[sheet: Cover & Summary]

[sheet: Cover & Summary]
Field | Value
Document Title | Funds Flow Memorandum — Escrow & Payment Mechanics
Prepared By | Calderwood & Harkness LLP
Matter Number | 1008-00010
Date Prepared | March 22, 2024
Responsible Partner | Howard Bellamy, Partner, Antitrust & Competition
Billing Partner | Douglas Fairchild, Partner, Real Estate
Lead Associate | Leila Nazari, Associate, Tax
Working Associate | Robert Jansen, Associate, Tax
Client | Lumos Analytics Inc.
Counterparty | Meridian Data Solutions GmbH
Agreement | Channel Reseller Program Agreement (Execution Version, dated March 22, 2024)
Licensed Product | Lumos Prism™
Total Contract Value (TCV) | $30,000,000
Initial Term | 5 years (April 1, 2024 – March 31, 2029)
Payment Terms | Net 45 days from invoice date
Late Payment Interest | 1.5% per month (18% per annum), simple interest
Escrow Holdback Rate | 5% of each quarterly payment
Escrow Agent | Evergreen Trust Company, N.A.
Governing Law | State of California
Currency | All amounts in USD; Meridian bears FX risk
Effective Date | April 1, 2024
Signing / Closing Date | March 22, 2024
Status | Closed / Completed (April 2, 2024)
Purpose of Memorandum | To detail the quarterly payment flow mechanics from Meridian to Lumos, including the 5% indemnification escrow holdback directed to Evergreen Trust Company, N.A., wire transfer instructions, and account information for all receiving parties.
[sheet: Party & Account Details]
Role | Entity Full Legal Name | Short Name | Contact Person | Contact Title | Bank / Institution Name | Bank Address | Entity Address | Notes
Payor | Meridian Data Solutions GmbH | Meridian / MDS | Thomas Weidner | Relationship Manager | Zarvenische Handelsbank AG | Promenadeplatz 12, 80333 München, Germany | Leopoldstraße 78, 80802 München, Germany | Meridian's primary operating bank; source of all quarterly MAC payments; Commercial Register: Amtsgericht München, HRB 274581; Steuernummer: 143/117/60253; VAT ID: DE319274105
Payee — Net Payment | Lumos Analytics Inc. | Lumos | David Okonkwo | Relationship Manager | Pinnacle National Bank, N.A. | 555 California Street, San Francisco, CA 94104 | 4700 Sandhill Road, Suite 300, Palo Alto, CA 94304 | Lumos's primary operating bank; receives 95% of each quarterly MAC payment; EIN: 84-3291056; Delaware C-Corporation; Registered Agent: Pacific Registered Agents LLC, 1209 Orange Street, Wilmington, DE 19801
Payee — Escrow Holdback | Evergreen Trust Company, N.A. | Evergreen Trust | Maria Gutierrez | Escrow Officer | Evergreen Trust Company, N.A. | 400 South Hope Street, Suite 1100, Los Angeles, CA 90071 | 400 South Hope Street, Suite 1100, Los Angeles, CA 90071 | Escrow agent per Escrow Agreement dated March 22, 2024; receives 5% holdback of each quarterly MAC payment for indemnification claims
[sheet: MAC Schedule & Annual Summary]
Contract Year | Period Start | Period End | Annual MAC | YoY Growth % | Quarterly MAC | 5% Escrow Holdback per Quarter | Net Payment to Lumos per Quarter | Annual Escrow Holdback Total | Annual Net to Lumos
Year 1 (Ramp) | April 1, 2024 | March 31, 2025 | $4,500,000 | — | $1,125,000 | $56,250 | $1,068,750 | $225,000 | $4,275,000
Year 2 | April 1, 2025 | March 31, 2026 | $5,400,000 | 20.00% | $1,350,000 | $67,500 | $1,282,500 | $270,000 | $5,130,000
Year 3 | April 1, 2026 | March 31, 2027 | $6,300,000 | 16.67% | $1,575,000 | $78,750 | $1,496,250 | $315,000 | $5,985,000
Year 4 | April 1, 2027 | March 31, 2028 | $6,900,000 | 9.52% | $1,725,000 | $86,250 | $1,638,750 | $345,000 | $6,555,000
Year 5 | April 1, 2028 | March 31, 2029 | $6,900,000 | 0.00% | $1,725,000 | $86,250 | $1,638,750 | $345,000 | $6,555,000
TOTAL (5-Year) | April 1, 2024 | March 31, 2029 | $30,000,000 | — | — | — | — | $1,500,000 | $28,500,000
[sheet: Year 1 Quarterly Detail]
Quarter | Quarter Period | Invoice Date | Payment Due Date | Gross Quarterly MAC | 5% Escrow Holdback | Net Payment to Lumos | Payee — Net Amount | Payee — Holdback Amount | Wire Reference | Notes
Q1 (Year 1) | April 1 – June 30, 2024 | May 1, 2024 | June 15, 2024 | $1,125,000 | $56,250 | $1,068,750 | Pinnacle National Bank, N.A. (David Okonkwo) — Lumos Analytics Inc. | Evergreen Trust Company, N.A. (Maria Gutierrez) — Escrow Account | LUMOS-MDS-Y1Q1-2024 | First quarterly MAC payment due per Exhibit F; Net 45 days from invoice date
Q2 (Year 1) | July 1 – September 30, 2024 | August 1, 2024 | September 15, 2024 | $1,125,000 | $56,250 | $1,068,750 | Pinnacle National Bank, N.A. (David Okonkwo) — Lumos Analytics Inc. | Evergreen Trust Company, N.A. (Maria Gutierrez) — Escrow Account | LUMOS-MDS-Y1Q2-2024
Q3 (Year 1) | October 1 – December 31, 2024 | November 1, 2024 | December 16, 2024 | $1,125,000 | $56,250 | $1,068,750 | Pinnacle National Bank, N.A. (David Okonkwo) — Lumos Analytics Inc. | Evergreen Trust Company, N.A. (Maria Gutierrez) — Escrow Account | LUMOS-MDS-Y1Q3-2024
Q4 (Year 1) | January 1 – March 31, 2025 | February 1, 2025 | March 18, 2025 | $1,125,000 | $56,250 | $1,068,750 | Pinnacle National Bank, N.A. (David Okonkwo) — Lumos Analytics Inc. | Evergreen Trust Company, N.A. (Maria Gutierrez) — Escrow Account | LUMOS-MDS-Y1Q4-2025
Year 1 Total | — | — | — | $4,500,000 | $225,000 | $4,275,000 | — | — | — | Reconciles to Year 1 MAC of $4,500,000
[sheet: Funds Flow Diagram Data]
Step | From Entity | From Bank | To Entity | To Bank | Amount Description | Amount Formula | Wire Instructions Reference | Notes
1 | Meridian Data Solutions GmbH | Zarvenische Handelsbank AG (Thomas Weidner), Promenadeplatz 12, 80333 München, Germany | Lumos Analytics Inc. | Pinnacle National Bank, N.A. (David Okonkwo), 555 California Street, San Francisco, CA 94104 | 95% of Quarterly MAC (Net Payment) | Quarterly MAC × 0.95 | See Wire Instructions tab — Pinnacle account | Net amount after deduction of 5% escrow holdback; Meridian bears FX risk on EUR-to-USD conversion
2 | Meridian Data Solutions GmbH | Zarvenische Handelsbank AG (Thomas Weidner), Promenadeplatz 12, 80333 München, Germany | Evergreen Trust Company, N.A. (Indemnification Escrow Account) | Evergreen Trust Company, N.A. (Maria Gutierrez), 400 South Hope Street, Suite 1100, Los Angeles, CA 90071 | 5% of Quarterly MAC (Escrow Holdback) | Quarterly MAC × 0.05 | See Wire Instructions tab — Evergreen Trust escrow account | Held for indemnification claims per Escrow Agreement dated March 22, 2024; released 12 months after expiration or termination, net of pending claims
3 (Escrow Release) | Evergreen Trust Company, N.A. (Escrow Account) | Evergreen Trust Company, N.A., 400 South Hope Street, Suite 1100, Los Angeles, CA 90071 | Meridian Data Solutions GmbH (or Lumos Analytics Inc., as applicable) | Zarvenische Handelsbank AG or Pinnacle National Bank, N.A. | Unreleased escrow funds | Escrow balance less pending indemnification claims | Per Escrow Agreement | Release occurs 12 months after agreement expiration (March 31, 2029) or earlier termination; net of any pending indemnification claims
[sheet: Escrow Holdback Summary]
Contract Year | Quarter | Quarterly MAC Payment | 5% Holdback Deposit | Cumulative Escrow Balance | Release Event | Notes
Year 1 | Q1 | $1,125,000 | $56,250 | $56,250 | — | First deposit; first quarterly MAC payment due June 15, 2024
Year 1 | Q2 | $1,125,000 | $56,250 | $112,500 | —
Year 1 | Q3 | $1,125,000 | $56,250 | $168,750 | —
Year 1 | Q4 | $1,125,000 | $56,250 | $225,000 | — | Year 1 cumulative holdback: $225,000
Year 2 | Q1 | $1,350,000 | $67,500 | $292,500 | —
Year 2 | Q2 | $1,350,000 | $67,500 | $360,000 | —
Year 2 | Q3 | $1,350,000 | $67,500 | $427,500 | —
Year 2 | Q4 | $1,350,000 | $67,500 | $495,000 | — | Year 2 cumulative holdback: $495,000
Year 3 | Q1 | $1,575,000 | $78,750 | $573,750 | —
Year 3 | Q2 | $1,575,000 | $78,750 | $652,500 | —
Year 3 | Q3 | $1,575,000 | $78,750 | $731,250 | —
Year 3 | Q4 | $1,575,000 | $78,750 | $810,000 | — | Year 3 cumulative holdback: $810,000
Year 4 | Q1 | $1,725,000 | $86,250 | $896,250 | —
Year 4 | Q2 | $1,725,000 | $86,250 | $982,500 | —
Year 4 | Q3 | $1,725,000 | $86,250 | $1,068,750 | —
Year 4 | Q4 | $1,725,000 | $86,250 | $1,155,000 | — | Year 4 cumulative holdback: $1,155,000
Year 5 | Q1 | $1,725,000 | $86,250 | $1,241,250 | —
Year 5 | Q2 | $1,725,000 | $86,250 | $1,327,500 | —
Year 5 | Q3 | $1,725,000 | $86,250 | $1,413,750 | —
Year 5 | Q4 | $1,725,000 | $86,250 | $1,500,000 | — | Year 5 cumulative holdback: $1,500,000; maximum escrow balance if no claims
— | — | — | — | $1,500,000 | Release: 12 months after expiration or termination (i.e., March 31, 2030 if term expires March 31, 2029) | Unreleased escrow funds released net of pending indemnification claims per Escrow Agreement; indemnification cap: $15,000,000 (50% of TCV), with exceptions for willful misconduct, fraud, confidentiality breaches, and IP infringement (uncapped)