Contract analysis

1. Identity and Background of Declarant

1. My name is Dr. Katharina Reinhardt. I am over the age of eighteen and I am a citizen and resident of the Federal Republic of Germany.

2. I hold the position of General Counsel (Chefjuristin) of Halcyon Semiconductor AG, a position I have held since March 2015 — a period of more than ten years. Prior to my appointment as General Counsel, I served as Deputy General Counsel at Halcyon from January 2012 through February 2015. I have been employed by Halcyon, in various legal capacities, for over thirteen years.

3. My principal office is located at Halcyon's headquarters at Leopoldstraße 180, 80804 Munich, Germany.

4. In my capacity as General Counsel, I am responsible for overseeing all legal affairs of Halcyon worldwide, including, without limitation, the negotiation and administration of commercial contracts, dispute resolution and litigation management, regulatory compliance, intellectual property matters, and corporate governance. I report directly to the Vorstand (Management Board) of Halcyon Semiconductor AG.

5. I was personally and directly involved in the matters at issue in this proceeding. Specifically, I directly supervised the negotiation and execution of the Exclusive Distribution Agreement between Halcyon and Meridian that is the subject of the underlying arbitration. I oversaw the arbitration proceedings on behalf of Halcyon from their inception through the issuance of the Final Award. I authorized the retention

2. Halcyon Semiconductor AG — Corporate Background

6. Halcyon Semiconductor AG is an Aktiengesellschaft (stock corporation) organized and existing under the laws of the Federal Republic of Germany. It is registered in the commercial register (Handelsregister) of the Amtsgericht München (Munich Local Court) under registration number HRB 241873.

7. Halcyon's principal offices and headquarters are located at Leopoldstraße 180, 80804 Munich, Germany. The company maintains additional offices and manufacturing facilities in Dresden, Germany; Eindhoven, the Netherlands; and Austin, Texas, United States.

8. Halcyon is a publicly listed company. Its shares are traded on the SIX Swiss Exchange under the ticker symbol "HSAG" (ISIN: DE000A2QRFX7). As of the date of this declaration, Halcyon's market capitalization is approximately €4.8 billion.

9. Halcyon is a manufacturer and developer of high-performance semiconductor products, specializing in power management integrated circuits ("PMICs") and silicon carbide ("SiC") switching modules. These products are critical components in a wide range of electronic applications that require efficient and reliable power conversion and management.

10. Halcyon's key product lines include the PMIC Series HX-400 through HX-900 and the SiC switching module Series SC-200 through SC-500. These product families serve primary end markets in the automotive sector, industrial applications, and renewable-energy systems, including electric vehicle powertrains, solar inverter platforms, and industrial motor drive systems.

11. For fiscal year 2024, Halcyon reported consolidated revenue of approximately €2.14 billion. Approximately twenty-eight percent (28%) of Halcyon's total revenue — approximately $599.2 million equivalent at prevailing exchange rates — was derived from the North American market, making it one of the most significant geographic markets for Halcyon's business.

12. Marcus Pfeiffer serves as Halcyon's Senior Vice President of Global Sales. Mr. Pfeiffer was the primary commercial contact between Halcyon and Meridian with respect to the distribution relationship at issue in this matter. Mr. Pfeiffer reported directly to the Vorstand regarding the status and performance of the U.S. distribution relationship with Meridian throughout the term of the Distribution Agreement.

3. Meridian Dynamics Inc. — Counterparty Background

13. Meridian Dynamics Inc. is a corporation incorporated under the laws of the State of Delaware. Its registered agent address in Delaware is located at 1209 Orange Street, Wilmington, DE 19801.

14. Meridian's principal place of business is located at 2750 Barranca Parkway, Suite 400, Irvine, California 92606, within the Central District of California.

15. Meridian is a specialty electronics components distributor that operates across the western United States. Meridian's business model centers on the procurement, warehousing, and distribution of semiconductor and electronic components to original equipment manufacturers ("OEMs"), contract manufacturers, and design houses throughout the western United States.

16. Derek Calloway is the Chief Executive Officer, founder, and majority shareholder of Meridian, holding approximately sixty-two percent (62%) of Meridian's issued and outstanding equity. Janet Shin serves as Chief Operating Officer and co-founder of Meridian, holding approximately twenty-three percent (23%) of Meridian's equity. Meridian was founded in 2009.

17. Based on publicly available information and information obtained during the course of the arbitration proceedings, Meridian reported revenue of approximately $312 million for the fiscal year ending December 31, 2024.

18. Meridian operates a warehouse and distribution center at 1480 East Fourth Street, Ontario, California 91764, from which it conducted its distribution operations for Halcyon products during the term of the Distribution Agreement.

4. The Exclusive Distribution Agreement

19. On September 28, 2016, Halcyon and Meridian entered into an Exclusive Distribution Agreement (the "Distribution Agreement"), effective as of January 1, 2017, for an initial term of ten (10) years expiring on December 31, 2026. I personally supervised the negotiation and drafting of the Distribution Agreement and was present at its execution.

20. Under the Distribution Agreement, Meridian was appointed as Halcyon's exclusive distributor in the United States for Halcyon's PMIC product line (Series HX-400 through HX-900) and SiC switching modules (Series SC-200 through SC-500). Meridian's exclusive territory encompassed all fifty states of the United States and the District of Columbia.

21. The Distribution Agreement contained a number of key provisions material to the present proceeding, including, but not limited to, the following: (a) Section 3.2 — Annual Minimum Purchase Commitments. Section 3.2 of the Distribution Agreement established escalating annual minimum purchase commitments for Meridian, commencing at $28 million in Year 1 (calendar year 2017) and increasing on an agreed schedule to $72

22. A true and correct copy of the Distribution Agreement is attached hereto as Exhibit A and is incorporated by reference herein.

5. Meridian's Breaches of the Distribution Agreement

23. Beginning in approximately the second quarter of 2023 (specifically, in or about May 2023), Halcyon discovered that Meridian had engaged in conduct constituting material breaches of the Distribution Agreement in multiple respects. These breaches were uncovered through Halcyon's regular commercial monitoring activities, reports from customers and market participants, and a subsequent internal investigation.

24. The material breaches identified by Halcyon were as follows: (a) Non-Compete Violation (Section 7.2). Halcyon discovered that Meridian had entered into a side distribution arrangement with Solaris Chip Technologies Ltd. ("Solaris"), a private limited company organized under the laws of England and Wales and headquartered in Cambridge, United Kingdom. Solaris is a direct competitor of Halcyon in the semiconductor

25. On November 3, 2023, Halcyon issued a formal written notice of default to Meridian, invoking the cure provisions set forth in the Distribution Agreement and providing Meridian with a ninety (90)-day cure period in which to remedy the identified breaches. I personally approved and authorized the issuance of this notice of default.

26. Meridian failed to cure any of the identified breaches within the ninety-day cure period. Meridian did not offer any substantive response to the notice of default that would have constituted an adequate cure, nor did Meridian take any action to terminate its relationship with Solaris, restore its purchasing volumes to the contractually required minimums, or discontinue gray-market diversion of Halcyon products.

27. On March 15, 2024, Halcyon terminated the Distribution Agreement for cause, effective immediately, pursuant to the termination-for-cause provisions of the agreement. I personally authorized the termination.

6. Commencement of Arbitration

28. On April 8, 2024, Halcyon filed a Demand for Arbitration with the American Arbitration Association's International Centre for Dispute Resolution (the "ICDR") pursuant to Section 14.3 of the Distribution Agreement. The arbitration was commenced under AAA/ICDR Case No. 01-24-0003917. I authorized the filing of the Demand for Arbitration on behalf of Halcyon.

29. Consistent with Section 14.3 of the Distribution Agreement, the arbitration was seated in Los Angeles, California. California law governed the merits of the dispute pursuant to Section 14.1 of the Distribution Agreement.

30. A true and correct copy of the Demand for Arbitration filed on April 8, 2024, is attached hereto as Exhibit B and is incorporated by reference herein.

7. The Arbitral Tribunal and Proceedings

31. On June 19, 2024, a three-member arbitral tribunal (the "Tribunal") was constituted in accordance with the ICDR Rules and Section 14.3 of the Distribution Agreement. The Tribunal was composed of the following arbitrators: (a) Presiding Arbitrator: The Honorable Gerald M. Osterhaus (Ret.), a former judge of the California Court of Appeal, Second Appellate District, who was selected as presiding arbitrator by agree

32. The parties engaged in extensive discovery, including the production and review of thousands of documents, written witness statements, and expert reports. The parties also engaged in extensive pre-hearing briefing, including submissions on jurisdictional matters, merits issues, and damages methodology.

33. In connection with the arbitration, Halcyon retained the law firm of Falkenberg & Strauss GmbH, based in Munich, Germany, as German counsel to advise on German law issues and cross-border enforcement strategy. The lead partner at Falkenberg & Strauss for this engagement was Dr. Elias Falkenberg.

34. Halcyon further retained Pinnacle Forensic Advisory LLC as its expert on damages. Dr. Renata Moss, CFA, Managing Director of Pinnacle Forensic Advisory LLC, prepared a comprehensive damages report quantifying Halcyon's losses arising from Meridian's breaches of the Distribution Agreement. Dr. Moss testified before the Tribunal during the evidentiary hearing and was subject to cross-examination by Respondents' cou

35. An evidentiary hearing took place over a total of seven (7) hearing days, divided into two hearing sessions: the first session occurred from October 14 through October 18, 2024 (five hearing days), and the second session occurred on November 4 and November 5, 2024 (two hearing days). All hearing sessions were conducted in Los Angeles, California, at the seat of the arbitration.

36. Both parties were represented by counsel throughout the arbitration proceedings. Both parties presented live witness testimony, including fact witnesses and expert witnesses, and submitted extensive documentary evidence. The proceedings were conducted in full compliance with the ICDR Rules and the procedural orders issued by the Tribunal.

37. Meridian was represented throughout the arbitration proceedings by qualified legal counsel. In the post-award phase, Meridian and Derek Calloway were represented by the law firm of Whitfield, Carruthers & Payne LLP, led by Raymond Whitfield, partner, and Alana Choi, senior associate.

38. On August 22, 2025, the Tribunal issued a unanimous Final Award (the "Award") in favor of Halcyon and against Meridian. The Award was signed by all three members of the Tribunal.

39. The Award granted Halcyon total damages in the amount of $47,300,000 (forty-seven million three hundred thousand U.S. dollars), comprised of the following components: (a) Lost Profits (Remaining Term): $31,800,000. The Tribunal awarded $31,800,000 in lost-profits damages, representing the net present value of projected margin that Halcyon would have earned over the unexpired 2.8-year term of the Distribution Agre

40. In total, the Award provides for damages in the aggregate amount of $31,800,000 + $9,200,000 + $4,100,000 + $2,200,000 = $47,300,000.

41. The Award further provides for post-award interest at the California statutory rate of ten percent (10%) per annum pursuant to California Civil Code § 3289, accruing from the date of the Award (August 22, 2025) until full and final payment. As of the date of this declaration, post-award interest continues to accrue.

42. The Award is final and binding upon the parties. Pursuant to the ICDR Rules, the Award is not subject to appeal. The Distribution Agreement does not provide for any appeal mechanism or any expanded judicial review beyond that which is available under the Federal Arbitration Act, 9 U.S.C. §§ 1–16.

43. A true and correct copy of the Final Award dated August 22, 2025, is attached hereto as Exhibit C and is incorporated by reference herein.

9. Meridian's Refusal to Satisfy the Award

44. Despite the finality of the Award and its binding effect upon the parties, Meridian has refused to pay any portion of the $47,300,000 Award voluntarily. As of the date of this declaration, Meridian has made no payment whatsoever toward satisfaction of the Award.

45. On September 5, 2025, the law firm of Whitfield, Carruthers & Payne LLP, acting on behalf of Meridian Dynamics Inc. and Derek Calloway, sent a letter to counsel for Halcyon formally refusing to satisfy the Award and indicating Respondents' intent to move to vacate the Award under Section 10 of the Federal Arbitration Act, 9 U.S.C. § 10.

46. The September 5, 2025 letter from Whitfield, Carruthers & Payne LLP asserted two grounds for vacatur of the Award: (a) First, the letter alleged that the Tribunal exceeded its powers under 9 U.S.C. § 10(a)(4) by awarding lost-profits damages for the full unexpired term of the Distribution Agreement (the 2.8-year period from March 15, 2024, through December 31, 2026), contending that such damages were speculative

47. Halcyon believes both grounds asserted by Respondents are without merit. The lost-profits damages were calculated using a well-established and widely accepted methodology, were supported by extensive documentary evidence and expert testimony, and fell well within the Tribunal's broad discretion to fashion appropriate remedies under the Distribution Agreement and California law. With respect to the alleged evident

48. A true and correct copy of the September 5, 2025 letter from Whitfield, Carruthers & Payne LLP is attached hereto as Exhibit D and is incorporated by reference herein.

10. Derek Calloway's Personal Guaranty

49. As set forth above, Section 12.4 of the Distribution Agreement contains a personal guaranty executed by Derek Calloway, in his individual capacity, as Chief Executive Officer and sixty-two percent (62%) shareholder of Meridian. Pursuant to the personal guaranty, Mr. Calloway personally guaranteed certain obligations of Meridian under the Distribution Agreement, subject to an aggregate liability cap of $10,000,000

50. The Award was rendered against Meridian as the contracting party to the Distribution Agreement. The personal guaranty executed by Mr. Calloway under Section 12.4 supports enforcement against Mr. Calloway individually, up to the guaranty cap of $10,000,000, for Meridian's obligations under the Distribution Agreement and the Award.