Contract analysis

I. EXECUTIVE SUMMARY This memorandum addresses the state and local tax considerations arising from the proposed acquisition (the "Transaction") of Luminex Systems Holdings Inc. ("Luminex Holdings" or the "Target") by Ardent Capital Partners III LP ("Ardent Fund III" or the "Buyer") for an aggregate equity value of approximately $2,800,000,000 ($20.00 per fully diluted share, based on 140,000,000 fully diluted shares

II. TRANSACTION STRUCTURE OVERVIEW (STATE TAX PERSPECTIVE) A. Pre-Closing Corporate Structure The pre-closing corporate structure of the Target group is summarized below. Understanding this structure is essential to the state tax analysis because the location of entities, assets, employees, and revenue-generating activities determines the nexus and filing obligations in each jurisdiction. Luminex Systems Holdings Inc

III. DELAWARE TAX CONSIDERATIONS A. Delaware Franchise Tax Delaware imposes an annual franchise tax on all corporations incorporated in the State of Delaware, regardless of whether the corporation conducts business or earns income in Delaware. The franchise tax is imposed under Title 8 of the Delaware Code, Section 503. All four Delaware corporations involved in the Transaction are subject to this obligation: Luminex

IV. VIRGINIA TAX CONSIDERATIONS A. Corporate Income Tax Virginia imposes a corporate income tax at a rate of 6% on the Virginia taxable income of corporations doing business in the Commonwealth. Virginia taxable income is generally computed by reference to federal taxable income, with certain Virginia-specific additions and subtractions. Both Luminex Systems Holdings Inc. and Luminex Systems Inc. have substantial nex

V. CALIFORNIA TAX CONSIDERATIONS A. Franchise / Income Tax Nexus California imposes a corporate franchise tax at a rate of 8.84% on the net income of corporations doing business in California, subject to a minimum franchise tax of $800 per year. Corporations that are not doing business in California but that derive income from California sources are subject to the 8.84% corporate income tax on their California-source

Section 338(h)(10) Election Implications: If the Section 338(h)(10) election is made, the transaction is recharacterized for tax purposes as a deemed asset sale by old target. In this scenario, the gain is no longer gain from the sale of stock but rather gain from the deemed sale of assets. Asset sale gain is generally sourced to the states where the assets are located or where the income from the assets is generated

VI. OTHER NEXUS STATES — KEY ANALYSIS A. Identification of Nexus States As a SaaS company with an enterprise customer base spanning the United States, Luminex US has market-based sourcing revenue attributed to virtually every U.S. state. In states that have adopted economic nexus thresholds for corporate income or franchise tax purposes — which, following Wayfair, now includes the vast majority of states — Luminex US

Section 338(h)(10) Conformity: New York generally conforms to the IRC, including Section 338. A Section 338(h)(10) election should be recognized for New York BCT purposes, and the stepped-up basis should generate New York-level amortization deductions. C. Texas Texas does not impose a traditional corporate income tax. Instead, Texas imposes a franchise tax, commonly known as the "margin tax," on taxable entities doin

VII. STATE TAX IMPLICATIONS OF THE SECTION 338(h)(10) ELECTION A. Overview This Section provides a detailed analysis of the state-level implications of the Section 338(h)(10) election under consideration. The reader should refer to the companion Tax Structure Memorandum (Section 338(h)(10) Election Analysis) for the comprehensive federal analysis. At the federal level, a Section 338(h)(10) election would cause the Tr