PRIVILEGED & CONFIDENTIAL ATTORNEY-CLIENT COMMUNICATION
CALDERWOOD & HARKNESS LLP 600 Lexington Avenue New York, NY 10022 Tel: (212) 555-4800
Fax: (212) 555-4801
www.calderwoodharkness.com
December 1, 2023
VIA EMAIL AND FIRST-CLASS MAIL
Priya Ramanathan, Esq. General Counsel Skybridge Fintech Ltd. 1400 Market Street, Suite 2200 Wilmington, DE 19801
Arjun Mehta Chief Executive Officer & Co-Founder Skybridge Fintech Ltd. 1400 Market Street, Suite 2200 Wilmington, DE 19801
AMENDMENT NO. 1 TO ENGAGEMENT LETTER Re: Expansion of Scope to Include intellectual Property Due Diligence Matter No. 1009-00001
Dear Ms. Ramanathan and Mr. Mehta:
This letter (this "Amendment No. 1" or this "Amendment") amends that certain engagement letter dated November 6, 2023 (the "Original Engagement Letter"), by and between Calderwood & Harkness LLP ("C&H" or the "Firm") and Skybridge Fintech Ltd. ("Skybridge" or the "Company"), pursuant to which C&H was engaged to represent the Company as issuer's counsel in connection with a proposed $60,000,000 convertible promissory note bridge financing (the "Financing").
The Original Engagement Letter identified Victoria Chambers as the Responsible Partner and Howard Quinn as the Billing Partner for the engagement and set forth the terms and conditions under which C&H agreed to provide legal services to the Company in connection with the Financing, including the negotiation, documentation, and closing of the Note Purchase Agreement and related transaction documents.
The parties now wish to amend the Original Engagement Letter to expand the scope of C&H's representation of the Company to include comprehensive intellectual property due diligence in connection with the Financing. This Amendment sets forth the terms of that expanded scope, identifies additional members of the engagement team who will be staffed on the matter, and addresses the application of the existing fee arrangements to the expanded scope of work.
Capitalized terms used but not otherwise defined in this Amendment No. 1 shall have the meanings ascribed to such terms in the Original Engagement Letter.
The terms of this Amendment No. 1 are as follows:
1. Expansion of Scope of Representation
The scope of C&H's representation of the Company as set forth in Section 1 of the Original Engagement Letter is hereby expanded to include comprehensive intellectual property due diligence on the Company's intellectual property portfolio in connection with the Financing. The expanded scope of representation shall encompass the following:
(a) Review and Analysis of IP Portfolio. A thorough review and analysis of the Company's patents, patent applications (whether provisional or non-provisional, and whether pending before the United States Patent and Trademark Office or any foreign patent office), trademarks, trademark applications, service marks, trade dress, copyrights, copyright registrations, trade secrets, domain names, and proprietary technology, in each case related to or used in connection with the Company's cloud-based payments orchestration and embedded lending platform, including the Company's core software products, application programming interfaces ("APIs"), data analytics tools, and related technology assets.
(b) IP Ownership and Assignment Chain Analysis. A review and analysis of the chain of ownership and assignment of all material intellectual property assets of the Company, including without limitation: (i) the identification and review of all invention assignment agreements, proprietary information and inventions agreements, and similar agreements entered into by the Company's founders, Arjun Mehta and Elena Vasquez, and any entities controlled by or affiliated with such founders; (ii) the identification and review of invention assignment and work-for-hire agreements entered into by current and former employees of the Company; and (iii) the identification and review of intellectual property assignment provisions contained in independent contractor agreements, consulting agreements, and statements of work entered into by the Company with third-party developers, consultants, and service providers who contributed to the development of the Company's technology.
(c) Identification of Gaps, Deficiencies, and Risks. The identification and assessment of any gaps, deficiencies, encumbrances, or risks in the Company's intellectual property portfolio that may be material to: (i) the investor syndicate's due diligence review of the Company and its assets; (ii) the representations and warranties to be made by the Company in Article III of the Note Purchase Agreement (including, without limitation, representations relating to ownership of intellectual property, absence of infringement, and sufficiency of IP rights); or (iii) the Company Disclosure Schedule to be delivered in connection with the execution and delivery of the Note Purchase Agreement.
(d) Open-Source Software Compliance Review. An assessment of the Company's use of open-source software components within its technology stack, including: (i) identification of open-source software libraries, frameworks, and tools incorporated into the Company's products and services; (ii) analysis of the applicable open-source license terms (including, without limitation, copyleft licenses such as GPL, LGPL, and AGPL, as well as permissive licenses such as MIT, BSD, and Apache 2.0); (iii) evaluation of the Company's compliance with the terms and conditions of such open-source licenses; and (iv) identification of any potential risks arising from the Company's use of open-source software, including risks related to copyleft obligations, patent grant provisions, or attribution requirements.
(e) Preparation of IP Diligence Deliverables. The preparation and delivery to the Company of: (i) a comprehensive IP Diligence Memorandum summarizing C&H's findings, conclusions, and recommendations with respect to the Company's intellectual property portfolio and the matters described in subsections (a) through (d) above; and (ii) a separate IP Ownership & Assignment Analysis memorandum providing a detailed assessment of the Company's chain of title to its material intellectual property assets, identifying any deficiencies or gaps in the assignment chain, and recommending remedial actions where appropriate. These deliverables are expected to be in draft form by no later than December 22, 2023, with final versions to be delivered prior to the anticipated closing of the Financing.
(f) Support for Company Disclosure Schedule. The IP due diligence conducted under this Amendment shall support the preparation of the Company Disclosure Schedule to be delivered in connection with the Note Purchase Agreement, including without limitation the schedules related to intellectual property ownership, registered intellectual property, material licenses, open-source software, and any IP-related litigation, claims, or disputes.
For the avoidance of doubt, the expanded scope of representation described in this Section 1 is limited to intellectual property due diligence in connection with the Financing and does not extend to the prosecution, maintenance, or enforcement of any intellectual property rights of the Company, nor does it include patent or trademark prosecution services, the filing or maintenance of any patent or trademark applications, or the rendering of formal freedom-to-operate or patentability opinions. Should the Company require any such services, a separate engagement letter or further amendment would be required.
2. Additional Staffing
In connection with the expanded scope of representation described in Section 1 above, the following attorneys from C&H's intellectual Property practice group are hereby added to the engagement team for this matter:
(a) Peter Vassiliev — Lead Associate, intellectual Property. Mr. Vassiliev will serve as the lead attorney for all IP due diligence matters under this Amendment. Mr. Vassiliev is a member of C&H's intellectual Property practice group and has substantial experience conducting IP due diligence in connection with venture capital financings, growth equity investments, and M&A transactions involving technology companies. Mr. Vassiliev will be the primary point of contact for Skybridge personnel with respect to the IP due diligence workstream and will be responsible for the preparation and delivery of the IP Diligence Memorandum and the IP Ownership & Assignment Analysis memorandum.
(b) Wendy Schultz — Working Associate, intellectual Property. Ms. Schultz will assist Mr. Vassiliev with all aspects of the IP due diligence review, including document review and analysis, legal research, database searches, open-source software compliance assessment, and the drafting of memoranda and summaries.
Mr. Vassiliev and Ms. Schultz will work under the overall supervision of Victoria Chambers (Responsible Partner) and in close coordination with Leonard Ashford (Of Counsel, Emerging Companies & Venture Capital), who serves as the substantive corporate lead for the Financing and who is responsible for the drafting and negotiation of the Note Purchase Agreement and related transaction documents. Mr. Vassiliev will coordinate with Nina Reyes (Senior Associate, Emerging Companies & Venture Capital) on the integration of IP due diligence findings into the Company Disclosure Schedule and the intellectual property representations and warranties in the Note Purchase Agreement.
The existing members of the engagement team identified in Section 2 of the Original Engagement Letter remain unchanged and continue to serve in their respective capacities as follows:
• Victoria Chambers — Responsible Partner
• Howard Quinn — Billing Partner
• Leonard Ashford — Of Counsel, Emerging Companies & Venture Capital
• Nina Reyes — Senior Associate, Emerging Companies & Venture Capital
3. Fees and Billing
The fee arrangements set forth in the Original Engagement Letter shall continue to apply to the engagement as amended by this Amendment No. 1, subject to the following clarifications:
(a) Fee Cap. The fee cap of Two Hundred Seventy-Five Thousand Dollars ($275,000) (plus disbursements) for the Financing, as set forth in Section 3 of the Original Engagement Letter, shall remain unchanged and shall apply to all legal services performed under the Original Engagement Letter as amended by this Amendment No. 1, including all IP due diligence work described in Section 1 of this Amendment. The Firm anticipates that the IP due diligence workstream will require approximately $35,000 to $50,000 in attorney time, which will be absorbed within the existing fee cap.
(b) No Separate Budget for IP Diligence. The IP due diligence work performed by Mr. Vassiliev, Ms. Schultz, and any other attorneys or professionals assisting with the IP due diligence workstream shall be billed against the existing $275,000 fee cap. No additional fee cap, separate budget, or supplemental fee arrangement is established for the expanded scope of representation described in this Amendment.
(c) Retainer. The retainer in the amount of Seventy-Five Thousand Dollars ($75,000), which was received from Skybridge on November 15, 2023 and is being held in C&H's client trust account, shall continue to be applied against fees incurred under the engagement as amended by this Amendment No. 1 in accordance with the terms of the Original Engagement Letter.
(d) Billing Partner and Invoicing. Howard Quinn remains the Billing Partner for this engagement. All fees and disbursements for the expanded IP due diligence scope will be included in the monthly billings for Matter No. 1009-00001. There will be no separate matter number or billing arrangement for the IP due diligence work; all time entries and disbursements will be reflected on a single consolidated monthly invoice for the engagement.
(e) Disbursements. Disbursements incurred in connection with the IP due diligence work, including without limitation third-party intellectual property search fees (e.g., patent and trademark database searches), database access fees, commercial IP analytics tool subscriptions, court and administrative filing search fees, and similar out-of-pocket costs, shall remain reimbursable to C&H in addition to and separate from the $275,000 fee cap, consistent with the disbursement reimbursement terms set forth in Section 3(c) of the Original Engagement Letter.
4. No Other Modifications
Except as expressly modified by this Amendment No. 1, all terms and conditions of the Original Engagement Letter dated November 6, 2023 shall remain in full force and effect and are hereby ratified and confirmed in all respects. Without limiting the generality of the foregoing, the parties acknowledge and agree that the following provisions of the Original Engagement Letter, among others, remain unchanged and continue to apply to C&H's representation of the Company as amended by this Amendment No. 1:
(a) the governing law provision (State of Delaware);
(b) the dispute resolution provisions, including the arbitration clause;
(c) the confidentiality and privilege protections;
(d) the limitations of liability provisions;
(e) the provisions governing the retention and return of client documents and files;
(f) the provisions regarding withdrawal from representation; and
(g) the provisions regarding the Company's obligation to provide timely access to information, documents, and personnel necessary for C&H to perform the engagement.
The Original Engagement Letter, as amended by this Amendment No. 1, constitutes the entire agreement between the Firm and the Company with respect to the scope and terms of C&H's representation of the Company in connection with the Financing and supersedes all prior or contemporaneous oral or written communications, proposals, or representations with respect to the subject matter hereof.
5. Conflicts Confirmation
C&H has conducted an updated conflicts check in connection with the expansion of the scope of representation described in this Amendment, including the addition of Mr. Vassiliev and Ms. Schultz to the engagement team and the inclusion of IP due diligence within the scope of the Firm's representation of the Company. Based on this updated conflicts review, no new conflicts of interest have been identified that would prevent or limit C&H's ability to represent the Company in connection with the expanded scope.
The initial Conflict Check Memorandum dated November 3, 2023, which was prepared in connection with the Original Engagement Letter and confirmed the absence of conflicts adverse to the Company with respect to the Financing, has been reviewed and supplemented to account for the expanded IP due diligence scope. The Firm confirms that the expansion of scope does not introduce any new adverse party relationships or other conflicts that would require disclosure to, or consent from, the Company under the New York Rules of Professional Conduct or the Delaware Lawyers' Rules of Professional Conduct.
If the foregoing accurately reflects your understanding of the terms of this Amendment No. 1 to the Original Engagement Letter, please indicate your agreement by signing and returning a copy of this letter to the undersigned at your earliest convenience. This Amendment shall be effective as of the date first written above upon execution by both parties.
We look forward to continuing to work with Skybridge on the Financing and to supporting the Company through the IP due diligence process. Please do not hesitate to contact Victoria Chambers at (212) 555-4812 or vchambers@calderwoodharkness.com, or Peter Vassiliev at (212) 555-4839 or pvassiliev@calderwoodharkness.com, with any questions.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Name: Victoria Chambers
Title: Partner
Date: ________
Calderwood & Harkness LLP 600 Lexington Avenue New York, NY 10022
ACKNOWLEDGMENT AND AGREEMENT
The undersigned, on behalf of Skybridge Fintech Ltd., hereby acknowledges receipt of Amendment No. 1 to the Engagement Letter dated November 6, 2023 between Calderwood & Harkness LLP and Skybridge Fintech Ltd., and agrees to the terms and conditions set forth therein.
Acknowledged and Agreed to by Skybridge Fintech Ltd.:
By: ________
Name: Priya Ramanathan
Title: General Counsel
Date: ________
Skybridge Fintech Ltd. 1400 Market Street, Suite 2200 Wilmington, DE 19801
By: ________
Name: Arjun Mehta
Title: Chief Executive Officer & Co-Founder
Date: ________
Skybridge Fintech Ltd. 1400 Market Street, Suite 2200 Wilmington, DE 19801
cc: (via email)
Howard Quinn, Billing Partner, Calderwood & Harkness LLP Leonard Ashford, Of Counsel, Emerging Companies & Venture Capital, Calderwood & Harkness LLP Peter Vassiliev, Lead Associate, intellectual Property, Calderwood & Harkness LLP David Lindstrom, Chief Financial Officer, Skybridge Fintech Ltd. Marcus Tillman, Vice President, Corporate Development, Skybridge Fintech Ltd.
For the avoidance of doubt, the Client, Skybridge Fintech Ltd., 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.