Office of the Secretary of State of the State of Texas;

6. Ector County Building Permit No. BP-2022-04517, issued October 28, 2022, authorizing the construction of the Project on the Project site;

7. Texas Commission on Environmental Quality ("TCEQ") Stormwater General Permit No. TXR150000 and the associated Stormwater Pollution Prevention Plan ("SWPPP") filed in November 2022 in connection with construction activities at the Project site;

8. Phase I Environmental Site Assessment for the Project site, prepared by Terranova Environmental Group, Inc. (Karen V. Albrecht, Lead Consultant), dated October 2022, which reported no recognized environmental conditions at the Project site;

9. Evidence of insurance coverage for the Project, including (i) a builder's risk insurance policy issued by Commonwealth Specialty Insurance Company with a policy limit of $42,000,000 and (ii) a commercial general liability insurance policy issued by Pinnacle Mutual Assurance Corp., each placed through Kensington Risk Advisors, LLC (Dana J. Carwell, Lead Broker);

10. Leasehold title insurance policy (the "Title Policy") issued by Lone Star Abstract & Title Co. in the amount of $26,000,000, insuring the leasehold interest of Lone Star Storage I, LLC under the Ground Lease and naming Brazos River National Bank, N.A. as the insured lender thereunder;

11. Officer's Certificate and Bring-Down Certificate of Sandra M. Briggs, President & Chief Operating Officer of CBR, each dated as of February 10, 2023, certifying as to certain factual matters relevant to the opinions expressed herein;

12. Independent Engineer's report for the Project, prepared by Norgate Technical Advisors, Inc. (Dr. Phillip S. Reardon, P.E., Lead Engineer), dated January 2023, addressing the technical feasibility, projected construction schedule, performance specifications, and estimated costs of the Project;

13. Performance Bond and Payment Bond, each in the amount of $31,200,000, issued by Ironclad Surety Corporation in favor of Lone Star Storage I, LLC with respect to the obligations of Meridian Power Construction, Inc. under the EPC Agreement; and

14. Such other documents, records, agreements, and certificates as we have deemed necessary or appropriate for the purposes of the opinions expressed herein.

II. ASSUMPTIONS

In rendering the opinions set forth herein, we have, with your permission and concurrence, made the following assumptions, without independent verification:

(a) The genuineness of all signatures on all documents examined by us, other than the signatures of officers and authorized representatives of CBR and Lone Star Storage I, LLC.

(b) The authenticity and completeness of all documents submitted to us as originals, and the conformity to the originals of all documents submitted to us as copies (whether certified, photostatic, electronic, or otherwise).

(c) Each party to the Loan Documents and the Project Documents, other than CBR and Lone Star Storage I, LLC, has the requisite organizational power, authority, and legal capacity to execute, deliver, and perform its obligations under such documents to which it is a party.

(d) Each such counterparty, including without limitation Brazos River National Bank, N.A., Meridian Power Construction, Inc., Harmon-Dietrich Energy Solutions, LLC, Permian Basin Land Holdings, LP, Aldermere & Co., and Ironclad Surety Corporation, has duly authorized, executed, and delivered its respective documents in accordance with all applicable laws and its own organizational documents, and such documents constitute legal, valid, and binding obligations of each such counterparty, enforceable against such counterparty in accordance with their respective terms.

(e) All factual matters stated in the certificates delivered by officers and representatives of CBR and Lone Star Storage I, LLC, including the Officer's Certificate and Bring-Down Certificate of Sandra M. Briggs dated February 10, 2023, are true, correct, and complete as of the date hereof.

(f) There have been no oral or written modifications, amendments, waivers, or supplements to any of the documents examined by us, except as expressly reflected in the face of such documents as reviewed by us.

(g) The Credit Agreement and the other Loan Documents constitute legal, valid, and binding obligations of Brazos River National Bank, N.A. under all applicable laws.

(h) The description of the Project site contained in the Ground Lease, being a portion of Survey No. 42, Block 42, T-1-S, T&P RR Co. Survey, Ector County, Texas, is legally sufficient for purposes of identifying the real property subject to the Ground Lease, and the metes and bounds description appended to the Ground Lease as Exhibit A thereto accurately describes the approximately 15-acre parcel constituting the Project site.

(i) Each natural person who executed any of the documents examined by us was legally competent at the time of such execution.

(j) No event has occurred or circumstance exists that would cause any of the representations, warranties, or certifications made by CBR or Lone Star Storage I, LLC in the Loan Documents or in any certificate or other document delivered in connection therewith to be untrue or inaccurate.

III. OPINIONS

Based upon and subject to the foregoing, and subject further to the qualifications, limitations, and exceptions set forth in Section IV below, we are of the opinion that:

Opinion 1 — Due Organization and Good Standing

(a) Calloway-Briggs Renewables Inc. (EIN: 82-3047591) is a corporation duly organized, validly existing, and in good standing under the laws of the State of Texas. CBR has the requisite corporate power and authority to own, lease, and operate its properties and assets, to carry on its business as presently conducted, and to execute, deliver, and perform its obligations under the Loan Documents to which it is a party, including the Completion Guarantee, the Pledge Agreement, and each other Loan Document to which CBR is a party.

(b) Lone Star Storage I, LLC (EIN: 88-1623504) is a limited liability company duly organized, validly existing, and in good standing under the laws of the State of Texas. Lone Star Storage I, LLC has the requisite limited liability company power and authority to own, lease, and operate its properties and assets, to carry on its business as presently conducted, and to execute, deliver, and perform its obligations under the Loan Documents to which it is a party, including the Credit Agreement, the Collateral Assignment, and each other Loan Document to which Lone Star Storage I, LLC is a party.

(c) Lone Star Storage I, LLC is a wholly owned subsidiary of CBR, with CBR serving as the sole member and manager of Lone Star Storage I, LLC. Lone Star Storage I, LLC is a single-purpose entity formed for the purpose of holding all Project assets, contracts, permits, and other property and rights related to the Lone Star Battery Storage Project, and its organizational documents restrict its activities to those related to the ownership, development, construction, commissioning, financing, operation, and maintenance of the Project and activities incidental thereto.

Opinion 2 — Due Authorization

(a) The execution, delivery, and performance by CBR of the Completion Guarantee, the Pledge Agreement, and each other Loan Document to which CBR is a party have been duly authorized by all necessary corporate action on the part of CBR, including the adoption of resolutions by the Board of Directors of CBR at a duly convened meeting held on November 18, 2022, at which a quorum was present and acting throughout. No further corporate action on the part of CBR or its shareholders is required in connection with the execution, delivery, and performance of such Loan Documents or the consummation of the transactions contemplated thereby.

(b) The execution, delivery, and performance by Lone Star Storage I, LLC of the Credit Agreement, the Collateral Assignment, and each other Loan Document to which Lone Star Storage I, LLC is a party have been duly authorized by all necessary limited liability company action on the part of Lone Star Storage I, LLC, including the adoption of resolutions by written consent of CBR, as the sole member of Lone Star Storage I, LLC, dated November 18, 2022. No further limited liability company action on the part of Lone Star Storage I, LLC or its member is required in connection with the execution, delivery, and performance of such Loan Documents or the consummation of the transactions contemplated thereby.

(c) The persons who executed the Loan Documents on behalf of CBR and Lone Star Storage I, LLC, respectively, were at the time of such execution duly authorized to execute and deliver such documents on behalf of such entities, as evidenced by the incumbency certificates and resolutions reviewed by us.

Opinion 3 — Execution and Delivery

Each of the Loan Documents has been duly executed and delivered by each of CBR and Lone Star Storage I, LLC, as applicable, in accordance with the terms thereof and the organizational documents of such entities. The signatures of the officers and authorized signatories of CBR and Lone Star Storage I, LLC appearing on the Loan Documents are genuine and were affixed with the authority described in Opinion 2 above.

Opinion 4 — Enforceability

(a) Each of the Loan Documents to which CBR is a party, including the Completion Guarantee and the Pledge Agreement, constitutes a legal, valid, and binding obligation of CBR, enforceable against CBR in accordance with its respective terms, subject to the Enforceability Qualifications set forth in Section IV.A below.

(b) Each of the Loan Documents to which Lone Star Storage I, LLC is a party, including the Credit Agreement and the Collateral Assignment, constitutes a legal, valid, and binding obligation of Lone Star Storage I, LLC, enforceable against Lone Star Storage I, LLC in accordance with its respective terms, subject to the Enforceability Qualifications set forth in Section IV.A below.

Opinion 5 — No Conflicts

The execution, delivery, and performance of the Loan Documents by each of CBR and Lone Star Storage I, LLC, and the consummation of the transactions contemplated thereby, do not and will not:

(a) violate or conflict with any provision of the Certificate of Formation, Articles of Incorporation, or Bylaws of CBR, or the Certificate of Formation or Company Agreement (Operating Agreement) of Lone Star Storage I, LLC;

(b) violate or conflict with any applicable law, statute, rule, or regulation of the State of Texas or the United States of America applicable to CBR or Lone Star Storage I, LLC, it being understood that this opinion is limited to those laws, statutes, rules, and regulations which, in our experience, are normally applicable to transactions of the type contemplated by the Loan Documents and does not extend to any laws, statutes, rules, or regulations applicable solely by reason of the nature of the business conducted by the Addressee or any other party to the Loan Documents;

(c) result in a breach of, or constitute a default (or an event which, with the giving of notice or the lapse of time or both, would constitute a default) under, any material agreement, indenture, mortgage, deed of trust, contract, or other instrument to which CBR or Lone Star Storage I, LLC is a party or by which either entity or any of its respective properties or assets is bound, and of which we have knowledge after due inquiry, including the EPC Agreement with Meridian Power Construction, Inc., the Equipment Supply Agreement with Harmon-Dietrich Energy Solutions, LLC, the Ground Lease with Permian Basin Land Holdings, LP, and the Interconnection Agreement with Aldermere & Co.; or

(d) result in the creation or imposition of any lien, charge, security interest, encumbrance, or other claim upon any property or asset of CBR or Lone Star Storage I, LLC, other than the liens and security interests created by or pursuant to the Loan Documents in favor of Brazos River National Bank, N.A.

Opinion 6 — Governmental Approvals

No consent, approval, authorization, order, license, permit, registration, qualification, or filing with or by any governmental authority or regulatory body of the State of Texas or the United States of America is required in connection with the execution, delivery, or performance by CBR or Lone Star Storage I, LLC of any Loan Document, or the consummation of the transactions contemplated thereby, except for:

(a) the filing of UCC-1 Financing Statements with the Office of the Secretary of State of the State of Texas, naming (i) Lone Star Storage I, LLC as debtor and Brazos River National Bank, N.A. as secured party, and (ii) Calloway-Briggs Renewables Inc. as debtor and Brazos River National Bank, N.A. as secured party, which filings have been duly prepared and will be made promptly following the date hereof, or have already been submitted for filing as of the date hereof;

(b) consents, approvals, authorizations, permits, and filings that have already been obtained or made prior to the date hereof, remain in full force and effect, and are not subject to any pending or, to our knowledge, threatened revocation, suspension, modification, or appeal, including without limitation (i) Ector County Building Permit No. BP-2022-04517, issued October 28, 2022, (ii) TCEQ Stormwater General Permit No. TXR150000 and the associated Stormwater Pollution Prevention Plan filed in November 2022, and (iii) the ERCOT interconnection application filed under Queue No. INR-22-03347, seeking interconnection of the Project at the Western Permian 138 kV Substation; and

(c) such other consents, approvals, authorizations, permits, registrations, qualifications, or filings as may be required in the ordinary course of business in connection with the construction, commissioning, and operation of the Project that have not yet been obtained or made, but the failure of which to obtain or make would not reasonably be expected to have a material adverse effect on the Project, the ability of the Borrower to perform its obligations under the Loan Documents, or the interests of the Administrative Agent and Lender under the Loan Documents.

Opinion 7 — Perfection of Security Interests

(a) Upon the filing of the applicable UCC-1 Financing Statements with the Office of the Secretary of State of the State of Texas:

(i) The Collateral Assignment creates a valid security interest under Article 9 of the Texas Business and Commerce Code in favor of Brazos River National Bank, N.A. in Lone Star Storage I, LLC's rights, title, and interests under (A) the EPC Agreement with Meridian Power Construction, Inc., (B) the Equipment Supply Agreement with Harmon-Dietrich Energy Solutions, LLC, (C) the Ground Lease with Permian Basin Land Holdings, LP, and (D) the Interconnection Agreement with Aldermere & Co., and to the extent that such rights constitute "general intangibles," "accounts," "payment intangibles," or "chattel paper" within the meaning of Article 9 of the Texas Business and Commerce Code, such security interest will be perfected upon such filing.

(ii) The Pledge Agreement creates a valid security interest under Article 9 of the Texas Business and Commerce Code in favor of Brazos River National Bank, N.A. in CBR's 100% membership interest in Lone Star Storage I, LLC, and to the extent that such membership interest constitutes a "general intangible" within the meaning of Article 9 of the Texas Business and Commerce Code, such security interest will be perfected upon such filing.

(b) Based upon our review of the UCC lien search results described in Section I.D.3 above, the security interests described in paragraph (a) above, upon perfection, will constitute first-priority liens in favor of Brazos River National Bank, N.A., subject only to any prior liens, if any, disclosed in such UCC lien search results (and we note that, based on our review, no prior UCC filings were disclosed naming Lone Star Storage I, LLC or Calloway-Briggs Renewables Inc. as debtor with respect to the collateral described above).

(c) This opinion with respect to the perfection and priority of security interests does not address (i) security interests in real property, fixtures affixed to real property, or other interests in real property, the perfection of which requires methods other than the filing of UCC Financing Statements, including without limitation any deed of trust, mortgage, fixture filing, or other real property security instrument, (ii) the leasehold interest of Lone Star Storage I, LLC under the Ground Lease, which is addressed by the leasehold title insurance policy issued by Lone Star Abstract & Title Co. in the amount of $26,000,000, or (iii) any collateral that may require possession, control, or other methods of perfection under the Texas Business and Commerce Code.

Opinion 8 — No Litigation

Based solely upon our inquiry of officers of CBR and Lone Star Storage I, LLC, including our review of the Officer's Certificate dated February 10, 2023 executed by Sandra M. Briggs, President & Chief Operating Officer of CBR, and without independent investigation or verification, we are not aware of any litigation, arbitration, administrative proceeding, or governmental investigation that is pending or, to our knowledge, threatened in writing against CBR or Lone Star Storage I, LLC, or any of their respective properties or assets, before any court, arbitral body, or governmental authority, that would reasonably be expected to have a material adverse effect on the ability of either CBR or Lone Star Storage I, LLC to perform its respective obligations under the Loan Documents to which it is a party or on the validity or enforceability of any Loan Document.

IV. QUALIFICATIONS, LIMITATIONS, AND EXCEPTIONS

The opinions expressed herein are subject to the following qualifications, limitations, and exceptions:

A. Enforceability Qualifications

The enforceability opinions set forth in Opinion 4 above are subject to and limited by:

(i) applicable bankruptcy, insolvency, reorganization, receivership, moratorium, fraudulent transfer, fraudulent conveyance, preference, and other similar laws of general applicability now or hereafter in effect relating to or affecting the enforcement of creditors' rights generally, including without limitation the United States Bankruptcy Code (Title 11, U.S.C.), as amended;

(ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law), including without limitation principles governing the availability of specific performance, injunctive relief, and other equitable remedies, and concepts of materiality, reasonableness, good faith, and fair dealing;

(iii) the possible unenforceability of provisions of the Loan Documents relating to indemnification, contribution, or exculpation to the extent that such provisions may be held to be violative of public policy underlying any law, rule, or regulation (including any federal or state securities law, rule, or regulation);

(iv) the possible limitation on the enforceability of provisions of the Loan Documents purporting to waive rights, defenses, or legal protections granted under applicable law, to the extent that such waivers may be prohibited or rendered unenforceable by applicable law or public policy; and

(v) the effect of applicable court rules, statutes, and judicial decisions that may limit the availability or amount of attorneys' fees recoverable in connection with the enforcement of the Loan Documents.

The foregoing are collectively referred to herein as the "Enforceability Qualifications."

B. Governing Law Limitation

The opinions expressed herein are limited solely to the laws of the State of Texas and the federal laws of the United States of America, in each case as currently in effect on the date hereof. We express no opinion as to the laws, statutes, rules, regulations, or judicial decisions of any other jurisdiction, whether state, federal, or foreign. We note for your information that the Credit Agreement, the Collateral Assignment, the Completion Guarantee, the Pledge Agreement, and each of the Project Documents reviewed by us are governed by the laws of the State of Texas. We have not examined, and express no opinion with respect to, the effect of any choice-of-law provision contained in any of the Loan Documents or Project Documents to the extent it purports to select the law of a jurisdiction other than the State of Texas.

C. Scope Limitations

Without limiting the generality of any other qualification or limitation set forth herein, we express no opinion with respect to the following matters:

(i) Any environmental law or regulation, including without limitation the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended ("CERCLA"), the Resource Conservation and Recovery Act ("RCRA"), or any state environmental laws or regulations, including regulations administered by the Texas Commission on Environmental Quality, except to the extent that our review of the TCEQ Stormwater General Permit No. TXR150000 and the Phase I Environmental Site Assessment prepared by Terranova Environmental Group, Inc. is referenced herein. We have relied on the conclusions set forth in such Phase I report without independent verification.

(ii) Any federal, state, or local tax law or regulation, including without limitation the Internal Revenue Code of 1986, as amended, or the Texas Tax Code.

(iii) Any law or regulation relating to employee benefit plans or arrangements, including the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and Section 4975 of the Internal Revenue Code.

(iv) Any federal or state securities law or regulation, including the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and the Texas Securities Act.

(v) Any federal or state antitrust or competition law, including the Sherman Act, the Clayton Act, and the Texas Free Enterprise and Antitrust Act.

(vi) Any law or regulation relating to intellectual property, patents, trademarks, copyrights, or trade secrets.

(vii) Compliance with ERCOT Protocols, ERCOT Operating Guides, or the rules and regulations of the Public Utility Commission of Texas ("PUCT"), except to the extent that such compliance is separately addressed in our Memorandum on Texas Interconnection & ERCOT Regulatory Issues prepared for the benefit of CBR and Lone Star Storage I, LLC.

(viii) The validity of, or title to, any interest in real property or personal property, or the validity, enforceability, or priority of any lien, mortgage, deed of trust, or other encumbrance on or with respect to real property. We note that the leasehold interest of Lone Star Storage I, LLC under the Ground Lease is insured under the leasehold title insurance policy issued by Lone Star Abstract & Title Co. in the amount of $26,000,000, and we express no opinion with respect to matters that are the subject of such title insurance coverage.

(ix) The financial condition, creditworthiness, or solvency of CBR, Lone Star Storage I, LLC, or any other party to the Loan Documents or the Project Documents.

This Opinion is limited to matters of law existing and facts known to us as of the date hereof. We assume no obligation to advise you of any changes in the foregoing subsequent to the date hereof, and we expressly disclaim any obligation to update or supplement this Opinion to reflect any facts or circumstances that may hereafter come to our attention or any changes in law that may hereafter occur.

D. Reliance on Certificates and Factual Representations

In rendering the opinions set forth herein, we have relied, to the extent we deemed such reliance appropriate and reasonable under the circumstances, upon certificates and other written communications of officers and representatives of CBR and Lone Star Storage I, LLC, and upon certificates, reports, and communications of public officials and third-party consultants, without independent verification of the accuracy or completeness of the statements, representations, and factual matters set forth therein. Without limiting the generality of the foregoing, we have relied upon the following:

(i) The Officer's Certificate and Bring-Down Certificate of Sandra M. Briggs, President & Chief Operating Officer of CBR, each dated February 10, 2023, certifying as to, among other things, the absence of defaults, pending litigation, and material adverse changes, and confirming the accuracy of certain factual representations contained in the Loan Documents;

(ii) The Certificates of Good Standing (Certificates of Existence) for CBR and Lone Star Storage I, LLC issued by the Secretary of State of the State of Texas, dated February 3, 2023 and February 2, 2023, respectively;

(iii) The Phase I Environmental Site Assessment prepared by Terranova Environmental Group, Inc. (Karen V. Albrecht, Lead Consultant), which reported no recognized environmental conditions at the Project site; and

(iv) The Independent Engineer's report prepared by Norgate Technical Advisors, Inc. (Dr. Phillip S. Reardon, P.E., Lead Engineer), addressing the technical feasibility, construction schedule, performance specifications, and estimated costs of the Project.

We have assumed the accuracy and completeness of each of the foregoing documents, certificates, and reports and have made no independent investigation or verification of the matters stated therein.

V. RELIANCE AND USE

This Opinion is rendered solely for the benefit of Brazos River National Bank, N.A. in its capacity as Administrative Agent and Lender under the Credit Agreement in connection with the $26,000,000 construction-to-term loan facility for the Lone Star Battery Storage Project. This Opinion may also be relied upon by Archibald, Fenn & Shaw LLP, in its capacity as counsel to the Administrative Agent and Lender, in connection with its representation of Brazos River National Bank, N.A. in the transactions contemplated by the Credit Agreement.

This Opinion may not be relied upon by any other person or entity, or for any other purpose, without our prior written consent. No person or entity other than the Addressee and Archibald, Fenn & Shaw LLP shall be entitled to rely on this Opinion, and we assume no duty or obligation to any such third party by reason of the delivery of this Opinion to the Addressee.

This Opinion may not be quoted in whole or in part, summarized, or otherwise referred to in any document, report, filing, or communication, nor may it be filed with any governmental authority or regulatory body, without our prior written consent, except as may be required (a) by applicable law, rule, or regulation, (b) in connection with any regulatory examination of the Addressee by any bank regulatory agency or authority, or (c) in connection with the exercise of remedies under the Loan Documents, provided that any such disclosure shall be accompanied by a copy of this Opinion in its entirety, including all qualifications, limitations, and exceptions set forth herein.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

George Trujillo, Partner

Calderwood & Harkness LLP 1000 Louisiana Street, Suite 5500 Houston, Texas 77002 Telephone: (713) 555-8200

GT/mlk Enclosures

cc: Archibald, Fenn & Shaw LLP

Attn: Robert C. Fenn, Esq.

1700 Pacific Avenue, Suite 4000 Dallas, Texas 75201

Calloway-Briggs Renewables Inc.

Attn: Sandra M. Briggs, President & COO

Attn: Raymond T. Calloway, Chairman & CEO

CONFIDENTIAL — ATTORNEY-CLIENT PRIVILEGED
CALDERWOOD & HARKNESS LLP Attorneys at Law 1000 Louisiana Street, Suite 5500 Houston, Texas 77002 Telephone: (713) 555-8200 Facsimile: (713) 555-8201 www.calderwoodharkness.com
February 10, 2023
Brazos River National Bank, N.A. 600 Main Street Fort Worth, Texas 76102
Attention: Angela P. Montrose
Senior Vice President, Energy Finance
With a copy to:
Archibald, Fenn & Shaw LLP 1700 Pacific Avenue, Suite 4000 Dallas, Texas 75201
Attention: Robert C. Fenn, Esq.
Re: $26,000,000 Construction-to-Term Loan Facility — Credit Agreement dated as of December 1, 2022, among Lone Star Storage I, LLC, as Borrower, Calloway-Briggs Renewables Inc., as Guarantor, and Brazos River National Bank, N.A., as Administrative Agent and Lender — Lone Star Battery Storage Project, Ector County, Texas
Calderwood & Harkness Matter No. 1015-00003
Ladies and Gentlemen:
We have acted as counsel to Calloway-Briggs Renewables Inc., a Texas corporation ("CBR"), and its wholly owned subsidiary, Lone Star Storage I, LLC, a Texas limited liability company (the "Borrower" or "Lone Star Storage" and, together with CBR, the "Opinion Parties"), in connection with the negotiation, execution, and delivery of the Loan Documents (as defined below) relating to the Lone Star Battery Storage Project, a 50 MW / 200 MWh lithium iron phosphate battery energy storage system located in Ector County, Texas (the "Project"). This opinion letter (this "Opinion") is delivered to you pursuant to Section 4.01(h) of the Credit Agreement (as defined below), which requires delivery of an opinion of borrower's and guarantor's counsel as a condition precedent to the Initial Advance and Financial Close under the Credit Agreement. This Opinion is delivered as of the date hereof.
Capitalized terms used but not otherwise defined herein have the meanings ascribed to them in the Credit Agreement.
I. DOCUMENTS EXAMINED
In connection with rendering the opinions set forth herein, we have examined originals, or copies certified or otherwise identified to our satisfaction, of the following documents:
A. Loan Documents
1.  Credit Agreement, dated as of December 1, 2022 (the "Credit Agreement"), among Lone Star Storage I, LLC, as Borrower, Calloway-Briggs Renewables Inc., as Guarantor, and Brazos River National Bank, N.A., as Administrative Agent and Lender, providing for a $26,000,000 construction-to-term loan facility for the Project;
2.  Collateral Assignment of Project Contracts, dated as of December 1, 2022 (the "Collateral Assignment"), by Lone Star Storage I, LLC, as Assignor, in favor of Brazos River National Bank, N.A., as Assignee and Administrative Agent, covering the rights and interests of the Borrower under (i) the EPC Agreement (as defined below), (ii) the Equipment Supply Agreement (as defined below), (iii) the Ground Lease (as defined below), and (iv) the Interconnection Agreement (as defined below);
3.  Completion Guarantee, dated as of December 1, 2022 (the "Completion Guarantee"), by Calloway-Briggs Renewables Inc. in favor of Brazos River National Bank, N.A., constituting a limited recourse completion guarantee with respect to the construction and commissioning of the Project in accordance with the terms of the Credit Agreement;
4.  Pledge Agreement, dated as of December 1, 2022 (the "Pledge Agreement"), by Calloway-Briggs Renewables Inc. in favor of Brazos River National Bank, N.A., pursuant to which CBR has pledged 100% of the membership interests in Lone Star Storage I, LLC to the Administrative Agent and Lender as collateral security for the obligations of the Borrower and the Guarantor under the Loan Documents; and
5.  All other documents, instruments, certificates, and agreements executed and delivered in connection with the foregoing items 1 through 4 (collectively with items 1 through 4, the "Loan Documents").
B. Project Documents Reviewed
In addition to the Loan Documents, we have reviewed the following Project Documents:
1.  Engineering, Procurement and Construction Agreement, dated as of December 1, 2022 (the "EPC Agreement"), between Lone Star Storage I, LLC and Meridian Power Construction, Inc., providing for the engineering, procurement, and construction of the Project on a fixed-price, date-certain basis for a contract price of $31,200,000;
2.  Equipment Supply Agreement, dated as of December 1, 2022 (the "Equipment Supply Agreement"), between Lone Star Storage I, LLC and Harmon-Dietrich Energy Solutions, LLC, providing for the supply and delivery of battery modules, inverters, transformers, and associated balance-of-plant equipment for the Project for a contract price of $18,400,000;
3.  Ground Lease Agreement, dated as of December 1, 2022 (the "Ground Lease"), between Permian Basin Land Holdings, LP, as Lessor, and Lone Star Storage I, LLC, as Lessee, covering an approximately 15-acre parcel of land being a portion of Survey No. 42, Block 42, T-1-S, T&P RR Co. Survey, Ector County, Texas, for an initial term of twenty-five (25) years commencing December 1, 2022; and
4.  Interconnection Agreement, effective as of December 1, 2022 (the "Interconnection Agreement"), between Lone Star Storage I, LLC and Aldermere & Co., providing for interconnection of the Project to the ERCOT transmission grid at the Western Permian 138 kV Substation (ERCOT Queue No. INR-22-03347).
The EPC Agreement, Equipment Supply Agreement, Ground Lease, and Interconnection Agreement are referred to herein collectively as the "Project Documents."
C. Organizational and Corporate Documents Reviewed
We have also examined the following organizational and corporate documents:
1.  The Certificate of Formation and Articles of Incorporation of Calloway-Briggs Renewables Inc., as filed with the Secretary of State of the State of Texas, together with all amendments thereto through the date hereof;
2.  The Bylaws of Calloway-Briggs Renewables Inc., as currently in effect;
3.  The Certificate of Formation of Lone Star Storage I, LLC, as filed with the Secretary of State of the State of Texas, together with all amendments thereto through the date hereof;
4.  The Company Agreement (Operating Agreement) of Lone Star Storage I, LLC, as currently in effect, which names CBR as the sole member and manager of Lone Star Storage I, LLC;
5.  Resolutions of the Board of Directors of Calloway-Briggs Renewables Inc. duly adopted at a meeting held on November 18, 2022, authorizing the execution and delivery of the Loan Documents and the Project Documents to which CBR is a party, and the consummation of the transactions contemplated thereby;
6.  Resolutions adopted by written consent of the sole member of Lone Star Storage I, LLC, dated November 18, 2022, authorizing the execution and delivery of the Loan Documents and the Project Documents to which Lone Star Storage I, LLC is a party, and the consummation of the transactions contemplated thereby; and
7.  Incumbency certificates for the officers and authorized signatories of CBR and Lone Star Storage I, LLC, including Sandra M. Briggs (President & Chief Operating Officer, CBR) and Raymond T. Calloway (Chairman & Chief Executive Officer, CBR).
D. Other Documents Reviewed
We have further examined the following additional documents, records, and materials:
1.  A Certificate of Good Standing for Calloway-Briggs Renewables Inc. issued by the Secretary of State of the State of Texas, dated February 3, 2023 (within ten (10) days of the date hereof);
2.  A Certificate of Good Standing (Certificate of Existence) for Lone Star Storage I, LLC issued by the Secretary of State of the State of Texas, dated February 2, 2023 (within ten (10) days of the date hereof);
3.  Uniform Commercial Code lien search results for Lone Star Storage I, LLC conducted with the Office of the Secretary of State of the State of Texas and the Ector County Clerk's Office, each dated within thirty (30) days of the date hereof;
4.  UCC-1 Financing Statement naming Lone Star Storage I, LLC as debtor and Brazos River National Bank, N.A. as secured party, prepared for filing with the Office of the Secretary of State of the State of Texas;
5.  UCC-1 Financing Statement naming Calloway-Briggs Renewables Inc. as debtor (with respect to the pledged membership interests in Lone Star Storage I, LLC) and Brazos River National Bank, N.A. as secured party, prepared for filing with the Office of the Secretary of State of the State of Texas;
6.  Ector County Building Permit No. BP-2022-04517, issued October 28, 2022, authorizing the construction of the Project on the Project site;
7.  Texas Commission on Environmental Quality ("TCEQ") Stormwater General Permit No. TXR150000 and the associated Stormwater Pollution Prevention Plan ("SWPPP") filed in November 2022 in connection with construction activities at the Project site;
8.  Phase I Environmental Site Assessment for the Project site, prepared by Terranova Environmental Group, Inc. (Karen V. Albrecht, Lead Consultant), dated October 2022, which reported no recognized environmental conditions at the Project site;
9.  Evidence of insurance coverage for the Project, including (i) a builder's risk insurance policy issued by Commonwealth Specialty Insurance Company with a policy limit of $42,000,000 and (ii) a commercial general liability insurance policy issued by Pinnacle Mutual Assurance Corp., each placed through Kensington Risk Advisors, LLC (Dana J. Carwell, Lead Broker);
10.  Leasehold title insurance policy (the "Title Policy") issued by Lone Star Abstract & Title Co. in the amount of $26,000,000, insuring the leasehold interest of Lone Star Storage I, LLC under the Ground Lease and naming Brazos River National Bank, N.A. as the insured lender thereunder;
11.  Officer's Certificate and Bring-Down Certificate of Sandra M. Briggs, President & Chief Operating Officer of CBR, each dated as of February 10, 2023, certifying as to certain factual matters relevant to the opinions expressed herein;
12.  Independent Engineer's report for the Project, prepared by Norgate Technical Advisors, Inc. (Dr. Phillip S. Reardon, P.E., Lead Engineer), dated January 2023, addressing the technical feasibility, projected construction schedule, performance specifications, and estimated costs of the Project;
13.  Performance Bond and Payment Bond, each in the amount of $31,200,000, issued by Ironclad Surety Corporation in favor of Lone Star Storage I, LLC with respect to the obligations of Meridian Power Construction, Inc. under the EPC Agreement; and
14.  Such other documents, records, agreements, and certificates as we have deemed necessary or appropriate for the purposes of the opinions expressed herein.
II. ASSUMPTIONS
In rendering the opinions set forth herein, we have, with your permission and concurrence, made the following assumptions, without independent verification:
(a) The genuineness of all signatures on all documents examined by us, other than the signatures of officers and authorized representatives of CBR and Lone Star Storage I, LLC.
(b) The authenticity and completeness of all documents submitted to us as originals, and the conformity to the originals of all documents submitted to us as copies (whether certified, photostatic, electronic, or otherwise).
(c) Each party to the Loan Documents and the Project Documents, other than CBR and Lone Star Storage I, LLC, has the requisite organizational power, authority, and legal capacity to execute, deliver, and perform its obligations under such documents to which it is a party.
(d) Each such counterparty, including without limitation Brazos River National Bank, N.A., Meridian Power Construction, Inc., Harmon-Dietrich Energy Solutions, LLC, Permian Basin Land Holdings, LP, Aldermere & Co., and Ironclad Surety Corporation, has duly authorized, executed, and delivered its respective documents in accordance with all applicable laws and its own organizational documents, and such documents constitute legal, valid, and binding obligations of each such counterparty, enforceable against such counterparty in accordance with their respective terms.
(e) All factual matters stated in the certificates delivered by officers and representatives of CBR and Lone Star Storage I, LLC, including the Officer's Certificate and Bring-Down Certificate of Sandra M. Briggs dated February 10, 2023, are true, correct, and complete as of the date hereof.
(f) There have been no oral or written modifications, amendments, waivers, or supplements to any of the documents examined by us, except as expressly reflected in the face of such documents as reviewed by us.
(g) The Credit Agreement and the other Loan Documents constitute legal, valid, and binding obligations of Brazos River National Bank, N.A. under all applicable laws.
(h) The description of the Project site contained in the Ground Lease, being a portion of Survey No. 42, Block 42, T-1-S, T&P RR Co. Survey, Ector County, Texas, is legally sufficient for purposes of identifying the real property subject to the Ground Lease, and the metes and bounds description appended to the Ground Lease as Exhibit A thereto accurately describes the approximately 15-acre parcel constituting the Project site.
(i) Each natural person who executed any of the documents examined by us was legally competent at the time of such execution.
(j) No event has occurred or circumstance exists that would cause any of the representations, warranties, or certifications made by CBR or Lone Star Storage I, LLC in the Loan Documents or in any certificate or other document delivered in connection therewith to be untrue or inaccurate.
III. OPINIONS
Based upon and subject to the foregoing, and subject further to the qualifications, limitations, and exceptions set forth in Section IV below, we are of the opinion that:
Opinion 1 — Due Organization and Good Standing
(a) Calloway-Briggs Renewables Inc. (EIN: 82-3047591) is a corporation duly organized, validly existing, and in good standing under the laws of the State of Texas. CBR has the requisite corporate power and authority to own, lease, and operate its properties and assets, to carry on its business as presently conducted, and to execute, deliver, and perform its obligations under the Loan Documents to which it is a party, including the Completion Guarantee, the Pledge Agreement, and each other Loan Document to which CBR is a party.
(b) Lone Star Storage I, LLC (EIN: 88-1623504) is a limited liability company duly organized, validly existing, and in good standing under the laws of the State of Texas. Lone Star Storage I, LLC has the requisite limited liability company power and authority to own, lease, and operate its properties and assets, to carry on its business as presently conducted, and to execute, deliver, and perform its obligations under the Loan Documents to which it is a party, including the Credit Agreement, the Collateral Assignment, and each other Loan Document to which Lone Star Storage I, LLC is a party.
(c) Lone Star Storage I, LLC is a wholly owned subsidiary of CBR, with CBR serving as the sole member and manager of Lone Star Storage I, LLC. Lone Star Storage I, LLC is a single-purpose entity formed for the purpose of holding all Project assets, contracts, permits, and other property and rights related to the Lone Star Battery Storage Project, and its organizational documents restrict its activities to those related to the ownership, development, construction, commissioning, financing, operation, and maintenance of the Project and activities incidental thereto.
Opinion 2 — Due Authorization
(a) The execution, delivery, and performance by CBR of the Completion Guarantee, the Pledge Agreement, and each other Loan Document to which CBR is a party have been duly authorized by all necessary corporate action on the part of CBR, including the adoption of resolutions by the Board of Directors of CBR at a duly convened meeting held on November 18, 2022, at which a quorum was present and acting throughout. No further corporate action on the part of CBR or its shareholders is required in connection with the execution, delivery, and performance of such Loan Documents or the consummation of the transactions contemplated thereby.
(b) The execution, delivery, and performance by Lone Star Storage I, LLC of the Credit Agreement, the Collateral Assignment, and each other Loan Document to which Lone Star Storage I, LLC is a party have been duly authorized by all necessary limited liability company action on the part of Lone Star Storage I, LLC, including the adoption of resolutions by written consent of CBR, as the sole member of Lone Star Storage I, LLC, dated November 18, 2022. No further limited liability company action on the part of Lone Star Storage I, LLC or its member is required in connection with the execution, delivery, and performance of such Loan Documents or the consummation of the transactions contemplated thereby.
(c) The persons who executed the Loan Documents on behalf of CBR and Lone Star Storage I, LLC, respectively, were at the time of such execution duly authorized to execute and deliver such documents on behalf of such entities, as evidenced by the incumbency certificates and resolutions reviewed by us.
Opinion 3 — Execution and Delivery
Each of the Loan Documents has been duly executed and delivered by each of CBR and Lone Star Storage I, LLC, as applicable, in accordance with the terms thereof and the organizational documents of such entities. The signatures of the officers and authorized signatories of CBR and Lone Star Storage I, LLC appearing on the Loan Documents are genuine and were affixed with the authority described in Opinion 2 above.
Opinion 4 — Enforceability
(a) Each of the Loan Documents to which CBR is a party, including the Completion Guarantee and the Pledge Agreement, constitutes a legal, valid, and binding obligation of CBR, enforceable against CBR in accordance with its respective terms, subject to the Enforceability Qualifications set forth in Section IV.A below.
(b) Each of the Loan Documents to which Lone Star Storage I, LLC is a party, including the Credit Agreement and the Collateral Assignment, constitutes a legal, valid, and binding obligation of Lone Star Storage I, LLC, enforceable against Lone Star Storage I, LLC in accordance with its respective terms, subject to the Enforceability Qualifications set forth in Section IV.A below.
Opinion 5 — No Conflicts
The execution, delivery, and performance of the Loan Documents by each of CBR and Lone Star Storage I, LLC, and the consummation of the transactions contemplated thereby, do not and will not:
(a) violate or conflict with any provision of the Certificate of Formation, Articles of Incorporation, or Bylaws of CBR, or the Certificate of Formation or Company Agreement (Operating Agreement) of Lone Star Storage I, LLC;
(b) violate or conflict with any applicable law, statute, rule, or regulation of the State of Texas or the United States of America applicable to CBR or Lone Star Storage I, LLC, it being understood that this opinion is limited to those laws, statutes, rules, and regulations which, in our experience, are normally applicable to transactions of the type contemplated by the Loan Documents and does not extend to any laws, statutes, rules, or regulations applicable solely by reason of the nature of the business conducted by the Addressee or any other party to the Loan Documents;
(c) result in a breach of, or constitute a default (or an event which, with the giving of notice or the lapse of time or both, would constitute a default) under, any material agreement, indenture, mortgage, deed of trust, contract, or other instrument to which CBR or Lone Star Storage I, LLC is a party or by which either entity or any of its respective properties or assets is bound, and of which we have knowledge after due inquiry, including the EPC Agreement with Meridian Power Construction, Inc., the Equipment Supply Agreement with Harmon-Dietrich Energy Solutions, LLC, the Ground Lease with Permian Basin Land Holdings, LP, and the Interconnection Agreement with Aldermere & Co.; or
(d) result in the creation or imposition of any lien, charge, security interest, encumbrance, or other claim upon any property or asset of CBR or Lone Star Storage I, LLC, other than the liens and security interests created by or pursuant to the Loan Documents in favor of Brazos River National Bank, N.A.
Opinion 6 — Governmental Approvals
No consent, approval, authorization, order, license, permit, registration, qualification, or filing with or by any governmental authority or regulatory body of the State of Texas or the United States of America is required in connection with the execution, delivery, or performance by CBR or Lone Star Storage I, LLC of any Loan Document, or the consummation of the transactions contemplated thereby, except for:
(a) the filing of UCC-1 Financing Statements with the Office of the Secretary of State of the State of Texas, naming (i) Lone Star Storage I, LLC as debtor and Brazos River National Bank, N.A. as secured party, and (ii) Calloway-Briggs Renewables Inc. as debtor and Brazos River National Bank, N.A. as secured party, which filings have been duly prepared and will be made promptly following the date hereof, or have already been submitted for filing as of the date hereof;
(b) consents, approvals, authorizations, permits, and filings that have already been obtained or made prior to the date hereof, remain in full force and effect, and are not subject to any pending or, to our knowledge, threatened revocation, suspension, modification, or appeal, including without limitation (i) Ector County Building Permit No. BP-2022-04517, issued October 28, 2022, (ii) TCEQ Stormwater General Permit No. TXR150000 and the associated Stormwater Pollution Prevention Plan filed in November 2022, and (iii) the ERCOT interconnection application filed under Queue No. INR-22-03347, seeking interconnection of the Project at the Western Permian 138 kV Substation; and
(c) such other consents, approvals, authorizations, permits, registrations, qualifications, or filings as may be required in the ordinary course of business in connection with the construction, commissioning, and operation of the Project that have not yet been obtained or made, but the failure of which to obtain or make would not reasonably be expected to have a material adverse effect on the Project, the ability of the Borrower to perform its obligations under the Loan Documents, or the interests of the Administrative Agent and Lender under the Loan Documents.
Opinion 7 — Perfection of Security Interests
(a) Upon the filing of the applicable UCC-1 Financing Statements with the Office of the Secretary of State of the State of Texas:
(i) The Collateral Assignment creates a valid security interest under Article 9 of the Texas Business and Commerce Code in favor of Brazos River National Bank, N.A. in Lone Star Storage I, LLC's rights, title, and interests under (A) the EPC Agreement with Meridian Power Construction, Inc., (B) the Equipment Supply Agreement with Harmon-Dietrich Energy Solutions, LLC, (C) the Ground Lease with Permian Basin Land Holdings, LP, and (D) the Interconnection Agreement with Aldermere & Co., and to the extent that such rights constitute "general intangibles," "accounts," "payment intangibles," or "chattel paper" within the meaning of Article 9 of the Texas Business and Commerce Code, such security interest will be perfected upon such filing.
(ii) The Pledge Agreement creates a valid security interest under Article 9 of the Texas Business and Commerce Code in favor of Brazos River National Bank, N.A. in CBR's 100% membership interest in Lone Star Storage I, LLC, and to the extent that such membership interest constitutes a "general intangible" within the meaning of Article 9 of the Texas Business and Commerce Code, such security interest will be perfected upon such filing.
(b) Based upon our review of the UCC lien search results described in Section I.D.3 above, the security interests described in paragraph (a) above, upon perfection, will constitute first-priority liens in favor of Brazos River National Bank, N.A., subject only to any prior liens, if any, disclosed in such UCC lien search results (and we note that, based on our review, no prior UCC filings were disclosed naming Lone Star Storage I, LLC or Calloway-Briggs Renewables Inc. as debtor with respect to the collateral described above).
(c) This opinion with respect to the perfection and priority of security interests does not address (i) security interests in real property, fixtures affixed to real property, or other interests in real property, the perfection of which requires methods other than the filing of UCC Financing Statements, including without limitation any deed of trust, mortgage, fixture filing, or other real property security instrument, (ii) the leasehold interest of Lone Star Storage I, LLC under the Ground Lease, which is addressed by the leasehold title insurance policy issued by Lone Star Abstract & Title Co. in the amount of $26,000,000, or (iii) any collateral that may require possession, control, or other methods of perfection under the Texas Business and Commerce Code.
Opinion 8 — No Litigation
Based solely upon our inquiry of officers of CBR and Lone Star Storage I, LLC, including our review of the Officer's Certificate dated February 10, 2023 executed by Sandra M. Briggs, President & Chief Operating Officer of CBR, and without independent investigation or verification, we are not aware of any litigation, arbitration, administrative proceeding, or governmental investigation that is pending or, to our knowledge, threatened in writing against CBR or Lone Star Storage I, LLC, or any of their respective properties or assets, before any court, arbitral body, or governmental authority, that would reasonably be expected to have a material adverse effect on the ability of either CBR or Lone Star Storage I, LLC to perform its respective obligations under the Loan Documents to which it is a party or on the validity or enforceability of any Loan Document.
IV. QUALIFICATIONS, LIMITATIONS, AND EXCEPTIONS
The opinions expressed herein are subject to the following qualifications, limitations, and exceptions:
A. Enforceability Qualifications
The enforceability opinions set forth in Opinion 4 above are subject to and limited by:
(i) applicable bankruptcy, insolvency, reorganization, receivership, moratorium, fraudulent transfer, fraudulent conveyance, preference, and other similar laws of general applicability now or hereafter in effect relating to or affecting the enforcement of creditors' rights generally, including without limitation the United States Bankruptcy Code (Title 11, U.S.C.), as amended;
(ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law), including without limitation principles governing the availability of specific performance, injunctive relief, and other equitable remedies, and concepts of materiality, reasonableness, good faith, and fair dealing;
(iii) the possible unenforceability of provisions of the Loan Documents relating to indemnification, contribution, or exculpation to the extent that such provisions may be held to be violative of public policy underlying any law, rule, or regulation (including any federal or state securities law, rule, or regulation);
(iv) the possible limitation on the enforceability of provisions of the Loan Documents purporting to waive rights, defenses, or legal protections granted under applicable law, to the extent that such waivers may be prohibited or rendered unenforceable by applicable law or public policy; and
(v) the effect of applicable court rules, statutes, and judicial decisions that may limit the availability or amount of attorneys' fees recoverable in connection with the enforcement of the Loan Documents.
The foregoing are collectively referred to herein as the "Enforceability Qualifications."
B. Governing Law Limitation
The opinions expressed herein are limited solely to the laws of the State of Texas and the federal laws of the United States of America, in each case as currently in effect on the date hereof. We express no opinion as to the laws, statutes, rules, regulations, or judicial decisions of any other jurisdiction, whether state, federal, or foreign. We note for your information that the Credit Agreement, the Collateral Assignment, the Completion Guarantee, the Pledge Agreement, and each of the Project Documents reviewed by us are governed by the laws of the State of Texas. We have not examined, and express no opinion with respect to, the effect of any choice-of-law provision contained in any of the Loan Documents or Project Documents to the extent it purports to select the law of a jurisdiction other than the State of Texas.
C. Scope Limitations
Without limiting the generality of any other qualification or limitation set forth herein, we express no opinion with respect to the following matters:
(i) Any environmental law or regulation, including without limitation the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended ("CERCLA"), the Resource Conservation and Recovery Act ("RCRA"), or any state environmental laws or regulations, including regulations administered by the Texas Commission on Environmental Quality, except to the extent that our review of the TCEQ Stormwater General Permit No. TXR150000 and the Phase I Environmental Site Assessment prepared by Terranova Environmental Group, Inc. is referenced herein. We have relied on the conclusions set forth in such Phase I report without independent verification.
(ii) Any federal, state, or local tax law or regulation, including without limitation the Internal Revenue Code of 1986, as amended, or the Texas Tax Code.
(iii) Any law or regulation relating to employee benefit plans or arrangements, including the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and Section 4975 of the Internal Revenue Code.
(iv) Any federal or state securities law or regulation, including the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and the Texas Securities Act.
(v) Any federal or state antitrust or competition law, including the Sherman Act, the Clayton Act, and the Texas Free Enterprise and Antitrust Act.
(vi) Any law or regulation relating to intellectual property, patents, trademarks, copyrights, or trade secrets.
(vii) Compliance with ERCOT Protocols, ERCOT Operating Guides, or the rules and regulations of the Public Utility Commission of Texas ("PUCT"), except to the extent that such compliance is separately addressed in our Memorandum on Texas Interconnection & ERCOT Regulatory Issues prepared for the benefit of CBR and Lone Star Storage I, LLC.
(viii) The validity of, or title to, any interest in real property or personal property, or the validity, enforceability, or priority of any lien, mortgage, deed of trust, or other encumbrance on or with respect to real property. We note that the leasehold interest of Lone Star Storage I, LLC under the Ground Lease is insured under the leasehold title insurance policy issued by Lone Star Abstract & Title Co. in the amount of $26,000,000, and we express no opinion with respect to matters that are the subject of such title insurance coverage.
(ix) The financial condition, creditworthiness, or solvency of CBR, Lone Star Storage I, LLC, or any other party to the Loan Documents or the Project Documents.
This Opinion is limited to matters of law existing and facts known to us as of the date hereof. We assume no obligation to advise you of any changes in the foregoing subsequent to the date hereof, and we expressly disclaim any obligation to update or supplement this Opinion to reflect any facts or circumstances that may hereafter come to our attention or any changes in law that may hereafter occur.
D. Reliance on Certificates and Factual Representations
In rendering the opinions set forth herein, we have relied, to the extent we deemed such reliance appropriate and reasonable under the circumstances, upon certificates and other written communications of officers and representatives of CBR and Lone Star Storage I, LLC, and upon certificates, reports, and communications of public officials and third-party consultants, without independent verification of the accuracy or completeness of the statements, representations, and factual matters set forth therein. Without limiting the generality of the foregoing, we have relied upon the following:
(i) The Officer's Certificate and Bring-Down Certificate of Sandra M. Briggs, President & Chief Operating Officer of CBR, each dated February 10, 2023, certifying as to, among other things, the absence of defaults, pending litigation, and material adverse changes, and confirming the accuracy of certain factual representations contained in the Loan Documents;
(ii) The Certificates of Good Standing (Certificates of Existence) for CBR and Lone Star Storage I, LLC issued by the Secretary of State of the State of Texas, dated February 3, 2023 and February 2, 2023, respectively;
(iii) The Phase I Environmental Site Assessment prepared by Terranova Environmental Group, Inc. (Karen V. Albrecht, Lead Consultant), which reported no recognized environmental conditions at the Project site; and
(iv) The Independent Engineer's report prepared by Norgate Technical Advisors, Inc. (Dr. Phillip S. Reardon, P.E., Lead Engineer), addressing the technical feasibility, construction schedule, performance specifications, and estimated costs of the Project.
We have assumed the accuracy and completeness of each of the foregoing documents, certificates, and reports and have made no independent investigation or verification of the matters stated therein.
V. RELIANCE AND USE
This Opinion is rendered solely for the benefit of Brazos River National Bank, N.A. in its capacity as Administrative Agent and Lender under the Credit Agreement in connection with the $26,000,000 construction-to-term loan facility for the Lone Star Battery Storage Project. This Opinion may also be relied upon by Archibald, Fenn & Shaw LLP, in its capacity as counsel to the Administrative Agent and Lender, in connection with its representation of Brazos River National Bank, N.A. in the transactions contemplated by the Credit Agreement.
This Opinion may not be relied upon by any other person or entity, or for any other purpose, without our prior written consent. No person or entity other than the Addressee and Archibald, Fenn & Shaw LLP shall be entitled to rely on this Opinion, and we assume no duty or obligation to any such third party by reason of the delivery of this Opinion to the Addressee.
This Opinion may not be quoted in whole or in part, summarized, or otherwise referred to in any document, report, filing, or communication, nor may it be filed with any governmental authority or regulatory body, without our prior written consent, except as may be required (a) by applicable law, rule, or regulation, (b) in connection with any regulatory examination of the Addressee by any bank regulatory agency or authority, or (c) in connection with the exercise of remedies under the Loan Documents, provided that any such disclosure shall be accompanied by a copy of this Opinion in its entirety, including all qualifications, limitations, and exceptions set forth herein.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
George Trujillo, Partner
Calderwood & Harkness LLP 1000 Louisiana Street, Suite 5500 Houston, Texas 77002 Telephone: (713) 555-8200
GT/mlk Enclosures
cc: Archibald, Fenn & Shaw LLP
Attn: Robert C. Fenn, Esq.
1700 Pacific Avenue, Suite 4000 Dallas, Texas 75201
Calloway-Briggs Renewables Inc.
Attn: Sandra M. Briggs, President & COO
Attn: Raymond T. Calloway, Chairman & CEO

CONFIDENTIAL — ATTORNEY-CLIENT PRIVILEGED

I. DOCUMENTS EXAMINED

II. ASSUMPTIONS

III. OPINIONS

IV. QUALIFICATIONS, LIMITATIONS, AND EXCEPTIONS

V. RELIANCE AND USE

CALDERWOOD & HARKNESS LLP

Record

Parties

Dates

Amounts