Contract analysis

I. Executive Summary The purpose of this memorandum is to analyze whether the proposed acquisition of 100% of the outstanding equity of Marlowe Asset Management Photonics Inc. ("VPI"), a Delaware C-corporation headquartered in Colorado Springs, Colorado, by Halcyon Semiconductor Aktiengesellschaft ("HSAG"), a publicly traded German Aktiengesellschaft headquartered in Dresden, Saxony, Germany, constitutes a "covered t

II. Transaction Overview A. The Parties

1. The Acquiror — Halcyon Semiconductor AG Halcyon Semiconductor Aktiengesellschaft ("HSAG") is the ultimate acquiring party in the proposed transaction. The following summarizes the key corporate and business information relevant to the CFIUS jurisdictional analysis. Corporate Information: • Full Legal Name: Halcyon Semiconductor Aktiengesellschaft • Entity Type: Aktiengesellschaft (public stock corporation) organiz

2. The Acquisition Vehicle — Halcyon US Holdings Inc. HSAG has formed a special-purpose acquisition vehicle for the purpose of consummating the proposed transaction. • Full Legal Name: Halcyon US Holdings Inc. • Entity Type: Delaware C-corporation • Date of Formation: June 5, 2023 • EIN: 93-2841067 • Registered Agent: National Registered Agents of Delaware, 160 Greentree Drive, Suite 101, Dover, DE 19904 • Ownership:

3. The Target — Marlowe Asset Management Photonics Inc. Marlowe Asset Management Photonics Inc. ("VPI") is the U.S. business that is the target of the proposed acquisition. VPI is a specialty semiconductor company focused on the design, development, and manufacture of gallium nitride (GaN) power amplifier components for defense, aerospace, and commercial telecommunications applications. Corporate Information: • Full

4. Existing VPI Shareholders (Sellers) All of VPI's outstanding equity is currently held by U.S. persons. The table below summarizes VPI's existing ownership structure as reflected in VPI's capitalization table provided in connection with the SPA: Ridgecrest Ventures Fund III, L.P. is a Delaware limited partnership. Its general partner is Ridgecrest Ventures Management LLC. The principal of Ridgecrest Ventures Manage

III. Statutory and Regulatory Framework This section provides an overview of the statutory and regulatory framework governing CFIUS review of foreign investment transactions. This framework establishes the jurisdictional predicates that determine whether the proposed transaction is subject to CFIUS review and, if so, whether a mandatory filing obligation is triggered. A. Section 721 of the Defense Production Act The

Section 721 was substantially amended by the Foreign Investment Risk Review Modernization Act of 2018 ("FIRRMA"), enacted as Subtitle A of Title XVII of the John S. McCain National Defense Authorization Act for Fiscal Year 2019, Public Law 115-232. FIRRMA expanded the scope of CFIUS jurisdiction in several significant respects, including by: (a) Expanding CFIUS's authority to review certain non-controlling foreign in

IV. Analysis — Covered Transaction This section applies the statutory and regulatory framework summarized above to the facts of the proposed transaction in order to determine whether the transaction constitutes a "covered transaction" subject to CFIUS jurisdiction under 31 C.F.R. § 800.213. The analysis proceeds in three steps: (A) determining whether VPI qualifies as a "U.S. business"; (B) determining whether HSAG q

V. Analysis — TID U.S. Business and Critical Technologies Having established that the proposed transaction is a covered transaction under § 800.213, we now turn to the question of whether VPI qualifies as a "TID U.S. business" — a determination that is critical because it triggers the mandatory filing obligation under § 800.401. As explained below, VPI's status as a TID U.S. business is clear and unambiguous. A. "TID

1. Definition of Critical Technologies Under 31 C.F.R. § 800.215, "critical technologies" include the following categories of items: (a) Defense articles or defense services included on the United States Munitions List ("USML") set forth in the International Traffic in Arms Regulations ("ITAR") at 22 C.F.R. Parts 120–130, as administered by the Department of State's Directorate of Defense Trade Controls ("DDTC"); (b)

2. VPI Products Qualifying as ITAR-Controlled Defense Articles VPI designs and manufactures GaN (gallium nitride) power amplifier chips, modules, and integrated assemblies used in defense radar systems, missile defense applications, and military satellite communications systems. A significant portion of VPI's product portfolio constitutes defense articles subject to the jurisdiction of the ITAR and classified under t

3. VPI Products Qualifying as EAR-Controlled Dual-Use Items In addition to its ITAR-controlled defense articles, VPI produces a portfolio of commercial and dual-use semiconductor products that are subject to the Export Administration Regulations and classified under specific Export Control Classification Numbers ("ECCNs") on the Commerce Control List ("CCL"). The following ECCNs are applicable to VPI's products: ECCN

4. Conclusion on Critical Technology Status VPI is unambiguously a TID U.S. business engaged in the production, design, manufacture, and development of "critical technologies" as defined in 31 C.F.R. § 800.215. Specifically: (a) ITAR Category XI(a)(3) defense articles — VPI designs and manufactures GaN power amplifier components classified as defense articles under Category XI(a)(3) of the United States Munitions Lis

VI. Analysis — Mandatory Filing Obligation A. Mandatory Declaration Under 31 C.F.R. § 800.401 Having established that (i) the proposed transaction is a "covered transaction" under § 800.213 (Section IV), and (ii) VPI is a "TID U.S. business" that produces critical technologies under §§ 800.248 and 800.215 (Section V), we now address whether the transaction triggers the mandatory filing obligation under 31 C.F.R. § 80

Section 800.401(a) requires parties to a covered transaction to submit a declaration to CFIUS at least 30 days prior to the expected completion date of the transaction where both of the following conditions are met: (1) The U.S. business that is the subject of the transaction produces, designs, tests, manufactures, fabricates, or develops one or more "critical technologies" (as defined in § 800.215); and (2) A U.S. r