Contract analysis

1. Scope of Engagement 1.1 Overview of Matter C&H is engaged to provide United States federal tax counsel services in connection with the pursuit of a bilateral APA under Article 25 of the Convention between the United States of America and the Federal Republic of Germany for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income and Capital and to Certain Other Taxes, s

1. Pre-Filing Memorandum. Preparation and submission of a pre-filing memorandum to the IRS Advance Pricing and Mutual Agreement Program ("APMA"), summarizing the controlled transactions, proposed transfer pricing methods, the basis for the bilateral request, and the rollback proposal. The pre-filing memorandum will be prepared in accordance with Section 4 of Rev. Proc. 2015-41 and will request anonymity for the Clien

2. Pre-Filing Conference. Attendance at and support for the pre-filing conference with IRS APMA personnel, anticipated to take place at the IRS offices in Washington, D.C. C&H will prepare conference materials, including a summary presentation, discussion outline, and preliminary economic overview, and will attend the conference with at least one partner and one associate.

3. Functional Analyses and Economic Benchmarking Studies. Coordination of detailed functional analyses of HSAG and HSI, characterization of the controlled transactions, and economic benchmarking studies. Meridian Economics GmbH ("Meridian Economics"), as the subcontracted economist (see Section 2.4 below), will prepare the benchmarking studies, including Comparable Profits Method ("CPM") / Transactional Net Margin Me

4. Formal APA Application. Preparation and filing of the formal APA application with IRS APMA, including IRS Form 14661 (Application for Advance Pricing Agreement) and the following supporting materials: (a) Narrative statement of the proposed covered transactions, functional analyses, and comparability analyses; (b) Economic analysis appendix, incorporating the benchmarking studies prepared by Meridian Economics; (c

5. Contemporaneous Transfer Pricing Documentation. Preparation of contemporaneous transfer pricing documentation for HSI, consisting of: (a) A Master File prepared in accordance with OECD BEPS Action 13 guidelines; (b) US Local Files for each of fiscal year 2022, fiscal year 2023, and fiscal year 2024, prepared in accordance with the requirements of IRC § 6662(e) and Treasury Regulations § 1.6662-6; and (c) A CSA doc

6. Penalty Protection Statements. Preparation of IRC § 6662(e) penalty protection statements for each of the fiscal years covered by the contemporaneous documentation (FY 2022, FY 2023, and FY 2024), to establish a reasonable cause defense against potential transfer pricing penalties.

7. Coordination with German Counsel. Coordination with Kettner Pflüger Rechtsanwälte (Dr. Tobias Kettner, lead partner), the Firm's German legal counterpart in this engagement, regarding the parallel German APA application to the BZSt and German transfer pricing documentation obligations under § 1 Außensteuergesetz ("AStG"), §§ 90(3) and 162(3)–(4) Abgabenordnung ("AO"), and the Gewinnabgrenzungsaufzeichnungsverordnu

8. Intercompany Agreement Review and Drafting. Review and, as necessary, drafting of amended intercompany agreements — specifically, the Master Intercompany Supply Agreement and the IP License Agreement — to ensure consistency with the APA positions adopted and to reflect the arm's length character of the controlled transactions during the proposed APA term. Any amendments to these agreements will be coordinated with

9. Power of Attorney. Preparation of IRS Form 2848 (Power of Attorney and Declaration of Representative) for HSI, authorizing C&H attorneys to represent HSI before the IRS in connection with the APA application and related matters. 1.5 Phase 2 — APA Negotiation Support Phase 2 of the engagement encompasses the negotiation and finalization of the bilateral APA, commencing after the filing of the formal APA application

1. Representation in APA Negotiations. Representation of HSI and HSAG in all stages of APA negotiations with IRS APMA and, through the competent authority process under Article 25 of the Treaty, with the BZSt. C&H will serve as lead counsel for the Client in all communications and meetings with IRS APMA and will coordinate with Kettner Pflüger regarding the parallel negotiation track with the BZSt.

2. Information Document Requests. Response to IRS Information Document Requests ("IDRs") issued during the APA examination process, including the compilation of responsive documents, preparation of written responses, and coordination of interviews with Client personnel.

3. Supplemental Economic Analyses. Preparation of supplemental economic analyses, sensitivity testing, and updated benchmarking studies as may be requested by IRS APMA or the BZSt during the course of negotiations, or as may be advisable in light of developments in the negotiation process. Such analyses will be coordinated with Meridian Economics and, to the extent applicable, may give rise to additional fees under t

4. Proposed APA Agreement Terms. Drafting of proposed APA agreement terms, including the critical assumptions, transfer pricing methodology provisions, annual compliance report specifications, and rollback provisions, for submission to IRS APMA and the BZSt through the competent authority process.

5. Annual Compliance Report Templates. Preparation of annual compliance report templates for use by the Client during each year of the prospective APA term, consistent with the requirements of Section 7 of Rev. Proc. 2015-41.

6. Estimated Phase 2 Period. Based on current IRS APMA processing times and typical bilateral APA timelines, the estimated duration of Phase 2 is approximately two to three years, with an anticipated completion window of 2025 through 2027. However, the actual timeline is subject to the pace of negotiations and is not within C&H's control. 1.6 Exclusions from Scope The following matters are expressly excluded from the

2. Staffing 2.1 Responsible Partner Leonard Cross, Partner, Tax, will serve as the Responsible Partner for this engagement. Mr. Cross will have overall responsibility for legal strategy, supervision of the APA application and negotiation process, and the client relationship. Mr. Cross has extensive experience in bilateral APA matters, having led the preparation and negotiation of more than twenty bilateral APAs invol

3. Fee Arrangements 3.1 Hourly Rates C&H will bill for attorney time at the following blended hourly rates for the engagement team: The foregoing hourly rates are effective as of the date of this engagement letter and are subject to annual adjustment in accordance with C&H's standard rate adjustment policies. Notwithstanding the foregoing, any adjusted rates applicable to time billed during Phase 1 and Phase 2 of thi

4. Client Contacts and Communication 4.1 Day-to-Day Contacts The following individuals are designated as the primary day-to-day contacts for the engagement: United States: Priya Raghavan, Vice President, Tax, Halcyon Semiconductor Inc., 8700 Parmer Lane, Building 4, Austin, TX 78729. Ms. Raghavan may be reached at praghavan@halcyonsemi.com or (512) 831-4400 ext. 2215. Germany: Dr. Erwin Fassbinder, Senior Vice Presid

5. Key Milestones and Deliverable Timeline The following milestones and target dates have been established for the engagement. These dates are estimates based on currently available information and are subject to adjustment as circumstances require, including in response to IRS scheduling and processing timelines. C&H will promptly notify the Client of any material changes to the timeline. The Client understands that

6. Confidentiality All information provided by the Client to C&H in connection with this engagement, including but not limited to financial data, business plans, trade secrets, proprietary technology information, intercompany agreements, internal memoranda, and communications, is confidential and will be treated as protected by the attorney-client privilege and/or the work product doctrine to the fullest extent permi

7. Conflicts of Interest C&H has conducted a comprehensive conflicts check in accordance with the Firm's internal conflict clearance procedures and confirms that, as of the date of this letter, no conflict of interest exists with respect to the representation of HSAG and HSI in this matter. The internal conflict check memorandum, dated February 3, 2025, is on file at the Firm and documents the results of the conflict

8. Applicable Law and Regulatory Framework The engagement will be governed by and conducted with reference to the following principal legal and regulatory authorities, among others: (a) Internal Revenue Code ("IRC") § 482 (allocation of income and deductions among controlled taxpayers); (b) IRC § 6662(e) (substantial valuation misstatement penalty for transfer pricing) and IRC § 6662(h) (gross valuation misstatement

9. Limitation of Liability C&H will perform the services described in this engagement letter with reasonable care and in accordance with the professional standards applicable to attorneys practicing in the area of international transfer pricing and advance pricing agreements. However, C&H makes no guarantee or assurance regarding the outcome of the APA application, the acceptance of any transfer pricing method or pos

10. Termination Either party may terminate this engagement upon thirty (30) days' prior written notice delivered to the other party at the addresses set forth in this letter (or such other addresses as may be designated in writing). Notice of termination shall be effective upon receipt by the non-terminating party. Upon termination of the engagement, the Client shall be responsible for payment of all fees and expense

11. Governing Law and Dispute Resolution This engagement letter and the rights and obligations of the parties hereunder shall be governed by and construed in accordance with the laws of the State of New York, without regard to principles of conflicts of law. Any dispute, controversy, or claim arising out of or relating to this engagement letter or the services provided hereunder, including any dispute regarding the i

12. Acceptance and Execution We ask that authorized representatives of both HSAG and HSI review the terms set forth in this engagement letter carefully and, if acceptable, sign and return one fully executed original of this letter to confirm acceptance of the terms of the engagement. A scanned copy transmitted by email to Leonard Cross at lcross@calderwoodharkness.com shall constitute effective delivery, provided tha