Contract analysis

1. Term and Effective Date OWS has accepted Meridian's proposed five-year renewal term, running from February 1, 2026 through January 31, 2031. OWS does not object to the length of the term as proposed. However, OWS's redline includes important transition language designed to ensure that there is no gap in license coverage between the expiration of the Original ELA on January 31, 2026 and the effective date of the Pr

2. Licensed Products — Scope Expansion Under the Original ELA, OWS is licensed to use the following three Meridian product modules: (i) Meridian Marlowe Asset Management™ (digital integrated circuit design suite); (ii) Meridian SignalForge™ (signal integrity analysis); and (iii) Meridian VerifyPro™ (formal verification). These three product modules have been integral to OWS's design workflows since the inception of t

3. Seat Count Expansion The Original ELA authorizes a total of one hundred ninety (190) seats, allocated as follows: one hundred fifty (150) named-user seats and forty (40) floating/concurrent-use seats. The enclosed redline reflects OWS's proposed expansion of the authorized seat count to a total of two hundred eighty (280) seats, allocated as follows: This represents a ninety-seat increase, or an approximately 47.4

4. Pricing and Volume discount OWS has reviewed Meridian's initial renewal quotation proposing a total contract value ("TCV") of Seventy-One Million Five Hundred Thousand Dollars ($71,500,000.00) over the five-year term, equivalent to Fourteen Million Three Hundred Thousand Dollars ($14,300,000.00) per annum. This represents an approximately 55.4% increase over the current annual fees of Nine Million Two Hundred Thou

5. Audit Rights Under Section 8.3 of the Original ELA, Meridian currently retains the right to conduct up to two (2) software license audits per calendar year with only fifteen (15) calendar days' prior written notice. OWS has found this audit frequency and notice period to be operationally burdensome in practice, as each audit requires substantial coordination across OWS's IT infrastructure and engineering operation

6. Intellectual Property Indemnification OWS's redline includes significant revisions to the intellectual property indemnification provisions set forth in Article 11 of the Proposed Agreement. These revisions are informed by a detailed analysis of IP indemnification scope and market benchmarking that OWS has undertaken with the assistance of outside counsel. OWS is prepared to share relevant market data and comparabl

7. Limitation of Liability Meridian's draft of the Proposed Agreement proposes a general aggregate liability cap equal to one times (1×) the annual fees paid by OWS in the most recent year. OWS considers this cap to be insufficient given the magnitude of the overall transaction, the criticality of Meridian's tools to OWS's semiconductor design operations, and the potential consequences of a material breach or product

8. Source Code Escrow OWS's redline introduces a new requirement for a technology escrow arrangement with a neutral, independent escrow agent. This provision is designed to protect OWS's business continuity in the event of certain adverse circumstances affecting Meridian's ability to support the licensed products. The key elements of the proposed escrow arrangement are as follows: (a) Escrow Agent. OWS proposes Iron

9. Cloud Services — SLA and Data Security Recognizing that Meridian's product offerings increasingly include cloud-hosted components — including Meridian CloudVerify™ — OWS's redline includes a supplemental Data Security and Cloud Services Rider (the "Cloud Rider"), which would be attached as an exhibit to the Proposed Agreement and govern all cloud-hosted services and components provided by Meridian. The Cloud Rider

10. Governing Law and Dispute Resolution OWS has accepted California as the governing law for the Proposed Agreement, consistent with the choice of law provision in the Original ELA. OWS's redline retains binding arbitration administered by JAMS in Santa Clara County, California as the dispute resolution mechanism, also consistent with the Original ELA. However, OWS has proposed certain procedural revisions to the ar

11. Other Notable Revisions In addition to the principal areas summarized above, OWS's redline includes revisions in the following areas: (a) Confidentiality. OWS has proposed enhanced confidentiality protections for OWS's proprietary design data that is processed through or generated using Meridian's licensed tools. The revised confidentiality provisions include express return-or-destruction obligations upon termina

1. Redline markup of the Amended and Restated Enterprise License Agreement (proposed Agreement No. MDS-ELA-2026-01192) — tracked-changes Microsoft Word document;

2. Clean comparison copy of the Amended and Restated Enterprise License Agreement incorporating all of OWS's revisions;

3. Draft Data Security and Cloud Services Rider (proposed Exhibit to the Proposed Agreement); and

4. Updated Schedule A (Seat Allocation) and Schedule B (Fee Schedule) — redlined. Requested Response Timeline and Proposed Next Steps Given the parties' mutual interest in completing these negotiations well in advance of the January 31, 2026 expiration of the Original ELA, OWS respectfully requests that Meridian and Bexley Weir & Daly provide a written response to OWS's redline — whether in the form of a counter-redl