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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 9, 2024
SVB Financial Group
(Exact Name of Registrant as Specified in Charter)
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Delaware |
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001-39154 |
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91-1962278 |
(State or other jurisdiction of incorporation) |
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(Commission File Number) |
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(I.R.S. Employer Identification No.) |
2270 Sand Hill Road
Menlo Park, California 94025
(Address of principal executive offices) (Zip Code)
(650) 567-6900
(Company’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class |
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Trading Symbol(s) |
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Name of Each Exchange on Which Registered |
None |
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N/A |
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N/A |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act (17 CFR 230.405) or Rule 12b-2 of the Exchange Act (17 CFR 240.12b-2).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01. |
Entry into a Material Definitive Agreement. |
As previously reported, on March 17, 2023, SVB Financial Group (the “Company”) filed a voluntary petition in the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”) for relief under the provisions of Chapter 11 of Title 11 of the United States Code (the “Bankruptcy Code”). The Company’s case is administered under the caption In re SVB Financial Group, Case No. 23-10367 (the “Chapter 11 Case”). The Company is continuing to operate its remaining businesses, including SVB Capital, its investment advisory business which sponsors and advises private venture capital and credit funds, as a debtor in possession under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court.
On January 9, 2024, the Company entered into a Restructuring Support Agreement (together with all exhibits and schedules thereto, the “RSA”) with the holders of certain claims that are members of an ad hoc group of senior noteholders (the “Supporting Ad Hoc Group of Senior Noteholder Members”) and the official committee of unsecured creditors appointed in connection with the Chapter 11 Case (the “Official Committee”). The RSA reflects certain principal terms of a potential restructuring that include the proposed treatment of classes of claims and interests, the creation of a liquidating trust and the formation of a new holding company as set forth in the term sheet attached as an exhibit to the RSA. The RSA also contains various milestones, including the date by which the Company is required to, among other things, file the disclosure statement and the chapter 11 plan, the date by which more than two-thirds of the aggregate outstanding principal amount of the Company’s senior notes must have signed on to the RSA and the dates by which the Bankruptcy Court must have entered certain orders.
The RSA provides that the RSA may be terminated by the Supporting Ad Hoc Group of Senior Noteholder Members holding greater than 50% in amount of the Company’s senior notes held by all Supporting Ad Hoc Group of Senior Noteholder Members, by the Official Committee and by any other supporting creditor party to the RSA, each solely with respect to itself and upon the occurrence of certain events, including the breach by any supporting creditors of any representation, warranty or covenant that results in the restructuring transactions no longer having the support of at least two-thirds of the aggregate outstanding principal amount of the Company’s senior notes, and the failure to meet any of the milestones unless such milestone has been waived or extended. The RSA also provides certain other termination events, including that the Company may terminate the RSA in the event its Board of Directors, Restructuring Committee or its equivalent determines in good faith, based on the advice of outside counsel, (i) that continuing to pursue any of the restructuring transactions described therein would be inconsistent with the exercise of its fiduciary duties or applicable law or (ii) in the exercise of its fiduciary duties, to pursue an Alternative Restructuring Proposal (as defined in the RSA).
Although the Company intends to pursue the restructuring transactions contemplated by the RSA, there can be no assurance that the Company will be successful in completing a restructuring or any other similar transaction on the terms set forth in the RSA or at all. In addition, the transactions contemplated by the RSA are subject to approval by the Bankruptcy Court, among other conditions. Accordingly, no assurance can be given that the transactions described therein will be consummated on the expected terms, if at all.
The foregoing description of the RSA does not purport to be complete and is qualified in its entirety by reference to the RSA, a copy of which is attached to this Form 8-K as Exhibit 10.1 and hereby incorporated by reference into this Item 1.01.
Item 7.01. |
Regulation FD Disclosure. |
In connection with the Chapter 11 Case, on January 9, 2024, the Company provided certain financial and other information to certain holders of the Company’s senior notes and preferred stock (the “Creditors”), pursuant to non-disclosure agreements with such Creditors (the “NDAs”). Pursuant to the NDAs, the Company agreed to disclose publicly any material non-public information disclosed to such Creditors after a specified period or upon the occurrence of certain events set forth in the NDAs. The information included in this this Form 8-K as Exhibit 99.1 (the “Disclosure Information”), has been filed with the Bankruptcy Court and is being furnished on this Form 8-K and is incorporated into this Item 7.01 by reference.
In addition, on January 9, 2024, the Company issued a press release announcing new leadership and a new operating structure for SVB Capital Management, LLC, a wholly-owned indirect subsidiary of the Company that manages its SVB Capital business. A copy of the press release is attached hereto as Exhibit 99.2 and incorporated into this Item 7.01 by reference.
The RSA, Disclosure Information and other documents filed on the docket of and other information related to the Chapter 11 Case are available free of charge online at https://restructuring.ra.kroll.com/SVBFG/. Documents and other information available on such website are not part of this Form 8-K and shall not be deemed incorporated by reference in this Form 8-K. The Company has included the website address in this Form 8-K as an inactive textual reference only.
The information contained in this Item 7.01 is being “furnished” and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and shall not be deemed to be incorporated by reference into any of the Company’s filings under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, whether made before or after the date hereof and regardless of any general incorporation language in such filings, except to the extent expressly set forth by specific reference in such a filing.
Cautionary Statement Regarding the Disclosure Information
Management of the Company and of the SVB Capital business prepared the projections in the Disclosure Information from certain internal financial projections based on expectations, beliefs, opinions, and assumptions that they believed were reasonable at the time they were made. Such expectations, beliefs, opinions, and assumptions may not be appropriate as of the date hereof in light of developments in the Company’s or SVB Capital’s business and the broader markets it serves. The projections were not prepared with a view towards public disclosure and were not prepared in accordance with generally accepted accounting principles or any published guidelines for preparation and presentation of “prospective financial information.” The inclusion of the projections in this Form 8-K should not be regarded as an indication that the Company or any other person considered, or now considers, this information to be predictive of actual future results, and does not constitute an admission or representation by any person that such information is material, or that the expectations, beliefs, opinions, and assumptions that underlie such projections remain the same as of the date of this Form 8-K, and readers are cautioned not to place undue reliance on the prospective financial information.
No independent accountant has examined, compiled, or performed any procedures with respect to the prospective financial information contained in this Form 8-K. Accordingly, none has expressed any opinion or any other form of assurance on such information or its achievability and none assumes any responsibility for the prospective financial information. Except as required by law, the Company does not currently intend to update or revise publicly any of the information contained or incorporated herein to reflect circumstances or other events occurring after the date the financial projections were prepared or to reflect the occurrence of future events. These considerations should be taken into account in reviewing the financial projections, which were prepared as of an earlier date. For additional information on factors that may cause actual future financial results to vary materially from the information presented herein, see the section entitled “Forward-Looking Statements” below.
Forward-Looking Statements
Various statements in this Form 8-K or documents referred to herein, including those that express a belief, expectation, target or intention, as well as those that are not statements of historical fact, and/or the Disclosure Information, are “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act and/or the Private Securities Litigation Reform Act of 1995, as applicable. All statements, other than statements of historical facts, included in this filing that address activities, events or developments that the Company expects, believes, targets or anticipates will or may occur in the future are forward-looking statements. Forward-looking statements are subject to known and unknown risks and uncertainties, many of which may be beyond the Company’s control. The Company’s actual results may differ materially from those anticipated in these forward-looking statements as a result of certain risks and other factors, which include the following: risks and uncertainties relating to the Chapter 11 Case, including but not limited to, the effects of the Chapter 11 Case on the Company and on the interests of various constituents, Bankruptcy Court rulings in the Chapter 11 Case and the outcome of the Chapter 11 Case in general, the duration of the Chapter 11 Case, the Company’s ability to successfully enter into and implement a restructuring plan, risks associated with third-party motions in the Chapter 11 Case, risks related to the trading of the Company’s securities on the OTC Pink Market, the risk that the Chapter 11 Case may be converted to a case under Chapter 7 of the Bankruptcy Code, as well as other risk factors. The Company therefore cautions readers against relying on these forward-looking statements. All forward-looking statements attributable to the Company or persons acting on the Company’s behalf are expressly qualified in their entirety by the foregoing cautionary statements. All such statements speak only as of the date made, and, except as required by law, the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
Item 9.01. |
Financial Statements and Exhibits. |
(d) Exhibits
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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SVB Financial Group (Company) |
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Date: January 10, 2024 |
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By: |
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/s/ Nicholas Grossi |
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Name: |
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Nicholas Grossi |
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Title: |
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Interim Chief Financial Officer |
Exhibit 10.1
EXECUTION VERSION
THIS
RESTRUCTURING SUPPORT AGREEMENT IS NOT AN OFFER OR ACCEPTANCE WITH RESPECT TO ANY SECURITIES OR A SOLICITATION OF ACCEPTANCES OF A CHAPTER 11 PLAN WITHIN THE MEANING OF SECTION 1125 OF THE BANKRUPTCY CODE. ANY SUCH OFFER OR SOLICITATION WILL
COMPLY WITH ALL APPLICABLE SECURITIES LAWS AND/OR PROVISIONS OF THE BANKRUPTCY CODE. NOTHING CONTAINED IN THIS RESTRUCTURING SUPPORT AGREEMENT SHALL BE AN ADMISSION OF FACT OR LIABILITY OR, UNTIL THE OCCURRENCE OF THE AGREEMENT EFFECTIVE DATE ON THE
TERMS DESCRIBED IN THIS AGREEMENT, DEEMED BINDING ON ANY OF THE PARTIES TO THIS AGREEMENT.
THIS RESTRUCTURING SUPPORT AGREEMENT IS THE PRODUCT OF
SETTLEMENT DISCUSSIONS AMONG THE PARTIES HERETO. ACCORDINGLY, THIS RESTRUCTURING SUPPORT AGREEMENT IS PROTECTED BY RULE 408 OF THE FEDERAL RULES OF EVIDENCE AND ANY OTHER APPLICABLE STATUTES OR DOCTRINES PROTECTING THE USE OR DISCLOSURE OF
CONFIDENTIAL SETTLEMENT DISCUSSIONS.
THIS RESTRUCTURING SUPPORT AGREEMENT DOES NOT PURPORT TO SUMMARIZE ALL OF THE TERMS, CONDITIONS, REPRESENTATIONS,
WARRANTIES, AND OTHER PROVISIONS WITH RESPECT TO THE TRANSACTIONS DESCRIBED HEREIN, WHICH TRANSACTIONS WILL BE SUBJECT TO THE COMPLETION OF DEFINITIVE DOCUMENTS INCORPORATING THE TERMS SET FORTH HEREIN AND THE CLOSING OF ANY TRANSACTION SHALL BE
SUBJECT TO THE TERMS AND CONDITIONS SET FORTH IN SUCH DEFINITIVE DOCUMENTS AND THE APPROVAL RIGHTS OF THE PARTIES SET FORTH HEREIN AND IN SUCH DEFINITIVE DOCUMENTS, IN EACH CASE, SUBJECT TO THE TERMS HEREOF.
RESTRUCTURING SUPPORT AGREEMENT
This RESTRUCTURING SUPPORT AGREEMENT (including all exhibits, annexes, and schedules attached to this agreement in accordance with
Section 12.2 hereof, this Agreement) is made and entered into as of January 9, 2024 (the Execution Date), by and among the following parties (each of the following described
in sub-clauses (i) through (v) of this preamble, a Party, and, collectively, the Parties):
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(i) |
SVB Financial Group (the Debtor); |
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(ii) |
the holders (or beneficial owners), or investment advisors,
sub-advisors, or managers of funds or accounts in their capacities as holders (or beneficial owners), of Claims (as defined herein) that are members of the Ad Hoc Group of Senior Noteholders (as
defined in the Verified Statement of Davis Polk & Wardwell LLP Pursuant to Federal Rule of Bankruptcy Procedure 2019 [D.I. 149]) that have executed and delivered counterpart signature pages to this Agreement or a
Joinder, in each case, to counsel to (i) the Debtor and (ii) the Official Committee (as defined herein) (such undersigned parties, the Supporting Ad Hoc Group of Senior Noteholder Members ); |
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(iii) |
the Official Committee, solely in its representative capacity, and for the avoidance of doubt, the Parties
acknowledge that each individual member of the Official Committee is not a Party by reason of its membership or participation on the Official Committee and expressly reserves all rights and remedies with respect to its claims or the applicable
indentures, as applicable, without limitation hereby; and |
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other holders (or beneficial owners), or investment advisors,
sub-advisors, or managers of funds or accounts in their capacities as holders (or beneficial owners), of Claims who become party hereto from time to time pursuant to a Joinder (which may be
executed by counsel to such holders on their behalf) (together with the Supporting Ad Hoc Group of Senior Noteholder Members, the Supporting Creditors,1 and with the
Official Committee, the Supporting Parties). |
RECITALS
WHEREAS, on March 17, 2023 (the Petition Date), the Debtor commenced a voluntary petition for relief
under chapter 11 of title 11 of the United States Code, 11 U.S.C. § 101 et seq. (the Bankruptcy Code) administered under the caption In re SVB Financial Group, Case
No. 23-10367 (MG) (Bankr. S.D.N.Y. Mar. 17, 2023) (the Chapter 11 Case) in the United States Bankruptcy Court for the Southern District of New York (the Bankruptcy
Court);
WHEREAS, the Parties and the Debtor have engaged in good faith,
arms-length negotiations regarding the terms of a Plan (as defined herein) to be proposed by the Debtor, which Plan shall contain the terms and conditions set forth in and be consistent in all respects
with the term sheet attached as Exhibit A hereto (such term sheet, as may be amended pursuant to this Agreement, including all exhibits thereto, the Restructuring Term Sheet, and such transactions on
the terms and conditions described in this Agreement and the Restructuring Term Sheet, the Restructuring Transactions);
WHEREAS, the Parties desire to express to each other their mutual support and commitment with respect to the Plan and the Restructuring
Transactions in order to facilitate the consensual emergence of the estate of the Debtor from chapter 11; and
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For the avoidance of doubt, any Affiliates or related parties of any Supporting Party shall not be deemed to be
Supporting Creditors themselves, unless such Affiliate or related party has itself signed this Agreement. The Parties acknowledge and agree that all representations, warranties, covenants, and other agreements made by any Supporting Creditor that is
a separately managed account of or advised by an investment manager are being made only with respect to the Claims held by such separately managed or advised account (in the amount identified on the signature pages hereto), and shall not apply to
(or be deemed to be made in relation to) any Claims that may be beneficially owned by other accounts that are managed or advised by such investment manager. The Parties further acknowledge and agree that all representations, warranties,
covenants, and other agreements made by any Supporting Creditor that is an investment advisor, sub-advisor, or manager of managed accounts are being made solely in such Supporting Creditors capacity as
an investment advisor, sub-advisor, or manager to the beneficial owners of the Claims specified on the applicable signature pages hereto (in the amount identified on such signature pages) and shall not apply
to (or be deemed to be made in relation to) such investment advisor, sub-advisor, or manager in any other capacity, including in its capacity as an investment advisor,
sub-advisor, or manager of other managed accounts. Notwithstanding the foregoing, and in accordance with Sections 7.8 and 12.19 hereof, each Supporting Creditor (in the capacity in which it signs
in accordance with this footnote) shall be bound to this Agreement on account of all Claims set forth on its signature page hereto. |
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WHEREAS, the Parties have agreed to take certain actions in support of the Plan and
the Restructuring Transactions on the terms and conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of
the covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each Party, intending to be legally bound hereby, agrees as follows:
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AGREEMENT
1. Definitions and Interpretation.
1.1. Definitions. The following terms shall have the following definitions:
Affiliate means, with respect to any specified Entity, any other Entity directly or indirectly controlling or
controlled by or under direct or indirect common control with such specified Entity. For purposes of this definition, control (including, with correlative meanings, the terms controlling, controlled by, and
under common control with), as used with respect to any Entity, shall mean the possession, directly or indirectly, of the right or power to direct or cause the direction of the management or policies of such Entity, whether through the
ownership of voting securities, by agreement, or otherwise.
Agreement has the meaning set forth in the preamble
to this Agreement and, for the avoidance of doubt, includes all exhibits, annexes, and schedules attached to this Agreement in accordance with Section 12.2 hereof.
Agreement Effective Date means the date on which the conditions set forth in Section 2 hereof have been
satisfied or waived by the appropriate Party or Parties in accordance with this Agreement; provided that the Agreement Effective Date with respect to any Supporting Party that becomes party to this Agreement through execution of a Joinder
shall be the date that such Supporting Party executes such Joinder.
Agreement Effective Period means, with
respect to a Party, the period from the Agreement Effective Date to the Termination Date applicable to that Party.
Alternative Restructuring Proposal means any plan, inquiry, proposal, offer, bid, term sheet, discussion, or
agreement (in each case whether oral or written) with respect to (a) a sale, disposition, new-money investment, restructuring, reorganization, merger, amalgamation, restart, acquisition, consolidation,
dissolution, debt investment, equity investment, liquidation, asset sale, share issuance, tender offer, recapitalization, plan of reorganization, share exchange, business combination, joint venture, debt incurrence (including, without limitation,
any debtor-in-possession financing or exit financing) or similar transaction involving the Debtor or the debt, equity, or other interests in the Debtor that in each case
is not expressly contemplated by this Agreement or (b) any other transaction involving the Debtor that is an alternative to or inconsistent in any respect with one or more of the Restructuring Transactions.
Avoidance Actions means any and all actual or potential avoidance, recovery, subordination, or other Claims, causes
of action, or remedies that may be brought by or on behalf of the Debtor, its estate, or other parties in interest under sections 502, 510, 542, 544, 545, 547 through 553, and 724(a) or other applicable sections of the Bankruptcy Code or under
similar or related local, state, federal, or foreign statutes and common law, including fraudulent transfer laws.
Bankruptcy
Code has the meaning set forth in the recitals to this Agreement.
Bankruptcy Court has the
meaning set forth in the recitals to this Agreement.
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Bankruptcy Rules means the Federal Rules of Bankruptcy Procedure
promulgated under title 28 of the United States Code, 28 U.S.C. § 2075, and the general, local, and chambers rules of the Bankruptcy Court, as may be amended from time to time.
Chapter 11 Case has the meaning set forth in the recitals to this Agreement.
Claim means, with respect to the Debtor, the meaning ascribed to it in section 101(5) of the Bankruptcy Code.
Solely for purposes of this Agreement, Claims shall include claims and interests in respect of the Preferred Equity of the Debtor.
Debtor has the meaning set forth in the preamble to this Agreement.
Debtor Related Party means each of, and in each case in its capacity as such, the Debtors current and former
directors, managers, officers, committee members, members of any governing body, equity holders (regardless of whether such interests are held directly or indirectly), affiliated investment funds or investment vehicles, managed accounts or funds,
predecessors, participants, successors, assigns, subsidiaries, affiliates, partners, limited partners, general partners, principals, members, management companies, fund advisors or managers, employees, agents, trustees, advisory board members,
financial advisors, attorneys (including any other attorneys or professionals retained by any current or former director or manager in his or her capacity as director or manager of an Entity), accountants, investment bankers, consultants,
representatives, and other professionals and advisors and any such Persons or Entitys respective heirs, executors, estates, and nominees.
Debtor Related Party Claims means all claims and Causes of Action of the Debtor against a Debtor Related Party.
Definitive Documents means all of the definitive documents, instruments, deeds, notifications, agreements and
filings related to the documentation, implementation and consummation of the Restructuring Transactions, including those set forth in Section 3 hereof and in each case as approved by the applicable Parties in accordance with
Section 3 hereof.
Disclosure Statement means the disclosure statement with respect to the Plan and
any exhibits and schedules thereto.
Execution Date has the meaning set forth in the preamble to this Agreement.
FDIC means the Federal Deposit Insurance Corporation.
FDIC Claims means all claims and Causes of Action of the Debtor against the FDIC,
FDIC-R1, FDIC-R2 and/or FDIC-C, including but not limited to (a) claims asserted in each of the proofs of claim filed with FDIC-R1 and FDIC-R2, (b) claims asserted in the payment demand letter to the FDIC-C dated June 26, 2023, (c) claims asserted in
the complaint filed in that certain adversary proceeding commenced as case number 23-01137 before the Bankruptcy Court and subsequently pending before the United States District Court for the Southern District
of New York as case number 23-cv-7218 and (d) claims asserted in the complaint filed by the Debtor against the FDIC-C in the
United States District Court for the Northern District of California on or about December 19, 2023, under case number 23-cv-6543, in each case including claims for
interest, penalties, fees, and expenses.
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Individual Supporting Creditor Termination Event means
(a) the execution or filing of any Definitive Document in which any of the following terms is not acceptable to the terminating Supporting Creditor: (i) the tax structuring of the Restructuring and each Restructuring Transaction,
including, without limitation in respect of the formation of, capitalization of, and distribution of assets between NewCo and the Liquidating Trust; (ii) terms of NewCo Debt; (iii) terms of a NewCo Transaction; (iv) amount and terms
of the GUC Cash-Out; (v) corporate governance for NewCo and the Liquidating Trust; and (vi) the valuation of NewCo Common Stock, as reflected in the liquidation preference of the Class A Trust
Units or (b) this Agreement (including the Restructuring Term Sheet as of the date hereof) is amended, restated or otherwise modified in a manner that negatively affects the economic recovery of an individual Supporting Ad Hoc Group of Senior
Noteholder Member including, but not limited, to (i) provide that the principal amount of the NewCo Debt shall be established in a manner inconsistent with the Restructuring Term Sheet as of the date hereof; (ii) provide that the
distribution preference of the Class A Trust Units shall be established in a manner inconsistent with the Restructuring Term Sheet as of the date hereof; (iii) amend the rate of accretion with respect to the Class A Trust Units; or
(iv) reduce the percentage of NewCo Common Stock distributed ratably to all holders of General Unsecured Claims, unless, in the case of each of (a) and (b), that such Definitive Document or amendment is acceptable to holders of 90% in
amount of Senior Notes held by all Supporting Creditors that are members of the Ad Hoc Group of Senior Noteholders at such time.
Joinder means a joinder to this Agreement substantially in the form attached to this Agreement as
Exhibit C.
Material Contracts means contracts, agreements, documents, deeds, filings,
notifications, letters, or instruments to sell, dispose of, or otherwise dispense with any material assets, incur any indebtedness for borrowed money, adopt any new key employee incentive plan, key employee retention plan, or similar arrangement or
any new or amended agreement regarding executive compensation, or conduct any transaction (including, for the avoidance of doubt, any transaction in respect of MoffettNathanson and SVB Capital) outside of the ordinary course of business (regardless
of whether the Debtor has received the Bankruptcy Courts authorization to conduct such transaction).
Milestones has the meaning set forth in Section 4.1 hereof.
New Governance Documents means all documents, agreements, and disclosures concerning, or relating to the formation,
capitalization, administration or governance of, or to the contribution or distribution of assets to, NewCo, the Liquidating Trust, any of their respective subsidiaries, or the wind down of the Debtors estate, which may include any form of
certificate or articles of incorporation, bylaws, limited liability company agreement, partnership agreement, shareholders agreement, trust agreement, and such other applicable formation, capitalization, contribution, organizational,
administrative, and governance documents (if any) of NewCo or the Liquidating Trust, the material terms of which shall be included in the Plan Supplement. For the avoidance of doubt, New Governance Documents shall include all documents, agreements,
and disclosures concerning, or relating to, the allocation or scope of Retained Debtor Assets and Contributed Assets.
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NewCo means the newly-formed Delaware corporation (or other
business form agreed by the Debtor, Creditors Committee, and Required Ad Hoc Senior Noteholder Parties) resulting from the Debtors F reorganization which shall own 100% of the equity interests in the Debtor.
Official Committee means the statutory committee of unsecured creditors appointed pursuant to section 1102 of the
Bankruptcy Code by the office of the United States Trustee in this Chapter 11 Case on March 28, 2023, as may be reconstituted from time to time, solely in such capacity.
Outside Date means May 31, 2024 or such later date as is contemplated by a Plan that satisfies the requirements
of Section 3.2 and is the subject of a Confirmation Order that has been entered and become final and non-appealable.
Parties has the meaning set forth in the preamble to this Agreement.
Person means any natural person, corporation, limited liability company, professional association, limited
partnership, general partnership, joint stock company, joint venture, association, company, trust, bank, trust company, land trust, business trust or other organization, whether or not a legal entity, and any governmental authority.
Petition Date has the meaning set forth in the recitals to this Agreement.
Plan means the plan of reorganization, including any exhibits and schedules thereto, to be filed by the Debtor under
chapter 11 of the Bankruptcy Code that embodies the Restructuring Transactions, as may be amended, supplemented, or otherwise modified in accordance with the terms set forth herein.
Plan Effective Date means the first Business Day after (a) the Confirmation Order has been entered by the
Bankruptcy Court, (b) all conditions precedent to the effectiveness of the Plan have been satisfied or are expressly waived in accordance with the terms of this Agreement and the Plan, as the case may be, (c) the transactions to occur on
the Plan Effective Date pursuant to the Plan become effective or are consummated, and (d) the substantial consummation (as defined in section 1101 of the Bankruptcy Code) of the Plan occurs.
Plan Supplement means the compilation of documents and forms of documents, agreements, schedules, and exhibits to
the Plan that may be filed by the Debtor with the Bankruptcy Court, including, without limitation, the New Governance Documents, NewCo Debt Documents, and Restructuring Steps Memorandum.
Professional Fee Reimbursement Motion means a motion filed by the Debtor seeking entry of a Professional Fee
Reimbursement Order.
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Professional Fee Reimbursement Order means an order of the
Bankruptcy Court (in form and substance acceptable to the Required Ad Hoc Senior Noteholder Parties and the Official Committee) that is not stayed, under Bankruptcy Rule 6004(h) or otherwise, and that authorizes the Debtor to pay reasonable
Professional Fees and Expenses, Senior Note Trustee Expenses and Subordinated Note Trustee Expenses, which shall include, for the avoidance of doubt, the authority to pay such fees and expenses on both an accrued and ongoing basis without further
order of the Bankruptcy Court; provided, that the Senior Noteholder Professionals, the Senior Note Trustee and the Subordinated Note Trustee shall submit copies of invoices for such fees and expenses to counsel to the Debtor and counsel to
the Official Committee.
Qualified Marketmaker means an entity that (a) holds itself out to the public or
the applicable private markets as standing ready in the ordinary course of business to purchase from customers and sell to customers Claims (or enter with customers into long and short positions in Claims), in its capacity as a dealer or market
maker in Claims and (b) is, in fact, regularly in the business of making a market in claims against issuers or borrowers (including debt securities or other debt).
Restructuring Steps Memorandum means a document, to be included in the Plan Supplement, which shall be in form and
substance acceptable to the Debtor, the Required Ad Hoc Senior Noteholder Parties, and the Official Committee, that sets forth the material components of the Restructuring Transactions and a description of the steps to be carried out to effectuate
the Restructuring Transactions in accordance with the Plan, including the reorganization of the Debtor and the formation of NewCo and the Liquidating Trust.
Restructuring Term Sheet has the meaning set forth in the recitals to this Agreement.
Restructuring Transactions has the meaning set forth in the recitals to this Agreement.
Securities Rules means Rule 501(a)(1), (2), (3), and (7) of Regulation D under the Securities Act.
Solicitation Commencement Date means the date by which the Debtor shall have commenced solicitation of votes to
accept or reject the Plan.
Solicitation Materials means all solicitation materials in respect of the Plan.
Specified Claims means, collectively, the Debtor Related Party Claims and the FDIC Claims.
Supporting Ad Hoc Group of Senior Noteholder Members has the meaning set forth in the preamble to this Agreement.
Supporting Creditors has the meaning set forth in the preamble to this Agreement.
Supporting Parties has the meaning set forth in the preamble to this Agreement.
Termination Date means the date on which termination of this Agreement as to a Party is effective in accordance with
Sections 10.1, 10.2, 10.3, and 10.4 hereof.
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Transfer means to sell, resell, reallocate, use, pledge, assign,
transfer, hypothecate, participate, donate, or otherwise encumber or dispose of, directly or indirectly (including through derivatives, options, swaps, pledges, forward sales, or other transactions); provided that any pledge in favor of
(a) a bank or broker dealer at which a Supporting Creditor maintains an account, where such bank or broker dealer holds a security interest or other encumbrance over property in the account generally, or (b) any lender, agent, or trustee
to secure obligations generally under debt issued by the applicable fund or account, in each case, shall not be deemed a Transfer for any purposes hereunder so long as such pledge does not result in the inability of the applicable
Supporting Creditor granting such pledge to vote its Claims to accept the Plan.
Transfer Agreement means an
executed transfer agreement providing, among other things, that a transferee is bound by the terms of this Agreement and substantially in the form attached to this Agreement as Exhibit B.
United States Trustee means the Office of the United States Trustee for the Southern District of New York.
1.2. Capitalized terms used but not defined herein shall have the meanings given to them in the Restructuring Term Sheet.
1.3. Interpretation. For purposes of this Agreement:
(a) in the appropriate context, each term, whether stated in the singular or the plural, shall include both the singular and the plural, and
pronouns stated in the masculine, feminine, or neutral gender shall include the masculine, feminine, and the neutral gender;
(b)
capitalized terms defined only in the plural or singular form shall nonetheless have their defined meanings when used in the opposite form;
(c) unless otherwise specified, any reference in this Agreement to a contract, lease, instrument, release, indenture, or other agreement or
document being in a particular form or on particular terms and conditions means that such document shall be substantially in such form or substantially on such terms and conditions;
(d) unless otherwise specified, any reference in this Agreement to an existing document, schedule, or exhibit shall mean such document,
schedule, or exhibit, as it may have been or may be amended, restated, supplemented, or otherwise modified from time to time; notwithstanding the foregoing, any capitalized terms in this Agreement that are defined with reference to another agreement
are defined with reference to such other agreement as of the date of this Agreement, without giving effect to any termination of such other agreement or amendments to such capitalized terms in any such other agreement following the date of this
Agreement;
(e) unless otherwise specified in this Agreement, the provisions of rule 9006(a) of the Federal Rules of Bankruptcy Procedure
shall apply in computing any period of time prescribed or allowed herein. If any payment, distribution, act or deadline under the Plan is required to be made or performed or occurs on a day that is not a Business Day, then the making of such payment
or distribution, the performance of such act, or the occurrence of such deadline shall be deemed to be on the next succeeding Business Day, but shall be deemed to have been completed or to have occurred as of the required date.
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(f) unless otherwise specified, all references in this Agreement to Sections are
references to Sections of this Agreement;
(g) the words herein, hereof, and hereto refer to this
Agreement in its entirety rather than to any particular portion of this Agreement;
(h) captions and headings to Sections are inserted for
convenience of reference only and are not intended to be a part of or to affect the interpretation of this Agreement;
(i) references to
shareholders, directors, and/or officers shall also include members and/or managers, as applicable, as such terms are defined under the applicable limited liability company Laws;
(j) the use of include or including is without limitation, whether stated or not;
(k) all references to $ and dollars will be deemed to refer to United States currency unless otherwise specifically
provided;
(l) the word or shall not be exclusive;
(m) the phrase counsel to the Debtor refers in this Agreement to counsel specified in Section 12.10;
(n) the phrase counsel to the Ad Hoc Group of Senior Noteholders refers in this Agreement to counsel specified in
Section 12.10; and
(o) the phrase counsel to the Official Committee refers in this Agreement to counsel specified
in Section 12.10.
2. Effectiveness of this Agreement. This Agreement
shall become effective and binding upon each of the Parties on the Agreement Effective Date, which is the time and date on which all of the following conditions have been satisfied or waived in accordance with this Agreement:
(a) the Debtor shall have executed and delivered counterpart signature pages of this Agreement to counsel to (i) the Ad Hoc Group of
Senior Noteholders and (ii) the Official Committee;
(b) the following shall have executed and delivered counterpart signature pages
of this Agreement:
(i) holders of more than 45.7% of the aggregate outstanding principal amount of the Senior Notes; and
(ii) the Official Committee; and
(c) counsel to the Debtor shall have given notice to counsel to (i) the Ad Hoc Group of Senior Noteholders and (ii) the Official
Committee in the manner set forth in Section 12.10 hereof (by email or otherwise) that the other conditions to the Agreement Effective Date set forth in this Section 2 have occurred.
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3. Definitive Documents.
3.1. The Definitive Documents implementing the Restructuring Transactions shall include the following (in each case, and any order, or
amendment or modification of any order, entered by the Bankruptcy Court related to the below items):
(a) the Plan (including, for the
avoidance of doubt, all exhibits and schedules attached thereto), including any Definitive Documents as defined therein and not explicitly so defined herein;
(b) the Disclosure Statement;
(c) the Plan Supplement;
(d) the
Solicitation Materials and all ballots, solicitation procedures and other documents and instruments related thereto;
(e) the Disclosure
Statement Order and the order of the Bankruptcy Court approving the Solicitation Materials;
(f) the Confirmation Order and any pleadings
in support of entry thereof;
(g) the New Governance Documents;
(h) the NewCo Debt Documents;
(i) Material Contracts;
(j) any
agreements, documents, motions, pleadings, briefs, applications, orders, and other filings with the Bankruptcy Court prior to the Plan Effective Date related to the Restructuring Transactions, NewCo, the Liquidating Trust, or any of their
subsidiaries;
(k) any other material agreements, documents, motions, pleadings, briefs, applications, orders, and other filings with the
Bankruptcy Court related to the Debtor, NewCo, the Liquidating Trust or implementing the Restructuring Transactions; and
(l) documentation
related to any equity or debt investment or offering with respect to NewCo, the Debtor or any of their subsidiaries in accordance with the Restructuring Term Sheet (including, for the avoidance of doubt, any agreements, documents, motions,
pleadings, briefs, applications, orders, and other filings in respect of any NewCo Transaction).
3.2. The Definitive Documents not
executed or in a form attached to this Agreement as of the Execution Date remain subject to negotiation and completion. Upon completion, the Definitive Documents and every other document, deed, agreement, filing, notification, letter, or instrument
related to the Restructuring Transactions shall contain terms, conditions, representations, warranties, and covenants consistent with the terms of this Agreement (as it may be modified, amended, or supplemented in accordance with
Section 11) and shall be in form and substance acceptable in all respects to the Debtor, the Required Ad Hoc Senior Noteholder Parties, and the Official Committee.
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3.3. In the event that a Definitive Document fails to satisfy the requirements of the
foregoing paragraph, any covenants, commitments, or obligations of any Party with respect to supporting or performing obligations thereunder such Definitive Document shall be null and void and of no force and effect, and any Milestone with respect
to such Definitive Document shall not be satisfied, until such time as such Definitive Document satisfies such requirements.
4. Milestones.
4.1. The Debtor shall implement the Restructuring Transactions in accordance with the following milestones (which, to the extent such date
(including any extension thereof) does not consist of a date certain, shall be calculated under Rule 9006 of the Bankruptcy Rules) unless extended or waived in writing by (a) the Debtor, (b) the Required Ad Hoc Senior Noteholder Parties,
and (c) the Official Committee, subject in each case to the Bankruptcy Courts availability (the Milestones):
(a) No later than January 26, 2024, the Debtor shall have filed (i) the Disclosure Statement and the Plan, (ii) a motion seeking
entry of the Disclosure Statement Order, and (iii) the Professional Fee Reimbursement Motion;
(b) No later than 14 days after the
Agreement Effective Date, holders of more than two-thirds (2/3) of the aggregate outstanding principal amount of the Senior Notes shall have become party to this Agreement (the Noteholder
Condition);
(c) No later than March 1, 2024, the Bankruptcy Court shall have entered the Professional Fee Reimbursement
Order;
(d) No later than 55 days after the Agreement Effective Date, the Bankruptcy Court shall have entered the Disclosure Statement
Order;
(e) No later than 91 days after the Agreement Effective Date, the Bankruptcy Court shall have entered the Confirmation Order; and
(f) No later than 105 days after the Agreement Effective Date, or such later date as may be reasonably agreed among the Debtor, the
Required Ad Hoc Senior Noteholder Parties and the Official Committee, the Plan Effective Date shall have occurred.
5.
Commitments of the Supporting Parties.
5.1. Supporting Creditors
Affirmative Commitments. During the Agreement Effective Period, subject to the terms and conditions of this Agreement, each of the Supporting Creditors severally, and not jointly, agrees to:
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(a) use commercially reasonable efforts to support the consummation and implementation of
the Restructuring Transactions, in accordance with the terms, conditions, and applicable deadlines set forth in this Agreement and the Definitive Documents, as applicable;
(b) negotiate in good faith and use commercially reasonable efforts to support the timely execution, approval, and implementation of the
Definitive Documents; and
(c) cooperate with and assist the other Parties in obtaining additional support for the Restructuring
Transactions from other stakeholders and consult with the Debtor regarding the status and the material terms of any negotiations with other stakeholders that are not party to this Agreement (including, for the avoidance of doubt, giving the Debtor
notice and a reasonable opportunity to coordinate with the other Parties in advance of any outreach or communications to stakeholders that are not party to this Agreement).
5.2. Supporting Creditors Negative Commitments. During the Agreement Effective Period, subject to the terms and
conditions of this Agreement, each Supporting Creditor severally, and not jointly, agrees that it shall not, directly or indirectly, and shall not direct any other Person to:
(a) object to, impede, or take any other action to interfere with the acceptance, implementation, or consummation of the Restructuring
Transactions;
(b) knowingly pursue, propose, file, support, solicit support for, or vote for any Alternative Restructuring Proposal; or
(c) file any motion, pleading, or other document with the Bankruptcy Court or any other court (including any modifications or amendments
thereof) that is inconsistent in any material respect with this Agreement, the Plan, or the Restructuring Transactions (it being understood, for the avoidance of doubt, that any litigation or proceeding to enforce this Agreement or any Definitive
Document shall not be construed to be inconsistent with this Agreement, the Plan, or the Restructuring Transactions).
5.3. Supporting
Creditors Commitments with Respect to Chapter 11 Case.
(a) During the Agreement Effective Period, subject to the terms and
conditions of this Agreement, each Supporting Creditor that is entitled to vote to accept or reject the Plan, severally, and not jointly, agrees that it shall, subject to the receipt of the Solicitation Materials following approval by the Bankruptcy
Court pursuant to section 1125 of the Bankruptcy Code:
(i) vote on a timely basis each of its Claims against the Debtor to accept the
Plan by delivering its duly executed and completed ballot accepting the Plan on a timely basis following the Solicitation Commencement Date and its actual receipt of the Solicitation Materials;
(ii) to the extent it is permitted to elect whether to opt out of the third-party releases set forth in the Plan, elect not to opt out of such
third-party releases set forth in the Plan by timely delivering its duly executed and completed ballot(s) designating that it does not opt out of the releases; and
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(iii) not change, withdraw, amend, or revoke (or cause to be changed, withdrawn, amended,
or revoked) any vote or election referred to in clauses (a)(i) and (a)(ii) above; provided that such vote or election may be revoked or withdrawn (and, upon such revocation or withdrawal, deemed void ab initio) in accordance with
Section 10.5 of this Agreement by such Supporting Creditor at any time if this Agreement is terminated with respect to such Supporting Creditor.
(b) During the Agreement Effective Period, each Supporting Creditor, severally, and not jointly, agrees that it shall not, directly or
indirectly, and shall not direct any other Entity to seek, solicit, propose, support, assist, engage in negotiations in connection with, or participate in the formulation, preparation, filing, or prosecution of any Alternative Restructuring Proposal
or object to or take any other action that would reasonably be expected to prevent, interfere with, delay, or impede the solicitation, the approval of the Disclosure Statement, or the confirmation and consummation of the Plan and the Restructuring
Transactions; provided that nothing in this Section 5.3(b) shall (a) affect any rights of the Debtor set forth in Section 6.4(b) hereof, (b) affect any rights of the Official
Committee set forth in Section 5.4(e) hereof, or (c) prevent any Party from negotiating or making proposals related to a NewCo Transaction.
5.4. Covenants and Conditions with Respect to the Official Committee
(a) Affirmative Covenants. During the Agreement Effective Period, the Official Committee agrees to:
(i) support the Restructuring Transactions and take all steps reasonably necessary and desirable to support, facilitate, implement,
consummate, or otherwise give effect to the Restructuring Transactions in accordance with this Agreement, including by preparing a letter to be included in the Solicitation Materials in which the Official Committee recommends that all unsecured
creditors support and vote in favor of the Plan;
(ii) negotiate in good faith and use commercially reasonable efforts to support the
timely execution and implementation of Definitive Documents consistent with Section 3.3;
(iii) negotiate in
good faith upon reasonable request of any other Party any modifications to the Restructuring Transactions that are necessary to satisfy any conditions to, or address any legal, financial, or structural impediment that may prevent, hinder, impede or
delay, the consummation of the Restructuring Transactions; and
(iv) use commercially reasonable efforts to cooperate with and assist the
Debtor in obtaining additional support for the Restructuring Transactions from the Debtors other stakeholders.
(b) During the
Agreement Effective Period, the Official Committee agrees that it shall not, directly or indirectly, and shall not direct any other Person to:
(i) object to, delay, impede, or take any other action to interfere with acceptance, implementation, or consummation of the Restructuring
Transactions;
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(ii) take any action that is inconsistent in any material respect with, or is intended to
frustrate or impede approval, implementation, or consummation of the Restructuring Transactions or the Plan; or
(iii) file any motion,
pleading, or other document with the Bankruptcy Court or any other court (including any modifications or amendments thereof) that, in whole or in part, is inconsistent with this Agreement, the Plan, or the Restructuring Transactions.
(c) Notwithstanding anything to the contrary in this Agreement, nothing in this Agreement shall require the Official Committee to take or
refrain from taking any action (including terminating this Agreement under Section 10 hereof) to the extent the Official Committee determines, based on the advice of counsel, that taking or refraining from taking such
action, as applicable, would be inconsistent with applicable Law or its fiduciary obligations under applicable Law. The Official Committee shall give prompt written notice (in each case, no later than one (1) Business Day) to counsel to each of
the Debtor and the Ad Hoc Group of Senior Noteholders of any determination made in accordance with this Section 5.4(c). This Section 5.4(c) shall not impede any Partys right to terminate this
Agreement pursuant to Section 10 hereof.
(d) Notwithstanding anything to the contrary in this Agreement, nothing
in this Agreement shall impair or waive the rights of the Official Committee to assert or raise any objection or other position not inconsistent with this Agreement or in accordance with its fiduciary obligations under applicable Law in connection
with the implementation of the Restructuring Transactions or otherwise.
(e) Notwithstanding anything to the contrary in this Agreement,
upon receipt of an Alternative Restructuring Proposal, the Official Committee and its advisors or representatives shall have the right to consider, consistent with their fiduciary duties, such Alternative Restructuring Proposal. If the Official
Committee or its advisors or representatives receive an Alternative Restructuring Proposal (whether oral or in writing), then the Official Committee shall, within one (1) Business Day of receiving such proposal, provide counsel to the
Supporting Parties with all documentation received in connection with such Alternative Restructuring Proposal (or, if such proposal was not made in writing, a reasonably detailed summary of such proposal), including the identity of the Person or
group of Persons involved and reasonable updates as to the status and progress of such Alternative Restructuring Proposal, and the Official Committee shall respond promptly to reasonable information requests and questions from counsel to the
Supporting Parties relating to such Alternative Restructuring Proposal
5.5. Additional Provisions Regarding the Supporting
Parties Commitments. Notwithstanding anything contained in this Agreement, nothing in this Agreement shall:
(a)
impair or waive the rights of any Supporting Party to appear as a party in interest in any matter to be adjudicated in this Chapter 11 Case and to object to any relief sought by the Debtor or any other Supporting Party, so long as such appearance
and the positions advocated in connection therewith are not inconsistent in any material respect with this Agreement;
(b) affect the
ability of any Supporting Party to consult with any other party in interest in the Chapter 11 Case (including the United States Trustee), so long as, in the case of consultation with any party in interest, the appearance and positions advocated in
connection therewith are not inconsistent in any material respect with this Agreement;
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(c) impair or waive the rights of any Supporting Party to assert or raise any objection
permitted under this Agreement or the Definitive Documents in connection with the Restructuring Transactions;
(d) prevent any Supporting
Party from enforcing this Agreement or any Definitive Document, or contesting whether any matter, fact, or thing is a breach of, or is inconsistent with, this Agreement or the Definitive Documents, or from exercising its rights or remedies reserved
herein or in the Definitive Documents;
(e) from and after the Termination Date as to a Supporting Creditor, obligate such Supporting
Creditor that is entitled to vote on the Plan to deliver a vote to support the Plan or prohibit a Supporting Creditor from withdrawing or changing such vote;
(f) prevent any Supporting Party from taking any action which is required by applicable Law;
(g) require any Supporting Party to take any action which is prohibited by applicable Law or to waive or forego the benefit of any applicable
legal or professional privilege;
(h) unless provided for under this Agreement, require any Supporting Party to incur any expenses,
liabilities, or other obligations, or agree to any commitments, undertakings, concessions, indemnities, or other arrangements that could result in expenses, liabilities, or other obligations;
(i) prevent any Supporting Party by reason of this Agreement or the Restructuring Transactions from making, seeking, or receiving any
regulatory filings, notifications, consents, determinations, authorizations, permits, approvals, licenses, or the like;
(j) prohibit any
Supporting Party from taking any action that is not inconsistent in any material respect with this Agreement; or
(k) require any
Supporting Party to provide any information that it determines, in its sole discretion, to be commercially sensitive or confidential.
6. Commitments
of the Debtor.
6.1. Affirmative Commitments. Except as set forth in Section 6.3 hereof, during
the Agreement Effective Period, the Debtor agrees to:
(a) support the Restructuring Transactions, act in good faith, take all actions
reasonably necessary and desirable to implement and consummate the Restructuring Transactions in accordance with the terms, conditions, and Milestones set forth in this Agreement and the Definitive Documents, as applicable;
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(b) support and take all steps reasonably necessary and desirable to facilitate solicitation
of the Plan in accordance with this Agreement and the Milestones set forth herein;
(c) to the extent any legal or structural impediment
arises that would prevent, hinder, or delay the consummation of the Restructuring Transactions contemplated in this Agreement, support and take all steps reasonably necessary and desirable to address any such impediment, including to negotiate in
good faith appropriate additional or alternative provisions to address any such impediment, in each case in a manner reasonably acceptable to the Required Ad Hoc Senior Noteholder Parties and the Official Committee;
(d) provide, and direct its employees, officers, advisors, and other representatives to provide to the Ad Hoc Group of Senior Noteholders and
the Official Committee and their respective professionals, subject in each case to applicable confidentiality agreements with the Debtor, (i) reasonable access to the Debtors books and records on reasonable advance notice to the
Debtors representatives and without disruption to the operation of the Debtors business, (ii) reasonable access to the management and advisors of the Debtor on reasonable advance notice to such persons and without disruption to the
operation of the Debtors business, and (iii) timely and reasonable responses to all diligence requests;
(e) use commercially
reasonably efforts to obtain any and all required governmental, regulatory, and/or third-party approvals or consents that are necessary or advisable for the implementation or consummation of the Restructuring Transactions;
(f) negotiate in good faith and use commercially reasonable efforts to execute and deliver, and perform its obligations under, the
Definitive Documents and any other agreements required to effectuate and consummate the Restructuring Transactions, as contemplated by this Agreement;
(g) operate the businesses of the Debtor in the ordinary course (other than changes in the operations resulting from or relating to the
Restructuring Transactions) and consistent with past practice and in a manner that is consistent in every material respect with this Agreement and the business plan of the Debtor;
(h) provide counsel to each of the Ad Hoc Group of Senior Noteholders and the Official Committee draft copies of all Definitive Documents that
the Debtor intends to file with the Bankruptcy Court as soon as reasonably practicable, but in no event less than three (3) Business Days prior to such filing;
(i) actively oppose and object to the efforts of any Person seeking to object to, delay, impede, or take any other action to interfere with the
acceptance, implementation, or consummation of the Restructuring Transactions (including, if applicable, the filing of timely filed objections or written responses) to the extent such opposition or objection is reasonably necessary or desirable to
facilitate implementation of the Restructuring Transactions;
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(j) timely file a formal objection to any motion filed with the Bankruptcy Court by any
Person seeking the entry of an order (i) directing the appointment of a trustee or examiner (with expanded powers beyond those set forth in sections 1106(a)(3) and (4) of the Bankruptcy Code); (ii) converting the Chapter 11 Case to a case
under chapter 7 of the Bankruptcy Code; (iii) dismissing the Chapter 11 Case; (iv) modifying or terminating the Debtors exclusive right to file and solicit acceptances of a plan of reorganization; or (v) for relief that
(A) is inconsistent with this Agreement in any respect or (B) would, or would reasonably be expected to, frustrate the purposes of this Agreement, including by preventing the consummation of the Restructuring Transactions;
(k) take all actions reasonably necessary and proper to prosecute and defend any appeals of the Confirmation Order;
(l) comply with all Milestones;
(m) promptly (but in any event within two (2) Business Days) notify counsel to each of the Ad Hoc Group of Senior Noteholders and the
Official Committee in writing of the occurrence, or failure to occur, of any event of which the Debtor has actual knowledge and which such occurrence or failure would likely cause (x) any representation of the Debtor contained in this Agreement
to be untrue or inaccurate in any material respect, (y) any covenant of the Debtor contained in this Agreement not to be satisfied in any material respect, or (z) any condition precedent contained in the Plan related to the obligations of
the Debtor not to occur or become impossible to satisfy;
(n) promptly (but in any event within three (3) Business Days) notify
counsel to each of the Ad Hoc Group of Senior Noteholders and the Official Committee in writing of the issuance by any governmental authority, including any regulatory authority or court of competent jurisdiction, of any final, non-appealable ruling or order that would reasonably be expected to prevent the consummation of a material portion of the Restructuring Transactions;
(o) maintain its and its subsidiaries good standing under the Laws of each state or other jurisdiction in which each is incorporated or
organized to the extent required in connection with the Restructuring Transactions;
(p) following entry of the Professional Fee
Reimbursement Order, promptly pay any reasonable Professional Fees and Expenses, Senior Note Trustee Expenses and Subordinated Note Trustee Expenses upon receipt of invoice(s) therefor; provided, that the Senior Noteholder Professionals, the
Senior Note Trustee and the Subordinated Note Trustee shall submit copies of invoices for such fees and expenses to counsel to the Debtor and counsel to the Official Committee;
(q) negotiate in good faith upon reasonable request of counsel to each of the Ad Hoc Group of Senior Noteholders and the Official Committee any
modifications to the Restructuring Transactions that are necessary to address any legal, financial, or structural impediment that may prevent the consummation of the Restructuring Transactions, in each case to the extent such modifications can be
implemented without any adverse effect on the Debtor;
(r) provide the Supporting Parties with any documentation or information they may
reasonably request to facilitate the Restructuring Transactions, including regarding the Debtors business operations and the status of the Restructuring Transactions, subject in all cases to applicable confidentiality agreements with the
Debtor; and
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(s) inform counsel to the Supporting Parties as soon as practicable after becoming aware of
(i) any event or circumstance that has occurred, or that is reasonably likely to occur (and if it did occur), that would permit any Party to terminate, or would result in the termination of, this Agreement; (ii) any matter or circumstance
which they know, or suspect is likely, to be a material impediment to the implementation or consummation of the Restructuring Transactions; (iii) a breach of this Agreement (including a breach by the Debtor); and (iv) any representation or
statement made or deemed to be made by the Debtor under this Agreement which is or proves to have been materially incorrect or misleading in any respect when made or deemed to be made.
6.2. Negative Commitments. Except as set forth in Section 6.3 hereof, during the Agreement Effective Period,
the Debtor shall not, directly or indirectly:
(a) object to, delay, impede, or take any other action to interfere with the acceptance,
implementation, or consummation of the Restructuring Transactions;
(b) take any action that is inconsistent in any material respect with,
or that would frustrate or impede, the approval, implementation, or consummation of the Restructuring Transactions described in this Agreement, the Plan, or the Definitive Documents;
(c) file any motion, pleading, or Definitive Document with the Bankruptcy Court or any other court (including any modifications or amendments
thereof) that, in whole or in part, is inconsistent with this Agreement, the Plan, or the Restructuring Transactions;
(d) amend,
terminate, alter, supplement, restate, or otherwise modify any Definitive Document, in whole or in part, in a manner that is inconsistent with this Agreement, the Plan, or the Restructuring Transactions;
(e) make or change any tax election, change any annual tax accounting period, adopt or change any method of tax accounting, file any amended
tax return, settle any tax claim or assessment, surrender any right to claim a tax refund, offset, or other reduction in tax liability or consent to any extension or waiver of the limitation period applicable to any tax claim or assessment, in each
case (i) that is material and inconsistent with past practice except to the extent needed to comply with this Agreement, the Plan or the Restructuring Transactions, without using commercially reasonable efforts to consult in good faith with the
Required Ad Hoc Senior Noteholder Parties and the Official Committee, provided that the Debtor shall use commercially reasonable efforts to resolve any disagreements with the Required Ad Hoc Senior Noteholder Parties and/or the Official Committee
with respect to such action prior to taking such action or (ii) if inconsistent in any material respect with this Agreement, the Plan or the Restructuring Transactions, without the written consent of the Required Ad Hoc Senior Noteholder
Parties and the Official Committee (such consent not to be unreasonably withheld, conditioned, or delayed);
(f) make any tax election or
change in method of accounting that has the effect of materially accelerating or materially deferring any material item of income, loss, deduction or credit or materially increases the taxable income of the Debtor or its subsidiaries, as compared to
the tax position of the Debtor or its subsidiaries as applicable had such action not been taken, without the written consent of the Required Ad Hoc Senior Noteholder Parties and the Official Committee (such consent not to be unreasonably withheld,
conditioned, or delayed);
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(g) enter into any material closing agreement or make any written submissions to the
Internal Revenue Service for a private letter ruling from the Internal Revenue Service without the written consent of the Required Ad Hoc Senior Noteholder Parties and the Official Committee (such consent not to be unreasonably withheld,
conditioned, or delayed); or
(h) sell, dispose of, or otherwise dispense with any material assets outside of the ordinary course of
business prior to consulting with the Ad Hoc Group of Senior Noteholders and the Official Committee and providing information reasonably necessary for the Ad Hoc Group of Senior Noteholders and the Official Committee, in each case subject to
appropriate confidentiality arrangements, to meaningfully assess the request.
6.3. Specified Claims. The Debtor (i) shall
consult with the Ad Hoc Group of Senior Noteholders (through its advisors) and the Official Committee with respect to any and all actions in connection with asserting, prosecuting, or choosing not to assert or prosecute any of the Specified Claims,
including but not limited to by providing draft copies of any papers to be filed with any court or other decisionmaker or of any written communications with the FDIC-C,
FDIC-R1, FDIC-R2, or Debtor Related Party, as applicable, in either case in respect of the Specified Claims as soon as reasonably practicable before such documents are
filed or communications are sent and (ii) shall not settle any Specified Claim, commence any action in respect of any Specified Claim, or take any action in respect of any Specified Claim which would have the effect of impairing, releasing,
compromising, waiving, or adversely impacting any of the Specified Claims without the prior written consent of the Required Ad Hoc Senior Noteholder Parties and the Official Committee.
6.4. Additional Provisions Regarding Debtors Commitments.
(a) Notwithstanding anything to the contrary in this Agreement, nothing in this Agreement shall require the Debtor to take or refrain from
taking any action (including terminating this Agreement under Section 10 hereof) to the extent the Debtor determines, based on the advice of counsel, that taking or refraining from taking such action, as applicable, would
be inconsistent with applicable Law or its fiduciary obligations under applicable Law; provided that any such action that results in a termination of this Agreement in accordance with the terms hereof shall be subject to the provisions set
forth in Section 10.5 hereof. The Debtor shall give prompt written notice (in each case, no later than one (1) Business Day) to counsel to each of the Ad Hoc Group of Senior Noteholders and the Official Committee of
any determination made in accordance with this Section 6.4(a). This Section 6.4(a) shall not impede any Partys right to terminate this Agreement pursuant to
Section 10 hereof.
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(b) Notwithstanding anything to the contrary in this Agreement, upon receipt of an
Alternative Restructuring Proposal, the Debtor and its directors, managers, and advisors or representatives shall have the right to consider, consistent with their fiduciary duties, such Alternative Restructuring Proposal. If the Debtor or its
directors, managers, and advisors or representatives receive an Alternative Restructuring Proposal (whether oral or in writing), then the Debtor shall, within one (1) Business Day of receiving such proposal, provide counsel to the Supporting
Parties with all documentation received in connection with such Alternative Restructuring Proposal (or, if such proposal was not made in writing, a reasonably detailed summary of such proposal), including the identity of the Person or group of
Persons involved and reasonable updates as to the status and progress of such Alternative Restructuring Proposal, and the Debtor shall respond promptly to reasonable information requests and questions from counsel to the Supporting Parties relating
to such Alternative Restructuring Proposal.
(c) Nothing in this Agreement shall: (i) impair or waive the rights of the Debtor to
assert or raise any objection permitted under this Agreement in connection with the implementation of the Restructuring Transactions; (ii) affect the ability of the Debtor to consult with any Supporting Party or any other party in interest in
the Chapter 11 Case (including the United States Trustee); or (iii) prevent the Debtor from enforcing this Agreement or contesting whether any matter, fact, or thing is a breach of, or is inconsistent with, this Agreement.
7. Transfer of Claims.
7.1. Except
solely to the extent provided in Section 7.2 or Section 7.3 hereof, this Agreement shall not limit, restrict, or otherwise affect in any way a Supporting Creditors right, authority, or power
to Transfer any Claims, including any right, title, or interest in a Claim.
7.2. Transfer Restrictions.
(a) During the Agreement Effective Period, and subject to the terms and conditions of this Agreement, each Supporting Creditor agrees, solely
with respect to itself, as expressly identified and limited on its signature page or Joinder or Transfer Agreement, and not in any other manner or with respect to any Affiliates, not to Transfer any right, title, or interest in a Claim, unless:
(i) the authorized transferee is (1) a qualified institutional buyer as defined in Rule 144A of the Securities Act, (2) a non-U.S. person in an offshore transaction as defined under Regulation S under the Securities Act, (3) an institutional accredited investor (as defined in the Securities Rules) or (4) a Supporting
Creditor; and
(ii) the transferee (i) executes and delivers to counsel to the Debtor and counsel to the Supporting Parties in
accordance with Section 12.10 hereof a Transfer Agreement within three (3) Business Days after the date of the Transfer, so long as such Transfer Agreement was executed in accordance with this Agreement (which Transfer
Agreement shall be treated as confidential information and shall not be disclosed without the prior written consent of the Transferee) or (ii) is a Supporting Creditor and the transferee provides notice of such Transfer (including the amount
and type of Claims transferred) to counsel to the Debtor and counsel to the Supporting Parties within three (3) Business Days of the Transfer.
(b) Any Transfer in violation of this Section 7.2 or Section 7.3 hereof shall be void ab
initio.
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7.3. Qualified Marketmaker Exceptions.
(a) Notwithstanding Section 7.2 hereof, a Supporting Creditor may Transfer any right, title, or interest in its
Claims to a Person that is acting in its capacity as a Qualified Marketmaker without the requirement that the Qualified Marketmaker execute a Transfer Agreement or be a Party to this Agreement, solely to the extent that (i) such Qualified
Marketmaker subsequently transfers such Claims (by purchase, sale assignment, participation, or otherwise) within ten (10) Business Days of its acquisition to a transferee that is not an affiliate, affiliated fund, or affiliated Person with a
common investment advisor; (ii) the Transferee is otherwise a permitted Transferee under Section 7.2; and (iii) the Transfer is otherwise a permitted Transfer under Section 7.2. The
Transferee (but not, for the avoidance of doubt, a Qualified Marketmaker) shall promptly provide notice of any Transfer made pursuant to this Section 7.3(a), including the amount and type of Claims Transferred, to counsel
to the Debtor and counsel to the Supporting Parties.
(b) Notwithstanding Section 7.2 hereof, a Qualified
Marketmaker may Transfer any right, title, or interest in any Claims that it acquires from a Party to this Agreement to another Qualified Marketmaker (the Transferee Qualified Marketmaker) without the requirement that the
Transferee Qualified Marketmaker execute a Transfer Agreement or be a Party to this Agreement, solely to the extent that (i) such Qualified Marketmaker subsequently transfers such Claims (by purchase, sale assignment, participation, or
otherwise) within ten (10) Business Days of its acquisition to a transferee that is not an affiliate, affiliated fund, or affiliated Person with a common investment advisor; (ii) the Transferee is otherwise a permitted Transferee under
Section 7.2; and (iii) the Transfer is otherwise a permitted Transfer under Section 7.2. The Transferee (but not, for the avoidance of doubt, a Qualified Marketmaker) shall promptly provide
notice of any Transfer made pursuant to this Section 7.3(b), including the amount and type of Claims Transferred, to counsel to the Debtor and counsel to the Supporting Parties.
(c) At the time of a Transfer of any Claims to a Qualified Marketmaker:
(i) if such Claims may be voted in favor of the Plan, the Supporting Creditor to this Agreement must first vote such Claims in accordance with
the requirements of this Agreement; and
(ii) to the extent that a Qualified Marketmaker that is not otherwise a Supporting Creditor to
this Agreement is eligible and entitled to vote the Claims acquired pursuant to this Section 7, is not otherwise precluded from voting such Claims in favor of the Plan, and receives a separate ballot for such Claims, such
Qualified Marketmaker shall, before the expiration of the Plan voting deadline established by the Bankruptcy Court, vote such Claims in favor of the Plan as contemplated hereunder.
(d) Notwithstanding Section 7.2 hereof, to the extent that a Supporting Creditor to this Agreement is acting in its
capacity as a Qualified Marketmaker, it may Transfer any right, title, or interest in any Claim that the Qualified Marketmaker acquires from a holder of such Claim that is not a Supporting Creditor to this Agreement without the requirement that the
transferee execute a Transfer Agreement or be a Supporting Creditor hereto.
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7.4. Effect of Delivery of Transfer Agreement. By executing and delivering a Transfer
Agreement as provided in this Section 7, a Transferee:
(a) becomes and shall be treated for all purposes under
this Agreement as a Supporting Creditor to this Agreement with respect to the Transferred Claims and with respect to all other Claims that the Transferee holds and subsequently acquires, subject to Section 7.3(d) hereof;
(b) agrees to be bound by all of the terms of this Agreement (as such terms may be amended from time to time in accordance with the terms
hereof); and
(c) is deemed, without further action, to make to the other Parties hereto the representations and warranties that the
Supporting Creditors to this Agreement make in Section 8 hereof, herein in each case as of the date of the Transfer Agreement.
7.5. Effect of Transfer; No Liability. A Supporting Creditor to this Agreement that Transfers any right, title, or interest in any
Claims in accordance with the terms of this Section 7 shall (a) be deemed to relinquish its rights and be released from its obligations under this Agreement solely to the extent of such Transferred Claims and
(b) have no liability under this Agreement for the failure of the Transferee, whether or not a Qualified Marketmaker, to comply with the terms and conditions of this Agreement.
7.6. Additional Claims. This Agreement shall not limit, restrict, or otherwise affect in any way a Partys right, authority, or
power to acquire any Claims in addition to the Supporting Creditors Claims, and such acquired Claims shall automatically and immediately upon acquisition by a Supporting Creditor be deemed to be subject to the terms of this Agreement
(regardless of when or whether notice of such acquisition is given to counsel to the Debtor or counsel to the Supporting Parties), except as set forth in Section 7.2 above. During the Agreement Effective Period, upon the
written request of the Debtor, a Supporting Creditor to this Agreement that acquires additional Claims from a Person that is not a Supporting Creditor to this Agreement shall deliver a current list of its Claims to counsel for the Debtor within five
(5) Business Days after the receipt of such request, and such list shall be treated as confidential information and shall not be disclosed without the prior written consent of such Party to this Agreement.
7.7. Exception for Pending Trades. Notwithstanding anything to the contrary herein, a Claim Transferred to or by a Supporting Creditor
to this Agreement prior to the Agreement Effective Date and that is an open trade on the Agreement Effective Date shall not be subject to, or bound by, the terms and conditions of this Agreement (it being understood that such Claim so Transferred to
and held by a Party to this Agreement for its own account (i.e., not as part of a short transaction, or to be Transferred by the Supporting Creditor under an open trade or any other transaction entered into by such Supporting Creditor prior to, and
pending as of the date of, such Supporting Creditors entry into this Agreement) shall be subject to the terms of this Agreement, as provided in Section 7.2 hereof).
7.8. Signature Page Limitation. The Parties understand that the Supporting Creditors may be engaged in a wide range of financial
services and businesses, and, in furtherance of the foregoing, the Parties acknowledge and agree that, to the extent a Supporting Creditor expressly indicates on its signature page hereto or on a Joinder that it is executing this Agreement solely on
behalf of specific legal entities, investment vehicles, trading desk(s), and/or business group(s) of the Supporting Creditor, the obligations set forth in this Agreement shall apply only to such legal entities, investment vehicles, trading desk(s),
and/or business group(s) and shall not apply to any other legal entities, investment vehicles, trading desk(s), and/or business group(s) of the Supporting Creditor unless it separately becomes a party hereto.
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8. Representations and Warranties of Supporting Creditors. Each Supporting Creditor, severally
and not jointly, represents and warrants that, as of the date such Supporting Creditor executes and delivers this Agreement, a Joinder, or a Transfer Agreement:
(a) to the extent a Supporting Creditor is a holder of a Claim, it is the beneficial or record owner of the aggregate principal amount of the
Claims or is the nominee, investment manager, or advisor for beneficial holders of the Claims reflected in such Supporting Creditors signature page to this Agreement, a Joinder, or a Transfer Agreement, as applicable (as may be updated
pursuant to Section 7 hereof);
(b) to the extent a Supporting Creditor is a holder of a Claim, it has the full
power and authority to act on behalf of, and vote and consent to matters concerning, such Claims;
(c) to the extent a Supporting Creditor
is a holder of a Claim, such Claims are free and clear of any pledge, lien, security interest, charge, claim, equity, option, proxy, voting restriction, right of first refusal, lock-ups (including lock-ups in connection with a contractual transfer restriction), or other limitation on disposition, transfer, or encumbrances of any kind that would materially and adversely affect in any way such Supporting
Creditors ability to perform any of its obligations under this Agreement at the time such obligations are required to be performed;
(d) to the extent a Supporting Creditor is a holder of a Claim, it has the full power to vote, approve changes to, and Transfer all of its
Claims reflected in such Supporting Creditors signature page to this Agreement, a Joinder, or a Transfer Agreement, as applicable (as may be updated pursuant to Section 7 hereof) as contemplated by this Agreement
subject to applicable Law;
(e) it has reviewed, or had the opportunity to review, with the assistance of professional and legal advisors
of its choosing, all information it deems necessary and appropriate for it to evaluate the financial risks inherent in the Restructuring Transactions and accept the terms of this Agreement;
(f) to the extent a Supporting Creditor is binding other Parties to this Agreement, such Supporting Creditor has the full power and authority
to bind such other Parties to this Agreement; and
(g) it has knowledge and experience in financial and business matters of this type, is
capable of evaluating the merits and risks of entering into this Agreement and of making an informed investment decision, and has conducted an independent review and analysis of the business and affairs of the Debtor that it considers sufficient and
reasonable for the purposes of entering into this Agreement.
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9. Mutual Representations, Warranties, and Covenants. Each of the Parties, severally and not
jointly, represents, warrants, and covenants to each other Party that, as of the date such Party executes and delivers this Agreement, a Joinder, or a Transfer Agreement:
(a) to extent applicable, it is validly existing and in good standing under the Laws of the state of its organization, and this Agreement is a
legal, valid, and binding obligation of such Party, enforceable against it in accordance with its terms, except as enforcement may be limited by applicable Laws relating to or limiting creditors rights generally or by equitable principles
relating to enforceability;
(b) except as expressly provided in this Agreement, the Plan, and the Bankruptcy Code, no consent or approval
is required by any other Person in order for it to effectuate the Restructuring Transactions contemplated by, and perform its respective obligations under, this Agreement;
(c) to extent applicable, the entry into and performance by it of, and the transactions contemplated by, this Agreement (including the
Restructuring Transactions) do not, and will not, conflict in any material respect with any Law or regulation applicable to it or with any of its articles of association, memorandum of association, or other constitutional documents;
(d) except as expressly provided in this Agreement, it has (or will have, at the relevant time) all requisite corporate or other power and
authority to enter into, execute, and deliver this Agreement and to effectuate the Restructuring Transactions contemplated by, and perform its respective obligations under, this Agreement;
(e) except as expressly provided by this Agreement, it is not party to any restructuring or similar agreements or arrangements with the other
Parties to this Agreement that have not been disclosed to all Parties to this Agreement; and
(f) no Party is considering, or has any
agreement or understanding with respect to, any Alternative Restructuring Proposal that has not been disclosed to the Debtor and the other Supporting Parties.
10. Termination Events.
10.1.
Supporting Party Termination Events. This Agreement may be terminated by: (i) with respect to the Supporting Ad Hoc Group of Senior Noteholder Members, the Required Ad Hoc Senior Noteholder Parties; (ii) the Official
Committee solely with respect to the Official Committee; and (iii) any other Supporting Creditor party hereto from time to time solely with respect to itself and (other than with respect to the occurrence of an Individual Supporting Creditor
Termination Event or the Outside Date) solely to the extent that such event materially, adversely and disproportionately affects such Supporting Creditor; in each case by the delivery to all other Parties of a written notice in accordance with
Section 12.10 hereof upon the occurrence of one or more of the following events:
(a) the breach in any material
respect by the Debtor of any of the representations, warranties, undertakings, commitments, or covenants of the Debtor set forth in this Agreement, which breach remains uncured (to the extent curable) for five (5) Business Days after such
terminating Supporting Party transmits a written notice to the Debtor in accordance with Section 12.10 hereof detailing any such breach;
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(b) following satisfaction of the Noteholder Condition, the breach in any material respect
by any of the Supporting Creditors of any of the representations, warranties, or covenants of such Supporting Creditors set forth in this Agreement (to the extent not otherwise cured or waived within five (5) Business Days after notice of such
breach is provided in accordance with the terms hereof) solely to the extent such breach results in the Restructuring Transactions no longer having the support of at least two-thirds (2/3) of the aggregate
outstanding principal amount of each of the Senior Notes Claims; provided that the terminating party cannot have been a cause of the breach;
(c) any representation or warranty in this Agreement made by the Debtor, the Official Committee, members of Ad Hoc Senior Noteholder Parties or
any other Supporting Party shall have been untrue in any material respect when made or shall have become untrue in any material respect, which remains uncured (to the extent curable) for five (5) Business Days after the Debtor discovers the
untrue nature of the representation or warranty; provided that the terminating party cannot have been a cause of such breach;
(d)
the issuance by any governmental authority, including any regulatory authority or court of competent jurisdiction, of any final, non-appealable ruling, judgment, or order that (i) would reasonably be
expected to prevent the consummation of a material portion of the Restructuring Transactions; and (ii) either (1) such ruling, judgment or order has been issued at the request of the Debtor in contravention of any obligations set forth in this
Agreement or (2) remains in effect for ten (10) days after such terminating Supporting Party transmits a written notice to the Debtor in accordance with Section 12.10 hereof detailing any such issuance;
provided that this Agreement may not be terminated pursuant to this Section 10.1(d) by any Party that sought or requested such ruling or order in contravention of any obligation set out in this Agreement.
(e) the entry of an order by the Bankruptcy Court, or the filing of a motion or other application by the Debtor seeking an order (without the
prior written consent of the Required Ad Hoc Senior Noteholder Parties and the Official Committee):
(i) (A) directing the
appointment of a trustee or examiner (with expanded powers beyond those set forth in sections 1106(a)(3) and (4) of the Bankruptcy Code), (B) converting the Chapter 11 Case to a case under chapter 7 of the Bankruptcy Code, (C) dismissing
the Chapter 11 Case, or (D) modifying or terminating the Debtors exclusive right to file and solicit acceptances of a plan of reorganization;
(ii) (A) denying confirmation of the Plan, and the Debtor, after exercising good faith efforts to negotiate a revised Plan consistent
with the consent rights in this Agreement and obtain confirmation of the Plan, is unable to obtain such confirmation within twenty (20) Business Days thereof or (B) entering the Confirmation Order in a form not acceptable to the Required
Ad Hoc Senior Noteholder Parties and the Official Committee;
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(iii) granting relief from the automatic stay (as set forth in section 362 of the
Bankruptcy Code) authorizing any party or Person to proceed against any asset of the Debtor in excess of $25 million; or
(iv)
granting relief that is inconsistent in any material respect with this Agreement, the Definitive Documents, or the Restructuring Transactions, and (A) such motion or other application is not withdrawn by the Debtor within five (5) Business
Days after such terminating Supporting Party transmits a written notice in accordance with Section 12.10 hereof detailing any such breach or (B) such inconsistent relief is not dismissed, vacated, or modified to be
consistent with this Agreement and the Restructuring Transactions within ten (10) Business Days after such terminating Supporting Party transmits a written notice in accordance with Section 12.10 hereof detailing any
such breach;
(f) the Confirmation Order is reversed or vacated, and the Bankruptcy Court does not enter a revised Confirmation Order
reasonably acceptable to the Required Ad Hoc Senior Noteholder Parties and the Official Committee within ten (10) Business Days of such reversal or vacation;
(g) the failure to meet any of the Milestones, unless such Milestone has been waived or extended in a manner consistent with this Agreement,
unless such failure is the result of any act, omission, or delay on the part of the terminating Supporting Party in violation of its obligations under this Agreement;
(h) a Definitive Document is finalized, executed, entered into, filed or made public, or is amended or modified, in a manner that is
inconsistent with the terms of this Agreement and not approved by the applicable Supporting Parties in accordance with Section 3 and such inconsistency remains uncured (to the extent curable) for three (3) Business
Days after such terminating Supporting Party transmits a written notice in accordance with Section 12.10 hereof detailing any such breach;
(i) the date the Debtor (i) exercises its right, consistent with its fiduciary duties, to not pursue any of the Restructuring
Transactions, (ii) files, proposes, or otherwise supports any Alternative Restructuring Proposal, including by making any statements indicating intent to pursue any Alternative Restructuring Proposal, (iii) enters into a definitive
agreement with respect to an Alternative Restructuring Proposal, or (iv) takes any action in reliance on Section 6.4(a) hereof;
(j) solely with respect to the Official Committee, if (i) the Debtor terminates this Agreement pursuant to
Section 10.2 hereof, (ii) the Supporting Ad Hoc Group of Senior Noteholder Members terminate this Agreement pursuant to Section 10.1 hereof, (iii) after good faith negotiations, the
Debtor, the Official Committee, and the Required Ad Hoc Senior Noteholder Parties have not reached agreement as to the tax structuring of the Restructuring Transactions (including, for the avoidance of doubt, the formation of the Liquidating Trust
and the scope of Retained Debtor Assets and Contributed Assets) by February 9, 2024, (iv) the claims asserted by the Internal Revenue Service are resolved in a manner not reasonably acceptable to the Official Committee or are estimated by the
Bankruptcy Court at an amount not reasonably acceptable to the Official Committee for the purpose of Plan distributions, or (v) following satisfaction of the Noteholder Condition, the Restructuring Transactions, for any reason, are no longer
supported by at least two-thirds (2/3) of the aggregate outstanding principal amount of each of the Senior Notes Claims;
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(k) solely with respect to the Official Committee, the Official Committee determines, after
consulting with counsel, that continuing to pursue any of the Restructuring Transactions in the manner contemplated by this Agreement would be inconsistent with the exercise of its fiduciary duties or applicable Law;
(l) solely with respect to the Required Ad Hoc Senior Noteholder Parties, if (i) the Debtor terminates this Agreement pursuant to
Section 10.2 hereof, (ii) the Official Committee terminates this Agreement pursuant to Section 10.1 hereof, (iii) after good faith negotiations, the Debtor, the Official Committee, and
the Required Ad Hoc Senior Noteholder Parties have not reached agreement as to the tax structuring of the Restructuring Transactions (including, for the avoidance of doubt, the formation of the Liquidating Trust and the scope of Retained Debtor
Assets and Contributed Assets) by February 9, 2024, or (iv) the claims asserted by the Internal Revenue Service are resolved in a manner not reasonably acceptable to the Required Ad Hoc Senior Noteholder Parties or are estimated by the
Bankruptcy Court at an amount not reasonably acceptable to the Required Ad Hoc Senior Noteholder Parties for the purpose of Plan distributions; and
(m) with respect to any Supporting Creditor, the occurrence of (i) the Outside Date or (ii) an Individual Supporting Creditor
Termination Event.
10.2. Debtor Termination Events. The Debtor may terminate this Agreement with respect to all Parties or
solely with respect to the applicable Supporting Parties upon prior written notice to counsel to each of the Ad Hoc Group of Senior Noteholders and the Official Committee in accordance with Section 12.10 hereof upon the
occurrence of any of the following events:
(a) the breach in any material respect by one or more Supporting Parties of any of the
covenants set forth in this Agreement that would have, or could reasonably be expected to have, a material adverse effect on the Restructuring Transactions, which breach remains uncured for ten (10) Business Days after the Debtor transmits a
written notice in accordance with Section 12.10 hereof detailing any such breach, provided that following satisfaction of the Noteholder Condition, as a result of such breach, the Restructuring Transactions are no
longer supported by at least two-thirds (2/3) of the aggregate outstanding principal amount of each of the Senior Notes Claims; provided, further, that in the case of a breach by the Official
Committee according to the foregoing, the Debtor may terminate this Agreement solely as to the Official Committee.
(b) any representation
or warranty in this Agreement made by one or more Supporting Parties shall have been untrue in any material respect when made or shall have become untrue in any material respect, and such untrue representation or warranty would have, or could
reasonably be expected to have, a material adverse effect on the Restructuring Transactions and which remains uncured for five (5) Business Days after the Debtor discovers the untrue nature of the representation or warranty and transmits a
written notice in accordance with Section 12.10 hereof detailing the untrue nature of such representation or warranty;
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(c) the board of directors of the Debtor or restructuring committee (or equivalent) thereof
determines in good faith, based on the advice of outside counsel, (i) that continuing to pursue any of the Restructuring Transactions in the manner contemplated by this Agreement would be inconsistent with the exercise of its fiduciary duties
or applicable Law or (ii) in the exercise of its fiduciary duties, to pursue an Alternative Restructuring Proposal;
(d) after good
faith negotiations, the Debtor, the Official Committee, and the Required Ad Hoc Senior Noteholder Parties have not reached agreement as to the tax structuring of the Restructuring Transactions (including, for the avoidance of doubt, the formation of
the Liquidating Trust and the scope of Retained Debtor Assets and Contributed Assets) by February 9, 2024;
(e) the issuance by any
governmental authority, including any regulatory authority or court of competent jurisdiction, of any final, non-appealable ruling, judgment or order that (i) enjoins the consummation of a material
portion of the Restructuring Transactions and (ii) (1) such ruling, judgment or order has not been issued at the request of, or sought by, the Debtor in contravention of any obligations set forth in this Agreement and (2) remains in effect
for five (5) Business Days after the Debtor transmits a written notice in accordance with Section 12.10 hereof detailing any such issuance;
(f) the Bankruptcy Court enters an order denying confirmation of the Plan and the Debtor, after exercising good faith efforts to negotiate a
revised Plan consistent with the consent rights in this Agreement and obtain confirmation of the Plan, is unable to obtain such confirmation within twenty (20) Business Days thereof;
(g) the Confirmation Order is reversed or vacated, and the Bankruptcy Court does not enter a revised Confirmation Order reasonably acceptable
to the Debtor within ten (10) Business Days; and
(h) the Noteholder Condition is not satisfied by the date set forth in
Section 4.1.
10.3. Mutual Termination. This Agreement and the obligations of the Parties hereunder may be mutually
terminated by mutual written agreement among the Official Committee, the Required Ad Hoc Senior Noteholder Parties and the Debtor.
10.4.
Automatic Termination. This Agreement shall terminate automatically without any further required action or notice immediately after the Plan Effective Date.
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10.5. Effect of Termination. After the occurrence of a Termination Date as to a
Party, this Agreement shall be of no further force and effect as to such Party and each Party subject to such termination shall be released from its obligations, commitments, undertakings, and agreements under or related to this Agreement, shall
have no further rights, benefits or privileges hereunder, shall have the rights and remedies that it would have had had it not entered into this Agreement, and no such rights or remedies shall be deemed waived pursuant to a claim of laches or
estoppel, and shall be entitled to take all actions, whether with respect to the Restructuring Transactions or otherwise, that it would have been entitled to take had it not entered into this Agreement, including with respect to any and all Claims
or Causes of Action; provided that in no event shall any such termination relieve a Party from (a) liability for its breach or non-performance of its obligations hereunder before the Termination
Date and (b) obligations under this Agreement which expressly survive any such termination pursuant to Section 12.20 hereunder. Further, upon the termination of this Agreement other than pursuant to
Section 10.4, with respect to each Supporting Creditor subject to the termination, (x) each such Supporting Creditors vote or ballots on the Plan tendered prior to such Termination Event shall automatically be
deemed null and void ab initio and shall not be considered or otherwise used in any manner in connection with the Plan, this Agreement, or otherwise, and (y) such votes or ballots may be changed or resubmitted regardless of whether the
applicable voting deadline has passed (without the need to seek a court order or consent from the Debtor allowing such change or resubmission). Any Supporting Creditor withdrawing or changing its vote pursuant to this this
Section 10.5 shall promptly provide written notice of such withdrawal or change to each other Party this Agreement and file notice of such withdrawal or change with the Bankruptcy Court. Nothing in this Agreement shall be
construed as prohibiting the Debtor or any Supporting Party from contesting whether any such termination is in accordance with the terms or to seek enforcement of any rights under this Agreement that arose or existed before a Termination Date.
Except as expressly provided in this Agreement, nothing in this Agreement is intended to, or does, in any manner waive, limit, impair, or restrict (i) any right of the Debtor or the ability of the Debtor to protect and reserve its rights
(including rights under this Agreement), remedies, and interests, including its claims against any Supporting Party or (ii) any right of any Supporting Party or the ability of such Supporting Party to protect and reserve its rights (including
rights under this Agreement), remedies and interests, including its claims against the Debtor or any other Supporting Party. Notwithstanding any provision to the contrary in this Section 10, no purported termination of this
Agreement shall be effective under this Section 10.5 or otherwise if the Party seeking to terminate this Agreement is in material breach of this Agreement. Nothing in this Section 10.5 shall
restrict the Official Committees right to terminate this Agreement in accordance with Section 10.1 hereof or the Debtors right to terminate this Agreement in accordance with
Section 10.2 hereof. The automatic stay applicable under section 362 of the Bankruptcy Code shall not prohibit a Party from taking any action or delivering any notice necessary to effectuate the termination of this
Agreement pursuant to and in accordance with the terms hereof.
11. Amendments and Waivers.
(a) This Agreement may not be modified, amended, or supplemented, and no condition or requirement of this Agreement may be waived, in any
manner except in accordance with this Sections 11 and 12.20.
(b) This Agreement may be modified, amended, or
supplemented, or a condition or requirement of this Agreement may be waived, if in writing and signed by: (i) the Debtor, (ii) the Required Ad Hoc Senior Noteholder Parties, and (iii) the Official Committee; provided that any
changes to the consent or termination rights of any Party, to Section 10.1(m) or to the definition of Outside Date or Individual Supporting Creditor Termination Event shall require the consent of each affected Party;
provided, further, that any changes which have a material, adverse, and disproportionate effect on any Party shall require the consent of such affected Party.
(c) Any proposed modification, amendment, waiver, or supplement that does not comply with this Section 11 shall be
ineffective and void ab initio.
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(d) The waiver by any Party of a breach of any provision of this Agreement shall not operate
or be construed as a further or continuing waiver of such breach or as a waiver of any other or subsequent breach. No failure on the part of any Party to exercise, and no delay in exercising, any right, power, or remedy under this Agreement shall
operate as a waiver of any such right, power, or remedy under, or other provision of, this Agreement, nor shall any single or partial exercise of such right, power, or remedy by such Party preclude any other or further exercise of such right, power,
or remedy or the exercise of any other right, power, or remedy. All remedies under this Agreement are cumulative and are not exclusive of any other remedies provided by Law.
12. Miscellaneous.
12.1.
Acknowledgements. Notwithstanding any other provision of this Agreement, this Agreement is not and shall not be deemed to be an offer with respect to any securities or solicitation of votes for the acceptance of a plan of reorganization for
purposes of sections 1125 and 1126 of the Bankruptcy Code or otherwise. Any such offer or solicitation will be made only in compliance with all applicable securities Laws, provisions of the Bankruptcy Code, and/or other applicable Law.
12.2. Exhibits Incorporated by Reference; Conflicts. Each of the exhibits, annexes, signatures pages, and schedules attached to
this Agreement is expressly incorporated into and made a part of this Agreement, and all references to this Agreement shall include such exhibits, annexes, and schedules. In the event of any inconsistency between this Agreement (without reference to
the exhibits, annexes, and schedules attached to this Agreement) and the exhibits, annexes, and schedules attached to this Agreement, this Agreement (without reference to the exhibits, annexes, and schedules thereto) shall govern; provided
that in the event of any inconsistency between this Agreement and the Restructuring Term Sheet, the Restructuring Term Sheet shall govern until such time as the Plan has been confirmed, at which time, the terms and conditions set forth in the Plan,
to the extent intended to supersede the Term Sheet, shall govern.
12.3. Further Assurances. Subject to the other terms of this
Agreement, the Parties agree to use their commercially reasonable efforts to execute and deliver such other instruments and perform such acts, in addition to the matters specified in this Agreement, as may be reasonably appropriate or necessary, or
as may be required by order of the Bankruptcy Court, from time to time, to effectuate the Restructuring Transactions, as applicable.
12.4.
Complete Agreement. Except as otherwise explicitly provided in this Agreement, this Agreement constitutes the entire agreement among the Parties with respect to the subject matter of this Agreement and supersedes all prior
agreements, oral or written, among the Parties with respect thereto, other than any confidentiality agreement. The Parties acknowledge and agree that they are not relying on any representations or warranties other than as set forth in this
Agreement.
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12.5. GOVERNING LAW; SUBMISSION TO JURISDICTION; SELECTION OF FORUM. THIS
AGREEMENT IS TO BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO ITS CONFLICT OF LAWS PRINCIPLES. Each Party to this Agreement agrees that it shall bring any action or proceeding in
respect of any claim arising out of or related to this Agreement, to the extent possible, in the Bankruptcy Court. Solely in connection with claims arising under this Agreement, each Party to this Agreement: (a) irrevocably submits to the
exclusive jurisdiction of the Bankruptcy Court; (b) waives any objection to laying venue in any such action or proceeding in the Bankruptcy Court; and (c) waives any objection that the Bankruptcy Court is an inconvenient forum or does not
have jurisdiction over any Party to this Agreement.
12.6. TRIAL BY JURY WAIVER. EACH PARTY TO THIS AGREEMENT IRREVOCABLY WAIVES ANY
AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.
12.7. Execution of Agreement. This Agreement may be executed and delivered in any number of counterparts and by way of
electronic signature and delivery, each such counterpart, when executed and delivered, shall be deemed an original, and all of which together shall constitute the same agreement. Except as expressly provided in this Agreement, each Person
executing this Agreement on behalf of a Party has been duly authorized and empowered to execute and deliver this Agreement on behalf of said Party.
12.8. Rules of Construction. This Agreement is the product of negotiations among the Debtor and the Supporting Parties, and in the
enforcement or interpretation of this Agreement, is to be interpreted in a neutral manner, and any presumption with regard to interpretation for or against any Party by reason of that Party having drafted or caused to be drafted this Agreement, or
any portion of this Agreement, shall not be effective in regard to the interpretation of this Agreement. The Debtor and the Supporting Parties were each represented by counsel during the negotiations and drafting of this Agreement and continue to be
represented by counsel.
12.9. Successors and Assigns; Third Parties. This Agreement is intended to bind and inure to the
benefit of the Parties and their respective successors and permitted assigns, as applicable. There are no third-party beneficiaries under this Agreement, and, except as set forth in Section 7, the rights or obligations of
any Party under this Agreement may not be assigned, delegated or transferred to any other Entity.
12.10. Notices. All
notices hereunder shall be deemed given if in writing and delivered, by electronic mail, courier, or registered or certified mail (return receipt requested), to the following addresses (or at such other addresses as shall be specified by like
notice):
|
(a) |
if to the Debtor, to: |
Sullivan & Cromwell LLP
125 Broad Street
New York, New
York 10004
Attention: James L. Bromley and Christian P. Jensen
E-mail address: bromleyj@sullcrom.com and jensenc@sullcrom.com
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|
(b) |
if to a Supporting Ad Hoc Group of Senior Noteholder Member or the Ad Hoc Group of Senior Noteholders, to:
|
Davis Polk & Wardwell LLP
450 Lexington Avenue
New York,
NY 10017
Attention: Marshall S. Huebner, Angela M. Libby, David Schiff, and Aryeh Ethan Falk
E-mail address: marshall.huebner@davispolk.com
angela.libby@davispolk.com
david.schiff@davispolk.com
aryeh.falk@davispolk.com
|
(c) |
if to the Official Committee, to: |
Akin Gump Strauss Hauer & Feld LLP,
One Bryant Park
New York, NY
10036
Attention: Ira S. Dizengoff and Brad M. Kahn
E-mail addresses: idizengoff@akingump.com and bkahn@akingump.com
Akin Gump Strauss Hauer & Feld LLP,
2001 K Street NW
Washington,
DC 2000
Attention: James R. Savin
E-mail address: jsavin@akingump.com
Any notice given by delivery, mail, or courier shall be effective when received.
12.11. Independent Due Diligence and Decision Making. Each Supporting Party confirms that its decision to execute this Agreement has
been based upon its independent investigation of the operations, businesses, financial and other conditions, and prospects of the Debtor. Each Supporting Party acknowledges and agrees that it is not relying on any representations or warranties other
than as set forth in this Agreement.
12.12. Enforceability of Agreement. Each of the Parties, to the fullest extent
permitted by Law, waives any right to assert that the exercise of termination rights under this Agreement is subject to the automatic stay provisions of the Bankruptcy Code and expressly stipulates and consents hereunder to the prospective
modification of the automatic stay provisions of the Bankruptcy Code for purposes of exercising termination rights under this Agreement, to the extent the Bankruptcy Court determines that such relief is required.
12.13. Admissibility. Pursuant to rule 408 of the Federal Rules of Evidence and any other applicable rules of evidence, this Agreement
and all negotiations relating to this Agreement shall not be admissible into evidence in any proceeding other than a proceeding to enforce its terms or the payment of damages to which a Party may be entitled under this Agreement.
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12.14. Specific Performance. It is understood and agreed by the Parties that money
damages would be an insufficient remedy for any breach of this Agreement by any Supporting Party, and each non-breaching Party shall be entitled to specific performance and injunctive or other equitable relief
(without the posting of any bond and without proof of actual damages) as a remedy of any such breach, including an order of the Bankruptcy Court or other court of competent jurisdiction requiring any Supporting Party to comply promptly with any of
its obligations hereunder.
12.15. Relationship Among Parties. Notwithstanding anything herein to the contrary, (a) the duties
and obligations of the Parties under this Agreement shall be several, not joint; (b) no Party shall have any responsibility by virtue of this Agreement for any trading by any other entity; (c) no prior history, pattern, or practice of
sharing confidences among or between the Parties shall in any way affect or negate this Agreement; (d) the Parties hereto acknowledge that this Agreement does not constitute an agreement, arrangement, or understanding with respect to acting
together for the purpose of acquiring, holding, voting, or disposing of any equity securities of the Debtor, and the Parties do not constitute a group within the meaning of Rule 13d-5 under
the Securities Exchange Act of 1934, as amended; and (e) none of the Supporting Parties shall have any fiduciary duty, any duty of trust or confidence in any form, or other duties or responsibilities in any kind or form to each other, the
Debtor, or any of the Debtors other creditors or stakeholders, except as a result of this Agreement or the Restructuring Transactions.
12.16. Several, Not Joint, Claims. Except where otherwise specified, the agreements, representations, warranties, and obligations of the
Parties under this Agreement are, in all respects, several and not joint.
12.17. Severability and Construction. If any provision of
this Agreement shall be held by a court of competent jurisdiction to be illegal, invalid, or unenforceable, the remaining provisions shall remain in full force and effect if essential terms and conditions of this Agreement for each Party remain
valid, binding, and enforceable.
12.18. Remedies Cumulative. All rights, powers, and remedies provided under this Agreement or
otherwise available in respect hereof at Law or in equity shall be cumulative and not alternative, and the exercise of any right, power, or remedy thereof by any Party shall not preclude the simultaneous or later exercise of any other such right,
power, or remedy by such Party.
12.19. Capacities of Supporting Creditors. Subject to the limitations set forth in footnote 1, each
Supporting Creditor has entered into this Agreement on account of all Claims that it holds (directly or through discretionary accounts that it manages or advises) and, except where otherwise specified in this Agreement, shall take or refrain from
taking all actions that it is obligated to take or refrain from taking under this Agreement with respect to all such Claims.
12.20.
Survival. Notwithstanding (a) any Transfer of any Claims in accordance with this Agreement or (b) the termination of this Agreement in accordance with its terms, the agreements and obligations of the Parties in
Section 10.5 and Section 12 (and any defined terms used in any such Sections) shall survive such Transfer and/or termination and shall continue in full force and effect for the benefit of the
Parties in accordance with the terms hereof; provided that any liability of a Party for failure to comply with the terms of this Agreement shall survive such termination.
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12.21. Email Consents. Where a written consent, acceptance, approval, or waiver is
required pursuant to or contemplated by this Agreement, such written consent, acceptance, approval, or waiver shall be deemed to have occurred if, by agreement between counsel to, as applicable, the Debtor and the applicable Supporting Parties
submitting and receiving such consent, acceptance, approval, or waiver, it is conveyed in writing (including electronic mail) between each such counsel without representations or warranties of any kind on behalf of such counsel.
12.22. Bankruptcy Court Approval. Each of the Supporting Parties acknowledges that, notwithstanding any other provision of this
Agreement, this Agreement has not, as of the Execution Date, been approved by the Bankruptcy Court and the obligations of the Debtor herein are enforceable only as conditions and defenses to the obligations of the Supporting Parties and shall not
constitute administrative obligations or expenses of the Debtor or its estate except to the extent subsequently approved as such by the Bankruptcy Court.
12.23. Disclosure; Publicity. The Debtor shall submit drafts to counsel to the Supporting Parties of any press releases and public
documents that constitute disclosure of the existence or terms of this Agreement or any amendment to the terms of this Agreement prior to making any such disclosure, afford them a reasonable opportunity under the circumstances to comment on such
documents and disclosures, and incorporate any such reasonable comments in good faith. Except as required by Law, no Party or its advisors shall (a) use the name of any Supporting Party in any public manner (including in any press release) with
respect to this Agreement, the Restructuring Transactions, or any of the Definitive Documents or (b) disclose to any Person (including, for the avoidance of doubt, any other Supporting Creditor), other than advisors to the Debtor, the principal
amount or percentage of any Claims held by any Supporting Creditor or the specific legal entity name of any Supporting Creditor without such Supporting Creditors prior written consent (it being understood and agreed that each Supporting
Creditors signature page to this Agreement shall be redacted to remove the name of such Supporting Creditor and the amount and/or percentage of Claims held by such Supporting Creditor to the extent this Agreement is filed on the docket
maintained in the Chapter 11 Cases or otherwise made publicly available); provided that (x) if such disclosure is required by Law, and to the extent reasonably practicable and not otherwise prohibited by Law, the disclosing Party shall
afford the relevant Supporting Creditor a reasonable opportunity to review and comment in advance of such disclosure and such Party shall take all reasonable measures to limit such disclosure and (y) the foregoing shall not prohibit the
disclosure of the aggregate percentage or aggregate principal amount of Claims held by the Supporting Creditors of the same class, collectively. Notwithstanding the provisions in this Section 12.23, (1) any Party may
disclose the identities of the other Parties in any action to enforce this Agreement or in any action for damages as a result of any breaches hereof and (2) any Party may disclose, to the extent expressly consented to in writing in advance by a
Supporting Creditor, such Supporting Creditors identity and individual holdings.
[Signature pages follow]
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date specified on the
first page of this document.
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SVB Financial Group |
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By: |
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/s/ William C. Kosturos |
Name: |
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William C. Kosturos |
Title: |
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Chief Restructuring Officer |
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Official Committee, solely in its representative capacity as described in the Preamble of this Agreement |
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By: |
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/s/ James R. Savin |
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Name: |
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James R. Savin |
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Title: |
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Partner Akin Gump Strauss Hauer & Feld LLP, in its capacity as counsel to, and authorized signatory for, the Official
Committee |
[Supporting Parties signature pages on file with the
Debtor]
Exhibit A
Restructuring Term Sheet
EXECUTION VERSION
SVB FINANCIAL GROUP
RESTRUCTURING TERM SHEET
THIS RESTRUCTURING TERM SHEET (THIS TERM SHEET)1 DOES NOT CONSTITUTE (NOR
SHALL IT BE CONSTRUED AS) AN OFFER OR ACCEPTANCE WITH RESPECT TO ANY SECURITIES OR A SOLICITATION OF ACCEPTANCES OF A CHAPTER 11 PLAN WITHIN THE MEANING OF SECTION 1125 OF THE BANKRUPTCY CODE. ANY SUCH OFFER OR SOLICITATION WILL COMPLY WITH ALL
APPLICABLE SECURITIES LAWS AND/OR PROVISIONS OF THE BANKRUPTCY CODE. NOTHING CONTAINED IN THIS TERM SHEET SHALL BE AN ADMISSION OF FACT OR LIABILITY OR, UNTIL THE OCCURRENCE OF THE EFFECTIVE DATE OF THE RESTRUCTURING SUPPORT AGREEMENT (THE
AGREEMENT EFFECTIVE DATE), DEEMED BINDING ON ANY OF THE PARTIES HERETO.
THIS TERM SHEET HAS BEEN PRODUCED FOR DISCUSSION AND
SETTLEMENT PURPOSES ONLY AND IS SUBJECT TO RULE 408 OF THE FEDERAL RULES OF EVIDENCE AND OTHER SIMILAR APPLICABLE STATE AND FEDERAL STATUTES, RULES, AND LAWS.
This Term Sheet sets forth the principal terms of a proposed financial restructuring (the Restructuring and, the transactions effectuating
the Restructuring, the Restructuring Transactions) of the existing indebtedness and other obligations and equity interests of SVB Financial Group (the Debtor or SVBFG). This Term
Sheet does not include a description of all of the terms, conditions, and other provisions that will be contained in the Definitive Documents governing the Restructuring, which documents remain subject to negotiation and completion in accordance
with the Restructuring Support Agreement to which this Term Sheet is attached (the RSA) and applicable bankruptcy law. The Definitive Documents shall be consistent in all respects with this Term Sheet and the RSA and shall be
subject to the consent and approval rights set forth herein and therein. This Term Sheet incorporates the rules of construction as set forth in the RSA.
1 |
Capitalized terms used but not defined in this Term Sheet have the meanings given to such terms in the
Restructuring Support Agreement to which this Term Sheet is attached as Exhibit A. |
GENERAL PROVISIONS REGARDING THE RESTRUCTURING
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Restructuring Summary |
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The Restructuring will be consummated in accordance with the Definitive Documents, including the RSA, through confirmation by the United
States Bankruptcy Court for the Southern District of New York (the Bankruptcy Court) of the Debtors chapter 11 plan of reorganization (the Plan) in case number 23-10367 (MG)
(the Chapter 11 Case). As set forth in greater detail herein, on the
Plan Effective Date: Liquidating Trust2 The Debtor and its direct
and indirect subsidiaries will contribute certain assets to be agreed by the Debtor, the Creditors Committee, and the Required Ad Hoc Senior Noteholder Parties (the Contributed Assets) to a newly-formed liquidating
trust (the Liquidating Trust). Solely for illustrative purposes, the Contributed Assets may include the following assets of the Debtor and its direct and indirect subsidiaries:
all claims and Causes of
Action, including without limitation, (a) the FDIC Claims and (b) all other Retained Causes of Action;
all investment securities, including the Debtors direct investment and warrant portfolios
and its synthetic equity instrument in Leerink Partners LLC;
certain limited partner interests held by the Debtor or any of its subsidiaries in investment
funds that are part of the SVB Capital business (the Transferred LP Interests); and
all cash of the Debtor (prior to receipt of the proceeds of a NewCo Transaction (as defined
herein)) in excess of (a) amounts required for distributions to Holders of Allowed Administrative, Priority, Secured Claims, and certain General Unsecured Claims that elect the GUC Cash-Out (as defined
herein), and payment of fees, expenses, and other amounts required to be paid on the Plan Effective Date pursuant to the Plan and (b) the amount required to fund the businesses to be owned by NewCo, as determined in accordance with a NewCo
business plan acceptable to the Required Ad Hoc Senior Noteholder Parties;
if, upon the election of the Required Ad Hoc Senior Noteholder Parties and the Debtor (and in form
and substance reasonably acceptable to the Creditors Committee), the Debtor consummates a NewCo Transaction, the proceeds of such NewCo Transaction; provided that, with the consent of the Required Ad Hoc Senior Noteholder Parties, a
portion of the proceeds of any rights offering may remain at NewCo rather than being transferred to the Liquidating Trust.
The Liquidating Trust shall issue senior trust units (the Class A Trust Units), class B junior trust units (the Class B
Trust Units), and class C junior trust units (the Class C Trust Units). Except to the extent that a Holder of an Allowed General Unsecured Claim elects to participate in the GUC
Cash-Out, each Holder of an Allowed General Unsecured Claim shall receive its pro rata share of the Class A Trust Units. Each Holder of an Allowed Subordinated Note Claim shall receive its pro rata share
of the Class B Trust Units. Each Holder of an Allowed Preferred Equity Interest shall receive its pro rata share of the Class C Trust Units.
The Class A Trust Units shall be issued to Holders of Allowed General Unsecured Claims (other than Holders of Allowed General Claims that elect to
participate in the GUC Cash-Out) with an initial distribution preference of $[],3 which shall accrete at an annual rate of 12%. The Class B Trust
Units and Class C Trust Units shall receive no distributions until the distribution preference of the Class A Trust Units has been satisfied in full.
The Class B Trust Units shall be issued to Holders of Allowed Subordinated Note Claims with an initial distribution preference to be calculated at the
face amount of the Allowed Subordinated Note Claims, which Class B Trust Units shall accrete at an annual rate of 12%. The Class C Trust Units shall receive no distributions until the distribution preference of the Class B Trust Units
has been satisfied in full. After such satisfaction, the Class C Trust Units shall be entitled to 100% of Liquidating Trust distributions.
The Liquidating Trust will be structured and operate in compliance with SEC staff no-action relief for liquidating
trusts under the federal securities laws. |
2 |
The contribution of assets to a Liquidating Trust, and the scope of the Contributed Assets (each as defined
herein), remains subject to ongoing tax analysis (including with respect to tax consequences to individual holders) and is the subject of termination rights set forth in the RSA. |
3 |
To be calculated at the face amount (including accrued and unpaid interest on the Senior Notes as of the
Petition Date) of the General Unsecured Claims receiving Class A Trust Units, minus the value of NewCo Common Stock distributed to Holders of Allowed General Unsecured Claims; provided that the determination of such value shall be
acceptable to the Debtor, the Creditors Committee, and the Required Ad Hoc Senior Noteholder Parties and shall take into account any NewCo Transaction(s) to be consummated on or prior to the Plan Effective Date. |
2
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NewCo Formation and Reorganization
Unless otherwise agreed by the Required Ad Hoc Senior Noteholder Parties with the reasonable
consent of the Creditors Committee, the Debtor will undergo an F reorganization (the Debtor F Reorganization), as a result of which NewCo, a newly-formed Delaware corporation (or other business form agreed by the
Debtor, Creditors Committee, and Required Ad Hoc Senior Noteholder Parties), will own 100% of the equity interests in SVBFG, and SVBFG will convert from a corporation to a limited liability company and become a disregarded entity for tax
purposes. As a result of the Debtor F Reorganization, the tax attributes of SVBFG will become tax attributes of NewCo.
Following the Debtor F Reorganization, (i) first, SVBFG shall distribute the equity of
MoffettNathanson LLC (MoffetNathanson) to its parent, NewCo, and (ii) second, NewCo will contribute 100% of the equity interests in SVBFG to SVBC HoldCo, a newly-formed Delaware corporation (or other business form agreed by the
Debtor, Creditors Committee, and Required Ad Hoc Senior Noteholder Parties).
NewCo Assets
NewCo and its subsidiaries will retain, with the consent of the Required Ad Hoc Senior Noteholder
Parties and the reasonable consent of the Creditors Committee, all assets not constituting Contributed Assets (the Retained Debtor Assets). Solely for illustrative purposes, the Retained Debtor Assets may include:
100% of the equity interests
in MoffetNathanson; 100%
of the equity interests in SVBC HoldCo; and
the following assets of SVBFG and its subsidiaries:
100% of the equity interests
in SVB Capital Holdco LLC and SVB Capital Management LLC;
100% of the equity interests in SVB Capital Master Servicer, LLC;
100% of SVBFGs equity
interests in the general partners of SVB Capital funds;
SVBFGs carried interest held by such entities in SVB Capital funds; and
SVBFGs capital interest
in the SVB Capital funds, other than the Transferred LP Interests. NewCo
Capitalization
NewCo will:
unless otherwise agreed by the Required Ad Hoc Senior Noteholder Parties in connection with a
NewCo Transaction, issue debt (the NewCo Debt) to the Liquidating Trust in an aggregate principal amount to be agreed by the Debtor, the Creditors Committee, and the Required Ad Hoc Senior Noteholder Parties reflecting 70-80% of the total enterprise value of NewCo, or a lesser amount agreed by the Debtor, the Creditors Committee, and the Required Ad Hoc Senior Noteholder Parties. The terms and conditions of the documents
governing the NewCo Debt (the NewCo Debt Documents) shall be acceptable to the Debtor, the Required Ad Hoc Senior Noteholder Parties, and the Creditors Committee; and
issue 100% of its new common
equity interests (the NewCo Common Stock) to Holders of Allowed General Unsecured Claims (as defined herein), subject to dilution by a NewCo rights offering, if
any. |
3
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NewCo Transaction
The Debtor, the Creditors Committee, and the Required Ad Hoc Senior Noteholder Parties will continue to work together in good faith to evaluate
opportunities to maximize the value of all or some of the assets or equity of NewCo, including through a rights offering, marketing process, private placement, or otherwise (any such transaction, a NewCo Transaction). The terms of any
such NewCo Transaction will be acceptable to each of the Debtor, the Required Ad Hoc Senior Noteholder Parties, and the Creditors Committee. |
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Tax Attributes |
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At least one day prior to the Plan Effective Date, the Debtor will abandon its interest in the stock of Silicon Valley Bank (and all entities and arrangements treated as a single entity with or successor(s) to Silicon Valley Bank
for U.S. federal income tax purposes) and take a corresponding worthless stock deduction. |
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Definitive Documents |
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All Definitive Documents and any other documents that remain the subject of negotiation as of the Agreement Effective Date shall be subject to the rights and obligations set forth in Section 3 of the RSA. Failure to reference such
rights and obligations as it relates to any document referenced in this Term Sheet shall not impair such rights and obligations. |
TREATMENT OF PREPETITION CLAIMS AND INTERESTS
Each Holder of a Claim or an Interest, as applicable, shall receive, on the Plan Effective Date or as soon as is reasonably practicable thereafter, the
treatment described below in full and final satisfaction, compromise, settlement, release, and discharge of, and in exchange for, such Holders Claim or Interest, except to the extent different treatment is agreed to by the Debtor and the
Holder of such Claim or Interest, as applicable, with the consent of the Required Ad Hoc Senior Noteholder Parties and the Creditors Committee.
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Class No. |
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Type of Claim |
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Treatment |
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Impairment / Voting |
Unclassified
Non-Voting Claims |
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N/A |
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Administrative Claims |
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Each Holder of an Allowed Administrative Claim shall receive treatment in a manner consistent with section 1129(a)(9) of the Bankruptcy Code. |
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N/A |
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N/A |
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Priority Tax Claims |
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Each Holder of an Allowed Priority Tax Claim shall receive treatment in a manner consistent with section 1129(a)(9)(C) of the Bankruptcy Code. |
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N/A |
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Classified Claims and
Interests |
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Class 1 |
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Secured Claims |
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Each Holder of an Allowed Secured Claim shall receive, at the Debtors option (with the consent of the Required Ad Hoc Senior Noteholder Parties and the Creditors Committee): (a) payment in full in cash; (b) the
collateral securing its Allowed Secured Claim; (c) reinstatement of its Allowed Secured Claim; or (d) such other treatment rendering its Allowed Secured Claim unimpaired in accordance with section 1124 of the Bankruptcy Code. |
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Unimpaired / Deemed to Accept |
4
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Class 2 |
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Other Priority Claims |
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Each Holder of an Allowed Other Priority Claim shall receive treatment in a manner consistent with section 1129(a)(9) of the Bankruptcy Code. |
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Unimpaired / Deemed to Accept |
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Class 3 |
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General Unsecured Claims |
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Each Holder of an Allowed General Unsecured Claim shall receive its pro rata share of:
100% of the NewCo Common
Stock; 100% of the
Class A Trust Units; and
Cash sufficient to satisfy the Senior Note Trustee Expenses, to the extent not otherwise paid by
the Debtor. provided that the Plan will provide Holders of
Allowed General Unsecured Claims with the ability to elect to receive cash in lieu of the foregoing distributions in an amount and on terms to be agreed to by the Debtor, the Creditors Committee, and the Required Ad Hoc Senior Noteholder
Parties (the GUC Cash-Out). |
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Impaired / Entitled to Vote |
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Class 4 |
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Subordinated Note Claims |
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Each Holder of an Allowed Subordinated Note Claim shall receive (i) its pro rata share of 100% of the Class B Trust Units and (ii) cash sufficient to satisfy the Subordinated Note Trustee Expenses, to the extent not
otherwise paid by the Debtor. |
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Impaired / Entitled to Vote |
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Class 5 |
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Preferred Equity Interests |
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Each Holder of an Allowed Preferred Equity Interest shall receive its pro rata share of 100% of the Class C Trust Units. |
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Impaired / Entitled to Vote |
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Class 6 |
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Common Equity Interests |
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All Common Equity Interests shall be cancelled, released, discharged, and extinguished and will be of no further force or effect, and Holders of such Interests shall not receive or retain any distribution, property, or other value
on account of such Interests. |
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Impaired / Deemed to Reject |
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Class 7 |
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Section 510(b) Claims |
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All Section 510(b) Claims shall be cancelled, released, discharged, and extinguished and will be of no further force or effect, and Holders of Section 510(b) Claims shall not receive or retain any distribution, property,
or other value on account of such Section 510(b) Claims. |
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Impaired / Deemed to Reject |
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Class 8 |
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Intercompany Claims / Intercompany Interests |
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Each Intercompany Claim and Intercompany Interest shall be (a) cancelled, released, and discharged, (b) reinstated, (c) converted to equity, or (d) otherwise set off, settled, or distributed, in each case at the
option of the Debtor with the consent of the Required Ad Hoc Senior Noteholder Parties and the Creditors Committee. |
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Unimpaired / Deemed to Accept, or Impaired / Deemed to Reject, as Applicable |
7
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GENERAL PROVISIONS REGARDING THE PLAN |
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Subordination |
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The classification and treatment of Claims under the Plan shall settle and compromise the respective contractual, legal, and equitable subordination rights of the Holders of such Claims and any other rights impacting relative lien
priority and/or priority in right of payment, and any such rights shall be released pursuant to the Plan. |
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Restructuring Transactions |
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The Confirmation Order shall authorize and ratify, among other things, all actions as may be necessary or appropriate, consistent with the RSA, to effect any Restructuring Transaction or settlement described in, approved by,
contemplated by, or necessary to effectuate the Plan. On the Plan Effective Date, the Debtor, NewCo, and the Liquidating Trust, as applicable, shall issue all securities, notes, instruments, certificates, New Governance Documents (as defined
herein), and other documents required to be issued pursuant to the Restructuring. |
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Cancellation of Notes, Instruments, Certificates, and Other Documents |
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Except for evidencing a right to distribution under the Plan, and except as otherwise provided in this Term Sheet, the RSA, the Plan, or the other Definitive Documents, as applicable, on the Plan Effective Date, all notes,
instruments, certificates, and other documents evidencing Claims or Interests, including credit agreements, note purchase agreements, and indentures, shall be canceled, and the Debtors obligations thereunder or in any way related thereto shall
be deemed satisfied in full and discharged. |
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Vesting of Assets |
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On and after the Plan Effective Date all property of the Debtor, wherever located, including all claims, rights, and Causes of Action, and any property, wherever located, acquired by the Debtor under or in connection with the Plan,
shall vest in, as applicable, NewCo and the Liquidating Trust, on the terms of and subject to the conditions set forth in the Plan, this Term Sheet, and the Definitive Documents, and in each case free and clear of all Claims, liens, charges, other
encumbrances, and Interests. |
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Retention of Jurisdiction |
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The Bankruptcy Court shall retain jurisdiction for usual and customary matters. |
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Releases and Exculpation |
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The Plan shall include release and exculpation provisions to be agreed by the Required Ad Hoc Senior Noteholder Parties and the Creditors Committee. For the avoidance of doubt, (i) the Plan shall not release or exculpate
any Retained Causes of Action, and (ii) the Debtors Related Parties shall not be granted releases pursuant to the Plan; provided that, with the consent of the Creditors Committee and the Required Ad Hoc Senior Noteholder
Parties, certain enumerated parties that are the Debtors Related Parties may be granted releases under the Plan. |
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Discharge and Injunction |
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The Plan will contain customary discharge and injunction provisions. |
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Executory Contracts and Unexpired Leases |
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Executory contracts and unexpired leases that are not assumed as of the Plan Effective Date (either pursuant to the Plan or a separate
motion) will be deemed rejected pursuant to section 365 of the Bankruptcy Code. The Debtor, the Required Ad Hoc Senior Noteholder Parties, and the Creditors Committee will work together in good faith to determine which executory contracts
and unexpired leases shall be assumed, assumed and assigned, or rejected in the Chapter 11 Case.
Claims arising from the rejection of the Debtors executory contracts and unexpired leases shall be classified as General Unsecured
Claims. |
8
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OTHER MATERIAL PROVISIONS REGARDING THE RESTRUCTURING |
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Conditions Precedent to the Plan Effective Date |
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The occurrence of the Plan Effective Date shall be subject to the satisfaction of conditions precedent (the Conditions Precedent to
the Plan Effective Date), including the following:
(a) The RSA shall have been executed, shall not have been terminated, and shall remain in full
force and effect, and no event or occurrence shall have occurred that, with the passage of time or the giving of notice, would give rise to the right of the Required Ad Hoc Senior Noteholder Parties or the Creditors Committee to terminate the
RSA. (b) The Debtor shall
have implemented the Restructuring Transactions and all transactions contemplated in the RSA (subject to, and in accordance with, the consent rights set forth therein) and the Plan.
(c) All Professional Fees and
Expenses shall have been paid in full in cash in accordance with the terms and conditions set forth in the RSA.
(d) All professional fees and expenses of retained professionals required to be approved by the
Bankruptcy Court shall be paid in full or amounts sufficient to pay such fees and expenses in full after the Plan Effective Date shall be placed in a professional fee escrow account as set forth in, and in accordance with, the Plan.
(e) All Claims asserted by
the Internal Revenue Service shall have been resolved in a manner acceptable to the Required Ad Hoc Senior Noteholder Parties and the Creditors Committee or estimated by the Bankruptcy Court for the purpose of Plan distributions at an amount
acceptable to the Required Ad Hoc Senior Noteholder Parties and the Creditors Committee.
(f) The Debtor shall have obtained all authorizations, consents, regulatory approvals, rulings, or
documents that are necessary to implement and effectuate the Plan.
(g) All documents contemplated by the RSA to be executed and delivered on or before the Plan
Effective Date shall have been executed and delivered.
(h) The final version of each of the Plan, the Definitive Documents, and all documents contained
in any supplement to the Plan (including the Plan Supplement), including in each case all of the schedules, documents, and exhibits contained therein, shall have been filed in a manner consistent in all material respects with the RSA, this Term
Sheet, and the Plan. (i) The
Confirmation Order shall have become a final and non-appealable order, which shall not have been stayed, reversed, vacated, amended, supplemented, or otherwise modified. |
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Waiver of Conditions Precedent to Plan Effective Date |
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The Debtor, solely with the prior written consent of the Required Ad Hoc Senior Noteholder Parties and the Creditors Committee, may waive any one or more of the Conditions Precedent to the Plan Effective Date. |
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Exemption from SEC Registration |
|
The issuance of all securities under the Definitive Documents will be exempt from SEC registration under section 1145 of the Bankruptcy Code
(the Section 1145 Exemption) to the fullest extent permissible.
If the Section 1145 Exemption is not available, such securities are expected to be issued in reliance upon the exemptions provided by section 4(a)(2) of
the Securities Act (or another applicable exemption under the Securities Act). |
9
|
|
|
Retained Causes of Action |
|
NewCo or the Liquidating Trust, as applicable, shall retain all rights to commence and pursue any Causes of Action, other than those that the
Debtor releases pursuant to release and exculpation provisions acceptable to the Required Ad Hoc Senior Noteholder Parties and the Creditors Committee (the Retained Causes of Action).
Notwithstanding anything herein to the contrary, NewCo or the Liquidating Trust shall
retain the Debtors right to commence and pursue (a) the FDIC Claims, (b) any Debtor Related Party Claims to the extent not released under the Plan, and (c) any claims or Causes of Action the Debtor may have against
FCB. |
|
|
Tax Structuring |
|
The parties will work together in good faith and will use commercially reasonable efforts to structure and implement the Restructuring in a tax-efficient and cost-effective manner (including,
but not limited to, by way of the preservation or enhancement of favorable tax attributes) for the Debtor and NewCo, as applicable. The final tax structuring of the Restructuring and each Restructuring Transaction, including without limitation in
respect of the formation of, capitalization of, and distribution of assets between NewCo and the Liquidating Trust, shall be acceptable to the Required Ad Hoc Senior Noteholder Parties and the Creditors Committee. |
|
|
Governance |
|
The board of trustees of the Liquidating Trust and, in the absence of any NewCo Transaction, the board of directors of NewCo (the
NewCo Board) shall each be appointed by the Required Ad Hoc Senior Noteholder Parties, in a manner reasonably acceptable to the Creditors Committee.
Corporate governance for NewCo and the Liquidating Trust, including charters, bylaws, liquidating trust agreement, operating agreements, or other
organizational documents (the New Governance Documents), as applicable, shall be consistent with this Term Sheet and the consent rights set forth in the RSA, and shall in any event be acceptable to the Required Ad Hoc Senior
Noteholder Parties and reasonably acceptable to the Creditors Committee. |
|
|
Professional Fees and Expenses |
|
The Plan shall provide for payment in full in cash of (a) all Professional Fees and Expenses, (b) all Senior Note Trustee Expenses, and (c) all Subordinated Note Trustee Expenses, and Claims in respect of such amounts
shall be deemed to be Allowed Administrative Claims for all purposes hereunder. |
|
|
Employment and Indemnification Obligations |
|
The Debtors post-Plan Effective Date employment and assumption of any indemnification agreements of current and former officers, directors, and employees is to be determined with the consent of the Required Ad Hoc Senior
Noteholder Parties and the Creditors Committee. |
10
EXHIBIT A
|
|
|
CERTAIN DEFINITIONS |
|
|
2025 Senior Notes |
|
The 3.500% Senior Notes due 2025 issued by the Debtor pursuant to the Senior Notes Indenture. |
|
|
2026 Senior Notes |
|
The 1.800% Senior Notes due 2026 issued by the Debtor pursuant to the Senior Notes Indenture. |
|
|
2028 Senior Notes |
|
The 2.100% Senior Notes due 2028 issued by the Debtor pursuant to the Senior Notes Indenture. |
|
|
2028 Senior Fixed Rate/Floating Rate Notes |
|
The 4.345% Senior Fixed Rate/Floating Rate Notes due 2028 issued by the Debtor pursuant to the Senior Notes Indenture, as supplemented by the Senior Notes Supplemental Indenture. |
|
|
2030 Senior Notes |
|
The 3.125% Senior Notes due 2030 issued by the Debtor pursuant to the Senior Notes Indenture. |
|
|
2031 Senior Notes |
|
The 1.800% Senior Notes due 2031 issued by the Debtor pursuant to the Senior Notes Indenture. |
|
|
2033 Senior Fixed Rate/Floating Rate Notes |
|
The 4.570% Senior Fixed Rate/Floating Rate Notes due 2033 issued by the Debtor pursuant to the Senior Notes Indenture, as supplemented by the Senior Notes Supplemental Indenture. |
|
|
Administrative Claim |
|
A Claim for the costs and expenses of administering the Chapter 11 Case pursuant to section 503(b), 507(a)(2), 507(b), or 1114(e)(2) of the Bankruptcy Code, including for the avoidance of doubt all Allowed Professional
Claims. |
|
|
Ad Hoc Group of Senior Noteholders |
|
The ad hoc group of Holders of Senior Note Claims represented by Davis Polk & Wardwell LLP. |
|
|
Agreement Effective Date |
|
As defined in the preamble hereof. |
|
|
Allowed |
|
With reference to any Claim or Interest, (a) any Claim or Interest arising on or before the Plan Effective Date (i) as to which no objection to allowance, priority, or secured status, and no request for estimation or
other challenge, including, without limitation, pursuant to section 502(d) of the Bankruptcy Code or otherwise, has been interposed prior to the Plan Effective Date, or (ii) as to which any objection has been determined by a final order of the
Bankruptcy Court to the extent such objection is determined in favor of the respective Holder, (b) any Claim or Interest that is compromised, settled, or otherwise resolved, (c) any Claim or Interest as to which the liability of the Debtor
and the amount thereof are determined by a final order of a court of competent jurisdiction other than the Bankruptcy Court, or (d) any Claim or Interest expressly allowed hereunder; provided that (x) unless expressly waived by the
Plan, the Allowed amount of Claims or Interests shall be subject to and shall not exceed the limitations under or maximum amounts permitted by the Bankruptcy Code, including sections 502 or 503 thereof, to the extent applicable, and (y) NewCo
and the Liquidating Trust, as applicable, shall retain all claims and defenses with respect to Allowed Claims that are reinstated or otherwise unimpaired pursuant to the Plan. |
11
|
|
|
|
|
Bankruptcy Code |
|
Title 11 of the United States Code, as amended. |
|
|
Bankruptcy Court |
|
As defined in this Term Sheet. |
|
|
Bankruptcy Rules |
|
The Federal Rules of Bankruptcy Procedure, as amended. |
|
|
Boston Private |
|
Boston Private Financial Holdings, Inc. |
|
|
Business Day |
|
Any day other than a Saturday, Sunday, or other day on which commercial banks are authorized to close under the Laws of, or are in fact closed in, the State of New York. |
|
|
Cause of Action |
|
Any claim, action, class action, claim, cross-claim, counterclaim, third-party claim, cause of action, controversy, dispute, demand, right, lien, indemnity, contribution, rights of subrogation, reimbursement, guaranty, suit,
obligation, liability, debt, damager, judgment, loss, cost, attorneys fees and expenses, account, defense, remedy, offset, power, privileges, license, or franchise, in each case, of any kind, character, or nature whatsoever, asserted or
unasserted, accrued or unaccrued, known or unknown, contingent or non-contingent, matured or unmatured, liquidated or unliquidated, disputed or undisputed, foreseen or unforeseen, direct or indirect, choate or
inchoate, secured or unsecured, allowable or disallowable, assertible directly or indirectly (including, without limitation, under alter ego theories), in rem, quasi in rem, in personam, or otherwise, whether arising before, on,
or after the Petition Date, arising under federal or state statutory or common law or any other applicable Law, in contract or in tort, at law, in equity, or pursuant to any other theory or principle of law. For the avoidance of doubt, Causes of
Action include (i) any right of setoff, counterclaim, or recoupment and any Cause of Action for breach of contract or for breach of duty imposed by law or in equity, (ii) the right to object to or otherwise contest Claims or Interests,
(iii) any Cause of Action pursuant to section 362 or chapter 5 of the Bankruptcy Code, (iv) any claim or defense, including fraud, mistake, duress, and usury and any other defense set forth in section 558 of the Bankruptcy Code, and
(v) any claim under any state or foreign law, including for the recovery of any fraudulent transfer or similar theory. |
|
|
Chapter 11 Case |
|
As defined in this Term Sheet. |
|
|
Claim |
|
Any claim, as defined in section 101(5) of the Bankruptcy Code, against the Debtor. |
|
|
Class A Trust Units |
|
As defined in this Term Sheet. |
|
|
Class B Trust Units |
|
As defined in this Term Sheet. |
|
|
Class C Trust Units |
|
As defined in this Term Sheet. |
|
|
Common Equity Interests |
|
All Interests in the Debtor other than the Preferred Equity Interests and Intercompany Interests. |
12
|
|
|
|
|
Conditions Precedent to the Plan Effective Date |
|
As defined in this Term Sheet. |
|
|
Confirmation |
|
Entry of the Confirmation Order on the docket of the Chapter 11 Case. |
|
|
Confirmation Date |
|
The date on which the Bankruptcy Court enters the Confirmation Order on the docket of the Chapter 11 Case, within the meaning of Bankruptcy Rules 5003 and 9021. |
|
|
Confirmation Hearing |
|
The hearing or hearings before the Bankruptcy Court under section 1128 of the Bankruptcy Code at which the Debtor seeks entry of the Confirmation Order. |
|
|
Confirmation Order |
|
The order of the Bankruptcy Court confirming the Plan under section 1129 of the Bankruptcy Code. |
|
|
Consenting Noteholders |
|
Holders of Senior Notes that are party to the RSA. |
|
|
Contributed Assets |
|
As defined in this Term Sheet. |
|
|
Creditors Committee |
|
The official committee of unsecured creditors appointed by the Office of the United States Trustee in the Chapter 11 Case pursuant to section 1102 of the Bankruptcy Code. |
|
|
Debtor |
|
As defined in the preamble hereof. |
|
|
Debtor F Reorganization |
|
As defined in this Term Sheet. |
|
|
Debtor Related Party Claims |
|
Any claims or Causes of Action the Debtor or any of its subsidiaries may have, whether arising prior to, on, or after the Petition Date, against any of its or their Related Parties. |
|
|
Definitive Documents |
|
Has the meaning ascribed to such term in the RSA. |
|
|
Disclosure Statement |
|
The disclosure statement with respect to the Plan. |
|
|
Disclosure Statement Order |
|
An order of the Bankruptcy Court approving the Disclosure Statement as containing adequate information under section 1125 of the Bankruptcy Code and authorizing solicitation of the Plan. |
|
|
Entity |
|
As defined in section 101(15) of the Bankruptcy Code. |
|
|
Exculpated Parties4 |
|
[]. |
|
|
FCB |
|
First Citizens Bank & Trust Company. |
4 |
[Note to Draft: To include the Creditors Committee, its members, the Ad Hoc Group of Senior
Noteholders, and their respective professional advisors.] |
13
|
|
|
|
|
FDIC Claims |
|
All claims against the FDIC, FDIC-R1, FDIC-R2, and FDIC-C, including (x) claims asserted in the proofs of
claim filed with FDIC-R1 and FDIC-R2, (y) claims asserted in the complaint filed in that certain adversary proceeding commenced as case number 23-01137 (MG) before the Bankruptcy Court and currently pending before the United States District Court for the Southern District of New York, and (z) claims asserted in the complaint filed by the Debtor in the
United States District Court for the Northern District of California on or about December 19, 2023, in each case including claims for interest, penalties, fees, and expenses. |
|
|
FDIC-C |
|
The Federal Deposit Insurance Corporation, acting in its corporate capacity. |
|
|
FDIC-R1 |
|
The Federal Deposit Insurance Corporation, acting in its capacity as receiver for Silicon Valley Bank. |
|
|
FDIC-R2 |
|
The Federal Deposit Insurance Corporation, acting in its capacity as receiver for Silicon Valley Bridge Bank, N.A. |
|
|
General Unsecured Claim |
|
Any unsecured Claim against the Debtor that is not: (a) paid in full prior to the Plan Effective Date pursuant to an order of the
Bankruptcy Court; (b) an Administrative Claim; (c) a Professional Fee Claim; (d) a Priority Tax Claim; (e) a Secured Claim; (f) an Other Priority Claim; (g) a Subordinated Note Claim; (h) an Intercompany Claim;
(i) a Section 510(b) Claim; or (i) any other Claim that is subordinated or entitled to priority under the Bankruptcy Code or any order of the Bankruptcy Court.
For the avoidance of doubt, all Senior Note Claims shall be deemed to be Allowed General Unsecured Claims, and Preferred Equity Interests are not General
Unsecured Claims. |
|
|
Governmental Unit |
|
As defined in section 101(27) of the Bankruptcy Code. |
|
|
GUC Cash-Out |
|
As defined in this Term Sheet. |
|
|
Holder |
|
An Entity holding a Claim or an Interest, as applicable. |
|
|
Intercompany Claim |
|
Any Claim held by the Debtor or an Affiliate of the Debtor against the Debtor or an Affiliate of the Debtor. |
|
|
Intercompany Interest |
|
Any Interest held by the Debtor or an Affiliate of the Debtor in the Debtor or an Affiliate of the Debtor. |
|
|
Interest |
|
Any equity security (as defined in section 101(16) of the Bankruptcy Code) in the Debtor and any other rights, options, warrants, stock appreciation rights, phantom stock rights, restricted stock units, redemption rights, repurchase
rights, convertible, exercisable, or exchangeable securities, or other agreements, arrangements, or commitments of any character relating to, or whose value is related to, any such interest or other ownership interest in the Debtor. |
14
|
|
|
Law |
|
Any federal, state, local, or foreign law (including common law), statute, code, ordinance, rule, regulation, order, ruling, treaty, or judgment, in each case, that is validly adopted, promulgated, issued, or entered by a
governmental authority of competent jurisdiction (including the Bankruptcy Court). |
|
|
Liquidating Trust |
|
As defined in this Term Sheet. |
|
|
MoffetNathanson |
|
As defined in this Term Sheet. |
|
|
NewCo Board |
|
As defined in this Term Sheet. |
|
|
New Governance Documents |
|
As defined in this Term Sheet. |
|
|
NewCo Common Stock |
|
As defined in this Term Sheet. |
|
|
NewCo Debt |
|
As defined in this Term Sheet. |
|
|
NewCo Debt Documents |
|
As defined in this Term Sheet. |
|
|
NewCo Transaction |
|
As defined in this Term Sheet. |
|
|
Other Priority Claim |
|
Any Claim other than an Administrative Claim or a Priority Tax Claim entitled to priority in right of payment under section 507(a) of the Bankruptcy Code. |
|
|
Petition Date |
|
The date of the commencement of the Chapter 11 Case. |
|
|
Plan |
|
As defined in this Term Sheet. |
|
|
Plan Effective Date |
|
The date that is the first Business Day after the Confirmation Date on which all Conditions Precedent to the Plan Effective Date have been satisfied or waived in accordance with the Plan, this Term Sheet, and the Definitive
Documents. |
|
|
Plan Supplement |
|
Any compilation of documents and forms of documents, agreements, schedules, and exhibits to the Plan, which shall be filed by the Debtor prior to the Confirmation Hearing, with additional documents filed with the Bankruptcy Court
prior to the Plan Effective Date as amendments to the Plan Supplement, each of which shall be consistent in all respects with, and shall otherwise contain, the terms and conditions and be subject to the consent rights set forth in the RSA and this
Term Sheet, as applicable. |
|
|
Preferred Equity |
|
The Series A Preferred Equity, Series B Preferred Equity, Series C Preferred Equity, Series D Preferred Equity, and Series E Preferred Equity. |
|
|
Preferred Equity Interest |
|
Any Interest on account of the Preferred Equity. |
|
|
Priority Claim |
|
Any Priority Tax Claim, Other Priority Claim, or other Claim entitled to priority under the Bankruptcy Code or order of the Bankruptcy Court. |
15
|
|
|
|
|
Priority Tax Claim |
|
Any Claim of a Governmental Unit of the kind specified in section 507(a)(8) of the Bankruptcy Code. |
|
|
Professional Claim |
|
Any Claim by a professional seeking an award by the Bankruptcy Court of compensation for services rendered or reimbursement of expenses incurred through and including the Confirmation Date under sections 328, 330, 331, 503(b)(2),
503(b)(3), 503(b)(4), or 503(b)(5) of the Bankruptcy Code. |
|
|
Professional Fees and Expenses |
|
The prepetition and postpetition reasonable and documented fees and expenses of (a) the Senior Noteholder Professionals (including such fees and expenses of Davis Polk & Wardwell LLP, PJT Partners LP and
Seward & Kissel LLP) and (b) professionals of the Subordinated Note Trustees (including the fees and expenses of Pryor Cashman LLP). |
|
|
Related Parties |
|
With respect to an Entity, and in each case solely in its capacity as such, (a) each such Entitys predecessors, successors, assigns, subsidiaries, affiliates, managed accounts or funds, current and former officers, board
members, directors, principals, agents, independent contractors, members, partners (general or limited), managers, employees, subcontractors, advisory board members, financial advisors, attorneys and legal representatives, accountants, investment
bankers, consultants, fund advisors, trusts, trustees, beneficiaries, investment committee members, affiliated investment funds or investment vehicles, participants, management companies, direct or indirect owners and/or equityholders, investment or
fund advisors, representatives, and other professionals and advisors and any such Entitys respective heirs, executors, estates, and nominees, and (b) the Related Parties of each of the foregoing. |
|
|
Required Ad Hoc Senior Noteholder Parties |
|
At any time, Consenting Noteholders that are members of the Ad Hoc Group of Senior Noteholders holding greater than 50% in amount of Senior Notes held by all Consenting Noteholders that are members of the Ad Hoc Group of Senior
Noteholders at such time. |
|
|
Restructuring |
|
As defined in the preamble hereof. |
|
|
Restructuring Transactions |
|
As defined in the preamble hereof. |
|
|
Retained Causes of Action |
|
As defined in this Term Sheet. |
|
|
Retained Debtor Assets |
|
As defined in this Term Sheet. |
|
|
RSA |
|
As defined in the preamble hereof. |
|
|
SEC |
|
The Securities and Exchange Commission. |
|
|
Section 1145 Exemption |
|
The exemption from the requirement to register issued securities under the Securities Act and any other applicable Law requiring registration for the offer or sale of a security or registration or licensing of an issuer of,
underwriter of, or broker or dealer in a security established pursuant to section 1145 of the Bankruptcy Code. |
16
|
|
|
|
|
Section 510(b) Claim |
|
Any Claim against the Debtor subject to subordination under section 510(b) of the Bankruptcy Code. |
|
|
Secured Claim |
|
A Claim that is: (a) secured by a lien on property in which the Debtor has an interest, which lien is valid, perfected, and enforceable pursuant to applicable Law or am order of the Bankruptcy Court, or that is subject to a valid
right of setoff pursuant to section 553 of the Bankruptcy Code, to the extent of the value of the creditors interest in the Debtors interest in such property or to the extent of the amount subject to setoff, as applicable, as determined
pursuant to section 506(a) of the Bankruptcy Code; or (b) Allowed hereunder or by separate order of the Bankruptcy Court as a secured Claim. |
|
|
Securities Act |
|
The Securities Act of 1933, as amended. |
|
|
Senior Note Claim |
|
Any Claim on account of the Senior Notes. |
|
|
Senior Note Trustee Expenses |
|
The reasonable and documented compensation, fees, expenses, disbursements, and claims for indemnity, subrogation, and contribution incurred or owed to the Senior Notes Trustee, whether prior to or after the Petition Date, in each
case under the Senior Notes Indenture and/or the Senior Notes Supplemental Indenture, as applicable. |
|
|
Senior Noteholder Professionals |
|
The professionals of (i) the Senior Notes Trustee (including Seward & Kissel LLP) and (ii) the Ad Hoc Group of Senior Noteholders (including Davis Polk & Wardwell LLP and PJT Partners LP). |
|
|
Senior Notes |
|
The 2025 Senior Notes, 2026 Senior Notes, 2028 Senior Notes, 2028 Senior Fixed Rate/Floating Rate Notes, 2030 Senior Notes, 2031 Senior Notes, and 2033 Senior Fixed Rate/Floating Rate Notes. |
|
|
Senior Notes Indenture |
|
That certain Indenture, dated as of September 20, 2010 (as may be modified, supplemented, or amended), by and between the Debtor and the Senior Notes Trustee. |
|
|
Senior Notes Supplemental Indenture |
|
That certain First Supplemental Indenture, dated as of April 28, 2022, by and between the Debtor and the Senior Notes Trustee. |
|
|
Senior Notes Trustee |
|
U.S. Bank Trust Company, National Association (as successor-in-interest to U.S. Bank National Association), in its capacity as trustee under the Senior
Notes Indenture and Senior Notes Supplemental Indenture, and any predecessor or successor thereto. |
|
|
Series A Preferred Equity |
|
The 5.250% Non-Cumulative Perpetual Series A Preferred Stock issued by the Debtor on December 9, 2019. |
|
|
Series B Preferred Equity |
|
The 4.100% Non-Cumulative Perpetual Series B Preferred Stock issued by the Debtor on February 2, 2021. |
|
|
Series C Preferred Equity |
|
The 4.000% Non-Cumulative Perpetual Series C Preferred Stock issued by the Debtor on May 13, 2021. |
|
|
Series D Preferred Equity |
|
The 4.250% Non-Cumulative Perpetual Series D Preferred Stock issued by the Debtor on October 28, 2021. |
17
|
|
|
|
|
Series E Preferred Equity |
|
The 4.700% Non-Cumulative Perpetual Series E Preferred Stock issued by the Debtor on October 28, 2021. |
|
|
Subordinated Note Claim |
|
Any Claim on account of the Subordinated Notes. |
|
|
Subordinated Note Indentures |
|
The Trust I Indenture, Trust I First Supplemental Indenture, Trust II Indenture, and Trust II First Supplemental Indenture. |
|
|
Subordinated Note Trustees |
|
The Trust I Trustee and Trust II Trustee. |
|
|
Subordinated Note Trustee Expenses |
|
The reasonable and documented compensation, fees, expenses, disbursements, and claims for indemnity, subrogation, and contribution incurred or owed to the Subordinated Note Trustees, whether prior to or after the Petition Date, in
each case under the Subordinated Note Indentures. |
|
|
Subordinated Notes |
|
The Trust I Preferred Securities and Trust II Preferred Securities. |
|
|
SVB Capital |
|
The personnel and funds that comprise the Debtors venture capital and credit investment business. |
|
|
SVBFG |
|
As defined in the preamble hereof. |
|
|
Term Sheet |
|
As defined in the preamble hereof. |
|
|
Transferred LP Interests |
|
As defined in this Term Sheet. |
|
|
Trust I First Supplemental Indenture |
|
That certain First Supplemental Indenture, dated as of July 1, 2021, by and among Boston Private, the Debtor, and the Trust I Trustee. |
|
|
Trust I Indenture |
|
That certain Indenture, dated as of October 12, 2004, by and between Boston Private and SunTrust Bank, as debenture trustee. |
|
|
Trust I Preferred Securities |
|
The junior subordinated convertible debentures due 2034 issued pursuant to the Trust I Indenture, as supplemented by the Trust I First Supplemental Indenture. |
|
|
Trust I Trustee |
|
U.S. Bank, National Association (as successor-in-interest to SunTrust Bank), as debenture trustee under the Trust I Indenture (as supplemented by the
Trust I First Supplemental Indenture), and any predecessor or successor thereto. |
|
|
Trust II First Supplemental Indenture |
|
That certain First Supplemental Indenture, dated as of July 1, 2021, by and among Boston Private, the Debtor, and the Trust II Trustee. |
|
|
Trust II Indenture |
|
That certain Indenture, dated as of September 27, 2005, by and between Boston Private and the Trust II Trustee. |
|
|
Trust II Preferred Securities |
|
The fixed/floating rate junior subordinated debt securities due 2035 issued pursuant to the Trust II Indenture, as supplemented by the Trust II First Supplemental Indenture. |
|
|
Trust II Trustee |
|
Wilmington Trust Company, as trustee under the Trust II Indenture (as supplemented by the Trust II First Supplemental Indenture), and any predecessor or successor thereto. |
18
Exhibit B
Form of Transfer Agreement
TRANSFER AGREEMENT
The undersigned (Transferee) hereby acknowledges that it has read and understands the Restructuring Support
Agreement, dated as of [] (the Agreement),1 by and among the Debtor and the Supporting Parties, including the transferor to the Transferee of any
Claims (each such transferor, a Transferor), agrees to be bound by the terms and conditions of the Agreement to the extent the Transferor was thereby bound, and shall be deemed a Supporting Ad Hoc Group of Senior Noteholder
Member or a Supporting Creditor, as applicable, under the terms of the Agreement.
The Transferee specifically agrees to be bound by the
terms and conditions of the Agreement and makes all representations and warranties contained therein as of the date of the Transfer, including the agreement to be bound by the vote of the Transferor if such vote was cast before the effectiveness of
the Transfer discussed in this transfer agreement.
|
Date Executed: |
|
|
Name: |
Title: |
Notice Address:
E-mail address(es):
|
|
|
Aggregate Amounts Beneficially Owned or Managed on Account
of: |
|
|
Senior Notes |
|
3.500% Senior Notes due 2025: $___________________
1.800% Senior Notes due 2026: $___________________ 2.100% Senior
Notes due 2028: $___________________ 3.125% Senior Notes due 2030: $___________________
1.800% Senior Notes due 2031: $___________________ 4.345% Senior
Fixed/Floating Rate Notes due 2028: $______________ 4.570% Senior Fixed/Floating Rate Notes due 2033: $______________
Total: $_____________________ |
|
|
Liquidation Preferences of Preferred Equity |
|
Series A: $___________________ Series B:
$___________________ Series C: $___________________ Series D:
$___________________ Series E: $___________________
Total: $_____________________ |
1 |
Capitalized terms not used but not otherwise defined in this Transfer Agreement shall have the meanings
ascribed to such terms in the Agreement. |
Exhibit C
Form of Joinder
JOINDER
The undersigned (Joinder Party) hereby acknowledges that it has read and understands the Restructuring Support
Agreement, dated as of [] (the Agreement),1 by and among the Debtor and the Supporting Parties, agrees to be bound by the terms and conditions thereof to the extent
the other Supporting Creditors are thereby bound, and shall be deemed a Supporting Ad Hoc Group of Senior Noteholder Member or a Supporting Creditor, as applicable, under the terms of the Agreement.
The Joinder Party specifically agrees to be bound by the terms and conditions of the Agreement and makes all representations and warranties
contained therein as of the date of this Joinder and any further date specified in the Agreement.
|
Date Executed: |
|
|
Name: |
Title: |
Notice Address:
E-mail address(es):
|
|
|
Aggregate Amounts Beneficially Owned or Managed on
Account of: |
|
|
Senior Notes |
|
3.500% Senior Notes due 2025: $___________________
1.800% Senior Notes due 2026: $___________________ 2.100% Senior
Notes due 2028: $___________________ 3.125% Senior Notes due 2030: $___________________
1.800% Senior Notes due 2031: $___________________ 4.345% Senior
Fixed/Floating Rate Notes due 2028: $______________ 4.570% Senior Fixed/Floating Rate Notes due 2033: $______________
Total: $_____________________ |
|
|
Liquidation Preferences of Preferred Equity |
|
Series A: $___________________ Series B:
$___________________ Series C: $___________________ Series D:
$___________________ Series E: $___________________
Total: $_____________________ |
1 |
Capitalized terms not used but not otherwise defined in this Joinder shall have the meanings ascribed to such
terms in the Agreement. |
CONFIDENTIAL DRAFT Exhibit 99.1 Project Sierra Cleansing Materials
January 2024
CONFIDENTIAL DRAFT Table of Contents SVBFG Direct Equity Investments
SVBFG LP Fund Investments SVBFG Warrant Top 50 Positions SVB Capital Detail Cash Flow Forecast GUC Summary / Other MoffettNathanson 2
SVB Neue Montreal (Headings) Bierstadt (Body) CONFIDENTIAL DRAFT SVBFG
– Direct Equity Investments Latest % of Cum. % Book Cost # of (1) # Anonymized Name Description Value Basis Invest. Date Total of Total Invest. 1 Company 1 Startup accelerator and seed fund $38 $25 2019 15% 15% 1 2 Company 2 End-to-end trading
platform for private company secondary transactions 27 22 2021 11% 27% 2 3 Company 3 Insurance company serving early stage startups 21 29 2018 8% 35% 4 4 Company 4 Payment facilitation-as-a-service platform for SaaS and fintech companies 13 13 2022
5% 40% 2 5 Company 5 Startup accelerator and seed fund 12 2 2015 5% 45% 1 6 Company 6 Focused on the digital currency market 10 1 2009 4% 49% 1 Investment management platform tailored to emerging managers to 7 Company 7 9 9 2021 4% 53% 2 streamline
private market transactions 8 Company 8 Revenue-based financing lender to small technology companies 7 7 2018 3% 56% 1 9 Company 9 Startup accelerator and seed fund 7 – 2012 3% 59% 1 Talent plalform to pair companies with executives for
full-time, fractional, 10 Company 10 5 5 2020 2% 61% 4 and board roles Top 10 Total Direct Equity Investments $149 $114 61% 61% 19 (2) Public and Private Securities from Warrant Exercise 34 n.a. 245 14% 75% (3) Conversion Rights 13 n.a. 6 5% 80% All
Other Direct Equity Investments n.a. 48 20% 100% 104 Total Direct Equity Investments $244 n.a. 100% 100% 374 Note: Dollars in millions. As of September 30, 2023. (1) Direct investments in private companies do not have a readily determinable fair
value. Investments are typically measured at cost / time of investment, less impairment, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments from the same issuer. (2) Represents
direct equity investments in public and private securities resulting from the exercise of warrants. 3 SVB Financial Group Proprietary and Confidential (3) Represents option value of conversion right held at SVBFG. The associated convertible debt is
held at SVB’s commercial bank. If converted to equity, SVBFG will own 100% of the equity, and owe the principal amount of the convertible debt to SVB commercial bank.
CONFIDENTIAL DRAFT Table of Contents SVBFG Direct Equity Investments
SVBFG LP Fund Investments SVBFG Warrant Top 50 Positions SVB Capital Detail Cash Flow Forecast GUC Summary / Other MoffettNathanson 4
SVB Neue Montreal (Headings) Bierstadt (Body) CONFIDENTIAL DRAFT SVBFG
– Limited Partner Fund Investments Market Latest % of Cum. % # of # Anonymized Name Type Value Invest. Date Total of Total Funds 1 Fund 1 VC Funds - Warehouse $22 2008 17% 17% 1 2 Fund 2 VC Funds - Warehouse 17 2009 13% 30% 1 3 Fund 3 VC Funds
- Warehouse 17 2009 13% 43% 3 4 Fund 4 VC Funds - Warehouse 7 2008 5% 48% 1 5 Fund 5 Carry Interest Funds 4 N/A 3% 51% 3 6 Fund 6 VC Funds - Warehouse 4 2007 3% 54% 1 7 Fund 7 VC Funds - Others 4 2009 3% 56% 2 8 Fund 8 VC Funds - Warehouse 4 2007 3%
59% 1 9 Fund 9 Carry Interest Funds 2 N/A 2% 61% 1 10 Fund 10 VC Funds - Warehouse 2 2008 2% 62% 1 Top 10 Total LP Partner Fund Commitments $82 62% 62% 15 All Other Fund Commitments $49 38% 100% Total Fund Commitments $132 100% 100% 5 SVB Financial
Group Proprietary and Confidential Note: Dollars in millions. As of September 30, 2023.
CONFIDENTIAL DRAFT Table of Contents SVBFG Direct Equity Investments
SVBFG LP Fund Investments SVBFG Warrant Top 50 Positions SVB Capital Detail Cash Flow Forecast GUC Summary / Other MoffettNathanson 6
SVB Neue Montreal (Headings) Bierstadt (Body) CONFIDENTIAL DRAFT
Warrants – Top 50 Positions La Last st U Un nd derl erly yiin ng g R Re emai maining ning Public / Fair Value @ Underlying Risk Free Assumed # Company Sector Industry Class Public / # Shares Fair Value @ Underlying A Ass sset et V Valuati
aluatio on n Strike Price Y Yea ears rs @ @ Risk Free Assumed (1) Private 9/30/23 Asset Price Rate Volatility (1) # Company Sector Industry Class Private # Shares 9/30/23 Asset Price D Da ate te Strike Price 9/30/ 9/30/23 23 Rate Volatility $ 138.6
Subtotal, Top 50 Warrant Positions $ 318.8 Grand Total - All Warrants on SVBFG Balance Sheet Warrant Position 1 Common Private 725,000 $ 19.8 $ 6.87 1.40 5.52% 39.15% Warrant Position 1 Preferred Private 42,500 0.8 16.23 1.40 5.52% 39.15% 1 Warrant
Position 1 Total Tech Software 767,500 $ 20.6 $ 39.14 12/5/2022 $ 7.39 Warrant Position 2 Common Private 360,010 $ 5.5 $ 0.08 2.37 5.46% 39.15% Warrant Position 2 Common Private 231,460 3.5 0.15 4.50 5.10% 39.15% Warrant Position 2 Common Private
196,370 3.0 0.08 3.42 5.28% 39.15% 2 Warrant Position 2 Total Tech Software 787,840 $ 12.1 $ 18.33 4/1/2023 $ 0.10 Warrant Position 3 Common Private 260,580 $ 8.5 $ 0.08 5.15 5.01% 39.15% 3 Warrant Position 3 Total Tech Software 260,580 $ 8.5 $
38.71 4/15/2023 $ 0.08 Warrant Position 4 Common Private 564,728 $ 8.0 $ 0.03 4.32 5.14% 39.15% 4 Warrant Position 4 Total Tech Software 564,728 $ 8.0 $ 16.97 7/31/2022 $ 0.03 Warrant Position 5 Common Private 1,000,000 $ 7.5 $ 0.01 4.42 5.14%
24.29% 5 Warrant Position 5 Total Tech Software 1,000,000 $ 7.5 $ 7.31 12/12/2022 $ 0.01 Warrant Position 6 Common Private 14,010 $ 2.9 $ 8.18 3.58 5.28% 31.84% Warrant Position 6 Common Private 13,458 2.8 7.84 2.90 5.39% 31.84% Warrant Position 6
Common Private 6,707 1.3 25.93 5.58 4.97% 31.84% 6 Warrant Position 6 Total Tech Energy and Resource 34,175 $ 7.0 $ 252.67 10/1/2022 $ 11.53 Innovation Warrant Position 7 Common Private 2,545,450 $ 3.6 $ 0.11 6.74 4.86% 39.15% 7 Warrant Position 7
Total Tech Software 2,545,450 $ 3.6 $ 1.79 12/8/2022 $ 0.11 Warrant Position 8 Common Private 518,480 $ 2.6 $ 0.54 11.68 4.63% 39.15% Warrant Position 8 Preferred Private 190,320 0.9 0.92 10.59 4.67% 39.15% 8 Warrant Position 8 Total Tech Software
708,800 $ 3.5 $ 6.48 11/30/2021 $ 0.64 Warrant Position 9 Preferred Private 900,000 $ 2.0 $ 0.30 7.16 4.82% 24.29% Warrant Position 9 Preferred Private 512,048 1.0 0.83 8.19 4.77% 24.29% Warrant Position 9 Preferred Private 332,433 0.2 2.96 9.26
4.73% 24.29% 9 Warrant Position 9 Total Tech Software 1,744,481 $ 3.2 $ 2.96 12/30/2022 $ 0.96 7 SVB Financial Group Proprietary and Confidential Note: Dollars in millions, except for per share amounts. As of September 30, 2023. (1) Amount in
“Total” rows represents weighted average strike price.
SVB Neue Montreal (Headings) Bierstadt (Body) CONFIDENTIAL DRAFT
Warrants – Top 50 Positions (Cont’d) La Last st U Un nd derl erly yiin ng g R Re emai maining ning Public / Fair Value @ Underlying Risk Free Assumed # Company Sector Industry Class Public / # Shares Fair Value @ Underlying A Ass sset et
V Valuati aluatio on n Strike Price Y Yea ears rs @ @ Risk Free Assumed (1) Private 9/30/23 Asset Price Rate Volatility (1) # Company Sector Industry Class Private # Shares 9/30/23 Asset Price D Da ate te Strike Price 9/30/ 9/30/23 23 Rate
Volatility Warrant Position 10 Common Private 627,000 $ 1.3 $ 0.15 5.44 4.99% 39.15% Warrant Position 10 Common Private 627,000 1.2 0.27 6.50 4.88% 39.15% Warrant Position 10 Preferred Private 50,000 0.1 0.48 3.71 5.25% 39.15% 10 Warrant Position 10
Total Tech Software 1,304,000 $ 2.7 $ 2.62 4/1/2022 $ 0.22 Warrant Position 11 Preferred Private 523,560 $ 1.5 $ 0.48 1.60 5.51% 39.15% Warrant Position 11 Common Private 483,870 0.8 0.19 10.42 4.68% 39.15% Warrant Position 11 Common Private 194,444
0.3 0.54 12.01 4.62% 39.15% 11 Warrant Position 11 Total Tech Software 1,201,874 $ 2.6 $ 2.89 12/31/2022 $ 0.37 Warrant Position 12 Preferred Private 211,353 $ 2.1 $ 0.99 1.73 5.51% 39.15% Warrant Position 12 Preferred Private 69,228 0.3 8.59 5.36
4.99% 39.15% Warrant Position 12 Preferred Private 21,873 0.2 3.20 3.57 5.28% 39.15% 12 Warrant Position 12 Total Tech Software 302,454 $ 2.5 $ 12.54 4/30/2023 $ 2.89 Warrant Position 13 Common Private 89,843 $ 1.5 $ 5.08 5.87 4.93% 31.84% Warrant
Position 13 Common Private 32,000 0.6 0.27 2.73 5.42% 31.84% Warrant Position 13 Common Private 20,000 0.4 1.42 4.16 5.17% 31.84% 13 Warrant Position 13 Total Tech Energy and Resource 141,843 $ 2.5 $ 23.77 6/15/2022 $ 3.48 Innovation Warrant
Position 14 Common Private 267,700 $ 2.4 $ 0.09 4.79 5.07% 39.15% 14 Warrant Position 14 Total Tech Software 267,700 $ 2.4 $ 10.85 2/28/2022 $ 0.09 Warrant Position 15 Common Private 215,979 $ 1.1 $ 0.56 4.73 5.07% 39.15% Warrant Position 15 Common
Private 111,229 0.6 0.56 5.51 4.97% 39.15% Warrant Position 15 Preferred Private 66,488 0.3 1.50 1.01 5.57% 39.15% Warrant Position 15 Common Private 100,000 0.2 6.47 8.83 4.74% 39.15% Warrant Position 15 Preferred Private 34,004 0.1 2.65 2.92 5.39%
39.15% 15 Warrant Position 15 Total Tech Software 527,700 $ 2.3 $ 6.67 9/30/2021 $ 1.93 Warrant Position 16 Common Private 140,000 $ 0.9 $ 0.22 4.11 5.17% 39.15% Warrant Position 16 Common Private 69,290 0.5 0.08 0.25 5.55% 39.15% Warrant Position
16 Common Private 63,584 0.4 0.26 5.71 4.95% 39.15% Warrant Position 16 Common Private 26,830 0.2 0.95 1.85 5.50% 39.15% Warrant Position 16 Common Private 13,415 0.1 0.95 3.22 5.32% 39.15% Warrant Position 16 Common Private 50,000 0.1 6.61 8.08
4.78% 39.15% 16 Warrant Position 16 Total Tech Software 363,119 $ 2.2 $ 8.23 7/31/2023 $ 1.16 8 SVB Financial Group Proprietary and Confidential Note: Dollars in millions, except for per share amounts. As of September 30, 2023. (1) Amount in
“Total” rows represents weighted average strike price.
SVB Neue Montreal (Headings) Bierstadt (Body) CONFIDENTIAL DRAFT
Warrants – Top 50 Positions (Cont’d) La Last st U Un nd derl erly yiin ng g R Re emai maining ning Public / Fair Value @ Underlying Risk Free Assumed # Company Sector Industry Class Public / # Shares Fair Value @ Underlying A Ass sset et
V Valuati aluatio on n Strike Price Y Yea ears rs @ @ Risk Free Assumed (1) Private 9/30/23 Asset Price Rate Volatility (1) # Company Sector Industry Class Private # Shares 9/30/23 Asset Price D Da ate te Strike Price 9/30/ 9/30/23 23 Rate
Volatility Warrant Position 17 Common Private 57,437 $ 1.0 $ 2.11 3.92 5.21% 31.84% Warrant Position 17 Common Private 34,948 0.6 2.37 5.22 5.01% 31.84% Warrant Position 17 Common Private 26,973 0.4 5.73 7.33 4.80% 31.84% 17 Warrant Position 17
Total Tech Energy and Resource 119,358 $ 2.1 $ 23.14 2/21/2023 $ 3.00 Innovation Warrant Position 18 Common Private 332,480 $ 0.6 $ 0.52 3.52 5.28% 39.15% Warrant Position 18 Common Private 331,932 0.6 0.63 8.68 4.75% 39.15% Warrant Position 18
Common Private 375,007 0.4 1.82 10.09 4.69% 39.15% Warrant Position 18 Common Private 84,000 0.2 0.15 0.62 5.55% 39.15% Warrant Position 18 Common Private 88,355 0.2 0.63 9.10 4.73% 39.15% Warrant Position 18 Common Private 65,280 0.1 0.67 5.55
4.97% 39.15% Warrant Position 18 Common Private 20,000 0.0 0.15 1.16 5.53% 39.15% Warrant Position 18 Common Private 24,000 0.0 0.67 5.55 4.97% 39.15% 18 Warrant Position 18 Total Tech Software 1,321,054 $ 2.1 $ 2.55 6/30/2022 $ 0.90 Warrant
Position 19 Preferred Private 308,666 $ 1.6 $ 2.18 1.04 5.57% 39.15% Warrant Position 19 Common Private 90,000 0.4 0.74 3.71 5.25% 39.15% 19 Warrant Position 19 Total Tech Software 398,666 $ 2.0 $ 7.91 3/31/2023 $ 1.85 Warrant Position 20 Common
Private 137,250 $ 0.8 $ 0.29 4.98 5.03% 39.15% Warrant Position 20 Common Private 120,267 0.6 1.05 6.48 4.88% 39.15% Warrant Position 20 Common Private 86,510 0.5 0.13 3.13 5.35% 39.15% 20 Warrant Position 20 Total Tech Hardware 344,027 $ 1.9 $ 7.11
6/20/2018 $ 0.51 Warrant Position 21 Common Private 525,017 $ 0.7 $ 0.16 3.14 5.35% 30.53% Warrant Position 21 Common Private 439,080 0.5 0.40 6.54 4.88% 30.53% Warrant Position 21 Common Private 791,196 0.4 1.15 4.89 5.03% 30.53% Warrant Position
21 Common Private 210,000 0.3 0.18 3.14 5.35% 30.53% Warrant Position 21 Common Private 184,924 0.1 1.64 6.69 4.86% 30.53% 21 Warrant Position 21 Total Life Sciences and Healthcare 2,150,217 $ 1.9 $ 1.66 6/30/2023 $ 0.70 Healthcare Warrant Position
22 Preferred Private 67,590 $ 1.8 $ 0.36 4.04 5.17% 39.15% Warrant Position 22 Common Private 54,460 0.0 0.76 6.58 4.88% 39.15% 22 Warrant Position 22 Total Tech Software 122,050 $ 1.8 $ 18.25 10/3/2022 $ 0.54 9 SVB Financial Group Proprietary and
Confidential Note: Dollars in millions, except for per share amounts. As of September 30, 2023. (1) Amount in “Total” rows represents weighted average strike price.
SVB Neue Montreal (Headings) Bierstadt (Body) CONFIDENTIAL DRAFT
Warrants – Top 50 Positions (Cont’d) La Last st U Un nd derl erly yiin ng g R Re emai maining ning Public / Fair Value @ Underlying Risk Free Assumed # Company Sector Industry Class Public / # Shares Fair Value @ Underlying A Ass sset et
V Valuati aluatio on n Strike Price Y Yea ears rs @ @ Risk Free Assumed (1) Private 9/30/23 Asset Price Rate Volatility (1) # Company Sector Industry Class Private # Shares 9/30/23 Asset Price D Da ate te Strike Price 9/30/ 9/30/23 23 Rate
Volatility Warrant Position 23 Preferred Private 91,702 $ 1.6 $ 1.15 6.47 4.88% 24.29% Warrant Position 23 Preferred Private 17,698 0.2 7.61 10.31 4.68% 24.29% 23 Warrant Position 23 Total Prof. Svcs. Prof. Svcs. 109,400 $ 1.8 $ 17.83 9/9/2022 $
2.19 Warrant Position 24 Common Private 496,450 $ 1.8 $ 0.15 5.32 4.99% 39.15% 24 Warrant Position 24 Total Tech Software 496,450 $ 1.8 $ 4.39 11/30/2022 $ 0.15 Warrant Position 25 Common Private 339,587 $ 1.2 $ 0.01 2.28 5.47% 39.15% Warrant
Position 25 Common Private 107,151 0.4 0.37 4.53 5.10% 39.15% Warrant Position 25 Common Private 43,170 0.1 0.98 5.83 4.95% 39.15% 25 Warrant Position 25 Total Tech Software 489,908 $ 1.7 $ 4.36 11/9/2021 $ 0.17 Warrant Position 26 Common Private
408,902 $ 0.8 $ 1.14 7.84 4.78% 39.15% Warrant Position 26 Common Private 166,667 0.4 0.36 0.67 5.55% 39.15% Warrant Position 26 Common Private 125,171 0.3 0.52 2.17 5.47% 39.15% Warrant Position 26 Common Private 38,513 0.0 3.44 8.73 4.75% 39.15%
26 Warrant Position 26 Total Tech Software 739,253 $ 1.6 $ 3.40 6/30/2022 $ 0.98 Warrant Position 27 Preferred Private 79,530 $ 1.6 $ 5.68 4.84 5.03% 24.29% 27 Warrant Position 27 Total Tech Software 79,530 $ 1.6 $ 29.03 9/24/2020 $ 5.68 Warrant
Position 28 Common Private 416,560 $ 1.0 $ 0.03 4.76 5.07% 39.15% Warrant Position 28 Common Private 100,168 0.2 0.44 7.01 4.84% 39.15% Warrant Position 28 Common Private 85,020 0.2 0.12 5.46 4.97% 39.15% 28 Warrant Position 28 Total Tech Software
601,748 $ 1.4 $ 2.94 4/11/2022 $ 0.11 Warrant Position 29 Common Private 100,000 $ 0.9 $ 0.23 5.59 4.97% 39.15% Warrant Position 29 Common Private 40,000 0.3 0.23 5.82 4.95% 39.15% Warrant Position 29 Common Private 22,998 0.2 0.75 6.73 4.86% 39.15%
29 Warrant Position 29 Total Tech Software 162,998 $ 1.4 $ 10.57 6/1/2022 $ 0.30 Warrant Position 30 Common Private 640,010 $ 1.0 $ 0.15 4.65 5.07% 39.15% Warrant Position 30 Common Private 314,524 0.4 0.73 6.39 4.90% 39.15% 30 Warrant Position 30
Total Tech Software 954,534 $ 1.4 $ 2.01 9/30/2022 $ 0.34 Warrant Position 31 Preferred Private 9,793 $ 1.4 $ 13.26 2.67 5.42% 39.15% 31 Warrant Position 31 Total Tech Software 9,793 $ 1.4 $ 177.27 5/31/2023 $ 13.26 10 SVB Financial Group
Proprietary and Confidential Note: Dollars in millions, except for per share amounts. As of September 30, 2023. (1) Amount in “Total” rows represents weighted average strike price.
SVB Neue Montreal (Headings) Bierstadt (Body) CONFIDENTIAL DRAFT
Warrants – Top 50 Positions (Cont’d) La Last st U Un nd derl erly yiin ng g R Re emai maining ning Public / Fair Value @ Underlying Risk Free Assumed # Company Sector Industry Class Public / # Shares Fair Value @ Underlying A Ass sset et
V Valuati aluatio on n Strike Price Y Yea ears rs @ @ Risk Free Assumed (1) Private 9/30/23 Asset Price Rate Volatility (1) # Company Sector Industry Class Private # Shares 9/30/23 Asset Price D Da ate te Strike Price 9/30/ 9/30/23 23 Rate
Volatility Warrant Position 32 Preferred Private 112,316 $ 0.5 $ 0.53 (0.05) 5.55% 30.53% Warrant Position 32 Preferred Private 118,363 0.5 1.18 1.64 5.51% 30.53% Warrant Position 32 Common Private 130,262 0.4 1.08 3.92 5.21% 30.53% 32 Warrant
Position 32 Total Life Sciences and Healthcare 360,941 $ 1.4 $ 5.37 1/2/2023 $ 0.94 Healthcare Warrant Position 33 Common Private 593,919 $ 0.8 $ 2.40 7.26 4.82% 39.15% Warrant Position 33 Common Private 120,420 0.3 0.24 6.23 4.92% 39.15% Warrant
Position 33 Common Private 40,278 0.1 1.60 1.66 5.51% 39.15% Warrant Position 33 Common Private 109,295 0.1 5.26 7.99 4.78% 39.15% Warrant Position 33 Common Private 27,028 0.0 1.85 3.14 5.35% 39.15% Warrant Position 33 Common Private 20,000 0.0
1.50 0.58 5.55% 39.15% Warrant Position 33 Common Private 12,670 0.0 1.23 4.15 5.17% 39.15% 33 Warrant Position 33 Total Tech Software 923,610 $ 1.3 $ 3.35 7/1/2022 $ 2.37 Warrant Position 34 Common Private 54,466 $ 0.6 $ 0.15 0.55 5.55% 39.15%
Warrant Position 34 Common Private 35,073 0.4 0.15 2.31 5.47% 39.15% Warrant Position 34 Common Private 17,355 0.2 3.17 9.25 4.73% 39.15% Warrant Position 34 Common Private 9,835 0.1 2.78 3.21 5.32% 39.15% Warrant Position 34 Common Private 9,835
0.0 13.63 3.64 5.25% 39.15% 34 Warrant Position 34 Total Tech Software 126,564 $ 1.3 $ 13.50 12/21/2021 $ 1.82 Warrant Position 35 Preferred Private 66,987 $ 1.3 $ 0.59 0.22 5.55% 39.15% 35 Warrant Position 35 Total Tech Hardware 66,987 $ 1.3 $
23.28 4/21/2023 $ 0.59 Warrant Position 36 Preferred Private 203,389 $ 1.1 $ 0.89 11.09 4.65% 39.15% Warrant Position 36 Common Private 63,000 0.1 4.99 14.11 4.60% 39.15% 36 Warrant Position 36 Total Tech Software 266,389 $ 1.2 $ 6.72 6/30/2022 $
1.86 Warrant Position 37 Common Private 11,298 $ 0.4 $ 10.90 7.25 4.82% 39.15% Warrant Position 37 Common Private 6,600 0.3 2.17 2.72 5.42% 39.15% Warrant Position 37 Common Private 5,750 0.2 5.29 4.22 5.14% 39.15% Warrant Position 37 Common Private
4,542 0.2 7.27 6.14 4.92% 39.15% Warrant Position 37 Common Private 1,500 0.1 5.29 4.81 5.07% 39.15% 37 Warrant Position 37 Total Tech Software 29,690 $ 1.2 $ 54.95 5/31/2022 $ 7.03 Warrant Position 38 Common Private 41,419 $ 0.8 $ 0.39 7.42 4.80%
39.15% Warrant Position 38 Common Private 18,782 0.4 1.83 8.69 4.75% 39.15% 38 Warrant Position 38 Total Tech Software 60,201 $ 1.2 $ 24.73 2/24/2023 $ 0.84 11 SVB Financial Group Proprietary and Confidential Note: Dollars in millions, except for
per share amounts. As of September 30, 2023. (1) Amount in “Total” rows represents weighted average strike price.
SVB Neue Montreal (Headings) Bierstadt (Body) CONFIDENTIAL DRAFT
Warrants – Top 50 Positions (Cont’d) La Last st U Un nd derl erly yiin ng g R Re emai maining ning Public / Fair Value @ Underlying Risk Free Assumed # Company Sector Industry Class Public / # Shares Fair Value @ Underlying A Ass sset et
V Valuati aluatio on n Strike Price Y Yea ears rs @ @ Risk Free Assumed (1) Private 9/30/23 Asset Price Rate Volatility (1) # Company Sector Industry Class Private # Shares 9/30/23 Asset Price D Da ate te Strike Price 9/30/ 9/30/23 23 Rate
Volatility Warrant Position 39 Common Private 128,690 $ 0.5 $ 1.55 5.35 4.99% 41.63% Warrant Position 39 Preferred Private 118,483 0.5 1.27 0.32 5.60% 41.63% Warrant Position 39 Common Private 44,726 0.2 1.81 7.25 4.82% 41.63% 39 Warrant Position 39
Total Life Sciences and Healthcare 291,899 $ 1.1 $ 5.87 6/30/2023 $ 1.47 Healthcare Warrant Position 40 Common Private 18,216 $ 1.1 $ 7.73 5.70 4.95% 39.15% 40 Warrant Position 40 Total Tech Software 18,216 $ 1.1 $ 79.00 1/27/2021 $ 7.73 Warrant
Position 41 Common Private 170,130 $ 0.5 $ 0.08 0.64 5.55% 39.15% Warrant Position 41 Common Private 98,029 0.3 0.49 4.18 5.17% 39.15% Warrant Position 41 Common Private 84,080 0.2 0.50 6.50 4.88% 39.15% Warrant Position 41 Common Private 55,209 0.1
0.39 1.54 5.52% 39.15% 41 Warrant Position 41 Total Tech Software 407,448 $ 1.1 $ 3.50 5/7/2021 $ 0.31 Warrant Position 42 Common Public 40,000 $ 1.1 $ 9.79 4.85 4.61% 41.63% 42 Warrant Position 42 Total Life Sciences and Healthcare 40,000 $ 1.1 $
34.16 8/31/2023 $ 9.79 Healthcare Warrant Position 43 Common Private 545,620 $ 0.9 $ 0.36 9.38 4.72% 39.15% Warrant Position 43 Common Private 252,811 0.2 2.21 11.20 4.64% 39.15% 43 Warrant Position 43 Total Tech Software 798,431 $ 1.1 $ 2.21
12/9/2022 $ 0.95 Warrant Position 44 Common Private 82,974 $ 0.8 $ 0.86 3.92 5.21% 39.15% Warrant Position 44 Common Private 36,088 0.3 2.17 5.59 4.97% 39.15% 44 Warrant Position 44 Total Tech Software 119,062 $ 1.1 $ 11.73 2/28/2023 $ 1.26 Warrant
Position 45 Common Private 140,589 $ 0.3 $ 1.54 6.48 4.88% 39.15% Warrant Position 45 Common Private 91,447 0.2 0.79 4.65 5.07% 39.15% Warrant Position 45 Common Private 108,558 0.2 1.54 5.91 4.93% 39.15% Warrant Position 45 Common Private 124,913
0.2 2.12 7.66 4.79% 39.15% Warrant Position 45 Common Private 79,944 0.1 2.12 7.66 4.79% 39.15% Warrant Position 45 Common Private 54,279 0.1 1.54 5.91 4.93% 39.15% 45 Warrant Position 45 Total Tech Software 599,730 $ 1.1 $ 3.44 10/6/2022 $ 1.62
Warrant Position 46 Common Private 1,676,680 $ 0.7 $ 0.17 6.23 4.92% 39.15% Warrant Position 46 Common Private 484,000 0.2 0.09 0.90 5.61% 39.15% Warrant Position 46 Common Private 300,000 0.1 0.09 2.42 5.46% 39.15% 46 Warrant Position 46 Total Tech
Hardware 2,460,680 $ 1.1 $ 0.64 6/30/2023 $ 0.15 12 SVB Financial Group Proprietary and Confidential Note: Dollars in millions, except for per share amounts. As of September 30, 2023. (1) Amount in “Total” rows represents weighted
average strike price.
SVB Neue Montreal (Headings) Bierstadt (Body) CONFIDENTIAL DRAFT
Warrants – Top 50 Positions (Cont’d) La Last st U Un nd derl erly yiin ng g R Re emai maining ning Public / Fair Value @ Underlying Risk Free Assumed # Company Sector Industry Class Public / # Shares Fair Value @ Underlying A Ass sset et
V Valuati aluatio on n Strike Price Y Yea ears rs @ @ Risk Free Assumed (1) Private 9/30/23 Asset Price Rate Volatility (1) # Company Sector Industry Class Private # Shares 9/30/23 Asset Price D Da ate te Strike Price 9/30/ 9/30/23 23 Rate
Volatility Warrant Position 47 Common Private 60,000 $ 0.3 $ 0.66 4.34 5.14% 39.15% Warrant Position 47 Common Private 55,160 0.3 1.21 9.49 4.72% 39.15% Warrant Position 47 Common Private 34,755 0.2 1.21 9.21 4.73% 39.15% Warrant Position 47 Common
Private 30,945 0.2 0.80 8.86 4.74% 39.15% Warrant Position 47 Common Private 12,558 0.0 7.31 10.93 4.66% 39.15% 47 Warrant Position 47 Total Tech Software 193,418 $ 1.0 $ 7.31 9/1/2022 $ 1.37 Warrant Position 48 Preferred Private 55,000 $ 0.5 $ 1.26
5.67 4.95% 31.84% Warrant Position 48 Preferred Private 53,455 0.5 3.10 6.48 4.88% 31.84% 48 Warrant Position 48 Total Tech Energy and Resource 108,455 $ 1.0 $ 13.07 9/20/2022 $ 2.17 Innovation Warrant Position 49 Common Private 787,500 $ 0.6 $ 2.89
9.43 4.72% 30.53% Warrant Position 49 Common Private 1,125,000 0.4 4.00 8.08 4.78% 30.53% 49 Warrant Position 49 Total Life Sciences and Healthcare 1,912,500 $ 1.0 $ 2.89 3/3/2023 $ 3.54 Healthcare Warrant Position 50 Common Private 112,240 $ 0.4 $
2.29 8.41 4.76% 39.15% Warrant Position 50 Common Private 63,600 0.3 0.23 3.74 5.25% 39.15% Warrant Position 50 Common Private 50,857 0.2 0.77 5.45 4.97% 39.15% Warrant Position 50 Common Private 14,093 0.1 2.29 8.41 4.76% 39.15% 11/5/2021 50
Warrant Position 50 Total Tech Software 240,790 $ 1.0 $ 6.13 11/5/2021 $ 1.42 13 SVB Financial Group Proprietary and Confidential Note: Dollars in millions, except for per share amounts. As of September 30, 2023. (1) Amount in “Total”
rows represents weighted average strike price.
CONFIDENTIAL DRAFT Table of Contents SVBFG Direct Equity Investments
SVBFG LP Fund Investments SVBFG Warrant Top 50 Positions SVB Capital Detail Cash Flow Forecast GUC Summary / Other MoffettNathanson 14
SVB Neue Montreal (Headings) Bierstadt (Body) CONFIDENTIAL DRAFT
Summary of SVB Capital Bids Key Term Bidder A Bidder B Financial services focused investment firm Technology focused investment firm Bidder Type (1) Initial Cash $50mm $275mm Consideration $37.5mm if exclude credit business • 15% Management
Royalty: 15% of management fees on n/a existing funds to be paid to SVBFG for life of the funds • 10% Profit Participation: SVBFG to receive 10% of Other Consideration distributions from SVBC (callable by SVBC after 5 years) (2) •
Carried Interest: 75% in named funds ; 100% in unnamed funds • Management Company • Management Company • 25% of accrued and future carried interest owned in named • Assumes entire balance sheet with $453mm of carrying (2) (3)
funds value Perimeter – Includes 5 Fund of Funds, 2 Direct Funds and 6 Credit Funds • Cash paid at closing • Cash paid at closing Consideration & Funding • Funded through equity capital • Funded through equity
capital and third party debt (no Sources financing contingency) (1) Additional $25mm in Credit Earnout within 6 months of closing if currently suspended credit funds are reactivated with at least $500mm of uncalled capital commitments in aggregate.
15 SVB Financial Group Proprietary and Confidential (2) $5mm of carrying value as of 6/30. Includes SIF X, SIF-A, SIF XI, SEP II, QIF VII, CP VI and CP CIF as well as in Credit Funds IC VIII-A, AICF, IC SMA II, ICIF II, Fund IX and Fund IX-U. (3)
Reflects pro forma 9/30 values.
SVB Neue Montreal (Headings) Bierstadt (Body) CONFIDENTIAL DRAFT SVB
Capital Comparative Analysis On November 21, 2023, Bidder A provided a revised bid for SVB Capital which provided for: • Bidder A to purchase SVB Capital Management Company and 25% of SVBFG carried interest in newer vintage funds • $50
million purchase price paid at close • 15% of management fees on existing funds to be paid to SVBFG for life of the funds • Profit sharing on Management Company with final structure TBD The proposal was compared to the present value of
cash flows for various go-forward scenarios where SVBFG maintains ownership of SVB Capital to manage the existing funds but does not pursue new fundraising activity • Scenario 1A: SVBFG maintains go forward ownership and existing funds operate
in ordinary course • Scenario 1B: Reflects potential downside risk from limited operational disruption • Scenario 1C: Reflects potential further downside risk from additional disruption and reduced fund performance Base Case Scenarios
Additional Scenarios (U.S. $ in millions) 11/21/23 11/21/23 (1) PV of Cash Flows Bidder A Bid Scenario 1A Scenario 1B Scenario 1C Bidder A Bid (3) Fund Performance Assumption Base Case Base Case Base Case Reduced Reduced Operational Disruption
Assumption None None Limited Additional None PV of Cash PV of Cash vs. 11/21/23 PV of Cash PV of Cash PV of Cash Metric Flow Flow Bidder A Bid Flow Flow Flow Investment Management Advisor 50.0 138.8 88.8 92.4 68.1 50.0 15% Management Fee 45.0 -
(45.0) - - 44.6 Total Investment Management Advisor 95.0 138.8 43.8 92.4 68.1 94.6 Carry from Funds Included in Bid 33.8 45.1 11.3 38.9 9.6 11.6 Other Carried & Capital Interest 388.1 388.1 - 362.7 280.8 302.7 Total Capital & Carried
Interest 421.9 433.1 11.3 401.6 290.4 314.4 (2) TBD - TBD - - TBD Profit Share Total PV of Cash Flows 516.9 572.0 55.1 494.0 358.4 409.0 Note: Dollars in millions. Active Direct and FoF assume 3x MOIC, active credit funds assume 1.35x to 1.75x MOIC;
legacy funds assume MOIC remains at current levels (1) All cash flows are discounted to 12/31/23 utilizing a 20% - 30% discount rate for capital and carried interest and a 12% - 18% discount rate on management fees for illustrative comparative
purposes. Capital interest and carried interest cash flows utilize highly illustrative return target and distribution schedule assumptions for comparative purposes only. 16 SVB Financial Group Proprietary and Confidential (1) Analysis of the profit
share component of the revised bid is still under review. (2) For reference, SVBC 2023E Fee Related Earnings are expected to be ~$4mm representing a margin of ~7%.
SVB Neue Montreal (Headings) Bierstadt (Body) C CON ONFIDENTI FIDENTIAL
AL DRA DRAFT FT Limited Partner Profiles - SVB Capital’s Platform SVB Capital Assets by Limited Partner Category • Nearly $10B Limited Partners’ Capital Commitments 3.8% • SVB Capital has ~ 750 Limited
Partners(“LPs”) 5.2% and continues to grow our LP base with a Public Pension Fund 6.3% strong pipeline 26.8% Family Office • $12.9M is the average investment size an LP Global Financial Institution across the Platform 12.1%
Endowment/Foundation Insurance Pool/Company • 9 years is the average tenure Limited Partners Private Pension Fund have been investing with the Platform Operating Business • 15% of Limited Partners invest in both Fund Government Entity
12.9% of Funds and Direct Equity 19.6% • Five Limited Partners are invested across all three strategies 13.3% Note: As of June 30, 2023 Due to rounding, percentages may not total 100%. Several funds represented in these totals have not yet
held their final LP Close. Investors encompass multiple Limited Partners which could be active across several funds and product types. SVB Financial Group Proprietary and Confidential 17 SVB Financial Group Proprietary and Confidential Investors may
be duplicated as some are investors across multiple Strategies. GP commitments are excluded. Employee funds are included as a single HNW investor.
SVB Neue Montreal (Headings) Bierstadt (Body) CONFIDENTIAL DRAFT
Limited Partner Profile by Strategy LP Assets by Category and Strategy Fund of Funds Direct Equity Private Credit In Market 2000-2023 In Market 2000-2023 In Market 2018-2023 1% 1% 6% 20% 21% 25% 27% 15% 32% 9% 6% 19% 18% 9% 13% 16% 25% 8% 8% 14% 8%
Family Office Public Pension Fund Global Financial Institution Endowment/Foundation Insurance Pool/Company Private Pension Fund Government Entity Operating Business Note: As of June 30, 2023. Several funds represented in these totals have not yet
held their final LP close (SIF XI, CP VI, ICIF II, Sprout II, and Arterial). Investors encompass multiple Limited Partners which 18 SVB Financial Group Proprietary and Confidential could be active across several funds and product types. Investors
may be duplicated as some are invested across multiple strategies. GP commitments are excluded. Figures in pie charts represent the total LPs per type and % of total assets. QIF investments are included as a single HNWI investor.
SVB Neue Montreal (Headings) Bierstadt (Body) CONFIDENTIAL DRAFT
Limited Partner Base LP Base by International Capital Sources and Institutional Capital Increased Focus on International Capital Sources AUM Driven by Institutional Capital United States International Institutional Non-Institutional $10bn 100% 19%
26% $8bn 80% $6bn 60% 81% 74% $4bn 40% $2bn 20% $0bn 0% 2000 2005 2010 2015 2020 2022 2000 2005 2010 2015 2020 2022 19 SVB Financial Group Proprietary and Confidential
SVB Neue Montreal (Headings) Bierstadt (Body) C CON ONFIDENTI FIDENTIAL
AL DRA DRAFT FT New Commitments by Limited Partner Category Trends in Limited Partner Category Over Time ($bn) 2020+ 2015-2020 2010-2015 2005-2010 2000-2005 0.0 1.0 2.0 3.0 4.0 5.0 $ Billions Endowment/Foundation Family Office Global Financial
Institution Government Entity Insurance Pool/Company Operating Business Private Pension Fund Public Pension Fund Note: As of June 30, 2023.Due to rounding, percentages may not total 100%. Several funds represented in these totals have not yet held
their final LP Close. 20 SVB Financial Group Proprietary and Confidential Investors encompass multiple Limited Partners which could be active across several funds and product types. Investors may be duplicated as some are investors across multiple
strategies. General Partner commitments are excluded. Employee funds are included as a single HNW investor.
SVB Neue Montreal (Headings) Bierstadt (Body) CONFIDENTIAL DRAFT Tenure
for SVB Capital LPs By LP Category and Strategy Fund of Funds Direct Equity Private Credit In Market 2000-2023 In Market 2000-2023 In Market 2018-2023 LP Type LP Count Average Yrs. LP Type LP Count Average Yrs. LP Type LP Count Average Yrs.
Endowment/Foundation 2 4.5 Endowment/Foundation 90 9.3 Endowment/Foundation 24 13.8 Family Office 58 2.1 Family Office 194 12.7 Family Office 386 9.5 Global Financial Institution 4 4.0 Global Financial Institution 26 11.0 Global Financial
Institution 15 12.2 Government Entity - - Government Entity 3 7.0 Government Entity - - Insurance Pool/Company 4 1.5 Insurance Pool/Company 5 5.0 Insurance Pool/Company 11 8.7 Operating Business 2 5.0 Operating Business 12 7.4 Operating Business 4
12.0 Private Pension Fund - - Private Pension Fund 12 6.2 Private Pension Fund 3 4.7 Public Pension Fund 3 4.7 Public Pension Fund 7 12.0 Public Pension Fund 13 8.3 Total: 73 Average: 2.5 Total: 553 Average: 9.4 Total: 252 Average: 12.5 2023E AUM
2023E AUM 2023E AUM $6.5bn $1.1bn $2.2bn Note: As of June 30, 2023. Several funds represented in these totals have not yet held their final LP close (SIF XI, CP VI, ICIF II, and Arterial). Investors encompass multiple Limited Partners which could be
21 SVB Financial Group Proprietary and Confidential active across several funds and product types. Investors may be duplicated as some are invested across multiple strategies. GP commitments are excluded. Private Credit Platform was acquired by
WestRiver Group in 2021. QIF investments are included as a single HNWI investor, under Family Office. SMAs account for $1.5bn of the 2023E AUM across Direct Equity and Private Credit.
SVB Neue Montreal (Headings) Bierstadt (Body) CONFIDENTIAL DRAFT SVBFG
Capital & Carried Interests in SVB Capital Managed Funds SVBFG Capital Interest SVBFG Carry Interest SVBFG Total ITD ITD NAV (Capital ITD Carry ITD Carry ITD Carry Unfunded Contributions Distributions Interest) Accrued Distributed Undistributed
NAV TVPI Commitment Fund of Funds $259.5 $171.5 $178.7 $253.4 $92.2 $160.4 $339.1 2.3x $114.1 Direct 8.4 24.6 0.1 80.3 46.1 33.9 34.0 12.4x 1.4 Credit 5.0 0.3 5.3 54.7 5.4 49.2 54.5 12.0x 12.0 SVBFG Ownership $272.9 $196.3 $184.0 $388.4 $143.8
$243.6 $427.6 2.8x $127.5 The carried interest amounts presented above represent the amount of profits interest allocated to SVB Financial Group and do not include any amounts attributable to other participants or members of the general partnerships
or entities Note: Dollars in millions. As of September 30, 2023 for Direct and Credit, and June 30, 2023 for Fund of Funds. The Fund of Funds, Direct and Credit funds are marked to market on a quarterly 22 SVB Financial Group Proprietary and
Confidential basis. The 9/30 marks for the Fund of Funds are still in process, so the Fund of Funds NAV in the above table reflects the 6/30 valuations. An exception to this is REF which is marked to market monthly. At 6/30, REF represented $142.9M
of the $178.7M NAV. As of 9/30, REFs NAV was marked at $170.7M (not included in above table).
SVB Neue Montreal (Headings) Bierstadt (Body) C CON ONFIDENTI FIDENTIAL
AL DRA DRAFT FT Deep Relationships With Leading VC Firms Reflects SVBFG’s Capital Interest and Carried Interests in SVB Capital Managed Funds (2) Core Early-Stage Funds by Vintage Current Prior (1) st nd rd th th th Top 15 Firms Relationship
Tenure Vintage (1 ) Vintage (2 ) 3 4 5 6 Firm 1 20 Years ✓✓✓✓✓✓ Firm 2 13 Years ✓✓✓✓✓✓ Firm 3 10 Years ✓✓✓✓✓✓ Firm 4 23
Years ✓✓✓✓✓✓ Firm 5 16 Years ✓✓✓✓✓✓ Firm 6 13 Years ✓✓✓✓✓✓ Firm 7 13 Years ✓✓✓✓✓✓
Firm 8 23 Years ✓✓ Firm 9 16 Years ✓✓✓✓✓✓ Firm 10 13 Years ✓✓✓✓✓✓ Firm 11 23 Years ✓✓✓✓✓✓ Firm 12 16 Years
✓✓✓✓✓✓ Firm 13 12 Years ✓✓✓✓✓✓ Firm 14 9 Years ✓✓✓✓✓✓ (3) Firm 15 5 Years N/A N/A N/A ✓✓✓ Represents
allocation Note: Active SIF Managers include all Firms where the SIF Platform has committed to the most recent vintage. Data as of April 4, 2023. Top 15 firms represent ~76% of aggregate SIF Platform commitments since inception. (1) Tenure is
defined as the length of SVB Capital’s relationship with each Firm. 23 SVB Financial Group Proprietary and Confidential (2) Each check mark represents a commitment made by SVB Capital Funds Management to the Firm’s core early-stage fund,
with most recent fund vintage shown first. (3) Firm 15 has raised three early-stage funds inception to date. Top 15 Active SIF Managers by Total Exposure
SVB Neue Montreal (Headings) Bierstadt (Body) C CON ONFIDENTI FIDENTIAL
AL DRA DRAFT FT Momentum Through Two Decades of Growth (1) Assets Under Management ($bn) ’13- Q1’23 Fund of Funds CAGR $9.8 $9.5 Direct Equity Credit Business Acquired in 2020 Credit (2) 2.2 78.1% 2.2 $7.3 1.1 24.3% 1.1 1.0 $6.0 0.8 0.6
0.7 $4.3 $4.3 0.5 0.5 $3.2 $2.9 6.5 6.3 16.4% $2.4 0.5 $2.3 0.3 5.5 4.7 $1.7 0.3 0.3 $1.4 $1.4 3.7 3.7 0.1 $1.1 $1.1 $0.9 0.1 2.6 2.6 0.1 $0.7 $0.7 2.1 0.1 0.1 1.9 $0.4 $0.4 0.1 1.6 $0.2 $0.2 $0.2 $0.2 0.1 0.1 1.2 1.3 0.9 0.9 0.8 0.6 0.6 0.3 0.3 '00
'01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 '23 YTD SIF I SIF II SIF III SIF IV PRF SIF V SIF V-A SIF VI SIF VII VOF SIF VIII CP IV SIF IX SIF X CP V SIF-A SIF XI CP VI SEP II $122 $175 $256 $245 $63 $293
$56 $324 $332 $183 $499 $229 $703 $1,263 $305 $148 $1,163 $199 $120 CP I CP II NTGP CP III SEP ICF VIII ICF VIII-A CGF IX Art. I $56 $90 $75 $172 $471 $606 $207 $643 $21 CIF II IC SMA II $155 $100 CGF IX-U Impact $101 $78 AZ ICF $404 24 SVB
Financial Group Proprietary and Confidential (1) Includes SMAs. (2) Reflects ’20-Q1’23 CAGR. New Funds ($mm) Note: Dashed outlines denote SMAs
SVB Neue Montreal (Headings) Bierstadt (Body) CONFIDENTIAL DRAFT Fund
of Funds Performance VINTAGE FUND SIZE NET IRR NET TVPI NET DPI Outperforming th th th 4 Q 4 Q 4 Q SIF I 2000–02 $122M -1.6% 0.89x 0.87x the Public Markets 1st Q 1st Q 1st Q SIF II 2003–06 $175M 11.3% 2.14x 2.05x bps + OF ALPHA Top 5%
940 1st Q Top 5% SIF III 2006–08 $256M Top 5% 12.5% 2.70x 2.19x vs. 8.43% IRR from S&P 500 1st Q 1st Q 1st Q SIF IV 2008–11 $245M 17.0% 3.53x 2.44x + 940 bps vs. 8.44% IRR from Russell 3000 Top 5% Top 5% Top 5% SIF V 2011–13
$293M 27.3% 5.75x 3.80x 1st Q 1st Q 1st Q SIF VI 2013–14 $324M 24.6% 4.18x 1.28x bps 1st Q Top 5% 2nd Q SIF VII 2015–16 $332M 26.3% 3.48x 0.83x + OF ALPHA 599 1st Q 1st Q 3rd Q SIF VIII 2016–18 $499M 34.8% 3.21x 0.27x vs. 11.85%
IRR from NASDAQ + 1,042 bps vs. 7.42% IRR from 3rd Q 1st Q SIF IX 2018–20 $703M 30.2% 1.82x 0.00x Russell 2000 SIF X 2019–22 $1,263M Too Early Too Early Too Early Note: Performance is reflective of highest fee-paying Limited Partners as
of September 30, 2022. Cambridge Associates benchmarks are as of September 30, 2022. Benchmarks represent returns net of fees, expenses and carried interest and are Cambridge Associates Fund of Funds Net to Limited Partner TVPI benchmarks. Cambridge
Associates provides this data at no charge. SIF X is a young portfolio. PME based on Direct Alpha methodology for SIF I- IX, SEP, VOF, NTGP and 25 SVB Financial Group Proprietary and Confidential PRF from 2000 – September 30, 2022.
Outperformance cannot be guaranteed. Past performance is not a guarantee of future results. Future results cannot be guaranteed.
SVB Neue Montreal (Headings) Bierstadt (Body) CONFIDENTIAL DRAFT Direct
Equity Performance Outperforming the Public Markets VINTAGE FUND SIZE NET IRR NET TVPI NET DPI bps + Top Top Top OF ALPHA 992 5% 5% 5% CP I 2000 $56M 11.0% 2.65x 2.65x Top vs. 6.36% IRR from S&P 500 1st Q 1st Q CP II 2006 $90M 20.4% 5% 3.00x
2.94x + 677 bps vs. 8.81% IRR from NASDAQ 3rd Q 3rd Q 2nd Q CP III 2014 $172M 18.5% 2.50x 1.25x 3rd Q 2nd Q 1st Q VOF I 2015 $183M 19.7% 2.41x 1.60x th th 4 Q 3rd Q 4 Q 3 bps CP IV 2017 $229M 14.4% 1.53x 0.00x + OF ALPHA 901 2nd Q 2nd Q 1st Q 4 CP V
2020 $305M 22.9% 1.32x 0.00x vs. 6.57% IRR from Russell 3000 + 892 bps vs. 6.66% IRR from Russell 2000 Note: CP I was fully realized in 2020. VOF I includes fund investments as well as direct investments. $88M was allocated to direct company
investments as of September 30, 2022. CP IV recycled $30.1M based on proceeds from three portfolio companies. CP V recycled $8.4M based on proceeds from one portfolio company. CP I-V Performance is net to Limited Partners and as of December 31,
2022. VOF I performance is net to Limited Partners and as of September 30, 2022. The VOF I portfolio includes fund investments which cause a delay reporting cycle from the CP program. Cambridge Associates benchmarks are as of September 30, 2022.
Benchmarks represent returns net of fees, expenses and carried interest and are Cambridge Associates US VC Net to Limited Partner 26 SVB Financial Group Proprietary and Confidential benchmarks. Cambridge Associates provides this data at no charge.
Past performance is not indicative of future returns. PME based on Direct Alpha methodology for CP I-V from 2000-2022. Outperformance cannot be guaranteed. Past performance is not a guarantee of future results.
SVB Neue Montreal (Headings) Bierstadt (Body) CONFIDENTIAL DRAFT Credit
Performance Funds I-IX and (2) Income Fund II FUND LOAN PRINCIPAL GROSS GROSS NET VINTAGE NET IRR NET DPI COMMIT. COMMIT. FUNDED IRR TVPI TVPI 1st Q 1st Q (1) I-VII Pre-2021 $760M $1,408M $1,062M 21.3% 1.44x 30.4% 1.73x 1.63x 1st Q 1st Q 28.0% VIII
2018 $606M $2,720M $2,206M 18.9% 1.20x 22.2% 1.29x 0.66x Net IRR VIII-A 2021 $207M $499M $332M Growth IX 2021 $593M $380M $169M Too Early Income II 2022 $155M $7M $7M 1.36x Net TVPI Note: Please see “Additional Information Regarding Funds
I-VIII,” “Notes Regarding SVB Capital Credit Fund Performance Metrics“ and “Financial Definitions” at the end of this presentation to help interpret historical performance data provided herein. Data as of September 30,
2022. Past performance is not indicative of future results, which may vary. The value of investments and the income derived from them can go down as well as up. Future returns are not guaranteed and a total loss of principal may occur. Top Quartile
Designation based on Preqin benchmarking of all private debt funds as of September 30, 2022, by weighted average net IRR and DPI. In order to ensure an adequate sample size, the calculation takes into account vintages from 2012 to 2019. The Preqin
dataset does not include TVPI benchmarks. No fees were paid in connection with this benchmarking. Funds VIII-A, Growth IX, and Income II are young portfolios. (1) Funds I-VII were managed by WestRiver Management, LLC. Performance information with
respect to such funds is presented in aggregate. (2) The SVB Capital Credit Funds financial performance metrics are for the Prior Funds, Growth Fund IX and Income Fund II on an aggregated basis and were calculated by aggregating the commitments,
investments and cash flows of each fund and calculating performance metrics as if such commitments were made to, such investments were made by, and such 27 SVB Financial Group Proprietary and Confidential cash flows were of, a single fund. Net Fund
IRR and Net Fund TVPI for the Prior Funds, Growth Fund IX and Income Fund II, on an aggregated basis, were calculated based on actual fee arrangements with limited partners of such funds and, accordingly, reflect the impact of weighted average fees
charged to limited partners of such funds.
SVB Neue Montreal (Headings) Bierstadt (Body) CONFIDENTIAL DRAFT
Historical and estimated financials reflect SVB cost allocation methodologies Historical Financials (As of February 2023) 2020A 2021A 2022A 2023E Recurring Management Fees & Loan Servicing Fees $ 32.9 $ 46.8 $ 53.8 $ 58.6 Performance Based
Management Fees 7.1 19.3 4.5 - Management & Loan Servicing Fees $ 40.0 $ 66.1 $ 58.3 $ 58.6 (1) Other Income 4.2 13.9 6.1 0.1 Operating Revenue $ 44.1 $ 80.0 $ 64.3 $ 58.6 Direct Expenses (34.4) (56.6) (60.4) (52.6) Indirect (Allocated) Expenses
(5.1) (5.7) (9.6) (1.7) Operating Expense $ (39.5) $ (62.3) $ (70.0) $ (54.3) Operating Net Profit $ 4.7 $ 17.7 $ (5.7) $ 4.3 Metrics Operating Margin 11% 22% (9%) 7% FTE 56 94 107 72 Amounts do not included investment gains & losses or carried
interest allocations or distributions Note: Dollars in millions. Indirect (Allocated) Expenses reflect historical inter-company cost allocation methodologies for shared expenses among SVB Capital and SVB Financial Group, Silicon Valley Bank and
other related entities and may not accurately reflect the expense structure of SVB Capital as a stand-alone business. Neither SVBFG nor any other person makes any representation or warranty as to the accuracy, completeness or representativeness of
any financial projections or estimates or the historical expense information contained herein. Actual results may differ materially from the projections and estimates herein, which are inherently subject to 28 SVB Financial Group Proprietary and
Confidential significant economic, market and other uncertainties that may adversely affect financial results. (1) Historically Other Income was primarily related to carried interests in legacy credit funds acquired by SVB.
CONFIDENTIAL DRAFT Disclosures Additional Information Regarding Credit
Funds I-VIII. Past performance is not an indication of expected for Fund IX or Income Fund II. Instead, net performance metrics take into account the Net Fund DPI represents the ratio or amounts distributed to limited partners of the applicable
future results, which may vary. It should not be assumed that any Fund’s existing investments or leverage applicable to Funds I-V by assuming that the direct and indirect leverage experience of fund to total contributions of limited partners
as of the measurement date. investments made in the future will be profitable or will equal the performance listed; a total loss Levered Feeder Funds I-V applied to the master fund for each such fund throughout its term and Total Investment Proceeds
is the inception to date realized value on investments including loan of principal may occur. Importantly, Funds I-VII are managed by WestRiver Management, LLC by excluding the Fund IV&V Co-Invest Fund, which did not utilize leverage (other than
short term principal payments, loan interest, loan fees, warrants and equity gains and the return of invested (“WRM”) on a non-discretionary basis and Fund VIII was managed by WRM on a non-discretionary borrowings under a capital call
facility) during its term. capital, excluding fund expenses, in each case as of the applicable measurement date. basis until December 23, 2020. On December 23, 2020, the principal employees of WRM involved Notes regarding SVB Capital Fund
Accounting: Managed funds are generally considered in WRM’s management of Fund VIII joined the SVB Capital Credit Investment Team. On and after Net Realized Proceeds represents amount of inception to date realized investment proceeds on
investment companies and follow the accounting and reporting guidance of Accounting Standards December 23, 2020, Fund VIII is managed by the SVB Capital Credit Investment Team on a investment which have been fully repaid, disposed of or written off,
in each case as of the Codification (“ASC”) 946 – Financial Services – Investment Companies. SVB Capital values its discretionary basis and the SVB Capital Credit Investment Team provides investment advice to applicable
measurement date. investments in accordance with GAAP and according to ASC Topic 820, Fair Value Measurements Funds I-VII on a non-discretionary basis. The performance information presented here includes and Disclosure, with guidance from the
applicable LPA. Fair value inputs may include financial data IRR of Realized Loans is the dollar-weighted internal rate of return on loan investments which have performance information for Funds I-VII and for Fund VIII (including during the time
period that directly received from companies, insights from management discussions, meetings with external been fully repaid, disposed of or written off, including interest, fees and principal repayments but WRM served as the non-discretionary
manager for Fund VIII). Since the investment advice groups, private information available from SVBFG, and other public sources. Most underlying fund excluding any realized or unrealized warrant and/or equity gains or losses and fund expenses.
provided to Fund VIII prior to December 23, 2020 and all investment advice provided to Funds I-VII of fund investments either have the attributes of an investment company or prepare their was on a non-discretionary basis, the Funds were not
obligated to accept WRM’s (or, with respect Gross Investment IRR represents the dollar-weighted internal rate of return on investments, financial statements consistent with the measurement principles of an investment company. In to Funds I-VII
since December 23, 2020, the SVB Capital Credit Investment Team’s) investment unlevered and excluding fund expenses. accordance with ASC Topic 820, SVB Capital values underlying investment funds using the net asset recommendations.
Accordingly, there is no guarantee that the same returns would have been value (NAV) provided by the underlying investment funds as a practical expedient on an achieved if investment advice had been provided on a discretionary basis and there are no
Gross Investment TVPI represents the ratio of current value of remaining investments plus realized investment-by-investment basis. assurances that the SVB Capital Credit Investment Team will be able to replicate the performance investment proceeds
as of the applicable measurement date to total invested capital from previously achieved. inception to the applicable measurement date. Financial Definitions Notes Regarding SVB Capital Credit Fund Performance Metrics.
Financial information and Unrealized Value is the difference between the carrying value of investments and the fair value of Top Quartile Designation based on Preqin benchmarking of all private debt funds as of September performance metrics for the
SVB Capital Credit Funds, where presented on an aggregated basis, investments as of the measurement date. 30, 2022, by weighted average net IRR and DPI. In order to ensure an adequate sample size, the are generally calculated by aggregating the
commitments, investments and cash flows of the calculation takes into account vintages from 2012 to 2019. No fees were paid in connection with applicable funds and calculating performance metrics as if such commitments were made to, such this
benchmarking. investments were made by, and such cash flows were of, a single fund, subject to the additional Realized Gains and Losses is the difference between the carrying value of investments and the assumptions described herein. proceeds
realized at the time of disposition, including any subsequent recoveries but excluding any Net performance metrics were calculated based on actual fee arrangements with limited partners fund fees, expenses or carried interest. for the applicable
funds and, accordingly, reflect the impact of weighted average fees charged to Loan Losses is the amount of Realized Losses on loan investments. the limited partners of such funds, except for Fund VIII which calculates Net Fund IRR, Net Fund TVPI
and Net DPI for a hypothetical limited partner paying a 2.0% management fee and 20% Equity Gains is the amount of Realized Gains on equity investments, including proceeds of carried interest. The calculations take into account Funds I-VII using the
methodology and investments converted to equity. assumptions described below. Warrant Gains is the amount of Realized Gains on warrant investments, including proceeds of Funds I-V were each structured as a master fund that received capital
commitments from two investments converted to equity. feeder vehicles (one feeder vehicle that initially directly at the feeder and subsequently indirectly at the master fund utilized leverage throughout the applicable fund’s term
(collectively, “Levered Net Fund IRR is the dollar-weighted internal rate of return of the applicable fund, net of fund Feeder Funds I-V”) and another feeder vehicle that indirectly at the master fund utilized leverage expenses,
management fees and carried interest. This return considers the daily timing of all cash for only a portion of the applicable fund’s term (collectively, together with the Fund IV&V Co- flows and cumulative fair stated value, as of the end
of the reported period. Invest Fund, “Unlevered Feeder Funds I-V”). Net Fund TVPI represents the ratio of current value of remaining investments within the applicable The Unlevered Feeder Funds I-V have been excluded from the calculation
of net performance fund plus the total distributions to limited partners as of the measurement date to the total metrics, as such funds had a materially different leverage profile than the leverage profile contributions of limited partners as of the
measurement date. 29
CONFIDENTIAL DRAFT Table of Contents SVBFG Direct Equity Investments
SVBFG LP Fund Investments SVBFG Warrant Top 50 Positions SVB Capital Detail Cash Flow Forecast GUC Summary / Other MoffettNathanson 30
SVB Neue Montreal (Headings) Bierstadt (Body) CONFIDENTIAL DRAFT Weekly
Cash Flow Forecast as of Week-Ending 1/06 Actual Actual Actual Actual Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast 13-Week Week Wk-(4) Wk-(3) Wk-(2) Wk-(1) Wk-1 Wk-2 Wk-3 Wk-4
Wk-5 Wk-6 Wk-7 Wk-8 Wk-9 Wk-10 Wk-11 Wk-12 Wk-13 Forecast Week Ending ==> WE 12/9 WE 12/16 WE 12/23 WE 12/30 WE 1/6 WE 1/13 WE 1/20 WE 1/27 WE 2/3 WE 2/10 WE 2/17 WE 2/24 WE 3/2 WE 3/9 WE 3/16 WE 3/23 WE 3/30 Total Net Operating Cash Flows
Receipts $ 58 $ 1 $ 16,188 $ 4,873 $ 530 $ 24 $ 143 $ - $ 855 $ - $ 500 $ 1 2,500 $ 605 $ 2,213 $ - $ - $ 2 2,899 $ 40,269 Operating Costs (1,129) (202) (3,184) (1,654) (1,539) (4,094) (3,499) (21,601) (2,593) (242) (988) (1,116) (1,439) (2,247)
(1,488) (116) (1 0,853) (51,812) Professional Fees and Expenses (1,194) (1 1,589) (2,584) (1,177) (3,811) (1,062) (21,362) (4,313) (1,070) - (260) (14,711) - (270) (1 4,428) - (4,300) (65,588) Total Net Operating Cash Flows $ (2 ,265) $ (11,790) $ 1
0,420 $ 2,043 $ (4,819) $ (5 ,132) $ (24,718) $ (25,913) $ (2,807) $ (242) $ (748) $ (3 ,327) $ (834) $ (304) $ (15,916) $ (116) $ 7,746 $ (77,131) Net Investment Activity SVBFG Net Investments Activity $ 1,378 $ (4 ,820) $ 2,168 $ (3,214) $ - $
(946) $ (268) $ (8 ,962) $ (107) $ (505) $ - $ - $ (1,333) $ (500) $ - $ (157) $ (3 ,333) $ (16,112) Net Capital Call Line Activity 489 (11,500) (800) (1,600) (5,000) (5,000) 21,802 (5,000) 5,817 (1,836) (5,000) (5,000) (5,000) (5,000) 83 10,942
(5,000) (3,191) Total Net Investment Activity $ 1,867 $ (16,320) $ 1,368 $ (4,814) $ (5 ,000) $ (5,946) $ 2 1,534 $ (13,962) $ 5,710 $ (2 ,340) $ (5 ,000) $ (5,000) $ (6 ,333) $ (5 ,500) $ 83 $ 1 0,785 $ (8,333) $ (19,304) SVBFG and SVB Capital Cash
Inflows / (Outflows) $ (398) $ (28,110) $ 11,789 $ (2 ,771) $ (9 ,819) $ (11,078) $ (3,184) $ (39,876) $ 2,902 $ (2,583) $ (5 ,748) $ (8,327) $ (7 ,167) $ (5,804) $ (15,833) $ 10,669 $ (587) $ (96,435) $ - $ - $ (661) $ 166 $ (65) $ 1 $ - $ 207 $
(28) $ - $ (8,499) $ (2,000) $ (1,687) $ - $ 1 $ - $ - $ (12,071) Plus: SVB Securities Holdings LLC Net Cash Flow Total Cash Inflows / (Outflows) $ (398) $ (28,110) $ 1 1,128 $ (2,605) $ (9 ,884) $ (11,077) $ (3,184) $ (39,669) $ 2,874 $ (2,583) $
(14,247) $ (10,327) $ (8,854) $ (5 ,804) $ (15,832) $ 1 0,669 $ (587) $ (108,505) Change in Cash Beg. Cash Balance less Cash Held at FDIC $ 297,839 $ 297,441 $ 269,331 $ 280,459 $ 277,854 $ 267,969 $ 256,892 $ 253,708 $ 214,039 $ 216,913 $ 214,331 $
200,084 $ 189,757 $ 180,903 $ 175,099 $ 159,266 $ 169,936 $ 277,854 (+/-) Net Cash Flow (398) (28,110) 11,128 (2,605) (9,884) (1 1,077) (3,184) (39,669) 2,874 (2,583) (14,247) (1 0,327) (8,854) (5,804) (1 5,832) 10,669 (587) (108,505) Total End.
Cash Balance $ 297,441 $ 269,331 $ 280,459 $ 277,854 $ 267,969 $ 256,892 $ 253,708 $ 214,039 $ 216,913 $ 214,331 $ 200,084 $ 189,757 $ 180,903 $ 175,099 $ 159,266 $ 169,936 $ 169,348 $ 169,348 End. Debtor Cash (1) $ 275,486 $ 247,508 $ 258,980 $
253,636 $ 244,906 $ 234,413 $ 233,158 $ 194,490 $ 197,393 $ 194,810 $ 189,062 $ 168,326 $ 162,182 $ 158,187 $ 143,678 $ 154,438 $ 154,740 $ 154,740 End. SVB Capital Cash $ 2,548 $ 2,422 $ 2,710 $ 5,312 $ 4,222 $ 3,637 $ 1,708 $ 500 $ 500 $ 500 $ 500
$ 12,909 $ 11,886 $ 10,077 $ 8,754 $ 8,663 $ 7,774 $ 7,774 End. Other Non-Debtor Cash $ 19,407 $ 19,401 $ 18,769 $ 18,906 $ 18,841 $ 18,842 $ 18,842 $ 19,049 $ 19,021 $ 19,021 $ 10,521 $ 8,521 $ 6,834 $ 6,834 $ 6,835 $ 6,835 $ 6,835 $ 6,835
Supplemental Details Capital Call Line Balance Drawn $ 23,300 $ 34,800 $ 35,600 $ 37,200 $ 42,200 $ 47,200 $ 25,700 $ 30,700 $ 25,000 $ 26,862 $ 31,862 $ 36,862 $ 41,862 $ 46,862 $ 46,855 $ 36,127 $ 41,127 Debtor / UCC / UST accrued unpaid and
success fees - - - - - - - - - - - - - - - - 60,665 31 SVB Financial Group Proprietary and Confidential Note: Dollars in thousands. Budget assumes GDC proceeds are received week ending 3/30. (1) Excludes cash at MoffettNathanson and Foreign
Subsidiaries.
CONFIDENTIAL DRAFT Table of Contents SVBFG Direct Equity Investments
SVBFG LP Fund Investments SVBFG Warrant Top 50 Positions SVB Capital Detail Cash Flow Forecast GUC Summary / Other MoffettNathanson 32
SVB Neue Montreal (Headings) Bierstadt (Body) CONFIDENTIAL DRAFT (1)
Preliminary General Unsecured Claim Estimates • The chart below reflects estimates of general unsecured (“GUC”) and bondholder claims • GUC claims include trade, rejection damage, employee related and other prepetition claim
estimates • All estimates subject to material change Preliminary Estimates Low High GUC Claims $122.2 $192.2 (2) Bondholder and Subordinate Debt Claims 3,433.0 3,433.0 Total $3,555.2 $3,625.2 Note: Dollars in millions. It is currently
estimated that SVBFG’s basis in the stock of SVB for U.S. federal income tax purposes (the “tax basis”) as of December 31, 2022, was approximately $15 billion. SVBFG’s tax basis in SVB stock generally correlates to its equity
value for financial statement purposes, but is subject to adjustments for various book-tax differences as well as any adjustments made as a result of IRS audits. Per SVBFG’s Form 10-K for the fiscal year ended December 31, 2022, the non-GAAP
tangible common equity in SVB as of December 31, 2022 was stated as approximately $15.196 billion. SVBFG’s current tax basis in the SVB is subject to developing facts and ongoing analysis. 33 SVB Financial Group Proprietary and Confidential
(1) Excludes administrative, priority and preferred / common equity claims. (2) Includes accrued and unpaid interest.
CONFIDENTIAL DRAFT Table of Contents SVBFG Direct Equity Investments
SVBFG LP Fund Investments SVBFG Warrant Top 50 Positions SVB Capital Detail Cash Flow Forecast GUC Summary / Other MoffettNathanson 34
SVB Neue Montreal (Headings) Bierstadt (Body) CONFIDENTIAL DRAFT
Summary MoffettNathanson Income Statement 2021A 2022A 2023E 2024E Total Revenue $1,667 $27,375 $27,500 $22,000 Total Expenses (1,071) (26,324) (29,000) (20,100) Pre-Tax Income $596 $1,051 ($1,500) $1,900 35 SVB Financial Group Proprietary and
Confidential Note: Dollars in thousands.
Exhibit 99.2
SVB Capital Announces SVB Financial Group Will Retain Ownership of the Business
and Creates New Operating Committee
Transition Follows Decision by SVB Financial Group that Retaining Ownership of SVB Capital Represents Best Path Forward for Business
Co-Founder Aaron Gershenberg Returning to Join Veteran Managing Partners Sulu Mamdani and
Beau Laskey to Co-Lead SVB Capital
Leaders Collective Expertise and Unique Skillsets
to Advance SVB Capitals Value Maximization Initiatives
SANTA CLARA, Calif., January 9, 2024 SVB Capital
Management, LLC (SVB Capital), a wholly-owned indirect subsidiary of SVB Financial Group (Pink Sheets: SIVBQ), today announced that, following a review of strategic alternatives, SVB Financial Group and its creditors have determined that
retaining the SVB Capital business would result in superior value creation opportunities. In connection with mapping its go-forward strategy, SVB Capital has created a new operating committee that will oversee
all aspects of the business strategic and operational initiatives.
The operating committee is made up of Aaron Gershenberg, Sulu Mamdani and Beau
Laskey, three longtime SVB Capital executives and experienced venture capital leaders. Gershenberg, a co-founder of SVB Capital who has served as a Senior Advisor since January 2023, is returning as a Managing
Partner. The operating committee will be focused on maximizing the value of SVB Capitals portfolio and assets and continuing to serve its limited partners. The committee will work closely with William Kosturos, Chief Restructuring Officer of
SVB Financial Group, to ensure a smooth transition.
We believe that retaining SVB Capital under a reorganized company is the best path forward to
maximize its value in the current environment, said Kosturos. SVB Financial Group and its creditors recognize the strong foundation on which SVB Capital has been built, thanks in large part to Aaron, Sulu and Beaus outstanding
leadership and partnership, with the significant support and contributions of the entire SVB Capital team. Aaron, Sulu and Beaus vision for the future of this business is closely aligned with our creditor group, and all parties are focused on
preserving the value of the business, meeting obligations to partners and positioning the platform to capitalize on future opportunities.
Gershenberg, Mamdani and Laskey will return to the equal partnership model that for years drove SVB Capitals success and growth into an industry leader.
For more than ten years, the three cultivated an impressive investment track record through collaboration, alignment of interests and tenured partnership. They share a cohesive vision for SVB Capitals operations going forward and, as part of
the operating committee, they will act as responsible stewards of the business on behalf of its creditors, limited partners and employees.
The members of
the operating committee issued the following statement:
For nearly 25 years, SVB Capital has operated with a mission to grow and
enhance access to the innovation economy, and has built an exceptional reputation as the premier investment partner for top venture capital firms and technology companies. Our multi-strategy platform has enabled us to create a leading portfolio of
assets, cultivate enduring relationships with our limited partners and generate strong returns. With a demonstrated track record of leadership and equal collaboration, we look forward to reuniting the experienced partnership that has powered SVB
Capitals success, with the goal of preserving the tremendous value inherent in the firm, while also undertaking structural initiatives to position us for the future. Together, we intend to leverage our unique skillsets and industry expertise
to manage our assets responsibly and efficiently and unlock the full potential of our platform.
Additional information about Gershenberg, Mamdani and Laskeys background and experience is available
on their LinkedIn pages, which can be found here, here and here, respectively.
About SVB Financial Group
SVB Financial Group (Pink Sheets: SIVBQ) is the holding company for various financial services companies, including SVB Capital.
About SVB Capital Management, LLC
Founded in 1999
as a division of SVB Financial Group, SVB Capital is a multi-strategy investment platform targeting the Innovation Economy with approximately $10B of assets under management across venture capital fund of funds, direct funds, and private credit
funds. Uniquely positioned to access highly sought-after opportunities in start-up companies and venture capital funds, SVB Capital invests in fund managers and private technology and life science companies
throughout the innovation economy around the world.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements
are statements that are not historical facts, and involve risks and uncertainties that could result in SVB Financial Groups actual results differing materially from those projected in the forward-looking statements. In this release, SVB
Financial Group makes forward-looking statements regarding the operation and strategic plans of its SVB Capital business. There are various important factors that could cause actual events to differ from such forward-looking statements. For
information about other important factors that could cause actual results to differ materially from those discussed in the forward-looking statements contained in this release, please refer to SVB Financial Groups public reports filed with the
U.S. Securities and Exchange Commission. The forward-looking statements included in this release are made only as of the date of this release and the Company undertakes no obligation to update any forward-looking statement to reflect events or
circumstances that arise after the date such statements are made.
Media Contact
Joele Frank, Wilkinson Brimmer Katcher
Michael Freitag / Jed
Repko / Eduardo Rovira
212-355-4449
svbmediainquiry@joelefrank.com
Investor Contact
SVB Capital
Christie Ma
cma@svbcapital.com
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