1014-00006 · Meridian Design Systems, Inc · Analysis

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PRIVILEGED & CONFIDENTIAL — ATTORNEY-CLIENT COMMUNICATION

MEMORANDUM

November 7, 2025

FROM: Aaron Liu, Calderwood & Harkness LLP, One Market Plaza, Spear Tower, 42nd Floor, San Francisco, CA 94105

TO: Douglas Tran, General Counsel, Optiwave Semiconductor Corp., 4850 Great America Parkway, Suite 300, Santa Clara, CA 95054

RE: Brindoval PDK License Interoperability Analysis — Meridian PhotonX™ AEPL Qualification Risk

MATTER NO.: 1014-00006

COPIES: Conrad Ashby (Calderwood & Harkness LLP); Priya Venkatesh (VP of Engineering Operations, OWS)

CONFIDENTIALITY NOTICE: This memorandum is protected by the attorney-client privilege and the work product doctrine. It is prepared solely for the use of Optiwave Semiconductor Corp. ("OWS") and its authorized personnel and should not be disclosed to third parties without prior written consent of Calderwood & Harkness LLP. If you have received this memorandum in error, please notify the sender immediately and destroy all copies.

I. Executive Summary

You have asked us to analyze the interoperability requirements under Section 4.7 of the Brindoval PDK License Agreement (Ref. No. CFS-PDK-2023-US-0034), dated March 15, 2023, between Optiwave Semiconductor Corp. ("OWS") and Brindoval Foundry Services Ltd. ("Brindoval" or "CFS"), and to assess the risks arising from OWS's planned deployment of Meridian PhotonX™ in connection with the proposed renewal and expansion of the enterprise license agreement with Meridian Design Systems, Inc. (proposed Agreement No. MDS-ELA-2026-01192). This memorandum sets forth our analysis and recommendations.

Key Finding. Of the four Meridian EDA tools relevant to the proposed renewal, three are currently listed on Brindoval's Approved EDA Platform List (the "AEPL"): Meridian Marlowe Asset Management™, Meridian SignalForge™, and Meridian AnalogEdge™. A fourth tool already in use under the existing ELA — Meridian VerifyPro™ — either is listed on the AEPL or operates outside the scope of Section 4.7 due to the nature of its interaction with design data. However, Meridian PhotonX™ — a critical new module for OWS's silicon photonics design work and a central component of the proposed renewal — is not yet AEPL-qualified. Deployment of PhotonX™ with Brindoval PDKs prior to AEPL approval would place OWS in material breach of Section 4.7 of the Brindoval PDK License Agreement, exposing OWS to suspension or termination of PDK access, disruption to design and tapeout schedules, and significant financial and reputational harm.

Recommendation. We recommend that OWS negotiate specific contractual safeguards in the proposed renewal ELA with Meridian, including: (1) a conditional activation clause for PhotonX™ tied to AEPL qualification; (2) a fee-abatement or fee-deferral mechanism to protect OWS financially if Brindoval's qualification of PhotonX™ is delayed beyond Q1 2026; (3) a Meridian cooperation covenant and reporting obligation regarding AEPL qualification efforts; (4) a Meridian representation regarding PhotonX™ compatibility with industry-standard PDK formats; and (5) implementation of internal OWS access controls to prevent inadvertent use of PhotonX™ with Brindoval PDKs during the interim period. OWS should also consider proactive outreach to Brindoval regarding the anticipated PhotonX™ qualification timeline, coordinated with Calderwood & Harkness to avoid inadvertent disclosure of confidential terms of the Meridian renewal negotiation.

The balance of this memorandum provides the detailed analysis supporting these recommendations.

II. Background

A. OWS's Relationship with Brindoval Foundry Services Ltd.

Brindoval Foundry Services Ltd. ("Brindoval" or "CFS") is a limited company incorporated under the laws of Taiwan (ROC), with its principal offices in Hsinchu, Taiwan. Brindoval maintains a US subsidiary, Brindoval Foundry Services (US), Inc., located at 3100 De La Cruz Boulevard, Suite 200, Santa Clara, CA 95054. Brindoval is a leading semiconductor foundry specializing in advanced process nodes and custom fabrication services for the photonics and high-speed communications markets.

Brindoval serves as OWS's primary foundry partner for the manufacturing of high-speed optical transceiver integrated circuits and silicon photonics chiplets designed for deployment in data-center interconnect applications. This relationship is foundational to OWS's product roadmap and go-to-market strategy, and the continuity of OWS's access to Brindoval's manufacturing capabilities and process design kits is of critical importance to OWS's business operations.

The key contact at Brindoval's US subsidiary for purposes of this analysis is Henry Kuo, Director of Customer Design Enablement, who oversees the qualification of third-party EDA tools and the maintenance of the AEPL.

OWS and Brindoval executed the Brindoval PDK License Agreement (Ref. No. CFS-PDK-2023-US-0034) on March 15, 2023 (the "PDK License Agreement" or "CFS PDK Agreement"). Under this agreement, Brindoval granted OWS access to Brindoval's proprietary process design kits (PDKs) — including technology files, design rule decks, standard cell libraries, photonic component libraries, and compact models — for use in OWS's chip design workflows targeting Brindoval process nodes. The PDK License Agreement contains various obligations on OWS as licensee, including the interoperability and tool-qualification requirements set forth in Section 4.7, which is the primary focus of this memorandum.

B. OWS's Existing EDA Licensing Arrangement with Meridian

OWS is a party to an enterprise license agreement with Meridian Design Systems, Inc. ("Meridian"), denominated as Agreement No. MDS-ELA-2023-00487 (the "Original ELA"). The Original ELA was executed with an effective date of February 1, 2023, and provides for a three-year license term expiring January 31, 2026.

Under the Original ELA, OWS holds licenses for the following Meridian EDA tool suites:

• Meridian Marlowe Asset Management™ — A comprehensive digital integrated circuit design suite used for synthesis, place-and-route, timing closure, and physical design verification.

• Meridian SignalForge™ — A signal integrity analysis platform used for high-speed interface design, crosstalk analysis, and electromagnetic simulation.

• Meridian VerifyPro™ — A formal verification tool used for equivalence checking, property verification, and coverage analysis of digital and mixed-signal designs.

The current seat allocation under the Original ELA consists of 150 named-user seats and 40 floating (concurrent-use) seats, for a total of 190 seats across the three licensed products. The total contract value (TCV) of the Original ELA is $27.6 million over the three-year term, equating to approximately $9.2 million per year. These tools have been integral to OWS's design workflows since the inception of the Original ELA, and OWS's engineering organization has developed substantial expertise and investment around the Meridian platform.

C. The Proposed Renewal and Expansion

With the Original ELA approaching its January 31, 2026 expiration, OWS proposes to negotiate a five-year renewal and expansion of the Meridian enterprise license, to run from February 1, 2026 through January 31, 2031 (the "Renewal ELA"). The Renewal ELA would expand the licensed seat count to 280 total seats (comprising 220 named-user seats and 60 floating/concurrent-use seats) and would add two new Meridian product modules to the licensed portfolio:

• Meridian AnalogEdge™ — An analog and mixed-signal design platform providing schematic capture, circuit simulation, layout, and parasitic extraction capabilities tailored for high-performance analog circuits.

• Meridian PhotonX™ — A silicon photonics design kit integration module that provides photonic component modeling, waveguide simulation, electro-optical co-design, and PDK-integrated layout capabilities for silicon photonics chiplets.

Of these two new modules, PhotonX™ is of particular strategic importance to OWS. OWS's product roadmap increasingly centers on silicon photonics chiplets for data-center interconnects, and the PhotonX™ module would provide critical capabilities for designing these next-generation devices in a manner that integrates directly with foundry PDK data — including, most importantly, Brindoval's PDKs. The ability to use PhotonX™ in OWS's Brindoval-targeted design flows is, in our understanding, a primary driver of OWS's decision to include PhotonX™ in the Renewal ELA.

Meridian's initial renewal pricing quote, received by OWS on October 15, 2025, proposes a TCV of $71.5 million for the five-year term (approximately $14.3 million per year). OWS's internal target for the Renewal ELA is a TCV of $59.0 million ($11.8 million per year). The negotiation of pricing, along with the contractual safeguards discussed in this memorandum, will be a significant component of the renewal discussions. OWS's outside counsel for the Meridian renewal negotiation is Calderwood & Harkness LLP, and Meridian's outside counsel is Bexley Weir & Daly LLP.

III. Analysis of Section 4.7 of the Brindoval PDK License Agreement

A. Text and Scope of Section 4.7

Section 4.7 of the Brindoval PDK License Agreement (Ref. No. CFS-PDK-2023-US-0034) imposes an obligation on OWS, as the PDK licensee, to ensure that any third-party electronic design automation (EDA) tools used in conjunction with Brindoval's proprietary process design kits are listed on Brindoval's "Approved EDA Platform List" (the "AEPL"). The AEPL is a catalog maintained and periodically updated by Brindoval that identifies EDA platforms that Brindoval has independently validated for interoperability, data integrity, and functional compatibility with its process design kits.

The scope of Section 4.7 is broad. The provision applies to all EDA tools that "interface with, read from, write to, or otherwise interact with" Brindoval PDK data, including but not limited to technology files, process-specific design rule decks, standard cell libraries, photonic component libraries, and compact models. This expansive language is designed to capture the full range of EDA tool interactions with PDK data across the chip design workflow, from schematic capture and simulation through physical design, verification, and tapeout.

Critically, the compliance obligation is placed squarely on OWS as the licensee. It is not the responsibility of the EDA tool vendor (in this case, Meridian) to obtain or maintain AEPL listing — though, as a practical matter, Brindoval's qualification process requires the cooperation and participation of the EDA vendor. OWS bears the contractual risk if it deploys a non-AEPL-qualified tool in a manner that triggers Section 4.7.

The rationale behind Section 4.7 is well understood in the industry: foundry PDKs contain highly sensitive and proprietary process information, and the use of unvalidated EDA tools with that data creates risks of data corruption, design rule misinterpretation, yield degradation, and potential leakage of proprietary foundry process information. Brindoval's insistence on AEPL compliance is consistent with industry practice among Tier 1 foundries.

B. Consequences of Breach of Section 4.7

The use of a non-AEPL-approved EDA tool with Brindoval PDKs would constitute a material breach of the PDK License Agreement. The consequences of such a breach are significant and potentially severe:

(i) Cessation of Unauthorized Use. Brindoval may require OWS to immediately cease using the non-approved tool in conjunction with Brindoval PDK data, libraries, technology files, or design rule decks. This would effectively halt any design work performed using the non-compliant tool in Brindoval-targeted flows.

(ii) Suspension of PDK Access. Brindoval may suspend OWS's access to PDK updates, errata, and new process-node releases pending cure of the breach. Given the pace of foundry process development and the importance of up-to-date PDK data for design accuracy and yield optimization, a suspension of PDK access — even a temporary one — could have cascading effects on OWS's design and tapeout schedules.

(iii) Termination Rights. In the event of an uncured material breach, Brindoval may exercise its termination rights under the PDK License Agreement. Termination would result in the loss of OWS's access to all Brindoval PDKs, effectively severing OWS's ability to design for Brindoval process nodes until a new agreement could be negotiated — a process that could take months and would almost certainly involve less favorable terms.

Beyond these contractual remedies, a breach of Section 4.7 would also carry substantial operational and reputational consequences. A termination or extended suspension of PDK access would directly impact OWS's product development timelines, potentially delaying tapeouts and product launches by multiple quarters. OWS's data-center interconnect customers, who rely on predictable product delivery schedules, would be materially affected. Furthermore, any breach or dispute with Brindoval would risk damaging a critical foundry relationship that OWS has invested significantly in cultivating and maintaining. In an industry where foundry capacity is constrained and foundry relationships are a competitive differentiator, the reputational harm from a compliance failure should not be underestimated.

IV. Current AEPL Status of Meridian EDA Tools

We have reviewed the current version of Brindoval's Approved EDA Platform List, as well as relevant correspondence between OWS engineering personnel and Brindoval's Customer Design Enablement group, to assess the AEPL status of each Meridian EDA tool relevant to the Original ELA and the proposed Renewal ELA. Our findings are as follows.

A. Tools Currently on the AEPL

Three of the Meridian tools relevant to the proposed Renewal ELA are currently listed on the AEPL and present no interoperability concerns under Section 4.7:

Meridian Marlowe Asset Management™ (Digital IC Design Suite). Marlowe Asset Management™ has been listed on the AEPL for several years and was confirmed as a current AEPL-qualified platform as of the most recent AEPL update published in August 2025. OWS has used Marlowe Asset Management™ with Brindoval PDKs extensively under the Original ELA without any interoperability issues or Brindoval objections. No action is required with respect to Marlowe Asset Management™.

Meridian SignalForge™ (Signal Integrity). SignalForge™ is similarly listed on the AEPL, confirmed as of August 2025. OWS utilizes SignalForge™ in its high-speed interface design workflows, which include direct interaction with Brindoval PDK data for impedance modeling and crosstalk analysis. SignalForge™ is fully AEPL-compliant, and no action is required.

Meridian AnalogEdge™ (Analog/Mixed-Signal Design). AnalogEdge™ was added to the AEPL effective September 22, 2025, following completion of Brindoval's qualification process. As a recently qualified platform, AnalogEdge™ has not yet been extensively deployed by OWS in Brindoval design flows, but its AEPL listing resolves any Section 4.7 concerns. OWS may deploy AnalogEdge™ with Brindoval PDKs under the Renewal ELA without restriction. No further action is required.

B. Meridian VerifyPro™

The status of VerifyPro™ under Section 4.7 warrants brief discussion, though it does not present a practical compliance risk. VerifyPro™ is a formal verification tool whose primary function is equivalence checking and property verification of design netlists. In many design workflows, formal verification tools operate on abstracted design representations (e.g., RTL, gate-level netlists) rather than directly reading or interacting with PDK technology files, design rule decks, or component libraries. To the extent VerifyPro™'s interaction with Brindoval PDK data is indirect or nonexistent in OWS's workflows, it may fall outside the scope of Section 4.7's requirements.

In any event, VerifyPro™ has been in continuous use by OWS under the Original ELA since February 2023 — a period of nearly three years — without any objection from Brindoval. This long-standing usage pattern suggests either that VerifyPro™ is listed on the AEPL (and we have not identified any indication to the contrary) or that Brindoval has determined that VerifyPro™'s usage does not trigger Section 4.7. We do not consider VerifyPro™ to present a compliance risk, but we note this for completeness and recommend that OWS confirm VerifyPro™'s AEPL status with Henry Kuo as a housekeeping matter in connection with the Renewal ELA discussions.

C. Meridian PhotonX™ — Not Yet on the AEPL

Meridian PhotonX™ is not currently listed on Brindoval's Approved EDA Platform List. This is the central compliance issue identified in this memorandum.

Based on communications between OWS's VP of Engineering Operations, Priya Venkatesh, and Brindoval's Director of Customer Design Enablement, Henry Kuo, Brindoval's qualification of PhotonX™ for the AEPL is anticipated to be completed in Q1 2026 (i.e., by approximately March 31, 2026). However, this timeline is an estimate only, provided informally by Brindoval personnel, and is subject to Brindoval's internal qualification processes, scheduling priorities, and technical evaluation requirements. OWS does not have visibility into or control over Brindoval's internal qualification workflow, and there is no contractual obligation on Brindoval to qualify PhotonX™ by any specific date or at all.

The nature of PhotonX™ makes Section 4.7 compliance particularly critical. PhotonX™ is a silicon photonics design kit integration tool — its core functionality is specifically designed to interface directly with foundry PDK data, including photonic component libraries, process-specific design rules for photonic waveguides and modulators, compact models for electro-optical components, and integrated layout environments that read and write PDK-formatted data. Use of PhotonX™ with Brindoval PDKs will squarely and unambiguously trigger the interoperability requirements of Section 4.7. There is no reasonable argument that PhotonX™ usage could fall outside the scope of the provision, as there would be for a tool like VerifyPro™ that operates at a higher level of abstraction. If PhotonX™ is deployed against Brindoval PDKs before it is AEPL-qualified, OWS will be in breach of the PDK License Agreement.

V. Risk Assessment — Deployment of PhotonX™ Before AEPL Qualification

A. Timing Risk

The proposed Renewal ELA is structured to take effect on February 1, 2026 — the day immediately following expiration of the Original ELA. If PhotonX™ is included as a licensed product from the effective date of the Renewal ELA, OWS's engineering team will have access to the PhotonX™ module and may begin using it in design workflows immediately upon the effective date. The AEPL qualification of PhotonX™ is currently estimated for Q1 2026, meaning there is a potential gap — measured in days to weeks, or possibly longer if the qualification process is delayed — between the date OWS obtains access to PhotonX™ under the Renewal ELA and the date PhotonX™ becomes AEPL-qualified.

Even if OWS intends to restrict PhotonX™ usage to non-Brindoval design flows during this interim period, the practical risk of inadvertent or unauthorized use with Brindoval PDKs is significant. This risk is amplified by several factors:

(i) Brindoval is OWS's primary foundry partner. The vast majority of OWS's active design projects target Brindoval process nodes. There are few, if any, active OWS silicon photonics design flows that do not involve Brindoval PDKs.

(ii) The silicon photonics workflows for which PhotonX™ is intended are specifically developed for Brindoval process nodes. Engineers working on these programs will have natural incentive and workflow pressure to use PhotonX™ immediately upon availability, particularly if they perceive a competitive or schedule advantage from early adoption.

(iii) Informal or "exploratory" usage of PhotonX™ with Brindoval PDK data during the interim period — for example, to set up and validate design environments in advance of full deployment — would itself constitute a Section 4.7 violation. The provision does not distinguish between production-grade usage and exploratory or testing usage.

The timing risk is therefore not merely theoretical. It is a practical, operationally grounded concern that warrants both contractual and administrative mitigation.

B. Breach Exposure

Any use of PhotonX™ with Brindoval PDKs prior to AEPL approval — regardless of the scale, duration, or intent of such usage — would constitute a material breach of Section 4.7 of the PDK License Agreement. OWS would bear sole responsibility for this breach. Meridian Design Systems has no obligation under the Brindoval PDK License Agreement and is not a party to it. Meridian's delivery of PhotonX™ licenses to OWS does not, in itself, create any Brindoval compliance issue; the issue arises solely from OWS's use of the tool in conjunction with Brindoval PDK data.

The risk of discovery is not insignificant. Section 8.2 of the PDK License Agreement grants Brindoval the right to conduct periodic audits and technical reviews of OWS's design environment to verify compliance with the terms of the agreement, including the AEPL requirements of Section 4.7. These audits may be conducted upon reasonable notice, and Brindoval has exercised this right in the past with other customers, as we understand from industry contacts. A Brindoval audit discovering unauthorized PhotonX™ usage could trigger the full range of breach consequences described in Section III.B above, including cessation orders, PDK access suspension, and potential termination.

Furthermore, even absent a formal audit, Brindoval may become aware of OWS's use of PhotonX™ through other channels — for example, through technical support interactions, design review meetings, or tapeout submissions that reference PhotonX™-generated data. The silicon photonics design community is relatively small and technically sophisticated, and information about tool deployments tends to circulate among foundry and EDA personnel.

C. Financial and Operational Exposure

Beyond the breach risk itself, there is a distinct financial exposure associated with the timing gap between PhotonX™ license activation and AEPL qualification. If OWS pays for PhotonX™ licenses from the February 1, 2026 effective date of the Renewal ELA but cannot deploy the tool with Brindoval PDKs until AEPL qualification is obtained, OWS would be incurring license fees for a tool it cannot fully utilize in its primary — and, for silicon photonics, its only — design flows.

At the seat counts and aggregate pricing under discussion ($11.8 million to $14.3 million per year for the full suite of licensed products), the PhotonX™ component represents a meaningful portion of the total license value. While the exact allocation of fees to individual modules will depend on the final pricing structure negotiated for the Renewal ELA, it is reasonable to estimate that PhotonX™, as a specialized and strategically important module, will constitute a material share of the annual license cost. Paying for functionality that OWS cannot deploy due to a third-party qualification process outside OWS's control is an unacceptable financial outcome and should be addressed through the contractual mechanisms discussed in Section VI below.

Additionally, OWS faces opportunity cost exposure. Each month that PhotonX™ cannot be deployed in Brindoval-targeted silicon photonics workflows is a month of delayed design productivity, extended development timelines, and deferred competitive advantage. While this opportunity cost is difficult to quantify precisely, it underscores the importance of both expediting the AEPL qualification process and protecting OWS contractually in the event of delay.

VI. Recommendations — Contractual Safeguards in the Renewal ELA

Based on the foregoing analysis, we recommend that OWS pursue the following contractual safeguards in the negotiation of the Renewal ELA with Meridian Design Systems. These safeguards are designed to protect OWS from both the compliance risk associated with premature PhotonX™ deployment and the financial risk associated with delayed AEPL qualification. Each recommendation is discussed in detail below.

A. Conditional Activation Clause for PhotonX™

We recommend that the Renewal ELA include a provision specifying that OWS's obligation to pay license fees for the PhotonX™ module is conditioned upon, and shall not commence until, Meridian PhotonX™ has been added to Brindoval's Approved EDA Platform List. Under this approach, the effective license grant for PhotonX™ would be deferred until the AEPL qualification condition is satisfied, aligning OWS's payment obligations with its ability to derive value from the tool.

We recognize that Meridian may object to a full conditional activation structure, as it defers revenue recognition and introduces uncertainty into Meridian's financial planning for the Renewal ELA. As an alternative, we recommend negotiating a modified structure under which the PhotonX™ licenses are delivered to OWS at execution of the Renewal ELA, but OWS's use of PhotonX™ in conjunction with Brindoval PDKs (or any other PDKs subject to third-party interoperability approval requirements) is explicitly permitted only after AEPL qualification has been obtained. Under this alternative structure, Meridian would acknowledge the restriction and agree that OWS's delayed deployment of PhotonX™ pending AEPL approval does not constitute a breach of any minimum usage, seat utilization, or similar requirements in the Renewal ELA.

To illustrate the type of language we envision, we provide the following conceptual draft provision for discussion purposes:

"Notwithstanding the grant of license for Meridian PhotonX™ hereunder, Licensee's use of PhotonX™ in conjunction with any process design kits subject to third-party interoperability approval requirements (including, without limitation, the Brindoval Foundry Services Ltd. Approved EDA Platform List) shall be conditioned upon Licensee's receipt of such approval. Licensor acknowledges that Licensee's delayed deployment of PhotonX™ pending receipt of such approval shall not constitute underutilization, a failure to meet minimum usage thresholds, or a breach of any seat-utilization or deployment obligations, and shall not otherwise affect Licensee's rights hereunder."

This language is conceptual and will be refined and expanded in the formal redline of the Renewal ELA. We will circulate proposed contract language to OWS for review prior to inclusion in the redline.

B. Fee Abatement / Fee Deferral Mechanism

In addition to the conditional activation clause, we recommend that OWS negotiate a fee-abatement or fee-deferral mechanism to address the financial exposure if Brindoval's AEPL qualification of PhotonX™ is delayed beyond Q1 2026 or a specific agreed-upon date. We propose the following structure:

(i) Trigger Date. The fee-abatement mechanism would be triggered if AEPL qualification of PhotonX™ has not been obtained by March 31, 2026 — a date that corresponds to the end of Q1 2026 and aligns with the current Brindoval estimate for qualification completion.

(ii) Abatement Calculation. For each month (or portion thereof) following March 31, 2026 during which PhotonX™ remains un-qualified on the AEPL, OWS would receive a pro-rata reduction in the license fees attributable to the PhotonX™ component of the Renewal ELA. Alternatively, if Meridian prefers a deferral structure over an abatement, the PhotonX™ license fee component could be deferred to the first payment period following actual AEPL qualification, with no interest or penalties accruing during the deferral period.

(iii) Long-Stop Date. We further recommend that OWS seek to define a "Long-Stop Date" — we propose January 31, 2027, which is one year from the effective date of the Renewal ELA — by which, if AEPL qualification has still not been obtained, OWS may elect to remove PhotonX™ from the licensed products under the Renewal ELA and receive a corresponding reduction in the total contract value without penalty, termination fee, or other adverse consequence. This Long-Stop Date provides a reasonable outer boundary and protects OWS from an indefinite commitment to pay for functionality it cannot deploy.

This mechanism protects OWS from paying full license fees for functionality it cannot utilize due to circumstances outside its control. It also provides Meridian with an incentive to actively support the AEPL qualification process, as Meridian's revenue from PhotonX™ licenses will be directly tied to the completion of qualification.

C. Meridian Cooperation Obligation

We recommend that the Renewal ELA include a covenant requiring Meridian to use commercially reasonable efforts to cooperate with Brindoval's AEPL qualification process for PhotonX™. Specifically, the covenant should require Meridian to:

(i) Provide Brindoval, upon request, with such technical documentation, specifications, application programming interface (API) descriptions, and test-environment access as may be reasonably required for Brindoval to evaluate PhotonX™ for AEPL qualification.

(ii) Make available qualified Meridian engineering personnel to participate in Brindoval qualification testing, respond to Brindoval technical inquiries, and address any interoperability issues identified during the qualification process.

(iii) Not take any action that would impede, delay, or otherwise frustrate Brindoval's AEPL qualification of PhotonX™.

While Meridian cannot guarantee or control Brindoval's internal qualification timeline — and OWS should not expect a guarantee of a specific qualification date from Meridian — Meridian should be contractually obligated to actively participate in the process and to devote reasonable resources to facilitating qualification. This obligation should be expressed as a "commercially reasonable efforts" standard, which imposes a meaningful but not absolute obligation on Meridian.

In addition, we recommend including a reporting obligation requiring Meridian to provide OWS with quarterly written updates on the status of PhotonX™ AEPL qualification efforts, including a summary of interactions with Brindoval, any outstanding technical requirements or issues, and Meridian's good-faith estimate of the remaining timeline to qualification. These updates will enable OWS to monitor progress, plan its design workflows accordingly, and escalate with either Meridian or Brindoval if the process stalls.

D. Representation Regarding Interoperability

We recommend that OWS request that Meridian include a representation and warranty in the Renewal ELA to the effect that:

(i) PhotonX™ is designed to be compatible with industry-standard foundry PDK formats, including but not limited to the technology file formats, design rule specifications, and compact model standards commonly used by Tier 1 foundries.

(ii) As of the date of the Renewal ELA, Meridian is not aware of any technical impediment to AEPL qualification of PhotonX™ by Brindoval or any other major foundry maintaining an approved EDA platform list.

This representation serves two important functions. First, it gives OWS a contractual remedy — including potential indemnification or damages claims — if it subsequently emerges that PhotonX™ is fundamentally incompatible with Brindoval's qualification requirements due to a design deficiency or technical limitation that Meridian knew or should have known about at the time of the Renewal ELA. Second, it creates a commercial incentive for Meridian to conduct thorough internal due diligence on PhotonX™'s foundry compatibility before executing the Renewal ELA, reducing the likelihood of unpleasant surprises during the qualification process.

We note that Meridian may seek to qualify this representation with standard materiality or knowledge qualifiers. We would not object to reasonable qualifiers, but we would resist any effort to eliminate the representation entirely or to limit it to a general statement of intent rather than a specific factual assertion regarding known impediments.

E. Internal OWS Controls Pending AEPL Qualification

Independent of the contractual safeguards negotiated in the Renewal ELA with Meridian, we strongly recommend that OWS implement internal access controls restricting deployment of PhotonX™ in Brindoval-related design flows until AEPL qualification is confirmed in writing by Brindoval. These internal controls serve a dual purpose: they reduce the practical risk of inadvertent breach of Section 4.7, and they create a documented record of OWS's good-faith compliance efforts that can be presented to Brindoval in the event of an inquiry or audit.

We recommend the following specific measures:

(i) Designated Responsible Party. Priya Venkatesh, VP of Engineering Operations, should be designated as the responsible party for implementing, maintaining, and enforcing the PhotonX™ usage restriction during the interim period. This centralized accountability will ensure clear ownership and reduce the risk of gaps in enforcement.

(ii) License-Server Access Controls. OWS's IT and engineering operations teams should configure license-server access controls to segregate PhotonX™ usage from Brindoval PDK environments during the interim period. This could be accomplished through network segmentation, conditional license checkout rules, or other technical mechanisms that prevent PhotonX™ from being invoked in a design environment where Brindoval PDK data is present.

(iii) Written Policy. OWS should issue a written internal policy, disseminated to all relevant engineering personnel, specifying that PhotonX™ may not be used in conjunction with Brindoval PDK data, libraries, technology files, or design rule decks until further notice. The policy should explain the contractual basis for the restriction and the consequences of non-compliance.

(iv) Documentation. OWS should document these internal controls in writing, including the technical implementation details, the date of implementation, and ongoing compliance monitoring activities. This documentation should be retained in OWS's compliance files and be available for presentation to Brindoval upon request.

We recommend that OWS implement these controls promptly upon execution of the Renewal ELA and maintain them until Brindoval provides written confirmation that PhotonX™ has been added to the AEPL.

VII. Coordination with Brindoval

In addition to the contractual and internal-control measures described above, we recommend that OWS consider proactively communicating with Brindoval regarding the planned deployment of PhotonX™ and the anticipated AEPL qualification timeline. Specifically, OWS should consider reaching out to Henry Kuo, Director of Customer Design Enablement at Brindoval's US subsidiary, to:

(i) Inform Brindoval of OWS's intent to incorporate PhotonX™ into its silicon photonics design workflows and its desire to deploy PhotonX™ with Brindoval PDKs as soon as AEPL qualification is completed.

(ii) Inquire about the current status and expected timeline of Brindoval's AEPL qualification process for PhotonX™, and identify any actions OWS can take to facilitate or expedite the process.

(iii) Express OWS's commitment to compliance with Section 4.7 of the PDK License Agreement and its intention to refrain from deploying PhotonX™ with Brindoval PDKs until AEPL qualification is obtained.

A proactive approach has several advantages. It demonstrates OWS's good faith and its respect for the AEPL requirements, which strengthens the overall relationship with Brindoval. It may also facilitate Brindoval's prioritization of the PhotonX™ qualification process, as Brindoval will understand that an important customer — OWS — is actively waiting on the result. Finally, a proactive approach reduces the risk of an adversarial response if Brindoval becomes aware of OWS's plans through other channels (for example, through industry contacts or Meridian's own outreach to Brindoval).

However, any communications with Brindoval must be carefully coordinated with Calderwood & Harkness. It is essential that OWS avoid inadvertent disclosure of confidential terms of the Meridian renewal negotiation — including pricing, seat counts, or the specific contractual safeguards being negotiated — in its communications with Brindoval. The Meridian renewal discussions and the Brindoval PDK compliance matter involve overlapping subject matter, and OWS personnel should be briefed on the boundaries of appropriate disclosure before initiating outreach to Brindoval.

VIII. Summary of Recommendations

For ease of reference, we summarize our recommendations as follows:

1. Conditional Activation Clause. Include a provision in the Renewal ELA specifying that OWS's deployment of PhotonX™ with Brindoval PDKs (and any other PDKs subject to third-party interoperability approval requirements) is conditioned upon AEPL qualification. Meridian should acknowledge that delayed deployment does not constitute underutilization or breach.

2. Fee-Abatement Mechanism. Negotiate a pro-rata fee abatement or deferral for the PhotonX™ license fee component if AEPL qualification is not obtained by March 31, 2026, with a Long-Stop Date of January 31, 2027 by which OWS may elect to remove PhotonX™ from the Renewal ELA and receive a corresponding TCV reduction without penalty.

3. Meridian Cooperation Covenant. Require Meridian to use commercially reasonable efforts to cooperate with Brindoval's AEPL qualification process, including providing technical documentation, engineering support, and test access. Include a quarterly reporting obligation requiring Meridian to update OWS on qualification progress.

4. Meridian Representation. Obtain a Meridian representation and warranty that PhotonX™ is designed for industry-standard PDK-format compatibility and that Meridian is not aware of any technical impediment to AEPL qualification as of the date of the Renewal ELA.

5. Internal OWS Access Controls. Implement technical and administrative controls segregating PhotonX™ from Brindoval PDK environments pending AEPL approval, with Priya Venkatesh designated as the responsible party. Document all controls in writing for compliance purposes.

6. Proactive Coordination with Brindoval. Initiate proactive outreach to Henry Kuo at Brindoval regarding the PhotonX™ AEPL qualification timeline, managed in consultation with Calderwood & Harkness to avoid inadvertent disclosure of Meridian renewal terms.

IX. Next Steps

Based on the analysis and recommendations set forth in this memorandum, we propose the following next steps:

1. Redline Preparation. Aaron Liu and Monica Reyes of Calderwood & Harkness will incorporate the recommended contractual safeguards — including the conditional activation clause, fee-abatement mechanism, cooperation covenant, and interoperability representation — into Calderwood & Harkness's first redline of the proposed Renewal ELA. Our target delivery date for the redline to Meridian's outside counsel, Bexley Weir & Daly LLP, is November 15, 2025.

2. OWS Confirmation of Brindoval Outreach Approach. Douglas Tran and Priya Venkatesh should confer internally and confirm OWS's desired approach regarding proactive outreach to Henry Kuo at Brindoval. If OWS elects to proceed with outreach, Calderwood & Harkness will assist in preparing talking points and advising on the scope of appropriate disclosure.

3. Proposed Contract Language. Calderwood & Harkness will prepare proposed contract language for the conditional activation clause and fee-abatement mechanism, circulated to OWS for review and comment prior to inclusion in the formal redline. We anticipate delivering this proposed language to Douglas Tran by November 11, 2025.

4. Internal Controls Implementation. Upon OWS's confirmation of the approach, Priya Venkatesh should begin coordinating with OWS IT and engineering operations to plan the implementation of the internal access controls described in Section VI.E, so that these controls are in place by the effective date of the Renewal ELA.

Any questions regarding this memorandum or the analysis set forth herein should be directed to the undersigned at the contact information below.

Respectfully submitted,

CALDERWOOD & HARKNESS LLP

By: ________

Aaron Liu Lead Associate One Market Plaza, Spear Tower, 42nd Floor San Francisco, CA 94105 Telephone: (415) 555-7200

Email: a.liu@calderwoodharkness.com

Matter No. 1014-00006

PRIVILEGED & CONFIDENTIAL — ATTORNEY-CLIENT COMMUNICATION
MEMORANDUM
November 7, 2025
FROM: Aaron Liu, Calderwood & Harkness LLP, One Market Plaza, Spear Tower, 42nd Floor, San Francisco, CA 94105
TO: Douglas Tran, General Counsel, Optiwave Semiconductor Corp., 4850 Great America Parkway, Suite 300, Santa Clara, CA 95054
RE: Brindoval PDK License Interoperability Analysis — Meridian PhotonX™ AEPL Qualification Risk
MATTER NO.: 1014-00006
COPIES: Conrad Ashby (Calderwood & Harkness LLP); Priya Venkatesh (VP of Engineering Operations, OWS)
CONFIDENTIALITY NOTICE: This memorandum is protected by the attorney-client privilege and the work product doctrine. It is prepared solely for the use of Optiwave Semiconductor Corp. ("OWS") and its authorized personnel and should not be disclosed to third parties without prior written consent of Calderwood & Harkness LLP. If you have received this memorandum in error, please notify the sender immediately and destroy all copies.
I. Executive Summary
You have asked us to analyze the interoperability requirements under Section 4.7 of the Brindoval PDK License Agreement (Ref. No. CFS-PDK-2023-US-0034), dated March 15, 2023, between Optiwave Semiconductor Corp. ("OWS") and Brindoval Foundry Services Ltd. ("Brindoval" or "CFS"), and to assess the risks arising from OWS's planned deployment of Meridian PhotonX™ in connection with the proposed renewal and expansion of the enterprise license agreement with Meridian Design Systems, Inc. (proposed Agreement No. MDS-ELA-2026-01192). This memorandum sets forth our analysis and recommendations.
Key Finding. Of the four Meridian EDA tools relevant to the proposed renewal, three are currently listed on Brindoval's Approved EDA Platform List (the "AEPL"): Meridian Marlowe Asset Management™, Meridian SignalForge™, and Meridian AnalogEdge™. A fourth tool already in use under the existing ELA — Meridian VerifyPro™ — either is listed on the AEPL or operates outside the scope of Section 4.7 due to the nature of its interaction with design data. However, Meridian PhotonX™ — a critical new module for OWS's silicon photonics design work and a central component of the proposed renewal — is not yet AEPL-qualified. Deployment of PhotonX™ with Brindoval PDKs prior to AEPL approval would place OWS in material breach of Section 4.7 of the Brindoval PDK License Agreement, exposing OWS to suspension or termination of PDK access, disruption to design and tapeout schedules, and significant financial and reputational harm.
Recommendation. We recommend that OWS negotiate specific contractual safeguards in the proposed renewal ELA with Meridian, including: (1) a conditional activation clause for PhotonX™ tied to AEPL qualification; (2) a fee-abatement or fee-deferral mechanism to protect OWS financially if Brindoval's qualification of PhotonX™ is delayed beyond Q1 2026; (3) a Meridian cooperation covenant and reporting obligation regarding AEPL qualification efforts; (4) a Meridian representation regarding PhotonX™ compatibility with industry-standard PDK formats; and (5) implementation of internal OWS access controls to prevent inadvertent use of PhotonX™ with Brindoval PDKs during the interim period. OWS should also consider proactive outreach to Brindoval regarding the anticipated PhotonX™ qualification timeline, coordinated with Calderwood & Harkness to avoid inadvertent disclosure of confidential terms of the Meridian renewal negotiation.
The balance of this memorandum provides the detailed analysis supporting these recommendations.
II. Background
A. OWS's Relationship with Brindoval Foundry Services Ltd.
Brindoval Foundry Services Ltd. ("Brindoval" or "CFS") is a limited company incorporated under the laws of Taiwan (ROC), with its principal offices in Hsinchu, Taiwan. Brindoval maintains a US subsidiary, Brindoval Foundry Services (US), Inc., located at 3100 De La Cruz Boulevard, Suite 200, Santa Clara, CA 95054. Brindoval is a leading semiconductor foundry specializing in advanced process nodes and custom fabrication services for the photonics and high-speed communications markets.
Brindoval serves as OWS's primary foundry partner for the manufacturing of high-speed optical transceiver integrated circuits and silicon photonics chiplets designed for deployment in data-center interconnect applications. This relationship is foundational to OWS's product roadmap and go-to-market strategy, and the continuity of OWS's access to Brindoval's manufacturing capabilities and process design kits is of critical importance to OWS's business operations.
The key contact at Brindoval's US subsidiary for purposes of this analysis is Henry Kuo, Director of Customer Design Enablement, who oversees the qualification of third-party EDA tools and the maintenance of the AEPL.
OWS and Brindoval executed the Brindoval PDK License Agreement (Ref. No. CFS-PDK-2023-US-0034) on March 15, 2023 (the "PDK License Agreement" or "CFS PDK Agreement"). Under this agreement, Brindoval granted OWS access to Brindoval's proprietary process design kits (PDKs) — including technology files, design rule decks, standard cell libraries, photonic component libraries, and compact models — for use in OWS's chip design workflows targeting Brindoval process nodes. The PDK License Agreement contains various obligations on OWS as licensee, including the interoperability and tool-qualification requirements set forth in Section 4.7, which is the primary focus of this memorandum.
B. OWS's Existing EDA Licensing Arrangement with Meridian
OWS is a party to an enterprise license agreement with Meridian Design Systems, Inc. ("Meridian"), denominated as Agreement No. MDS-ELA-2023-00487 (the "Original ELA"). The Original ELA was executed with an effective date of February 1, 2023, and provides for a three-year license term expiring January 31, 2026.
Under the Original ELA, OWS holds licenses for the following Meridian EDA tool suites:
• Meridian Marlowe Asset Management™ — A comprehensive digital integrated circuit design suite used for synthesis, place-and-route, timing closure, and physical design verification.
• Meridian SignalForge™ — A signal integrity analysis platform used for high-speed interface design, crosstalk analysis, and electromagnetic simulation.
• Meridian VerifyPro™ — A formal verification tool used for equivalence checking, property verification, and coverage analysis of digital and mixed-signal designs.
The current seat allocation under the Original ELA consists of 150 named-user seats and 40 floating (concurrent-use) seats, for a total of 190 seats across the three licensed products. The total contract value (TCV) of the Original ELA is $27.6 million over the three-year term, equating to approximately $9.2 million per year. These tools have been integral to OWS's design workflows since the inception of the Original ELA, and OWS's engineering organization has developed substantial expertise and investment around the Meridian platform.
C. The Proposed Renewal and Expansion
With the Original ELA approaching its January 31, 2026 expiration, OWS proposes to negotiate a five-year renewal and expansion of the Meridian enterprise license, to run from February 1, 2026 through January 31, 2031 (the "Renewal ELA"). The Renewal ELA would expand the licensed seat count to 280 total seats (comprising 220 named-user seats and 60 floating/concurrent-use seats) and would add two new Meridian product modules to the licensed portfolio:
• Meridian AnalogEdge™ — An analog and mixed-signal design platform providing schematic capture, circuit simulation, layout, and parasitic extraction capabilities tailored for high-performance analog circuits.
• Meridian PhotonX™ — A silicon photonics design kit integration module that provides photonic component modeling, waveguide simulation, electro-optical co-design, and PDK-integrated layout capabilities for silicon photonics chiplets.
Of these two new modules, PhotonX™ is of particular strategic importance to OWS. OWS's product roadmap increasingly centers on silicon photonics chiplets for data-center interconnects, and the PhotonX™ module would provide critical capabilities for designing these next-generation devices in a manner that integrates directly with foundry PDK data — including, most importantly, Brindoval's PDKs. The ability to use PhotonX™ in OWS's Brindoval-targeted design flows is, in our understanding, a primary driver of OWS's decision to include PhotonX™ in the Renewal ELA.
Meridian's initial renewal pricing quote, received by OWS on October 15, 2025, proposes a TCV of $71.5 million for the five-year term (approximately $14.3 million per year). OWS's internal target for the Renewal ELA is a TCV of $59.0 million ($11.8 million per year). The negotiation of pricing, along with the contractual safeguards discussed in this memorandum, will be a significant component of the renewal discussions. OWS's outside counsel for the Meridian renewal negotiation is Calderwood & Harkness LLP, and Meridian's outside counsel is Bexley Weir & Daly LLP.
III. Analysis of Section 4.7 of the Brindoval PDK License Agreement
A. Text and Scope of Section 4.7
Section 4.7 of the Brindoval PDK License Agreement (Ref. No. CFS-PDK-2023-US-0034) imposes an obligation on OWS, as the PDK licensee, to ensure that any third-party electronic design automation (EDA) tools used in conjunction with Brindoval's proprietary process design kits are listed on Brindoval's "Approved EDA Platform List" (the "AEPL"). The AEPL is a catalog maintained and periodically updated by Brindoval that identifies EDA platforms that Brindoval has independently validated for interoperability, data integrity, and functional compatibility with its process design kits.
The scope of Section 4.7 is broad. The provision applies to all EDA tools that "interface with, read from, write to, or otherwise interact with" Brindoval PDK data, including but not limited to technology files, process-specific design rule decks, standard cell libraries, photonic component libraries, and compact models. This expansive language is designed to capture the full range of EDA tool interactions with PDK data across the chip design workflow, from schematic capture and simulation through physical design, verification, and tapeout.
Critically, the compliance obligation is placed squarely on OWS as the licensee. It is not the responsibility of the EDA tool vendor (in this case, Meridian) to obtain or maintain AEPL listing — though, as a practical matter, Brindoval's qualification process requires the cooperation and participation of the EDA vendor. OWS bears the contractual risk if it deploys a non-AEPL-qualified tool in a manner that triggers Section 4.7.
The rationale behind Section 4.7 is well understood in the industry: foundry PDKs contain highly sensitive and proprietary process information, and the use of unvalidated EDA tools with that data creates risks of data corruption, design rule misinterpretation, yield degradation, and potential leakage of proprietary foundry process information. Brindoval's insistence on AEPL compliance is consistent with industry practice among Tier 1 foundries.
B. Consequences of Breach of Section 4.7
The use of a non-AEPL-approved EDA tool with Brindoval PDKs would constitute a material breach of the PDK License Agreement. The consequences of such a breach are significant and potentially severe:
(i) Cessation of Unauthorized Use. Brindoval may require OWS to immediately cease using the non-approved tool in conjunction with Brindoval PDK data, libraries, technology files, or design rule decks. This would effectively halt any design work performed using the non-compliant tool in Brindoval-targeted flows.
(ii) Suspension of PDK Access. Brindoval may suspend OWS's access to PDK updates, errata, and new process-node releases pending cure of the breach. Given the pace of foundry process development and the importance of up-to-date PDK data for design accuracy and yield optimization, a suspension of PDK access — even a temporary one — could have cascading effects on OWS's design and tapeout schedules.
(iii) Termination Rights. In the event of an uncured material breach, Brindoval may exercise its termination rights under the PDK License Agreement. Termination would result in the loss of OWS's access to all Brindoval PDKs, effectively severing OWS's ability to design for Brindoval process nodes until a new agreement could be negotiated — a process that could take months and would almost certainly involve less favorable terms.
Beyond these contractual remedies, a breach of Section 4.7 would also carry substantial operational and reputational consequences. A termination or extended suspension of PDK access would directly impact OWS's product development timelines, potentially delaying tapeouts and product launches by multiple quarters. OWS's data-center interconnect customers, who rely on predictable product delivery schedules, would be materially affected. Furthermore, any breach or dispute with Brindoval would risk damaging a critical foundry relationship that OWS has invested significantly in cultivating and maintaining. In an industry where foundry capacity is constrained and foundry relationships are a competitive differentiator, the reputational harm from a compliance failure should not be underestimated.
IV. Current AEPL Status of Meridian EDA Tools
We have reviewed the current version of Brindoval's Approved EDA Platform List, as well as relevant correspondence between OWS engineering personnel and Brindoval's Customer Design Enablement group, to assess the AEPL status of each Meridian EDA tool relevant to the Original ELA and the proposed Renewal ELA. Our findings are as follows.
A. Tools Currently on the AEPL
Three of the Meridian tools relevant to the proposed Renewal ELA are currently listed on the AEPL and present no interoperability concerns under Section 4.7:
Meridian Marlowe Asset Management™ (Digital IC Design Suite). Marlowe Asset Management™ has been listed on the AEPL for several years and was confirmed as a current AEPL-qualified platform as of the most recent AEPL update published in August 2025. OWS has used Marlowe Asset Management™ with Brindoval PDKs extensively under the Original ELA without any interoperability issues or Brindoval objections. No action is required with respect to Marlowe Asset Management™.
Meridian SignalForge™ (Signal Integrity). SignalForge™ is similarly listed on the AEPL, confirmed as of August 2025. OWS utilizes SignalForge™ in its high-speed interface design workflows, which include direct interaction with Brindoval PDK data for impedance modeling and crosstalk analysis. SignalForge™ is fully AEPL-compliant, and no action is required.
Meridian AnalogEdge™ (Analog/Mixed-Signal Design). AnalogEdge™ was added to the AEPL effective September 22, 2025, following completion of Brindoval's qualification process. As a recently qualified platform, AnalogEdge™ has not yet been extensively deployed by OWS in Brindoval design flows, but its AEPL listing resolves any Section 4.7 concerns. OWS may deploy AnalogEdge™ with Brindoval PDKs under the Renewal ELA without restriction. No further action is required.
B. Meridian VerifyPro™
The status of VerifyPro™ under Section 4.7 warrants brief discussion, though it does not present a practical compliance risk. VerifyPro™ is a formal verification tool whose primary function is equivalence checking and property verification of design netlists. In many design workflows, formal verification tools operate on abstracted design representations (e.g., RTL, gate-level netlists) rather than directly reading or interacting with PDK technology files, design rule decks, or component libraries. To the extent VerifyPro™'s interaction with Brindoval PDK data is indirect or nonexistent in OWS's workflows, it may fall outside the scope of Section 4.7's requirements.
In any event, VerifyPro™ has been in continuous use by OWS under the Original ELA since February 2023 — a period of nearly three years — without any objection from Brindoval. This long-standing usage pattern suggests either that VerifyPro™ is listed on the AEPL (and we have not identified any indication to the contrary) or that Brindoval has determined that VerifyPro™'s usage does not trigger Section 4.7. We do not consider VerifyPro™ to present a compliance risk, but we note this for completeness and recommend that OWS confirm VerifyPro™'s AEPL status with Henry Kuo as a housekeeping matter in connection with the Renewal ELA discussions.
C. Meridian PhotonX™ — Not Yet on the AEPL
Meridian PhotonX™ is not currently listed on Brindoval's Approved EDA Platform List. This is the central compliance issue identified in this memorandum.
Based on communications between OWS's VP of Engineering Operations, Priya Venkatesh, and Brindoval's Director of Customer Design Enablement, Henry Kuo, Brindoval's qualification of PhotonX™ for the AEPL is anticipated to be completed in Q1 2026 (i.e., by approximately March 31, 2026). However, this timeline is an estimate only, provided informally by Brindoval personnel, and is subject to Brindoval's internal qualification processes, scheduling priorities, and technical evaluation requirements. OWS does not have visibility into or control over Brindoval's internal qualification workflow, and there is no contractual obligation on Brindoval to qualify PhotonX™ by any specific date or at all.
The nature of PhotonX™ makes Section 4.7 compliance particularly critical. PhotonX™ is a silicon photonics design kit integration tool — its core functionality is specifically designed to interface directly with foundry PDK data, including photonic component libraries, process-specific design rules for photonic waveguides and modulators, compact models for electro-optical components, and integrated layout environments that read and write PDK-formatted data. Use of PhotonX™ with Brindoval PDKs will squarely and unambiguously trigger the interoperability requirements of Section 4.7. There is no reasonable argument that PhotonX™ usage could fall outside the scope of the provision, as there would be for a tool like VerifyPro™ that operates at a higher level of abstraction. If PhotonX™ is deployed against Brindoval PDKs before it is AEPL-qualified, OWS will be in breach of the PDK License Agreement.
V. Risk Assessment — Deployment of PhotonX™ Before AEPL Qualification
A. Timing Risk
The proposed Renewal ELA is structured to take effect on February 1, 2026 — the day immediately following expiration of the Original ELA. If PhotonX™ is included as a licensed product from the effective date of the Renewal ELA, OWS's engineering team will have access to the PhotonX™ module and may begin using it in design workflows immediately upon the effective date. The AEPL qualification of PhotonX™ is currently estimated for Q1 2026, meaning there is a potential gap — measured in days to weeks, or possibly longer if the qualification process is delayed — between the date OWS obtains access to PhotonX™ under the Renewal ELA and the date PhotonX™ becomes AEPL-qualified.
Even if OWS intends to restrict PhotonX™ usage to non-Brindoval design flows during this interim period, the practical risk of inadvertent or unauthorized use with Brindoval PDKs is significant. This risk is amplified by several factors:
(i) Brindoval is OWS's primary foundry partner. The vast majority of OWS's active design projects target Brindoval process nodes. There are few, if any, active OWS silicon photonics design flows that do not involve Brindoval PDKs.
(ii) The silicon photonics workflows for which PhotonX™ is intended are specifically developed for Brindoval process nodes. Engineers working on these programs will have natural incentive and workflow pressure to use PhotonX™ immediately upon availability, particularly if they perceive a competitive or schedule advantage from early adoption.
(iii) Informal or "exploratory" usage of PhotonX™ with Brindoval PDK data during the interim period — for example, to set up and validate design environments in advance of full deployment — would itself constitute a Section 4.7 violation. The provision does not distinguish between production-grade usage and exploratory or testing usage.
The timing risk is therefore not merely theoretical. It is a practical, operationally grounded concern that warrants both contractual and administrative mitigation.
B. Breach Exposure
Any use of PhotonX™ with Brindoval PDKs prior to AEPL approval — regardless of the scale, duration, or intent of such usage — would constitute a material breach of Section 4.7 of the PDK License Agreement. OWS would bear sole responsibility for this breach. Meridian Design Systems has no obligation under the Brindoval PDK License Agreement and is not a party to it. Meridian's delivery of PhotonX™ licenses to OWS does not, in itself, create any Brindoval compliance issue; the issue arises solely from OWS's use of the tool in conjunction with Brindoval PDK data.
The risk of discovery is not insignificant. Section 8.2 of the PDK License Agreement grants Brindoval the right to conduct periodic audits and technical reviews of OWS's design environment to verify compliance with the terms of the agreement, including the AEPL requirements of Section 4.7. These audits may be conducted upon reasonable notice, and Brindoval has exercised this right in the past with other customers, as we understand from industry contacts. A Brindoval audit discovering unauthorized PhotonX™ usage could trigger the full range of breach consequences described in Section III.B above, including cessation orders, PDK access suspension, and potential termination.
Furthermore, even absent a formal audit, Brindoval may become aware of OWS's use of PhotonX™ through other channels — for example, through technical support interactions, design review meetings, or tapeout submissions that reference PhotonX™-generated data. The silicon photonics design community is relatively small and technically sophisticated, and information about tool deployments tends to circulate among foundry and EDA personnel.
C. Financial and Operational Exposure
Beyond the breach risk itself, there is a distinct financial exposure associated with the timing gap between PhotonX™ license activation and AEPL qualification. If OWS pays for PhotonX™ licenses from the February 1, 2026 effective date of the Renewal ELA but cannot deploy the tool with Brindoval PDKs until AEPL qualification is obtained, OWS would be incurring license fees for a tool it cannot fully utilize in its primary — and, for silicon photonics, its only — design flows.
At the seat counts and aggregate pricing under discussion ($11.8 million to $14.3 million per year for the full suite of licensed products), the PhotonX™ component represents a meaningful portion of the total license value. While the exact allocation of fees to individual modules will depend on the final pricing structure negotiated for the Renewal ELA, it is reasonable to estimate that PhotonX™, as a specialized and strategically important module, will constitute a material share of the annual license cost. Paying for functionality that OWS cannot deploy due to a third-party qualification process outside OWS's control is an unacceptable financial outcome and should be addressed through the contractual mechanisms discussed in Section VI below.
Additionally, OWS faces opportunity cost exposure. Each month that PhotonX™ cannot be deployed in Brindoval-targeted silicon photonics workflows is a month of delayed design productivity, extended development timelines, and deferred competitive advantage. While this opportunity cost is difficult to quantify precisely, it underscores the importance of both expediting the AEPL qualification process and protecting OWS contractually in the event of delay.
VI. Recommendations — Contractual Safeguards in the Renewal ELA
Based on the foregoing analysis, we recommend that OWS pursue the following contractual safeguards in the negotiation of the Renewal ELA with Meridian Design Systems. These safeguards are designed to protect OWS from both the compliance risk associated with premature PhotonX™ deployment and the financial risk associated with delayed AEPL qualification. Each recommendation is discussed in detail below.
A. Conditional Activation Clause for PhotonX™
We recommend that the Renewal ELA include a provision specifying that OWS's obligation to pay license fees for the PhotonX™ module is conditioned upon, and shall not commence until, Meridian PhotonX™ has been added to Brindoval's Approved EDA Platform List. Under this approach, the effective license grant for PhotonX™ would be deferred until the AEPL qualification condition is satisfied, aligning OWS's payment obligations with its ability to derive value from the tool.
We recognize that Meridian may object to a full conditional activation structure, as it defers revenue recognition and introduces uncertainty into Meridian's financial planning for the Renewal ELA. As an alternative, we recommend negotiating a modified structure under which the PhotonX™ licenses are delivered to OWS at execution of the Renewal ELA, but OWS's use of PhotonX™ in conjunction with Brindoval PDKs (or any other PDKs subject to third-party interoperability approval requirements) is explicitly permitted only after AEPL qualification has been obtained. Under this alternative structure, Meridian would acknowledge the restriction and agree that OWS's delayed deployment of PhotonX™ pending AEPL approval does not constitute a breach of any minimum usage, seat utilization, or similar requirements in the Renewal ELA.
To illustrate the type of language we envision, we provide the following conceptual draft provision for discussion purposes:
"Notwithstanding the grant of license for Meridian PhotonX™ hereunder, Licensee's use of PhotonX™ in conjunction with any process design kits subject to third-party interoperability approval requirements (including, without limitation, the Brindoval Foundry Services Ltd. Approved EDA Platform List) shall be conditioned upon Licensee's receipt of such approval. Licensor acknowledges that Licensee's delayed deployment of PhotonX™ pending receipt of such approval shall not constitute underutilization, a failure to meet minimum usage thresholds, or a breach of any seat-utilization or deployment obligations, and shall not otherwise affect Licensee's rights hereunder."
This language is conceptual and will be refined and expanded in the formal redline of the Renewal ELA. We will circulate proposed contract language to OWS for review prior to inclusion in the redline.
B. Fee Abatement / Fee Deferral Mechanism
In addition to the conditional activation clause, we recommend that OWS negotiate a fee-abatement or fee-deferral mechanism to address the financial exposure if Brindoval's AEPL qualification of PhotonX™ is delayed beyond Q1 2026 or a specific agreed-upon date. We propose the following structure:
(i) Trigger Date. The fee-abatement mechanism would be triggered if AEPL qualification of PhotonX™ has not been obtained by March 31, 2026 — a date that corresponds to the end of Q1 2026 and aligns with the current Brindoval estimate for qualification completion.
(ii) Abatement Calculation. For each month (or portion thereof) following March 31, 2026 during which PhotonX™ remains un-qualified on the AEPL, OWS would receive a pro-rata reduction in the license fees attributable to the PhotonX™ component of the Renewal ELA. Alternatively, if Meridian prefers a deferral structure over an abatement, the PhotonX™ license fee component could be deferred to the first payment period following actual AEPL qualification, with no interest or penalties accruing during the deferral period.
(iii) Long-Stop Date. We further recommend that OWS seek to define a "Long-Stop Date" — we propose January 31, 2027, which is one year from the effective date of the Renewal ELA — by which, if AEPL qualification has still not been obtained, OWS may elect to remove PhotonX™ from the licensed products under the Renewal ELA and receive a corresponding reduction in the total contract value without penalty, termination fee, or other adverse consequence. This Long-Stop Date provides a reasonable outer boundary and protects OWS from an indefinite commitment to pay for functionality it cannot deploy.
This mechanism protects OWS from paying full license fees for functionality it cannot utilize due to circumstances outside its control. It also provides Meridian with an incentive to actively support the AEPL qualification process, as Meridian's revenue from PhotonX™ licenses will be directly tied to the completion of qualification.
C. Meridian Cooperation Obligation
We recommend that the Renewal ELA include a covenant requiring Meridian to use commercially reasonable efforts to cooperate with Brindoval's AEPL qualification process for PhotonX™. Specifically, the covenant should require Meridian to:
(i) Provide Brindoval, upon request, with such technical documentation, specifications, application programming interface (API) descriptions, and test-environment access as may be reasonably required for Brindoval to evaluate PhotonX™ for AEPL qualification.
(ii) Make available qualified Meridian engineering personnel to participate in Brindoval qualification testing, respond to Brindoval technical inquiries, and address any interoperability issues identified during the qualification process.
(iii) Not take any action that would impede, delay, or otherwise frustrate Brindoval's AEPL qualification of PhotonX™.
While Meridian cannot guarantee or control Brindoval's internal qualification timeline — and OWS should not expect a guarantee of a specific qualification date from Meridian — Meridian should be contractually obligated to actively participate in the process and to devote reasonable resources to facilitating qualification. This obligation should be expressed as a "commercially reasonable efforts" standard, which imposes a meaningful but not absolute obligation on Meridian.
In addition, we recommend including a reporting obligation requiring Meridian to provide OWS with quarterly written updates on the status of PhotonX™ AEPL qualification efforts, including a summary of interactions with Brindoval, any outstanding technical requirements or issues, and Meridian's good-faith estimate of the remaining timeline to qualification. These updates will enable OWS to monitor progress, plan its design workflows accordingly, and escalate with either Meridian or Brindoval if the process stalls.
D. Representation Regarding Interoperability
We recommend that OWS request that Meridian include a representation and warranty in the Renewal ELA to the effect that:
(i) PhotonX™ is designed to be compatible with industry-standard foundry PDK formats, including but not limited to the technology file formats, design rule specifications, and compact model standards commonly used by Tier 1 foundries.
(ii) As of the date of the Renewal ELA, Meridian is not aware of any technical impediment to AEPL qualification of PhotonX™ by Brindoval or any other major foundry maintaining an approved EDA platform list.
This representation serves two important functions. First, it gives OWS a contractual remedy — including potential indemnification or damages claims — if it subsequently emerges that PhotonX™ is fundamentally incompatible with Brindoval's qualification requirements due to a design deficiency or technical limitation that Meridian knew or should have known about at the time of the Renewal ELA. Second, it creates a commercial incentive for Meridian to conduct thorough internal due diligence on PhotonX™'s foundry compatibility before executing the Renewal ELA, reducing the likelihood of unpleasant surprises during the qualification process.
We note that Meridian may seek to qualify this representation with standard materiality or knowledge qualifiers. We would not object to reasonable qualifiers, but we would resist any effort to eliminate the representation entirely or to limit it to a general statement of intent rather than a specific factual assertion regarding known impediments.
E. Internal OWS Controls Pending AEPL Qualification
Independent of the contractual safeguards negotiated in the Renewal ELA with Meridian, we strongly recommend that OWS implement internal access controls restricting deployment of PhotonX™ in Brindoval-related design flows until AEPL qualification is confirmed in writing by Brindoval. These internal controls serve a dual purpose: they reduce the practical risk of inadvertent breach of Section 4.7, and they create a documented record of OWS's good-faith compliance efforts that can be presented to Brindoval in the event of an inquiry or audit.
We recommend the following specific measures:
(i) Designated Responsible Party. Priya Venkatesh, VP of Engineering Operations, should be designated as the responsible party for implementing, maintaining, and enforcing the PhotonX™ usage restriction during the interim period. This centralized accountability will ensure clear ownership and reduce the risk of gaps in enforcement.
(ii) License-Server Access Controls. OWS's IT and engineering operations teams should configure license-server access controls to segregate PhotonX™ usage from Brindoval PDK environments during the interim period. This could be accomplished through network segmentation, conditional license checkout rules, or other technical mechanisms that prevent PhotonX™ from being invoked in a design environment where Brindoval PDK data is present.
(iii) Written Policy. OWS should issue a written internal policy, disseminated to all relevant engineering personnel, specifying that PhotonX™ may not be used in conjunction with Brindoval PDK data, libraries, technology files, or design rule decks until further notice. The policy should explain the contractual basis for the restriction and the consequences of non-compliance.
(iv) Documentation. OWS should document these internal controls in writing, including the technical implementation details, the date of implementation, and ongoing compliance monitoring activities. This documentation should be retained in OWS's compliance files and be available for presentation to Brindoval upon request.
We recommend that OWS implement these controls promptly upon execution of the Renewal ELA and maintain them until Brindoval provides written confirmation that PhotonX™ has been added to the AEPL.
VII. Coordination with Brindoval
In addition to the contractual and internal-control measures described above, we recommend that OWS consider proactively communicating with Brindoval regarding the planned deployment of PhotonX™ and the anticipated AEPL qualification timeline. Specifically, OWS should consider reaching out to Henry Kuo, Director of Customer Design Enablement at Brindoval's US subsidiary, to:
(i) Inform Brindoval of OWS's intent to incorporate PhotonX™ into its silicon photonics design workflows and its desire to deploy PhotonX™ with Brindoval PDKs as soon as AEPL qualification is completed.
(ii) Inquire about the current status and expected timeline of Brindoval's AEPL qualification process for PhotonX™, and identify any actions OWS can take to facilitate or expedite the process.
(iii) Express OWS's commitment to compliance with Section 4.7 of the PDK License Agreement and its intention to refrain from deploying PhotonX™ with Brindoval PDKs until AEPL qualification is obtained.
A proactive approach has several advantages. It demonstrates OWS's good faith and its respect for the AEPL requirements, which strengthens the overall relationship with Brindoval. It may also facilitate Brindoval's prioritization of the PhotonX™ qualification process, as Brindoval will understand that an important customer — OWS — is actively waiting on the result. Finally, a proactive approach reduces the risk of an adversarial response if Brindoval becomes aware of OWS's plans through other channels (for example, through industry contacts or Meridian's own outreach to Brindoval).
However, any communications with Brindoval must be carefully coordinated with Calderwood & Harkness. It is essential that OWS avoid inadvertent disclosure of confidential terms of the Meridian renewal negotiation — including pricing, seat counts, or the specific contractual safeguards being negotiated — in its communications with Brindoval. The Meridian renewal discussions and the Brindoval PDK compliance matter involve overlapping subject matter, and OWS personnel should be briefed on the boundaries of appropriate disclosure before initiating outreach to Brindoval.
VIII. Summary of Recommendations
For ease of reference, we summarize our recommendations as follows:
1. Conditional Activation Clause. Include a provision in the Renewal ELA specifying that OWS's deployment of PhotonX™ with Brindoval PDKs (and any other PDKs subject to third-party interoperability approval requirements) is conditioned upon AEPL qualification. Meridian should acknowledge that delayed deployment does not constitute underutilization or breach.
2. Fee-Abatement Mechanism. Negotiate a pro-rata fee abatement or deferral for the PhotonX™ license fee component if AEPL qualification is not obtained by March 31, 2026, with a Long-Stop Date of January 31, 2027 by which OWS may elect to remove PhotonX™ from the Renewal ELA and receive a corresponding TCV reduction without penalty.
3. Meridian Cooperation Covenant. Require Meridian to use commercially reasonable efforts to cooperate with Brindoval's AEPL qualification process, including providing technical documentation, engineering support, and test access. Include a quarterly reporting obligation requiring Meridian to update OWS on qualification progress.
4. Meridian Representation. Obtain a Meridian representation and warranty that PhotonX™ is designed for industry-standard PDK-format compatibility and that Meridian is not aware of any technical impediment to AEPL qualification as of the date of the Renewal ELA.
5. Internal OWS Access Controls. Implement technical and administrative controls segregating PhotonX™ from Brindoval PDK environments pending AEPL approval, with Priya Venkatesh designated as the responsible party. Document all controls in writing for compliance purposes.
6. Proactive Coordination with Brindoval. Initiate proactive outreach to Henry Kuo at Brindoval regarding the PhotonX™ AEPL qualification timeline, managed in consultation with Calderwood & Harkness to avoid inadvertent disclosure of Meridian renewal terms.
IX. Next Steps
Based on the analysis and recommendations set forth in this memorandum, we propose the following next steps:
1. Redline Preparation. Aaron Liu and Monica Reyes of Calderwood & Harkness will incorporate the recommended contractual safeguards — including the conditional activation clause, fee-abatement mechanism, cooperation covenant, and interoperability representation — into Calderwood & Harkness's first redline of the proposed Renewal ELA. Our target delivery date for the redline to Meridian's outside counsel, Bexley Weir & Daly LLP, is November 15, 2025.
2. OWS Confirmation of Brindoval Outreach Approach. Douglas Tran and Priya Venkatesh should confer internally and confirm OWS's desired approach regarding proactive outreach to Henry Kuo at Brindoval. If OWS elects to proceed with outreach, Calderwood & Harkness will assist in preparing talking points and advising on the scope of appropriate disclosure.
3. Proposed Contract Language. Calderwood & Harkness will prepare proposed contract language for the conditional activation clause and fee-abatement mechanism, circulated to OWS for review and comment prior to inclusion in the formal redline. We anticipate delivering this proposed language to Douglas Tran by November 11, 2025.
4. Internal Controls Implementation. Upon OWS's confirmation of the approach, Priya Venkatesh should begin coordinating with OWS IT and engineering operations to plan the implementation of the internal access controls described in Section VI.E, so that these controls are in place by the effective date of the Renewal ELA.
Any questions regarding this memorandum or the analysis set forth herein should be directed to the undersigned at the contact information below.
Respectfully submitted,
CALDERWOOD & HARKNESS LLP
By: ________
Aaron Liu Lead Associate One Market Plaza, Spear Tower, 42nd Floor San Francisco, CA 94105 Telephone: (415) 555-7200
Email: a.liu@calderwoodharkness.com
Matter No. 1014-00006

PRIVILEGED & CONFIDENTIAL — ATTORNEY-CLIENT COMMUNICATION

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MATTER NO.: 1014-00006

CALDERWOOD & HARKNESS LLP

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