Thomas and Jennifer,
I hope you are both well. I am writing in connection with the OEM Reseller Agreement between our client, Brightfield Cloud Services Inc. ("BCS"), and Vantage Industrial Solutions, LLC ("Vantage"), governing Vantage's resale of the BrightEdge IoT Platform under the OEM channel program.
Attached please find Calderwood & Harkness's final redline of the OEM Reseller Agreement (oem-reseller-agreement-final-redline.docx). This is a tracked-changes version marked against our counter-redline delivered on January 29, 2026, and reflects BCS's responses to Vantage's second markup, which we received from your office on February 5. As you will see, we have endeavored to be responsive to Vantage's remaining comments while preserving BCS's core positions on several points that are essential to the commercial structure of this deal.
The redline reflects BCS's final positions on the five remaining open issues. To facilitate your review in advance of Friday's call, I have summarized each below.
**1. Audit Rights (Section 8.4)**
BCS's position remains that it is entitled to conduct an annual audit of Vantage's resale records upon 30 days' prior written notice. We note that Vantage's second markup maintained its request for biennial audit frequency; we have reverted to annual audits in this final redline. Given the $5,000,000 per year Minimum Annual Commitment and the 18% software royalty structure calculated on Vantage's net resale pricing, BCS views annual audit rights as essential to ensure adequate visibility into Vantage's resale activity and accurate royalty reporting.
**2. Non-Compete / Competing Product Definition (Section 12.2)**
BCS has conditionally accepted Vantage's request to narrow the definition of "Competing Product" to exclude legacy SCADA-only analytics platforms. However, the carve-out is limited: any product incorporating cloud-based IoT functionality remains within the definition and continues to be subject to the non-compete restriction during the term of the agreement. This narrowed definition is reflected in the redline, and we believe it represents a reasonable accommodation of Vantage's concern while protecting BCS's competitive position in the cloud IoT market.
**3. Consequential Damages Carve-Outs (Section 14.3)**
Your second markup proposed removing "breach of confidentiality" from the list of exceptions to the mutual consequential damages waiver. BCS has rejected this proposal, and the final redline retains breach of confidentiality—alongside IP indemnity obligations and willful misconduct—as a carve-out to the consequential damages exclusion. BCS's position on this point is firm. Given the nature of the proprietary technology and pricing information exchanged under this agreement, BCS cannot agree to cap its remedies for a breach of confidentiality at direct damages only.
**4. MAC Shortfall Pro-Ration on Termination for Convenience (Section 5.6)**
BCS has accepted Vantage's proposal to pro-rate the Minimum Annual Commitment shortfall in the event of a mid-year termination for convenience. The agreed formula is as follows: MAC × (elapsed days in the contract year ÷ 365). By way of illustration, a termination occurring on day 200 of a contract year would yield a pro-rated MAC obligation of $5,000,000 × (200/365) = $2,739,726. This formula is now reflected in the redline.
**5. Source Code Escrow Release Triggers (Exhibit E)**
Vantage's second markup proposed adding "change of control of BCS" as an additional release trigger under the three-party Source Code Escrow Agreement with Pinnacle Escrow Services, Inc. BCS continues to reject this proposal. The release conditions in Exhibit E remain limited to: (a) BCS ceases business operations; (b) BCS files for bankruptcy or becomes subject to insolvency proceedings; or (c) BCS materially fails to maintain or support the licensed software for more than 120 consecutive days after receipt of written notice from Vantage specifying the maintenance deficiency. BCS's position on this point is firm, and we do not believe a change-of-control trigger is appropriate or market in this context.
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For reference, the agreement as currently drafted provides for a total deal value of $15,000,000, based on the Minimum Annual Commitment of $5,000,000 per year across the three-year initial term running from February 20, 2026 through February 19, 2029. The upfront non-refundable license fee of $750,000 is due within 10 business days of execution. I would also note that the general liability cap of $7,500,000 per party and the IP indemnity cap of $15,000,000 are settled and reflected in the redline as previously agreed between the parties. The agreement continues to be governed by Delaware law.
As you know, we have a call scheduled for Friday, February 14, 2026, with principals and counsel from both sides to discuss the outstanding issues. We are hopeful that the parties can resolve the remaining open points on that call and move promptly to finalize an execution version. Our target remains an execution date of February 20, 2026, which would place the upfront license fee payment deadline at March 6, 2026 (10 business days post-signing).
We appreciate the collaborative approach both teams have taken throughout this process. Since Vantage's initial markup on January 17, we have made meaningful progress in narrowing the open points through the subsequent rounds, and we are optimistic that Friday's call will bring us to resolution on the remaining items. Please do not hesitate to reach out to me or Doug if you have any questions or would like to discuss any aspect of the redline in advance of the call.
Best regards,
Robert Jansen Associate Calderwood & Harkness LLP 1700 Pacific Avenue, Suite 4200 Dallas, TX 75201 T: (214) 555-8340 E: rjansen@calderwoodharkness.com
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