Contract analysis

I. Executive Summary The purpose of this memorandum is to set forth a comprehensive commercial and legal negotiation strategy for the renewal and expansion of Optiwave Semiconductor Corp.'s ("OWS" or the "Company") Enterprise License Agreement with Meridian Design Systems, Inc. ("Meridian"). The agreement at issue is the Original ELA, Agreement No. MDS-ELA-2023-00487, dated February 1, 2023 (the "Original ELA"), whic

II. Background and Current Agreement Summary A. OWS Overview Optiwave Semiconductor Corp. is a fabless semiconductor design company incorporated in the State of Delaware and headquartered at 4850 Great America Parkway, Suite 300, Santa Clara, California 95054. The Company was founded in 2017 and has established itself as a leading designer of high-speed optical transceiver integrated circuits and silicon photonics ch

III. OWS Commercial Objectives and Target Terms A. Pricing Target OWS's target annual fee for the renewal ELA is $11.8 million per year, yielding a TCV of $59.0 million over the proposed five-year term. At 280 total seats, this implies an effective per-seat annual cost of approximately $42,143 ($11.8 million ÷ 280 seats). OWS's target represents a 28.3% increase over the current annual spend of $9.2 million (an incre

IV. Leverage Points and Competitive Dynamics A. Competitive Alternatives OWS's negotiating leverage is enhanced by the fact that Meridian, while OWS's largest EDA vendor, is not OWS's sole EDA provider. OWS's current total annual EDA spend of $18.6 million is allocated across multiple vendors, with the Meridian portion representing approximately 49.5% of the total. The remaining approximately $9.4 million per year is

V. Brindoval Foundry Interoperability — PhotonX™ AEPL Risk A significant commercial and compliance risk associated with the renewal involves the interoperability of Meridian's PhotonX™ product with the process design kits supplied by OWS's primary foundry partner, Brindoval Foundry Services Ltd. ("Brindoval"). Under the terms of OWS's PDK License Agreement with Brindoval (Agreement No. CFS-PDK-2023-US-0034, dated Mar

VI. Key Legal Term Positions This section sets forth OWS's positions on the principal legal terms to be negotiated in the renewal ELA. For each issue, we describe OWS's primary position, Meridian's expected position, our recommendation, and OWS's fallback position if the primary position cannot be achieved. A. IP Indemnification OWS Primary Position. OWS should seek uncapped intellectual property indemnification from

VII. Negotiation Timeline and Process The table below sets forth the proposed timeline for the renewal negotiation: The timeline is aggressive but achievable provided that both parties engage in good faith and in a timely manner. We note that the period between December 15, 2025 (target for commercial agreement) and January 15, 2026 (target for execution) includes the year-end holiday period, which may slow responsiv

VIII. Fallback Positions Summary Table The following table summarizes OWS's primary negotiation positions and fallback positions on each of the key commercial and legal terms: This table is intended as a reference guide for the OWS negotiation team and should be treated as a living document, subject to revision as negotiations progress and as new information becomes available.

IX. Recommended Next Steps Based on the analysis set forth in this memorandum, we recommend the following next steps:

1. OWS Management Review and Approval. Douglas Tran and Priya Venkatesh should review this strategy memorandum in its entirety and confirm or modify the target positions and fallback positions set forth herein. We request that any comments or revisions be communicated to C&H by November 10, 2025, to allow sufficient time for C&H to incorporate OWS's direction into the first redline.

2. Ridgeline Capital Partners Briefing. OWS management should brief Ridgeline Capital Partners (Nadia Petrov, Operating Partner) on the key financial terms of the renewal, including the pricing gap between Meridian's initial proposal ($71.5M TCV) and OWS's target ($59.0M TCV), the fallback pricing authority (up to $62.5M TCV), and the expected EBITDA impact of the renewal. OWS should confirm Ridgeline's alignment wit

3. First Redline Preparation and Delivery. The C&H team — Aaron Liu (lead associate) and Monica Reyes (associate) — will finalize the first redline of Meridian's proposed Amended and Restated Enterprise License Agreement for delivery to Bexley Weir & Daly LLP (Rachel Endo, Partner) by November 15, 2025. The redline will incorporate OWS's positions on all commercial and legal terms described in this memorandum.

4. Cover Letter to BWD. C&H will prepare a cover letter to Rachel Endo at BWD to accompany the first redline. The cover letter will summarize OWS's key positions on the principal commercial and legal terms, identify the issues that OWS views as priorities, and propose a schedule for negotiation sessions.

5. Draft Source Code Escrow Agreement. C&H will prepare a draft Source Code Escrow Agreement among OWS, Meridian, and Iron Vault Escrow Services, Inc. for circulation to OWS management and subsequent delivery to BWD.

6. Draft Data Security and Cloud Services Rider. C&H will prepare a draft Data Security and Cloud Services Rider addressing the CloudVerify™ SLA, service credit, SOC 2, encryption, data localization, incident notification, and penetration testing provisions described in Section VI.E.

7. IP Indemnification Analysis Memo. Monica Reyes will complete a separate IP Indemnification Analysis Memo that provides market benchmarking data for IP indemnification terms in enterprise EDA license agreements. This memo will support OWS's negotiating position that uncapped IP indemnification is a market-standard term and will be available for reference during negotiations with BWD.

8. Brindoval AEPL Coordination. OWS engineering operations (Priya Venkatesh) should coordinate with Henry Kuo at Brindoval Foundry Services Ltd. regarding the expected timeline for PhotonX™ AEPL qualification. OWS should seek to obtain a written commitment or timeline estimate from Brindoval, and should request that Brindoval provide written confirmation promptly upon completion of the qualification process.

9. Competitive Proposal Solicitation. OWS should evaluate and, if appropriate, solicit competitive proposals from alternative EDA vendors for the analog/mixed-signal (AnalogEdge™ equivalent) and silicon photonics (PhotonX™ equivalent) use cases. Even if OWS does not intend to switch vendors, the existence of competitive proposals strengthens OWS's negotiating leverage and provides a credible BATNA (best alternative t

X. Conclusion The renewal of the Meridian Enterprise License Agreement is one of OWS's most significant vendor procurement events in the current fiscal year. The pricing gap between Meridian's initial proposal ($71.5 million TCV) and OWS's target ($59.0 million TCV) is $12.5 million over the five-year term — a meaningful delta, but one that we believe is bridgeable in light of OWS's substantial leverage. OWS's levera