CALDERWOOD & HARKNESS LLP Attorneys at Law 555 California Street, 30th Floor San Francisco, California 94104 Telephone: (415) 788-6200 Facsimile: (415) 788-6201 www.calderwoodharkness.com
August 21, 2023
VIA EMAIL AND FIRST CLASS MAIL
Ms. Priya Narasimhan Co-Founder, Chief Executive Officer & President Lumos Analytics Inc. 340 Folsom Street, Suite 1100 San Francisco, California 94105
Re: Engagement of Calderwood & Harkness LLP as Issuer's Counsel — SAFE Financing Round Matter No.: 1008-00003
Dear Ms. Narasimhan:
1. Purpose and Acceptance of Engagement
Calderwood & Harkness LLP ("the Firm," "we," or "C&H") is pleased to confirm the terms of our engagement to represent Lumos Analytics Inc., a Delaware C-corporation ("Lumos," the "Company," or "you"), as issuer's counsel in connection with the Company's proposed SAFE (Simple Agreement for Future Equity) financing round. This engagement arises from our recent discussions between the Company and the Firm regarding the structuring, documentation, and closing of the proposed Financing, as further described below.
This letter sets forth the terms and conditions of the attorney-client relationship between the Firm and the Company. We ask that you review this letter carefully and, if you agree with its terms, that you countersign and return a copy to us at your earliest convenience. The engagement described herein shall become effective as of the date of this letter upon countersignature by an authorized officer of the Company. In the interim, any preliminary work performed by the Firm in anticipation of the Financing shall be subject to the terms set forth herein.
We are enthusiastic about the opportunity to work with you and the Lumos team, and we are confident that our experience in venture-stage and growth-equity financings will serve the Company well in this transaction.
2. Scope of Representation
The Firm will serve as issuer's counsel to Lumos Analytics Inc. in connection with the Company's proposed SAFE financing round targeting aggregate gross proceeds of up to Six Million Eight Hundred Thousand Dollars ($6,800,000) (the "Financing"). The scope of our representation in connection with the Financing is described below.
2.1 Included Services. Subject to the terms and conditions set forth in this letter, the Firm will provide the following legal services in connection with the Financing:
(a) SAFE Documentation. Drafting, reviewing, and negotiating Post-Money SAFEs based on the Calderon Partners LLC standard form (as modified to reflect the specific economic and governance terms agreed upon between the Company and its investors) with investors identified by the Company from time to time during the course of the Financing.
(b) Ancillary Transaction Documents. Drafting and negotiating related ancillary documents, including but not limited to term sheets, pro rata rights side letters, information rights provisions, most favored nation provisions, and such other ancillary agreements as may be reasonably necessary to consummate the Financing on terms acceptable to the Company.
(c) Corporate Authorizations. Preparing or reviewing all requisite corporate authorizations in connection with the issuance of the SAFEs, including board written consents or resolutions, unanimous written consents of the board of directors in lieu of a meeting, secretary's certificates, incumbency certificates, and related corporate governance documentation.
(d) Good Standing and Compliance Certificates. Coordinating requests for certificates of good standing from the Delaware Secretary of State and, as reasonably necessary, from the California Secretary of State, and furnishing such certificates to investors or their counsel as may be required in connection with the closing of the Financing.
(e) Capitalization Tables. Preparing or updating capitalization tables on a pre-round and pro forma post-round basis, reflecting all outstanding equity, options, warrants, SAFEs, convertible instruments, and any reserved share pools, to facilitate investor diligence and Company record-keeping.
(f) Delaware Corporate Law Advice. Advising the Company on matters of Delaware General Corporation Law as they pertain to the authorization, issuance, and documentation of the SAFEs and the related corporate actions.
(g) Investor Counsel Coordination. Interfacing with counsel to the lead investor(s) and co-investors as appropriate, including negotiating document markups, responding to legal diligence inquiries, and coordinating closing mechanics with all participating parties.
(h) General Corporate Advice Incidental to the Financing. Providing such general corporate counsel advice as may be reasonably incidental to the Financing, including advice regarding the Company's certificate of incorporation, bylaws, and existing contractual obligations insofar as they relate to the authorization and consummation of the Financing.
2.2 Excluded Services. The following services are expressly outside the scope of this engagement and are not included in the Firm's representation of the Company hereunder:
(a) Tax Advice. The Firm will not provide tax advice in connection with the Financing or otherwise. The Company has informed us that its tax advisor is Ashgrove Equity Partners Accounting Group LLP (engagement partner: Karen Yoshida, CPA), and we recommend that the Company consult with Ashgrove Equity Partners on all tax matters arising from or relating to the Financing, including but not limited to the tax consequences of SAFE issuance, Section 409A compliance, and any applicable state or local tax considerations.
(b) intellectual Property Prosecution and Patent Filings. The Firm will not handle intellectual property prosecution, patent filings, trademark applications, or related IP matters. The Company has informed us that its IP advisor is Peralta IP Consulting LLC (principal consultant: Dr. Amir Farouk), and we recommend that the Company direct all IP-related inquiries to Peralta.
(c) Regulatory and Securities Filings. The Firm will not prepare or file any filings with the United States Securities and Exchange Commission, the Financial Industry Regulatory Authority, or any state securities regulator, including but not limited to Form D filings, blue sky filings, or accredited investor verification documentation, unless such filings are specifically requested by the Company and agreed to by the Firm in a separate written agreement.
(d) Litigation and Dispute Resolution. The Firm will not represent the Company in any litigation, arbitration, mediation, or other dispute resolution proceedings arising from or relating to the Financing or otherwise.
(e) Unrelated Matters. Any matters unrelated to the Financing are outside the scope of this engagement and will not be undertaken by the Firm unless separately agreed to in a supplemental engagement letter or amendment to this letter.
If, during the course of the engagement, the Company requests that the Firm provide services outside the scope described in this Section 2, the Firm will be pleased to discuss the terms of any expanded engagement, which would be documented in a separate writing.
3. Engagement Team
The following attorneys have been designated to serve as the engagement team for this matter:
Responsible Partner — Patricia Dunmore, Partner. Ms. Dunmore will serve as the primary relationship partner responsible for the overall oversight of the engagement and all legal advice rendered to the Company in connection with the Financing. Ms. Dunmore has over twenty years of experience representing issuers and investors in venture capital, growth equity, and other private financing transactions. She will serve as the Company's primary point of contact at the Firm, and the Company should direct all significant communications, strategic inquiries, and escalated matters to Ms. Dunmore.
Billing Partner — George Trujillo, Partner. Mr. Trujillo will serve as the billing partner responsible for invoicing, fee-related matters, and financial administration of the engagement. Inquiries regarding invoices, fee estimates, or billing arrangements should be directed to Mr. Trujillo or to the Firm's billing department.
Lead Associate — Omar Siddiqui, Associate. Mr. Siddiqui will serve as the day-to-day lead on drafting, negotiation, and coordination with opposing counsel and investor representatives. Mr. Siddiqui brings extensive experience in early-stage and Series A financings, including SAFE and convertible note transactions. The Company may direct routine and day-to-day communications regarding document status, drafting questions, and closing logistics to Mr. Siddiqui.
Working Associate — Christy Bauer, Associate. Ms. Bauer will support Mr. Siddiqui on drafting, due diligence, corporate documentation, and other tasks as assigned. Ms. Bauer will assist with the preparation of capitalization tables, board resolutions, and ancillary corporate documents.
The Firm may, from time to time, assign additional attorneys, paralegals, or support staff to assist with this engagement as necessary to ensure the timely and efficient delivery of legal services. The Company will be notified of any material changes to the composition of the engagement team. All work performed by such additional team members will be billed at the applicable rates set forth in Section 4 below.
4. Billing Rates and Fee Arrangements
4.1 Hourly Rates. The Firm's current hourly rates for attorneys and professional staff assigned to this engagement are as follows:
These rates are subject to periodic adjustment, typically on an annual basis effective January 1 of each calendar year. The Company will be notified in writing of any changes to the Firm's standard hourly rates at least thirty (30) days prior to the effective date of any such adjustment. Any adjusted rates will apply only to services rendered on or after the effective date of the adjustment.
4.2 Fee Cap. Notwithstanding the hourly billing arrangement described above, the Firm and the Company have agreed that total professional fees for the Financing shall not exceed Ninety-Five Thousand Dollars ($95,000), exclusive of disbursements and out-of-pocket expenses described in Section 4.3 below (the "Fee Cap"). The following terms apply to the Fee Cap:
(a) The Fee Cap applies solely to the scope of representation described in Section 2 of this letter and does not extend to any services that fall outside that scope or that are the subject of a separate engagement.
(b) The Fee Cap does not constitute a fixed fee or a flat fee. Billing will be based on actual time incurred by the Firm's timekeepers at the hourly rates set forth in Section 4.1 above, subject to the aggregate ceiling imposed by the Fee Cap. In the event that the total professional fees actually incurred by the Firm are less than the Fee Cap, the Company will be invoiced only for the actual fees incurred.
(c) If the scope of the engagement is materially expanded at the Company's request, or if the Financing involves unforeseen complexity — including but not limited to disputes among investors or founders, threatened or actual litigation, regulatory inquiries or proceedings, material amendments to the structure of the Financing, or the addition of a substantial number of investors beyond the Company's initial expectations — the Firm reserves the right to discuss a revised fee arrangement with the Company. Any such revised arrangement must be agreed to by both parties in writing before additional fees beyond the Fee Cap are incurred.
(d) In the event of a disagreement regarding whether the Fee Cap applies to particular services, the parties agree to discuss the matter in good faith and, if necessary, to submit the dispute to mediation before a mutually agreed-upon neutral.
4.3 Disbursements and Out-of-Pocket Expenses. In addition to professional fees, the Company will be responsible for reimbursement of reasonable out-of-pocket expenses incurred by the Firm in connection with the engagement. Disbursements and out-of-pocket expenses include, but are not limited to, the following:
•  Filing fees (including fees for obtaining certificates of good standing and related filings);
•  Courier and delivery charges;
•  Long-distance telephone and facsimile charges;
•  Travel expenses (including airfare, ground transportation, lodging, and meals) incurred at the Company's request or with the Company's prior approval;
•  Photocopying and document reproduction costs;
•  Online research charges (e.g., Westmark Data Systems, Sundial Solutions); and
•  Similar costs reasonably incurred in connection with the engagement.
All disbursements and out-of-pocket expenses are billed at cost and are not subject to the Fee Cap. The Firm will endeavor to keep such expenses reasonable and will consult with the Company before incurring any single expense in excess of Five Hundred Dollars ($500).
5. Billing and Payment Terms
The Firm will submit monthly invoices to the Company detailing professional services rendered and disbursements incurred during the preceding billing period. Each invoice will include a description of the services performed, the timekeeper responsible for each entry, the number of hours expended, and the applicable hourly rate. Disbursements will be itemized separately.
Invoices are payable within thirty (30) days of the date of invoice. Payment may be made by check, wire transfer, or ACH payment to the account specified on each invoice. The Company should direct any billing inquiries or disputes regarding a particular invoice to Mr. Trujillo or to the Firm's billing department promptly upon receipt. Any disputed portion of an invoice should be identified in writing within fifteen (15) days of receipt; undisputed amounts remain due within the standard thirty-day period.
The Firm reserves the right to charge interest on overdue balances at the rate of one percent (1.0%) per month, or the maximum rate permitted by applicable law, whichever is less, calculated from the date the invoice was due until the date payment is received in full. The Firm's right to charge interest shall not constitute a waiver of any other rights or remedies available to the Firm under applicable law.
No retainer is required at the outset of this engagement. The Firm reserves the right, however, to request a retainer or advance payment of fees in the event that invoices remain unpaid beyond sixty (60) days, or if the Firm reasonably determines that such a request is warranted by the circumstances of the engagement.
6. Identification of the Client
The Firm's client in this engagement is Lumos Analytics Inc. and not any individual officer, director, shareholder, employee, agent, or affiliate of the Company. The attorney-client relationship created by this engagement letter exists solely between the Firm and the Company, and no other person or entity shall be deemed a client of the Firm by reason of this engagement.
The Firm does not represent any investor, co-investor, or other party to the Financing. Specifically, and without limitation, the Firm does not represent and will not be providing legal advice to any of the following persons or entities:
(a) Vantage Peak Ventures Fund II, L.P. or its general partner, Vantage Peak Capital Management LLC. The Company has informed us that Vantage Peak is represented in connection with the Financing by Whitfield Harte & Associates LLP;
(b) Ridgeline Angel Fund, L.P. or its general partner, Ridgeline Angel Management LLC;
(c) Canopy Growth Capital LLC;
(d) Atlas Fintech Syndicate, L.P. or its general partner, Atlas Fintech GP LLC; or
(e) Any individual founder, officer, or director of the Company in their personal capacity, including without limitation Priya Narasimhan, Elliot Marsh, Danielle Okoye, or Kenji Watanabe.
Each of the foregoing persons and entities is encouraged to retain independent legal counsel to advise them with respect to their individual rights, obligations, and interests in connection with the Financing. The Company acknowledges and agrees that any communications between the Firm and any of the foregoing persons or entities in connection with the Financing are made solely on behalf of the Company and do not create an attorney-client relationship between the Firm and any such person or entity.
7. Conflicts of Interest
The Firm has conducted a conflicts check in accordance with its standard internal procedures and the applicable Rules of Professional Conduct, and based on the information presently available to us, the Firm is not aware of any current conflict of interest that would preclude the Firm from undertaking this engagement.
If a conflict of interest arises during the course of the engagement — whether due to the Firm's acceptance of a new client or matter, a change in the circumstances of this engagement, or otherwise — the Firm will promptly notify the Company and take appropriate steps to address the conflict. Such steps may include seeking an informed written waiver from the affected parties or, if a waiver is not obtainable or is not appropriate under the circumstances, withdrawing from the engagement in whole or in part.
The Company acknowledges that the Firm represents a broad range of clients in matters unrelated to this engagement, and the Company hereby consents to the Firm's continued representation of such other clients, provided that such representation does not create an actual conflict of interest with respect to this engagement. This consent does not extend to any representation that would be directly adverse to the Company in a matter substantially related to the Financing.
8. Confidentiality and Privilege
All communications between the Firm and the Company in connection with this engagement are intended to be, and shall be treated as, subject to the attorney-client privilege and the work product doctrine to the fullest extent permitted by applicable law. The Company should take care to preserve the privileged nature of such communications and to avoid unnecessary dissemination of privileged materials to third parties, which may result in a waiver of privilege.
The Firm will maintain the confidentiality of all information received from the Company in connection with this engagement, subject to the Company's instructions and applicable legal and ethical obligations. The Firm will not disclose any such information to third parties without the Company's prior consent, except as may be required by law, court order, or the applicable Rules of Professional Conduct, or as may be reasonably necessary to carry out the Firm's responsibilities under this engagement (for example, sharing information with counsel to investors in the ordinary course of negotiation and closing).
The Company should mark sensitive documents as "Confidential" or "Attorney-Client Privileged" as appropriate and should direct all privileged communications through designated contacts at the Company. For purposes of this engagement, the Company's designated contacts for privileged communications are Ms. Priya Narasimhan (CEO & President), Ms. Danielle Okoye (CFO), and Mr. Elliot Marsh (CTO), unless the Company notifies us otherwise in writing.
9. Document Retention
The Firm will maintain files related to this engagement in accordance with the Firm's standard document retention policies, as in effect from time to time. During the pendency of the engagement, all files — including correspondence, memoranda, draft and executed agreements, and related work product — will be maintained in the Firm's secure physical and electronic filing systems.
Upon conclusion of the engagement, the Company may request the return of original documents provided to the Firm by the Company. The Firm will comply with any such request within a reasonable period of time and may retain copies of all documents for its own records, including for purposes of complying with professional responsibility obligations, responding to potential malpractice claims, and satisfying applicable regulatory requirements.
The Firm's standard retention period for closed matter files is seven (7) years from the date of matter closure. Following the expiration of the retention period, the Firm may destroy or dispose of the files in accordance with its standard policies without further notice to the Company, unless the Company has previously requested the return of such files or the Firm has agreed to a different retention period in writing.
10. Termination of Engagement
Either the Company or the Firm may terminate this engagement at any time upon written notice to the other party. Termination by the Company shall be effective upon receipt of written notice by the Firm. Termination by the Firm shall be subject to the Firm's obligations under the applicable Rules of Professional Conduct, including the obligation to provide reasonable notice and to take steps to avoid prejudice to the Company's interests.
Upon termination of the engagement, the Company will remain responsible for payment of all professional fees and disbursements incurred by the Firm through the date of termination, in accordance with the billing and payment terms set forth in Sections 4 and 5 of this letter.
Following termination, the Firm will take reasonable steps to protect the Company's interests, including cooperating with the Company and any successor counsel to facilitate an orderly transition of the matter. The Firm will promptly deliver to the Company or its successor counsel all files, documents, and other materials reasonably necessary for the continued handling of the matter, subject to the Firm's right to retain copies as described in Section 9 above and any applicable lien rights under California law.
11. Governing Law
This engagement letter and the attorney-client relationship between the Firm and the Company shall be governed by and construed in accordance with the laws of the State of California, including the California Rules of Professional Conduct as adopted by the State Bar of California, without regard to conflict of laws principles.
For the avoidance of doubt, the Financing and the SAFE instruments to be prepared and negotiated under this engagement are expected to be governed by the laws of the State of Delaware, and the Firm's advice on matters of Delaware General Corporation Law will be rendered in accordance with the substantive law of that jurisdiction. This Section 11, however, governs only the terms of the attorney-client relationship as set forth in this engagement letter and does not affect the choice of law applicable to the Financing or the SAFE instruments.
12. Limitation of Liability
The Firm's aggregate liability to the Company arising out of or relating to this engagement, whether in contract, tort, or otherwise, shall not exceed the total professional fees actually paid by the Company to the Firm under this engagement. This limitation applies to all claims, damages, losses, costs, and expenses of any nature whatsoever, including but not limited to direct, indirect, incidental, consequential, and special damages.
The limitation of liability set forth in this Section 12 does not apply to claims arising from the Firm's willful misconduct or gross negligence. Nothing in this Section 12 shall be construed to limit any rights or remedies available to the Company under applicable law in the event of willful misconduct or gross negligence by the Firm or any of its partners, associates, or employees.
13. Key Company Information (For Firm Records)
The Company has provided the following information for the Firm's records in connection with this engagement. The Company represents that the information set forth below is accurate and complete as of the date of this letter and agrees to notify the Firm promptly of any changes.
14. Miscellaneous
This letter constitutes the entire agreement between the Firm and the Company with respect to the engagement described herein and supersedes all prior discussions, proposals, correspondence, or agreements, whether oral or written, relating to the subject matter hereof. There are no representations, warranties, promises, or undertakings between the parties other than those expressly set forth in this letter.
Any amendment, modification, or supplement to this letter must be in writing and signed by both the Firm and the Company to be effective. No oral modification or waiver of any provision of this letter shall be binding upon either party.
This letter may be executed in counterparts, including by electronic signature or by facsimile, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. Delivery of a signed counterpart of this letter by email (in PDF or similar format) shall have the same force and effect as delivery of an original signed counterpart.
We look forward to working with you and the Lumos team on this matter. Please do not hesitate to contact Patricia Dunmore at (415) 788-6214 or pdunmore@calderwoodharkness.com, or Omar Siddiqui at (415) 788-6237 or osiddiqui@calderwoodharkness.com, with any questions regarding this letter or the Financing.
Sincerely,
CALDERWOOD & HARKNESS LLP
By: ________
Name: Patricia Dunmore
Title: Partner
By: ________
Name: George Trujillo
Title: Partner
ACKNOWLEDGMENT AND ACCEPTANCE
AGREED AND ACCEPTED by the undersigned, duly authorized on behalf of Lumos Analytics Inc.:
LUMOS ANALYTICS INC.
By: ________
Name: Priya Narasimhan
Title: Co-Founder, Chief Executive Officer & President
Date: ________
Company: Lumos Analytics Inc.
cc: Danielle Okoye, CFO, Lumos Analytics Inc. cc: George Trujillo, Partner, Calderwood & Harkness LLP cc: Omar Siddiqui, Associate, Calderwood & Harkness LLP
For the avoidance of doubt, the Client, Lumos Analytics Inc., is a portfolio company of Pinnacle Venture Fund II LP, and certain consents and reporting obligations to the sponsor may apply in connection with this matter.
Timekeeper Category | 2023 Hourly Rate
Partners | $895 per hour
Associates | $525 per hour
Paralegals | $295 per hour
Item | Details
Company Full Legal Name | Lumos Analytics Inc.
State of Incorporation | Delaware
Date of Incorporation | January 14, 2022
Delaware Secretary of State File No. | 7394821
Employer Identification Number (EIN) | 87-3491026
Registered Agent (DE) | CT Cascade Systems, 1209 Orange Street, Wilmington, DE 19801
Principal Place of Business | 340 Folsom Street, Suite 1100, San Francisco, CA 94105
Primary Contact | Priya Narasimhan, Co-Founder, CEO & President
Additional Contacts | Danielle Okoye, CFO; Elliot Marsh, CTO
Company Bank | Silicon Valley Commerce Bank, 3003 Tasman Drive, Santa Clara, CA 95054 (Relationship Manager: Trevor Quinlan)
Company Auditor / Tax Advisor | Ashgrove Equity Partners Accounting Group LLP (Engagement Partner: Karen Yoshida, CPA)
IP / Patent Advisor | Peralta IP Consulting LLC (Principal Consultant: Dr. Amir Farouk)