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CALDERWOOD & HARKNESS LLP

1750 K Street NW, Suite 800 Washington, DC 20006 Telephone: (202) 555-7400 Facsimile: (202) 555-7401

399 Park Avenue, 31st Floor New York, NY 10022 Telephone: (212) 555-3200 Facsimile: (212) 555-3201

www.calderwoodharkness.com

PRIVILEGED AND CONFIDENTIAL ATTORNEY-CLIENT COMMUNICATION

November 15, 2023

VIA SECURE ELECTRONIC TRANSMISSION

Stefan Lohse General Counsel (Chefjustitiar) Halcyon Semiconductor Aktiengesellschaft Industriestraße 44 01099 Dresden, Saxony Germany

Re: National Security Agreement Negotiation — Status Update Acquisition of Marlowe Asset Management Photonics Inc. by Halcyon Semiconductor AG CFIUS Case No. CFIUS-023-07-3841 / NSA Docket No. NSA-2024-0019

Dear Stefan,

I am writing to provide you and the Halcyon Semiconductor AG ("HSAG") team with a comprehensive status report on the ongoing National Security Agreement ("NSA") negotiations with the Committee on Foreign Investment in the United States ("CFIUS") in connection with the proposed acquisition of 100% of the outstanding equity of Marlowe Asset Management Photonics Inc. ("VPI") by Halcyon US Holdings Inc., a Delaware subsidiary of HSAG, for aggregate cash consideration of $1.42 billion (the "Transaction"), pursuant to the Stock Purchase Agreement executed on June 10, 2023 (the "SPA"). This update covers the first two formal negotiation sessions, which were held on November 9 and November 13, 2023, respectively.

As you will recall, on October 20, 2023, CFIUS formally communicated four preliminary national security concerns arising from the Transaction. Following the Committee's identification of those concerns, the CFIUS staff circulated an initial draft NSA to the parties on November 3, 2023. Our team, in close coordination with you and your colleagues, prepared and submitted HSAG's first comprehensive counterproposal — the buyer's redline — on November 9, 2023, which was also the date of the first in-person negotiation session at the U.S. Department of the Treasury.

The NSA has been assigned the prospective docket number NSA-2024-0019 by the CFIUS staff for tracking and correspondence purposes. This letter is organized to address: (1) a summary of the two negotiation sessions to date; (2) areas of significant progress; (3) outstanding issues requiring further negotiation; (4) coordination with VPI's counsel; (5) implications for the Transaction timeline; (6) recommended next steps and actions requiring client decision; and (7) a brief update on fees and budget. Peggy Ashworth and David Caruso have contributed substantially to the analysis and recommendations set forth herein.

1. Summary of Negotiation Sessions

A. First Session — November 9, 2023

The first in-person negotiation session was held at the U.S. Department of the Treasury, Office of Investment Security, in Washington, D.C. The session lasted approximately four hours and was constructive in tone and substance.

Participants. On the CFIUS side, the session was attended by representatives from the Department of the Treasury (acting in its capacity as CFIUS Chair), the Department of Defense ("DoD"), and the Department of Energy ("DOE"). Treasury and DoD have been designated as the co-lead agencies for this review, reflecting the nature of VPI's classified defense programs and its dual-use semiconductor technologies. On HSAG's side, the session was attended by Margaret ("Peggy") Ashworth and Lt. Col. (Ret.) David Caruso of our firm, with you, Stefan, participating by secure video conference from Dresden. Harrison Whitfield of Wethersfield & Gale LLP ("W&G"), counsel to VPI and the sellers, also participated in his capacity under the joint notice framework.

Key Topics Covered. The session opened with an overview of HSAG's counterproposal, in which Peggy Ashworth walked the CFIUS staff through the principal departures from the government's initial draft and the rationale underlying each proposed modification. Discussion then turned to the following substantive areas:

• Board Governance Provisions: A detailed initial discussion of HSAG's proposed reconstitution of VPI's post-closing board of directors, including the composition, qualifications, and authority of the proposed Government Security Committee.

• Technology Control Plan Framework: Introduction of HSAG's proposed Technology Control Plan ("TCP") framework, which would govern the handling and dissemination of controlled technical data, ITAR-regulated defense articles, and EAR-controlled items within VPI and between VPI and HSAG.

• Third-Party Monitor Requirements: A preliminary exchange of views on the scope, authority, and selection process for the third-party compliance monitor contemplated by the CFIUS draft.

Tone and Reception. We were encouraged by the overall tone of the first session. CFIUS staff expressly acknowledged HSAG's substantive engagement and the thoroughness of the buyer's redline. The dialogue was productive, and several areas of conceptual alignment were identified early in the discussion, particularly with respect to the board governance architecture. While the CFIUS staff reserved their positions on a number of specific provisions, they did not reject any of HSAG's structural proposals outright, which we regard as a positive signal.

B. Second Session — November 13, 2023

The second negotiation session was held via secure video conference on November 13, 2023. This session was more narrowly focused and technical in nature, running approximately three and a half hours.

Topics Covered. The session was devoted to deeper-dive discussions of the following areas:

• TCP Mechanics: Detailed discussion of the operational mechanics of the Technology Control Plan, including the processes for classifying information, controlling access, and documenting transfers.

• Cybersecurity Requirements: Examination of the cybersecurity standards to be imposed on VPI's IT infrastructure, including compliance benchmarks, testing protocols, and incident reporting timelines.

• Penalty and Enforcement Provisions: Review of the penalty provisions in the CFIUS draft, including civil penalty amounts, cure periods, notice requirements, and the circumstances under which CFIUS may mandate divestiture.

Specific Concerns Raised by CFIUS Agencies. Two specific agency-level concerns were raised during this session that warrant your attention:

First, DoD representatives raised specific concerns regarding facility access to VPI's fabrication facility located at 9200 Innovation Boulevard, Albuquerque, New Mexico 87113 (the "Albuquerque Fab"). In particular, DoD focused on clean room Sections C-7 through C-12 within the Albuquerque Fab, where classified work is currently performed under existing DoD contracts. DoD's concern centers on ensuring that physical and personnel access controls for these sections are maintained at current levels and that no HSAG personnel — including HSAG-designated board members — have unsupervised access to these areas absent the appropriate security clearances and programmatic need-to-know.

Second, DOE representatives focused on dual-use technology transfer controls, particularly with respect to items classified under Export Administration Regulations ("EAR") Export Control Classification Number ("ECCN") 3A001 (certain microprocessor microcircuits and semiconductor devices). DOE emphasized the importance of ensuring that the TCP adequately addresses the transfer of dual-use technical data and technology that, while not classified, is subject to EAR controls and may be of strategic significance.

Informal Feedback on HSAG's First Redline. During the second session, CFIUS staff provided informal feedback on several specific provisions in HSAG's first buyer's redline. While these indications were expressly characterized as preliminary and non-binding, they were informative. The staff identified areas where the government may have flexibility to accommodate HSAG's proposals and areas where the government's position is firm and unlikely to change. I address these in the substantive sections below.

2. Areas of Significant Progress

We are pleased to report that meaningful progress has been achieved across several of the most structurally important components of the NSA. The following areas reflect either substantial agreement or strong conceptual alignment between the parties.

A. Board Governance and Government Security Committee (GSC)

Substantial agreement has been reached on the core architecture of VPI's post-closing board reconstitution, which we regard as one of the most critical elements of the NSA framework.

Agreed Framework. The parties have agreed in principle that VPI's board of directors will consist of five (5) members, structured as follows:

• Three (3) "Security Board Members," each of whom must be a United States citizen holding or eligible for a TOP SECRET/Sensitive Compartmented Information ("TS/SCI") security clearance. One of the three Security Board Members shall be designated as an independent Security Director — that is, an individual who is not a current or former employee of either VPI or HSAG.

• Two (2) HSAG designees, who may be non-U.S. persons but who may not hold or access classified information or ITAR-controlled technical data. The HSAG designees will participate in full board deliberations on unclassified commercial and financial matters.

Government Security Committee. The three Security Board Members will constitute a Government Security Committee ("GSC"). The GSC will have exclusive authority over all classified and ITAR-controlled programs, personnel security decisions (including the hiring, reassignment, and termination of individuals holding security clearances), and all facility security matters. The GSC's decisions on matters within its exclusive jurisdiction will not require approval or ratification by the full board or by HSAG.

Proposed Nominees. CFIUS has been receptive to HSAG's proposed nominees for two of the three Security Board Member positions:

• Col. (Ret.) Bryce Hendrickson, currently serving as VPI's Vice President of Government Programs and Facility Security Officer ("FSO"), who holds an active TS/SCI security clearance. Col. Hendrickson's deep institutional knowledge of VPI's classified programs and his existing relationship with DCSA make him a natural choice for continued service on the post-closing board.

• Adrienne Delacroix, currently serving as an independent member of VPI's board of directors, who holds an active SECRET-level security clearance. Ms. Delacroix has served on the VPI board since 2019 and brings significant experience in defense-sector governance.

The third nominee — the independent Security Director — remains under discussion. CFIUS has indicated that it wishes to review the qualifications, background, and clearance eligibility of any candidate proposed for this position before providing its approval. We recommend that HSAG identify and submit credentials for a proposed candidate at the earliest opportunity, as this is likely to be a condition for final agreement on the board governance provisions.

Remaining Open Sub-Issues. While the structural framework is largely agreed, several subsidiary issues remain open:

• Delineation of GSC vs. Full Board Authority: The precise boundary between matters requiring GSC-only approval and matters subject to full board approval has not yet been fully defined. This is primarily a drafting exercise, but there are substantive questions — for example, whether certain commercial contracts with potential national security implications (e.g., supply agreements involving controlled items) should require GSC approval, full board approval, or both.

• Unclassified Summaries for HSAG Designees: HSAG has proposed that the HSAG-designated board members receive unclassified summaries of GSC decisions that affect VPI's overall business strategy — for example, decisions regarding the scope or direction of classified programs that may have budgetary or resource-allocation implications for VPI's commercial operations. CFIUS staff took this proposal under advisement. We believe this is a reasonable request and anticipate that some accommodation can be reached, possibly with CFIUS approval of the form and content of such summaries on a case-by-case basis.

B. Technology Control Plan (TCP) Framework

Good progress has been made on the overall TCP framework. The parties have reached agreement in principle on the following foundational elements:

• HSAG and VPI must implement a Technology Control Plan that prohibits the transfer of VPI technical data — including ITAR Category XI(a)(3) defense articles and EAR ECCN 3A001, 3A991, and 3E001 items — to any non-U.S. person without prior U.S. government authorization (whether in the form of a license, agreement, or exemption under the applicable regulatory framework).

• The TCP will be designed to integrate with, and build upon, VPI's existing ITAR/EAR export compliance program and VPI's current registration with the Directorate of Defense Trade Controls ("DDTC") under Registration No. M-24817. This integration approach should minimize operational disruption while ensuring that NSA-specific controls are layered on top of the existing compliance infrastructure.

• Certain unclassified, non-export-controlled commercial technical information may be shared between VPI and HSAG for legitimate business purposes — such as financial reporting, commercial product planning for non-controlled items, and general corporate administration — through defined and documented channels. This carve-out is important to HSAG's ability to manage VPI as an operating subsidiary.

Open Sub-Issues on TCP. Several important definitional and procedural questions remain unresolved:

• Scope of "Controlled Technical Data": The precise definition of "Controlled Technical Data" under the TCP has not yet been finalized. CFIUS's draft employs a broad formulation that could encompass information beyond what is technically subject to ITAR or EAR controls. HSAG's counterproposal sought to align the TCP definition more closely with the regulatory definitions under 22 C.F.R. § 120.10 (technical data under ITAR) and 15 C.F.R. § 772.1 (technology under EAR).

• Dual-Use Information Below the EAR De Minimis Threshold: There is an open question as to whether certain dual-use information that falls below the EAR de minimis threshold (i.e., items with less than 25% controlled U.S.-origin content under 15 C.F.R. § 734.4) should nevertheless be subject to TCP restrictions. CFIUS's draft would include such information; HSAG's counterproposal argued that inclusion of sub-threshold items would be operationally burdensome and inconsistent with the regulatory framework.

• Access Request Procedures: The parties have not yet agreed on the procedures by which HSAG personnel may request access to specific non-classified VPI technical information that may fall within the TCP's scope. HSAG has proposed a streamlined request-and-approval process administered by the GSC, with defined timelines for review.

C. Personnel Continuity

The parties have reached conceptual agreement on personnel continuity requirements. Under the agreed framework, certain key VPI personnel must remain employed by VPI for a minimum of twenty-four (24) months following the closing of the Transaction. The key personnel identified are:

• Dr. Nathan Trevorrow, Chief Executive Officer of VPI;

• Marissa Sung-Avila, President and Chief Operating Officer of VPI; and

• Col. (Ret.) Bryce Hendrickson, Vice President of Government Programs and Facility Security Officer.

In the event that any such individual departs VPI during the 24-month period (whether by resignation, termination, or otherwise), any replacement must be approved by both the GSC and the Defense Counterintelligence and Security Agency ("DCSA"). HSAG has found this requirement acceptable, as it aligns with HSAG's own operational plans for post-closing management continuity at VPI.

A minor open point remains regarding whether "constructive termination" scenarios — that is, situations in which a key person's responsibilities are materially diminished or their working conditions are materially altered such that the individual resigns — trigger the replacement-approval requirement. We expect this can be resolved through appropriate drafting.

D. Facility Security Clearance (FCL) Continuity

The parties have reached agreement on facility security clearance continuity provisions, and no material disagreements remain on this topic. Specifically:

• VPI will retain its existing Facility Security Clearance ("FCL") at the SECRET level, associated with CAGE Code 7VK92.

• The NSA itself will function as a Special Security Agreement ("SSA") equivalent, satisfying the Foreign Ownership, Control, or Influence ("FOCI") mitigation requirements under the National Industrial Security Program Operating Manual ("NISPOM").

• Col. (Ret.) Bryce Hendrickson will continue to serve as VPI's Facility Security Officer.

• DCSA will serve as the monitoring agency under the NSA, responsible for ongoing oversight of VPI's compliance with facility security requirements.

This is a significant area of alignment and reflects CFIUS's confidence that the NSA framework, taken as a whole, can adequately mitigate FOCI concerns arising from HSAG's acquisition of VPI.

3. Outstanding Issues Requiring Further Negotiation

Notwithstanding the progress described above, several important issues remain unresolved and will require further negotiation. We address each in turn, together with our assessment of the parties' respective positions and our recommended approach.

A. Third-Party Compliance Monitor — Scope and Selection

The role, authority, and selection of the third-party compliance monitor remains one of the most significant open issues in the NSA negotiation.

CFIUS's Position. The CFIUS draft NSA contemplates a third-party compliance monitor vested with broad audit and investigative authority. Under the draft, the monitor would have the power to conduct unannounced inspections of VPI and HSAG facilities, access all records of both VPI and HSAG (without limitation), interview employees at all levels, and report directly to the CFIUS monitoring agencies (Treasury, DoD, and DCSA) without prior review by the parties. The monitor's mandate, as drafted, is essentially open-ended.

HSAG's Counterproposal. HSAG's first buyer's redline sought to narrow the monitor's scope in two principal respects. First, HSAG proposed that the monitor's function be limited to annual compliance audits conducted against defined audit parameters, rather than an open-ended investigative mandate. Second, HSAG proposed that the monitor's access to records at the HSAG parent level — as distinguished from VPI — be limited to records directly related to NSA compliance obligations, rather than encompassing all HSAG records without limitation. The rationale for this limitation is that HSAG's global corporate records encompass a wide range of commercially sensitive information unrelated to VPI or the NSA, and providing a U.S.-appointed monitor with unrestricted access to such records raises significant concerns under German data protection law (including the GDPR) and could compromise HSAG's proprietary business information.

Current Status. CFIUS has not yet agreed to these limitations. DoD representatives, in particular, expressed a preference for broader monitor authority, citing the sensitive nature of VPI's classified programs and the government's interest in maintaining robust oversight capabilities. We anticipate that this issue will be the subject of further negotiation, and we believe there may be room for compromise — for example, a framework in which the monitor conducts annual comprehensive audits with defined scope, but retains the ability to conduct supplemental, targeted reviews upon a showing of reasonable cause, subject to advance notice to the parties.

Monitor Candidate Selection. CFIUS has informally identified Whitmore Compliance Group LLC ("WCG") as a potential third-party monitor. WCG is led by Gerald Whitmore, a former supervisory special agent in the FBI's Counterintelligence Division, and maintains offices at 1300 Crystal Drive, Suite 710, Arlington, Virginia 22202. Mr. Whitmore has served as a CFIUS-appointed monitor in at least two prior semiconductor-sector transactions, which likely accounts for CFIUS's familiarity with and preference for his firm.

HSAG has not yet formally agreed to the selection of WCG. We are currently conducting due diligence on WCG's qualifications, track record, and any potential conflicts of interest (including any existing engagements with competitors of HSAG or VPI). Peggy Ashworth and David Caruso are leading this review, and we expect to have preliminary findings available within the next two weeks. Formal monitor selection approval is expected to be addressed at the next negotiation session, likely in early December.

B. Monitor Cost Allocation

CFIUS's Position. The CFIUS draft NSA requires HSAG to bear all costs of the third-party compliance monitor, which is consistent with standard CFIUS practice. The draft contains no cap on monitor fees and no mechanism for cost review or adjustment.

Preliminary Cost Indications. Based on informal discussions with CFIUS staff and our own experience with semiconductor-sector NSA monitors, we estimate that the annual monitor fee will fall in the range of $1.0 million to $1.5 million per year. CFIUS staff informally referenced $1.2 million per year as a benchmark figure for semiconductor-sector NSA engagements of comparable complexity. Over the anticipated life of the NSA, this represents a significant ongoing compliance cost.

HSAG's Counterproposal. HSAG's first redline accepted the principle that HSAG will bear the costs of the monitor, but sought two modifications: (a) a cap on annual monitor fees (HSAG proposed an initial annual cap of $1.3 million, subject to adjustment); and (b) a mechanism for periodic cost review and adjustment — specifically, a CPI-based escalation formula rather than uncapped fee increases at the monitor's discretion.

Current Status. This issue remains open. We will continue to negotiate a defined fee structure with CPI-based adjustment. We request that HSAG confirm its acceptable range for annual monitor costs so that we may calibrate our negotiating position accordingly.

C. Penalty Provisions

The penalty and enforcement provisions of the NSA are among the most significant and contentious open issues.

CFIUS's Position. The CFIUS draft NSA includes the following penalty provisions:

• Civil penalties of up to $250,000 per violation per day for any breach of the NSA's terms;

• Injunctive relief, including specific performance of NSA obligations;

• Mandated divestiture of VPI as an ultimate enforcement remedy for material or repeated violations.

HSAG's Counterproposal. HSAG's first redline sought several modifications to the penalty provisions:

(a) A cure period of at least thirty (30) days before penalties begin to accrue for non-willful violations, allowing HSAG and VPI a reasonable opportunity to identify and remedy any inadvertent breach.

(b) A distinction between "material" violations (i.e., breaches that substantively compromise national security protections) and "immaterial" or "technical" violations (i.e., procedural or administrative lapses that do not compromise national security), with the $250,000/violation/day penalty scale reserved for material breaches.

(c) A requirement that CFIUS provide written notice specifying the nature and circumstances of the alleged violation before penalties begin to accrue, ensuring that the parties have a clear understanding of the government's concerns and an opportunity to respond.

(d) Limitation of the mandated divestiture remedy to cases of willful and repeated material breaches, rather than any material or repeated violation.

CFIUS Staff Feedback. CFIUS staff indicated that the $250,000 per violation per day figure is a standard penalty amount in NSA agreements and is unlikely to be reduced. However, the staff acknowledged that there may be flexibility on cure period provisions and notice requirements — which, in our view, represents the most productive avenue for compromise. If we can secure a meaningful cure period (30 days for non-willful violations) and a written notice requirement, the practical exposure to substantial penalties for inadvertent or technical violations would be significantly reduced.

DoD representatives were firm, however, that the mandated divestiture remedy must remain available as an ultimate enforcement mechanism and were unwilling to accept the "willful and repeated" qualifier proposed by HSAG. DoD's position is that the availability of divestiture — even if it is expected to be invoked only in extreme circumstances — is essential to the credibility of the enforcement framework.

Our Recommendation. We recommend that at the next negotiation session, HSAG's position focus on the cure and notice mechanics as a practical compromise. Specifically, we would propose:

• A 30-day cure period for non-willful violations, with penalties accruing only after the cure period expires without remediation;

• A mandatory written notice from CFIUS specifying the alleged violation, to be provided prior to the commencement of any penalty period;

• A tiered penalty structure that distinguishes between material violations ($250,000/day) and administrative/procedural violations (a lower daily amount, such as $25,000/day);

• Acceptance of the divestiture remedy as available in principle, but with a negotiated standard (e.g., "material breach that remains uncured after [60/90] days and that results in demonstrable harm to national security") rather than the current open-ended formulation.

D. Cybersecurity Requirements — Specific Standards

The parties have agreed in principle that VPI must maintain compliance with NIST Special Publication 800-171 (Protecting Controlled Unclassified Information in Nonfederal Systems and Organizations), which is the applicable cybersecurity standard for defense contractors handling CUI. The parties have also agreed that VPI will undergo annual third-party penetration testing, which HSAG accepts.

Two specific cybersecurity issues remain open:

Incident Reporting Timeline. The CFIUS draft NSA requires that VPI report any cybersecurity incident to DCSA within twenty-four (24) hours of discovery. HSAG's counterproposal requested a seventy-two (72) hour reporting window, which is consistent with prevailing industry practice and, notably, with the reporting timeline established under DFARS clause 252.204-7012 (Safeguarding Covered Defense Information and Cyber Incident Reporting). HSAG's position is that a 24-hour reporting requirement is impractical given the need to conduct an initial assessment to determine whether an event constitutes a reportable incident and to gather sufficient information to provide a meaningful report. This remains under discussion.

IT System Separation. The CFIUS draft requires that VPI's IT systems be "physically and logically separated" from HSAG's global network, with no shared cloud infrastructure of any kind. HSAG has accepted the logical separation requirement and agrees that all systems handling classified information, CUI, and export-controlled technical data must be isolated from the HSAG network. However, HSAG has raised practical concerns about the "no shared cloud infrastructure" prohibition as currently drafted, because it may prevent the use of common enterprise tools — such as financial reporting platforms, human resources information systems, and general corporate communication tools — that do not involve controlled technical data and are essential to HSAG's management of VPI as a subsidiary. HSAG is seeking a carve-out for non-sensitive business systems, subject to GSC approval and ongoing monitoring, to allow VPI to operate on shared platforms for non-controlled business functions. This is discussed further in the context of data segregation below.

E. Data Segregation — Implementation Details

Data segregation is closely related to the cybersecurity requirements discussed above but is treated as a separate provision in the NSA.

CFIUS's Position. The CFIUS draft requires complete physical and logical separation of all VPI IT systems from HSAG's global network, without exception.

HSAG's Counterproposal. HSAG's first redline acknowledged the imperative of separation for systems handling classified and export-controlled data, but proposed a tiered approach:

• Tier 1 (Full Separation): All IT systems handling classified information, ITAR-controlled technical data, and EAR-controlled technology would be completely physically and logically separated from HSAG's global network and from any shared cloud infrastructure. No exceptions.

• Tier 2 (Controlled Shared Access): Certain non-sensitive business applications — including human resources management, financial reporting, general corporate communications, and other administrative functions — would be permitted to operate on shared enterprise platforms, subject to appropriate access controls, GSC approval, and regular audits by the third-party monitor.

Current Status. CFIUS staff took HSAG's tiered proposal under advisement at the November 13 session and have not yet provided a firm response. We believe this is an area where a practical accommodation is possible, given that complete separation of all IT systems — including non-sensitive administrative functions — would impose significant operational costs on HSAG and is not strictly necessary to protect national security interests. We will continue to advocate for the tiered approach in the next session.

We note, however, that before we can finalize HSAG's position on this issue, we will need input from HSAG's IT leadership regarding the feasibility and cost of the various separation scenarios. We request that HSAG's CIO and CISO prepare an internal assessment of data segregation options and provide their recommended approach, including any specific shared business platforms that HSAG considers essential for the management of VPI.

F. Pre-Notification of Material Changes

CFIUS's Position. The CFIUS draft NSA requires HSAG to notify CFIUS at least thirty (30) days before any "material change" to VPI's business, including but not limited to divestitures of VPI business units or assets, entry into new foreign subcontracts, changes to cleared personnel, and modifications to facility security arrangements.

HSAG's Counterproposal. HSAG accepted the 30-day pre-notification concept in principle but raised two concerns:

• Definition of "Material Change": As drafted, the term "material change" is undefined and potentially over-broad. HSAG is concerned that the provision as written could be interpreted to require pre-notification for routine business decisions — such as hiring or reassignment of non-cleared employees, entry into ordinary-course commercial contracts, or minor changes to facility layout — that have no national security implications. HSAG has proposed that the NSA include a specific, enumerated definition of "material change" or, alternatively, a materiality threshold that limits the notification obligation to changes that could reasonably be expected to affect VPI's classified programs, controlled technical data, or facility security posture.

• Changes to Non-Cleared Personnel: HSAG proposed that changes to non-cleared personnel — i.e., VPI employees who do not hold security clearances and do not have access to classified or export-controlled information — be excluded from the pre-notification requirement entirely.

Current Status. This is an area of moderate disagreement. We expect that further drafting refinements can narrow the gap, and we intend to propose specific definitional language in the second buyer's redline.

G. Term and Sunset Provisions

CFIUS's Position. The CFIUS initial draft NSA contains no sunset provision. Under the draft as written, the NSA would remain in effect indefinitely — that is, for so long as HSAG (or any successor foreign person) retains ownership of VPI.

HSAG's Counterproposal. HSAG's first redline requested a fixed 10-year term, with an option for CFIUS to extend the NSA upon a finding that national security circumstances warrant continuation beyond the initial term.

CFIUS Staff Feedback. CFIUS staff informally indicated that a fixed sunset provision is unlikely to be accepted, as the government's position is that national security obligations should remain in effect for as long as the underlying FOCI condition persists. However, the staff acknowledged that some recent NSAs have incorporated periodic review mechanisms — for example, a comprehensive review of the NSA's terms every five (5) years, with the parties (including CFIUS) having the ability to propose modifications or, in appropriate circumstances, termination.

Our Recommendation. We recommend that HSAG propose a periodic review mechanism as a realistic compromise. Specifically, we would suggest:

• A comprehensive review of the NSA every five (5) years following execution;

• A mutual right by either party (HSAG or CFIUS) to petition for modification or termination of the NSA based on changed circumstances, including changes in the national security environment, changes in VPI's business or technology, or changes in the regulatory landscape;

• A provision that any such petition be considered in good faith by the other party, with disagreements subject to an escalation process within the CFIUS framework.

This approach preserves CFIUS's interest in maintaining ongoing national security protections while providing HSAG with a structured mechanism to seek relief from provisions that may become unnecessary or disproportionate over time.

4. Coordination with Wethersfield & Gale (VPI/Sellers' Counsel)

Harrison Whitfield of Wethersfield & Gale LLP participated in both negotiation sessions in his capacity as VPI's counsel. Given the joint notice posture — in which both HSAG and VPI are parties to the CFIUS filing — W&G's participation in the NSA negotiations is appropriate and, in our experience, has been beneficial to the process.

W&G has been cooperative and substantively aligned with HSAG on most NSA positions. This alignment reflects the shared interest of both parties in achieving CFIUS clearance on terms that permit the Transaction to close while preserving VPI's operational capabilities and government contract performance.

Notably, W&G independently raised with CFIUS staff the importance of personnel continuity provisions that protect VPI's operational stability and ongoing performance under its existing government contracts. This was a helpful intervention, as it reinforced HSAG's own position on personnel continuity from the perspective of the target company and its existing contractual obligations to the U.S. government.

On an ongoing basis, we are coordinating closely with W&G on the preparation of the next round of NSA redlines. Sandra Niehaus, the M&A partner at W&G responsible for the Transaction, is coordinating with Kenneth Morales of our firm on the implications of the NSA terms for the SPA's closing conditions, including any adjustments that may be necessary to the representations, warranties, or covenants in the SPA to reflect the final NSA terms.

5. Impact on Transaction Timeline

The NSA negotiations have direct implications for the Transaction timeline, given that CFIUS clearance is a condition to closing under the SPA.

SPA Closing Condition. Section 7.1(c) of the SPA requires CFIUS clearance as a condition to closing. Under the SPA, "CFIUS clearance" is defined to include either unconditional clearance (i.e., CFIUS determines that there are no unresolved national security concerns) or clearance subject to a mitigation agreement that is acceptable to HSAG in its reasonable discretion. Accordingly, the finalization of the NSA on terms acceptable to HSAG is a necessary predicate to closing.

Current Timeline Estimate. Based on the trajectory of the negotiations to date, we currently estimate the following timeline:

• Mid-to-Late December 2023: Final agreement on all substantive NSA terms, with only drafting and conforming changes remaining.

• January 2024: Formal execution of the NSA by all parties (HSAG, VPI, and CFIUS).

• January–February 2024: Issuance by CFIUS of a safe-harbor letter confirming that the Committee has concluded its review and that the Transaction may proceed, subject to compliance with the NSA. The safe-harbor letter is typically issued within one to two weeks following NSA execution.

• Late January–February 2024: Transaction closing.

Outside Date. The original outside date under the SPA is March 31, 2024. Based on our current trajectory, we do not anticipate that the NSA negotiations will jeopardize this deadline. However, continued monitoring is warranted, and any significant delays in the remaining negotiation sessions could compress the available timeline. We will alert you immediately if our assessment of the timeline changes.

Earnout Provisions. We note for completeness that the earnout provisions under the SPA — providing for contingent consideration of up to $85 million in two tranches ($50 million tied to CY2024 government-contract revenue milestones and $35 million tied to CY2025 government-contract revenue milestones) — are not affected by the NSA negotiation timeline, as the earnout milestones are measured post-closing and are based on VPI's operational performance during the relevant measurement periods.

6. Next Steps and Recommended Actions

A. Immediate Actions

We propose the following immediate actions:

1. Second Buyer's Redline. Calderwood & Harkness will prepare the second buyer's redline of the NSA, incorporating the positions discussed at the November 9 and November 13 sessions, as well as the recommendations set forth in this letter. We intend to circulate a draft of the second redline to you and Prof. Dr. Schilling's team for review before submitting it to CFIUS, and we anticipate submission to CFIUS prior to the next scheduled negotiation meeting.

2. Monitor Due Diligence. Peggy Ashworth and David Caruso will conduct due diligence on Whitmore Compliance Group LLC as the proposed third-party monitor, including a review of WCG's qualifications, personnel, prior CFIUS monitor engagements, and any potential conflicts of interest. We will report our findings to you as soon as they are available.

3. HSAG Internal Assessment — Cybersecurity and Data Segregation. We request that HSAG prepare an internal assessment of the operational and budgetary impact of the proposed cybersecurity and data segregation requirements, including an evaluation of the feasibility of full IT system separation versus the tiered approach proposed by HSAG. We recommend that this assessment be coordinated with HSAG's CIO and CISO, as their technical input will be essential to formulating a credible and defensible position for the next negotiation session.

B. Upcoming Meetings

• The next NSA negotiation session is tentatively scheduled for the week of November 20, 2023. The exact date and format (in-person or video conference) are to be confirmed by Treasury's Office of Investment Security.

• We anticipate that additional negotiation sessions will be required through mid-December to resolve all outstanding issues.

• Our target milestones are as follows: third-party monitor selection approval by early December 2023; all substantive NSA terms agreed by December 15, 2023; final NSA execution in January 2024.

C. Client Decisions Requested

In order to proceed effectively with the next phase of negotiations, we respectfully request HSAG's guidance on the following items at your earliest convenience:

1. Monitor Cost Range. Please confirm HSAG's position on the acceptable annual cost range for the third-party compliance monitor. The current benchmark suggested by CFIUS staff is approximately $1.2 million per year. We would appreciate guidance on HSAG's maximum acceptable annual fee and any conditions or limitations HSAG wishes to impose (e.g., CPI-only escalation, annual cap, scope-based fee adjustments).

2. Cybersecurity Incident Reporting Timeline. Please confirm HSAG's degree of flexibility on the cybersecurity incident reporting timeline. CFIUS's draft requires 24-hour reporting; HSAG's counterproposal requested 72 hours. If HSAG is willing to accept a compromise position (e.g., 48 hours, or 24 hours for confirmed incidents involving classified or CUI data with 72 hours for all other incidents), we would like to know before the next session.

3. Data Segregation Feasibility Assessment. Please provide HSAG's IT team assessment of data segregation feasibility, including identification of any shared business platforms that HSAG considers essential for the management of VPI, and any proposed carve-outs for non-sensitive systems that we should incorporate into the second buyer's redline.

4. Monitor Due Diligence Authorization. Please confirm HSAG's authorization for our team to proceed with due diligence on Whitmore Compliance Group LLC as the proposed third-party compliance monitor.

5. Third Security Board Member Candidate. Please identify and provide credentials for HSAG's proposed candidate for the third Security Board Member position (independent Security Director). This individual must be a U.S. citizen who holds or is eligible for a TS/SCI security clearance and who is independent of both VPI and HSAG. The candidate's résumé, clearance history, and any relevant biographical information should be submitted to us for review and transmission to CFIUS.

We recognize that several of these items may require internal deliberation within the Vorstand. We are happy to schedule a call to discuss any of these matters in advance of HSAG's final determination.

7. Fee and Budget Status

We provide the following brief update on fees incurred to date against the agreed CFIUS engagement fee cap.

The total fee cap for Calderwood & Harkness's CFIUS engagement is $3.8 million, exclusive of disbursements. Fees have been structured and budgeted across the following phases:

Fees incurred in the NSA Negotiation phase remain within the budgeted allocation. We estimate that the total remaining spend through closing will fall within the $3.8 million cap, assuming the negotiation proceeds on the timeline described above. Should unexpected complications arise that materially increase the scope or duration of the NSA negotiation, we will notify you promptly before any additional fees are incurred.

Monthly billings continue to be drawn against the $250,000 retainer. The current retainer balance and replenishment status will be reflected on our next invoice. James Prentice, in our New York office, continues to serve as billing partner for this engagement.

8. Closing Observations

We are encouraged by the trajectory of the NSA negotiations to date. While several important and complex issues remain open — particularly the scope and authority of the third-party compliance monitor, the penalty and enforcement provisions, and the cybersecurity and data segregation requirements — the areas of substantial agreement achieved on board governance, the TCP framework, personnel continuity, and FCL continuity represent the structural backbone of the NSA. These are the provisions that define the long-term governance and operational framework for VPI as a FOCI-mitigated entity, and the fact that the parties have reached alignment on these foundational issues provides a strong basis for resolving the remaining open points.

Based on our experience with CFIUS mitigation negotiations of comparable complexity, and taking into account the constructive posture exhibited by the CFIUS staff to date, we are confident that CFIUS clearance through a fully negotiated mitigation agreement is achievable on a timeline consistent with the SPA's outside date.

I am available for a call at your convenience to discuss any of the matters addressed in this letter in further detail. If Dr. Ehrhardt and Katarina Brückner would find it useful, we would be happy to arrange a direct briefing for the Vorstand at a mutually convenient time. Peggy Ashworth and David Caruso are available to join any such call and can provide additional detail on the technical and regulatory aspects of the negotiations.

Please do not hesitate to reach out at any time.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Beatrice Holloway Partner, Mergers & Acquisitions Calderwood & Harkness LLP 1750 K Street NW, Suite 800 Washington, DC 20006 Telephone: (202) 555-7418 bholloway@calderwoodharkness.com

Also at: 399 Park Avenue, 31st Floor New York, NY 10022 Telephone: (212) 555-3247

With input and contributions from:

Margaret "Peggy" Ashworth, Of Counsel, National Security & CFIUS Practice Lt. Col. (Ret.) David Caruso, Senior Counsel, Government Contracts & Export Controls

cc: (via secure electronic transmission)

Dr. Maximilian Ehrhardt, Chief Executive Officer, Halcyon Semiconductor AG Katarina Brückner, Chief Financial Officer, Halcyon Semiconductor AG Prof. Dr. Ulrich Schilling, Schilling Frey Rechtsanwälte, Berlin (German counsel to HSAG)

Enclosures: None enclosed. This letter references the following documents, which have been previously circulated to the addressee and copy recipients:

(1) Initial CFIUS Draft National Security Agreement, dated November 3, 2023; (2) HSAG First Buyer's Redline of the National Security Agreement, dated November 9, 2023; and (3) NSA Issues Matrix & Comparison Chart (maintained and updated on a rolling basis by the Calderwood & Harkness team).

PRIVILEGED AND CONFIDENTIAL — ATTORNEY-CLIENT COMMUNICATION

This letter and all attachments and enclosures are protected by the attorney-client privilege and the work product doctrine. This communication is intended solely for the use of the individual or entity to whom it is addressed. If you are not the intended recipient, you are hereby notified that any dissemination, distribution, or copying of this communication is strictly prohibited. If you have received this communication in error, please notify Calderwood & Harkness LLP immediately and destroy all copies.

Calderwood & Harkness LLP

Phase	Budgeted Amount	Status
Pre-Filing (Informal Consultations & Risk Assessment)	$420,000	Completed
Notice Preparation & Submission	$680,000	Completed
Review & Investigation (Including Responses to CFIUS Questions)	$1,100,000	Substantially Completed
NSA Negotiation (Including Drafting, Sessions & Closing)	$1,200,000	In Progress — Within Budget
Total	$3,400,000
Contingency / Reserve	$400,000	Undrawn

CALDERWOOD & HARKNESS LLP
1750 K Street NW, Suite 800 Washington, DC 20006 Telephone: (202) 555-7400 Facsimile: (202) 555-7401
399 Park Avenue, 31st Floor New York, NY 10022 Telephone: (212) 555-3200 Facsimile: (212) 555-3201
www.calderwoodharkness.com
PRIVILEGED AND CONFIDENTIAL ATTORNEY-CLIENT COMMUNICATION
November 15, 2023
VIA SECURE ELECTRONIC TRANSMISSION
Stefan Lohse General Counsel (Chefjustitiar) Halcyon Semiconductor Aktiengesellschaft Industriestraße 44 01099 Dresden, Saxony Germany
Re: National Security Agreement Negotiation — Status Update Acquisition of Marlowe Asset Management Photonics Inc. by Halcyon Semiconductor AG CFIUS Case No. CFIUS-023-07-3841 / NSA Docket No. NSA-2024-0019
Dear Stefan,
I am writing to provide you and the Halcyon Semiconductor AG ("HSAG") team with a comprehensive status report on the ongoing National Security Agreement ("NSA") negotiations with the Committee on Foreign Investment in the United States ("CFIUS") in connection with the proposed acquisition of 100% of the outstanding equity of Marlowe Asset Management Photonics Inc. ("VPI") by Halcyon US Holdings Inc., a Delaware subsidiary of HSAG, for aggregate cash consideration of $1.42 billion (the "Transaction"), pursuant to the Stock Purchase Agreement executed on June 10, 2023 (the "SPA"). This update covers the first two formal negotiation sessions, which were held on November 9 and November 13, 2023, respectively.
As you will recall, on October 20, 2023, CFIUS formally communicated four preliminary national security concerns arising from the Transaction. Following the Committee's identification of those concerns, the CFIUS staff circulated an initial draft NSA to the parties on November 3, 2023. Our team, in close coordination with you and your colleagues, prepared and submitted HSAG's first comprehensive counterproposal — the buyer's redline — on November 9, 2023, which was also the date of the first in-person negotiation session at the U.S. Department of the Treasury.
The NSA has been assigned the prospective docket number NSA-2024-0019 by the CFIUS staff for tracking and correspondence purposes. This letter is organized to address: (1) a summary of the two negotiation sessions to date; (2) areas of significant progress; (3) outstanding issues requiring further negotiation; (4) coordination with VPI's counsel; (5) implications for the Transaction timeline; (6) recommended next steps and actions requiring client decision; and (7) a brief update on fees and budget. Peggy Ashworth and David Caruso have contributed substantially to the analysis and recommendations set forth herein.
1. Summary of Negotiation Sessions
A. First Session — November 9, 2023
The first in-person negotiation session was held at the U.S. Department of the Treasury, Office of Investment Security, in Washington, D.C. The session lasted approximately four hours and was constructive in tone and substance.
Participants. On the CFIUS side, the session was attended by representatives from the Department of the Treasury (acting in its capacity as CFIUS Chair), the Department of Defense ("DoD"), and the Department of Energy ("DOE"). Treasury and DoD have been designated as the co-lead agencies for this review, reflecting the nature of VPI's classified defense programs and its dual-use semiconductor technologies. On HSAG's side, the session was attended by Margaret ("Peggy") Ashworth and Lt. Col. (Ret.) David Caruso of our firm, with you, Stefan, participating by secure video conference from Dresden. Harrison Whitfield of Wethersfield & Gale LLP ("W&G"), counsel to VPI and the sellers, also participated in his capacity under the joint notice framework.
Key Topics Covered. The session opened with an overview of HSAG's counterproposal, in which Peggy Ashworth walked the CFIUS staff through the principal departures from the government's initial draft and the rationale underlying each proposed modification. Discussion then turned to the following substantive areas:
• Board Governance Provisions: A detailed initial discussion of HSAG's proposed reconstitution of VPI's post-closing board of directors, including the composition, qualifications, and authority of the proposed Government Security Committee.
• Technology Control Plan Framework: Introduction of HSAG's proposed Technology Control Plan ("TCP") framework, which would govern the handling and dissemination of controlled technical data, ITAR-regulated defense articles, and EAR-controlled items within VPI and between VPI and HSAG.
• Third-Party Monitor Requirements: A preliminary exchange of views on the scope, authority, and selection process for the third-party compliance monitor contemplated by the CFIUS draft.
Tone and Reception. We were encouraged by the overall tone of the first session. CFIUS staff expressly acknowledged HSAG's substantive engagement and the thoroughness of the buyer's redline. The dialogue was productive, and several areas of conceptual alignment were identified early in the discussion, particularly with respect to the board governance architecture. While the CFIUS staff reserved their positions on a number of specific provisions, they did not reject any of HSAG's structural proposals outright, which we regard as a positive signal.
B. Second Session — November 13, 2023
The second negotiation session was held via secure video conference on November 13, 2023. This session was more narrowly focused and technical in nature, running approximately three and a half hours.
Topics Covered. The session was devoted to deeper-dive discussions of the following areas:
• TCP Mechanics: Detailed discussion of the operational mechanics of the Technology Control Plan, including the processes for classifying information, controlling access, and documenting transfers.
• Cybersecurity Requirements: Examination of the cybersecurity standards to be imposed on VPI's IT infrastructure, including compliance benchmarks, testing protocols, and incident reporting timelines.
• Penalty and Enforcement Provisions: Review of the penalty provisions in the CFIUS draft, including civil penalty amounts, cure periods, notice requirements, and the circumstances under which CFIUS may mandate divestiture.
Specific Concerns Raised by CFIUS Agencies. Two specific agency-level concerns were raised during this session that warrant your attention:
First, DoD representatives raised specific concerns regarding facility access to VPI's fabrication facility located at 9200 Innovation Boulevard, Albuquerque, New Mexico 87113 (the "Albuquerque Fab"). In particular, DoD focused on clean room Sections C-7 through C-12 within the Albuquerque Fab, where classified work is currently performed under existing DoD contracts. DoD's concern centers on ensuring that physical and personnel access controls for these sections are maintained at current levels and that no HSAG personnel — including HSAG-designated board members — have unsupervised access to these areas absent the appropriate security clearances and programmatic need-to-know.
Second, DOE representatives focused on dual-use technology transfer controls, particularly with respect to items classified under Export Administration Regulations ("EAR") Export Control Classification Number ("ECCN") 3A001 (certain microprocessor microcircuits and semiconductor devices). DOE emphasized the importance of ensuring that the TCP adequately addresses the transfer of dual-use technical data and technology that, while not classified, is subject to EAR controls and may be of strategic significance.
Informal Feedback on HSAG's First Redline. During the second session, CFIUS staff provided informal feedback on several specific provisions in HSAG's first buyer's redline. While these indications were expressly characterized as preliminary and non-binding, they were informative. The staff identified areas where the government may have flexibility to accommodate HSAG's proposals and areas where the government's position is firm and unlikely to change. I address these in the substantive sections below.
2. Areas of Significant Progress
We are pleased to report that meaningful progress has been achieved across several of the most structurally important components of the NSA. The following areas reflect either substantial agreement or strong conceptual alignment between the parties.
A. Board Governance and Government Security Committee (GSC)
Substantial agreement has been reached on the core architecture of VPI's post-closing board reconstitution, which we regard as one of the most critical elements of the NSA framework.
Agreed Framework. The parties have agreed in principle that VPI's board of directors will consist of five (5) members, structured as follows:
• Three (3) "Security Board Members," each of whom must be a United States citizen holding or eligible for a TOP SECRET/Sensitive Compartmented Information ("TS/SCI") security clearance. One of the three Security Board Members shall be designated as an independent Security Director — that is, an individual who is not a current or former employee of either VPI or HSAG.
• Two (2) HSAG designees, who may be non-U.S. persons but who may not hold or access classified information or ITAR-controlled technical data. The HSAG designees will participate in full board deliberations on unclassified commercial and financial matters.
Government Security Committee. The three Security Board Members will constitute a Government Security Committee ("GSC"). The GSC will have exclusive authority over all classified and ITAR-controlled programs, personnel security decisions (including the hiring, reassignment, and termination of individuals holding security clearances), and all facility security matters. The GSC's decisions on matters within its exclusive jurisdiction will not require approval or ratification by the full board or by HSAG.
Proposed Nominees. CFIUS has been receptive to HSAG's proposed nominees for two of the three Security Board Member positions:
• Col. (Ret.) Bryce Hendrickson, currently serving as VPI's Vice President of Government Programs and Facility Security Officer ("FSO"), who holds an active TS/SCI security clearance. Col. Hendrickson's deep institutional knowledge of VPI's classified programs and his existing relationship with DCSA make him a natural choice for continued service on the post-closing board.
• Adrienne Delacroix, currently serving as an independent member of VPI's board of directors, who holds an active SECRET-level security clearance. Ms. Delacroix has served on the VPI board since 2019 and brings significant experience in defense-sector governance.
The third nominee — the independent Security Director — remains under discussion. CFIUS has indicated that it wishes to review the qualifications, background, and clearance eligibility of any candidate proposed for this position before providing its approval. We recommend that HSAG identify and submit credentials for a proposed candidate at the earliest opportunity, as this is likely to be a condition for final agreement on the board governance provisions.
Remaining Open Sub-Issues. While the structural framework is largely agreed, several subsidiary issues remain open:
• Delineation of GSC vs. Full Board Authority: The precise boundary between matters requiring GSC-only approval and matters subject to full board approval has not yet been fully defined. This is primarily a drafting exercise, but there are substantive questions — for example, whether certain commercial contracts with potential national security implications (e.g., supply agreements involving controlled items) should require GSC approval, full board approval, or both.
• Unclassified Summaries for HSAG Designees: HSAG has proposed that the HSAG-designated board members receive unclassified summaries of GSC decisions that affect VPI's overall business strategy — for example, decisions regarding the scope or direction of classified programs that may have budgetary or resource-allocation implications for VPI's commercial operations. CFIUS staff took this proposal under advisement. We believe this is a reasonable request and anticipate that some accommodation can be reached, possibly with CFIUS approval of the form and content of such summaries on a case-by-case basis.
B. Technology Control Plan (TCP) Framework
Good progress has been made on the overall TCP framework. The parties have reached agreement in principle on the following foundational elements:
• HSAG and VPI must implement a Technology Control Plan that prohibits the transfer of VPI technical data — including ITAR Category XI(a)(3) defense articles and EAR ECCN 3A001, 3A991, and 3E001 items — to any non-U.S. person without prior U.S. government authorization (whether in the form of a license, agreement, or exemption under the applicable regulatory framework).
• The TCP will be designed to integrate with, and build upon, VPI's existing ITAR/EAR export compliance program and VPI's current registration with the Directorate of Defense Trade Controls ("DDTC") under Registration No. M-24817. This integration approach should minimize operational disruption while ensuring that NSA-specific controls are layered on top of the existing compliance infrastructure.
• Certain unclassified, non-export-controlled commercial technical information may be shared between VPI and HSAG for legitimate business purposes — such as financial reporting, commercial product planning for non-controlled items, and general corporate administration — through defined and documented channels. This carve-out is important to HSAG's ability to manage VPI as an operating subsidiary.
Open Sub-Issues on TCP. Several important definitional and procedural questions remain unresolved:
• Scope of "Controlled Technical Data": The precise definition of "Controlled Technical Data" under the TCP has not yet been finalized. CFIUS's draft employs a broad formulation that could encompass information beyond what is technically subject to ITAR or EAR controls. HSAG's counterproposal sought to align the TCP definition more closely with the regulatory definitions under 22 C.F.R. § 120.10 (technical data under ITAR) and 15 C.F.R. § 772.1 (technology under EAR).
• Dual-Use Information Below the EAR De Minimis Threshold: There is an open question as to whether certain dual-use information that falls below the EAR de minimis threshold (i.e., items with less than 25% controlled U.S.-origin content under 15 C.F.R. § 734.4) should nevertheless be subject to TCP restrictions. CFIUS's draft would include such information; HSAG's counterproposal argued that inclusion of sub-threshold items would be operationally burdensome and inconsistent with the regulatory framework.
• Access Request Procedures: The parties have not yet agreed on the procedures by which HSAG personnel may request access to specific non-classified VPI technical information that may fall within the TCP's scope. HSAG has proposed a streamlined request-and-approval process administered by the GSC, with defined timelines for review.
C. Personnel Continuity
The parties have reached conceptual agreement on personnel continuity requirements. Under the agreed framework, certain key VPI personnel must remain employed by VPI for a minimum of twenty-four (24) months following the closing of the Transaction. The key personnel identified are:
• Dr. Nathan Trevorrow, Chief Executive Officer of VPI;
• Marissa Sung-Avila, President and Chief Operating Officer of VPI; and
• Col. (Ret.) Bryce Hendrickson, Vice President of Government Programs and Facility Security Officer.
In the event that any such individual departs VPI during the 24-month period (whether by resignation, termination, or otherwise), any replacement must be approved by both the GSC and the Defense Counterintelligence and Security Agency ("DCSA"). HSAG has found this requirement acceptable, as it aligns with HSAG's own operational plans for post-closing management continuity at VPI.
A minor open point remains regarding whether "constructive termination" scenarios — that is, situations in which a key person's responsibilities are materially diminished or their working conditions are materially altered such that the individual resigns — trigger the replacement-approval requirement. We expect this can be resolved through appropriate drafting.
D. Facility Security Clearance (FCL) Continuity
The parties have reached agreement on facility security clearance continuity provisions, and no material disagreements remain on this topic. Specifically:
• VPI will retain its existing Facility Security Clearance ("FCL") at the SECRET level, associated with CAGE Code 7VK92.
• The NSA itself will function as a Special Security Agreement ("SSA") equivalent, satisfying the Foreign Ownership, Control, or Influence ("FOCI") mitigation requirements under the National Industrial Security Program Operating Manual ("NISPOM").
• Col. (Ret.) Bryce Hendrickson will continue to serve as VPI's Facility Security Officer.
• DCSA will serve as the monitoring agency under the NSA, responsible for ongoing oversight of VPI's compliance with facility security requirements.
This is a significant area of alignment and reflects CFIUS's confidence that the NSA framework, taken as a whole, can adequately mitigate FOCI concerns arising from HSAG's acquisition of VPI.
3. Outstanding Issues Requiring Further Negotiation
Notwithstanding the progress described above, several important issues remain unresolved and will require further negotiation. We address each in turn, together with our assessment of the parties' respective positions and our recommended approach.
A. Third-Party Compliance Monitor — Scope and Selection
The role, authority, and selection of the third-party compliance monitor remains one of the most significant open issues in the NSA negotiation.
CFIUS's Position. The CFIUS draft NSA contemplates a third-party compliance monitor vested with broad audit and investigative authority. Under the draft, the monitor would have the power to conduct unannounced inspections of VPI and HSAG facilities, access all records of both VPI and HSAG (without limitation), interview employees at all levels, and report directly to the CFIUS monitoring agencies (Treasury, DoD, and DCSA) without prior review by the parties. The monitor's mandate, as drafted, is essentially open-ended.
HSAG's Counterproposal. HSAG's first buyer's redline sought to narrow the monitor's scope in two principal respects. First, HSAG proposed that the monitor's function be limited to annual compliance audits conducted against defined audit parameters, rather than an open-ended investigative mandate. Second, HSAG proposed that the monitor's access to records at the HSAG parent level — as distinguished from VPI — be limited to records directly related to NSA compliance obligations, rather than encompassing all HSAG records without limitation. The rationale for this limitation is that HSAG's global corporate records encompass a wide range of commercially sensitive information unrelated to VPI or the NSA, and providing a U.S.-appointed monitor with unrestricted access to such records raises significant concerns under German data protection law (including the GDPR) and could compromise HSAG's proprietary business information.
Current Status. CFIUS has not yet agreed to these limitations. DoD representatives, in particular, expressed a preference for broader monitor authority, citing the sensitive nature of VPI's classified programs and the government's interest in maintaining robust oversight capabilities. We anticipate that this issue will be the subject of further negotiation, and we believe there may be room for compromise — for example, a framework in which the monitor conducts annual comprehensive audits with defined scope, but retains the ability to conduct supplemental, targeted reviews upon a showing of reasonable cause, subject to advance notice to the parties.
Monitor Candidate Selection. CFIUS has informally identified Whitmore Compliance Group LLC ("WCG") as a potential third-party monitor. WCG is led by Gerald Whitmore, a former supervisory special agent in the FBI's Counterintelligence Division, and maintains offices at 1300 Crystal Drive, Suite 710, Arlington, Virginia 22202. Mr. Whitmore has served as a CFIUS-appointed monitor in at least two prior semiconductor-sector transactions, which likely accounts for CFIUS's familiarity with and preference for his firm.
HSAG has not yet formally agreed to the selection of WCG. We are currently conducting due diligence on WCG's qualifications, track record, and any potential conflicts of interest (including any existing engagements with competitors of HSAG or VPI). Peggy Ashworth and David Caruso are leading this review, and we expect to have preliminary findings available within the next two weeks. Formal monitor selection approval is expected to be addressed at the next negotiation session, likely in early December.
B. Monitor Cost Allocation
CFIUS's Position. The CFIUS draft NSA requires HSAG to bear all costs of the third-party compliance monitor, which is consistent with standard CFIUS practice. The draft contains no cap on monitor fees and no mechanism for cost review or adjustment.
Preliminary Cost Indications. Based on informal discussions with CFIUS staff and our own experience with semiconductor-sector NSA monitors, we estimate that the annual monitor fee will fall in the range of $1.0 million to $1.5 million per year. CFIUS staff informally referenced $1.2 million per year as a benchmark figure for semiconductor-sector NSA engagements of comparable complexity. Over the anticipated life of the NSA, this represents a significant ongoing compliance cost.
HSAG's Counterproposal. HSAG's first redline accepted the principle that HSAG will bear the costs of the monitor, but sought two modifications: (a) a cap on annual monitor fees (HSAG proposed an initial annual cap of $1.3 million, subject to adjustment); and (b) a mechanism for periodic cost review and adjustment — specifically, a CPI-based escalation formula rather than uncapped fee increases at the monitor's discretion.
Current Status. This issue remains open. We will continue to negotiate a defined fee structure with CPI-based adjustment. We request that HSAG confirm its acceptable range for annual monitor costs so that we may calibrate our negotiating position accordingly.
C. Penalty Provisions
The penalty and enforcement provisions of the NSA are among the most significant and contentious open issues.
CFIUS's Position. The CFIUS draft NSA includes the following penalty provisions:
• Civil penalties of up to $250,000 per violation per day for any breach of the NSA's terms;
• Injunctive relief, including specific performance of NSA obligations;
• Mandated divestiture of VPI as an ultimate enforcement remedy for material or repeated violations.
HSAG's Counterproposal. HSAG's first redline sought several modifications to the penalty provisions:
(a) A cure period of at least thirty (30) days before penalties begin to accrue for non-willful violations, allowing HSAG and VPI a reasonable opportunity to identify and remedy any inadvertent breach.
(b) A distinction between "material" violations (i.e., breaches that substantively compromise national security protections) and "immaterial" or "technical" violations (i.e., procedural or administrative lapses that do not compromise national security), with the $250,000/violation/day penalty scale reserved for material breaches.
(c) A requirement that CFIUS provide written notice specifying the nature and circumstances of the alleged violation before penalties begin to accrue, ensuring that the parties have a clear understanding of the government's concerns and an opportunity to respond.
(d) Limitation of the mandated divestiture remedy to cases of willful and repeated material breaches, rather than any material or repeated violation.
CFIUS Staff Feedback. CFIUS staff indicated that the $250,000 per violation per day figure is a standard penalty amount in NSA agreements and is unlikely to be reduced. However, the staff acknowledged that there may be flexibility on cure period provisions and notice requirements — which, in our view, represents the most productive avenue for compromise. If we can secure a meaningful cure period (30 days for non-willful violations) and a written notice requirement, the practical exposure to substantial penalties for inadvertent or technical violations would be significantly reduced.
DoD representatives were firm, however, that the mandated divestiture remedy must remain available as an ultimate enforcement mechanism and were unwilling to accept the "willful and repeated" qualifier proposed by HSAG. DoD's position is that the availability of divestiture — even if it is expected to be invoked only in extreme circumstances — is essential to the credibility of the enforcement framework.
Our Recommendation. We recommend that at the next negotiation session, HSAG's position focus on the cure and notice mechanics as a practical compromise. Specifically, we would propose:
• A 30-day cure period for non-willful violations, with penalties accruing only after the cure period expires without remediation;
• A mandatory written notice from CFIUS specifying the alleged violation, to be provided prior to the commencement of any penalty period;
• A tiered penalty structure that distinguishes between material violations ($250,000/day) and administrative/procedural violations (a lower daily amount, such as $25,000/day);
• Acceptance of the divestiture remedy as available in principle, but with a negotiated standard (e.g., "material breach that remains uncured after [60/90] days and that results in demonstrable harm to national security") rather than the current open-ended formulation.
D. Cybersecurity Requirements — Specific Standards
The parties have agreed in principle that VPI must maintain compliance with NIST Special Publication 800-171 (Protecting Controlled Unclassified Information in Nonfederal Systems and Organizations), which is the applicable cybersecurity standard for defense contractors handling CUI. The parties have also agreed that VPI will undergo annual third-party penetration testing, which HSAG accepts.
Two specific cybersecurity issues remain open:
Incident Reporting Timeline. The CFIUS draft NSA requires that VPI report any cybersecurity incident to DCSA within twenty-four (24) hours of discovery. HSAG's counterproposal requested a seventy-two (72) hour reporting window, which is consistent with prevailing industry practice and, notably, with the reporting timeline established under DFARS clause 252.204-7012 (Safeguarding Covered Defense Information and Cyber Incident Reporting). HSAG's position is that a 24-hour reporting requirement is impractical given the need to conduct an initial assessment to determine whether an event constitutes a reportable incident and to gather sufficient information to provide a meaningful report. This remains under discussion.
IT System Separation. The CFIUS draft requires that VPI's IT systems be "physically and logically separated" from HSAG's global network, with no shared cloud infrastructure of any kind. HSAG has accepted the logical separation requirement and agrees that all systems handling classified information, CUI, and export-controlled technical data must be isolated from the HSAG network. However, HSAG has raised practical concerns about the "no shared cloud infrastructure" prohibition as currently drafted, because it may prevent the use of common enterprise tools — such as financial reporting platforms, human resources information systems, and general corporate communication tools — that do not involve controlled technical data and are essential to HSAG's management of VPI as a subsidiary. HSAG is seeking a carve-out for non-sensitive business systems, subject to GSC approval and ongoing monitoring, to allow VPI to operate on shared platforms for non-controlled business functions. This is discussed further in the context of data segregation below.
E. Data Segregation — Implementation Details
Data segregation is closely related to the cybersecurity requirements discussed above but is treated as a separate provision in the NSA.
CFIUS's Position. The CFIUS draft requires complete physical and logical separation of all VPI IT systems from HSAG's global network, without exception.
HSAG's Counterproposal. HSAG's first redline acknowledged the imperative of separation for systems handling classified and export-controlled data, but proposed a tiered approach:
• Tier 1 (Full Separation): All IT systems handling classified information, ITAR-controlled technical data, and EAR-controlled technology would be completely physically and logically separated from HSAG's global network and from any shared cloud infrastructure. No exceptions.
• Tier 2 (Controlled Shared Access): Certain non-sensitive business applications — including human resources management, financial reporting, general corporate communications, and other administrative functions — would be permitted to operate on shared enterprise platforms, subject to appropriate access controls, GSC approval, and regular audits by the third-party monitor.
Current Status. CFIUS staff took HSAG's tiered proposal under advisement at the November 13 session and have not yet provided a firm response. We believe this is an area where a practical accommodation is possible, given that complete separation of all IT systems — including non-sensitive administrative functions — would impose significant operational costs on HSAG and is not strictly necessary to protect national security interests. We will continue to advocate for the tiered approach in the next session.
We note, however, that before we can finalize HSAG's position on this issue, we will need input from HSAG's IT leadership regarding the feasibility and cost of the various separation scenarios. We request that HSAG's CIO and CISO prepare an internal assessment of data segregation options and provide their recommended approach, including any specific shared business platforms that HSAG considers essential for the management of VPI.
F. Pre-Notification of Material Changes
CFIUS's Position. The CFIUS draft NSA requires HSAG to notify CFIUS at least thirty (30) days before any "material change" to VPI's business, including but not limited to divestitures of VPI business units or assets, entry into new foreign subcontracts, changes to cleared personnel, and modifications to facility security arrangements.
HSAG's Counterproposal. HSAG accepted the 30-day pre-notification concept in principle but raised two concerns:
• Definition of "Material Change": As drafted, the term "material change" is undefined and potentially over-broad. HSAG is concerned that the provision as written could be interpreted to require pre-notification for routine business decisions — such as hiring or reassignment of non-cleared employees, entry into ordinary-course commercial contracts, or minor changes to facility layout — that have no national security implications. HSAG has proposed that the NSA include a specific, enumerated definition of "material change" or, alternatively, a materiality threshold that limits the notification obligation to changes that could reasonably be expected to affect VPI's classified programs, controlled technical data, or facility security posture.
• Changes to Non-Cleared Personnel: HSAG proposed that changes to non-cleared personnel — i.e., VPI employees who do not hold security clearances and do not have access to classified or export-controlled information — be excluded from the pre-notification requirement entirely.
Current Status. This is an area of moderate disagreement. We expect that further drafting refinements can narrow the gap, and we intend to propose specific definitional language in the second buyer's redline.
G. Term and Sunset Provisions
CFIUS's Position. The CFIUS initial draft NSA contains no sunset provision. Under the draft as written, the NSA would remain in effect indefinitely — that is, for so long as HSAG (or any successor foreign person) retains ownership of VPI.
HSAG's Counterproposal. HSAG's first redline requested a fixed 10-year term, with an option for CFIUS to extend the NSA upon a finding that national security circumstances warrant continuation beyond the initial term.
CFIUS Staff Feedback. CFIUS staff informally indicated that a fixed sunset provision is unlikely to be accepted, as the government's position is that national security obligations should remain in effect for as long as the underlying FOCI condition persists. However, the staff acknowledged that some recent NSAs have incorporated periodic review mechanisms — for example, a comprehensive review of the NSA's terms every five (5) years, with the parties (including CFIUS) having the ability to propose modifications or, in appropriate circumstances, termination.
Our Recommendation. We recommend that HSAG propose a periodic review mechanism as a realistic compromise. Specifically, we would suggest:
• A comprehensive review of the NSA every five (5) years following execution;
• A mutual right by either party (HSAG or CFIUS) to petition for modification or termination of the NSA based on changed circumstances, including changes in the national security environment, changes in VPI's business or technology, or changes in the regulatory landscape;
• A provision that any such petition be considered in good faith by the other party, with disagreements subject to an escalation process within the CFIUS framework.
This approach preserves CFIUS's interest in maintaining ongoing national security protections while providing HSAG with a structured mechanism to seek relief from provisions that may become unnecessary or disproportionate over time.
4. Coordination with Wethersfield & Gale (VPI/Sellers' Counsel)
Harrison Whitfield of Wethersfield & Gale LLP participated in both negotiation sessions in his capacity as VPI's counsel. Given the joint notice posture — in which both HSAG and VPI are parties to the CFIUS filing — W&G's participation in the NSA negotiations is appropriate and, in our experience, has been beneficial to the process.
W&G has been cooperative and substantively aligned with HSAG on most NSA positions. This alignment reflects the shared interest of both parties in achieving CFIUS clearance on terms that permit the Transaction to close while preserving VPI's operational capabilities and government contract performance.
Notably, W&G independently raised with CFIUS staff the importance of personnel continuity provisions that protect VPI's operational stability and ongoing performance under its existing government contracts. This was a helpful intervention, as it reinforced HSAG's own position on personnel continuity from the perspective of the target company and its existing contractual obligations to the U.S. government.
On an ongoing basis, we are coordinating closely with W&G on the preparation of the next round of NSA redlines. Sandra Niehaus, the M&A partner at W&G responsible for the Transaction, is coordinating with Kenneth Morales of our firm on the implications of the NSA terms for the SPA's closing conditions, including any adjustments that may be necessary to the representations, warranties, or covenants in the SPA to reflect the final NSA terms.
5. Impact on Transaction Timeline
The NSA negotiations have direct implications for the Transaction timeline, given that CFIUS clearance is a condition to closing under the SPA.
SPA Closing Condition. Section 7.1(c) of the SPA requires CFIUS clearance as a condition to closing. Under the SPA, "CFIUS clearance" is defined to include either unconditional clearance (i.e., CFIUS determines that there are no unresolved national security concerns) or clearance subject to a mitigation agreement that is acceptable to HSAG in its reasonable discretion. Accordingly, the finalization of the NSA on terms acceptable to HSAG is a necessary predicate to closing.
Current Timeline Estimate. Based on the trajectory of the negotiations to date, we currently estimate the following timeline:
• Mid-to-Late December 2023: Final agreement on all substantive NSA terms, with only drafting and conforming changes remaining.
• January 2024: Formal execution of the NSA by all parties (HSAG, VPI, and CFIUS).
• January–February 2024: Issuance by CFIUS of a safe-harbor letter confirming that the Committee has concluded its review and that the Transaction may proceed, subject to compliance with the NSA. The safe-harbor letter is typically issued within one to two weeks following NSA execution.
• Late January–February 2024: Transaction closing.
Outside Date. The original outside date under the SPA is March 31, 2024. Based on our current trajectory, we do not anticipate that the NSA negotiations will jeopardize this deadline. However, continued monitoring is warranted, and any significant delays in the remaining negotiation sessions could compress the available timeline. We will alert you immediately if our assessment of the timeline changes.
Earnout Provisions. We note for completeness that the earnout provisions under the SPA — providing for contingent consideration of up to $85 million in two tranches ($50 million tied to CY2024 government-contract revenue milestones and $35 million tied to CY2025 government-contract revenue milestones) — are not affected by the NSA negotiation timeline, as the earnout milestones are measured post-closing and are based on VPI's operational performance during the relevant measurement periods.
6. Next Steps and Recommended Actions
A. Immediate Actions
We propose the following immediate actions:
1. Second Buyer's Redline. Calderwood & Harkness will prepare the second buyer's redline of the NSA, incorporating the positions discussed at the November 9 and November 13 sessions, as well as the recommendations set forth in this letter. We intend to circulate a draft of the second redline to you and Prof. Dr. Schilling's team for review before submitting it to CFIUS, and we anticipate submission to CFIUS prior to the next scheduled negotiation meeting.
2. Monitor Due Diligence. Peggy Ashworth and David Caruso will conduct due diligence on Whitmore Compliance Group LLC as the proposed third-party monitor, including a review of WCG's qualifications, personnel, prior CFIUS monitor engagements, and any potential conflicts of interest. We will report our findings to you as soon as they are available.
3. HSAG Internal Assessment — Cybersecurity and Data Segregation. We request that HSAG prepare an internal assessment of the operational and budgetary impact of the proposed cybersecurity and data segregation requirements, including an evaluation of the feasibility of full IT system separation versus the tiered approach proposed by HSAG. We recommend that this assessment be coordinated with HSAG's CIO and CISO, as their technical input will be essential to formulating a credible and defensible position for the next negotiation session.
B. Upcoming Meetings
• The next NSA negotiation session is tentatively scheduled for the week of November 20, 2023. The exact date and format (in-person or video conference) are to be confirmed by Treasury's Office of Investment Security.
• We anticipate that additional negotiation sessions will be required through mid-December to resolve all outstanding issues.
• Our target milestones are as follows: third-party monitor selection approval by early December 2023; all substantive NSA terms agreed by December 15, 2023; final NSA execution in January 2024.
C. Client Decisions Requested
In order to proceed effectively with the next phase of negotiations, we respectfully request HSAG's guidance on the following items at your earliest convenience:
1. Monitor Cost Range. Please confirm HSAG's position on the acceptable annual cost range for the third-party compliance monitor. The current benchmark suggested by CFIUS staff is approximately $1.2 million per year. We would appreciate guidance on HSAG's maximum acceptable annual fee and any conditions or limitations HSAG wishes to impose (e.g., CPI-only escalation, annual cap, scope-based fee adjustments).
2. Cybersecurity Incident Reporting Timeline. Please confirm HSAG's degree of flexibility on the cybersecurity incident reporting timeline. CFIUS's draft requires 24-hour reporting; HSAG's counterproposal requested 72 hours. If HSAG is willing to accept a compromise position (e.g., 48 hours, or 24 hours for confirmed incidents involving classified or CUI data with 72 hours for all other incidents), we would like to know before the next session.
3. Data Segregation Feasibility Assessment. Please provide HSAG's IT team assessment of data segregation feasibility, including identification of any shared business platforms that HSAG considers essential for the management of VPI, and any proposed carve-outs for non-sensitive systems that we should incorporate into the second buyer's redline.
4. Monitor Due Diligence Authorization. Please confirm HSAG's authorization for our team to proceed with due diligence on Whitmore Compliance Group LLC as the proposed third-party compliance monitor.
5. Third Security Board Member Candidate. Please identify and provide credentials for HSAG's proposed candidate for the third Security Board Member position (independent Security Director). This individual must be a U.S. citizen who holds or is eligible for a TS/SCI security clearance and who is independent of both VPI and HSAG. The candidate's résumé, clearance history, and any relevant biographical information should be submitted to us for review and transmission to CFIUS.
We recognize that several of these items may require internal deliberation within the Vorstand. We are happy to schedule a call to discuss any of these matters in advance of HSAG's final determination.
7. Fee and Budget Status
We provide the following brief update on fees incurred to date against the agreed CFIUS engagement fee cap.
The total fee cap for Calderwood & Harkness's CFIUS engagement is $3.8 million, exclusive of disbursements. Fees have been structured and budgeted across the following phases:
Fees incurred in the NSA Negotiation phase remain within the budgeted allocation. We estimate that the total remaining spend through closing will fall within the $3.8 million cap, assuming the negotiation proceeds on the timeline described above. Should unexpected complications arise that materially increase the scope or duration of the NSA negotiation, we will notify you promptly before any additional fees are incurred.
Monthly billings continue to be drawn against the $250,000 retainer. The current retainer balance and replenishment status will be reflected on our next invoice. James Prentice, in our New York office, continues to serve as billing partner for this engagement.
8. Closing Observations
We are encouraged by the trajectory of the NSA negotiations to date. While several important and complex issues remain open — particularly the scope and authority of the third-party compliance monitor, the penalty and enforcement provisions, and the cybersecurity and data segregation requirements — the areas of substantial agreement achieved on board governance, the TCP framework, personnel continuity, and FCL continuity represent the structural backbone of the NSA. These are the provisions that define the long-term governance and operational framework for VPI as a FOCI-mitigated entity, and the fact that the parties have reached alignment on these foundational issues provides a strong basis for resolving the remaining open points.
Based on our experience with CFIUS mitigation negotiations of comparable complexity, and taking into account the constructive posture exhibited by the CFIUS staff to date, we are confident that CFIUS clearance through a fully negotiated mitigation agreement is achievable on a timeline consistent with the SPA's outside date.
I am available for a call at your convenience to discuss any of the matters addressed in this letter in further detail. If Dr. Ehrhardt and Katarina Brückner would find it useful, we would be happy to arrange a direct briefing for the Vorstand at a mutually convenient time. Peggy Ashworth and David Caruso are available to join any such call and can provide additional detail on the technical and regulatory aspects of the negotiations.
Please do not hesitate to reach out at any time.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Beatrice Holloway Partner, Mergers & Acquisitions Calderwood & Harkness LLP 1750 K Street NW, Suite 800 Washington, DC 20006 Telephone: (202) 555-7418 bholloway@calderwoodharkness.com
Also at: 399 Park Avenue, 31st Floor New York, NY 10022 Telephone: (212) 555-3247
With input and contributions from:
Margaret "Peggy" Ashworth, Of Counsel, National Security & CFIUS Practice Lt. Col. (Ret.) David Caruso, Senior Counsel, Government Contracts & Export Controls
cc: (via secure electronic transmission)
Dr. Maximilian Ehrhardt, Chief Executive Officer, Halcyon Semiconductor AG Katarina Brückner, Chief Financial Officer, Halcyon Semiconductor AG Prof. Dr. Ulrich Schilling, Schilling Frey Rechtsanwälte, Berlin (German counsel to HSAG)
Enclosures: None enclosed. This letter references the following documents, which have been previously circulated to the addressee and copy recipients:
(1) Initial CFIUS Draft National Security Agreement, dated November 3, 2023; (2) HSAG First Buyer's Redline of the National Security Agreement, dated November 9, 2023; and (3) NSA Issues Matrix & Comparison Chart (maintained and updated on a rolling basis by the Calderwood & Harkness team).
PRIVILEGED AND CONFIDENTIAL — ATTORNEY-CLIENT COMMUNICATION
This letter and all attachments and enclosures are protected by the attorney-client privilege and the work product doctrine. This communication is intended solely for the use of the individual or entity to whom it is addressed. If you are not the intended recipient, you are hereby notified that any dissemination, distribution, or copying of this communication is strictly prohibited. If you have received this communication in error, please notify Calderwood & Harkness LLP immediately and destroy all copies.
Calderwood & Harkness LLP
Phase | Budgeted Amount | Status
Pre-Filing (Informal Consultations & Risk Assessment) | $420,000 | Completed
Notice Preparation & Submission | $680,000 | Completed
Review & Investigation (Including Responses to CFIUS Questions) | $1,100,000 | Substantially Completed
NSA Negotiation (Including Drafting, Sessions & Closing) | $1,200,000 | In Progress — Within Budget
Total | $3,400,000
Contingency / Reserve | $400,000 | Undrawn

CALDERWOOD & HARKNESS LLP

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