CONFIDENTIAL TREATMENT REQUESTED
Calderwood & Harkness LLP One Liberty Plaza, 42nd Floor New York, NY 10006 C&H Matter No.: 1032-00003
DEPOSIT AGREEMENT
among
HALCYON SEMICONDUCTOR AKTIENGESELLSCHAFT,
MERIDIAN TRUST COMPANY, NATIONAL ASSOCIATION, as Depositary,
and
ALL HOLDERS AND BENEFICIAL OWNERS OF AMERICAN DEPOSITARY SHARES ISSUED HEREUNDER
Dated as of [●], 2026
DRAFT — Subject to Review and Comment
Prepared by: Calderwood & Harkness LLP One Liberty Plaza, 42nd Floor New York, NY 10006
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RECITALS
WHEREAS, Halcyon Semiconductor Aktiengesellschaft, an Aktiengesellschaft organized under the laws of the Federal Republic of Germany, registered in the Commercial Register (Handelsregister) of the Amtsgericht München under HRB 217458, with its registered office at Maximilianstraße 72, 80539 Munich, Germany (the "Company"), desires to provide for the deposit of its ordinary shares (Stammaktien), no par value (the "Ordinary Shares" or "Shares"), from time to time with a depositary and for the issuance of American Depositary Shares ("ADSs") representing such deposited Ordinary Shares;
WHEREAS, Meridian Trust Company, National Association, a national banking association organized under the laws of the United States, with its principal office at 101 Barclay Street, New York, NY 10286 (the "Depositary"), is willing to act as depositary for such facility upon the terms and conditions set forth in this Deposit Agreement (as defined below);
WHEREAS, the Company desires to establish a sponsored American Depositary Receipt facility (Level III ADR Program) for the purpose of permitting the issuance of ADSs, each representing two (2) Ordinary Shares of the Company, or the right to receive such Ordinary Shares, pursuant to the terms and conditions of this Agreement;
WHEREAS, the ADSs are being registered under the Securities Act of 1933, as amended (the "Securities Act"), pursuant to a Registration Statement on Form F-6 (Registration No. 333-[●]) filed with the Securities and Exchange Commission of the United States (the "SEC" or the "Commission"), and the underlying Ordinary Shares and the ADSs representing them are also being registered under a Registration Statement on Form F-1 (Registration No. 333-[●]) filed with the SEC in connection with the initial public offering of ADSs by the Company and certain selling shareholders;
WHEREAS, the ADSs are expected to be listed on the Nasdaq Global Select Market under the ticker symbol "HCYN," and the Ordinary Shares are listed on the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse) under the ticker "HCY" in the Prime Standard segment;
WHEREAS, as of the date hereof, the Company has 215,000,000 Ordinary Shares outstanding (prior to the issuance of 30,000,000 new Ordinary Shares in connection with the offering), and following the completion of the offering, the Company will have 245,000,000 Ordinary Shares outstanding; and
WHEREAS, this Agreement is governed by and construed in accordance with the laws of the State of Delaware, as more fully set forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1 — DEFINITIONS
Section 1.1 — Defined Terms
As used in this Agreement, the following terms shall have the meanings set forth below:
"ADS" means an American Depositary Share, each representing the right to receive two (2) Ordinary Shares deposited with the Custodian pursuant to this Agreement. References to ADSs shall include ADSs evidenced by ADRs in certificated form and ADSs held in uncertificated (book-entry) form through the facilities of DTC.
"ADS Record Date" means the record date fixed by the Depositary, in consultation with the Company to the extent practicable, for the determination of Holders entitled to receive distributions, notices, or to give voting instructions, or for any other purpose under this Agreement.
"ADR" or "American Depositary Receipt" means the certificate evidencing ADSs issued by the Depositary, or such certificate together with the rights evidenced thereby, substantially in the form set forth in Exhibit A hereto, as the same may be amended from time to time in accordance with the provisions of this Agreement.
"Beneficial Owner" means any person or entity having a beneficial ownership interest in ADSs, whether or not such ADSs are held by a Holder or registered in the name of a nominee, broker-dealer, custodian bank, or other intermediary. For the avoidance of doubt, the Depositary may, for purposes of this Agreement, treat a Holder as the Beneficial Owner of the ADSs registered in such Holder's name unless the Depositary has received information to the contrary.
"Ashgrove Enterprises" means Ashgrove Enterprises Banking AG, the central securities depository (Zentralverwahrer) organized under the laws of the Federal Republic of Germany through which the Ordinary Shares may be held, settled, or transferred.
"Commission" or "SEC" means the Securities and Exchange Commission of the United States, or any successor governmental agency performing comparable functions.
"Company" means Halcyon Semiconductor Aktiengesellschaft, an Aktiengesellschaft organized under the laws of the Federal Republic of Germany, and its successors.
"Custodian" means the entity appointed by the Depositary to hold the deposited Ordinary Shares and other Deposited Securities in the Federal Republic of Germany, as set forth in Section 2.1, and any substitute or additional custodian appointed in accordance with the provisions of this Agreement.
"Deliver" and "Delivery" mean (a) when used in respect of ADSs, the physical delivery of ADRs in certificated form or the book-entry transfer of ADSs through the facilities of DTC, as the context may require, and (b) when used in respect of Ordinary Shares, the physical delivery of share certificates (if any) or the book-entry transfer of Ordinary Shares through Ashgrove Enterprises or such other central securities depository as may be applicable.
"Deposit Agreement" or "Agreement" means this Deposit Agreement, including the Recitals hereto and all Exhibits and Schedules hereto, as the same may be amended or supplemented from time to time in accordance with the provisions hereof.
"Depositary" means Meridian Trust Company, National Association, a national banking association organized under the laws of the United States, acting in its capacity as depositary under this Agreement, and any successor depositary appointed in accordance with the provisions of Article 11 hereof.
"Deposited Securities" means the Ordinary Shares and any other securities, property, or cash held by the Depositary or the Custodian or any of their respective nominees in respect of ADSs under this Agreement, including, without limitation, any securities, property, or cash received by the Depositary or the Custodian in respect of such Ordinary Shares (whether by way of dividend, distribution, exchange, conversion, or otherwise).
"DTC" means The Depository Trust Company, a limited-purpose trust company organized under the laws of the State of New York and a subsidiary of The Depository Trust & Clearing Corporation, or any successor thereto.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
"Holder" means the person or entity in whose name an ADS (whether certificated or uncertificated) is registered on the books of the Depositary, which books are maintained by the Registrar in accordance with the provisions of this Agreement. When ADSs are held through DTC (or its nominee, Cede & Co.), DTC (or such nominee) shall be considered the Holder for all purposes under this Agreement except as otherwise provided herein.
"IFRS" means International Financial Reporting Standards as adopted by the International Accounting Standards Board.
"IRS" means the Internal Revenue Service of the United States.
"Ordinary Shares" or "Shares" means the ordinary shares (Stammaktien), no par value (Stückaktien), of the Company, and shall include any ordinary shares of the Company that may be issued in the future and deposited hereunder.
"Pre-Release" means the delivery by the Depositary of ADSs prior to the deposit of Ordinary Shares or the delivery of Ordinary Shares prior to the cancellation and surrender of ADSs, in each case in accordance with Section 3.4 of this Agreement.
"Registrar" means Crestfield Transfer Services Inc., 6201 15th Avenue, Brooklyn, NY 11219, in its capacity as registrar for the ADSs, or any successor registrar appointed by the Depositary in accordance with the provisions of this Agreement.
"Restricted Securities" means ADSs or underlying Ordinary Shares that bear or are required to bear restrictive legends or are subject to stop-transfer instructions under the Securities Act or any other applicable securities laws, including, without limitation, ADSs and Ordinary Shares that are "restricted securities" within the meaning of Rule 144(a)(3) under the Securities Act.
"Securities Act" means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
"Transfer Agent" means Crestfield Transfer Services Inc., 6201 15th Avenue, Brooklyn, NY 11219, in its capacity as transfer agent for the ADSs, or any successor transfer agent appointed by the Depositary in accordance with the provisions of this Agreement.
"US Person" shall have the meaning set forth in Regulation S under the Securities Act.
Section 1.2 — Rules of Construction
(a) Unless the context otherwise requires, words importing the singular shall include the plural and vice versa, and words importing any gender shall include all genders.
(b) Section headings and article headings used in this Agreement are for convenience of reference only and shall not affect the construction or interpretation of any provision hereof.
(c) All references herein to "Articles," "Sections," "Exhibits," and "Schedules" are to Articles, Sections, Exhibits, and Schedules of this Agreement unless otherwise specified.
(d) The words "hereof," "herein," "hereunder," "hereby," and similar words refer to this Agreement as a whole and not to any particular provision of this Agreement.
(e) The words "include," "includes," and "including" shall be deemed to be followed by the phrase "without limitation" whether or not such phrase is expressly stated.
(f) References to any statute or regulation shall be deemed to include all amendments thereto and any successor statute or regulation, as well as all rules and regulations promulgated thereunder.
(g) References to "business days" shall mean days on which commercial banks in both New York City, New York, United States and Munich, Germany are open for the conduct of general commercial banking business.
(h) This Agreement shall be interpreted and construed in accordance with the laws of the State of Delaware, without reference to principles of conflicts of laws that would require the application of the laws of any other jurisdiction, and for purposes of construction, the rule that ambiguities are to be construed against the drafter shall not apply.
ARTICLE 2 — APPOINTMENT OF DEPOSITARY; CUSTODIAN; FORM OF ADRs
Section 2.1 — Appointment of Depositary and Custodian
(a) The Company hereby appoints Meridian Trust Company, National Association as Depositary under this Agreement, and Meridian Trust Company, National Association hereby accepts such appointment and agrees to act as Depositary in accordance with the terms and conditions hereof.
(b) The Depositary shall appoint a Custodian in the Federal Republic of Germany for the purpose of receiving, holding, and safekeeping of deposited Ordinary Shares and other Deposited Securities. The Custodian shall maintain an account at Ashgrove Enterprises Banking AG (or such other German central securities depository as may be agreed upon by the Company and the Depositary) for the custody and settlement of Ordinary Shares deposited hereunder. The identity and contact information of the initial Custodian is set forth in Schedule 1 hereto.
(c) The Depositary may from time to time appoint substitute or additional custodians in any country or jurisdiction as the Depositary may determine to be necessary or convenient, subject to the Company's prior written consent, which consent shall not be unreasonably withheld, delayed, or conditioned. Any such substitute or additional custodian shall be authorized by applicable law to hold securities in custody and shall maintain appropriate accounts at the relevant central securities depository.
(d) The appointment of the Custodian and the coordination of settlement procedures through Ashgrove Enterprises Banking AG have been the subject of a pre-effective letter agreement dated May 14, 2026 between the Company and the Depositary (the "Pre-Effective Letter Agreement"), which Pre-Effective Letter Agreement shall be superseded in its entirety by this Agreement upon its effectiveness, except to the extent that any provisions of the Pre-Effective Letter Agreement are expressly stated to survive.
(e) The Depositary shall be responsible for the acts and omissions of the Custodian to the same extent as the Depositary would be responsible for its own acts and omissions under the standard of care set forth in Section 11.1, except that the Depositary shall not be liable for any act or omission of the Custodian that is not the result of the Depositary's own negligence or willful misconduct.
Section 2.2 — Form, Transferability, and Registration of ADRs
(a) ADRs shall be issued in registered form only. ADRs may be issued in certificated form or in uncertificated (book-entry) form. The Depositary is authorized and directed to issue ADRs through the facilities of DTC in book-entry form, and DTC (or its nominee, Cede & Co.) may be registered as the Holder of all or any portion of the ADSs so issued.
(b) ADRs issued in certificated form shall be engraved or printed in accordance with customary practice and shall be substantially in the form set forth in Exhibit A hereto, with such changes as may be required by DTC, the Depositary, or applicable law. Each certificated ADR shall bear appropriate CUSIP numbering (to be assigned prior to the effectiveness of this Agreement).
(c) ADRs are transferable on the books of the Depositary (maintained by the Registrar) by the Holder thereof in person or by duly authorized attorney, subject to the surrender of the ADR (if certificated) to the Depositary at its principal office or at the office of the Registrar, duly endorsed or accompanied by a duly executed instrument of transfer in form satisfactory to the Depositary and the Registrar, and subject further to the payment of applicable fees, taxes, and charges as provided herein, and compliance with all applicable laws and regulations.
(d) Crestfield Transfer Services Inc., 6201 15th Avenue, Brooklyn, NY 11219, is hereby appointed as Transfer Agent and Registrar for the ADSs. The Transfer Agent and Registrar shall maintain the ADS register in accordance with the provisions of Article 13 hereof.
(e) ADRs issued in book-entry form through DTC shall be transferable in accordance with the rules and procedures of DTC and applicable law. The Depositary shall cooperate with DTC to facilitate the settlement and transfer of ADSs held in book-entry form.
Section 2.3 — ADS Ratio
(a) Each ADS shall represent the right to receive two (2) Ordinary Shares (Stammaktien) of the Company, no par value. Unless and until the ADS ratio is adjusted in accordance with paragraph (b) of this Section 2.3, each ADS shall continue to represent the right to receive two (2) Ordinary Shares.
(b) The Depositary may, with the prior written consent of the Company (which consent shall not be unreasonably withheld), adjust the ADS ratio in the event of a stock split, reverse stock split, stock dividend, recapitalization, reclassification, consolidation, merger, or similar event affecting the Ordinary Shares. Any such adjustment shall be effected in a manner that the Depositary, in consultation with the Company, determines to be equitable and practicable. The Depositary shall give notice to Holders of any such adjustment in the ADS ratio promptly after such adjustment becomes effective. Such notice shall describe the nature of the event giving rise to the adjustment and the new ADS ratio.
Section 2.4 — Lists of Holders
(a) The Depositary shall maintain, through the Registrar, a register of all Holders of ADSs, recording the name, address, tax identification number (to the extent provided), and number of ADSs held by each Holder.
(b) The Depositary shall make the register of Holders available for inspection by the Company and its authorized representatives at reasonable times during business hours at the principal office of the Registrar, upon reasonable advance notice and subject to applicable privacy laws and regulations.
(c) The Company shall have the right, upon written request to the Depositary, to receive a current list of all Holders and the number of ADSs held by each Holder, together with such other information as may be contained in the register and may be reasonably requested by the Company. Such list shall be provided at the Company's expense, including reimbursement of the Depositary's and the Registrar's reasonable out-of-pocket costs in preparing and delivering such list.
ARTICLE 3 — DEPOSIT OF SHARES AND ISSUANCE OF ADSs
Section 3.1 — Deposit of Ordinary Shares
(a) Subject to the terms and conditions of this Agreement, any person may deposit Ordinary Shares with the Custodian (or deliver evidence satisfactory to the Depositary and the Custodian of the book-entry transfer of Ordinary Shares through Ashgrove Enterprises to the Custodian's account at Ashgrove Enterprises) for the purpose of having ADSs issued hereunder in respect of such deposited Ordinary Shares.
(b) Each person depositing Ordinary Shares for the issuance of ADSs shall be required to deliver or cause to be delivered to the Custodian:
(i) an instrument of transfer or endorsement in form satisfactory to the Custodian, duly executed by or on behalf of the person entitled to transfer such Ordinary Shares;
(ii) all such documentation as may be required under the laws of the Federal Republic of Germany for the valid transfer of such Ordinary Shares to the account of the Custodian at Ashgrove Enterprises, including any certifications or declarations required by the German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht, or "BaFin");
(iii) a certification that the deposit is made in compliance with the Securities Act and any applicable restrictions under United States and German securities laws, including, if applicable, representations as to the availability of an exemption from registration;
(iv) such proof of identity, authority, and beneficial ownership as the Depositary or the Custodian may reasonably require; and
(v) payment of all applicable fees, taxes, and governmental charges payable in connection with the deposit.
(c) The Ordinary Shares to be deposited must be duly authorized, validly issued, fully paid, and non-assessable (vollständig eingezahlt) under the laws of the Federal Republic of Germany and the Company's Satzung (articles of association). The Depositary shall not accept for deposit any Ordinary Shares that are restricted, subject to pending compulsory acquisition proceedings, or encumbered by any lien, charge, security interest, or other encumbrance without the prior written approval of the Depositary and the Company and the placement of appropriate legends on the ADRs evidencing the ADSs issued in respect of such shares.
(d) If, at any time, the Depositary or the Custodian determines that any deposit of Ordinary Shares does not comply with the requirements of this Agreement or applicable law, the Depositary may refuse to accept such deposit and shall promptly notify the depositor of such refusal and the reasons therefor.
Section 3.2 — Issuance of ADSs Against Deposit
(a) Upon receipt by the Depositary of confirmation from the Custodian that Ordinary Shares have been deposited with the Custodian (or that evidence of book-entry transfer of Ordinary Shares to the Custodian's account at Ashgrove Enterprises has been received), and upon satisfaction of all other conditions to issuance set forth in this Agreement, the Depositary shall (subject to the terms hereof) issue to the depositor or its designee the number of ADSs corresponding to the Ordinary Shares so deposited, at the ratio of one (1) ADS for each two (2) Ordinary Shares deposited.
(b) ADSs may be issued in book-entry form through DTC or in certificated form, as the depositor may request and as the Depositary may determine to be practicable. ADSs issued through DTC shall be credited to the account of the depositor (or its designee) at DTC, and the Depositary shall cause DTC to be notified of such credit.
(c) The Depositary shall be entitled to refuse to issue ADSs if:
(i) the deposit does not comply with the terms and conditions of this Agreement;
(ii) any necessary governmental or regulatory approvals have not been obtained;
(iii) the Depositary determines, in its reasonable judgment, that issuance would violate any applicable law, rule, regulation, or order of any governmental authority;
(iv) any necessary documentation required under Section 3.5 has not been provided to the satisfaction of the Depositary; or
(v) any fees, taxes, or other charges payable in connection with the issuance have not been paid.
(d) The Depositary shall not be liable to any person for any delay in the issuance of ADSs resulting from its compliance with the provisions of this Section 3.2 or Section 3.5.
Section 3.3 — Deposit in Connection with the Offering
(a) In connection with the initial public offering of ADSs contemplated by the Registration Statements filed with the SEC, the following Ordinary Shares shall be deposited with the Custodian:
(i) New Ordinary Shares. 30,000,000 newly issued Ordinary Shares of the Company, to be issued by the Company pursuant to a resolution of the Company's management board (Vorstand) with the approval of the supervisory board (Aufsichtsrat), in connection with the offering.
(ii) Existing Ordinary Shares. 12,800,000 existing Ordinary Shares sold by the following selling shareholders:
(A) Rheintal Industrieholding GmbH: 8,500,000 Ordinary Shares; and
(B) Kestrel Capital Partners AG: 4,300,000 Ordinary Shares.
(b) The deposit of such Ordinary Shares shall result in the issuance of up to 21,400,000 ADSs (the "Base ADSs"), based on the ADS ratio of one (1) ADS for each two (2) Ordinary Shares. In addition, if the overallotment option granted to the underwriters is exercised in full, up to 3,210,000 additional ADSs shall be issued, representing up to an additional 6,420,000 Ordinary Shares.
(c) The issuance of ADSs in connection with the offering shall be coordinated with the underwriting syndicate, consisting of Westbridge Securities LLC, as representative of the several underwriters, Pinnacle Morgan & Co., Inc., Andover Barcliffe Group Inc., and Northpointe Capital LLC (collectively, the "Underwriters"), pursuant to and in accordance with the Underwriting Agreement dated [●], 2026.
(d) Settlement of the offering shall be effected in accordance with the following mechanics:
(i) The Company and the selling shareholders shall cause the Ordinary Shares to be delivered through Ashgrove Enterprises to the Custodian's account at Ashgrove Enterprises on or before the closing date;
(ii) Upon confirmation by the Custodian of the receipt of such Ordinary Shares, the Depositary shall issue the corresponding number of ADSs and cause them to be delivered through DTC to the accounts of the Underwriters designated in writing by the representative of the Underwriters;
(iii) Settlement shall occur on a T+2 basis, with the target closing date being July 6, 2026, or such other date as may be agreed by the Company, the representative of the Underwriters, and the Depositary.
(e) The provisions of this Section 3.3 are intended to facilitate the initial public offering and shall not limit or restrict any other deposit of Ordinary Shares in accordance with the general provisions of this Agreement.
Section 3.4 — Pre-Release of ADSs
(a) Notwithstanding any other provision of this Agreement, the Depositary may, in its discretion, issue ADSs prior to the deposit of the underlying Ordinary Shares with the Custodian (a "Pre-Release") or deliver Ordinary Shares prior to the cancellation and surrender of the corresponding ADSs, subject to the following conditions:
(i) Each Pre-Release shall be subject to a written agreement between the Depositary and the Pre-Release recipient (the "Pre-Release Agreement"), in form and substance satisfactory to the Depositary;
(ii) The Pre-Release recipient shall represent and warrant in the Pre-Release Agreement that it (or its customer) is the beneficial owner of the underlying Ordinary Shares, is entitled to deposit such shares under applicable law, and will deliver such Ordinary Shares to the Custodian within the time period specified in the Pre-Release Agreement;
(iii) The Depositary shall require, as a condition of any Pre-Release, collateral, credit support, or other security arrangements satisfactory to the Depositary, which may include cash collateral, letters of credit, or other forms of credit enhancement;
(iv) The aggregate number of ADSs outstanding at any time as a result of Pre-Releases shall not exceed thirty percent (30%) of all ADSs outstanding at such time (the "Pre-Release Limit"); and
(v) The Depositary shall have the right to terminate any Pre-Release at any time, with or without cause, upon notice to the Pre-Release recipient.
(b) Each Pre-Release shall be subject to the indemnification provisions of this Agreement and shall be deemed made in consideration of the Depositary's agreement to issue the Pre-Released ADSs. All ADSs issued pursuant to a Pre-Release shall be treated as outstanding for all purposes of this Agreement, including for purposes of determining the number of ADSs outstanding, entitlement to distributions, and the calculation of fees.
(c) The Depositary shall maintain records of all Pre-Releases and shall make such records available for inspection by the Company upon reasonable request.
Section 3.5 — Conditions to Issuance
(a) The Depositary may require, as a condition to the issuance of ADSs, the delivery of such documentation as it may reasonably determine to be necessary or appropriate, including without limitation:
(i) proof of authority of the person depositing the Ordinary Shares to make such deposit and to receive the ADSs to be issued;
(ii) tax certifications, including without limitation IRS Forms W-8BEN, W-8BEN-E, W-9, or such successor forms as may be prescribed by the IRS, and any tax documentation required under the laws of the Federal Republic of Germany;
(iii) certifications as to compliance with the Securities Act, the Exchange Act, and any other applicable securities laws and regulations;
(iv) an opinion of counsel, in form and substance satisfactory to the Depositary, regarding the legality of the deposit and the compliance of the transaction with applicable laws, if reasonably requested by the Depositary; and
(v) such other documentation as the Depositary may require to satisfy applicable know-your-customer, anti-money laundering, and sanctions compliance obligations.
(b) The Depositary shall not be liable to any person for any delay in the issuance of ADSs resulting from the Depositary's exercise of its rights under this Section 3.5, including any delay arising from the Depositary's compliance verification procedures.
ARTICLE 4 — WITHDRAWAL OF DEPOSITED SECURITIES; CANCELLATION OF ADSs
Section 4.1 — Withdrawal and Cancellation
(a) Subject to the terms and conditions of this Agreement, a Holder of ADSs may at any time surrender ADSs to the Depositary at its principal office (or at the office of the Registrar) for the purpose of withdrawing the underlying Ordinary Shares represented by such ADSs.
(b) Upon surrender of ADSs for withdrawal and upon payment of all applicable fees, taxes, and charges as provided herein, the Depositary shall:
(i) cancel the surrendered ADSs on the books of the Depositary (and cause the Registrar to record such cancellation);
(ii) instruct the Custodian to deliver the corresponding number of Ordinary Shares (two (2) Ordinary Shares per ADS cancelled) to the person designated by the Holder in writing, free and clear of any lien, charge, or encumbrance created by or through the Depositary (but subject to any liens, charges, or encumbrances existing on the Ordinary Shares at the time of deposit or arising under applicable law); and
(iii) provide the Holder with such confirmation of cancellation as the Depositary customarily provides.
(c) Delivery of Ordinary Shares upon withdrawal shall be effected through Ashgrove Enterprises (or such other settlement system as may be applicable) to the account designated by the Holder, at the Holder's sole expense. The Depositary shall not be responsible for any fees, charges, or expenses imposed by Ashgrove Enterprises, any intermediary bank, or any other third party in connection with such delivery.
(d) Notwithstanding the foregoing, the Depositary shall be entitled to refuse a withdrawal if:
(i) temporary delays result from the closing of the Depositary's or the Registrar's transfer books, the deposit of Ordinary Shares in connection with voting at any general meeting of shareholders (Hauptversammlung), or the payment of dividends or other distributions;
(ii) any fees, taxes, or charges owing to the Depositary or any governmental authority in connection with the withdrawal have not been paid;
(iii) compliance with any applicable law, rule, regulation, or order of any governmental authority requires such refusal; or
(iv) such other restrictions as may be set forth in the ADR or this Agreement apply.
(e) Notwithstanding any other provision of this Agreement, the right of a Holder to withdraw the Ordinary Shares underlying its ADSs shall not be limited by any provision of this Agreement, except as specifically permitted by applicable law, and the Depositary shall not be entitled to impose any conditions on withdrawal that are not expressly set forth herein or otherwise required by applicable law.
Section 4.2 — Partial Withdrawal
(a) A Holder may withdraw a portion of the Ordinary Shares underlying its ADSs by surrendering a corresponding number of ADSs to the Depositary. The Depositary shall cancel the corresponding number of ADSs and instruct the Custodian to deliver the withdrawn Ordinary Shares in accordance with Section 4.1.
(b) Any partial withdrawal must be in whole ADS increments, meaning that the number of Ordinary Shares to be withdrawn must be an even number (since each ADS represents two (2) Ordinary Shares). The Depositary shall not be required to effect a withdrawal that would result in the cancellation of a fractional ADS.
Section 4.3 — Limitations on Withdrawal
(a) No withdrawal of deposited Ordinary Shares shall be permitted if such withdrawal would contravene any applicable law or regulation, including without limitation:
(i) the economic sanctions programs administered by the Office of Foreign Assets Control ("OFAC") of the United States Department of the Treasury;
(ii) the regulations of the German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht, or "BaFin") or any other applicable German regulatory authority;
(iii) the European Union sanctions regulations; or
(iv) any restriction contained in the Company's Satzung (articles of association) or applicable to the Ordinary Shares under German corporate law.
(b) The Depositary may require the delivery of tax clearance certificates, withholding documentation, or other governmental certifications before delivering Ordinary Shares upon withdrawal, and the Depositary shall not be liable for any delay in withdrawal resulting from such requirements.
ARTICLE 5 — DIVIDENDS AND OTHER DISTRIBUTIONS
Section 5.1 — Cash Distributions (Dividends)
(a) Upon receipt by the Depositary or the Custodian of a cash dividend or other cash distribution on the deposited Ordinary Shares, the Depositary shall, to the extent practicable and permitted by applicable law:
(i) convert the amount received (net of any amounts required to be withheld as taxes) into United States dollars, if such amount is denominated in euros or any other non-US dollar currency, net of foreign exchange fees and expenses incurred by the Depositary in effecting such conversion;
(ii) distribute the resulting United States dollar amount to Holders entitled thereto, pro rata according to the number of ADSs held by each such Holder as of the ADS Record Date fixed for such distribution, after deduction of:
(A) applicable taxes required to be withheld, including without limitation German withholding tax (Kapitalertragsteuer) at the statutory rate of twenty-five percent (25%), together with the solidarity surcharge (Solidaritätszuschlag) of five and one-half percent (5.5%) thereon (for an aggregate withholding rate of 26.375%), which aggregate rate may be reduced to fifteen percent (15%) for United States resident Holders who are eligible for benefits under the Convention between the United States of America and the Federal Republic of Germany for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income and Capital and to Certain Other Taxes, as amended (the "US-Germany Income Tax Treaty"), in accordance with Article 10 thereof; and
(B) Depositary fees and expenses, including without limitation the distribution fee set forth in Article 7 and any other fees or expenses payable in connection with the distribution.
(b) If conversion to United States dollars is not practicable due to exchange controls, market disruptions, or other circumstances beyond the Depositary's reasonable control, the Depositary may, in its discretion, distribute the foreign currency received (or a check drawn on a foreign currency account) to the Holders, or may hold such foreign currency uninvested and without liability for interest for the account of the Holders entitled thereto.
(c) Tax Treaty Benefit Procedures. The Depositary shall use commercially reasonable efforts to claim treaty-reduced withholding rates on behalf of Holders who have furnished to the Depositary the requisite tax documentation, including without limitation IRS Form W-8BEN (for individuals) or IRS Form W-8BEN-E (for entities), or such successor forms as may be prescribed by the IRS, together with any additional documentation required by the German tax authorities. The Depositary's ability to claim treaty-reduced withholding rates shall be subject to the Depositary's status as a Qualified Intermediary ("QI") under applicable IRS regulations and the applicable provisions of German tax law. The Depositary shall not be liable for any failure to obtain treaty-reduced withholding rates, except to the extent such failure is the result of the Depositary's gross negligence or willful misconduct.
(d) The Company shall provide the Depositary with reasonable advance notice of the declaration, amount, currency, record date, and payment date of any cash dividend or other cash distribution on the Ordinary Shares.
Section 5.2 — Distributions of Shares (Stock Dividends)
(a) If the Company distributes additional Ordinary Shares as a stock dividend or bonus issue on or in respect of the deposited Ordinary Shares, the Depositary shall, to the extent practicable:
(i) distribute additional ADSs to the Holders entitled thereto, at the applicable ADS ratio, pro rata according to the number of ADSs held by each such Holder as of the ADS Record Date fixed for such distribution; or
(ii) if such distribution would result in the issuance of fractional ADSs, aggregate all fractional entitlements, sell the Ordinary Shares representing such fractional entitlements (either on the Frankfurt Stock Exchange or on such other market as the Depositary may determine to be appropriate), and distribute the net cash proceeds of such sale to the Holders entitled thereto, pro rata.
(b) ADS Ratio Adjustments. If a stock dividend or bonus issue is a pro rata distribution to all holders of Ordinary Shares, the Depositary and the Company may, by mutual written agreement, adjust the ADS ratio so that no new ADSs are issued in connection with such distribution. In such event, each ADS would, following the adjustment, represent a greater number of Ordinary Shares than prior to the adjustment, and the Depositary shall give notice to Holders of such adjustment in accordance with Section 8.3.
Section 5.3 — Distributions of Rights
(a) If the Company distributes to the holders of Ordinary Shares rights to subscribe for additional Ordinary Shares or other securities of the Company (including without limitation pre-emptive rights (Bezugsrechte) under the German Stock Corporation Act (Aktiengesetz)), the Depositary shall use commercially reasonable efforts to make such rights available to Holders to the extent practicable and legally permissible under United States securities laws.
(b) If the rights cannot be distributed to Holders because:
(i) the rights, the underlying securities, or a transaction in respect thereof have not been registered under the Securities Act and no exemption from registration is available; or
(ii) distribution of such rights to Holders is not otherwise practicable,
then the Depositary may, to the extent that the Depositary determines it to be lawful and practicable, sell such rights (on the Frankfurt Stock Exchange or such other market as the Depositary may determine), and distribute the net proceeds of such sale to the Holders entitled thereto, pro rata according to the number of ADSs held by each such Holder as of the applicable ADS Record Date. If the Depositary determines that sale is not lawful or practicable, the Depositary may allow such rights to lapse, in which case the Holders shall receive nothing in respect of such rights.
(c) Treatment of Pre-Emptive Rights (*Bezugsrechte*). The Depositary shall coordinate with the Company in connection with any future pre-emptive rights offerings, and the Depositary shall use commercially reasonable efforts to enable Holders to exercise or trade such pre-emptive rights, subject to applicable law and the practicability of such exercise or trading. To the extent that pre-emptive rights are excluded (Bezugsrechtsausschluss) by the Company's shareholders or the Company's management board (with the consent of the supervisory board) in accordance with the Aktiengesetz, no distribution of rights to Holders shall be required, and the Depositary shall have no obligation to Holders in respect of such excluded rights.
Section 5.4 — Distributions of Other Property
(a) If the Company distributes to the holders of Ordinary Shares securities (other than Ordinary Shares), property, or other assets (including any distribution of assets in connection with a spin-off, split-off, or similar transaction), the Depositary shall, to the extent practicable:
(i) distribute such property to the Holders entitled thereto, pro rata, in such manner as the Depositary may determine to be equitable and practicable; or
(ii) if such distribution is not practicable, sell such property (on such market and upon such terms as the Depositary may determine to be reasonable) and distribute the net cash proceeds of such sale to the Holders entitled thereto, pro rata.
(b) The Depositary may hold any undistributed property for the account of the Holders entitled thereto, without liability for interest, and shall apply or dispose of such property in accordance with instructions received from such Holders or, in the absence of such instructions, in such manner as the Depositary may determine to be appropriate.
Section 5.5 — Fractional ADSs and Rounding
(a) The Depositary shall not issue fractional ADSs in connection with any distribution under this Article 5 or any other provision of this Agreement. In the event that a distribution or other transaction would result in a Holder becoming entitled to a fraction of an ADS, the Depositary shall aggregate all such fractional entitlements and sell the Ordinary Shares representing such fractional entitlements, and shall distribute the net cash proceeds of such sale to the Holders entitled thereto, pro rata according to their respective fractional entitlements.
(b) In calculating the amounts distributable to each Holder, the Depositary shall round down to the nearest whole cent (US$0.01), and the Depositary shall retain any amount not distributed as a result of such rounding as compensation for the administrative costs of the distribution.
Section 5.6 — Currency Conversion
(a) Whenever the Depositary is required to convert any amount from euros (or any other non-US dollar currency) into United States dollars for the purposes of any distribution or payment under this Agreement, the Depositary shall effect such conversion at such rate or rates as the Depositary may obtain from customary foreign exchange dealers selected by the Depositary in its sole discretion. The Depositary makes no representation or warranty with respect to the exchange rate or rates at which such conversions are effected, and the Depositary shall bear no responsibility for any loss arising from exchange rate fluctuations or the timing of any currency conversion.
(b) The Depositary shall be entitled to deduct from the amount to be converted (or from the converted amount) any reasonable conversion expenses, commissions, and spreads incurred in effecting such conversion. Any amounts so deducted shall be treated as Depositary expenses and shall be borne by the Holders receiving the distribution.
(c) If, for any reason, conversion of a non-US dollar amount into United States dollars cannot be effected on terms acceptable to the Depositary, the Depositary may hold the foreign currency uninvested and without liability for interest for the account of the Holders entitled thereto until such time as conversion can be effected or the foreign currency can otherwise be distributed. The Depositary shall have no obligation to invest or reinvest any foreign currency held pursuant to this Section 5.6(c).
Section 5.7 — Record Dates for Distributions
(a) Whenever the Company establishes a record date for a distribution on the Ordinary Shares, the Depositary shall, to the extent practicable, set an ADS Record Date that corresponds to such record date, taking into account the settlement cycle and the time necessary to process the distribution. The ADS Record Date shall be set by the Depositary after consultation with the Company to the extent practicable.
(b) The Company shall give the Depositary reasonable advance notice (which shall be not less than fourteen (14) calendar days, or such shorter period as may be agreed by the Depositary) of any record date established by the Company for any distribution, payment, or other action with respect to the Ordinary Shares.
(c) The Depositary shall give Holders notice of each ADS Record Date, together with a description of the distribution or other action to which such ADS Record Date relates, in accordance with Section 8.3 hereof.
ARTICLE 6 — VOTING OF DEPOSITED SECURITIES
Section 6.1 — Voting Rights; Voting Instructions
(a) Holders of ADSs shall have no direct voting rights with respect to the Ordinary Shares underlying their ADSs. The right to vote the deposited Ordinary Shares shall be exercised only by the Depositary (or the Custodian on behalf of the Depositary) in accordance with the voting instructions received from Holders as set forth in this Article 6.
(b) Upon receipt of notice from the Company of any general meeting of shareholders (Hauptversammlung) or any other matter requiring a vote or consent of holders of Ordinary Shares, the Depositary shall, as promptly as practicable, distribute to each Holder:
(i) the notice of the meeting (or a summary thereof), including the agenda, any proposals to be voted upon, and any other information furnished by the Company;
(ii) a statement that Holders as of the applicable ADS Record Date may instruct the Depositary as to the exercise of the voting rights attaching to the Ordinary Shares underlying the ADSs registered in such Holder's name; and
(iii) a means for providing voting instructions to the Depositary, which may take the form of a printed voting instruction card (substantially in the form set forth in Exhibit C hereto), electronic voting through the Depositary's online platform, or such other method as the Depositary may determine to be appropriate and consistent with applicable law.
(c) Voting instructions must be received by the Depositary no later than the date specified in the notice distributed to Holders (the "Instruction Cutoff Date"), which date shall be at least five (5) business days prior to the date of the meeting. The Depositary shall set the Instruction Cutoff Date in consultation with the Company to provide sufficient time for the Depositary to process and transmit voting instructions to the Custodian or the Company's designated voting agent in Germany.
(d) The Depositary shall endeavor, to the extent practicable and permitted by German corporate law, to vote or cause the Custodian to vote the deposited Ordinary Shares in accordance with the voting instructions received from Holders. In order to give effect to such voting, the Depositary or the Custodian may give a proxy or proxies to the person or persons designated by the Company to attend the meeting and vote the deposited Ordinary Shares in accordance with the voting instructions received.
(e) If no voting instructions are received from a Holder by the Instruction Cutoff Date, the Depositary shall not vote the Ordinary Shares underlying such Holder's ADSs, and such Ordinary Shares shall not be counted for quorum or voting purposes at the meeting, unless a discretionary proxy is given in accordance with Section 6.2 below or unless otherwise agreed in writing between the Company and the Depositary.