Wolfspeed - Plan / RSA Terms

RSA Terms

Overview

• The debtors entered into a Restructuring Support Agreement, dated June 22, 2025, with certain consenting creditors to support a restructuring pursuant to a chapter 11 plan.
• The consenting parties include:
  • Holders of senior secured notes, represented by the Ad Hoc Senior Secured Group.
  • Holders of convertible notes, represented by the Ad Hoc 26s/28s/29s Noteholder Group.
  • Renesas Electronics America Inc., in its capacity as a holder of CRD loans.

Plan Treatment Summary

• Senior Secured Notes Claims: Allowed claims, including outstanding principal, accrued interest, fees, and a make-whole amount, will receive a pro rata share of:
  • New Senior Secured Notes.
  • An Effective Date Cash Payment sufficient to redeem $250 million in principal of the senior secured notes at 109.875% plus accrued and unpaid interest.
• Convertible Notes Claims: Allowed claims will receive a pro rata share of:
  • Rights to participate in the New 2L Convertible Notes Rights Offering.
  • New 2L Takeback Notes.
  • 56.3% of the New Common Stock, subject to dilution.
• Renesas Claims: Renesas will receive the following consideration in full satisfaction of its claims:
  • Base Consideration, consisting of:
    • New Renesas 2L Takeback Convertible Notes.
    • 38.7% of the New Common Stock, subject to dilution.
    • Renesas Warrants.
  • Contingent Additional Consideration, if certain regulatory approvals are not obtained by the Regulatory Trigger Deadline, consisting of:
    • $15 million in cash.
    • $15 million in Incremental New 2L Takeback Notes.
    • 2.0% of the New Common Stock.
    • A one-year extension on the term of the Renesas Warrants.
• Commitment Fee Claims: Allowed claims will receive their pro rata share of the Commitment Fee Amount.
  • $5 million of the fee amount will be held in escrow and is contingent upon certain regulatory approvals being obtained prior to the Regulatory Trigger Deadline. If the deadline occurs before approvals are obtained, the Commitment Fee Amount will be reduced by $5 million.
• General Unsecured Claims: These claims are unimpaired and will be paid in full in cash on the effective date or in the ordinary course of business.
• Existing Equity Interests: All existing equity interests will be canceled. Holders will receive their pro rata share of the Equity Recovery, which consists of:
  • 5.0% of the New Common Stock, subject to dilution.
  • The recovery is reduced to 3.0% of the New Common Stock if a "Distribution Event" occurs, defined as Renesas not obtaining required regulatory approvals on or before the effective date.

New Capital Structure

• New Senior Secured Notes: To be issued by the Reorganized Parent in a principal amount equal to the allowed senior secured notes claims, less certain amounts including the $250 million redeemed via the cash payment. The notes will be on substantially the same terms as the existing senior secured notes indenture, with certain modifications.
• New 2L Takeback Notes: Second-lien notes to be issued by the Reorganized Parent in an aggregate principal amount of $296 million, bearing interest at 7.0% cash or 12.0% PIK, at the reorganized debtors' discretion.
• New 2L Convertible Notes: Second-lien convertible notes to be issued by the Reorganized Parent in an aggregate principal amount of $331.375 million.
  • $301.125 million will be issued on account of new money from the rights offering at a purchase price of 91.3242% of face value.
  • $30.25 million will be issued on account of the Backstop Premium.
  • The notes will bear interest at 2.5% cash and are convertible into New Common Stock at an assumed "As Converted Equity Value" of $1 billion.
• New Renesas 2L Takeback Convertible Notes: Second-lien convertible notes to be issued to Renesas in an aggregate principal amount of $204 million.
  • The notes will bear interest at 2.5% cash and are convertible into New Common Stock for up to 24 months post-effective date at an assumed "As Converted Equity Value" of $1.5 billion.
• Renesas Warrants: Warrants to be issued to Renesas, exercisable for 5.0% of the New Common Stock at an "As Converted Equity Value" of $2.25 billion.
  • The warrants have a three-year term, which may be extended by one year if the Regulatory Trigger Deadline occurs, and include "Black Scholes" protection for two years.

New 2L Convertible Notes Rights Offering & Backstop Commitment

• The debtors will conduct a rights offering for up to $301.125 million of New 2L Convertible Notes, open to all holders of convertible notes claims.
• The offering is fully backstopped by certain parties pursuant to a Backstop Agreement. In exchange for their commitment, the Backstop Parties will receive a Backstop Premium of $30.25 million, payable in the form of additional New 2L Convertible Notes.
• Certain amounts of the rights offering are reserved exclusively for the backstop parties, including a 20% allocation for the Initial Backstop Parties' Premium and a 20% Backstop Holdback Allocation.

Renesas-Specific Terms

• The consummation of certain transactions involving Renesas is contingent upon obtaining various regulatory approvals, including from CFIUS and under antitrust and foreign investment laws.
• A "Regulatory Trigger Deadline" is defined as the earlier of a good faith agreement that approvals will not be obtained or two years from the effective date (extendable to three years by agreement).
• If Renesas does not receive the required approvals by the effective date, a "Distribution Event" occurs, and the parties will enter into a Disposition Agreement granting Renesas designation rights over the disposition of its consideration and the right to receive the proceeds.
• If the Regulatory Trigger Deadline occurs, Renesas becomes entitled to the Contingent Additional Consideration.
• If all regulatory approvals are obtained prior to the deadline, the Contingent Additional Consideration is distributed elsewhere:
  • $10 million of the contingent cash is returned to the reorganized debtors.
  • $5 million of the contingent cash is distributed to holders of Commitment Fee Claims.
  • The Incremental New 2L Takeback Notes are not issued.
  • The Contingent Shares are distributed to holders of existing equity interests.

Governance & Management

• New Board: The initial board of the Reorganized Parent will be determined by a Selection Committee composed of one existing director, the CEO, and three individuals from the Ad Hoc 26s/28s/29s Noteholder Group.
  • The CEO will be a member of the new board.
  • Renesas will be entitled to select one board member, pending requisite regulatory approval.
• Incentive Plans: The new board will adopt new incentive plans post-emergence.
  • A Management Incentive Plan will reserve 10% of the New Common Stock for officers and key employees. This includes an initial grant pool valued at approximately $40 million and an additional reserve pool valued at approximately $21 million.
  • A Long-Term Incentive Plan will reserve up to 5.0% of the New Common Stock for a broader employee group for fiscal years 2026 and 2027.

Other Terms

• Registration Rights: The Reorganized Parent will enter into a Registration Rights Agreement granting customary shelf, demand, and piggyback registration rights to certain recipients of new equity, including Renesas and the Consenting Convertible Noteholders.
• Restructuring Expenses: The reasonable and documented fees and expenses of the ad hoc group advisors, Renesas's advisors, and the note trustees will be paid in full in cash on the effective date.
• Releases and Exculpation: The plan provides for customary releases for the Released Parties, which include the debtors, consenting creditors, Renesas, and the backstop parties, among others. Parties may opt out of providing a release. The plan also includes an exculpation provision for the Exculpated Parties, limited to the debtors and their estates, for acts taken in connection with the chapter 11 cases.