1032-00005 · Whitfield, Prager & Loomis LLP · Pre-Signing/Transaction Documents

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EXCLUSIVITY AGREEMENT

Dated as of June 20, 2023

This EXCLUSIVITY AGREEMENT (this "Agreement") is entered into as of June 20, 2023 (the "Execution Date"), by and between:

HALCYON SEMICONDUCTOR AKTIENGESELLSCHAFT, an Aktiengesellschaft organized and existing under the laws of the Federal Republic of Germany, registered with the commercial register (Handelsregister) of the Munich Local Court (Amtsgericht München) under HRB 178254, with its principal offices located at Halcyon-Platz 1, 81739 München, Federal Republic of Germany ("Halcyon" or "HSAG");

and

VECTRIS PHOTONICS, INC., a corporation organized and existing under the General Corporation Law of the State of Delaware, with Delaware Secretary of State File No. 5918437, with its principal offices located at 4750 Ridgepoint Drive, Suite 300, San Jose, California 95134 ("Vectris" or the "Company").

Halcyon and Vectris are sometimes referred to herein individually as a "Party" and collectively as the "Parties."

RECITALS

WHEREAS, Halcyon is a publicly traded semiconductor company listed on the Frankfurt Stock Exchange (FSE: HSAG) and on the Nasdaq Global Select Market through an American Depositary Receipt program (Nasdaq: HCYN), engaged in the design, development, and manufacture of advanced analog and mixed-signal semiconductors, power management integrated circuits, and radio-frequency components, with fiscal year 2022 consolidated revenue of approximately €6.8 billion and an approximate market capitalization of €22.4 billion as of the most recent practicable date;

WHEREAS, Vectris is a fabless designer and developer of silicon photonics transceivers and co-packaged optics chiplets for hyperscale data center interconnect applications, with fiscal year 2022 revenue of approximately $312 million and approximately 1,450 employees, and is the holder of 187 issued United States patents and 43 pending United States patent applications related to its core silicon photonics platform and related technologies;

WHEREAS, the Supervisory Board (Aufsichtsrat) of Halcyon, chaired by Prof. Dr. Friedrich Wendt, at its meeting held on June 5, 2023, approved the pursuit of the acquisition of Vectris and authorized Halcyon's Management Board (Vorstand), including its Chief Executive Officer, Dr. Katarina Breuer, and its Chief Financial Officer, Markus Ellinger, to negotiate and execute definitive documentation in connection therewith, subject to customary reservations of further Supervisory Board approval of the final terms of any definitive transaction;

WHEREAS, Halcyon desires to explore a potential acquisition of all of the outstanding equity interests of Vectris in an all-cash transaction (the "Proposed Transaction"), which is expected to be structured as a reverse triangular merger under the General Corporation Law of the State of Delaware (the "DGCL"), in which a newly formed, wholly owned Delaware subsidiary of Halcyon would merge with and into Vectris, with Vectris surviving as a wholly owned subsidiary of Halcyon;

WHEREAS, in connection with its evaluation of the Proposed Transaction, Halcyon has engaged Calderwood & Harkness LLP as its legal counsel and Ridgeline Partners LLC as its financial advisor, and Vectris has engaged Whitfield, Prager & Loomis LLP as its legal counsel and Clearwater Zanthor & Co., LLC as its financial advisor;

WHEREAS, each Party has entered into, or will promptly enter into, a mutual confidentiality and nondisclosure agreement (the "NDA") to facilitate the exchange of proprietary and non-public due diligence information between the Parties and their respective Representatives in connection with the evaluation of the Proposed Transaction;

WHEREAS, as a condition to Halcyon's commitment of substantial time, resources, and expense to the evaluation, due diligence review, and negotiation of the Proposed Transaction, including the engagement and deployment of its legal, financial, and technical advisory teams, Halcyon has requested that Vectris agree to negotiate exclusively with Halcyon for a specified period, and Vectris, acting through its Board of Directors, is willing to do so on the terms and conditions set forth herein; and

WHEREAS, the Board of Directors of Vectris has determined, after consultation with its legal and financial advisors, that the entry into this Agreement on the terms set forth herein is in the best interests of Vectris and its stockholders.

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, the substantial expenditures of time and resources that Halcyon will undertake in reliance hereon, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by each Party, the Parties agree as follows:

SECTION 1: DEFINITIONS

As used in this Agreement, the following terms shall have the meanings ascribed to them below:

1.1 "Acquisition Proposal" means any inquiry, indication of interest, proposal, or offer from any Person (other than Halcyon or any of its Affiliates) relating to, in a single transaction or a series of related transactions: (a) a merger, consolidation, share exchange, business combination, reorganization, recapitalization, liquidation, dissolution, or similar transaction involving Vectris or any of its subsidiaries; (b) the acquisition by any Person (or the stockholders of any Person) of fifteen percent (15%) or more of the outstanding equity securities or voting power of Vectris, whether by way of direct purchase, tender offer, exchange offer, or otherwise; (c) the acquisition by any Person of assets (including equity interests in subsidiaries) representing fifteen percent (15%) or more of the consolidated assets, revenues, or earnings of Vectris and its subsidiaries, taken as a whole, as determined by reference to the most recently available audited consolidated financial statements of Vectris; or (d) any tender offer, exchange offer, or similar transaction by any Person or group of Persons for the equity securities of Vectris that, if consummated, would result in such Person or group of Persons beneficially owning fifteen percent (15%) or more of the outstanding equity securities or voting power of Vectris.

1.2 "Affiliate" means, with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such first Person, as such terms are defined or interpreted under Rule 12b-2 promulgated under the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

1.3 "Board" means the Board of Directors of Vectris Photonics, Inc., which as of the date hereof consists of the following members: Dr. Anand Raghavan (Chair), Margaret Sørensen, Julian Tate, David Kwon, Dr. Elena Mirescu, Rhys Calloway, and Simone Achterberg.

1.4 "Exclusivity Period" means the period commencing on the Execution Date (June 20, 2023) and ending at 11:59 p.m. (Eastern Time) on the date that is forty-five (45) calendar days after the Execution Date (i.e., August 4, 2023), unless this Agreement is earlier terminated in accordance with Section 6 hereof, in which case the Exclusivity Period shall end upon the effective date of such termination.

1.5 "Person" means any individual, corporation, partnership, limited partnership, limited liability company, joint venture, association, trust, unincorporated organization, governmental authority or instrumentality, or other entity of any kind or nature.

1.6 "Proposed Transaction" means the potential acquisition by Halcyon of all of the outstanding equity interests of Vectris, currently contemplated to be structured as a reverse triangular merger under the DGCL in which a newly formed, wholly owned Delaware subsidiary of Halcyon ("Merger Sub") would merge with and into Vectris, with Vectris surviving as a wholly owned subsidiary of Halcyon, for aggregate cash consideration of approximately Eight Hundred Million Dollars ($800,000,000), subject to the negotiation and execution of a Definitive Agreement (as defined in Section 4.1 hereof) and the satisfaction or waiver of customary closing conditions.

1.7 "Representatives" means, with respect to any Party, such Party's directors, officers, employees, agents, and advisors (including, without limitation, legal counsel, financial advisors, accountants, consultants, and other professional advisors), and such Party's Affiliates and their respective directors, officers, employees, agents, and advisors. Without limiting the generality of the foregoing:

(a) Halcyon's Representatives shall include, among others: Calderwood & Harkness LLP (including Oliver Mackenzie, Harrison Wexford, Derek Okonkwo, Tiffany Rosenthal, and Howard Bellamy), Ridgeline Partners LLC (including Nathaniel Cross and Priya Narayanan), Thornbury Wight LLP (including Gavin Ashmore), and such other advisors as Halcyon may engage from time to time in connection with the Proposed Transaction; and

(b) Vectris's Representatives shall include, among others: Whitfield, Prager & Loomis LLP (including Catherine Whitfield and Douglas Prager), Clearwater Zanthor & Co., LLC (including Diane Okoro), Linden Ross & Co., LLP (including Christine Park), and such other advisors as Vectris may engage from time to time in connection with the Proposed Transaction.

SECTION 2: EXCLUSIVITY COVENANT

2.1 Exclusive Negotiation. During the Exclusivity Period, Vectris shall negotiate exclusively with Halcyon (and its Representatives) regarding the Proposed Transaction. Vectris shall not, and shall cause its subsidiaries and Representatives not to, enter into, continue, or participate in any negotiations, discussions, or other communications with any Person other than Halcyon and its Representatives with respect to any potential transaction that would constitute an Acquisition Proposal or any inquiry, indication of interest, or proposal that could reasonably be expected to lead to an Acquisition Proposal. In furtherance of the foregoing, Vectris shall, and shall cause its Representatives to, devote reasonable time and resources to facilitate the evaluation, due diligence review, and negotiation of the Proposed Transaction during the Exclusivity Period, including, without limitation, making available to Halcyon and its Representatives the following senior management personnel and key employees for meetings, presentations, teleconferences, and other interactions as reasonably requested by Halcyon: Dr. Anand Raghavan (Founder, Chief Executive Officer, and Board Chair), Margaret Sørensen (President and Chief Operating Officer), Julian Tate (Chief Technology Officer), and Rebecca Lau (General Counsel and Corporate Secretary). Vectris shall use commercially reasonable efforts to accommodate the scheduling of such meetings and presentations in a timely manner, recognizing the time-sensitive nature of the Exclusivity Period and the importance of maintaining an efficient transaction timeline.

2.2 No Solicitation. During the Exclusivity Period, Vectris shall not, and shall direct and use its reasonable best efforts to cause its Representatives not to, directly or indirectly:

(a) solicit, initiate, knowingly encourage, or knowingly facilitate any Acquisition Proposal or any inquiries, indications of interest, or proposals that could reasonably be expected to lead to an Acquisition Proposal, including by way of furnishing non-public information, granting access to properties, books, or records, or engaging in discussions or negotiations regarding any potential Acquisition Proposal;

(b) engage in, continue, or otherwise participate in any discussions, negotiations, or communications with any Person (other than Halcyon and its Representatives) regarding any Acquisition Proposal or any inquiry, indication of interest, or proposal that could reasonably be expected to lead to an Acquisition Proposal;

(c) furnish or make available any non-public information relating to Vectris or any of its subsidiaries to any Person (other than Halcyon and its Representatives) in connection with, or in response to, any Acquisition Proposal or any inquiry, indication of interest, or proposal that could reasonably be expected to lead to an Acquisition Proposal; or

(d) enter into, execute, or deliver any letter of intent, memorandum of understanding, term sheet, agreement in principle, merger agreement, acquisition agreement, joint venture agreement, or other agreement, instrument, or arrangement (whether or not legally binding) with any Person (other than Halcyon and its Affiliates) relating to, or that contemplates or would reasonably be expected to result in, an Acquisition Proposal.

2.3 Cessation of Existing Discussions. Vectris hereby represents and warrants to Halcyon that, as of the date hereof, neither Vectris nor any of its Representatives is engaged in any discussions or negotiations with any third party with respect to any Acquisition Proposal except as has been disclosed in writing to Halcyon prior to the execution of this Agreement. Vectris shall, and shall cause its Representatives to, immediately upon the execution of this Agreement, cease and terminate any and all existing discussions, negotiations, and communications with any third parties that may be ongoing as of the date hereof with respect to any Acquisition Proposal, and shall not waive, amend, release, or modify any provision of any standstill agreement or similar agreement to which Vectris is a party in a manner that would permit or facilitate any such third party's pursuit of an Acquisition Proposal. Vectris shall promptly request the return or destruction (with written certification of such destruction) of any confidential or proprietary information of Vectris that was previously furnished to any such third parties or their representatives in connection with any such discussions, negotiations, or communications, in accordance with the terms of any applicable confidentiality agreements.

2.4 Notification Obligation. If, during the Exclusivity Period, Vectris or any of its Representatives receives any Acquisition Proposal, or any inquiry, request for information, or indication of interest that could reasonably be expected to lead to an Acquisition Proposal, Vectris shall promptly (and in any event within two (2) business days after receipt thereof) notify Halcyon in writing of such Acquisition Proposal, inquiry, request, or indication of interest. Such written notice shall include: (i) the identity of the Person making or submitting such Acquisition Proposal, inquiry, request, or indication of interest; (ii) a reasonably detailed description of the material terms and conditions thereof (including any proposed price, structure, financing, and timing); and (iii) copies of any written proposals, offers, term sheets, or other documentation received by Vectris or its Representatives in connection therewith (to the extent not prohibited by a pre-existing contractual obligation). Vectris shall keep Halcyon reasonably informed of the status and any material changes to the terms and conditions of any such Acquisition Proposal, inquiry, request, or indication of interest. The notification obligations set forth in this Section 2.4 shall apply regardless of whether Vectris intends to engage in any discussions or negotiations with respect to such Acquisition Proposal, inquiry, request, or indication of interest.

SECTION 3: DUE DILIGENCE ACCESS

3.1 Data Room Access. In furtherance of the Proposed Transaction and in support of Halcyon's evaluation and due diligence review, Vectris agrees to establish, open, and make available to Halcyon and its Representatives a virtual data room (the "Data Room") on or about June 26, 2023 (or such earlier date as may be mutually agreed), hosted by a reputable third-party data room provider. Vectris shall populate the Data Room with documents, records, and information reasonably requested by Halcyon and its Representatives, and shall use commercially reasonable efforts to respond to supplemental document requests in a timely manner throughout the Exclusivity Period. The categories of information to be made available in the Data Room shall include, without limitation, the following:

(a) Corporate and Organizational Documents: Certificate of incorporation (including all amendments thereto), bylaws, minutes of meetings and written consents of the Board and its committees, stockholder agreements, investor rights agreements, and organizational charts;

(b) Capitalization Records: Detailed capitalization table reflecting 51,200,000 shares of common stock outstanding on a basic basis, together with a schedule of all outstanding stock options, restricted stock units, warrants, and other equity awards, including options and restricted stock units covering an aggregate of 7,194,160 shares, and the terms and conditions of the Vectris 2016 Equity Incentive Plan and any successor plans;

(c) Material Contracts: All material contracts, agreements, and commitments, including customer contracts, supply agreements, manufacturing agreements, license agreements, joint development agreements, lease agreements, loan and credit agreements, and any contracts requiring payments or involving obligations in excess of $250,000 in any twelve-month period;

(d) Financial Statements and Records: Audited consolidated financial statements of Vectris for fiscal years 2020, 2021, and 2022 (with the fiscal year 2022 audited financial statements reflecting revenue of approximately $312 million and EBITDA of approximately $74 million, as audited by Linden Ross & Co., LLP), together with unaudited interim financial statements for the most recent available periods, financial projections, budgets, and management analyses;

(e) intellectual Property Records: Schedules of all 187 issued United States patents and 43 pending United States patent applications, together with any foreign counterparts, trademark registrations, copyright registrations, trade secret documentation, and all intellectual property license agreements (both inbound and outbound);

(f) Regulatory Filings: All filings with and correspondence from the United States Securities and Exchange Commission, the United States Patent and Trademark Office, and any other governmental authorities, including any export control or ITAR-related filings;

(g) Litigation Records: A schedule of all pending or threatened litigation, arbitration, governmental investigations, and administrative proceedings, together with copies of all material pleadings and settlement agreements;

(h) Employee and Benefit Information: Employee census data, key employee agreements, retention and severance arrangements, employee benefit plan documents, and any works council or collective bargaining agreements; and

(i) Environmental Compliance Records: Environmental permits, compliance audits, remediation records, and any correspondence with environmental regulatory authorities.

3.2 Management Presentations and Site Visits. In addition to the Data Room access described in Section 3.1, Vectris shall make its senior officers, key employees, and subject matter experts available for meetings, presentations, teleconferences, and question-and-answer sessions as reasonably requested by Halcyon and its Representatives during the Exclusivity Period, with such meetings to be scheduled at mutually convenient times and at locations to be mutually agreed upon by the Parties. Without limiting the foregoing, Vectris shall permit Halcyon and its Representatives to conduct one or more site visits at Vectris's headquarters located at 4750 Ridgepoint Drive, Suite 300, San Jose, California 95134, and at such other Vectris facilities as may be mutually agreed, upon not less than three (3) business days' prior written notice to Vectris, subject to compliance with Vectris's reasonable security and confidentiality protocols. During any such site visits, Halcyon and its Representatives shall comply with all applicable laws, regulations, and Vectris's safety, security, and workplace policies.

3.3 Compliance with NDA. All non-public, proprietary, or confidential information exchanged between the Parties or their respective Representatives pursuant to this Section 3, or otherwise in connection with the evaluation and negotiation of the Proposed Transaction, shall be subject to, and governed by, the terms and conditions of the NDA between the Parties. Nothing in this Agreement shall be deemed to expand, modify, or supersede the rights or obligations of either Party under the NDA with respect to the treatment of confidential information, and in the event of any conflict between the provisions of this Agreement and the NDA regarding the treatment of confidential information, the more restrictive provision shall control.

SECTION 4: GOOD FAITH NEGOTIATION

4.1 Obligation to Negotiate in Good Faith. During the Exclusivity Period, each Party shall negotiate diligently and in good faith the terms and conditions of a definitive merger agreement for the Proposed Transaction (the "Definitive Agreement"), together with all related ancillary agreements and instruments. Such good faith negotiation shall include, without limitation, the timely exchange and review of drafts, the scheduling and attendance of negotiation sessions, and the prompt provision of information and responses to questions and requests from the other Party and its Representatives. The Definitive Agreement is expected to contain customary provisions, including, without limitation: representations and warranties of each Party; pre-closing and post-closing covenants; conditions to closing (including the receipt of all required antitrust and regulatory approvals); indemnification and related provisions (or, in the alternative, representation and warranty insurance); termination rights and termination fees; and related ancillary agreements, including any escrow agreement, voting and support agreements to be entered into by officers and directors of Vectris, and financing commitment letters and related documentation.

4.2 Acknowledgment — No Obligation to Enter Into Definitive Agreement. Notwithstanding anything to the contrary contained in this Agreement, neither Party shall have any obligation to enter into a Definitive Agreement or to consummate the Proposed Transaction. This Agreement constitutes an agreement to negotiate exclusively and in good faith during the Exclusivity Period, and does not constitute a binding agreement, commitment, or obligation to consummate the Proposed Transaction or any other transaction. No legally binding obligation with respect to the Proposed Transaction shall arise between the Parties unless and until a Definitive Agreement, in form and substance mutually acceptable to both Parties in their respective sole discretion, has been duly executed and delivered by each of the Parties. Until such time, either Party may, subject to its obligations under this Agreement (including the exclusivity and good faith negotiation obligations set forth herein), decline to proceed with the Proposed Transaction for any reason or for no reason.

4.3 Anticipated Transaction Terms. The Parties acknowledge that, as of the date hereof, the Proposed Transaction is currently contemplated to involve the following general parameters, which shall serve as a preliminary framework and basis for negotiation of the Definitive Agreement but shall not be deemed to be binding on either Party:

(a) Structure: The Proposed Transaction is expected to be structured as a reverse triangular merger under the DGCL, in which a newly formed, wholly owned Delaware subsidiary of Halcyon (the "Merger Sub") would merge with and into Vectris, with Vectris surviving the merger as a wholly owned subsidiary of Halcyon. Upon the effective time of the merger, each outstanding share of Vectris common stock (other than shares held in treasury or owned by Halcyon or Merger Sub, and other than dissenting shares) would be converted into the right to receive the applicable per-share cash consideration.

(b) Consideration: The Proposed Transaction would be an all-cash transaction. The aggregate equity value of the Proposed Transaction is approximately Eight Hundred Million Dollars ($800,000,000), which corresponds to approximately $13.70 per share of Vectris common stock on a fully diluted basis. The per-share consideration represents an approximate premium of 39.5% over Vectris's unaffected closing share price of $9.82 per share on the Nasdaq Global Select Market on May 19, 2023, the last full trading day prior to the date on which market speculation regarding a potential transaction first surfaced.

(c) Financing: Halcyon expects to finance the aggregate merger consideration and related transaction expenses through a combination of cash on hand (including cash and cash equivalents reported on Halcyon's consolidated balance sheet as of March 31, 2023) and committed debt financing to be provided by one or more financial institutions. Halcyon shall use its reasonable best efforts to obtain committed financing during the Exclusivity Period and to provide Vectris with evidence thereof in connection with the negotiation of the Definitive Agreement.

(d) Regulatory Approvals: The consummation of the Proposed Transaction is expected to be conditioned upon the receipt of applicable antitrust and regulatory approvals, including, without limitation: (i) the expiration or early termination of the waiting period applicable to the Proposed Transaction under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"); (ii) clearance or approval under the European Union Merger Regulation (Council Regulation (EC) No 139/2004); and (iii) any other antitrust, competition, foreign investment, or regulatory filings, clearances, or approvals that may be required in connection with the Proposed Transaction under applicable law.

SECTION 5: STANDSTILL

5.1 Halcyon Standstill. During the Exclusivity Period, Halcyon shall not, and shall cause its Affiliates not to, without the prior written consent of the Board:

(a) acquire, offer to acquire, or agree to acquire, whether by purchase, tender offer, exchange offer, or otherwise, any equity securities (including shares of common stock, options, warrants, or other rights to acquire equity securities) of Vectris, other than in connection with and as contemplated by the Proposed Transaction;

(b) seek or propose, whether alone or in concert with others, to influence, change, or control the management, the Board, or the policies of Vectris, including by way of a proxy solicitation, the submission of stockholder proposals, or the nomination of director candidates;

(c) make any public announcement, public disclosure, or public statement with respect to the Proposed Transaction, this Agreement, or any of the terms hereof, except as expressly permitted by Section 7 hereof; or

(d) take any action, or assist or encourage any other Person in taking any action, that would require either Party or any of their respective Affiliates to make any public filing or public announcement regarding the Proposed Transaction or any of the matters described in this Section 5 prior to an announcement date mutually agreed upon by the Parties in connection with the execution and delivery of a Definitive Agreement.

Nothing in this Section 5.1 shall restrict or prohibit Halcyon from conducting due diligence, engaging in negotiations, or taking any other actions expressly contemplated by this Agreement in connection with the evaluation and pursuit of the Proposed Transaction.

SECTION 6: TERM AND TERMINATION

6.1 Term. This Agreement shall be effective as of the Execution Date (June 20, 2023) and shall remain in full force and effect until the expiration of the Exclusivity Period at 11:59 p.m. (Eastern Time) on August 4, 2023, unless earlier terminated in accordance with this Section 6 or unless the Exclusivity Period is extended by mutual written agreement of the Parties.

6.2 Termination by Mutual Consent. This Agreement may be terminated at any time prior to the expiration of the Exclusivity Period by the mutual written consent of the Parties, as evidenced by a written instrument signed by an authorized officer of each Party.

6.3 Termination by Halcyon. Halcyon may terminate this Agreement at any time prior to the expiration of the Exclusivity Period upon written notice to Vectris if Halcyon determines, in its sole and absolute discretion, that it does not wish to continue the evaluation of, or proceed with, the Proposed Transaction for any reason or for no reason. Such termination shall be effective immediately upon delivery of such written notice to Vectris (or on such later date as may be specified in such notice). For the avoidance of doubt, Halcyon shall have no obligation to disclose to Vectris its reasons (if any) for any such determination.

6.4 Termination by Vectris. Vectris may terminate this Agreement upon five (5) business days' prior written notice to Halcyon if Halcyon materially breaches any of its obligations under this Agreement and fails to cure such material breach within such five (5) business-day notice period. Such notice shall set forth in reasonable detail the nature of the alleged material breach. If Halcyon cures such breach within such five (5) business-day period to the reasonable satisfaction of Vectris, Vectris's right to terminate this Agreement with respect to such breach shall lapse, and this Agreement shall continue in full force and effect.

6.5 Effect of Termination. Upon the termination or expiration of this Agreement, neither Party shall have any further obligation to the other Party hereunder, except that:

(a) the provisions of Section 7 (Confidentiality), Section 8 (Remedies), and Section 9 (Miscellaneous) shall survive any termination or expiration of this Agreement in accordance with their respective terms; and

(b) termination or expiration of this Agreement shall not relieve either Party from any liability or obligation arising out of any breach of this Agreement occurring prior to such termination or expiration.

For the avoidance of doubt, the NDA shall survive any termination or expiration of this Agreement in accordance with its terms, and neither the termination nor the expiration of this Agreement shall affect the rights or obligations of either Party under the NDA.

SECTION 7: CONFIDENTIALITY

7.1 Confidential Treatment. The existence and terms of this Agreement, the fact that discussions and negotiations are occurring or have occurred between the Parties regarding the Proposed Transaction, and all information exchanged between the Parties and their respective Representatives in connection with the evaluation and negotiation of the Proposed Transaction, shall be treated as confidential information subject to the terms and conditions of the NDA between the Parties. Each Party shall, and shall cause its Representatives to, maintain the confidentiality of the foregoing information in accordance with the NDA and shall not disclose any such information to any third party except as expressly permitted by the NDA or this Agreement.

Neither Party shall issue or cause to be issued any press release, public announcement, or other public statement regarding this Agreement, the Proposed Transaction, or the discussions and negotiations between the Parties, without the prior written consent of the other Party; provided, however, that the foregoing shall not restrict any disclosure that a Party determines in good faith (after consultation with outside legal counsel) is required by applicable law, regulation, or the rules of any stock exchange on which such Party's securities are listed or traded (including, without limitation, the Frankfurt Stock Exchange, the Regulated Market (Regulierter Markt) of the Frankfurt Stock Exchange, and the Nasdaq Global Select Market), in which case the disclosing Party shall use reasonable best efforts to provide the other Party with advance notice of such disclosure and a reasonable opportunity to review and comment upon such disclosure prior to its publication.

SECTION 8: REMEDIES

8.1 Specific Performance. Each Party acknowledges and agrees that a breach of the obligations set forth in Section 2 (Exclusivity Covenant) or Section 7 (Confidentiality) would cause irreparable harm to the non-breaching Party for which monetary damages alone would not be an adequate remedy. Accordingly, each Party agrees that, in the event of any such breach or threatened breach, the non-breaching Party shall be entitled to seek and obtain specific performance, temporary restraining orders, preliminary and permanent injunctive relief, and any other equitable remedies, in addition to any and all other remedies available at law or in equity, without the necessity of proving actual damages or irreparable harm and without the requirement of posting any bond, surety, or other security as a condition to obtaining such equitable relief (to the extent such requirement may be waived under applicable law). The Parties agree that they will not oppose the granting of such equitable relief on the basis that the non-breaching Party has an adequate remedy at law or that any bond, surety, or other security should be required.

8.2 Reimbursement of Expenses. In the event that Vectris breaches any of its exclusivity obligations under Section 2 of this Agreement and such breach results in or contributes to the termination of this Agreement (whether by Halcyon or by Vectris), Vectris shall, within ten (10) business days following written demand therefor by Halcyon accompanied by reasonable documentation, promptly reimburse Halcyon for its documented, reasonable, and verifiable out-of-pocket expenses actually incurred by Halcyon and its Representatives in connection with the evaluation, due diligence review, and negotiation of the Proposed Transaction (including, without limitation, fees and expenses of legal counsel, financial advisors, accountants, consultants, and other professional advisors, as well as travel and related expenses), in an aggregate amount not to exceed Two Million Dollars ($2,000,000) (the "Expense Reimbursement Cap"). The obligation of Vectris to reimburse expenses under this Section 8.2 shall be in addition to, and not in limitation of, any other rights or remedies available to Halcyon under this Agreement, at law, or in equity. For the avoidance of doubt, payment of the expense reimbursement shall not relieve Vectris of any liability for damages that Halcyon may otherwise be entitled to recover as a result of Vectris's breach.

SECTION 9: MISCELLANEOUS

9.1 Governing Law. This Agreement shall be governed by, and construed and enforced in accordance with, the internal laws of the State of Delaware, without giving effect to any choice-of-law or conflict-of-law rules, provisions, or principles (whether of the State of Delaware or any other jurisdiction) that would cause the application of the substantive laws of any jurisdiction other than the State of Delaware.

9.2 Jurisdiction and Venue. Each Party hereby irrevocably and unconditionally submits to the exclusive jurisdiction of the Court of Chancery of the State of Delaware (or, if the Court of Chancery of the State of Delaware declines to accept jurisdiction, the United States District Court for the District of Delaware, or if such federal court also declines to accept jurisdiction, any state court of the State of Delaware) for any action, suit, or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby, and each Party hereby irrevocably and unconditionally waives any objection to the laying of venue in any such court, including any objection based on the doctrine of forum non conveniens or on grounds of inconvenient forum. Each Party agrees that service of process in any such action, suit, or proceeding may be effected by the means by which notices are to be given to such Party under Section 9.3 hereof.

9.3 Notices. All notices, requests, demands, consents, waivers, and other communications required or permitted under this Agreement shall be in writing and shall be deemed to have been duly given: (i) when delivered personally; (ii) upon confirmed delivery by a nationally recognized overnight courier service (with all fees prepaid); (iii) upon confirmed receipt if sent by email (with a PDF attachment of the executed notice); or (iv) three (3) business days after deposit in the United States mail, certified or registered, postage prepaid, return receipt requested, in each case addressed as follows (or to such other address as a Party may designate in writing from time to time in accordance with this Section 9.3):

If to Halcyon:

Halcyon Semiconductor Aktiengesellschaft Halcyon-Platz 1 81739 München, Germany

Attention: Dr. Luisa Hartmann, General Counsel

Email: l.hartmann@halcyonsemi.de

with a copy (which shall not constitute notice) to:

Calderwood & Harkness LLP 599 Lexington Avenue, 38th Floor New York, New York 10022

Attention: Oliver Mackenzie

Email: omackenzie@calderwoodharkness.com

If to Vectris:

Vectris Photonics, Inc. 4750 Ridgepoint Drive, Suite 300 San Jose, California 95134

Attention: Rebecca Lau, General Counsel & Corporate Secretary

Email: rlau@vectrisphotonics.com

with a copy (which shall not constitute notice) to:

Whitfield, Prager & Loomis LLP 2600 Sand Hill Road, Suite 250 Menlo Park, California 94025

Attention: Catherine Whitfield

Email: cwhitfield@wpllaw.com

9.4 Entire Agreement. This Agreement, together with the NDA, constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings, negotiations, discussions, representations, warranties, and communications, whether oral or written, between the Parties or their respective Representatives with respect to such subject matter. No Party has relied on any statement, representation, warranty, or agreement of the other Party or any of the other Party's Representatives except as expressly set forth in this Agreement and the NDA.

9.5 Amendments and Waivers. No amendment, modification, supplement, or waiver of any provision of this Agreement shall be valid or effective unless made in writing and duly executed by each Party. No failure or delay by any Party in exercising any right, power, or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power, or privilege. The rights and remedies provided herein shall be cumulative and not exclusive of any other rights or remedies provided by law, equity, or otherwise.

9.6 Assignment. Neither Party may assign, delegate, or otherwise transfer any of its rights, interests, or obligations under this Agreement without the prior written consent of the other Party, and any purported assignment, delegation, or transfer in violation of this Section 9.6 shall be null and void and of no force or effect; provided, however, that Halcyon may, without the consent of Vectris, assign any or all of its rights (but not its obligations) under this Agreement to any wholly owned subsidiary of Halcyon formed for the purposes of the Proposed Transaction, including Halcyon Acquisition Sub, Inc. (or such other name as may be selected), once such subsidiary has been duly incorporated, and any such assignment shall not relieve Halcyon of any of its obligations hereunder. Subject to the foregoing, this Agreement shall be binding upon, and shall inure to the benefit of, the Parties and their respective successors and permitted assigns.

9.7 No Third-Party Beneficiaries. Nothing in this Agreement, express or implied, is intended to or shall confer upon any Person other than the Parties hereto and their respective successors and permitted assigns any rights, benefits, remedies, obligations, or liabilities of any nature whatsoever under or by reason of this Agreement. Without limiting the generality of the foregoing, no Representative of either Party shall be deemed a third-party beneficiary of this Agreement.

9.8 Severability. If any provision of this Agreement is held to be invalid, illegal, or unenforceable by any court of competent jurisdiction or other governmental authority, such invalidity, illegality, or unenforceability shall not affect any other provision of this Agreement, and this Agreement shall be construed and enforced as if such invalid, illegal, or unenforceable provision had not been included herein, provided that the remaining provisions, as so construed and enforced, continue to effectuate the original intent and purpose of the Parties to the greatest extent practicable. In the event that any provision is so held to be invalid, illegal, or unenforceable, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner.

9.9 Counterparts and Electronic Signatures. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which, taken together, shall constitute one and the same instrument. The exchange of copies of this Agreement and of signature pages by facsimile transmission, electronic mail (including in ".pdf," ".tif," or similar format), or other electronic transmission shall constitute effective execution and delivery of this Agreement and may be used in lieu of the original Agreement for all purposes. Signatures of the Parties transmitted by any such method shall be treated in all respects as having the same force and effect as original signatures.

9.10 Expenses. Except as otherwise expressly provided in Section 8.2 hereof (Reimbursement of Expenses), each Party shall bear and pay its own costs, fees, and expenses (including, without limitation, the fees and expenses of its legal counsel, financial advisors, accountants, and other professional advisors) incurred in connection with the negotiation, preparation, execution, and performance of this Agreement and the evaluation and pursuit of the Proposed Transaction.

[Signature Page Follows]

IN WITNESS WHEREOF, the Parties have caused this Exclusivity Agreement to be duly executed and delivered by their respective duly authorized officers as of the date first written above.

HALCYON SEMICONDUCTOR AKTIENGESELLSCHAFT

By: ________

Name: Dr. Katarina Breuer

Title: Chief Executive Officer (Vorstandsvorsitzende)

Date: June 20, 2023

By: ________

Name: Markus Ellinger

Title: Chief Financial Officer (Finanzvorstand)

Date: June 20, 2023

VECTRIS PHOTONICS, INC.

By: ________

Name: Dr. Anand Raghavan

Title: Founder, Chief Executive Officer, and Chair of the Board of Directors

Date: June 20, 2023

Signature Page to Exclusivity Agreement dated June 20, 2023, between Halcyon Semiconductor Aktiengesellschaft and Vectris Photonics, Inc.

EXCLUSIVITY AGREEMENT
Dated as of June 20, 2023
This EXCLUSIVITY AGREEMENT (this "Agreement") is entered into as of June 20, 2023 (the "Execution Date"), by and between:
HALCYON SEMICONDUCTOR AKTIENGESELLSCHAFT, an Aktiengesellschaft organized and existing under the laws of the Federal Republic of Germany, registered with the commercial register (Handelsregister) of the Munich Local Court (Amtsgericht München) under HRB 178254, with its principal offices located at Halcyon-Platz 1, 81739 München, Federal Republic of Germany ("Halcyon" or "HSAG");
and
VECTRIS PHOTONICS, INC., a corporation organized and existing under the General Corporation Law of the State of Delaware, with Delaware Secretary of State File No. 5918437, with its principal offices located at 4750 Ridgepoint Drive, Suite 300, San Jose, California 95134 ("Vectris" or the "Company").
Halcyon and Vectris are sometimes referred to herein individually as a "Party" and collectively as the "Parties."
RECITALS
WHEREAS, Halcyon is a publicly traded semiconductor company listed on the Frankfurt Stock Exchange (FSE: HSAG) and on the Nasdaq Global Select Market through an American Depositary Receipt program (Nasdaq: HCYN), engaged in the design, development, and manufacture of advanced analog and mixed-signal semiconductors, power management integrated circuits, and radio-frequency components, with fiscal year 2022 consolidated revenue of approximately €6.8 billion and an approximate market capitalization of €22.4 billion as of the most recent practicable date;
WHEREAS, Vectris is a fabless designer and developer of silicon photonics transceivers and co-packaged optics chiplets for hyperscale data center interconnect applications, with fiscal year 2022 revenue of approximately $312 million and approximately 1,450 employees, and is the holder of 187 issued United States patents and 43 pending United States patent applications related to its core silicon photonics platform and related technologies;
WHEREAS, the Supervisory Board (Aufsichtsrat) of Halcyon, chaired by Prof. Dr. Friedrich Wendt, at its meeting held on June 5, 2023, approved the pursuit of the acquisition of Vectris and authorized Halcyon's Management Board (Vorstand), including its Chief Executive Officer, Dr. Katarina Breuer, and its Chief Financial Officer, Markus Ellinger, to negotiate and execute definitive documentation in connection therewith, subject to customary reservations of further Supervisory Board approval of the final terms of any definitive transaction;
WHEREAS, Halcyon desires to explore a potential acquisition of all of the outstanding equity interests of Vectris in an all-cash transaction (the "Proposed Transaction"), which is expected to be structured as a reverse triangular merger under the General Corporation Law of the State of Delaware (the "DGCL"), in which a newly formed, wholly owned Delaware subsidiary of Halcyon would merge with and into Vectris, with Vectris surviving as a wholly owned subsidiary of Halcyon;
WHEREAS, in connection with its evaluation of the Proposed Transaction, Halcyon has engaged Calderwood & Harkness LLP as its legal counsel and Ridgeline Partners LLC as its financial advisor, and Vectris has engaged Whitfield, Prager & Loomis LLP as its legal counsel and Clearwater Zanthor & Co., LLC as its financial advisor;
WHEREAS, each Party has entered into, or will promptly enter into, a mutual confidentiality and nondisclosure agreement (the "NDA") to facilitate the exchange of proprietary and non-public due diligence information between the Parties and their respective Representatives in connection with the evaluation of the Proposed Transaction;
WHEREAS, as a condition to Halcyon's commitment of substantial time, resources, and expense to the evaluation, due diligence review, and negotiation of the Proposed Transaction, including the engagement and deployment of its legal, financial, and technical advisory teams, Halcyon has requested that Vectris agree to negotiate exclusively with Halcyon for a specified period, and Vectris, acting through its Board of Directors, is willing to do so on the terms and conditions set forth herein; and
WHEREAS, the Board of Directors of Vectris has determined, after consultation with its legal and financial advisors, that the entry into this Agreement on the terms set forth herein is in the best interests of Vectris and its stockholders.
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, the substantial expenditures of time and resources that Halcyon will undertake in reliance hereon, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by each Party, the Parties agree as follows:
SECTION 1: DEFINITIONS
As used in this Agreement, the following terms shall have the meanings ascribed to them below:
1.1 "Acquisition Proposal" means any inquiry, indication of interest, proposal, or offer from any Person (other than Halcyon or any of its Affiliates) relating to, in a single transaction or a series of related transactions: (a) a merger, consolidation, share exchange, business combination, reorganization, recapitalization, liquidation, dissolution, or similar transaction involving Vectris or any of its subsidiaries; (b) the acquisition by any Person (or the stockholders of any Person) of fifteen percent (15%) or more of the outstanding equity securities or voting power of Vectris, whether by way of direct purchase, tender offer, exchange offer, or otherwise; (c) the acquisition by any Person of assets (including equity interests in subsidiaries) representing fifteen percent (15%) or more of the consolidated assets, revenues, or earnings of Vectris and its subsidiaries, taken as a whole, as determined by reference to the most recently available audited consolidated financial statements of Vectris; or (d) any tender offer, exchange offer, or similar transaction by any Person or group of Persons for the equity securities of Vectris that, if consummated, would result in such Person or group of Persons beneficially owning fifteen percent (15%) or more of the outstanding equity securities or voting power of Vectris.
1.2 "Affiliate" means, with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such first Person, as such terms are defined or interpreted under Rule 12b-2 promulgated under the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
1.3 "Board" means the Board of Directors of Vectris Photonics, Inc., which as of the date hereof consists of the following members: Dr. Anand Raghavan (Chair), Margaret Sørensen, Julian Tate, David Kwon, Dr. Elena Mirescu, Rhys Calloway, and Simone Achterberg.
1.4 "Exclusivity Period" means the period commencing on the Execution Date (June 20, 2023) and ending at 11:59 p.m. (Eastern Time) on the date that is forty-five (45) calendar days after the Execution Date (i.e., August 4, 2023), unless this Agreement is earlier terminated in accordance with Section 6 hereof, in which case the Exclusivity Period shall end upon the effective date of such termination.
1.5 "Person" means any individual, corporation, partnership, limited partnership, limited liability company, joint venture, association, trust, unincorporated organization, governmental authority or instrumentality, or other entity of any kind or nature.
1.6 "Proposed Transaction" means the potential acquisition by Halcyon of all of the outstanding equity interests of Vectris, currently contemplated to be structured as a reverse triangular merger under the DGCL in which a newly formed, wholly owned Delaware subsidiary of Halcyon ("Merger Sub") would merge with and into Vectris, with Vectris surviving as a wholly owned subsidiary of Halcyon, for aggregate cash consideration of approximately Eight Hundred Million Dollars ($800,000,000), subject to the negotiation and execution of a Definitive Agreement (as defined in Section 4.1 hereof) and the satisfaction or waiver of customary closing conditions.
1.7 "Representatives" means, with respect to any Party, such Party's directors, officers, employees, agents, and advisors (including, without limitation, legal counsel, financial advisors, accountants, consultants, and other professional advisors), and such Party's Affiliates and their respective directors, officers, employees, agents, and advisors. Without limiting the generality of the foregoing:
(a) Halcyon's Representatives shall include, among others: Calderwood & Harkness LLP (including Oliver Mackenzie, Harrison Wexford, Derek Okonkwo, Tiffany Rosenthal, and Howard Bellamy), Ridgeline Partners LLC (including Nathaniel Cross and Priya Narayanan), Thornbury Wight LLP (including Gavin Ashmore), and such other advisors as Halcyon may engage from time to time in connection with the Proposed Transaction; and
(b) Vectris's Representatives shall include, among others: Whitfield, Prager & Loomis LLP (including Catherine Whitfield and Douglas Prager), Clearwater Zanthor & Co., LLC (including Diane Okoro), Linden Ross & Co., LLP (including Christine Park), and such other advisors as Vectris may engage from time to time in connection with the Proposed Transaction.
SECTION 2: EXCLUSIVITY COVENANT
2.1 Exclusive Negotiation. During the Exclusivity Period, Vectris shall negotiate exclusively with Halcyon (and its Representatives) regarding the Proposed Transaction. Vectris shall not, and shall cause its subsidiaries and Representatives not to, enter into, continue, or participate in any negotiations, discussions, or other communications with any Person other than Halcyon and its Representatives with respect to any potential transaction that would constitute an Acquisition Proposal or any inquiry, indication of interest, or proposal that could reasonably be expected to lead to an Acquisition Proposal. In furtherance of the foregoing, Vectris shall, and shall cause its Representatives to, devote reasonable time and resources to facilitate the evaluation, due diligence review, and negotiation of the Proposed Transaction during the Exclusivity Period, including, without limitation, making available to Halcyon and its Representatives the following senior management personnel and key employees for meetings, presentations, teleconferences, and other interactions as reasonably requested by Halcyon: Dr. Anand Raghavan (Founder, Chief Executive Officer, and Board Chair), Margaret Sørensen (President and Chief Operating Officer), Julian Tate (Chief Technology Officer), and Rebecca Lau (General Counsel and Corporate Secretary). Vectris shall use commercially reasonable efforts to accommodate the scheduling of such meetings and presentations in a timely manner, recognizing the time-sensitive nature of the Exclusivity Period and the importance of maintaining an efficient transaction timeline.
2.2 No Solicitation. During the Exclusivity Period, Vectris shall not, and shall direct and use its reasonable best efforts to cause its Representatives not to, directly or indirectly:
(a) solicit, initiate, knowingly encourage, or knowingly facilitate any Acquisition Proposal or any inquiries, indications of interest, or proposals that could reasonably be expected to lead to an Acquisition Proposal, including by way of furnishing non-public information, granting access to properties, books, or records, or engaging in discussions or negotiations regarding any potential Acquisition Proposal;
(b) engage in, continue, or otherwise participate in any discussions, negotiations, or communications with any Person (other than Halcyon and its Representatives) regarding any Acquisition Proposal or any inquiry, indication of interest, or proposal that could reasonably be expected to lead to an Acquisition Proposal;
(c) furnish or make available any non-public information relating to Vectris or any of its subsidiaries to any Person (other than Halcyon and its Representatives) in connection with, or in response to, any Acquisition Proposal or any inquiry, indication of interest, or proposal that could reasonably be expected to lead to an Acquisition Proposal; or
(d) enter into, execute, or deliver any letter of intent, memorandum of understanding, term sheet, agreement in principle, merger agreement, acquisition agreement, joint venture agreement, or other agreement, instrument, or arrangement (whether or not legally binding) with any Person (other than Halcyon and its Affiliates) relating to, or that contemplates or would reasonably be expected to result in, an Acquisition Proposal.
2.3 Cessation of Existing Discussions. Vectris hereby represents and warrants to Halcyon that, as of the date hereof, neither Vectris nor any of its Representatives is engaged in any discussions or negotiations with any third party with respect to any Acquisition Proposal except as has been disclosed in writing to Halcyon prior to the execution of this Agreement. Vectris shall, and shall cause its Representatives to, immediately upon the execution of this Agreement, cease and terminate any and all existing discussions, negotiations, and communications with any third parties that may be ongoing as of the date hereof with respect to any Acquisition Proposal, and shall not waive, amend, release, or modify any provision of any standstill agreement or similar agreement to which Vectris is a party in a manner that would permit or facilitate any such third party's pursuit of an Acquisition Proposal. Vectris shall promptly request the return or destruction (with written certification of such destruction) of any confidential or proprietary information of Vectris that was previously furnished to any such third parties or their representatives in connection with any such discussions, negotiations, or communications, in accordance with the terms of any applicable confidentiality agreements.
2.4 Notification Obligation. If, during the Exclusivity Period, Vectris or any of its Representatives receives any Acquisition Proposal, or any inquiry, request for information, or indication of interest that could reasonably be expected to lead to an Acquisition Proposal, Vectris shall promptly (and in any event within two (2) business days after receipt thereof) notify Halcyon in writing of such Acquisition Proposal, inquiry, request, or indication of interest. Such written notice shall include: (i) the identity of the Person making or submitting such Acquisition Proposal, inquiry, request, or indication of interest; (ii) a reasonably detailed description of the material terms and conditions thereof (including any proposed price, structure, financing, and timing); and (iii) copies of any written proposals, offers, term sheets, or other documentation received by Vectris or its Representatives in connection therewith (to the extent not prohibited by a pre-existing contractual obligation). Vectris shall keep Halcyon reasonably informed of the status and any material changes to the terms and conditions of any such Acquisition Proposal, inquiry, request, or indication of interest. The notification obligations set forth in this Section 2.4 shall apply regardless of whether Vectris intends to engage in any discussions or negotiations with respect to such Acquisition Proposal, inquiry, request, or indication of interest.
SECTION 3: DUE DILIGENCE ACCESS
3.1 Data Room Access. In furtherance of the Proposed Transaction and in support of Halcyon's evaluation and due diligence review, Vectris agrees to establish, open, and make available to Halcyon and its Representatives a virtual data room (the "Data Room") on or about June 26, 2023 (or such earlier date as may be mutually agreed), hosted by a reputable third-party data room provider. Vectris shall populate the Data Room with documents, records, and information reasonably requested by Halcyon and its Representatives, and shall use commercially reasonable efforts to respond to supplemental document requests in a timely manner throughout the Exclusivity Period. The categories of information to be made available in the Data Room shall include, without limitation, the following:
(a) Corporate and Organizational Documents: Certificate of incorporation (including all amendments thereto), bylaws, minutes of meetings and written consents of the Board and its committees, stockholder agreements, investor rights agreements, and organizational charts;
(b) Capitalization Records: Detailed capitalization table reflecting 51,200,000 shares of common stock outstanding on a basic basis, together with a schedule of all outstanding stock options, restricted stock units, warrants, and other equity awards, including options and restricted stock units covering an aggregate of 7,194,160 shares, and the terms and conditions of the Vectris 2016 Equity Incentive Plan and any successor plans;
(c) Material Contracts: All material contracts, agreements, and commitments, including customer contracts, supply agreements, manufacturing agreements, license agreements, joint development agreements, lease agreements, loan and credit agreements, and any contracts requiring payments or involving obligations in excess of $250,000 in any twelve-month period;
(d) Financial Statements and Records: Audited consolidated financial statements of Vectris for fiscal years 2020, 2021, and 2022 (with the fiscal year 2022 audited financial statements reflecting revenue of approximately $312 million and EBITDA of approximately $74 million, as audited by Linden Ross & Co., LLP), together with unaudited interim financial statements for the most recent available periods, financial projections, budgets, and management analyses;
(e) intellectual Property Records: Schedules of all 187 issued United States patents and 43 pending United States patent applications, together with any foreign counterparts, trademark registrations, copyright registrations, trade secret documentation, and all intellectual property license agreements (both inbound and outbound);
(f) Regulatory Filings: All filings with and correspondence from the United States Securities and Exchange Commission, the United States Patent and Trademark Office, and any other governmental authorities, including any export control or ITAR-related filings;
(g) Litigation Records: A schedule of all pending or threatened litigation, arbitration, governmental investigations, and administrative proceedings, together with copies of all material pleadings and settlement agreements;
(h) Employee and Benefit Information: Employee census data, key employee agreements, retention and severance arrangements, employee benefit plan documents, and any works council or collective bargaining agreements; and
(i) Environmental Compliance Records: Environmental permits, compliance audits, remediation records, and any correspondence with environmental regulatory authorities.
3.2 Management Presentations and Site Visits. In addition to the Data Room access described in Section 3.1, Vectris shall make its senior officers, key employees, and subject matter experts available for meetings, presentations, teleconferences, and question-and-answer sessions as reasonably requested by Halcyon and its Representatives during the Exclusivity Period, with such meetings to be scheduled at mutually convenient times and at locations to be mutually agreed upon by the Parties. Without limiting the foregoing, Vectris shall permit Halcyon and its Representatives to conduct one or more site visits at Vectris's headquarters located at 4750 Ridgepoint Drive, Suite 300, San Jose, California 95134, and at such other Vectris facilities as may be mutually agreed, upon not less than three (3) business days' prior written notice to Vectris, subject to compliance with Vectris's reasonable security and confidentiality protocols. During any such site visits, Halcyon and its Representatives shall comply with all applicable laws, regulations, and Vectris's safety, security, and workplace policies.
3.3 Compliance with NDA. All non-public, proprietary, or confidential information exchanged between the Parties or their respective Representatives pursuant to this Section 3, or otherwise in connection with the evaluation and negotiation of the Proposed Transaction, shall be subject to, and governed by, the terms and conditions of the NDA between the Parties. Nothing in this Agreement shall be deemed to expand, modify, or supersede the rights or obligations of either Party under the NDA with respect to the treatment of confidential information, and in the event of any conflict between the provisions of this Agreement and the NDA regarding the treatment of confidential information, the more restrictive provision shall control.
SECTION 4: GOOD FAITH NEGOTIATION
4.1 Obligation to Negotiate in Good Faith. During the Exclusivity Period, each Party shall negotiate diligently and in good faith the terms and conditions of a definitive merger agreement for the Proposed Transaction (the "Definitive Agreement"), together with all related ancillary agreements and instruments. Such good faith negotiation shall include, without limitation, the timely exchange and review of drafts, the scheduling and attendance of negotiation sessions, and the prompt provision of information and responses to questions and requests from the other Party and its Representatives. The Definitive Agreement is expected to contain customary provisions, including, without limitation: representations and warranties of each Party; pre-closing and post-closing covenants; conditions to closing (including the receipt of all required antitrust and regulatory approvals); indemnification and related provisions (or, in the alternative, representation and warranty insurance); termination rights and termination fees; and related ancillary agreements, including any escrow agreement, voting and support agreements to be entered into by officers and directors of Vectris, and financing commitment letters and related documentation.
4.2 Acknowledgment — No Obligation to Enter Into Definitive Agreement. Notwithstanding anything to the contrary contained in this Agreement, neither Party shall have any obligation to enter into a Definitive Agreement or to consummate the Proposed Transaction. This Agreement constitutes an agreement to negotiate exclusively and in good faith during the Exclusivity Period, and does not constitute a binding agreement, commitment, or obligation to consummate the Proposed Transaction or any other transaction. No legally binding obligation with respect to the Proposed Transaction shall arise between the Parties unless and until a Definitive Agreement, in form and substance mutually acceptable to both Parties in their respective sole discretion, has been duly executed and delivered by each of the Parties. Until such time, either Party may, subject to its obligations under this Agreement (including the exclusivity and good faith negotiation obligations set forth herein), decline to proceed with the Proposed Transaction for any reason or for no reason.
4.3 Anticipated Transaction Terms. The Parties acknowledge that, as of the date hereof, the Proposed Transaction is currently contemplated to involve the following general parameters, which shall serve as a preliminary framework and basis for negotiation of the Definitive Agreement but shall not be deemed to be binding on either Party:
(a) Structure: The Proposed Transaction is expected to be structured as a reverse triangular merger under the DGCL, in which a newly formed, wholly owned Delaware subsidiary of Halcyon (the "Merger Sub") would merge with and into Vectris, with Vectris surviving the merger as a wholly owned subsidiary of Halcyon. Upon the effective time of the merger, each outstanding share of Vectris common stock (other than shares held in treasury or owned by Halcyon or Merger Sub, and other than dissenting shares) would be converted into the right to receive the applicable per-share cash consideration.
(b) Consideration: The Proposed Transaction would be an all-cash transaction. The aggregate equity value of the Proposed Transaction is approximately Eight Hundred Million Dollars ($800,000,000), which corresponds to approximately $13.70 per share of Vectris common stock on a fully diluted basis. The per-share consideration represents an approximate premium of 39.5% over Vectris's unaffected closing share price of $9.82 per share on the Nasdaq Global Select Market on May 19, 2023, the last full trading day prior to the date on which market speculation regarding a potential transaction first surfaced.
(c) Financing: Halcyon expects to finance the aggregate merger consideration and related transaction expenses through a combination of cash on hand (including cash and cash equivalents reported on Halcyon's consolidated balance sheet as of March 31, 2023) and committed debt financing to be provided by one or more financial institutions. Halcyon shall use its reasonable best efforts to obtain committed financing during the Exclusivity Period and to provide Vectris with evidence thereof in connection with the negotiation of the Definitive Agreement.
(d) Regulatory Approvals: The consummation of the Proposed Transaction is expected to be conditioned upon the receipt of applicable antitrust and regulatory approvals, including, without limitation: (i) the expiration or early termination of the waiting period applicable to the Proposed Transaction under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"); (ii) clearance or approval under the European Union Merger Regulation (Council Regulation (EC) No 139/2004); and (iii) any other antitrust, competition, foreign investment, or regulatory filings, clearances, or approvals that may be required in connection with the Proposed Transaction under applicable law.
SECTION 5: STANDSTILL
5.1 Halcyon Standstill. During the Exclusivity Period, Halcyon shall not, and shall cause its Affiliates not to, without the prior written consent of the Board:
(a) acquire, offer to acquire, or agree to acquire, whether by purchase, tender offer, exchange offer, or otherwise, any equity securities (including shares of common stock, options, warrants, or other rights to acquire equity securities) of Vectris, other than in connection with and as contemplated by the Proposed Transaction;
(b) seek or propose, whether alone or in concert with others, to influence, change, or control the management, the Board, or the policies of Vectris, including by way of a proxy solicitation, the submission of stockholder proposals, or the nomination of director candidates;
(c) make any public announcement, public disclosure, or public statement with respect to the Proposed Transaction, this Agreement, or any of the terms hereof, except as expressly permitted by Section 7 hereof; or
(d) take any action, or assist or encourage any other Person in taking any action, that would require either Party or any of their respective Affiliates to make any public filing or public announcement regarding the Proposed Transaction or any of the matters described in this Section 5 prior to an announcement date mutually agreed upon by the Parties in connection with the execution and delivery of a Definitive Agreement.
Nothing in this Section 5.1 shall restrict or prohibit Halcyon from conducting due diligence, engaging in negotiations, or taking any other actions expressly contemplated by this Agreement in connection with the evaluation and pursuit of the Proposed Transaction.
SECTION 6: TERM AND TERMINATION
6.1 Term. This Agreement shall be effective as of the Execution Date (June 20, 2023) and shall remain in full force and effect until the expiration of the Exclusivity Period at 11:59 p.m. (Eastern Time) on August 4, 2023, unless earlier terminated in accordance with this Section 6 or unless the Exclusivity Period is extended by mutual written agreement of the Parties.
6.2 Termination by Mutual Consent. This Agreement may be terminated at any time prior to the expiration of the Exclusivity Period by the mutual written consent of the Parties, as evidenced by a written instrument signed by an authorized officer of each Party.
6.3 Termination by Halcyon. Halcyon may terminate this Agreement at any time prior to the expiration of the Exclusivity Period upon written notice to Vectris if Halcyon determines, in its sole and absolute discretion, that it does not wish to continue the evaluation of, or proceed with, the Proposed Transaction for any reason or for no reason. Such termination shall be effective immediately upon delivery of such written notice to Vectris (or on such later date as may be specified in such notice). For the avoidance of doubt, Halcyon shall have no obligation to disclose to Vectris its reasons (if any) for any such determination.
6.4 Termination by Vectris. Vectris may terminate this Agreement upon five (5) business days' prior written notice to Halcyon if Halcyon materially breaches any of its obligations under this Agreement and fails to cure such material breach within such five (5) business-day notice period. Such notice shall set forth in reasonable detail the nature of the alleged material breach. If Halcyon cures such breach within such five (5) business-day period to the reasonable satisfaction of Vectris, Vectris's right to terminate this Agreement with respect to such breach shall lapse, and this Agreement shall continue in full force and effect.
6.5 Effect of Termination. Upon the termination or expiration of this Agreement, neither Party shall have any further obligation to the other Party hereunder, except that:
(a) the provisions of Section 7 (Confidentiality), Section 8 (Remedies), and Section 9 (Miscellaneous) shall survive any termination or expiration of this Agreement in accordance with their respective terms; and
(b) termination or expiration of this Agreement shall not relieve either Party from any liability or obligation arising out of any breach of this Agreement occurring prior to such termination or expiration.
For the avoidance of doubt, the NDA shall survive any termination or expiration of this Agreement in accordance with its terms, and neither the termination nor the expiration of this Agreement shall affect the rights or obligations of either Party under the NDA.
SECTION 7: CONFIDENTIALITY
7.1 Confidential Treatment. The existence and terms of this Agreement, the fact that discussions and negotiations are occurring or have occurred between the Parties regarding the Proposed Transaction, and all information exchanged between the Parties and their respective Representatives in connection with the evaluation and negotiation of the Proposed Transaction, shall be treated as confidential information subject to the terms and conditions of the NDA between the Parties. Each Party shall, and shall cause its Representatives to, maintain the confidentiality of the foregoing information in accordance with the NDA and shall not disclose any such information to any third party except as expressly permitted by the NDA or this Agreement.
Neither Party shall issue or cause to be issued any press release, public announcement, or other public statement regarding this Agreement, the Proposed Transaction, or the discussions and negotiations between the Parties, without the prior written consent of the other Party; provided, however, that the foregoing shall not restrict any disclosure that a Party determines in good faith (after consultation with outside legal counsel) is required by applicable law, regulation, or the rules of any stock exchange on which such Party's securities are listed or traded (including, without limitation, the Frankfurt Stock Exchange, the Regulated Market (Regulierter Markt) of the Frankfurt Stock Exchange, and the Nasdaq Global Select Market), in which case the disclosing Party shall use reasonable best efforts to provide the other Party with advance notice of such disclosure and a reasonable opportunity to review and comment upon such disclosure prior to its publication.
SECTION 8: REMEDIES
8.1 Specific Performance. Each Party acknowledges and agrees that a breach of the obligations set forth in Section 2 (Exclusivity Covenant) or Section 7 (Confidentiality) would cause irreparable harm to the non-breaching Party for which monetary damages alone would not be an adequate remedy. Accordingly, each Party agrees that, in the event of any such breach or threatened breach, the non-breaching Party shall be entitled to seek and obtain specific performance, temporary restraining orders, preliminary and permanent injunctive relief, and any other equitable remedies, in addition to any and all other remedies available at law or in equity, without the necessity of proving actual damages or irreparable harm and without the requirement of posting any bond, surety, or other security as a condition to obtaining such equitable relief (to the extent such requirement may be waived under applicable law). The Parties agree that they will not oppose the granting of such equitable relief on the basis that the non-breaching Party has an adequate remedy at law or that any bond, surety, or other security should be required.
8.2 Reimbursement of Expenses. In the event that Vectris breaches any of its exclusivity obligations under Section 2 of this Agreement and such breach results in or contributes to the termination of this Agreement (whether by Halcyon or by Vectris), Vectris shall, within ten (10) business days following written demand therefor by Halcyon accompanied by reasonable documentation, promptly reimburse Halcyon for its documented, reasonable, and verifiable out-of-pocket expenses actually incurred by Halcyon and its Representatives in connection with the evaluation, due diligence review, and negotiation of the Proposed Transaction (including, without limitation, fees and expenses of legal counsel, financial advisors, accountants, consultants, and other professional advisors, as well as travel and related expenses), in an aggregate amount not to exceed Two Million Dollars ($2,000,000) (the "Expense Reimbursement Cap"). The obligation of Vectris to reimburse expenses under this Section 8.2 shall be in addition to, and not in limitation of, any other rights or remedies available to Halcyon under this Agreement, at law, or in equity. For the avoidance of doubt, payment of the expense reimbursement shall not relieve Vectris of any liability for damages that Halcyon may otherwise be entitled to recover as a result of Vectris's breach.
SECTION 9: MISCELLANEOUS
9.1 Governing Law. This Agreement shall be governed by, and construed and enforced in accordance with, the internal laws of the State of Delaware, without giving effect to any choice-of-law or conflict-of-law rules, provisions, or principles (whether of the State of Delaware or any other jurisdiction) that would cause the application of the substantive laws of any jurisdiction other than the State of Delaware.
9.2 Jurisdiction and Venue. Each Party hereby irrevocably and unconditionally submits to the exclusive jurisdiction of the Court of Chancery of the State of Delaware (or, if the Court of Chancery of the State of Delaware declines to accept jurisdiction, the United States District Court for the District of Delaware, or if such federal court also declines to accept jurisdiction, any state court of the State of Delaware) for any action, suit, or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby, and each Party hereby irrevocably and unconditionally waives any objection to the laying of venue in any such court, including any objection based on the doctrine of forum non conveniens or on grounds of inconvenient forum. Each Party agrees that service of process in any such action, suit, or proceeding may be effected by the means by which notices are to be given to such Party under Section 9.3 hereof.
9.3 Notices. All notices, requests, demands, consents, waivers, and other communications required or permitted under this Agreement shall be in writing and shall be deemed to have been duly given: (i) when delivered personally; (ii) upon confirmed delivery by a nationally recognized overnight courier service (with all fees prepaid); (iii) upon confirmed receipt if sent by email (with a PDF attachment of the executed notice); or (iv) three (3) business days after deposit in the United States mail, certified or registered, postage prepaid, return receipt requested, in each case addressed as follows (or to such other address as a Party may designate in writing from time to time in accordance with this Section 9.3):
If to Halcyon:
Halcyon Semiconductor Aktiengesellschaft Halcyon-Platz 1 81739 München, Germany
Attention: Dr. Luisa Hartmann, General Counsel
Email: l.hartmann@halcyonsemi.de
with a copy (which shall not constitute notice) to:
Calderwood & Harkness LLP 599 Lexington Avenue, 38th Floor New York, New York 10022
Attention: Oliver Mackenzie
Email: omackenzie@calderwoodharkness.com
If to Vectris:
Vectris Photonics, Inc. 4750 Ridgepoint Drive, Suite 300 San Jose, California 95134
Attention: Rebecca Lau, General Counsel & Corporate Secretary
Email: rlau@vectrisphotonics.com
with a copy (which shall not constitute notice) to:
Whitfield, Prager & Loomis LLP 2600 Sand Hill Road, Suite 250 Menlo Park, California 94025
Attention: Catherine Whitfield
Email: cwhitfield@wpllaw.com
9.4 Entire Agreement. This Agreement, together with the NDA, constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings, negotiations, discussions, representations, warranties, and communications, whether oral or written, between the Parties or their respective Representatives with respect to such subject matter. No Party has relied on any statement, representation, warranty, or agreement of the other Party or any of the other Party's Representatives except as expressly set forth in this Agreement and the NDA.
9.5 Amendments and Waivers. No amendment, modification, supplement, or waiver of any provision of this Agreement shall be valid or effective unless made in writing and duly executed by each Party. No failure or delay by any Party in exercising any right, power, or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power, or privilege. The rights and remedies provided herein shall be cumulative and not exclusive of any other rights or remedies provided by law, equity, or otherwise.
9.6 Assignment. Neither Party may assign, delegate, or otherwise transfer any of its rights, interests, or obligations under this Agreement without the prior written consent of the other Party, and any purported assignment, delegation, or transfer in violation of this Section 9.6 shall be null and void and of no force or effect; provided, however, that Halcyon may, without the consent of Vectris, assign any or all of its rights (but not its obligations) under this Agreement to any wholly owned subsidiary of Halcyon formed for the purposes of the Proposed Transaction, including Halcyon Acquisition Sub, Inc. (or such other name as may be selected), once such subsidiary has been duly incorporated, and any such assignment shall not relieve Halcyon of any of its obligations hereunder. Subject to the foregoing, this Agreement shall be binding upon, and shall inure to the benefit of, the Parties and their respective successors and permitted assigns.
9.7 No Third-Party Beneficiaries. Nothing in this Agreement, express or implied, is intended to or shall confer upon any Person other than the Parties hereto and their respective successors and permitted assigns any rights, benefits, remedies, obligations, or liabilities of any nature whatsoever under or by reason of this Agreement. Without limiting the generality of the foregoing, no Representative of either Party shall be deemed a third-party beneficiary of this Agreement.
9.8 Severability. If any provision of this Agreement is held to be invalid, illegal, or unenforceable by any court of competent jurisdiction or other governmental authority, such invalidity, illegality, or unenforceability shall not affect any other provision of this Agreement, and this Agreement shall be construed and enforced as if such invalid, illegal, or unenforceable provision had not been included herein, provided that the remaining provisions, as so construed and enforced, continue to effectuate the original intent and purpose of the Parties to the greatest extent practicable. In the event that any provision is so held to be invalid, illegal, or unenforceable, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner.
9.9 Counterparts and Electronic Signatures. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which, taken together, shall constitute one and the same instrument. The exchange of copies of this Agreement and of signature pages by facsimile transmission, electronic mail (including in ".pdf," ".tif," or similar format), or other electronic transmission shall constitute effective execution and delivery of this Agreement and may be used in lieu of the original Agreement for all purposes. Signatures of the Parties transmitted by any such method shall be treated in all respects as having the same force and effect as original signatures.
9.10 Expenses. Except as otherwise expressly provided in Section 8.2 hereof (Reimbursement of Expenses), each Party shall bear and pay its own costs, fees, and expenses (including, without limitation, the fees and expenses of its legal counsel, financial advisors, accountants, and other professional advisors) incurred in connection with the negotiation, preparation, execution, and performance of this Agreement and the evaluation and pursuit of the Proposed Transaction.
[Signature Page Follows]
IN WITNESS WHEREOF, the Parties have caused this Exclusivity Agreement to be duly executed and delivered by their respective duly authorized officers as of the date first written above.
HALCYON SEMICONDUCTOR AKTIENGESELLSCHAFT
By: ________
Name: Dr. Katarina Breuer
Title: Chief Executive Officer (Vorstandsvorsitzende)
Date: June 20, 2023
By: ________
Name: Markus Ellinger
Title: Chief Financial Officer (Finanzvorstand)
Date: June 20, 2023
VECTRIS PHOTONICS, INC.
By: ________
Name: Dr. Anand Raghavan
Title: Founder, Chief Executive Officer, and Chair of the Board of Directors
Date: June 20, 2023
Signature Page to Exclusivity Agreement dated June 20, 2023, between Halcyon Semiconductor Aktiengesellschaft and Vectris Photonics, Inc.

EXCLUSIVITY AGREEMENT

RECITALS

SECTION 1: DEFINITIONS

SECTION 2: EXCLUSIVITY COVENANT

SECTION 3: DUE DILIGENCE ACCESS

SECTION 4: GOOD FAITH NEGOTIATION

SECTION 5: STANDSTILL

SECTION 6: TERM AND TERMINATION

SECTION 7: CONFIDENTIALITY

SECTION 8: REMEDIES

SECTION 9: MISCELLANEOUS

HALCYON SEMICONDUCTOR AKTIENGESELLSCHAFT

VECTRIS PHOTONICS, INC.

Record

Parties

Dates

Amounts