Contract analysis

I. Executive Summary and Purpose The purpose of this memorandum is to analyze the sub-custodian appointment mechanics and related custodian chain arrangements under the proposed Deposit Agreement (the "Deposit Agreement") to be entered into among Halcyon Semiconductor Aktiengesellschaft ("Halcyon" or "HSAG"), Meridian Trust Company, National Association ("Meridian Trust" or the "Depositary"), and holders and benefici

II. Background: The ADR Custodian Chain A. Overview of the Depositary Receipt Structure The proposed Level III ADR program will be structured in accordance with the customary depositary receipt architecture used for cross-border equity offerings by non-US issuers into the United States. Under this structure, Meridian Trust Company, N.A., a national banking association organized under the laws of the United States, wi

III. Appointment of the German Sub-Custodian A. Selection Criteria The Deposit Agreement, as currently drafted, grants Meridian Trust the exclusive right to appoint, replace, and supervise the sub-custodian in the issuer's home jurisdiction. This is consistent with standard market practice for Level III ADR programs, in which the depositary bank exercises its own judgment, informed by operational and regulatory consi

IV. Ashgrove Enterprises Banking AG Settlement Infrastructure A. Overview of Ashgrove Enterprises Ashgrove Enterprises Banking AG is the German central securities depository (CSD) and international central securities depository (ICSD) based in Frankfurt am Main, Germany. Ashgrove Enterprises was established in its current form in 2000 following the merger of Deutsche Börse Clearing AG and Cedel International, and it

1. Ordinary shares are delivered to the sub-custodian's Ashgrove Enterprises account by the depositing party (whether Halcyon, in the case of newly issued shares, or a selling shareholder, in the case of existing shares).

2. The sub-custodian confirms receipt of the ordinary shares to Meridian Trust, providing details of the deposit including the number of shares received, the identity of the depositing party, and any applicable reference numbers.

3. Upon confirmation of deposit, Meridian Trust issues the corresponding number of ADSs on its books (at the ratio of 1 ADS per 2 ordinary shares) and instructs Crestfield Transfer Services Inc., as transfer agent, to record the issuance.

4. The newly issued ADSs are credited to DTC's account and distributed through the DTC system to DTC participants and, ultimately, to the beneficial holders of the ADSs in the United States. The reverse process applies for the cancellation or withdrawal of ADSs:

1. An ADS holder wishing to withdraw the underlying ordinary shares surrenders its ADSs to Meridian Trust (through its broker or DTC participant).

2. Meridian Trust cancels the surrendered ADSs and instructs the sub-custodian to release the corresponding number of ordinary shares from the Ashgrove Enterprises account.

3. The sub-custodian transfers the ordinary shares within the Ashgrove Enterprises system to the designated Ashgrove Enterprises account of the withdrawing holder (or the holder's custodian bank).

4. Upon completion of the transfer, the sub-custodian confirms the release to Meridian Trust. This bidirectional flow is essential to the fungibility of the ADSs and the ordinary shares, and it enables holders to move freely between the ADS market (Nasdaq) and the ordinary share market (Frankfurt Stock Exchange) as economic and trading conditions warrant. D. Settlement Cycle Considerations The settlement cycle for tr

V. Mechanics for Deposit of Ordinary Shares in Connection with the Offering A. Primary Shares (New Issuance by Halcyon) Halcyon will issue 30,000,000 new ordinary shares (Stammaktien) in connection with the offering. The issuance will be effected pursuant to Halcyon's authorized capital (genehmigtes Kapital) under the company's articles of association (Satzung), with the approval of the Supervisory Board (Aufsichtsra

1. Board Resolution and Regulatory Filing: The Vorstand (Management Board) of Halcyon resolves to issue the 30,000,000 new ordinary shares, with the consent of the Aufsichtsrat (Supervisory Board). The resolution is filed with the Commercial Register (Handelsregister) at the Amtsgericht München. The capital increase becomes legally effective upon registration with the Handelsregister. This step must be coordinated wi

2. Credit to Ashgrove Enterprises Account: Following registration of the capital increase, the new shares are credited to a designated Ashgrove Enterprises account. This may be the sub-custodian's Ashgrove Enterprises account directly or, alternatively, an interim account from which the shares are transferred to the sub-custodian's account. The precise mechanics will depend on the procedures agreed upon between Halcy

3. Confirmation of Receipt: The sub-custodian confirms receipt of the 30,000,000 new ordinary shares to Meridian Trust, providing the relevant Ashgrove Enterprises transaction reference numbers and other settlement details.

4. ADS Issuance: Upon confirmation of receipt, Meridian Trust issues 15,000,000 ADSs (30,000,000 ordinary shares ÷ 2 shares per ADS) against the deposited shares. Crestfield Transfer Services Inc. records the issuance on the ADS register.

5. ADS Delivery Against Payment: The 15,000,000 ADSs representing the primary shares are delivered through DTC to the accounts of the underwriters (Westbridge Securities LLC, as representative of the underwriter syndicate, together with Pinnacle Morgan & Co., Inc., Andover Barcliffe Group Inc., and Northpointe Capital LLC) against payment of the aggregate offering price for the primary shares. All of the foregoing st

1. Custody Agreement / Power of Attorney: Each selling shareholder executes a Custody Agreement and Power of Attorney granting authority to deliver its shares to the sub-custodian's Ashgrove Enterprises account in connection with the offering. The form of Custody Agreement / Power of Attorney is being drafted separately and will include specific Ashgrove Enterprises delivery instructions. Margarethe Wendt will sign o

2. Transfer to Sub-Custodian: On or prior to the closing date, each selling shareholder instructs its respective Ashgrove Enterprises participant (i.e., its custodian bank) to transfer the designated number of ordinary shares to the sub-custodian's Ashgrove Enterprises account. For Rheintal, this involves a domestic Ashgrove Enterprises transfer from Rheintal's Düsseldorf custodian. For Kestrel, this involves a cross

3. Confirmation of Receipt: The sub-custodian confirms receipt of the selling shareholders' shares to Meridian Trust, providing the relevant transaction details for each selling shareholder's delivery.

4. ADS Issuance: Upon confirmation of receipt of all selling shareholder shares, Meridian Trust issues the corresponding ADSs: 4,250,000 ADSs for the Rheintal shares and 2,150,000 ADSs for the Kestrel shares, for a total of 6,400,000 ADSs.

5. ADS Delivery Against Payment; Proceeds Remittance: The 6,400,000 ADSs representing the secondary shares are delivered through DTC to the underwriters against payment. Net proceeds attributable to the selling shareholders are remitted to the selling shareholders after deduction of the underwriters' gross spread of 3.50% and any other applicable fees. Based on the midpoint of the anticipated price range and the 3.50

VI. Ongoing Custodian Obligations Post-IPO A. Safekeeping and Record Maintenance Following the completion of the offering, the sub-custodian's primary ongoing obligation is to maintain the deposited Halcyon ordinary shares in a segregated account at Ashgrove Enterprises Banking AG on behalf of Meridian Trust. The sub-custodian must ensure that the deposited shares remain properly segregated from the sub-custodian's p

VII. German Law Considerations A. Depotgesetz (Securities Custody Act) Compliance The sub-custodian's holding of Halcyon ordinary shares in the Ashgrove Enterprises system constitutes collective safe custody (Girosammelverwahrung) under the German Securities Custody Act (Depotgesetz). Under the Girosammelverwahrung system, securities are held not as individually identified instruments but as co-ownership interests (M

1. Halcyon declares a dividend and instructs its paying agent to distribute the dividend to registered shareholders.

2. The paying agent deducts German withholding tax at the applicable rate (26.375% for non-treaty holders, or the reduced 15% rate for qualified US holders, if the appropriate documentation has been provided) and remits the net dividend amount to the sub-custodian in EUR.

3. The sub-custodian forwards the net dividend amount to Meridian Trust.

4. Meridian Trust converts the EUR dividend into USD and distributes the net dividend to ADS holders in accordance with the Deposit Agreement, after deducting any applicable depositary fees. The claim for treaty benefits and the procedures for reclaiming excess withholding tax are coordinated through Meridian Trust's status as a Qualified Intermediary ("QI") under the US-Germany income tax treaty and applicable IRS r

VIII. Coordination with Offering Timeline A. Key Milestones and Custodian Readiness The following table summarizes the key milestones in the offering timeline and the corresponding custodian-related actions that must be completed at or before each milestone: The foregoing timeline is subject to change based on the progress of the SEC review process, market conditions, and other factors. Any changes to the target date

1. Sub-Custodian Agreement Review: Meridian Trust to provide the draft sub-custodian agreement to Calderwood & Harkness for review. Target completion of C&H's review: by the end of March 2026. The review will focus on the consistency of the sub-custodian agreement with the Deposit Agreement, compliance with the Depotgesetz, and the adequacy of the safekeeping, liability, indemnification, and termination provisions.

2. Test Deposit Procedures: Meridian Trust and the sub-custodian to conduct one or more test transactions in the Ashgrove Enterp