PRIVILEGED AND CONFIDENTIAL ATTORNEY-CLIENT COMMUNICATION
CALDERWOOD & HARKNESS LLP 1301 K Street NW, Suite 1100 Washington, D.C. 20005
October 11, 2025
Marcus Friedl, Esq. General Counsel Halcyon Semiconductor AG Bahnhofstrasse 42 8001 Glenrock Assurance, Switzerland
Derek Tran President Halcyon Semiconductor Inc. 4700 Great America Parkway, Suite 300 San Jose, CA 95054
Re: Engagement of Calderwood & Harkness LLP — DOJ National Security Division Inquiry (Reference No. NSD-CES-2025-04871)
Dear Mr. Friedl and Mr. Tran:
We are pleased to confirm that Halcyon Semiconductor AG ("HSAG") and its wholly owned U.S. subsidiary, Halcyon Semiconductor Inc. ("HSI," and together with HSAG, "Halcyon" or the "Company"), have engaged Calderwood & Harkness LLP ("C&H" or the "Firm") to represent the Company in connection with the inquiry initiated by the U.S. Department of Justice, National Security Division, Counterintelligence and Export Control Section ("DOJ NSD/CES"). The Inquiry arises out of a voluntary request for information letter dated October 9, 2025, bearing reference number NSD-CES-2025-04871 (the "Inquiry"). This letter sets forth the terms and conditions upon which the Firm will undertake this engagement. We ask that you review these terms carefully and, if they are acceptable, return a countersigned copy of this letter to our offices at your earliest convenience.
1. Scope of Engagement
The Firm's representation of the Company in this matter shall encompass the following:
(a) Responding to the DOJ's voluntary request for information and any subsequent requests, subpoenas, civil investigative demands, or other compulsory process that may be issued by DOJ NSD/CES or any other governmental authority in connection with the Inquiry;
(b) Conducting a privileged internal investigation into the facts and circumstances underlying the Inquiry, including but not limited to the seventeen shipments of HCA-9100 series chipsets (classified under Export Control Classification Number 3A001) to Zhonghe Microelectronics Co., Ltd. and Lansheng Harborline Technologies Technologies Ltd. through Archipelago Component Solutions Pte. Ltd., including the identification, collection, review, and analysis of relevant documents and the conduct of witness interviews as the Firm deems appropriate;
(c) Preparing and filing, if appropriate and in consultation with the Company, a voluntary self-disclosure with the Bureau of Industry and Security, Office of Export Enforcement, U.S. Department of Commerce, in connection with any potential violations of the Export Administration Regulations, 15 C.F.R. Parts 730–774, that may be identified during the course of the internal investigation;
(d) Negotiating any resolution, settlement, consent agreement, deferred prosecution agreement, non-prosecution agreement, or other disposition of the Inquiry with DOJ NSD/CES, including the preparation of any position papers, white papers, or advocacy submissions in support of such negotiations;
(e) Coordinating with the Company's other professional advisors, including Braxton Merritt LLP (corporate and securities counsel), Kessler Pratt & Whitfield LLP (German and EU export control counsel), and any compliance consultants, forensic accountants, or other professionals retained by the Company in connection with this matter, to ensure a consistent and coordinated approach to the Company's response to the Inquiry; and
(f) Advising on related matters arising from or in connection with the Inquiry, including but not limited to potential exposure under regulations administered by the Office of Foreign Assets Control ("OFAC") of the U.S. Department of the Treasury, the Export Administration Regulations administered by the Bureau of Industry and Security of the U.S. Department of Commerce, the International Traffic in Arms Regulations administered by the Directorate of Defense Trade Controls of the U.S. Department of State, and any parallel regulatory or enforcement actions that may be initiated by federal, state, or foreign governmental authorities in connection with the subject matter of the Inquiry.
Exclusions. This engagement does not extend to representation of the Company in any separate civil litigation, shareholder derivative actions, securities enforcement proceedings, internal revenue or tax matters, or any other matters that may arise in connection with or as a consequence of the Inquiry, unless the parties separately agree in writing to expand the scope of this engagement to include such matters. In the event that any such matter arises, we would be pleased to discuss whether the Firm is in a position to provide additional representation, which would be the subject of a separate engagement letter.
2. Engagement Team
The following attorneys will serve as the primary engagement team for this matter:
From time to time, other C&H attorneys, including partners, counsel, associates, and staff attorneys, may be involved in the engagement as the needs of the matter require. We will endeavor to staff the matter efficiently and to minimize the number of attorneys working on any given task. The Company will be notified if there are any material changes to the composition of the core engagement team described above.
3. Fees and Billing
Hourly Rates. The Firm will bill for professional services rendered in connection with this engagement on an hourly basis at the following standard rates for calendar year 2025:
These rates are subject to annual adjustment, typically effective January 1 of each calendar year, consistent with the Firm's standard rate-setting practices. The Company will be notified in advance of any rate adjustments. Time will be recorded and billed in increments of one-tenth of an hour (six minutes).
Costs and Disbursements. In addition to professional fees, the Firm will bill the Company for reasonable out-of-pocket costs and disbursements incurred in connection with the engagement, including but not limited to: travel expenses (airfare, lodging, ground transportation, and meals incurred in connection with the engagement); document review technology and hosting costs, including the use of technology-assisted review and predictive coding platforms; court reporter and transcript fees; expert and consultant fees (to the extent such experts or consultants are retained through or at the direction of C&H); copying and printing charges in excess of routine amounts; messenger and courier services; long-distance telephone charges; filing fees; and similar expenses. The Firm will endeavor to consult with the Company before incurring any single disbursement in excess of $25,000, although the Firm reserves the right to incur such costs without prior approval where time constraints or other circumstances make prior consultation impracticable.
Preliminary Fee Estimate. Based on our current understanding of the scope and complexity of the Inquiry and the anticipated internal investigation, we estimate that total professional fees for this engagement will be in the range of $2,800,000 to $3,400,000. This estimate is provided solely for planning purposes and is not a cap or a guarantee. Actual fees will depend on a number of factors that are difficult to predict at this stage, including the scope and duration of the DOJ's inquiry, the volume of documents to be reviewed, the number of witness interviews to be conducted, the complexity of any negotiations with DOJ NSD/CES, and the extent of any parallel regulatory inquiries. This estimate does not include the costs of compliance consultants, monitors, or other third-party professionals that may be retained in connection with the matter or any resolution thereof.
Invoicing and Payment. The Firm will issue invoices on a monthly basis. Each invoice will set forth a summary of the professional services rendered and costs incurred during the preceding billing period, together with a description of the services performed by each timekeeper. Payment is due within thirty (30) days of the date of each invoice. Amounts not paid within such period may, at the Firm's discretion, accrue interest at the rate of 1.0% per month (or the maximum rate permitted by applicable law, whichever is less) from the date of the invoice until payment is received.
Retainer. No retainer is requested at this time. The Firm reserves the right to request an advance retainer deposit at any time during the course of the engagement if circumstances warrant, including but not limited to a material expansion of the scope of the Inquiry or the commencement of parallel enforcement proceedings. Any retainer deposit will be held in the Firm's client trust account and applied against final invoices rendered in the engagement.
4. Dual Representation
The Firm confirms that it will represent both HSAG, organized under the laws of Switzerland, and HSI, organized under the laws of the State of Delaware, in connection with the Inquiry. At the present time, we understand and believe that the interests of HSAG and HSI are aligned with respect to the subject matter of the Inquiry, and we do not foresee any conflict of interest that would preclude joint representation.
We are obligated, however, to advise you that the potential for a conflict of interest between HSAG and HSI exists in any joint representation. Such a conflict could arise, for example, if the factual investigation reveals that the conduct at issue was directed or authorized by one entity but not the other, if the DOJ seeks to impose liability or penalties on one entity that the other entity disputes, or if the interests of the two entities diverge in connection with any proposed resolution or settlement of the Inquiry.
If, at any time during the course of this engagement, a conflict of interest arises or becomes apparent between HSAG and HSI, the Firm will promptly notify both clients. In such event, it may be necessary for one or both entities to retain separate counsel with respect to the conflicted issue or, in certain circumstances, for the Firm to withdraw from the representation of one or both entities. The Firm will work with both clients to ensure a smooth and orderly transition in the event that separate representation becomes necessary.
By signing this engagement letter, both HSAG and HSI consent to the joint representation described herein and acknowledge the potential for conflicts of interest in the dual representation. Each entity further confirms that it has had the opportunity to consult with independent counsel regarding the implications of joint representation and has elected to proceed with the joint engagement on the terms set forth in this letter.
5. Document Preservation
The Company must immediately implement a comprehensive litigation hold to preserve all documents, communications, and electronically stored information ("ESI") that are potentially relevant to the Inquiry. The obligation to preserve relevant materials is ongoing and extends to all employees, officers, directors, agents, and representatives of both HSAG and HSI who may possess, have access to, or have custody or control over relevant materials.
The scope of the litigation hold shall encompass, at a minimum, all records relating to shipments, sales, transfers, re-exports, or other dispositions of products classified under Export Control Classification Number 3A001 to any customer, distributor, intermediary, reseller, or end user based in, organized in, or operating from the People's Republic of China, from January 1, 2023 to the present. Without limiting the foregoing, the hold shall include but not be limited to:
• electronic communications, including emails, instant messages, text messages, and communications through collaboration platforms such as Northgate Data Systems, Meridian Solutions, or similar applications;
• shipping records, bills of lading, commercial invoices, packing lists, and customs documentation;
• end-user certificates, end-use statements, and any certifications obtained from customers, distributors, or intermediaries;
• compliance screening logs, denied party screening results, and export classification records;
• internal memoranda, presentations, reports, and meeting minutes relating to export compliance, the HCA-9100 series chipsets, or any of the entities referenced in the DOJ's voluntary request for information;
• contracts, purchase orders, distribution agreements, and related commercial documentation involving Zhonghe Microelectronics Co., Ltd., Lansheng Harborline Technologies Technologies Ltd., and Archipelago Component Solutions Pte. Ltd.; and
• any other documents or ESI that may be relevant to the subject matter of the Inquiry, as further defined in the litigation hold notice to be circulated by the Firm.
The Firm will work with the Company to prepare and distribute a formal litigation hold notice to all relevant custodians. The Company must ensure that all automatic deletion policies, including email retention policies and document destruction schedules, are suspended with respect to potentially relevant materials. Failure to preserve relevant documents could result in severe sanctions, adverse inferences, or other consequences in any related judicial or administrative proceeding.
6. Privileged Communications
All communications between the Firm and the Company in connection with this engagement, including oral communications, written correspondence, electronic communications, memoranda, and work product prepared by the Firm, are protected by the attorney-client privilege and/or the work product doctrine to the fullest extent permitted by applicable law. These protections are essential to the effective representation of the Company and the successful conduct of the internal investigation.
The Company must take care not to disclose privileged communications or attorney work product to third parties without the Firm's prior written approval. Disclosure of privileged communications to third parties — including, without limitation, to business partners, co-venturers, lenders, auditors, or other persons or entities who are not within the scope of the attorney-client relationship — may result in a waiver of the privilege, potentially on a subject-matter basis. In the event that the Company receives a request or demand for the production of privileged communications from any governmental authority, private litigant, or other party, the Company should immediately notify the Firm before making any disclosure so that the Firm may take appropriate steps to protect the privilege.
We note that the question of whether and to what extent attorney-client privilege and work product protections will be asserted or waived in connection with the Inquiry, including in connection with any potential voluntary self-disclosure or cooperation with DOJ NSD/CES, is a strategic decision that will be made jointly by the Company and the Firm as the matter progresses.
7. Governing Law
This engagement letter and the relationship between the Firm and the Company shall be governed by, and construed in accordance with, the laws of the District of Columbia, including the District of Columbia Rules of Professional Conduct, without regard to conflict of laws principles.
We look forward to working with you and your teams on this important matter. We recognize the seriousness of the Inquiry and are committed to providing the Company with the highest caliber of legal representation as we navigate the government's investigation and any related proceedings. Should you have any questions regarding the terms of this engagement letter, please do not hesitate to contact Howard Quinn at (202) 555-4100 or howard.quinn@calderwoodharkness.com.
Please confirm your agreement to the terms set forth herein by signing and returning the enclosed counterpart of this letter.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Howard Quinn, Partner
Date: October 11, 2025
ACKNOWLEDGED AND AGREED:
The undersigned hereby confirm their agreement to the terms and conditions of this engagement letter, including the scope of engagement, fee arrangements, dual representation and consent to joint representation, document preservation obligations, and all other terms set forth herein.
HALCYON SEMICONDUCTOR AG
By: ________
Name: Marcus Friedl
Title: General Counsel
Date: October 11, 2025
HALCYON SEMICONDUCTOR INC.
By: ________
Name: Derek Tran
Title: President
Date: October 11, 2025
| Attorney | Role |
| Howard Quinn, Partner | Responsible Partner — Mr. Quinn will serve as the lead partner with overall responsibility for the engagement and will serve as the primary point of contact for the Company on strategic matters. |
| Conrad Ashby, Partner | Billing Partner — Mr. Ashby will supervise all billing and administrative aspects of the engagement and will contribute substantive expertise in export control enforcement defense. |
| Liam Donahue, Associate | Lead Associate — Mr. Donahue will manage the day-to-day conduct of the internal investigation, coordinate document collection and review, and serve as the primary drafting attorney for submissions to DOJ NSD/CES. |
| Steven Hollander, Associate | Working Associate — Mr. Hollander will support the engagement team on all aspects of the matter, including legal research, document review, and preparation of memoranda. |
| Dr. Sabine Rücker, Of Counsel (Frankfurt) | German Trade Compliance Counsel — Dr. Rücker will be available as needed to advise on questions of German and European Union export control law, including the EU Dual-Use Regulation (EU) 2021/821, and to coordinate with Kessler Pratt & Whitfield LLP as appropriate. |
| Timekeeper | Hourly Rate |
| Howard Quinn, Partner | $1,875 / hour |
| Conrad Ashby, Partner | $1,750 / hour |
| Liam Donahue, Associate | $1,150 / hour |
| Steven Hollander, Associate | $925 / hour |
| Dr. Sabine Rücker, Of Counsel | €1,050 / hour |