Contract analysis

1. Introduction and Purpose I am a Partner in the Antitrust and Competition Practice Group at Calderwood & Harkness LLP, and I write on behalf of Halcyon Semiconductor Aktiengesellschaft in connection with Halcyon's proposed acquisition (the "Transaction") of Vectris Photonics, Inc. ("Vectris"), a Delaware corporation headquartered at 4750 Ridgepoint Drive, Suite 300, San Jose, California 95134. The Transaction is be

2. Background on the Transaction and the Parties 2.1 Halcyon Semiconductor AG Halcyon Semiconductor Aktiengesellschaft is a publicly traded German stock corporation (Aktiengesellschaft) organized under the laws of the Federal Republic of Germany. The Company is registered in the commercial register (Handelsregister) of the Local Court (Amtsgericht) of Munich under registration number HRB 178254. Halcyon's ordinary sh

3. Summary of Competitive Concerns Identified by the Division Halcyon acknowledges the Division's ongoing investigation of the Transaction and the issuance of the Second Request on September 15, 2023. Through its investigation — including depositions, document productions, third-party interviews with customers and competitors, and the Second Request specifications — the Division has communicated its preliminary compe

4. Proposed Structural Remedy: Divestiture of Halcyon's U.S. Silicon Photonics Product Line 4.1 Overview of the Proposed Divestiture In order to resolve the Division's competitive concerns, Halcyon proposes to divest its entire existing U.S. silicon photonics product line (hereinafter, the "Divestiture Business") to a purchaser (the "Approved Purchaser") that is acceptable to, and approved by, the Division in advance

5. Requirements for the Approved Purchaser Consistent with the Division's Merger Remedies Manual and the Division's established practice, Halcyon proposes that the identity of the Approved Purchaser be subject to the Division's prior written approval. The Division's approval should not be unreasonably withheld, and Halcyon commits to working collaboratively with the Division to identify a purchaser that satisfies the

6. Proposed Timing and Process Halcyon proposes the following timeline and process for implementation of the divestiture: (a) Execution of Definitive Divestiture Agreement. Halcyon proposes to identify, propose, and obtain Division approval of an Approved Purchaser, and to negotiate and execute a definitive divestiture agreement (the "Divestiture Agreement") with the Approved Purchaser, within ninety (90) days of the

7. Hold-Separate and Preservation Commitments Pending the completion of the divestiture to the Approved Purchaser, Halcyon commits to maintain and preserve the Divestiture Business as a viable, competitive, and ongoing enterprise. Specifically, Halcyon proposes the following hold-separate and preservation commitments: (a) Maintenance as a Going Concern. Halcyon will maintain the Divestiture Business as a going concer

8. Sufficiency of the Proposed Remedy Halcyon respectfully submits that the proposed divestiture fully and effectively addresses the competitive overlap that constitutes the basis of the Division's concerns regarding the Transaction. The remedy satisfies the Division's established principles for merger remedies in several important respects. First, the divestiture eliminates the entirety of the horizontal overlap bet

9. Coordination with European Commission Proceedings Halcyon wishes to inform the Division that a parallel merger control notification was filed with the European Commission on August 25, 2023 pursuant to the EU Merger Regulation (Council Regulation (EC) No 139/2004) (Case M.11247 — Halcyon Semiconductor / Vectris Photonics). On October 6, 2023, the European Commission announced its decision to open a Phase II in-dep

10. Confidentiality Halcyon respectfully requests that this letter, and any information provided by Halcyon in connection with the proposed remedy, be treated as confidential and maintained in accordance with the Division's procedures for the protection of confidential business information. This submission contains sensitive commercial and financial information, proprietary business strategies, and trade secrets of H

11. Conclusion and Request for Meeting In summary, Halcyon has a strong and genuine interest in resolving the Division's competitive concerns through a negotiated remedy, and the Company believes the comprehensive divestiture package described in this letter provides a fully effective, structural solution. Halcyon is firmly committed to achieving a consensual resolution that permits the Transaction to proceed while p