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1032-00007 · Client 1032 · Correspondence
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CALDERWOOD & HARKNESS LLP Attorneys at Law 1301 K Street NW, Suite 1100 Washington, D.C. 20005 Telephone: (202) 555-0100 Facsimile: (202) 555-0199

November 1, 2025

VIA OVERNIGHT COURIER

Ms. Danielle Osborne Vice President, Relationship Manager Lodestar National Bank 401 South Tryon Street Charlotte, NC 28202

Re: Notice Under Section 6.02(b) of Credit Agreement — Halcyon Semiconductor Inc.

Dear Ms. Osborne:

Calderwood & Harkness LLP writes as counsel to Halcyon Semiconductor Inc. ("HSI" or the "Borrower") in connection with the Credit Agreement dated as of March 15, 2023 (as defined more fully below, the "Credit Agreement"), by and among HSI, as Borrower, Halcyon Semiconductor AG ("HSAG"), as Guarantor, Lodestar National Bank, as Administrative Agent, and the several lenders from time to time party thereto (collectively, the "Lenders"). The Credit Agreement, which provides for a $300,000,000 revolving credit facility, has been amended by that certain First Amendment to Credit Agreement dated as of December 1, 2023, and that certain Second Amendment to Credit Agreement dated as of August 12, 2024 (the Credit Agreement, as so amended and as may be further amended, restated, supplemented, or otherwise modified from time to time, the "Credit Agreement"). Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to such terms in the Credit Agreement.

Pursuant to Section 6.02(b) of the Credit Agreement, which requires the Borrower to provide prompt written notice to the Administrative Agent of any litigation, investigation, or proceeding pending or, to the knowledge of the Borrower, threatened against the Borrower or any of its Subsidiaries that could reasonably be expected to have a Material Adverse Effect, HSI hereby provides notice to Lodestar National Bank, in its capacity as Administrative Agent, of the matter described below. HSI is furnishing this notice in accordance with its obligations under the Credit Agreement and requests that the Administrative Agent distribute this notice to the Lenders as required under the Credit Agreement.

I. Description of the Department of Justice Inquiry

On October 9, 2025, HSI received a voluntary request for information (the "Request") from the United States Department of Justice ("DOJ"), National Security Division, Counterintelligence and Export Control Section. The DOJ reference number assigned to this matter is NSD-CES-2025-04871. The Request relates to certain shipments of semiconductor components classified under Export Control Classification Number ("ECCN") 3A001 to end users located in the People's Republic of China ("PRC"). The shipments at issue were routed through HSAG's authorized distributor in Singapore, Archipelago Component Solutions Pte. Ltd. ("ACS"), an entity with which HSAG and HSI have maintained a distribution relationship since 2019.

The DOJ's inquiry concerns potential violations of the Export Administration Regulations ("EAR"), 15 C.F.R. Parts 730–774, as administered by the Bureau of Industry and Security ("BIS") of the U.S. Department of Commerce. More specifically, the inquiry focuses on potential violations of the provisions relating to the Entity List set forth at 15 C.F.R. § 744.11, which imposes license requirements on exports, reexports, and transfers (in-country) of specified items to listed entities and restricts the availability of license exceptions for such transactions.

The Request identifies seventeen (17) shipments of HCA-9100 series analog-to-digital converter chipsets manufactured by HSI at its fabrication facility in Austin, Texas, and exported during the period from March 12, 2024 through August 19, 2025. The end users identified in the Request are (i) Zhonghe Microelectronics Co., Ltd., a company organized under the laws of the PRC with its principal offices in Shenzhen, PRC ("Zhonghe"), and (ii) Lansheng Harborline Technologies Technologies Ltd., a company organized under the laws of the PRC with its principal offices in Chengdu, PRC ("Lansheng"). Of the seventeen shipments, eleven (11) were consigned to Zhonghe, with an aggregate value of approximately $4,410,000, and six (6) were consigned to Lansheng, with an aggregate value of approximately $2,420,000. The total aggregate value of the shipments under scrutiny is approximately $6,830,000.

The DOJ's primary focus appears to be on three (3) specific shipments to Zhonghe that occurred after Zhonghe's addition to the BIS Entity List, which became effective on June 14, 2025, pursuant to a final rule published in the Federal Register at 90 Fed. Reg. _ (June 10, 2025). These three post-Entity-List shipments were dated June 27, 2025, July 15, 2025, and August 3, 2025, respectively (collectively, the "Post-Listing Shipments"). HSI understands that the DOJ is examining whether the Post-Listing Shipments were made without the required BIS licenses and whether HSI or ACS had actual or constructive knowledge of Zhonghe's Entity List designation at the time the Post-Listing Shipments were authorized and executed.

II. Engagement of Counsel and Cooperation Posture

HSI has retained Calderwood & Harkness LLP to represent it in connection with the DOJ inquiry and all related regulatory proceedings. The engagement became effective on October 11, 2025. The Calderwood & Harkness team assigned to this matter consists of Howard Quinn, Partner (Responsible Partner), Conrad Ashby, Partner (Billing Partner), Liam Donahue, Senior Associate (Lead Associate), and Steven Hollander, Associate (Working Associate). The engagement encompasses all aspects of HSI's response to the DOJ Request, coordination with BIS, and any related enforcement proceedings or administrative actions.

HSI intends to cooperate fully with the Department of Justice and the Bureau of Industry and Security in connection with this inquiry. HSI views full and transparent cooperation as both a legal obligation and a reflection of the company's commitment to compliance with all applicable export control laws and regulations. HSI has instructed its personnel to preserve all documents and communications potentially responsive to the Request and has implemented a litigation hold across relevant business units, including its Global Trade Compliance, Sales Operations, and Supply Chain Management departments.

III. Retention of Independent Compliance Consultant

In addition to the retention of outside counsel, HSI has engaged an independent compliance consultant, Ashford Pennington LLC, to conduct a comprehensive review of HSI's export compliance program, including its restricted-party screening procedures, end-user verification protocols, and distribution channel oversight controls. The engagement of Ashford Pennington LLC became effective on October 22, 2025. Dr. Miriam Hecht, Principal Consultant at Ashford Pennington LLC and a former Deputy Assistant Secretary of Commerce for Export Enforcement, is leading the review. The scope of Ashford Pennington's engagement includes, among other things, an assessment of the root causes of the compliance gaps that may have contributed to the Post-Listing Shipments, recommendations for remedial measures, and the development of enhanced training programs for HSI and ACS personnel involved in export classification and restricted-party screening.

IV. Voluntary Self-Disclosure

HSI anticipates filing a voluntary self-disclosure ("VSD") with the Bureau of Industry and Security, Office of Export Enforcement, regarding the three Post-Listing Shipments to Zhonghe. The VSD is currently being prepared by Calderwood & Harkness in coordination with HSI's internal compliance team and Ashford Pennington LLC, and is expected to be filed on or about November 4, 2025. HSI believes that the filing of a VSD is consistent with BIS enforcement policy, which affords substantial mitigating credit to parties that voluntarily self-disclose potential violations and cooperate with enforcement investigations. HSI's decision to file a VSD reflects its commitment to transparency and its good-faith effort to address the potential violations promptly and responsibly.

V. Assessment of Exposure and Materiality

Based on the information available at this time, and in light of the early stage of the inquiry, HSI does not believe that the DOJ inquiry will result in (a) a denial of HSI's export privileges, or (b) criminal prosecution of HSI or any of its officers, directors, or employees. HSI is evaluating the potential for a civil administrative resolution of this matter, which could involve the payment of a civil monetary penalty or the entry into an administrative settlement agreement with BIS.

HSI's preliminary assessment, informed by the advice of counsel and a review of publicly available precedent in comparable enforcement actions, is that any monetary penalty or settlement amount is unlikely to exceed $5,500,000, which represents the DOJ's preliminary indication of the range of potential exposure communicated informally to Calderwood & Harkness during an initial telephonic conference on October 24, 2025. HSI notes that this preliminary exposure figure is well below the threshold for a Material Adverse Effect as defined in the Credit Agreement, particularly when viewed in the context of HSI's and HSAG's financial position. For reference, HSI's fiscal year 2024 revenue was approximately $1,140,000,000, and HSAG's fiscal year 2024 consolidated revenue was approximately €4,270,000,000. The aggregate value of all seventeen shipments under scrutiny ($6,830,000) represents less than 0.6% of HSI's annual revenue, and any potential penalty of $5,500,000 or less would represent less than 0.5% of HSI's annual revenue.

HSI acknowledges that this assessment is preliminary and is based on the facts currently known to HSI and its counsel. The inquiry is in its early stages, and additional facts may emerge as the investigation proceeds that could alter this assessment. HSI will continue to evaluate the materiality of this matter and will provide supplemental notices to the Administrative Agent as warranted by material developments.

VI. OFAC Confirmation

HSI wishes to confirm that this matter does not involve any allegations related to economic sanctions programs administered by the Office of Foreign Assets Control ("OFAC") of the U.S. Department of the Treasury. The DOJ's inquiry is limited in scope to potential violations of the Export Administration Regulations administered by the Bureau of Industry and Security of the U.S. Department of Commerce. Neither Zhonghe Microelectronics Co., Ltd. nor Lansheng Harborline Technologies Technologies Ltd. is, to HSI's knowledge, designated on OFAC's List of Specially Designated Nationals and blocked Persons (the "SDN List") or on any other OFAC-administered restricted-party list. No OFAC-administered sanctions program — including, without limitation, those pertaining to the PRC — is implicated by the facts underlying the DOJ inquiry as currently understood by HSI and its counsel.

VII. Compliance-with-Law Covenant

HSI acknowledges that the Credit Agreement contains a covenant requiring the Borrower and its Subsidiaries to comply in all material respects with all applicable laws, rules, regulations, and orders, including, without limitation, applicable export control laws and regulations. HSI takes its obligations under this covenant seriously and is undertaking prompt and diligent steps to investigate the circumstances surrounding the Post-Listing Shipments, to remediate any compliance deficiencies identified in connection with the inquiry, and to enhance its export compliance program to prevent the recurrence of similar issues. These remedial steps include, as noted above, the retention of outside counsel, the engagement of an independent compliance consultant, the implementation of a document preservation and litigation hold protocol, and the anticipated filing of a voluntary self-disclosure with BIS.

HSI does not believe, based on the facts currently known to it and its counsel, that the circumstances described in this notice constitute a breach of the compliance-with-law covenant set forth in the Credit Agreement. HSI's provision of this notice should not be construed as an admission or acknowledgment of any such breach. Rather, HSI is providing this notice out of an abundance of caution and in furtherance of its commitment to transparency with the Administrative Agent and the Lenders.

VIII. Reservation of Rights and Disclaimer

This notice is provided out of an abundance of caution and in satisfaction of HSI's obligations under Section 6.02(b) of the Credit Agreement. Nothing in this notice shall constitute, nor shall it be deemed to constitute, an acknowledgment, admission, or concession by HSI or HSAG that (a) a Material Adverse Effect has occurred or is reasonably expected to occur, (b) any Default or Event of Default has occurred or is continuing under the Credit Agreement, or (c) any violation of applicable law has in fact occurred. HSI and HSAG expressly reserve all of their respective rights, remedies, defenses, and privileges under the Credit Agreement and at law or in equity, and nothing in this notice shall be construed as a waiver of any such right, remedy, defense, or privilege.

The information provided in this notice is based on facts currently known to HSI and its counsel as of the date hereof. As noted above, the DOJ inquiry is in its early stages, and the scope and direction of the investigation may evolve. Additional facts, documents, or circumstances may come to light that could materially alter HSI's assessment of the matter. HSI undertakes to provide supplemental notices to the Administrative Agent in accordance with the Credit Agreement as additional material information becomes available.

IX. Availability for Discussion

Calderwood & Harkness LLP is available to discuss this notice and the underlying matter at Lodestar National Bank's convenience. Please direct all inquiries to:

Howard Quinn, Partner Calderwood & Harkness LLP 1301 K Street NW, Suite 1100 Washington, D.C. 20005 Telephone: (202) 555-0147

Email: hquinn@calderwoodharkness.com

We would be pleased to arrange a call or in-person meeting with the appropriate representatives of Lodestar National Bank to provide additional detail regarding the matters described herein, subject to applicable privileges and confidentiality considerations.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Howard Quinn Partner

cc: Marcus Friedl, General Counsel, Halcyon Semiconductor AG Derek Tran, President, Halcyon Semiconductor Inc.