1015-00003 · Calloway-Briggs Renewables Inc · Engagement

engagement-letter-cbr.docx DOCUMENT Finance & Banking

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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

September 6, 2022

Mr. Raymond T. Calloway Chairman & Chief Executive Officer Calloway-Briggs Renewables Inc. 2200 West Commerce Street, Suite 1400 Houston, Texas 77002

Re: Engagement of Calderwood & Harkness LLP — Lone Star Battery Storage Project Matter Number: 1015-00003

Dear Mr. Calloway:

1. Purpose and Acceptance

Thank you for selecting Calderwood & Harkness LLP ("C&H" or the "Firm") to represent Calloway-Briggs Renewables Inc. ("CBR" or the "Client") in connection with the development, financing, and closing of the Lone Star Battery Storage Project (the "Project"), as more particularly described in Section 3 below. We are pleased to have the opportunity to serve as your legal counsel on this important initiative, and we are committed to providing CBR with the highest quality of professional representation throughout all phases of the engagement.

This letter confirms the terms and conditions upon which the Firm will provide legal services to the Client in connection with the Project. The engagement shall be effective as of September 6, 2022. We ask that you review the terms set forth herein carefully and, if they are acceptable, execute and return the enclosed duplicate original of this letter in the space provided at the end of this letter to confirm CBR's acceptance of the engagement and its terms. Your countersignature will constitute a binding agreement between the Firm and the Client with respect to the matters described herein. In the event that you begin providing us with instructions, documents, or other information relating to the Project prior to returning the countersigned copy, your conduct will be deemed to constitute acceptance of the terms of this engagement letter.

2. Client Identification

The Firm's client in this matter is Calloway-Briggs Renewables Inc., a corporation organized and existing under the laws of the State of Texas, with its principal offices located at 2200 West Commerce Street, Suite 1400, Houston, Texas 77002. Our representation may also extend to Lone Star Storage I, LLC, a Texas limited liability company and wholly owned subsidiary of CBR, which has been formed as the single-purpose project company to hold all Project assets, contracts, permits, and governmental approvals relating to the Project (the "Project Company"). References in this letter to the "Client" shall include the Project Company to the extent that our representation extends to it in connection with the matters described in Section 3 below.

The Firm does not represent, and will not be deemed to represent, any other party to the transactions contemplated by this engagement, including without limitation: (i) Ridgepoint Capital Partners, LP, in its capacity as equity co-investor in the Project; (ii) Meridian Power Construction, Inc., in its capacity as engineering, procurement, and construction contractor; (iii) Harmon-Dietrich Energy Solutions, LLC, in its capacity as battery energy storage system equipment supplier; (iv) Permian Basin Land Holdings, LP, in its capacity as site lessor; or (v) Brazos River National Bank, N.A., in its capacity as construction and term lender to the Project. Each of the foregoing parties is represented by its own independent legal counsel, and no attorney-client relationship exists or shall be created between the Firm and any such party by reason of this engagement or any communications or interactions occurring in connection with the transactions described herein.

Should any affiliate, subsidiary, joint venture, or other related entity of CBR, other than the Project Company, require separate legal representation in connection with the Project or any other matter, a supplemental engagement letter will be executed setting forth the scope, terms, and conditions of such additional representation.

3. Scope of Representation

Overview. The Firm will represent CBR and, as applicable, Lone Star Storage I, LLC, in the negotiation, drafting, and closing of the principal development agreements and related financing documents for the Lone Star Battery Storage Project. The Project consists of a 50 MW / 200 MWh lithium iron phosphate (LFP) battery energy storage system ("BESS") to be located on an approximately 15-acre parcel in Ector County, Texas, with a total project development value of approximately $40,000,000. The BESS facility will be designed to participate in the Electric Reliability Council of Texas ("ERCOT") wholesale electricity market, providing energy arbitrage, ancillary services, and grid reliability support.

The specific scope of our engagement includes the following work streams:

(a) Engineering, Procurement and Construction (EPC) Agreement. Negotiation, drafting, and finalization of the fixed-price, date-certain EPC Agreement between the Project Company and Meridian Power Construction, Inc. (the "EPC Contractor") for the design, engineering, procurement, construction, testing, commissioning, and achievement of substantial completion and final completion of the BESS facility. Our services will include review and negotiation of all key commercial terms, including the contract price and payment milestones, the guaranteed substantial completion date, liquidated damages for delay and performance shortfalls, performance testing protocols and guaranteed performance levels, warranty provisions, insurance requirements, change order procedures, dispute resolution mechanisms, force majeure provisions, and conditions to final acceptance and turnover of the completed facility to the Project Company.

(b) Equipment Supply Agreement. Negotiation, drafting, and finalization of the direct Equipment Supply Agreement between the Project Company and Harmon-Dietrich Energy Solutions, LLC (the "Equipment Supplier") for the supply and delivery of the complete BESS equipment package, including battery modules, power conversion systems ("PCS"), battery management systems ("BMS"), thermal management systems, container enclosures, and all associated balance-of-system components. Our services will encompass review and negotiation of equipment specifications, delivery schedules, factory acceptance testing protocols, title transfer and risk-of-loss provisions, performance warranties (including capacity degradation guarantees), defect warranty terms, intellectual property provisions, and coordination of the Equipment Supply Agreement with the terms and conditions of the EPC Agreement to ensure consistency and avoid gaps in contractor and supplier responsibility.

(c) Ground Lease. Negotiation, drafting, and finalization of the ground lease agreement (the "Ground Lease") between the Project Company, as tenant, and Permian Basin Land Holdings, LP, as landlord, for the lease of the approximately 15-acre Project parcel located in Ector County, Texas, on which the BESS facility will be constructed and operated. Our work will include negotiation of the lease term (including extension options), rent and escalation provisions, permitted use and exclusivity covenants, access and easement rights, environmental indemnification, subordination and non-disturbance provisions required by the construction lender, casualty and condemnation provisions, and lender consent and estoppel requirements. We will also coordinate with Lone Star Abstract & Title Co. regarding title examination and survey matters related to the leasehold interest.

(d) Interconnection Agreement. Review, negotiation, and finalization of the interconnection agreement (the "Interconnection Agreement") for the connection of the Project to the Western Permian 138 kV Substation in Ector County, Texas. Our services will include analysis of the ERCOT interconnection process and applicable planning protocols as they relate to battery energy storage system projects, review of the ERCOT full interconnection study ("FIS") and system impact study results, negotiation of interconnection facilities and network upgrade cost allocation, review of metering and telemetry requirements, and coordination with the Client's technical consultants regarding compliance with ERCOT operating guides and protocols applicable to energy storage resources.

(e) Financing Documents. Assistance with the negotiation, documentation, and closing of the construction-to-term loan facility (the "Credit Facility") to be provided by Brazos River National Bank, N.A. (the "Lender"), including review and negotiation of the Credit Agreement, promissory note, collateral assignment of each Project contract (including the EPC Agreement, Equipment Supply Agreement, Ground Lease, and Interconnection Agreement), completion guarantee to be provided by CBR as project sponsor, pledge agreement covering the membership interests in the Project Company, deposit account control agreements, and all related ancillary security documents. Our services will also include preparation and delivery of a borrower's counsel legal opinion addressed to the Lender covering such matters as are customarily required by lenders in project finance transactions, including due organization and good standing, due authorization and execution, enforceability, no conflicts, and such other matters as may be reasonably requested by the Lender and agreed upon between the Firm and the Client.

(f) Ancillary Documents. Preparation of closing certificates, officer's certificates, secretary's certificates, bring-down certificates, good standing certificates, closing checklists, closing memoranda, signature pages, and such other documents and instruments as may be reasonably necessary to consummate the transactions described in subsections (a) through (e) above. This work stream will also include coordination of the overall closing process and management of the closing checklist across all transaction work streams.

(g) Due Diligence Coordination. Coordination with third-party advisors and consultants retained by CBR or the Lender in connection with the development and financing of the Project, including: (i) Norgate Technical Advisors, Inc., serving as the independent engineer; (ii) Kensington Risk Advisors, LLC, serving as the insurance broker; (iii) Lone Star Abstract & Title Co., serving as the title company; and (iv) Terranova Environmental Group, Inc., serving as the environmental consultant. Our role in this work stream will include facilitating information exchange, reviewing third-party reports and deliverables to the extent relevant to the legal documentation, and ensuring that conditions precedent relating to third-party deliverables are satisfied in connection with financial close.

Exclusions from Scope. The following matters are expressly excluded from the scope of this engagement and, if requested, would require a separate engagement letter and, potentially, the involvement of other attorneys or outside advisors:

(i) Tax advice, including federal and state income tax structuring, investment tax credit ("ITC") or production tax credit ("PTC") analysis, depreciation and cost recovery analysis, and tax equity financing structures (other than incidental tax considerations arising in the context of the commercial agreements or financing documents described above);

(ii) Environmental regulatory compliance beyond the review and negotiation of environmental representations, warranties, covenants, and indemnification provisions contained in the Project contracts;

(iii) Regulatory proceedings before the Public Utility Commission of Texas ("PUCT") or ERCOT, other than interconnection-related matters as described in subsection (d) above;

(iv) Securities law compliance, investment-advisory matters, or offerings of equity or debt securities in connection with the Project; and

(v) Any disputes, claims, arbitration, mediation, or litigation arising out of or relating to the Project, including any construction disputes, insurance claims, or lender enforcement actions.

Should any excluded matter arise during the course of the engagement that requires legal attention, the Firm would be pleased to discuss the possibility of expanding the scope of this engagement or providing a separate engagement for such additional services, subject to the execution of a supplemental engagement letter.

4. Engagement Team

The following attorneys will serve as the core engagement team for this matter:

Responsible Partner: George Trujillo. Mr. Trujillo will serve as the Responsible Partner for this engagement and will provide overall supervision and strategic direction of the Firm's work on the Project. He will serve as the primary point of contact for the Client on all substantive legal matters relating to the engagement. Mr. Trujillo is a partner in the Firm's Energy & Infrastructure Practice Group and has extensive experience representing developers, sponsors, and investors in the development and financing of renewable energy and energy storage projects.

Billing Partner: Patricia Dunmore. Ms. Dunmore will serve as the Billing Partner for this engagement and will be responsible for billing administration, fee monitoring, and all fee-related inquiries. Questions regarding invoices, expenses, or fee arrangements should be directed to Ms. Dunmore.

Lead Associate: David Stanton. Mr. Stanton will serve as the Lead Associate on the engagement and will be responsible for the day-to-day management of document drafting, contract negotiations, due diligence coordination, and transaction execution. Mr. Stanton is a senior associate in the Firm's Energy & Infrastructure Practice Group with significant experience in the documentation of EPC contracts, equipment supply agreements, and project finance facilities for utility-scale energy projects.

Working Associate: Michelle Tsao. Ms. Tsao will provide research support, drafting assistance, and closing process management throughout the engagement. Ms. Tsao is an associate in the Firm's Energy & Infrastructure Practice Group.

The Firm may assign additional attorneys, paralegals, or other legal professionals to the matter as needed to ensure the timely and efficient delivery of legal services, and will notify the Client of any material changes to the composition of the engagement team. From time to time, other attorneys within the Firm may be called upon to provide specialized advice in areas such as real property law, energy regulatory matters, or commercial lending, as warranted by the scope of the engagement. The rates for any such additional professionals will be consistent with the rate schedule set forth in Section 5.1 below.

5. Fee Arrangement

5.1 Hourly Rates

The Firm will charge for legal services rendered in connection with this engagement on an hourly basis at the following standard rates, which are effective for the 2022 calendar year:

Time will be recorded in increments of one-tenth (0.1) of an hour. The Firm endeavors to provide detailed time entries that accurately reflect the nature and substance of the work performed. Rates are subject to periodic adjustment, typically on an annual basis effective January 1 of each calendar year. The Client will receive not less than thirty (30) days' advance written notice of any changes to the applicable hourly rates.

5.2 Voluntary Fee Cap

The parties have agreed to a voluntary cap of Four Hundred Seventy-Five Thousand Dollars ($475,000) (the "Fee Cap") for professional fees for the full scope of the engagement as described in Section 3 above. The Fee Cap reflects the Firm's current estimate of the professional fees that will be required to complete the engagement based on the information available to the Firm as of the date of this letter, and represents the Firm's commitment to manage the engagement efficiently and within a defined cost framework.

The Fee Cap applies exclusively to professional fees (i.e., the hourly charges of attorneys and paralegals working on the engagement) and does not include disbursements and out-of-pocket expenses as described in Section 5.4 below. The Fee Cap is subject to adjustment by mutual written agreement of the parties in the event of: (i) a material expansion of the scope of the engagement beyond the work streams described in Section 3; (ii) unanticipated complexity arising from circumstances not known or reasonably foreseeable at the time of this engagement letter, including material changes to the Project structure, counterparty defaults, or regulatory developments; or (iii) significant delays in closing that are not attributable to the Firm. In the event that the Firm reasonably anticipates that professional fees may approach or exceed the Fee Cap, the Firm will promptly notify the Client and discuss the basis for any proposed adjustment.

The Fee Cap does not apply to any post-closing disputes, litigation, enforcement actions, or other matters that fall outside the defined scope of the engagement as set forth in Section 3.

5.3 Retainer. The Client shall pay an initial retainer in the amount of Fifty Thousand Dollars ($50,000) (the "Retainer") upon execution of this engagement letter. The Retainer shall be deposited into the Firm's Interest on Lawyers' Trust Accounts ("IOLTA") client trust account maintained at a federally insured financial institution in accordance with the Texas Disciplinary Rules of Professional Conduct and the rules of the State Bar of Texas. The Retainer will be held in the trust account and will be applied against the final invoice rendered by the Firm in connection with this engagement.

The Retainer is not a flat fee and does not represent a prepayment for a fixed amount of legal services. The Retainer does not limit the Client's obligation to pay professional fees and expenses incurred in connection with the engagement in excess of the Retainer amount, subject to the Fee Cap set forth in Section 5.2 above. In the event that the total fees and expenses incurred are less than the Retainer, the unused balance of the Retainer will be promptly refunded to the Client upon conclusion of the engagement.

5.4 Expenses and Disbursements

In addition to professional fees, the Client will be responsible for reimbursement of reasonable out-of-pocket expenses and disbursements incurred by the Firm in connection with the engagement, including but not limited to the following categories:

• Filing fees imposed by any governmental or regulatory authority;

• Recording fees for real property documents;

• Title search costs, title insurance premiums, and related charges;

• Courier and overnight delivery charges (e.g., Severin Partners LLC, Halcyon Partners LLC);

• Travel expenses incurred in connection with the engagement, including coach class airfare, standard hotel accommodations, ground transportation, and meals;

• Photocopying and printing charges, billed at the Firm's actual cost;

• Computerized legal research charges (e.g., Westmark Data Systems, Sundial Solutions, Cascade Services Inc.);

• Long-distance telephone and video conferencing charges; and

• Other reasonable out-of-pocket costs directly attributable to the engagement.

Expenses will be billed at cost, without markup. Extraordinary expenses — defined as any single expense item individually exceeding One Thousand Dollars ($1,000) — will be incurred only with the prior written approval of the Client. The Firm will exercise reasonable judgment in managing expense-related costs and will seek to minimize unnecessary expenditures wherever practicable.

6. Billing and Payment

The Firm will render monthly invoices to the Client for professional fees and expenses incurred during the preceding calendar month. Each invoice will include a summary of the legal services rendered during the billing period, identification of each timekeeper who performed services, the number of hours expended by each timekeeper, the applicable hourly rate for each timekeeper, and an itemized listing of expenses and disbursements incurred during the period. Invoices will be transmitted to the Client electronically, or by such other method as the Client may reasonably request.

Payment of each invoice is due within thirty (30) days of the invoice date ("Net 30"). Payments should be made by wire transfer, ACH electronic payment, or check payable to "Calderwood & Harkness LLP" and directed to the attention of the Firm's accounting department.

Past-due amounts — that is, invoiced amounts remaining unpaid beyond the 30-day payment period — will bear interest at the rate of one percent (1.0%) per month (12% per annum), or the maximum rate permitted by applicable law, whichever is less, accruing from the original invoice due date until the date of payment in full.

The Firm reserves the right to suspend the performance of legal services if any invoice remains unpaid for more than sixty (60) days after the invoice date, provided that the Firm shall give the Client not less than fifteen (15) days' prior written notice of its intention to suspend services. Any such suspension shall be without prejudice to the Firm's right to collect all fees and expenses then outstanding, and the Firm shall use reasonable efforts to avoid any prejudice to the Client's interests arising from such suspension, including by complying with its obligations under the applicable rules of professional conduct governing withdrawal from representation.

7. Conflicts of Interest

The Firm has conducted a thorough conflicts of interest check with respect to this engagement based on the information provided by the Client concerning the identities of the parties, entities, and individuals involved in or related to the Project. Based on the results of that conflicts check, the Firm has identified no conflicts of interest that would preclude the Firm from undertaking this engagement under the Texas Disciplinary Rules of Professional Conduct.

The Client acknowledges that Calderwood & Harkness LLP is a full-service law firm with a substantial practice in the energy and infrastructure sectors, and that the Firm represents and may continue to represent other clients — including developers, contractors, lenders, investors, and other market participants — that may have interests adverse to CBR in other, unrelated matters. The Client hereby consents to the Firm's continued representation of such other clients in matters that are not substantially related to the subject matter of this engagement, provided that the Firm shall not use any confidential information of the Client obtained in the course of this engagement in connection with the Firm's representation of any other client.

Should a conflict of interest arise during the course of the engagement that is identified by the Firm or brought to the Firm's attention by the Client or any other party, the Firm will promptly notify the Client in writing and, as appropriate, either seek an informed written waiver of the conflict from the affected parties or withdraw from the engagement (or the portion thereof giving rise to the conflict), as required by the applicable rules of professional conduct. The Firm will cooperate with the Client to minimize any disruption to the engagement resulting from any such conflict.

8. Confidentiality

The Firm will maintain the confidentiality of all information provided by the Client in connection with this engagement, including all business, financial, technical, and legal information, in accordance with the applicable rules of professional conduct governing the attorney-client relationship and the attorney-client privilege. All members of the engagement team and any other Firm personnel who have access to Client information in connection with this engagement will be bound by the Firm's confidentiality obligations.

Disclosure of confidential Client information may be made only with the Client's prior written consent, except to the extent that disclosure is: (i) required by applicable law, regulation, or court order; (ii) necessary to carry out the representation, including, without limitation, the delivery of legal opinions to third parties as contemplated by the scope of the engagement, the filing of documents with governmental authorities, or the transmission of information to counterparties in the course of the negotiated transactions; or (iii) permitted under applicable rules of professional conduct (including disclosures to prevent reasonably certain death or substantial bodily harm, or to prevent the Client from committing a crime or fraud). The Firm will, to the extent practicable and permitted by law, provide the Client with advance notice before making any disclosure pursuant to clause (i) above.

9. Document Retention

Upon the conclusion of the engagement, the Firm will return to the Client, upon the Client's written request, all original documents provided by the Client to the Firm in connection with this engagement. Original documents include, but are not limited to, executed contracts, deeds, certificates, permits, and other instruments, as well as any original correspondence received from third parties on the Client's behalf.

The Firm's working file for this engagement — including internal working drafts, research memoranda, attorney notes, internal correspondence, and similar work product generated by the Firm in the course of the engagement — will be retained by the Firm for a period of seven (7) years following the closure of the matter in the Firm's records management system. Upon the expiration of such seven-year retention period, the Firm may destroy or dispose of such materials in accordance with the Firm's standard document retention and destruction policies, without further notice to, or consent from, the Client. If the Client wishes to obtain the Firm's working file or any portion thereof prior to destruction, the Client may request such materials in writing at any time during the retention period, and the Firm will make reasonable efforts to accommodate such request, subject to the Firm's right to retain copies for its own records and compliance purposes.

10. Termination

Either party may terminate this engagement at any time upon thirty (30) days' prior written notice to the other party. Any termination of the engagement by the Firm shall be subject to the Firm's obligations under the applicable rules of professional conduct governing withdrawal from representation, including the obligation to take reasonable steps to protect the Client's interests, to give the Client reasonable notice and an opportunity to retain successor counsel, and to comply with any applicable court orders or tribunal rules.

Upon the effective date of termination, the Client will remain responsible for the payment of all professional fees and expenses incurred by the Firm through the effective date of termination, in accordance with the terms set forth in Sections 5 and 6 of this engagement letter. The Retainer, to the extent not previously applied, will be applied against any outstanding fees and expenses, with any remaining balance refunded to the Client.

In the event of termination, the Firm will cooperate fully with the Client and any successor counsel in the orderly transition of the matter, including by making available the Client's files and documents, providing reasonable assistance in the transfer of work product, and taking such other steps as may be reasonably necessary to avoid prejudice to the Client's interests during the transition period.

11. Limitation of Liability

The Firm's aggregate liability to the Client for any and all claims, damages, losses, costs, and expenses of any kind arising out of or relating to this engagement, whether based on contract, tort (including negligence), breach of fiduciary duty, or any other legal or equitable theory, shall not exceed the total amount of professional fees actually paid by the Client to the Firm under this engagement letter as of the date any such claim is asserted.

This limitation of liability shall not apply to claims arising from the Firm's willful misconduct, fraud, or gross negligence. Nothing in this Section 11 shall be construed to limit the Client's rights under the applicable rules of professional conduct or to waive any rights that may not be waived as a matter of applicable law.

12. Governing Law

This engagement letter and the relationship between the Firm and the Client arising hereunder shall be governed by and construed in accordance with the laws of the State of Texas, without regard to principles of conflicts of laws that would require the application of the laws of any other jurisdiction. Any dispute arising out of or relating to this engagement letter or the Firm's representation of the Client in connection with the Project shall be subject to the exclusive jurisdiction of the state and federal courts located in Harris County, Texas.

13. Entire Agreement

This engagement letter constitutes the entire agreement between the Firm and the Client regarding the terms and conditions of this engagement and supersedes all prior and contemporaneous discussions, negotiations, representations, understandings, and agreements, whether written or oral, between the parties relating to the subject matter hereof. No amendment, modification, supplement, or waiver of any provision of this engagement letter shall be effective unless it is set forth in a writing signed by authorized representatives of both the Firm and the Client.

We are genuinely enthusiastic about the opportunity to assist Calloway-Briggs Renewables and the entire CBR team with the Lone Star Battery Storage Project. This is a compelling and strategically important project, and we are confident that our experience in the energy storage and project finance sectors will enable us to deliver exceptional value to CBR throughout the development and closing process. We look forward to a productive working relationship.

If you have any questions regarding this letter, the terms of the engagement, or any aspect of the Firm's proposed representation, please do not hesitate to contact George Trujillo directly at (713) 555-8214 or by email at gtrujillo@calderwoodharkness.com. We would ask that you kindly execute and return the enclosed duplicate original of this letter at your earliest convenience to confirm CBR's acceptance of the terms set forth herein.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

George Trujillo, Partner 1000 Louisiana Street, Suite 5500 Houston, Texas 77002 Telephone: (713) 555-8214

Email: gtrujillo@calderwoodharkness.com

ACKNOWLEDGMENT AND ACCEPTANCE

The undersigned, on behalf of Calloway-Briggs Renewables Inc., hereby acknowledges receipt of the foregoing engagement letter dated September 6, 2022, has read and understands the terms and conditions set forth therein, and agrees to be bound by such terms and conditions.

ACKNOWLEDGED AND AGREED:

CALLOWAY-BRIGGS RENEWABLES INC.

By: ________

Name: Raymond T. Calloway

Title: Chairman & Chief Executive Officer

Date: September _, 2022

Enclosure: Duplicate original for countersignature

cc: Sandra M. Briggs, President & COO, Calloway-Briggs Renewables Inc. cc: Patricia Dunmore, Billing Partner, Calderwood & Harkness LLP cc: David Stanton, Lead Associate, Calderwood & Harkness LLP

Timekeeper Category	Hourly Rate
Partners	$895.00
Senior Associates	$625.00
Associates	$475.00
Paralegals	$275.00

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
September 6, 2022
Mr. Raymond T. Calloway Chairman & Chief Executive Officer Calloway-Briggs Renewables Inc. 2200 West Commerce Street, Suite 1400 Houston, Texas 77002
Re: Engagement of Calderwood & Harkness LLP — Lone Star Battery Storage Project Matter Number: 1015-00003
Dear Mr. Calloway:
1. Purpose and Acceptance
Thank you for selecting Calderwood & Harkness LLP ("C&H" or the "Firm") to represent Calloway-Briggs Renewables Inc. ("CBR" or the "Client") in connection with the development, financing, and closing of the Lone Star Battery Storage Project (the "Project"), as more particularly described in Section 3 below. We are pleased to have the opportunity to serve as your legal counsel on this important initiative, and we are committed to providing CBR with the highest quality of professional representation throughout all phases of the engagement.
This letter confirms the terms and conditions upon which the Firm will provide legal services to the Client in connection with the Project. The engagement shall be effective as of September 6, 2022. We ask that you review the terms set forth herein carefully and, if they are acceptable, execute and return the enclosed duplicate original of this letter in the space provided at the end of this letter to confirm CBR's acceptance of the engagement and its terms. Your countersignature will constitute a binding agreement between the Firm and the Client with respect to the matters described herein. In the event that you begin providing us with instructions, documents, or other information relating to the Project prior to returning the countersigned copy, your conduct will be deemed to constitute acceptance of the terms of this engagement letter.
2. Client Identification
The Firm's client in this matter is Calloway-Briggs Renewables Inc., a corporation organized and existing under the laws of the State of Texas, with its principal offices located at 2200 West Commerce Street, Suite 1400, Houston, Texas 77002. Our representation may also extend to Lone Star Storage I, LLC, a Texas limited liability company and wholly owned subsidiary of CBR, which has been formed as the single-purpose project company to hold all Project assets, contracts, permits, and governmental approvals relating to the Project (the "Project Company"). References in this letter to the "Client" shall include the Project Company to the extent that our representation extends to it in connection with the matters described in Section 3 below.
The Firm does not represent, and will not be deemed to represent, any other party to the transactions contemplated by this engagement, including without limitation: (i) Ridgepoint Capital Partners, LP, in its capacity as equity co-investor in the Project; (ii) Meridian Power Construction, Inc., in its capacity as engineering, procurement, and construction contractor; (iii) Harmon-Dietrich Energy Solutions, LLC, in its capacity as battery energy storage system equipment supplier; (iv) Permian Basin Land Holdings, LP, in its capacity as site lessor; or (v) Brazos River National Bank, N.A., in its capacity as construction and term lender to the Project. Each of the foregoing parties is represented by its own independent legal counsel, and no attorney-client relationship exists or shall be created between the Firm and any such party by reason of this engagement or any communications or interactions occurring in connection with the transactions described herein.
Should any affiliate, subsidiary, joint venture, or other related entity of CBR, other than the Project Company, require separate legal representation in connection with the Project or any other matter, a supplemental engagement letter will be executed setting forth the scope, terms, and conditions of such additional representation.
3. Scope of Representation
Overview. The Firm will represent CBR and, as applicable, Lone Star Storage I, LLC, in the negotiation, drafting, and closing of the principal development agreements and related financing documents for the Lone Star Battery Storage Project. The Project consists of a 50 MW / 200 MWh lithium iron phosphate (LFP) battery energy storage system ("BESS") to be located on an approximately 15-acre parcel in Ector County, Texas, with a total project development value of approximately $40,000,000. The BESS facility will be designed to participate in the Electric Reliability Council of Texas ("ERCOT") wholesale electricity market, providing energy arbitrage, ancillary services, and grid reliability support.
The specific scope of our engagement includes the following work streams:
(a) Engineering, Procurement and Construction (EPC) Agreement. Negotiation, drafting, and finalization of the fixed-price, date-certain EPC Agreement between the Project Company and Meridian Power Construction, Inc. (the "EPC Contractor") for the design, engineering, procurement, construction, testing, commissioning, and achievement of substantial completion and final completion of the BESS facility. Our services will include review and negotiation of all key commercial terms, including the contract price and payment milestones, the guaranteed substantial completion date, liquidated damages for delay and performance shortfalls, performance testing protocols and guaranteed performance levels, warranty provisions, insurance requirements, change order procedures, dispute resolution mechanisms, force majeure provisions, and conditions to final acceptance and turnover of the completed facility to the Project Company.
(b) Equipment Supply Agreement. Negotiation, drafting, and finalization of the direct Equipment Supply Agreement between the Project Company and Harmon-Dietrich Energy Solutions, LLC (the "Equipment Supplier") for the supply and delivery of the complete BESS equipment package, including battery modules, power conversion systems ("PCS"), battery management systems ("BMS"), thermal management systems, container enclosures, and all associated balance-of-system components. Our services will encompass review and negotiation of equipment specifications, delivery schedules, factory acceptance testing protocols, title transfer and risk-of-loss provisions, performance warranties (including capacity degradation guarantees), defect warranty terms, intellectual property provisions, and coordination of the Equipment Supply Agreement with the terms and conditions of the EPC Agreement to ensure consistency and avoid gaps in contractor and supplier responsibility.
(c) Ground Lease. Negotiation, drafting, and finalization of the ground lease agreement (the "Ground Lease") between the Project Company, as tenant, and Permian Basin Land Holdings, LP, as landlord, for the lease of the approximately 15-acre Project parcel located in Ector County, Texas, on which the BESS facility will be constructed and operated. Our work will include negotiation of the lease term (including extension options), rent and escalation provisions, permitted use and exclusivity covenants, access and easement rights, environmental indemnification, subordination and non-disturbance provisions required by the construction lender, casualty and condemnation provisions, and lender consent and estoppel requirements. We will also coordinate with Lone Star Abstract & Title Co. regarding title examination and survey matters related to the leasehold interest.
(d) Interconnection Agreement. Review, negotiation, and finalization of the interconnection agreement (the "Interconnection Agreement") for the connection of the Project to the Western Permian 138 kV Substation in Ector County, Texas. Our services will include analysis of the ERCOT interconnection process and applicable planning protocols as they relate to battery energy storage system projects, review of the ERCOT full interconnection study ("FIS") and system impact study results, negotiation of interconnection facilities and network upgrade cost allocation, review of metering and telemetry requirements, and coordination with the Client's technical consultants regarding compliance with ERCOT operating guides and protocols applicable to energy storage resources.
(e) Financing Documents. Assistance with the negotiation, documentation, and closing of the construction-to-term loan facility (the "Credit Facility") to be provided by Brazos River National Bank, N.A. (the "Lender"), including review and negotiation of the Credit Agreement, promissory note, collateral assignment of each Project contract (including the EPC Agreement, Equipment Supply Agreement, Ground Lease, and Interconnection Agreement), completion guarantee to be provided by CBR as project sponsor, pledge agreement covering the membership interests in the Project Company, deposit account control agreements, and all related ancillary security documents. Our services will also include preparation and delivery of a borrower's counsel legal opinion addressed to the Lender covering such matters as are customarily required by lenders in project finance transactions, including due organization and good standing, due authorization and execution, enforceability, no conflicts, and such other matters as may be reasonably requested by the Lender and agreed upon between the Firm and the Client.
(f) Ancillary Documents. Preparation of closing certificates, officer's certificates, secretary's certificates, bring-down certificates, good standing certificates, closing checklists, closing memoranda, signature pages, and such other documents and instruments as may be reasonably necessary to consummate the transactions described in subsections (a) through (e) above. This work stream will also include coordination of the overall closing process and management of the closing checklist across all transaction work streams.
(g) Due Diligence Coordination. Coordination with third-party advisors and consultants retained by CBR or the Lender in connection with the development and financing of the Project, including: (i) Norgate Technical Advisors, Inc., serving as the independent engineer; (ii) Kensington Risk Advisors, LLC, serving as the insurance broker; (iii) Lone Star Abstract & Title Co., serving as the title company; and (iv) Terranova Environmental Group, Inc., serving as the environmental consultant. Our role in this work stream will include facilitating information exchange, reviewing third-party reports and deliverables to the extent relevant to the legal documentation, and ensuring that conditions precedent relating to third-party deliverables are satisfied in connection with financial close.
Exclusions from Scope. The following matters are expressly excluded from the scope of this engagement and, if requested, would require a separate engagement letter and, potentially, the involvement of other attorneys or outside advisors:
(i) Tax advice, including federal and state income tax structuring, investment tax credit ("ITC") or production tax credit ("PTC") analysis, depreciation and cost recovery analysis, and tax equity financing structures (other than incidental tax considerations arising in the context of the commercial agreements or financing documents described above);
(ii) Environmental regulatory compliance beyond the review and negotiation of environmental representations, warranties, covenants, and indemnification provisions contained in the Project contracts;
(iii) Regulatory proceedings before the Public Utility Commission of Texas ("PUCT") or ERCOT, other than interconnection-related matters as described in subsection (d) above;
(iv) Securities law compliance, investment-advisory matters, or offerings of equity or debt securities in connection with the Project; and
(v) Any disputes, claims, arbitration, mediation, or litigation arising out of or relating to the Project, including any construction disputes, insurance claims, or lender enforcement actions.
Should any excluded matter arise during the course of the engagement that requires legal attention, the Firm would be pleased to discuss the possibility of expanding the scope of this engagement or providing a separate engagement for such additional services, subject to the execution of a supplemental engagement letter.
4. Engagement Team
The following attorneys will serve as the core engagement team for this matter:
Responsible Partner: George Trujillo. Mr. Trujillo will serve as the Responsible Partner for this engagement and will provide overall supervision and strategic direction of the Firm's work on the Project. He will serve as the primary point of contact for the Client on all substantive legal matters relating to the engagement. Mr. Trujillo is a partner in the Firm's Energy & Infrastructure Practice Group and has extensive experience representing developers, sponsors, and investors in the development and financing of renewable energy and energy storage projects.
Billing Partner: Patricia Dunmore. Ms. Dunmore will serve as the Billing Partner for this engagement and will be responsible for billing administration, fee monitoring, and all fee-related inquiries. Questions regarding invoices, expenses, or fee arrangements should be directed to Ms. Dunmore.
Lead Associate: David Stanton. Mr. Stanton will serve as the Lead Associate on the engagement and will be responsible for the day-to-day management of document drafting, contract negotiations, due diligence coordination, and transaction execution. Mr. Stanton is a senior associate in the Firm's Energy & Infrastructure Practice Group with significant experience in the documentation of EPC contracts, equipment supply agreements, and project finance facilities for utility-scale energy projects.
Working Associate: Michelle Tsao. Ms. Tsao will provide research support, drafting assistance, and closing process management throughout the engagement. Ms. Tsao is an associate in the Firm's Energy & Infrastructure Practice Group.
The Firm may assign additional attorneys, paralegals, or other legal professionals to the matter as needed to ensure the timely and efficient delivery of legal services, and will notify the Client of any material changes to the composition of the engagement team. From time to time, other attorneys within the Firm may be called upon to provide specialized advice in areas such as real property law, energy regulatory matters, or commercial lending, as warranted by the scope of the engagement. The rates for any such additional professionals will be consistent with the rate schedule set forth in Section 5.1 below.
5. Fee Arrangement
5.1 Hourly Rates
The Firm will charge for legal services rendered in connection with this engagement on an hourly basis at the following standard rates, which are effective for the 2022 calendar year:
Time will be recorded in increments of one-tenth (0.1) of an hour. The Firm endeavors to provide detailed time entries that accurately reflect the nature and substance of the work performed. Rates are subject to periodic adjustment, typically on an annual basis effective January 1 of each calendar year. The Client will receive not less than thirty (30) days' advance written notice of any changes to the applicable hourly rates.
5.2 Voluntary Fee Cap
The parties have agreed to a voluntary cap of Four Hundred Seventy-Five Thousand Dollars ($475,000) (the "Fee Cap") for professional fees for the full scope of the engagement as described in Section 3 above. The Fee Cap reflects the Firm's current estimate of the professional fees that will be required to complete the engagement based on the information available to the Firm as of the date of this letter, and represents the Firm's commitment to manage the engagement efficiently and within a defined cost framework.
The Fee Cap applies exclusively to professional fees (i.e., the hourly charges of attorneys and paralegals working on the engagement) and does not include disbursements and out-of-pocket expenses as described in Section 5.4 below. The Fee Cap is subject to adjustment by mutual written agreement of the parties in the event of: (i) a material expansion of the scope of the engagement beyond the work streams described in Section 3; (ii) unanticipated complexity arising from circumstances not known or reasonably foreseeable at the time of this engagement letter, including material changes to the Project structure, counterparty defaults, or regulatory developments; or (iii) significant delays in closing that are not attributable to the Firm. In the event that the Firm reasonably anticipates that professional fees may approach or exceed the Fee Cap, the Firm will promptly notify the Client and discuss the basis for any proposed adjustment.
The Fee Cap does not apply to any post-closing disputes, litigation, enforcement actions, or other matters that fall outside the defined scope of the engagement as set forth in Section 3.
5.3 Retainer.  The Client shall pay an initial retainer in the amount of Fifty Thousand Dollars ($50,000) (the "Retainer") upon execution of this engagement letter. The Retainer shall be deposited into the Firm's Interest on Lawyers' Trust Accounts ("IOLTA") client trust account maintained at a federally insured financial institution in accordance with the Texas Disciplinary Rules of Professional Conduct and the rules of the State Bar of Texas. The Retainer will be held in the trust account and will be applied against the final invoice rendered by the Firm in connection with this engagement.
The Retainer is not a flat fee and does not represent a prepayment for a fixed amount of legal services. The Retainer does not limit the Client's obligation to pay professional fees and expenses incurred in connection with the engagement in excess of the Retainer amount, subject to the Fee Cap set forth in Section 5.2 above. In the event that the total fees and expenses incurred are less than the Retainer, the unused balance of the Retainer will be promptly refunded to the Client upon conclusion of the engagement.
5.4 Expenses and Disbursements
In addition to professional fees, the Client will be responsible for reimbursement of reasonable out-of-pocket expenses and disbursements incurred by the Firm in connection with the engagement, including but not limited to the following categories:
•  Filing fees imposed by any governmental or regulatory authority;
•  Recording fees for real property documents;
•  Title search costs, title insurance premiums, and related charges;
•  Courier and overnight delivery charges (e.g., Severin Partners LLC, Halcyon Partners LLC);
•  Travel expenses incurred in connection with the engagement, including coach class airfare, standard hotel accommodations, ground transportation, and meals;
•  Photocopying and printing charges, billed at the Firm's actual cost;
•  Computerized legal research charges (e.g., Westmark Data Systems, Sundial Solutions, Cascade Services Inc.);
•  Long-distance telephone and video conferencing charges; and
•  Other reasonable out-of-pocket costs directly attributable to the engagement.
Expenses will be billed at cost, without markup. Extraordinary expenses — defined as any single expense item individually exceeding One Thousand Dollars ($1,000) — will be incurred only with the prior written approval of the Client. The Firm will exercise reasonable judgment in managing expense-related costs and will seek to minimize unnecessary expenditures wherever practicable.
6. Billing and Payment
The Firm will render monthly invoices to the Client for professional fees and expenses incurred during the preceding calendar month. Each invoice will include a summary of the legal services rendered during the billing period, identification of each timekeeper who performed services, the number of hours expended by each timekeeper, the applicable hourly rate for each timekeeper, and an itemized listing of expenses and disbursements incurred during the period. Invoices will be transmitted to the Client electronically, or by such other method as the Client may reasonably request.
Payment of each invoice is due within thirty (30) days of the invoice date ("Net 30"). Payments should be made by wire transfer, ACH electronic payment, or check payable to "Calderwood & Harkness LLP" and directed to the attention of the Firm's accounting department.
Past-due amounts — that is, invoiced amounts remaining unpaid beyond the 30-day payment period — will bear interest at the rate of one percent (1.0%) per month (12% per annum), or the maximum rate permitted by applicable law, whichever is less, accruing from the original invoice due date until the date of payment in full.
The Firm reserves the right to suspend the performance of legal services if any invoice remains unpaid for more than sixty (60) days after the invoice date, provided that the Firm shall give the Client not less than fifteen (15) days' prior written notice of its intention to suspend services. Any such suspension shall be without prejudice to the Firm's right to collect all fees and expenses then outstanding, and the Firm shall use reasonable efforts to avoid any prejudice to the Client's interests arising from such suspension, including by complying with its obligations under the applicable rules of professional conduct governing withdrawal from representation.
7. Conflicts of Interest
The Firm has conducted a thorough conflicts of interest check with respect to this engagement based on the information provided by the Client concerning the identities of the parties, entities, and individuals involved in or related to the Project. Based on the results of that conflicts check, the Firm has identified no conflicts of interest that would preclude the Firm from undertaking this engagement under the Texas Disciplinary Rules of Professional Conduct.
The Client acknowledges that Calderwood & Harkness LLP is a full-service law firm with a substantial practice in the energy and infrastructure sectors, and that the Firm represents and may continue to represent other clients — including developers, contractors, lenders, investors, and other market participants — that may have interests adverse to CBR in other, unrelated matters. The Client hereby consents to the Firm's continued representation of such other clients in matters that are not substantially related to the subject matter of this engagement, provided that the Firm shall not use any confidential information of the Client obtained in the course of this engagement in connection with the Firm's representation of any other client.
Should a conflict of interest arise during the course of the engagement that is identified by the Firm or brought to the Firm's attention by the Client or any other party, the Firm will promptly notify the Client in writing and, as appropriate, either seek an informed written waiver of the conflict from the affected parties or withdraw from the engagement (or the portion thereof giving rise to the conflict), as required by the applicable rules of professional conduct. The Firm will cooperate with the Client to minimize any disruption to the engagement resulting from any such conflict.
8. Confidentiality
The Firm will maintain the confidentiality of all information provided by the Client in connection with this engagement, including all business, financial, technical, and legal information, in accordance with the applicable rules of professional conduct governing the attorney-client relationship and the attorney-client privilege. All members of the engagement team and any other Firm personnel who have access to Client information in connection with this engagement will be bound by the Firm's confidentiality obligations.
Disclosure of confidential Client information may be made only with the Client's prior written consent, except to the extent that disclosure is: (i) required by applicable law, regulation, or court order; (ii) necessary to carry out the representation, including, without limitation, the delivery of legal opinions to third parties as contemplated by the scope of the engagement, the filing of documents with governmental authorities, or the transmission of information to counterparties in the course of the negotiated transactions; or (iii) permitted under applicable rules of professional conduct (including disclosures to prevent reasonably certain death or substantial bodily harm, or to prevent the Client from committing a crime or fraud). The Firm will, to the extent practicable and permitted by law, provide the Client with advance notice before making any disclosure pursuant to clause (i) above.
9. Document Retention
Upon the conclusion of the engagement, the Firm will return to the Client, upon the Client's written request, all original documents provided by the Client to the Firm in connection with this engagement. Original documents include, but are not limited to, executed contracts, deeds, certificates, permits, and other instruments, as well as any original correspondence received from third parties on the Client's behalf.
The Firm's working file for this engagement — including internal working drafts, research memoranda, attorney notes, internal correspondence, and similar work product generated by the Firm in the course of the engagement — will be retained by the Firm for a period of seven (7) years following the closure of the matter in the Firm's records management system. Upon the expiration of such seven-year retention period, the Firm may destroy or dispose of such materials in accordance with the Firm's standard document retention and destruction policies, without further notice to, or consent from, the Client. If the Client wishes to obtain the Firm's working file or any portion thereof prior to destruction, the Client may request such materials in writing at any time during the retention period, and the Firm will make reasonable efforts to accommodate such request, subject to the Firm's right to retain copies for its own records and compliance purposes.
10. Termination
Either party may terminate this engagement at any time upon thirty (30) days' prior written notice to the other party. Any termination of the engagement by the Firm shall be subject to the Firm's obligations under the applicable rules of professional conduct governing withdrawal from representation, including the obligation to take reasonable steps to protect the Client's interests, to give the Client reasonable notice and an opportunity to retain successor counsel, and to comply with any applicable court orders or tribunal rules.
Upon the effective date of termination, the Client will remain responsible for the payment of all professional fees and expenses incurred by the Firm through the effective date of termination, in accordance with the terms set forth in Sections 5 and 6 of this engagement letter. The Retainer, to the extent not previously applied, will be applied against any outstanding fees and expenses, with any remaining balance refunded to the Client.
In the event of termination, the Firm will cooperate fully with the Client and any successor counsel in the orderly transition of the matter, including by making available the Client's files and documents, providing reasonable assistance in the transfer of work product, and taking such other steps as may be reasonably necessary to avoid prejudice to the Client's interests during the transition period.
11. Limitation of Liability
The Firm's aggregate liability to the Client for any and all claims, damages, losses, costs, and expenses of any kind arising out of or relating to this engagement, whether based on contract, tort (including negligence), breach of fiduciary duty, or any other legal or equitable theory, shall not exceed the total amount of professional fees actually paid by the Client to the Firm under this engagement letter as of the date any such claim is asserted.
This limitation of liability shall not apply to claims arising from the Firm's willful misconduct, fraud, or gross negligence. Nothing in this Section 11 shall be construed to limit the Client's rights under the applicable rules of professional conduct or to waive any rights that may not be waived as a matter of applicable law.
12. Governing Law
This engagement letter and the relationship between the Firm and the Client arising hereunder shall be governed by and construed in accordance with the laws of the State of Texas, without regard to principles of conflicts of laws that would require the application of the laws of any other jurisdiction. Any dispute arising out of or relating to this engagement letter or the Firm's representation of the Client in connection with the Project shall be subject to the exclusive jurisdiction of the state and federal courts located in Harris County, Texas.
13. Entire Agreement
This engagement letter constitutes the entire agreement between the Firm and the Client regarding the terms and conditions of this engagement and supersedes all prior and contemporaneous discussions, negotiations, representations, understandings, and agreements, whether written or oral, between the parties relating to the subject matter hereof. No amendment, modification, supplement, or waiver of any provision of this engagement letter shall be effective unless it is set forth in a writing signed by authorized representatives of both the Firm and the Client.
We are genuinely enthusiastic about the opportunity to assist Calloway-Briggs Renewables and the entire CBR team with the Lone Star Battery Storage Project. This is a compelling and strategically important project, and we are confident that our experience in the energy storage and project finance sectors will enable us to deliver exceptional value to CBR throughout the development and closing process. We look forward to a productive working relationship.
If you have any questions regarding this letter, the terms of the engagement, or any aspect of the Firm's proposed representation, please do not hesitate to contact George Trujillo directly at (713) 555-8214 or by email at gtrujillo@calderwoodharkness.com. We would ask that you kindly execute and return the enclosed duplicate original of this letter at your earliest convenience to confirm CBR's acceptance of the terms set forth herein.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
George Trujillo, Partner 1000 Louisiana Street, Suite 5500 Houston, Texas 77002 Telephone: (713) 555-8214
Email: gtrujillo@calderwoodharkness.com
ACKNOWLEDGMENT AND ACCEPTANCE
The undersigned, on behalf of Calloway-Briggs Renewables Inc., hereby acknowledges receipt of the foregoing engagement letter dated September 6, 2022, has read and understands the terms and conditions set forth therein, and agrees to be bound by such terms and conditions.
ACKNOWLEDGED AND AGREED:
CALLOWAY-BRIGGS RENEWABLES INC.
By: ________
Name: Raymond T. Calloway
Title: Chairman & Chief Executive Officer
Date: September _, 2022
Enclosure: Duplicate original for countersignature
cc: Sandra M. Briggs, President & COO, Calloway-Briggs Renewables Inc. cc: Patricia Dunmore, Billing Partner, Calderwood & Harkness LLP cc: David Stanton, Lead Associate, Calderwood & Harkness LLP
Timekeeper Category | Hourly Rate
Partners | $895.00
Senior Associates | $625.00
Associates | $475.00
Paralegals | $275.00

CONFIDENTIAL — ATTORNEY-CLIENT PRIVILEGED

CALDERWOOD & HARKNESS LLP

ACKNOWLEDGMENT AND ACCEPTANCE

ACKNOWLEDGED AND AGREED:

CALLOWAY-BRIGGS RENEWABLES INC.

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