Contract analysis

I. INTRODUCTION AND DECLARANT'S IDENTIFICATION

1. I am a lead associate in the Litigation (General) practice group at Calderwood & Harkness LLP, located at 777 South Figueroa Street, Suite 4200, Los Angeles, California 90017. I am a member in good standing of the State Bar of California (Bar No. 328714), and I am admitted to practice before the United States District Court for the Central District of California. I submit this declaration in support of Petitioner

2. I am the lead associate attorney for Halcyon in this matter, which is designated as Calderwood & Harkness LLP matter number 1032-00002. The engagement team working on this matter includes Linda Osei, Responsible Partner; Theodore Langston, Billing Partner; and Simone Laroche, Working Associate. All members of the engagement team are attorneys at Calderwood & Harkness LLP.

3. I have personal knowledge of the facts stated in this declaration, or I am informed of them based on my review of documents maintained in our firm's files, communications with Halcyon's in-house legal and finance teams, public records, commercial databases, and other sources described herein. If called as a witness, I could and would competently testify to the matters set forth in this declaration.

4. The purpose of this declaration is to provide the Court with evidence in support of Halcyon's ex parte application for a TRO and order to show cause re preliminary injunction to prevent Respondents Meridian Dynamics Inc. ("Meridian") and Derek Calloway ("Calloway") (collectively, "Respondents") from transferring, encumbering, concealing, or dissipating assets pending confirmation and enforcement of a $47,300,000 a

II. BACKGROUND OF THE UNDERLYING DISPUTE AND ARBITRATION AWARD A. The Distribution Agreement

5. Halcyon Semiconductor AG is a German Aktiengesellschaft (stock corporation) registered under HRB 241873 with the Amtsgericht München (Munich Commercial Register). Halcyon is headquartered at Leopoldstraße 180, 80804 Munich, Germany. Halcyon's shares are publicly traded on the SIX Swiss Exchange under the ticker symbol "HSAG" (ISIN: DE000A2QRFX7).

6. Halcyon specializes in the design, manufacture, and sale of high-performance power management integrated circuits ("PMICs"), marketed under its Series HX-400 through HX-900 product lines, and silicon carbide ("SiC") switching modules, marketed under its Series SC-200 through SC-500 product lines. These products serve the automotive, industrial, and renewable-energy sectors, and Halcyon is recognized as a leading s

7. For the fiscal year ending December 31, 2024, Halcyon reported consolidated revenue of approximately €2.14 billion. Approximately 28% of that revenue — roughly $599.2 million at applicable exchange rates — was derived from the North American market. The North American market is therefore of critical strategic and financial importance to Halcyon's business.

8. Respondent Meridian Dynamics Inc. is a Delaware corporation (Employer Identification Number: 83-2047561). Meridian's registered agent is located at 1209 Orange Street, Wilmington, Delaware 19801. Meridian's principal place of business is at 2750 Barranca Parkway, Suite 400, Irvine, California 92606. Meridian is a specialty electronics components distributor. It was founded in 2009 by Respondent Derek Calloway, who

9. On September 28, 2016, Halcyon and Meridian entered into an Exclusive Distribution Agreement (the "Distribution Agreement"), with an effective date of January 1, 2017, and a ten-year term expiring on December 31, 2026. Under the Distribution Agreement, Meridian was appointed as Halcyon's exclusive North American distributor for Halcyon's PMIC and SiC product lines. The Distribution Agreement contained numerous mat

10. Beginning approximately in the second quarter of 2023 (around May 2023), Halcyon discovered that Meridian had committed multiple material breaches of the Distribution Agreement. Specifically, Halcyon's investigation revealed the following: (a) Violation of Non-Compete (§7.2): Meridian had entered into a side distribution arrangement with Solaris Chip Technologies Ltd., a United Kingdom-based semiconductor manufac

11. On November 3, 2023, Halcyon issued a formal written notice of default to Meridian, identifying each of the foregoing breaches and demanding that Meridian cure the defaults within the ninety-day cure period provided under Section 10.2 of the Distribution Agreement. Meridian did not cure any of the identified defaults within the cure period. Accordingly, the Distribution Agreement was terminated for cause, effecti

12. On April 8, 2024, Halcyon filed a Demand for Arbitration with the AAA/ICDR, initiating arbitration proceedings against Meridian and Calloway. The arbitration was assigned AAA/ICDR Case No. 01-24-0003917.

13. On June 19, 2024, a three-member arbitral tribunal was constituted in accordance with the AAA/ICDR International Arbitration Rules. The tribunal consisted of the following arbitrators: (a) Presiding Arbitrator: The Honorable Gerald M. Osterhaus (Ret.), a former United States District Judge appointed by agreement of the parties; (b) Claimant's Party-Appointed Arbitrator: Professor Diane K. Sørensen, a professor of

14. The evidentiary hearing was conducted over a total of seven hearing days: October 14 through October 18, 2024 (five consecutive hearing days), and November 4 through November 5, 2024 (two additional hearing days). During the hearing, the tribunal received live witness testimony, expert testimony, and extensive documentary evidence from both sides. The parties submitted post-hearing briefs and proposed findings of

15. On August 22, 2025, the tribunal issued a unanimous Final Award in favor of Halcyon and against Meridian and Calloway (the "Award"). The Award was signed by all three arbitrators. The tribunal awarded Halcyon a total of $47,300,000 in damages, comprising the following components: (a) Lost Profits (Remaining 2.8-Year Term): $31,800,000. The tribunal credited the damages model presented by Halcyon's expert, Dr. Ren

16. The Award further provides for post-award interest at the rate of 10% per annum from August 22, 2025, until the date of payment in full, pursuant to California Civil Code Section 3289.

17. A true and correct copy of the Final Award dated August 22, 2025, is attached hereto as Exhibit A and was previously filed with the Court in connection with Halcyon's Petition to Confirm Arbitration Award. D. Post-Award Posture

18. On September 5, 2025, the law firm of Whitfield, Carruthers & Payne LLP ("WCP"), acting as counsel for Meridian and Calloway, sent a letter to Halcyon's prior counsel, on behalf of Meridian, expressly refusing to satisfy the Award. In that letter, lead partner Raymond Whitfield and senior associate Alana Choi stated that Meridian would not voluntarily pay any portion of the Award and signaled Meridian's intent to

19. In light of Meridian's refusal to satisfy the Award and its stated intention to challenge the Award in court, Halcyon retained Calderwood & Harkness LLP as its counsel on September 30, 2025.

20. On October 14, 2025, Halcyon, through Calderwood & Harkness LLP, filed a Petition to Confirm Arbitration Award in this Court, which was assigned Case No. 2:25-cv-08742-RGK-PLA and designated to the Honorable Robert G. Kendrick. The Petition seeks confirmation of the Award in its entirety, including the principal amount of $47,300,000, post-award interest at 10% per annum from August 22, 2025, and entry of judgmen

21. Meridian's cross-motion to vacate the Award, as signaled in WCP's September 5, 2025 letter, is due on November 13, 2025.

22. As of the date of this declaration, the Award remains entirely unsatisfied. No payment of any kind — whether of principal, interest, or any other amount — has been made by Meridian or Calloway to Halcyon in connection with the Award.

III. MERIDIAN'S CORPORATE STRUCTURE AND KEY PRINCIPALS

23. Derek Calloway is the founder, Chief Executive Officer, and holder of 62% of the outstanding common stock of Meridian Dynamics Inc. As a result, Calloway exercises effective control over Meridian's business operations, corporate governance, and financial decisions. As described above, Calloway personally guaranteed certain obligations under the Distribution Agreement up to a cap of $10 million pursuant to Section

24. Janet Shin is the co-founder and Chief Operating Officer of Meridian. Ms. Shin holds 23% of Meridian's outstanding common stock and oversees the company's logistics, warehousing, and supply-chain operations. While Ms. Shin is not a named respondent in this action, her role as COO gives her significant operational authority over assets that are relevant to the enforcement of the Award.

25. The remaining 15% of Meridian's outstanding equity is held by other shareholders whose identities are not further specified in the corporate records and financial disclosures that declarant has reviewed to date.

26. Meridian's registered agent for service of process in Delaware is located at 1209 Orange Street, Wilmington, Delaware 19801. Meridian's principal place of business is at 2750 Barranca Parkway, Suite 400, Irvine, California 92606. Meridian also operates a warehouse and distribution center at 1480 East Fourth Street, Ontario, California 91764. All three locations are relevant to the identification and preservation

IV. MERIDIAN'S ASSET BASE AND FINANCIAL CONDITION A. Overview of Meridian's Balance Sheet

27. Based on my review of Meridian's most recently available financial disclosures for the fiscal year ending December 31, 2024, Meridian reported the following key financial figures: (a) Total Revenue: Approximately $312 million. (b) Total Assets: Approximately $187 million. (c) Accounts Receivable: Approximately $52 million. (d) Inventory: Approximately $61 million. (e) Real Property (Warehouse/Distribution Center)

28. True and correct copies of relevant excerpts from Meridian's financial disclosures for fiscal year 2024 are attached hereto as Exhibit B.

29. While Meridian's total asset base of approximately $187 million may appear superficially adequate to satisfy the $47.3 million Award (plus accrued interest), a closer examination of the composition of those assets and the existing claims against them reveals a materially more constrained picture, as described below. B. Brindoval National Bank Senior Secured Revolving Credit Facility

30. On August 12, 2022, Meridian entered into a revolving credit facility with Brindoval National Bank, a commercial bank headquartered at 4100 MacArthur Boulevard, Suite 100, Newport Beach, California 92660 (the "Brindoval Facility"). The Brindoval Facility provides for revolving credit in the principal amount of up to $45 million.

31. The Brindoval Facility is secured by a first-priority lien on substantially all of Meridian's personal property, including but not limited to all accounts, accounts receivable, inventory, equipment, general intangibles, instruments, chattel paper, deposit accounts, and proceeds thereof, pursuant to a security agreement of the same date (the "Brindoval Security Agreement"). Brindoval National Bank filed a UCC-1 fi

32. True and correct copies of the UCC-1 financing statement filed by Brindoval National Bank with the Delaware Secretary of State, and relevant excerpts from the publicly available loan documents associated with the Brindoval Facility, are attached hereto as Exhibit C.

33. The existence of the Brindoval Facility and its first-priority lien is of critical significance to Halcyon's ability to enforce the Award. Upon confirmation of the Award and entry of judgment, any judgment lien obtained by Halcyon would be subordinate to Brindoval's prior perfected security interest with respect to all of Meridian's personal property. This substantially narrows the pool of assets effectively avai

34. To illustrate the practical impact: Meridian's total personal-property assets — consisting primarily of accounts receivable (approximately $52 million) and inventory (approximately $61 million), totaling approximately $113 million — are subject to Brindoval's first-priority blanket lien in the amount of up to $45 million. After accounting for Brindoval's priority claim, only approximately $68 million in personal

35. Meridian's warehouse and distribution center at 1480 East Fourth Street, Ontario, California 91764, is appraised at approximately $34 million. Based on my review of the Brindoval Security Agreement and the UCC-1 financing statement, it appears that Brindoval's security interest covers personal property and does not extend to Meridian's real property. Accordingly, the Ontario warehouse may represent one of Meridia

36. However, as described in greater detail in Section V below, declarant has identified recent activity suggesting that Meridian may be exploring a sale, refinancing, or other transaction involving this real property, which would further diminish the assets available for enforcement of the Award.

V. EVIDENCE OF POTENTIAL ASSET DISSIPATION

37. Since my engagement on this matter, I have conducted an extensive investigation into Respondents' financial activities in the period following the issuance of the Award on August 22, 2025. This investigation has included review of public records (including UCC filings with the Delaware and California Secretaries of State, county recorder records, and court filings), commercial databases, industry publications, an

38. My investigation of UCC filings with the Delaware Secretary of State and the California Secretary of State reveals that, within the past sixty days — that is, after the Award was issued on August 22, 2025 — new UCC-1 financing statements have been filed against Meridian by at least one additional creditor beyond Brindoval National Bank. Additionally, UCC-3 amendment statements have been filed reflecting modificat

39. The filing of new UCC-1 financing statements during this period suggests that Meridian may be obtaining new secured financing or encumbering previously unencumbered assets. The timing of these filings is particularly concerning: they were made after the issuance of the Award and after Meridian's counsel, WCP, sent the September 5, 2025 letter expressly refusing to pay the Award. This temporal proximity supports a

40. True and correct copies of the recently filed UCC-1 financing statements and UCC-3 amendments identified through my investigation are attached hereto as Exhibit D.

41. The timing and nature of these filings — occurring in the immediate wake of a $47.3 million award and a stated refusal to pay — are highly suspicious and support an inference of intent to frustrate enforcement. A debtor's post-judgment (or, in this case, post-award) efforts to grant additional security interests in its assets are a recognized indicator of asset dissipation that courts have relied upon in granting

42. Through industry sources and publicly available information, I have learned that Meridian has been conducting accelerated sales of inventory at below-market prices in the weeks following the issuance of the Award. Specifically, I have obtained information from multiple industry contacts and published industry reports indicating that Meridian has offered bulk lots of semiconductor components — including remaining

43. This fire-sale approach to inventory liquidation is inconsistent with Meridian's ordinary course of business. During the period from 2017 through early 2024, Meridian typically sold semiconductor components through its established channel at or near prevailing market prices, with discounts limited to standard volume-based pricing tiers. The sudden willingness to sell large quantities of inventory at steep discoun

44. An accelerated liquidation of inventory at below-market prices is consistent with an effort to convert assets to cash. Cash, unlike inventory sitting in a warehouse, can more easily be moved between accounts, transferred to third parties, or concealed. The conversion of relatively illiquid assets (inventory) to highly liquid assets (cash) in the context of an impending enforcement action is a well-recognized red

45. Copies of communications and industry-source reports regarding Meridian's below-market inventory sales are attached hereto as Exhibit E. C. Transfer of Funds

46. My investigation has uncovered indications that Meridian and/or Calloway have transferred significant funds out of Meridian's operating accounts in the period since the Award was issued on August 22, 2025.

47. Based on bank-account information obtained through review of publicly available court records from prior litigation involving Meridian, as well as commercial databases, there are indications of unusual outbound wire transfers from Meridian's primary operating accounts. The volume and timing of these transfers — occurring in the weeks following the Award — are inconsistent with Meridian's typical patterns of cash

48. Additionally, I have identified indications that Calloway may have caused Meridian to make personal transfers or distributions to him as a shareholder, potentially reducing his personal exposure under the $10 million personal guaranty set forth in Section 12.4 of the Distribution Agreement. If Calloway is extracting cash or other assets from Meridian — whether through dividends, distributions, management fees, or

49. A summary of the investigative findings regarding fund transfers by Meridian and/or Calloway, together with supporting documentation, is attached hereto as Exhibit F. D. Real Property Concerns

50. My investigation has identified indications that Meridian may be exploring a sale or refinancing of the Ontario, California warehouse property located at 1480 East Fourth Street, Ontario, California 91764. As noted above, this property is appraised at approximately $34 million and is believed to be one of Meridian's most significant unencumbered assets — potentially the single largest asset that is not subject to

51. A transfer or further encumbrance of this real property would materially impair Halcyon's ability to enforce the $47.3 million Award. If the Ontario property were sold, the sale proceeds could be dissipated or moved beyond the reach of Halcyon. If the property were refinanced or further encumbered, the resulting mortgage or lien would reduce or eliminate the equity available to satisfy Halcyon's judgment.

52. Any available documentation regarding real property listing activity, refinancing inquiries, or other transactions involving the Ontario warehouse property is attached hereto as Exhibit G. E. Calloway's Personal Assets and Guaranty Exposure

53. As set forth above, Calloway personally guaranteed certain obligations under the Distribution Agreement up to a cap of $10 million pursuant to Section 12.4 of the Distribution Agreement. Calloway is therefore a potential judgment debtor in these proceedings for up to $10 million, in addition to any amounts recoverable from Meridian.

54. Calloway, as the 62% controlling shareholder and CEO of Meridian, is uniquely positioned to direct the dissipation of both corporate and personal assets. He has the authority to approve transfers of corporate funds, authorize the grant of new security interests in corporate assets, direct the sale of corporate property, and cause Meridian to make distributions to shareholders — including himself. The concentratio

55. When viewed in their totality, the facts set forth in this Section V — including the new UCC filings, the accelerated inventory liquidation at below-market prices, the unusual fund transfers, and the potential real property transactions — suggest a coordinated effort by Meridian and Calloway to render the Award uncollectible. These are not isolated events; they form a pattern of conduct that is consistent with a