Contract analysis

I. EXECUTIVE SUMMARY A. Purpose of Memorandum This memorandum sets forth our analysis of the proposed post-closing restructuring of the existing intercompany intellectual property licensing arrangement between Luminex Systems AG ("Luminex AG"), a Swiss Aktiengesellschaft organized under the laws of Switzerland with its registered offices at Bahnhofstrasse 71, 8001 Zürich, Switzerland (Commercial Register No. CHE-284.

II. BACKGROUND A. Transaction Overview Ardent Capital Partners III LP, a Delaware limited partnership with its principal offices at 399 Park Avenue, 42nd Floor, New York, New York 10022 ("Ardent Fund III"), is the acquiring fund in this transaction. Ardent Fund III is a 2023 vintage private equity fund with total capital commitments of $12.5 billion, managed by Ardent Capital Management LLC. Theodore "Ted" Hargrove a

III. APPLICABLE LEGAL AND REGULATORY FRAMEWORK A. U.S. Transfer Pricing Rules (IRC § 482 and Treasury Regulations) The foundational U.S. transfer pricing provision is Section 482 of the Internal Revenue Code, which grants the Secretary of the Treasury (and by delegation, the Internal Revenue Service) the authority to "distribute, apportion, or allocate gross income, deductions, credits, or allowances among two or mor

Article 12 (Royalties). Article 12 of the Treaty provides that royalties arising in a Contracting State (here, the United States, as the source of the royalty payment) and paid to a resident of the other Contracting State (here, Switzerland, as the residence of Luminex AG) may be taxed in the Contracting State in which they arise, but the tax so charged shall not exceed a specified percentage of the gross amount of t

Article 7 (Business Profits). Article 7 governs the taxation of business profits attributable to a permanent establishment in the other Contracting State. To the extent that the intercompany royalty arrangement does not give rise to a permanent establishment of Luminex AG in the United States (and based on our review, it does not), Article 7 does not impose additional U.S. taxing rights beyond the royalty provision i

Article 22 (Limitation on Benefits). Article 22 contains the LOB provisions that must be satisfied in order for Luminex AG to claim the reduced withholding tax rates under the Treaty. As discussed in Section VII.D below, Luminex AG's post-closing ownership by Apex Holdings (a U.S. corporation) should satisfy the ownership and base erosion tests under the LOB article, though this analysis must be confirmed at Closing.

IV. FUNCTIONAL ANALYSIS A comprehensive functional analysis is the foundation of any transfer pricing determination. Consistent with the requirements of Treas. Reg. § 1.482-1(d)(3) and the OECD Transfer Pricing Guidelines (Chapters I through III and Chapter VI), this section identifies and evaluates the functions performed, assets employed, and risks assumed by each of Luminex AG and Luminex US in connection with the

V. PENDLETON & ASSOCIATES LLP BENCHMARK STUDY A. Overview of Study The transfer pricing benchmark study (the "Benchmark Study") was conducted by Pendleton & Associates LLP, a transfer pricing advisory firm with offices at 30 Rockefeller Plaza, Suite 2600, New York, New York 10112. The Benchmark Study was led by Richard Chow, the lead engagement partner. The scope of the Benchmark Study was to determine the arm's-leng

VI. FINANCIAL IMPACT ANALYSIS A. Impact on Luminex US (Licensee) The financial impact of the proposed restructuring on Luminex US is summarized as follows, based on 2024 revenue levels: The incremental annual royalty deduction for Luminex US of approximately $2,922,000 generates an incremental U.S. federal income tax benefit of approximately $613,620 per year at the current 21% corporate income tax rate. In addition

VII. IMPLEMENTATION CONSIDERATIONS A. Timing The restructuring of the intercompany royalty rate should be implemented post-Closing of the reverse triangular merger. The amended intercompany license agreement (or a new intercompany license agreement replacing the Existing License Agreement) should become effective as of the Closing date or the first day of the post-closing fiscal period (whichever is administratively