1042-00003 · Whitmore & Falk LLP · Closing

matter-closing-letter.docx DOCUMENT Litigation

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CALDERWOOD & HARKNESS LLP Attorneys at Law

700 Louisiana Street, Suite 3400 Houston, Texas 77002 Telephone: (713) 547-8200 Facsimile: (713) 547-8201

New York — 1251 Avenue of the Americas, 42nd Floor, New York, NY 10020 Palo Alto — 525 University Avenue, Suite 800, Palo Alto, CA 94301

www.calderwoodharkness.com

September 15, 2023

Via Email and U.S. Mail

Daniel Oshiro, Esq. General Counsel Brightfield Cloud Services Inc. 4200 Bluebonnet Parkway, Suite 1100 Austin, TX 78745

Re: Closure of Matter No. 1042-00003 — Proposed Inbound Technology License from Nexilis Innovations Ltd. (DeltaSync Platform) Billing Code: BCS-NEXILIS-LIC-2023

Dear Daniel:

1. Purpose of Letter; Confirmation of Termination of Engagement

This letter confirms the formal closure of Calderwood & Harkness LLP's ("Calderwood & Harkness" or the "Firm") engagement on behalf of Brightfield Cloud Services Inc. ("Brightfield" or the "Company") in connection with the proposed exclusive inbound technology license of the DeltaSync distributed-cache orchestration platform (the "DeltaSync Platform") from Nexilis Innovations Ltd. ("Nexilis"). The purpose of this correspondence is to memorialize the circumstances giving rise to the closure, to summarize the work performed during the engagement, and to address certain residual administrative and legal obligations arising from the termination of the matter.

As you are aware, following the final negotiation call held on September 14, 2023, the parties reached an impasse on the permissible scope of the field-of-use restrictions to be included in the Technology License Agreement (the "License Agreement"). Despite extensive good-faith negotiations spanning approximately three months, the parties were ultimately unable to reconcile their respective positions on this critical commercial term.

Specifically, Nexilis insisted throughout the latter stages of the negotiation that any license granted to Brightfield be restricted in its scope such that Brightfield would be permitted to deploy the DeltaSync Platform solely for the benefit of end-customers operating in (a) financial services, as defined by Standard Industrial Classification ("SIC") codes 6000 through 6799, and (b) healthcare, as defined by SIC codes 8000 through 8099. Brightfield, on the other hand, required that the field of use encompass all enterprise SaaS verticals without industry restriction, a position that was commercially necessary to support the industry-agnostic architecture and go-to-market strategy of Brightfield's Stratos cloud-management platform.

In an effort to bridge this gap, Brightfield advanced a tiered-unlock compromise proposal on September 5, 2023, under which Brightfield would pay a base license fee of $5,200,000 for the right to deploy DeltaSync for financial services and healthcare end-customers, coupled with an option — exercisable at Brightfield's discretion — to expand the licensed field of use to all enterprise verticals upon payment of an additional $4,800,000, for a total consideration of $10,000,000. This proposal represented a meaningful premium over the originally proposed $8,000,000 aggregate license fee and was designed to address Nexilis's stated concern regarding the preservation of field-of-use exclusivity for its existing licensees and strategic partners.

Notwithstanding these efforts, Nexilis formally rejected the tiered-unlock proposal on September 10, 2023, through a written communication from its outside counsel, Whitmore & Falk LLP. In its response, Nexilis cited existing exclusivity commitments to certain portfolio companies of Ridgeline Ventures, one of Nexilis's principal investors, in other enterprise verticals as the basis for its inability to accommodate Brightfield's expanded field-of-use requirements, even on a contingent or option-based structure.

The parties convened one final negotiation call on September 14, 2023, during which both sides confirmed that no further movement was possible on the field-of-use issue. At the conclusion of that call, Brightfield determined not to proceed with the proposed transaction on the terms available. The Firm concurs that this determination was prudent given the significant gap remaining between the parties' respective positions and the commercial constraints discussed in greater detail in Section 8 of this letter.

2. Summary of Engagement and Negotiation Timeline

Calderwood & Harkness was formally engaged by Brightfield on June 8, 2023, pursuant to an engagement letter of even date, to represent the Company as prospective licensee in the negotiation and documentation of an exclusive, fully paid-up technology license from Nexilis for its patented DeltaSync Platform. The DeltaSync Platform is a distributed-cache orchestration system comprising fourteen (14) issued United States utility patents, numbered U.S. Patent Nos. 11,234,567 through 11,234,580 (collectively, the "Issued Patents"), and six (6) pending patent applications, numbered Application Nos. 17/901,201 through 17/901,206 (collectively, the "Pending Applications," and together with the Issued Patents, the "Licensed IP").

The proposed aggregate license fee under the initial term sheet was $8,000,000, structured as a $3,200,000 upfront payment due at execution of the License Agreement, followed by three annual maintenance and support payments of $1,600,000 each, payable on each of the first, second, and third anniversaries of the effective date. The proposed license term was five (5) years from the effective date, with successive two (2)-year automatic renewal options, subject to either party's right to terminate upon not less than one hundred eighty (180) days' prior written notice before the expiration of the then-current term.

The engagement encompassed a comprehensive scope of services, including patent portfolio due diligence, freedom-to-operate analysis, drafting and negotiation of the License Agreement and ancillary transaction documents, and coordination with Brightfield's internal technology and business teams on commercial terms. Set forth below is a chronological summary of the key milestones during the engagement:

June 12, 2023: Nexilis delivered an initial term sheet to Brightfield via its outside counsel, Whitmore & Falk LLP. The term sheet outlined the principal business terms of the proposed license, including the license fee, payment structure, term, renewal provisions, and a preliminary description of the licensed intellectual property. The term sheet was silent on field-of-use restrictions.

June 19, 2023: A Mutual Nondisclosure Agreement (the "NDA") was negotiated, finalized, and executed between Brightfield and Nexilis, enabling the exchange of Confidential Information (as defined in the NDA) in furtherance of the proposed transaction.

June 26, 2023: Following the execution of the NDA and receipt of initial technical documentation from Nexilis, Calderwood & Harkness, in consultation with Brightfield, retained Crestline Patent Analytics LLC ("Crestline") to conduct a freedom-to-operate analysis and a comprehensive patent portfolio assessment of the Licensed IP. Crestline's scope of work included claim mapping, prior art analysis, and an evaluation of the strength and enforceability of the Issued Patents.

July 10, 2023: Crestline delivered its preliminary patent landscape memorandum (the "Crestline Memorandum"). The Crestline Memorandum concluded that the Issued Patents were generally well-drafted and appeared enforceable, with only minor prior art concerns identified with respect to U.S. Patent No. 11,234,574 (relating to cache-invalidation protocols). The memorandum confirmed that Brightfield's existing Stratos platform technology did not infringe any of the Licensed IP and that the DeltaSync Platform would be additive to Brightfield's existing technology stack.

July 17, 2023: Calderwood & Harkness delivered Draft 1 of the Technology License Agreement to Whitmore & Falk LLP. Draft 1 incorporated a broad, unrestricted field-of-use provision granting Brightfield the right to deploy the DeltaSync Platform in connection with any and all enterprise applications of its Stratos platform, without limitation as to industry, vertical, or end-customer classification. Draft 1 also included customary provisions regarding intellectual property ownership, representations and warranties of the licensor, indemnification, limitation of liability, audit rights, and termination.

July 31, 2023: Whitmore & Falk returned a redline of the License Agreement (Draft 2), which introduced substantial revisions. Most significantly, Draft 2 inserted narrow field-of-use restrictions limiting Brightfield's deployment of DeltaSync to end-customers operating exclusively in the financial services vertical (SIC codes 6000–6799) and the healthcare vertical (SIC codes 8000–8099). In addition, Draft 2 modified the representations and warranties section, narrowed the scope of licensor's indemnification obligations, and introduced a most-favored-licensee provision conditioned upon Brightfield's acceptance of the restricted field of use.

August 14, 2023: Calderwood & Harkness, following extensive consultation with the Brightfield team, delivered Draft 3 of the License Agreement to Whitmore & Falk. Draft 3 restored the unrestricted field-of-use language from Draft 1 but incorporated compromise provisions designed to address certain of Nexilis's stated concerns, including a limited carve-out for specific named licensees of Nexilis, a mutual non-compete with respect to competing distributed-cache platforms, and an enhanced minimum royalty guarantee in the event that Brightfield's deployment exceeded certain revenue thresholds.

August 28, 2023: The parties exchanged competing field-of-use term sheets in an effort to isolate and resolve the remaining open issues. At the conclusion of this exchange, four material issues remained unresolved: (i) the permissible scope of the field of use; (ii) the treatment of Nexilis's existing exclusivity commitments to Ridgeline Ventures portfolio companies; (iii) the availability and pricing of expansion options for additional verticals; and (iv) the allocation of risk for third-party infringement claims arising in verticals outside the narrow field of use proposed by Nexilis.

September 5, 2023: Brightfield delivered the tiered-unlock compromise proposal described in Section 1 of this letter, which proposed a two-phase licensing structure with a total consideration of $10,000,000.

September 10, 2023: Whitmore & Falk, on behalf of Nexilis, formally rejected the tiered-unlock proposal in writing, citing Nexilis's existing contractual commitments to Ridgeline Ventures portfolio companies as an insurmountable barrier to granting Brightfield any expansion rights beyond the financial services and healthcare verticals.

September 14, 2023: The parties convened a final negotiation call. Participants included Catherine Bloom and Wendy Schultz from Calderwood & Harkness; Daniel Oshiro and Marcus Vail from Brightfield; John Whitmore and Alexandra Falk from Whitmore & Falk LLP; and representatives of Nexilis. During the call, both sides confirmed that no further concessions were possible on the field-of-use issue. The call concluded with the mutual acknowledgment that the parties had reached an impasse.

September 15, 2023: Matter closed.

The foregoing timeline reflects the principal milestones and does not purport to capture every communication, internal deliberation, or working session that occurred during the engagement. Brightfield's matter file, which is being maintained in accordance with the Firm's retention policy described in Section 5 below, contains a complete record of all work product, correspondence, and documentation generated or received during the engagement.

3. Calderwood & Harkness Engagement Team

The following attorneys comprised the Calderwood & Harkness engagement team on this matter and contributed to the work performed during the course of the representation:

Catherine Bloom served as the Responsible Partner on the engagement and maintained overall supervisory authority over the representation, including direct participation in all principal negotiation sessions and review of all substantive work product. Alan Ngo served as Billing Partner and provided strategic counsel on technology licensing structures, drawing on his experience with enterprise SaaS licensing transactions. Wendy Schultz served as Lead Associate and was responsible for the day-to-day management of the engagement, including the preparation of all drafts of the License Agreement, coordination with Crestline Patent Analytics LLC, and preparation of internal memoranda. Omar Siddiqui served as Working Associate and contributed to patent portfolio analysis, prior art research, and the preparation of ancillary transaction documentation.

Should you have any questions regarding timekeeping, billing, or the scope of services provided by any member of the engagement team, please do not hesitate to contact Catherine Bloom or Alan Ngo directly.

4. Obligations Under the Mutual NDA — Return and Destruction of Confidential Information

As noted in Section 2 above, Brightfield and Nexilis entered into a Mutual Nondisclosure Agreement effective as of June 19, 2023. Calderwood & Harkness, acting in its capacity as outside counsel to Brightfield, received Confidential Information of Nexilis in connection with the proposed transaction. The Confidential Information received by the Firm included, without limitation, technical specifications relating to the DeltaSync Platform's architecture, cache-invalidation algorithms, and performance benchmarks; patent prosecution files for the Issued Patents and the Pending Applications, including file histories, examiner correspondence, and claim charts; business and financial data relating to Nexilis's licensing revenues, existing licensee arrangements, and projected commercialization timelines; and information concerning Nexilis's corporate structure, capitalization, and investor relationships.

In accordance with the return-or-destroy provisions set forth in Section 7 of the NDA, Calderwood & Harkness will promptly undertake to return or destroy all Confidential Information of Nexilis in its possession, custody, or control. The Firm will complete this process within thirty (30) days of the date of this letter and will provide written certification of such return or destruction as required by Section 7(b) of the NDA. Such certification will be directed to Whitmore & Falk LLP as counsel for Nexilis, with a copy to Brightfield.

We also note that Brightfield, as a party to the NDA, has independent obligations to return or destroy all Confidential Information of Nexilis in its possession, custody, or control. We recommend that Brightfield promptly undertake the same process and coordinate directly with Nexilis or Whitmore & Falk LLP to confirm compliance with these obligations. Brightfield's internal teams — including, in particular, the engineering and product teams that received access to the DeltaSync technical documentation — should be notified of the requirement to purge any copies of Nexilis Confidential Information from their files, systems, and personal repositories.

We note that the standard carve-outs set forth in the NDA apply to the return-or-destroy obligation. Specifically, the obligation does not extend to Confidential Information that (a) has become publicly available other than through a breach of the NDA by the receiving party, (b) was independently developed by the receiving party without reference to or use of the disclosing party's Confidential Information, or (c) is required to be retained by applicable law, regulation, or professional obligation. With respect to clause (c), Calderwood & Harkness may retain copies of Confidential Information to the extent necessary to comply with the Firm's obligations under the Texas Disciplinary Rules of Professional Conduct and its internal document retention and compliance policies; provided, however, that any such retained materials will continue to be treated as Confidential Information in accordance with the terms of the NDA.

Finally, we wish to remind Brightfield that the confidentiality obligations set forth in the NDA survive the termination of the negotiations for a period of two (2) years from the effective date of the NDA — that is, through and including June 19, 2025. During this period, Brightfield and its personnel, agents, and representatives must continue to observe the confidentiality restrictions imposed by the NDA with respect to any Confidential Information of Nexilis that was received during the course of the engagement, regardless of whether such information has been returned or destroyed. We encourage Brightfield to ensure that all individuals within the organization who had access to Nexilis Confidential Information are made aware of this ongoing obligation.

5. File Retention Policy

Calderwood & Harkness will retain the matter file for Matter No. 1042-00003, including both physical and electronic records, in accordance with the Firm's standard document retention policies as set forth in the Firm's Records Management Policy (as amended through January 1, 2023).

Under the Firm's retention policy, matter files will be maintained for a period of seven (7) years from the date of matter closure — in this case, through September 15, 2030. Upon expiration of the seven-year retention period, the Firm may destroy the matter file, including all physical documents and electronic records, without further notice to Brightfield, unless Brightfield has, prior to such destruction, requested that the files be transferred to Brightfield or has provided the Firm with alternative retention or disposition instructions.

Brightfield may request a copy of, or access to, the matter file at any time during the retention period by contacting Catherine Bloom or Alan Ngo. The Firm will accommodate such requests within a reasonable period of time, subject to applicable charges for copying and production, which will be billed at cost.

We wish to confirm that all work product generated by Calderwood & Harkness in connection with this engagement — including, without limitation, legal memoranda, draft agreements, correspondence, research materials, and internal analysis — remains the property of Brightfield, consistent with the terms of the engagement letter dated June 8, 2023. Notwithstanding the foregoing, Calderwood & Harkness retains the right to maintain copies of such work product as may be required by applicable professional responsibility rules, the Firm's internal compliance and quality assurance policies, and the Firm's obligations under its professional liability insurance program.

6. Outstanding Invoicing and Fees

Calderwood & Harkness will issue a final invoice covering all professional fees and disbursements incurred through the date of matter closure (September 15, 2023). The final invoice, with a detailed breakdown of charges by timekeeper, activity, and date, will follow under separate cover and will be transmitted to Daniel Oshiro and the Brightfield accounts payable department in accordance with the billing procedures established at the commencement of the engagement.

For your reference, we provide the following summary of total fees and costs billed in connection with this matter:

The total professional fees of $197,450.00 reflect the aggregate time charges of all members of the engagement team from June 8, 2023, through September 15, 2023. The disbursement of $42,500.00 represents the fees of Crestline Patent Analytics LLC for the freedom-to-operate analysis and patent portfolio assessment described in Section 2 above, which was incurred by Calderwood & Harkness on behalf of Brightfield and passed through at cost in accordance with the terms of the engagement letter.

Payment terms for the final invoice are as set forth in the engagement letter dated June 8, 2023. If you have any questions regarding the invoicing or require additional detail regarding any specific charges, please contact Alan Ngo at the Palo Alto office.

7. No Ongoing Representation; Potential Future Engagement

With the closure of Matter No. 1042-00003, Calderwood & Harkness's representation of Brightfield Cloud Services Inc. in connection with the proposed DeltaSync technology license has concluded. Effective as of the date of this letter, the attorney-client relationship between Calderwood & Harkness and Brightfield with respect to this matter has terminated.

The Firm wishes to make clear that it has no ongoing obligation to monitor developments related to the DeltaSync Platform, Nexilis Innovations Ltd., or any related intellectual property matters, including, without limitation, changes in the status of the Issued Patents or Pending Applications, the prosecution or abandonment of any Nexilis patent applications, or the execution of license agreements between Nexilis and any third parties. Similarly, the Firm has no obligation to monitor changes in applicable law, regulations, or industry standards that may affect Brightfield's technology licensing strategy or intellectual property position. Unless and until a new engagement is agreed upon in writing between Calderwood & Harkness and Brightfield, the Firm's only obligations with respect to this matter are the administrative obligations described in Sections 4, 5, and 6 of this letter.

Should Brightfield wish to re-engage Calderwood & Harkness in connection with any future licensing opportunity involving the DeltaSync Platform or similar distributed-cache or data-orchestration technology, or in connection with any other intellectual property, technology transactions, or corporate matter, the Firm would be pleased to discuss the terms of a new engagement at that time. Any such engagement would be subject to the execution of a new engagement letter, a conflicts check, and such other procedures as may be required by the Firm's intake and compliance policies.

8. Strategic Observations

While this letter is principally administrative in nature, we thought it would be useful to include a brief observation regarding the commercial context that informed Brightfield's decision to decline the transaction on the terms available.

As noted above, the field-of-use restriction issue that ultimately caused the negotiations to fail arose from Nexilis's existing contractual commitments to its investors, and in particular to portfolio companies associated with Ridgeline Ventures. These commitments constrained Nexilis's ability to grant Brightfield the broad, enterprise-wide deployment rights that were necessary to justify the proposed $8,000,000 investment (or, under the tiered-unlock proposal, the $10,000,000 total consideration). Given that Brightfield's Stratos cloud-management platform is industry-agnostic by design and serves enterprise customers across more than a dozen verticals, a field of use limited to financial services and healthcare would have restricted the addressable revenue base for DeltaSync-enhanced Stratos deployments to approximately $38,000,000 in annual recurring revenue ("ARR"), representing only approximately 26.8% of Brightfield's total ARR of approximately $142,000,000. Under those circumstances, the economics of the proposed license were, in our view, commercially unjustifiable, and Brightfield's decision not to proceed was both reasonable and well-founded.

We recognize that the DeltaSync Platform represents a compelling technology, and we would encourage Brightfield to continue to monitor the market for alternative distributed-cache orchestration solutions that may offer comparable functionality without the field-of-use constraints that prevented this transaction from closing.

On a personal note, it has been a privilege to represent Brightfield in this matter. We greatly appreciate the opportunity to have worked with you, Daniel, and with the broader Brightfield team, including Priya Chandrasekaran, Marcus Vail, and Lisa Redmond, each of whom contributed meaningfully to the negotiation process and was a pleasure to collaborate with throughout the engagement. We also wish to acknowledge the involvement and support of Graham Hollister at Vantage Summit Capital Partners, LP, whose strategic perspective was valuable during the course of the negotiations.

We hope to have the opportunity to work with Brightfield again in the future, and we remain available should any questions or issues arise in connection with the matters addressed in this letter.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Catherine Bloom Partner, intellectual Property Calderwood & Harkness LLP 700 Louisiana Street, Suite 3400 Houston, TX 77002 Direct: (713) 547-8224

Email: cbloom@calderwoodharkness.com

cc:

Priya Chandrasekaran, Chief Executive Officer, Brightfield Cloud Services Inc.

Lisa Redmond, Vice President, Corporate Development & Strategy, Brightfield Cloud Services Inc.

Graham Hollister, Managing Director, Vantage Summit Capital Partners, LP

Alan Ngo, Partner, Calderwood & Harkness LLP

Wendy Schultz, Senior Associate, Calderwood & Harkness LLP

Encl.: None (final invoice to follow under separate cover)

Attorney	Role	Practice Group	Office
Catherine Bloom	Responsible Partner	Intellectual Property	Houston
Alan Ngo	Billing Partner	Intellectual Property	Palo Alto
Wendy Schultz	Lead Associate	Intellectual Property	Houston
Omar Siddiqui	Working Associate	Intellectual Property	Houston
Category	Amount
Total Professional Fees (attorney time)	$197,450.00
Disbursements — Crestline Patent Analytics LLC engagement	$42,500.00
Total Amount Billed	$239,950.00

CALDERWOOD & HARKNESS LLP Attorneys at Law
700 Louisiana Street, Suite 3400 Houston, Texas 77002 Telephone: (713) 547-8200 Facsimile: (713) 547-8201
New York — 1251 Avenue of the Americas, 42nd Floor, New York, NY 10020 Palo Alto — 525 University Avenue, Suite 800, Palo Alto, CA 94301
www.calderwoodharkness.com
September 15, 2023
Via Email and U.S. Mail
Daniel Oshiro, Esq. General Counsel Brightfield Cloud Services Inc. 4200 Bluebonnet Parkway, Suite 1100 Austin, TX 78745
Re: Closure of Matter No. 1042-00003 — Proposed Inbound Technology License from Nexilis Innovations Ltd. (DeltaSync Platform) Billing Code: BCS-NEXILIS-LIC-2023
Dear Daniel:
1. Purpose of Letter; Confirmation of Termination of Engagement
This letter confirms the formal closure of Calderwood & Harkness LLP's ("Calderwood & Harkness" or the "Firm") engagement on behalf of Brightfield Cloud Services Inc. ("Brightfield" or the "Company") in connection with the proposed exclusive inbound technology license of the DeltaSync distributed-cache orchestration platform (the "DeltaSync Platform") from Nexilis Innovations Ltd. ("Nexilis"). The purpose of this correspondence is to memorialize the circumstances giving rise to the closure, to summarize the work performed during the engagement, and to address certain residual administrative and legal obligations arising from the termination of the matter.
As you are aware, following the final negotiation call held on September 14, 2023, the parties reached an impasse on the permissible scope of the field-of-use restrictions to be included in the Technology License Agreement (the "License Agreement"). Despite extensive good-faith negotiations spanning approximately three months, the parties were ultimately unable to reconcile their respective positions on this critical commercial term.
Specifically, Nexilis insisted throughout the latter stages of the negotiation that any license granted to Brightfield be restricted in its scope such that Brightfield would be permitted to deploy the DeltaSync Platform solely for the benefit of end-customers operating in (a) financial services, as defined by Standard Industrial Classification ("SIC") codes 6000 through 6799, and (b) healthcare, as defined by SIC codes 8000 through 8099. Brightfield, on the other hand, required that the field of use encompass all enterprise SaaS verticals without industry restriction, a position that was commercially necessary to support the industry-agnostic architecture and go-to-market strategy of Brightfield's Stratos cloud-management platform.
In an effort to bridge this gap, Brightfield advanced a tiered-unlock compromise proposal on September 5, 2023, under which Brightfield would pay a base license fee of $5,200,000 for the right to deploy DeltaSync for financial services and healthcare end-customers, coupled with an option — exercisable at Brightfield's discretion — to expand the licensed field of use to all enterprise verticals upon payment of an additional $4,800,000, for a total consideration of $10,000,000. This proposal represented a meaningful premium over the originally proposed $8,000,000 aggregate license fee and was designed to address Nexilis's stated concern regarding the preservation of field-of-use exclusivity for its existing licensees and strategic partners.
Notwithstanding these efforts, Nexilis formally rejected the tiered-unlock proposal on September 10, 2023, through a written communication from its outside counsel, Whitmore & Falk LLP. In its response, Nexilis cited existing exclusivity commitments to certain portfolio companies of Ridgeline Ventures, one of Nexilis's principal investors, in other enterprise verticals as the basis for its inability to accommodate Brightfield's expanded field-of-use requirements, even on a contingent or option-based structure.
The parties convened one final negotiation call on September 14, 2023, during which both sides confirmed that no further movement was possible on the field-of-use issue. At the conclusion of that call, Brightfield determined not to proceed with the proposed transaction on the terms available. The Firm concurs that this determination was prudent given the significant gap remaining between the parties' respective positions and the commercial constraints discussed in greater detail in Section 8 of this letter.
2. Summary of Engagement and Negotiation Timeline
Calderwood & Harkness was formally engaged by Brightfield on June 8, 2023, pursuant to an engagement letter of even date, to represent the Company as prospective licensee in the negotiation and documentation of an exclusive, fully paid-up technology license from Nexilis for its patented DeltaSync Platform. The DeltaSync Platform is a distributed-cache orchestration system comprising fourteen (14) issued United States utility patents, numbered U.S. Patent Nos. 11,234,567 through 11,234,580 (collectively, the "Issued Patents"), and six (6) pending patent applications, numbered Application Nos. 17/901,201 through 17/901,206 (collectively, the "Pending Applications," and together with the Issued Patents, the "Licensed IP").
The proposed aggregate license fee under the initial term sheet was $8,000,000, structured as a $3,200,000 upfront payment due at execution of the License Agreement, followed by three annual maintenance and support payments of $1,600,000 each, payable on each of the first, second, and third anniversaries of the effective date. The proposed license term was five (5) years from the effective date, with successive two (2)-year automatic renewal options, subject to either party's right to terminate upon not less than one hundred eighty (180) days' prior written notice before the expiration of the then-current term.
The engagement encompassed a comprehensive scope of services, including patent portfolio due diligence, freedom-to-operate analysis, drafting and negotiation of the License Agreement and ancillary transaction documents, and coordination with Brightfield's internal technology and business teams on commercial terms. Set forth below is a chronological summary of the key milestones during the engagement:
June 12, 2023: Nexilis delivered an initial term sheet to Brightfield via its outside counsel, Whitmore & Falk LLP. The term sheet outlined the principal business terms of the proposed license, including the license fee, payment structure, term, renewal provisions, and a preliminary description of the licensed intellectual property. The term sheet was silent on field-of-use restrictions.
June 19, 2023: A Mutual Nondisclosure Agreement (the "NDA") was negotiated, finalized, and executed between Brightfield and Nexilis, enabling the exchange of Confidential Information (as defined in the NDA) in furtherance of the proposed transaction.
June 26, 2023: Following the execution of the NDA and receipt of initial technical documentation from Nexilis, Calderwood & Harkness, in consultation with Brightfield, retained Crestline Patent Analytics LLC ("Crestline") to conduct a freedom-to-operate analysis and a comprehensive patent portfolio assessment of the Licensed IP. Crestline's scope of work included claim mapping, prior art analysis, and an evaluation of the strength and enforceability of the Issued Patents.
July 10, 2023: Crestline delivered its preliminary patent landscape memorandum (the "Crestline Memorandum"). The Crestline Memorandum concluded that the Issued Patents were generally well-drafted and appeared enforceable, with only minor prior art concerns identified with respect to U.S. Patent No. 11,234,574 (relating to cache-invalidation protocols). The memorandum confirmed that Brightfield's existing Stratos platform technology did not infringe any of the Licensed IP and that the DeltaSync Platform would be additive to Brightfield's existing technology stack.
July 17, 2023: Calderwood & Harkness delivered Draft 1 of the Technology License Agreement to Whitmore & Falk LLP. Draft 1 incorporated a broad, unrestricted field-of-use provision granting Brightfield the right to deploy the DeltaSync Platform in connection with any and all enterprise applications of its Stratos platform, without limitation as to industry, vertical, or end-customer classification. Draft 1 also included customary provisions regarding intellectual property ownership, representations and warranties of the licensor, indemnification, limitation of liability, audit rights, and termination.
July 31, 2023: Whitmore & Falk returned a redline of the License Agreement (Draft 2), which introduced substantial revisions. Most significantly, Draft 2 inserted narrow field-of-use restrictions limiting Brightfield's deployment of DeltaSync to end-customers operating exclusively in the financial services vertical (SIC codes 6000–6799) and the healthcare vertical (SIC codes 8000–8099). In addition, Draft 2 modified the representations and warranties section, narrowed the scope of licensor's indemnification obligations, and introduced a most-favored-licensee provision conditioned upon Brightfield's acceptance of the restricted field of use.
August 14, 2023: Calderwood & Harkness, following extensive consultation with the Brightfield team, delivered Draft 3 of the License Agreement to Whitmore & Falk. Draft 3 restored the unrestricted field-of-use language from Draft 1 but incorporated compromise provisions designed to address certain of Nexilis's stated concerns, including a limited carve-out for specific named licensees of Nexilis, a mutual non-compete with respect to competing distributed-cache platforms, and an enhanced minimum royalty guarantee in the event that Brightfield's deployment exceeded certain revenue thresholds.
August 28, 2023: The parties exchanged competing field-of-use term sheets in an effort to isolate and resolve the remaining open issues. At the conclusion of this exchange, four material issues remained unresolved: (i) the permissible scope of the field of use; (ii) the treatment of Nexilis's existing exclusivity commitments to Ridgeline Ventures portfolio companies; (iii) the availability and pricing of expansion options for additional verticals; and (iv) the allocation of risk for third-party infringement claims arising in verticals outside the narrow field of use proposed by Nexilis.
September 5, 2023: Brightfield delivered the tiered-unlock compromise proposal described in Section 1 of this letter, which proposed a two-phase licensing structure with a total consideration of $10,000,000.
September 10, 2023: Whitmore & Falk, on behalf of Nexilis, formally rejected the tiered-unlock proposal in writing, citing Nexilis's existing contractual commitments to Ridgeline Ventures portfolio companies as an insurmountable barrier to granting Brightfield any expansion rights beyond the financial services and healthcare verticals.
September 14, 2023: The parties convened a final negotiation call. Participants included Catherine Bloom and Wendy Schultz from Calderwood & Harkness; Daniel Oshiro and Marcus Vail from Brightfield; John Whitmore and Alexandra Falk from Whitmore & Falk LLP; and representatives of Nexilis. During the call, both sides confirmed that no further concessions were possible on the field-of-use issue. The call concluded with the mutual acknowledgment that the parties had reached an impasse.
September 15, 2023: Matter closed.
The foregoing timeline reflects the principal milestones and does not purport to capture every communication, internal deliberation, or working session that occurred during the engagement. Brightfield's matter file, which is being maintained in accordance with the Firm's retention policy described in Section 5 below, contains a complete record of all work product, correspondence, and documentation generated or received during the engagement.
3. Calderwood & Harkness Engagement Team
The following attorneys comprised the Calderwood & Harkness engagement team on this matter and contributed to the work performed during the course of the representation:
Catherine Bloom served as the Responsible Partner on the engagement and maintained overall supervisory authority over the representation, including direct participation in all principal negotiation sessions and review of all substantive work product. Alan Ngo served as Billing Partner and provided strategic counsel on technology licensing structures, drawing on his experience with enterprise SaaS licensing transactions. Wendy Schultz served as Lead Associate and was responsible for the day-to-day management of the engagement, including the preparation of all drafts of the License Agreement, coordination with Crestline Patent Analytics LLC, and preparation of internal memoranda. Omar Siddiqui served as Working Associate and contributed to patent portfolio analysis, prior art research, and the preparation of ancillary transaction documentation.
Should you have any questions regarding timekeeping, billing, or the scope of services provided by any member of the engagement team, please do not hesitate to contact Catherine Bloom or Alan Ngo directly.
4. Obligations Under the Mutual NDA — Return and Destruction of Confidential Information
As noted in Section 2 above, Brightfield and Nexilis entered into a Mutual Nondisclosure Agreement effective as of June 19, 2023. Calderwood & Harkness, acting in its capacity as outside counsel to Brightfield, received Confidential Information of Nexilis in connection with the proposed transaction. The Confidential Information received by the Firm included, without limitation, technical specifications relating to the DeltaSync Platform's architecture, cache-invalidation algorithms, and performance benchmarks; patent prosecution files for the Issued Patents and the Pending Applications, including file histories, examiner correspondence, and claim charts; business and financial data relating to Nexilis's licensing revenues, existing licensee arrangements, and projected commercialization timelines; and information concerning Nexilis's corporate structure, capitalization, and investor relationships.
In accordance with the return-or-destroy provisions set forth in Section 7 of the NDA, Calderwood & Harkness will promptly undertake to return or destroy all Confidential Information of Nexilis in its possession, custody, or control. The Firm will complete this process within thirty (30) days of the date of this letter and will provide written certification of such return or destruction as required by Section 7(b) of the NDA. Such certification will be directed to Whitmore & Falk LLP as counsel for Nexilis, with a copy to Brightfield.
We also note that Brightfield, as a party to the NDA, has independent obligations to return or destroy all Confidential Information of Nexilis in its possession, custody, or control. We recommend that Brightfield promptly undertake the same process and coordinate directly with Nexilis or Whitmore & Falk LLP to confirm compliance with these obligations. Brightfield's internal teams — including, in particular, the engineering and product teams that received access to the DeltaSync technical documentation — should be notified of the requirement to purge any copies of Nexilis Confidential Information from their files, systems, and personal repositories.
We note that the standard carve-outs set forth in the NDA apply to the return-or-destroy obligation. Specifically, the obligation does not extend to Confidential Information that (a) has become publicly available other than through a breach of the NDA by the receiving party, (b) was independently developed by the receiving party without reference to or use of the disclosing party's Confidential Information, or (c) is required to be retained by applicable law, regulation, or professional obligation. With respect to clause (c), Calderwood & Harkness may retain copies of Confidential Information to the extent necessary to comply with the Firm's obligations under the Texas Disciplinary Rules of Professional Conduct and its internal document retention and compliance policies; provided, however, that any such retained materials will continue to be treated as Confidential Information in accordance with the terms of the NDA.
Finally, we wish to remind Brightfield that the confidentiality obligations set forth in the NDA survive the termination of the negotiations for a period of two (2) years from the effective date of the NDA — that is, through and including June 19, 2025. During this period, Brightfield and its personnel, agents, and representatives must continue to observe the confidentiality restrictions imposed by the NDA with respect to any Confidential Information of Nexilis that was received during the course of the engagement, regardless of whether such information has been returned or destroyed. We encourage Brightfield to ensure that all individuals within the organization who had access to Nexilis Confidential Information are made aware of this ongoing obligation.
5. File Retention Policy
Calderwood & Harkness will retain the matter file for Matter No. 1042-00003, including both physical and electronic records, in accordance with the Firm's standard document retention policies as set forth in the Firm's Records Management Policy (as amended through January 1, 2023).
Under the Firm's retention policy, matter files will be maintained for a period of seven (7) years from the date of matter closure — in this case, through September 15, 2030. Upon expiration of the seven-year retention period, the Firm may destroy the matter file, including all physical documents and electronic records, without further notice to Brightfield, unless Brightfield has, prior to such destruction, requested that the files be transferred to Brightfield or has provided the Firm with alternative retention or disposition instructions.
Brightfield may request a copy of, or access to, the matter file at any time during the retention period by contacting Catherine Bloom or Alan Ngo. The Firm will accommodate such requests within a reasonable period of time, subject to applicable charges for copying and production, which will be billed at cost.
We wish to confirm that all work product generated by Calderwood & Harkness in connection with this engagement — including, without limitation, legal memoranda, draft agreements, correspondence, research materials, and internal analysis — remains the property of Brightfield, consistent with the terms of the engagement letter dated June 8, 2023. Notwithstanding the foregoing, Calderwood & Harkness retains the right to maintain copies of such work product as may be required by applicable professional responsibility rules, the Firm's internal compliance and quality assurance policies, and the Firm's obligations under its professional liability insurance program.
6. Outstanding Invoicing and Fees
Calderwood & Harkness will issue a final invoice covering all professional fees and disbursements incurred through the date of matter closure (September 15, 2023). The final invoice, with a detailed breakdown of charges by timekeeper, activity, and date, will follow under separate cover and will be transmitted to Daniel Oshiro and the Brightfield accounts payable department in accordance with the billing procedures established at the commencement of the engagement.
For your reference, we provide the following summary of total fees and costs billed in connection with this matter:
The total professional fees of $197,450.00 reflect the aggregate time charges of all members of the engagement team from June 8, 2023, through September 15, 2023. The disbursement of $42,500.00 represents the fees of Crestline Patent Analytics LLC for the freedom-to-operate analysis and patent portfolio assessment described in Section 2 above, which was incurred by Calderwood & Harkness on behalf of Brightfield and passed through at cost in accordance with the terms of the engagement letter.
Payment terms for the final invoice are as set forth in the engagement letter dated June 8, 2023. If you have any questions regarding the invoicing or require additional detail regarding any specific charges, please contact Alan Ngo at the Palo Alto office.
7. No Ongoing Representation; Potential Future Engagement
With the closure of Matter No. 1042-00003, Calderwood & Harkness's representation of Brightfield Cloud Services Inc. in connection with the proposed DeltaSync technology license has concluded. Effective as of the date of this letter, the attorney-client relationship between Calderwood & Harkness and Brightfield with respect to this matter has terminated.
The Firm wishes to make clear that it has no ongoing obligation to monitor developments related to the DeltaSync Platform, Nexilis Innovations Ltd., or any related intellectual property matters, including, without limitation, changes in the status of the Issued Patents or Pending Applications, the prosecution or abandonment of any Nexilis patent applications, or the execution of license agreements between Nexilis and any third parties. Similarly, the Firm has no obligation to monitor changes in applicable law, regulations, or industry standards that may affect Brightfield's technology licensing strategy or intellectual property position. Unless and until a new engagement is agreed upon in writing between Calderwood & Harkness and Brightfield, the Firm's only obligations with respect to this matter are the administrative obligations described in Sections 4, 5, and 6 of this letter.
Should Brightfield wish to re-engage Calderwood & Harkness in connection with any future licensing opportunity involving the DeltaSync Platform or similar distributed-cache or data-orchestration technology, or in connection with any other intellectual property, technology transactions, or corporate matter, the Firm would be pleased to discuss the terms of a new engagement at that time. Any such engagement would be subject to the execution of a new engagement letter, a conflicts check, and such other procedures as may be required by the Firm's intake and compliance policies.
8. Strategic Observations
While this letter is principally administrative in nature, we thought it would be useful to include a brief observation regarding the commercial context that informed Brightfield's decision to decline the transaction on the terms available.
As noted above, the field-of-use restriction issue that ultimately caused the negotiations to fail arose from Nexilis's existing contractual commitments to its investors, and in particular to portfolio companies associated with Ridgeline Ventures. These commitments constrained Nexilis's ability to grant Brightfield the broad, enterprise-wide deployment rights that were necessary to justify the proposed $8,000,000 investment (or, under the tiered-unlock proposal, the $10,000,000 total consideration). Given that Brightfield's Stratos cloud-management platform is industry-agnostic by design and serves enterprise customers across more than a dozen verticals, a field of use limited to financial services and healthcare would have restricted the addressable revenue base for DeltaSync-enhanced Stratos deployments to approximately $38,000,000 in annual recurring revenue ("ARR"), representing only approximately 26.8% of Brightfield's total ARR of approximately $142,000,000. Under those circumstances, the economics of the proposed license were, in our view, commercially unjustifiable, and Brightfield's decision not to proceed was both reasonable and well-founded.
We recognize that the DeltaSync Platform represents a compelling technology, and we would encourage Brightfield to continue to monitor the market for alternative distributed-cache orchestration solutions that may offer comparable functionality without the field-of-use constraints that prevented this transaction from closing.
On a personal note, it has been a privilege to represent Brightfield in this matter. We greatly appreciate the opportunity to have worked with you, Daniel, and with the broader Brightfield team, including Priya Chandrasekaran, Marcus Vail, and Lisa Redmond, each of whom contributed meaningfully to the negotiation process and was a pleasure to collaborate with throughout the engagement. We also wish to acknowledge the involvement and support of Graham Hollister at Vantage Summit Capital Partners, LP, whose strategic perspective was valuable during the course of the negotiations.
We hope to have the opportunity to work with Brightfield again in the future, and we remain available should any questions or issues arise in connection with the matters addressed in this letter.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Catherine Bloom Partner, intellectual Property Calderwood & Harkness LLP 700 Louisiana Street, Suite 3400 Houston, TX 77002 Direct: (713) 547-8224
Email: cbloom@calderwoodharkness.com
cc:
Priya Chandrasekaran, Chief Executive Officer, Brightfield Cloud Services Inc.
Lisa Redmond, Vice President, Corporate Development & Strategy, Brightfield Cloud Services Inc.
Graham Hollister, Managing Director, Vantage Summit Capital Partners, LP
Alan Ngo, Partner, Calderwood & Harkness LLP
Wendy Schultz, Senior Associate, Calderwood & Harkness LLP
Encl.: None (final invoice to follow under separate cover)
Attorney | Role | Practice Group | Office
Catherine Bloom | Responsible Partner | Intellectual Property | Houston
Alan Ngo | Billing Partner | Intellectual Property | Palo Alto
Wendy Schultz | Lead Associate | Intellectual Property | Houston
Omar Siddiqui | Working Associate | Intellectual Property | Houston
Category | Amount
Total Professional Fees (attorney time) | $197,450.00
Disbursements — Crestline Patent Analytics LLC engagement | $42,500.00
Total Amount Billed | $239,950.00

CALDERWOOD & HARKNESS LLP Attorneys at Law

CALDERWOOD & HARKNESS LLP

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