Contract analysis

I. Executive Summary The purpose of this memorandum is to provide Halcyon Semiconductor AG ("Halcyon AG") and its U.S. subsidiary, Halcyon Semiconductor Americas Inc. ("Halcyon Americas" and, together with Halcyon AG, "Halcyon" or the "Company"), with a comprehensive guide to the compliance obligations arising from the consent decree entered as a Final Judgment by the Honorable Robert Castañeda on November 8, 2023, i

II. Background and Procedural History A. The Acquisition On September 8, 2022, Halcyon Semiconductor AG, acting through its wholly owned U.S. subsidiary Halcyon Semiconductor Americas Inc. (EIN: 84-3921057), entered into an Agreement and Plan of Merger (the "Merger Agreement") to acquire 100% of the outstanding shares of Meridian Photonics Inc. (EIN: 93-1284563), a Delaware corporation headquartered at 1820 NW Everet

III. Overview of Consent Decree Obligations The Consent Decree imposes six principal categories of obligations on Halcyon, each of which is discussed in detail in Sections IV through IX below. For ease of reference, the six categories are summarized here:

1. FRAND Patent Licensing Commitment (Section IV): Halcyon must offer Fair, Reasonable, and Non-Discriminatory licenses for all 47 of Meridian's CPO-related U.S. patents to any third party that submits a bona fide licensing request.

2. Interoperability Maintenance Obligation (Section V): Halcyon must maintain backward-compatible interoperability between Meridian CPO modules and third-party switch ASICs conforming to OIF 400ZR and 800ZR standards.

3. Non-Discrimination in Supply (Section VI): Halcyon may not condition the sale of Meridian CPO modules on a customer's purchase of other Halcyon products, and may not offer preferential pricing or terms to customers who purchase bundled Halcyon products.

4. Compliance Monitor Cooperation (Section VII): Halcyon must cooperate fully with the independent compliance monitor, Kirkdale Compliance Group LLC, which has broad authority to access records, interview personnel, and report to the Oregon AG.

5. Civil Penalty Payment (Section VIII): Halcyon must pay a civil penalty of $1,500,000 to the State of Oregon within thirty (30) calendar days of entry of the Decree.

6. Reporting and Record-Keeping (Section IX): Halcyon must maintain complete records related to compliance with all obligations and must cooperate with information requests from the Oregon AG's Antitrust Division. All behavioral obligations under the Consent Decree have a duration of five (5) years from the date of entry of the Decree, meaning they are effective from November 8, 2023, through November 8, 2028. At the

IV. Obligation 1: FRAND Patent Licensing Commitment A. Scope of Obligation The Consent Decree requires Halcyon to offer Fair, Reasonable, and Non-Discriminatory ("FRAND") licenses for all forty-seven (47) of Meridian's U.S. patents related to co-packaged optics technology (the "Covered Patents") to any third party that submits a bona fide licensing request during the five-year term of the Decree. A complete list of t

V. Obligation 2: Interoperability Maintenance Obligation A. Scope of Obligation The Consent Decree requires Halcyon to maintain backward-compatible interoperability between Meridian CPO modules and third-party switch ASICs that conform to the Optical Internetworking Forum ("OIF") 400ZR and 800ZR standards. This obligation is designed to ensure that Halcyon does not use its ownership of Meridian to degrade the ability

VI. Obligation 3: Non-Discrimination in Supply of CPO Modules A. Scope of Obligation The Consent Decree prohibits Halcyon from engaging in discriminatory practices in the sale and supply of Meridian CPO modules. This obligation has two principal components: No Tying or Bundling. Halcyon may not condition the sale or supply of Meridian CPO modules on a customer's purchase of Halcyon power-management ICs, analog semico

VII. Obligation 4: Independent Compliance Monitor A. Identity and Appointment The Consent Decree appoints Kirkdale Compliance Group LLC ("Kirkdale" or the "Monitor") as the independent compliance monitor for the full five-year term of the Decree (November 8, 2023, through November 8, 2028). Kirkdale is a compliance consulting firm headquartered at 233 South Wacker Drive, Suite 4100, Chicago, Illinois 60606. Contact i

VIII. Obligation 5: Civil Penalty Payment A. Amount and Deadline The Consent Decree requires Halcyon Semiconductor Americas Inc. to pay a civil penalty of $1,500,000 to the State of Oregon. This penalty was negotiated as part of the overall settlement and reflects the State's view that the acquisition resulted in a substantial lessening of competition in the CPO transceiver market, warranting a monetary sanction in a

1. Contact Senior Assistant AG Marcus Trujillo at the Oregon Department of Justice Antitrust Division to obtain the official wire transfer instructions for the designated State of Oregon account.

2. Execute the wire transfer in the amount of $1,500,000 with sufficient lead time to ensure receipt by December 8, 2023, accounting for potential banking processing delays.

3. Retain a copy of the wire transfer confirmation, including the transaction reference number, date and time of execution, and the identity of the receiving account.

4. Provide a copy of the wire transfer confirmation to Calderwood & Harkness LLP (attention: Elaine Forsythe) for inclusion in the matter file.

5. Provide a copy of the wire transfer confirmation to Kirkdale Compliance Group LLC for inclusion in the first semi-annual compliance report covering the period from November 8, 2023, through May 8, 2024.

IX. Obligation 6: Reporting and Record-Keeping A. Internal Record-Keeping Requirements The Consent Decree requires Halcyon to maintain complete and accurate records related to compliance