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DEPARTMENT OF THE TREASURY WASHINGTON, D.C.

OFFICE OF INVESTMENT SECURITY 1500 Pennsylvania Avenue NW Washington, DC 20220

January 26, 2024

Margaret "Peggy" Ashworth, Esq. Of Counsel Calderwood & Harkness LLP 1750 K Street NW, Suite 800 Washington, DC 20006

Beatrice Holloway, Esq. Partner Calderwood & Harkness LLP 399 Park Avenue, 31st Floor New York, NY 10022

Harrison Whitfield, Esq. Partner Wethersfield & Gale LLP 2000 Pennsylvania Avenue NW, Suite 600 Washington, DC 20006

Re: CFIUS Case No. CFIUS-023-07-3841 — Proposed Acquisition of Marlowe Asset Management Photonics Inc. by Halcyon Semiconductor Aktiengesellschaft through Halcyon US Holdings Inc.

Dear Ms. Ashworth, Ms. Holloway, and Mr. Whitfield:

This letter is issued on behalf of the Committee on Foreign Investment in the United States ("CFIUS" or the "Committee"), pursuant to section 721 of the Defense Production Act of 1950, as amended (50 U.S.C. § 4565) (the "DPA"), and the regulations promulgated thereunder at 31 C.F.R. Part 800. This letter pertains to the joint voluntary notice filed on July 14, 2023, by Halcyon Semiconductor Aktiengesellschaft ("HSAG"), a publicly traded Aktiengesellschaft organized under the laws of the Federal Republic of Germany and listed on the Frankfurt Stock Exchange (XETRA: HSA), through its wholly owned subsidiary Halcyon US Holdings Inc. ("Halcyon US"), a corporation organized and existing under the laws of the State of Delaware, and Marlowe Asset Management Photonics Inc. ("VPI"), a corporation organized and existing under the laws of the State of Delaware and headquartered in Colorado Springs, Colorado (collectively, the "Parties" or the "Transaction Parties"). The joint voluntary notice concerns the proposed acquisition of one hundred percent (100%) of the outstanding equity interests of VPI by HSAG, acting through Halcyon US, pursuant to a definitive Agreement and Plan of Merger dated June 2, 2023 (the "Transaction"). The purpose of this letter is to inform the Transaction Parties of the Committee's determination with respect to the Transaction.

I. Summary of Review and Investigation

The Committee accepted the joint voluntary notice on July 21, 2023, thereby commencing a forty-five (45) day review period pursuant to 31 C.F.R. § 800.503. During the course of the initial review period, the Committee's member agencies undertook a comprehensive assessment of the national security implications of the Transaction, including an evaluation of the nature and scope of VPI's operations, products, technologies, and customer relationships, as well as an assessment of the acquiring entity, HSAG, and its corporate structure, beneficial ownership, governance, and foreign government relationships.

During the review period, the Committee issued a formal request for additional information to the Transaction Parties on August 4, 2023, seeking supplemental details concerning, among other things, certain technical specifications of VPI's proprietary photonic integrated circuit technologies, the nature and classification level of VPI's existing contracts with the United States Government, VPI's access to controlled unclassified information and classified national security information, HSAG's relationships with foreign government entities and state-owned enterprises, and HSAG's supply chain dependencies. The Transaction Parties submitted comprehensive supplemental responses to the Committee's request on August 18, 2023.

Upon conclusion of the forty-five (45) day review period on September 4, 2023, the Committee determined that the Transaction warranted further examination and accordingly initiated a forty-five (45) day investigation period pursuant to 31 C.F.R. § 800.509. The investigation period allowed the Committee's member agencies to conduct a more detailed and in-depth analysis of the national security considerations arising from the Transaction, including consultations with the intelligence community and other relevant government stakeholders.

During the investigation period, the Committee issued a second formal request for additional information to the Transaction Parties on September 22, 2023. This second request sought further information relating to, among other matters, VPI's ongoing and anticipated research and development activities in the field of advanced photonic sensor technologies, VPI's personnel security posture, the proposed post-acquisition governance structure for VPI, and HSAG's plans with respect to the integration of VPI's operations and intellectual property into HSAG's broader corporate ecosystem. The Transaction Parties submitted their supplemental responses to this second request on October 6, 2023.

On October 20, 2023, the Committee communicated preliminary national security concerns to the Transaction Parties through their respective counsel. Following the communication of these preliminary concerns, the Transaction Parties engaged in extensive negotiations with the Committee, acting through its designated member agencies, regarding the development and implementation of appropriate mitigation measures to address the identified national security concerns. These negotiations continued through the remainder of the investigation period and thereafter, culminating in the execution of the National Security Agreement referenced in Section II below.

II. National Security Agreement

Following the negotiation process described in Section I above, the Transaction Parties and the United States of America entered into a National Security Agreement, designated as docket reference NSA-2024-0019, which was fully executed on January 19, 2024 (the "NSA" or the "Agreement"). The parties to the NSA are Halcyon Semiconductor Aktiengesellschaft, Halcyon US Holdings Inc., Marlowe Asset Management Photonics Inc., and the United States of America, acting through the U.S. Department of the Treasury, the U.S. Department of Defense, and the U.S. Department of Energy, each in its capacity as a co-lead agency for purposes of the Committee's review of the Transaction.

The NSA establishes a comprehensive framework of mitigation measures designed to address the national security concerns identified by the Committee in connection with the Transaction. These mitigation measures are tailored to the specific risks presented by the Transaction and reflect the Committee's assessment of the most effective and least intrusive means of resolving those concerns while permitting the Transaction to proceed.

The key provisions of the NSA include, but are not limited to, the following:

(a) Governance Requirements. The NSA requires that the board of directors of VPI (or its successor entity) be reconstituted following the closing of the Transaction to include a specified number of independent directors who are United States citizens, hold active personnel security clearances at the appropriate level, and are approved by the Committee's designated member agencies. In addition, the NSA mandates the establishment and maintenance of a Government Security Committee ("GSC") within VPI, composed entirely of approved directors, which shall exercise exclusive authority over all matters relating to VPI's classified and sensitive government contracts, facilities, and personnel.

(b) Technology Control Plan. The NSA requires the development and implementation of a Technology Control Plan ("TCP") designed to prevent the unauthorized transfer, disclosure, or export of VPI's controlled technologies, intellectual property, proprietary data, and technical information to HSAG or any other foreign person. The TCP must be approved by the Committee's designated member agencies prior to the closing of the Transaction and is subject to periodic review and update.

(c) Cybersecurity Requirements. The NSA imposes enhanced cybersecurity requirements on VPI, including the implementation and maintenance of cybersecurity policies, procedures, and technical safeguards that meet or exceed the standards established by the Committee and are consistent with applicable government cybersecurity frameworks, including NIST SP 800-171 and CMMC Level 2 requirements, as applicable.

(d) Facility Access Restrictions. The NSA restricts the access of HSAG personnel and other non-approved foreign nationals to certain VPI facilities, including any facilities that hold facility security clearances under the National Industrial Security Program or that are used in the performance of classified or sensitive government contracts.

(e) Data Segregation. The NSA requires the physical and logical segregation of certain categories of VPI data, including classified information, controlled unclassified information, export-controlled technical data, and other sensitive government-related data, from HSAG's broader corporate information technology infrastructure and systems.

(f) Third-Party Compliance Monitoring. The NSA designates Whitmore Compliance Group LLC as the approved third-party compliance monitor (the "Monitor"), responsible for independently assessing and reporting on the Transaction Parties' compliance with the terms and conditions of the NSA. The Monitor's obligations, authority, access rights, and reporting requirements are set forth in the NSA and in the Third-Party Compliance Monitor Agreement executed contemporaneously therewith.

(g) Personnel Continuity Obligations. The NSA establishes certain requirements with respect to the retention, removal, and replacement of key VPI personnel, including personnel holding security clearances and personnel involved in the performance of sensitive government contracts, and requires prior notification to the Committee's designated member agencies before any material changes to such personnel are implemented.

(h) Pre-notification Requirements for Material Changes. The NSA requires the Transaction Parties to provide advance written notification to the Committee's designated member agencies prior to implementing any material changes to VPI's corporate structure, governance, operations, facilities, security posture, or business activities that could affect the national security concerns addressed by the NSA.

The foregoing summary is provided for reference purposes only and does not modify, limit, or supersede any provision of the NSA. The terms and conditions of the NSA, as set forth in docket reference NSA-2024-0019, shall govern in all respects.

III. Committee Determination

Having completed its review and investigation of the Transaction, and having considered the national security factors set forth in 50 U.S.C. § 4565(f) and 31 C.F.R. § 800.503, the Committee has determined that the Transaction, as mitigated by the terms and conditions of the NSA (NSA-2024-0019), does not present any unresolved national security concerns. The Committee has therefore concluded all action with respect to the Transaction under section 721 of the Defense Production Act of 1950, as amended.

This determination is based on the assumption that all representations made by the Transaction Parties in the joint voluntary notice dated July 14, 2023, all supplemental submissions provided in response to the Committee's requests for additional information, and all certifications provided in connection with CFIUS Case No. CFIUS-023-07-3841 are accurate and complete in all material respects, and that the Transaction will be consummated in the manner described therein. Any material inaccuracy or incompleteness in such representations, submissions, or certifications may affect the validity of this determination, as set forth in Section V below.

IV. Safe Harbor

Pursuant to 50 U.S.C. § 4565(b)(1)(D), the Transaction, as described in the joint voluntary notice and supplemental filings submitted in connection with CFIUS Case No. CFIUS-023-07-3841, shall not be subject to additional review under section 721 of the Defense Production Act of 1950, as amended, provided that:

(i) the Transaction is consummated substantially in accordance with the terms described in the joint voluntary notice and supplemental submissions filed with the Committee;

(ii) the Transaction Parties comply in all material respects with the terms and conditions of the NSA (NSA-2024-0019), as such terms and conditions may be amended, modified, or supplemented in accordance with the provisions of the NSA; and

(iii) no material misstatement of fact or material omission is identified in the joint voluntary notice or any supplemental filing submitted to the Committee in connection with CFIUS Case No. CFIUS-023-07-3841.

The Transaction Parties are advised that the safe harbor described in this Section IV applies solely to the specific Transaction as reviewed and described in the joint voluntary notice and supplemental filings referenced herein. The safe harbor does not extend to any future transaction, acquisition, investment, or corporate reorganization involving any of the Transaction Parties or their affiliates that is not covered by the joint voluntary notice filed in connection with CFIUS Case No. CFIUS-023-07-3841. Any such future transaction may independently constitute a covered transaction subject to review under section 721 of the DPA and the regulations at 31 C.F.R. Part 800, and the Transaction Parties are encouraged to consult with the Committee regarding any such future transaction to determine whether a new filing is required or advisable.

V. Ongoing Obligations and Compliance Monitoring

The Transaction Parties are reminded that, upon and following the closing of the Transaction, they remain bound by all obligations set forth in the NSA (NSA-2024-0019), including all obligations that survive the closing or that are triggered by post-closing events or conditions. Compliance with the NSA is a continuing obligation, and the Transaction Parties are expected to devote appropriate resources and attention to ensuring full and timely compliance with all NSA provisions.

The Defense Counterintelligence and Security Agency ("DCSA") shall serve as the designated monitoring agency for purposes of the NSA. DCSA, in coordination with the Committee's co-lead agencies, will oversee the Transaction Parties' ongoing compliance with the NSA and may conduct site visits, audits, inspections, and other compliance-related activities as provided for in the NSA and applicable regulations.

Whitmore Compliance Group LLC has been approved by the Committee as the third-party compliance monitor for purposes of the NSA. The Monitor's obligations, access rights, reporting schedule, and other terms of engagement are set forth in the NSA and in the Third-Party Compliance Monitor Agreement. The Transaction Parties are required to cooperate fully with the Monitor and to provide the Monitor with all access, information, and assistance reasonably necessary for the Monitor to carry out its compliance assessment and reporting functions.

The Committee, acting through its member agencies, reserves the right to take any and all enforcement actions available under 50 U.S.C. § 4565 and the regulations at 31 C.F.R. Part 800 in the event of a breach of the NSA or any failure by the Transaction Parties to comply with the terms and conditions thereof. Available enforcement actions include, but are not limited to, the imposition of civil monetary penalties of up to the value of the Transaction for each violation, the seeking of injunctive or other equitable relief in federal court, and the imposition of mandated divestiture or other remedial measures as provided in Section 12.3 of the NSA and 50 U.S.C. § 4565(l). The Committee's enforcement authority is in addition to, and not in lieu of, any other enforcement authority available to the United States Government under applicable law.

VI. Reservation of Rights and Limitations

This letter does not constitute a determination by the Committee that the Transaction is lawful under any provision of law other than section 721 of the Defense Production Act of 1950, as amended. The Committee's review under section 721 is limited to an assessment of the national security implications of the Transaction, and this letter addresses solely the Committee's conclusions with respect to those national security implications.

The Transaction Parties remain independently responsible for compliance with all applicable federal, state, and local laws and regulations, including but not limited to the International Traffic in Arms Regulations ("ITAR"), 22 C.F.R. Parts 120–130; the Export Administration Regulations ("EAR"), 15 C.F.R. Parts 730–774; the National Industrial Security Program Operating Manual ("NISPOM"), 32 C.F.R. Part 117; the Federal Acquisition Regulation ("FAR"), 48 C.F.R. Chapter 1; the regulations and requirements of the Committee on Foreign Investment in the United States to the extent not addressed in this letter; and any other applicable regulatory requirements, including those administered by the U.S. Department of State, Directorate of Defense Trade Controls, the U.S. Department of Commerce, Bureau of Industry and Security, the U.S. Department of Defense, and the Nuclear Regulatory Commission, as applicable.

This letter does not address, and the Committee expresses no view on, whether the Transaction is consistent with any other legal requirement, regulatory approval, or governmental authorization that may be applicable to the Transaction or to any of the Transaction Parties, including but not limited to antitrust clearance, securities regulatory approvals, foreign government regulatory approvals, or any other approval or authorization that may be required in connection with the consummation of the Transaction.

The Committee's determination set forth in this letter is based on the information available to the Committee as of the date of this letter. Pursuant to 31 C.F.R. § 800.601, the Committee may reopen its review or investigation of a covered transaction if the Committee subsequently learns of any material misstatement of fact, material omission, or material change in circumstances that could have affected the Committee's determination. In the event that the Committee determines that any such material misstatement, omission, or change in circumstances has occurred, the safe harbor described in Section IV of this letter may no longer apply, and the Transaction may be subject to additional review, investigation, or action under section 721 of the DPA and the regulations at 31 C.F.R. Part 800.

VII. Confidentiality

This letter and the existence, substance, and terms of the Committee's review, investigation, and determination are confidential pursuant to 50 U.S.C. § 4565(c) and 31 C.F.R. § 800.802. All information provided to the Committee in connection with CFIUS Case No. CFIUS-023-07-3841, including the joint voluntary notice, supplemental submissions, and all communications between the Transaction Parties and the Committee, is likewise subject to the confidentiality protections of 50 U.S.C. § 4565(c) and 31 C.F.R. § 800.802.

Notwithstanding the foregoing, the Transaction Parties may disclose the fact that the Committee has concluded its review and has determined that the Transaction does not present unresolved national security concerns, including in public filings with the U.S. Securities and Exchange Commission, press releases, or other public announcements, provided that any such disclosure is consistent with the requirements and limitations set forth in 31 C.F.R. § 800.802. In particular, the Transaction Parties should not disclose the specific substance of the Committee's national security analysis, the particular national security concerns identified by the Committee, or the specific terms and conditions of the NSA, except to the extent that such disclosure is expressly authorized by the Committee or required by applicable law.

Any questions regarding permissible disclosures, the scope of confidentiality obligations, or the appropriate characterization of the Committee's determination in public filings or announcements should be directed to the Office of Investment Security at the address and contact information set forth in Section VIII below.

VIII. Contact Information

Any questions regarding this letter, the Committee's determination, the NSA (NSA-2024-0019), or any other matter relating to CFIUS Case No. CFIUS-023-07-3841 should be directed to:

Staff Chairperson Committee on Foreign Investment in the United States U.S. Department of the Treasury Office of Investment Security 1500 Pennsylvania Avenue NW Washington, DC 20220 Telephone: (202) 622-1860

Email: CFIUS@treasury.gov

The Transaction Parties are encouraged to contact the Office of Investment Security promptly with any questions, concerns, or developments that may arise in connection with the Transaction, the NSA, or the Committee's determination.

•

Sincerely,

COMMITTEE ON FOREIGN INVESTMENT IN THE UNITED STATES

By: ________

Staff Chairperson Committee on Foreign Investment in the United States U.S. Department of the Treasury Office of Investment Security

cc:

Stefan Lohse, Esq. General Counsel Halcyon Semiconductor Aktiengesellschaft Industriestraße 44 01099 Dresden, Saxony Federal Republic of Germany

Dr. Nathan Trevorrow Chief Executive Officer Marlowe Asset Management Photonics Inc. 7400 Ridgeline Parkway Colorado Springs, CO 80919

U.S. Department of Defense (CFIUS co-lead agency)

U.S. Department of Energy (CFIUS co-lead agency)

Defense Counterintelligence and Security Agency (monitoring agency)

CALDERWOOD & HARKNESS LLP — INTERNAL FILE COPY

RECEIVED: January 26, 2024

This file copy is maintained in accordance with Calderwood & Harkness LLP document retention policies. This document is confidential pursuant to 50 U.S.C. § 4565(c) and is subject to attorney-client privilege and work product protections. Do not distribute without authorization from the responsible attorney.

Field	Detail
Matter	Halcyon Semiconductor AG / Marlowe Asset Management Photonics Inc. — CFIUS Filing & Mitigation
CFIUS Case No.	CFIUS-023-07-3841
NSA Docket	NSA-2024-0019
Filed By	Margaret "Peggy" Ashworth, Of Counsel, National Security & CFIUS
Office	Calderwood & Harkness LLP, 1750 K Street NW, Suite 800, Washington, DC 20006
Date Received	January 26, 2024
Document Type	CFIUS Clearance Letter (Safe Harbor)
Filing Status	File Copy — Original Retained

DEPARTMENT OF THE TREASURY WASHINGTON, D.C.
OFFICE OF INVESTMENT SECURITY 1500 Pennsylvania Avenue NW Washington, DC 20220
January 26, 2024
Margaret "Peggy" Ashworth, Esq. Of Counsel Calderwood & Harkness LLP 1750 K Street NW, Suite 800 Washington, DC 20006
Beatrice Holloway, Esq. Partner Calderwood & Harkness LLP 399 Park Avenue, 31st Floor New York, NY 10022
Harrison Whitfield, Esq. Partner Wethersfield & Gale LLP 2000 Pennsylvania Avenue NW, Suite 600 Washington, DC 20006
Re: CFIUS Case No. CFIUS-023-07-3841 — Proposed Acquisition of Marlowe Asset Management Photonics Inc. by Halcyon Semiconductor Aktiengesellschaft through Halcyon US Holdings Inc.
Dear Ms. Ashworth, Ms. Holloway, and Mr. Whitfield:
This letter is issued on behalf of the Committee on Foreign Investment in the United States ("CFIUS" or the "Committee"), pursuant to section 721 of the Defense Production Act of 1950, as amended (50 U.S.C. § 4565) (the "DPA"), and the regulations promulgated thereunder at 31 C.F.R. Part 800. This letter pertains to the joint voluntary notice filed on July 14, 2023, by Halcyon Semiconductor Aktiengesellschaft ("HSAG"), a publicly traded Aktiengesellschaft organized under the laws of the Federal Republic of Germany and listed on the Frankfurt Stock Exchange (XETRA: HSA), through its wholly owned subsidiary Halcyon US Holdings Inc. ("Halcyon US"), a corporation organized and existing under the laws of the State of Delaware, and Marlowe Asset Management Photonics Inc. ("VPI"), a corporation organized and existing under the laws of the State of Delaware and headquartered in Colorado Springs, Colorado (collectively, the "Parties" or the "Transaction Parties"). The joint voluntary notice concerns the proposed acquisition of one hundred percent (100%) of the outstanding equity interests of VPI by HSAG, acting through Halcyon US, pursuant to a definitive Agreement and Plan of Merger dated June 2, 2023 (the "Transaction"). The purpose of this letter is to inform the Transaction Parties of the Committee's determination with respect to the Transaction.
I. Summary of Review and Investigation
The Committee accepted the joint voluntary notice on July 21, 2023, thereby commencing a forty-five (45) day review period pursuant to 31 C.F.R. § 800.503. During the course of the initial review period, the Committee's member agencies undertook a comprehensive assessment of the national security implications of the Transaction, including an evaluation of the nature and scope of VPI's operations, products, technologies, and customer relationships, as well as an assessment of the acquiring entity, HSAG, and its corporate structure, beneficial ownership, governance, and foreign government relationships.
During the review period, the Committee issued a formal request for additional information to the Transaction Parties on August 4, 2023, seeking supplemental details concerning, among other things, certain technical specifications of VPI's proprietary photonic integrated circuit technologies, the nature and classification level of VPI's existing contracts with the United States Government, VPI's access to controlled unclassified information and classified national security information, HSAG's relationships with foreign government entities and state-owned enterprises, and HSAG's supply chain dependencies. The Transaction Parties submitted comprehensive supplemental responses to the Committee's request on August 18, 2023.
Upon conclusion of the forty-five (45) day review period on September 4, 2023, the Committee determined that the Transaction warranted further examination and accordingly initiated a forty-five (45) day investigation period pursuant to 31 C.F.R. § 800.509. The investigation period allowed the Committee's member agencies to conduct a more detailed and in-depth analysis of the national security considerations arising from the Transaction, including consultations with the intelligence community and other relevant government stakeholders.
During the investigation period, the Committee issued a second formal request for additional information to the Transaction Parties on September 22, 2023. This second request sought further information relating to, among other matters, VPI's ongoing and anticipated research and development activities in the field of advanced photonic sensor technologies, VPI's personnel security posture, the proposed post-acquisition governance structure for VPI, and HSAG's plans with respect to the integration of VPI's operations and intellectual property into HSAG's broader corporate ecosystem. The Transaction Parties submitted their supplemental responses to this second request on October 6, 2023.
On October 20, 2023, the Committee communicated preliminary national security concerns to the Transaction Parties through their respective counsel. Following the communication of these preliminary concerns, the Transaction Parties engaged in extensive negotiations with the Committee, acting through its designated member agencies, regarding the development and implementation of appropriate mitigation measures to address the identified national security concerns. These negotiations continued through the remainder of the investigation period and thereafter, culminating in the execution of the National Security Agreement referenced in Section II below.
II. National Security Agreement
Following the negotiation process described in Section I above, the Transaction Parties and the United States of America entered into a National Security Agreement, designated as docket reference NSA-2024-0019, which was fully executed on January 19, 2024 (the "NSA" or the "Agreement"). The parties to the NSA are Halcyon Semiconductor Aktiengesellschaft, Halcyon US Holdings Inc., Marlowe Asset Management Photonics Inc., and the United States of America, acting through the U.S. Department of the Treasury, the U.S. Department of Defense, and the U.S. Department of Energy, each in its capacity as a co-lead agency for purposes of the Committee's review of the Transaction.
The NSA establishes a comprehensive framework of mitigation measures designed to address the national security concerns identified by the Committee in connection with the Transaction. These mitigation measures are tailored to the specific risks presented by the Transaction and reflect the Committee's assessment of the most effective and least intrusive means of resolving those concerns while permitting the Transaction to proceed.
The key provisions of the NSA include, but are not limited to, the following:
(a) Governance Requirements. The NSA requires that the board of directors of VPI (or its successor entity) be reconstituted following the closing of the Transaction to include a specified number of independent directors who are United States citizens, hold active personnel security clearances at the appropriate level, and are approved by the Committee's designated member agencies. In addition, the NSA mandates the establishment and maintenance of a Government Security Committee ("GSC") within VPI, composed entirely of approved directors, which shall exercise exclusive authority over all matters relating to VPI's classified and sensitive government contracts, facilities, and personnel.
(b) Technology Control Plan. The NSA requires the development and implementation of a Technology Control Plan ("TCP") designed to prevent the unauthorized transfer, disclosure, or export of VPI's controlled technologies, intellectual property, proprietary data, and technical information to HSAG or any other foreign person. The TCP must be approved by the Committee's designated member agencies prior to the closing of the Transaction and is subject to periodic review and update.
(c) Cybersecurity Requirements. The NSA imposes enhanced cybersecurity requirements on VPI, including the implementation and maintenance of cybersecurity policies, procedures, and technical safeguards that meet or exceed the standards established by the Committee and are consistent with applicable government cybersecurity frameworks, including NIST SP 800-171 and CMMC Level 2 requirements, as applicable.
(d) Facility Access Restrictions. The NSA restricts the access of HSAG personnel and other non-approved foreign nationals to certain VPI facilities, including any facilities that hold facility security clearances under the National Industrial Security Program or that are used in the performance of classified or sensitive government contracts.
(e) Data Segregation. The NSA requires the physical and logical segregation of certain categories of VPI data, including classified information, controlled unclassified information, export-controlled technical data, and other sensitive government-related data, from HSAG's broader corporate information technology infrastructure and systems.
(f) Third-Party Compliance Monitoring. The NSA designates Whitmore Compliance Group LLC as the approved third-party compliance monitor (the "Monitor"), responsible for independently assessing and reporting on the Transaction Parties' compliance with the terms and conditions of the NSA. The Monitor's obligations, authority, access rights, and reporting requirements are set forth in the NSA and in the Third-Party Compliance Monitor Agreement executed contemporaneously therewith.
(g) Personnel Continuity Obligations. The NSA establishes certain requirements with respect to the retention, removal, and replacement of key VPI personnel, including personnel holding security clearances and personnel involved in the performance of sensitive government contracts, and requires prior notification to the Committee's designated member agencies before any material changes to such personnel are implemented.
(h) Pre-notification Requirements for Material Changes. The NSA requires the Transaction Parties to provide advance written notification to the Committee's designated member agencies prior to implementing any material changes to VPI's corporate structure, governance, operations, facilities, security posture, or business activities that could affect the national security concerns addressed by the NSA.
The foregoing summary is provided for reference purposes only and does not modify, limit, or supersede any provision of the NSA. The terms and conditions of the NSA, as set forth in docket reference NSA-2024-0019, shall govern in all respects.
III. Committee Determination
Having completed its review and investigation of the Transaction, and having considered the national security factors set forth in 50 U.S.C. § 4565(f) and 31 C.F.R. § 800.503, the Committee has determined that the Transaction, as mitigated by the terms and conditions of the NSA (NSA-2024-0019), does not present any unresolved national security concerns. The Committee has therefore concluded all action with respect to the Transaction under section 721 of the Defense Production Act of 1950, as amended.
This determination is based on the assumption that all representations made by the Transaction Parties in the joint voluntary notice dated July 14, 2023, all supplemental submissions provided in response to the Committee's requests for additional information, and all certifications provided in connection with CFIUS Case No. CFIUS-023-07-3841 are accurate and complete in all material respects, and that the Transaction will be consummated in the manner described therein. Any material inaccuracy or incompleteness in such representations, submissions, or certifications may affect the validity of this determination, as set forth in Section V below.
IV. Safe Harbor
Pursuant to 50 U.S.C. § 4565(b)(1)(D), the Transaction, as described in the joint voluntary notice and supplemental filings submitted in connection with CFIUS Case No. CFIUS-023-07-3841, shall not be subject to additional review under section 721 of the Defense Production Act of 1950, as amended, provided that:
(i) the Transaction is consummated substantially in accordance with the terms described in the joint voluntary notice and supplemental submissions filed with the Committee;
(ii) the Transaction Parties comply in all material respects with the terms and conditions of the NSA (NSA-2024-0019), as such terms and conditions may be amended, modified, or supplemented in accordance with the provisions of the NSA; and
(iii) no material misstatement of fact or material omission is identified in the joint voluntary notice or any supplemental filing submitted to the Committee in connection with CFIUS Case No. CFIUS-023-07-3841.
The Transaction Parties are advised that the safe harbor described in this Section IV applies solely to the specific Transaction as reviewed and described in the joint voluntary notice and supplemental filings referenced herein. The safe harbor does not extend to any future transaction, acquisition, investment, or corporate reorganization involving any of the Transaction Parties or their affiliates that is not covered by the joint voluntary notice filed in connection with CFIUS Case No. CFIUS-023-07-3841. Any such future transaction may independently constitute a covered transaction subject to review under section 721 of the DPA and the regulations at 31 C.F.R. Part 800, and the Transaction Parties are encouraged to consult with the Committee regarding any such future transaction to determine whether a new filing is required or advisable.
V. Ongoing Obligations and Compliance Monitoring
The Transaction Parties are reminded that, upon and following the closing of the Transaction, they remain bound by all obligations set forth in the NSA (NSA-2024-0019), including all obligations that survive the closing or that are triggered by post-closing events or conditions. Compliance with the NSA is a continuing obligation, and the Transaction Parties are expected to devote appropriate resources and attention to ensuring full and timely compliance with all NSA provisions.
The Defense Counterintelligence and Security Agency ("DCSA") shall serve as the designated monitoring agency for purposes of the NSA. DCSA, in coordination with the Committee's co-lead agencies, will oversee the Transaction Parties' ongoing compliance with the NSA and may conduct site visits, audits, inspections, and other compliance-related activities as provided for in the NSA and applicable regulations.
Whitmore Compliance Group LLC has been approved by the Committee as the third-party compliance monitor for purposes of the NSA. The Monitor's obligations, access rights, reporting schedule, and other terms of engagement are set forth in the NSA and in the Third-Party Compliance Monitor Agreement. The Transaction Parties are required to cooperate fully with the Monitor and to provide the Monitor with all access, information, and assistance reasonably necessary for the Monitor to carry out its compliance assessment and reporting functions.
The Committee, acting through its member agencies, reserves the right to take any and all enforcement actions available under 50 U.S.C. § 4565 and the regulations at 31 C.F.R. Part 800 in the event of a breach of the NSA or any failure by the Transaction Parties to comply with the terms and conditions thereof. Available enforcement actions include, but are not limited to, the imposition of civil monetary penalties of up to the value of the Transaction for each violation, the seeking of injunctive or other equitable relief in federal court, and the imposition of mandated divestiture or other remedial measures as provided in Section 12.3 of the NSA and 50 U.S.C. § 4565(l). The Committee's enforcement authority is in addition to, and not in lieu of, any other enforcement authority available to the United States Government under applicable law.
VI. Reservation of Rights and Limitations
This letter does not constitute a determination by the Committee that the Transaction is lawful under any provision of law other than section 721 of the Defense Production Act of 1950, as amended. The Committee's review under section 721 is limited to an assessment of the national security implications of the Transaction, and this letter addresses solely the Committee's conclusions with respect to those national security implications.
The Transaction Parties remain independently responsible for compliance with all applicable federal, state, and local laws and regulations, including but not limited to the International Traffic in Arms Regulations ("ITAR"), 22 C.F.R. Parts 120–130; the Export Administration Regulations ("EAR"), 15 C.F.R. Parts 730–774; the National Industrial Security Program Operating Manual ("NISPOM"), 32 C.F.R. Part 117; the Federal Acquisition Regulation ("FAR"), 48 C.F.R. Chapter 1; the regulations and requirements of the Committee on Foreign Investment in the United States to the extent not addressed in this letter; and any other applicable regulatory requirements, including those administered by the U.S. Department of State, Directorate of Defense Trade Controls, the U.S. Department of Commerce, Bureau of Industry and Security, the U.S. Department of Defense, and the Nuclear Regulatory Commission, as applicable.
This letter does not address, and the Committee expresses no view on, whether the Transaction is consistent with any other legal requirement, regulatory approval, or governmental authorization that may be applicable to the Transaction or to any of the Transaction Parties, including but not limited to antitrust clearance, securities regulatory approvals, foreign government regulatory approvals, or any other approval or authorization that may be required in connection with the consummation of the Transaction.
The Committee's determination set forth in this letter is based on the information available to the Committee as of the date of this letter. Pursuant to 31 C.F.R. § 800.601, the Committee may reopen its review or investigation of a covered transaction if the Committee subsequently learns of any material misstatement of fact, material omission, or material change in circumstances that could have affected the Committee's determination. In the event that the Committee determines that any such material misstatement, omission, or change in circumstances has occurred, the safe harbor described in Section IV of this letter may no longer apply, and the Transaction may be subject to additional review, investigation, or action under section 721 of the DPA and the regulations at 31 C.F.R. Part 800.
VII. Confidentiality
This letter and the existence, substance, and terms of the Committee's review, investigation, and determination are confidential pursuant to 50 U.S.C. § 4565(c) and 31 C.F.R. § 800.802. All information provided to the Committee in connection with CFIUS Case No. CFIUS-023-07-3841, including the joint voluntary notice, supplemental submissions, and all communications between the Transaction Parties and the Committee, is likewise subject to the confidentiality protections of 50 U.S.C. § 4565(c) and 31 C.F.R. § 800.802.
Notwithstanding the foregoing, the Transaction Parties may disclose the fact that the Committee has concluded its review and has determined that the Transaction does not present unresolved national security concerns, including in public filings with the U.S. Securities and Exchange Commission, press releases, or other public announcements, provided that any such disclosure is consistent with the requirements and limitations set forth in 31 C.F.R. § 800.802. In particular, the Transaction Parties should not disclose the specific substance of the Committee's national security analysis, the particular national security concerns identified by the Committee, or the specific terms and conditions of the NSA, except to the extent that such disclosure is expressly authorized by the Committee or required by applicable law.
Any questions regarding permissible disclosures, the scope of confidentiality obligations, or the appropriate characterization of the Committee's determination in public filings or announcements should be directed to the Office of Investment Security at the address and contact information set forth in Section VIII below.
VIII. Contact Information
Any questions regarding this letter, the Committee's determination, the NSA (NSA-2024-0019), or any other matter relating to CFIUS Case No. CFIUS-023-07-3841 should be directed to:
Staff Chairperson Committee on Foreign Investment in the United States U.S. Department of the Treasury Office of Investment Security 1500 Pennsylvania Avenue NW Washington, DC 20220 Telephone: (202) 622-1860
Email: CFIUS@treasury.gov
The Transaction Parties are encouraged to contact the Office of Investment Security promptly with any questions, concerns, or developments that may arise in connection with the Transaction, the NSA, or the Committee's determination.
•
Sincerely,
COMMITTEE ON FOREIGN INVESTMENT IN THE UNITED STATES
By: ________
Staff Chairperson Committee on Foreign Investment in the United States U.S. Department of the Treasury Office of Investment Security
cc:
Stefan Lohse, Esq. General Counsel Halcyon Semiconductor Aktiengesellschaft Industriestraße 44 01099 Dresden, Saxony Federal Republic of Germany
Dr. Nathan Trevorrow Chief Executive Officer Marlowe Asset Management Photonics Inc. 7400 Ridgeline Parkway Colorado Springs, CO 80919
U.S. Department of Defense (CFIUS co-lead agency)
U.S. Department of Energy (CFIUS co-lead agency)
Defense Counterintelligence and Security Agency (monitoring agency)
CALDERWOOD & HARKNESS LLP — INTERNAL FILE COPY
RECEIVED: January 26, 2024
This file copy is maintained in accordance with Calderwood & Harkness LLP document retention policies. This document is confidential pursuant to 50 U.S.C. § 4565(c) and is subject to attorney-client privilege and work product protections. Do not distribute without authorization from the responsible attorney.
Field | Detail
Matter | Halcyon Semiconductor AG / Marlowe Asset Management Photonics Inc. — CFIUS Filing & Mitigation
CFIUS Case No. | CFIUS-023-07-3841
NSA Docket | NSA-2024-0019
Filed By | Margaret "Peggy" Ashworth, Of Counsel, National Security & CFIUS
Office | Calderwood & Harkness LLP, 1750 K Street NW, Suite 800, Washington, DC 20006
Date Received | January 26, 2024
Document Type | CFIUS Clearance Letter (Safe Harbor)
Filing Status | File Copy — Original Retained

DEPARTMENT OF THE TREASURY WASHINGTON, D.C.

COMMITTEE ON FOREIGN INVESTMENT IN THE UNITED STATES

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