Contract analysis

I. Executive Summary and Purpose Calderwood & Harkness LLP serves as issuer's counsel to Lumos Analytics Inc. ("Lumos" or the "Company") in connection with the proposed initial public offering (the "IPO" or the "Offering") of shares of the Company's Class A Common Stock, par value $0.001 per share (the "Shares"), to be listed on the Nasdaq Global Select Market under the ticker symbol "LMOS." This memorandum has been

II. Parties to the AAU and Syndicate Structure A. Representative / Lead Manager Pinnacle Securities LLC, with its principal offices located at 399 Park Avenue, New York, New York 10022, serves as the lead left book-running managing underwriter for the Offering. In such capacity, Pinnacle also serves as the "Representative" of the several Underwriters under both the AAU and the Underwriting Agreement. The primary cont

III. Underwriting Commitment and Allocation Mechanics A. Syndicate Allocation Among Underwriters The AAU specifies each Underwriter's percentage commitment of the total base Offering (16,441,176 Shares) and the Overallotment Option (2,466,176 additional Shares). These allocation percentages are set forth in Schedule I to the AAU, which is to be completed and finalized at the time of pricing. The AAU provides that Sch

IV. Compensation and Fee Sharing A. Underwriting discount The total underwriting discount for the Offering has been set at 6.5% of the public offering price per Share. This discount level is within the range customarily observed for technology company IPOs of this size, though it is at the higher end of the spectrum (with many recent comparable transactions pricing at discounts between 5.5% and 7.0%). The 6.5% discou

V. Liability Sharing and Indemnification Among Underwriters A. Several (Not Joint) Liability

Section 5.1 of the AAU confirms that the obligations of each Underwriter under the AAU are several and not joint. Each Underwriter is liable only for its own respective underwriting commitment — that is, the number of Shares allocated to it under Schedule I — and no Underwriter is liable for the failure of any other Underwriter to purchase its committed Shares or otherwise to perform its obligations under the AAU or

Article 6 of the AAU establishes a comprehensive framework for indemnification and contribution among the Syndicate members. The key provisions are as follows: Indemnification. Each Underwriter agrees to indemnify and hold harmless the other Syndicate members, and their respective directors, officers, employees, agents, and controlling persons, against any and all losses, claims, damages, liabilities, and expenses (i

VI. Stabilization and Short-Covering Activities A. Stabilization Authority

Article 7 of the AAU authorizes Pinnacle, as Representative, to engage in stabilization transactions in the Class A Common Stock on the Nasdaq Global Select Market in accordance with Regulation M under the Exchange Act (Rules 100 through 105). Stabilization transactions are a standard feature of underwritten IPOs and serve the purpose of preventing or retarding a decline in the market price of the newly issued Shares

Section 7.4 of the AAU authorizes Pinnacle to impose penalty bids during the stabilization period. A penalty bid is a mechanism by which the Representative reclaims the selling concession from a Syndicate member if Shares initially placed with a customer of that Syndicate member are resold (or "flipped") in the secondary market shortly after the IPO. Penalty bids serve as a disincentive against flipping and encourage

Article 7 of the AAU includes representations and covenants from each Underwriter regarding compliance with Regulation M under the Exchange Act. Each Underwriter represents that it will comply with the restrictions on bids and purchases during the applicable restricted period (which, for an IPO, begins on the later of (i) the business day prior to the date of the pricing of the Offering and (ii) the business day prio

VII. Selling Restrictions and Distribution Compliance A. Offering Restrictions — Domestic

Article 8 of the AAU requires each Underwriter to offer and sell Shares only in compliance with the Securities Act of 1933, as amended (the "Securities Act"), and applicable state securities (or "blue sky") laws. Specifically, each Underwriter agrees that it will offer Shares only by means of a prospectus meeting the requirements of Section 10 of the Securities Act and will not engage in any offer or sale of Shares t

Article 10 of the AAU addresses the allocation and sale of directed shares, which are Shares reserved for purchase by designated persons such as employees, friends, and family members of the Company. The directed share program ("DSP") provisions in the AAU contemplate that a portion of the Offering may be allocated to a DSP administered by one of the Syndicate members (typically the lead left book-runner or the co-ma

VIII. Lock-Up Provisions in the AAU Context A. Relationship to Lock-Up Agreements

Article 11 of the AAU references the form of Lock-Up Agreement (the "Lock-Up Agreement") to be executed by each director, executive officer, and stockholder holding more than 1% of the outstanding shares of Lumos (on an as-converted, fully diluted basis) in favor of Pinnacle Securities LLC, as Representative. The Lock-Up Agreements are separate agreements executed by the individual lock-up signatories and delivered t

IX. Termination and Withdrawal Provisions A. Termination of the AAU

Article 12 of the AAU addresses the circumstances under which the AAU may be terminated. The AAU provides for the following termination triggers: Automatic Termination. The AAU terminates automatically, without further action by any party, upon the termination of the Underwriting Agreement for any reason, including termination by the Company, termination by the Representative, or mutual termination. Termination by th

Section 12.3 of the AAU provides that certain provisions survive the termination or expiration of the AAU, including: • Indemnification and contribution obligations (Article 6); • Confidentiality obligations (Article 14); • Expense-sharing and payment obligations (Sections 4.3 and 4.4); • Governing law and dispute resolution provisions (Article 15); and • Any other provisions that by their nature are intended to surv

X. FINRA Compliance Matters A. FINRA Rule 5110 (Underwriting Compensation) The AAU must comply with FINRA Rule 5110, which regulates the terms and arrangements of underwriting compensation in connection with public offerings of securities. Rule 5110 establishes a maximum cap on total underwriting compensation, including all items of value received by the Underwriters in connection with the Offering. Items of value su

XI. Key Observations and Recommendations for Issuer's Counsel A. Consistency with Underwriting Agreement The most critical task for issuer's counsel in reviewing the AAU is to ensure that its provisions are consistent with, and do not conflict with or undermine, the corresponding provisions of the Underwriting Agreement. We recommend cross-referencing the following provisions between the two agreements:

1. Underwriting commitment percentages and share allocations. Confirm that the allocation schedule in Schedule I to the AAU is consistent with the corresponding schedule in the Underwriting Agreement, including the total number of base Shares (16,441,176), the primary/secondary split (12,941,176 primary / 3,500,000 secondary), and each Underwriter's individual commitment.

2. Overallotment Option mechanics. Confirm that the AAU's provisions regarding the Overallotment Option — including the total number of option Shares (2,466,176), the 30-day exercise period, the pro rata allocation among Underwriters, and the exercise notice provisions — are consistent with the corresponding provisions in the Underwriting Agreement and the Company's obligations to issue additional Shares upon exercis

3. Default provisions and termination rights. Confirm that the default threshold (currently set at approximately 10% of the base Offering), the cure period (if any), and the termination triggers in the AAU are aligned with the corresponding provisions in the Underwriting Agreement, particularly the Company's and Selling Stockholders' right to terminate the Underwriting Agreement in the event of an Underwriter default

4. Indemnification and contribution. Confirm that the inter-Underwriter indemnification and contribution provisions in the AAU do not create inconsistencies with, or dilute, the Company's indemnification and contribution rights under the Underwriting Agreement. In particular, verify that no provision of the AAU purports to subordinate the Underwriting Agreement's indemnification obligations to the AAU's inter-Underwr

5. Stabilization disclosure obligations. Confirm that the stabilization and short-covering activities authorized by the AAU are accurately and completely described in the "Underwriting" section of the S-1, including the potential for stabilizing bids, syndicate covering transactions, penalty bids, and the use of the Overallotment Option as a covering mechanism.

6. Lock-up administration and waiver authority. Confirm that the AAU's provisions granting Pinnacle sole authority over lock-up waivers are consistent with any lock-up-related provisions in the Underwriting Agreement, including any notice or consultation requirements negotiated for the Company's benefit.

7. Expense allocation. Confirm that the expense allocation provisions of the AAU and the Underwriting Agreement are consistent, with no overlap, double-counting, or unexpected charges to the Company. In particular, verify that the fees and expenses of Hargrove & Liddell LLP are borne solely by the Underwriters and that no portion of such fees is charged to the Company. B. S-1 Disclosure Consistency We recommend confi

1. Notice of Lock-Up Waiver or Early Release. Request that the Underwriting Agreement include a provision requiring the Representative to provide the Company with at least three (3) business days' advance written notice before granting any waiver or early release of the lock-up restrictions applicable to any director, executive officer, or stockholder holding more than 1% of the Company's outstanding shares. This not

2. Confirmation of Expense Allocation. Request written confirmation from Pinnacle (or from Hargrove & Liddell LLP on behalf of the Underwriters) that the expense reimbursement provisions of the AAU do not include, and will not result in the inclusion of, any items of expense that are separately chargeable to the Company under the Underwriting Agreement. This confirmation will mitigate the risk of double-counting or u

3. Notice of Material Amendments to the AAU. Request that Pinnacle agree to communic