1007-00008 · Vantage Mobility Systems Corp · Negotiation Documents

term-sheet-dormancy-extension-fee-restructuring.docx DOCUMENT IP / Technology

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CONFIDENTIAL — SUBJECT TO RULE 408 / FOR SETTLEMENT DISCUSSION PURPOSES ONLY PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT

TERM SHEET

Proposed Dormancy Extension and Fee Restructuring

Nonbinding Summary of Proposed Terms for Amendment No. 1 to the Master Embedded Software License and Services Agreement dated June 21, 2022

Prepared by: Calderwood & Harkness LLP 600 Renaissance Center, Suite 3200 Detroit, MI 48243

C&H Matter No.: 1007-00008

Date of Circulation: October 16, 2023

Circulated to:

Alan M. Briscoe, Esq. Redstone Whitaker LLP 555 Mission Street, Suite 2800 San Francisco, CA 94105 Counsel for Meridian Code Technologies, Inc.

Circulated from:

Bernard Crawford, Esq. Calderwood & Harkness LLP 600 Renaissance Center, Suite 3200 Detroit, MI 48243 Counsel for Vantage Mobility Systems Corp.

1. Parties

Licensee: Vantage Mobility Systems Corp., a corporation organized and existing under the laws of the State of Delaware, with its principal offices located at 4100 Industrial Parkway, Sterling Heights, MI 48312 (hereinafter referred to as "VMS" or "Licensee").

Licensor: Meridian Code Technologies, Inc., a corporation organized and existing under the laws of the State of California, with its principal offices located at 2750 Orchard Blvd., Suite 400, Santa Clara, CA 95054 (hereinafter referred to as "MeridianCode" or "Licensor"). MeridianCode is a publicly traded company listed on the Nasdaq Stock Market under the ticker symbol MCDT.

VMS and MeridianCode are each referred to herein individually as a "Party" and collectively as the "Parties."

2. Background and Recitals

This Term Sheet is presented in connection with that certain Master Embedded Software License and Services Agreement dated June 21, 2022 (the "MESLSA"), by and between VMS, as licensee, and MeridianCode, as licensor, pursuant to which MeridianCode licensed to VMS its proprietary ATLAS-RT™ embedded real-time operating system, Version 4.2 (subsequently updated to Version 4.2.3) (the "Licensed Software"), together with related integration services, maintenance, and support.

The MESLSA contemplated a total deal value of Twenty Million Dollars ($20,000,000) over a five-year term commencing on June 21, 2022 and expiring on June 20, 2027 (the "Term"). Under the original terms of the MESLSA and the attached Statement of Work No. 1 ("SOW No. 1"), MeridianCode was engaged to support the integration of the Licensed Software into five designated vehicle platform configurations — internally designated by VMS as Argonaut-A, Argonaut-B, Argonaut-C, Argonaut-D, and Argonaut-E (collectively, the "Original Platforms") — under VMS's internal development initiative known as "Project Argonaut."

On March 14, 2023, the Board of Directors of VMS resolved to rescope Project Argonaut from five vehicle platform configurations to two vehicle platform configurations — specifically, Argonaut-A and Argonaut-C — and to defer electrification integration activities to a future phase of development. This decision was driven by persistent supply-chain delays in semiconductor procurement affecting key components sourced through VMS's Tier 1 and Tier 2 suppliers, as well as a portfolio-wide capital expenditure reduction directive issued by VMS's management and its private equity sponsor. As a direct consequence of this rescoping decision, all active integration work under SOW No. 1 was suspended effective March 22, 2023.

Following suspension of integration activities, VMS evaluated its options under the MESLSA and, on July 14, 2023, delivered written notice of dormancy to MeridianCode pursuant to Section 9.4 of the MESLSA. This notice was delivered six (6) calendar days prior to the 120-day dormancy trigger date of July 20, 2023 (calculated as 120 days following the March 22, 2023 suspension date). MeridianCode acknowledged VMS's Dormancy Status by written correspondence dated August 3, 2023, thereby commencing the twelve-month dormancy cap period under Section 9.4 of the MESLSA. Support obligations were reduced at that time to critical-security-patch-only level, consistent with the dormancy provisions of the MESLSA.

Under the current terms of the MESLSA, the twelve-month dormancy cap period will expire on August 3, 2024, at which time the Parties are required either to renegotiate the terms of the MESLSA or to proceed to termination.

The Parties have unresolved disputes concerning the following matters:

(a) VMS's obligation to pay the Year 2 Maintenance & Support Fee in the amount of Two Million Four Hundred Thousand Dollars ($2,400,000), which was invoiced by MeridianCode on July 1, 2023, and which VMS contends is not payable, or is payable only on a reduced basis, during Dormancy Status given the reduction in support services to the critical-security-patch-only level under Section 9.4;

(b) Ownership of certain derivative works created by VMS engineers during the integration of the Licensed Software into the Argonaut-A and Argonaut-C platforms, which VMS contends are solely owned by VMS and which MeridianCode contends are jointly owned under Section 7.2 of the MESLSA; and

(c) The effect of Dormancy Status on the milestone deadlines set forth in Section 4.3 of the MESLSA, including the Use-It-or-Lose-It deadline originally set for December 21, 2023.

This Term Sheet sets forth the principal proposed terms for a negotiated amendment to the MESLSA (the "Amendment" or "Amendment No. 1") intended to resolve these disputes, extend the dormancy period, restructure the fee arrangements between the Parties, and preserve VMS's optionality with respect to reactivation of the license.

3. Nonbinding Nature

This Term Sheet is nonbinding and is intended solely for discussion purposes between the Parties and their respective counsel. No Party shall have any obligation — whether legal, equitable, or otherwise — with respect to any of the transactions, arrangements, or proposals described herein unless and until a definitive Amendment No. 1 to the MESLSA has been duly executed and delivered by both Parties.

All discussions, drafts, proposals, counterproposals, and negotiations relating to this Term Sheet are conducted subject to and in reliance upon the protections afforded by Federal Rule of Evidence 408 and its state-law equivalents in all applicable jurisdictions. The contents of this Term Sheet and any communications relating hereto shall be inadmissible in any judicial or administrative proceeding, including without limitation any arbitration proceeding before the Midwest Arbitration Institute, for the purpose of proving the validity or invalidity of any claim or the amount of any damages.

Nothing contained in this Term Sheet shall constitute, or shall be deemed to constitute, a waiver of either Party's rights, remedies, claims, defenses, or positions under the MESLSA, at law, or in equity. Each Party expressly reserves all such rights and remedies in full.

4. Dormancy Extension

Current Dormancy Status. Dormancy under the MESLSA commenced on August 3, 2023, the date of MeridianCode's written acknowledgment of VMS's dormancy notice, pursuant to Section 9.4 of the MESLSA. During the current dormancy period, MeridianCode's maintenance and support obligations have been reduced to the critical-security-patch-only level, and all milestone deadlines under SOW No. 1 have been tolled.

Proposed Extension. VMS proposes that the twelve-month dormancy cap currently in effect under Section 9.4 of the MESLSA be extended by an additional twelve (12) months, from August 3, 2024 to August 3, 2025. This extension would result in a total dormancy period of twenty-four (24) months, running from August 3, 2023 through and including August 3, 2025.

Mandatory Renegotiation / Termination Trigger. The mandatory renegotiation or termination deadline currently set for August 3, 2024 shall be reset to August 3, 2025. If VMS has not reactivated the license or the Parties have not agreed to further terms governing the license relationship by August 3, 2025, either Party may terminate the MESLSA upon ninety (90) days' prior written notice to the other Party, subject to the termination provisions set forth in Section 9 herein.

Support During Extended Dormancy. During the extended dormancy period, MeridianCode shall continue to provide critical-security-patch-only support for the Licensed Software (ATLAS-RT Version 4.2.3) on the same terms and conditions as have been in effect since the commencement of Dormancy Status on August 3, 2023. For avoidance of doubt, MeridianCode shall not be obligated to provide general maintenance, feature enhancements, non-critical bug fixes, or dedicated engineering support during the extended dormancy period, except to the extent required to address critical security vulnerabilities in the Licensed Software.

Tolling. All milestone deadlines established under SOW No. 1 and Section 4.3 of the MESLSA — including, without limitation, the Section 4.3 Use-It-or-Lose-It deadline originally set for December 21, 2023 — shall remain tolled throughout the extended dormancy period and for a period of ninety (90) calendar days following the effective date of any reactivation of the license. The tolling period shall apply continuously from the commencement of Dormancy Status on August 3, 2023 through the date that is ninety (90) days after VMS delivers a valid reactivation notice, or through the termination of the MESLSA, whichever occurs first.

5. Scope Reduction

Current Scope. Under the MESLSA and SOW No. 1 as currently in effect, MeridianCode has licensed VMS to integrate the Licensed Software into up to five (5) designated vehicle platform configurations: Argonaut-A, Argonaut-B, Argonaut-C, Argonaut-D, and Argonaut-E.

Proposed Reduced Scope. VMS proposes that the license scope under the MESLSA and SOW No. 1 be permanently reduced from five (5) designated vehicle platform configurations to two (2) designated vehicle platform configurations, specifically:

(i) Argonaut-A; and

(ii) Argonaut-C.

Eliminated Platforms. The following vehicle platform configurations shall be permanently removed from the scope of the license and from all milestone schedules, deliverables, and obligations under SOW No. 1:

(i) Argonaut-B;

(ii) Argonaut-D; and

(iii) Argonaut-E.

Neither Party shall have any further obligation with respect to the integration of the Licensed Software into the eliminated platforms, and MeridianCode shall have no obligation to perform integration services or provide platform-specific customizations for Argonaut-B, Argonaut-D, or Argonaut-E.

Integration Status at Time of Suspension. For reference, the integration status of each platform as of the March 22, 2023 suspension date was as follows:

Effect on SOW No. 1. SOW No. 1 shall be amended to reflect the reduced scope described above. All milestones, deliverables, schedules, resource commitments, and fee obligations pertaining to Argonaut-B, Argonaut-D, and Argonaut-E shall be eliminated from SOW No. 1. The amended SOW No. 1 shall address only the remaining integration work required for Argonaut-A (Milestones 4 and 5) and Argonaut-C (Milestones 3, 4, and 5).

Section 4.3 Compliance. Upon reactivation of the license, VMS shall be required to commence integration testing on both Argonaut-A and Argonaut-C within twelve (12) months of the effective date of reactivation (revised from the original eighteen-month deadline, which was tied to the Effective Date of the MESLSA). VMS asserts, and shall maintain the position in any definitive Amendment, that Argonaut-A has already satisfied the "commence integration testing" requirement based on VMS's completion of Milestone 3 (alpha integration testing) for that platform on February 28, 2023. Accordingly, upon reactivation, VMS would need to achieve commencement of integration testing on Argonaut-C within the twelve-month period.

6. Fee Restructuring

6.1 Summary of Fees Paid to Date

As of the date of this Term Sheet, VMS has made the following payments to MeridianCode under the MESLSA:

No runtime royalties have been incurred or paid to date, as no units incorporating the Licensed Software have been shipped by VMS.

6.2 Year 2 Maintenance & Support Fee — Credit Proposal

MeridianCode invoiced VMS for the Year 2 Maintenance & Support Fee in the amount of Two Million Four Hundred Thousand Dollars ($2,400,000) on July 1, 2023. VMS disputes its obligation to pay the full Year 2 Maintenance & Support Fee during Dormancy Status, on the grounds that MeridianCode's support obligations have been reduced to the critical-security-patch-only level under Section 9.4 of the MESLSA, and that the Year 2 Maintenance & Support Fee was calculated based on the assumption of full maintenance and support services across all five Original Platforms.

Proposed Resolution. The Parties propose to resolve this dispute as follows:

(a) The Year 2 Maintenance & Support Fee of $2,400,000 shall be credited in full against future integration services fees payable by VMS upon reactivation of the license (the "Year 2 Credit").

(b) No cash payment of the Year 2 Maintenance & Support Fee shall be required of VMS during the dormancy period.

(c) If VMS elects to terminate the MESLSA without reactivation of the license, the Year 2 Maintenance & Support Fee shall be deemed waived in its entirety, and neither Party shall have any further obligation with respect thereto. MeridianCode shall withdraw the July 1, 2023 invoice, and no receivable shall be reflected on MeridianCode's books with respect to such fee following termination.

6.3 Integration Services Fee Adjustment

Under the original terms of SOW No. 1, the total integration services fee was Three Million Two Hundred Thousand Dollars ($3,200,000), allocated across five (5) milestones at Six Hundred Forty Thousand Dollars ($640,000) per milestone. Of this amount, One Million Nine Hundred Twenty Thousand Dollars ($1,920,000) has been paid by VMS with respect to Milestones 1, 2, and 3. The remaining unpaid balance for Milestones 4 and 5 is One Million Two Hundred Eighty Thousand Dollars ($1,280,000).

Proposed Adjustment. Upon reactivation of the license, the remaining integration services milestones shall be restructured to reflect the two-platform scope (Argonaut-A and Argonaut-C only). A revised milestone schedule, including updated deliverables, timelines, acceptance criteria, and corresponding fees, shall be set forth in an amended SOW No. 1 to be negotiated and executed as part of the definitive Amendment No. 1.

The Year 2 Credit of $2,400,000 described in Section 6.2 above shall be applied first against any remaining integration services fees payable under the amended SOW No. 1. To the extent the Year 2 Credit exceeds the remaining integration services fees, the balance shall be carried forward as a credit against future maintenance fees, including Year 3 and subsequent annual maintenance and support fees, and/or against runtime royalty obligations under the MESLSA.

6.4 Per-Unit Runtime Royalty Cap Reduction

Under the current terms of the MESLSA, VMS is obligated to pay a per-unit runtime royalty of Eighty Dollars ($80.00) per unit for each unit incorporating the Licensed Software that is shipped to end customers. The original aggregate runtime royalty cap was Four Million Dollars ($4,000,000), accommodating up to fifty thousand (50,000) units over the five-year Term.

As of the date of this Term Sheet, no runtime royalties have been incurred, as no units incorporating the Licensed Software have been shipped by VMS.

Proposed Adjustment. The aggregate runtime royalty cap shall be reduced from $4,000,000 to Two Million Dollars ($2,000,000), reflecting the reduction in licensed platforms from five to two. The per-unit royalty rate shall remain at $80.00 per unit, and the reduced cap shall accommodate up to twenty-five thousand (25,000) units.

The five-year calculation period for runtime royalties shall commence upon the effective date of reactivation of the license (rather than from the original Effective Date of June 21, 2022); provided, however, that the MESLSA expiration date of June 20, 2027 shall remain unchanged unless separately extended by mutual written agreement of the Parties. In the event the period from reactivation to the MESLSA expiration date is less than five years, the Parties shall negotiate in good faith regarding an appropriate extension or adjustment to the royalty calculation period as part of the definitive Amendment No. 1.

6.5 Revised Total Deal Value

The original total deal value of the MESLSA was Twenty Million Dollars ($20,000,000). The proposed fee restructuring and scope reduction would result in the following revised financial framework:

Under this proposed restructuring, VMS's remaining contractual cash exposure would be reduced by approximately Seven Million Six Hundred Eighty Thousand Dollars ($7,680,000) from VMS's maximum remaining obligations under the original MESLSA. The precise reduction will depend upon the revised integration services fees to be established in the amended SOW No. 1 and the negotiation of subsequent maintenance fee terms.

6.6 Upfront License Fee — No Forfeiture

VMS's Upfront License Fee of Eight Million Dollars ($8,000,000), paid on June 21, 2022, shall not be subject to forfeiture under any circumstances, including but not limited to:

(a) termination of the MESLSA during the extended dormancy period;

(b) termination of the MESLSA following the extended dormancy period;

(d) expiration of the MESLSA at the end of its Term.

Section 9.1 of the MESLSA, to the extent it contains a fee-forfeiture provision applicable to termination for convenience, shall be deemed inapplicable to any termination occurring after June 21, 2024 (the twenty-four-month anniversary of the MESLSA Effective Date).

If VMS elects to terminate the MESLSA during the extended dormancy period but after June 21, 2024, VMS shall retain a perpetual, non-exclusive, non-transferable license to the Licensed Software (ATLAS-RT Version 4.2.3) solely for internal evaluation, testing, and development use. This retained license shall expressly exclude any right to production deployment, commercialization, or distribution of the Licensed Software in any vehicle or product shipped to end customers. The retained license shall remain subject to the confidentiality and intellectual property obligations set forth in the MESLSA, which shall survive termination.

7. Derivative Works Ownership Carve-Out

Derivative Works at Issue. During the integration of the Licensed Software into the Argonaut-A and Argonaut-C platforms, VMS engineers developed three software modules designated as follows:

(i) DW-001 — an interface abstraction layer facilitating communication between ATLAS-RT and VMS's proprietary vehicle control unit firmware;

(ii) DW-002 — a diagnostic telemetry module enabling real-time performance monitoring of the ATLAS-RT kernel in the Argonaut-A environment; and

(iii) DW-003 — a sensor fusion middleware component integrating ATLAS-RT with VMS's proprietary LiDAR and radar data processing pipeline for the Argonaut-C platform.

These three modules (collectively, the "VMS Derivative Works") comprise approximately forty-seven thousand (47,000) lines of code and were developed primarily by a team of VMS software engineers led by Lena Petrova, VMS's Director of Software Integration Engineering.

Estimated Commercial Value. An independent assessment of the VMS Derivative Works conducted by Hargrove Technical Consulting, LLC, under the direction of Dr. Samuel Beecroft, Ph.D., has estimated the aggregate commercial value of DW-001, DW-002, and DW-003 at between One Million Eight Hundred Thousand Dollars ($1,800,000) and Two Million Five Hundred Thousand Dollars ($2,500,000), based on replacement cost, market comparables, and potential licensing revenue analyses.

Current Contractual Framework. Section 7.2 of the MESLSA provides that derivative works created in connection with the integration of the Licensed Software shall be jointly owned by VMS and MeridianCode, with MeridianCode retaining a perpetual, royalty-free license to use, modify, distribute, and sublicense such derivative works without restriction.

VMS Position. VMS takes the position that DW-001, DW-002, and DW-003 are VMS-originated works, developed independently by VMS engineers using VMS resources, facilities, and proprietary know-how, and that Section 7.2's joint ownership framework should not apply to these modules. VMS further contends that these modules constitute original works of authorship by VMS engineers and should be solely owned by VMS.

Proposed Carve-Out. The Parties propose to address the derivative works dispute as follows:

(a) VMS Sole Ownership. VMS shall retain sole and exclusive ownership of DW-001, DW-002, and DW-003, including all intellectual property rights therein (copyrights, trade secrets, and any patent rights, if applicable). MeridianCode shall execute any assignments or other documents reasonably necessary to confirm VMS's sole ownership.

(b) Limited License to MeridianCode. MeridianCode shall receive a limited, non-exclusive, royalty-free, non-transferable license to use DW-001, DW-002, and DW-003 solely for non-automotive applications. This limited license shall expressly exclude any use of the VMS Derivative Works in automotive, mobility, transportation, or vehicle-related applications of any kind, whether for MeridianCode's own products or for the benefit of any third-party licensee or customer of MeridianCode.

(c) Supersession of Section 7.2. The perpetual, royalty-free license-back provision set forth in Section 7.2 of the MESLSA shall be superseded in its entirety as applied to DW-001, DW-002, and DW-003, and shall be replaced by the limited license described in paragraph (b) above.

(d) Future Derivative Works. Section 7.2 of the MESLSA shall continue to apply to any derivative works created during any reactivated integration work under the MESLSA, subject to the negotiation of revised derivative works terms to be included in Amendment No. 1. VMS reserves the right to propose modifications to the joint ownership framework of Section 7.2 for future derivative works as part of the Amendment No. 1 negotiations.

(e) Documentation. The derivative works carve-out shall be documented in a separate Side Letter (the "Derivative Works Side Letter") to be executed concurrently with Amendment No. 1. The Derivative Works Side Letter shall include appropriate representations, warranties, and indemnification provisions relating to the VMS Derivative Works.

8. Reactivation Mechanics

Reactivation Notice. VMS may reactivate the license at any time during the extended dormancy period by delivering sixty (60) days' prior written notice to MeridianCode (the "Reactivation Notice"). The Reactivation Notice shall specify VMS's proposed reactivation date and shall be accompanied by a preliminary summary of VMS's updated integration timeline for the Argonaut-A and Argonaut-C platforms.

Upon Reactivation. Upon delivery of a valid Reactivation Notice and the commencement of the reactivation period, the following shall occur:

(a) Restoration of Full Support. MeridianCode shall restore full maintenance and support services (beyond the critical-security-patch-only level) within thirty (30) calendar days of receipt of the Reactivation Notice. Full maintenance and support shall include all services and service levels described in Exhibit B to the MESLSA, as may be modified by Amendment No. 1.

(b) Recommencement of Milestone Deadlines. Milestone deadlines under SOW No. 1 (as amended) shall recommence ninety (90) calendar days after the effective date of reactivation. Milestones shall recommence based on the integration status of each platform as of the March 22, 2023 suspension date — specifically, Argonaut-A at Milestone 3 (with Milestones 4 and 5 remaining) and Argonaut-C at Milestone 2 (with Milestones 3, 4, and 5 remaining).

(c) Updated Integration Plan. VMS shall provide MeridianCode with an updated integration plan for the two-platform scope within sixty (60) calendar days of the effective date of reactivation. The updated integration plan shall address resource allocation, testing environments, anticipated milestone completion dates, and any known technical dependencies or risks.

(d) Application of Year 2 Credit. The Year 2 Credit of $2,400,000 described in Section 6.2 shall be applied against integration services fees and other obligations as described therein upon reactivation.

No Reactivation Fee. VMS shall not be required to pay any reactivation fee, restart fee, mobilization fee, or any similar charge in connection with the reactivation of the license. MeridianCode's obligation to restore full support and resume integration services shall not be conditioned upon the payment of any additional fee beyond those contemplated by the MESLSA (as amended by Amendment No. 1) and the amended SOW No. 1.

Software Version. Upon reactivation, MeridianCode shall provide VMS with the then-current minor-release version of ATLAS-RT (at minimum, Version 4.2.3) at no additional license fee. If MeridianCode has released a minor-version update (e.g., Version 4.2.4 or Version 4.2.5) during the dormancy period, VMS shall be entitled to receive such update as part of the reactivation without incremental licensing charges. Major-version upgrades (e.g., Version 5.0), if any, shall be subject to separate negotiation.

9. Termination Rights During Extended Dormancy

Each Party's right to terminate the MESLSA for convenience under Section 9.1 shall be preserved, subject to the following modifications applicable during the extended dormancy period:

(a) No Forfeiture After 24-Month Anniversary. If VMS terminates the MESLSA for convenience after June 21, 2024 (the twenty-four-month anniversary of the Effective Date), VMS shall not forfeit any prepaid fees, including the Upfront License Fee of $8,000,000, and shall retain the perpetual internal-use license described in Section 6.6 above.

(b) Retention of Derivative Works Rights. If VMS terminates the MESLSA during the extended dormancy period (whether before or after June 21, 2024), VMS shall retain all rights to the VMS Derivative Works (DW-001, DW-002, and DW-003) as described in Section 7 above, and MeridianCode's limited license to such derivative works shall survive termination.

(c) MeridianCode Termination Right at Extended Dormancy Cap. MeridianCode may terminate the MESLSA if VMS has not reactivated the license by August 3, 2025 (the expiration of the extended dormancy cap), subject to (i) ninety (90) days' prior written notice to VMS, and (ii) a mandatory good-faith renegotiation period of not less than sixty (60) days, during which the Parties shall engage in meaningful discussions regarding the potential for further extension, reactivation, or other mutually acceptable arrangements. MeridianCode's termination right shall not be exercisable until the conclusion of such renegotiation period without agreement.

Termination for cause provisions under the MESLSA, including termination for material breach (Section 9.2) and termination upon insolvency or bankruptcy (Section 9.3), shall remain in full force and effect without modification.

10. Section 4.3 — Use-It-or-Lose-It Deadline

Under Section 4.3 of the MESLSA, VMS was required to commence integration testing on at least two (2) of the licensed vehicle platforms within eighteen (18) months of the Effective Date — i.e., by December 21, 2023 (the "Use-It-or-Lose-It Deadline"). Failure to meet this deadline would, under the original terms of Section 4.3, result in a scope reduction and potential fee forfeiture consequences.

VMS's Position. VMS asserts that: (a) Dormancy Status tolls the Section 4.3 deadline pursuant to the tolling provisions of Section 9.4 of the MESLSA, and accordingly the December 21, 2023 deadline is currently inoperative; and (b) VMS's completion of Milestone 3 (alpha integration testing) for the Argonaut-A platform on February 28, 2023 already constitutes "commencement of integration testing" on one platform within the meaning of Section 4.3, thereby partially satisfying the requirement prior to the onset of dormancy.

Proposed Amendment. The Section 4.3 Use-It-or-Lose-It Deadline shall be amended as follows:

(a) The original December 21, 2023 deadline shall be deemed tolled and of no further force or effect.

(b) A new deadline shall be established requiring VMS to achieve commencement of integration testing on both Argonaut-A and Argonaut-C within twelve (12) months following the effective date of any reactivation of the license.

(c) VMS's prior completion of Milestone 3 for the Argonaut-A platform (alpha integration testing passed on February 28, 2023) shall be deemed to constitute satisfaction of the "commencement of integration testing" requirement for Argonaut-A. Accordingly, upon reactivation, VMS shall be required to achieve commencement of integration testing on Argonaut-C within the twelve-month period referenced in paragraph (b) above.

11. Change of Control

Section 12.6 of the MESLSA, which requires the licensor's prior written consent for any assignment of the MESLSA in connection with a change of control of VMS (such consent not to be unreasonably withheld, conditioned, or delayed), shall remain in full force and effect without modification.

For the avoidance of doubt, the Parties acknowledge the current ownership structure of VMS, in which Kestrel Capital Partners, LP serves as the private equity sponsor, with Cobalt Ridge Partners GP, LLC acting as general partner. No change of control of VMS is currently contemplated, planned, or under discussion. In the event that any change of control transaction involving VMS is contemplated in the future, VMS shall comply with its obligations under Section 12.6 of the MESLSA and shall provide MeridianCode with timely notice and an opportunity to consent as required thereunder.

12. Credit Facility Considerations

VMS acknowledges that the MESLSA and any amendment thereto constitute a "material contract" as defined in Section 6.12 of that certain Senior Secured Revolving Credit Facility Agreement dated September 12, 2019 (as amended from time to time, the "Credit Facility"), among VMS, as borrower, and Pinnacle National Bank, N.A., as administrative agent and lead lender. Section 6.12 of the Credit Facility requires VMS to notify the administrative agent of any material modifications to contracts involving aggregate commitments or liabilities in excess of Five Million Dollars ($5,000,000).

VMS previously notified Pinnacle National Bank, N.A. of VMS's entry into Dormancy Status under the MESLSA by written notice dated August 10, 2023, in accordance with its covenant obligations under the Credit Facility. VMS covenants to notify Pinnacle National Bank, N.A. of the execution of any definitive Amendment No. 1 to the MESLSA, and to provide such additional information regarding the Amendment as may be reasonably requested by the administrative agent, in each case in accordance with the notification and reporting obligations set forth in the Credit Facility.

For informational purposes, VMS represents that outstanding borrowings under the Pinnacle facility as of July 2023 were approximately Ninety-Two Million Dollars ($92,000,000), and that VMS is currently in compliance with all financial and reporting covenants thereunder.

13. Governing Law and Dispute Resolution

Amendment No. 1 to the MESLSA, together with this Term Sheet, shall be governed by and construed in accordance with the laws of the State of Michigan, without giving effect to any choice-of-law or conflict-of-law provisions that would cause the application of the laws of any other jurisdiction. This governing law provision is consistent with Section 13.1 of the MESLSA.

Any dispute, controversy, or claim arising out of or relating to Amendment No. 1, this Term Sheet, or the MESLSA (including any question regarding its existence, validity, or termination) shall be resolved by binding arbitration administered under the rules and procedures of the Midwest Arbitration Institute, seated in Detroit, Michigan. For disputes involving amounts in controversy exceeding One Million Dollars ($1,000,000), the arbitration shall be heard by a panel of three (3) arbitrators. For disputes involving amounts in controversy of One Million Dollars ($1,000,000) or less, a single arbitrator shall preside. The arbitration provisions set forth in Section 13.2 of the MESLSA, including provisions regarding discovery, confidentiality of proceedings, allocation of arbitration costs, and enforceability of awards, shall apply to any disputes arising under or relating to Amendment No. 1.

14. Confidentiality

The terms and conditions of this Term Sheet, all negotiations and communications relating hereto, and the terms and conditions of any definitive Amendment No. 1 shall be subject to the confidentiality provisions set forth in Section 11 of the MESLSA, which provisions are incorporated herein by reference.

Neither Party shall disclose the existence or terms of this Term Sheet, or of any definitive Amendment No. 1, to any third party without the prior written consent of the other Party, except as may be required by applicable law, regulation, court order, or legal process, or as reasonably necessary for disclosures to the following:

(a) VMS's private equity sponsor, Kestrel Capital Partners, LP, and its general partner, Cobalt Ridge Partners GP, LLC, and their respective officers, directors, employees, and advisors with a need to know;

(b) VMS's lenders, including Pinnacle National Bank, N.A., as administrative agent under the Credit Facility, and any other lender party thereto, in connection with VMS's covenant compliance obligations;

(d) VMS's technology errors and omissions insurer, Commonwealth Surety & Insurance Co. (Policy No. TEO-2022-7891), in connection with any coverage inquiries or notifications; and

(e) Each Party's legal counsel, financial advisors, and other professional advisors engaged in connection with the transactions contemplated by this Term Sheet, provided that such advisors are bound by obligations of confidentiality no less restrictive than those set forth in the MESLSA.

MeridianCode acknowledges its obligations as a Nasdaq-listed company (ticker: MCDT) under applicable federal securities laws and Nasdaq listing rules regarding the timely disclosure of material information. To the extent MeridianCode determines that disclosure of the existence or terms of Amendment No. 1 may be required under applicable securities laws or regulations, MeridianCode shall coordinate with VMS in advance of any such disclosure, provide VMS with a reasonable opportunity to review and comment on the proposed disclosure, and use commercially reasonable efforts to minimize the scope of any public disclosure to the extent consistent with MeridianCode's legal obligations.

15. Timeline and Next Steps

VMS respectfully requests that MeridianCode, through its counsel at Redstone Whitaker LLP, provide a written response to this Term Sheet within thirty (30) calendar days of the date of circulation. The response should address each of the principal terms set forth herein and identify any terms to which MeridianCode objects, proposes modifications, or requires additional information.

If the principal terms set forth in this Term Sheet are agreed upon in substance, Calderwood & Harkness LLP, on behalf of VMS, shall prepare and circulate a draft of Amendment No. 1 to the MESLSA and a draft of the Derivative Works Side Letter within fifteen (15) business days following the date on which the Parties reach agreement on this Term Sheet.

The Parties' target is to execute all definitive documents — including Amendment No. 1 and the Derivative Works Side Letter — prior to August 3, 2024, the expiration date of the current twelve-month dormancy cap under Section 9.4 of the MESLSA.

All responses, counterproposals, and negotiations shall be conducted between Bernard Crawford, Partner, Calderwood & Harkness LLP (counsel for VMS) and Alan M. Briscoe, Partner, Redstone Whitaker LLP (counsel for MeridianCode), unless the Parties mutually agree to designate additional or alternative representatives.

16. Key Dates Summary

The following table sets forth a summary of the key dates relevant to the matters addressed in this Term Sheet:

17. Fee Exposure Summary

The following table summarizes VMS's fee exposure under the MESLSA as currently in effect and as proposed to be restructured under this Term Sheet:

ACKNOWLEDGMENT OF RECEIPT AND AGREEMENT TO NEGOTIATE IN GOOD FAITH

The undersigned hereby acknowledge receipt of this Term Sheet and agree to negotiate in good faith toward the execution of a definitive Amendment No. 1 to the MESLSA and a Derivative Works Side Letter on the terms and subject to the conditions described herein. This acknowledgment does not create any binding obligations on either Party. Definitive terms shall be set forth solely in executed Amendment No. 1 to the MESLSA and any related Side Letter, and neither Party shall be bound unless and until such definitive documents are duly executed and delivered.

COUNSEL FOR VANTAGE MOBILITY SYSTEMS CORP.

By: ________

Name: Bernard Crawford

Title: Partner, Calderwood & Harkness LLP

Date: ________

600 Renaissance Center, Suite 3200 Detroit, MI 48243

COUNSEL FOR MERIDIAN CODE TECHNOLOGIES, INC.

By: ________

Name: Alan M. Briscoe

Title: Partner, Redstone Whitaker LLP

Date: ________

555 Mission Street, Suite 2800 San Francisco, CA 94105

This Term Sheet does not create any binding obligations. Definitive terms shall be set forth solely in executed Amendment No. 1 to the MESLSA and any related Side Letter. All discussions, drafts, and negotiations relating to this Term Sheet are subject to Federal Rule of Evidence 408 and its state-law equivalents and are inadmissible in any proceeding, including any arbitration before the Midwest Arbitration Institute.

CONFIDENTIAL — SUBJECT TO RULE 408 / FOR SETTLEMENT DISCUSSION PURPOSES ONLY PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT Calderwood & Harkness LLP — C&H Matter No. 1007-00008

Platform	Status	Last Milestone Completed	Date
Argonaut-A	Milestone 3 of 5 completed	Alpha integration testing passed	February 28, 2023
Argonaut-C	Milestone 2 of 5 completed	Source-code customization delivered	January 15, 2023
Argonaut-B	Milestone 1 only	Requirements specification approved	No code integration begun
Argonaut-D	Not commenced	N/A	N/A
Argonaut-E	Not commenced	N/A	N/A
Fee Component	Amount	Date Paid
Upfront License Fee	$8,000,000	June 21, 2022
Year 1 Maintenance & Support Fee	$2,400,000	July 15, 2022
Integration Services Fees (Milestones 1–3)	$1,920,000	Various (upon milestone completion)
Total Fees Paid to Date	$12,320,000
Component	Original Amount	Proposed Revised Amount	Status
Upfront License Fee	$8,000,000	$8,000,000 (unchanged)	Paid
Year 1 Maintenance & Support	$2,400,000	$2,400,000 (unchanged)	Paid
Year 2 Maintenance & Support	$2,400,000	$2,400,000 (credited, not a new cash obligation)	Credited
Integration Services (total)	$3,200,000	TBD per amended SOW (with $2,400,000 credit applied)	Partially paid ($1,920,000)
Runtime Royalty Cap	$4,000,000	$2,000,000	Not yet incurred
Subsequent Annual Maintenance	Subject to MESLSA terms	Subject to further negotiation upon reactivation	Not yet incurred
Date	Event / Deadline
June 21, 2022	MESLSA Effective Date; Upfront License Fee of $8,000,000 paid
July 15, 2022	Year 1 Maintenance & Support Fee of $2,400,000 paid
January 15, 2023	Argonaut-C Milestone 2 completed (source-code customization delivered)
February 28, 2023	Argonaut-A Milestone 3 completed (alpha integration testing passed)
March 14, 2023	VMS Board resolves to rescope Project Argonaut
March 22, 2023	Integration work suspended

July 1, 2023	MeridianCode invoices Year 2 Maintenance & Support Fee ($2,400,000)
July 14, 2023	VMS delivers dormancy notice pursuant to Section 9.4
August 3, 2023	MeridianCode acknowledges Dormancy Status; 12-month dormancy cap commences
August 10, 2023	VMS notifies Pinnacle National Bank, N.A. of dormancy status
October 16, 2023	This Term Sheet circulated
December 21, 2023	Original Section 4.3 Use-It-or-Lose-It Deadline (proposed to be tolled/reset)
June 21, 2024	24-month anniversary of MESLSA — fee forfeiture risk eliminated per Section 6.6
August 3, 2024	Current 12-month dormancy cap expiration — target execution of Amendment No. 1 before this date
August 3, 2025	Proposed extended dormancy cap (24 months from dormancy acknowledgment)
June 20, 2027	MESLSA expiration (end of 5-year Term)
Fee Component	Paid to Date	Disputed / Credited	Proposed Remaining Obligation
Upfront License Fee	$8,000,000	—	$0 (no forfeiture under any scenario)
Year 1 Maintenance & Support	$2,400,000	—	$0
Year 2 Maintenance & Support	$0	$2,400,000 (credited against future fees)	$0 cash payment required
Integration Services (M1–M3)	$1,920,000	—	$0
Integration Services (M4–M5)	$0	Subject to amended SOW No. 1	TBD (offset by Year 2 Credit)
Runtime Royalties	$0	Aggregate cap reduced from $4,000,000 to $2,000,000	$2,000,000 maximum
Total Paid to Date	$12,320,000

CONFIDENTIAL — SUBJECT TO RULE 408 / FOR SETTLEMENT DISCUSSION PURPOSES ONLY PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT
TERM SHEET
Proposed Dormancy Extension and Fee Restructuring
Nonbinding Summary of Proposed Terms for Amendment No. 1 to the Master Embedded Software License and Services Agreement dated June 21, 2022
Prepared by: Calderwood & Harkness LLP 600 Renaissance Center, Suite 3200 Detroit, MI 48243
C&H Matter No.: 1007-00008
Date of Circulation: October 16, 2023
Circulated to:
Alan M. Briscoe, Esq. Redstone Whitaker LLP 555 Mission Street, Suite 2800 San Francisco, CA 94105 Counsel for Meridian Code Technologies, Inc.
Circulated from:
Bernard Crawford, Esq. Calderwood & Harkness LLP 600 Renaissance Center, Suite 3200 Detroit, MI 48243 Counsel for Vantage Mobility Systems Corp.
1. Parties
Licensee: Vantage Mobility Systems Corp., a corporation organized and existing under the laws of the State of Delaware, with its principal offices located at 4100 Industrial Parkway, Sterling Heights, MI 48312 (hereinafter referred to as "VMS" or "Licensee").
Licensor: Meridian Code Technologies, Inc., a corporation organized and existing under the laws of the State of California, with its principal offices located at 2750 Orchard Blvd., Suite 400, Santa Clara, CA 95054 (hereinafter referred to as "MeridianCode" or "Licensor"). MeridianCode is a publicly traded company listed on the Nasdaq Stock Market under the ticker symbol MCDT.
VMS and MeridianCode are each referred to herein individually as a "Party" and collectively as the "Parties."
2. Background and Recitals
This Term Sheet is presented in connection with that certain Master Embedded Software License and Services Agreement dated June 21, 2022 (the "MESLSA"), by and between VMS, as licensee, and MeridianCode, as licensor, pursuant to which MeridianCode licensed to VMS its proprietary ATLAS-RT™ embedded real-time operating system, Version 4.2 (subsequently updated to Version 4.2.3) (the "Licensed Software"), together with related integration services, maintenance, and support.
The MESLSA contemplated a total deal value of Twenty Million Dollars ($20,000,000) over a five-year term commencing on June 21, 2022 and expiring on June 20, 2027 (the "Term"). Under the original terms of the MESLSA and the attached Statement of Work No. 1 ("SOW No. 1"), MeridianCode was engaged to support the integration of the Licensed Software into five designated vehicle platform configurations — internally designated by VMS as Argonaut-A, Argonaut-B, Argonaut-C, Argonaut-D, and Argonaut-E (collectively, the "Original Platforms") — under VMS's internal development initiative known as "Project Argonaut."
On March 14, 2023, the Board of Directors of VMS resolved to rescope Project Argonaut from five vehicle platform configurations to two vehicle platform configurations — specifically, Argonaut-A and Argonaut-C — and to defer electrification integration activities to a future phase of development. This decision was driven by persistent supply-chain delays in semiconductor procurement affecting key components sourced through VMS's Tier 1 and Tier 2 suppliers, as well as a portfolio-wide capital expenditure reduction directive issued by VMS's management and its private equity sponsor. As a direct consequence of this rescoping decision, all active integration work under SOW No. 1 was suspended effective March 22, 2023.
Following suspension of integration activities, VMS evaluated its options under the MESLSA and, on July 14, 2023, delivered written notice of dormancy to MeridianCode pursuant to Section 9.4 of the MESLSA. This notice was delivered six (6) calendar days prior to the 120-day dormancy trigger date of July 20, 2023 (calculated as 120 days following the March 22, 2023 suspension date). MeridianCode acknowledged VMS's Dormancy Status by written correspondence dated August 3, 2023, thereby commencing the twelve-month dormancy cap period under Section 9.4 of the MESLSA. Support obligations were reduced at that time to critical-security-patch-only level, consistent with the dormancy provisions of the MESLSA.
Under the current terms of the MESLSA, the twelve-month dormancy cap period will expire on August 3, 2024, at which time the Parties are required either to renegotiate the terms of the MESLSA or to proceed to termination.
The Parties have unresolved disputes concerning the following matters:
(a) VMS's obligation to pay the Year 2 Maintenance & Support Fee in the amount of Two Million Four Hundred Thousand Dollars ($2,400,000), which was invoiced by MeridianCode on July 1, 2023, and which VMS contends is not payable, or is payable only on a reduced basis, during Dormancy Status given the reduction in support services to the critical-security-patch-only level under Section 9.4;
(b) Ownership of certain derivative works created by VMS engineers during the integration of the Licensed Software into the Argonaut-A and Argonaut-C platforms, which VMS contends are solely owned by VMS and which MeridianCode contends are jointly owned under Section 7.2 of the MESLSA; and
(c) The effect of Dormancy Status on the milestone deadlines set forth in Section 4.3 of the MESLSA, including the Use-It-or-Lose-It deadline originally set for December 21, 2023.
This Term Sheet sets forth the principal proposed terms for a negotiated amendment to the MESLSA (the "Amendment" or "Amendment No. 1") intended to resolve these disputes, extend the dormancy period, restructure the fee arrangements between the Parties, and preserve VMS's optionality with respect to reactivation of the license.
3. Nonbinding Nature
This Term Sheet is nonbinding and is intended solely for discussion purposes between the Parties and their respective counsel. No Party shall have any obligation — whether legal, equitable, or otherwise — with respect to any of the transactions, arrangements, or proposals described herein unless and until a definitive Amendment No. 1 to the MESLSA has been duly executed and delivered by both Parties.
All discussions, drafts, proposals, counterproposals, and negotiations relating to this Term Sheet are conducted subject to and in reliance upon the protections afforded by Federal Rule of Evidence 408 and its state-law equivalents in all applicable jurisdictions. The contents of this Term Sheet and any communications relating hereto shall be inadmissible in any judicial or administrative proceeding, including without limitation any arbitration proceeding before the Midwest Arbitration Institute, for the purpose of proving the validity or invalidity of any claim or the amount of any damages.
Nothing contained in this Term Sheet shall constitute, or shall be deemed to constitute, a waiver of either Party's rights, remedies, claims, defenses, or positions under the MESLSA, at law, or in equity. Each Party expressly reserves all such rights and remedies in full.
4. Dormancy Extension
Current Dormancy Status. Dormancy under the MESLSA commenced on August 3, 2023, the date of MeridianCode's written acknowledgment of VMS's dormancy notice, pursuant to Section 9.4 of the MESLSA. During the current dormancy period, MeridianCode's maintenance and support obligations have been reduced to the critical-security-patch-only level, and all milestone deadlines under SOW No. 1 have been tolled.
Proposed Extension. VMS proposes that the twelve-month dormancy cap currently in effect under Section 9.4 of the MESLSA be extended by an additional twelve (12) months, from August 3, 2024 to August 3, 2025. This extension would result in a total dormancy period of twenty-four (24) months, running from August 3, 2023 through and including August 3, 2025.
Mandatory Renegotiation / Termination Trigger. The mandatory renegotiation or termination deadline currently set for August 3, 2024 shall be reset to August 3, 2025. If VMS has not reactivated the license or the Parties have not agreed to further terms governing the license relationship by August 3, 2025, either Party may terminate the MESLSA upon ninety (90) days' prior written notice to the other Party, subject to the termination provisions set forth in Section 9 herein.
Support During Extended Dormancy. During the extended dormancy period, MeridianCode shall continue to provide critical-security-patch-only support for the Licensed Software (ATLAS-RT Version 4.2.3) on the same terms and conditions as have been in effect since the commencement of Dormancy Status on August 3, 2023. For avoidance of doubt, MeridianCode shall not be obligated to provide general maintenance, feature enhancements, non-critical bug fixes, or dedicated engineering support during the extended dormancy period, except to the extent required to address critical security vulnerabilities in the Licensed Software.
Tolling. All milestone deadlines established under SOW No. 1 and Section 4.3 of the MESLSA — including, without limitation, the Section 4.3 Use-It-or-Lose-It deadline originally set for December 21, 2023 — shall remain tolled throughout the extended dormancy period and for a period of ninety (90) calendar days following the effective date of any reactivation of the license. The tolling period shall apply continuously from the commencement of Dormancy Status on August 3, 2023 through the date that is ninety (90) days after VMS delivers a valid reactivation notice, or through the termination of the MESLSA, whichever occurs first.
5. Scope Reduction
Current Scope. Under the MESLSA and SOW No. 1 as currently in effect, MeridianCode has licensed VMS to integrate the Licensed Software into up to five (5) designated vehicle platform configurations: Argonaut-A, Argonaut-B, Argonaut-C, Argonaut-D, and Argonaut-E.
Proposed Reduced Scope. VMS proposes that the license scope under the MESLSA and SOW No. 1 be permanently reduced from five (5) designated vehicle platform configurations to two (2) designated vehicle platform configurations, specifically:
(i) Argonaut-A; and
(ii) Argonaut-C.
Eliminated Platforms. The following vehicle platform configurations shall be permanently removed from the scope of the license and from all milestone schedules, deliverables, and obligations under SOW No. 1:
(i) Argonaut-B;
(ii) Argonaut-D; and
(iii) Argonaut-E.
Neither Party shall have any further obligation with respect to the integration of the Licensed Software into the eliminated platforms, and MeridianCode shall have no obligation to perform integration services or provide platform-specific customizations for Argonaut-B, Argonaut-D, or Argonaut-E.
Integration Status at Time of Suspension. For reference, the integration status of each platform as of the March 22, 2023 suspension date was as follows:
Effect on SOW No. 1. SOW No. 1 shall be amended to reflect the reduced scope described above. All milestones, deliverables, schedules, resource commitments, and fee obligations pertaining to Argonaut-B, Argonaut-D, and Argonaut-E shall be eliminated from SOW No. 1. The amended SOW No. 1 shall address only the remaining integration work required for Argonaut-A (Milestones 4 and 5) and Argonaut-C (Milestones 3, 4, and 5).
Section 4.3 Compliance. Upon reactivation of the license, VMS shall be required to commence integration testing on both Argonaut-A and Argonaut-C within twelve (12) months of the effective date of reactivation (revised from the original eighteen-month deadline, which was tied to the Effective Date of the MESLSA). VMS asserts, and shall maintain the position in any definitive Amendment, that Argonaut-A has already satisfied the "commence integration testing" requirement based on VMS's completion of Milestone 3 (alpha integration testing) for that platform on February 28, 2023. Accordingly, upon reactivation, VMS would need to achieve commencement of integration testing on Argonaut-C within the twelve-month period.
6. Fee Restructuring
6.1 Summary of Fees Paid to Date
As of the date of this Term Sheet, VMS has made the following payments to MeridianCode under the MESLSA:
No runtime royalties have been incurred or paid to date, as no units incorporating the Licensed Software have been shipped by VMS.
6.2 Year 2 Maintenance & Support Fee — Credit Proposal
MeridianCode invoiced VMS for the Year 2 Maintenance & Support Fee in the amount of Two Million Four Hundred Thousand Dollars ($2,400,000) on July 1, 2023. VMS disputes its obligation to pay the full Year 2 Maintenance & Support Fee during Dormancy Status, on the grounds that MeridianCode's support obligations have been reduced to the critical-security-patch-only level under Section 9.4 of the MESLSA, and that the Year 2 Maintenance & Support Fee was calculated based on the assumption of full maintenance and support services across all five Original Platforms.
Proposed Resolution. The Parties propose to resolve this dispute as follows:
(a) The Year 2 Maintenance & Support Fee of $2,400,000 shall be credited in full against future integration services fees payable by VMS upon reactivation of the license (the "Year 2 Credit").
(b) No cash payment of the Year 2 Maintenance & Support Fee shall be required of VMS during the dormancy period.
(c) If VMS elects to terminate the MESLSA without reactivation of the license, the Year 2 Maintenance & Support Fee shall be deemed waived in its entirety, and neither Party shall have any further obligation with respect thereto. MeridianCode shall withdraw the July 1, 2023 invoice, and no receivable shall be reflected on MeridianCode's books with respect to such fee following termination.
6.3 Integration Services Fee Adjustment
Under the original terms of SOW No. 1, the total integration services fee was Three Million Two Hundred Thousand Dollars ($3,200,000), allocated across five (5) milestones at Six Hundred Forty Thousand Dollars ($640,000) per milestone. Of this amount, One Million Nine Hundred Twenty Thousand Dollars ($1,920,000) has been paid by VMS with respect to Milestones 1, 2, and 3. The remaining unpaid balance for Milestones 4 and 5 is One Million Two Hundred Eighty Thousand Dollars ($1,280,000).
Proposed Adjustment. Upon reactivation of the license, the remaining integration services milestones shall be restructured to reflect the two-platform scope (Argonaut-A and Argonaut-C only). A revised milestone schedule, including updated deliverables, timelines, acceptance criteria, and corresponding fees, shall be set forth in an amended SOW No. 1 to be negotiated and executed as part of the definitive Amendment No. 1.
The Year 2 Credit of $2,400,000 described in Section 6.2 above shall be applied first against any remaining integration services fees payable under the amended SOW No. 1. To the extent the Year 2 Credit exceeds the remaining integration services fees, the balance shall be carried forward as a credit against future maintenance fees, including Year 3 and subsequent annual maintenance and support fees, and/or against runtime royalty obligations under the MESLSA.
6.4 Per-Unit Runtime Royalty Cap Reduction
Under the current terms of the MESLSA, VMS is obligated to pay a per-unit runtime royalty of Eighty Dollars ($80.00) per unit for each unit incorporating the Licensed Software that is shipped to end customers. The original aggregate runtime royalty cap was Four Million Dollars ($4,000,000), accommodating up to fifty thousand (50,000) units over the five-year Term.
As of the date of this Term Sheet, no runtime royalties have been incurred, as no units incorporating the Licensed Software have been shipped by VMS.
Proposed Adjustment. The aggregate runtime royalty cap shall be reduced from $4,000,000 to Two Million Dollars ($2,000,000), reflecting the reduction in licensed platforms from five to two. The per-unit royalty rate shall remain at $80.00 per unit, and the reduced cap shall accommodate up to twenty-five thousand (25,000) units.
The five-year calculation period for runtime royalties shall commence upon the effective date of reactivation of the license (rather than from the original Effective Date of June 21, 2022); provided, however, that the MESLSA expiration date of June 20, 2027 shall remain unchanged unless separately extended by mutual written agreement of the Parties. In the event the period from reactivation to the MESLSA expiration date is less than five years, the Parties shall negotiate in good faith regarding an appropriate extension or adjustment to the royalty calculation period as part of the definitive Amendment No. 1.
6.5 Revised Total Deal Value
The original total deal value of the MESLSA was Twenty Million Dollars ($20,000,000). The proposed fee restructuring and scope reduction would result in the following revised financial framework:
Under this proposed restructuring, VMS's remaining contractual cash exposure would be reduced by approximately Seven Million Six Hundred Eighty Thousand Dollars ($7,680,000) from VMS's maximum remaining obligations under the original MESLSA. The precise reduction will depend upon the revised integration services fees to be established in the amended SOW No. 1 and the negotiation of subsequent maintenance fee terms.
6.6 Upfront License Fee — No Forfeiture
VMS's Upfront License Fee of Eight Million Dollars ($8,000,000), paid on June 21, 2022, shall not be subject to forfeiture under any circumstances, including but not limited to:
(a) termination of the MESLSA during the extended dormancy period;
(b) termination of the MESLSA following the extended dormancy period;
(c) reactivation and subsequent termination of the license; or
(d) expiration of the MESLSA at the end of its Term.
Section 9.1 of the MESLSA, to the extent it contains a fee-forfeiture provision applicable to termination for convenience, shall be deemed inapplicable to any termination occurring after June 21, 2024 (the twenty-four-month anniversary of the MESLSA Effective Date).
If VMS elects to terminate the MESLSA during the extended dormancy period but after June 21, 2024, VMS shall retain a perpetual, non-exclusive, non-transferable license to the Licensed Software (ATLAS-RT Version 4.2.3) solely for internal evaluation, testing, and development use. This retained license shall expressly exclude any right to production deployment, commercialization, or distribution of the Licensed Software in any vehicle or product shipped to end customers. The retained license shall remain subject to the confidentiality and intellectual property obligations set forth in the MESLSA, which shall survive termination.
7. Derivative Works Ownership Carve-Out
Derivative Works at Issue. During the integration of the Licensed Software into the Argonaut-A and Argonaut-C platforms, VMS engineers developed three software modules designated as follows:
(i) DW-001 — an interface abstraction layer facilitating communication between ATLAS-RT and VMS's proprietary vehicle control unit firmware;
(ii) DW-002 — a diagnostic telemetry module enabling real-time performance monitoring of the ATLAS-RT kernel in the Argonaut-A environment; and
(iii) DW-003 — a sensor fusion middleware component integrating ATLAS-RT with VMS's proprietary LiDAR and radar data processing pipeline for the Argonaut-C platform.
These three modules (collectively, the "VMS Derivative Works") comprise approximately forty-seven thousand (47,000) lines of code and were developed primarily by a team of VMS software engineers led by Lena Petrova, VMS's Director of Software Integration Engineering.
Estimated Commercial Value. An independent assessment of the VMS Derivative Works conducted by Hargrove Technical Consulting, LLC, under the direction of Dr. Samuel Beecroft, Ph.D., has estimated the aggregate commercial value of DW-001, DW-002, and DW-003 at between One Million Eight Hundred Thousand Dollars ($1,800,000) and Two Million Five Hundred Thousand Dollars ($2,500,000), based on replacement cost, market comparables, and potential licensing revenue analyses.
Current Contractual Framework. Section 7.2 of the MESLSA provides that derivative works created in connection with the integration of the Licensed Software shall be jointly owned by VMS and MeridianCode, with MeridianCode retaining a perpetual, royalty-free license to use, modify, distribute, and sublicense such derivative works without restriction.
VMS Position. VMS takes the position that DW-001, DW-002, and DW-003 are VMS-originated works, developed independently by VMS engineers using VMS resources, facilities, and proprietary know-how, and that Section 7.2's joint ownership framework should not apply to these modules. VMS further contends that these modules constitute original works of authorship by VMS engineers and should be solely owned by VMS.
Proposed Carve-Out. The Parties propose to address the derivative works dispute as follows:
(a) VMS Sole Ownership. VMS shall retain sole and exclusive ownership of DW-001, DW-002, and DW-003, including all intellectual property rights therein (copyrights, trade secrets, and any patent rights, if applicable). MeridianCode shall execute any assignments or other documents reasonably necessary to confirm VMS's sole ownership.
(b) Limited License to MeridianCode. MeridianCode shall receive a limited, non-exclusive, royalty-free, non-transferable license to use DW-001, DW-002, and DW-003 solely for non-automotive applications. This limited license shall expressly exclude any use of the VMS Derivative Works in automotive, mobility, transportation, or vehicle-related applications of any kind, whether for MeridianCode's own products or for the benefit of any third-party licensee or customer of MeridianCode.
(c) Supersession of Section 7.2. The perpetual, royalty-free license-back provision set forth in Section 7.2 of the MESLSA shall be superseded in its entirety as applied to DW-001, DW-002, and DW-003, and shall be replaced by the limited license described in paragraph (b) above.
(d) Future Derivative Works. Section 7.2 of the MESLSA shall continue to apply to any derivative works created during any reactivated integration work under the MESLSA, subject to the negotiation of revised derivative works terms to be included in Amendment No. 1. VMS reserves the right to propose modifications to the joint ownership framework of Section 7.2 for future derivative works as part of the Amendment No. 1 negotiations.
(e) Documentation. The derivative works carve-out shall be documented in a separate Side Letter (the "Derivative Works Side Letter") to be executed concurrently with Amendment No. 1. The Derivative Works Side Letter shall include appropriate representations, warranties, and indemnification provisions relating to the VMS Derivative Works.
8. Reactivation Mechanics
Reactivation Notice. VMS may reactivate the license at any time during the extended dormancy period by delivering sixty (60) days' prior written notice to MeridianCode (the "Reactivation Notice"). The Reactivation Notice shall specify VMS's proposed reactivation date and shall be accompanied by a preliminary summary of VMS's updated integration timeline for the Argonaut-A and Argonaut-C platforms.
Upon Reactivation. Upon delivery of a valid Reactivation Notice and the commencement of the reactivation period, the following shall occur:
(a) Restoration of Full Support. MeridianCode shall restore full maintenance and support services (beyond the critical-security-patch-only level) within thirty (30) calendar days of receipt of the Reactivation Notice. Full maintenance and support shall include all services and service levels described in Exhibit B to the MESLSA, as may be modified by Amendment No. 1.
(b) Recommencement of Milestone Deadlines. Milestone deadlines under SOW No. 1 (as amended) shall recommence ninety (90) calendar days after the effective date of reactivation. Milestones shall recommence based on the integration status of each platform as of the March 22, 2023 suspension date — specifically, Argonaut-A at Milestone 3 (with Milestones 4 and 5 remaining) and Argonaut-C at Milestone 2 (with Milestones 3, 4, and 5 remaining).
(c) Updated Integration Plan. VMS shall provide MeridianCode with an updated integration plan for the two-platform scope within sixty (60) calendar days of the effective date of reactivation. The updated integration plan shall address resource allocation, testing environments, anticipated milestone completion dates, and any known technical dependencies or risks.
(d) Application of Year 2 Credit. The Year 2 Credit of $2,400,000 described in Section 6.2 shall be applied against integration services fees and other obligations as described therein upon reactivation.
No Reactivation Fee. VMS shall not be required to pay any reactivation fee, restart fee, mobilization fee, or any similar charge in connection with the reactivation of the license. MeridianCode's obligation to restore full support and resume integration services shall not be conditioned upon the payment of any additional fee beyond those contemplated by the MESLSA (as amended by Amendment No. 1) and the amended SOW No. 1.
Software Version. Upon reactivation, MeridianCode shall provide VMS with the then-current minor-release version of ATLAS-RT (at minimum, Version 4.2.3) at no additional license fee. If MeridianCode has released a minor-version update (e.g., Version 4.2.4 or Version 4.2.5) during the dormancy period, VMS shall be entitled to receive such update as part of the reactivation without incremental licensing charges. Major-version upgrades (e.g., Version 5.0), if any, shall be subject to separate negotiation.
9. Termination Rights During Extended Dormancy
Each Party's right to terminate the MESLSA for convenience under Section 9.1 shall be preserved, subject to the following modifications applicable during the extended dormancy period:
(a) No Forfeiture After 24-Month Anniversary. If VMS terminates the MESLSA for convenience after June 21, 2024 (the twenty-four-month anniversary of the Effective Date), VMS shall not forfeit any prepaid fees, including the Upfront License Fee of $8,000,000, and shall retain the perpetual internal-use license described in Section 6.6 above.
(b) Retention of Derivative Works Rights. If VMS terminates the MESLSA during the extended dormancy period (whether before or after June 21, 2024), VMS shall retain all rights to the VMS Derivative Works (DW-001, DW-002, and DW-003) as described in Section 7 above, and MeridianCode's limited license to such derivative works shall survive termination.
(c) MeridianCode Termination Right at Extended Dormancy Cap. MeridianCode may terminate the MESLSA if VMS has not reactivated the license by August 3, 2025 (the expiration of the extended dormancy cap), subject to (i) ninety (90) days' prior written notice to VMS, and (ii) a mandatory good-faith renegotiation period of not less than sixty (60) days, during which the Parties shall engage in meaningful discussions regarding the potential for further extension, reactivation, or other mutually acceptable arrangements. MeridianCode's termination right shall not be exercisable until the conclusion of such renegotiation period without agreement.
Termination for cause provisions under the MESLSA, including termination for material breach (Section 9.2) and termination upon insolvency or bankruptcy (Section 9.3), shall remain in full force and effect without modification.
10. Section 4.3 — Use-It-or-Lose-It Deadline
Under Section 4.3 of the MESLSA, VMS was required to commence integration testing on at least two (2) of the licensed vehicle platforms within eighteen (18) months of the Effective Date — i.e., by December 21, 2023 (the "Use-It-or-Lose-It Deadline"). Failure to meet this deadline would, under the original terms of Section 4.3, result in a scope reduction and potential fee forfeiture consequences.
VMS's Position. VMS asserts that: (a) Dormancy Status tolls the Section 4.3 deadline pursuant to the tolling provisions of Section 9.4 of the MESLSA, and accordingly the December 21, 2023 deadline is currently inoperative; and (b) VMS's completion of Milestone 3 (alpha integration testing) for the Argonaut-A platform on February 28, 2023 already constitutes "commencement of integration testing" on one platform within the meaning of Section 4.3, thereby partially satisfying the requirement prior to the onset of dormancy.
Proposed Amendment. The Section 4.3 Use-It-or-Lose-It Deadline shall be amended as follows:
(a) The original December 21, 2023 deadline shall be deemed tolled and of no further force or effect.
(b) A new deadline shall be established requiring VMS to achieve commencement of integration testing on both Argonaut-A and Argonaut-C within twelve (12) months following the effective date of any reactivation of the license.
(c) VMS's prior completion of Milestone 3 for the Argonaut-A platform (alpha integration testing passed on February 28, 2023) shall be deemed to constitute satisfaction of the "commencement of integration testing" requirement for Argonaut-A. Accordingly, upon reactivation, VMS shall be required to achieve commencement of integration testing on Argonaut-C within the twelve-month period referenced in paragraph (b) above.
11. Change of Control
Section 12.6 of the MESLSA, which requires the licensor's prior written consent for any assignment of the MESLSA in connection with a change of control of VMS (such consent not to be unreasonably withheld, conditioned, or delayed), shall remain in full force and effect without modification.
For the avoidance of doubt, the Parties acknowledge the current ownership structure of VMS, in which Kestrel Capital Partners, LP serves as the private equity sponsor, with Cobalt Ridge Partners GP, LLC acting as general partner. No change of control of VMS is currently contemplated, planned, or under discussion. In the event that any change of control transaction involving VMS is contemplated in the future, VMS shall comply with its obligations under Section 12.6 of the MESLSA and shall provide MeridianCode with timely notice and an opportunity to consent as required thereunder.
12. Credit Facility Considerations
VMS acknowledges that the MESLSA and any amendment thereto constitute a "material contract" as defined in Section 6.12 of that certain Senior Secured Revolving Credit Facility Agreement dated September 12, 2019 (as amended from time to time, the "Credit Facility"), among VMS, as borrower, and Pinnacle National Bank, N.A., as administrative agent and lead lender. Section 6.12 of the Credit Facility requires VMS to notify the administrative agent of any material modifications to contracts involving aggregate commitments or liabilities in excess of Five Million Dollars ($5,000,000).
VMS previously notified Pinnacle National Bank, N.A. of VMS's entry into Dormancy Status under the MESLSA by written notice dated August 10, 2023, in accordance with its covenant obligations under the Credit Facility. VMS covenants to notify Pinnacle National Bank, N.A. of the execution of any definitive Amendment No. 1 to the MESLSA, and to provide such additional information regarding the Amendment as may be reasonably requested by the administrative agent, in each case in accordance with the notification and reporting obligations set forth in the Credit Facility.
For informational purposes, VMS represents that outstanding borrowings under the Pinnacle facility as of July 2023 were approximately Ninety-Two Million Dollars ($92,000,000), and that VMS is currently in compliance with all financial and reporting covenants thereunder.
13. Governing Law and Dispute Resolution
Amendment No. 1 to the MESLSA, together with this Term Sheet, shall be governed by and construed in accordance with the laws of the State of Michigan, without giving effect to any choice-of-law or conflict-of-law provisions that would cause the application of the laws of any other jurisdiction. This governing law provision is consistent with Section 13.1 of the MESLSA.
Any dispute, controversy, or claim arising out of or relating to Amendment No. 1, this Term Sheet, or the MESLSA (including any question regarding its existence, validity, or termination) shall be resolved by binding arbitration administered under the rules and procedures of the Midwest Arbitration Institute, seated in Detroit, Michigan. For disputes involving amounts in controversy exceeding One Million Dollars ($1,000,000), the arbitration shall be heard by a panel of three (3) arbitrators. For disputes involving amounts in controversy of One Million Dollars ($1,000,000) or less, a single arbitrator shall preside. The arbitration provisions set forth in Section 13.2 of the MESLSA, including provisions regarding discovery, confidentiality of proceedings, allocation of arbitration costs, and enforceability of awards, shall apply to any disputes arising under or relating to Amendment No. 1.
14. Confidentiality
The terms and conditions of this Term Sheet, all negotiations and communications relating hereto, and the terms and conditions of any definitive Amendment No. 1 shall be subject to the confidentiality provisions set forth in Section 11 of the MESLSA, which provisions are incorporated herein by reference.
Neither Party shall disclose the existence or terms of this Term Sheet, or of any definitive Amendment No. 1, to any third party without the prior written consent of the other Party, except as may be required by applicable law, regulation, court order, or legal process, or as reasonably necessary for disclosures to the following:
(a) VMS's private equity sponsor, Kestrel Capital Partners, LP, and its general partner, Cobalt Ridge Partners GP, LLC, and their respective officers, directors, employees, and advisors with a need to know;
(b) VMS's lenders, including Pinnacle National Bank, N.A., as administrative agent under the Credit Facility, and any other lender party thereto, in connection with VMS's covenant compliance obligations;
(c) VMS's independent auditors, Ashford & Greer, P.C., in connection with audit and financial reporting obligations;
(d) VMS's technology errors and omissions insurer, Commonwealth Surety & Insurance Co. (Policy No. TEO-2022-7891), in connection with any coverage inquiries or notifications; and
(e) Each Party's legal counsel, financial advisors, and other professional advisors engaged in connection with the transactions contemplated by this Term Sheet, provided that such advisors are bound by obligations of confidentiality no less restrictive than those set forth in the MESLSA.
MeridianCode acknowledges its obligations as a Nasdaq-listed company (ticker: MCDT) under applicable federal securities laws and Nasdaq listing rules regarding the timely disclosure of material information. To the extent MeridianCode determines that disclosure of the existence or terms of Amendment No. 1 may be required under applicable securities laws or regulations, MeridianCode shall coordinate with VMS in advance of any such disclosure, provide VMS with a reasonable opportunity to review and comment on the proposed disclosure, and use commercially reasonable efforts to minimize the scope of any public disclosure to the extent consistent with MeridianCode's legal obligations.
15. Timeline and Next Steps
VMS respectfully requests that MeridianCode, through its counsel at Redstone Whitaker LLP, provide a written response to this Term Sheet within thirty (30) calendar days of the date of circulation. The response should address each of the principal terms set forth herein and identify any terms to which MeridianCode objects, proposes modifications, or requires additional information.
If the principal terms set forth in this Term Sheet are agreed upon in substance, Calderwood & Harkness LLP, on behalf of VMS, shall prepare and circulate a draft of Amendment No. 1 to the MESLSA and a draft of the Derivative Works Side Letter within fifteen (15) business days following the date on which the Parties reach agreement on this Term Sheet.
The Parties' target is to execute all definitive documents — including Amendment No. 1 and the Derivative Works Side Letter — prior to August 3, 2024, the expiration date of the current twelve-month dormancy cap under Section 9.4 of the MESLSA.
All responses, counterproposals, and negotiations shall be conducted between Bernard Crawford, Partner, Calderwood & Harkness LLP (counsel for VMS) and Alan M. Briscoe, Partner, Redstone Whitaker LLP (counsel for MeridianCode), unless the Parties mutually agree to designate additional or alternative representatives.
16. Key Dates Summary
The following table sets forth a summary of the key dates relevant to the matters addressed in this Term Sheet:
17. Fee Exposure Summary
The following table summarizes VMS's fee exposure under the MESLSA as currently in effect and as proposed to be restructured under this Term Sheet:
ACKNOWLEDGMENT OF RECEIPT AND AGREEMENT TO NEGOTIATE IN GOOD FAITH
The undersigned hereby acknowledge receipt of this Term Sheet and agree to negotiate in good faith toward the execution of a definitive Amendment No. 1 to the MESLSA and a Derivative Works Side Letter on the terms and subject to the conditions described herein. This acknowledgment does not create any binding obligations on either Party. Definitive terms shall be set forth solely in executed Amendment No. 1 to the MESLSA and any related Side Letter, and neither Party shall be bound unless and until such definitive documents are duly executed and delivered.
COUNSEL FOR VANTAGE MOBILITY SYSTEMS CORP.
By: ________
Name: Bernard Crawford
Title: Partner, Calderwood & Harkness LLP
Date: ________
600 Renaissance Center, Suite 3200 Detroit, MI 48243
COUNSEL FOR MERIDIAN CODE TECHNOLOGIES, INC.
By: ________
Name: Alan M. Briscoe
Title: Partner, Redstone Whitaker LLP
Date: ________
555 Mission Street, Suite 2800 San Francisco, CA 94105
This Term Sheet does not create any binding obligations. Definitive terms shall be set forth solely in executed Amendment No. 1 to the MESLSA and any related Side Letter. All discussions, drafts, and negotiations relating to this Term Sheet are subject to Federal Rule of Evidence 408 and its state-law equivalents and are inadmissible in any proceeding, including any arbitration before the Midwest Arbitration Institute.
CONFIDENTIAL — SUBJECT TO RULE 408 / FOR SETTLEMENT DISCUSSION PURPOSES ONLY PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT Calderwood & Harkness LLP — C&H Matter No. 1007-00008
Platform | Status | Last Milestone Completed | Date
Argonaut-A | Milestone 3 of 5 completed | Alpha integration testing passed | February 28, 2023
Argonaut-C | Milestone 2 of 5 completed | Source-code customization delivered | January 15, 2023
Argonaut-B | Milestone 1 only | Requirements specification approved | No code integration begun
Argonaut-D | Not commenced | N/A | N/A
Argonaut-E | Not commenced | N/A | N/A
Fee Component | Amount | Date Paid
Upfront License Fee | $8,000,000 | June 21, 2022
Year 1 Maintenance & Support Fee | $2,400,000 | July 15, 2022
Integration Services Fees (Milestones 1–3) | $1,920,000 | Various (upon milestone completion)
Total Fees Paid to Date | $12,320,000
Component | Original Amount | Proposed Revised Amount | Status
Upfront License Fee | $8,000,000 | $8,000,000 (unchanged) | Paid
Year 1 Maintenance & Support | $2,400,000 | $2,400,000 (unchanged) | Paid
Year 2 Maintenance & Support | $2,400,000 | $2,400,000 (credited, not a new cash obligation) | Credited
Integration Services (total) | $3,200,000 | TBD per amended SOW (with $2,400,000 credit applied) | Partially paid ($1,920,000)
Runtime Royalty Cap | $4,000,000 | $2,000,000 | Not yet incurred
Subsequent Annual Maintenance | Subject to MESLSA terms | Subject to further negotiation upon reactivation | Not yet incurred
Date | Event / Deadline
June 21, 2022 | MESLSA Effective Date; Upfront License Fee of $8,000,000 paid
July 15, 2022 | Year 1 Maintenance & Support Fee of $2,400,000 paid
January 15, 2023 | Argonaut-C Milestone 2 completed (source-code customization delivered)
February 28, 2023 | Argonaut-A Milestone 3 completed (alpha integration testing passed)
March 14, 2023 | VMS Board resolves to rescope Project Argonaut
March 22, 2023 | Integration work suspended
July 1, 2023 | MeridianCode invoices Year 2 Maintenance & Support Fee ($2,400,000)
July 14, 2023 | VMS delivers dormancy notice pursuant to Section 9.4
August 3, 2023 | MeridianCode acknowledges Dormancy Status; 12-month dormancy cap commences
August 10, 2023 | VMS notifies Pinnacle National Bank, N.A. of dormancy status
October 16, 2023 | This Term Sheet circulated
December 21, 2023 | Original Section 4.3 Use-It-or-Lose-It Deadline (proposed to be tolled/reset)
June 21, 2024 | 24-month anniversary of MESLSA — fee forfeiture risk eliminated per Section 6.6
August 3, 2024 | Current 12-month dormancy cap expiration — target execution of Amendment No. 1 before this date
August 3, 2025 | Proposed extended dormancy cap (24 months from dormancy acknowledgment)
June 20, 2027 | MESLSA expiration (end of 5-year Term)
Fee Component | Paid to Date | Disputed / Credited | Proposed Remaining Obligation
Upfront License Fee | $8,000,000 | — | $0 (no forfeiture under any scenario)
Year 1 Maintenance & Support | $2,400,000 | — | $0
Year 2 Maintenance & Support | $0 | $2,400,000 (credited against future fees) | $0 cash payment required
Integration Services (M1–M3) | $1,920,000 | — | $0
Integration Services (M4–M5) | $0 | Subject to amended SOW No. 1 | TBD (offset by Year 2 Credit)
Runtime Royalties | $0 | Aggregate cap reduced from $4,000,000 to $2,000,000 | $2,000,000 maximum
Total Paid to Date | $12,320,000

CONFIDENTIAL — SUBJECT TO RULE 408 / FOR SETTLEMENT DISCUSSION PURPOSES ONLY PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT

TERM SHEET

ACKNOWLEDGMENT OF RECEIPT AND AGREEMENT TO NEGOTIATE IN GOOD FAITH

COUNSEL FOR VANTAGE MOBILITY SYSTEMS CORP.

COUNSEL FOR MERIDIAN CODE TECHNOLOGIES, INC.

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