PRIVILEGED AND CONFIDENTIAL ATTORNEY-CLIENT PRIVILEGED ATTORNEY WORK PRODUCT
This memorandum has been prepared by Calderwood & Harkness LLP as outside counsel to Halcyon Semiconductor AG in connection with the proposed initial public offering of American Depositary Shares on the Nasdaq Global Select Market. This memorandum is protected by the attorney-client privilege and the work product doctrine. Distribution of this memorandum outside of the Calderwood & Harkness deal team, Halcyon's in-house legal team, and Bähr Stein Rechtsanwälte PartGmbB is not authorized without the prior written approval of the undersigned.
MEMORANDUM
TO: Vivienne St. Claire, Partner; Robert Adeyemi, Partner
FROM: Claire Dempsey, Lead Associate; Audrey Zhou, Working Associate
DATE: February 14, 2026
RE: Halcyon Semiconductor AG — Material Contracts Due Diligence Review: Change-of-Control Provisions, Assignment Restrictions, and US Listing-Triggered Obligations
Matter No.: 1032-00003
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I. Executive Summary
This memorandum summarizes the findings of Calderwood & Harkness LLP ("C&H") from its review of the material contracts of Halcyon Semiconductor Aktiengesellschaft ("Halcyon," "HSAG," or the "Company") and its material subsidiaries in connection with the proposed initial public offering (the "Offering" or "IPO") of American Depositary Shares ("ADSs"), each representing one ordinary share, par value €1.00 per share, of the Company. The Offering is structured as a Level III American Depositary Receipt program to be listed on the Nasdaq Global Select Market under the proposed ticker symbol "HCYN." The Offering is expected to consist of (i) 30,000,000 newly issued ordinary shares by the Company and (ii) secondary sales of existing ordinary shares by Rheintal Industrieholding GmbH ("Rheintal") (8,500,000 shares) and Kestrel Capital Partners AG ("Kestrel") (4,300,000 shares), for a total of 42,800,000 ADSs offered. Based on a midpoint assumed offering price of $21.00 per ADS, the Offering is targeting gross proceeds of approximately $900,000,000, with estimated net proceeds to the Company of approximately $607,950,000 (after deducting underwriting discounts, commissions, and estimated offering expenses). Following the Offering, the Company expects to have approximately 245,000,000 ordinary shares outstanding, resulting in a post-offering free float of approximately 64.9% or higher, depending on the exercise of the underwriters' overallotment option.
The due diligence review was commenced on January 27, 2026, following execution of the engagement letter between C&H and the Company dated January 22, 2026. The review was conducted on the basis of documents produced by Halcyon and its German counsel, Bähr Stein Rechtsanwälte PartGmbB (Dr. Christoph Maurelban, Partner, and Johanna Weiß, Senior Associate), in response to the C&H comprehensive due diligence request list (the "Request List") delivered on January 24, 2026. Documents were made available through the Thackeray Solutions virtual data room established for purposes of the Offering (the "Data Room").
The review focused on the following key areas:
(i) change-of-control provisions that may be triggered by the Offering or the issuance of 30,000,000 new ordinary shares (which will result in post-offering shares outstanding of approximately 245,000,000 and a reduction in the percentage ownership of existing shareholders);
(ii) anti-assignment and consent-to-transfer provisions that could restrict the Company's ability to consummate the Offering or that could be implicated by the creation of the ADS program;
(iii) notification or disclosure obligations triggered by a US public listing, the commencement of trading on the Nasdaq Global Select Market, or the filing of a registration statement with the US Securities and Exchange Commission (the "SEC");
(iv) material adverse change clauses that reference capital structure changes, including the dilution of existing shareholders or the incurrence of new public reporting obligations; and
(v) termination rights linked to ownership changes, including provisions that could be implicated by post-offering changes in the Company's shareholder base.
Overall Conclusion. Based on our review, we conclude that the Offering structure — consisting of a primary issuance of new shares by the Company combined with secondary sales by Rheintal and Kestrel — is unlikely to trigger most change-of-control provisions contained in the Company's material contracts. The Company itself does not undergo a change of control as a result of the Offering: no single person or group will acquire more than 50% (or, in most cases, more than 25% or 30%) of the Company's voting shares as a result of the Offering, and the Company's subsidiaries remain 100% directly or indirectly owned by the Company. Existing management, including Dr. Friedrich Wendt as Chief Executive Officer (Vorsitzender des Vorstands) and Katarina Dalmqvist as Chief Financial Officer (Finanzvorstand), will remain in their respective positions.
However, several contracts require attention in connection with the Offering. In particular:
• The amended and restated revolving credit facility with Obermark Landesbank AG contains a "Listing Event" notification requirement that will be triggered by the commencement of trading on Nasdaq and, if not timely delivered, constitutes an event of default after expiration of a cure period.
• The Master Supply Agreement with Aldenburg Automotive GmbH requires notification of any material change in shareholder structure within 30 days.
• The SiC Substrate Supply Agreement with Crystalline Materials Corp. requires 30 days' advance written notice of any "Capital Event," which includes any public offering of equity securities.
• The Joint Development Agreement with Nexeon Power Technologies GmbH requires 60 days' advance notice of any "Significant Corporate Event," which includes any public offering of securities.
• Several contracts contain confidentiality provisions that will require careful coordination with SEC exhibit filing strategy, including potential confidential treatment requests under applicable SEC rules.
• The outbound technology license to Renwei Electronics Co., Ltd. raises export control and sanctions considerations that must be cross-referenced with the separate sanctions and export controls due diligence memorandum.
Specific contracts requiring notice, consent, or prospectus disclosure have been identified and categorized using the classification system described in Section II.B below. A complete summary of contracts requiring affirmative action prior to or in connection with the Offering ("Category A" contracts) is set forth in Section XII. Contracts requiring ongoing monitoring but no immediate action ("Category B" contracts) are summarized in Section XIII.
This memorandum should be read in conjunction with the forthcoming Due Diligence Summary and Risk Assessment Memorandum (expected circulation date: March 1, 2026), which will consolidate the findings from all workstreams of the due diligence review, including corporate governance, intellectual property, litigation and regulatory, tax, employee benefits, environmental, sanctions and export controls, and data privacy.
We note that C&H has coordinated, and continues to coordinate, with Bähr Stein on the analysis of German-law governed contracts, and with Prumvane Thornton LLP (Dr. Stefan Braun, Partner) representing underwriters' German counsel for independent verification of German-law issues as part of the due diligence defense protocol. Unless otherwise noted, the analysis in this memorandum addresses US law implications and prospectus disclosure considerations; German-law analysis has been deferred to Bähr Stein and is reflected herein only where Bähr Stein has provided its preliminary conclusions.
II. Methodology and Scope of Review
A. Documents Reviewed
C&H reviewed a total of approximately 147 contracts provided by Halcyon and its subsidiaries in the Data Room, supplemented by additional materials provided by Bähr Stein, including certified English translations of German-language contracts and explanatory memoranda prepared by Bähr Stein regarding certain German-law specific provisions. The contracts were organized and reviewed in the following categories:
• Supply Agreements (Inbound): Contracts under which the Company or its subsidiaries purchase raw materials, substrates, wafers, chemicals, gases, and manufacturing equipment, including long-term supply agreements for silicon carbide and gallium nitride substrates, epitaxy equipment, and specialty chemicals.
• Customer / Off-Take Agreements: Contracts under which the Company or its subsidiaries sell finished or semi-finished semiconductor products to customers, including master supply agreements, framework agreements, and long-term procurement agreements, with particular focus on the automotive sector given its significance to the Company's revenue base.
• Joint Development Agreements ("JDAs"): Collaborative technology development arrangements with strategic partners, academic institutions, and early-stage technology companies, involving co-development of intellectual property and joint research programs.
• Technology / Intellectual Property License Agreements: Both inbound licenses (under which the Company or its subsidiaries are licensees of third-party intellectual property) and outbound licenses (under which the Company or its subsidiaries license their own intellectual property to third parties), including patent licenses, technology licenses, and cross-license arrangements.
• Revolving Credit Facility and Other Financing Agreements: The Company's amended and restated revolving credit facility and related ancillary financing documents, including intercreditor arrangements and security documents.
• Real Property Leases: Leases for the Company's headquarters, fabrication facilities, office spaces, and engineering centers across multiple jurisdictions.
• Service and Consulting Agreements: Agreements with financial advisors, investor relations firms, IT service providers, logistics companies, and facilities management firms.
• Intercompany Agreements: Agreements among the Company and its material subsidiaries, including transfer pricing arrangements, management services agreements, IP cost-sharing agreements, and intercompany loan facilities.
• Insurance Program Agreements: Property and casualty insurance, product liability insurance, existing European directors' and officers' liability insurance, and the new US-listing D&O insurance program.
The following material subsidiaries of the Company were included within the scope of the review:
B. Analytical Framework
Each contract within the scope of the review was analyzed against the following six criteria:
1. Change-of-Control Definitions and Trigger Events. We examined each contract for provisions that define "change of control," "change in control," "change of ownership," or analogous terms, and assessed whether the Offering or any component thereof (primary issuance, secondary sales, Nasdaq listing, ADS program creation) constitutes a trigger event under the applicable definition. Where a change-of-control provision was identified, we analyzed the specific ownership threshold (e.g., 25%, 30%, 40%, 50%), the definition of "person" or "group," and whether the definition captures only direct share ownership or also indirect ownership through depositary receipt programs.
2. Assignment Restrictions (Direct and Indirect). We reviewed each contract for provisions that restrict the assignment, transfer, or delegation of rights or obligations, including provisions that define "assignment" broadly to encompass indirect transfers through changes in ownership of the contracting entity. We assessed whether the Offering or the creation of the ADS program could be characterized as a direct or indirect assignment under any contract.
3. Notification or Consent Requirements Triggered by Capital Structure Changes. We identified provisions requiring the Company or its subsidiaries to provide notice to, or obtain the consent of, a counterparty in connection with capital structure changes, new exchange listings, changes in shareholder composition, or the filing of public disclosure documents. We distinguished between provisions requiring mere notification (which can be satisfied by delivering a written notice) and provisions requiring affirmative consent (which require the counterparty's approval before the relevant action can be taken).
4. Most-Favored-Nation ("MFN") and Competitor-Restriction Clauses. We assessed whether any contracts contain MFN pricing provisions or competitor-restriction clauses that could be implicated by the Offering, including provisions that restrict dealings with or ownership by competitors.
5. Termination Rights. We identified all termination rights that could be exercised by a counterparty as a result of the Offering or related events, including termination for change of control, termination for material breach (to the extent a failure to provide required notice could constitute a breach), and termination for convenience with notice periods that could be strategically exercised.
6. Information / Confidentiality Provisions Affecting Prospectus Disclosure. We reviewed confidentiality provisions in each contract to assess whether the disclosure of the contract's existence, terms, or commercial details in the Company's registration statement on Form F-1 (or as an exhibit thereto) could constitute a breach of confidentiality obligations, and identified contracts where confidential treatment requests or counterparty consent may be required.
Based on this analysis, each contract was classified into one of three categories:
• Category A (Requires Action Prior to or in Connection with the Offering): Contracts containing provisions that require affirmative action — such as the delivery of a notice, the solicitation of a consent, or the coordination of prospectus disclosure strategy — prior to or in connection with the Offering. These contracts are analyzed in detail in this memorandum and summarized in Section XII.
• Category B (Requires Monitoring but No Affirmative Action Needed): Contracts containing provisions that are relevant to the Offering or post-IPO operations but that do not require affirmative action in connection with the Offering itself. These contracts are identified and briefly described, with monitoring recommendations, in Section XIII and throughout this memorandum.
• Category C (No Relevant Provisions Identified): Contracts in which no change-of-control, assignment, notification, consent, MFN, competitor-restriction, or confidentiality provisions relevant to the Offering were identified. These contracts are listed by name and type in Appendix A but are not individually discussed in the body of this memorandum.
C. Limitations
The following limitations apply to the scope of our review and the conclusions set forth in this memorandum:
• Our review was limited to English-language contracts and certified English translations of German-language contracts provided by Bähr Stein. We have relied on the accuracy and completeness of the translations provided by Bähr Stein and have not independently verified the translations against the original German-language documents.
• Certain contracts of Halcyon Shanghai are in Mandarin Chinese. These contracts were reviewed in English translation only, and the original-language review by qualified Mandarin-speaking counsel is pending. We have engaged Cheng & Associates (Shanghai) through our network to conduct an original-language review, which is expected to be completed by March 7, 2026. Our conclusions regarding Halcyon Shanghai contracts are therefore preliminary and subject to revision.
• German-law analysis has been deferred to Bähr Stein. This memorandum addresses US law implications and prospectus disclosure considerations. Where our analysis intersects with German-law questions (e.g., the interpretation of German-law governed change-of-control provisions), we have noted Bähr Stein's preliminary conclusions but have not independently rendered a German-law opinion.
• Contracts of immaterial subsidiaries or contracts with a de minimis value (defined for purposes of this review as contracts with aggregate consideration below €5,000,000) were excluded from the scope of the review, unless such contracts were specifically flagged by Halcyon management as potentially material or otherwise warranting review. Halcyon's General Counsel, Wilhelm Ostermann, confirmed by email on January 30, 2026 that no additional contracts below the de minimis threshold warranted inclusion in the review.
• Our review is based on the documents provided in the Data Room as of the date of this memorandum. We have not independently verified the completeness of the document production and note that management verification interviews remain to be conducted (see Section XV, Recommended Next Steps, Item 6).
• This memorandum does not address tax, environmental, data privacy, sanctions and export controls (except as noted in passing), employee benefits, or other non-contractual due diligence matters, which are the subject of separate memoranda.
III. Revolving Credit Facility
A. Summary of Facility
The Company's principal financing arrangement is an amended and restated revolving credit facility (the "Facility" or the "Credit Agreement"), the key terms of which are summarized below:
Parties: Halcyon Semiconductor AG, as borrower; a syndicate of lenders led by Obermark Landesbank AG ("Obermark"), as administrative agent and arranger; with Friedrichsen Bankhaus KGaA and Laurentian Credit AG as additional syndicate members.
Date: Originally entered into on May 15, 2021; amended and restated as of March 8, 2024 (the "A&R Date"). The amendment and restatement was undertaken in connection with the extension of the facility maturity and the increase in the committed amount from €350,000,000 to €500,000,000. Copies of both the original facility agreement and the amended and restated facility agreement have been reviewed.
Facility Amount: €500,000,000 revolving credit facility, with the ability to request commitment increases of up to €100,000,000, subject to lender approval.
Current Outstanding Balance: As of December 31, 2025 (unaudited), approximately €280,000,000 was drawn under the Facility. The Company has confirmed that no additional draws have been made between December 31, 2025 and the date of this memorandum.
Maturity Date: March 8, 2029 (five years from the A&R Date), with two one-year extension options at the discretion of the lenders.
Interest Rate: EURIBOR (three-month) plus a margin ranging from 125 to 200 basis points, depending on the Company's leverage ratio, with a current applicable margin of 135 basis points.
Security: Unsecured; the Facility is supported by negative pledge and pari passu covenants rather than asset-level security.
Governing Law: German law; exclusive jurisdiction of the courts of Frankfurt am Main for any disputes arising under or in connection with the Credit Agreement.
Planned Partial Repayment: The Company intends to use approximately $100,000,000 of the estimated primary net proceeds of the Offering to repay a portion of the outstanding balance under the Facility. Based on the EUR/USD exchange rate of 1.078 as of January 10, 2026, this repayment corresponds to approximately €92,764,000, which would reduce the outstanding balance to approximately €187,236,000.
B. Change-of-Control Provision (Category A)
Section 12.3 of the Credit Agreement contains a change-of-control clause, the relevant portions of which provide as follows:
"A 'Change of Control' shall be deemed to have occurred if: (i) any person or persons acting in concert (within the meaning of Section 2(5) of the German Securities Acquisition and Takeover Act (WpÜG)) acquire, directly or indirectly, more than 50% of the voting shares (Stimmrechte) of the Borrower; (ii) the Borrower ceases to own, directly or indirectly, 100% of the equity interests in any Material Subsidiary (as defined in Schedule 1); or (iii) the Vorstand of the Borrower ceases to include Dr. Friedrich Wendt as Vorsitzender des Vorstands (CEO) or Katarina Dalmqvist as Finanzvorstand (CFO) for a continuous period exceeding 90 calendar days, unless the administrative agent has provided prior written consent to such change in composition, such consent not to be unreasonably withheld."
Under Section 12.4, the occurrence of a Change of Control constitutes an event of default, subject to a 30-day cure period (applicable only to clause (iii) regarding management composition).
Analysis. We have assessed each limb of the Change of Control definition against the proposed Offering structure:
Limb (i) — 50% Voting Share Threshold. The Offering involves (a) the issuance of 30,000,000 new ordinary shares by the Company and (b) the sale of existing shares by Rheintal (8,500,000 shares, reducing Rheintal's ownership from approximately 22.3% to approximately 16.1% of post-offering shares outstanding) and Kestrel (4,300,000 shares, reducing Kestrel's ownership from approximately 9.7% to approximately 6.8% of post-offering shares outstanding). No single person or group of persons acting in concert will acquire more than 50% of the voting shares of the Company as a result of the Offering. The ADSs will be offered to a dispersed group of institutional and retail investors, and the depositary (to be appointed) will hold the underlying shares on behalf of ADS holders. Post-offering free float is expected to increase to approximately 64.9% or higher (approximately 66.5% if the underwriters' overallotment option is exercised in full). No single institutional investor is expected to hold more than 5% of the outstanding shares following the Offering, based on preliminary indications of interest. Conclusion: Limb (i) is not triggered.
Limb (ii) — Subsidiary Ownership. The Offering does not involve any change in the Company's direct or indirect ownership of its Material Subsidiaries. Halcyon Power Solutions GmbH and Halcyon Semiconductor USA Inc. (the two entities defined as "Material Subsidiaries" under Schedule 1 to the Credit Agreement) will remain 100% directly or indirectly owned by the Company. Conclusion: Limb (ii) is not triggered.
Limb (iii) — Management Composition. Dr. Friedrich Wendt and Ms. Katarina Dalmqvist will remain in their respective positions as CEO and CFO following the Offering. Neither individual has indicated any intention to resign or retire. Conclusion: Limb (iii) is not triggered.
Overall Conclusion: The Offering does not trigger a Change of Control under Section 12.3 of the Credit Agreement.
However, we note the following critical provision. Section 12.5 of the Credit Agreement contains a separate "Listing Event" notification requirement:
"The Borrower shall provide written notice to the Administrative Agent within fifteen (15) Business Days of the occurrence of any 'Listing Event.' A 'Listing Event' means the commencement of trading of any securities representing, convertible into, or exchangeable for the shares of the Borrower on a Regulated Market or stock exchange other than the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse), including, without limitation, the admission to trading of depositary receipts or similar instruments."
The listing of ADSs on the Nasdaq Global Select Market clearly constitutes a "Listing Event" within the meaning of Section 12.5. The provision applies to "securities representing ... the shares of the Borrower" traded on a "stock exchange other than the Frankfurt Stock Exchange," which precisely describes ADSs traded on Nasdaq. Failure to provide the required notice within fifteen business days constitutes a breach of the Credit Agreement and, after a ten-business-day cure period (per Section 19.1(c), which provides a cure period for informational covenant breaches), constitutes an event of default.
Action Item: C&H and Bähr Stein must prepare and deliver written notice to Obermark Landesbank AG, in its capacity as administrative agent, of the Nasdaq listing. The notice should be delivered within fifteen business days of the commencement of trading on Nasdaq. Based on the current projected offering timeline (pricing: July 1, 2026; closing: July 6, 2026; commencement of trading on Nasdaq: on or about July 2, 2026), the notice must be delivered no later than July 23, 2026 (assuming all intervening days are business days under the Credit Agreement, which defines "Business Day" as any day on which banks are open for business in Frankfurt am Main and London). We recommend that the notice be prepared in advance and delivered promptly upon commencement of trading, rather than waiting until the end of the fifteen-business-day window, in order to maintain good relations with the lending syndicate and to avoid any ambiguity regarding the notice deadline.
C. Financial Covenants and Reporting
The Credit Agreement contains the following financial covenants, tested semi-annually:
• Leverage Ratio: Net Debt to EBITDA must not exceed 3.0x (Section 14.1(a)).
• Interest Coverage Ratio: EBITDA to interest expense must not be less than 4.0x (Section 14.1(b)).
Based on the Company's unaudited financial data as of fiscal year 2025:
The Company is in substantial compliance with both financial covenants, with significant headroom. Following the planned partial repayment of approximately €92,764,000 from the Offering net proceeds, the outstanding balance under the Facility will be reduced to approximately €187,236,000. Assuming no material change in cash and cash equivalents, Net Debt will decrease correspondingly, and the leverage ratio will remain well within the 3.0x covenant threshold. The interest coverage ratio will also remain compliant, as the reduction in outstanding principal will result in lower interest expense on a go-forward basis.
The Credit Agreement also contains reporting covenants requiring the delivery of annual audited financial statements within 150 days of fiscal year-end and semi-annual unaudited financial statements within 90 days of the end of each half-year period (Section 13.1). Following the Offering, the Company will be subject to SEC reporting obligations, including the filing of annual reports on Form 20-F (due within four months of fiscal year-end, per SEC rules applicable to foreign private issuers) and current reports on Form 6-K. The addition of SEC reporting obligations does not conflict with the existing reporting covenants under the Credit Agreement. Indeed, the public availability of SEC filings will provide the lending syndicate with enhanced transparency into the Company's financial condition.
Disclosure Note: The revolving credit facility, including its principal terms, the current outstanding balance, and the planned partial repayment of approximately $100,000,000 from the Offering net proceeds, should be disclosed in the "Use of Proceeds" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of the Form F-1. The disclosure should also note the remaining availability under the Facility and the financial covenant compliance position.
D. Negative Covenants Relevant to the Offering
We have reviewed the negative covenants contained in Article 15 of the Credit Agreement for any provisions that could restrict or otherwise affect the Company's ability to consummate the Offering:
• Additional Indebtedness (Section 15.2): The Credit Agreement restricts the incurrence of additional indebtedness by the Company or any Material Subsidiary in excess of €100,000,000 in the aggregate without the prior written consent of the Required Lenders (defined as lenders holding at least 66⅔% of outstanding commitments). This restriction applies to "Indebtedness," which is defined (in Section 1.1) to include borrowed money obligations, guarantee obligations, and certain capital lease obligations, but does not include equity securities or proceeds from the issuance thereof. The Offering involves the issuance of equity securities (ordinary shares represented by ADSs) and does not constitute the incurrence of indebtedness. Conclusion: Not triggered.
• Subsidiary Transactions (Section 15.7): The Credit Agreement restricts certain transactions by Material Subsidiaries, including the issuance of equity interests to third parties, the creation of liens on subsidiary assets, and the entry into certain related-party transactions without prior notice to the administrative agent. The Offering does not involve any subsidiary-level transactions. Conclusion: Not triggered.
• No Anti-Dilution or Equity Issuance Consent Requirements: The Credit Agreement does not contain any provision requiring the consent of the lending syndicate for the issuance of new equity securities by the Company, nor does it contain any anti-dilution protections for the benefit of the lenders. The Offering may proceed without lender consent with respect to the equity issuance.
IV. Customer Contracts — Automotive Sector
The automotive sector represents a significant portion of the Company's revenue, accounting for approximately 42% of consolidated net revenues in FY2025. The Company's automotive customer contracts typically involve long-term supply arrangements for silicon carbide ("SiC") and gallium nitride ("GaN") power semiconductor devices used in electric vehicle drivetrain, charging, and power management applications. Given the strategic importance of these contracts, we have conducted a detailed review of the three most material automotive sector customer contracts.
A. Master Supply Agreement with Aldenburg Automotive GmbH
Parties: Halcyon Semiconductor AG (as supplier) and Aldenburg Automotive GmbH ("Aldenburg") (as customer).
Date: September 1, 2022; initial term through December 31, 2028, with automatic renewal for successive two-year periods unless either party provides written notice of non-renewal at least 12 months prior to the expiration of the then-current term.
Description: Long-term master supply agreement for the supply of SiC power modules for electric vehicle drivetrain applications. The agreement establishes the framework for annual purchase orders, with estimated annual volume of €180,000,000 to €220,000,000, making Aldenburg the Company's single largest customer by revenue. Product specifications, delivery schedules, and pricing are set forth in individual purchase orders issued under the master agreement and in technical annexes incorporated by reference.
Governing Law: German law; jurisdiction of the courts of Munich.
Change-of-Control Provision (Category A). Article 18.1 of the Master Supply Agreement provides that either party may terminate the agreement upon 180 days' written notice if "a Competitor" acquires "direct or indirect Control" of the other party. The relevant definitions are as follows:
• "Competitor" is defined in Schedule 4 to the agreement, which contains a list of specifically named semiconductor companies. We have reviewed Schedule 4 and confirmed that it includes approximately twelve named entities, consisting primarily of major international semiconductor manufacturers with power semiconductor product lines. The list does not include any financial investors, private equity firms, or depositary banks.
• "Control" is defined as "the ownership, directly or indirectly, of more than 30% of the voting shares (Stimmrechte) of a party, or the ability to direct or cause the direction of the management and policies of a party, whether through the ownership of securities, by contract, or otherwise."
Analysis. The Offering does not involve the acquisition of the Company by any entity listed as a "Competitor" in Schedule 4. The IPO will result in dispersed public ownership of the Company's ADSs by a broad base of institutional and retail investors, none of which is expected to individually hold more than 5% of the Company's post-offering outstanding shares. Accordingly, the change-of-control termination right under Article 18.1 is not triggered by the Offering itself.
However, we note that the definition of "indirect Control" is broad enough to encompass scenarios in which a competitor or a fund affiliated with a competitor accumulates a position of more than 30% of the Company's voting shares through open market purchases of ADSs following the Offering. While this risk is inherent in any public listing and is not specific to the Offering transaction, we recommend that this possibility be addressed in the prospectus risk factors and that the Company implement a share ownership monitoring program post-IPO to track significant accumulations by persons or entities that could trigger this provision.
Notification Provision (Category A). Article 18.3 of the Master Supply Agreement provides:
"Each party shall notify the other party in writing of any material change in its shareholder structure (wesentliche Änderung der Gesellschafterstruktur) within thirty (30) days of the occurrence of such change."
The issuance of 30,000,000 new ordinary shares by the Company and the sale of 12,800,000 existing shares by Rheintal and Kestrel clearly constitute a "material change in shareholder structure." The post-offering ownership structure will differ materially from the pre-offering ownership structure: the free float will increase from approximately 36% to approximately 64.9%, Rheintal's ownership will decrease from approximately 22.3% to approximately 16.1%, and Kestrel's ownership will decrease from approximately 9.7% to approximately 6.8%. Written notice to Aldenburg is required within 30 days of the shareholder structure change (i.e., within 30 days of the closing of the Offering).
Confidentiality Clause (Category B). Article 22 of the Master Supply Agreement contains a broad confidentiality provision that restricts each party from disclosing to any third party any "Confidential Information" of the other party, defined to include "pricing terms, volume commitments, technical specifications, delivery schedules, and other commercially sensitive terms." The provision includes customary exceptions for disclosures required by law, regulation, or court order, but does not contain a specific carve-out for disclosures made in connection with securities offerings or public company reporting obligations.
The Company may wish to disclose the existence of the Aldenburg Master Supply Agreement in the Form F-1 as a "material contract" in the "Business" section and, potentially, to file the agreement as an exhibit to the registration statement under Regulation S-K Item 601(b)(10). In either case, careful attention must be paid to the confidentiality restrictions. If the contract is filed as an exhibit, a confidential treatment request should be prepared to redact commercially sensitive terms (particularly pricing, volume commitments, and technical specifications) from the publicly filed version. Alternatively, the Company may seek consent from Aldenburg for the prospectus disclosure, which would provide the most comprehensive protection against a claim of breach. We recommend pursuing both strategies in parallel.
Action Items:
(1) Prepare and deliver a notification letter to Aldenburg regarding the material change in shareholder structure, to be delivered within 30 days of the closing of the Offering.
(2) Seek consent from Aldenburg for prospectus disclosure of the agreement, or, in the alternative, confirm the adequacy of a redaction strategy under SEC confidential treatment request procedures (Rule 406 under the Securities Act or Rule 24b-2 under the Exchange Act, as applicable, and the SEC's 2019 guidance on confidential treatment requests by foreign private issuers).
B. Supply Framework Agreement with Veridian Mobility Group AG
Parties: Halcyon Semiconductor AG (as supplier) and Veridian Mobility Group AG ("Veridian") (as customer). Veridian is a Tier 1 automotive supplier headquartered in Stuttgart, Germany.
Date: January 15, 2023; initial term of five years, expiring January 14, 2028, with automatic renewal provisions.
Description: Supply of GaN-based power conversion components for electric vehicle charging infrastructure applications. The agreement covers multiple product families, with estimated annual revenues of €90,000,000 to €110,000,000. The Company's GaN product line has experienced significant growth, and the Veridian relationship is central to the Company's strategy in the EV charging infrastructure market.
Governing Law: German law; jurisdiction of the courts of Stuttgart.
Change-of-Control (Category C). We have reviewed the Supply Framework Agreement in its entirety and have not identified any change-of-control provision. The agreement does not address changes in ownership of either party and does not contain any termination right linked to ownership changes or corporate transactions.
Assignment Restriction (Category B). Section 14.2 of the agreement provides that neither party may assign its rights or obligations under the agreement without the prior written consent of the other party, which consent shall not be unreasonably withheld. This is a standard anti-assignment provision. The Offering does not involve the assignment of any of the Company's rights or obligations under the agreement, as the Company remains the contracting party and no transfer of contract rights occurs as a result of the issuance of new shares or the sale of existing shares by Rheintal and Kestrel. No action is required for the Offering.
Most-Favored-Nation Pricing (Category B). Section 7.4 of the agreement contains an MFN pricing clause:
"The Supplier shall ensure that the pricing offered to the Customer under this Agreement is no less favorable than the pricing offered by the Supplier to any similarly situated customer for comparable products in comparable quantities and under comparable delivery terms."
This provision does not have a direct impact on the Offering or the Nasdaq listing. However, the Company should be aware that following the Offering, its pricing practices may be subject to greater scrutiny from customers who review the Company's public filings. We recommend that the Company's commercial team confirm compliance with the MFN clause and document the basis for any pricing differences among similarly situated customers, particularly in anticipation of the enhanced disclosure obligations that will apply post-IPO.
Disclosure Note. Given the magnitude of estimated annual revenues (€90,000,000 to €110,000,000), this contract may qualify as material for purposes of prospectus disclosure in the "Business" section of the Form F-1. We recommend that the Company and C&H consider whether the agreement should be specifically described in the prospectus and, if so, whether the disclosure can be made in a manner consistent with the confidentiality provisions of the agreement.
C. Long-Term Procurement Agreement with Hartfield Electric Systems Ltd.
Parties: Halcyon Semiconductor USA Inc. (as supplier) and Hartfield Electric Systems Ltd. ("Hartfield") (as customer). Hartfield is a UK-headquartered manufacturer of industrial electric motor drives and power management systems.
Date: July 12, 2024; term through July 11, 2030 (six-year initial term).
Description: Supply of SiC MOSFET devices for industrial motor drive applications. The agreement was negotiated and executed by Halcyon USA, reflecting the growth of the Company's US subsidiary as a direct sales channel for the European and North American industrial market. Estimated annual volume of $65,000,000 to $85,000,000.
Governing Law: English law; disputes to be resolved by arbitration administered by the London Court of International Arbitration (LCIA) under the LCIA Rules.
Change-of-Control (Category B). Clause 19.1 of the Procurement Agreement provides Hartfield with a right of termination upon 120 days' written notice if "the ultimate parent company" of the supplier (i.e., Halcyon Semiconductor AG) undergoes a "Change of Control," defined as follows:
"'Change of Control' means the acquisition by a single entity, or by two or more entities acting in concert, of more than 50% of the voting rights attaching to issued shares of the relevant party, or the ability (whether by ownership of shares, proxy, contract, agency or otherwise) to appoint or remove all or the majority of the directors of the relevant party."
Analysis. The Offering does not result in any single entity or group of entities acting in concert acquiring more than 50% of the voting rights of the Company. As discussed above, the post-offering free float will be approximately 64.9%, consisting of dispersed public shareholders. Rheintal will remain the largest single shareholder at approximately 16.1%, well below the 50% threshold. The composition of the Aufsichtsrat (Supervisory Board) and Vorstand (Management Board) will not change as a result of the Offering. Conclusion: Not triggered by the Offering.
We classify this provision as Category B (monitoring) because, while the 50% threshold provides substantial headroom, any future transaction involving a concentrated acquisition of the Company's shares (e.g., a going-private transaction, a tender offer, or a strategic acquisition) would need to be evaluated against this provision.
Assignment (Category C). The Procurement Agreement contains a standard non-assignment clause at Clause 22. The Offering does not involve any assignment of Halcyon USA's rights or obligations. No action required.
Disclosure Note. Given the revenue magnitude ($65,000,000 to $85,000,000 annually) and the six-year term, this contract may be material for purposes of the prospectus business description. The Company should consider whether specific disclosure is warranted in the "Business" section, subject to confidentiality considerations.
V. Supply Agreements — Raw Materials and Equipment
The Company's fabrication operations depend on the reliable supply of high-quality raw materials, particularly silicon carbide substrates and gallium nitride wafers, as well as specialized semiconductor manufacturing equipment. The following supply agreements have been identified as material to the Company's operations and are analyzed below.
A. Silicon Carbide Substrate Supply Agreement with Crystalline Materials Corp.
Parties: Halcyon Power Solutions GmbH ("HPS GmbH") (as purchaser) and Crystalline Materials Corp. ("Crystalline Materials" or "CMC") (as supplier). Crystalline Materials is a US-based manufacturer of silicon carbide substrates, headquartered in Durham, North Carolina.
Date: April 3, 2023; initial term of seven years (expiring April 2, 2030), with an option exercisable by HPS GmbH to extend the term for two additional three-year periods.
Description: Exclusive supply agreement for 150mm and 200mm SiC substrates for use in HPS GmbH's Fab 2 (operational) and Fab 3 (under construction) fabrication facilities in Dresden. The agreement establishes minimum annual purchase commitments of €120,000,000, with total contract value estimated at approximately €840,000,000 over the initial seven-year term. The agreement includes detailed technical specifications for substrate quality, crystal defect density, surface finish, and thickness tolerances.
Governing Law: New York law; disputes to be resolved by arbitration administered by the International Centre for Dispute Resolution (ICDR) of the American Arbitration Association in New York.
Change-of-Control (Category A). Section 11.2(a) of the agreement grants Crystalline Materials a right to terminate upon 90 days' written notice in the event that:
"(i) Halcyon AG or the Purchaser [HPS GmbH] undergoes a 'Change of Control,' which shall mean the acquisition by any single person, or any group of persons acting in concert (as such term is used in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended), of more than forty percent (40%) of the outstanding voting securities of Halcyon AG or the Purchaser; or (ii) Halcyon AG ceases to directly or indirectly own one hundred percent (100%) of the equity interests of the Purchaser [HPS GmbH]."
Analysis. We have assessed the Offering against both limbs of this change-of-control definition:
Limb (i) — 40% Voting Securities Threshold. Post-offering, Rheintal will hold approximately 16.1% of the Company's outstanding shares, and no other single holder is expected to exceed this level. Free float will be approximately 64.9%, consisting of dispersed public shareholders. No "group" (within the meaning of Section 13(d)(3) of the Exchange Act) will hold more than 40% of the Company's outstanding voting securities as a result of the Offering. We note that the definition's reference to Section 13(d)(3) of the Exchange Act provides a well-established framework for determining the existence of a "group," which requires an agreement among persons to act together for the purpose of acquiring, holding, or disposing of securities. The dispersed nature of the post-offering shareholder base does not give rise to any such group. Conclusion: Not triggered.
Limb (ii) — Subsidiary Ownership. HPS GmbH will remain 100% directly owned by the Company following the Offering. Conclusion: Not triggered.
However, Section 11.2(b) of the agreement contains a separate notification requirement that is triggered independently of the change-of-control provision:
"The Purchaser [HPS GmbH] shall provide the Supplier [Crystalline Materials] with not less than thirty (30) days' advance written notice of any 'Capital Event,' which shall include, without limitation, (A) any public offering of equity securities by Halcyon AG or any of its subsidiaries in any jurisdiction, (B) any merger, consolidation, or business combination involving Halcyon AG, or (C) any sale of substantially all of the assets of Halcyon AG or the Purchaser."
The Company's registration of ordinary shares (in the form of ADSs) on Form F-1 and the subsequent public offering of such ADSs on the Nasdaq Global Select Market clearly constitutes a "public offering of equity securities by Halcyon AG" within the meaning of this provision. The 30-day advance notice requirement means that notice must be delivered to Crystalline Materials at least 30 days prior to the completion of the Offering. Based on the current projected timeline (pricing: July 1, 2026; closing: July 6, 2026), the notice must be delivered no later than June 1, 2026 (or earlier, depending on whether "advance" is measured from the pricing date, the closing date, or the commencement of trading). We recommend delivering the notice at least 30 days prior to the earliest of these dates to eliminate any ambiguity. As a practical matter, we suggest coordinating the timing of this notice with the public filing of the Form F-1, which is currently targeted for June 8, 2026. If the notice must be delivered before the public filing, it should be drafted in a manner that does not disclose material nonpublic information beyond that which is necessary to satisfy the contractual requirement.
Exclusivity (Category B). Section 5.1 of the agreement grants Crystalline Materials exclusivity as the supplier of SiC substrates to Fab 2 and Fab 3:
"During the Term, the Purchaser [HPS GmbH] shall purchase its entire requirements of 150mm and 200mm SiC substrates for the Fab 2 and Fab 3 fabrication facilities exclusively from the Supplier [Crystalline Materials]. In the event that the Purchaser expands production capacity at any facility beyond the volumes contemplated in Exhibit A [the annual volume schedule], or establishes a new fabrication facility for which SiC substrates are required, the Purchaser shall negotiate in good faith with the Supplier regarding the supply of SiC substrates for such expanded or new capacity before engaging any alternative supplier."
This exclusivity provision is of particular relevance to the Offering because the Company has disclosed that approximately $280,000,000 of the estimated primary net proceeds will be allocated to the Fab 3 expansion, including the purchase of additional manufacturing equipment and the ramp-up of production capacity. While no consent from Crystalline Materials is required for the Offering itself, the exclusivity obligation means that SiC substrates for the expanded Fab 3 capacity must be sourced from Crystalline Materials, or, if Crystalline Materials cannot meet the expanded requirements, the Company must negotiate in good faith before engaging alternative suppliers.
This supply concentration creates a material risk that should be disclosed in the prospectus. We recommend that the prospectus include:
• A risk factor addressing supply concentration risk, specifically noting the Company's dependence on Crystalline Materials as its exclusive supplier of SiC substrates for Fab 2 and Fab 3.
• A description of the exclusivity arrangement in the "Business" section, in a level of detail consistent with the confidentiality provisions of the agreement (see below).
• A discussion in the "Use of Proceeds" section noting that the Fab 3 expansion will be subject to the terms of the Crystalline Materials supply agreement.
Action Items:
(1) Deliver advance written notice of the Capital Event to Crystalline Materials at least 30 days prior to the completion of the Offering. Coordinate timing with the projected offering timeline and the public filing of the Form F-1.
(2) Ensure that the prospectus appropriately discloses the exclusivity arrangement and supply concentration risk, subject to the confidentiality provisions of the agreement and any applicable confidential treatment request.
B. Epitaxy Equipment Supply Agreement with Precision Deposition Systems AG
Parties: Halcyon Power Solutions GmbH (as purchaser) and Precision Deposition Systems AG ("PDS") (as supplier). PDS is a Swiss-headquartered manufacturer of metal-organic chemical vapor deposition (MOCVD) and chemical vapor deposition (CVD) epitaxy tools used in semiconductor fabrication.
Date: November 20, 2024; delivery schedule extending through calendar year 2027, with specific milestone dates for equipment delivery, installation, and qualification.
Description: Purchase of MOCVD and CVD epitaxy tools for the Company's Fab 3 facility. The agreement covers the supply, installation, and commissioning of multiple epitaxy reactors, with a total contract value of approximately €95,000,000. Payment is structured in milestone installments linked to equipment delivery, factory acceptance testing, and on-site qualification.
Governing Law: Swiss law; jurisdiction of the courts of Glenrock Assurance.
Change-of-Control (Category C). We have reviewed the equipment supply agreement and have not identified any change-of-control provision or any provision that would be triggered by changes in the ownership structure of HPS GmbH or the Company.
Assignment (Category C). The agreement contains a standard non-assignment clause at Section 16. The Offering does not involve any assignment of HPS GmbH's rights or obligations under the agreement. No action required.
Payment Terms (Category B). Milestone payments under the agreement are linked to equipment delivery and qualification events. The $280,000,000 Fab 3 expansion budget included in the planned use of proceeds for the Offering includes payments to be made under this agreement. No consent or notification provisions are triggered by the Nasdaq listing or the Offering, but the Company should ensure that milestone payments are adequately funded from the Offering proceeds and that the timing of equipment deliveries is consistent with the Fab 3 construction schedule disclosed in the prospectus.
C. Gallium Nitride Wafer Supply Agreement with Luminos Substrate Technologies Inc.
Parties: Halcyon Semiconductor AG (as purchaser) and Luminos Substrate Technologies Inc. ("Luminos") (as supplier). Luminos is a US subsidiary of a Japanese-headquartered manufacturer of GaN-on-silicon wafers, with fabrication facilities in Japan and the United States.
Date: February 8, 2024; initial term of five years, expiring February 7, 2029.
Description: Supply of GaN-on-silicon wafers for the Company's next-generation power device research and development programs and initial low-volume production. Estimated annual value of €30,000,000 to €50,000,000, depending on R&D progress and production ramp schedules.
Governing Law: New York law; jurisdiction of the courts of the State of New York, New York County.
Change-of-Control (Category C). We have reviewed the agreement and have not identified any specific change-of-control provision that would be triggered by the Offering or changes in the Company's ownership structure.
Confidentiality (Category B). Section 16 of the agreement contains a confidentiality provision that warrants attention in connection with the SEC exhibit filing strategy:
"Neither party shall disclose any Confidential Information of the other party in any public filing, press release, or other public communication without providing the other party with not less than thirty (30) days' prior written notice and a reasonable opportunity to review and comment on the proposed disclosure."
"Confidential Information" is defined broadly to include "technical specifications, pricing terms, volume commitments, delivery schedules, and any other information designated as confidential by the disclosing party." If the agreement is filed as an exhibit to the Form F-1, the Company will need to provide Luminos with at least 30 days' prior written notice and an opportunity to review and comment on the proposed disclosure. This timeline must be coordinated with the SEC filing schedule.
Action Item: If the agreement is determined to be material for purposes of exhibit filing under Regulation S-K Item 601(b)(10), provide 30 days' advance written notice to Luminos and consider a confidential treatment request for commercially sensitive terms (pricing, volume, and technical specifications). The materiality determination should be made in consultation with the Company's management and auditors, considering the estimated annual value relative to the Company's consolidated revenues.
VI. Joint Development Agreements
A. Joint Development Agreement with Nexeon Power Technologies GmbH
Parties: Halcyon Semiconductor AG and Nexeon Power Technologies GmbH ("Nexeon"). Nexeon is a German power electronics startup specializing in advanced packaging technology for wide-bandgap power semiconductor devices, headquartered in Aachen, Germany.
Date: June 5, 2023; initial term of four years, expiring June 4, 2027, with an option to extend for two additional two-year periods by mutual agreement.
Description: Co-development of next-generation wide-bandgap power semiconductor packaging technology, including novel die-attach, substrate, and interconnect solutions designed to improve thermal performance and power density of SiC and GaN power modules. The agreement provides for joint intellectual property ownership of developed technology, with each party contributing specified resources: Halcyon's contribution consists of approximately €25,000,000 in R&D resources (personnel, equipment, materials, and facilities) over the four-year term, while Nexeon contributes its proprietary packaging design expertise and certain pre-existing IP. The joint development program is linked to the approximately $140,000,000 of the Offering's estimated net proceeds allocated to research and development.
Governing Law: German law; arbitration under the rules of the Deutsche Institution für Schiedsgerichtsbarkeit (DIS) in Cologne.
Change-of-Control (Category A). Section 9.2 of the JDA contains a change-of-control provision that warrants careful analysis:
"Either party (the 'Non-Affected Party') shall have (i) a right of first refusal with respect to any proposed transfer of shares of the other party (the 'Affected Party') that would result in a Change of Control, and (ii) the right to terminate this Agreement upon ninety (90) days' written notice, if the Affected Party undergoes a Change of Control.
A 'Change of Control' shall mean: (i) the acquisition by any third party of more than twenty-five percent (25%) of the voting shares of a party, where such third party did not previously hold any shares of such party; or (ii) a merger, consolidation, or sale of substantially all assets of a party."
Analysis. This definition requires particularly careful parsing in the context of the Offering:
Limb (i) — 25% Acquisition by New Third Party. The Offering involves the issuance of new ADSs to a dispersed group of institutional and retail investors. No single "third party" is expected to acquire more than 25% of the Company's voting shares as a result of the Offering. While the aggregate of all new ADS holders will collectively hold a substantial percentage of the Company's post-offering shares outstanding, these holders do not collectively constitute a single "third party" for purposes of the change-of-control definition. The definition refers to "the acquisition by any third party" (singular) of more than 25%, not to the aggregate acquisition by all new shareholders.
We have consulted with Bähr Stein on the interpretation of this clause under German law, and Bähr Stein concurs that the IPO does not trigger this clause. Specifically, Bähr Stein has confirmed that the dispersed issuance of shares to multiple unrelated investors through a public offering does not constitute the "acquisition by any third party" of more than 25% of the voting shares, as each individual investor acquires only a small fraction of the total shares outstanding. Bähr Stein has further noted that the right of first refusal provision (Section 9.2(i)) is structured to apply to a "proposed transfer of shares" — a formulation that is more naturally read as applying to a private transfer or negotiated sale of a controlling block rather than to a public offering of securities.
However, we note the following residual risk: post-IPO, if any single institutional investor were to accumulate more than 25% of the Company's voting shares through open-market purchases, this could theoretically trigger the change-of-control provision under limb (i), as such investor would be a "third party" that "did not previously hold any shares" of the Company. This risk is inherent in any public listing but should be monitored through the Company's post-IPO ownership surveillance.
Limb (ii) — Merger, Consolidation, or Asset Sale. The Offering does not involve any merger, consolidation, or sale of assets. Not triggered.
Conclusion: The IPO does not trigger the change-of-control provision in Section 9.2 of the JDA. Bähr Stein concurs.