1042-00003 · Whitmore & Falk LLP · Correspondence

tiered-unlock-proposal-letter.docx DOCUMENT Litigation

6 / 12 ← → ✕

Contract analysis Extract to table

CALDERWOOD & HARKNESS LLP

700 Louisiana Street, Suite 3400 Houston, Texas 77002 Telephone: (713) 458-7200 Facsimile: (713) 458-7201

Writer's Direct Dial: (713) 458-7244 Writer's Email: cbloom@calderwoodharkness.com

September 5, 2023

VIA EMAIL AND OVERNIGHT COURIER

Joanna Whitmore, Esq. Managing Partner Whitmore & Falk LLP 100 Federal Street, 28th Floor Boston, MA 02110

Re: Proposed Exclusive Technology License Agreement between Nexilis Innovations Ltd. ("Nexilis") and Brightfield Cloud Services Inc. ("Brightfield") — DeltaSync Platform — Tiered Field-of-Use Proposal

Dear Ms. Whitmore:

1. Introduction and Purpose

We write on behalf of our client, Brightfield Cloud Services Inc. ("Brightfield"), in connection with the proposed inbound exclusive technology license from Nexilis Innovations Ltd. ("Nexilis") for the DeltaSync distributed-cache orchestration technology (the "DeltaSync Platform"). As you know, Calderwood & Harkness LLP serves as outside intellectual property and licensing counsel to Brightfield in this matter.

By way of background, the parties have been engaged in substantive negotiations regarding the proposed license since the spring of this year. The principal milestones of the negotiation process to date are as follows:

• On June 12, 2023, Brightfield delivered to Nexilis an initial term sheet setting forth proposed principal terms for an exclusive technology license covering the DeltaSync Platform.

• On June 19, 2023, the parties executed a mutual confidentiality and non-disclosure agreement (the "NDA") to facilitate the exchange of proprietary technical and commercial information in connection with the proposed transaction.

• On July 17, 2023, this firm delivered to Whitmore & Falk, on Brightfield's behalf, the initial draft of a definitive Technology License Agreement ("Draft 1").

• On July 31, 2023, Whitmore & Falk returned Nexilis's redline of the Technology License Agreement ("Draft 2"), which included, among other substantive revisions, a material narrowing of the proposed field-of-use grant.

• On August 14, 2023, we delivered Brightfield's revised Technology License Agreement ("Draft 3"), which responded to Nexilis's comments in Draft 2 and set forth Brightfield's counterproposals on the outstanding open issues, including the field-of-use scope.

• On August 28, 2023, the parties exchanged respective field-of-use term sheets in an effort to resolve the principal remaining open point in the negotiations.

Despite these good-faith exchanges, the parties remain at an impasse with respect to the scope of the field of use to be granted under the proposed license. All other material terms of the Technology License Agreement have been substantially agreed or are the subject of manageable differences that we believe can be resolved in the ordinary course.

The purpose of this letter is to present, on Brightfield's behalf, a compromise proposal designed to address the continuing field-of-use dispute. Specifically, Brightfield proposes a "tiered-unlock" structure that is intended to address Nexilis's legitimate interest in preserving vertical licensing flexibility while simultaneously meeting Brightfield's commercial need for broader deployment rights sufficient to justify its contemplated investment. As described in greater detail below, the tiered-unlock proposal would provide Nexilis with committed license revenue at a meaningful premium on a per-vertical basis, an additional premium payable upon expansion, and ongoing protection for its existing licensing relationships in non-covered verticals — while providing Brightfield with an immediate exclusive license in two key verticals and a clear, contractually assured path to a broader, industry-agnostic deployment right.

This proposal is submitted with the full authorization of Brightfield's Chief Executive Officer, Priya Chandrasekaran, its General Counsel, Daniel Oshiro, and its Vice President of Corporate Development & Strategy, Lisa Redmond. Brightfield's senior leadership has reviewed and approved the commercial and financial terms set forth herein, and Brightfield is prepared to move expeditiously to definitive documentation should Nexilis find this framework acceptable.

2. Background — The Field-of-Use Impasse

To ensure that this proposal is evaluated in proper context, we briefly summarize the parties' respective positions on the field-of-use issue.

Nexilis's Position. As reflected in the redline Draft 2 returned by your firm on July 31, 2023, Nexilis has taken the position that the exclusive license granted to Brightfield should be restricted to Brightfield's deployment of the DeltaSync Platform solely for end-customers operating within: (a) the financial services vertical, corresponding to Standard Industrial Classification ("SIC") codes 6000 through 6799 (encompassing depository institutions, non-depository credit institutions, security and commodity brokers, insurance carriers, real estate, and holding and investment offices); and (b) the healthcare vertical, corresponding to SIC codes 8000 through 8099 (encompassing health services, including offices and clinics of doctors, nursing and personal care facilities, hospitals, and medical and dental laboratories). Nexilis's stated rationale for this limitation is the preservation of Nexilis's ability to separately license the DeltaSync Platform to licensees serving the technology, telecommunications, and government verticals, among others.

We understand, based on the discussions between counsel and between the respective business teams, that Nexilis's position is driven in part by existing relationships with portfolio companies of Ridgeline Ventures and other strategic counterparties that may have expressed interest in DeltaSync deployments in verticals outside of financial services and healthcare. Brightfield does not question the legitimacy of Nexilis's interest in preserving those relationships, and indeed the proposal set forth in this letter is designed to accommodate that concern.

Brightfield's Position. Brightfield has consistently maintained that its license must encompass a field of use covering all enterprise SaaS verticals, without industry restriction. The commercial basis for this position is straightforward: Brightfield's flagship product, the "Stratos" cloud-management platform, is an industry-agnostic infrastructure product. Stratos is sold across every major enterprise vertical and is not designed, marketed, or deployed on an industry-specific basis. Brightfield's integration of DeltaSync into Stratos will be at the platform level, meaning that DeltaSync's distributed-cache orchestration capabilities would be available to every Stratos customer regardless of industry classification.

The financial implications of the field-of-use limitation proposed by Nexilis are significant. Based on Brightfield's internal analysis — which has been shared with Nexilis's business team under the NDA — restricting the license to the financial services and healthcare verticals would limit Brightfield's addressable revenue from DeltaSync-enhanced Stratos deployments to approximately $38,000,000 in annual recurring revenue ("ARR"). This figure represents approximately 26.8% of Brightfield's total ARR of approximately $142,000,000 for fiscal year 2022. An investment of $8,000,000 in license fees — as contemplated by the original term sheet — cannot be commercially justified if the addressable market is limited to barely more than one-quarter of Brightfield's existing customer base. The resulting return profile would fall well below Brightfield's internal investment thresholds and would be unlikely to receive approval from Brightfield's board of directors.

Notwithstanding this significant gap between the parties' positions, Brightfield recognizes that both sides have negotiated in good faith throughout this process, and Brightfield remains committed to finding a commercially workable solution. The tiered-unlock proposal described below represents Brightfield's best effort to bridge the existing divide in a manner that creates value for both parties.

3. The Tiered-Unlock Proposal — Overview

Brightfield proposes a two-tier licensing structure that would operate as follows:

Tier 1 — Base License. At execution of the definitive License Agreement, Nexilis would grant Brightfield an exclusive license to use, integrate, reproduce, modify, and sublicense the DeltaSync Platform technology for deployment to end-customers in the financial services vertical (SIC codes 6000–6799) and the healthcare vertical (SIC codes 8000–8099). The DeltaSync Platform technology subject to the license comprises fourteen (14) issued United States utility patents, U.S. Patent Nos. 11,234,567 through 11,234,580 (inclusive), together with six (6) pending United States patent applications, Application Nos. 17/901,201 through 17/901,206 (inclusive), and all associated technical documentation, source code, object code, specifications, and know-how. The Tier 1 Base License would be effective immediately upon execution of the License Agreement and payment of the upfront license fee described in Section 4.2 below.

Tier 2 — Expansion Option. Concurrently with the grant of the Tier 1 Base License, Nexilis would grant Brightfield an irrevocable option (the "Expansion Option") to expand the field of use under the License Agreement to encompass all enterprise SaaS verticals without industry restriction. The Expansion Option would be exercisable by Brightfield at any time during the initial five-year term of the Tier 1 Base License, subject to the exercise mechanics and payment terms described in Section 5 below.

This structure allows the parties to move forward with a definitive agreement on terms that reflect Nexilis's current comfort level regarding field-of-use scope, while providing Brightfield with a contractually assured path to the broader deployment rights it requires. The detailed terms of each tier are set forth in the following sections.

4. Tier 1 — Base License Terms

4.1 Scope of Tier 1 License

The Tier 1 Base License would be an exclusive, fully paid-up license within the financial services vertical (SIC codes 6000–6799) and the healthcare vertical (SIC codes 8000–8099). The grant would encompass all rights necessary for Brightfield to integrate the DeltaSync Platform into the Stratos cloud-management platform, and to market, distribute, offer for sale, sell, and sublicense DeltaSync-integrated versions of Stratos to end-customers operating within the permitted verticals.

Specifically, the Tier 1 license grant would include, without limitation, the right to:

(a) reproduce, modify, adapt, and create derivative works of the DeltaSync Platform source code and object code for purposes of integration with the Stratos platform;

(b) deploy, host, and operate DeltaSync-integrated versions of Stratos in production environments on behalf of and for the benefit of end-customers within the permitted verticals;

(c) sublicense the DeltaSync Platform technology (in integrated form as a component of Stratos) to end-customers within the permitted verticals, whether through software-as-a-service, platform-as-a-service, or on-premises deployment models;

(d) use the DeltaSync Platform technology for internal development, testing, quality assurance, and demonstration purposes without vertical restriction, to the extent reasonably necessary to support Brightfield's commercialization activities within the permitted field of use; and

(e) exercise all rights under the Licensed Patents (as identified above) that are necessary to make, have made, use, offer for sale, sell, and import products and services incorporating the DeltaSync Platform technology within the permitted field of use.

The Tier 1 license would be exclusive within the permitted verticals, meaning that Nexilis would not grant any other party a license to use, integrate, or sublicense the DeltaSync Platform for deployment to end-customers in the financial services or healthcare verticals during the term of the license. For the avoidance of doubt, "exclusive" in this context would exclude Nexilis itself, consistent with the formulation in Section 2.1(b) of Draft 3.

The Tier 1 Base License would be fully paid-up within the permitted field of use. No per-unit royalties, percentage-of-revenue royalties, or other usage-based fees would apply to Brightfield's deployment of DeltaSync within the financial services and healthcare verticals, and Brightfield would not be required to share revenue, provide revenue reports, or submit to royalty audits with respect to its activities within those verticals.

4.2 Tier 1 Fee

The aggregate consideration for the Tier 1 Base License would be $5,200,000, representing sixty-five percent (65%) of the originally proposed aggregate license fee of $8,000,000. This amount reflects a premium on a per-vertical basis: whereas the original $8,000,000 proposal covered all verticals, the $5,200,000 Tier 1 fee covers only two verticals, resulting in an effective per-vertical rate of $2,600,000 — compared to the original implied per-vertical rate of approximately $1,143,000 (assuming a seven-vertical addressable market).

The Tier 1 fee would be payable as follows:

(a) Upfront License Fee: $2,080,000, representing forty percent (40%) of the aggregate Tier 1 fee, payable by wire transfer of immediately available funds at the execution of the definitive License Agreement.

(b) Annual Maintenance and Support Payments: Three (3) annual installments of $1,040,000 each, payable on each of the first three anniversaries of the effective date of the License Agreement. These annual payments represent the remaining $3,120,000 of the aggregate Tier 1 fee ($5,200,000 − $2,080,000 = $3,120,000; $3,120,000 ÷ 3 = $1,040,000 per year), amortized over a three-year period. These payments would be characterized in the License Agreement as combined license installment and maintenance/support fees, entitling Brightfield to receive Nexilis's standard technology maintenance and support services (including updates, patches, bug fixes, and reasonable technical support) during the three-year payment period.

All fees would be non-refundable and non-creditable, except in the event of a material breach by Nexilis giving rise to termination of the License Agreement, in which case Brightfield's remedies would be as set forth in the termination and remedies provisions of the License Agreement.

4.3 License Term

The Tier 1 Base License would have an initial term of five (5) years from the effective date of the License Agreement, consistent with the term provisions set forth in Section 9.1 of Draft 3 dated August 14, 2023. Upon expiration of the initial five-year term, the License Agreement would be renewable for successive two-year terms, subject to the mutual agreement of both parties on applicable renewal fees and any updated terms. Neither party would be obligated to agree to renewal, but both parties would be required to negotiate renewal terms in good faith commencing no later than one hundred eighty (180) days prior to the expiration of the then-current term.

4.4 Other Terms

All other terms of the Technology License Agreement as set forth in Draft 3 dated August 14, 2023, would remain applicable to the Tier 1 Base License, subject to any modifications mutually agreed upon by the parties in the course of finalizing the definitive License Agreement. Without limitation, the following provisions would continue to apply to the Tier 1 license in the form set forth in Draft 3:

(a) Representations and warranties of each party, including Nexilis's representations regarding title to and non-infringement of the Licensed Patents and associated technology;

(b) intellectual property indemnification obligations, including Nexilis's obligation to indemnify, defend, and hold harmless Brightfield from third-party claims alleging that Brightfield's licensed use of the DeltaSync Platform infringes third-party intellectual property rights;

(c) Audit rights, including Nexilis's right to conduct reasonable periodic audits of Brightfield's use of the DeltaSync Platform to confirm compliance with the field-of-use restriction;

(d) Termination provisions, including termination for material breach, termination for insolvency, and the consequences of termination on sublicenses previously granted by Brightfield to end-customers;

(e) Limitation of liability and disclaimer of consequential damages provisions;

(f) Governing law and dispute resolution provisions, including the parties' agreement that the License Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to its conflict of laws principles; and

(g) Confidentiality obligations, which would supplement and be in addition to the obligations under the existing NDA dated June 19, 2023.

5. Tier 2 — Expansion Option Terms

5.1 Nature of the Expansion Option

Concurrently with the grant of the Tier 1 Base License, the License Agreement would include a provision granting Brightfield an irrevocable, unconditional option (the "Expansion Option") to expand the field of use under the License Agreement. The Expansion Option would be granted to Brightfield at the execution of the License Agreement and would require no separate consideration beyond the Tier 1 fee; the Expansion Option itself would be embedded in the License Agreement as a contractual right of Brightfield.

The Expansion Option would be exercisable by Brightfield at any time during the initial five-year term of the Tier 1 Base License. The option would not be subject to any conditions precedent other than Brightfield's delivery of the Expansion Exercise Notice and payment of the expansion fee described below. In particular, the Expansion Option would not be contingent on Brightfield's achievement of any revenue milestones, customer count thresholds, or other performance metrics, nor would it be subject to the consent or approval of Nexilis.

Upon Brightfield's exercise of the Expansion Option, the field-of-use restriction set forth in the License Agreement would be automatically amended to remove all industry vertical limitations. Brightfield would thereupon have the right to deploy, integrate, market, distribute, and sublicense the DeltaSync Platform for end-customers in all enterprise SaaS verticals, without limitation as to industry classification. All other terms of the License Agreement would remain in full force and effect, and the exclusivity of Brightfield's license would extend to all enterprise SaaS verticals following exercise of the option.

5.2 Expansion Option Exercise Fee

Upon exercise of the Expansion Option, Brightfield would pay to Nexilis an expansion fee (the "Expansion Fee") of $4,800,000. The Expansion Fee would be payable in addition to the Tier 1 fee, and would not reduce or offset any amounts previously paid or owing under the Tier 1 fee structure.

Accordingly, the total aggregate consideration payable by Brightfield to Nexilis under the License Agreement, assuming exercise of the Expansion Option, would be as follows:

The total aggregate consideration of $10,000,000 represents a $2,000,000 premium over the originally proposed aggregate license fee of $8,000,000. This premium reflects the value to Brightfield of the optionality inherent in the tiered-unlock structure — namely, the ability to defer the full investment decision until Brightfield has had the opportunity to validate the commercial potential of DeltaSync-integrated Stratos deployments in the financial services and healthcare verticals — as well as Nexilis's legitimate interest in receiving additional consideration in exchange for granting Brightfield broader deployment rights and relinquishing Nexilis's ability to separately license DeltaSync in additional verticals.

5.3 Exercise Mechanics

The Expansion Option would be exercised in accordance with the following procedures:

(a) Expansion Exercise Notice. To exercise the Expansion Option, Brightfield would deliver written notice to Nexilis (the "Expansion Exercise Notice") at least thirty (30) days prior to the date on which Brightfield desires the expanded field of use to become effective (the "Expansion Effective Date"). The Expansion Exercise Notice would be delivered in accordance with the notice provisions of the License Agreement and would specify the desired Expansion Effective Date.

(b) Payment of the Expansion Fee. Brightfield would pay the Expansion Fee of $4,800,000 in full by wire transfer of immediately available funds within fifteen (15) business days following delivery of the Expansion Exercise Notice. Time would be of the essence with respect to payment of the Expansion Fee. If Brightfield fails to pay the Expansion Fee within the fifteen (15) business day period, Nexilis would have the right, upon written notice to Brightfield, to declare the Expansion Exercise Notice void and of no further force or effect, without prejudice to Brightfield's right to deliver a subsequent Expansion Exercise Notice during the remaining term of the Expansion Option.

(c) Amendment to License Agreement. Upon Nexilis's receipt of the Expansion Fee in full, the parties would execute a short-form amendment to the License Agreement confirming the removal of the field-of-use restriction and the effectiveness of the expanded license grant as of the Expansion Effective Date. The short-form amendment would be in a form mutually agreed upon by the parties and their respective counsel, and would be limited in scope to the modification of the field-of-use provision; no other terms of the License Agreement would be altered, amended, or supplemented by the amendment except as necessary to give effect to the expansion.

5.4 Effect on Nexilis's Third-Party Licensing

Brightfield recognizes and acknowledges Nexilis's legitimate interest in preserving its existing licensing relationships in verticals outside of financial services and healthcare during the period prior to Brightfield's exercise of the Expansion Option. The tiered-unlock structure is designed to accommodate this interest: under Tier 1, Nexilis would retain the ability to grant non-exclusive licenses of the DeltaSync Platform in all verticals other than financial services and healthcare, and Brightfield would not seek to restrict Nexilis's non-exclusive licensing activities in those verticals.

However, to preserve the value of the Expansion Option to Brightfield, Brightfield would request that the License Agreement include a covenant by Nexilis that, during the period in which the Expansion Option remains outstanding and unexercised, Nexilis will not grant any exclusive license of the DeltaSync Platform in any additional vertical to any third party. The grant of an exclusive license to a third party in an additional vertical would effectively diminish the scope of the rights that Brightfield could acquire upon exercise of the Expansion Option, and would fundamentally undermine the value of the option for which Brightfield is paying a significant premium. A commitment by Nexilis to refrain from granting new exclusive licenses in additional verticals during the option period would preserve the integrity of the Expansion Option without restricting Nexilis's ability to generate non-exclusive licensing revenue from the DeltaSync Platform in the interim.

In the alternative, or in addition to the foregoing covenant, Brightfield would propose the inclusion of a "most-favored-licensee" provision in the License Agreement. Under this provision, if Nexilis grants a license of the DeltaSync Platform to any third party in a new vertical on terms more favorable than those available to Brightfield under the License Agreement — including, without limitation, more favorable pricing, broader sublicensing rights, more extensive technical support, or more favorable indemnification terms — Brightfield would have the right, upon notice to Nexilis, to either (i) match the terms offered to the third party and receive an equivalent amendment to the License Agreement, or (ii) receive the benefit of the more favorable terms automatically and without the need for further negotiation. Brightfield is flexible as to the specific formulation of this provision and would welcome Nexilis's input on its preferred approach.

6. Commercial Rationale

Brightfield believes that the tiered-unlock structure described in this letter provides meaningful commercial value to both parties and represents a fair and balanced resolution of the field-of-use impasse.

Value to Nexilis. Under the tiered-unlock proposal, Nexilis would receive committed license fees of $5,200,000 for a two-vertical exclusive license. On a per-vertical basis, this represents an effective rate of $2,600,000 per vertical — a substantial premium of approximately 127% over the implied per-vertical rate of approximately $1,143,000 under the original $8,000,000 all-verticals proposal (assuming seven addressable verticals). If Brightfield subsequently exercises the Expansion Option, Nexilis would receive an additional $4,800,000, bringing the total aggregate consideration to $10,000,000 — a $2,000,000 premium over the originally proposed license fee. Moreover, during the period before the Expansion Option is exercised, Nexilis would retain the ability to license DeltaSync on a non-exclusive basis in verticals outside of financial services and healthcare, generating additional licensing revenue that Nexilis would not earn under the original all-verticals exclusive license structure.

Value to Brightfield. Under the tiered-unlock proposal, Brightfield would obtain an immediate exclusive license in the two verticals that Nexilis has already indicated a willingness to grant — financial services and healthcare — allowing Brightfield to begin integrating DeltaSync into Stratos and generating revenue from DeltaSync-enhanced deployments without further delay. At the same time, Brightfield would preserve the contractual right to expand to an industry-agnostic deployment when commercially justified, without the need for further negotiation with Nexilis regarding the scope of the field of use. The option structure allows Brightfield to manage its investment risk by deferring the additional $4,800,000 expenditure until Brightfield has had the opportunity to validate DeltaSync's commercial potential in the initial permitted verticals. This staged approach is consistent with Brightfield's internal investment framework and is more likely to receive timely approval from Brightfield's board of directors.

Accommodation of Nexilis's Existing Commitments. Brightfield understands, based on the parties' discussions to date, that Nexilis may have existing exclusivity commitments or ongoing discussions with portfolio companies of Ridgeline Ventures regarding potential DeltaSync deployments in the technology and telecommunications verticals. The tiered-unlock structure is specifically designed to be responsive to this concern. Under the Tier 1 Base License, Nexilis would not be required to immediately grant Brightfield exclusive rights in any vertical other than financial services and healthcare. Nexilis would therefore be able to honor its existing commitments and continue its discussions with Ridgeline Ventures portfolio companies without any conflict with Brightfield's license rights. Only upon Brightfield's exercise of the Expansion Option — which, as noted, may occur at any point during the five-year term — would Nexilis's licensing flexibility in other verticals be affected.

7. Proposed Timeline for Response and Next Steps

Given the length of time that the parties have already devoted to negotiating the field-of-use issue, and in the interest of maintaining the momentum of these negotiations, Brightfield respectfully requests that Nexilis and Whitmore & Falk provide a substantive written response to this proposal by no later than September 12, 2023. The response need not address every detail of the proposal, but should indicate whether Nexilis is amenable to the tiered-unlock structure in principle and, if so, identify any material terms that Nexilis would seek to modify.

If Nexilis is amenable to the tiered-unlock structure in principle, Brightfield proposes that the parties schedule a conference call during the week of September 11, 2023, to discuss the implementation of the proposal and begin negotiating the specific terms of the expansion option provision. Brightfield's engagement team is available during that week and can accommodate Nexilis's scheduling preferences.

Brightfield's engagement team for this matter consists of Catherine Bloom (Partner), Wendy Schultz (Senior Associate), and Omar Siddiqui (Senior Associate) at Calderwood & Harkness LLP, together with Daniel Oshiro (General Counsel) and Lisa Redmond (VP, Corporate Development & Strategy) at Brightfield. Any or all members of this team are available to discuss the proposal at Nexilis's and Whitmore & Falk's convenience, whether by telephone, videoconference, or in person.

In the event that the tiered-unlock structure is not acceptable to Nexilis in any form, Brightfield would welcome alternative proposals from Nexilis that address Brightfield's fundamental commercial concern — namely, that the field of use granted under the License Agreement must cover a sufficient share of Brightfield's total addressable market to make the contemplated investment in DeltaSync licensing and integration commercially justifiable. Brightfield remains open to creative solutions and is committed to working collaboratively with Nexilis to find a mutually acceptable path forward.

8. Reservation of Rights

This proposal is made without prejudice to any of Brightfield's positions in the ongoing negotiations regarding the Technology License Agreement, including, without limitation, Brightfield's position that the license should encompass all enterprise SaaS verticals without industry restriction. Nothing in this letter shall be construed as an admission, waiver, or concession by Brightfield with respect to any term, condition, or position previously asserted by Brightfield in connection with the proposed transaction.

All terms set forth in this letter are subject to the negotiation, execution, and delivery of a definitive Technology License Agreement in form and substance mutually satisfactory to both parties and their respective legal counsel. No binding obligation shall arise from the terms described herein unless and until such a definitive agreement has been duly executed and delivered by authorized representatives of both Brightfield and Nexilis.

All information exchanged between the parties in connection with this proposal, including the commercial and financial terms described herein, remains subject to the confidentiality obligations set forth in the mutual Non-Disclosure Agreement dated June 19, 2023, between Brightfield Cloud Services Inc. and Nexilis Innovations Ltd. Neither party shall disclose the terms of this proposal, or any aspect of the ongoing negotiations, to any third party except as expressly permitted under the NDA.

We appreciate the time and attention that Nexilis and Whitmore & Falk have devoted to these negotiations. The engagement and professionalism demonstrated by your team throughout this process have been noteworthy, and Brightfield values the constructive dialogue that has brought the parties to this stage. Brightfield remains firmly committed to finding a mutually acceptable structure for this important technology partnership and believes that the tiered-unlock proposal represents a meaningful step toward that goal.

We look forward to your response.

Very truly yours,